1
Exhibit 4.01
CREDIT AGREEMENT
dated as of February 7, 1996
among
MONRO MUFFLER BRAKE, INC.
as Borrower
THE CHASE MANHATTAN BANK, N.A.
and
FLEET BANK
as Lenders
and
THE CHASE MANHATTAN BANK, N.A.
as Agent
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Table of Contents
Page
ARTICLE 1. DEFINITIONS; ACCOUNTING TERMS 1
Section 1.01. Definitions 1
Section 1.02. Accounting Principles 15
Section 1.03. Directly or Indirectly 16
Section 1.04. Subsidiaries 16
ARTICLE 2. THE CREDIT 16
Section 2.01. The Revolving Credit Loans 16
Section 2.02. The Term Loans 17
Section 2.03. Interest 18
Section 2.04. Interest Periods 18
Section 2.05. Conversions 19
Section 2.06. Prepayments 19
Section 2.07. Purpose 19
Section 2.08. Changes of Commitments 19
Section 2.09. Certain Notices 20
Section 2.10. Minimum Amounts 20
Section 2.11. Commitment Fee 20
Section 2.12. Extension of Revolving Credit Termination Date 21
Section 2.13. Payments Generally 21
ARTICLE 3. YIELD PROTECTION; ILLEGALITY; ETC. 22
Section 3.01. Additional Costs 22
Section 3.02. Limitation on Types of Loans 23
Section 3.03. Illegality 24
Section 3.04. Certain Prime Loans pursuant to Secs. Sec. 3.01 and 3.03 24
Section 3.05. Certain Compensation 24
ARTICLE 4. CONDITIONS PRECEDENT 25
Section 4.01. Documentary Conditions Precedent 25
Section 4.02. Additional Conditions Precedent 26
Section 4.03. Deemed Representations 26
ARTICLE 5. REPRESENTATIONS AND WARRANTIES 26
Section 5.01. Incorporation, Good Standing and Due Qualification 26
Section 5.02. Corporate Power and Authority; No Conflicts 27
Section 5.03. Legally Enforceable Agreements 27
Section 5.04. Litigation 27
Section 5.05. Financial Statements 27
Section 5.06. Ownership and Liens 28
Section 5.07. Taxes 28
Section 5.08. ERISA 28
Section 5.09. Subsidiaries and Ownership of Stock 29
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Section 5.10. Operation of Business 29
Section 5.11. No Default on Outstanding Judgments or Orders 29
Section 5.12. No Defaults on Other Agreements 30
Section 5.13. Labor Disputes and Acts of God 30
Section 5.14. Investment Company Act 30
Section 5.15. Environmental Matters 30
Section 5.16. Regulation U 31
ARTICLE 6. AFFIRMATIVE COVENANTS 31
Section 6.01. Maintenance of Existence 31
Section 6.02. Conduct of Business 31
Section 6.03. Maintenance of Properties 31
Section 6.04. Maintenance of Records 31
Section 6.05. Maintenance of Insurance 32
Section 6.06. Compliance with Laws 32
Section 6.07. Right of Inspection 32
Section 6.08. Reporting Requirements 32
ARTICLE 7. NEGATIVE COVENANTS 35
Section 7.01 Indebtedness 35
Section 7.02. Liens 35
Section 7.03. Distributions. 36
Section 7.04. Leases; Sale-Leasebacks. 37
Section 7.05. Sale of Assets. 37
Section 7.06. Stock of Subsidiaries, Etc. 37
Section 7.07. Mergers, Etc. 38
Section 7.08. Transactions with Affiliates 38
Section 7.09. Hazardous Substances; Indemnification 38
Section 7.10. Acquisitions. 39
Section 7.11. Subsidiaries. 39
ARTICLE 8. FINANCIAL COVENANTS 39
Section 8.01. Leverage Ratio. 39
Section 8.02. Fixed Charge Coverage Ratio. 39
ARTICLE 9. EVENTS OF DEFAULT 40
Section 9.01. Events of Default 40
Section 9.02. Remedies 42
ARTICLE 10. THE AGENT; RELATIONS AMONG LENDERS AND BORROWER 42
Section 10.01. Appointment, Powers and Immunities of Agent 42
Section 10.02. Reliance by Agent 43
Section 10.03. Defaults 43
Section 10.04. Rights of Agent as a Lender 44
Section 10.05. Indemnification of Agent 44
(i)
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Section 10.06. Documents 45
Section 10.07. Non-Reliance on Agent and Other Lenders 45
Section 10.08. Failure of Agent to Act 45
Section 10.09. Resignation or Removal of Agent 46
Section 10.10. Amendments Concerning Agency Function 46
Section 10.11. Liability of Agent 46
Section 10.12. Transfer of Agency Function 46
Section 10.13. Non-Receipt of Funds by the Agent 46
Section 10.14. Withholding Taxes 47
Section 10.15. Several Obligations and Rights of Lenders 47
Section 10.16. Pro Rata Treatment of Loans, Etc. 48
Section 10.17. Sharing of Payments Among Lenders 48
ARTICLE 11. MISCELLANEOUS 48
Section 11.01. Amendments and Waivers 48
Section 11.02. Usury 49
Section 11.03. Expenses 49
Section 11.04. Survival 50
Section 11.05. Assignment; Participations 50
Section 11.06. Notices 51
Section 11.07. Setoff 51
Section 11.08. Table of Contents; Headings 51
Section 11.09. Severability 51
Section 11.10. Counterparts 52
Section 11.11. Governing Law 52
EXHIBIT A Revolving Credit Note
EXHIBIT B Term Loan Note
EXHIBIT C Authorization Letter
EXHIBIT D Opinion Of Counsel
EXHIBIT E Notice of Borrowing
SCHEDULE 1 List of Subsidiaries (Sec. 5.01, 5.09, 7.11)
SCHEDULE 2 Consents Required (Sec. 5.02(d))
SCHEDULE 3 Environmental Matters (Sec. Sec. 5.15, 6.08(c))
SCHEDULE 4 ERISA Amendments in the event of a Multiemployer Pension Plan
(ii)
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CREDIT AGREEMENT dated as of February 7, 1996 among MONRO MUFFLER
BRAKE, INC., a corporation organized under the laws of New York (the
"Borrower"), THE CHASE MANHATTAN BANK, N.A. and FLEET BANK (the "Lenders"), and
THE CHASE MANHATTAN BANK, N.A., as agent for the Lenders (in such capacity,
together with its successors in such capacity, the "Agent").
The Borrower desires that the Lenders extend credit as provided herein,
and the Lenders are prepared to extend such credit. Accordingly, the Borrower,
the Lenders and the Agent agree as follows:
ARTICLE 1. DEFINITIONS; ACCOUNTING TERMS.
Section 1.01. DEFINITIONS. As used in this Agreement the terms defined
below have the meanings set forth below for all purposes. References to any
gender include, unless the contest otherwise requires, references to all
genders, and references to the singular include, unless the context otherwise
requires, references to the plural and vice versa.
"ACQUISITION" means any transaction pursuant to which the Borrower or
any of its Subsidiaries (a) acquires equity securities (or warrants, options or
other rights to acquire such securities) of any corporation other than the
Borrower or any corporation which is not then a Subsidiary of the Borrower,
pursuant to a solicitation of tenders therefor, or in one or more negotiated
block, market or other transactions not involving a tender offer, or a
combination of any of the foregoing, (except for Plan Investments and
acquisitions of equity securities acquired solely to maximize the yield on
short-term excess cash or to minimize Borrower's New York tax liability on
investment income) or (b) makes any corporation a Subsidiary of the Borrower, or
causes any such corporation to be merged into the Borrower or any of its
Subsidiaries, in any case pursuant to a merger, purchase of assets or any
reorganization providing for the delivery or issuance to the holders of such
corporation's then outstanding securities, in exchange for such securities, of
cash or securities of the Borrower or any of its Subsidiaries, or a combination
thereof, or (c) purchases all or substantially all of the business or assets of
any corporation.
"AFFILIATE" means any Person which directly or indirectly through one
or more intermediaries Controls, or is Controlled by, or is under common Control
with, the Borrower.
"AGREEMENT" means this Credit Agreement, as amended or supplemented
from time to time. References to Articles, Sections, Exhibits, Schedules and the
like refer to the Articles, Sections, Exhibits, Schedules and the like of this
Agreement unless otherwise indicated.
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"APPLICABLE MARGIN" means:
(i) in respect of all Revolving Credit Loans:
(a) 0.0% in respect of each Prime Loan Tranche;
and
(b) the Eurodollar Margin in respect of each
Eurodollar Loan Tranche; and
(ii) in respect of all Term Loans:
(a) twenty (20) basis points in respect of each
Prime Loan Tranche; and
(b) the Eurodollar Margin plus twenty (20) basis
points in respect of each Eurodollar Loan
Tranche.
"AUTHORIZATION LETTER" means the letter agreement executed by the
Borrower in the form of Exhibit C.
"BANKING DAY" means any day on which commercial banks are not
authorized or required to close in Rochester, New York and whenever such day
relates to a Eurodollar Loan Tranche or notice with respect to any Eurodollar
Loan Tranche, a day on which dealings in Dollar deposits are also carried out in
the London interbank market.
"CAPITALIZED LEASE" means any lease the obligation for Rentals with
respect to which is required to be capitalized on a consolidated balance sheet
of the lessee and its subsidiaries in accordance with GAAP.
"CLOSING DATE" means the date this Agreement has been executed by the
Borrower, the Lenders and the Agent.
"CHASE" means The Chase Manhattan Bank, N.A.
"CHASE AGENCY OFFICE" means the office of Chase for performing its
agency functions at the address listed on the signature page of this Agreement.
"CHASE PRINCIPAL OFFICE" means the principal office of Chase at One
Chase Manhattan Plaza, New York, NY 10081.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time.
"COMMITMENT" means, with respect to each Lender, the separate
obligation of such Lender to make Revolving Credit Loans under this Agreement in
the
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following aggregate principal amount specified for such Lender, as such amount
may be reduced pursuant to Sec. 2.08:
Chase: $15,000,000
Fleet: $15,000,000
===========
Total: $30,000,000
"COMMON STOCK" means any class of equity Securities of a corporation,
the right of which to share in distributions of earnings or assets of the
corporation is without limit as to any amount or percentage.
"CONSOLIDATED ADJUSTED NET INCOME" means for any period the net
earnings after income taxes of the Borrower and its Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP, but
excluding:
(1) any gain or loss arising from the sale of capital
assets;
(2) any gain arising from any write-up of assets;
(3) earnings of any Person, substantially all the assets
of which have been acquired by the Borrower or any
Subsidiary in any manner, realized by such acquired
Person prior to the date of such acquisition;
(4) any portion of the net earnings of any Subsidiary
which for any reason (including, without limitation,
restrictions on transfers of funds to the United
States) is unavailable for payment of dividends to
the Borrower or any other Subsidiary;
(5) the earnings of any Person to which assets of the
Borrower shall have been sold, transferred or
disposed of, or into which the Borrower shall have
merged, prior to the date of such transaction;
(6) any gain arising from the acquisition of any
Securities of the Borrower or any Subsidiary; and
(7) any extraordinary items determined in accordance with
GAAP.
"CONSOLIDATED EARNINGS AVAILABLE FOR FIXED CHARGES" means, for any
period, Consolidated Adjusted Net Income for such period plus, to the extent
deducted in computing such Consolidated Adjusted Net Income, (i) all Interest
Expense, (ii) Rentals paid or payable during said period less Rentals received
or accrued for receipt by Borrower or any Subsidiary during said period under
all leases (other than Capitalized Leases) under which the Borrower or any
Subsidiary were lessees,
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and (iii) taxes based on income (other than taxes based on total sales or gross
receipts).
"CONSOLIDATED EBITDA" means, in respect of the Borrower and for any
Four Quarter Period, the EBITDA of the Borrower and its Subsidiaries on a
consolidated basis for such Four Quarter Period.
"CONSOLIDATED FIXED CHARGES" means for any period (i) Interest Expense
on all Funded Debt and Current Debt of the Borrower and its Subsidiaries paid or
payable during such period, and (ii) Rentals paid or payable during said period
less Rentals received or accrued for receipt by Borrower or any Subsidiary
during said period under all leases (other than Capitalized Leases) under which
the Borrower or any Subsidiary were lessees.
"CONSOLIDATED FUNDED DEBT" means the Funded Debt of the Borrower and
its Subsidiaries on a consolidated basis in accordance with GAAP.
"CONSOLIDATED SENIOR FUNDED DEBT" means Consolidated Funded Debt of the
Borrower and its Subsidiaries which is not expressed to rank junior or
subordinate in right of payment to any other Indebtedness of the Borrower or its
Subsidiaries.
"CONSOLIDATED SUBSIDIARY" means any Subsidiary of the Borrower which
shall be consolidated on the Borrower's financial statements in accordance with
GAAP.
"CONSOLIDATED TANGIBLE NET WORTH" means as of the date of any
determination thereof, the sum of the capital stock of all classes,
paid-in-capital and surplus accounts (net of treasury shares) plus (or minus in
the case of a deficit) the retained earnings of the Borrower and its
Subsidiaries determined on a consolidated basis in accordance with GAAP, after
elimination of Minority Interests, less all assets which are not Tangible
Assets.
"CONTROL" and "CONTROLS" means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
a Person, whether through the ownership of Voting Stock, by contract or holding
or owning the power to vote, or possessing the power to direct any right to
vote, or as an officer, director, employee or management consultant or other
arrangement where there is the power to direct or cause the direction of the
management and policies of a Person, and "CONTROLLED" means to be under the
Control of another Person.
"CURRENT DEBT" means with respect to any Person all liabilities of such
Person for borrowed money and all liabilities of such Person secured by any lien
existing on Property owned by such Person whether or not such liabilities have
been assumed, which, in either case are payable on demand or within one year
from the creation thereof, except:
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(1) any such liabilities which are renewable or extendible
at the option of the debtor to a date more than one
year from the date of creation thereof, and
(2) any such liabilities which, although payable within
one year, constitute payments required to be made on
account of indebtedness the principal of which is
expressed to mature more than one year from the date
of creation thereof (i.e., the current portion of
Funded Debt).
"DEFAULT" means any event, condition or act which with the giving of
notice or lapse of time, or both, would become an Event of Default.
"DEFAULT RATE" means, with respect to an amount of any Loan Tranche not
paid when due, whether by acceleration or otherwise, a rate per annum equal to:
(a) if such Loan Tranche is outstanding as a Prime Loan Tranche, a variable rate
2% above the rate of interest thereon; or (b) if such Loan Tranche is
outstanding as a Eurodollar Loan, a fixed rate 2% above the rate of interest in
effect thereon at the time of default until the end of the then current Interest
Period therefor and, thereafter, a variable rate 2% above the Prime Rate; plus
(c) in each case, an additional 20 basis points if such Loan Tranche is
outstanding as a Term Loan.
"DISTRIBUTION" means:
(1) dividends or other distributions on or in respect of
the capital stock, of any class, of the Borrower
(except distributions in such stock); and
(2) the redemption or acquisition of shares of such stock
or of warrants, rights or other options to purchase
such stock, to the extent that amounts expended by
the Borrower for such purpose exceed the net proceeds
to the Borrower from the sale subsequent to the
Closing Date of shares of its capital stock or
warrants, rights or other options to purchase such
stock.
"DOLLARS" and the sign "$" mean lawful money of the United States of
America.
"EBITDA" means for any Four Quarter Period and in respect of any Person
the sum of (i) the Net Income of such Person, plus (ii) the net interest expense
of such Person for such period as determined in accordance with GAAP and as such
item is reported on such Person's financial statements, (iii) the income tax
expense of such Person for such period, (iv) the amount reported as the
depreciation of the assets of such Person for such period, computed in
accordance with GAAP, and as such item is used in the computation of such
Person's Net Income for such period, and (v) the amount reported as the
amortization of intangibles for such
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Person for such period, computed in accordance with GAAP, and as such item is
used in the computation of such Person's Net Income for such period.
"ENVIRONMENTAL LAWS" mean all federal, state and local environmental,
land use, zoning, health, chemical use, safety and sanitation laws, statutes,
ordinances and codes relating to the protection of the Environment and/or
governing the use, storage, treatment, generation, transportation, processing,
handling, production or disposal of Hazardous Substances and any published
rules, regulations, policies, guidelines, interpretations, decisions, orders and
directives of federal, state and local governmental agencies and authorities
with respect thereto.
"ENVIRONMENTAL MATTERS" means any pending demands, claims, suits,
actions or legal or administrative proceedings arising out of or related to the
use, generation, treatment, storage or disposal of Hazardous Substances or
material noncompliance with Environmental Laws by Borrower or any of its
Subsidiaries.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, including any rules and regulations promulgated
thereunder.
"ERISA AFFILIATE" means any corporation or trade or business which is a
member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as the Borrower or is under common control (within
the meaning of Section 414(c) of the Code) with the Borrower.
"EURODOLLAR LOAN" means any Loan Tranche when and to the extent the
interest rate therefor is determined on the basis of the "Eurodollar Rate."
"EURODOLLAR MARGIN" means, in respect of each Eurodollar Loan, a rate
of interest per year (expressed in basis points) which corresponds to the
Performance Ratio range set forth below determined as of the last day of the
immediately preceding fiscal quarter of the Borrower for which the Borrower has
furnished financial reports pursuant to Subsection (a) or (b) of Sec. 6.08, as
applicable, or if the Borrower shall have failed to furnish such reports in a
timely manner as required by Subsection (a) or (b) of Sec. 6.08 for the fiscal
quarter which would, but for such failure, apply to such Eurodollar Loan, then
at the highest rate provided below:
EURODOLLAR MARGIN
PERFORMANCE RATIO (PR) IN BASIS POINTS PER YEAR
-------------------------------------------------------------------------------
PR < 1.75 50
1.75 PR < 2.50 75
2.50 PR 100
"EURODOLLAR RATE" means for any Eurodollar Loan, a rate per annum
determined by the Agent to be equal to the quotient of: (i) the rate per annum
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(rounded upwards if necessary to the nearest 1/16 of 1%) which appears on the
Telerate Page 3750 (as defined below) as of 11:00 a.m., London time, two Banking
Days prior to the first day of the Interest Period for such Eurodollar Loan for
deposits in U.S. Dollars for a period, and in an amount, comparable to such
Interest Period and principal amount of the Eurodollar Loan which shall be made
by a Lender and outstanding during such Interest Period; divided by (ii) one
minus the Reserve Requirement for such Loan for such Interest Period. "Telerate
Page 3750" means the display page so designated on the Dow Jones Telerate
Service (or such other page as may replace that page on that service, or such
other service as may be nominated as the information vendor, for the purpose of
displaying comparable rates or prices).
"EVENT OF DEFAULT" has the meaning given such term in Sec. 9.01.
"EXISTING INDEBTEDNESS" means Indebtedness existing on the Closing Date
which was reflected in the most recent financial statements delivered to the
Lenders prior to the Closing Date.
"FACILITY DOCUMENTS" means: this Credit Agreement, the Notes and the
Authorization Letter.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published for such day by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day which is a Banking Day,
the average of quotations for such day on such transactions received by Chase
from three Federal funds brokers of recognized standing selected by it.
"FIXED CHARGES" means for any period (i) Interest Expense on all Funded
Debt and Current Debt of the Borrower and its Subsidiaries paid or payable
during such period, and (ii) Rentals paid or payable during said period less
Rentals received or accrued for receipt by Borrower or any Subsidiary during
said period under all leases (other than Capitalized Leases) under which the
Borrower or any Subsidiary were lessees.
"FOUR QUARTER PERIOD" means a period of four full consecutive
quarter-annual fiscal periods, taken together as one accounting period.
"FLEET" means Fleet Bank.
"FUNDED DEBT" of any Person means all Indebtedness of such Person other
than Current Debt.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time, applied on a basis consistent
with
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those used in the preparation of the financial statements referred to in Sec.
5.05 (except for changes concurred in by the Borrower's independent public
accountants).
"GUARANTIES" by any Person shall mean all obligations (other than
endorsements in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing, or in effect guaranteeing,
any Indebtedness, dividend or other obligation of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, all obligations incurred through an agreement, contingent or
otherwise, by such Person: (i) to purchase such Indebtedness or obligation or
any property or assets constituting security therefor, (ii) to advance or supply
funds (x) for the purchase or payment of such Indebtedness or obligation, (y) to
maintain working capital or other balance sheet condition or otherwise to
advance or make available funds for the purchase or payment of such Indebtedness
or obligation, (iii) to lease property or to purchase Securities or other
property or services primarily for the purpose of assuring the owner of such
Indebtedness or obligation of the ability of the primary obligor to make payment
of the Indebtedness or obligation, or (iv) otherwise to assure the owner of the
Indebtedness or obligation of the primary obligor against loss in respect
thereof. For the purposes of all computations made under this Agreement, a
Guaranty in respect of any Indebtedness for borrowed money shall be deemed to be
Indebtedness equal to the principal amount of such Indebtedness for borrowed
money which has been guaranteed, and a Guaranty in respect of any other
obligation or liability or any dividend shall be deemed to be Indebtedness equal
to the maximum aggregate amount of such obligation, liability or dividend.
Provided further, however that Guaranties by the Borrower or a Subsidiary of
Indebtedness of the Borrower or a Subsidiary shall not be double counted in
computing the Current Debt or Funded Debt of the Borrower.
"HAZARDOUS SUBSTANCE" means, without limitation, any flammable
explosives, radon, radioactive materials, asbestos, urea formaldehyde foam
insulation, polychlorinated biphenyls, petroleum and petroleum products,
methane, hazardous materials, hazardous wastes, hazardous or toxic substances or
related materials as defined in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (42 U.S.C. Sections 9601, ET
SEQ.), the Hazardous Materials Transportation Act, as amended (49 U.S.C.
Sections 1801, ET SEQ.), the Resource Conservation and Recovery Act, as amended
(42 U.S.C. Sections 6901, ET SEQ.), the Toxic Substances Control Act, as amended
(15 U.S.C. Sections 2601, ET SEQ.) or any other applicable Environmental Law and
the regulations promulgated thereunder.
"INDEBTEDNESS" of any Person means:
(1) obligations of such Person for money borrowed or
incurred in connection with the acquisition of
Property;
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(2) all liabilities or obligations of such Person in
respect of any indebtedness or other obligations of
others guaranteed, directly or indirectly, in any
manner by such Person, or in effect guaranteed,
directly or indirectly, by such Person through an
agreement, contingent or otherwise, to purchase such
indebtedness or obligation, or to purchase or sell
property, or to purchase or sell services, primarily
for the purpose of enabling the debtor to make payment
of the indebtedness or obligation or to assure the
owner of such indebtedness or obligation against loss,
or to supply funds to or in any manner invest in the
debtor, or otherwise;
(3) liabilities or obligations secured by any Lien upon
Property owned by such Person, whether or not such
indebtedness has been assumed by such Person;
(4) all capitalized obligations with respect to
Capitalized Leases; and
(5) liabilities and obligations of the types described in
foregoing clauses (1) through (5) above which are
incurred in connection with the acquisition of the
assets or the capital stock of another Person.
Provided further that "Indebtedness" shall not include any trade or similar
account payable.
"INTEREST EXPENSE" means, in respect of a Person, for any period, all
interest paid or accrued and amortization of debt discount with respect to all
Indebtedness of such Person for such period (after giving effect to the net cost
associated with all interest rate swap agreements, interest rate cap agreements,
interest rate collar agreements, or other financial arrangements designed to
protect such Person against fluctuations in interest rates).
"INTEREST PERIOD" means the period of time commencing on the day a
Eurodollar Rate is made applicable to a Loan Tranche and ending on the
numerically corresponding day in the first, second or third calendar month
thereafter, as the Borrower may select pursuant to Sec. 2.04, provided that each
such Interest Period which commences on the last Banking Day of a calendar month
(or on any day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last Banking Day of the
appropriate calendar month.
"INVESTMENTS" means all investments in any Person, computed in
accordance with GAAP, made by stock purchase, capital contribution, loan,
advance, extension of credit, or creation or assumption of any other contingent
liability or guaranty in respect of any obligation of such Person, or otherwise,
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provided however, that in computing any Investment in any Person (i) all
expenditures for such Investment shall be taken into account at the actual
amounts thereof in the case of expenditures of cash and at the fair value
thereof (as determined in good faith by the Board of Directors of the Borrower)
or depreciated cost thereof (in accordance with GAAP), whichever is greater, in
the case of expenditures of Property, (ii) there shall not be included any
account or note receivable from such Person arising from transactions in the
ordinary course of business, and (iii) a guaranty or other contingent liability
of any kind in respect of any Indebtedness or other obligation of such Person
shall be deemed an Investment equal to the amount of such Indebtedness or
obligation.
"LENDING OFFICE" means, for each Lender and for each type of Loan
(Prime Loan or Eurodollar Loan), the lending office of such Lender (or of an
Affiliate of such Lender) designated as such for such type of Loan on its
signature page hereof or such other office of such Lender (or of an Affiliate of
such Lender) as such Lender may from time to time specify to the Agent and the
Borrower as the office by which its Loans of such type are to be made and
maintained.
"LIEN" means any interest in property securing an obligation owed to,
or a claim by, a Person other than the owner of the property, whether such
interest is based on the common law, statute or contract, and including but not
limited to the security interest lien arising from a mortgage, encumbrance,
pledge conditional sale or trust receipt or a lease, consignment or bailment for
security purposes. The term "Lien" shall include reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions,
leases and other title exceptions and encumbrances (including, with respect to
stock, stockholder agreements, voting trust agreements, buy-back agreements and
all similar arrangements) affecting property. For the purposes of this
Agreement, the Borrower or a Subsidiary shall be deemed to be the owner of any
property which it has acquired or holds subject to a conditional sale agreement,
Capitalized Lease or other arrangement pursuant to which title to the property
has been retained by or vested in some other Person for security purposes and
such retention or vesting shall constitute a Lien.
"LOANS" means and includes the Revolving Credit Loans and the Term
Loans, and "LOAN" means any of the Loans.
"LOAN TRANCHE" means any portion of the Loans outstanding under the
Notes as Prime Loans or any portion of the Loans outstanding under the Notes as
a Eurodollar Loan having a particular Interest Period. Each Eurodollar Loan
outstanding under the Notes having a different Interest Period shall constitute
a separate Loan Tranche and all Prime Loans shall constitute a single Loan
Tranche. Although there will be separate Notes issued to each Lender, both Notes
taken together shall constitute a single Loan Tranche in respect of each
corresponding Loan outstanding under both Notes. If the entire principal balance
of the Loans
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shall be outstanding as Prime Loans or as a single Eurodollar Loan, then "Loan
Tranche" means the entire amount of the Loans outstanding.
"MATERIAL ADVERSE EFFECT" (initial upper case letters) means a material
adverse effect on the financial condition of the Borrower and its subsidiaries
taken as a whole in a dollar amount which equals or exceeds 2% of the Borrower's
Consolidated Tangible Net Worth, without regard to whether such dollar amount is
reported on the Borrower's consolidated financial statements in accordance with
GAAP; and "MATERIAL ADVERSE EFFECT" (initial lower case letters) means a
material adverse effect on the financial condition of the Borrower and its
Subsidiaries taken as a whole or any change in the nature of the business of the
Borrower and Subsidiaries taken as a whole and considered under all of the
circumstances of the Borrower and its Subsidiaries.
"MINORITY INTERESTS" means any shares of stock of any class of a
Subsidiary (other than directors' qualifying shares as required by law) that are
not owned by the Borrower and/or one or more of its Wholly-Owned Subsidiaries.
Minority Interests shall be valued by valuing Minority Interests constituting
Preferred Stock at the voluntary or involuntary liquidating value of such
Preferred Stock, whichever is greater, and by valuing Minority Interests
constituting Common Stock at the book value of capital and surplus applicable
thereto adjusted, if necessary, to reflect any changes from the book value of
such Common Stock required by the foregoing method of valuing Minority Interests
in Preferred Stock.
"MULTIEMPLOYER PLAN" means a Plan defined as such in Section 3(37) of
ERISA to which contributions have been made by the Borrower or any ERISA
Affiliate and which is covered by Title IV of ERISA.
"NET INCOME" means, in respect of a Person, the net income of such
Person computed in accordance with GAAP and as such item is reported from time
to time on such Person's statement of income and retained earnings (or similar
statement) (after deduction for payment of all taxes).
"NOTES" means the Revolving Credit Notes and the Term Loan Notes, and
"Note" means any one of the Notes.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to its functions under ERISA.
"PERFORMANCE RATIO" means the ratio of (a) Consolidated Funded Debt to
(b) Consolidated EBITDA.
"PERSON" means an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture,
governmental authority or other entity of whatever nature.
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"PLAN" means any employee benefit or other plan established or
maintained, or to which contributions have been made, by the Borrower or any
ERISA Affiliate and which is covered by Title IV of ERISA or to which Section
412 of the Code applies.
"PLAN INVESTMENTS" means and includes all investments made pursuant to
and under any Plan.
"PREFERRED STOCK" means any series or class of capital stock of any
corporation having preference over the Common Stock of such corporation with
respect to either the payment of dividends or rights upon dissolution,
liquidation or winding up of such corporation.
"PRIME RATE" means that rate of interest from time to time publicly
announced by Chase at the Chase Principal Office as its prime commercial lending
rate.
"PRIME LOAN" means any Loan Tranche when and to the extent the interest
rate therefor is determined in relation to the Prime Rate.
"PROHIBITED TRANSACTION" means any transaction set forth in Section 406
of ERISA or Section 4975 of the Code for which no exemption has been issued.
"PROPERTY" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
"PRO-FORMA FIXED CHARGES" means, as of the date of any determination
thereof, the sum of (i) Fixed Charges for the immediately preceding 12 calendar
months, plus (ii) 12 months' interest (including amortization of debt discount
and expense and the imputed interest factor in Rentals under all Capitalized
Leases) on any Funded Debt or Current Debt then to be issued or incurred plus,
in the case of a computation for purposes of Section 7.04(a), (iii) 12 months'
Rental payable by the Borrower and its Subsidiaries under the Restricted
Operating Lease then proposed to be entered into.
"PRO RATA SHARE" means the following percentages for each of the
following Lenders:
LENDER PERCENTAGE
------ ----------
Chase 50%
Fleet 50%
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System as the same may be amended or supplemented from time to
time.
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"REGULATION U" means Regulation U of the Board of Governors of the
Federal Reserve System as the same may be amended or supplemented from time to
time.
"REGULATORY CHANGE" means, with respect to any Lender, any change after
the date of this Agreement in United States federal, state, municipal or foreign
laws or regulations (including Regulation D) or the adoption or making after
such date of any interpretations, directives or requests applying to a class of
banks including such Lender of or under any United States, federal, state,
municipal or any foreign, laws or regulations (whether or not having the force
of law) by any court or governmental or monetary authority charged with the
interpretation or administration thereof.
"RENTALS" means as of the date of determination all fixed payments
which the lessee is required to make by the terms of any lease, but shall not
include amounts required to be paid in respect of maintenance, repairs, income
taxes, insurance, assessments or other similar charges or additional rentals (in
excess of fixed minimums) based upon a percentage of gross receipts.
"REPORTABLE EVENT" has the same meaning as defined in ERISA except for
events which the PBGC by regulation has waived the requirement of Section
4043(a) of ERISA that it be notified within 30 days of the occurrence of such
event, provided that a failure to meet the minimum funding standard of Section
412 of the Code or Section 302 of ERISA shall be a Reportable Event regardless
of any waivers given under Section 412(d) of the Code.
"REQUIRED LENDERS" means both Chase and Fleet.
"RESERVE REQUIREMENT" means, for any Eurodollar Loan, the average
maximum rate at which reserves (including any marginal, supplemental or
emergency reserves) are required to be maintained during the Interest Period for
such Loan under Regulation D by member banks of the Federal Reserve System in
New York City with deposits exceeding $1,000,000,000 against "Eurocurrency
Liabilities" (as such term is used in Regulation D). Without limiting the effect
of the foregoing, the Reserve Requirement shall also reflect any other reserves
required to be maintained by such member banks by reason of any Regulatory
Change against (i) any category of liabilities which includes deposits by
reference to which the interest rate for Eurodollar Loans are to be determined,
or (ii) any category of extensions of credit or other assets which include
Eurodollar Loans.
"REVOLVING CREDIT LOAN" means a Prime Loan or a Eurodollar Loan made
pursuant to Sec. 2.01 hereof.
"REVOLVING CREDIT TERMINATION DATE" means February 8, 1999.
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"REVOLVING CREDIT NOTE" means a Note of the Borrower issued to a Lender
in substantially the Form of Exhibit A hereto.
"SECURITY" has the same meaning as in Section 2(l) of the Securities
Act of 1933, as amended.
"STORE" means a retail automotive service center operated by the
Borrower under its trade name "Monro Muffler/Brake" or any similar trade name.
"SUBORDINATED DEBT" means Funded Debt which is unsecured or which is
secured only in the manner contemplated by Section 7.02 and which shall
expressly be subordinated in right of payment to all Debt of the Borrower to the
Lenders in a manner that permits payment on the Subordinated Debt so long as any
Debt of the Borrower to the Lenders is outstanding and permits such payments
only if no Default or Event of Default shall have occurred.
"SUBSIDIARY" means a corporation of which the Borrower owns, directly
or indirectly, more than 50% of the Voting Stock.
"TANGIBLE ASSETS" of any Person means, as of the date of any
determination thereof, the total amount of all assets of such Person (less
depreciation, depletion and other properly deductible valuation reserves) after
deducting the following: good will, patents, trade names, trade marks,
copyrights, franchises, experimental expense, organization expense, unamortized
debt discount and expense, deferred assets (other than prepaid insurance and
deferred taxes), any write up in the book value of any asset resulting from a
revaluation thereof subsequent to December 31, 1988, and such other assets as
are property classified as "intangible assets" in accordance with GAAP.
"TERM LOAN" means a Prime Loan or a Eurodollar Loan made by a Lender
pursuant to Sec. 2.02 hereof.
"TERM LOAN NOTE" means a Note of the Borrower issued to a Lender in
substantially the form of Exhibit B hereto.
"UNFUNDED VESTED LIABILITIES" means, with respect to any Plan, the
amount (if any) by which the present value of all vested benefits under the Plan
exceeds the fair market value of all Plan assets allocable to such benefits, as
determined on the most recent valuation date of the Plan and in accordance with
the provisions of ERISA for calculating the potential liability of the Borrower
or any ERISA Affiliate to PBGC or the Plan under Title IV of ERISA.
"VOTING STOCK" means Securities of any class or classes, the holders of
which are ordinarily, in the absence of contingencies, entitled to elect a
majority of the corporate directors (or Persons performing similar functions).
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"WHOLLY-OWNED SUBSIDIARY" means any Subsidiary, all of the equity
Securities (except directors' qualifying shares) of which are owned by the
Borrower and/or the Borrower's other Wholly-Owned Subsidiaries.
Section 1.02. ACCOUNTING PRINCIPLES. Where the character or amount of
any asset or liability or item of income or expense is required to be determined
or any consolidation or other accounting computation is required to be made for
the purposes of this Agreement, the same shall be done in accordance with GAAP,
to the extent applicable, except where such principles are inconsistent with the
requirements of this Agreement.
Section 1.03. DIRECTLY OR INDIRECTLY. Where any provision in this
Agreement refers to action to be taken by any Person, or which such Person is
prohibited from taking, such provision shall be applicable whether the action in
question is taken directly or indirectly by such Person.
Section 1.04. SUBSIDIARIES. Each reference herein to "Subsidiary",
"Subsidiaries", "Consolidated Subsidiary" or "Consolidated Subsidiaries" shall
be effective only if any shall exist. For so long as Borrower has no Subsidiary,
all definitions, warranties and covenants referring to Borrower and its
Subsidiaries or Consolidated Subsidiaries and all references to financial
statements on a consolidated basis or to consolidated and consolidating
financial statements shall be deemed to refer to Borrower alone and to
Borrower's financial statements alone, respectively, but shall remain applicable
in all other respects.
ARTICLE 2. THE CREDIT.
Section 2.01. THE REVOLVING CREDIT LOANS.
(a) Subject to the terms and conditions of this Agreement,
each of the Lenders severally agrees to make Revolving Credit Loans to the
Borrower, and the Borrower may borrow, repay and reborrow from time to time,
from and including the date hereof to but excluding the Revolving Credit
Termination Date, up to an aggregate principal amount outstanding at any time
not exceeding the amount of each Lender's Commitment.
(b) The Revolving Credit Loans of each Lender shall be made in
accordance with each Lender's Pro Rata Share and shall be evidenced by a single
promissory note in favor of such Lender in the form of Exhibit A, dated the date
of this Agreement, duly completed and executed by the Borrower.
(c) The Revolving Credit Loans may be outstanding as Prime
Loans or Eurodollar Loans; provided that not more than five Loan Tranches shall
be outstanding to each Lender.
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(d) The Borrower shall give the Agent notice of each borrowing
of a Revolving Credit Loan to be made hereunder as provided in Sec. 2.09 and in
substantially the form of Exhibit E hereto. Not later than 3:00 p.m. Rochester,
New York time on the date of such borrowing, each Lender shall, through its
Lending Office and subject to the conditions of this Agreement, make the amount
of the Revolving Credit Loan to be made by it according to its Pro Rata Share
available to the Agent on such day at the Chase Agency Office and in immediately
available funds for the account of the Borrower. The amount so received by the
Agent shall, subject to the conditions of this Agreement, be made available to
the Borrower, in immediately available funds, by the Agent crediting an account
of the Borrower designated by the Borrower.
(e) Each Revolving Credit Loan shall mature on the earlier of
(a) the last day of the Interest Period for each corresponding Loan Tranche
which is a Eurodollar Loan, or (b) the Revolving Credit Termination Date. On
each such maturity prior to the Revolving Credit Termination Date, the Borrower
will pay to the Agent for the account of each Lender the principal of such
Eurodollar Loan or, subject to the provisions of Sec. 2.05, reborrow the unpaid
portion of such Loan as a further Revolving Credit Loan. On the Revolving Credit
Termination Date, all Revolving Credit Loans, principal and interest, shall be
paid in full unless refinanced as Term Loans pursuant to Section 2.02 hereof.
Section 2.02. THE TERM LOANS.
(a) Each Lender agrees, subject to the terms and conditions of
this Agreement, to make a Term Loan to the Borrower on the Revolving Credit
Termination Date according to its Pro Rata Share and in such aggregate principal
amount as the Borrower shall request up to but not exceeding the amount of the
Lenders' Commitments as then in effect. The proceeds of the Term Loan shall be
applied, together with such other funds (if any) to be supplied by the Borrower
as may be required for the purpose, to pay in full the principal of and accrued
interest on the Revolving Credit Loans outstanding on the Revolving Credit
Termination Date and if such proceeds shall exceed such principal and accrued
interest, such excess shall be made available to the Borrower by depositing the
same, in immediately available funds, in an account of the Borrower maintained
with a Lender or otherwise upon instructions of the Borrower.
(b) The Term Loan of each Lender shall be made in accordance
with each Lender's Pro Rata Share and shall be evidenced by a promissory note in
favor of such Lender in the form of Exhibit B, dated the date of the Revolving
Credit Termination Date, duly completed and executed by the Borrower.
(c) The Term Loan, or portions thereof, may be outstanding to
each Lender as a Prime Loan or as a Eurodollar Loan; provided that not more than
two Loan Tranches shall be outstanding to each Lender.
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(d) The principal of the Term Loan shall be repaid in sixty
consecutive, substantially equal monthly installments commencing on the first
day of the second calendar month after the Revolving Credit Termination Date and
continuing until the sixtieth and final installment, at which time the entire
remaining outstanding principal shall be paid in full. The Borrower shall
maintain such Loan Tranches as are necessary to enable such principal
installment payments to be made from Prime Loans or from Eurodollar Loans on the
last day of the corresponding Interest Periods.
Section 2.03. INTEREST. (a) Interest shall accrue on the outstanding
and unpaid principal amount of each Loan for the period from and including the
date of such Loan to but excluding the date such Loan is due, at the following
rates per year: (i) for a Loan Tranche which is outstanding as a Prime Loan, at
a variable rate per annum equal to the Prime Rate plus the Applicable Margin,
(ii) for a Loan Tranche which is outstanding as a Eurodollar Loan, at a fixed
rate equal to the corresponding Eurodollar Rate plus the Applicable Margin; and
(iii) after the occurrence of any Default and a written demand of the Agent to
the Borrower at the request of the Required Lenders, at the Default Rate.
(b) Interest on each Prime Loan or Eurodollar Loan shall be
calculated on the basis of a year of 360 days for the actual number of days
elapsed. Promptly after the determination of any interest rate provided for
herein or any change therein, the Agent shall notify the Borrower and the
Lenders thereof.
(c) Accrued interest on each Prime Loan shall be due and
payable to the Agent for account of each Lender in arrears on the first Banking
Day of each calendar month, regardless of any payment of the principal thereof.
(d) Accrued interest on each Eurodollar Loan shall be due and
payable to the Agent for account of each Lender in arrears upon any payment of
principal and on the last day of the Interest Period.
Section 2.04. INTEREST PERIODS. In the case of each Loan other than a
Prime Loan, the Borrower shall select an Interest Period of any duration in
accordance with the definition of Interest Period in Sec. 1.01, subject to the
following limitations: (a) no Interest Period for a Eurodollar Loan shall have a
duration of less than one month , and if any such proposed Interest Period would
otherwise be for a shorter period (whether by operation of the Revolving Credit
Termination Date or a principal installment of the Term Loan), such Interest
Period shall not be available; (b) if an Interest Period would end on a day
which is not a Banking Day, such Interest Period shall be extended to the next
Banking Day, unless, in the case of a Eurodollar Loan, such next Banking Day
would fall in the next calendar month in which event such Interest Period shall
end on the immediately preceding Banking Day.
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Section 2.05. CONVERSIONS. The Borrower shall have the right to make
payments of principal, or to convert a Loan Tranche from a Prime Loan to a
Eurodollar Loan or from a Eurodollar Loan to a Prime Loan at any time or from
time to time, provided that: (a) if the Loan Tranche is outstanding as a
Eurodollar Loan, it may be converted only on the last day of the applicable
Interest Period; (b) if the Loan Tranche is outstanding as a Eurodollar Loan, it
shall automatically convert to a Prime Loan on the last day of the applicable
Interest Period, unless the Borrower gives notice to the Lender two (2) Banking
Days prior to the last day of the corresponding Interest Period specifying a new
Interest Period to apply to such Loan Tranche; (c) no Loan Tranche comprising a
Eurodollar Loan may be in a principal amount less than $500,000; and (d) there
may be no more than five (5) Loan Tranches outstanding hereunder at any one time
to either Lender.
Section 2.06. PREPAYMENTS. The Borrower shall have the right to prepay
Loans (including Term Loans) at any time or from time to time without premium or
penalty; provided that: (a) the Borrower shall give the Agent notice of each
such prepayment as provided in Sec. 2.09; and (b) Eurodollar Loans may not be
prepaid on any date other than the last day of the corresponding Interest
Period. In addition, but subject to the foregoing, if after giving effect to any
reduction or termination of the Commitments pursuant to Sec. 2.08, the
outstanding aggregate principal amount of the Loans exceeds the aggregate amount
of the Commitments, the Borrower shall pay or repay the Loans on the date of
such reduction or termination in an aggregate principal amount equal to the
excess, together with interest thereon accrued to the date of such payment or
repayment and any amounts payable pursuant to Sec. 3.05 in connection therewith.
Partial prepayments of the Term Loans shall be applied to the principal
installment or installments of the Term Loans in the inverse order of their
maturity.
Section 2.07. PURPOSE. The Borrower shall use the proceeds of the Loans
for its working capital requirements and other general corporate purposes,
including acquisition and construction of new Stores, and including Acquisitions
permitted under Section 7.10 hereof.
Section 2.08. CHANGES OF COMMITMENTS. (a) The Borrower shall have the
right to reduce or terminate the amount of unused Commitments at any time or
from time to time, provided that: (i) the Borrower shall give notice of each
such reduction or termination to the Agent as provided in Sec. 2.09; and (ii)
each partial reduction shall be in an aggregate amount at least equal to
$1,000,000 and in multiples of $500,000.
(b) The Commitments once reduced or terminated may not be
reinstated.
Section 2.09. CERTAIN NOTICES. Notices by the Borrower to the Agent of
each borrowing pursuant to Sec. 2.01(d) and Sec. 2.02, each prepayment of a Loan
pursuant to Sec. 2.06, and each reduction or termination of the Commitments
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pursuant to Sec. 2.08(a) shall be irrevocable and shall be effective only if
received by the Agent on a Banking Day and (a) in the case of borrowings and
prepayments of (i) Prime Loans, given not later than 11:00 a.m. Rochester, New
York time on the date of the borrowing; and (ii) Eurodollar Loans, given not
later than 12:00 noon Rochester, New York time two Banking Days prior to the
date of the proposed borrowing; and (b) in the case of reductions or termination
of the Commitments, given not later than 12:00 noon Rochester, New York time
four Banking Days prior thereto. Each such notice shall specify the Loans to be
borrowed or prepaid and the amount (subject to Sec. 2.10) and type of the Loans
to be borrowed or prepaid and the date of borrowing or prepayment (which shall
be a Banking Day). Each such notice of reduction or termination shall specify
the amount of the Commitments to be reduced or terminated. The Agent shall
promptly notify the Lenders of the contents of each such notice. In the event
that the Borrower fails to select the duration of any Interest Period for any
Eurodollar Loans, such Loans (if outstanding as Eurodollar Loans) will be
automatically converted into Prime Loans on the last day of the then current
Interest Period for such Loans or (if outstanding as Prime Loans) will remain
as, or (if not then outstanding) will be made as, Prime Loans.
Section 2.10. MINIMUM AMOUNTS. Except for borrowings of Revolving
Credit Loans which exhaust the full remaining amount of the Commitments, and
prepayments (in the case of Prime Loans) which result in the prepayment of all
Revolving Credit Loans, each borrowing and prepayment of principal of Prime
Loans shall be in an aggregate amount of at least $100,000, and each borrowing
of Eurodollar Loans of each type having concurrent Interest Periods shall be in
an aggregate amount of at least $500,000.
Section 2.11. COMMITMENT FEE. The Borrower agrees to pay to the Agent
on the last day of each March, June, September and December after the date
hereof through the Revolving Credit Termination Date and on the Revolving Credit
Termination Date for the account of each of the Lenders a commitment fee which
shall accrue on the daily average unused Commitment of each Lender for the
period from and including the date hereof to the earlier of the date the
Commitments are terminated or the Revolving Credit Termination Date. The
Commitment Fee shall be calculated on the basis of a 360 day year for the actual
number of days elapsed at a rate per year equal to 12.5 basis points.
Section 2.12. EXTENSION OF REVOLVING CREDIT TERMINATION DATE. The
Borrower may, by written request to the Agent and the Lenders not less than 90
days prior to the Revolving Credit Termination Date request that the revolving
credit facility under this Agreement be renewed, extended or replaced. Not less
than 60 days prior to the extension date, the Lenders will advise the Borrower
in writing whether the Lenders agree to any such renewal, extension, or
replacement, provided that if the Lenders shall fail to so advise the Borrower,
the Lenders will be deemed to have denied such request.
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Section 2.13. PAYMENTS GENERALLY. All payments under this Agreement or
the Notes shall be made in Dollars in immediately available funds not later than
2:00 p.m. Rochester, New York time on the relevant dates specified above (each
such payment made after such time on such due date to be deemed to have been
made on the next succeeding Banking Day) at the Chase Agency Office for the
account of the applicable Lending Office of each Lender; provided that, when a
new Loan is to be made by each Lender on a date the Borrower is to repay any
principal of an outstanding Loan, such Lender shall apply the proceeds thereof
to the payment of the principal to be repaid and only an amount equal to the
difference between the principal to be borrowed and the principal to be repaid
shall be made available by such Lender to the Borrower as provided in Sec.Sec.
2.01 and 2.02 or paid by the Borrower to such Lender pursuant to this Sec. 2.13,
as the case may be. The Agent, or any Lender for whose account any such payment
is to be made, may (but shall not be obligated to) debit the amount of any such
payment which is not made by such time to any ordinary deposit account of the
Borrower with the Agent or such Lender, as the case may be, and any Lender so
doing shall promptly notify the Agent. The Borrower shall, at the time of making
each payment under this Agreement or the Notes, specify to the Agent the
principal or other amount payable by the Borrower under this Agreement or the
Notes to which such payment is to be applied and in the event that it fails to
so specify, or if a Default or Event of Default has occurred and is continuing,
the Agent may apply such payment as it may elect in its sole discretion (subject
to Sec. 10.16). If the due date of any payment under this Agreement or the Notes
would otherwise fall on a day which is not a Banking Day, such date shall be
extended to the next succeeding Banking Day and interest shall be payable for
any principal so extended for the period of such extension. Each payment
received by the Agent hereunder or under any Note for the account of a Lender
prior to 2:00 p.m. Rochester, New York time on any Banking Day shall be paid to
such Lender, in immediately available funds, for the account of such Lender's
Lending Office on the same Banking Day. Each payment received by the Agent
hereunder or under any Note for the account of a Lender at or after 2:00 p.m.
Rochester, New York time on any Banking Day shall be paid to such Lender, in
immediately available funds, for the account of such Lender's Lending Office not
later than 12:00 p.m. noon Rochester, New York time of the next following
Banking Day, together with interest on the amount of such payment at the Federal
Funds Effective Rate.
ARTICLE 3. YIELD PROTECTION; ILLEGALITY; ETC.
Section 3.01. ADDITIONAL COSTS. (a) The Borrower shall pay directly to
each Lender from time to time within five business days of demand therefor such
amounts as such Lender may reasonably determine to be necessary to compensate it
for any costs which such Lender determines are attributable to its making or
maintaining any Eurodollar Loans under (or Prime Loans where noted in (ii)
below) this Agreement or its Note or its obligation to make any such Loans
hereunder, or any reduction in any amount receivable by such Lender hereunder in
respect of
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any such Loans or such obligation (such increases in costs and reductions in
amounts receivable being herein called "Additional Costs"), resulting from any
Regulatory Change which: (i) changes the basis of taxation of any amounts
payable to such Lender under this Agreement or its Note in respect of any of
such Loans (other than taxes imposed on the overall net income of such Lender or
of its Lending Office for any of such Loans by the jurisdiction in which such
Lender has its principal office or such Lending Office); or (ii) imposes or
modifies any reserve, special deposit, deposit insurance or assessment, minimum
capital, capital ratio or similar requirements relating to any extensions of
credit or other assets of, or any deposits with or other liabilities of, such
Lender (including any of such Loans or any deposits referred to in the
definition of "Eurodollar Rate" in Sec. 1.01 and including any Prime Loans); or
(iii) imposes any other condition affecting this Agreement or its Note (or any
of such extensions of credit or liabilities). Each Lender will notify the
Borrower of any event occurring after the date of this Agreement which will
entitle such Lender to compensation pursuant to this Sec. 3.01(a) as promptly as
practicable after it obtains knowledge thereof and determines to request such
compensation. If any Lender requests compensation from the Borrower under this
Sec. 3.01(a), or under Sec. 3.01(c), the Borrower may, by notice to such Lender
(with a copy to the Agent), suspend the obligation of such Lender to make Loans
of the type with respect to which such compensation is requested (in which case
the provisions of Sec. 3.04 shall be applicable).
(b) Without limiting the effect of the foregoing provisions of
this Sec. 3.01, in the event that, by reason of any Regulatory Change, any
Lender either (i) incurs Additional Costs based on or measured by the excess
above a specified level of the amount of a category of deposits or other
liabilities of such Lender which includes deposits by reference to which the
interest rate on Eurodollar Loans is determined as provided in this Agreement or
a category of extensions of credit or other assets of such Lender which includes
Eurodollar or (ii) becomes subject to restrictions on the amount of such a
category of liabilities or assets which it may hold, then, if such Lender so
elects by notice to the Borrower (with a copy to the Agent), the obligation of
such Lender to make Loans of such type hereunder shall be suspended until the
date such Regulatory Change ceases to be in effect (in which case the provisions
of Sec. 3.04 shall be applicable).
(c) Without limiting the effect of the foregoing provisions of
this Sec. 3.01 (but without duplication), the Borrower shall pay directly to
each Lender from time to time within five business days of request therefor such
amounts as such Lender may determine to be necessary to compensate such Lender
for any costs which it determines are attributable to the maintenance by the
Lender or its bank holding company or any of its Affiliates, pursuant to any law
or regulation of any jurisdiction or any interpretation, directive or request
(whether or not having the force of law) of any court or governmental or
monetary authority, whether in effect on the date of this Agreement or
thereafter, of capital in respect of its Loans hereunder or its obligation to
make Loans hereunder (such compensation to include, without limitation, an
amount equal to any reduction in return on assets or
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equity of such Lender or its bank holding company or any of its Affiliates to a
level below that which it could have achieved but for such law, regulation,
interpretation, directive or request). Each Lender will notify the Borrower if
it is entitled to compensation pursuant to this Sec. 3.01(c) as promptly as
practicable after it determines to request such compensation.
(d) Determinations and allocations by a Lender for purposes of
this Sec. 3.01 of the effect of any Regulatory Change pursuant to subsections
(a) or (b), or of the effect of capital maintained pursuant to subsection (c),
on its costs of making or maintaining Loans or its obligation to make Loans, or
on amounts receivable by, or the rate of return to, it in respect of Loans or
such obligation, and of the additional amounts required to compensate such
Lender under this Sec. 3.01, shall be conclusive, provided that such
determinations and allocations are made on a reasonable basis. Each Lender
demanding payment from the Borrower pursuant to this Sec. 3.01 shall furnish to
the Borrower at the time of such demand a statement showing the basis for and
the method of calculation of such demand.
Section 3.02. LIMITATION ON TYPES OF LOANS. Anything herein to the
contrary notwithstanding, if:
(a) the Agent determines (which determination shall be
conclusive) that quotations of interest rates for the relevant deposits referred
to in the definition of "Eurodollar Rate" in Sec. 1.01 are not being provided in
the relevant amounts or for the relevant maturities for purposes of determining
the rate of interest for any type of Eurodollar Loans as provided in this
Agreement; or
(b) any one or more of the Lenders determine (which
determination shall be conclusive) and notify the Agent that the relevant rates
of interest referred to in the definition of "Eurodollar Rate" in Sec. 1.01 upon
the basis of which the rate of interest for any type of Eurodollar Loans is to
be determined do not adequately cover the cost to such Lenders of making or
maintaining such Loans;
then the Agent shall give the Borrower and each Lender prompt notice thereof,
and so long as such condition remains in effect, the Lenders shall be under no
obligation to make Loans of such type.
Section 3.03. ILLEGALITY. Notwithstanding any other provision in this
Agreement, in the event that it becomes unlawful for any Lender or its Lending
Office to honor its obligation to make or maintain Eurodollar Loans hereunder,
then such Lender shall promptly notify the Borrower thereof (with a copy to the
Agent) and such Lender's obligation to make or maintain Eurodollar Loans
hereunder shall be suspended until such time as such Lender may again make and
maintain such affected Loans (in which case the provisions of Sec. 3.04 shall be
applicable).
Section 3.04. CERTAIN PRIME LOANS PURSUANT TO Sec.Sec. 3.01 AND 3.03.
If the obligations of any Lender to make Loans of a particular type (Loans of
such type
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being herein called "Affected Loans" and such type being herein called the
"Affected Type") shall be suspended pursuant to Sec.Sec. 3.01 or 3.03, all Loans
which would otherwise be made by such Lender as Loans of the Affected Type shall
be made instead as Prime Loans (and, if an event referred to in Sec. 3.01(b) or
3.03 has occurred and such Lender so requests by notice to the Borrower with a
copy to the Agent), all Affected Loans of such Lender then outstanding shall be
automatically converted into Prime Loans on the date specified by such Lender in
such notice), and, to the extent that Affected Loans are so made as (or
converted into) Prime Loans, all payments of principal which would otherwise be
applied to such Lender's Affected Loans shall be applied instead to its Prime
Loans.
Section 3.05. CERTAIN COMPENSATION. The Borrower shall pay to the Agent
for the account of each Lender, upon the request of such Lender through the
Agent, such amount or amounts as shall be sufficient (in the reasonable opinion
of such Lender) to compensate it for any loss, cost or expense which such Lender
determines is attributable to:
(a) any payment of a Eurodollar Loan made by such Lender on a
date other than the last day of an Interest Period or the maturity date,
respectively, for such Loan (whether by reason of acceleration or otherwise); or
(b) any failure by the Borrower to borrow any Loan to be made
by such Lender on the date specified therefor in the relevant notice under Sec.
2.09. Without limiting the foregoing, such compensation shall include an amount
equal to the excess, if any, of (i) the amount of interest which otherwise would
have accrued on the principal amount so paid or not borrowed for the period from
and including the date of such payment or failure to borrow to but excluding the
last day of the Interest Period for such Loan (or, in the case of a failure to
borrow, to but excluding the last day of the Interest Period for such Loan which
would have commenced on the date specified therefor in the relevant notice) at
the applicable rate of interest for such Loan provided for herein over (ii) the
amount of interest (as reasonably determined by such Lender) such Lender would
have bid in the London interbank market for Dollar deposits for amounts
comparable to such principal amount and maturities comparable to such period. A
determination of any Lender as to the amounts payable pursuant to this Sec. 3.05
shall be conclusive absent manifest error.
ARTICLE 4. CONDITIONS PRECEDENT.
Section 4.01. DOCUMENTARY CONDITIONS PRECEDENT. The obligations of the
Lenders to make the Loans constituting the initial borrowing are subject to the
condition precedent that the Agent shall have received on or before the date of
such Loans each of the following, in form and substance satisfactory to the
Agent and its counsel:
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(a) The Facility Documents duly executed by each of the
parties thereto;
(b) A certificate of the Secretary or Assistant Secretary of
the Borrower, dated the Closing Date, attesting to all corporate action taken by
the Borrower, including resolutions of its Board of Directors authorizing the
execution, delivery and performance of the Facility Documents and each other
document to be delivered pursuant to this Agreement;
(c) A certificate of the Secretary or Assistant Secretary of
the Borrower, dated the Closing Date, certifying the names and true signatures
of the officers of the Borrower authorized to sign the Facility Documents and
the other documents to be delivered by the Borrower under this Agreement;
(d) A favorable opinion of counsel for the Borrower, dated the
Closing Date, in substantially the form of Exhibit D and as to such other
matters as the Agent or any Lender may reasonably request.
Section 4.02. ADDITIONAL CONDITIONS PRECEDENT. The obligations of the Lenders to
make any Loans (including the initial Loan) shall be subject to the further
conditions precedent that on the date of such Loan:
(a) the following statements shall be true:
(i) the representations and warranties contained in
Article 5 of this Agreement are true and correct on and as of
the date of such Loan as though made on and as of such date,
provided that the representations and warranties in Sec. 5.04
and the final sentence of Sec. 5.05 of the Agreement need not
be true and correct if after such Loan there is no net
increase in the aggregate principal amount outstanding
hereunder; and
(ii) No Default or Event of Default has occurred and
is continuing, or would result from such Loan; and
(iii) The Facility Documents shall be in full force
and effect; and
(b) the Agent shall have received such approvals, opinions or
documents as the Agent or any Lender may reasonably request.
Section 4.03. DEEMED REPRESENTATIONS. Each notice of a Loan and
acceptance by the Borrower of the proceeds of such Loan shall constitute a
representation and warranty that the conditions set forth in Sec. 4.02(a) are
true and correct as of the date of each such Loan (including each Loan which
shall be used to repay a prior Loan hereunder).
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ARTICLE 5. REPRESENTATIONS AND WARRANTIES.
The Borrower hereby represents and warrants, as of the date of this
Agreement and, except as expressly otherwise provided, as of the date of each
Loan hereunder, that:
Section 5.01. INCORPORATION, GOOD STANDING AND DUE QUALIFICATION. The
Borrower and each of its Subsidiaries, if any, is a corporation which is duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to own
its assets and to transact the business in which it is now engaged or proposed
to be engaged, is duly qualified as a foreign corporation and in good standing
under the laws of each jurisdiction set forth on Schedule 1, and there are no
other jurisdictions in which the failure by the Borrower or any Subsidiary to so
qualify would have a material adverse effect.
Section 5.02. CORPORATE POWER AND AUTHORITY; NO CONFLICTS. The
execution, delivery and performance by the Borrower of the Facility Documents
have been duly authorized by all necessary corporate action and do not and will
not: (a) require any consent or approval of its stockholders; (b) contravene its
charter or by-laws; (c) violate any provision of, or require any filing,
registration, consent or approval under, any law, rule, regulation (including,
without limitation, Regulation U), order, writ, judgment, injunction, decree,
determination or award presently in effect having applicability to the Borrower
or any of its Subsidiaries or Affiliates; (d) except as set forth in Schedule 2,
result in a breach of or constitute a default or require any consent under any
indenture or loan or credit agreement or any other agreement, lease or
instrument to which the Borrower is a party or by which it or its properties may
be bound or affected; (e) result in, or require, the creation or imposition of
any Lien, upon or with respect to any of the properties now owned or hereafter
acquired by the Borrower; or (f) cause the Borrower or any Subsidiary or
Affiliate, as the case may be to be in default under any such law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award or
any such indenture, agreement, lease or instrument.
Section 5.03. LEGALLY ENFORCEABLE AGREEMENTS. Each Facility Document
is, or when delivered under this Agreement will be, a legal, valid and binding
obligation of the Borrower enforceable against the Borrower in accordance with
its terms, except to the extent that such enforcement may be limited by
applicable bankruptcy, insolvency and other similar laws affecting creditors'
rights generally.
Section 5.04. LITIGATION. Except as disclosed in the opinion of counsel
delivered pursuant to Sec. 4.01(f), there are no actions, suits or proceedings
pending or, to the knowledge of the Borrower, threatened, against or affecting
the Borrower or any of its Subsidiaries before any court, governmental agency or
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arbitrator, which may, in any one case or in the aggregate, have a material
adverse effect or materially impair the ability of the Borrower to perform its
obligation under the Facility Documents.
Section 5.05. FINANCIAL STATEMENTS. The consolidated balance sheet of
the Borrower and its Consolidated Subsidiaries as at March 31, 1995, and the
related statement of consolidated income and statement of cash flows and
statement of consolidated stockholders' equity of the Borrower and its
Consolidated Subsidiaries for the fiscal year then ended, and the accompanying
footnotes, together with the opinion thereon by Price Waterhouse LLP,
independent certified public accountants, and the unaudited, interim
consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as
at September 30, 1995, and the related statement of consolidated income and
statement of cash flows and statement of stockholders' equity for the three
month period then ended, copies of which have been furnished to each of the
Lenders, are complete and correct and fairly present the financial condition of
the Borrower and its Consolidated Subsidiaries as at such dates and the results
of the operations of the Borrower and its Consolidated Subsidiaries for the
periods covered by such statements, all in accordance with GAAP consistently
applied (subject to year end adjustments in the case of the interim financial
statements). There are no liabilities of the Borrower or any of its Consolidated
Subsidiaries, fixed or contingent, which are material as to the Borrower and its
Consolidated Subsidiaries taken as a whole but which are not reflected in the
financial statements or in the notes thereto, other than liabilities arising in
the ordinary course of business since September 30, 1995. No information,
exhibit or report furnished by the Borrower to the Lenders in connection with
the negotiation of this Agreement contained any material misstatement of fact or
omitted to state a material fact or any fact necessary to make the statement
contained therein not materially misleading. Since September 30, 1995, there has
been no material adverse change in the condition (financial or otherwise),
business, operations or prospects of the Borrower or any of its Subsidiaries.
Section 5.06. OWNERSHIP AND LIENS. Each of the Borrower and its
Consolidated Subsidiaries has title to, or valid leasehold interests in, all of
its properties and assets, real and personal, including the properties and
assets, and leasehold interests reflected in the financial statements referred
to in Sec. 5.05 (other than any properties or assets disposed of in the ordinary
course of business), and none of the properties and assets owned by the Borrower
or any of its Subsidiaries (excluding any of its leasehold interests) is subject
to any Lien, except as disclosed in such financial statements or as may be
permitted hereunder.
Section 5.07. TAXES. Each of the Borrower and its Subsidiaries has
filed all tax returns (federal, state and local) required to be filed and has
paid all taxes, assessments and governmental charges and levies thereon to be
due, including interest and penalties, except those that are contested in good
faith and by proper proceedings and those which the failure to pay would not
have a material adverse
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effect. The federal income tax liability of the Borrower and its Subsidiaries
has been audited by the Internal Revenue Service and has been finally determined
and satisfied for all taxable years up to and including the taxable year ended
March 31, 1994.
Section 5.08. ERISA. Each of the Borrower and its Subsidiaries is in
compliance with all applicable provisions of ERISA where failure to so comply
would have a material adverse effect. To Borrower's knowledge, neither a
Reportable Event nor a Prohibited Transaction has occurred with respect to any
Plan; no notice of intent to terminate a Plan has been filed nor has any Plan
been terminated; to Borrower's knowledge no circumstance exists which
constitutes grounds under Section 4042 of ERISA entitling the PBGC to institute
proceedings to terminate, or appoint a trustee to administer, a Plan, nor has
the PBGC instituted any such proceedings; each of the Borrower and each of its
ERISA Affiliates has met its minimum funding requirements under ERISA with
respect to all of its Plans and there are no Unfunded Vested Liabilities that
Borrower has not properly addressed in accordance with ERISA; and neither the
Borrower nor any ERISA Affiliate has incurred any liability to the PBGC under
ERISA other than current premium payments. Except as reported by the Borrower
pursuant to Sec. 6.08(g) hereof, neither the Borrower nor any of its
Subsidiaries is a member of any Multiemployer Plan. As of the date of this
Agreement, no specific exemption has been issued to the Borrower for any
Prohibited Transaction and the Borrower has no Unfunded Vested Liabilities.
Section 5.09. SUBSIDIARIES AND OWNERSHIP OF STOCK. As of the date of
this Agreement, the Borrower has no Subsidiaries except as set forth on Schedule
1 hereto. As of the date of each borrowing hereunder, Schedule 1 shall
constitute (in conjunction with the operation of Sec. 7.11 hereunder) a complete
and accurate list of the Subsidiaries of the Borrower, showing the jurisdiction
of incorporation or organization of each Subsidiary and showing the percentage
of the Borrower's ownership of the outstanding stock or other interest of each
such Subsidiary. All of the outstanding capital stock or other interest of each
such Subsidiary owned by the Borrower, if any, has been validly issued, is fully
paid and nonassessable and is owned by the Borrower free and clear of all Liens.
Section 5.10. OPERATION OF BUSINESS. To the Borrower's knowledge, each
of the Borrower and its Subsidiaries possesses all licenses, permits,
franchises, patents, copyrights, trademarks and trade names, or rights thereto
(collectively, "Permits"), to conduct its business substantially as now
conducted and as presently proposed to be conducted except where the absence of
any Permit would not have a material adverse effect, and neither the Borrower
nor any of its Subsidiaries is in violation of any valid rights of others with
respect to any of the foregoing.
Section 5.11. NO DEFAULT ON OUTSTANDING JUDGMENTS OR ORDERS. Each of
the Borrower and its Subsidiaries has satisfied all judgments and neither the
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Borrower nor any of its Subsidiaries is in default with respect to any judgment,
writ, injunction, decree, rule or regulation of any court, arbitrator or
federal, state, municipal or other governmental authority, commission, board,
bureau, agency or instrumentality, domestic or foreign, except where such
non-satisfaction or default is not likely to have a material adverse effect.
Section 5.12. NO DEFAULTS ON OTHER AGREEMENTS. Neither the Borrower nor
any of its Subsidiaries is a party to any indenture, loan or credit agreement or
any lease or other agreement or instrument or subject to any charter or
corporate restriction which could have a material adverse effect. Neither the
Borrower nor any of its Subsidiaries is in default in any respect in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any agreement or instrument material to its business to
which it is a party, except where such default is not likely to have a material
adverse effect.
Section 5.13. LABOR DISPUTES AND ACTS OF GOD. Neither the business nor
the properties of the Borrower or of any of its Subsidiaries has been affected
by any fire, explosion, accident, strike, lockout or other labor dispute,
drought, storm, hail, earthquake, embargo, act of God or of the public enemy or
other casualty (whether or not covered by insurance), to the extent the
occurrence of any such events has had a material adverse effect.
Section 5.14. INVESTMENT COMPANY ACT. Neither the Borrower nor any
of its Subsidiaries is an "investment company" within the meaning of the
United States Investment Company Act of 1940.
Section 5.15. ENVIRONMENTAL MATTERS. Borrower has not generated, stored
or disposed of any Hazardous Substance, excluding the storage of Hazardous
Substances in amounts commonly and lawfully used in automotive repair shops
which have been handled in compliance with all Environmental Laws, and except as
disclosed on Schedule 3 hereto:
(a) Borrower is in substantial compliance with all Environmental Laws
applicable to Borrower and has not received any written notice from any
governmental agency alleging that Borrower is not so in compliance, except where
non-compliance would not have a monetary impact or cost to the Borrower equal to
or in excess of five percent (5%) of the Borrower's pre-tax income during the
four immediately preceding fiscal quarters;
(b) To the best of Borrower's knowledge, the Borrower's assets do not
contain asbestos-containing materials, polychlorinated biphenyls, urea,
formaldehyde, underground storage tanks or Hazardous Substances (other than
those in amounts commonly and lawfully used in automotive repair shops), which
have been discarded or otherwise released by Borrower in a quantity and manner
requiring that notice thereof be given by Borrower to any governmental agency,
except where such notice has been given; and
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(c) To the best of Borrower's knowledge, there has been no generation,
storage or disposal of any Hazardous Substance on any premises owned or operated
by the Borrower, the remediation of which would have a monetary impact or cost
to the Borrower equal to or in excess of five percent (5%) of the Borrower's
pre-tax income during the four immediately preceding fiscal quarters.
Section 5.16. REGULATION U. Borrower warrants as of the date of this
Agreement that Borrower does not own, directly or indirectly any "margin stock"
(as defined in Regulation U of the Board of Governors of the Federal Reserve
System), as supplemented from time to time, and Borrower warrants as of the date
of each Loan that it does not own "margin stock" as of the date of such Loan
having an aggregate fair market value equal to or greater than 25% of the fair
market value of all of Borrower's assets, unless Borrower shall have executed a
Form FR U-1 (OMB No. 7100-1115) prior to obtaining the proceeds of the Loan and,
in such case, Borrower further warrants that the proceeds of such Loan are not
used for the purpose, whether immediate, incidental or ultimate, of buying or
carrying any "margin stock".
ARTICLE 6. AFFIRMATIVE COVENANTS.
So long as any of the Notes shall remain unpaid or any Lender shall
have any Commitment under this Agreement, the Borrower shall:
Section 6.01. MAINTENANCE OF EXISTENCE. Except as permitted by Sec.
7.07, preserve and maintain, and cause each of its Subsidiaries to preserve and
maintain, its corporate existence and good standing in the jurisdiction of its
incorporation, and qualify and remain qualified, and cause each of its
Subsidiaries to qualify and remain qualified, as a foreign corporation in each
jurisdiction where failure to qualify would have a material adverse effect.
Section 6.02. CONDUCT OF BUSINESS. Continue, and cause each of its
Subsidiaries to continue, to engage in an efficient and economical manner in a
business of the same general type as conducted by it on the date of this
Agreement.
Section 6.03. MAINTENANCE OF PROPERTIES. Maintain, keep and preserve,
and cause each of its Subsidiaries to maintain, keep and preserve, all of its
properties, (tangible and intangible) necessary or useful in the proper conduct
of its business in good working order and condition, ordinary wear and tear
excepted.
Section 6.04. MAINTENANCE OF RECORDS. Keep, and cause each of its
Subsidiaries to keep, adequate records and books of account, in which complete
entries will be made in accordance with GAAP, reflecting all financial
transactions of the Borrower and its Subsidiaries.
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Section 6.05. MAINTENANCE OF INSURANCE. Maintain, and cause each of its
Subsidiaries to maintain, insurance with financially sound and reputable
insurance companies or associations in such amounts and covering such risks as
are usually carried by companies engaged in the same or a similar business and
similarly situated, which insurance may provide for reasonable deductibility
from coverage thereof.
Section 6.06. COMPLIANCE WITH LAWS. Comply, and cause each of its
Subsidiaries to comply, in all material respects with all applicable laws,
rules, regulations and orders, such compliance to include, without limitation,
paying before the same become delinquent all taxes, assessments and governmental
charges imposed upon it or upon its property, except (a) in the case of taxes,
where contested in good faith and by proper proceedings, or (b) where the
failure to so comply would not have a material adverse effect.
Section 6.07. RIGHT OF INSPECTION. At any reasonable time and from time
to time, upon reasonable notice to Borrower, permit the Agent or any Lender or
any agent or representative thereof, to examine and make copies and abstracts
from the records and books of account of, and visit the properties of, the
Borrower and any of its Subsidiaries, and to discuss the affairs, finances and
accounts of the Borrower and any such Subsidiary with any of their respective
officers and directors and the Borrower's independent accountants; provided that
the Borrower shall be entitled to be present at any meeting with the Borrower's
independent accountants. All such examinations, copies, visits and discussions
shall be at the Lenders' expense if conducted prior to a Default and shall be at
the Borrower's expense if conducted subsequent to a Default which is continuing
at the time thereof.
Section 6.08. REPORTING REQUIREMENTS. Furnish to the Agent and to
each of the Lenders:
(a) As soon as available and in any event within 120 days
after the end of each fiscal year of the Borrower, a consolidated balance sheet
of the Borrower and its Consolidated Subsidiaries as of the end of such fiscal
year and a consolidated statement of income and a statement of cash flows and a
consolidated statement of stockholders' equity of the Borrower and its
Consolidated Subsidiaries for such fiscal year, all in reasonable detail and all
prepared in accordance with GAAP, and as to the consolidated statements only,
accompanied by an opinion thereon by Price Waterhouse LLP or other independent
accountants of national standing selected by the Borrower, which opinion shall
not be qualified by reason of audit limitations imposed by the Borrower and
which shall be reasonably acceptable to the Agent and each of the Lenders;
(b) As soon as available and in any event within 50 days after
the end of each of the first three quarters of each fiscal year of the Borrower,
a consolidated balance sheet of the Borrower and its Consolidated Subsidiaries
as of
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the end of such quarter and a consolidated statement of income and a statement
of cash flows of the Borrower and its Consolidated Subsidiaries for the period
commencing at the end of the previous fiscal year and ending with the end of
such quarter, all in reasonable detail and stating in comparative form the
respective consolidated figures for the corresponding date and all prepared in
accordance with GAAP and certified by the chief financial officer, the treasurer
or the corporate controller of the Borrower (subject to year-end adjustments);
(c) Simultaneously with the delivery of the financial
statements referred to above, a certificate of the chief financial officer, the
treasurer or the corporate controller of the Borrower (i) certifying that to the
best of her knowledge no Default or Event of Default has occurred and is
continuing or, if a Default or Event of Default has occurred and is continuing,
a statement as to the nature thereof and the action which is proposed to be
taken with respect thereto, (ii) with information and computations set forth in
reasonable detail satisfactory to the Lenders which demonstrate compliance with
the covenants contained in Article 8 and the calculation of the Performance
Ratio; and (iii) with a schedule listing all outstanding Environmental Matters
which are in addition to those listed on Schedule 3 hereto and which have not
previously been reported in writing by the Borrower to the Agent and the Lenders
if the aggregate amount of all liabilities, losses, damages, costs and expenses
of such additional environmental matters, including but not limited to clean-up
or remediation costs, is estimated to equal or exceed five percent (5%) of the
Borrower's pre-tax income during the four immediately preceding fiscal quarters.
(d) Promptly after the commencement thereof, notice of all
actions, suits, and proceedings before any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
affecting the Borrower or any of its Subsidiaries which, if determined adversely
to the Borrower or such Subsidiary, could have a Material Adverse Effect;
(e) As soon as possible and in any event within 10 days after
the occurrence of each Default or Event of Default a written notice setting
forth the details of such Default or Event of Default and the action which is
proposed to be taken by the Borrower with respect thereto;
(f) promptly after notifying the government, if government
notice is required, and otherwise within ten days after the Borrower knows that
any of the events or conditions specified below with respect to any Plan have
occurred or exist, a statement signed by the chief financial officer, the
treasurer or the corporate controller of the Borrower setting forth details
respecting such event or condition and the action, if any, which the Borrower
proposes to take with respect thereto (and a copy of any report or notice
required to be filed with or given to the PBGC by the Borrower with respect to
such event or condition):
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(i) any Reportable Event with respect to a Plan, as to which
the PBGC has not by regulation waived requirement of Section 4043(a) of
ERISA that it be notified within 30 days of the occurrence of such
event (provided that a failure to meet the minimum funding standard of
Section 412 of the Code or Section 302 of ERISA including, without
limitation, the failure to make on or before its due date a required
installment under Section 412(m) of the Code or Section 302(e) of
ERISA, shall be a Reportable Event regardless of the issuance of any
waivers in accordance with Section 412(d) of the Code for any Plan;
(ii) the distribution under Section 4041 of ERISA of a Notice
of Intent to Terminate any Plan or any action taken by the Borrower to
terminate any Plan;
(iii) the institution by the PBGC of proceedings under
Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan;
(iv) the adoption of an amendment to any Plan that pursuant to
Section 401(a)(29) of the Code or Section 307 of ERISA would result in
the loss of tax-exempt status of the trust of which such Plan is a part
if the Borrower fails to timely provide security to the Plan in
accordance with the provisions of said Sections.
(g) As soon as possible and in any event within ten (10) days
after the Borrower or any of its Subsidiaries becomes a member of any
Multiemployer Plan, a notice thereof specifying the Multiemployer Plan,
whereupon the Agent shall prepare and the Borrower agrees to execute with the
Agent and the Banks an amendment to this Credit Agreement adding the provisions
set forth in Schedule 4 hereto.
(h) Such other information respecting the condition or
operations, financial or otherwise, of the Borrower or any of its Subsidiaries
as the Agent or any Lender may from time to time reasonably request.
ARTICLE 7. NEGATIVE COVENANTS.
So long as any of the Notes shall remain unpaid or any Lender shall
have any Commitment under this Agreement, the Borrower shall not (unless waived
in accordance with the provisions of Sec. 11.01 hereof):
Section 7.01 INDEBTEDNESS. Borrow, create, incur, assume or suffer to
exist, or permit any Indebtedness, nor permit any Subsidiary to do so, except
for the following (and except that after giving effect to the incurrence of any
of the following, the Borrower shall be in compliance with all other covenants
hereunder):
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(a) trade Indebtedness (which shall not include any borrowing,
trade acceptances or notes given in settlement of trade Indebtedness)
incurred in the ordinary course of business and not more than ninety
(90) days overdue;
(b) Existing Indebtedness and Indebtedness incurred under
lines of credit or committed loan facilities in existence on the
Closing Date;
(c) purchase money Indebtedness;
(d) Capitalized Leases;
(e) Subordinated Debt of the Borrower issued after the Closing
Date; provided, however, that at the time of and after giving effect to the
issuance thereof, no Default or Event of Default shall have occurred or be
continuing;
(f) Consolidated Senior Funded Debt of the Borrower which is
unsecured and which is incurred subsequent to the Closing Date; provided,
however, that after giving effect to the incurrence thereof and to the
application of the proceeds thereof, the Borrower will be in compliance with
Article 8 hereof.
Section 7.02. LIENS. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to exist, any
Lien, upon or with respect to any of its properties, now owned or hereafter
acquired, except:
(a) Liens in favor of the Agent on behalf of the Lenders
securing the Loans hereunder;
(b) Liens for taxes or assessments or other government charges
or levies if not yet due and payable or if due and payable if they are being
contested in good faith by appropriate proceedings and for which appropriate
reserves are maintained;
(c) Liens imposed by law, such as mechanic's, materialmen's,
landlord's, warehousemen's and carrier's Liens, and other similar Liens,
securing obligations incurred in the ordinary course of business which are not
past due for more than 30 days, or which are being contested in good faith by
appropriate proceedings and for which appropriate reserves have been
established;
(d) Liens under workers' compensation, unemployment insurance,
social security or similar legislation (other than ERISA);
(e) Liens, deposits or pledges to secure the performance of
bids, tenders, contracts (other than contracts for the payment of money), leases
(permitted under the terms of this Agreement), public or statutory obligations,
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surety, stay, appeal, indemnity, performance or other similar bonds, or other
similar obligations arising in the ordinary course of business;
(f) judgment and other similar Liens arising in connection
with court proceedings; provided that 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;
(g) easements, rights-of-way, restrictions and other similar
encumbrances which, in the aggregate, do not materially interfere with the
occupation, use and enjoyment by the Borrower or any such Subsidiary of the
property or assets encumbered thereby in the normal course of its business or
materially impair the value of the property subject thereto;
(h) Liens securing obligations of such a Subsidiary to the
Borrower or another such Subsidiary;
(i) Liens in existence on the date of this Agreement securing
Existing Indebtedness.
(j) purchase money Liens on any property hereafter acquired or
the assumption of any Lien on property existing at the time of such Acquisition,
or a Lien incurred in connection with any conditional sale or other title
retention agreement or a Capitalized Lease.
Section 7.03. DISTRIBUTIONS.
(a) The Borrower will not authorize a Distribution on its Common Stock
which is not payable within 90 days of authorization.
(b) The Borrower will not authorize or make any Distribution if after
giving effect thereto a Default or an Event of Default will exist.
Section 7.04. LEASES; SALE-LEASEBACKS.
(a) The Borrower will not, and will not permit any Subsidiary to,
become liable as lessee under any lease if as of the date on which such lease is
to be entered into and after giving effect thereto, Consolidated Earnings
Available for Fixed Charges for the immediately preceding Four Quarter Period
are less than 150% of Pro Forma Fixed Charges determined as of such date.
(b) The Borrower will not, and will not permit any Subsidiary to, enter
into any arrangement whereby the Borrower or any such Subsidiary shall sell or
transfer Property owned by the Borrower or such Subsidiary and then or
thereafter as lessee rent or lease such Property (any such arrangement being
herein referred to as a "sale-leaseback") other than (i) a sale-leaseback solely
with the Borrower
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or a Wholly Owned Subsidiary or (ii) a lease for temporary period, not in excess
of three months, to permit the orderly relocation of operations carried on in or
at a facility subsequent to the sale thereof and prior to the surrender of
possession thereof, unless (x) such sale-leaseback transaction is completed
within 180 days of the date of acquisition of the Property involved, and (y)
such sale-leaseback is entered into in compliance with any applicable
limitations hereof and (z) at the time of consummation thereof and after giving
effect thereto no Default or Event of Default exists.
Section 7.05. SALE OF ASSETS. Sell, lease, assign, transfer or
otherwise dispose of, or permit any of its Subsidiaries to sell, lease, assign,
transfer or otherwise dispose of, any of its now owned or hereafter acquired
assets (including, without limitation, shares of stock and indebtedness of such
Subsidiaries, receivables and leasehold interests); except: (a) for inventory
disposed of in the ordinary course of business; (b) the sale or other
disposition of assets no longer used or useful in the conduct of its business;
(c) any sale, lease, assignment or other transfer by a Subsidiary of its assets
to the Borrower or a Consolidated Subsidiary or by the Borrower to a
Consolidated Subsidiary, or (d) other assets disposed of having an aggregate
fair market value not exceeding $1,000,000 during any fiscal year of the
Borrower and sold for a price which is within a fair market value for such
assets.
Section 7.06. STOCK OF SUBSIDIARIES, ETC. Sell or otherwise dispose of
any shares of capital stock of any of its Subsidiaries , except in connection
with a transaction permitted under Section 7.03, or permit any such Subsidiary
to issue any additional share of its capital stock, except directors' qualifying
shares.
Section 7.07. MERGERS, ETC. Enter into any merger, consolidation or
reorganization, or permit any Subsidiary to enter into any merger, consolidation
or reorganization, or sell, transfer, convey, lease or otherwise dispose of all
or substantially all of the assets or business of the Borrower or any Subsidiary
of the Borrower or enter into any transaction or transactions the result of
which is the acquisition of control of the Borrower by a person or group (as
such term is defined in the Securities Exchange Act of 1934 and the regulations
promulgated thereunder) not presently in a control relationship with the
Borrower.
Section 7.08. TRANSACTIONS WITH AFFILIATES. Enter into any transaction,
including, without limitation, the purchase, sale or exchange of property or the
rendering of any service, with any Affiliate or permit any of its Subsidiaries
to enter into any transaction, including, without limitation, the purchase, sale
or exchange of property or the rendering of any service, with any Affiliate,
except in the ordinary course of and pursuant to the reasonable requirements of
the Borrower's or such Subsidiary's business and upon fair and reasonable terms
no less favorable to the Borrower or such Subsidiary than would obtain in a
comparable arm's length transaction with a Person not an Affiliate.
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Section 7.09. HAZARDOUS SUBSTANCES; INDEMNIFICATION. Use, generate,
treat, store, dispose of or otherwise introduce, or permit any Subsidiary to
use, generate, treat, store, dispose of or otherwise introduce, any Hazardous
Substances into or on any real property owned or leased by any of them and will
not, and will not permit any Subsidiary to, cause, suffer, allow or permit
anyone else to do so, except (i) Hazardous Substances which are commonly and
lawfully used or generated in automotive repair shops, or (ii) Hazardous
Substances which shall be handled in an environmentally safe manner through
methods which have been approved by and meet all of the standards of the federal
Environmental Protection Agency and any other federal, state or local agency
with authority to enforce Environmental Laws. The Borrower hereby agrees to
indemnify, reimburse, defend and hold harmless the Lenders and their directors,
officers, agents and employees ("Indemnified Parties") for, from and against all
demands, liabilities, damages, costs, claims, suits, actions, legal or
administrative proceedings, interest, losses, expenses and reasonable attorney's
fees (including any such fees and expenses incurred in enforcing this indemnity)
asserted against, imposed on or incurred by any of the Indemnified Parties,
directly or indirectly pursuant to or in connection with the application of any
Environmental Law to acts or omissions of the Borrower or any Subsidiary
occurring at any time on or in connection with any real estate owned or leased
by the Borrower or any Subsidiary or any business conducted thereon.
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Section 7.10. ACQUISITIONS. Make any Acquisition unless:
(a) the Acquisition shall result in the Borrower's ownership
of new Stores; or
(b) the Person being acquired shall be in a line of business
which is substantially the same as or complimentary to the Borrower's principal
line of business; and
(c) immediately after giving effect to the Acquisition, the
Borrower shall be in compliance with all covenants under Article 8 hereof.
PROVIDED FURTHER, that if any Acquisition is in excess of an aggregate cost to
the Borrower or any Subsidiary of more than $5,000,000, the Borrower shall
provide to the Lenders evidence of compliance with all covenants in this
Agreement prior to the consummation of such Acquisition.
Section 7.11. SUBSIDIARIES. Create any Subsidiary after the date hereof
without thirty (30) days prior written notice to the Agent and the execution by
such Subsidiary of a guaranty of the Loans in a form satisfactory to the Lenders
and the Agent, together with all supporting documentation in such form as the
Lenders may reasonably require, including a favorable opinion of counsel to such
Subsidiary in respect of such guaranty. Upon receipt of such notice from the
Borrower, the Agent shall furnish to each Lender and the Borrower a revised
Schedule 1 for attachment to this Agreement.
ARTICLE 8. FINANCIAL COVENANTS.
So long as any of the Notes shall remain unpaid or any Lender shall
have any Commitment under this Agreement:
Section 8.01. LEVERAGE RATIO. The Borrower shall maintain at the end of
each fiscal quarter the ratio of Consolidated Senior Funded Debt to Consolidated
Tangible Net Worth plus Consolidated Senior Funded Debt of less than 55%.
Section 8.02. FIXED CHARGE COVERAGE RATIO. The Borrower shall maintain
at the end of each fiscal quarter the ratio of Consolidated Earnings Available
for Fixed Charges to Consolidated Fixed Charges of more than 150%.
ARTICLE 9. EVENTS OF DEFAULT.
Section 9.01. EVENTS OF DEFAULT. Any of the following events shall be
an "Event of Default":
(a) The Borrower shall fail to pay any principal of the
Notes, any interest on the Notes, any commitment fee required by Sec. 2.11, or
any other fee or
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other amount due hereunder within the earlier of (i) five days after notice by
the Agent to the Borrower of such failure, or (ii) ten days after the due date
thereof;
(b) Any representation or warranty made or deemed made by the
Borrower in this Agreement or in any other Facility Document or which is
contained in any certificate, document, opinion, financial or other statement
furnished at any time under or in connection with any Facility Document shall
prove to have been incorrect in any material respect on or as of the date made
or deemed made;
(c) The Borrower shall fail to perform or observe any term,
covenant or agreement contained in Article 8 of this Agreement and such failure
shall continue for 60 consecutive days after notice of such failure shall have
been made to the Borrower by the Agent at the request of the Required Lenders;
(d) The Borrower shall: (i) fail to perform or observe any
other term, covenant or agreement contained in this Agreement (other than as
provided in Subsections (a) and (c) of this Section 9.01) or fail to perform or
observe any term, covenant or agreement on its part to be performed or observed
(other than the obligations specifically referred to elsewhere in this Sec.
9.01) in any other Facility Document, and such failure shall continue for 30
consecutive days after notice of such failure shall have been made to the
Borrower by the Agent at the request of the Required Lenders (the "First
Notice"); provided, however, that if such failure cannot be corrected within
such period, it shall not constitute an Event of Default (i) if corrective
action capable of remedying such failure is instituted by the Borrower within
five days of notice of such failure and diligently pursued until such failure is
corrected, (ii) if the Borrower shall within such five day period furnish to the
Agent a certificate executed by the chief financial officer of the Borrower
certifying (x) that such failure is such that it can be corrected but not within
the applicable period, (y) that corrective action capable of remedying such
failure has been instituted and is being diligently pursued and will be
diligently pursued until the failure is corrected, and (z) that the Borrower
shall notify the Agent by certificate executed as above when such failure has
been corrected, and (iii) such failure shall be fully corrected within a
reasonable period mutually agreed to in writing by the Agent and the Borrower
not exceeding 60 days after the First Notice;
(e) The Borrower or any of its Subsidiaries shall fail to pay
any Indebtedness singly or in the aggregate exceeding $100,000, including but
not limited to Indebtedness for borrowed money (other than the payment
obligations described in (a) above), of the Borrower or such Subsidiary, or any
interest or premium thereon, when due (whether by scheduled maturity, required
prepayment, demand or otherwise) subject, however, to applicable grace or cure
periods, if any, or fail to perform or observe any term, covenant or condition
on its part to be performed or observed under any agreement or instrument
relating to any such Indebtedness, when required to be performed or observed, if
the effect
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of such failure to pay, perform or observe is to accelerate, or to permit the
acceleration of, after the giving of notice or passage of time, or both, the
maturity of such Indebtedness, and such failure shall continue for more than ten
days, whether or not the holder of such Indebtedness shall accelerate the
payment of such Indebtedness, or any such Indebtedness shall be declared to be
due and payable, or required to be prepaid (other than by a regularly scheduled
required prepayment), prior to the stated maturity thereof;
(f) The Borrower or any of its Subsidiaries: (i) shall
generally not, or be unable to, or shall admit in writing its inability to, pay
its debts as such debts become due in the ordinary course of business, except
for failure to pay trade creditors provided that such delay in payment is in
accordance with normal business practices; or (ii) shall make an assignment for
the benefit of creditors, petition or apply to any tribunal for the appointment
of a custodian, receiver or trustee for it or a substantial part of its assets;
or (iii) shall commence any proceeding under any bankruptcy, reorganization,
arrangement, readjustment of debt, dissolution or liquidation law or statute of
any jurisdiction, whether now or hereafter in effect; or (iv) shall have had any
such petition or application filed or any such proceeding shall have been
commenced, against it, in which an adjudication or appointment is made or order
for relief is entered, or which petition, application or proceeding remains
undismissed, unstayed or unbonded for a period of 30 days or more; or (v) by any
act or omission shall indicate its consent to, approval of or acquiescence in
any such petition, application or proceeding or order for relief or the
appointment of a custodian, receiver or trustee for all or any substantial part
of its property; or (vi) shall suffer any such custodianship, receivership or
trusteeship to continue undischarged or unbonded for a period of 30 days or
more;
(g) One or more judgments, decrees or orders for the payment
of money in excess of $100,000 in the aggregate shall be rendered against the
Borrower or any of its Subsidiaries and such judgments, decrees or orders shall
continue unsatisfied and in effect for a period of 60 consecutive days without
being vacated, discharged, satisfied or stayed or bonded pending appeal;
(h) Any of the following events shall occur or exist with
respect to the Borrower or any ERISA Affiliate: (i) any Prohibited Transaction
shall occur in respect of any Plan or the Borrower or any ERISA Affiliate shall
fail to comply with any exemption from a Prohibited Transaction pertaining to
any Plan; (ii) the Borrower or any ERISA Affiliate shall fail to comply with any
agreement with any governmental authority having jurisdiction in the premises to
satisfy any Unfunded Vested Liabilities; (iii) any Reportable Event shall occur
with respect to any Plan; (iv) the filing under Section 4041 of ERISA of a
notice of intent to terminate any Plan or the termination of any Plan; or (v)
any event or circumstance exists which might constitute grounds entitling the
PBGC to institute proceedings under Section 4042 of ERISA for the termination
of, or for the appointment of a trustee to administer, any Plan, or the
institution by the PBGC of any such proceedings; and
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in each case above, such event or condition, together with all other events or
conditions, if any, could in the opinion of the Lender subject the Borrower to
any tax, penalty, or other liability to a Plan, Multiemployer Plan, the PBGC, or
otherwise (or any combination thereof) would have a material adverse effect;
(i) Any material provision of any Facility Document shall at
any time for any reason be declared to be null, void, invalid or unenforceable,
unless such declaration is based upon the negligence or willful misconduct of
any Lender.
Section 9.02. REMEDIES. If any Event of Default shall occur and be
continuing, the Agent shall, upon request of the Required Lenders, by a written
notice to the Borrower: (a) declare the Commitments to be terminated, whereupon
the same shall forthwith terminate, and (b) declare the outstanding principal of
the Notes, all interest thereon and all other amounts payable under this
Agreement and the Notes to be forthwith due and payable, whereupon the Notes,
all such interest and all such amounts shall become and be forthwith due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Borrower; provided that, in the case
of an Event of Default referred to in Sec. 9.01(f) above, the Commitments shall
be immediately terminated, and the Notes, all interest thereon and all other
amounts payable under this Agreement shall be immediately due and payable
without notice, presentment, demand, protest or other formalities of any kind,
all of which are hereby expressly waived by the Borrower.
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ARTICLE 10. THE AGENT; RELATIONS AMONG LENDERS AND BORROWER.
Section 10.01. APPOINTMENT, POWERS AND IMMUNITIES OF AGENT. Each Lender
hereby irrevocably (but subject to removal by the Required Lenders pursuant to
Sec. 10.09) appoints and authorizes the Agent to act as its agent hereunder and
under any other Facility Document with such powers as are specifically delegated
to the Agent by the terms of this Agreement and any other Facility Document,
together with such other powers as are reasonably incidental thereto. The Agent
shall have no duties or responsibilities except those expressly set forth in
this Agreement and any other Facility Document, and shall not by reason of this
Agreement be a trustee for any Lender. The Agent shall not be responsible to the
Lenders for any recitals, statements, representations or warranties made by the
Borrower or any officer or official of the Borrower or any other Person
contained in this Agreement or any other Facility Document, or in any
certificate or other document or instrument referred to or provided for in, or
received by any of them under, this Agreement or any other Facility Document, or
for the value, legality, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Facility Document or any other
document or instrument referred to or provided for herein or therein or for any
failure by the Borrower to perform any of its obligations hereunder or
thereunder. The Agent may employ agents and attorneys-in-fact and shall not be
responsible, except as to money or securities received by it or its authorized
agents, for the negligence or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. Neither the Agent nor any of its directors,
officers, employees or agents shall be liable or responsible for any action
taken or omitted to be taken by it or them hereunder or under any other Facility
Document or in connection herewith or therewith, except for its or their own
gross negligence or willful misconduct.
Section 10.02. RELIANCE BY AGENT. The Agent shall be entitled to rely
upon any certification, notice or other communication (including any thereof by
telephone, telex, telegram or cable) believed by it to be genuine and correct
and to have been signed or sent by or on behalf of the proper Person or Persons,
and upon advice and statements of legal counsel, independent accountants and
other experts selected by the Agent. The Agent may deem and treat each Lender as
the holder of the Loans made by it for all purposes hereof unless and until a
notice of the assignment or transfer thereof satisfactory to the Agent signed by
such Lender shall have been furnished to the Agent but the Agent shall not be
required to deal with any Person who has acquired a participation in any Loan
from a Lender. As to any matters not expressly provided for by this Agreement or
any other Facility Document, the Agent shall in all cases be fully protected in
acting, or in refraining from acting, hereunder in accordance with instructions
signed by the Required Lenders, and such instructions of the Required Lenders
and any action taken or failure to act pursuant thereto shall be binding on all
of the Lenders and any other holder of all or any portion of any Loan.
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Section 10.03. DEFAULTS. The Agent shall not be deemed to have
knowledge of the occurrence of a Default or Event of Default (other than the
non-payment of principal of or interest on the Loans to the extent the same is
required to be paid to the Agent for the account of the Lenders) unless the
Agent has received notice from a Lender or the Borrower specifying such Default
or Event of Default and stating that such notice is a "Notice of Default." In
the event that the Agent receives such a notice of the occurrence of a Default
or Event of Default, the Agent shall give prompt notice thereof to the Lenders
(and shall give each Lender prompt notice of each such non-payment). The Agent
shall (subject to Sec. 10.08) take only such action with respect to such Default
or Event of Default which is continuing as shall be directed by the Required
Lenders; provided that the Agent shall not be required to take any such action
which it determines to be contrary to law and provided further that the Borrower
shall have no rights under this Section 10.03.
Section 10.04. RIGHTS OF AGENT AS A LENDER. With respect to its
Commitment and the Loans made by it, the Agent in its capacity as a Lender
hereunder shall have the same rights and powers hereunder as any other Lender
and may exercise the same as though it were not acting as the Agent, and the
term "Lender" or "Lenders" shall, unless the context otherwise indicates,
include the Agent in its capacity as a Lender. The Agent and its Affiliates may
(without having to account therefor to any Lender) accept deposits from, lend
money to (on a secured or unsecured basis), and generally engage in any kind of
banking, trust or other business with, the Borrower (and any of its Affiliates)
as if it were not acting as the Agent, and the Agent may accept fees and other
consideration from the Borrower for services in connection with this Agreement
or otherwise without having to account for the same to the Lenders. Although the
Agent and its Affiliates may in the course of such relationships and
relationships with other Persons acquire information about the Borrower, its
Affiliates and such other Persons, the Agent shall have no duty to disclose such
information to the Lenders.
Section 10.05. INDEMNIFICATION OF AGENT. The Lenders agree to indemnify
the Agent (to the extent not reimbursed under Sec. 11.03 or under the applicable
provisions of any other Facility Document, but without limiting the obligations
of the Borrower under Sec. 11.03 or such provisions), ratably in accordance with
the aggregate unpaid principal amount of the Loans made by the Lenders (without
giving effect to any participations, in all or any portion of such Loans, sold
by them to any other Person) (or, if no Loans are at the time outstanding,
ratably in accordance with their respective Commitments), for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind and nature whatsoever which may be
imposed on, incurred by or asserted against the Agent in any way relating to or
arising out of this Agreement, any other Facility Document or any other
documents contemplated by or referred to herein or the transactions contemplated
hereby or thereby (including, without limitation, the costs and expenses which
the Borrower
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is obligated to pay under Sec. 11.03 or under the applicable provisions of any
other Facility Document but excluding normal administrative costs and expenses
incident to the performance of its agency duties hereunder which are of the same
type and nature which would be required prior to a Default or Event of Default)
or the enforcement of any of the terms hereof or thereof or of any such other
documents or instruments; provided that no Lender shall be liable for any of the
foregoing to the extent they arise from the gross negligence or willful
misconduct of the party to be indemnified.
Section 10.06. DOCUMENTS. The Agent will forward to each Lender,
promptly after the Agent's receipt thereof, a copy of each report, notice or
other document required by this Agreement or any other Facility Document to be
delivered to the Agent for such Lender.
Section 10.07. NON-RELIANCE ON AGENT AND OTHER LENDERS. Each Lender
agrees that it has, independently and without reliance on the Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Borrower and its Subsidiaries
and decision to enter into this Agreement and that it will, independently and
without reliance upon the Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own analysis and decisions in taking or not taking action under this Agreement
or any other Facility Document. The Agent shall not be required to keep itself
informed as to the performance or observance by the Borrower of this Agreement
or any other Facility Document or any other document referred to or provided for
herein or therein or to inspect the properties or books of the Borrower or any
Subsidiary. Except for notices, reports and other documents and information
expressly required to be furnished to the Lenders by the Agent hereunder, the
Agent shall not have any duty or responsibility to provide any Lender with any
credit or other information concerning the affairs, financial condition or
business of the Borrower or any Subsidiary (or any of their Affiliates) which
may come into the possession of the Agent or any of its Affiliates. The Agent
shall not be required to file this Agreement, any other Facility Document or any
document or instrument referred to herein or therein, for record or give notice
of this Agreement, any other Facility Document or any document or instrument
referred to herein or therein, to anyone.
Section 10.08. FAILURE OF AGENT TO ACT. Except for action expressly
required of the Agent hereunder, the Agent shall in all cases be fully justified
in failing or refusing to act hereunder unless it shall have received further
assurances (which may include cash collateral) of the indemnification
obligations of the Lenders under Sec. 10.05 in respect of any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action.
Section 10.09. RESIGNATION OR REMOVAL OF AGENT. Subject to the
appointment and acceptance of a successor Agent as provided below, the Agent may
resign at any time by giving written notice thereof to the Lenders and the
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Borrower, and the Agent may be removed at any time with or without cause by the
Required Lenders or by the Borrower and one of the Lenders; provided that the
Borrower and the other Lenders shall be promptly notified thereof. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor Agent. If no successor Agent shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30 days after
the retiring Agent's giving of notice of resignation or the Required Lenders'
removal of the retiring Agent, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent, which shall be a bank which has an office in
the State of New York. The Required Lenders or the retiring Agent, as the case
may be, shall upon the appointment of a successor Agent promptly so notify the
Borrower and the other Lenders. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder. After any retiring Agent's resignation or removal
hereunder as Agent, the provisions of this Article 10 shall continue in effect
for its benefit in respect of any actions taken or omitted to be taken by it
while it was acting as the Agent.
Section 10.10. AMENDMENTS CONCERNING AGENCY FUNCTION. The Agent shall
not be bound by any waiver, amendment, supplement or modification of this
Agreement or any other Facility Document which affects its duties hereunder or
thereunder unless it shall have given its prior consent thereto.
Section 10.11. LIABILITY OF AGENT. The Agent, solely in its capacity as
Agent, shall not have any liabilities or responsibilities to the Borrower on
account of the failure of any Lender to perform its obligations hereunder or to
any Lender on account of the failure of the Borrower to perform its obligations
hereunder or under any other Facility Document.
Section 10.12. TRANSFER OF AGENCY FUNCTION. Without the consent of the
Borrower or any Lender, the Agent may at any time or from time to time transfer
its functions as Agent hereunder to any of its offices wherever located,
provided that the Agent shall promptly notify the Borrower and the Lenders
thereof.
Section 10.13. NON-RECEIPT OF FUNDS BY THE AGENT. Unless the Agent
shall have been notified by a Lender or the Borrower (either one as appropriate
being the "Payor") prior to the date on which such Lender is to make payment
hereunder to the Agent of the proceeds of a Loan or the Borrower is to make
payment to the Agent, as the case may be (either such payment being a "Required
Payment"), which notice shall be effective upon receipt, that the Payor does not
intend to make the Required Payment to the Agent, the Agent may assume that the
Required Payment has been made and may, in reliance upon such assumption (but
shall not be required to), make the amount thereof available to the intended
recipient on such date and, if the Payor has not in fact made the Required
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Payment to the Agent, the recipient of such payment (and, if such recipient is
the Borrower and the Payor Lender fails to pay the amount thereof to the Agent
forthwith upon demand, the Borrower) shall, on demand, repay to the Agent the
amount made available to it together with interest thereon for the period from
the date such amount was so made available by the Agent until the date the Agent
recovers such amount at a rate per annum equal to the average daily Federal
Funds Rate for such period.
Section 10.14. WITHHOLDING TAXES. Each Lender represents that it is
entitled to receive any payments to be made to it hereunder without the
withholding of any tax and will furnish to the Agent such forms, certifications,
statements and other documents as the Agent may request from time to time to
evidence such Lender's exemption from the withholding of any tax imposed by any
jurisdiction or to enable the Agent to comply with any applicable laws or
regulations relating thereto. Without limiting the effect of the foregoing, if
any Lender is not created or organized under the laws of the United States of
America or any state thereof, in the event that the payment of interest by the
Borrower is treated for U.S. income tax purposes as derived in whole or in part
from sources from within the U.S., such Lender will furnish to the Agent Form
4224 or Form 1001 of the Internal Revenue Service, or such other forms,
certifications, statements or documents, duly executed and completed by such
Lender as evidence of such Lender's exemption from the withholding of U.S. tax
with respect thereto. The Agent shall not be obligated to make any payments
hereunder to such Lender in respect of any Loan or such Lender's Commitment
until such Lender shall have furnished to the Agent the requested form,
certification, statement or document.
Section 10.15. SEVERAL OBLIGATIONS AND RIGHTS OF LENDERS. The failure
of any Lender to make any Loan to be made by it on the date specified therefor
shall not relieve any other Lender of its obligation to make its Loan on such
date, but no Lender shall be responsible for the failure of any other Lender to
make a Loan to be made by such other Lender. The amounts payable at any time
hereunder to each Lender shall be a separate and independent debt, and each
Lender shall be entitled to protect and enforce its rights arising out of this
Agreement, and it shall not be necessary for any other Lender to be joined as an
additional party in any proceeding for such purpose.
Section 10.16. PRO RATA TREATMENT OF LOANS, ETC. Except to the extent
otherwise provided: (a) each borrowing under Sec.Sec. 2.01 and 2.02 shall be
made from the Lenders, each reduction or termination of the amount of the
Commitments under Sec. 2.08 shall be applied to the Commitments of the Lenders,
and each payment of commitment fee accruing under Sec. 2.11 shall be made for
the account of the Lenders, pro rata according to the amounts of their
respective Pro Rata Shares; and (b) each prepayment and payment of principal of
or interest on a particular Loan Tranche shall be made to the Agent for the
account of the Lenders
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in accordance with their respective Pro Rata Shares in respect of such Loan
Tranche.
Section 10.17. SHARING OF PAYMENTS AMONG LENDERS. If a Lender shall
obtain payment of any principal of or interest on any Loan made by it through
the exercise of any right of setoff, banker's lien, counterclaim, or by any
other means, it shall promptly purchase from the other Lenders participations in
(or, if and to the extent specified by such Lender, direct interests in) the
Loans made by the other Lenders in such amounts, and make such other adjustments
from time to time as shall be equitable to the end that all the Lenders shall
share the benefit of such payment (net of any expenses which may be incurred by
such Lender in obtaining or preserving such benefit) pro rata in accordance with
the unpaid principal and interest on the Loans held by each of them. To such end
the Lenders shall make appropriate adjustments among themselves (by the resale
of participations sold or otherwise) if such payment is rescinded or must
otherwise be restored. The Borrower agrees that any Lender so purchasing a
participation (or direct interest) in the Loans made by other Lenders may
exercise all rights of setoff, banker's lien, counterclaim or similar rights
with respect to such participation (or direct interest). Nothing contained
herein shall require any Lender to exercise any such right or shall affect the
right of any Lender to exercise, and retain the benefits of exercising, any such
right with respect to any other indebtedness of the Borrower, except that all of
the principal of and interest on the Loans shall be paid in full before any such
right shall be exercised in respect of any other indebtedness of the Borrower.
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ARTICLE 11. MISCELLANEOUS.
Section 11.01. AMENDMENTS AND WAIVERS. Except as otherwise expressly
provided in this Agreement, any provision of this Agreement may be amended or
modified only by an instrument in writing signed by the Borrower, the Agent and
the Required Lenders, or by the Borrower and the Agent acting with the consent
of the Required Lenders and any provision of this Agreement may be waived by the
Required Lenders or by the Agent acting with the consent of the Required
Lenders; PROVIDED that no amendment, modification or waiver shall, unless by an
instrument signed by all of the Lenders or by the Agent acting with the consent
of all of the Lenders: (a) increase or extend the term, or extend the time or
waive any requirement for the reduction or termination, of the Commitments, (b)
extend the date fixed for the payment of principal of or interest on any Loan or
any fee payable hereunder, (c) reduce the amount of any payment of principal
thereof or the rate at which interest is payable thereon or any fee payable
hereunder, (d) alter the terms of this Section 11.01, (e) amend the definition
of the term "Required Lenders", or (f) waive any of the documentary conditions
precedent set forth in Section 4.01 hereof; and PROVIDED, FURTHER, that any
amendment of Article 10 hereof or any amendment which increases the obligations
of the Agent hereunder shall require the consent of the Agent. No failure on the
part of the Agent or any Lender to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof or preclude any other or
further exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
Section 11.02. USURY. Anything herein to the contrary
notwithstanding, the obligations of the Borrower under this Agreement and the
Notes shall be subject to the limitation that payments of interest shall not be
required to the extent that receipt thereof would be contrary to provisions of
law applicable to a Lender limiting rates of interest which may be charged or
collected by such Lender.
Section 11.03. EXPENSES. The Borrower shall reimburse the Agent and the
Lenders within five business days of demand therefor for all reasonable costs,
expenses, and charges (including, without limitation, fees and charges of
external legal counsel for the Agent and each Lender and costs allocated by
their respective internal legal departments, which shall include the internal
legal department of Chase) incurred by the Agent or the Lenders subsequent to
any Default in connection with the enforcement or work-out of the Loans,
including the negotiation and preparation of any other agreements, instruments
or documents pertaining to the Loans or any of the debts, liabilities or
obligations of the Borrower under any of the Facility Documents. The Borrower
agrees to indemnify the Agent and each Lender and their respective directors,
officers, employees and agents from, and hold each of them harmless against, any
and all losses, liabilities, claims, damages or expenses incurred by any of them
arising out of or by reason
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of any investigation or litigation or other proceedings initiated by a Person
other than a Lender (including any threatened investigation or litigation or
other proceedings) relating to any actual or proposed use by the Borrower or any
Subsidiary of the proceeds of the Loans, including without limitation, the
reasonable fees and disbursements of counsel incurred in connection with any
such investigation or litigation or other proceedings (but excluding any such
losses, liabilities, claims, damages or expenses incurred by reason of the gross
negligence or willful misconduct of the Person to be indemnified).
Section 11.04. SURVIVAL. The obligations of the Borrower under Sec.Sec.
3.01, 3.05, 7.09, 10.05 and 11.03 to the extent unfulfilled on the date the
Loans are repaid or the Commitments are terminated shall survive the repayment
of the Loans and the termination of the Commitments.
Section 11.05. ASSIGNMENT; PARTICIPATIONS. (a) This Agreement shall be
binding upon, and shall inure to the benefit of, the Borrower, the Agent, the
Lenders and their respective successors and assigns, except that the Borrower
may not assign or transfer its rights or obligations hereunder. Each Lender may
assign, or sell participations in, all or any part of its commitment or any Loan
to another bank or other entity, in which event (i) in the case of an
assignment, upon notice thereof by the Lender to the Borrower with a copy to the
Agent, the assignee shall have, to the extent of such assignment (unless
otherwise provided therein), the same rights, benefits and obligations as it
would have if it were a Lender hereunder; and (ii) in the case of a
participation, the participant shall have no rights under the Facility Documents
and all amounts payable by the Borrower under Article 3 shall be determined as
if such Lender had not sold such participation. No assignment can be made
without the consent of the Borrower and the Agent (which consents will not be
unreasonably withheld) or in a principal amount which is less than $5,000,000;
provided further that no consent of the Borrower to any assignment shall be
required after the occurrence of an Event of Default which shall be continuing.
The agreement executed by a Lender in favor of any participant shall not give
the participant the right to require such Lender to take or omit to take any
action hereunder except action directly relating to (i) the extension of the
Revolving Credit Termination Date, (ii) the extension of a payment date with
respect to any portion of the principal of or interest on any amount outstanding
hereunder allocated to such participant, (iii) the reduction of the principal
amount outstanding hereunder or (iv) the reduction of the rate of interest
payable on such amount or any amount of fees payable hereunder to a rate or
amount, as the case may be, below that which the participant is entitled to
receive under its agreement with such Lender. Such Lender may furnish any
information concerning the Borrower in the possession of such Lender from time
to time to assignees and participants (including prospective assignees and
participants) with the prior written consent of the Borrower, which consent
shall not be unreasonably withheld; provided that such Lender shall require any
such prospective assignee or such participant (prospective or otherwise) to
agree in writing to maintain the confidentiality of such information. In
connection with any
53
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assignment pursuant to this paragraph (a), an administrative fee in the amount
of $2,500 shall be paid to the Agent by the assignee for processing such
assignment.
(b) In addition to the assignments and participations permitted under
paragraph (a) above, any Lender may assign and pledge all or any portion of its
Loans and Note to (i) any Affiliate of such Lender or (ii) any Federal Reserve
Bank as collateral security pursuant to Regulation A of the Board of Governors
of the Federal Reserve System and any Operating Circular issued by such Federal
Reserve Bank. No such assignment shall release the assigning Lender from its
obligations hereunder.
Section 11.06. NOTICES. All notices and other communications provided
for herein (including, without limitation, any modifications of, or waivers or
consents under, this Agreement) shall be given or made by telex, telegraph,
cable or in writing and telexed, telecopied, telegraphed, cabled, mailed or
delivered to the intended recipient at the "Address for Notices" specified below
its name on the signature page hereof or, as to any party, at such other address
as shall be designated by such party in a notice to each other party. Except as
otherwise provided in this Agreement, all such communications shall be deemed to
have been duly given when transmitted by telex or telecopier, delivered to the
telegraph or cable office or personally delivered or, in the case of a mailed
notice, upon receipt, in each case given or addressed as aforesaid.
Section 11.07. SETOFF. The Borrower agrees that, in addition to (and
without limitation of) any right of setoff, banker's lien or counterclaim a
Lender may otherwise have, each Lender shall be entitled, at its option, to
offset balances (general or special, time or demand, provisional or final) held
by it for the account of the Borrower at any of such Lender's offices, in
Dollars or in any other currency, against any amount payable by the Borrower to
such Lender under this Agreement or such Lender's Note which is not paid when
due (regardless of whether such balances are then due to the Borrower) subject,
however, to applicable grace or cure periods, if any, in which case it shall
promptly notify the Borrower and the Agent thereof; provided that such Lender's
failure to give such notice shall not affect the validity thereof. Payments by
the Borrower hereunder shall be made without setoff or counterclaim, unless
Borrower shall have obtained a final judgment against a Lender to which payments
are due.
Section 11.08. TABLE OF CONTENTS; HEADINGS. Any table of contents and
the headings and captions hereunder are for convenience only and shall not
affect the interpretation or construction of this Agreement.
Section 11.09. SEVERABILITY. The provisions of this Agreement are
intended to be severable. If for any reason any provision of this Agreement
shall be held invalid or unenforceable in whole or in part in any jurisdiction,
such provision shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without in any manner affecting the validity
or enforceability
54
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thereof in any other jurisdiction or the remaining provisions hereof in any
jurisdiction.
Section 11.10. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument, and any party hereto may execute this Agreement by signing any
such counterpart.
Section 11.11. GOVERNING LAW. This Agreement shall be governed by, and
interpreted and construed in accordance with, the laws of the State of New York;
provided that the foregoing is not intended to limit the maximum rate of
interest which may be charged or collected by a Lender hereunder if, under the
law applicable to it, such Lender may charge or collect such interest at a
higher rate than is permissible under the law of said State.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
BORROWER Monro Muffler Brake, Inc.
By
Name: Catherine D'Amico
Title: Chief Financial Officer
and Senior Vice President
Address for Notices:
200 Holleder Parkway
Rochester, New York 14615-3808
Attn: Chief Financial Officer
Telecopier No.: (716) 647-0945
LENDERS: THE CHASE MANHATTAN BANK, N.A.
By
Name: Michelle Benedict-Jones
Title: Vice President
Lending Office and Address for Notices:
Middle Market Department
One Chase Square
Rochester, New York 14643
Attn: Monro Muffler/Brake Account
Representative
Telecopier No.: (716) 258-7604
55
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FLEET BANK
By
Name: Jeffrey S. Holmes
Title: Vice President
Lending Office and Address for Notices:
Fleet Bank
One East Avenue
Rochester, New York 14638
Attn: Jeffrey S. Holmes
Telecopier No.: (716) 546-9278
AGENT: THE CHASE MANHATTAN BANK, N.A.,
as Agent
By
Name: Michelle Benedict-Jones
Title: Vice President
Address for Notices:
Metropolitan Department
One Chase Square
Rochester, New York 14643
Attn: Monro Muffler/Brake Account
Representative
Telecopier No.: (716) 258-7604
56
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EXHIBIT A
REVOLVING CREDIT NOTE
$Commitment of [Bank X] Rochester, New York
February 7, 1996
Monro Muffler Brake, Inc. (the "Borrower"), a corporation organized
under the laws of New York, for value received, hereby promises to pay to the
order of [Lender X] (the "Lender") at the principal office of The Chase
Manhattan Bank, N.A. at One Chase Square, Rochester, New York 14643, for the
account of the appropriate Lending Office of the Lender, the principal sum of
($Commitment amount of Lender X) or, if less, the amount of Revolving Credit
Loans loaned by the Lender to the Borrower pursuant to the Credit Agreement
referred to below, in lawful money of the United States of America and in
immediately available funds, on the date(s) and in the manner provided in said
Credit Agreement. The Borrower also promises to pay interest on the unpaid
principal balance hereof, for the period such balance is outstanding, at said
principal office for the account of said Lending Office, in like money, at the
rates of interest as provided in the Credit Agreement described below, on the
date(s) and in the manner provided in said Credit Agreement.
The date and amount of each Revolving Credit Loan made by the Lender to
the Borrower under the Credit Agreement referred to below, maturity date and
each payment of principal thereof, shall be recorded by the Lender on its books
and, prior to any transfer of this Note (or, at the discretion of the Lender, at
any other time), endorsed by the Lender on the schedule attached hereto or any
continuation thereof; provided, however, that failure to make any such
endorsement shall not affect the rights of the Lender or the obligations of the
Borrower hereunder in respect of this Note.
This is one of the Notes referred to in that certain Credit Agreement
(as amended from time to time the "Credit Agreement") dated as of February 7,
1996 among the Borrower, the Lenders named therein (including the Lender) and
The Chase Manhattan Bank, N.A. as Agent and evidences the Revolving Credit Loans
made by the Lender thereunder. All terms not defined herein shall have the
meanings given to them in the Credit Agreement.
The Credit Agreement provides for the acceleration of the maturity of
principal upon the occurrence of certain Events of Default and for prepayments
on the terms and conditions specified therein.
The Borrower waives presentment, notice of dishonor, protest and any
other notice or formality with respect to this Note.
57
- 0 -
Schedule 1
List of Subsidiaries (Sec. Sec. 5.01, 5.09, 7.11)
STATE
NAME OR COUNTRY FEDERAL ID#
- -------------------------------------------------------------
Monro Service Corporation Delaware
Schedule 2
Consents Required (Sec. 5.02(d))
None
58
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EXHIBIT B
TERM LOAN NOTE
$_____________ Rochester, New York
February 7, 1996
Monro Muffler Brake, Inc. (the "Borrower"), a corporation organized
under the laws of New York, for value received, hereby promises to pay to the
order of [Lender X] (the "Lender") at the principal office of The Chase
Manhattan Bank, N.A. at One Chase Square, Rochester, New York 14643, for the
account of the appropriate Lending Office of the Lender, the principal sum of
- ------------------------------
____________________________________________________________ DOLLARS
($______________) , in lawful money of the United States of America and in
immediately available funds, in sixty monthly installments, as follows:
fifty-nine (59) consecutive installments of $____________ each due on the first
day of each month commencing on __________1, ____, and a sixtieth (60th) and
final installment due on __________1, ____ of all remaining unpaid principal
($___________). The Borrower also promises to pay interest on the unpaid
principal balance hereof, for the period such balance is outstanding, at said
principal office for the account of said Lending Office, in like money, at the
rates of interest as provided in the Credit Agreement described below, on the
date(s) and in the manner provided in said Credit Agreement.
This is one of the Term Loan Notes referred to in that certain Credit
Agreement (as amended from time to time the "Credit Agreement") dated as of
February 7, 1996 among the Borrower, the Lenders named therein (including the
Lender) and The Chase Manhattan Bank, N.A. as Agent and evidences the Term Loan
made by the Lender thereunder. All terms not defined herein shall have the
meanings given to them in the Credit Agreement.
The Credit Agreement provides for the acceleration of the maturity of
principal upon the occurrence of certain Events of Default and restricts
prepayment under certain conditions.
The Borrower waives presentment, notice of dishonor, protest and any
other notice or formality with respect to this Note.
This Note shall be governed by, and interpreted and construed in
accordance with, the laws of the State of New York.
Monro Muffler Brake, Inc.
By
Name:
Title:
59
-1-
This Note shall be governed by, and interpreted and construed in accordance
with, the laws of the State of New York.
Monro Muffler Brake, Inc.
By
Name:
Title:
60
-2-
Notation Amount Amount of Balance
Date of Loan Payment Outstanding By
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=======================================================================
61
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EXHIBIT C
FORM OF AUTHORIZATION LETTER
__________, 19__
The Chase Manhattan Bank, N.A.
Metropolitan Department
One Chase Square
Rochester, New York 14643
Attn: Monro Muffler/Brake Account Representative
Re: Credit Agreement dated as of February 7, 1996 (the "Credit Agreement")
among Monro Muffler Brake, Inc., the Lenders named therein, and The
Chase Manhattan Bank, N.A., as Agent for said Lenders
Ladies and Gentlemen:
In connection with the captioned Credit Agreement, we hereby designate
any one of the following persons to give to you instructions, including notices
required pursuant to the Agreement, orally or by telephone or teleprocess:
NAME (TYPEWRITTEN)
- ----------
- ----------
- ----------
- ----------
Instructions may be honored on the oral, telephonic or teleprocess
instructions of anyone purporting to be any one of the above designated persons
even if the instructions are for the benefit of the person delivering them. We
will furnish you with confirmation of each such instruction either by telex
(whether tested or untested) or in writing signed by any person designated above
(including any telecopy which appears to bear the signature of any person
designated above) on the same day that the instruction is provided to you but
your responsibility with respect to any instruction shall not be affected by
your failure to receive such confirmation or by its contents.
You shall be fully protected in, and shall incur no liability to us
for, acting upon any instructions which you in good faith believe to have been
given by any person designated above, and in no event shall you be liable for
special, consequential or punitive damages. In addition, we agree to hold you
and your agents harmless from any and all liability, loss and expense arising
directly or
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indirectly out of instructions that we provide to you in connection with the
Credit Agreement except for liability, loss or expense occasioned by the gross
negligence or willful misconduct of you or your agents.
Upon notice to us, you may, at your option, refuse to execute any
instruction, or part thereof, without incurring any responsibility for any loss,
liability or expense arising out of such refusal if you in good faith believe
that the person delivering the instruction is not one of the persons designated
above or if the instruction is not accompanied by an authentication method that
we have agreed to in writing.
We will promptly notify you in writing of any change in the persons
designated above and, until you have actually received such written notice and
have had a reasonable opportunity to act upon it, you are authorized to act upon
instructions, even though the person delivering them may no longer be
authorized.
Very truly yours,
Monro Muffler Brake, Inc.
By
Name:
Title:
63
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EXHIBIT D
(Letterhead of counsel to the Borrower)
[Closing Date]
The Chase Manhattan Bank, N.A.
Middle Market Department
One Chase Square
Rochester, New York 14643
Attention: Monro Muffler/Brake Account Representative
Fleet Bank
One East Avenue
Rochester, New York 14638
Attention: Monro Muffler/Brake Account Representative
Re: Monro Muffler Brake, Inc., Borrower
Ladies and Gentlemen:
We have acted as counsel to Monro Muffler Brake, Inc., a New
York corporation ("Borrower"), in connection with that certain Credit Agreement
dated February __, 1996 between the Borrower and The Chase Manhattan Bank, N.A.
and Fleet Bank and The Chase Manhattan Bank, N.A. as agent (the "Credit
Agreement"), the form of Revolving Credit Note attached to the Credit Agreement
(the "Credit Note") and the form of Term Loan Note attached to the Credit
Agreement (the "Term Note") (all of such documents and instruments being herein
collectively referred to as the "Loan documents"). As such, we have been
requested to render this opinion to you. Capitalized terms used in this opinion
and not otherwise defined herein shall have the meanings given them by the
Credit Agreement. You are referred to in this opinion as the "Bank(s)."
In our capacity as special counsel to Borrower for the purpose
of the loan transaction described above, we have examined for purposes of
rendering this opinion only: (i) the Loan Documents; (ii) the Certificate of
Incorporation of Borrower and all amendments thereto to date, as certified by
the Department of State of the State of New York on December 19, 1995; (iii) the
By-laws of Borrower and all amendments thereto to date, as so certified by an
officer of Borrower as of this date; (iv) the corporate minute book of Borrower,
certified by
64
- 1 -
an officer of Borrower to be true, correct and complete as of this date; and (v)
the documents referred to in the next following paragraph.
In rendering this opinion, we have made such examination of
laws as we have deemed relevant for the purposes hereof. As to various questions
of fact material to this opinion, we have relied upon representations and/or
certificates of officers of Borrower, a copy of which certificate is annexed to
this opinion as Exhibit A, certificates and documents issued by public officials
and authorities, and information received from searches of public records.
Based upon and in reliance on the foregoing, and subject to
the assumptions and qualifications hereinafter set forth, we are of the opinion
that:
1. Borrower is a corporation duly incorporated and, as of
December 18, 1995, validly existing and in good standing under the laws of the
State of New York. As of the respective dates set forth on Schedule 1 annexed
hereto, borrower is duly qualified to do business and in good standing as a
foreign corporation under the laws of each state set forth on said Schedule 1.
The foregoing opinion is given solely on the basis of certificates of
appropriate state agencies in the states set forth on said Schedule 1. In
determining appropriate state agencies, we have relied, without further inquiry,
on the advice of Accelerated Information & Document Filing, Inc. as to those
agencies from which certificates should be received. The foregoing opinion is
limited to the meaning ascribed to such certificates by each applicable state
agency.
2. Borrower has the corporate power and authority to own or
lease its properties and operate its business as now conducted, and to execute,
deliver and perform its obligations under the Loan Documents to which it is a
party.
3. Borrower's execution and delivery of, and its performance
of its obligations under, the Loan Documents to which it is a party have been
duly authorized by all necessary corporate action on the part of Borrower, and
such Loan Documents have been duly executed and delivered by Borrower.
4. The Loan Documents to which Borrower is a party are the
valid and binding obligations of Borrower, enforceable against Borrower in
accordance with their respective terms.
5. Borrower's execution and delivery of the Loan Documents to
which it is a party, and Borrower's payment of the indebtedness evidenced by the
Loan Documents do not on this date (a) conflict with or result in a breach of
any provision of the Certificate of Incorporation or By-laws of Borrower, or (b)
violate any existing law, rule, regulation or ordinance applicable to Borrower
and affecting the enforceability of any of the Loan Documents to which Borrower
is a party, or (c) to our actual knowledge without independent investigation,
(i) result in a
65
- 2 -
breach of any of the provisions of, or constitute a default under, or result in
the creation or imposition of a lien, charge or encumbrance upon any of the
assets of Borrower pursuant to, any material written agreement or instrument to
which Borrower is a party or by which any of Borrower's assets is bound
(assuming that the laws of each jurisdiction governing such agreement or
instrument are the same as the laws of the State of New York), other than those
agreements or instruments with parties who have consented to Borrower's
execution, delivery and performance of the Loan Documents or (ii) violate any
existing judgment, order, writ, injunction or decree expressly applicable to
Borrower.
6. To our actual knowledge without independent investigation,
there is no action, suit or proceeding pending, or overtly threatened by written
communication, against Borrower or expressly affecting its assets wherein an
unfavorable decision, ruling or finding would have a material adverse effect or
would affect the validity or enforceability of any of the Loan Documents to
which Borrower is a party.
The foregoing opinions are subject to the following
qualifications and are based upon the following further assumptions:
A. We have assumed, without any investigation, with respect to
each party thereto other than Borrower (i) the full capacity, power and
authority of such party to execute, deliver and perform the Loan Documents, (ii)
the due execution and delivery of the Loan Documents by such party, and (iii)
the legality, validity and binding effect of the Loan Documents with respect to
such party.
B. We have assumed without any investigation the genuineness
of all signatures, the legal capacity of natural persons, the authenticity and
completeness of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as certified, photostatic or
telestatic copies, and the authenticity and completeness of the originals of
such copies.
C. To the extent title to any real or personal property is
required to be held by any party in order to perform its obligations under any
of the Loan Documents, we have assumed without any investigation that such party
holds title adequate to perform its obligations.
D. The foregoing opinions are subject to the effect of (i)
applicable bankruptcy, reorganization, insolvency, moratorium and/or similar
laws relating to or affecting the rights of creditors generally, including
without limitation fraudulent conveyance provisions under applicable laws; and
(ii) equitable, constitutional and public policy limitations (regardless of
whether considered in a proceeding in equity or at law). The foregoing opinions
are also subject to the qualification that certain provisions contained in the
Loan Documents may not be enforceable, but (subject to the limitations set forth
elsewhere herein) such unenforceability will not render
66
- 3 -
the Loan Documents invalid as a whole or substantially interfere with
realization of the principal benefits and/or security provided thereby.
E. We express no opinion herein as to (i) whether the
borrowing evidenced by the Loan Documents is usurious under applicable laws;
(ii) the effect of any land use or environmental law, rule, regulation or
ordinance; (iii) the existence or state of title of any real or personal
property which may be the subject of any of the Loan Documents; (iv) the
validity or enforceability of any waiver of service of judicial process, or any
provision of any of the Loan Documents which might be construed as a waiver of
counterclaims; or (v) the Bank(s)'s right to collect any payment due to the
extent that such payment constitutes a penalty, forfeiture or late payment
charge.
We express no opinion with respect to the effect of any law
other than the law of the State of New York, and the Federal law of the United
States, irrespective of any choice of law provisions which may be contained in
any of the Loan Documents.
This opinion is rendered solely to you and is intended solely
for your benefit in connection with the transaction described hereinabove, and
may not be relied upon, referred to or otherwise used by you for any other
purpose, or by any other person or entity.
Very truly yours,
67
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EXHIBIT E
FORM OF NOTICE OF BORROWING
, 19
The Chase Manhattan Bank, N.A.
Metropolitan Department
One Chase Square
Rochester, New York 14643
Attn: Monro Muffler/Brake Account Representative
Re: Credit Agreement dated as of February 7, 1996 (the "Credit
Agreement") among Monro Muffler Brake, Inc., the Lenders named
therein, and The Chase Manhattan Bank, N.A., as Agent for said
Lenders
Greetings:
Please refer to the above-captioned Credit Agreement.
Please take notice that on _________ __, 199_, Monro Muffler
Brake, Inc. shall borrow the sum of $____________ pursuant to and under the
Credit Agreement. The Borrowing shall be comprised of the following {Prime
Loans} [and] (or) Eurodollar Loans:
A Prime Loan in the amount of $______________.
A Eurodollar Loan in the amount of $____________ having a
_________ month interest period commencing on the borrowing date.
A Eurodollar Loan in the amount of $____________ having a
_________ month interest period commencing on the borrowing date.
A Eurodollar Loan in the amount of $____________ having a
_________ month interest period commencing on the borrowing date.
A Eurodollar Loan in the amount of $____________ having a
_________ month interest period commencing on the borrowing date.
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{The foregoing Loan(s) shall replace the Eurodollar Loan(s) in
the principal amount of $____________ having an Interest Period ending on the
proposed borrowing date.}
Very truly yours,
Monro Muffler Brake, Inc.
By
Name:
Title:
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Schedule 4
ERISA Amendments in the event the Borrower or any Subsidiary becomes a
member of a Multiemployer Pension Plan:
1. The definition of Indebtedness shall be amended to include an additional
subclause (6), as follows:
(6) the aggregate amount of Withdrawal Liability incurred by
such Person under MEPPAA as a result of an act or failure to
act by such Person.
2. An additional definitions shall be added as follows:
"MEPPAA" means the Multi-
employer Pension Plan Amendments Acto f 1980 as amended from time to time.
"WITHDRAWAL LIABILITY" shall have the
meaning specified in MEPPAA.
3. An additional subclause (v) to Subsection (h) of Section 9.01 shall be added
as follows:
(v) complete or partial withdrawal under Section 4201 or 4204 of ERISA from a
Multiemployer Plan or the reorganization, insolvency, or termination of any
Multiemployer Plan;