EXHIBIT 10.29
DRAFT DATE: 6/13/96
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THIRD AMENDED AND RESTATED LOAN AGREEMENT
Dated as of June __, 1996
Among
FINE HOST CORPORATION (the "Borrower"),
FINE HOST SERVICES CORPORATION ("Fine Host Services"),
FINE HOST INTERNATIONAL CORPORATION ("Fine Host International"),
FINE HOST OF VERMONT, INC. ("Fine Host of Vermont"),
FANFARE, INC. ("Fanfare"),
GLOBAL FANFARE, INC. ("Global Fanfare"),
CREATIVE FOOD MANAGEMENT, INC. ("CFM"),
NORTHWEST FOOD SERVICE, INC. ("Northwest"),
TARRANT COUNTY CONCESSIONS, L.L.C. ("Tarrant County"),
SUN WEST SERVICES, INC. ("SWSI"),
USTRUST ("UST"),
THE SUMITOMO BANK, LIMITED ("Sumitomo"),
STATE STREET BANK AND TRUST COMPANY ("SSB"),
BANK OF BOSTON CONNECTICUT ("BBC"),
MELLON BANK, N.A. ("Mellon") and
THE BANK OF NEW YORK ("BNY")
(UST, SUMITOMO, SSB, BBC, MELLON AND BNY ARE COLLECTIVELY
REFERRED TO AS THE "BANKS")
TABLE OF CONTENTS
Item Page No.
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1. DEFINITIONS
1.1 General Terms
1.2 Accounting Terms
1.3 Other Terms Defined in Uniform Commercial Code
1.4 Construction
2. LOANS
2.1 Working Capital Loans
2.2 Guidance Loans
2.3 Letters of Credit Under Working Capital Line
2.4 Borrower's Loan Account
2.5 Statements
2.6 Fees
2.7 Method of Making Payments
2.8 Term of this Agreement
2.9 Limitation on Charges
2.10 Capital Adequacy Provisions
2.11 Additional Collateral Following Termination
3. SECURITY FOR THE LIABILITIES; GUARANTIES
3.1 Security
3.2 Chattel Paper Instruments
3.3 Vehicles
3.4 Equipment
3.5 Equipment Records
3.6 Safekeeping of Equipment
3.7 Maintenance of Properties
4. CONDITIONS OF ADVANCES
4.1 Borrower's Request
4.2 Financial Condition
4.3 No Event of Default
4.4 Representations and Warranties
4.5 Additional Conditions for Approval of Guidance Loan
4.6 Additional Conditions for Approval of Working Capital Loans
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4.7 Other Requirements
4.8 Additional Conditions for Making Loans
5. REPRESENTATIONS AND WARRANTIES
5.1 Corporate Existence
5.2 Corporate Authority
5.3 Binding Effect
5.4 Financial Data
5.5 Tangible Assets
5.6 Title to Collateral
5.7 Real Property; Leases
5.8 Solvency
5.9 Principal Place of Business
5.10 Other Corporate Names
5.11 Tax Liabilities
5.12 Loans
5.13 Margin Securities
5.14 Subsidiaries; Divisions
5.15 Litigation and Proceedings
5.16 Registration Statement
5.17 Material Agreements
5.18 Largest Customers
5.19 Employee Controversies and Employment and Labor Agreements
5.20 Compliance with Laws and Regulations
5.21 Intellectual Property Rights
5.22 Pension Related Matters
5.23 Environmental Matters
5.24 Broker's Fee
5.25 Securities Matters
5.26 Equity Beneficial Ownership
5.27 Disclosure
5.28 Capitalization
5.29 Corporate Structure
5.30 Facility Agreements with Change in Stock Ownership Restrictions
6. AFFIRMATIVE COVENANTS
6.1 Financial Covenants
6.1.1 Debt to Operating Cash Flow Ratio
6.1.2 Operating Cash Flow to Fixed Charge-Ratio
6.1.3 Operating Cash Flow to Cash Interest Expense Ratio
6.1.4 Minimum Net Worth
6.1.5 Minimum Operating Cash Flow
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6.1.6 Minimum Tangible Capital Base
6.2 Financial Statements
6.3 Inspection
6.4 Conduct of Business
6.5 Claims and Taxes
6.6 The Agent's and the Banks' Costs and
Expenses as Additional Liabilities
6.7 Borrower's Liability Insurance
6.8 Borrower's Insurance
6.9 Pension Plans
6.10 Notice of Suit
6.11 Supervening Changes in Law
6.12 Environmental Notices
6.13 Use of the Proceeds
6.14 Depository Accounts
6.15 Collateral Assignments of Licenses and
Management Agreements
6.16 Application of Net Contract Proceeds
6.17 Covenants in Subordinated Debt Documents
7. NEGATIVE COVENANTS
7.1 Encumbrances
7.2 Indebtedness
7.3 Mergers and Consolidations
7.4 Acquisitions
7.5 Disposal of Property
7.6 Investment or Loans
7.7 Guaranties
7.8 Capital Expenditure Limitations
7.9 Distributions
7.10 Compensation
7.11 Transactions with Affiliates
7.12 Prepayment of Other Liabilities
7.13 Modification of Indebtedness
7.14 Amendment of Certificate or Articles of Incorporation or By-Laws
7.15 ERISA Termination Event
7.16 Subordinated Debt Documents
7.17 CFM Notes
8. DEFAULT, RIGHTS AND REMEDIES OF THE AGENT
8.1 Event of Default
8.2 Termination of Obligation to Make Loans and Acceleration
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8.3 Rights and Remedies Generally
8.4 Entry Upon Premises and Access to Information
8.5 Sale or Other Disposition of Collateral by the Agent
8.6 Waiver of Demand
8.7 Waiver of Notice
8.8 Advice of Counsel
9. THE AGENT
9.1 Appointment of the Agent
9.2 Administration of the Loans/Letters of Credit
9.3 Agent's Duty of Care
9.4 Reliance by Agent
9.5 Notice of Default
9.6 Non-Reliance on Agent and Other Banks
9.7 Indemnification
9.8 Successor Agent
9.9 Rescission of Loan Payments
9.10 Sharing of Payments
9.11 Representations and Warranties of the Other Banks
and of the Agent
9.12 Notices
10. MISCELLANEOUS
10.1 Waiver
10.2 Attorneys' Fees and Expenses
10.3 Expenditures by the Agent
10.4 Custody and Preservation by Collateral
10.5 Reliance by the Banks
10.6 Assignability; Parties
10.7 Applicable Law; Severability
10.8 Submission to Jurisdiction; Jury Trial Waiver; Waiver of Bond
10.9 Application of Payments
10.10 Marshalling; Payments Set Aside
10.11 Section Titles
10.12 Continuing Effect
10.13 Notices
10.14 Equitable Relief
10.15 Entire Agreement; Amendments
10.16 Participations/Assignments
10.17 Changes in Accounting Principles
10.18 Indemnity
10.19 Representations and Warranties, etc.
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10.20 Treatment of Certain Information
10.21 Independence of Covenants
10.22 Time of the Essence
Exhibit A Form of Commercial Promissory Note (Working Capital
Loan)
Exhibit B Form of Commercial Promissory Note (Guidance Line of
Credit)
Exhibit C Form of Application for Commercial Letter of Credit and
Agreement, with Addendum
Exhibit D Form of First Amended and Restated Unlimited Guaranty
Exhibit E Form of First Amended and Restated Security Agreement -
All Assets for Borrower and Unlimited Guarantors
Exhibit F Form of First Amended and Restated Assignment of
Receivables and Proceeds for Borrower and Unlimited
Guarantors
Exhibit G Form of First Amended and Restated Limited Guaranty
Exhibit H Form of First Amended and Restated Security Agreement -
All Assets for Limited Guarantors.
Exhibit I Form of First Amended and Restated Assignment of
Receivables and Proceeds for Limited Guarantors.
Exhibit J Form of First Amended and Restated Stock Pledge
Agreement
Exhibit K Form of First Amended and Restated LLC Pledge Agreement
Exhibit L Form of First Amended and Restated Joint Venture Pledge
Agreement
Schedule 3.4 Equipment.
Schedule 5.1 Corporate Existence.
Schedule 5.4 Financial Data.
Schedule 5.5 Tangible Assets.
Schedule 5.6 Title to Collateral.
Schedule 5.7 Real Property; Leases.
Schedule 5.8 Solvency.
Schedule 5.9 Principal Place of Business.
Schedule 5.10 Other Corporate Names.
Schedule 5.11 Tax Liabilities.
Schedule 5.12 Loans.
Schedule 5.13 Margin Securities.
Schedule 5.14 Subsidiaries; Divisions.
Schedule 5.15 Litigation and Proceedings.
Schedule 5.16 Registration Statement.
Schedule 5.17 Material Agreements.
Schedule 5.18 Largest Customers.
Schedule 5.19 Employment Controversies and Employment and Labor
Agreements.
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Schedule 5.20 Compliance with Laws and Regulations.
Schedule 5.21 Intellectual Property Rights.
Schedule 5.22 Pension Related Matters.
Schedule 5.23 Environmental Matters.
Schedule 5.24 Broker's Fees.
Schedule 5.26 Capital Stock.
Schedule 5.30 Interest in Other Entities.
Schedule 7.1 Permitted Liens.
Schedule 7.2 Permitted Indebtedness.
Schedule 7.4 Acquisitions.
Schedule 7.6 Ongoing Investments
Schedule 7.7 Guaranties.
Schedule 7.10 Compensation to Affiliates.
Schedule 7.11 Transactions with Affiliates
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This THIRD AMENDED AND RESTATED LOAN AGREEMENT (this "Agreement") is
executed and effective (subject to all of the conditions contained herein) on
June __, 1996, but is dated as of the Closing Date (as defined below), by and
among (a) FINE HOST CORPORATION, a Delaware corporation, with its principal
place of business and chief executive office at 3 Greenwich Office Park,
Greenwich, Connecticut 06831 ("Borrower" or the "Borrower"), (b) FINE HOST
SERVICES CORPORATION, a Delaware corporation, which is a wholly-owned subsidiary
of the Borrower, and whose principal place of business is at 3 Greenwich Office
Park, Greenwich, Connecticut 06831 ("Fine Host Services"), (c) FINE HOST OF
VERMONT, INC., a Vermont corporation, which is a wholly-owned subsidiary of the
Borrower, and whose principal place of business is at 255 Maple Street, Stowe,
Vermont 05672 ("Fine Host of Vermont"), (d) FANFARE, INC., a Massachusetts
corporation, which is a wholly-owned subsidiary of the Borrower, and whose
principal place of business is at 797 Turnpike Street, North Andover,
Massachusetts 01845 ("Fanfare"), (e) GLOBAL FANFARE, INC., an Indiana
corporation, which is a wholly-owned subsidiary of the Borrower, and whose
principal place of business is at 4000 Parnell Avenue, Fort Wayne, Indiana 46805
("Global Fanfare"), (f) FINE HOST INTERNATIONAL CORPORATION, a Delaware
corporation, which is a wholly-owned subsidiary of the Borrower, and whose
principal place of business is at 3 Greenwich Office Park, Greenwich,
Connecticut 06831 ("Fine Host International"), (g) CREATIVE FOOD MANAGEMENT,
INC., an Ohio corporation (formerly known as VGE Acquisition Corp.), which is a
wholly-owned subsidiary of the Borrower, and whose principal place of business
is at 6061 Telegraph Road, Suite MM, Toledo, Ohio 43612 ("CFM"), (h) NORTHWEST
FOOD SERVICE, INC., an Idaho corporation which is a wholly-owned subsidiary of
the Borrower, and whose principal place of business is at 305 East 37th Street,
Boise, Idaho 83714 ("Northwest"), (i) TARRANT COUNTY CONCESSIONS, L.L.C., a
Texas limited liability company, with its principal place of business located at
100 Congress Avenue, Suite 1100, Austin, Texas 78746 ("Tarrant County"), (j)
SUN WEST SERVICES, INC., a New Mexico corporation, which is a wholly-owned
subsidiary of the Borrower, and whose principal place of business is at 19 West
Alameda Drive, Suite No. 101, Tempe, Arizona 85282 ("SWSI"), (k) USTRUST, a
Massachusetts trust company, having an office at 30 Court Street, Boston,
Massachusetts 02108 (acting for itself, "UST"), (l) USTRUST, a Massachusetts
trust company, having an office at 30 Court Street, Boston, Massachusetts 02108
(acting as agent for the Banks, including itself, the "Agent"), (m) THE SUMITOMO
BANK, LIMITED, a Japanese bank, having an office at 233 South Wacker Drive,
Chicago, Illinois 60606 ("Sumitomo"), (n) STATE STREET BANK AND TRUST COMPANY, a
Massachusetts trust company, having an office at 225 Franklin Street, Boston,
Massachusetts 02110 ("SSB"), (o) BANK OF BOSTON CONNECTICUT, a Connecticut bank,
having an office at One Landmark Square, Suite 2002, Stamford, Connecticut
06901 ("BBC"), (p) MELLON BANK, N.A., a national banking association, having an
office at 1735 Market Street, P.O. Box 7899, Philadelphia, Pennsylvania 19101
("Mellon") and (q) THE BANK OF NEW YORK, a New York bank, having an office at
530 Fifth Avenue, New York, New York 10036 ("BNY"). (UST for itself, Sumitomo,
SSB, BBC, Mellon and BNY are hereinafter sometimes referred to collectively as
the "Banks" and singly as a "Bank").
PRELIMINARY STATEMENTS
UST, Sumitomo, SSB, BBC, BNY, the Borrower and its Subsidiaries have
entered into certain loan arrangements which are evidenced by, among other
documents, a certain Second Amended and Restated Loan Agreement dated April 24,
1995 among UST, Sumitomo, SSB, BBC, BNY, the Borrower and its Subsidiaries, as
subsequently amended, pursuant to which UST, Sumitomo, SSB, BBC and BNY have
made certain loans to the Borrower as more particularly described therein (as so
amended, the "Existing Loan Agreement").
UST, Sumitomo, SSB, BBC, BNY and Mellon have agreed to increase certain of
such loan arrangements such that the total aggregate principal amount of all
such loan arrangements is increased to up to Seventy-Five Million and 00/100
Dollars ($75,000,000.00), as more particularly described in this Agreement. The
aggregate commitment of UST hereunder is no greater than Fifteen Million and
00/100 Dollars ($15,000,000.00), the aggregate commitment of Sumitomo hereunder
is no greater than Fifteen Million and 00/100 Dollars ($15,000,000.00), the
aggregate commitment of SSB hereunder is no greater than Fifteen Million and
00/100 Dollars ($15,000,000.00), the aggregate commitment of BBC hereunder is no
greater than Ten Million and 00/100 Dollars ($10,000,000.00), the aggregate
commitment of Mellon hereunder is no greater than Ten Million and 00/100 Dollars
($10,000,000.00), and the aggregate commitment of BNY hereunder is no greater
than Ten Million and 00/100 Dollars ($10,000,000.00). Notwithstanding anything
contained herein to the contrary, all obligations of the Banks hereunder with
respect to such loan arrangements are several, and not joint, obligations of the
Banks.
The Banks have agreed to designate UST as the "Agent" for the loan
arrangements described in this Agreement and, notwithstanding anything contained
herein to the contrary, the Agent shall act for all of the Banks in all matters
arising hereunder relating to the Banks as contemplated by Section 9.
The Banks, the Borrower and its Subsidiaries have agreed to amend and
restate the Existing Loan Agreement in its entirety, and all of the parties to
this Agreement acknowledge and agree that, upon execution and delivery of this
Agreement, this Agreement, from and after this date, shall govern the
relationship of the parties hereto.
AGREEMENTS
NOW, THEREFORE, in consideration of the terms and conditions contained
herein, and of any loans or extensions of credit now or hereafter made to or for
the benefit of the Borrower by the Banks, the parties hereto hereby agree as
follows:
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1. DEFINITIONS
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1.1 General Terms. When used herein, the following capitalized
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terms shall have the following meanings:
"Acceptable Supplement" shall have the meaning given to that term in
subsection 5.6.
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"Accumulated Funding Deficiency" shall mean a funding deficiency described
in Section 302 of ERISA.
"Affiliate" shall mean, as applied to any Person, any other Person (other
than the Borrower or any Subsidiary of Borrower) (a) that directly or
indirectly, through one or more intermediaries, controls or is controlled by, or
is under common control with, the Borrower, (b) that directly or beneficially
owns or holds ten percent (10%) or more of any class of the voting stock (or in
the case of a Person which is not a corporation, ten percent (10%) or more of
the equity interest) of the Borrower or (c) ten percent (10%) or more of whose
voting stock (or in the case of a Person which is not a corporation, ten percent
(10%) or more of the equity interest) is owned directly or beneficially or held
by the Borrower.
"Agent" shall mean UST, acting as agent for the Banks under this Agreement.
"Agreement" shall mean this Third Amended and Restated Loan Agreement,
together with all exhibits and schedules hereto, as amended, modified,
supplemented, restated or extended from time to time.
"Approval" shall mean each approval, consent, filing or registration by or
with any Federal, state or other regulatory authority necessary to authorize or
permit the execution, delivery or performance of this Agreement or the Loan
Documents or for the validity or enforceability hereof or thereof by the
Borrower and its Affiliates.
"Assignments of Receivables and Proceeds" shall mean the First Amended and
Restated Assignments of Receivables and Proceeds, dated as of the Closing Date,
by and between the Borrower or the applicable Subsidiary and the Agent, which
are to be executed and delivered in accordance with the provisions of subsection
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4.8 below, as the same may be further amended, reaffirmed, modified,
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supplemented, restated or extended from time to time, and any and all other
assignments of receivables and proceeds which may in the future be required to
be executed and delivered by the Borrower or any Subsidiary in favor of the
Agent, in compliance with the provisions of subsection 3.1(b) below.
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"Banks" or "the Banks" shall mean UST, Sumitomo, SSB, BBC, Mellon, BNY and
their respective successors and assigns.
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"Base Lending Rate" shall mean the variable rate of interest, per annum,
most recently announced by UST at its headquarters in Boston, Massachusetts, as
its "base lending rate," with the understanding that UST's "base lending rate"
is one of its interest rates and serves as a basis upon which effective rates of
interest are calculated for loans making reference thereto and may not be the
lowest of UST's interest rates. Any change in the Base Lending Rate shall be
effective as of the effective date stated in the announcement by UST of such
change.
"Borrower" or "the Borrower" shall mean Fine Host Corporation, a Delaware
corporation, and all its successors and assigns.
"Business Day" shall mean except as provided in the LIBOR provisions of the
Notes, any day other than a Saturday, Sunday, public holiday under the laws of
the Commonwealth of Massachusetts, the Commonwealth of Pennsylvania, the State
of Connecticut or the State of New York or other day on which banking
institutions are authorized or are required to be closed in Boston,
Massachusetts, New York, New York, Pittsburgh, Pennsylvania, or Hartford,
Connecticut.
"Cancellation Fee" shall have the meaning given to that term in subsection
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2.8.
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"Capital Base" shall mean, at any date as of which determination is made,
the sum of the consolidated Net Worth of the Borrower and its Subsidiaries,
taken as a whole, plus any Subordinated Debt.
"Capital Expenditure" shall mean, for any period, the sum of (a) the
aggregate amount of all expenditures of the Borrower and its Subsidiaries for
fixed or capital assets made during such period which, in accordance with GAAP,
would be classified as capital expenditures, and (b) the aggregate amount of all
Capitalized Lease Obligations during such period.
"Capitalization Period" shall have the meaning given to that term in
subsection 4.5(b).
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"Capitalized Lease Obligations" shall mean, for any period, all of the
Borrower's and any Subsidiary's obligations under any lease of property (real,
personal or mixed) or other periodic payment arrangement which have been or
should be capitalized on the Borrower's and Subsidiaries' consolidated balance
sheet in accordance with GAAP, in each case taken at the amount thereof
accounted for as indebtedness, net of interest expense, determined in accordance
with GAAP, the stated maturity of which shall be the date of the last payment of
any amount thereunder prior to the first date upon which such arrangement may be
terminated by the Borrower or its Subsidiaries without payment of any penalty.
"Cash Equivalent Investment" shall mean, at any time: (i) securities
issued or directly and fully guaranteed or insured by the United States of
America or any agency or
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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 one year from the date of acquisition, (ii) time deposits and certificates
of deposit with maturities of not more than 90 days from the date of
acquisition, of any commercial banking institution that is a member of the
Federal Reserve System having capital and surplus in excess of $500,000,000,
whose debt has a rating at the time of any such investment of at least "A-2" or
the equivalent thereof by Standard & Poor's or at least "P-2" or the equivalent
thereof by Moody's or any Bank, (iii) fully secured repurchase obligations with
a term of not more than seven days for underlying securities of the types
described in clause (i) entered into with UST, and (iv) commercial paper issued
by the parent corporation of any commercial banking institution that is a member
of the Federal Reserve System having capital and surplus in excess of
$500,000,000 and commercial paper or master notes of issuers, rated at the time
of any such investment at least "A-2" or the equivalent thereof by Standard &
Poor's or at least "P-2" or the equivalent thereof by Moody's or any Bank, and
in each case maturing within 270 days after the date of acquisition.
"Cash Interest Expense" shall mean, with respect to any Person for any
period, the interest expense of such Person for such period, less all non-cash
items constituting interest expense during such period (including, without
limitation, amortization of debt discounts and payments of interest on
Indebtedness through the issuance of Indebtedness).
"CFM Notes" shall mean the following: (a) a certain Subordinated
Promissory Note, dated as of November 15, 1995, from the Borrower, made payable
to the order of James E. Kern, in the original principal amount of One Million
Four Hundred Forty Thousand and 00/100 Dollars ($1,440,000.00); (b) a certain
Subordinated Promissory Note, dated as of December 8, 1994, from the Borrower,
made payable to the order of James E. Kern, in the original principal amount of
Eighty Thousand and 00/100 Dollars ($80,000.00); (c) a certain Subordinated
Promissory Note, dated as of November 13, 1995, from the Borrower, made payable
to the order of John F. Kusner, in the original principal amount of Seven
Hundred Fifty-Six Thousand and 00/100 Dollars ($756,000.00); and (d) a certain
Subordinated Promissory Note, dated as of December 8, 1994, from the Borrower,
made payable to the order of John F. Kusner, in the original principal amount of
Three Hundred Fifty-Four Thousand and 00/100 Dollars ($354,000.00).
"Change in Control" means a majority of the members of the Board of
Directors of the Borrower are not Continuing Directors.
"Closing" or "Closing Date" shall meaning to that term in subsection 10.23.
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"Code" shall mean the Uniform Commercial Code of the Commonwealth of
Massachusetts (or with respect to Collateral in which a Lien may only be
perfected pursuant to the laws of any other state or the District of Columbia,
the Uniform Commercial Code of such state or of the District of Columbia), as
amended, and any successor statute of similar import as in effect from time to
time.
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"Collateral" shall mean all of Borrower's or its Subsidiaries' right,
title, and interest in and to the Collateral, as defined in the applicable
Security Agreement, in or upon which a Lien has been or is granted to the Agent,
as security for the Liabilities, whether under this Agreement, the other Loan
Documents, at law or in equity, or under any other documents, instruments,
agreements or writings delivered to the Agent or any Bank which were executed by
the Borrower, its Subsidiaries, any Affiliate of the Borrower, or any such other
Person.
"Common Shares" means the shares of common stock, $.01 par value per share,
of the Borrower, of which 25,000,000 shares are authorized pursuant to the
certificate of incorporation of the Borrower, as amended through the date
hereof.
"Continuing Director" shall mean and include a member of the Board of
Directors of the Borrower who was (i) a member of the Board of Directors on the
date hereof or (ii) nominated for election or elected to the Board of the
Directors with the affirmative vote of at least two-thirds of (x) members
described in clause (i) or (y) members who were in turn so nominated or so
elected by members described in clause (i) or clause (ii)(x).
"Contract Extension" shall have the meaning given to that term in
subsection 4.5(a).
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"Converted Amount" shall have the meaning given to that term in subsection
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2.2(d).
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"Debt" shall mean the total of, without duplication (a) Liabilities (less
the stated undrawn amount of the Letters of Credit issued by UST under
subsection 2.3 or subsection 2.1(a)); (b) all Indebtedness allowed pursuant to
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subsection 7.2(c) and (g); (c) any draws under any letter of credit issued by
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any Person for the benefit of Borrower or any of its Subsidiaries as account
party; and (d) any such letter of credit which becomes a banker's acceptance.
"Default" shall mean an event which through the passage of time or the
service of notice or both would (assuming no action is taken by the Borrower to
cure the same) mature into an Event of Default.
"Designated Banks" shall have the meaning given such phrase in subsection
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9.2(h).
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"Dollar", "Dollars" and "$" shall mean lawful money of the United States of
America.
"Employment and Labor Agreements" shall have the meaning given to that term
in subsection 5.19(b).
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"Environmental Laws" shall mean all Laws relating to health, safety and
environmental matters, including without limitation all Laws relating to the
release, disposal, handling, storage, production, removal, processing or
transporting of Hazardous Substances. Such Laws include but are not limited to
the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. Sec.6901 et seq
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as amended; the Comprehensive Environmental Response, Compensation and Liability
Act ("CERCLA"), 42 U.S.C. Sec.9601 et seq, as amended; the Toxic Substance Act,
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15 U.S.C. Sec.2601 et seq , as amended, the Clean Water Act, 33 U.S.C. Sec.466
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et seq, as amended; the Clear Air Act, 42 U.S.C. Sec.7401 et seq, as amended;
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state and federal superlien and environmental laws and regulations, including
cleanup programs; and United States Department of Transportation regulations.
"Environmental Notice" shall mean any summons, citation, directive,
information request, notice of potential responsibility, notice of violation or
deficiency, order, claim, complaint, investigation, proceeding, judgment, letter
or other communication, written or oral, actual or threatened, from the United
States Environmental Protection Agency or other federal, state or local agency
or authority, or any other entity or individual, public or private, concerning
(i) any intentional or unintentional act or omission which involves Management
of Hazardous Substances either on or off any property owned or leased by the
Borrower or any Subsidiary of the Borrower; (ii) the imposition of any Lien on
such property, including but not limited to Liens asserted by government
entities in connection with Responses to the presence or Release of Hazardous
Substances; and (iii) any alleged violation of or responsibility under
Environmental Laws.
"Equipment" shall mean all of the Borrower's or its Subsidiaries' right,
title, and interest in and to equipment (as defined in the Code), including
without limitation machinery, furniture, Vehicles and fixtures and other
tangible personal property other than Inventory, whether located on premises
owned, leased or occupied by the Borrower or located elsewhere, together with
any and all accessions, parts and appurtenances thereto, whether now owned or
hereafter acquired and owned by the Borrower, including all right, title, and
interest of Borrower and its Subsidiaries to any Equipment used in connection
with or under a Facility Agreement.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, and regulations and
rulings thereunder, in each case as in effect from time to time. References to
sections of ERISA shall be construed to refer to any successor sections.
"ERISA Affiliate" shall mean each trade or business, including the
Borrower, whether incorporated or not, which together with the Borrower would be
treated as a single employer under Section 4001 of ERISA.
"ERISA Termination Event" shall mean (a) the occurrence of a Reportable
Event or a Prohibited Transaction, (b) the complete or partial withdrawal (as
defined in Sections 4203 and 4205 of ERISA) by the Borrower or any ERISA
Affiliate from a Multiemployer
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Plan, or the receipt by the Borrower or any ERISA Affiliate of a demand from any
Multiemployer Plan for withdrawal liability, (c) the filing of a notice of
intent to terminate any Plan or the treatment of a plan amendment as a
termination of any such Plan under Section 4041 of ERISA, (d) as soon as the
Borrower or any ERISA Affiliate has knowledge thereof, any action causing
termination under Section 4041A of ERISA of any Multiemployer Plan, (e) as soon
as the Borrower or any ERISA Affiliate has knowledge thereof, the institution of
proceedings to terminate any Plan or Multiemployer Plan by the PBGC under
Section 4042 of ERISA, or (f) the occurrence of any other event or condition
which might constitute grounds under Sections 4041A or 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan.
"Event of Default" shall have the meaning given to that term in subsection
----------
8.1 hereof.
- ---
"Existing Loan Agreement" shall have the meaning given that term in the
first paragraph of Preliminary Statements of this Agreement.
"Facility Agreements" shall mean all concession, license or management
agreements to which the Borrower or any of its Subsidiaries is currently or
hereafter becomes a party, and pursuant to which the Borrower or any such
Subsidiary has agreed (a) to provide food and beverage services at certain
facilities described therein, (b) to operate and otherwise use food, beverage
and liquor licenses at such facilities, or (c) to manage certain concession and
food service areas at such facilities whether such facilities or locations are
owned by the Borrower, any Affiliate of the Borrower, or any other Person.
"Financials" shall have the meaning set forth in subsection 5.4 hereof.
--------------
"Fixed Charges" shall mean, for any period, the sum of (i) all regularly
scheduled payments of principal on Indebtedness of the Borrower and its
Subsidiaries made or required to be made in such period, (ii) payments under
Capitalized Lease Obligations made or required to be made in such period, and
(iii) Cash Interest Expense of Borrower and its Subsidiaries.
"GAAP" shall mean generally accepted accounting principles, as promulgated
by the Financial Accounting Standards Board or other successor governing body,
as in effect from time to time, consistently applied.
"Guaranties" shall mean the Unlimited Guaranties and the Limited
Guaranties.
"Guarantor" shall mean any guarantor of all or any part of the Liabilities,
including without limitation, the Subsidiaries and the Limited Guarantors.
"Guidance Line Conversion Dates" means and includes any and all of the
following dates: September 30, 1997, December 31, 1998, May 31, 1999, and any
date on
-8-
which the aggregate outstanding principal amount of all Guidance Loans is Twenty
Million and 00/100 Dollars ($20,000,000.00) or more.
"Guidance Line of Credit" shall have the meaning given to such term under
subsection 2.2.
- --------------
"Guidance Loans" shall have the meaning given that term in subsection 2.2.
--------------
"Guidance Notes" shall mean the Commercial Promissory Notes evidencing the
Guidance Loans, which are to be executed and delivered by the Borrower pursuant
to the provisions of subsection 2.2 below, as the same may be amended, modified,
--------------
supplemented, restated or extended from time to time.
"Hazardous Substances" shall mean hazardous substances, hazardous wastes,
hazardous waste constituents, hazardous materials, pesticides, oil and other
petroleum products, and toxic substances, including asbestos and PCBS, as those
terms are defined pursuant to Environmental Laws.
"Impermissible Qualification" means, relative to the opinion or
certification of any independent public accountant as to any financial statement
of the Borrower, any qualification or exception to such opinion or certification
(a) which is of a "going concern" or similar nature;
(b) which relates to the limited scope of examination of matters relevant
to such financial statement; or
(c) which relates to the treatment or classification of any item in such
financial statement and which, as a condition to its removal, would require an
adjustment to such item the effect of which would be to cause the Borrower to be
in default of any of its obligations under subsection 6.1 below.
--------------
"Indebtedness" shall mean without duplication, with respect to any Person:
(a) all obligations of such Person for borrowed money (including all
notes payable and drafts accepted representing extensions of credit) and
all obligations evidenced by bonds, debentures, notes or other similar
instruments on which interest charges are customarily paid;
(b) all obligations, contingent or otherwise, relative to the face
amount of all letters of credit, whether or not drawn, and banker's
acceptances issued for the account of such Person;
(c) all other items
-9-
(i) which, in accordance with GAAP, would be included as
liabilities on the liability side of the balance sheet of such Person
(including any leasing or similar arrangement which is classified as a
capitalized lease) as of the date at which Indebtedness is to be
determined, and
(ii) which are incurred as a financing, whether or not in the
ordinary course of business;
(d) whether or not so included as liabilities in accordance with GAAP,
(i) all obligations of such Person to pay the deferred purchase
price of property or services and indebtedness (excluding prepaid interest
thereon) secured by a Lien on property owned or being purchased by such Person
(including indebtedness arising under conditional sales or other title retention
agreements), whether or not such indebtedness shall have been assumed by such
Person or is limited in recourse; provided, however, that, for purposes of
--------- -------
determining the amount of any Indebtedness of the type described in this clause,
if recourse with respect to such Indebtedness is limited to such property, the
amount of such Indebtedness shall be limited to the fair market value of such
property; and
(ii) all guaranties made by such Person; and
(e) net obligations under interest rate swap, exchange or cap
agreements.
"Insolvent" or "Insolvency" shall mean, with respect to any Person, when
any of the following events shall have occurred in respect of such Person:
admission in writing of its inability, or its general inability, to pay its
debts as they become due, dissolution, termination of existence, cessation of
normal business operations (other than a temporary cessation due to fire or
other casualty, acts of God, strike or other event not within the control of
such Person), insolvency, appointment of a receiver for any material part of the
property of, legal or equitable assignment, conveyance or transfer of, all or
substantially all of the property for the benefit of creditors by, or a
commencement of any proceedings under any bankruptcy or insolvency Laws or any
Laws relating to the relief of debtors, readjustment of Indebtedness,
reorganization, composition or extension by or against such Person, but shall
not include transactions permitted under subsection 7.3 .
--------------
"Inventory" shall mean all of the right, title, and interest of the
Borrower or any of its Subsidiaries in and to any and all inventory (as defined
in the Code), including without limitation, goods in transit, wheresoever
located, whether now owned or hereafter acquired and owned by the Borrower or
its Subsidiaries, which are held for sale or lease, furnished under any contract
of service or held as raw materials, work-in-process or supplies, and all
materials used or consumed in the Borrower's or such Subsidiary's business, and
shall include such property the sale or other disposition of which has given
rise to accounts
-10-
receivable and which has been returned to, or repossessed or stopped in transit
by, the Borrower or any such Subsidiary.
"Investment" shall mean relative to any Person,
(a) any loan or advance made by such Person to any other Person
(excluding commission, travel and similar advances to officers and
employees made in the ordinary course of business);
(b) any payment made with respect to a Facility Agreement that is
required to be capitalized or is otherwise capitalized as a contract right
pursuant to GAAP;
(c) any guaranty of such Person; and
(d) any ownership or similar interest held by such Person in any
other Person.
The amount of any Investment shall be the original principal or capital amount
thereof less all returns of principal or equity thereon (and without adjustment
by reason of the financial condition of such other Person) and shall, if made by
the transfer or exchange of property other than cash, be deemed to have been
made in an original principal or capital amount equal to the fair market value
of such property.
"Joint Venture Interests" shall mean any interests in any joint venture,
partnership or trust which are, at the time, either directly or indirectly,
owned by the Borrower or any of its Subsidiaries, and which are more than fifty
percent (50%) of all of the outstanding interests of such joint venture,
partnership or trust.
"Joint Venture Pledge Agreements" shall mean the First Amended and Restated
Joint Venture Pledge Agreements, each dated as of the Closing Date, by and
between the Borrower and the Agent, which are to be executed and delivered in
accordance with the provisions of subsection 4.8 below, as the same may be
--------------
further amended, reaffirmed, modified, supplemented, restated or extended from
time to time, and any and all other pledge agreements which may in the future be
required to be executed and delivered by the Borrower or any Subsidiary in favor
of the Agent, in compliance with the provisions of subsection 3.1(f) below.
-----------------
"Law" shall mean any law (including common law), constitution, statute,
treaty, regulation, rule, ordinance, order, injunction, writ, decree, judgment
or award of any governmental body (including, without limitation, any court or
any administrative or regulatory agency).
"Letter of Credit" or "Letters of Credit" shall mean any one or more of the
letters of credit to be issued by the Agent under subsection 2.1(a) or
-----------------
subsection 2.3, which shall be
- --------------
-11-
acceptable to the proposed beneficiary, and reference herein to "principal
amount" of such letters of credit shall mean the initial principal amount
thereof, whether drawn or undrawn.
"Letter of Credit Line" shall mean the credit facility which the Banks
extend to the Borrower under subsection 2.3.
--------------
"Letter of Credit Loan" shall have the meaning given to that term in
subsection 2.3.
- --------------
"Liabilities" shall mean all of the Borrower's and its Subsidiaries'
liabilities, obligations, and indebtedness to the Banks or the Banks'
Affiliates, of any and every kind and nature, whether heretofore, now or
hereafter owing, arising, due or payable and howsoever evidenced, created,
incurred, or acquired, whether primary, secondary, direct or indirect, absolute
or contingent, fixed or otherwise (including obligations of performance under
and the requirement to reimburse draws on Letters of Credit) and whether arising
or existing under written agreement or by operation of Law as a result of the
Borrower's and its Subsidiaries' Indebtedness and obligations to the Banks under
this Agreement or any of the other Loan Documents, as they may be amended,
modified, supplemented, restated or extended from time to time.
"LIBOR" shall have the meaning given that term in the Notes.
"License or Licenses" shall have the meaning given to that term in
subsection 5.20(b).
- ------------------
"Lien" shall mean any mortgage, deed of trust, pledge, lien, security
interest, charge or encumbrance or security arrangement of any nature
whatsoever, whether arising by written or oral agreement or by operation of Law,
including but not limited to any conditional sale or title retention
arrangement, and any assignment, deposit arrangement or lease intended as, or
having the effect of, security.
"Limited Guaranties" shall mean the First Amended and Restated Limited
Guaranties, each dated as of the Closing, from each of the Orange County Joint
Venture and the Oregon Joint Venture, in favor of the Banks, which are to be
executed and delivered in accordance with the provisions of subsection 4.8
--------------
below, as the same may be further reaffirmed, amended, modified, supplemented,
restated or extended from time to time and any and all other limited guaranties
which may in the future be executed and delivered by any Person in favor of the
Banks.
"Limited Guarantors" shall mean each of the Orange County Joint Venture and
the Oregon Joint Venture, and any and all other Persons who may in the future
execute and deliver, Limited Guaranties in favor of the Banks.
-12-
"LLC Pledge Agreements" shall mean the First Amended and Restated LLC
Pledge Agreement, dated as of the Closing Date, by and between the Borrower and
Agent, which is to be executed and delivered in accordance with the provisions
of subsection 4.8 below, as the same may be further amended, reaffirmed,
--------------
modified, supplemented, restated or extended from time to time, and any and all
other pledge agreements which may in the future be required to be executed and
delivered by the Borrower or any Subsidiary in favor of the Agent, in compliance
with the provisions of subsection 3.1(g) below.
-----------------
"Loan Account" shall mean the account on the books of the Agent in which
will be recorded Loans and advances made to the Borrower, issued by the Agent
to, or for the benefit of, the Borrower pursuant to this Agreement or any of the
other Loan Documents, payments made on such Loans and other appropriate debits
and credits as provided by this Agreement or any of the other Loan Documents.
"Loan" or "Loans" shall mean one or more advances made to the Borrower
pursuant to Section 2 and the issuance of Letters of Credit (whether drawn or
---------
undrawn) pursuant to Section 2.
---------
"Loan Documents" shall mean this Agreement, the Notes, the Letters of
Credit, and all agreements, instruments and documents referenced in Section 3
---------
hereof and any related subordination agreements, intercreditor agreements,
powers of attorney, consents, security agreements or financing statements,
whether heretofore, now, or hereafter executed by or on behalf of the Borrower,
any Subsidiary of the Borrower, any Affiliate of the Borrower, any Guarantor or
any other Person and delivered to the Agent or any Bank in connection with the
Loans, all as may be amended, modified, supplemented, restated or extended from
time to time.
"Manage" or "Management" shall mean to generate, handle, manufacture,
process, treat, store, use, re-use, refine, recycle, reclaim, blend or burn for
energy recovery,
incinerate, accumulate speculatively, transport, transfer, dispose of, Release,
threaten to Release or abandon Hazardous Substances.
"Material Adverse Effect" or "Material Adverse Change" shall mean, with
respect to any Person, an effect, resulting from any occurrence of whatever
nature (including, without limitation, any adverse determination in litigation,
arbitration or governmental investigation or proceeding), materially adverse to
the business, financial condition, operations or prospects of such Person and
its Subsidiaries, taken as a whole.
"Membership Interests" shall mean any membership interests in any limited
liability company which are, at the time, either directly or indirectly, owned
by the Borrower or any of its Subsidiaries, and which are more than fifty
percent (50%) of all of the outstanding membership interests of such limited
liability company.
-13-
"Moody's" shall mean Moody's Investors Service, Inc. or any other entity
succeeding to any or all of its functions.
"Multiemployer Plan" shall mean any "multiemployer plan" within the meaning
of Section 3(37) of ERISA and to which the Borrower or any ERISA Affiliate has
or had any obligation to contribute.
"NASD" shall mean the National Association of Securities Dealers, Inc. or
any other entity succeeding to any or all of its functions.
"Net Contract Proceeds" shall mean, with respect to the sale, cancellation,
termination or other discontinuation of any Facility Agreement with any Person
at any time, the sum of (a) (i) the gross cash proceeds received by the Borrower
or any of its Subsidiaries from or on account of such Person as a result thereof
and, without duplication, (ii) all payments received by the Borrower or any of
its Subsidiaries on account of Indebtedness owing to any of them from such
Person (including payments on Notes Receivable) less (b) (i) all reasonable
----
legal, accounting and other professional fees, costs and expenses incurred in
connection therewith, (ii) all taxes actually paid or estimated by the Borrower
(in good faith) to be payable in connection therewith and (iii) all payments
made at such time (and not at any earlier time) by the Borrower or any of its
Subsidiaries to such Person in order to repay or otherwise retire Indebtedness
incurred in connection with such Facility Agreement.
"Net Income" or "Net Loss" for any fiscal period of the Borrower shall mean
income or loss of the Borrower and its Subsidiaries, taken as a whole, after
deduction of all expenses, taxes and other proper charges, as would be set forth
on a consolidated income statement of the Borrower and its Subsidiaries for such
fiscal period, prepared in accordance with GAAP.
"Net Worth" shall mean, at any time, the excess by which the value of all
of the assets of Borrower and its Subsidiaries, taken as a whole, exceeds the
total of all the liabilities of the Borrower and its Subsidiaries, taken as a
whole, as determined on a consolidated basis, in accordance with GAAP.
"New Project" shall have the meaning given to that term in subsection
----------
4.5(a).
- ------
"Northwest Acquisition Indebtedness" means the Indebtedness of the Borrower
to Robert F. Barney in the original principal amount of One Million Three
Hundred Fifty Thousand and 00/100 Dollars ($1,350,000.00).
"Notes" shall mean the Working Capital Notes and the Guidance Notes.
"Notes Receivable" shall mean any promissory note (or related bond or
letter of credit), or similar agreement or arrangement by any Person to pay
money to the Borrower or any of its Subsidiaries under the terms of or in
connection with a Facility Agreement.
-14-
"Offshore Subsidiary" means a Subsidiary of the Borrower which is
established, organized or otherwise formed outside the United States of America.
"Ongoing Investments" shall have the meaning given to that term in
subsection 7.6.
- --------------
"Operating Cash Flow" shall mean, for the Borrower and its consolidated
Subsidiaries, determined in accordance with GAAP, earnings before interest
expense, depreciation and amortization (net of all applicable taxes), less the
following (net of all applicable taxes): (i) any reversal of any contingency
reserve (other than as allowed by GAAP), (ii) all extraordinary gains and
losses, (iii) all gains and losses from acquisitions, sales, exchanges and
dispositions of property not in the ordinary course of business, (iv) any gain
or loss arising from the collection of the proceeds of any insurance policy, (v)
any gain or loss resulting from the write-up of any property and (vi) any non-
recurring credit or charge items.
"Orange County Joint Venture" means Fine Host/R&N/A Cup Above Joint
Venture, a joint venture organized pursuant to a certain Joint Venture
Agreement, dated 1994, by and among (a) the Borrower, (b) Ronald O. Rogers and
Tyrone W. Nabbie d/b/a R&N Management Services and (c) Ellen Korbin d/b/a A Cup
Above.
"Oregon Joint Venture" means Fine Host/S. Brooks & Associates Joint Venture
, a joint venture organized pursuant to a certain Joint Venture Agreement, dated
May, 1995, by and between the Borrower and S. Brooks & Associates, Inc. an
Oregon corporation.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
under Title IV of ERISA or any other governmental agency, department or
instrumentality succeeding to the functions of said corporation.
"Person" shall mean any individual, sole proprietorship, partnership,
limited liability company, joint venture, trust, unincorporated organization,
association, corporation, institution, entity, party, or government (whether
national, federal, state, provincial, county, city, municipal or otherwise,
including without limitation any instrumentality, division, agency, body or
department thereof).
"Plan" shall mean any employee pension or benefit plan (other than a
Multiemployer Plan) to which Section 4021(a) of ERISA applies and (a) which is
maintained for employees of the Borrower or any of its ERISA Affiliates; or (b)
to which the Borrower or any of its ERISA Affiliates made, or was required to
make, contributions at any time within the preceding five years.
"Pledge Agreements" shall mean the Stock Pledge Agreements, the Joint
Venture Pledge Agreements and the LLC Pledge Agreements.
-15-
"Prohibited Transaction" shall mean with respect to any Plan any
transaction described in Section 406 of ERISA which is not exempt by reason of
Section 408 of ERISA or the transitional rules set forth in Section 414(c) of
ERISA and any transaction described in Section 4975(c)(1) of the Tax Code which
is not exempt by reason of Section 4975(c)(2) or Section 4975(d) of the Tax
Code, or the transitional rules of Section 2003(c) of ERISA.
"Project Costs" shall mean, with respect to any New Project or Contract
Extension (as defined in subsection 4.5), the sum of the following items, to the
--------------
extent required by the Facility Agreement associated with the New Project or
Contract Extension: (a) Capital Expenditures, in accordance with GAAP, (b) costs
capitalized as contract rights pursuant to GAAP, and (c) Notes Receivable.
"Registration Statement" shall have the meaning set forth in subsection
----------
5.16.
- ----
"Regulatory Change" shall mean, with respect to any Bank, any change after
the date of this Agreement in Federal, state or foreign law or regulations
(including, without limitation, Regulation D of the Federal Reserve Board) or
the adoption or making after such date of any interpretation, directive or
request applying to a class of banks including such Bank of or under any
Federal, state or foreign law or regulations (whether or not having the force of
law and whether or not failure to comply therewith would be unlawful) by any
court or governmental or monetary authority charged with the interpretation or
administration thereof.
"Release" shall mean any actual or threatened spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injection, escaping, leaching, dumping
or disposing of Hazardous Substances into the environment, as the term
'environment' is defined in CERCLA.
"Reportable Event" shall mean (a) a reportable event described in Section
4043 of ERISA and regulations thereunder, for which the obligation to give
notice to the PBGC has not been waived by the PBGC in accordance with applicable
regulations, (b) a withdrawal by a substantial employer from a single-employer
plan which is a Plan and which has two or more contributing sponsors at least
two of which are not under common control, as referred to in Section 4063(b) of
ERISA, or (c) a cessation of operations at a facility causing more than twenty
percent of plan participants to be separated from employment, as referred to in
Section 4068(f) of ERISA.
"Respond" or "Response" shall mean any action taken pursuant to
Environmental Laws to correct, remove, remediate, clean up, prevent, mitigate,
monitor, evaluate, investigate or assess the Release of a Hazardous Substance.
"SEC" shall mean the United States Securities and Exchange Commission or
any other federal governmental agency which may hereafter perform its functions.
-16-
"Securities Laws" shall have the meaning given to that term in subsection
----------
5.25.
- ----
"Security Agreements" shall mean the First Amended and Restated Security
Agreements - All Property, each dated as of the Closing Date, by and between the
Borrower or the applicable Subsidiary and the Agent, which are to be executed
and delivered in accordance with the provisions of subsection 4.8 below, as the
--------------
same may be further amended, reaffirmed, modified, supplemented, restated or
extended from time to time, and any and all other security agreements which may
in the future be required to be executed and delivered by the Borrower or any
Subsidiary in favor of the Agent, in compliance with the provisions of
subsection 3.1(a) below.
- -----------------
"Special Events" shall have the meaning given to that term in subsection
----------
4.5(c).
- ------
"Special Texas Corporations" shall mean (a) Convention Beverages, Inc., a
Texas corporation, (b) Fine Host of Texas, Inc., a Texas corporation, and (c)
each other company incorporated under the laws of the State of Texas in which
the Borrower enters into an arrangement, on terms reasonably satisfactory to the
Agent, for substantially the same purpose that it has entered into Texas
Management Agreements with the corporations referred to in clauses (a) and (b)
----------- ---
of this definition.
"Standard & Poor's" means Standard & Poor's Corporation or any other entity
succeeding to any or all of its functions.
"Stock" shall mean the capital stock of the Borrower and warrants, options,
or other rights to purchase or acquire the capital stock of the Borrower.
"Stock Pledge Agreements" shall mean , the First Amended and Restated Stock
Pledge Agreement, dated as of the Closing Date, by and between the Borrower and
the Agent, which is to be executed and delivered in accordance with the
provisions of subsection 4.8 below, as the same may be further amended,
--------------
reaffirmed, modified, supplemented, restated or extended from time to time, and
any and all other stock pledge agreements which may in the future be required to
be executed and delivered by the Borrower or any Subsidiary in favor of the
Agent, in compliance with the provisions of subsection 3.1(e) below.
-----------------
"Subordinated Debt" shall mean liabilities, if any, of the Borrower or any
of its Subsidiaries which are subordinated to the Liabilities upon such terms
and conditions as are satisfactory to the Designated Banks in their sole
discretion, including but not limited to the Indebtedness under the CFM Notes,
the Northwest Acquisition Indebtedness and the SWSI Acquisition Indebtedness,
which the Banks hereby acknowledge are upon terms and conditions satisfactory to
the Banks.
"Subordinated Debt Documents" shall mean all documents evidencing,
securing, or related to the Subordinated Debt.
-17-
"Subsidiary" shall mean, at any time, any corporation of which at least 50
percent of the issued and outstanding capital stock having ordinary voting power
to elect a majority of the board of directors or other governing body of such
corporation (irrespective of whether at the time stock of any other 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, directly or indirectly, owned
by the Borrower or any of its Subsidiaries, or any partnership or joint venture
of which more than fifty percent (50%) of the outstanding equity interests is at
the time, directly or indirectly, owned by the Borrower or any of its
Subsidiaries, including without limitation, each of the Orange County Joint
Venture and the Oregon Joint Venture.
"Subsidiary Stock" shall mean the capital stock of each of the Subsidiaries
and warrants, options, or other rights to purchase or acquire the capital stock
of each of the Subsidiaries.
"SWSI Acquisition Indebtedness" means (i) the Indebtedness of the Borrower
to William S. Smitherman and Joann McBride Smitherman in the original principal
amount of One Million Three Hundred Fifty Thousand and 00/100 Dollars
($1,350,000.00), and (ii) the Indebtedness of the Borrower to Edward G. Enos in
the original principal amount of Six Hundred Thirty-Seven Thousand Five Hundred
and 00/100 Dollars ($637,500.00).
"Tangible Capital Base" shall mean Net Worth, plus Subordinated Debt, less
intangibles (including without limitation, all contract rights other than those
contract rights which any of the clients or customers of the Borrower or its
Subsidiaries are obligated to repurchase upon the terms and conditions of any
applicable Facility Agreements) calculated in accordance with GAAP.
"Tax Code" shall mean the Internal Revenue Code of 1986, as amended, and
any successor statute of similar import, and rules and regulations thereunder,
in each case as in effect from time to time. References to sections of the Tax
Code shall be construed to refer to any successor sections as well.
"Termination Date" shall have the meaning set forth in subsection 2.8
--------------
hereof.
"Texas Management Agreements" shall mean, collectively, the Management
Services Agreement, dated May 20, 1992, between Convention Beverages, Inc. and
the Borrower and the Management Services Agreement, dated January 31, 1991,
between Fine Host of Texas, Inc. and the Borrower, and each other management
services agreement, reasonably satisfactory to the Designated Banks, entered
into with any corporation referred to in clause (c) of the definition of Special
Texas Corporations, as each of such agreements may be amended, modified,
supplemented, restated or extended from time to time.
"Unlimited Guaranties" shall mean the First Amended and Restated Unlimited
Guaranties, each dated as of the Closing Date, from each of the Subsidiaries
(other than the Orange County Joint Venture and the Oregon Joint Venture) in
favor of the Banks, which are
-18-
to be executed and delivered in accordance with the provisions of subsection 4.8
--------------
below, as the same may be further amended, reaffirmed, modified, supplemented,
restated or extended from time to time, and any and all other unlimited
guaranties which may in the future be required to be executed and delivered by
any Subsidiary (other than the Orange County Joint Venture and the Oregon Joint
Venture) in favor of the Banks, in compliance with the provisions of subsection
----------
3.1(c) below.
- ------
"Vehicles" shall mean any of the Borrower's rolling stock, motor vehicles
or other movable goods required by applicable Law in any jurisdiction where the
Borrower does business to be registered or titled.
"VGE" shall mean VGE Acquisition Corporation, an Ohio corporation.
"Working Capital Line" shall mean the credit facility which the Banks
extend to the Borrower under subsection 2.1.
---------------
"Working Capital Loans" shall mean at any time, the aggregate principal
amount, at such time, of the outstanding advances of the Banks to the Borrower
under subsection 2.1.
---------------
"Working Capital Notes" shall mean the Commercial Promissory Notes
evidencing the Working Capital Loans, which are to be executed and delivered by
the Borrower pursuant to the provisions of subsection 2.1 below, as the same may
--------------
be amended, modified, supplemented, restated or extended from time to time.
1.2 Accounting Terms. Any accounting terms used in this Agreement which
----------------
are not specifically defined herein shall have the meanings customarily given
to such terms in accordance with GAAP.
1.3 Other Terms Defined in the Uniform Commercial Code. All terms
--------------------------------------------------
contained in this Agreement (and which are not otherwise specifically defined
herein) shall have the meanings provided by the Code to the extent the same are
used or defined therein.
1.4 Construction. Unless the context of this Agreement otherwise clearly
------------
requires, references to the plural include the singular, references to the
singular include the plural, the term "including" is not limiting, and the term
"or" has the inclusive meaning represented by the phrase "and/or". The terms
"hereof," "herein," "hereunder" and similar terms in this Agreement refer to
this Agreement as a whole and not to any particular provision of this Agreement.
Section, subsection, clause, exhibit and schedule references are to this
Agreement unless otherwise specified.
2. LOANS.
-----
2.1 Working Capital Loans.
---------------------
-19-
(a) Subject to the terms and conditions hereof and in reliance upon the
representations and warranties of the Borrower and its Subsidiaries to the
Banks, the Banks hereby establish a line of credit facility in favor of the
Borrower in the maximum principal amount of Twenty Million and 00/100 Dollars
($20,000,000.00) (the "Working Capital Line"). Each Loan made under the Working
Capital Line (other than use of such line for one or more Letters of Credit as
provided herein) shall be referred to as a "Working Capital Loan". Prior to the
Termination Date, upon the Borrower's request made in the manner set forth in
subsection 4.1 and subject to the terms and conditions of Section 4, the Banks
- -------------- ----------
will make Working Capital Loans to the Borrower in such amounts as may be
requested by the Borrower, up to a total outstanding principal indebtedness
under such Working Capital Loans (and any Letters of Credit issued pursuant to
this subsection 2.1(a)) at any time of Twenty Million and 00/100 Dollars
-----------------
($20,000,000.00). In addition, provided (i) there is no Default or Event of
Default hereunder, (ii) the amount outstanding under the Working Capital Line is
less than Twenty Million Dollars ($20,000,000.00), and (iii) the Borrower is in
compliance with the requirements of Section 4 (and, with respect to the
---------
requested Letter of Credit, subsection 2.3), then the Borrower may request and
--------------
UST shall issue one or more Letters of Credit in compliance with subsection 2.3
--------------
and Section 4, in an aggregate amount for all such Letters of Credit not to
---------
exceed at any time the lesser of (x) Five Million and 00/100 Dollars
($5,000,000.00) and (y) the difference between the outstanding principal
indebtedness under the Working Capital Loans and Twenty Million and 00/100
Dollars ($20,000,000.00).
(b) Prior to the Termination Date, the Borrower may pay or prepay without
penalty or premium all or any portion of the Working Capital Loans made from
time to time hereunder, and subject to the terms and conditions herein provided,
may reborrow the amounts so paid or prepaid as provided in subsection 2.1(a).
-----------------
The Borrower agrees that if at any time the sum of the outstanding principal
amount of all Working Capital Loans and Letters of Credit issued pursuant to
subsection 2.1(a) shall exceed at any time the Working Capital Line, the
- -----------------
Borrower shall immediately pay the Agent for the benefit of the Banks such
amount as is necessary to eliminate such excess.
(c) The Working Capital Loans made to the Borrower by the Banks shall be
evidenced by six (6) Working Capital Notes (substantially in the form attached
hereto as Exhibit A), three of which are each in the principal amount of Four
---------
Million and 00/100 Dollars ($4,000,000.00) and made payable to UST, Sumitomo and
SSB, respectively and three of which are each in the principal amount of Two
Million Six Hundred Sixty-Six Thousand Six Hundred Sixty-Six and 66/100 Dollars
($2,666,666.66) and made payable to BBC, Mellon and BNY, respectively. The
outstanding principal, and all accrued and unpaid interest and other charges
thereon or incurred in respect thereof, shall be due and payable upon the
Termination Date. Each Working Capital Note shall bear interest (computed on
the basis of the actual number of days elapsed over a 360-day year) on the
unpaid principal amount thereof at a rate selected by the Borrower and equal (i)
to LIBOR for 30, 90 or 180 days plus two percent (2.00%) or (ii) to the Base
Lending Rate, all as specified in each Working Capital Note. Subject to the
terms and conditions contained in the Working Capital Notes, the Borrower shall
designate, from time to time, the portions of outstanding principal
-20-
of the Working Capital Loans which will accrue interest at LIBOR, and all other
principal under the Working Capital Loans not so designated shall accrue
interest at the Base Lending Rate. Interest on all Working Capital Loans
evidenced by the Working Capital Notes shall be payable monthly in arrears, as
provided in the Working Capital Notes.
(d) The Agent may, at its sole discretion, directly charge the Working
Capital Line for any fees owed to the Banks pursuant to this Agreement, or any
past due interest payments (after any applicable grace periods) owed to the
Banks pursuant to this Agreement, with notice to the Borrower at the time of
such charge. Provided there then exists no Event of Default, prior to directly
charging the Working Capital Line, the Agent shall give the Borrower not less
than fifteen (15) days prior notice of any fees due to the Banks and payable by
the Borrower as a result of services of any Person other than the Banks or their
direct employees.
(e) The proceeds of the Working Capital Loans shall be used solely for the
general corporate purposes of the Borrower and its Subsidiaries in the ordinary
course of their business (which shall include the reimbursement of any Letter of
Credit Loan) and for Letters of Credit issued pursuant to subsection 2.1(a), but
-----------------
in no event shall such proceeds be used for the payment of any of the following:
(i) The payment of principal on any loan (other than a Letter of
Credit Loan hereunder), whether to the Banks or any other Person;
(ii) For Project Costs funded by the proceeds of a Guidance Loan; or
(iii) Distributions or payments which are prohibited or restricted
(including payments which require the Banks to authorize such payments and
which have not been authorized) under the terms of this Agreement.
2.2 Guidance Loans.
--------------
(a) Subject to the terms and conditions hereof and in reliance upon the
representations and warranties of the Borrower and its Subsidiaries to the
Banks, the Banks hereby establish a guidance line of credit facility in favor of
the Borrower in the maximum principal amount of Fifty Five Million and 00/100
Dollars ($55,000,000.00) (the 'Guidance Line of Credit'). Each Loan made under
the Guidance Line of Credit shall be referred to as a "Guidance Loan". Prior to
the Termination Date, upon the Borrower's request made in the manner set forth
in subsection 4.5 and subject to the terms and conditions of Section 4, the
-------------- ----------
Banks will make Guidance Loans to the Borrower in such amounts as may be
requested by the Borrower, up to a total outstanding principal indebtedness
under such Guidance Loans at any time of not more than the maximum principal
amount of the Guidance Line of Credit.
(b) Prior to the Termination Date, the Borrower may pay or prepay without
penalty or premium all or any portion of the Guidance Loans made from time to
time
-21-
hereunder, and subject to the terms and conditions herein provided, may reborrow
the amounts so paid or prepaid. The Borrower agrees that if at any time the sum
of the outstanding principal amount of all the Guidance Loans shall exceed at
any time the Guidance Line of Credit, the Borrower shall immediately pay the
Agent for the benefit of the Banks such amount as is necessary to eliminate such
excess. In addition, Guidance Loans shall be prepaid in accordance with the
terms of subsections 6.8 and 6.16 of this Agreement.
--------------- ----
(c) The Guidance Loans made to the Borrower by the Banks shall be
evidenced by six (6) Guidance Notes (substantially in the form attached hereto
as Exhibit B), three of which are each in the principal amount of Eleven Million
---------
and 00/100 Dollars ($11,000,000.00) and made payable to UST, Sumitomo and SSB,
respectively and three of which are each in the principal amount of Seven
Million Three Hundred Thirty-Three Thousand Three Hundred Thirty-Three and
33/100 Dollars ($7,333,333.33) and made payable to BBC, Mellon and BNY,
respectively. Up to and including the Guidance Line Conversion Date, interest on
the Guidance Loans (computed on the basis of the actual number of days elapsed
over a 360-day year) shall accrue on the unpaid principal amount thereof at a
rate equal to the Base Lending Rate in effect from time to time plus one-half
percent (0.5%). Until the Guidance Line Conversion Date, no principal shall be
due and payable on the Guidance Loans; Interest accruing on the Guidance Loans
shall be due and payable monthly, in arrears, as provided in each Guidance Note.
(d) Except as otherwise agreed to by all of the Banks, on each and every
Guidance Line Conversion Date, the aggregate principal amount of all Guidance
Loans outstanding on any such date (each a "Converted Amount") may no longer be
reborrowed under the Guidance Line of Credit and the Guidance Line of Credit
shall thereupon be reduced by such Converted Amount. From and after any such
date, the then outstanding principal amount of each of the Guidance Notes
evidencing such Converted Amount shall be payable in equal monthly installments
commencing on the first date of each month succeeding any such date based on a
loan with a term of sixty (60) months; together with interest (computed on the
basis of the actual number of days elapsed over a 360-day year) on the unpaid
principal amount thereof at a rate selected by the Borrower equal (i) to the
Base Lending Rate in effect from time to time plus one-half percent (0.5%) or
(ii) to LIBOR for 30, 90 or 180 days plus two and one-half percent (2.5%) all as
provided in each Guidance Note. All unpaid principal of each Guidance Note,
together with all accrued and unpaid interest thereon and all other charges
thereon or incurred in respect thereof shall be due and payable upon the
maturity date provided in such Guidance Note; provided however that the entire
-------- -------
principal balance of each Guidance Note, together with all accrued and unpaid
interest thereon and all other charges thereon and in respect thereof will be
due and payable on such earlier date, if any, upon which the Liabilities are
accelerated as provided in subsection 8.2.
--------------
(e) The proceeds of any Guidance Loan shall be used solely for the payment
of Project Costs required by a New Project or Contract Extension (as such terms
are defined in subsection 4.5 below), and which Project Costs shall be presented
--------------
and shown on the proposal
-22-
given to the Agent in accordance with subsection 4.5, but in no event shall such
--------------
Proceeds be used for the payment of any of the following:
(i) The payment of principal, interest, or charges on any loan,
whether to the Banks or any other Person;
(ii) For payment of Working Capital Loans or Letter of Credit Loans;
or
(iii) Distributions or payments which are prohibited or restricted
(including payments which require the Banks to authorize such payments and
which have not been authorized) under the terms of this Agreement.
2.3 Letters of Credit Under Working Capital Line.
--------------------------------------------
(a) Subject to the terms and conditions hereof (including without
limitation the terms and conditions of subsection 2.1(a)) and in reliance upon
-----------------
the representations and warranties of the Borrower and its Subsidiaries to the
Banks, the Banks have agreed, as part of the Working Capital Line, to issue
either performance standby Letters of Credit or financial standby Letters of
Credit, in the maximum aggregate amount of Five Million Dollars ($5,000,000.00)
(the "Letter of Credit Line"). Each letter of credit issued under the Letter of
Credit Line pursuant to subsection 2.1(a) shall be referred to as a "Letter of
-----------------
Credit", and the issuance of any such Letter of Credit shall be a "Letter of
Credit Loan". Prior to the Termination Date, upon the request of the Borrower
(and if applicable, any Subsidiary) made in the manner set forth in, and subject
to the terms and conditions of, Section 4, UST, on behalf of the Banks, will
---------
issue its Letters of Credit on behalf of the Borrower or a Subsidiary as account
party for Persons named by the Borrower, in such amounts as may be requested by
the Borrower, so long as the total of (a) the undrawn amount of all outstanding
Letters of Credit is equal to or less than the maximum limit specified in
subsection 2.1(a).
- -----------------
(b) The amount of any draw on any Letter of Credit shall be due and
payable by Borrower to the Agent one Business Day after the Agent gives
telephonic or written notice of such draw to Borrower, and shall bear interest
from the date of such draw until the date which is one Business Day after the
date of such notice at the rate then selected by the Borrower as provided in the
Working Capital Notes, and thereafter at the default rate as set forth in the
Working Capital Notes.
(c) Any Letter of Credit issued by UST shall contain such terms and
conditions for draws thereon as UST, in its reasonable discretion, determines
are required given the circumstances and agreements associated with and related
to the issuance of such Letter of Credit, including without limitation the terms
and conditions contained in UST's standard Application for Commercial Letter of
Credit and Agreement, in the form attached hereto as Exhibit C or in any form
---------
adopted by UST in replacement or modification thereof subsequent to the date
hereof.
-23-
(d) The Borrower shall pay to the Agent, on the date of issuance of any
Letter of Credit, and on each annual anniversary of such issuance date if such
Letter of Credit is outstanding on such anniversary date, a fee of one and
one-half of one percent (1.5%) per annum multiplied by the stated outstanding
amount of the Letter of Credit (for the period outstanding) if such Letter of
Credit is issued as a performance standby Letter of Credit, or a fee of two and
one-quarter of one percent (2.25%) per annum multiplied by the stated amount
outstanding of the Letter of Credit (for the period outstanding) if such Letter
of Credit is issued as a financial standby Letter of Credit, as determined in
accordance with applicable banking regulations and based upon a 360-day year.
Each such fee shall be distributed by the Agent one-eighth of one percent
(.125%) to the Agent, with the balance of such fee to be distributed pro rata to
--- ----
the Banks (including UST). The fees required under this subsection 2.3(d) shall
-----------------
be in addition to the any other fees required under this Agreement or any of the
other Loan Documents.
(e) Each Letter of Credit shall specify a termination date, which date
shall be no later than May 31, 1999. The parties hereto acknowledge and agree
that UST has already issued the following Letters of Credit under the Letter of
Credit Line:
(i) a certain irrevocable Letter of Credit No. 5151 originally dated
as of April 29, 1993 for the account of the Borrower, for the benefit of
Barnett Bank of South Florida, N.A, which was subsequently reissued by UST
on February 15, 1996, and which is currently outstanding in the amount of
Five Hundred Thousand and 00/100 Dollars ($500,000.00), and has an expiry
date of February 15, 1997; and
(ii) a certain irrevocable Letter of Credit No. 5527 dated as of March
1, 1996, for the account of the Borrower, for the benefit of United States
Fidelity and Guaranty, and which is currently outstanding in the amount of
One Million and 00/100 Dollars ($1,000,000.00), and has an expiry date of
June 17, 1997.
(f) The proceeds of draws on any Letter of Credit shall not be used,
directly or indirectly, for any of the following purposes:
(i) The payment of principal, interest, or charges on any loan,
whether to the Banks or any other Person;
(ii) For payment of the Working Capital Loans or the Guidance Loans;
or
(iii) Distributions or payments which are prohibited or restricted
(including payments which require the Banks to authorize such payments)
under the terms of this Agreement.
(g) If required by a proposed beneficiary of a Letter of Credit, UST shall
provide security arrangements reasonably satisfactory to such proposed
beneficiary to support such Letter of Credit.
-24-
2.4 Borrower's Loan Account. The Agent shall maintain a Loan Account for
-----------------------
the Borrower on its books in which shall be recorded (a) all Loans made by the
Agent to or for the Borrower pursuant to this Agreement or any of the other Loan
Documents, (b) all payments made by the Borrower on all such Loans and (c) all
other appropriate debits and credits as provided in this Agreement or any of the
other Loan Documents, including without limitation, all fees, charges, expenses
and interest. At the discretion of the Agent, the Borrower's Loan Account may
be segregated and accounted for on the basis of each Note, each Loan, or in
aggregate for all Loans. All entries in the Borrower's Loan Account shall be
made in accordance with the Agent's customary accounting practices as in effect
from time to time, and the debit balance reflected in the Loan Account shall be
rebuttably presumptive evidence of the amount owed to the Banks by the Borrower.
The Borrower promises to pay all of its obligations hereunder as such amounts
become due or are declared due pursuant to the terms of this Agreement.
2.5 Statements. All Loans made to the Borrower, and all other debits and
----------
credits provided for in this Agreement, shall be evidenced by entries made by
the Agent in its internal data control systems showing the date, amount and
reason for each such debit or credit. Until such time as the Agent shall have
rendered to the Borrower written statements of account as provided herein, the
balance in the Borrower's Loan Account, as set forth on the Agent's most recent
printout, shall be rebuttably presumptive evidence of the amounts due and owing
to the Banks by the Borrower. The Agent shall render to the Borrower a monthly
statement setting forth the balance of the Borrower's Loan Account, including
principal, interest, expenses and fees. Each such statement shall be subject to
subsequent adjustment by the Agent but shall, absent manifest errors or
omissions, be presumed correct and binding upon the Borrower.
2.6 Fees. The Borrower shall pay to the Agent at Closing a Facility
----
Fee in the amount of Three Hundred Seventy Five Thousand and 00/100 Dollars
($375,000.00), to be distributed by the Agent pro rata to the Banks. On the
--- ----
last day of each calendar quarter commencing June 30, 1996 to and including the
Termination Date, the Agent shall charge the Borrower an unused commitment fee
computed at the annual rate of one-quarter of one percent (0.25%) of the monthly
weighted average of the then available and unborrowed Working Capital Line and
of the then available and unborrowed Guidance Line of Credit in such calendar
quarter.
2.7 Method of Making Payments.
-------------------------
(a) Unless otherwise agreed in writing from time to time hereafter,
all payments which the Borrower is required to make to the Agent under this
Agreement or under any of the other Loan Documents shall be made in
immediately available Dollars not later than 12:00 p.m. local time in
Boston, Massachusetts on the date of payment at the Agent's office at 30
Court Street, Boston, Massachusetts 02108, or at such other place as the
Agent directs from time to time, or, in Agent's sole and absolute
discretion, by appropriate debits to the Loan Account. Payments received
by
-25-
the Agent after 12:00 p.m. (Boston time) shall be deemed to have been made
on the next succeeding Business Day.
(b) All payments made by the Borrower in connection with this
Agreement or any of the other Loan Documents shall be made free and clear
of, and without reduction for or on account of, any present or future stamp
or other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, together with any interest, penalties, or additions thereto,
now or hereafter imposed, levied, collected, withheld, or assessed by any
governmental entity. If, however, any such items are required by Law to be
deducted or withheld from any such payments to the Banks, the amount of
such payments shall be increased to the extent necessary in order that the
amount of such payment to the Banks (after payment of the applicable item)
shall equal the amount which would have been received by the Banks in the
absence of such item, or any such other amounts payable.
2.8 Term of this Agreement. The commitments of the Banks to make the
----------------------
Loans and of UST to issue Letters of Credit hereunder shall commence on the
Closing Date and continue through the earliest of (a) May 31, 1999, (b) the date
of acceleration of any of the Liabilities under subsection 8.2, and (c) the date
--------------
on which Borrower gives notice to the Banks of its desire to terminate the
obligations of the Banks to make Loans and of UST to issue Letters of Credit
under this Agreement (which notice shall only be effective if all Liabilities
have been paid in full, there are no outstanding Letters of Credit) and, in the
event that such termination occurs as a result of the sale of the Borrower's
business or a refinancing of the Loans from outside sources of funding (the
earliest of such dates is hereinafter referred to as the "Termination Date"),
each Bank shall have received its pro rata share of a cancellation fee (the
--- ----
"Cancellation Fee") equal to, for the applicable period set forth below, that
corresponding percentage set forth below of the total Loans committed to be made
hereunder:
Period Elapsed
from the Date hereof Percentage on which
to Termination Date Cancellation Fee is based
------------------- -------------------------
less than 12 months 3.5%
12 to 24 months 2.5%
more than 24 months 0.5%;
provided that all of the Agent's and the Banks' rights and remedies under this
- --------
Agreement and under any of the other Loan Documents (including all security
interests and guaranties created thereunder), shall survive the Termination Date
until all of the Liabilities have been paid in full. From and after the
Termination Date until all of the Liabilities shall have been fully paid and
satisfied, the Agent shall be entitled to retain its security interests in and
to all existing and future Collateral. Any provision of this Agreement to the
contrary notwithstanding, this Agreement shall continue to be effective or be
reinstated, as the case may be, if at any time any amount received by the Agent
or any Bank in respect of the Loans is rescinded or must otherwise be
-26-
restored or returned by the Agent or by any Bank upon the Insolvency of the
Borrower or any of its Subsidiaries, all as though such payments had not been
made.
2.9 Limitation on Charges. It being the intent of the parties that the
---------------------
rate of interest and all other charges to the Borrower be lawful, if for any
reason the payment of a portion of the interest or other charges otherwise
required to be paid under this Agreement would exceed the limit which the Banks
may lawfully charge the Borrower, then the obligation to pay interest or other
charges by the Borrower shall automatically be reduced to such limit, and if any
amounts in excess of such limit shall have been paid, then such amounts shall be
applied to the outstanding Loans as a principal reduction, first to the Working
Capital Loans (including the Letter of Credit Loans) and, then to the Guidance
Loans, so that under no circumstances shall the interest or other charges
required to be paid by the Borrower hereunder exceed the maximum rate allowed by
Law.
2.10 Capital Adequacy Provisions. The Borrower shall pay directly to each
---------------------------
Bank from time to time on request such amounts as such Bank may reasonably
determine to be necessary to compensate such Bank (or, without duplication, the
bank holding company of which such Bank is a subsidiary) for any costs that it
reasonably determines are attributable to the maintenance by such Bank (or any
such bank holding company), pursuant to any law or regulation or any
interpretation, directive or request (whether or not having the force of law and
whether or not failure to comply therewith would be unlawful) of any court or
governmental or monetary authority ((i) following any Regulatory Change or (ii)
implementing any risk-based capital guideline or other requirement (whether or
not having the force of law and whether or not the failure to comply therewith
would be unlawful) heretofore or hereafter issued by any government or
governmental or supervisory authority implementing at the national level the
Basel Accord (including, without limitation, the Final Risk-Based Capital
Guidelines of the Board of Governors of the Federal Reserve System (12 C.F.R.
Part 208, Appendix A; 12 C.F.R. Part 225, Appendix A), and the Final Risk-Based
Capital Guidelines of the Office of the Comptroller of the Currency (12 C.F.R.
Part 3, Appendix A)), of capital in respect of its commitments or loans (such
compensation to include, without limitation, an amount equal to any reduction of
the rate of return on assets or equity of such Bank (or any such bank holding
company) to a level below that which such Bank (or any such bank holding
company) could have achieved but for such law, regulation, interpretation,
directive or request). For purposes of this subsection 2.11 and Exhibit C,
--------------- ---------
"Basel Accord" shall mean the proposals for risk-based capital framework
described by the Basel Committee on Banking Regulations and Supervisory
Practices in its paper entitled "International Convergence of Capital
Measurement and Capital Standards" dated July 1988, as amended, modified and
supplemented and in effect from time to time, or any replacement thereof.
2.11 Additional Collateral Following Termination. At any time that the
--------------------------------------------
Working Capital Line is terminated pursuant to subsection 8.2 or otherwise, the
--------------
Borrower shall furnish the Agent, for deposit in a cash collateral account
maintained at the Agent for the ratable benefit of the Banks, adequate cash
reserves for the benefit of the Banks on the Termination Date in the amount of
any Letters of Credit then outstanding which have an expiration date which
extends
-27-
beyond the Termination Date, or the Borrower must otherwise provide for a
financial institution acceptable to the Banks to (x) issue a letter of credit in
form and substance satisfactory to the Banks, naming the Banks as "beneficiary"
therein, or, at the option of the Banks, (y) otherwise indemnify the Banks
against loss in connection with outstanding Letters of Credit, pursuant to
indemnification documentation in form and substance satisfactory to the Banks.
3. SECURITY FOR THE LIABILITIES; GUARANTIES.
----------------------------------------
3.1 Security. The Notes, the Liabilities and any other obligations of the
--------
Borrower to the Banks hereunder or under any of the Loan Documents shall be
secured by and entitled to the benefits of the following:
(a) a first priority security interest in all of the right, title,
and interest of the Borrower and its Subsidiaries in all tangible and
intangible personal property and fixtures of the Borrower and its
Subsidiaries pursuant to the Security Agreements signed by each of them.
(b) an Assignment of Receivables and Proceeds from the Borrower and
each of its Subsidiaries, assigning to the Agent as Collateral all right,
title, and interest of the Borrower and its Subsidiaries in and to the
proceeds from certain agreements relating to its business (including but
not limited to all rights for payment and collection of moneys, both in the
normal and ordinary course and as a result of breach or termination of any
Facility Agreement) except that the Assignment shall be an absolute and
unconditional assignment to the Agent (and not for security purposes only)
of all prepayments made on Notes Receivable and Net Contract Proceeds
financed by Guidance Loans (up to the total outstanding principal amount of
such Guidance Loans);
(c) an Unlimited Guaranty of payment and performance by each of the
Subsidiaries (other than the Orange County Joint Venture and the Oregon
Joint Venture);
(d) a Limited Guaranty of each of the Limited Guarantors (including
without limitation, the Orange County Joint Venture and the Oregon Joint
Venture);
(e) a Stock Pledge Agreement from the Borrower (and any Subsidiary
that owns any Subsidiary Stock) pledging all of the Subsidiary Stock;
(f) a Joint Venture Pledge Agreement from the Borrower (and any
Subsidiary that owns any Joint Venture Interest) pledging all of the Joint
Venture Interests; and
(g) a LLC Pledge Agreement from the Borrower (and any Subsidiary that
owns any Membership Interest) pledging all of the Membership Interests.
Subject to the terms of the applicable Loan Document with respect to the
rights granted thereunder as to specific Collateral, the Borrower agrees to take
such actions as may be
-28-
necessary from time to time to cause the Agent, on behalf of the Banks, to be
secured by and entitled to the benefits of the Loan Documents described in this
subsection, including without limitation, obtaining consents of any third
parties. Each of the Loan Documents described in this subsection shall be
satisfactory in form and substance to the Banks and their respective counsel.
3.2 Chattel Paper Instruments. Promptly after receipt thereof by the
-------------------------
Borrower, the Borrower shall deliver or cause to be delivered to the Agent with
appropriate endorsement and assignment to the Agent, with full recourse to the
Borrower, and possession in the Agent for security purposes only, all chattel
paper and instruments which the Borrower now owns or may at any time or times
hereafter acquire.
3.3 Vehicles. Upon the request of the Agent or the Designated Banks, the
--------
Borrower will promptly deliver to the Agent the original title certificates for
all titled or registered motor vehicles or rolling stock now owned or hereafter
acquired by the Borrower. The Borrower agrees to take all steps necessary to
keep all of its vehicles and rolling stock titled and adequately insured in its
state of registration. The Borrower will promptly notify the Agent of any
additions to its vehicles or rolling stock. Upon the request of the Agent, the
Borrower will execute such agreements and documents as are necessary to reflect
the Agent's Liens on such vehicles and rolling stock.
3.4 Equipment. With respect to all Equipment of the Borrower, the
---------
Borrower and each Subsidiary warrants that (a) except as disclosed on Schedule
--------
3.4, as supplemented from time to time by an Acceptable Supplement, it is owned
- ---
by the Borrower or a Subsidiary, is located on one of the premises listed on
Schedule 3.4, as so supplemented, or, in the case of any vehicles or rolling
- ------------
stock, is based at one of the premises listed on Schedule 3.4, as so
-------------
supplemented, and that the Borrower or such Subsidiary has the right to subject
the same to a Lien in favor of the Agent; (b) it is not subject to any Lien
except that of the Agent hereunder and except as specifically permitted
hereunder; and (c) as of the date of execution hereof, it is in good condition
and repair and is currently used or usable in the Borrower's or such
Subsidiary's business, and thereafter, if and to the extent not in good
condition and repair, shall be repaired, replaced, or sold (consistent with the
terms of this Agreement) as required under the applicable Facility Agreements.
3.5 Equipment Records. The Borrower and each Subsidiary shall at all
-----------------
times hereafter keep correct and accurate records itemizing and describing the
kind, type, age and condition of all Equipment, the Borrower's or such
Subsidiary's cost therefor and accumulated depreciation thereon; and
retirements, sales, or other dispositions thereof, all of which records shall be
available during the Borrower's usual business hours at the request of the
Agent.
3.6 Safekeeping of Equipment. Except as required by the Code, the Agent
------------------------
and the Banks shall not be responsible for: (a) the safekeeping of the
Equipment; (b) any loss or damage to such Equipment; (c) any diminution in the
value of such Equipment; or (d) any act or default of any repairmen, bailee or
any other Person with respect to such Equipment. All risk of loss,
-29-
damage, destruction or diminution in value of such Equipment shall be borne by
the Borrower and its Subsidiaries.
3.7 Maintenance of Properties. The Borrower and its Subsidiaries shall
-------------------------
maintain or cause to be maintained in good repair, working order and condition,
ordinary wear and tear excepted, the properties now or hereafter owned, leased,
or otherwise possessed by it and shall make or cause to be made all needful and
proper repairs, renewals, replacements and improvements thereto, except to the
extent that the failure to maintain such properties could not have a Material
Adverse Effect on the Borrower and its Subsidiaries.
4. CONDITIONS OF ADVANCES
----------------------
Any other provisions contained in this Agreement notwithstanding, the
making of any Loan provided for in this Agreement (which shall include the
issuance of any Letter of Credit) shall be conditioned upon the following:
4.1 Borrower's Request. The Agent shall have received, by at least
------------------
eleven o'clock (11:00 a.m.) (New York City time) in Boston, Massachusetts, on
the Business Day on which an advance is requested to be made hereunder in the
case of a Working Capital Loan (except as otherwise provided in the applicable
LIBOR provisions, if any, contained in the Notes) or the issuance of a Letter of
Credit, and three Business Days prior to the day on which an advance is
requested to be made hereunder in the case of a Guidance Loan (except as
otherwise provided in the applicable LIBOR provisions, if any, contained in the
Notes), (a) a telephonic request or written request from any Person authorized
by the Borrower pursuant to a written list provided to the Agent, for an advance
in a specific amount, and (b) all documents not previously delivered and
required to be delivered to the Agent, at or prior to the time of such advance,
under this Agreement or any of the other Loan Documents. The Agent shall not be
liable to the Borrower or any other Person as the result of acting on any
telephonic request which the Agent believes in good faith to have been made by
any Person authorized by the Borrower pursuant to such written list.
4.2 Financial Condition. No Material Adverse Change in the Borrower and
-------------------
its Subsidiaries shall have occurred at any time or times subsequent to the most
recent Financial Statements provided pursuant to this Agreement.
4.3 No Event of Default. After giving effect to the requested Loan or the
-------------------
issuance of the requested Letter of Credit, neither a Default nor an Event of
Default shall have occurred and be continuing.
4.4 Representations and Warranties. The representations and warranties
------------------------------
contained herein and in each of the other Loan Documents shall be true and
correct as if made on and as of the date of such Loan, as modified by any
supplemental Schedules filed by Borrower or any of its Subsidiaries from time to
time, provided that any Financial Statements shall relate only to the date or
dates as of which information is presented therein and, with respect to other
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information, if and to the extent it relates to an earlier date, then it shall
be true and correct as of that earlier date.
4.5 Additional Conditions for Approval of Guidance Loan.
---------------------------------------------------
(a) With respect to requests for a Guidance Loan, the Borrower shall
have submitted to the Agent (and with respect to a Guidance Loan for which
the Banks' prior approval is required pursuant to subsection 4.5(e), the
-----------------
Banks shall have approved in writing in their discretion) a proposal for
the financing of a Facility Agreement for: (i) (A) a facility not
theretofore serviced by the Borrower or any of its Subsidiaries, (B) a
one-time-only special event at any facility which shall not be included
within the scope of a Facility Agreement existing as of the date of this
Agreement, (C) a material expansion of size of a facility or scope of
service under a Facility Agreement, or (D) the acquisition of concession,
license, management or other food and beverage service agreements from a
Person, directly, or indirectly, through the purchase of stock or assets of
a Person (each, a "New Project"), or (ii) the extension of any Facility
Agreement then being serviced by the Borrower or any of its Subsidiaries (a
"Contract Extension"). Any existing Facility Agreement which is put out
for bid by the other parties thereto and on which the Borrower, its
Subsidiaries, and any other Persons may bid at the end of its term shall be
considered a New Project rather than a Contract Extension.
(b) Each such proposal for a New Project or a Contract Extension
shall consist of the following: (i) a copy of the Facility Agreement if it
exists, otherwise the proposed form of the Facility Agreement which will be
in effect upon the commencement of the term thereof, if it exists; (ii) a
detailed itemization of the Project Costs of such New Project or Contract
Extension, including a separate itemization of the use of all the proceeds
of such Guidance Loan; (iii) copies of all market studies, pro forma
--- -----
financial statements, and business plans and studies prepared in connection
with such New Project or Contract Extension, as the case may be; (iv) a
separate itemization of Project Costs, prepared by the Borrower and
certified as accurate by Borrower's president or chief financial officer,
identifying the capitalization period for such Project Costs (the
"Capitalization Period"); and (v) such other information as the Agent in
its reasonable discretion may request.
(c) With respect to a New Project: (i) the aggregate principal amount
of the requested Guidance Loan shall (subject to subsection 4.5(e)) not
-----------------
exceed eighty percent (80%) of Project Costs; and (ii) during the
immediately preceding six-month period, the Borrower and its Subsidiaries,
taken as a whole, cannot have entered into more than thirty (30) agreements
for New Projects (not including New Projects involving a one-time only
special events, which shall be referred to herein as "Special Events", or
acquisitions described in subsection 4.5(a)(i)(D)) or Contract Extensions
------------------------
without the consent of the Designated Banks; all references to permitted
numbers of New Projects in this paragraph (c) shall be increased by the
number of facilities as to which a Facility Agreement has terminated during
the applicable period;
-31-
(d) With respect to any Guidance Loan, the Borrower shall be in
compliance with the financial covenants set forth in subsection 6.1 after
--------------
giving effect to the requested Guidance Loan.
(e) The Designated Banks may, in their sole discretion, approve or
disapprove any requested Guidance Loan which would require the Banks to
fund an aggregate of Two Million Five Hundred Thousand and 00/100 Dollars
($2,500,000.00) or more for Project Costs for any New Project or Contract
Extension or acquisitions described in subsection 4.5(a)(i)(D).
-----------------------
Notwithstanding the preceding sentence and subsection 4.5(c)(i), the
--------------------
aggregate principal amount of the requested Guidance Loan shall not exceed
ninety percent (90%) of Project Costs and the approval of the Designated
Banks shall only be required to fund an aggregate of Three Million Five
Hundred Thousand and 00/100 Dollars ($3,500,000.00) or more for Project
Costs for any New Project or Contract Extension or acquisitions described
in subsection 4.5(a)(i)(D) if (i) the total outstanding amount on the
-----------------------
Guidance Line of Credit is less than Twenty Million and 00/100 Dollars
($20,000,000.00) and (ii) the ratio of total Debt to total Operating Cash
Flow (including the amount of the requested Guidance Loan) is less than
2.00 to 1.00 as of the month-end that is not more than sixty (60) calendar
days prior to the time the Guidance Loan is to be funded. If the
requirements of only one of clauses (i) and (ii) of the preceding sentence
are met, then the requested principal amount of the requested Guidance Loan
shall not exceed eighty-five percent (85%) of Project Costs and such
approval of the Designated Banks shall be required for any requested
Guidance Loan which would require the Banks to fund an aggregate of Three
Million and 00/100 Dollars ($3,000,000.00). Notwithstanding any other
provision of this subsection 4.5(e), the approval of the Designated Banks
-----------------
shall be required for any acquisition described in subsection 4.5(a)(i)(D)
-----------------------
with a total valuation (based on stock or asset price and face amount of
issued and assumed debt) of Four Million and 00/100 Dollars ($4,000,000.00)
or more.
4.6 Additional Conditions for Approval of Working Capital Loans. With
-----------------------------------------------------------
respect to any Working Capital Loan, including the issuance of any Letter of
Credit pursuant to subsection 2.1(a), the Borrower shall be in compliance with
-----------------
the financial covenants set forth in subsection 6.1 after giving effect to the
---------------
requested Loan.
4.7 Other Requirements. The Agent shall have received, in form and
------------------
substance reasonably satisfactory to the Agent and its counsel, all
certificates, orders, authorities, consents, affidavits, schedules, instruments,
security agreements, financing statements, mortgages and other documents which
are provided for hereunder or under any of the other Loan Documents, and all
other information relating to the transaction reasonably requested by the Agent.
4.8 Additional Conditions for Making Loans. In addition to the foregoing,
--------------------------------------
the following shall be preconditions for the making of any Loan or the issuance
of any Letter of Credit under this Agreement:
-32-
(a) The Liabilities shall be senior indebtedness of Borrower and its
Subsidiaries for all purposes;
(b) The Borrower shall have paid all costs of the Banks in connection
with the making and closing of the Loans and the issuance of the Letters of
Credit, including but not limited to the fees and expenses of the Banks'
counsel and as set forth in subsection 6.6;
--------------
(c) The Borrower and each of its Subsidiaries shall have received all
Approvals and the same shall continue to be in full force and effect as of
the Closing Date;
(d) On or before the Closing Date, the Borrower and each of its
Subsidiaries (other than the Orange County Joint Venture and the Oregon
Joint Venture) shall have executed and delivered to the Agent the
following:
(i) First Amended and Restated Unlimited Guaranty, substantially
in the form attached hereto as Exhibit D;
---------
(ii) First Amendment and Restated Security Agreement - All
Assets, substantially in the form attached hereto as Exhibit E; and
---------
(iii) First Amended and Restated Assignment of Receivables
and
Proceeds, substantially in the form attached hereto as Exhibit F;
---------
(e) On or before the Closing Date, each of the Orange County Joint
Venture and the Oregon Joint Venture shall have executed and delivered to
the Agent the following:
(i) a First Amended and Restated Limited Guaranty, substantially
in the form attached hereto as Exhibit G;
---------
(ii) First Amendment and Restated Security Agreement - All
Assets, substantially in the form attached hereto as Exhibit H; and
---------
(iii) First Amended and Restated Assignment of Receivables
and
Proceeds, substantially in the form attached hereto as Exhibit I;
---------
(f) On or before the Closing Date, the Borrower shall have executed
and delivered to the Agent the following:
(i) First Amended and Restated Stock Pledge Agreement,
substantially in the form attached hereto as Exhibit J;
---------
-33-
(ii) First Amended and Restated LLC Pledge Agreement,
substantially in the form attached hereto as Exhibit K; and
---------
(iii) First Amended and Restated Joint Venture Pledge
Agreement, substantially in the form attached hereto as Exhibit L.
---------
5. REPRESENTATIONS AND WARRANTIES
------------------------------
In order to induce the Banks to enter into this Agreement and to make the
Loans and in order to induce UST to issue the Letters of Credit, the Borrower,
and its Subsidiaries, hereby jointly and severally represent and warrant that as
of the date of this Agreement, and continuing so long as any Liabilities remain
outstanding, and so long as this Agreement remains in effect:
5.1 Corporate Existence. Each of the Borrower and its Subsidiaries is a
-------------------
corporation duly organized and in good standing under the laws of its state of
incorporation and is duly qualified and licensed as a foreign corporation and in
good standing in all other states except where the failure to qualify and remain
in good standing would not have a Material Adverse Effect on the Borrower. All
such states of qualification as of the date hereof are listed on Schedule 5.1,
------------
which shall be supplemented in writing by the Borrower and its Subsidiaries from
time to time as may be necessary to maintain the accuracy and completeness of
the information required to be disclosed therein.
5.2 Corporate Authority.
-------------------
(a) Each of the Borrower and its Subsidiaries has all requisite
corporate power and authority, as applicable, to own and operate each of
their respective properties and to carry on each of their respective
businesses as now conducted and proposed to be conducted.
(b) The execution and delivery by each of the Borrower and its
Subsidiaries, as applicable, of this Agreement and all of the other Loan
Documents and the performance of each such entity's obligations hereunder
and thereunder: (i) are within each such entity's powers; (ii) are duly
authorized by each of their respective Boards of Directors and, if
necessary, by each of their respective shareholders; (iii) are not in
contravention of the terms of each of their Certificates of Incorporation
or Articles of Organization, or By-Laws, or any indenture, agreement or
undertaking to which the Borrower or any of its Subsidiaries is a party or
by which such entity or any of its property is bound; (iv) do not require
any governmental consent, registration or Approval or the giving of any
notice to, or the granting of any exemption by, any governmental authority
except as contemplated by the Loan Documents; (v) do not contravene any Law
or contractual or governmental restriction binding upon such corporation;
(vi) will not, except as contemplated herein, result in the imposition of
any Lien upon any property of
-34-
such entity under any Law or any existing indenture, mortgage, deed of
trust, loan or credit agreement or other material agreement or instrument
to which each such entity is a party or by which it or any of its property
may be bound or affected; and (vii) will not result in the cancellation,
modification, revocation or suspension of any Licenses, as defined in
subsection 5.20(b) which are material to the operation of the business of
------------------
the Borrower and its Subsidiaries, taken as a whole. Copies of the
Certificate or Articles of Incorporation and By-laws of each of the
Borrower and its Subsidiaries, with all amendments thereto to the date
hereof, have been furnished to the Agent, and such copies are accurate and
complete as of the date hereof.
5.3 Binding Effect. This Agreement and the other Loan Documents are the
--------------
legal, valid and binding obligations of each of the Borrower and its
Subsidiaries which is a party hereto or thereto, and are enforceable against
each of the Borrower and its Subsidiaries, as applicable, in accordance with
their respective terms.
5.4 Financial Data.
--------------
(a) The Borrower has furnished to the Agent its audited consolidated
financial statements, dated December 27, 1995, including the report and
opinion of Deloitte & Touche LLP, relating thereto (collectively, the
"Financials"), and its unaudited monthly schedules showing income and
expenses (excluding income taxes), for the four months ended April 24,
1996, copies of which are attached hereto as Schedule 5.4. All of the
------------
material liabilities (actual and contingent) of each of the Borrower and
its Subsidiaries, are fully, accurately and completely disclosed in the
Financials.
(b) All financial statements furnished herewith have been and all
financial statements to be furnished in accordance with subsection 6.1 will
--------------
be prepared in accordance with the books and records of the Borrower and
its Subsidiaries and fairly present or will fairly present, as applicable,
the financial condition of the Borrower and its Subsidiaries, taken as a
whole, at the dates thereof and the results of operations for the periods
indicated (subject, in the case of unaudited financial statements, to
normal year-end adjustments, none of which are expected to be material).
All of the Financials have been and all of the financial statements to be
provided hereunder will be prepared in conformity with GAAP.
(c) All information, reports and other papers and data furnished or
to be furnished to the Agent by the Borrower or any Subsidiary have been
and will be, at the time the same are so furnished to the Agent, accurate
and correct in all material respects and complete insofar as completeness
may be necessary to give the Agent a true and accurate knowledge of the
subject matter thereof. Since the date of the Financials, there has been
no Material Adverse Change with respect to the Borrower and its
Subsidiaries.
5.5 Tangible Assets. Attached as Schedule 5.5 hereto is a list of all of
--------------- ------------
the Borrower's and its Subsidiaries' right, title, and interest in and to
tangible assets, by location and category,
-35-
as of December 27, 1995, to be supplemented with each Financial Statement
required under subsection 6.2(a) by an Acceptable Supplement (as defined in
-----------------
subsection 5.6) with respect to items not previously listed, with an individual
- --------------
book value or estimated fair market value of Twenty-Five Thousand and 00/100
Dollars ($25,000.00) or more.
5.6 Title to Collateral. Except as disclosed on Schedule 5.6 and except
------------------- ------------
as contemplated in subsection 7.1, all of the Collateral is free and clear of
--------------
all Liens. Each of the Borrower and its Subsidiaries has good and valid title
to all of the assets reflected on its respective books and records as being
owned by it. All Collateral is and shall be kept only at the locations
specified on Schedule 5.6, as such Schedule may be supplemented, in writing by
------------
the Borrower or its Subsidiaries from time to time as may be necessary to
maintain the accuracy and completeness of the information required to be
disclosed therein, which supplement shall be acceptable to the Agent unless the
supplement reflects a Material Adverse Change of the Borrower (any such
supplement not indicating a Material Adverse Change of the Borrower or which is
otherwise acceptable to the Agent being referred to as an "Acceptable
Supplement"). The Agent's security interests in, pledge of and mortgages in the
Collateral covered by the Loan Documents have been duly perfected and, as
necessary, recorded and no security interests, pledges or mortgages shall exist
at the Closing with respect to such Collateral, other than the security
interests, pledges and mortgages granted to the Agent under the Loan Documents
or Liens permitted by this Agreement.
5.7 Real Property; Leases. All real property owned, leased, or
---------------------
occupied by the Borrower or any of its Subsidiaries, and all leases with respect
thereto, are disclosed on Schedule 5.7 attached hereto, as such Schedule may be
------------
supplemented in writing by an Acceptable Supplement. Except as set forth in
Schedule 5.7 or an Acceptable Supplement, each of the Borrower and its
- ------------
Subsidiaries enjoys peaceful and undisturbed possession of such property subject
to all leases, licenses for occupancy, or occupancy or use agreements of real
property, and all such leases, licenses for occupancy, or occupancy or use
agreements are valid and subsisting, in full force and effect; to the best
knowledge of Borrower and its Subsidiaries, no material default exists
thereunder; and all leases, licenses for use, or agreements for use of personal
property are valid and subsisting, in full force and effect, and no material
default exists thereunder.
5.8 Solvency. The Borrower and its Subsidiaries, taken as a whole, and
--------
(ii) the Borrower, when examined separately:
(1) will be able to pay its Indebtedness as the same becomes due,
including without limitation, all of the Liabilities;
(2) will have funds and capital sufficient to carry on its business as
now conducted or as contemplated to be conducted;
-36-
(3) owns property having a value both at fair valuation and at present
fair saleable value greater than the amount required to pay its debts as
they become due, including without limitation, all of the Liabilities; and
(4) is not Insolvent and will not be rendered Insolvent as determined
by the Uniform Fraudulent Conveyance Act, as adopted and in effect in the
Commonwealth of Massachusetts in Massachusetts General Laws, Chapter 109A,
Section 1, or any other applicable law.
When examined as a whole, neither the Borrower nor the Borrower and its
Subsidiaries, taken as a whole:
(1) (A) is Insolvent on the date hereof; or
(B) is engaged in business or a transaction, or is
about to engage in business or a transaction, for which, taking
into account any property remaining with the Borrower and its
Subsidiaries, they would, taken as a whole, have an unreasonably
small capital; or
(C) intends to incur, or believes that the Borrower and its
Subsidiaries would incur, Indebtedness that would be beyond the
ability of the Borrower and its Subsidiaries, taken as a whole,
to pay as such Indebtedness matures; or
(2) is transferring an interest in the Borrower or any of its
Subsidiaries, or incurring an obligation which, under Section 548 of the
Bankruptcy Code (Title 11 of the United States Code), may be avoided.
Neither the Borrower nor any of its Subsidiaries (a) is considering the filing
of a petition by it under any Insolvency Laws, or the liquidation of all or a
major portion of its respective properties; and (b) has any knowledge of any
Person contemplating the filing against any of them of any such petition.
5.9 Principal Place of Business. The principal places of business and
---------------------------
chief executive office of the Borrower and each of its Subsidiaries are the
addresses first set forth above in this Agreement. The Borrower shall notify
the Agent of any change thereof prior to such change. The books and records of
the Borrower and each of its Subsidiaries are located at the principal place of
business and chief executive office of the Borrower. The Borrower shall
promptly notify the Agent of any change thereof prior to such change.
5.10 Other Corporate Names. Neither the Borrower nor any of its
---------------------
Subsidiaries has used any corporate or fictitious name (including any tradename,
tradestyle, assumed name, division name or any similar name), other than the
corporate name shown on such
-37-
corporation's Certificate of Incorporation or Articles of Organization or as
listed on Schedule 5.10 or disclosed in an Acceptable Supplement.
-------------
5.11 Tax Liabilities. The Borrower and each of its Subsidiaries has filed
---------------
all federal, state and local tax reports and returns required by any Law to be
filed thereby except for extensions duly obtained, and has paid all taxes,
assessments and other governmental charges levied upon each of their respective
properties, assets, income or franchises, other than those not yet delinquent
and those, not substantial in aggregate amount, reserved against, or those being
contested as permitted by subsection 6.5. The charges, accruals and reserves on
--------------
the books of each of the Borrower and its Subsidiaries in respect of each of
their respective taxes are adequate in the opinion of the Borrower, and each of
the Borrower and its Subsidiaries is not subject to any unpaid assessments for
additional taxes (other than any such assessments for amounts which would not
have a Material Adverse Effect on the Borrower) and do not know of any basis
therefor.
5.12 Loans. Except as disclosed on and set forth in the Financials or on
-----
Schedule 5.12 and except for trade payables and accrued expenses arising in the
- -------------
ordinary course of the Borrower's and its Subsidiaries' business since the date
of the latest Financials provided pursuant to subsection 5.4, neither the
--------------
Borrower nor any Subsidiary is obligated on any loans or other Indebtedness for
borrowed money as of the Closing Date (other than as permitted under subsection
----------
7.2).
- ---
5.13. Margin Securities. Neither the Borrower nor any Subsidiary owns
-----------------
any margin securities and none of the Loans advanced hereunder will be used for
the purpose of purchasing or carrying any margin securities or for the purpose
of reducing or retiring any Indebtedness which was originally incurred to
purchase any margin securities or for any other purpose not permitted by
Regulation G or U of the Board of Governors of the Federal Reserve System. If
requested by the Agent, the Borrower and its Subsidiaries will furnish the Agent
with a statement in conformity with the requirements of Federal Reserve Form G-1
or U-1 referred to in said Regulation. No part of the proceeds of the Loans to
be made hereunder will be used by the Borrower or any of its Subsidiaries for
any purpose which violates, or which is inconsistent with, the provisions of
Regulation X of said Board of Governors.
5.14 Subsidiaries; Divisions. Except as disclosed on Schedule 5.14, as the
----------------------- -------------
same may be supplemented in writing from time to time, the Borrower has no
Subsidiaries (including without limitation, no Offshore Subsidiaries) and is not
engaged in any joint venture or partnership with any other Person. Neither the
Borrower nor any of its Subsidiaries owns or holds, directly or indirectly, any
capital stock or equity security of, or any equity interest in, any Person other
than as disclosed on Schedule 5.14, as so supplemented.
-------------
5.15 Litigation and Proceedings. Except as disclosed on Schedule 5.15, no
-------------------------- -------------
judgments are outstanding against the Borrower or any of its Subsidiaries nor is
there now
-38-
pending or, to the knowledge of the Borrower or any Subsidiary, threatened, any
litigation, contested claim, or federal, state or municipal governmental
proceeding by or against the Borrower or any of its Subsidiaries or, to the best
of each of their knowledge after due inquiry, any basis therefor, which
litigation, claim or proceeding could reasonably be expected to result in a
Material Adverse Effect. The Borrower and its Subsidiaries shall supplement
such schedule with an Acceptable Supplement from time to time which schedule
shall be deemed an Acceptable Supplement if all material threatened or pending
litigation and proceedings (including but not limited to all material threatened
or pending litigation and proceedings between the Borrower or a Subsidiary and
another party to a Facility Agreement) are accurately described therein.
5.16 Registration Statement.
-----------------------
(a) The Borrower's Registration Statement (No. 333-2906) on Form S-1
filed with the SEC on March 29, 1996, as amended (the "Registration
Statement"), and the final Prospectus included therein, do not contain any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(b) No representation or warranty made by the Borrower herein or in
any other certificate furnished from time to time in connection herewith,
contains or will contain any misrepresentation of a material fact or omits
or will omit to state any material fact necessary to make the statements
herein or therein (taken as a whole in conjunction with all such documents)
not misleading when made. To the best of the Borrower's knowledge, there
is no condition specific to the business of the Borrower which adversely
affects, or which would in the future adversely affect, the business,
operations, property or financial condition of the Borrower in a manner
which would materially adversely affect the Collateral or the Borrower's
ability to perform its obligations under this Agreement or any of the other
Loan Documents.
5.17 Material Agreements. Attached as Schedule 5.17 hereto is a true,
------------------- -------------
complete and accurate list of all material agreements as of the Closing Date
(including all amendments thereto), oral or written, involving the payment or
expenditure of One Hundred Thousand and 00/100 Dollars ($100,000.00) or more
(other than sales or purchase orders entered into in the ordinary course of
business of the Borrower or any of its Subsidiaries) (i) to which the Borrower
or any of its Subsidiaries is a party, (ii) by which any assets of the Borrower
or any of its Subsidiaries are bound, or (iii) to which any director, officer,
shareholder or Affiliate of any of the foregoing is a party or which any agent
of any of the foregoing has entered into, in any such case, on behalf of the
Borrower or any Subsidiary, including without limitation, all leases and
management maintenance, brokerage, supply and service contracts and any
contract, agreement or other arrangement providing for the employment of,
furnishing of services to or by, the Borrower or any of its Subsidiaries, any
director, officer or shareholder thereof, or any Affiliate of any of the
foregoing. A true, correct and complete copy of all of the agreements
(including all amendments thereto) as set forth on
-39-
Schedule 5.17 has previously been furnished to the Agent. As of the Closing
- -------------
Date, neither the Borrower or any of its Subsidiaries nor any officer, director,
shareholder or Affiliate of the Borrower or any of its Subsidiaries is in
default under any such material agreement which could reasonably be expected to
have a Materially Adverse Effect on the Borrower or which could reasonably be
expected to have a Materially Adverse Effect on the ability of the Borrower to
perform its obligations under any of the Loan Documents to which it is a party.
The execution and delivery of the Loan Documents was not and is not a default
under of any of the agreements listed on Schedule 5.17. As of the date hereof,
-------------
the Borrower knows of no dispute regarding any contract, lease, or commitment
which would have a Material Adverse Effect on the Borrower and its Subsidiaries
or, to the best of its knowledge, after due inquiry, any basis therefor.
5.18 Largest Customers. Except as set forth on Schedule 5.18, as of the
----------------- -------------
Closing Date, the Borrower has no reason to believe that any of its ten largest
customers intends significantly to alter its sales or purchases so as to have a
Material Adverse Effect on the Borrower and its Subsidiaries.
5.19 Employee Controversies and Employment and Labor Agreements.
----------------------------------------------------------
(a) There are no controversies pending or, to the best of the
Borrower's knowledge after due inquiry, threatened, between the Borrower or
any of its Subsidiaries and any of its employees, other than employee
grievances arising in the ordinary course of business which are not, in the
aggregate, material to the financial condition, results of operation or
business of the Borrower and its Subsidiaries, taken as a whole. Each of
the Borrower and its Subsidiaries is in compliance with all federal and
state laws respecting employment and employment terms, conditions and
practices the failure to comply with which could have a Material Adverse
Effect on the Borrower and its Subsidiaries. Neither the Borrower nor any
of its Subsidiaries has union representation questions, grievances,
discrimination or unfair labor practice complaints pending or threatened
against it before any state or federal board or agency respecting
employment and employment terms, conditions and practices the failure to
comply with which could have a Material Adverse Effect on the Borrower and
its Subsidiaries or, to the best of its knowledge, after due inquiry, any
basis therefor, except as set forth on Schedule 5.19 or on an Acceptable
-------------
Supplement.
(b) Except as set forth in Schedule 5.19: (i) neither the Borrower
-------------
nor any of its Subsidiaries is a party as of the Closing Date to any
outstanding employment agreements or contracts with officers or employees
that are not terminable at will, or that provide for the payment of any
bonus or commission; (ii) as of the Closing Date, neither the Borrower nor
any of its Subsidiaries is a party to any agreement, policy or practice
that requires it to pay termination or severance pay to salaried,
non-exempt or hourly employees (other than as required by law); (iii)
neither the Borrower nor any of its Subsidiaries is a party to any
collective bargaining agreement or other labor union contract applicable to
persons employed by the Borrower or any of its Subsidiaries nor do the
Borrower or any of its
-40-
Subsidiaries know of any activities or proceedings of any labor union to
organize any such employees, except in any such case as may be set forth on
an Acceptable Supplement. Each of the Borrower and its Subsidiaries has
furnished to the Agent complete and correct copies of all such agreements
("Employment and Labor Agreements"). Neither the Borrower nor any of its
Subsidiaries has breached or otherwise failed to comply in any material
respect with any provisions of any Employment and Labor Agreement, and
there are no material grievances outstanding thereunder, except in any such
case as may be set forth on an Acceptable Supplement.
5.20 Compliance with Laws and Regulations.
------------------------------------
(a) Each of the Borrower and its Subsidiaries is in compliance with
all Laws and with each of their respective Certificate of Incorporation or
Articles of Organization, the failure to comply with which could have,
individually or in the aggregate, a Material Adverse Effect on the Borrower
and its Subsidiaries.
(b) Schedule 5.20(b) attached hereto sets forth, as of the Closing
---------------
Date, a true and complete list of all material licenses (excluding motor
vehicle registrations and including, but not limited to, any license
relating to alcoholic beverages, beer, wine or liquor), permits,
franchises, authorizations and approvals issued or granted to each of the
Borrower and its Subsidiaries by the United States, any state or local
government, any foreign national or local government, or any department,
agency, board, commission, bureau of instrumentality of any of the
foregoing (each a "License", and, collectively, the "Licenses"), and all
pending applications therefor. Such list contains a summary description of
each such item and, where applicable, specifies the date issued, granted or
applied for, the expiration date and the current status thereof. Except as
set forth in Schedule 5.20(b) attached hereto, each License has been issued
----------------
to, and duly obtained and fully paid for by, the holder thereof and is
valid, in full force and effect, and not subject to any pending or
threatened administrative or judicial proceeding to suspend, revoke, cancel
or declare such License invalid in any respect. Borrower shall supplement
Schedule 5.20(b) with an Acceptable Supplement provided with each Financial
----------------
Statement required under subsection 6.2(a), which Acceptable Supplement
-----------------
shall list all liquor licenses and all other material licenses not
theretofore listed.
(c) Each of the Borrower and its Subsidiaries has all Licenses
required, and such Licenses are sufficient and adequate in all respects, to
permit the continued lawful conduct of each of the Borrower's and its
Subsidiaries' respective businesses in the manner now conducted and the
ownership, occupancy and operation of their real property for their present
uses. Except as set forth in Schedule 5.20(c), attached hereto or as may
----------------
be set forth in an Acceptable Supplement: (i) neither the Borrower nor any
of its Subsidiaries is in violation of any of the Licenses; (ii) none of
the operations of the Borrower or any of its Subsidiaries is being
conducted in a manner
-41-
that violates any of the terms or conditions under which any License was
granted; (iii) none of the Licenses of the Borrower or any of its
Subsidiaries' relating to alcoholic beverages, beer, wine or liquor has
ever been suspended, revoked or otherwise terminated, or subject to
judicial or administrative review, for any reason other than the renewal or
expiration thereof nor has any application by the Borrower or its
Subsidiaries of any of such Licenses ever been denied; and (iv) no License
will in any way be affected by, or terminate or lapse by reason of, the
transactions contemplated by the Loan Documents or the Subordinated Debt
Documents.
5.21 Intellectual Property Rights. Each of the Borrower and its
----------------------------
Subsidiaries, as applicable, possesses and will possess adequate assets,
licenses, patents, patent applications, copyrights, service marks, trademarks,
trademark applications, tradestyles and tradenames to continue to conduct its
business as heretofore conducted by it. Neither the Borrower nor any of its
Subsidiaries has been charged or, to each of their knowledge, has been
threatened to be charged with, any infringement of, nor has any of them
infringed on, any unexpired trademark, trademark registration, tradename,
patent, copyright, copyright registration, or other proprietary right of any
other Person, which infringement could have a Material Adverse Effect on the
Borrower and its Subsidiaries.
5.22 Pension Related Matters. Each Plan maintained by the Borrower or any
-----------------------
ERISA Affiliate complies, and has been administered in accordance with its terms
and all material applicable requirements of ERISA and of the Tax Code and with
all material applicable rulings and regulations issued under the provisions of
ERISA and the Tax Code setting forth those requirements. No Reportable Event,
Prohibited Transaction or withdrawal from a Multiemployer Plan has occurred and
no Accumulated Funding Deficiencies exist with respect to any Plan or
Multiemployer Plan which could have a Material Adverse Effect on the Borrower or
any ERISA Affiliate. The Borrower and each ERISA Affiliate has satisfied all of
the funding standards applicable to such Plans and Multiemployer Plans under
Section 302 of ERISA and Section 412 of the Tax Code and the PBGC has not
instituted any proceedings, and there exists no event or condition which would
constitute grounds for the institution of proceedings by the PBGC, to terminate
any Plan or Multiemployer Plan under Section 4042 of ERISA which could have a
Material Adverse Effect on the Borrower or any ERISA Affiliate. Neither the
Borrower nor any ERISA Affiliate has taken any steps to terminate any Plan,
which termination could have a Material Adverse Effect on the Borrower or any
ERISA Affiliate. Neither the Borrower nor any ERISA Affiliate has taken any
steps to terminate its participation in any Multiemployer Plan or withdraw from
any Multiemployer Plan. Each of the Borrower and each ERISA Affiliate has made
all contributions to each Plan and each Multiemployer Plan to which it has
become obligated to contribute as to which the failure to make contributions
could have a Material Adverse Effect on the Borrower or any ERISA Affiliate.
The Borrower is not aware of any assessments or assertions of withdrawal
liability against it or any ERISA Affiliate with respect to any Plan or
Multiemployer Plan. The aggregate potential withdrawal liability under all
Multiemployer Plans to which each of the Borrower and each ERISA Affiliate is
obligated to contribute is less than an amount
-42-
which, if all such liabilities were incurred, could have a Material Adverse
Effect on the Borrower, its Subsidiaries, and any ERISA Affiliate, taken as a
whole.
5.23 Environmental Matters. Except as disclosed on Schedule 5.23, as
--------------------- -------------
supplemented by any Acceptable Supplement: (a) each of the Borrower and its
Subsidiaries has complied in all material respects with Environmental Laws
regarding transfer, construction on and operation of the business and property,
including but not limited to notifying authorities, observing restrictions on
use, transferring, modifying or obtaining permits, licenses, approvals and
registrations, making required notices, certifications and submissions,
complying with financial liability requirements, Managing Hazardous Substances,
and Responding to the presence or Release of Hazardous Substances connected with
operation of its business or property; (b) neither the Borrower nor any of its
Subsidiaries has any material contingent liability with respect to the
Management of any Hazardous Substance; (c) during the term of this Agreement,
neither the Borrower nor any of its Subsidiaries shall, nor shall it permit
others to, manage, whether on or off the property of the Borrower or such
Subsidiary, Hazardous Substances except in full compliance with Environmental
Laws; (d) each of the Borrower and its Subsidiaries shall take prompt action in
full compliance with Environmental Laws to Respond to the on-site or off-site
Release of Hazardous Substances connected with operation of its business or
property; (e) neither the Borrower nor any Subsidiary has received any
Environmental Notice; and (f) to the best of the knowledge of the Borrower and
its Subsidiaries, no conditions exist on property owned or leased, or previously
owned or leased, by Borrower or any of its Subsidiaries which would result in
issuance of an Environmental Notice to Borrower or any of its Subsidiaries. Any
supplemental Schedule 5.23 filed shall be deemed to be an Acceptable Supplement
-------------
with respect to Environmental Notices if it reflects all Environmental Notices
which would result in a Material Adverse Effect and any Environmental Notice
from any governmental agency or authority.
5.24 Broker's Fee. Except as set forth on Schedule 5.24, neither the
------------ -------------
Borrower nor any of its Subsidiaries is in any way obligated to any Person in
respect of any finder's or broker's fee or similar commission in connection with
the transactions contemplated by this Agreement. Each of the Borrower and its
Subsidiaries agrees to indemnify the Agent and the Banks and hold the Agent and
the Banks harmless from and against any claims for any such fee or commission by
any such Persons.
5.25 Securities Matters. The making of the Loans hereunder, the
------------------
application of the proceeds and repayment thereof by the Borrower and the
consummation of the transactions contemplated by this Agreement have not and
will not violate any provision of any federal or state securities statutes,
rules or regulations, or any order issued by the Securities and Exchange
Commission (collectively, "Securities Laws"). Neither the Borrower nor any of
its Subsidiaries has issued any securities in violation of any Securities Law.
Promptly upon the filing thereof, the Borrower shall deliver to the Agent a true
and complete copy of each statement, document and report, periodic or otherwise,
filed pursuant to any Securities Law. The Borrower agrees to indemnify the
Agent and the Banks and hold the Agent and the
-43-
Banks harmless from and against the claims of any Persons in connection with the
violation or alleged violation by Borrower or any Subsidiary of any Securities
Laws.
5.26 Equity Beneficial Ownership. Schedule 5.26 sets forth the number of
--------------------------- -------------
shares of each class of capital stock authorized for the Borrower and the number
of shares of each such class of stock outstanding. The outstanding capital
stock of the Borrower is duly authorized, validly issued, fully paid and
non-assessable. The Borrower shall supplement Schedule 5.26 from time to time
-------------
as required by an Acceptable Supplement.
5.27 Disclosure. No written information provided or statements made by the
----------
Borrower, its Subsidiaries, or any other Affiliate of the Borrower in connection
with this transaction, or any of the representations and warranties to the Banks
herein or in any of the Loan Documents contains any untrue statement of a
material fact or omits to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The Borrower has disclosed to the Agent in writing, every fact of
which it is aware (other than those relating to general economic matters or
matters of public knowledge) which, insofar as the Borrower can reasonably
foresee, might materially and adversely affect the business prospects,
operations or financial condition of the Borrower and its Subsidiaries or the
ability of each of the Borrower and its Subsidiaries to perform their respective
obligations hereunder or under any other Loan Documents.
5.28 Capitalization.
--------------
(a) As of the date hereof there are no treasury shares held by the
Borrower, and there are no outstanding options, warrant agreements,
conversion rights, preemptive rights or other rights to subscribe for,
purchase or otherwise acquire any unissued or treasury shares of capital
stock of the Borrower except as described in the Registration Statement.
(b) The total authorized capital stock of Fine Host Services consists
of One Thousand Five Hundred (1,500) shares of common stock, without par
value, of which One Hundred (100) shares are validly issued and outstanding
as of the Closing Date, all of which are owned by the Borrower. There are
no treasury shares held by Fine Host Services. There are no outstanding
options, warrant agreements, conversion rights, preemptive rights or other
rights to subscribe for, purchase or otherwise acquire any unissued or
treasury shares of capital stock of Fine Host Services.
(c) The total authorized capital stock of Fine Host of Vermont
consists of One Hundred (100) shares of common stock, without par value, of
which One Hundred (100) shares are validly issued and outstanding as of the
Closing Date, all of which are owned by the Borrower. There are no treasury
shares held by Fine Host of Vermont. There are no outstanding options,
warrant agreements, conversion rights, preemptive rights or other rights to
subscribe for, purchase or otherwise acquire any unissued or treasury
shares of capital stock of Fine Host of Vermont.
-44-
(d) The total authorized capital stock of Fanfare consists of Fifteen
Thousand (15,000) shares of common stock, without par value, of which Two
Thousand (2,000) shares are validly issued and outstanding as of the
Closing Date, all of which are owned by the Borrower. There are no treasury
shares held by Fanfare. There are no outstanding options, warrant
agreements, conversion rights, preemptive rights or other rights to
subscribe for, purchase or otherwise acquire any unissued or treasury
shares of capital stock of Fanfare.
(e) The total authorized capital stock of Global Fanfare consists of
One Thousand (1,000) shares of common stock, without par value, of which
Four Hundred (400) shares are validly issued and outstanding as of the
Closing Date, all of which are owned by the Borrower. There are no
treasury shares held by Global Fanfare. There are no outstanding options,
warrant agreements, conversion rights, preemptive rights or other rights to
subscribe for, purchase or otherwise acquire any unissued or treasury
shares of capital stock of Global Fanfare.
(f) The total authorized capital stock of Fine Host International
consists of One Thousand (1,000) shares of common stock, without par value,
of which One Hundred (100) shares are validly issued and outstanding as of
the Closing Date, all of which are owned by the Borrower. There are no
treasury shares held by Fine Host International. There are no outstanding
options, warrant agreements, conversion rights, preemptive rights or other
rights to subscribe for, purchase or otherwise acquire any unissued or
treasury shares of capital stock of Fine Host International.
(g) The total authorized capital stock of each of the Special Texas
Corporations in existence as of the Closing Date consists of One Thousand
(1,000) shares of common stock, with One and 00/100 Dollar ($1.00) par
value per share, of which One Thousand (1,000) shares are validly issued
and outstanding for Convention Beverages, Inc., and One Thousand (1,000)
shares of common stock, with $.01 par value per share, of which One
Thousand (1,000) shares are validly issued and outstanding for Fine Host of
Texas, Inc., and all of which are owned as shown on Schedule 5.26. There
--------------
are no treasury shares held by any Special Texas Corporation. There are no
outstanding options, warrant agreements, conversion rights, preemptive
rights or other rights to subscribe for, purchase or otherwise acquire any
unissued or treasury shares of capital stock of the Special Texas
Corporations. The Agent has been provided with true and copies of the
Texas Management Agreements and the articles of incorporation and bylaws of
the Special Texas Corporations.
(h) The total authorized capital stock of CFM in existence as of the
Closing Date consists of One Hundred (100) shares of common stock, with no
par value per share, of which Seventy-Five (75) shares are validly issued
and outstanding as of the Closing Date, all of which are owed by the
Borrower. There are no treasury shares held by CFM. There are no
outstanding options, warrant agreements, conversion
-45-
rights, preemptive rights or other rights to subscribe for, purchase or
otherwise acquire any unissued or treasury shares of capital stock of CFM.
(i) The total authorized capital stock of Northwest in existence as of
the Closing Date consists of Ten Thousand (10,000) shares of common stock,
with no par value per share, of which Eight Hundred Twenty (820) shares are
validly issued and outstanding as of the Closing Date, all of which are
owned by the Borrower. There are no treasury shares held by Northwest.
There are no outstanding options, warrant agreements, conversion rights,
preemptive rights or other rights to subscribe for, purchase or otherwise
acquire any unissued or treasury shares of capital stock of Northwest.
(j) The total authorized capital stock of SWSI in existence as of the
Closing Date consists of (i) One Million (1,000,000) shares of class A
common stock, with $.01 par value per share, of which Twenty-Five Thousand
(25,000) shares are validly issued and outstanding as of the Closing Date,
all of which are owned by the Borrower, and (ii) Two Hundred Thousand
(200,000) shares of class B common stock, with $.01 par value per share, of
which no shares are issued and outstanding. There are no treasury shares
held by SWSI. There are no outstanding options, warrant agreements,
conversion rights, preemptive rights or other rights to subscribe for,
purchase or otherwise acquire any unissued or treasury shares of capital
stock of Northwest.
(k) The Borrower is the present owner and holder of Seventy-Eight
Percent (78%) of all of the membership interests of Tarrant County. There
are no outstanding options, warrant agreements, conversion rights,
preemptive rights or other rights to subscribe for, purchase or otherwise
acquire any membership interests of Tarrant County.
(l) The Borrower is the present owner and holder of Seventy-Six
Percent (76%) of all of the joint venture interests of the Orange County
Joint Venture. There are no outstanding options, warrant agreements,
conversion rights, preemptive rights or other rights to subscribe for,
purchase or otherwise acquire any joint venture interests of the Orange
County Joint Venture.
(m) The Borrower is the present owner and holder of Eighty-Five
Percent (85%) of all of the joint venture interests of the Oregon Joint
Venture. There are no outstanding options, warrant agreements, conversion
rights, preemptive rights or other rights to subscribe for, purchase or
otherwise acquire any joint venture interests of the Oregon Joint Venture.
5.29 Corporate Structure. Schedule 5.30 attached hereto sets forth (a) the
------------------- -------------
name of each corporation, partnership, joint venture or other entity engaged in
the recreation food and beverage business or concession or food service business
of which the Borrower or any of its
-46-
Subsidiaries owns (or has the right to acquire), directly or indirectly, (i) in
the case of corporations or other entities with voting securities, shares of
capital stock having in the aggregate Ten Percent (10%) or more of the total
combined voting power of the issued and outstanding shares of capital stock
entitled to vote generally in the election of directors of such corporation and
(ii) in the case of partnerships or other entities without voting securities,
any general partnership interest or a limited partnership interest entitling the
Borrower or any of its Subsidiaries to Ten Percent (10%) or more of the profits
or assets upon liquidation and (b) in the case of each corporation described in
clause (a) above, (i) the jurisdiction of incorporation, (ii) the states where
such corporation is qualified to do business as a foreign corporation, (iii) the
principal place of business, (iv) the capitalization thereof and the percentage
of each class of capital voting stock owned by the Borrower and each of its
Subsidiaries, as applicable, and (v) a brief description of the nature of the
business; and (c) in the case of each unincorporated entity described in clause
(a) above, information substantially equivalent to that provided pursuant to
clause (b) above with regard to corporate entities.
5.30 Facility Agreements with Change in Stock Ownership Restrictions.
---------------------------------------------------------------
Neither the Borrower nor any of its Subsidiaries has entered into any Facility
Agreement which contains provisions which restrict or penalize a change in stock
ownership of the Borrower or any of its Subsidiaries except as set forth in
Schedule 5.30 attached hereto.
- -------------
6. AFFIRMATIVE COVENANTS.
---------------------
Each of the Borrower and its Subsidiaries hereby covenants and agrees that
so long as any Liabilities remain outstanding, and (even if there shall be no
Liabilities outstanding) so long as this Agreement remains in effect:
6.1 Financial Covenants. The Borrower shall:
-------------------
6.1.1 Debt To Operating Cash Flow Ratio. Maintain at all times
---------------------------------
(to be tested as of the last day of each such fiscal quarter) a maximum
ratio of its Debt to Operating Cash Flow of 3.50 to 1.00.
6.1.2 Operating Cash Flow to Fixed Charge-Ratio. Maintain at all
-----------------------------------------
times (to be tested as of the last day of each fiscal quarter of the
Borrower for the twelve (12) month period ending on that date), commencing
with the fiscal quarter of the Borrower ending June 26, 1996, a ratio of
its Operating Cash Flow to its Fixed Charges of greater than or equal to
the ratio set forth below opposite the applicable period.
Quarters Ending in the
Periods Ratio
------------------------- -----
June 26, 1996 through 1.85 to 1.00
-47-
September 25, 1996
September 25, 1996 2.00 to 1.00
and thereafter
6.1.3 Operating Cash Flow to Cash Interest Expense Ratio.
--------------------------------------------------
Maintain at all times (to be tested as of the last day of each fiscal
quarter of the Borrower for the twelve (12) month period ending on that
date), commencing with the fiscal quarter of the Borrower ending December
25, 1996, a ratio of Operating Cash Flow to its Cash Interest Expenses of
greater than or equal to 4.00 to 1.00.
6.1.4 Minimum Net Worth. Maintain at all times (to be tested as
-----------------
of the last day of each fiscal quarter of the Borrower) during the periods
set forth below, for each fiscal quarter of the Borrower, a minimum Net
Worth as set forth below.
Quarters Ending Net Worth
--------------- ---------
June 26, 1996 $45,750,000
September 25, 1996 $47,500,000
December 25, 1996 $48,745,000
March 26, 1997 $49,450,000
June 5, 1997 $50,150,000
September 24, 1997 $52,700,000
December 31, 1997 $54,250,000
April 1, 1998 $55,150,000
July 1, 1998 $56,050,000
September 30, 1998 $59,300,000
December 30, 1998 $61,050,000
March 31, 1999 $62,150,000
6.1.5 Minimum Operating Cash Flow. Maintain at all times (to be
---------------------------
tested as of the last day of each fiscal quarter of the Borrower commencing with
the fiscal quarter ending December 25, 1996), a minimum Operating Cash Flow of
at least:
$2,150,000 for the quarter ending June 26, 1996;
$2,750,000 for the quarters ending September 25, 1996 through June 5,
1997; $3,250,000 for the quarters ending September 24, 1997 through
July 1, 1998; and $4,000,000 for each subsequent quarter.
6.1.6 Minimum Tangible Capital Base. Maintain at all times (to be
-----------------------------
tested as of the last day of each fiscal quarter of the Borrower commencing
with the fiscal quarter ending June 26, 1996), a minimum Tangible Capital
Base of at least Five Million and 00/100 Dollars ( $5,000,000.00).
-48-
6.2 Financial Statements. The Borrower shall keep proper books of record
--------------------
and account in which full and true entries will be made of all dealings or
transactions of or in relation to the business and affairs of the Borrower, in
accordance with GAAP, and the Borrower shall cause to be furnished to the Agent,
in accordance with the notice provisions of subsection 10.13:
----------------
(a) as soon as they become available and are filed with the SEC, but
in any event within forty-five 45 days after the close of each fiscal
quarter (other than the last fiscal quarter) of the Borrower, consolidated
balance sheets at the close of such fiscal quarter, and consolidated
statements of income, stockholders' equity and cash flows for such fiscal
quarter and for the period commencing at the close of the previous fiscal
year and ending with the close of such fiscal quarter of the Borrower and
its Subsidiaries (with comparable information at the close of and for the
corresponding fiscal quarter of the prior fiscal year and for the
corresponding portion of such prior fiscal year), certified by the
principal accounting or financial officer of the Borrower (provided that
the requirements of this clause (a) for any fiscal quarter may be satisfied
by delivery of a copy of the Borrower's Quarterly Report on Form 10-Q for
such quarter);
(b) as soon as they become available and are filed with the SEC, but
in any event within ninety (90) days after the close of each fiscal year of
the Borrower, consolidated balance sheets at the close of such fiscal year,
and consolidated statements of income, stockholders' equity and cash flows
for such fiscal year (with comparable information for the prior fiscal
year), in each case as audited (without any Impermissible Qualification) by
a firm of independent public accountants of nationally recognized standing
acceptable to the Agent (provided that the requirements of the foregoing
provisions of this clause (b) for any fiscal year may be satisfied by
delivery of a copy of the Borrower's Annual Report on Form 10-K for such
year), together with a certificate from such accountants to the effect
that, in making the examination necessary for the signing of such annual
report by such accountants, they have not become aware of any Default or
Event of Default that has occurred and is continuing, or, if they have
become aware of such Default or Event of Default, describing such Default
or Event of Default;
(c) as soon as it becomes available, but in any event within thirty
(30) days after the close of each fiscal month of the Borrower, an
Operating Results and Comparison Schedule as to contract and venue
performance for such fiscal month, in substantially the form delivered by
the Borrower to UST prior to the Closing Date;
(d) as soon as it becomes available, but in any event within forty-
five (45) days after the close of each fiscal year of the Borrower, a
budget for the next succeeding fiscal year of the Borrower and its
Subsidiaries, which budget shall be prepared on a fiscal month basis and
shall contain a projected consolidated balance sheet and statements of
earnings and cash flows of the Borrower and its Subsidiaries
-49-
for such succeeding fiscal year, certified by the principal accounting or
financial officer of the Borrower;
(e) promptly, but in any event within five (5) days after the
Borrower or any of its Subsidiaries obtains knowledge of any of the
following, a statement of the chief executive, financial or accounting
officer of the Borrower setting forth in reasonable detail the nature
thereof and the action which the Borrower has taken and proposes to take
with respect thereto:
(i) the occurrence of any litigation, arbitration or governmental
investigation or proceeding not previously disclosed by the Borrower
pursuant hereto which has been instituted or, to the knowledge of the
Borrower or any of its Subsidiaries, is threatened against, the
Borrower or any of its Subsidiaries or to which any of its properties,
assets or revenues is subject which, if adversely determined, might
have a Material Adverse Effect on the Borrower and its Subsidiaries;
(ii) the occurrence of any circumstance which has a reasonable
likelihood of having a Material Adverse Effect on the Borrower and its
Subsidiaries;
(iii) any material adverse development which shall occur in any
litigation, arbitration or governmental investigation or proceeding
previously disclosed by the Borrower;
(iv) the occurrence of any Default; and
(v) the occurrence of a Reportable Event (as defined in ERISA)
under, or the institution of steps by the Borrower or any of its
Subsidiaries to withdraw from, or the institution by the PBGC or
otherwise of any steps to terminate, any employee benefit plan covered
by Title IV of such Act;
(f) promptly upon the receipt thereof and in any event within Five
(5) Business Days, copies of all detailed financial and management reports
submitted to the Borrower by its independent public accountants;
(g) as soon as it becomes available, but in any event within ten (10)
days of delivery to the Borrower, a copy of any management or other letter
issued by a public accounting firm or other management consultants with
respect to the Borrower's and the Subsidiaries' financial or accounting
systems or controls;
(h) the Borrower's and the Subsidiaries' responses to any of the
matters referenced in any letter issued by a public accounting firm or
other management consultants with respect to the Borrower's and the
Subsidiaries' financial or accounting
-50-
systems or controls at such time as the Borrower or the Subsidiaries
deliver such response to such firm or consultants, and upon receipt by the
Borrower or the Subsidiaries of any response thereto, a copy thereof to the
Agent;
(i) as soon as they become available, but in any event, within ten
(10) days after the issuance thereof, the Borrower shall furnish to the
Agent copies of such other financial statements, proxy material and
reports as the Borrower shall send or make available to its stockholders,
and promptly upon the filing thereof, copies of all reports and materials
which the Borrower or any Subsidiary files with any governmental commission
(including without limitation, the SEC), department or agency or with any
domestic or foreign stock exchange or with the NASD, including without
limitation, copies of (i) any registration statements, prospectuses and any
amendments and supplements thereto, and any regular and periodic reports
(including without limitation, reports on Form 10-K, Form 10-Q and Form 8-
K) filed by the Borrower or any Subsidiary with the SEC or any domestic or
foreign stock exchange or with the NASD; and (ii) any letters of comment or
correspondence with respect to filings or compliance matters sent to the
Borrower or any Subsidiary by any such governmental commission (including
without limitation, the SEC), department or agency or any such domestic or
foreign stock exchange or the NASD; provided that the foregoing provisions
shall not apply to reports, materials, letters or correspondence (other
than those filed with or received from the SEC) filed or received by the
Borrower or its Subsidiaries in the ordinary course of business or which
otherwise do not involve matters that could result in a Material Adverse
Effect; and
(j) such other information with respect to the financial condition,
business, property, assets, revenues and operations of the Borrower or any
of its Subsidiaries as the Agent may from time to time reasonably request.
All financial statements delivered to the Agent pursuant to the
requirements of this subsection 6.2 (except where otherwise expressly indicated)
--------------
shall be prepared in accordance with GAAP on a consolidated basis. Together with
each delivery of financial statements required by clause (a) or (b) above, the
--- ---
Borrower (and if requested by the Agent, any or all of its Subsidiaries) shall
deliver to the Agent an officer's certificate stating that there exists no
Default or Event of Default, or, if any Event of Default or Default exists,
specifying in reasonable detail the nature thereof, the period of existence
thereof and what action the Borrower has taken or proposes to take with respect
thereto. The Agent and the Banks acknowledge that, from and after the Closing
Date, the Borrower will be a reporting company under the Securities Exchange Act
of 1934, as amended, and that its Common Shares will be publicly traded, and
agree to keep all information acquired pursuant to this subsection 6.2 or under
--------------
any other provision of the Loan Documents, or as a result of any inspection
conducted in accordance with subsection 6.3 below, confidential; provided that
--------------
the Banks may, in their sole discretion, communicate such information (v) to any
holder of Subordinated Debt, (w) with the prior consent of the Borrower (not to
be unreasonably withheld), to any other Person in accordance with its customary
practices relating to routine trade inquiries, (x) to any court
-51-
or regulatory authority having jurisdiction over the Banks or any of them or as
required by law or legal process, (y) to any other Person in connection with the
Banks' sale of any interests or participations in the Liabilities, or (z) to any
other Person in connection with the exercise of the Agent's or the Banks' rights
hereunder or under any of the other Loan Documents, it being the intent of this
sentence not to create rights in and to such documents to any Person other than
the Agent and the Banks; provided that the foregoing restrictions shall not
apply to any information that the Borrower has made publicly available. The
Borrower and each of the Subsidiaries authorize the Agent to discuss the
financial condition of the Borrower and its Subsidiaries with the Borrower's
independent certified public accountants and agree that such discussion or
communication shall be without liability to the Agent or the Banks. Upon the
Agent's review of any management or other letter issued by a public accounting
firm or other management consultants, the Borrower and its Subsidiaries agree to
address, in a manner reasonably satisfactory to the Agent, any matter addressed
therein or explain, to the Agent's reasonable satisfaction, the positions of the
Borrower with respect thereto why such matter will not be addressed.
6.3 Inspection. The Agent and/or the Banks shall have the right, from
----------
time to time hereafter upon reasonable notice, to call at the Borrower's or any
of its Subsidiaries' place of business (or any other place where the Collateral
or any information relating thereto is kept or located) during ordinary business
hours, and, without hindrance or delay (except to the extent that the rights of
third parties would be violated or unless an order from a competent court is
issued allowing enforcement of the Agent's rights despite the alleged violation
of the rights of such third parties), (a) to inspect, audit, check and make
copies of and extracts from the Borrower's or any of its Subsidiaries' books,
records, journals, orders, receipts and any correspondence and other data
relating to the Borrower's business or to any transactions between the parties
hereto, (b) to make such verification concerning the Collateral as the Agent may
consider reasonable under the circumstances, and (c) to discuss the affairs,
finances and business of the Borrower with any officers, employees or directors
of the Borrower.
6.4 Conduct of Business. Except as provided herein, each of the Borrower
-------------------
and its Subsidiaries shall maintain its legal existence, shall maintain in full
force and effect all licenses, permits, authorizations, bonds, franchises,
leases, patents, contracts, and other rights necessary or desirable to the
profitable conduct of its respective business, shall continue in, and shall
limit its operations to, the same general lines of business as those currently
conducted (which is providing catering or concession services at recreational
and leisure facilities, convention centers, schools and institutions) except
that CFM may engage in vending and manual dining services, and comply with all
applicable Laws, except for such Laws the violation of which would not, in the
aggregate, have a Material Adverse Effect on the Borrower's financial condition,
results of operations or businesses. The Borrower shall not permit any default
by the Borrower to occur under any mortgage or other Lien that encumbers any
real property leased by the Borrower or any Subsidiary. Each of the Borrower
and its Subsidiaries shall maintain, preserve and protect all trade names, trade
marks, copyrights and patents and all other property necessary to the conduct of
each of its businesses
-52-
and keep all tangible property in good repair, working order and condition,
ordinary wear and tear excepted.
6.5 Claims and Taxes. Each of the Borrower and its Subsidiaries agrees to
----------------
indemnify and hold the Agent and the Banks harmless from and against any and all
claims, demands, liabilities, losses, damages, penalties, costs, and expenses
(including reasonable attorneys' and other professionals' fees and
disbursements) relating to or in any way arising out of the possession, use,
operation or control of the assets of each of the Borrower and its Subsidiaries
(other than any such claims, demands, liabilities, losses, damages, penalties,
costs or expenses attributable to the gross negligence or wilful misconduct of
the Agent or the Banks or any of their respective officers, directors, employees
or agents). Each of the Borrower and its Subsidiaries shall pay or cause to be
paid all license fees, bonding premiums and related taxes and charges, and pay
or cause to be paid all of the real and personal property taxes of each of the
Borrower and its Subsidiaries, all assessments and charges of each of the
Borrower and its Subsidiaries, and all franchise, income, unemployment, use,
excise, old age benefit, withholding, sales and other taxes and other
governmental charges assessed against the Borrower or any of its Subsidiaries,
or payable by the Borrower or any of its Subsidiaries, at such times and in such
manner as to prevent any penalty from accruing or any Lien from attaching to its
property; provided however that the Borrower and its Subsidiaries shall have the
-------- -------
right to contest in good faith, by an appropriate proceeding promptly initiated
and diligently conducted, the validity, amount or imposition of any such tax,
assessment or charge, and upon such good faith contest, to delay or refuse
payment thereof, if (a) the Borrower or the applicable Subsidiary establishes
adequate reserves, in accordance with GAAP, to cover such contested taxes,
assessments or charges, and (b) such contest does not have a Material Adverse
Effect on the financial condition of the Borrower and its Subsidiaries, taken as
a whole, the ability of the Borrower and its Subsidiaries, taken as a whole, to
pay any of the Liabilities, or the priority or value of the Agent's Lien on the
Collateral.
6.6 The Agent's and the Banks' Costs and Expenses as Additional
-----------------------------------------------------------
Liabilities. The Borrower shall reimburse the Agent for all expenses and fees
- -----------
paid or incurred by the Agent or the Banks in connection with (a) the
documentation, negotiation and closing of the Loans and other transactions
described herein and in the other Loan Documents, (b) any amendment, waiver or
consent executed in connection with this Agreement or any of the other Loan
Documents, and (c) the enforcement or preservation of the Agent's or any Bank's
rights under this Agreement and any of the other Loan Documents, including
without limitation appraisal, stamp, document, transfer filing and recording
fees and the reasonable fees and expenses of the Agent's and the Banks'
auditors, attorneys and paralegals, whether such expenses and fees are incurred
prior to or after the date hereof. All such costs and expenses incurred by the
Agent and the Banks with respect to the documentation, negotiation, enforcement,
collection and protection of the Agent's interests in the Collateral, including
without limitation the cost of such equipment and real estate appraisals and
environmental update inspections as may hereafter be reasonably required by the
Agent, shall be additional Liabilities of the Borrower
-53-
to the Banks, payable on demand or otherwise repaid as provided herein, and
secured by the Collateral.
6.7 Borrower's Liability Insurance. Each of the Borrower and its
------------------------------
Subsidiaries shall, at its expense, keep and maintain such public liability and
third party property damage insurance in such amounts and with such deductibles
as is reasonably acceptable to the Agent, and shall deliver to the Agent the
original (or a certified copy) of each policy of insurance and evidence of the
payment of all premiums therefor. Such policies of insurance shall contain an
endorsement providing that the insurance company will give the Agent at least
thirty (30) days prior written notice before any such policy or policies of
insurance shall be altered or cancelled.
6.8 Borrower's Insurance. Each of the Borrower and its Subsidiaries
--------------------
shall, at its expense, keep and maintain its assets insured against loss or
damage by fire, theft, explosion, spoilage and all other hazards and risks
ordinarily insured against by other owners or users of such properties in
similar businesses in an amount at least equal to the full insurable value of
all such property which coverages shall include, without limitation, liquor
liability coverages. All such policies of insurance shall be in form and
substance reasonably satisfactory to the Agent and issued by an insurance
company reasonably satisfactory to the Agent, and shall have deductibles not
exceeding Twenty-Five Thousand and 00/100 Dollars ($25,000.00). Each of the
Borrower and its Subsidiaries shall deliver to the Agent the original (or a
certified copy) of each policy of insurance and evidence of payment of all
premiums therefor. All of the policies of insurance pertaining to the
Borrower's or any such Subsidiary's assets shall contain an endorsement, in form
and substance reasonably satisfactory to the Agent, showing all losses payable
to the Agent as provided below in this subsection 6.8; provided, that such
--------------
policies may show loss payees in addition to the Agent in connection with the
lease or purchase money financing of equipment or real estate by the Borrower or
a Subsidiary, if such other loss payees are reasonably acceptable to the Agent
(and the Agent has approved same in writing) and if such other loss payees have
no interest in the proceeds of any loss relating to the Collateral, other than
the specific assets that are the subject of such lease or purchase money
financing. Such endorsement, or an independent instrument furnished to the
Agent, shall provide that such insurance company will give the Agent at least
thirty (30) days prior written notice before any such policy or policies of
insurance shall be altered or cancelled and that no act or default of the
Borrower or any of its Subsidiaries shall affect the right of the Agent to
recover under such policy or policies of insurance in case of loss or damage.
All insurance policies referred to in this subsection 6.8 shall name the Agent
--------------
as an additional loss payee with respect to all claims relating to the
Collateral resulting in payments of One Hundred Thousand and 00/100
($100,000.00) or less, and as additional insured and sole loss payee in respect
of each claim relating to the Collateral resulting in a payment under any such
insurance policy exceeding One Hundred Thousand and 00/100 Dollars
($100,000.00). Provided that no Default or Event of Default then exists, the
Agent agrees promptly upon its receipt thereof, to pay over to the Borrower the
proceeds of such payment to enable the Borrower to repair, restore, or replace
the Collateral subject to such claim. To the extent that the Borrower elects
not to repair, restore or replace such Collateral, any such proceeds in
-54-
excess of One Hundred Thousand and 00/100 ($100,000.00) shall be deposited with
the Agent, which deposit shall be invested by the Agent in Cash Equivalent
Investments and shall be held by the Agent as additional Collateral for the
Liabilities. If the Borrower certifies to the Agent, on or prior to thirty (30)
days after receipt by the Borrower or any of its Subsidiaries of such insurance
proceeds that it intends to use such insurance proceeds to construct replacement
property or repair the damaged property within three hundred sixty (360) days of
the receipt of such insurance proceeds, the Agent shall, if no Default has
occurred and is then continuing, release to the Borrower that part of the
insurance proceeds to be used for the aforementioned purposes. To the extent
that the Borrower does not provide such certification, all of such insurance
proceeds shall be applied to the prepayment of the Liabilities as set forth
below. In addition, if any of the insurance proceeds previously released are
not in fact applied in the manner specified in such certification, the Borrower
shall pay to the Agent, on which the date which is three hundred sixty-one (361)
days after the receipt of such insurance proceeds by the Borrower or any of its
Subsidiaries, an amount equal to the insurance proceeds released by the Agent to
the Borrower pursuant to this subsection 6.8 (less amounts actually spent for
--------------
the purposes specified in such certification) and such amount shall be applied
to the prepayment of the Liabilities. All such proceeds at any time on deposit
with the Agent shall be fully drawn down under this subsection 6.8 before the
--------------
Agent is required to make any new Guidance Loan. In addition, such proceeds may
also be used, in the Agent's sole discretion, to meet the Borrower's obligation
to reimburse the Banks as a result of any draw under any Letter of Credit. The
Agent shall apply any such proceeds not so used first to amounts due under the
Guidance Loans, and if any proceeds should remain thereafter, to the reduction
of the Liabilities in such manner as the Agent shall determine. If a Default or
an Event of Default exists, the Agent shall (a) hold the proceeds of such
payment as Collateral for the Loans until such Default or Event of Default shall
no longer exist and then, subject to the foregoing provisions of this subsection
----------
6.8, pay over the same to the Borrower for the repair, restoration, or
- ---
replacement of the Collateral subject to such claim. The Borrower hereby
directs all insurers under such policies of insurance to pay all proceeds of
insurance policies directly to the Agent as and to the extent set forth above.
The Borrower irrevocably makes, constitutes and appoints the Agent (and all
officers, employees or agents designated by the Agent) as the Borrower's true
and lawful attorney-in-fact for the purpose, after and during the continuance of
an Event of Default, of making, settling and adjusting claims under all such
policies of insurance, endorsing the name of the Borrower or any of its
Subsidiaries on any check, draft, instrument or other item of payment received
by the Borrower, or the Agent pursuant to any such policies of insurance and
making all determinations and decisions with respect to such policies of
insurance. If the Borrower or any of its Subsidiaries, at any time or times
hereafter, shall fail to obtain or maintain any of the policies of insurance
required above or to pay any premium in whole or in part relating thereto, then
the Agent, without waiving or releasing any obligation or default by the
Borrower hereunder, may at any time or times thereafter (but shall be under no
obligation to do so) obtain and maintain such policies of insurance and pay such
premiums and take any other action with respect thereto which the Agent deems
advisable, and the amount so expended, together with interest thereon at the
rate applicable to the Guidance Loans, shall be part of the Liabilities, payable
on demand or otherwise repaid as provided
-55-
herein and secured by the Collateral. Notwithstanding anything in the
subsection 6.8 to the contrary, in the event insurance proceeds result from a
- --------------
casualty to property used in connection with a Facility Agreement, and such
Facility Agreement is no longer in force as of the date of payment of insurance
proceeds by the insurer or before such proceeds are used to repair, replace or
restore such property, then the full amount of such proceeds (up to the
outstanding amount of any Guidance Loan related to such Facility Agreement),
shall be paid to the Agent to retire such Guidance Loan, before the application
of the other provisions of this subsection 6.8.
--------------
6.9 Pension Plans. The Borrower shall, and shall (to the extent within
-------------
the control of the Borrower) cause each ERISA Affiliate to, (a) make
contributions to all of the Plans (including any Multiemployer Plans) in a
timely manner and in a sufficient amount to comply with the requirements of
ERISA; (b) comply with all material requirements of ERISA and the Tax Code which
relate to such Plans and Multiemployer Plans, the failure to comply with which
would if applicable to the Borrower or any ERISA Affiliate, have a Material
Adverse Effect on the Borrower; (c) notify the Agent immediately upon receipt by
the Borrower of any notice of the institution of any proceeding or other action
which may result in the termination of any Plans or Multiemployer Plans; and (d)
immediately notify the Agent of the occurrence of an ERISA Termination Event.
Neither the Borrower nor any of its Subsidiaries shall fail to make any payments
to any Multiemployer Plan that the Borrower or any ERISA Affiliate of the
Borrower or any of its Subsidiaries under ERISA may be required to make under
any agreement relating to any Multiemployer Plan or any Law pertaining thereto
except any payments being contested in good faith with respect to which the
Borrower has established adequate reserves.
6.10 Notice of Suit. The Borrower shall, as soon as possible, and in any
--------------
event within five (5) Business Days after the Borrower learns of the following,
give written notice to the Agent of any proceeding(s) being instituted or
threatened to be instituted by or against the Borrower or, any of its
Subsidiaries in any federal, state, local or foreign court or before any
arbitration or mediation panel, commission or other regulatory body (federal,
state, local or foreign); provided, that the Borrower shall not be required to
notify the Agent of any such proceeding instituted or threatened to be
instituted unless such proceeding could, individually, or when aggregated with
other outstanding proceedings, if adversely determined, have a Material Adverse
Effect on the Borrower and its Subsidiaries.
6.11 Supervening Changes in Law. If, at any time or times hereafter,
--------------------------
there shall become effective any amendment to, deletion from or revision,
modification or other change in any Law, or the application or enforcement
thereof, materially and negatively affecting the Banks' extension of credit
described in this Agreement or the selling of interests or participations
therein or increasing the Banks' costs associated with the transactions
contemplated by this Agreement and the other Loan Documents, (a) if and to the
extent clause (b) of this subsection 6.11 is not applicable, then the Borrower
----------------
shall indemnify and hold the Agent and the Banks harmless from and against any
and all obligations, fees, liabilities, losses, penalties, costs, expenses and
damages, of every kind and nature, imposed upon or incurred
-56-
by the Agent or the Banks by reason of such amendment, deletion, revision,
modification, or other change, and (b), to the extent such amendment to,
deletion from or revision, modification or other change in Law, or the
application or enforcement thereof, requires that the Banks no longer carry or
hold the Loans, Letters of Credit, or any portion thereof, then the Borrower
shall immediately pay to the Banks the then outstanding balance of the
Liabilities, and hold the Agent and the Banks harmless from and against any and
all obligations, fees, liabilities, losses, penalties, costs, expenses and
damages, of every kind and nature, imposed upon or incurred by the Borrower by
reason of the Banks' failure or inability to comply with the terms of this
Agreement or any of the other Loan Documents. The Borrower's obligations under
this subsection 6.11 shall survive repayment of the Liabilities and termination
---------------
of this Agreement and the other Loan Documents.
6.12 Environmental Notices. The Borrower and the Subsidiaries shall
---------------------
promptly notify and furnish the Agent with a copy of any and all Environmental
Notices which would result in a Material Adverse Effect and any Environmental
Notice from any governmental agency or authority which are received by the
Borrower or any Subsidiary. The Borrower shall take prompt and appropriate
action in response to any and all such Environmental Notices and shall promptly
furnish the Agent with a description of the Borrower's response thereto.
6.13 Use of the Proceeds. Proceeds of the Loans shall be used solely for
-------------------
the business purposes of the Borrower, consistent with the terms and provisions
of this Agreement and the other Loan Documents.
6.14 Depository Accounts. Except to the extent otherwise permitted by the
-------------------
Agent in writing, the Borrower shall maintain its primary depository and
operating accounts with UST.
6.15 Collateral Assignments of Licenses and Management Agreements. The
------------------------------------------------------------
Borrower shall notify the Agent promptly upon the execution of any Facility
Agreement and shall provide such information in respect thereof as the Agent
shall reasonably request.
6.16 Application of Net Contract Proceeds. If, in any calendar year, after
------------------------------------
giving effect to the provision contained in the last sentence of this subsection
----------
6.16, the Borrower or any Subsidiary receives Net Contract Proceeds and such Net
- ----
Contract Proceeds are in the amount of One Million and 00/100 Dollars
($1,000,000.00) or more, the Borrower or such Subsidiary shall apply the amount
of Net Contract Proceeds toward the acquisition or payment of Project Costs
required by a New Project or Contract Extension (as such terms are defined in
subsection 4.5 above). Pending such application, the Borrower or such
- --------------
Subsidiary shall immediately deposit the full amount of such Net Contract
Proceeds with the Agent, which deposit shall be invested by the Agent in Cash
Equivalent Investments and shall be held by the Agent as additional Collateral
for the Liabilities. The Borrower shall have the right to draw down all or part
of such Net Contract Proceeds for the same purposes and subject to the same
terms and conditions as are applicable to Guidance Loans under subsection 2.2.
--------------
All Net Contract Proceeds at any time on deposit with the Agent shall be fully
drawn down under this
-57-
subsection 6.16 before the Borrower shall make any request for any Guidance
- ---------------
Loan. In addition, such proceeds may also be used, in the Agent's sole
discretion, to meet the Borrower's obligations to reimburse the Banks as a
result of any draw under any Letter of Credit. If any such Net Contract
Proceeds are not drawn down prior to the earlier of the first anniversary of the
date on which they were deposited with the Agent or the Termination Date, the
Agent shall apply such Net Contract Proceeds first to prepayment of the Guidance
Loans and, second, to the prepayment of Working Capital Loans. If any proceeds
should remain after application of the two previous sentences, such proceeds
shall be used to reduce the Liabilities in such manner as the Agent determines
in its sole discretion. The Borrower or any Subsidiary shall be entitled to
retain and utilize in its discretion Net Contract Proceeds less than One Million
and 00/100 Dollars ($1,000,000.00) in any calendar year which may be received at
any time by such Person.
6.17 Covenants in Subordinated Debt Documents. The Borrower and each of
----------------------------------------
its Subsidiaries hereby covenant to perform, comply with and be bound by for the
benefit of the Banks at all times all of its agreements, covenants, and
obligations in the Subordinated Debt Documents.
7. NEGATIVE COVENANTS.
------------------
Each of the Borrower and its Subsidiaries hereby covenants and agrees that
so long as any Liabilities remain outstanding, and (even if there shall be no
Liabilities outstanding) so long as this Agreement remains in effect:
7.1 Encumbrances. The Borrower will not create, incur, assume or suffer
------------
to exist or permit any of its Subsidiaries to create, incur, assume or suffer to
exist any Lien or other encumbrance of any nature whatsoever on any of its
assets, including without limitation the Collateral, other than: (a) Liens
securing the payment of taxes, either not yet due or the validity of which is
being contested in good faith by appropriate proceedings, and as to which the
Borrower or the applicable Subsidiary shall, if appropriate under GAAP, have set
aside on its books and records adequate reserves; provided that such contest
-------------
does not have a Material Adverse Effect on the ability of the Borrower to pay
any of the Liabilities or the priority or value of the Agent's Lien on the
Collateral; (b) deposits under worker's compensation, unemployment insurance,
social security and other similar Laws, or to secure the performance of bids,
tenders or contracts (other than for the repayment of borrowed money) or to
secure indemnity, performance or other similar bonds for the performance of
bids, tenders or contracts (other than for the repayment of borrowed money) or
to secure statutory obligations or surety or appeal bonds, or to secure
indemnity, performance or other similar bonds in the ordinary course of
business, and Liens securing judgments that have not resulted in an Event of
Default under clause (d) of subsection 8.1 hereof; (c) statutory Liens of
--------------
landlords, carriers, warehousemen, mechanics, materialmen or suppliers incurred
in the ordinary course of business for sums not yet delinquent; (d) Liens in
favor of the Agent and the Banks; (e) purchase money security interests arising
in connection with Equipment or real estate purchases or lease financings made
as permitted by this Agreement, not to exceed an
-58-
aggregate of One Million and 00/100 Dollars ($1,000,000.00); (f) Liens described
on Schedule 7.1; (g) judgment Liens in existence less than thirty (30) days
------------
after the entry thereof or with respect to which execution has been stayed or
the payment of which is covered in full (subject to a customary deductible) by
insurance; and (h) Liens other than those permitted in subsections 7.1(a)-(g)
----------------------
securing obligations in an aggregate outstanding amount of no more than Two
Hundred Fifty Thousand and 00/100 Dollars ($250,000.00).
7.2 Indebtedness. The Borrower shall not, and shall not permit any
------------
Subsidiary to, incur, create, assume, become or be liable in any manner with
respect to, or permit to exist, any Indebtedness, except: (a) the Liabilities;
(b) trade obligations and normal accruals in the ordinary course of business not
yet due and payable, or with respect to which the Borrower or the applicable
Subsidiary is contesting in good faith the amount or validity thereof by
appropriate proceedings, and then only to the extent that the Borrower or the
applicable Subsidiary has set aside on its books adequate reserves therefor, in
accordance with GAAP; (c) purchase money Indebtedness incurred to finance the
purchase or lease of Equipment, subject to an aggregate limit on such
Indebtedness outstanding of One Million and 00/100 Dollars ($1,000,000.00); (d)
Indebtedness of the Borrower to any Subsidiary or of any Subsidiary to the
Borrower or any other Subsidiary; (e) unsecured guaranties of the Borrower of
the Indebtedness for borrowed money incurred by either Special Texas Corporation
for the purpose of obtaining or maintaining any concessions or food services
management agreement or other recreational food and beverage services contract
to be performed entirely within the State of Texas, provided the Borrower
continues to act as manager under the Texas Management Agreement and the total
amount of such guaranties shall not exceed Two Hundred Thousand and 00/100
Dollars ($200,000.00) in the aggregate; (f) Indebtedness of the Borrower or a
Subsidiary in respect of performance, bid or similar bonds related to Facility
Agreements, in a principal amount not to exceed Ten Million and 00/100 Dollars
($10,000,000.00) in the aggregate at any time; (g) other Indebtedness incurred
after the Closing Date in an aggregate principal amount outstanding at any time
not to exceed One Million and 00/100 Dollars ($1,000,000.00); and (h)
Indebtedness existing on the Closing Date and reflected on Schedule 7.2.
------------
7.3 Mergers and Consolidations. Except as allowed under subsection 7.4,
-------------------------- --------------
each of the Borrower and its Subsidiaries shall not enter into any transaction
of merger or consolidation, or liquidate, wind up or dissolve (or suffer any
liquidation or dissolution), or convey, sell, lease, transfer or otherwise
dispose of, in one transaction or a series of transactions, all or substantially
all of its business, property or tangible or intangible assets, whether now
owned or hereafter acquired, except that any Subsidiary may merge or consolidate
with, or convey, sell, lease, transfer or dispose of assets to, the Borrower or
another Subsidiary and thereafter dissolve (provided that in the case of a
merger or consolidation involving the Borrower, the Borrower is the surviving
corporation); and except that any Subsidiary of the Borrower may merge or
consolidate with any other Person with which the Borrower is permitted to merge
or consolidate (provided that the Subsidiary is the surviving corporation).
-59-
7.4 Acquisitions. Neither the Borrower nor any of its Subsidiaries shall
------------
acquire any stock of any corporation or ownership interest in any other entity,
or acquire all or substantially all of the assets of, or such of the assets as
would permit the transferee to continue any one or more integral business
operations of, any Person. Notwithstanding the preceding sentence to the
contrary, (i) the Borrower or a Subsidiary may acquire stock of a corporation
which, as a result of such acquisition, becomes a Subsidiary (or if any
applicable, an Offshore Subsidiary) provided (a) that such Subsidiary (or if any
applicable, such Offshore Subsidiary) becomes a Guarantor of all of the
Liabilities; (b) such corporation is sufficiently capitalized and (c) if the
total valuation of such corporation (based on stock price and face amount of
issued and assumed debt) is Four Million and 00/100 Dollars ($4,000,000.00) or
more, the approval of the Designated Banks is obtained, and (2) the Borrower or
a Subsidiary may acquire assets of any Person, as referred to above, provided
that if the total value of the assets so acquired (based on purchase price and
face amount of issued and assumed debt) is Four Million and 00/100 Dollars
($4,000,000.00) or more, the approval of the Designated Banks is obtained.
The parties hereto acknowledge and agree that (a) Fine Host International
is a party to an agreement with F&B International Company Limited, pursuant to
which, among other things, Fine Host International may acquire an interest in
Fine Host Asia, a joint venture that may be organized in accordance with the
laws of Thailand (Queen Sirikit National Convention Center)(said joint venture
is hereinafter referred to as "Fine Host Asia"), and (b) Fine Host Asia shall
not, at any time, become a Subsidiary unless and until the Borrower has caused
Fine Host Asia to comply with all of the applicable provisions contained herein,
including without limitations, the provisions of subsection 3.1 above.
--------------
7.5 Disposal of Property. Neither the Borrower nor any of its
--------------------
Subsidiaries shall sell, lease, transfer or otherwise dispose of any of its
properties, assets and rights to any Person (other than the Borrower or a
Subsidiary) except: (a) sales of Inventory in the ordinary course of business;
(b) sales of property being replaced in the ordinary course of business by other
property with a fair market value equal to or greater than the property being so
replaced; (c) sales or disposal of obsolete or unused Equipment having a value
of less than Twenty-Five Thousand and 00/100 Dollars ($25,000.00) per fiscal
year of the Borrower; (d) subject to subsection 6.16, sales or transfers
---------------
pursuant to the termination of a Facility Agreement which will not result in any
extraordinary gains or losses pursuant to GAAP (including the prepayment of any
Note Receivable or receipt of any Net Contract Proceeds, subject to the terms of
the Assignment of Notes Receivable and Net Contract Proceeds executed and
delivered to the Agent); or (e) sales or disposal of Equipment having a net book
value as of such sale or disposition aggregating not more than Five Hundred
Thousand and 00/100 ($500,000.00) since the Closing Date. If any of the
Equipment is sold, transferred or otherwise disposed of as herein provided, and
such sale, transfer or disposition is made in connection with the purchase by
the Borrower of replacement Equipment, the Borrower shall use the proceeds of
such sale, transfer or disposition solely to finance the purchase by the
Borrower of such replacement Equipment and shall deliver to the Agent written
evidence of the use of the proceeds for such purchase. All replacement
Equipment purchased by the
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Borrower or any of its Subsidiaries shall be free and clear of all Liens, except
for those of the Agent and except for purchase money security interests arising
out of such purchases to the extent permitted under subsection 7.1.
--------------
7.6 Investments or Loans. The Borrower will not, and will not permit any
--------------------
of its Subsidiaries to, make, incur, assume or suffer to exist any Investment in
any other Person, except:
(a) Investments existing on the Closing Date and identified in
Schedule 7.6 ("Ongoing Investments");
------------
(b) Cash Equivalent Investments;
(c) Without duplication, Investments permitted as Indebtedness
pursuant to subsection 7.2;
--------------
(d) in the ordinary course of business, Investments by the Borrower
in any of its Subsidiaries, or by any such Subsidiary in any of its
Subsidiaries, by way of contributions to capital or loans or advances; and
(e) other Investments made or committed to be made in any fiscal year
of the Borrower pursuant to or necessary (in the reasonable opinion of the
Borrower) in connection with any Facility Agreement which do not aggregate
in excess of the amount of Nineteen Million and 00/100 Dollars
($19,000,000.00) for the fiscal year ending December 25, 1996 and for each
fiscal year thereafter;
provided, however, that
- -------- -------
(i) to the extent Investments are made or committed to be made in any
fiscal year of the Borrower in an aggregate amount less than the maximum amount
permitted for such fiscal year as provided above in this clause (e), the
Investments which the Borrower or its Subsidiaries may make or commit to make in
the next following fiscal year of the Borrower shall be increased by Fifty
Percent (50%) of the amount of the permitted Investments not so made or
committed to be made in such immediately preceding fiscal year (it being agreed
that such Investments may not be carried forward to any further succeeding
fiscal years of the Borrower).
(ii) no portion of any Investments so carried forward in any fiscal year of
the Borrower shall be used until the entire amount of Investments permitted to
be made or committed to be made in such fiscal year as provided above in this
clause (e) shall have been used;
(iii) any Capital Expenditures made pursuant to subsection 7.8 shall
--------------
reduce, dollar-for-dollar, any Investments permitted to be made pursuant to this
clause (e) (it being agreed
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that such reduction shall be applied first against the Investments permitted to
be made or committed to be made as provided above in this clause (e) before
reducing any carry-forward amount); and
(iv) the amount of Investments permitted to be made as provided above in
this clause (e) shall not be reduced by the amount of any Net Contract Proceeds
which the Borrower has notified the Agent in writing prior to the application
thereof, are being applied pursuant to this clause (e); and
----------
provided further, however, that no Investment otherwise permitted by clause (d)
- -------- ------- ------- ----------
or (e) shall be permitted to be made if, immediately before or after giving
---
effect thereto, any Default shall have occurred and be continuing.
7.7 Guaranties. Neither the Borrower nor any of its Subsidiaries shall
----------
guarantee, endorse or otherwise in any way become or be responsible for
obligations of any other Person (including without limitation any officer,
director, employee or stockholder of the Borrower or such Subsidiary, but
excluding the Borrower and its Subsidiaries), whether by agreement to purchase
the Indebtedness of any other Person or through the purchase of goods, supplies
or services, or maintenance of working capital or other balance sheet covenants
or conditions, or by way of stock purchase, capital contribution, advance or
loan for the purpose of paying or discharging any Indebtedness or obligation of
such other Person or otherwise, except (a) endorsements of negotiable
instruments for collection in the ordinary course of business, (b) performance
bonds given in connection with the entry by the Borrower or a Subsidiary into a
Facility Agreement, bonds necessary to submit bids for a Facility Agreement, or
similar bonds or agreements, and (c) guaranties or bonds by the Borrower or any
of its Subsidiaries required by any Person other than the Borrower or any
Affiliate in connection with obtaining or maintaining a License necessary for a
Facility Agreement. All bonds and agreements encompassed under clauses (b) and
(c) of the preceding sentence as of the date hereof are listed on Schedule 7.7.
------------
Nothing in this subsection 7.7 is intended to limit the exceptions to
--------------
Indebtedness, Investments, or Loans which are permitted under subsections 7.2
---------------
and 7.6.
---
7.8 Capital Expenditure Limitations. The Borrower will not, and will not
-------------------------------
permit any of its Subsidiaries to, make, or commit to make, Capital Expenditures
in any fiscal year of the Borrower, except in connection with Guidance Loans and
except for Capital Expenditures which do not aggregate in excess of the amount
of Nineteen Million and 00/100 Dollars ($19,000,000.00) for the fiscal year
ending December 25, 1996 and for each fiscal year thereafter;
provided, however, that
-------- -------
(i) to the extent Capital Expenditures are made or committed to be
made in any fiscal year of the Borrower in an aggregate amount less than
the maximum amount permitted for such fiscal year as provided above, the
Capital Expenditures which the Borrower or its Subsidiaries may make or
commit to make in the next following fiscal
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year of the Borrower shall be increased by Fifty Percent (50%) of the
amount of the permitted Capital Expenditures not so made or committed to be
made in such immediately preceding fiscal year (it being agreed that such
Capital Expenditures may not be carried forward to any further succeeding
fiscal years of the Borrower);
(ii) no portion of any Capital Expenditures so carried forward in any
fiscal year of the Borrower shall be used until the entire amount of
Capital Expenditures permitted to be made or committed to be made in such
fiscal year as provided above shall have been used; and
(iii) any Investments made pursuant to clause (e) of subsection
---------- ----------
7.6 shall reduce, dollar-for-dollar, any Capital Expenditures permitted to
---
be made pursuant to this subsection 7.8 (it being agreed that such
--------------
reduction shall be applied first against the Capital Expenditures permitted
to be made or committed to be made as provided above before reducing any
carry-forward amount); and
(iv) the amount of Capital Expenditures permitted to be made as
provided above shall not be reduced by the amount of any Net Contract
Proceeds which the Borrower has notified the Agent in writing, prior to the
application thereof, are being applied pursuant to this subsection 7.8.
--------------
7.9 Distributions. Neither the Borrower nor any of its Subsidiaries shall
-------------
pay any dividends (other than stock dividends, provided that stock dividends
paid with respect to Stock which is subject to Pledge Agreements to the Agent
shall be subject to the terms of such Pledge Agreement) or distributions, either
in cash or in kind, on any class of its capital stock, nor make any distribution
on account of its stock, nor redeem, purchase or otherwise acquire, directly or
indirectly, any of its stock; provided, however, any Subsidiary shall be
-------- -------
permitted to make distributions or pay dividends to the Borrower or to its
immediate parent.
7.10 Compensation. None of the Borrower or any of its Subsidiaries shall
------------
pay compensation, directly or indirectly, whether in cash or in property
(including fringe benefits, and whether in respect of stock ownership,
consulting or other services or for any other reason whatsoever), to any
Affiliate of the Borrower except as set forth in Schedule 7.10 or as disclosed
-------------
in the Registration Statement and except that the provisions of this subsection
----------
7.10 shall not apply to reasonable payments or employee benefits made to
- ----
employees or officers of the Borrower or any Subsidiary, as determined in good
faith by the Board of Directors of the Borrower or, in the case of directors, to
reasonable and customary directors' fees, in each case in the ordinary course of
business.
7.11 Transactions with Affiliates. Other than as set forth on Schedule
---------------------------- --------
7.11, and except as permitted by subsection 7.10 or as disclosed in the
- ---- ---------------
Registration Statement neither the Borrower nor any of its Subsidiaries shall
loan, contribute or otherwise transfer any cash or property to any Affiliate of
the Borrower or any of its Subsidiaries or enter into any transaction, including
without limitation the purchase, sale or exchange of property or the
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rendering of any service to any Affiliate of the Borrower, or any Affiliate of
such Subsidiary, except that transactions with Affiliates of the Borrower which
are at arm's length, are for fair value and are in the ordinary course of the
Borrower's and such Affiliate's business shall be permitted.
7.12 Prepayment of Other Liabilities. The Borrower shall not directly or
-------------------------------
indirectly prepay, purchase, redeem, retire, defease or otherwise acquire, or
make any optional payment on account of any principal of or any interest on or
premium payable in connection with the optional repayment, redemption or
retirement of, any of its Indebtedness (including but not limited to
Subordinated Debt) except for (i) the Liabilities; (ii) any obligations related
to a Facility Agreement which results in the prepayment in full of the
corresponding and related Guidance Loan; and (iii) mandatory prepayments and
other scheduled payments required under any Indebtedness that is permitted under
this Agreement.
7.13 Modification of Indebtedness. The Borrower will not permit the
----------------------------
modification or waiver of or any change in any provisions of any agreement
relating to Indebtedness for borrowed money of the Borrower, including, without
the consent of the Banks, the negotiation or renegotiation of any provisions of
any agreement with the holders of the Subordinated Debt, if in any such case,
such modification or waiver or change (taken as a whole) would be adverse to the
Borrower's interests or the rights and interests of the Agent and the Banks.
7.14 Amendment of Certificate or Articles of Incorporation or By-Laws.
----------------------------------------------------------------
Neither the Borrower nor any of its Subsidiaries shall amend its Certificate or
Articles of Incorporation or organization, or By-Laws, change its fiscal year-
end, or adopt or alter any preferred stock terms or preferences if such
amendment, adoption, or alteration would (i) adversely affect the ability of the
Borrower and its Subsidiaries, taken as a whole, to repay the Liabilities; (ii)
result in a Material Adverse Change to the value of the Collateral or the Banks'
ability to enforce its rights and remedies under this Agreement or any other
Loan Document; or (iii) result in a Material Adverse Change to the Borrower.
7.15 ERISA Termination Event. The Borrower shall not permit any ERISA
-----------------------
Termination Event to occur, or suffer any ERISA Termination Event to exist, if,
in either case, such ERISA Termination Event could have a Material Adverse
Effect on the Borrower.
7.16 Subordinated Debt Documents. Neither the Borrower nor any of its
---------------------------
Subsidiaries shall violate or permit violation of any covenant in the
Subordinated Debt Documents.
7.17 CFM Notes. Neither the Borrower nor any of its Subsidiaries will
---------
consent under Section 9 of the CFM Notes to the sale, assignment, pledge,
hypothecation, encumbrance or other transfer or disposition of all or any
portion of the CFM Notes by the holders thereof.
8. DEFAULT, RIGHTS AND REMEDIES OF THE AGENT.
-----------------------------------------
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8.1 "Event of Default" shall mean the occurrence or existence of any one
or more of the following events:
(a) the Borrower fails to pay any of the Liabilities when such
Liabilities are due or are declared due, whether at stated maturity, by
acceleration or otherwise, within five (5) days of the date due;
(b) the Borrower, any of its Subsidiaries or any Guarantor fails or
neglects to perform, keep or observe any of the covenants, conditions,
promises or agreements contained in this Agreement or in any of the other
Loan Documents within ten (10) days after the date of notice by the Agent
of the failure to perform, keep, or observe such covenant, condition,
promise, or agreement (provided that there shall be no such ten (10) day
grace period for failure to comply with any covenant in Section 7 hereof),
---------
or any of the Loan Documents are unenforceable in whole or in part in
accordance with their terms;
(c) any warranty or representation now or hereafter made by the
Borrower, any of its Subsidiaries, or any Guarantor pursuant to this
Agreement or any of the other Loan Documents is untrue, incorrect or
incomplete in any material respect, or any schedule, certificate,
statement, report, financial data, notice, or writing furnished at any time
by the Borrower, any of its Subsidiaries, or any Guarantor to any Bank
pursuant to or in connection with the Loans is untrue, incorrect or
incomplete in any material respect, on the date as of which the facts set
forth therein are stated or certified or restated or recertified;
(d) judgments or orders requiring aggregate payments in excess of
Five Hundred Thousand and 00/100 Dollars ($500,000.00) shall be rendered
against the Borrower or any of its Subsidiaries, and such judgments or
orders shall remain unsatisfied or undischarged and in effect for thirty
(30) consecutive days without a stay of enforcement or execution, provided
that this clause (d) shall not apply to the extent that any judgment for
which the Borrower or such Subsidiary, as applicable, is insured and to the
extent to which the insurer has admitted, in writing, liability for the
amount thereof;
(e) a notice of Lien, levy or assessment is filed or recorded with
respect to all or a material part of the Collateral by the United States,
or any department, agency or instrumentality thereof, or by any state,
county, municipality or other governmental agency, or any taxes or debts
owing at any time or times hereafter to any one or more of them become a
Lien, upon all or a material part of the Collateral, provided that this
clause (e) shall not apply to any Liens, levies, or assessments which are
being contested in good faith (provided the Borrower has complied with the
provisions of clauses (a) and (b) of subsection 6.5);
--------------
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(f) all or any material part of the Collateral is attached, seized,
subjected to a writ or distress warrant, or is levied upon, or comes within
the possession of any judgment creditor, receiver, trustee, custodian or
assignee for the benefit of creditors;
(g) a proceeding under any Insolvency Law is filed against the
Borrower or any of its Subsidiaries and such proceeding is not dismissed
within sixty (60) days of the date of its filing, or a proceeding under any
Law is filed by the Borrower or any of its Subsidiaries, or the Borrower or
any of its Subsidiaries files an answer admitting the material allegations
of a petition filed against it, or the Borrower or any of its Subsidiaries
makes an assignment for the benefit of creditors, or the Borrower or any of
its Subsidiaries takes any corporate or other action to authorize any of
the foregoing;
(h) the Borrower or any of its Subsidiaries voluntarily or
involuntarily dissolves or is dissolved except as permitted by subsection
----------
7.3, or terminates or is terminated;
---
(i) the Borrower or any of its Subsidiaries becomes Insolvent, or
admits in writing its inability, or fails generally, to pay its debts as
they become due;
(j) the Borrower or any of its Subsidiaries is enjoined, restrained,
or in any way prevented from conducting all or any material part of its
business affairs;
(k) a material default by the Borrower or any of its Subsidiaries,
shall occur (and any applicable cure period shall have expired) under any
Facility Agreement or related agreement, document or instrument, whether
heretofore, now or hereafter existing between the Borrower, such Subsidiary
or any other Person unless, within five (5) Business Days of such default,
the Borrower provides to the Agent a certificate (together with any other
documents reasonably required by the Agent) from the chief financial
officer or president of the Borrower that the Borrower and its
Subsidiaries, taken as a whole, notwithstanding termination of such
Facility Agreement or related agreement, document, or instrument, shall
continue to meet, and shall in the foreseeable future continue to meet, the
financial covenants in subsection 6.1;
--------------
(l) the Borrower or any of its Subsidiaries shall default in making
any payment when due, whether at stated maturity, by acceleration or
otherwise, on any obligation for borrowed money in an aggregate amount in
excess of Five Hundred Fifty Thousand and 00/100 Dollars ($550,000.00) or
the holder of any such obligation shall become entitled to cause such
obligation to become due prior to its stated date of maturity;
(m) there shall be a Change in Control of the Borrower;
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(n) there shall occur a Material Adverse Change affecting the
Borrower, which could reasonably be expected to have a Material and Adverse
Effect on the value of the Collateral or the ability of the Borrower to
repay the Liabilities;
(o) there shall occur any loss, theft, substantial damage or
destruction of any item or items of Collateral ("Loss") if (x) the amount
of such Loss with respect to which an insurer has not admitted, in writing,
liability within a reasonable time (as reasonably determined by the Agent)
after the occurrence of such Loss, exceeds One Million and 00/100 Dollars
($1,000,000.00) in the aggregate, (y) any such Loss results in a material
interruption of the business of the Borrower and its Subsidiaries, or (z)
the aggregate of deductibles for Losses exceeds One Million and 00/100
Dollars ($1,000,000.00);
(p) the Borrower or any of its Subsidiaries shall be convicted of any
crime for which forfeiture of a material amount of its property, or payment
of a material penalty, will be required, or for which a license may be
revoked, terminated, or suspended, and such revocation, termination, or
suspension would result in a Material Adverse Effect on the Borrower;
(q) any Guaranty shall at any time after its execution and delivery
and for any reason cease to be in full force and effect or shall be
declared null and void;
(r) any Security Agreement shall at any time after its execution and
delivery and for any reason cease: (A) to create a valid and perfected
first priority security interest in and to a material portion of the
Collateral covered by such Security Agreement; or (B) to be in full force
and effect or shall be declared null and void; or
(s) any Pledge Agreement shall at any time after its execution and
delivery and for any reason cease: (A) to create a valid and perfected
first priority security interest in and to the property purported to be
subject to such Pledge Agreement; or (B) to be in full force and effect or
shall be declared null and void.
8.2 Termination of Obligation to Make Loans and Acceleration. Upon the
--------------------------------------------------------
occurrence of an Event of Default referred to in subsection 8.1(g), all of the
-----------------
Liabilities shall automatically, without notice of any kind, be immediately due
and payable and the Agent shall have no further obligation to make Loans
hereunder. Upon the occurrence of any other Event of Default, the Banks shall
have no further obligation to make Loans hereunder and any or all of the
Liabilities may, at the option of the Agent, acting in accordance with the
provisions of subsection 9.2(h), and without presentment, demand, protest or
-----------------
notice of any kind, be declared, and thereupon shall become, immediately due and
payable, provided that the Agent shall give notice of such acceleration to the
Borrower.
8.3 Rights and Remedies Generally. Upon the occurrence of an Event of
-----------------------------
Default, the Agent shall have, in addition to any other rights and remedies
contained in this Agreement
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or in any of the other Loan Documents, all of the rights and remedies of a
secured party under the Code or other applicable Laws, all of which rights and
remedies shall be cumulative and non-exclusive, to the extent permitted by Law.
The Agent shall further have as a matter of right and without notice to the
Borrower or any of its Subsidiaries, unless otherwise required by applicable
law, and without regard to the adequacy or inadequacy of any Collateral as
security for the Liabilities or the interest of the Borrower or any of its
Subsidiaries therein, the right to apply to any court of competent jurisdiction
to appoint a receiver or receivers of the Borrower or any of its Subsidiaries of
all or any portion of the property of the Borrower or any of its Subsidiaries
comprising the Collateral and to have such receiver or receivers appointed, and
each of the Borrower and its Subsidiaries hereby irrevocably consents to such
appointment and waives notice of any application therefor (except as may be
required by law). Any such receiver or receivers shall have all the usual
powers and duties of receivers in like or similar cases and all the powers and
duties of the Agent provided in this Agreement and the other Loan Documents
including, without limitation and to the extent permitted by law, and by such
documents, the right to operate under existing licenses, franchises and permits
granted or issued to the Borrower or any of its Subsidiaries and the right to
enter into licenses, sublicenses, leases and subleases of all or any part of the
Collateral to the extent the Borrower or any of its Subsidiaries possessed such
rights, and shall continue as such and exercise all such powers until the date
of confirmation of sale of the Collateral unless such receivership is sooner
terminated.
8.4 Entry Upon Premises and Access to Information. Upon the occurrence
---------------------------------------------
and during the continuance of an Event of Default, the Agent shall have the
right, to the extent permitted by Law, to enter upon the premises of each of the
Borrower and its Subsidiaries where the Collateral is located (or is believed to
be located) without any obligation to pay rent to the Borrower or any of its
Subsidiaries, or, except to the extent that the rights of third parties would be
violated, until an appropriate order from a competent court is issued, any other
place or places where the Collateral is believed to be located and kept, and
remove the Collateral therefrom to the premises of the Agent, for such time as
the Agent may desire, in order effectively to collect or liquidate the
Collateral, or the Agent may require the Borrower or any of its Subsidiaries to
assemble the Collateral and make it available to the Agent at a place or places
to be designated by the Agent. Upon the occurrence and during the continuance
of an Event of Default, the Agent shall have the right to obtain access to the
data processing equipment, computer hardware and software of the Borrower or any
of its Subsidiaries relating to the Collateral and to use all of the foregoing
and the information contained therein in any manner the Agent deems appropriate
for the purposes of protecting the rights of the Agent hereunder and its rights
to the Collateral; and the Agent shall have the right to notify post office
authorities to change the address for delivery of the mail of the Borrower and
each Subsidiary to an address designated by the Agent and to receive, open and
process all mail addressed to the Borrower and each such Subsidiary.
8.5 Sale or Other Disposition of Collateral by the Agent. The net
----------------------------------------------------
proceeds realized by the Agent upon any such sale or other disposition, after
deduction for the expense of retaking, holding, preparing for sale, selling or
the like and the reasonable attorneys' and
-68-
paralegals' fees and legal expenses incurred by the Agent in connection
therewith, shall be applied as provided herein toward satisfaction of the
Liabilities. The Agent shall account to each of the Borrower and its
Subsidiaries for any surplus realized upon such sale or other disposition, and
each of the Borrower and its Subsidiaries shall remain liable for any
deficiency. The commencement of any action, legal or equitable, or the
rendering of any judgment or decree for any deficiency, shall not affect the
Agent's security interest in the Collateral until the Liabilities are fully
paid. Each of the Borrower and its Subsidiaries agrees that the Agent has no
obligation to preserve rights to the Collateral against any other parties.
8.6 Waiver of Demand. Demand, presentment, protest and notice of
----------------
nonpayment are hereby waived by each of the Borrower and its Subsidiaries. To
the extent permitted by Law the Borrower and its Subsidiaries also waive the
benefit of all valuation, appraisal and exemption laws.
8.7 Waiver of Notice. UPON THE OCCURRENCE AND CONTINUANCE OF A DEFAULT,
----------------
EACH OF THE BORROWER AND ITS SUBSIDIARIES HEREBY WAIVES ALL RIGHTS TO NOTICE AND
HEARING OF ANY KIND PRIOR TO THE EXERCISE BY THE AGENT OR THE BANKS OF ITS OR
THEIR RIGHTS TO REPOSSESS THE COLLATERAL WITHOUT JUDICIAL PROCESS OR TO REPLEVY,
ATTACH OR LEVY UPON THE COLLATERAL WITHOUT PRIOR NOTICE OR HEARING, TO THE
EXTENT PERMITTED IN THE JURISDICTION IN WHICH SUCH COLLATERAL IS LOCATED.
8.8 Advice of Counsel. Each of the Borrower and its Subsidiaries hereby
-----------------
acknowledges that each of them has received advice from its counsel with respect
to this transaction and this Agreement, including without limitation any waivers
contained herein.
9. THE AGENT
---------
9.1 Appointment of the Agent.
------------------------
(a) Each Bank hereby irrevocably appoints and authorizes UST as the Agent
of such Bank under the Loan Documents and each such Bank hereby irrevocably
authorizes UST, as the Agent for such Bank, subject to the terms and provisions
hereof, to take such action on its behalf, and to the extent of its interest
therein, under the provisions of the Loan Documents and to exercise such powers
and perform such duties as are exercisable and performable by the Agent by the
terms of the Loan Documents, together with such other powers as are reasonably
incidental thereto. Such powers shall include, without limitation, to advance,
administer, collect, enforce foreclosure on security for, and otherwise service
the Loans and the Letters of Credit, including, without limitation, subject to
the provisions of the Loan Documents, the protection, perfection and enforcement
of the Agent's rights as secured creditor under this Agreement and the other
Loan Documents, and, subject to the express terms and conditions hereof and
under the Loan Documents, to take such action and exercise such powers and
discretion on the Banks' behalf under this Agreement and the other Loan
-69-
Documents as shall be reasonably necessary or advisable for such purposes. As
to any matter not provided for herein, the Agent shall be fully protected in
exercising any discretion or taking any action upon the written instructions of
the Banks. Notwithstanding any provision to the contrary elsewhere in this
Agreement or in any of the other Loan Documents, the Agent shall act solely as
agent of the Banks and the Agent shall not have any duties or responsibilities,
except those expressly set forth herein or in the other Loan Documents, nor any
fiduciary relationship with any of the Banks; no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or the other Loan Documents or otherwise shall exist against the Agent
and the Agent shall not be required to take any action in its capacity as agent
of the Banks hereunder that exposes it to personal liability or that is contrary
to applicable law.
(b) The Agent hereby accepts such appointment and agrees to act as the
agent of the Banks in accordance with this Agreement. In the performance of its
function under this Agreement, the Agent shall act solely as agent of the Banks,
and the Agent shall not assume, nor shall it be deemed to have assumed, any
obligation or relationship of agency or trust with or for the Borrower or any of
its Subsidiaries.
9.2 Administration of the Loans/Letters of Credit.
---------------------------------------------
(a) The Agent shall hold the original Loan Documents, with the exception
of the Notes delivered to Sumitomo, SSB, BBC, Mellon and BNY in accordance with
this Agreement (of which the Agent will hold only a copy), and administer the
Loan Documents in the name of the Banks for the pro rata benefit of the Banks,
--- ----
subject to the terms of this Section 9.
---------
(b) Each Loan under the Working Capital Line and the Guidance Line of
Credit shall be made by the Agent on the Banks' behalf in accordance with the
terms hereof and in accordance with this Agreement, and all requests for Loans
or Letters of Credit and other documents to be provided by the Borrower or any
of its Subsidiaries in connection with requests for Loans or Letters of Credit
shall be received by the Agent on the Banks' behalf before 11:00 a.m. (New York
City time) on the date each Loan is required to be made to the Borrower, except
as otherwise provided in the applicable LIBOR provisions, if any, contained in
the Notes. Upon receipt of a request for a Loan under the Working Capital Line
or the Guidance Line of Credit, the Agent shall notify the Banks by 1:00 p.m. on
such date of such request and of each Bank's pro rata share of the requested
--- ----
Loan. Not later than 2:30 p.m. (New York City time) on the date each Loan is
required to be made to the Borrower, each Bank shall make available its pro rata
--- ----
share of such Loan, in Federal or other funds immediately available in Boston,
to the Agent at its address stated in subsection 10.13. Unless the Agent
----------------
determines that any applicable condition precedent specified in this Agreement
for such Loan has not been satisfied, and additionally in the case of each
Guidance Loan, subject to the approval of the Designated Banks, to the extent
that approval of the Designated Banks is required by subsection 4.5 of this
--------------
Agreement, the Agent will make the funds so received from the Banks available to
the Borrower at the Agent's aforesaid address.
-70-
(c) Unless the Agent shall have received notice from any Bank prior to the
date of any Loan that any Bank will not make available to the Agent its share of
such Loan, the Agent may assume that each Bank will make its pro rata share
--- ----
available to the Agent on the date of such Loan in accordance with subsection
----------
9.2(b) above and the Agent may, in reliance upon such assumption, make available
- ------
to the Borrower on such date a corresponding amount on behalf of the Banks. If
and to the extent that any Bank shall not have so made such share available to
the Agent, and the Agent, relying on such assumption, shall have made available
to the Borrower any such Bank's pro rata share of such Loan, from funds of the
--- ----
Agent, each such Bank agrees to repay to the Agent forthwith on demand such
corresponding amount, together with interest thereon, for each day from the date
such amount is made available by the Agent to the Borrower until the date such
amount is repaid to the Agent by each such Bank, at the overnight Federal funds
rate. If any such Bank shall repay to the Agent such corresponding amount, such
amount so repaid shall constitute such Bank's pro rata share of any such Loan
--- ----
for purposes of this Agreement. Nothing herein shall be deemed to relieve each
Bank from its obligation to fulfill its commitments under this Agreement or to
prejudice any rights which the Borrower may have against any of the Banks as a
result of any default by any of the Banks hereunder; provided however, that no
Bank shall be responsible for the failure of any other Bank to make available to
the Agent such Bank's pro rata share of any such Loan; and provided further,
--- ----
however, that a default by one Bank in providing its pro rata share of any Loan
--- ----
shall not by itself relieve any other Bank of its obligation to make its pro
---
rata share of such Loan.
- ----
(d) In the event that the Agent makes any payment under any Letter of
Credit and the Borrower shall not have reimbursed such amount in full to the
Agent pursuant to subsection 2.3(b) of this Agreement, the Agent shall promptly
-----------------
notify the Banks of such failure, and each Bank shall promptly and
unconditionally pay to the Agent the amount of its pro rata share of such
--- ----
unreimbursed payment in immediately available funds. If and to the extent any
Bank shall not have so made its pro rata share of the amount of such payment
--- ----
available to the Agent, such Bank agrees to pay to the Agent, forthwith on
demand, such amount, together with interest thereon, for each day from such date
until the date such amount is paid to the Agent, at the overnight Federal funds
rate.
(e) The Agent shall collect and receive all amounts paid in connection
with the Loans and the Letters of Credit, whether as principal, interest, fees,
late charges, reimbursement of draws under the Letters of Credit, proceeds of or
recoveries under insurance policies, amounts realized as the result of enforcing
the Loan Documents, income from the sale of any collateral or proceeds of any
refinancing of the Loans, or otherwise, in trust for the benefit of the Banks in
proportion to their respective interests therein and shall credit all such
amounts to the Loan Account to the extent provided for in this Agreement and in
the other Loan Documents. The Agent will render to the Banks on a monthly basis
a written statement of the Loan Account. Amounts so received as payments on
Notes held by Sumitomo, SSB, BBC, Mellon and BNY shall be deemed payments by the
Borrower on account of such Notes, notwithstanding any contrary provision
contained in such Notes regarding place or manner of payment.
-71-
(f) After any funds received in connection with the Loans or reimbursement
of draws under Letters of Credit have been credited to the Loan Account as
collected funds, the Agent shall remit to each Bank its respective pro rata
--- ----
shares of such amounts. Subject to the next two sentences, such remittances to
the Banks shall be made by wire transfer of Federal funds, pursuant to
instructions provided by the Banks, on the same day as the Agent shall have
received such collected funds. If any Bank then owes funds to the Agent in
connection with the Loans, the Letters of Credit or this Agreement, the Agent
may apply such sums to the payments due to the Agent. Notwithstanding the
foregoing, if any payment from the Borrower is returned after the Agent has made
a pro rata distribution to the Banks, at the Agent's option, (i) each Bank shall
--- ----
repay the Agent promptly upon notice of its pro rata distribution or (ii) the
--- ----
Agent may offset each Bank's pro rata share of the amount of such returned or
--- ----
uncollected payment against any future payment due to the Banks.
(g) The Agent agrees to keep the Banks reasonably informed and generally
advised concerning the status of the Loans, the Letters of Credit, and the
Subordinated Debt and of any material of which it has or gains knowledge with
respect to the same or the Borrower's performance thereunder, including, without
limitation, any facts or circumstances that would constitute a Material Adverse
Effect with respect to the Borrower or the Borrower and its Subsidiaries, taken
as a whole. The Agent shall give the Banks notice of any Default or Event of
Default under this Agreement, the Notes or any of the other Loan Documents of
which the Agent shall have knowledge. The Banks shall each cooperate with the
Agent if and to the extent that the Agent determines that the Banks' direct
involvement is required in any enforcement action, and shall take such action,
at the Banks' pro rata expense.
--- ----
(h) Except as set forth below, (i) the Agent shall have full discretion in
connection with the administration and collection of the Loans and amounts
funded under the Letters of Credit, including the right to make all decisions
regarding exercise, protection, perfection or enforcement of the rights, powers
and remedies of the Agent and the Banks hereunder or under the other Loan
Documents, and the right to make all other determinations or requests that the
Loan Documents provide are to be made by "the Banks", (ii) the Agent may take
such action, at the Banks' pro rata expense, as the Agent deems reasonably
--- ----
necessary or advisable to exercise, protect, perfect or enforce all rights,
powers and remedies of the Agent and the Banks under this Agreement or the other
Loan Documents, without the consent or approval of the Banks, and (iii) the
Agent shall, for the pro rata benefit of the Banks, receive, collect, hold and
--- ----
dispose of, in accordance with the provisions of this Agreement and the other
Loan Documents, the Collateral and any other properties or assets delivered or
paid over to "the Banks" in accordance with the provisions of this Agreement and
the other Loan Documents. The Agent shall not, however, without the prior
written consent of those Banks holding no less than Sixty-Five Percent (65%) of
the Loans (the "Designated Banks"), (A) consent to the making of any Guidance
----------------
Loan for which consent is required under subsection 4.5, (B) alter or amend the
---------- ---
Loan Documents or waive compliance with any provision thereof, (C) release any
Collateral above the levels permitted under subsection 7.5, so long as the value
--------------
of such Collateral so released does not exceed One Hundred Thousand and 00/100
Dollars ($100,000.00) per occasion of such release and does not represent a
total release of Collateral
-72-
having a value of Five Hundred Thousand and 00/100 Dollars ($500,000.00) per
fiscal year of the Borrower, (D) declare an acceleration of the Loans upon the
occurrence of an Event of Default, (E) commence collateral enforcement or
foreclosure proceedings, or (F) consent to the assignment or transfer by the
Borrower or any of Borrower's or any of its Subsidiaries' rights and obligations
under any Loan Document. The Agent shall not, without the prior written consent
of all of the Banks, (u) release any Collateral above the levels permitted under
subsection 7.5, and which also exceed the levels permitted to be released by the
- ---------------
Designated Banks under subsection 9.2(h)(C), (v) release any Guarantor which is
--------------------
a Subsidiary, (w) extend the amortization schedule of repayment of any Loan, or
change the rates or the fees payable on the Loans, or extend the time of payment
of interest accruing on the Loans or extend the time or waive any requirement
for the reduction or termination of the commitment of the Banks, (x) extend the
final scheduled maturity date, or reduce the principal amount, of any Loan or
Note, (y) increase the commitment of the Banks with respect to the total amount
of the Loans or (z) amend this subsection 9.2(h).
-----------------
(i) If the Agent, acting in good faith and in a commercially reasonable
manner pursuant to the terms of this Agreement or the other Loan Documents,
shall foreclose or enforce the security interests of the Agent in the
Collateral, upon the authority of the Designated Banks, the Agent shall be
authorized to bid, itself or through its nominee, on behalf of the Banks at any
foreclosure sale up to the then outstanding balance of the Loans, including
principal, interest, costs and attorneys' fees, and in the event that the Agent
is the successful bidder at such sale, title to the property foreclosed shall be
held by the Agent for the pro rata benefit of the Banks. The Banks shall share
--- ----
all costs and expenses incurred in the holding and management of any such
property on a pro rata basis.
--- ----
(j) The Agent shall deliver to the Banks copies of all financial
statements and other related information and all material notices and documents
received by the Agent from the Borrower or its Subsidiaries.
(k) All books and records concerning the Loans and the Letters of Credit
which are maintained by the Agent shall be available for inspection by any Bank
during the Agent's normal business hours upon reasonable prior request.
9.3 Agent's Duty of Care.
--------------------
The Agent agrees that, in acting as agent of the Banks hereunder, it will
exercise the same degree of care in advancing, administering, collecting and
enforcing the Loans, including, without limitation, the management, protection
and perfection of the Collateral for the Loans, that it exercises in the
ordinary course of its day-to-day business in advancing, administering,
collecting and enforcing other loans for its own account. Neither the Agent nor
its officers, directors, agents, attorneys or employees shall be liable to the
Banks for any acts or omissions in making, administering, collecting or
enforcing the Loans unless such acts or omissions constitute gross negligence or
wilful misconduct. Neither the Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates shall be responsible in
-73-
any manner to any Bank for any recitals, statements, representations or
warranties made by any party to the Loan Documents or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Agent under or in connection with, this Agreement or in the other Loan
Documents or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any of the other Loan Documents or for any
failure of any party to this Agreement or to the other Loan Documents or any
other Person to perform its obligations thereunder. The Agent shall not be
under any obligation to any Bank to ascertain or to inquire as to the observance
or performance of any of the agreements contained in, or conditions of, this
Agreement or the other Loan Documents, or to inspect the properties, books or
records of any party to this Agreement or to the other Loan Documents. The
Agent shall not be under any liability or responsibility whatsoever, to any
party to this Agreement or to the other Loan Documents or any other Person as a
consequence of any failure or delay in performance, or any breach, by any Bank
of any of its obligations under any of the Loan Documents. Without limiting the
generality of the foregoing, the Agent (i) may consult with legal counsel,
including, without limitation, counsel for the Borrower, independent public
accountants and other experts elected by it, and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts, and (ii) shall incur no
liability by acting or omitting to act upon any writing or other communication
believed by it to be genuine and signed or sent by the proper party.
9.4. Reliance by Agent.
-----------------
The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any writing, resolution, notice, consent, certificate, affidavit,
opinion, letter, cablegram, telegram, telecopy, telex, telefax 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 party to the Loan Documents), independent accountants
and other experts selected by the Agent. The Agent shall not be under any duty
to examine or pass upon the validity, effectiveness or genuineness of the Loan
Documents or any instrument, document or communication furnished pursuant
thereto or in connection therewith, and the Agent shall be entitled to assume
that the same are valid, effective and genuine, have been signed or sent by the
proper parties and are what they purport to be. The Agent shall be fully
justified in failing or refusing to take any action under the Loan Documents
unless it shall first receive such advice or concurrence of the Banks as it
deems appropriate. The Agent shall in all cases be fully protected in acting,
or in refraining from acting, under the Loan Documents in accordance with a
request of the Banks, and such request and any action taken or failure to act
pursuant thereto shall be binding upon the Banks.
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 written notice
thereof from a Bank,
-74-
the Borrower or its Subsidiaries. In the event that the Agent receives such a
notice, the Agent shall promptly give notice thereof to the Banks. The Agent
shall take such action with respect to such Default or Event of Default as it is
instructed so to do in accordance with this Section 9.
---------
9.6 Non-Reliance on Agent and Other Banks.
-------------------------------------
Each Bank 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
hereinafter, including any review of the affairs of any party to the Loan
Documents, shall be deemed to constitute any representation or warranty by the
Agent to any Bank. Each Bank represents to the Agent that it has, independently
and without reliance upon the Agent or any other Bank, and based on such
documents and information as it has deemed appropriate, made its own evaluation
of and investigation into the business, operations, property, financial and
other condition and creditworthiness of the Borrower and its Subsidiaries and
made its own decision to enter into this Agreement. Each Bank also represents
that it will, independently and without reliance upon the Agent or any other
Bank and based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit analysis, evaluations and decisions in
taking or not taking action under this Agreement or under any other Loan
Document, and to make such investigation as it deems necessary to inform itself
as to the business, operations, property, financial and other condition and
creditworthiness of the Borrower and its Subsidiaries. Except for notices,
reports and other documents expressly required to be furnished to the Banks
hereunder by the Agent, the Agent shall not have any duty or responsibility to
provide any Bank with any credit or other information concerning the business,
operations, property, financial and other condition or creditworthiness of the
Borrower and its Subsidiaries which may come into the possession of the Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.
9.7 Indemnification.
---------------
(a) To the extent the Agent is not reimbursed and indemnified by the
Borrower, its Subsidiaries or the Limited Guarantors, the Banks will reimburse
and indemnify the Agent, in proportion to their respective pro rata shares in
--- ----
the Loans, from and against any and all expenses, losses, claims, damages or
liabilities that are incurred by the Agent, including, but not limited to,
reasonable attorneys' fees and expenses, caused by, or in any way resulting from
or relating to, any action taken or omitted to be taken by the Agent in any way
relating to or arising out of the performance of the agency contemplated by this
Section 9; provided however, that the Banks shall not by liable to the Agent for
- ---------
payment of any portion of such expenses, losses, claims, damages or liabilities
resulting solely from the gross negligence or willful misconduct of the Agent.
(b) Without limiting the foregoing, each Bank agrees to reimburse the
Agent promptly upon demand for its pro rata share of any out-of-pocket expenses,
--- ----
including,
-75-
without limitation, reasonable counsel fees, incurred by the Agent in connection
with the preparation, execution, delivery, administration, modification,
amendment or enforcement of, or legal advice in respect of rights or
responsibilities under, this Agreement and the other Loan Documents, to the
extent that the Agent is not reimbursed for each Bank's pro rata share of such
--- ----
expenses by the Borrower.
9.8 Successor Agent. The Agent may resign the agency constituted hereby
---------------
only with the prior written consent of the Designated Banks and the Borrower,
but may not assign its agency without the consent of the other Banks. Upon any
such resignation, the Banks shall determine which of them shall become the
successor agent hereunder. Any successor agent shall act as Agent for the
Banks, and shall have the same rights, powers, privileges and duties with
respect to the Banks as the Agent has hereunder, and the Agent shall be
discharged from its duties and obligation hereunder as the Agent of the Banks
with respect to all periods after the successor agent shall have accepted such
appointment by the Banks. In the event that the Agent or its assets are taken
over by any state or federal agency having jurisdiction over the Agent or its
assets, the Banks holding more than a majority of the outstanding balance of the
Loans may appoint another Bank as successor to the Agent.
9.9 Rescission of Loan Payments. The Banks agree that this Section 9
--------------------------- ---------
shall continue to be effective or be reinstated, as the case may be, if at any
time payment of all or any part of the Loans or reimbursement of all or part of
draws under Letter of Credit, in any case received while the parties hereto were
parties to this Agreement, is rescinded or otherwise must be restored to the
Borrower, any of its Subsidiaries, or their respective creditors or
representatives, upon the insolvency, bankruptcy or reorganization of the
Borrower or any of its Subsidiaries, or otherwise, all as though such payments
had not been made.
9.10 Sharing of Payments. If any Bank shall obtain any payment of any sums
-------------------
due under the Loans or any reimbursement of draws on Letters of Credit, whether
such payment is voluntary of involuntary, or received through the exercise of
any right of setoff or banker's lien, by realization upon security or
enforcement of any right under the Loan Documents or otherwise, in excess of its
respective pro rata share thereof, the other Banks shall forthwith purchase for
--- ----
cash, without recourse or warranty from the other such interests in the Loans as
shall be necessary to cause the Banks to share the excess payment ratably with
each other, but if any excess payment is afterward recovered from such
purchaser, the additional interest shall be rescinded and the amount paid
restored, without interest, to the extent of such recovery. If any Bank or the
Agent fails to make any payment required hereunder to any Bank or the Agent,
then such Bank or the Agent shall pay interest at the Federal Funds rate to the
paying party.
9.11 Representations and Warranties of the Other Banks and of the Agent.
------------------------------------------------------------------
Sumitomo, SSB, BBC, Mellon and BNY, each as to itself only, hereby represents
and warrants to the Agent that (i) it is a sophisticated buyer with respect to
the Loans, has adequate information concerning the business and financial
condition of the Borrower and its
-76-
Subsidiaries to make an informed decision regarding its participation in the
Loans hereunder, and has independently and without reliance upon the Agent, and
based on such information as it has deemed appropriate, made its own analysis
and decision to enter into this Agreement and (ii) it has received copies of all
of the Loan Documents it has requested. The Agent represents and warrants to
Sumitomo, SSB, BBC, Mellon and BNY that, to the best of its knowledge, it has
sent to such Banks all of the Loan Documents, including material waivers and
amendments thereto, in its possession.
9.12. Notices. All communications between the Agent and the Banks or
-------
notices in connection herewith shall be addressed to the Agent or to the
appropriate Bank at its address set forth on page one of this Agreement. All
such communications and notices shall be sent in the manner provided in
subsection 10.13 of this Agreement, and shall be effective in the time frames
- ----------------
provided in subsection 10.13, except that notice by telecopy shall be permitted
----------------
and shall be deemed received on the same Business Day when sent.
10. MISCELLANEOUS.
-------------
10.1 Waiver. The Agent's failure, at any time or times hereafter, to
------
require strict performance by each of the Borrower and its Subsidiaries of any
of the provisions of this Agreement shall not waive, affect or diminish any
right of the Agent thereafter to demand strict compliance and performance
therewith. Any suspension or waiver by the Agent of a Default or an Event of
Default by the Borrower or any of its Subsidiaries under this Agreement shall
not waive, affect or diminish any right of the Agent thereafter to demand strict
compliance and performance therewith. Any suspension or waiver by the Agent of
a Default or an Event of Default by the Borrower or any of its Subsidiaries
under this Agreement or a default under any of the other Loan Documents shall
not suspend, waive or affect any other Default or Event of Default by the
Borrower or any of its Subsidiaries under this Agreement or default under any
of the other Loan Documents whether the same is prior or subsequent thereto and
whether of the same or of a different kind or character. None of the
undertakings, agreements, warranties, covenants and representations of the
Borrower or any of its Subsidiaries contained in this Agreement or any of the
other Loan Documents and no Default or Event of Default by the Borrower or any
of its Subsidiaries under this Agreement or default under any of the other Loan
Documents shall be deemed to have been suspended or waived by the Agent unless
such suspension or waiver is in writing signed by an officer of the Agent, and
directed to the Borrower or any of its Subsidiaries specifying such suspension
or waiver. The Agent shall not be deemed to have waived any of its rights upon
or under this Agreement or any of the other Loan Documents unless such waiver is
in writing and signed by an officer of the Agent. No delay or omission on the
part of the Agent in exercising any other right shall operate as a waiver of
such right or any other right. A waiver on any one occasion shall not be
construed as a bar to or waiver of the assertion of any right on any future
occasion.
10.2 Attorneys' Fees and Expenses. If at any time or times hereafter the
----------------------------
Agent employs counsel in connection with protecting or perfecting the Agent's
security interest in
-77-
the Collateral or in connection with any matters contemplated by or arising out
of this Agreement, whether (a) to commence, defend, or intervene in any
litigation or to file a petition, complaint, answer, motion or other pleadings,
(b) to take any other action in or with respect to any suit or proceeding
(Insolvency or otherwise), (c) to consult with officers of the Agent to advise
the Agent, (d) to protect, collect, lease, sell, take possession of, or
liquidate any of the Collateral, or (e) to attempt to enforce or to enforce any
Lien on any of the Collateral or to attempt to enforce or to enforce any rights
of the Agent to collect any of the Liabilities, then in any of such events, all
of the attorneys' and paralegals' reasonable fees arising from such services,
and any reasonable expenses, costs and charges relating thereto, together with
interest at the rate prescribed herein for the Guidance Loans, shall be part of
the Liabilities, payable on demand and secured by the Collateral.
10.3 Expenditures by the Agent. Except as permitted herein, in the event
-------------------------
the Borrower or any of its Subsidiaries shall fail to pay taxes, insurance,
assessments, costs or expenses which the Borrower or any of its Subsidiaries is,
under any of the terms hereof or of any of the other Loan Documents, required to
pay, or fails to keep the Collateral free from Liens, or fails to perform under
any agreement related to or for which a Letter of Credit has been issued or a
Guidance Loan has been made, the Agent may, in its sole and absolute discretion,
make expenditures for any or all of such purposes, and the amount so expended,
together with interest thereon at the rate prescribed herein for the Guidance
Loans, shall be part of the Liabilities, payable on demand and secured by the
Collateral.
10.4 Custody and Preservation of Collateral. The Agent and each Bank shall
--------------------------------------
be deemed to have exercised reasonable care in the custody and preservation of
any of the Collateral in its possession if it takes such action for that purpose
as the Agent or such Bank would with respect to similar property held in such
Bank's name.
10.5 Reliance by the Banks. Each of the Borrower and its Subsidiaries
---------------------
hereby acknowledges that the Banks, in entering into this Agreement and
agreeing, to the extent provided herein, to make Loans and otherwise extend
credit to the Borrower or its Subsidiaries hereunder, have relied upon the
accuracy of the covenants, agreements, representations and warranties made
herein by each of the Borrower and its Subsidiaries and the information
delivered by each of the Borrower and its Subsidiaries to the Banks in
connection herewith (including without limitation the Financials).
10.6 Assignability; Parties. This Agreement is not assignable by the
----------------------
Borrower or any of its Subsidiaries. Whenever in this Agreement there is
reference made to any of the parties hereto, such reference shall be deemed to
include, wherever applicable, a reference to the successors and permitted
assigns of each of the Borrower and its Subsidiaries, and the successors and
assigns of the Agent and the Banks.
10.7 Applicable Law; Severability. THIS AGREEMENT SHALL BE CONSTRUED IN ALL
----------------------------
RESPECTS IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS AND DECISIONS OF THE
COMMONWEALTH OF MASSACHUSETTS, WITHOUT REGARD
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TO CONFLICT OF LAW PRINCIPLES. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provisions or the remaining provisions of this Agreement.
10.8 Submission to Jurisdiction; Jury Trial Waiver; Waiver of Bond. EACH
-------------------------------------------------------------
OF THE BORROWER AND ITS SUBSIDIARIES HEREBY CONSENTS TO THE JURISDICTION OF ANY
LOCAL, STATE OR FEDERAL COURT LOCATED WITHIN SUFFOLK COUNTY, MASSACHUSETTS AND
WAIVES ANY OBJECTION WHICH THE BORROWER MAY HAVE BASED ON IMPROPER VENUE OR
FORUM NON CONVENIENS TO THE CONDUCT OF ANY PROCEEDING IN ANY SUCH COURT AND EACH
- --------------------
OF THE BORROWER AND ITS SUBSIDIARIES CONSENTS THAT ALL SERVICE OF PROCESS UPON
IT BE MADE BY REGISTERED MAIL OR MESSENGER DIRECTED TO IT AT THE ADDRESS SET
FORTH IN SUBSECTION 10.13 AND THAT SERVICE SO MADE SHALL BE DEEMED TO BE
----------------
COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT OR THREE (3) DAYS AFTER THE SAME
SHALL HAVE BEEN POSTED TO THE BORROWER'S OR SUCH SUBSIDIARY'S ADDRESS. EACH OF
THE BORROWER AND ITS SUBSIDIARIES HEREBY WAIVES, TO THE EXTENT PERMITTED BY LAW,
TRIAL BY JURY, IN ANY LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
AGREEMENT, ANY OF THE OTHER LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREIN OR THEREIN AND WAIVES ANY BOND OR SURETY OR SECURITY UPON
SUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF THE AGENT, THE BANKS
OR ANY OF THEM, AND LIKEWISE WAIVES, TO THE EXTENT PERMITTED BY LAW, ANY BOND OR
SURETY WHICH MIGHT BE REQUIRED OF THE AGENT, THE BANKS OR ANY OF THEM IN ANY
LEGAL PROCEEDING. NOTHING CONTAINED IN THIS SUBSECTION 10.8 SHALL AFFECT THE
---------------
RIGHT OF EACH BANK TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW
OR AFFECT THE RIGHT OF EACH BANK TO BRING ANY ACTION OR PROCEEDING AGAINST THE
BORROWER OR ITS PROPERTY IN THE COURTS OF ANY OTHER PROPER JURISDICTION.
10.9 Application of Payments. After the occurrence and during the
-----------------------
continuance of an Event of Default, any contrary provision contained in this
Agreement or the other Loan Documents notwithstanding, the Agent shall have the
continuing exclusive right to apply and reapply any and all payments received at
any time or times hereafter, whether with respect to the Collateral or
otherwise, against the Liabilities in such manner as the Agent may deem
advisable, any entry by the Agent upon its books and records notwithstanding,
and each of the Borrower and its Subsidiaries hereby irrevocably waives the
right to direct the application of any and all payments at any time or times
hereafter received by the Agent from the Borrower or any of its Subsidiaries or
with respect to any of the Collateral in such circumstances.
-79-
10.10 Marshalling; Payments Set Aside. No Bank shall be under any
-------------------------------
obligation to marshall any assets in favor of the Borrower or any of its
Subsidiaries or any other Person or against or in payment of any or all of the
Liabilities. To the extent that the Borrower or any of its Subsidiaries makes a
payment or payments to the Agent or any Bank or the Agent or any Bank enforces
the Liens or exercises its rights of setoff, and such payment or payments or the
proceeds of such enforcement or setoff or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid to a trustee, receiver or any other party under any bankruptcy or
other law, then to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied shall be revived and continued in full force
and effect as if such payment had not been made or such enforcement or setoff
had not occurred.
10.11 Section Titles. The section and subsection titles contained in
--------------
this Agreement are for reference purposes only and shall be without substantive
meaning or content of any kind whatsoever and are not a part of the agreement
between the parties.
10.12 Continuing Effect. This Agreement, the Agent's Liens on the
-----------------
Collateral, and all of the other Loan Documents shall continue in full force and
effect so long as any Liabilities shall be owed to the Banks, and (even if there
shall be no Liabilities outstanding) so long as this Agreement has not been
terminated as provided herein.
10.13 Notices. Except as otherwise expressly provided herein, any
-------
notice required or desired to be served, given or delivered hereunder shall be
in writing, and shall be deemed to have been validly served, given or delivered
upon the earlier of (a) personal delivery to the address set forth below, (b) in
the case of mailed notice, three (3) days after deposit in the United States
mails, with proper postage for certified mail, return receipt requested,
prepaid, or (c) in the case of notice by Federal Express or other reputable
overnight courier service, one (1) Business Day after delivery to such courier
service, addressed to the party to be notified as follows:
(i) If to the Agent, at:
USTrust
30 Court Street
Boston, Massachusetts 02108
Attention: Michael D. O'Neill, Vice President
(ii) If to the Borrower and/or its Subsidiaries, at:
Fine Host Corporation
3 Greenwich Office Park
Greenwich, CT 06831
Attention: Richard E. Kerley, President
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or to such other Person or address as each party designates to the other in the
manner herein prescribed. Notices sent by or to the Borrower shall be deemed to
include its Subsidiaries for all purposes under this Agreement.
10.14 Equitable Relief. Each of the Borrower and its Subsidiaries
----------------
recognizes that, in the event the Borrower and its Subsidiaries fails to
perform, observe or discharge any of the Liabilities under this Agreement, any
remedy at law may prove to be inadequate relief to the Banks. Therefore, the
Borrower agrees that the Banks, if the Banks so request, shall be entitled to
temporary and permanent injunctive relief in any such case without the necessity
of proving actual damages.
10.15 Entire Agreement; Amendments. This Agreement, together with the
----------------------------
Loan Documents executed in connection herewith, and all exhibits and schedules
attached hereto or thereto, constitutes the entire Agreement among the parties
with respect to the subject matter hereof, and supersedes all prior written oral
understandings with respect thereto. This Agreement may be amended only by a
written instrument signed by the Borrower and the Designated Banks, except that
any amendment that would (i) make any change or permit any action specified in
the last sentence of subsection 9.2(h) or (ii) amend this subsection 10.15,
----------------- ----------------
shall be signed by the Borrower and all of the Banks.
10.16 Participations/Assignments.
--------------------------
(a) After obtaining the consent of UST, which consent shall not be
unreasonably withheld, each Bank shall have the right, without the consent of
the Borrower or any of its Subsidiaries or notice to the Borrower or any of its
Subsidiaries, to sell interests and participations in or to assign all or any
portion of its interest under any or all of the Loan Documents on such terms as
such Bank and a purchaser of such participation shall determine. However, no
Bank shall have any obligation to sell interests or any participations in the
Loan Documents.
(b) In addition to the assignments and participations permitted under
subparagraph (a) above, any Bank may assign and pledge all or any portion of its
pro rata share in the Loans and Notes to (i) any affiliate of such Bank or (ii)
- --- ----
any Federal Reserve Bank as collateral security pursuant to Regulation A of the
Board of Governors of the Federal Reserve System and any Operating Circular
issued by such Federal Reserve Bank. No such assignment shall release the
assigning Bank from its obligations hereunder.
10.17 Changes in Accounting Principles. (a) If any changes in
--------------------------------
accounting principles from those used in the preparation of the Financials are
hereafter occasioned by the promulgation of rules, regulations, pronouncements,
or opinions of, or required by, the Financial Accounting Standards Board or the
American Institute of Certified Public Accountants (or successors thereto or
agencies with similar functions), or there shall occur any change in the
Borrower's or any Subsidiary's fiscal or tax years and, as a result of any such
changes, there shall result a change in the method of calculating any of the
financial
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covenants, negative covenants, standards, or other terms or conditions found in
this Agreement or any of the other Loan Documents, or (b) if the Borrower, for
reasonable business purposes, shall desire to change such accounting principles
or the application thereof (which change shall be consistent with accounting
principles then in effect pursuant to rules, regulations, pronouncements, or
opinions of the Financial Accounting Standards Board or the American Institute
of Certified Public Accountants) and such desired change would result in a
change in the method of calculating any of the financial covenants, negative
covenants or other terms and conditions found in this Agreement or any of the
other Loan Documents, then the parties hereto agree to enter into negotiations
in order to amend such provisions and the definition of GAAP, set forth in
subsection 1.1 so as to reflect equitably such changes with the desired result
- --------------
that the criteria for evaluating the financial condition and performance of the
Borrower and the Subsidiaries shall be the same after such changes as if such
changes had not been made.
10.18 Indemnity. Each of the Borrower and its Subsidiaries agrees to
---------
indemnify and hold the Agent and each Bank and the officers, directors,
employees and Affiliates of the Agent and such Bank harmless from and against
any claims, demands, losses, damages, penalties, costs and expenses to which the
Agent, such Bank, its subsidiaries or any such Persons or Affiliates may become
subject, insofar as such claims, demands, losses, damages, penalties, costs and
expenses arise out of or by reason of any investigation, litigation or other
proceedings related to the transactions contemplated by this Agreement, any of
the other Loan Documents, and to reimburse the Agent, each Bank and each such
Person and Affiliate, upon demand, for any legal or other expenses incurred in
connection with investigating or defending any such claims, demands, losses,
damages, penalties, costs and expenses; provided, however, that each of the
Borrower and its Subsidiaries shall not be liable for any such claims, demands,
losses, damages, penalties, costs and expenses arising out of any such action
taken by the Agent or by the Banks or any such Person or Affiliate to the extent
that the same shall be determined by a court of competent jurisdiction to have
constituted gross negligence or willful misconduct of the party to be
indemnified. Without limiting the foregoing, the Borrower and each of its
Subsidiaries shall indemnify and hold harmless the Agent's and each Bank's audit
officers, directors, employees and Affiliates from and against any claims,
demands, penalties, costs and expenses associated with Environmental Laws,
Hazardous Substances, and any covenants, representations and warranties relating
thereto contained in this Agreement, no matter how arising, and all matters
listed in Schedule 5.23. The obligations of each of the Borrower and its
-------------
Subsidiaries under this subsection 10.18 shall survive repayment of the
----------------
Liabilities and the other Loan Documents.
10.19 Representations and Warranties, etc. Anything to the contrary
-----------------------------------
contained herein notwithstanding, (i) each representation and warranty contained
in this Agreement or any of the other Loan Documents shall survive the execution
and delivery of this Agreement and the other Loan Documents and the making of
the Loans and the repayment of the Liabilities hereunder, (ii) each
representation and warranty contained in this Agreement and, except as otherwise
provided herein, each other Loan Document shall be remade on the date of each
Loan made hereunder, and (iii) each representation and warranty and other
covenant or
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obligation of Borrower or any Subsidiary contained in this Agreement or any
other Loan Document is made jointly and severally by the Borrower and each of
its Subsidiaries.
10.20 Treatment of Certain Information. The Borrower (a) acknowledges
--------------------------------
that services may be offered or provided to it (in connection with this
Agreement or otherwise) by each Bank or by one or more of their respective
subsidiaries or affiliates and (b) acknowledges that information delivered to
each Bank by the Borrower may be provided to each such subsidiary and affiliate.
10.21 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.
10.22 Time of the Essence. Time and punctuality shall be of the
--------------------
essence with respect to this Agreement, but no delay or failure of the Agent or
any Bank to enforce any of the provisions herein contained and no conduct or
statement of the Agent or any Bank shall waive or affect any of the Agent's or
any Bank's rights hereunder.
10.23 Closing Date. The Closing (the "Closing") under this Agreement
------------
shall occur (subject to all of the conditions contained herein) as of the date
on which the Borrower has completed the underwritten public offering of its
common stock pursuant to the Registration Statement, resulting in net proceeds
to the Borrower sufficient for the Borrower's Net Worth to be at least Forty-
Five Million Seven Hundred Fifty Thousand and 00/100 Dollars ($45,750,000.00) as
of such date (said date is hereinafter referred to as the "Closing Date").
Notwithstanding the preceding sentence to the contrary, this Agreement and all
of the transactions contemplated herein shall automatically terminate and be
null and void, and shall have no further force or effect, if the Closing Date
does not occur on or prior to July 11, 1996.
The parties hereto acknowledge and agree that all references contained in
(i) the Notes, (ii) all of the Security Agreements, the Assignments of
Receivables and Proceeds, the Joint Venture Pledge Agreements, the LLC Pledge
Agreement, the Unlimited Guaranties, and the Limited Guaranties referred to in
clauses (d), (e) and (f) of subsection 4.8 and (iii) all other agreements,
--------------
assignments, certificates, filings, instruments and other documents executed in
connection with the transactions contemplated herein to the words "dated of even
date herewith" shall mean and refer to the Closing Date.
[THE REMAINDER OF THIS PAGE IS LEFT INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, this Agreement has been duly executed as an instrument
under seal by the duly authorized representative of each party hereto, as of the
day and year first above written.
USTRUST AS AGENT
By:______________________________
Title:_____________________________
USTRUST
By:______________________________
Title:_____________________________
THE SUMITOMO BANK, LIMITED
By:______________________________
Title:_____________________________
By:______________________________
Title:_____________________________
STATE STREET BANK AND TRUST COMPANY
By:______________________________
Title:_____________________________
BANK OF BOSTON CONNECTICUT
By:______________________________
Title:_____________________________
MELLON BANK, N.A.
By:______________________________
Title:_____________________________
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THE BANK OF NEW YORK
By:_______________________________
Title:______________________________
FINE HOST CORPORATION
By:______________________________
Title:_____________________________
FINE HOST SERVICES CORPORATION
By:______________________________
Title:_____________________________
FINE HOST OF VERMONT, INC.
By:______________________________
Title:_____________________________
FANFARE, INC.
By:______________________________
Title:_____________________________
GLOBAL FANFARE, INC.
By:______________________________
Title:_____________________________
FINE HOST INTERNATIONAL CORPORATION
By:______________________________
Title:_____________________________
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CREATIVE FOOD MANAGEMENT, INC.
By:______________________________
Title:_____________________________
NORTHWEST FOOD SERVICE, INC.
By:______________________________
Title:_____________________________
TARRANT COUNTY CONCESSIONS, L.L.C.
By:______________________________
Title:_____________________________
SUN WEST SERVICES, INC.
By:______________________________
Title:_____________________________
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