EXHIBIT 4.1.1
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REVOLVING CREDIT AGREEMENT
DATED AS OF DECEMBER 19, 2003
BY AND BETWEEN
PANERA, LLC,
AS BORROWER,
AND
BANK OF AMERICA, N.A.,
AS LENDER
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TABLE OF CONTENTS
PAGE NO.
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REVOLVING CREDIT AGREEMENT............................................................................ 1
ARTICLE I. DEFINITIONS................................................................................ 1
ARTICLE II. THE ADVANCES.............................................................................. 13
2.1 Advances............................................................................ 13
2.2 Advances by Borrower................................................................ 16
2.3 Increased Costs; Capital Adequacy................................................... 17
2.4 Liquidation Fee..................................................................... 18
2.5 Basis for Determining LIBOR Rate Inadequate or Unfair............................... 18
2.6 Payments............................................................................ 19
2.7 Setoff; etc......................................................................... 19
2.8 Revolving Credit Commitment Fee..................................................... 19
2.9 Other Fees.......................................................................... 20
2.10 Application of Payments and Collections............................................. 20
2.11 Letters of Credit................................................................... 21
ARTICLE III. CONDITIONS PRECEDENT..................................................................... 23
3.1 Conditions Precedent to Effectiveness............................................... 23
3.2 Conditions Precedent to All Advances, and Issuances of Letters of Credit............ 25
3.3 Conditions Subsequent............................................................... 26
ARTICLE IV. REPRESENTATIONS AND WARRANTIES............................................................ 26
4.1 Organization; etc................................................................... 26
4.2 Due Authorization................................................................... 26
4.3 Subsidiaries........................................................................ 27
4.4 Validity of the Agreement........................................................... 27
4.5 Financial Statements................................................................ 27
4.6 Business............................................................................ 27
4.7 Litigation; etc..................................................................... 27
4.8 Compliance with Law................................................................. 27
4.9 ERISA Compliance.................................................................... 28
4.10 Indebtedness and Liabilities........................................................ 28
4.11 No Investments...................................................................... 28
4.12 Use of Proceeds..................................................................... 28
4.13 Governmental Regulation............................................................. 28
4.14 Margin Stock........................................................................ 29
4.15 Investment Company Act.............................................................. 29
4.16 Accuracy of Information............................................................. 29
4.17 Tax Returns; Audits................................................................. 29
4.18 Environmental and Safety Regulations................................................ 29
4.19 Payment of Wages.................................................................... 30
4.20 Intellectual Property............................................................... 30
4.21 Forecasts........................................................................... 30
4.22 Solvency............................................................................ 30
4.23 No Default.......................................................................... 30
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4.24 No Material Adverse Occurrence...................................................... 31
4.25 Material Contracts.................................................................. 31
ARTICLE V. CERTAIN AFFIRMATIVE COVENANTS.............................................................. 31
5.1 Financial Information; etc.......................................................... 31
5.2 Maintenance of Existence; etc....................................................... 33
5.3 Maintenance of Properties and Material Contracts.................................... 33
5.4 Payment of Taxes; etc............................................................... 33
5.5 Compliance with Laws................................................................ 34
5.6 Books and Records; etc.............................................................. 34
5.7 Insurance........................................................................... 34
5.8 Maintain Business and Fiscal Year End............................................... 35
5.9 ERISA............................................................................... 35
5.10 Changes to GAAP..................................................................... 35
5.11 Use of Proceeds..................................................................... 35
5.12 Payment of Indebtedness; Loans...................................................... 36
5.13 Subsidiary Guaranty................................................................. 36
5.14 Survival of Warranties and Representations.......................................... 36
ARTICLE VI. CERTAIN FINANCIAL COVENANTS AND NEGATIVE COVENANTS........................................ 36
6.1 Fixed Charge Coverage Ratio......................................................... 36
6.2 Maximum Adjusted Total ; Leverage Ratio............................................. 36
6.3 Limitations on Indebtedness......................................................... 36
6.4 Liens............................................................................... 37
6.5 Dividends, Stock Purchase and Distributions......................................... 38
6.6 Sales of Assets..................................................................... 38
6.7 Liquidations, Mergers and Consolidations............................................ 38
6.8 Disposition of Securities of a Subsidiary........................................... 38
6.9 Investments......................................................................... 39
6.10 Transactions with Affiliates........................................................ 39
6.11 Acquisitions........................................................................ 39
6.12 Rate Hedging Obligations............................................................ 39
6.13 Amendment and Waiver................................................................ 39
6.14 Limitation on Guarantees............................................................ 39
6.15 ERISA Liabilities................................................................... 39
6.16 Material Contracts.................................................................. 39
ARTICLE VII. EVENTS OF DEFAULT........................................................................ 40
7.1 Events of Default................................................................... 40
7.2 Action if Event of Default.......................................................... 42
7.3 Remedies............................................................................ 42
ARTICLE VIII. MISCELLANEOUS........................................................................... 43
8.1 Waivers, Amendments; etc............................................................ 43
8.2 Payment Dates....................................................................... 43
8.3 Notices............................................................................. 43
8.4 Costs and Expenses.................................................................. 43
8.5 Indemnification..................................................................... 44
8.6 Severability........................................................................ 45
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8.7 Governing Law....................................................................... 45
8.8 Successors and Assigns.............................................................. 45
8.9 Execution in Counterparts; Facsimile................................................ 46
8.10 Financial Information............................................................... 46
8.11 Entire Agreement.................................................................... 47
8.12 Other Relationships................................................................. 47
8.13 Directly or Indirectly.............................................................. 47
8.14 Arbitration......................................................................... 47
8.15 Consent to Jurisdiction............................................................. 48
8.16 Waiver of Jury Trial................................................................ 49
8.17 Rules of Construction............................................................... 49
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ANNEX I - List of Jurisdictions in which the Borrower is Qualified to Do
Business
ANNEX II - List of Subsidiaries; Jurisdictions of Incorporation and
Qualification to do Business and Stock Ownership
ANNEX III - Indebtedness; Liens
ANNEX IV - Approved Acquisitions
EXHIBIT A - Form of Notice of Borrowing
EXHIBIT B - Form of Revolving Credit Note
EXHIBIT C - Form of Legal Opinion of Counsel to Borrower and their
Subsidiaries
EXHIBIT D - Form of Loan Certificate
EXHIBIT E - Form of Compliance Certificate
EXHIBIT F - Form of Application and Agreement for Standby Letter of Credit
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REVOLVING CREDIT AGREEMENT
This Revolving Credit Agreement dated as of December 19, 2003 by and
between Panera, LLC, a Delaware limited liability company (the "Borrower"), and
Bank of America, N.A., a national banking association (the "Lender).
WHEREAS, the Borrower has requested and the Lender has agreed to
provide, subject to the terms and conditions hereof, certain extensions of
credit to the Borrower.
NOW, THEREFORE, in consideration of the terms and conditions contained
herein, and of any loans or extensions of credit heretofore, now or hereafter
made to or for the benefit of the Borrower by the Lender, the parties hereto
agree as follows:
ARTICLE I.
DEFINITIONS
The following capitalized terms when used in this Agreement shall have
the following meanings:
"Acquisition" means (whether by purchase, exchange, issuance or
contribution of stock, debt or other securities, merger, reorganization, joint
venture or otherwise) any transaction, or any series of related transactions by
which any Borrower and/or its Subsidiaries directly or indirectly (i) acquires
any Person, which Person shall then become consolidated with any Borrower or any
Subsidiary in accordance with GAAP, (ii) acquires all or any substantial amount
of the assets of any Person or division thereof or (iii) acquires (in one
transaction or as the most recent transaction in a series of transactions) fifty
percent (50%) or more (by percentage of voting power or by percentage of equity
interests or both) of the outstanding Voting Stock or other interests of a
corporation, partnership, limited partnership or other entity. For purposes of
this definition, the amount of assets shall be deemed "substantial" if such
assets have a fair market value in excess of $2,500,000.
"Adjusted LIBOR Rate" shall mean a rate per annum determined pursuant
to the following formula:
Adjusted LIBOR Rate = LIBOR Rate
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1 - Reserve Requirement
"Adjusted Total Leverage Ratio" shall mean the ratio of (i) (a) total
Funded Debt of the Borrower for the immediately preceding 12 months, plus (b)
eight (8) multiplied by the Rent Expense for the same period to (ii) EBITDAR.
"Advance" shall have the meaning set forth in Section 2.1(a).
"Affiliate" shall mean and include, with respect to any Person, any
Person which directly or indirectly controls, is controlled by, or is under
common control with such Person and in addition, in the case of the Borrower,
includes each officer, director, joint venturer and partner, and each
stockholder or member deemed to have control pursuant to the next sentence of
this definition, of each of the Borrower. For purposes of this definition, a
Person shall be deemed to
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control another Person if the controlling Person owns or controls, directly or
indirectly, ten percent (10%) or more of the shares of stock, other equity
interests or voting power of the controlled Person or possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of the controlled Person, whether through ownership of stock, by
contract or otherwise.
"Agreement" shall mean this Revolving Credit Agreement as originally
executed and as amended, modified or supplemented from time to time.
"Agreement Date" shall mean December 19, 2003.
"Applicable Fee Percentage" shall have the meaning set forth in Section
2.8(b).
"Applicable Margin" shall mean the interest rate margin applicable to
Advances hereunder as determined in accordance with Section 2.1(j).
"Base Rate" shall mean, at any time, a fluctuating rate of interest per
annum equal to the higher of (i) the Prime Rate for such date, and (ii) the
Federal Funds Rate in effect at such time plus one-half of one percent (0.50%).
"Base Rate Loan" shall mean, as of any date, an Advance designated or
maintained as a "Base Rate Loan" pursuant to Section 2.1.
"Board of Directors" shall mean the Board of Directors of the Borrower.
"Borrower" shall mean, Panera, LLC, a Delaware limited liability
company.
"Business Day" shall mean any day, other than a Saturday or Sunday, on
which commercial banks and foreign exchange markets are open for business in New
York, New York and Atlanta, Georgia and, if such day relates to an event, a
transaction or a notice with respect to a LIBOR Base Loan, a day which is also a
day on which dealings in Dollar deposits are carried out in the London interbank
market.
"Capital Lease" shall mean a lease of (or other agreement conveying the
right to use) real and /or personal property, which obligation is, or in
accordance with GAAP (including Statement of Financial Accounting Standards No.
13 of the Financial Accounting Standards Board) is required to be, classified
and accounted for as a capital lease on a balance sheet of such Person.
"Capital Lease Obligations" shall mean, with respect to any Person, any
obligation of such Person to pay rent or other amounts under a Capital Lease and
for purposes of this Agreement the amount of each Capital Lease Obligation shall
be the capitalized amount thereof determined in accordance with GAAP.
"Cash Account" shall have the meaning set forth in Section 2.11.
"Change of Control" shall mean (i) the acquisition of ownership, or the
execution or making of any agreement to acquire ownership, directly or
indirectly, in one or more transactions, through purchase, merger, joint
venture, reorganization or otherwise (including the
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agreement to act in concert without anything more), by any Person or group of
Persons acting in concert, of (A) beneficial ownership or control of securities
representing 50% or more of the voting power of the Voting Stock of the Borrower
or (B) all or any substantial portion of the assets of the Borrower. For
purposes of this definition, the terms "Person" and "group" shall include the
meanings for such terms as used for purposes of Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), whether or not
applicable, and "beneficial ownership" shall include the meaning of "beneficial
owner" as that term is used in Rules 13d-3 and 13d-5 under the Exchange Act,
whether or not applicable, and a Person shall be deemed to have "beneficial
ownership" of all shares that such Person has the right to acquire (whether such
right is exercisable immediately or with the passage of time or the occurrence
of a contingency).
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Commitment or Commitment(s)" shall mean and refer to the Revolving
Loan Commitment.
"Compliance Certificate" shall have the meaning set forth in Section
5.1(c).
"Credit Parties" shall mean, collectively, each of the Borrower and the
Guarantor.
"Default" shall mean any event which, regardless of whether there shall
have occurred any giving of notice or lapse of time, or both, would be necessary
to constitute an Event of Default.
"Default Rate" shall mean a simple interest rate per annum equal to the
higher of (i) the Base Rate plus two percent (2%) and (ii) the Adjusted LIBOR
Rate plus the Applicable Margin with respect to LIBOR Base Loans plus two
percent (2%).
"Dollars" or "$" shall mean the basic unit of the lawful currency of
the United States of America.
"EBITDA" of any Person shall mean, for any period for which the amount
thereof is to be determined, Net Income (or loss) of such Person for such
period, plus (to the extent deducted in determining Net Income and without
duplication to adjustments to net income of such Person (determined in
accordance with GAAP) made in the determination of Net Income) the sum of (i)
Federal, state or local income taxes of such Person during such period, (ii)
Interest Expense of such Person during such period, (iii) depreciation and
amortization of such Person during such period (net of amortization of deferred
rent incentives) and (iv) non-cash charges related to stock incentive plans.
"EBITDAR" shall mean, for any period for which the amount thereof is to
be determined, the sum of (without duplication) (i) the EBITDA of the Borrower
for such period, and (ii) the Rent Expense during such period.
"Effective Date" shall mean the date on which all conditions set forth
in Article III (other than conditions subsequent set forth in Section 3.3, if
any, not yet required to be satisfied) are satisfied.
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"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended, and any successor statute of similar import, together with the
regulations thereunder and under the Code, in each case as in effect from time
to time. References to sections of ERISA shall be construed to also refer to any
successor sections.
"ERISA Affiliate" shall mean any Person, including Affiliates or
Subsidiaries of the Borrower, that is a member of any group of organizations or
a controlled group of trades or businesses, as described in Sections 414(b),
414(c), 414(m) or 414(o) of the Code or Section 4001 of ERISA, of which any
Borrower is a member.
"Event of Default" shall mean any Event of Default described in Article
VII.
"Exchange Act" shall have the meaning set forth in the definition of
Change of Control in Article I.
"Federal Funds Rate" means a fluctuating interest rate per annum equal
for each day 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 which is a Business Day, the
average of the quotations for such day on such transactions received by the
Lender from three Federal funds brokers of recognized standing selected by it.
"Fixed Charges" shall mean, for any period for which the amount thereof
is to be determined, the sum of the following (without duplication) (i) Interest
Expense of the Borrower for such period, plus (ii) Rent Expense for such period,
plus (iii) Capital Lease Obligations paid or required to be paid by the Borrower
during such period, plus (iv) all payments of principal made or required to be
made by the Borrower during such period on Indebtedness for borrowed money
(other than Capital Leases), excluding principal amounts paid prior to the
Effective Date with respect to any outstanding credit facility or similar
Indebtedness of the Borrower that was completely and permanently repaid and
retired on or prior to the Effective Date.
"Funded Debt" of any Person shall mean all Indebtedness owed or
Guaranteed by such Person.
"GAAP" shall mean generally accepted accounting principles in the
United States consistently applied.
"Guarantee(s) or Guaranty" shall mean all direct and indirect
guarantees, sales with recourse, endorsements (other than for collection or
deposit in the ordinary course of business) and other obligations (contingent or
otherwise) of any Person to pay, purchase, repurchase or otherwise acquire or
become liable upon or in respect of any Indebtedness of any other Person, and,
without limiting the generality of the foregoing, all obligations (contingent or
otherwise) by any Person to purchase products, supplies or other Property or
services for any Person under agreements requiring payment therefor regardless
of the non-delivery or non-furnishing thereof (except for agreements for the
purchase of commodities used in the Borrower' business entered into in the
ordinary course of such business consistent with past practice), or to make
investments in any other Person, or to maintain the capital, working capital,
solvency or general
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financial conditions of any other Person, or to indemnify any other Person
against and hold him harmless from damages, losses and liabilities, all under
circumstances intended to enable such other Person or Persons to discharge any
Indebtedness or to comply with agreements relating to such Indebtedness or
otherwise to assure or protect creditors against loss in respect of such
Indebtedness. The amount of any Guarantee shall be deemed to be the amount of
the Indebtedness of, or damages, losses or liabilities of, the other Person or
Persons in connection with which the Guarantee is made or to which it is related
unless the obligations under the Guarantee are limited to a maximum determinable
amount, in which case the amount of such Guarantee shall be deemed to be such
maximum determinable amount.
"Guarantor" shall mean the Parent.
"Indebtedness" of any Person shall mean and include, as of any date as
of which the amount thereof is to be determined, and without duplication (i) all
obligations of such Person for borrowed money or which has been incurred in
connection with the acquisition of Property or which is represented or evidenced
by notes, drafts, bonds, debentures or other similar instruments, (ii) all
Guarantees of such Person, (iii) all indebtedness, liabilities and other
obligations secured by any Lien on or with respect to Property of such Person,
whether or not liability has been assumed by such Person for the payment of such
obligations, (iv) all obligations of such Person as an account party in respect
of letters of credit and bankers acceptances, (v) all net obligations of such
Person in respect of Rate Hedging Obligations, (vi) Capital Lease Obligations of
such Person, and (vii) all items which in accordance with GAAP would be included
in determining total liabilities as shown on the balance sheet of such Person.
"Indemnified Liabilities" shall have the meaning set forth in Section
8.5.
"Indemnified Parties" shall have the meaning set forth in Section 8.5.
"Interest Expense" shall mean, for any period for which the amount
thereof is to be determined, the consolidated interest expense of the Borrower,
including all interest on Indebtedness (including imputed interest related to
Capital Leases), all amortization of loan commitment, origination and unused
facility fees and expenses and Rate Hedging Obligations of the Borrower, to the
extent required to be reflected on the income statement of the Borrower in
accordance with GAAP.
"Interest Period" shall mean, with respect to any LIBOR Base Loan, the
period for the computation of interest commencing on the date the relevant
Advance is made and ending on the date which is one (1), two (2), three (3) or
six (6) months thereafter. For purposes of determining an Interest Period, a
month means a period starting on one day in a calendar month and ending on a
numerically corresponding date in the next calendar month. Notwithstanding the
foregoing, however (x) any applicable Interest Period which would otherwise end
on a day which is not a Business Day shall be extended to the next succeeding
Business Day unless, with respect to any LIBOR Base Loan only, such Business Day
falls in another calendar month, in which case such Interest Period shall end on
the next preceding Business Day, (y) any applicable Interest Period, with
respect to LIBOR Base Loans only, which begins on a day for which there is no
numerically corresponding day in the calendar month during which such Interest
Period is
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to end shall (subject to clause (x) above) end on the last day of such calendar
month, and (z) no Interest Period shall extend beyond the Maturity Date, or such
earlier date as would interfere with the Borrower's repayment obligations
hereunder.
"Investment" shall mean, with respect to any Person, any loan, advance
or extension of credit (other than to customers or employees, in their capacity
as customer or employee, in the ordinary course of business) by such Person to,
or any Guarantee or other contingent liability with respect to the capital
stock, Indebtedness or other obligations of, or any contributions to the capital
of, any other Person, or any ownership, purchase or other acquisition by such
Person of any interest in any capital stock, limited partnership interest,
general partnership interest, or other securities of any such other Person,
other than an Acquisition; and "Invest," "Investing" or "Invested" shall mean
the making of an Investment. "Investment" shall also include the maximum
possible total cost of any future commitment or other obligation binding on any
Person to make an Investment or any subsequent Investment (whether or not
subject to contingencies).
"L/C Outstandings" shall mean, at any time, the sum of (i) the stated
amount available to be drawn under all Letters of Credit outstanding and (ii)
the aggregate amount of all drawings in respect of all Letters of Credit
remaining unpaid by the Borrower.
"Lender" shall mean Bank of America, N.A.
"Letters of Credit" shall have the meaning set forth in Section
2.11(a).
"LIBOR Base Loan" shall mean, for any Interest Period, any borrowing
designated, continued or maintained as a "LIBOR Base Loan" pursuant to Section
2.2.
"LIBOR Rate" shall mean for each Interest Period the rate of interest
per annum as determined by the Lender (rounded upward, if necessary, to the
nearest whole multiple of one-sixteenth of one percent (1/16th of 1%)) at which
deposits of Dollars in immediately available and freely transferable funds are
offered at 11:00 A.M. London time two (2) Business Days prior to the
commencement of such Interest Period to the Lender or its agent in the London
interbank market for a term comparable to such Interest Period and in an amount
comparable to the principal amount of the LIBOR Base Loan to be outstanding
during such Interest Period.
"Lien" shall mean, with respect to any interest in Property (whether
real, personal or mixed and whether tangible or intangible) (i) any interest or
right which secures the payment of indebtedness or an obligation owed to, or a
claim by, a Person other than the owner of such Property, whether such interest
is based on common law, statute or contract, and whether or not choate, vested
or perfected, including, without limitation, any such interest or right arising
from a mortgage, charge, pledge, negative pledge or other agreement not to lien
or pledge, assignments, security interest, conditional sale, levy, execution,
seizure, attachment, garnishment, Capital Lease or trust receipt, or arising
from a lease, consignment or bailment given for security purposes, excluding
landlord liens created by statute and excluding liens granted a landlord in an
existing lease, and (ii) any exception to or defect in the title to or ownership
interest in such Property, including, without limitation, reservations, rights
of entry, possibilities of reverter, encroachments, easements, rights of way,
restrictive covenants, leases and licenses. For
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purposes of this Agreement, the Borrower shall be deemed to be the owner of any
Property which it has acquired or holds subject to a conditional sale agreement,
Capital Lease or other arrangement pursuant to which title to the Property has
been retained by or vested in some other Person for security purposes.
"Loan" shall mean, individually or collectively, a LIBOR Base Loan, a
Base Rate Loan and any other loans made by Lender to Borrower pursuant to the
terms hereof.
"Loan Documents" shall mean, collectively, this Agreement, the Notes,
the Guaranty, each Notice of Borrowing, all agreements and documents referenced
in Article III, and all other documents, agreements, opinions and certificates
executed or delivered by or on behalf of the Borrower to the Lender, in
connection with or contemplated by this Agreement or any other document
contemplated hereby.
"Maintenance Capital Expenditures" shall mean the greater of (i) actual
maintenance capital expenditures incurred by Borrower as determined in
accordance with GAAP and recorded on the Borrower's financial statements, or
(ii) an assumed amount per restaurant unit of $15,000.
"Material Adverse Occurrence" shall mean any fact, circumstance,
development or occurrence of any nature whatsoever (including, without
limitation, any adverse determination in any litigation, arbitration,
governmental investigation or proceeding) which taken alone or in combination
with any other fact, circumstance or occurrence or which, with notice or passage
of time (i) materially adversely affects or is reasonably likely to have a
material adverse effect on the business, properties, assets, liabilities,
prospects, operations or condition, financial or otherwise, of the Borrower
taken as a whole, (ii) materially impairs or is reasonably likely to materially
impair the binding nature, validity or enforceability of this Agreement or any
of the other Loan Documents, the ability of any Borrower to perform their
obligations under this Agreement or any of the other Loan Documents or the
rights of the Lender hereunder and thereunder, or (iii) materially adversely
affects or is reasonably likely to have a material adverse effect on the Loans.
"Material Contract" shall mean, as to the Borrower, any supply, lease,
franchise, purchase, service, employment, management, tax, indemnity, option,
shareholder or other agreement, plan or contract which provides for aggregate
payments, performance of services or transfers of funds or other Property to or
from any Person pursuant to such agreement or contract (to which such Person is
a party or by which any such Person or any of its Properties is otherwise bound)
in excess of $2,000,000 during any fiscal year or which is otherwise material to
the Borrower's business.
"Maturity Date" shall mean the earlier of (i) December 19, 2006 and
(ii) such earlier date on which payment in full of all outstanding Obligations
shall be due (whether by acceleration or otherwise).
"Minimum Fixed Charge Coverage Ratio" shall mean the ratio of EBITDAR
less cash taxes paid, less Maintenance Capital Expenditures, less distributions,
less dividends and less advances or loans to third parties, divided by the sum
of Interest Expense plus principal payments plus Rent Expense.
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"Monthly Payment Date" shall mean the first Business Day of each
calendar month, commencing on the first of such dates to occur after the
Effective Date.
"Moody's" shall mean Moody's Investors Service, Inc., or any successor
to the rating agency business thereof.
"Multiemployer Plan" shall mean any multiemployer plan as defined in
Sections 3(37) or 4001(a)(3) of ERISA of, or contributed to by Borrower, or any
ERISA Affiliate.
"Net Income" shall mean, for any period for which the amount thereof is
to be determined, the net income (or net losses) of the Borrower as determined
in accordance with GAAP, but excluding extraordinary gains or losses and related
tax effects thereon.
"Net Proceeds" shall mean, with respect to any sale, lease, transfer or
other disposition of assets or securities, all proceeds of such sale or other
transaction net of (i) direct, reasonable and customary out-of-pocket costs and
expenses of such sale or other transaction paid by the Borrower to a Person
other than Borrower or any Affiliate of Borrower, (ii) Federal, state and local
income taxes, sales taxes, transfer taxes or similar taxes imposed on the
Borrower on account of such sale or other transaction, and (iii) amounts, if
any, paid with respect to Indebtedness secured by any Lien on such assets which
is senior in priority to the Lien of the Lender, if any, on such assets.
"Note(s)" shall mean, individually or collectively, as the case may be,
the Revolving Credit Note, and any other promissory notes accepted by the Lender
in exchange for or in substitution of any such Revolving Credit Notes.
"Notice of Borrowing" shall mean the notice in the form of EXHIBIT A
attached hereto to be delivered to the Lender pursuant to Section 2.1(c).
"Obligations" shall mean (i) all Loans, Advances, L/C Outstandings,
debts, liabilities, payment and performance obligations, covenants and duties of
every kind, nature and description owing by the Borrower to the Lender or any
Affiliate thereof, of any kind or nature, present or future, arising under this
Agreement or any other Loan Document, whether evidenced by any note, guarantee
or other instrument, whether for the payment of money or in kind, whether
arising by reason of any extension of credit, issuing, guaranteeing or
confirming of a letter of credit, guaranty, indemnification, contract, tort,
operation of law or in any other manner, whether direct or indirect (including
those acquired by assignment or purchase), absolute or contingent, liquidated or
unliquidated, due or to become due, now existing or hereafter arising and
however acquired, (ii) all Rate Hedging Obligations owing at any time or from
time to time by the Borrower to the Lender or any Affiliate thereof, and (iii)
the obligation to pay an amount equal to the amount of any and all damages which
the Lender (or its Affiliates in the case of Rate Hedging Obligations), may
suffer by reason of a breach by Borrower, or any other obligor, of any
obligation, covenant or undertaking with respect to this Agreement or any other
Loan Document. The term "Obligations" includes, without limitation, all
principal, interest, fees, charges, expenses, reasonable attorneys' fees, and
any other sum chargeable to the Borrower, whether now existing or hereafter
arising, under this Agreement or any other Loan Document or in connection with
any Rate Hedging Obligation.
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"Operating Lease" shall mean a lease (excluding Capital Leases) of
Property to which the Borrower is a party as lessee having an unexpired term
(including any periods of renewal or extension which may be exercised at the
option of the lessor or lessee) in excess of one year.
"Parent" shall mean Panera Bread Company, a Delaware corporation.
"Parent Guaranty" shall mean that certain Parent Guaranty of even date
herewith executed by the Parent in favor of the Lender with respect to the
Obligations.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any
entity succeeding to any or all of its functions under ERISA.
"Permitted Investment" shall mean any of the following Investments made
by the Borrower in any Person: (i) obligations, with a maturity of less than
three (3) years from the date of acquisition thereof, issued by or
unconditionally guaranteed by the United States of America or an agency or
instrumentality thereof backed by the full faith and credit of the United States
of America; (ii) direct obligations of any state of the United States, any
subdivision or agency thereof or any municipality therein which are rated by S&P
or Moody's in one of the top three (3) rating classifications and maturing
within three (3) years of the date of acquisition thereof; (iii) certificates of
deposit or banker's acceptances, maturing within three (3) years of the date of
acquisition thereof, issued by commercial banks organized under the laws of the
United States or any state thereof, having capital, surplus and undivided
profits aggregating not less than $100 million and whose unsecured long-term
debt is rated in one of the top two rating classifications by S&P or Moody's;
(iv) commercial paper of any corporation organized under the laws of the United
States or any state thereof, rated in one of the top three (3) rating
classifications by S&P or Moody's and with a maturity of less than 366 days from
the date of acquisition thereof; and (v) Investments existing as of the date of
this Agreement, and disclosed in the financial statements of the Borrower as
contemplated in Section 4.11.
"Permitted Liens" shall have the meaning set forth in Section 6.4.
"Person" shall mean any natural person, corporation, firm, joint
venture, partnership, limited partnership, limited liability company,
association, trust or other entity or organization, whether acting in an
individual, fiduciary or other capacity, or any government or political
subdivision thereof or any agency, department or instrumentality thereof.
"Plan" shall mean each employee benefit plan (as defined in Section
3(3) of ERISA), whether now in existence or hereafter instituted, of, or
contributed to by, the Borrower or any ERISA Affiliate.
"Post Closing Agreement" shall mean that certain Post Closing Agreement
of even date herewith executed by the Borrower and the Parent for the benefit of
the Lender.
"Prime Rate" shall mean the rate announced by the Lender from time to
time as its prime rate, changing as and when such prime rate changes; the Lender
may lend to its customers at rates that are at, above or below the Prime Rate.
9
"Property" shall mean any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible, and any right in
respect of any of the foregoing.
"Rate Hedging Obligations" shall mean any and all obligations of a
Person, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor) under (i) any and all
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates applicable to such
party's assets or liabilities, including but not limited to interest rate swaps,
basis swaps, interest rate floors, collars, caps, options, forward agreements or
other similar rate protection transactions, or any combination of or options
with respect to any of the foregoing, and (ii) any and all cancellations, buy
backs, reversals, terminations, assignments, modifications, supplements and
amendments of any of the foregoing.
"Regulation D," "Regulation T," "Regulation U" and "Regulation X" shall
mean Regulation D, Regulation T, Regulation U and Regulation X, respectively, of
the Board of Governors of the Federal Reserve System as from time to time in
effect and any successor to all or a portion thereof establishing margin
requirements.
"Regulatory Change" shall mean any change after the date hereof in any
(or the adoption after the date hereof of any new):
(i) Federal, state or foreign law applying to a class of
financial institutions to which the Lender or one or more of the
Lenders belongs; or
(ii) regulation, interpretation, directive or request
(whether or not having the force of law) applying to a class of
financial institutions to which the Lender or one or more of the
Lenders belongs of any court, central bank, governmental authority or
comparable agency charged with the interpretation or administration of
any law referred to in clause (i) of this definition or of any fiscal,
monetary or other authority having jurisdiction or authority over the
Lender.
"Rent Expense" shall mean, for any period for which the amount thereof
is to be determined, the sum of all rents (exclusive of property taxes, property
and liability insurance premiums, advertising, maintenance costs and
extraordinary costs and expenses) which are included in calculating Net Income
of the Borrower during such period under Operating Leases in respect of which
the Borrower is obligated as a lessee or user or as a guarantor of the
obligations of a lessee or user.
"Reserve Requirement" shall mean, for any Interest Period applicable to
any LIBOR Base Loan, the sum (expressed as a decimal) of (i) the average maximum
rate at which reserves (including any marginal, supplemental or emergency
reserves) are required to be maintained during such Interest Period under
Regulation D by member banks of the Federal Reserve System against "Eurocurrency
liabilities" and (ii) any other reserves required to be maintained by such
member banks by reason of any Regulatory Change against (x) any category of
liabilities which includes deposits by reference to which the LIBOR Rate is to
be determined or (y) any category of extensions of credit or other assets which
includes a LIBOR Base Loan.
10
"Revolving Credit Commitment" shall mean the original principal amount
of up to $10,000,000, as the same may be modified in accordance herewith.
"Revolving Credit Commitment Fee" shall have the meaning set forth in
Section 2.8.
"Revolving Credit Loan" shall mean, individually or collectively, the
Loans made pursuant to Section 2.1.
"Revolving Credit Note" shall mean each of the promissory notes,
substantially in the form of EXHIBIT B attached hereto, made by the Borrower
payable to the order of the Lender to evidence the Advances made by Lender.
"SEC" shall mean the United States Securities and Exchange Commission,
and any successor entity thereto.
"S&P" shall mean Standard & Poor's Ratings Services, a division of the
McGraw Hill Companies, Inc., or any successor to the rating agency business
thereof.
"Subsidiary" of any Person shall mean (i) any corporation of which more
than 50% of the outstanding shares of capital stock of any class or classes
having ordinary voting power for the election of directors (irrespective of
whether or not at the time stock of any class or classes of such corporation
shall have or might have voting power by reason of the happening of any
contingency) is now or hereafter owned directly or indirectly by such Person, by
such Person and one or more of its Subsidiaries, or by one or more of such
Person's other Subsidiaries, (ii) any partnership, association, limited
liability company, joint venture or other entity in which such Person, such
Person and one or more of its Subsidiaries, or one or more of its Subsidiaries,
is either a general partner or has an equity or voting interest of more than 50%
at the time, and (iii) any other entity which is directly or indirectly
controlled or capable of being controlled by such Person or one or more
Subsidiaries of such Person or both.
"Subsidiary Stock" shall have the meaning set forth in Section 6.8.
"Termination Date" shall mean the date which is the earlier of (i) the
Maturity Date or (ii) the date upon which the obligation of the Lender to make
Advances is terminated pursuant to Section 2.1(b).
"Unfunded Obligations" shall mean at any time the obligations of the
Borrower to the Lender in respect of undrawn amounts of Letters of Credit. Each
Unfunded Obligation will be deemed to be in an amount equal to the undrawn
amount of the relevant Letter of Credit.
"Unused Portion" shall mean, as of any date, the aggregate Revolving
Credit Commitment on such date, minus the sum of (i) the average daily
outstanding principal amount of the Advances during the fiscal quarter ended
immediately prior to such date, plus (ii) the aggregate stated amount of the
outstanding Letters of Credit on such date.
"Voting Stock" shall mean stock or similar interests of any class or
classes (however designated), the holders of which are generally and ordinarily,
in the absence of contingencies,
11
entitled to vote for the election of the directors (or Persons performing
similar functions) of a corporation or other business entity.
Other terms defined herein shall have the meanings ascribed to them
herein. Each definition of an agreement or instrument in this Article I or
elsewhere in this Agreement shall include such agreement or instrument, together
with all schedules, exhibits, annexes and attachments thereto, all as may be
amended, modified, supplemented, renewed, replaced or restated from time to time
in accordance herewith. Except where the context otherwise requires, definitions
imparting the singular shall include the plural and vice versa. Whenever any
accounting term is used herein which is not otherwise defined, it shall be
interpreted in accordance with GAAP. Except where otherwise specifically
restricted, reference to a party to a Loan Document includes that party and its
successors and assigns. Except where the context otherwise requires, each
reference herein to an Article, Section, Exhibit, Annex or Schedule shall be to
an Article, Section, Exhibit, Annex or Schedule hereto. The headings to the
Articles and Sections are for convenience of reference and shall not affect the
meaning or interpretation of this Agreement. Unless the context clearly
indicates otherwise, the word "including" when used in this Agreement means
"including but not limited to," the word "include" means "include, without
limitation," the words "hereof," "herein," "hereto" and "hereunder" and words of
similar import when used in this Agreement refer to this Agreement as a whole
and not to any particular provision of this Agreement and examples set forth in
this Agreement are for illustration purposes only and shall not be deemed to
limit the provision that the example is illustrating. Any non-monetary Event of
Default, if not cured within an applicable cure period hereunder shall "exist,"
"continue" or be "continuing" until such non-monetary Event of Default has been
waived in writing in accordance with Section 8.1. This Agreement and the Loan
Documents shall not be construed or interpreted against any Person due to such
Person being deemed to have drafted it.
12
ARTICLE II.
THE ADVANCES
2.1 Advances.
(a) Revolving Credit Commitment. Subject to the terms and
conditions set forth in this Agreement, Lender agrees to make one or more
advances (each an "Advance") to the Borrower from time to time on any Business
Day during the period from the Agreement Date and ending on the Termination
Date; provided, however, that Lender shall not be required to make any Advance
if, after giving effect to such Advance, (1) the sum of the aggregate
outstanding principal amount of all Advances made by Lender, plus the L/C
Outstandings, would exceed the Revolving Credit Commitment, (2) an Event of
Default exists or is continuing or (3) a Default or Material Adverse Occurrence
exists (provided, however, that if (A) such Default or Material Adverse
Occurrence has not become or given rise to an Event of Default and is completely
cured or remedied, and (B) no other Default or Material Adverse Occurrence then
exists, the obligation of the Lender to make Advances under this Section 2.1(a)
shall resume). Each borrowing under this Section 2.1(a) shall consist of
Advances made on the same day by the Lender. Within the limits set forth above,
the Borrower may borrow, repay and reborrow funds pursuant to this Section
2.1(a).
(b) Termination. The obligation of the Lender to make Advances,
and to issue Letters of Credit shall terminate on the earliest to occur of:
(1) The Maturity Date;
(2) Upon written notice by the Borrower to the Lender at any
time when no amount is outstanding on the Notes, no Letters of Credit
are outstanding hereunder and all drawings under Letters of Credit have
been reimbursed in accordance with Section 2.11(b) hereof;
(3) Immediately and without notice or further action upon the
occurrence of an Event of Default described in clauses (f) or (g) of
Section 7.1; or
(4) Immediately if any Event of Default (other than of the
nature specified in clauses (f) or (g) of Section 7.1) shall have
occurred and be continuing and either: (A) the Lender shall have
demanded payment of the Notes or (B) the Lender shall so elect by
giving written notice to the Borrower for purposes of this clause.
(c) Manner of Borrowing.
(1) The Borrower may request an Advance by delivering
to the Lender in respect of each requested Advance a written
Notice of Borrowing (which may be transmitted by telecopier)
or by oral notice to the Lender confirmed by a written Notice
of Borrowing (which may be transmitted by telecopier),
indicating thereon the aggregate principal amount of the
Advance requested and the date on which such Advance is
requested to be made (which shall be a Business Day), by not
later than 12:00 noon (New York, New York time) on the third
Business Day preceding the Business Day on which an Advance
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is to be made. Any such Notice of Borrowing given by the
Borrower shall be irrevocable.
(2) Upon receipt of the Notice and upon satisfaction
of the applicable conditions set forth in Article III, the
Lender shall make such Advance available to the Borrower by
transferring the amount thereof in immediately available funds
for credit to an account (other than a payroll account)
maintained by the Borrower at the Lender, or otherwise as
directed by the Borrower.
(3) Advances shall be made in aggregate minimum
amounts of $250,000 and in integral multiples of $50,000
thereafter.
(4) Each request for an Advance shall be deemed a
representation and warranty by the Borrower, binding upon the
Borrower, that all conditions precedent to such Advance under
Article III are satisfied as of the date of such request and
as of the date of such Advance.
(d) Revolving Credit Note. The Advances made by Lender shall be
evidenced by, and be payable in accordance with the terms of, the Revolving
Credit Note made by the Borrower payable to the order of Lender in a principal
amount equal to the Revolving Credit Commitment.
(e) Promise to Pay. The Borrower hereby promises to pay in full to
the Lender the amount of all Obligations, including the principal amount of all
Loans, together with accrued interest, fees and other amounts due thereon, all
in accordance with the terms of this Agreement and the Notes. All Obligations,
including the principal amount of all Loans, together with accrued interest,
fees and other amounts due thereon, shall be due and payable in full on the
Maturity Date.
(f) Interest on Loans. The Borrower agrees to pay interest on the
aggregate outstanding principal amount of the Loans until paid in full as
follows:
(1) with respect to any LIBOR Base Loan, at a rate per annum
equal at all times during the Interest Period relating to such LIBOR
Base Loan to the sum of the Adjusted LIBOR Rate plus the Applicable
Margin; and
(2) with respect to any Base Rate Loan, at a fluctuating rate
per annum equal to the Base Rate plus the Applicable Margin (each such
Loan being a "Base Rate Loan").
(g) Calculation of Interest; Payment of Interest.
(1) Other than calculations of Interest at the Prime Rate
(which shall be computed on the basis of a year of 365/366 days for the
actual number of days elapsed), all calculations of Interest and
Interest at the Default Rate shall be computed on the basis of a 360
day year for the actual number of days elapsed.
(2) Interest on Advances under the Revolving Credit Loan
shall be payable as follows:
14
(i) Interest on each Base Rate Advance shall be
payable monthly in arrears on the first day of each month for
the prior month commencing on the first day of the first month
from there date hereof.
(ii) Interest on each LIBOR Base Advance shall be
payable on the last day of the applicable Interest Period and, with respect to
LIBOR Base Advances for which the applicable Interest Period exceeds 3 months,
also on the last day of each fiscal quarter occurring during such Interest
Period.
(iii) Interest at the Default Rate shall be
payable on demand.
(iv) Interest on all Loans then outstanding shall
also be due and payable on the Termination Date.
(h) Interest if No Notice of Selection of Interest Rate Basis.
With respect to any Advance, if the Borrower fails to give the Lender timely
notice of a LIBOR Base Loan, or if for any reason a determination of a LIBOR
Base Loan for any Advance is not timely concluded, the interest rate applicable
to such Advance shall be the Base Rate plus the Applicable Margin.
(i) Interest Upon Default. Immediately upon the occurrence of an
Event of Default hereunder, the outstanding principal balance of the Loans,
together with accrued and unpaid interest and other unpaid sums, shall bear
interest at the Default Rate. Such interest shall be payable on demand and shall
accrue until the earliest of (1) waiver or cure (to the satisfaction of the
Lender required under Section 8.1 to waive or cure) of the applicable Event of
Default, or (2) agreement by the Lender to rescind the charging of interest at
the Default Rate, or (3) payment in full of the Obligations.
(j) Determination of Applicable Margin.
(1) The Applicable Margin in respect of any Base Rate Loan or
LIBOR Base Loan, as applicable, shall be determined as of the last day
of the immediately preceding fiscal quarter by reference to the table
set forth below on the basis of the type of Loan and the Adjusted Total
Leverage Ratio determined by reference to the most recent financial
statements delivered pursuant to Section 5.1(a) or 5.1(b).
APPLICABLE BASE
APPLICABLE RATE LOAN
ADJUSTED TOTAL LEVERAGE RATIO LIBOR MARGIN MARGIN
- ------------------------------------------------ ------------ ---------------
Greater than or equal to 2.50:1.00 1.50% 0.0%
Greater than or equal to 2.25:1.00 but less than
2.50:1.00 1.25% 0.00%
Greater than or equal to 2.00:1.00 but less than
2.25:1.00 1.00% 0.0%
Less than 2.00:1.00 0.75% 0.0%
(2) The Applicable Margin shall be adjusted quarterly, based
on the financial performance of Borrower for the immediately preceding
fiscal quarter. Upon receipt of
15
the financial statements delivered pursuant to Section 5.1(a) or
Section 5.1(b), as applicable, the Applicable Margin shall be adjusted,
such adjustment being effective on the tenth Business Day after receipt
of such financial statements and the Compliance Certificate to be
delivered in connection therewith; provided, however, if the Borrower
shall not have timely delivered such financial statements in accordance
with Section 5.1(a) or Section 5.1(b), as applicable, beginning with
the date upon which such financial statements should have been
delivered and continuing until three (3) Business Days after such
financial statements are delivered, the Applicable Margin shall equal
0.00% with respect to Base Rate Loans and 1.50% with respect to LIBOR
Rate Loans.
(k) Prepayment.
(1) The Borrower shall have the right, by giving written
notice to the Lender by not later than 12:00 noon (New York, New York
time) on the second Business Day preceding the date of such prepayment,
to prepay all or any portion of an Advance, without premium or penalty;
provided, however, that any LIBOR Base Loan may be prepaid in whole or
in part only on the last day of the Interest Period applicable thereto;
and provided further, that each partial prepayment shall be in an
aggregate principal amount of not less than $100,000 and shall be
accompanied by accrued interest to the date of prepayment on the amount
prepaid. The Borrower shall reimburse the Lender on demand for any loss
or out of pocket expenses incurred in connection with any prepayment
made, including any costs or expenses described in Section 2.4.
(2) At any time that the sum of the aggregate outstanding
principal balance of the Loans plus the aggregate stated amount of L/C
Outstandings exceeds the Revolving Loan Commitment, the Borrower shall
immediately prepay the outstanding principal amount of the Loans in an
amount equal to such excess.
(l) Maximum Aggregate Commitment; Adjustment of Commitments. The
original principal amount of the Revolving Loan Commitment shall not exceed
$10,000,000. Borrower may elect, subject to the terms and conditions hereof, to
obtain Revolving Credit Loans in the maximum total aggregate amount outstanding
at any time of $10,000,000 (or such lower amount as the maximum Commitment may
be reduced to in accordance with the terms hereof). Subject to Lender's consent,
which consent Lender may withhold in its sole discretion, Borrower may request
increases in the Revolving Loan Commitment in the amount of $5,000,000 per
increase up to a maximum aggregate Commitment amount of $25,000,000.
2.2 Advances by Borrower.
(a) Interest Rate for Advances. The Borrower may obtain and
maintain all or any portion of an Advance that is in a minimum amount of
$250,000 and in an integral multiple of $50,000 thereafter as a LIBOR Base Loan.
In the event that for any reason LIBOR Base Loans are not available, Advances
shall be made or continued as Base Rate Loans.
(b) Lender's Records. The Borrower hereby irrevocably authorizes
the Lender to make, or cause to be made, an appropriate notation on the records
of Lender, reflecting the date and original principal amount of each Advance
made by Lender, the dates for each period when
16
such Advance is being maintained, the interest rate for each such period and the
dates of principal and interest payments on such Advance. Lender will, prior to
any transfer of a Note, endorse on the reverse side thereof the outstanding
principal amount of the Advances evidenced thereby. The records of the Lender
shall be prima facie evidence of the status of the Lender's Advances, absent
manifest error. Failure to make any such notation shall not affect the
Borrower's Obligations in respect of such Advances or otherwise.
2.3 Increased Costs; Capital Adequacy.
(a) Increased Costs. If (1) as a result of any Regulatory Change,
any reserve, special deposit or similar requirements relating to any extension
of credit or other assets of or any deposits with or other liabilities of,
Lender which affects the making or maintaining by Lender of any loans (including
the Loans) or letters of credit (including the Letters of Credit) are imposed,
modified or deemed applicable, (2) any other condition affecting this Agreement
or the making or maintaining by Lender of any loans (including the Loans) or
letters of credit (including the Letters of Credit) is imposed on s Lender or
(3) other circumstances arise affecting Lender or the position of Lender in the
relevant market, and Lender in good faith determines that, by reason thereof,
the cost to Lender of making or maintaining any loans (including the Loans) or
letters of credit (including the Letters of Credit) is increased as a result of
such change in circumstances, or any amount receivable hereunder in respect of
any Loan or Letter of Credit is reduced (and Lender shall not have been
compensated for such increase or reduction by an increase in interest or
otherwise by Regulatory Change), then Lender shall promptly notify the Borrower
in writing and the Borrower shall pay upon request such additional amount or
amounts (which shall be specified in such request) as will (in the good faith
determination of such Lender) compensate such Lender for such additional cost or
reduction; provided, however, that the Borrower's liability for additional
amounts computed in accordance with this Section 2.3(a) shall be neither changed
nor waived by any failure to give such notice.
(b) Capital Adequacy. If any Regulatory Change imposes, modifies
or deems applicable any capital adequacy, capital maintenance or similar
requirement (including a request or requirement which affects the manner in
which Lender allocates capital resources to its commitments, including the
Revolving Loan Commitment hereunder) and as a result thereof, the rate of return
on Lender's capital as a consequence of the Commitment hereunder or the making
or maintaining of any Loans or Letters of Credit hereunder is reduced to a level
below that which Lender could reasonably have achieved but for such
circumstances, then and in each such case upon notice from time to time by a
Lender to the Borrower, the Borrower shall pay to Lender such additional amount
or amounts as shall compensate Lender for such reduction in rate of return;
provided, however, that the Borrower's liability for additional amounts computed
in accordance with this Section 2.3(b) shall be neither changed nor waived by
any failure to give such notice.
(c) Taxes. If any Regulatory Change shall subject Lender or any
Loan or Letter of Credit to any tax (including, without limitation, any United
States interest equalization tax or similar tax however named applicable to the
acquisition or holding of debt obligations and any interest or penalties with
respect thereto), duty, charge, stamp tax, fee, deduction or withholding in
respect of this Agreement or any Loan or Letter of Credit, except such taxes as
may be measured by the overall net income of such Lender and imposed by the
jurisdiction, or any
17
political subdivision or taxing authority thereof, in which Lender's principal
executive office or its lending branch is located and Lender in good faith
determines that the result thereof is to increase the cost (whether by incurring
a cost or adding to a cost) to Lender of making or maintaining any Loan or
Letter of Credit hereunder or to reduce the amount of principal or interest
received by Lender (without benefit of, or credit for, any prorations,
exemptions, credits or other offsets available under any such laws, treaties,
regulations, guidelines or interpretations thereof), then such Lender shall
promptly notify in writing the Borrower and the Borrower shall pay, upon
request, such additional amount or amounts as will (in the good faith
determination of Lender) compensate Lender for such additional cost or
reduction; provided, however, that the Borrower's liability for additional
amounts computed in accordance with this Section 2.3(c) shall be neither changed
nor waived by any failure to give such notice.
(d) Conclusive and Binding; Survival. With respect to any
additional amount or amounts owing by the Borrower pursuant to this Section 2.3,
a statement of Lender as to any such additional amount or amounts shall, in the
absence of bad faith, be conclusive and binding on the Borrower. In determining
such amount, Lender may use any method of averaging and attribution that it (in
its sole and absolute discretion) shall deem applicable. The obligations of the
Borrower under this Section 2.3 shall survive any termination or expiration of
this Agreement.
2.4 Liquidation Fee. The Borrower understands that in connection
with the request for a LIBOR Base Loan for an Interest Period, Lender may enter
into funding arrangements with third parties on terms and conditions which could
result in substantial losses to Lender if such LIBOR Base Loan is not made or
does not remain outstanding for the entire Interest Period. Therefore, if either
(i) after Borrower requests a LIBOR Base Loan, the LIBOR Base Loan is not made
on the first day of the specified Interest Period for any reason (including, but
not limited to, the failure of the Borrower to comply with one or more of the
conditions precedent to any Advance under this Agreement) other than an
intentional and wrongful failure by Lender to make the LIBOR Base Loan, or (ii)
any LIBOR Base Loan is repaid in whole or in part prior to the last day of its
Interest Period (whether as a result of acceleration, operation of law or
otherwise), the Borrower agrees to indemnify Lender for any loss, cost and
expense incurred by it resulting therefrom, including without limitation any
loss of profit and any loss or cost in liquidating or employing deposits
acquired to fund or maintain the LIBOR Base Loan.
2.5 Basis for Determining LIBOR Rate Inadequate or Unfair. If with
respect to any Advance or any Interest Period:
(i) Lender is advised that deposits in lawful money of
the United States of America (in the applicable amounts) are not being
offered to such Lender in the LIBOR market for the relevant Advance or
Interest Period, or Lender otherwise determines (which determination
shall be binding and conclusive on all parties) that by reason of
circumstances affecting the relevant market or the position of Lender
in such market adequate and reasonable means do not exist for
ascertaining the Adjusted LIBOR Rate;
(ii) Lender determines that the Adjusted LIBOR Rate will
not adequately and fairly reflect the cost to such Lender of
maintaining or funding a LIBOR Base Loan for the relevant Advance or
Interest Period, or that the making or funding of a LIBOR Base
18
Loan has become impracticable as a result of an event which in the
opinion of such Lender adversely affects such LIBOR Base Loan; or
(iii) Lender determines that any Regulatory Change makes it
unlawful or impracticable for Lender to make or continue to maintain
any LIBOR Base Loan;
then Lender shall promptly notify the Borrower of such circumstances and then so
long as such circumstances shall continue: (1) the obligation of Lender to make
a LIBOR Base Loan shall be terminated and (2) all LIBOR Base Loans then
outstanding shall automatically be converted into Base Rate Loans.
2.6 Payments. Any other provision of this Agreement to the
contrary notwithstanding, the Borrower shall make each payment of interest on
and principal of the Revolving Credit Notes, and fees and other payments due
under this Agreement (except as otherwise expressly provided herein), in
immediately available funds to the Lender at its office referred to in Section
8.3 hereof not later than 1:00 p.m. (New York, New York time) on the date when
due. The Borrower hereby authorizes and directs the Lender and agrees that on
the Business Day on which any payment of principal, interest and/or fees are
due, the Lender may automatically charge one or more demand deposit accounts of
the Borrower maintained with the Lender or with any other Person pursuant to any
agreement or instructions of the Borrower permitting the Lender to automatically
debit any such account(s) for all or any portion of amounts then due. All
payments by the Borrower under this Agreement shall be made without offset,
counterclaim or other deduction and in such amounts as may be necessary in order
that all such payments shall not be less than the amounts otherwise specified to
be paid under this Agreement and the Notes.
2.7 Setoff; etc. Upon the occurrence and during the continuance of
an Event of Default, Lender is hereby authorized at any time and from time to
time, without notice to Borrower (any such notice being expressly waived by the
Borrower), to set off and apply any and all deposits (general or special, time
or demand, provisional or final) at any time held, and other indebtedness at any
time owing, by Lender to or for the credit or the account of the Borrower,
including specifically any amounts held in any account maintained at Lender,
against any and all amounts which may be owed to the Lender by the Borrower in
connection with this Agreement or any Loan Document. The rights of the Lender
under this Section 2.7 are in addition to other rights and remedies (including,
without limitation, other rights of set-off) which the Lender may have. The
Borrower agrees that any holder of a Note or of any participation in a Note may,
to the fullest extent permitted by law, exercise all its rights of payment
(including set-off) with respect to such participation as fully as if such
holder were the direct creditor of the Borrower in the amount of such
participation. Lender agrees to use reasonable efforts to notify the Borrower of
any exercise of its rights pursuant to this Section 2.7, provided, however, that
failure to provide such notice shall not affect Lender's rights under this
Section 2.7 or the effectiveness of any action taken pursuant hereto.
2.8 Revolving Credit Commitment Fee.
(a) Payment of Fee. The Borrower agrees to pay a commitment fee
(the "Revolving Credit Commitment Fee") for the period (including, without
limitation, any portion thereof when
19
the Lenders' obligations to lend shall be suspended by reason of the Borrower'
inability to satisfy the conditions of Article III) commencing on the Agreement
Date and continuing through the Termination Date, computed on the average daily
amount of the Unused Portion during the period for which payment is made at the
rate per annum equal to the Applicable Fee Percentage (as determined in
accordance with Section 2.8(b)). Such Revolving Credit Commitment Fee shall be
payable to the Lender in arrears on the first day of each calendar quarter
occurring after the Agreement Date.
(b) Adjustment of Fee. The applicable fee percentage for the
Revolving Credit Commitment Fee (the "Applicable Fee Percentage") shall be
determined by reference to the table set forth below on the basis of the
Adjusted Leverage Ratio determined by reference to the most recent financial
statements delivered pursuant to Section 5.1(a) or 5.1(b).
APPLICABLE FEE
ADJUSTED TOTAL LEVERAGE RATIO PERCENTAGE
- --------------------------------------- --------------
Greater than or equal to 2.50:1.00 0.35%
Greater than or equal to 2.25:1.00 but
less than 2.50:1.00 0.30%
Greater than or equal to 2.00:1.00 but
less than 2.25:1.00 0.25%
Less than 2.00:1.00 0.20%
Upon receipt by the Lender of the financial statements delivered pursuant to
Section 5.1(a) or 5.1(b), as applicable, the Applicable Fee Percentage shall be
adjusted, such adjustment being effective on the first day of the next calendar
quarter commencing after the receipt of such financial statements and the
Compliance Certificate to be delivered in connection therewith; provided,
however, if the Borrower shall not have timely delivered such financial
statements in accordance with Section 5.1(a) or 5.1(b), as applicable, and the
Compliance Certificate to be delivered in connection therewith beginning with
the date upon which such financial statements and Compliance Certificate should
have been delivered and continuing until such financial statements and
Compliance Certificate are delivered, the Applicable Fee Percentage shall equal
0.35%; provided further, however, that if upon delivery of such financial
statements and Compliance Certificate, the Applicable Fee Percentage is adjusted
upwards, the adjustment of the Applicable Fee Percentage shall be retroactive to
the date upon which such financial statements and Compliance Certificate should
have been delivered.
(c) Compensating Balance. In lieu of paying the fee pursuant to
Sections 2.8(a) and 2.8(b) above, Borrower may deposit the sum of $1,000,000
(10% of the Revolving Loan Commitment) with Lender to be held in a non-interest
bearing demand deposit account.
2.9 Other Fees. In addition to the fees required to be paid by the
Borrower pursuant to other provisions hereof, the Borrower agrees to pay a
non-refundable fee to the Lender on the Agreement Date in the amount of
one-quarter of one percent (.25%) multiplied by the aggregate Revolving Loan
Commitment.
2.10 Application of Payments and Collections.
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(a) Order of Application of Payments. Subject to the provisions of
Section 2.10(b) below or any agreement of the Lender to the contrary, all
payments and prepayments and any other amounts received by the Lender from or
for the benefit of the Borrower shall be applied, first to pay all other
Obligations in respect of fees, expenses, reimbursements or indemnities then due
and payable, second to pay interest then due in respect of the Revolving Credit
Loans, and third to pay the principal of the Revolving Credit Loans then due and
payable.
(b) Application of Payments After an Event of Default. After the
occurrence of an Event of Default and while the same is continuing, the Lender
may apply all payments and prepayments in respect of any Obligations hereunder
in any order whatsoever, in Lender's sole discretion.
2.11 Letters of Credit.
(a) Issuance by the Lender. Subject to all of the terms and
conditions hereof (including Section 2.1(a) hereof), at the written request of
the Borrower, the Lender will on or after the Effective Date issue standby
letters of credit in form and substance satisfactory to the Lender ("Letters of
Credit") for the account or benefit of the Borrower expiring on or before the
fifth Business Day preceding the Termination Date; provided, however, the Lender
shall not be required to issue a Letter of Credit if, after giving effect
thereto, (1) the aggregate stated amount of all outstanding Letters of Credit,
plus unreimbursed reimbursement obligations, would exceed $3,000,000, (2) the
sum of the aggregate outstanding principal amount of all Revolving Credit Loans
and the L/C Outstandings would exceed the aggregate amount of the Revolving
Credit Commitment, or (3) any other condition set forth in Section 2.1(a) is not
satisfied. The aggregate stated amount of any and all Letters of Credit shall
count against and reduce the available Revolving Credit Commitment hereunder on
a pro rata basis.
(b) Reimbursement by Borrower. If and to the extent a drawing is
at any time made under a Letter of Credit, the Borrower agrees to pay to the
Lender, for the account of the Lender, immediately and unconditionally upon
demand in lawful money of the United States, an amount equal to each amount
which shall be so drawn. Interest shall be payable on any and all amounts
remaining unpaid by the Borrower under this subsection from the date such
amounts become payable (whether at stated maturity, by acceleration or
otherwise) until paid in full at the Default Rate. The Lender shall have the
right to convert the reimbursement obligation of the Borrower arising out of any
such drawing into an Advance made under this Agreement (the Borrower hereby
irrevocably authorizes the Lender to refinance without notice to the Borrower
the reimbursement obligation of the Borrower arising out of any such drawing
into such an Advance and to take all action on behalf of the Borrower required
pursuant to Section 2.1(d) hereof to request such Advance), and such Advance to
be evidenced by the Revolving Credit Note and for all purposes of this
Agreement, without regard to the conditions precedent to making any such Advance
and any requirement of this Agreement that each Advance under this Agreement be
in a minimum amount. Such Advance shall be at the Base Rate plus the Applicable
Margin. If and to the extent any such Letter of Credit expires or otherwise
terminates in a manner satisfactory to the Lender without having been drawn
upon, the available Revolving Credit Commitment shall to such extent be
reinstated.
21
(c) Letter of Credit Fees. The Borrower agrees to pay on the first
day of each calendar quarter following the Agreement Date, in arrears, to the
Lender, a letter of credit fee, computed at an annual rate equal to the
Applicable Margin with respect to LIBOR Rate Loans in effect from time to time
applied to the aggregate face amount of the Letters of Credit issued for the
account of the Borrower from the date of issuance of each Letter of Credit until
the expiration thereof, and (2) to the Lender directly for its benefit as
issuing bank, all customary fees and other issuance, amendment, document
examination, negotiation and presentment expenses and related charges in
connection with the amendment, presentation of drafts, and the like customarily
charged by the Lender with respect to standby letters of credit, payable at the
time of invoice of such amounts.
(d) Indemnification.
(1) In addition to amounts payable as elsewhere provided in
this Agreement, Borrower hereby agrees to protect, indemnify, defend,
pay and save harmless the Lender, from and against any and all
liabilities, expenses, losses, damages and costs which the Lender may
incur or be subject to as a consequence, direct or indirect, of (A) the
issuance of any Letter of Credit and any drawing thereunder other than,
in the case of the Lender, as a result of its gross negligence or
willful misconduct in violation of the applicable Letter of Credit
agreements, as determined by the final judgment of a court of competent
jurisdiction, in determining whether documents presented under any
Letter of Credit comply with the terms thereof, or (B) the failure of
the Lender to honor a drawing under such Letter of Credit as a result
of any act or omission, whether rightful or wrongful, of any present or
future de jure or de facto governmental authority.
(2) As between the Borrower and the Lender, the Borrower
assumes all risks of the acts and omissions of, or misuse of such
Letter of Credit by, the beneficiary of any Letter of Credit. In
furtherance and not in limitation of the foregoing, subject to the
provisions of the Letter of Credit applications and Letter of Credit
reimbursement agreements executed by the Borrower at the time of
request for any Letter of Credit, the form and substance of which is
attached hereto as Exhibit "F", the Lender shall not be responsible
for: (A) the form, validity, sufficiency, accuracy, genuineness or
legal effect of any document submitted by any party in connection with
the application for and issuance of the Letters of Credit, even if it
should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (B) the validity or
sufficiency of any instrument transferring or assigning or purporting
to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (C) failure of the
beneficiary of a Letter of Credit to comply with conditions required in
order to draw upon such Letter of Credit; (D) errors, omissions,
interruptions or delays in transmission or delivery of any messages, by
mail, cable, telegraph, telex, or other similar form of
teletransmission or otherwise; (E) errors in interpretation of
technical trade terms; (F) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any
Letter of Credit or of the proceeds thereof; (G) the misapplication by
the beneficiary of a Letter of Credit of the proceeds of any drawing
under such Letter of Credit; and (H) any consequences arising from
causes beyond the control of the Lender.
22
(3) In furtherance and extension and not in limitation of the
specific provisions set forth above, any action taken or omitted by the
Lender under or in connection with Letters of Credit issued on behalf
of the Borrower or any related certificates shall not, in the absence
of gross negligence of the Lender, as determined by the final judgment
of a court of competent jurisdiction, in determining whether documents
presented under any Letter of Credit comply with the terms thereof, put
the Lender, the Lender or any Lender under any resulting liability to
the Borrower, and in no event shall the Borrower be relieved of any of
its obligations, including the Obligations, hereunder or under any
other Loan Documents.
(4) Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this Section 2.11(d) shall survive the payment in
full of principal and interest hereunder, the termination of the
Letters of Credit and termination of this Agreement.
(e) Cash Account. Upon the occurrence of any Event of Default (and
provided the Notes are accelerated), the Borrower shall immediately pay to the
Lender, an amount equal to the Unfunded Obligations, and upon receipt of the
payment of such amount, the Lender shall deposit such funds in an
interest-bearing cash account (the "Cash Account") in the name of the Borrower
maintained with the Lender as to which the Borrower shall have no right of
withdrawal, except as provided below. Upon any draw on a Letter of Credit, the
Lender shall pay the amounts allocated in respect of such Unfunded Obligation to
the Lender. Upon cancellation or termination of a Letter of Credit without its
being fully drawn, the Lender shall reapply the amounts allocated in respect of
such Unfunded Obligation as provided in Section 2.10, as applicable, as if such
portion had then been paid to the Lender by the Borrower for application
pursuant to Section 2.10.
ARTICLE III.
CONDITIONS PRECEDENT
3.1 Conditions Precedent to Effectiveness. The effectiveness of
the obligations of the Lender to make the initial Advance hereunder, and to
issue the initial Letter of Credit hereunder is subject to the following
conditions precedent:
(a) The Lender shall have received copies of all of the following,
each in form and substance satisfactory to the Lender in all respects, unless
waived by Lender:
(1) This Agreement, appropriately completed and duly executed
by the parties hereto;
(2) The Note, appropriately completed and duly executed by the
Borrower;
(3) The Parent Guaranty executed by the Guarantor;
(4) A favorable opinion of counsel of the general counsel of
the Borrower and Guarantor substantially in the form of EXHIBIT C
attached hereto;
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(5) A loan certificate in substantially the form set forth as
EXHIBIT D executed by the Manager, secretary or assistant secretary of
each of the Credit Parties, certifying that (i) Borrower is a
corporation, (ii) a true, correct and complete copy of its articles of
incorporation, certificate of incorporation or other charter document
with all amendments thereto (as certified by the Secretary of State or
similar state official), is attached to the certificate, (iii) a true,
correct and complete copy of its bylaws, with all amendments thereto,
is attached to the certificate, and (iv) a true, correct and complete
copy of the resolutions of its board of directors authorizing the
execution, delivery and performance of the Loan Documents to which it
is a party are attached to the certificate, and such resolutions have
not been subsequently modified or repealed, (v) certificates of good
standing dated within a reasonably close period of time prior to the
Effective Date for the Borrower issued by the Secretary of State or
similar state official for each state in which the Borrower is required
to be qualified to do business are attached to such certificate, (vi)
true, correct and complete copies of any agreements in effect with
respect to the voting rights, ownership interests or management of
Borrower, as amended, are attached to the certificate, (vii) the FEIN
and Organizational ID Numbers for Borrower are set forth on an
attachment to such certificate and (viii) there are no proceedings
pending or contemplated as to the merger, consolidation, liquidation or
dissolution of the Borrower;
(6) A certificate executed by the Manager, secretary or
assistant secretary of the Credit Parties certifying the names of the
officers of the Credit Parties authorized to sign the Loan Documents
and to give notices and other communications in connection with this
Agreement and the transactions contemplated hereby, together with a
sample of the true signature of such officers;
(7) A duly executed Notice of Borrowing for the initial
Advance of the Loans, which Notice of Borrowing shall include
calculations demonstrating, as of the Effective Date, the Borrower's
compliance with the financial covenants set forth herein;
(8) A certified copy of all documents evidencing any necessary
consent or governmental approvals (if any) with respect to the
execution, delivery and performance of the Loan Documents and the
consummation of the transactions contemplated hereby;
(9) Any other required consents to the execution, delivery and
performance of this Agreement and the other Loan Documents which may be
required by the Lender;
(10) Evidence of insurance for all insurance required to be
maintained by the Borrower pursuant to this Agreement;
(11) The Lender shall have completed, to its reasonable
satisfaction, operating, financial and legal due diligence with respect
to the Borrower;
(12) Such other approvals, consents, agreements, certificates
or documents as the Lender may reasonably request; and
(13) The Post Closing Agreement.
24
(b) Payment by the Borrower of all fees that are due on the
Agreement Date in accordance with the provisions of Sections 2.8 and 2.9 hereof,
which payment shall be nonrefundable; and
(c) Payment by the Borrower of all legal fees and all costs and
expenses of the Lender's counsel incurred through the date of the requested
initial Advance in connection with the preparation and execution of the Loan
Documents and incident to all proceedings in connection with, transactions
contemplated by, and documents relating to this Agreement and the Loan
Documents, which payment shall be nonrefundable.
The making of the Advance hereunder shall not constitute a waiver by the Lender
of any right which the Lender may have in the event that any certificate,
agreement, financial statement or other document delivered pursuant to this
Section 3.1 or otherwise in connection with the transactions contemplated by
this Agreement shall prove to have been false or misleading in any respect at
the time made or deemed to be made hereunder.
3.2 Conditions Precedent to All Advances, and Issuances of Letters
of Credit. The obligation of the Lender to make any Advance hereunder, and to
issue any Letters of Credit shall be further subject to the satisfaction of each
of the following conditions immediately prior to or contemporaneously with each
such Advance or Letter of Credit issuance, unless waived in writing by the
Lender:
(a) In the case of an Advance, delivery to the Lender of a Notice
of Borrowing appropriately completed and duly executed by the Borrower; and, in
the case of a Letter of Credit, an application for a letter of credit, in form
and substance satisfactory to the Lender, appropriately completed and delivered;
(b) The representations and warranties set forth in Article IV
hereof and in each of the other Loan Documents are true and correct in all
material respects on the date of and after giving effect to the making of the
Advance or the issuance of the Letter of Credit, except that the representations
and warranties set forth in Section 4.5 as to the financial statements of the
Borrower shall be deemed to be updated to refer to the audited and unaudited
financial statements of the Borrower, as the case may be, most recently
delivered to the Lender and the Lenders pursuant to Section 5.1;
(c) No Default or Event of Default shall then have occurred and be
continuing on the date of the making of the Advance or the issuance of the
Letter of Credit;
(d) Lender shall have received all such other certificates,
reports, statements, opinions of counsel or other documents as the Lender may
reasonably request;
(e) There shall have occurred no Material Adverse Occurrence;
(f) The making of the Advance or the issuance of the Letter of
Credit by the Lender is not in violation of any applicable law, rule or
regulation or any directive, request or order of any court or governmental
authority having jurisdiction over such Lender;
25
(g) Payment by the Borrower of all fees owed pursuant to this
Agreement and of all costs and expenses of the Lender's counsel incurred through
the date of the requested Advance or Letter of Credit in connection with the
preparation and execution of the Loan Documents and incident to all proceedings
in connection with, transactions contemplated by, and documents relating to this
Agreement and the Loan Documents, which payment shall be nonrefundable.
The delivery of the Notice of Borrowing or the application for the issuance of a
Letter of Credit, as applicable, by the Borrower shall constitute a
certification by the Borrower, binding upon the Borrower, as to the matters set
forth above.
3.3 Conditions Subsequent. As a condition subsequent to the
funding of the initial Advance and any other Advance hereunder, the Borrower
shall execute and deliver to the Lender such other agreements, documents,
certificates, assignments, financing statements and acknowledgments as may be
reasonably requested by the Lender from time to time to evidence the Loans or to
evidence, including but not limited to copies of all Material Contracts entered
into after the Agreement Date (the failure by the Borrower to provide such
documents within fifteen (15) business days of a written request shall
constitute an Event of Default hereunder).
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants as follows to the Lender
as of the Agreement Date, as of the Effective Date, and as of the date of each
Advance, and each issuance of a Letter of Credit:
4.1 Organization; etc. Borrower (i) is a corporation validly
organized and existing and in good standing under the laws of the state of its
organization, (ii) has full power and authority to own its property and conduct
its business as conducted by it and (iii) is duly qualified and licensed to do
business and is in good standing as a foreign corporation in each jurisdiction
where the nature of its business or the character of its property makes such
qualification or licensing prudent, except where the failure to be so qualified
or licensed as a foreign corporation does not constitute a Material Adverse
Occurrence. A list of jurisdictions in which the Borrower is organized,
qualified or licensed to do business, and maintain its principal place of
business is set forth in Annex I. Borrower has full power and authority to enter
into and to perform its obligations under the Loan Documents and to request
Advances, and Letters of Credit under this Agreement. Borrower has all licenses,
permits, franchises and rights necessary to carry on its business as now being
and hereafter proposed to be conducted and to own and operate its Property,
except for permits, licenses, franchises and rights the failure of which to have
or obtain, individually or in the aggregate, is not and will not result in a
Material Adverse Occurrence.
4.2 Due Authorization. The execution, delivery and performance by
the Borrower of the Loan Documents (i) have been duly authorized by all
necessary corporate action, (ii) do not require any approval or consent of, or
any registration, qualification or filing with, any governmental agency or
authority or any approval or consent of any other Person, (iii) do not and will
not conflict with, result in any violation of or constitute any default under,
any provision of the organizational, constitutive or governing documents of the
Borrower, any agreement binding
26
on or applicable to the Borrower, or any of its Property, or any law or
governmental regulation or court decree or order binding upon or applicable to
the Borrower, or any of its Property and (iv) will not result in the creation or
imposition of any Lien on any of the Borrower's Property pursuant to the
provisions of any agreement binding on or applicable to the Borrower, or any of
its Property.
4.3 Subsidiaries. The Borrower has no Subsidiaries except those
listed on Annex II, which correctly sets forth the name of each Subsidiary, the
jurisdiction of its incorporation or organization and the percentage ownership
of each Subsidiary which is owned, of record or beneficially, by the Borrower
and/or one or more of its Subsidiaries.
4.4 Validity of the Agreement. Each Loan Document is the legal,
valid and binding obligation of the Borrower and is enforceable in accordance
with its terms except that, as to enforcement of remedies, enforcement may be
limited by bankruptcy, insolvency or similar laws affecting enforcement of
creditors' rights generally.
4.5 Financial Statements. The balance sheets of the Borrower as of
December 28, 2002 and the related statements of income, stockholders' equity and
cash flows for the three (3) years ended December 28, 2002 certified by the
Borrower's independent public accountants, copies of which have heretofore been
delivered by the Borrower to the Lender, have been prepared in accordance with
GAAP consistently applied throughout the periods involved and present fairly the
financial condition and results of operations and cash flows of the Borrower for
and as of the end of each of the periods presented therein. The unaudited
consolidated balance sheet of the Borrower as of October 4, 2003 and the
unaudited statements of operations for the forty (40) week period ended on said
date, copies of which have heretofore been delivered to the Lender, have been
prepared in accordance with GAAP, present fairly in all material respects the
financial position of the Borrower as of said date and the results of operations
and cash flows of the Borrower for said period, subject only to customary
year-end adjustments which are not expected to be and are not reasonably likely
to be material in amount or kind.
4.6 Business. The Borrower is engaged in the business of
developing, acquiring, owning, operating and franchising bakery cafes and fresh
dough facilities under the Panera or St. Louis bread trade names.
4.7 Litigation; etc. There is no action, suit, claim, proceeding,
demand or investigation at law or equity, or before or by any Federal, state,
local or other governmental department, commission, court, board, bureau,
agency, tribunal or instrumentality, or before any arbitration or arbitration
board, domestic or foreign, pending, or to the knowledge of the Borrower
threatened, against the Borrower, or any of its Properties, which if determined
adversely constitutes a Material Adverse Occurrence.
4.8 Compliance with Law. Borrower is not (i) in default or breach
with respect to any judgment, order, writ, injunction, rule, regulation or
decree of any court, governmental authority, department, commission, agency or
arbitration board or tribunal of which it has notice (including such notice as
would be obtained by a diligent search of applicable public records) or (ii) in
violation of any law, rule, regulation, ordinance or order relating to its or
their respective businesses, the breach, default or violation of which
constitutes a Material Adverse Occurrence.
27
4.9 ERISA Compliance. With respect to each Plan which is an
employee pension benefit plan (as defined in Section 3.2 of ERISA), the Internal
Revenue Service has issued a determination that each such Plan (except for any
Plan which is unfunded and maintained primarily for the purpose of providing
deferred compensation for a select group of management or highly compensated
employees) is qualified under Section 401(a) and related provisions of the Code,
as amended by ERISA, and that each related trust or custodial account is exempt
from taxation under Section 501(a) of the Code, and nothing has occurred since
the date of that determination that could reasonably be expected to adversely
affect the qualified status of such Plan. All Plans comply in all material
respects with ERISA and other applicable laws. There exist with respect to the
Borrower, no Multiemployer Plans, for which a material withdrawal or termination
liability may be incurred. There exist with respect to all Plans or trusts: (i)
no material accumulated funding deficiency within the meaning of ERISA; (ii) no
termination of any Plan or trust which would result in any material liability to
the PBGC or any "reportable event," as that term is defined in ERISA, which is
likely to constitute grounds for termination of any Plan or trust by the PBGC;
(iii) no "prohibited transaction," as that term is defined in ERISA, which is
likely to subject any Plan, trust or party dealing with any Plan or trust to any
material tax or penalty on prohibited transactions imposed by Section 4975 of
the Code, and (iv) no pending disputes, arbitrations, claims, suits, grievances
or governmental audits involving any Plan (other than routine claims for
benefits payable under any such Plan) for which a material liability on the
Borrower may be incurred. The consummation of any transaction by this Agreement
will not (either alone or upon the occurrence of any additional or further acts
or events) result in any (A) payment becoming due from the Borrower, to any
officer, employee, former employee, or director thereof, or to any other Person
for the benefit of any such individual, or (B) benefit being established or
accelerated, vested or payable to any such individual.
4.10 Indebtedness and Liabilities. Except as listed in Annex III,
the Borrower has no Indebtedness in excess of One Million and No/100 Dollars
($1,000,000.00). Borrower has no material liabilities, contingent or otherwise,
other than as disclosed in the financial statements referred to in Section 4.5,
there are no anticipated losses and (other than net operating loss carryovers,
as contemplated by Section 172 of the Internal Revenue Code of 1986, as amended)
there are no material unrealized losses of the Borrower other than those which
have been disclosed in writing to the Lender prior to the Agreement Date and
identified as such.
4.11 No Investments. Other than as reflected in the financial
statements referred to in Section 4.5, Borrower has no Investments in any Person
(other than Subsidiaries of the Borrower).
4.12 Use of Proceeds. The proceeds of the Advances will be used by
the Borrower to fund the working capital requirements of the Borrower and other
general corporate purposes of the Borrower.
4.13 Governmental Regulation. Borrower is not required to obtain
any material consent, approval, authorization, permit or license which has not
already been obtained from and which remains in effect, or effect any material
filing or registration which has not already been effected and which remains in
effect with, any Federal, state or local regulatory authority in
28
connection with the execution and delivery of this Agreement or any other Loan
Document or the performance, in accordance with their terms, contemplated
hereunder and thereunder.
4.14 Margin Stock. No part of any Advance shall be used at any time
by the Borrower to purchase or carry margin stock (within the meaning of
Regulations T, U and X) or to extend credit to others for the purpose of
purchasing or carrying any margin stock. Borrower is not engaged principally, or
as one of its important activities, in the business of extending credit for the
purposes of purchasing or carrying any such margin stock. No part of the
proceeds of any Advance will be used by the Borrower for any purpose which
violates, or which is inconsistent with, any regulations promulgated by the
Board of Governors of the Federal Reserve System.
4.15 Investment Company Act. Neither Borrower nor any of its
Subsidiaries is an "investment company," or an "affiliated person" of, or a
"promoter" or "principal underwriter" for, an "investment company," as such
terms are defined in the Investment Company Act of 1940, as amended. The making
of the Advances and the issuances of Letters of Credit, the application of the
proceeds and repayment thereof by the Borrower and the performance of the
transactions contemplated by this Agreement will not violate any provision of
said Act, or any rule, regulation or order issued by the Securities and Exchange
Commission thereunder.
4.16 Accuracy of Information. All information heretofore or
herewith furnished by or on behalf of the Borrower to the Lender for purposes of
or in connection with this Agreement or any transaction contemplated by this
Agreement is, and to the best of the Borrower's knowledge, all other such
information hereafter furnished by or on behalf of the Borrower to the Lender
will be, true and accurate in every material respect on the date as of which
such information is dated or certified and no such information contains any
material misstatement of fact or omits to state any fact necessary to make the
statements contained therein not misleading.
4.17 Tax Returns; Audits. The Borrower has filed all Federal, state
and local tax returns and other reports which are required to be filed, and have
paid all taxes as shown on said returns and on all assessments received by any
such Person (except for any assessments which are being contested in good faith
by appropriate proceedings that will prevent a forfeiture or sale of any
property and for which an adequate reserve has been provided on the books of the
Borrower in accordance with GAAP), to the extent that such taxes have become
due, or has obtained extensions with respect to the filing of such returns and
has made provision for the payment of taxes anticipated to be payable in
connection with such returns. The Borrower has made all required withholding
deposits. The Borrower does not have knowledge of any objections to or claims
for additional taxes by Federal, state or local taxing authorities against it,
and there are no pending or, to Borrower's knowledge, threatened audits by any
Federal, state or local taxing authorities with respect to the Borrower which
might result in penalties or any material amount of taxes being payable by the
Borrower.
4.18 Environmental and Safety Regulations. The Borrower is in
compliance with all requirements of applicable Federal, state and local
environmental, pollution control, health and safety statutes, laws and
regulations except for any noncompliance which, individually or in the
aggregate, could not result in a Material Adverse Occurrence with respect to the
Borrower and, to the best of its knowledge, is not the subject of any federal or
state investigation evaluating whether any remedial action is needed to respond
to a release of any toxic or hazardous waste or
29
substance into the environment. The Borrower further represent and warrant that
(i) the real property owned by the Borrower (and, to its knowledge, the real
property leased by Borrower) and its intended use complies with all applicable
laws, governmental regulations and the terms of any enforcement action by any
Federal, state, regional or local governmental agency, including, without
limitation, all applicable Federal, state and local laws pertaining to air and
water quality, hazardous waste, waste disposal and other environmental matters
(including, but not limited to, the Clean Water, Clean Air, Federal Water
Pollution Control, Solid Waste Disposal, Resource Conservation and Recovery and
Comprehensive Environmental Response, Compensation, and Liability Acts, as said
acts may be amended), and the rules, regulations and ordinances of all
applicable Federal, state and local agencies and bureaus, except in each case
for any noncompliance which, individually or in the aggregate, does not
constitute a Material Adverse Occurrence and (ii) no notice, demand, request for
information, citation, summons or order has been issued, no complaint has been
filed, no penalty has been assessed and no investigation or review is pending
or, to the Borrower's knowledge, threatened by any governmental or other entity
with respect to any alleged failure by the Borrower to comply in any material
respect with any of such environmental laws.
4.19 Payment of Wages. The Borrower is in compliance with the Fair
Labor Standards Act, as amended, in all material respects, and, to the best of
its knowledge, the Borrower has paid all minimum and overtime wages required by
law to be paid to its employees.
4.20 Intellectual Property. The Borrower owns, possesses or has the
right to use all material licenses and rights to all patents, trademarks,
trademark rights, trade names, trade name rights, trade dress, service marks,
domain marks and copyrights, or has applied for the trademarks, trade dress and
service marks, necessary to conduct its business in all material respects as now
being and hereafter proposed to be conducted, without conflict with any patent,
trademark, trade name, trade dress, service mark, license or copyright of any
other Person. All such material licenses and rights with respect to patents,
trademarks, trademark rights, trade names, trade name rights, trade dress,
service marks and copyrights are in full force and effect in all material
respects, and are not subject to any pending or, to the Borrower's knowledge,
threatened attack or revocation.
4.21 Forecasts. Intentionally Omitted.
4.22 Solvency. After giving effect to the transactions contemplated
by this Agreement, the Borrower and each of its Subsidiaries has capital
sufficient to carry on its business, is solvent and is able to pay its debts and
obligations as they mature in the ordinary course. After giving effect to the
consummation of the transactions contemplated by this Agreement, the Borrower
and each of their Subsidiaries now owns Property having a value, when added to
ongoing cash flow from operations, greater than the amount required to pay its
debts, obligations and contingent liabilities.
4.23 No Default. No Event of Default has occurred and is continuing
and, to the best of the Borrower's knowledge after due inquiry, no Default
exists or is continuing. Each of the Borrower and its Subsidiaries is in
compliance in all material respects with all of the provisions of their
respective certificates or articles of incorporation and by-laws, or their
partnership or limited liability company agreements, as the case may be, and no
event has occurred or failed to
30
occur (including, without limitation, any matter which could create a Default
hereunder by cross-default) which has not been remedied or waived, the
occurrence or non-occurrence of which constitutes, or with the passage of time
or giving of notice or both would constitute, (i) an Event of Default or (ii) a
material default by the Borrower or any of its Subsidiaries under any indenture,
agreement or other instrument relating to Indebtedness of any of such Persons or
any judgment, decree or order to which the Borrower or any of its Subsidiaries
is a party or by which the Borrower or any of its Subsidiaries or their
respective Properties may be bound or affected.
4.24 No Material Adverse Occurrence. Since the date of the most
recent audited financial statements submitted to the Lender as described in
Section 4.5, there has occurred no Material Adverse Occurrence.
4.25 Material Contracts. All of the Material Contracts are in full
force and effect and Borrower is not in material default under any Material
Contract and, to the knowledge of the Borrower, no other Person that is a party
thereto is in default under any of the Material Contracts. None of the Material
Contracts prohibits, restricts or is breached by any of the transactions
contemplated under the Loan Documents. To the extent required by Lender, the
Borrower has delivered to the Lender a true and correct, complete and fully
executed copy of each Material Contract existing on the Agreement Date and, with
respect to each Material Contract entered into after the Agreement Date, will
deliver to the Lender, upon written request therefore, a true and correct,
complete and fully executed copy of such Material Contract promptly after
execution thereof.
4.26 All representations and warranties made under this Agreement
and the other Loan Documents shall be deemed to be made, and shall be true and
correct, at and as of the Agreement Date and the Effective Date in all respects
and, at and as of the date of each Advance, or issuance of a Letter of Credit,
in all material respects. All representations and warranties made under this
Agreement shall survive, and not be waived by, the execution hereof by the
Lender, any investigation or inquiry by Lender, or the making of any Advance
under this Agreement.
ARTICLE V.
CERTAIN AFFIRMATIVE COVENANTS
The Borrower agrees with the Lender that, from the date hereof and
thereafter for so long as any portion of any Advance, any Letter of Credit or
any Obligations shall be outstanding or Lender shall have any Commitment
hereunder, unless the Lender shall otherwise consent in writing:
5.1 Financial Information; etc. The Borrower will furnish to the
Lender copies of the following financial statements, reports and information:
(a) as soon as available and in any event within ninety (90) days
after the end of each fiscal year of the Parent a copy of the audited
consolidated financial statements, including balance sheet, related statements
of income, statements of stockholders' equity and statements of cash flows, of
the Parent for such fiscal year, with comparative figures for the preceding
fiscal year, prepared in accordance with GAAP, certified without qualification
or exception by a nationally or regionally recognized firm of independent public
accountants which firm is
31
reasonably acceptable to the Lender, accompanied by a certificate of the chief
financial officer of Parent which shall state that said financial statements are
complete and correct in all material respects and fairly present the financial
condition and results of operations of the Parent in accordance with GAAP for
such period;
(b) as soon as available and in any event within forty-five (45)
days of the end of each fiscal quarter of Parent, internally prepared unaudited
consolidated financial statements of the type described in Section 5.1(a) for
such fiscal year, all in form and substance consistent with such financial
statements and summaries as delivered to the Lender prior to the Agreement Date;
(c) with each financial statement required by Section 5.1(a) and
Section 5.1(b) to be delivered to the Lender, a certificate ("Compliance
Certificate") in substantially the form set forth as EXHIBIT E, completed so as
to be acceptable to the Lender and signed by the chief financial officer of the
Parent (1) stating that, to the best of their knowledge after reasonable
inquiry, no Default or Event of Default has occurred and is continuing, or if a
Default or an Event of Default has occurred and is continuing, a statement of
the nature thereof and the action which the Borrower proposes to take with
respect thereto, and (2) setting forth, in sufficient detail, the information
and computations required to establish whether or not the Borrower was in
compliance with the requirements of Sections 6.1 through 6.4, inclusive, during
the periods covered by the financial reports then being furnished and as of the
end of such periods;
(d) promptly upon the mailing or other delivery thereof in a
distribution generally made to the stockholders of the Parent, unless already
delivered pursuant to another clause of this Section 5.1, copies of all
financial statements, reports, proxy statements and other material
communications so mailed or delivered;
(e) promptly after the Borrower knows or has reason to know that
any Default or Material Adverse Occurrence has occurred, but in any event not
later than ten (10) Business Days after any officer of the Borrower becomes
aware thereof, a notice of such Default or Material Adverse Occurrence
describing the same in reasonable detail and a description of the action that
the Borrower has taken and propose to take with respect thereto;
(f) promptly after receipt thereof, but in any event not later
than twenty-five (25) days after any officer of the Borrower becomes aware
thereof, all letters and reports to management of the Borrower prepared by its
independent certified public accountants which identify any material weakness in
the Borrower's systems of internal control or report other material matters to
the Borrower's management, Board of Directors or committee thereof and the
responses of the management of the Borrower thereto;
(g) promptly following the commencement of any litigation, suit,
administrative proceeding or arbitration relating to the Borrower or any
Guarantor which if adversely determined could result in a Material Adverse
Occurrence or otherwise relating in any way to the transactions contemplated by
this Agreement, but in any event not later than twenty-five (25) days after any
officer of the Borrower or Guarantor becomes aware thereof, a notice thereof
describing the allegations of such litigation, suit, administrative proceeding
or arbitration and the Borrower's or Guarantor's response thereto;
32
(h) promptly upon learning thereof, but in any event not later
than ten (10) Business Days after any officer of the Borrower becomes aware
thereof, a notice of the occurrence of any event which constitutes an exception
in any material respect to any representation or warranty or a breach of any
covenant or agreement made by the Borrower in any Loan Document regardless of
whether such representation, warranty, covenant or agreement is required to be
made as of the date of such event;
(i) promptly upon learning thereof, any "reportable event" or
"prohibited transaction" or the imposition of a withdrawal or termination
liability within the meaning of ERISA in connection with any Plan or
Multiemployer Plan, and, when known, any action taken by the Internal Revenue
Service, Department of Labor or PBGC with respect thereto;
(j) annually, within ten (10) days of June 1 (or such other annual
renewal date of the Borrower' insurance policies), a certificate of insurance
indicating that the Borrower continues to maintain all insurance coverages
required under the Loan Documents;
(k) as promptly as practicable, such other information with
respect to the financial condition and operations of the Borrower as the Lender
may reasonably request.
5.2 Maintenance of Existence; etc. Borrower shall maintain and
preserve, and cause each of its Subsidiaries to maintain and preserve, (i) its
existence and good standing in the state of its organization and (ii) its
qualification and good standing as a foreign corporation in all states in which
such qualification and good standing are required in order to conduct its
business and own its property as conducted and owned in such states, except
where the failure to be so qualified as a foreign corporation does not
constitute a Material Adverse Occurrence.
5.3 Maintenance of Properties and Material Contracts. The Borrower
will maintain or cause to be maintained in the ordinary course of business in
good repair, working order and condition (reasonable wear and tear excepted) all
material Properties used in their respective businesses (whether owned or held
under lease), and from time to time make or cause to be made all needed and
appropriate repairs, renewals, replacements, additions, betterments and
improvements thereto. The Borrower will comply in all material respects with its
obligations under all Material Contracts and to continue such Material Contracts
in full force and effect without breach thereof, except to the extent
non-compliance is not a Material Adverse Occurrence.
5.4 Payment of Taxes; etc. The Borrower shall pay and discharge as
the same may become due and payable, all taxes, assessments and other
governmental charges or levies against or on any of its Property, as well as
claims of any kind which, if unpaid, might become a Lien upon any of its
Property; provided, however, that the foregoing shall not require the Borrower
to pay any such tax, assessment, charge, levy or claim so long as the validity
thereof shall be contested diligently in good faith by appropriate proceedings
that will prevent a forfeiture or sale of any Property and an adequate book
reserve shall have been set aside with respect thereto, but only so long as such
tax, assessment, charge, levy or claim does not become a Lien on any assets of
the Borrower. The Borrower shall make all required withholding deposits.
33
5.5 Compliance with Laws. The Borrower shall carry on its business
activities in substantial compliance with all material applicable federal or
state laws and all applicable rules, regulations and orders of all governmental
bodies and offices having power to regulate or supervise its business
activities, including, without limitation, all applicable environmental,
pollution control, health and safety statutes, laws and regulations. The
Borrower shall maintain all material rights, liens, franchises, permits,
certificates of compliance or grants of authority required or useful in the
conduct of its business. The Borrower agree that the real property and its
intended use will comply at all times with all material applicable laws,
governmental regulations and the terms of any enforcement action now or
hereafter commenced by any Federal, state, regional or local governmental
agency, including, without limitation, all applicable Federal, state and local
laws pertaining to air and water quality, hazardous waste, waste disposal and
other environmental matters (including, but not limited to, the Clean Water,
Clean Air, Federal Water Pollution Control, Solid Waste Disposal, Resource
Conservation and Recovery and Comprehensive Environmental Response,
Compensation, and Liability Acts, as said acts may be amended from time to
time), and the rules, regulations and ordinances of all applicable Federal,
state and local agencies and bureaus.
5.6 Books and Records; etc. The Borrower shall keep (i) a system
of accounting administered in accordance with GAAP and (ii) books and records
accurately reflecting in all material respects all of its business affairs and
transactions, which shall be maintained in accordance with GAAP (where
applicable). The Borrower shall permit the Lender and its representatives, from
time to time at reasonable times and upon reasonable notice to the Borrower, to
visit the offices of the Borrower, discuss financial matters with officers of
the Borrower and with its independent public accountants (and by this provision
the Borrower authorizes their independent public accountants to participate in
such discussions) and examine any of the Borrower's books, corporate records and
assets.
5.7 Insurance. The Borrower will:
(a) Maintain insurance including, but not limited to, business
interruption coverage and public liability coverage insurance from responsible
companies in such amounts and against such risks to the Borrower as the Borrower
reasonably determines are prudent consistent with past business practice and
giving due consideration to growth in the Borrower's business (including,
without limitation, larceny, embezzlement, employee fidelity, and other criminal
misappropriation insurance);
(b) Keep its assets insured by nationally recognized and
responsible companies against loss or damage by fire, theft, burglary,
pilferage, loss in transit, explosions and hazards in amounts which are prudent
for the restaurant industry, in accordance with industry standards, and on terms
and in a manner reasonably satisfactory to the Lender (it being acknowledged
that the insurance policies delivered to the Lender prior to the Agreement Date
are reasonably satisfactory to the Lender based upon the Borrower's business on
the Agreement Date), all premiums thereon to be paid by the Borrower;
(c) Require that each insurance policy for the Borrower provides
for at least thirty (30) days prior written notice to the Lender of any
termination of or proposed cancellation or nonrenewal of such policy, or
material reduction in coverage.
34
5.8 Maintain Business and Fiscal Year End. The Borrower shall
continue to engage primarily, in the business or businesses being conducted on
the date of this Agreement. The Borrower will maintain its fiscal year and
fiscal quarter consistent with their practice as of the Agreement Date except
that, if the Borrower intends or is required to change any such fiscal period,
it will so notify Lender.
5.9 ERISA.
The Borrower agrees that all assumptions and methods used to determine
the actuarial valuation of employee benefits, both vested and unvested, under
any Plan, and each such Plan, will comply in all material respects with ERISA
and other applicable laws.
(a) The Borrower will not at any time permit any Plan to:
(1) engage in any "prohibited transaction" as such term is
defined in Section 4975 of the Code or in Section 406 of ERISA;
(2) incur any "accumulated funding deficiency" as such term is
defined in Section 302 of ERISA, whether or not waived;
(3) be terminated under circumstances which are likely to
result in the imposition of a lien on the property of the Borrower
pursuant to Section 4068 of ERISA, if and to the extent such
termination is within the control of the Borrower; or
(4) be operated or administered in a manner which is not in
compliance with ERISA or any applicable provisions of the Code;
if the event or condition described in (1), (2), (3) or (4) above is likely to
subject Borrower or any Subsidiary or ERISA Affiliate to a Material Adverse
Occurrence.
(b) Upon the request of the Lender, the Borrower will deliver to
the requesting party a copy of the annual report of each Plan (Form 5500)
required to be filed with the Internal Revenue Service. Copies of such annual
reports shall be delivered no later than thirty (30) days after the date the
copy is requested.
5.10 Changes to GAAP. In the event that the Borrower makes any
changes to the generally accepted accounting principles used in the preparation
of the Borrower's books and/or financial statements such that such principles
are not applied consistently with any such principles applied during any prior
period, (i) such change shall be in accordance with GAAP in effect at the time
of such change and shall be concurred in by the certified public accountants
certifying the financial statements of the Borrower and its Subsidiaries, and
(ii) the Borrower shall give the Lender prompt written notice thereof as far in
advance thereof as practicable. The Lender is hereby authorized to adjust the
financial covenants of this Agreement to reflect the effect of such changes and
such adjustments shall become effective as indicated by the Lender.
5.11 Use of Proceeds. The Borrower will use the proceeds of the
Advances only for lawful purposes and in accordance with the terms of this
Agreement. No proceeds of any Loans
35
hereunder shall be used for the purchase or carrying or the extension of credit
for the purpose of purchasing or carrying any margin stock within the meaning of
Regulations T, U and X.
5.12 Payment of Indebtedness; Loans. Subject to any provisions
regarding subordination herein or as set forth in any other Loan Document, the
Borrower will pay any and all of its Indebtedness when and as it becomes due,
other than amounts diligently disputed in good faith and for which adequate
reserves have been set aside in accordance with GAAP.
5.13 Subsidiary Guaranty. Intentionally Omitted.
5.14 Survival of Warranties and Representations. The Borrower
covenants, warrants and represents to the Lender that all representations and
warranties of the Borrower contained in this Agreement and in the other Loan
Documents shall be true at the time of Borrower's execution of this Agreement
and (except as otherwise agreed to by the Lender, in writing) in all material
respects on the date of each Advance, Loan or issuance of a Letter of Credit
hereunder and shall survive the execution, delivery and acceptance hereof and
thereof by the parties thereto and the closing of the transactions described
herein and therein or related hereto and thereto, and any investigation at any
time made by or on behalf of the Lender shall not diminish their rights to rely
thereon.
ARTICLE VI.
CERTAIN FINANCIAL COVENANTS AND NEGATIVE COVENANTS
The Borrower agrees with the Lender that, from the date hereof and
thereafter for so long as any portion of any Advance, any Letter of Credit or
any Obligations shall be outstanding or any Lender shall have any Commitment
hereunder, unless the Lender shall otherwise consent in writing:
6.1 Fixed Charge Coverage Ratio. For each twelve-month period
ending on the last day of each fiscal quarter of the Borrower, the Borrower
shall maintain a Minimum Fixed Charge Coverage Ratio of 1.50 to 1.00.
6.2 Maximum Adjusted Total Leverage Ratio. For each twelve-month
period ending on the last day of each fiscal quarter of the Borrower, the
Borrower shall maintain a maximum Adjusted Total Leverage Ratio of 3.00 to 1.00.
For purposes of this Section 6.2, Funded Debt shall not include the commitments
and contingent liabilities relative to the operating leases for the former Au
Bon Pan Division and its franchisees which are described in Note 9 found on page
40 of the 2002 Panera Bread Company annual report.
6.3 Limitations on Indebtedness. The Borrower will not create,
assume, incur, issue, guarantee or otherwise become or remain obligated in
respect of, or permit to be outstanding, any Indebtedness, except:
(a) Indebtedness existing on the date hereof, and if in excess of
One Million and No/100 Dollars ($1,000,000.00) disclosed on Annex III hereto;
(b) Indebtedness owed to the Lender and represented by the Notes
or any other Loan Document;
36
(c) Current accounts payable and accrued expenses incurred in the
ordinary course of business consistent with past practice;
(d) Rate Hedging Obligations, if permitted hereunder;
(e) Indebtedness, in addition to Indebtedness permitted by clauses
(a), (b), (c), and (d) above, in an aggregate principal amount incurred during
any fiscal year or at any one time outstanding not to exceed $10,000,000.00.
6.4 Liens. The Borrower will not create, incur, assume or permit
to exist or to be created or assumed any Lien on its Property, whether now owned
or hereafter acquired, or upon any income or profits therefrom, or own or
acquire or agree to acquire Property of any kind subject to any Lien (including
by way of creating, acquiring or investing in any Person who is or becomes a
Subsidiary), except the following (the "Permitted Liens"):
(a) Liens arising in the ordinary course of business by operation
of law on real property for real estate taxes and Liens arising in the ordinary
course of business by operation of law securing taxes, assessments or
governmental charges or levies or the claims or demands of contractors,
materialmen, mechanics, carriers, warehousemen, landlords and other like
Persons;
(b) Liens incurred or deposits made in the ordinary course of
business (1) in connection with workmen's compensation, unemployment insurance,
social security and other like laws or (2) to secure the performance of letters
of credit, bids, tenders, sales contracts, leases, statutory obligations,
surety, appeal and performance bonds and other similar obligations not incurred
in connection with the borrowing of money, the obtaining of advances or the
payment of the deferred purchase price of Property and not in excess of $500,000
in the aggregate outstanding at any one time;
(c) Attachments, judgments and other similar Liens arising in
connection with court proceedings, provided the execution or other enforcement
of such Liens is effectively stayed and the claims secured thereby are being
actively contested in good faith and by appropriate proceedings in such manner
as not to have the Property subject to such Liens forfeitable or sold;
(d) Easements, rights-of-ways, reservations, exceptions, minor
encroachments, restrictions and similar charges created or incurred in the
ordinary course of business and not in connection with Indebtedness, and which
in the aggregate do not materially detract from the value of such Properties or
materially impair or interfere with their use in the business operations of the
Borrower;
(e) Liens existing on the date hereof and if over One Million and
No/100 Dollars ($1,000,000.00) disclosed on Annex III hereto;
(f) Liens securing purchase money Indebtedness permitted pursuant
hereto;
(g) Liens in favor of the Borrower which are assigned to the
Lenders as Collateral; and
(h) Liens in favor of the Lender.
37
For purposes of this Section 6.4, (A) all Liens of a Person which becomes a
Subsidiary and which are outstanding as of the date such Person becomes a
Subsidiary shall be deemed to have been incurred as of the date such Person
becomes a Subsidiary; and (B) the Borrower and its Subsidiaries shall not be
deemed to permit to exist a Lien created or incurred by a Person (other than the
Borrower and its Subsidiaries, and Affiliates of any of them) with respect to
real Property owned by such other Person in which the Borrower and their
Subsidiaries have a leasehold interest.
6.5 Dividends, Stock Purchase and Distributions. The Borrower will
not, except as hereinafter provided: (i) declare or pay any dividends, either in
cash or Property, on any shares of its capital stock of any class (except
dividends payable by the Borrower solely in shares of common stock of the
Borrower and dividends if paid would not violate the financial ratios contained
in this Agreement); or (ii) directly or indirectly, or through any Subsidiary,
purchase, redeem, retire, or otherwise acquire any shares of its capital stock,
or other equity interests therein, of any class or any warrants, rights or
options to purchase or acquire any shares of its capital stock, or other equity
interests therein, the aggregate cost of which shall exceed Two Million Five
Hundred Thousand Dollars ($2,500,000.00); or (iii) make any other distribution,
either directly or indirectly or through any Subsidiary, in respect of its
capital stock, or other equity interests therein.
6.6 Sales of Assets. The Borrower will not sell, lease, abandon,
transfer or otherwise dispose of any material assets (including without
limitation the capital stock of any Subsidiary), without the prior written
consent of Lender which consent shall not be unreasonably withheld or
conditioned.
6.7 Liquidations, Mergers and Consolidations. The Borrower will
not liquidate or dissolve itself (or suffer any liquidation or dissolution) or
otherwise wind up, or to consolidate with or merge into any other Person or
permit any other Person to consolidate with or merge into it, except that a
Subsidiary may consolidate with or liquidate or merge into Borrower as long as
Borrower is the surviving entity; provided that (A) immediately after the
consummation of the transaction and after giving effect thereto, no condition or
event shall exist which constitutes a Default, an Event of Default, a Change of
Control or a Material Adverse Occurrence, (B) the merger or other transaction
documents include a written provision whereby the surviving entity expressly
acknowledges and reaffirms its Obligations under the Loan Documents (and copies
thereof are delivered to the Lender), and (C) the Borrower executes and delivers
such agreements as may be requested by the Lender in connection therewith; and
provided further, that with respect to transactions described in clause (ii)
above the Borrower gives the Lender written notice of any such permitted
transaction as promptly as practicable in advance of such transaction and, in
any event, within ten (10) Business Days of such transaction.
6.8 Disposition of Securities of a Subsidiary. The Borrower will
not, and will not permit any of its Subsidiaries to, sell or otherwise dispose
of (or enter into any agreement for any of the foregoing) any shares of the
stock or other equity interests therein (or any options or warrants to purchase
stock or other equity interests therein or other securities convertible or
exchangeable therefor) of a Subsidiary (said stock, options, warrants and other
securities herein called "Subsidiary Stock"), nor will the Borrower permit any
of its Subsidiaries to issue, sell or otherwise dispose of any Subsidiary Stock
(or enter into any agreement for any of the foregoing),
38
if the effect of the transaction would be to reduce the proportionate interest
of the Borrower in the Subsidiary whose shares are the subject of the
transaction.
6.9 Investments. The Borrower will not make or permit to exist any
Investment, except that, so long as no Default or Event of Default then exists
or is caused thereby, the Borrower may make Permitted Investments.
6.10 Transactions with Affiliates. The Borrower will not enter into
any material transaction (including, without limitation, the purchase, sale or
exchange of Property, the rendering of any service, the making of any Investment
in an Affiliate or the repayment of any Indebtedness owed to an Affiliate) with
any of their Affiliates, except for transactions between and among the Borrower,
any Subsidiary or any one or more of them in the ordinary course of business and
pursuant to the reasonable requirements of the Borrower's business, upon terms
which are fair and reasonable to the Borrower and which are not less favorable
to the Borrower or such Subsidiary than would be obtained in a comparable
transaction with a Person not an Affiliate.
6.11 Acquisitions. The Borrower will not make any Acquisitions,
except that, so long as no Default or Event of Default then exists or is caused
thereby, the Borrower and their Subsidiaries may make the Acquisitions described
on Annex IV.
6.12 Rate Hedging Obligations. Without the written consent of the
Lender, which consent shall not be unreasonably withheld, the Borrower will not
create, incur, guarantee or otherwise become liable on or in respect of any Rate
Hedging Obligations.
6.13 Amendment and Waiver. The Borrower will not enter into any
amendment of any of the material provisions of (whether through the filing of a
certificate of designation or otherwise), or agree to or accept or consent to
any waiver of any of the material provisions of, its articles or certificate of
incorporation, bylaws, or other charter document as appropriate, in each case in
any manner materially adverse to the Borrower, any of their Subsidiaries, or the
Lender, or any of them.
6.14 Limitation on Guarantees. The Borrower will not, and will not
permit any of their Subsidiaries to, at any time guarantee, assume, be obligated
with respect to, or permit to be outstanding any Guarantee of, any obligation
for the payment of money or any other Person other than (i) a guarantee by
endorsement of negotiable instruments for collection in the ordinary course of
business, or (ii) obligations under agreements of the Borrower or any of their
Subsidiaries entered into in connection with leases of real Property or the
acquisition of services, supplies and equipment in the ordinary course of
business of the Borrower or any of their Subsidiaries, or (iii) Guarantees
permitted or required by this Agreement or Loan Document.
6.15 ERISA Liabilities. The Borrower will not (i) permit the assets
of any of their respective Plans to be less than the amount necessary to provide
all accrued benefits under such Plans on an ongoing basis, or (ii) enter into
any Multiemployer Plan.
6.16 Material Contracts. The Borrower will not terminate or agree
to terminate any Material Contract to which Borrower is a party (other than
Material Contracts covering supplies or services in the ordinary course of the
Borrower's business which are terminated without
39
material liability to the Borrower and for which a reasonably equivalent
substitute or replacement contract has been obtained and no material adverse
effect on the Borrower, their Subsidiaries, the Lender, or any of them, occurs
or is caused thereby), or amend, modify or grant a waiver of any provisions of
any such Material Contract in any manner materially adverse to the Borrower,
their Subsidiaries, the Lender, or any of them.
ARTICLE VII.
EVENTS OF DEFAULT
7.1 Events of Default. The term "Event of Default" shall mean any
of the following events occurring for whatever reason, whether voluntary or
involuntary, effected by operation of law, judgment, order or otherwise:
(a) Any failure to pay any of the principal amount of any of the
Loans when and as due and such failure continues for period of five (5) days
after delivery of written notice to Borrower. Borrower shall only be entitled to
two (2) notices in any calendar year pursuant to this paragraph;
(b) Any failure to pay any interest on any of the Loans or any
fees or other amounts payable to the Lenders pursuant to this Agreement when and
as due and such failure continues for period of five (5) days after delivery of
written notice to Borrower. Borrower shall only be entitled to two (2) notices
in any calendar year pursuant to this paragraph;
(c) A failure to perform or observe any of the covenants or
agreements contained in Sections 5.1(d), 5.1(e), 5.1(f), 5.1(g), 5.1(h) and
5.1(i) or Article VI (except Borrower shall be entitled to the notice and cure
provided for in Section 7.1(d) for any failure by Borrower to perform and
observe the covenants set forth in Sections 6.3, 6.4 and 6.9);
(d) Any failure (other than those defaults specifically described
in other subsections of this Section 7.1) by the Borrower to perform and observe
any of the covenants contained in this Agreement or any other Loan Document and
such default shall continue unremedied for a period of thirty (30) days from the
earlier of (A) Lender giving notice thereof to the Borrower and (B) the date on
which the Borrower knew of the occurrence of such default;
(e) A default by the Borrower or any of their Subsidiaries on any
Indebtedness; or any event occurs or any condition exists in respect of any
Indebtedness of the Borrower or such Subsidiaries, or under any agreement
securing or relating to such Indebtedness, the effect of which is (1) to result
in the failure to pay when due of at least $250,000 in aggregate principal
amount of such Indebtedness or (2) to cause or permit any holder of such
Indebtedness or a trustee to accelerate the maturity of such Indebtedness prior
to its stated maturity or prior to its regularly scheduled dates of payment. Any
Event of Default shall constitute a default under any Indebtedness and any
agreements related thereto, now or hereafter outstanding at any time between any
of the Borrower or their Subsidiaries and the Lender or their Affiliates;
(f) An involuntary case under any applicable Federal or state
bankruptcy, insolvency or similar laws is commenced against either the Borrower
or any of their Subsidiaries and the petition is not dismissed, stayed, bonded
or discharged within thirty (30) days after the commencement of the case; the
entry of a decree or order by a court having jurisdiction in the
40
premises in respect of the Borrower or any of their Subsidiaries under the
Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal or state bankruptcy, insolvency or other similar law; or the
entry of a decree or order by a court having jurisdiction in the premises
appointing a receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Borrower or any of their Subsidiaries or of any
substantial part of the property of the Borrower or any of their Subsidiaries,
or ordering the winding up or liquidation of its affairs, and the continuance of
any such decree or order unstayed and in effect for a period of thirty (30)
consecutive days;
(g) The commencement by the Borrower or any of their Subsidiaries
of or consent to a voluntary case under the Federal bankruptcy laws, as now or
hereafter constituted, or any other applicable Federal or state bankruptcy,
insolvency or other similar law or the request or consent by it to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator or other
similar official of either of the Borrower or any of their Subsidiaries or of
any substantial part of the property of the Borrower or any of their
Subsidiaries, or the making by it of an assignment for the benefit of creditors,
or the failure by the Borrower or any of their Subsidiaries to pay its debts
generally as they become due, or the taking of any action by the Borrower or any
of their Subsidiaries in furtherance thereof;
(h) Any judgments, writs, warrants of attachment, executions or
similar process is issued or levied against the Borrower, any of their
Subsidiaries, or any of them or any of the assets of the Borrower or any of
their Subsidiaries where the amount of such judgments, writs, warrants of
attachment, executions or similar process (1) is not covered by insurance or (2)
exceeds $250,000 in the aggregate and where such judgments, writs, warrants of
attachment, executions or similar process are not discharged, released, vacated,
suspended, stayed, abated or fully bonded prior to any sale and in any event
within thirty (30) days after issue or levy;
(i) Any representation or warranty set forth in this Agreement or
any other Loan Document is untrue, incorrect or misleading in any material
respect on the date as of which the matters set forth are stated or certified or
deemed stated or certified, or any event or circumstance exists on the date as
of which the matters set forth are stated or certified or deemed stated or
certified which constitutes an exception in any material respect to any such
representation or warranty as set forth in this Agreement or such other Loan
Document (other than such event or circumstance as exists on the Agreement Date
and is disclosed on a Schedule to this Agreement or such other Loan Document as
of the Agreement Date);
(j) There shall be at any time any "accumulated funding
deficiency," as defined in ERISA or in Section 412 of the Code, with respect to
any Plan maintained by the Borrower or to which the Borrower or any of the
Borrower' Subsidiaries has any liabilities, or any trust created thereunder; or
a trustee shall be appointed to administer any such Plan; or PBGC shall
institute proceedings to terminate any such Plan; or the Borrower or any of the
Borrower's Subsidiaries shall incur any liability to PBGC in connection with the
termination of any such Plan; or any Plan or trust created under any Plan of the
Borrower or any of the Borrower's Subsidiaries shall engage in a "prohibited
transaction" (as such term is defined in Section 406 of ERISA or Section 4975 of
the Code) which would subject any such Plan, any trust created thereunder, any
trustee or administrator thereof, or any party dealing with any such Plan or
trust to the tax or
41
penalty in any material amount on "prohibited transactions" imposed by Section
502 of ERISA or Section 4975 of the Code;
(k) There shall occur any default (other than defaults described
elsewhere in this Section 7.1) under any Material Contract which remains
unremedied for any cure period applicable thereto under such agreement, or which
causes or permits another party to such agreement to seek damages in excess of
$250,000 in the aggregate or to terminate or otherwise materially adversely
affect the rights and interests of the Borrower thereunder;
(l) A Change of Control shall occur; or
(m) Any Loan Document or provision thereof shall cease to be in
full force and effect or any obligor thereon (including the Borrower and their
Subsidiaries) shall seek to establish the invalidity or unenforceability thereof
or otherwise deny liability thereunder.
7.2 Action if Event of Default. If an Event of Default described
in Section 7.1(f) or (g) shall occur, the full unpaid principal amount of and
interest on the Loans and all other amounts due and owing and Obligations
hereunder shall automatically be due and payable without any declaration,
notice, presentment, protest or demand of any kind (all of which are hereby
waived) and the obligation of the Lender to make additional Advances or to issue
Letters of Credit shall automatically terminate. If any Event of Default other
than pursuant to Section 7.1(f) or (g) shall occur and be continuing, upon
written notice to the Borrower, the Lender may terminate the Lender's obligation
to make additional Advances and to issue Letters of Credit and may declare the
outstanding principal amount of and interest on the Loans, all other amounts due
and owing and all other Obligations hereunder to be immediately due and payable
without other notice to the Borrower or any other obligor on the Loans,
presentment, protest or demand of any kind (all of which are hereby waived),
whereupon the full unpaid amount of the Loans and any and all other amounts and
Obligations, which shall be so declared due and payable shall be and become
immediately due and payable.
7.3 Remedies.
(a) Upon acceleration of the Loans, as provided in Section 7.2,
the Lender shall have all of the post-default rights granted to Lender under the
Loan Documents and under applicable law.
(b) The Lender, personally or by attorney, may in its discretion,
proceed to protect and enforce its rights by pursuing any available remedy
including a suit or suits in equity or at law, whether for damages or for the
specific performance of any obligation, covenant or agreement contained in this
Agreement or in the Notes, or in aid of the execution of any power herein or
therein granted, or for the enforcement of any other appropriate legal or
equitable remedy, as the Lender shall deem most effectual to collect the
payments then due and thereafter to become due on the Notes or under this
Agreement, to enforce performance and observance of any obligation, agreement or
covenant of the Borrower hereunder or under the Notes or to protect and enforce
any of the Lender's rights or duties hereunder.
(c) No remedy herein conferred upon or reserved to the Lender is
intended to be exclusive of any other remedy or remedies, and each and every
such remedy shall be cumulative,
42
and shall be in addition to every other remedy given hereunder or under any
other Loan Document now or hereafter existing at law, in equity or by statute.
ARTICLE VIII.
MISCELLANEOUS
8.1 Waivers, Amendments; etc. The provisions of this Agreement,
including the closing conditions set forth herein, may from time to time be
amended, modified or waived, if such amendment, modification or waiver is in
writing and consented to by the Borrower and the Lender; provided, that no
amendment, waiver or consent shall, unless in writing and signed by the Lender,
do any of the following: (i) waive or amend any of the conditions specified in
Article III, any of the covenants set forth in Articles V and VI or any Event of
Default specified in Sections 7.1(a) or 7.1(b) (ii) increase the Revolving Loan
Commitment of the Lender or subject the Lender to any additional obligations,
(iii) reduce the principal of, or interest on, the Notes or any fees or other
amounts payable to the Lender hereunder, (iv) postpone any date fixed for any
payment of principal of, or interest on, the Notes or any fees or other amounts
payable to the Lender hereunder, (v) amend this Section 8.1 or (vi) except as
specifically permitted hereby or thereby, release or discharge Borrower or other
obligor on the Loans.
No failure or delay on the part of the Lender, or the holder of any
Note in exercising any power or right under this Agreement or any Note shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power or right preclude any other or further exercise thereof or the
exercise of any other power or right. No notice to or demand on the Borrower in
any case shall entitle it to any notice or demand in similar or other
circumstances.
8.2 Payment Dates. Except as expressly provided in this Agreement,
whenever any payment to be made hereunder by or to the Lender or to the holder
of any Note shall otherwise be due on a day which is not a Business Day, such
payment shall be made on the next succeeding Business Day, and such extension of
time shall be included in computing the fees or interest payable on such next
succeeding Business Day.
8.3 Notices. All communications and notices provided under this
Agreement shall be in writing by certified or registered mail, telecopy or
personal delivery and, if to the Borrower, addressed or delivered to the
Borrower at its address shown on the signature page hereof or, if to the Lender
delivered to it at the address shown on signature page hereof (to the attention
of the representative of Lender who executes this Agreement), or to any party at
such other address as may be designated by such party in a notice to the other
parties. Any notice shall be deemed given when transmitted by telecopier or when
personally delivered, if mailed properly addressed, shall be deemed given upon
the third Business Day after the placing thereof in the United States mail,
postage prepaid.
8.4 Costs and Expenses. The Borrower agrees to pay, or reimburse,
the Lender for all expenses reasonably incurred for the preparation of this
Agreement, including exhibits, and the Loan Documents and any amendments hereto
or thereto or consents or waivers hereunder or thereunder as may from time to
time hereafter be required thereby or by the transactions contemplated hereby,
including, but not limited to, the fees and out-of-pocket expenses of the
Lender, charges and disbursements of special counsel to the Lender from time to
time incurred in
43
connection with the preparation and execution of this Agreement
and any document relevant to this Agreement, including the Loan Documents, any
amendments hereto or thereto, or consents or waivers hereunder or thereunder,
and the consideration of legal questions relevant hereto and thereto. The
Borrower agrees to pay, or reimburse, the Lender upon demand for all costs and
expenses (including attorneys', auditors' and accountants' fees and expenses)
reasonably incurred and arising out of the transactions contemplated by this
Agreement and the Loan Documents, in connection with any work-out or
restructuring of the transactions contemplated hereby and by the Loan Documents
and any collection or enforcement of the obligations of the Borrower hereunder
or thereunder, whether or not suit is commenced, including, without limitation,
attorneys' fees and legal expenses in connection with any appeal of a lower
court's order or judgment. The obligations of the Borrower under this Section
8.4 shall survive any termination of this Agreement.
8.5 Indemnification. In consideration of the execution and
delivery of this Agreement by the Lender, the Borrower for itself and on behalf
of each of its Subsidiaries, agrees to indemnify, protect, defend, exonerate and
hold the Lender and its Affiliates, officers, directors, employees,
shareholders, representatives, agents, trustees, successors and assigns (the
"Indemnified Parties") free and harmless from and against any and all actions,
causes of action, suits, judgments, losses, claims, obligations, demands,
damages, costs, penalties, judgments, liabilities and damages, and expenses and
disbursements in connection therewith, including, without limitation, reasonable
fees, expenses and disbursements of counsel, agents, consultants and experts and
all expenses of litigation or preparation therefor (as any such fees, expenses
and disbursements are incurred), whether or not the Lender is a party thereto
and whether or not the Borrower or the Person seeking indemnification is the
prevailing party (the "Indemnified Liabilities"), imposed on, incurred by or
asserted against the Indemnified Parties or any of them as a result of, or in
any way arising out of or relating to:
(a) the execution, delivery, performance or enforcement of this
Agreement, the Loan Documents or any document executed pursuant hereto or
thereto by any of the Indemnified Parties, or
(b) any breach or alleged breach by the Borrower of any
representation, warranty, or covenant made hereunder or under any other Loan
Document, or
(c) the Commitment, the Loans or otherwise under this Agreement or
any other Loan Document (including the taking of Collateral for the
Obligations), including, without limitation, the use of the proceeds of Loans
hereunder in any fashion by the Borrower or the performance of the obligations
under the Loan Documents by the Borrower, or
(d) allegations of any participation by the Indemnified Parties,
or any of them, in the affairs of the Borrower, or allegations that any of them
has any liability, jointly or otherwise, with the Borrower for any reason, or
(e) any claims against the Indemnified Parties, or any of them, by
any shareholder, member, partner, Affiliate or other investor in or lender to
the Borrower or any Subsidiary of the Borrower, by any brokers or finders or
investment advisers or investment bankers retained by the
44
Borrower or by any other third party, arising out of the Commitment, the Loans
or otherwise under this Agreement or any other Loan Document, or
(f) in connection with taxes (other than income taxes), fees, and
other charges payable in connection with the Loans, or the execution, delivery,
and enforcement of this Agreement, the other Loan Documents, and any amendments
thereto or waivers of any of the provisions thereof, or
(g) any other matter, action or failure to act by the Indemnified
Parties in connection with this Agreement, any other Loan Document or the
transactions contemplated hereby or thereby,
except for any such Indemnified Liabilities arising on account of such
Indemnified Party's willful misconduct or gross negligence, as determined by a
final non-appealable order of a court with proper jurisdiction over the subject
matter. The provisions of this Section 8.5 shall survive termination of this
Agreement, payment in full of the Notes and satisfaction of all Obligations. The
obligations of the Borrower under this Section 8.5 are in addition to, and shall
not otherwise limit, any liabilities which the Borrower might otherwise have in
connection with any warranties or similar obligations of the Borrower in any
other agreement or instrument or for any other reason.
8.6 Severability. Any provision of this Agreement, the Notes or
any other Loan Document executed pursuant hereto which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions of this Agreement, the Notes or any other Loan Document or
affecting the validity or enforceability of such provision in any other
jurisdiction. If any such provision is determined by a court or by an arbitrator
appointed pursuant to this Agreement to be prohibited or unenforceable, then
upon the initial determination of such prohibition or unenforceability the
Borrower and the Lender will promptly commence negotiations and will negotiate
in good faith for a minimum period of thirty (30) days in an attempt to modify
such prohibited or unenforceable provision in a way that would render such
provision valid and enforceable and that would, as nearly as possible, have the
effect that was originally intended by the Borrower and the Lender; provided,
however, that nothing in this Section will stay, limit, modify or otherwise
affect, during the period of negotiation or otherwise, any rights or obligations
of the Borrower or the Lender under this Agreement, the Notes or any other Loan
Document including, without limitation, the right to pursue any remedies that
they may have, or the obligation to perform, under any Loan Document.
8.7 Governing Law. This Agreement and the Notes shall each be
deemed to be a contract made under, governed by and interpreted pursuant to the
internal laws (and not the law of conflicts) of the State of Georgia.
8.8 Successors and Assigns.
(a) This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns except
that: (1) the Borrower may not assign or transfer their rights hereunder without
the prior written consent of the Lender; and (2) Lender
45
may at any time, without the consent of Borrower, assign all or any portion of
its rights under this Agreement and the Notes to an Affiliate of Lender or if an
Event of Default has occurred and is continuing hereunder; otherwise, the
Borrower must give its prior written consent to such assignment, which will not
be unreasonably withheld, conditioned or delayed. Except to the extent otherwise
required by its context, the word "Lender" where used in this Agreement shall
mean and include any such assignee and such assignee shall be bound by and have
the benefits of this Agreement the same as if such holder had been a signatory
hereto. The Borrower shall not be required to pay the costs and expenses of the
assigning Lender incurred to complete the assignment or participation made by
such Lender pursuant to clause (2) of this subsection (a).
(b) Lender may, without the consent of the Borrower, sell
participations to one or more banks or other entities having a minimum capital
and surplus, total assets, or total assets under management of $100,000,000 or
similar financial capabilities in all or a portion of its rights and obligations
under this Agreement (including all or a portion of its Commitment, the Loans
owing to it, and its interest as an issuer with respect to Letters of Credit);
provided, however, that (1) Lender's obligations under this Agreement shall
remain unchanged, (2) Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (3) the participating
banks or other entities shall be entitled to the benefit of the cost protection
provisions contained in Section 2.3 to the extent of the Lender selling such
participation and the Borrower' aggregate obligations with respect to Section
2.3 shall not be increased by reason of such participation, and (4) the Borrower
shall continue to deal solely and directly with Lender in connection with
Lender's rights and obligations under this Agreement, and Lender shall retain
the sole right (and shall not limit its rights) to enforce the obligations of
the Borrower relating to the Loans and to approve any amendment, modification or
waiver of any provision of this Agreement (other than amendments, modifications
or waivers with respect to any fees payable hereunder (to the extent such
participants are entitled to such fees) or the amount of principal of or the
rate at which interest is payable on the Loans, or the dates fixed for payments
of principal of or interest on the Loans).
(c) Except as specifically set forth in this Section 8.8, nothing
in this Agreement, expressed or implied, is intended to or shall confer on any
Person other than the respective parties hereto and thereto and their successors
and assignees permitted hereunder and thereunder any benefit or any legal or
equitable right, remedy or other claim under this Agreement or any Notes.
8.9 Execution in Counterparts; Facsimile. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Signatures delivered by facsimile shall be enforceable against the
signing Person in the same manner as an original signature.
8.10 Financial Information. The Borrower assumes responsibility for
keeping itself informed of its own financial condition and the financial
condition of any and all Subsidiaries, endorsers and/or other guarantors of all
or any part of the Obligations, and of all other circumstances bearing upon the
risk of nonpayment of the Obligations, or any part thereof, that diligent
inquiry would reveal, and the Borrower agrees that the Lender shall have no duty
to
46
advise the Borrower of information known to it regarding such condition or any
such circumstances.
8.11 Entire Agreement. Except as otherwise expressly provided
herein, this Agreement and the other documents described or contemplated herein
embody the entire agreement and understanding among the parties hereto and
thereto and supersede all prior agreements and understandings relating to the
subject matter hereof and thereof.
8.12 Other Relationships. No relationship created hereunder or
under any other Loan Document shall in any way affect the ability of the Lender
or its Affiliates and Lender or its respective Affiliates to enter into or
maintain business relationships with the Borrower or any of their respective
Subsidiaries beyond the relationships specifically contemplated by this
Agreement and the other Loan Documents.
8.13 Directly or Indirectly. If any provision in this Agreement
refers to any action taken by any Person, or which such Person is prohibited
from taking, such provision shall be applicable whether such action is taken
directly or indirectly by such Person, whether or not expressly specified in
such provision.
8.14 Arbitration.
(a) CLAIM OR CONTROVERSY. IN LIEU OF PROCEEDING AT LAW AS
CONTEMPLATED HEREINABOVE AND EXCEPT AS PROVIDED IN SECTION 8.14(c) BELOW, ANY
CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES HERETO ARISING OUT OF A BREACH
OR AN ALLEGED BREACH OF THE PROVISIONS OF THIS AGREEMENT, INCLUDING ANY CLAIM
BASED ON OR ARISING FROM AN ALLEGED TORT, SHALL BE DETERMINED BY BINDING
ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION ACT (OR IF NOT
APPLICABLE, THE APPLICABLE STATE LAW), THE RULES OF PRACTICE AND PROCEDURE FOR
THE ARBITRATION OF COMMERCIAL DISPUTES OF J.A.M.S./ENDISPUTE OR ANY SUCCESSOR
THEREOF ("J.A.M.S."), AND THE PROVISIONS OF SECTION 8.14(b) BELOW. IN THE EVENT
OF ANY INCONSISTENCY AMONG SUCH RULES OF PRACTICE OR PROCEDURE AND THIS
AGREEMENT, THE PROVISIONS OF SECTION 8.14(b) BELOW SHALL CONTROL. JUDGMENT UPON
ANY ARBITRATION AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION, INCLUDING
AS CONTEMPLATED BY SECTION 8.15. ANY PARTY TO THIS INSTRUMENT, AGREEMENT OR
DOCUMENT MAY BRING AN ACTION, INCLUDING A SUMMARY OR EXPEDITED PROCEEDING, TO
COMPEL ARBITRATION OF ANY CONTROVERSY OR CLAIM TO WHICH THIS AGREEMENT APPLIES
IN THE COURTS CONTEMPLATED BY SECTION 8.15.
(b) SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN ATLANTA,
GEORGIA AND ADMINISTERED BY J.A.M.S. WHO WILL APPOINT THREE (3) ARBITRATORS;
PROVIDED, HOWEVER, THAT IF J.A.M.S. IS UNABLE OR LEGALLY PRECLUDED FROM
ADMINISTERING THE ARBITRATION, THEN THE AMERICAN ARBITRATION ASSOCIATION WILL
SERVE. ALL ARBITRATION HEARINGS WILL BE COMMENCED WITHIN THIRTY (30) DAYS OF THE
DEMAND
47
FOR ARBITRATION; FURTHER, THE ARBITRATOR SHALL ONLY, UPON A SHOWING OF CAUSE, BE
PERMITTED TO EXTEND THE COMMENCEMENT OF SUCH HEARING FOR UP TO AN ADDITIONAL
FIFTEEN (15) DAYS.
(c) RESERVATION OF RIGHTS. NOTHING IN THIS SECTION 8.14 SHALL BE
DEEMED TO (i) LIMIT THE APPLICABILITY OF ANY OTHERWISE APPLICABLE STATUTES OF
LIMITATION OR REPOSE AND ANY WAIVERS CONTAINED IN THIS AGREEMENT; (ii) BE A
WAIVER BY THE LENDERS OF THE PROTECTION AFFORDED TO THEM BY 12 U.S.C. SEC. 91 OR
ANY SIMILAR STATE LAW; (iii) LIMIT THE RIGHT OF THE ADMINISTRATIVE AGENT AND THE
LENDERS IN THE EVENT OF A DEFAULT IN THE PAYMENT OF PRINCIPAL, INTEREST OR OTHER
AMOUNTS OWED BY THE BORROWER TO, IN LIEU OF ARBITRATION (EVEN IF ALREADY
COMMENCED), PROCEED TO A COURT OF COMPETENT JURISDICTION, INCLUDING AS
CONTEMPLATED BY SECTION 8.15, TO ENFORCE THEIR RIGHTS AND REMEDIES, IN WHICH
EVENT THIS SECTION 8.14 SHALL NOT APPLY TO SUCH MATTER; OR (iv) LIMIT THE RIGHT
OF THE ADMINISTRATIVE AGENT AND THE LENDERS (A) TO EXERCISE SELF HELP REMEDIES
INCLUDING, BUT NOT LIMITED TO, SETOFF, OR (B) TO FORECLOSE AGAINST ANY REAL OR
TANGIBLE OR INTANGIBLE PERSONAL PROPERTY COLLATERAL, OR (C) TO OBTAIN FROM A
COURT PROVISIONAL OR ANCILLARY REMEDIES SUCH AS (BUT NOT LIMITED TO) INJUNCTIVE
RELIEF, WRIT OF POSSESSION OR THE APPOINTMENT OF A RECEIVER. THE ADMINISTRATIVE
AGENT AND THE LENDERS MAY EXERCISE SUCH SELF HELP RIGHTS, FORECLOSE UPON SUCH
PROPERTY, OR OBTAIN SUCH PROVISIONAL OR ANCILLARY REMEDIES BEFORE, DURING OR
AFTER THE PENDENCY OF ANY ARBITRATION PROCEEDING BROUGHT PURSUANT TO THIS
AGREEMENT. NEITHER THE EXERCISE OF SELF HELP REMEDIES NOR THE INSTITUTION OR
MAINTENANCE OF AN ACTION FOR FORECLOSURE OR PROVISIONAL OR ANCILLARY REMEDIES
SHALL CONSTITUTE A WAIVER OF THE RIGHT OF ANY PARTY, INCLUDING THE CLAIMANT IN
ANY SUCH ACTION, TO ARBITRATE THE MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING
RESORT TO SUCH REMEDIES.
8.15 Consent to Jurisdiction. EACH BORROWER HEREBY IRREVOCABLY
SUBMITS TO THE JURISDICTION OF ANY GEORGIA STATE OR FEDERAL COURT SITTING IN
FULTON COUNTY, GEORGIA, OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE NOTES OR ANY OTHER LOAN DOCUMENT AND EACH BORROWER
HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH GEORGIA STATE OR FEDERAL COURT.
EACH BORROWER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF
SUCH ACTION OR PROCEEDING. EACH PARTY IRREVOCABLY CONSENTS TO THE SERVICE OF
COPIES OF THE SUMMONS AND COMPLAINT AND ANY OTHER PROCESS WHICH MAY BE SERVED IN
ANY SUCH ACTION OR PROCEEDING BY THE MAILING BY UNITED STATES CERTIFIED MAIL,
RETURN RECEIPT REQUESTED, OF COPIES OF SUCH PROCESS TO SUCH BORROWER'S ADDRESS
REFERENCED HEREIN. EACH PARTY AGREES THAT A JUDGMENT,
48
FINAL BY APPEAL OR EXPIRATION OF TIME TO APPEAL WITHOUT AN APPEAL BEING TAKEN,
IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN
OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY
LAW. NOTHING IN THIS SECTION 8.15 SHALL AFFECT THE RIGHT OF ANY PARTY TO SERVE
LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF THE
ADMINISTRATIVE AGENT OR ANY LENDER TO BRING ANY ACTION OR PROCEEDING AGAINST
SUCH BORROWER OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION.
8.16 Waiver of Jury Trial. THE BORROWER, FOR ITSELF AND ON BEHALF
OF ITS SUBSIDIARIES, THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY
WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY NOTE, LOAN DOCUMENT OR ANY
OTHER INSTRUMENT OR DOCUMENT DELIVERED HEREUNDER OR THEREUNDER. THE BORROWER (A)
CERTIFIES THAT NEITHER THE ADMINISTRATIVE AGENT NOR ANY REPRESENTATIVE, AGENT OR
ATTORNEY OF THE ADMINISTRATIVE AGENT HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT THE ADMINISTRATIVE AGENT WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVERS OR OTHER WAIVERS CONTAINED IN THIS AGREEMENT, AND
(B) ACKNOWLEDGES THAT, IN ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS TO WHICH THE ADMINISTRATIVE AGENT IS A PARTY, THE ADMINISTRATIVE AGENT
IS RELYING UPON, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS CONTAINED IN
THIS SECTION 8.16.
8.17 Rules of Construction. Each party hereto acknowledges and
agrees that it has been represented by counsel during the negotiation and
execution of the Loan Documents, and that the Loan Documents are the product of
the negotiations of all parties and their respective counsel. Accordingly, all
parties waive with respect to the Loan Documents the application of any law,
regulation, holding or rule of construction providing that ambiguities in an
agreement or other document will be construed against the party drafting such
agreement or document.
[SIGNATURE PAGES FOLLOW]
49
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
BORROWER:
PANERA, LLC, A DELAWARE LIMITED
LIABILITY COMPANY
By: /s/ Mark Hood
---------------------------------------
Mark Hood, Senior Vice President and
Chief Financial Officer
By: /s/ Neal Yanofsky
---------------------------------------
Neal Yanofsky, Executive Vice President
and Chief Corporate and Administrative
Staff Officer
Address: 6710 Clayton Road
St. Louis, Missouri 63117
LENDER:
BANK OF AMERICA, N.A.
By: /s/ Bobby Ryan Oliver, Jr.
----------------------------
Name: Bobby Ryan Oliver, Jr.
-----------------------
Title: Vice President
----------------------
Address: GA1-006-13-20
600 Peachtree Street, NE
Atlanta, GA 30308
SIGNATURE PAGES
REVOLVING CREDIT AGREEMENT
S-1
ANNEX I
JURISDICTION AND QUALIFICATION OF BORROWER
To be inserted by amendment as provided for in Post Closing Agreement
A-I
ANNEX II
SUBSIDIARIES; JURISDICTION; QUALIFICATION
To be inserted by amendment as provided for in Post Closing Agreement
A-II
ANNEX III
INDEBTEDNESS; LIENS
To be inserted by amendment as provided for in Post Closing Agreement
A-III
ANNEX IV
APPROVED ACQUISITIONS
Borrower shall be permitted to acquire Panera's Bread franchisees and their
markets in increments of up to $25,000,000 each with an aggregate total
investment in such acquisitions over the term of the Loan of $75,000,000,
without the prior written consent of, but with notice to, Lender.
A-IV
EXHIBIT A
FORM OF NOTICE OF BORROWING
as of ___________ __, 200_
TO LENDER UNDER THE UNDERSIGNED'S REVOLVING CREDIT
AGREEMENT DATED AS OF _____________ __, 2003
Re: Revolving Credit Loans to Panera, LLC
Ladies and Gentlemen:
We refer to the Revolving Credit Agreement dated as of ___________ __,
2003 (as amended, modified or supplemented from time to time, the "Credit
Agreement") by and among Panera, LLC, a _________ limited liability company (the
"Borrower") and Bank of America, N.A., as Lender (as defined in the Credit
Agreement). Unless otherwise defined herein, capitalized terms used herein shall
have the meanings given thereto in the Credit Agreement.
The Borrower hereby certifies to the Lender that:
1. The Borrower hereby requests an Advance in the aggregate
amount of $______________ to be made on ________________,
under the Revolving Credit Commitment. Such Advance shall be a
[BASE RATE LOAN] [LIBOR BASE LOAN]. [SUCH ADVANCE, IF A LIBOR
BASE LOAN, SHALL HAVE AN INTEREST PERIOD OF ________ MONTHS
BEGINNING ON _________.] The proceeds of the Advance shall be
wired to the Borrower [OR FOR THE ACCOUNT OF THE BORROWER, TO
OTHER PERSONS], as requested on Schedule 1 attached hereto.
The foregoing instructions shall be irrevocable.
2. All of the representations and warranties of the Borrower and
the other obligors made under the Credit Agreement and any
other Loan Document which, pursuant to Article IV of the
Credit Agreement, are deemed made at and as of the time of any
Advance, are true and correct as of the date hereof in all
material respects, both before and after giving effect to the
application of the proceeds of the Advance in connection with
which this Notice of Borrowing is given.
3. As of this date, and after giving effect to the Advance
requested in this Notice of Borrowing, (i) there does not and
will not exist any Default or Event of Default under the
Credit Agreement and (ii) no Material Adverse Occurrence has
occurred.
4. All other conditions precedent to the Advance requested
hereby, including those set forth in Article III of the Credit
Agreement, have been satisfied.
Exhibit A
5. Attached to this Notice of Borrowing on Schedule 2 are
calculations demonstrating compliance with each of the
applicable financial covenants set forth in Article VI of the
Credit Agreement for the fiscal period ended as of
_____________, 200_.
6. A complete sources and uses of funds statement for the making
of the Advance(s) requested hereby is attached hereto as Schedule 3. No proceeds
of Advance(s) hereunder shall be used for the purchase or carrying or the
extension of credit for the purpose of purchasing or carrying any margin stock
within the meaning of Regulations T, U and X of the Board of Governors of the
Federal Reserve System.
PANERA, LLC
By:_________________________
Name:_______________________
Title:______________________
Exhibit A
EXHIBIT B
FORM OF REVOLVING CREDIT NOTE
U.S. $_________________ as of ________ __, 200_
FOR VALUE RECEIVED, the undersigned, PANERA, LLC., a Delaware limited
liability company (hereinafter, together with its successors and assigns, the
"Borrower") hereby promises to pay to the order of BANK OF AMERICA, N.A.
(hereinafter, together with its successors and assigns, the "Lender"), at the
offices of the Lender or such other place as the Lender may designate in writing
to the Borrower, the principal sum of _____________________ AND ___/100s DOLLARS
(U.S. $______________), or, if less, so much thereof as may from time to time be
outstanding hereunder, plus interest until all sums owed hereunder are paid in
full as hereinafter provided. Both principal and interest are payable in lawful
money of the United States of America and in immediately available funds to the
Lender to such domestic account as the Lender may designate. Advances made by
the Lender to the Borrower may be endorsed from time to time on the schedule
attached hereto, but the failure to make any such recordation or notation (or
any error in such notation) shall not affect the Obligations of the Borrower
hereunder or under the Credit Agreement (as hereinafter defined) to repay
principal and interest hereunder.
This Note is a Revolving Credit Note (the "Note") referred to in that
certain Revolving Credit Agreement dated as of _________ __, 2003 (as amended,
restated, supplemented or otherwise modified from time to time, the "Credit
Agreement") by and between the Borrower and the Lender. Except as otherwise
defined or limited herein, capitalized terms used herein shall have the meanings
ascribed to them in the Credit Agreement.
The Borrower shall repay principal outstanding hereunder from time to
time as provided in the Credit Agreement, including, without limitation, as
provided in Section 2.1 and Section 2.2 of the Credit Agreement. A final payment
of all principal amounts and other Obligations then outstanding hereunder shall
be due and payable in full on the Maturity Date.
The Borrower shall be entitled to borrow, repay, and re-borrow the
Revolving Credit Loans hereunder pursuant to the terms and conditions of the
Credit Agreement. Prepayment of the principal amount hereof may be made only as
provided in the Credit Agreement.
The Borrower promises to pay interest on the unpaid principal amount of
the Revolving Credit Loans outstanding hereunder until paid in full as provided
in Article II of the Credit Agreement. Interest under this Note shall also be
due and payable when this Note shall become due (whether at maturity, by reason
of acceleration or otherwise).
No provision of the Credit Agreement or this Note shall require the
payment or permit the collection of interest in excess of that permitted by
applicable law. If any excess amount of interest in such respect is provided
for, or shall be adjudicated to be so provided in connection with the portion of
the Revolving Credit Loans outstanding hereunder, the provisions of this
paragraph shall govern and prevail and neither the Borrower nor any sureties,
guarantors, successors or assigns of the Borrower shall be obligated to pay the
excess amount of such
Exhibit B
interest or any other excess sum paid for the use, forbearance, or detention of
sums loaned pursuant hereto. In the event that the Borrower ever pays, or the
Lender ever receives, collects or applies as interest, any such sum, such amount
which would be in excess of the maximum amount permitted by applicable law shall
be applied as a payment in reduction of the principal, unless the Borrower shall
notify the Lender in writing that it elects to have such excess returned
forthwith; and, if the principal has been paid in full, any remaining excess
shall forthwith be returned to the Borrower.
All parties now or hereafter liable with respect to this Note, whether
the Borrower, any guarantor, endorser, or any other person or entity, hereby
waive presentment for payment, demand, notice of non-payment or dishonor,
protest and notice of protest.
No delay or omission on the part of the Lender or any holder hereof in
exercising its rights under this Note, or delay or omission on the part of the
Lender in exercising its or their rights under the Credit Agreement or any other
Loan Document, or course of conduct relating thereto, shall operate as a waiver
of such rights or any other right of the Lender or any holder hereof, nor shall
any waiver by the Lender or any holder hereof, of any such right or rights on
any one occasion be deemed a bar to, or waiver of, the same right or rights on
any future occasion.
Time is of the essence of this Note.
This Note evidences the Lender's portion of the Revolving Credit Loans
under, and is entitled to the benefits and subject to the terms of, the Credit
Agreement, which contains provisions with respect to the acceleration of the
maturity of this Note upon the happening of certain stated events, and
provisions for prepayment.
This Note shall be construed in accordance with and governed by the
internal laws of the State of Georgia applicable to contracts made and to be
performed within the State of Georgia.
IN WITNESS WHEREOF, a duly authorized officer of the Borrower has
executed this Note as of the day and year first above written.
Exhibit B
EXHIBIT C
FORM OF LEGAL OPINION
[LETTERHEAD]
_____________ __, 200__
Bank of America, N.A.
GA 1-006-13-20
600 Peachtree Street, NE
Atlanta, Georgia 30308-2214
Attention: _______________
Re: Revolving Credit Agreement by and among Panera, LLC (the
"Borrower") and Bank of America, N.A. (the "Lender") dated as of
______________________ ______, 2003.
Ladies and Gentlemen:
I have acted as counsel to the Borrower and Panera Bread Company, Inc.
("Parent") in connection with the financing transactions described in that
certain Revolving Credit Agreement, dated the date hereof (the "Credit
Agreement"), by and between the Borrower and the Lender and the transactions
contemplated thereby. Unless otherwise provided herein: capitalized terms used
but not defined herein shall have the meanings given thereto in the Credit
Agreement. This letter is delivered to you in compliance with Section 3.1(a) of
the Credit Agreement.
As the basis for the conclusions expressed in this opinion letter, I
have examined, considered and relied upon execution copies of the documents set
forth below as of the Agreement Date. In doing so, I have assumed the
genuineness of signatures of all persons signing any documents, the authority of
all persons signing any document on behalf of parties thereto other than the
Borrower and the Parent, the authority of all public officials and governmental
authorities, the authenticity of all documents submitted to us as originals, the
conformity to authentic originals of all documents submitted to us as copies,
and the correctness of public files, records and certificates of, or furnished
by, governmental or regulatory agencies or authorities.
DOCUMENTS
1. Credit Agreement;
2. Note;
3. Parent Guaranty;
4. Notice(s) of Borrowing for the initial Advance of the Loans;
5. Closing Certificate;
Exhibit C
6. A certificate of good standing of the Borrower and Parent
issued as of a recent date by the appropriate authority of its jurisdiction of
formation;
7. The Certificate of Formation and Certificate of Incorporation
and the Limited Liability Agreement and the Bylaws of the Borrower and Parent
certified by the Secretary or other authorized representative of the Borrower
and Parent as being true, complete and correct as of the Agreement Date;
8. Certificates, dated the date hereof, of the Secretary of the
Borrower and Parent certifying: (i) a true copy of the resolutions of the board
of directors of such Person authorizing, among other things, the execution,
delivery and performance of the Loan Documents to which it is a party; and (ii)
the incumbency, authority and true signatures of the officers or other
representatives of such Person authorized to sign the Loan Documents to which it
is a party and to give notices and other communications in connection with the
Credit Agreement and the transactions contemplated thereby, together with a
sample of the true signature of such officers or other representatives; and
9. Such other documents and matters of law as I have considered
necessary or appropriate for the expression of the opinions contained herein.
For the purposes of this opinion letter, the documents and information
referred to above in 1 through 5 inclusive are herein collectively referred to
as the "Loan Documents" and all of the documents and information referred to
above are collectively referred to as the "Documents."
No other investigation has been undertaken in connection with this
opinion, and in particular, I have made no independent audit of any of the
Borrower's, Parent's or its Subsidiaries' businesses or operations. As to any
facts material to these opinions that I did not establish by relying upon
documents or records, I have relied upon statements, representations and/or
certificates of officers, directors, principals, or agents of the Borrower and
Parent, or in certifications delivered to us for this purpose. To the extent
that certain factual matters are stated "to the best of my knowledge," or a
similar phrase, it is intended to indicate that those attorneys in this firm who
have rendered legal services to the Borrower and Parent on a regular basis or in
connection with the Loan Documents do not have current actual knowledge of the
inaccuracy of such statement.
In rendering my opinions herein, I have relied solely upon the
information described explicitly above, and on no other information. I disclaim
any responsibility or duty to investigate, ascertain or report on any document,
matter, condition or proceeding which is outside the scope of my review
described in this letter, or which may develop subsequently to the date of this
letter, including any amendments or revisions to any of the Loan Documents made
after the date hereof. This disclaimer includes, but is not limited to, judicial
proceedings involving other parties.
I am admitted to the bars of the States of Massachusetts and North
Carolina. I render no opinion as to the laws of any of those states other than
as discussed in the next sentence. This opinion is based on the general
corporate laws of the State of Missouri and the laws of the State of Delaware
and for this purpose I have assumed that the application of the laws of any
other
Exhibit C
state would not have a materially different effect on this transaction, and I am
not aware of any matters that would make this assumption inappropriate or
knowingly false.
OPINION
Based upon my examination and consideration of the Documents, I am of
the opinion that as of the date hereof:
1. The Borrower is a limited liability company validly organized
and existing and in good standing under the laws of the State of Delaware, has
full power and authority to own its property and conduct its business as
conducted by it and is duly qualified and licensed to do business and, except
for the State of Alabama and the Commonwealth of Pennsylvania, is in good
standing as a foreign company in each jurisdiction where the nature of its
business or the character of its property makes such qualification or licensing
necessary. A list of jurisdictions in which the Borrower is qualified or
licensed to do business is set forth in Annex I of the Credit Agreement. The
Borrower has full power and authority to enter into and to perform its
obligations under the Loan Documents and to request Advances and Letters of
Credit under the Credit Agreement.
2. The execution, delivery and performance by the Borrower and
Parent of each of the Loan Documents to which it or they are a party, and the
consummation by the Borrower and Parent of each of the transactions contemplated
by such Loan Documents to which it or they are a party and the covenants and
agreements contained therein, (i) are within the corporate or company power, as
the case may be, of the Borrower and Parent; (ii) have been duly authorized by
all necessary corporate or company action, as the case may be, of the Borrower
and Parent; (iii) do not require any approval or consent of, or any
registration, qualification or filing with, any governmental agency or authority
or any approval or consent of any other Person; and (iv) do not and will not
conflict with, result in any violation of or constitute any default under, any
provision of the organizational, constitutive or governing documents (including,
as applicable, certificates and articles of incorporation, bylaws, operating
agreements and partnership agreements) of the Borrower and Parent or any of its
Subsidiaries, any agreement binding on or applicable to the Borrower and Parent,
or any law or governmental regulation or court decree or order binding upon or
applicable to the Borrower and Parent.
3. Each Loan Document (i) has been duly executed and delivered by
the Borrower and Parent; (ii) constitutes the legal, valid and binding
obligation of the Borrower and Parent; and (iii) is enforceable in accordance
with its terms except that, as to enforcement of remedies, enforcement may be
limited by bankruptcy, insolvency or similar laws affecting enforcement of
creditors' rights generally.
4. Based upon my review of the Borrower's company minute book and
membership transfer ledger, the membership units of the Borrower, as described
on Schedule I hereto, constitute all of the authorized, issued and outstanding
membership units of the Borrower and all membership units are fully paid and
non-assessable.
5. Based upon my review of the Parent's corporate minute book and
stock transfer ledger, the shares of the Parent, as described on Schedule I
hereto, constitute all of the
Exhibit C
authorized, issued and outstanding shares of the Parent and all such shares are
fully paid and non-assessable.
6. The Loans, as made pursuant to the terms of the Loan
Documents, comply with, or are exempt from, all applicable state or Federal
laws, regulations or other requirements pertaining to usury.
7. None of the transactions contemplated in the Loan Documents
(including, without limitation, the use of the proceeds of Loans and Advances
thereunder), will violate or result in violation of Section 7 of the Securities
Exchange Act of 1934, as amended, any regulations issued pursuant thereto, or
Regulations G, T, U, and X of the Board of Governors of the Federal Reserve
System, 12 C.F.R. Sections 207, 220, 221, and 224, respectively.
8. The Borrower is not an "investment company", or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an "investment
company," as such terms are defined in the Investment Company Act of 1940, as
amended (15 U.S.C. Section 80(a)(1), et seq.). The making of the Loans pursuant
to the Loan Documents, the application of the proceeds and repayment thereof,
and the performance by the Borrower of the transactions contemplated by the Loan
Documents will not violate any provision of said Investment Company Act of 1940
or any rule, regulation, or order issued by the Securities and Exchange
Commission thereunder.
9. Neither the Borrower nor Parent has (i) offered, sold or
issued any securities in violation of the registration requirements of the
Securities Act of 1933, as amended, or any other Federal or state law concerning
the offer and sale of securities; or (ii) violated any rule, regulation or
requirement under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended.
10. I have not been engaged as counsel with respect to, and to the
best of my knowledge there is no pending or threatened action, suit, claim,
proceeding, demand or investigation at law or equity, or before or by any
Federal, state, local or other governmental department, commission, court,
board, bureau, agency, tribunal or instrumentality, or before any arbitration or
arbitration board, domestic or foreign, against the Borrower or Parent or any of
their respective Properties, which if determined adversely could result in a
Material Adverse Occurrence.
11. In rendering the opinions in this letter, I are engaged solely
as counsel for the Borrower and Parent, and I are not engaged or acting as
counsel for the Lender, or any other Person. This opinion letter is provided to
Lender and its participants, assignees, or other transferees, by us in my
capacity as counsel to the Borrower and Parent and can be relied upon, on a
confidential basis, in connection with the transactions contemplated by the Loan
Documents solely by such Persons.
[SUCH OPINION MAY CONTAIN SUCH OTHER ASSUMPTIONS, QUALIFICATIONS AND
LIMITATIONS AS REASONABLY ACCEPTABLE TO THE LENDER AND ITS COUNSEL.]
Exhibit C
EXHIBIT D
LOAN CERTIFICATE
[LIMITED LIABILITY COMPANY]
I, _________________________, do hereby certify that I am the duly
elected and qualified _____and keeper of the company records of Panera, LLC, a
limited liability company organized and existing under the laws of the State of
___________ (the "Company"). In connection with that certain Revolving Credit
Agreement of even date herewith (the "Credit Agreement") by and among the
Company and Bank of America, N.A., ("Lender"). I hereby certify to the foregoing
Lender that:
(1) Attached hereto as Exhibit A are (i) a true, complete and correct
copy of the articles or certificate of organization of the Company, together
with all amendments thereto, each as in full force and effect on the date
hereof, certified to be true, complete and correct by the Secretary of State for
the State of ____________ and (ii) a true, complete and correct copy of the
operating agreement of the Company, together with all amendments thereto, each
as in full force and effect on the date hereof.
(2) Attached hereto as Exhibit B are certificates of good standing for
the Company, issued by the Secretaries of State for each jurisdiction in which
the Company is required to qualify or has qualified to do business. The Company
has, from the date of such certificates through the date hereof, remained in
good standing under the laws of such states.
(3) Attached hereto as Exhibit C is a true, complete and correct copy
of resolutions of the members of the Company duly adopted as of the ____ day of
______________, 200_, such corporate action having been duly taken in accordance
with the provisions of applicable law, the certificate or articles of
organization and the operating agreement of the Company, and being now in full
force and effect, without any modifications in any respect. Such resolutions
authorize the Company and the members designated therein to execute, deliver and
perform the other Loan Documents to which the Company is a party, including but
not limited to the [CREDIT AGREEMENT] [GUARANTY].
(4) Attached hereto as Exhibit D are true, complete and correct copies
of all membership agreements or voting agreements in effect with respect to the
ownership interests of the Company. [NO STOCKHOLDERS' AGREEMENT OR VOTING TRUST
AGREEMENT IS IN EFFECT WITH RESPECT TO THE STOCK OF THE CORPORATION.]
(5) Attached hereto as Exhibit E is a true, complete and correct list
of the Federal Employee Identification Number (FEIN) and Organizational
Identification Numbers of the Company.
(6) No suit or proceeding for the dissolution or liquidation of the
Company has been instituted or is now threatened. There are no actions, suit or
proceedings pending or threatened against the Company or any of its properties
before any court, arbitrator or governmental department, commission, bond,
bureau, agency or other instrumentality, domestic or foreign, and
Exhibit D
no such action, suit or proceeding if adversely determined, would cause or
constitute a Material Adverse Occurrence.
(7) The following persons have been duly elected to the offices of
the Company set forth beside their names, have been duly qualified, and as of
the date hereof are members of the Company, holding the offices set forth
opposite their respective names below, and the signatures set forth opposite
their respective names are their respective genuine signatures:
Name Title Signature
- ------------------ ----------------- --------------------
__________________ _________________ ___________________
__________________ _________________ ___________________
__________________ _________________ ___________________
Unless otherwise defined herein, capitalized terms used herein shall
have the meanings given thereto in the Credit Agreement.
IN WITNESS WHEREOF, I have signed this Loan Certificate on behalf of
the Company as of the ___ day of ___________, 200_.
PANERA, LLC, a ________ limited
liability company
By:_____________________________________
____________________,___________________
I, ________________, am the ________________ of the Company and I do
hereby certify effective as of the date hereof that ________________ is the duly
elected and qualified __________ of the Company as of the date hereof and the
signature set forth opposite his or her name is his or her genuine signature.
By:_____________________________________
Title:_______________________________
EXHIBITS
Exhibit A - Certificate or Articles of Organization and Operating Agreement
Exhibit B - Good Standing and Tax Certificates
Exhibit C - Authorizing Resolutions
Exhibit D - Member/Voting Agreements
Exhibit E - FEIN and Organizational ID Nos.
Exhibit D
LOAN CERTIFICATE
[CORPORATION]
I, _________________________, do hereby certify that I am the duly
elected and qualified Secretary and keeper of the corporate records of
__________ a corporation organized and existing under the laws of the State of
___________ (the "Corporation"). In connection with that certain Revolving
Credit Agreement of even date herewith (the "Credit Agreement") by and among the
Corporation and Bank of America, N.A., ("Lender"). I hereby certify to the
foregoing Lender that:
(8) Attached hereto as Exhibit A are (i) a true, complete and correct
copy of the articles or certificate of incorporation of the Corporation,
together with all amendments thereto, each as in full force and effect on the
date hereof, certified to be true, complete and correct by the Secretary of
State for the State of ____________ and (ii) a true, complete and correct copy
of the bylaws of the Corporation, together with all amendments thereto, each as
in full force and effect on the date hereof.
(9) Attached hereto as Exhibit B are certificates of good standing and
tax certificates for the Corporation, issued by the Secretaries of State for
each jurisdiction in which the Corporation is required to qualify or has
qualified to do business. The Corporation has, from the date of such
certificates through the date hereof, remained in good standing under the laws
of such states.
(10) Attached hereto as Exhibit C is a true, complete and correct copy
of resolutions of the board of directors of the Corporation duly adopted as of
the ____ day of ______________, 200_, such corporate action having been duly
taken in accordance with the provisions of applicable law, the certificate or
articles of incorporation and the bylaws of the Corporation, and being now in
full force and effect, without any modifications in any respect. Such
resolutions authorize the Corporation and the officers designated therein to
execute, deliver and perform the other Loan Documents to which the Corporation
is a party, including but not limited to the [CREDIT AGREEMENT] [GUARANTY].
(11) Attached hereto as Exhibit D are true, complete and correct copies
of all stockholder agreements or voting agreements in effect with respect to the
stock of the Corporation. [NO STOCKHOLDERS' AGREEMENT OR VOTING TRUST AGREEMENT
IS IN EFFECT WITH RESPECT TO THE STOCK OF THE CORPORATION.]
(12) Attached hereto as Exhibit E is a true, complete and correct list
of the Federal Employee Identification Number (FEIN) and Organizational
Identification Numbers of the Corporation.
(13) No suit or proceeding for the dissolution or liquidation of the
Corporation has been instituted or is now threatened. There are no actions, suit
or proceedings pending or threatened against the Corporation or any of its
properties before any court, arbitrator or governmental department, commission,
bond, bureau, agency or other instrumentality, domestic or foreign, and no such
action, suit or proceeding if adversely determined, would cause or constitute a
Material Adverse Occurrence.
Exhibit D
(14) The following persons have been duly elected to the offices of the
Corporation set forth beside their names, have been duly qualified, and as of
the date hereof are officers of the Corporation, holding the offices set forth
opposite their respective names below, and the signatures set forth opposite
their respective names are their respective genuine signatures:
Name Title Signature
- ------------------ ----------------- --------------------
__________________ _________________ ___________________
__________________ _________________ ___________________
__________________ _________________ ___________________
Unless otherwise defined herein, capitalized terms used herein shall
have the meanings given thereto in the Credit Agreement.
IN WITNESS WHEREOF, I have signed this Loan Certificate on behalf of
the Corporation as of the ___ day of ___________, 200_.
_____________, a ________
corporation
By:_____________________________________
_______________________, Secretary
I, ________________, am the ________________ of the Corporation and I
do hereby certify effective as of the date hereof that ________________ is the
duly elected and qualified Secretary of the Corporation as of the date hereof
and the signature set forth opposite his or her name is his or her genuine
signature.
By:_____________________________________
Title: ______________________________
EXHIBITS
Exhibit A - Certificate or Articles of Incorporation and Bylaws
Exhibit B - Good Standing and Tax Certificates
Exhibit C - Authorizing Resolutions
Exhibit D - Stockholder/Voting Agreements
Exhibit E - FEIN and Organizational ID Nos.
Exhibit D
EXHIBIT E
FORM OF COMPLIANCE CERTIFICATE
The undersigned, being the President and Chief Financial Officer of
Panera Bread Company, Inc., a Delaware corporation (the "Parent") hereby
certify, pursuant to Section 5.1(c) of the Revolving Credit Agreement dated as
of __________ __, 200_, (as in effect on the date hereof, the "Credit
Agreement") by and between Panera, LLC ("Borrower") and Bank of America, N.A.,
as Lender:
1. The accompanying [AUDITED/UNAUDITED] financial statements of
the Parent and its Subsidiaries on a consolidated and consolidating basis as of
______, ____, for the [QUARTER/YEAR] ended, are complete and correct in all
material respects and present fairly, in accordance with GAAP, the financial
condition of the Parent and its Subsidiaries, as applicable, as of the end of
such period, and the results of operations for such period then ended, in each
case on the basis presented and subject, in the case of interim statements, only
to normal year-end adjustments that are not material in amount or type.
2. Attached hereto as Schedule 1 are calculations performed by
the undersigned or under the undersigned's supervision demonstrating what the
"Applicable Margin" should be pursuant to Section 2.1(j) of the Credit
Agreement.
3. Attached hereto as Schedule 2 are calculations performed by
the undersigned or under the undersigned's supervision demonstrating the
Borrower's compliance with each of the financial covenants set forth in Sections
6.1 and Section 6.2 of the Credit Agreement, during the [QUARTER/YEAR] being
reported and as of the end of such period.
4. To the best of the undersigned's knowledge, after reasonable
investigation, no Default or Event of Default has occurred and is continuing, or
if a Default or an Event of Default has occurred or is continuing.
Capitalized terms used herein and not otherwise defined are used as
defined in the Credit Agreement.
IN WITNESS WHEREOF, the undersigned have signed this Compliance
Certificate as of the ________ day of ______________, ____.
By:_____________________________________
Name:________________________________
Chief Financial Officer
Exhibit E
EXHIBIT F
FORM OF APPLICATION AND AGREEMENT
FOR STANDBY LETTER OF CREDIT
Exhibit F
[BANK OF AMERICA LOGO]
FOR BANK OF AMERICA USE ONLY
APPLICATION AND AGREEMENT FOR STANDBY L/C No.
LETTER OF CREDIT
TO: Bank of America, N.A. ("Bank of America")
A. APPLICATION.
1._________________________________________("Applicant") requests Bank of
America to issue an irrevocable standby letter of credit ("Letter of Credit")
as follows:
[ ] Full text teletransmission [ ] Airmail with brief preliminary
teletransmission advice
[ ] Airmail [ ] Courier
2. Applicant Address: 3. For Account of (Name and address, if
different from Applicant):
______________________________ ____________________________________
______________________________ ____________________________________
______________________________ ____________________________________
______________________________ ____________________________________
______________________________ ____________________________________
______________________________ ____________________________________
4. Advising Bank: 5. In favor of (Beneficiary Name and Address):
______________________________ ____________________________________
______________________________ ____________________________________
______________________________ ____________________________________
______________________________ ____________________________________
______________________________ ____________________________________
______________________________ ____________________________________
6. Amount:__________________________________________ ( _______________________)
(in words and figures)
Currency________________________________________________________________________
(if left blank, U.S. Dollars)
EXPIRATION DATE. Drafts to be drawn on and presented at Bank of America's
Address set forth in the Letter of Credit on or before:____________
[ ] If this box is marked, Applicant authorizes Bank of America to effect
payment of any sums due under this Application and Agreement by means of
debiting Applicant's account with Bank of America set forth below. This
authorization does not effect the obligation of Applicant to pay such sums
when due, if there are insufficient funds in such account to make such
payment when due, or if Bank of America fails to debit the account, and
this authorization does not affect any setoff rights of Bank of America at
law or in equity. Applicant's account number with Bank of America is _____.
7. Available by drafts drawn at sight on Bank of America when accompanied by
the following documentation:
a. The original Letter of Credit.
b. The signed statement of the Beneficiary worded as follows (state
wording that is to appear in the statement accompanying the draft;
specify if such wording must be exact):
Exhibit F
8. Special Instructions:
Bank of America, N.A.
(c) 2000 BANK OF AMERICA CORPORATION
00-35-0521NSBW 12-2000
Exhibit F
B. AGREEMENT.
In consideration of Bank of America's issuing the Letter of Credit at the
request of Applicant, Applicant agrees to the following:
1. APPLICANT PAYMENTS.
(a) Applicant shall pay Bank of America, on demand, all amounts paid by
Bank of America under or in respect of the Letter of Credit.
(b) On each fee payment date, so long as any undrawn amount of the Letter
of Credit remains available, Applicant shall pay Bank of America a Letter of
Credit fee. The fee payment date(s) shall be the date(s) as Applicant and Bank
of America may agree, or in the absence of such agreement, the fee payment date
shall be the date on which Bank of America issues the Letter of Credit. The fee
shall be at such rate per annum as Applicant and Bank of America may agree or,
in the absence of such agreement, at the rate customarily charged by Bank of
America at the time such fee is payable, based upon Applicant's
creditworthiness, as determined by Bank of America in its sole discretion. The
applicable Letter of Credit fee shall be calculated and payable on the undrawn
amount of the Letter of Credit as of each fee payment date, and shall be for the
period commencing on such fee payment date and ending on the day preceding the
next fee payment date (or the expiration date of the Letter of Credit, as the
case may be), both dates inclusive. The Letter of Credit fee will be computed on
the basis of a 360-day year and actual days elapsed. Bank of America shall not
be required to refund any portion of the Letter of Credit fee paid for any
period during which (a) the Letter of Credit expires or otherwise terminates or
(b) the undrawn amount of the Letter of Credit is reduced by drawings or by
amendment.
(c) Applicant shall pay Bank of America, on demand, commissions and fees
for amendments to, payments under, extensions of or cancellation of the Letter
of Credit, and other services in the amounts Applicant and Bank of America may
agree or, in the absence of such agreement, in the amounts customarily charged
by Bank of America on the date of Bank of America's demand.
(d) All payments and deposits of any kind by Applicant under this
Application and Agreement, including prepayments, shall be made at the banking
center or office Bank of America may designate from time to time. Bank of
America shall have no obligation to pay Applicant interest on any such payment,
prepayment or deposit made by Applicant under this Application and Agreement.
(e) (i) All payments and deposits by Applicant under this Application and
Agreement shall be in the currency in which the Letter of Credit is payable,
except that Bank of America may, at its option, require payments and deposits by
Applicant under this Application and Agreement to be made in U.S. Dollars if the
Letter of Credit is payable in a foreign currency.
(ii) The amount of each payment and each deposit by Applicant under
this Application and Agreement in U.S. Dollars for a Letter of Credit payable in
a foreign currency shall be determined by converting the relevant amount to U.S.
Dollars at the Conversion Rate in effect:
(A) with respect to each payment under Section 1(a) of this
Agreement, on the date the payment is made by Bank of America under or in
respect of the Letter of Credit; and
(B) with respect to each payment not falling under the preceding
clause (A) and each deposit, on the date of Bank of America's demand for such
payment or deposit.
(iii) If a U.S. Dollar deposit by Applicant under this Application and
Agreement for a Letter of Credit payable in a foreign currency becomes less than
the U.S. Dollar equivalent of the undrawn amount of the Letter of Credit because
of any variation in rates of exchange, Applicant shall deposit with Bank of
America, on demand, additional amounts in U.S. Dollars so that the total amount
deposited by Applicant under this Application and Agreement is not less than the
U.S. Dollar equivalent of the undrawn amount of the Letter of Credit, determined
by using the Conversion Rate on the date of Bank of America's latest demand.
(iv) "Conversion Rate" means the rate quoted by Bank of America for
the purchase from Bank of America of the relevant foreign currency with U.S.
Dollars.
(f) Applicant shall reimburse or compensate Bank of America, on demand, for
all costs incurred, losses suffered and payments made by Bank of America which
are applied or allocated by Bank of America to the Letter of Credit (as
determined by Bank of America) by reason of any and all present or future
reserve, capital, deposit, assessment or similar requirements against (or
against any class of or change in or in the amount of) assets or liabilities of,
or commitments or extensions of credit by, Bank of America.
(g) Applicant shall pay interest, on demand, on any amount not paid when
due under this Application and Agreement from the due date until payment in full
at a rate per annum equal to the rate of interest publicly announced from time
to time by Bank of America as its prime rate, plus three percentage points (not
to exceed the maximum rate permitted by applicable law). The prime rate is set
by Bank of America based on various factors, including Bank of America's costs
and desired return, general economic conditions and other factors, and is used
as a reference point for pricing some credits. Bank of America may price credit
at, above or below the prime rate. Any change in Bank of America's prime rate
shall take effect at the opening of business on the day specified in Bank of
America's public announcement of a change in Bank of America's prime rate.
Interest will be computed on the basis of a 360-day year and actual days
elapsed.
2. DEPOSIT EVENTS. Upon the occurrence of any of the following events,
Applicant shall deposit with Bank of America, on demand (except that such demand
shall not be required in the event of an occurrence described in (b) below) and
as cash security for Applicant's obligations to Bank of America under this
Application and Agreement, an amount equal to the undrawn amount of the Letter
of Credit:
(a) Applicant defaults under any provision of this Application and
Agreement;
(b) Any bankruptcy or similar proceeding is commenced with respect to
Applicant;
(c) Any default occurs under any other agreement involving the borrowing of
money or the extension of credit under which Applicant may be obligated as
borrower, installment purchaser or guarantor, if such default consists of the
failure to pay any indebtedness when due or if such default permits or causes
the acceleration of any indebtedness or the termination of any commitment to
lend or to extend credit;
(d) Applicant or any of its affiliates defaults on any other obligation to
Bank of America;
(e) Any guarantee of Applicant's obligations under this Application and
Agreement terminates, is revoked or its validity is contested by the guarantor,
or any of the events set forth in (b) through (d) above occur with respect to
the guarantor rather than the Applicant; or
(f) Any court order, injunction or other legal process is issued
restraining or seeking to restrain drawing or payment under the Letter of
Credit.
3. CHARGE TO ACCOUNTS. If Bank of America is unable to debit the account,
if any, specified on the Application, Applicant authorizes Bank of America to
charge any of Applicant's accounts with Bank of America, or any affiliate of
Bank of America, for all amounts then due and payable to Bank of America under
this Application and Agreement.
4. INDEMNITIES.
(a) Applicant will indemnify and hold Bank of America (such term to
include for purposes of this Section 4 affiliates of Bank of America and its
affiliates' officers, directors, employees and agents) harmless from and against
(i) all loss or damage arising out of the issuance by Bank of America, or any
other action taken by any such indemnified party in connection with the Letter
of Credit including any loss or damage arising in whole or in part from the
negligence of the party seeking indemnification, but excluding any loss or
damage resulting from the gross negligence or willful misconduct of the party
seeking indemnification, and (ii) all costs and expenses (including reasonable
attorneys' fees and allocated costs of in-house counsel and legal expenses) of
all claims or legal proceedings arising out of the issuance by Bank of America
of the Letter of Credit or incident to the collection of amounts owed by
Applicant hereunder or the enforcement of the rights of Bank of America
hereunder, including, without limitation, legal proceedings related to any court
order, injunction, or other process or decree restraining or seeking to restrain
Bank of America from paying any amount under the Letter of Credit. Additionally,
Applicant will indemnify and hold Bank of America harmless from and against all
claims, losses, damages, suits, costs or expenses (including reasonable
attorneys' fees and allocated costs of in-house counsel, and legal expenses)
arising out of Applicant's failure to timely procure licenses or comply with
applicable laws, regulations or rules, or any other conduct or failure of
Applicant relating to or affecting the Letter of Credit.
(b) If any award, judgment or order is given or made for the payment
of any amount due under this Application and Agreement and such award, judgment
or order is expressed in a currency other than the currency required under this
Application and Agreement, Applicant shall indemnify Bank of America against and
hold Bank of America harmless from all loss and damage incurred by Bank of
America as a result of any variation in rates of exchange between the date of
such award, judgment or order and the date of payment (or, in the case of
partial payments, the date of each partial payment thereof) in the required
currency
(c) Each of these indemnities shall constitute an obligation separate
and independent from the other obligations contained in this Application and
Agreement, shall give rise to a separate and independent cause of action, shall
apply irrespective of any indulgence granted by Bank of America from time to
time, and shall continue in full force and effect notwithstanding any award,
judgment or order for a liquidated sum in respect of an amount due under this
Application and Agreement.
5. GOVERNING LAW AND RULES. The Letter of Credit will be subject to, and
performance under the Letter of Credit by Bank of America, its correspondents,
and the beneficiary will be governed by, the rules of the "International Standby
Practices 1998" ("ISP98") or such later revision as may be published by the
Institute of International Banking Law & Practice, subject to applicable laws.
The Letter of Credit and this Application and Agreement shall be governed by and
construed under the laws of the state in the United States where Bank of America
issues the Letter of Credit, without reference to that state's provisions
regarding conflicts of laws, to the jurisdiction of which the parties hereto
submit. If the Letter of Credit is not issued in any state, the law of the State
of California will govern.
6. APPLICANT STATUS. The word "Applicant" in this Application and Agreement
refers to each signer (other than Bank of America) of this Application and
Agreement. If this Application and Agreement is signed by more than one
Applicant, their obligations under this Application and Agreement shall be joint
and several.
7. REPRESENTATIONS AND WARRANTIES. Applicant represents and warrants to
Bank of America that it has the authority to enter into this Application and
Agreement and that such Agreement will not violate or conflict with any of the
provisions of its constituent documents or any other agreement or undertaking to
which it is a party or to which it is bound.
8. MISCELLANEOUS.
(a) No delay, extension of time, renewal, compromise or other
indulgence which may occur or be granted by Bank of America shall impair the
rights and powers of Bank of America hereunder. Bank of America shall not be
deemed to have waived any of its rights hereunder, unless Bank of America shall
have signed such waiver in writing.
(b) Any notice from Bank of America to Applicant shall be sent to the
address of Applicant set forth on the Application and shall be effective upon
receipt by Applicant. Any notice from Applicant to Bank of America shall be sent
to the address of Bank of America specified by Bank of America to Applicant and
shall be effective upon receipt by Bank of America.
(c) Each provision of this Application and Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Application and Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Application and Agreement.
(d) Any and all payments made to Bank of America hereunder shall be
made free and clear of and without deduction for any present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding income or franchise taxes imposed by the United
States and any political subdivisions thereof (such nonexcluded taxes being
herein called "Taxes"). If Applicant shall be required by law to deduct any
Taxes from or in respect of any sum payable hereunder, (i) the sum payable shall
be increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
8(d)), Bank of America shall receive an amount equal to the sum Bank of America
would have received had no such
Exhibit F
deductions been made, (ii) Applicant shall make such deductions, and (iii)
Applicant shall pay the full amount deducted to the relevant authority in
accordance with applicable law. Applicant will indemnify Bank of America for the
full amount of Taxes (including, without limitation, any Taxes imposed by any
jurisdiction on amounts payable under this Section 8(d)) paid by Bank of America
and any liability (including penalties, interest and expenses) arising therefrom
or with respect thereto, whether or not such Taxes were correctly or legally
asserted. This indemnification shall be made within 30 days from the date Bank
of America makes written demand therefor. Within 30 days after the date of any
payment of Taxes, Applicant will furnish to Bank of America the original or a
certified copy of a receipt evidencing payment thereof.
(e) This Application and Agreement shall be binding upon Applicant,
its successors and assigns, and shall inure to the benefit of Bank of America,
its successors, transferees and assigns; provided that any assignment by
Applicant of any of its rights or obligations under this Application and
Agreement without the prior written consent of Bank of America shall be void.
(f) Unless the Applicant has specified in the Application that the
wording of the Letter of Credit must be exact, Applicant understands that the
final form of the Letter of Credit may vary from the wording specified in the
Application, and Applicant authorizes Bank of America to make such changes, not
materially inconsistent with the Application, which Bank of America deems
necessary or appropriate. Applicant understands that the risk to Applicant is
greater if Applicant requests a standby letter of credit which requires only a
draft, rather than a standby letter of credit which requires supporting
documentation.
(g) In the event of any change or modification, with the consent of
Applicant, which consent may be given by any means of submission acceptable to
Bank of America, including, without limitation, computer, facsimile or telex,
relative to the Letter of Credit or any instrument called for hereunder,
including any waiver made or in good faith believed by Bank of America to have
been made by Applicant of any term hereof or the noncompliance of any such
instruments with the terms of the Letter of Credit, this Application and
Agreement shall be binding upon Applicant with regard to the Letter of Credit as
so changed or modified, and to any action taken by Bank of America or any of its
correspondents relative thereto. No term or provision of this Application and
Agreement can be changed orally, but only in a writing and signed by Applicant
and Bank of America.
(h) Bank of America assumes no liability or responsibility for the
consequences arising out of delay and/or loss in transit of any message, letter
or documentation, or for delay, mutilation or other error arising in the
transmission of any teletransmission. In no event shall Bank of America be
liable for any special, indirect, consequential or exemplary damages.
(i) If Applicant includes in the Application any language describing
events or conditions that would not be possible for Bank of America to verify
solely from the documents required to be presented under the Letter of Credit,
Applicant acknowledges and agrees that Bank of America has no obligation to
verify compliance with such requirements.
NOTICE OF FINAL AGREEMENT. THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
THIS APPLICATION AND AGREEMENT IS EXECUTED BY APPLICANT ON __________.
Exhibit F
________________________________________________________________________________
Name of Applicant
________________________________________________________________________________
By: Title
________________________________________________________________________________
Name of Applicant (if any, co-signing with the Applicant above)
________________________________________________________________________________
By: Title
________________________________________________________________________________
(Where specimen signatures of the applicant named above are not on file with
Bank of America, the following signature verification is required.)
The above signature of an officer, partner or agent of each Applicant indicated
above confirms to that on file with us and such officer, partner or agent is
fully authorized to sign this Agreement for such Applicant.
________________________________________________________________________________
By: BANK (Full Name) (Bank Address)
________________________________________________________________________________
Authorized Signature/Title (Specimen signature of the signer must be on file
with Bank of America)
FOR OFFICE USE ONLY
________________________________________________________________________________
[ ] Trade Operations______________________ Mail Code#___________________
[ ] Per Standard Fee Schedule [ ] Other_______ [ ] Charge Banking Center
[ ] Charge Directly [ ] Commissions and Charges only [ ] Drawings,
Commissions and Charges
________________________________________________________________________________
Approving Officer (Printed Name) Phone #
________________________________________________________________________________
Officer Telephone # FAX #
________________________________________________________________________________
DDA Applicant A/C #
________________________________________________________________________________
Approving Bank Officer Signature
________________________________________________________________________________
Officer - Interoffice Address
________________________________________________________________________________
Officer Number and Cost Center Number
Bank of America, N.A.
Exhibit F