1
EXHIBIT 10.1
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SECOND AMENDED AND RESTATED
CREDIT AGREEMENT
among
CKE RESTAURANTS, INC.,
THE LENDERS NAMED HEREIN
and
PARIBAS
As Agent
DATED AS OF MARCH 4, 1999
$500,000,000
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TABLE OF CONTENTS
Page
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SECTION 1. DEFINITIONS......................................................................1
Section 1.1 Definitions. .................................................1
SECTION 2. AMOUNT AND TERMS OF CREDIT FACILITIES...........................................26
Section 2.1 Revolving Loans...............................................26
Section 2.2 Notice of Borrowing. ........................................27
Section 2.3 Disbursement of Funds. ......................................27
Section 2.4 Revolving Notes...............................................28
Section 2.5 Interest. ...................................................28
Section 2.6 Interest Periods. ...........................................30
Section 2.7 Minimum Amount of Eurodollar Loans. .........................30
Section 2.8 Conversion or Continuation. .................................30
Section 2.9 Reduction of Revolving Loan Commitments(a) ..................31
Section 2.10 Voluntary Prepayments. .....................................31
Section 2.11 Mandatory Prepayments. .....................................32
Section 2.12 Application of Prepayments. ................................34
Section 2.13 Method and Place of Payment. ...............................35
Section 2.14 Fees. ......................................................36
Section 2.15 Interest Rate Unascertainable, Increased Costs, Illegality. 36
Section 2.16 Funding Losses. ............................................38
Section 2.17 Increased Capital. .........................................39
Section 2.18 Taxes. .....................................................39
Section 2.19 Use of Proceeds. ...........................................40
Section 2.20 Collateral Security..........................................41
Section 2.21 Replacement of Certain Lenders...............................43
SECTION 3. LETTERS OF CREDIT...............................................................44
Section 3.1 Issuance of Letters of Credit, etc............................44
Section 3.2 Letter of Credit Fees.........................................45
Section 3.3 Obligation of Borrower Absolute, etc..........................46
SECTION 4. CONDITIONS PRECEDENT............................................................48
Section 4.1 Conditions Precedent to Initial Revolving Loans. ............48
Section 4.2 Conditions Precedent to All Revolving Loans...................55
SECTION 5. REPRESENTATIONS AND WARRANTIES..................................................56
Section 5.1 Corporate Status. ...........................................56
Section 5.2 Corporate Power and Authority. ...............................56
Section 5.3 No Violation. ...............................................57
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TABLE OF CONTENTS (Continued)
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Section 5.4 Litigation. ..................................................57
Section 5.5 Financial Statements; Financial Condition; etc. .............57
Section 5.6 Solvency. ...................................................57
Section 5.7 Projections. ................................................57
Section 5.8 Material Adverse Change. ....................................58
Section 5.9 Use of Proceeds; Margin Regulations. ........................58
Section 5.10 Governmental and Other Approvals. ..........................58
Section 5.11 Security Interests and Liens. ...............................58
Section 5.12 Tax Returns and Payments. ..................................59
Section 5.13 ERISA........................................................59
Section 5.14 Investment Company Act; Public Utility Holding
Company Act................................................59
Section 5.15 Closing Date Transactions. .................................60
Section 5.16 Representations and Warranties in Transaction Documents......60
Section 5.17 True and Complete Disclosure. ..............................60
Section 5.18 Corporate Structure; Capitalization..........................60
Section 5.19 Environmental Matters. .....................................61
Section 5.20 Intellectual Property. .....................................62
Section 5.21 Ownership of Property; Restaurants. ........................62
Section 5.22 No Default. ................................................62
Section 5.23 Licenses, etc. .............................................63
Section 5.24 Compliance with Law. .......................................63
Section 5.25 No Burdensome Restrictions. ................................63
Section 5.26 Brokers' Fees. .............................................63
Section 5.27 Labor Matters. .............................................63
Section 5.28 Indebtedness of the Borrower and Its Subsidiaries and
Permitted Redemptions......................................63
Section 5.29 Other Agreements.............................................64
Section 5.30 Immaterial Subsidiaries......................................64
Section 5.31 Franchise Agreements and Franchisees.........................64
SECTION 6. AFFIRMATIVE COVENANTS...........................................................64
Section 6.1 Information Covenants. .......................................64
Section 6.2 Books, Records and Inspections. .............................68
Section 6.3 Maintenance of Insurance. ...................................69
Section 6.4 Taxes. ......................................................69
Section 6.5 Corporate Franchises. .......................................69
Section 6.6 Compliance with Law. ........................................69
Section 6.7 Performance of Obligations. .................................70
Section 6.8 Maintenance of Properties. ..................................70
Section 6.9 Compliance with Terms of Leaseholds. ........................70
Section 6.10 Compliance with Environmental Laws. ........................70
Section 6.11 Subsidiary Guarantors. .....................................70
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TABLE OF CONTENTS (Continued)
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Section 6.12 Immaterial Subsidiaries......................................71
Section 6.13 [Intentionally Omitted]......................................71
Section 6.14 Year 2000....................................................71
SECTION 7. NEGATIVE COVENANTS..............................................................71
Section 7.1 Financial Covenants...........................................71
Section 7.2 Indebtedness. ...............................................74
Section 7.3 Liens. ......................................................76
Section 7.4 Restriction on Fundamental Changes............................77
Section 7.5 Sale of Assets. .............................................78
Section 7.6 Contingent Obligations........................................79
Section 7.7 Dividends.....................................................79
Section 7.8 Advances, Investments and Loans. .............................80
Section 7.9 Transactions with Affiliates. ................................86
Section 7.10 Limitation on Voluntary Payments and Modifications of
Certain Documents............................................87
Section 7.11 Changes in Business. ........................................88
Section 7.12 Certain Restrictions. .......................................88
Section 7.13 Lease Obligations............................................88
Section 7.14 Hedging Agreements. ........................................90
Section 7.15 Plans. ......................................................90
Section 7.16 Fiscal Year; Fiscal Quarter. ................................90
SECTION 8. EVENTS OF DEFAULT...............................................................91
Section 8.1 Events of Default. ...........................................91
Section 8.2 Rights and Remedies...........................................95
SECTION 9. THE AGENT.......................................................................95
Section 9.1 Appointment...................................................95
Section 9.2 Delegation of Duties..........................................96
Section 9.3 Exculpatory Provisions. .....................................96
Section 9.4 Reliance by Agent.............................................96
Section 9.5 Notice of Default. ..........................................97
Section 9.6 Non-Reliance on Agent and Other Lenders. ....................97
Section 9.7 Indemnification. ............................................97
Section 9.8 Agent in its Individual Capacity..............................98
Section 9.9 Successor Agent. ............................................98
SECTION 10. MISCELLANEOUS...................................................................99
Section 10.1 Payment of Expenses, Indemnity, etc.........................99
Section 10.2 Right of Setoff............................................100
Section 10.3 Notices. .................................................100
Section 10.4 Successors and Assigns; Participation; Assignments.........100
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TABLE OF CONTENTS (Continued)
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(g) Transfer and Exchange of Revolving Notes...................103
Section 10.5 Amendments and Waivers. ..................................103
Section 10.6 No Waiver; Remedies Cumulative. ...........................105
Section 10.7 Sharing of Payments. .....................................105
Section 10.8 Application of Collateral Proceeds.........................105
Section 10.9 Governing Law; Submission to Jurisdiction. ...............106
Section 10.10 Counterparts. ............................................107
Section 10.11 [Intentionally Omitted]....................................107
Section 10.12 Amendment and Restatement. ...............................107
Section 10.13 Reallocation of Revolving Loans............................107
Section 10.14 Headings Descriptive. ....................................109
Section 10.15 Marshalling; Recapture. ..................................109
Section 10.16 Severability. ............................................109
Section 10.17 Independence of Covenants..................................109
Section 10.18 Survival. ................................................109
Section 10.19 Domicile of Revolving Loans. .............................110
Section 10.20 Limitation of Liability. .................................110
Section 10.21 Calculations; Computations. ..............................110
Section 10.22 WAIVER OF TRIAL BY JURY. ..................................110
Section 10.23 References.................................................110
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Schedule 1.1 -- Lenders and Revolving Loan Commitments
Schedule 5.4 -- Litigation
Schedule 5.7 -- Projections
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 Revolving Note
Exhibit B -- Form of Amended and Restated Borrower Pledge Agreement
Exhibit C -- Form of Amended and Restated Borrower Security Agreement
Exhibit D -- Form of Amended and Restated Guaranty
Exhibit E -- Form of Amended and Restated Subsidiary Pledge Agreement
Exhibit F -- Form of Amended and Restated Subsidiary Security Agreement
Exhibit G -- Form of Notice of Borrowing
Exhibit H-1 -- Form of Opinion of Stradling Yocca Carlson & Rauth, counsel to the
Loan Parties
Exhibit H-2 -- Form of Opinion of Locke Liddell & Sapp LLP, special Texas
counsel to the Loan Parties
Exhibit H-3 -- Form of Opinion of Kilpatrick Stockton LLP, special North Carolina
counsel to the Loan Parties
Exhibit H-4 -- Form of Opinion of Burr & Forman LLP, special Alabama counsel
to the Loan Parties
Exhibit I -- Form of Assignment Agreement
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SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of March
4, 1999, among CKE Restaurants, Inc., a Delaware corporation (the "Borrower"),
the Lenders (as hereinafter defined) and 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.
"Acquiring Subsidiary" shall have the meaning provided in Section
2.20(b).
"Acquisition" means any transaction, or any series of related
transactions, consummated after the Closing Date, 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 with respect to the Borrower
on a consolidated basis with its Subsidiaries, at any date, the ratio of (a)(i)
Consolidated Total Debt plus (ii) the product of (A) seven multiplied by (B) an
amount equal to Consolidated Rentals
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for the period of four (4) consecutive fiscal quarters of the Borrower (taken as
one accounting period) most recently ended on or prior to such date minus rent
expense attributable to Sale and Leaseback Transactions determined in accordance
with GAAP for such period, to (b) Consolidated EBITDAR for the period of four
(4) consecutive fiscal quarters most recently ended on or prior to such date.
"Advantica" shall mean Advantica Restaurant Group, Inc., a
Delaware corporation.
"Affected Lender" shall have the meaning provided in Section
2.21.
"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 Paribas (and its successors) 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 Second 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:
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Leverage Ratio Eurodollar Loans Commitment Fee
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less than 1.5 to 1.0 0.750% 0.375%
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1.5 to 1.0 or greater, but
less than 2.0 to 1.0 1.000% 0.375%
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2.0 to 1.0 or greater, but
less than 2.5 to 1.0 1.375% 0.375%
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2.5 to 1.0 or greater, but
less than 3.0 to 1.0 1.625% 0.500%
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3.0 to 1.0 or greater 1.750% 0.500%
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The Leverage Ratio shall be calculated as of the end of each fiscal quarter of
the Borrower, commencing with the fiscal quarter ending November 2, 1998, and
shall be reported to the Agent pursuant to the Closing Compliance Certificate
with respect to the first calculation and pursuant to a Compliance Certificate
delivered by the Borrower in accordance with Section 6.1(e) hereof with respect
to each subsequent calculation. On the Closing Date with respect to the first
calculation and 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 of the Borrower, as
applicable, with respect to each subsequent calculation, 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; provided however that for the period commencing on the Closing
Date and ending on the date which occurs six (6) months after the Closing Date,
if the Leverage Ratio is less than 2.5 to 1.0, the Applicable Margin with
respect to Eurodollar Loans shall be 1.50% per annum and with respect to
Commitment Fees shall be 0.50% per annum. 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 3.0 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.
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"Asset Disposition" shall mean any conveyance, sale, lease,
license, transfer or other disposition by the Borrower or any of its
Subsidiaries subsequent to the Closing Date 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 of intellectual property 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, (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, and (E) sales, transfers or other dispositions of any property
or assets by the Borrower or any of its wholly-owned Subsidiaries to the
Borrower or any of its wholly-owned Domestic Subsidiaries provided that all
documents or opinions required to be delivered to the Agent pursuant to Section
2.20 have been delivered to the Agent and the Borrower has provided the Agent
with written notice of such sale, transfer or other disposition at least ten
(10) days prior to the date of any such sale, transfer or other disposition and
provided further that the Agent and Lenders shall not be deemed to have released
their security interest in any such property or assets.
"Assignee" shall have the meaning provided in Section 10.4(c).
"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 higher 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 Revolving Loans made and/or being
maintained at a rate of interest based upon the Base Rate.
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"Borrower" shall have the meaning provided in the first paragraph
of this Agreement.
"Borrower Pledge Agreement" shall mean a pledge agreement
substantially in the form of the Amended and Restated Borrower Pledge Agreement
set forth as Exhibit B hereto duly executed and delivered to the Agent by the
Borrower, 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 Amended and Restated Borrower Security
Agreement set forth as Exhibit C hereto duly 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 Revolving
Loan from all the Lenders on a given date (or resulting from conversions or
continuations on a given date) having, in the case of Eurodollar Loans, the same
Interest Period.
"Business Day" shall mean (i) for all purposes other than as
covered by clause (ii) below, any day excluding Saturday, Sunday and any day
which shall be in Chicago, Los Angeles or New York City a legal holiday or a day
on which banking institutions are authorized or required by law or other
government actions to close and (ii) with respect to all notices and
determinations in connection with, and payments of principal and interest on,
Eurodollar Loans, any day which is a Business Day described in clause (i) and
which is also a day for trading by and between banks for U.S. dollar deposits in
the relevant London interbank Eurodollar market.
"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).
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"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 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 Compliance Certificate" shall have the meaning provided
in Section 4.1(p).
"Closing Date" shall mean March 4, 1999.
"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
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granted to the Agent or any Lender or any Interest Rate Hedge Provider under any
of the Security Documents.
"Commitment Fees" shall have the meaning provided in Section
2.14(b).
"Commitment Reduction Date" shall have the meaning provided in
Section 2.9(b).
"Compliance Certificate" shall have the meaning provided in
Section 6.1(e).
"Consents" shall have the meaning provided in Section 4.1(v).
"Consolidated Cash Interest Expense" shall mean, for any period,
Consolidated Interest Expense for such period minus the amount of such
Consolidated Interest Expense for such period not paid or payable in cash.
"Consolidated EBITDA" shall mean, for any Person during any
period, the sum of (i) Consolidated Net Income for such period plus (ii) to the
extent deducted in the calculation of Consolidated Net Income for such period,
Consolidated Interest Expense for such period plus (iii) to the extent deducted
in the calculation of Consolidated Net Income for such period, federal and state
income taxes for such period, plus (iv) to the extent deducted in the
calculation of Consolidated Net Income for such period, depreciation and
amortization expense for such period, plus (v) to the extent deducted in the
calculation of Consolidated Net Income for such period, all extraordinary losses
for such period, minus (vi) to the extent included in the calculation of
Consolidated Net Income for such period, all extraordinary gains 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
Consolidated EBITDA for the Borrower and its Subsidiaries for such period plus
(ii) to the extent deducted in the calculation of Consolidated Net Income of the
Borrower and its Subsidiaries for such period, Consolidated Rentals for such
period.
"Consolidated Interest Expense" shall mean, for any Person and
for any period, the total interest expense (including, without limitation,
interest expense attributable to Capitalized Leases in accordance with GAAP) of
such Person and its Subsidiaries for such period determined on a consolidated
basis in accordance with GAAP.
"Consolidated Net Income" shall mean for any Person and for any
period the net income (or loss) of such Person and its Subsidiaries on a
consolidated basis for such period (taken as a single accounting period) as
determined in accordance with GAAP minus (or plus) income (or losses)
attributable to Investments of the Borrower or any of its Subsidiaries which
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Investments are accounted for under the equity method of accounting to the
extent no cash is received with respect to any such income (or no cash is paid
with respect to any such loss) plus (or minus) any federal or state income tax
expense (or benefit) attributable to such income (or losses) from such
Investments.
"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, including, without
limitation, all Sale and Leaseback Debt.
"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 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
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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 2.20(b).
"Convertible 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.
"Convertible Subordinated Notes" shall mean the Convertible
Subordinated Notes issued by the Borrower pursuant to the Convertible
Subordinated Note Indenture, in the original aggregate principal amount of
$197,225,000, as the same may be amended, restated, supplemented or otherwise
modified in accordance with the terms of this Agreement; provided that such
Convertible Subordinated Notes shall at all times be subordinated in respect of
the Obligations on subordination terms contained in the Convertible Subordinated
Note Indenture.
"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 2.5(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.
"Domestic Subsidiary" shall mean any wholly-owned Subsidiary of
the Borrower that is organized under the laws of a state of the United States of
America, and which is a party to the Subsidiary Security Agreement, the Guaranty
and, if required pursuant to Section 2.20, a Subsidiary Pledge Agreement.
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"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) circumstances forming the basis of any violation, or alleged violation, of
any Environmental Law.
"Environmental Laws" shall mean all federal, state, local and
foreign laws and regulations relating to pollution or protection of human
health, 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 Closing Date 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.
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"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
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 2.6.
"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 Revolving Loans made and/or being
maintained at a rate of interest provided in Section 2.5(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.
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"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 Property Sale and Leaseback Transaction" shall have the
meaning provided in Section 7.13(a).
"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 modification shall, without the
prior written consent of the Required Lenders, (i) result in an increase of the
maximum face amount of the Existing Letter of Credit or (ii) modify any
provision thereof relating to the fees payable thereunder.
"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 March 4, 1999, as amended, from
time to time.
"Fees" shall mean all amounts payable pursuant to Section 2.14.
"FEI" shall mean Flagstar Enterprises, Inc., an Alabama
corporation and any successor entity permitted pursuant to the terms of this
Agreement.
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"FEI Acquisition" shall mean the acquisition of FEI and its
Subsidiaries and the other transactions contemplated by the FEI Acquisition
Documents.
"FEI Acquisition Documents" shall mean the FEI Purchase Agreement
and all agreements and instruments executed and delivered in connection
therewith.
"FEI Guaranties" shall mean guaranties of obligations of FEI 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, FEI and the
Borrower, dated as of February 18, 1998, together with all schedules and
exhibits referred to therein, each as previously delivered to the Agent and the
Lenders, 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 February 28, 2004.
"Fixed Charges" shall mean, without duplication, with respect to
the Borrower and its Subsidiaries for any period, (i) all Consolidated Cash
Interest Expense (excluding in respect of Capitalized Leases of the Borrower and
its Subsidiaries) for such period, plus (ii) scheduled payments due in such
period for principal of the Revolving Loans (including only such payments made
due to scheduled reductions in the Revolving Loan Commitments during such
period) 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 plus (v) the aggregate rent expense determined in
accordance with GAAP for such period attributable to Sale and Leaseback
Transactions, 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 or any of its Subsidiaries
is a party (as franchisee, licensee, franchisor or licensor) relating to the
operation or development of any Restaurant or Restaurants, including such
franchise and/or license agreements to which any of Borrower or any of its
Subsidiaries is a party as of the Closing Date and such franchise and/or license
agreements entered into from time to time after the Closing Date by the Borrower
or any of its Subsidiaries and shall include all other rights under such
agreements regardless of their nature.
"Franchisee Construction Debt" shall have the meaning provided in
Section 7.2(j).
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"GAAP" shall mean (i) for purposes of determining compliance with
the covenants set forth in Section 7 hereof, United States generally accepted
accounting principles as in effect on the Closing Date 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
Amended and Restated Guaranty set forth as Exhibit D hereto duly executed and
delivered to the Agent for itself, the Lenders and any Interest Rate Hedge
Providers by each Subsidiary of the Borrower (other than Immaterial Subsidiaries
which are not Subordinated Guarantors), 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 or any successor entity permitted pursuant to the terms of
this Agreement.
"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 Agreement.
"Hardee's Purchase Agreement" shall mean the Stock Purchase
Agreement among Imasco, Hardee's and the Borrower, dated April 27, 1997,
together with all schedules and exhibits referred to therein, each in the form
previously delivered to the Agent and the Lenders, without giving effect to any
amendment, modification or waiver of any material term thereof effected without
the written consent of the Required Lenders.
"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) and 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, at any time, (a) any
Investment owned by the Borrower or any Subsidiary consisting of Capital Stock
of any Person that is not a Subsidiary of the Borrower and which, when added to
all other Investments held by the
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Borrower and/or its Subsidiaries consisting of Capital Stock of such Person does
not exceed $1,000,000 at any one time outstanding and (b) any Investment owned
by the Borrower or any Subsidiary consisting of an Instrument payable by any
Person that is not a Subsidiary of the Borrower and which, when added to all
other Investments held by the Borrower and/or its Subsidiaries consisting of
Instruments payable by such Person does not exceed $2,000,000 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 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, (x) all
Sale and Leaseback Debt and (xi) all indebtedness and other obligations of the
types specified in clauses (i) through (x) 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 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.
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"Instrument" shall have the meaning ascribed thereto in the UCC.
"Interest Period" shall have the meaning provided in Section 2.6.
"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, partner ship 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 Paribas (and its successors), in its
capacity as issuer of one or more Letters of Credit hereunder.
"L/C Amendment Application" shall mean an application form for
amendment of outstanding Letters of Credit as shall at any time be in use at the
Issuing Bank, as the Issuing Bank shall request.
"L/C Application" shall mean an application form for issuance of
Standby Letters of Credit or Trade Letters of Credit, as appropriate, as shall
at any time be in use at the Issuing Bank, as the Issuing Bank shall request.
"L/C Commitment" shall mean the commitment of the Issuing Bank to
Issue, and the commitment of the Lenders severally to participate in, Letters of
Credit from time to time Issued or outstanding under Section 3, in an aggregate
amount not to exceed on any date the amount of $75,000,000, provided, that the
L/C Commitment is part of the Total Revolving Loan Commitment, rather than a
separate, independent commitment.
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"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) (i) Adjusted
Consolidated EBITDA of the Borrower and its Subsidiaries for the period of four
(4) consecutive fiscal quarters most recently ended on or prior to such date
plus (ii) to the extent deducted in the calculation of Consolidated Net Income
of the Borrower and its Subsidiaries for such period, all rent expense
determined in accordance with GAAP for such period attributable to Sale and
Leaseback Transactions, all determined on a consolidated basis for the Borrower
and its Subsidiaries for such period.
"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 (other than a Subsidiary of any Domestic
Subsidiary) owned by a Loan Party which Equity Interest is pledged pursuant to
any of the Security Documents.
"Loan Documents" shall mean this Agreement, the Revolving 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
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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.
"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, 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.
"Multiemployer Plan" shall mean a Plan which is a "multiemployer
plan" as defined in Section 4001(a)(3) of ERISA.
"Net Debt Proceeds" means all cash proceeds received by the
Borrower or any of its Subsidiaries from the incurrence of, or the issuance of
any instruments relating to, any Indebtedness (other than (i) Indebtedness
borrowed by the Borrower under this Agreement, (ii) Indebtedness permitted to be
incurred pursuant to Section 7.2(g), (iii) Indebtedness permitted to be incurred
pursuant to Section 7.2(i), and (iv) Indebtedness permitted to be incurred
pursuant to Section 7.2(m) with respect to Sale and Leaseback Transactions), 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), net of
any reasonable and customary brokerage commissions, underwriting fees and
discounts and any other similar reasonable and customary costs or expenses
directly attributable to such issuance.
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"Net Sale Proceeds" shall mean, with respect to (a) any Asset
Disposition, all proceeds in the form of cash or cash equivalents 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 proceeds in the form
of cash or cash equivalents 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 or cash equivalents, 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.
"New Property Sale and Leaseback Transaction" shall have the
meaning provided in Section 7.13(a).
"New Subordinated Note Indenture" shall mean that certain
Indenture among the Borrower, certain Subsidiaries of the Borrower, and Chase
Manhattan Bank and Trust Company, National Association, as trustee, dated as of
March 4, 1999, as the same may be amended, restated, supplemented or otherwise
modified in accordance with the terms of this Agreement.
"New Subordinated Notes" shall mean the Senior Subordinated Notes
issued by the Borrower pursuant to the New Subordinated Note Indenture, in a
maximum principal amount not to exceed $287,500,000 in the aggregate, of which
$200,000,000 will be issued as of the Closing Date at the rate of 91/8% and due
2009 (the "Original Notes") and of which up to an additional $87,500,000 may be
issued at the Borrower's option at any time after the Closing Date on terms no
less favorable to the Borrower than the terms of the Original Notes and with a
maturity date of February 28, 2005, or thereafter, as the same may be amended,
restated, supplemented or otherwise modified in accordance with the terms of
this Agreement; provided that such New Subordinated Notes shall at all times be
subordinated in respect of the Obligations on subordination terms contained in
the New Subordinated Note Indenture; provided, further, that the term "New
Subordinated Notes" shall include any notes or instruments exchanged for then
outstanding New Subordinated Notes pursuant to the New Subordinated Note
Indenture.
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"Non-Utilization Fee" shall have the meaning provided in Section
2.14(c).
"Notice of Borrowing" shall have the meaning provided in Section
2.2(a).
"Notice of Conversion or Continuation" shall have the meaning
provided in Section 2.8(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 Revolving Loans and, to the extent chargeable under any Loan
Document, all charges, expenses, fees and attorney's fees.
"Original Credit Agreement" shall mean that certain Amended and
Restated Credit Agreement dated as of April 1, 1998 among the Borrower, the
lenders party thereto and Paribas, as Agent, as amended prior to the Closing
Date.
"Participant" shall have the meaning provided in Section 10.4(b).
"Paydown Amount" shall have the meaning provided in Section
2.11(b).
"Payment Date" shall mean the fifteenth day of each March, June,
September and December 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 Redemption" shall mean the redemption and repurchase
on or after October 23, 1998 by the Borrower of Convertible Subordinated Notes
for a purchase price not to exceed $85,000,000 in the aggregate, provided that
(i) the purchase price paid by the Borrower for such Convertible Subordinated
Notes shall be made at a discount equal to no less than 15% of the par value of
such Convertible Subordinated Notes in the aggregate, (ii) no
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redemption or repurchase shall occur on or after July 23, 1999 and (iii) any
such Convertible Subordinated Notes that are redeemed and repurchased shall be
delivered to the "trustee" under the Convertible Subordinated Note Indenture for
cancellation and shall not be reissued.
"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 the Closing Date, (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
and such Subsidiary's Obligations, respectively, 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.
"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 Closing Date,
(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 the percentage
obtained by dividing (A) such Lender's Revolving Loan Commitment (or the
aggregate outstanding
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principal balance of such Lender's Revolving Loans and all L/C Obligations in
which such Lender has an interest, if the Revolving Loan Commitments have been
terminated pursuant to the terms of this Agreement) by (B) the Total Revolving
Loan Commitment (or the aggregate outstanding principal balance of the Revolving
Loans and all L/C Obligations, if the Revolving Loan Commitments have been
terminated pursuant to the terms of this Agreement).
"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.
"Reduction Amount" shall have the meaning provided in Section
2.11(b).
"Reference Banks" shall mean Paribas and its successors, Wells
Fargo Bank N.A., U.S. National Bank Association and BankBoston, N.A.
"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
2.21.
"Reportable Event" has the meaning set forth in Section 4043(b)
of ERISA (other than a Reportable Event as to which the provision of 30 days
notice to the PBGC is waived under applicable regulations), or is the occurrence
of any of the events described in Section 4068(f) or 4063(a) of ERISA.
"Required Holders" shall mean William P. Foley II and C. Thomas
Thompson.
"Required Lenders" shall mean all Lenders whose Pro Rata Shares,
in the aggregate, are greater than 50%.
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"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 Loans" shall have the meaning provided in Section
2.1(a).
"Revolving Note" shall have the meaning provided in Section
2.4(a).
"Sale and Leaseback Debt" shall mean, at any date, with respect
to all Sale and Leaseback Transactions of the Borrower and its Subsidiaries, the
product of (A) seven (7.0) and (B) the aggregate annual rent expense for the
Borrower and its Subsidiaries determined on a consolidated basis in accordance
with GAAP for the period of four fiscal quarters commencing on the first day of
the next fiscal quarter attributable to such Sale and Leaseback Transactions,
whether or not actually paid.
"Sale and Leaseback Transactions" shall mean Existing Property
Sale and Leaseback Transactions and New Property Sale and Leaseback Transactions
in each case permitted to be entered into by the Borrower or any of its
Subsidiaries pursuant to Section 7.13(a).
"Secured Parties" shall have the meaning provided in the Borrower
Security Agreement and the Subsidiary Security Agreement.
"Security Documents" shall mean and include the Borrower Security
Agreement, the Subsidiary Security Agreement, the Guaranty, the Borrower Pledge
Agreement, the Subsidiary Pledge Agreements and all other security agreements,
pledge agreements, assignments and similar agreements executed in connection
with the Loan Documents.
"Seller Agreement" shall mean that certain Indemnification
Agreement dated as of July 14, 1997 between Imasco and the Borrower, 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
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claim, and "claim" means (x) a right to payment, whether or not such right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured, or unsecured, or
(y) a right to an equitable remedy for breach of performance if such breach
gives rise to a payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured, or unsecured. With respect to any such contingent
liabilities, such liabilities shall be computed at the amount which, in light of
all the facts and circumstances existing at the time, represents the amount
which can reasonably be expected to become an actual or matured liability.
"Standby Letter of Credit" shall mean any standby letter of
credit issued by the Issuing Bank pursuant to Section 3 and which is not a Trade
Letter of Credit.
"Subordinated Debt Documents" shall mean the Subordinated Notes
and the Subordinated Note Indentures.
"Subordinated Guarantor" shall mean each Subsidiary of the
Borrower that guarantees any Indebtedness or other obligations of the Borrower
or any Subsidiary of the Borrower under or with respect to any of the New
Subordinated Notes.
"Subordinated Note Indentures" shall mean the Convertible
Subordinated Note Indenture and the New Subordinated Note Indenture.
"Subordinated Notes" shall mean the Convertible Subordinated
Notes and the New Subordinated Notes.
"Subsidiary" of any Person shall mean and include (i) any
corporation more than 50% 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 or controlled by such
Person directly or indirectly through one or more Subsidiaries and (ii) any
partnership, limited liability company, association, joint venture or other
entity in which such Person, directly or indirectly through one or more
Subsidiaries, is either a general partner or has a more than 50% equity interest
at the time. Unless otherwise expressly provided, all references to a
"Subsidiary" shall mean a Subsidiary of the Borrower.
"Subsidiary Pledge Agreement" shall mean each pledge agreement
substantially in the form of the Amended and Restated Subsidiary Pledge
Agreement set forth as Exhibit E hereto duly 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.
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"Subsidiary Security Agreement" shall mean a security agreement
substantially in the form of the Amended and Restated Subsidiary Security
Agreement set forth as Exhibit F hereto duly 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.
"Surviving Debt" shall have the meaning provided in Section
4.1(r).
"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 2.1(a).
"Trade Letter of Credit" shall mean any Letter of Credit that is
issued pursuant to Section 3 for the benefit of a supplier of inventory to the
Borrower or any of its Subsidiaries to effect payment for such inventory.
"Transaction Costs" shall mean all costs and expenses paid or
payable by any Loan Party relating to the Transactions including, without
limitation, investment banking fees, financing fees, advisory fees, appraisal
fees, legal fees and accounting fees.
"Transaction Documents" shall mean the Loan Documents and the
Subordinated Debt Documents.
"Transactions" shall mean the Initial Debt 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 Revolving Loan determined with
respect to the interest option applicable thereto, i.e., a Base Rate Loan or a
Eurodollar Loan.
"Unfunded Benefit Liabilities" means with respect to any Plan at
any time, the amount (if any) by which (i) the present value of all benefit
liabilities under such Plan as defined in Section 4001(a)(16) of ERISA, exceeds
(ii) the fair market value of all Plan assets allocable to such benefits, all
determined as of the then most recent valuation date for such
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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 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 Revolving Loans. (a) Subject to and upon the terms
and conditions herein set forth, each Lender severally and not jointly agrees,
at any time and from time to time on and after the Closing Date and prior to the
Final 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 $500,000,000. 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 2.2 and Section 2.16) 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 2.10, 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 Revolving Loan Commitments have not already expired
pursuant to Section 2.1(a) hereof), and each Revolving Loan shall mature on, the
Final Maturity Date, without further action on the part of the Lenders or the
Agent.
(c) Any Borrowing of Base Rate Loans shall be in the
aggregate minimum amount of $1,000,000 or any integral multiple of $500,000 in
excess thereof.
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Section 2.2 Notice of Borrowing. (a) Whenever the Borrower
desires to borrow Revolving 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 shall be in the form of
Exhibit G hereto (a "Notice of Borrowing") shall be irrevocable and shall
specify (i) the aggregate principal amount of the requested Revolving Loans,
(ii) the date of Borrowing (which shall be a Business Day), and (iii) whether
such Revolving 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 Revolving Loans requested thereunder.
Section 2.3 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 Revolving 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 Revolving
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 Revolving 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 2.5, for the respective Revolving Loans. Nothing herein
shall be deemed to relieve any Lender from its obligation to fulfill its
commitments hereunder or to prejudice any rights which the Borrower may have
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against any Lender as a result of any default by such Lender hereunder.
Notwithstanding anything contained herein or in any other Loan Document to the
contrary, the Agent may apply all funds and proceeds of Collateral available for
the payment of any Obligations first to repay any amount owing by any Lender to
the Agent as a result of such Lender's failure to fund its Revolving Loans
hereunder.
Section 2.4 Revolving Notes. (a) The Borrower's obligation to pay
the principal of, and interest on, each Lender's Revolving Loans shall be
evidenced by 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 A
hereto in a principal amount equal to such Lender's Revolving Loan Commitment,
with blanks appropriately completed in conformity herewith. Each Revolving 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 Revolving Note was issued, and (z)
mature on the Final Maturity Date.
(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 Revolving 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 2.5 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 Revolving Loan until such Revolving 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, subject to the provisions of
clause (c) of this Section 2.5.
(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 Revolving Loan until such Revolving 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, subject to the
provisions of clause (c) of this Section 2.5.
(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 Revolving Loans and, to
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the extent permitted by law, overdue interest in respect of all Revolving 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 Revolving Loan shall accrue from and
including the date of the Borrowing thereof to but excluding the date of any
repayment thereof (provided that any Revolving 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
March 15, 1999, (ii) in respect of each Eurodollar Loan, on the last day of each
Interest Period applicable to such Revolving 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 Revolving 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 2.5(b), and the rate, if any, furnished by each
Reference Bank for the purpose of determining the interest rate under Section
2.5(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 Revolving 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 Revolving 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 2.6 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 Revolving
Loan (including the date of any conversion from a Base Rate Loan)
and each Interest Period occurring thereafter in respect of such
Revolving 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 shall extend beyond the Final Maturity 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 2.7 Minimum Amount of Eurodollar Loans. All borrowings,
conversions, continuations, payments, prepayments and selection of Interest
Periods hereunder shall be made or selected so that, after giving effect
thereto, (i) the aggregate principal amount of any Borrowing comprised of
Eurodollar Loans shall not be less than $3,000,000 or an integral multiple of
$500,000 in excess thereof, and (ii) there shall be no more than twenty (20)
Borrowings comprised of Eurodollar Loans outstanding at any time.
Section 2.8 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,
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(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 Revolving 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 Revolving
Loan under this Section 2.8, 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 of the
Revolving 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
2.8(b), the Agent shall provide each Lender with a copy thereof.
Section 2.9 Reduction of Revolving Loan Commitments. (a) 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.
(b) Commencing on the first Payment Date following the
second anniversary of the Closing Date, and on each Payment Date thereafter
(each a "Commitment Reduction Date"), each Lender's Revolving Loan Commitment
shall be permanently reduced by such Lender's Pro Rata Share of the lesser of
(X) $12,500,000 and (Y) the Total Revolving Loan Commitment on each such
Commitment Reduction Date. Concurrently with each such reduction, the Borrower
shall make such payments and provide such cash collateralization as may be
required by Section 2.11(e) and Section 2.11(f).
Section 2.10 Voluntary Prepayments. The Borrower shall have the
right to prepay the Revolving 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 Revolving 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
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such prepayment and what Types of Revolving Loans are to be prepaid and, in the
case of Eurodollar Loans, the specific Borrowing(s) pursuant to which made, and
which notice the Agent shall promptly transmit to each of the Lenders, and (ii)
each prepayment shall be in an aggregate principal amount of $1,000,000 or any
integral multiple of $500,000 in excess thereof; provided that if any prepayment
of Eurodollar Loans is made pursuant to this Section 2.10 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 2.16.
Section 2.11 Mandatory Prepayments. (a) Upon the consummation of
any Asset Disposition (other than any Sale and Leaseback Transaction of the
Borrower or any of its Subsidiaries permitted pursuant to Section 7.13(a)) after
March 1, 1998, or upon receipt by any Loan Party of any Liquidating Distribution
after March 1, 1998, in each case within three hundred sixty (360) days after
the Borrower or any of its Subsidiaries receives any Net Sale Proceeds with
respect to any such Asset Disposition or Liquidating Distribution, the Borrower
shall prepay the outstanding Revolving Loans in an amount equal to 100% of the
amount of such Net Sale Proceeds, in accordance with the provisions of Section
2.12; 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 in
non-current assets as permitted by the terms of this Agreement, shall not be
included in determining the aggregate Net Sale Proceeds pursuant to this
sentence 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
Revolving 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 in accordance with the provisions of Section 2.12.
(b) Upon the consummation of any Asset Disposition which
constitutes the sale portion of a Sale and Leaseback Transaction permitted
pursuant to Section 7.13(a) after March 1, 1998, (1) within thirty (30) days
after the Borrower or any of its Subsidiaries receives any Net Sale Proceeds
with respect to any such Asset Disposition that constitutes an Existing Property
Sale and Leaseback Transaction, the Borrower shall prepay the outstanding
Revolving Loans in an amount equal to the lesser of (x) 25% of the amount of
such Net Sale Proceeds (without giving effect to any amounts reinvested in the
business of the Borrower or its Subsidiaries during such 30 day period,
notwithstanding anything to the contrary contained herein) and (y) the then
outstanding Obligations under the Revolving Loans (the "Paydown Amount") in
accordance with the provisions of Section 2.12 and (2) within five hundred forty
(540) days after the Borrower or any of its Subsidiaries receives any Net Sale
Proceeds with
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respect to any Asset Disposition, the Borrower shall prepay the outstanding
Revolving Loans in an amount equal to the lesser of (x) 100% of such Net Sale
Proceeds and (y) the then outstanding Obligations under the Revolving Loans (in
each case, less the Paydown Amount to the extent paid) (the "Reduction Amount"),
in accordance with the provisions of Section 2.12; provided, however, that such
Net Sale Proceeds which the Borrower or such Subsidiary shall, within five
hundred forty (540) days after the receipt thereof, use to reinvest in the
business of the Borrower or its Subsidiaries in non-current assets as permitted
by the terms of this Agreement, shall not be included in determining the
aggregate Net Sale Proceeds with respect to the sale portion of Sale and
Leaseback Transactions permitted pursuant to Section 7.13(a) 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 five hundred forty
(540) day period, then the Borrower shall prepay the outstanding Revolving 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
in accordance with the provisions of Section 2.12.
(c) On each date on which the Borrower or any of its
Subsidiaries receives any Net Equity Proceeds, the Borrower shall prepay the
outstanding Revolving 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 2.11(c), 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 2.11(c) shall apply (unless clause (ii)(B) of
this Section 2.11(c) 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 6.1(e), as applicable, in each case in
accordance with the provisions of Section 2.12.
(d) On each date on which the Borrower or any of its
Subsidiaries receives any Net Debt Proceeds, becomes or remains liable with
respect to Indebtedness with respect to Capitalized Leases in excess of
$130,000,000 in the aggregate at any one time outstanding for the Borrower and
its Subsidiaries, or assumes any Indebtedness in connection
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with a Permitted Acquisition pursuant to Section 7.2(l), the Borrower shall
prepay the outstanding Revolving 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 2.12.
(e) On each day on which the Total Revolving Loan
Commitment is reduced pursuant to Section 2.9, the Borrower shall prepay the
Revolving Loans to the extent, if any, that the outstanding principal amount of
the Revolving Loans exceeds such reduced Total Revolving Loan Commitment.
(f) If at any time and for any reason the aggregate
principal amount of Revolving Loans plus the L/C Obligations then outstanding
are greater than the Total Revolving Loan Commitment, the Borrower shall
immediately prepay the Revolving Loans in an amount equal to such excess. In
addition, to the extent at any time and for any reason, the Total Revolving Loan
Commitment minus the aggregate principal amount of Revolving Loans then
outstanding, is less than the amount of L/C Obligations outstanding at such
time, the Borrower shall Cash Collateralize the L/C Obligations in an amount
equal to the amount by which such L/C Obligations exceed the amount equal to the
difference between the Total Revolving Loan Commitment and such aggregate
principal amount of Revolving Loans.
(g) Nothing in this Section 2.11 shall be construed to
constitute the Lenders' consent to any transactions referred to in Sections
2.11(a), 2.11(b), 2.11(c) or 2.11(d) above which transaction is not expressly
permitted by the terms of this Agreement.
Section 2.12 Application of Prepayments. (a) All prepayments of
the Revolving Loans required by clauses (a) through (d) of Section 2.11 shall be
applied first, to prepay the Revolving Loans until such Revolving Loans shall
have been repaid in full, together with accrued and unpaid interest thereon, and
second, to Cash Collateralize the then outstanding Letters of Credit and, third,
to all other outstanding Obligations. If (i) at the time of any prepayment of
the principal amount of the Revolving Loans pursuant to clause (c) or clause (d)
of Section 2.11, either (A) the Leverage Ratio as of the end of the fiscal
quarter immediately preceding such date as to which financial statements are
required to have been delivered pursuant to Section 6.1(a) or 6.1(b), as
applicable, is greater than or equal to 2.0 or (B) any Default has occurred and
is continuing as a result of the Borrower's failure to deliver any financial
statement or Compliance Certificate as and when required pursuant to Section
6.1(a), 6.1(b) or 6.1(e), as applicable, then simultaneously with any prepayment
of the principal amount of the Revolving Loans pursuant to the preceding
sentence, each Lender's Revolving Loan Commitment shall be permanently reduced
by such Lender's Pro Rata Share of such prepayment, (ii) at the time of any
prepayment of the principal amount of the Revolving Loans pursuant to clause
(c) or clause (d) of Section 2.11, both (A) the Leverage Ratio as
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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, and (iii) any prepayment of the principal amount
of the Revolving Loans is required pursuant to clause (a) of Section 2.11, then
simultaneously with any such prepayment of the principal amount of the Revolving
Loans each Lender's Revolving Loan Commitment shall be permanently reduced by
such Lender's Pro Rata Share of such prepayment.
(b) If any prepayment of the principal amount of the
Revolving Loans is required pursuant to clause (b) of Section 2.11:
(i) if no Paydown Amount was required to be paid
pursuant to Section 2.11(b)(1), then simultaneously with the payment of the
Reduction Amount each Lender's Revolving Loan Commitment shall be permanently
reduced by such Lender's Pro Rata Share of such payment; and
(ii) if a Paydown Amount was required to be paid
pursuant to Section 2.11(b)(1) and a Reduction Amount is required to be paid
pursuant to Section 2.11(b)(2), then simultaneously with the payment of the
Reduction Amount each Lender's Revolving Loan Commitment shall be permanently
reduced by such Lender's Pro Rata Share of such payment plus such Lender's Pro
Rata Share of the Paydown Amount required to be so paid.
Section 2.13 Method and Place of Payment. (a) Except as otherwise
specifically provided herein, all payments and prepayments under this Agreement
and the Revolving 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
Revolving 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.
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(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 2.14 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 Closing Date to the Final Maturity Date.
(c) Upon the consummation of any Sale and Leaseback
Transaction by the Borrower or any of its Subsidiaries pursuant to Section
7.13(a), in the event that the Borrower uses less than seventy-five percent
(75%) of the proceeds of any such Sale and Leaseback Transaction to prepay the
Revolving Loans and to permanently reduce each Lender's Revolving Loan
Commitment pursuant to Section 2.12 hereof within 30 days of receipt of such
proceeds by the Borrower or any such Subsidiary of the Borrower, the Borrower
agrees to pay to the Agent for the account of each Lender a non-utilization fee
(the "Non-Utilization Fee"). The Non-Utilization Fee for each day shall be
computed at the rate per annum of 0.125% multiplied by each such Lender's Pro
Rata Share of the Unused Portion; provided that the Non-Utilization Fee shall
only be payable for each quarterly period ending on a Payment Date during which
the average daily Unused Portion exceeds 70% of the Total Revolving Loan
Commitment in effect at such time, and shall be paid in addition to the
Commitment Fee.
(d) The Commitment Fee shall accrue from and including the
Closing Date to but excluding the Final Maturity Date. The Non-Utilization Fee
shall accrue for each quarterly period as described in clause (c) of this
Section 2.14 until the Final Maturity Date. Accrued fees under this Section 2.14
shall be payable on the Closing Date and payable quarterly in arrears on each
Payment Date, commencing April 15, 1999, and on the Final 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, the Non-Utilization 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 2.15 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):
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(i) on any date for determining the Eurodollar
Rate for any Interest Period, that by reason of any changes
arising after the Closing Date affecting the interbank Eurodollar
market, adequate and fair means do not exist for ascertaining the
applicable interest rate on the basis provided for in the
definition of the Eurodollar Rate; or
(ii) at any time, that the relevant Eurodollar Rate
applicable to any of its Revolving 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 Closing Date 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 Closing Date which materially and
adversely affects the interbank Eurodollar market;
then, and in any such event, the Agent or such Lender shall, promptly after
making such determination, give notice (by telephone promptly confirmed in
writing) to the Borrower and (if applicable) the Agent of such determination
(which notice the Agent shall promptly transmit to each of the other Lenders).
Thereafter (x) in the case of clause (i) above, the Borrower's right to request
Eurodollar Loans shall be suspended, and any Notice of Borrowing or Notice of
Conversion or Continuation given by the Borrower with respect to any Borrowing
of Eurodollar Loans which has not yet been made shall be deemed cancelled and
rescinded by the Borrower, (y) in the case of clause (ii) above, the Borrower
shall pay to such Lender, upon 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
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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 2.16 Funding Losses. The Borrower shall compensate each
Lender, upon such Lender's delivery of a written demand therefor to the
Borrower, with a copy to the Agent (which demand shall set forth the basis for
requesting such amounts and shall, absent manifest error, be final and
conclusive and binding upon all of the parties hereto), for all reasonable
losses, expenses and liabilities (including, without limitation, any loss,
expense or liability incurred by such Lender in connection with the liquidation
or reemployment of deposits or funds required by it to make or carry its
Eurodollar Loans), that such Lender 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,
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pursuant to Section 2.15(a) or 2.15(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 2.16 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 2.16.
Section 2.17 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 2.18 Taxes. (a) All payments made by the Borrower under
this Agreement shall be made free and clear of, and without reduction or
withholding for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any
governmental authority excluding, in the case of the Agent and each Lender, net
income and franchise taxes imposed on the Agent or such Lender by the
jurisdiction under the laws of which the Agent or such Lender is organized or
any political subdivision or taxing authority thereof or therein, or by any
jurisdiction in which such Lender's Domestic Lending Office or Eurodollar
Lending Office, as the case may be, is located or any political subdivision or
taxing authority thereof or therein (all such non-excluded taxes, levies,
imposts, deductions, charges or withholdings being hereinafter called "Taxes").
If any Taxes are required to be withheld from any amounts payable to the Agent
or any Lender hereunder or under the Revolving 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 Revolving Notes. Whenever
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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 2.18 shall survive the termination
of this Agreement and the payment of the Revolving 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 Revolving Notes payable to it,
without deduction or withholding of any United States federal income taxes, and
(ii) an Internal Revenue Service Form W-8 or W-9 or successor applicable form,
as the case may be, to establish an exemption from United States backup
withholding tax. Each Lender which delivers to the Borrower and the Agent a Form
1001 or 4224 and Form W-8 or W-9 pursuant to the preceding sentence further
undertakes to deliver to the Borrower and the Agent two further copies of the
said letter and Form 1001 or 4224 and Form W-8 or W-9, or successor applicable
forms, or other manner of certification, as the case may be, on or before the
date that any such letter or form expires or becomes obsolete or after the
occurrence of any event requiring a change in the most recent letter and form
previously delivered by it to the Borrower, and such extensions or renewals
thereof as may reasonably be requested by the Borrower, certifying in the case
of a Form 1001 or 4224 that such Lender is entitled to receive payments under
this Agreement without deduction or withholding of any United States federal
income taxes, unless in any such case an event (including, without limitation,
any change in treaty, law or regulation) has occurred prior to the date on which
any such delivery would otherwise be required which renders all such forms
inapplicable or which would prevent such Lender from duly completing and
delivering any such letter or form with respect to it and such Lender advises
the Borrower that it is not capable of receiving payments without any deduction
or withholding of United States federal income tax, and in the case of a Form
W-8 or W-9, establishing an exemption from United States backup withholding tax.
Section 2.19 Use of Proceeds. The proceeds of the Revolving Loans
shall be used to refinance Indebtedness under the Original Credit Agreement and
for the Borrower's working capital and general corporate purposes which shall
include, but not be limited to, Restaurant renovations and Permitted
Acquisitions.
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Section 2.20 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 (or other equity interests of each Subsidiary if such
Subsidiary is not a corporation) of each Subsidiary of the Borrower now or
hereafter directly or indirectly owned by the Borrower and all proceeds thereof,
all as more specifically described in the Borrower Pledge Agreement and the
Subsidiary Pledge Agreements; (ii) certain of the assets of the Borrower and all
proceeds thereof, all as more specifically described in the Borrower Security
Agreement; and (iii) certain of the assets of each Subsidiary now or hereafter
directly or indirectly owned by the Borrower and all proceeds thereof, all as
more specifically described in the Subsidiary Security Agreement. To the extent
the Agent for the benefit of the Lenders does not have a first priority
perfected security interest in any assets of the Borrower or any other Loan
Party required to be pledged as described above which is of the type described
in the Borrower Security Agreement, the Borrower Pledge Agreement, the
Subsidiary Pledge 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 (whether by purchase, merger,
contribution, license or otherwise) 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, except as otherwise
provided in Section 6.11 or any Security Document) (an "Acquiring Subsidiary")
or the formation of any new Subsidiary (other than a Subsidiary which, after
giving effect to any such acquisition, is an Immaterial Subsidiary, except as
otherwise provided in Section 6.11 or any Security Document) of the Borrower or
upon an Immaterial Subsidiary ceasing to qualify or be designated as an
Immaterial Subsidiary (conversion from the status of an Immaterial Subsidiary
to a Subsidiary which is not an Immaterial Subsidiary is hereinafter referred to
as a "Conversion"), the Borrower shall
(i) in the case of a Permitted Acquisition of stock
or other equity interest or any other acquisition of stock or
other equity interest (whether by purchase, merger, contribution,
license or otherwise) by the Borrower or any
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such Acquiring Subsidiary of the Borrower or the formation of
such a new Subsidiary or a Conversion: (A) deliver or cause to be
delivered to the Agent all of the certificates representing the
capital stock (or other equity interest if such equity interests
are represented by a certificate or certificates) of such new
Subsidiary which is being acquired or formed or converted (or
Investment if such Investment is not an Immaterial Investment),
beneficially owned by the Borrower or such Acquiring 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 Acquiring Subsidiary (which is not already a
party thereto) or 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 Acquiring Subsidiary or such new or converted
Subsidiary, as the case may be, 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 or other equity interest or if such
Acquiring Subsidiary is not already a party to a Subsidiary
Pledge Agreement, a Subsidiary Pledge Agreement duly executed by
such new or converted Subsidiary or such Acquiring Subsidiary, as
the case may be, 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, (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, and (4) ten (10)
days prior written notice of any such Permitted Acquisition,
other acquisition, formation or Conversion.
(ii) in the case of a Permitted Acquisition of
assets or any other acquisition of assets (including equity
interests of a Person other than a corporation) (whether by
purchase, merger, contribution, license or other wise) by the
Borrower or any such Acquiring Subsidiary which is of the type
described in the Borrower Security Agreement or the Subsidiary
Security Agreement or the formation of such a new Subsidiary or a
Conversion into a Person which in either case is not a
corporation, deliver or cause to be delivered by the Borrower or
such Acquiring Subsidiary acquiring such assets or forming such
new Subsidiary, (A) such Uniform Commercial Code financing
statements as shall be required to perfect the security interest
of the Agent and the Lenders
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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,
(C) any additional instruments or documents evidencing the
security interest of the Agent reasonably required by the Agent
and (D) ten (10) days prior written notice of any such Permitted
Acquisition, other acquisition, formation or Conversion; and
(iii) in any case (A) provide such other
documentation, including, without limitation, one or more
opinions of counsel reasonably satisfactory to the Agent,
articles of incorporation, by-laws and resolutions, which in the
reasonable opinion of the Agent is necessary or advisable in
connection with such Permitted Acquisition or formation of such
new Subsidiary or other acquisition (whether by purchase,
merger, contribution or other wise) or Conversion, (B) cause any
newly formed or acquired Immaterial Subsidiary which is or is to
become a Subordinated Guarantor, to execute and deliver a
counterpart to the Guaranty, and (C) if, as a result of the
consummation of any transaction or transactions, there is a
significant change in the information provided by the Borrower on
Schedule 5.18, promptly provide the Agent with a new schedule
which reflects the then current corporate structure of the
Borrower and its Subsidiaries certified by an Authorized Officer
of the Borrower.
Section 2.21 Replacement of Certain Lenders. If a Lender
("Affected Lender") shall have requested compensation from the Borrower under
Sections 2.15, 2.17 or 2.18 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 2.15(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 Revolving 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 Revolving
Loans owed to such Lender, together with accrued interest thereon through the
date of such assignment from the Replacement Lender,
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amounts payable under Sections 2.15, 2.17 and 2.18 with respect to such Affected
Lender and compensation payable under Section 2.14; 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 2.15, 2.16,
2.17, 2.18 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 Final Maturity Date, the Issuing Bank
shall issue such Letters of Credit for the account of the Borrower or any
Subsidiary of the Borrower which is a party to the Guaranty as Borrower may
request by an L/C Application; provided that, giving effect to such Letter of
Credit, (x) the sum of the L/C Obligations then outstanding plus the then
outstanding aggregate principal amount of the Revolving Loans shall not exceed
the Total Revolving Loan Commitment and (y) the aggregate L/C Obligations then
outstanding shall not exceed the L/C Commitment. Unless all the Lenders and the
Issuing Bank otherwise consent in writing, the term of any Letter of Credit
shall not exceed 12 months. No Letter of Credit shall expire by its terms after
the Final 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
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payment. The obligation of each Lender to so reimburse the Issuing Bank shall be
absolute and unconditional and shall not be affected by the occurrence of a
Default, Event of Default or any other occurrence or event. Any such
reimbursement shall not relieve or otherwise impair the obligation of Borrower
to reimburse the Issuing Bank for the amount of any payment made by the Issuing
Bank under any Letter of Credit together with interest as hereinafter provided.
(d) Upon the making of any payment with respect to any
Letter of Credit by the Issuing Bank, Borrower shall be deemed to have submitted
a Notice of Borrowing for a Revolving Loan consisting of a Base Rate Loan in
the amount of such payment, and the Agent shall without notice to or the consent
of Borrower cause Revolving Loans to be made by the Lenders in an aggregate
amount equal to the amount paid by the Issuing Bank on that Letter of Credit,
but not exceeding the Total Revolving Loan Commitment minus the then outstanding
principal amount of Revolving Loans and minus all other then outstanding L/C
Obligations, and for this purpose, the conditions precedent set forth in Section
4 hereof shall not apply. The proceeds of such Revolving Loans shall be paid to
the Issuing Bank to reimburse it for the payment made by it under the Letter of
Credit. Promptly following any Revolving Loans made under this Section 3.1(d),
the Agent shall notify Borrower thereof.
(e) To the extent that any Revolving Loans made pursuant
to Section 3.1(d) are insufficient to reimburse the Issuing Bank in full,
Borrower agrees to pay to the Issuing Bank with respect to each Letter of
Credit, within one Business Day after demand therefor, a 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 Agreement, 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
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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 March 15, 1999,
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 March 15, 1999. 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 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
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any respect whatsoever so long as any such document appeared to
comply with the terms of the Letter of Credit;
(5) payment by the Issuing Bank in good faith
under the Letter of Credit against presentation of a draft or any
accompanying document which does not strictly comply with the
terms of the Letter of Credit;
(6) the existence, character, quality,
quantity, condition, packing, value or delivery of any property
purported to be represented by documents presented in connection
with any Letter of Credit or for any difference between any such
property and the character, quality, quantity, condition or value
of such property as described in such documents;
(7) the time, place, manner, order or contents
of shipments or deliveries of property as described in documents
presented in connection with any Letter of Credit or the
existence, nature and extent of any insurance relative thereto;
(8) the solvency or financial responsibility
of any party issuing any documents in connection with a Letter of
Credit;
(9) any failure or delay in notice of
shipments or arrival of any property; and
(10) any other circumstances whatsoever.
(b) As among the Borrower, the Lenders, the Issuing Bank
and the Agent, the Borrower assumes all risks of the acts and omissions of, or
misuse of such Letter 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
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the rights or benefits thereunder or proceeds thereof, in whole
or in part, which may prove to be invalid or ineffective for any
reason;
(iii) for the failure of the beneficiary of a
Letter of Credit to comply duly with conditions required in order
to draw upon such Letter of Credit;
(iv) for errors, omissions, interruptions or delays
in transmission or delivery of any messages, by mail, cable,
telegraph, telex, or other similar form of teletransmission or
otherwise;
(v) for errors in interpretation of technical trade
terms;
(vi) for any loss or delay in the transmission or
other wise of any document required in order to make a drawing
under any Letter of Credit or of the proceeds thereof;
(vii) for the misapplication by the beneficiary of
a Letter of Credit of the proceeds of any drawing under such
Letter of Credit; and
(viii) for any consequences arising from causes
beyond the control of the Agent, the Issuing Bank and the Lenders
including, without limitation, any act or omission, whether
rightful or wrongful, of any present or future de jure or de
facto government or governmental authority.
None of the above shall affect, impair, or prevent the vesting of any of the
Issuing Bank's rights or powers hereunder.
(c) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted by the
Issuing Bank under or in 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 Revolving Loans. The
obligation of each Lender to make its initial Revolving Loans and of the Issuing
Bank to Issue any Letter of
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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 exe-
cuted and delivered this Agreement to the Agent.
(ii) Revolving Notes. The Borrower shall have
executed and delivered to each of the Lenders the appropriate
Revolving Notes in the amount, maturity and as otherwise provided
herein.
(iii) Borrower Security Agreement. The Borrower
shall have executed and delivered to the Agent the Borrower
Security Agreement.
(iv) Subsidiary Security Agreement. Each Subsidiary
of the Borrower (other than any such Subsidiary which is an
Immaterial Subsidiary) shall have duly executed and delivered to
the Agent the Subsidiary Security Agreement.
(v) Borrower Pledge Agreement. The Borrower shall
have executed and delivered to the Agent the Borrower Pledge
Agreement.
(vi) Subsidiary Pledge Agreements. Each Subsidiary
of the Borrower that owns any Equity Interest in any Person as of
the Closing Date (other than an equity interest in Boston West,
L.L.C. and other than in an Immaterial Subsidiary) shall have
duly executed and delivered to the Agent a Subsidiary Pledge
Agreement.
(vii) Guaranty. Each Subsidiary of the Borrower
(other than any Immaterial Subsidiary that is not a Subordinated
Guarantor) shall have executed and delivered to the Agent the
Guaranty.
(b) Opinions of Counsel. The Agent shall have received (A)
a legal opinion, dated the Closing Date, from Stradling Yocca Carlson & Rauth,
counsel to the Loan Parties, substantially in the form set forth as Exhibit H-1
hereto, (B) legal opinions, dated the Closing Date, from Locke Liddell & Sapp
LLP, special Texas counsel to the Loan Parties substantially in the form of
Exhibit H-2 hereto, Kilpatrick Stockton LLP, special North Carolina and Georgia
counsel to the Loan Parties substantially in the form of Exhibit H-3 hereto, and
Burr & Forman LLP, special Alabama counsel to the Loan Parties substantially in
the form of Exhibit H-4 hereto, and (C) such other legal opinions, each dated
the Closing
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Date, from local counsel to the Loan Parties as requested by the Agent with
respect to such matters as requested by the Agent and in form and substance
satisfactory to the Agent.
(c) Corporate Documents. The Agent shall have received the
Certificate of Incorporation, partnership agreement or other similar
organizational document of each of the Loan Parties as amended, modified or
supplemented to the Closing Date, (other than in the case of a general
partnership) certified to be true, correct and complete by the appropriate
Secretary of State as of a date not more than ten Business Days prior to the
Closing Date, together with a good standing certificate from such Secretary of
State and a good standing certificate from the Secretaries of State (or the
equivalent thereof) of each other State in which each of them is required to be
qualified to transact business, each to be dated a date not more than ten
Business Days prior to the Closing Date and a bring-down good standing
certificate or telephonic confirmation from the appropriate Secretary of State
in each jurisdiction of incorporation of each Loan Party dated the Closing Date.
(d) Certified Resolutions, etc. The Agent shall have
received a certificate of the Secretary or Assistant Secretary of each of the
Loan Parties or of a general partner in the case of each Loan Party which is a
partnership and dated the Closing Date certifying (i) the names and true
signatures of the incumbent officers of such Person authorized to sign the
applicable Loan Documents, (ii) the By-Laws of such Person as in effect on the
Closing Date, (iii) the resolutions of such Person's Board of Directors
approving and authorizing the execution, delivery and performance of all
Transaction Documents executed by such Person, and (iv) that there have been no
changes in the Certificate of Incorporation of such Person since the date of the
most recent certification thereof by the appropriate Secretary of State or, in
the case of a partnership or other similar entity, the partnership agreement or
other similar organizational document.
(e) Transaction Documents. The Agent shall have received
copies of the Transaction Documents (other than the Loan Documents) and any
amendments, waivers or supplements thereto, certified as of the Closing Date by
the President or Vice President, of the Borrower to be true, correct and
complete copies of such documents, which documents shall be in form and
substance satisfactory to the Agent. The Agent shall have received copies of all
documents relating to existing Indebtedness for borrowed money or evidenced by a
note, 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
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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 January 31, 1998, no event
or change has occurred that has caused or evidences a Material Adverse Effect.
(h) Solvency Certificate. The Agent shall have received a
certificate signed by the Chief Financial Officer of the Borrower containing
conclusions that the Borrower and its Subsidiaries are Solvent before and after
giving effect to the Transactions.
(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
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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 November 2, 1998, giving effect to the Transactions and the payment
or accrual of all estimated Transaction Costs, certified by the chief financial
officer of the Borrower.
(m) [Intentionally Deleted]
(n) Pledged Collateral. The Agent shall have received (i)
the original stock, membership interest or partnership interest certificates
evidencing the Pledged Stock (as defined in the Borrower Pledge Agreement and
each Subsidiary Pledge Agreement) pursuant to the Borrower Pledge Agreement and
each Subsidiary Pledge Agreement (other than certificates representing any
shares of Pledged Stock of any Immaterial Subsidiary and any shares of Pledged
Stock which evidence an Immaterial Investment), together with undated stock
powers or similar instruments of assignment duly executed in blank in connection
therewith and (ii) each original Instrument pursuant to the Borrower Pledge
Agreement and each Subsidiary Pledge Agreement (other than any Instrument
evidencing an Immaterial Investment).
(o) Corporate Structure. The corporate structure of the
Loan Parties 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).
(p) Closing Compliance Certificate. The Agent shall have
received a certificate of the chief financial officer of the Borrower setting
forth the calculations required to establish the Leverage Ratio calculated as of
the end of the fiscal quarter of the Borrower ending November 2, 1998 (the
"Closing Compliance Certificate").
(q) Funded Debt and Capitalization. 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 Revolving
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 $100,000,000. The Agent shall have received evidence satisfactory to it
that the Borrower shall have received cash proceeds from the issuance of the New
Subordinated Notes, net of all brokerage commissions, underwriting fees,
discounts and Transaction Costs related to the issuance of the New Subordinated
Notes, in an aggregate amount not less than $95,000,000 (the "Initial Debt
Issuance"), and that such net cash proceeds have been applied to the payment of
outstanding obligations under the Original Credit Agreement.
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(r) Existing Indebtedness. The Agent shall have received
evidence satisfactory to the Agent and the Lenders that, after giving effect to
the consummation of the Transactions, (i) the Borrower and its Subsidiaries
shall not be liable for or have outstanding any Indebtedness which is of the
type of Indebtedness which would appear as a liability on (or would be required
to appear as a liability on) the consolidated balance sheet of the Borrower (and
not of the type required solely to be included in the footnotes thereto) and
which Indebtedness shall include, without limitation, Indebtedness for borrowed
money and Capitalized Lease Obligations, other than (A) the Revolving 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 $490,000,000 as of the Closing Date,
and (ii) the Borrower and each of its Subsidiaries shall have paid in full all
other Indebtedness of the Borrower and each of its Subsidiaries existing prior
to the making of the initial Revolving 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 and its
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 and its Subsidiaries with respect to Existing Debt other than
Surviving Debt, and (ii) such Form UCC-3 (or its equivalent), intellectual
property lien releases in recordable form in all applicable jurisdictions, and
other lien and mortgage release and termination agreements, evidence of release
of federal and state tax liens, all in form and substance satisfactory to the
Agent, as the Agent shall request, duly executed by the appropriate Person in
favor of which such Liens were granted.
(s) Environmental Matters. The Agent shall (i) be
satisfied that neither the Borrower nor any of its 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 or any
of its 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 reason able judgment) with all Environmental
Laws or other health or safety laws or regulations, (ii) be satisfied that
neither the Borrower nor any of its 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
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leased by the Borrower and each of its 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 and each of
its Subsidiaries, the other Loan Parties (if applicable) and each of their
Environmental Affiliates of which the Borrower or any of its 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 the Borrower or
any of its 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 Borrower shall have delivered
to the Agent such evidence as the Agent shall have requested, evidencing
compliance by the Borrower, its Subsidiaries 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 or any of its
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
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all Franchise Agreements to which the Borrower or any of its 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 January 31, 1998 that has had a Material Adverse
Effect.
(z) Litigation. The Agent shall have received a list of
all material actions, suits, governmental investigations, arbitrations and
proceedings pending against the Borrower or any of its Subsidiaries and the loss
analyses with respect thereto.
(aa) 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 Revolving Loans.
The obligation of each Lender to make any Revolving Loan (including the initial
Revolving 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 Revolving 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 Revolving 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 Revolving 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 Revolving Loans, the Issuance of such Letter of Credit or
the reimbursement of any amounts with respect thereto or the consummation of the
Transactions.
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(d) No Material Adverse Change. No event, act or condition
shall have occurred after January 31, 1998 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 Revolving Loans to be made or
Letters of Credit to be Issued, respectively, on such date.
The acceptance of the proceeds of each Revolving 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 Revolving Loan or the Issuance of such Letter of Credit have been
satisfied.
All of the Revolving 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 Revolving 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 Revolving 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 Revolving
Notes and the making of the Revolving Loans and the Issuance of the Letters of
Credit:
Section 5.1 Corporate Status. Each Loan Party (i) is duly
organized and validly existing and in good standing under the laws of the
jurisdiction of its organization, (ii) has the corporate or other requisite
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 or other requisite 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 or other requisite action to
authorize the execution, delivery and performance
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by it of such Transaction Documents. Each Loan Party has duly executed and
delivered each such Transaction Document, and each such Transaction Document
constitutes its legal, valid and binding obligation, enforceable in accordance
with its terms.
Section 5.3 No Violation. Neither the execution, delivery or
performance by any Loan Party of the Transaction Documents to which it is a
party, nor compliance by it with the terms and provisions thereof nor the
consummation of the Transactions, (i) will contravene any applicable provision
of any law, statute, rule, regulation, order, writ, injunction or decree of any
court or governmental instrumentality or (ii) will conflict or be inconsistent
with or result in any breach of, any of the terms, covenants, conditions or
provisions of, or constitute a default under, or result in the creation or
imposition of (or the obligation to create or impose) any Lien (except pursuant
to the Security Documents) upon any of the property or assets of any Loan Party
pursuant to the terms of any indenture, mortgage, deed of trust, lease,
agreement or other instrument to which such Loan Party is a party or by which it
or any of its property or assets is bound or to which it may be subject, or
(iii) will violate any provision of the Certificate of Incorporation or By-Laws
(or other relevant formation documents) of any Loan Party.
Section 5.4 Litigation. There are no actions, suits,
governmental investigations, arbitrations or proceedings pending or threatened
(i) with respect to any of the Transactions or the Transaction Documents, (ii)
except as set forth on Schedule 5.4, the Hardee's Acquisition Documents, or
(iii) 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 set forth on Schedule
5.7 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.
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Section 5.8 Material Adverse Change. Since January 31, 1998,
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 Revolving Loan, and each Letter of Credit, will be used by the Borrower
only in accordance with the provisions of Section 2.19. No part of the proceeds
of any Revolving 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 Revolving
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 T, U
or X of the Federal Reserve Board. Following the application of the proceeds of
each Revolving Loan, less than 25% of the value (as determined by any reasonable
method) of the assets of the Borrower and its Subsidiaries (on a consolidated
and an unconsolidated basis) have been and will continue to be, represented by
Margin Stock.
Section 5.10 Governmental and Other Approvals. No order,
consent, approval, license, authorization, or validation of, or filing,
recording or registration with, or exemption by, any governmental or public body
or authority, or any subdivision thereof, or any other Person, is required to
authorize, or is required in connection with (i) the execution, delivery and
performance of any Transaction Document or the consummation of any of the
Transactions or (ii) the legality, validity, binding effect or enforceability of
any Transaction 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.
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Section 5.12 Tax Returns and Payments. Each Loan Party has filed
all tax returns required to be filed by it and has paid all taxes and
assessments payable by it which have become due, other than (i) those not yet
delinquent or those that are reserved against in accordance with GAAP which are
being diligently contested in good faith by appropriate proceedings or (ii)
where the failure to so pay has not resulted and could not reasonably be
expected to result in liability in excess of $1,000,000 in the aggregate for all
of the Loan Parties.
Section 5.13 ERISA. Neither the Borrower nor any of its
Subsidiaries have any Plans other than those listed on Schedule 5.13. No
accumulated funding deficiency (as defined in Section 412 of the Code or Section
302 of ERISA) or Reportable Event has occurred with respect to any Plan. There
are no Unfunded Benefit Liabilities under any Plan. The Borrower and each member
of its ERISA Controlled Group have complied with the requirements of Section 515
of ERISA with respect to each Multiemployer Plan and is not in "default" (as
defined in Section 4219(c)(5) of ERISA) with respect to payments to a
Multiemployer Plan. The aggregate potential total withdrawal liability, and the
aggregate potential annual withdrawal liability payments of the Borrower and the
members of its ERISA Controlled Group as determined in accordance with Title IV
of ERISA as if the Borrower and the members of its ERISA Controlled Group had
completely withdrawn from all Multiemployer Plans is not greater than
$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
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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 Revolving Loans hereunder, the
Transactions (other than the making of the Revolving 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 consum-
mate such Transactions have been obtained, given, filed or taken and are or will
be in full force and effect.
Section 5.16 Representations and Warranties in Transaction
Documents. All representations and warranties made by any Loan Party in the
Transaction Documents (other than the Loan Documents), and, to the best of the
Borrower's knowledge, all representations made by each other Person in such
Transaction Documents, are true and correct in all material respects. None of
such representations and warranties is inconsistent in any material respect with
the representations and warranties of any Loan Party made herein or in any other
Loan Document.
Section 5.17 True and Complete Disclosure. All factual
information (taken as a whole) furnished by or on behalf of any Loan Party in
writing to the Agent or any Lender on or prior to the Closing Date, for purposes
of or in connection with this Agreement or any of the Transactions is, and all
other such factual information (taken as a whole) hereafter 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, the jurisdiction of incorporation or
organization of the Borrower, 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 or other outstanding equity interests of the Borrower
and each of its Subsidiaries and of each other Loan Party and each Subsidiary of
such Loan Party, the par value thereof and (other than with respect to the
Borrower) the registered owner(s) thereof. All of such stock has been duly and
validly issued and is fully paid and non-assessable and (except for the stock of
the Borrower) is, together with all such other equity interests, owned by such
Loan Party free and clear of all Liens. Except for the Convertible Subordinated
Notes or as disclosed in Schedule 5.18, neither any Loan Party nor
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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) (i) Each of the Loan
Parties and their Environmental Affiliates are in compliance with all applicable
Environmental Laws except where noncompliance, individually or in the aggregate,
could not have a Material Adverse Effect, (ii) each of the Loan Parties and
their Environmental Affiliates have all Environmental Approvals required to
operate their businesses as presently conducted or as reasonably anticipated to
be conducted except where the failure to obtain any such Environmental
Approval, individually or in the aggregate, could not have a Material Adverse
Effect, (iii) none of the Loan Parties nor any of their Environmental Affiliates
has received any communication (written or oral), whether from a governmental
authority, citizens group, employee or otherwise, that alleges that such Loan
Party or Environmental Affiliate is not in full compliance with all
Environmental Laws and where such noncompliance, individually or in the
aggregate, could have a Material Adverse Effect, and (iv) to the Borrower's best
knowledge after due inquiry, there are no circumstances that may prevent or
interfere with such full compliance in the future except where such
noncompliance, individually or in the aggregate, could not have a Material
Adverse Effect.
(b) 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) 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 and each of its
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, each of its Subsidiaries, the other Loan Parties (if applicable) and
each of their Environmental Affiliates of which the Borrower or any of its
Subsidiaries have knowledge.
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(e) The Borrower has caused to be completed 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 six (6) years immediately
preceding the Closing Date and with respect to which a Phase I audit report had
not been completed in the eleven (11) year period immediately preceding the
Closing Date. The Borrower has delivered all such Phase I audit reports to the
Agent which were obtained pursuant to the preceding sentence which identified,
or which recommended 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 5.20 Intellectual Property. Each of the Loan Parties
owns or has the valid right to use all patents, trademarks, service marks, trade
names, copyrights, trade secrets and other intangible rights, free and clear of
all Liens, which are used in or necessary for the operation of its business, and
Schedule V to the Borrower Security Agreement and Schedule V to the Subsidiary
Security Agreement together set forth a complete and accurate list thereof with
respect to each Loan Party as of the Closing Date, including all applications
and registrations thereof and all license agreements to or from third parties
relating thereto (the "Intellectual Property"). Each Loan Party is the record
owner of all registrations and applications which it owns and all registrations
for Intellectual Property are valid and enforceable. To the best of each Loan
Party's knowledge, no service, product, process, method, substance, part or
other material presently offered, sold or employed by any Loan Party infringes
upon or dilutes any patent, trademark, service mark, trade name, copyright,
license or other right of any other Person, and no such claims have been made by
any other Person against any Loan Party. There is no pending or, to the best of
each Loan Party's knowledge, threatened claim or litigation against or affecting
any Loan Party contesting its rights to own or use any Intellectual Property or
the validity or enforceability thereof.
Section 5.21 Ownership of Property; Restaurants. Schedule 5.21
sets forth all the real property owned or leased by the Loan Parties as of the
Closing Date and identifies the street address, the current owner (and current
record owner, if different) and whether such property is leased or owned. The
Loan Parties have good and marketable fee simple title to or valid leasehold
interests in all of such real property and good title to all of their personal
property subject to no Lien of any kind except Liens permitted hereby. Schedule
5.21 also sets forth a list of each Restaurant and the street address thereof
which is owned or operated as of the Closing Date by any Loan Party or any of
its Subsidiaries. The Loan Parties enjoy peaceful and undisturbed possession
under all of their respective leases.
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.
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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 Borrower, 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
and Permitted Redemptions. Set forth on Schedule 5.28 hereto is a complete and
accurate list of all Indebtedness of the Borrower and each of its Subsidiaries
existing as of the Closing Date (other than Surviving Debt), showing the
principal amount outstanding thereunder as of the Closing Date. As of the
Closing Date, the Borrower and its Subsidiaries have redeemed or repurchased
Convertible Subordinated Notes for an aggregate purchase price of $31,179,980,
and the par value of all Convertible Subordinated Notes so redeemed or
repurchased is $38,000,000 as of the Closing Date.
Section 5.29 Other Agreements. Schedule 5.29 sets forth a
complete and accurate list as of the Closing Date of (i) all joint venture and
partnership agreements to which the Borrower or any of its Subsidiaries is a
party, and (ii) all covenants not to compete restricting the Borrower or any of
its Subsidiaries to which the Borrower or any of its Subsidiaries is a party or
by which the Borrower or any of its Subsidiaries is bound.
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Section 5.30 Immaterial Subsidiaries. The Subsidiaries of the
Borrower designated as Immaterial Subsidiaries on the Closing Date are set forth
on Schedule 5.30. The assets of each Subsidiary of the Borrower designated as an
Immaterial Subsidiary by the Borrower do not exceed $1,500,000 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 or any of its Subsidiaries as of the
Closing Date.
SECTION 6. AFFIRMATIVE COVENANTS.
The Borrower covenants and agrees that until all of the Revolving
Loan 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
LLP or other independent certified public accountants of recognized national
standing reasonably acceptable to the Agent and the Required Lenders and
indicating that its audit of the consolidated financial statements of the
Borrower was conducted in accordance with generally accepted auditing standards.
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(c) Management Letters. Promptly after the Borrower's
receipt thereof, a copy of any "management letter" or other material report
received by the Borrower from its certified public accountants.
(d) Budgets. Within 60 days after the first day of each
fiscal year of the Borrower, a budget and financial forecast of results of
operations and sources and uses of cash (in form reasonably satisfactory to the
Agent) prepared by the Borrower for such fiscal year, accompanied by a written
statement of the assumptions used in connection therewith, together with a
certificate of the chief financial officer of the Borrower to the effect that
such budget and financial forecast and, to the best of his knowledge,
assumptions, are reasonable and represent the Borrower's good faith estimate of
its future financial requirements and performance. The financial statements
required to be delivered pursuant to clauses (a) and (b) above shall be
accompanied by a comparison of the actual financial results set forth in such
financial statements to those contained in the forecasts delivered pursuant to
this clause (d) together with an explanation of any material variations from the
results anticipated in such forecasts.
(e) Officer's Certificates. At the time of the delivery of
the financial statements under clauses (a) and (b) above, a certificate of the
chief financial officer of the Borrower which certifies (x) that such financial
statements fairly present the financial condition and the results of operations
of the Borrower and its Subsidiaries on the dates and for the periods indicated,
subject, in the case of interim financial statements, to normally recurring
year-end adjustments, and that such financial statements were prepared in
accordance with GAAP and (y) that such officer has reviewed the terms of the
Loan Documents and has made, or caused to be made under his or her supervision,
a review in reasonable detail of the business and condition of the Borrower and
its Subsidiaries during the accounting period covered by such financial
statements, and that as a result of such review such officer has concluded that
no Default or Event of Default has occurred during the period commencing at the
beginning of the accounting period covered by the financial statements
accompanied by such certificate and ending on the date of such certificate or,
if any Default or Event of Default has occurred, specifying the nature and
extent thereof and, if continuing, the action the Borrower proposes to take in
respect thereof (the "Compliance Certificate"). Such certificate shall set forth
the calculations required to establish whether the Borrower was in compliance
with the provisions of Sections 6.11, 6.12, 7.1, 7.2, 7.3, 7.7, 7.8 and 7.18
during and as at the end of the accounting period covered by the financial
statements accompanied by such certificate.
(f) Notice of Default. Promptly and in any event within
one Business Day after any Loan Party obtains knowledge thereof, notice (i) of
the occurrence of any Default or Event of Default together with a certificate of
an Authorized Officer of the Borrower specifying the nature and period of
existence thereof and the Borrower's proposed response thereto, (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
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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 and (iii) of the occurrence of any default or event of
default under any Subordinated Debt Document specifying (A) the nature and
period of existence of any such default, condition or event, (B) any notice
given or action taken by any holder or trustee thereunder 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
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(E) the aggregate present value of
the Unfunded Benefit Liabilities under all Plans has in any year
increased by $500,000 or to an amount in excess of $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 Sec-
tion 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
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from the PBGC notifying the Borrower or such member of its ERISA
Controlled Group of its final decision finding liability and the
date by which such liability must be paid, a copy of such letter,
together with a certificate of the president or chief financial
officer of the Borrower setting forth the action which the
Borrower or such member of its ERISA Controlled Group proposes
to take with respect thereto.
(i) SEC Filings. Promptly upon transmission thereof,
copies of all regular and periodic financial information, proxy materials and
other information, regular, periodic and special reports and registration
statements, if any, which any Loan Party shall file with the Securities and
Exchange Commission or any governmental agencies substituted therefore or which
any Loan Party shall send to its stockholders.
(j) Environmental. Promptly and in any event within two
Business Days after the existence of any of the following conditions, a
certificate of an Authorized Officer of the Borrower specifying in detail the
nature of such condition and the applicable Loan Party's or Environmental
Affiliate's proposed response thereto: (i) the receipt by any Loan Party or any
of its Environmental Affiliates of any communication (written or oral), whether
from a governmental authority, citizens group, employee or otherwise, that
alleges that such Loan Party or Environmental Affiliate is not in compliance
with applicable Environmental Laws and such noncompliance, individually or in
the aggregate, could have a Material Adverse Effect, (ii) any Loan Party or any
of its Environmental Affiliates shall obtain actual knowledge that there exists
any Environmental Claim pending or threatened against such Loan Party or such
Environmental Affiliate, which, individually or in the aggregate, could have a
Material Adverse Effect, or (iii) any release, emission, discharge or disposal
of any Material of Environmental Concern that could form the basis of any
Environmental Claim against any Loan Party or any of their Environmental
Affiliates, which Environmental Claim, individually or in the aggregate could
have a Material Adverse Effect.
(k) Creditor Reports. Promptly after the furnishing
thereof, copies of any statement or report furnished to any other holder of the
securities of any Loan Party or of any of its Subsidiaries pursuant to the terms
of any indenture, loan or credit or similar agreement and not otherwise required
to be furnished to the Lenders pursuant to any other clause of this Section 6.1.
(l) Other Information. From time to time, such other
information or documents (financial or otherwise) as any Lender may reasonably
request.
Section 6.2 Books, Records and Inspections. The Borrower shall,
and shall cause each of its Subsidiaries to, keep proper books of record and
account in which full, true and correct entries in conformity with GAAP and all
requirements of law shall be made of all
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dealings and transactions in relation to its business and activities. The
Borrower shall, and shall cause each of its Subsidiaries to, permit officers and
designated representatives of any Lender to visit and inspect any of the
properties of the Borrower or any of its Subsidiaries, and to examine the books
of record and account of the Borrower or any of its Subsidiaries, and discuss
the affairs, finances and accounts of the Borrower or any of its Subsidiaries
with, and be advised as to the same by, its and their officers and independent
accountants, all upon 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.
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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 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 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
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Agreement. The Borrower shall cause each of its Immaterial Subsidiaries which is
a Subordinated Guarantor to at all times be and remain a party to the Guaranty
so long as each such Immaterial Subsidiary is a Subordinated Guarantor. The
Borrower shall cause to be delivered to the Agent a legal opinion in form and
substance reasonably satisfactory to the Agent with respect to any Subsidiary
entering into the Guaranty after the Closing Date.
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 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 with respect to such Subsidiary 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 and Section
2.20.
Section 6.13 [Intentionally Omitted].
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 7. NEGATIVE COVENANTS.
The Borrower covenants and agrees that until all of the Revolving
Loan Commitments of each Lender have terminated, each of the Letters of Credit
has expired or been terminated, and the Obligations are paid in full:
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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
------ -----
Closing Date 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 the sum of (i)
Consolidated Interest Expense of the Borrower plus (ii) one-third (1/3)
multiplied by the aggregate rent expense of the Borrower and its Subsidiaries
attributable to Sale and Leaseback Transactions determined in accordance with
GAAP on a consolidated basis 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, to be less than the ratio set forth opposite such period:
Period Ratio
------ -----
Closing Date 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 (i) Adjusted Consolidated EBITDA of the Borrower plus, to
the extent deducted in the calculation of Consolidated Net Income of the
Borrower and its Subsidiaries for such period, all rent expense determined in
accordance with GAAP for such period attributable to Sale and Leaseback
Transactions, all determined on a consolidated basis for the Borrower and its
Subsidiaries for such period, to (ii) 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 to be less than 1.75 to 1.00.
(d) Minimum Consolidated EBITDA. The Borrower shall not
permit Adjusted Consolidated EBITDA of the Borrower for the period of four
consecutive fiscal quarters of the Borrower (taken as one accounting period) as
determined on the last day of each fiscal quarter of the Borrower ending during
each period set forth below to be less than the amount set forth opposite such
period:
Period Amount
------ ------
Closing Date 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
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(e) Adjusted Leverage Ratio. The Borrower shall not permit
the Adjusted Leverage Ratio 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
------ -----
Closing Date 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 an aggregate amount not in excess of $325,000,000 in each fiscal year of the
Borrower; provided that in the event that the Leverage Ratio exceeds 2.75 to
1.00 at any time during such fiscal year then (A) if the aggregate amount of
Capital Expenditures made or incurred by the Borrower and its Subsidiaries
exceeds $200,000,000 with respect to such fiscal year as of the first date the
Leverage Ratio exceeds 2.75 to 1.00 during such fiscal year, the Borrower shall
not make, incur or commit to be made or incurred, or permit any of its
Subsidiaries to make, incur or commit to be made or incurred any additional
Capital Expenditures during the remainder of such fiscal year (other than
additional Capital Expenditures made or incurred pursuant to contractual
commitments to make or incur such Capital Expenditures in such fiscal year
entered into by the Borrower or any of its Subsidiaries prior to the first date
that the Leverage Ratio exceeds 2.75 to 1.00); and (B) if the aggregate amount
of Capital Expenditures made or incurred by the Borrower and its Subsidiaries
does not exceed $200,000,000 as of the first date the Leverage Ratio exceeds
2.75 to 1.00 during such fiscal year, the Borrower shall not make, incur or
commit to be made or incurred and shall not permit any of its Subsidiaries to
make, incur or commit to be made or incurred any Capital Expenditures with
respect to such fiscal year in an aggregate amount in excess of $200,000,000 in
such fiscal year (other than additional Capital Expenditures made or incurred
pursuant to contractual commitments to make or incur such Capital Expenditures
in such fiscal year entered into by the Borrower or any of its Subsidiaries
prior to the first date that the Leverage Ratio exceeds 2.75 to 1.00); and
provided further that if the aggregate amount of Capital Expenditures made or
incurred during such fiscal year of the Borrower is less than the amount (as
reduced, if applicable) permitted to be made or incurred pursuant to this clause
(f), then the maximum amount for the following fiscal year of the Borrower (but
not any subsequent fiscal year of the Borrower) shall be increased by the amount
of such difference.
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(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) $250,000,000, 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, 1999 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 the following provided that none of the creation,
incurrence, assumption or existence of any of the following result in or cause a
violation or breach of, or default under, any Subordinated Debt Document:
(a) Indebtedness hereunder and under the other Loan
Documents;
(b) Indebtedness outstanding on the Closing Date and set
forth on Schedule 7.2 hereto (without duplication of any other Indebtedness
permitted by the other provisions of this Section 7.2);
(c) Indebtedness permitted under Sections 7.6(a), 7.6(b),
7.6(d) and 7.6(e);
(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 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,
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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 Domestic Subsidiary of the
Borrower owed to the Borrower or to any Domestic 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 (i)
the Convertible Subordinated Notes in an aggregate principal amount not to
exceed $159,225,000 and (ii) the New Subordinated Notes in an aggregate original
principal amount not to exceed $287,500,000 at any time outstanding; in each
case less all repayments, redemptions, prepayments, purchases, defeasances or
acquisitions for value with respect thereto;
(j) unsecured Indebtedness of the Borrower or any of its
Subsidiaries consisting of guarantees 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 ("Franchisee Construction
Debt"); provided that (i) the amount of the obligations 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; (ii) the amount of the
obligations of the Borrower and its Subsidiaries under or with respect to
guarantees of more than 20% of the principal amount of the Franchisee
Construction Debt of a franchisee shall not exceed $5,000,000 in the aggregate
outstanding at any time; and (iii) except for the guarantees described in the
foregoing clause (ii), the amount of the obligations of the Borrower and its
Subsidiaries under or with respect to guarantees of Franchisee Construction Debt
of any franchisee shall not exceed 20% of the Franchisee Construction Debt of
such franchisee;
(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
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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;
(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; and
(m) Indebtedness with respect to Sale and Leaseback
Transactions permitted under Section 7.13(a).
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 the following provided that none of the creation, incurrence,
assumption or existence of any of the following result in the creation or
imposition of a Lien under any Subordinated Debt Document:
(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
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the Borrower or any of its Subsidiaries and which do not detract materially from
the value of the property to which they attach or impair materially the use
thereof by the Borrower or any of its Subsidiaries or materially adversely
affect the security interests of the Agent or the Lenders therein;
(f) Liens granted to the Agent for the benefit of the
Lenders pursuant to the Security Documents securing the Obligations;
(g) Liens created pursuant to Capitalized Leases and to
secure other purchase-money Indebtedness permitted pursuant to Section 7.2(e),
provided that such Liens are only in respect of the property or assets subject
to, and secure only, the respective Capitalized Lease or other purchase-money
Indebtedness;
(h) Liens arising out of the replacement, extension or
renewal of any Lien permitted by clause (a) above upon or in the same property
theretofore subject thereto in connection with the refunding, refinancing,
extension or renewal (without increase in the amount or change in any direct or
contingent obligor) of the Indebtedness secured thereby permitted pursuant to
Section 7.2(f);
(i) Liens securing Permitted Subordinated Debt permitted
pursuant to Section 7.2(h)(ii) provided that (i) such Liens are only in respect
of the assets acquired in the applicable Permitted Acquisition, (ii) the
Obligations are secured by valid first priority perfected Liens on such assets
and the Liens permitted pursuant to this Section 7.3(i) are second in priority
to the Liens on such assets securing the Obligations and (iii) the rights and
remedies of any holder of such Liens are subordinated to the rights and remedies
of the Agent and the Lenders on terms approved in writing by the Agent;
(j) Liens securing Indebtedness (other than Permitted
Subordinated Debt) of the Borrower and its Subsidiaries in an aggregate
principal amount not to exceed $25,000,000; and
(k) Liens of a lessor covering only specific property
leased by the Borrower or any of its Subsidiaries subject to operating leases
entered into by the Borrower or any of its Subsidiaries as a lessee in the
ordinary course of business; and
(l) Liens of a lessor covering only specific property
leased by the Borrower or any of its Subsidiaries subject to a Sale and
Leaseback Transaction permitted by Section 7.13(a) entered into by the Borrower
or any of its Subsidiaries as a lessee.
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
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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 may merge into or convey, sell,
lease or transfer all or substantially all of its assets to, the Borrower or any
other Domestic 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 or any such Domestic Subsidiary 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, provided, that in any
such merger, the Borrower or such wholly-owned Subsidiary shall be the surviving
corporation, 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 if required by Section 2.20,
a Subsidiary Pledge Agreement, (B) the Borrower shall give the Agent at least
ten (10) days prior written notice of any such sale, merger or other transfer,
(C) the Agent and Lenders shall not be deemed to have released their security
interest in any assets so transferred or in any Subsidiary or the assets of any
Subsidiary so merged and (D) 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 FEI) 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 10% of the total assets of the
Borrower and its Subsidiaries determined on a consolidated basis in accordance
with GAAP provided that both (A) Excluded
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Resales and (B) Sale and Leaseback Transactions entered into by the Borrower or
any of its Subsidiaries pursuant to Section 7.13(a), shall not be included in
the calculation of such percentage, (iv) the Borrower shall prepay the Revolving
Loans pursuant to, and in accordance with, Section 2.11 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
(c) [Intentionally Omitted]; 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);
(d) pursuant to the FEI Guaranties; and
(e) guarantees by Subsidiaries of the Borrower pursuant to
the New Subordinated Note Indenture of obligations of the Borrower under the New
Subordinated Notes, provided that such guarantees shall at all times be
subordinated in respect of the Obligations on subordination terms contained in
the New Subordinated Note Indenture.
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
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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 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) 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 (B) 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 (excluding,
however, the aggregate amount of payments made in connection with
the Permitted Redemption), less (C) 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,
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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 provided that none of the making,
existence or creation of or becoming or remaining a partner in, any of the
following will not result in or cause a violation or breach of, or default
under, any Subordinated Debt Document:
(a) Investments set forth on Schedule 7.8;
(b) Investments by the Borrower and its Subsidiaries in
Subsidiaries of the Borrower outstanding on the Closing Date, additional
Investments (other than loans and advances) by the Borrower or any Subsidiary of
the Borrower in any Domestic 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 Domestic Subsidiaries of the Borrower to the extent
permitted by Section 7.2(g);
(c) loans and advances by the Borrower and its
Subsidiaries to their employees in the ordinary course of its business not
exceeding $2,000,000 in the aggregate at any one time outstanding;
(d) the Borrower and its Subsidiaries may acquire and hold
Cash Equivalents;
(e) Investments consisting of promissory notes permitted
to be received as consideration in connection with Asset Dispositions permitted
under Section 7.5(a);
(f) Permitted Acquisitions, provided that, in the case of
each Permitted Acquisition, the conditions referred to in clauses (i) through
(ix) 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:
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(1) compliance by the Borrower and its
Subsidiaries with the covenants set forth in Section 7.1, on a
pro forma basis after giving effect to such Acquisition, for a
period of four consecutive fiscal quarters after the date of such
Acquisition, 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;
(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
Subsidiaries with the covenants set forth in Section 7.1, on a
pro forma basis after giving effect to such Acquisition, for a
period of four consecutive fiscal quarters after the date of such
Acquisition, 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:
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(A) if the aggregate amount of cash
consideration paid and Indebtedness incurred or
assumed in connection with all Permitted Restaurant
Acquisitions occurring after April 1, 1998 after
giving effect to such Acquisition is less than or
equal to $75,000,000, the Leverage Ratio shall be
less than 2.75 to 1.00,
(B) if the aggregate amount of cash
consideration paid and Indebtedness incurred or
assumed in connection with all Permitted Restaurant
Acquisitions occurring after April 1, 1998 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 April 1, 1998 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 April 1, 1998 after
giving effect to such Acquisition is 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;
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(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 outstanding on the date of such Permitted
Acquisition shall equal at least $25,000,000;
(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 statements and
projections relating to such Person or assets;
(3) In the case of each Permitted
Acquisition, to the extent that such Acquisition consists of the
acquisition by the Borrower or any of its Subsidiaries of stock,
partnership or other Equity Interests of any Person (or assets in
the case of clause (A) below):
(A) All documents required to be
delivered pursuant to Section 2.20 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;
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(C) An officer's certificate signed on
behalf of such Person by an appropriate
officer of such Per- son, certifying as to
(i) the absence of any amendment to the
charter or other organizational document of
such Person since the date of the Secretary
of State's certificate referred to in clause
(B) above, (ii) a true and correct copy of
the by-laws or similar organizational
document of such Person, (iii) a true and
correct copy of the resolutions adopted by
the Board of Directors or equivalent body of
such Person approving the documents or
instruments to be delivered under this
Section 7.8(f) to which such Person is a
party and the matters contemplated thereby,
(iv) the incumbency and specimen signatures
of the officers of such Person executing the
documents and instruments to be delivered
under this Section 7.8(f) to which such
Person is a party, and (v) the due
organization and good standing of such Person
as a Person organized under the laws of its
jurisdiction of organization;
(D) Evidence satisfactory to the Agent
and the Lenders that the Borrower, its
Subsidiaries and the Person being acquired
has made and obtained all necessary
governmental and other Consents required in
order to consummate such Acquisition and that
all applicable waiting periods with respect
to such Acquisition including, without
limitation, those under the Hart-Scott-Rodino
Act have expired without any action having
been taken by any competent authority
restraining, pre- venting or imposing
materially adverse conditions upon the rights
of the Loan Parties or their Subsidiaries
freely to transfer or otherwise dispose of,
or to create any Lien on, any properties now
owned or hereafter acquired by any of them;
and
(ix) the total consideration, contingent or
otherwise, for the Acquisition of the Person being acquired does
not exceed, in the aggregate, $200,000,000 in value (including,
without limitation, securities, instruments, or promissory notes
tendered or executed in connection with such acquisition), of
which no more than $100,000,000 shall consist of cash and/or
Indebtedness incurred or assumed;
(g) Investments in Related Businesses other than joint
ventures, provided that the amount of such Investments made after the Closing
Date shall not exceed $100,000,000 in the aggregate less the aggregate amount of
any Investments made pursuant to clause (j) of this Section 7.8; provided that
the Borrower or any of its Subsidiaries may
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reinvest the proceeds received from the liquidation of any such Investments in
Investments in Related Businesses permitted to be made pursuant to this clause
(g) in an amount equal to the lesser of (i) the amount of the proceeds received
from the Borrower or such Subsidiary from the liquidation of such Investment and
(ii) the original amount paid by the Borrower or such Subsidiary for such
Investment; provided, further, that the Borrower and its Subsidiaries shall
promptly deliver to the Agent all Capital Stock and Instruments evidencing such
Investments in Related Businesses that are required to be delivered to the Agent
pursuant to the Security Documents;
(h) Investments received as consideration in connection
with Asset Dispositions permitted under paragraphs (c) and (d) of Section 7.5;
(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; and
(j) Investments by the Borrower or a Subsidiary of the
Borrower in a joint venture which is a Person organized under the laws of a
state of the United States of America for whose Indebtedness neither the
Borrower nor any Subsidiary of the Borrower is liable, in which the Borrower or
such Subsidiary holds 50% of the outstanding equity interests with another
operator of retail facilities for the purpose of developing, acquiring or
constructing properties which include restaurant operations; provided that the
aggregate amount of the such Investments made after the Closing Date does not
exceed $50,000,000; provided further that the Borrower or any of its
Subsidiaries may reinvest the proceeds received from the liquidation of any such
Investments in Investments in joint ventures permitted to be made pursuant to
this clause (j) in an amount equal to the lesser of (i) the amount of the
proceeds received from the Borrower or such Subsidiary from the liquidation of
such Investment and (ii) the original amount paid by the Borrower or such
Subsidiary for such Investment; and provided, further, that (i) the consent of
the Borrower or such Subsidiary must be required for such joint venture to
effect any material transactions, including the acquisition and sale of assets,
incurrence of Indebtedness and significant capital commitments; and (ii) such
joint venture will not create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction which would unreasonably
restrict the ability of the joint venture to distribute to its owners the net
cash flow of the joint venture.
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.
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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 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 the Seller Agreement or any
material provision of any other Transaction Document (other than the Loan
Documents and other than the Subordinated 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 face 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 (other
than Indebtedness permitted to be incurred pursuant to Section 7.2(h) or Section
7.2(i)) 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 (i) in connection with the Permitted Redemption, (ii) regularly scheduled
semi-annual interest payments required to be made in cash and (iii)
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conversions of the Convertible 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) 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 (B),
together with the aggregate amount of all dividends, purchases, redemptions,
retirements and acquisitions paid or made pursuant to Section 7.7(b)(ii), less
(C) 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 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 Closing Date 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 (a) for the rental or hire of real or personal
property in connection with any sale and leaseback transaction, except
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(i) the Borrower and its Subsidiaries may sell real
property or equipment owned by the Borrower or any of its Subsidiaries on the
Closing Date and simultaneously with such sale become liable with respect to any
operating lease involving such property (each, an "Existing Property Sale and
Leaseback Transaction"), and (ii) the Borrower and its Subsidiaries may sell
real property which the Borrower or any of its Subsidiaries acquires after the
Closing Date for the purpose of building a Restaurant which the Borrower or such
Subsidiary intends to own and operate, and simultaneously with such sale become
liable with respect to any operating lease involving such property if such sale
and leaseback occurs on or before the date which is twelve (12) months after the
date of acquisition by the Borrower or one of its Subsidiaries of such real
property (each, a "New Property Sale and Leaseback Transaction"), provided that:
(1) with respect to Existing Property Sale and
Leaseback Transactions, the greater of (A) the aggregate proceeds
of all such Existing Property Sale and Leaseback Transactions and
(B) the aggregate fair market value of all such property sold and
leased back pursuant to such Existing Property Sale and Leaseback
Transactions by the Borrower and its Subsidiaries, does not
exceed $205,000,000 on a consolidated basis;
(2) with respect to New Property Sale and Leaseback
Transactions, the greater of (A) the aggregate proceeds of all
such New Property Sale and Leaseback Transactions by the Borrower
and it Subsidiaries and (B) the aggregate fair market value of
all such property sold and leased back pursuant to such New
Property Sale and Leaseback Transactions by the Borrower and its
Subsidiaries does not exceed $15,000,000 in the aggregate in any
fiscal year of the Borrower;
(3) an Affiliate of the Borrower or any of its
Subsidiaries is not a party to any Sale and Leaseback Transaction
(except to the extent that the Borrower or any of its
Subsidiaries is the lessee);
(4) the Agent is provided with fully executed
documentation of each such Existing Property Sale and Leaseback
Transaction on or prior to the closing date of such transaction;
(5) no Default or Event of Default exists on the
closing date of any such Existing Property Sale and Leaseback
Transaction or would result therefrom and the Borrower shall
deliver to the Agent prior to the closing date of such
transaction an officer's certificate of the chief financial
officer of the Borrower certifying thereto; and
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(6) the term of each such operating lease shall not
be less than fifteen (15) years; or
(b) for the rental or hire of other real or personal
property of any kind under leases or agreements to lease including Capitalized
Leases except 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.
Section 7.17 Partnerships. The Borrower shall not, and shall not
permit any of its Subsidiaries to, become or remain a general partner in any
general or limited partner ship, 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 (a) Designated Senior Indebtedness
(as defined in the Convertible Subordinated Note Indenture) and (b) Designated
Senior Indebtedness (as defined in the New Subordinated Note Indenture), in each
case other than obligations arising under the Loan Documents.
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Section 7.20 Instruments. The Borrower shall not permit any of
its Subsidiaries to own or hold, directly or beneficially, any Instrument if
such Subsidiary is not a party to a legal, valid and binding Subsidiary Pledge
Agreement.
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 Revolving 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 Revolving 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 continue for thirty (30)
days.
(iii) Any Loan Party shall fail to perform or
observe any agreement, covenant or obligation arising under any
provision of the Loan Documents other than this Agreement, which
failure shall continue after the end of the applicable grace
period, if any, provided therein.
(d) Default Under Other Agreements. Any Loan Party or any
of its Subsidiaries shall default in the payment when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) of any amount
owing in respect of any Indebtedness of such Loan Party or any of its
Subsidiaries (other than the Obligations) in the
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aggregate principal amount of $5,000,000 or more; or any Loan Party or any of
its Subsidiaries shall default in the performance or observance of any
obligation or condition with respect to any such Indebtedness or any other event
shall occur or condition shall exist, if the effect of such default, event or
condition is to accelerate the maturity or cause a mandatory redemption of any
such Indebtedness or to permit the holder or holders thereof, or any trustee or
agent for such holders, to accelerate the maturity or require a redemption or
other repurchase thereof of any such Indebtedness, or any such Indebtedness
shall become or be declared to be due and payable prior to its stated maturity
other than as a result of a regularly scheduled payment; or any such
Indebtedness shall be declared to be due and payable, or shall be required to be
prepaid, redeemed, purchased or defeased, or an offer to prepay, redeem,
purchase or defease such Indebtedness shall be required to be made, in each case
prior to its stated maturity other than as a result of a regularly scheduled
payment.
(e) Bankruptcy, etc. (i) Any Loan Party or any of its
Subsidiaries shall commence a voluntary case concerning itself under the
Bankruptcy Code; or (ii) an involuntary case is commenced against any Loan
Party or any of its Subsidiaries and the petition is not controverted within 10
days, or is not dismissed within 60 days, after commencement of the case; or
(iii) a custodian (as defined in the Bankruptcy Code) is appointed for, or takes
charge of, all or substantially all of the property of any Loan Party or any of
its Subsidiaries or any Loan Party or any of its Subsidiaries commences any
other proceedings under any reorganization, arrangement, adjustment of debt,
relief of debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to any Loan Party or
any of its Subsidiaries or there is commenced against any Loan Party or any of
its Subsidiaries any such proceeding which remains undismissed for a period of
60 days; or (iv) any order of relief or other order approving any such case or
proceeding is entered; or (v) any Loan Party or any of its Subsidiaries is
adjudicated insolvent or bankrupt; or (vi) any Loan Party or any of its
Subsidiaries suffers any appointment of any custodian or the like for it or any
substantial part of its property to continue undischarged or unstayed for a
period of 60 days; or (vii) any Loan Party or any of its Subsidiaries makes a
general assignment for the benefit of creditors; or (viii) any Loan Party or any
of its Subsidiaries shall fail to pay, or shall state that it is unable to pay,
or shall be unable to pay, its debts generally as they become due; or (ix) any
Loan Party or any of its Subsidiaries shall call a meeting of its creditors with
a view to arranging a composition or adjustment of its debts; or (x) any Loan
Party or any of its Subsidiaries shall by any act or failure to act consent to,
approve of or acquiesce in any of the foregoing; or (xi) any corporate action is
taken by any Loan Party or any of its Subsidiaries for the purpose of effecting
any of the foregoing.
(f) ERISA. (i) Any Termination Event shall occur, or (ii)
any Plan shall incur an "accumulated funding deficiency" (as defined in Section
412 of the Code or Section 302 of ERISA), whether or not waived, or (iii) the
Borrower or a member of its ERISA Controlled Group shall have engaged in a
transaction which is prohibited under Section 4975 of the Code or Section 406 of
ERISA which could result in the imposition of liability in
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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 Borrower's Subsidiaries party to any Security Document seeks to repudiate
its respective obligations thereunder and the Liens created thereby are
rendered, or the Borrower or any such Subsidiary of the Borrower seeks to render
such Liens, invalid and unperfected.
(h) Guaranty. The Guaranty or any provision thereof shall
cease to be in full force and effect, or any Guarantor or any Person acting by
or on behalf of a Guarantor shall deny or disaffirm all or any portion of such
Guarantor's obligations under such Guaranty.
(i) Change of Control. (i) Any Person or two or more
Persons acting in concert other than the Controlling Stockholders shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act of 1934),
directly or indirectly, of Voting Stock of the Borrower (or other securities
convertible into such Voting Stock) representing 20% or more of the combined
voting power of all Voting Stock of the Borrower; or (ii) during any period of
up to 24 consecutive months, commencing after the Closing Date, individuals who
at the beginning of such 24-month period were directors of the Borrower shall
cease for any reason to constitute a majority of the board of directors of the
Borrower; or (iii) any Person or two or more Persons acting in concert other
than the Controlling Stockholders shall have acquired by contract or otherwise,
or shall have entered into a contract or arrangement that, upon consummation,
will result in its or their acquisition of, the power to exercise control over
Voting Stock of the
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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; or (v) a Change in
Control as defined in the New Subordinated Note Indenture shall have occurred.
(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 Environmental Affiliate
thereof which, if determined adversely, could have a Material Adverse Effect, or
(iii) any Loan Party or its Environmental Affiliate shall have failed to obtain
any Environmental Approval necessary for the management, use, control,
ownership, or operation of its business, property or assets or any such
Environmental Approval shall be revoked, terminated, or otherwise cease to be in
full force and effect, in each case, if the existence of such condition could
have a Material Adverse Effect.
(l) Ownership of Certain Assets. The Borrower and/or its
Subsidiaries shall (1) cease for any reason to own and operate (whether or not
the Borrower or any such Subsidiary shall own or lease the real property on
which any such Restaurant is located) (A) less than 1800 Restaurants or (B) less
than 425 Carl's Jr. Restaurants, or (2) sell, convey or otherwise transfer or
dispose of any material intellectual property or license agreement owned by or
licensed to the Borrower or any of its Subsidiaries or any material license
agreement to which the Borrower or any of its Subsidiaries is a party other than
(A) a sale, conveyance or other transfer (other than a Lien) to a Domestic
Subsidiary, (B) licenses pursuant to Franchise
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Agreements pledged to the Agent pursuant to the Security Documents and (C) any
Asset Disposition permitted by the terms of any of the Loan Documents.
Section 8.2 Rights and Remedies. Upon the occurrence of any
Event of Default described in Section 8.1(e), the Revolving Loan Commitments
shall automatically and immediately terminate and the unpaid principal amount of
and any and all accrued interest on the Revolving 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 Revolving 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 Revolving
Loan Commitments are terminated, whereupon the Revolving Loan Commitments and
the obligation of each Lender to make any Revolving 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 Revolving 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 Paribas as the Agent of such Lender under this Agreement
and each other Loan Document, and each such Lender irrevocably authorizes
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
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of this Section 9 are solely for the benefit of the Agent and the
Lenders and no Loan Party shall have any rights as a third party beneficiary or
otherwise under any of the provisions hereof. In performing its functions and
duties hereunder and under the other Loan Documents, the Agent shall act solely
as the agent of the Lenders and does not assume nor shall be deemed to have
assumed any obligation or relationship of trust or agency with or for any Loan
Party or any of their respective successors and assigns.
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 Revolving 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 Revolving 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
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take any such action. The Agent shall in all cases be fully protected in acting,
or in refraining from acting, under this Agreement and the other Loan Documents
in accordance with a request of the Required Lenders, and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Lenders and all future holders of the Revolving 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 Revolving 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
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Loan Parties and without limiting the obligation of the Loan Parties to do so),
ratably according to their Pro Rata Shares, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever (including,
without limitation, the fees and disbursements of counsel for the Agent or such
Person in connection with any investigative, administrative or judicial 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 Revolving Loans made or renewed by it and any
Revolving 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 Revolving Notes. Notwithstand-
ing 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.
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SECTION 20. MISCELLANEOUS
Section 20.2 Payment of Expenses, Indemnity, etc. The Borrower
shall:
(a) whether or not the transactions hereby contemplated
are consummated, 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 Revolving Loans and the closing of the Transactions and
the documents and instruments referred to therein, in connection therewith, 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, including, without limitation, fees and expenses
incurred in connection with the transactions contemplated by Section 2.20), 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 disbursements of any kind or
nature whatsoever (including, without limitation, the reasonable fees and
disbursements of counsel for such Indemnitee) that may at any time (including,
without limitation, at any time following the payment of the Obligations) be
imposed on, asserted against or incurred by any Indemnitee as a result of, or
arising out of, or in any way related to or by reason of, or in connection with
the preparation for a defense of, any investigation, litigation or proceeding
arising out of, related to or in connection with (i) any of the Transactions or
the 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 Revolving Loan or Letter
of Credit), (ii) any violation by any Loan Party or its Environmental Affiliate
of any applicable Environmental Law, (iii)
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any Environmental Claim arising out of the management, use, control, ownership
or operation of property or assets by any of the Loan Parties or any of their
Environmental Affiliates, including, without limitation, all on-site and
off-site activities involving Materials of Environmental Concern, (iv) the
breach of any environmental representation or warranty set forth in Section
5.19, (v) the grant to the Agent and the Lenders of any Lien in any property or
assets of any of the Loan Parties or any stock or other equity interest in any
of the Loan Parties, and (vi) the exercise by the Agent and the Lenders of their
rights and remedies (including, without limitation, foreclosure) under any
agreements creating any such Lien (but excluding, as to any Indemnitee, any such
losses, liabilities, claims, damages, expenses, obligations, penalties, actions,
judgments, suits, costs or disbursements incurred solely by reason of the gross
negligence or willful misconduct of such Indemnitee as finally determined by a
court of competent jurisdiction). The Borrower's obligations under this Section
shall survive the termination of this Agreement and the payment of the
Obligations.
Section 10.2 Right of Setoff. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence and during the continuance of
any Event of Default, each Lender is hereby authorized at any time or from time
to time, without presentment, demand, protest or other notice of any kind to any
Loan Party or to any other Person, any such notice being hereby expressly
waived, to set off and to appropriate and apply any and all deposits (general or
special, time or demand, provisional or final) and any other indebtedness at any
time held or owing by such Lender (including, without limitation, by branches
and agencies of such Lender wherever located) to or for the credit or the
account of any Loan Party against and on account of the Obligations of the Loan
Parties to such Lender under this Agreement or under any of the other Loan
Documents, including, without limitation, all interests in Obligations purchased
by such Lender pursuant to Section 9.7, and all other claims of any nature or
description arising out of or connected with this Agreement or any other Loan
Document, irrespective of whether or not such Lender shall have made any demand
hereunder and although said Obligations, liabilities or claims, or any of them,
shall be contingent or unmatured.
Section 10.3 Notices. Except as otherwise expressly provided
herein, all notices, requests and demands to or upon the respective parties
hereto to be effective shall be in writing (including by telecopy, telex, or
cable communication), and shall be deemed to have been duly given or made when
delivered by hand, or five days after being deposited in the United States mail,
postage prepaid, or, in the case of telex notice, when sent, answerback
received, or, in the case of telecopy notice, when sent, or, in the case of a
nationally 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
communications to the Agent shall not be effective until received by the Agent.
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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 Revolving 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 connec-
tion with the merger, consolidation or dissolution of any Lender or as provided
in this Section 10.4.
(b) Participation. Any Lender may at any time sell to one
or more Persons (each a "Participant") participating interests in any Revolving
Loan owing to such Lender, any Revolving Note held by such Lender, any Revolving
Loan 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 Revolving
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 Revolving 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 Revolving 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 2.15, 2.16 and 2.17, 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).
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(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 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 Revolving Loan 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
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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 Revolving Loans and its Revolving 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 Revolving Notes. Promptly
after the consummation of any transfer to a Purchasing Lender pursuant hereto,
the transferor Lender, the Agent and the Borrower shall make appropriate
arrangements so that any Revolving Notes held by such transferor Lender shall be
surrendered to the Borrower for cancellation, one or more replacement Revolving
Notes in exchange therefor shall be issued to such transferor Lender, and one or
more new Revolving Notes shall be issued to such Purchasing Lender, in each case
in notional amounts reflecting such transfer. Each such new Revolving Note shall
be payable to the Purchasing Lender and shall be substantially in the form of
Exhibit A.
Section 10.5 Amendments and Waivers.
(a) Neither this Agreement, any Revolving Note, any other
Loan Document to which the Borrower or any other Loan Party is a party nor any
terms hereof or thereof may be amended, supplemented, modified or waived except
in accordance with the provisions of this Section. The Required Lenders and the
Borrower (or such other Loan Party, as the case may be) 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 Revolving Notes, or the other Loan Documents to which the
Borrower or such other Loan Party is a party, provided, that no such amendment,
supplement, modification or waiver shall (i) extend the Final 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 Revolving Loan 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., FEI or any Subsidiary of FEI, 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
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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. 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 FEI) 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 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 Revolving 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 Revolving 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
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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 Revolving 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 Revolving 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 Revolving Note would otherwise have. No notice to or
demand on any Loan Party in any case shall entitle any Loan Party to any other
or further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the Agent, the Lenders or the holder of any Revolving
Note to any other or further action in any circumstances without notice or
demand.
Section 10.7 Sharing of Payments. Each of the Lenders agrees
that if it should receive any amount hereunder (whether by voluntary payment, by
realization upon security, by the exercise of the right of setoff or banker's
lien, by counterclaim or cross action, by the enforcement of any right under the
Loan Documents, or otherwise) which is applicable to the payment of any
Obligations, of a sum which with respect to the related sum or sums received by
other Lenders is in a greater proportion than the total of such Obligation then
owed and due to such Lender bears to the total of such Obligation then owed and
due to all of the Lenders immediately prior to such receipt, then such Lender
receiving such excess payment shall purchase for cash without recourse or
warranty from the other Lenders an interest in such Obligations owing to such
Lenders in such amount as shall result in a proportional participation by all of
the Lenders in such amount; provided that if all or any portion of such excess
amount is thereafter recovered from such Lender, such purchase shall 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;
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(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 Revolving Loans and L/C Obligations;
(D) fourth, to the ratable payment
of principal outstanding on the Revolving 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 Revolving Loan, Obligation for any unreimbursed
drawing under any Letter of Credit or net termination amount
payable in respect of Rate Hedging Obligation to be determined by
the Agent in its sole discretion);
(E) fifth, to provide required cash
collateral if any pursuant to Section 8.2; and
(F) sixth, to the ratable payment
of all other Obligations.
The order of priority set forth in this Section 10.8 and the related provisions
of this Agreement are set forth solely to determine the rights and priorities of
the Agent and the Lenders as among themselves. The order of priority set forth
in clauses (B) through (F) of this Section 10.8 may at any time and from time to
time be changed 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
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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
Revolving Note to serve process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against the Borrower in any
other jurisdiction.
Section 10.10 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument.
Section 10.11 [Intentionally Omitted].
Section 10.12 Amendment and Restatement. This Agreement amends
and restates in its entirety the Original Credit Agreement. Upon the
effectiveness of this Agreement, the terms and provisions of the Original
Credit Agreement shall, subject to this Section 10.12, be superseded hereby.
Notwithstanding the amendment and restatement of the Original Credit Agreement
by this Agreement, the Borrower shall continue to be liable to the Lenders party
to the Original Credit Agreement and the Agent with respect to agreements on the
part of the Borrower under the Original Credit Agreement to indemnify any of
such Lenders or the Agent in connection with events or conditions arising or
existing prior to the Closing Date, 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 Agreement. Upon the effectiveness of this
Agreement, each reference to the Original Credit Agreement 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 Agreement. 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
Agreement.
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Section 10.13 Reallocation of Revolving Loans.
(a) As of the Closing Date,
(i) the Pro Rata Share of each Lender shall be
immediately adjusted based upon the application of the
definition of "Pro Rata Share" with respect to each Lender's new
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
Agreement shall become a party to this Agreement; and
(iii) each Lender that was a party to the Original
Credit Agreement whose Pro Rata Share becomes 0% after giving
effect to this Agreement shall, upon the occurrence thereof and
the reallocation of Revolving Loans in accordance with the terms
of Section 10.13(b) and receipt by such Lender of repayment of
any Term Loans (as defined in the Original Credit Agreement) made
by such Lender and interest accrued thereon, cease to be a Lender
party to this Agreement, and all accrued fees and other amounts
payable under the Original Credit Agreement 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
Revolving 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
available funds to cover such Revolving 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 Agreement, disburse funds to each Lender that, as a result
of such adjustment of the Pro Rata Shares, is to have a lesser
principal amount outstanding 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
Agreement shall deliver to the Agent immediately available funds
to cover its Revolving Loans that will equal such Lender's Pro
Rata Share of the aggregate amount of Obligations outstanding
under this Agreement immediately after giving effect to this
Agreement.
108
115
(c) The principal amounts of Revolving Loans outstanding
under the Original Credit Agreement immediately prior to giving effect to this
Agreement to each Lender that is a party thereto shall be deemed to be Revolving
Loans made by that Lender hereunder (as reallocated pursuant to this Section
10.13(b)). Each Letter of Credit issued under the Original Credit Agreement
(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 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 Revolving 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 2.15, 2.16, 2.17, 2.18, 9.7 and 10.1
shall survive the execution and delivery of this Agreement and the Revolving
Notes and the making and repayment of the Revolving Loans hereunder.
109
116
Section 10.19 Domicile of Revolving Loans. Each Lender may
transfer and carry its Revolving 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 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.
Section 10.23 References. Unless otherwise expressly specified
herein, all references to "Article," "Section,""Schedule," or "Exhibit" shall
mean articles and sections of, and schedules and exhibits to, this Agreement.
110
117
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
CKE RESTAURANTS, INC.
By:
-------------------------------
Print Name:
------------------------
Title:
-----------------------------
Address: 401 W. Carl Karcher Way
Anaheim, CA 92801
Attn: General Counsel
Telephone: (714) 774-5796
Telecopy: (714) 520-4485
118
PARIBAS, as Agent and as a Lender
By:
-------------------------------
Print Name: Clark King
Title: Director
By:
-------------------------------
Print Name:
------------------------
Title:
-----------------------------
Address: 227 W. Monroe Street
Suite 3300
Chicago, IL 60606
Attn:
Telephone: (312) 853-6000
Telecopy: (312) 853-6020
with a copy to:
Maureen B. Keating
Paribas
787 Seventh Avenue
New York, NY 10019-6016
Telephone: (212) 841-2286
Telecopy: (212) 841-2275
119
BANK AUSTRIA
CREDITANSTALT CORPORATE FINANCE, INC.
By:
--------------------------------
Print Name:
-------------------------
Title:
------------------------------
By:
--------------------------------
Print Name:
-------------------------
Title:
------------------------------
Address: 4 Embarcadero Center
Suite 630
San Francisco, CA 94111
Attn: James F. McCann
Telephone: (415) 788-1371 x227
Telecopy: (415) 781-0622
120
BANK LEUMI USA
By:
-------------------------------
Print Name:
------------------------
Title:
-----------------------------
Address: 8383 Wilshire Blvd.
Suite 400
Beverly Hills, CA 90211
Attn: Jacques Delvoye
Telephone: (323) 966-4727
Telecopy: (323) 655-3573
121
BANK UNITED
By:
-------------------------------
Print Name:
------------------------
Title:
-----------------------------
Address: 3200 Southwest Freeway
Suite 1900
Houston, TX 77027
Attn: Phil Green
Telephone: (713) 543-6949
Telecopy: (713) 543-6651
122
BANKBOSTON, N.A.
By:
-------------------------------
Print Name:
------------------------
Title:
-----------------------------
Address: 100 Federal Street
01-09-05
Boston, MA 02110
Attn: J. Nicholas Cole
Telephone: (617) 434-2174
Telecopy: (617) 434-0637
123
CALIFORNIA BANK & TRUST (f/k/a
Sumitomo Bank of California)
By:
-------------------------------
Print Name:
------------------------
Title:
-----------------------------
Address: 20100 Magnolia Street
P.O. Box 5820
Huntington Beach, CA 92646
Attn: Sajeda Simjee
Telephone: (714) 965-5524
Telecopy: (714) 968-4959
124
CENTURA BANK
By:
-------------------------------
Print Name:
------------------------
Title:
-----------------------------
Address: 131 N. Church Street
P.O. Box 1220
Rocky Mount, NC 27802
Attn: Lowry D. Perry
Telephone: (252) 454-4433
Telecopy: (252) 454-4040
125
FIRST AMERICAN NATIONAL BANK
By:
-------------------------------
Print Name:
------------------------
Title:
-----------------------------
Address: 4th and Union Street
Nashville, TN 37237-0310
Attn: Stephen G. Arnold
Telephone: (615) 736-6223
Telecopy: (615) 748-2485
126
FIRST BANK & TRUST
By:
-------------------------------
Print Name:
------------------------
Title:
-----------------------------
Address: 4301 MacArthur Blvd.
Newport Beach, CA 92660
Attn: Bala Balkrishna
Telephone: (949) 475-6318
Telecopy: (949) 475-8445
127
MANUFACTURERS BANK
By:
-------------------------------
Print Name:
------------------------
Title:
-----------------------------
Address: 515 South Figueroa Street
Los Angeles, CA 90071
Attn: Gregory J. Hall
Telephone: (213) 489-6291
Telecopy: (213) 489-6252
128
NATIONAL BANK OF KUWAIT
By:
-------------------------------
Print Name:
------------------------
Title:
-----------------------------
By:
-------------------------------
Print Name:
------------------------
Title:
-----------------------------
Address: 299 Park Avenue
New York, NY 10171
Attn: Jeffrey J. Ganter
Telephone: (212) 303-9868
Telecopy: (212) 319-8269
129
SANWA BANK, LIMITED
By:
-------------------------------
Print Name:
------------------------
Title:
-----------------------------
Address: 601 S. Figueroa Street, W5-4
Los Angeles, CA 90017
Attn: Toshiko Boyd
Telephone: (213) 896-7176
Telecopy: (213) 623-4912
130
U.S. BANK NATIONAL ASSOCIATION
By:
-------------------------------
Print Name:
------------------------
Title:
-----------------------------
Address: 555 S.W. Oak Street, PL-4
Portland, OR 97204
Attn: Janet E. Jordan
Telephone: (503) 275-5871
Telecopy: (503) 275-5428
131
WELLS FARGO BANK,
NATIONAL ASSOCIATION
By:
-------------------------------
Print Name:
------------------------
Title:
-----------------------------
Address: 2030 Main Street
Suite 900
Irvine, CA 92614
Attn: Sandra Martin
Telephone: (949) 251-4156
132
Schedule 1.1 to
Credit Agreement
----------------
LENDERS AND REVOLVING LOAN COMMITMENTS
Name of Lender Revolving Loan Commitment
- -------------- -------------------------
Paribas