EXHIBIT 10.11
FORM OF CREDIT AGREEMENT
AMONG
BANKBOSTON, N.A., AS ADMINISTRATIVE AGENT
CHASE BANK OF TEXAS, N.A., AS DOCUMENTATION AGENT
THE BANKS WHO ARE PARTIES HERETO
AND
NE RESTAURANT COMPANY, INC.
AND
BERTUCCI'S, INC.
BERTUCCI'S RESTAURANT CORP.
BERTUCCI'S SECURITIES CORPORATION
BERESTCO, INC.
SAL & VINNIE'S STEAKHOUSE INC.
BERTUCCI'S OF ANNE ARUNDEL COUNTY, INC.
BERTUCCI'S OF COLUMBIA, INC.
BERTUCCI'S OF MONTGOMERY COUNTY, INC.
BERTUCCI'S OF BEL AIR, INC.
BERTUCCI'S OF WHITE MARSH, INC.
BERTUCCI'S OF BALTIMORE COUNTY, INC.
Dated as of July 21, 1998
TABLE OF CONTENTS
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SECTION 1. DEFINITIONS AND RULES OF INTERPRETATION................. 2
SECTION 2. REVOLVING CREDIT FACILITY...............................15
SECTION 3. LETTER OF CREDIT FACILITY...............................17
SECTION 3.1 LETTER OF CREDIT COMMITMENT.............................17
SECTION 3.2 REIMBURSEMENT OBLIGATION OF THE BORROWER................18
SECTION 3.3. LETTER OF CREDIT PAYMENTS...............................19
SECTION 3.4. OBLIGATIONS ABSOLUTE....................................19
SECTION 3.5. RELIANCE BY ISSUER......................................20
SECTION 3.6. LETTER OF CREDIT FEE....................................20
SECTION 4. INTEREST; LATE FEE......................................20
SECTION 5. REPAYMENT AND PREPAYMENTS...............................22
SECTION 6. GENERAL PROVISIONS......................................24
SECTION 7. FEES AND PAYMENTS.......................................26
SECTION 8. GUARANTIES; JOINT AND SEVERAL OBLIGATIONS...............27
SECTION 9. REPRESENTATIONS AND WARRANTIES..........................30
SECTION 10. CONDITIONS PRECEDENT....................................33
SECTION 11. COVENANTS...............................................38
SECTION 12. EVENTS OF DEFAULT; ACCELERATION.........................47
SECTION 13. SET OFF.................................................50
SECTION 14. THE BANK AGENTS.........................................50
SECTION 15. ASSIGNMENT AND PARTICIPATIONS...........................54
SECTION 16. CONSENTS, AMENDMENTS, WAIVERS, ETC. ....................57
SECTION 17. MISCELLANEOUS...........................................58
CREDIT AGREEMENT
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This CREDIT AGREEMENT (this "Agreement") is made as of July 21, 1998, among
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(a) NE RESTAURANT COMPANY, INC. (the "Borrower"); (b) each of the Guarantors (as
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hereinafter defined) of the Borrower appearing on the signature page hereto as a
"Guarantor"; (c) BANKBOSTON, N.A., a national banking association, CHASE BANK OF
TEXAS, N.A., a national banking association, and such other financial
institutions which, in accordance with (S)15 hereafter become parties hereto as
Banks (individually, a "Bank" and collectively, the "Banks"); (d) BANKBOSTON,
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N.A., as administrative agent for the Banks (the "Administrative Agent"); and
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(e) CHASE BANK OF TEXAS, N.A., as documentation agent for the Banks (the
"Documentation Agent").
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W I T N E S S E T H:
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WHEREAS, the Borrower and BankBoston, N.A. ("BKB") are parties to that
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certain Amended and Restated Revolving Credit and Term Loan Agreement dated as
of October 20, 1994, as amended (the "Original Agreement") pursuant to which the
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Borrower issued its Amended and Restated Note, as amended, in the principal
amount of $22,000,000 payable to BKB (the "Original Note");
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WHEREAS, the Borrower and NERC Acquisition Corp., a wholly-owned subsidiary
of the Borrower, are parties with Bertucci's, Inc., a Massachusetts corporation
("Bertucci's"), to a Merger Agreement dated as of May 13, 1998 (the "Merger
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Agreement") providing for the acquisition (the "Acquisition") by the Borrower or
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NERC Acquisition Corp. of all of the issued and outstanding shares of capital
stock of Bertucci's;
WHEREAS, contemporaneously with the execution of this Agreement, the
Borrower has issued its unsecured 10 3/4% Senior Notes due July 20, 2008 (the
"Senior Unsecured Notes"). The net proceeds from the offering of the Senior
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Unsecured Notes will be used by the Borrower, together with the proceeds of a
private placement of common stock of the Borrower pursuant to the Equity
Purchase Agreements (as defined below) to fund the Acquisition, to repay the
Original Note and all other obligations of the Borrower to BKB under the
Original Agreement, to repay certain obligations of Bertucci's to BKB and to pay
fees and expenses related to the Acquisition;
WHEREAS, in order to provide a portion of the funds needed to consummate
the Acquisition and to provide funds for working capital, expansion and general
corporate purposes, the Borrower has requested the Banks to provide the Borrower
with a senior secured revolving credit facility in the principal amount of up to
$20,000,000;
WHEREAS, the Bank Agents (as defined below) and the Banks are willing,
subject to the terms and conditions set forth herein, to provide such credit
facility to the Borrower;
NOW THEREFORE, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS AND RULES OF INTERPRETATION:
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(a) Except for certain capitalized terms whose definitions are incorporated
herein by reference in accordance with the following sentence, all capitalized
terms used herein shall have the meanings assigned to them below. Except as
otherwise defined herein, terms defined in the Indenture (as defined below) and
incorporated herein by reference shall have the meanings set forth in the
Indenture as if the same had been set forth herein in full; provided, however,
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all such terms shall survive the termination, expiration or other defeasance of
the Indenture for purposes of this Agreement.
Acquisition: As defined in the Preamble.
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Administrative Agent: As defined in the Preamble.
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Affected Bank: As defined in (S)6(e).
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Agreement: As defined in the preamble.
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Applicable Margin: For any calendar quarter, the applicable percentage set
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forth below opposite the Funded Debt Leverage Ratio as of the end of the Most
Recent Reference Period:
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APPLICABLE MARGINS
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Funded Debt Applicable Margin for Applicable Margin
Leverage Ratio Base Rate Loans for LIBOR Loans
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Greater than or 0.75% 2.50%
equal to 4.50:1.0
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Less than 4.50:1.00 0.50% 2.25%
but greater than or
equal to 3.50:1.00
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Less than 3.50:1.0 0.25% 2.00%
but greater than or
equal to 3.0:1.0
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Less than 3.0:1.0 0.00% 1.75%
but greater than or
equal to 2.50:1.0
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Less than 2.50:1.0 0.00% 1.50%
but greater than or
equal to 2.0:1.0
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Less than 2.0:1.0 0.00% 1.25%
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Notwithstanding the foregoing, in the event that the Banks shall not have
received the financial statements and certificates required to be delivered to
them pursuant to Section 11 with respect to such Most Recent Reference Period
prior to the first day of the calendar quarter for which such Applicable Margins
are to be determined, the Applicable Margins for such calendar quarter shall
(until all of such financial statements and certificates are delivered to the
Banks) be the highest of the Applicable Margins specified above.
Approval: The approval of the Borrower of one or more Eligible Assignees
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pursuant to (S)15(a), in writing and signed by a representative of the Borrower.
The Borrower shall be deemed to have granted such Approval with respect to any
such assignee(s) submitted by a Bank if it fails to approve or disapprove of a
proposed assignee submitted in writing by a Bank within two (2) Business Days
after receipt of such submission.
Assignment and Acceptance: As defined in (S)15.
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Bank Agents: Collectively, the Administrative Agent and the Documentation
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Agent.
Base Rate: The higher of (a) the annual rate of interest announced from
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time to time by BKB at its head office in Boston, Massachusetts, as its "base
rate" or (b) one-half of one percent (1/2%) above the Federal Funds Effective
Rate. For the purposes of this definition, "Federal Funds Effective Rate" shall
mean for any day, the rate per annum equal to the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the average of the quotations for such day on such
transactions received by the Bank from three funds brokers of recognized
standing selected by the Bank.
Base Rate Loan: A Loan for which interest is calculated with reference to
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the Base Rate pursuant to (S)4(a)(i).
Borrower: As defined in the Preamble.
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Business Day: (a) For all purposes other than as provided in clause (b)
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below, any day other than a Saturday, Sunday or legal holiday on which banks in
Boston, Massachusetts are opened for the conduct of a substantial part of their
commercial banking business; and (b) with respect to all notices and
determinations in connection with, payments of principal and interest
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on, LIBOR Loans, any day that is a Business Day described in clause (a) above
and that is also a day for trading by and between banks in U.S. Dollars in the
London interbank market.
Capital Assets: Fixed assets, both tangible (such as land, buildings,
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fixtures, machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises and good will); provided that Capital Assets shall not
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include any item customarily charged directly to expense or depreciated over a
useful life of twelve (12) months or less in accordance with GAAP.
Capital Expenditures: Amounts paid or indebtedness incurred by any entity
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in connection with the purchase or lease by such entity of Capital Assets that
would be required to be capitalized and shown on the balance sheet of such
entity in accordance with GAAP.
Capitalized Leases: Leases under which an entity is the lessee or obligor,
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the discounted future rental payment obligations under which are required to be
capitalized on the balance sheet of such entity in accordance with GAAP.
Change of Control: As defined in the Indenture, such definition being
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hereby incorporated by reference.
Charter Documents: The Certificate of Incorporation and By-laws (or similar
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documents) of the Borrower and its Subsidiaries.
Closing Date: The date hereof.
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Commitment: With respect to each Bank, the amount set forth on Exhibit A
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hereto as the amount of such Bank's commitment to make Revolving Credit Loans
to, and to participate in the issuance, extension and renewal of Letters of
Credit for the account of, the Borrower, as the same may be reduced from time to
time in accordance with the provisions hereof; or if such commitment is
terminated in accordance with the provisions hereof, zero.
Commitment Percentage: With respect to each Bank, the percentage set forth
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on Exhibit A hereto as such Bank's percentage of the aggregate Commitments of
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all of the Banks.
Consent: In respect of any person or entity, any permit, license or
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exemption from, approval, consent of, registration or filing with any local,
state or federal governmental or regulatory agency or authority, required under
applicable law.
Consolidated or consolidated: With reference to the Financials, the
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financial statements of the Borrower and Subsidiaries consolidated in accordance
with GAAP.
Conversion Request: A notice, in the form of Exhibit D hereto, given by the
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Borrower to the Administrative Agent of the Borrower's election to convert or
continue a Loan in accordance with (S)4(d) of the Agreement.
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Date-Sensitive Data: Any data of any type that includes date information
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or which is otherwise derived from or dependent on date information.
Date-Sensitive System: Any software or hardware system or component,
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including any electronic or electronically controlled system, that processes any
Date-Sensitive Data and that is installed, in development or on order.
Default: An event or act which with the giving of notice and/or the lapse
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of time would become an Event of Default.
Development Agreement(s): (i) the Development Agreement dated as of May
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17, 1994 between the Franchisor and the Borrower, as successor to NE Restaurant
Company Limited Partnership, as amended by Amendment of Development Agreement,
as of June 1, 1997, (ii) the Development Agreement dated as June 23, 1997
between the Franchisor and the Borrower, as amended by First Amendment to On the
Border Development Agreement dated as of March 9, 1998, as the same may be
further amended and in effect from time to time (the "On the Border Development
Agreement").
Discretionary Capital Expenditures: All Capital Expenditures which are not
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Non-Discretionary Capital Expenditures.
Dollars or $: Dollars in lawful currency of the United States of America.
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Drawdown Date: In respect of any Revolving Credit Loan, the date on which
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the Revolving Credit Loan is made to the Borrower, and the date on which the
Revolving Credit Loan is converted or continued in accordance with (S)4(d) of
this Agreement.
EBITDA: For any period, the Borrower's Consolidated EBITDA (as defined in
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the Indenture, such definition being hereby incorporated by reference).
Eligible Assignee: Any of (a) a commercial bank or finance company
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organized under the laws of the United States, or any State thereof or the
District of Columbia, and having total assets in excess of $1,000,000,000; (b) a
savings and loan association or savings bank organized under the laws of the
United States, or any State thereof or the District of Columbia, and having a
net worth of at least $250,000,000 calculated in accordance with GAAP; (c) a
commercial bank organized under the laws of any other country which is a member
of the Organization for Economic Cooperation and Development (the "OECD"), or a
political subdivision of any such country, and having total assets in excess of
$1,000,000,000, provided that such bank is acting through a branch or agency
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located in the country in which it is organized or another country which is also
a member of the OECD and, provided, further, so long as no Event of Default has
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occurred and is continuing, the Borrower shall have given its consent, in
writing, to the identity of such bank, which consent shall not be unreasonably
withheld or delayed; and (d) if, but only if, any Event of Default has occurred
and is continuing, any other bank, insurance company,
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commercial finance company or other financial institution or other person
approved by the Administrative Agent, such approval not to be unreasonably
withheld.
Environmental Laws: All laws pertaining to environmental matters, including
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without limitation, the Resource Conservation and Recovery Act, the
Comprehensive Environmental Response Compensation and Liability Act of 1980, the
Superfund Amendments and Reauthorization Act of 1986, the Federal Clean Water
Act, the Federal Clean Air Act, the Toxic Substances Control Act, in each case
as amended, and all rules, regulations, judgments, decrees, orders and licenses
arising under all such laws.
Equity Offering: As defined in the Indenture, such definition being hereby
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incorporated by reference.
Equity Purchase Agreements: The Stock Subscription Agreements dated as of
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April 15, 1998 and as of May 26, 1998 between the Borrower and the Investors
(defined therein), and all documents executed in connection therewith.
ERISA: The Employee Retirement Income Security Act of 1974, as amended, and
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all rules, regulations, judgments, decrees, and orders arising thereunder.
Event of Default: Any of the events listed in (S)12 hereof.
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Fee Letters: The letter agreements between the Borrower and the
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Administrative Agent dated as of July 21, 1998 and between the Borrower and the
Documentation Agent dated as of July 21, 1998.
Financials: In respect of any period, the consolidated balance sheet of the
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Borrower as at the end of such period, and the related consolidated statement of
income and statement of cash flow for such period, each setting forth in
comparative form the figures for the previous comparable fiscal period and the
figures of the budget for the Borrower for such fiscal period (to the extent
available), all in reasonable detail and prepared in accordance with GAAP.
Fixed Obligations: For any Reference Period, an amount equal to the sum of
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(a) all payments of principal on Funded Debt that become due and payable or that
are to become due and payable during such Reference Period, plus (b) the
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aggregate liability of the Borrower and its Subsidiaries for interest on
Indebtedness and payments by the Borrower for commitment fees under this
Agreement during such Reference Period, plus (c) Rent that became due and
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payable or that is to become due and payable during such Reference Period.
Forward Commitment: Collectively, the commitment letters dated May 28,
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1997 and April 30, 1998 between FFCA Acquisition Corporation and the Borrower
for up to an aggregate of sixteen (16) new restaurant loans, as amended or
restated from time to time solely for the purposes of (i) reflecting the
identity of the applicable Site Lessor or Site Lessors to act
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as borrower thereunder and (ii) conforming the terms thereof with the terms of
the FFCA Loan Documents.
Forward Commitment Documents: Collectively, the documents executed
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pursuant to the Forward Commitment between the applicable Site Lessor, as
borrower, and FFCA Acquisition Corporation (or an affiliate), as Bank (as
amended, restated, modified or supplemented and in effect from time to time).
Forward Commitment Transactions: The transactions evidenced by the Forward
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Commitment Documents.
FFCA Loan Documents: Collectively, (i) the Loan Agreement dated as of
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August 6, 1997 between NERC Limited Partnership, as borrower, and FFCA
Acquisition Corporation, as Bank, (ii) the Loan Agreement dated as of June 30,
1998 between NERC Limited Partnership II, as borrower, and FFCA Acquisition
Corporation, as Bank and (iii) the related promissory notes, mortgages and other
documents executed in connection thereof (as amended, restated, modified or
supplemented and in effect from time to time).
FFCA-Related Lease: A lease executed by the Borrower, as lessee, and a
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Site Lessor, as lessor, for the lease or sublease, as the case may be, of Real
Estate and related restaurant equipment whether or not resulting from a
sale/leaseback transaction (but not liquor licenses and rights under Franchise
Agreements or Development Agreements).
Funded Debt: As at any date of determination, an amount equal to the
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aggregate amount of consolidated Indebtedness of the Borrower and its
Subsidiaries (including the Loans, the Maximum Drawing Amount and any Unpaid
Reimbursement Obligations) relating to the borrowing of money or the obtaining
of credit or in respect of Capitalized Leases.
Funded Debt Leverage Ratio: In relation to any Reference Period, the ratio
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of (i) Funded Debt at the end of such Reference Period to (ii) EBITDA for such
Reference Period; provided, however, for the Reference Period ended December 31,
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1998, the Funded Debt Leverage Ratio shall be calculated solely by reference to
the period from October 1, 1998 through December 31, 1998, with EBITDA for such
period being multiplied by 4; for the Reference Period ended March 31, 1999, the
Funded Debt Leverage Ratio shall be calculated solely by reference to the period
from October 1, 1998 through March 31, 1999, with EBITDA for such period being
multiplied by 2; for the Reference Period ended June 30, 1999, the Funded Debt
Leverage Ratio shall be calculated solely by reference to the period from
October 1, 1998 through June 30, 1999, with EBITDA for such period being
multiplied by 4/3.
Franchise Agreement(s). Collectively, all of and, individually, each of the
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restaurant franchise agreements with respect to which the Borrower is a
franchisee, and all documents and instruments required to be delivered pursuant
to such franchise agreements, as such agreements may be amended and in effect
from time to time.
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Franchisor: Brinker International, Inc., a Delaware corporation.
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GAAP: Generally accepted accounting principles consistent with those
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adopted by the Financial Accounting Standards Board and its predecessor, as in
effect from time to time, consistently applied.
Guarantor: As defined in (S)6(f).
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Indebtedness: In respect of any entity, all obligations, contingent and
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otherwise, that in accordance with GAAP should be classified as liabilities,
including without limitation (a) all debt obligations, (b) all liabilities
secured by Liens, (c) all guarantees and (d) all liabilities in respect of
bankers' acceptances or letters of credit.
Indenture: The Indenture dated as of July 20, 1998 among the Borrower, the
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Guarantors and the Trustee, pursuant to which the Senior Unsecured Notes have
been issued.
Interest Payment Date: (a) In the event a Loan is maintained at the Base
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Rate, the last day of each calendar quarter; and (b) in the event a Loan is
maintained at the LIBOR Rate in respect of which the Interest Period is (i) 3
months or less, the last day of such Interest Period and (ii) more than 3
months, each date that is 3 months and/or 6 months from the first day of such
Interest Period and, in addition, the last day of the Interest Period.
Interest Period: With respect to any Loan (a) initially, the period
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commencing on the Drawdown Date of the Loan and ending on the last day of one of
the periods set forth below, as selected by the Borrower in a Loan Request: (i)
if a Loan is to be maintained at the Base Rate, the last Business Day of the
calendar quarter and (ii) if a Loan is to be maintained at the LIBOR Rate, one
(1) month, two (2) months, three (3) months, six (6) months or nine (9) months;
and (b) thereafter, each period commencing on the last day of the next preceding
Interest Period applicable to the Loan and ending on the last day of one of the
periods set forth above, as selected by the Borrower in a Conversion Request;
provided that all of the foregoing provisions relating to Interest Periods are
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subject to the following:
(A) if any Interest Period during which a Loan is maintained at the LIBOR
Rate would otherwise end on a day that is not a Business Day, that Interest
Period shall be extended to the next succeeding Business Day unless the result
of such extension would be to carry such Interest Period into another calendar
month, in which event such Interest Period shall end on the immediately
preceding Business Day;
(B) if any Interest Period during which a Loan is maintained at the Base
Rate would end on a day that is not a Business Day, that Interest Period shall
end on the next succeeding Business Day;
(C) any Interest Period during which a Loan is maintained at the LIBOR Rate
that begins on the last Business Day of a calendar month (or on a day for which
there is no
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numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month; and
(D) in no event may the Borrower select an Interest Period which would
extend beyond the Maturity Date.
Lease(s): Collectively, all of and, individually, each of the leases and
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subleases of real property with respect to which the Borrower is the lessee or
sublessee, and all documents and instruments delivered pursuant to such
agreements, as such agreements may be amended and in effect from time to time.
Letter of Credit: As defined in (S)3.1(a).
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Letter of Credit Application: As defined in (S)3.1(a).
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Letter of Credit Fee: As defined in (S)3.6.
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Letter of Credit Participation: As defined in (S)3.1(d).
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LIBOR Base Rate. With respect to each day during each Interest Period
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pertaining to any LIBOR Loan, the rate per annum determined by the
Administrative Agent to be the arithmetic mean of the offered rates for deposits
in Dollars with a term comparable to such Interest Period that appears on the
Telerate British Bankers Assoc. Interest Settlement Rates Page (as defined
below) at approximately 11:00 A.M., London time, on the second full Business Day
preceding the first day of such Interest Period; provided, however, that if
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there shall at any time no longer exist a Telerate British Bankers Assoc.
Interest Settlement Rates Page, the term "LIBOR Base Rate" shall mean, with
respect to each day during each Interest Period pertaining to any LIBOR Loan,
the rate per annum equal to the rate at which the Administrative Agent is
offered Dollar deposits at or about 10:00 A.M., Boston time, two (2) Business
Days prior to the beginning of such Interest Period in the London interbank
deposit market where the eurodollar and foreign currency and exchange operations
in respect of its LIBOR Loans are then being conducted for delivery on the first
day of such Interest Period for the number of days comprised therein and in an
amount comparable to the amount of its LIBOR Loan to be outstanding during such
Interest Period. As used herein, the "Telerate British Bankers Assoc. Interest
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Settlement Rates Page" means the display designated as Page 3750 on the Telerate
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System Incorporated Service (or such other page as may replace such page on such
service for the purpose of displaying the rates at which Dollar deposits are
offered by leading banks in the London interbank deposit market).
LIBOR Loan. A Loan for which interest is calculated with reference to the
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LIBOR Rate pursuant to (S)4(a)(ii).
LIBOR Rate. With respect to each day during each Interest Period
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pertaining to a LIBOR Loan, a rate per annum determined for such day in
accordance with the following formula (rounded upward, if necessary, to the
nearest 1/16th of 1%):
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LIBOR Base Rate
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1.00 - LIBOR Reserve Requirements
LIBOR Reserve Requirements. For any day as applied to a LIBOR Loan, the
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aggregate (without duplication) of the rates (expressed as a decimal fraction)
of reserve requirements in effect on such day (including without limitation
basic, supplemental, marginal and emergency reserves under any regulations of
the Board of Governors of the Federal Reserve System or other governmental
authority having jurisdiction with respect thereto) prescribed for eurocurrency
funding (currently referred to as "Eurocurrency Liabilities" in Regulation D of
such Board) maintained by a member Bank of the Federal Reserve System.
Liens: Any encumbrance, mortgage, pledge, hypothecation, charge,
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restriction or other security interest of any kind securing any obligation of
any entity or person.
Loans: The Revolving Credit Loans.
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Loan Documents: Collectively, (i) this Agreement, (ii) the Notes, (iii)
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the Letter of Credit Applications, (iv) the Security Documents, (v) the Fee
Letters, and (vi) any and all other agreements, instruments, certificates or
reports executed by the Borrower or any of its Subsidiaries in connection with
this Agreement, in each case as from time to time amended or supplemented.
Loan Request: As defined in (S)2(b) of the Agreement.
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Majority Banks: As of any date, the Banks holding at least sixty-six and
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two-thirds percent (66 2/3%) of the outstanding principal amount of the Notes on
such date; and if no such principal amount is outstanding, the Banks whose
aggregate Commitments constitute at least sixty-six and two-thirds percent of
the Total Commitment.
Materially Adverse Effect: Any materially adverse effect on the financial
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condition or business operations of the Borrower and its Subsidiaries taken as a
whole or material impairment of the ability of the Borrower or any Guarantor to
perform its obligations hereunder or under any of the other Loan Documents.
Maturity Date: July 21, 2001; provided, that the Borrower may request that
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the Maturity Date be extended for an additional year, ninety (90) days prior to
July 21, 2001; provided, further, that if the Banks, in their sole discretion
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shall so agree in writing, the Maturity Date shall be such later date.
Maximum Drawing Amount: The maximum aggregate amount from time to time that
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beneficiaries may draw under outstanding Letters of Credit, as such aggregate
amount may be reduced from time to time pursuant to the terms of the Letters of
Credit.
Maximum Unused Commitment: With respect to any Bank at any time, (a) such
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Bank's Commitment at such time minus (b) the sum of (i) the aggregate principal
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amount of all
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Revolving Credit Loans made by such Bank which are outstanding at such time and
Unpaid Reimbursement Obligations owing to such Bank, plus (ii) without
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duplication, such Bank's pro rata share of the Maximum Drawing Amount of all
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Letters of Credit issued and outstanding at such time.
Mortgages: Collectively, the mortgages or deeds of trust, delivered by the
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Borrower or a Guarantor, as the case may be, to the Administrative Agent on
behalf of the Banks with respect to the fee interests of such Person in the
Restaurant Sites, on or after the date hereof, in form and substance
satisfactory to the Administrative Agent.
Most Recent Reference Period: As to any calendar quarter, the Reference
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Period ended three (3) months prior to the first day of such calendar quarter.
Net Asset Sale Proceeds: The cash proceeds of the sale or disposition of
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assets (including by way of merger), and the cash proceeds of any insurance
payments on account of the destruction or loss of property, by the Borrower or
any Guarantor after the Closing Date, net of payment of (a) any Funded Debt
permitted by (S)11(i)(E) (purchase money indebtedness and Capitalized Leases)
secured by assets being sold in such transaction (or, in the case of insurance
proceeds, the assets that are the subject of the relevant damage or loss)
required to be paid from such proceeds, (b) income, capital gains or other taxes
that, as estimated by the Borrower in good faith, will be required to be paid by
the Borrower in cash as a result of, and within 9 months after, such sale or
disposition, (c) all reasonable reserves for liabilities resulting from the sale
of assets and (d) all reasonable expenses of the Borrower or any Guarantor
payable in connection with the sale or disposition.
Net Worth: The result of (a) the consolidated assets of the Borrower
---------
determined in accordance with GAAP, minus (b) the consolidated liabilities of
-----
the Borrower determined in accordance with GAAP, minus (c) any write-up in the
------
book value of the consolidated assets of the Borrower since December 31, 1997.
Non-Affected Banks: As defined in (S)6(e).
------------------
Non-Discretionary Capital Expenditures: All Capital Expenditures made by
--------------------------------------
the Borrower or any Subsidiary with respect to the Borrower's or any
Subsidiary's restaurants or offices other than Capital Expenditures made in
connection with newly opened restaurants and offices.
Notes: As defined in (S)2(c).
-----
Obligations: All indebtedness, obligations and liabilities of the Borrower
-----------
and the Guarantors to the Banks and the Bank Agents existing on the date of this
Agreement or arising thereafter, direct or indirect, joint or several, absolute
or contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise, arising or
incurred under this Agreement or any other Loan Document or in respect of
-11-
any of the Loans or Letters of Credit or the Notes or other instruments at any
time evidencing any thereof.
Operating Cash Flow: For any Reference Period, an amount to equal EBITDA
-------------------
for such Reference Period, plus Rent for such Reference Period, minus (i) Non-
---- -----
Discretionary Capital Expenditures made by the Borrower and its Subsidiaries
during such Reference Period, and (ii) the aggregate amount of all Federal,
state and local income taxes paid in cash by the Borrower and its Subsidiaries
during such Reference Period.
Permitted Asset Disposition: Any disposition of assets by the Borrower or
---------------------------
any Guarantor in the ordinary course of business, including without limitation,
the closing of any restaurants determined by the Borrower to not be sufficiently
profitable.
Permitted Investments: Investments by the Borrower or any Guarantor in (i)
---------------------
the Borrower or in any Guarantor or any Site Lessor; (ii) another Person if as a
result of such investment such other Person is merged or consolidated with or
into, or transfers or conveys all or substantially all its assets to, the
Borrower or any Guarantor; provided, however, that such Person's primary
business is a similar business; (iii) payroll, travel, relocation and similar
advances to cover matters that are expected at the time of such advances
ultimately to be treated as expenses for accounting purposes and that are made
in the ordinary course of business; (iv) loans or advances to employees made in
the ordinary course of business not exceeding in the aggregate $1,000,000 at any
time; (v) stock, obligations or securities received in settlement of debts
created in the ordinary course of business and owing to the Borrower or any
Guarantor or in satisfaction of judgments; (vi) investments in a similar
business in the form of joint ventures, operating agreements, partnership
agreements or other similar or customary agreements, interests or arrangements
with unaffiliated third parties, the aggregate outstanding amount of which does
not exceed $1,000,000 at any time; (vii) investments acquired by the Borrower or
any Guarantor in connection with or as a result a bankruptcy, insolvency,
workout, reorganization, recapitalization or similar arrangement with respect to
the obligor under or issuer of any accounts receivable or investment held by the
Borrower or any Guarantor; (viii) investments made solely in exchange for the
issuance of capital stock of the Borrower; and (ix) any investment existing on
the date of this agreement as set forth on Schedule 11(b)(iii).
-------------------
Permitted Liens: As defined in (S)11(b)(ii).
---------------
Permitted Special Purpose Transaction: As defined in (S)11(b)(xiii).
-------------------------------------
Person: Any individual, corporation, partnership, trust, limited liability
------
company, unincorporated association, business, or other legal entity, or any
government or any governmental agency or political subdivision thereof.
Real Estate: All real property at any time owned or leased (as lessee or
-----------
sublessee) by the Borrower or any Guarantor.
Reference Period: Each period of four consecutive fiscal quarters of the
----------------
Borrower.
-12-
Reimbursement Obligations: The Borrower's obligation to reimburse the Banks
-------------------------
on account of any drawing under any Letter of Credit as provided in Section 3.2.
Rent: The aggregate amount of cash payments with respect to rent and
----
related payments made by the Borrower and its Subsidiaries, determined in
accordance with GAAP.
Requirement of Law: In respect of any person or entity, any law, treaty,
------------------
rule, regulation or determination of an arbitrator, court, or other governmental
authority, in each case applicable to or binding upon such person or entity or
affecting any of its property.
Restaurant Sites: The (i) real property and improvements thereon at the
----------------
five (5) locations set forth on Schedule 1 hereto owned in fee and (ii) nine (9)
----------
months after the restaurant is opened at a new location acquired after the date
hereof, whether leasehold or owned in fee, real property and improvements
thereon, but only if the Borrower or Guarantor, as the case may be, has not
entered into a Special Purpose Transaction with respect to such location.
Restricted Asset Disposition: As defined in (S)5(c).
----------------------------
Revolving Credit Loans: Revolving credit loans made or to be made to the
----------------------
Borrower pursuant to (S)2 hereof.
Security Documents: As defined in (S)6(g).
------------------
Senior Unsecured Notes: As defined in the Preamble.
----------------------
Site Lessor: NERC Limited Partnership, a Delaware limited partnership, and
-----------
its corporate general partner NERC SPE, Inc., a Delaware corporation, NERC
Limited Partnership II, a Delaware limited partnership, and its corporate
general partner NERC SPE II, Inc., a Delaware corporation or other entity or
entities formed by the Borrower to act as a lessor or sublessor of Real Estate
in connection with the Forward Commitment Transactions or similar Special
Purpose Transactions otherwise permitted by this Agreement.
Special Purpose Transaction: As defined in the Indenture, such definition
---------------------------
being hereby incorporated by reference.
Subsidiary: Any corporation, association, trust, or other business entity
----------
of which the designated parent shall at any time own directly or indirectly
through a Subsidiary or Subsidiaries at least a majority (by number of votes) of
the outstanding Voting Stock.
Total Commitment: The sum of the Commitments of the Banks, as in effect
----------------
from time to time.
Total Interest Expense: For any period, the aggregate liability of the
----------------------
Borrower and its Subsidiaries for interest on Funded Debt, whether expensed or
capitalized, including payments
-13-
consisting of interest in respect of Capitalized Leases, and cash payments by
the Borrower and its Subsidiaries for commitment fees in connection with the
borrowing of money or obtaining of credit, determined in accordance with GAAP.
Total Liabilities: All consolidated liabilities of the Borrower and its
-----------------
Subsidiaries that in accordance with GAAP are properly classified as
liabilities.
Trustee: United States Trust Company of New York, as Trustee under the
-------
Indenture.
Type: As to any Loan, its nature as a loan maintained at the Base Rate or
----
at the LIBOR Rate.
Uniform Customs: With respect to any Letter of Credit, the Uniform Customs
---------------
and Practice for Documentary Credits (1993 Revision), International Chamber of
Commerce Publication No. 500 or any successor version thereto adopted by the
Administrative Agent in the ordinary course of its business as a Letter of
Credit issuer and in effect at the time of issuance of such Letter of Credit.
Unpaid Reimbursement Obligation: Any Reimbursement Obligation for which the
-------------------------------
Borrower does not reimburse the Administrative Agent on the date specified in,
and in accordance with, (S)3.2(a).
Voting Stock: Stock or similar interests, of any class or classes (however
------------
designated), the holders of which are at the time entitled, as such holders, to
vote for the election of a majority of the directors (or persons performing
similar functions) of the corporation, association, trust or other business
entity involved, whether or not the right so to vote exists by reason of the
happening of a contingency.
Year 2000 Compliant: (i) With respect to Date-Sensitive Data, that such
-------------------
data is in all material respects proper format and accurate for all dates in the
twentieth and twenty-first centuries and (ii) with respect to a Date-Sensitive
System, that such Date-Sensitive System accurately processes in all material
respects all Date-Sensitive Data, including for the twentieth and twenty-first
centuries, including but not limited to calculating, comparing, sequencing and
storing such Date-Sensitive Data (including all leap year considerations), when
used as a stand-alone system or in combination with other software or hardware.
(b) (i) Terms not specifically defined herein or not incorporated
herein by reference or defined by GAAP, which terms are defined
in the Uniform Commercial Code as in effect in Commonwealth of
Massachusetts, have the meanings assigned to them therein.
(ii) Reference to a particular "(S)" refers to that section of this
Agreement unless otherwise indicated.
-14-
(iii) When used herein as a reference to the end date of any fiscal
period of the Borrower and its Subsidiaries, notwithstanding that
the Borrower or any Subsidiary's fiscal year and fiscal quarters
may not in any year fall on such dates, all references to
December 31 (or 12/31), March 31 (or 3/31), June 30 (or 6/30) and
September 30 (or 9/30) of any year shall be deemed to mean and
refer to the actual end date of the Borrower's or such
Subsidiary's fiscal year, first fiscal quarter, second fiscal
quarter and third fiscal quarter, respectively.
SECTION 2. REVOLVING CREDIT FACILITY.
-------------------------
(a) Subject to the terms and conditions set forth in this Agreement, each
of the Banks severally agrees to lend to the Borrower and the Borrower may
borrow, repay, and reborrow from time to time between the date hereof and the
Maturity Date upon notice by the Borrower to the Administrative Agent given in
accordance with (S)2(b), such sums as are requested by the Borrower up to a
maximum aggregate amount outstanding (after giving effect to all amounts
requested) at any one time equal to such Bank's Commitment minus such Bank's
-----
Commitment Percentage of the sum of the Maximum Drawing Amount and all Unpaid
Reimbursement Obligations; provided, however, that the sum of the outstanding
-------- -------
amount of the Revolving Credit Loans (after giving effect to all amounts
requested) plus the Maximum Drawing Amount and all Unpaid Reimbursement
----
Obligations shall not at any time exceed the Total Commitment. The Revolving
Credit Loans shall be made pro rata in accordance with each Bank's Commitment
--- ----
Percentage. Each request for a Revolving Credit Loan hereunder shall constitute
a representation and warranty by the Borrower that the conditions set forth in
(S)9(a) and (b), in the case of Revolving Loans to be made on the date hereof,
and (S)9(b), in the case of all other Revolving Credit Loans, have been
satisfied on the date of such request.
(b) The Borrower shall give to the Administrative Agent telephonic notice
(immediately confirmed in writing) (a "Loan Request") of each Revolving Credit
------------
Loan requested hereunder not later than (i) 12:00 noon (Boston time) on the
proposed Drawdown Date (which must be a Business Day) if the Revolving Credit
Loan is to be at the Base Rate or (ii) 12:00 noon three (3) Business Days prior
to the proposed Drawdown Date if the Revolving Credit Loan is to be at the LIBOR
Rate. Such notice shall be in the form of Exhibit C hereto and shall specify
---------
(i) the proposed Drawdown Date of the Revolving Credit Loan and the amount
requested ($200,000 minimum (or larger integral multiples thereof) in the case
of a Base Rate Loan and $500,000 minimum (or larger integral multiples thereof)
in the case of a LIBOR Loan), (ii) the Interest Period for such Revolving Credit
Loan and (iii) the Type of the Revolving Credit Loan and shall include the
Borrower's certification as to satisfaction of the conditions set forth in
(S)9(b) hereof and that, after giving effect to the proposed Revolving Credit
Loan, the Borrower shall be in compliance with the covenants set forth in
(S)11(c). In no event shall more than ten (10) LIBOR Loans be outstanding at
any one time. Each request will irrevocably obligate the Borrower to borrow the
requested Revolving Credit Loan, and will be valid if given by an officer or
agent of the Borrower authorized to make such requests in a certificate of the
Borrower delivered to the Administrative Agent.
-15-
(c) The obligation of the Borrower to repay to the Banks the principal of
the Revolving Credit Loans and interest accrued thereon shall be evidenced by
separate promissory notes in the aggregate principal amount of the Total
Commitment executed and delivered by the Borrower and payable to the order of
each Bank in the principal amount equal to such Bank's Commitment, substantially
in the form of Exhibit B attached hereto (each, a "Note" and collectively the
--------- ----
"Notes").
(d) Unless terminated earlier pursuant to the terms of this Agreement, the
Total Commitment shall be in effect from the date hereof through the Maturity
Date. Upon the occurrence of the Maturity Date, the Total Commitment shall be
reduced to zero.
(e) Notwithstanding the notice requirements set forth in clause (b) of this
Section 2, so long as the Total Commitment is then in effect and the conditions
set forth in Section 9(a) hereof have been met, the Banks shall make Revolving
Credit Loans to the Borrower sufficient to pay to the Administrative Agent any
Unpaid Reimbursement Obligations on the date on which such Reimbursement
Obligations become Unpaid Reimbursement Obligations. The Borrower hereby
requests and authorizes the Banks to make from time to time such Revolving
Credit Loans by means of paying Unpaid Reimbursement Obligations. The Borrower
acknowledges and agrees that the making of such Revolving Credit Loans shall, in
each case, be subject to the provisions of this Agreement as if they were
Revolving Credit Loans requested pursuant to clause (b) of this Section 2,
including, without limitation, the conditions set forth in clause (a) of this
Section 2 and the conditions set forth in Section 9 hereof. All Revolving
Credit Loans made pursuant to this Section 2(e) shall be made as Base Rate
Loans. All actions taken by the Administrative Agent and the Banks pursuant to
the provisions of this Section 2(e) shall be conclusive and binding on the
Borrower.
(f) Not later than 2:00 p.m. (Boston time) on the proposed Drawdown Date of
any Revolving Credit Loans, each of the Banks will make available to the
Administrative Agent, at the Administrative Agent's head office, in immediately
available funds, the amount of such Bank's Commitment Percentage of the amount
of the requested Revolving Credit Loans. Upon receipt from each Bank of such
amount, and upon receipt of the documents required by (S)9(a) and (b) and the
satisfaction of the other conditions set forth therein, to the extent
applicable, the Administrative Agent will make available to the Borrower the
aggregate amount of such Revolving Credit Loans made available to the
Administrative Agent by the Banks. The failure or refusal of any Bank to make
available to the Administrative Agent at the aforesaid time and place on any
Drawdown Date the amount of its Commitment Percentage of the requested Revolving
Credit Loans shall not relieve any other Bank from its several obligation
hereunder to make available to the Administrative Agent the amount of such other
Bank's Commitment Percentage of any requested Revolving Credit Loans.
(g) The Administrative Agent may, unless notified to the contrary by any
Bank prior to a Drawdown Date, assume that such Bank has made available to the
Administrative Agent on such Drawdown Date the amount of such Bank's Commitment
Percentage of the Revolving Credit Loans to be made on such Drawdown Date, and
the Administrative Agent may (but it
-16-
shall not be required to), in reliance upon such assumption, make available to
the Borrower a corresponding amount. If any Bank makes available to the
Administrative Agent such amount on a date after such Drawdown Date, such Bank
shall pay to the Administrative Agent on demand an amount equal to the product
of (i) the average computed for the period referred to in clause (iii) below, of
the weighted average interest rate paid by the Administrative Agent for federal
funds acquired by the Administrative Agent during each day included in such
period, times (ii) the amount of such Bank's Commitment Percentage of such
-----
Revolving Credit Loans, times (iii) a fraction, the numerator of which is
-----
the number of days that elapse from and including such Drawdown Date to the date
on which the amount of such Bank's Commitment Percentage of such Revolving
Credit Loans shall become immediately available to the Administrative Agent, and
the denominator of which is 365. A statement of the Administrative Agent
submitted to such Bank with respect to any amounts owing under this paragraph
shall be prima facie evidence of the amount due and owing to the Administrative
----- -----
Agent by such Bank. If the amount of such Bank's Commitment Percentage of such
Revolving Credit Loans is not made available to the Administrative Agent by such
Bank within three (3) Business Days following such Drawdown Date, the
Administrative Agent shall be entitled to recover such amount from the Borrower
on demand, with interest thereon at the rate per annum applicable to the
Revolving Credit Loans made on such Drawdown Date.
SECTION 3. LETTER OF CREDIT FACILITY.
-------------------------
Section 3.1 LETTER OF CREDIT COMMITMENT.
---------------------------
(a) Subject to the terms and conditions hereof and the execution and
delivery by the Borrower of a letter of credit application on the Administrative
Agent's customary form (a "Letter of Credit Application"), so long as the
----------------------------
conditions set forth in Section 9 hereof have been met, the Administrative
Agent, on behalf of the Banks and in reliance upon the agreement of the Banks
set forth in (S)3.1(d), agrees, in its individual capacity, to issue, extend and
renew at any time prior to the date which is ninety (90) days prior to the
Maturity Date, for the account of the Borrower, standby letters of credit (each
a "Letter of Credit"), in such form as may be requested by the Borrower and
----------------
agreed to by the Bank; provided, however, that, after giving effect to such
-------- -------
request, (i) the sum of the Maximum Drawing Amount and all Unpaid Reimbursement
Obligations shall not exceed $4,000,000 at any one time, and (ii) the sum of the
outstanding principal amount of the Revolving Credit Loans plus the Maximum
----
Drawing Amount and all Unpaid Reimbursement Obligations shall not exceed the
Total Commitment. No Letter of Credit shall be issued, extended or renewed with
an expiration date occurring after the Maturity Date.
(b) Each Letter of Credit Application shall be completed to the
satisfaction of the Administrative Agent. In the event that any provision of
any Letter of Credit Application shall be inconsistent with any provision of
this Agreement, then the provisions of this Agreement shall, to the extent of
any such inconsistency, govern.
(c) Each Letter of Credit issued, extended or renewed hereunder shall,
among other things, provide for the payment of sight drafts for honor thereunder
when presented in
-17-
accordance with the terms thereof and when accompanied by the documents
described therein. Each Letter of Credit so issued, extended or renewed shall be
subject to the Uniform Customs.
(d) Each Bank severally agrees that it shall be absolutely liable, without
regard to the occurrence of any Default or Event of Default or any other
condition precedent whatsoever, to the extent of such Bank's Commitment
Percentage, to reimburse the Administrative Agent on demand for the amount of
each draft paid by the Administrative Agent under each Letter of Credit to the
extent that such amount is not reimbursed by the Borrower pursuant to (S)3.2
(such agreement for a Bank being called herein the "Letter of Credit
----------------
Participation" of such Bank). Each such payment made by a Bank shall be treated
- -------------
as the purchase by such Bank of a participating interest in the Borrower's
Reimbursement Obligation under (S)3.2 in an amount equal to such payment. Each
Bank shall share in accordance with its participating interest in any interest
which accrues pursuant to (S)3.2.
(e) The Borrower, the Guarantors , the Banks and the Bank Agents
acknowledge and agree that the letters of credit listed on Schedule 3.1(e)
---------------
attached hereto were issued by BKB on behalf of the Borrower or the Guarantors
pursuant to the terms of the Original Agreement and on behalf of various
Guarantors pursuant to the terms of such Guarantor's loan arrangements with BKB.
Upon the effectiveness of this Agreement, all such letters of credit shall be
deemed to be Letters of Credit issued by the Administrative Agent on behalf of
the Banks for the account of the Borrower in accordance with this (S)3.1(a).
SECTION 3.2 REIMBURSEMENT OBLIGATION OF THE BORROWER. In order to induce
----------------------------------------
the Administrative Agent to issue, extend and renew each Letter of Credit, the
Borrower hereby agrees to reimburse the Administrative Agent for or to pay the
Administrative Agent with respect to each Letter of Credit issued, extended or
renewed by the Administrative Agent hereunder,
(a) except as otherwise expressly provided in Section 3.2(b) and (c), on
each date that any draft presented under such Letter of Credit is honored by the
Administrative Agent, or the Administrative Agent otherwise makes a payment with
respect thereto, (i) the amount paid by the Administrative Agent under or with
respect to such Letter of Credit, and (ii) the amount of any taxes, fees,
charges or other costs and expenses whatsoever incurred by the Administrative
Agent or any Bank in connection with any payment made by the Administrative
Agent or any Bank under, or with respect to, such Letter of Credit;
(b) upon the reduction (but not termination) of the Total Commitment in
accordance with the provisions hereof to an amount less than the Maximum Drawing
Amount, an amount equal to the difference between the maximum Drawing Amount and
such reduced Total Commitment, which amount shall be held by the Administrative
Agent for the benefit of the Banks and the Administrative Agent as cash
collateral for all Reimbursement Obligations; and
(c) upon the termination of the Total Commitment in accordance with the
provisions hereof, or the acceleration of the Reimbursement Obligations with
respect to all Letters of Credit in accordance with Section 12, an amount equal
to the Maximum Drawing Amount, which
-18-
amount shall be held by the Administrative Agent for the benefit of the Banks
and the Administrative Agent as cash collateral for all Reimbursement
Obligations.
Unless funded by a Revolving Credit Loan pursuant to Section 2(e), each such
payment shall be made to the Administrative Agent at the Administrative Agent's
head office at 100 Federal Street, Boston, Massachusetts 02110 in immediately
available funds. Interest on any and all amounts remaining unpaid by the
Borrower under this Section 3.2 and not funded by a Revolving Credit Loan
pursuant to Section 2(e) shall accrue from the date such amounts become due and
payable (whether as stated in this Section 3.2, by acceleration or otherwise)
until paid in full (whether before or after judgment) (i) for the first two days
after such amounts have become due and payable, at the rate specified in Section
4(a)(i) as if such amounts were Base Rate Loans and (ii) thereafter at the rate
specified in Section 4(d), and shall in each case be payable to the
Administrative Agent on demand.
SECTION 3.3. LETTER OF CREDIT PAYMENTS. If any draft shall be presented or
-------------------------
other demand for payment shall be made under any Letter of Credit, the
Administrative Agent shall notify the Borrower of the date and the amount of the
draft presented or demand for payment and of the date and time when it expects
to pay such draft or honor such demand for payment. The responsibility of the
Administrative Agent to the Borrower and the Banks shall be only to determine
that the documents (including each draft) delivered under each Letter of Credit
in connection with such presentment shall be in conformity in all material
respects with such Letter of Credit. If either (x) the Borrower has not met the
conditions set forth in (S)2(e) for a Revolving Credit Loan to be made
sufficient to pay the Unpaid Reimbursement Obligation or (y) the Borrower fails
to reimburse the Administrative Agent as provided in (S)3.2 on or before the
date that such draft is paid or other payment is made by the Administrative
Agent, the Administrative Agent may at any time thereafter notify the Banks of
the amount of any such Unpaid Reimbursement Obligation. No later than 3:00 p.m.
(Boston time) on the Business Day next following the receipt of such notice,
each Bank shall make available to the Administrative Agent, at the
Administrative Agent's head office, in immediately available funds, such Bank's
Commitment Percentage of such Unpaid Reimbursement Obligation, together with an
amount equal to the product of (a) the average, computed for the period referred
to in clause (c) below, of the weighted average interest rate paid by the
Administrative Agent for federal funds acquired by the Administrative Agent
during each day included in such period, times (b) the amount equal to such
-----
Bank's Commitment Percentage of such Unpaid Reimbursement Obligation, times (c)
-----
a fraction, the numerator of which is the number of days that elapse from and
including the date the Administrative Agent paid the draft presented for honor
or otherwise made payment to the date on which such Bank's Commitment Percentage
of such Unpaid Reimbursement obligation shall become immediately available to
the Administrative Agent, and the denominator of which is 360.
SECTION 3.4. OBLIGATIONS ABSOLUTE. The Borrower's obligations under this
--------------------
Section 3 shall be absolute and unconditional under any and all circumstances
and irrespective of the occurrence of any Default or Event of Default or any
condition precedent whatsoever or any setoff, counterclaim or defense to payment
which the Borrower may have or have had against the Bank Agents, any Bank or any
beneficiary of a Letter of Credit. The Borrower further agrees
-19-
with the Administrative Agent and the Banks that the Administrative Agent and
the Banks shall not be responsible for, and the Reimbursement Obligations shall
not be affected by, among other things, the validity or genuineness of documents
or of any endorsements thereon, even if such documents should in fact prove to
be in any or all respect invalid, fraudulent or forged, or any dispute between
or among the Borrower, the beneficiary of any Letter of Credit or any financing
institution or other party to which any Letter of Credit may be transferred or
any claims or defenses whatsoever of the Borrower against the beneficiary of any
Letter of Credit or any such transferee. The Administrative Agent and the Banks
shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit. The Borrower agrees that
any action taken or omitted by the Administrative Agent or any Bank under or in
connection with each Letter of Credit and the related drafts and documents, if
done in good faith and in accordance with commercially reasonable banking
practices, shall be binding upon the Borrower and shall not result in any
liability on the part of the Administrative Agent or any Bank to the Borrower.
SECTION 3.5. RELIANCE BY ISSUER. To the extent not inconsistent with
------------------
Section 3.4, the Administrative Agent shall be entitled to rely, and shall be
fully protected in relying upon, any Letter of Credit, draft, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document believed by it to be genuine and correct and to have been signed, sent
or made by the proper person or entity and upon advice and statements of legal
counsel, independent accountants and other experts selected by the
Administrative Agent.
SECTION 3.6. LETTER OF CREDIT FEE. The Borrower shall, on the date of
--------------------
issuance or any extension or renewal of any Letter of Credit and at such other
time or times as such charges are customarily made by the Administrative Agent,
pay a fee (in each case, a "Letter of Credit Fee") to the Administrative Agent
--------------------
in respect of each Letter of Credit calculated at the per annum rate equal to
the greater of (x) one and one-half percent (1.50%) or (y) the rate of the
Applicable Margin for LIBOR Loans of the face amount of such Letter of Credit
plus the Administrative Agent's issuance fee equal to one-eighth of one percent
- ----
(0.125%) of the face amount of such Letter of Credit. The Borrower shall also
pay all amendment, negotiation or handling charges relating to such Letters of
Credit to the Administrative Agent at such times as such charges are customarily
made by the Administrative Agent. The Letter of Credit Fee (but not such
issuance, amendment, negotiation or handling fees) shall be for the accounts of
the Banks in accordance with their respective Commitment Percentages.
SECTION 4. INTEREST; LATE FEE.
------------------
(a) Prior to the Maturity Date, so long as no Default or Event of Default
is continuing:
(i) If a Loan is a Base Rate Loan, it shall bear interest for the
period commencing with the Drawdown Date thereof and ending on
the last day of the Interest Period with respect thereto at a
rate per annum which is
-20-
equal to the Base Rate, plus the Applicable Margin for Base Rate
----
Loans then in effect.
(ii) If a Loan is a LIBOR Loan, it shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last
day of the Interest Period with respect thereto at a rate per
annum which is equal to the LIBOR Rate plus the Applicable Margin
----
for LIBOR Loans in effect on the first day of such Interest
Period.
(b) The Borrower promises to pay interest on Base Rate Loans and LIBOR
Loans in arrears on each Interest Payment Date.
(c) While an Event of Default is continuing, amounts payable under any of
the Loan Documents shall bear interest (compounded monthly and payable on demand
in respect of overdue amounts) at a rate per annum which is equal to the sum of
(i) the rate of interest then applicable to such Loan plus (ii) two and one-half
----
percent (2.5%) until such amount is paid in full or (as the case may be) such
Event of Default has been cured or waived in writing by the Majority Banks
(after as well as before judgment). A late fee in an amount equal to five
percent (5%) of the amount of any principal or interest not paid within ten (10)
days of its due date shall be payable by the Borrower upon demand by the
Administrative Agent on behalf of the Banks.
(d) (i) The Borrower may elect from time to time to convert any
outstanding Revolving Credit Loan to a Revolving Credit Loan of
another Type, provided that (A) with respect to any such
conversion of a Revolving Credit Loan to a Base Rate Loan, the
Borrower shall give the Administrative Agent at least one (1)
Business Day prior written notice of such election; (B) with
respect to any such conversion of a Base Rate Loan to a LIBOR
Loan, the Borrower shall give the Administrative Agent at least
three (3) Business Days prior written notice of such election;
(C) with respect to any such conversion of a LIBOR Loan into a
Base Rate Loan, such conversion shall only be made on the last
day of the Interest Period with respect thereto and (D) no Loan
may be converted into a LIBOR Loan when any Default or Event of
Default has occurred and is continuing. All or any part of
outstanding Revolving Credit Loans of any Type may be converted
into a Revolving Credit Loan of another Type as provided herein,
provided that any partial conversion shall be in an aggregate
principal amount of $200,000 or a whole multiple of $100,000 in
excess thereof for Base Rate Loans and $500,000 or a whole
multiple of $100,000 in excess thereof for LIBOR Loans. Each
Conversion Request relating to the conversion of a Revolving
Credit Loan to a LIBOR Loan shall be irrevocable by the Borrower.
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(ii) Any Revolving Credit Loan of any Type may be continued as a
Revolving Credit Loan of the same Type upon the expiration of an
Interest Period with respect thereto by compliance by the
Borrower with the notice provisions contained in Section 4(d)(i);
provided that no LIBOR Loan may be continued as such when any
Default or Event of Default has occurred and is continuing, but
shall be automatically converted to a Base Rate Loan on the last
day of the Interest Period relating thereto ending during the
continuance of any Default or Event of Default of which officers
of the Administrative Agent active upon the Borrower's account
have actual knowledge. In the event that the Borrower fails to
provide any such notice with respect to the continuation of any
LIBOR Loan as such, then such LIBOR Loan shall be automatically
converted to a Base Rate Loan on the last day of the Interest
Period relating thereto.
(iii) Any conversion to or from LIBOR Loans shall be in such amounts
and be made pursuant to such elections so that, after giving
effect thereto, the aggregate principal amount of all LIBOR Loans
having the same Interest Period shall not be less than $500,000
or a whole multiple of $100,000 in excess thereof.
SECTION 5. REPAYMENTS AND PREPAYMENTS.
--------------------------
(a) The Borrower hereby promises to pay the Administrative Agent for the
account of the Banks the entire unpaid principal of and interest on all
Revolving Credit Loans on the Maturity Date.
(b) The Borrower shall have the right, at its election, to repay the
outstanding amount of the Revolving Credit Loans, as a whole or in part, at any
time without penalty or premium, provided that any full or partial prepayment of
--------
the outstanding amount of any LIBOR Loans pursuant to this (S)5(b) which is made
on a day other than a last day of the Interest Period relating thereto shall be
subject to the payment by the Borrower of any breakage cost as set forth in
(S)5(d) hereof. The Borrower shall give the Administrative Agent, not later
than 12:00 noon, Boston time, on the same day, written notice of any proposed
prepayment pursuant to this (S)5(b) of Base Rate Loans, and three (3) Business
Days notice of any proposed prepayment pursuant to (S)5(b) of LIBOR Loans, in
each case specifying the proposed date of prepayment of Revolving Credit Loans
and the principal amount to be prepaid. Each such partial prepayment of the
Revolving Credit Loans shall be in an integral multiple of $200,000, and shall
be applied, in the absence of instruction by the Borrower, first to the
principal of Base Rate Loans and then to the principal of LIBOR Loans. Each
partial prepayment of Revolving Credit Loans shall be allocated among the Banks,
in proportion, as nearly as practicable, to the respective unpaid principal
amount of Revolving Credit Loans under each Bank's Note, with adjustments to the
extent practicable to equalize any prior repayments not exactly in proportion.
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(c) Without limiting the obligations of the Borrower and the Guarantors
under (S)11(b)(v) to obtain prior consent of the Majority Banks to any sale or
other disposition of assets which is not a Permitted Asset Disposition
(a "Restricted Asset Disposition"), not less than five (5) days prior to any
----------------------------
Restricted Asset Disposition that would result in Net Asset Sale Proceeds, the
Borrowers shall provide written notice to the Banks of the estimated closing
date for such Restricted Asset Disposition and the reasonably anticipated amount
of the Net Asset Sale Proceeds. To the extent that Net Asset Sales Proceeds
received by any Borrower or any Subsidiary from such Restricted Asset
Disposition have not been reinvested in the business or assets of the Borrower
or any Guarantor within ninety (90) days after the receipt thereof, the
Borrower, within one Business Day thereafter, shall prepay the Loans in an
aggregate principal amount equal to the lesser of (i) the amount of such Net
Asset Sale Proceeds or (ii) the aggregate principal amount of the Loans.
(d) The Borrower shall be entitled to reborrow as Revolving Credit Loans at
any time before the Maturity Date such amounts prepaid, upon the terms and
subject to the conditions of this Agreement.
(e) The Borrower agrees to indemnify each Bank and to hold each Bank
harmless from and against any loss, cost or expense (including loss of
anticipated profits) that the Bank may sustain or incur as a consequence of (i)
default by the Borrower in payment of the principal amount of or any interest on
any LIBOR Loans as and when due and payable, including any such loss or expense
arising from interest or fees payable by such Bank to lenders of funds obtained
by it in order to maintain the LIBOR Loans, (ii) default by the Borrower in
making a borrowing or conversion after the Borrower has given (or is deemed to
have given) a Loan Request or a Conversion Request relating thereto in
accordance with Section 2(a) or Section 2(c), or (iii) the making of any payment
of a LIBOR Loan or the making of any conversion of any LIBOR Loan to a Base Rate
Loan on a day that is not the last day of the applicable Interest Period with
respect thereto, including interest or fees payable by the Bank to lenders of
funds obtained by it in order to maintain any LIBOR Loans.
(f) If at any time prior to the Maturity Date the sum of the aggregate
outstanding principal amount of the Revolving Credit Loans plus the Maximum
----
Drawing Amount and all Unpaid Reimbursement Obligations shall exceed the Total
Commitment, then the Borrower shall immediately pay the amount of such excess to
the Administrative Agent for the account of the Banks for application: first, to
any Unpaid Reimbursement Obligations; second, to the Revolving Credit Loans; and
third, to provide to the Administrative Agent cash collateral for Reimbursement
Obligations as contemplated by (S)3.2(b) and (c). Each payment of any Unpaid
Reimbursement Obligations or prepayment of Revolving Credit Loans shall be
allocated among the Banks, in proportion, as nearly as practicable, to each
Reimbursement Obligation or (as the case may be) the respective unpaid principal
amount of each Bank's Note, with adjustments to the extent practicable to
equalize any prior payments or repayments not exactly in proportion.
(g) The Borrower may elect to reduce or terminate the Total Commitment by a
minimum principal amount of $1,000,000 or an integral multiple thereof, upon
written notice to
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the Administrative Agent given by 10:00 a.m. Boston time at least two (2)
Business Days prior to the date of such reduction or termination, whereupon the
Commitments of the Banks shall be reduced pro rata in accordance with their
--- ----
respective Commitment Percentages of the amount specified in such notice or, as
the case may be, terminated. Promptly after receiving any notice of the Borrower
delivered pursuant to this (S)5(g), the Administrative Agent will notify the
Banks of the substance thereof. Upon the effective date of any such reduction or
termination, the Borrower shall pay to the Administrative Agent for the accounts
of the Banks the full amount of any commitment fee then accrued on the amount of
the reduction. The Borrower shall not be entitled to reinstate the Total
Commitment following such reduction or termination.
SECTION 6. GENERAL PROVISIONS.
------------------
(a) The Borrower agrees to pay to the Administrative Agent for the
Administrative Agent's own account a closing fee in an amount and at the time
set forth in its Fee Letter. The Borrower further agrees to pay to the
Documentation Agent for the Documentation Agent's own account a closing fee in
the amount and at the times set forth in its Fee Letter. The Borrower further
shall pay to the Administrative Agent for the Administrative Agent's own account
the Administrative Agent's annual agency fee as provided in its Fee Letter.
(b) If any change in banking law or regulation or the administration
thereof (whether or not having the force of law) affects the amount of capital
required or expected to be maintained by any Bank or Bank Agent or any entity
controlling it, and such amount is increased by reason of such Bank's or Bank
Agent's Commitment or the Loans or any Letter of Credit, then such Bank or Bank
Agent may notify the Borrower thereof. The Borrower and such Bank shall
negotiate an adjustment payable to such Bank to compensate for such increase. If
no agreement is reached within thirty (30) days, such Bank may increase the fees
payable hereunder to it by the amount reasonably determined by such Bank to be
necessary to provide such compensation.
(c) In the event, prior to the commencement of any Interest Period, the
Administrative Agent shall determine or be notified by the Majority Banks that
adequate and reasonable methods do not exist for ascertaining the LIBOR Rate
that would otherwise determine the rate of interest to be applicable to a Loan
at the LIBOR Rate during that Interest Period, the Administrative Agent shall
forthwith give notice of such determination (which shall be conclusive and
binding on the Borrower) to the Borrower. In such event (i) any Loan Request or
Conversion Request with respect to the Loan at the LIBOR Rate shall be
automatically withdrawn and shall be deemed a request to have the Loan accrue
interest at the Base Rate, (ii) if the Loan is at the LIBOR Rate, it will
automatically, on the last day of the then current Interest Period relating
thereto, bear interest based on the Base Rate and (iii) the obligations of the
Banks to make LIBOR Loans shall be suspended until the Administrative Agent or
the Majority Banks reasonably determine that the circumstances giving rise to
such suspension no longer exist, whereupon the Administrative Agent or, as the
case may be, the Administrative Agent upon the instruction of the Majority
Banks, shall so notify the Borrower and the Banks.
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(d) Notwithstanding any other provisions herein, if any present or future
law, regulation, treaty or directive or in the interpretation or application
thereof shall make it unlawful for any Bank to make or maintain LIBOR Loans,
such Bank shall forthwith give notice of such circumstances to the Borrower and
the other Banks and thereupon (i) the commitment of such Bank to make LIBOR
Loans or convert Loans of another Type to LIBOR Loans shall forthwith be
suspended and (ii) the Loans then outstanding as LIBOR Loans, if any, shall be
converted automatically to Base Rate Loans on the last day of each Interest
Period applicable to such LIBOR Loans or within such earlier period as may be
required by law. The Borrower shall not be liable to any Bank for costs incurred
by such Bank in connection with any such conversion prior to the last day of an
Interest Period as may be required by law.
(e) Within thirty (30) days after (i) any Bank has demanded compensation
from the Borrower pursuant to (S)6(b) hereof, or (ii) there shall have occurred
a change in law with respect to any Bank as a consequence of which it shall have
become unlawful for such Bank to make a LIBOR Loan on any Drawdown Date, as
described in (S)6(d) hereof (any such Bank described in the foregoing clauses
(i) or (ii) is hereinafter referred to as an "Affected Bank"), the Borrower may
-------------
request that the other Banks (collectively, the "Non-Affected Banks") acquire
------------------
all, but not less than all of the Affected Bank's outstanding Loans and assume
all, but not less than all of the Affected Bank's Commitment. If the Borrower so
requests, each Non-Affected Bank may elect to acquire all or any portion of the
Affected Bank's Commitment. If the Non-Affected Banks do not elect to acquire
and assume all of the Affected Bank's outstanding Loans and Commitment, the
Borrower may designate a replacement bank or banks, which must be an Eligible
Assignee and must be satisfactory to the Administrative Agent, to acquire and
assume that portion of the outstanding Loans and Commitment of the Affected Bank
not being acquired and assumed by the Non-Affected Banks. The provisions of
(S)15 hereof shall apply to all reallocations pursuant to this (S)6(e), and the
Affected Bank and any Non-Affected Banks and/or replacement banks which are to
acquire the Loans and Commitment of the Affected Bank shall execute and deliver
to the Administrative Agent, in accordance with the provisions of (S)15 hereof,
such Assignment and Acceptances and other instruments, including, without
limitation, Notes, as are required pursuant to (S)15 hereof to give effect to
such reallocations. On the effective date of the applicable Assignments and
Acceptances, the Borrower shall pay to the Affected Bank all interest accrued on
its Loans up to but excluding such date, along with any fees payable to such
Affected Bank hereunder up to but excluding such date.
(f) Except as specified in Schedule 6(f) hereto, the Obligations shall be
-------------
secured at all times by:
(i) a first priority perfected Lien upon all presently owned and
hereafter acquired tangible and intangible personal property
(excluding all liquor licenses) and fixtures of the Borrower and
each Guarantor, subject only to Permitted Liens;
(ii) a pledge of the stock of the Subsidiaries other than Bertucci's
Restaurant Corp., the Site Lessors and the Subsidiaries that hold
liquor licenses in the State of Maryland;
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(iii) a first priority mortgage lien on existing and hereafter
acquired Restaurant Sites subject to Permitted Liens provided,
--------
however, the Administrative Agent agrees to release its Mortgage
-------
with respect to any Restaurant Site covered by clause (ii) of the
definition of "Restaurant Sites" in connection with any Special
----------------
Purpose Transaction otherwise permitted by this Agreement; and
(iv) the guaranties of each Subsidiary of the Borrower other than a
Site Lessor (each, a "Guarantor").
---------
Notwithstanding the foregoing: (i) in connection with any Permitted Asset
Disposition, the Administrative Agent agrees to release any Liens in its favor
in any personal property and fixtures disposed of in any such Permitted Asset
Disposition; (ii) the Borrower or any Guarantor may substitute a fee-owned
restaurant location of equal or greater value for any Restaurant Site and, upon
the perfection of a first priority mortgage lien in favor of the Administrative
Agent, on behalf of the Banks, as to such substitute restaurant location, (A)
the substitute restaurant location shall be deemed a "Restaurant Site" and (B)
the Administrative Agent shall release its Mortgage on the existing Restaurant
Site which is being replaced by such substitute restaurant location; and (iii)
in connection with any Permitted Special Purpose Transaction, the Administrative
Agent agrees to release any Liens in its favor in any real property, personal
property and fixtures transferred in any such Permitted Special Purpose
Transaction.
(g) All agreements and instruments described or contemplated in (S)6(f),
above, together with any and all other agreements and instruments heretofore or
hereafter securing the Obligations are sometimes referred to collectively as the
"Security Documents" and each a "Security Document". The Borrower and the
------------------ -----------------
Guarantors agree to execute and deliver any and all Security Documents, in form
and substance satisfactory to the Administrative Agent and to take such action
as the Administrative Agent may reasonably request from time to time in order to
cause the Administrative Agent, on behalf of the Banks, to be secured at all
times as described in (S)6(f).
SECTION 7. FEES AND PAYMENTS.
-----------------
(a) The Borrower shall pay to the Administrative Agent for the accounts of
the Banks, on the last Business Day of each calendar quarter hereafter, and upon
the Maturity Date or the date upon which the Commitments are no longer in
effect, a commitment fee calculated at a rate per annum which is equal to three-
eighths of one percent (0.375%) of the average daily amount of the Maximum
Unused Commitment of each Bank during the preceding calendar quarter or portion
thereof.
(b) All payments to be made by the Borrower hereunder or under any of the
other Loan Documents shall be made in Dollars in immediately available funds to
the Administrative Agent, for the accounts of the Banks and the Bank Agents, at
the Administrative Agent's head office at 100 Federal Street, Boston,
Massachusetts, without set-off or counterclaim and free and
-26-
clear of and without deduction for any taxes, levies, imposts, duties, charges,
fees, deductions, withholdings, compulsory loans, restrictions or conditions of
any nature now or hereafter imposed or levied by any jurisdiction or any
political subdivision thereof or taxing or other authority therein unless the
Borrower is compelled by law to make such deduction or withholding. If any such
obligation is imposed upon the Borrower with respect to any amount payable by it
hereunder or under any of the other Loan Documents, the Borrower will pay to the
Administrative Agent on the date on which such amount is due and payable
hereunder, such additional amount in Dollars as shall be necessary to enable the
Banks or the Administrative Agent to receive the same net amount which the Banks
or the Administrative Agent would have received on such due date had no such
obligation been imposed upon the Borrower. The Borrower will deliver promptly to
the Administrative Agent certificates or other valid vouchers for all taxes or
other charges deducted from or paid with respect to payments made by the
Borrower hereunder or under such other Loan Document.
(c) The Bank Agents and the Banks shall be entitled to charge any account
of the Borrower with such Bank for any sum due and payable by the Borrower to
the Banks hereunder or under any of the other Loan Documents.
(d) Except with respect to the payment of interest on LIBOR Loans, if any
payment hereunder is required to be made on a day which is not a Business Day,
it shall be paid on the next succeeding Business Day, and interest and
commitment fees shall accrue during such extension.
(e) All computations of interest or of the commitment fee or any Letter of
Credit Fees payable hereunder shall be made by the Bank on the basis of actual
days elapsed and on a 360-day year. Any change in the interest rate resulting
from a change in the Base Rate is to be effective at the beginning of the day of
such change. The Administrative Agent will inform the Borrower in writing of any
change in the Base Rate but the failure of the Administrative Agent to so inform
the Borrower shall not affect the Borrower's obligations hereunder or under the
Notes to make payments of principal of and interest on the Notes when due. The
aggregate unpaid amount of Loans set forth on each Bank's internal records shall
be prima facie evidence of the principal amount thereof owing and unpaid to such
-----------
Bank, but the failure to record, or any error in so recording, any such amount
on such Bank's records shall not affect the obligations of the Borrower
hereunder or under any Note to make payments of principal of and interest on any
Note when due.
SECTION 8. GUARANTIES; JOINT AND SEVERAL OBLIGATIONS.
-----------------------------------------
(a) The Guarantors hereby acknowledge that the Guarantors are members of a
group of related corporations, the success of any one of which is dependent in
part on the success of the other members of such group, and each Guarantor
expects to receive substantial direct and indirect benefits from the extensions
of credit to the Borrower by the Banks pursuant to this Agreement (which
benefits are hereby acknowledged). Each of the Guarantors hereby jointly and
severally guarantees to the Banks and the Administrative Agent the full and
punctual payment when due (whether at stated maturity, by required pre-payment,
by acceleration or otherwise), as
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well as the performance, of all of the Obligations including all such which
would become due but for the operation of the automatic stay pursuant to
(S)362(a) of the Federal Bankruptcy Code and the operation of (S)(S)502(b) and
506(b) of the Federal Bankruptcy Code. This guaranty is an absolute,
unconditional and continuing guaranty of the full and punctual payment and
performance of all of the Obligations and not of their collectability only and
is in no way conditioned upon any requirement that the Administrative Agent or
any Bank first attempt to collect any of the Obligations from the Borrower or
any other Guarantor or resort to any collateral security or other means of
obtaining payment. Should the Borrower default in the payment or performance of
any of the Obligations, the obligations of each of the Guarantors hereunder with
respect to such Obligations in default shall, upon demand by the Administrative
Agent, become immediately due and payable to the Administrative Agent, for the
benefit of the Banks and the Bank Agents, without demand or notice of any
nature, all of which are expressly waived by each of the Guarantors. Payments by
any of the Guarantors hereunder may be required by the Administrative Agent on
any number of occasions. All payments by the Guarantors hereunder shall be made
to the Administrative Agent, in the manner and at the place of payment specified
in this Agreement, for the account of the Banks and the Administrative Agent.
(b) Each of the Guarantors further agrees, as the principal obligor and not
as a guarantor only, to pay to the Administrative Agent, on demand, all costs
and expenses (including court costs and legal expenses) incurred or expended by
the Administrative Agent or any Bank in connection with the Obligations, this
guaranty and the enforcement thereof, together with interest on amounts
recoverable under this (S)8 from the time when such amounts become due until
payment, whether before or after judgment, at the rate of interest for overdue
principal set forth in this Agreement, provided that if such interest exceeds
the maximum amount permitted to be paid under applicable law, then such interest
shall be reduced to such maximum permitted amount.
(c) Each of the Guarantors agrees that the Obligations will be paid and
performed strictly in accordance with their respective terms, regardless of any
law, regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of the Administrative Agent or any
Bank with respect thereto. Each of the Guarantors waives promptness,
diligences, presentment, demand, protest, notice of acceptance, notice of any
Obligations incurred and all other notices of any kind, all defenses which may
be available by virtue of any valuation, stay, moratorium law or other similar
law now or hereafter in effect, any right to require the marshaling of assets of
the Borrower or any other entity or other person primarily or secondarily liable
with respect to any of the Obligations, and all suretyship defenses generally.
Without limiting the generality of the foregoing, each of the Guarantors agrees
to the provisions of any instrument evidencing, securing or otherwise executed
in connection with any Obligation and agrees that the obligations of such
Guarantor hereunder shall not be released or discharged, in whole or in part, or
otherwise affected by (i) the failure of the Administrative Agent or any Bank to
assert any claim or demand or to enforce any right or remedy against the
Borrower or any other entity or other person primarily or secondarily liable
with respect to any of the Obligations; (ii) any extensions, compromise,
refinancing, consolidation or renewals of any Obligations; (iii) any change in
the time, place or manner of payment of any of the Obligations or any
recissions, waivers, compromise, refinancing, consolidation or other amendments
or
-28-
modifications of any of the terms or provisions of this Agreement, any Note, the
other Loan Documents or any other agreement evidencing, securing or otherwise
executed in connection with any of the Obligations; (iv) the addition,
substitution or release of any entity or other person primarily or secondarily
liable for any Obligations; (v) the adequacy of any rights which the
Administrative Agent or any Bank may have against any collateral security or
other means of obtaining repayment of any of the Obligations; (vi) the
impairment of any collateral securing any of the Obligations, including, without
limitation, the failure to perfect or preserve any rights which the
Administrative Agent or any Bank might have in such collateral security or the
substitution, exchange, surrender, release, loss or destruction of any such
collateral security; or (vii) any other act or omission which might in any
manner or to any extent vary the risk of such Guarantor or otherwise operate as
a release or discharge of such Guarantor, all of which may be done without
notice to such Guarantor.
(d) If for any reason the Borrower has no legal existence or is under no
legal obligation to discharge any of the Obligations, or if any of the
Obligations have become irrecoverable from the Borrower by reason of the
Borrower's insolvency, bankruptcy or reorganization or by other operation of law
or for any other reason, the guaranty set forth in this (S)8 shall nevertheless
be binding on each of the Guarantors to the same extent as if such Guarantor at
all times had been the principal obligor on all such Obligations. In the event
that acceleration of the time for payment of any of the Obligations is stayed
upon the insolvency, bankruptcy or reorganization of the Borrower, or for any
other reason, all such amounts otherwise subject to acceleration under the terms
of the Agreement, the Notes, the other Loan Documents or any other agreement
evidencing, securing or otherwise executed in connection with any Obligation
shall be immediately due and payable by each of the Guarantors.
(e) Until the final payment and performance in full of all of the
Obligations, (i) each of the Guarantors shall not exercise and hereby waives any
rights against the Borrower arising as a result of payment by such Guarantor
hereunder, by way of subrogation, reimbursement, restitution, contribution or
otherwise, and will not prove any claim in competition with the Administrative
Agent or any Bank in respect of any payment hereunder in any bankruptcy,
insolvency or reorganization case or proceedings of any nature; such Guarantor
will not claim any setoff, recoupment or counterclaim against the Borrower in
respect of any liability of such Guarantor to the Borrower; and such Guarantor
waives any benefit of and any right to participate in any collateral security
which may be held by the Administrative Agent or any Bank; and (ii) the payment
of any amounts due with respect to any indebtedness of the Borrower for money
borrowed or credit received now or hereafter owed to any of the Guarantors is
hereby subordinated to the prior payment in full of all of the Obligations. Each
of the Guarantors agrees that, after the occurrence of any default in the
payment or performance of any of the Obligations, such Guarantor will not
demand, sue for or otherwise attempt to collect any such indebtedness of the
Borrower to such Guarantor until all of the Obligations shall have been paid in
full. If, notwithstanding the foregoing sentence, such Guarantor shall collect,
enforce or receive any amounts in respect of such indebtedness while any
Obligations are still outstanding, such amounts shall be collected, enforced and
received by such Guarantor as trustee for the Banks and the Administrative Agent
and be paid over to the Administrative Agent, for the benefit of the Banks and
the Administrative Agent, on account of the Obligations without affecting in any
-29-
manner the liability of such Guarantor under the other provisions of this (S)8.
The provisions of this (S)8(e) shall be supplemental to and not in derogation of
any rights and remedies of the Banks and the Administrative Agent under any
separate subordination agreement which the Administrative Agent may at any time
and from time to time enter into with any of the Guarantors for the benefit of
the Banks and the Administrative Agent.
(f) Each of such Guarantors agrees that it will from time to time, at the
request of the Administrative Agent, do all such things and execute all such
documents as the Administrative Agent may consider necessary or desirable to
give full effect to this guaranty and to perfect and preserve the rights and
powers of the Banks and the Administrative Agent hereunder. Each of the
Guarantors acknowledges and confirms that such Guarantor itself has established
its own adequate means of obtaining from the Borrower on a continuing basis all
information desired by such Guarantor concerning the financial condition of the
Borrower and that such Guarantor will look to the Borrower and not to the
Administrative Agent or any Bank in order for such Guarantor to keep adequately
informed of changes in the Borrower's financial condition.
(g) The guaranty set forth in this (S)8 shall remain in full force and
effect until the Administrative Agent is given written notice of the Guarantors'
intention to discontinue this guaranty, notwithstanding any intermediate or
temporary payment or settlement of the whole or any part of the Obligations. No
such notice shall be effective unless received and acknowledged by an officer of
the Administrative Agent at the address of the Administrative Agent for notices
set forth in (S)17(c) of this Agreement. No such notice shall affect any rights
of the Administrative Agent or any Bank hereunder with respect to any
Obligations incurred or accrued prior to the receipt of such notice or any
Obligations incurred or accrued pursuant to any contract or commitment in
existence prior to such receipt. The guaranty set forth in this (S)8 shall
continue to be effective or be reinstated, notwithstanding any such notice, if
at any time any payment made or value received with respect to any Obligation is
rescinded or must otherwise be returned by the Administrative Agent or any Bank
upon the insolvency, bankruptcy or reorganization of the Borrower, or otherwise,
all as though such payment had not been made or value received.
SECTION 9. REPRESENTATIONS AND WARRANTIES. The Borrower and the Guarantors
------------------------------
represent and warrant to the Banks and the Bank Agents on the date hereof, on
the date of any Loan Request, on the date of each request for a Letter of
Credit, on each Drawdown Date, on each date on which each Letter of Credit is
issued, extended or renewed, and on the Maturity Date that:
(a) (i) the Borrower, each Guarantor and each of their Subsidiaries is a
corporation duly organized, validly existing, and in good standing under the
laws of the state of its incorporation and is duly qualified and in good
standing in every other jurisdiction where it is doing business, (ii) the
execution and delivery by the Borrower and the Guarantors of the Loan Documents
and the performance by the Borrower and the Guarantors of the Loan Documents (A)
are within the corporate authority of each such Person, (B) have been duly
authorized by all necessary corporate action and (C) do not conflict with or
contravene such Person's Charter Documents and (iii) all Subsidiaries of the
Borrower and the Guarantors are listed on Schedule 9(a) hereto;
-------------
-30-
(b) upon execution and delivery thereof, this Agreement and the other Loan
Documents to which the Borrower or any Guarantor is or is to become a party will
result in the legal, valid and binding obligation of the Borrower or such
Guarantor, respectively, enforceable in accordance with its respective terms;
(c) except as set forth in Schedule 9(c) hereto, the Borrower and the
-------------
Guarantors have good and marketable title to all of their respective material
properties, subject only to Permitted Liens permitted and possess all assets,
including intellectual properties, franchises and Consents, adequate for the
conduct of its business as now conducted, without known conflict with any rights
of others;
(d) the Borrower has provided to the Banks (i) the audited Financials of
the Borrower and its Subsidiaries as at December 31, 1997 and for the period
then ended, (ii) the unaudited Financials of the Borrower and its Subsidiaries
as at March 31, 1998 and for the period then ended, (iii) the audited Financials
of Bertucci's and its Subsidiaries as at December 27, 1997 and for the period
then ended and (iv) the unaudited Financials of Bertucci's and its Subsidiaries
as at April 18, 1998 and for the period then ended. All such Financials of the
Borrower are complete and correct and respectively fairly present their position
as at such date and for such period consistently applied. To the best of the
Borrower's knowledge, all such Financials of Bertucci's and its Subsidiaries are
complete and correct and respectively fairly present their position as at such
date and for such period in accordance with GAAP consistently applied. The
Borrower has also provided to the Banks the projections of the pro forma balance
sheet, pro forma cash flow statement and annual operating budgets of the
Borrower and its Subsidiaries on a consolidated basis for the 1998 to 2002
fiscal years and has disclosed all assumptions made with respect to general
economic, financial and other market conditions used in formulating such
projections. To the knowledge of the Borrower or any of its Subsidiaries, no
facts exist that (individually or in the aggregate) would result in any material
change in any of such projections. The projections are based upon reasonable
estimates and assumptions, and have been prepared on the basis of the
assumptions stated therein and reflect the reasonable estimates of the Borrower
and its Subsidiaries of the results of operations and information projected
therein;
(e) since December 31, 1997, there has been no materially adverse change of
any kind in the Borrower or any Guarantor which would have a Materially Adverse
Effect;
(f) there are no legal or other proceedings or investigations pending or
threatened against the Borrower or any Guarantor before any court, tribunal or
regulatory authority which would, if adversely determined, alone or together,
have a Materially Adverse Effect; Schedule 9(f) attached hereto describes all
-------------
legal and other proceedings or investigations pending against the Borrower or
any Guarantor;
(g) the execution and delivery by the Borrower and the Guarantors of the
Loan Documents and the performance by such Person of its obligations, and the
exercise of its rights, under the Loan Documents including borrowing under this
Agreement and the obtaining of Letters of Credit (i) do not require any Consents
(except for Consents required by liquor
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authorities or where the failure to obtain such Consent does not have a
Materially Adverse Effect) that have not been obtained, and (ii) are not and
will not be in conflict with or prohibited or prevented by (A) any Requirement
of Law that does not have a Materially Adverse Effect, or (B) any Charter
Document, corporate minute or resolution, instrument, agreement or provision
thereof, in each case binding on such Person or affecting such Person's
property;
(h) neither the Borrower nor any Guarantor is in violation of (i) any
Charter Document, corporate minute or resolution, (ii) any instrument or
agreement, in each case binding on it or affecting its property, or (iii) any
Requirement of Law, in a manner which could have a Materially Adverse Effect,
including, without limitation, all applicable federal and state tax laws, health
and safety laws, ERISA and Environmental Laws;
(i) the Administrative Agent, as agent for the Banks, has a first-priority
perfected security interest in the properties and assets of the Borrower and the
Guarantors stated to constitute collateral under the Security Documents, subject
only to Permitted Liens and entitled to priority under applicable law, with no
financing statements, chattel mortgages, real estate mortgages or similar
filings on record anywhere which conflict with such first-priority interest;
(j) neither the Borrower nor any Guarantor is a party to any partnership or
joint venture;
(k) (i) attached hereto a Schedule 9(k) is a list of all Leases (other than
-------------
Leases with the Site Lessors);
(l) attached hereto as Schedule 9(l) is a list of all Franchise Agreements,
-------------
each Franchise Agreement is in full force and effect, there exists no default
under any Franchise Agreement, and the Borrower (or a Guarantor) has delivered
to the Bank (i) a certified copy of each Franchise Agreement and (ii) an
agreement executed by the Franchisor and satisfactory to the Administrative
Agent in all respects pursuant to which the Franchisor consents to the execution
and delivery by the Borrower (or a Guarantor) of the Security Documents and
agrees to deliver periodic no default and estoppel certificates with respect to
the Franchise Agreements and notify the Administrative Agent of all defaults
under the Franchise Agreements and give the Administrative Agent a reasonable
opportunity to cure such defaults as the franchisee may cure thereunder if the
Administrative Agent so elects;
(m) Schedule 9(m) attached hereto lists the account numbers and locations
-------------
of all depository accounts of the Borrower and the Guarantors;
(n) Schedule 9(n) attached hereto lists all of the restaurants operated by
-------------
the Borrower and the Guarantors (the Borrower and the Guarantors may add to or
delete from such Schedule from time to time as set forth in Section 11(a)(vii));
(o) The Borrower, the Guarantors and their Subsidiaries possess all
patents, copyrights, trademarks, trade names, licenses and permits, in rights
and respect of the foregoing, adequate for the conduct of its business
substantially as now conducted without known conflict
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with any rights of others, unless such conflict would not have a Materially
Adverse Effect. Each of such patents, copyrights, trademarks, trade names,
licenses and permits are listed on Schedule 9(o) hereto.
-------------
(p) Schedule 9(p) attached hereto lists the accurate ownership percentages
-------------
of the equityholders of record of each of the Borrower and its Subsidiaries and
a statement of authorized and issued equity securities of each such entity as of
the date hereof. Such Schedule 9(p) also states as of the date hereof, (i)
-------------
which securities, if any, carry preemptive rights; (ii) whether there are any
outstanding subscriptions, warrants or options to purchase any securities; (iii)
whether the Borrower or any Subsidiary is obligated to redeem or repurchase any
of its securities, and the details of any such committed redemption or
repurchase; and (iv) any other agreement, arrangement or plan to which the
Borrower or any Subsidiary is a party or participant or of which the Borrower
has knowledge which could reasonably be expected, directly or indirectly, to
affect the capital structure of the Borrower and its Subsidiaries. All such
equity securities of the Subsidiaries are validly issued and fully paid and non-
assessable, and owned as set forth on Schedule 9(p). Except as set forth on
-------------
Schedule 9(p), all such equity securities of the Subsidiaries are owned, legally
- -------------
and beneficially, by the Borrower, free of any Liens except for restrictions on
transfers imposed by applicable securities laws, as indicated on the
certificates evidencing such shares.
(q) None of the Charter Documents of the Borrower or its Subsidiaries
contain any provisions similar to those set forth in Section 102(b)(2) of Title
8 of the Delaware Code.
(r) To the best of the Borrowers' knowledge, all Date-Sensitive Data and
Date-Sensitive Systems owned or used by the Borrower, the Guarantors and their
Subsidiaries will be Year 2000 Compliant on or before December 30, 1999, and
could not reasonably be expected to have a Materially Adverse Effect not being
Year 2000 Compliant by such date.
SECTION 10. CONDITIONS PRECEDENT.
--------------------
(a) The obligations of the Banks to make the initial Revolving Credit Loans
and the Administrative Agent to issue any initial Letters of Credit shall be
subject to the satisfaction of the following conditions precedent:
(i) Each of the Loan Documents shall have been duly executed and delivered
by the respective parties thereto, shall be in full force and effect
and shall be in form and substance satisfactory to each of the Banks.
Each Bank shall have received an original Note in the amount of its
respective Commitment executed by the Borrower and a fully executed
copy of the other Loan Documents.
(ii) Each of the Banks shall have received from the Borrower and each
Guarantor a copy, certified by a duly authorized officer of such
Person to be true and complete on the Closing Date, of each of its
Charter Documents as in effect on such date of certification.
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(iii) All corporate action necessary for the valid execution, delivery and
performance by the Borrower and each Guarantor of this Agreement and
the other Loan Documents to which it is or is to become a party
shall have been duly effectively taken, and evidence thereof
satisfactory to the Banks shall have been provided to each of the
Banks.
(iv) Each of the Banks shall have received from the Borrower and each
Guarantor an incumbency certificate, dated as of the Closing Date,
signed by a duly authorized officer of such Person and giving the
name and bearing a specimen signature of each individual who shall
be authorized: (a) to sign, in the name and on behalf of the
Borrower or the Guarantor, each of the Loan Documents to which the
Borrower or Guarantor is or is to become a party; (b) in the case of
the Borrower, to make Loan Requests and Conversion Requests and to
apply for Letters of Credit; and (c) to give notices and to take
other action on its behalf under the Loan Documents.
(v) The Administrative Agent shall have received the results of UCC
searches, indicating no liens other than Permitted Liens and
otherwise in form and substance satisfactory to the Administrative
Agent.
(vi) The Administrative Agent shall have received a certificate of
insurance from an independent insurance broker dated as of the
Closing Date, identifying insurers, types of insurance, insurance
limits, and policy terms, and otherwise describing the insurance
obtained in accordance with the provisions of the Agreement.
(vii) Each of the Banks shall have received an officer's certificate of
the Borrower dated as of the Closing Date as to the solvency of the
Borrower and the Guarantors following the consummation of the
transactions contemplated herein, the issuance of the Senior
Unsecured Notes and the Acquisition, in form and substance
satisfactory to the Banks.
(viii) Each of the Banks and the Bank Agents shall have received a
favorable legal opinion addressed to the Banks and the Bank Agents,
dated as of the Closing Date, in form and substance satisfactory to
the Banks and the Bank Agents, from Brown, Rudnick, Freed & Gesmer,
counsel to the Borrower and the Guarantors.
(ix) The Borrower shall have paid to the Bank Agents any fees required as
of the date hereof pursuant to the Fee Letters.
(x) The Administrative Agent shall have received a letter agreement
executed by the Franchisor consenting to this transaction and the
granting of the Liens by the Borrower covering the Borrower's rights
under the Franchise Agreement and the Development Agreements.
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(xi) The Administrative Agent shall have received an opening balance
sheet of the Borrower and its Subsidiaries giving pro forma effect
to the issuance of the Senior Unsecured Notes, the consummation of
the Acquisition, the consummation of the transactions contemplated
by the Equity Purchase Agreements and the incurrence of the initial
Loans, which opening balance sheet shall demonstrate a capital
structure reflecting additional cash equity invested in, and the
Senior Unsecured Notes issued by, the Borrower, aggregating at least
$128,800,000 (of which the Senior Unsecured Notes may not exceed
$100,000,000).
(xii) As of the date hereof and since March 31, 1998, no event or
circumstance shall have occurred which has had, or could have, a
Materially Adverse Effect.
(xiii) The Administrative Agent shall have received disbursement
instructions from the Borrower.
(xiv) The Borrower shall have provided to the Administrative Agent a
certificate, duly executed on behalf of the Borrower by an
authorized officer, certifying as to the satisfaction by the
Borrower and Guarantors of the conditions precedent to lending set
forth in this (S)10.
(xv) Other than as consented to by the Administrative Agent in writing:
(A) The transactions contemplated by the Merger Agreement shall
have been consummated concurrently herewith (except for the
payment of that portion, if any, of the merger consideration
under the Merger Agreement being paid with the proceeds of
Loans) and the material provisions of the Merger Agreement
shall not have been amended, modified or waived prior to the
consummation of the Acquisition.
(B) All material consents, authorizations, orders or approvals of
any Person required in connection with the transactions
contemplated by the Merger Agreement shall have been obtained
and shall be in full force and effect (except for Consents
required by liquor authorities).
(C) Contemporaneously with the making by the Banks of the
Revolving Credit Loans on the Closing Date, the Borrower
shall have furnished to the Administrative Agent a
certificate, signed by an authorized officer of the Borrower,
to the effect that the closing has occurred under the Merger
Agreement and to the effect that each of the conditions set
forth in (S)9(a)(xv) have been satisfied.
(D) An opinion from Stroock & Stroock & Lavan LLP regarding the
consummation of the transactions contemplated by the Merger
Agreement.
(xvi) [Intentionally omitted.]
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(xvii) Other than as consented to by the Administrative Agent in writing:
(A) The transactions contemplated by the Equity Purchase
Agreements shall have been consummated and the material
provisions of the Equity Purchase Agreement shall not have
been amended, modified or waived prior to the consummation of
such transactions.
(B) Contemporaneously with the making by the Banks of the
Revolving Credit Loans on the Closing Date, the Borrower shall
have furnished to the Administrative Agent a certificate, duly
executed on behalf of the Borrower by the authorized officer,
to the effect that the closings have occurred under the Equity
Purchase Agreements or will occur simultaneously with the
funding of the Revolving Credit Loans and to the effect that
each of the conditions set forth in (S)9(a)(xvii) have been
satisfied or waived in writing.
(xviii) Other than as consented to the Administrative Agent in writing:
(A) The provisions of the Indenture shall not have been amended,
modified, waived or terminated on or prior to the Closing
Date.
(B) Contemporaneously with the making by the Banks of the
Revolving Credit Loans on the Closing Date, the Borrower shall
have furnished to the Administrative Agent a certificate, duly
executed on behalf of the Borrower by the authorized officer,
to the effect that the Borrower has received the net proceeds
of the issuance of the Senior Unsecured Notes and to the
effect that each of the conditions set forth in (S)9(a)(xviii)
have been satisfied or waived in writing.
(xix) [Intentionally Omitted.]
(xx) Any documents (including UCC-1 financing statements or UCC-3
termination statements) required by the Administrative Agent to be
recorded or filed in order to (i) release any Liens on any assets of
the Borrower and its Subsidiaries (other than Liens permitted
herein) and (ii) create, in favor of the Administrative Agent, a
perfected first-priority Lien on assets of the Borrower and its
Subsidiaries (other than those assets listed on Schedule 6(f) or
-------- ----
excluded by the express terms of the Security Documents) with
respect to which a Lien may be perfected by filing a financing
statement under the Uniform Commercial Code of the applicable
jurisdiction, or by recording an assignment with the U.S. Patent and
Trademark Office, or by recording a mortgage or deed of trust in the
real estate records of the applicable jurisdiction, shall have been
properly recorded or filed in each office in each jurisdiction
required. The Administrative Agent shall have received
acknowledgment copies of all such recordings and filings (or in lieu
thereof, the
-36-
Administrative Agent shall have received other evidence satisfactory
to it that all such recordings and filings have been made); and the
Administrative Agent shall have received evidence that all necessary
recording and filing fees and all taxes or other expenses related to
such filings have been paid in full. Any other action, including the
taking of possession of securities or instruments by the
Administrative Agent, required in order to create in favor of the
Administrative Agent, for the ratable benefit of the Administrative
Agent and the Banks, a perfected first-priority Lien on the
respective collateral described in any of the Security Documents to
the extent such Liens may be perfected by filing a financing
statement under the Uniform Commercial Code of the applicable
jurisdiction, or by recording an assignment with the U.S. Patent and
Trademark Office, or by recording a mortgage or deed of trust in the
real estate records of the applicable jurisdiction, or by taking
possession of the securities or instruments, shall have been
properly taken in order to create such a perfected first-priority
Lien, subject only to Liens permitted by (S)11(b)(ii).
(xxi) ALTA mortgagee policies of title insurance covering all Restaurant
Sites which are the subject of a Mortgage shall have been issued to
the Administrative Agent by a title insurance company or title
insurance companies satisfactory to the Administrative Agent, with
proof of full payment for all fees and premiums. The form and
substance of each such title insurance policy, shall contain no
Schedule B standard pre-printed exceptions (other than for taxes not
yet deemed payable and matters which would be disclosed by a current
survey of the property) and shall contain no exceptions to coverage
other than for Liens which the Administrative Agent reasonably
determines are Permitted Liens.
(b) The obligations of the Banks to make any Revolving Credit Loan,
including the initial Revolving Credit Loans, and of the Administrative Agent to
issue, extend or renew any Letter of Credit, in each case whether on or after
the Closing Date, shall also be subject to the satisfaction of the following
condition precedent:
(i) Each of the representations and warranties of the Borrower and the
Guarantors contained in this Agreement, the other Loan Documents or
in any documents or instrument delivered pursuant to or in
connection with this Agreement shall be true as of the date as of
which they were made and shall also be true at and as of the time of
the making of such Loan or the issuance, extension or renewal of
such Letter of Credit, with the same effect as if made at and as of
that time (except to the extent of changes resulting from
transactions contemplated or permitted by this Agreement and the
other Loan Documents and changes occurring in the ordinary course of
business that singly or in the aggregate have not had a Materially
Adverse Effect, and to the extent that such representations and
warranties relate expressly to an earlier date) and no Default or
Event of Default shall have occurred and be continuing.
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(ii) No change shall have occurred in any law or regulations thereunder
or interpretations thereof that in the reasonable opinion of any
Bank would make it illegal for such Bank to make such loan or to
participate in the issuance, extension or renewal of such Letter of
Credit or in the reasonable opinion of the Administrative Agent
would make it illegal for the Administrative Agent to issue, extend
or renew such Letter of Credit.
(iii) Each Bank shall have received such statements in substance and form
reasonably satisfactory to such Bank as such Bank shall require for
the purpose of compliance with any applicable regulations of the
Comptroller of the Currency or the Board of Governors of the Federal
Reserve System.
(iv) All proceedings in connection with the transactions contemplated by
this Agreement, the other Loan Documents and all other documents
incident thereto shall be reasonably satisfactory in substance and
in form to the Banks and to the Administrative Agent and the
Administrative Agent's counsel, and the Banks, the Administrative
Agent and such counsel shall have received all information and such
counterpart originals or certified or other copies of such documents
as the Administrative Agent may reasonably request.
(v) Timely receipt by the Administrative Agent of a Loan Request or
Letter of Credit Application as provided in (S)2(b) and (S)3.1(a),
as applicable.
(vi) All corporate action referred to in (S)9(a)(ii) shall remain in full
force and effect or satisfactory replacements therefore shall have
been delivered to the Administrative Agent.
SECTION 11. COVENANTS.
---------
(a) Each of the Borrower and the Guarantors agrees that so long as the
Commitments are in effect and until the payment and satisfaction in full of all
the Obligations, the Borrower and each Guarantor will comply with its respective
obligations as set forth throughout this Agreement and will:
(i) furnish each of the Banks: (A) as soon as available but in any event
within 90 days after the close of each fiscal year of the Borrower,
(1) the audited Financials for such fiscal year, certified by Arthur
Andersen LLP or by other independent certified public accountants
satisfactory to the Majority Banks, (2) the unaudited consolidating
Financials of the Borrower for such year and (3) the annual
consolidated and consolidating budget (on a month-by-month basis)
for the Borrower for the next fiscal year of the Borrower; (B) as
soon as available but in any event within 45 days after the end of
each fiscal quarter of the Borrower, the unaudited consolidated and
consolidating Financials for such quarter, certified by a duly
authorized officer of the Borrower; (C) as soon as
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available but in any event within 45 days after the end of each
fiscal month of the Borrower, the unaudited consolidated Financials
and, to the extent prepared by the Borrower, consolidating
Financials for such month, certified by a duly authorized officer of
the Borrower; (D) together with the quarterly and annual Financials,
a certificate of a duly authorized officer of the Borrower
substantially in the form of Exhibit E attached hereto setting forth
---------
computations demonstrating compliance with the financial covenants
set forth herein, certifying that no Default or Event of Default has
occurred, or if it has, the actions taken by the Borrower with
respect thereto and certifying that no default or event of default
has occurred and is continuing under the Indenture, the Senior
Unsecured Notes, any Lease, any FFCA-Related Lease, the FFCA Loan
Agreement, the Development Agreement or any Franchise Agreement; (E)
promptly upon receipt thereof, copies of all material notices,
requests and demands delivered to the Borrower or any Guarantor by
the Trustee, the Franchisor pursuant to any Franchise Agreement or
any Development Agreement, by the Site Lessor or by any other lessor
or sublessor pursuant to any Lease; (F) promptly upon their becoming
available, all such operating, financial and other reports as the
Borrower shall deliver to the Franchisor; (G) contemporaneously with
the filing or mailing thereof, copies of all material of a financial
nature filed with Securities and Exchange Commission, sent to the
stockholders of the Borrower or sent to the Trustee; and (H) from
time to time, such other financial data and information (including
management letters) as the Administrative Agent or any Bank may
reasonably request;
(ii) keep true and accurate books of account in accordance with GAAP,
permit the Administrative Agent or its designated representatives to
inspect its premises and examine and be advised as to such or other
business records by its officers and accountants upon the request of
the Banks, and permit the Administrative Agent's commercial finance
examiners to conduct periodic commercial finance examinations of its
properties;
(iii) (A) maintain its corporate existence, (B) maintain its business and
assets, (C) keep its business and assets adequately insured, (D)
maintain its chief executive office in the United States, (E)
continue to engage in the same lines of business, (F) comply with
all Requirements of Law, including health and safety, ERISA and
Environmental Laws, and (G) comply with each of the respective
obligations imposed upon it in each of the Indenture, the Franchise
Agreements, each of the FFCA-Related Leases and each of the
Development Agreements;
(iv) notify the Administrative Agent and each of the Banks in writing,
within the following time periods, of (A) within a reasonable period
of time, but in no event later than 10 days after the occurrence
thereof, any Default or Event of Default, (B) within a reasonable
period of time, but in no event later than 3 days after the
occurrence thereof, any material default under the Senior Unsecured
Notes or the Indenture, (C) within a reasonable period of time, but
in no event
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later than 15 days after the occurrence thereof, any default under
(1) any Franchise Agreement, (2) any material Lease, (3) any
Development Agreement, (4) any FFCA-Related Lease or (5) any FFCA
Loan Document, (D) within a reasonable period of time, but in no
event later than 15 days after the occurrence thereof, any
noncompliance with ERISA or any Environmental Law or proceeding in
respect thereof which could have a Materially Adverse Effect, (E)
within a reasonable period of time, but in no event later than 15
days after the occurrence thereof, any change of address, (F) within
a reasonable period of time, but in no event later than 15 days
after the occurrence thereof, any threatened or pending litigation
or similar proceeding affecting the Borrower or any Subsidiary
involving a claim of more than $750,000, or any material change in
any litigation or proceeding previously reported and (G) within a
reasonable period of time, but in no event later than 15 days after
the occurrence thereof, claims against any assets or properties of
the Borrower or any Guarantor encumbered in favor of the
Administrative Agent;
(v) use the Letters of Credit for general corporate purposes and use the
proceeds of the Loans solely for general corporate purposes,
including, without limitation the repayment of outstanding loans
under the Original Agreement, and working capital purposes and to
fund the development of new restaurant sites and not for the
carrying of "margin security'' or "margin stock" within the meaning
of Regulations U and X of the Board of Governors of the Federal
Reserve System, 12 C.F.R. Parts 221 and 224; provided, however, the
-------- -------
initial Loans to be made on the date hereof, shall not exceed
$1,000,000;
(vi) cooperate with the Bank Agents and the Banks, take such action,
execute such documents, and provide such information as the Bank
Agents and the Banks may from time to time reasonably request in
order further to effect the transactions contemplated by, and the
purposes of, the Loan Documents;
(vii) notify the Administrative Agent of any new restaurant location which
the Borrower, the Site Lessor or any Guarantor may acquire
(including by way of lease or sublease) after the date hereof within
15 Business Days prior to the date of such acquisition and deliver
to the Administrative Agent an updated Schedule 9(n) which reflects
-------------
any new restaurants operated by the Borrower or any Guarantor after
the date hereof;
(viii) maintain at all times its primary operating and depository accounts
with the Administrative Agent, such other depository accounts listed
on Schedule 9(m) attached hereto and other depository accounts of
-------------
which the Borrower or a Guarantor gives the prior written notice
(provided, however, that the Borrower or such Guarantor shall not
create or maintain a depository account with a financial institution
other than the Administrative Agent and its affiliates unless the
Borrower or such Guarantor, prior to creating such account, shall
have caused any such financial institution to enter into an agency
agreement with the
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Administrative Agent substantially in the form of Exhibit F hereto);
---------
use its best efforts to cause all of its debtors on accounts
receivable and all lessees and conditional vendees to make all
payments on accounts receivable and contracts to one of such
depository accounts; promptly after its receipt thereof, deposit all
gross operating revenues from its business into one of such
depository accounts; and transfer on a daily basis all good funds
collected in such depository accounts on such day to the accounts
maintained with the Administrative Agent. If applicable, the
Borrower or a Guarantor shall deliver to the Administrative Agent an
updated Schedule 9(m) which reflects any new depository accounts
-------------
created or existing depository accounts terminated by Borrower or a
Guarantor after the date hereof;
(b) Each of the Borrower and the Guarantors agrees that so long as the
Commitments are in effect and until the payment and satisfaction in full of all
the Obligations, the Borrower and each Guarantor will not:
(i) create, incur or assume or be or remain liable for any
Indebtedness other than (A) Indebtedness to the Banks and the
Bank Agents arising under the Loan Documents, (B) current
liabilities of the Borrower and the Guarantors not incurred
through the borrowing of money or the obtaining of credit
except credit on an open account customarily extended, (C)
Indebtedness in respect of taxes or other governmental charges
contested in good faith and by appropriate proceedings; (D)
Indebtedness of the Borrower or any Guarantor not included
above and listed on Schedule 11(b)(i) attached hereto; (E)
-----------------
Indebtedness incurred in connection with the acquisition by the
Borrower or any Guarantor after the date hereof of any personal
property of the Borrower or any Guarantor, provided that the
aggregate principal amount of such Indebtedness shall not
exceed in the aggregate exceed $500,000 at any time; (F)
Indebtedness in respect of the FFCA-Related Leases; (G)
Indebtedness under that certain promissory note dated August 6,
1997 made by the Borrower payable to the order of NERC SPE,
Inc. in the original principal amount of $2,500,000; and (H)
Indebtedness under the Indenture and the Senior Unsecured
Notes.
(ii) create or incur or permit to exist any Liens on any of the
property or assets of the Borrower or any Guarantor except the
following ("Permitted Liens") (A) Liens securing the
---------------
Obligations; (B) Liens securing taxes or other governmental
charges not yet due or which are being contested in good faith
by appropriate proceedings provided appropriate reserves have
been taken on the books of the Borrower or Guarantor; (C)
deposits or pledges made in connection with workers'
compensation laws social security obligations; (D) Liens of
carriers, warehousemen, mechanics and materialmen, less than
120 days old as to obligations not yet due; (E) easements,
rights-of-way, zoning restrictions
-41-
and similar minor Liens which individually and in the aggregate
do not have a Materially Adverse Effect; (F) other Liens on the
property or assets of the Borrower or any Guarantor existing on
the date hereof and listed on Schedule 11(b)(ii) hereto; (G)
------------------
purchase money security interests on personal property acquired
by the Borrower or any Guarantor after the date hereof to
secure purchase money Indebtedness of the type and amount
permitted by Section 11(b)(i)(E) hereof, incurred in connection
with the acquisition of such personal property, which security
interests cover only the personal property so acquired; (H)
Liens on any real property, personal property or fixtures in
connection with FFCA Loan Documents or any Permitted Special
Purpose Transaction and Liens for the purpose of securing the
refinancing thereof; (I) judgment liens not giving rise to an
Event of Default under Section 12(i) hereof; and (J) such other
Liens that the Administrative Agent may approve in writing from
time to time.
(iii) make any investments in or loans, advances, capital
contributions or transfers of property to, any person or entity
other than Permitted Investments and investments in (A)
marketable obligations of the United States maturing within one
(1) year, (B) certificates of deposit, bankers' acceptances and
time and demand deposits of United States banks having total
assets in excess of $1,000,000,000, or (C) such other
investments as the Administrative Agent may from time to time
approve in writing;
(iv) make any dividends or similar distributions to its
shareholders;
(v) except for Permitted Special Purpose Transactions, become party
to a merger or effect any disposition of assets other than in
the ordinary course, or purchase, lease or otherwise acquire
assets other than in the ordinary course;
(vi) enter into any FFCA-Related Lease unless the Borrower has
delivered to the Bank an updated Schedule 9(k) which reflects
------------
such FFCA-Related Lease;
(vii) enter into any Franchise Agreement unless (A) the franchisor
under any such Franchise Agreement is the Franchisor; (B) such
Franchise Agreement is substantially in the form of the
Franchise Agreements in effect on the date hereof with only
such changes as are approved by the Majority Banks, as
evidenced by their written consent thereto, which consent shall
not unreasonably be withheld; (C) it has delivered a certified
copy of such Franchise Agreement to the Administrative Agent;
(D) the Franchisor has executed and delivered to the
Administrative Agent an agreement satisfactory to the Majority
Banks in all respects pursuant to
-42-
which the Franchisor agrees to deliver to the Administrative
Agent periodic no default and estoppel certificates with respect
to such Franchise Agreement, to notify the Administrative Agent
of all defaults under such Franchise Agreement and to give the
Banks reasonable opportunity to cure such defaults if the Banks
so elect; (E) the Borrower has delivered to the Administrative
Agent an updated Schedule 9(l) which reflects such Franchise
-------------
Agreement; and (F) the Borrower has executed and delivered to the
Administrative Agent such instruments and taken such action as
may be requested by the Administrative Agent in order to perfect
the Administrative Agent's lien on or security interest (on
behalf of the Banks) in such Franchise Agreement;
(viii) effect or permit any material change in or amendment to the
terms of the Indenture, any Franchise Agreement, any Development
Agreement, any FFCA Loan Document, the Forward Commitment, any
FFCA-Related Lease without the prior written consent of the
Majority Banks, which consent shall not unreasonably be withheld,
provided, however, the Borrower and Site Lessor may effect or
-------- -------
permit a change in an amendment to the terms of any FFCA Loan
Document, FFCA-Related Lease and Forward Commitment Document
without consent of the Majority Banks so long as any such
amendment or change is in compliance with the terms of clause
(ii) of the second paragraph of Section 13.P of the Loan
Agreement dated as of August 6, 1997 between FFCA Acquisition
Corporation and NERC Limited Partnership or as contemplated by
the comparable provisions of the Forward Commitment Documents;
provided, further, however, the prior written consent of the
-------- ------- -------
Majority Bank shall be required for any amendment or change to
the FFCA Loan Documents, the FFCA-Related Leases and the Forward
Commitment Documents of the nature set forth in clause (i) of the
fourth paragraph of said Section 13.P or as contemplated by said
comparable provisions of the Forward Commitment Documents;
(ix) Enter into any agreement, contract or arrangement (other than the
Agreement and the other Loan Documents) restricting the ability
of any Guarantor to pay or make dividends or distributions in
cash or in kind to the Borrower, to make loans, advances or other
payments of whatsoever nature to the Borrower or to make,
transfer or distribute all or any part of its assets to Borrower;
(x) except as may be permitted under the Indenture, in connection
with an Equity Offering, redeem, prior to the Maturity Date, any
of the Senior Unsecured Notes;
-43-
(xi) Permit any Subsidiary (other than a Guarantor) to incur
Indebtedness or create or permit to exist any Lien on any
property or assets of any such Subsidiary other than (A) current
liabilities of such Subsidiary not incurred through the borrowing
of money or the obtaining of credit except credit on an open
account customarily extended; (B) Indebtedness in respect of
taxes or other governmental charges contested in good faith and
by appropriate proceedings; (C) Indebtedness in connection with
the FFCA Loan Documents; (D) Indebtedness in connection with any
Permitted Special Purpose Transaction; (E) Liens securing taxes
or other governmental charges not yet due or which are being
contested in good faith by appropriate proceedings provided
appropriate reserves have been taken on the books of the
Subsidiary; (F) deposits or pledges made in connection with
workers' compensation laws social security obligations; (G) Liens
of carriers, warehousemen, mechanics and materialmen, less than
120 days old as to obligations not yet due; (H) easements,
rights-of-way, zoning restrictions and similar minor Liens which
individually and in the aggregate do not have a Materially
Adverse Effect; (I) other Liens on the property or assets of the
Subsidiary existing on the date hereof; (J) Liens on any real
property, personal property or fixtures in connection with FFCA
Loan Documents or any Permitted Special Purpose Transaction and
Liens for the purpose of securing the refinancing thereof;
(K) judgment liens not giving rise to an Event of Default under
Section 12(i) hereof (as if the Subsidiary were the "Borrower"
referred to therein); and (L) such other Liens that the
Administrative Agent may approve in writing from time to time;
(xii) Engage in, or permit its Subsidiaries (including, without
limitation, the Guarantors) to engage in, transactions with its
or their affiliates, except for transactions (A) previously
closed with FFCA Loan Documents, (B) which are Permitted Special
Purpose Transactions; or (C) which are on terms no less favorable
to the Borrower, such Guarantor or such Subsidiary than the
Borrower, such Guarantor or such Subsidiary could obtain in arms-
length transactions from third parties which are not such
affiliates; provided, however, except for Special Purpose
-------- -------
Transactions neither the Borrower, its Subsidiaries or their
affiliates shall engage in transactions with the Site Lessors;
(xiii) Enter into or permit any of its Subsidiaries to enter into any
arrangement, directly or indirectly, whereby the Borrower,
Guarantor or any Subsidiary of the Borrower or Guarantor shall
sell or transfer any property owned by it in order then or
thereafter to lease such property or lease other property that
the Borrower, Guarantor or any Subsidiary intends to use for
substantially the same purpose as the property being sold or
transferred; provided, however, this (S)9(b)(xiii) shall not
-------- -------
prohibit the Forward
-44-
Commitment Transactions or any other Special Purpose Transactions
so long as such transaction is accounted for in the Financials of
the Borrower as an incurrence of Indebtedness, the Administrative
Agent's Lien on the Restaurant Sites set forth on Schedule 1, or
----------
such substitute restaurant locations as permitted by Section
6(f), is maintained and, so long as after giving effect to such
transaction, the Borrower shall be in compliance with all of the
financial covenants set forth in (S)11(c) (collectively,
"Permitted Special Purpose Transactions");
--------------------------------------
(xiv) Purchase or redeem any capital stock or other equity interests
in the Borrower or its Subsidiaries; provided, however, the
-------- -------
Borrower or any such Subsidiary may redeem or repurchase or
otherwise acquire capital stock or other equity interests held by
management employees of the Borrower and its Subsidiaries, in
each case in connection with the repurchase provisions under
employee stock option agreements or plans, stock purchase
agreements, subscription agreements, employment agreements,
employee benefit plan or arrangements, stockholder agreement or
other agreements to compensate management employees, provided
further, however, that the aggregate amount of payments made with
respect to all such purchases or redemptions effected after the
date hereof shall not exceed $100,000 in the aggregate, except
such limitation shall not apply to mandatory redemptions,
repurchases or acquisitions of capital stock or other equity
interests of management employees of the Borrower and its
Subsidiaries under stockholders agreements or employee
agreements.
(c) The Borrower and each of the Guarantors agrees that so long as the
Commitments are in effect and until the payment and satisfaction in full of all
the Obligations, the Borrower and the Guarantors will not:
(i) permit the Funded Debt Leverage Ratio for any Reference Period
ending during any period identified in the table below to be
greater than the ratio specified below opposite such period:
Period Ratio
------ -----
Closing Date - 12/30/99 5.00:1.00
12/31/99 - 12/30/00 4.75:1.00
12/31/00 and thereafter 4.25:1.00
(ii) permit the ratio of EBITDA to Interest Expense for any Reference
Period ending during a period identified in the table below to be
less than the ratio specified below opposite such period:
-45-
Period Ratio
------ -----
12/31/98 - 6/29/99 1.9:1.00
6/30/99 - 12/30/00 2.1:1.00
12/31/00-6/29/01 2.4:1.00
6/30/01 and thereafter 2.75:1.00
provided, however, for the purposes of this (S)10(c)(ii) only,
-------- -------
for the Reference Period ended December 31, 1998, both EBITDA and
Interest Expense shall be calculated solely by reference to the
period from September 30, 1998 through December 31, 1998; for the
Reference Period ended March 31, 1999 both EBITDA and Interest
Expense shall be calculated solely by reference to the period
from September 30, 1998 through March 31, 1999; for the Reference
Period ended June 30, 1999, both EBITDA and Interest Expense
shall be calculated solely by reference to the period from
September 30, 1998 through June 30, 1999.
(iii) permit the ratio of Operating Cash Flow to Fixed Obligations
for any Reference Period ending during any period thereafter
identified in the table below to be less than the ratio specified
below opposite such period:
Period Ratio
------ -----
7/1/99 - 12/30/99 1.1:1.00
12/31/99 and thereafter 1.2:1.00
(iv) permit consolidated Net Worth at any time to be less than the sum
(a) an amount equal to (i) the Company's consolidated Net Worth
on the Closing Date, minus (ii) $2,000,000, plus (b) on a
----- ----
cumulative basis, seventy-five percent (75%) of positive
consolidated net income for each fiscal quarter beginning with
the fiscal quarter ended September 30, 1998 (which consolidated
net income, for the purposes of this (S)11(c)(iv), shall be
calculated in accordance with the terms and provisions of the
Indenture), plus (c) 100% of the net proceeds of any sale by the
----
Borrower or any Subsidiary of (i) equity securities issued by the
Borrower or any Subsidiary or (ii) warrants or subscription
rights for equity securities issued by the Borrower or
Subsidiary, in each case, after the date hereof and other than to
the Borrower or any Subsidiary.
(v) permit consolidated Net Worth at any time to be less than
$5,000,000.
-46-
(vi) permit Capital Expenditures made during any fiscal year
identified in the table below to exceed the level of Capital
Expenditures specified below opposite such fiscal year:
Fiscal Year Ended Maximum Capital Expenditures
----------------- ----------------------------
December 31, 1998 $25,000,000
December 31, 1999 $40,000,000
and Thereafter
SECTION 12. EVENTS OF DEFAULT; ACCELERATION. If any of the following
----------------- ------------
events ("Events of Default") shall occur:
-----------------
(a) the Borrower shall fail to pay (i) any principal of or interest on the
Loans or (ii) any Reimbursement Obligations not funded by a Revolving Credit
Loan pursuant to Section 2(f), within two (2) days after when due and payable;
(b) the Borrower or any Guarantor shall fail to comply with the covenant
contained in (S)11(a)(i)(E), (F), (G) and (H), (S)11(a)(ii), (S)11(a)(iii)(B),
(D) and (F), (S)11(a)(iv), (S)11(a)(vi), (S)11(a)(vii) or (S)11(b)(ii) hereof
and such failure shall continue for twenty (20) days after the
earlier of (i) written notice thereof to the Borrower by the Administrative
Agent or (ii) actual knowledge thereof by the Borrower or any Guarantor;
(c) the Borrower or any Guarantor shall fail to perform any term, covenant
or agreement contained in this Agreement or any of the other Loan Documents
(other than those specified in clauses (a) and (b) above);
(d) any representation or warranty of the Borrower or any Guarantor in the
Loan Documents or in any certificate or notice given in connection therewith
shall have been false or misleading in any material respect at the time made or
deemed to have been made;
(e) the Borrower or any Guarantor shall be in default beyond any applicable
grace period under any agreement or agreements evidencing Indebtedness owing to
any Bank or any affiliates of any Bank or in excess of $250,000 in aggregate
principal amount, or shall fail to pay such Indebtedness when due, or within any
applicable period of grace;
(f) any of the Loan Documents shall cease to be in full force and effect;
(g) the Borrower or any Guarantor (i) shall make an assignment for the
benefit of creditors, (ii) shall be adjudicated bankrupt or insolvent, (iii)
shall seek the appointment of, or be the subject of an order appointing, a
trustee, liquidator or receiver as to all or part of its assets, (iv) shall
commence, approve or consent to, any case or proceeding under any bankruptcy,
reorganization or similar law and, in the case of an involuntary case or
proceeding, such case or proceeding is not dismissed within 45 days following
the commencement thereof, or (v) shall be the subject of an order for relief in
an involuntary case under federal bankruptcy law;
-47-
(h) the Borrower or any Guarantor shall be unable to pay debts as they
mature;
(i) there shall remain undischarged for more than 30 days any final
judgment or execution action against the Borrower or any Guarantor that,
together with other outstanding claims and execution actions against the
Borrower and the Guarantors, exceeds $750,000 in the aggregate;
(j) there shall occur a default not cured or waived within the applicable
period of grace, if any, under any Franchise Agreement, any Development
Agreement, the Indenture, any FFCA-Related Lease, any FFCA Loan Document or any
Forward Commitment Document by any party thereto or any Franchise Agreement, any
Development Agreement or any FFCA-Related Lease is canceled, terminated, revoked
or rescinded, otherwise than with the express prior written consent or approval
of the Majority Banks;
(k) there shall occur a Change of Control of the Borrower;
(l) the Borrower shall at any time, legally or beneficially, own less than
100% of the capital stock of each of the Guarantors;
THEN, or at any time thereafter:
(1) so long as the same may be continuing, the Administrative Agent may,
and, upon the request of the Majority Banks, shall, by notice in writing to the
Borrower declare all amounts owing with respect to this Agreement, the Notes and
the other Loan Documents and all Reimbursement Obligations to be, and they shall
thereupon forthwith become, immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby expressly
waived by the Borrower; provided that in the event of any Event of Default
specified in (g) or (h), all such amounts shall become immediately due and
payable automatically and without any requirement of notice from the
Administrative Agent or any Bank.
(2) If any one or more of the Events of Default specified in (g) or (h)
shall occur, any unused portion of the Total Commitment shall forthwith
terminate and each of the Banks shall be relieved of all further obligations to
make Loans to the Borrower, and the Administrative Agent shall be relieved of
all further obligations to issue, extend or renew Letters of Credit. If any
other Event of Default shall have occurred and be continuing, or if on any
Drawdown Date or other date for issuing, extending or renewing any Letter of
Credit the conditions precedent to the making of the Loans to be made on such
Drawdown Date or (as the case may be) to issuing, extending or renewing such
Letter of Credit on such other date are not satisfied, the Administrative Agent
and, upon the request of the Majority Banks, shall, by notice to the Borrower,
terminate the unused portion of the Total Commitments, and upon such notice
being given such unused portion of the Total Commitments, shall terminate
immediately and each of the Banks shall be relieved of all further obligations
to make Loans and the Administrative Agent shall be relieved of all further
obligations to issue, extend or renew Letters of Credit. No
-48-
termination of the Total Commitments, shall relieve the Borrower or the
Guarantors of any of the Obligations.
(3) In case any one or more of the Events of Default shall have occurred
and be continuing, and whether or not the Banks shall have accelerated the
maturity of the Loans, each Bank, if owed any amount with respect to the Loans
or the Reimbursement Obligations, may, with the consent of the Majority Banks
but not otherwise, proceed to protect and enforce its rights by suit in equity,
action at law or other appropriate proceeding, whether for the specific
performance of any covenant or agreement contained in this Agreement and the
other Loan Documents or any instrument pursuant to which the Obligations to such
Bank are evidenced, including as permitted by applicable law the obtaining of
the appointment of a receiver, and, if such amount shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right of such Bank. No remedy herein conferred upon any Bank
or the Administrative Agent or the holder of any Note or purchaser of any Letter
of Credit Participation is intended to be exclusive of any other remedy and each
and every remedy shall be cumulative and shall be in addition to every other
remedy given hereunder or now or hereafter existing at law or in equity or by
statute or any other provision of law.
(4) In the event that, following the occurrence or during the continuance
of any Default or Event of Default, the Administrative Agent or any Bank, as the
case may be, receives any monies in connection with the enforcement of any the
Loan Documents, such monies shall be distributed for application as follows:
(a) First, to the payment of, or (as the case may be) the reimbursement of
the Administrative Agent for or in respect of all reasonable costs,
expenses, disbursements and losses which shall have been incurred or
sustained by the Administrative Agent in connection with the collection
of such monies by the Administrative Agent, for the exercise,
protection or enforcement by the Administrative Agent of all or any of
the rights, remedies, powers and privileges of the Administrative Agent
under this Agreement or any of the other Loan Documents or in respect
of the Collateral or in support of any provision of adequate indemnity
to the Administrative Agent against any taxes or liens which by law
shall have, or may have, priority over the rights of the Administrative
Agent to such monies;
(b) Second, to all other Obligations in such order or preference as the
Majority Banks may determine; provided, however, that distributions in
respect of such obligations shall be made (i) pari passu among
---- -----
Obligations with respect to the Administrative Agent's fee payable
pursuant to (S)6(a) and all other Obligations and (ii) Obligations
owing to the Banks with respect to each type of Obligation such as
interest, principal, fees and expenses, shall be made among the Banks
pro rata; and provided, further, that the Administrative Agent may in
--- ---- --------- -------
its discretion make proper allowance to take into account any
Obligations not then due and payable;
-49-
(c) Third, upon payment and satisfaction in full or other provisions for
payment in full satisfactory to the Banks and the Administrative Agent
of all of the Obligations, to the payment of any obligations required
to be paid pursuant to (S)9-504(1)(c) of the Uniform Commercial Code
of the Commonwealth of Massachusetts; and
(d) Fourth, the excess, if any, shall be returned to the Borrower or to
such other Persons as are entitled thereto.
SECTION 13. SET OFF. Regardless of the adequacy of any collateral, during
-------
the continuance of any Event of Default, any deposits or other sums credited by
or due from any of the Banks to the Borrower or the Guarantors and any
securities or other property of the Borrower or the Guarantors in the possession
of such Bank may be applied to or set off by such Bank against the payment of
Obligations and any and all other liabilities, direct, or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising, of the
Borrower or the Guarantors, as the case may be, to such Bank. Each of the Banks
agrees with each other Bank that (a) if an amount to be set off is to be applied
to Indebtedness of the Borrower or the Guarantors to such Bank, other than
Indebtedness evidenced by the Notes held by such Bank or constituting
Reimbursement Obligations owed to such Bank, such amount shall be applied
ratably to such other Indebtedness and to the Indebtedness evidenced by all such
Notes held by such Bank or constituting Reimbursement Obligations owed to such
Bank, and (b) if such Bank shall receive from the Borrower or a Guarantor,
whether by voluntary payment, exercise of the right of setoff, counterclaim,
cross action, enforcement of the claim evidenced by the Notes held by, or
constituting Reimbursement Obligations owed to, such Bank by proceedings against
the Borrower or a Guarantor at law or in equity or by proof thereof in
bankruptcy, reorganization, liquidation, receivership or similar proceedings, or
otherwise, and shall retain and apply to the payment of the Note or Notes held
by, or Reimbursement Obligations owed to, such Bank any amount in excess of its
ratable portion of the payments received by all of the Banks with respect to the
Notes held by, and Reimbursement Obligations owed to, all of the Banks, such
Bank will make such disposition and arrangements with the other Banks with
respect to such excess, either by way of distribution, pro tanto assignment of
--- -----
claims, subrogation or otherwise as shall result in each Bank receiving in
respect of the Notes held by it or Reimbursement obligations owed it its
proportionate payment as contemplated by this Agreement; provided that if all or
--------
any part of such excess payment is thereafter recovered from such Bank, such
disposition and arrangements shall be rescinded and the amount restored to the
extent of such recovery, but without interest.
SECTION 14. THE BANK AGENTS.
---------------
(a) Each of the Bank Agents is authorized to take such action on behalf of
each of the Banks and to exercise all such powers as are hereunder and under any
of the other Loan Documents and any related documents delegated to such Bank
Agent, together with such powers as are reasonably incident thereto, provided
--------
that no duties or responsibilities not expressly assumed herein or therein shall
be implied to have been assumed by such Bank Agent.
-50-
(b) The relationship between each Bank Agent and each of the Banks is that
of an independent contractor. The use of the term "Agent" is for convenience
only and is used to describe, as a form of convention, the independent
contractual relationship between each Bank Agent and each of the Banks. Nothing
contained in this Agreement nor the other Loan Documents shall be construed to
create an agency, trust or other fiduciary relationship between each Bank Agent
and any of the Banks.
(c) As an independent contractor empowered by the Banks to exercise certain
rights and perform certain duties and responsibilities hereunder and under the
other Loan Documents, each Bank Agent is nevertheless a "representative" of the
Banks, as that term is defined in Article 1 of the Uniform Commercial Code, for
purposes of actions for the benefit of the Banks and each Bank Agent with
respect to all collateral security and guaranties contemplated by the Loan
Documents. Such actions include the designation of the Administrative Agent as
"secured party", "mortgagee" or the like on all financing statements and other
documents and instruments, whether recorded or otherwise, relating to the
attachment perfection, priority or enforcement of any security interests,
mortgages or deeds of trust in collateral security intended to secure the
payment or performance of any of the Obligations, all for the benefit of the
Banks and each Bank Agent.
(d) Each Bank Agent may exercise its powers and execute its duties by or
through employees or agents and shall be entitled to take, and to rely on,
advice of counsel concerning all matters pertaining to its rights and duties
under this Agreement and the other Loan Documents. Each Bank Agent may utilize
the services of such Persons as such Bank Agent in its sole discretion may
reasonably determine, and all reasonable fees and expenses of any such Persons
shall be paid by the Borrower.
(e) Neither any Bank Agent nor any of its shareholders, directors, officers
or employees nor any other Person assisting them in their duties nor any agent
or employee thereof, shall be liable to the Banks for any waiver, consent or
approval given or any action taken, or omitted to be taken, in good faith by it
or them hereunder or under any of the other Loan Documents, or in connection
herewith or therewith, or be responsible for the consequences of any oversight
or error of judgment whatsoever, except that each Bank Agent or such other
Person, as the case may be, may be liable for losses due to its willful
misconduct or gross negligence.
(f) Neither of the Bank Agents shall be responsible for the execution or
validity or enforceability of this Agreement, the Notes, the Letters of Credit
any of the other Loan Documents or any instrument at any time constituting, or
intended to constitute, collateral security for the Notes, or for the value of
any such collateral security or for the validity, enforceability or
collectability of any such amounts owing with respect to the Notes, or for any
recitals or statements, warranties or representations made herein or in any of
the other Loan Documents or in any certificate or instrument hereafter furnished
to it by or on behalf of the Borrower or the Guarantors, or be bound to
ascertain or inquire as to the performance or observance of any of the terms,
conditions, covenants or agreements herein or in any instrument at any time
constituting, or intended to constitute, collateral security for the Notes or to
inspect
-51-
any of the properties, books or records of the Borrower or the Guarantors. The
Administrative Agent shall not be bound to ascertain whether any notice,
consent, waiver or request delivered to it by the Borrower or any holder of any
of the Notes shall have been duly authorized or is true, accurate and complete.
Neither Bank Agent has made nor does it now make any representations or
warranties, express or implied, nor does it assume any liability to the Banks,
with respect to the credit worthiness or financial conditions of the Borrower or
the Guarantors. Each Bank acknowledges that it has, independently and without
reliance upon either Bank Agent or any other Bank, and based upon such
information and documents as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement.
(g) A payment by the Borrower or any Guarantor to the Administrative Agent
hereunder or any of the other Loan Documents for the account of any Bank shall
constitute a payment to such Bank. The Administrative Agent agrees promptly to
distribute to each Bank such Bank's pro rata share of payments received by the
--- ----
Administrative Agent for the account of the Banks except as otherwise expressly
provided herein or in any of the other Loan Documents.
(h) Between the Administrative Agent and the Banks, the Administrative
Agent shall be fully justified in failing or refusing to take any action under
this Agreement unless it shall first have received such advice or concurrence of
the Majority Banks as it reasonably deems appropriate or it shall first be
indemnified to its reasonable satisfaction by the Banks (in accordance with
(S)14(i)) against any and all liability and expense which may be incurred by it
by reason of taking or continuing to take any such action. The Administrative
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement in accordance with a request of the Majority Banks,
and such request and any action taken or failure to act pursuant thereto shall
be binding upon the Banks and all future holders of the Revolving Credit Notes
or of a Letter of Credit Participation. If in the opinion of the Administrative
Agent the distribution of any amount received by it in such capacity hereunder,
under the Notes or under any of the other Loan Documents might involve it in
liability, it may refrain from making distribution until its right to make
distribution shall have been adjudicated by a court of competent jurisdiction.
If a court of competent jurisdiction shall adjudge that any amount received and
distributed by the Administrative Agent is to be repaid, each Person to whom any
such distribution shall have been made shall either repay to the Administrative
Agent its proportionate share of the amount so adjudged to be repaid or shall
pay over the same in such manner and to such Persons as shall be determined by
such court.
(i) Notwithstanding anything to the contrary contained in this Agreement or
any of the other Loan Documents, any Bank that fails (a) to make available to
the Administrative Agent its pro rata share of any Loan or to purchase any
--- ----
Letter of Credit Participation or (b) to comply with the provisions of (S)13
with respect to making dispositions and arrangements with the other Banks, where
such Bank's share of any payment received, whether by setoff or otherwise, is in
excess of its pro rata share of such payments due and payable to all of the
--- ----
Banks, in each case as, when and to the full extent required by the provisions
of this Agreement shall be deemed delinquent (a "Delinquent Bank") and shall be
---------------
deemed a Delinquent Bank until such time as such delinquency is satisfied. A
Delinquent Bank shall be deemed to have assigned any and all payments due to it
from the Borrower and the Guarantors, whether on account of outstanding
-52-
Loans, Unpaid Reimbursement Obligations, interest fees or otherwise, to the
remaining nondelinquent Banks for application to, and reduction of, their
respective pro rata shares of all outstanding Loans and Unpaid Reimbursement
--- ----
Obligations. The Delinquent Bank hereby authorizes the Administrative Agent to
distribute such payments to the nondelinquent Banks in proportion to their
respective pro rata shares of all outstanding Loans and Unpaid Reimbursement
--- ----
Obligations. A Delinquent Bank shall be deemed to have satisfied in full a
delinquency when and it as a result of application of the assigned payments to
all outstanding Loans and Unpaid Reimbursement Obligations of the nondelinquent
Banks, the Banks' respective pro rata shares of all outstanding Loans and Unpaid
--- ----
Reimbursement Obligations have returned to those in effect immediately prior to
such delinquency and without giving effect to the nonpayment causing such
delinquency.
(j) The Administrative Agent may deem and treat the payee of any Note or
the purchaser of any Letter of Credit Participation as the absolute owner or
purchaser thereof for all purposes hereof until it shall have been furnished in
writing with a different name by such payee or by a subsequent holder, assignee
or transferee.
(k) The Banks ratably agree hereby to indemnify and hold harmless each Bank
Agent from and against any and all claims, actions and suits (whether groundless
or otherwise), losses, damages, costs, expenses (including any expenses for
which such Bank Agent has not been reimbursed by the Borrower and the Guarantors
as required by (S)17), and liabilities of every nature and character arising out
of or related to this Agreement, the Notes, or any of the other Loan Documents
or the transactions contemplated or evidenced hereby or thereby, or such Bank
Agent's actions taken hereunder or thereunder, except to the extent that any of
the same shall be directly caused by such Bank Agent's willful misconduct or
gross negligence.
(l) In its individual capacity, (a) BKB shall have the same obligations and
the same rights, powers and privileges in respect to its Commitment and the
Loans made by it and as the holder of any of the Notes and as the purchaser of
any Letter of Credit Participations, as it would have were it not also the
Administrative Agent and (b) Chase Bank of Texas, N.A. shall have the same
obligations and the same rights, powers and privileges in respect to its
Commitment and the Loans made by it and as the holder of any of the Notes and as
the purchaser of any Letter of Credit Participations, as it would have were it
not also the Documentation Agent.
(m) Any Bank Agent may resign at any time by giving sixty (60) days prior
written notice thereof to the Banks, the Borrower and the other Bank Agent.
Upon any such resignation, the Majority Banks shall have the right to appoint a
successor Bank Agent. Unless a Default or Event of Default shall have occurred
and be continuing, such successor Bank Agent shall be reasonably acceptable to
the Borrower. If no successor Bank Agent shall have been so appointed by the
Majority Banks and shall have accepted such appointment within thirty (30) days
after the retiring Banks Agent's giving of notice of resignation, then the
retiring Bank Agent may, on behalf of the Banks, appoint a successor Bank Agent
which shall be a financial institution having a rating of not less than A or its
equivalent by Standard & Poor's Corporation. Upon the acceptance of any
appointment as a Bank Agent hereunder by a successor Bank Agent such successor
Bank Agent shall thereupon succeed to and become vested with all the rights,
powers,
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privileges and duties of the retiring Bank Agent and the retiring Bank
Agent shall be discharged from its duties and obligations hereunder. After any
retiring Bank Agent's resignation, the provisions of this Agreement and the
other Loan Documents shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as a Bank Agent.
(n) Each Bank hereby agrees that upon learning of the existence of a
Default or an Event of Default it shall promptly notify the Administrative Agent
thereof. The Administrative Agent hereby agrees that upon receipt of any notice
under this (S)14(l) it shall promptly notify the other Banks of the existence of
such Default or Event of Default.
SECTION 15. ASSIGNMENT AND PARTICIPATIONS.
-----------------------------
(a) Except as provided herein, each Bank may, with the Borrower's Approval
(which shall not be unreasonably withheld or delayed and which Approval shall
not be required for any proposed assignment made after the occurrence of an
Event of Default and during the continuance thereof), assign to one or more
Eligible Assignees all or a portion of its interests, rights and obligations
under this Agreement (including all or a portion of its Commitment Percentage
and Commitment and the same portion of the Loans at the time owing to it, the
Note held by it and its participating interest in the risk relating to any
Letters of Credit); provided that (i) the Administrative Agent shall have given
--------
its prior written consent to such assignment, which consent will not be
unreasonably withheld, (ii) each such assignment shall be of a constant, and not
a varying, percentage of all the assigning Bank's rights and obligations under
this Agreement, (iii) each assignment shall be in an amount that is a minimum
amount of $5,000,000 and (iv) the parties to such assignment shall execute and
deliver to the Administrative Agent, for recording in the Register (as
hereinafter defined), an Assignment and Acceptance, substantially in the form of
Exhibit G hereto (an "Assignment and Acceptance"), together with any Note
- --------- -------------------------
subject to such assignment. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each Assignment and
Acceptance, which effective date shall be at least five (5) Business Days after
the execution thereof, (i) the assignee thereunder shall be party hereto and, to
the extent provided in such Assignment and Acceptance, have the rights and
obligations of a Bank hereunder, and (ii) the assigning Bank, shall, to the
extent provided in such assignment and upon payment to the Administrative Agent
of the registration fee referred to in (S)15(c), be released from its
obligations under this Agreement.
(b) By executing and delivering an Assignment and Acceptance, the parties
to the assignment hereunder confirm to and agree with each other and the other
parties hereto as follows:
(i) other than the representation and warranty that it is the legal
and beneficial owner of the interest being assigned thereby free and clear
of any adverse claim, the assigning Bank makes no representation or
warranty, express or implied, and assumes no responsibility with respect to
any statements, warranties or representations made in or in connection with
this Agreement or the execution, legality, validity, enforceability,
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genuineness, sufficiency or value of this Agreement, the other Loan
Documents or any other instrument or document furnished pursuant hereto or
the attachment, perfection or priority of any security interest or
mortgage,
(ii) the assigning Bank makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower and the Guarantors or any other Person primarily or secondarily
liable in respect of any of the Obligations, or the performance or
observance by the Borrower and the Guarantors or any other Person primarily
or secondarily liable in respect of any of the Obligations of any of their
obligations under this Agreement or any of the other Loan Documents or any
other instrument or document furnished pursuant hereto or thereto;
(iii) such assignee confirms that it has received a copy of this
Agreement, together with copies of the most recent financial statements
referred to herein and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance;
(iv) such assignee will, independently and without reliance upon the
assigning Bank, the Bank Agents 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 decisions in taking or not taking action
under this Agreement;
(v) such assignee represents and warrants that it is an Eligible
Assignee;
(vi) such assignee appoints and authorizes each of the Bank Agents to
take such action as agent on its behalf and to exercise such powers under
this Agreement and the other Loan Documents as are delegated to the
Administrative Agent by the terms hereof or thereof together with such
powers as are reasonably incidental thereto;
(vii) such assignee agrees that it will perform in accordance with
their terms all of the obligations that by the terms of this Agreement are
required to be performed by it as a Bank;
(viii) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance; and
(ix) such assignee acknowledges that it has made arrangements with the
assigning Bank satisfactory to such assignee with respect to its
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pro rata share of Letter of Credit Fees in respect of outstanding Letters
--- ----
of Credit.
(c) The Administrative Agent shall maintain a copy of each Assignment and
Acceptance delivered to it and a register or similar list (the "Register") for
--------
the recordation of the names and addresses of the Banks and the Commitment
Percentage of, and principal amount of the Revolving Credit Loans owing to and
Letter of Credit Participations purchased by, the Banks from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, the Administrative Agent and the Banks may treat each Person
whose name is recorded in the Register as a Bank hereunder for all purposes of
this Agreement. The Register shall be available for inspection by the Borrower
and the Banks at any reasonable time and from time to time upon reasonable prior
notice. Upon each such recordation, the assigning Bank agrees to pay to the
Administrative Agent a registration fee in the sum of $3,500.
(d) Upon its receipt of an Assignment and Acceptance executed by the
parties to such assignment, together with each Note subject to such assignment
the Administrative Agent shall (a) record the information contained therein in
the Register, and (b) give prompt notice thereof to the Borrower and the Banks
(other than the assigning Bank). Within five (5) Business Days after receipt
such notice, the Borrower, at its own expense, shall execute and deliver to the
Administrative Agent, in exchange for each surrendered Note, a new Note to the
order of such Eligible Assignee in an amount equal to the amount assumed by such
Eligible Assignee pursuant to such Assignment and Acceptance and, if the
assigning Bank has retained some portion of its obligations hereunder, a new
Note to the order of the assigning Bank in an amount equal to the amount
retained by it hereunder. Such new Notes shall provide that they are
replacements for the surrendered Notes, shall be in an aggregate principal
amount equal to the aggregate principal amount of the surrendered Notes, shall
be dated the effective date of such Assignment and Acceptance and shall
otherwise be substantially the form of the assigned Notes. Within five (5) days
of issuance of any new Notes pursuant to this (S)15(d), the Borrower shall
deliver an opinion of counsel, addressed to the Banks and the Administrative
Agents, relating to the due authorization, execution and delivery of such new
Notes and the legality, validity and binding effect thereof in form and
substance satisfactory to the Administrative Agent. The surrendered Notes shall
be canceled and returned to the Borrower.
(e) Each Bank may sell participations to one or more banks or other
entities in all or a portion of such Bank's rights and obligations under this
Agreement and the other Loan Documents; provided that (a) each such
--------
participation shall be in an amount of not less than $5,000,000, (b) any such
sale or participation shall not affect the rights and duties of the selling Bank
hereunder to the Borrower and (c) the only rights granted to the participant
pursuant to such participation arrangements with respect to waivers, amendments
or modifications of the Loan Documents shall be the rights to approve waivers,
amendments or modifications that would reduce the principal of or the interest
rate on any Loans, extend the term or increase the amount of the Commitment of
such Bank as it relates to such participant, reduce the amount of any commitment
fees or Letter of Credit Fees to which such participant is entitled or extend
any regularly scheduled payment date for principal or interest.
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(f) The Borrower agrees that in addition to disclosures made in accordance
with standard and customary banking practices any Bank may disclose information
obtained by such Bank pursuant to this Agreement to assignees or participants
and potential assignees or participants hereunder; provided that such assignees
--------
or participants or potential assignees or participants shall agree (i) to treat
in confidence such information unless such information otherwise becomes public
knowledge, (ii) not to disclose such information to a third party, except as
required by law or legal process and (iii) not to make use of such information
for purposes of transactions unrelated to such contemplated assignment or
participation.
(g) If any assignee Bank is an Affiliate of the Borrower or Guarantor, then
any such assignee Bank shall have no right to vote as a Bank hereunder or under
any of the other Loan Documents for purposes of granting consents or waivers or
for purposes of agreeing to amendments or other modifications to any of the Loan
Documents or for purposes of making requests to the Administrative Agent
pursuant to (S)12(1) or (2), and the determination of the Majority Banks shall
for all purposes of this Agreement and the other Loan Documents be made without
regard to such assignee Bank's interest in any of the Loans. If any Bank sells
a participating interest in any of the Loans or Reimbursement Obligations to a
participant, and such participant is the Borrower or any Guarantor or an
Affiliate of the Borrower or any Guarantor, then such transferor Bank shall
promptly notify the Administrative Agent of the sale of such participation. A
transferor Bank shall have no right to vote as a Bank hereunder or under any of
the other Loan Documents for purposes of granting consents or waivers or for
purposes of agreeing to amendments or modifications to any of the Loan Documents
or for purposes of making requests to the Administrative Agent pursuant to
(S)12(1) or (2), to the extent that such participation is beneficially owned by
the Borrower or any Guarantor or any Affiliate of the Borrower or any Guarantor,
and the determination of the Majority Banks shall for all purposes of this
Agreement and the other Loan Documents be made without regard to the interest of
such transferor Bank in the Loans to the extent of such participation.
(h) Any assigning Bank shall retain its rights to be indemnified pursuant
to (S)17(a) with respect to any claims or actions arising prior to the date of
such assignment. If any assignee Bank is not incorporated under the laws of the
United States of America or any state thereof, it shall, prior to the date on
which any interest or fees are payable hereunder or under any of the other Loan
Documents for its account, deliver to the Borrower and the Administrative Agent
certification as to its exemption from deduction or withholding of any United
States federal income taxes. Anything contained in this (S)15 to the contrary
notwithstanding, any Bank may at any time pledge all or any portion of its
interest and rights under this Agreement (including all or any portion of its
Notes) to any of the twelve Federal Reserve Banks organized under (S)4 of the
Federal Reserve Act, 12 U.S.C. (S)341. No such pledge or the enforcement
thereof shall release the pledgor Bank from its obligations hereunder or under
any of the other Loan Documents.
SECTION 16. CONSENTS, AMENDMENTS, WAIVERS, ETC.
-----------------------------------
Any consent or approval required or permitted by this Agreement to be given
by the Banks may be given, and any term of this Agreement, the other Loan
Documents or any other instrument related hereto or mentioned herein may be
amended, and the performance or observance by the Borrower or any Guarantor of
any terms of this Agreement, the other Loan
-57-
Documents or such other instrument or the continuance of any Default or Event of
Default may be waived (either generally or in a particular instance and either
retroactively or prospectively) with, but only with, the written consent of the
Borrower and the written consent of the Majority Banks. Notwithstanding the
foregoing, any extension of the Maturity Date, any reduction in the rate of
interest on the Notes (other than interest accruing pursuant to Section 4(c)
following the effective date of any waiver by the Majority Banks of the Default
or Event of Default relating thereto), any increase in the term of the Notes,
any increase in the amount of the Commitments of the Banks and any reduction in
the amount of commitment fees or Letter of Credit Fees hereunder may not be
changed without the written consent of the Borrower and the written consent of
all Banks; any increase in the rate of interest on Notes, any decrease in the
term of the Notes, any decrease in the amount of the Commitments of the Banks
and any increase in the amount of commitment fees or Letter of Credit Fees
hereunder may not be made without the written consent of the Borrower and the
written consent of the Majority Banks; and the definition of Majority Banks may
not be amended without the written consent of all Banks. Except as set forth in
Section 6(f), any release of Liens on personal property and real property in
favor of the Administrative Agent or any release of any Guarantors under this
Agreement or any Loan Document may not be obtained without the written consent
of the Borrower and the written consent of all Banks. No waiver shall extend to
or affect any obligation not expressly waived or impair any right consequent
thereon. No course of dealing or delay or omission on the part of the
Administrative Agent or any Bank in exercising any right shall operate as a
waiver thereof or otherwise be prejudicial thereto. No notice to or demand upon
the Borrower shall entitle the Borrower to other further notice or demand in
similar or other circumstances.
SECTION 17. MISCELLANEOUS.
-------------
(a) The Borrower agrees to indemnify and hold harmless the Bank Agents and
the Banks against all claims and losses of every kind arising out of the Loan
Documents, including without limitation against those in respect of the
application of Environmental Laws to the Borrower, except for claims and losses
which result from the gross negligence or willful misconduct of the party
seeking to be indemnified.
(b) The Borrower shall pay to the Administrative Agent on account of the
Banks promptly on demand all costs and expenses (including any taxes and
reasonable legal and other professional fees and fees of its commercial finance
examiner) incurred by the Administrative Agent in connection with the
preparation, negotiation, execution, amendment, administration, termination or
enforcement of any of the Loan Documents.
(c) Any communication to be made hereunder shall (a) be made in writing,
but unless otherwise stated, may be made by telex, facsimile transmission or
letter, and (b) be made or delivered to the address of the party receiving
notice which is identified with its signature below (unless such party has by
five (5) days' prior written notice specified another address), and shall be
deemed made or delivered, when dispatched, left at that address, or five (5)
days after being mailed, postage prepaid, to such address.
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(d) This Agreement shall be binding upon and inure to the benefit of each
party hereto and its successors and assigns, but the Borrower may not assign its
rights or obligations hereunder. No failure or delay by the Bank Agents or the
Banks to exercise any right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or privilege preclude
any other right, power or privilege.
(e) The provisions of this Agreement are severable and if any one provision
hereof shall be held invalid or unenforceable in whole or in part in any
jurisdiction, such invalidity or unenforceability shall affect only such
provision in such jurisdiction. This Agreement, together with all Exhibits and
Schedules hereto, expresses the entire understanding of the parties with respect
to the transactions contemplated hereby. This Agreement and any amendment hereto
may be executed in several counterparts (which may include counterparts
delivered by telecopier), each of which shall be an original, and all of which
shall constitute one agreement. In proving this Agreement, it shall not be
necessary to produce more than one such counterpart executed by the party to be
charged. THIS AGREEMENT AND THE NOTES ARE CONTRACTS UNDER THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS AND SHALL BE CONSTRUED IN ACCORDANCE THEREWITH AND
GOVERNED THEREBY. THE BORROWER AND EACH GUARANTOR AGREES THAT ANY SUIT FOR THE
ENFORCEMENT OF ANY OF THE LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE
COMMONWEALTH OF MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN. The Borrower
and each Guarantor, as an inducement to the Bank Agents and the Banks to enter
into this Agreement, hereby waives its right to a jury trial with respect to any
action arising in connection with any Loan Document.
** THE NEXT PAGE IS THE SIGNATURE PAGE **
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IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as a
sealed instrument as of the date first above written.
NE RESTAURANT COMPANY, INC.
By:__________________________________
Name:
Title:
Tel: (508) 870-9200
Fax: []
GUARANTORS:
BERTUCCI'S, INC.
By:_________________________________
Name:
Title:
[ ]
[ ]
Tel: [ ]
Fax: [ ]
BERTUCCI'S RESTAURANT CORP.
By:________________________________
Name:
Title:
[ ]
[ ]
Tel: [ ]
Fax: [ ]
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BERTUCCI'S SECURITIES CORPORATION
By:_____________________________________
Name:
Title:
[ ]
[ ]
Tel: [ ]
Fax: [ ]
BERESTCO, INC.
By:_____________________________________
Name:
Title:
[ ]
[ ]
Tel: [ ]
Fax: [ ]
SAL & VINNIE'S SICILIAN STEAKHOUSE INC.
By:_____________________________________
Name:
Title:
[ ]
[ ]
Tel: [ ]
Fax: [ ]
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BANKBOSTON, N.A., INDIVIDUALLY AND AS
ADMINISTRATIVE AGENT
By:_____________________________________
Thomas F. Farley
Managing Director
100 Federal Street, 9th Floor
Boston, Massachusetts 02110
Tel: (617) 434-5812
Fax: (617) 434-0637
CHASE BANK OF TEXAS, N.A., INDIVIDUALLY AND AS
DOCUMENTATION AGENT
BY:_____________________________________
WILLIAM P. WALLACE
VICE PRESIDENT
707 TRAVIS STREET
MAIL STOP: 4CCBBN59
HOUSTON, TX 77002
TEL: (713) 216-1041
FAX: (713) 216-6710
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