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EXHIBIT 10.1.6
AMENDED AND RESTATED
REVOLVING CREDIT AND TERM LOAN AGREEMENT
Dated as of October 29, 2003
by and among
DAVE & BUSTER'S, INC.
DAVE & BUSTER'S I, L.P.
DAVE & BUSTER'S OF ILLINOIS, INC.
DAVE & BUSTER'S OF GEORGIA, INC.
DAVE & BUSTER'S OF PENNSYLVANIA, INC.
DANB TEXAS, INC.
DAVE & BUSTER'S OF MARYLAND, INC.
DAVE & BUSTER'S OF CALIFORNIA, INC.
DAVE & BUSTER'S OF COLORADO, INC.
DAVE & BUSTER'S OF NEW YORK, INC.
DAVE & BUSTER'S OF FLORIDA, INC.
DAVE & BUSTER'S OF PITTSBURGH, INC.
D&B REALTY HOLDING, INC.
DAVE & BUSTER'S OF HAWAII, INC.
D&B LEASING, INC.
(collectively, the "Domestic Borrowers")
6131646 CANADA INC.
(the "Canadian Borrower")
FLEET NATIONAL BANK
and the other lending institutions from time to time
listed on Schedule 1 and Schedule 2 hereto
(the "Lenders")
FLEET NATIONAL BANK, as agent, administrative agent and collateral agent
(the "Agent")
and
BANK ONE, NA, as documentation agent
(the "Documentation Agent")
with
FLEET SECURITIES, INC.,
having acted as Arranger
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TABLE OF CONTENTS
Page
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1. DEFINITIONS AND RULES OF INTERPRETATION..............................................................2
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1.1. Definitions...............................................................................2
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1.2. Rules of Interpretation..................................................................23
-----------------------
2. THE REVOLVING CREDIT FACILITIES.....................................................................24
-------------------------------
2.1. Commitment to Lend.......................................................................24
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2.1.1. Domestic Revolving Credit Loans...............................................24
-------------------------------
2.1.2. Canadian Loans................................................................24
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2.1.3. General Conditions............................................................25
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2.2. Commitment Fee...........................................................................25
--------------
2.2.1. Domestic Commitment Fee.......................................................25
-----------------------
2.2.2. Canadian Commitment Fee.......................................................25
-----------------------
2.2.3. Payment Terms.................................................................25
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2.3. Adjustments of Total Revolving Credit Commitment.........................................25
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2.3.1. Optional Reduction of Total Revolving Credit Commitment.......................25
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2.3.2. Increase in Total Domestic Revolving Commitment...............................26
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2.4. The Revolving Credit Notes...............................................................26
--------------------------
2.4.1. Domestic Revolving Credit Notes...............................................26
-------------------------------
2.4.2. Canadian Notes................................................................26
--------------
2.4.3. Revolving Credit Note Records.................................................27
-----------------------------
2.5. Interest on Revolving Credit Loans.......................................................27
----------------------------------
2.6. Requests for Revolving Credit Loans......................................................28
-----------------------------------
2.6.1. Requests for Domestic Revolving Credit Loans..................................28
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2.6.2. Requests for Canadian Loans...................................................28
---------------------------
2.7. Conversion Options.......................................................................29
------------------
2.7.1. Conversion to Different Type of Domestic Revolving Credit Loan................29
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2.7.2. Conversion to Different Type of Canadian Loan.................................29
---------------------------------------------
2.7.3. Continuation of Type of Revolving Credit Loan.................................30
---------------------------------------------
2.7.4. Eurodollar Rate Loans and Canadian Cost of Funds Loans........................30
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2.8. Funds for Revolving Credit Loans.........................................................30
--------------------------------
2.8.1. Funding Procedures............................................................30
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2.8.2. Advances by Agent of Domestic Revolving Credit Loans..........................31
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2.9. Requests for Loans, Conversions, etc.....................................................31
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3. REPAYMENT OF THE REVOLVING CREDIT LOANS.............................................................32
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3.1. Maturity.................................................................................32
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3.2. Mandatory Repayments of Revolving Credit Loans...........................................32
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3.3. Mandatory Clean Down.....................................................................32
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3.4. Optional Repayments of Revolving Credit Loans............................................32
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4. THE TERM LOAN A.....................................................................................33
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4.1. Commitment to Lend.......................................................................33
------------------
4.2. The Term A Note..........................................................................33
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4.3. Repayment of Principal of Term Loan A....................................................34
-------------------------------------
4.4. Prepayment of Term Loan A................................................................34
-------------------------
4.4.1. Optional Prepayment...........................................................34
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4.4.2. Mandatory Prepayments.........................................................34
---------------------
4.5. Interest Rates...........................................................................36
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4.6. Notification by Domestic Borrowers; Interest Rate Conversion Options.....................37
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4.7. Amounts, etc.............................................................................37
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5. LETTERS OF CREDIT...................................................................................37
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5.1. Letter of Credit Commitment..............................................................37
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5.1.1. Commitment to Issue Letters of Credit.........................................37
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5.1.2. Letter of Credit Applications.................................................38
-----------------------------
5.1.3. Terms of Letters of Credit....................................................38
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5.1.4. Reimbursement Obligations of Domestic Lenders.................................38
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5.1.5. Participations of Domestic Lenders............................................38
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5.2. Reimbursement Obligation of the Domestic Borrowers.......................................38
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5.3. Letter of Credit Payments................................................................39
-------------------------
5.4. Obligations Absolute.....................................................................40
--------------------
5.5. Reliance by the Agent....................................................................40
---------------------
5.6. Letter of Credit Fee.....................................................................40
--------------------
6. CERTAIN GENERAL PROVISIONS..........................................................................41
--------------------------
6.1. Fees.....................................................................................41
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6.2. Funds for Payments.......................................................................41
------------------
6.2.1. Payments to Agent and Canadian Lenders........................................41
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6.2.2. No Offset, etc................................................................41
---------------
6.3. Computations.............................................................................42
------------
6.4. Inability to Determine Eurodollar Rate or Canadian Cost of Funds Rate....................42
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6.5. Illegality...............................................................................42
----------
6.6. Additional Costs, etc....................................................................43
---------------------
6.7. Capital Adequacy.........................................................................44
----------------
6.8. Certificate..............................................................................44
-----------
6.9. Indemnity................................................................................44
---------
6.10. Interest After Default..................................................................45
----------------------
6.10.1. Overdue Amounts..............................................................45
---------------
6.10.2. Amounts Not Overdue..........................................................45
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6.10.3. Letters of Credit............................................................45
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6.11. Concerning Joint and Several Liability of the Domestic Borrowers........................46
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6.12. Currency Matters........................................................................48
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6.12.1. Currency Fluctuations........................................................48
---------------------
6.12.2. Currency of Account..........................................................49
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7. COLLATERAL SECURITY; COLLATERAL NOTES...............................................................49
-------------------------------------
7.1. Security of Domestic Borrowers...........................................................49
------------------------------
7.2. Security of Canadian Borrower............................................................50
-----------------------------
7.3. Collateral Notes.........................................................................50
----------------
8. REPRESENTATIONS AND WARRANTIES......................................................................50
------------------------------
8.1. Corporate Authority......................................................................50
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8.1.1. Incorporation; Good Standing..................................................50
----------------------------
8.1.2. Authorization.................................................................51
-------------
8.1.3. Enforceability................................................................51
--------------
8.2. Governmental Approvals...................................................................51
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8.3. Title to Properties; Leases..............................................................51
---------------------------
8.4. Financial Statements and Projections.....................................................51
------------------------------------
8.4.1. Fiscal Year...................................................................51
-----------
8.4.2. Financial Statements..........................................................51
--------------------
8.4.3. Pro Forma Balance Sheet and Projections.......................................52
---------------------------------------
8.5. No Material Changes, etc.................................................................52
------------------------
8.6. Laws, Licenses; Franchises, Patents, Copyrights, etc.....................................52
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8.6.1. Laws, Licenses................................................................52
--------------
8.6.2. Franchises, Patents, Copyrights, etc..........................................53
------------------------------------
8.7. Litigation...............................................................................53
----------
8.8. No Materially Adverse Contracts, etc.....................................................53
------------------------------------
8.9. Compliance with Other Instruments, etc...................................................53
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8.10. Tax Status..............................................................................53
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8.11. No Event of Default.....................................................................54
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8.12. Holding Company and Investment Company Acts.............................................54
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8.13. Absence of Financing Statements; Perfection of Security Interests.......................54
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8.14. Employee Benefit Plans..................................................................54
----------------------
8.14.1. In General...................................................................54
----------
8.14.2. Terminability of Welfare Plans...............................................54
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8.14.3. Guaranteed Pension Plans.....................................................54
------------------------
8.14.4. Multiemployer Plans..........................................................54
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8.14.5. Canadian Plans...............................................................55
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8.15. Use of Proceeds.........................................................................55
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8.15.1. General......................................................................55
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8.15.2. Regulations U and X..........................................................55
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8.15.3. Ineligible Securities........................................................55
---------------------
8.16. Disclosure..............................................................................55
----------
8.17. Environmental Compliance................................................................56
------------------------
8.18. Subsidiaries, etc.......................................................................57
-----------------
8.19. Leases..................................................................................57
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8.20. Solvency................................................................................57
--------
8.21. Certain Transactions....................................................................57
--------------------
8.22. Bank Accounts...........................................................................58
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8.23. Foreign Assets Control Regulations, Etc.................................................58
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8.24. Units...................................................................................58
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8.25. Franchise Agreements....................................................................58
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8.26. Status of Loans as Senior Debt..........................................................58
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8.27. No Other Senior Debt....................................................................58
--------------------
8.28. Labor Relations.........................................................................58
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9. AFFIRMATIVE COVENANTS...............................................................................60
---------------------
9.1. Punctual Payment.........................................................................60
----------------
9.2. Maintenance of Office....................................................................60
---------------------
9.3. Records and Accounts.....................................................................60
--------------------
9.4. Financial Statements, Certificates and Information.......................................60
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9.5. Notices..................................................................................61
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9.5.1. Defaults......................................................................61
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9.5.2. Environmental Events..........................................................62
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9.5.3. Notification of Claim against Collateral......................................62
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9.5.4. Notice of Litigation and Judgments............................................62
----------------------------------
9.5.5. Notice of Franchise Agreements................................................62
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9.5.6. Notices Concerning Tax Treatment..............................................62
--------------------------------
9.6. Corporate Existence; Maintenance of Properties...........................................62
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9.7. Insurance................................................................................63
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9.7.1. Required Insurance............................................................63
------------------
9.7.2. Insurance Proceeds............................................................63
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9.7.3. Notice of Cancellation........................................................64
----------------------
9.8. Taxes....................................................................................64
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9.9. Inspection of Properties and Books, etc..................................................64
---------------------------------------
9.9.1. General.......................................................................64
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9.9.2. Environmental Assessments.....................................................65
-------------------------
9.9.3. Communications with Accountants...............................................65
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9.10. Compliance with Laws, Contracts, Licenses, and Permits..................................65
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9.11. Use of Proceeds.........................................................................65
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9.12. Additional Mortgaged Property; Notice of Leases; Surveys and Title Insurance............65
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9.13. Further Assurances......................................................................66
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9.14. Conduct of Business; Units..............................................................66
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9.15. Bank Accounts...........................................................................66
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9.16. New Subsidiaries........................................................................67
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10. CERTAIN NEGATIVE COVENANTS.........................................................................67
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10.1. Restrictions on Indebtedness............................................................67
----------------------------
10.2. Restrictions on Liens and Negative Pledges..............................................68
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10.2.1. Restrictions on Liens........................................................68
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10.2.2. Restrictions on Negative Pledges and Upstream Limitations....................69
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10.3. Restrictions on Investments.............................................................70
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10.4. Distributions and other Restricted Payments.............................................71
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10.5. Mergers and Consolidations, Dispositions of Assets, Acquisitions........................71
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10.5.1. Mergers and Consolidations...................................................71
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10.5.2. Dispositions of Assets.......................................................71
----------------------
10.5.3. Acquisitions.................................................................72
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10.6. Sale and Leaseback......................................................................72
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10.7. Compliance with Environmental Laws......................................................72
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10.8. Employee Benefit Plans..................................................................73
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10.9. Change in Fiscal Year...................................................................73
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10.10. Transactions with Affiliates...........................................................73
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10.11. Bank Accounts..........................................................................73
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10.12. Franchises.............................................................................74
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10.13. Subordinated Debt......................................................................74
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10.14. Senior Debt............................................................................74
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11. FINANCIAL COVENANTS OF THE BORROWERS...............................................................74
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11.1. Leverage Ratio..........................................................................74
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11.2. Fixed Charge Coverage Ratio.............................................................74
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11.3. Consolidated Tangible Net Worth.........................................................75
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11.4. New Unit Capital Expenditures; New Leases...............................................75
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11.5. Minimum Consolidated Adjusted EBITDA....................................................75
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12. CLOSING CONDITIONS.................................................................................75
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12.1. Loan Documents, etc.....................................................................75
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12.2. Certified Copies of Charter Documents...................................................75
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12.3. Corporate Action........................................................................75
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12.4. Incumbency Certificate..................................................................76
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12.5. Validity of Liens.......................................................................76
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12.6. Perfection Certificates, UCC and PPSA Search Results....................................76
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12.7. Survey and Taxes........................................................................76
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12.8. Title Insurance.........................................................................76
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12.9. Landlord Consents.......................................................................76
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12.10. Hazardous Waste Assessments............................................................77
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12.11. Certificates of Insurance..............................................................77
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12.12. Solvency Certificate...................................................................77
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12.13. Opinion of Counsel.....................................................................77
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12.14. Payment of Fees and Expenses...........................................................77
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12.15. Consents and Approvals.................................................................78
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12.16. Disbursement Instructions..............................................................78
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12.17. No Material Adverse Change.............................................................78
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12.18. Financial Statements and Projections...................................................78
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12.19. No Litigation..........................................................................78
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12.20. Absence of Default under other Agreements..............................................78
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12.21. Other Documentation....................................................................79
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12.22. Closing Certificate....................................................................79
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12.23. Minimum Revolver Availability..........................................................79
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13. CONDITIONS TO ALL BORROWINGS.......................................................................79
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13.1. Representations True; No Event of Default...............................................79
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13.3. No Legal Impediment or Material Market Change...........................................79
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13.4. Governmental Regulation.................................................................80
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13.5. Proceedings and Documents...............................................................80
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14. EVENTS OF DEFAULT; ACCELERATION; ETC...............................................................80
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14.1. Events of Default and Acceleration......................................................80
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14.2. Termination of Commitments..............................................................82
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14.3. Remedies................................................................................82
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14.4. Distribution of Collateral Proceeds.....................................................83
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15. SETOFF.............................................................................................83
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16. THE AGENT..........................................................................................84
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16.1. Authorization...........................................................................84
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16.2. Employees and the Agent.................................................................85
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16.3. No Liability............................................................................85
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16.4. No Representations......................................................................85
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16.4.1. General......................................................................85
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16.4.2. Closing Documentation, etc...................................................86
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16.5. Payments................................................................................86
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16.5.1. Payments to Agent............................................................86
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16.5.2. Distribution by Agent........................................................86
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16.5.3. Delinquent Lenders...........................................................86
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16.6. Holders of Notes........................................................................87
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16.7. Indemnity...............................................................................87
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16.8. Agent as Lender.........................................................................87
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16.9. Resignation.............................................................................87
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16.10. Notification of Defaults and Events of Default; Other Notices..........................88
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16.11. Duties in the Case of Enforcement......................................................88
---------------------------------
16.12. Agent May File Proofs of Claim.........................................................88
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17. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION......................................................89
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17.1. Confidentiality.........................................................................89
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17.2. Prior Notification......................................................................89
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17.3. Other...................................................................................90
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18. EXPENSES AND INDEMNIFICATION.......................................................................90
----------------------------
18.1. Expenses................................................................................90
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18.2. Indemnification.........................................................................90
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18.3. Survival................................................................................91
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19. SURVIVAL OF COVENANTS, ETC.........................................................................91
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20. ASSIGNMENT AND PARTICIPATION.......................................................................92
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20.1. General Conditions......................................................................92
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20.2. Assignments.............................................................................92
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20.3. Register................................................................................93
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20.4. New Notes...............................................................................93
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20.5. Participations..........................................................................94
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20.6. Payments to Participants................................................................94
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20.7. Miscellaneous Assignment Provisions.....................................................94
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20.8. Assignee or Participant Affiliated with the Borrowers...................................95
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20.9. Syndication.............................................................................95
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20.10. Lender Merger Etc......................................................................95
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20.11. Special Purpose Funding Vehicle........................................................95
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21. NOTICES, ETC.......................................................................................96
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21.1. Notices Generally.......................................................................96
-----------------
21.2. Electronic Communications...............................................................97
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22. GOVERNING LAW......................................................................................97
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23. HEADINGS...........................................................................................98
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24. COUNTERPARTS.......................................................................................98
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25. ENTIRE AGREEMENT, ETC..............................................................................98
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26. WAIVER OF JURY TRIAL...............................................................................98
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27. CONSENTS, AMENDMENTS, WAIVERS, ETC.................................................................98
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28. SEVERABILITY.......................................................................................99
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29. RIGHT TO PUBLICIZE.................................................................................99
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30. USURY.............................................................................................100
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31. DOCUMENTATION AGENT...............................................................................100
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32. TRANSITIONAL ARRANGEMENTS.........................................................................100
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32.1. Former Credit Agreement Superseded.....................................................100
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32.2. Return and Cancellation of Prior Notes.................................................101
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32.3. Interest and Fees under Superseded Agreement...........................................101
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33. PARI PASSU TREATMENT..............................................................................101
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-viii-
SCHEDULES AND EXHIBITS
Schedule 1 Domestic Lenders; Domestic Revolving Credit Commitments; Domestic Revolving
---------- Credit Commitment Percentages; Term A Commitments; Term A Commitment Percentages
Schedule 2 Canadian Lenders; Canadian Commitments; Canadian Commitment Percentages
----------
Schedule 3 Existing Letters of Credit
----------
Schedule 4 Existing Mortgages
----------
Schedule 8.3 Title to Properties; Leases
------------
Schedule 8.5 Material Changes, Etc.
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Schedule 8.6.1 Liquor License Matters
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Schedule 8.6.2 Intellectual Property Matters
--------------
Schedule 8.7 Litigation
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Schedule 8.14.2 Terminability of Welfare Plans
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Schedule 8.17 Environmental Matters
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Schedule 8.18 Subsidiaries; Joint Ventures
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Schedule 8.22 Bank Accounts
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Schedule 8.24 Units
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Schedule 10.1 Existing Indebtedness
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Schedule 10.2 Existing Liens
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Schedule 10.3 Existing Investments
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Schedule 12.9 Landlord Consents
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Exhibit A-1 Form of Domestic Revolving Credit Note
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Exhibit A-2 Form of Canadian Note
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Exhibit B-1 Form of Domestic Revolving Credit Loan Request
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Exhibit B-2 Form of Canadian Loan Request
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Exhibit C Form of Term A Note
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Exhibit D Form of Compliance Certificate
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Exhibit E Form of Assignment and Acceptance
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Exhibit F Form of Monthly Financial Statements
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AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN AGREEMENT
This AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN AGREEMENT is
made as of October 29, 2003, by and among, (a) DAVE & BUSTER'S, INC., a Missouri
corporation ("DBI"), DAVE & BUSTER'S I, L.P., a Texas limited partnership, DAVE
& BUSTER'S OF ILLINOIS, INC., an Illinois corporation, DAVE & BUSTER'S OF
GEORGIA, INC., a Georgia corporation, DAVE & BUSTER'S OF PENNSYLVANIA, INC., a
Pennsylvania corporation, DANB TEXAS, INC., a Texas corporation, DAVE & BUSTER'S
OF MARYLAND, INC., a Maryland corporation, DAVE & BUSTER'S OF CALIFORNIA, INC.,
a California corporation, DAVE & BUSTER'S OF COLORADO, INC., a Colorado
corporation, DAVE & BUSTER'S OF NEW YORK, INC., a New York corporation, DAVE &
BUSTER'S OF FLORIDA, INC., a Florida corporation, DAVE & BUSTER'S OF PITTSBURGH,
INC., a Pennsylvania corporation, D&B REALTY HOLDING, INC., a Missouri
corporation, DAVE & BUSTER'S OF HAWAII, INC., a Hawaii corporation, D&B LEASING,
INC., a Texas corporation and each of the other Subsidiaries of DBI which shall
from time to time hereafter become a party to hereto pursuant to Section 9.16
hereof (collectively, the "Domestic Borrowers"), (b) 6131646 CANADA INC., a
Canadian orporation (the "Canadian Borrower"), (c) FLEET NATIONAL BANK
("Fleet"), a national banking association and the other lending institutions
listed on Schedules 1 and 2, (d) FLEET NATIONAL BANK as agent, administrative
agent and collateral agent for itself and such other lending institutions, and
(e) BANK ONE, NA as documentation agent (the "Documentation Agent") pursuant to
which the parties agree as follows.
WHEREAS, pursuant to that certain Revolving Credit and Term Loan
Agreement, dated as of June 30, 2000 (as heretofore amended, the "Former Credit
Agreement"), certain Lenders have made loans to the Borrowers for the purposes
described therein; and
WHEREAS, the Borrowers have requested that the Lenders and the Agent
amend and restate the Former Credit Agreement in its entirety to, among other
things:
(a) reduce the Total Commitment to $60,000,000;
(b) increase the Total Revolving Credit Commitment to $45,000,000;
(c) reduce the Total Term A Commitment to $15,000,000;
(d) eliminate the Term Loan B;
(e) add a Canadian Dollar revolving credit facility in the
aggregate amount of $4,500,000;
(f) convert the loans and the Existing Letters of Credit under the
Former Credit Agreement into Loans and Letters of Credit
hereunder; and
(g) make certain other changes to the terms and provisions of the
Former Credit Agreement.
NOW THEREFORE, the Borrowers, the Lenders and the Agent hereby agree
that, subject to Section 32 hereof, the Former Credit Agreement (including all
the schedules and exhibits thereto) is hereby amended and restated in its
entirety as set forth herein:
-2-
1. DEFINITIONS AND RULES OF INTERPRETATION.
1.1. DEFINITIONS. The following terms shall have the meanings set forth
in this Section 1 or elsewhere in the provisions of this Credit Agreement
referred to below:
Adjustment Date. The first day of the month immediately following the
month in which a Compliance Certificate is delivered by the Borrowers pursuant
to Section 9.4(d).
Administrative Questionnaire. An Administrative Questionnaire in a form
supplied by the Agent.
Affiliate. Any Person that would be considered to be an affiliate of
any other Person under Rule 144(a) of the Rules and Regulations of the
Securities and Exchange Commission, as in effect on the date hereof, if such
other Person were issuing securities.
Agency Account Agreement. See Section 9.15.
Agent. Fleet acting as agent, administrative agent and collateral agent
for the Lenders, or such successor Agent as may be appointed pursuant to Section
16.9 hereof.
Agent's Office. The Agent's office located at 100 Federal Street,
Boston, Massachusetts 02110, or at such other location as the Agent may
designate from time to time.
Agent's Special Counsel. Bingham McCutchen LLP or such other counsel as
may be approved by the Agent.
Applicable Canadian Pension Legislation. At any time, any pension or
retirement benefits legislation (be it federal, provincial, territorial, or
otherwise) then applicable to the Canadian Borrower, including the Pension
Benefits Act (Ontario), the Income Tax Act (Canada), and all regulations made
thereunder.
Applicable Margin. For each period commencing on an Adjustment Date
through the date immediately preceding the next Adjustment Date (each a "Rate
Adjustment Period"), the Applicable Margin with respect to Domestic Revolving
Credit Loans, Term Loan A and Canadian Loans (in each case, for Base Rate Loans,
Eurodollar Rate Loans, Canadian Prime Rate Loans and Canadian Cost of Funds
Loans, as applicable) and for the Letters of Credit and the Commitment Fees
shall be the applicable percentage set forth below with respect to each such
Loan, Letter of Credit or Commitment Fee, as the case may be, corresponding to
the Borrowers' Leverage Ratio, as determined for the most recent period of four
consecutive fiscal quarters of the Borrowers ending immediately prior to the
applicable Rate Adjustment Period:
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DOMESTIC REVOLVING CREDIT LETTERS
LOANS OF
AND TERM LOAN A CANADIAN LOANS CREDIT COMMITMENT FEE
- --------------------------------------------------------------------------------------------------------------------
LEVEL LEVERAGE BASE RATE EURODOLLAR CANADIAN CANADIAN
PRIME RATE COST OF
RATIO LOANS RATE LOANS LOANS FUNDS LOANS
- --------------------------------------------------------------------------------------------------------------------
I <1.00:1.00 1.00% 2.25% 1.00% 2.25% 2.25% 0.75%
- --------------------------------------------------------------------------------------------------------------------
II >/=1.00:1.00 1.50% 2.75% 1.50% 2.75% 2.75% 1.00%
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-3-
Notwithstanding the foregoing, (a) for the period from and including
the Closing Date until the delivery by the Borrowers to the Agent of the
Compliance Certificate pursuant to Section 9.4(d) for the period ending February
1, 2004, the Applicable Margin shall be that percentage corresponding to Level
II in the table above; and (b) if at any time the Borrowers fail to deliver any
Compliance Certificate as required pursuant to Section 9.4(d) hereof, then for
the period commencing on the date after the day on which such Compliance
Certificate was due through the date immediately following the date on which
such Compliance Certificate is delivered, the Applicable Margin shall be that
percentage corresponding to Level II in the table above.
Applicable Percentage. With respect to each Lender, the percentage
represented by (x) a numerator comprised of the aggregate outstanding principal
amount of the Notes and other Obligations held by each Lender, divided by (y) a
denominator comprised of the total Outstanding Obligations under the Credit
Agreement.
Approved Fund. Any Fund that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.
Arranger. Fleet Securities, Inc., in its capacity as exclusive
syndication agent and arranger for the credit facilities provided hereunder.
Assignment and Acceptance. An assignment and acceptance entered into by
a Lender and an Eligible Assignee (with the consent of any party whose consent
is required by Section 20.2), and accepted by the Agent, in substantially the
form of Exhibit E or any other form approved by the Agent.
Balance Sheet Date. February 2, 2003.
Base Rate. The higher of (a) the variable annual rate of interest so
designated from time to time by Fleet as its "prime rate", such rate being a
reference rate and not necessarily representing the lowest or best rate being
charged to any customer, and (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 Agent from three
funds brokers of recognized standing selected by the Agent. Changes in the Base
Rate resulting from any changes in Fleet's "prime rate" shall take place
immediately without notice or demand of any kind.
Base Rate Loans. Domestic Loans bearing interest calculated by
reference to the Base Rate.
Borrowers. The Domestic Borrowers, jointly and severally, with respect
to Domestic Loans and Letters of Credit, and the Canadian Borrower with respect
to Canadian Loans.
Business Day. Any day on which banking institutions in Boston,
Massachusetts, are open for the transaction of banking business and, in the case
of (a) Eurodollar Rate Loans, also a day which is a Eurodollar Business Day and
(b) Canadian Loans, also a day which is a Canadian Business Day.
Canadian Agency Account Agreements. An Agency Account Agreement
relating to an Account of the Canadian Borrower.
Canadian Borrower. As defined in the preamble hereto.
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Canadian Business Day. Any day, other than a Saturday, Sunday or any
day on which banking institutions in Toronto, Ontario are authorized by law to
close.
Canadian Commitment. With respect to each Canadian Lender, the amount
set forth on Schedule 2 hereto as the amount of such Canadian Lender's
commitment to make Canadian Loans to the Canadian Borrower as the same may be
reduced from time to time; or if such commitment is terminated pursuant to the
provisions hereof, zero.
Canadian Commitment Fee. See Section 2.2.2.
Canadian Commitment Percentage. With respect to each Canadian Lender,
the percentage initially set forth next to each such Canadian Lender on Schedule
2 hereto as such Canadian Lender's percentage of the aggregate Canadian
Commitments of all of the Canadian Lenders.
Canadian Concentration Accounts. The accounts with The Toronto-Dominion
Bank, Bank One, NA, Canada Branch or any other depository account that are (a)
in the name of the Canadian Borrower, (b) under the control of the Agent for the
benefit of the Canadian Lenders and the Agent, and (c) with a financial
institution reasonably acceptable to the Agent that has entered into a Canadian
Agency Account Agreement with the Agent and the Canadian Borrower.
Canadian Cost of Funds Rate. The fixed rate of interest determined by
Bank One, NA, Canada Branch at or about 10:00 a.m., Boston time, on the first
day of an Interest Period in respect of a Canadian Cost of Funds Loan as being
sufficient to compensate Bank One, NA, Canada Branch for its cost of funds for
funding a Canadian Cost of Funds Loan in an aggregate amount equal to the
Canadian Cost of Funds Loan and having a maturity comparable to the Interest
Period relating to said Canadian Cost of Funds Loan.
Canadian Cost of Funds Loans. A Canadian Loan funded in Canadian
Dollars, bearing interest calculated by reference to the Canadian Cost of Funds
Rate.
Canadian Dollar Equivalent. With respect to an amount of U.S. Dollars
on any date, the amount of Canadian Dollars that may be purchased with such
amount of U.S. Dollars at the Exchange Rate with respect to U.S. Dollars on such
date.
Canadian Dollars or C$. Dollars designated as lawful currency of
Canada.
Canadian Lenders. The lenders set forth on Schedule 2 and any other
Eligible Canadian Assignee who becomes an assignee of any rights and obligations
of a Canadian Lender pursuant to Section 20, acting in their role as makers of
Canadian Loans, none of which lenders shall be a non-resident of Canada for
purposes of the Income Tax Act (Canada), except as otherwise provided under the
definition of Eligible Canadian Assignee.
Canadian Lending Office. Initially, the office of each Canadian Lender
designated as such by notice to the Canadian Borrower and the Agent; thereafter,
such other office of such Canadian Lender, if any, that shall be making or
maintaining Canadian Loans, notice of which change shall have been given to the
Canadian Borrower and the Agent.
Canadian Loan Request. See Section 2.6.
Canadian Loans. Canadian Cost of Funds Loans and Canadian Prime Rate
Loans advanced pursuant to Section 2.
-5-
Canadian Mortgages. The mortgages and deeds of trust described on
Schedule 4 hereto, as amended as of the Closing Date, and each of the mortgages
and deeds of trust which may be delivered after the Closing Date in accordance
with Section 9.12, from the Canadian Borrower to the Agent with respect to the
interests of the Canadian Borrower in certain parcels of the Real Estate
consisting of fee properties and ground leases and in form and substance
satisfactory to the Agent.
Canadian Notes. See Section 2.4.2.
Canadian Obligations. All indebtedness, obligations and liabilities of
the Canadian Borrower to the Canadian Lenders or the Agent, individually or
collectively, existing on the date of this Credit 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
Credit Agreement or any of the other Loan Documents to which the Canadian
Borrower is party, or in respect of any of the Canadian Loans made, the Canadian
Notes or any other instrument at any time evidencing any thereof or arising or
incurred under any Rate Protection Agreements entered into by the Canadian
Borrower with any of the Lenders.
Canadian Plans. All the employee benefit, fringe benefit, supplemental
unemployment benefit, bonus, incentive, profit sharing, termination, change of
control, pension, retirement, stock option, stock purchase, stock appreciation,
health, welfare, medical, dental, disability, life insurance and similar plans,
programmes, arrangements or practices relating to the current or former
employees, officers or directors of the Canadian Borrower and its Subsidiaries
maintained, sponsored or funded by the Canadian Borrower or its Subsidiaries (as
the case may be), whether written or oral, funded or unfunded, insured or
self-insured, registered or unregistered.
Canadian Prime Rate. The higher of (a) the annual rate of interest
announced from time to time by Bank One, NA, Canada Branch at its head office as
its "prime rate" for C$ denominated commercial loans to borrowers in Canada (it
being understood that such rate is a reference rate and not necessarily the
lowest rate of interest charged by Bank One, NA, Canada Branch) or (b) the sum
of (i) the CDOR Rate and (ii) 1% per annum.
Canadian Prime Rate Loan. A Canadian Loan funded in Canadian Dollars
that accrues interest calculated by reference to the Canadian Prime Rate.
Canadian Security Agreement. The security agreement dated on or prior
to the Closing Date among the Canadian Borrower and the Agent (in its capacity
as collateral agent for the Canadian Lenders) securing the Canadian Obligations
and in form and substance satisfactory to the Canadian Lenders and the Agent.
Canadian Security Documents. The Canadian Security Agreement, the
Securities Pledge Agreement, the Canadian Mortgages, the Canadian Agency Account
Agreements, the Guaranty, the Debenture, the Debenture Pledge Agreement and all
other instruments and documents, including financing or other registration
statements and any equivalent under the laws of any foreign jurisdiction,
required to be executed and delivered pursuant to any Canadian Security Document
and any security document entered into as security for the Canadian Obligations
after the Closing Date in compliance with Section 9.16.
Capital Assets. Fixed assets, both tangible (such as land, buildings,
fixtures, machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises and good will); provided
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that Capital Assets shall not 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 the
Borrowers or any of their Subsidiaries in connection with (i) the purchase or
lease by the Borrowers or any of their Subsidiaries of Capital Assets that would
be required to be capitalized and shown on the balance sheet of such Person in
accordance with GAAP, (ii) New Unit Capital Expenditures, or (iii) the lease of
any assets by the Borrowers or any of their Subsidiaries as lessee under any
synthetic lease referred to in clause (vi) of the definition of the term
"Indebtedness" to the extent that such assets would have been Capital Assets had
the synthetic lease been treated for accounting purposes as a Capitalized Lease.
Capitalized Leases. Leases under which any Borrower or any of their
respective Subsidiaries is the lessee or obligor, the discounted future rental
payment obligations under which are required to be capitalized on the balance
sheet of the lessee or obligor in accordance with GAAP.
CDOR Rate. The annual rate of interest equal to the sum of (a) the
average 30 day rate applicable to Canadian bankers' acceptances appearing on the
"Reuters Screen CDOR Page" (as defined in the International Swaps and
Derivatives Association, Inc. 1991 ISDA definitions, as modified and amended
from time to time) as of 10:00 am. (Boston time) on such day, or if such day is
not a Canadian Business Day, then on the immediately preceding Canadian Business
Day plus (b) 0.1%; provided that if such rate does not appear on the Reuters'
Screen CDOR Page as contemplated, then the CDOR Rate on any day shall be
calculated as the sum of (a) the arithmetic mean of the 30 day rates applicable
to Canadian bankers' acceptances quoted by the Canadian banks which are listed
in Schedule I to the Bank Act (Canada) as of 10:00 a.m. (Boston time) on such
day, or if such day is not a Canadian Business Day, then on the immediately
preceding Canadian Business Day plus (b) 0.1%.
CERCLA. See Section 8.17(a).
Change of Control. At any time, the occurrence or existence of one or
more of the following events: (i) DBI shall cease to own directly or indirectly
at least 100% of the Voting Stock and economic interests of each Borrower (other
than DBI), (ii) any Person shall own more than 51% of the Voting Stock and
economic interests of DBI or (iii) the replacement of a majority of the board of
directors of any Borrower over a two-year period from the directors who
constituted the board of directors of such Borrower, as applicable, at the
beginning of such period, and such replacement shall not (1) have been approved
by a vote of at least a majority of the board of directors of such Borrower, as
applicable, then still in office who either were members of such board of
directors at the beginning of such period or whose election as a member of such
board of directors was previously so approved, or (2) in the case of each
Borrower other than DBI, have been elected or nominated for election by DBI.
Closing Date. The first date on which the conditions set forth in
Sections 12 and 13 have been satisfied and any Loans are to be converted or made
or any Letter of Credit is to be converted or issued hereunder.
Code. The Internal Revenue Code of 1986.
Collateral. All of the property, rights and interests of the Borrowers
and their Subsidiaries that are or are intended to be subject to the security
interests and mortgages created by the Security Documents.
Collateral Notes. See Section 7.3.
-7-
Commitment Fee. Individually and collectively, the Domestic Commitment
Fee and the Canadian Commitment Fee.
Compliance Certificate. See Section 9.4(d).
Consolidated or consolidated. With reference to any term defined
herein, shall mean that term as applied to the accounts of the Borrowers and all
of their Subsidiaries, consolidated in accordance with GAAP.
Consolidated Cash Flow. For any period, Consolidated EBITDA of the
Borrowers and their Subsidiaries for such period, (A) minus cash taxes paid
during such period by the Borrowers and their Subsidiaries on a consolidated
basis, (B) minus the greater of (i) the aggregate amount of Maintenance Capital
Expenditures made during such period by the Borrowers and their Subsidiaries and
(ii) an aggregate amount equal to the sum of an amount calculated for each Unit
in operation on the last day of such period equal to $350,000 multiplied by the
number of days in such period during which such Unit was in operation divided by
365, (C) plus Unit Operating Lease Expense for such period.
Consolidated EBITDA. For any period, the sum of (A) the Consolidated
Pre-Tax Income of the Borrowers and their Subsidiaries for such period, plus (B)
to the extent deducted in the calculation of Consolidated Pre-Tax Income of the
Borrowers and their Subsidiaries, (i) Consolidated Total Interest Expense for
such period, plus (ii) Consolidated Start-Up Costs and depreciation and
amortization expenses of the Borrowers and their Subsidiaries for such period,
plus (iii) other non-cash charges of the Borrowers and their Subsidiaries for
such period, plus (iv) extraordinary, non-recurring losses (including, without
limitation, losses from asset dispositions) minus (C) to the extent included in
the calculation of Consolidated Pre-Tax Income of the Borrowers and their
Subsidiaries, all extraordinary, non-recurring gains (including, without
limitation, gains from asset dispositions).
Consolidated Fixed Charges. For any period, the sum of (a) all
scheduled payments of principal on Indebtedness of the Borrowers and their
Subsidiaries, including Capitalized Leases and including synthetic leases
referred to in clause (vi) of the definition of the term "Indebtedness" during
such period, plus (b) Consolidated Total Interest Expense during such period,
plus (c) Unit Operating Lease Expense during such period. Demand obligations
shall be deemed to be due and payable during any period during which such
obligations are outstanding.
Consolidated Funded Indebtedness. At any time, the sum of (a) the
aggregate amount of Indebtedness of the Borrowers and their Subsidiaries, on a
consolidated basis, relating to the borrowing of money or the obtaining of
credit or in respect of Capitalized Leases, plus (b) without duplication, the
aggregate maximum drawing amount of all letters of credit issued for the account
of any Borrower or any of its Subsidiaries (including, without limitation, the
Maximum Drawing Amount), plus (c) without duplication, all Indebtedness of the
type described in clauses (a) and (b) above guaranteed by any Borrower or any of
its Subsidiaries. For clarity purposes, the parties confirm that Consolidated
Funded Indebtedness does not include Indebtedness of the type described in
clause (ix) of the definition of Indebtedness.
Consolidated Net Income (or Deficit). The consolidated net income (or
deficit) of the Borrowers and their Subsidiaries, after deduction of all
expenses, taxes, and other proper charges, determined in accordance with GAAP.
Consolidated Pre-Tax Income. For any period, Consolidated Net Income
for such period plus, to the extent deducted from the calculation of
Consolidated Net Income, income tax paid or payable for such period, determined
in accordance with GAAP.
-8-
Consolidated Start-Up Costs. Consolidated "start-up costs" of the
Borrowers and their Subsidiaries (such term used herein as defined in SOP 98-5
published by the American Institute of Certified Public Accountants) related to
the acquisition, opening and organizing of new Units, including as part of such
"start-up costs", without limitation, the cost of feasibility studies,
staff-training, and recruiting and travel costs for employees engaged in such
start-up activities, in each case net of landlord reimbursements for such costs.
Consolidated Tangible Net Worth. The excess of Consolidated Total
Assets over Consolidated Total Liabilities, and less the sum of:
(a) the total book value of all assets of the Borrowers and
their Subsidiaries properly classified as intangible assets under GAAP,
including such items as goodwill, the purchase price of acquired assets
in excess of the fair market value thereof, trademarks, trade names,
service marks, brand names, copyrights, patents and licenses, and
rights with respect to the foregoing; plus
(b) all amounts representing any write-up in the book value of
any assets of any Borrower or its Subsidiaries resulting from a
revaluation thereof subsequent to the Balance Sheet Date; plus
(c) to the extent otherwise includable in the computation of
Consolidated Tangible Net Worth, any subscriptions receivable.
Consolidated Total Assets. The sum of (i) all assets ("consolidated
balance sheet assets") of the Borrowers and their Subsidiaries determined on a
consolidated basis in accordance with GAAP, plus (ii) without duplication, all
assets leased by the Borrowers or any of their Subsidiaries as lessee under any
synthetic lease referred to in clause (vi) of the definition of the term
"Indebtedness" to the extent that such assets would have been consolidated
balance sheet assets had the synthetic lease been treated for accounting
purposes as a Capitalized Lease, plus (iii) without duplication, all sold
receivables referred to in clause (vii) of the definition of the term
"Indebtedness" to the extent that such receivables would have been consolidated
balance sheet assets had they not been sold.
Consolidated Total Interest Expense. For any period, the aggregate
amount of interest required to be paid or accrued by the Borrowers and their
Subsidiaries during such period on all Indebtedness of the Borrowers and their
Subsidiaries outstanding during all or any part of such period, whether such
interest was or is required to be reflected as an item of expense or
capitalized, including payments consisting of interest in respect of Capitalized
Leases, or any synthetic lease referred to in clause (vi) of the definition of
the term "Indebtedness," and including Commitment Fees, agency fees, facility
fees, balance deficiency fees and similar fees or expenses in connection with
any Indebtedness other than any up-front fees paid to the Lenders or the Agent
on the Closing Date in connection with the financing provided hereunder
(including the amortization thereof).
Consolidated Total Liabilities. All liabilities of the Borrowers and
their Subsidiaries determined on a consolidated basis in accordance with GAAP
and all other Indebtedness of the Borrowers and their Subsidiaries, whether or
not so classified.
Conversion Request. A notice given by the Borrowers to the Agent of the
Borrowers' election to convert or continue a Loan in accordance with Section 2.7
or Section 4.6, as applicable.
Convertible Subordinated Debt. Unsecured Indebtedness of DBI evidenced
by the Subordinated Indenture and the Subordinated Notes.
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Cost of Funds Rate Acceptance: See Section 2.6.2.
Credit Agreement. This Amended and Restated Revolving Credit and Term
Loan Agreement, including the Schedules and Exhibits hereto.
D&B License Agreements. License agreements to which one of the
Borrowers or its Subsidiaries is party pursuant to which such Borrower or
Subsidiary licenses to any other Person any know-how, intellectual property or
other assets related to the business of the Borrowers.
DBI. As defined in the preamble hereto.
Debenture. Demand debenture dated on or prior to the Closing Date given
by the Canadian Borrower in favor of the Agent and subsequent holders of the
Debenture and securing the Canadian Obligations and in form and substance
satisfactory to the Canadian Lenders and the Agent.
Debenture Pledge Agreement. Debenture pledge agreement dated on or
prior to the Closing Date between the Agent and the Canadian Borrower in respect
of the Debenture in form and substance satisfactory to the Canadian Lenders and
the Agent.
Default. See Section 14.1.
Delinquent Lender. See Section 16.5.3.
Distribution. The declaration or payment of any dividend or other
distribution on or in respect of any Equity Interests of a Person other than
dividends or distributions payable solely in Equity Interests of such Person of
the same class; the purchase, redemption, or other retirement of any Equity
Interests of a Person, directly or indirectly through a Subsidiary of such
Person or otherwise; the return of capital by a Person to the holders of its
Equity Interests as such; or any other distribution on or in respect of any
Equity Interests of a Person.
Domestic Agency Account Agreements. An Agency Account Agreement
relating to an account of a Domestic Borrower.
Domestic Borrowers. As defined in the preamble hereto.
Domestic Commitment Fee. See Section 2.2.1.
Domestic Concentration Accounts. The accounts with JPMorgan Chase Bank,
Bank One, Texas, N.A., SunTrust Bank, Wells Fargo Bank, N.A., Bank of Hawaii,
Commerce Bank, N.A. and Fleet or any other depository account that are (a) in
the name of one or more of the Domestic Borrowers, (b) under the control of the
Agent for the benefit of the Domestic Lenders and the Agent, and (c) with a
financial institution reasonably acceptable to the Agent that has entered into
an Agency Account Agreement with the Agent and the Domestic Borrowers.
Domestic Lenders. Fleet and the other lending institutions listed on
Schedule 1 hereto and any other Person who becomes an assignee of any rights and
obligations of a Domestic Lender pursuant to Section 20.
Domestic Lending Office. Initially, the office of each Domestic Lender
designated as such in Schedule 1 hereto; thereafter, such other office of such
Domestic Lender, if any, located within the United
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States of America that will be making or maintaining Base Rate Loans, notice of
which change shall have been given to the Domestic Borrowers and the Agent.
Domestic Loans. The Domestic Revolving Credit Loans and the Term Loan
A.
Domestic Mortgages. The mortgages and deeds of trust described on
Schedule 4 hereto, as amended as of the Closing Date, and each of the mortgages
and deeds of trust which may be delivered after the Closing Date in accordance
with Section 9.12, from one of the Domestic Borrowers to the Agent with respect
to the interests of the Domestic Borrowers in certain parcels of the Real Estate
consisting of fee properties and ground leases and in form and substance
satisfactory to the Agent.
Domestic Obligations. All Obligations other than Canadian Obligations.
Domestic Revolving Credit Commitment. With respect to each Domestic
Lender, the amount set forth on Schedule 1 hereto as the amount of such Domestic
Lender's commitment to make Domestic Revolving Credit Loans to the Domestic
Borrowers, as the same may be adjusted from time to time; or if such commitment
is terminated pursuant to the provisions hereof, zero.
Domestic Revolving Credit Commitment Percentage. With respect to each
Domestic Lender, the percentage set forth on Schedule 1 hereto as such Domestic
Lender's percentage of the aggregate Domestic Revolving Credit Commitments of
all of the Domestic Lenders.
Domestic Revolving Credit Loans. Revolving credit loans made or to be
made by the Domestic Lenders to the Domestic Borrowers pursuant to Section 2.
Domestic Revolving Credit Note(s). See Section 2.4.1.
Domestic Security Agreement. The Amended and Restated Domestic Security
Agreement, dated or to be dated on or prior to the Closing Date, among the
Domestic Borrowers and the Agent, and in form and substance satisfactory to the
Domestic Lenders and the Agent.
Domestic Security Documents. The Domestic Security Agreement, the
Domestic Mortgages, the Domestic Trademark Security Agreement, the Securities
Pledge Agreement, the Domestic Agency Account Agreements, and all other
instruments and documents, including, without limitation, Uniform Commercial
Code financing statements, required to be executed or delivered pursuant to any
Domestic Security Document and any other security documents entered into as
security for the Obligations after the Closing Date in compliance with Section
9.16.
Domestic Trademark Security Agreement. The Amended and Restated
Domestic Trademark Collateral Security and Pledge Agreement, dated or to be
dated on or prior to the Closing Date, among the Domestic Borrowers and the
Agent, and in form and substance satisfactory to the Lenders and the Agent.
Drawdown Date. The date on which any Loan is made or is to be made, and
the date on which any Revolving Credit Loan is converted or continued in
accordance with Section 2.7, or all or any portion of the Term Loan A is
converted or continued in accordance with Section 4.6, or the date that any
draft or other form of demand for payment is honored with respect to a Letter of
Credit.
Eligible Assignee. Any of (a) a commercial bank or finance company
organized under the laws of the United States of America, 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 of America, or any State thereof or the
District of Columbia, and having a net worth
-11-
of at least $100,000,000, 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
located in the country in which it is organized or another country which is also
a member of the OECD; (d) the central bank of any country which is a member of
the OECD; (e) any mutual fund, insurance company, or investment fund that is an
"accredited investor" (as defined in Regulation D of the Securities Act of 1933,
as amended); (f) an Affiliate of a Lender; (g) an Approved Fund; (h) if, but
only if, any Event of Default has occurred and is continuing, any other bank,
insurance company, commercial finance company or other financial institution or
other Person approved by the Agent, such approval not to be unreasonably
withheld; and (i) any Lender which is already a party to the Credit Agreement at
the time of such assignment.
Eligible Canadian Assignee. Any institutional lender which is (i) a
lender named in Schedule I, Schedule II or Schedule III to the Bank Act (Canada)
having total assets in excess of C$500,000,000, (ii) any other lender approved
by the Agent, DBI and the Canadian Borrower, which approval shall not be
unreasonably withheld or (iii) if, but only if, any Event of Default has
occurred and is continuing, any other bank, insurance company, commercial
finance company or other financial institution or other Person approved by the
Agent, such approval not to be unreasonably withheld.
Employee Benefit Plan. Any employee benefit plan within the meaning of
Section 3(3) of ERISA maintained or contributed to by any Borrower or any ERISA
Affiliate other than a Multiemployer Plan or a Canadian Plan (unless such
Canadian Plan is subject to ERISA).
Environmental Laws. See Section 8.17(a).
EPA. See Section 8.17(b).
Equity Interests. All equity interests of a Person, including, without
limitation any (a) common or preferred stock, (b) limited or general partnership
interests, (c) limited liability company membership interests, (d) options,
warrants, or other rights to purchase or acquire any Equity Interest, or (e)
securities convertible into any Equity Interest.
ERISA. The Employee Retirement Income Security Act of 1974.
ERISA Affiliate. Any Person which is treated as a single employer with
any of the Borrowers under Section 414 of the Code.
Eurocurrency Reserve Rate. For any day with respect to a Eurodollar
Rate Loan, the maximum rate (expressed as a decimal) at which any of the Lenders
subject thereto would be required to maintain reserves under Regulation D of the
Board of Governors of the Federal Reserve System (or any successor or similar
regulations relating to such reserve requirements) against "Eurocurrency
Liabilities" (as that term is used in Regulation D), if such liabilities were
outstanding. The Eurocurrency Reserve Rate shall be adjusted automatically on
and as of the effective date of any change in the Eurocurrency Reserve Rate.
Eurodollar Business Day. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London or such
other eurodollar interbank market as may be selected by the Agent in its sole
discretion acting in good faith.
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Eurodollar Lending Office. Initially, the office of each Lender
designated as such in Schedule 1 hereto; thereafter, such other office of such
Lender, if any, that shall be making or maintaining Eurodollar Rate Loans,
notice of which change shall have been given to the Domestic Borrowers and the
Agent.
Eurodollar Rate. For any Interest Period with respect to a Eurodollar
Rate Loan, the rate of interest equal to (a) the rate determined by the Agent at
which Dollar deposits for such Interest Period are offered based on information
presented on Moneyline Telerate Markets Page 3750 as of 10:00 a.m. (Boston time)
two Eurodollar Business Days prior to the beginning of such Interest Period,
divided by a number equal to 1.00 minus the Eurocurrency Reserve Rate, if
applicable, or (b) if such information on such Moneyline Telerate Markets Page
is not available, the rate at which the Agent's Eurodollar Lending Office is
offered Dollar deposits at 10:00 a.m. (Boston time) two Eurodollar Business Days
prior to the beginning of such Interest Period in the interbank eurodollar
market where the eurodollar and foreign currency and exchange operations of such
Eurodollar Lending Office are customarily 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 the Eurodollar Rate Loan of Fleet to which
such Interest Period applies, divided by a number equal to 1.00 minus the
Eurocurrency Reserve Rate, if applicable.
Eurodollar Rate Loans. Domestic Loans bearing interest calculated by
reference to the Eurodollar Rate.
Event of Default. See Section 14.1.
Exchange Rate. On any day, (a) with respect to Canadian Dollars in
relation to U.S. Dollars, the spot rate as quoted by the Bank of Canada as its
noon spot rate at which U.S. Dollars are offered on such day for Canadian
Dollars, and (b) with respect to U.S. Dollars in relation to Canadian Dollars,
the spot rate as quoted by the Bank of Canada as its noon spot rate at which
Canadian Dollars are offered on such day for U.S. Dollars.
Existing Letters of Credit. Those letters of credit issued by the Agent
for the account of the Domestic Borrowers or any of their Subsidiaries prior to
the Closing Date and listed on Schedule 3 hereto.
Existing Unit Permitted Sale-Leaseback. A Permitted Sale-Leaseback that
is not a New Unit Permitted Sale-Leaseback.
Fee Letter. The fee letter agreement dated as of September 8, 2003
among Fleet, the Arranger and the Borrowers.
Financial Affiliate. A Subsidiary of the bank holding company
controlling any Lender, which Subsidiary is engaging in any of the activities
permitted by Section 4(e) of the Bank Holding Company Act of 1956 (12 U.S.C.
Section 1843).
Fiscal Year. See Section 8.4.1.
Fixed Charge Coverage Ratio. As at the end of any fiscal quarter of the
Borrowers, the ratio of (a) Consolidated Cash Flow for the period of the four
(4) consecutive fiscal quarters then ending to (b) Consolidated Fixed Charges
for the period of the four (4) consecutive fiscal quarters then ending.
Fleet. As defined in the preamble hereto.
Former Credit Agreement. See preamble.
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Fronting Fee. See Section 5.6.
Fund. Any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
generally accepted accounting principles or GAAP. (a) When used in
Section 11, whether directly or indirectly through reference to a capitalized
term used therein, means (i) principles that are consistent with the principles
promulgated or adopted by the Financial Accounting Standards Board and its
predecessors, in effect for the fiscal year ended on the Balance Sheet Date, and
(ii) to the extent consistent with such principles, the accounting practice of
the Borrowers reflected in its financial statements for the year ended on the
Balance Sheet Date, and (b) when used in general, other than as provided above,
means principles that are (i) consistent with the principles promulgated or
adopted by the Financial Accounting Standards Board and its predecessors, as in
effect from time to time, and (ii) consistently applied with past financial
statements of the Borrowers adopting the same principles, provided that in each
case referred to in this definition of "generally accepted accounting
principles" a certified public accountant would, insofar as the use of such
accounting principles is pertinent, be in a position to deliver an unqualified
opinion (other than a qualification regarding changes in generally accepted
accounting principles) as to financial statements in which such principles have
been properly applied.
Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of Section 3(2) of ERISA maintained or contributed to by any Borrower or
any ERISA Affiliate the benefits of which are guaranteed on termination in full
or in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.
Guaranty. The Guaranty dated or to be dated on or prior to the Closing
Date made by the Domestic Borrowers in favor of the Canadian Lenders and the
Agent for the benefit of the Canadian Lenders pursuant to which each of the
Domestic Borrowers guaranties to the Canadian Lenders and the Agent for the
benefit of the Canadian Lenders the payment and performance of the Canadian
Obligations, in form and substance satisfactory to the Canadian Lenders and the
Agent.
Hazardous Substances. See Section 8.17(b).
Incurrence Ratio. During any fiscal quarter of the Borrowers, the
minimum permitted Fixed Charge Coverage Ratio as at the end of the most recently
ended fiscal quarter as set forth in Section 11.2, after increasing the
numerator of such ratio by 0.15.
Indebtedness. As to any Person and whether recourse is secured by or is
otherwise available against all or only a portion of the assets of such Person
and whether or not contingent, but without duplication:
(i) every obligation of such Person for money borrowed,
(ii) every obligation of such Person evidenced by bonds,
debentures, notes or other similar instruments, including obligations
incurred in connection with the acquisition of property, assets or
businesses,
(iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar
facilities issued for the account of such Person,
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(iv) every obligation of such Person issued or assumed as the
deferred purchase price of property or services (including securities
repurchase agreements but excluding trade accounts payable or accrued
liabilities arising in the ordinary course of business which are not
overdue or which are being contested in good faith),
(v) every obligation of such Person under any Capitalized
Lease,
(vi) every obligation of such Person under any lease (a
"synthetic lease") treated as an operating lease under GAAP and as a
loan or financing for U.S. income tax purposes,
(vii) all sales by such Person of (A) accounts or general
intangibles for money due or to become due, (B) chattel paper,
instruments or documents creating or evidencing a right to payment of
money or (C) other receivables (collectively "receivables"), whether
pursuant to a purchase facility or otherwise, other than in connection
with the disposition of the business operations of such Person relating
thereto or a disposition of defaulted receivables for collection and
not as a financing arrangement, and together with any obligation of
such Person to pay any discount, interest, fees, indemnities,
penalties, recourse, expenses or other amounts in connection therewith,
(viii) every obligation of such Person (an "equity related
purchase obligation") to purchase, redeem, retire or otherwise acquire
for value any shares of capital stock of any class issued by such
Person, any warrants, options or other rights to acquire any such
shares, or any rights measured by the value of such shares, warrants,
options or other rights,
(ix) every obligation of such Person under any forward
contract, futures contract, swap, option or other financing agreement
or arrangement (including, without limitation, caps, floors, collars
and similar agreements), the value of which is dependent upon interest
rates, currency exchange rates, commodities or other indices (a
"derivative contract"),
(x) every obligation in respect of Indebtedness of any other
Person (including any partnership in which such Person is a general
partner) to the extent that such Person is liable therefor as a result
of such Person's ownership interest in or other relationship with such
other Person, except to the extent that the terms of such Indebtedness
provide that such Person is not liable therefor and such terms are
enforceable under applicable law,
(xi) every obligation, contingent or otherwise, of such Person
guaranteeing, or having the economic effect of guarantying or otherwise
acting as surety for, any obligation of a type described in any of
clauses (i) through (x) (the "primary obligation") of another Person
(the "primary obligor"), in any manner, whether directly or indirectly,
and including, without limitation, any obligation of such Person (A) to
purchase or pay (or advance or supply funds for the purchase of) any
security for the payment of such primary obligation, (B) to purchase
property, securities or services for the purpose of assuring the
payment of such primary obligation, or (C) to maintain working capital,
equity capital or other financial statement condition or liquidity of
the primary obligor so as to enable the primary obligor to pay such
primary obligation.
The "amount" or "principal amount" of any Indebtedness at any time of
determination represented by (t) any Indebtedness, issued at a price that is
less than the principal amount at maturity thereof, shall be the amount of the
liability in respect thereof determined in accordance with GAAP, (u) any
Capitalized Lease shall be the principal component of the aggregate of the
rentals obligation under such Capitalized Lease payable over the term thereof
that is not subject to termination by the lessee, (v) any sale of
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receivables shall be the amount of unrecovered capital or principal investment
of the purchaser (other than any of the Borrowers or any of their wholly-owned
Subsidiaries) thereof, excluding amounts representative of yield or interest
earned on such investment, (w) any synthetic lease shall be the stipulated loss
value, termination value or other equivalent amount, (x) any derivative contract
shall be the maximum amount of any termination or loss payment that would be
required to be paid by such Person if such derivative contract were, at the time
of determination, to be terminated by reason of any event of default or early
termination event thereunder, whether or not such event of default or early
termination event has in fact occurred, (y) any equity-related purchase
obligation shall be the maximum fixed redemption or purchase price thereof
inclusive of any accrued and unpaid dividends to be comprised in such redemption
or purchase price and (z) any guaranty or other contingent liability referred to
in clause (xi) shall be an amount equal to the stated or determinable amount of
the primary obligation in respect of which such guaranty or other contingent
obligation is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is required to
perform thereunder) as determined by such Person in good faith.
Ineligible Securities. Securities which may not be underwritten or
dealt in by member banks of the Federal Reserve System under Section 16 of the
Banking Act of 1993 (12 U.S.C. Section 24, Seventh), as amended.
Interest Payment Date. (a) As to any Base Rate Loan or Canadian Prime
Rate Loan, the last day of each calendar quarter with respect to interest
accrued during such calendar quarter, including, without limitation, the
calendar quarter which includes the Drawdown Date of such Base Rate Loan or
Canadian Prime Rate Loan, as the case may be; (b) as to any Eurodollar Rate Loan
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, the date that is 3 months
from the first day of such Interest Period and, in addition, the last day of
such Interest Period, and (c) as to any Canadian Cost of Funds Loan, in respect
of which the Interest Period is (i) 90 days or less, the last day of such
Interest Period, and (ii) more than 90 days, the date that is 3 months from the
first day of such Interest Period and, in addition, the last day of such
Interest Period.
Interest Period. With respect to each Loan, (a) initially, the period
commencing on the Drawdown Date of such Loan and ending on the last day of one
of the periods set forth below, as selected by the applicable Borrowers in a
Revolving Credit Loan Request, Canadian Loan Request or in a notice given with
respect to the Term Loan A (i) for any Base Rate Loan, the last day of the
calendar month; (ii) for any Canadian Prime Rate Loan, the last day of the
calendar month; (iii) for any Canadian Cost of Funds Loan, 30, 60, 90, or 180
days as selected by the Canadian Borrower in a Canadian Loan Request or as
otherwise required by the terms of this Credit Agreement and (iv) for any
Eurodollar Rate Loan, 1, 2, 3 or 6 months; and (b) thereafter, each period
commencing on the last day of the next preceding Interest Period applicable to
such Revolving Credit Loan or all or such portion of the Term Loan A and ending
on the last day of one of the periods set forth above, as selected by the
Borrowers in a Conversion Request; provided that all of the foregoing provisions
relating to Interest Periods are subject to the following:
(a) if any Interest Period with respect to a Canadian Cost of
Funds Loan or a Eurodollar Rate Loan would otherwise end on a day that
is not a Canadian Business Day or Eurodollar Business Day as
applicable, that Interest Period shall be extended to the next
succeeding Canadian Business Day or Eurodollar Business Day, as
applicable, 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 Canadian
Business Day or Eurodollar Business Day, as applicable;
(b) if any Interest Period with respect to a Base Rate Loan or
a Canadian Prime Rate Loan would end on a day that is not a Business
Day or Canadian Business Day, as the case may
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be, that Interest Period shall end on the next succeeding Business Day
or Canadian Business Day, as the case may be;
(c) if the Borrowers shall fail to give notice as provided in
Section 2.7 or Section 4.6, as applicable, the Borrowers shall be
deemed to have requested a conversion of (i) the affected Eurodollar
Rate Loan to a Base Rate Loan and (ii) the affected Canadian Cost of
Funds Loan to a Canadian Prime Rate Loan and the continuance of (A) all
Base Rate Loans as Base Rate Loans and (B) all Canadian Prime Rate
Loans as Canadian Prime Rate Loans on the last day of the then current
Interest Period with respect thereto;
(d) any Interest Period relating to any Eurodollar Rate Loan
or Canadian Cost of Funds Loan that begins on the last Eurodollar
Business Day or Canadian Business Day, as the case may be, of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Eurodollar Business Day or Canadian
Business Day, as the case may be, of a calendar month; and
(e) any Interest Period that would otherwise extend beyond the
Revolving Credit Loan Maturity Date (if comprising a Revolving Credit
Loan) or the Term Loan A Maturity Date (if comprising Term Loan A or a
portion thereof) shall end on, respectively, the Revolving Credit Loan
Maturity Date or the Term Loan A Maturity Date.
International Standby Practices. With respect to any standby Letter of
Credit, International Standby Practices (ISP98), International Chamber of
Commerce Publication No. 590, or any successor code of standby letter of credit
practices among banks adopted by the Agent in the ordinary course of its
business as a standby letter of credit issuer and in effect at the time of
issuance of such Letter of Credit.
Investments. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect of any guaranties (or other commitments described under Indebtedness) or
obligations of any Person. In determining the aggregate amount of Investments
outstanding at any particular time: (a) the amount of any Investment represented
by a guaranty shall be taken at not less than the principal amount of the
obligations guaranteed and still outstanding; (b) there shall be included as an
Investment all interest accrued with respect to Indebtedness constituting an
Investment unless and until such interest is paid; (c) there shall be deducted
in respect of each such Investment any amount received as a return of capital
(but only by repurchase, redemption, retirement, repayment, liquidating dividend
or liquidating distribution); (d) there shall not be deducted in respect of any
Investment any amounts received as earnings on such Investment, whether as
dividends, interest or otherwise, except that accrued interest included as
provided in the foregoing clause (b) may be deducted when paid; and (e) there
shall not be deducted from the aggregate amount of Investments any decrease in
the value thereof.
Lender Affiliate. With respect to any Lender, (a) an Affiliate of such
Lender or (b) any Approved Fund.
Lenders. Collectively, the Canadian Lenders and the Domestic Lenders.
Letters of Credit. See Section 5.1.1.
Letter of Credit Application. See Section 5.1.1.
Letter of Credit Fee. See Section 5.6.
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Letter of Credit Participation. See Section 5.1.4.
Leverage Ratio. As at the end of any fiscal quarter of the Borrowers,
the ratio of (a) Consolidated Funded Indebtedness at such date to (b)
Consolidated EBITDA for the period of the four (4) consecutive fiscal quarters
then ending minus with respect to any Unit which was the subject of a Permitted
Sale-Leaseback during such period, the difference between (i) the amount of
rental expense which would have been incurred in respect of such Unit if such
Permitted Sale-Leaseback had occurred immediately prior to the beginning of such
four-quarter period (assuming the monthly rental rate for such Unit throughout
such four-quarter period equaled the monthly rental rate in effect at the end of
such period and (ii) the amount of rental expense actually incurred in respect
of such Unit during such four-quarter period and already deducted in calculating
Consolidated EBITDA for such period.
Loan Documents. This Credit Agreement, the Notes, the Letter of Credit
Applications, the Letters of Credit, the Fee Letter, and the Security Documents.
Loans. Collectively, the Domestic Loans made by the Domestic Lenders
and the Canadian Loans made by the Canadian Lenders.
Maintenance Capital Expenditures. Capital Expenditures that are not New
Unit Capital Expenditures.
Maximum Drawing Amount. The maximum aggregate amount that the
beneficiaries may at any time 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.
Mortgaged Property. Any Real Estate which is subject to a mortgage.
Multiemployer Plan. Any multiemployer plan within the meaning of
Section 3(37) of ERISA maintained or contributed to by any Borrower or any ERISA
Affiliate that is subject to Title IV of ERISA.
Net Cash Proceeds. In connection with any sale or other disposition of
assets or any issuance of equity or incurrence of Consolidated Funded
Indebtedness after the Closing Date, the cash proceeds received from such sale
or other disposition or such issuance or incurrence, net of all costs of sale,
underwriting or brokerage costs, and taxes paid or payable as a result thereof
by the Borrowers or any of their Subsidiaries.
New Unit Capital Expenditures. Capital Expenditures related to the
construction, acquisition or opening of new Units net of landlord
reimbursements.
New Unit Permitted Sale-Leaseback. A Permitted Sale-Leaseback involving
the sale or transfer of any Unit which commences operations after the Closing
Date (regardless of when the Real Estate on which such Unit is located was
acquired) or any fee or leasehold interest in Real Estate acquired after the
Closing Date.
Note(s). The Domestic Revolving Credit Notes, the Term A Notes, the
Collateral Notes and the Canadian Notes.
Obligations. All indebtedness, obligations and liabilities of any of
the Borrowers and their Subsidiaries to any of the Lenders, the Agent, and the
Arranger, individually or collectively, existing or arising on the date of this
Credit Agreement or arising thereafter, direct or indirect, joint or several,
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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 Credit Agreement or any of the other Loan
Documents or in respect of any of the Loans made or Reimbursement Obligations
incurred or any of the Notes, Letter of Credit Applications, Letters of Credit
or other instruments at any time evidencing any thereof or arising or incurred
under any Rate Protection Agreements entered into by any of the Borrowers or
their Subsidiaries with any of the Lenders or the Arranger.
Other Accounts. See Section 9.15.
Outstanding or outstanding. With respect to the Loans, the aggregate
unpaid principal thereof as of any date of determination.
PBGC. The Pension Benefit Guaranty Corporation created by Section 4002
of ERISA and any successor entity or entities having similar responsibilities.
Permitted Acquisition. See Section 10.5.3.
Permitted Liens. Liens, security interests and other encumbrances
permitted by Section 10.2.
Permitted Sale-Leaseback. See Section 10.6.
Person. Any individual, corporation, partnership, trust, unincorporated
association, limited or unlimited liability company, business, or other legal
entity, and any government or any governmental agency or political subdivision
thereof.
Per-Unit Start-Up Cost Cap. With respect to each Unit opening after the
Closing Date, an amount equal to $1,200,000.
PPSA. The Personal Property Security Act (Ontario).
Pro Forma Basis. In connection with any proposed or actual Permitted
Acquisition, (i) the calculation of compliance with the financial covenants
described in Section 10.5.3(b) hereof by the Borrowers and their Subsidiaries
(including the business, business division or Person to be acquired as though
such business, business division or Person were a Subsidiary of a Borrower) with
reference to the audited historical financial results, if available, or such
other management reports as approved by the Agent, of such acquired business,
business division or Person and the Borrowers and its Subsidiaries for the
applicable Test Period after giving effect on a pro forma basis to such
Permitted Acquisition as at the beginning of the applicable Test Period with the
adjustments described in (a), (b) and (c) below; and, (ii) following a Permitted
Acquisition, the calculation of compliance with the covenants set forth in
Section 11 for Test Periods ending on the last day of the fiscal quarter in
which such Permitted Acquisition occurred and each Test Period ending on the
last day of the three fiscal quarters immediately following such Permitted
Acquisition with reference to the audited historical financial results, if
available, or such other management reports as approved by the Agent of the
business, business division or Person so acquired and the Borrowers and their
Subsidiaries for the portion of the applicable Test Period prior to such
Permitted Acquisition with the adjustments described in (a), (b) and (c) below:
(a) all Indebtedness (whether under this Credit Agreement or
otherwise) and any other balance sheet adjustments incurred, made or
assumed or to be incurred, made or assumed in connection with the
Permitted Acquisition shall be deemed to have been incurred, made or
assumed on the first day of the relevant Test Period, and all
Indebtedness of the Person acquired or to be acquired in such Permitted
Acquisition or which is attributable to the business or business
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division acquired or to be acquired which was or will have been repaid
in connection with the consummation of the Permitted Acquisition shall
be deemed to have been repaid on the first day of the relevant Test
Period;
(b) all Indebtedness assumed to have been incurred pursuant to
the preceding clause (a) shall be deemed to have borne interest at (i)
the arithmetic mean of (A) the Eurodollar Rate for Eurodollar Rate
Loans having an Interest Period of one month in effect on the first day
of the Test Period and (B) the Eurodollar Rate for Eurodollar Rate
Loans having an Interest Period of one month in effect on the last day
of the relevant Test Period plus (ii) the Applicable Margin with
respect to Revolving Credit Loans which are Eurodollar Rate Loans then
in effect (after giving effect to the Permitted Acquisition on a pro
forma basis); and
(c) for purposes of calculating Consolidated EBITDA and
Consolidated Cash Flow for the relevant Test Period, other reasonable
cost savings, expenses and other income statement or operating
statement adjustments which are attributable to the change in ownership
and/or management resulting from such Permitted Acquisition as may be
approved by the Agent in writing (which approval shall not be
unreasonably withheld) shall be deemed to have been realized on the
first day of the relevant Test Period.
Rate Protection Agreement. Any interest rate swap, cap, collar, futures
contract, option agreement, exchange agreement, forward currency exchange
agreement, forward rate currency agreement or other similar agreement or
arrangement entered into, from time to time, by any of the Borrowers or their
Subsidiaries and any of the Lenders or any of their respective affiliates to
protect such Borrower or such Subsidiary against fluctuations in interest rates,
exchange rates or forward rates.
Rate Request: See Section 2.6.2.
RCRA. See Section 8.17(a).
Real Estate. All real property at any time owned or leased (as lessee
or sublessee) by any of the Borrowers or their Subsidiaries.
Real Estate Leases. Leases, including ground leases and space leases,
pursuant to which any Borrower or Subsidiary thereof leases Real Estate.
Record. The grid attached to a Note, or the continuation of such grid,
or any other similar record, including computer records, maintained by any
Lender with respect to any Loan referred to in such Note.
Register. See Section 20.3.
Reimbursement Obligation. The Domestic Borrowers' obligation to
reimburse the Agent and the Domestic Lenders on account of any drawing under any
Letter of Credit as provided in Section 5.2.
Related Parties. With respect to any specified Person, such Person's
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person and such Person's Affiliates.
Repurchase Event. As such term is defined in the Subordinated
Indenture.
Required Lenders. As of any date, any combination of Lenders the sum
(expressed in U.S. Dollars or U.S. Dollar Equivalents) of whose aggregate
Revolving Credit Commitments and outstanding principal amounts under the Term
Loan A constitute at least sixty-six and two-thirds percent (66 2/3%) of
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the sum of the Total Revolving Credit Commitment and the total outstanding
principal amounts under the Term Loan A, or, if the Total Revolving Credit
Commitment has been terminated or if the Revolving Credit Loan Maturity Date has
occurred, any combination of Lenders holding at least sixty-six and two-thirds
percent (66 2/3%) of the total outstanding principal amount of the Loans and
Letter of Credit Participations on such date.
Reset Date. See Section 6.12.1(a).
Restricted Payments. Collectively, Distributions, payments in respect
of any subordinated debt, payments of management, consulting or similar fees to
affiliates of any Borrower and derivatives or other transactions with any
financial institution, commodities or stock exchange or clearinghouse (a
"Derivatives Counterparty") obligating any Borrower or any Subsidiary to make
payments to such Derivatives Counterparty as a result of any change in market
value of any capital stock of such Borrower or such Subsidiary.
Revolving Credit Commitment. With respect to each Lender, the sum of
each Lender's Domestic Revolving Credit Commitments and its Canadian Commitment.
Revolving Credit Loan Maturity Date. April 29, 2008.
Revolving Credit Loan Request. See Section 2.6.
Revolving Credit Loans. The Domestic Revolving Credit Loans and the
Canadian Loans.
Revolving Credit Note Record. A Record with respect to a Revolving
Credit Note.
Revolving Credit Note(s). Individually or collectively, the Domestic
Revolving Credit Notes and the Canadian Notes.
Sale-Leaseback. See Section 10.6.
SARA. See Section 8.17(a).
Securities Pledge Agreement. The Amended and Restated Securities Pledge
Agreement, dated or to be dated on or prior to the Closing Date, among certain
of the Borrowers and the Agent, and in form and substance satisfactory to the
Lenders and the Agent.
Security Documents. The Domestic Security Documents and the Canadian
Security Documents.
Subordinated Debt Documents. Collectively, the Subordinated Purchase
Agreement, the Subordinated Indenture, the Subordinated Registration Rights
Agreement, the Subordinated Notes, the Warrants and the other documents and
agreements executed and delivered in connection therewith.
Subordinated Indenture. The Indenture dated as of August 7, 2003
between DBI and the Indenture Trustee (as defined therein) relating to the
Subordinated Notes.
Subordinated Notes. The 5% Convertible Subordinated Notes due 2008 in
the aggregate principal amount of $30,000,000 issued pursuant to the
Subordinated Indenture.
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Subordinated Purchase Agreement. The Securities Purchase Agreement,
dated as of August 7, 2003, among DBI and certain other parties thereto as
initial purchasers, relating to the issuance and sale by DBI of the Subordinated
Notes and the Warrants.
Subordinated Registration Rights Agreement. The Registration Rights
Agreement, dated as of August 7, 2003, among DBI, U.S. Bancorp Piper Jaffray
Inc., and certain other parties thereto as initial purchasers of the
Subordinated Notes and Warrants.
Subsidiary. Any corporation, partnership, association, trust, limited
or unlimited liability company 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.
Survey. In relation to each Mortgaged Property, a current instrument
survey of such Mortgaged Property that (a) is prepared in accordance with the
"Minimum Standard Detail Requirements for Land Title Surveys" established by
ALTA and ACSM in 1997 and meets the accuracy requirements of a Class A or Urban
survey, (b) contains a signed and sealed Surveyor Certificate in favor of the
Agent, the Borrowers and the Title Insurance Company and (c) is otherwise in
form and substance satisfactory to the Agent.
Surveyor Certificate. In relation to each Mortgaged Property for which
a Survey has been conducted, a certificate executed by the surveyor who prepared
such Survey dated as of a recent date and containing such information relating
to such Mortgaged Property as the Agent or the Title Insurance Company may
require, such certificate to be satisfactory to the Agent in form and substance.
Term A Commitment. With respect to each Domestic Lender, the amount set
forth on Schedule 1 hereto as the amount of such Lender's commitment to make a
portion of Term Loan A to the Domestic Borrowers.
Term A Commitment Percentage. With respect to each Domestic Lender, the
percentage set forth on Schedule 1 hereto as such Lender's percentage of the
aggregate Term A Commitments of all the Domestic Lenders.
Term A Note(s). See Section 4.2.
Term Loan A. The term loan to be made to the Domestic Borrowers by the
Domestic Lenders pursuant to Section 4.1.
Term Loan A Maturity Date. April 29, 2008.
Term Note Record. A Record with respect to a Term A Note.
Test Period. (a) In connection with the calculation of financial
covenant compliance on a Pro Forma Basis as required by Section 10.5.3(b) with
respect to any proposed Permitted Acquisition, the period of four fiscal
quarters most recently ended prior to such Permitted Acquisition for which
financial information is available, and (b) in connection with the calculation
of the covenants set forth in Section 11 hereof following any Permitted
Acquisition, the period of four consecutive fiscal quarters for which the
covenant is being tested.
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Title Insurance Company. Chicago Title Insurance Company, and, with
respect to the Mortgaged Property of the Canadian Borrower, First American Title
Insurance Company (doing business in Canada as First Canadian Title).
Title Policy. In relation to each Mortgaged Property, an ALTA 1992
standard form title insurance policy issued by the Title Insurance Company (with
such reinsurance or co-insurance as the Agent may require, any such reinsurance
to be with direct access endorsements) in such amount as may be determined by
the Agent insuring the priority of the Mortgage of such Mortgaged Property and
that one of the Borrowers or one of their Subsidiaries holds marketable fee
simple or, as the case may be, leasehold title to such Mortgaged Property,
subject only to the encumbrances permitted by such Mortgage and which shall not
contain exceptions for mechanics liens, persons in occupancy or matters which
would be shown by a survey (except as may be permitted by such Mortgage), shall
not insure over any matter except to the extent that any such affirmative
insurance is acceptable to the Agent in its sole discretion, and shall contain
such endorsements and affirmative insurance as the Agent in its discretion may
require, including but not limited to (i) comprehensive endorsement #1, (ii)
same-as survey endorsement, (iii) access endorsement, (iv) contiguity
endorsement, (v) doing business endorsement, (vi) variable rate mortgage
endorsement (vii) zoning endorsement, (viii) encroachment endorsement, (ix) ALTA
form 8.1 endorsement and (x) deletion of creditors' rights endorsement (in each
case to the extent available in the applicable jurisdiction).
Total Canadian Commitment. The sum of the Canadian Commitments of the
Canadian Lenders, as in effect from time to time. On the Closing Date, the Total
Canadian Commitment is $4,500,000.
Total Commitment. The sum of the Total Revolving Credit Commitment and
the Total Term A Commitment as in effect from time to time.
Total Domestic Revolving Commitment. The sum of the Domestic Revolving
Credit Commitments of the Domestic Lenders, as in effect from time to time. On
the Closing Date, the Total Domestic Revolving Commitment is $40,500,000.
Total Revolving Credit Commitment. The sum of the Total Domestic
Revolving Commitments and the Total Canadian Commitments, as in effect from time
to time.
Total Term A Commitment. The sum of the Term A Commitments of the
Domestic Lenders, as in effect from time to time. On the Closing Date, the Total
Term A Commitment is $15,000,000.
Type. As to any Domestic Loan, its nature as a Base Rate Loan or a
Eurodollar Rate Loan; and as to any Canadian Loan, its nature as a Canadian
Prime Rate Loan or a Canadian Cost of Funds Loan.
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 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.
Unit. A particular restaurant and/or entertainment center at a
particular location that is owned or operated by a Borrower or a Borrower's
Subsidiary or that is operated by a franchisee of a Borrower or a Borrower's
Subsidiary.
Unit Operating Lease Expense. For any period, operating lease expense
of the Borrowers and their Subsidiaries payable during such period for the lease
of Units or Real Estate on which Units are
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located, provided that any such operating lease expense shall not include any
amounts payable to the extent such amounts are determined by reference to
revenues, profits or performance of such Unit.
Unpaid Reimbursement Obligation. Any Reimbursement Obligation for which
the Domestic Borrowers do not reimburse the Agent and the Domestic Lenders on
the date specified in, and in accordance with, Section 5.2.
U.S. Dollars or $. Dollars in lawful currency of the United States of
America.
U.S. Dollar Equivalent. With respect to an amount of Canadian Dollars,
on any date, the amount of U.S. Dollars that may be purchased with such amount
of Canadian Dollars at the Exchange Rate with respect to Canadian Dollars on
such date.
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 the directors (or persons performing
similar functions) of the corporation, partnership, association, limited or
unlimited liability company, trust or other business entity involved, whether or
not the right so to vote exists by reason of the happening of a contingency.
Warrants. The warrants to purchase shares of common stock issued
pursuant to the Subordinated Purchase Agreement and all warrants issued in
exchange, transfer or replacement thereof in form and substance satisfactory to
the Agent.
1.2. RULES OF INTERPRETATION.
(a) A reference to any document or agreement shall include
such document or agreement as amended, modified or supplemented from
time to time in accordance with its terms and the terms of this Credit
Agreement.
(b) The singular includes the plural and the plural includes
the singular.
(c) A reference to any law includes any amendment or
modification to such law.
(d) A reference to any Person includes its permitted
successors and permitted assigns.
(e) Accounting terms not otherwise defined herein have the
meanings assigned to them by GAAP applied on a consistent basis by the
accounting entity to which they refer.
(f) The words "include", "includes" and "including" are not
limiting.
(g) All terms not specifically defined herein or by GAAP,
which terms are defined in the Uniform Commercial Code as in effect in
the Commonwealth of Massachusetts or the PPSA, as applicable, have the
meanings assigned to them therein, with the term "instrument" being
that defined under Article 9 of the Uniform Commercial Code.
(h) Reference to a particular "Section" refers to that
section of this Credit Agreement unless otherwise indicated.
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(i) The words "herein", "hereof", "hereunder" and words of
like import shall refer to this Credit Agreement as a whole and not to
any particular section or subdivision of this Credit Agreement.
(j) Unless otherwise expressly indicated, in the computation
of periods of time from a specified date to a later specified date, the
word "from" means "from and including," the words "to" and "until" each
mean "to but excluding," and the word "through" means "to and
including."
(k) This Credit Agreement and the other Loan Documents may use
several different limitations, tests or measurements to regulate the
same or similar matters. All such limitations, tests and measurements
are, however, cumulative and are to be performed in accordance with the
terms thereof.
(l) This Credit Agreement and the other Loan Documents are the
result of negotiation among, and have been reviewed by counsel to,
among others, the Agent and the Borrowers and are the product of
discussions and negotiations among all parties. Accordingly, this
Credit Agreement and the other Loan Documents are not intended to be
construed against the Agent or any of the Lenders merely on account of
the Agent's or any Lender's involvement in the preparation of such
documents.
(m) Unless otherwise expressly stated herein, all computations
of outstanding Loans, commitment availability, mandatory prepayments,
or other matters hereunder shall be made in U.S. Dollars or U.S. Dollar
Equivalents.
2. THE REVOLVING CREDIT FACILITIES.
2.1. COMMITMENT TO LEND.
2.1.1. DOMESTIC REVOLVING CREDIT LOANS. Subject to the terms
and conditions set forth in this Credit Agreement, each of the Domestic Lenders
severally agrees to lend to the Domestic Borrowers and the Domestic Borrowers
may borrow, repay, and reborrow on a joint and several basis from time to time
from the Closing Date up to and including the Revolving Credit Loan Maturity
Date, upon notice by the Domestic Borrowers to the Agent given in accordance
with Section 2.6, such sums as are requested by the Domestic Borrowers up to a
maximum aggregate amount Outstanding (after giving effect to all amounts
requested) at any one time equal to such Domestic Lender's Revolving Credit
Commitment, minus such Lender's Domestic Revolving Credit Commitment Percentage
of the sum of the Maximum Drawing Amount and all Unpaid Reimbursement
Obligations provided that the Outstanding amount of the Domestic Revolving
Credit Loans (after giving effect to all amounts requested), plus the Maximum
Drawing Amount, plus all Unpaid Reimbursement Obligations shall not at any time
exceed the Total Domestic Revolving Commitment, as such amount may be adjusted
pursuant to the provisions of Section 2.3 hereof. The Domestic Revolving Credit
Loans shall be made pro rata in accordance with each Domestic Lender's Domestic
Revolving Credit Commitment Percentage.
2.1.2. CANADIAN LOANS. Subject to the terms and conditions set
forth in this Credit Agreement and upon the request of the Canadian Borrower,
each of the Canadian Lenders severally agrees to lend to the Canadian Borrower
in Canadian Dollars, and the Canadian Borrower may borrow, repay, and reborrow
from time to time between the Closing Date and the Revolving Credit Loan
Maturity Date, upon notice by the Canadian Borrower to the Agent given in
accordance with Section 2.6.2, its Canadian Commitment Percentage of the
Canadian Loans as are requested by the Canadian Borrower; provided that the U.S.
Dollar Equivalent of the sum of the outstanding
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principal amount of the Canadian Loans shall not exceed the Total Canadian
Commitment as such amount may be reduced pursuant to Section 2.3 hereof.
2.1.3. GENERAL CONDITIONS. Each request for a Revolving Credit
Loan hereunder shall constitute a representation and warranty by the applicable
Borrowers that the conditions set forth in Section 12 and Section 13, in the
case of the initial Revolving Credit Loans to be made on the Closing Date, and
Section 13, in the case of all other Revolving Credit Loans have been satisfied
on the date of such request.
2.2. COMMITMENT FEE.
2.2.1. DOMESTIC COMMITMENT FEE. The Domestic Borrowers jointly
and severally agree to pay to the Agent for the accounts of the Domestic Lenders
in accordance with their respective Domestic Revolving Credit Commitment
Percentages a commitment fee (such fee, a "Domestic Commitment Fee") calculated
at the rate per annum equal to the Applicable Margin for the Commitment Fee on
the average daily amount during each calendar quarter or portion thereof from
the Closing Date to the Revolving Credit Loan Maturity Date by which the Total
Domestic Revolving Credit Commitment exceeds the sum of (a) the Outstanding
amount of Domestic Revolving Credit Loans plus (b) the Maximum Drawing Amount,
plus (c) all Unpaid Reimbursement Obligations during such calendar quarter.
2.2.2. CANADIAN COMMITMENT FEE. The Canadian Borrower agrees
to pay to the Canadian Lenders in accordance with their respective Canadian
Commitment Percentages a commitment fee (such fee, a "Canadian Commitment Fee")
calculated at the rate per annum equal to the Applicable Margin for the
Commitment Fee on the average daily amount during each calendar quarter or
portion thereof from the Closing Date to the Revolving Credit Loan Maturity Date
by which the Total Canadian Commitment exceeds the U.S. Dollar Equivalent of the
Outstanding amount of Canadian Loans.
2.2.3. PAYMENT TERMS. The Commitment Fees shall be payable
quarterly in arrears on the last day of each calendar quarter for the calendar
quarter then ending, commencing on the first such date after the Closing Date,
with a final payment on the Revolving Credit Loan Maturity Date or any earlier
date on which the Revolving Credit Commitments shall terminate.
2.3. ADJUSTMENTS OF TOTAL REVOLVING CREDIT COMMITMENT.
2.3.1. OPTIONAL REDUCTION OF TOTAL REVOLVING CREDIT
COMMITMENT. Subject to Section 6.9, the Borrowers shall have the right at any
time and from time to time upon three (3) Business Days prior written notice
(confirmed telephonically on the date of delivery of such written notice) or
telephonic notice (confirmed in writing on the date of such telephonic notice)
to the Agent to reduce by $1,000,000 or an integral multiple of $500,000 in
excess thereof, or, terminate entirely, the Total Domestic Revolving Credit
Commitment and/or the Total Canadian Commitment, whereupon, subject to Section
2.3.2 hereof, the Domestic Revolving Credit Commitments of the Domestic Lenders
and/or the Canadian Commitments of the Canadian Lenders, as applicable, shall be
reduced pro rata in accordance with their respective Domestic Revolving Credit
Commitment Percentages or Canadian Commitment Percentage, as the case may be, of
the amount specified in such notice or, as the case may be, terminated. At no
time may (i) the Total Domestic Revolving Credit Commitment be reduced to an
amount less than the sum of (A) the Maximum Drawing Amount of all Letters of
Credit, (B) all Domestic Revolving Credit Loans then outstanding, and (C) all
Unpaid Reimbursement Obligations, or (ii) the Total Canadian Commitment be
reduced to an amount less than the U.S. Dollar Equivalent of all Canadian Loans
then Outstanding. Promptly after receiving
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any notice of the Borrowers delivered pursuant to this Section 2.3.1, the Agent
will notify the relevant Lenders of the substance thereof. Upon the effective
date of any such reduction or termination, the applicable Borrowers shall pay to
the Agent for the respective accounts of the relevant Lenders, in accordance
with their applicable Revolving Credit Commitment Percentages, the full amount
of any Commitment Fee then accrued on the amount of the reduction. Subject to
Section 2.3.2 hereof, no reduction or termination of the Revolving Credit
Commitments may be reinstated.
2.3.2. INCREASE IN TOTAL DOMESTIC REVOLVING COMMITMENT UPON
REDUCTION OF CANADIAN COMMITMENT. Upon (i) an optional reduction of the Total
Canadian Commitment under Section 2.3.1 or (ii) a mandatory reduction of the
Total Canadian Commitment as a result of a prepayment of the Canadian Loans
under Section 3.4 or Section 4.4.2.2 or Section 4.4.2.3, the Canadian Lenders
shall automatically reallocate the portion of their Canadian Commitments so
reduced to their Domestic Lender affiliate's Domestic Revolving Credit
Commitments, which commitment shall be increased by the U.S. Dollar Equivalent
of the amount of such reduction. The Total Canadian Commitment shall be
permanently reduced by the amount of such reallocation, and the Total Domestic
Revolving Commitment shall be increased by the same amount but in no event shall
exceed $44,500,000. Each of the Lenders and the Borrowers further agrees that
the Agent may make such conforming changes to this Credit Agreement as the Agent
may determine are necessary to accomplish the reallocations authorized herein,
including, without limitation, revisions to Schedule 1 and 2 hereto, provided
that prior to giving effect to any such changes, the Agent shall have provided
written notice to the applicable Lenders and the Borrowers of such changes. If
requested by the Agent, or any affected Lender, the Borrowers hereby agree to
issue new Notes, and the applicable Lenders agree to cancel and return any old
Notes that are replaced by such new Notes, as applicable in connection with any
such reallocations.
2.4. THE REVOLVING CREDIT NOTES.
2.4.1. DOMESTIC REVOLVING CREDIT NOTES. The Domestic Revolving
Credit Loans shall be evidenced by separate joint and several promissory notes
of the Domestic Borrowers in substantially the form of Exhibit A-1 hereto (each
a "Domestic Revolving Credit Note"), dated as of the Closing Date (or such other
date on which a Domestic Lender may become a party hereto in accordance with
Section 20 hereof) and completed with appropriate insertions. One Domestic
Revolving Credit Note shall be payable to the order of each Domestic Lender in a
principal amount equal to such Domestic Lender's Domestic Revolving Credit
Commitment or, if less, the Outstanding amount of all Domestic Revolving Credit
Loans made by such Domestic Lender, plus interest accrued thereon, as set forth
below.
2.4.2. CANADIAN NOTES. The Canadian Loans shall be evidenced
by either (a) separate promissory notes of the Canadian Borrower in
substantially the form of Exhibit A-2 hereto (each, a "Canadian Note"), dated as
of the date such facility is activated and completed with appropriate
insertions, or (b) this Credit Agreement and by individual loan accounts
maintained by the Agent on its books for each of the Canadian Lenders, it being
the intention of the parties hereto that, unless a Canadian Note is requested by
a Canadian Lender, the Canadian Borrower's obligations with respect to Canadian
Loans are to be evidenced only as stated herein and not by separate promissory
notes. If a Canadian Lender requests a Canadian Note, one Canadian Note shall be
payable to the order of such Canadian Lender in an amount equal to its Canadian
Commitment, and shall represent the obligation of the Canadian Borrower to pay
such Canadian Lender such principal amount or, if less, the outstanding
principal amount of all Canadian Loans made by such Canadian Lender, plus
interest accrued thereon, as set forth herein.
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2.4.3. REVOLVING CREDIT NOTE RECORDS. Each of the Borrowers
irrevocably authorizes each Lender to make or cause to be made, at or about the
time of the Drawdown Date of any Domestic Revolving Credit Loan or Canadian
Loan, as the case may be, or at the time of receipt of any payment of principal
on any such Note, an appropriate notation on such Lender's Revolving Credit Note
Record reflecting the making of such Loan or (as the case may be) the receipt of
such payment. The Outstanding amount of the Revolving Credit Loans set forth on
such Lender's Revolving Credit Note Record shall be prima facie evidence of the
principal amount thereof owing and unpaid to such Lender, but the failure to
record, or any error in so recording, any such amount on such Lender's Revolving
Credit Note Record shall not limit or otherwise affect the obligations of the
Borrowers hereunder or under any such Notes to make payments of principal of or
interest on any Note when due.
2.5. INTEREST ON REVOLVING CREDIT LOANS. Except as otherwise provided
in Section 6.10,
(a) Each Domestic Revolving Credit Loan that is a Base Rate
Loan 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 and thereafter during each subsequent Interest Period
with respect thereto at an annual rate equal to the sum of (i) the Base
Rate plus (ii) the Applicable Margin with respect to Revolving Credit
Loans which are Base Rate Loans, as in effect from time to time while
such Base Rate Loan is Outstanding.
(b) Each Domestic Revolving Credit Loan that is a Eurodollar
Rate Loan 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 and thereafter during each subsequent Interest
Period at an annual rate equal to the sum of (i) the Eurodollar Rate
plus (ii) the Applicable Margin with respect to Revolving Credit Loans
which are Eurodollar Rate Loans, as in effect from time to time while
such Eurodollar Rate Loan is Outstanding.
(c) Each Canadian Loan that is a Canadian Prime Rate Loan
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 and thereafter during each subsequent Interest Period at an
annual rate equal to the sum of (i) the Canadian Prime Rate plus (ii)
the Applicable Margin with respect to Revolving Credit Loans which are
Canadian Prime Rate Loans, as in effect from time to time while such
Canadian Prime Rate Loan is Outstanding.
(d) Each Canadian Loan that is a Canadian Cost of Funds Loan
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 and thereafter during each subsequent Interest Period at an
annual rate equal to the sum of (i) the Canadian Cost of Funds Rate
plus (ii) the Applicable Margin with respect to Revolving Credit Loans
which are Canadian Cost of Funds Loans, as in effect from time to time
while such Canadian Cost of Funds Loan is Outstanding.
(e) The Domestic Borrowers jointly and severally promise to
pay interest on each Domestic Revolving Credit Loan in arrears on each
Interest Payment Date with respect thereto. The Canadian Borrower
promises to pay interest on each Canadian Loan in arrears on each
Interest Payment Date with respect thereto.
2.6. REQUESTS FOR REVOLVING CREDIT LOANS.
2.6.1. REQUESTS FOR DOMESTIC REVOLVING CREDIT LOANS. The
Domestic Borrowers shall give to the Agent telephonic and written notice (such
written notice to be in the form of
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Exhibit B-1 hereto) of each Domestic Revolving Credit Loan requested hereunder
(a "Domestic Revolving Credit Loan Request") (a) prior to 1:00 p.m. (Boston
time) on the proposed Drawdown Date of any Base Rate Loan and (b) prior to 1:00
p.m. (Boston time) on the third Eurodollar Business Day prior to the proposed
Drawdown Date of any Eurodollar Rate Loan. Each such written notice shall
specify (w) the principal amount of the Domestic Revolving Credit Loan
requested, (x) the proposed Drawdown Date of such Domestic Revolving Credit
Loan, (y) if a Eurodollar Rate Loan, the Interest Period for such Domestic
Revolving Credit Loan and (z) the Type of such Domestic Revolving Credit Loan.
Upon receipt of any such notices, the Agent shall promptly notify each of the
Domestic Lenders thereof. Each Revolving Credit Loan Request shall be
irrevocable and binding on the Domestic Borrowers and shall obligate the
Domestic Borrowers to accept the Domestic Revolving Credit Loan requested from
the Domestic Lenders on the proposed Drawdown Date. Each Revolving Credit Loan
Request shall be in a minimum aggregate amount of $250,000 or an integral
multiple thereof.
2.6.2. REQUESTS FOR CANADIAN LOANS. The Canadian Borrower
shall give to the Agent and each of the Canadian Lenders telephonic and written
notice (such written notice to be in the form of Exhibit B-2 hereto) of each
Canadian Loan requested hereunder (a "Canadian Loan Request") prior to 1:00 p.m.
(Boston time) on the third Canadian Business Day prior to the proposed Drawdown
Date of any Canadian Prime Rate Loan or Canadian Cost of Funds Loan. Each such
written notice shall specify (w) the principal amount of the Canadian Loan
requested and the aggregate Outstanding principal amount of the Canadian Loans
on such date, (x) the proposed Drawdown Date of such Canadian Loan, (y) if such
Canadian Loan is to be a Canadian Cost of Funds Loan, the Interest Period for
such Canadian Loan and (z) the Type of such Canadian Loan. Each Canadian Loan
Request shall be irrevocable and binding on the Canadian Borrower and shall
obligate the Canadian Borrower to accept the Canadian Loan requested from the
Canadian Lenders on the proposed Drawdown Date. Each Canadian Loan Request shall
be in a minimum aggregate amount of C$500,000 or an integral multiple of
C$100,000 thereof. Notwithstanding the notice and minimum amount requirements
set forth in this Section 2.6.2 but otherwise in accordance with the terms and
conditions of this Credit Agreement, the Canadian Borrower may request that the
Canadian Lenders make Canadian Prime Rate Loan advances and paydowns to the
Canadian Borrower's deposit account with Bank One, NA, Canada such that if the
balance in the account: (i) is a credit, the Canadian Lenders may apply the
amount of such credit or any part thereof, rounded to the nearest C$50,000 as a
repayment of borrowings outstanding under the Canadian Commitment, or (ii) is a
debit, the Canadian Lenders shall make available a borrowing in an amount
rounded to the nearest C$50,000 which is required to place the Canadian Borrower
in a minimum net credit position of C$0, provided that there are sufficient
funds available under the Canadian Commitment.
Notwithstanding the foregoing, in the event that the Canadian Borrower
wishes all or any portion of the Canadian Loan which is requested to bear
interest at the Cost of Funds Rate, the Canadian Borrower may request by
telephonic (to be immediately confirmed in writing), facsimile or other written
notice (a "Rate Request") that Bank One, NA, Canada Branch on any Canadian
Business Day give the Canadian Borrower a firm quotation of the Cost of Funds
Rate which would be applicable to a Cost of Funds Loan to be made on such day
for an Interest Period commencing on the date of such Rate Request. Each Rate
Request shall (i) specify the aggregate principal amount of the Cost of Funds
Loan to which such quotation would apply (which shall be in a minimum aggregate
amount of C$100,000 or an integral multiple thereof), (ii) specify the Interest
Period being requested for such Cost of Funds Loan, and (iii) shall be received
by the Canadian Lender not later than 11:00 a.m., Boston time, on such day. At
or before 12:00 noon, Boston time, the Canadian Lender shall notify the Canadian
Borrower by telephone, telex or telecopier of the Cost of Funds Rate which would
apply to such Cost of Funds Loan; provided, however, that the Canadian Lender
may, in its sole and absolute discretion, decline to give any such quotation.
Such rate
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quotation shall remain in effect for one hour on such day. If the Canadian
Borrower wishes to accept the rate quotation from the Canadian Lender and
thereby request such Cost of Funds Loan, the Canadian Borrower shall give the
Canadian Lender written notice of acceptance (a "Cost of Funds Rate
Acceptance"), no later than the expiration of such one hour period. Each Cost of
Funds Rate Acceptance may be given by telecopier and shall confirm the Canadian
Borrower's acceptance of such rate quotation and the aggregate principal amount
of the Cost of Funds Loan requested.
2.7. CONVERSION OPTIONS.
2.7.1. CONVERSION TO DIFFERENT TYPE OF DOMESTIC REVOLVING
CREDIT LOAN. The Domestic Borrowers may elect from time to time to convert any
Outstanding Domestic Revolving Credit Loan to a Domestic Revolving Credit Loan
of another Type, provided that (a) with respect to any such conversion of a Base
Rate Loan to a Eurodollar Rate Loan, the Domestic Borrowers shall give the Agent
at least three (3) Eurodollar Business Days prior written notice (confirmed
telephonically on the date of delivery of such written notice) or telephonic
notice (confirmed in writing on the date of such telephonic notice) of such
election; (b) with respect to any such conversion of a Eurodollar Rate Loan into
a Base Rate Loan, such conversion shall only be made on the last day of the
Interest Period with respect thereto and (c) no Loan may be converted into a
Eurodollar Rate Loan when any Default or Event of Default has occurred and is
continuing. On the date on which such conversion is being made each Domestic
Lender shall take such action as is necessary to transfer its Domestic Revolving
Credit Commitment Percentage of such Revolving Credit Loans to its Domestic
Lending Office or its Eurodollar Lending Office, as the case may be. All or any
part of Outstanding Domestic Revolving Credit Loans of any Type may be converted
into a Domestic Revolving Credit Loan of another Type as provided herein,
provided that any conversion to a Eurodollar Rate Loan shall be in an aggregate
principal amount of $500,000 or a whole multiple of $250,000 in excess thereof
and the amount of any Eurodollar Rate Loan shall be at least $250,000 or an
integral multiple thereof. Each Conversion Request relating to the conversion of
a Domestic Revolving Credit Loan to a Eurodollar Rate Loan shall be irrevocable
by the Domestic Borrowers.
2.7.2. CONVERSION TO DIFFERENT TYPE OF CANADIAN LOAN. The
Canadian Borrower may elect from time to time to convert any outstanding
Canadian Loan to a Canadian Loan of another Type by providing a Conversion
Request to the Agent and each of the Canadian Lenders provided that (i) with
respect to any such conversion of a Canadian Prime Rate Loan to a Canadian Cost
of Funds Loan, the Canadian Borrower shall give the Agent and each of the
Canadian Lenders at least three (3) Canadian Business Days prior written notice
of such election; (ii) with respect to any such conversion of a Canadian Cost of
Funds Loan into a Canadian Prime Rate Loan, such conversion shall only be made
on the last day of the Interest Period with respect thereto unless any payment
required by Section 6.9 is made on or prior to the day of such conversion; and
(iii) unless each Canadian Lender otherwise agrees, no Canadian Prime Rate Loan
may be converted into a Canadian Cost of Funds Loan when any Default or Event of
Default has occurred and is continuing. All or any part of outstanding Canadian
Loans of any Type may be converted into a Canadian Loan of another Type as
provided herein, provided that any partial conversion shall be a whole multiple
of C$100,000 and shall not be inconsistent with the requirements of Section 6.4
with respect to the maximum permissible number of Interest Periods of Canadian
Cost of Funds Loans. Each Conversion Request shall be irrevocable by the
Canadian Borrower.
2.7.3. CONTINUATION OF TYPE OF REVOLVING CREDIT LOAN. 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 Domestic Borrowers or the Canadian Borrower, as applicable,
with the notice provisions contained in Section 2.7.1 or Section 2.7.2, as
applicable; provided that no Eurodollar Rate Loan or Canadian Cost of Funds Loan
may be continued as such when any Default or
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Event of Default has occurred and is continuing, but shall be automatically
converted to a Base Rate Loan or Canadian Prime Rate Loan, as applicable, on the
last day of the first Interest Period relating thereto ending during the
continuance of any Default or Event of Default of which officers of the Agent
or, in the case of Canadian Loans, the Canadian Lenders, active upon the
Borrowers' account have actual knowledge. In the event that the Domestic
Borrowers or Canadian Borrower, as applicable, fail to provide any such notice
with respect to the continuation of any Eurodollar Rate Loan or Canadian Cost of
Funds Loan as such, then such Eurodollar Rate Loan or Canadian Cost of Funds
Loan shall be automatically converted to a Base Rate Loan or Canadian Prime Rate
Loan, as applicable, on the last day of the Interest Period relating thereto.
The Agent shall notify the Domestic Lenders, promptly when any such automatic
conversion contemplated by this Section 2.7.3 with respect to Domestic Revolving
Credit Loans is scheduled to occur.
2.7.4. EURODOLLAR RATE LOANS AND CANADIAN COST OF FUNDS LOANS.
Any conversion to or from Revolving Credit Loans that are Eurodollar Rate Loans
or Canadian Cost of Funds Loans shall be in such amounts and be made pursuant to
such elections so that, after giving effect thereto, the aggregate principal
amount of (a) all Domestic Revolving Credit Loans that are Eurodollar Rate Loans
having the same Interest Period shall not be less than $500,000 and shall equal
$500,000 or a whole multiple of $250,000 in excess thereof, and (b) all Canadian
Loans that are Canadian Cost of Funds Loans having the same Interest Period
shall not be less than C$500,000 and shall equal C$500,000 or a whole multiple
of C$100,000 in excess thereof. At no time shall there be more than six (6)
Domestic Revolving Credit Loans that are Eurodollar Rate Loans having different
Interest Periods or three (3) Canadian Loans that are Canadian Cost of Funds
Loans having different Interest Periods.
2.8. FUNDS FOR REVOLVING CREDIT LOANS.
2.8.1. FUNDING PROCEDURES. Not later than 3:00 p.m. (Boston
time) on the proposed Drawdown Date of any Domestic Revolving Credit Loans,
subject to the terms and conditions hereof, each of the Domestic Lenders will
make available to the Agent, at the Agent's Office, in immediately available
funds, the amount of such Domestic Lender's Domestic Revolving Credit Commitment
Percentage of the amount of the requested Domestic Revolving Credit Loans. Upon
receipt from each Domestic Lender of such amount, and upon receipt of the
documents required by Sections 12 and 13 and the satisfaction of the other
conditions set forth therein, to the extent applicable, (a) the Agent will make
available to the Domestic Borrowers the aggregate amount of such Domestic
Revolving Credit Loans made available to the Agent by the Domestic Lenders. Not
later than 3:00 p.m. (Boston time) on the proposed Drawdown Date of any Canadian
Loans and upon receipt of the documents required by Sections 12 and 13 and the
satisfaction of the other conditions set forth therein, to the extent
applicable, each of the Canadian Lenders will make available to the Canadian
Borrower, in immediately available funds, the amount of such Canadian Lender's
Canadian Commitment Percentage of the amount of the requested Canadian Loans.
The failure or refusal of any Lender to make available to the Agent or the
Canadian Borrower, as the case may be, at the aforesaid time and place on any
Drawdown Date the amount of its Domestic Revolving Credit Commitment Percentage
of the requested Domestic Revolving Credit Loans or the amount of its Canadian
Commitment Percentage of the requested Canadian Loans shall not relieve any
other Lender from its several obligation hereunder to make available to the
Agent or the Canadian Borrower, as the case may be, the amount of such other
Lender's Domestic Revolving Credit Commitment Percentage or Canadian Commitment
Percentage of any requested Revolving Credit Loans.
2.8.2. ADVANCES BY AGENT OF DOMESTIC REVOLVING CREDIT LOANS.
The Agent may unless notified to the contrary by any Domestic Lender prior to a
Drawdown Date, assume that such Domestic Lender has made available to the Agent
on such Drawdown Date the amount of such Lender's Domestic Revolving Credit
Commitment Percentage of the Domestic Revolving Credit Loans to be made on such
Drawdown Date, and the Agent may (but it shall not be required to), in reliance
upon such
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assumption, make available to the Domestic Borrowers a corresponding amount. If
any Domestic Lender makes available to the Agent such amount on a date after
such Drawdown Date, such Domestic Lender shall pay to the Agent on demand 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 Agent
for federal funds acquired by the Agent, during each day included in such
period, times (b) the amount of such Domestic Lender's Domestic Revolving Credit
Commitment Percentage of such Domestic Revolving Credit Loans, times (c) 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 Lender's
Domestic Revolving Credit Commitment Percentage of such Domestic Revolving
Credit Loans shall become immediately available to the Agent and the denominator
of which is 360. A statement of the Agent submitted to such Domestic Lender with
respect to any amounts owing under this paragraph shall be prima facie evidence
of the amount due and owing to the Agent by such Domestic Lender. If the amount
of such Domestic Lender's Domestic Revolving Credit Commitment Percentage of
such Domestic Revolving Credit Loans is not made available to the Agent by such
Lender within three (3) Business Days following such Drawdown Date, the Agent
shall be entitled to recover such amount from the Borrowers on demand, with
interest thereon at the rate per annum applicable to the Revolving Credit Loans
made on such Drawdown Date.
2.9. REQUESTS FOR LOANS, CONVERSIONS, ETC. Any provisions in Section 2
or Section 4 which requires the Domestic Borrowers to deliver any notices or
requests for Domestic Revolving Credit Loans or to convert Domestic Loans from
one Type of Loan to another is satisfied by any Domestic Borrower signing the
request or notice, and each Domestic Borrower agrees to be bound by such request
or notice.
3. REPAYMENT OF THE REVOLVING CREDIT LOANS.
3.1. MATURITY. The Domestic Borrowers jointly and severally promise to
pay on the Revolving Credit Loan Maturity Date, or at such earlier time as the
Domestic Revolving Credit Loans become due and payable as set forth herein, and
there shall become absolutely due and payable on the Revolving Credit Loan
Maturity Date, or at such earlier time as the Domestic Revolving Credit Loans
become due and payable as set forth herein, all of the Domestic Revolving Credit
Loans Outstanding on such date, together with any and all accrued and unpaid
interest thereon. The Canadian Borrower promises to pay on the Revolving Credit
Loan Maturity Date, or at such earlier time as the Canadian Loans become due and
payable as set forth herein, and there shall become absolutely due and payable
on the Revolving Credit Loan Maturity Date, or at such earlier time as the
Canadian Loans become due and payable as set forth herein, all of the Canadian
Loans Outstanding on such date, together with any and all accrued and unpaid
interest thereon.
3.2. MANDATORY REPAYMENTS OF REVOLVING CREDIT LOANS. If at any time (i)
the sum of the Outstanding amount of the Domestic Revolving Credit Loans, plus
the Maximum Drawing Amount of Letters of Credit, plus all Unpaid Reimbursement
Obligations exceeds the Total Domestic Revolving Credit Commitment whether by
reduction of the Total Domestic Revolving Commitment or otherwise, or (ii) the
U.S. Dollar Equivalent of the Outstanding amount of the Canadian Loans, exceeds
the Total Canadian Commitment, whether by reduction of the Total Canadian
Commitment, due to currency fluctuations or otherwise, then in the case of
clause (i) above, the Domestic Borrowers shall immediately pay the amount of
such excess to the Agent for the respective accounts of the Domestic Lenders for
application to the Domestic Revolving Credit Loans, and in the case of clause
(ii) above, the Canadian Borrower shall immediately pay the amount of such
excess to the Canadian Lenders (within two (2) Business Days of notice thereof
if due to currency fluctuations) for the respective accounts of the Canadian
Lenders for application to the Canadian Loans in proportion, as nearly as
practicable, to the respective unpaid principal amount thereof, with adjustments
to the extent practicable to equalize any
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prior payments or repayments not exactly in proportion. Each prepayment of
Domestic Revolving Credit Loans shall be allocated among the Domestic Lenders,
in proportion, as nearly as practicable, to the respective unpaid principal
amount of each Domestic Lender's Domestic Revolving Credit Note, with
adjustments to the extent practicable to equalize any prior payments or
repayments not exactly in proportion. Each prepayment pursuant to this Section
3.2 shall be made in accordance with the provisions of Section 6.9. In addition
to the mandatory prepayment required by the preceding sentences, the Borrowers
shall also prepay the Revolving Credit Loans as required pursuant to Section
4.4.2. If no Revolving Credit Loans shall be outstanding, such amounts shall be
held by the Agent for the benefit of the applicable Lenders as collateral
security for such excess Maximum Drawing Amount; provided however, that if the
amount of cash collateral held by the Agent pursuant to this Section 3.2 exceeds
the Maximum Drawing Amount required to be collateralized from time to time, the
Agent shall return such excess to the applicable Borrowers.
3.3. MANDATORY CLEAN DOWN. For a period of at least 15 consecutive days
during each rolling period of 180 days following the Closing Date, the aggregate
amount of the Revolving Credit Loans outstanding plus the Maximum Drawing
Amount, plus all Unpaid Reimbursement Obligations shall not exceed $25,000,000.
At the beginning of each such fifteen (15) day period, the Borrowers shall pay
down outstanding Revolving Credit Loans to such level.
3.4. OPTIONAL REPAYMENTS OF REVOLVING CREDIT LOANS. The applicable
Borrowers shall have the right, at their 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 Eurodollar Rate Loans or Canadian Cost of Funds Loans
pursuant to this Section 3.4 that is not made on the last day of the Interest
Period relating thereto shall be accompanied by any amounts due under Section
6.9 hereunder. The Borrowers shall give the Agent and each Canadian Lender (if
applicable), no later than 1:00 p.m., Boston time, on the date of any proposed
prepayment prior written notice (confirmed telephonically on the date of
delivery of such written notice, but in any case such confirmation to occur no
later than 1:00 p.m., Boston time, on the date of any such proposed prepayment)
or telephonic notice (confirmed in writing on the date of such telephonic
notice) of any proposed prepayment pursuant to this Section 3.4 of Base Rate
Loans or Canadian Prime Rate Loans and no later than 1:00 p.m., Boston time,
three (3) Eurodollar Business Days or three (3) Canadian Business Days, as
applicable, prior to the date of any proposed repayment, prior written notice
(confirmed telephonically on the date of delivery of such written notice) or
telephonic notice (confirmed in writing on the date of such telephonic notice)
of any proposed prepayment pursuant to this Section 3.4 of Eurodollar Rate Loans
or Canadian Cost of Funds 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 a minimum
amount of $500,000 or an integral multiple of $100,000 in excess thereof (or the
Canadian Dollar Equivalent thereof), shall be accompanied by the payment of
accrued interest on the principal prepaid to the date of prepayment and shall be
applied, in the absence of instruction by the Borrowers, first to the principal
of Base Rate Loans or Canadian Prime Rate Loans (as applicable) and then to the
principal of Eurodollar Rate Loans or Canadian Cost of Funds Loans (as
applicable). Each partial prepayment received from Domestic Borrowers shall be
allocated among the Domestic Lenders, in proportion, as nearly as practicable,
to the respective unpaid principal amount of each Domestic Lender's Revolving
Credit Note, with adjustments to the extent practicable to equalize any prior
repayments not exactly in proportion. Each partial prepayment by the Canadian
Borrower shall be paid by the Canadian Borrower directly to each Canadian Lender
in proportion, as nearly as practicable, to the respective Canadian Commitment
of each Canadian Lender, with adjustments to the extent practicable to equalize
any prior repayments not exactly in proportion. The Total Canadian Commitment
shall be permanently reduced by each optional repayment of the Canadian Loans
hereunder until the total U.S. Dollar Equivalent of the Canadian Commitment is
$500,000, and the Total Domestic Revolving Commitment shall be increased by the
same amount in accordance with Section 2.3.2 hereof.
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4. THE TERM LOAN A.
4.1. COMMITMENT TO LEND. Subject to the terms and conditions set forth
in this Credit Agreement, each Domestic Lender agrees to lend to the Domestic
Borrowers, on the Closing Date, the amount of its Term A Commitment Percentage
of the principal amount of $15,000,000.
4.2. THE TERM A NOTE. Term Loan A shall be evidenced by separate joint
and several promissory notes of the Domestic Borrowers in substantially the form
of Exhibit C hereto (each a "Term A Note" and collectively the "Term A Notes"),
dated the Closing Date (or such other date on which a Domestic Lender may become
a party hereto in accordance with Section 20 and completed with appropriate
insertions. One Term A Note shall be payable to the order of each Domestic
Lender in a principal amount equal to such Domestic Lender's Term A Commitment
Percentage of Term Loan A and representing the obligation of the Domestic
Borrowers to pay to such Domestic Lender such principal amount or, if less, such
Lender's Term A Commitment Percentage of the outstanding amount of Term Loan A,
plus interest accrued thereon, as set forth below. Each of the Domestic
Borrowers irrevocably authorizes each Domestic Lender to make or cause to be
made a notation on such Domestic Lender's Term Note Record reflecting the
original principal amount of such Domestic Lender's Term A Commitment Percentage
of Term Loan A and, at or about the time of such Domestic Lender's receipt of
any principal payment on such Domestic Lender's Term A Note, an appropriate
notation on such Domestic Lender's Term Note Record reflecting such payment. The
aggregate unpaid amount set forth on such Domestic Lender's Term Note Record
shall be prima facie evidence of the principal amount thereof owing and unpaid
to such Domestic Lender, but the failure to record, or any error in so
recording, any such amount on such Domestic Lender's Term Note Record shall not
affect the obligations of the Domestic Borrowers hereunder or under any Term A
Note to make payments of principal of and interest on any Term A Note when due.
4.3. REPAYMENT OF PRINCIPAL OF TERM LOAN A. The Domestic Borrowers
jointly and severally promise to pay to the Agent, for the pro rata accounts of
the Domestic Lenders in accordance with their Term A Commitment Percentages, the
principal amount of Term Loan A in seventeen (17) consecutive quarterly payments
in an amount equal to $833,333 on the last day of each fiscal quarter of the
Domestic Borrowers, with a final payment of Term Loan A on the Term Loan A
Maturity Date in an amount equal to the unpaid balance of Term Loan A.
4.4. PREPAYMENT OF TERM LOAN A.
4.4.1. OPTIONAL PREPAYMENT. At any time no Revolving Credit
Loans are Outstanding, the Domestic Borrowers shall have the right at any time
to prepay the Term A Notes, as a whole, or in part, upon not less than three (3)
Business Days prior written notice to the Agent, provided that (i) each partial
prepayment shall be in the principal amount of $1,000,000 or a larger integral
multiple thereof, (ii) any portion of the Term Loan A bearing interest at the
Eurodollar Rate that is prepaid pursuant to this Section 4.4 on a day other than
the last day of the Interest Period relating thereto shall be accompanied by any
amounts due under Section 6.9, (iii) each partial prepayment of Term Loan A
shall be allocated among the Domestic Lenders, in proportion, as nearly as
practicable, to the respective outstanding amount of each Domestic Lender's Term
A Note, with adjustments to the extent practicable to equalize any prior
prepayments not exactly in proportion. Any prepayment of principal of the Term
Loan A shall include all interest accrued to the date of prepayment and shall be
applied pro rata to the remaining scheduled installments of principal due on the
Term Loan A. No amount repaid with respect to the Term Loan A may be reborrowed.
4.4.2. MANDATORY PREPAYMENTS.
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4.4.2.1. MANDATORY PREPAYMENTS FROM NET CASH PROCEEDS, ETC. In
the event that any of the Domestic Borrowers or any of their
Subsidiaries other than the Canadian Borrower shall:
(a) sell or otherwise dispose of any of its assets whether by sale of
assets or stock, for consideration in the case of any single transaction
or a series of related transactions with a value in excess of $5,000,000
(excluding transactions described in clauses (b) or (c) below) (provided
for clarity that nothing herein shall be deemed consent to any such sale
or other disposition that has not otherwise been permitted pursuant to
Section 10.5.2 or previously consented to in writing by the Required
Lenders),
(b) receive Net Cash Proceeds in connection with a New Unit Permitted
Sale-Leaseback which are not reinvested in the Domestic Borrowers'
business within two hundred and seventy (270) days after the receipt
thereof by such Person,
(c) receive Net Cash Proceeds in connection with an Existing Unit
Permitted Sale-Leaseback or in connection with the sale of any Real
Estate owned on the Closing Date where such sale is not made pursuant to
a Permitted Sale-Leaseback,
(d) sell or issue any shares of their stock, partnership units or other
Equity Interests, or any options or warrants for the purchase of its
stock or partnership units or other Equity Interests,
(e) receive any insurance proceeds or any awards for takings or
condemnation of their properties or any tax refund with respect to any
taxable year, in each case which are not reinvested in the Domestic
Borrowers' business within twelve (12) months after the receipt thereof
by such Person, or
(f) incur additional Consolidated Funded Indebtedness (other than,
purchase money Indebtedness, Indebtedness consisting of Obligations and
other Indebtedness permitted under Section 10.1(d) hereunder),
then as soon as practicable and in any event (i) within thirty (30) days
after the receipt by such Person of the Net Cash Proceeds of such sale
or disposition of assets (other than Sale-Leaseback dispositions of the
type described in clause (b) above), sale of Equity Interests described
in clause (d) above or incurrence of such additional Consolidated Funded
Indebtedness, as the case may be or (ii) within twelve (12) months after
the receipt by any Domestic Borrower of insurance proceeds, awards for
takings or condemnation of properties or tax refunds or (iii) within 270
days after the receipt by any Domestic Borrower of the Net Cash Proceeds
from any New Unit Permitted Sale-Leaseback, the Domestic Borrowers shall
prepay the Term Loan A or, in the event that the Term Loan A has been
paid in full, repay the Revolving Credit Loans in accordance with
Section 4.4.2.3 below in an aggregate amount equal to one hundred
percent (100%) of the amount of the Net Cash Proceeds of (A) any sale or
other disposition of assets referred to in clauses (a), (b) or (c) above
(provided, however, if the Leverage Ratio as reported on the Compliance
Certificate most recently delivered by the Borrowers to the Agent
pursuant to Section 9.4(d) is less than 1.50:1.00, only fifty percent
(50%) of the Net Cash Proceeds from such sale or other disposition of
assets will be required to be applied in accordance with this Section
4.4.2.1), (B) any sale of Equity Interests described in clause (d)
above, (C) any incurrence of such additional Consolidated Funded
Indebtedness, or (D) the amount of such insurance proceeds, award or tax
refund less, in the case of any net
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proceeds described in clauses (b) and (e) of this Section 4.4.2.1, the
amount of any such proceeds reinvested in the business of any of the
Domestic Borrowers' within the respective time periods specified in such
clauses. Any insurance proceeds, awards from taking or condemnation of
properties, tax refunds or Net Cash Proceeds from the disposition of a
New Unit Permitted Sale-Leaseback described in this Section 4.4.2.1 in
an aggregate amount in excess of $1,000,000 which at any particular time
of reference have not yet been reinvested or applied to repay the Term
Loan A as permitted hereunder, shall in the interim, at the Domestic
Borrowers' option, either be (x) applied to repay the Domestic Revolving
Credit Loans or (y) invested in Investments permitted under clauses (a),
(b) or (c) of Section 10.3 or (z) held as Collateral by the Agent for
the benefit of the Domestic Lenders and the Agent pending reinvestment
in the Domestic Borrowers' business.
4.4.2.2. MANDATORY PREPAYMENTS BY CANADIAN BORROWER. The
provisions of Section 4.4.2.1 with respect to asset sales and other
dispositions described in clause (a) thereof, and insurance proceeds,
and other awards and tax refunds described in clause (b) thereof shall
apply mutatis mutandis with respect to all or any portion of Net
Proceeds of such type received by the Canadian Borrower and such Net
Proceeds shall be paid to each Canadian Lender and be applied to repay
the Canadian Loans. The Total Canadian Commitment shall be permanently
reduced by each mandatory prepayment of the Canadian Loans pursuant to
this Section 4.4.2.2 (the "Reduction Amount") until the Total Canadian
Commitment is the U.S. Dollar Equivalent of $500,000 and the Total
Domestic Revolving Commitment shall be increased by such Reduction
Amount in accordance with Section 2.3.2 hereof. The provisions of
Section 6.9 shall apply to each prepayment pursuant to this Section
4.4.2.2.
4.4.2.3. APPLICATION OF PREPAYMENTS; ETC. All mandatory
prepayments pursuant to Section 4.4.2.1 shall be applied first, to the
principal of Term Loan A based upon the outstanding amounts thereof and
against the remaining scheduled installments of the Term Loan A in
inverse order of maturity until the Term Loan A is paid in full, second,
to repay the Domestic Revolving Credit Loans and third, to repay the
Canadian Loans. The Domestic Revolving Credit Commitments shall not be
reduced by the amounts required to be applied to prepay the Domestic
Revolving Credit Loans pursuant to this paragraph, however, the Total
Canadian Commitment shall be permanently reduced by the amounts required
to be applied to repay the Canadian Loans pursuant to this paragraph
until the U.S. Dollar Equivalent of the Total Canadian Commitment is
$500,000 and the Total Domestic Revolving Credit Commitment shall be
increased by the amount of such reduction in accordance with Section
2.3.2 hereof. Any prepayment of any portion of the principal of the Term
Loan A shall include all interest accrued on such portion of the Term
Loan A to the date of prepayment. No amount repaid with respect to the
Term Loan A may be reborrowed. The provisions of Section 6.9 shall apply
to each prepayment pursuant to this Section 4.4.2.3.
4.4.2.4. MANDATORY PREPAYMENTS RELATED TO SUBORDINATED
INDENTURE. If any Loan is made or any Letter of Credit is issued,
extended or renewed in violation of the provisions regarding the
incurrence of additional LR Indebtedness (as defined in the Subordinated
Indenture) set forth in Section 5.10 of the Subordinated Indenture, the
Borrowers shall immediately repay such Loans or provide to the Agent
cash collateral for such Reimbursement Obligations. The provisions of
Section 6.9 shall apply to each prepayment pursuant to this Section
4.4.2.4.
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4.5. INTEREST RATES. Except as otherwise provided in Section 6.10, the
Term Loan A shall bear interest during each Interest Period relating to all or
any portion of the Term Loan A at the following rates:
(a) To the extent that all or any portion of Term Loan A bears
interest during such Interest Period determined by reference to the Base
Rate, Term Loan A or such portion thereof shall bear interest during
such Interest Period at the rate per annum equal to the sum of (i) the
Base Rate plus (ii) the Applicable Margin with respect to portions of
Term Loan A consisting of Base Rate Loans as in effect from time to
time.
(b) To the extent that all or any portion of Term Loan A bears
interest during such Interest Period determined by reference to the
Eurodollar Rate, Term Loan A or such portion thereof shall bear interest
during such Interest Period at the rate per annum equal to the sum of
(i) the Eurodollar Rate plus (ii) the Applicable Margin with respect to
portions of Term Loan A consisting of Eurodollar Rate Loans as in effect
from time to time.
(c) The Domestic Borrowers jointly and severally promise to pay
interest on the Term Loan A or any portion thereof outstanding during
each Interest Period in arrears on each Interest Payment Date applicable
to such Interest Period.
4.6. NOTIFICATION BY DOMESTIC BORROWERS; INTEREST RATE CONVERSION
OPTIONS. The Domestic Borrowers shall notify the Agent, such notice to be
irrevocable, at least three (3) Eurodollar Business Days prior to the Drawdown
Date of the Term Loan A if all or any portion of the Term Loan A is to bear
interest at the Eurodollar Rate. With respect to the Term Loan A, the provisions
of Section 2.7 shall apply mutatis mutandis with respect to all or any portion
of the Term Loan A so that the Domestic Borrowers may have the same interest
rate options with respect to all or any portion of the Term Loan A as they would
be entitled to with respect to the Domestic Revolving Credit Loans.
4.7. AMOUNTS, ETC. Any portion of the Term Loan A bearing interest at
the Eurodollar Rate relating to any Interest Period shall be in the amount of
$500,000 or an integral multiple thereof. No Interest Period relating to the
Term Loan A or any portion thereof bearing interest at the Eurodollar Rate shall
extend beyond the date on which a regularly scheduled installment payment of the
principal of the Term Loan A is to be made unless either (i) a portion of the
Term Loan A at least equal to such installment payment has an Interest Period
ending on or prior to such date or (ii) there are Base Rate Loans outstanding in
an amount at least equal to such installment payment. At no time shall there be
more than three (3) portions of Term Loan A that are Eurodollar Rate Loans
having different Interest Periods.
5. LETTERS OF CREDIT.
5.1. LETTER OF CREDIT COMMITMENT.
5.1.1. COMMITMENT TO ISSUE LETTERS OF CREDIT. Subject to the
terms and conditions hereof and the execution and delivery by the Domestic
Borrowers of a letter of credit application on the Agent's customary form (a
"Letter of Credit Application"), the Agent on behalf of the Domestic Lenders
that have a Domestic Revolving Credit Commitment and in reliance upon the
agreement of the Domestic Lenders set forth in Section 5.1.4 and upon the
representations and warranties of the Domestic Borrowers contained herein,
agrees, in its individual capacity, to issue, extend and renew for the account
of the Domestic Borrowers one or more standby or documentary letters of credit
(individually, a "Letter of Credit"), in such form as may be requested from time
to time by the Domestic Borrowers and agreed to by the Agent; provided, however,
that, after giving effect to such request, (a) the sum of the aggregate
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Maximum Drawing Amount of all Letters of Credit and all Unpaid Reimbursement
Obligations shall not exceed $10,000,000 at any one time and (b) the sum of the
aggregate Maximum Drawing Amount of all Letters of Credit and all Unpaid
Reimbursement Obligations plus the Outstanding amount of the Domestic Revolving
Credit Loans shall not, at any time, exceed the Total Domestic Revolving Credit
Commitment. Notwithstanding the foregoing, the Agent shall have no obligation to
issue any Letter of Credit to support or secure any Indebtedness of any of the
Domestic Borrowers or their Subsidiaries described in clauses (i) or (ix) of the
definition of "Indebtedness" hereunder to the extent that such Indebtedness was
incurred prior to the proposed issuance date of such Letter of Credit, unless in
any such case the Domestic Borrowers demonstrate to the satisfaction of the
Agent that (x) such prior incurred Indebtedness was then fully secured by a
prior perfected and unavoidable security interest in collateral provided by the
Domestic Borrowers or such Subsidiary to the proposed beneficiary of such Letter
of Credit or (y) such prior incurred Indebtedness were then secured or supported
by a letter of credit issued for the account of such Domestic Borrower or such
Subsidiary and the reimbursement obligation with respect to such letter of
credit was fully secured by a prior perfected and unavoidable security interest
in collateral provided to the issuer of such letter of credit by such Domestic
Borrower or such Subsidiary.
5.1.2. LETTER OF CREDIT APPLICATIONS. Each Letter of Credit
Application shall be completed to the satisfaction of the Agent. In the event
that any provision of any Letter of Credit Application shall be inconsistent
with any provision of this Credit Agreement, then the provisions of this Credit
Agreement shall, to the extent of any such inconsistency, govern.
5.1.3. TERMS OF LETTERS OF CREDIT. Each Letter of Credit
issued, extended or renewed hereunder shall, among other things, (a) provide for
the payment of sight drafts for honor thereunder when presented in accordance
with the terms thereof and when accompanied by the documents described therein,
and (b) have an expiry date no later than the date which is fourteen (14) days
(or, if the Letter of Credit is confirmed by a confirmer or otherwise provides
for one or more nominated persons, forty-five (45) days) prior to the Revolving
Credit Loan Maturity Date. Each Letter of Credit so issued, extended or renewed
shall be subject to the Uniform Customs.
5.1.4. REIMBURSEMENT OBLIGATIONS OF DOMESTIC LENDERS. Each
Domestic Lender 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 Lender's Domestic
Revolving Credit Commitment Percentage to reimburse the Agent on demand for the
amount of each draft paid by the Agent under each Letter of Credit to the extent
that such amount is not reimbursed by the Domestic Borrowers pursuant to Section
5.2 (such agreement for a Lender being called herein the "Letter of Credit
Participation" of such Lender).
5.1.5. PARTICIPATIONS OF DOMESTIC LENDERS. Each such payment
made by a Lender shall be treated as the purchase by such Lender of a
participating interest in the applicable Borrowers' Reimbursement Obligation
under Section 5.2 in an amount equal to such payment. Each Domestic Lender shall
share in accordance with its participating interest in any interest which
accrues pursuant to Section 5.2.
5.2. REIMBURSEMENT OBLIGATION OF THE DOMESTIC BORROWERS. In
order to induce the Agent to issue, extend and renew each Letter of Credit and
the Domestic Lenders to participate therein, the Domestic Borrowers hereby
jointly and severally agree to reimburse or pay to the Agent, for the account of
the Agent or (as the case may be) the Domestic Lenders, with respect to each
Letter of Credit, issued, extended or renewed by the Agent hereunder,
(a) except as otherwise expressly provided in Section 5.2(b) and
(c), on each date that any draft presented under any Letter of Credit is
honored by the Agent, or the Agent otherwise makes a payment with
respect thereto (such date referred to herein as an "LC Payment Date"),
(i) the
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amount paid by the 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 Agent or any Lender in connection
with any payment made by the Agent or any Lender under, or with respect
to, such Letter of Credit (collectively, an "LC Payment Amount");
provided, that unless the Domestic Borrowers otherwise notify the Agent
prior to the making of such LC Payment Amount by the Agent, the Domestic
Borrowers shall be deemed to have requested a Domestic Revolving Credit
Loan that is a Base Rate Loan pursuant to Section 2.6 in an amount equal
to the LC Payment Amount with a Drawdown Date on the LC Payment Date.
The Agent shall apply the proceeds of any such Domestic Revolving Credit
Loan (and the Borrowers hereby authorize such application) to the
Domestic Borrowers' Reimbursement Obligations with respect to the LC
Payment Amounts;
(b) upon the reduction (but not termination) of the Total
Revolving Credit Commitment to an amount less than the Maximum Drawing
Amount, an amount equal to such difference, which amount shall be held
by the Agent for the benefit of the Domestic Lenders and Agent as cash
collateral for all Reimbursement Obligations, and
(c) upon the termination of the Total Domestic Revolving Credit
Commitment, or the acceleration of the Reimbursement Obligations with
respect to all Letters of Credit in accordance with Section 14, an
amount equal to the then Maximum Drawing Amount of all Letters of Credit
shall be paid by the Domestic Borrowers to the Agent which amount shall
be held by the Agent for the benefit of the Lenders and the Agent as
cash collateral for all Reimbursement Obligations.
Each such payment shall be made to the Agent at the Agent's Office in
immediately available funds. Interest on any and all amounts remaining unpaid by
the Domestic Borrowers under this Section 5.2 at any time from the date such
amounts become due and payable (whether as stated in this Section 5.2, by
acceleration or otherwise) until payment in full (whether before or after
judgment) shall be payable to the Agent on demand at the rate specified in
Section 6.10 for overdue principal on the Domestic Revolving Credit Loans.
5.3. LETTER OF CREDIT PAYMENTS. If any draft shall be presented or other
demand for payment shall be made under any Letter of Credit, the Agent shall
notify the Domestic Borrowers of the date and 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. If the Domestic Borrowers fail to reimburse the
Agent as provided in Section 5.2 on or before the date that such draft is paid
or other payment is made by the Agent, the Agent may at any time thereafter
notify the Domestic Lenders 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 Domestic Lender shall make available
to the Agent, at the Agent's Office, in immediately available funds, such
Lender's Domestic Revolving Credit Commitment Percentage of such Unpaid
Reimbursement Obligation, together with 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 Agent for federal funds acquired by
the Agent during each day included in such period, times (ii) the amount equal
to such Lender's Domestic Revolving Credit Commitment Percentage of such Unpaid
Reimbursement Obligation, times (iii) a fraction, the numerator of which is the
number of days that elapse from and including the date the Agent paid the draft
presented for honor or otherwise made payment to the date on which such Lender's
Domestic Revolving Credit Commitment Percentage of such Unpaid Reimbursement
Obligation shall become immediately available to the Agent, and the denominator
of which is 360. The responsibility of the Agent to the Domestic Borrowers and
the Lenders 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.
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5.4. OBLIGATIONS ABSOLUTE. The Domestic Borrowers' obligations under
this Section 5 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 any of the Borrowers may have or have had against the
Agent, any Domestic Lender or any beneficiary of a Letter of Credit, other than
claims arising due to the gross negligence or willful misconduct of the Agent or
any Domestic Lender. Each of the Domestic Borrowers further agrees with the
Agent and the Domestic Lenders that neither the Agent nor any Domestic Lender
shall be responsible for, and the Domestic Borrowers' Reimbursement Obligations
under Section 5.2 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 respects invalid, fraudulent or forged,
or any dispute between or among the Domestic Borrowers, 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 any of the
Borrowers against the beneficiary of any Letter of Credit or any such
transferee. The Agent and the Domestic Lenders 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. Each of the Domestic Borrowers agrees that any action taken or omitted
by the Agent or any Domestic Lender under or in connection with each Letter of
Credit and the related drafts and documents, if done in good faith, shall be
binding upon the Domestic Borrowers and shall not result in any liability on the
part of the Agent or any Domestic Lender to the Domestic Borrowers.
5.5. RELIANCE BY THE AGENT. To the extent not inconsistent with Section
5.4, the 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 Persons
and upon advice and statements of legal counsel, independent accountants and
other experts selected by the Agent. In connection with any such document, the
Agent shall be fully justified in failing or refusing to take any action under
this Credit Agreement unless it shall first have received such advice or
concurrence of the Required Lenders as it reasonably deems appropriate or it
shall first be indemnified to its reasonable satisfaction by the Domestic
Lenders against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Credit Agreement in accordance with a request of the Required Lenders, and such
request and any action taken or failure to act pursuant thereto shall be binding
upon the Domestic Lenders and all future holders of the Domestic Revolving
Credit Notes or of a Letter of Credit Participation.
5.6. LETTER OF CREDIT FEE. With respect to each Letter of Credit issued
hereunder, the Domestic Borrowers shall pay to the Agent a fee (the "Letter of
Credit Fee") for each Letter of Credit issued or renewed by the Agent at a rate
per annum equal to the Applicable Margin with respect to Letters of Credit in
effect from time to time, on the Maximum Drawing Amount of such Letter of Credit
for the period such Letter of Credit is outstanding. The Agent shall, in turn,
remit to each Domestic Lender (including Fleet) such Lender's Domestic Revolving
Credit Commitment Percentage of the Letter of Credit Fee. In addition, the
Domestic Borrowers will pay the Agent, for its own account, a Fronting Fee (the
"Fronting Fee") equal to one-quarter of one percent (0.25%) per annum on the
Maximum Drawing Amount of such Letter of Credit for the period such Letter of
Credit is outstanding. The Letter of Credit Fee and the Fronting Fee shall be
payable quarterly in arrears on the last day of each calendar quarter for the
calendar quarter then ending. In respect of each Letter of Credit, the Domestic
Borrowers shall also pay to the Agent, for its own account, at such time or
times as such charges are customarily made by the Agent, the Agent's customary
issuance, amendment, negotiation or document examination and other
administrative fees as in effect from time to time.
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6. CERTAIN GENERAL PROVISIONS.
6.1. FEES. The Domestic Borrowers jointly and severally agree to pay to
the Agent all fees described in the Fee Letter in accordance with the terms
thereof.
6.2. FUNDS FOR PAYMENTS.
6.2.1. PAYMENTS TO AGENT AND CANADIAN LENDERS. All payments of
principal and interest in respect of Domestic Loans, Reimbursement Obligations,
Domestic Commitment Fees, Letter of Credit Fees and any other amounts due
hereunder or under any of the other Loan Documents from the Domestic Borrowers
shall be made to the Agent for the respective accounts of the applicable Lenders
and the Agent, at the Agent's Office or at such other location in the Boston,
Massachusetts, area that the Agent may from time to time designate, in each case
at or about 11:00 a.m. (Boston time) in immediately available funds. All
payments of principal and interest in respect of Canadian Loans, Reimbursement
Obligations, Canadian Commitment Fees and any other amounts due hereunder or
under any of the other Loan Documents from the Canadian Borrower shall be made
to each Canadian Lender for its respective account, at such Canadian Lender's
office or at such other location that such Canadian Lender may from time to time
designate, in each case at or about 11:00 a.m. (Boston time) in immediately
available funds.
6.2.2. NO OFFSET, ETC. All payments by the Borrowers hereunder
and under any of the other Loan Documents shall be made without setoff or
counterclaim and free and 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 Borrowers are compelled by law to make such
deduction or withholding. If any such obligation is imposed upon the Borrowers
with respect to any amount payable by them hereunder or under any of the other
Loan Documents, the applicable Domestic Borrowers will pay to the applicable
Canadian Lender in the case of a payment by the Canadian Borrower or the Agent
for the account of the applicable Domestic Lenders or the Agent (as the case may
be)(in the case of a payment by a Domestic Borrower), on the date on which such
amount is due and payable hereunder or under such other Loan Document, such
additional amount in U.S. Dollars or Canadian Dollars, as applicable, as shall
be necessary to enable the applicable Lenders or the Agent to receive the same
net amount which such Lenders or the Agent would have received on such due date
had no such obligation been imposed upon the Borrowers. The Borrowers will
deliver promptly to the Agent certificates or other valid vouchers for all taxes
or other charges deducted from or paid with respect to payments made by the
Borrowers hereunder or under such other Loan Document.
6.3. COMPUTATIONS. All computations of interest on Base Rate Loans and
Canadian Prime Rate Loans shall be based on a 365-day year and the actual number
of days elapsed. All computations of interest on the Eurodollar Rate Loans and
Canadian Cost of Funds Loans and of Commitment Fees, Letter of Credit Fees,
Fronting Fees or other fees shall be based on a 360-day year and paid for the
actual number of days elapsed. Except as otherwise provided in the definition of
the term "Interest Period" with respect to Eurodollar Rate Loans and Canadian
Cost of Funds Loans, whenever a payment hereunder or under any of the other Loan
Documents becomes due on a day that is not a Business Day, the due date for such
payment shall be extended to the next succeeding Business Day, and interest
shall accrue during such extension. The outstanding amount of the Loans as
reflected on the Revolving Credit Note Records and the Term Note Records from
time to time shall be considered correct and binding on the Borrowers absent
manifest error.
Wherever interest is calculated on the basis of a period which is less
than the actual number of days in a calendar year, each rate of interest
determined pursuant to such calculation, for the purposes of the Interest Act
(Canada) is equivalent to such rate multiplied by the actual number of days in
the calendar
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year in which such rate is to be ascertained and divided by the number of days
used as the basis of that calculation.
6.4. INABILITY TO DETERMINE EURODOLLAR RATE OR CANADIAN COST OF FUNDS
RATE. In the event, prior to the commencement of any Interest Period relating to
any Eurodollar Rate Loan or Canadian Cost of Funds Loan, the Agent shall
determine or be notified by the Required Lenders or the Canadian Lenders, as
applicable, that adequate and reasonable methods do not exist for ascertaining
the Eurodollar Rate or Canadian Cost of Funds Rate, as applicable, that would
otherwise determine the rate of interest to be applicable to any Eurodollar Rate
Loan or Canadian Cost of Funds Loans during any Interest Period, the Agent shall
forthwith give notice of such determination (which shall be conclusive and
binding on the applicable Borrowers and the applicable Lenders) to the
applicable Borrowers and the applicable Lenders. In such event (i) any Revolving
Credit Loan Request or Conversion Request with respect to Eurodollar Rate Loans
or Canadian Cost of Funds Loans, as applicable, shall be automatically withdrawn
and shall be deemed a request for Base Rate Loans or Canadian Prime Rate Loans,
as applicable, (ii) each Eurodollar Rate Loan or Canadian Cost of Funds Loan, as
applicable, will automatically, on the last day of the then current Interest
Period relating thereto, become a Base Rate Loan or a Canadian Prime Rate Loan,
as applicable, and (iii) the obligations of the applicable Lenders to make
Eurodollar Rate Loans or Canadian Cost of Funds Loans shall be suspended until
the Agent or the Required Lenders determine that the circumstances giving rise
to such suspension no longer exist, whereupon the Agent, upon the instruction of
the Required Lenders, shall so notify the applicable Borrowers and the
applicable Lenders.
6.5. ILLEGALITY. 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 Lender to make or maintain
Eurodollar Rate Loans or Canadian Cost of Funds Loans, as applicable, such
Lender shall forthwith give notice of such circumstances to the applicable
Borrowers and the other applicable Lenders and thereupon (i) the commitment of
such Lender to make Eurodollar Rate Loans or Canadian Cost of Funds Loans, as
the case may be, or convert Loans of another Type to Eurodollar Rate Loans or
Canadian Cost of Funds Loans, as the case may be, shall forthwith be suspended
and (ii) such Lender's Domestic Revolving Credit Loans then outstanding as
Eurodollar Rate Loans or Canadian Loans then outstanding as Canadian Cost of
Funds Loans, if any, shall be converted automatically to Base Rate Loans or
Canadian Prime Rate Loans, as applicable, on the last day of each Interest
Period applicable to such Eurodollar Rate Loans or Canadian Cost of Funds Loans,
as the case may be, or within such earlier period as may be required by law.
Each of the Domestic Borrowers (with respect to Eurodollar Rate Loans) and the
Canadian Borrower (with respect to Canadian Cost of Funds Loans) hereby agrees
promptly to pay the Agent for the account of such Lender, upon demand by such
Lender, any additional amounts necessary to compensate such Lender for any costs
incurred by such Lender in making any conversion in accordance with this Section
6.5, including any interest or fees payable by such Lender to lenders of funds
obtained by it in order to make or maintain its Eurodollar Rate Loans or
Canadian Cost of Funds Loans, as applicable, hereunder.
6.6. ADDITIONAL COSTS, ETC. If any present or future applicable law,
which expression, as used herein, includes statutes, rules and regulations
thereunder and interpretations thereof by any competent court or by any
governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to any Lender or the Agent by any central bank or other fiscal,
monetary or other authority (whether or not having the force of law), shall:
(a) subject any Lender or the Agent to any tax, levy, impost,
duty, charge, fee, deduction or withholding of any nature with respect
to this Credit Agreement, the other Loan Documents, any Letters of
Credit, such Lender's Revolving Credit Commitment or the Loans
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(other than taxes based upon or measured by the income or profits of
such Lender or the Agent), or
(b) materially change the basis of taxation (except for changes
in taxes on income or profits) of payments to any Lender of the
principal of or the interest on any Loans or any other amounts payable
to any Lender or the Agent under this Credit Agreement or any of the
other Loan Documents, or
(c) impose or increase or render applicable (other than to the
extent specifically provided for elsewhere in this Credit Agreement) any
special deposit, reserve, assessment, liquidity, capital adequacy or
other similar requirements (whether or not having the force of law)
against assets held by, or deposits in or for the account of, or loans
by, or letters of credit issued by, or commitments of an office of any
Lender, or
(d) impose on any Lender or the Agent any other conditions or
requirements with respect to this Credit Agreement, the other Loan
Documents, any Letters of Credit, the Loans, such Lender's Revolving
Credit Commitment, or any class of loans, letters of credit or
commitments of which any of the Loans, or such Lender's Revolving Credit
Commitment forms a part, and the result of any of the foregoing is
(i) to increase the cost to any Lender of making,
funding, issuing, renewing, extending or maintaining any of the
Loans or such Lender's Revolving Credit Commitment or any Letter
of Credit; or
(ii) to reduce the amount of principal, interest,
Reimbursement Obligation or other amount payable to such Lender
or the Agent hereunder on account of such Lender's Revolving
Credit Commitment, any Letter of Credit, or any of the Loans, or
(iii) to require such Lender or the Agent to make any
payment or to forego any interest or Reimbursement Obligation or
other sum payable hereunder, the amount of which payment or
foregone interest or Reimbursement Obligation or other sum is
calculated by reference to the gross amount of any sum
receivable or deemed received by such Lender or the Agent from
any of the Borrowers hereunder,
then, and in each such case, the Canadian Borrower, in the case of Canadian
Loans, and the Domestic Borrowers in each other case, will, upon demand made by
such Lender or (as the case may be) the Agent at any time and from time to time
and as often as the occasion therefore may arise, pay to such Lender or the
Agent such additional amounts as will be sufficient to compensate such Lender or
the Agent for such additional cost, reduction, payment or foregone interest or
Reimbursement Obligation or other sum.
6.7. CAPITAL ADEQUACY. If after the date hereof any Lender or the Agent
determines that (i) the adoption of or change in any law, governmental rule,
regulation, policy, guideline or directive (whether or not having the force of
law) regarding capital requirements for banks or bank holding companies or any
change in the interpretation or application thereof by a court or governmental
authority with appropriate jurisdiction, or (ii) compliance by such Lender or
the Agent or any corporation controlling such Lender or the Agent with any such
law, governmental rule, regulation, policy, guideline or directive issued after
the date hereof (whether or not having the force of law) of any such entity
regarding capital adequacy, has the effect of reducing the return on such
Lender's or the Agent's commitment with respect to any Loans or Letters of
Credit to a level below that which such Lender or the Agent could have achieved
but for such adoption, change or compliance (taking into consideration such
Lender's or the Agent's then existing policies with respect to capital adequacy
and assuming full utilization of such entity's capital) by any
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amount deemed by such Lender or (as the case may be) the Agent to be material,
then such Lender or the Agent may notify the Borrowers of such fact. To the
extent that the amount of such reduction in the return on capital is not
reflected in the Base Rate or Canadian Prime Rate, as applicable, the Canadian
Borrower, in the case of the Canadian Lenders, and the Domestic Borrowers in the
case of the Domestic Lenders, agree to pay such Lender or (as the case may be)
the Agent for the amount of such reduction in the return on capital as and when
such reduction is determined upon presentation by such Lender or (as the case
may be) the Agent of a certificate in accordance with Section 6.8 hereof. Each
Lender shall allocate such cost increases among its customers in good faith and
on an equitable basis.
6.8. CERTIFICATE. A certificate setting forth any additional amounts
payable pursuant to Sections 6.6 or 6.7 and a brief explanation of such amounts
which are due, submitted by any Lender or the Agent to the applicable Borrowers
and the Agent, shall be conclusive, absent manifest error, that such amounts are
due and owing.
6.9. INDEMNITY. The Domestic Borrowers jointly and severally agree to
indemnify each Domestic Lender and to hold each Domestic Lender harmless from
and against any loss, cost or expense (including loss of anticipated profits
actually incurred but not other consequential damages) that such Domestic Lender
may sustain or incur as a consequence of (i) default by the Domestic Borrowers
in payment of the principal amount of or any interest on any Eurodollar Rate
Loans as and when due and payable, including any such loss or expense arising
from interest or fees payable by such Domestic Lender to lenders of funds
obtained by it in order to maintain its Eurodollar Rate Loans, (ii) default by
the Domestic Borrowers in making a borrowing or conversion after the Domestic
Borrowers have given (or are deemed to have given) a Revolving Credit Loan
Request, notice (in the case of all or any portion of the Term Loan A pursuant
to Section 4.6) or a Conversion Request relating thereto in accordance with
Section 2.6 or Section 2.7 or Section 4.6 or (iii) the making of any payment of
a Eurodollar Rate Loan or the making of any conversion of any such 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 such Domestic
Lender to lenders of funds obtained by it in order to maintain any such Loans.
The Canadian Borrower agrees to indemnify each Canadian Lender and to hold each
Canadian Lender harmless from and against any loss, cost or expense (including
loss of anticipated profits actually incurred but not other consequential
damages) that such Canadian Lender may sustain or incur as a consequence of (A)
default by the Canadian Borrower in payment of the principal amount of or any
interest on any Canadian Cost of Funds Loans as and when due and payable,
including any such loss or expense arising from interest or fees payable by such
Canadian Lender to lenders of funds obtained by it in order to maintain its
Canadian Cost of Funds Loans, (B) default by the Canadian Borrower in making a
borrowing or conversion after the Canadian Borrower has given (or is deemed to
have given) a Canadian Loan Request or a Conversion Request relating thereto in
accordance with Section 2.6 or Section 2.7 or (C) the repayment of any Canadian
Cost of Funds Loan or the conversion of any such Canadian Cost of Funds Loan to
a Canadian Prime 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 such
Canadian Lender to lenders of funds obtained by it in order to maintain any such
Canadian Loans.
6.10. INTEREST AFTER DEFAULT.
6.10.1. OVERDUE AMOUNTS. Overdue principal and (to the extent
permitted by applicable law) interest on the Loans and all other overdue amounts
payable hereunder or under any of the other Loan Documents shall bear interest
compounded monthly and payable on demand at a rate per annum equal to (a) with
respect to Domestic Loans and all other amounts payable hereunder, the Base Rate
plus the Applicable
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Margin for Base Rate Loans plus two percent (2%) per annum, (b) with respect to
Canadian Loans, the Canadian Prime Rate plus the Applicable Margin for Canadian
Prime Rate Loans plus two percent (2%) per annum and (c) with respect to Term
Loan A, the Base Rate plus the Applicable Margin for Term Loan A plus two
percent (2%) per annum, in each case until such amount shall be paid in full
(after as well as before judgment).
6.10.2. AMOUNTS NOT OVERDUE. During the continuance of an Event
of Default the principal of the Loans not overdue shall, until such Event of
Default has been cured or remedied or such Event of Default has been waived by
the Lenders pursuant to Section 27, bear interest at a rate per annum equal to
(a) with respect to Domestic Loans, the Base Rate plus the Applicable Margin for
Base Rate Loans plus two percent (2%) per annum and (b) with respect to Canadian
Loans, the Canadian Prime Rate plus the Applicable Margin for Canadian Prime
Rate Loans plus two percent (2%) per annum.
6.10.3. LETTERS OF CREDIT. The Unpaid Reimbursement Obligations
and (to the extent permitted by law) unpaid interest thereon (as provided in
this sentence) shall bear interest compounded monthly and payable on demand at a
rate per annum equal to the Base Rate plus the Applicable Margin for Base Rate
Loans then in effect with respect to Revolving Credit Loans plus two percent
(2%) per annum until such amount shall be paid in full (after as well as before
judgment).
6.11. CONCERNING JOINT AND SEVERAL LIABILITY OF THE DOMESTIC BORROWERS.
(a) Each of the Domestic Borrowers is accepting joint and
several liability hereunder and under the other Loan Documents in
consideration of the financial accommodations to be provided by the
Agent and the Lenders under this Credit Agreement, for the mutual
benefit, directly and indirectly, of each of the Borrowers and in
consideration of the undertakings of each other Domestic Borrower to
accept joint and several liability for the Obligations (including the
Canadian Obligations).
(b) Each of the Domestic Borrowers, jointly and severally,
hereby irrevocably and unconditionally accepts, not merely as a surety
but also as a co-debtor, joint and several liability with the other
Domestic Borrowers, with respect to the payment and performance of all
of the Obligations of both the Domestic Borrowers and the Canadian
Borrower (including, without limitation, any Obligations arising under
this Section 6.11), it being the intention of the parties hereto that
all the Obligations shall be the joint and several obligations of each
of the Domestic Borrowers without preferences or distinction among them.
(c) If and to the extent that any of the Borrowers shall fail to
make any payment with respect to any of the Obligations as and when due
or to perform any of the Obligations in accordance with the terms
thereof, then in each such event any other Domestic Borrowers will make
such payment with respect to, or perform, such Obligation.
(d) The Obligations of each of the Domestic Borrowers under the
provisions of this Section 6.11 constitute the full recourse Obligations
of each of the Domestic Borrowers enforceable against each such Person
to the full extent of its properties and assets, irrespective of the
validity, regularity or enforceability of this Credit Agreement or the
other Loan Documents or any other circumstance whatsoever as to any
other Domestic Borrower.
(e) Except as otherwise expressly provided herein, each Domestic
Borrower hereby waives promptness, diligence, presentment, demand,
protest, notice of acceptance of its joint and several liability, notice
of any and all advances of the Loans made under this Credit Agreement
and the Notes, notice of occurrence of any Default or Event of Default
(except to the extent notice is expressly required to be given pursuant
to the terms of this Credit Agreement or any of the other Loan
Documents), or of any demand for any payment under this Credit
Agreement, notice of any action at any time taken or omitted by the
Agent or the Lenders under or in respect of any
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of the Obligations hereunder, any requirement of diligence and,
generally, all demands, notices and other formalities of every kind in
connection with this Credit Agreement and the other Loan Documents. Each
Domestic Borrower hereby waives 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 Borrowers and any other entity or Person primarily or secondarily
liable with respect to any of the Obligations, and all suretyship
defenses generally. Each Domestic Borrower hereby assents to, and waives
notice of, any extension or postponement of the time for the payment, or
place or manner for payment, compromise, refinancing, consolidation or
renewals of any of the Obligations hereunder, the acceptance of any
partial payment thereon, any waiver, consent or other action or
acquiescence by the Agent and the Lenders at any time or times in
respect of any default by any Borrower in the performance or
satisfaction of any term, covenant, condition or provision of this
Credit Agreement and the other Loan Documents, any and all other
indulgences whatsoever by the Agent and the Lenders in respect of any of
the Obligations hereunder, and the taking, addition, substitution or
release, in whole or in part, at any time or times, of any security for
any of such Obligations or the addition, substitution or release, in
whole or in part, of any Borrower or any other entity or Person
primarily or secondarily liable for any Obligation. Such Domestic
Borrower further agrees that its Obligations shall not be released or
discharged, in whole or in part, or otherwise affected by the adequacy
of any rights which the Agent or any Lender may have against any
collateral security or other means of obtaining repayment of any of the
Obligations, the impairment of any collateral security securing the
Obligations, including, without limitation, the failure to protect or
preserve any rights which the Agent or any Lender may have in such
collateral security or the substitution, exchange, surrender, release,
loss or destruction of any such collateral security, any other act or
omission which might in any manner or to any extent vary the risk of
such Domestic Borrower, or otherwise operate as a release or discharge
of such Domestic Borrower, all of which may be done without notice to
such Domestic Borrower; provided, however, that the foregoing shall in
no way be deemed to create commercially unreasonable standards as to the
Agent's duties as secured party under the Loan Documents (as such rights
and duties are set forth therein). If for any reason any of the other
Borrowers 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 any of the other Borrowers by reason of such
other Borrower's insolvency, bankruptcy or reorganization or by other
operation of law or for any reason, this Credit Agreement and the other
Loan Documents to which it is a party shall nevertheless be binding on
such Domestic Borrower to the same extent as if such Domestic Borrower
at all times had been the sole obligor on such Obligations. Without
limiting the generality of the foregoing, each Domestic Borrower assents
to any other action or delay in acting or failure to act on the part of
the Agent and the Lenders, including, without limitation, any failure
strictly or diligently to assert any right or to pursue any remedy or to
comply fully with applicable laws or regulations thereunder which might,
but for the provisions of this Section 6.11, afford grounds for
terminating, discharging or relieving such Domestic Borrower, in whole
or in part, from any of its obligations under this Section 6.11, it
being the intention of each Domestic Borrower that, so long as any of
the Obligations hereunder remain unsatisfied, the obligations of such
Domestic Borrower under this Section 6.11 shall not be discharged except
by performance and then only to the extent of such performance. The
Obligations of each Domestic Borrower under this Section 6.11 shall not
be diminished or rendered unenforceable by any winding up,
reorganization, amalgamation, arrangement, liquidation, reconstruction
or similar proceeding with respect to any reconstruction or similar
proceeding with respect to any other Borrower, the Agent or any of the
Lenders. The joint and several liability of the Domestic Borrowers
hereunder shall continue in full force and effect notwithstanding any
absorption, merger, amalgamation or any other change whatsoever in the
name, ownership, membership, constitution or place of formation of any
Borrower or the Lenders. Each of the Domestic Borrowers acknowledges and
confirms that it has itself established its own adequate means of
obtaining from each of the other
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Borrowers on a continuing basis all information desired by such Domestic
Borrower concerning the financial condition of each of the other
Borrowers and that each such Domestic Borrower will look to each of the
other Borrowers and not to the Agent or any Lender in order for such
Domestic Borrower to keep adequately informed of changes in each of the
other Borrowers' respective financial conditions.
(f) The provisions of this Section 6.11 are made for the benefit
of the Agent and the Lenders and their respective permitted successors
and assigns, and may be enforced by it or them from time to time against
any or all of the Domestic Borrowers as often as occasion therefore may
arise and without requirement on the part of the Agent or the Lenders or
such successor or assign first to marshal any of its or their claims or
to exercise any of its or their rights against any of the other
Borrowers or to exhaust any remedies available to it or them against any
of the other Borrowers or to resort to any other source or means of
obtaining payment of any of the Obligations hereunder or to elect any
other remedy. The provisions of this Section 6.11 shall remain in effect
until all of the Obligations shall have been paid in full or otherwise
fully satisfied. If at any time, any payment, or any part thereof, made
in respect of any of the Obligations, is rescinded or must otherwise be
restored or returned by the Agent or any Lender upon the insolvency,
bankruptcy or reorganization of any of the Borrowers, or otherwise, the
provisions of this Section 6.11 will forthwith be reinstated in effect,
as though such payment had not been made.
(g) Each of the Domestic Borrowers hereby agrees that it will
not enforce any of its rights of reimbursement, contribution,
subrogation or the like against the other Borrowers with respect to any
liability incurred by it hereunder or under any of the other Loan
Documents, any payments made by it to any of the Agent or the Lenders
with respect to any of the Obligations or any collateral security
therefore until such time as all of the Obligations have been
irrevocably paid in full in cash. Any claim which any Domestic Borrower
may have against any other Borrower with respect to any payments to the
Agent or the Lenders hereunder or under any other Loan Documents are
hereby expressly made subordinate and junior in right of payment,
without limitation as to any increases in the Obligations arising
hereunder or thereunder, to the prior payment in full of the Obligations
and, in the event of any insolvency, bankruptcy, receivership,
liquidation, reorganization or other similar proceeding under the laws
of any jurisdiction relating to any Borrower, its debts or its assets,
whether voluntary or involuntary, all such Obligations shall be paid in
full before any payment or distribution of any character, whether in
cash, securities or other property, shall be made to any other Borrower
therefore.
(h) Each of the Domestic Borrowers hereby agrees that the
payment of any amounts due with respect to the indebtedness owing by any
Borrower to any Domestic Borrower is hereby subordinated to the prior
payment in full in cash of the Obligations. Each Domestic Borrower
hereby agrees that after the occurrence and during the continuance of
any Default or Event of Default, such Domestic Borrower will not demand,
sue for or otherwise attempt to collect any indebtedness of any other
Borrower owing to such Domestic Borrower until the Obligations shall
have been paid in full in cash. If, notwithstanding the foregoing
sentence, such Domestic Borrower shall collect, enforce or receive any
amounts in respect of such indebtedness, such amounts shall be
collected, enforced and received by such Domestic Borrower as trustee
for the Agent and be paid over to the Agent for the pro rata accounts of
the Lenders to be applied to repay the Obligations.
6.12. CURRENCY MATTERS.
6.12.1. CURRENCY FLUCTUATIONS.
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(a) Not later than 1:00 p.m. (Boston time) on the last Business
Day of each calendar month or upon the request of any Lender (the
"Calculation Date"), the Agent shall determine the Exchange Rate as of
such date. The Exchange Rate so determined shall become effective on the
first Business Day immediately following such determination (a "Reset
Date") and shall remain effective until the next succeeding Reset Date.
(b) Not later than 4:00 p.m. (Boston time) on each Reset Date,
the Agent shall determine the U.S. Dollar Equivalent of the Outstanding
Canadian Loans.
(c) If, on any Reset Date and on the Revolving Credit Loan
Maturity Date, the aggregate Outstanding amount (expressed in U.S.
Dollars) of all Canadian Loans exceeds the Total Canadian Commitment
(expressed in U.S. Dollars) by more than $100,000, then (i) the Agent
shall give notice thereof to the Canadian Borrower and the Canadian
Lenders and (ii) within two (2) Business Days thereafter, the Canadian
Borrower shall repay or prepay Canadian Loans in accordance with this
Credit Agreement in an aggregate principal amount such that, after
giving effect thereto, the aggregate Outstanding amount (expressed in
U.S. Dollars) of all Canadian Loans no longer exceeds the Total Canadian
Commitment (expressed in U.S. Dollars).
(d) Without limiting subsection Section 6.12.1(c), if, on any
day prior to the Revolving Credit Loan Maturity Date, the Outstanding
Canadian Loans (expressed in U.S. Dollars using the Exchange Rate
calculated on or around such day) exceed the Total Canadian Commitment
(expressed in U.S. Dollars using the Exchange Rate calculated on or
around such day) by five percent (5%) or more, then (i) the Agent shall
give notice thereof to the Canadian Borrower and the Canadian Lenders
and (ii) within two (2) Business Days thereafter, the Canadian Borrower
shall repay or prepay Canadian Loans in accordance with this Credit
Agreement in an aggregate principal amount such that, after giving
effect thereto, the Outstanding Canadian Loans (expressed in U.S.
Dollars) no longer exceed the Total Canadian Commitment (expressed in
U.S. Dollars). Nothing set forth in this Section 6.12 shall be construed
to require the Agent to calculate daily compliance under this Section
6.12 unless expressly requested to do so by a Lender.
6.12.2. CURRENCY OF ACCOUNT.
(a) No payment to the Agent or any Lender (whether under any
judgment or court order or otherwise) shall discharge the obligation or
liability in respect of which it was made unless and until the Agent or
such Lender shall have received payment in full in the currency in which
such obligation or liability was incurred, and to the extent that the
amount of any such payment shall, on actual conversion into such
currency, fall short of such obligation or liability, actual or
contingent, expressed in that currency, the Domestic Borrowers or, with
respect to the Canadian Obligations only, the Canadian Borrower, shall
indemnify and reimburse the Agent or such Lender, as the case may be,
with respect to the amount of the shortfall.
(b) If, for the purpose of obtaining judgment in any court it is
necessary to convert a sum due hereunder in one currency (the "first
currency") into any other currency (the "second currency") the
conversion shall be made at the spot rate of exchange of the Agent (as
conclusively determined by the Agent absent manifest error) on the
Business Day preceding the day on which the final judgment is given. If,
however, on the Business Day following receipt by the Agent in the
second currency of any sum adjudged to be due hereunder (or any
proportion thereof) the Agent purchases the first currency with the
amount
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of the second currency so received and the first currency so purchased
falls short of the sum originally due hereunder in the first currency
(or the same proportion thereof) the applicable Borrowers, shall, as a
separate obligation and notwithstanding any judgment, pay to the Agent
in the first currency an amount equal to such shortfall.
7. COLLATERAL SECURITY; COLLATERAL NOTES.
7.1. SECURITY OF DOMESTIC BORROWERS. The Obligations shall be secured by
(a) a perfected first priority security interest (subject to Permitted Liens
entitled to priority under applicable law) in all assets of each Domestic
Borrower, whether now owned or hereafter acquired, pursuant to the terms of the
Domestic Security Documents to which each Domestic Borrower is a party; (b) a
pledge of 100% of the capital stock or other equity interests of the Domestic
Borrowers (other than DBI) to the Agent for the benefit of the Lenders pursuant
to the Securities Pledge Agreement to secure the Obligations; and (c) a
first-priority pledge of 66% of the capital stock or other Equity Interests of
the Canadian Borrower to the Agent for the benefit of the Domestic Lenders
pursuant to the Securities Pledge Agreement to secure the Domestic Obligations;
provided that (i) the Mortgage by and among DBI and the other parties thereto
with respect to the Real Estate located at 7025 Salisbury Road, Jacksonville,
Florida shall secure only the Obligations under the Collateral Note referred to
in such Mortgage and (ii) the Mortgage by and among DBI and the other parties
thereto with respect to the Real Estate located at 3000 Oakwood Blvd.,
Hollywood, Florida 33020 shall secure only the Obligations under the Collateral
Note referred to in such Mortgage.
7.2. SECURITY OF CANADIAN BORROWER. The Canadian Obligations shall be
secured by a perfected first-priority interest (subject to the liens described
on Schedule 10.2, the liens permitted pursuant to Section 10.2(g) and Permitted
Liens entitled to priority under applicable law) in all assets of the Canadian
Borrower whether now owned or hereafter acquired, pursuant to the terms of the
Canadian Security Documents to which the Canadian Borrower is a party. The
Canadian Obligations shall also be guaranteed by the Domestic Borrowers and such
Guaranty shall be secured as provided in Section 7.1 and shall also be secured
by a first-priority pledge of 34% of the capital stock or other Equity Interests
of the Canadian Borrower to the Agent for the benefit of the Canadian Lenders
pursuant to the Securities Pledge Agreement and a second-priority pledge of 66%
of the capital stock or other Equity Interests of the Canadian Borrower to the
Agent for the benefit of the Canadian Lenders pursuant to the Securities Pledge
Agreement.
7.3. COLLATERAL NOTES. In addition to the Term A Notes, the Revolving
Credit Notes and the Canadian Notes, each of the Borrowers agrees that with
respect to any of the Real Estate to be mortgaged by it or any of its
Subsidiaries hereunder, it will execute and deliver or cause such Subsidiary to
execute and deliver to the Agent such collateral notes (the "Collateral Notes")
in such form as the Agent and the Borrowers may from time to time agree. The
parties hereto hereby agree that (a) the aggregate amount of the Outstanding
Obligations shall not be increased by the issuance of the Collateral Notes and
(b) any payment or recovery on the Collateral Notes shall be applied to the
Obligations pursuant to Section 14.4. All Collateral Notes shall be payable to
the order of the Agent, on demand; provided that the Agent hereby agrees that it
shall not demand payment on any Collateral Note unless the Obligations shall
have become immediately due and payable pursuant to Section 14.1.
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8. REPRESENTATIONS AND WARRANTIES.
The Borrowers represent and warrant to each of the Lenders and the Agent
as follows:
8.1. CORPORATE AUTHORITY.
8.1.1. INCORPORATION; GOOD STANDING. Each of the Borrowers and
each of their Subsidiaries (i) is a corporation or limited partnership duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or formation, (ii) has all requisite corporate or
limited partnership power to own or lease its property as the case may be and
conduct its business as now conducted and as presently contemplated, and (iii)
is in good standing as a foreign corporation or limited partnership and is duly
authorized to do business in each jurisdiction where such qualification is
necessary except where a failure to be so qualified would not have a materially
adverse effect on the business, assets or financial condition of such Borrower
or such Subsidiary.
8.1.2. AUTHORIZATION. The execution, delivery and performance
of this Credit Agreement and the other Loan Documents to which each of the
Borrowers or any of their Subsidiaries is or is to become a party and the
transactions contemplated hereby and thereby (i) are within the corporate or
limited partnership authority of such Person, (ii) have been duly authorized by
all necessary corporate or limited partnership proceedings, (iii) do not
conflict with or result in any breach or contravention of any provision of law,
statute, rule or regulation to which any of the Borrowers or any of their
Subsidiaries is subject or any judgment, order, writ, injunction, license or
permit applicable to any of the Borrowers or any of their Subsidiaries and (iv)
do not conflict with any provision of the corporate charter or bylaws or other
organizational documents of, or any agreement or other instrument binding upon,
any of the Borrowers or any of their Subsidiaries.
8.1.3. ENFORCEABILITY. The execution and delivery of this
Credit Agreement and the other Loan Documents to which any of the Borrowers or
any of their Subsidiaries is or is to become a party will result in valid and
legally binding obligations of such Person enforceable against it in accordance
with the respective terms and provisions hereof and thereof, except as
enforceability is limited by bankruptcy, insolvency, reorganization, moratorium
or other laws relating to or affecting generally the enforcement of creditors'
rights and except to the extent that availability of the remedy of specific
performance or injunctive relief is subject to the discretion of the court
before which any proceeding therefore may be brought.
8.2. GOVERNMENTAL APPROVALS. The execution, delivery and performance by
each of the Borrowers and their Subsidiaries of this Credit Agreement and the
other Loan Documents to which each is or is to become a party and the credit
transactions contemplated hereby and thereby do not require the approval or
consent of, or filing with, any governmental agency or authority other than
those already obtained.
8.3. TITLE TO PROPERTIES; LEASES. Attached hereto as Schedule 8.3 is a
complete list of Real Estate owned or leased by the Borrowers or any of their
Subsidiaries. The Borrowers and their Subsidiaries own or lease all of the
assets reflected in the consolidated balance sheet of the Borrowers and their
Subsidiaries as at the Balance Sheet Date or acquired since that date (except
property and assets sold or otherwise disposed of in the ordinary course of
business since that date), subject to no rights of others, including any
mortgages, leases, conditional sales agreements, title retention agreements,
liens or other encumbrances except Permitted Liens.
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8.4. FINANCIAL STATEMENTS AND PROJECTIONS.
8.4.1. FISCAL YEAR. The Borrowers and their Subsidiaries have a
fiscal year that ends on the Sunday after the Saturday closest to January 31 of
each calendar year. The term "Fiscal Year XXXX", where "XXXX" is a calendar
year, shall refer to the fiscal year of the Borrowers and their Subsidiaries
ending during such calendar year.
8.4.2. FINANCIAL STATEMENTS. There has been furnished to each
of the Lenders (a) a consolidated balance sheet of the Borrowers and their
Subsidiaries as at the Balance Sheet Date, and a consolidated statement of
income of the Borrower and its Subsidiaries for the fiscal year then ended,
certified by Ernst & Young LLP, and (b) unaudited balance sheets and statements
of income and cash flow for that portion of the fiscal year ending on August 3,
2003. Such financial statements described in the preceding sentence have been
prepared in accordance with GAAP and fairly present the financial condition of
the Borrowers and their Subsidiaries as at the close of business on the date
thereof and the results of operations for the fiscal period then ended subject
to year end adjustments in the case of interim statements. There are no
contingent liabilities of any of the Borrowers or their Subsidiaries as of such
date involving material amounts, known to the officers of the Borrowers, which
were not disclosed in such balance sheet and the notes related thereto.
8.4.3. PRO FORMA BALANCE SHEET AND PROJECTIONS. The Borrowers
have delivered to the Agent a consolidated pro forma balance sheet as of the
Closing Date reflecting the borrowing hereunder on such date, which pro forma
balance sheet has been prepared in good faith on the basis of the assumptions
stated therein. The projections of the annual operating budgets of the Borrowers
and their Subsidiaries on a consolidated basis, balance sheets and cash flow
statements for the 2004 to 2007 fiscal years, copies of which have been
delivered to each Lender, disclose all material assumptions made with respect to
general economic, financial and market conditions used in formulating such
projections. To the knowledge of any of the Borrowers or their Subsidiaries, no
facts exist that (individually or in the aggregate) would result in any material
change in any of such projections other than facts disclosed to the Agent.
Although the projections are based upon reasonable estimates and assumptions,
have been prepared on the basis of the assumptions stated therein and reflect
the reasonable estimates of the Borrowers and their Subsidiaries of the results
of operations and other information projected therein, the Lenders and the Agent
recognize that the projections are not to be viewed as facts and that actual
results during the period or periods covered by the projections may differ from
the projected results.
8.5. NO MATERIAL CHANGES, ETC. Since the Balance Sheet Date there has
occurred no materially adverse change in the financial condition or business of
the Borrowers and their Subsidiaries as shown on or reflected in the
consolidated balance sheet of the Borrowers and their Subsidiaries as at the
Balance Sheet Date, or the consolidated statement of income for the fiscal year
then ended, other than changes in the ordinary course of business that have not
had any materially adverse effect either individually or in the aggregate on the
business or financial condition of the Borrowers and their Subsidiaries or as
described in Schedule 8.5. Since the Balance Sheet Date, no Borrower has made
any Distribution.
8.6. LAWS, LICENSES; FRANCHISES, PATENTS, COPYRIGHTS, ETC.
8.6.1. LAWS, LICENSES. None of the Borrowers or their
Subsidiaries is in violation of or delinquent with respect to, any decree,
order, or arbitration award of any court or governmental authority, or any
agreement with, or any license or permit from, any governmental authority, or
any statute, law, license, rule or regulation including, without limitation,
laws and regulations relating to food or liquor, occupational health and safety,
privacy and collection of personal information, equal employment opportunities,
fair employment practices, and sex, race, religious or age discrimination, in
any of the foregoing cases in a manner that could reasonably be expected to
result in the imposition of substantial
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penalties or materially and adversely affect the financial condition, properties
or business of the Borrowers and their Subsidiaries taken as a whole. Except as
set forth on Schedule 8.6.1, any and all approvals by any federal, state,
provincial or local liquor authority necessary for the continued operation of
any restaurant operated by any of the Borrowers or their Subsidiaries with full
liquor service have been received and remain in full force and effect.
8.6.2. FRANCHISES, PATENTS, COPYRIGHTS, ETC. Except as set
forth on Schedule 8.6.2, each of the Borrowers and their Subsidiaries possesses
all franchises, patents, copyrights, trademarks, trade names, licenses and
permits, and rights in respect of the foregoing, adequate for the conduct of the
business of the Borrowers and their Subsidiaries, substantially as such business
is now conducted without known conflict with any rights of others.
8.7. LITIGATION. Except as set forth in Schedule 8.7 hereto, there are
no actions, suits, proceedings or investigations of any kind pending or
threatened against any of the Borrowers or their Subsidiaries before any court,
tribunal or administrative agency or board that, if adversely determined, might,
either in any case or in the aggregate, materially adversely affect the
properties, assets, financial condition or business of the Borrowers and their
Subsidiaries or materially impair the right of the Borrowers and their
Subsidiaries, taken as a whole, to carry on business substantially as now
conducted by them, or result in any substantial liability not adequately covered
by insurance, or for which adequate reserves are not maintained on the
consolidated balance sheet of the Borrowers and their Subsidiaries, or which
question the validity of this Credit Agreement or any of the other Loan
Documents, or any action taken or to be taken pursuant hereto or thereto.
8.8. NO MATERIALLY ADVERSE CONTRACTS, ETC. None of the Borrowers or
their Subsidiaries is subject to any charter, corporate or other legal
restriction, or any judgment, decree, order, rule or regulation that has or
could reasonably be expected in the future to have a materially adverse effect
on the business, assets or financial condition of the Borrowers and their
Subsidiaries. None of the Borrowers or their Subsidiaries is a party to any
contract or agreement that has or is, in the judgment of the Borrowers'
officers, to have any materially adverse effect either individually or in the
aggregate on the business of the Borrowers and their Subsidiaries.
8.9. COMPLIANCE WITH OTHER INSTRUMENTS, ETC. None of the Borrowers or
their Subsidiaries is in violation of any provision of its charter documents,
bylaws, or any agreement or instrument to which it may be subject or by which it
or any of its properties may be bound or any decree, order, judgment, statute,
license, rule or regulation, in any of the foregoing cases in a manner that
could result in the imposition of substantial penalties or materially and
adversely affect the financial condition, properties or business of the
Borrowers and their Subsidiaries.
8.10. TAX STATUS. Each of the Borrowers and their Subsidiaries (i) has
made or filed all federal and state income and all Canadian federal, provincial
or territorial income and all other tax returns, reports and declarations
required by any jurisdiction to which it is subject, (ii) has paid all taxes and
other governmental assessments and charges shown or determined to be due on such
returns, reports and declarations when due, except those being contested in good
faith and by appropriate proceedings and (iii) has set aside on its books
provisions reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations apply.
There are no unpaid taxes in any material amount claimed to be due by the taxing
authority of any jurisdiction, and the officers of the Borrowers know of no
basis for any such claim. The Borrowers do not intend to treat the Loans,
Letters of Credit and/or related transactions hereunder as being a "reportable
transaction" (within the meaning of Treasury Regulation Section 1.6011-4).
8.11. NO EVENT OF DEFAULT. No Default or Event of Default has occurred
and is continuing.
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8.12. HOLDING COMPANY AND INVESTMENT COMPANY ACTS. None of the Borrowers
and their Subsidiaries is a "holding company", or a "subsidiary company" of a
"holding company", or an "affiliate" of a "holding company", as such terms are
defined in the Public Utility Holding Company Act of 1935; nor is it an
"investment company", or an "affiliated company" or a "principal underwriter" of
an "investment company", as such terms are defined in the Investment Company Act
of 1940.
8.13. ABSENCE OF FINANCING STATEMENTS; PERFECTION OF SECURITY INTERESTS.
Except with respect to Permitted Liens, there is no financing statement,
security agreement, chattel mortgage, real estate mortgage or other document
filed or recorded with any filing records, registry or other public office, that
purports to cover, affect or give notice of any present or possible future lien
on, or security interest in, any assets or property of any of the Borrowers or
their Subsidiaries or any rights relating thereto. All filings, assignments,
pledges and deposits of documents or instruments have been made and all other
actions have been taken that are necessary or advisable, under applicable law,
to establish and perfect the Agent's security interest in the Collateral. The
Collateral and the Agent's rights with respect to the Collateral are not subject
to any setoff, claims, withholdings or other defenses. The Borrowers are the
owners of the Collateral free from any lien, security interest, encumbrance and
any other claim or demand, except for Permitted Liens.
8.14. EMPLOYEE BENEFIT PLANS.
8.14.1. IN GENERAL. Each Employee Benefit Plan has been
maintained and operated in compliance in all material respects with the
provisions of ERISA and/or all Applicable Canadian Pension Legislation, as
applicable, and, to the extent applicable, the Code, including but not limited
to the provisions thereunder respecting prohibited transactions and the bonding
of fiduciaries and other persons handling plan funds as required by Section 412
of ERISA.
8.14.2. TERMINABILITY OF WELFARE PLANS. Except as set forth in
Schedule 8.14.2, (a) no Employee Benefit Plan maintained or contributed to by
the Borrowers or their Subsidiaries which is an employee welfare benefit plan
within the meaning of Section 3(1) or Section 3(2)(B) of ERISA, provides benefit
coverage subsequent to termination of employment, except as required by Title I,
Part 6 of ERISA or the applicable state insurance laws and (b) the Borrowers, or
their Subsidiaries, as the case may be, may terminate each such Plan at any time
(or at any time subsequent to the expiration of any applicable bargaining
agreement) in the discretion of the Borrowers or their Subsidiaries without
liability to any Person other than for claims arising prior to termination.
8.14.3. GUARANTEED PENSION PLANS. No Borrower or any of its
Subsidiaries maintains or contributes to any Guaranteed Pension Plan.
8.14.4. MULTIEMPLOYER PLANS. No Borrower or any of its
Subsidiaries maintains or contributes to any Multiemployer Plan.
8.14.5. CANADIAN PLANS. All contributions or premiums to be
paid by the Canadian Borrower and its Subsidiaries under the terms of each
Canadian Plan or by applicable law have been made in a timely fashion in
accordance in all material respects with applicable law and the terms of the
Canadian Plans, and each Canadian Plan (other than government sponsored Canadian
Plans) has been registered, administered, and invested in accordance with its
terms and applicable law in all material respects. The Canadian Borrower and its
Subsidiaries may unilaterally amend or terminate, in whole or in part, each of
their Canadian Plans (other than government sponsored Canadian Plans). As of the
date hereof, neither the aggregate going concern unfunded liability nor the
aggregate solvency deficiency in respect of all the Canadian Plans which are
funded plans, determined pursuant to the actuarial assumptions and methodology
utilized in the most recent actuarial
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valuations therefore, exceeds the Canadian Dollar Equivalent of $250,000. The
Canadian Borrower and its Subsidiaries have delivered to the Agent such
valuations for each funded Canadian Plan.
8.15. USE OF PROCEEDS.
8.15.1. GENERAL. The proceeds of the Loans shall be used to
refinance Indebtedness under the Former Credit Agreement, the acquisition,
construction and upgrade of Units and for working capital and general corporate
purposes. The Borrowers will obtain Letters of Credit solely for working capital
and general corporate purposes.
8.15.2. REGULATIONS U AND X. No portion of any Loan is to be
used, and no portion of any Letter of Credit is to be obtained, for the purpose
of purchasing or carrying any "margin security" or "margin stock" as such terms
are used in Regulations U and X of the Board of Governors of the Federal Reserve
System, 12 C.F.R. Parts 221 and 224.
8.15.3. INELIGIBLE SECURITIES. No portion of the proceeds of
any Loans is to be used, and no portion of any Letter of Credit is to be
obtained, for the purpose of knowingly purchasing, or providing credit support
for the purchase of, during the underwriting or placement period, or within
thirty (30) days thereafter any Ineligible Securities being underwritten or
privately placed by a Financial Affiliate.
8.16. DISCLOSURE. Neither this Credit Agreement, nor any of the other
Loan Documents, nor any other written information provided to the Lenders by any
Borrower or any of the Borrowers' Subsidiaries contains any untrue statement of
a material fact or omits to state a material fact (known to any of the Borrowers
or their Subsidiaries in the case of any document or information not furnished
by it or any of its Subsidiaries) necessary in order to make the statements
herein or therein not misleading. There is no fact known to any of the Borrowers
or their Subsidiaries which materially adversely affects, or which could
reasonably be expected to materially adversely affect, the business, assets,
financial condition or prospects of the Borrowers and their Subsidiaries taken
as a whole, exclusive of effects resulting from changes in general economic
conditions, legal standards or regulatory conditions.
8.17. ENVIRONMENTAL COMPLIANCE. The Borrowers have taken all necessary
steps to investigate the past and present condition and usage of the Real Estate
and the operations conducted thereon and, based upon such diligent
investigation, have determined that:
(a) none of the Borrowers, their Subsidiaries or any operator of
the Real Estate or any operations thereon is in violation, or alleged
violation, of any judgment, decree, order, law, license, rule or
regulation pertaining to environmental matters, including without
limitation, those arising under the Resource Conservation and Recovery
Act ("RCRA"), the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 as amended ("CERCLA"), the Superfund Amendments
and Reauthorization Act of 1986 ("SARA"), the Federal Clean Water Act,
the Federal Clean Air Act, the Toxic Substances Control Act, or any
state or local or Canadian federal or provincial statute, regulation,
ordinance, order or decree relating to health, safety or the environment
(hereinafter "Environmental Laws"), which violation would have a
material adverse effect on the environment or the business, assets or
financial condition of the Borrowers and their Subsidiaries;
(b) none of the Borrowers or their Subsidiaries has received
notice from any third party including, without limitation, any federal,
state or local governmental authority, (i) that any one of them has been
identified by the United States Environmental Protection Agency ("EPA")
as a potentially responsible party under CERCLA with respect to a site
listed on the National Priorities List, 40 C.F.R. Part 300 Appendix B;
(ii) that any hazardous waste, as defined by 42
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U.S.C. Section 6903(5), any hazardous substances as defined by 42 U.S.C.
Section 9601(14), any pollutant or contaminant as defined by 42 U.S.C.
Section 9601(33) and any toxic substances, oil or hazardous materials or
other chemicals or substances regulated by any Environmental Laws
("Hazardous Substances") which any one of them has generated,
transported or disposed of has been found at any site at which a
federal, state, provincial or local agency or other third party has
conducted or has ordered that any of the Borrowers or their Subsidiaries
conduct a remedial investigation, removal or other response action
pursuant to any Environmental Law; or (iii) that it is or shall be a
named party to any claim, action, cause of action, complaint, or legal
or administrative proceeding (in each case, contingent or otherwise)
arising out of any third party's incurrence of costs, expenses, losses
or damages of any kind whatsoever in connection with the release of
Hazardous Substances;
(c) except as set forth on Schedule 8.17 attached hereto: (i) no
portion of the Real Estate has been used for the handling, processing,
storage or disposal of Hazardous Substances except in accordance with
applicable Environmental Laws; and no underground tank or other
underground storage receptacle for Hazardous Substances is located on
any portion of the Real Estate; (ii) in the course of any activities
conducted by the Borrowers, their Subsidiaries or operators of its
properties, no Hazardous Substances have been generated or are being
used on the Real Estate except in accordance with applicable
Environmental Laws; (iii) there have been no releases (i.e. any past or
present releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, disposing or dumping) or
threatened releases of Hazardous Substances on, upon, into or from the
properties of any of the Borrowers or their Subsidiaries, which releases
would have a material adverse effect on the value of any of the Real
Estate or adjacent properties or the environment; (iv) to the best of
the Borrowers' knowledge, there have been no releases on, upon, from or
into any real property in the vicinity of any of the Real Estate which,
through soil or groundwater contamination, may have come to be located
on, and which would have a material adverse effect on the value of, the
Real Estate; and (v) in addition, any Hazardous Substances that have
been generated on any of the Real Estate have been transported offsite
in compliance with applicable Environmental Law, treated or disposed of
only by treatment or disposal facilities maintaining valid permits as
required under applicable Environmental Laws, which transporters and
facilities have been and are, to the best of the Borrowers' knowledge,
operating in compliance with such permits and applicable Environmental
Laws; and
(d) none of the Borrowers, their Subsidiaries, any Mortgaged
Property or any of the other Real Estate is subject to any applicable
Environmental Law requiring the performance of Hazardous Substances
site assessments, or the removal or remediation of Hazardous
Substances, or the giving of notice to any governmental agency or the
recording or delivery to other Persons of an environmental disclosure
document or statement by virtue of the transactions set forth and
contemplated in the Loan Documents, or as a condition to the recording
of any Mortgage or to the effectiveness of any other transactions
contemplated hereby.
8.18. SUBSIDIARIES, ETC. Schedule 8.18, as such Schedule 8.18 may be
updated from time to time in accordance with the provisions of Section 9.16,
lists all Subsidiaries of each Borrower. Except as set forth on Schedule 8.18
hereto and except for joint ventures with game manufacturers with respect to the
sharing of revenue from games manufactured by such Persons entered into in the
ordinary course of business, none of the Borrowers or their Subsidiaries is
engaged in any joint venture or partnership with any other Person.
8.19. LEASES. The execution, delivery and performance of this Credit
Agreement or the other Loan Documents to which the Borrowers or any of their
Subsidiaries is a party (including a pledge by the
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Borrowers to the Agent of all the Equity Interests of the Borrowers and the
realization by the Agent on such pledge), will not create a default under any
Real Estate Lease under which the Borrowers or any of their Subsidiaries is
presently a lessee or sublessee which default is likely to have a materially
adverse effect on the business or financial condition of the Borrowers and their
Subsidiaries, taken as a whole.
8.20. SOLVENCY. Both before and after giving effect to this Credit
Agreement and the other Loan Documents, all of the Borrowers and their
Subsidiaries on a consolidated basis are Solvent. As used herein, "Solvent"
shall mean that the Borrowers and their Subsidiaries (i) have assets having a
fair value in excess of their liabilities, (ii) have assets having a fair value
in excess of the amount required to pay their liabilities on existing debts as
such debts become absolute and matured, and (iii) have, and expect to continue
to have, access to adequate capital for the conduct of their business and the
ability to pay their debts from time to time incurred in connection with the
operation of their business as such debts mature.
8.21. CERTAIN TRANSACTIONS. Except for arm's length transactions
pursuant to which any of the Borrowers or their Subsidiaries makes payments in
the ordinary course of business upon terms no less favorable than such Borrower
or such Subsidiary could obtain from third parties, none of the officers,
directors, or employees of any of the Borrowers or their Subsidiaries is
presently a party to any transaction with any of the Borrowers or their
Subsidiaries (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Borrowers, any
corporation, partnership, trust or other entity in which any officer, director,
or any such employee has a substantial interest or is an officer, director,
trustee or partner.
8.22. BANK ACCOUNTS. Schedule 8.22 sets forth the account numbers and
location of all bank accounts of the Borrowers and their Subsidiaries.
8.23. FOREIGN ASSETS CONTROL REGULATIONS, ETC. None of the requesting or
borrowing of the Loans, the requesting or issuance, extension or renewal of any
Letters of Credit or the use of the proceeds of any thereof will violate the
Trading With the Enemy Act (50 U.S.C. Section 1 et seq., as amended) (the
"Trading With the Enemy Act") or any of the foreign assets control regulations
of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as
amended) (the "Foreign Assets Control Regulations") or any enabling legislation
or executive order relating thereto (which for the avoidance of doubt shall
include, but shall not be limited to (a) Executive Order 13224 of September 21,
2001 Blocking Property and Prohibiting Transactions With Persons Who Commit,
Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)) (the
"Executive Order") and (b) the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001
(Public Law 107-56)). Furthermore, none of the Borrowers nor any of their
Subsidiaries or other Affiliates (a) is or will become a "blocked person" as
described in the Executive Order, the Trading With the Enemy Act or the Foreign
Assets Control Regulations or (b) engages or will engage in any dealings or
transactions, or be otherwise associated, with any such "blocked person".
8.24. UNITS. Schedule 8.24 sets forth, as of the Closing Date, (a) the
names and addresses of each Unit and identifies, as of the Closing Date, which
of those Units are operated under a franchise agreement between a Borrower as
franchisor and a franchisee and (b) the names and addresses of each restaurant
and/or entertainment center operating under D&B License Agreements.
8.25. FRANCHISE AGREEMENTS. The Borrowers have delivered to the Agent
true and complete copies of any franchise agreements and D&B License Agreements
to which the Borrowers or any of the Borrowers' Subsidiaries is party.
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8.26. STATUS OF LOANS AS SENIOR DEBT. All Indebtedness of DBI and each
of its Subsidiaries to the Lenders and the Agent in respect of the Obligations
constitutes "Designated Senior Debt" under the terms of the Subordinated Debt
Documents.
8.27. NO OTHER SENIOR DEBT. DBI has not designated any Indebtedness of
the Borrowers or any of their Subsidiaries as, and has no, "Designated Senior
Debt" for purposes of (and as defined in) the Subordinated Indenture, other than
the Obligations.
8.28. LABOR RELATIONS.
(a) No Borrower is a party to a collective bargaining or other
labor contract.
(b) As of the date hereof, there are not pending or, to the
knowledge of the Borrowers threatened, any of the following:
(i) Any strike, slowdown, picketing, work stoppage, or
employee grievance process;
(ii) Any proceeding before any governmental authority or
arbitrator against or affecting such Person relating to
its legal relationships with its employees, including,
but not limited to, those relating to employment,
employment standards, labor standards, labor or
industrial relations, termination of employment, human
rights, pay equity, equal employment opportunity,
nondiscrimination, immigration, wages, hours, vacation,
benefits, termination of benefits, collective
bargaining, the payment of social security and similar
taxes, employer health tax, employment insurance, the
Canada Plans, occupational safety and health, workplace
safety and insurance, workers compensation, plant
closing and organizational activity, or any other labor
or employment dispute against or affecting such Person,
which if determined adversely to such Person could have
more than a de minims adverse effect on such Person;
(iii) Any lockout of any employees by any Borrower (and
no such action is contemplated by such Person);
(iv) An application for the certification of a
collective bargaining agent.
(c) To the knowledge of each Borrower, no event has occurred or
circumstances exist which could provide the basis for any work stoppage
or other labor dispute.
(d) Each Borrower:
(i) has complied in all material respects with all
applicable law relating to its legal relationships with
employees, including, but not limited to, those relating
to employment, employment standards, labor standards,
labor or industrial relations, termination of
employment, human rights, pay equity, equal employment
opportunity, nondiscrimination, immigration, wages,
hours, vacation, benefits, termination of benefits,
collective bargaining, the payment of social security
and similar taxes, employer health tax, employment
insurance, pension plan, occupational safety and health,
workplace safety and insurance, workers compensation,
and plant closing;
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(ii) is not liable for the payment of more than a de
minimis amount of compensation, damages, taxes,
penalties or other amounts, however designated, for such
Person's failure to comply with any applicable law.
9. AFFIRMATIVE COVENANTS.
Each of the Borrowers covenants and agrees that, so long as any Loan,
Unpaid Reimbursement Obligation, Letter of Credit or Note is Outstanding or any
Lender has any obligation to make any Loans, or the Agent has any obligation to
issue, extend or renew any Letters of Credit:
9.1. PUNCTUAL PAYMENT. The Borrowers will duly and punctually pay or
cause to be paid the principal and interest on the Loans, all Reimbursement
Obligations, the Letter of Credit Fees, Fronting Fees, the Commitment Fees and
all other fees or other amounts provided for in this Credit Agreement and the
other Loan Documents to which any of the Borrowers or their Subsidiaries is a
party, all in accordance with the terms of this Credit Agreement and such other
Loan Documents.
9.2. MAINTENANCE OF OFFICE. Each of the Borrowers will maintain its
chief executive office at the location identified in the Perfection Certificate
delivered by it pursuant to the Security Agreement, or at such other place in
the United States of America or Canada as such Borrower shall designate upon
written notice to the Agent, where notices, presentations and demands to or upon
such Borrower in respect of the Loan Documents to which such Borrower is a party
may be given or made.
9.3. RECORDS AND ACCOUNTS. Each of the Borrowers will (i) keep, and
cause each of its Subsidiaries to keep, true and accurate records and books of
account in which full, true and correct entries will be made in accordance with
GAAP, (ii) maintain adequate accounts and reserves for all taxes (including
income taxes), depreciation, depletion, obsolescence and amortization of its
properties and the properties of its Subsidiaries, contingencies, and other
reserves, and (iii) at all times engage Ernst & Young LLP or other independent
certified public accountants of nationally recognized standing or such other
public accountants satisfactory to the Agent as the independent certified public
accountants of the Borrowers and their Subsidiaries and will not permit more
than thirty (30) days to elapse between the cessation of such firm's (or any
successor firm's) engagement as the independent certified public accountants of
the Borrowers and their Subsidiaries and the appointment in such capacity of a
successor firm.
9.4. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. The Borrowers
will deliver to each of the Lenders:
(a) as soon as practicable, but in any event not later than
ninety (90) days after the end of each fiscal year of the Borrowers and
their Subsidiaries, the consolidated balance sheet of the Borrowers and
their Subsidiaries, as at the end of such year, and the related
consolidated statement of income and consolidated statement of cash flow
for such year, each setting forth in comparative form the figures for
the previous fiscal year and all such consolidated statements to be in
reasonable detail, prepared in accordance with GAAP, and certified
without qualification and without an expression of uncertainty as to the
ability of any Borrower or any of their Subsidiaries to continue as a
going concern, by Ernst & Young LLP or by other independent certified
public accountants of nationally recognized standing or other
independent certified public accounts satisfactory to the Agent;
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(b) as soon as practicable, but in any event not later than
forty-five (45) days after the end of each of the fiscal quarters of the
Borrowers and their Subsidiaries, copies of the unaudited consolidated
balance sheet of the Borrowers and their Subsidiaries as at the end of
such quarter, the related consolidated statement of income and
consolidated statement of cash flow for the portion of the such Persons'
fiscal year then elapsed and detailed income statements on an individual
Unit-by-Unit basis for each Unit operated by a Borrower or a Borrower's
Subsidiary, all in reasonable detail and prepared in accordance with
GAAP, together with a certification by the principal financial or
accounting officer of the Borrowers that the information contained in
such consolidated financial statements fairly presents the financial
position of the Borrowers and their Subsidiaries on the date thereof
(subject to year-end adjustments);
(c) as soon as practicable, but in any event within thirty (30)
days after the end of each month in each fiscal year of the Borrowers
and their Subsidiaries, financial statements in the form attached hereto
as Exhibit F, prepared in accordance with GAAP, together with a
certification by the principal financial or accounting officer of the
Borrowers that the information contained in such financial statements
fairly presents the financial condition of the Borrowers and their
Subsidiaries on the date thereof (subject to year-end adjustments);
(d) simultaneously with the delivery of the financial statements
referred to in subsections (a) and (b), a statement certified by the
principal financial or accounting officer of the Borrowers in
substantially the form of Exhibit D hereto (a "Compliance Certificate")
and setting forth in reasonable detail computations evidencing
compliance with the covenants contained in Section 11 and (if
applicable) reconciliations to reflect changes in GAAP since the Balance
Sheet Date;
(e) contemporaneously with the filing, mailing or release
thereof, copies of all material of a financial nature filed with the
Securities and Exchange Commission or sent to the stockholders of the
Borrowers and copies of all press releases;
(f) from time to time upon request of the Agent, but no more
frequently than once per year, projections of the Borrowers and their
Subsidiaries updating those projections delivered to the Lenders and
referred to in Section 8.4.3 or, if applicable, updating any later such
projections delivered in response to a request pursuant to this Section
9.4(f); and
(g) from time to time such other financial data and information
(including accountants' management letters) as the Agent may reasonably
request, including, without limitation, a written statement from the
accountants described in Section 9.4(a) as to whether they have obtained
any knowledge of a Default or Event of Default in making the examination
described herein.
9.5. NOTICES.
9.5.1. DEFAULTS. Each of the Borrowers will promptly notify the
Agent in writing of the occurrence of any Default or Event of Default. If any
Person shall give any notice or take any other action in respect of a claimed
default (whether or not constituting an Event of Default) under this Credit
Agreement or any other note, evidence of indebtedness, indenture or other
obligation to which or with respect to which any of the Borrowers or their
Subsidiaries is a party or obligor, whether as principal, guarantor, surety or
otherwise, the Borrowers shall forthwith give written notice thereof to the
Agent, describing the notice or action and the nature of the claimed default.
9.5.2. ENVIRONMENTAL EVENTS. Each of the Borrowers will
promptly give notice to the Agent (i) of any violation of any Environmental Law
that any of the Borrowers or their Subsidiaries
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reports in writing or is reportable by such Person in writing (or for which any
written report supplemental to any oral report is made) to any federal, state,
provincial or local environmental agency, and (ii) upon becoming aware thereof,
of any inquiry, proceeding, investigation, or other action, including a notice
from any agency of potential environmental liability, of any federal, state,
provincial or local environmental agency or board, that has the potential to
materially affect the assets, liabilities, financial conditions or operations of
any of the Borrowers or their Subsidiaries, or the Agent's mortgages, deeds of
trust or security interests pursuant to the Security Documents.
9.5.3. NOTIFICATION OF CLAIM AGAINST COLLATERAL. Each of the
Borrowers will, immediately upon becoming aware thereof, notify the Agent in
writing of any setoff, claim (including, with respect to the Real Estate,
environmental claims), withholding or other defense to which any material
portion of the Collateral, or the Agent's rights with respect to any material
portion of the Collateral, are subject.
9.5.4. NOTICE OF LITIGATION AND JUDGMENTS. Each of the
Borrowers will, and will cause each of its Subsidiaries to, give notice to the
Agent in writing within fifteen (15) days of becoming aware of any litigation or
proceedings threatened in writing or any pending litigation and proceedings
affecting the Borrowers or any of their Subsidiaries or to which any of the
Borrowers or their Subsidiaries is or becomes a party involving an uninsured
claim against any of the Borrowers or their Subsidiaries that could reasonably
be expected to have a materially adverse effect on the Borrowers and their
Subsidiaries and stating the nature and status of such litigation or
proceedings. Each of the Borrowers will, and will cause each of its Subsidiaries
to, give notice to the Agent, in writing, in form and detail satisfactory to the
Agent, within ten (10) days of any judgment not covered by insurance, final or
otherwise, against any of the Borrowers or their Subsidiaries in an amount in
excess of $250,000.
9.5.5. NOTICE OF FRANCHISE AGREEMENTS. Each of the Borrowers
will, and will cause each of its Subsidiaries to, give notice to the Agent in
writing within fifteen (15) days of any such Person entering into or modifying
any material provisions relating to compensation, term or advertising
requirements under franchise agreement with any franchisee.
9.5.6. NOTICES CONCERNING TAX TREATMENT. In the event the
Borrowers determine to take any action inconsistent with their intention to not
treat the Loans, Letters of Credit and/or related transactions hereunder as a
"reportable transaction" (within the meaning of Treasury Regulation Section
1.6011-4), they will promptly notify the Agent in writing thereof and will
provide the Agent with a duly completed copy of IRS Form 8886 or any successor
form. The Borrowers acknowledge that one or more of the Lenders may treat their
Loans and/or Letter of Credit Participations as part of a transaction that is
subject to Treasury Regulation Section 1.6011-4 or Section 301.6112-1, and the
Agent and such Lender or Lenders, as applicable, will file such IRS forms and
maintain such lists and other records as they may determine is required by such
Treasury Regulations.
9.6. CORPORATE EXISTENCE; MAINTENANCE OF PROPERTIES. Each of the
Borrowers will do or cause to be done all things necessary to preserve and keep
in full force and effect its corporate or limited partnership existence and
rights and those of its Subsidiaries and will not, and will not cause or permit
any of its Subsidiaries to, convert an unlimited or limited liability company.
Each of the Borrowers (i) will cause all of its properties and those of its
Subsidiaries used or useful in the conduct of its business or the business of
its Subsidiaries to be maintained and kept in good condition, repair and working
order and supplied with all necessary equipment, (ii) will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the judgment of such Borrower may be necessary so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times, and (iii) will, and will cause each of its Subsidiaries to,
continue to engage primarily in the businesses now conducted by them and in
related businesses; provided that nothing in
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this Section 9.6 shall prevent any of the Borrowers from discontinuing the
operation and maintenance of any of its properties or any of those of its
Subsidiaries if such discontinuance is, in the judgment of such Borrower,
desirable in the conduct of its or their business and that do not in the
aggregate materially adversely affect the business of the Borrowers and their
Subsidiaries on a consolidated basis.
9.7. INSURANCE.
9.7.1. REQUIRED INSURANCE. Each of the Borrowers will, and will
cause each of its Subsidiaries to, maintain with financially sound and reputable
insurers insurance with respect to its properties and business against such
casualties and contingencies as shall be in accordance with the general
practices of businesses engaged in similar activities in similar geographic
areas and in amounts, containing such terms, in such forms and for such periods
as may be reasonable and prudent. Without limiting the foregoing, (a) such
insurance shall be in such minimum amounts that such Person will not be deemed a
co-insurer under applicable insurance laws, regulations and policies and
otherwise shall be in such amounts, contain such terms, be in such forms and be
for such periods as may be reasonably satisfactory to the Agent, (b) all such
insurance shall be payable to the Agent as loss payee under a "standard" or "New
York" loss payee clause for the benefit of the Lenders and the Agent and (c)
each such Person will (i) keep all of its physical property insured with
casualty or physical hazard insurance on an "all risks" basis, with broad form
flood coverage if such property is in a "Flood Zone" under FEMA, earthquake
coverage in accordance with the general practices of businesses engaged in
similar activities in similar geographic areas, electronic data processing
coverage, with a full replacement cost endorsement and an "agreed amount" clause
in an amount equal to 100% of the full replacement cost of such property,
subject to aggregate sublimits for flood and earthquake equal to those generally
maintained by businesses engaged in similar activities in similar geographic
areas, (ii) maintain all such workers' compensation or similar insurance as may
be required by law and (iii) maintain, in amounts and with deductibles equal to
those generally maintained by businesses engaged in similar activities in
similar geographic areas, general public liability insurance against claims of
bodily injury, death or property damage occurring, on, in or about the
properties of such Person; business interruption insurance; and product
liability insurance. Each of the Borrowers will, and will cause each of its
Subsidiaries to, maintain insurance on the Mortgaged Properties in accordance
with the terms of the Mortgages.
9.7.2. INSURANCE PROCEEDS. The proceeds of any casualty
insurance in respect of any casualty loss of any of the Collateral shall,
subject to the rights, if any, of other parties with a prior interest in the
property covered thereby, (i) so long as no Event of Default has occurred and is
continuing and to the extent that the amount of such proceeds is less than
$1,000,000, be disbursed to the applicable Borrower for reinvestment in such
Borrower's business or, if not so reinvested within one year after receipt
thereof, for application to the Obligations in accordance with Section 4.4.2 and
(ii) in all other circumstances, be held by the Agent as cash collateral for the
Obligations until the earlier of (A) so long as no Event of Default has occurred
and is continuing, the Agent releases such proceeds to the Borrowers for the
reinvestment in the Borrowers' business in accordance with Section 4.4.2.1 and
otherwise in a manner satisfactory to the Agent or (B) the first anniversary of
the disbursement of such insurance proceeds by the applicable insurer, at which
time such proceeds shall be applied to the Obligations in accordance with
Section 4.4.2.3. The Agent may, so long as no Event of Default has occurred and
is continuing and the Borrower is not required to apply such proceeds to prepay
the Obligations pursuant to Section 4.4.2.1, disburse from time to time all or
any part of such proceeds so held as cash collateral, upon such terms and
conditions as the Agent may reasonably prescribe, for direct application by such
Borrower solely to the repair or replacement of such Borrower's property so
damaged or destroyed or other reinvestment in the Borrowers' business. In the
event that such proceeds have not been reinvested in the Borrowers' business
within twelve (12) months after the earlier to occur of receipt thereof by the
Borrowers or receipt thereof by the Agent, the Agent shall apply all or any part
of such proceeds to the Obligations as provided in Section 4.4.2.
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9.7.3. NOTICE OF CANCELLATION. All policies of insurance shall
provide for at least 30 days prior written notice of cancellation, modification
or nonrenewal to the Agent. In the event of failure by any Borrower to provide
and maintain insurance as herein provided, the Agent may, at its option, provide
such insurance and charge the amount thereof to such Borrower. Each Borrower
shall furnish the Agent with certificates of insurance and policies evidencing
compliance with the foregoing insurance provision.
9.8. TAXES. Each of the Borrowers will, and will cause each of its
Subsidiaries to, duly pay and discharge, or cause to be paid and discharged,
before the same shall become overdue, all taxes, assessments and other
governmental charges imposed upon it and its real properties, sales and
activities, or any part thereof, or upon the income or profits there from, as
well as all claims for labor, materials, or supplies that if unpaid might by law
become a lien or charge upon any of its property; provided that any such tax,
assessment, charge, levy or claim need not be paid if the validity or amount
thereof shall currently be contested in good faith by appropriate proceedings
and if such Borrower or such Subsidiary shall have set aside on its books
adequate reserves with respect thereto; and provided further that each of the
Borrowers and their Subsidiaries will pay all such taxes, assessments, charges,
levies or claims forthwith upon the commencement of proceedings to foreclose any
lien that may have attached as security therefore; and provided further that,
with respect to any contested tax, assessment, charge, levy or claim, the
Borrowers and their Subsidiaries shall furnish a good and sufficient bond or
surety to the extent requested by and as reasonably satisfactory to the Agent.
9.9. INSPECTION OF PROPERTIES AND BOOKS, ETC.
9.9.1. GENERAL. Each of the Borrowers shall permit the Lenders,
if accompanied by the Agent, to visit and inspect any of the properties of any
of the Borrowers or their Subsidiaries, to examine the books of account of the
Borrowers and their Subsidiaries (and to make copies thereof and extracts there
from), and to discuss the affairs, finances and accounts of the Borrowers and
their Subsidiaries with, and to be advised as to the same by, its and their
officers, all at such reasonable times and intervals as the Agent or any Lender
may reasonably request, provided that such visits shall occur no more frequently
than twice per year if no Event of Default has occurred and is continuing. The
Agent shall endeavor to notify the Lenders of any such visit or inspection by
the Agent, and the Lenders shall have the right to participate therein.
9.9.2. ENVIRONMENTAL ASSESSMENTS. If an Event of Default shall
have occurred and be continuing, the Agent may, from time to time, in its
discretion for the purpose of assessing and ensuring the value of any Mortgaged
Property, obtain one or more environmental assessments or audits of such
Mortgaged Property prepared by a hydrogeologist, an independent engineer or
other qualified consultant or expert approved by the Agent to evaluate or
confirm (i) whether any Hazardous Materials are present in the soil or water at
such Mortgaged Property and (ii) whether the use and operation of such Mortgaged
Property complies with all Environmental Laws. Environmental assessments may
include without limitation detailed visual inspections of such Mortgaged
Property including any and all storage areas, storage tanks, drains, dry wells
and leaching areas, and the taking of soil samples, surface water samples and
ground water samples, as well as such other investigations or analyses as the
Agent deems appropriate. For any Mortgaged Property, the Agent may require the
Borrowers to bear the expense of one environmental assessment or audit for such
Mortgaged Property per year.
9.9.3. COMMUNICATIONS WITH ACCOUNTANTS. Each of the Borrowers
authorizes the Lenders, if accompanied by the Agent, to communicate directly
with the Borrowers' independent certified public accountants and authorizes such
accountants to disclose to the Agent any and all financial statements and other
supporting financial documents and schedules including copies of any management
letter with respect to the business, financial condition and other affairs of
any of the Borrowers or their
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Subsidiaries. At the request of the Agent, the Borrowers shall deliver a letter
addressed to such accountants instructing them to comply with the provisions of
this Section 9.9.3.
9.10. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS. Each of
the Borrowers will, and will cause each of its Subsidiaries to, comply with (i)
the applicable laws and regulations wherever its business is conducted,
including all Environmental Laws and the Fair Labor Standards Act, (ii) the
provisions of its charter documents and by-laws, (iii) all agreements and
instruments including insurance policies by which it or any of its properties
may be bound and (iv) all applicable decrees, orders, and judgments. If any
authorization, consent, approval, permit or license from any officer, agency or
instrumentality of any government shall become necessary or required in order
that any of the Borrowers or their Subsidiaries may fulfill any of its
obligations hereunder or any of the other Loan Documents to which such Borrower
or such Subsidiary is a party, such Borrower will, or (as the case may be) will
cause such Subsidiary to, immediately take or cause to be taken all reasonable
steps within the power of such Borrower or such Subsidiary to obtain such
authorization, consent, approval, permit or license and furnish the Agent and
the Lenders with evidence thereof. Without limiting the foregoing, each of the
Borrowers will, and will cause each of its Subsidiaries to, obtain any and all
approvals by any federal, state, provincial or local liquor authority necessary
for the continued operation at all times of any Unit operated by any of the
Borrowers or their Subsidiaries with full liquor service.
9.11. USE OF PROCEEDS. The Borrowers will use the proceeds of the Loans
and the Letters of Credit for the purposes described in Section 8.15.1, and none
other.
9.12. ADDITIONAL MORTGAGED PROPERTY; NOTICE OF LEASES; SURVEYS AND TITLE
INSURANCE. If, after the Closing Date, any of the Borrowers or their
Subsidiaries acquires or leases for a term in excess of five (5) years real
estate, and if such acquired property is not subject to a binding commitment
pursuant to which such property will be subject to a Permitted Sale-Leaseback,
such Borrower shall, or shall cause such Subsidiary to (a) forthwith deliver to
the Agent for the benefit of the Lenders and the Agent a fully executed valid
and enforceable first priority mortgage or deed of trust over such acquired real
estate free and clear of all defects and encumbrances except for Permitted Liens
or (b) use its best efforts forthwith to deliver to the Agent for the benefit of
the Lenders and the Agent a fully executed valid and enforceable first priority
leasehold mortgage over such leased real estate free and clear of all defects
and encumbrances except for Permitted Liens, as applicable, each such mortgage,
leasehold mortgage or deed of trust in form and substance satisfactory to the
Agent, together with title insurance policies, surveys, evidences of insurances
with the Agent named as loss payee and additional insured, legal opinions,
required landlord waivers and consents and other documents and certificates with
respect to such real estate (such policies, surveys, evidence of insurance,
opinions and other documents and certificates referred to in this Section 9.12
as "Real Estate Documentation") as was required for Real Estate of the Borrowers
as of the Closing Date or as otherwise required by the Agent. If, after the
Closing Date, any of the Borrowers or their Subsidiaries leases real estate or
any lease of Real Estate is extended or otherwise modified in any respect, the
applicable Borrower shall, or shall cause the applicable Subsidiary to, use its
best efforts to cause the relevant lessor to execute and deliver a notice of
lease (to the extent that a notice of lease is not already recorded in respect
of such lease) in form meeting all statutory and recording requirements of the
jurisdiction in which the relevant real property is located.
9.13. FURTHER ASSURANCES. Each of the Borrowers will, and will cause
each of its Subsidiaries to, cooperate with the Lenders and the Agent and
execute such further instruments and documents as the Lenders or the Agent shall
reasonably request to carry out to their satisfaction the transactions
contemplated by this Credit Agreement and the other Loan Documents. Upon receipt
of an affidavit of any officer of any Lender as to the loss, theft, destruction
or mutilation of the any Note or other Loan Document, the Borrowers will issue,
in lieu thereof, a replacement Note or other Loan Document in the same principal
amount thereof and otherwise of like tenor.
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9.14. CONDUCT OF BUSINESS; UNITS. Each of the Borrowers will, and will
cause its Subsidiaries to, continue to engage only in the business of owning and
operating entertainment centers in the form operated by the Borrowers on the
Closing Date and in businesses and activities closely related thereto. The
Borrowers shall inform the Agent of any new Unit locations within fifteen (15)
Business Days of entering into a lease for, or otherwise acquiring, the premises
of such Unit.
9.15. BANK ACCOUNTS. On or prior to the Closing Date, each of the
Borrowers will, and will cause each of its Subsidiaries to cause all cash
receipts, checks and cash proceeds of accounts receivable and other Collateral
of the Borrowers and their Subsidiaries to be deposited only into (x) a Domestic
Concentration Account or a Canadian Concentration Account, as applicable or (y)
any account other than a Domestic Concentration Account or Canadian
Concentration Account that is scheduled on Schedule 8.22 ("Other Accounts");
provided that funds in excess of $10,000 in any Other Account shall be
transferred daily on each Business Day to an applicable Domestic Concentration
Account or Canadian Concentration Account, as the case may be. The Agency
Account Agreements relating to the Domestic Concentration Accounts and the
Canadian Concentration Accounts shall provide that at any time following the
occurrence of a Default or an Event of Default, the Agent or the Canadian
Lenders, as applicable, shall be entitled to direct the financial institutions
party thereto to cause all funds of the Domestic Borrowers or the Canadian
Borrower, as the case may be, and their Subsidiaries held in the Domestic
Concentration Accounts or Canadian Concentration Accounts, as the case may be,
at such financial institutions to be transferred immediately and at any time
thereafter to the Agent or the Canadian Lenders, as applicable, to be applied to
the Domestic Obligations or the Canadian Obligations, as applicable, or held as
Collateral, as the Agent or the Canadian Lenders, as applicable, deems
appropriate. The Borrowers shall cause (a) all cash receipts and checks in
excess of $10,000 at each Unit to be deposited into a Domestic Concentration
Account or Canadian Concentration Account, as applicable, or an Other Account
(provided that no Other Account shall retain net funds individually in excess of
$10,000, on at least two separate Business Days during each week (a "week," for
the purposes of this Section 9.15, being deemed to begin at the beginning of
each Monday and end at the end of the following Friday). The Borrowers shall
maintain agency account agreements (the "Agency Account Agreements") with each
financial institution maintaining a Domestic Concentration Account or Canadian
Concentration Account, as the case may be, that is in form and substance
satisfactory to the Agent and the Canadian Lenders, as applicable. The Domestic
Borrowers and the Canadian Borrower shall at all times maintain at least one
Domestic Concentration Account or Canadian Concentration Account, as applicable.
9.16. NEW SUBSIDIARIES. Any new Subsidiary of any Borrower acquired in
connection with any Permitted Acquisition to the extent permitted under Section
10.5.3 or otherwise created shall become a Borrower hereunder and become a party
to the Security Documents by (i) signing a joinder agreement, (ii) signing
allonges to the Revolving Credit Notes and the Term A Notes in form and
substance satisfactory to the Agent, and (iii) providing such other
documentation as the Agent may reasonably request, including, without
limitation, amendments to the Stock Pledge Agreement or new pledge agreements in
substantially the same form, mortgages or deeds of trust required by Section
9.12 above, UCC or PPSA searches, as applicable, and filings, legal opinions and
corporate authorization documentation with respect to such new Subsidiary and
other documentation with respect to the conditions specified in Section 12
hereof, and 100% of the equity interests and assets of each such new Subsidiary
shall be pledged to the Agent for the benefit of the Lenders and the Agent. In
such event, the Agent is hereby authorized by the parties hereto to amend
Schedule 8.18 to include each such new Subsidiary.
10. CERTAIN NEGATIVE COVENANTS.
Each of the Borrowers covenants and agrees that, so long as any Loan,
Unpaid Reimbursement Obligation, Letter of Credit or Note is Outstanding or any
Lender has any obligation to make any Loans, or the Agent has any obligations to
issue, extend or renew any Letters of Credit:
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10.1. RESTRICTIONS ON INDEBTEDNESS. None of the Borrowers will, and none
will permit any of its Subsidiaries to, create, incur, assume, guarantee or be
or remain liable, contingently or otherwise, with respect to any Indebtedness
other than:
(a) Indebtedness to the Lenders and the Agent arising under any
of the Loan Documents;
(b) endorsements for collection, deposit or negotiation and
warranties of products or services, in each case incurred in the
ordinary course of business;
(c) Indebtedness of such Borrower or such Subsidiary in respect
of Rate Protection Agreements entered into in order to hedge interest
rate fluctuations on Indebtedness for borrowed money of the Borrowers or
their Subsidiaries and not for speculative purposes and approved in
advance by the Agent in its reasonable discretion;
(d) Indebtedness under any Capitalized Lease or incurred in
connection with the acquisition after the date hereof of any real or
personal property by such Borrower or such Subsidiary, provided that (a)
the aggregate principal amount of such Indebtedness of the Borrowers and
their Subsidiaries outstanding at any time shall not exceed the
aggregate amount of $13,00,000, (b) the aggregate principal amount of
such Indebtedness of the Borrowers and their Subsidiaries outstanding at
any time that does not constitute a Capitalized Lease of a Unit or a
Capitalized Lease of the Real Estate on which a Unit is located shall
not exceed the aggregate amount of $1,000,000 and (c) no Default or
Event of Default shall exist (i) prior to the incurrence of such
Indebtedness or (ii) as a result of the incurrence of such Indebtedness;
(e) Indebtedness existing on the date hereof and listed and
described on Schedule 10.1 hereto;
(f) Indebtedness of one Domestic Borrower to another then
existing Domestic Borrower; provided that all such intercompany
Indebtedness permitted by this Section 10.1(f), and all instruments
evidencing any thereof, shall be pledged and delivered to the Agent, for
the benefit of the Lenders and the Agent, as security for the
Obligations pursuant to the provisions of the applicable Security
Documents, and the Agent shall have a first priority perfected lien and
security interest therein; provided further that all such intercompany
Indebtedness shall be subordinated to the Obligations on terms
satisfactory to the Agent;
(g) Indebtedness of the Canadian Borrower to a then existing
Domestic Borrower; provided that all such intercompany Indebtedness
permitted by this Section 10.1(g), and all instruments evidencing any
thereof, shall be pledged and delivered to the Agent, for the benefit of
the Canadian Lenders and the Agent, as security for the Canadian
Obligations pursuant to the provisions of the applicable Security
Documents, and the Agent shall have a first priority perfected lien and
security interest therein; provided further that all such intercompany
Indebtedness shall be subordinated to the Canadian Obligations on terms
satisfactory to the Agent and shall be in an aggregate amount not to
exceed $500,000;
(h) Indebtedness consisting of obligations to employees of a
Borrower in respect of employee stock ownership or employee stock option
plans to the extent that such obligations are permitted under Section
10.4;
(i) the Convertible Subordinated Debt; and
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(j) Indebtedness consisting of guaranties or indemnities of
Indebtedness of any Borrower or any of its Subsidiaries described in
clauses (a) through (i) of this Section 10.1.
10.2. RESTRICTIONS ON LIENS AND NEGATIVE PLEDGES.
10.2.1. RESTRICTIONS ON LIENS. None of the Borrowers will, and
none will permit any of its Subsidiaries to, (i) create or incur or suffer to be
created or incurred or to exist any lien, encumbrance, mortgage, pledge, charge,
restriction or other security interest of any kind upon any of its property or
assets of any character whether now owned or hereafter acquired, or upon the
income or profits therefrom; (ii) transfer any of such property or assets or the
income or profits therefrom for the purpose of subjecting the same to the
payment of Indebtedness or performance of any other obligation in priority to
payment of its general creditors; (iii) acquire, or agree or have an option to
acquire, any property or assets upon conditional sale or other title retention
or purchase money security agreement, device or arrangement; (iv) suffer to
exist for a period of more than thirty (30) days after the same shall have been
incurred any Indebtedness or claim or demand against it that if unpaid might by
law or upon bankruptcy or insolvency, or otherwise, be given any priority
whatsoever over its general creditors; or (v) sell, assign, pledge or otherwise
transfer any "receivables" as defined in clause (vii) of the definition of the
term "Indebtedness," with or without recourse; provided that any of the
Borrowers or their Subsidiaries may create or incur or suffer to be created or
incurred or to exist:
(a) liens to secure taxes, assessments and other government
charges in respect of obligations not overdue or liens on properties to
secure claims for labor, material or supplies in respect of obligations
not overdue;
(b) deposits or pledges made in connection with, or to secure
payment of, workmen's compensation, unemployment insurance, old age
pensions or other social security obligations;
(c) liens on properties in respect of judgments or awards that
have been in force for less than the applicable period for taking an
appeal so long as execution is not levied thereunder or in respect of
which such Borrower or such Subsidiary shall at the time in good faith
be prosecuting an appeal or proceedings for review and in respect of
which a stay of execution shall have been obtained pending such appeal
or review;
(d) liens of carriers, warehousemen, mechanics and materialmen,
and other like liens in existence less than 120 days from the date of
creation thereof in respect of obligations not overdue;
(e) encumbrances on Real Estate other than the Mortgaged
Property consisting of easements, rights of way, zoning restrictions,
restrictions on the use of real property and defects and irregularities
in the title thereto, landlord's or lessor's liens under leases to which
any Borrower or a Subsidiary of any Borrower is a party, and other minor
liens or encumbrances none of which in the opinion of the Borrowers
interferes materially with the use of the property affected in the
ordinary conduct of the business of the Borrowers and their
Subsidiaries, which defects do not individually or in the aggregate have
a materially adverse effect on the business of the Borrowers and their
Subsidiaries on a consolidated basis;
(f) liens existing on the date hereof and listed and described
on Schedule 10.2 hereto;
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(g) purchase money security interests in or purchase money
mortgages on real or personal property other than Mortgaged Properties
acquired after the date hereof to secure purchase money Indebtedness of
the type and amount permitted by Section 10.1(d), incurred in connection
with the acquisition of such property, which security interests or
mortgages cover only the real or personal property so acquired, and
liens in respect of Capitalized Leases to the extent such Capitalized
Leases are permitted by Section 10.1(d) and to the extent that such
liens cover only the property subject to such Capitalized Leases;
(h) other liens and encumbrances on each Mortgaged Property as
and to the extent permitted by the Mortgage applicable thereto; and
(i) liens in favor of the Agent for the benefit of the Lenders
and the Agent under the Loan Documents.
10.2.2. RESTRICTIONS ON NEGATIVE PLEDGES AND UPSTREAM
LIMITATIONS. The Borrowers will not, nor will they permit any of their
Subsidiaries to (a) enter into or permit to exist any arrangement or agreement
(excluding the Credit Agreement and the other Loan Documents) which directly or
indirectly prohibits any of the Borrowers or any of their Subsidiaries from
creating, assuming or incurring any Lien upon its properties, revenues or assets
or those of any of their Subsidiaries whether now owned or hereafter acquired,
or (b) enter into any agreement, contract or arrangement (excluding the Credit
Agreement and the other Loan Documents) restricting the ability of any
Subsidiary of the Borrowers to pay or make dividends or distributions in cash or
kind to any of the Borrowers, to make loans, advances or other payments of
whatsoever nature to any of the Borrowers, or to make transfers or distributions
of all or any part of its assets to any of the Borrowers; in each case other
than (i) restrictions on specific assets which assets are the subject of
purchase money security interests to the extent permitted under Section 10.2.1,
and (ii) customary anti-assignment provisions contained in leases and licensing
agreements entered into by any Borrower or any Subsidiary in the ordinary course
of its business.
10.3. RESTRICTIONS ON INVESTMENTS. None of the Borrowers will, and none
will permit any of its Subsidiaries to, make or permit to exist or to remain
Outstanding any Investment except Investments in:
(a) marketable direct or guaranteed obligations of the United
States of America or Canada that mature within one (1) year from the
date of purchase by such Borrower;
(b) demand deposits, certificates of deposit, bankers
acceptances and time deposits of United States or Canadian banks having
total assets in excess of $1,000,000,000 or of any Lender;
(c) securities commonly known as "commercial paper" issued by a
corporation organized and existing under the laws of the United States
of America or any state thereof, Canada or any province thereof, that at
the time of purchase have been rated and the ratings for which are not
less than "P 1" if rated by Moody's Investors Services, Inc., and not
less than "A 1" if rated by Standard and Poor's Ratings Group;
(d) Investments existing on the date hereof and listed on
Schedule 10.3 hereto;
(e) loans, investments and advances by any Borrower in or to
another Borrower to the extent permitted by Section 10.1(f) or (g)
provided that Investments of Domestic Borrowers in the Canadian Borrower
shall not exceed $500,000 at any one time outstanding and unredeemed;
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(f) Investments consisting of Permitted Acquisitions;
(g) Investments by the Borrowers and their Subsidiaries in
respect of any Rate Protection Agreement which is permitted by Section
10.1(c);
(h) Investments consisting of promissory notes received as
proceeds of asset dispositions permitted by Section 10.5.2, provided
that the aggregate value of such promissory notes received in connection
with any such asset disposition shall not exceed 50% of the aggregate
value of the proceeds of such asset disposition; and
(i) Investments consisting of loans and advances to employees in
an aggregate amount not to exceed $500,000 at any time outstanding;
provided that new loans or advances may not be made to employees unless
prior to making any such loan or advance, the Borrowers deliver to the
Agent a certificate signed by a financial officer of the Borrowers
demonstrating that at the time of making such loan or advance the sum of
(i) the Borrowers' cash on hand plus (ii) the amount by which the Total
Revolving Credit Commitment exceeds the sum of (A) the Outstanding
amount of Revolving Credit Loans plus (B) the Maximum Drawing Amount,
plus (C) all Unpaid Reimbursement Obligations exceeds $6,000,000 after
giving effect to any Investments then contemplated to be made under this
Section 10.3(i) and any Revolving Credit Loans to be advanced to finance
such Investment;
provided, however, that, with the exception of demand deposits referred to in
Section 10.3(b) and loans and advances referred to in Section 10.3(i), such
Investments will be considered Investments permitted by this Section 10.3 only
if all actions have been taken to the satisfaction of the Agent to provide to
the Agent, for the benefit of the Lenders and the Agent, a first priority
perfected security interest in all of such Investments free of all encumbrances
other than Permitted Liens.
10.4. DISTRIBUTIONS AND OTHER RESTRICTED PAYMENTS. None of the Borrowers
will make any Distributions or other Restricted Payments except for (a)
Distributions payable to any of the Borrowers (other than Distributions to the
Canadian Borrower), and (b) provided that no Default or Event of Default has
occurred and is continuing or would result from the payment thereof,
Distributions in an amount not to exceed $2,500,000 per annum and $10,000,000 in
the aggregate during the term of the Credit Agreement to be used to declare or
pay any dividends, or repurchase or otherwise redeem capital stock of DBI from
former employees of a Borrower or its Subsidiaries pursuant to the terms of any
applicable employment agreements or the terms of employee stock ownership or
employee stock option plans of the Borrowers.
10.5. MERGERS, AMALGAMATIONS AND CONSOLIDATIONS, DISPOSITIONS OF ASSETS,
ACQUISITIONS.
10.5.1. MERGERS, AMALGAMATIONS AND CONSOLIDATIONS. Subject to
Section 10.5.3, and provided that any such Borrower shall have given the Agent
such documentation and evidentiary comfort as the Agent or its counsel may
reasonably require or request, none of the Borrowers will, and none will permit
any of its Subsidiaries to, become a party to any merger, amalgamation or
consolidation except the merger, amalgamation or consolidation of one or more of
the Subsidiaries of any Borrower with and into any Borrower (other than a
merger, amalgamation or consolidation into the Canadian Borrower if the Canadian
Borrower is the survivor), or the merger, amalgamation or consolidation of two
or more Subsidiaries of any Borrower (other than a merger, amalgamation or
consolidation into the Canadian Borrower if the Canadian Borrower is the
survivor).
10.5.2. DISPOSITIONS OF ASSETS. None of the Borrowers will, and
none will permit any of its Subsidiaries to, become a party to or agree to or
effect any disposition of assets, other than (a) the sale
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of inventory, the licensing of intellectual property in connection with
franchise agreements, the disposition of obsolete assets, and the disposition of
game packages, in each case in the ordinary course of business consistent with
past practices, and in compliance with applicable laws, (b) Permitted
Sale-Leasebacks, and (c) asset transfers by one Borrower to another Borrower
(other than the Canadian Borrower) so long as the Borrowers give the Agent prior
written notice of such transfer and take such steps as the Agent may reasonably
deem necessary to perfect, or preserve the perfection of, the Agent's security
interest in the assets subject to such transfer. Nothing in this Section 10.5.2
is intended to prohibit any Borrower or any of the Borrowers' Subsidiaries from
conditionally agreeing to dispose of any assets subject to the prior approval of
the Required Lenders (or all of the Lenders in the case of the sale of a
material portion of the Collateral) if such Borrower or Subsidiary will not be
subject to any penalties in connection with such agreement in the event that the
Required Lenders do not consent to such disposition. The Agent may release any
Collateral disposed of by any Borrower or any Subsidiary of any Borrower (other
than by transfer to another Borrower or any Subsidiary of any Borrower) if such
disposition is in compliance with this Section 10.5.2 and otherwise with the
terms hereof.
10.5.3. ACQUISITIONS. None of the Borrowers will, and none will
permit any of its Subsidiaries to, agree to or effect any asset acquisition or
stock acquisition except (a) the acquisition of assets in the ordinary course of
business consistent with past practices, and (b) the acquisition by a Borrower
(whether of stock or of substantially all of the assets of a business or
business division as a going concern or by means of a merger or consolidation)
of a 100% interest in any other Person (a "Permitted Acquisition") provided that
all of the following conditions shall have been satisfied: (i) such other Person
shall not be a Borrower and shall operate a similar business to that of the
Borrowers, (ii) no Default or Event of Default shall have occurred and be
continuing and none shall exist after giving effect thereto, (iii) if a Borrower
shall merge or amalgamate with such other Person, such Borrower shall be the
surviving party of such merger or amalgamation, (iv) if such Person shall become
a Subsidiary of any Borrower, such new Subsidiary shall become a Borrower
pursuant to, and take all other actions required by, Section 9.16 hereof, (v)
such Borrower shall have delivered to the Agent Compliance Certificates (such
Compliance Certificates to be distributed to the Lenders by the Agent)
demonstrating, both immediately prior to and immediately after such acquisition,
compliance on a Pro Forma Basis with the covenants set forth in Section 11 of
this Credit Agreement and (vi) the aggregate amount expended by the Borrowers
and their Subsidiaries for all Permitted Acquisitions shall not exceed
$7,500,000. Nothing in this Section 10.5.3 is intended to prohibit any Borrower
or any of the Borrowers' Subsidiaries from conditionally agreeing to any asset
or stock acquisition subject to the prior approval of the Required Lenders if
such Borrower or Subsidiary will not be subject to any penalties in connection
with such agreement in the event that the Required Lenders do not consent to
such acquisition.
10.6. SALE AND LEASEBACK. No Borrower will, nor will any Borrower permit
any of its Subsidiaries to, enter into any arrangement, directly or indirectly,
whereby such Borrower or any Subsidiary of such Borrower shall sell or transfer
any real or personal property owned by it in order then or thereafter to lease
such property or lease other property that such Borrower or any Subsidiary of
such Borrower intends to use for substantially the same purpose as the property
being sold or transferred (a "Sale-Leaseback"); provided that, so long as no
Event of Default has occurred and is continuing or would result there from, a
Borrower or a Borrower's Subsidiary may enter into a Sale-Leaseback with respect
to Units or a leasehold or fee interest in Real Estate if (a) the terms of the
sale as such are comparable to terms which could be obtained in an arm's-length
sale among unaffiliated parties not involving a Sale-Leaseback transaction and
(b) the terms of the lease as such are comparable to terms which could be
obtained in an arm's-length commercial operating lease among unaffiliated
parties and, provided further that, assuming that such Sale-Leaseback (and any
repayment of Indebtedness in conjunction therewith) had occurred immediately
prior to the period of four consecutive fiscal quarters most recently ended, no
Default or Event of Default would have occurred under Section 11 after giving
effect to such Sale-Leaseback (such Sale-Leaseback referred to herein as a
"Permitted Sale-Leaseback"). The Agent shall release any
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Collateral disposed of by such Borrower or any Subsidiary of such Borrower if
such disposition is in compliance with this Section 10.5.2 and otherwise with
the terms hereof.
10.7. COMPLIANCE WITH ENVIRONMENTAL LAWS. None of the Borrowers will,
and none will permit any of its Subsidiaries to, (i) use any of the Real Estate
or any portion thereof for the handling, processing, storage or disposal of
Hazardous Substances except in compliance with applicable Environmental Law,
(ii) cause or permit to be located on any of the Real Estate any underground
tank or other underground storage receptacle for Hazardous Substances except in
compliance with applicable Environmental Law, (iii) generate any Hazardous
Substances on any of the Real Estate except in compliance with applicable
Environmental Law, (iv) conduct any activity at any Real Estate or use any Real
Estate in any manner so as to cause a release (i.e. releasing, spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, disposing or dumping) or threatened release of Hazardous Substances
on, upon or into the Real Estate except in compliance with applicable
Environmental Law or (v) otherwise conduct any activity at any Real Estate or
use any Real Estate in any manner that would violate any Environmental Law or
bring such Real Estate in violation of any Environmental Law.
10.8. EMPLOYEE BENEFIT PLANS. Neither any Borrower nor any ERISA
Affiliate will engage in any "prohibited transaction" within the meaning of
Section 406 of ERISA or Section 4975 of the Code which could result in a
material liability for any of the Borrowers or their Subsidiaries. No Borrower
or any of its Subsidiaries shall maintain nor contribute to any Guaranteed
Pension Plan or Multiemployer Plan. No Borrower or any of its Subsidiaries shall
fail to contribute to any funded Canadian Plan any amount required to be
contributed thereto in accordance with applicable Canadian pension legislation
or the terms of such Canadian Plan resulting in a material liability to such
Canadian Plan; or permit or take any action which would result in the aggregate
going concern unfunded liability or the aggregate solvency deficiency in respect
of all the Canadian Plans which are funded plans, determined pursuant to the
actuarial assumptions and methodology utilized in the most recent actuarial
valuations therefore, to exceed the Canadian Dollar Equivalent of $250,000.
10.9. CHANGE IN FISCAL YEAR. None of the Borrowers will, and none will
permit any of its Subsidiaries to, effect any change in the end of its fiscal
year from that set forth in Section 8.4.1.
10.10. TRANSACTIONS WITH AFFILIATES. None of the Borrowers will, and
none will permit any of its Subsidiaries to, engage in any transaction (other
than transactions among Borrowers) with any Affiliate (other than for services
as employees, officers and directors), including any contract, agreement or
other arrangement providing for the furnishing of services to or by, providing
for rental of real or personal property to or from, or otherwise requiring
payments to or from any such Affiliate or, to the knowledge of any Borrower, any
corporation, partnership, trust or other entity in which any such Affiliate has
a substantial interest or is an officer, director, trustee or partner, on terms
more favorable to such Person than would have been obtainable on an arm's-length
basis in the ordinary course of business.
10.11. BANK ACCOUNTS. None of the Borrowers will, and none will permit
any of its Subsidiaries to, (i) violate directly or indirectly an Agency Account
Agreement or other bank agency or lock box agreement in favor of the Agent for
the benefit of the Lenders and the Agent with respect to such account or (ii)
deposit into any of the payroll accounts listed on Schedule 8.22 any amounts in
excess of amounts necessary to pay current payroll obligations from such
accounts.
10.12. FRANCHISES. The Borrowers will not, and will not permit any of
their Subsidiaries to, enter into any franchise agreement pursuant to which such
Borrower or such Subsidiary is prohibited from pledging or otherwise assigning
its rights under such franchise agreement, including its right to receive any
franchise fees or other fees or amounts paid to such Borrower or such Subsidiary
thereunder.
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10.13. SUBORDINATED DEBT. The Borrowers will not, and will not permit
any of their Subsidiaries, to (a) amend, supplement or otherwise modify the
terms of any of the Subordinated Debt Documents or (b) prepay, redeem or
repurchase (or offer to prepay, redeem or repurchase) any of the Convertible
Subordinated Debt.
10.14. SENIOR DEBT. The Borrowers will not in any manner designate or
permit to exist any Indebtedness of any Borrower or any of their Subsidiaries as
"Designated Senior Debt" (or any analogous term) for purposes of (and as defined
in) the Subordinated Indenture, other than the Indebtedness in respect of the
Obligations.
11. FINANCIAL COVENANTS OF THE BORROWERS.
Each of the Borrowers covenants and agrees that, so long as any Loan,
Unpaid Reimbursement Obligation, Letter of Credit or Note is Outstanding, or any
Lender has any obligation to make any Loans, or the Agent has any obligation to
issue, extend or renew any Letters of Credit, the Borrowers will comply with the
following financial covenants calculated on a Pro Forma Basis with respect to
any Permitted Acquisitions which occurred during the relevant Test Period:
11.1. LEVERAGE RATIO. The Borrowers will not permit the Leverage Ratio,
determined at the end of and for any period of four consecutive fiscal quarters
of the Borrowers ending during any period described in the table below, to be
greater than the ratio set forth opposite such period in such table:
Period Ratio
------ -----
(inclusive of end dates)
--------- -- --- -----
-------------------------------------------------- ------------------
-------------------------------------------------- ------------------
Closing Date through Third Quarter of Fiscal 1.90:1
Year 2005
-------------------------------------------------- ------------------
Thereafter 1.50:1
-------------------------------------------------- ------------------
11.2. FIXED CHARGE COVERAGE RATIO. The Borrowers will not permit the
Fixed Charge Coverage Ratio, determined for any period of four consecutive
fiscal quarters ending on the last day of any fiscal quarter ending during any
period described in the table below, to be less than the ratio set forth
opposite such period in such table:
Period Ratio
------ -----
(inclusive of end dates)
--------- -- --- -----
-------------------------------------------------- ------------------
-------------------------------------------------- ------------------
Closing Date through Third Quarter of Fiscal 1.25:1
Year 2005
-------------------------------------------------- ------------------
Thereafter 1.50:1
-------------------------------------------------- ------------------
11.3. CONSOLIDATED TANGIBLE NET WORTH. The Borrowers will not permit
Consolidated Tangible Net Worth, at any time, to be less than the sum of (a)
$160,000,000 plus (b) seventy-five percent (75%) of positive Consolidated Net
Income for each fiscal quarter of the Borrowers commencing with the fiscal
quarter ending on or about November 3, 2003.
11.4. NEW UNIT CAPITAL EXPENDITURES; NEW LEASES. The Borrowers will not,
nor will they permit any of their Subsidiaries or Affiliates to (a) with respect
to any single Unit opening after the
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Closing Date, expend more than the Per-Unit Start-Up Cost Cap in Consolidated
Start-Up Costs in connection with such Unit, or (b) commit to the construction,
acquisition or opening of new Units at any time that the Fixed Charge Coverage
Ratio at the end of the most recently ended fiscal quarter for which the
Borrowers' have delivered the Compliance Certificate is less than the Incurrence
Ratio.
11.5. MINIMUM CONSOLIDATED EBITDA. The Borrowers will not permit the sum
of Consolidated EBITDA for the fiscal year of the Borrowers ending on or about
February 1, 2004 to be less than $46,000,000.
12. CLOSING CONDITIONS.
The obligations of the Lenders to make the initial Loans and of the
Agent to issue any initial Letters of Credit shall be subject to the
satisfaction of the following conditions precedent (except as otherwise set
forth in the letter agreement among the Agent and the Borrowers dated as of the
date hereof):
12.1. LOAN DOCUMENTS, ETC. 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
Lenders. The Agent shall have received a fully executed copy of each such
document.
12.2. CERTIFIED COPIES OF CHARTER DOCUMENTS. The Agent shall have
received from the Borrowers and each of their Subsidiaries (a) a copy, certified
by a duly authorized officer of such Person to be true and complete on the
Closing Date, of each of (i) its charter or other incorporation documents as in
effect on such date of certification, and (ii) its by-laws as in effect on such
date and (b) such certificates of good standing and certificates of foreign
qualification as the Agent may request, all in form and substance satisfactory
to the Agent and the Agent's Special Counsel.
12.3. CORPORATE ACTION. All corporate action necessary for the valid
execution, delivery and performance by the Borrowers and each of their
Subsidiaries of this Credit Agreement and the other Loan Documents to which it
is or is to become a party shall have been duly and effectively taken, and
evidence thereof satisfactory to the Agent shall have been provided to the
Agent.
12.4. INCUMBENCY CERTIFICATE. The Agent shall have received from the
Borrowers and each of their Subsidiaries 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: (i) to sign, in the name and on behalf of such Person, each of the
Loan Documents to which such Person is or is to become a party; (ii) in the case
of each Borrower, to make Revolving Credit Loan Requests or Canadian Loan
Requests, Conversion Requests and to apply for Letters of Credit; and (iii) to
give notices and to take other action on its behalf under the Loan Documents.
12.5. VALIDITY OF LIENS. The Security Documents shall be effective to
create in favor of the Agent for the benefit of the Lenders and the Agent a
legal, valid and enforceable first (except for Permitted Liens entitled to
priority under applicable law) security interest in and lien upon the
Collateral. All filings, recordings, deliveries of instruments and other actions
necessary or desirable in the opinion of the Agent to protect and preserve such
security interests shall have been duly effected. The Agent shall have received
evidence thereof in form and substance satisfactory to the Agent.
12.6. PERFECTION CERTIFICATES AND UCC AND PPSA SEARCH RESULTS. The Agent
shall have received from the Borrowers and each of their Subsidiaries a
completed and fully executed Perfection
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Certificate and the results of UCC and PPSA searches with respect to the
Collateral, indicating no liens other than Permitted Liens and otherwise in form
and substance satisfactory to the Agent.
12.7. SURVEY AND TAXES. The Agent shall have received (i) no-change
affidavits with respect to the Surveys of each Mortgaged Property and (ii)
evidence of payment of real estate taxes and municipal charges on all Real
Estate not delinquent on or before the Closing Date.
12.8. TITLE INSURANCE. The Agent shall have received a Title Policy
covering each Mortgaged Property (or commitments to issue such policies, with
all conditions to issuance of the Title Policy deleted by an authorized agent of
the Title Insurance Company) together with proof of payment of all fees and
premiums for such policies, from the Title Insurance Company and in amounts
satisfactory to the Agent insuring the interest of the Agent and each of the
Lenders as mortgagee under the Mortgages.
12.9. LANDLORD CONSENTS. The Borrowers and their Subsidiaries shall have
delivered to the Agent all consents required for the Agent to receive, as part
of the Security Documents, a collateral assignment of each leasehold of personal
property, and a mortgage of each leasehold of real property listed on Schedule
12.9 hereto, together in each case with such estoppel certificates as the Agent
may request, including waivers by landlords with respect to such leaseholds.
12.10. HAZARDOUS WASTE ASSESSMENTS. The Agent shall have received Phase
I environmental assessments performed by an environmental consultant reasonably
acceptable to the Agent in accordance with ASTM standards in form and substance
satisfactory to the Agent, covering all Real Estate and all other real property
in respect of which any of the Borrowers or their Subsidiaries may have material
liability, whether contingent or otherwise, for dumping or disposal of Hazardous
Substances.
12.11. CERTIFICATES OF INSURANCE. The Agent shall have received (i) 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 this Credit Agreement and the Mortgages and (ii) certified
copies of all policies evidencing such insurance (or certificates therefore
signed by the insurer or an agent authorized to bind the insurer).
12.12. SOLVENCY CERTIFICATE. Each of the Lenders shall have received
officer's certificates of each of the Borrowers dated as of the Closing Date as
to the solvency of such Borrower and its Subsidiaries following the consummation
of the transactions contemplated herein and in form and substance satisfactory
to the Lenders.
12.13. OPINION OF COUNSEL. Each of the Lenders and the Agent shall have
received a favorable legal opinion addressed to the Lenders and the Agent, dated
as of the Closing Date, in form and substance satisfactory to the Lenders and
the Agent, from:
(i) Gardere & Wynne, L.L.P., counsel to each of the Borrowers
and their Subsidiaries;
(ii) Blake Cassels & Graydon LLP, local counsel in Missouri and
Florida with respect to general corporate matters;
(iii) Piper Marbury Rudnick & Wolfe, local counsel in Florida
with respect to general corporate matters;
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(iv) Blake Cassels & Graydon LLP, local counsel in Ontario,
Canada with respect to general corporate matters and real property
matters;
(v) Gardere & Wynne, L.L.P., local counsel in Texas with respect
to general corporate matters; and
(vi) O'Melveny & Myers LLP, local counsel in California with
respect to general corporate matters;
12.14. PAYMENT OF FEES AND EXPENSES. The Borrowers shall have paid to
the Lenders or the Agent, as appropriate, all fees due hereunder and under the
Fee Letter. The Borrowers shall have reimbursed the Agent for, or paid directly,
all fees, costs and expenses incurred by the Agent's Special Counsel and local
counsel to the Agent in all relevant jurisdictions in connection with the
closing of the transactions contemplated hereby.
12.15. CONSENTS AND APPROVALS. The Agent shall have received evidence
that all governmental and third-party approvals (including those landlords'
consents listed on Schedule 12.9 and other consents to the extent reasonably
obtainable) necessary or advisable in connection with the credit facilities
contemplated hereby and the continuing operations of the Borrowers shall have
been obtained and shall be in full force and effect, and all applicable waiting
periods shall have expired without any action being taken or threatened by any
competent authority that would restrain, prevent or otherwise impose materially
adverse conditions on the Borrowers and their Subsidiaries taken as a whole or
the credit facilities contemplated hereby.
12.16. DISBURSEMENT INSTRUCTIONS. The Agent shall have received
disbursement instructions from the Borrowers with respect to the proceeds of the
Term Loan A and the initial Revolving Credit Loans to be made on the Closing
Date.
12.17. NO MATERIAL ADVERSE CHANGE. The Agent shall be satisfied that
there shall have occurred no material adverse change in the business,
operations, assets, management, properties, financial condition, income or
prospects of the Borrowers and their Subsidiaries taken as a whole since the
Balance Sheet Date.
12.18. FINANCIAL STATEMENTS AND PROJECTIONS. The Agent shall have
received (a) copies of the financial statements and projections described in
Section 8.4, and (b) a pro forma balance sheet of the Borrowers and their
Subsidiaries showing the projected capitalization of the Borrowers and their
Subsidiaries as of the Closing Date. The Agent shall be satisfied that such
financial statements fairly present the financial condition, income and
prospects of the Borrowers and their Subsidiaries as at the close of business on
the date thereof and the results of operations for the fiscal period then ended
and show compliance on a Pro Forma Basis with the covenants contained in Section
11 and all other terms and conditions hereof.
12.19. NO LITIGATION. No litigation, inquiry, injunction or restraining
order shall be pending, entered or threatened that, in the reasonable opinion of
the Agent, could reasonably be expected to have a material adverse effect on (i)
the transactions contemplated hereby, (ii) the business, assets, liabilities
(actual or contingent) operations, condition (financial or otherwise) of the
Borrowers and their Subsidiaries, taken as a whole, (iii) the ability of the
Borrowers or any of their Subsidiaries to perform their obligations under the
Loan Documents, (iv) the rights and remedies of the Agent and the Lenders under
the Loan Documents, or (v) the perfection or priority of any security interests
granted to the Agent under the Loan Documents.
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12.20. ABSENCE OF DEFAULT UNDER OTHER AGREEMENTS. No default shall exist
in respect of any material contract or agreement to which any Borrower or any of
its Subsidiaries is party.
12.21. OTHER DOCUMENTATION. All other documentation, including other
financing arrangements of the Borrowers and their Subsidiaries and the
Convertible Subordinated Debt shall be reasonably satisfactory in form and
substance to the Agent.
12.22. CLOSING CERTIFICATE. The Agent shall have received a
certification by the principal financial or accounting officer of DBI,
(including detailed computations) that, as of the Closing Date, (i) Consolidated
EBITDA for the most recently ended period of four fiscal quarters is not less
than $47,500,000 and (ii) the Leverage Ratio as at the then most recently ended
period of four fiscal quarters on a Pro Forma Basis after giving effect to this
transaction and the acquisition of the Canadian Borrower does not exceed 1.40:1.
12.23. MINIMUM REVOLVER AVAILABILITY. On the Closing Date, the sum of
the Outstanding amount of the Revolving Credit Loans (after giving effect to all
amounts requested) plus the Maximum Drawing Amount plus all Unpaid Reimbursement
Obligations shall not exceed $25,000,000.
13. CONDITIONS TO ALL BORROWINGS.
The obligations of the Lenders to make any Loan, and of the 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
conditions precedent:
13.1. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT. Each of the
representations and warranties of any of the Borrowers and their Subsidiaries
contained in this Credit Agreement, the other Loan Documents or in any document
or instrument delivered pursuant to or in connection with this Credit 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, and 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 Credit Agreement and the other Loan Documents
and changes occurring in the ordinary course of business that singly or in the
aggregate are not materially adverse, 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.
13.2. LEVERAGE RATIO INCURRENCE TEST UNDER SUBORDINATED INDENTURE. The
incurrence of additional Indebtedness under the Credit Agreement will not cause
the Borrowers to violate the Leverage Ratio Incurrence Test set forth in Section
5.10 of the Subordinated Indenture (including the notice requirements thereof).
13.3. NO LEGAL IMPEDIMENT OR MATERIAL MARKET CHANGE. No change shall
have occurred in any law or regulations thereunder or interpretations thereof
that in the reasonable opinion of any Lender would make it illegal or impossible
for such Lender 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 Agent
would make it illegal for the Agent to issue, extend or renew such Letter of
Credit.
13.4. GOVERNMENTAL REGULATION. Each Lender shall have received such
statements in substance and form reasonably satisfactory to such Lender as such
Lender 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 or the Office of the Superintendent of Financial
Institutions.
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13.5. PROCEEDINGS AND DOCUMENTS. All proceedings in connection with the
transactions contemplated by this Credit Agreement, the other Loan Documents and
all other documents incident thereto shall be satisfactory in substance and in
form to the Lenders and to the Agent and the Agent's Special Counsel, including
without limitation a Canadian Loan Request in the form attached hereto as
Exhibit B-2, and the Lenders, the Agent and such counsel shall have received all
information and such counterpart originals or certified or other copies of such
documents as the Agent may reasonably request, including any joinder agreement
as may be required by Section 9.16.
14. EVENTS OF DEFAULT; ACCELERATION; ETC.
14.1. EVENTS OF DEFAULT AND ACCELERATION. If any of the following events
("Events of Default" or, if the giving of notice or the lapse of time or both is
required, then, prior to such notice or lapse of time, "Defaults") shall occur:
(a) the Borrowers shall fail to pay any principal of the Loans
or any Reimbursement Obligation when the same shall become due and payable,
whether at the stated date of maturity or any accelerated date of maturity or at
any other date fixed for payment;
(b) the Borrowers shall fail to pay any interest on the Loans,
the Commitment Fee, any Letter of Credit Fee, any Fronting Fee, any fees under
the Fee Letter, or any other sums due hereunder or under any of the other Loan
Documents, within three (3) Business Days of the date when the same became due
and payable, whether at the stated date of maturity or any accelerated date of
maturity or at any other date fixed for payment;
(c) any of the Borrowers shall fail to comply with any of its
respective covenants contained in Sections 9.5, 9.9, 10 or 11, with any of its
covenants contained in Section 9.4 for a period in excess of five (5) Business
Days, or with any of the covenants contained in any of the Mortgages;
(d) any Borrower or any of its Subsidiaries shall fail to
perform any term, covenant or agreement contained herein or in any of the other
Loan Documents (other than those specified elsewhere in this Section 14.1) for
thirty (30) days after written notice of such failure has been given to the
Borrowers by the Agent;
(e) any representation or warranty by any Borrower or any of
its Subsidiaries in this Credit Agreement or any of the other Loan Documents or
in any other document or instrument delivered pursuant to or in connection with
this Credit Agreement shall prove to have been false in any material respect
upon the date when made or deemed to have been made or repeated;
(f) (i) the holders of all or any part of the Convertible
Subordinated Debt shall accelerate the maturity of all or any part of the
Convertible Subordinated Debt; or the Convertible Subordinated Debt shall be (or
shall be required at such time to be) prepaid, redeemed or repurchased in whole
or in part; or DBI or any of its Subsidiaries shall be or become required under
the terms of any of the Subordinated Debt Documents to prepay, redeem or
repurchase (or shall be or become required thereunder to offer to prepay, redeem
or repurchase) all or any part of the Convertible Subordinated Debt; or (ii) any
Borrower or any of its Subsidiaries shall fail to pay at maturity, or within any
applicable period of grace, any obligation for borrowed money or credit received
or in respect of any Capitalized Leases in an outstanding principal amount of
$250,000, or any Convertible Subordinated Debt or fail to observe or perform any
material term, covenant or agreement contained in any agreement by which it is
bound, evidencing or securing such Indebtedness for such period of time as would
permit (assuming the giving of appropriate notice
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if required) the holder or holders thereof or of any obligations issued
thereunder to accelerate the maturity thereof;
(g) any Borrower or any of its Subsidiaries shall make an
assignment for the benefit of creditors, or admit in writing its inability to
pay or generally fail to pay its debts as they mature or become due, or shall
petition or apply for the appointment of a trustee or other custodian,
liquidator, receiver or receiver and manager of any Borrower or any of its
Subsidiaries or of any substantial part of the assets of any Borrower or any of
its Subsidiaries or shall commence any case or other proceeding relating to any
Borrower or any of its Subsidiaries under any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution or liquidation or
similar law of any jurisdiction, now or hereafter in effect, or shall take any
action to authorize or in furtherance of any of the foregoing, or if any such
petition or application shall be filed or any such case or other proceeding
shall be commenced against any Borrower or any of its Subsidiaries shall
indicate its approval thereof, consent thereto or acquiescence therein or such
petition or application shall not have been dismissed within sixty (60) days
following the filing thereof;
(h) a decree or order is entered appointing any such trustee,
custodian, liquidator, receiver or receiver and manager or adjudicating any
Borrower or any of its Subsidiaries bankrupt or insolvent, or approving a
petition in any such case or other proceeding, or a decree or order for relief
is entered in respect of any Borrower or any of its Subsidiaries in an
involuntary case under federal bankruptcy laws as now or hereafter constituted;
(i) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than twenty consecutive days any final judgment against any
Borrower or any of its Subsidiaries that, with other outstanding final
judgments, undischarged, against the Borrowers or any of their Subsidiaries,
exceeds in the aggregate, $1,000,000 (net of accepted insurance coverage);
(j) a Change of Control or a Repurchase Event shall occur;
(k) if any of the Loan Documents shall be cancelled,
terminated, revoked or rescinded or the Agent's security interests, mortgages or
liens in a substantial portion of the Collateral shall cease to be perfected, or
shall cease to have the priority contemplated by the Security Documents, in each
case otherwise than in accordance with the terms thereof or with the express
prior written agreement, consent or approval of the Lenders, or any action at
law, suit or in equity or other legal proceeding to cancel, revoke or rescind
any of the Loan Documents shall be commenced by or on behalf of any Borrower or
any of its Subsidiaries party thereto or any of their respective stockholders,
or any court or any other governmental or regulatory authority or agency of
competent jurisdiction shall make a determination that, or issue a judgment,
order, decree or ruling to the effect that, any one or more of the Loan
Documents is illegal, invalid or unenforceable in accordance with the terms
thereof;
(l) any Borrower or any ERISA Affiliate incurs any liability to
the PBGC or similar Canadian authorities (excluding requested insurance premiums
payable in the ordinary course) pursuant to Title IV of ERISA in an aggregate
amount exceeding $250,000;
(m) the Borrowers or any of their Subsidiaries shall be
enjoined, restrained or in any way prevented by the order of any court or any
administrative or regulatory agency from conducting any material part of its
business and such order shall continue in effect for more than thirty (30) days;
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(n) there shall occur any material damage to, or loss, theft or
destruction of, any Collateral, whether or not insured, or any strike, lockout,
labor dispute, embargo, condemnation, act of God, terrorism or public enemy, or
other casualty, which in any such case causes, for more than thirty (30)
consecutive days, the cessation or substantial curtailment of revenue producing
activities at any facility of the Borrowers or any of their Subsidiaries if such
event or circumstance is not covered by business interruption insurance and
would have a material adverse effect on the business or financial condition of
the Borrowers and their Subsidiaries;
(o) there shall occur the loss, suspension or revocation of, or
failure to renew, any license or permit now held or hereafter acquired by the
Borrowers or any of their Subsidiaries if such loss, suspension, revocation or
failure to renew would have a material adverse effect on the business or
financial condition of the Borrowers and their Subsidiaries taken as a whole;
(p) the Borrowers or any of their Subsidiaries shall be
indicted for a state, provincial or federal crime, or any civil or criminal
action shall otherwise have been brought against any such Person, a punishment
for which in any such case could reasonably be expected to include the
forfeiture of any assets of such Person having a fair market value in excess of
$250,000.
then, and in any such event, so long as the same may be continuing, the Agent
may, and upon the request of the Required Lenders shall, by notice in writing to
the Borrowers declare all amounts owing with respect to this Credit 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 each of the Borrowers; provided that in the event of
any Event of Default specified in Sections 14.1(g) or 14.1(h), all such amounts
shall become immediately due and payable automatically and without any
requirement of notice from the Agent or any Lender.
14.2. TERMINATION OF COMMITMENTS. If any one or more of the Events of
Default specified in Section 14.1(g) or Section 14.1(h) shall occur, any unused
portion of the credit hereunder shall forthwith terminate and each of the
Lenders shall be relieved of all further obligations to make Loans to the
Borrowers, and the 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, the Agent may and, upon the request of the Required
Lenders, shall, by notice to the Borrowers, terminate the unused portion of the
credit hereunder, and upon such notice being given such unused portion of the
credit hereunder shall terminate immediately and each of the Lenders shall be
relieved of all further obligations to make Loans, and the Agent shall be
relieved of all further obligations to issue, extend or renew Letters of Credit.
No termination of the credit hereunder shall relieve any of the Borrowers or
their Subsidiaries of any of the Obligations.
14.3. REMEDIES. In case any one or more of the Events of Default shall
have occurred and be continuing, and whether or not the Lenders shall have
accelerated the maturity of the Loans pursuant to Section 14.1, the Agent and
each Lender, if owed any amount with respect to the Loans or the Reimbursement
Obligations, may, with the consent of the Required Lenders 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 Credit Agreement and the other Loan
Documents or any instrument pursuant to which the Obligations to such Lender are
evidenced, including as permitted by applicable law the obtaining of the ex
parte appointment of a receiver or receiver and manager, 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 Lender. No remedy
herein conferred upon any Lender or the 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
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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.
14.4. DISTRIBUTION OF COLLATERAL PROCEEDS. In the event that, following
the occurrence or during the continuance of any Default or Event of Default, the
Agent or any Lender, as the case may be, receives any monies in connection with
the enforcement of any of the Security Documents, or otherwise with respect to
the realization upon any of the Collateral, 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 Agent for or in respect of all reasonable costs,
expenses, disbursements and losses which shall have been incurred or
sustained by the Agent in connection with the collection of such monies
by the Agent, for the exercise, protection or enforcement by the Agent
of all or any of the rights, remedies, powers and privileges of the
Agent under this Credit 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 Agent against any taxes or liens which by law shall
have, or may have, priority over the rights of the Agent to such monies;
(b) Second, to all other Obligations in such order or preference
as the Required Lenders may determine; provided, however, that (i)
distributions shall be made (A) pari passu among Obligations with
respect to the Agent's fee payable pursuant to the Fee Letter and all
other Obligations and (B) with respect to each type of Obligation owing
to the Lenders, such as interest, principal, fees and expenses, among
the Lenders pro rata, and (ii) the Agent may in its discretion make
proper allowance to take into account any Obligations not then due and
payable;
(c) Third, upon payment and satisfaction in full or other
provisions for payment in full satisfactory to the Lenders and the Agent
of all of the Obligations, to the payment of any obligations required to
be paid pursuant to Section 9-608(a)(1)(c) or 9-615(a)(3) of the Uniform
Commercial Code of the Commonwealth of Massachusetts; and
(d) Fourth, the excess, if any, shall be returned to the
Borrowers or to such other Persons as are entitled thereto.
15. SETOFF.
Regardless of the adequacy of any collateral, during the continuance of
any Event of Default, (i) any deposits or other sums credited by or due from any
of the Lenders or the Agent to any of the Domestic Borrowers and any securities
or other property of any of the Domestic Borrowers in the possession of such
Lender or the Agent may be applied to or set off by such Lender 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 any of the Domestic Borrowers to such Lender and (ii) any deposits or other
sums credited by or due from any of the Canadian Lenders or the Agent to the
Canadian Borrower and any securities or other property of the Canadian Borrower
in the possession of such Canadian Lender or the Agent may be applied to or set
off by such Canadian Lender 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 Canadian Borrower to such
Canadian Lender. ANY AND ALL RIGHTS TO REQUIRE ANY LENDER TO EXERCISE ITS RIGHTS
OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS,
PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS
OR OTHER PROPERTY OF ANY BORROWER ARE HEREBY KNOWINGLY, VOLUNTARILY AND
IRREVOCABLY WAIVED. Each of the
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Lenders agrees with each other Lender that (a) if an amount to be set off is to
be applied to Indebtedness of any of the Borrowers to such Lender, other than
Indebtedness evidenced by the Notes held by such Lender or constituting
Reimbursement Obligations owed to such Lender, such amount shall be applied
ratably to such other Indebtedness and to the Indebtedness evidenced by all such
Notes held by such Lender or constituting Reimbursement Obligations owed to such
Lender, and (b) if such Lender shall receive from any of the Borrowers, whether
by voluntary payment, exercise of the right of setoff, counterclaim, cross
action, enforcement of the claim evidenced by the Notes held by, or
Reimbursement Obligations owed to such Lender by proceedings against such
Borrower 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 Lender any amount in excess of its ratable portion of
the payments received by all of the Lenders with respect to the Notes held by
all of the Lenders, such Lender will make such disposition and arrangements with
the other Lenders with respect to such excess, either by way of distribution,
pro tanto assignment of claims, subrogation or otherwise as shall result in each
Lender receiving in respect of the Notes held by it or Reimbursement Obligations
owed it, its proportionate payment as contemplated by this Credit Agreement;
provided that if all or any part of such excess payment is thereafter recovered
from such Lender, such disposition and arrangements shall be rescinded and the
amount restored to the extent of such recovery, but without interest.
16. THE AGENT.
16.1. AUTHORIZATION. Each Lender hereby irrevocably appoints and
authorizes Fleet National Bank to act as the Agent hereunder and under the other
Loan Documents.
(a) The Agent is authorized to take such action on behalf of
each of the Lenders and to exercise all such powers as are hereunder and
under any of the other Loan Documents and any related documents
delegated to the Agent, together with such powers as are reasonably
incident thereto including the authority, without the necessity of any
notice to or further consent of the Lenders, from time to time to take
any action with respect to any Collateral or the Security Documents
which may be necessary to perfect, maintain perfected or insure the
priority of the security interest in and liens upon the Collateral
granted pursuant to the Security Documents, provided that no duties or
responsibilities not expressly assumed herein or therein shall be
implied to have been assumed by the Agent.
(b) The relationship between the Agent and each of the Lenders
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 the Agent and each of the
Lenders. Nothing contained in this Credit Agreement nor the other Loan
Documents shall be construed to create an agency, trust or other
fiduciary relationship between the Agent and any of the Lenders.
(c) As an independent contractor empowered by the Lenders to
exercise certain rights and perform certain duties and responsibilities
hereunder and under the other Loan Documents, the Agent is nevertheless
a "representative" of the Lenders, as that term is defined in Article 1
of the Uniform Commercial Code, for purposes of actions for the benefit
of the Lenders and the Agent with respect to all collateral security and
guaranties contemplated by the Loan Documents. Such actions include the
designation of the 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 Lenders and the Agent.
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16.2. EMPLOYEES AND THE AGENT. The 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 Credit Agreement and the other Loan Documents. The
Agent may utilize the services of such Persons as the Agent in its sole
discretion may reasonably determine, and all reasonable fees and expenses of any
such Persons shall be paid by the Borrowers.
16.3. NO LIABILITY. Neither the Agent, the Documentation Agent nor any
of their respective shareholders, directors, officers or employees nor any other
Person assisting them in their duties nor any agent or employee thereof, shall
be liable 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 the Agent, the Documentation Agent or such other Person, as the case may
be, may be liable for losses due to its willful misconduct or gross negligence.
16.4. NO REPRESENTATIONS.
16.4.1. GENERAL. The Agent shall not be responsible for the
execution or validity or enforceability of this Credit 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 any Borrower or any of their
respective Subsidiaries, 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 any of the
properties, books or records of any Borrower or any of their respective
Subsidiaries. The Agent shall not be bound to ascertain whether any notice,
consent, waiver or request delivered to it by any Borrower or any holder of any
of the Notes shall have been duly authorized or is true, accurate and complete.
The Agent has not made nor does it now make any representations or warranties,
express or implied, nor does it assume any liability to the Lenders, with
respect to the credit worthiness or financial conditions of any Borrower or any
of their respective Subsidiaries. Each Lender acknowledges that it has,
independently and without reliance upon the Agent or any other Lender, and based
upon such information and documents as it has deemed appropriate, made its own
credit analysis and decision to enter into this Credit Agreement.
16.4.2. CLOSING DOCUMENTATION, ETC. For purposes of determining
compliance with the conditions set forth in Section 12, each Lender that has
executed this Credit Agreement shall be deemed to have consented to, approved or
accepted, or to be satisfied with, each document and matter either sent, or made
available, by the Agent or the Arranger to such Lender for consent, approval,
acceptance or satisfaction, or required thereunder to be consented to or
approved by or acceptable or satisfactory to such Lender, unless an officer of
the Agent or the Arranger active upon the Borrowers' account shall have received
notice from such Lender prior to the Closing Date specifying such Lender's
objection thereto and such objection shall not have been withdrawn by notice to
the Agent or the Arranger to such effect on or prior to the Closing Date.
16.5. PAYMENTS.
16.5.1. PAYMENTS TO AGENT. A payment by any Borrower to the
Agent hereunder or under any of the other Loan Documents (and in the case of the
Canadian Borrower, despite the express provisions of Section 6.2.1) for the
account of any Lender shall constitute a payment to such Lender. The Agent
agrees promptly (but in no case later than two Business Days after the receipt
of such payments by the
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Agent) to distribute to each Lender such Lender's pro rata share of payments
received by the Agent for the account of the Lenders except as otherwise
expressly provided herein or in any of the other Loan Documents.
16.5.2. DISTRIBUTION BY AGENT. If in the opinion of the 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 Agent is to be repaid, each Person to whom any such
distribution shall have been made shall either repay to the 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.
16.5.3. DELINQUENT LENDERS. Notwithstanding anything to the
contrary contained in this Credit Agreement or any of the other Loan Documents,
any Lender that fails (i) to make available to the Agent its pro rata share of
any Loan or to purchase any Letter of Credit Participation or (ii) to comply
with the provisions of Section 15 with respect to making dispositions and
arrangements with the other Lenders, where such Lender'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 Lenders, in each case as, when and
to the full extent required by the provisions of this Credit Agreement, shall be
deemed delinquent (a "Delinquent Lender") and shall be deemed a Delinquent
Lender until such time as such delinquency is satisfied. A Delinquent Lender
shall be deemed to have assigned any and all payments due to it from the
Borrowers, whether on account of outstanding Loans, Unpaid Reimbursement
Obligations, interest, fees or otherwise, to the remaining nondelinquent Lenders
for application to, and reduction of, their respective pro rata shares of all
outstanding Loans and Unpaid Reimbursement Obligations. The Delinquent Lender
hereby authorizes the Agent to distribute such payments to the nondelinquent
Lenders in proportion to their respective pro rata shares of all outstanding
Loans and Unpaid Reimbursement Obligations. A Delinquent Lender shall be deemed
to have satisfied in full a delinquency when and if, as a result of application
of the assigned payments to all outstanding Loans and Unpaid Reimbursement
Obligations of the nondelinquent Lenders, the Lenders' 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.
16.6. HOLDERS OF NOTES. The 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.
16.7. INDEMNITY. The Lenders ratably agree hereby to indemnify and hold
harmless the Agent, the Documentation Agent, the Arranger and their respective
affiliates from and against any and all claims, actions and suits (whether
groundless or otherwise), losses, damages, costs, expenses (including any
expenses for which the Agent, the Documentation Agent or such affiliate has not
been reimbursed by the Borrowers as required by Section 18), and liabilities of
every nature and character arising out of or related to this Credit Agreement,
the Notes, or any of the other Loan Documents or the transactions contemplated
or evidenced hereby or thereby, or the Agent's or Documentation Agent's actions
taken hereunder or thereunder in such capacities as Agent, Documentation Agent
or Arranger except to the extent that any of the same shall be directly caused
by the willful misconduct or gross negligence of the indemnified party. Without
limiting the foregoing indemnification of Fleet as Agent, Bank One, NA as
Documentation Agent and Fleet Securities, Inc., the indemnification provided for
in this Section 16.7 shall not include any indemnification of Fleet, or Bank
One, NA solely in their respective capacities as Lenders hereunder.
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16.8. AGENT AS LENDER. In its individual capacity, Fleet shall have the
same obligations and the same rights, powers and privileges in respect to its
Domestic Revolving Credit Commitment and Term A Commitment, as applicable, and
the Loans made by it, and as the holder of any of the Notes, as it would have
were it not also the Agent.
16.9. RESIGNATION. The Agent may resign at any time by giving sixty (60)
days prior written notice thereof to the Lenders and the Borrowers. Upon any
such resignation, the Required Lenders shall have the right to appoint a
successor Agent. Unless a Default or Event of Default shall have occurred and be
continuing, such successor Agent shall be reasonably acceptable to the
Borrowers. If no successor Agent shall have been so appointed by the Required
Lenders and shall have accepted such appointment within thirty (30) days after
the retiring Agent's giving of notice of resignation, then the retiring Agent
may, on behalf of the Lenders, appoint a successor Agent, which shall be a
financial institution having a rating of not less than A or its equivalent by
Standard & Poor's Ratings Group. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder. After any retiring Agent's resignation, the provisions of
this Credit 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 Agent.
16.10. NOTIFICATION OF DEFAULTS AND EVENTS OF DEFAULT; OTHER NOTICES.
Each Lender hereby agrees that, upon learning of the existence of a Default or
an Event of Default, it shall promptly notify the Agent thereof; provided that a
failure to provide such information shall not result in any liability by such
Lender. The Agent hereby agrees that upon receipt of any notice under this
Section 16.10 it shall promptly notify the other Lenders of the existence of
such Default or Event of Default.
16.11. DUTIES IN THE CASE OF ENFORCEMENT. In case one of more Events of
Default have occurred and shall be continuing, and whether or not acceleration
of the Obligations shall have occurred, the Agent shall, if (i) so requested by
the Required Lenders and (ii) the Lenders have provided to the Agent such
additional indemnities and assurances against expenses and liabilities as the
Agent may reasonably request, proceed to enforce the provisions of the Security
Documents authorizing the sale or other disposition of all or any part of the
Collateral and exercise all or any such other legal and equitable and other
rights or remedies as it may have in respect of such Collateral. The Required
Lenders may direct the Agent in writing as to the method and the extent of any
such sale or other disposition, the Lenders hereby agreeing ratably to indemnify
and hold the Agent harmless from all liabilities incurred in respect of all
actions taken or omitted in accordance with such directions, provided that the
Agent need not comply with any such direction to the extent that the Agent
reasonably believes the Agent's compliance with such direction to be unlawful or
commercially unreasonable in any applicable jurisdiction.
16.12. AGENT MAY FILE PROOFS OF CLAIM.
(a) In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial, administrative or like proceeding or any assignment for the
benefit of creditors relative to any Borrower or any of their Subsidiaries, the
Agent and in respect of the Canadian Obligations, the Canadian Lenders (in
either case, irrespective of whether the principal of any Loan, Reimbursement
Obligation or Unpaid Reimbursement Obligation shall then be due and payable as
herein expressed or by declaration or otherwise and irrespective of whether the
Agent shall have made any demand on the Borrowers) shall be entitled and
empowered, by intervention in such proceeding, under any such assignment or
otherwise:
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(i) to file and prove a claim for the whole amount of the
principal and interest owing and unpaid in respect of the Loans,
Reimbursement Obligations, Unpaid Reimbursement Obligations and all
other Obligations that are owing and unpaid and to file such other
documents as may be necessary or advisable in order to have the claims
of the Lenders and the Agent (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Lenders and
the Agent and their respective agents and counsel and all other amounts
due the Lenders and the Agent under Sections 2.2, 5.6, 6.1, and 18.1)
allowed in such proceeding or under any such assignment; and
(ii) to collect and receive any monies or other property payable
or deliverable on any such claims and to distribute the same;
(b) Any custodian, receiver, receiver and manager, assignee, trustee,
liquidator, sequestrator or other similar official in any such proceeding or
under any such assignment is hereby authorized by each Lender to make such
payments to the Agent or in case of Canadian Obligations, any Canadian Lender
and, in the event that the Agent shall consent to the making of such payments
directly to the Lenders, nevertheless to pay to the Agent any amount due for the
reasonable compensation, expenses, disbursements and advances of the Agent and
its agents and counsel, and any other amounts due the Agent under Sections 2.2,
5.6, 6.1, and 18.1.
(c) Nothing contained herein shall authorize the Agent to consent to or
accept or adopt on behalf of any Lender any plan of reorganization, arrangement,
adjustment or composition affecting the Obligations owed to such Lender or the
rights of any Lender or authorize the Agent to vote in respect of the claim of
any Lender in any such proceeding or under any such assignment.
17. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION.
17.1. CONFIDENTIALITY. Each of the Lenders and the Agent agrees, on
behalf of itself and each of its affiliates, directors, officers, employees and
representatives, to use reasonable precautions to keep confidential, in
accordance with their customary procedures for handling confidential information
of the same nature and in accordance with safe and sound banking practices, any
non-public information supplied to it by any of the Borrowers or their
Subsidiaries pursuant to this Credit Agreement that is identified by such Person
as being confidential at the time the same is delivered to the Lenders or the
Agent, provided that nothing herein shall limit the disclosure of any such
information (a) after such information shall have become public other than
through a violation of this Section 17, or becomes available to any of the
Lenders or the Agent on a nonconfidential basis from a source other than the
Borrowers, (b) to the extent required by statute, rule, regulation or judicial
process, (c) to counsel, accountants or other professionals or agents acting on
behalf of any of the Lenders or the Agent, (d) to bank examiners or any other
regulatory authority having jurisdiction over any Lender or the Agent, or to
auditors or accountants, (e) to the Agent, any Lender or any Financial
Affiliate, (f) in connection with any litigation involving the Borrowers or any
of their Subsidiaries and the Lenders, the Agent or any Financial Affiliate, or
in connection with the enforcement of rights or remedies hereunder or under any
other Loan Document, (g) to a Subsidiary or affiliate of such Lender or to other
affiliates in the ordinary course of such Lender's business, provided that such
other affiliates are not engaged in or investors in restaurant businesses
competing with the Borrowers, (h) to any assignee or participant (or prospective
assignee or participant) so long as such assignee or participant agrees to be
bound by the provisions of Section 17 or (i) with the consent of the Borrowers.
Notwithstanding anything herein to the contrary, the Agent and each Lender may
disclose to any and all Persons, without limitation of any kind, any information
with respect to the "tax treatment" and "tax structure" (in each case, within
the meaning of Treasury Regulation Section 1.6011-4) of the transactions
contemplated hereby and all materials of any kind (including opinions or other
tax analyses) that are provided to the Agent or such Lender relating to such tax
treatment and tax structure;
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provided that with respect to any document or similar item that in either case
contains information concerning the tax treatment or tax structure of the
transaction as well as other information, this sentence shall only apply to such
portions of the document or similar item that relate to the tax treatment or tax
structure of the Loans, Letters of Credit and transactions contemplated hereby.
17.2. PRIOR NOTIFICATION. Unless specifically prohibited by applicable
law or court order, each of the Lenders and the Agent shall, prior to disclosure
thereof, notify the Borrowers of any request for disclosure of any such
non-public information by any governmental agency or representative thereof
(other than any such request in connection with an examination of the financial
condition of such Lender by such governmental agency) or pursuant to legal
process.
17.3. OTHER. In no event shall any Lender or the Agent be obligated or
required to return any materials furnished to it or any Financial Affiliate by
any of the Borrowers or their Subsidiaries. The obligations of each Lender under
this Section 17 shall supersede and replace the obligations of such Lender under
any confidentiality letter in respect of this financing signed and delivered by
such Lender to any of the Borrowers prior to the date hereof and shall be
binding upon any assignee of, or purchaser of any participation in, any interest
in any of the Loans or Reimbursement Obligations from any Lender.
18. EXPENSES AND INDEMNIFICATION.
18.1. EXPENSES. The Borrowers jointly and severally agree to pay (i) the
reasonable costs of producing and reproducing this Credit Agreement, the other
Loan Documents and the other agreements and instruments mentioned herein; (ii)
the reasonable fees, expenses and disbursements of the Agent's Special Counsel
or any local counsel to the Agent incurred in connection with the preparation,
syndication, administration or interpretation of the Loan Documents and other
instruments mentioned herein, each closing hereunder, any amendments,
modifications, approvals, consents or waivers hereto or hereunder, or the
cancellation of any Loan Document upon payment in full in cash of all of the
Obligations or pursuant to any terms of such Loan Document for providing for
such cancellation; (iii) the reasonable fees, expenses and disbursements of each
of the Agent or any of its affiliates incurred by the Agent or such affiliate in
connection with the preparation, syndication, administration or interpretation
of the Loan Documents and other instruments mentioned herein, including all
title insurance premiums and surveyor, engineering, appraisal and examination
charges; (iv) any fees, costs, expenses and bank charges, including bank charges
for returned checks, incurred by the Agent in establishing, maintaining or
handling agency accounts, lock box accounts and other accounts for the
collection of any of the Collateral; (v) all reasonable out-of-pocket expenses
(including without limitation reasonable attorneys' fees and costs, which
attorneys may be employees of any Lender or the Agent, and reasonable
consulting, accounting, appraisal, investment banking and similar professional
fees and charges) incurred by any Lender or the Agent in connection with (A) the
enforcement of or preservation of rights under any of the Loan Documents against
any of the Borrowers or their Subsidiaries or the administration thereof after
the occurrence of a Default or Event of Default and (B) any litigation,
proceeding or dispute whether arising hereunder or otherwise, in any way related
to any Lender's or the Agent's relationship with any of the Borrowers or their
Subsidiaries; and (vi) all reasonable fees, expenses and disbursements of any
Lender or the Agent incurred in connection with UCC searches, UCC filings, PPSA
searches, PPSA filings, intellectual property searches, intellectual property
filings or mortgage recordings.
18.2. INDEMNIFICATION. The Borrowers jointly and severally agree to
indemnify and hold harmless each of the Agent, the Arranger, the affiliates of
the Agent and the Arranger, and the Lenders from and against any and all claims,
actions and suits whether groundless or otherwise, and from and against any and
all liabilities, losses, damages and expenses of every nature and character
arising out of this Credit Agreement or any of the other Loan Documents or the
transactions contemplated hereby including, without limitation, (i) any actual
or proposed use by any of the Borrowers or their Subsidiaries
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of the proceeds of any of the Loans or Letters of Credit, (ii) the reversal or
withdrawal of any provisional credits granted by the Agent upon the transfer of
funds from lock box, bank agency or concentration accounts or in connection with
the provisional honoring of checks or other items, (iii) any actual or alleged
infringement of any patent, copyright, trademark, service mark or similar right
of any of the Borrowers or their Subsidiaries comprised in the Collateral, (iv)
any of the Borrowers or their Subsidiaries entering into or performing this
Credit Agreement or any of the other Loan Documents or (v) with respect to each
of the Borrowers and their Subsidiaries and their respective properties and
assets, the violation of any Environmental Law, the presence, disposal, escape,
seepage, leakage, spillage, discharge, emission, release or threatened release
of any Hazardous Substances or any action, suit, proceeding or investigation
brought or threatened with respect to any Hazardous Substances (including, but
not limited to, claims with respect to wrongful death, personal injury or damage
to property), in each case including, without limitation, the reasonable fees
and disbursements of counsel and allocated costs of internal counsel incurred in
connection with any such investigation, litigation or other proceeding. In
litigation, or the preparation therefore, the Lenders, the Agent, the Arranger
and the affiliates of the Agent and the Arranger shall be entitled to select
their own counsel and, in addition to the foregoing indemnity, the Borrowers
jointly and severally agree to pay promptly the reasonable fees and expenses of
such counsel. EACH BORROWER ACKNOWLEDGES THAT THIS CREDIT AGREEMENT CONTAINS
PROVISIONS RELEASING EACH INDEMNITEE FROM LIABILITY AND/OR INDEMNIFYING AND
HOLDING HARMLESS EACH INDEMNITEE FOR, AMONG OTHER THINGS, INDEMNITEE'S OWN
NEGLIGENCE. EACH BORROWER AGREES THAT THE RELEASE AND/OR INDEMNITY PROVISIONS
CONTAINED IN THIS CREDIT AGREEMENT ARE CAPTIONED TO CLEARLY IDENTIFY THE RELEASE
AND/OR INDEMNITY PROVISIONS AND, THEREFORE, ARE SO CONSPICUOUS THAT SUCH
BORROWER HAS FAIR NOTICE OF THE EXISTENCE AND CONTENTS OF SUCH PROVISIONS. EACH
BORROWER HEREBY WAIVES ANY DEFENSES IT MIGHT ASSERT AGAINST EACH INDEMNITEE
BASED ON THE HOLDINGS OF THE TEXAS SUPREME COURT IN ETHYL CORP. v. DANIEL CONST.
CO., 725 S.W.2d 705 (TEX. 1987), AND DRESSER INDUSTRIES, INC. v. PAGE PETROLEUM,
INC., 853 S.W.2d 505 (TEX. 1993), AND OF THE UNITED STATES COURT OF APPEALS FOR
THE FIFTH CIRCUIT IN QUORUM HEALTH RESOURCES, L.L.C. v. MAVERICK COUNTY HOSPITAL
DISTRICT, 308 F.3d 451 (5TH CIR. 2002) AND ANY RELATED CASE LAW HOLDINGS. If,
and to the extent that the obligations of the Borrowers under this Section 18.2
are unenforceable for any reason, the Borrowers hereby jointly and severally
agree to make the maximum contribution to the payment in satisfaction of such
obligations which is permissible under applicable law.
18.3. SURVIVAL. The covenants contained in this Section 18 shall survive
payment or satisfaction in full of all other Obligations.
19. SURVIVAL OF COVENANTS, ETC.
All covenants, agreements, representations and warranties made herein,
in the Notes, in any of the other Loan Documents or in any documents or other
papers delivered by or on behalf of any of the Borrowers or their Subsidiaries
pursuant hereto shall be deemed to have been relied upon by the Lenders and the
Agent, notwithstanding any investigation heretofore or hereafter made by any of
them, and shall survive the making by the Lenders of any of the Loans and the
issuance, extension or renewal of any Letters of Credit, as herein contemplated,
and shall continue in full force and effect so long as any Letter of Credit or
any amount due under this Credit Agreement or the Notes or any of the other Loan
Documents remains outstanding or any Lender has any obligation to make any Loans
or the Agent has any obligation to issue, extend or renew any Letter of Credit,
and for such further time as may be otherwise expressly specified in this Credit
Agreement. All statements contained in any certificate or other paper delivered
to any Lender or the Agent at any time by or on behalf of any of the Borrowers
or
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their Subsidiaries pursuant hereto or in connection with the transactions
contemplated hereby shall constitute representations and warranties by such
Borrower or such Subsidiary hereunder.
20. ASSIGNMENT AND PARTICIPATION.
20.1. GENERAL CONDITIONS. The provisions of this Credit Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that the Borrowers
may not assign or otherwise transfer any of their rights or obligations
hereunder without the prior written consent of each Lender and no Lender may
assign or otherwise transfer any of its rights or obligations hereunder except
(a) to an Eligible Assignee or an Eligible Canadian Assignee in accordance with
the provisions of Section 20.2, (b) by way of participation in accordance with
the provisions of Section 20.5 or (c) by way of pledge or assignment of a
security interest subject to the restrictions of Section 20.7 (and any other
attempted assignment or transfer by any party hereto shall be null and void).
Nothing in this Credit Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby, Participants to the extent provided in
Section 20.5 and, to the extent expressly contemplated hereby, the Related
Parties of each of the Agent and the Lenders) any legal or equitable right,
remedy or claim under or by reason of this Credit Agreement or any of the other
Loan Documents.
20.2. ASSIGNMENTS. Any (a) Domestic Lender may at any time assign to one
or more Eligible Assignees all or a portion of its rights and obligations under
this Credit Agreement (including all or a portion of (i) its Domestic Revolving
Credit Commitment Percentage and Domestic Revolving Credit Commitment and the
same portion of the Domestic Revolving Credit Loans at the time owing to it, the
Domestic Revolving Credit Notes held by it and its participating interest in the
risk relating to any Letters of Credit, and (ii) its Term A Commitment
Percentage and Term A Commitment and the same portion of Term Loan A at the time
owing to it and the Term A Note held by it) and (b) Canadian Lender may at any
time assign all or a portion of its Canadian Commitment Percentage and Canadian
Loans outstanding to an Eligible Canadian Assignee; provided that in each case
referred to above:
(a) except in the cases of an assignment of the entire remaining
amount of the assigning Lender's Domestic Revolving Credit Commitment,
Term A Commitment, Canadian Commitment and the Loans at the time owing
to it or of an assignment to a Lender or a Lender Affiliate, the
aggregate amount of the Domestic Revolving Credit Commitment (which for
this purpose includes Revolving Credit Loans outstanding thereunder),
Canadian Commitment (which for this purpose includes Canadian Loans
outstanding thereunder) Term A Commitment, or, if the applicable
Revolving Credit Commitment is not then in effect, the principal
outstanding balance of the applicable Revolving Credit Loans of the
assigning Lender subject to each such assignment (determined as of the
date on which the Assignment and Acceptance, with respect to such
assignment is delivered to the Agent) shall not be less than $2,500,000
unless each of the Agent and, so long as no Default or Event of Default
has occurred and is continuing, each of the Borrowers otherwise consent
(each such consent not to be unreasonably withheld or delayed);
(b) each such assignment shall be in constant, and not varying,
percentages of all the assigning Lender's rights and obligations in
respect of each of the following, considered separately: (i) its
Domestic Revolving Credit Commitment Percentage and Domestic Revolving
Credit Commitment, the Domestic Revolving Credit Loans at the time owing
to it, and its participating interest in the risk relating to any
Letters of Credit, (ii) its Term A Commitment and the portion of Term
Loan A at any time owing to it, and (iii) its Canadian Commitment
Percentage and Canadian Commitment and the Canadian Loans at any time
owing to it;
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(c) any assignment of a Revolving Credit Commitment must be
approved by the Agent unless the Person that is the proposed assignee is
itself a Lender with a Revolving Credit Commitment (whether or not the
proposed assignee would otherwise qualify as an Eligible Assignee or an
Eligible Canadian Assignee); and
(d) the parties to each assignment shall execute and deliver to
the Agent an Assignment and Acceptance, together with a processing and
recordation fee of $3,500, and the Eligible Assignee or Eligible
Canadian Assignee, as the case may be, if it shall not be a Lender,
shall deliver to the Agent an Administrative Questionnaire.
Subject to acceptance and recording thereof by the Agent pursuant to
Section 20.3, from and after the effective date specified in each
Assignment and Acceptance, the Eligible Assignee or Eligible Canadian
Assignee, as the case may be, thereunder shall be a party to this Credit
Agreement and, to the extent of the interest assigned by such Assignment
and Acceptance have the rights and obligations of a Lender under this
Credit Agreement, and the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Acceptance, be
released from its obligations under this Credit Agreement (and, in the
case of an Assignment and Acceptance covering all of the assigning
Lender's rights and obligations under this Credit Agreement, such Lender
shall cease to be a party hereto) but shall continue to be entitled to
the benefits of (i) Sections 6.2.2, 6.6, 6.7, and 6.9 with respect to
facts and circumstances occurring prior to the effective date of such
assignment and (ii) Section 18.2 notwithstanding such assignment. Any
assignment or transfer by a Lender of rights or obligations under this
Credit Agreement that does not comply with this paragraph shall be
treated for purposes of this Credit Agreement as a sale by such Lender
of a participation in such rights and obligations in accordance with
Section 20.5.
20.3. REGISTER. The Agent, acting solely for this purpose as an agent of
the Borrowers, shall maintain at the Agent's Office a copy of each Assignment
and Acceptance delivered to it and a register for the recordation of the names
and addresses of the Lenders, the Revolving Credit Commitments and Term A
Commitments of, and principal amounts of the Loans owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries in
the Register shall be conclusive, and each of the Borrowers, the Agent and the
Lenders may treat each Person whose name is recorded in the Register pursuant to
the terms hereof as a Lender hereunder for all purposes of this Credit
Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrowers and any Lender, at any reasonable time
and from time to time upon reasonable prior notice.
20.4. NEW NOTES. Upon its receipt of an Assignment and Acceptance
executed by the parties to such assignment, together with each Note subject to
such assignment, the Agent shall (a) record the information contained therein in
the Register, and (b) give prompt notice thereof to the Borrowers and the
Lenders (other than the assigning Lender). Within five (5) Business Days after
receipt of such notice, the Borrowers, at their own expense, shall execute and
deliver to the Agent, in exchange for each surrendered Note, a new Note to the
order of such Eligible Assignee or if requested, Eligible Canadian Assignee, as
the case may be, in an amount equal to the amount assumed by such Eligible
Assignee or Eligible Canadian Assignee, as the case may be, pursuant to such
Assignment and Acceptance and, if the assigning Lender has retained some portion
of its obligations hereunder, a new Note to the order of the assigning Lender 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 Section 20.4,
upon the request of the holders of such New Notes the Borrowers shall deliver an
opinion of counsel, addressed to the Lenders and the Agent, relating to the due
authorization, execution and delivery of such new Notes and the legality,
validity and
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binding effect thereof, in form and substance satisfactory to the Lenders. The
surrendered Notes shall be cancelled and returned to the Borrowers.
20.5. PARTICIPATIONS. Any Lender may at any time, without the consent
of, or notice to, the Borrowers or the Agent, sell participations to any Person
(other than a natural person) (each, a "Participant") in all or a portion of
such Lender's rights and/or obligations under this Credit Agreement (including
all or a portion of its Revolving Credit Commitment, Term A Commitment and/or
the Loans owing to it; provided however, that a Lender may sell participations
in all or a portion of its Canadian Commitment Percentage and Canadian Loans
outstanding, only to an Eligible Canadian Assignee); provided further that (a)
such Lender's obligations under this Credit Agreement shall remain unchanged,
(b) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations and (c) the Borrowers, the Agent and the
other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Credit
Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Credit Agreement and to approve any amendment, modification or
waiver of any provision of this Credit Agreement; provided that such agreement
or instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver that would reduce
the principal of or the interest rate on any Loans, extend the term or increase
the amount of the Revolving Credit Commitment or Term A Commitment of such
Lender 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. Subject to
Section 20.6, each of the Borrowers agrees that each Participant shall be
entitled to the benefits of Sections 6.2.2, 6.6, 6.7, and 6.9 to the same extent
as if it were a Lender and had acquired its interest by assignment pursuant to
Section 20.2. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 15 as though it were a Lender, provided such
Participant agrees to be subject to Section 15 as though it were a Lender.
20.6. PAYMENTS TO PARTICIPANTS. A Participant shall not be entitled to
receive any greater payment under Sections 6.2.2, 6.6 and 6.7 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrowers' prior written consent.
20.7. MISCELLANEOUS ASSIGNMENT PROVISIONS. A Lender may at any time
grant a security interest in all or any portion of its rights under this Credit
Agreement to secure obligations of such Lender, including without limitation (a)
any pledge or assignment to secure obligations to the Bank of Canada or any of
the twelve Federal Reserve Banks organized under Section 4 of the Federal
Reserve Act, 12 U.S.C. Section 341 and (b) with respect to any Lender that is an
Approved Fund, to any lender or any trustee for, or any other representative of,
holders of obligations owed or securities issued by such Approved Fund as
security for such obligations or securities or any institutional custodian for
such Approved Fund or for such lender; provided that no such grant shall release
such Lender from any of its obligations hereunder, provide any voting rights
hereunder to the secured party thereof, substitute any such secured party for
such Lender as a party hereto or affect any rights or obligations of the
Borrowers or Agent hereunder.
20.8. ASSIGNEE OR PARTICIPANT AFFILIATED WITH THE BORROWERS. If any
assignee Lender is an Affiliate of any Borrower, then any such assignee Lender
shall have no right to vote as a Lender 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 Agent pursuant to Section 14.1 or Section
14.2, and the determination of the Required Lenders shall for all purposes of
this Credit Agreement and the other Loan Documents be made without regard to
such assignee Lender's interest in any of the Loans or Reimbursement
Obligations. If any Lender sells a participating interest in any of the Loans or
Reimbursement Obligations to a participant,
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and such participant is a Borrower or an Affiliate of any Borrower, then such
transferor Lender shall promptly notify the Agent of the sale of such
participation. A transferor Lender shall have no right to vote as a Lender
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 Agent
pursuant to Section 14.1 or Section 14.2 to the extent that such participation
is beneficially owned by a Borrower or any Affiliate of any Borrower, and the
determination of the Required Lenders shall for all purposes of this Credit
Agreement and the other Loan Documents be made without regard to the interest of
such transferor Lender in the Loans or Reimbursement Obligations to the extent
of such participation. The provisions of this Section 20.8 shall not apply to an
assignee Lender or participant which has disclosed to the other Lenders that it
is an Affiliate of any Borrower and which, following such disclosure, has been
excepted from the provisions of this Section 20.8 in a writing signed by the
Required Lenders determined without regard to the interest of such assignee
Lender or transferor Lender, to the extent of such participation, in Loans or
Reimbursement Obligations.
20.9. SYNDICATION. Each of the Borrowers hereby agrees to assist and
cooperate with the Arranger in its efforts to complete the syndication of the
commitments and Loans hereunder, including, but not limited to, promptly
preparing and providing materials and information reasonably deemed necessary by
the Arranger to successfully complete and otherwise facilitate such syndication,
including, without limitation, all projections prepared by or on behalf of the
Borrowers relating to the transactions contemplated hereby. Each of the
Borrowers and its directors, officers, employees and agents shall, at the
reasonable request of the Arranger, meet with potential lenders and provide such
additional information as such Persons may reasonably request.
20.10. LENDER MERGER ETC. Nothing herein shall be deemed to restrict the
merger, amalgamation or consolidation of any Lender into any Eligible Assignee
or Eligible Canadian Assignee, as the case may be, and nothing herein shall be
deemed to require that an Assignment and Acceptance or any other consent need be
executed with respect to such merger.
20.11. SPECIAL PURPOSE FUNDING VEHICLE. Notwithstanding anything to the
contrary contained in this Section 20, any Domestic Lender (a "Granting Lender")
may grant to a special purpose funding vehicle (an "SPC") of such Granting
Lender, identified as such in writing from time to time delivered by the
Granting Lender to the Agent and the Borrowers, the option to provide to the
Borrowers all or any part of any Domestic Loan that such Granting Lender would
otherwise be obligated to make to the Borrowers pursuant to this Credit
Agreement, provided that (a) nothing herein shall constitute a commitment to
make any Domestic Loan by any SPC, (b) the Granting Lender's obligations under
this Credit Agreement shall remain unchanged, (c) the Granting Lender should
retain the sole right to enforce this Credit Agreement and to approve any
amendment, modification or waiver of any provision of this Credit Agreement and
(d) if an SPC elects not to exercise such option or otherwise fails to provide
all or any part of such Domestic Loan, the Granting Lender shall be obligated to
make such Domestic Loan pursuant to the terms hereof. The making of a Loan by an
SPC hereunder shall utilize the Domestic Revolving Credit Commitment or Term A
Commitment of the Granting Lender to the same extent, and as if, such Domestic
Loan were made by the Granting Lender. Each party hereto hereby agrees that no
SPC shall be liable for any expense reimbursement, indemnity or similar payment
obligation under this Credit Agreement (all liability for which shall remain
with the Granting Lender). In furtherance of the foregoing, each party hereto
hereby agrees (which agreement shall survive the termination of this Credit
Agreement) that, prior to the date that is one year and one day after the later
of (i) the payment in full of all outstanding senior indebtedness of any SPC and
(ii) the Revolving Credit Loan Maturity Date, or, as applicable, the Term Loan A
Maturity Date, it will not institute against, or join any other person in
instituting against, such SPC any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or similar proceedings under the laws of
the United States of America or any State thereof. In addition, notwithstanding
anything to the contrary contained in this Section 20.11, any SPC may (A) with
notice to, but
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(except as specified below) without the prior written consent of, the Borrowers
or the Agent and without paying any processing fee therefore, assign all or a
portion of its interests in any Domestic Loans to its Granting Lender or to any
financial institutions (consented to by the Agent and, so long as no Default or
Event of Default has occurred and is continuing, the Borrowers, which consents
shall not be unreasonably withheld or delayed) providing liquidity and/or credit
facilities to or for the account of such SPC to fund the Domestic Loans made by
such SPC or to support the securities (if any) issued by such SPC to fund such
Domestic Loans and (B) disclose on a confidential basis any non-public
information relating to its Domestic Loans (other than financial statements
referred to in Sections 8.4 or 9.4) to any rating agency, commercial paper
dealer or provider of a surety, guarantee or credit or liquidity enhancement to
such SPC. In no event shall the Borrowers be obligated to pay to an SPC that has
made a Domestic Loan any greater amount than the Borrowers would have been
obligated to pay under this Credit Agreement if the Granting Lender had made
such Domestic Loan. An amendment to this Section 20.11 without the written
consent of an SPC shall be ineffective insofar as it alters the rights and
obligations of such SPC.
21. NOTICES, ETC.
21.1. NOTICES GENERALLY. Except as otherwise expressly provided in this
Credit Agreement, all notices and other communications made or required to be
given pursuant to this Credit Agreement or the Notes or any Letter of Credit
Applications shall be in writing and shall be delivered in hand, mailed by
United States of America or Canadian registered or certified first class mail,
postage prepaid, sent by overnight courier, or sent by facsimile and confirmed
by delivery via overnight courier or overnight postal service, addressed as
follows:
(a) if to any of the Borrowers, at 2481 Manana Drive, Dallas,
Texas 75220, Attention: Chief Financial Officer or at such other address
for notice as the Borrowers shall last have furnished in writing to the
Person giving the notice;
(b) if to the Agent, at 100 Federal Street, Boston, Massachusetts
02110, USA, Attention: Alexandra Burke, Director, or such other address
for notice as the Agent shall last have furnished in writing to the
Person giving the notice; and
(c) if to any Lender, at such Lender's address set forth on
Schedule 1 or Schedule 2, as applicable, hereto, or such other address
for notice as such Lender shall have last furnished in writing to the
Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or
made and to have become effective (i) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer or the sending of such facsimile and
(ii) if sent by registered or certified first-class mail, postage prepaid, on
the third Business Day following the mailing thereof.
21.2. ELECTRONIC COMMUNICATIONS. Notices and other communications to
Lenders hereunder may be delivered or furnished by electronic communication
(including e-mail and Internet or intranet websites) pursuant to procedures
approved by the Agent, provided that the foregoing shall not apply to notices to
any Lender pursuant to Sections 2.6, 3.1 and 5.1 if such Lender, as applicable,
has notified the Agent that it is incapable of receiving notices under Sections
2.6, 3.1 and 5.1 by electronic communication. The Agent or each of the Borrowers
may, in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it,
provided that approval of such procedures may be limited to particular notices
or communications. Unless the Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender's receipt of an
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acknowledgement from the intended recipient (such as by the "return receipt
requested" function, as available, return e-mail or other written
acknowledgement), provided that if such notice or other communication is not
sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefore.
22. GOVERNING LAW.
THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED
THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH OF MASSACHUSETTS
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). EACH OF THE
BORROWERS AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS CREDIT AGREEMENT OR
ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH
OF MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE
NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS IN ANY SUCH SUIT
BEING MADE UPON THE BORROWERS BY MAIL AT THE ADDRESS SPECIFIED IN SECTION 21.
EACH OF THE BORROWERS HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER
HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS
BROUGHT IN AN INCONVENIENT COURT.
23. HEADINGS.
The captions in this Credit Agreement are for convenience of reference
only and shall not define or limit the provisions hereof. Delivery by facsimile
by any of the parties hereto of an executed counterpart hereof or of any
amendment or waiver hereto shall be as effective as an original executed
counterpart hereof or of such amendment or waiver.
24. COUNTERPARTS.
This Credit Agreement and any amendment hereof may be executed in
several counterparts and by each party on a separate counterpart, each of which
when executed and delivered shall be an original, and all of which together
shall constitute one instrument. In proving this Credit Agreement it shall not
be necessary to produce or account for more than one such counterpart signed by
the party against whom enforcement is sought.
25. ENTIRE AGREEMENT, ETC.
The Loan Documents and any other documents executed in connection
herewith or therewith express the entire understanding of the parties with
respect to the transactions contemplated hereby. Neither this Credit Agreement
nor any term hereof may be changed, waived, discharged or terminated, except as
provided in Section 27.
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26. WAIVER OF JURY TRIAL.
Each of the Borrowers hereby waives its right to a jury trial with
respect to any action or claim arising out of any dispute in connection with
this Credit Agreement, the Notes or any of the other Loan Documents, any rights
or obligations hereunder or thereunder or the performance of which rights and
obligations. Except as prohibited by law, each of the Borrowers hereby waives
any right it may have to claim or recover in any litigation referred to in the
preceding sentence any special, exemplary, punitive or consequential damages or
any damages other than, or in addition to, actual damages. Each of the Borrowers
(i) certifies that no representative, agent or attorney of any Lender or the
Agent has represented, expressly or otherwise, that such Lender or the Agent
would not, in the event of litigation, seek to enforce the foregoing waivers and
(ii) acknowledges that the Agent and the Lenders have been induced to enter into
this Credit Agreement, the other Loan Documents to which it is a party by, among
other things, the waivers and certifications contained herein.
27. CONSENTS, AMENDMENTS, WAIVERS, ETC.
Except as otherwise expressly provided in this Credit Agreement and the
Fee Letter, any consent or approval required or permitted by this Credit
Agreement to be given by the Lenders may be given, and any term of this Credit
Agreement, the other Loan Documents or any other instrument related hereto or
mentioned herein may be amended, and the performance or observance by any of the
Borrowers or their Subsidiaries of any terms of this Credit Agreement, the other
Loan 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 Borrowers and the written consent of the Required Lenders.
Notwithstanding the foregoing, no amendment, modification or waiver shall:
(a) without the written consent of the Borrowers and each Lender
directly affected thereby:
(i) decrease the rate of interest on the Notes (other than
interest accruing pursuant to Section 6.10.2 following the effective
date of any waiver by the Required Lenders of the Default or Event of
Default relating thereto);
(ii) release a material portion of the Collateral;
(iii) release any Borrower or any Person that is liable, whether
directly or contingently, for payment obligations hereunder;
(iv) change or modify the term of the Notes, the timing or amount
of any required payments of principal and interest hereunder, any rates
of interest payable hereunder, the application of proceeds from any
mandatory prepayment of the Term Loan A, or the amount of the Revolving
Credit Commitments (other than reallocations between the Canadian
Commitment and the Domestic Revolving Credit Commitment permitted under
Section 2.3.2) and the Term A Commitments of the Lenders;
(v) amend or waive the amount of Commitment Fees or Letter of
Credit Fees hereunder;
(b) without the written consent of all of the Lenders:
(i) amend or waive the definition of Required Lenders or this
Section 27;
(c) without the written consent of the Agent:
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(i) amend or waive the amount of the Agent's fee under the Fee
Letter, the Letter of Credit Fees, the Fronting Fees or any other fees
or amounts payable for the Agent's account;
(ii) amend or waive Section 5 or Section 16 hereof.
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 Agent or any Lender in exercising any right shall operate as
a waiver thereof or otherwise be prejudicial thereto. No notice to or demand
upon any Borrower shall entitle any Borrower to other or further notice or
demand in similar or other circumstances. Notwithstanding anything in this
Section 27 to the contrary, the Agent may terminate its security interest in and
otherwise release any Collateral or any Borrower sold, transferred or otherwise
disposed of by any Borrower or any Subsidiary of any Borrower if such
disposition is in compliance with Section 10.5.2 and otherwise with the terms
hereof.
28. SEVERABILITY.
The provisions of this Credit Agreement are severable and if any one
clause or provision hereof shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction, and shall
not in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision of this Credit Agreement in any jurisdiction.
29. RIGHT TO PUBLICIZE.
Each of the Borrowers hereby acknowledges that the Agent will have the
right to publicize the transactions contemplated hereby by means of a tombstone
advertisement or other customary advertisement in newspapers and other
periodicals and, for such purpose, the Agent may utilize any trade name,
trademark, logo or other distinctive symbol associated with any of the Borrowers
or their Subsidiaries or any of their businesses. Each of the Agent agrees to
provide the Borrowers with the opportunity to review any such tombstone
advertisement prior to publication thereof and to provide reasonable comments as
to the accuracy and contents thereof.
30. USURY.
All agreements between the Borrowers, the Agent and the Lenders are
hereby expressly limited so that in no contingency or event whatsoever, whether
by reason of acceleration of the maturity of any Note or otherwise, shall the
amount paid or agreed to be paid to the Lenders and the Agent for the use or the
forbearance of the Indebtedness represented by the Notes exceed the maximum
permissible under applicable law, including, without limitation, the Criminal
Code (Canada). In this regard, it is expressly agreed that it is the intent of
the Borrowers, the Agent and the Lenders, in the execution, delivery and
acceptance of the Notes, to contract in strict compliance with the laws of the
Commonwealth of Massachusetts. If, under any circumstances whatsoever,
performance or fulfillment of any provision of the Notes or any of the other
Loan Documents at the time such provision is to be performed or fulfilled shall
involve exceeding the limit of validity prescribed by applicable law, then the
obligation so to be performed or fulfilled shall be reduced automatically to the
limits of such validity, and if under any circumstances whatsoever the Lenders
and the Agent should ever receive as interest an amount which would exceed the
highest lawful rate, such amount which would be excessive interest shall be
applied to the reduction of the principal balance evidenced by the Notes and not
to the payment of interest. The provisions of this Section 30 shall control
every other provision of this Credit Agreement and the Notes.
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31. DOCUMENTATION AGENT.
The Documentation Agent shall have no rights, powers, duties,
obligations, liabilities or responsibilities under this Credit Agreement or any
other of the Loan Documents other than these applicable to all Lenders as such.
It is acknowledged by all parties to this Credit Agreement that the title of
"Documentation Agent" is merely for convenience and does not carry with it any
duties, obligations, responsibilities or liabilities arising with respect to the
form or sufficiency of the Loan Documents or otherwise. Without limiting the
foregoing, the Documentation Agent shall not have or be deemed to have any
fiduciary relationship to any Lender or any other party to the Loan Documents.
32. TRANSITIONAL ARRANGEMENTS.
32.1. FORMER CREDIT AGREEMENT SUPERSEDED. On the Closing Date, this
Credit Agreement shall supersede the Former Credit Agreement in its entirety,
except as provided in this Section 32. On the Closing Date, the rights and
obligations of the parties evidenced by the Former Credit Agreement shall be
evidenced by the Credit Agreement and the other Loan Documents, the "Loans" as
defined in the Former Credit Agreement shall be converted to Loans as defined
herein and the Existing Letters of Credit issued by the Agent for the account of
the Borrowers or any of their Subsidiaries prior to the Closing Date shall be
converted into Letters of Credit under this Credit Agreement. The parties hereto
agree that the changes to the terms and conditions of the Former Credit
Agreement set out herein and the execution of these presents shall not
constitute novation and all the security interests, hypothecs, pledges and other
collateral of whatever nature securing any of the Obligations shall continue to
apply to the Former Credit Agreement, as amended and restated by these presents,
and to the other Loan Documents. Without limiting the generality of the
foregoing and to the extent necessary, the Lenders and the Agent reserve all of
their rights under each of the Security Documents.
32.2. RETURN AND CANCELLATION OF PRIOR NOTES. As soon as reasonably
practicable after the Closing Date, the Lenders under the Former Credit
Agreement will promptly return to the Borrowers, marked "Substituted" or
"Cancelled", as the case may be, any notes held by the Lenders pursuant to the
Former Credit Agreement.
32.3. INTEREST AND FEES UNDER SUPERSEDED AGREEMENT. All interest and
fees and expenses, if any, owing or accruing under or in respect of the Former
Credit Agreement through the Closing Date shall be calculated as of the Closing
Date (pro rated in the case of any fractional periods), and shall be paid on the
Closing Date. Commencing on the Closing Date, the Commitment Fees hereunder
shall be payable by the Borrowers to the Agent for the account of the Lenders in
accordance with Section 2.2.
33. PARI PASSU TREATMENT.
(a) Notwithstanding anything to the contrary set forth herein, each
payment or prepayment of principal and interest received after the occurrence of
an Event of Default hereunder shall be distributed pari passu among the Lenders,
in accordance with the aggregate outstanding principal amount of the Obligations
owing to each Lender divided by the aggregate outstanding principal amount of
all Obligations.
(b) Following the occurrence and during the continuance of any Event of
Default, each Lender agrees that it shall be deemed to have automatically upon
the occurrence of such Event of Default purchased from each other Lender a
participation in the risk associated with the Notes and Obligations held by such
other Lender, so that the aggregate principal amount of the Notes and
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Obligations held by each Lender shall be equivalent to such Lender's Applicable
Percentage (without duplication in the case of any Canadian Lender and its
affiliated Domestic Lender, whose Notes and Obligations shall be taken as a
whole). Upon demand by the Agent, made at the request of the Required Lenders,
each Lender that has purchased such participation (a "Purchasing Lender") shall
pay the amount of such participation to the Agent for the account of each Lender
whose outstanding Loans exceed their Applicable Percentages (without duplication
in the case of any Canadian Lender and its affiliated Domestic Lender, whose
Notes and Obligations shall be taken as a whole). Any such participation may, at
the option of such Purchasing Lender, be paid in U.S. Dollars or Canadian
Dollars (the "Funding Currency") (in an amount equal to the then applicable
Dollar Equivalent or Canadian Dollar Equivalent, as the case may be, amount of
such participation) and such payment shall be converted by the Agent at the
Exchange Rate calculated on or around such day into the currency of the Loan in
which such participation is being purchased. The Borrowers agree to indemnify
each Purchasing Lender for any loss, cost or expense incurred by such Purchasing
Lender as a result of entering into any reasonable hedging arrangements between
the Funding Currency and the currency of the Loan in which such participation is
being purchased in connection with the funding of such participation or as a
result of any payment on account of such participation in a currency other than
that funded by the Purchasing Lender.
(c) Each Borrower expressly consents to the foregoing arrangements and
agrees that any Person holding such a participation in the Notes, Loans and the
Obligations deemed to have been so purchased may exercise any and all rights of
banker's lien, setoff or counterclaim with respect to any and all moneys owing
by such Borrower to such Person as fully as if such Person had made a Loan
directly to such Borrower in the amount of such participation.
(d) Nothing contained in this Section 33 shall impair, as between the
Borrowers and any Lender, the obligation of the applicable Borrowers to pay such
Lender all amounts payable in respect of such Lender's Notes, Loans, and other
Obligations as and when the same shall become due and payable in accordance with
the terms thereof.
[Remainder of page intentionally left blank.]
IN WITNESS WHEREOF, the undersigned have duly executed this Credit
Agreement as a sealed instrument as of the date first set forth above.
DAVE & BUSTERS, INC.
By: _________________________________________
Name: W.C. Hammett, Jr.
Title: Senior Vice President &
Chief Financial Officer
DAVE & BUSTER'S I, L.P.
By: DAVE & BUSTER'S, INC., as general partner
By: _________________________________________
Name: W.C. Hammett, Jr.
Title: Senior Vice President &
Chief Financial Officer
DAVE & BUSTER'S OF ILLINOIS, INC.
By: _________________________________________
Name: W.C. Hammett, Jr.
Title: Vice President
DAVE & BUSTER'S OF GEORGIA, INC.
By: _________________________________________
Name: W.C. Hammett, Jr.
Title: Vice President
DAVE & BUSTER'S OF PENNSYLVANIA, INC.
By: _________________________________________
Name: W.C. Hammett, Jr.
Title: Vice President
DANB TEXAS, INC.
By: _________________________________________
Name: W.C. Hammett, Jr.
Title: Vice President
DAVE & BUSTER'S OF MARYLAND, INC.
By: _________________________________________
Name: W.C. Hammett, Jr.
Title: Vice President
DAVE & BUSTER'S OF CALIFORNIA, INC.
By: _________________________________________
Name: W.C. Hammett, Jr.
Title: Vice President
DAVE & BUSTER'S OF COLORADO, INC.
By: _________________________________________
Name: W.C. Hammett, Jr.
Title: Vice President
DAVE & BUSTER'S OF NEW YORK, INC.
By: _________________________________________
Name: W.C. Hammett, Jr.
Title: Vice President
DAVE & BUSTER'S OF FLORIDA, INC.
By: _________________________________________
Name: W.C. Hammett, Jr.
Title: Vice President
DAVE & BUSTER'S OF PITTSBURGH, INC.
By: _________________________________________
Name: W.C. Hammett, Jr.
Title: Vice President
D&B REALTY HOLDING, INC.
By: _________________________________________
Name: W.C. Hammett, Jr.
Title: Vice President
DAVE & BUSTER'S OF HAWAII, INC.,
By: _________________________________________
Name: W.C. Hammett, Jr.
Title: Vice President
D&B LEASING, INC.
By: _________________________________________
Name: W.C. Hammett, Jr.
Title: Vice President
6131646 CANADA INC.
By: _________________________________________
Name: W.C. Hammett, Jr.
Title: Vice President
FLEET NATIONAL BANK, individually and as Agent
By: _________________________________________
Name:
Title:
BANK ONE, NA
(MAIN OFFICE, CHICAGO, ILLINOIS)
By: _________________________________________
Name:
Title:
THE FROST NATIONAL BANK
By: _________________________________________
Name:
Title:
SOUTHWEST BANK OF TEXAS, N.A.
By: _________________________________________
Name:
Title: