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EXHIBIT 99.2
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CREDIT AGREEMENT
among
CKE RESTAURANTS, INC.,
THE LENDERS NAMED HEREIN
and
BANQUE PARIBAS
As Agent
Dated as of July 15, 1997
$300,000,000
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TABLE OF CONTENTS
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SECTION 1. DEFINITIONS............................................................................... 1
Section 1.1 Definitions............................................................... 1
SECTION 2. AMOUNT AND TERMS OF CREDIT FACILITIES..................................................... 24
Section 2.1 Term Loans................................................................ 24
Section 2.2 Revolving Loans........................................................... 24
Section 2.3 Notice of Borrowing....................................................... 25
Section 2.4 Disbursement of Funds..................................................... 25
Section 2.5 Notes..................................................................... 26
Section 2.6 Interest.................................................................. 27
Section 2.7 Interest Periods. ....................................................... 28
Section 2.8 Minimum Amount of Eurodollar Loans. ..................................... 29
Section 2.9 Conversion or Continuation. ............................................. 29
Section 2.10 Voluntary Reduction of Commitments. ..................................... 29
Section 2.11 Voluntary Prepayments. .................................................. 30
Section 2.12 Mandatory Prepayments. .................................................. 30
Section 2.13 Application of Prepayments. ............................................. 32
Section 2.14 Method and Place of Payment. ............................................ 32
Section 2.15 Fees. ................................................................... 33
Section 2.16 Interest Rate Unascertainable, Increased Costs, Illegality. ............. 33
Section 2.17 Funding Losses. ......................................................... 35
Section 2.18 Increased Capital. ...................................................... 36
Section 2.19 Taxes. .................................................................. 36
Section 2.20 Use of Proceeds. ........................................................ 37
Section 2.21 Collateral Security....................................................... 37
Section 2.22 Replacement of Certain Lenders............................................ 39
SECTION 3. LETTERS OF CREDIT......................................................................... 40
Section 3.1 Issuance of Letters of Credit, etc........................................ 40
Section 3.2 Letter of Credit Fees..................................................... 41
Section 3.3 Obligation of Borrower Absolute, etc...................................... 42
SECTION 4. CONDITIONS PRECEDENT...................................................................... 44
Section 4.1 Conditions Precedent to Initial Loans. .................................. 44
Section 4.2 Conditions Precedent to All Loans......................................... 51
SECTION 5. REPRESENTATIONS AND WARRANTIES............................................................ 52
Section 5.1 Corporate Status. ....................................................... 52
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Section 5.2 Corporate Power and Authority. ........................................... 52
Section 5.3 No Violation. ........................................................... 52
Section 5.4 Litigation. ............................................................. 53
Section 5.5 Financial Statements; Financial Condition; etc. ......................... 53
Section 5.6 Solvency. ............................................................... 53
Section 5.7 Projections. ............................................................ 53
Section 5.8 Material Adverse Change. ................................................ 53
Section 5.9 Use of Proceeds; Margin Regulations. .................................... 53
Section 5.10 Governmental and Other Approvals. ....................................... 54
Section 5.11 Security Interests and Liens. ............................................ 54
Section 5.12 Tax Returns and Payments. ............................................... 54
Section 5.13 ERISA..................................................................... 54
Section 5.14 Investment Company Act; Public Utility Holding Company Act. ............. 55
Section 5.15 Closing Date Transactions. .............................................. 55
Section 5.16 Representations and Warranties in Transaction Documents. ................ 55
Section 5.17 True and Complete Disclosure. ........................................... 56
Section 5.18 Corporate Structure; Capitalization....................................... 56
Section 5.19 Environmental Matters. .................................................. 56
Section 5.20 Intellectual Property. .................................................. 57
Section 5.21 Ownership of Property; Restaurants. ..................................... 57
Section 5.22 No Default. ............................................................. 58
Section 5.23 Licenses, etc. .......................................................... 58
Section 5.24 Compliance with Law. .................................................... 58
Section 5.25 No Burdensome Restrictions. ............................................. 58
Section 5.26 Brokers' Fees. .......................................................... 58
Section 5.27 Labor Matters. .......................................................... 58
Section 5.28 Indebtedness of the Borrower and Its Subsidiaries......................... 58
Section 5.29 Other Agreements.......................................................... 59
Section 5.30 Immaterial Subsidiaries................................................... 59
Section 5.31 Franchise Agreements and Franchisees...................................... 59
SECTION 6. AFFIRMATIVE COVENANTS..................................................................... 59
Section 6.1 Information Covenants. ................................................... 59
Section 6.2 Books, Records and Inspections. ......................................... 63
Section 6.3 Maintenance of Insurance. ............................................... 64
Section 6.4 Taxes. .................................................................. 64
Section 6.5 Corporate Franchises. ................................................... 64
Section 6.6 Compliance with Law. .................................................... 64
Section 6.7 Performance of Obligations. ............................................. 64
Section 6.8 Maintenance of Properties. .............................................. 65
Section 6.9 Compliance with Terms of Leaseholds. .................................... 65
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Section 6.10 Compliance with Environmental Laws. ..................................... 65
Section 6.11 Subsidiary Guarantors. .................................................. 65
Section 6.12 Immaterial Subsidiaries................................................... 66
Section 6.13 Environmental Reports..................................................... 66
Section 6.14 Letter of Credit Replacement.............................................. 66
Section 6.15 FFCA Debt................................................................. 66
SECTION 7. NEGATIVE COVENANTS....................................................................... 67
Section 7.1 Financial Covenants. .................................................... 67
Section 7.2 Indebtedness. ........................................................... 69
Section 7.3 Liens. .................................................................. 71
Section 7.4 Restriction on Fundamental Changes........................................ 73
Section 7.5 Sale of Assets. ......................................................... 73
Section 7.6 Contingent Obligations.................................................... 74
Section 7.7 Dividends................................................................. 74
Section 7.8 Advances, Investments and Loans. ......................................... 75
Section 7.9 Transactions with Affiliates. ............................................ 79
Section 7.10 Limitation on Voluntary Payments and Modifications of Certain
Documents. ............................................................... 79
Section 7.11 Changes in Business. ..................................................... 79
Section 7.12 Certain Restrictions. .................................................... 79
Section 7.13 Lease Obligations......................................................... 80
Section 7.14 Hedging Agreements. ..................................................... 80
Section 7.15 Plans. ................................................................... 80
Section 7.16 Fiscal Year; Fiscal Quarter. ............................................. 80
Section 7.17 Partnerships. ............................................................ 81
Section 7.18 Excluded Resales. ........................................................ 81
SECTION 8. EVENTS OF DEFAULT........................................................................ 81
Section 8.1 Events of Default. ....................................................... 81
Section 8.2 Rights and Remedies....................................................... 85
SECTION 9. THE AGENT................................................................................ 85
Section 9.1 Appointment............................................................... 85
Section 9.2 Delegation of Duties...................................................... 86
Section 9.3 Exculpatory Provisions. ................................................. 86
Section 9.4 Reliance by Agent......................................................... 86
Section 9.5 Notice of Default. ...................................................... 87
Section 9.6 Non-Reliance on Agent and Other Lenders. ................................ 87
Section 9.7 Indemnification. ........................................................ 88
Section 9.8 Agent in its Individual Capacity.......................................... 88
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Section 9.9 Successor Agent. ........................................................ 88
SECTION 10. MISCELLANEOUS............................................................................. 89
Section 10.1 Payment of Expenses, Indemnity, etc...................................... 89
Section 10.2 Right of Setoff. ....................................................... 90
Section 10.3 Notices. ............................................................... 90
Section 10.4 Successors and Assigns; Participation; Assignments....................... 91
Section 10.5 Amendments and Waivers. ................................................ 93
Section 10.6 No Waiver; Remedies Cumulative. ......................................... 94
Section 10.7 Sharing of Payments. ................................................... 94
Section 10.8 Application of Collateral Proceeds. .................................... 94
Section 10.9 Governing Law; Submission to Jurisdiction. ............................. 95
Section 10.10 Counterparts. .......................................................... 96
Section 10.11 Effectiveness. ......................................................... 96
Section 10.12 Headings Descriptive. .................................................. 96
Section 10.13 Marshalling; Recapture. ................................................ 96
Section 10.14 Severability. .......................................................... 97
Section 10.15 Independence of Covenants. ............................................. 97
Section 10.16 Survival. .............................................................. 97
Section 10.17 Domicile of Loans. ..................................................... 97
Section 10.18 Limitation of Liability. ............................................... 97
Section 10.19 Calculations; Computations. ............................................ 97
Section 10.20 WAIVER OF TRIAL BY JURY. ............................................... 97
Schedule 1.1 -- Lenders and Commitments
Schedule 1.2 -- Excluded Hardee's Sales
Schedule 5.10 -- Governmental and Other Approvals
Schedule 5.11 -- Security Interests and Liens
Schedule 5.13 -- ERISA Plans
Schedule 5.18 -- Subsidiaries; Capital Stock
Schedule 5.19 -- Environmental Matters
Schedule 5.21 -- Owned and Leased Properties; Owned or Operated Restaurants
Schedule 5.26 -- Brokers' Fees
Schedule 5.27 -- Labor Matters
Schedule 5.28 -- Indebtedness of the Borrower and Its Subsidiaries Being Repaid
Schedule 5.29 -- Other Agreements
Schedule 5.30 -- Immaterial Subsidiaries
Schedule 5.31 -- Franchisees and Licensees
Schedule 7.2 -- Existing Indebtedness
Schedule 7.3 -- Existing Liens
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Schedule 7.6 -- Existing Contingent Obligations
Schedule 7.8 -- Investments
Schedule 7.17 -- Permitted Partnerships
Annex 1 -- Domestic and Eurodollar Lending Offices
Exhibit A -- Form of Term Note
Exhibit B -- Form of Revolving Note
Exhibit C -- Form of Borrower Pledge Agreement
Exhibit D -- Form of Borrower Security Agreement
Exhibit E -- Form of Guaranty
Exhibit F -- Form of Subsidiary Pledge Agreement
Exhibit G -- Form of Subsidiary Security Agreement
Exhibit H -- Form of Opinion of Stradling, Yocca, Carlson & Rauth, counsel to
the Loan Parties
Exhibit I -- Form of Assignment Agreement
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CREDIT AGREEMENT, dated as of July 15, 1997, among CKE Restaurants,
Inc., a Delaware corporation (the "Borrower"), the Lenders (as hereinafter
defined) and Banque Paribas, acting in its capacity as agent for the Lenders.
SECTION 1. DEFINITIONS.
Section 1.1 Definitions. As used herein, the following terms shall
have the meanings herein specified unless the context otherwise requires.
Defined terms in this Agreement shall include in the singular number the plural
and in the plural number the singular.
"Acquisition" means any transaction, or any series of related
transactions, consummated after the date of this Agreement, by which the
Borrower or any of its Subsidiaries (i) acquires any going business or assets of
any Person or division thereof (other than assets acquired by the Borrower or
any of its Subsidiaries in the ordinary course of its business), whether through
purchase of assets, merger or otherwise or (ii) directly or indirectly acquires
(in one transaction or as the most recent transaction in a series of related
transactions) at least a majority (in number of votes) of the securities of a
corporation which have ordinary voting power for the election of directors or a
majority (by percentage or voting power) of the outstanding partnership
interests of a partnership or of the outstanding equity interests of a limited
liability company.
"Acquisition Documents" shall mean the Purchase Agreement and all
agreements and instruments executed and delivered in connection therewith
including, without limitation, the Seller Agreements.
"Adjusted Consolidated EBITDA" shall mean, with respect to the
Borrower for any period, Consolidated EBITDA of the Borrower for such period, as
adjusted to give effect to (i) the Consolidated EBITDA for such period
attributable to any business or Person acquired by the Borrower or any
Subsidiary during such period pursuant to a Permitted Acquisition with respect
to which the conditions set forth in Section 7.8(f) have been satisfied as if
such business or Person had been so acquired on the first day of such period and
(ii) the Consolidated EBITDA for such period attributable to any business or
Person disposed of by the Borrower or any Subsidiary during such period as if
such business or Person had been so disposed of on the first day of such period;
provided that the adjustments described in the foregoing clauses (i) and (ii)
shall be made only in such amounts as are agreed to by the Agent and the
Borrower and only if the Lenders have received audited financial statements for
such business or Person being acquired or disposed of for such period or for the
most recent fiscal year of such business or Person which financial statements
are audited by independent certified public accountants acceptable to the Agent
prior to such adjustment.
"Affected Lender" shall have the meaning provided in Section 2.22.
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"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling (including but not limited to all directors
and officers of such Person), controlled by, or under direct or indirect common
control with such Person. A Person shall be deemed to control another Person if
such Person possesses, directly or indirectly, the power to (i) vote 10% or more
of the Voting Stock of such other Person or (ii) direct or cause the direction
of the management and policies of such other Person, whether through the
ownership of voting securities, by contract or otherwise. No Lender shall be
deemed to be an Affiliate of the Borrower as a result of its being a party to
this Agreement.
"Agent" shall mean Banque Paribas acting in its capacity as agent for
the Lenders and any successor agent appointed in accordance with Section 9.9.
"Agent's Office" shall mean the office of the Agent located at
Chicago, Illinois, or such other office as the Agent may hereafter designate in
writing as such to the other parties hereto.
"Agreement" shall mean this Credit Agreement as the same may from
time to time hereafter be modified, restated, supplemented or amended.
"Applicable Margin" means, with respect to the Commitment Fee and
each Eurodollar Loan, the rate of interest per annum shown below for the range
of Leverage Ratio specified below:
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Leverage Ratio Eurodollar Loans Commitment Fee
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less than 1.50 to 1.00 0.50% 0.20%
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1.50 to 1.00 or greater,
but less than 2.0 .750% 0.25%
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2.0 to 1.00 or greater,
but less than 2.50 1.125% 0.25%
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2.50 to 1.00 or greater 1.375% 0.375%
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For the period commencing on the Closing Date and ending on the date which
occurs three (3) Business Days after the Agent receives the financial statements
and the related Compliance Certificate required to be delivered pursuant to
Section 6.1(a) and Section 6.1(e) with respect to the fiscal quarter of the
Borrower ending November 3, 1997, for purposes of determining the Applicable
Margin, the Leverage Ratio shall be deemed to be greater than or equal to 2.50
to 1.0 at all times during such period. Thereafter, the Leverage Ratio shall be
calculated as of the end of each fiscal quarter, commencing with the fiscal
quarter ending January 26, 1998, and shall be reported to the Agent pursuant to
a Compliance Certificate delivered by the Borrower in accordance with Section
6.1(e) hereof. Not later than two (2) Business Days after
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receipt by the Agent of each Compliance Certificate delivered by the Borrower in
accordance with Section 6.1(e) for each fiscal quarter or fiscal year, as
applicable, the Agent shall determine the Leverage Ratio for the applicable
period and shall promptly notify the Borrower and the Lenders of such
determination and of any change in each Applicable Margin resulting therefrom.
Each Applicable Margin shall be adjusted (upwards or downwards, as appropriate),
if necessary, based on the Leverage Ratio as of the end of the fiscal quarter
immediately preceding the date of determination. The adjustment, if any, to the
Applicable Margin shall be effective as to all Eurodollar Loans and Commitment
Fees commencing on the third (3rd) Business Day after the receipt by the Agent
of such quarterly or annual financial statements delivered in accordance with
Sections 6.1(a) and 6.1(b) and such related Compliance Certificate of the
Borrower delivered in accordance with Section 6.1(e) and shall be effective from
and including the third (3rd) Business Day after the date the Agent receives
such Compliance Certificate to but excluding the third (3rd) Business Day after
the date on which the next Compliance Certificate is required to be delivered
pursuant to Section 6.1(e); provided, however, that, in the event that the
Borrower shall fail at any time to furnish to the Lenders such financial
statements and any such Compliance Certificate required to be delivered pursuant
to Sections 6.1(a), 6.1(b) and 6.1(e), for purposes of determining the
Applicable Margin, the Leverage Ratio shall be deemed to be greater than or
equal to 2.50 to 1.0 at all times until the third (3rd) Business Day after such
time as all such financial statements and each such Compliance Certificate are
so received by the Agent and the Lenders. Each determination of the Leverage
Ratio and each Applicable Margin by the Agent in accordance with this definition
shall be conclusive and binding on the Borrower and the Lenders absent manifest
error.
"Asset Disposition" shall mean any conveyance, sale, lease, license,
transfer or other disposition by the Borrower or any of its Subsidiaries
subsequent to the date hereof of any asset (including by way of (i) a sale and
leaseback transaction, (ii) the sale or other transfer of any of the capital
stock of any Subsidiary of the Borrower or any of its Subsidiaries and (iii) any
total or partial loss, destruction or condemnation of any asset), but excluding
(A) sales of inventory in the ordinary course of business, (B) licenses to
franchisees in the ordinary course of business, (C) the sale or other
disposition of assets with a fair market value not in excess of $1,000,000 in
respect of any transaction or series of related transactions, but only to the
extent that the aggregate fair market value of all assets subject to Asset
Dispositions of the Borrower and its Subsidiaries in any fiscal year does not
exceed $2,000,000 and (D) leases and subleases of real and personal property of
the Borrower or any of its Subsidiaries to any of their respective franchisees
in the ordinary course of business and consistent with past practices.
"Assignee" shall have the meaning provided in Section 10.4(c).
"Assignment Agreement" shall have the meaning provided in Section
10.4(d).
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"Authorized Officer" of any Person shall mean any of the President,
the Chief Executive Officer, the Chief Operating Officer, the Chief Financial
Officer, any Senior Vice President, any Executive Vice President, any Vice
President, the Controller, the Treasurer or Assistant Treasurer of such Person,
acting singly.
"Bankruptcy Code" shall mean Title 11 of the United States Code
entitled "Bankruptcy", as amended from time to time, and any successor statute
or statutes.
"Base Rate" shall mean, at any particular date, the highest of (i)
the rate of interest publicly announced by Morgan Guaranty Trust Company of New
York in New York, New York from time to time as its "base rate" changing as and
when such base rate changes and (ii) the Federal Funds Rate plus 0.50%. The base
rate is not intended to be the lowest rate of interest charged by Morgan
Guaranty Trust Company of New York in connection with extensions of credit to
debtors.
"Base Rate Loans" shall mean Loans made and/or being maintained at a
rate of interest based upon the Base Rate.
"Borrower" shall have the meaning provided in the first paragraph of
this Agreement.
"Borrower Pledge Agreement" shall mean a pledge agreement duly
executed and delivered by the Borrower to the Agent substantially in the form
set forth as Exhibit C hereto as the same may be amended, restated, modified or
supplemented from time to time.
"Borrower Security Agreement" shall mean a security agreement
substantially in the form of the Borrower Security Agreement set forth as
Exhibit D hereto executed and delivered to the Agent by the Borrower, as the
same may be amended, restated, modified or supplemented from time to time.
"Borrowing" shall mean the incurrence of one Type of Loan of one
Facility from all the Lenders on a given date (or resulting from conversions or
continuations on a given date) having, in the case of Eurodollar Loans, the same
Interest Period.
"Business Day" shall mean (i) for all purposes other than as covered
by clause (ii) below, any day excluding Saturday, Sunday and any day which shall
be in Chicago, Los Angeles or New York City a legal holiday or a day on which
banking institutions are authorized or required by law or other government
actions to close and (ii) with respect to all notices and determinations in
connection with, and payments of principal and interest on, Eurodollar Loans,
any day which is a Business Day described in clause (i) and which is also a day
for trading by and between banks for U.S. dollar deposits in the relevant London
interbank Eurodollar market.
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"Capital Expenditures" shall mean, for any period, all expenditures
(whether paid in cash or accrued as a liability, including the portion of
Capitalized Leases of the Borrower and its Subsidiaries originally incurred
during such period that is capitalized on the consolidated balance sheet of the
Borrower and its Subsidiaries) by the Borrower and its Subsidiaries during such
period that, in conformity with GAAP, are included in "capital expenditures",
"additions to property, plant or equipment" or comparable items in the
consolidated financial statements of the Borrower and its Subsidiaries
(excluding any expenditures for assets that would be included in "capital
expenditures," "additions to property, plant or equipment" or in comparable
items in the consolidated financial statements of the Borrower and its
Subsidiaries in conformity with GAAP which assets are acquired in a Permitted
Acquisition).
"Capital Stock" shall mean any and all shares of, or interests or
participations in, corporate stock.
"Capitalized Lease" shall mean with respect to any Person, (i) any
lease of property, real or personal, the obligations under which are capitalized
on the consolidated balance sheet of such Person, and (ii) any other such lease
of such Person to the extent that the then present value of the minimum rental
commitment thereunder should, in accordance with GAAP, be capitalized on a
balance sheet of the lessee.
"Capitalized Lease Obligations" with respect to any Person, shall
mean at any time of determination all obligations of such Person under or in
respect of Capitalized Leases of such Person.
"Casa Bonita Restaurants" shall mean the Casa Bonita Restaurant
located in Tulsa, Oklahoma, and the Casa Bonita Restaurant located in Denver,
Colorado, which are owned and operated by a Subsidiary of the Borrower on the
Closing Date.
"Cash Collateralize" shall mean the pledge and deposit with or
delivery to the Agent, for the benefit of the Agent, the Issuing Bank and the
Lenders, cash or deposit account balances pursuant to documentation in form and
substance reasonably satisfactory to the Agent and the Issuing Bank; such
documentation shall irrevocably authorize the Agent to apply such cash
collateral to reimbursement of the Issuing Bank for draws under Letters of
Credit as and when occurring, and in all cases to payment of other Obligations
as and when due. Cash collateral shall be maintained in blocked deposit accounts
at the Agent or a Lender.
"Cash Equivalents" shall mean (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than 360 days from the date of acquisition, (ii) time deposits and certificates
of deposit of any Lender or any domestic commercial bank of recognized standing
having capital and surplus in excess of $100,000,000 with maturities of
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not more than 180 days from the date of acquisition, (iii) fully secured
repurchase obligations with a term of not more than 7 days for underlying
securities of the types described in clause (i) entered into with any bank
meeting the qualifications specified in clause (ii) above, and (iv) commercial
paper issued by the parent corporation of any Lender or any domestic commercial
bank of recognized standing having capital and surplus in excess of $500,000,000
and commercial paper rated at least A-1 or the equivalent thereof by Standard &
Poor's Ratings Group or at least P-1 or the equivalent thereof by Moody's
Investor Services, Inc. and in each case maturing within 180 days after the date
of acquisition.
"Closing Date" shall mean the date on which the initial Loans are
advanced hereunder.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and any successor statute.
"Collateral" shall mean all property and interests in property now
owned or hereafter acquired in or upon which a Lien has been or is purported or
intended to have been granted to the Agent or any Lender under any of the
Security Documents.
"Commitment" shall mean, for each Lender at any given time, the sum
of such Lender's Term Loan Commitment and its Revolving Loan Commitment.
"Commitment Fee" shall have the meaning provided in Section 2.15(b).
"Company" shall mean Hardee's Food Systems, Inc., a North Carolina
corporation.
"Compliance Certificate" shall have the meaning provided in Section
6.1(e).
"Consents" shall have the meaning provided in Section 4.1(v).
"Consolidated Cash Interest Expense" shall mean, for any period,
Consolidated Interest Expense for such period minus the amount of such
Consolidated Interest Expense for such period not paid or payable in cash.
"Consolidated EBITDA" shall mean, for any Person during any period,
the sum of (i) Consolidated Net Income for such period plus (ii) to the extent
deducted in the calculation of Consolidated Net Income for such period,
Consolidated Interest Expense for such period plus (iii) to the extent deducted
in the calculation of Consolidated Net Income for such period, federal and state
income taxes for such period, plus (iv) to the extent deducted in the
calculation of Consolidated Net Income for such period, depreciation and
amortization expense for such period, all determined on a consolidated basis for
such Person and its Subsidiaries in accordance with GAAP.
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"Consolidated EBITDAR" shall mean, during any period (i) Adjusted
Consolidated EBITDA for the Borrower and its Subsidiaries for such period plus
(ii) to the extent deducted in the calculation of Consolidated Net Income of the
Borrower and its Subsidiaries for such period, Consolidated Rentals for such
period.
"Consolidated Interest Expense" shall mean, for any Person and for
any period, the total interest expense (including, without limitation, interest
expense attributable to Capitalized Leases in accordance with GAAP) of such
Person and its Subsidiaries for such period determined on a consolidated basis
in accordance with GAAP.
"Consolidated Net Income" shall mean for any Person and for any
period the net income (or loss) of such Person and its Subsidiaries on a
consolidated basis for such period (taken as a single accounting period)
determined in accordance with GAAP.
"Consolidated Rentals" shall mean, for the Borrower and its
Subsidiaries for any period, the aggregate rent expense for the Borrower and its
Subsidiaries for such period, as determined on a consolidated basis in
accordance with GAAP.
"Consolidated Tangible Net Worth" shall mean, at any time, 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 Debt" shall mean, at any time, all Indebtedness
of the Borrower and its Subsidiaries (other than undrawn amounts under letters
of credit issued for the account of the Borrower or any of its Subsidiaries) as
determined on a consolidated basis.
"Contingent Obligation" as to any Person shall mean any obligation of
such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(i) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (ii) to advance or supply funds (x) for the
purchase or payment of any such primary obligation or (y) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (iv) otherwise to assure or hold harmless the owner
of such primary obligation against loss in respect thereof; provided, however,
that the term Contingent Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary
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obligation in respect of which such Contingent Obligation is made or, if not
stated or determinable, the maximum reasonably anticipated liability in respect
thereof (assuming such Person is required to perform thereunder) as determined
by such Person in good faith.
"Controlling Stockholders" shall mean (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, directly or indirect, of (A) 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 or (B) the power
to vote 51% or more of the Voting Stock of such Person. No Lender shall be
deemed to be a Controlling Stockholder as a result of its being a party to this
Agreement.
"Conversion" shall have the meaning provided in Section 2.21(b).
"Credit Exposure" shall have the meaning provided in Section 10.4(b).
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Default Rate" shall have the meaning provided in Section 2.6(c).
"Dividends" shall have the meaning provided in Section 7.7.
"Domestic Lending Office" shall mean, as to any Lender, the office of
such Lender designated as such on Annex I, or such other office designated by
such Lender from time to time by written notice to the Agent and the Borrower.
"Environmental Affiliate" shall mean, with respect to any Person, any
other Person whose liability for any Environmental Claim such Person has or may
have retained, assumed or otherwise become liable for (contingently or
otherwise), either contractually or by operation of law.
"Environmental Approvals" shall mean any permit, license, approval,
ruling, variance, exemption or other authorization required under applicable
Environmental Laws.
"Environmental Claim" shall mean, with respect to any Person, any
notice, claim, demand or similar communication (written or oral) by any other
Person alleging potential liability for investigatory costs, cleanup costs,
governmental response costs, natural resources damages, property damages,
personal injuries, fines or penalties arising out of, based on or resulting from
(i) the presence, or release into the environment, of any Material of
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Environmental Concern at any location, whether or not owned by such Person or
(ii) circumstances forming the basis of any violation, or alleged violation, of
any Environmental Law.
"Environmental Laws" shall mean all federal, state, local and foreign
laws and regulations relating to pollution or protection of human health or the
environment (including, without limitation, ambient air, surface water, ground
water, land surface or subsurface strata), including without limitation, laws
and regulations relating to emissions, discharges, releases or threatened
releases of Materials of Environmental Concern, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environmental Concern.
"Equity Interests" shall mean Capital Stock and warrants, options or
other rights to acquire Capital Stock.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time. Section references to ERISA are to ERISA, as
in effect at the date of this Agreement and any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.
"ERISA Controlled Group" means a group consisting of any ERISA Person
and all members of a controlled group of corporations and all trades or
businesses (whether or not incorporated) under common control with such Person
that, together with such Person, are treated as a single employer under
regulations of the PBGC.
"ERISA Person" shall have the meaning set forth in Section 3(9) of
ERISA for the term "person."
"ERISA Plan" means (i) any Plan that (x) is not a Multiemployer Plan
and (y) has Unfunded Benefit Liabilities in excess of $1,000,000 and (ii) any
Plan that is a Multiemployer Plan.
"Eurocurrency Reserve Requirements" shall mean, with respect to each
day during an Interest Period for Eurodollar Loans, that percentage (expressed
as a decimal) which is in effect on such day, as prescribed by the Federal
Reserve Board or other governmental authority or agency having jurisdiction with
respect thereto for determining the maximum reserves (including, without
limitation, basic, supplemental, marginal and emergency reserves) for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D) maintained by a member bank of the Federal Reserve System.
"Eurodollar Base Rate" shall mean, with respect to each day during an
Interest Period for Eurodollar Loans, the rate per annum (rounded upwards to the
nearest whole multiple of one-sixteenth of one percent) equal to the rate per
annum at which deposits in U.S.
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dollars are offered by the principal office of each of the Reference Banks in
London, England to prime banks in the London interbank market at 11:00 A.M.
(London time) two Business Days before the first day of such Interest Period in
an amount substantially equal to such Reference Bank's Eurodollar Loan
comprising part of such Borrowing to be outstanding during such Interest Period
and for a period equal to such Interest Period. The Eurodollar Base Rate for any
Interest Period for each Eurodollar Loan comprising part of the same Borrowing
shall be determined by the Agent on the basis of applicable rates furnished to
and received by the Agent from the Reference Banks two Business Days before the
first day of such Interest Period, subject, however, to the provisions of
Section 2.7.
"Eurodollar Lending Office" shall mean, as to any Lender, the office
of such Lender designated as such on Annex I, or such other office designated by
such Lender from time to time by written notice to the Agent and the Borrower.
"Eurodollar Loans" shall mean Loans made and/or being maintained at a
rate of interest provided in Section 2.6(b).
"Eurodollar Rate" shall mean with respect to each day during an
Interest Period for Eurodollar Loans, a rate per annum determined for such day
in accordance with the following formula (rounded upwards to the nearest whole
multiple of 1/100th of one percent):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Event of Default" shall have the meaning provided in Section 8.
"Excluded Hardee's Sales" shall mean the sale or other disposition of
up to 114 Hardee's Restaurants identified on Schedule 1.2 to a Person who is not
an Affiliate of the Borrower or any of its Subsidiaries substantially on the
terms and conditions previously disclosed to the Agent which terms and
conditions are acceptable to the Agent; provided that Excluded Hardee's Sales
shall only include such Hardee's Restaurants which are sold or otherwise
disposed of on or prior to March 31, 1998.
"Excluded Resales" shall mean any sale by the Borrower or any of its
Subsidiaries of a Restaurant of the Borrower or such Subsidiary so long as (i)
such Restaurant was acquired by the Borrower or such Subsidiary from a
franchisee with the intent of reselling such Restaurant, and (ii) such sale
occurs within twelve (12) months of the acquisition of such Restaurant by the
Borrower or such Subsidiary.
"Existing Debt" shall have the meaning provided in Section
4.1(r)(ii).
"Existing Letter of Credit" shall have the meaning provided in
Section 6.14.
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"Existing Reimbursement Agreement" shall have the meaning provided in
Section 7.10.
"Facility" shall mean either the Term Loans or the Revolving Loans.
"Federal Funds Rate" shall mean, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Agent from three (3)
Federal funds brokers of recognized standing selected by the Agent in its sole
discretion.
"Federal Reserve Board" shall mean the Board of Governors of the
Federal Reserve System as constituted from time to time.
"Fee Letter" shall mean that certain fee letter entered into between
the Borrower and the Agent dated as of April 24, 1997, as amended, from time to
time.
"Fees" shall mean all amounts payable pursuant to Section 2.15.
"FFCA Debt" shall mean Indebtedness of CBI Restaurants, Inc., a
Delaware corporation ("CBI"), Casa Bonita Incorporated, a Texas corporation
("Casa Bonita") and Casa Bonita Texas, L.P., a Texas limited partnership ("Casa
Bonita Texas") incurred pursuant to that certain Loan Agreement, dated as of
December 18, 1996, by and among CBI, Casa Bonita and FFCA Mortgage Corporation,
a Delaware corporation ("FFCA"), and that certain Loan Agreement, dated as of
December 18, 1996, by and among CBI, Casa Bonita Texas and FFCA.
"Final Maturity Date" shall mean the later of the Revolving Loan
Maturity Date or the Term Loan Maturity Date.
"Fixed Charges" shall mean, without duplication, with respect to the
Borrower and its Subsidiaries for any period, (i) all Consolidated Cash Interest
Expense (excluding in respect of Capitalized Leases of the Borrower and its
Subsidiaries) for such period, plus (ii) scheduled payments due in such period
for principal of the Term Loans and other permitted Indebtedness, plus (iii) all
federal and state income taxes paid in cash by the Borrower or any of its
Subsidiaries for such period, plus (iv) all scheduled amortization during such
period (including principal and interest) of Capitalized Leases under which the
Borrower or any of its Subsidiaries is the lessee, all determined on a
consolidated basis for the Borrower and its Subsidiaries for such period.
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"Franchise Agreements" shall mean any and all agreements that create
a franchise or license to which the Borrower or any of its Subsidiaries is a
party (as franchisee, licensee, franchisor or licensor) relating to the
operation or development of any Restaurant or Restaurants, including such
franchise and/or license agreements to which any of Borrower or any of its
Subsidiaries is a party as of the Closing Date and such franchise and/or license
agreements entered into from time to time after the Closing Date by the Borrower
or any of its Subsidiaries and shall include all other rights under such
agreements regardless of their nature.
"GAAP" shall mean (i) for purposes of determining compliance with the
covenants set forth in Sections 7.1 and 7.2 hereof, United States generally
accepted accounting principles as in effect on the date hereof and consistent
with those utilized in the preparation of the financial statements referred to
in Section 5.5 and (ii) for all other purposes, United States generally accepted
accounting principles as in effect as of the date of determination.
"Guarantor" shall mean each Subsidiary of the Borrower that shall be
required by the terms of this Agreement to enter into a Guaranty from time to
time.
"Guaranty" shall mean a guaranty substantially in the form of the
Guaranty set forth as Exhibit E hereto executed and delivered to the Agent for
itself and the Lenders by each Subsidiary of the Borrower (other than Immaterial
Subsidiaries), as the same may be amended, restated, modified or supplemented
from time to time.
"Hardee's Acquisition" shall mean the consummation of the Purchase
and the other transactions contemplated by the Acquisition Documents.
"Hardee's Subsidiaries" shall mean each Subsidiary which is at any
time on or after the Closing Date, a Subsidiary of Hardee's.
"Hart-Scott-Rodino Act" shall mean the Hart-Scott-Rodino Antitrust
Improvement Act of 1976, as amended.
"Hedging Agreements" shall mean any interest rate protection
agreements (including, without limitation, any interest rate swaps, caps,
floors, collars, options, futures and similar agreements), swaps (including,
without limitation, any caps, floors, collars, options, futures and similar
agreements) relating to currencies, commodities or securities, and similar
agreements.
"Immaterial Investment" shall mean any Investment owned by the
Borrower or any Subsidiary consisting of Capital Stock of any Person which, when
added to all other Investments held by the Borrower and/or its Subsidiaries
consisting of Capital Stock of such Person does not exceed $1,000,000 at any one
time outstanding.
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"Immaterial Subsidiaries" shall mean any Subsidiary of the Borrower
with assets of less than $1,000,000 (as determined in accordance with GAAP),
which is designated by the Borrower as an Immaterial Subsidiary on Schedule 5.30
or pursuant to Section 6.12; provided that the aggregate amount of assets of all
Subsidiaries designated as Immaterial Subsidiaries shall not at any time exceed
$7,000,000 (as determined in accordance with GAAP).
"Indebtedness" of any Person shall mean, without duplication, (i) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services (other than trade payables on terms of 90 days or
less incurred in the ordinary course of business of such Person), (ii) all
indebtedness of such Person evidenced by a note, bond, debenture, acceptance or
similar instrument, (iii) the principal component of all Capitalized Lease
Obligations of such Person, (iv) the face amount of all letters of credit issued
for the account of such Person and, without duplication, all unreimbursed
amounts drawn thereunder, (v) all indebtedness of any other Person secured by
any Lien on any property owned by such Person, whether or not such indebtedness
has been assumed in an amount equal to the lesser of the fair market value at
such date of such property subject to such Lien securing such Indebtedness and
the amount of the Indebtedness secured by such Lien, (vi) all indebtedness of
such Person created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even if
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), (vii)
all Contingent Obligations of such Person, (viii) all payment obligations,
whether absolute or contingent, matured or unmatured, present or future, due or
to become due, now existing or hereafter arising, of such Person under any
Hedging Agreements, (ix) all Redeemable Stock and (x) all indebtedness and other
obligations of the types specified in clauses (i) through (ix) above of any
joint venture or partnership for which such Person is liable.
"Initial Equity Issuance" shall have the meaning provided in Section
4.1(q).
"INS" shall mean the United States Immigration and Naturalization
Service or any governmental body succeeding to its functions.
"Interest Period" shall have the meaning provided in Section 2.7.
"Interest Rate Agreements" shall mean any and all interest rate
protection agreements, including, without limitation, any interest rate swaps,
caps, collars, floors and similar agreements.
"Interest Rate Hedge Providers" shall mean any Lender that provides
an Interest Rate Agreement to the Borrower as permitted pursuant to Section
7.14(a) and that executes and delivers an agency agreement, in form and
substance satisfactory to the Agent.
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"Investment" of a Person shall mean any loan, advance, extension of
credit or commitment to make any such loan, advance or extension of credit
(other than accounts receivable arising in the ordinary course of business),
deposit account or contribution of capital by such Person to any other Person or
any investment in, or purchase or other acquisition (whether by purchase,
merger, consolidation or otherwise) of, the stock, partnership interests, notes,
bonds, debentures or other securities, including options and warrants, of, or
other ownership interests in, any other Person made by such Person (whether for
cash, property, services, securities or otherwise).
"Issue" shall mean, with respect to any Letter of Credit, to issue or
to extend the expiry of, or to renew or increase the amount of, such Letter of
Credit; and the terms "Issued," "Issuing" and "Issuance" have corresponding
meanings.
"Issuing Bank" shall mean Banque Paribas in its capacity as issuer of
one or more Letters of Credit hereunder.
"L/C Amendment Application" shall mean an application form for
amendment of outstanding Letters of Credit as shall at any time be in use at the
Issuing Bank, as the Issuing Bank shall request.
"L/C Application" shall mean an application form for issuance of
Standby Letters of Credit or Trade Letters of Credit, as appropriate, as shall
at any time be in use at the Issuing Bank, as the Issuing Bank shall request.
"L/C Commitment" shall mean the commitment of the Issuing Bank to
Issue, and the commitment of the Lenders severally to participate in, Letters of
Credit from time to time Issued or outstanding under Section 3, in an aggregate
amount not to exceed on any date the amount of $55,000,000, provided, that the
L/C Commitment is part of the combined Revolving Loan Commitments, rather than a
separate, independent commitment.
"L/C Obligations" shall mean at any time the sum of (a) the aggregate
undrawn amount of all Letters of Credit then outstanding, plus (b) the amount of
all unreimbursed drawings under all Letters of Credit.
"L/C Related Documents" shall mean the Letters of Credit, the L/C
Applications, the L/C Amendment Applications and any other document relating to
any Letter of Credit, including any of the Issuing Bank's standard form
documents for standby or commercial letter of credit issuances, as appropriate.
"Lenders" shall mean the persons listed on Schedule 1.1 hereto and
the persons which from time to time become a party hereto in accordance with
Section 10.4(d).
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"Letters of Credit" shall mean any letters of credit Issued by the
Issuing Bank pursuant to Section 3.
"Leverage Ratio" shall mean, with respect to the Borrower on a
consolidated basis with its Subsidiaries, at any date, the ratio of (a)
Consolidated Total Debt of the Borrower and its Subsidiaries to (b) Adjusted
Consolidated EBITDA of the Borrower and its Subsidiaries for the period of four
(4) consecutive fiscal quarters most recently ended on or prior to such date.
"Lien" shall mean any mortgage, deed of trust, pledge, charge,
security interest, hypothecation, assignment, deposit arrangement, encumbrance,
lien (statutory or other), or preference, priority or other security agreement
of any kind or nature whatsoever, whether or not filed, recorded or otherwise
perfected under applicable law, including, without limitation, any conditional
sale or other title retention agreement, any financing lease having
substantially the same effect as any of the foregoing and the filing of any
financing statement or similar instrument under the Uniform Commercial Code or
comparable law of any jurisdiction, domestic or foreign.
"Liquidating Distribution" shall mean any extraordinary, liquidating
or other distribution in return of capital with respect to any Equity Interest
of any Person owned by a Loan Party which Equity Interest is pledged pursuant to
any of the Security Documents.
"Loan Documents" shall mean this Agreement, the Notes, the Guaranty,
each Letter of Credit, each L/C Related Document, the Fee Letter, the Security
Documents, each Interest Rate Agreement permitted to be entered into pursuant to
Section 7.14(a) and all other documents, instruments and agreements executed
and/or delivered in connection herewith or therewith or required or contemplated
hereunder or thereunder, as the same may be amended, restated, modified or
supplemented and in effect from time to time.
"Loan Party" shall mean and include the Borrower and each Guarantor.
"Loans" shall mean and include the Term Loans and the Revolving
Loans.
"Margin Stock" shall have the meaning provided such term in
Regulation U and Regulation G of the Federal Reserve Board.
"Material Adverse Effect" shall mean a material adverse effect upon
(i) the business, operations, properties, assets, performance, prospects or
condition (financial or otherwise) of the Borrower and its Subsidiaries (after
giving effect to the Hardee's Acquisition), taken as a whole, or (ii) the
ability of any Loan Party to perform, or of the Agent or any of the Lenders to
enforce, any of such Loan Party's material Obligations under any Loan Document
to which it is or is to be a party.
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"Material Leases" shall have the meaning provided in Section 6.9.
"Materials of Environmental Concern" shall mean and include
chemicals, pollutants, contaminants, wastes, toxic substances, petroleum and
petroleum products, asbestos and radioactive materials.
"Multiemployer Plan" shall mean a Plan which is a "multiemployer
plan" as defined in Section 4001(a)(3) of ERISA.
"Net Debt Proceeds" means all cash proceeds received by the Borrower
or any of its Subsidiaries from the incurrence of, or the issuance of any
instruments relating to, any Indebtedness (other than (i) Indebtedness borrowed
by the Borrower under this Agreement, (ii) Indebtedness permitted to be incurred
pursuant to Section 7.2(g), (iii) Indebtedness of Star Buffet incurred by Star
Buffet simultaneously with an issuance of Equity Interests of Star Buffet if,
immediately after giving effect to any such issuance and as a result of such
issuance, Star Buffet is no longer a Subsidiary of the Borrower, but only if
Star Buffet receives and retains such cash proceeds from such issuance of Equity
Interests and from the incurrence or issuance of such Indebtedness and (iv)
Indebtedness of Star Buffet permitted to be incurred pursuant to Section
7.2(i)), in each case net of reasonable and customary underwriting fees and
discounts, brokerage commissions and other similar reasonable and customary
costs and expenses directly attributable to such issuance or incurrence.
"Net Equity Proceeds" shall mean all cash proceeds received by the
Borrower or any of its Subsidiaries from any capital contribution or the
issuance of any Equity Interests or other equity securities of the Borrower or
any of its Subsidiaries (other than (i) the issuance of common stock (A) of the
Borrower upon exercise of stock options issued to employees, consultants or
directors of the Borrower or any of its Subsidiaries pursuant to an employee
stock option or purchase plan approved by the Board of Directors of the Borrower
or (B) of any Subsidiary of the Borrower to the Borrower or any wholly-owned
Subsidiary of the Borrower or (C) as part of the Initial Equity Issuance or the
Subsequent Equity Issuance and (ii) the issuance of any (A) Equity Interests of
Star Buffet if, immediately after giving effect to any such issuance and as a
result of such issuance, Star Buffet is no longer a Subsidiary of the Borrower
and if Star Buffet receives and retains such cash proceeds from such issuance
and (B) other Equity Interests of Star Buffet; provided that the aggregate
amount of cash proceeds not included in Net Equity Proceeds pursuant to this
clause (ii)(B), when added to the aggregate amount of cash proceeds received by
the Borrower and its Subsidiaries from all or part of the Summit Asset Sale,
which cash proceeds are not included in Net Sale Proceeds pursuant to clause (A)
of the proviso at the end of the definition thereof, shall not in any event
exceed $25,000,000, net of any reasonable and customary brokerage commissions,
underwriting fees and discounts and any other similar reasonable and customary
costs or expenses directly attributable to such issuance.
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"Net Sale Proceeds" shall mean, with respect to (a) any Asset
Disposition, all cash proceeds received by the Borrower or any of its
Subsidiaries from or in respect of such Asset Disposition (including any cash
proceeds received as income or other proceeds of any noncash proceeds of such
Asset Disposition and including any insurance payment or condemnation award in
respect of any assets of the Borrower or any of its Subsidiaries) and (b) any
Liquidating Distribution, all cash proceeds received by the Borrower or any of
its Subsidiaries from or in respect of any Liquidating Distribution, in the case
of the foregoing clauses (a) and (b), net of (i) reasonable and customary
expenses incurred or reasonably expected to be incurred in connection with such
Asset Disposition or Liquidating Distribution, (ii) any income, franchise,
transfer or other tax payable by the Borrower or such Subsidiary in connection
with such Asset Disposition or Liquidating Distribution and (iii) any
Indebtedness secured by a Lien on such property or assets and required to be
repaid as a result of such Asset Disposition, in each case with respect to the
foregoing clause (i) to the extent, but only to the extent, that the amounts so
deducted are, at the time of receipt of such cash, actually paid to a Person
that is not an Affiliate and are properly attributable to such transaction or to
the asset that is the subject thereof; provided, however, that Net Sale Proceeds
shall not include (A) any such proceeds from or in respect of all or any part of
the Summit Asset Sale; provided that the aggregate amount of cash proceeds not
included in Net Sale Proceeds pursuant to this clause (A), when added to the
aggregate amount of cash proceeds received by the Borrower and its Subsidiaries
from the issuance of any Equity Interests of Star Buffet which are not included
in Net Equity Proceeds pursuant to clause (ii)(B) of the parenthetical of the
definition thereof, shall not in any event exceed $25,000,000, (B) any such
proceeds from Excluded Resales and (C) any such proceeds from Excluded Hardee's
Sales.
"Non-Summit Subsidiary" shall mean any Subsidiary of the Borrower
other than a Summit Subsidiary.
"Notes" shall mean and include each Revolving Note and each Term
Note.
"Notice of Borrowing" shall have the meaning provided in Section
2.3(a).
"Notice of Conversion or Continuation" shall have the meaning
provided in Section 2.9(b).
"Obligations" shall mean all obligations, liabilities and
indebtedness of every kind, nature and description of the Borrower and the other
Loan Parties from time to time owing to the Agent or any Lender or any
Indemnitee under or in connection with this Agreement or any other Loan
Document, whether direct or indirect, primary or secondary, joint or several,
absolute or contingent, due or to become due, now existing or hereafter arising
and however acquired and shall include, without limitation, all principal and
interest on the Loans and, to the extent chargeable under any Loan Document, all
charges, expenses, fees and attorney's fees.
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"Participant" shall have the meaning provided in Section 10.4(b).
"Payment Date" shall mean the fifteenth day of each October, January,
April and July of each year.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established under ERISA, or any successor thereto.
"Permitted Acquisition" shall mean any Acquisition by the Borrower or
any of its Subsidiaries that has been approved by the board of directors (or
other governing body, if applicable) of the Person which is the subject of such
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 food service business.
"Permitted Subordinated Debt" shall mean Indebtedness of the Borrower
or any Subsidiary of the Borrower incurred after the date hereof (A) with
respect to which no principal payments are due prior to the date which is one
year and one day after the Final Maturity Date and (B) which is subordinated as
to exercise of remedies and 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.
"Person" shall mean and include any individual, partnership, joint
venture, firm, corporation, limited liability company, association, trust or
other enterprise or any government or political subdivision or agency,
department or instrumentality thereof.
"Plan" means any employee benefit plan covered by Title IV of ERISA,
the funding requirements of which:
(i) were the responsibility of the Borrower or a member of its
ERISA Controlled Group at any time within the six years immediately
preceding the date hereof,
(ii) are currently the responsibility of the Borrower or a
member of its ERISA Controlled Group, or
(iii) hereafter become the responsibility of the Borrower or a
member of its ERISA Controlled Group,
including any such plans as may have been, or may hereafter be, terminated for
whatever reason.
"Prepayment" shall have the meaning provided in Section 7.10.
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"Pro Rata Share" as to any Lender shall mean:
(i) with respect to all payments, computations and
determinations relating to the Term Loan Commitment or the Term Loan of
any Lender, the percentage obtained by dividing (A) the outstanding
principal balance of such Lender's Term Loan (or the amount of such
Lender's Term Loan Commitment, if the Term Loan has not been made) by (B)
the aggregate outstanding principal balance of the Term Loan (or the
Total Term Loan Commitment, if the Term Loan has not been made);
(ii) with respect to all payments, computations and
determinations relating to the Revolving Loan Commitment or the Revolving
Loans of any Lender, or such Lender's interest in Letters of Credit
(including without limitation determinations of the commitment fee under
Section 2.15(b) and Letter of Credit fees under Section 3.2), the
percentage obtained by dividing (A) such Lender's Revolving Loan
Commitment (or the aggregate outstanding principal balance of such
Lender's Revolving Loans and all L/C Obligations in which such Lender has
an interest, if the Revolving Loan Commitments have been terminated
pursuant to the terms of this Agreement) by (B) the Total Revolving Loan
Commitment (or the aggregate outstanding principal balance of the
Revolving Loans and all L/C Obligations, if the Revolving Loan
Commitments have been terminated pursuant to the terms of this
Agreement); and
(iii) for all other purposes with respect to each Lender, the
percentage obtained by dividing (A) the sum of (1) the outstanding
principal balance of such Lender's Term Loan (or such Lender's Term Loan
Commitment if the Term Loan has not been made) and (2) such Lender's
Revolving Loan Commitment (or the aggregate outstanding principal balance
of such Lender's Revolving Loans and all L/C Obligations in which such
Lender has an interest, if the Revolving Loan Commitments have been
terminated pursuant to the terms of this Agreement) by (B) the sum of (1)
the aggregate outstanding principal balance of the Term Loan (or the
Total Term Loan Commitment if the Term Loan has not been made) and (2)
the Total Revolving Loan Commitment (or the aggregate outstanding
principal balance of the Revolving Loans and all L/C Obligations, if the
Revolving Loan Commitments have been terminated pursuant to the terms of
this Agreement).
"Purchase Agreement" shall mean the Stock Purchase Agreement among
the Seller, the Company and the Borrower, dated April 27, 1997, together with
all schedules and exhibits referred to therein, each in the form delivered to
the Agent and the Lenders on the Closing Date, without giving effect to any
amendment, modification or waiver of any material term thereof effected without
the written consent of the Required Lenders.
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"Purchasing Lenders" shall have the meaning provided in Section
10.4(d).
"Rate Hedging Obligations" shall mean any and all obligations of any
Loan Party to any Interest Rate Hedge Provider under Interest Rate Agreements
permitted pursuant to Section 7.14(a).
"Redeemable Stock" means any Equity Interest which, by its terms, or
upon the happening of any event matures, is mandatorily redeemable or
repurchaseable (other than for Capital Stock not constituting Redeemable Stock),
in whole or in part, prior to one year and one day after the Final Maturity
Date, or is, by its terms or upon the happening of any event, required to be
redeemed or repurchased, redeemable or repurchaseable at the option of the
holder thereof, in whole or in part, at any time prior to one year and one day
after the Final Maturity Date.
"Reference Banks" shall mean Banque Paribas, The Sakura Bank,
Limited, Los Angeles Agency and Bank of Montreal.
"Regulation D" shall mean Regulation D of the Federal Reserve Board
as from time to time in effect and any successor to all or any portion thereof.
"Related Businesses" shall mean any Persons (other than individuals)
engaged primarily in, or the assets or business of which relate primarily to,
the food service business.
"Replacement Lender" shall have the meaning provided in Section 2.22.
"Reportable Event" has the meaning set forth in Section 4043(b) of
ERISA (other than a Reportable Event as to which the provision of 30 days notice
to the PBGC is waived under applicable regulations), or is the occurrence of any
of the events described in Section 4068(f) or 4063(a) of ERISA.
"Required Holders" shall mean William P. Foley II, C. Thomas Thompson
and Robert E. Wheaton.
"Required Lenders" shall mean all Lenders whose Pro Rata Shares, in
the aggregate, are greater than 50%.
"Restaurant" shall mean any quick service restaurant.
"Revolving Loan Commitment" shall mean at any time, for any Lender,
the amount set forth opposite such Lender's name on Schedule 1.1 hereto under
the heading "Revolving Loan Commitment," as such amount may be reduced from time
to time pursuant to the terms of this Agreement.
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"Revolving Loan Maturity Date" shall mean July 15, 2002.
"Revolving Loans" shall have the meaning provided in Section 2.2(a).
"Revolving Note" shall have the meaning provided in Section 2.5(a).
"Secured Parties" shall have the meaning provided in the Borrower
Security Agreement and the Subsidiary Security Agreement.
"Security Documents" shall mean and include the Borrower Security
Agreement, the Subsidiary Security Agreement, the Guaranty, the Borrower Pledge
Agreement, the Subsidiary Pledge Agreements and all other security agreements,
pledge agreements, assignments and similar agreements executed in connection
with the Loan Documents.
"Seller" shall mean IMASCO Holdings, Inc., a Delaware corporation.
"Seller Agreements" shall mean (i) that certain agreement dated as of
April 27, 1997 between the Seller and the Borrower and (ii) that certain
Indemnification Agreement dated as of July 14, 1997 between the Seller and the
Borrower, each as amended, in accordance with Section 7.10(b)(i).
"Solvent" as to any Person shall mean that (i) the sum of the assets
of such Person, both at a fair valuation and at present fair salable value, will
exceed its liabilities, including contingent liabilities, (ii) such Person will
have sufficient capital with which to conduct its business as presently
conducted and as proposed to be conducted and (iii) such Person has not incurred
debts, and does not intend to incur debts, beyond its ability to pay such debts
as they mature. For purposes of this definition, "debt" means any liability on a
claim, and "claim" means (x) a right to payment, whether or not such right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured, or unsecured, or (y)
a right to an equitable remedy for breach of performance if such breach gives
rise to a payment, whether or not such right to an equitable remedy is reduced
to judgment, fixed, contingent, matured, unmatured, disputed, undisputed,
secured, or unsecured. With respect to any such contingent liabilities, such
liabilities shall be computed at the amount which, in light of all the facts and
circumstances existing at the time, represents the amount which can reasonably
be expected to become an actual or matured liability.
"Standby Letter of Credit" shall mean any standby letter of credit
issued by the Issuing Bank pursuant to Section 3 and which is not a Trade Letter
of Credit.
"Star Buffet" shall mean a Person (other than an individual) to be
formed by the Borrower after the Closing Date which will initially upon
formation be a Subsidiary of the Borrower organized under the laws of the United
States or any state thereof and which will
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own and operate, directly or indirectly through one or more of its Subsidiaries,
the buffet style restaurant operating division of the Borrower and the Capital
Stock (or other equity interest, if such Person is not a corporation) of which,
to the extent such Capital Stock (or other equity interest) is owned by the
Borrower or any Subsidiary of the Borrower, is pledged to the Agent pursuant to
the Security Documents.
"Subsequent Equity Issuance" shall mean the issuance of any shares of
Capital Stock of the Borrower (other than Redeemable Stock) within 30 days after
the Closing Date as a result of the exercise by the underwriters of an
overallotment option with respect to the Initial Equity Issuance.
"Subsidiary" of any Person shall mean and include (i) any corporation
50% or more of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person directly or
indirectly through Subsidiaries and (ii) any partnership, association, joint
venture or other entity in which such Person, directly or indirectly through
Subsidiaries, is either a general partner or has a 50% or more equity interest
at the time.
"Subsidiary Pledge Agreement" shall mean each pledge agreement
substantially in the form of the Subsidiary Pledge Agreement set forth as
Exhibit F hereto executed and delivered to the Agent by each Subsidiary of the
Borrower which owns any equity interest of any Person, as the same may be
amended, restated, modified or supplemented from time to time.
"Subsidiary Security Agreement" shall mean a security agreement
substantially in the form of the Subsidiary Security Agreement set forth as
Exhibit G hereto executed and delivered to the Agent by each Subsidiary of the
Borrower (other than Immaterial Subsidiaries), as the same may be amended,
restated, modified or supplemented from time to time.
"Summit" shall mean Summit Family Restaurants, Inc., a Delaware
corporation, and its successors and assigns to the extent not prohibited by the
terms of this Agreement.
"Summit Asset Sale" shall mean (i) the sale, transfer or other
disposition of all or any part of the assets of any Summit Subsidiary and (ii)
the sale, transfer or other disposition of any Capital Stock of any Summit
Subsidiary (or other equity interest if such Summit Subsidiary is not a
corporation) owned by the Borrower or any Subsidiary of the Borrower; provided
that Summit Asset Sale shall only include the sale, transfer or other
disposition of assets or Capital Stock (or other equity interest) described in
the foregoing clauses (i) and (ii) which are sold, transferred or otherwise
disposed of on or prior to March 31, 1998.
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"Summit Subsidiary" shall mean Summit, Star Buffet and any Subsidiary
of the Borrower which is a Subsidiary of Summit or Star Buffet on the Closing
Date or thereafter.
"Surviving Debt" shall have the meaning provided in Section 4.1(r).
"Term Loan" shall have the meaning provided in Section 2.1.
"Term Loan Commitment" shall mean at any time, for any Lender, the
amount set forth opposite such Lender's name in Schedule 1.1 hereto under the
heading "Term Loan Commitment", as the same may be reduced from time to time
pursuant to the terms of this Agreement.
"Term Loan Maturity Date" shall mean July 15, 2002.
"Term Note" shall have the meaning provided in Section 2.5(a).
"Termination Event" shall mean (i) a Reportable Event, or (ii) the
initiation of any action by the Borrower, any member of the Borrower's ERISA
Controlled Group or any ERISA Plan fiduciary to terminate an ERISA Plan or the
treatment of an amendment to an ERISA Plan as a termination under ERISA, or
(iii) the institution of proceedings by the PBGC under Section 4042 of ERISA to
terminate an ERISA Plan or to appoint a trustee to administer any ERISA Plan.
"Total Commitment" shall mean, at any time, the sum of the
Commitments of all of the Lenders at such time.
"Total Revolving Loan Commitment" shall have the meaning set forth in
Section 2.2(a).
"Total Term Loan Commitment" shall have the meaning set forth in
Section 2.1.
"Trade Letter of Credit" shall mean any Letter of Credit that is
issued pursuant to Section 3 for the benefit of a supplier of inventory to the
Borrower or any of its Subsidiaries to effect payment for such inventory.
"Transaction Costs" shall mean all costs and expenses paid or payable
by any Loan Party relating to the Transactions including, without limitation,
investment banking fees, financing fees, advisory fees, appraisal fees, legal
fees and accounting fees.
"Transaction Documents" shall mean the Loan Documents and the
Acquisition Documents.
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"Transactions" shall mean the Initial Equity Issuance and each of the
transactions contemplated by the Transaction Documents.
"Transferee" shall have the meaning provided in Section 10.4(e).
"Type" shall mean any type of Loan determined with respect to the
interest option applicable thereto, i.e., a Base Rate Loan or a Eurodollar Loan.
"Unfunded Benefit Liabilities" means with respect to any Plan at any
time, the amount (if any) by which (i) the present value of all benefit
liabilities under such Plan as defined in Section 4001(a)(16) of ERISA, exceeds
(ii) the fair market value of all Plan assets allocable to such benefits, all
determined as of the then most recent valuation date for such Plan (on the basis
of assumptions prescribed by the PBGC for the purpose of Section 4044 of ERISA).
"Unused Portion" shall mean at any time with respect to the Revolving
Loans, the amount by which the Total Revolving Loan Commitment in effect at such
time exceeds the sum of (i) the aggregate principal amount outstanding of the
Revolving Loans outstanding at such time and (ii) the aggregate amount of L/C
Obligations outstanding at such time.
"Voting Stock" shall mean 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.
SECTION 2. AMOUNT AND TERMS OF CREDIT FACILITIES.
Section 2.1 Term Loans. Subject to and upon the terms and conditions
herein set forth, each Lender severally and not jointly agrees to make a single
loan to the Borrower on the Closing Date of a sum not to exceed the Term Loan
Commitment of such Lender (each such loan, a "Term Loan"). The aggregate
principal amount of the Term Loan Commitments (the "Total Term Loan Commitment")
shall not exceed $75,000,000. All unutilized Term Loan Commitments shall expire
simultaneously with the making of the Term Loans on the Closing Date. The Term
Loan of each Lender made on the Closing Date shall be initially made as a Base
Rate Loan or a Eurodollar Loan (subject to the other terms of this Agreement,
including without limitation, Section 2.3 and Section 2.17) and may thereafter
be maintained at the option of the Borrower as a Base Rate Loan or a Eurodollar
Loan, in accordance with the provisions hereof. Once repaid, Term Loans may not
be reborrowed. The Term Loans shall mature on the Term Loan Maturity Date and
shall be repaid, without premium or penalty, by the Borrower, in twenty (20)
consecutive quarterly installments of $3,750,000, payable on each Payment Date,
commencing on October 15, 1997, except for the last installment which shall be
due and payable on the Term Loan Maturity Date; provided however, that the last
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such installment due on the Term Loan Maturity Date shall be in the amount
necessary to repay in full the aggregate unpaid principal balance of the Term
Loans.
Section 2.2 Revolving Loans. (a) Subject to and upon the terms and
conditions herein set forth, each Lender severally and not jointly agrees, at
any time and from time to time on and after the Closing Date and prior to the
Revolving Loan Maturity Date, to make revolving loans (collectively, "Revolving
Loans") to the Borrower, which Revolving Loans shall not exceed in aggregate
principal amount at any time outstanding (i) the Revolving Loan Commitment of
such Lender at such time minus (ii) such Lender's Pro Rata Share of the L/C
Obligations at such time; provided that at no time shall the aggregate
outstanding principal amount of the Revolving Loans of all of the Lenders plus
the L/C Obligations of all of the Lenders exceed the Total Revolving Loan
Commitment. The sum of the Revolving Loan Commitments of all of the Lenders (the
"Total Revolving Loan Commitment") on the Closing Date shall be $225,000,000.
The Revolving Loan Commitments shall expire on October 31, 1997 if the Closing
Date has not occurred on or prior to such date. The Revolving Loans of each
Lender made on the Closing Date shall be initially made as a Base Rate Loan or a
Eurodollar Loan (subject to the other terms of this Agreement, including without
limitation, Section 2.3 and Section 2.17) and may thereafter be maintained at
the option of the Borrower as a Base Rate Loan or a Eurodollar Loan, in
accordance with the provisions hereof.
(b) Revolving Loans may be voluntarily prepaid pursuant to
Section 2.11, and, subject to the other provisions of this Agreement, any
amounts so prepaid may be reborrowed. Each Lender's Revolving Loan Commitment
shall expire, and each Revolving Loan shall mature on, the Revolving Loan
Maturity Date, without further action on the part of the Lenders or the Agent.
(c) Each Borrowing of Revolving Loans shall be in the
aggregate minimum amount of $1,000,000 or any integral multiple of $500,000 in
excess thereof.
Section 2.3 Notice of Borrowing. (a) Whenever the Borrower desires to
borrow Revolving Loans or Term Loans hereunder, it shall give the Agent at the
Agent's Office prior to 12:00 Noon, Chicago time, on the Business Day of such
borrowing by telex, facsimile or telephonic notice (promptly confirmed in
writing) of each Base Rate Loan, and at least three Business Days' prior telex,
facsimile or telephonic notice (promptly confirmed in writing) of each
Eurodollar Loan to be made hereunder. Each such notice (a "Notice of Borrowing")
shall be irrevocable and shall specify (i) the aggregate principal amount of the
requested Loans, (ii) whether such Loans shall be Term Loans or Revolving Loans,
(iii) the date of Borrowing (which shall be a Business Day), and (iv) whether
such Loans shall consist of Base Rate Loans or Eurodollar Loans and, if
Eurodollar Loans, the initial Interest Period to be applicable thereto
(provided, that no Eurodollar Loans may be requested or made when any Default or
Event of Default has occurred and is continuing).
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(b) Promptly after receipt of a Notice of Borrowing, the Agent
shall provide each Lender with a copy thereof and inform each Lender as to its
Pro Rata Share of the Loans requested thereunder.
Section 2.4 Disbursement of Funds. (a) No later than 2:00 P.M.,
Chicago time, on the date specified in each Notice of Borrowing, each Lender
will make available its Pro Rata Share of the Loans requested to be made on such
date, in U.S. dollars and immediately available funds, at the Agent's Office.
After the Agent's receipt of the proceeds of such Loans, the Agent will make
available to the Borrower by depositing in the Borrower's account at the Agent's
Office the aggregate of the amounts so made available in the type of funds
actually received.
(b) Unless the Agent shall have been notified by any Lender
prior to the date of a Borrowing that such Lender does not intend to make
available to the Agent its portion of the Loans to be made on such date, the
Agent may assume that such Lender has made such amount available to the Agent on
such date and the Agent in its sole discretion may, in reliance upon such
assumption, make available to the Borrower a corresponding amount. If such
corresponding amount is not in fact made available to the Agent by such Lender
and the Agent has made such amount available to the Borrower, the Agent shall be
entitled to recover such corresponding amount on demand from such Lender. If
such Lender does not pay such corresponding amount forthwith upon the Agent's
demand therefor, the Agent shall promptly notify the Borrower and the Borrower
shall immediately repay such corresponding amount to the Agent. The Agent shall
also be entitled to recover from such Lender or the Borrower, as the case may
be, interest on such corresponding amount in respect of each day from the date
such corresponding amount was made available by the Agent to the Borrower to the
date such corresponding amount is recovered by the Agent, at a rate per annum
equal to the then applicable rate of interest, calculated in accordance with
Section 2.6, for the respective Loans. Nothing herein shall be deemed to relieve
any Lender from its obligation to fulfill its commitments hereunder or to
prejudice any rights which the Borrower may have against any Lender as a result
of any default by such Lender hereunder. Notwithstanding anything contained
herein or in any other Loan Document to the contrary, the Agent may apply all
funds and proceeds of Collateral available for the payment of any Obligations
first to repay any amount owing by any Lender to the Agent as a result of such
Lender's failure to fund its Loans hereunder.
Section 2.5 Notes. (a) The Borrower's obligation to pay the principal
of, and interest on, each Lender's Loans shall be evidenced by (i) in the case
of such Lender's Term Loans, a promissory note (as the same may be amended,
restated, supplemented or otherwise modified from time to time, a "Term Note")
duly executed
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and delivered by the Borrower substantially in the form of Exhibit A hereto in a
principal amount equal to such Lender's Term Loan with blanks appropriately
completed in conformity herewith and (ii) in the case of such Lender's Revolving
Loans, a promissory note (as the same may be amended, restated, supplemented or
otherwise modified from time to time, a "Revolving Note") duly executed and
delivered by the Borrower substantially in the form of Exhibit B hereto in a
principal amount equal to such Lender's Revolving Loan Commitment, with blanks
appropriately completed in conformity herewith. Each Note issued to a Lender
shall (x) be payable to the order of such Lender, (y) be dated the Closing Date
or the date such Note was issued, and (z) mature on the Term Loan Maturity Date
or the Revolving Loan Maturity Date, as the case may be.
(b) Each Lender is hereby authorized, at its option, either
(i) to endorse on the schedule attached to its Revolving Note (or on a
continuation of such schedule attached to such Note and made a part thereof) an
appropriate notation evidencing the date and amount of each Revolving Loan
evidenced thereby and the date and amount of each principal and interest payment
in respect thereof, or (ii) to record such Revolving Loans and such payments in
its books and records. Such schedule or such books and records, as the case may
be, shall constitute prima facie evidence of the accuracy of the information
contained therein.
Section 2.6 Interest. (a) The Borrower agrees to pay interest in
respect of the unpaid principal amount of each Base Rate Loan from the date of
the making of such Loan until such Loan shall be paid in full at a rate per
annum which shall be equal to the Base Rate in effect from time to time, such
rate to change as and when the Base Rate changes, such interest to be computed
on the basis of a 365 or 366-day year, as the case may be, and paid for the
actual number of days elapsed.
(b) The Borrower agrees to pay interest in respect of the
unpaid principal amount of each Eurodollar Loan from the date of the making of
such Loan until such Loan shall be paid in full at a rate per annum which shall
be equal to the sum of (i) the Applicable Margin plus (ii) the relevant
Eurodollar Rate, such interest to be computed on the basis of a 360-day year and
paid for the actual number of days elapsed.
(c) In the event that, and for so long as, any Event of
Default shall have occurred and be continuing, the outstanding principal amount
of all Loans and, to the extent permitted by law, overdue interest in respect of
all Loans, shall bear interest at a rate per annum (the "Default Rate") equal to
the sum of two percent (2%) plus the Base Rate in effect from time to time, and
shall be payable on demand.
(d) Interest on each Loan shall accrue from and including the
date of the Borrowing thereof to but excluding the date of any repayment thereof
(provided that any Loan borrowed and repaid on the same day shall accrue one
day's interest) and shall be payable (i) in respect of each Base Rate Loan,
quarterly in arrears on each Payment Date, (ii) in respect of each Eurodollar
Loan, on the last day of each Interest Period applicable to such Loan and, in
the case of an Interest Period of six months, on the date occurring three months
from the first day of such Interest Period and on the last day of such Interest
Period, and (iii) in the case of all Loans, on any prepayment or conversion (on
the amount prepaid or converted), at maturity (whether by acceleration or
otherwise) and, after such maturity, on demand. Each
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determination by the Agent of an interest rate hereunder shall, except for
manifest error, be final, conclusive and binding for all purposes.
(e) Each Reference Bank agrees to furnish to the Agent timely
information for the purpose of determining each Eurodollar Base Rate. If any one
or more of the Reference Banks shall not furnish such timely information to the
Agent for the purpose of determining any such interest rate, the Agent shall
determine such interest rate on the basis of timely information furnished by the
remaining Reference Banks. The Agent shall give prompt notice to the Borrower
and the Lenders of the applicable interest rate determined by the Agent for
purposes of Section 2.6(b), and the rate, if any, furnished by each Reference
Bank for the purpose of determining the interest rate under Section 2.6(b).
(f) If fewer than two Reference Banks furnish timely
information to the Agent for determining the Eurodollar Base Rate for any
Eurodollar Loan,
(i) the Agent shall forthwith notify the Borrower
and the Lenders that the interest rate cannot be determined for such
Eurodollar Loan,
(ii) each such Eurodollar Loan will automatically,
on the last day of the then existing Interest Period therefor, convert
into a Base Rate Loan (or if such Loan is then a Base Rate Loan, will
continue as a Base Rate Loan), and
(iii) the obligation of the Lenders to make, or to
convert Loans into, Eurodollar Loans shall be suspended until the Agent
shall notify the Borrower and the Lenders that the circumstances causing
suspension no longer exist.
Section 2.7 Interest Periods. (a) The Borrower shall, in each Notice
of Borrowing or Notice of Conversion or Continuation in respect of the making
of, conversion into or continuation of a Eurodollar Loan, select the interest
period (each an "Interest Period") applicable to such Eurodollar Loan, which
Interest Period shall, at the option of the Borrower, be either a one-month,
two-month, three-month or six-month period, provided that:
(i) the initial Interest Period for any Eurodollar
Loan shall commence on the date of the making of such Loan (including the
date of any conversion from a Base Rate Loan) and each Interest Period
occurring thereafter in respect of such Loan shall commence on the date
on which the next preceding Interest Period expires;
(ii) if any Interest Period would otherwise expire
on a day which is not a Business Day, such Interest Period shall expire
on the next succeeding Business Day, provided, however, that if any
Interest Period would
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otherwise expire on a day which is not a Business Day but is a day of
the month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
(iii) if any Interest Period begins on a day for
which there is no numerically corresponding day in the calendar month at
the end of such Interest Period, such Interest Period shall end on the
last Business Day of such calendar month;
(iv) no Interest Period in respect of any Revolving
Loan or Term Loan shall extend beyond the Revolving Maturity Date or the
Term Loan Maturity Date, as the case may be; and
(v) no Interest Period in respect of a Term Loan
shall extend beyond any date upon which a repayment of the Term Loans is
required to be made pursuant to Section 2.1 unless the aggregate
principal amount of Term Loans which are Base Rate Loans or which have
Interest Periods which will expire on or before such date is equal to or
in excess of the amount of the Term Loan repayment required to be made on
such date.
(b) If upon the expiration of any Interest Period, the
Borrower has failed to elect a new Interest Period to be applicable to the
respective Eurodollar Loan as provided above, the Borrower shall be deemed to
have elected to convert such Eurodollar Loans into Base Rate Loans effective as
of the expiration date of such current Interest Period.
Section 2.8 Minimum Amount of Eurodollar Loans. All borrowings,
conversions, continuations, payments, prepayments and selection of Interest
Periods hereunder shall be made or selected so that, after giving effect
thereto, (i) the aggregate principal amount of any Borrowing comprised of
Eurodollar Loans shall not be less than $1,500,000 or an integral multiple of
$500,000 in excess thereof, and (ii) there shall be no more than eight (8)
Borrowings comprised of Eurodollar Loans outstanding at any time.
Section 2.9 Conversion or Continuation. (a) Subject to the other
provisions hereof, the Borrower shall have the option (i) to convert at any time
all or any part of outstanding Base Rate Loans which comprise part of the same
Borrowing to Eurodollar Loans, (ii) to convert all or any part of outstanding
Eurodollar Loans which comprise part of the same Borrowing to Base Rate Loans,
on the expiration date of the Interest Period applicable thereto, or (iii) to
continue all or any part of outstanding Eurodollar Loans which comprise part of
the same Borrowing as Eurodollar Loans for an additional Interest Period, on the
expiration of the Interest Period applicable thereto; provided that no Loan may
be continued as, or converted into, a Eurodollar Loan when any Default or Event
of Default has occurred and is continuing.
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(b) In order to elect to convert or continue a Loan under this
Section 2.9, the Borrower shall deliver an irrevocable notice thereof (a "Notice
of Conversion or Continuation") to the Agent no later than 12:00 Noon, Chicago
time, (i) on the Business Day of the proposed conversion date in the case of a
conversion to a Base Rate Loan and (ii) at least three Business Days in advance
of the proposed conversion or continuation date in the case of a conversion to,
or a continuation of, a Eurodollar Loan. A Notice of Conversion or Continuation
shall specify (w) the requested conversion or continuation date (which shall be
a Business Day), (x) the amount and Facility of the Loan to be converted or
continued, (y) whether a conversion or continuation is requested, and (z) in the
case of a conversion to, or a continuation of, a Eurodollar Loan, the requested
Interest Period. Promptly after receipt of a Notice of Conversion or
Continuation under this Section 2.9(b), the Agent shall provide each Lender with
a copy thereof.
Section 2.10 Voluntary Reduction of Commitments. Upon at least three
Business Day's prior irrevocable written notice (or telephonic notice promptly
confirmed in writing) to the Agent (which notice the Agent shall promptly
transmit to each of the Lenders), the Borrower shall have the right, without
premium or penalty, to permanently reduce each Lender's Pro Rata Share of all or
part of the Total Revolving Loan Commitment, provided that any such partial
reduction shall be in the minimum aggregate amount of $1,000,000 or any integral
multiple of $500,000 in excess thereof.
Section 2.11 Voluntary Prepayments. The Borrower shall have the right
to prepay the Loans in whole or in part from time to time on the following terms
and conditions: (i) the Borrower shall give the Agent written notice (or
telephonic notice promptly confirmed in writing), which notice shall be
irrevocable, of its intent to prepay the Loans, at least three Business Days
prior to a prepayment of Eurodollar Loans and on the Business Day of a
prepayment of Base Rate Loans, which notice shall specify the amount of such
prepayment and what Types of Loans and which Facilities are to be prepaid and,
in the case of Eurodollar Loans, the specific Borrowing(s) pursuant to which
made, and which notice the Agent shall promptly transmit to each of the Lenders,
(ii) each prepayment shall be in an aggregate principal amount of $1,000,000 or
any integral multiple of $500,000 in excess thereof and (iii) partial
prepayments of the Term Loans shall be applied to the scheduled installments of
principal thereof in the inverse order of maturity; provided that if any
prepayment of Eurodollar Loans is made pursuant to this Section 2.11 on a day
which is not the last day of the Interest Period applicable thereto, the
Borrower shall pay to each Lender all amounts due in connection with such
prepayment pursuant to Section 2.17.
Section 2.12 Mandatory Prepayments. (a) Upon the consummation of any
Asset Disposition after the Closing Date or upon receipt by any Loan Party of
any Liquidating Distribution after the Closing Date, in each case within one
hundred and eighty (180) days after the Borrower or any of its Subsidiaries
receives any Net Sale Proceeds, the Borrower shall prepay the outstanding Loans
in an amount equal to 100% of the amount of such Net Sale Proceeds, in
accordance with the provisions of Section 2.13; provided, however, that such Net
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Sale Proceeds which the Borrower or such Subsidiary shall, within one hundred
and eighty (180) days after the receipt thereof, use to reinvest in the business
of the Borrower or its Subsidiaries, shall not be included in determining the
aggregate Net Sale Proceeds for such period; provided further that, if an Event
of Default shall have occurred and be continuing on the date such Net Sale
Proceeds are received by the Borrower or any of its Subsidiaries or at any time
during such applicable one hundred and eighty day period, then the Borrower
shall prepay the outstanding Loans in an amount equal to 100% of such Net Sale
Proceeds (or, if any portion of such proceeds shall have been reinvested prior
to the occurrence of such Event of Default, 100% of such remaining amount of Net
Sale Proceeds not so reinvested) on the later of the date such Net Sale Proceeds
are received by the Borrower or any of its Subsidiaries or the date of the
occurrence of such Event of Default.
(b) On each date after the Closing Date on which the Borrower
or any of its Subsidiaries receives any Net Equity Proceeds, the Borrower shall
prepay the outstanding Loans in an amount equal to (i) 50% of such Net Equity
Proceeds if both (A) the Leverage Ratio as of the end of the fiscal quarter
immediately preceding such date as to which financial statements are required to
have been delivered pursuant to Section 6.1(a) and 6.1(b), as applicable, on a
pro forma basis after giving effect to any prepayment made by the Borrower
pursuant to clause (ii)(A) of this Section 2.12(b), is less than 2.0 and (B) no
Default has occurred or is continuing as a result of the Borrower's failure to
deliver any financial statement or Compliance Certificate as and when required
pursuant to Section 6.1(a), 6.1(b) or 6.1(e), as applicable and (ii) 75% of such
Net Equity Proceeds if either (A) the Leverage Ratio as of the end of the fiscal
quarter immediately preceding such date as to which financial statements are
required to have been delivered pursuant to Section 6.1(a) or 6.1(b), as
applicable, is greater than or equal to 2.0 (but only until the Leverage Ratio
is less than 2.0, at which time clause (i) of this Section 2.12(b) shall apply
(unless clause (ii)(B) of this Section 2.12(b) shall then be applicable)) or (B)
any Default has occurred and is continuing as a result of the Borrower's failure
to deliver any financial statement or Compliance Certificate as and when
required pursuant to Section 6.1(a), 6.1(b) or 6.1(e), as applicable, in each
case in accordance with the provisions of Section 2.13.
(c) On each date after the Closing Date on which the Borrower
or any of its Subsidiaries receives any Net Debt Proceeds, becomes or remains
liable with respect to Indebtedness with respect to Capitalized Leases in excess
of $80,000,000 in the aggregate at any one time outstanding for the Borrower and
its Subsidiaries, or assumes any Indebtedness in connection with a Permitted
Acquisition pursuant to Section 7.2(l), the Borrower shall prepay the
outstanding Loans in an amount equal to 100% of such Net Debt Proceeds, 100% of
the amount by which the aggregate amount of Indebtedness of the Borrower and its
Subsidiaries with respect to Capitalized Leases exceeds $80,000,000 on such date
or 100% of the aggregate principal amount of any such Indebtedness assumed in
connection with a Permitted Acquisition, respectively, in accordance with the
provisions of Section 2.13.
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(d) On each date after the Closing Date on which the Borrower
or any of its Subsidiaries receives any indemnity payments under any of the
Acquisition Documents, the Borrower shall prepay the outstanding Loans in an
amount equal to 100% of such payments, in accordance with the provisions of
Section 2.13.
(e) On each day on which the Total Revolving Loan Commitment
is reduced pursuant to Section 2.10, the Borrower shall prepay the Revolving
Loans to the extent, if any, that the outstanding principal amount of the
Revolving Loans exceeds such reduced Total Revolving Loan Commitment.
(f) If at any time and for any reason the aggregate principal
amount of Revolving Loans plus the L/C Obligations then outstanding are greater
than the Total Revolving Loan Commitment, the Borrower shall immediately prepay
the Revolving Loans in an amount equal to such excess. In addition, to the
extent at any time and for any reason, the Total Revolving Loan Commitment minus
the aggregate principal amount of Revolving Loans then outstanding, is less than
the amount of L/C Obligations outstanding at such time, the Borrower shall Cash
Collateralize the L/C Obligations in an amount equal to the amount by which such
L/C Obligations exceed the amount equal to the difference between the Total
Revolving Loan Commitment and such aggregate principal amount of Revolving
Loans.
(g) Nothing in this Section 2.12 shall be construed to
constitute the Lenders' consent to any transactions referred to in Sections
2.12(a), 2.12(b) or 2.12(c) above which transaction is not expressly permitted
by the terms of this Agreement.
Section 2.13 Application of Prepayments. All prepayments of the Loans
required by clauses (a) through (d) of Section 2.12 shall be applied first, to
prepay the Term Loans until such Term Loans shall have been repaid in full,
together with accrued and unpaid interest thereon, second, to prepay the
Revolving Loans until such Revolving Loans shall have been repaid in full,
together with accrued and unpaid interest thereon, and third, to Cash
Collateralize the then outstanding Letters of Credit and, fourth, to all other
outstanding Obligations. If (i) at the time of any prepayment of the principal
amount of the Revolving Loans pursuant to the preceding sentence, either (A) the
Leverage Ratio as of the end of the fiscal quarter immediately preceding such
date as to which financial statements are required to have been delivered
pursuant to Section 6.1(a) or 6.1(b), as applicable, is greater than or equal to
2.0 or (B) any Default has occurred and is continuing as a result of the
Borrower's failure to deliver any financial statement or Compliance Certificate
as and when required pursuant to Section 6.1(a), 6.1(b) or 6.1(e), as
applicable, then simultaneously with any prepayment of the principal amount of
the Revolving Loans pursuant to the preceding sentence, each Lender's Revolving
Loan Commitment shall be permanently reduced by such Lender's Pro Rata Share of
such prepayment and (ii) at the time of any prepayment of the principal amount
of the Revolving Loans pursuant to the preceding sentence, both (A) the Leverage
Ratio as of the end of the fiscal quarter immediately preceding such date as to
which financial statements are required to have been delivered pursuant to
Section 6.1(a) and 6.1(b), as applicable, is less
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than 2.0 and (B) no Default has occurred or is continuing as a result of the
Borrower's failure to deliver any financial statement or Compliance Certificate
as and when required pursuant to Section 6.1(a), 6.1(b) or 6.1(e), as
applicable, then, any Revolving Loans repaid pursuant to the preceding sentence
may be reborrowed, subject to the other terms of this Agreement. All prepayments
of the Term Loans required by clauses (a) through (d) of Section 2.12 shall be
applied pro rata to the scheduled installments of principal thereof.
Section 2.14 Method and Place of Payment. (a) Except as otherwise
specifically provided herein, all payments and prepayments under this Agreement
and the Notes shall be made to the Agent for the account of the Lenders entitled
thereto not later than 2:00 P.M., Chicago time, on the date when due and shall
be made in lawful money of the United States of America in immediately available
funds at the Agent's Office, and any funds received by the Agent after such time
shall, for all purposes hereof (including the following sentence), be deemed to
have been paid on the next succeeding Business Day. Except as otherwise
specifically provided herein, the Agent shall thereafter cause to be distributed
on the date of receipt thereof to each Lender in like funds its Pro Rata Share
of payments so received.
(b) Whenever any payment to be made hereunder or under any
Note shall be stated to be due on a day which is not a Business Day, the due
date thereof shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest shall be payable at the applicable
rate during such extension.
(c) All payments made by the Borrower hereunder and under the
other Loan Documents shall be made irrespective of, and without any reduction
for, any setoff or counterclaims.
Section 2.15 Fees. (a) The Borrower agrees to pay the fees in the
amounts and on the dates specified in the Fee Letter.
(b) The Borrower agrees to pay to the Agent for the account of
each Lender a commitment fee (the "Commitment Fee") for each day computed at the
per annum rate equal to the Applicable Margin (determined for the Commitment Fee
in accordance with the definition of Applicable Margin) multiplied by each such
Lender's Pro Rata Share of the average daily Unused Portion, from and including
the date of this Agreement to the Revolving Loan Maturity Date. The Commitment
Fee shall accrue from and including the date of this Agreement to but excluding
the Revolving Loan Maturity Date. Accrued fees under this Section 2.15 shall be
payable on the Closing Date and payable quarterly in arrears on each Payment
Date, commencing October 15, 1997, and on the Revolving Loan Maturity Date or
such earlier date, if any, on which the Revolving Loan Commitment shall
terminate in accordance with the terms hereof. The Commitment Fee and all other
fees due under the Loan Documents (collectively the "Fees") shall be calculated
on the basis of a 360-day year for the actual number of days elapsed.
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Section 2.16 Interest Rate Unascertainable, Increased Costs,
Illegality. (a) In the event that the Agent, in the case of clause (i) below, or
any Lender, in the case of clauses (ii) and (iii) below, shall have determined
(which determination shall, absent manifest error, be final and conclusive and
binding upon all parties hereto):
(i) on any date for determining the Eurodollar Rate for
any Interest Period, that by reason of any changes arising after the date
of this Agreement affecting the interbank Eurodollar market, adequate and
fair means do not exist for ascertaining the applicable interest rate on
the basis provided for in the definition of the Eurodollar Rate; or
(ii) at any time, that the relevant Eurodollar Rate
applicable to any of its Loans shall not represent the effective pricing
to such Lender for funding or maintaining a Eurodollar Loan, or such
Lender shall incur increased costs or reductions in the amounts received
or receivable hereunder in respect of any Eurodollar Loan, in any such
case because of (x) any change since the date of this Agreement in any
applicable law or governmental rule, regulation, guideline or order or
any interpretation thereof and including the introduction of any new law
or governmental rule, regulation, guideline or order (such as for example
but not limited to a change in official reserve requirements, but, in all
events, excluding reserves required under Regulation D of the Federal
Reserve Board to the extent included in the computation of the Eurodollar
Rate), whether or not having the force of law and whether or not failure
to comply therewith would be unlawful, and/or (y) other circumstances
affecting such Lender or the interbank Eurodollar market or the position
of such Lender in such market; or
(iii) at any time, that the making or continuance by it
of any Eurodollar Loan has become unlawful by compliance by such Lender
in good faith with any law or governmental rule, regulation, guideline or
order (whether or not having the force of law and whether or not failure
to comply therewith would be unlawful) or has become impracticable as a
result of a contingency occurring after the date of this Agreement which
materially and adversely affects the interbank Eurodollar market;
then, and in any such event, the Agent or such Lender shall, promptly after
making such determination, give notice (by telephone promptly confirmed in
writing) to the Borrower and (if applicable) the Agent of such determination
(which notice the Agent shall promptly transmit to each of the other Lenders).
Thereafter (x) in the case of clause (i) above, the Borrower's right to request
Eurodollar Loans shall be suspended, and any Notice of Borrowing or Notice of
Conversion or Continuation given by the Borrower with respect to any Borrowing
of Eurodollar Loans which has not yet been made shall be deemed cancelled and
rescinded by the Borrower, (y) in the case of clause (ii) above, the Borrower
shall pay to such Lender, upon
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such Lender's delivery of a written demand therefor to the Borrower with a copy
to the Agent, such additional amounts (in the form of an increased rate of
interest, or a different method of calculating interest, or otherwise, as such
Lender in its sole discretion shall determine) as shall be required to
compensate such Lender for such increased costs or reduction in amounts received
or receivable hereunder and (z) in the case of clause (iii) above, the Borrower
shall take one of the actions specified in clause (b) below as promptly as
possible and, in any event, within the time period required by law. The written
demand provided for in clause (y) shall demonstrate in reasonable detail the
calculation of the amounts demanded and shall, absent manifest error, be final
and conclusive and binding upon all of the parties hereto.
(b) In the case of any Eurodollar Loan or requested Eurodollar
Loan affected by the circumstances described in clause (a)(ii) above, the
Borrower may, and in the case of any Eurodollar Loan affected by the
circumstances described in clause (a)(iii) above the Borrower shall, either (i)
if any such Eurodollar Loan has not yet been made but is then the subject of a
Notice of Borrowing or a Notice of Conversion or Continuation, be deemed to have
cancelled and rescinded such notice, or (ii) if any such Eurodollar Loan is then
outstanding, require the affected Lender to convert each such Eurodollar Loan
into a Base Rate Loan at the end of the applicable Interest Period or such
earlier time as may be required by law, in each case by giving the Agent notice
(by telephone promptly confirmed in writing) thereof on the Business Day that
the Borrower was notified by the Lender pursuant to clause (a) above; provided,
however, that all Lenders whose Eurodollar Loans are affected by the
circumstances described in clause (a) above shall be treated in the same manner
under this clause (b).
(c) In the event that the Agent determines at any time
following its giving of notice based on the conditions described in clause
(a)(i) above that none of such conditions exist, the Agent shall promptly give
notice thereof to the Borrower and the Lenders, whereupon the Borrower's right
to request Eurodollar Loans from the Lenders and the Lenders' obligation to make
Eurodollar Loans shall be restored.
(d) In the event that a Lender determines at any time
following its giving of a notice based on the conditions described in clause
(a)(iii) above that none of such conditions exist, such Lender shall promptly
give notice thereof to the Borrower and the Agent, whereupon the Borrower's
right to request Eurodollar Loans from such Lender and such Lender's obligation
to make Eurodollar Loans shall be restored.
Section 2.17 Funding Losses. The Borrower shall compensate each
Lender, upon such Lender's delivery of a written demand therefor to the
Borrower, with a copy to the Agent (which demand shall set forth the basis for
requesting such amounts and shall, absent manifest error, be final and
conclusive and binding upon all of the parties hereto), for all reasonable
losses, expenses and liabilities (including, without limitation, any loss,
expense or liability incurred by such Lender in connection with the liquidation
or reemployment of deposits or funds required by it to make or carry its
Eurodollar Loans), that such Lender
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sustains: (i) if for any reason (other than a default by such Lender) a
Borrowing of, or conversion from or into, or a continuation of, Eurodollar Loans
does not occur on a date specified therefor in a Notice of Borrowing or Notice
of Conversion or Continuation (whether or not rescinded, cancelled or withdrawn
or deemed rescinded, cancelled or withdrawn, pursuant to Section 2.16(a) or
2.16(b) or otherwise), (ii) if any repayment (including, without limitation,
payment after acceleration) or conversion of any of its Eurodollar Loans occurs
on a date which is not the last day of the Interest Period applicable thereto,
(iii) if any prepayment of any of its Eurodollar Loans is not made on any date
specified in a notice of prepayment given by the Borrower, or (iv) as a
consequence of any default by the Borrower in repaying its Eurodollar Loans or
any other amounts owing hereunder in respect of its Eurodollar Loans when
required by the terms of this Agreement. Calculation of all amounts payable to a
Lender under this Section 2.17 shall be made on the assumption that such Lender
has funded its relevant Eurodollar Loan through the purchase of a Eurodollar
deposit bearing interest at the Eurodollar Rate in an amount equal to the amount
of such Eurodollar Loan with a maturity equivalent to the Interest Period
applicable to such Eurodollar Loan, and through the transfer of such Eurodollar
deposit from an offshore office of such Lender to a domestic office of such
Lender in the United States of America, provided that each Lender may fund its
Eurodollar Loans in any manner that it in its sole discretion chooses and the
foregoing assumption shall only be made in order to calculate amounts payable
under this Section 2.17.
Section 2.18 Increased Capital. If any Lender shall have determined
that compliance with any applicable law, rule, regulation, guideline, request or
directive (whether or not having the force of law) of any governmental
authority, central bank or comparable agency, has or would have the effect of
reducing the rate of return on the capital or assets of such Lender or any
Person controlling such Lender as a consequence of its commitments or
obligations hereunder, then from time to time, upon such Lender's delivering a
written demand therefor to the Agent and the Borrower (with a copy to the
Agent), the Borrower shall pay to such Lender such additional amount or amounts
as will compensate such Lender or Person for such reduction.
Section 2.19 Taxes. (a) All payments made by the Borrower under this
Agreement shall be made free and clear of, and without reduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any governmental
authority excluding, in the case of the Agent and each Lender, net income and
franchise taxes imposed on the Agent or such Lender by the jurisdiction under
the laws of which the Agent or such Lender is organized or any political
subdivision or taxing authority thereof or therein, or by any jurisdiction in
which such Lender's Domestic Lending Office or Eurodollar Lending Office, as the
case may be, is located or any political subdivision or taxing authority thereof
or therein (all such non-excluded taxes, levies, imposts, deductions, charges or
withholdings being hereinafter called "Taxes"). If any Taxes are required to be
withheld from any amounts payable to the Agent or
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any Lender hereunder or under the Notes, the amounts so payable to the Agent or
such Lender shall be increased to the extent necessary to yield to the Agent or
such Lender (after payment of all Taxes) interest or any such other amounts
payable hereunder at the rates or in the amounts specified in this Agreement and
the Notes. Whenever any Taxes are payable by the Borrower, as promptly as
possible thereafter, the Borrower shall send to the Agent for its own account or
for the account of such Lender, as the case may be, a certified copy of an
original official receipt received by the Borrower showing payment thereof. If
the Borrower fails to pay any Taxes when due to the appropriate taxing authority
or fails to remit to the Agent the required receipts or other required
documentary evidence, the Borrower shall indemnify the Agent and the Lenders for
any incremental taxes, interest or penalties that may become payable by the
Agent or any Lender as a result of any such failure. The agreements in this
Section 2.19 shall survive the termination of this Agreement and the payment of
the Notes and all other Obligations.
(b) Each Lender that is not incorporated under the laws of the
United States of America or a state thereof (including each Purchasing Lender
that becomes a party to this Agreement pursuant to Section 10.4) agrees that,
prior to the first date on which any payment is due to it hereunder, it will
deliver to the Borrower and the Agent (i) two duly completed copies of United
States Internal Revenue Service Form 1001 or 4224 or successor applicable form,
as the case may be, certifying in each case that such Lender is entitled to
receive payments under this Agreement and the Notes payable to it, without
deduction or withholding of any United States federal income taxes, and (ii) an
Internal Revenue Service Form W-8 or W-9 or successor applicable form, as the
case may be, to establish an exemption from United States backup withholding
tax. Each Lender which delivers to the Borrower and the Agent a Form 1001 or
4224 and Form W-8 or W-9 pursuant to the preceding sentence further undertakes
to deliver to the Borrower and the Agent two further copies of the said letter
and Form 1001 or 4224 and Form W-8 or W-9, or successor applicable forms, or
other manner of certification, as the case may be, on or before the date that
any such letter or form expires or becomes obsolete or after the occurrence of
any event requiring a change in the most recent letter and form previously
delivered by it to the Borrower, and such extensions or renewals thereof as may
reasonably be requested by the Borrower, certifying in the case of a Form 1001
or 4224 that such Lender is entitled to receive payments under this Agreement
without deduction or withholding of any United States federal income taxes,
unless in any such case an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
letter or form with respect to it and such Lender advises the Borrower that it
is not capable of receiving payments without any deduction or withholding of
United States federal income tax, and in the case of a Form W-8 or W-9,
establishing an exemption from United States backup withholding tax.
Section 2.20 Use of Proceeds. The proceeds of the Term Loans and the
Revolving Loans shall be used for the Borrower's working capital and general
corporate
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purposes which shall include, but not be limited to Restaurant renovations and
Permitted Acquisitions.
Section 2.21 Collateral Security.
(a) As security for the payment of the Obligations, the
Borrower shall cause to be granted to the Agent, for the ratable benefit of the
Lenders, a first priority perfected Lien on and security interest in all of the
following, whether now or hereafter existing or acquired subject only to the
Liens permitted to be incurred pursuant to Section 7.3 hereof: (i) all of the
shares of capital stock of each Subsidiary of the Borrower now or hereafter
directly or indirectly owned by the Borrower and all proceeds thereof, all as
more specifically described in the Borrower Pledge Agreement and the Subsidiary
Pledge Agreements; (ii) certain of the assets of the Borrower and all proceeds
thereof, all as more specifically described in the Borrower Security Agreement;
and (iii) certain of the assets of each Subsidiary now or hereafter directly or
indirectly owned by the Borrower and all proceeds thereof, all as more
specifically described in the Subsidiary Security Agreement. To the extent the
Agent for the benefit of the Lenders does not have a first priority perfected
security interest in any assets of the Borrower or any other Loan Party required
to be pledged as described above which is of the type described in the Borrower
Security Agreement or the Subsidiary Security Agreement, the Borrower will
grant, and cause each other Loan Party to grant, to the Agent for itself and the
benefit of the Lenders a first priority perfected security interest in such
assets subject only to the Liens permitted pursuant to Section 7.3 hereof. In
connection with any sales of assets permitted under the Credit Agreement, the
Agent will release and terminate the liens and security interests granted under
the Security Documents with respect to such assets and no further consent of the
Lenders will be required with respect to any such release.
(b) Concurrently with the consummation of any Permitted
Acquisition or any other acquisition of any asset which is of the type described
in the Borrower Security Agreement or the Subsidiary Security Agreement by the
Borrower or any Subsidiary of the Borrower (other than a Subsidiary which, after
giving effect to any such acquisition, is an Immaterial Subsidiary) or the
formation of any new Subsidiary (other than a Subsidiary which, after giving
effect to any such acquisition, is an Immaterial Subsidiary) of the Borrower or
upon an Immaterial Subsidiary ceasing to qualify or be designated as an
Immaterial Subsidiary (conversion from the status of an Immaterial Subsidiary to
a Subsidiary which is not an Immaterial Subsidiary is hereinafter referred to as
a "Conversion"), the Borrower shall
(i) in the case of a Permitted Acquisition of stock or any
other acquisition of stock by the Borrower or any such Subsidiary of
the Borrower or the formation of such a new Subsidiary or a Conversion:
(A) deliver or cause to be delivered to the Agent all of the
certificates representing the capital stock (or other instruments or
securities evidencing ownership) of such new Subsidiary which is being
acquired or formed or converted, beneficially
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owned by the Borrower or such Subsidiary, as additional collateral for
the Obligations, to be held by the Agent in accordance with the terms
of the Borrower Pledge Agreement or a Subsidiary Pledge Agreement, as
the case may be; and (B) cause such new Subsidiary which is being
acquired or formed or converted to deliver to the Agent (1) duly
executed counterpart signature pages to each of the Guaranty, and the
Subsidiary Security Agreement, in the forms attached respectively
thereto as Annex I, together with the authorization to the Agent and
the Lenders to attach such signature pages to the Guaranty and the
Subsidiary Security Agreement, respectively, the effect of which shall
be that as of the date set forth on such signature pages such new or
converted Subsidiary shall become a party to each such agreement and be
bound by the terms thereof and any revisions to the schedules to the
Subsidiary Security Agreement necessary in connection therewith, (2) if
such new or converted Subsidiary owns any capital stock of any other
Subsidiary, a Subsidiary Pledge Agreement, or if such new or converted
Subsidiary owns any copyrights, trademarks, patents or other
intellectual property, such additional Security Documents as requested
by the Agent and, (3) such Uniform Commercial Code financing statements
as shall be required to perfect the security interest of the Agent and
the Lenders in the Collateral being pledged by such new Subsidiary
pursuant to the Subsidiary Security Agreement;
(ii) in the case of a Permitted Acquisition of assets or
any other acquisition of assets by the Borrower or any such Subsidiary
which is of the type described in the Borrower Security Agreement or
the Subsidiary Security Agreement, deliver or cause to be delivered by
the Borrower or such Subsidiary acquiring such assets, (A) such Uniform
Commercial Code financing statements as shall be required to perfect
the security interest of the Agent and the Lenders in the assets being
so acquired, (B) if such assets include copyrights, trademarks, patents
or other intellectual property, such additional Security Documents as
requested by the Agent, and (C) any additional instruments or documents
evidencing the security interest of the Agent reasonably required by
the Agent; and
(iii) in any case, provide such other documentation,
including, without limitation, one or more opinions of counsel
reasonably satisfactory to the Agent, articles of incorporation,
by-laws and resolutions, which in the reasonable opinion of the Agent
is necessary or advisable in connection with such Permitted Acquisition
or formation of such new Subsidiary or other acquisition or Conversion.
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Section 2.22 Replacement of Certain Lenders. If a Lender ("Affected
Lender") shall have requested compensation from the Borrower under Sections
2.16, 2.18 or 2.19 to recover Taxes or other additional costs incurred by such
Lender which are not being incurred generally by the other Lenders, or delivered
a notice pursuant to Section 2.16(a)(iii) claiming that such Lender is unable to
extend Eurodollar Loans to the Borrower for reasons not generally applicable to
the other Lenders, then, in any such case, so long as no Default or Event of
Default exists, the Borrower may make written demand on such Affected Lender
(with a copy to the Agent) for the Affected Lender to assign, and such Affected
Lender shall assign pursuant to one or more duly executed assignment and
acceptance agreements in substantially the form of Exhibit I thirty (30)
Business Days after the date of such demand, to one or more financial
institutions that comply with the provisions of Section 10.4(c) and 10.4(d) (and
that are reasonably acceptable to the Agent) which the Borrower shall have
engaged for such purpose ("Replacement Lender"), all of such Affected Lender's
rights and obligations under this Agreement and the other Loan Documents
(including its Revolving Loan Commitment, all Loans owing to it, all of its
participation interests in outstanding Letters of Credit, and its obligation to
participate in additional Letters of Credit hereunder) in accordance with
Section 10.4(c) and 10.4(d). Further, with respect to any such assignment, the
Affected Lender shall have concurrently received, in cash, all amounts due and
owing to such Affected Lender hereunder or under any other Loan Document,
including the aggregate outstanding principal amount of the Loans owed to such
Lender, together with accrued interest thereon through the date of such
assignment from the Replacement Lender, amounts payable under Sections 2.16,
2.18 and 2.19 with respect to such Affected Lender and compensation payable
under Section 2.15; provided that upon such Affected Lender's replacement, such
Affected Lender shall cease to be a party hereto but shall continue to be
entitled to the benefits of Sections 2.16, 2.17, 2.18, 2.19 and 10.1 accruing
with respect to such Affected Lender prior to the date such Affected Lender is
replaced, as well as to any fees accrued for its account hereunder prior to
being replaced and not yet paid, and shall continue to be obligated under
Section 9.7.
SECTION 3. LETTERS OF CREDIT.
Section 3.1 Issuance of Letters of Credit, etc. (a) Subject to the
terms and conditions hereof, at any time and from time to time from the Closing
Date through the day prior to the Revolving Loan Maturity Date, the Issuing Bank
shall issue such Letters of Credit for the account of the Borrower or any
Subsidiary of the Borrower which is a party to the Guaranty as Borrower may
request by an L/C Application; provided that, giving effect to such Letter of
Credit, (x) the sum of the L/C Obligations then outstanding plus the then
outstanding aggregate principal amount of the Revolving Loans shall not exceed
the Total Revolving Loan Commitment and (y) the aggregate L/C Obligations then
outstanding shall not exceed the L/C Commitment. Unless all the Lenders and the
Issuing Bank otherwise consent in writing, the term of any Letter of Credit
shall not exceed 12 months. No Letter of Credit shall expire by its terms after
the Revolving Loan Maturity Date. No Letter of Credit shall be issued except in
the ordinary course of business of the Borrower or any of its Subsidiaries or in
connection
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with Permitted Acquisitions with respect to which the conditions set forth in
Section 7.8(f) have been satisfied, each Letter of Credit shall be used solely
(a) to support obligations of the Borrower and its Subsidiaries not prohibited
hereunder, other than Indebtedness 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 7.2), and (b) for
the purposes described in the definition of "Trade Letter of Credit".
(b) The Borrower shall submit the L/C Application for the
Issuance of any Letter of Credit to the Issuing Bank at least five Business Days
prior to the date when required. Upon Issuance of a Letter of Credit, the
Issuing Bank shall promptly notify the Lenders of the amount and terms thereof.
(c) Upon the Issuance of a Letter of Credit, each Lender that
has made a Revolving Loan Commitment shall be deemed to have purchased a pro
rata participation, from the Issuing Bank in an amount equal to that Lender's
Pro Rata Share, in the Letter of Credit. Without limiting the scope and nature
of each Lender's participation in any Letter of Credit, to the extent that the
Issuing Bank has not been reimbursed by Borrower for any payment to a
beneficiary of a Letter of Credit in respect of a drawing under such Letter of
Credit made by the Issuing Bank under any Letter of Credit, each Lender shall,
pro rata according to its Pro Rata Share, reimburse the Issuing Bank promptly
upon demand for the amount of such payment. The obligation of each Lender to so
reimburse the Issuing Bank shall be absolute and unconditional and shall not be
affected by the occurrence of a Default, Event of Default or any other
occurrence or event. Any such reimbursement shall not relieve or otherwise
impair the obligation of Borrower to reimburse the Issuing Bank for the amount
of any payment made by the Issuing Bank under any Letter of Credit together with
interest as hereinafter provided.
(d) Upon the making of any payment with respect to any Letter
of Credit by the Issuing Bank, Borrower shall be deemed to have submitted a
Notice of Borrowing for a Revolving Loan consisting of a Base Rate Loan in the
amount of such payment, and the Agent shall without notice to or the consent of
Borrower cause Revolving Loans to be made by the Lenders in an aggregate amount
equal to the amount paid by the Issuing Bank on that Letter of Credit, but not
exceeding the Total Revolving Loan Commitment minus the then outstanding
principal amount of Revolving Loans and minus all other then outstanding L/C
Obligations, and for this purpose, the conditions precedent set forth in Section
4 hereof shall not apply. The proceeds of such Revolving Loans shall be paid to
the Issuing Bank to reimburse it for the payment made by it under the Letter of
Credit. Promptly following any Revolving Loans made under this Section 3.1(d),
the Agent shall notify Borrower thereof.
(e) To the extent that any Loans made pursuant to Section
3.1(d) are insufficient to reimburse the Issuing Bank in full, Borrower agrees
to pay to the Issuing Bank with respect to each Letter of Credit, within one
Business Day after demand therefor, a
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principal amount equal to any payment made by the Issuing Bank under that Letter
of Credit, together with interest on such amount from the date of any payment
made by the Issuing Bank through the date of payment by Borrower at the Default
Rate. The principal amount of any such payment made by Borrower to the Issuing
Bank shall be used to reimburse the Issuing Bank for the payment made by it
under the Letter of Credit. Each Lender that has reimbursed the Issuing Bank
pursuant to Section 3.1(d) for its Pro Rata Share of any payment made by the
Issuing Bank under a Letter of Credit shall thereupon acquire a pro rata
participation, to the extent of such reimbursement, in the claim of the Issuing
Bank against Borrower under this Section 3.1(e).
(f) The Issuance of any supplement, modification, amendment,
renewal or extension to or of any Letter of Credit shall be treated in all
respects the same as the Issuance of a new Letter of Credit.
Section 3.2 Letter of Credit Fees. Borrower shall pay (i) a letter of
credit fee to the Agent equal to a per annum rate equal to the then effective
Applicable Margin for Eurodollar Loans times the stated amount of each Standby
Letter of Credit for the term of each Letter of Credit for the account of the
Lenders who have made Revolving Loan Commitments, according to their respective
Pro Rata Shares, in each case payable quarterly in arrears on each Payment Date,
and (ii) a letter of credit fee to the Agent equal to 0.50% of the stated amount
of each Trade Letter of Credit as of the date of Issuance thereof, payable for
the account of the Lenders who have made Revolving Loan Commitments, according
to their respective Pro Rata Shares, in each case payable quarterly in arrears
on each Payment Date. Upon (A) the issuance of each Letter of Credit, Borrower
shall also pay to the Agent for the account of the Issuing Bank an amount equal
to the greater of (i) $500 or (ii) 0.125% of the stated amount of each Letter of
Credit as an issuance fee; (B) the amendment of each Letter of Credit, Borrower
shall pay to the Agent for the account of the Issuing Bank the amendment fees,
in each case, as the Issuing Bank normally charges in connection with a Letter
of Credit and activity pursuant thereto, in either case which fees shall be
solely for the account of the Issuing Bank; and (C) the incurrence of any
reasonable out-of-pocket costs and expenses in connection with the maintenance
of any Letter of Credit, Borrower shall pay to the Agent for the account of the
Issuing Bank the amount of such out-of-pocket costs and expenses so incurred.
Section 3.3 Obligation of Borrower Absolute, etc. (a) The obligation
of Borrower to pay to the Issuing Bank the amount of any payment made by the
Issuing Bank under any Letter of Credit shall be absolute, unconditional and
irrevocable. Without limiting the foregoing, such obligation of Borrower shall
not be affected by any of the following circumstances:
(1) any lack of validity or enforceability of the Letter
of Credit, this Agreement or any other agreement or instrument relating
thereto;
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(2) any amendment or waiver of or any consent to departure
from the Letter of Credit, this Agreement or any other agreement or
instrument relating thereto;
(3) the existence of any claim, setoff, defense or other
rights which the Borrower or any Subsidiary of the Borrower may have at
any time against the Issuing Bank, any Lender, the Agent, any
beneficiary of the Letter of Credit (or any Persons for whom any such
beneficiary may be acting) or any other Person, whether in connection
with the Letter of Credit, this Agreement or any other agreement or
instrument relating thereto, or any unrelated transactions;
(4) any demand, statement or any other docu- ment
presented under the 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 whatsoever so long as any such
document appeared to comply with the terms of the Letter of Credit;
(5) payment by the Issuing Bank in good faith under the
Letter of Credit against presentation of a draft or any accompanying
document which does not strictly comply with the terms of the Letter of
Credit;
(6) the existence, character, quality, quantity,
condition, packing, value or delivery of any property purported to be
represented by documents presented in connection with any Letter of
Credit or for any difference between any such property and the
character, quality, quantity, condition or value of such property as
described in such documents;
(7) the time, place, manner, order or contents of
shipments or deliveries of property as described in documents presented
in connection with any Letter of Credit or the existence, nature and
extent of any insurance relative thereto;
(8) the solvency or financial responsibility of any party
issuing any documents in connection with a Letter of Credit;
(9) any failure or delay in notice of shipments or arrival
of any property; and
(10) any other circumstances whatsoever.
(b) As among the Borrower, the Lenders, the Issuing Bank and
the Agent, the Borrower assumes all risks of the acts and omissions of, or
misuse of such Letter
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of Credit by, the beneficiary of any Letter of Credit. In furtherance and not in
limitation of the foregoing, subject to the provisions of the Letter of Credit
applications and Letter of Credit reimbursement agreements executed by the
Borrower at the time it requests any Letter of Credit, the Agent, the Issuing
Bank and the Lenders shall not be responsible;
(i) for the form, validity, sufficiency, accuracy, genu-
ineness or legal effect of any document submitted by any party in
connection with the application for and issuance of the Letters of
Credit, even if it should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged;
(ii) for the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign a Letter
of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for any
reason;
(iii) for the failure of the beneficiary of a Letter of
Credit to comply duly with conditions required in order to draw upon
such Letter of Credit;
(iv) for errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph,
telex, or other similar form of teletransmission or otherwise;
(v) for errors in interpretation of technical trade terms;
(vi) for any loss or delay in the transmission or other-
wise of any document required in order to make a drawing under any
Letter of Credit or of the proceeds thereof;
(vii) for the misapplication by the beneficiary of a
Letter of Credit of the proceeds of any drawing under such Letter of
Credit; and
(viii) for any consequences arising from causes beyond the
control of the Agent, the Issuing Bank and the Lenders including,
without limitation, any act or omission, whether rightful or wrongful,
of any present or future de jure or de facto government or governmental
authority.
None of the above shall affect, impair, or prevent the vesting of any of the
Issuing Bank's rights or powers hereunder.
(c) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted by the
Issuing Bank under or in
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connection with Letters of Credit issued by it or any related certificates shall
not, in the absence of gross negligence or willful misconduct, put the Issuing
Bank under any resulting liability to the Borrower or relieve the Borrower of
any of its obligations hereunder to any such Person.
(d) The Issuing Bank shall be entitled to the protection
accorded to the Agent pursuant to Section 9, mutatis mutandis.
SECTION 4. CONDITIONS PRECEDENT.
Section 4.1 Conditions Precedent to Initial Loans. The obligation of
each Lender to make its initial Loans and of the Issuing Bank to Issue any
Letter of Credit on the Closing Date is subject to the satisfaction on the
Closing Date of the following conditions precedent:
(a) Loan Documents.
(i) Credit Agreement. The Borrower shall have executed
and delivered this Agreement to the Agent.
(ii) Notes. The Borrower shall have executed and delivered
to each of the Lenders the appropriate Notes in the amount, maturity
and as otherwise provided herein.
(iii) Borrower Security Agreement. The Borrower shall have
executed and delivered to the Agent the Borrower Security Agreement.
(iv) Subsidiary Security Agreement. Each Subsidiary of the
Borrower (other than any such Subsidiary which is an Immaterial
Subsidiary) shall have duly executed and delivered to the Agent the
Subsidiary Security Agreement.
(v) Borrower Pledge Agreement. The Borrower shall have
executed and delivered to the Agent the Borrower Pledge Agreement.
(vi) Subsidiary Pledge Agreements. Each Subsidiary of the
Borrower that owns any Equity Interest in any Person as of the Closing
Date (other than an equity interest in HTB Restaurants, Inc. or in
Boston West, L.L.C. or in Casa Bonita Incorporated) shall have duly
executed and delivered to the Agent a Subsidiary Pledge Agreement.
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(vii) Guaranty. Each Subsidiary of the Borrower (other
than any such Subsidiary which is an Immaterial Subsidiary) shall have
executed and delivered to the Agent the Guaranty.
(b) Opinions of Counsel. The Agent shall have received (A) a
legal opinion, dated the Closing Date, from Stradling, Yocca, Carlson & Rauth,
counsel to the Loan Parties, substantially in the form set forth as Exhibit H
hereto, (B) legal opinions from Locke Purnell Rain Harrell, special Texas
counsel to the Loan Parties, and Kilpatrick Stockton LLP, special North Carolina
and Georgia counsel to the Loan Parties and (C) such other legal opinions, each
dated the Closing Date, from local counsel to the Loan Parties as requested by
the Agent with respect to such matters as requested by the Agent and in form and
substance satisfactory to the Agent.
(c) Corporate Documents. The Agent shall have received the
Certificate of Incorporation, partnership agreement or other similar
organizational document of each of the Loan Parties as amended, modified or
supplemented to the Closing Date, (other than in the case of a general
partnership) certified to be true, correct and complete by the appropriate
Secretary of State as of a date not more than ten Business Days prior to the
Closing Date, together with a good standing certificate from such Secretary of
State and a good standing certificate from the Secretaries of State (or the
equivalent thereof) of each other State in which each of them is required to be
qualified to transact business, each to be dated a date not more than ten
Business Days prior to the Closing Date and a bring-down good standing
certificate or telephonic confirmation from the appropriate Secretary of State
in each jurisdiction of incorporation of each Loan Party dated the Closing Date.
(d) Certified Resolutions, etc. The Agent shall have received
a certificate of the Secretary or Assistant Secretary of each of the Loan
Parties or of a general partner in the case of each Loan Party which is a
partnership and dated the Closing Date certifying (i) the names and true
signatures of the incumbent officers of such Person authorized to sign the
applicable Loan Documents, (ii) the By-Laws of such Person as in effect on the
Closing Date, (iii) the resolutions of such Person's Board of Directors
approving and authorizing the execution, delivery and performance of all
Transaction Documents executed by such Person, and (iv) that there have been no
changes in the Certificate of Incorporation of such Person since the date of the
most recent certification thereof by the appropriate Secretary of State or, in
the case of a partnership or other similar entity the partnership agreement or
other similar organizational document.
(e) Transaction Documents. The Agent shall have received
copies of the Transaction Documents (other than the Loan Documents) and any
amendments, waivers or supplements thereto, certified as of the Closing Date by
the President or Vice President, of the Borrower to be true, correct and
complete copies of such documents, which documents shall be in form and
substance satisfactory to the Agent. The Agent shall have received copies of all
documents relating to existing Indebtedness for borrowed money or evidenced by a
note,
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bond, debenture, acceptance or similar instrument of the Borrower and its
Subsidiaries that shall be outstanding in each case in a principal amount in
excess of $2,000,000 on and after the Closing Date, including, without
limitation, terms of amortization, interest, premiums, fees, expenses, maturity,
amendments, covenants, events of default and remedies, certified as of the
Closing Date as such by the President or Vice President of the Borrower.
(f) Process Agent. Each Loan Party shall have appointed an
agent satisfactory to the Agent for service of process in connection with any
action or proceeding arising under or relating to the Loan Documents, and such
agent shall have accepted such appointment in writing.
(g) Officer's Certificate. The Agent and the Lenders shall
have received a certificate of the President or Vice President of the Borrower,
dated the Closing Date, certifying that (i) the Transaction Documents (other
than the Loan Documents) are in full force and effect and no material term or
condition thereof has been amended from the form thereof delivered to the Agent,
or waived, except as disclosed to the Agent or its counsel prior to the
execution of this Agreement, (ii) each of the Loan Parties and, to the best of
his or her knowledge, the other parties to the Transaction Documents, have
performed or complied in all material respects with all agreements and
conditions contained in such Transaction Documents and any agreements or
documents referred to therein required to be performed or complied with by each
of them on or before the Closing Date and no material condition to closing by
the Borrower or any of its Subsidiaries and set forth therein has been waived,
(iii) subject to the foregoing, neither any Loan Party nor, to the best of his
or her knowledge, any such other party is in default in the performance or
compliance with any of the material terms or provisions thereof, except to the
extent that performance thereof or compliance therewith or default has been
waived with the prior written consent of the Lenders, (iv) all of the
representations and warranties of the Borrower and each other Loan Party
contained in the Transaction Documents are true and correct, (v) after giving
effect to the execution and delivery of the Transaction Documents by each of the
Loan Parties and consummation of the Transactions thereunder, no Default or
Event of Default shall have occurred and be continuing and (vi) since December
31, 1996, no event or change has occurred that has caused or evidences a
Material Adverse Effect.
(h) Solvency Certificate. The Agent shall have received a
certificate signed by the Chief Financial Officer of the Borrower containing
conclusions that the Borrower and its Subsidiaries are Solvent before and after
giving effect to the Transactions and the incurrence of all other Indebtedness
of the Borrower and its Subsidiaries in connection with the Hardee's
Acquisition.
(i) Insurance. The Agent shall have received a certificate of
insurance demonstrating insurance coverage in respect of each of the Loan
Parties of types, in amounts, with insurers and with other terms reasonably
satisfactory to the Agent.
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(j) Lien Search Reports. The Agent shall have received
satisfactory reports of UCC, tax lien, judgment and litigation searches with
respect to the Borrower and each of the other Loan Parties in each of the
locations requested by the Agent.
(k) UCC-1 Financing Statements. The Agent shall have received
originals of each UCC-1 financing statement (i) duly executed by an Authorized
Officer of the Borrower as debtor naming the Agent as secured party and filed in
the jurisdictions set forth in Schedule I to the Borrower Security Agreement and
(ii) duly executed by an Authorized Officer of each other Loan Party as debtor
naming the Agent as secured party and filed in the appropriate jurisdictions set
forth in Schedule I to the Subsidiary Security Agreement.
(l) Pro Forma Balance Sheet. The Agent shall have received a
pro forma consolidated balance sheet of the Borrower and its Subsidiaries, dated
as of May 19, 1997, giving effect to the Transactions and the payment or accrual
of all Transaction Costs, certified by the chief financial officer of the
Borrower and a pro forma calculation of the Leverage Ratio specified in Section
4.1(m) certified by the chief financial officer of the Borrower.
(m) Pro forma Leverage Ratio. For the twelve-month period
ended May 19, 1997, the Leverage Ratio (on a pro forma consolidated basis after
giving effect to the Transactions and after adding $33,000,000 to clause (b) of
the definition of Leverage Ratio) is less than or equal to 3.0 to 1.0.
(n) Pledged Stock. The Agent shall have received the original
stock certificates evidencing the stock pledged pursuant to the Borrower Pledge
Agreement and each Subsidiary Pledge Agreement, together with undated stock
powers duly executed in blank in connection therewith.
(o) Corporate Structure. The corporate structure of the Loan
Parties after giving effect to the Hardee's Acquisition shall be satisfactory to
the Lenders and the Agent shall have received a corporate structure chart with
respect to the Borrower and all of its Subsidiaries (certified by an Authorized
Officer of the Borrower) after giving effect to the Hardee's Acquisition.
(p) Financial Statements. The Agent shall have received (i)
the audited financial statements of the Company for the fiscal year ended
December 31, 1996 and the unaudited financial statements of the Company for the
fiscal period ended on March 31, 1997 and (ii) the audited financial statements
of the Borrower and its Subsidiaries for the fiscal year ended January 27, 1997
and the unaudited financial statements of the Borrower and its Subsidiaries for
the fiscal period ended on May 19, 1997.
(q) Funded Debt and Capitalization. The aggregate amount of
the Loans borrowed under this Agreement on the Closing Date shall not exceed
$225,000,000,
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and the Total Revolving Loan Commitment minus the aggregate principal amount of
the Revolving Loans outstanding on the Closing Date after the Borrowings of the
initial Loans hereunder minus the amount of any L/C Obligations then outstanding
including any Letters of Credit to be issued on the Closing Date shall equal at
least $10,000,000. The Agent shall have received evidence satisfactory to it
that the Borrower shall have received cash proceeds from the issuance of Capital
Stock of the Borrower (other than Redeemable Stock) on or within 30 days prior
to the Closing Date in an amount not less than $150,000,000 net of all brokerage
commissions, underwriting fees and discounts and all other fees and expenses
related to the issuance thereof (the "Initial Equity Issuance") and that at
least $150,000,000 of such funds have been applied to the consummation of the
Hardee's Acquisition and the payment of the Transaction Costs.
(r) Existing Indebtedness. The Agent shall have received
evidence satisfactory to the Agent and the Lenders that, after giving effect to
the consummation of the Transactions, (i) the Borrower and its Subsidiaries
shall not be liable for or have outstanding any Indebtedness which is of the
type of Indebtedness which would appear as a liability on (or would be required
to appear as a liability on) the consolidated balance sheet of the Borrower (and
not of the type required solely to be included in the footnotes thereto) and
which Indebtedness shall include, without limitation, Indebtedness for borrowed
money and Capitalized Lease Obligations, other than (A) the Loans outstanding
hereunder as contemplated by Section 4.1(q) and (B) Indebtedness set forth on
Schedule 7.2 (collectively, the "Surviving Debt"), the aggregate outstanding
principal amount of which shall not exceed $100,000,000 as of the Closing Date,
and (ii) the Borrower, the Company and each of their respective Subsidiaries
shall have paid in full all other Indebtedness of the Borrower, the Company and
their respective Subsidiaries existing prior to the making of the initial Loans
hereunder (all of the foregoing Indebtedness described in the foregoing clause
(i) and (ii) referred to collectively as "Existing Debt"). The Agent shall be
satisfied that the execution and delivery of, and the performance by each of the
Borrower, the Company and their respective Subsidiaries of its respective
obligations under, each Transaction Document to which it is a party and
consummation of the Transactions does not violate, conflict with or cause a
default under any document or instrument evidencing Existing Debt, other than
Existing Debt being repaid on the Closing Date. The Agent shall have received
(i) payoff and lien termination and release agreements, in form and substance
satisfactory to the Agent, from each creditor of the Borrower, the Company and
their respective Subsidiaries with respect to Existing Debt other than Surviving
Debt, and (ii) such Form UCC-3 (or its equivalent), intellectual property lien
releases in recordable form in all applicable jurisdictions, and other lien and
mortgage release and termination agreements, evidence of release of federal and
state tax liens, all in form and substance satisfactory to the Agent, as the
Agent shall request, duly executed by the appropriate Person in favor of which
such Liens were granted.
(s) Environmental Matters. The Agent shall (i) be satisfied
that neither the Borrower, the Company, any of their respective Subsidiaries nor
any other Loan Party is subject to any present or contingent liability deemed
material by the Agent in its reasonable
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judgment in connection with any past or present treatment, storage, recycling,
disposal or release or threatened release, at any property location regardless
of whether owned or operated by the Borrower, the Company or any of their
respective Subsidiaries or any other Loan Party, of any Materials of
Environmental Concern or in connection with any Environmental Law or other
health or safety laws or regulations, and that their operations taken as a whole
comply in all material respects (in the Agent's reasonable judgment) with all
Environmental Laws or other health or safety laws or regulations, (ii) be
satisfied that neither the Borrower, the Company, any of their respective
Subsidiaries, nor any other Loan Party nor any property owned or operated by any
such Person is the subject of any federal or state investigation evaluating
whether any remedial action, involving a material expenditure (in the opinion of
the Agent) is needed to respond to any release or other presence of Materials of
Environmental Concern and (iii) have received a list of all of the properties
operated, owned or leased by the Borrower, the Company and each of their
respective Subsidiaries as to which Phase I environmental audit reports have
been completed within ten (10) years prior to the Closing Date and have received
copies of those Phase I audit reports which identify, or which recommend a
subsequent Phase II investigation as to, any material environmental health or
safety violations, hazards or potential liabilities relating to the properties
and business of the Borrower, the Company, each of their respective
Subsidiaries, the other Loan Parties (if applicable) and each of their
Environmental Affiliates of which the Borrower, the Company, or any of their
respective Subsidiaries have knowledge.
(t) Funds Flow Instructions. The Agent and the Lenders shall
have received detailed instructions satisfactory to them describing the funds
flow in connection with the Transactions on the Closing Date.
(u) Fees and Expenses. The Agent shall have received, for its
account and for the account of each Lender, as applicable, all Fees and other
fees and expenses due and payable hereunder on or before the Closing Date,
including, without limitation, the reasonable fees and expenses accrued through
the Closing Date, of Skadden, Arps, Slate, Meagher & Flom Illinois and any other
counsel retained by the Agent.
(v) Consents, Licenses, Approvals; Compliance with Laws. All
consents, licenses, orders, permits, authorizations, validations, certificates,
filings and approvals (collectively, "Consents"), if any, required in connection
with the execution, delivery and performance by the Seller, the Borrower, the
Company or any of their respective Subsidiaries, and the validity and
enforceability of the Transaction Documents, or in connection with any of the
transactions related thereto, including, without limitation, all shareholder
Consents and all Consents required by any federal, state, local regulatory or
governmental authority including, without limitation, all Consents required
pursuant to the Hart-Scott-Rodino Act, shall have been obtained or made and
shall be in full force and effect and copies thereof shall in each case have
been delivered to the Agent. The waiting period with respect to the Hardee's
Acquisition under the Hart-Scott-Rodino Act has been terminated or expired. The
Borrower shall have delivered to the Agent such evidence as the Agent shall have
requested, evidencing
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compliance by the Borrower, the Company and the other Loan Parties with all
applicable laws, rules and regulations before and after giving effect to the
Transactions (including, without limitation, all applicable corporate and
securities laws and all ERISA, environmental and health and safety laws, rules
and regulations).
(w) Management Contracts. The Borrower shall deliver to the
Agent and each Lender copies of each written agreement that it, the Company or
any of their respective Subsidiaries has or contemplates entering into with its
officers or other members of management as requested by the Agent certified by
an officer of the Borrower, and each such contract shall be satisfactory in form
and substance to the Agent.
(x) Franchise Agreements. The Borrower shall deliver to the
Agent copies of representative forms of Franchise Agreements, which represent
the various forms of all Franchise Agreements to which the Borrower, the Company
or any of their respective Subsidiaries as of the Closing Date is the franchisor
or licensor in each case certified by the general counsel of the Borrower.
(y) No Material Adverse Change. No event, act or condition
shall have occurred after December 31, 1996 that has had a Material Adverse
Effect.
(z) Consummation of Hardee's Acquisition. The Hardee's
Acquisition shall have been consummated in accordance with the terms of the
Acquisition Documents.
(aa) Projections. The Agent shall have received projections
prepared by the Borrower demonstrating the projected consolidated financial
condition and results of operations of the Borrower and its Subsidiaries after
giving effect to the Transactions, for the period commencing on the Closing Date
and ending on the Final Maturity Date, which projections shall be accompanied by
a written statement of the assumptions underlying the projections, and all of
the foregoing shall be satisfactory to the Lenders.
(bb) Additional Matters. The Agent shall have received such
other certificates, opinions, documents and instruments relating to the
Transactions as may have been reasonably requested by the Agent or any Lender,
and all corporate and other proceedings and all other documents (including,
without limitation, all documents referred to herein and not appearing as
exhibits hereto) and all legal matters in connection with the Transactions shall
be satisfactory in form and substance to the Lenders.
Section 4.2 Conditions Precedent to All Loans. The obligation
of each Lender to make any Loan (including the initial Loans made on the Closing
Date) and of the Issuing Bank to issue any Letter of Credit is subject to the
satisfaction on the date such Loan is made or such Letter of Credit is Issued of
the following conditions precedent:
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(a) Representations and Warranties. The representations and
warran- ties contained herein and in the other Loan Documents (other than
representations and warranties which expressly speak only as of a different
date) shall be true and correct in all material respects on such date both
before and after giving effect to the making of such Loans or the Issuance of
such Letter of Credit.
(b) No Default or Event of Default. No Default or Event of
Default shall have occurred and be continuing on such date either before or
after giving effect to the making of such Loans or the Issuance of such Letter
of Credit.
(c) No Injunction. No law or regulation shall have been
adopted, no order, judgment or decree of any governmental authority shall have
been issued, and no litigation shall be pending or threatened, which in the
reasonable judgment of the Lenders would enjoin, prohibit or restrain, or impose
or result in the imposition of any material adverse condition upon, the making
or repayment of the Loans, the Issuance of such Letter of Credit or the
reimbursement of any amounts with respect thereto or the consummation of the
Transactions.
(d) No Material Adverse Change. No event, act or condition
shall have occurred after December 31, 1996 which, in the judgment of the
Required Lenders, has had or could have a Material Adverse Effect.
(e) Notice of Borrowing or Issuance. The Agent or the Issuing
Bank shall have received a fully executed Notice of Borrowing or L/C
Application, as appropriate, in respect of the Loans to be made or Letters of
Credit to be Issued, respectively, on such date.
The acceptance of the proceeds of each Loan and of the Issuance of each
Letter of Credit shall constitute a representation and warranty by the Borrower
to the Agent and each of the Lenders that all of the conditions required to be
satisfied under this Section 4 in connection with the making of such Loan or the
Issuance of such Letter of Credit have been satisfied.
All of the Notes, certificates, agreements, legal opinions and other
documents and papers referred to in this Section 4, unless otherwise specified,
shall be delivered to the Agent for the account of each of the Lenders and,
except for the Notes, in sufficient counterparts for each of the Lenders, and
shall be satisfactory in form and substance to the Agent and each Lender in its
sole discretion.
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SECTION 5. REPRESENTATIONS AND WARRANTIES.
In order to induce the Lenders to enter into this Agreement and to
make the Loans and to induce the Issuing Bank to issue Letters of Credit, the
Borrower makes the following representations and warranties, which shall survive
the execution and delivery of this Agreement and the Notes and the making of the
Loans and the Issuance of the Letters of Credit:
Section 5.1 Corporate Status. Each Loan Party (i) is a duly organized
and validly existing corporation in good standing under the laws of the
jurisdiction of its incorporation, (ii) has the corporate power and authority to
own its property and assets and to transact the business in which it is engaged
or presently proposes to engage and (iii) has duly qualified and is authorized
to do business and is in good standing as a foreign corporation in every
jurisdiction in which it owns or leases real property or in which the nature of
its business requires it to be so qualified, except in the case of clause (iii),
where the failure to so qualify, individually or in the aggregate, could not
have a Material Adverse Effect.
Section 5.2 Corporate Power and Authority. Each Loan Party has the
corporate power and authority to execute, deliver and carry out the terms and
provisions of each of the Transaction Documents to which it is a party and has
taken all necessary corporate action to authorize the execution, delivery and
performance by it of such Transaction Documents. Each Loan Party has duly
executed and delivered each such Transaction Document, and each such Transaction
Document constitutes its legal, valid and binding obligation, enforceable in
accordance with its terms.
Section 5.3 No Violation. Neither the execution, delivery or
performance by any Loan Party of the Transaction Documents to which it is a
party, nor compliance by it with the terms and provisions thereof nor the
consummation of the Transactions, (i) will contravene any applicable provision
of any law, statute, rule, regulation, order, writ, injunction or decree of any
court or governmental instrumentality or (ii) will conflict or be inconsistent
with or result in any breach of, any of the terms, covenants, conditions or
provisions of, or constitute a default under, or result in the creation or
imposition of (or the obligation to create or impose) any Lien (except pursuant
to the Security Documents) upon any of the property or assets of any Loan Party
pursuant to the terms of any indenture, mortgage, deed of trust, lease,
agreement or other instrument to which such Loan Party is a party or by which it
or any of its property or assets is bound or to which it may be subject, or
(iii) will violate any provision of the Certificate of Incorporation or By-Laws
(or other relevant formation documents) of any Loan Party.
Section 5.4 Litigation. There are no actions, suits, governmental
investigations, arbitrations or proceedings pending or threatened (i) with
respect to any of the Transactions or Transaction Documents or (ii) that could,
individually or in the aggregate, result in a Material Adverse Effect.
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Section 5.5 Financial Statements; Financial Condition; etc. Each of
the financial statements delivered pursuant to Sections 4.1(l) and 4.1(p) were
prepared in accordance with GAAP consistently applied and fairly present the
financial condition and the results of operations of the entities covered
thereby on the dates and for the periods covered thereby, except as disclosed in
the notes thereto and, with respect to interim financial statements, subject to
normally recurring year-end adjustments. No Loan Party has any material
liability (contingent or otherwise) not reflected in such financial statements
or in the notes thereto.
Section 5.6 Solvency. On the Closing Date and at all times after the
Closing Date, after giving effect to the Transactions, each Loan Party is and
will be Solvent.
Section 5.7 Projections. The projections delivered pursuant to
Section 4.1(aa) have been prepared on the basis of the assumptions accompanying
them, and such projections and assumptions, as of the date of preparation
thereof and as of the Closing Date, are reasonable and represent the Borrower's
good faith estimate of its future financial performance, it being understood
that nothing contained in this Section shall constitute a representation or
warranty that such future financial performance or results of operations will in
fact be achieved.
Section 5.8 Material Adverse Change. Since December 31, 1996, there
has occurred no event, act, condition or liability which has had, or could have,
a Material Adverse Effect.
Section 5.9 Use of Proceeds; Margin Regulations. All proceeds of each
Loan, and each Letter of Credit, will be used by the Borrower only in accordance
with the provisions of Section 2.20. No part of the proceeds of any Loan, or any
Letter of Credit, will be used by the Borrower to purchase or carry any Margin
Stock or to extend credit to others for the purpose of purchasing or carrying
any Margin Stock. Neither the making of any Loan, nor the Issuance of any Letter
of Credit, nor the use of the proceeds thereof will violate or be inconsistent
with the provisions of Regulations G, T, U or X of the Federal Reserve Board.
Following the application of the proceeds of each Loan, less than 25% of the
value (as determined by any reasonable method) of the assets of the Borrower and
its Subsidiaries (on a consolidated and an unconsolidated basis) have been and
will continue to be, represented by Margin Stock.
Section 5.10 Governmental and Other Approvals. No order, consent,
approval, license, authorization, or validation of, or filing, recording or
registration with, or exemption by, any governmental or public body or
authority, or any subdivision thereof, or any other Person, is required to
authorize, or is required in connection with (i) the execution, delivery and
performance of any Transaction Document or the consummation of any of the
Transactions or (ii) the legality, validity, binding effect or enforceability of
any Transaction
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Document or the exercise by the Agent or any Lender of any of its rights under
any Loan Document, except those listed on Schedule 5.10 that have already been
duly made or obtained and remain in full force and effect and except for the
filing of financing statements pursuant to the Security Documents. All
applicable waiting periods including, without limitation, those under the
Hart-Scott-Rodino Act in connection with each Permitted Acquisition and the
other transactions contemplated thereby 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.
Section 5.11 Security Interests and Liens. The Security Documents
create, as security for the Obligations, valid and enforceable security
interests in and Liens on all of the Collateral, in favor of the Agent for the
ratable benefit of the Lenders, and subject to no other Liens (other than Liens
expressly permitted by Section 7.3 hereof). Upon the satisfaction of the
conditions precedent described in Sections 4.1(k) and 4.1(n), such security
interests in and Liens on the Collateral shall be superior to and prior to the
rights of all third parties (except as disclosed on Schedule 5.11), and no
further recordings or filings are or will be required in connection with the
creation, perfection or enforcement of such security interests and Liens, other
than the filing of continuation statements in accordance with applicable law.
Section 5.12 Tax Returns and Payments. Each Loan Party has filed all
tax returns required to be filed by it and has paid all taxes and assessments
payable by it which have become due, other than (i) those not yet delinquent or
those that are reserved against in accordance with GAAP which are being
diligently contested in good faith by appropriate proceedings or (ii) where the
failure to so pay has not resulted and could not reasonably be expected to
result in liability in excess of $1,000,000 in the aggregate for all of the Loan
Parties.
Section 5.13 ERISA. Neither the Borrower nor any of its Subsidiaries
have any Plans other than those listed on Schedule 5.13. No accumulated funding
deficiency (as defined in Section 412 of the Code or Section 302 of ERISA) or
Reportable Event has occurred with respect to any Plan. There are no Unfunded
Benefit Liabilities under any Plan. The Borrower and each member of its ERISA
Controlled Group have complied with the requirements of Section 515 of ERISA
with respect to each Multiemployer Plan and is not in "default" (as defined in
Section 4219(c)(5) of ERISA) with respect to payments to a Multiemployer Plan.
The aggregate potential total withdrawal liability, and the aggregate potential
annual withdrawal liability payments of the Borrower and the members of its
ERISA Controlled Group as determined in accordance with Title IV of ERISA as if
the Borrower and the members of its ERISA Controlled Group had completely
withdrawn from all Multiemployer Plans is not greater than $1,000,000. To the
best knowledge of the Borrower and each member of its ERISA Controlled Group, no
Multiemployer Plan is or is likely to be in reorganization (as defined in
Section 4241 of ERISA or Section 418 of the Code) or is insolvent (as defined in
Section 4245 of ERISA). No material liability to the PBGC (other
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than required premium payments), the Internal Revenue Service, any Plan or any
trust established under Title IV of ERISA has been, or is expected by the
Borrower or any member of its ERISA Controlled Group to be, incurred by the
Borrower or any member of its ERISA Controlled Group. Neither the Borrower nor
any member of its ERISA Controlled Group has any contingent liability with
respect to any post-retirement benefit under any "welfare plan" (as defined in
Section 3(1) of ERISA), other than liability for continuation coverage under
Part 6 of Title I of ERISA and other than contingent liabilities under the
Company's Retiree Medical Insurance Plan, and the aggregate present value of all
post-retirement benefit liabilities of the Borrower and its Subsidiaries under
the Company's Retiree Medical Insurance Plan as of the Closing Date does not
exceed $4,800,000. No lien under Section 412(n) of the Code or 302(f) of ERISA
or requirement to provide security under Section 401(a)(29) of the Code or
Section 307 of ERISA has been or is reasonably expected by the Borrower or any
member of its ERISA Controlled Group to be imposed on the assets of the Borrower
or any member of its ERISA Controlled Group.
Section 5.14 Investment Company Act; Public Utility Holding Company
Act. No Loan Party is (x) an "investment company" or a company "controlled" by
an "investment company," within the meaning of the Investment Company Act of
1940, as amended, (y) a "holding company" or a "subsidiary company" of a
"holding company" or an "affiliate" of either a "holding company" or a
"subsidiary company" within the meaning of the Public Utility Holding Company
Act of 1935, as amended, or (z) subject to any other federal or state law or
regulation which purports to restrict or regulate its ability to borrow money.
Section 5.15 Closing Date Transactions. On the Closing Date and
immediately prior to the making of the initial Loans hereunder, the Transactions
(other than the making of the Loans) intended to be consummated on the Closing
Date will have been consummated in accordance with the terms of the relevant
Transaction Documents and in accordance with all applicable laws. All consents
and approvals of, and filings and registrations with, and all other actions by,
any Person required in order to make or consummate such Transactions have been
obtained, given, filed or taken and are or will be in full force and effect.
Section 5.16 Representations and Warranties in Transaction Documents.
All representations and warranties made by any Loan Party in the Transaction
Documents (other than the Loan Documents), and, to the best of the Borrower's
knowledge, all representations made by each other Person in such Transaction
Documents, are true and correct in all material respects. None of such
representations and warranties is inconsistent in any material respect with the
representations and warranties of any Loan Party made herein or in any other
Loan Document.
Section 5.17 True and Complete Disclosure. All factual information
(taken as a whole) furnished by or on behalf of any Loan Party in writing to the
Agent or any Lender on or prior to the Closing Date, for purposes of or in
connection with this Agreement or any of the Transactions is, and all other such
factual information (taken as a whole) hereafter
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furnished by or on behalf of any Loan Party in writing to the Agent or any
Lender will be, true and accurate in all material respects on the date as of
which such information is dated or furnished and not incomplete by omitting to
state any material fact necessary to make such information (taken as a whole)
not misleading at such time. As of the Closing Date, there are no facts, events
or conditions known to any Loan Party which, individually or in the aggregate,
have or could be expected to have a Material Adverse Effect.
Section 5.18 Corporate Structure; Capitalization. Schedule 5.18
hereto sets forth as of the Closing Date, both before and after giving effect to
the Transactions to be consummated on the Closing Date, the jurisdiction of
incorporation of the Company, each of its Subsidiaries, each other Loan Party
and each Subsidiary of such Loan Party, the number of authorized and issued
shares of capital stock of the Company and each of its Subsidiaries and of each
other Loan Party and each Subsidiary of such Loan Party, the par value thereof
and the registered owner(s) thereof. All of such stock has been duly and validly
issued and is fully paid and non-assessable and is owned by such Loan Party free
and clear of all Liens. Except as disclosed in Schedule 5.18, neither any Loan
Party nor any such Subsidiary has outstanding any securities convertible into or
exchangeable for its capital stock nor does any Loan Party or any such
Subsidiary have outstanding any rights to subscribe for or to purchase, or any
options for the purchase of, warrants or any agreements providing for the
issuance (contingent or otherwise) of, or any calls, commitments or claims of
any character relating to, its capital stock.
Section 5.19 Environmental Matters. (a) Except as set forth in
Schedule 5.19, (i) each of the Loan Parties and their Environmental Affiliates
are in compliance with all applicable Environmental Laws except where
noncompliance, individually or in the aggregate, could not have a Material
Adverse Effect, (ii) each of the Loan Parties and their Environmental Affiliates
have all Environmental Approvals required to operate their businesses as
presently conducted or as reasonably anticipated to be conducted except where
the failure to obtain any such Environmental Approval, individually or in the
aggregate, could not have a Material Adverse Effect, (iii) none of the Loan
Parties nor any of their Environmental Affiliates has received any communication
(written or oral), whether from a governmental authority, citizens group,
employee or otherwise, that alleges that such Loan Party or Environmental
Affiliate is not in full compliance with all Environmental Laws and where such
noncompliance, individually or in the aggregate, could have a Material Adverse
Effect, and (iv) to the Borrower's best knowledge after due inquiry, there are
no circumstances that may prevent or interfere with such full compliance in the
future except where such noncompliance, individually or in the aggregate, could
not have a Material Adverse Effect.
(b) Except as set forth in Schedule 5.19, there is no
Environmental Claim pending or threatened against any Loan Party or its
Environmental Affiliate, which, individually or in the aggregate, could have a
Material Adverse Effect.
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(c) Except as set forth in Schedule 5.19, there are no past or
present actions, activities, circumstances, conditions, events or incidents,
including, without limitation, the release, emission, discharge or disposal of
any Material of Environmental Concern, that could form the basis of any
Environmental Claims against any of the Loan Parties or any of their
Environmental Affiliates, which Environmental Claims, individually or in the
aggregate, could have a Material Adverse Effect.
(d) Schedule 5.19 sets forth a list of all of the properties
operated, owned or leased by the Borrower, the Company and each of their
respective Subsidiaries as to which Phase I environmental audit reports have
been completed as of the Closing Date and the Borrower has delivered copies of
those Phase I audit reports which identify, or which recommend a subsequent
Phase II investigation as to, any material environmental, health or safety
violations, hazards or potential liabilities relating to the properties and
business of the Borrower, the Company, each of their respective Subsidiaries,
the other Loan Parties (if applicable) and each of their Environmental
Affiliates of which the Borrower, the Company, or any of their respective
Subsidiaries have knowledge.
Section 5.20 Intellectual Property. Each of the Loan Parties owns or
has the valid right to use all patents, trademarks, service marks, trade names,
copyrights, trade secrets and other intangible rights, free and clear of all
Liens, which are used in or necessary for the operation of its business, and
Schedule V to the Borrower Security Agreement and Schedule V to the Subsidiary
Security Agreement together set forth a complete and accurate list thereof with
respect to each Loan Party as of the Closing Date, including all applications
and registrations thereof and all license agreements to or from third parties
relating thereto (the "Intellectual Property"). Each Loan Party is the record
owner of all registrations and applications which it owns and all registrations
for Intellectual Property are valid and enforceable. To the best of each Loan
Party's knowledge, no service, product, process, method, substance, part or
other material presently offered, sold or employed by any Loan Party infringes
upon or dilutes any patent, trademark, service mark, trade name, copyright,
license or other right of any other Person, and no such claims have been made by
any other Person against any Loan Party. There is no pending or, to the best of
each Loan Party's knowledge, threatened claim or litigation against or affecting
any Loan Party contesting its rights to own or use any Intellectual Property or
the validity or enforceability thereof.
Section 5.21 Ownership of Property; Restaurants. Schedule 5.21 sets
forth all the real property owned or leased by the Loan Parties as of the
Closing Date and identifies the street address, the current owner (and current
record owner, if different) and whether such property is leased or owned. The
Loan Parties have good and marketable fee simple title to or valid leasehold
interests in all of such real property and good title to all of their personal
property subject to no Lien of any kind except Liens permitted hereby. Schedule
5.21 also sets forth a list of each Restaurant and the street address thereof
which is owned or operated as of the Closing Date by any Loan Party or any of
its Subsidiaries. The Loan Parties enjoy peaceful and undisturbed possession
under all of their respective leases.
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Section 5.22 No Default. No Loan Party is in default under or
with respect to any Transaction Document or any other agreement, instrument or
undertaking to which it is a party or by which it or any of its property is
bound in any respect which could result in a Material Adverse Effect. No Default
or Event of Default exists.
Section 5.23 Licenses, etc. The Loan Parties have obtained and hold
in full force and effect, all franchises, licenses, permits, certificates,
authorizations, qualifications, accreditations, easements, rights of way and
other rights, consents and approvals which are necessary for the operation of
their respective businesses as presently conducted.
Section 5.24 Compliance with Law. Each Loan Party is in compliance
with all laws, rules, regulations, orders, judgments, writs and decrees except
where such non-compliance, individually or in the aggregate, could not have a
Material Adverse Effect.
Section 5.25 No Burdensome Restrictions. No Loan Party is a party to
any agreement or instrument or subject to any other obligation or any charter or
corporate restriction or any provision of any applicable law, rule or regulation
which, individually or in the aggregate, could have a Material Adverse Effect.
Section 5.26 Brokers' Fees. Except as set forth on Schedule 5.26,
none of the Loan Parties has any obligation to any Person in respect of any
finder's, brokers, investment banking or other similar fee in connection with
any of the Transactions.
Section 5.27 Labor Matters. Except as set forth on Schedule 5.27,
there are no collective bargaining agreements or Multiemployer Plans covering
the employees of the Company, any of its Subsidiaries or any of the Loan
Parties, and none of such Persons has suffered any strikes, walkouts, work
stoppages or other material labor difficulty within the last five years. No
proceedings are pending against the Borrower or any of its Subsidiaries before
the INS which could reasonably be expected to have a Material Adverse Effect.
Section 5.28 Indebtedness of the Borrower and Its Subsidiaries. Set
forth on Schedule 5.28 hereto is a complete and accurate list of all
Indebtedness of the Borrower, the Company and each of their respective
Subsidiaries existing as of the Closing Date (other than Surviving Debt),
showing the principal amount outstanding thereunder as of the Closing Date.
Section 5.29 Other Agreements. Schedule 5.29 sets forth a complete
and accurate list as of the Closing Date of (i) all joint venture and
partnership agreements to which the Borrower, the Company or any of their
Subsidiaries is a party, and (ii) all covenants not to compete restricting the
Borrower, the Company or any of their Subsidiaries to which the Borrower, the
Company or any of their Subsidiaries is a party or by which the Borrower, the
Company or any of their Subsidiaries is bound.
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Section 5.30 Immaterial Subsidiaries. The Subsidiaries of the
Borrower designated as Immaterial Subsidiaries on the Closing Date are set forth
on Schedule 5.30. The assets of each Subsidiary of the Borrower designated as an
Immaterial Subsidiary by the Borrower do not exceed $1,000,000 and the assets of
all of the Subsidiaries of the Borrower designated as Immaterial Subsidiaries by
the Borrower do not in the aggregate exceed $7,000,000, in each case as
determined in accordance with GAAP.
Section 5.31 Franchise Agreements and Franchisees. None of the
Franchise Agreements to which the Borrower or any of its Subsidiaries is a party
as a franchisor or a licensor prohibit or restrict in any manner the assignment
of such Franchise Agreement to the Agent for the benefit of the Secured Parties
or require any consent of any Person in connection with any such assignment.
Schedule 5.31 sets forth a complete and accurate list of each Person who is a
franchisee or licensee of the Borrower, the Company or any of their respective
Subsidiaries as of the Closing Date.
SECTION 6. AFFIRMATIVE COVENANTS.
The Borrower covenants and agrees that on and after the Closing Date
and until all of the Commitments of each of the Lenders have terminated, each of
the Letters of Credit has expired or been terminated, and the Obligations are
paid in full:
Section 6.1 Information Covenants. The Borrower will furnish to the
Agent, with sufficient copies for each Lender:
(a) Quarterly Financial Statements. Within 45 days after the
close of each of the first three (3) quarterly accounting periods in each fiscal
year of the Borrower, the consolidated balance sheet of the Borrower and its
Subsidiaries as at the end of such quarterly period and the related consolidated
statements of income and cash flow for such quarterly period and for the elapsed
portion of the fiscal year ended with the last day of such quarterly period, and
in each case setting forth comparative figures for the related periods in the
prior fiscal year.
(b) Annual Financial Statements. Within 90 days after the
close of each fiscal year of the Borrower, the consolidated balance sheet of the
Borrower and its Subsidiaries as at the end of such fiscal year and the related
consolidated statements of income and cash flow for such fiscal year, setting
forth comparative figures for the preceding fiscal year and, with respect to
such consolidated financial statements, certified without qualification by KPMG
Peat Marwick LLP or other independent certified public accountants of recognized
national standing reasonably acceptable to the Agent and the Required Lenders
and indicating that its audit of the consolidated financial statements of the
Borrower was conducted in accordance with generally accepted auditing standards.
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(c) Management Letters. Promptly after the Borrower's receipt
thereof, a copy of any "management letter" or other material report received by
the Borrower from its certified public accountants.
(d) Budgets. Within 60 days after the first day of each fiscal
year of the Borrower, a budget and financial forecast of results of operations
and sources and uses of cash (in form reasonably satisfactory to the Agent)
prepared by the Borrower for such fiscal year, accompanied by a written
statement of the assumptions used in connection therewith, together with a
certificate of the chief financial officer of the Borrower to the effect that
such budget and financial forecast and, to the best of his knowledge,
assumptions, are reasonable and represent the Borrower's good faith estimate of
its future financial requirements and performance. The financial statements
required to be delivered pursuant to clauses (a) and (b) above shall be
accompanied by a comparison of the actual financial results set forth in such
financial statements to those contained in the forecasts delivered pursuant to
this clause (d) together with an explanation of any material variations from the
results anticipated in such forecasts.
(e) Officer's Certificates. At the time of the delivery of the
financial statements under clauses (a) and (b) above, a certificate of the chief
financial officer of the Borrower which certifies (x) that such financial
statements fairly present the financial condition and the results of operations
of the Borrower and its Subsidiaries on the dates and for the periods indicated,
subject, in the case of interim financial statements, to normally recurring
year-end adjustments, and that such financial statements were prepared in
accordance with GAAP and (y) that such officer has reviewed the terms of the
Loan Documents and has made, or caused to be made under his or her supervision,
a review in reasonable detail of the business and condition of the Borrower and
its Subsidiaries during the accounting period covered by such financial
statements, and that as a result of such review such officer has concluded that
no Default or Event of Default has occurred during the period commencing at the
beginning of the accounting period covered by the financial statements
accompanied by such certificate and ending on the date of such certificate or,
if any Default or Event of Default has occurred, specifying the nature and
extent thereof and, if continuing, the action the Borrower proposes to take in
respect thereof (the "Compliance Certificate"). Such certificate shall set forth
the calculations required to establish whether the Borrower was in compliance
with the provisions of Sections 6.11, 6.12, 7.1, 7.2, 7.3, 7.7, 7.8 and 7.18
during and as at the end of the accounting period covered by the financial
statements accompanied by such certificate.
(f) Notice of Default. Promptly and in any event within one
Business Day after any Loan Party obtains knowledge thereof, notice (i) of the
occurrence of any Default or Event of Default together with a certificate of an
Authorized Officer of the Borrower specifying the nature and period of existence
thereof and the Borrower's proposed response thereto and (ii) that any holder of
Indebtedness of the Borrower or any Subsidiary of the Borrower having an
outstanding principal balance exceeding $5,000,000 has given any
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written notice to the Borrower or any Subsidiary of the Borrower or taken any
other action with respect to a claimed default or event or condition of the type
referred to in Section 8.1(d) specifying (A) the nature and period of existence
of any such claimed default, condition or event, (B) the notice given or action
taken by such Person in connection therewith, and (C) the Borrower's proposed
response thereto.
(g) Notice of Litigation. Promptly after (i) the occurrence
thereof, notice of the institution of, or any material development in, any
action, suit, litigation, proceeding, investigation or arbitration, before any
court or arbitrator or any governmental or administrative body, agency or
official, against the Borrower, any of its Subsidiaries or any material property
of any thereof which, individually or in the aggregate, could have a Material
Adverse Effect, or (ii) actual knowledge thereof, notice of the threat of any
such action, suit, proceeding, investigation or arbitration.
(h) ERISA.
(i) As soon as possible and in any event within 10
days after the Borrower or any member of its ERISA Controlled Group
knows, or has reason to know, that:
(A) any Termination Event with respect to a Plan
has occurred or will occur, or
(B) any condition exists with respect to a Plan
which presents a material risk of termination of the Plan or imposition
of an excise tax or other liability on the Borrower or any member of
its ERISA Controlled Group, or
(C) the Borrower or any member of its ERISA
Controlled Group has applied for a waiver of the minimum funding
standard under Section 412 of the Code or Section 302 of ERISA, or
(D) the Borrower or any member of its ERISA
Controlled Group has engaged in a "prohibited transaction," as defined
in Section 4975 of the Code or as described in Section 406 of ERISA,
that is not exempt under Section 4975 of the Code and Section 408 of
ERISA, or
(E) the aggregate present value of the Unfunded
Benefit Liabilities under all Plans has in any year increased by
$500,000 or to an amount in excess of $1,000,000, or
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(F) any condition exists with respect to a
Multiemployer Plan which presents a material risk of a partial or
complete withdrawal (as described in Section 4203 or 4205 of ERISA) by
the Borrower or any member of its ERISA Controlled Group from a
Multiemployer Plan, or
(G) the Borrower or any member of its ERISA
Controlled Group is in "default" (as defined in Section 4219(c)(5) of
ERISA) with respect to payments to a Multiemployer Plan, or
(H) a Multiemployer Plan is in "reorganization"
(as defined in Section 418 of the Code or Section 4241 of ERISA) or is
"insolvent" (as defined in Section 4245 of ERISA), or
(I) the potential withdrawal liabili- ty (as
determined in accordance with Title IV of ERISA) of the Borrower and
the members of its ERISA Controlled Group with respect to all
Multiemployer Plans has in any year increased by $500,000 or to an
amount in excess of $1,000,000, or
(J) there is an action brought against the
Borrower or any member of its ERISA Controlled Group under Section 502
of ERISA with respect to its failure to comply with Section 515 of
ERISA,
a certificate of the president or chief financial officer of the Borrower
setting forth the details of each of the events described in clauses (A) through
(J) above as applicable and the action which the Borrower or the applicable
member of its ERISA Controlled Group proposes to take with respect thereto,
together with a copy of any notice or filing from the PBGC or which may be
required by the PBGC or other agency of the United States government with
respect to each of the events described in clauses (A) through (J) above, as
applicable.
(ii) As soon as possible and in any event within two
Business Days after the receipt by the Borrower or any member of its
ERISA Controlled Group of a demand letter from the PBGC notifying the
Borrower or such member of its ERISA Controlled Group of its final
decision finding liability and the date by which such liability must be
paid, a copy of such letter, together with a certificate of the
president or chief financial officer of the Borrower setting forth the
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action which the Borrower or such member of its ERISA Controlled Group
proposes to take with respect thereto.
(i) SEC Filings. Promptly upon transmission thereof, copies of all
regular and periodic financial information, proxy materials and other
information, regular, periodic and special reports and registration statements,
if any, which any Loan Party shall file with the Securities and Exchange
Commission or any governmental agencies substituted therefore or which any Loan
Party shall send to its stockholders.
(j) Environmental. Promptly and in any event within two Business Days
after the existence of any of the following conditions, a certificate of an
Authorized Officer of the Borrower specifying in detail the nature of such
condition and the applicable Loan Party's or Environmental Affiliate's proposed
response thereto: (i) the receipt by any Loan Party or any of its Environmental
Affiliates of any communication (written or oral), whether from a governmental
authority, citizens group, employee or otherwise, that alleges that such Loan
Party or Environmental Affiliate is not in compliance with applicable
Environmental Laws and such noncompliance, individually or in the aggregate,
could have a Material Adverse Effect, (ii) any Loan Party or any of its
Environmental Affiliates shall obtain actual knowledge that there exists any
Environmental Claim pending or threatened against such Loan Party or such
Environmental Affiliate, which, individually or in the aggregate, could have a
Material Adverse Effect, or (iii) any release, emission, discharge or disposal
of any Material of Environmental Concern that could form the basis of any
Environmental Claim against any Loan Party or any of their Environmental
Affiliates, which Environmental Claim, individually or in the aggregate could
have a Material Adverse Effect.
(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 6.1.
(l) Other Information. From time to time, such other information or
documents (financial or otherwise) as any Lender may reasonably request.
Section 6.2 Books, Records and Inspections. The Borrower shall, and
shall cause each of its Subsidiaries to, keep proper books of record and account
in which full, true and correct entries in conformity with GAAP and all
requirements of law shall be made of all dealings and transactions in relation
to its business and activities. The Borrower shall, and shall cause each of its
Subsidiaries to, permit officers and designated representatives of any Lender to
visit and inspect any of the properties of the Borrower or any of its
Subsidiaries, and to examine the books of record and account of the Borrower or
any of its Subsidiaries, and discuss the affairs, finances and accounts of the
Borrower or any of its Subsidiaries with, and be advised as to the same by, its
and their officers and independent accountants, all upon
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reasonable notice and at such reasonable times as such Lender may desire;
provided that no such prior notice shall be required if an Event of Default has
occurred and is continuing.
Section 6.3 Maintenance of Insurance. The Borrower shall, and shall
cause each of its Subsidiaries to, (a) maintain with financially sound and
reputable insurance companies insurance on itself and its properties in at least
such amounts and against at least such risks as are customarily insured against
in the same general area by companies engaged in the same or a similar business
similarly situated, which insurance shall in any event not provide for
materially less coverage than the insurance in effect on the Closing Date and
(b) furnish to each Lender from time to time, upon written request, the policies
under which such insurance is issued, certificates of insurance and such other
information relating to such insurance as such Lender may request.
Section 6.4 Taxes. (a) The Borrower shall pay or cause to be paid, and
shall cause each of its Subsidiaries to pay or cause to be paid, when due, all
taxes, charges and assessments and all other lawful claims required to be paid
by the Borrower or such Subsidiaries, except as contested in good faith and by
appropriate proceedings diligently conducted, if adequate reserves have been
established with respect thereto in accordance with GAAP.
(b) The Borrower shall not, and shall not permit any of its
Subsidiaries to, file or consent to the filing of any consolidated tax return
with any Person (other than the Borrower and its Subsidiaries).
Section 6.5 Corporate Franchises. Except as permitted by Section 7.4
below, the Borrower shall, and shall cause each of its Subsidiaries to, do or
cause to be done, all things necessary to preserve and keep in full force and
effect its existence and its patents, trademarks, servicemarks, tradenames,
copyrights, franchises, licenses, permits, certificates, authorizations,
qualifications, accreditations, easements, rights of way and other rights,
consents and approvals except where the failure to so preserve any of the
foregoing (other than existence) could not, individually or in the aggregate,
result in a Material Adverse Effect.
Section 6.6 Compliance with Law. The Borrower shall, and shall cause
each of its Subsidiaries to, comply in all material respects with all applicable
laws, rules, statutes, regulations, decrees and orders of, and all applicable
restrictions imposed by, all governmental bodies, domestic or foreign, in
respect of the conduct of their business and the ownership of their property,
including, without limitation, ERISA and all Environmental Laws.
Section 6.7 Performance of Obligations. The Borrower shall, and shall
cause each of its Subsidiaries to, perform all of its obligations under the
terms of each mortgage, indenture, security agreement, debt instrument, lease,
undertaking and contract by which it or any of its properties is bound or to
which it is a party, except where the failure to perform
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such obligations individually or in the aggregate could not reasonably be
expected to have a Material Adverse Effect.
Section 6.8 Maintenance of Properties. The Borrower shall, and shall
cause each of its Subsidiaries to, ensure that its respective properties useful
in its respective business are kept in good repair, working order and condition,
normal wear and tear excepted.
Section 6.9 Compliance with Terms of Leaseholds. The Borrower shall and
shall cause each of its Subsidiaries to (a) make all payments and otherwise
perform all obligations in respect of all leases of the Borrower and each of its
Subsidiaries of real property, (b) keep all such leases that are useful or
material in the conduct of the business of the Borrower and its Subsidiaries
(such useful or material leases are hereinafter referred to as the "Material
Leases") in full force and effect, (c) not allow such Material Leases to lapse
or be terminated or any rights to renew such leases to be forfeited or
cancelled, and (d) notify the Agent of any default by any party with respect to
such Material Leases and cooperate with the Agent in all respects to cure any
such default.
Section 6.10 Compliance with Environmental Laws. The Borrower shall,
and shall cause each of its Subsidiaries and all lessees and other Persons
occupying its properties to (a) comply in all material respects, with all
Environmental Laws and Environmental Approvals applicable to its respective
operations and properties; (b) obtain and renew all Environmental Approvals
necessary for its respective operations and properties; and (c) conduct any
investigation, study, sampling and testing, and undertake any cleanup, removal,
remedial or other action necessary to remove and clean up all Materials of
Environmental Concern from any of its respective properties, in accordance with
the requirements of all Environmental Laws; provided, however, that neither the
Borrower nor any of its Subsidiaries shall be required to undertake any such
cleanup, removal, remedial or other action to the extent that its obligation to
do so is being contested in good faith and by proper proceedings and appropriate
reserves are being maintained with respect to such circumstances, unless the
Borrower or any of its Subsidiaries is subject to an order issued by any
governmental authority requiring the Borrower or such Subsidiary to undertake
any such cleanup, removal, remedial or other action, in which case this proviso
shall not apply.
Section 6.11 Subsidiary Guarantors. The Borrower shall cause each of
its Subsidiaries now or hereafter existing, formed or acquired (other than
Immaterial Subsidiaries) to at all times be and remain a party to the Guaranty,
the Subsidiary Security Agreement and, if any such Subsidiary owns any Equity
Interests in any Person (other than in HTB Restaurants, Inc. or Boston West,
L.L.C. and other than in an Immaterial Subsidiary), a Subsidiary Pledge
Agreement.
Section 6.12 Immaterial Subsidiaries. If (i) the assets of any
Subsidiary of the Borrower then designated as an Immaterial Subsidiary shall at
any time exceed $1,000,000, then the Borrower shall immediately provide notice
to the Agent thereof, and such Subsidiary
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shall immediately be deemed automatically to no longer be an Immaterial
Subsidiary or (ii) the aggregate amount of assets of all Subsidiaries of the
Borrower so designated as Immaterial Subsidiaries shall at any time exceed
$7,000,000, then the Borrower shall immediately provide notice to the Agent
thereof and notice of which of such previously designated Immaterial
Subsidiaries shall no longer be deemed to be Immaterial Subsidiaries so that the
aggregate amount of assets of all such Subsidiaries so designated as Immaterial
Subsidiaries does not exceed $7,000,000; provided that the Borrower may from
time to time designate additional Subsidiaries of the Borrower as Immaterial
Subsidiaries so long as the assets of any such Subsidiary do not exceed
$1,000,000 and so long as the aggregate amount of assets of all such
Subsidiaries so designated as Immaterial Subsidiaries does not exceed $7,000,000
(in each case as determined in accordance with GAAP).
Section 6.13 Environmental Reports. The Borrower shall cause to be
completed, within nine (9) months of the Closing Date, Phase I audit reports
with respect to each property owned, operated or leased by the Borrower or any
of its Subsidiaries, upon which a business or operation other than a Restaurant
has been conducted at any time during the five (5) years immediately preceding
the Closing Date and with respect to which a Phase I audit report has not been
completed in the ten (10) year period immediately preceding the Closing Date.
The Borrower shall deliver all such Phase I audit reports to the Agent which are
obtained pursuant to the preceding sentence which identify, or which recommend a
subsequent Phase II investigation as to, any material environmental, health or
safety violations, hazards or potential liabilities relating to the properties
and business of any Loan Party or any of their Environmental Affiliates.
Section 6.14 Letter of Credit Replacement. The Borrower shall use
commercially reasonable efforts to replace the Letter of Credit No. LASB-221686
issued by Bank of America National Trust & Savings Association (the "Existing
Letter of Credit") with a Letter of Credit issued by the Issuing Bank under this
Agreement within three months of the Closing Date and shall simultaneously
therewith cause the Existing Reimbursement Agreement to be terminated and all
other liens and obligations related thereto to be terminated and replaced.
Section 6.15 FFCA Debt. The Borrower shall (i) cause the aggregate
Indebtedness outstanding under that certain Loan Agreement dated as of December
18, 1996 among CBI Restaurants, Inc., Casa Bonita Incorporated and FFCA Mortgage
Corporation (the "CBI Loan Agreement") to be paid in full no later than August
1, 1997 and simultaneously therewith, shall cause all other obligations,
guaranties and liens granted or existing in connection therewith to be
terminated and released and (ii) on the date on which the Indebtedness described
in clause (i) shall be repaid, shall cause the stock certificates representing
all of the issued and outstanding Capital Stock of Casa Bonita Incorporated to
be delivered to the Agent with appropriate stock powers endorsed in blank and
shall cause to be delivered to the Agent such other Collateral Documents
together with opinions with respect thereto as reasonably requested by the
Agent.
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SECTION 7. NEGATIVE COVENANTS.
The Borrower covenants and agrees that on and after the Closing Date
until all of the Commitments of each Lender have terminated, each of the Letters
of Credit has expired or been terminated, and the Obligations are paid in full:
Section 7.1 Financial Covenants.
(a) Leverage Ratio. The Borrower shall not permit the Leverage
Ratio at any time during each fiscal quarter of the Borrower ended during each
period listed below to exceed the ratio set forth opposite such period:
Period Ratio
------ -----
Closing Date through July 15, 1998 3.00 to 1.00
July 16, 1998 through January 31, 2001 2.75 to 1.00
February 1, 2001 and thereafter 2.50 to 1.00
(b) Interest Coverage Ratio. The Borrower shall not permit the
ratio of Adjusted Consolidated EBITDA of the Borrower to Consolidated Interest
Expense of the Borrower for the period of four consecutive fiscal quarters of
the Borrower (taken as one accounting period) most recently ended during each
fiscal quarter of the Borrower ended during each period set forth below
(including Consolidated EBITDA and Consolidated Interest Expense of the Company
and its Subsidiaries for such period), to be less than the ratio set forth
opposite such period; provided that (i) for the period ending on November 3,
1997, Consolidated Interest Expense will be the product of (A) actual
Consolidated Interest Expense for the third fiscal quarter of the Borrower
ending November 3, 1997 multiplied by (B) 52/12, (ii) for the period ending on
January 26, 1998, Consolidated Interest Expense will be the product of (A)
actual Consolidated Interest Expense for the period from the first day of the
third fiscal quarter of the Borrower ending November 3, 1997 to the last day of
the fourth fiscal quarter of the Borrower ending January 26, 1998 multiplied by
(B) 52/24 and (iii) for the period ending on May 18, 1998, Consolidated Interest
Expense will be the product of (A) actual Consolidated Interest Expense for the
period from the first day of the third fiscal quarter of the Borrower ending
November 3, 1997 to the last day of the first fiscal quarter of the Borrower
ending May 18, 1998 multiplied by (B) 52/40:
Period Ratio
------ -----
October 1, 1997 through July 15, 1998 4.00 to 1.00
July 16, 1998 through January 31, 2001 4.50 to 1.00
February 1, 2001 and thereafter 5.00 to 1.00
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(c) Fixed Charge Coverage Ratio. The Borrower shall not permit
the ratio of Adjusted Consolidated EBITDA of the Borrower to Fixed Charges of
the Borrower for the period of four consecutive fiscal quarters of the Borrower
(taken as one accounting period) most recently ended during each fiscal quarter
of the Borrower ended during each period set forth below (including Consolidated
EBITDA and Fixed Charges of the Company and its Subsidiaries for such period),
to be less than the ratio set forth opposite such period; provided that (i) for
the period ending on November 3, 1997, Fixed Charges will be the product of (A)
actual Fixed Charges for the third fiscal quarter of the Borrower ending
November 3, 1997 multiplied by (B) 52/12, (ii) for the period ending on January
26, 1998, Fixed Charges will be the product of (A) actual Fixed Charges for the
period from the first day of the third fiscal quarter of the Borrower ending
November 3, 1997 to the last day of the fourth fiscal quarter of the Borrower
ending January 26, 1998 multiplied by (B) 52/24 and (iii) for the period ending
on May 18, 1998, Fixed Charges will be the product of (A) actual Fixed Charges
for the period from the first day of the third fiscal quarter of the Borrower
ending November 3, 1997 to the last day of the first fiscal quarter of the
Borrower ending May 18, 1998 multiplied by (B) 52/40:
Period Ratio
------ -----
October 1, 1997 through July 15, 1998 1.75 to 1.00
July 16, 1998 through January 31, 2001 2.00 to 1.00
February 1, 2001 and thereafter 2.25 to 1.00
(d) Minimum Consolidated EBITDA. The Borrower shall not permit
Adjusted Consolidated EBITDA of the Borrower for the period of four consecutive
fiscal quarters of the Borrower (taken as one accounting period) most recently
ended during each period set forth below (including Consolidated EBITDA of the
Company and its Subsidiaries for such period) to be less than the amount set
forth opposite such period:
Period Amount
------ ------
Closing Date through January 31, 1998 $100,000,000
February 1, 1998 through January 31, 1999 $125,000,000
February 1, 1999 through January 31, 2000 $140,000,000
February 1, 2000 and thereafter $150,000,000
(e) Adjusted Leverage Ratio. The Borrower shall not permit the
ratio of (i) Consolidated Total Debt (measured as of the end of each period set
forth below) plus the product of seven multiplied by Consolidated Rentals for
the period of four consecutive fiscal quarters of the Borrower (taken as one
accounting period) most recently ended during each period set forth below to
(ii) Consolidated EBITDAR for the period of four consecutive fiscal quarters of
the Borrower (taken as one accounting period) ended during each period set forth
below (including Consolidated Total Debt, Consolidated Rentals and Consolidated
EBITDAR
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of the Company and its Subsidiaries for such period) to exceed at any time
during each fiscal quarter of the Borrower ended during any period listed below,
the ratio set forth opposite such period:
Period Ratio
------ -----
Closing Date through July 15, 1998 4.60 to 1.00
July 16, 1998 through January 31, 2001 4.25 to 1.00
February 1, 2001 and thereafter 3.75 to 1.00
(f) Capital Expenditures. The Borrower shall not make or incur
and shall not permit any of its Subsidiaries to make or incur any Capital
Expenditures, except Capital Expenditures of the Borrower and its Subsidiaries
in any of the periods set forth below in an aggregate amount not in excess of
the maximum amount set forth below opposite such period:
Period Maximum Amount
------ --------------
Closing Date through January 31, 1998 $80,000,000
Each fiscal year of Borrower thereafter $120,000,000
provided that if the maximum amount set forth above for any period exceeds the
aggregate amount of Capital Expenditures made or incurred during such period,
then the maximum amount set forth above for the following period (but not any
subsequent periods) shall be increased by the amount of such excess.
(g) Consolidated Tangible Net Worth. The Borrower shall not
permit its Consolidated Tangible Net Worth at any time to be less than the sum
of (i) $300,000,000, plus (ii) 50% of cumulative Consolidated Net Income of the
Borrower and its Subsidiaries for all fiscal quarters of the Borrower ended
since the Closing Date 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 Equity Proceeds of any equity offering by
the Borrower.
Section 7.2 Indebtedness. The Borrower shall not, and shall not permit
any of its Subsidiaries to, create, incur, assume, suffer to exist or otherwise
become or remain directly or indirectly liable with respect to, any Indebtedness
other than:
(a) Indebtedness hereunder and under the other Loan Documents;
(b) Indebtedness outstanding on the Closing Date and set forth
on Schedule 7.2 hereto;
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(c) Indebtedness permitted under Sections 7.6(a) and 7.6(b);
(d) Indebtedness of the Borrower of the type described in
clause (vii) of the definition of Indebtedness to the extent permitted under
Section 7.14;
(e) Indebtedness with respect to (i) purchase money
Indebtedness incurred solely to finance Capital Expenditures permitted under
Section 7.1(f) and any extensions, renewals, refundings or refinancings thereof,
not in excess of $5,000,000 in the aggregate at any one time outstanding for all
such purchase money Indebtedness and all extensions, renewals, refundings and
refinancings thereof and (ii) Capitalized Leases permitted under Section 7.13
and any extensions, renewals, refundings or refinancings thereof so long as the
terms of any such Indebtedness with respect to Capitalized Leases is permitted
under Section 7.13; provided that (i) any such Indebtedness incurred pursuant to
this clause (e) and any such extensions, renewals, refundings or refinancings
thereof shall not exceed 85% of the lesser of the purchase price or the fair
market value of the asset so financed, (ii) at the time of such incurrence, no
Default or Event of Default has occurred and is continuing or would result from
such incurrence, and (iii) such Indebtedness has a scheduled maturity and is not
due on demand;
(f) any extensions, renewals, refundings and refinancings of
the Indebtedness described in clause (b) above, so long as the terms of any such
extension, renewal, refunding or refinancing Indebtedness, and of any agreement
entered into and of any instrument issued in connection therewith, are otherwise
permitted by the Loan Documents; provided further that the principal amount of
such Indebtedness shall not be increased above the principal amount thereof
outstanding immediately prior to such extension, renewal, refunding or
refinancing, and the direct and contingent obligors therefor shall not be
changed, as a result of or in connection with such extension, renewal, refunding
or refinancing;
(g) Indebtedness of any wholly-owned Subsidiary of the
Borrower owed to the Borrower or to any wholly-owned Subsidiary of the Borrower;
(h) (i) unsecured Permitted Subordinated Debt provided that
the aggregate principal amount of such Indebtedness shall not exceed $25,000,000
minus the amount of any Indebtedness incurred by the Borrower or any of its
Subsidiaries pursuant to Section 7.2(h)(ii) at any one time outstanding and (ii)
other Permitted Subordinated Debt in an aggregate principal amount not to exceed
$5,000,000 at any one time outstanding incurred in connection with a Permitted
Acquisition with respect to which all of the conditions set forth in Section
7.8(f) have been satisfied and incurred to pay all or part of the purchase price
thereof which Permitted Subordinated Debt, if secured, is secured only by Liens
permitted pursuant to Section 7.3(i);
(i) Indebtedness of Star Buffet in an aggregate principal
amount not to exceed $15,000,000 at any one time outstanding;
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(j) unsecured Indebtedness of the Borrower or any of its
Subsidiaries consisting of guarantees of not more than 20% of the principal
amount of Indebtedness of a franchisee incurred to finance a remodeling,
construction or purchase of a retail unit of such franchisee or capital
expenditures of such franchisee; provided that the amount of the obligations of
the Borrower and its Subsidiaries under or with respect to such guarantees shall
not exceed $20,000,000 in the aggregate outstanding at any time;
(k) unsecured Indebtedness of the Borrower or any of its
Subsidiaries owing to former franchisees and representing the deferred purchase
price (or a deferred portion of such purchase price) payable by the Borrower or
such Subsidiary to such former franchisee in connection with the purchase by the
Borrower or such Subsidiary of one or more retail outlets from such former
franchisee in an aggregate principal amount for all such Indebtedness not to
exceed $5,000,000 at any one time outstanding; and
(l) Indebtedness of any entity acquired pursuant to a
Permitted Acquisition with respect to which all of the conditions set forth in
Section 7.8(f) have been satisfied, which Indebtedness (i) is existing prior to
such Permitted Acquisition, (ii) is assumed by the Borrower or any Subsidiary of
the Borrower in connection with any such Permitted Acquisition and (iii) is not
incurred in contemplation of such Permitted Acquisition; provided that the
aggregate principal amount of all such Indebtedness shall not exceed $20,000,000
at any time outstanding.
Section 7.3 Liens. The Borrower shall not, and shall not permit any of
its Subsidiaries to, create, incur, assume or suffer to exist, directly or
indirectly, any Lien on any of its property now owned or hereafter acquired,
other than:
(a) Liens existing on the Closing Date and set forth on
Schedule 7.3 hereto;
(b) Liens for taxes not yet due or which are being contested
in good faith by appropriate proceedings diligently conducted and with respect
to which adequate reserves are being maintained in accordance with GAAP;
(c) Statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other Liens imposed by Law (other than
any Lien imposed by ERISA or pursuant to any Environmental Law) created in the
ordinary course of business for amounts not yet due or which are being contested
in good faith by appropriate proceedings diligently conducted and with respect
to which adequate bonds have been posted;
(d) Liens (other than any Lien imposed by ERISA or pursuant to
any Environmental Law) incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance and
other types of social
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security, or to secure the performance of tenders, statutory obligations, surety
and appeal bonds, bids, leases, government contracts, performance and
return-of-money bonds and other similar obligations (exclusive of obligations
for the payment of borrowed money);
(e) Easements, rights-of-way, zoning and similar restrictions
and other similar charges or encumbrances not interfering with the ordinary
conduct of the business of the Borrower or any of its Subsidiaries and which do
not detract materially from the value of the property to which they attach or
impair materially the use thereof by the Borrower or any of its Subsidiaries or
materially adversely affect the security interests of the Agent or the Lenders
therein;
(f) Liens granted to the Agent for the benefit of the Lenders
pursuant to the Security Documents securing the Obligations;
(g) Liens created pursuant to Capitalized Leases and to secure
other purchase-money Indebtedness permitted pursuant to Section 7.2(e), provided
that such Liens are only in respect of the property or assets subject to, and
secure only, the respective Capitalized Lease or other purchase-money
Indebtedness;
(h) Liens arising out of the replacement, extension or renewal
of any Lien permitted by clause (a) above upon or in the same property
theretofore subject thereto in connection with the refunding, refinancing,
extension or renewal (without increase in the amount or change in any direct or
contingent obligor) of the Indebtedness secured thereby permitted pursuant to
Section 7.2(f);
(i) Liens securing Permitted Subordinated Debt permitted
pursuant to Section 7.2(h)(ii) provided that (i) such Liens are only in respect
of the assets acquired in the applicable Permitted Acquisition, (ii) the
Obligations are secured by valid first priority perfected Liens on such assets
and the Liens permitted pursuant to this Section 7.3(i) are second in priority
to the Liens on such assets securing the Obligations and (iii) the rights and
remedies of any holder of such Liens are subordinated to the rights and remedies
of the Agent and the Lenders on terms approved in writing by the Agent;
(j) Liens securing Indebtedness (other than Permitted
Subordinated Debt) of the Borrower and its Subsidiaries in an aggregate
principal amount not to exceed (i) $5,000,000 plus (ii) if the FFCA Debt is
repaid in full, the agreements evidencing the FFCA Debt have been terminated,
all guarantees with respect to the FFCA Debt and all liens securing the FFCA
Debt have been released and evidence satisfactory thereof has been provided to
the Agent the receipt of which the Agent shall have acknowledged in writing,
$20,000,000, at any one time outstanding; and
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(k) Liens only in respect of specific property subject to
operating leases entered into by the Borrower or any of its Subsidiaries as a
lessee in the ordinary course of business.
Section 7.4 Restriction on Fundamental Changes.
(a) The Borrower shall not, and shall not permit any of its
Subsidiaries to, enter into any merger or consolidation, or liquidate, wind-up
or dissolve (or suffer any liquidation or dissolution), discontinue its business
or convey, lease, sell, transfer or otherwise dispose of, in one transaction or
series of transactions, all or any substantial part of its business or property,
whether now or hereafter acquired, except (i) as otherwise permitted under
Section 7.5, (ii) any wholly-owned Non-Summit Subsidiary of the Borrower other
than the Company and any Hardee's Subsidiaries may merge into or convey, sell,
lease or transfer all or substantially all of its assets to, the Borrower or any
other wholly-owned Non-Summit Subsidiary of the Borrower, provided, that in any
such merger involving the Borrower, the Borrower shall be the surviving
corporation and any such Subsidiary merging into the Borrower shall be Solvent,
(iii) any Solvent Person acquired by the Borrower or a Non-Summit Subsidiary in
a Permitted Acquisition permitted hereunder other than the Company and any
Hardee's Subsidiaries may merge with the Borrower or any wholly-owned Non-Summit
Subsidiary of the Borrower, provided, that in any such merger, the Borrower or
such wholly-owned Subsidiary shall be the surviving corporation, (iv) with the
prior written consent of the Agent and the Required Lenders, the Company and any
Hardee's Subsidiaries may merge into or convey, sell, lease or transfer all or
substantially all of its assets to, the Borrower or any other wholly-owned
Non-Summit Subsidiary, provided, that in any such merger involving the Borrower,
the Borrower shall be the surviving corporation and any such Subsidiary merging
into the Borrower shall be Solvent and (v) any Summit Subsidiary may merge into
or convey, sell, lease or transfer all or substantially all of its assets to,
any Summit Subsidiary; provided, that in each case, (A) any such wholly-owned
Subsidiary of the Borrower which is the surviving corporation of any such merger
or to which any business or property is so transferred shall be a party to the
Guaranty and the Subsidiary Security Agreement and (B) no Default or Event of
Default shall have occurred or be continuing or would occur after giving effect
thereto or as a result thereof.
(b) Borrower shall not and shall not permit any of its
Subsidiaries to, amend its certificate of incorporation or by-laws (or other
relevant formation document) in any manner adverse to the interests of the Agent
or the Lenders.
Section 7.5 Sale of Assets. The Borrower shall not, and shall not
permit any of its Subsidiaries to, make, consummate or effect any Asset
Disposition (or agree to do so at any future time) with respect to all or any
part of its property or assets, except:
(a) the sale of any 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
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for collection purposes only) and other than a sale of any capital stock of Carl
Karcher Enterprises, Inc. or the Company) so long as (i) 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, (ii) the purchase price for
such asset (other than assets of Summit used in the JB's Restaurants or Galaxy
Diner Restaurants as part of the Summit Asset Sale or assets included in
Excluded Hardee's Sales) 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, (iii) the aggregate fair market
value of such asset and all other assets sold by the Borrower and its
Subsidiaries during the same fiscal year of the Borrower pursuant to this clause
(c) shall not exceed 15% of the total assets of the Borrower and its
Subsidiaries determined on a consolidated basis in accordance with GAAP
provided, that the Summit Asset Sale, Excluded Resales and Excluded Hardee's
Sales shall not be included in the calculation of such percentage, (iv) the
Borrower shall prepay the Loans pursuant to, and in accordance with, Section
2.12 in an aggregate principal amount equal to the Net Sale Proceeds received by
the Borrower or such Subsidiary from the sale, transfer or other disposition of
such asset and (v) no Default or Event of Default has occurred and is continuing
or would result from such asset sale; and
(b) so long as no Default or Event of Default shall occur and
be con- tinuing, 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
clause (a).
Section 7.6 Contingent Obligations. The Borrower shall not, and shall
not permit any of its Subsidiaries to, create or become or be liable with
respect to any Contingent Obligation, except:
(a) pursuant to the Guaranty or the Security Documents;
(b) Contingent Obligations which are in existence on the
Closing Date and which are set forth on Schedule 7.6; and
(c) Contingent Obligations permitted pursuant to Section
7.2(j).
Section 7.7 Dividends. The Borrower shall not, and shall not permit any
of its Subsidiaries to, declare or pay any dividends, or return any capital to,
its stockholders or authorize or make any other distribution, payment or
delivery of property or cash to its stockholders as such, or redeem, retire,
purchase, defease or otherwise acquire, directly or indirectly, any shares of
any class of its capital stock now or hereafter outstanding (or any options,
rights or warrants issued with respect to its capital stock), or set aside any
funds for any of the foregoing purposes (all the foregoing "Dividends"), except
that:
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(a) Dividends may be made to the Borrower or any of its
wholly- owned Subsidiaries by any of its wholly-owned Subsidiaries; and
(b) So long as no Default or Event of Default shall have
occurred and be continuing, the Borrower may:
(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 during any fiscal year of the
Borrower if after giving effect thereto the aggregate amount of such
dividends, purchases, redemptions, retirements and acquisitions paid or
made during such fiscal year would be less than the sum of $5,000,000
plus 50% of Consolidated Net Income of the Borrower for each fiscal
year of the Borrower (commencing with the fiscal year ending January
27, 1997) up to and including the fiscal year immediately preceding the
year in which such dividend, purchase, redemption, retirement or
acquisition is paid or made, minus the aggregate amount of all such
dividends, purchases, redemptions, retirements and acquisitions paid
and made by the Borrower after January 27, 1997 through and including
the end of such immediately preceding fiscal year; and
(c) So long as no Default or Event of Default shall have
occurred and be continuing, any Subsidiary of the Borrower that is not a
wholly-owned Subsidiary of the Borrower may declare and pay cash dividends to
the extent, and only to the extent, of any cumulative positive net income (after
deducting any negative net income) of such Subsidiary arising after the date
such Subsidiary became a Subsidiary of the Borrower so long as such dividends
are payable to all of its equity holders on a ratable basis.
Section 7.8 Advances, Investments and Loans. The Borrower shall not,
and shall not permit any of its Subsidiaries to, make or suffer to exist,
directly or indirectly any Investments (including, without limitation, loans and
advances to the Borrower or any of its Subsidiaries, and other Investments in
Subsidiaries of the Borrower), or commitments therefor, or to create any
Subsidiary or to become or remain a partner in any partnership or joint venture,
or make any Acquisition of any interest in any Person, except that the following
shall be permitted:
(a) Investments set forth on Schedule 7.8;
(b) Investments by the Borrower and its Subsidiaries in
Subsidiaries of the Borrower outstanding on the date hereof, additional
Investments by the Borrower or any Non-Summit Subsidiary of the Borrower in any
Non-Summit Subsidiary of the Borrower
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which Subsidiary is Solvent and is a party to the Guaranty, additional
Investments by any Summit Subsidiary in any other Summit Subsidiary and
additional Investments by the Borrower or any wholly-owned Subsidiary of the
Borrower consisting of loans and advances to wholly-owned Subsidiaries of the
Borrower to the extent permitted by Section 7.2(g);
(c) loans and advances by the Borrower and its Subsidiaries to
their employees in the ordinary course of its business not exceeding $2,000,000
in the aggregate at any one time outstanding;
(d) the Borrower and its Subsidiaries may acquire and hold
Cash Equivalents;
(e) Investments consisting of promissory notes permitted to be
received as consideration in connection with Asset Dispositions permitted under
Section 7.5(a);
(f) Permitted Acquisitions, provided that, in the case of each
Permitted Acquisition, the conditions referred to in clauses (i) through (vii)
below are satisfied on or prior to the date of such Permitted Acquisition (it
being understood that, for purposes of clause (ii) below, the phrase "the
Borrower and its Subsidiaries" and the phrase "Consolidated" shall be deemed to
include the Person (and its Subsidiaries, if any, to be acquired) or assets to
be acquired as though such Person (and its Subsidiaries, if any, to be acquired)
or assets were a Subsidiary of the Borrower):
(i) the Person or assets to be acquired satisfy the
criteria set forth in the definition of "Permitted Acquisition"
contained in Section 1;
(ii) 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 (A) compliance by
the Borrower and its Subsidiaries with the covenants set forth in
Section 7.1, on a pro forma basis after giving effect to such
Acquisition, for a period of four consecutive fiscal quarters after the
date of such Acquisition, (B) on a pro forma basis after giving effect
to such Acquisition, as at the last day of the fiscal quarter ended
immediately preceding the date of consummation of such Acquisition for
which financial statements have been delivered to the Lenders pursuant
to Section 6.1(a), for the period of four consecutive fiscal quarters
of the Borrower (taken as one accounting period) then ended that (I)
the Leverage Ratio shall be less than 2.5 to 1.0, (II) the ratio of
Consolidated Total Debt plus the product of seven multiplied by
Consolidated Rentals to Consolidated EBITDAR shall be less than 3.75 to
1.0, and (III) the Consolidated EBITDA of the Person and any of its
Subsidiaries, if any, to be acquired, for the twelve-month period most
recently ended shall be a positive number;
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(iii) 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;
(iv) 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;
(v) the Total Revolving Loan Commitment minus the
aggregate principal amount of the Revolving Loans outstanding on the
date of such Permitted Acquisition minus the amount of any L/C
Obligations outstanding on the date of such Permitted Acquisition shall
equal at least $10,000,000;
(vi) all Consents and waiting periods described in clause
(vii)(3)(D) below shall have been obtained or expired; and
(vii) the Borrower or such Subsidiary of the Borrower
making such Acquisition shall furnish or cause to be furnished to the
Agent and the Lenders the following:
(1) 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 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 or other Consents, if any, with respect to such Acquisition;
(2) Such other financial, business and other
information regarding 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;
(3) In the case of each 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 (or assets in the case of clause (A)
below):
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(A) All documents required to be delivered
pursuant to Section 2.21 and Section 6.11;
(B) 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;
(C) An officer's certificate signed on behalf of
such Person by an appropriate officer of such Person, certifying as
to (i) 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 (B) above,
(ii) a true and correct copy of the by-laws or similar
organizational document of such Person, (iii) 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 7.8(f) to which such
Person is a party and the matters contemplated thereby, (iv) the
incumbency and specimen signatures of the officers of such Person
executing the documents and instruments to be delivered under this
Section 7.8(f) to which such Person is a party, and (v) the due
organization and good standing of such Person as a Person organized
under the laws of its jurisdiction of organization; and
(D) Evidence satisfactory to the Agent and the
Lenders that the Borrower, its Subsidiaries and the Person being
acquired has made and obtained all necessary governmental and other
Consents required in order to consummate such Acquisition and that
all applicable waiting periods with respect to such Acquisition
including, without limitation, those under the Hart-Scott-Rodino
Act 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; and
(g) Investments in Star Buffet provided that any such
Investments made by the Borrower or any Non-Summit Subsidiary after the Closing
Date shall consist only of Capital Stock or assets of Summit Subsidiaries and
the Casa Bonita Restaurants;
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(h) Investments in Related Businesses not to exceed
$20,000,000 individually or $30,000,000 in the aggregate at any time
outstanding;
(i) Investments in an aggregate amount not to exceed
$25,000,000 at any one time outstanding consisting of loans and advances to a
purchaser of assets sold pursuant to the Excluded Hardee's Sale; and
(j) Investments in Capital Stock of Checkers Drive-In
Restaurants, Inc. and Rally's Hamburgers, Inc., in an aggregate amount not to
exceed $11,000,000 after the Closing Date, which Capital Stock is acquired
through the exercise of warrants, options and similar rights owned by the
Borrower or any of its Subsidiaries on the Closing Date.
Section 7.9 Transactions with Affiliates. The Borrower shall not, and
shall not permit any of its Subsidiaries to, enter into any transaction or
series of related transactions, whether or not in the ordinary course of
business, with any Affiliate, other than on terms and conditions substantially
as favorable to the Borrower or such Subsidiary as would be obtainable at the
time in a comparable arm's-length transaction with a Person other than an
Affiliate.
Section 7.10 Limitation on Voluntary Payments and Modifications of
Certain Documents. The Borrower shall not, and shall not permit any of its
Subsidiaries to (a) make any sinking fund payment or voluntary or optional
payment or prepayment on or redemption, defeasance, purchase or acquisition for
value of (including, without limitation, by way of depositing with the trustee
with respect thereto money or securities before due for the purpose of paying
when due) or exchange of any Indebtedness other than (i) the Indebtedness
hereunder and under the other Loan Documents and (ii) regularly scheduled or
required repayments of Indebtedness permitted pursuant to Section 7.2, or (b)
amend, modify or waive, or permit the amendment, modification or waiver of (i)
any provision of either of the Seller Agreements or any material provision of
any other Transaction Document (other than the Loan Documents) or any provision
of the Existing Letter of Credit or the Reimbursement Agreement dated as of
September 23, 1994 between Carl Karcher Enterprises, Inc. and Bank of America
National Trust and Savings Association (the "Existing Reimbursement Agreement")
or (ii) any term or provision of (A) the Surviving Debt in any way that would be
materially adverse to the Lenders or (B) the Permitted Subordinated Debt or (c)
make any payment in violation of any subordination terms of any Indebtedness of
the Borrower or any of its Subsidiaries; provided that the Borrower may, and may
permit any of its Subsidiaries to, prepay, redeem, defease, purchase or acquire
or exchange any (collectively, a "Prepayment") Surviving Debt or Indebtedness
assumed in connection with a Permitted Acquisition which Indebtedness is
permitted pursuant to Section 7.2(l) in each case only if on the date of such
Prepayment (x) no event or condition has occurred and is continuing, or would
result from such Prepayment, that constitutes a Default or an Event of Default,
and (y) after giving effect to such Prepayment, the Total Revolving Loan
Commitment minus the aggregate principal amount of the Revolving
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Loans outstanding on the date of such Prepayment minus the amount of any L/C
Obligations outstanding on the date of such Prepayment shall equal at least
$10,000,000.
Section 7.11 Changes in Business. The Borrower shall not, and shall not
permit any of its Subsidiaries to, enter into any business which is
substantially different from that conducted by the Borrower or such Loan Party,
as the case may be, on the Closing Date after giving effect to the Transactions.
Section 7.12 Certain Restrictions. The Borrower shall not, and shall
not permit any of its Subsidiaries to, enter into or permit to exist any
agreement, instrument or other document (other than the Transaction Documents as
in effect on the Closing Date) which directly or indirectly restricts the
ability of the Borrower or any of its Subsidiaries to (a) enter into amendments,
modifications or waivers of the Loan Documents, (b) sell, transfer or otherwise
dispose of its assets, (c) create, incur, assume or suffer to exist any Lien
upon any of its property, (d) create, incur, assume, suffer to exist or
otherwise become liable with respect to any Indebtedness, (e) make loans or
advances to the Borrower, or (f) pay any Dividend or repay any Indebtedness owed
to the Borrower or any of its Subsidiaries; provided that Capitalized Leases or
agreements governing purchase money Indebtedness which contain restrictions of
the types referred to in clauses (b) or (c) with respect to the property covered
thereby shall be permitted; provided further that the foregoing shall not apply
to restrictions in effect on the date of this Agreement contained in agreements
governing Surviving Debt and, if such Indebtedness is renewed, extended or
refinanced, restrictions in the agreements governing the renewed, extended or
refinanced Indebtedness (as successive renewals, extensions and refinancings
thereof) if such restrictions are no more restrictive in any material respect
than those contained in the agreements governing the Indebtedness being renewed,
extended or refinanced and if such renewals, extensions and refinancings are
permitted pursuant to Section 7.2(f).
Section 7.13 Lease Obligations. The Borrower shall not, and shall not
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 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 (ii) for
leases (including Capitalized Leases) entered into for fair market value in the
ordinary course of business of the Borrower and its Subsidiaries.
Section 7.14 Hedging Agreements. The Borrower shall not, and shall not
permit any of its Subsidiaries to, enter into or remain liable under any Hedging
Agreement, except (a) Interest Rate Agreements with one or more of the Lenders
pursuant to which the Borrower and its Subsidiaries have hedged their reasonably
estimated interest rate exposure and (b) Hedging Agreements relating to
commodities pursuant to which the Borrower and its Subsidiaries have hedged
their reasonably estimated commodity price exposure.
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Section 7.15 Plans. The Borrower shall not, nor shall it permit any
member of its ERISA Controlled Group to, take any action which would increase
the aggregate present value of the Unfunded Benefit Liabilities under all Plans
to an amount in excess of $1,000,000.
Section 7.16 Fiscal Year; Fiscal Quarter. The Borrower shall not, and
shall not permit any of its Subsidiaries to, change its fiscal year or any of
its fiscal quarters (other than, with respect to the Company and its
Subsidiaries, any such changes necessary to conform fiscal periods of the
Company and its Subsidiaries to fiscal periods of the Borrower).
Section 7.17 Partnerships. The Borrower shall not, and shall not
permit any of its Subsidiaries to, become or remain a general partner in any
general or limited partnership, or permit any of its Subsidiaries to do so,
except for any Subsidiary the sole assets of which consist of its interest in
such partnership and except with respect to the partnerships described on
Schedule 7.17.
Section 7.18 Excluded Resales. The Borrower shall not, and shall not
permit any of its Subsidiaries to, acquire, purchase, hold or own any
Restaurants which the Borrower or any such Subsidiaries acquire from a
franchisee with the intent of reselling to the extent the aggregate amount of
Restaurants owned or held by the Borrower and its Subsidiaries would exceed
$20,000,000 at any one time outstanding, such amount to be measured by the
purchase price paid by the Borrower or any such Subsidiaries for such
Restaurants.
SECTION 8. EVENTS OF DEFAULT
Section 8.1 Events of Default. Each of the following events, acts,
occurrences or conditions shall constitute an Event of Default under this
Agreement, regardless of whether such event, act, occurrence or condition is
voluntary or involuntary or results from the operation of law or pursuant to or
as a result of compliance by any Person with any judgment, decree, order, rule
or regulation of any court or administrative or governmental body:
(a) Failure to Make Payments. The Borrower shall (i) default
in the payment when due of any principal of the Loans or (ii) default, and such
default shall continue unremedied for two (2) or more Business Days, in the
payment when due of any interest on the Loans or in the payment when due of any
Fees or any other amounts owing hereunder.
(b) Breach of Representation or Warranty. Any representation
or warranty made by any Loan Party herein or in any other Loan Document or in
any certificate or statement delivered pursuant hereto or thereto shall prove to
be false or misleading in any material respect on the date as of which made or
deemed made.
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(c) Breach of Covenants.
(i) The Borrower shall fail to perform or observe any
agreement, covenant or obligation arising under Section 6.1(f) or
Section 7.
(ii) The Borrower shall fail to perform or observe any
agreement, covenant or obligation arising under this Agreement (except
those described in subsections (a), (b) and (c)(i) above), and such
failure shall continue for thirty (30) days.
(iii) Any Loan Party shall fail to perform or observe any
agreement, covenant or obligation arising under any provision of the
Loan Documents other than this Agreement, which failure shall continue
after the end of the applicable grace period, if any, provided therein.
(d) Default Under Other Agreements. Any Loan Party or any of
its Subsidiaries shall default in the payment when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) of any amount
owing in respect of any Indebtedness of such Loan Party or any of its
Subsidiaries (other than the Obligations) in the aggregate principal amount of
$5,000,000 or more; or any Loan Party or any of its Subsidiaries shall default
in the performance or observance of any obligation or condition with respect to
any such Indebtedness or any other event shall occur or condition shall exist,
if the effect of such default, event or condition is to accelerate the maturity
or cause a mandatory redemption of any such Indebtedness or to permit the holder
or holders thereof, or any trustee or agent for such holders, to accelerate the
maturity or require a redemption or other repurchase thereof of any such
Indebtedness, or any such Indebtedness shall become or be declared to be due and
payable prior to its stated maturity other than as a result of a regularly
scheduled payment; or any such Indebtedness shall be declared to be due and
payable, or shall be required to be prepaid, redeemed, purchased or defeased, or
an offer to prepay, redeem, purchase or defease such Indebtedness shall be
required to be made, in each case prior to its stated maturity other than as a
result of a regularly scheduled payment.
(e) Bankruptcy, etc. (i) Any Loan Party or any of its
Subsidiaries shall commence a voluntary case concerning itself under the
Bankruptcy Code; or (ii) an involuntary case is commenced against any Loan Party
or any of its Subsidiaries and the petition is not controverted within 10 days,
or is not dismissed within 60 days, after commencement of the case; or (iii) a
custodian (as defined in the Bankruptcy Code) is appointed for, or takes charge
of, all or substantially all of the property of any Loan Party or any of its
Subsidiaries or any Loan Party or any of its Subsidiaries commences any other
proceedings under any reorganization, arrangement, adjustment of debt, relief of
debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to any Loan Party or
any of its Subsidiaries or there is commenced against any Loan Party or any of
its Subsidiaries any such proceeding which remains undismissed for a period
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of 60 days; or (iv) any order of relief or other order approving any such case
or proceeding is entered; or (v) any Loan Party or any of its Subsidiaries is
adjudicated insolvent or bankrupt; or (vi) any Loan Party or any of its
Subsidiaries suffers any appointment of any custodian or the like for it or any
substantial part of its property to continue undischarged or unstayed for a
period of 60 days; or (vii) any Loan Party or any of its Subsidiaries makes a
general assignment for the benefit of creditors; or (viii) any Loan Party or any
of its Subsidiaries shall fail to pay, or shall state that it is unable to pay,
or shall be unable to pay, its debts generally as they become due; or (ix) any
Loan Party or any of its Subsidiaries shall call a meeting of its creditors with
a view to arranging a composition or adjustment of its debts; or (x) any Loan
Party or any of its Subsidiaries shall by any act or failure to act consent to,
approve of or acquiesce in any of the foregoing; or (xi) any corporate action is
taken by any Loan Party or any of its Subsidiaries for the purpose of effecting
any of the foregoing.
(f) ERISA. (i) Any Termination Event shall occur, or (ii) any
Plan shall incur an "accumulated funding deficiency" (as defined in Section 412
of the Code or Section 302 of ERISA), whether or not waived, or (iii) the
Borrower or a member of its ERISA Controlled Group shall have engaged in a
transaction which is prohibited under Section 4975 of the Code or Section 406 of
ERISA which could result in the imposition of liability in excess of $1,000,000
on the Borrower or any member of its ERISA Controlled Group, or (iv) the
Borrower or any member of its ERISA Controlled Group shall fail to pay when due
an amount which it shall have become liable to pay to the PBGC, any Plan or a
trust established under Title IV of ERISA, or (v) a condition shall exist by
reason of which the PBGC would be entitled to obtain a decree adjudicating that
an ERISA Plan must be terminated or have a trustee appointed to administer any
ERISA Plan, or (vi) the Borrower or a member of its ERISA Controlled Group
suffers a partial or complete withdrawal from a Multiemployer Plan or is in
"default" (as defined in Section 4219(c)(5) of ERISA) with respect to payments
to a Multiemployer Plan, or (vii) a proceeding shall be instituted against the
Borrower or any member of its ERISA Controlled Group to enforce Section 515 of
ERISA and such proceeding shall remain undismissed for 180 days, or (viii) any
other event or condition shall occur or exist with respect to any Plan which
could subject the Borrower or any member of its ERISA Controlled Group to any
tax, penalty or other liability in excess of $1,000,000 or (ix) the aggregate
present value of all post-retirement benefit liabilities of the Borrower and its
Subsidiaries under any "welfare plan" (as defined in Section 3(1) of ERISA),
including, without limitation, the Company's Retiree Medical Insurance Plan,
exceeds $20,000,000.
(g) Security Documents. Any of the Security Documents shall
for any reason cease to be in full force and effect, or shall cease to give the
Agent the Liens, rights, powers and privileges purported to be created thereby
including, without limitation, a perfected first priority security interest in,
and Lien on, any material part of the Collateral in accordance with the terms
thereof or the Borrower or any of the Borrower's Subsidiaries party to any
Security Document seeks to repudiate its respective obligations thereunder and
the Liens created thereby are rendered, or the Borrower or any such Subsidiary
of the Borrower seeks to render such Liens, invalid and unperfected.
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(h) Guaranty. The Guaranty or any provision thereof shall
cease to be in full force and effect, or any Guarantor or any Person acting by
or on behalf of a Guarantor shall deny or disaffirm all or any portion of such
Guarantor's obligations under such Guaranty.
(i) Change of Control. (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 (iv) at any time from and after the Closing Date until
July 15, 1999; the Required Holders shall fail to own and control at least
1,000,000 shares of Voting Stock (as adjusted for stock splits, dividends or
reclassifications); provided that the number of shares of Voting Stock of the
Borrower deemed owned and controlled by William P. Foley II ("Mr. Foley") shall,
for purposes of the preceding clause (iv), include (A) the number of shares of
Voting Stock (as adjusted for stock splits, dividends or reclassifications)
owned and controlled by Cannae Limited Partnership, a Nevada Limited
Partnership, but only to the extent of Mr. Foley's pro rata interest (based on
Mr. Foley's interest in such partnership) in such Voting Stock owned and
controlled by such partnership and (B) the number of shares of Voting Stock of
the Borrower issuable upon the exercise of options then owned and controlled and
exercisable by Mr. Foley.
(j) Judgments. One or more judgments or decrees or awards in
an aggregate amount of $5,000,000 or more shall be entered by a court or courts
of competent jurisdiction or in any arbitration proceeding (other than as set
forth in clause (k) below) against any Loan Party or any of its Subsidiaries and
(i) any such judgments or decrees or awards shall not be stayed, discharged,
paid, bonded or vacated within 30 days or (ii) enforcement proceedings shall be
commenced by any creditor on any such judgment or decree or award.
(k) Flagstar Settlement. Any settlement, arbitration award or
judgment shall be entered into or awarded against the Borrower or the Company in
connection with any arbitration proceeding with Flagstar Enterprises, Inc. which
results in aggregate consideration being payable by the Borrower, the Company or
any of their respective Subsidiaries in excess of $50,000,000.
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(l) Environmental Matters. (i) Any Environmental Claim shall
have been asserted against any Loan Party or any Environmental Affiliate thereof
which, if determined adversely, could have a Material Adverse Effect, (ii) any
release, emission, discharge or disposal of any Material of Environmental
Concern shall have occurred, and such event could form the basis of an
Environmental Claim against any Loan Party or any Environmental Affiliate
thereof which, if determined adversely, could have a Material Adverse Effect, or
(iii) any Loan Party or its Environmental Affiliate shall have failed to obtain
any Environmental Approval necessary for the management, use, control,
ownership, or operation of its business, property or assets or any such
Environmental Approval shall be revoked, terminated, or otherwise cease to be in
full force and effect, in each case, if the existence of such condition could
have a Material Adverse Effect.
(m) Ownership of Certain Subsidiaries. The Borrower shall
cease for any reason to own 100% of the Capital Stock of Carl Karcher
Enterprises, Inc. or the Borrower shall cease for any reason to own 100% of the
Capital Stock of the Company.
Section 8.2 Rights and Remedies. Upon the occurrence of any Event of
Default described in Section 8.1(e), the Commitments shall automatically and
immediately terminate and the unpaid principal amount of and any and all accrued
interest on the Loans and any and all accrued Fees and other Obligations shall
automatically become immediately due and payable, with all additional interest
from time to time accrued thereon and without presentation, demand, or protest
or other requirements of any kind (including, without limitation, valuation and
appraisement, diligence, presentment, notice of intent to demand or accelerate
and notice of acceleration), all of which are hereby expressly waived by
Borrower, and the obligation of each Lender to make any Loan hereunder shall
thereupon terminate; and upon the occurrence and during the continuance of any
other Event of Default, the Agent shall at the request, or may with the consent,
of the Required Lenders, by written notice to Borrower, (i) declare that the
Commitments are terminated, whereupon the Commitments and the obligation of each
Lender to make any Loan hereunder shall immediately terminate, (ii) require the
Borrower to Cash Collateralize the L/C Obligations in an amount equal to the
maximum aggregate amount that is, or at any time thereafter may become,
available for drawing under any outstanding Letters of Credit (whether or not
any beneficiary shall have presented, or shall be entitled at such time to
present, the drafts or other documents required to draw under such Letters of
Credit), and (iii) declare the unpaid principal amount of and any and all
accrued and unpaid interest on the Loans and any and all accrued Fees and other
Obligations to be, and the same shall thereupon be, immediately due and payable
with all additional interest from time to time accrued thereon and without
presentation, demand, or protest or other requirements of any kind (including,
without limitation, valuation and appraisement, diligence, presentment, notice
of intent to demand or accelerate and notice of acceleration), all of which are
hereby expressly waived by Borrower.
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SECTION 9. THE AGENT
Section 9.1 Appointment. Each Lender hereby irrevocably designates
and appoints Banque Paribas as the Agent of such Lender under this Agreement and
each other Loan Document, and each such Lender irrevocably authorizes Banque
Paribas as the Agent for such Lender, to take such action on its behalf under
the provisions of this Agreement and each other Loan Document and to exercise
such powers and perform such duties as are expressly delegated to the Agent by
the terms of this Agreement and each other Loan Document, together with such
other powers as are reasonably incidental thereto. Notwithstanding any provision
to the contrary elsewhere in this Agreement, the Agent shall not have any duties
or responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities on the part of the Agent
shall be read into this Agreement or otherwise exist against the Agent. The
provisions of this Section 9 are solely for the benefit of the Agent and the
Lenders and no Loan Party shall have any rights as a third party beneficiary or
otherwise under any of the provisions hereof. In performing its functions and
duties hereunder and under the other Loan Documents, the Agent shall act solely
as the agent of the Lenders and does not assume nor shall be deemed to have
assumed any obligation or relationship of trust or agency with or for any Loan
Party or any of their respective successors and assigns. It is agreed that, for
purposes of the Seller Agreements, the role of the Agent hereunder shall subsume
the role of "Administrative Agent" as referred to in the Seller Agreements.
Section 9.2 Delegation of Duties. The Agent may execute any of its
duties under this Agreement or the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
Section 9.3 Exculpatory Provisions. The Agent shall not be (i) liable
for any action lawfully taken or omitted to be taken by it or any Person
described in Section 9.2 under or in connection with this Agreement or any other
Loan Document (except for its or such Person's own gross negligence or willful
misconduct), or (ii) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by any Loan Party
contained in this Agreement or any other Loan Document or in any certificate,
report, statement or other document referred to or provided for in, or received
under or in connection with, this Agreement or any other Loan Document or for
the value, validity, effectiveness, genuineness, enforceability or sufficiency
of this Agreement, or any other Loan Document or for any failure of any Loan
Party to perform their obligations hereunder or thereunder. The Agent shall not
be under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the properties,
books or records of any Loan Party. This Section is intended solely to govern
the relationship between the Agent, on the one hand, and the Lenders, on the
other.
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Section 9.4 Reliance by Agent. The Agent shall be entitled to rely,
and shall be fully protected in relying, upon any Note, writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy,
telex or teletype message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to any Loan Party), independent
accountants and other experts selected by the Agent. The Agent may deem and
treat the payee of any Note as the owner thereof for all purposes unless the
Agent shall have received an executed Transfer Supplement in respect thereof.
The Agent shall be fully justified in failing or refusing to take any action
under this Agreement or any other Loan Document unless it shall first receive
such advice or concurrence of the Required Lenders as it deems appropriate or it
shall first be indemnified to its satisfaction by the Lenders against any and
all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
other Loan Documents in accordance with a request of the Required Lenders, and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all the Lenders and all future holders of the Notes.
Section 9.5 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default unless
the Agent has received notice from a Lender or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". In the event that the Agent receives such a
notice, the Agent shall promptly give notice thereof to the Lenders. Subject to
the provisions of Section 10.5, the Agent shall take such action with respect to
such Default or Event of Default as shall be directed by the Required Lenders;
provided that unless and until the Agent shall have received such directions,
the Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as the
Agent shall deem advisable and in the best interests of the Lenders.
Section 9.6 Non-Reliance on Agent and Other Lenders. Each Lender
expressly acknowledges that neither the Agent, nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates has made any
representations or warranties to it and that no act by the Agent hereafter
taken, including, without limitation, any review of the affairs of any Loan
Party, shall be deemed to constitute any representation or warranty by the
Agent. Each Lender represents and warrants to the Agent that it has,
independently and without reliance upon the Agent or any other Lender and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
prospects, financial and other conditions and creditworthiness of the Loan
Parties and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Lender also represents 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
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time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement, and to make such investigation
as it deems necessary to inform itself as to the business, operations, property,
prospects, financial and other condition and creditworthiness of the Loan
Parties. Except for notices, reports and other documents expressly required
under the Loan Documents to be furnished to the Lenders by the Agent, the Agent
shall not have any duty or responsibility to provide any Lender with any credit
or other information concerning the business, operations, property, prospects,
financial and other condition or creditworthiness of the Loan Parties which may
come into the possession of the Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates.
Section 9.7 Indemnification. The Lenders agree to indemnify the Agent
and its officers, directors, employees, representatives and agents (to the
extent not reimbursed by the Loan Parties and without limiting the obligation of
the Loan Parties to do so), ratably according to their Pro Rata Shares, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever (including, without limitation, the fees and disbursements of
counsel for the Agent or such Person in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether or not
the Agent or such Person shall be designated a party thereto) that may at any
time (including, without limitation, at any time following the payment of the
Obligations) be imposed on, incurred by or asserted against the Agent or such
Person as a result of, or arising out of, or in any way related to or by reason
of, any of the Transactions or the execution, delivery or performance of any
Loan Document or any other Transaction Document (but excluding any such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from the gross negligence or
willful misconduct of the Agent or such Person as finally determined by a court
of competent jurisdiction); provided that to the extent indemnification payments
made by the Lenders pursuant to this Section 9.7 are subsequently recovered from
or for the account of the Borrower, the Agent shall promptly refund such
previously paid indemnification payments to the Lenders..
Section 9.8 Agent in its Individual Capacity. The Agent and its
affiliates may make loans to, accept deposits from and generally engage in any
kind of business with the Loan Parties as though the Agent were not the Agent
hereunder. With respect to Loans made or renewed by it and any Note issued to
it, the Agent shall have the same rights and powers under this Agreement as any
Lender and may exercise the same as though it were not the Agent, and the terms
"Lender" and "Lenders" shall include the Agent in its individual capacity.
Section 9.9 Successor Agent. The Agent may resign as Agent upon 30
days' notice to the Borrower and the Lenders. If the Agent shall resign as Agent
under this Agreement, then the Required Lenders during such 30-day period shall
appoint from among the Lenders a successor agent, whereupon such successor agent
shall succeed to the rights, powers and duties of the Agent and the term "Agent"
shall mean such successor agent,
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effective upon its appointment, and the former Agent's rights, powers and duties
as Agent shall be terminated, without any other or further act or deed on the
part of such former Agent or any of the parties to this Agreement or any holders
of the Notes. Notwithstanding anything herein to the contrary, so long as no
Event of Default has occurred and is continuing, each such successor agent shall
be subject to approval by the Borrower, which approval shall not be unreasonably
withheld or delayed. After any retiring Agent's resignation hereunder as Agent,
the provisions of this Section 9 and Section 10.1 shall inure to its benefit as
to any actions taken or omitted to be taken by it while it was Agent under this
Agreement.
SECTION 10. MISCELLANEOUS
Section 10.1 Payment of Expenses, Indemnity, etc. The Borrower shall:
(a) whether or not the transactions hereby contemplated are
consum- mated, pay all reasonable out-of-pocket costs and expenses of the Agent
in connection with the negotiation, preparation, execution and delivery of the
Loan Documents, the commitment letter related thereto and the Fee Letter, the
syndication of the Loans and the closing of the Transactions and the documents
and instruments referred to therein, the creation, perfection or protection of
the Agent's Liens in the Collateral (including, without limitation, fees and
expenses for lien searches and filing and recording fees), and any amendment,
waiver or consent relating to any of the Loan Documents (including, without
limitation, as to each of the foregoing, the reasonable fees and disbursements
of Skadden, Arps, Slate, Meagher & Flom (Illinois), special counsel to the Agent
and any other attorneys and legal assistants retained by the Agent and allocated
costs of internal counsel and legal assistants) and of the Agent and each Lender
in connection with the preservation of rights under, and enforcement of, the
Loan Documents and the documents and instruments referred to therein or in
connection with any restructuring or rescheduling of the Obligations (including,
without limitation, the reasonable fees and disbursements of counsel for the
Agent and for each of the Lenders);
(b) pay, and hold the Agent and each of the Lenders harmless
from and against, any and all present and future stamp, excise and other similar
taxes with respect to the foregoing matters and hold the Agent and each Lender
harmless from and against any and all liabilities with respect to or resulting
from any delay or omission (other than to the extent attributable to such
Lender) to pay such taxes; and
(c) indemnify the Agent and each Lender, and each of their
Affiliates and their officers, directors, employees, representatives and agents
(each an "Indemnitee") from, and hold each of them harmless against, any and all
losses, liabilities, claims, damages, expenses, obligations, penalties, actions,
judgments, suits, costs or disbursements of any kind or nature whatsoever
(including, without limitation, the reasonable fees and disbursements of counsel
for such Indemnitee) that may at any time (including, without limitation, at any
time following the payment of the Obligations) be imposed on, asserted against
or incurred by any Indemnitee as a result of, or arising out of, or in any way
related to or by reason of, or in
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connection with the preparation for a defense of, any investigation, litigation
or proceeding arising out of, related to or in connection with (i) any of the
Transactions or the execution, delivery or performance of any Loan Document or
any other Transaction Document (including, without limitation, any actual or
proposed use by the Borrower or any Subsidiary of the Borrower of the proceeds
of any Loan or Letter of Credit), (ii) any violation by any Loan Party or its
Environmental Affiliate of any applicable Environmental Law, (iii) any
Environmental Claim arising out of the management, use, control, ownership or
operation of property or assets by any of the Loan Parties or any of their
Environmental Affiliates, including, without limitation, all on-site and
off-site activities involving Materials of Environmental Concern, (iv) the
breach of any environmental representation or warranty set forth in Section
5.19, (v) the grant to the Agent and the Lenders of any Lien in any property or
assets of any of the Loan Parties or any stock or other equity interest in any
of the Loan Parties, and (vi) the exercise by the Agent and the Lenders of their
rights and remedies (including, without limitation, foreclosure) under any
agreements creating any such Lien (but excluding, as to any Indemnitee, any such
losses, liabilities, claims, damages, expenses, obligations, penalties, actions,
judgments, suits, costs or disbursements incurred solely by reason of the gross
negligence or willful misconduct of such Indemnitee as finally determined by a
court of competent jurisdiction). The Borrower's obligations under this Section
shall survive the termination of this Agreement and the payment of the
Obligations.
Section 10.2 Right of Setoff. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence and during the continuance of
any Event of Default, each Lender is hereby authorized at any time or from time
to time, without presentment, demand, protest or other notice of any kind to any
Loan Party or to any other Person, any such notice being hereby expressly
waived, to set off and to appropriate and apply any and all deposits (general or
special, time or demand, provisional or final) and any other indebtedness at any
time held or owing by such Lender (including, without limitation, by branches
and agencies of such Lender wherever located) to or for the credit or the
account of any Loan Party against and on account of the Obligations of the Loan
Parties to such Lender under this Agreement or under any of the other Loan
Documents, including, without limitation, all interests in Obligations purchased
by such Lender pursuant to Section 9.7, and all other claims of any nature or
description arising out of or connected with this Agreement or any other Loan
Document, irrespective of whether or not such Lender shall have made any demand
hereunder and although said Obligations, liabilities or claims, or any of them,
shall be contingent or unmatured.
Section 10.3 Notices. Except as otherwise expressly provided herein,
all notices, requests and demands to or upon the respective parties hereto to be
effective shall be in writing (including by telecopy, telex, or cable
communication), and shall be deemed to have been duly given or made when
delivered by hand, or five days after being deposited in the United States mail,
postage prepaid, or, in the case of telex notice, when sent, answerback
received, or, in the case of telecopy notice, when sent, or, in the case of a
nationally
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recognized overnight courier service, one Business Day after delivery to such
courier service, addressed, in the case of each party hereto, at its address
specified opposite its signature below or on the appropriate Transfer
Supplement, or to such other address as may be designated by any party in a
written notice to the other parties hereto, provided that notices and
communications to the Agent shall not be effective until received by the Agent.
Section 10.4 Successors and Assigns; Participation; Assignments.
(a) Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the Borrower, the Lenders, the Agent, all
future holders of the Notes and their respective successors and assigns, except
that the Borrower may not assign or transfer any of its rights or obligations
under this Agreement without the prior written consent of each Lender. No Lender
may participate, assign or sell any of its Credit Exposure (as defined in clause
(b) below) except as required by operation of law, in connection with the
merger, consolidation or dissolution of any Lender or as provided in this
Section 10.4.
(b) Participation. Any Lender may at any time sell to one or
more Persons (each a "Participant") participating interests in any Loan owing to
such Lender, any Note held by such Lender, any Commitment of such Lender and or
any other interest of such Lender hereunder (in respect of any such Lender, its
"Credit Exposure"). Notwithstanding any such sale by a Lender of participating
interests to a Participant, such Lender's rights and obligations under this
Agreement shall remain unchanged, such Lender shall remain solely responsible
for the performance thereof, such Lender shall remain the holder of any such
Note for all purposes under this Agreement (except as expressly provided below),
and the Borrower and the Agent shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under this
Agreement. The Borrower agrees that if any Obligations are due and unpaid, or
shall have been declared or shall have become due and payable upon the
occurrence and during the continuance of an Event of Default, each Participant
shall be deemed to have the right of setoff in respect of its participating
interest in amounts owing under this Agreement and any Note to the same extent
as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement or any Note, provided that such right of setoff
shall be subject to the obligations of such Participant to share with the
Lenders, and the Lenders agree to share with such Participant, as provided in
Section 10.7. The Borrower also agrees that each Participant shall be entitled
to the benefits of Sections 2.16, 2.17 and 2.18, provided that no Participant
shall be entitled to receive any greater amount pursuant to such sections than
the transferor Lender would have been entitled to receive in respect of the
amount of the participating interest transferred by such transferor Lender to
such Participant had no such transfer occurred. Each Lender agrees that any
agreement between such Lender and any such Participant in respect of such
participating interest shall not restrict such Lender's right to agree to any
amendment, supplement, waiver or modification to this Agreement or any other
Loan Document, except where the result of any of the foregoing would be to
extend the final maturity of any Obligation or any regularly scheduled
installment thereof or reduce the rate or extend the time of payment of interest
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thereon or reduce the principal amount thereof or release all or substantially
all of the Collateral (except as expressly provided in the Loan Documents).
(c) Assignments. Any Lender may, in the ordinary course of its
business and in accordance with applicable law, at any time assign to any Lender
or any affiliate thereof or, with the consent of the Agent, to any other Person
(each an "Assignee") all or any part of its Credit Exposure; provided, that in
the case of any such assignment to a Person that is not another Lender or an
affiliate of the assigning Lender, each such assignment shall be (i) for a
Credit Exposure not less than $5,000,000 and (ii) to an Assignee approved in
writing by the Agent. Such consent of the Agent shall be substantially in the
form attached as Schedule II to Exhibit I hereto. The Borrower, the Agent and
the Lenders agree that to the extent of any assignment the Assignee shall be
deemed to have the same rights and benefits under the Loan Documents and the
same rights of setoff and obligation to share pursuant to Section 10.7 as it
would have had if it were a Lender hereunder; provided that the Borrower and the
Agent shall be entitled to continue to deal solely and directly with the
assignor Lender in connection with the interests so assigned to the Assignee
unless and until such Assignee becomes a Purchasing Lender pursuant to clause
(d) below.
(d) Assignments to Purchasing Lenders. Any Lender may at any
time and from time to time assign to one or more Persons ("Purchasing Lenders")
all or any part of its Credit Exposure pursuant to a supplement to this
Agreement, substantially in the form of Exhibit I hereto (an "Assignment
Agreement"), executed by such Purchasing Lender, such transferor Lender and the
Agent. Upon (i) such execution of such Transfer Supplement, (ii) delivery to the
Agent of a notice of assignment substantially in the form of Schedule I to
Exhibit I hereto (a "Notice of Assignment") with a copy to the Borrower,
together with any consents required pursuant to Section 10.4(c) above, (iii)
payment by such Purchasing Lender to such transferor Lender of an amount equal
to the purchase price agreed between such transferor Lender and such Purchasing
Lender and (iv) payment of a $4,000 fee to the Agent for processing of such
assignment, such assignment shall become effective on the effective date
specified in such Assignment Agreement, which effective date shall be at least
five (5) Business Days after delivery of such Notice of Assignment to the Agent,
such transferor Lender shall be released from its obligations hereunder to the
extent of such assignment and such Purchasing Lender shall for all purposes be a
Lender party to this Agreement and shall have all the rights and obligations of
a Lender under this Agreement to the same extent as if it were an original party
hereto, and no further consent or action by the Borrower, the Lenders or the
Agent shall be required. Such Assignment Agreement shall be deemed to amend this
Agreement to the extent, and only to the extent, necessary to reflect the
addition of such Purchasing Lender as a Lender and the resulting adjustment of
the Commitments, if any, arising from the purchase by such Purchasing Lender of
all or a portion of the Credit Exposure of such transferor Lender. Promptly
after the consummation of any transfer to a Purchasing Lender pursuant hereto,
the transferor Lender, the Agent and the Borrower shall make appropriate
arrangements so that a replacement Note is issued to such transferor Lender
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and a new Note is issued to such Purchasing Lender, in each case in principal
amounts reflecting such transfer.
(e) Disclosure of Information. The Borrower authorizes each
Lender to disclose to any Participant, Assignee or Purchasing Lender (each, a
"Transferee") and any prospective Transferee any and all financial and other
information in such Lender's possession concerning the Borrower which has been
delivered to such Lender by the Borrower pursuant to this Agreement or which has
been delivered to such Lender by the Borrower in connection with such Lender's
credit evaluation of the Borrower prior to entering into this Agreement.
Section 10.5 Amendments and Waivers. Neither this Agreement, any
Note, any other Loan Document to which the Borrower is a party nor any terms
hereof or thereof may be amended, supplemented, modified or waived except in
accordance with the provisions of this Section. The Required Lenders and the
Borrower may, from time to time, enter into written amendments, supplements,
modifications or waivers for the purpose of adding, deleting, changing or
waiving any provisions to this Agreement, the Notes, or the other Loan Documents
to which the Borrower is a party, provided, that no such amendment, supplement,
modification or waiver shall (a) extend either the Revolving Loan Maturity Date
or the Term Loan Maturity Date or any installment or required prepayment of any
Obligations or reduce the rate or extend the time of payment of interest on any
Obligations, or reduce the principal amount of any Obligations or reduce any fee
payable to the Lenders hereunder, or release all or substantially all of the
Collateral (except as expressly contemplated by the Loan Documents) or change
the amount of any Commitment of any Lender, or amend, modify or waive any
provision of this Section 10.5 or the definition of Required Lenders, or consent
to or permit the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement or any other Loan Document, in each case
without the written consent of all the Lenders, (b) release (i) Carl Karcher
Enterprises, Inc., the Company or any Subsidiary of the Company (other than any
such Subsidiary which is an Immaterial Subsidiary), from the Guaranty and the
other applicable Security Documents (including the release of such Loan Party's
stock certificates from the Borrower Pledge Agreement or the Subsidiary Pledge
Agreement, as applicable), in each case without the written consent of all of
the Lenders or (ii) any other Subsidiary of the Borrower from the Guaranty and
the other applicable Security Documents (including the release of such Loan
Party's stock certificates from the Borrower Pledge Agreement or the Subsidiary
Pledge Agreement, as applicable) in each case without the written consent of
those Lenders whose Pro Rata Shares, in the aggregate, are greater than 66-2/3%;
provided that the release from the Guaranty and the other applicable Security
Documents (including the release of such Loan Party's stock certificates from
the Borrower Pledge Agreement or the Subsidiary Pledge Agreement, as applicable)
of (A) any Summit Subsidiary, Boston Pacific Inc. and CBI Restaurants, Inc. and
each Subsidiary of CBI Restaurants, Inc. in existence on the Closing Date and
(B) any Subsidiary of the Borrower (other than a Subsidiary of the Company) with
assets of less than $10,000,000 (as determined in accordance with GAAP) shall
not require the consent of any of the Lenders if (x) such Subsidiary (a "Sold
Guarantor") is being released from the Guaranty because all or a portion
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of the Equity Interests of such Sold Guarantor are being sold or otherwise
disposed of or an issuance of Equity Interests of such Sold Guarantor is
commenced, and immediately after giving effect to such sale, other disposition
or issuance of Equity Interests and as a result of such sale, other disposition
or issuance of Equity Interests, such Sold Guarantor is no longer a Subsidiary
of the Borrower and (y) any such sale, other disposition or issuance of Equity
Interests is otherwise permitted and commenced in accordance with the terms of
this Agreement or (c) amend, modify or waive any provision of Section 9 or any
other provision of any Loan Document if the effect thereof is to affect the
rights or duties of the Agent, without the written consent of the then Agent.
Any such amendment, supplement, modification or waiver shall apply to each of
the Lenders equally and shall be binding upon the Borrower, the Lenders, the
Agent and all future holders of the Notes. In the case of any waiver, the
Borrower, the Lenders and the Agent shall be restored to their former position
and rights hereunder and under the outstanding Notes, and any Default or Event
of Default waived shall be deemed to be cured and not continuing, but no such
waiver shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon.
Section 10.6 No Waiver; Remedies Cumulative. No failure or delay on
the part of the Agent or any Lender or any holder of a Note in exercising any
right, power or privilege hereunder or under any other Loan Document and no
course of dealing between any Loan Party and the Agent or any Lender or the
holder of any Note shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder or under any other
Loan Document preclude any other or further exercise thereof of the exercise of
any other right, power or privilege hereunder or thereunder. The rights and
remedies herein expressly provided are cumulative and not exclusive of any
rights or remedies which the Agent or any Lender or the holder of any Note would
otherwise have. No notice to or demand on any Loan Party in any case shall
entitle any Loan Party to any other or further notice or demand in similar or
other circumstances or constitute a waiver of the rights of the Agent, the
Lenders or the holder of any Note to any other or further action in any
circumstances without notice or demand.
Section 10.7 Sharing of Payments. Each of the Lenders agrees that if
it should receive any amount hereunder (whether by voluntary payment, by
realization upon security, by the exercise of the right of setoff or banker's
lien, by counterclaim or cross action, by the enforcement of any right under the
Loan Documents, or otherwise) which is applicable to the payment of any
Obligations, of a sum which with respect to the related sum or sums received by
other Lenders is in a greater proportion than the total of such Obligation then
owed and due to such Lender bears to the total of such Obligation then owed and
due to all of the Lenders immediately prior to such receipt, then such Lender
receiving such excess payment shall purchase for cash without recourse or
warranty from the other Lenders an interest in such Obligations owing to such
Lenders in such amount as shall result in a proportional participation by all of
the Lenders in such amount; provided that if all or any portion of such excess
amount is thereafter recovered from such Lender, such purchase shall
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be rescinded and the purchase price restored to the extent of such recovery, but
without interest.
Section 10.8 Application of Collateral Proceeds. The Agent shall,
unless otherwise specified at the direction of the Required Lenders which
direction shall be consistent with the last sentence of this Section 10.8, apply
all proceeds of Collateral in the following order:
(A) first, to pay Obligations in respect of
any fees, expense reimbursements or indemnities then due to the Agent;
(B) second, to pay Obligations in respect of
any fees, expenses, reimbursements or indemnities then due to the
Lenders and the Issuer;
(C) third, to pay interest due in respect of
the Loans and L/C Obligations;
(D) fourth, to the ratable payment of
principal outstanding on the Loans, Obligations for unreimbursed
drawings under all Letters of Credit and net termination amounts
payable in respect of Rate Hedging Obligations (with the order of
application to the installments of any particular Loan, Obligation for
any unreimbursed drawing under any Letter of Credit or net termination
amount payable in respect of Rate Hedging Obligation to be determined
by the Agent in its sole discretion);
(E) fifth, to provide required cash
collateral if any pursuant to Section 8.2; and
(F) sixth, to the ratable payment of all
other Obligations.
The order of priority set forth in this Section 10.8 and the related provisions
of this Agreement are set forth solely to determine the rights and priorities of
the Agent and the Lenders as among themselves. The order of priority set forth
in clauses (B) through (F) of this Section 10.8 may at any time and from time to
time be changed by the Required Lenders without necessity of notice to or
consent of or approval by the Borrower, or any other Person. The order of
priority set forth in clause (A) of this Section 10.8 may be changed only with
the prior written consent of the Agent.
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Section 10.9 Governing Law; Submission to Jurisdiction. (a) THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS (WITHOUT GIVING EFFECT TO THE
PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW).
(b) Any legal action or proceeding with respect to this
Agreement or any other Loan Document and any action for enforcement of any
judgment in respect thereof may be brought in the courts of the State of
Illinois or of the United States of America for the Northern District of
Illinois, and, by execution and delivery of this Agreement, the Borrower hereby
accepts for itself and in respect of its property, generally and
unconditionally, the non-exclusive jurisdiction of the aforesaid courts and
appellate courts. The Borrower irrevocably consents to the service of process
out of any of the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, the
Borrower at its address set forth opposite its signature below. The Borrower
hereby irrevocably waives any objection which it may now or hereafter have to
the laying of venue of any of the aforesaid actions or proceedings arising out
of or in connection with this Agreement or any other Loan Document brought in
the courts referred to above and hereby further irrevocably waives and agrees
not to plead or claim in any such court that any such action or proceeding
brought in any such court has been brought in an inconvenient forum. Nothing
herein shall affect the right of the Agent, any Lender or any holder of a Note
to serve process in any other manner permitted by law or to commence legal
proceedings or otherwise proceed against the Borrower in any other jurisdiction.
Section 10.10 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument.
Section 10.11 Effectiveness. This Agreement shall become effective on
the date on which all of the parties hereto shall have signed a counterpart
hereof and shall have delivered the same to the Agent which delivery, in the
case of the Lenders, may be given to the Agent by telecopy (with the originals
delivered promptly to the Agent via overnight courier service).
Section 10.12 Headings Descriptive. The headings of the several
Sections and subsections of this Agreement are inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of this
Agreement.
Section 10.13 Marshalling; Recapture. Neither the Agent nor any
Lender shall be under any obligation to marshall any assets in favor of any Loan
Party or any other party or against or in payment of any or all of the
Obligations. To the extent any Lender
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receives any payment by or on behalf of any Loan Party, which payment or any
part thereof is subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to such Loan Party or its
estate, trustee, receiver, custodian or any other party under any bankruptcy
law, state or federal law, common law or equitable cause, then to the extent of
such payment or repayment, the obligation or part thereof which has been paid,
reduced or satisfied by the amount so repaid shall be reinstated by the amount
so repaid and shall be included within the liabilities of such Loan Party to
such Lender as of the date such initial payment, reduction or satisfaction
occurred.
Section 10.14 Severability. In case any provision in or obligation
under this Agreement or the Notes or the other Loan Documents shall be invalid,
illegal or unenforce- able in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such provision
or obligation in any other jurisdiction, shall not in any way be affected or
impaired thereby.
Section 10.15 Independence of Covenants. All covenants hereunder
shall be given independent effect so that if a particular action or condition is
not permitted by any of such covenants, the fact that it would be permitted by
an exception to, or be otherwise within the limitations of, another covenant
shall not avoid the occurrence of a Default or Event of Default if such action
is taken or condition exists.
Section 10.16 Survival. All indemnities set forth herein including,
without limitation, in Sections 2.16, 2.17, 2.18, 2.19, 9.7 and 10.1 shall
survive the execution and delivery of this Agreement and the Notes and the
making and repayment of the Loans hereunder.
Section 10.17 Domicile of Loans. Each Lender may transfer and carry
its Loans at, to or for the account of any branch office, subsidiary or
affiliate of such Lender.
Section 10.18 Limitation of Liability. No claim may be made by any
Loan Party or any other Person against the Agent or any Lender or the
Affiliates, directors, officers, employees, attorneys or agent of any of them
for any special, indirect, consequential or punitive damages in respect of any
claim for breach of contract or any other theory of liability arising out of or
related to the transactions contemplated by this Agreement or any other
Transactions, or any act, omission or event occurring in connection therewith;
and each Loan Party hereby waives, releases and agrees not to sue upon any claim
for any such damages, whether or not accrued and whether or not known or
suspected to exist in its favor.
Section 10.19 Calculations; Computations. The financial statements to
be furnished to the Agent and the Lenders pursuant hereto shall be made and
prepared in accordance with GAAP consistently applied throughout the periods
involved and consistent with GAAP as used in the preparation of the financial
statements referred to in Section 5.5,
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and, except as otherwise specifically provided herein, all computations
determining compliance with Section 7.1 hereof shall utilize GAAP.
Section 10.20 WAIVER OF TRIAL BY JURY. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, EACH OF THE BORROWER, THE AGENT AND THE LENDERS HEREBY
IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT OR ANY MATTER ARISING HEREUNDER OR THEREUNDER.
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IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
CKE RESTAURANTS, INC.
By:______________________________________
Print Name:_________________________
Title:______________________________
Address: 1200 N. Harbor Blvd.
Anaheim, CA 92801
Attn: General Counsel
Telephone: (714) 774-5796
Telecopy: (714) 520-4485
107
BANQUE PARIBAS, as Agent and as a Lender
By:______________________________________
Print Name: Clark C. King, III
Title: Vice President
By:______________________________________
Print Name:_________________________
Title:______________________________
Address: 227 W. Monroe Street
Suite 3300
Chicago, IL 60606
Attn:
Telephone: (312) 853-6000
Telecopy: (312) 853-6020
with a copy to:
Maureen B. Keating
Banque Paribas
787 Seventh Avenue
New York, NY 10019-6016
Telephone: (212) 841-2286
Telecopy: (212) 841-2275
108
BANK OF MONTREAL
By:______________________________________
Print Name:_________________________
Title:______________________________
Address: 115 South LaSalle Street
Chicago, IL 60603
Attn: Maria A. Chachere
Telephone: (213) 239-0617
Telecopy: (213) 239-0680
NATEXIS BANQUE
(previously Banque Francaise du Commerce
Exterieur)
By:_________________________________________
Print Name:____________________________
Title:_________________________________
By:_________________________________________
Print Name:____________________________
Title:_________________________________
Address: 660 S. Figueroa, Suite 1400
Los Angeles, CA 90017
Attn: Iain Whyte
Telephone: (213) 627-8677
Telecopy: (213) 627-2761
109
CREDITANSTALT-BANKVEREIN
By:_________________________________________
Print Name:____________________________
Title:_________________________________
By:_________________________________________
Print Name:____________________________
Title:_________________________________
Address: 4 Embarcadero Center
Suite 630
San Francisco, CA 94111
Attn: James F. McCann
Telephone: (415) 788-1371 x227
Telecopy: (415) 781-0622
THE DAI-ICHI KANGYO BANK, LTD.,
LOS ANGELES AGENCY
By:_________________________________________
Print Name:____________________________
Title:_________________________________
Address: 555 W. 5th Street
Fifth Floor
Los Angeles, CA 90013
Attn: David K. Henry
Telephone: (213) 243-4760
Telecopy: (213) 624-5258
110
DEUTSCHE BANK AG, NEW YORK BRANCH
AND CAYMAN ISLANDS BRANCH
By:_________________________________________
Print Name:____________________________
Title:_________________________________
By:_________________________________________
Print Name:____________________________
Title:_________________________________
Address: 31 W. 52nd Street
New York, NY 10019
Attn: Stephan Wiedemann
Telephone: (212) 469-8663
Telecopy: (212) 474-8212
FIRST BANK & TRUST
By:_________________________________________
Print Name:____________________________
Title:_________________________________
Address: 2400 Michelson Drive
Irvine, CA 92615
Attn: Paul McGraw
Telephone: (714) 476-7897
Telecopy: (714) 476-8445
111
THE LONG-TERM CREDIT BANK OF
JAPAN, LTD., LOS ANGELES AGENCY
By:_________________________________________
Print Name:____________________________
Title:_________________________________
Address: 350 S. Grand Avenue
Suite 3000
Los Angeles, CA 90071
Attn: Bryan P. Reed
Telephone: (213) 689-6314
Telecopy: (213) 626-1067
MANUFACTURERS BANK
By:_________________________________________
Print Name: Gregory J. Hall
Title: Vice President
Address: 515 S. Figueroa Street
Los Angeles, CA 90071
Attn: Gregory J. Hall
Telephone: (213) 489-6291
Telecopy: (213) 489-6252
112
THE SAKURA BANK, LIMITED,
LOS ANGELES AGENCY
By:_________________________________________
Print Name:____________________________
Title:_________________________________
By:_________________________________________
Print Name:____________________________
Title:_________________________________
Address: 515 S. Figueroa Street
Suite 400
Los Angeles, CA 90071
Attn: Fernando Buesa
Telephone: (213) 489-6295
Telecopy: (213) 623-8692
THE SANWA BANK, LIMITED,
LOS ANGELES BRANCH
By:_________________________________________
Print Name:____________________________
Title:_________________________________
Address: 601 S. Figueroa Street, W5-4
Los Angeles, CA 90017
Attn: Virginia R. Hart
Telephone: (213) 896-7469
Telecopy: (213) 896-7475
113
SUMITOMO BANK OF CALIFORNIA
By:_________________________________________
Print Name:____________________________
Title:_________________________________
Address: 611 W. 6th Street
Suite 3900
Los Angeles, CA 90017
Attn: Matthew R. Van Steenhuyse
Telephone: (213) 362-5716
Telecopy: (213) 622-1385
THE SUMITOMO TRUST & BANKING CO.,
LTD., LOS ANGELES AGENCY
By:_________________________________________
Print Name:____________________________
Title:_________________________________
Address: 333 S. Grand Avenue
Suite 5300
Los Angeles, CA 90071
Attn: Karen Ryan
Telephone: (213) 229-2125
Telecopy: (213) 613-1083
114
UNITED STATES NATIONAL BANK OF
OREGON
By:_________________________________________
Print Name:____________________________
Title:_________________________________
Address: 555 S.W. Oak Street, PL-4
Portland, OR 97204
Attn: Janet E. Jordan
Telephone: (503) 275-5871
Telecopy: (503) 275-5428
WELLS FARGO BANK
By:_________________________________________
Print Name:____________________________
Title:_________________________________
Address: 2030 Main Street
Suite 900
Irvine, CA 92714
Attn: Sandy Martin
Telephone: (714) 251-4156
Telecopy: (714) 261-1830