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EXHIBIT 10.37
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AMENDED AND RESTATED CREDIT AGREEMENT
among
CKE RESTAURANTS, INC.,
THE LENDERS NAMED HEREIN
and
BANQUE PARIBAS
As Agent
DATED AS OF APRIL 1, 1998
$500,000,000
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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...............................................25
Section 2.3 Notice of Borrowing. ........................................26
Section 2.4 Disbursement of Funds. ......................................26
Section 2.5 Notes.........................................................27
Section 2.6 Interest. ...................................................27
Section 2.7 Interest Periods. ...........................................29
Section 2.8 Minimum Amount of Eurodollar Loans. .........................30
Section 2.9 Conversion or Continuation. .................................30
Section 2.10 Voluntary Reduction of Commitments. ........................30
Section 2.11 Voluntary Prepayments. .....................................31
Section 2.12 Mandatory Prepayments. .....................................31
Section 2.13 Application of Prepayments. ................................33
Section 2.14 Method and Place of Payment. ...............................33
Section 2.15 Fees. ......................................................34
Section 2.16 Interest Rate Unascertainable, Increased Costs, Illegality...34
Section 2.17 Funding Losses. ............................................36
Section 2.18 Increased Capital. .........................................36
Section 2.19 Taxes. .....................................................37
Section 2.20 Use of Proceeds. ...........................................38
Section 2.21 Collateral Security..........................................38
Section 2.22 Replacement of Certain Lenders...............................40
SECTION 3. LETTERS OF CREDIT.............................................................41
Section 3.1 Issuance of Letters of Credit, etc............................41
Section 3.2 Letter of Credit Fees.........................................42
Section 3.3 Obligation of Borrower Absolute, etc..........................43
SECTION 4. CONDITIONS PRECEDENT..........................................................45
Section 4.1 Conditions Precedent to Initial Loans. ......................45
Section 4.2 Conditions Precedent to All Loans.............................52
SECTION 5. REPRESENTATIONS AND WARRANTIES. ..............................................53
Section 5.1 Corporate Status. ...........................................53
Section 5.2 Corporate Power and Authority. ...............................54
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AMENDED AND RESTATED CREDIT AGREEMENT, dated as of April 1, 1998, 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.
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Section 5.3 No Violation. ..............................................54
Section 5.4 Litigation. ................................................54
Section 5.5 Financial Statements; Financial Condition; etc. ............54
Section 5.6 Solvency. ..................................................54
Section 5.7 Projections. ...............................................54
Section 5.8 Material Adverse Change. ...................................55
Section 5.9 Use of Proceeds; Margin Regulations. .......................55
Section 5.10 Governmental and Other Approvals. ..........................55
Section 5.11 Security Interests and Liens. ...............................55
Section 5.12 Tax Returns and Payments. ..................................56
Section 5.13 ERISA........................................................56
Section 5.14 Investment Company Act; Public Utility Holding Company Act...56
Section 5.15 Closing Date Transactions. .................................57
Section 5.16 Representations and Warranties in Transaction Documents......57
Section 5.17 True and Complete Disclosure. ..............................57
Section 5.18 Corporate Structure; Capitalization..........................57
Section 5.19 Environmental Matters. .....................................58
Section 5.20 Intellectual Property. .....................................59
Section 5.21 Ownership of Property; Restaurants. ........................59
Section 5.22 No Default. ................................................59
Section 5.23 Licenses, etc. .............................................59
Section 5.24 Compliance with Law. .......................................59
Section 5.25 No Burdensome Restrictions. ................................59
Section 5.26 Brokers' Fees. .............................................60
Section 5.27 Labor Matters. .............................................60
Section 5.28 Indebtedness of the Borrower and Its Subsidiaries............60
Section 5.29 Other Agreements.............................................60
Section 5.30 Immaterial Subsidiaries......................................60
Section 5.31 Franchise Agreements and Franchisees.........................60
SECTION 6. AFFIRMATIVE COVENANTS.........................................................60
Section 6.1 Information Covenants. ......................................61
Section 6.2 Books, Records and Inspections. ............................65
Section 6.3 Maintenance of Insurance. ..................................65
Section 6.4 Taxes. .....................................................65
Section 6.5 Corporate Franchises. ......................................66
Section 6.6 Compliance with Law. .......................................66
Section 6.7 Performance of Obligations. ................................66
Section 6.8 Maintenance of Properties. .................................66
Section 6.9 Compliance with Terms of Leaseholds. .......................66
Section 6.10 Compliance with Environmental Laws. ........................66
Section 6.11 Subsidiary Guarantors. .....................................67
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Section 6.12 Immaterial Subsidiaries......................................67
Section 6.13 Environmental Reports........................................67
Section 6.14 Year 2000....................................................68
Section 6.15 FEI Financial Statements.....................................68
SECTION 7. NEGATIVE COVENANTS............................................................68
Section 7.1 Financial Covenants...........................................68
Section 7.2 Indebtedness. ...............................................71
Section 7.3 Liens. ......................................................72
Section 7.4 Restriction on Fundamental Changes............................74
Section 7.5 Sale of Assets. .............................................75
Section 7.6 Contingent Obligations........................................75
Section 7.7 Dividends.....................................................76
Section 7.8 Advances, Investments and Loans. .............................77
Section 7.9 Transactions with Affiliates. ................................82
Section 7.10 Limitation on Voluntary Payments and Modifications of
Certain Documents. ...........................................82
Section 7.11 Changes in Business. .........................................83
Section 7.12 Certain Restrictions. ........................................83
Section 7.13 Lease Obligations.............................................84
Section 7.14 Hedging Agreements. .........................................84
Section 7.15 Plans. .......................................................84
Section 7.16 Fiscal Year; Fiscal Quarter. .................................84
SECTION 8. EVENTS OF DEFAULT.............................................................85
Section 8.1 Events of Default. ...........................................85
Section 8.2 Rights and Remedies. .........................................88
SECTION 9. THE AGENT.....................................................................89
Section 9.1 Appointment. .................................................89
Section 9.2 Delegation of Duties..........................................89
Section 9.3 Exculpatory Provisions. .....................................90
Section 9.4 Reliance by Agent.............................................90
Section 9.5 Notice of Default. ..........................................90
Section 9.6 Non-Reliance on Agent and Other Lenders. ....................91
Section 9.7 Indemnification. ............................................91
Section 9.8 Agent in its Individual Capacity..............................92
Section 9.9 Successor Agent. ............................................92
SECTION 10. MISCELLANEOUS ...............................................................92
Section 10.1 Payment of Expenses, Indemnity, etc. ........................92
Section 10.2 Right of Setoff. ............................................93
Section 10.3 Notices. .. ..................................................94
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Section 10.4 Successors and Assigns; Participation; Assignments. .........94
Section 10.5 Amendments and Waivers. .....................................96
Section 10.6 No Waiver; Remedies Cumulative. ..............................98
Section 10.7 Sharing of Payments. .......................................98
Section 10.8 Application of Collateral Proceeds. ..........................99
Section 10.9 Governing Law; Submission to Jurisdiction. .................100
Section 10.10 Counterparts. .............................................100
Section 10.11 Effectiveness. ............................................100
Section 10.12 Amendment and Restatement. ................................101
Section 10.13 Reallocation of Loans.......................................101
Section 10.14 Headings Descriptive. .....................................102
Section 10.15 Marshalling; Recapture. ...................................102
Section 10.16 Severability. .............................................102
Section 10.17 Independence of Covenants...................................103
Section 10.18 Survival. .................................................103
Section 10.19 Domicile of Loans. ........................................103
Section 10.20 Limitation of Liability. ..................................103
Section 10.21 Calculations; Computations. ...............................103
Section 10.22 WAIVER OF TRIAL BY JURY. ..................................103
Schedule 1.1 -- Lenders and Commitments
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
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
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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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AMENDED AND RESTATED CREDIT AGREEMENT, dated as of April 1, 1998,
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.
"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.
"Adjusted Leverage Ratio" shall mean the ratio of (a)(i)
Consolidated Total Debt plus (ii) the product of seven multiplied by
Consolidated Rentals to (b) Consolidated EBITDAR.
"Advantica" shall mean Advantica Restaurant Group, Inc., a
Delaware corporation.
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"Affected Lender" shall have the meaning provided in Section
2.22.
"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 Amended and Restated 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:
Leverage Ratio Eurodollar Loans Commitment Fee
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less than 1.5 to 1.0 0.50% 0.20%
1.5 to 1.0 or greater, but
less than 2.0 to 1.0 .750% 0.25%
2.0 to 1.0 or greater, but
less than 2.5 to 1.0 1.125% 0.25%
2.5 to 1.0 or greater, but 1.375% 0.375%
less than 3.0 to 1.0
3.0 to 1.0 or greater 1.50% 0.375%
For the period commencing on the Closing Date and ending on the date which
occurs on the later of (a) 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 August 10, 1998, and (b)
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October 1, 1998, 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 but less than
3.00 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 August 10, 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 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 3.00 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).
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"Assignment Agreement" shall have the meaning provided in Section
10.4(d).
"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
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trading by and between banks for U.S. dollar deposits in the relevant London
interbank Eurodollar market.
"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 (or other instruments or securities
evidencing ownership).
"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.
"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
not more than 180 days from the date of acquisition, (iii) fully secured
repurchase obligations
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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 Fees" shall have the meaning provided in Section
2.15(b).
"Company" shall mean Flagstar Enterprises, Inc., an Alabama
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 calcula tion 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.
"Consolidated EBITDAR" shall mean, during any period (i) Adjusted
Consoli-
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dated 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, minus (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 obligation in
respect of which such Contingent Obligation is made or, if not stated or
determinable, the maximum
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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
Environmental Concern at any location, whether or not owned by such Person or
(ii) circum-
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stances 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, safety 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 $2,000,000 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. 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
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16
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 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 mean the Letter of Credit No.
LASB-221686 issued by Bank of America National Trust and Savings Association for
the account of Carl Karcher Enterprises, Inc., as the same may be amended,
supplemented, modified, renewed or extended subject to Section 3.1(g) of this
Agreement.
"Existing Reimbursement Agreement" shall mean the Reimbursement
Agreement, dated as of September 23, 1994 between Carl Karcher Enterprises, Inc.
and Bank of America National Trust and Savings Association, as amended by
Amendment No. One dated as of July 15, 1997, Amendment No. Two dated as of
December 19, 1997, and Amendment No. Three dated as of April 1, 1998, and as the
same may be amended, restated or otherwise modified from time to time; provided,
however, that no such amendment, restatement or
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modification shall, without the prior written consent of the Required Lenders,
(i) result in an increase of the maximum principal amount of the Existing Letter
of Credit or (ii) modify any provision thereof relating to the fees payable
thereunder.
"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 1, 1998, as amended, from
time to time.
"Fees" shall mean all amounts payable pursuant to Section 2.15.
"FEI Acquisition" shall mean the acquisition of the Company and
its Subsidiaries and the other transactions contemplated by the FEI Acquisition
Documents.
"FEI Acquisition Documents" shall mean the Letter of Intent dated
January 14, 1998 between Advantica and the Borrower and the FEI Purchase
Agreement and all agreements and instruments executed and delivered in
connection therewith.
"FEI Guaranties" shall mean guaranties of obligations of the
Company that the Borrower incurs pursuant to Section 6.12(a) of the FEI Purchase
Agreement.
"FEI Purchase Agreement" shall mean the Stock Purchase Agreement
among Advantica, Spartan Holdings, Inc., a New York corporation, the Company and
the Borrower, dated as of February 18, 1998, 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.
"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
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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.
"Franchise Agreements" shall mean any and all agreements that
create a franchise or license to which the Borrower, the Company or any of their
respective 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, the Company or any of their respective 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, the Company or any of their
respective 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" shall mean Hardee's Food Systems, Inc., a North
Carolina corporation.
"Hardee's Acquisition" shall mean the consummation of the
acquisition of Hardee's and its Subsidiaries and the other transactions
contemplated by the Hardee's Acquisition Documents.
"Hardee's Acquisition Documents" shall mean the Hardee's Purchase
Agreement and all agreements and instruments executed and delivered in
connection therewith including, without limitation, the Seller Agreements.
"Hardee's Purchase Agreement" shall mean the Stock Purchase
Agreement
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among Imasco, Hardee's 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.
"Hardee's Subsidiaries" shall mean each Subsidiary which is at
any time on or after July 15, 1997, 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.
"Imasco" shall mean IMASCO Holdings, Inc., a Delaware
corporation.
"Immaterial Investments"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.
"Immaterial Subsidiaries" shall mean any Subsidiary of the
Borrower with assets of less than $1,500,000 (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 $10,000,000 (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, and all obligations of such Person, contingent or
otherwise, under acceptances or similar facilities, (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
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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.
"Indemnitee" shall have the meaning provided in Section 10.1(c).
"Initial Debt/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.
"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.
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"JB" shall mean shall mean JB's Family Restaurants, Inc., a
Delaware corporation and wholly-owned Subsidiary of the Borrower which
Subsidiary shall not own any assets other than assets relating to and used in
the operations of the JB's Restaurants and related franchise system and Galaxy
Diner Restaurants
"JB Newco" shall mean a wholly-owned Subsidiary of the Borrower,
which Subsidiary shall not own any assets other than (i) capital stock of JB and
certain JB's Restaurants and Galaxy Diner Restaurants to be sold to Timber
Lodge Steakhouse, Inc. and (ii) capital stock of Timber Lodge Steakhouse, Inc.
and GB Foods Corporation received by JB Newco in exchange for the sales of JB's
Restaurants and Galaxy Diner Restaurants and the sale of all of the capital
stock of JB, respectively.
"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 $65,000,000, 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).
"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
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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 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 FEI 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.
"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.
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"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), and (iii) Indebtedness 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 the issuance of common stock (A) of the
Borrower 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 Debt/Equity Issuance), 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.
"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 any such proceeds from Excluded Resales.
"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).
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"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.
"Original Credit Facility" shall mean that certain Credit
Agreement dated as of July 15, 1997 among the Borrower, the lenders party
thereto and Banque Paribas, as Agent, as amended prior to the date hereof.
"Participant" shall have the meaning provided in Section 10.4(b).
"Payment Date" shall mean the fifteenth day of each January,
April, July and October 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 Restaurant Acquisition" shall mean a Permitted
Acquisition of a Carl's Jr. or a Hardee's Restaurant by the Borrower or any of
its Subsidiaries from a franchisee.
"Permitted Subordinated Debt" shall mean Indebtedness of the
Borrower or any Subsidiary of the Borrower incurred after July 15, 1997, (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 and
in any event shall not include Indebtedness issued pursuant to the Subordinated
Notes.
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"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.
"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 divid ing (A)
such Lender's Revolving Loan Commitment (or the aggregate
outstand ing 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
Commit-
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ments 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 Commit ment 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).
"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
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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 and C. Thomas
Thompson.
"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.
"Revolving Loan Maturity Date" shall mean April 15, 2003.
"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, assign ments and similar agreements executed in connection
with the Loan Documents.
"Seller Agreements" shall mean (i) that certain agreement dated
as of April 27, 1997 between Imasco and the Borrower and (ii) that certain
Indemnification Agreement dated as of July 14, 1997 between Imasco 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
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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.
"Subordinated Debt Documents" shall mean the Subordinated Notes
and the Subordinated Note Indenture.
"Subordinated Note Indenture" shall mean that certain Indenture
between the Borrower and Chase Manhattan Bank and Trust Company, N.A., as
trustee, dated as of March 13, 1998, as the same may be amended, restated,
supplemented or otherwise modified in accordance with the terms of this
Agreement.
"Subordinated Notes" shall mean the Convertible Subordinated
Notes issued by the Borrower pursuant to the Subordinated Note Indenture, in a
maximum principal amount not to exceed $200,000,000 in the aggregate, as the
same may be amended, restated, supple mented or otherwise modified in accordance
with the terms of this Agreement; provided that such Subordinated Notes shall at
all times be subordinated in respect of the Obligations on subordination terms
contained in the Subordinated Note Indenture.
"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.
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"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 April 15, 2003.
"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 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, the
Subordinated Debt Documents and the FEI Acquisition Documents.
"Transactions" shall mean the Initial Debt/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
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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 $250,000,000. 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. The installments shall be
payable on the respective Payment Dates in the aggregate amounts set forth
below:
Payment Date Installment Amount
- ------------ ------------------
July 15, 1998 $5,000,000
October 15, 1998 $5,000,000
January 15, 1999 $5,000,000
April 15, 1999 $5,000,000
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Payment Date Installment Amount
- ------------ ------------------
July 15, 1999 $10,000,000
October 15, 1999 $10,000,000
January 15, 2000 $10,000,000
April 15, 2000 $10,000,000
July 15, 2000 $13,750,000
October 15, 2000 $13,750,000
January 15, 2001 $13,750,000
April 15, 2001 $13,750,000
July 15, 2001 $16,250,000
October 15, 2001 $16,250,000
January 15, 2002 $16,250,000
April 15, 2002 $16,250,000
July 15, 2002 $17,500,000
October 15, 2002 $17,500,000
January 15, 2003 $17,500,000
April 15, 2003 $17,500,000
Notwithstanding the foregoing, the last 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 condi tions 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 $250,000,000.
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 (provided the Revolv ing Loan Commitments have not
already expired pursuant to Section 2.2(a) hereof), and each Revolving Loan
shall mature on, the Revolving Loan Maturity Date, without further action on the
part of the Lenders or the Agent.
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(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).
(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.
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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.
Notwith standing 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 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.
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(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, commencing on April
15, 1998, (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 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.
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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 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
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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 twelve (12) 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.
(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
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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 July 15, 1997, or upon receipt by any Loan Party of
any Liquidating Distribution after July 15, 1997, in each case within three
hundred sixty (360) 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 Sale Proceeds
which the Borrower or such Subsidiary shall, within three hundred sixty (360)
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
three hundred sixty 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 July 15, 1997, 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 to 1.0 and (B) no Default or Event of 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 to 1.0 (but only until the Leverage Ratio is less than 2.0 to 1.0, 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 or Event of
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
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6.1(e), as applicable, in each case in accordance with the provisions of Section
2.13.
(c) On each date after July 15, 1997, 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 $130,000,000 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 $130,000,000 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.
(d) 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.
(e) 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.
(f) 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 (c) 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
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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 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 (c) 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
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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 April 15, 1998, 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.
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 applica ble 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;
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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 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,
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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 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 prepayment or 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
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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 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
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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 Revolving Loans
shall be used to partially finance the FEI Acquisition, to refinance
Indebtedness under the Original Credit Facility, and for the Borrower's working
capital and general corporate purposes which shall include, but not be limited
to, Restaurant renovations and Permitted Acquisitions. The proceeds of the Term
Loans shall be used to partially finance the FEI Acquisition and to refinance
Indebtedness under the Original Credit Facility.
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 specifi cally 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 hereunder,
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, the Subsidiary Security Agreement,
the Borrower Pledge Agreement or the Subsidiary Pledge 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
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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 of such new Subsidiary which is being acquired or formed or
converted, beneficially 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,
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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.
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
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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 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 Borrow ing 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
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with respect to each Letter of Credit, within one Business Day after demand
therefor, a 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.
(g) Notwithstanding anything to the contrary
contained in the Original Credit Facility, as of the Closing Date, the Existing
Letter of Credit shall not be deemed to be a Letter of Credit under and as
defined in this Agreement.
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 such 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, commencing on April 15, 1998, 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,
commencing on April 15, 1998. 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
such 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
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circumstances:
(1) any lack of validity or enforceability of the
Letter of Credit, this Agreement or any other agreement or
instrument relating thereto;
(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 document
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
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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 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,
genuineness 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
otherwise 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.
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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 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, together with an Officer's
Certificate supplementing each of the schedules as of the Closing
Date, and each of such supplemented schedules.
(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 and
that certain Amendment No. 1 to Subsidiary Security Agreement
dated as of the date hereof in form and substance satisfactory to
the Agent and the Lenders.
(v) Borrower Pledge Agreement. The Borrower
shall
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have executed and delivered to the Agent the Borrower Pledge
Agreement, together with an Officer's Certificate supplementing
each of the schedules as the Closing Date, and each of such
supplemented schedules.
(vi) Subsidiary Pledge Agreements.
Each Subsidiary of the Borrower (other than JB Newco) that owns
any Equity Interest in any Person as of the Closing Date (other
than an equity interest in Boston West, L.L.C.) shall have duly
executed and delivered to the Agent a Subsidiary Pledge
Agreement.
(vii) Guaranty. Each Subsidiary of
the Borrower (other than JB, JB Newco and any other Subsidiary
which is an Immaterial Subsidiary) shall have executed and
delivered to the Agent the Guaranty or a Joinder to Guaranty in
form and substance satisfactory to the Agent and the Lenders.
(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, Kilpatrick Stockton LLP, special
North Carolina and Georgia counsel to the Loan Parties, and Burr & Forman LLP,
special Alabama 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 Certifi cate 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 authoriz ing the execution, delivery and performance of all
Transaction Documents executed by such
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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, 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
represen tations 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.
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(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 FEI
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.
(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 January 26, 1998, 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 January 26, 1998, the Leverage Ratio (on a pro forma consolidated
basis after giving effect to the Transactions and the Hardee's Acquisition) 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 FEI 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
FEI Acquisition.
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(p) Financial Statements. The Agent shall have
received 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 from January 1, 1997, through October 1,1997.
(q) Funded Debt and Capitalization. The aggregate
amount of the Loans borrowed under this Agreement on the Closing Date shall not
exceed $425,000,000, 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 $25,000,000. The Agent shall have received
evidence satisfactory to it that the Borrower shall have received cash proceeds
from the issuance of the Subordinated Notes, in an aggregate amount not less
than $192,294,375 net of all brokerage commissions, underwriting fees and
discounts (the "Initial Debt/Equity Issuance") and that at least $115,000,000 of
such funds have been applied to the consumma tion of the FEI 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 Capital ized Lease Obligations, other than (A) the Loans
outstanding hereunder as contemplated by Section 4.1(q) and (B) Indebtedness
permitted under Section 7.2 (but excluding Indebtedness described in Section
7.2(a)) (collectively, the "Surviving Debt"), the aggregate outstanding
principal amount of which shall not exceed $350,000,000 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,
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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 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 and under the other
Loan Documents 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 Advantica, the
Borrower, the Company or any of their respective
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Subsidiaries, and the validity and enforceability of the Transaction Documents,
or in connection with any of the Transactions, 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 FEI
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 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 FEI Acquisition. The FEI
Acquisition shall have been consummated in accordance with the terms of the FEI
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) Litigation. The Agent shall have received a
list of all material actions, suits, governmental investigations, arbitrations
and proceedings pending against the Borrower, the Company or any of their
respective Subsidiaries and the loss analyses with respect thereto.
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(cc) 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:
(a) Representations and Warranties. The
representations and warranties 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.
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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.
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
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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 the Transaction Documents, or the
Hardee's Acquisition Documents, or (ii) that could, individually or in the
aggregate, result in a Material Adverse Effect.
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.
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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 the Hardee's Acquisition or (ii) the legality, validity, binding
effect or enforceability of any Transaction Document or Hardee's Acquisition
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
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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 $2,000,000. 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 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 Hardee's Retiree Medical
Insurance Plan, and the aggregate present value of all post-retirement benefit
liabilities of the Borrower and its Subsidiaries under Hardee'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
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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 or the
Hardee's Acquisition is, and all other such factual information (taken as a
whole) hereafter 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 for the Subordinated Notes or 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 Environmen tal
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,
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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.
(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
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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.
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 other 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
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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.
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 $1,500,000 and the assets of
all of the Subsidiaries of the Borrower designated as Immaterial Subsidiaries by
the Borrower do not in the aggregate exceed $10,000,000, 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 respec tive
Subsidiaries as of the Closing Date.
SECTION 6. AFFIRMATIVE COVENANTS.
The Borrower covenants and agrees that 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
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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.
(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
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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 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 de scribed in Section 406 of ERISA, that is not exempt
under Sec tion 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
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increased by $500,000 or to an amount in excess of $2,000,000, or
(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 liability (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 $2,000,000, 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
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letter, together with a certificate of the president or chief
financial officer of the Borrower setting forth the action which
the Borrower or such member of its ERISA Controlled Group pro
poses 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
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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 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 such
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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
JB, JB Newco and any 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 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 $1,500,000, 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
$10,000,000, 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 $10,000,000; 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
$1,500,000 and so long as the aggregate amount of assets of all such
Subsidiaries so designated as Immaterial Subsidiaries does not exceed
$10,000,000 (in each case as determined in accordance with GAAP). At such time
as any Subsidiary that was an Immaterial Subsidiary is no longer an Immaterial
Subsidiary, the Borrower shall thereafter comply with the terms of this
Agreement relating to or affecting Subsidiaries that are not Immaterial
Subsidiaries (in addition to those terms relating to or affecting the Borrower's
Subsidiaries generally), including, without limitation, the requirements of
Section 6.11 hereof;
Section 6.13 Environmental Reports. The Borrower shall cause to
be completed, by April 15, 1998, 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 Year 2000. The Borrower will use its reasonable best
efforts to insure that any computer systems and/or software used in the
operation of the Borrower's or any of its Subsidiaries' businesses is modified
or replaced to the extent necessary to prevent or avoid any Material Adverse
Effect as a result of the commencement of the year "2000."
Section 6.15 FEI Financial Statements. The Borrower will deliver
to the Agent within ninety (90) days after the Closing Date the consolidated
balance sheet of the Company and its Subsidiaries as at the end of its fiscal
year 1997, 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 Deloitte & Touche LLP or other independent certified
public accountants of recognized national standing reasonably acceptable to the
Agent and indicating that its audit of the consolidated financial statements of
FEI was conducted in accordance with generally accepted auditing standards.
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SECTION 7. NEGATIVE COVENANTS.
The Borrower covenants and agrees that 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 of the fiscal quarters of the
Borrower ending during each of the periods listed below to exceed the ratio set
forth opposite such period:
Period Ratio
------ -----
July 15, 1997 through Jan. 25, 1999 3.25 to 1.00
Jan. 26, 1999 through Jan. 31, 2000 3.00 to 1.00
Feb. 1, 2000 through Jan. 29, 2001 2.75 to 1.00
Each fiscal year of the Borrower 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 each period of four
consecutive fiscal quarters of the Borrower (taken as one accounting period) as
determined on the last day of each fiscal quarter of the Borrower ending 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 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
------ -----
Oct. 1, 1997 through Jan. 25, 1999 4.00 to 1.00
Jan. 26, 1999 through Jan. 31, 2000 4.50 to 1.00
Each fiscal year of the Borrower thereafter 5.00 to 1.00
(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) as determined on the last day
of each fiscal quarter of the Borrower (including Consolidated EBITDA and Fixed
Charges of the Company and its Subsidiaries for such period), to be less than
1.75 to 1.00; provided that for the period ending on May 18, 1998, Fixed Charges
will be
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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.
(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) as determined on the last day of each fiscal quarter of the Borrower
ending 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
------ ------
July 15, 1997 through Jan. 25, 1999 $200,000,000
Jan. 26, 1999 through Jan. 31, 2000 $220,000,000
Feb. 1, 2000 through Jan. 29, 2001 $240,000,000
Each fiscal year of the Borrower thereafter $260,000,000
(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) as determined on the last day of each
fiscal quarter of the Borrower ending during each period set forth below to (ii)
Consoli dated EBITDAR for the period of four consecutive fiscal quarters of the
Borrower (taken as one accounting period) as determined on the last day of each
fiscal quarter of the Borrower ending during each period set forth below
(including Consolidated Total Debt, Consolidated Rentals and Consolidated
EBITDAR of the Company and its Subsidiaries for such period) to exceed at any
time during each fiscal quarter of the Borrower ending during any period listed
below, the ratio set forth opposite such period:
Period Ratio
------ -----
July 15, 1997 through Jan. 25, 1999 4.50 to 1.00
Jan. 26, 1999 through Jan. 31, 2000 4.25 to 1.00
Feb. 1, 2000 through Jan. 29, 2001 4.00 to 1.00
Each fiscal year of the Borrower 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:
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Period Maximum Amount
------ --------------
Fiscal year ended Jan. 25, 1999 $200,000,000
Each fiscal year of the Borrower thereafter $150,000,000
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) $275,000,000, plus (ii) 50% of cumulative Consolidated Net Income
of the Borrower and its Subsidiaries for all fiscal quarters of the Borrower
ended after January 31, 1998 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;
(c) Indebtedness permitted under Sections 7.6(a),
7.6(b) and 7.6(d);
(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 (A) 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, (B) at
the time of
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such incurrence, no Default or Event of Default has occurred and is continuing
or would result from such incurrence, and (C) 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 the Borrower incurred pursuant
to the Subordinated Notes in an aggregate principal amount not to exceed
$200,000,000 at any time outstanding;
(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 obliga
tions of the Borrower and its Subsidiaries under or with respect to such
guarantees shall not exceed $40,000,000 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
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(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 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
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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 $25,000,000; and
(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 Subsidiary of the
Borrower other than Hardee's and any of the 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 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 Subsidiary of
the Borrower in a Permitted Acquisition permitted hereunder may merge with the
Borrower or any wholly-owned Subsidiary of the Borrower other than Hardee's and
any of the Hardee's Subsidiaries, provided, that in any such merger, the
Borrower or such wholly-owned Subsidiary shall be the surviving corporation,
(iv) the Company and its Subsidiaries may merge into or convey, sell,
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lease or transfer all or substantially all of its assets to Hardee's or any of
the Hardee's Subsidiary, (v) with the prior written consent of the Agent and the
Required Lenders, Hardee's and any of the 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 Subsidiary of the Borrower, provided,
that no consent of the Agent or the Required Lenders is required for any such
transaction solely between of the Hardee's Subsidiaries and, provided further,
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; 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 for collection purposes only) and
other than a sale of any capital stock of Carl Karcher Enterprises, Inc.,
Hardee's 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
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 3
years after the date of issuance and in an aggregate principal amount for all
such promissory notes not to exceed $10,000,000 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 (a) 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 Excluded Resales 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 continuing, the grant of any option or other right to
purchase any asset in a transaction which would be permitted under the
provisions of the preceding clause (a) ; and
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(c) sales of assets used in the JB's Restaurants
or Galaxy Diners by JB and JB Newco and sales of capital stock of JB and JB
Newco; and
(d) sale of the capital stock or assets of Boston
Pacific, Inc. and Boston West, L.L.C. so long as (i) the purchase price paid in
connection therewith shall be at least the fair market value thereof at the time
of such sale and (ii) any and all consideration received by the Borrower in
connection therewith that constitutes Collateral is pledged to the Agent for the
benefit of the Lenders pursuant to a validly executed Security Document.
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
(c) Contingent Obligations permitted pursuant to
Section 7.2(j); and
(d) pursuant to the FEI Guaranties.
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:
(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 or would result therefrom, 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
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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 amount of (A)
$15,000,000, plus (B) 30% of Consolidated Net Income of the
Borrower for each fiscal year of the Borrower (commencing with
the fiscal year ending January 26, 1998) up to and including the
fiscal year immediately preceding the year in which such
dividend, purchase, redemption, retirement or acquisition is paid
or made, less (C) the aggregate amount of any sinking fund
payments, payments, prepayments, redemptions, defeasances, and
purchases or acquisitions for value paid pursuant to Section
7.10(d) during such fiscal year, less (D) the aggregate amount of
all such dividends, purchases, redemptions, retirements and
acquisitions paid and made by the Borrower after January 26, 1998
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 Subsidiary of the Borrower in any
Subsidiary of the Borrower which Subsidiary is Solvent and is a party to the
Guaranty, 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
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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 (viii) 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 either the definition
of "Permitted Acquisition" or the definition of "Permitted
Restaurant Acquisitions" contained in Section 1;
(ii) in the case of Permitted
Acquisitions other than Permitted Restaurant Acquisitions, 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:
(1) compliance by
the Borrower and its Subsidiar ies 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, and
(2) 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:
(A) the
Leverage Ratio shall be less than 2.5 to 1.0,
(B) the
Adjusted Leverage Ratio shall be less than 3.75 to
1.0, and
(C) 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) in the case of Permitted
Acquisitions that are Permitted Restaurant Acquisitions, 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:
(1) compliance by
the Borrower and its Subsidiar ies 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, and
(2) 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:
(A) if the
aggregate amount of cash consideration paid and
Indebtedness incurred or assumed in connection
with all Permitted Restaurant Acquisitions
occurring after the Closing Date after giving
effect to such Acquisition is less than or equal
to $75,000,000, the Leverage Ratio shall be less
than 3.0 to 1.0,
(B) if the
aggregate amount of cash consideration paid and
Indebtedness incurred or assumed in connection
with all Permitted Restaurant Acquisitions
occurring after the Closing Date after giving
effect to such Acquisition is greater than
$75,000,000, the Leverage Ratio shall be less than
2.5 to 1.0,
(C) if the
aggregate amount of cash consideration paid and
Indebtedness incurred or assumed in connection
with all Permitted Restaurant Acquisitions
occurring after the Closing Date after giving
effect to such Acquisition is less than or equal
to $75,000,000, the Adjusted Leverage Ratio shall
be less than 4.25 to 1.0,
(D) if the
aggregate amount of cash consideration paid and
Indebtedness incurred or assumed in connection
with all Permitted Restaurant Acquisitions
occurring after the Closing Date after giving
effect to such Acquisition is
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greater than $75,000,000, the Adjusted Leverage
Ratio shall be less than 3.75 to 1.0, and
(E) 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;
(iv) 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;
(v) 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;
(vi) 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 outstand ing on the date
of such Permitted Acquisition shall equal at least $10,000,000;
(vii) all Consents and waiting
periods described in clause (viii)(3)(D) below shall have been
obtained or expired; and
(viii) 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 state-
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ments 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):
(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 organiza tion; 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 consum mate 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
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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 Related Businesses not to
exceed $80,000,000 in the aggregate at any time outstanding;
(h) Investments received as consideration in
connection with Asset Dispositions permitted under paragraphs (c) and (d) of
Section 7.5; and
(i) 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, which Capital Stock was acquired through the
exercise of warrants, options and similar rights owned by the Borrower.
(j) In the event that the shares of preferred
stock of Rally's Hamburgers Inc. ("Rally's") listed on Schedule 7.8 (the
"Rally's Preferred Stock") is converted into common stock of Rally's, the Agent
hereby agrees to deliver to the Borrower, subject to terms and conditions
reasonably acceptable to the Agent, the certificates representing the Rally's
Preferred Stock which shall be subject to such conversion, solely for the
purpose of permitting the Borrower to exchange such Rally's Preferred Stock for
the applicable number of shares of common stock of Rally's and the Borrower
hereby agrees to promptly deliver any and all such shares of common stock
received by the Borrower (along with undated stock powers executed in blank in
connection therewith) to the Agent and to pledge such shares pursuant to the
terms of the Borrower Pledge Agreement.
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 obtain able 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 Indebtedness permitted to
be incurred pursuant to Section 7.2(i)) 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; 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 (other than Indebtedness permitted to be incurred
pursuant to
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Section 7.2(i)) 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 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, or (b) amend, modify or waive,
or permit the amendment, modification or waiver of (i) (A) any provision of
either of the Seller Agreements or any material provision of any other
Transaction Document (other than the Loan Documents and other than the Subordi-
nated Debt Documents) or other Hardee's Acquisition Document or (B) any
provision of the Existing Letter of Credit or the Existing Reimbursement
Agreement in any manner the effect of which is to increase the maximum principal
amount of the Existing Letter of Credit or to change any provision of the
Existing Letter of Credit or the Existing Reimbursement Agreement relating to
the letter of credit fees payable thereunder, respectively, 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 the Subordinated Debt
Documents, or (c) make any payment in violation of any subordination terms of
any Indebtedness of the Borrower or any of its Subsidiaries; or (d) make or
offer to make any sinking fund payment, payment, prepayment, redemption,
defeasance, purchase or acquisition for value (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 otherwise segregate funds with
respect to the Subordinated Notes (other than regularly scheduled semi-annual
interest payments required to be made in cash and other than conversions of the
Subordinated Notes into common stock of the Borrower) to the extent that the
aggregate amount of all such sinking fund payments, payments, prepayments,
redemptions, defeasances, and purchases or acquisitions for value would exceed
the sum of (A) $15,000,000, plus (B) 30% of the Consolidated Net Income of the
Borrower for each fiscal year of the Borrower (commencing with the fiscal year
ending January 26, 1998 up to and including the fiscal year immediately
preceding the year in which sinking fund payment, payment, prepayments
redemption, defeasances, purchase or acquisition is made, less (C), together
with the aggregate amount of all dividends, purchases, redemptions, retirements
and acquisitions paid or made pursuant to Section 7.7(b)(ii), less (D) the
aggregate amount of all such sinking fund payments, payments, prepayments,
redemptions, defeasances, and purchases or acquisitions for value paid and made
by the Borrower after January 26, 1998 through and including the end of such
immediately preceding fiscal year.
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
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document 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 (other than Indebtedness arising under the Subordinated Notes)
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.
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 $2,000,000.
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
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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 which is a corporation and 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 7.19 Designated Senior Indebtedness. The Borrower shall
not designate, create or permit to exist any Designated Senior Indebtedness (as
defined in the Subordinated Note Indenture) other than obligations arising under
the Loan Documents.
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.
(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 con tinue for
thirty (30) days.
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(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 involun tary 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 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
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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
$2,000,000 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 $2,000,000 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, Hardee'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 for the benefit of the Lenders 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 Bor rower's Subsidiaries party to any Security Document seeks to repudiate
its respective obliga tions 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.
(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
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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 consum mation, 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 July 15, 1997, 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 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) 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 Environ mental 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.
(l) Ownership of Certain Subsidiaries. The
Borrower shall cease for any reason to own 100% of the Capital Stock of Carl
Karcher Enterprises, Inc., the Borrower shall cease for any reason to own 100%
of the Capital Stock of the Hardee's, or the Borrower
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shall cease for any reason to own, directly or indirectly, 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.
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
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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.
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 Assignment Agreement
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
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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 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
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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 proceed ing 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 Hardee's Acquisition or the execution,
delivery or performance of any Loan Document or any other Transaction Document
or any Hardee's Acquisition 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, 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-
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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,
attorneys 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 disburse ments 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
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
Transac tions or the Hardee's Acquisition or the execution, delivery or
performance of any Loan Document or any other Transaction Document or any
Hardee's Acquisition 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 Environ mental 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
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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 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
Assignment Agreement, 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
communi cations 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
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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
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 accordance
with applicable law, at any time assign to any Lender or any affiliate thereof
or, with the consent of the Agent, which consent shall not be unreasonably
withheld, 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, which approval shall not be
unreasonably withheld. 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
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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 Assignment Agreement, (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 consent 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.
(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.
(f) Regulation A. Notwithstanding any other
provision set forth in this Agreement, any Lender may at any time assign and
pledge all or any portion of its Loans and its Notes to any Federal Reserve Bank
as collateral security pursuant to Regulation A and any Operating Circular
issued by such Federal Reserve Bank. No such assignment shall release the
assigning Lender from its obligations hereunder.
(g) Transfer and Exchange of Notes. Promptly after
the consumma tion of any transfer to a Purchasing Lender pursuant hereto, the
transferor Lender, the Agent
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and the Borrower shall make appropriate arrangements so that any Notes held by
such transferor Lender shall be surrendered to the Borrower for cancellation,
one or more replacement Notes in exchange therefor shall be issued to such
transferor Lender, and one or more new Notes shall be issued to such Purchasing
Lender, in each case in notional amounts reflecting such transfer. Each such new
Note shall be payable to the Purchasing Lender and shall be substantially in the
form of Exhibit A or Exhibit B, as applicable.
Section 10.5 Amendments and Waivers.
(a) 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, supple mented, 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 (i) extend either the Revolving Loan Maturity Date or the Term Loan
Maturity Date or extend the time for payment of any installment, fee 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, or modify any provision hereof providing for the pro rata sharing of
payments, in each case without the written consent of all the Lenders, (ii)
release (A) Carl Karcher Enterprises, Inc., the Company or any Subsidiary of the
Company, Hardee's or any Subsidiary of Hardee's (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 (B) 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 (1) Boston Pacific Inc., JB, JB Newco and CBI Restaurants, Inc. and each
Subsidiary of CBI Restaurants, Inc. in existence on or after July 15, 1997, and
(2) any Subsidiary of the Borrower (other than a Subsidiary of Hardee's or 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 in any of the
foregoing circumstances if (x) such Subsidiary (a "Sold Guarantor") is being
released from the Guaranty because all or a portion of the assets of
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such Sold Guarantor are being sold or otherwise disposed of in an Asset
Disposition or 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 Asset Disposition or sale, other
disposition or issuance of Equity Interests is otherwise permitted and commenced
in accordance with the terms of this Agreement (and the Agent is hereby
authorized by the Lenders to execute and deliver to the Borrower all such
documents evidencing any such release) or (iii) 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.
(b) Each of the Lenders agrees that in the event
that such Lender is requested to consent to any amendment, supplement,
modification or waiver of any term or condition of or with respect to this
Agreement or any other Loan Document, the effectiveness of which requires the
consent of all of the Lenders pursuant to the first proviso of Section 10.5(a)
hereof, and such Lender shall fail or refuse to give such consent, such Lender
(the "Affected Lender") shall be obliged, at the request of the Borrower and
with the consent of the Agent, to assign all of its rights and obligations
hereunder to (i) another Lender or (ii) another qualified financial institution
nominated by the Agent and reasonably acceptable to the Borrower (the
"Replacement Lender"), and willing to participate in this Agreement through the
Final Maturity Date in the place of such Affected Lender; provided that the
Affected Lender receives payment in full, pursuant to an Assignment Agreement,
of an amount equal to such Lender's Pro Rata Share of all unpaid principal and
interest owing to the Lenders and all accrued but unpaid fees and other costs
and expenses payable with respect to its Pro Rata Share. The Agent shall give
written notice to the Borrower of any such assignment.
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
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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 circum stances 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 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 termi nation 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
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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 with the consent of 100% of the 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.
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
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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 Amendment and Restatement. This Agreement amends
and restates in its entirety the Original Credit Facility. Upon the
effectiveness of this Agreement, the terms and provisions of the Original Credit
Facility shall, subject to this Section 10.12, be superseded hereby.
Notwithstanding the amendment and restatement of the Original Credit Facility by
this Agreement, the Borrower shall continue to be liable to the Lenders party to
the Original Credit Facility and the Agent with respect to agreements on the
part of the Borrower under the Original Credit Facility to indemnify any of such
Lenders or the Agent in connection with events or conditions arising or existing
prior to the effective date of this Agreement, including, but not limited to,
those events and conditions set forth in Section 10 thereof. This Agreement is
given in substitution for the Original Credit Facility. Upon the effectiveness
of this Agreement, each reference to the Original Credit Facility in any other
document, instrument or agreement executed and/or delivered in connection
therewith shall mean and be a reference to this Agreement. This Agreement
amends, restates and supersedes only the Original Credit Facility. This
Agreement is not a novation. Nothing contained herein or in any of the other
Loan Documents, unless expressly herein or therein stated to the contrary, is
intended to amend, modify or otherwise affect any other instrument, document or
agreement executed and/or delivered in connection with the Original Credit
Facility.
Section 10.13 Reallocation of Loans.
(a) As of the Closing Date,
(i) the Pro Rata Share of each
Lender shall be immedi ately adjusted based upon the application
of the definition of "Pro Rata Share" with respect to each
Lender's new Term Loan Commitment and Revolving Loan Commitment
as of the Closing Date after giving effect to this Agreement;
(ii) each Lender listed on the
signatures pages of this Agreement that was not a party to the
Original Credit Facility shall become a party to this Agreement;
and
(iii) each Lender that was a party
to the Original Credit Facility whose Pro Rata Share becomes 0%
after giving effect to this Agreement shall, upon the occurrence
thereof and the reallocation of Loans in accordance with the
terms of Section 10.13(b), cease to be a Lender party to this
Agreement, and all accrued fees and other amounts payable under
the Original
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Credit Facility for the account of such Lender shall be due and
payable on such date; provided, however, that the provisions of
Sections 2.16, 2.17, 2.18, 2.19, 9.7 and 10.1 shall continue to
inure to the benefit of such Lender.
(b) As of the Closing Date,
(i) each Lender that, as a result
of the adjustment of its Pro Rata Share, is to have a greater
principal amount of Loans outstanding than such Lender had
outstanding immediately prior to giving effect to this Agreement
shall, if requested by the Agent, deliver to the Agent
immediately avail able funds to cover such Loans (and the Agent
shall, to the extent of the funds so received and the funds
received from any Lenders that are not parties to the Original
Credit Facility, disburse funds to each Lender that, as a result
of such adjustment of the Pro Rata Shares, is to have a lesser
principal amount outstand ing than such Lender had outstanding
under the Original Credit Agreement); and
(ii) immediately prior to giving
effect to this Agreement, each Lender that is not a party to the
Original Credit Facility shall deliver to the Agent immediately
available funds to cover its Loans that will equal such Bank's
Pro Rata Share of the aggregate amount of Obligations outstanding
under this Agreement immediately after giving effect to this
Agreement.
(c) The principal amounts of Loans outstanding
under the Original Credit Facility immediately prior to giving effect to this
Agreement to each Lender that is a party thereto shall be deemed to be Loans
made by that Lender hereunder (as reallocated pursuant to this Section
10.13(b)). Each Letter of Credit issued under the Original Credit Facility
(other than the Existing Letter of Credit) and outstanding immediately prior to
giving effect to this Agreement shall be deemed to be a Letter of Credit
hereunder.
Section 10.14 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 10.15 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 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
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liabilities of such Loan Party to such Lender as of the date such initial
payment, reduction or satisfaction occurred.
Section 10.16 Severability. In case any provision in or
obligation under this Agreement or the Notes or the other Loan Documents shall
be invalid, illegal or unenforceable 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 10.17 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 10.18 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 10.19 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 10.20 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 the Hardee's Acquisition, 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 10.21 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, and, except as otherwise
specifically provided herein, all computations determining compliance with
Section 7.1 hereof shall utilize GAAP.
Section 10.22 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
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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: /s/ CARL A. STRUNK
------------------------------------
Print Name: Carl A. Strunk
----------------------------
Title: EVP
---------------------------------
Address: 1200 N. Harbor Blvd.
Anaheim, CA 92801
Attn: General Counsel
Telephone: (714) 774-5796
Telecopy: (714) 520-4485
111
BANQUE PARIBAS, as Agent and as a Lender
By: /s/ CLARK C. KING, III
------------------------------------
Print Name: Clark C. King, III
Title: Vice President
By: /s/ CLARK C. KING, III
------------------------------------
Print Name: Clark King
----------------------------
Title: Vice President
---------------------------------
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
112
Schedule 1.1 to
Credit Agreement
Lenders and Commitments
Name of Lender Revolving Commitment Term Loan Commitment
- -------------- -------------------- --------------------
Banque Paribas $250,000,000 $250,000,000
113
Annex I
Domestic Lending Office Eurodollar Lending Office
Banque Paribas Banque Paribas
Address: Address:
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Telephone: Telephone:
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Telecopy: Telecopy:
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CKE Restaurants, Inc. CKE Restaurants, Inc.
Address: Address:
Address: Address:
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Telephone: Telephone:
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Telecopy: Telecopy:
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