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$75,000,000
CREDIT AGREEMENT
DATED AS OF AUGUST 1, 1996
AMONG
CKE RESTAURANTS, INC.
AS BORROWER
AND
THE FINANCIAL INSTITUTIONS NAMED HEREIN
AS INITIAL LENDERS
AND
NATIONSBANK OF TEXAS, N.A.
AS AGENT
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TABLE OF CONTENTS
Section Page
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms............................................................... 1
SECTION 1.02. Computation of Time Periods......................................................... 17
SECTION 1.03. Accounting Terms.................................................................... 17
SECTION 1.04. Other Definitional Provisions....................................................... 17
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Advances........................................................................ 17
(a) The Term Advances..................................................... 17
(b) Revolving A Advances.................................................. 18
(c) Revolving B Advances.................................................. 18
SECTION 2.02. Making the Advances................................................................. 18
(a) Initial Borrowings.................................................... 18
(b) Subsequent Revolving Borrowings....................................... 18
(c) Advances by Lenders................................................... 19
(d) Disbursement of Advances.............................................. 19
(e) Nature of Lenders' Obligations........................................ 19
SECTION 2.03. Repayment; Conversion of Revolving B Advances....................................... 19
(a) Term Advances......................................................... 19
(b) Revolving A Advances.................................................. 20
(c) Revolving B Advances.................................................. 20
(d) L/C Advances.......................................................... 20
SECTION 2.04. Reduction of the Revolving Commitments.............................................. 20
(a) Optional Reductions................................................... 20
(b) Mandatory Reductions of the L/C Sublimit.............................. 21
SECTION 2.05. Prepayments......................................................................... 21
(a) Optional Prepayments.................................................. 21
(b) Mandatory Prepayments................................................. 21
(c) Interest Payable on Amounts Prepaid................................... 22
SECTION 2.06. Interest............................................................................ 22
(a) Interest on Base Rate Advances........................................ 22
(b) Interest Periods for Eurodollar Rate Advances......................... 22
(c) Interest on Eurodollar Rate Advances.................................. 23
(d) Default Interest...................................................... 24
(e) Suspension of Eurodollar Rate Advances................................ 24
SECTION 2.07. Fees................................................................................ 25
(a) Commitment Fees....................................................... 25
(b) Upfront Fees.......................................................... 25
(c) Agent's Fees.......................................................... 25
(d) Absolute Obligation................................................... 25
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Section Page
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SECTION 2.08. Increased Costs, Etc................................................................ 26
(a) Increased Costs....................................................... 26
(b) Capital Requirements.................................................. 26
SECTION 2.09. Payments and Computations........................................................... 26
(a) Payments by Borrower.................................................. 26
(b) Computations.......................................................... 27
(c) Payments Assumed...................................................... 27
(d) Application of Payments Specified by the Borrower..................... 27
(e) Application of Payments Not Otherwise Specified....................... 27
(f) Payments on Business Days............................................. 27
(g) Payments From Borrower's Accounts..................................... 28
(h) Certain Terms......................................................... 28
SECTION 2.10. Taxes............................................................................... 28
(a) Withholding Taxes..................................................... 28
(b) Other Taxes........................................................... 28
(c) Indemnification....................................................... 28
(d) Evidence of Payment................................................... 28
(e) Foreign Lenders....................................................... 29
(f) Failure to Provide Forms.............................................. 29
(g) Change of Applicable Lending Office................................... 29
(h) Survival.............................................................. 29
SECTION 2.11. Sharing of Payments, Etc............................................................ 30
SECTION 2.12. Use of Proceeds..................................................................... 30
SECTION 2.13. Evidence of Debt.................................................................... 30
(a) Maintenance of Accounts by Lenders.................................... 30
(b) Maintenance of Accounts by Agent...................................... 30
ARTICLE III
AMOUNTS AND TERMS OF LETTERS OF CREDIT
SECTION 3.01. The Letter of Credit Subfacility.................................................... 31
SECTION 3.02. Issuance of Letters of Credit....................................................... 31
(a) Notice of Issuance.................................................... 31
(b) Conditions to Issuance................................................ 31
(c) Reports by Issuing Banks.............................................. 32
SECTION 3.03. Drawing and Reimbursement........................................................... 32
SECTION 3.04. Obligations Absolute................................................................ 32
SECTION 3.05. Letter of Credit Compensation....................................................... 33
SECTION 3.06. Use of Letters of Credit............................................................ 34
ARTICLE IV
CONDITIONS OF LENDING
SECTION 4.01. Conditions Precedent to Initial Borrowing........................................... 34
SECTION 4.02. Conditions Precedent to Each Borrowing and Issuance................................. 36
SECTION 4.03. Additional Conditions Precedent to each Revolving B Advance......................... 36
SECTION 4.04. Determinations Under Section 4.01 and 4.03.......................................... 38
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Section Page
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.01. Representations and Warranties of the Borrower...................................... 38
(a) Incorporation, Qualification, Corporate Power and Authority........... 38
(b) Capital Stock......................................................... 38
(c) Authorization; No Conflict or Violation; Compliance with Laws......... 38
(d) Approvals and Consents................................................ 39
(e) Enforceability........................................................ 39
(f) Financial Statements.................................................. 39
(g) Disclosure............................................................ 40
(h) Litigation............................................................ 40
(i) Use of Proceeds....................................................... 40
(j) Pension Plans......................................................... 40
(k) No Adverse Conditions................................................. 41
(l) Compliance with Environmental Laws.................................... 41
(m) No Burdensome Agreements.............................................. 42
(n) Tax Information....................................................... 42
(o) No Investment Company................................................. 42
(p) Solvency.............................................................. 42
(q) Debt of the Borrower and its Subsidiaries............................. 43
(r) Investments........................................................... 43
(s) Other Agreements...................................................... 43
ARTICLE VI
COVENANTS OF THE BORROWER
SECTION 6.01. Affirmative Covenants............................................................... 43
(a) Compliance with Laws, Etc............................................. 43
(b) Payment of Taxes, Etc................................................. 43
(c) Compliance with Environmental Laws.................................... 43
(d) Maintenance of Insurance.............................................. 44
(e) Preservation of Corporate Existence, Etc.............................. 44
(f) Visitation Rights..................................................... 44
(g) Keeping of Books...................................................... 44
(h) Maintenance of Properties, Etc........................................ 44
(i) Compliance with Terms of Leaseholds................................... 44
(j) Performance of Related Documents...................................... 44
(k) Transactions with Affiliates.......................................... 45
(l) Additional Loan Parties............................................... 44
SECTION 6.02. Negative Covenants.................................................................. 45
(a) Liens, Etc............................................................ 45
(b) Debt.................................................................. 46
(c) Lease Obligations..................................................... 47
(d) Mergers, Etc.......................................................... 47
(e) Sales, Etc. of Assets................................................. 47
(f) Acquisitions; Investments in Other Persons............................ 48
(g) Dividends, Etc........................................................ 49
(h) Change in Nature of Business.......................................... 50
(i) Charter Amendments.................................................... 50
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Section Page
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(j) Accounting Changes.................................................... 50
(k) Prepayments, Etc. of Debt............................................. 50
(l) Payment Restrictions Affecting Subsidiaries........................... 50
(m) Partnerships.......................................................... 50
SECTION 6.03. Reporting Requirements.............................................................. 50
(a) Default Notice........................................................ 50
(b) Quarterly Financials.................................................. 51
(c) Annual Financials..................................................... 51
(d) Annual Forecasts...................................................... 51
(e) ERISA Events.......................................................... 51
(f) Plan Terminations..................................................... 52
(g) Plan Annual Reports................................................... 51
(h) Multiemployer Plan Notices............................................ 52
(i) Litigation............................................................ 52
(j) Press Releases; Securities Reports.................................... 52
(k) Creditor Reports...................................................... 52
(l) Environmental Conditions.............................................. 52
(m) Other Information..................................................... 53
SECTION 6.04. Financial Covenants................................................................. 52
(a) Consolidated Tangible Net Worth....................................... 52
(b) Leverage Ratio........................................................ 53
(c) Fixed Charge Coverage Ratio........................................... 53
(d) Consolidated Funded Debt to Consolidated Total
Capitalization Ratio.................................................. 53
(e) Capital Expenditures.................................................. 53
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.01. Events of Default................................................................... 53
SECTION 7.02. Actions in Respect of the Letters of Credit Upon Default............................ 56
ARTICLE VIII
THE AGENT
SECTION 8.01. Authorization and Action............................................................ 56
SECTION 8.02. Agent's Reliance, Etc............................................................... 57
SECTION 8.03. NationsBank and Affiliates.......................................................... 57
SECTION 8.04. Lender Credit Decision.............................................................. 57
SECTION 8.05. Indemnification..................................................................... 57
SECTION 8.06. Successor Agents.................................................................... 58
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Amendments, Etc..................................................................... 58
SECTION 9.02. Notices, Etc........................................................................ 59
SECTION 9.03. No Waiver; Remedies................................................................. 59
SECTION 9.04. Costs and Expenses.................................................................. 59
SECTION 9.05. Right of Set-off.................................................................... 60
SECTION 9.06. Binding Effect...................................................................... 60
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Section Page
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SECTION 9.07. Assignments and Participations...................................................... 61
SECTION 9.08. Governing Law....................................................................... 63
SECTION 9.09. Execution in Counterparts........................................................... 63
SECTION 9.10. Confidentiality..................................................................... 63
SECTION 9.11. Waiver of Jury Trial................................................................ 63
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SCHEDULES AND EXHIBITS
SCHEDULES
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Schedule I Commitments, Etc.
Schedule 1.01(a) Existing Letters of Credit
Schedule 4.01(a) Surviving Debt
Schedule 5.01(b) Capital Stock
Schedule 5.01(n) Open Years
Schedule 5.01(q) Existing Debt
Schedule 5.01(r) Existing Investments
Schedule 5.01(s) Certain Agreements, Etc.
Schedule 6.02(a) Existing Liens
EXHIBITS
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Exhibit A Form of Assignment and Acceptance
Exhibit B Form of Notice of Borrowing
Exhibit C Form of Notice of Issuance
Exhibit D-1 Form of Revolving A Note
Exhibit D-2 Form of Revolving B Note
Exhibit D-3 Form of Term Note
Exhibit E Form of Guaranty
Exhibit F Form of Opinion of Borrower's Counsel
Exhibit G Form of Amendment to Guaranty
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CREDIT AGREEMENT
CREDIT AGREEMENT dated as of August 1, 1996, among CKE
RESTAURANTS, INC., a Delaware corporation (the "BORROWER"), the financial
institutions and other entities listed on the signature pages hereof as Lenders
(the "INITIAL LENDERS"), and NATIONSBANK OF TEXAS, N.A. ("NATIONSBANK"), as L/C
Bank (as hereinafter defined) and as agent (in such capacity, together with any
successor in such capacity appointed pursuant to Article VIII, the "AGENT") for
the Lenders and the Issuing Banks hereunder.
PRELIMINARY STATEMENTS
(1) The Borrower has requested, on the terms and conditions
set forth herein, (a) that the Lenders make Revolving A Advances (as hereinafter
defined) to the Borrower from time to time in an aggregate principal amount not
to exceed at any time outstanding the aggregate Revolving A Commitments (as
hereinafter defined) of the Lenders (less the aggregate amount of Letter of
Credit Obligations (as hereinafter defined) outstanding at such time), (b) that
the Lenders make Revolving B Advances (as hereinafter defined) to the Borrower
from time to time in an aggregate principal amount not to exceed at any time
outstanding the aggregate Revolving B Commitments (as hereinafter defined) of
the Lenders, (c) that the Lenders make Term Advances (as hereinafter defined) to
the Borrower on the Closing Date (as hereinafter defined) in an aggregate
principal amount not to exceed the aggregate Term Commitments (as hereinafter
defined) of the Lenders, and (d) that the L/C Bank issue Letters of Credit (as
hereinafter defined) for the account of the Borrower from time to time in an
aggregate Available Amount (as hereinafter defined) not to exceed at any time
outstanding the L/C Sublimit (as hereinafter defined).
(2) Subject to the terms and conditions set forth in this
Agreement, (a) the Lenders have agreed severally to make such Revolving A
Advances, Revolving B Advances and Term Advances to the Borrower, and (b) the
L/C Bank has agreed to issue such Letters of Credit.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements contained herein, and for other good and
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. CERTAIN DEFINED TERMS. As used in this
Agreement, the following terms shall have the following meanings (such meanings
to be equally applicable to both the singular and plural forms of the terms
defined):
"ACQUISITION" means the acquisition, in one transaction or a
series of transactions, by the Borrower or any of its Subsidiaries of (i)
greater than 50% of the Voting Stock, partnership or other equity interests of
any Person, or (ii) all or substantially all of the assets of any other Person
or of any division or business of any other Person.
"ADVANCE" means a Term Advance, a Revolving Advance or an L/C
Advance.
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"ADDITIONAL INVESTMENT AMOUNT" means (a) prior to the
repayment in full of the Term Advances, zero, and (b) after the repayment in
full of the Term Advances, the aggregate amount of Net Cash Proceeds received by
the Borrower after the date hereof and prior to the Revolving B Advance
Conversion Date from the sale or issuance of the Borrower's capital stock, minus
the amount of such Net Cash Proceeds, if any, required to be applied to prepay
the Term Advances pursuant to Section 2.05(b)(iii).
"AFFILIATE" means, as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common control
with such Person or is a director or officer of such Person. For purposes of
this definition, the term "control" (including the terms "controlling,"
"controlled by" and "under common control with") of a Person means the
possession, direct or indirect, of the power to vote 10% or more of the Voting
Stock of such Person or to direct or cause the direction of the management and
policies of such Person, whether through the ownership of Voting Stock, by
contract or otherwise.
"AGENT" has the meaning specified in the recital of parties to
this Agreement.
"AGENT'S ACCOUNT" means the account of the Agent maintained by
the Agent with NationsBank at its office at 901 Main Street, Dallas, Texas
75202, Account No. 129-2000-883, Attention: Marie Lancaster, Reference: CKE
Restaurants, Inc.
"APPLICABLE LENDING OFFICE" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a Base Rate Advance
and such Lender's Eurodollar Lending Office in the case of a Eurodollar Rate
Advance.
"APPLICABLE MARGIN" means with respect to any Base Rate
Advances or Eurodollar Rate Advances, a percentage per annum determined by
reference to the applicable Leverage Ratio as set forth below for each Interest
Type of Advance:
Base Rate Eurodollar Rate
Leverage Ratio Advances Advances
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less than 4.00:1.0 0.00% 1.25%
4.00:1.0 or greater, but less 0.00% 1.50%
than 4.50:1.0
4.50:1.0 or greater 0.25% 1.75%
provided, however, that, notwithstanding the foregoing, for purposes of
determining the Applicable Margin, the Leverage Ratio shall be deemed to be (i)
greater than or equal to 4.50 to 1.0 at all times when a Default has occurred
and is continuing based on the Borrower's failure to deliver any financial
statement or compliance certificate as and when required pursuant to Sections
6.03(b) or 6.03(c), as applicable, and (ii) 4.00 to 1.0 or greater but less than
4.50 to 1.0 at all times prior to the receipt by the Agent of the financial
statements and compliance certificate required by Section 6.03(b) for the fiscal
quarter of the Borrower ending November 4, 1996 (except that this clause (ii)
shall not be applicable if the foregoing clause (i) is applicable or the actual
Leverage Ratio is 4.50:1.0 or greater). For purposes of this Agreement, any
change in the Applicable Margin based on a change in the Leverage Ratio shall
be effective three Business Days after the date of receipt by the Agent of the
financial statements and compliance certificate required by Sections 6.03(b) or
6.03(c), as applicable, reflecting such change.
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"ARRANGER" means NationsBanc Capital Markets, Inc.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance
entered into by a Lender and an Eligible Assignee, and accepted by the Agent, in
accordance with Section 9.07 and in substantially the form of Exhibit A hereto.
"AVAILABLE AMOUNT" of any Letter of Credit means, at any time,
the maximum amount available to be drawn under such Letter of Credit at such
time (assuming compliance at such time with all conditions to drawing).
"BASE RATE" means a fluctuating interest rate per annum in
effect from time to time, which rate per annum shall at all times be equal to
the highest of: (a) the rate of interest announced publicly by NationsBank from
time to time as NationsBank's prime rate; and (b) 1/2 of one percent per annum
above the Federal Funds Rate.
"BASE RATE ADVANCE" means an Advance that bears interest as
provided in Section 2.06(a)(i).
"BORROWER" has the meaning set forth in the recital of parties
to this Agreement.
"BORROWER'S ACCOUNT" means the account of the Borrower
maintained by the Borrower with NationsBank at its office at 901 Main Street,
Dallas, Texas 75202, Account No. 375 06 33478.
"BORROWING" means a Term Borrowing or a Revolving Borrowing.
"BUSINESS DAY" means a day of the year on which banks are not
required or authorized by law to close in Los Angeles, California or Dallas,
Texas and, if the applicable Business Day relates to any Eurodollar Rate
Advances, on which dealings are carried on in the London interbank market.
"CAPITAL EXPENDITURES" means, for any period, the sum, without
duplication, of (a) all expenditures during such period for equipment, fixed
assets, real property or improvements (excluding any such equipment, assets or
property acquired in a Permitted Acquisition), or for replacements or
substitutions therefor or additions thereto, that have a useful life of more
than one year plus (b) the aggregate principal amount of all Debt (including the
principal component of obligations under Capitalized Leases) assumed or incurred
in connection with any such expenditures.
"CAPITALIZED LEASES" has the meaning specified in clause (e)
of the definition of Debt.
"CASH EQUIVALENTS" means any of the following, to the extent
owned by the Borrower free and clear of all Liens and having a maturity of not
greater than 180 days (unless otherwise specified) from the date of acquisition
thereof: (a) readily marketable direct obligations of the Government of the
United States or any agency or instrumentality thereof or obligations
unconditionally guaranteed by the full faith and credit of the Government of the
United States, in each case having a maturity of not greater than 360 days from
the date of acquisition thereof, (b) insured certificates of deposit of or time
deposits with any commercial bank that (i) is a Lender or a member of the
Federal Reserve System, (ii) issues (or the parent of which issues) commercial
paper rated as described in clause (c), (iii) is organized under the laws of the
United States or any State thereof and (iv) has combined capital and surplus of
at least $1 billion or (c) commercial paper (other than commercial paper issued
by or on behalf of the Borrower or any of its Affiliates) in an aggregate amount
of no more than $5,000,000 per issuer outstanding at any time, issued by any
corporation organized under the laws of any State of the United States and rated
at
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least "Prime-2" (or the then equivalent grade) by Moody's Investors Services
or "A-2" (or the then equivalent grade) by Standard & Poor's Ratings Group.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended or supplemented from time to
time, and the regulations promulgated pursuant thereto.
"CLOSING DATE" means the date on which each of the conditions
in Section 4.01 is satisfied or waived.
"COMMITMENT" means a Term Commitment or a Revolving
Commitment.
"COMMITMENT FEE PERCENTAGE" means a percentage per annum
determined by reference to the Leverage Ratio as set forth below:
Commitment Fee
Leverage Ratio Percentage
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less than 4.00:1.0 0.25%
4.00:1.0 or greater 0.375%
but less than 4.50:1.0
4.50:1.0 or greater 0.50%
provided, however, that, notwithstanding the foregoing, for purposes of
determining the Commitment Fee Percentage, the Leverage Ratio shall be deemed to
be (i) greater than or equal to 4.50 to 1.0 at all times when a Default has
occurred and is continuing based on the Borrower's failure to deliver any
financial statement or compliance certificate as and when required pursuant to
Sections 6.03(b) or 6.03(c), as applicable, and (ii) 4.00 to 1.0 or greater but
less than 4.50 to 1.0 at all times prior to the receipt by the Agent of the
financial statements and compliance certificate required by Section 6.03(b) for
the fiscal quarter of the Borrower ending November 4, 1996 (except that this
clause (ii) shall not be applicable if the foregoing clause (i) is applicable or
the actual Leverage Ratio is 4.50 to 1.0 or greater). For purposes of this
Agreement, any change in the Commitment Fee Percentage based on a change in the
Leverage Ratio shall be effective three Business Days after the date of receipt
by the Agent of the financial statements and compliance certificate required by
Sections 6.03(b) or 6.03(c), as applicable, reflecting such change.
"CONFIDENTIAL INFORMATION" means information that the Borrower
furnishes to the Agent or any Lender in a writing designated as confidential,
but does not include any such information that is or becomes generally available
to the public other than as a result of a breach by the Agent or any Lender of
its obligations hereunder or that is or becomes available to the Agent or such
Lender from a source other than the Borrower.
"CONTROLLING STOCKHOLDERS" means (i) William P. Foley II, (ii)
Cannae Limited Partnership, a Nevada limited partnership, (iii) Fidelity
National Financial, Inc., a Delaware corporation, and (iv) any other Person
that, directly or indirectly, controls, is controlled by or is under common
control with any of the foregoing. For purposes of this definition, the term
"control" (including the terms "controlled by" and "under common control with")
of a Person means the possession, direct or indirect,
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of the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of Voting Stock, by contract or
otherwise.
"CONSOLIDATED" refers to the consolidation of accounts in
accordance with GAAP.
"CONSOLIDATED FUNDED DEBT" means, as of any time of
determination, all Funded Debt of the Borrower and its Subsidiaries at such time
determined on a Consolidated basis.
"CONSOLIDATED NET INCOME" means, for any period, the net
earnings (or loss) after taxes of the Borrower and its Subsidiaries on a
Consolidated basis determined for such period in conformity with GAAP.
"CONSOLIDATED TANGIBLE NET WORTH" means the excess of (i) the
total assets of the Borrower and its Subsidiaries determined on a Consolidated
basis in accordance with GAAP minus goodwill and any other items that are
classified as intangibles in accordance with GAAP, over (ii) all liabilities of
the Borrower and its Subsidiaries determined on a Consolidated basis in
accordance with GAAP.
"CONSOLIDATED TOTAL CAPITALIZATION" means, at any time of
determination, the sum of (i) Consolidated Funded Debt, and (ii) Consolidated
Tangible Net Worth, in each case, as of such time.
"CONVERSION", "CONVERT" and "CONVERTED" each refer to a
conversion of Advances of one Interest Type into Advances of the other Interest
Type pursuant to Section 2.06.
"CONVERTED REVOLVING B ADVANCE" has the meaning specified in
Section 2.03(c).
"CURRENCY HEDGING AGREEMENTS" means currency swap agreements,
currency future or option contracts and other similar agreements.
"CURRENT ASSETS" of any Person means all assets of such Person
that would, in accordance with GAAP, be classified as current assets of a
company conducting a business the same as or similar to that of such Person,
after deducting adequate reserves in each case in which a reserve is proper in
accordance with GAAP.
"CURRENT LIABILITIES" of any Person means (a) all Debt of such
Person that by its terms is payable on demand or matures within one year after
the date of determination (excluding any Debt renewable or extendible, at the
option of such Person, to a date more than one year from such date or arising
under a revolving credit or similar agreement that obligates the lender or
lenders to extend credit during a period of more than one year from such date)
and (b) all other items (including taxes accrued as estimated) that in
accordance with GAAP would be classified as current liabilities of such Person.
"DEBT" of any Person means, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all Obligations of such
Person for the deferred purchase price of property or services (other than trade
payables not overdue by more than 60 days incurred in the ordinary course of
such Person's business), (c) all Obligations of such Person evidenced by notes,
bonds, debentures or other similar instruments, (d) all Obligations of such
Person created or arising under any conditional sale or other title retention
agreement with respect to property acquired by such Person (even though the
rights and remedies of the seller or lender under such agreement in the event of
default are limited to repossession or sale of such property), (e) all
Obligations of such Person as lessee under leases that have been or should be,
in accordance with GAAP, recorded as capital leases ("CAPITALIZED LEASES"), (f)
all
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Obligations, contingent or otherwise, of such Person under acceptance,
letter of credit or similar facilities, (g) all Obligations of such Person to
purchase, redeem, retire, defease or otherwise make any payment in respect of
any capital stock of or other ownership or profit interest in such Person or any
other Person or any warrants, rights or options to acquire such capital stock,
valued, in the case of Redeemable Preferred Stock, at the greater of its
voluntary or involuntary liquidation preference plus accrued and unpaid
dividends, (h) all Obligations of such Person in respect of Hedge Agreements,
(i) all Debt of others referred to in clauses (a) through (h) above guaranteed
directly or indirectly in any manner by such Person, or in effect guaranteed
directly or indirectly by such Person through an agreement (i) to pay or
purchase such Debt or to advance or supply funds for the payment or purchase of
such Debt, (ii) to purchase, sell or lease (as lessee or lessor) property, or to
purchase or sell services, primarily for the purpose of enabling the debtor to
make payment of such Debt or to assure the holder of such Debt against loss,
(iii) to supply funds to or in any other manner invest in the debtor (including
any agreement to pay for property or services irrespective of whether such
property is received or such services are rendered) or (iv) otherwise to assure
a creditor against loss, and (j) all Debt referred to in clauses (a) through (h)
above secured by (or for which the holder of such Debt has an existing right,
contingent or otherwise, to be secured by) any Lien on property (including,
without limitation, accounts and contract rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of such Debt
(it being understood that for purposes of this clause (j) the principal amount
of such Debt attributed to such Person shall be the fair market value of such
property).
"DEFAULT" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be given or
time elapse or both.
"DEFAULT RATE" has the meaning set forth in Section 2.06(d).
"DESIGNATED INVESTMENT" means any Investment made after the
date hereof in a Person engaged, at the time of such Investment, primarily in
the business that the Borrower is engaged in on the date hereof.
"DOMESTIC LENDING OFFICE" means, with respect to any Lender,
the office of such Lender specified as its "Domestic Lending Office" opposite
its name on Schedule I hereto or in the Assignment and Acceptance pursuant to
which it became a Lender, or such other office of such Lender as such Lender may
from time to time specify to the Borrower and the Agent.
"EBITDAR" means, for any period, net income (or net loss)
plus, to the extent deducted in determining such net income (or net loss), the
sum of (a) interest expense, (b) income tax expense, (c) depreciation expense,
(d) amortization expense, and (e) rent expense, in each case determined in
accordance with GAAP for such period.
"ELIGIBLE ASSIGNEE" means (a) any Lender and any Affiliate of
any Lender, and (b) any commercial bank, savings and loan association, savings
bank, finance company, insurance company, mutual fund or other financial
institution, fund or investor which has been approved in writing (or, in the
case of the Borrower, deemed approved as provided below) by the Borrower (except
that no such approval of the Borrower shall be required if an Event of Default
has occurred and is continuing) and the Agent as an Eligible Assignee for
purposes of this Agreement, provided that in each such case such approval shall
not be unreasonably withheld, and provided, further, that if the Borrower is
requested at any time to approve any Person as an Eligible Assignee hereunder
and the Agent has not received written notice from the Borrower, within three
Business Days of such request, that the Borrower does not approve such Person as
an Eligible Assignee, the Borrower shall be deemed to have approved such Person
as an Eligible Assignee.
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"ENVIRONMENTAL ACTION" means any administrative, regulatory or
judicial action, suit, demand, demand letter, claim, notice of non-compliance or
violation, investigation, proceeding, consent order or consent agreement
relating in any way to any Environmental Law or any Environmental Permit
including, without limitation, (a) any claim by any governmental or regulatory
authority for enforcement, cleanup, removal, response, remedial or other actions
or damages pursuant to any Environmental Law and (b) any claim by any third
party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from Hazardous Materials or arising
from alleged injury or threat of injury to health, safety or the environment.
"ENVIRONMENTAL LAW" means any federal, state or local law,
rule, regulation, order, writ, judgment, injunction, decree, determination or
award relating to the environment, health, safety or Hazardous Materials,
including, without limitation, CERCLA, the Resource Conservation and Recovery
Act, the Hazardous Materials Transportation Act, the Clean Water Act, the Toxic
Substances Control Act, the Clean Air Act, the Safe Drinking Water Act, the
Atomic Energy Act, the Federal Insecticide, Fungicide and Rodenticide Act and
the Occupational Safety and Health Act.
"ENVIRONMENTAL PERMIT" means any permit, approval,
identification number, license or other authorization required under any
Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA AFFILIATE" of any Person means any other Person that
for purposes of Title IV of ERISA is a member of such Person's controlled group,
or under common control with such Person, within the meaning of Section 414 of
the Internal Revenue Code.
"ERISA EVENT" with respect to any Person means (a) the
occurrence of a reportable event, within the meaning of Section 4043 of ERISA,
with respect to any Plan of such Person or any of its ERISA Affiliates unless
the 30-day notice requirement with respect to such event has been waived by the
PBGC; (b) the provision by the administrator of any Plan of such Person or any
of its ERISA Affiliates of a notice of intent to terminate such Plan, pursuant
to Section 4041(a)(2) of ERISA (including any such notice with respect to a plan
amendment referred to in Section 4041(e) of ERISA); (c) the cessation of
operations at a facility of such Person or any of its ERISA Affiliates in the
circumstances described in Section 4062(e) of ERISA; (d) the withdrawal by such
Person or any of its ERISA Affiliates from a Multiple Employer Plan during a
plan year for which it was a substantial employer, as defined in Section
4001(a)(2) of ERISA; (e) the failure by such Person or any of its ERISA
Affiliates to make a payment to a Plan required under Section 302(f)(1) of
ERISA; (f) the adoption of an amendment to a Plan of such Person or any of its
ERISA Affiliates requiring the provision of security to such Plan, pursuant to
Section 307 of ERISA; or (g) the institution by the PBGC of proceedings to
terminate a Plan of such Person or any of its ERISA Affiliates, pursuant to
Section 4042 of ERISA, or the occurrence of any event or condition described in
Section 4042 of ERISA that could constitute grounds for the termination of, or
the appointment of a trustee to administer, such Plan.
"EUROCURRENCY LIABILITIES" has the meaning specified in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"EURODOLLAR LENDING OFFICE" means, with respect to any Lender,
the office of such Lender specified as its "Eurodollar Lending Office" opposite
its name on Schedule I hereto or in the Assignment and Acceptance pursuant to
which it became a Lender (or, if no such office is specified, its
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15
Domestic Lending Office), or such other office of such Lender as such Lender may
from time to time specify to the Borrower and the Agent.
"EURODOLLAR RATE" means, for any Eurodollar Rate Advance for
any Interest Period therefor, an interest rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) equal to the rate per annum obtained by
dividing (a) the rate per annum appearing on Telerate Page 3750 (or any
successor page) as the London interbank offered rate for deposits in U.S.
dollars at approximately 11:00 a.m. (London time) two Business Days prior to the
first day of such Interest Period for a term comparable to such Interest Period
by (b) a percentage equal to 100% minus the Eurodollar Rate Reserve Percentage
for such Interest Period. If for any reason the rate described in the foregoing
clause (a) is not available at the time of determination of the Eurodollar Rate
for any Eurodollar Rate Advances for any Interest Period, the term "Eurodollar
Rate" shall mean, for any such Eurodollar Rate Advances for any such Interest
Period therefor, an interest rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) equal to the rate per annum obtained by dividing (i)
the rate per annum appearing on Reuters Screen LIBO Page as the London interbank
offered rate for deposits in U.S. dollars at approximately 11:00 a.m. (London
time) two Business Days prior to the first day of such Interest Period for a
term comparable to such Interest Period (provided, however, if more than one
rate is specified on Reuters Screen LIBO Page, the applicable rate shall be the
arithmetic mean of all such rates) by (ii) a percentage equal to 100% minus the
Eurodollar Rate Reserve Percentage for such Interest Period.
"EURODOLLAR RATE ADVANCE" means an Advance that bears interest
as provided in Section 2.06(a)(ii).
"EURODOLLAR RATE RESERVE PERCENTAGE" means, for any Interest
Period for any Eurodollar Rate Advance, the reserve percentage applicable two
Business Days before the first day of such Interest Period under regulations
issued from time to time by the Board of Governors of the Federal Reserve System
(or any successor) for determining the maximum reserve requirement (including,
without limitation, any emergency, supplemental or other marginal reserve
requirement) for a member bank of the Federal Reserve System in New York City
with respect to liabilities or assets consisting of or including Eurocurrency
Liabilities (or with respect to any other category of liabilities that includes
deposits by reference to which the interest rate on Eurodollar Rate Advances is
determined) having a term equal to such Interest Period.
"EVENTS OF DEFAULT" has the meaning specified in Section 7.01.
"EXCESS CASH FLOW" means, for any period, an amount equal to
the sum of (i) Consolidated Net Income for such period plus (ii) the aggregate
amount of all non-cash charges deducted in arriving at such Consolidated Net
Income less (iii) the aggregate amount of all non-cash credits included in
arriving at such Consolidated Net Income less (iv) cash Capital Expenditures of
the Borrower and its Subsidiaries during such period (but only to the extent
permitted under Section 6.04(e)) less (v) the amount, if any, by which the
aggregate principal amount of Funded Debt (other than Debt in respect of the
Revolving A Advances and, prior to the Revolving B Advance Conversion Date, the
Revolving B Advances) of the Borrower and its Subsidiaries at the beginning of
such period exceeds the aggregate principal amount of Funded Debt (other than
Debt in respect of the Revolving A Advances and, prior to the Revolving B
Advance Conversion Date, the Revolving B Advances) of the Borrower and its
Subsidiaries at the end of such period.
"EXCLUDED RESALE" means any sale by the Borrower or any of its
Subsidiaries of a retail outlet of the Borrower or such Subsidiary so long as
(i) such retail outlet was acquired by the Borrower
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or such Subsidiary from a franchisee with the intent of reselling such outlet,
and (ii) such sale occurs within 9 months of the acquisition of such outlet by
the Borrower or such Subsidiary.
"EXISTING CREDIT AGREEMENT" means the Business Loan Agreement
dated as of October 31, 1994 among Bank of America National Trust and Savings
Association, the Borrower, Carl Karcher Enterprises, Inc. and Boston Pacific,
Inc., as amended to date.
"EXISTING ISSUING BANK" means Bank of America National Trust
and Savings Association.
"EXISTING LETTER OF CREDIT" means each letter of credit issued
for the account of the Borrower or Carl Karcher Enterprises, Inc. by the
Existing Issuing Bank and identified on Schedule 1.01(a).
"FACILITY" means the Term Facility, the Revolving A Facility
or the Revolving B Facility.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day that is a Business Day, the average of the quotations for such day
for such transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"FUNDED DEBT" of any Person means Debt in respect of the
Advances, in the case of the Borrower, and all other Debt of such Person that by
its terms matures more than one year after the date of determination or matures
within one year from such date but is renewable or extendible, at the option of
such Person, to a date more than one year after such date or arises under a
revolving credit or similar agreement that obligates the lender or lenders to
extend credit during a period of more than one year after such date, including,
without limitation, all amounts of Funded Debt of such Person required to be
paid or prepaid within one year after the date of determination.
"GAAP" has the meaning specified in Section 1.03.
"GUARANTOR" means each Subsidiary of the Borrower that has
executed the Guaranty or that has executed an amendment to the Guaranty pursuant
to Section 6.01(l).
"GUARANTY" has the meaning specified in Section 4.01(e)(viii).
"HAZARDOUS MATERIALS" means (a) petroleum or petroleum
products, natural or synthetic gas, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation and radon gas, (b) any substances
defined as or included in the definition of "hazardous substances," "hazardous
wastes," "hazardous materials," "extremely hazardous wastes," "restricted
hazardous wastes," "toxic substances," "toxic pollutants," "contaminants" or
"pollutants," or words of similar import, under any Environmental Law and (c)
any other substance exposure to which is regulated under any Environmental Law.
"HEDGE AGREEMENTS" means Interest Rate Contracts and Currency
Hedging Agreements.
"INDEMNIFIED PARTY" has the meaning specified in Section
9.04(b).
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"INFORMATION MEMORANDUM" means the information memorandum
dated May 1996 used by the Agent in connection with the syndication of the
Commitments.
"INITIAL LENDERS" has the meaning specified in the recital of
parties to this Agreement.
"INSUFFICIENCY" means, with respect to any Plan, the amount,
if any, of its unfunded benefit liabilities, as defined in Section 4001(a)(18)
of ERISA.
"INTEREST PERIOD" has the meaning specified in Section
2.06(b).
"INTEREST RATE CONTRACTS" means interest rate swap, cap or
collar agreements, interest rate future or option contracts and other similar
agreements.
"INTEREST TYPE" refers to the distinction between Advances
bearing interest at the Base Rate and Advances bearing interest at the
Eurodollar Rate.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, as amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"INVESTMENT" in any Person means any loan or advance to such
Person, any purchase or other acquisition of any capital stock, warrants,
rights, options, obligations or other securities of such Person, any capital
contribution to such Person or any other investment in such Person, including,
without limitation, any arrangement pursuant to which the investor incurs Debt
of the types referred to in clauses (i) and (j) of the definition of "Debt" in
respect of such Person.
"ISSUE" means, with respect to any Letter of Credit, either
issue such Letter of Credit, extend the expiry of such Letter of Credit (other
than any such extension occurring pursuant to the terms of such Letter of
Credit), renew such Letter of Credit (other than any such renewal occurring
pursuant to the terms of such Letter of Credit), or increase the amount of such
Letter of Credit, and the terms "Issued", "Issuing", and "Issuance" shall have
corresponding meanings.
"ISSUING BANK" means the L/C Bank and, with respect to the
Existing Letters of Credit only, the Existing Issuing Bank (it being understood
that, at such time as no Existing Letter of Credit remains outstanding and all
Letter of Credit Obligations and other Obligations in respect of Existing
Letters of Credit have been satisfied, the Existing Issuing Bank shall cease to
be an Issuing Bank for purposes of this Agreement).
"LEASE EXPENSE AMOUNT" means, at any time of determination,
the product of (i) the aggregate rent expense for the Borrower and its
Subsidiaries on a Consolidated basis for the period of four consecutive fiscal
quarters of the Borrower and its Subsidiaries ending as of the then most
recently ended fiscal quarter multiplied by (ii) eight.
"LENDER PARTY" means any Lender or any Issuing Bank.
"LENDERS" means the Initial Lenders and each Eligible Assignee
that shall become a party hereto pursuant to Section 9.07.
"L/C ADVANCE" means a payment made by an Issuing Bank under a
Letter of Credit.
"L/C BANK" means NationsBank in its capacity as an Issuing
Bank.
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"L/C CASH COLLATERAL ACCOUNT" has the meaning specified in the
Section 7.02.
"L/C RELATED DOCUMENTS" has the meaning specified in Section
3.04.
"L/C SUBLIMIT" means $20,000,000 as such amount may be reduced
pursuant to Section 2.04(b).
"LETTER OF CREDIT" means each Existing Letter of Credit and
each letter of credit issued hereunder.
"LETTER OF CREDIT AGREEMENT" has the meaning specified in
Section 3.02.
"LETTER OF CREDIT OBLIGATIONS" means, as of any date of
determination with respect to any Letter of Credit, the sum of (a) the then
outstanding Available Amount of such Letter of Credit, and (b) the aggregate
amount of the Unreimbursed Letter of Credit Liability thereunder.
"LETTER OF CREDIT SUBFACILITY" has the meaning specified in
Section 3.01.
"LEVERAGE RATIO" means, at any time of determination, the
ratio of (i) Total Adjusted Debt as of the last day of the then most recently
ended fiscal quarter of the Borrower to (ii) EBITDAR of the Borrower and its
Subsidiaries on a Consolidated basis for the period of four consecutive fiscal
quarters of the Borrower ending as of the then most recently ended fiscal
quarter of the Borrower.
"LIEN" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance on title
to real property.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Guaranty
and each Letter of Credit Agreement.
"LOAN PARTIES" means the Borrower and each Guarantor.
"MARGIN STOCK" has the meaning specified in Regulation U.
"MATERIAL ADVERSE CHANGE" means any material adverse change in
the business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower and its Subsidiaries taken as a whole.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
(a) the business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower and its Subsidiaries taken as a whole,
(b) the rights and remedies of the Agent or any Lender under any Loan Document
or (c) the ability of any Loan Party to perform its material Obligations under
any Loan Document to which it is or is to be a party.
"MULTIEMPLOYER PLAN" of any Person means a multiemployer plan,
as defined in Section 4001(a)(3) of ERISA, to which such Person or any of its
ERISA Affiliates is making or accruing an obligation to make contributions, or
has within any of the preceding five plan years made or accrued an obligation to
make contributions.
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"MULTIPLE EMPLOYER PLAN" of any Person means a single employer
plan, as defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of such Person or any of its ERISA Affiliates and at least one Person
other than such Person and its ERISA Affiliates or (b) was so maintained and in
respect of which such Person or any of its ERISA Affiliates could have liability
under Section 4064 or 4069 of ERISA in the event such plan has been or were to
be terminated.
"NATIONSBANK" has the meaning set forth in the recital of
parties hereto.
"NET CASH PROCEEDS" means, with respect to any sale, lease,
transfer or other disposition of any asset or the sale or issuance of any Debt
or capital stock, any securities convertible into or exchangeable for capital
stock or any warrants, rights or options to acquire capital stock by any Person,
the aggregate amount of cash received from time to time by or on behalf of such
Person in connection with such transaction after deducting therefrom only (a)
reasonable and customary brokerage commissions, underwriting fees and discounts,
legal fees, finder's fees and other similar fees and commissions and (b) the
amount of taxes payable in connection with or as a result of such transaction
and (c) the amount of any Debt secured by a Lien on such asset that, by the
terms of such transaction, is required to be repaid upon such disposition, in
each case with respect to foregoing clauses (a) and (c) to the extent, but only
to the extent, that the amounts so deducted are, at the time of receipt of such
cash, actually paid to a Person that is not an Affiliate and are properly
attributable to such transaction or to the asset that is the subject thereof.
"NOTE" means a Term Note or a Revolving Note.
"NOTICE OF BORROWING" means a notice in substantially the form
of Exhibit B.
"NOTICE OF ISSUANCE" means a notice in substantially the form
of Exhibit C.
"OBLIGATION" means, with respect to any Person, any obligation
of such Person of any kind, including, without limitation, any liability of such
Person on any claim, whether or not the right of any creditor to payment in
respect of such claim is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, disputed, undisputed, legal, equitable, secured or
unsecured, and whether or not such claim is discharged, stayed or otherwise
affected by any proceeding referred to in Section 7.01(f). Without limiting the
generality of the foregoing, the Obligations of the Loan Parties under the Loan
Documents include (a) the obligation to pay principal, interest, Letter of
Credit commissions, charges, expenses, fees, attorneys' fees and disbursements,
indemnities and other amounts payable by any Loan Party under any Loan Document
and (b) the obligation to reimburse any amount in respect of any of the
foregoing that any Lender, in its sole discretion, may elect to pay or advance
on behalf of such Loan Party.
"OPEN YEAR" has the meaning specified in Section 5.01(n).
"OTHER TAXES" has the meaning specified in Section 2.10(b).
"PBGC" means the Pension Benefit Guaranty Corporation.
"PERMITTED ACQUISITION" means any non-hostile Acquisition
(including the Summit Acquisition) so long as the Person acquired in connection
therewith is engaged primarily in, or the assets or business acquired in
connection therewith relate primarily to, the business of the Borrower on the
date of this Agreement.
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"PERMITTED ACQUISITION FINANCING" means financing for a
portion of a Permitted Acquisition as disclosed to the Lenders prior to the
date hereof and consisting of either (a) Debt incurred by the Borrower, any of
its Subsidiaries or the Person to be acquired in such Permitted Acquisition,
which Debt may be incurred in connection with such Permitted Acquisition, or
(b) a sale-leaseback transaction involving the sale for fair market value of
assets of the Person to be acquired (and not any other assets of the Borrower
and its Subsidiaries) with a fair market value not in excess of $15,000,000 and
the lease of such assets by such Person (or by the Borrower or any of its
Subsidiaries) for lease payments not exceeding $2,500,000 in any period of 12
consecutive months. The Obligations in respect of the Permitted Acquisition
Financing must be incurred, if at all, on or prior to December 31, 1996. There
may not be more than one Permitted Acquisition Financing during the term of
this Agreement.
"PERMITTED LIENS" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding shall have
been commenced (or, if any such proceeding shall have been commenced, such of
the following which are reserved for in an amount equal to the full amount of
the related claim on the Consolidated balance sheet of the Borrower and its
Subsidiaries and which are being diligently contested in good faith): (a) Liens
for taxes, assessments and governmental charges or levies to the extent not
required to be paid under Section 6.01(b) hereof; (b) Liens imposed by law, such
as materialmen's, mechanics', carriers', workmen's and repairmen's Liens and
other similar Liens arising in the ordinary course of business securing
obligations that are not overdue for a period of more than 30 days; (c) pledges
or deposits to secure obligations under workers' compensation laws or similar
legislation or to secure public or statutory obligations; (d) easements, rights
of way and other encumbrances on title to real property that do not render title
to the property encumbered thereby unmarketable or materially adversely affect
the use of such property for its intended purposes; and (e) Liens securing
judgments that do not constitute an Event of Default hereunder.
"PERMITTED SUBORDINATED DEBT" means unsecured Debt of the
Borrower (and not of any Subsidiary of the Borrower) incurred after the date
hereof (i) with respect to which no principal payments are due prior to the date
which is one year and one day after the Termination Date, and (ii) which is
subordinated in right of payment to the Borrower's Obligations under the Loan
Documents on, and is otherwise subject to, terms and conditions (including,
without limitation, terms in respect of maturities, covenants, defaults and
remedies and interest rates) approved in writing by the Agent and the Required
Lenders.
"PERSON" means an individual, partnership, limited liability
company, limited liability partnership, corporation (including a business
trust), joint stock company, trust, unincorporated association, joint venture or
other entity, or a government or any political subdivision or agency thereof.
"PLAN" means a Single Employer Plan or a Multiple Employer
Plan.
"PREFERRED STOCK" means, with respect to any corporation,
capital stock issued by such corporation that is entitled to a preference or
priority over any other capital stock issued by such corporation upon any
distribution of such corporation's assets, whether by dividend or upon
liquidation.
"PRO RATA SHARE" of any amount means, with respect to any
Lender at any time, the product of (a) a fraction the numerator of which is such
Lender's Revolving A Commitment (without giving effect to any termination
thereof pursuant to Section 7.01) at such time and the denominator of which is
the Revolving A Facility (without giving effect to any termination of
Commitments pursuant to Section 7.01) at such time times (b) such amount.
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"REDEEMABLE" means, with respect to any capital stock, Debt or
other right or Obligation, any such right or Obligation that (a) the issuer has
undertaken to redeem at a fixed or determinable date or dates, whether by
operation of a sinking fund or otherwise, or upon the occurrence of a condition
not solely within the control of the issuer or (b) is redeemable at the option
of the holder.
"REGISTER" has the meaning specified in Section 9.07(c).
"REGULATION U" means Regulation U of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"RELATED DOCUMENTS" means each of the documents and
instruments related to any Permitted Acquisition.
"REQUIRED LENDERS" means at any time Lenders owed or holding
greater than 66-2/3% of the sum of (a) the aggregate principal amount of the
Advances outstanding at such time and (b) the aggregate Available Amount of all
Letters of Credit outstanding at such time, or, if no such principal amount and
no Letters of Credit are outstanding at such time, Lenders holding greater than
66-2/3% of the aggregate Commitments under all the Facilities at such time. For
purposes of this definition, the Available Amount of each Letter of Credit shall
be considered to be owed to the Lenders ratably in accordance with their
respective Revolving A Commitments.
"REVOLVING ADVANCE" means a Revolving A Advance or a Revolving
B Advance.
"REVOLVING A ADVANCE" has the meaning specified in Section
2.01(b).
"REVOLVING B ADVANCE" has the meaning specified in Section
2.01(c) and shall include, after the Revolving B Advance Conversion Date, all
Converted Revolving B Advances.
"REVOLVING B ADVANCE CONVERSION DATE" has the meaning
specified in Section 2.03(c).
"REVOLVING A BORROWING" means a borrowing consisting of
simultaneous Revolving A Advances of the same Interest Type made by the Lenders.
"REVOLVING B BORROWING" means a borrowing consisting of
simultaneous Revolving B Advances of the same Interest Type made by the Lenders.
"REVOLVING BORROWING" means a Revolving A Borrowing or a
Revolving B Borrowing.
"REVOLVING COMMITMENT" means a Revolving A Commitment or a
Revolving B Commitment.
"REVOLVING A COMMITMENT" means, (i) with respect to any Lender
listed on Schedule I, the amount set forth opposite such Lender's name on
Schedule I under the caption "Revolving A Commitment," (ii) with respect to any
Lender not listed on Schedule I hereto, the amount set forth in the Assignment
and Acceptance pursuant to which such Person became a Lender hereunder, or (iii)
if any of such Lenders has entered into one or more Assignments and Acceptances,
the amount set forth for such Lender in the Register maintained by the Agent
pursuant to Section 9.07(c) as such Lender's "Revolving A Commitment", in the
case of each of the foregoing clauses (i), (ii) and (iii), as such amount may be
reduced at or prior to such time pursuant to Section 2.04.
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"REVOLVING B COMMITMENT" means, (i) with respect to any Lender
listed on Schedule I, the amount set forth opposite such Lender's name on
Schedule I under the caption "Revolving B Commitment," (ii) with respect to any
Lender not listed on Schedule I hereto, the amount set forth in the Assignment
and Acceptance pursuant to which such Person became a Lender hereunder, or (iii)
if any of such Lenders has entered into one or more Assignments and Acceptances,
the amount set forth for such Lender in the Register maintained by the Agent
pursuant to Section 9.07(c) as such Lender's "Revolving B Commitment", in the
case of each of the foregoing clauses (i), (ii) and (iii), as such amount may be
reduced at or prior to such time pursuant to Section 2.04.
"REVOLVING A COMMITMENT TERMINATION DATE" means the earlier of
July 31, 2001 and the date of termination in whole of the Revolving A
Commitments pursuant to Section 2.04 or 7.01.
"REVOLVING B COMMITMENT TERMINATION DATE" means the earlier of
July 31, 1998 and the date of termination in whole of the Revolving B
Commitments pursuant to Section 2.04 or 7.01.
"REVOLVING A FACILITY" means, at any time, the aggregate
amount of the Lenders' Revolving A Commitments at such time.
"REVOLVING B FACILITY" means, at any time, the aggregate
amount of the Lenders' Revolving B Commitments at such time.
"REVOLVING A NOTE" means a promissory note of the Borrower
payable to the order of any Lender, in substantially the form of Exhibit D-1
hereto, evidencing the aggregate indebtedness of the Borrower to such Lender
resulting from the Revolving A Advances made by such Lender.
"REVOLVING B NOTE" means a promissory note of the Borrower
payable to the order of any Lender, in substantially the form of Exhibit D-2
hereto, evidencing the aggregate indebtedness of the Borrower to such Lender
resulting from the Revolving B Advances made by such Lender.
"SINGLE EMPLOYER PLAN" of any Person means a single employer
plan, as defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of such Person or any of its ERISA Affiliates and no Person other than
such Person and its ERISA Affiliates or (b) was so maintained and in respect of
which such Person or any of its ERISA Affiliates could have liability under
Section 4069 of ERISA in the event such plan has been or were to be terminated.
"SOLVENT" and "SOLVENCY" mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person, (b) the present fair salable
value of the assets of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts as they
become absolute and matured, (c) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's ability to
pay as such debts and liabilities mature and (d) such Person is not engaged in
business or a transaction, and is not about to engage in business or a
transaction, for which such Person's property would constitute an unreasonably
small capital. The amount of contingent liabilities at any time shall be
computed as the amount that, in the light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
"STANDBY LETTER OF CREDIT" means any Letter of Credit issued
under the Letter of Credit Subfacility, other than a Trade Letter of Credit.
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"SUBSIDIARY" of any Person means any corporation, partnership,
limited liability company, joint venture, trust or estate of which (or in which)
more than 50% of (a) the issued and outstanding capital stock having ordinary
voting power to elect a majority of the Board of Directors of such corporation
(irrespective of whether at the time capital stock of any other class or classes
of such corporation shall or might have voting power upon the occurrence of any
contingency), (b) the interest in the capital or profits of such partnership,
limited liability company or joint venture or (c) the beneficial interest in
such trust or estate is at the time directly or indirectly owned or controlled
by such Person, by such Person and one or more of its other Subsidiaries or by
one or more of such Person's other Subsidiaries.
"SUMMIT" means Summit Family Restaurants Inc., a Delaware
corporation.
"SUMMIT ACQUISITION" means the Acquisition by the Borrower of
Summit.
"SURVIVING DEBT" has the meaning specified in Section 4.01(a).
"SURVIVING DEBT AGREEMENT" means any agreement or instrument
setting forth the terms and conditions of any Surviving Debt.
"TAXES" has the meaning specified in Section 2.10(a).
"TERM ADVANCE" has the meaning specified in Section 2.01(a).
"TERM BORROWING" means a borrowing consisting of simultaneous
Term Advances of the same Interest Type made by the Lenders.
"TERM COMMITMENT" means, with respect to any Lender at any
time, the amount set forth opposite such Lender's name on Schedule I hereto
under the caption "Term Commitment" or, if such Lender has entered into one or
more Assignments and Acceptances, set forth for such Lender in the Register
maintained by the Agent pursuant to Section 9.07(c) as such Lender's "Term
Commitment", as such amount may be reduced at or prior to such time pursuant to
Section 2.04.
"TERM FACILITY" means, at any time, the aggregate amount of
the Lenders' Term Commitments at such time.
"TERM NOTE" means a promissory note of the Borrower payable to
the order of any Lender, in substantially the form of Exhibit D-3 hereto,
evidencing the indebtedness of the Borrower to such Lender resulting from the
Term Advance made by such Lender.
"TERMINATION DATE" means the earlier of July 31, 2001 and the
date of termination in whole of the Total Commitments pursuant to Section 7.01.
"TOTAL ADJUSTED DEBT" means, at any time of determination, the
sum of (i) Consolidated Funded Debt at such time, plus (ii) the Lease Expense
Amount at such time.
"TOTAL COMMITMENT" means, with respect to each Lender at any
time, the aggregate of such Lender's Term Commitment, Revolving A Commitment and
Revolving B Commitment at such time.
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"TRADE LETTER OF CREDIT" means any Letter of Credit that is
issued under the Letter of Credit Subfacility for the benefit of a supplier of
inventory to the Borrower or any of its Subsidiaries to effect payment for such
inventory.
"TYPE" refers to the distinction between Revolving A Advances,
Revolving B Advances and Term Advances.
"UNREIMBURSED LETTER OF CREDIT LIABILITY" means, as of any
date of determination with respect to any Letter of Credit, the aggregate amount
of all L/C Advances which have been made by, and not reimbursed to, the Issuing
Bank under such Letter of Credit.
"UNUSED REVOLVING A COMMITMENT" means, with respect to any
Lender at any time, (a) such Lender's Revolving A Commitment at such time, minus
(b) the sum of (i) the aggregate principal amount of all Revolving A Advances of
such Lender outstanding at such time, plus (ii) such Lender's Pro Rata Share of
the aggregate Letter of Credit Obligations outstanding at such time.
"UNUSED REVOLVING B COMMITMENT" means, with respect to any
Lender at any time, (a) such Lender's Revolving B Commitment at such time, minus
(b) the aggregate principal amount of all Revolving B Advances of such Lender
outstanding at such time.
"VOTING STOCK" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are ordinarily,
in the absence of contingencies, entitled to vote for the election of directors
(or persons performing similar functions) of such Person, even though the right
so to vote has been suspended by the happening of such a contingency.
"WELFARE PLAN" means a welfare plan, as defined in Section
3(1) of ERISA.
"WITHDRAWAL LIABILITY" has the meaning specified in Part I of
Subtitle E of Title IV of ERISA.
SECTION 1.02. COMPUTATION OF TIME PERIODS. In this Agreement
in the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and "until"
each mean "to but excluding".
SECTION 1.03. ACCOUNTING TERMS. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles consistent with those applied in the preparation
of the financial statements referred to in Section 5.01(f) ("GAAP").
SECTION 1.04. OTHER DEFINITIONAL PROVISIONS. References to
Sections and subsections shall be to Sections and subsections, respectively, of
this Agreement unless otherwise specified. The term "including" means including
without limitation.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. THE ADVANCES.
(a) THE TERM ADVANCES. Each Lender severally agrees, on the
terms and conditions hereinafter set forth, to make a single advance (a "TERM
ADVANCE") to the Borrower on the Closing Date
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in an amount not to exceed such Lender's Term Commitment on such Business Day.
Amounts borrowed under this Section 2.01(a) and repaid or prepaid may not be
reborrowed.
(b) REVOLVING A ADVANCES. Each Lender severally agrees, on the
terms and conditions hereinafter set forth, to make advances (each a "REVOLVING
A ADVANCE") to the Borrower from time to time on any Business Day during the
period from the Closing Date until the Revolving A Commitment Termination Date
in an amount for each such Advance not to exceed such Lender's Unused Revolving
A Commitment on such Business Day. Each Revolving A Borrowing shall be in an
aggregate amount of $1,000,000 or an integral multiple of $500,000 in excess
thereof and shall consist of Revolving A Advances made by the Lenders ratably
according to their respective Revolving A Commitments. Within the limits of each
Lender's Unused Revolving A Commitment in effect from time to time, the Borrower
may borrow under this Section 2.01(b) prior to the Revolving A Commitment
Termination Date, prepay pursuant to Section 2.05 and, prior to the Revolving A
Commitment Termination Date, reborrow under this Section 2.01(b).
(c) REVOLVING B ADVANCES. Each Lender severally agrees, on the
terms and conditions hereinafter set forth, to make advances (each a "REVOLVING
B ADVANCE") to the Borrower from time to time on any Business Day during the
period from the Closing Date until the Revolving B Commitment Termination Date
in an amount for each such Advance not to exceed such Lender's Unused Revolving
B Commitment on such Business Day. Each Revolving B Borrowing shall be in an
aggregate amount of $1,000,000 or an integral multiple of $500,000 in excess
thereof and shall consist of Revolving B Advances made by the Lenders ratably
according to their respective Revolving B Commitments. Within the limits of each
Lender's Unused Revolving B Commitment in effect from time to time, the Borrower
may borrow under this Section 2.01(c) prior to the Revolving B Commitment
Termination Date, prepay pursuant to Section 2.05 and, prior to the Revolving B
Commitment Termination Date, reborrow under this Section 2.01(c).
SECTION 2.02. MAKING THE ADVANCES.
(a) INITIAL BORROWINGS. The initial Borrowings hereunder shall
be made on the Closing Date and shall be made on notice received by the Agent
from the Borrower (pursuant to a Notice of Borrowing) not later than 10:00 a.m.
(Los Angeles, California time) (or such later time as the Agent may agree) on
the Business Day immediately preceding the Closing Date. Such Notice of
Borrowing shall be irrevocable upon receipt by the Agent. Each Lender shall,
before 12:00 noon (Los Angeles, California time) on the Closing Date, make
available for the account of its Applicable Lending Office to the Agent such
Lender's ratable share of such Borrowings by depositing same day funds in the
Agent's Account.
(b) SUBSEQUENT REVOLVING BORROWINGS. Each Revolving Borrowing
occurring after the Closing Date shall be made on notice received by the Agent
from the Borrower (pursuant to a Notice of Borrowing) not later than 10:00 a.m.
(Los Angeles, California time) (a) on the Business Day of such Borrowing if such
Borrowing consists of Base Rate Advances, and (b) on the third Business Day
prior to the date of such Borrowing if such Borrowing consists of Eurodollar
Rate Advances. Each such Notice of Borrowing shall be irrevocable upon receipt
by the Agent and, in the case of any Notice of Borrowing for Eurodollar Rate
Advances, the Borrower shall indemnify each Lender against any loss, cost or
expense incurred by such Lender as a result of any failure to fulfill on or
before the date specified by such Notice of Borrowing the applicable conditions
set forth in this Section 2.02 or Article IV, including, without limitation, any
loss, cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund the Advance to be made
by such Lender as a part of such Borrowing when such Advance, as a result of
such failure, is not made on such date.
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(c) ADVANCES BY LENDERS. If the Agent receives a Notice of
Borrowing, the Agent shall promptly (and, in any event not later than 10:30 a.m.
(Los Angeles, California time) on the Business Day of such Borrowing or, if such
Borrowing consists of Eurodollar Rate Advances, the third Business Day prior to
the date of such Borrowing) give each Lender notice of such Notice of Borrowing.
Each Lender shall before 12:00 noon (Los Angeles, California time) on the date
of such Borrowing, make available for the account of its Applicable Lending
Office to the Agent such Lender's ratable portion of such Borrowing by
depositing same day funds in the Agent's Account. Unless the Agent shall have
received written notice from a Lender prior to the date of any Borrowing
hereunder that such Lender will not make available to the Agent such Lender's
ratable portion of such Borrowing, the Agent may assume that such Lender has
made such ratable portion available to the Agent on the date of such Borrowing
in accordance with the terms hereof and the Agent may, in reliance upon such
assumption, but shall not be required to, make available to or for the account
of the Borrower on such date a corresponding amount. If and to the extent that
such Lender shall not have so made such ratable portion available to the Agent
and the Agent makes such ratable portion available to the Borrower, such Lender
and the Borrower, without prejudice to any rights or remedies that the Borrower
may have against such Lender, severally agree to repay to the Agent forthwith on
demand such corresponding amount together with interest thereon, for each day
from the date such amount is made available to or for the account of the
Borrower until the date such amount is repaid to the Agent, at (A) in the case
of the Borrower, the interest rate applicable at the time to the Advances
comprising such Borrowing, and (B) in the case of such Lender, the Federal Funds
Rate. If such Lender shall pay to the Agent such amount, such amount so paid
shall constitute such Lender's Advance as part of the relevant Borrowing for
purposes of this Agreement and, to the extent that the Borrower previously paid
such amount to the Agent, the Agent will refund to the Borrower such amount so
paid, but without interest.
(d) DISBURSEMENT OF ADVANCES. Upon fulfillment of the
applicable conditions set forth in Article IV (which fulfillment the Agent may
assume in the absence of actual knowledge, or notice received from the Borrower
or the Required Lenders, to the contrary), the Agent will make funds for any
Borrowing available to the Borrower by crediting the Borrower's Account, subject
to the Agent's receipt of funds from the Lenders, and provided that the Agent
shall first make a portion of such funds equal to any outstanding L/C Advance
under any Letter of Credit, and any interest accrued and unpaid thereon to and
as of such date, available to the applicable Issuing Bank for reimbursement of
such L/C Advance and payment of such interest.
(e) NATURE OF LENDERS' OBLIGATIONS. The failure of any Lender
to make the Advance to be made by it as part of any Borrowing shall not relieve
any other Lender of its obligation, if any, hereunder to make its Advance on the
date of such Borrowing, but no Lender shall be responsible for the failure of
any other Lender to make the Advance to be made by such other Lender on the date
of any Borrowing.
SECTION 2.03. REPAYMENT; CONVERSION OF REVOLVING B ADVANCES.
(a) TERM ADVANCES. The Borrower shall repay to each Lender (in
accordance with the provisions of Section 2.09(a)) the aggregate principal
amount of all Term Advances owing to such Lender in 5 consecutive annual
installments until such principal amount has been paid in full. Such
installments (other than the last installment owing hereunder which shall be due
and payable on the Termination Date) shall be due and payable on the last
Business Day of each July (each a "TERM ADVANCE PAYMENT DATE"), commencing July
31, 1997, and each such installment payable to each Lender shall be in an amount
equal to such Lender's ratable share (determined by reference to the aggregate
principal amount of Term Advances owing to such Lender in relation to the
aggregate principal amount
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of Term Advances owing to all of the Lenders) of the amount set forth below
opposite the period in which such Term Advance Payment Date is stated to occur:
PERIOD ANNUAL INSTALLMENT
------ ------------------
Closing Date through July 31, 1997 $ 3,000,000
August 1, 1997 through July 31, 2000 $ 4,000,000
August 1, 2000 through July 31, 2001 $ 5,000,000
provided, however, that the last such installment shall be in the amount
necessary to repay in full the aggregate unpaid principal amount of the Term
Advances and shall, in any event, be due and payable on the Termination Date.
(b) REVOLVING A ADVANCES. The Borrower shall repay to each
Lender (in accordance with the provisions of Section 2.09(a)) on the Revolving A
Commitment Termination Date the aggregate principal amount of all Revolving A
Advances owing to such Lender outstanding on the Revolving A Commitment
Termination Date.
(c) REVOLVING B ADVANCES. On July 31, 1998 (the "REVOLVING B
ADVANCE CONVERSION DATE"), the aggregate principal amount of all then
outstanding Revolving B Advances, if any, shall convert automatically into
amortizing term advances (the "CONVERTED REVOLVING B ADVANCES"). The Borrower
shall repay to each Lender (in accordance with the provisions of Section
2.09(a)) the aggregate principal amount of all Converted Revolving B Advances
owing to such Lender in 3 consecutive equal annual installments until such
principal amount has been paid in full. Such installments (other than the last
installment owing hereunder, which shall be due and payable on the Termination
Date) shall be due and payable on the last Business Day of each July, commencing
July 31, 1999, and each such installment payable to each Lender shall be in an
amount equal to one-third (1/3) of the aggregate principal amount of Converted
Revolving B Advances outstanding immediately after the occurrence of the
Revolving B Advance Conversion Date and owing to such Lender; provided, however,
that the last such installment shall be in the amount necessary to repay in full
the aggregate unpaid principal amount of the Converted Revolving B Advances
owing to such Lender and shall, in any event, be due and payable on the
Termination Date.
(d) L/C ADVANCES. The Borrower shall repay each L/C Advance as
provided in Section 3.03.
SECTION 2.04. REDUCTION OF THE REVOLVING COMMITMENTS.
(a) OPTIONAL REDUCTIONS. The Borrower shall have the right,
upon at least three Business Days' notice to the Agent, to terminate in whole or
reduce ratably in part the unused portions of the respective Revolving
Commitments of the Lenders; provided, however, that (i) each partial reduction
of Revolving A Commitments or Revolving B Commitments shall be in an amount of
$1,000,000 or any multiple of $500,000 in excess thereof, and (ii) the aggregate
amount of the Revolving A Commitments and the Revolving B Commitments shall not
be reduced pursuant to this Section 2.04 to an amount less than the sum of (A)
the aggregate principal amount of all Revolving A Advances (in the case of any
reduction of the Revolving A Commitments) or Revolving B Advances (in the case
of any reduction of the Revolving B Commitments) then outstanding, and (B) in
the case of any reduction of the Revolving A Commitments, the aggregate amount
of all Letter of Credit Obligations then outstanding.
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(b) MANDATORY REDUCTIONS OF THE L/C SUBLIMIT. The L/C Sublimit
shall be permanently reduced from time to time on the date of each reduction in
the Revolving A Facility by the amount, if any, by which the amount of the L/C
Sublimit exceeds the Revolving A Facility after giving effect to such reduction
of the Revolving A Facility.
SECTION 2.05. PREPAYMENTS.
(a) OPTIONAL PREPAYMENTS. The Borrower may, upon prior notice
to the Agent (which may be given on the same Business Day in the case of
prepayment of Revolving Advances which consist of Base Rate Advances and which
shall be given at least three Business Days in advance in the case of prepayment
of any Term Advances and Converted Revolving B Advances and in the case of
prepayment of Revolving Advances which are Eurodollar Rate Advances), stating
the proposed date and aggregate principal amount of the prepayment and the Type
and Interest Type of Advances to be prepaid (and if such notice is given the
Borrower shall), prepay in whole or in part the outstanding principal of
Advances of such Type and Interest Type, together with interest thereon to the
date of such prepayment on the principal amounts prepaid (plus, in the case of
prepayment of Eurodollar Rate Advances prior to the end of the applicable
Interest Period, any additional amount for which the Borrower shall be obligated
pursuant to Section 9.04(c)); provided, however, that each partial prepayment
shall be in an aggregate principal amount of $1,000,000 or an integral multiple
of $500,000 in excess thereof. Each such prepayment shall be paid ratably to
each Lender (in accordance with the provisions of Section 2.09(a)) and (i) in
the case of any prepayment of the Term Advances, shall be applied to the
installments of the Term Facility in inverse order of maturity, and (ii) in the
case of any prepayment of Converted Revolving B Advances, shall be applied to
the installments of the Revolving B Facility in inverse order of maturity.
(b) MANDATORY PREPAYMENTS.
(i) EXCESS ADVANCES. If, at any time, the then
outstanding aggregate principal amount of all Revolving A Advances plus
the then outstanding aggregate Letter of Credit Obligations shall
exceed the aggregate amount of the Revolving A Commitments of the
Lenders at such time, the Borrower shall immediately prepay, for the
ratable account of the Lenders, the outstanding principal amount of
such Revolving A Advances in an aggregate amount equal to such excess.
If, at any time prior to the Revolving B Advance Conversion Date, the
then outstanding aggregate principal amount of all Revolving B Advances
shall exceed the aggregate amount of the Revolving B Commitments of the
Lenders at such time, the Borrower shall immediately prepay, for the
ratable account of the Lenders, the outstanding principal amount of
such Revolving B Advances in an aggregate amount equal to such excess.
(ii) ANNUAL EXCESS CASH FLOW. The Borrower shall, on
the 90th day following the end of each fiscal year ending after the
date hereof, prepay an aggregate principal amount of the Term Advances
and, after the Revolving B Advance Conversion Date, Revolving B
Advances equal to 50% of the amount of Excess Cash Flow for such fiscal
year. Prior to the Revolving B Advance Conversion Date, each such
prepayment shall be applied to the Term Advances. On and after the
Revolving B Advance Conversion Date, each such prepayment shall be
applied to the Term Facility and the Revolving B Facility on a pro rata
basis based on the aggregate principal amount of Advances outstanding
under each such Facility. Each such prepayment shall be paid ratably to
each Lender (in accordance with the provisions of Section 2.09(a)) and
shall be applied to the installments of the Term Facility and, after
the Revolving B Advance Conversion Date, the Revolving B Facility in
inverse order of maturity.
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(iii) NET CASH PROCEEDS. The Borrower shall, on the
date of receipt by the Borrower or any of its Subsidiaries of the Net
Cash Proceeds from (A) the sale, lease, transfer or other disposition
of any assets of the Borrower or any of its Subsidiaries (including the
sale by the Borrower or any of its Subsidiaries of the capital stock of
any of their respective Subsidiaries but excluding (1) sales of
inventory in the ordinary course of business, (2) sales of damaged,
worn or obsolete equipment to the extent the proceeds thereof are
intended to be (and are) used to purchase replacements for such
equipment within 180 days or sales of damaged, worn or obsolete
equipment made after the purchase of replacements for such equipment,
(3) Excluded Resales, (4) any asset sale consummated as part of a
sale-leaseback transaction to the extent constituting a Permitted
Acquisition Financing, and (5) sales, leases, transfers and other
dispositions of assets, or a series of sales, leases, transfers and
other dispositions of related assets, which are sold, leased,
transferred or otherwise disposed of for an amount, or an aggregate
amount, less than $500,000, except to the extent that the aggregate
amount of all such sales, leases, transfers, and other dispositions
under this clause (5) in any fiscal year exceeds $1,000,000), (B) the
incurrence or issuance by the Borrower or any of its Subsidiaries of
any Debt (other than Debt permitted under Section 6.02(b), it being
understood that the provisions of this Section 2.05(b)(iii) shall not
be construed to permit the incurrence of Debt otherwise prohibited by
Section 6.02(b)), and (C) the sale or issuance by the Borrower or any
of its Subsidiaries of any of such Person's capital stock, any
securities convertible into or exchangeable for such capital stock or
any warrants, rights or options to acquire such capital stock (except,
in each case, for any such sales or issuances (i) pursuant to employee
stock plans of such Person, and (ii) to the Borrower or a wholly owned
Subsidiary of the Borrower), prepay an aggregate principal amount of
the Term Advances and, after the Revolving B Advance Conversion Date,
the Revolving B Advances equal to 100% of the amount of such Net Cash
Proceeds, in the case of each prepayment under Section 2.05(b)(iii)(A)
or (B), and equal to 75% of the amount of such Net Cash Proceeds in the
case of each prepayment under Section 2.05(b)(iii)(C). Prior to the
Revolving B Advance Conversion Date, each such prepayment shall be
applied to the Term Advances. On and after the Revolving B Advance
Conversion Date, each such prepayment shall be applied to the Term
Facility and the Revolving B Facility on a pro rata basis based on the
aggregate principal amount of Advances outstanding under each such
Facility. Each such prepayment shall be paid ratably to each Lender (in
accordance with the provisions of Section 2.09(a)) and shall be applied
to the installments of the Term Facility and, after the Revolving B
Advance Conversion Date, the Revolving B Facility in inverse order of
maturity.
(iv) L/C CASH COLLATERAL. If, at any time, the
aggregate Available Amount of all Letters of Credit then outstanding
exceeds the L/C Sublimit in effect at such time, the Borrower shall
immediately pay to the Agent for deposit in the L/C Cash Collateral
Account an amount sufficient to cause the aggregate amount on deposit
in such account to equal the amount of such excess.
(c) INTEREST PAYABLE ON AMOUNTS PREPAID. All prepayments under
this Section 2.05 shall be made together with accrued interest to the date of
such prepayment on the principal amount prepaid.
SECTION 2.06. INTEREST. The Borrower shall pay interest on the
unpaid principal amount of each Advance from the date of such Advance until such
principal is paid in full at the applicable rate set forth below.
(a) INTEREST ON BASE RATE ADVANCES. Except to the extent that
the Borrower shall elect to pay interest on all or any part of any Advance made
or to be made to the Borrower under Section
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2.01 for any Interest Period pursuant to subsections (b) and (c) of this Section
2.06, the Borrower shall pay interest on the unpaid principal amount of each
Advance, from the date of such Advance until such principal amount is paid in
full, payable quarterly in arrears on the last Business Day of each January,
April, July and October, commencing July 31, 1996 and, with respect to Revolving
A Advances, on the Revolving A Commitment Termination Date and, with respect to
Term Advances and Converted Revolving B Advances, on the Termination Date, in
each case at a fluctuating interest rate per annum equal, subject to Section
2.06(d), to the sum of the Base Rate in effect from time to time plus the
Applicable Margin for Base Rate Advances in effect from time to time.
(b) INTEREST PERIODS FOR EURODOLLAR RATE ADVANCES. The
Borrower may, pursuant to Section 2.06(c), elect to have the interest on the
principal amount of all or any portion of any Advances made or to be made to the
Borrower under Section 2.01, in each case ratably according to the respective
outstanding principal amounts of Advances of the same Type owing to each Lender
(each such principal amount owing to a Lender as to which such election has been
made being a "EURODOLLAR RATE ADVANCE" owing to such Lender) determined and
payable for a specified period (an "INTEREST PERIOD" for such Eurodollar Rate
Advance) in accordance with subsection (c) below, provided, however, that the
Borrower may not have more than 8 Eurodollar Rate Advances owing to any Lender
outstanding at any one time. Each Interest Period shall be one, two, three, or
six months, at the Borrower's selection pursuant to subsection (c) below,
provided, however, that:
(i) the first day of an Interest Period for any
Eurodollar Rate Advance shall be either the last day of any then
current Interest Period for such Advance or, if there shall be no then
current Interest Period for such Advance, any Business Day;
(ii) the Borrower may not select any Interest Period
that ends after any principal repayment installment date unless, after
giving effect to such selection, the aggregate principal amount of Base
Rate Advances and of Eurodollar Rate Advances having Interest Periods
that end on or prior to such principal repayment installment date shall
be at least equal to the aggregate principal amount of Advances due and
payable on or prior to such date;
(iii) whenever the last day of any Interest Period
would otherwise occur on a day other than a Business Day, the last day
of such Interest Period shall be extended to occur on the next
succeeding Business Day; provided, however, that if such extension
would cause the last day of such Interest Period to occur in the next
following month, the last day of such Interest Period shall occur on
the next preceding Business Day; and
(iv) whenever the first day of any Interest Period
occurs on a day of the month for which there is no numerically
corresponding day in the calendar month that succeeds such initial
calendar month by the number of months equal to the number of months of
such Interest Period, such Interest Period shall end on the last
Business Day of such succeeding calendar month.
(c) INTEREST ON EURODOLLAR RATE ADVANCES. The Borrower may
from time to time, on the condition that no Event of Default has occurred and is
continuing, and subject to the provisions of Sections 2.06(b) and 2.06(e), elect
to pay interest on all or any portion of any Advances of the same Type during
any Interest Period therefor at a rate per annum equal to the sum of the
Eurodollar Rate for such Interest Period for such Advances plus the Applicable
Margin for Eurodollar Rate Advances in effect from time to time, by notice,
specifying the Type and amount of the Advances as to which such election is made
(which amount shall aggregate at least $1,000,000 or any multiple of $500,000 in
excess thereof) and the first day and duration of such Interest Period, received
by the Agent before 10:00 a.m. (Los Angeles, California time) three Business
Days prior to the first day of such Interest Period. If the
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Borrower has made such election for Eurodollar Rate Advances for any Interest
Period, the Borrower shall pay interest on the unpaid principal amount of such
Eurodollar Rate Advances during such Interest Period, payable in arrears on the
last day of such Interest Period and, in the case of any Interest Period which
is longer than three months, on each three month anniversary of the first day of
such Interest Period, in each case at a rate equal, subject to Section 2.06(d),
to the sum of the Eurodollar Rate for such Interest Period for such Eurodollar
Rate Advances plus the Applicable Margin for Eurodollar Rate Advances in effect
from time to time during such Interest Period. On the last day of each Interest
Period for any Eurodollar Rate Advance, the unpaid principal balance thereof
shall automatically become and bear interest as a Base Rate Advance, except to
the extent that the Borrower has elected to pay interest on all or any portion
of such amount for a new Interest Period commencing on such day in accordance
with this Section 2.06(c). Each notice by the Borrower under this Section
2.06(c) shall be irrevocable upon receipt by the Agent, and the Borrower shall
indemnify each Lender against any loss, cost or expense incurred by such Lender
as a result of any failure to fulfill on or before the date specified by such
notice the applicable conditions set forth in this Section 2.06(c) or Article
IV, including, without limitation, any loss, cost or expense incurred by reason
of the liquidation or reemployment of deposits or other funds acquired by such
Lender to fund any such Eurodollar Rate Advance when such Eurodollar Rate
Advance, as a result of such failure, is not made or does not become effective.
(d) DEFAULT INTEREST. Upon the occurrence and during the
continuance of an Event of Default under Section 7.01(a) and upon written notice
from the Agent during the continuance of any other Event of Default (which
notice shall be given and withdrawn at the direction of the Required Lenders),
the Borrower shall, at the dates set forth herein for the payment of interest
and upon demand, (i) pay interest on all Base Rate Advances and any other
amounts owing hereunder not paid when due (other than then outstanding
Eurodollar Rate Advances) at a rate per annum (the "DEFAULT RATE") equal at all
times to the rate otherwise applicable to Base Rate Advances plus 2.00% per
annum, and (ii) pay interest on each then outstanding Eurodollar Rate Advance at
a rate per annum equal at all times to the rate otherwise applicable to such
Eurodollar Rate Advance plus 2.00% per annum.
(e) SUSPENSION OF EURODOLLAR RATE ADVANCES.
(i) ILLEGALITY. Notwithstanding any other provision
of this Agreement, if the introduction of or any change in or in the
interpretation of any law or regulation shall make it unlawful, or any
central bank or other governmental authority shall assert that it is
unlawful, for any Lender or its Eurodollar Lending Office to perform
its obligations hereunder to make Eurodollar Rate Advances or to
continue to fund or maintain Eurodollar Rate Advances hereunder, then,
on notice thereof and demand therefor by such Lender to the Borrower
through the Agent, (i) each Eurodollar Rate Advance will automatically,
upon such demand, Convert into a Base Rate Advance and (ii) the
obligation of the Lenders to make, or to Convert Advances into,
Eurodollar Rate Advances shall be suspended until the Agent shall
notify the Borrower that such Lender has determined that the
circumstances causing such suspension no longer exist; provided,
however, that, before making any such demand, such Lender agrees to use
reasonable efforts (consistent with its internal policy and legal and
regulatory restrictions) to designate a different Eurodollar Lending
Office if the making of such a designation would allow such Lender or
its Eurodollar Lending Office to continue to perform its obligations to
make Eurodollar Rate Advances or to continue to fund or maintain
Eurodollar Rate Advances and would not, in the judgment of such Lender,
be otherwise disadvantageous to such Lender.
(II) OTHER CIRCUMSTANCES. If, with respect to any
Eurodollar Rate Advances, the Required Lenders notify the Agent that
the Eurodollar Rate for any Interest Period for such Advances will not
adequately reflect the cost to such Lenders of making, funding or
maintaining their Eurodollar Rate Advances for such Interest Period,
the Agent shall forthwith so notify the
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Borrower and the Lenders, whereupon (i) each such Eurodollar Rate
Advance will automatically, on the last day of the then existing
Interest Period therefor, Convert into a Base Rate Advance and (ii) the
obligation of the Lenders to make, or to Convert Advances into,
Eurodollar Rate Advances shall be suspended until the Agent shall
notify the Borrower that such Lenders have determined that the
circumstances causing such suspension no longer exist.
(iii) SUSPENSION ON EVENT OF DEFAULT. Upon the
occurrence and during the continuance of any Event of Default, (i) each
Eurodollar Rate Advance will automatically, on the last day of the then
existing Interest Period therefor, convert into a Base Rate Advance and
(ii) the obligation of the Lenders to make, or to convert Advances
into, Eurodollar Rate Advances shall be suspended.
(iv) LENDERS' OBLIGATION TO NOTIFY AGENT. If any
Lender shall give notice to the Agent under Section 2.06(e)(i) or (ii)
and such Lender shall thereafter determine that the circumstances
causing such notice no longer exist, such Lender shall promptly give
written notice thereof to the Borrower and the Agent, and the Agent
shall thereafter give notice thereof to the other Lenders.
SECTION 2.07. FEES.
(a) COMMITMENT FEES. The Borrower agrees to pay to the Agent a
commitment fee on the average daily Unused Revolving A Commitment of each Lender
and on the average daily Unused Revolving B Commitment of each Lender, for the
account of such Lender, from the Closing Date in the case of each Initial Lender
and from the effective date specified in the Assignment and Acceptance pursuant
to which it became a Lender in the case of each other Lender until the Revolving
A Commitment Termination Date, with respect to each Lender's Unused Revolving A
Commitment, and until the Revolving B Commitment Termination Date with respect
to each Lender's Unused Revolving B Commitment, at the rate per annum equal to
the Commitment Fee Percentage in effect from time to time, payable in arrears on
the last Business Day of each January, April, July and October, commencing July
31, 1996, and on the Revolving A Commitment Termination Date, with respect to
each Lender's Unused Revolving A Commitment, and on the Revolving B Commitment
Termination Date with respect to each Lender's Unused Revolving B Commitment.
(b) UPFRONT FEES. The Borrower agrees to pay to the Agent, for
the account of the Lenders, on the date of the initial Borrowing, the upfront
fees in the amount set forth in the allocation memorandum delivered to the
Lenders and the Borrower prior to the date hereof.
(c) AGENT'S FEES. The Borrower agrees to pay to the Agent, for
its own account, (i) the fees in the amounts and at the times set forth in the
letter dated May 20, 1996 from NationsBank and the Arranger, to the Borrower,
and agreed to and accepted by the Borrower, and (ii) such other fees as may from
time to time be agreed between the Borrower and the Agent.
(d) ABSOLUTE OBLIGATION. The Borrower's obligation hereunder
to pay the fees referred to in this Section 2.07 shall be absolute and
unconditional and shall survive the making and repayment of Advances, the
termination of all Letter of Credit Obligations and the termination of this
Agreement. All fees which are due or become due pursuant to this Section 2.07
are nonrefundable.
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SECTION 2.08. INCREASED COSTS, ETC.
(a) INCREASED COSTS. If, due to either (i) the introduction of
or any change in or in the interpretation of any law or regulation or (ii) the
compliance with any guideline or request from any central bank or other
governmental authority (whether or not having the force of law), there shall be
any increase in the cost to any Lender Party of agreeing to make or of making,
funding or maintaining Eurodollar Rate Advances or of agreeing to issue or of
issuing or maintaining Letters of Credit (or of agreeing to purchase or
purchasing participations therein) or of agreeing to make or of making or
maintaining L/C Advances (or of agreeing to purchase or purchasing
participations therein), then the Borrower shall from time to time, upon demand
by such Lender Party (with a copy of such demand to the Agent), pay to the Agent
for the account of such Lender Party additional amounts sufficient to compensate
such Lender Party for such increased cost; provided, however, that, before
making any such demand, each Lender Party agrees to use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions) to
designate a different Applicable Lending Office if the making of such a
designation would avoid the need for, or reduce the amount of, such increased
cost and would not, in the reasonable judgment of such Lender Party, be
otherwise disadvantageous to such Lender Party. A certificate as to the amount
of such increased cost, submitted to the Borrower by such Lender Party, shall be
conclusive and binding for all purposes, absent manifest error.
(b) CAPITAL REQUIREMENTS. If, due to either (i) the
introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request from any central
bank or other governmental authority (whether or not having the force of law),
there shall be any increase in the amount of capital required or expected to be
maintained by such Lender Party or any corporation controlling such Lender Party
as a result of or based upon the existence of such Lender Party's commitment to
lend or to issue or purchase participations in Letters of Credit hereunder and
other commitments of such type or the issuance or maintenance of the Letters of
Credit (or similar contingent obligations), then, upon demand by such Lender
Party (with a copy of such demand to the Agent), the Borrower shall pay to the
Agent for the account of such Lender Party, from time to time as specified by
such Lender Party, additional amounts sufficient to compensate such Lender Party
in the light of such circumstances, to the extent that such Lender Party
reasonably determines such increase in capital to be allocable to the existence
of such Lender Party's commitment to lend or to issue Letters of Credit
hereunder or to the issuance or maintenance of any Letters of Credit. A
certificate as to such amounts submitted to the Borrower by such Lender Party,
shall be conclusive and binding for all purposes, absent manifest error.
SECTION 2.09. PAYMENTS AND COMPUTATIONS.
(a) PAYMENTS BY BORROWER. The Borrower shall make each payment
hereunder and under any other Loan Document to which it is a party, irrespective
of and without condition or deduction for any counterclaim, defense, recoupment
or setoff, in lawful money of the United States and in same day funds delivered
to the Agent not later than 12:00 noon (Dallas, Texas time) on the day when due
by deposit of such funds to the Agent's Account. Any payment so delivered to the
Agent after 12:00 noon (Dallas, Texas time) on any Business Day, or on any day
which is not a Business Day, shall be deemed received by the Agent on the next
succeeding Business Day. The Agent will promptly after receipt of each payment
cause to be distributed like funds relating to the payment of principal,
interest, commitment fees or letter of credit fees ratably to each Lender for
the account of its Applicable Lending Office, and like funds relating to the
payment of any other amount payable to any Lender or any Issuing Bank (including
payments with respect to Letters of Credit and payments for the account of any
Lender under Sections 2.08, 2.10 or 9.04(c)) to such Lender for the account of
its Applicable Lending Office or to such Issuing Bank, in each case to be
applied in accordance with, and subject to, the terms of this Agreement,
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including Section 2.09(e) below. Upon its acceptance of an Assignment and
Acceptance and recording of the information contained therein in the Register
pursuant to Section 9.07(c), from and after the effective date specified in such
Assignment and Acceptance, the Agent shall make all payments hereunder and under
any other Loan Document in respect of the interest assigned thereby to the
Lender assignee thereunder, and the parties to such Assignment and Acceptance
shall make all appropriate adjustments in such payments for periods prior to
such effective date directly between themselves.
(b) COMPUTATIONS. All computations of interest in respect of
Base Rate Advances (and in respect of any other amount payable hereunder other
than interest in respect of Eurodollar Rate Advances and Letter of Credit fees
and commissions) shall be made by the Agent on the basis of a year of 365 days
and all computations of interest in respect of Eurodollar Rate Advances and
Letter of Credit fees and commissions shall be made by the Agent on the basis of
a year of 360 days, in each case for the actual number of days (including the
first day but excluding the last day) occurring in the period for which such
interest or fees are payable; provided that if any Advance is repaid on the same
day on which it is made, one day's interest shall be paid on such Advance. Each
determination by the Agent of an interest rate, fee, commission or discount rate
hereunder shall be conclusive and binding for all purposes, absent manifest
error.
(c) PAYMENTS ASSUMED. Unless the Agent shall have received
notice from the Borrower prior to the date on which any payment is due to the
Lenders or any Issuing Bank hereunder that the Borrower will not make such
payment in full, the Agent may assume that the Borrower has made such payment in
full to the Agent on such date and the Agent may, in reliance upon such
assumption, but shall not be required to, cause to be distributed to each Lender
or such Issuing Bank on such due date an amount equal to the amount then due to
such Lender or such Issuing Bank. If and to the extent that the Borrower shall
not have so made such payment in full to the Agent, each Lender and Issuing Bank
shall repay to the Agent forthwith on demand such amount distributed to such
Lender or such Issuing Bank together with interest thereon, for each day from
the date such amount is distributed to such Lender until the date such Lender or
Issuing Bank repays such amount to the Agent, at the Federal Funds Rate.
(d) APPLICATION OF PAYMENTS SPECIFIED BY THE BORROWER. Except
as otherwise specified herein, so long as no Event of Default has occurred and
is continuing, all payments shall be applied as instructed by the Borrower if
such instructions are received by the Agent prior to or contemporaneously with
receipt of funds therefor.
(e) APPLICATION OF PAYMENTS NOT OTHERWISE SPECIFIED. If the
Agent receives funds for application to the Advances or any Letter of Credit
Obligations or other Obligations of the Borrower under the Loan Documents under
circumstances for which the Loan Documents do not specify the Advances or the
Facility or the Obligations to which, or the manner in which, such funds are to
be applied, the Agent may elect to distribute such funds first, to the Issuing
Banks ratably in payment of the principal of and interest on any outstanding L/C
Advances, second, to each Lender ratably in accordance with such Lender's
proportionate share of all Advances then outstanding, in repayment or prepayment
of such of the outstanding Advances, and for application to such principal
installments, as the Agent may direct, and thereafter ratably to the Lenders in
repayment or prepayment of any other Obligations of the Borrower then
outstanding under the Loan Documents as the Agent shall direct.
(f) PAYMENTS ON BUSINESS DAYS. Whenever any payment hereunder
or under any other Loan Document shall be stated to be due on a day other than a
Business Day, such payment shall be made on the next succeeding Business Day,
and such extension of time shall in such case be included in the computation of
payment of interest and commitment and other fees; provided, however, if such
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extension would cause payment of interest on or principal of any Eurodollar Rate
Advance to be made in the next following month, such payment shall be made on
the next preceding Business Day.
(g) PAYMENTS FROM BORROWER'S ACCOUNTS. The Borrower hereby
authorizes each Lender, if and to the extent payment owed to such Lender is not
made when due hereunder or under any Note held by such Lender, to charge from
time to time against any or all of the Borrower's accounts with such Lender any
amount so due.
(h) CERTAIN TERMS. The terms "pay", "paid" or "payment" under
this Agreement shall include prepay, prepaid or prepayment, respectively, under
this Agreement, and the term "due" under this Agreement shall include due by
reason of a mandatory prepayment (including upon an actual or deemed entry of an
order for relief with respect to the Borrower or any Guarantor under the Federal
Bankruptcy Code or upon acceleration).
SECTION 2.10. TAXES.
(a) WITHHOLDING TAXES. Any and all payments by the Borrower
hereunder or under any Notes shall be made, in accordance with Section 2.09,
free and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of each Lender and the Agent, net income
taxes that are imposed by the United States and franchise taxes and net income
taxes that are imposed on such Lender or the Agent by the state or foreign
jurisdiction under the laws of which such Lender or the Agent (as the case may
be) is organized or any political subdivision thereof and, in the case of each
Lender, franchise taxes and net income taxes that are imposed on such Lender by
the state or foreign jurisdiction of such Lender's Applicable Lending Office or
any political subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "TAXES"). If the Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder or under any Note to any Lender or
the Agent, (i) the sum payable shall be increased as may be necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.10) such Lender or the Agent (as
the case may be) receives an amount equal to the sum it would have received had
no such deductions been made, (ii) the Borrower shall make such deductions and
(iii) the Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law.
(b) OTHER TAXES. In addition, the Borrower shall pay any
present or future stamp, documentary, excise, property or similar taxes, charges
or levies that arise from any payment made hereunder or under any Notes or from
the execution, delivery or registration of, or otherwise with respect to, this
Agreement or any Notes (hereinafter referred to as "OTHER TAXES").
(c) INDEMNIFICATION. The Borrower shall indemnify each Lender
and the Agent for the full amount of Taxes and Other Taxes, and for the full
amount of taxes imposed by any jurisdiction on amounts payable under this
Section 2.10, paid by such Lender or the Agent (as the case may be) and any
liability (including penalties, additions to tax, interest and expenses) arising
therefrom or with respect thereto. This indemnification shall be made within 30
days from the date such Lender or the Agent (as the case may be) makes written
demand therefor.
(d) EVIDENCE OF PAYMENT. Within 30 days after the date of any
payment of Taxes, the Borrower shall furnish to the Agent, at its address
referred to in Section 9.02, the original receipt of payment thereof or a
certified copy of such receipt. In the case of any payment hereunder or under
any Notes by the Borrower through an account or branch outside the United States
or on behalf of the
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Borrower by a payor that is not a United States person, if the Borrower
determines that no Taxes are payable in respect thereof, the Borrower shall
furnish, or shall cause such payor to furnish, to the Agent, at such address, an
opinion of counsel acceptable to the Agent stating that such payment is exempt
from Taxes. For purposes of this subsection (d) and subsection (e), the terms
"UNITED STATES" and "UNITED STATES PERSON" shall have the meanings specified in
Section 7701 of the Internal Revenue Code.
(e) FOREIGN LENDERS. Each Lender organized under the laws of a
jurisdiction outside the United States shall, on or prior to the date of its
execution and delivery of this Agreement in the case of each Initial Lender, and
on the date of the Assignment and Acceptance pursuant to which it became a
Lender in the case of each other Lender, and from time to time thereafter if
requested in writing by the Borrower or the Agent (but only so long thereafter
as such Lender remains lawfully able to do so), provide the Agent and the
Borrower with Internal Revenue Service form 1001 or 4224, as appropriate, or any
successor form prescribed by the Internal Revenue Service, certifying that such
Lender is exempt from or is entitled to a reduced rate of United States
withholding tax on payments under this Agreement or the Notes. If the form
provided by a Lender at the time such Lender first becomes a party to this
Agreement indicates a United States interest withholding tax rate in excess of
zero, withholding tax at such rate shall be considered excluded from Taxes
unless and until such Lender provides the appropriate form certifying that a
lesser rate applies, whereupon withholding tax at such lesser rate only shall be
considered excluded from Taxes for periods governed by such form; provided,
however, that, if at the date of the Assignment and Acceptance pursuant to which
a Lender assignee becomes a party to this Agreement, the Lender assignor was
entitled to payments under subsection (a) in respect of United States
withholding tax with respect to interest paid at such date, then, to such
extent, the term Taxes shall include (in addition to withholding taxes that may
be imposed in the future or other amounts otherwise includable in Taxes) United
States withholding tax, if any, applicable with respect to the Lender assignee
on such date. If any form or document referred to in this Section 2.10(e)
requires the disclosure of information, other than information necessary to
compute the tax payable and information required on the date hereof by Internal
Revenue Service form 1001 or 4224, that the Lender reasonably considers to be
confidential, the Lender shall give notice thereof to the Borrower and shall not
be obligated to include in such form or document such confidential information.
(f) FAILURE TO PROVIDE FORMS. For any period with respect to
which a Lender has failed to provide the Borrower with the appropriate form
described in Section 2.10(e) (other than if such failure is due to a change in
law occurring after the date on which a form originally was required to be
provided or if such form otherwise is not required under Section 2.10(e)), such
Lender shall not be entitled to indemnification under Section 2.10(a) or Section
2.10(c) with respect to Taxes imposed by the United States; provided, however,
that should a Lender become subject to Taxes because of its failure to deliver a
form required hereunder, the Borrower shall take such steps as such Lender shall
reasonably request to assist such Lender to recover such Taxes.
(g) CHANGE OF APPLICABLE LENDING OFFICE. Any Lender claiming
any additional amounts payable pursuant to this Section 2.10 shall use
reasonable efforts (consistent with its internal policy and legal and regulatory
restrictions) to change the jurisdiction of its Eurodollar Lending Office if the
making of such a change would avoid the need for, or reduce the amount of, any
such additional amounts that may thereafter accrue and would not, in the
reasonable judgment of such Lender, be otherwise disadvantageous to such Lender.
(h) SURVIVAL. Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this Section 2.10 shall survive the payment in full of
principal and interest hereunder and under the Notes.
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SECTION 2.11. SHARING OF PAYMENTS, ETC. If any Lender Party
shall obtain at any time any payment (whether voluntary, involuntary, through
the exercise of any right of set-off, or otherwise) (a) on account of
Obligations due and payable to such Lender Party hereunder or under any Notes at
such time in excess of its ratable share (according to the proportion of (i) the
amount of such Obligations due and payable to such Lender Party at such time to
(ii) the aggregate amount of the Obligations due and payable to all Lender
Parties hereunder and under the Notes at such time) of payments on account of
the Obligations due and payable to all Lender Parties hereunder and under the
Notes at such time obtained by all the Lender Parties at such time or (b) on
account of Obligations owing (but not due and payable) to such Lender Party
hereunder and under the Notes at such time in excess of its ratable share
(according to the proportion of (i) the amount of such Obligations owing to such
Lender Party at such time to (ii) the aggregate amount of the Obligations owing
(but not due and payable) to all Lender Parties hereunder and under the Notes at
such time) of payments on account of the Obligations owing (but not due and
payable) to all Lender Parties hereunder and under the Notes at such time
obtained by all the Lender Parties at such time, such Lender Party shall
forthwith purchase from the other Lender Parties such participations in the
Obligations due and payable or owing to them, as the case may be, as shall be
necessary to cause such purchasing Lender Party to share the excess payment
ratably with each of them; provided, however, that if all or any portion of such
excess payment is thereafter recovered from such purchasing Lender Party, such
purchase from each other Lender Party shall be rescinded and such other Lender
Party shall repay to the purchasing Lender Party the purchase price to the
extent of such other Lender Party's ratable share (according to the proportion
of (i) the purchase price paid to such Lender Party to (ii) the aggregate
purchase price paid to all Lender Parties) of such recovery together with an
amount equal to such Lender Party's ratable share (according to the proportion
of (i) the amount of such other Lender Party's required repayment to (ii) the
total amount so recovered from the purchasing Lender Party) of any interest or
other amount paid or payable by the purchasing Lender Party in respect of the
total amount so recovered. The Borrower agrees that any Lender Party so
purchasing a participation from another Lender Party pursuant to this Section
2.11 may, to the fullest extent permitted by law, exercise all its rights of
payment (including the right of set-off) with respect to such participation as
fully as if such Lender Party were the direct creditor of the Borrower in the
amount of such participation.
SECTION 2.12. USE OF PROCEEDS. The proceeds of the Advances
shall be available (and the Borrower agrees that it shall use such proceeds) (a)
in the case of the Term Advances, to repay in full all amounts outstanding under
the Existing Credit Agreement, (b) in the case of the Revolving A Advances, to
provide working capital for the Borrower and its Subsidiaries and, subject to
the provisions of this Agreement and the other Loan Documents, for other general
corporate purposes of the Borrower and its Subsidiaries (provided that the
proceeds of Revolving A Advances shall not be used to finance Designated
Investments or Permitted Acquisitions or related transaction fees and expenses),
and (c) in the case of Revolving B Advances and subject to the provisions of
this Agreement and the other Loan Documents, to finance Designated Investments
and Permitted Acquisitions and to pay related transaction fees and expenses.
SECTION 2.13. EVIDENCE OF DEBT.
(a) MAINTENANCE OF ACCOUNTS BY LENDERS. Each Lender shall
maintain in accordance with its usual practice an account or accounts evidencing
the indebtedness of the Borrower to such Lender resulting from each Advance
owing to such Lender from time to time, including the amounts of principal and
interest payable and paid to such Lender from time to time hereunder.
(b) MAINTENANCE OF ACCOUNTS BY AGENT. The Register maintained
by the Agent pursuant to Section 9.07(c) shall include a control account, and a
subsidiary account for each Lender, in
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which accounts (taken together) shall be recorded (i) the date and amount of
each Borrowing made hereunder, the Type and Interest Type of the Advances
comprising such Borrowing and any Interest Period applicable thereto, (ii) the
terms of each Assignment and Acceptance delivered to and accepted by it, (iii)
the amount of any principal or interest due and payable or to become due and
payable from the Borrower to each Lender hereunder, and (iv) the amount of any
sum received by the Agent from the Borrower hereunder and each Lender's share
thereof. The entries made in the Register shall be conclusive and binding for
all purposes, absent manifest error.
ARTICLE III
AMOUNTS AND TERMS OF LETTERS OF CREDIT
SECTION 3.01. THE LETTER OF CREDIT SUBFACILITY. The Borrower
may request the L/C Bank, on the terms and conditions hereinafter set forth, to
Issue, and the L/C Bank shall Issue, Letters of Credit for the account of the
Borrower from time to time on any Business Day during the period after
the Closing Date until the Revolving A Commitment Termination Date (a) in an
aggregate Available Amount for all Letters of Credit (including the Existing
Letters of Credit) not to exceed at any time the L/C Sublimit (the "LETTER OF
CREDIT SUBFACILITY"), and (b) in an Available Amount for each such Letter of
Credit not to exceed the Unused Revolving A Commitments of the Lenders on such
Business Day. No Letter of Credit shall have an expiration date (including all
rights of the Borrower or the beneficiary to require renewal) later than the
earlier of 5 Business Days before the Revolving A Commitment Termination Date
and, in the case of a Standby Letter of Credit, one year after the date of
issuance thereof unless the Issuing Bank which Issued such Letter of Credit
shall otherwise agree in its sole discretion (but a Standby Letter of Credit may
by its terms be renewable annually with the consent of the Issuing Bank) and, in
the case of a Trade Letter of Credit, 60 days after the date of issuance
thereof. As of the Closing Date, each Existing Letter of Credit shall
constitute, for all purposes of this Agreement and the other Loan Documents, a
Letter of Credit issued and outstanding hereunder and shall, for purposes of
Section 3.05, be deemed to be Issued hereunder on the Closing Date. Subject to
the provisions of this Section 3.01, the Existing Issuing Bank may extend or
renew the expiration date of, but may not increase the Available Amount of, any
Existing Letter of Credit. Within the limits of the Letter of Credit
Subfacility, and subject to the limits referred to above, the Borrower may
request the Issuance of one or more Letters of Credit under this Section 3.01,
repay amounts due resulting from L/C Advances thereunder pursuant to Section
3.03, and request the Issuance of one or more additional Letters of Credit under
this Section 3.01.
SECTION 3.02. ISSUANCE OF LETTERS OF CREDIT.
(a) NOTICE OF ISSUANCE. Each Letter of Credit (other than the
Existing Letters of Credit) shall be Issued pursuant to a Notice of Issuance,
which must be received by the Agent and the Issuing Bank not later than 12:00
noon (Los Angeles, California time) on the tenth Business Day prior to the date
of the proposed Issuance of such Letter of Credit (or such shorter period as may
be acceptable to the L/C Bank). Each such Notice of Issuance shall specify
whether such Letter of Credit is to be a Standby Letter of Credit or a Trade
Letter of Credit and shall further specify therein the requested (i) date of
such Issuance (which shall be a Business Day), (ii) Available Amount of such
Letter of Credit, (iii) expiration date of such Letter of Credit, (iv) name and
address of the beneficiary of such Letter of Credit, and (v) form of such Letter
of Credit, and shall be accompanied by such customary application and agreement
for letter of credit of the L/C Bank (a "LETTER OF CREDIT AGREEMENT") as the L/C
Bank may specify to the Borrower for use in connection with such requested
Letter of Credit.
(b) CONDITIONS TO ISSUANCE. If (i) the requested form of such
Letter of Credit is acceptable to the Agent and the L/C Bank in the reasonable
discretion of each, and (ii) the L/C Bank has
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not received notice from the Agent or the Required Lenders that the Issuance of
such Letter of Credit is not authorized because such Issuance would not comply
with the requirements of clause (a) or (b) of Section 3.01 or one or more of the
conditions set forth in Section 4.02 has not been satisfied, then the L/C Bank
will, upon fulfillment of the applicable conditions set forth in Section 4.02
(which fulfillment the L/C Bank may assume in the absence of actual knowledge,
or notice received from the Borrower, the Agent or the Required Lenders, to the
contrary) and subject to the provisions of this Article III, make such Letter of
Credit available to the Borrower at its office referred to in Section 9.02 or as
otherwise agreed upon with the Borrower in connection with such Issuance. In the
event and to the extent that the provisions of any Letter of Credit Agreement
shall conflict with this Agreement, the provisions of this Agreement shall
govern.
(c) REPORTS BY ISSUING BANKS. Each Issuing Bank shall furnish
to the Agent (i) on the fifth Business Day of each month a written report
summarizing all L/C Advances during the preceding month under all Letters of
Credit Issued by such Issuing Bank, and (ii) three Business Days prior to the
last Business Day of each January, April, July and October, a written report
setting forth the average daily aggregate Available Amount during the preceding
calendar quarter of all Letters of Credit Issued by such Issuing Bank.
SECTION 3.03. DRAWING AND REIMBURSEMENT. The Borrower agrees
to reimburse the Issuing Bank under each Letter of Credit, within one Business
Day after it has notice of any L/C Advance by such Issuing Bank thereunder, for
the principal amount of such L/C Advance, and shall pay to such Issuing Bank, on
demand, interest on the unreimbursed principal of such L/C Advance at a rate per
annum equal to (a) from the date of such L/C Advance to the first Business Day
after notice thereof has been given to the Borrower, the rate applicable to Base
Rate Advances in effect from time to time, and (b) from and after such first
Business Day, the Default Rate. If the Borrower shall fail to so reimburse the
Issuing Bank within one Business Day after the Borrower receives notice that any
such L/C Advance has been made, then upon demand by the Issuing Bank, and
whether or not a Default has occurred and is continuing or any conditions set
forth in Section 4.02 are satisfied, each Lender shall purchase from such
Issuing Bank, and such Issuing Bank shall sell and assign to each Lender, such
Lender's Pro Rata Share of such outstanding L/C Advance as of the date of such
purchase, by making available for the account of such Issuing Bank, by deposit
to the Agent's Account, in same day funds, an amount equal to the portion of the
outstanding principal amount of such L/C Advance to be purchased by such Lender.
Each Revolving Lender agrees to purchase its Pro Rata Share of an outstanding
L/C Advance on (A) the Business Day on which demand therefor is made by the
Issuing Bank which made such L/C Advance, provided notice of such demand is
given not later than 12:00 noon (Dallas, Texas time) on such Business Day, or
(B) the first Business Day next succeeding such demand if notice of such demand
is given after such time. Upon any such assignment by an Issuing Bank to any
Lender of a portion of an L/C Advance, such Issuing Bank represents and warrants
to such Lender that such Issuing Bank is the legal and beneficial owner of such
interest being assigned by it, but makes no other representation or warranty and
assumes no responsibility with respect to such L/C Advance, the Loan Documents
or any Loan Party.
SECTION 3.04. OBLIGATIONS ABSOLUTE. The Obligations of the
Borrower under this Agreement, any Letter of Credit Agreement and any other
agreement or instrument relating to any Letter of Credit shall be unconditional
and irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement, such Letter of Credit Agreement and such other agreement or
instrument under all circumstances, including, without limitation, the following
circumstances (it being understood that any such payment by the Borrower is
without prejudice to, and does not constitute a waiver of, any rights the
Borrower might have or might acquire as a result of the payment by any Issuing
Bank of any draft or the reimbursement by the Borrower thereof):
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(a) any lack of validity or enforceability of this Agreement,
any Letter of Credit Agreement, any Letter of Credit or any other agreement or
instrument relating thereto (this Agreement and all of the other foregoing being
collectively referred to herein as the "L/C RELATED DOCUMENTS");
(b) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations of the Borrower in respect
of any L/C Related Document or any other amendment or waiver of or any consent
to departure from all or any of the L/C Related Documents;
(c) the existence of any claim, set-off, defense or other
right that the Borrower or any of its Subsidiaries may have at any time against
any beneficiary or any transferee of a Letter of Credit (or any Persons for whom
any such beneficiary or any such transferee may be acting), any Issuing Bank or
any other Person, whether in connection with the transactions contemplated by
the L/C Related Documents or any unrelated transaction;
(d) any statement or any other document presented under a
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect;
(e) payment by any Issuing Bank under a Letter of Credit
against presentation of a draft or certificate that does not strictly comply
with the terms of such Letter of Credit;
(f) any exchange, release or non-perfection of any Collateral
or other collateral, or any release or amendment or waiver of or consent to
departure from any guarantee, for all or any of the Obligations of the Borrower
in respect of the L/C Related Documents; or
(g) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing, including, without limitation, any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, the Borrower or a guarantor.
SECTION 3.05. LETTER OF CREDIT COMPENSATION.
(a) The Borrower shall pay to the Agent:
(i) for the account of the Issuing Bank which Issues
a Letter of Credit, an issuance fee in an amount equal to 1/8 of 1% per
annum of the average daily Available Amount of such Letter of Credit
outstanding from time to time; and
(ii) for the account of each Lender, a letter of
credit fee with respect to each Letter of Credit, in each case in an
amount equal to:
(a) with respect to each Standby Letter of
Credit, a rate per annum equal to the Applicable Margin for
Eurodollar Rate Advances in effect from time to time on such
Lender's Pro Rata Share of the average daily Available Amount
of such Letter of Credit outstanding from time to time; and
(b) with respect to each Trade Letter of
Credit, 0.50% of the amount of such Lender's Pro Rata Share of
the Available Amount of such Letter of Credit as of the date
of Issuance thereof.
The letter of credit and issuance fees payable under this Section 3.05(a) shall
be payable quarterly in arrears on the last Business Day of each January, April,
July and October, commencing July 31, 1996,
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and on the Revolving A Commitment Termination Date except that the letter of
credit fee payable under Section 3.05(a)(ii)(B) shall be payable upon issuance
of the applicable Letter of Credit. For purposes of computing any fees under
this Section 3.05(a), the determination of the maximum amount available to be
drawn under a Letter of Credit at any time shall assume strict compliance with
all conditions for drawing. Any fees paid pursuant to this Section 3.05(a) are
nonrefundable.
(b) The Borrower shall pay to each Issuing Bank, for its own
account and on demand, such other commissions, issuance fees, transfer fees and
other fees, charges and expenses in connection with the Issuance, amendment,
transfer, cancellation or administration of each Letter of Credit as the
Borrower and such Issuing Bank shall agree; provided that in no event shall any
Issuing Bank require, after giving effect to the amounts payable to it pursuant
to Section 3.05(a) above (in the case of the Issuance of any Letter of Credit),
more than the standard fees, charges and expenses which it normally charges in
connection with such matters.
SECTION 3.06. USE OF LETTERS OF CREDIT. Any Letters of Credit
Issued hereunder shall be used solely (a) to support Obligations of the Borrower
and its Subsidiaries, other than Debt for borrowed money (except that Letters of
Credit may support the Obligations of the Borrower and its Subsidiaries in
respect of the industrial revenue bond identified on Schedule 6.02(a)), not
prohibited hereunder, and (b) for the purposes described in the definition of
"Trade Letter of Credit".
ARTICLE IV
CONDITIONS OF LENDING
SECTION 4.01. CONDITIONS PRECEDENT TO INITIAL BORROWING. The
obligation of each Lender to make an Advance on the occasion of the initial
Borrowing is subject to the satisfaction of the following conditions precedent
on or prior to August 30, 1996:
(a) The Lenders shall be satisfied that all existing
Debt, other than the Debt identified on Schedule 4.01(a) (the
"SURVIVING DEBT"), has been prepaid, redeemed or defeased in full or
otherwise satisfied and extinguished.
(b) There shall have occurred no Material Adverse
Change since January 29, 1996.
(c) There shall exist no action, suit, investigation,
litigation or proceeding affecting any Loan Party pending or threatened
before any court, governmental agency or arbitrator that (i) could have
a Material Adverse Effect or (ii) purports to affect the legality,
validity or enforceability of this Agreement, any Note, any other Loan
Document or the consummation of the transactions contemplated hereby.
(d) The Borrower shall have paid all accrued fees and
expenses of the Agent and the Lenders (including, to the extent
invoiced prior to closing, the accrued fees and expenses of counsel to
the Agent).
(e) The Agent shall have received on or before the
day of the initial Borrowing the following, each dated such day (unless
otherwise specified), in form and substance reasonably satisfactory to
the Lenders (unless otherwise specified) and (except for the Notes) in
sufficient copies for each Lender:
(i) The Notes to the order of each Lender,
as appropriate.
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(ii) Certified copies of the resolutions of
the Board of Directors of the Borrower and each other Loan
Party approving this Agreement, the Notes and each other Loan
Document to which it is or is to be a party, and of all
documents evidencing other necessary corporate action and
governmental approvals, if any, with respect to this
Agreement, the Notes and each other Loan Document.
(iii) A copy of the charter of the Borrower
and each other Loan Party and each amendment thereto,
certified (as of a date reasonably near the date of the
initial Borrowing) by the Secretary of State of the State of
such Loan Party's jurisdiction of incorporation as being a
true and correct copy thereof.
(iv) A copy of a certificate of the
Secretary of State of the State of each Loan Party's
jurisdiction of incorporation, dated reasonably near the date
of the initial Borrowing, listing the charter of such Loan
Party and each amendment thereto on file in such office and
certifying that (A) such amendments are the only amendments to
such Loan Party's charter on file in such office, (B) such
Loan Party has paid all franchise taxes to the date of such
certificate and (C) such Loan Party is duly incorporated and
in good standing under the laws of such State.
(v) A copy of a certificate of the Secretary
of State of the State of California, dated reasonably near the
date of the initial Borrowing, stating that the Borrower and,
to the extent required by the Agent, each other Loan Party is
duly qualified and in good standing as a foreign corporation
in such State and has filed all annual reports required to be
filed to the date of such certificate.
(vi) A certificate of the Borrower and each
other Loan Party, signed on behalf of the Borrower and such
other Loan Party by its President or a Vice President and its
Secretary or any Assistant Secretary, dated the date of the
initial Borrowing (the statements made in which certificate
shall be true on and as of the date of the initial Borrowing),
certifying as to (A) the absence of any amendments to the
charter of the Borrower or such other Loan Party since the
date of the Secretary of State's certificate referred to in
Section 4.01(e)(iv), (B) a true and correct copy of the bylaws
of the Borrower and such other Loan Party as in effect on the
date of the initial Borrowing, (C) the due incorporation and
good standing of the Borrower and such other Loan Party as a
corporation organized under the laws of the State of its
jurisdiction of incorporation, and the absence of any
proceeding for the dissolution or liquidation of the Borrower
or such other Loan Party, (D) the truth of the representations
and warranties contained in the Loan Documents as though made
on and as of the date of the initial Borrowing and (E) the
absence of any event occurring and continuing, or resulting
from the initial Borrowing, that constitutes a Default.
(vii) A certificate of the Secretary or an
Assistant Secretary of the Borrower and each other Loan Party
certifying the names and true signatures of the officers of
the Borrower and such other Loan Party authorized to sign this
Agreement, the Notes and each other Loan Document to which
they are or are to be parties and the other documents to be
delivered hereunder and thereunder.
(viii) A guaranty in substantially the form
of Exhibit E (as amended from time to time in accordance with
its terms, the "GUARANTY"), duly executed by each Subsidiary
of the Borrower.
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(ix) Such financial, business and other
information regarding each Loan Party and their Subsidiaries
as the Required Lenders shall have reasonably requested,
including, without limitation, information as to possible
contingent liabilities, tax matters, environmental matters,
obligations under ERISA and Welfare Plans, collective
bargaining agreements and other arrangements with employees,
audited annual financial statements dated January 29, 1996,
interim financial statements dated the end of the most recent
fiscal quarter for which financial statements are available,
pro forma financial statements as to the Borrower and
forecasts prepared by management of the Borrower, in form and
substance satisfactory to the Lenders, of balance sheets,
income statements and cash flow statements on a monthly basis
for the first year following the day of the initial Borrowing
and on an annual basis for each year thereafter until the
Termination Date.
(x) A favorable opinion of Stradling, Yocca,
Carlson & Rauth, counsel for the Borrower, in substantially
the form of Exhibit F hereto and as to such other matters as
any Lender through the Agent may reasonably request.
(xi) A favorable opinion of Shearman &
Sterling, counsel for the Agent, in form and substance
satisfactory to the Agent.
SECTION 4.02. CONDITIONS PRECEDENT TO EACH BORROWING AND
ISSUANCE. The obligation of each Lender to make an Advance (other than an L/C
Advance) on the occasion of each Borrowing (including the initial Borrowing),
and the right of the Borrower to request the issuance of Letters of Credit,
shall be subject to the further conditions precedent that on the date of such
Borrowing or Issuance the following statements shall be true (and each of the
giving of the applicable Notice of Borrowing or Notice of Issuance and the
acceptance by the Borrower of the proceeds of such Borrowing or of such Letter
of Credit shall constitute a representation and warranty by the Borrower that on
the date of such Borrowing or Issuance such statements are true):
(i) the representations and warranties contained in
each Loan Document are correct on and as of the date of such Borrowing
or Issuance, before and after giving effect to such Borrowing or
Issuance and to the application of the proceeds therefrom, as though
made on and as of such date other than any such representations or
warranties that, by their terms, are specifically made as of a date
other than the date of such Borrowing or Issuance; and
(ii) no event has occurred and is continuing, or
would result from such Borrowing or Issuance or from the application of
the proceeds therefrom, that constitutes a Default.
SECTION 4.03. ADDITIONAL CONDITIONS PRECEDENT TO EACH REVOLVING B
ADVANCE. The obligation of each Lender to make a Revolving B Advance in
connection with any Borrowing shall be subject, in addition to the conditions
set forth in Sections 4.01 and 4.02, to the further conditions precedent that
the Agent shall have received on or before the date of such Borrowing the
following, each dated such date (unless otherwise specified), in form and
substance satisfactory to the Agent and in sufficient copies for each Lender:
(a) In the case of each such Borrowing:
(i) A certificate of the Borrower signed on behalf of the
Borrower by its President or a Vice President and its Secretary or any
Assistant Secretary, dated the date of such Borrowing certifying that
the proceeds of such Borrowing will be used, substantially concurrently
with the
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funding of such Borrowing, solely to pay the purchase price
payable in connection with a Designated Investment or Permitted
Acquisition permitted under Section 6.02(f) and related transaction
fees and costs and further certifying (as of the date of such Borrowing
and both before and after giving effect to such Borrowing and to such
Designated Investment or Acquisition, as the case may be) as to (A) the
truth in all material respects of the representations and warranties of
each Loan Party contained in the Loan Documents as of the date of such
Borrowing and both before and after giving effect to such Designated
Investment or Acquisition, as the case may be, (B) the absence of any
event occurring and continuing, or resulting from such Borrowing and
both before and after giving effect to such Designated Investment or
Acquisition, as the case may be, that constitutes a Default, and (C)
with respect to any such Acquisition, the calculation of and the
satisfaction of the conditions for such Acquisition set forth in
Section 6.02(f)(v).
(ii) Certified copies of the resolutions of the Board of
Directors of the Borrower and, if any Subsidiary of the Borrower will
participate in the applicable Designated Investment or Acquisition, of
such Subsidiary (in each case, to the extent resolutions of the Board
of Directors of the Borrower or such Subsidiary are required or
advisable pursuant to applicable law or the Borrower's or such
Subsidiary's charter documents) and of all documents evidencing other
necessary corporate action and governmental approvals, if any, with
respect to such Designated Investment or Acquisition, as the case may
be, and each document or instrument furnished by it pursuant to this
Section 4.03.
(iii) A certificate of the Secretary or an Assistant Secretary
of the Borrower and of any Subsidiary referred to in clause (ii) above
certifying the names and true signatures of the officers of the
Borrower and such Subsidiary authorized to sign each document or
instrument furnished by it pursuant to this Section 4.03.
(iv) Such other financial, business and other information
regarding such Designated Investment or the Person or assets to be
acquired, as the case may be, as the Agent or the Required Lenders
through the Agent shall have reasonably requested, including, without
limitation, actual and pro forma financial statements and projections
relating to such Person or assets.
(b) In the case of each such Borrowing in connection with a Permitted
Acquisition, to the extent that such Acquisition consists of the acquisition by
the Borrower or any of its Subsidiaries of stock, partnership or other equity
interests of any Person:
(i) An amendment to Guaranty, in substantially the form of
Exhibit G duly executed by such Person.
(ii) A copy of the charter or other organizational document of
such Person and each amendment thereto, if any, certified by the
Secretary of State of its jurisdiction of organization, as of a date
reasonably near the date of such Borrowing, as being a true and correct
copy thereof.
(iii) An officer's certificate signed on behalf of such Person
by an appropriate officer of such Person, certifying as to (A) the
absence of any amendment to the charter or other organizational
document of such Person since the date of the Secretary of State's
certificate referred to in clause (ii) above, (B) a true and correct
copy of the by-laws or similar organizational document of such Person,
(C) a true and correct copy of the resolutions adopted by the Board of
Directors or equivalent body of such Person approving the documents or
instruments to be delivered under this Section 4.03 to which such
Person is a party and the matters contemplated thereby, (D) the
incumbency and specimen signatures of the officers of such
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Person executing the documents and instruments to be delivered under
this Section 4.03 to which such Person is a party, and (E) the due
organization and good standing of such Person as a Person organized
under the laws of its jurisdiction of organization.
SECTION 4.04. DETERMINATIONS UNDER SECTION 4.01 AND 4.03. For
purposes of determining compliance with the conditions specified in Section 4.01
and 4.03, each Lender shall be deemed to have consented to, approved or accepted
or to be satisfied with each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to the Lenders unless
an officer of the Agent responsible for the transactions contemplated by the
Loan Documents shall have received notice from such Lender prior to the
applicable Borrowing specifying its objection thereto and such Lender shall not
have made available to the Agent such Lender's ratable portion of such
Borrowing.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.01. REPRESENTATIONS AND WARRANTIES OF THE BORROWER.
The Borrower represents and warrants as follows:
(a) INCORPORATION, QUALIFICATION, CORPORATE POWER AND
AUTHORITY. Each Loan Party (i) is a corporation duly organized, validly
existing and good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which it owns or leases
property or in which the conduct of its business requires it to so
qualify or be licensed except where the failure to so qualify or be
licensed would not have a Material Adverse Effect and (iii) has all
requisite corporate power and authority to own or lease and operate its
properties and to carry on its business as now conducted and as
proposed to be conducted.
(b) CAPITAL STOCK. Set forth on Schedule 5.01(b)
hereto is a complete and accurate list of all Subsidiaries of each Loan
Party, showing as of the date hereof (as to each such Subsidiary) the
jurisdiction of its incorporation, the number of shares of each class
of capital stock authorized, and the number outstanding, on the date
hereof and the percentage of the outstanding shares of each such class
owned (directly or indirectly) by such Loan Party and the number of
shares covered by all outstanding options, warrants, rights of
conversion or purchase and similar rights at the date hereof. All of
the outstanding capital stock of all of such Subsidiaries has been
validly issued, is fully paid and non-assessable and is owned by such
Loan Party or one or more of its Subsidiaries free and clear of all
Liens. Each such Subsidiary (i) is a corporation duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation, (ii) is duly qualified and in good
standing as a foreign corporation in each other jurisdiction in which
it owns or leases property or in which the conduct of its business
requires it to so qualify or be licensed except where the failure to so
qualify or be licensed would not have a Material Adverse Effect and
(iii) has all requisite corporate power and authority to own or lease
and operate its properties and to carry on its business as now
conducted and as proposed to be conducted.
(c) AUTHORIZATION; NO CONFLICT OR VIOLATION;
COMPLIANCE WITH LAWS. The execution, delivery and performance by each
Loan Party of this Agreement, the Notes, each other Loan Document and
each Related Document to which it is or is to be a party, and the
consummation of the transactions contemplated hereby and thereby, are
within such Loan Party's corporate powers, have been duly authorized by
all necessary corporate action, and do not (i) contravene such Loan
Party's charter or by-laws, (ii) violate any law (including, without
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limitation, the Securities Exchange Act of 1934 and the Racketeer
Influenced and Corrupt Organizations Chapter of the Organized Crime
Control Act of 1970), rule, regulation (including, without limitation,
Regulation X of the Board of Governors of the Federal Reserve System),
order, writ, judgment, injunction, decree, determination or award,
(iii) conflict with or result in the breach of, or constitute a default
under, any contract, loan agreement, indenture, mortgage, deed of
trust, lease or other instrument binding on or affecting any Loan
Party, any of its Subsidiaries or any of their properties or (iv)
result in or require the creation or imposition of any Lien upon or
with respect to any of the properties of any Loan Party or any of its
Subsidiaries. No Loan Party or any of its Subsidiaries is in violation
of any such law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award or in breach of any such contract, loan
agreement, indenture, mortgage, deed of trust, lease or other
instrument, the violation or breach of which could have a Material
Adverse Effect.
(d) APPROVALS AND CONSENTS. No authorization or
approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body or any other third party is
required for (i) the due execution, delivery, recordation, filing or
performance by any Loan Party of this Agreement, the Notes, any other
Loan Document or any Related Document to which it is or is to be a
party, or for the consummation of the transactions contemplated hereby
and thereby, or (ii) the exercise by the Agent or any Lender of its
rights under the Loan Documents. All applicable waiting periods in
connection with each Permitted Acquisition and the other transactions
contemplated hereby and by each Related Document have expired without
any action having been taken by any competent authority restraining,
preventing or imposing materially adverse conditions upon the rights of
the Loan Parties or their Subsidiaries freely to transfer or otherwise
dispose of, or to create any Lien on, any properties now owned or
hereafter acquired by any of them.
(e) ENFORCEABILITY. This Agreement has been, and each
of the Notes and each other Loan Document when delivered hereunder will
have been, duly executed and delivered by each Loan Party party
thereto. This Agreement is, and each of the Notes and each other Loan
Document when delivered hereunder will be, the legal, valid and binding
obligation of each Loan Party party thereto, enforceable against such
Loan Party in accordance with its terms.
(f) FINANCIAL STATEMENTS
(i) The Consolidated and consolidating
balance sheets of the Borrower and its Subsidiaries as at
January 29, 1996, and the related Consolidated and
consolidating statements of income and cash flows of the
Borrower and its Subsidiaries for the fiscal year then ended,
accompanied by an opinion of KPMG Peat Marwick LLP,
independent public accountants, and the Consolidated and
consolidating balance sheets of the Borrower and its
Subsidiaries as at May 20, 1996, and the related Consolidated
and consolidating statements of income and cash flows of the
Borrower and its Subsidiaries for the sixteen weeks then
ended, duly certified by the chief financial officer of the
Borrower, copies of which have been furnished to each Lender,
fairly present, subject, in the case of said balance sheets as
at May 20, 1996, and said statements of income and cash flows
for the sixteen weeks then ended, to year-end audit
adjustments, the Consolidated and consolidating financial
condition of the Borrower and its Subsidiaries as at such
dates and the Consolidated and consolidating results of the
operations of the Borrower and its Subsidiaries for the
periods ended on such dates, all in accordance with generally
accepted accounting principles applied on a consistent basis,
and since January 29, 1996, there has been no Material Adverse
Change.
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(ii) The Consolidated and consolidating
forecasted balance sheets, income statements and cash flows
statements of the Borrower and its Subsidiaries delivered to
the Lenders pursuant to Section 4.01(e)(ix) or 6.03(d) were
prepared in good faith on the basis of the assumptions stated
therein, which assumptions were fair in the light of
conditions existing at the time of delivery of such forecasts,
and represented, at the time of delivery, the Borrower's best
estimate of its future financial performance.
(g) DISCLOSURE. Neither the Information Memorandum
nor any other information, exhibit or report furnished by any Loan
Party to the Agent or any Lender in connection with the negotiation of
the Loan Documents or pursuant to the terms of the Loan Documents
contained any untrue statement of a material fact or omitted to state a
material fact necessary to make the statements made therein not
misleading.
(h) LITIGATION. There is no action, suit,
investigation, litigation or proceeding affecting any Loan Party or any
of their Subsidiaries, including any Environmental Action, pending or
threatened before any court, governmental agency or arbitrator that (i)
could have a Material Adverse Effect or (ii) purports to affect the
legality, validity or enforceability of this Agreement, any Note, any
other Loan Document or any Related Document or the consummation of the
transactions contemplated hereby or thereby.
(i) USE OF PROCEEDS.
(i) No proceeds of any Advance will be used
to acquire any equity security of a class that is registered
pursuant to Section 12 of the Securities Exchange Act of 1934
in connection with any Acquisition or proposed Acquisition of
the issuer of such equity securities unless the issuer (or its
board of directors) has consented to such Acquisition or
proposed Acquisition of such issuer prior to such use of
proceeds.
.
(ii) The Borrower is not engaged in the
business of extending credit for the purpose of purchasing or
carrying Margin Stock.
(iii) Following application of the proceeds
of each Advance, not more than 25 percent of the value of the
assets (either of the Borrower only or of the Borrower and its
Subsidiaries on a Consolidated basis) subject to the
provisions of Section 6.02(a) or 6.02(e) or subject to any
restriction contained in any agreement or instrument between
the Borrower and any Lender or any Affiliate of any Lender
relating to Debt and within the scope of Section 7.01(e) will
be Margin Stock.
(j) PENSION PLANS.
(i) No ERISA Event has occurred or is
reasonably expected to occur with respect to any Plan of any
Loan Party or any of its ERISA Affiliates.
(ii) Schedule B (Actuarial Information) to
the 1995 annual report (Form 5500 Series) for each Plan of any
Loan Party or any of its ERISA Affiliates, copies of which
have been filed with the Internal Revenue Service and
furnished to the Lenders, is complete and accurate and fairly
presents the funding status of such Plan, and since the date
of such Schedule B there has been no material adverse change
in such funding status.
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(iii) Neither any Loan Party nor any of its
ERISA Affiliates has incurred or is reasonably expected to
incur any Withdrawal Liability to any Multiemployer Plan.
(iv) Neither any Loan Party nor any of its
ERISA Affiliates has been notified by the sponsor of a
Multiemployer Plan of any Loan Party or any of its ERISA
Affiliates that such Multiemployer Plan is in reorganization
or has been terminated, within the meaning of Title IV of
ERISA, and no such Multiemployer Plan is reasonably expected
to be in reorganization or to be terminated, within the
meaning of Title IV of ERISA.
(v) The aggregate annualized cost
(including, without limitation, the cost of insurance
premiums) with respect to post-retirement benefits under
Welfare Plans for which the Loan Parties and their
Subsidiaries are liable does not exceed $500,000.
(k) NO ADVERSE CONDITIONS. Neither the business nor
the properties of any Loan Party or any of its Subsidiaries are
affected by any fire, explosion, accident, strike, lockout or other
labor dispute, drought, storm, hail, earthquake, embargo, act of God or
of the public enemy or other casualty (whether or not covered by
insurance) that could have a Material Adverse Effect.
(l) COMPLIANCE WITH ENVIRONMENTAL LAWS.
(i) The operations and properties of each
Loan Party and each of its Subsidiaries comply in all material
respects with all Environmental Laws, all necessary
Environmental Permits have been obtained and are in effect for
the operations and properties of each Loan Party and its
Subsidiaries, each Loan Party and its Subsidiaries are in
compliance in all material respects with all such
Environmental Permits, and no circumstances exist that could
(i) form the basis of an Environmental Action against any Loan
Party or any of its Subsidiaries or any of their properties
that could have a Material Adverse Effect or (ii) cause any
such property to be subject to any restrictions on ownership,
occupancy, use or transferability under any Environmental Law.
(ii) None of the properties of any Loan
Party or any of its Subsidiaries is listed or proposed for
listing on the National Priorities List under CERCLA or on the
Comprehensive Environmental Response, Compensation and
Liability Information System maintained by the Environmental
Protection Agency or any analogous state list of sites
requiring investigation or cleanup or is adjacent to any such
property, and no underground storage tanks, as such term is
defined in 42 U.S.C.Section 6991, are located on any property
of any Loan Party or any of its Subsidiaries or, to the best
of its knowledge, on any adjoining property.
(iii) Neither any Loan Party nor any of its
Subsidiaries has transported or arranged for the
transportation of any Hazardous Materials to any location that
is listed or proposed for listing on the National Priorities
List under CERCLA or on the Comprehensive Environmental
Response, Compensation and Liability Information System
maintained by the Environmental Protection Agency or any
analogous state list, Hazardous Materials have not been
generated, used, treated, handled, stored or disposed of on,
or released or transported to or from, any property of any
Loan Party or any of its Subsidiaries or, to the best of its
knowledge, any adjoining property, except for limited
quantities required in connection with the normal operation
and maintenance of
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such properties and used or stored at such properties in
compliance with all Environmental Laws and Environmental
Permits, and all other wastes generated at any such properties
have been disposed of in compliance with all Environmental
Laws and Environmental Permits.
(m) NO BURDENSOME AGREEMENTS. Neither any Loan Party
nor any of its Subsidiaries is a party to any indenture, loan or credit
agreement or any lease or other agreement or instrument or subject to
any charter or corporate restriction that could reasonably be expected
to have a Material Adverse Effect.
(n) TAX INFORMATION.
(i) Each Loan Party and each of its
Subsidiaries has filed, has caused to be filed or has been
included in all tax returns (Federal, state, local and
foreign) required to be filed and has paid all taxes shown
thereon to be due, together with applicable interest and
penalties.
(ii) Set forth on Schedule 5.01(n) hereto is
a complete and accurate list, as of the date hereof, of each
taxable year of the Borrower for which Federal income tax
returns have been filed and for which the expiration of the
applicable statute of limitations for assessment or collection
has not occurred by reason of extension or otherwise (an "OPEN
YEAR").
(iii) The aggregate unpaid amount, as of the
date hereof, of adjustments to the Federal income tax
liability of the Borrower proposed by the Internal Revenue
Service with respect to Open Years does not exceed $1,000,000.
No issues have been raised by the Internal Revenue Service in
respect of Open Years that, in the aggregate, could have a
Material Adverse Effect.
(iv) The aggregate unpaid amount, as of the
date hereof, of adjustments to the state, local and foreign
tax liability of the Borrower and its Subsidiaries proposed by
all state, local and foreign taxing authorities (other than
amounts arising from adjustments to Federal income tax
returns) does not exceed $1,000,000. No issues have been
raised by such taxing authorities that, in the aggregate,
could have a Material Adverse Effect.
(o) NO INVESTMENT COMPANY. Neither any Loan Party nor
any of its Subsidiaries is an "investment company," or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment
Company Act of 1940, as amended. Neither the making of any Advances,
nor the issuance of any Letters of Credit, nor the application of the
proceeds or repayment thereof by the Borrower, nor the consummation of
the other transactions contemplated hereby, will violate any provision
of such Act or any rule, regulation or order of the Securities and
Exchange Commission thereunder.
(p) SOLVENCY. Each Loan Party is, individually and
together with its Subsidiaries, Solvent.
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(q) DEBT OF THE BORROWER AND ITS SUBSIDIARIES.
(i) Set forth on Schedule 5.01(q) hereto is
a complete and accurate list of all existing Debt (other than
Surviving Debt), showing as of the date set forth on such
Schedule the principal amount outstanding thereunder.
(ii) Set forth on Schedule 4.01(a) hereto is
a complete and accurate list of all Surviving Debt, showing as
of the date set forth on such Schedule the principal amount
outstanding thereunder (and such principal amount does not, as
of the Closing Date, exceed the amount set forth on such
Schedule).
(r) INVESTMENTS. Set forth on Schedule 5.01(r) hereto
is a complete and accurate list of all Investments held by any Loan
Party, showing as of the date hereof the amount, obligor or issuer and
maturity, if any, thereof.
(s) OTHER AGREEMENTS. Schedule 5.01(s) sets forth a
complete and accurate list as of the date hereof of (i) all joint
venture and partnership agreements to which the Borrower or any of its
Subsidiaries is a party, and (ii) all covenants not to compete
restricting the Borrower or any of its Subsidiaries to which the
Borrower or any of its Subsidiaries is a party or by which the Borrower
or any of its Subsidiaries is bound.
ARTICLE VI
COVENANTS OF THE BORROWER
SECTION 6.01. AFFIRMATIVE COVENANTS. So long as any Advance
shall remain unpaid, any Letter of Credit shall be outstanding or any Lender
shall have any Commitment hereunder, the Borrower will, unless the Required
Lenders shall otherwise consent in writing:
(a) COMPLIANCE WITH LAWS, ETC. Comply, and cause each
of its Subsidiaries to comply, in all material respects, with all
applicable laws, rules, regulations and orders, such compliance to
include, without limitation, compliance with ERISA and the Racketeer
Influenced and Corrupt Organizations Chapter of the Organized Crime
Control Act of 1970.
(b) PAYMENT OF TAXES, ETC. Pay and discharge, and
cause each of its Subsidiaries to pay and discharge, before the same
shall become delinquent, (i) all taxes, assessments and governmental
charges or levies imposed upon it or upon its property and (ii) all
lawful claims that, if unpaid, might by law become a Lien upon its
property; provided, however, that neither the Borrower nor any of its
Subsidiaries shall be required to pay or discharge any such tax,
assessment, charge or claim that is being contested in good faith and
by proper proceedings and as to which appropriate reserves are being
maintained, unless and until any Lien resulting therefrom attaches to
its property and becomes enforceable against its other creditors.
(c) COMPLIANCE WITH ENVIRONMENTAL LAWS. Comply, and
cause each of its Subsidiaries and all lessees and other Persons
occupying its properties to comply, in all material respects, with all
Environmental Laws and Environmental Permits applicable to its
operations and properties; obtain and renew all Environmental Permits
necessary for its operations and properties; and conduct, and cause
each of its Subsidiaries to conduct, any investigation, study, sampling
and testing, and undertake any cleanup, removal, remedial or other
action necessary to remove and clean up all Hazardous Materials from
any of its properties, in accordance with the requirements of all
Environmental Laws; provided, however, that neither the Borrower nor
any
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of its Subsidiaries shall be required to undertake any such
cleanup, removal, remedial or other action to the extent that its
obligation to do so is being contested in good faith and by proper
proceedings and appropriate reserves are being maintained with respect
to such circumstances.
(d) MAINTENANCE OF INSURANCE. Maintain, and cause
each of its Subsidiaries to maintain, insurance with responsible and
reputable insurance companies or associations in such amounts and
covering such risks as is usually carried by companies engaged in
similar businesses and owning similar properties in the same general
areas in which the Borrower or such Subsidiary operates.
(e) PRESERVATION OF CORPORATE EXISTENCE, ETC.
Preserve and maintain, and cause each of its Subsidiaries to preserve
and maintain, its corporate existence, rights (charter and statutory)
and franchises; provided, however, that the Borrower and its
Subsidiaries may consummate any merger or consolidation permitted under
Section 6.02(d) and provided further, neither the Borrower nor any of
its Subsidiaries shall be required to preserve any right or franchise
if the Board of Directors of the Borrower or such Subsidiary shall
determine that the preservation thereof is no longer desirable in the
conduct of the business of the Borrower or such Subsidiary, as the case
may be, and that the loss thereof is not disadvantageous in any
material respect to the Borrower, such Subsidiary or the Lenders.
(f) VISITATION RIGHTS. At any reasonable time and
from time to time, in each case upon not less than 3 Business Days'
prior notice (unless the Borrower shall agree to less notice and except
that no such prior notice shall be required if an Event of Default has
occurred and is continuing), permit the Agent or any of the Lenders or
any agents or representatives thereof, to examine and make copies of
and abstracts from the records and books of account of, and visit the
properties of, the Borrower and any of its Subsidiaries, and to discuss
the affairs, finances and accounts of the Borrower and any of its
Subsidiaries with any of their officers or directors and with their
independent certified public accountants.
(g) KEEPING OF BOOKS. Keep, and cause each of its
Subsidiaries to keep, proper books of record and account, in which full
and correct entries shall be made of all financial transactions and the
assets and business of the Borrower and each such Subsidiary in
accordance with generally accepted accounting principles in effect from
time to time.
(h) MAINTENANCE OF PROPERTIES, ETC. Maintain and
preserve, and cause each of its Subsidiaries to maintain and preserve,
all of its properties that are used or useful in the conduct of its
business in good working order and condition, ordinary wear and tear
excepted.
(i) COMPLIANCE WITH TERMS OF LEASEHOLDS. Make all
payments and otherwise perform all obligations in respect of all leases
of real property, keep all such leases that are used or useful in the
conduct of the business of the Borrower and its Subsidiaries in full
force and effect and not allow such leases to lapse or be terminated or
any rights to renew such leases to be forfeited or cancelled, notify
the Agent of any default by any party with respect to such leases and
cooperate with the Agent in all respects to cure any such default, and
cause each of its Subsidiaries to do so.
(j) PERFORMANCE OF RELATED DOCUMENTS. Perform and
observe all of the terms and provisions of each Related Document to be
performed or observed by it, maintain each such Related Document in
full force and effect and enforce such Related Document in accordance
with its terms.
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52
(k) TRANSACTIONS WITH AFFILIATES. Conduct, and cause
each of its Subsidiaries to conduct, all transactions otherwise
permitted under the Loan Documents with any of their Affiliates on
terms that are fair and reasonable and no less favorable to the
Borrower or such Subsidiary than it would obtain in a comparable
arm's-length transaction with a Person not an Affiliate.
(l) ADDITIONAL LOAN PARTIES. Substantially
concurrently with the formation or acquisition of any Subsidiary of the
Borrower, cause such Subsidiary to guarantee all Obligations of the
Borrower hereunder and under the Notes by executing and delivering to
the Agent an amendment to Guaranty in substantially the form of Exhibit
G.
SECTION 6.02. NEGATIVE COVENANTS. So long as any Advance shall
remain unpaid, any Letter of Credit shall be outstanding or any Lender shall
have any Commitment hereunder, the Borrower will not, at any time, without the
written consent of the Required Lenders or, if required under Section 9.01, of
all of the Lenders:
(a) LIENS, ETC. Create, incur, assume or suffer to
exist, or permit any of its Subsidiaries to create, incur, assume or
suffer to exist, any Lien on or with respect to any of its properties
of any character (including, without limitation, accounts) whether now
owned or hereafter acquired, or sign or file, or permit any of its
Subsidiaries to sign or file, under the Uniform Commercial Code of any
jurisdiction, a financing statement that names the Borrower or any of
its Subsidiaries as debtor, or sign, or permit any of its Subsidiaries
to sign, any security agreement authorizing any secured party
thereunder to file such financing statement, or assign, or permit any
of its Subsidiaries to assign, any accounts or other right to receive
income, excluding, however, from the operation of the foregoing
restrictions the following:
(i) Permitted Liens;
(ii) the Liens described on Schedule
6.02(a);
(iii) purchase money Liens upon or in
property acquired or held by the Borrower or any of its
Subsidiaries in the ordinary course of business to secure the
purchase price of such property or to secure Debt incurred
solely for the purpose of financing the acquisition of any
such property to be subject to such Liens, or Liens existing
on any such property at the time of acquisition, or
extensions, renewals or replacements of any of the foregoing
for the same or a lesser amount; provided, however, that no
such Lien shall extend to or cover any property other than the
property being acquired, and no such extension, renewal or
replacement shall extend to or cover any property not
theretofore subject to the Lien being extended, renewed or
replaced; and provided further that the aggregate principal
amount of the Debt secured by Liens permitted by this clause
(iii) shall not exceed $1,000,000 at any time outstanding and
that any such Debt shall not otherwise be prohibited by the
terms of the Loan Documents;
(iv) Liens arising in connection with
Capitalized Leases permitted under Section 6.02(c);
(v) Liens securing Debt permitted under
Section 6.02(b)(iii)(D); provided, however, that no such Lien
shall extend to or cover any property other than the property
subject to such Lien immediately prior to the consummation of
the Permitted Acquisition pursuant to which the Debt secured
by such Lien was acquired;
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(vi) other Liens securing Debt outstanding
in an aggregate principal amount not to exceed $5,000,000;
(vii) Liens securing Permitted Acquisition
Financing so long as such Liens do not extend to the capital
stock of any of the Borrower's Subsidiaries; and
(viii) the replacement, extension or renewal
of any Lien permitted by clause (ii) above upon or in the same
property theretofore subject thereto or the replacement,
extension or renewal (without increase in the amount or change
in any direct or contingent obligor) of the Debt secured
thereby.
(b) DEBT. Create, incur, assume or suffer to exist,
or permit any of its Subsidiaries to create, incur, assume or suffer to
exist, any Debt other than:
(i) in the case of the Borrower,
(A) Debt under the Loan Documents,
(B) Permitted Subordinated Debt in
an aggregate principal amount at any time
outstanding not to exceed $15,000,000 minus the
aggregate principal amount of any Permitted
Acquisition Financing then outstanding (or, in the
case of Permitted Acquisition Financing consisting of
a sale-leaseback transaction, the aggregate remaining
lease payments in respect thereof less reasonable
amounts in respect of such payments properly
attributable to interest, taxes, insurance,
maintenance and other similar charges),
(C) Debt in respect of Hedge
Agreements in an aggregate notional amount not to
exceed $5,000,000 at any time outstanding;
(ii) in the case of any of its Subsidiaries,
Debt owed to the Borrower or to a wholly-owned Subsidiary of
the Borrower; and
(iii) in the case of the Borrower and any of
its Subsidiaries,
(A) Debt under the Loan Documents,
(B) Debt secured by Liens permitted
by Section 6.02(a)(iii) not to exceed in the
aggregate the amount set forth in such
Section,
(C) the Surviving Debt, and any
Debt extending the maturity of, or refunding
or refinancing, in whole or in part, any
Surviving Debt, provided that the terms of
any such extending, refunding or refinancing
Debt, and of any agreement entered into and
of any instrument issued in connection
therewith, are otherwise permitted by the
Loan Documents and further provided that the
principal amount of such Surviving Debt
shall not be increased above the principal
amount thereof outstanding immediately prior
to such extension, refunding or refinancing,
and the direct and contingent obligors
therefor shall not be changed, as a result
of or in connection with such extension,
refunding or refinancing,
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(D) (1) Debt of Summit acquired as
a result of (but not incurred in
contemplation of) the Summit Acquisition in
an aggregate principal amount not to exceed
$15,000,000, and (2) purchase money Debt of
any Person acquired in a Permitted
Acquisition and assumed in connection with
(but not incurred in contemplation of) such
Permitted Acquisition in an aggregate
principal amount not to exceed $5,000,000
(it being understood that this limitation
does not apply to Debt under Capitalized
Leases) at any one time outstanding, and
(3) Debt in respect of the Permitted
Acquisition Financing in an aggregate
principal amount not to exceed $15,000,000,
(E) Debt in respect of Capitalized
Leases permitted under Section 6.02(c), and
(F) indorsement of negotiable
instruments for deposit or collection or
similar transactions in the ordinary course
of business.
(c) LEASE OBLIGATIONS. Create, incur, assume or
suffer to exist, or permit any of its Subsidiaries to create, incur,
assume or suffer to exist, any obligations as lessee (i) for the rental
or hire of real or personal property in connection with any sale and
leaseback transaction other than the Permitted Acquisition Financing,
or (ii) for the rental or hire of other real or personal property of
any kind under leases or agreements to lease including Capitalized
Leases except in the case of this clause (iii) for leases (including
Capitalized Leases) entered into for fair market value in the ordinary
course of business of the Borrower and its Subsidiaries.
(d) MERGERS, ETC. Merge into or consolidate with any
Person or permit any Person to merge into it, or permit any of its
Subsidiaries to do so, except that (i) any Subsidiary of the Borrower
may merge into or consolidate with any wholly owned Subsidiary of the
Borrower provided that, in the case of any such consolidation, the
Person formed by such consolidation shall be a wholly owned Subsidiary
of the Borrower, (ii) any of the Borrower's Subsidiaries that is
Solvent may merge into the Borrower and (iii) each of the Borrower and
any of its Subsidiaries may merge or consolidate with any other Solvent
Person acquired in a Permitted Acquisition permitted hereunder;
provided, however, that in each case, immediately after giving effect
thereto, no event shall occur and be continuing that constitutes a
Default and, in the case of any such merger to which the Borrower or
any Guarantor is a party, the Borrower or such Guarantor is the
surviving corporation.
(e) SALES, ETC. OF ASSETS. Sell, lease, transfer or
otherwise dispose of, or permit any of its Subsidiaries to sell, lease,
transfer or otherwise dispose of, any assets, or grant any option or
other right to purchase, lease or otherwise acquire any assets except:
(i) sales of inventory in the ordinary
course of its business;
(ii) the sale by the Borrower and its
Subsidiaries, after the consummation of the Summit
Acquisition, of assets used in connection with the operation
of JB's Restaurants (and not necessary to the continued
operation of the business acquired in the Summit Acquisition
other than JB's Restaurants), so long as the purchase price
paid to the Borrower or such Subsidiary for such assets shall
be no less than the fair market value of such assets at the
time of such sale;
(iii) the sale of any other asset by the
Borrower or any of its Subsidiaries (other than a bulk sale of
inventory and a sale of receivables other than delinquent
accounts for
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collection purposes only and other than a sale of any capital
stock of Carl Karcher Enterprises, Inc.) so long as (A) the
purchase price paid to the Borrower or such Subsidiary for
such asset shall be no less than the fair market value of such
asset at the time of such sale, (B) the purchase price for
such asset shall be paid to the Borrower or such Subsidiary
solely in cash (except for non-cash consideration in the form
of promissory notes maturing not later than 2 years after the
date of issuance and in an aggregate principal amount for all
such promissory notes not to exceed $5,000,000 at any one time
outstanding) and Cash Equivalents, (C) the aggregate fair
market value of such asset and all other assets sold by the
Borrower and its Subsidiaries during the same Fiscal Year
pursuant to this clause (iii) shall not exceed 20% of the
total assets of the Borrower and its Subsidiaries determined
on a Consolidated basis in accordance with GAAP, and (D) the
Borrower shall, on the date of such sale, prepay the Advances
pursuant to, and in the order of priority set forth in,
Section 2.05(b) in an aggregate principal amount equal to the
Net Cash Proceeds received by the Borrower or such Subsidiary
from the sale of such asset; and
(iv) so long as no Default shall occur and
be continuing, the grant of any option or other right to
purchase any asset in a transaction which would be permitted
under the provisions of the preceding clauses (ii) and (iii).
(f) ACQUISITIONS; INVESTMENTS IN OTHER PERSONS. Make,
or permit any of its Subsidiaries to make, any Acquisition or make or
hold, or permit any of its Subsidiaries to make or hold, any Investment
in any Person other than:
(i) Investments by the Borrower and its
Subsidiaries in their Subsidiaries outstanding on the date
hereof and additional investments in wholly-owned Subsidiaries
of the Borrower in an aggregate amount invested from the date
hereof not to exceed $5,000,000;
(ii) loans and advances to officers and
employees of the Borrower and its Subsidiaries in the ordinary
course of the business of the Borrower and its Subsidiaries as
presently conducted in an aggregate principal amount not to
exceed $1,000,000 at any time outstanding;
(iii) (A) Investments by the Borrower and
its Subsidiaries in Cash Equivalents, (B) Investments set
forth on Schedule 5.01(r), and (C) Investments consisting of
promissory notes permitted to be received as consideration in
connection with asset dispositions permitted under Section
6.02(e);
(iv) other Designated Investments in an
aggregate amount invested and not recovered not to exceed at
any one time (A) $15,000,000 minus (B) the amount, if any, by
which the aggregate consideration paid by the Borrower and its
Subsidiaries in connection with all Permitted Acquisitions
after the date hereof (excluding from the calculation of such
aggregate consideration (I) consideration paid in the form of
common stock of the Borrower, and (II) consideration paid with
the proceeds of Permitted Subordinated Debt or Permitted
Acquisition Financing) exceeds the sum of (1) $10,000,000 plus
(2) the Additional Investment Amount;
(v) Permitted Acquisitions, on the condition
that, in the case of each Permitted Acquisition and giving
effect to such Acquisition, the conditions referred to in
clauses (A) through (G) below are satisfied (it being
understood that, for purposes of
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clause (B) below, the phrase "the Borrower and its
Subsidiaries" and the phrase "Consolidated" shall be deemed to
include the Person or assets to be acquired as though such
Person or assets were a Subsidiary of the Borrower):
(A) the Person or assets to be acquired
satisfy the criteria set forth in the definition of
"Permitted Acquisition" contained in Section 1.01;
(B) the Borrower shall have delivered to the
Agent a certificate of the chief financial officer of
the Borrower, in form and substance satisfactory to
the Agent, demonstrating compliance by the Borrower
and its Subsidiaries with the covenants set forth in
Section 6.04, on a pro forma basis after giving
effect to such Acquisition, for a period of four
fiscal quarters after the date of such Acquisition;
(C) the representations and warranties
contained in each Loan Document are correct in all
material respects on and as of the date of such
Acquisition, after giving effect to such Acquisition,
as though made on and as of such date, other than any
such representations and warranties that by their
terms are specifically made as of a date other than
such date;
(D) no event has occurred and is continuing
on the date of such Acquisition, or would result from
such Acquisition, that constitutes a Default or an
Event of Default;
(E) that such Acquisition would not, as of
the date of such Acquisition, have a Material Adverse
Effect;
(F) if such Acquisition is not financed, in
whole or in part, with the proceeds of Revolving B
Advances, the Borrower, its Subsidiaries and the
Person being acquired, as applicable, shall have
complied with the provisions of Section 4.03 with
respect to such Acquisition prior to the consummation
thereof as if such Acquisition were financed with the
proceeds of Revolving B Advances; and
(G) the aggregate consideration paid by the
Borrower and its Subsidiaries in connection with all
Permitted Acquisitions after the date hereof
(excluding from the calculation of such aggregate
consideration (I) consideration paid in the form of
common stock of the Borrower, and (II) consideration
paid with the proceeds of Permitted Subordinated Debt
or Permitted Acquisition Financing) shall not exceed
(1) the sum of (a) $25,000,000 plus (b) the
Additional Investment Amount minus (2) the aggregate
amount invested and not recovered in connection with
all Designated Investments after the date hereof.
(g) DIVIDENDS, ETC. Declare or pay any dividends,
purchase, redeem, retire, defease or otherwise acquire for value any of
its capital stock or any warrants, rights or options to acquire such
capital stock, now or hereafter outstanding, return any capital to its
stockholders as such, make any distribution of assets, capital stock,
warrants, rights, options, obligations or securities to its
stockholders as such, or permit any of its Subsidiaries to purchase,
redeem, retire, defease or otherwise acquire for value any capital
stock of the Borrower or any warrants, rights or options to acquire
such capital stock or to issue or sell any capital stock or any
warrants, rights or options to acquire such capital stock, except that,
so long as no Default shall have occurred and be continuing, the
Borrower may:
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(i) declare and deliver dividends and
distributions payable only in common stock of the Borrower;
and
(ii) declare and pay cash dividends to its
stockholders and purchase, redeem, retire or otherwise acquire
shares of its own outstanding capital stock for cash if after
giving effect thereto the aggregate amount of such dividends,
purchases, redemptions, retirements and acquisitions paid or
made after the date hereof would be less than the sum of
$5,000,000 plus 50% of Consolidated Net Income of the Borrower
for the fiscal year immediately preceding the year in which
such dividend, purchase, redemption, retirement or acquisition
is paid or made.
(h) CHANGE IN NATURE OF BUSINESS. Make, or permit any
of its Subsidiaries to make, any material change in the nature of its
business as carried on at the date hereof.
(i) CHARTER AMENDMENTS. Amend, or permit any of its
Subsidiaries to amend, its certificate of incorporation or bylaws in
any manner that could adversely effect the Agent or any Lender Party.
(j) ACCOUNTING CHANGES. Make or permit, or permit any
of its Subsidiaries to make or permit, any change in accounting
policies or reporting practices, except as required by generally
accepted accounting principles.
(k) PREPAYMENTS, ETC. OF DEBT. Prepay, redeem,
purchase, defease or otherwise satisfy prior to the scheduled maturity
thereof in any manner, or make any payment in violation of any
subordination terms of, any Debt, other than (i) the prepayment of the
Advances in accordance with the terms of this Agreement and (ii)
regularly scheduled or required repayments or redemptions of Surviving
Debt, or amend, modify or change in any manner any term or condition of
any Surviving Debt or Subordinated Debt, or permit any of its
Subsidiaries to do any of the foregoing other than to prepay any Debt
payable to the Borrower.
(l) PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES.
Enter into or permit to exist, or permit any of its Subsidiaries to
enter into or permit to exist, any agreement, instrument or other
document which directly or indirectly prohibits or restricts in any
manner, or would have the effect of prohibiting or restricting in any
manner, the ability of any of the Borrower's Subsidiaries to (i) pay
dividends or make any other distributions in respect of its capital
stock or any other equity interest or participation in its profits
owned by the Borrower or any of its Subsidiaries, or pay or repay any
Debt owed to the Borrower or any of its Subsidiaries, (ii) make loans
or advances to the Borrower, or (iii) transfer any of its properties or
assets to the Borrower or any of its Subsidiaries.
(m) PARTNERSHIPS. Become a general partner in any
general or limited partnership, or permit any of its Subsidiaries to do
so, other than any Subsidiary the sole assets of which consist of its
interest in such partnership.
SECTION 6.03. REPORTING REQUIREMENTS. So long as any Advance
shall remain unpaid, any Letter of Credit shall be outstanding or any Lender
shall have any Commitment hereunder, the Borrower will, unless the Required
Lenders shall otherwise consent in writing, furnish to the Lenders:
(a) DEFAULT NOTICE. Within two Business Days after
the occurrence of each Default continuing on the date of such
statement, a statement of the chief financial officer of the
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Borrower setting forth details of such Default and the action that the
Borrower has taken and proposes to take with respect thereto.
(b) QUARTERLY FINANCIALS. As soon as available and,
in any event, within 45 days after the end of each of the first three
quarters of each fiscal year of the Borrower, Consolidated and
consolidating balance sheets of the Borrower and its Subsidiaries as of
the end of such quarter and Consolidated and consolidating statements
of income and cash flows of the Borrower and its Subsidiaries for the
period commencing at the end of the previous fiscal year and ending
with the end of such quarter, setting forth in each case in comparative
form the corresponding figures for the corresponding period of the
preceding fiscal year, all in reasonable detail and duly certified
(subject to year-end audit adjustments) by the chief financial officer
of the Borrower as having been prepared in accordance with GAAP,
together with (i) a certificate of said officer stating that no Default
has occurred and is continuing or, if a Default has occurred and is
continuing, a statement as to the nature thereof and the action that
the Borrower has taken and proposes to take with respect thereto and
(ii) a schedule in form satisfactory to the Agent of the computations
used by the Borrower in determining compliance with the covenants
contained in Sections 6.02(a), (b), (e), (f), and (g) and Section 6.04.
(c) ANNUAL FINANCIALS. As soon as available and, in
any event, within 90 days after the end of each fiscal year of the
Borrower, a copy of the annual audit report for such year for the
Borrower and its Subsidiaries, including therein Consolidated and
consolidating balance sheets of the Borrower and its Subsidiaries as of
the end of such fiscal year and Consolidated and consolidating
statements of income and cash flows of the Borrower and its
Subsidiaries for such fiscal year, in each case accompanied by an
opinion acceptable to the Required Lenders of KPMG Peat Marwick LLP or
other independent public accountants of recognized national standing
acceptable to the Required Lenders, together with (i) a certificate of
such accounting firm to the Lenders stating that in the course of the
regular audit of the business of the Borrower and its Subsidiaries,
which audit was conducted by such accounting firm in accordance with
generally accepted auditing standards, such accounting firm has
obtained no knowledge that a Default has occurred and is continuing, or
if, in the opinion of such accounting firm, a Default has occurred and
is continuing, a statement as to the nature thereof, (ii) a certificate
of the chief financial officer of the Borrower stating that no Default
has occurred and is continuing or, if a default has occurred and is
continuing, a statement as to the nature thereof and the action that
the Borrower has taken and proposes to take with respect thereto, and
(iii) a schedule in form satisfactory to the Agent of the computations
used by the Borrower in determining compliance with the covenants
contained in Sections 6.02(a), (b), (e), (f), and (g) and Section 6.04.
(d) ANNUAL FORECASTS. No later than 45 days after the
beginning of each fiscal year of the Borrower, forecasts prepared by
management of the Borrower, in form reasonably satisfactory to the
Agent, of balance sheets, income statements and cash flow statements
for such fiscal year and on an annual basis for each fiscal year
thereafter until the Termination Date.
(e) ERISA EVENTS. Promptly and in any event within 10
days after any Loan Party or any of its ERISA Affiliates knows or has
reason to know that any ERISA Event with respect to any Loan Party or
any of its ERISA Affiliates has occurred, a statement of the chief
financial officer of the Borrower describing such ERISA Event and the
action, if any, that such Loan Party or such ERISA Affiliate has taken
and proposes to take with respect thereto.
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(f) PLAN TERMINATIONS. Promptly and in any event
within two Business Days after receipt thereof by any Loan Party or any
of its ERISA Affiliates, copies of each notice from the PBGC stating
its intention to terminate any Plan of any Loan Party or any of its
ERISA Affiliates or to have a trustee appointed to administer any such
Plan.
(g) PLAN ANNUAL REPORTS. Promptly and in any event
within 30 days after the filing thereof with the Internal Revenue
Service, copies of each Schedule B (Actuarial Information) to the
annual report (Form 5500 Series) with respect to each Plan of each Loan
Party or any of its ERISA Affiliates.
(h) MULTIEMPLOYER PLAN NOTICES. Promptly and in any
event within five Business Days after receipt thereof by any Loan Party
or any of its ERISA Affiliates from the sponsor of a Multiemployer Plan
of any Loan Party or any of its ERISA Affiliates, copies of each notice
concerning (i) the imposition of Withdrawal Liability by any such
Multiemployer Plan, (ii) the reorganization or termination, within the
meaning of Title IV of ERISA, of any such Multiemployer Plan or (iii)
the amount of liability incurred, or that may be incurred, by such Loan
Party or any of its ERISA Affiliates in connection with any event
described in clause (i) or (ii).
(i) LITIGATION. Promptly after the commencement
thereof, notice of all actions, suits, investigations, litigation and
proceedings before any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign,
affecting any Loan Party or any of its Subsidiaries of the type
described in Section 5.01(h), and promptly after the occurrence
thereof, notice of any material adverse change in the status or the
financial effect on any Loan Party or any of their Subsidiaries of any
such action, suit, investigation, litigation or proceeding.
(j) PRESS RELEASES; SECURITIES REPORTS. Promptly
after the sending or filing thereof, copies of all material press
releases and of all proxy statements, financial statements and reports
that any Loan Party or any of its Subsidiaries sends to its
stockholders, and copies of all regular, periodic and special reports,
and all registration statements, that any Loan Party or any of its
Subsidiaries files with the Securities and Exchange Commission or any
governmental authority that may be substituted therefor, or with any
national securities exchange.
(k) CREDITOR REPORTS. Promptly after the furnishing
thereof, copies of any statement or report furnished to any other
holder of the securities of any Loan Party or of any of its
Subsidiaries pursuant to the terms of any indenture, loan or credit or
similar agreement and not otherwise required to be furnished to the
Lenders pursuant to any other clause of this Section 6.03.
(l) ENVIRONMENTAL CONDITIONS. Promptly after the
occurrence thereof, notice of any condition or occurrence on any
property of any Loan Party or any of its Subsidiaries that results in a
material noncompliance by any Loan Party or any of its Subsidiaries
with any Environmental Law or Environmental Permit or could (i) form
the basis of an Environmental Action against any Loan Party or any of
its Subsidiaries or such property that could have a Material Adverse
Effect or (ii) cause any such property to be subject to any
restrictions on ownership, occupancy, use or transferability under any
Environmental Law.
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(m) OTHER INFORMATION. Such other information
respecting the business, condition (financial or otherwise),
operations, performance, properties or prospects of any Loan Party or
any of its Subsidiaries as any Lender may from time to time reasonably
request.
SECTION 6.04. FINANCIAL COVENANTS. So long as any Advance
shall remain unpaid, any Letter of Credit shall be outstanding or any Lender
shall have any Commitment hereunder, the Borrower will, unless the Required
Lenders otherwise consent in writing:
(a) CONSOLIDATED TANGIBLE NET WORTH. Maintain at all
times a Consolidated Tangible Net Worth of not less than the sum of (i)
$90,000,000, plus (ii) 50% of cumulative Consolidated Net Income for
all fiscal quarters of the Borrower ended since the date hereof in
which Consolidated Net Income is positive (and without any deduction
for any fiscal quarter in which Consolidated Net Income is negative),
plus (iii) 100% of the Net Cash Proceeds of any equity offering by the
Borrower.
(b) LEVERAGE RATIO. Maintain at all times a Leverage
Ratio of not more than 4.75 to 1.0.
(c) FIXED CHARGE COVERAGE RATIO. Maintain for each
period of four consecutive fiscal quarters a ratio of Consolidated
EBITDAR of the Borrower and its Subsidiaries for such period to the
sum, without duplication, of (i) interest payable on, and amortization
of debt discount in respect of, all Debt during such period (including
the interest portion of all Capitalized Leases) plus (ii) rentals
payable under leases of real or personal, or mixed, property during
such period plus (iii) cash taxes payable during such period plus (iv)
principal amounts of all Funded Debt payable during such period by the
Borrower and its Subsidiaries of not less than (A) 1.10 to 1.0 for each
such period ending prior to January 26, 1998, and (B) 1.30 to 1.0 for
each such period ending on or after January 26, 1998.
(d) CONSOLIDATED FUNDED DEBT TO CONSOLIDATED TOTAL
CAPITALIZATION RATIO. Maintain a ratio of Consolidated Funded Debt to
Consolidated Total Capitalization of not more than (i) 0.60 to 1.0 at
all times prior to January 26, 1998, and (ii) 0.50 to 1.0 at all times
on or after January 26, 1998.
(e) CAPITAL EXPENDITURES. Not make, or permit any of
its Subsidiaries to make, any Capital Expenditures that would cause the
aggregate of all such Capital Expenditures made by the Borrower and its
Subsidiaries in any fiscal year to exceed $70,000,000; provided,
however, that the Borrower and its Subsidiaries may make Capital
Expenditures in any fiscal year in an aggregate additional amount equal
to the excess, if any, of (i) $70,000,000 over (ii) the actual
aggregate Capital Expenditures of the Borrower and its Subsidiaries on
a Consolidated basis for the immediately preceding fiscal year.
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.01. EVENTS OF DEFAULT. If any of the following
events ("EVENTS OF DEFAULT") shall occur and be continuing:
(a) the Borrower shall fail to pay any principal of,
or interest on, any Advance, or any Loan Party shall fail to make any
other payment under any Loan Document, in each case when the same
becomes due and payable; or
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(b) any representation or warranty made by any Loan
Party (or any of its officers) under or in connection with any Loan
Document shall prove to have been incorrect in any material respect
when made; or
(c) the Borrower shall fail to perform or observe any
term, covenant or agreement contained in Section 6.01(e) or (f), 6.02,
6.03 or 6.04; or
(d) any Loan Party shall fail to perform any other
term, covenant or agreement contained in any Loan Document on its part
to be performed or observed if such failure shall remain unremedied for
30 days after written notice thereof shall have been given to the
Borrower by the Agent or any Lender; or
(e) any Loan Party or any of its Subsidiaries shall
fail to pay any principal of, premium or interest on or any other
amount payable in respect of any Debt that is outstanding in a
principal or notional amount of at least $5,000,000 in the aggregate
(but excluding Debt outstanding hereunder) of such Loan Party or such
Subsidiary (as the case may be), when the same becomes due and payable
(whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise), and such failure shall continue after the
applicable grace period, if any, specified in the agreement or
instrument relating to such Debt (or after the effectiveness of any
applicable waiver); or any other event shall occur or condition shall
exist under any agreement or instrument relating to any such Debt and
shall continue after the applicable grace period, if any, specified in
such agreement or instrument (or after the effectiveness of any
applicable waiver), if the effect of such event or condition is to
accelerate, or to permit the acceleration of, the maturity of such Debt
or otherwise to cause, or to permit the holder thereof to cause, such
Debt to mature; or any such Debt shall be declared to be due and
payable or required to be prepaid or redeemed (other than by a
regularly scheduled required prepayment or redemption), purchased or
defeased, or an offer to prepay, redeem, purchase or defease such Debt
shall be required to be made, in each case prior to the stated maturity
thereof; or
(f) any Loan Party or any of its Subsidiaries shall
generally not pay its debts as such debts become due, or shall admit in
writing its inability to pay its debts generally, or shall make a
general assignment for the benefit of creditors; or any proceeding
shall be instituted by or against any Loan Party or any of its
Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts under
any law relating to bankruptcy, insolvency or reorganization or relief
of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, or other similar official for it or
for any substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted by it) that is
being diligently contested by it in good faith, either such proceeding
shall remain undismissed or unstayed for a period of 60 days or any of
the actions sought in such proceeding (including, without limitation,
the entry of an order for relief against, or the appointment of a
receiver, trustee, custodian or other similar official for, it or any
substantial part of its property) shall occur; or any Loan Party or any
of its Subsidiaries shall take any corporate action to authorize any of
the actions set forth above in this subsection (f); or
(g) any judgment or order for the payment of money in
excess of $5,000,000 shall be rendered against any Loan Party or any of
its Subsidiaries and either (i) enforcement proceedings shall have been
commenced by any creditor upon such judgment or order or (ii) there
shall be any period of 30 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
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(h) any non-monetary judgment or order shall be
rendered against any Loan Party or any of its Subsidiaries that could
have a Material Adverse Effect, and there shall be any period of 10
consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in
effect; or
(i) any material provision of any Loan Document after
delivery thereof pursuant to Section 4.01 shall for any reason cease to
be valid and binding on or enforceable against any Loan Party party to
it, or any such Loan Party shall so state in writing; or
(j) (i) any Person or two or more Persons acting in
concert other than the Controlling Stockholders shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act of
1934), directly or indirectly, of Voting Stock of the Borrower (or
other securities convertible into such Voting Stock) representing 20%
or more of the combined voting power of all Voting Stock of the
Borrower; or (ii) during any period of up to 24 consecutive months,
commencing after the date of this Agreement, individuals who at the
beginning of such 24-month period were directors of the Borrower shall
cease for any reason to constitute a majority of the board of directors
of the Borrower; or (iii) any Person or two or more Persons acting in
concert other than the Controlling Stockholders shall have acquired by
contract or otherwise, or shall have entered into a contract or
arrangement that, upon consummation, will result in its or their
acquisition of, the power to exercise control over Voting Stock of the
Borrower (or other securities convertible into such securities)
representing 20% or more of the combined voting power of all Voting
Stock of the Borrower; or
(k) the Borrower shall cease for any reason to own
100% of the capital stock of Carl Karcher Enterprises, Inc.; or
(l) any ERISA Event shall have occurred with respect
to a Plan of any Loan Party or any of its ERISA Affiliates and the sum
(determined as of the date of occurrence of such ERISA Event) of the
Insufficiency of such Plan and the Insufficiency of any and all other
Plans of the Loan Parties and their ERISA Affiliates with respect to
which an ERISA Event shall have occurred and then exist (or the
liability of the Loan Parties and their ERISA Affiliates related to
such ERISA Event) exceeds $5,000,000; or
(m) any Loan Party or any of its ERISA Affiliates
shall have been notified by the sponsor of a Multiemployer Plan of any
Loan Party or any of its ERISA Affiliates that it has incurred
Withdrawal Liability to such Multiemployer Plan in an amount that, when
aggregated with all other amounts required to be paid to Multiemployer
Plans by the Loan Parties and their ERISA Affiliates as Withdrawal
Liability (determined as of the date of such notification), exceeds
$5,000,000 or requires payments exceeding $1,000,000 per annum; or
(n) any Loan Party or any of its ERISA Affiliates
shall have been notified by the sponsor of a Multiemployer Plan of any
Loan Party or any of its ERISA Affiliates that such Multiemployer Plan
is in reorganization or is being terminated, within the meaning of
Title IV of ERISA, and as a result of such reorganization or
termination the aggregate annual contributions of the Loan Parties and
their ERISA Affiliates to all Multiemployer Plans that are then in
reorganization or being terminated have been or will be increased over
the amounts contributed to such Multiemployer Plans for the plan years
of such Multiemployer Plans immediately preceding the plan year in
which such reorganization or termination occurs by an amount exceeding
$5,000,000;
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then, and in any such event, the Agent (i) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower, declare the
obligation of each Lender to make Advances and of the L/C Bank to issue Letters
of Credit to be terminated, whereupon the same shall forthwith terminate, and
(ii) shall at the request, or may with the consent, of the Required Lenders, by
notice to the Borrower, declare the Notes and the Advances, all interest thereon
and all other amounts payable under this Agreement and the other Loan Documents
to be forthwith due and payable, whereupon the Notes and Advances, all such
interest and all such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Borrower; provided, however, that in the
event of an actual or deemed entry of an order for relief with respect to any
Loan Party under the Federal Bankruptcy Code, (x) the obligation of each Lender
to make Advances and of the L/C Bank to Issue Letters of Credit shall
automatically be terminated and (y) the Notes and Advances, all such interest
and all such amounts shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Borrower.
SECTION 7.02. ACTIONS IN RESPECT OF THE LETTERS OF CREDIT UPON
DEFAULT. If any Event of Default shall have occurred and be continuing, the
Agent may, irrespective of whether it is taking any of the actions described in
Section 7.01 or otherwise, make demand upon the Borrower to, and forthwith upon
such demand the Borrower will, pay to the Agent on behalf of the Lenders in same
day funds at the Agent's office designated in such demand, for deposit to a
non-interest bearing account established by the Agent for such purposes (the
"L/C CASH COLLATERAL ACCOUNT"), an amount equal to the aggregate Available
Amount of all Letters of Credit then outstanding (and the Borrower hereby grants
to the Agent, for the ratable benefit of the Agent and each Lender Party, a
continuing security interest in all amounts at any time on deposit in the L/C
Cash Collateral Account to secure all Letter of Credit Obligations from time to
time outstanding). If at any time the Agent determines that any funds held in
the L/C Cash Collateral Account are subject to any right or claim of any Person
other than the Agent and the Lenders or that the total amount of such funds is
less than the aggregate Available Amount of all Letters of Credit, the Borrower
will, forthwith upon demand by the Agent, pay to the Agent, as additional funds
to be deposited and held in the L/C Cash Collateral Account, an amount equal to
the excess of (a) such aggregate Available Amount over (b) the total amount of
funds, if any, then held in the L/C Cash Collateral Account that the Agent
determines to be free and clear of any such right and claim.
ARTICLE VIII
THE AGENT
SECTION 8.01. AUTHORIZATION AND ACTION. Each Lender hereby
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers and discretion under this Agreement and the other Loan
Documents as are delegated to the Agent by the terms hereof and thereof,
together with such powers and discretion as are reasonably incidental thereto.
As to any matters not expressly provided for by the Loan Documents (including,
without limitation, enforcement or collection of the Notes and the Debt
resulting from the Advances), the Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Required Lenders, and such instructions shall be
binding upon all Lenders and all holders of Notes; provided, however, that the
Agent shall not be required to take any action that exposes the Agent to
personal liability or that is contrary to this Agreement or applicable law. The
Agent agrees to give to each Lender prompt notice of each notice given to it by
the Borrower pursuant to the terms of this Agreement.
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SECTION 8.02. AGENT'S RELIANCE, ETC. Neither the Agent nor any
of its directors, officers, agents or employees shall be liable for any action
taken or omitted to be taken by it or them under or in connection with the Loan
Documents, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, the Agent: (i) may treat
the payee of any Note as the holder thereof until the Agent receives and accepts
an Assignment and Acceptance entered into by the Lender that is the payee of
such Note, as assignor, and an Eligible Assignee, as assignee, as provided in
Section 9.07; (ii) may consult with legal counsel (including counsel for any
Loan Party), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; (iii)
makes no warranty or representation to any Lender and shall not be responsible
to any Lender for any statements, warranties or representations made in or in
connection with the Loan Documents; (iv) shall not have any duty to ascertain or
to inquire as to the performance or observance of any of the terms, covenants or
conditions of any Loan Document on the part of any Loan Party or to inspect the
property (including the books and records) of any Loan Party; (v) shall not be
responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of any Loan Document or any
other instrument or document furnished pursuant hereto; and (vi) shall incur no
liability under or in respect of any Loan Document by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telegram,
telecopy, cable or telex) believed by it to be genuine and signed or sent by the
proper party or parties.
SECTION 8.03. NATIONSBANK AND AFFILIATES. With respect to its
Commitments, the Advances made by it and the Notes issued to it, NationsBank
shall have the same rights and powers under the Loan Documents as any other
Lender and may exercise the same as though it were not the Agent; and the term
"Lender" or "Lenders" shall, unless otherwise expressly indicated, include
NationsBank in its individual capacity. NationsBank and its affiliates may
accept deposits from, lend money to, act as trustee under indentures of, accept
investment banking engagements from and generally engage in any kind of business
with, any Loan Party, any of their Subsidiaries and any Person who may do
business with or own securities of any Loan Party or any such Subsidiary, all as
if NationsBank were not the Agent and without any duty to account therefor to
the Lenders.
SECTION 8.04. LENDER CREDIT DECISION. Each Lender acknowledges
that it has, independently and without reliance upon the Agent or any other
Lender and based on the financial statements referred to in Section 5.01 and
such other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the 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 credit decisions in taking or
not taking action under this Agreement.
SECTION 8.05. INDEMNIFICATION. Each Lender severally agrees to
indemnify the Agent (to the extent not promptly reimbursed by the Borrower) from
and against such Lender's ratable share of any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever that may be imposed on, incurred
by, or asserted against the Agent in any way relating to or arising out of the
Loan Documents or any action taken or omitted by the Agent under the Loan
Documents; provided, however, that no Lender shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the Agent's gross
negligence or willful misconduct. Without limitation of the foregoing, each
Lender agrees to reimburse the Agent promptly upon demand for its ratable share
of any costs and expenses payable by the Borrower under Section 9.04, to the
extent that the Agent is not promptly reimbursed for such costs and expenses by
the Borrower. For purposes of this Section 8.05, the Lenders' respective ratable
shares of any amount shall be determined, at any time, according to the sum of
(a) the aggregate principal amount of the Advances (other than L/C Advances)
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outstanding at such time and owing to the respective Lenders, plus (b) their
respective Pro Rata Shares of the aggregate Letter of Credit Obligations
outstanding at such time, plus (c) the aggregate unused portions of their
respective Term Commitments at such time plus (d) their respective Unused
Revolving A Commitments and Unused Revolving B Commitments at such time. The
failure of any Lender to reimburse the Agent promptly upon demand for its
ratable share of any amount required to be paid by the Lenders to the Agent as
provided herein shall not relieve any other Lender of its obligation hereunder
to reimburse the Agent for its ratable share of such amount, but no Lender shall
be responsible for the failure of any other Lender to reimburse the Agent for
such other Lender's ratable share of such amount.
SECTION 8.06. SUCCESSOR AGENTS. The Agent may resign at any
time by giving written notice thereof to the Lenders and the Borrower and may be
removed at any time with or without cause by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor Agent (which successor Agent shall, so long as no Event of Default has
occurred and is continuing, be approved by the Borrower, such approval not to be
unreasonably withheld). If no successor Agent shall have been so appointed by
the Required Lenders, and shall have accepted such appointment, within 30 days
after the retiring Agent's giving of notice of resignation or the Required
Lenders' removal of the retiring Agent, then the retiring Agent may, on behalf
of the Lenders, appoint a successor Agent (which successor Agent shall, so long
as no Event of Default has occurred and is continuing, be approved by the
Borrower, such approval not to be unreasonably withheld), which shall be a
commercial bank organized under the laws of the United States or of any State
thereof and having a combined capital and surplus of at least $250,000,000. Upon
the acceptance of any appointment as Agent hereunder by a successor Agent and
upon the execution and filing or recording of such agreements, instruments or
notices, as may be necessary or desirable, or as the Required Lenders may
reasonably request, in order to evidence the succession of the successor Agent,
such successor Agent shall succeed to and become vested with all the rights,
powers, discretion, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations under the
Loan Documents. After any retiring Agent's resignation or removal hereunder as
Agent, the provisions of this Article VIII shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. AMENDMENTS, ETC. No amendment or waiver of any
provision of this Agreement or the Notes, nor consent to any departure by the
Borrower therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Required Lenders (and, in the case of any such
amendment, the Borrower), and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given;
provided, however, that no amendment, waiver or consent shall, unless in writing
and signed by all the Lenders, do any of the following at any time: (i) waive
any of the conditions specified in Section 4.01 or, in the case of the initial
Borrowing, 4.02, (ii) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Advances, or the number of Lenders,
that shall be required for the Lenders or any of them to take any action
hereunder or change the definition of Required Lenders, (iii) amend this Section
9.01, (iv) increase the Term Commitment, the Revolving A Commitment or the
Revolving B Commitment of any Lender or subject any Lender to any additional
obligations, (v) reduce the principal of, or interest on, the Advances or any
fees or other amounts payable hereunder or (vi) postpone any date fixed for any
payment of principal of, or interest on, the Advances or any fees or other
amounts payable hereunder (it being understood that the Required Lenders may
amend or waive the provisions of Sections 2.05(b)(ii) and (iii)); provided
further that no amendment, waiver or consent shall, unless in writing and signed
by each Issuing Bank, in addition to the Lenders required above to take such
action, affect the rights or obligations of any Issuing Bank under this
Agreement; and provided further that no amendment, waiver
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or consent shall, unless in writing and signed by the Agent in addition to the
Lenders required above to take such action, affect the rights or duties of the
Agent under this Agreement or any other Loan Document.
SECTION 9.02. NOTICES, ETC. All notices and other
communications provided for hereunder shall be in writing (including
telegraphic, telecopy, telex or cable communication) and mailed, telegraphed,
telecopied, telexed, cabled or delivered, if to the Borrower, at its address at
1200 North Harbor Boulevard, Anaheim, California 92801, Telecopier No. (714)
490-3695, Attn: Robert E. Wheaton; if to any Initial Lender, at its Domestic
Lending Office specified opposite its name on Schedule I hereto; if to any other
Lender, at its Domestic Lending Office specified in the Assignment and
Acceptance pursuant to which it became a Lender; and if to the Agent, at its
address at 901 Main Street, Dallas, Texas 75202, Telecopier No.: (214) 508-2118,
Attn: Marie Lancaster, Agency Services, with a copy to NationsBank, 444 South
Flower Street, Suite 4100, Los Angeles, California 90071-2901, Telecopier No.
(213) 624-5815, Attn: Tom F. Scharfenberg; or, as to the Borrower or the Agent,
at such other address as shall be designated by such party in a written notice
to the other parties and, as to each other party, at such other address as shall
be designated by such party in a written notice to the Borrower and the Agent.
All such notices and communications shall, when mailed, telegraphed, telecopied,
telexed or cabled, be effective when deposited in the mails, delivered to the
telegraph company, transmitted by telecopier, confirmed by telex answerback or
delivered to the cable company, respectively, except that notices and
communications to the Agent pursuant to Article II, III or VII shall not be
effective until received by the Agent.
SECTION 9.03. NO WAIVER; REMEDIES. No failure on the part of
any Lender or the Agent to exercise, and no delay in exercising, any right
hereunder or under any other Loan Document shall operate as a waiver thereof;
nor shall any single or partial exercise of any such right preclude any other or
further exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
SECTION 9.04. COSTS AND EXPENSES. (a) The Borrower agrees to
pay on demand (i) all reasonable costs and expenses of the Agent in connection
with the preparation, execution, delivery, administration, modification and
amendment of the Loan Documents (including, without limitation, (A) all due
diligence, transportation, computer, duplication, appraisal, audit, insurance,
consultant, search, filing and recording fees and expenses and (B) the
reasonable fees and expenses of counsel for the Agent with respect thereto, with
respect to advising the Agent as to its rights and responsibilities, or the
protection or preservation of rights or interests, under the Loan Documents,
with respect to negotiations with any Loan Party or with other creditors of any
Loan Party or any of its Subsidiaries arising out of any Default or any events
or circumstances that may give rise to a Default and with respect to presenting
claims in or otherwise participating in or monitoring any bankruptcy, insolvency
or other similar proceeding involving creditors' rights and any proceeding
ancillary thereto) and (ii) all costs and expenses of the Agent, the Lenders and
the Issuing Banks in connection with the enforcement of the Loan Documents,
whether in any action, suit or litigation, any bankruptcy, insolvency or other
similar proceeding affecting creditors' rights or otherwise (including, without
limitation, the reasonable fees and expenses of counsel for the Agent and each
Lender with respect thereto).
(b) The Borrower agrees to indemnify and hold harmless the
Agent, each Lender, each Issuing Bank and each of their Affiliates and their
officers, directors, employees, agents and advisors (each, an "INDEMNIFIED
PARTY") from and against any and all claims, damages, losses, liabilities and
expenses (including, without limitation, reasonable fees and expenses of
counsel) that may be incurred by or asserted or awarded against any Indemnified
Party, in each case arising out of or in connection with or by reason of, or in
connection with the preparation for a defense of, any investigation, litigation
or proceeding arising out of, related to or in connection with (i) this
Agreement, any Loan Document, the
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actual or proposed use of the proceeds of any Advances or Letters of Credit
hereunder or any transactions contemplated hereby, (ii) any Acquisition or
proposed Acquisition (including, without limitation, any Permitted Acquisition
and any of the other transactions contemplated hereby) by or involving the
Borrower or any of its Subsidiaries, or (iii) the actual or alleged presence of
Hazardous Materials on any property of any Loan Party or any of its Subsidiaries
or any Environmental Action relating in any way to any Loan Party or any of its
Subsidiaries, in each case whether or not such investigation, litigation or
proceeding is brought by any Loan Party, its directors, shareholders or
creditors or an Indemnified Party or any Indemnified Party is otherwise a party
thereto and whether or not the transactions contemplated hereby are consummated,
except to the extent such claim, damage, loss, liability or expense is found in
a final, non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party's gross negligence or willful misconduct.
The Borrower also agrees not to assert any claim against the Agent, any Lender,
any of their affiliates, or any of their respective directors, officers,
employees, attorneys and agents, on any theory of liability, for special,
indirect, consequential or punitive damages arising out of or otherwise relating
to any of the transactions contemplated herein or in any other Loan Document or
the actual or proposed use of the proceeds of the Advances.
(c) If any payment of principal of, or Conversion of, any
Eurodollar Rate Advance is made by the Borrower to or for the account of a
Lender other than on the last day of the Interest Period for such Advance, as a
result of a payment or conversion pursuant to Section 2.08(b)(i) or 2.09(d),
acceleration of the maturity of the Notes and Advances pursuant to Section 7.01
or for any other reason, the Borrower shall, upon demand by such Lender (with a
copy of such demand to the Agent), pay to the Agent for the account of such
Lender any amounts required to compensate such Lender for any additional losses,
costs or expenses that it may reasonably incur as a result of such payment,
including, without limitation, any loss, cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by any
Lender to fund or maintain such Advance.
(d) If any Loan Party fails to pay when due any costs,
expenses or other amounts payable by it under any Loan Document, including,
without limitation, fees and expenses of counsel and indemnities, such amount
may be paid on behalf of such Loan Party by the Agent or any Lender, in its sole
discretion.
SECTION 9.05. RIGHT OF SET-OFF. Upon (a) the occurrence and
during the continuance of any Event of Default and (b) the making of the request
or the granting of the consent specified by Section 7.01 to authorize the Agent
to declare the Notes and Advances due and payable pursuant to the provisions of
Section 7.01, each Lender and each of is Affiliates is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and otherwise apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by such Lender or such Affiliate to or for the credit or the account of the
Borrower against any and all of the Obligations of the Borrower now or hereafter
existing under this Agreement and the Note or Notes held by such Lender,
irrespective of whether such Lender shall have made any demand under this
Agreement or such Note or Notes and although such obligations may be unmatured.
Each Lender agrees promptly to notify the Borrower after any such set-off and
application; provided, however, that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of each Lender
and its Affiliates under this Section are in addition to other rights and
remedies (including, without limitation, other rights of set-off) that such
Lender and its Affiliates may have.
SECTION 9.06. BINDING EFFECT. This Agreement shall become
effective when it shall have been executed by the Borrower, the Agent and each
Initial Lender and thereafter shall be binding upon and inure to the benefit of
the Borrower, the Agent and each Lender and their respective successors and
assigns, except that the Borrower shall not have the right to assign its rights
hereunder or any interest herein without the prior written consent of the
Lenders.
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SECTION 9.07. ASSIGNMENTS AND PARTICIPATIONS. (a) Each Lender
may and, if demanded by the Borrower (which demand may only be made within 30
days after a demand by such Lender pursuant to Section 2.08 or 2.10) upon at
least 10 Business Days' notice to such Lender and the Agent, will assign to one
or more banks or other entities all or a portion of its rights and obligations
under this Agreement (including, without limitation, all or a portion of its
Commitment or Commitments, the Advances owing to it and the Note or Notes held
by it); provided, however, that (i) each such assignment shall be of a uniform,
and not a varying, percentage of all rights and obligations under and in respect
of all of the Facilities, (ii) except in the case of an assignment to a Person
that, immediately prior to such assignment, was a Lender or an assignment of all
of a Lender's rights and obligations under this Agreement, the aggregate amount
of the Commitments and Advances of the assigning Lender being assigned pursuant
to each such assignment (determined as of the date of the Assignment and
Acceptance with respect to such assignment) shall in no event be less than
$5,000,000, (iii) each such assignment shall be to an Eligible Assignee, (iv)
each such assignment made as a result of a demand by the Borrower pursuant to
this Section 9.07(a) shall be arranged by the Borrower after consultation with
the Agent and shall be either an assignment of all of the rights and obligations
of the assigning Lender under this Agreement or an assignment of a portion of
such rights and obligations made concurrently with another such assignment or
other such assignments that together cover all of the rights and obligations of
the assigning Lender under this Agreement, (v) no Lender shall be obligated to
make any such assignment as a result of a demand by the Borrower pursuant to
this Section 9.07(a) unless and until such Lender shall have received one or
more payments from either the Borrower or one or more Eligible Assignees in an
aggregate amount at least equal to the aggregate outstanding principal amount of
the Advances owing to such Lender, together with accrued interest thereon to the
date of payment of such principal amount and all other amounts payable to such
Lender under this Agreement, and (vi) the parties to each such assignment shall
execute and deliver to the Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with any Note or Notes subject
to such assignment and a processing and recordation fee of $3,500. Upon such
execution, delivery, acceptance and recording, from and after the effective date
specified in such Assignment and Acceptance, (x) the assignee thereunder shall
be a party hereto and, to the extent that rights and obligations hereunder have
been assigned to it pursuant to such Assignment and Acceptance, have the rights
and obligations of a Lender hereunder and (y) the Lender assignor thereunder
shall, to the extent that rights and obligations hereunder have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto).
(b) 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 as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, this Agreement or any other Loan Document or any
other instrument or document furnished pursuant hereto or thereto; (ii) such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or any
other Loan Party or the performance or observance by any Loan Party of any of
its obligations under any Loan Document or any other instrument or document
furnished pursuant thereto; (iii) such assignee confirms that it has received a
copy of this Agreement, together with copies of the financial statements
referred to in Section 5.01 and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (iv) such assignee will, independently and
without reliance upon the Agent, such assigning Lender or any other Lender and
based on such documents and
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information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement; (v) such
assignee confirms that it is an Eligible Assignee; (vi) such assignee appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers and discretion under the Loan Documents as are delegated to
the Agent by the terms hereof, together with such powers and discretion as are
reasonably incidental thereto; and (vii) such assignee agrees that it will
perform in accordance with their terms all of the obligations which by the terms
of this Agreement are required to be performed by it as a Lender or Issuing
Bank, as the case may be.
(c) The Agent shall maintain at its address referred to in
Section 9.02 a copy of each Assignment and Acceptance delivered to and accepted
by it and a register for the recordation of the names and addresses of the
Lenders and the Commitment under each Facility of, and principal amount of the
Advances owing under each Facility to, each Lender from time to time (the
"REGISTER"). The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrower, the Agent and the Lenders may
treat each Person whose name is recorded in the Register as a Lender hereunder
for all purposes of this Agreement. The Register shall be available for
inspection by the Borrower or any Lender at any reasonable time and from time to
time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an assignee, together with any Note or Notes subject
to such assignment, the Agent shall, if such Assignment and Acceptance has been
completed and is in substantially the form of Exhibit A hereto, (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the Borrower. Within five
Business Days after its receipt of such notice, the Borrower, at its own
expense, shall execute and deliver to the Agent in exchange for the surrendered
Note or Notes a new Note to the order of such Eligible Assignee in an amount
equal to the Commitment and Advances assumed by it under each Facility pursuant
to such Assignment and Acceptance and, if the assigning Lender has retained a
Commitment and Advances hereunder, a new Note to the order of the assigning
Lender in an amount equal to the Commitment and Advances retained by it under
each Facility. Such new Note or Notes shall be in an aggregate principal amount
equal to the aggregate principal amount of such surrendered Note or Notes, shall
be dated the effective date of such Assignment and Acceptance and shall
otherwise be in substantially the form of Exhibit A hereto.
(e) Each Lender may sell participations in or to all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitments, the Advances owing to it and
the Note or Notes held by it); provided, however, that (i) such Lender's
obligations under this Agreement (including, without limitation, its
Commitments) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender shall remain the holder of any such Note for all purposes of
this Agreement, (iv) the Borrower, the Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and (v) no participant
under any such participation shall have any right to approve any amendment or
waiver of any provision of any Loan Document, or any consent to any departure by
any Loan Party therefrom, except to the extent that such amendment, waiver or
consent would reduce the principal of, or interest on, the Notes, the Advances
or any fees or other amounts payable hereunder, in each case to the extent
subject to such participation, or postpone any date fixed for any payment of
principal of, or interest on, the Notes, the Advances or any fees or other
amounts payable hereunder, in each case to the extent subject to such
participation.
(f) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
9.07, disclose to the assignee or participant or proposed assignee or
participant, any information relating to any Loan Party furnished to such Lender
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by or on behalf of the Borrower or any other Loan Party; provided, however,
that, prior to any such disclosure, the assignee or participant or proposed
assignee or participant shall agree to preserve the confidentiality of any
Confidential Information received by it from such Lender.
(g) Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time create a security interest in all or any
portion of its rights under this Agreement (including, without limitation, the
Advances owing to it and the Note or Notes held by it) in favor of any Federal
Reserve Bank in accordance with Regulation A of the Board of Governors of the
Federal Reserve System.
SECTION 9.08. GOVERNING LAW. This Agreement and the Notes
shall be governed by, and construed in accordance with, the laws of the State of
California.
SECTION 9.09. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 9.10. CONFIDENTIALITY. Neither the Agent nor any
Lender shall disclose any Confidential Information to any Person without the
consent of the Borrower, other than (a) to the Agent's or such Lender's
Affiliates and their officers, directors, employees, agents and advisors and to
actual or prospective Eligible Assignees and participants, and then only on a
confidential basis, (b) as required by any law, rule or regulation or judicial
process and (c) as requested or required by any state, federal or foreign
authority or examiner regulating banks or banking.
SECTION 9.11. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
AGENT, EACH LENDER AND EACH ISSUING BANK HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN
DOCUMENTS, THE ADVANCES , ANY LETTER OF CREDIT OR THE ACTIONS OF THE AGENT OR
ANY LENDER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT
THEREOF.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
CKE RESTAURANTS, INC.
By:
----------------------------------
Title:
NATIONSBANK OF TEXAS, N.A.,
as Agent
By:
----------------------------------
Title:
L/C BANK
NATIONSBANK OF TEXAS, N.A.
By:
----------------------------------
Title:
INITIAL LENDERS:
NATIONSBANK OF TEXAS, N.A.
By:
----------------------------------
Title:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By:
----------------------------------
Title:
MELLON BANK, N.A.
By:
----------------------------------
Title:
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SUMITOMO BANK OF CALIFORNIA, N.A.
By:
----------------------------------
Title:
U. S. NATIONAL BANK OF OREGON
By:
----------------------------------
Title:
WELLS FARGO BANK, N.A.
By:
----------------------------------
Title:
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SCHEDULE I
COMMITMENTS AND APPLICABLE LENDING OFFICES
Domestic Eurodollar
Name of Term Revolving A Revolving B Lending Lending
Lender Commitment Commitment Commitment Office Office
------- ---------- ----------- ----------- -------- ----------
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EXHIBIT A
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement, dated as of August
1, 1996 (as amended, supplemented or otherwise modified from time to time, the
"CREDIT AGREEMENT", the terms defined therein being used herein as therein
defined), among CKE Restaurants, Inc., a Delaware corporation (the "BORROWER"),
certain Lenders party thereto and NationsBank of Texas, N.A., as agent for said
Lenders (the "AGENT").
The "Assignor" and the "Assignee" referred to on Schedule 1
hereto agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and
the Assignee hereby purchases and assumes from the Assignor, an interest in and
to the Assignor's rights and obligations under the Credit Agreement as of the
date hereof equal to the percentage interest specified on Schedule 1 hereto of
all outstanding rights and obligations under the Credit Agreement. After giving
effect to such sale and assignment, the Assignee's Commitments and the amount of
the Advances owing to the Assignee will be as set forth on Schedule 1 hereto.
2. The Assignor (i) represents and warrants 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 any
statements, warranties or representations made in or in connection with the Loan
Documents or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of, or the perfection or priority of any lien or security
interest created or purported to be created under or in connection with, the
Loan Documents or any other instrument or document furnished pursuant thereto;
and (iii) makes no representation or warranty and assumes no responsibility with
respect to the financial condition of any Loan Party or the performance or
observance by any Loan Party of any of its obligations under any Loan Document
or any other instrument or document furnished pursuant thereto; and (iv)
attaches the Note or Notes held by the Assignor and requests that the Agent
exchange such Note or Notes for a new Note or Notes payable to the order of the
Assignee in an amount equal to the Commitments assumed by the Assignee pursuant
hereto or new Notes payable to the order of the Assignee in an amount equal to
the Commitments assumed by the Assignee pursuant hereto and the Assignor in an
amount equal to the Commitments retained by the Assignor under the Credit
Agreement, respectively, as specified on Schedule 1 hereto.
3. The Assignee (i) confirms that it has received a copy of
the Credit Agreement, together with copies of the financial statements referred
to in Section 5.01 thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Acceptance; (ii) 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 Credit Agreement; (iii) confirms that it is an Eligible Assignee; (iv)
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers and discretion under the Loan Documents as are delegated
to the Agent by the terms thereof, together with such powers and discretion as
are reasonably incidental thereto; (v) agrees that it will perform in accordance
with their
75
terms all of the obligations that by the terms of the Credit Agreement are
required to be performed by it as a Lender and, if applicable, as an Issuing
Bank; and (vi) attaches any U.S. Internal Revenue Service forms required under
Section 2.10 of the Credit Agreement.
4. Following the execution of this Assignment and Acceptance,
it will be delivered to the Agent for acceptance and recording by the Agent. The
effective date for this Assignment and Acceptance (the "EFFECTIVE DATE") shall
be the date of acceptance hereof by the Agent, unless otherwise specified on
Schedule 1 hereto.
5. Upon such acceptance and recording by the Agent, as of the
Effective Date, (i) the Assignee shall be a party to the Credit Agreement and,
to the extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender and, if applicable, an Issuing Bank 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 Credit
Agreement.
6. Upon such acceptance and recording by the Agent, from and
after the Effective Date, the Agent shall make all payments under the Credit
Agreement and the Notes in respect of the interest assigned hereby (including,
without limitation, all payments of principal, interest and commitment fees with
respect thereto) to the Assignee. The Assignor and Assignee shall make all
appropriate adjustments in payments under the Credit Agreement and the Notes for
periods prior to the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of California.
8. This Assignment and Acceptance may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of Schedule 1 to this Assignment and Acceptance by
telecopier shall be effective as delivery of a manually executed counterpart of
this Assignment and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused
Schedule 1 to this Assignment and Acceptance to be executed by their officers
thereunto duly authorized as of the date specified thereon.
A-2
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SCHEDULE 1
TO
ASSIGNMENT AND ACCEPTANCE
As to each Facility in respect of which an interest is being assigned:
Term Revolving A Revolving B
Facility Facility Facility
-------- ----------- -----------
Percentage interest assigned: __________% __________% __________%
Assignee's Commitment: $__________ $__________ $__________
Aggregate outstanding principal
amount of Advances assigned: $__________ $__________ $__________
Principal amount of Note
payable to Assignee: $__________ $__________ $__________
Assignor's retained Commitment: $__________ $__________ $__________
Aggregate outstanding principal amount
of Advances retained by Assignor: $__________ $__________ $__________
Principal amount of Note
payable to Assignor: $__________ $__________ $__________
Effective Date
(if other than date of
acceptance by Agent): ________ __, 199_
[NAME OF ASSIGNOR], as Assignor
By___________________________________________
Title:
Dated: _________ __, 199_
[NAME OF ASSIGNEE], as Assignee
By___________________________________________
Title:
Dated: _________ __, 199_
Domestic Lending Office:
Eurodollar Lending Office:
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Accepted and Approved this ____
day of ___________, 199_
NATIONSBANK OF TEXAS, N.A.,
as Agent
By________________________________
Title:
*[Approved this ____ day
of _____________, 199_
CKE RESTAURANTS, INC.
By________________________________
Title:]
* Required unless an Event of Default has occurred and is continuing
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EXHIBIT B
FORM OF NOTICE OF BORROWING
[Date]
NationsBank of Texas, N.A., as Agent
for the Lenders party
to the Credit Agreement
referred to below
901 Main Street
Dallas, Texas 75202
Attn: Marie Lancaster, Agency Services
CKE RESTAURANTS, INC.
Ladies and Gentlemen:
The undersigned, CKE Restaurants, Inc., refers to the Credit
Agreement, dated as of August 1, 1996 (as amended, supplemented or otherwise
modified from time to time, the "CREDIT AGREEMENT", the terms defined therein
being used herein as therein defined), among the undersigned, certain Lenders
party thereto and NationsBank of Texas, N.A., as Agent for said Lenders, and
hereby gives you notice, irrevocably, pursuant to Section 2.02 of the Credit
Agreement that the undersigned hereby requests a Borrowing under the Credit
Agreement, and in that connection sets forth below the information relating to
such Borrowing (the "PROPOSED BORROWING"):
(i) The Business Day of the Proposed Borrowing is
_________ ___, 199_.
(ii) The Facility under which the Proposed Borrowing
is requested is the [Term [for initial Borrowing only]/Revolving
A/Revolving B] Facility.
(iii) The Interest Type of Advances comprising the
Proposed Borrowing is [Base Rate Advances] [Eurodollar Rate Advances].
(iv) The aggregate amount of the Proposed Borrowing
is $___________.
[(v) The initial Interest Period for each Eurodollar
Rate Advance made as part of the Proposed Borrowing is month[s].]
The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the date of the Proposed
Borrowing:
(A) the representations and warranties contained in
each Loan Document are correct, before and after giving effect to the
Proposed Borrowing and to the application of the proceeds therefrom, as
though made on and as of such date other than any such representations
or warranties that, by their terms, are specifically made as of a date
other than the date of the Proposed Borrowing; and
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(B) no event has occurred and is continuing, or would
result from such Proposed Borrowing or from the application of the
proceeds therefrom, that constitutes a Default.
CKE RESTAURANTS, INC.
By:_____________________________________
Title:
B-2
80
EXHIBIT C
FORM OF NOTICE OF ISSUANCE
[Date]
NationsBank of Texas, N.A., as Agent
for the Lenders party
to the Credit Agreement
referred to below
901 Main Street
Dallas, Texas 75202
Attn: Marie Lancaster, Agency Services
CKE RESTAURANTS, INC.
Ladies and Gentlemen:
The undersigned, CKE Restaurants, Inc., refers to the Credit
Agreement, dated as of August 1, 1996 (as amended, supplemented or otherwise
modified from time to time, the "CREDIT AGREEMENT", the terms defined therein
being used herein as therein defined), among the undersigned, certain Lenders
party thereto and NationsBank of Texas, N.A., as Agent for said Lenders, and
hereby gives you notice, pursuant to Section 3.02 of the Credit Agreement that
the undersigned hereby requests the issuance of a Letter of Credit under the
Credit Agreement, and in that connection sets forth below the information
relating to such issuance (the "PROPOSED ISSUANCE"):
(i) The requested Letter of Credit is a [Standby]
[Trade] Letter of Credit.
(ii) The requested Business Day of the Proposed
Issuance is , 199__.
(iii) The requested Available Amount of such Letter
of Credit is $__________.
(iv) The requested expiration date of such Letter of
Credit is , 199__.
(v) The name and address of the beneficiary of such
requested Letter of Credit is as follows:
_______________________________________
_______________________________________
_______________________________________
(vi) The requested form of such Letter of Credit and
a copy of the Letter of Credit Agreement are attached hereto.
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The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the date of the Proposed
Issuance:
(A) the representations and warranties contained in each Loan
Document are correct on and as of the date of the Proposed Issuance,
before and after giving effect to the Proposed Issuance requested
hereby, as though made on and as of such date, other than any such
representations and warranties that, by their terms, are specifically
made as of a date other than the date of the Proposed Issuance; and
(B) no event has occurred and is continuing, or would result
from the Proposed Issuance requested hereby, that constitutes a
Default.
[NAME OF BORROWER]
By:_____________________________________
Title:
C-2
82
EXHIBIT D-1
PROMISSORY NOTE
(REVOLVING A NOTE)
$____________ Dated: ______ __, 199__
FOR VALUE RECEIVED, the undersigned, CKE RESTAURANTS, INC. , a
Delaware corporation (the "BORROWER"), HEREBY PROMISES TO PAY to the order of
______________________________ (the "LENDER") for the account of its Applicable
Lending Office (as defined in the Credit Agreement referred to below) the
aggregate principal amount of the Revolving A Advances (as defined below) owing
to the Lender by the Borrower pursuant to the Credit Agreement (as defined
below) on the Revolving A Commitment Termination Date (as defined in such Credit
Agreement).
The Borrower promises to pay interest on the unpaid principal
amount of each Revolving A Advance from the date of such Revolving A Advance
until such principal amount is paid in full, at such interest rates, and payable
at such times, as are specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the
United States of America in same day funds to the Lender in accordance with the
provisions of Section 2.09(a) of the Credit Agreement. Each Revolving A Advance
owing to the Lender by the Borrower and the maturity thereof, and all payments
made on account of principal thereof, shall be recorded by the Lender and, prior
to any transfer hereof, endorsed on the grid attached hereto, which is part of
this Promissory Note; provided, however, that any failure to make such
endorsement on such grid shall in no way alter, impair or limit the Borrower's
obligations hereunder.
This Promissory Note is one of the Notes referred to in, and
is entitled to the benefits of, the Credit Agreement dated as of August 1, 1996
(as the same may be amended, supplemented or otherwise modified from time to
time, the "CREDIT AGREEMENT") among the Borrower, the Lender and certain other
lenders parties thereto, and NationsBank of Texas, N.A., as Agent for the Lender
and such other lenders. The Credit Agreement, among other things, (i) provides
for the making of certain revolving advances (the "REVOLVING A ADVANCES") by the
Lender to the Borrower from time to time in an aggregate amount not to exceed at
any time outstanding the U.S. dollar amount first above mentioned, the
indebtedness of the Borrower resulting from each such Revolving A Advance being
evidenced by this Promissory Note, and (ii) contains provisions for acceleration
of the maturity hereof upon the happening of certain stated events and also for
prepayments on account of principal hereof prior to the maturity hereof upon the
terms and conditions therein specified.
This Promissory Note shall be governed by, and construed in
accordance with, the laws of the State of California.
CKE RESTAURANTS, INC.
By:__________________________________
Title:
83
ADVANCES AND PAYMENTS OF PRINCIPAL
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Amount of Principal Unpaid Principal Notation
Date Amount of Advance Paid or Prepaid Balance Made By
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EXHIBIT D-2
PROMISSORY NOTE
(REVOLVING B NOTE)
$____________ Dated: ______ __, 199__
FOR VALUE RECEIVED, the undersigned, CKE RESTAURANTS, INC. , a
Delaware corporation (the "BORROWER"), HEREBY PROMISES TO PAY to the order of
_____________________________ (the "LENDER") for the account of its Applicable
Lending Office (as defined in the Credit Agreement referred to below) the
aggregate principal amount of the Revolving B Advances (as defined below) owing
to the Lender by the Borrower pursuant to the Credit Agreement (as defined
below) on the Revolving B Commitment Termination Date (as defined in such Credit
Agreement) in 3 consecutive equal annual installments until such principal
amount has been paid in full. Such installments (other than the last installment
owing hereunder, which shall be due and payable on the Termination Date (as
defined in such Credit Agreement)) shall be due and payable on the last Business
Day (as defined in such Credit Agreement) of each July, commencing July 31,
1999, and each such installment payable to the Lender shall be in an amount
equal to one-third (1/3) of the aggregate principal amount of Converted
Revolving B Advances (as defined in such Credit Agreement) outstanding
immediately after the occurrence of the Revolving B Advance Conversion Date (as
defined in the Credit Agreement) and owing to the Lender; provided, however,
that the last such installment shall be in the amount necessary to repay in full
the unpaid principal amount of this Promissory Note and shall, in any event, be
due and payable on the Termination Date.
The Borrower promises to pay interest on the unpaid principal
amount of each Revolving B Advance from the date of such Revolving B Advance
until such principal amount is paid in full, at such interest rates, and payable
at such times, as are specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the
United States of America in same day funds to the Lender in accordance with the
provisions of Section 2.09(a) of the Credit Agreement. Each Revolving B Advance
owing to the Lender by the Borrower and the maturity thereof, and all payments
made on account of principal thereof, shall be recorded by the Lender and, prior
to any transfer hereof, endorsed on the grid attached hereto, which is part of
this Promissory Note; provided, however, that any failure to make such
endorsement on such grid shall in no way alter, impair or limit the Borrower's
obligations hereunder.
This Promissory Note is one of the Notes referred to in, and
is entitled to the benefits of, the Credit Agreement dated as of August 1, 1996
(as the same may be amended, supplemented or otherwise modified from time to
time, the "CREDIT AGREEMENT") among the Borrower, the Lender and certain other
lenders parties thereto, and NationsBank of Texas, N.A., as Agent for the Lender
and such other lenders. The Credit Agreement, among other things, (i) provides
for the making of certain revolving advances (the "REVOLVING B ADVANCES") by the
Lender to the Borrower from time to time in an aggregate amount not to exceed at
any time outstanding the U.S. dollar amount first above mentioned, the
indebtedness of the Borrower resulting from each such Revolving B Advance being
evidenced by this Promissory Note, and (ii) contains provisions for acceleration
of the maturity hereof upon the happening
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of certain stated events and also for prepayments on account of principal hereof
prior to the maturity hereof upon the terms and conditions therein specified.
This Promissory Note shall be governed by, and construed in
accordance with, the laws of the State of California.
CKE RESTAURANTS, INC.
By:__________________________________
Title:
D-2-2
86
ADVANCES AND PAYMENTS OF PRINCIPAL
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Amount of Principal Unpaid Principal Notation
Date Amount of Advance Paid or Prepaid Balance Made By
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EXHIBIT D-3
PROMISSORY NOTE
(TERM NOTE)
$____________ Dated: _________ ___, 199__
FOR VALUE RECEIVED, the undersigned, CKE RESTAURANTS, INC. , a
Delaware corporation (the "BORROWER"), HEREBY PROMISES TO PAY to the order of
_____________________________________ (the "LENDER") for the account of its
Applicable Lending Office (as defined in the Credit Agreement referred to below)
the principal sum of [_______________________] [($____________)] in 5
consecutive annual installments until such principal amount has been paid in
full. Such installments (other than the last installment owing hereunder which
shall be due and payable on the Termination Date (as defined in such Credit
Agreement)) shall be due and payable on the last Business Day (as defined in
such Credit Agreement) of each July, commencing July 31, 1997, the amount
payable on each such installment being equal to the amount set forth below
opposite the period in which such installment is stated to be due below, as such
installment has been reduced by any prepayment received pursuant to Section 2.05
of the Credit Agreement (as defined below) and applied to such installment:
PERIOD ANNUAL INSTALLMENT
Closing Date through July 31, 1997 $___________
August 1, 1997 through July 31, 2000 $___________
August 1, 2000 through July 31, 2001 $___________
provided, however, that the last such installment shall be in the amount
necessary to repay in full the unpaid principal amount of this Promissory Note
and shall, in any event, be due and payable on the Termination Date.
The Borrower promises to pay interest on the unpaid principal
amount of each Term Advance (as defined below) from the date of such Term
Advance until such principal amount is paid in full, at such interest rates, and
payable at such times, as are specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the
United States of America in same day funds to the Lender in accordance with the
provisions of Section 2.09(a) of the Credit Agreement. Each Term Advance owing
to the Lender by the Borrower and the maturity thereof, and all payments made on
account of principal thereof, shall be recorded by the Lender and, prior to any
transfer hereof, endorsed on the grid attached hereto, which is part of this
Promissory Note; provided, however, that any failure to make such endorsement on
such grid shall in no way alter, impair or limit the Borrower's obligations
hereunder.
This Promissory Note is one of the Notes referred to in, and
is entitled to the benefits of, the Credit Agreement dated as of August 1, 1996
(as the same may be amended, supplemented or otherwise modified from time to
time, the "CREDIT AGREEMENT") among the Borrower, the Lender and certain other
lenders parties thereto, and NationsBank of Texas, N.A., as Agent for the Lender
and such
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other lenders. The Credit Agreement, among other things, (i) provides for the
making of a single term advance (the "TERM ADVANCE") by the Lender to the
Borrower in an amount not to exceed the U.S. dollar amount first above
mentioned, the indebtedness of the Borrower resulting from such Term Advance
being evidenced by this Promissory Note, and (ii) contains provisions for
acceleration of the maturity hereof upon the happening of certain stated events
and also for prepayments on account of principal hereof prior to the maturity
hereof upon the terms and conditions therein specified.
This Promissory Note shall be governed by, and construed in
accordance with, the laws of the State of California.
CKE RESTAURANTS, INC.
By:__________________________________
Title:
D-3-2
89
EXHIBIT E
FORM OF GUARANTY
GUARANTY dated as of August 1, 1996 (as amended, supplemented
or otherwise modified from time to time, this "GUARANTY") made by Carl Karcher
Enterprises, Inc., a California corporation ("CARL'S"), Summit Family
Restaurants Inc., a Delaware corporation ("SUMMIT"), HTB Restaurants Inc., a
Delaware corporation ("HTB"), and Boston Pacific, Inc., a California corporation
("BOSTON PACIFIC" and, together with Carl's, Summit, HTB and any future
subsidiary of the Borrower (as hereinafter defined) that agrees to be bound by
the terms hereof, each a "GUARANTOR" and, collectively, the "GUARANTORS"), in
favor of the financial institutions from time to time party to the Credit
Agreement referred to below as Lenders and as Issuing Banks and NationsBank of
Texas, N.A., as agent for such Lenders and Issuing Banks (in such capacity,
together with any successor appointed pursuant to Article VIII of the Credit
Agreement, the "AGENT"; the Agent, such Lenders and such Issuing Banks are each
referred to individually herein as a "GUARANTEED PARTY" and are collectively
referred to herein as the "GUARANTEED PARTIES").
PRELIMINARY STATEMENT. CKE Restaurants, Inc., a Delaware
corporation (the "BORROWER") has entered into a Credit Agreement dated as of
August 1, 1996 with the financial institutions from time to time party thereto
as Lenders and as Issuing Banks and NationsBank of Texas, N.A., as Agent (said
Agreement, as it may hereafter be amended, supplemented or otherwise modified
from time to time, being the "CREDIT AGREEMENT", the terms defined therein and
not otherwise defined herein being used herein as therein defined). Each
Guarantor may receive a portion of the proceeds of the Advances under the Credit
Agreement and will derive substantial direct and indirect benefit from the
transactions contemplated by the Credit Agreement. It is a condition precedent
to the making of Advances by the Lenders and the issuance of Letters of Credit
by the Issuing Banks under the Credit Agreement that each Guarantor shall have
executed and delivered this Guaranty.
NOW, THEREFORE, in consideration of the premises and in order
to induce the Lenders to make Advances and the Issuing Banks to issue Letters of
Credit under the Credit Agreement from time to time, each Guarantor hereby
agrees as follows:
SECTION 1. GUARANTY; LIMITATION OF LIABILITY. (a) Each
Guarantor hereby unconditionally and irrevocably guarantees, on a joint and
several basis, the punctual payment when due, whether at stated maturity, by
acceleration or otherwise, of all Obligations of the Borrower now or hereafter
existing under the Loan Documents, whether for principal (including, without
limitation, reimbursement of, and providing cash collateral for, amounts drawn
or available to be drawn under Letters of Credit), interest, fees, expenses or
otherwise (such Obligations being the "GUARANTEED OBLIGATIONS"), and agrees to
pay any and all expenses (including counsel fees and expenses) incurred by the
Agent or any other Guaranteed Party in enforcing any rights under this Guaranty.
Without limiting the generality of the foregoing, each Guarantor's liability
shall extend to all amounts that constitute part of the Guaranteed Obligations
and would be owed by the Borrower to the Agent or any other Guaranteed Party
under the Loan Documents but for the fact that they are unenforceable or not
allowable due to the existence of a bankruptcy, reorganization or similar
proceeding.
90
(b) Any provision of this Guaranty to the contrary
notwithstanding, the liability of each Guarantor under this Guaranty shall be
limited to such maximum aggregate amount as would not render such Guarantor's
obligations hereunder subject to avoidance as a fraudulent transfer or
conveyance under Section 548 of Title 11 of the United States Code or any
applicable provisions of any state or foreign law having similar effect.
SECTION 2. GUARANTY ABSOLUTE. Each Guarantor guarantees that
the Guaranteed Obligations will be paid strictly in accordance with the terms of
the Loan Documents, regardless of any law, regulation or order now or hereafter
in effect in any jurisdiction affecting any of such terms or the rights of the
Agent or any other Guaranteed Party with respect thereto. The Obligations of
each Guarantor under this Guaranty are independent of the Guaranteed Obligations
or any other Obligations of any other Loan Party under the Loan Documents, and a
separate action or actions may be brought and prosecuted against each Guarantor
to enforce this Guaranty, irrespective of whether any action is brought against
the Borrower or any other Loan Party or whether the Borrower or any other Loan
Party is joined in any such action or actions. The liability of each Guarantor
under this Guaranty is joint and several and shall be irrevocable, absolute and
unconditional irrespective of, and each Guarantor hereby irrevocably waives, to
the fullest extent permitted by applicable law, any defenses it may now or
hereafter have in any way relating to, any or all of the following:
(a) any lack of validity or enforceability of any Loan
Document or any agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Guaranteed Obligations or any
other Obligations of any other Loan Party under the Loan Documents, or
any other amendment or waiver of or any consent to departure from any
Loan Document, including, without limitation, any increase in the
Guaranteed Obligations resulting from the extension of additional
credit to the Borrower or any of its Subsidiaries or otherwise;
(c) any taking, exchange, release or non-perfection of any
collateral, or any taking, release or amendment or waiver of or consent
to departure from any other guaranty, for all or any of the Guaranteed
Obligations;
(d) any manner of application of collateral, or proceeds
thereof, to all or any of the Guaranteed Obligations, or any manner of
sale or other disposition of any collateral for all or any of the
Guaranteed Obligations or any other Obligations of any other Loan Party
under the Loan Documents or any other assets of the Borrower or any of
its Subsidiaries;
(e) any change, restructuring or termination of the corporate
structure or existence of the Borrower or any of its Subsidiaries;
(f) any failure of any Guaranteed Party to disclose to the
Borrower or any Guarantor any information relating to the financial
condition, operations, properties or prospects of any other Loan Party
now or in the future known to any Guaranteed Party (each Guarantor
hereby waiving any duty on the part of the Guaranteed Parties to
disclose such information); or
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(g) any other circumstance (including, without limitation, any
statute of limitations) or any existence of or reliance on any
representation by the Agent or any other Guaranteed Party that might
otherwise constitute a defense available to, or a discharge of, the
Borrower, any Guarantor or any other guarantor or surety.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by any Guaranteed Party or any other Person upon
the insolvency, bankruptcy or reorganization of the Borrower or any other Loan
Party or otherwise, all as though such payment had not been made.
SECTION 3. WAIVERS AND ACKNOWLEDGMENTS. (a) Each Guarantor
hereby waives promptness, diligence, notice of acceptance and any other notice
with respect to any of the Guaranteed Obligations and this Guaranty and any
requirement that the Agent or any other Guaranteed Party protect, secure,
perfect or insure any Lien or any property subject thereto or exhaust any right
or take any action against the Borrower or any other Person or any collateral.
(b) Each Guarantor hereby waives any right to revoke this
Guaranty, and acknowledges that this Guaranty is continuing in nature and
applies to all Guaranteed Obligations, whether existing now or in the future.
(c) Each Guarantor acknowledges that it will receive
substantial direct and indirect benefits from the financing arrangements
contemplated by the Loan Documents and that the waivers set forth in this
Section 3 are knowingly made in contemplation of such benefits.
SECTION 4. SUBROGATION. Each Guarantor agrees that it will not
exercise any rights that it may now or hereafter acquire against the Borrower or
any other insider guarantor that arise from the existence, payment, performance
or enforcement of such Guarantor's Obligations under this Guaranty or any other
Loan Document, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of the Agent or any other Guaranteed Party
against the Borrower or any other insider guarantor or any collateral, whether
or not such claim, remedy or right arises in equity or under contract, statute
or common law, including, without limitation, the right to take or receive from
the Borrower or any other insider guarantor, directly or indirectly, in cash or
other property or by set-off or in any other manner, payment or security on
account of such claim, remedy or right, unless and until all of the Obligations
and all other amounts payable under this Guaranty shall have been paid in full
in cash and the Commitments shall have expired or terminated. If any amount
shall be paid to any Guarantor in violation of the preceding sentence at any
time prior to the later of the payment in full in cash of the Guaranteed
Obligations and all other amounts payable under this Guaranty and the
Termination Date, such amount shall be held in trust for the benefit of the
Agent and the other Guaranteed Parties and shall forthwith be paid to the Agent
to be credited and applied to the Guaranteed Obligations and all other amounts
payable under this Guaranty, whether matured or unmatured, in accordance with
the terms of the Loan Documents, or to be held as collateral for any Guaranteed
Obligations or other amounts payable under this Guaranty thereafter arising. If
(i) any Guarantor shall make payment to the Agent or any other Guaranteed Party
of all or any part of the Guaranteed Obligations, (ii) all of the Guaranteed
Obligations and all other amounts payable under this Guaranty shall be paid in
full in cash and (iii) the Termination Date shall have occurred, the Agent and
the other Guaranteed Parties will, at such Guarantor's request and expense,
execute and deliver to such Guarantor appropriate documents, without recourse
and without
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representation or warranty, necessary to evidence the transfer by subrogation to
such Guarantor of an interest in the Guaranteed Obligations resulting from such
payment by such Guarantor.
SECTION 5. PAYMENTS FREE AND CLEAR OF TAXES, ETC. (a) Any and
all payments made by any Guarantor hereunder shall be made, in accordance with
Section 2.10 of the Credit Agreement, free and clear of and without deduction
for any and all present or future Taxes. If any Guarantor shall be required by
law to deduct any Taxes from or in respect of any sum payable hereunder to the
Agent or any other Guaranteed Party, (i) the sum payable shall be increased as
may be necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section) the Agent
or such other Guaranteed Party (as the case may be) receives an amount equal to
the sum it would have received had no such deductions been made, (ii) such
Guarantor shall make such deductions and (iii) such Guarantor shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable law.
(b) In addition, each Guarantor agrees to pay any present or
future Other Taxes.
(c) Each Guarantor will indemnify the Agent and each other
Guaranteed Party for the full amount of Taxes and Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed by any jurisdiction on
amounts payable under this Section) paid by the Agent or such other Guaranteed
Party (as the case may be) and any liability (including penalties, additions to
tax, interest and expenses) arising therefrom or with respect thereto. This
indemnification shall be made within 30 days from the date the Agent or such
other Guaranteed Party (as the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes by
or on behalf of any Guarantor, such Guarantor will furnish to the Agent, at its
address referred to in the Credit Agreement, the original receipt of payment
thereof or a certified copy of such receipt. In the case of any payment
hereunder by or on behalf of any Guarantor through an account or branch outside
the United States or on behalf of any Guarantor by a payor that is not a United
States person, if such Guarantor determines that no Taxes are payable in respect
thereof, such Guarantor shall furnish, or shall cause such payor to furnish, to
the Agent, at such address, an opinion of counsel acceptable to the Agent
stating that such payment is exempt from Taxes. For purposes of this Section
5(d) and Section 5(e), the terms "UNITED STATES" and "UNITED STATES PERSON"
shall have the meanings specified in Section 7701 of the Internal Revenue Code.
(e) Upon the reasonable request in writing of any Guarantor,
each Guaranteed Party organized under the laws of a jurisdiction outside the
United States shall, on or prior to the date of its execution and delivery of
the Credit Agreement in the case of each Initial Lender or initial Issuing Bank,
as the case may be, and on the date of the Assignment and Acceptance pursuant to
which it became a Guaranteed Party in the case of each other Guaranteed Party,
and from time to time thereafter upon the reasonable request in writing by any
Guarantor (but only so long thereafter as such Guaranteed Party remains lawfully
able to do so), provide the Agent and such Guarantor with Internal Revenue
Service form 1001 or 4224, as appropriate, or any successor form prescribed by
the Internal Revenue Service, certifying that such Guaranteed Party is exempt
from or is entitled to a reduced rate of United States withholding tax on
payments under the Credit Agreement or the Notes. If the form provided by a
Guaranteed Party at the time such Guaranteed Party first becomes a party to the
Credit Agreement indicates a United States interest withholding tax rate in
excess of zero, withholding tax at such rate shall
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be considered excluded from Taxes unless and until such Guaranteed Party
provides the appropriate form certifying that a lesser rate applies, whereupon
withholding tax at such lesser rate only shall be considered excluded from Taxes
for periods governed by such form; provided, however, that, if at the date of
the Assignment and Acceptance pursuant to which a Guaranteed Party assignee
becomes a party to the Credit Agreement, the Guaranteed Party assignor was
entitled to payments under subsection (a) in respect of United States
withholding tax with respect to interest paid at such date, then, to such
extent, the term Taxes shall include (in addition to withholding taxes that may
be imposed in the future or other amounts otherwise includable in Taxes) United
States withholding tax, if any, applicable with respect to the Guaranteed Party
assignee on such date. If any form or document referred to in this Section 5(e)
and requested by any Guarantor pursuant to this Section 5(e) requires the
disclosure of information, other than information necessary to compute the tax
payable and information required on the date hereof by Internal Revenue Service
form 1001 or 4224, that the Guaranteed Party reasonably considers to be
confidential, the Guaranteed Party shall give notice thereof to the applicable
Guarantor and shall not be obligated to include in such form or document such
confidential information.
(f) For any period with respect to which a Guaranteed Party
has failed to provide any Guarantor following such Guarantor's request therefor
pursuant to Section 5(e) above with the appropriate form described in Section
5(e) (other than if such failure is due to a change in law occurring after the
date on which a form originally was required to be provided or if such form
otherwise is not required under Section 5(e)), such Guaranteed Party shall not
be entitled to indemnification under Section 5(a) or Section 5(c) with respect
to Taxes imposed by the United States; provided, however, that should a
Guaranteed Party become subject to Taxes because of its failure to deliver a
form required hereunder, each Guarantor shall take such steps as such Guaranteed
Party shall reasonably request to assist such Guaranteed Party to recover such
Taxes.
(g) Any Guaranteed Party claiming any additional amounts
payable pursuant to this Section 5 agrees to use reasonable efforts (consistent
with its internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Eurodollar Lending Office if the making of such a change
would avoid the need for, or reduce the amount of, any such additional amounts
that may thereafter accrue and would not, in the reasonable judgment of such
Guaranteed Party, be otherwise disadvantageous to such Guaranteed Party.
(h) Without prejudice to the survival of any other agreement
of any Guarantor hereunder or under any other Loan Document, the agreements and
obligations of each Guarantor contained in this Section 5 shall survive the
payment in full of the Guaranteed Obligations and all other amounts payable
under this Guaranty.
SECTION 6. REPRESENTATIONS AND WARRANTIES. Each Guarantor
hereby represents and warrants as follows:
(a) Such Guarantor (i) is a corporation duly organized,
validly existing and good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which it owns or leases property or in
which the conduct of its business requires it to so qualify or be licensed
except where the failure to so qualify or be licensed would not have a Material
Adverse Effect and (iii) has all requisite corporate power and authority to own
or lease and operate its properties and to carry on its business as now
conducted and as proposed to be conducted.
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(b) The execution, delivery and performance by such Guarantor
of this Guaranty and each other Loan Document and each Related Document to which
it is or is to be a party, and the consummation of the transactions contemplated
hereby and thereby, are within such Guarantor's corporate powers, have been duly
authorized by all necessary corporate action, and do not (i) contravene such
Guarantor's charter or by-laws, (ii) violate any law (including, without
limitation, the Securities Exchange Act of 1934 and the Racketeer Influenced and
Corrupt Organizations Chapter of the Organized Crime Control Act of 1970), rule,
regulation (including, without limitation, Regulation X of the Board of
Governors of the Federal Reserve System), order, writ, judgment, injunction,
decree, determination or award, (iii) conflict with or result in the breach of,
or constitute a default under, any contract, loan agreement, indenture,
mortgage, deed of trust, lease or other instrument binding on or affecting such
Guarantor, any of its Subsidiaries or any of their properties or (iv) result in
or require the creation or imposition of any Lien upon or with respect to any of
the properties of such Guarantor or any of its Subsidiaries.
(c) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body or any
other third party is required for (i) the due execution, delivery, recordation,
filing or performance by such Guarantor of this Guaranty or any other Loan
Document or any Related Document to which it is or is to be a party, or for the
consummation of the transactions contemplated hereby and thereby, (ii) the
exercise by the Agent or any Lender of its rights under the Loan Documents.
(d) This Guaranty has been, and each other Loan Document and
each Related Document to which such Guarantor is or is to be a party upon
delivery will have been, duly executed and delivered by such Guarantor and
constitutes the legal, valid and binding obligation of such Guarantor,
enforceable against such Guarantor in accordance with its respective terms.
(e) There are no conditions precedent to the effectiveness of
this Guaranty that have not been satisfied or waived.
(f) Such Guarantor has, independently and without reliance
upon the Agent or any other Guaranteed Party and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Guaranty, and such Guarantor has established
adequate means of obtaining from any other Loan Parties on a continuing basis
information pertaining to, and is now and on a continuing basis will be
completely familiar with, the financial condition, operations, properties and
prospects of such other Loan Parties.
SECTION 7. COVENANTS. So long as any part of the Guaranteed
Obligations shall remain unpaid or any Lender shall have any Commitment, each
Guarantor agrees that if, under the terms of the Credit Agreement, the Borrower
is required to cause such Guarantor or any of such Guarantor's Subsidiaries to
take, or to refrain from taking, any action, or to comply with any requirements,
obligations, limitations or restrictions contained therein, in each case whether
individually or together with any other Loan Parties, such Guarantor shall, and
shall cause each of its Subsidiaries to, take or refrain from taking (as the
case may be) any such action and comply with all such requirements, obligations,
limitations and restrictions.
SECTION 8. AMENDMENTS, ETC. (a) No amendment or waiver of any
provision of this Guaranty and no consent to any departure by any Guarantor
therefrom shall in any event be effective
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unless the same shall be in writing and signed by the Agent (with the consent or
at the direction of the Required Lenders except as otherwise provided in this
Section 8) and, in the case of any such amendment, by each Guarantor (except as
set forth in Section 8(b)), and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given;
provided, however, that no amendment, waiver or consent shall, unless in writing
and signed by all of the Lenders (or by the Agent with the consent or at the
direction of all of the Lenders), (i) further reduce or limit the liability of
any Guarantor hereunder (except that the Agent may, at the request of the
Borrower and without the consent of any Lender, release any Guarantor from its
obligations hereunder concurrently with the consummation of any sale of such
Guarantor which is permitted by the terms of the Credit Agreement), (ii)
postpone any date fixed for payment hereunder or (iii) change the number or
percentage of Lenders required to take any action hereunder.
(b) Upon the execution and delivery to the Agent by any Person
of an Amendment to Guaranty in substantially the form of Exhibit G to the Credit
Agreement (each, an "AMENDMENT TO GUARANTY"), which Amendment to Guaranty need
not be executed by any other Guarantor, and the acceptance thereof by the Agent,
such Person shall be and become a Guarantor hereunder, and each reference in
this Guaranty to a "Guarantor" shall include such Person and each reference in
any other Loan Document to a "Guarantor" or a "Loan Party" shall include such
Person.
SECTION 9. NOTICES, ETC. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopy or
telex communication) and mailed, telegraphed, telecopied, telexed or delivered
to it, if to any Guarantor, addressed to it at its address set forth on the
applicable signature page hereto or set forth in the Amendment to Guaranty
pursuant to which such Guarantor became a Guarantor, if to the Agent or any
Guaranteed Party, at its address specified in the Credit Agreement, or as to any
party at such other address as shall be designated by such party in a written
notice to each other party. All such notices and other communications shall,
when mailed, telegraphed, telecopied or telexed, be effective when deposited in
the mails, delivered to the telegraph company, transmitted by telecopier or
confirmed by telex answerback, respectively.
SECTION 10. NO WAIVER; REMEDIES. No failure on the part of the
Agent or any other Guaranteed Party to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 11. RIGHT OF SET-OFF. Upon (a) the occurrence and
during the continuance of any Event of Default and (b) the making of the request
or the granting of the consent specified by Section 7.01 of the Credit Agreement
to authorize the Agent to declare the Advances and the Notes due and payable
pursuant to the provisions of said Section 7.01, each Guaranteed Party and each
of its respective Affiliates is hereby authorized, by each Guarantor, at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by such
Guaranteed Party or such Affiliate to or for the credit or the account of such
Guarantor against any and all of the Obligations of such Guarantor now or
hereafter existing under this Guaranty, whether or not such Guaranteed Party
shall have made any demand under this Guaranty and although such Obligations may
be unmatured. Each Guaranteed Party agrees promptly to notify the applicable
Guarantor after any such set-off and application; provided, however, that the
failure to give such notice shall not affect the
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validity of such set-off and application. The rights of each Guaranteed Party
and its respective Affiliates under this Section are in addition to other rights
and remedies (including, without limitation, other rights of set-off) that such
Guaranteed Party and its respective Affiliates may have.
SECTION 12. INDEMNIFICATION. Without limitation on any other
Obligations of any Guarantor or remedies of the Guaranteed Parties under this
Guaranty, each Guarantor shall, to the fullest extent permitted by law,
indemnify, defend and save and hold harmless each Guaranteed Party from and
against, and shall pay on demand, any and all losses, liabilities, damages,
costs, expenses and charges (including the fees and disbursements of such
Guaranteed Party's legal counsel) suffered or incurred by such Guaranteed Party
as a result of any failure of any Guaranteed Obligations to be the legal, valid
and binding obligations of the Borrower enforceable against the Borrower in
accordance with their terms.
SECTION 13. CONTINUING GUARANTY; ASSIGNMENTS UNDER THE CREDIT
AGREEMENT. This Guaranty is a continuing guaranty and shall (a) remain in full
force and effect until the later of the payment in full in cash of the
Guaranteed Obligations and all other amounts payable under this Guaranty and the
Termination Date, (b) be binding upon each Guarantor, its successors and assigns
and (c) inure to the benefit of and be enforceable by the Agent and the other
Guaranteed Parties and their successors, transferees and assigns. Without
limiting the generality of the foregoing clause (c), any Guaranteed Party may
assign or otherwise transfer all or any portion of its rights and obligations
under the Credit Agreement (including, without limitation, all or any portion of
its Commitment, the Advances owing to it and any Note or Notes held by it) in
accordance with the terms of the Credit Agreement to any other Person, and such
other Person shall thereupon become vested with all the benefits in respect
thereof granted to such Guaranteed Party herein or otherwise, in each case as
and to the extent provided in Section 9.07 of the Credit Agreement.
SECTION 14. GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL,
ETC. (a) This Guaranty shall be governed by, and construed in accordance with,
the laws of the State of California.
(b) Each Guarantor hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
California State court or federal court of the United States of America sitting
in Los Angeles, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Guaranty or any of the other Loan
Documents to which it is or is to be a party, or for recognition or enforcement
of any judgment, and each Guarantor hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in any such California State court or, to the extent permitted by
law, in such federal court. Each Guarantor agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Guaranty shall affect any right that any party may otherwise
have to bring any action or proceeding relating to this Guaranty or any of the
other Loan Documents to which it is or is to be a party in the courts of any
jurisdiction.
(c) Each Guarantor irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Guaranty or any of the other Loan
Documents to which it is or is to be a party in any California State or federal
court. Each Guarantor hereby irrevocably waives, to the fullest extent permitted
by law, the defense of an inconvenient forum to the maintenance of such action
or proceeding in any such court.
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(d) Each Guarantor hereby irrevocably waives all right to
trial by jury in any action, proceeding or counterclaim (whether based on
contract, tort or otherwise) arising out of or relating to any of the Loan
Documents, the transactions contemplated thereby or the actions of the Agent or
any other Guaranteed Party in the negotiation, administration, performance or
enforcement thereof.
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IN WITNESS WHEREOF, Each Guarantor has caused this Guaranty to
be duly executed and delivered by its officer thereunto duly authorized as of
the date first above written.
CARL KARCHER ENTERPRISES, INC.
By:__________________________________________
Title:
Address for Notice:
________________________
________________________
Telecopier: _______________
Telephone: _______________
Attention: ________________
SUMMIT FAMILY RESTAURANTS INC.
By:__________________________________________
Title:
Address for Notice:
________________________
________________________
Telecopier: _______________
Telephone: _______________
Attention: ________________
HTB RESTAURANTS INC.
By:__________________________________________
Title:
Address for Notice:
________________________
________________________
Telecopier: _______________
Telephone: _______________
Attention: ________________
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BOSTON PACIFIC, INC.
By:__________________________________________
Title:
Address for Notice:
________________________
________________________
Telecopier: _______________
Telephone: _______________
Attention: ________________
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EXHIBIT G
FORM OF AMENDMENT TO GUARANTY
This Amendment to Guaranty (this "AMENDMENT"), dated as of
[_____ ___], 199___, relates to the Guaranty dated as of August 1, 1996, as
amended, modified and supplemented to date (as so amended, supplemented or
modified, the "GUARANTY"), among the Subsidiaries of CKE Restaurants, Inc., a
Delaware corporation (the "BORROWER"), party thereto as Guarantors (collectively
the "GUARANTORS") in favor of NationsBank of Texas, N.A., as Agent (in such
capacity, together with any successor appointed pursuant to Article VIII of the
Credit Agreement referred to below, the "AGENT") and the other Guaranteed
Parties (as defined in the Guaranty).
In compliance with Section 6.01(l) of the Credit Agreement
dated as of August 1, 1996 (as amended, supplemented or otherwise modified from
time to time, the "CREDIT AGREEMENT") among the Borrower, the Agent and the
financial institutions party thereto, [NAME OF SUBSIDIARY], a ________
corporation (the "ADDITIONAL GUARANTOR"), hereby agrees as follows (capitalized
terms used but not otherwise defined herein shall have the meanings assigned to
such terms in the Credit Agreement):
1. AMENDMENT. The Guaranty is hereby amended to add as a
Guarantor thereunder the Additional Guarantor.
2. REPRESENTATIONS AND WARRANTIES. The Additional Guarantor
represents and warrants to the Agent and the Lenders that each of the
representations and warranties of a Guarantor contained in the Guaranty is
hereby made by the Additional Guarantor and is true and correct as to the
Additional Guarantor.
3. ADDITIONAL GUARANTOR AS GUARANTOR. The Additional Guarantor
(a) assumes all of the obligations and liabilities of a Guarantor under the
Guaranty, (b) makes all of the waivers and acknowledgments of a Guarantor under
the Guaranty, (c) agrees to be bound by the Guaranty as if the Additional
Guarantor were an original party to the Guaranty, and (d) shall be a Guarantor
for all purposes under the Loan Documents.
4. EFFECTIVENESS. This Amendment shall become effective as of
the date hereof upon the execution hereof by the Additional Guarantor and
delivery hereof to, and acceptance hereof by, the Agent.
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5. GOVERNING LAW. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of California.
[ADDITIONAL GUARANTOR]
By:__________________________________________
Title:
Notice Address:
_________________________
_________________________
Telecopier:______________
Telephone: ______________
Attention:_______________
ACCEPTED:
NATIONSBANK OF TEXAS, N.A.,
as Agent
By: ___________________________
Title:
G-2