Exhibit 10.22
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CREDIT AGREEMENT
by and among
P.F. CHANG'S CHINA BISTRO, INC.,
as Borrower,
BANK OF AMERICA, N.A.,
as Agent and as Lender
and
THE LENDERS PARTY HERETO FROM TIME TO TIME
December 20, 2002
BANK OF AMERICA SECURITIES LLC,
as Sole Lead Arranger and Sole Book Manager
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS AND TERMS
1.1. Definitions.............................................................. 2
1.2. Rules of Interpretation.................................................. 24
ARTICLE II
THE CREDIT FACILITIES
2.1. Loans.................................................................... 26
2.2. Use of Proceeds.......................................................... 28
2.3. Notes.................................................................... 28
2.4. Discretionary Increase in Total Revolving Credit Commitment.............. 29
ARTICLE III
LETTERS OF CREDIT
3.1. Letters of Credit........................................................ 31
3.2. Reimbursement and Participations......................................... 32
3.3. Existing Letter of Credit................................................ 34
ARTICLE IV
LOAN FUNDING, FEES, AND PAYMENT CONVENTIONS
4.1. Interest Rate Options.................................................... 35
4.2. Conversions and Elections of Subsequent Interest Periods................. 35
4.3. Payment of Interest...................................................... 36
4.4. Prepayments of Eurodollar Rate Loans..................................... 36
4.5. Manner of Payment........................................................ 36
4.6. Fees..................................................................... 37
4.7. Pro Rata Payments........................................................ 37
4.8. Computation of Rates and Fees............................................ 38
4.9. Deficiency Advances; Failure to Purchase Participations.................. 38
4.10. Intraday Funding......................................................... 38
ARTICLE V
SECURITY
5.1. Security................................................................. 39
5.2. Further Assurances....................................................... 39
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ARTICLE VI
CHANGE IN CIRCUMSTANCES
6.1. Increased Cost and Reduced Return........................................ 40
6.2. Limitation on Types of Loans............................................. 41
6.3. Illegality............................................................... 42
6.4. Treatment of Affected Loans.............................................. 42
6.5. Compensation............................................................. 43
6.6. Taxes.................................................................... 43
ARTICLE VII
CONDITIONS TO MAKING LOANS AND ISSUING LETTERS OF CREDIT
7.1. Conditions of Closing and Initial Advance................................ 45
7.2. Conditions of Initial Advance and Letter of Credit Issuances............. 45
7.3. Conditions of Loans and Letter of Credit................................. 47
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES
8.1. Organization and Authority............................................... 48
8.2. Loan Documents........................................................... 49
8.3. Solvency................................................................. 49
8.4. Subsidiaries and Stockholders............................................ 50
8.5. Ownership Interests; Liens............................................... 50
8.6. Financial Condition...................................................... 50
8.7. Title to Properties...................................................... 51
8.8. Taxes.................................................................... 51
8.9. Other Agreements......................................................... 51
8.10. Litigation............................................................... 51
8.11. Margin Stock............................................................. 51
8.12. Investment Company....................................................... 52
8.13. Intellectual Property.................................................... 52
8.14. No Untrue Statement...................................................... 52
8.15. No Consents, Etc......................................................... 52
8.16. Employee Benefit Plans................................................... 53
8.17. No Default............................................................... 54
8.18. Environmental Laws....................................................... 54
8.19. Employment Matters....................................................... 54
8.20. RICO..................................................................... 55
8.21. Operating Facilities..................................................... 55
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ARTICLE IX
AFFIRMATIVE COVENANTS
9.1. Financial Reports, Etc................................................... 55
9.2. Maintain Properties...................................................... 56
9.3. Existence, Qualification, Etc............................................ 57
9.4. Regulations and Taxes.................................................... 57
9.5. Insurance................................................................ 57
9.6. True Books............................................................... 57
9.7. Right of Inspection...................................................... 57
9.8. Observe all Laws......................................................... 58
9.9. Governmental Licenses.................................................... 58
9.10. Covenants Extending to Other Persons..................................... 58
9.11. Officer's Knowledge of Default........................................... 58
9.12. Suits or Other Proceedings............................................... 58
9.13. Notice of Environmental Complaint or Condition........................... 58
9.14. Environmental Compliance................................................. 59
9.15. Indemnification.......................................................... 59
9.16. Further Assurances....................................................... 59
9.17. Employee Benefit Plans................................................... 59
9.18. Continued Operations..................................................... 60
9.19. New Subsidiaries......................................................... 60
9.20. Certain Notices.......................................................... 61
9.21. Information Regarding Operating Facilities............................... 62
ARTICLE X
NEGATIVE COVENANTS
10.1. Financial Covenants...................................................... 62
10.2. Acquisitions............................................................. 62
10.3. Liens.................................................................... 62
10.4. Indebtedness............................................................. 63
10.5. Transfer of Assets....................................................... 64
10.6. Investments.............................................................. 65
10.7. Merger or Consolidation.................................................. 65
10.8. Restricted Payments...................................................... 66
10.9. Transactions with Affiliates............................................. 66
10.10. Compliance with ERISA, the Code and Foreign Benefit Laws................. 66
10.11. Fiscal Year.............................................................. 67
10.12. Dissolution, etc......................................................... 67
10.13. Limitations on Sales and Leasebacks...................................... 67
10.14. Change in Control........................................................ 67
10.15. Rate Hedging Obligations................................................. 67
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10.16. Negative Pledge Clauses.................................................. 67
10.17. Prepayments, Etc. of Indebtedness........................................ 67
10.18. Amendments to Operating Agreements....................................... 68
10.19. Inactive Subsidiaries.................................................... 68
ARTICLE XI
EVENTS OF DEFAULT AND ACCELERATION
11.1. Events of Default........................................................ 68
11.2. Agent to Act............................................................. 71
11.3. Cumulative Rights........................................................ 72
11.4. No Waiver................................................................ 72
11.5. Allocation of Proceeds................................................... 72
ARTICLE XII
THE AGENT
12.1. Appointment and Authorization of Agent................................... 73
12.2. Delegation of Duties..................................................... 73
12.3. Liability of Agent....................................................... 73
12.4. Reliance by Agent........................................................ 74
12.5. Notice of Default........................................................ 74
12.6. Credit Decision; Disclosure of Information by Agent...................... 74
12.7. Indemnification of Agent................................................. 75
12.8. Agent in its Individual Capacity......................................... 75
12.9. Successor Agent.......................................................... 76
12.10. Agent May File Proofs of Claim........................................... 76
12.11. Collateral and Guaranty Matters.......................................... 77
12.12. Other Agents; Arrangers and Managers..................................... 77
12.13. Sole Lender.............................................................. 78
ARTICLE XIII
MISCELLANEOUS
13.1. Successors and Assigns................................................... 78
13.2. Notices and Other Communications; Facsimile Copies....................... 81
13.3. Right of Set-off; Adjustments............................................ 83
13.4. Survival................................................................. 83
13.5. Attorney Costs, Expenses and Taxes....................................... 84
13.6. Amendments, Etc.......................................................... 84
13.7. Counterparts............................................................. 85
13.8. Termination.............................................................. 85
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13.9. Indemnification by the Borrower.......................................... 86
13.10. Severability............................................................. 87
13.11. Entire Agreement......................................................... 87
13.12. Agreement Controls....................................................... 87
13.13. Usury Savings Clause..................................................... 87
13.14. Payments................................................................. 88
13.15. Governing Law; Waiver of Jury Trial...................................... 88
13.16. Confidentiality.......................................................... 89
EXHIBIT A Applicable Commitment Percentage..................................... A-1
EXHIBIT B Form of Assignment and Assumption.................................... B-1
EXHIBIT C Notice of Appointment (or Revocation) of Authorized Representative... C-1
EXHIBIT D Form of Borrowing Notice............................................. D-1
EXHIBIT E Form of Interest Rate Selection Notice............................... E-1
EXHIBIT F Form of Note......................................................... F-1
EXHIBIT G Form of Opinion of Borrower's Counsel................................ G-1
EXHIBIT H Compliance Certificate............................................... H-1
EXHIBIT I Form of Facility Guaranty............................................ I-1
EXHIBIT J Form of Security Agreement........................................... J-1
EXHIBIT K Form of Pledge Agreement............................................. K-1
EXHIBIT L Form of LC Account Agreement......................................... L-1
EXHIBIT M Form of Assignment of Trademarks..................................... M-1
Schedules......................................................................... S-1
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of December 20, 2002 (the "Agreement"),
is made by and among P.F. CHANG'S CHINA BISTRO, INC., a Delaware corporation
having its principal place of business in Phoenix, Arizona (the "Borrower"),
BANK OF AMERICA, N.A., a national banking association organized and existing
under the laws of the United States, in its capacity as a Lender ("Bank of
America"), and each other financial institution which may hereafter execute and
deliver an instrument of assignment with respect to this Agreement pursuant to
Section 13.1 (hereinafter such financial institutions may be referred to
individually as a "Lender" or collectively as the "Lenders"), and BANK OF
AMERICA, N.A., a national banking association organized and existing under the
laws of the United States, in its capacity as agent for the Lenders (in such
capacity, and together with any successor agent appointed in accordance with the
terms of Section 12.7, the "Agent");
W I T N E S S E T H:
WHEREAS, the Borrower, the Agent and Bank of America as lender have
agreed to make available to the Borrower a revolving credit facility of up to
$20,000,000, the proceeds of which are to be used for general corporate
purposes, including without limitation working capital and capital expenditures,
and which include a letter of credit facility of up to $5,000,000 for the
issuance of standby letters of credit; and
WHEREAS, the Lenders and the Agent are willing to make the revolving
credit and letter of credit facilities available to the Borrower upon the terms
and conditions set forth herein;
NOW, THEREFORE, the Borrower, the Lenders and the Agent hereby agree as
follows:
ARTICLE I
Definitions and Terms
1.1. Definitions. For the purposes of this Agreement, in addition
to the definitions set forth above, the following terms shall have the
respective meanings set forth below:
"Acquisition" means the acquisition of (i) a Controlling
equity interest in another Person (including the purchase of an option,
warrant or convertible or similar type security to acquire such a
controlling interest at the time it becomes exercisable by the holder
thereof), whether by purchase of such equity interest or upon exercise
of an option or warrant for, or conversion of securities into, such
equity interest, or (ii) assets of another Person which constitute all
or any material part of the assets of such Person or of a line or lines
of business conducted by such Person; provided, however, that the
repurchase of the Management Securities of chefs, managers and/or
regional managers shall not constitute Acquisitions hereunder.
"Adjusted Consolidated Indebtedness to EBITDAR Ratio" means,
as of the date of computation thereof, the ratio of (i) Consolidated
Indebtedness (determined as at such date) plus eight (8) times the
Consolidated Lease Payments (for the Four-Quarter Period ending on (or
most recently ended prior to) such date) to (ii) Consolidated EBITDAR
(for the Four-Quarter Period ending on (or most recently ended prior
to) such date).
"Advance" means a borrowing under the Revolving Credit
Facility consisting of a Base Rate Loan or a Eurodollar Rate Loan.
"Affiliate" means any Person (i) which directly or indirectly
through one or more intermediaries Controls, or is Controlled by, or is
under common Control with the Borrower; or (ii) which beneficially owns
or holds 10% or more of any class of the outstanding voting stock (or
in the case of a Person which is not a corporation, 10% or more of the
equity interest) of the Borrower; or 10% or more of any class of the
outstanding voting stock (or in the case of a Person which is not a
corporation, 10% or more of the equity interest) of which is
beneficially owned or held by the Borrower.
"Agent-Related Persons" means the Agent, together with its
Affiliates, and the officers, directors, employees, agents and
attorneys-in-fact of such Persons and Affiliates.
"Allowable Distributions" means (a) distributions to the
Borrower or holders of Management Securities issued by partnership or
limited liability company Subsidiaries of the Borrower (each, a
"Reporting Entity") on or about 15 days prior to the due date for any
tax return (including quarterly tax estimates) for each fiscal year in
amounts sufficient to enable each such holder to discharge any Federal,
state and local income tax liability of such minority investor arising
as a result of the operations of the Reporting Entity in which it owns
such minority interest, determined by assuming the applicability to
each minority investor of the highest combined effective marginal
Federal, state and local income tax rates; provided that if any
Reporting Entity is not a partnership or a limited liability company
classified for taxation purposes as a "partnership" within the
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meaning of the Code as of the last day of such fiscal year, then
Allowable Distributions attributable to the operations of such
Reporting Entity during such fiscal year shall be equal to zero, (b)
distributions to the Borrower or holders of Management Securities
issued by a Reporting Entity representing the distribution of Net Cash
Flow (as defined in the Operating Agreement) to the holders of
Management Securities in accordance with the Operating Agreement of
such Reporting Entity, and (c) distributions of cash, the common stock
of the Borrower or, to the extent permitted under Section 10.4, of
promissory notes issued by the Borrower to any holder of Management
Securities as payment to repurchase or redeem in whole all such
Management Securities held by such holder, provided that there is no
Default or Event of Default at the time of any such distribution to a
holder and that no Default or Event of Default would occur as a result
of the making of such distribution, including without limitation any
Default or Event of Default as a result of noncompliance with Sections
10.1 and 10.4.
"Applicable Commitment Fee" means that percent per annum set
forth in the chart contained in the definition of "Applicable Margin"
listed below, which shall be based upon the Consolidated Leverage Ratio
for the Four-Quarter Period most recently ended as specified in such
chart. The Applicable Commitment Fee shall be established at each
Determination Date. Any change in the Applicable Commitment Fee
following each Determination Date shall be determined based upon the
computations set forth in the certificate furnished to the Agent
pursuant to Section 9.1(a)(ii) and Section 9.1(b)(ii), subject to
review and approval of such computations by the Agent and shall be
effective commencing on the fifth Business Day following the date such
certificate is received until the fifth Business Day following the date
on which a new certificate is delivered or is required to be delivered,
whichever shall first occur; provided however, if the Borrower shall
fail to deliver any such certificate within the time period required by
Section 9.1, then the Applicable Commitment Fee shall be Tier III from
the date such certificate was due until the appropriate certificate is
so delivered. From the Closing Date to the effective date of the
calculation of the Applicable Commitment Fee with respect to the first
Determination Date, the Applicable Commitment Fee shall be Tier I.
"Applicable Commitment Percentage" means, for each Lender at
any time, a fraction, with respect to the Revolving Credit Facility and
the Letter of Credit Facility, the numerator of which shall be such
Lender's Revolving Credit Commitment and the denominator of which shall
be the Total Revolving Credit Commitment, which Applicable Commitment
Percentage for each Lender as of the Closing Date is as set forth in
Exhibit A; provided that the Applicable Commitment Percentage of each
Lender shall be increased or decreased to reflect any assignments to or
by such Lender effected in accordance with Section 13.1.
"Applicable Lending Office" means, for each Lender and for
each Type of Loan, the "Lending Office" of such Lender (or of an
affiliate of such Lender) designated for such Type of Loan on the
signature pages hereof or such other office of such Lender (or an
affiliate of such Lender) as such Lender may from time to time specify
to the Agent and the Borrower by written notice in accordance with the
terms hereof as the office by which its Loans of such Type are to be
made and maintained.
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"Applicable Margin" means that percent per annum set forth
below, which shall be based upon the Consolidated Leverage Ratio for
the Four-Quarter Period most recently ended as specified below:
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APPLICABLE
CONSOLIDATED COMMITMENT BASE RATE EURODOLLAR
TIER LEVERAGE RATIO FEE MARGIN MARGIN
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I < 0.5 .35% .25% 1.25%
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II >= 0.5 but < 1.5 .40% .50% 1.50%
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III >= 1.5 .50% 1.00% 2.00%
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The Applicable Margin shall be established at the end of each fiscal
quarter of the Borrower (each, a "Determination Date"). Any change in
the Applicable Margin following each Determination Date shall be
determined based upon the computations set forth in the certificate
furnished to the Agent pursuant to Section 9.1(a)(ii) and Section
9.1(b)(ii), subject to review and approval of such computations by the
Agent, and shall be effective commencing on the fifth Business Day
following the date such certificate is received until the fifth
Business Day following the date on which a new certificate is delivered
or is required to be delivered, whichever shall first occur; provided
however, if the Borrower shall fail to deliver any such certificate
within the time period required by Section 9.1, then the Applicable
Margin shall be Tier III for Base Rate Loans and for Eurodollar Rate
Loans from the date such certificate was due until the appropriate
certificate is so delivered. From the Closing Date to the effective
date of the calculation of the Applicable Margin with respect to the
first Determination Date, the Applicable Margin shall be Tier I for
Base Rate Loans and Tier I for Eurodollar Rate Loans.
"Applications and Agreements for Letters of Credit" means,
collectively, the Applications and Agreements for Letters of Credit, or
similar documentation, executed by the Borrower from time to time and
delivered to the Issuing Bank to support the issuance of Letters of
Credit.
"Asset Disposition" means any voluntary disposition, whether
by sale, lease or transfer, of (a) any of the assets, excluding cash
and cash equivalents, of the Borrower or its Subsidiaries, and (b) any
of the capital stock, or securities or investments exchangeable,
exercisable or convertible for or into, or otherwise entitling the
holder to receive any of the capital stock, of any Subsidiary (other
than a disposition to a Guarantor).
"Assignment and Assumption" shall mean an Assignment and
Assumption in the form of Exhibit B (with blanks appropriately filled
in) delivered to the Agent in connection with an assignment of a
Lender's interest under this Agreement pursuant to Section 13.1.
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"Assignment of Trademarks" means that certain Assignment of
Trademarks dated as of the Closing Date by the Borrower to the Agent
substantially in the form of Exhibit M as hereafter amended,
supplemented or replaced from time to time.
"Attorney Costs" means and includes all fees, expenses and
disbursements of any law firm or other external counsel and, without
duplication, the allocated cost of internal legal services and all
expenses and disbursements of internal counsel.
"Authorized Representative" means any of the President or any
Vice President of the Borrower or, with respect to financial matters,
the chief financial officer of the Borrower, or any other Person
expressly designated by the Board of Directors of the Borrower (or the
appropriate committee thereof) as an Authorized Representative of the
Borrower, as set forth from time to time in a certificate in the form
of Exhibit C.
"Bank of America" means Bank of America, N.A.
"BAS" means Banc of America Securities LLC and its successors.
"Base Rate" means for any day a fluctuating rate per annum
equal to the sum of (a) the higher of (i) the Federal Funds Rate for
such day plus 1/2 of 1% and (ii) the rate of interest in effect for
such day as publicly announced from time to time by Bank of America as
its "prime rate" plus (b) the Applicable Margin. The "prime rate" is a
rate set by Bank of America based upon various factors including Bank
of America's costs and desired return, general economic conditions and
other factors, and is used as a reference point for pricing some loans,
which may be priced at, above, or below such announced rate. Any change
in such rate announced by Bank of America shall take effect at the
opening of business on the day specified in the public announcement of
such change.
"Base Rate Loan" means a Loan for which the rate of interest
is determined by reference to the Base Rate.
"Base Rate Refunding Loan" means a Base Rate Loan made to
satisfy Reimbursement Obligations arising from a drawing under a Letter
of Credit.
"Board" means the Board of Governors of the Federal Reserve
System (or any successor body).
"Borrower's Account" means a demand deposit account number
[3751410250] or any successor account with the Agent, which may be
maintained at one or more offices of the Agent or an agent of the
Agent.
"Borrowing Notice" means the notice delivered by an Authorized
Representative in connection with an Advance under the Revolving Credit
Facility in the form of Exhibit D.
"Business Day" means, (i) except as expressly provided in
clause (ii), any day which is not a Saturday, Sunday or a day on which
banks in the States of Arizona, New York and North Carolina are
authorized or obligated by law, executive order or
5
governmental decree to be closed and, (ii) with respect to the
selection, funding, interest rate, payment, and Interest Period of any
Eurodollar Rate Loan, any day which is a Business Day, as described
above, and on which the relevant international financial markets are
open for the transaction of business contemplated by this Agreement in
Phoenix, Arizona, London, England, New York, New York and Charlotte,
North Carolina.
"Capital Leases" means all leases which have been or should be
capitalized in accordance with GAAP as in effect from time to time
including Statement No. 13 of the Financial Accounting Standards Board
and any successor thereof.
"Change of Control" means, at any time:
(i) any "person" or "group" (each as used in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act) either (A)
becomes the "beneficial owner" (as defined in Rule 13d-3 of
the Exchange Act ), directly or indirectly, of Voting
Securities of the Borrower (or securities convertible into or
exchangeable for such Voting Securities) representing 33-1/3%
or more of the combined voting power of all Voting Securities
of the Borrower (on a fully diluted basis) or (B) otherwise
has the ability, directly or indirectly, to elect a majority
of the board of directors of the Borrower; or
(ii) any Person or two or more Persons acting in
concert shall have acquired by contract or otherwise, or shall
have entered into a contract or arrangement that, upon
consummation thereof, will result in its or their acquisition
of the power to exercise, directly or indirectly, a
controlling influence on the management or policies of the
Borrower.
"Closing Date" means the date as of which this Agreement is
executed by the Borrower, the Lenders and the Agent and on which the
conditions set forth in Section 7.1 have been satisfied.
"Code" means the Internal Revenue Code of 1986, as amended,
and any regulations promulgated thereunder.
"Collateral" means, collectively, all property of the
Borrower, any Subsidiary or any other Person in which the Agent or any
Lender is now or hereafter granted a Lien as security for all or any
portion of the Obligations under any Security Instrument.
"Consistent Basis" in reference to the application of GAAP
means the accounting principles observed in the period referred to are
comparable in all material respects to those applied in the preparation
of the audited financial statements of the Borrower referred to as of
the Closing Date in Section 8.6(a).
"Consolidated EBITDA" means, with respect to the Borrower and
its Subsidiaries for any Four-Quarter Period ending on the date of
computation thereof, the sum of, without duplication, (i) Consolidated
Net Income, (ii) Consolidated Interest Expense, (iii)
6
taxes on income, (iv) amortization, and (v) depreciation, all
determined on a consolidated basis in accordance with GAAP applied on a
Consistent Basis.
"Consolidated EBITDAR" means, with respect to the Borrower and
its Subsidiaries for any Four-Quarter Period ending on the date of
computation thereof, the sum of, without duplication, (i) Consolidated
Net Income, (ii) Consolidated Interest Expense, (iii) taxes on income,
(iv) amortization, (v) depreciation and (vi) Consolidated Lease
Payments made during such period, all determined on a consolidated
basis in accordance with GAAP applied on a Consistent Basis.
"Consolidated EBIR" means, with respect to the Borrower and
its Subsidiaries for any Four-Quarter Period ending on the date of
computation thereof, the sum of, without duplication, (i) Consolidated
Net Income, (ii) Consolidated Interest Expense, (iii) Consolidated
Lease Payments made during such period, and (iv) all Allowable
Distributions made during such period.
"Consolidated Fixed Charge Ratio" means, with respect to the
Borrower and its Subsidiaries for any Four-Quarter Period ending on the
date of computation thereof, the ratio of (i) Consolidated EBIR for
such period, to (ii) Consolidated Fixed Charges for such period.
"Consolidated Fixed Charges" means, with respect to the
Borrower and its Subsidiaries for any Four-Quarter Period ending on the
date of computation thereof, the sum of, without duplication, (i)
Consolidated Interest Expense, (ii) current maturities of the principal
amount of Consolidated Indebtedness, (iii) Consolidated Lease Payments
for such period, and (iv) all cash Allowable Distributions for such
period all determined on a consolidated basis in accordance with GAAP
applied on a Consistent Basis.
"Consolidated Indebtedness" means all Indebtedness for Money
Borrowed of the Borrower and its Subsidiaries, all determined on a
consolidated basis.
"Consolidated Interest Expense" means, with respect to any
period of computation thereof, the gross interest expense of the
Borrower and its Subsidiaries, including without limitation (i) the
current amortized portion of debt discounts to the extent included in
gross interest expense, (ii) the current amortized portion of all fees
(including fees payable in respect of any Rate Hedging Obligation)
payable in connection with the incurrence of Indebtedness to the extent
included in gross interest expense and (iii) the portion of any
payments made in connection with Capital Leases allocable to interest
expense, all determined on a consolidated basis in accordance with GAAP
applied on a Consistent Basis.
"Consolidated Lease Payments" means the gross amount of all
lease or rental payments, whether or not characterized as rent, without
duplication, of the Borrower and its Subsidiaries, excluding payments
in respect of Capital Leases constituting Indebtedness, all determined
on a consolidated basis in accordance with GAAP applied on a Consistent
Basis.
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"Consolidated Leverage Ratio" means, as of the date of
computation thereof, the ratio of (i) Consolidated Indebtedness
(determined as at such date) to (ii) Consolidated EBITDA (for the
Four-Quarter Period ending on (or most recently ended prior to) such
date).
"Consolidated Net Income" means, for any period of computation
thereof, the gross revenues from operations of the Borrower and its
Subsidiaries (including payments received by the Borrower and its
Subsidiaries of (i) interest income and (ii) dividends and
distributions made in the ordinary course of their businesses by
Persons in which investment is permitted pursuant to this Agreement and
not related to an extraordinary event), less all operating and
non-operating expenses (including all cash amounts added to reserves
for charges in respect of closing under-performing restaurants) of the
Borrower and its Subsidiaries including taxes on income, all determined
on a consolidated basis in accordance with GAAP applied on a Consistent
Basis; but excluding (for all purposes other than compliance with
Section 10.1(a) hereof) as income: (i) net gains on the sale,
conversion or other disposition of capital assets, (ii) net gains on
the acquisition, retirement, sale or other disposition of capital stock
and other securities of the Borrower or its Subsidiaries, (iii) net
gains on the collection of proceeds of life insurance policies, (iv)
any write-up of any asset, (v) one time non-cash charges associated
with closing under-performing restaurants and (vi) any other net gain
or credit of an extraordinary nature (other than proceeds of business
interruption insurance) all as determined in accordance with GAAP
applied on a Consistent Basis.
"Consolidated Shareholders' Equity" means, as of any date on
which the amount thereof is to be determined, the sum of the following
in respect of the Borrower and its Subsidiaries (determined on a
consolidated basis and excluding any upward adjustment after the
Closing Date due to revaluation of assets): (i) the amount of issued
and outstanding share capital, plus (ii) the amount of additional
paid-in capital and retained earnings (or, in the case of a deficit,
minus the amount of such deficit), plus (iii) the amount of any foreign
currency translation adjustment (if positive, or, if negative, minus
the amount of such translation adjustment), minus (iv) the amount of
any treasury stock, all as determined in accordance with GAAP applied
on a Consistent Basis.
"Consolidated Tangible Net Worth" means, as of any date on
which the amount thereof is to be determined, Consolidated
Shareholders' Equity minus (without duplication of deductions in
respect of items already deducted in arriving at surplus and retained
earnings) (i) all reserves (other than contingency reserves not
allocated to any particular purpose), including without limitation
reserves for depreciation, depletion, amortization, obsolescence,
deferred income taxes, insurance and inventory valuation, and (ii) the
net book value of all assets which would be treated as intangible
assets, such as (without limitation) goodwill (whether representing the
excess of cost over book value of assets acquired or otherwise),
capitalized expenses, unamortized debt discount and expense,
consignment inventory rights, patents, trademarks, trade names,
copyrights, franchises and licenses, all as determined on a
consolidated basis in accordance with GAAP applied on a Consistent
Basis.
8
"Contingent Obligation" means, as to any Person, any direct or
indirect liability of that Person with respect to any Indebtedness,
lease, dividend, guaranty, letter of credit or other obligation (each a
"primary obligation") of another Person (the "primary obligor"),
whether or not contingent, (a) to purchase, repurchase or otherwise
acquire any such primary obligation or any property constituting direct
or indirect security therefor, or (b) to advance or provide funds (i)
for the payment or discharge of any such primary obligation, or (ii) to
maintain working capital or equity capital of the primary obligor in
respect of any such primary obligation or otherwise to maintain the net
worth or solvency or any balance sheet item, level of income or
financial condition of such primary obligor, or (c) to purchase
property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary
obligor thereof to make payment of such primary obligation, or (d)
otherwise to assure or hold harmless the owner of any such primary
obligation against loss or failure or inability to perform in respect
thereof. The amount of any Contingent Obligation shall be deemed to be
an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Contingent Obligation is made or,
if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof.
"Continue", "Continuation", and "Continued" shall refer to the
continuation pursuant to Section 4.2 hereof of a Eurodollar Rate Loan
of one Type as a Eurodollar Rate Loan of the same Type from one
Interest Period to the next Interest Period.
Control" or "Controlled" or "Controlling" 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
ownership of voting stock or by contract.
"Convert", "Conversion", and "Converted" shall refer to a
conversion pursuant to Section 4.2 of one Type of Loan into another
Type of Loan.
"Credit Parties" means, collectively, the Borrower, each
Guarantor and each other Person providing Collateral pursuant to any
Security Instrument.
"Default" means any event or condition which, with the giving
or receipt of notice or lapse of time or both, would constitute an
Event of Default hereunder.
"Default Rate" means (i) with respect to each Eurodollar Rate
Loan, until the end of the Interest Period applicable thereto, a rate
of two percent (2%) above the Eurodollar Rate applicable to such Loan,
and thereafter at a rate of interest per annum which shall be two
percent (2%) above the Base Rate, (ii) with respect to Base Rate Loans,
Reimbursement Obligations, fees, and other amounts payable in respect
of Obligations or (except as otherwise expressly provided therein) the
obligations of any other Credit Party under any of the other Loan
Documents, a rate of interest per annum which shall be two percent (2%)
above the Base Rate, and (iii) in any case, the maximum rate permitted
by applicable law, if lower.
9
"Determination Date" shall have the meaning given to such term
in the definition of "Applicable Margin".
"Discretionary Commitment" means the commitment of any
Discretionary Facility Lender to increase the Total Revolving Credit
Commitment pursuant to Section 2.4.
"Discretionary Commitment Effective Date" shall have the
meaning provided therefor in Section 2.4(c).
"Discretionary Commitment Notice" shall have the meaning
provided therefor in Section 2.4(c).
"Discretionary Commitment Request" shall have the meaning
provided therefor in Section 2.4(b).
"Discretionary Facility" means the increase in the Total
Revolving Credit Commitment pursuant to Section 2.4(e).
"Discretionary Facility Lender" shall have the meaning
provided therefor in Section 2.4(e).
"Dollars" and the symbol "$" means dollars constituting legal
tender for the payment of public and private debts in the United States
of America.
"Eligible Assignee" shall have the meaning provided therefore
in Section 13.1.
"Eligible Securities" means the following obligations and any
other obligations previously approved in writing by the Agent:
(a) Government Securities;
(b) obligations of any corporation organized
under the laws of any state of the United States of America or
under the laws of any other nation, payable in the United
States of America, expressed to mature not later than 92 days
following the date of issuance thereof and rated in an
investment grade rating category by S&P and Moody's;
(c) interest bearing demand or time deposits
issued by any Lender or certificates of deposit maturing
within one year from the date of issuance thereof and issued
by a bank or trust company organized under the laws of the
United States or of any state thereof having capital surplus
and undivided profits aggregating at least $400,000,000 and
being rated "A" or better by S&P or "A" or better by Moody's;
(d) Repurchase Agreements;
10
(e) Municipal Obligations;
(f) Pre-Refunded Municipal Obligations;
(g) shares of mutual funds which invest in
obligations described in paragraphs (a) through (f) above, the
shares of which mutual funds are at all times rated "AAA" by
S&P;
(h) tax-exempt or taxable adjustable rate
preferred stock issued by a Person having a rating of its long
term unsecured debt of "A-" or better by S&P or "A-3" or
better by Moody's; and
(i) asset-backed remarketed certificates of
participation representing a fractional undivided interest in
the assets of a trust, which certificates are rated at least
"A-1" by S&P and "P-1" by Moody's.
"Employee Benefit Plan" means (i) any employee benefit plan,
including any Pension Plan, within the meaning of Section 3(3) of ERISA
which (A) is maintained for employees of the Borrower or any of its
ERISA Affiliates, or any Subsidiary or is assumed by the Borrower or
any of its ERISA Affiliates, or any Subsidiary in connection with any
Acquisition or (B) has at any time been maintained for the employees of
the Borrower, any current or former ERISA Affiliate, or any Subsidiary
and (ii) any plan, arrangement, understanding or scheme maintained by
the Borrower or any Subsidiary that provides retirement, deferred
compensation, employee or retiree medical or life insurance, severance
benefits or any other benefit covering any employee or former employee
and which is administered under any Foreign Benefit Law or regulated by
any Governmental Authority other than the United States of America.
"Environmental Laws" means any federal, state or local
statute, law, ordinance, code, rule, regulation, order, decree, permit
or license regulating, relating to, or imposing liability or standards
of conduct concerning, any environmental matters or conditions,
environmental protection or conservation, including without limitation,
the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended; the Superfund Amendments and Reauthorization
Act of 1986, as amended; the Resource Conservation and Recovery Act, as
amended; the Toxic Substances Control Act, as amended; the Clean Air
Act, as amended; the Clean Water Act, as amended; together with all
regulations promulgated thereunder, and any other "Superfund" or
"Superlien" law.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute and all
rules and regulations promulgated thereunder.
"ERISA Affiliate", as applied to the Borrower, means any
Person or trade or business which is a member of a group which is under
common control with the
11
Borrower, who together with the Borrower, is treated as a single
employer within the meaning of Section 414(b) and (c) of the Code.
"Eurodollar Rate Loan" means a Loan for which the rate of
interest is determined by reference to the Eurodollar Rate.
"Eurodollar Rate" means the interest rate per annum calculated
according to the following formula:
Eurodollar = Interbank Offered Rate + Applicable
---------------------------
Rate 1- Reserve Requirement Margin
"Event of Default" means any of the occurrences set forth as
such in Section 11.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the regulations promulgated thereunder.
"Existing Letter of Credit" means that certain standby letter
of credit number 3026355 issued for the account of the Borrower by Bank
of America, N.A. for the benefit of Wake County Board of Alcohol in the
current stated amount of $5,160.00 with a maturity date of June 11,
2003.
"Facility Guaranty" means that certain Guaranty Agreement
dated as of the Closing Date between the Guarantors then existing and
the Agent for the benefit of the Agent and the Lenders and any
additional Guaranty Agreement or Guaranty Joinder delivered to the
Agent by a Subsidiary pursuant to Sections 5.1 or 9.19, in each case as
hereafter amended, supplemented or replaced from time to time.
"Facility Termination Date" means such date as all of the
following shall have occurred: (a) the Borrower shall have permanently
terminated the Revolving Credit Facility by payment in full of all
Revolving Credit Outstandings and Letter of Credit Outstandings,
together with all accrued and unpaid interest thereon, except for the
undrawn portion of Letters of Credit as have been fully cash
collateralized in a manner consistent with the terms of Section
11.1(B), (b) all Swap Agreements shall have been terminated, expired or
cash collateralized, (c) all Revolving Credit Commitments and Letter of
Credit Commitments shall have terminated or expired, and (d) the
Borrower shall have fully, finally and irrevocably paid and satisfied
in full all Obligations (other than Obligations consisting of
continuing indemnities and other contingent Obligations of the Borrower
or any Guarantor that may be owing to the Lenders pursuant to the Loan
Documents and expressly survive termination of this Agreement);
"FASB 133 Adjustments" means entries on or adjustments to any
balance sheet or statement of income in respect of derivatives or
hedging instruments as required or permitted by Statement of Financial
Accounting Standards No. 133.
12
"Federal Funds Rate" means, for any day, the rate per annum
equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published by the Federal Reserve
Bank on the Business Day next succeeding such day; provided that (a) if
such day is not a Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Business
Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the
Federal Funds Rate for such day shall be the average rate (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to
Bank of America on such day on such transactions as determined by the
Agent.
"Fiscal Year" means the twelve month fiscal period of the
Borrower and its Subsidiaries commencing on January 1 of each calendar
year and ending on December 31 of each calendar year.
"Foreign Benefit Law" means any applicable statute, law,
ordinance, code, rule, regulation, order or decree of any foreign
nation or any province, state, territory, protectorate or other
political subdivision thereof regulating, relating to, or imposing
liability or standards of conduct concerning, any Employee Benefit
Plan.
"Four-Quarter Period" means a period of four full consecutive
fiscal quarters of the Borrower and its Subsidiaries, taken together as
one accounting period.
"Funding Date" means the date not later than January 31, 2002
as of which the conditions set forth in Section 7.2 have been
satisfied.
"GAAP" or "Generally Accepted Accounting Principles" means
generally accepted accounting principles, being those principles of
accounting set forth in pronouncements of the Financial Accounting
Standards Board, the American Institute of Certified Public
Accountants, or which have other substantial authoritative support and
are applicable in the circumstances as of the date of a report.
"Government Securities" means direct obligations of, or
obligations the timely payment of principal and interest on which are
fully and unconditionally guaranteed by, the United States of America.
"Governmental Authority" shall mean any Federal, state,
municipal, national or other governmental department, commission,
board, bureau, court, agency or instrumentality or political
subdivision thereof or any entity or officer exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to any government or any court, in each case whether
associated with a state of the United States, the United States, or a
foreign entity or government.
"Guarantors" means, at any date, the Subsidiaries who are
required to be parties to a Facility Guaranty at such date.
13
"Guaranty Joinder" means, with respect to each Facility
Guaranty, the Guaranty Joinder affixed as an exhibit to such Facility
Guaranty.
"Hazardous Material" means and includes any pollutant,
contaminant, or hazardous, toxic or dangerous waste, substance or
material (including without limitation petroleum products,
asbestos-containing materials and lead), the generation, handling,
storage, transportation, disposal, treatment, release, discharge or
emission of which is subject to any Environmental Law.
"Inactive Subsidiaries" means P.F. Chang's II, Inc., an
Arizona corporation (in dissolution), P.F. Chang's IV, L.L.C., an
Arizona limited liability company (terminated), P.F. Chang's VI, Inc.,
an Arizona corporation (in dissolution), PFCCB Management, Inc., an
Arizona corporation (in dissolution), Fleming/PFC III Corp, an Arizona
corporation (in dissolution), and Fleming Chinese Retaurants, Inc., a
(dissolved) Arizona corporation.
"Indebtedness" means as to any Person, without duplication,
(a) all Indebtedness for Money Borrowed of such Person, (b) all Rate
Hedging Obligations of such Person, (c) all indebtedness secured by any
Lien (other than Liens securing repayment of tenant improvement
allowances) on any property or asset owned or held by such Person
regardless or whether the indebtedness secured thereby shall have been
assumed by such Person or is non-recourse to the credit of such Person,
and (d) all Contingent Obligations of such Person.
"Indebtedness for Money Borrowed" means with respect to any
Person, without duplication, all indebtedness in respect of money
borrowed, including without limitation, all obligations under Capital
Leases, the deferred purchase price of any property or services, and
payment and reimbursement obligations in respect of surety bonds,
letters of credit, and bankers' acceptances, whether or not matured,
evidenced by a promissory note, bond, debenture or similar written
obligation for the payment of money (including reimbursement agreements
and conditional sales or similar title retention agreements), other
than trade payables, tenant improvement allowances and accrued expenses
incurred in the ordinary course of business.
"Indemnified Liabilities" has the meaning set forth in Section
13.9.
"Indemnitees" has the meaning set forth in Section 13.9.
"Intellectual Property" means for any Person all patents
(including all applications, renewals, reissues, extensions, divisions,
continuations and extensions thereof), trademarks (including both
registered and unregistered trademarks and applications therefor),
service marks, trade names, copyrights (including all registrations,
renewals, modifications and extensions thereof), know-how and trade
secrets of material importance to the conduct of such Person's
business.
"Interbank Offered Rate" means for any Interest Period with
respect to any Eurodollar Rate Loan:
14
(a) the rate per annum equal to the rate
determined by the Agent to be the offered rate that appears on
the page of the Telerate screen (or any successor thereto)
that displays an average British Bankers Association Interest
Settlement Rate for deposits in Dollars (for delivery on the
first day of such Interest Period) with a term equivalent to
such Interest Period, determined as of approximately 11:00
a.m. (London time) two Business Days prior to the first day of
such Interest Period, or
(b) if the rate referenced in the preceding
clause (a) does not appear on such page or service or such
page or service shall not be available, the rate per annum
equal to the rate determined by the Agent to be the offered
rate on such other page or other service that displays an
average British Bankers Association Interest Settlement Rate
for deposits in Dollars (for delivery on the first day of such
Interest Period) with a term equivalent to such Interest
Period, determined as of approximately 11:00 a.m. (London
time) two Business Days prior to the first day of such
Interest Period, or
(c) if the rates referenced in the preceding
clauses (a) and (b) are not available, the rate per annum
determined by the Agent as the rate of interest at which
deposits in Dollars for delivery on the first day of such
Interest Period in same day funds in the approximate amount of
the Eurodollar Rate Loan being made, continued or converted by
Bank of America and with a term equivalent to such Interest
Period would be offered by Bank of America's London Branch to
major banks in the London interbank eurodollar market at their
request at approximately 4:00 p.m. (London time) two Business
Days prior to the first day of such Interest Period.
"Interest Period" means, for each Eurodollar Rate Loan, a
period commencing on the date such Eurodollar Rate Loan is made or
Converted or Continued and ending, at the Borrower's option, on the
date one, two, three or six months thereafter as notified to the Agent
by the Authorized Representative in accordance with the terms hereof;
provided that,
(i) if an Interest Period for a Eurodollar Rate
Loan would end on a day which is not a Business Day, such
Interest Period shall be extended to the next Business Day
(unless such extension would cause the applicable Interest
Period to end in the succeeding calendar month, in which case
such Interest Period shall end on the next preceding Business
Day); and
(ii) any Interest Period which begins on the last
Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last
Business Day of a calendar month.
15
"Interest Rate Selection Notice" means the written notice
delivered by an Authorized Representative in connection with the
election of a subsequent Interest Period for any Eurodollar Rate Loan
or the Conversion of any Eurodollar Rate Loan into a Base Rate Loan or
the Conversion of any Base Rate Loan into a Eurodollar Rate Loan, in
the form of Exhibit E.
"Issuing Bank" means Bank of America as issuer of Letters of
Credit under Article III; provided further, the term "Issuing Bank"
means Bank of America with respect to the Existing Letter of Credit.
"LC Account Agreement" means the LC Account Agreement dated as
of the Closing Date between the Borrower and the Agent, substantially
in the form of Exhibit L, as amended, modified or supplemented from
time to time.
"Letter of Credit" means a standby letter of credit issued by
the Issuing Bank pursuant to Article III hereof for the account of the
Borrower in favor of a Person advancing credit or securing an
obligation on behalf of the Borrower and shall include the Existing
Letter of Credit.
"Letter of Credit Commitment" means, with respect to each
Lender, the obligation of such Lender to acquire Participations in
respect of Letters of Credit and Reimbursement Obligations up to an
aggregate amount at any one time outstanding equal to such Lender's
Applicable Commitment Percentage of the Total Letter of Credit
Commitment as the same may be increased or decreased from time to time
pursuant to this Agreement.
"Letter of Credit Facility" means the facility described in
Article III hereof providing for the issuance by the Issuing Bank for
the account of the Borrower of Letters of Credit in an aggregate stated
amount at any time outstanding not exceeding the Total Letter of Credit
Commitment minus outstanding Reimbursement Obligations. The Letter of
Credit Facility is a part of and not in addition to the Revolving
Credit Facility.
"Letter of Credit Outstandings" means, as of any date of
determination, the aggregate amount available to be drawn under all
Letters of Credit plus Reimbursement Obligations then outstanding.
"Lien" means any interest in property securing any 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 lien or security interest arising
from a mortgage, encumbrance, pledge, security agreement, conditional
sale or trust receipt or a lease, consignment or bailment for security
purposes. For the purposes of this Agreement, the Borrower and any
Subsidiary shall be deemed to be the owner of any property which it has
acquired or holds subject to a conditional sale agreement, financing
lease, or other arrangement pursuant to which title to the property has
been retained by or vested in some other Person for security purposes.
16
"Loan" means any borrowing pursuant to an Advance under the
Revolving Credit Facility in accordance with Section 2.1.
"Loan Documents" means this Agreement, the Notes, the Security
Instruments, the Facility Guaranties, the LC Account Agreement, the
Applications and Agreements for Letter of Credit, and all other
instruments and documents heretofore or hereafter executed or delivered
to or in favor of any Lender or the Agent in connection with the Loans
made and transactions contemplated under this Agreement, as the same
may be amended, supplemented or replaced from the time to time.
"Management Agreements" means each management agreement,
whether now existing or hereafter entered into, by and between the
Borrower and any Subsidiary pursuant to which the Borrower agrees to
manage certain restaurants in which such Subsidiaries have an interest,
each as from time to time amended, supplemented or replaced.
"Management Securities" means, with respect to any Subsidiary
that has an interest in a restaurant facility, up to 20% of the issued
and outstanding Subsidiary Securities of such Subsidiary owned
beneficially and of record by the individual chefs or managers
operating such restaurant facility or by the regional manager of the
restaurants owned or operated by such Subsidiary.
"Material Agreement" shall have the meaning assigned thereto
in Section 11.1(l) hereof.
"Material Adverse Effect" means a material adverse effect on
(i) the business, properties, operations, prospects or condition,
financial or otherwise, of the Borrower and its Subsidiaries, taken as
a whole, (ii) the ability of any Credit Party to pay or perform its
respective obligations, liabilities and indebtedness under the Loan
Documents as such payment or performance becomes due in accordance with
the terms thereof, or (iii) the rights, powers and remedies of the
Agent or any Lender under any Loan Document or the validity, legality
or enforceability thereof.
"Maximum Discretionary Commitment" means an aggregate
principle amount (subject to reduction or cancellation as herein
provided) equal to $30,000,000.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA to which the Borrower or any ERISA
Affiliate is making, or is accruing an obligation to make,
contributions or has made, or been obligated to make, contributions
within the preceding six (6) Fiscal Years.
"Municipal Obligations" means general obligations issued by,
and supported by the full taxing authority of, any state of the United
States of America or of any municipal
17
corporation or other public body organized under the laws of any such
state which are rated in the highest investment rating category by both
S&P and Moody's.
"New Lenders" shall have the meaning provided therefor in
Section 2.4(b).
"New Subsidiary" shall have the meaning given to such term in
Section 9.19 hereof.
"Notes" means, collectively, the promissory notes of the
Borrower evidencing Loans executed and delivered to the Lenders as
provided in Section 2.3 substantially in the form of Exhibit F, with
appropriate insertions as to amounts, dates and names of Lenders
including those issued after the Closing Date.
"Obligations" means the obligations, liabilities and
Indebtedness of the Borrower with respect to (i) the principal and
interest on the Loans as evidenced by the Notes, (ii) the Reimbursement
Obligations and otherwise in respect of the Letters of Credit, (iii)
all liabilities of Borrower to any Lender (or any affiliate of any
Lender) which arise under a Swap Agreement, and (iv) the payment and
performance of all other obligations, liabilities and Indebtedness of
the Borrower to the Lenders, the Agent or BAS hereunder, under any one
or more of the other Loan Documents or with respect to the Loans.
"Operating Documents" means with respect to any corporation,
limited liability company, partnership, limited partnership, limited
liability partnership or other legally authorized incorporated or
unincorporated entity, the bylaws, operating agreement, partnership
agreement, limited partnership agreement or other applicable documents
relating to the operation, governance or management of such entity.
"Organizational Action" means with respect to any corporation,
limited liability company, partnership, limited partnership, limited
liability partnership or other legally authorized incorporated or
unincorporated entity, any corporate, organizational or partnership
action (including any required shareholder, member or partner action),
or other similar official action, as applicable, taken by such entity.
"Organizational Documents" means with respect to any
corporation, limited liability company, partnership, limited
partnership, limited liability partnership or other legally authorized
incorporated or unincorporated entity, the articles of incorporation,
certificate of incorporation, articles of organization, certificate of
limited partnership or other applicable organizational or charter
documents relating to the creation of such entity.
"Outstandings" means, collectively, at any date, the Letter of
Credit Outstandings and Revolving Credit Outstandings on such date.
"Participation" means, with respect to any Lender (other than
the Issuing Bank) and a Letter of Credit, the extension of credit
represented by the participation of such
18
Lender hereunder in the liability of the Issuing Bank in respect of a
Letter of Credit issued by the Issuing Bank in accordance with the
terms hereof.
"Participant" has the meaning specified in Section 13.1.
"PBGC" means the Pension Benefit Guaranty Corporation and any
successor thereto.
"Pei Wei" means Pei Wei Asian Diner, Inc., a Delaware
corporation.
"Pension Plan" means any employee pension benefit plan within
the meaning of Section 3(2) of ERISA, other than a Multiemployer Plan,
which is subject to the provisions of Title IV of ERISA or Section 412
of the Code and which (i) is maintained for employees of the Borrower
or any of its ERISA Affiliates or is assumed by the Borrower or any of
its ERISA Affiliates in connection with any Acquisition or (ii) has at
any time been maintained for the employees of the Borrower or any
current or former ERISA Affiliate.
"Permitted Liens" has the meaning given to such term in
Section 10.3.
"Person" means an individual, partnership, corporation,
limited liability company, limited liability partnership, trust,
unincorporated organization, association, joint venture or a government
or agency or political subdivision thereof.
"Pledge Agreement" means that certain Securities Pledge
Agreement dated as of the Closing Date between the Borrower and the
Agent for the benefit of the Agent and the Lenders, as hereafter
amended, supplemented (including by Pledge Agreement Supplement) or
replaced from time to time.
"Pledge Agreement Supplement" means, with respect to each
Pledge Agreement, the Pledge Agreement Supplement in the form affixed
as an exhibit to such Pledge Agreement.
"Pledged Interests" means the Subsidiary Securities required
to be pledged as Collateral pursuant to Article V or the terms of any
Pledge Agreement, and shall include 100% of the Subsidiary Securities
(other than Management Securities) of Pei Wei.
"Pre-Refunded Municipal Obligations" means obligations of any
state of the United States of America or of any municipal corporation
or other public body organized under the laws of any such state which
are rated, based on the escrow, in the highest investment rating
category by both S&P and Moody's and which have been irrevocably called
for redemption and advance refunded through the deposit in escrow of
Government Securities or other debt securities which are (i) not
callable at the option of the issuer thereof prior to maturity, (ii)
irrevocably pledged solely to the payment of all principal and interest
on such obligations as the same becomes due and (iii) in a principal
amount and bear such rate or rates of interest as shall be sufficient
to pay in full all
19
principal of, interest, and premium, if any, on such obligations as the
same becomes due as verified by a nationally recognized firm of
certified public accountants.
"Principal Office" means the principal office of Bank of
America, presently located at 101 North Tryon Street, 15th Floor, NC1
001-15-04, Charlotte, North Carolina 28255, Attention: Agency Services,
or such other office and address as the Agent may from time to time
designate.
"Pro Rata Revolving Share" means, with respect to each Lender
at any time, a fraction (expressed as a percentage, carried out to the
ninth decimal place), the numerator of which is the amount of the
Revolving Credit Commitment of such Lender at such time and the
denominator of which is the amount of the Total Revolving Credit
Commitments at such time; provided that if the Total Revolving Credit
Commitments have been terminated at such time, then the Pro Rata
Revolving Share of each Lender shall be the Pro Rata Revolving Share of
such Lender immediately prior to such termination and after giving
effect to any subsequent assignments made pursuant to Section 13.1. The
initial Pro Rata Revolving Share of each Lender is set forth opposite
the name of such Lender on Exhibit A or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as
applicable.
"Rate Hedging Obligations" means, without duplication, any and
all obligations of the Borrower or any Subsidiary, whether absolute or
contingent and howsoever and whensoever created, arising, evidenced or
acquired (including all renewals, extensions and modifications thereof
and substitutions therefor), under (i) any and all agreements, devices
or arrangements designed to protect at least one of the parties thereto
from the fluctuations of interest rates, exchange rates or forward
rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, Dollar-denominated or
cross-currency interest rate exchange agreements, forward currency
exchange agreements, interest rate cap or collar protection agreements,
forward rate currency or interest rate options, puts, warrants and
those commonly known as interest rate "swap" agreements; (ii) all other
"derivative instruments" as defined in FASB 133 and which are subject
to the reporting requirements of FASB 133; and (iii) any and all
cancellations, buybacks, reversals, terminations or assignments of any
of the foregoing.
"Registrar" means, with respect to any Subsidiary Securities,
any Person authorized or obligated to maintain records of the
registration of ownership or transfer of ownership of interests in such
Subsidiary Securities, and in the event no such Person shall have been
expressly designated by the related Subsidiary, shall mean (i) as to
any corporation or limited liability company, its Secretary (or
comparable official), and (ii) as to any partnership, its general
partner (or managing general partner if one shall have been appointed).
"Regulation D" means Regulation D of the Board as the same may
be amended or supplemented from time to time.
"Reimbursement Obligation" shall mean at any time, the
obligation of the Borrower with respect to any Letter of Credit to
reimburse the Issuing Bank and the
20
Lenders to the extent of their respective Participations (including by
the receipt by the Issuing Bank of proceeds of Loans pursuant to
Section 2.1(c)(iii)) for amounts theretofore paid by the Issuing Bank
pursuant to a drawing under such Letter of Credit.
"Reporting Entity" shall have the meaning given to such term
in the definition of "Allowable Distributions".
"Repurchase Agreement" means a repurchase agreement entered
into with any financial institution whose debt obligations or
commercial paper are rated "A" by either of S&P or Moody's or "A-1" by
S&P or "P-1" by Moody's.
"Required Lenders" means, as of any date, Lenders on such date
having Credit Exposures (as defined below) aggregating (i) if there
shall be fewer than three (3) Lenders, 100% of the aggregate Credit
Exposures of all Lenders on such date, and (ii) if there shall be three
(3) or more Lenders, more than 50% of the aggregate Credit Exposures of
all the Lenders on such date. For purposes of the preceding sentence,
the amount of the "Credit Exposure" of each Lender shall be equal at
all times (a) other than following the occurrence and during the
continuance of an Event of Default, to its Revolving Credit Commitment,
and (b) following the occurrence and during the continuance of an Event
of Default, to the sum of (i) the aggregate principal amount of such
Lender's Applicable Commitment Percentage of Revolving Credit
Outstandings plus (ii) the amount of such Lender's Applicable
Commitment Percentage of Letter of Credit Outstandings; provided that,
for the purpose of this definition only, (A) if any Lender shall have
failed to fund its Applicable Commitment Percentage of any Advance,
then the Revolving Credit Commitment of such Lender shall be deemed
reduced by the amount it so failed to fund for so long as such failure
shall continue and such Lender's Credit Exposure attributable to such
failure shall be deemed held by any Lender making more than its
Applicable Commitment Percentage of such Advance to the extent it
covers such failure, and (B) if any Lender shall have failed to pay to
the Issuing Bank upon demand its Applicable Commitment Percentage of
any drawing under any Letter of Credit resulting in an outstanding
Reimbursement Obligation (whether by funding its Participation therein
or otherwise), such Lender's Credit Exposure attributable to all Letter
of Credit Outstandings shall be deemed to be held by the Issuing Bank
until such Lender shall pay such deficiency amount to the Issuing Bank
together with interest thereon as provided in Section 4.9.
"Reserve Requirement" means, at any time, the maximum rate at
which reserves (including, without limitation, any marginal, special,
supplemental, or emergency reserves) are required to be maintained
under regulations issued from time to time by the Board of Governors of
the Federal Reserve System (or any successor) by member banks of the
Federal Reserve System against "Eurocurrency liabilities" (as such term
is used in Regulation D). Without limiting the effect of the foregoing,
the Reserve Requirement shall reflect any other reserves required to be
maintained by such member banks with respect to (i) any category of
liabilities which includes deposits by reference to which the
Eurodollar Rate is to be determined, or (ii) any category of extensions
of credit or other
21
assets which include Eurodollar Rate Loans. The Eurodollar Rate shall
be adjusted automatically on and as of the effective date of any change
in the Reserve Requirement.
"Restricted Payment" means (a) any dividend or other
distribution, direct or indirect, on account of any shares of any class
of stock of the Borrower or any Subsidiary Securities of its
Subsidiaries (other than those payable or distributable solely to the
Borrower) now or hereafter outstanding, except a dividend payable
solely in shares of a class of stock or units of a class of Subsidiary
Securities to the holders of that class; (b) any redemption,
conversion, exchange, retirement or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class
of stock of Borrower or any Subsidiary Securities of its Subsidiaries
(other than those payable or distributable solely to the Borrower) now
or hereafter outstanding; (c) any payment made to retire, or to obtain
the surrender of, any outstanding warrants, options or other rights to
acquire shares of any class of stock of Borrower or any Subsidiary
Securities of its Subsidiaries now or hereafter outstanding; and (d)
any issuance and sale of Subsidiary Securities of any Subsidiary of the
Borrower (or any option, warrant or right to acquire such subsidiary
securities) other than to the Borrower; provided, however, that for so
long as no Event of Default has occurred and is continuing, or would
occur as a result thereof, including without limitation any Default or
Event of Default as a result of noncompliance with Sections 10.1 and
10.4, Allowable Distributions and the issuance of Management Securities
in compliance with Section 10.5(g) shall not constitute Restricted
Payments hereunder.
"Revolving Credit Commitment" means, with respect to each
Lender, the obligation of such Lender to make Loans to the Borrower up
to an aggregate principal amount at any one time outstanding equal to
such Lender's Applicable Commitment Percentage of the Total Revolving
Credit Commitment.
"Revolving Credit Facility" means the facility described in
Section 2.1 hereof providing for Loans to the Borrower by the Lenders
in the aggregate principal amount of the Total Revolving Credit
Commitment.
"Revolving Credit Outstandings" means, as of any date of
determination, the aggregate principal amount of all Loans then
outstanding.
"Revolving Credit Termination Date" means (i) the Stated
Termination Date or (ii) such earlier date of termination of Lenders'
obligations pursuant to Section 11.1 upon the occurrence of an Event of
Default, or (iii) such date as the Borrower may voluntarily and
permanently terminate the Revolving Credit Facility by written notice
to the Agent and payment in full of all Revolving Credit Outstandings
and Letter of Credit Outstandings and cancellation of all Letters of
Credit, together with all accrued and unpaid interest thereon.
"S&P" means Standard & Poor's Ratings Group, a division of
McGraw-Hill.
22
"Security Agreement" means that certain Security Agreement
dated as of the Closing Date among the Borrower, the Guarantors and the
Agent, for the benefit of the Agent and the Lenders, as hereafter
amended, supplemented or replaced from time to time.
"Security Instruments" means, collectively, the Pledge
Agreement, the Security Agreement, the Assignment of Trademarks, the LC
Account Agreement and all other agreements (including control
agreements), instruments and other documents, whether now existing or
hereafter in effect, pursuant to which the Borrower or any Subsidiary
shall grant or convey to the Agent or the Lenders a Lien in, or any
other Person shall acknowledge any such Lien in, property as security
for all or any portion of the Obligations, as any of them may be
amended, supplemented or replaced from time to time.
"Solvent" means, when used with respect to any Person, that at
the time of determination:
(i) the fair value of its assets (both at fair
valuation and at present fair saleable value on an orderly
basis) is in excess of the total amount of its liabilities,
including Contingent Obligations; and
(ii) it is then able and expects to be able to
pay its debts as they mature; and
(iii) it has capital sufficient to carry on its
business as conducted and as proposed to be conducted.
"Stated Termination Date" means December 20, 2005, or such
later date as the parties may agree pursuant to Section 2.1(f).
"Subsidiary" means any corporation or other entity in which
more than 50% of its outstanding Voting Securities or more than 50% of
all equity interests is owned directly or indirectly by the Borrower
and/or by one or more of the Borrower's Subsidiaries.
"Subsidiary Securities" means the shares of capital stock or
the other equity interests issued by or equity participations in any
Subsidiary (including without limitation partnership and membership
interests), whether or not constituting a "security" under Article 8 of
the Uniform Commercial Code as in effect in any jurisdiction.
"Supplemental Credit Documents" shall have the meaning
provided therefor in Section 2.4(e).
"Swap Agreement" means one or more agreements between the
Borrower and any Person with respect to Indebtedness evidenced by any
or all of the Notes, on terms mutually acceptable to Borrower and such
Person and approved by the Required Lenders, which agreements create
Rate Hedging Obligations; provided, however, that no such
23
approval of the Required Lenders shall be required to the extent such
agreements are entered into between the Borrower and any Lender or any
affiliate of any Lender.
"Termination Event" means: (i) a "Reportable Event" described
in Section 4043 of ERISA and the regulations issued thereunder (unless
the notice requirement has been waived by applicable regulation); or
(ii) the withdrawal of the Borrower or any ERISA Affiliate from a
Pension Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA or was deemed such
under Section 4062(e) of ERISA; or (iii) the termination of a Pension
Plan, the filing of a notice of intent to terminate a Pension Plan or
the treatment of a Pension Plan amendment as a termination under
Section 4041 of ERISA; or (iv) the institution of proceedings to
terminate a Pension Plan by the PBGC; or (v) any other event or
condition which would constitute grounds under Section 4042(a) of ERISA
for the termination of, or the appointment of a trustee to administer,
any Pension Plan; or (vi) the partial or complete withdrawal of the
Borrower or any ERISA Affiliate from a Multiemployer Plan; or (vii) the
imposition of a Lien pursuant to Section 412 of the Code or Section 302
of ERISA; or (viii) any event or condition which results in the
reorganization or insolvency of a Multiemployer Plan under Section 4241
or Section 4245 of ERISA, respectively; or (ix) any event or condition
which results in the termination of a Multiemployer Plan under Section
4041A of ERISA or the institution by the PBGC of proceedings to
terminate a Multiemployer Plan under Section 4042 of ERISA; or (x) any
event or condition with respect to any Employee Benefit Plan which is
regulated by any Foreign Benefit Law that results in the termination of
such Employee Benefit Plan or the revocation of such Employee Benefit
Plan's authority to operate under the applicable Foreign Benefit Law.
"Total Letter of Credit Commitment" means an amount not to
exceed $5,000,000.
"Total Revolving Credit Commitment" means a principal amount
equal to $20,000,000, as reduced from time to time in accordance with
Section 2.1(e) or as increased in accordance with Section 2.4.
"Total Revolving Credit Commitment Increase" means that
increase of the Total Revolving Credit Commitment pursuant to Section
2.4.
"Type" shall mean any type of Loan (i.e., a Base Rate Loan or
a Eurodollar Rate Loan).
"USPTO Documents" means the Form PTO-1594 Recordation Cover
Sheet.
"Voting Securities" means shares of capital stock issued by a
corporation, or equivalent interests in any other Person, the holders
of which are ordinarily, in the absence of contingencies, entitled to
vote for the election of directors (or persons performing similar
functions) of such Person, even if the right so to vote has been
suspended by the happening of such a contingency.
24
1.2. Rules of Interpretation.
(a) All accounting terms not specifically defined herein
shall have the meanings assigned to such terms and shall be interpreted
in accordance with GAAP applied on a Consistent Basis.
(b) Each term defined in Articles 1, 8 or 9 of the
Arizona Uniform Commercial Code shall have the meaning given therein
unless otherwise defined herein, except to the extent that the Uniform
Commercial Code of another jurisdiction is controlling, in which case
such terms shall have the meaning given in the Uniform Commercial Code
of the applicable jurisdiction.
(c) The headings, subheadings and table of contents used
herein or in any other Loan Document are solely for convenience of
reference and shall not constitute a part of any such document or
affect the meaning, construction or effect of any provision thereof.
(d) Except as otherwise expressly provided, references in
any Loan Document to articles, sections, paragraphs, clauses, annexes,
appendices, exhibits and schedules are references to articles,
sections, paragraphs, clauses, annexes, appendices, exhibits and
schedules in or to such Loan Document.
(e) All definitions set forth herein or in any other Loan
Document shall apply to the singular as well as the plural form of such
defined term, and all references to the masculine gender shall include
reference to the feminine or neuter gender, and vice versa, as the
context may require.
(f) When used herein or in any other Loan Document, words
such as "hereunder", "hereto", "hereof" and "herein" and other words of
like import shall, unless the context clearly indicates to the
contrary, refer to the whole of the applicable document and not to any
particular article, section, subsection, paragraph or clause thereof.
(g) References to "including" means including without
limiting the generality of any description preceding such term, and for
purposes hereof the rule of ejusdem generis shall not be applicable to
limit a general statement, followed by or referable to an enumeration
of specific matters, to matters similar to those specifically
mentioned.
(h) Except as otherwise expressly provided, all dates and
times of day specified herein shall refer to such dates and times at
Charlotte, North Carolina.
(i) Whenever interest rates or fees are established in
whole or in part by reference to a numerical percentage expressed as
"___%", such arithmetic expression shall be interpreted in accordance
with the convention that 1% = 100 basis points.
(j) Each of the parties to the Loan Documents and their
counsel have reviewed and revised, or requested (or had the opportunity
to request) revisions to, the Loan Documents, and any rule of
construction that ambiguities are to be resolved against
25
the drafting party shall be inapplicable in the construing and
interpretation of the Loan Documents and all exhibits, schedules and
appendices thereto.
(k) Any reference to an officer of the Borrower or any
other Person by reference to the title of such officer shall be deemed
to refer to each other officer of such Person, however titled,
exercising the same or substantially similar functions.
(l) All references to any agreement or document as
amended, modified or supplemented, or words of similar effect, shall
mean such document or agreement, as the case may be, as amended,
modified or supplemented from time to time only as and to the extent
permitted therein and in the Loan Documents.
ARTICLE II
The Credit Facilities
2.1. Loans.
(a) Commitment. Subject to the terms and conditions of
this Agreement, each Lender severally agrees to make Advances to the
Borrower under the Revolving Credit Facility from time to time from the
Funding Date until the Revolving Credit Termination Date on a pro rata
basis as to the total borrowing requested by the Borrower on any day
determined by such Lender's Applicable Commitment Percentage up to but
not exceeding the Revolving Credit Commitment of such Lender, provided,
however, that the Lenders will not be required and shall have no
obligation to make any such Advance (i) so long as a Default or an
Event of Default has occurred and is continuing or (ii) if the Agent
has accelerated the maturity of any of the Notes as a result of an
Event of Default; provided further, however, that immediately after
giving effect to each such Advance, the amount of Revolving Credit
Outstandings plus Letter of Credit Outstandings shall not exceed the
Total Revolving Credit Commitment. Within such limits and subject to
the other terms and conditions of this Agreement, the Borrower may
borrow, repay and reborrow under the Revolving Credit Facility on a
Business Day from the Funding Date until, but (as to borrowings and
reborrowings) not including, the Revolving Credit Termination Date.
(b) Amounts. Except as otherwise permitted by the Lenders
from time to time, the amount of Revolving Credit Outstandings plus
Letter of Credit Outstandings shall not exceed at any time the Total
Revolving Credit Commitment, and, in the event there shall be
outstanding any such excess, the Borrower, within ten (10) Business
Days after receipt of notice from the Agent, shall make such payments
and prepayments as shall be necessary to comply with this restriction.
Each Advance under the Revolving Credit Facility, other than Base Rate
Refunding Loans, shall be in an amount of at least $500,000, and, if
greater than $500,000, an integral multiple of $100,000.
(c) Advances. (i) An Authorized Representative shall give
the Agent (1) at least three (3) Business Days' irrevocable telephonic
notice of each Eurodollar Rate Loan (whether representing an additional
borrowing or the Continuation of a borrowing
26
hereunder or the Conversion of a borrowing hereunder from a Base Rate
Loan to a Eurodollar Rate Loan) prior to 10:30 A.M. no later than the
third Business Day prior to such Loan and (2) irrevocable telephonic
notice of each Base Rate Loan (other than Base Rate Refunding Loans to
the extent the same are effected without notice pursuant to Section
2.1(c)(iii) and whether representing an additional borrowing hereunder
or the Conversion of borrowing hereunder from Eurodollar Rate Loans to
Base Rate Loans) prior to 10:30 A.M. on the day of such proposed Loan.
Each such notice shall be effective upon receipt by the Agent, shall
specify the amount of the borrowing, the type of Loan (Base Rate or
Eurodollar Rate), the date of borrowing and, if a Eurodollar Rate Loan,
the Interest Period to be used in the computation of interest. The
Authorized Representative shall provide the Agent written confirmation
of each such telephonic notice in the form of a Borrowing Notice or
Interest Rate Selection Notice (as applicable) with appropriate
insertions sent by telefacsimile transmission but failure to provide
such confirmation shall not affect the validity of such telephonic
notice. Notice of receipt of such Borrowing Notice or Interest Rate
Selection Notice, as the case may be, together with the amount of each
Lender's portion of an Advance requested thereunder, shall be provided
by the Agent to each Lender by telefacsimile transmission with
reasonable promptness, but (provided the Agent shall have received such
notice by 11:30 A.M.) not later than 1:00 P.M. on the same day as the
Agent's receipt of such notice.
(ii) Not later than 2:00 P.M. on the date
specified for each borrowing under this Section 2.1, each Lender shall,
pursuant to the terms and subject to the conditions of this Agreement,
make the amount of the Advance or Advances to be made by it on such day
available by wire transfer to the Agent in the amount of its pro rata
share, determined according to such Lender's Applicable Commitment
Percentage of the Loan or Loans to be made on such day. Such wire
transfer shall be directed to the Agent at the Principal Office and
shall be in the form of Dollars constituting immediately available
funds. The amount so received by the Agent shall, subject to the terms
and conditions of this Agreement, be made available to the Borrower by
delivery of the proceeds thereof to the Borrower's Account or otherwise
as shall be directed in the applicable Borrowing Notice by the
Authorized Representative and reasonably acceptable to the Agent.
(iii) Notwithstanding the foregoing, if a drawing
is made under any Letter of Credit, such drawing is honored by the
Issuing Bank, and the Borrower shall not immediately fully reimburse
the Issuing Bank in respect of such drawing from other funds available
to the Borrower, (A) provided that the conditions to making a Loan as
herein provided shall then be satisfied, the Reimbursement Obligation
arising from such drawing shall be paid to the Issuing Bank by the
Agent without the requirement of notice to or from the Borrower from
immediately available funds which shall be advanced as a Base Rate
Refunding Loan to the Agent at its Principal Office by each Lender
under the Revolving Credit Facility in an amount equal to such Lender's
Applicable Commitment Percentage of such Reimbursement Obligation, and
(B) if the conditions to making a Loan as herein provided shall not
then be satisfied, each of the Lenders shall fund by payment to the
Agent (for the benefit of the Issuing Bank) at its Principal Office in
immediately available funds the purchase from the Issuing Bank of their
respective Participations in the related Reimbursement Obligation based
on their respective
27
Applicable Commitment Percentages of the Total Letter of Credit
Commitment. If a drawing is presented under any Letter of Credit in
accordance with the terms thereof and the Borrower shall not
immediately reimburse the Issuing Bank in respect thereof, then notice
of such drawing or payment shall be provided promptly by the Issuing
Bank to the Agent and the Agent shall provide notice to each Lender by
telephone or telefacsimile transmission. If notice to the Lenders of a
drawing under any Letter of Credit is given by the Agent at or before
12:00 noon on any Business Day, each Lender shall either make a Base
Rate Refunding Loan or fund the purchase of its Participation as
specified above in the amount of such Lender's Applicable Commitment
Percentage of such drawing or payment and shall pay such amount to the
Agent for the account of the Issuing Bank at the Principal Office in
Dollars and in immediately available funds before 2:30 P.M. on the same
Business Day. If such notice to the Lenders is given by the Agent after
12:00 noon on any Business Day, each Lender shall either make such Base
Rate Refunding Loan or fund such purchase before 12:00 noon on the next
following Business Day.
(d) Repayment of Loans. The principal amount of each Loan
shall be due and payable to the Agent for the benefit of each Lender in
full on the Revolving Credit Termination Date, or earlier as
specifically provided herein. All payments to be made by the Borrower
shall be made without condition or deduction for any counterclaim,
defense, recoupment or setoff. The principal amount of any Loan may be
prepaid in whole or in part on any Business Day, upon (A) at least
three (3) Business Days' irrevocable telephonic notice in the case of
each Loan that is a Eurodollar Rate Loan from an Authorized
Representative (effective upon receipt) to the Agent prior to 12:30
P.M. and (B) irrevocable telephonic notice in the case of each Loan
that is a Base Rate Loan from an Authorized Representative (effective
upon receipt) to the Agent prior to 12:30 P.M. on the day of such
proposed repayment. The Authorized Representative shall provide the
Agent written confirmation of each such telephonic notice sent by
telefacsimile transmission but failure to provide such confirmation
shall not effect the validity of such telephonic notice. All
prepayments of Loans made by the Borrower shall be in the amount of
$500,000 or such greater amount which is an integral multiple of
$100,000, or the amount equal to all Revolving Credit Outstandings, or
such other amount as necessary to comply with Section 2.1(b).
(e) Reductions. The Borrower shall, by notice from an
Authorized Representative, have the right from time to time but not
more frequently than once each calendar month, upon not less than three
(3) Business Days' written notice to the Agent, effective upon receipt,
to reduce the Total Revolving Credit Commitment. The Agent shall give
each Lender, within one (1) Business Day of receipt of such notice,
telefacsimile notice, or telephonic notice (confirmed in writing), of
such reduction. Each such reduction shall be in the aggregate amount of
$5,000,000, or such greater amount which is in an integral multiple of
$1,000,000, or the entire remaining Total Revolving Credit Commitment,
and shall permanently reduce the Total Revolving Credit Commitment.
Each reduction of the Total Revolving Credit Commitment shall be
accompanied by payment of the Loans to the extent that the principal
amount of Revolving Credit Outstandings plus Letter of Credit
Outstandings exceeds the Total Revolving Credit Commitment after giving
effect to such reduction, together with accrued and unpaid interest on
the amounts prepaid.
28
2.2. Use of Proceeds. The proceeds of the Loans made pursuant to
the Revolving Credit Facility hereunder shall be used by the Borrower for
general working capital needs and other corporate purposes.
2.3. Notes. Loans made by each Lender shall be evidenced by the
Note payable to the order of such Lender in the respective amount of its
Applicable Commitment Percentage of the Total Revolving Credit Commitment, which
Note shall be dated the Closing Date or a later date pursuant to an Assignment
and Assumption and shall be duly completed, executed and delivered by the
Borrower.
2.4. Discretionary Increase in Total Revolving Credit Commitment.
(a) Total Revolving Credit Commitment Increase. So long
as (I) no Default or Event of Default under the Loan Documents then
exists or would arise as a result of any Discretionary Commitment; (II)
the Borrower is in pro forma compliance with the terms of Section 10.1
both before and after giving effect to any Discretionary Commitment;
(III) the representations and warranties of the Borrower and each other
Credit Party contained in Article VIII and in all other Loan Documents
are true and correct (except to the extent that such representations
and warranties specifically refer to an earlier date, in which case
they shall be true and correct as of such earlier date); and (IV) the
Total Revolving Credit Commitment has not been reduced; then subject to
the terms and conditions of this Section 2.4, on and after the Funding
Date but prior to the Facility Termination Date, the Borrower may
request, but not more than once, that Lenders and New Lenders make
Discretionary Commitments in an aggregate principal amount not to
exceed the Maximum Discretionary Commitment pursuant to which the Total
Revolving Credit Commitment may be increased by one or more Lenders
(either existing Lenders or, pursuant to Section 2.4(d), New Lenders)
committing to such Discretionary Commitment, so long as (A) one or more
Lenders (either existing Lenders or, pursuant to Section 2.4(d), New
Lenders) commit to the entire amount of such Total Revolving Credit
Commitment Increase in accordance with the procedures set forth in
Sections 2.4(b), (c), (d) and (e) hereof; (B) on the date the
Discretionary Commitments are effective, the Total Revolving Credit
Commitment Increase does not exceed the Maximum Discretionary
Commitment; and (C) the Total Revolving Credit Commitment Increase must
be in a minimum principal amount of $5,000,000 or an increment of
$1,000,000 in excess thereof
No Lender shall be obligated to commit, or to agree to commit, to any
request for Discretionary Commitments, which commitment shall only be made and
evidenced in accordance with the procedures set forth in Section 2.4(c).
(b) Discretionary Commitment Requests. Subject to the
terms and conditions of this Section 2.4, on and after the Funding Date
but prior to the Facility Termination Date, the Borrower may request
one time that the Lenders and, if determined by the Borrower, one or
more other financial institutions that would qualify as Eligible
Assignees (as used in this Section 2.4, upon its commitment to a
Discretionary Facility in accordance with the terms hereof, a "New
Lender") make Discretionary Commitments in an aggregate principal
amount not to exceed the Maximum Discretionary Commitment.
29
The request by the Borrower for a Discretionary Commitment pursuant to
Section 2.4 shall be made by the Borrower giving written notice thereof
to the Agent (a "Discretionary Commitment Request"), (i) specifying the
amount of the requested aggregate Discretionary Commitments (which
amount shall be no less than $5,000,000 or a greater integral multiple
of $1,000,000); (ii) designating the date on which the proposed
aggregate Discretionary Commitments are to be effective and the date by
which each Discretionary Commitment Notice is due from any Lender or
New Lender; and (iii) identifying any New Lenders to whom a
Discretionary Commitment Request is to be sent by the Agent. Upon
receipt of any such Discretionary Commitment Request and such other
information as the Agent shall reasonably request in connection
therewith, the Agent shall promptly notify and deliver to the Lenders
and prospective New Lenders such Discretionary Commitment Request and
all such other information and shall request commitments from Lenders
and prospective New Lenders with respect thereto, which request shall
be made by the Agent to the Lenders and prospective New Lenders within
10 Business Days after receipt of all such information by the Agent. No
Lender shall be obligated to make any Discretionary Commitment
requested pursuant to any Discretionary Commitment Request.
(c) Commitments. Within thirty (30) calendar days after
receipt of a Discretionary Commitment Request (or such lesser period of
time as set forth in such Discretionary Commitment Request, but in no
event less than 15 calendar days), each Lender and each prospective New
Lender making a Discretionary Commitment in response to the
Discretionary Commitment Request shall notify the Agent and the
Borrower of the maximum amount of its proposed Discretionary Commitment
(such notice being a "Discretionary Commitment Notice"), which shall
not be less than $1,000,000 and shall, if greater, be in $1,000,000
increments in excess thereof. Thereafter, after consultation with the
Borrower, the Agent shall advise each Lender and New Lender submitting
a Discretionary Commitment Notice of such Lender's allocated
Discretionary Commitment, which in the aggregate shall not be greater
than the maximum aggregate amount of Discretionary Commitments set
forth in such Lender's Discretionary Commitment Notice, and the date
upon which such Discretionary Commitment shall be effective (the
"Discretionary Commitment Effective Date"); provided, however, that the
Discretionary Commitment Effective Date shall (i) be on or prior to the
Facility Termination Date, (ii) not be earlier than the date thereof
set forth in the Discretionary Commitment Request, and (iii) not be
less than 15 calendar days after all the amendments referred to in
Section 2.4(e) below and all Supplemental Credit Documents shall have
been delivered to the Agent for its review.
(d) Amendments; New Lenders. Each addition of a New
Lender and each Discretionary Commitment of an existing Lender, shall
be effected by the Supplemental Credit Documents pursuant to Section
2.4(e) below, a Note for each New Lender and an amendment that is
executed without regard to Section 13.6 (with respect to the consent of
the Required Lenders) by the Borrower, the Agent, and such New Lender
or existing Lender to revise Exhibit A to reflect the addition and
Discretionary Commitment of each New Lender and the Discretionary
Commitment of each existing Lender. Each New Lender providing a
Discretionary Commitment shall be a "Lender" for all purposes
hereunder, entitled to the rights and benefits, and subject to the
duties, of a Lender under
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the Loan Documents. The Discretionary Facility is not a separate
facility hereunder, but shall result in an increase in the Total
Revolving Credit Commitment and as such (i) will be subject to the
terms and conditions of this Agreement and (ii) will be secured and
guaranteed by the Security Instruments and the Facility Guaranty.
(e) Supplemental Certificate; Prepayments. As a condition
precedent to the Discretionary Facility, the Borrower shall deliver to
the Agent (I) a certificate of each Credit Party dated as of the
Discretionary Commitment Effective Date (in sufficient copies for each
Discretionary Facility Lender) signed by a Responsible Officer of such
Credit Party certifying and attaching the resolutions adopted by such
Credit Party approving or consenting to such Discretionary Facility,
and (II) a certificate of the Borrower certifying that, before and
after giving effect to such Discretionary Facility, (A) the
representations and warranties contained in Article VIII and the other
Loan Documents are true and correct on and as of the Discretionary
Commitment Effective Date, except to the extent that such
representations and warranties specifically refer to an earlier date,
in which case they are true and correct as of such earlier date, and
except that for purposes of this Section 2.4, the representations and
warranties contained in subsections (a) and (b) of Section 8.6 shall be
deemed to refer to the most recent statements furnished pursuant to
subsections (a) and (b), respectively, of Section 10.1 and (B) no
Default or Event of Default exists. The Borrower shall prepay any
Revolving Loans outstanding on the Discretionary Commitment Effective
Date (and pay any additional amounts required pursuant to Section 6.5)
to the extent necessary to keep the outstanding Revolving Loans ratable
with any revised Pro Rata Revolving Shares arising from any nonratable
increase in the Revolving Credit Commitments under this Section;
provided, however, that the Borrower shall not be required to make any
such prepayment until the Borrower has received an advance under the
Discretionary Facility.
(f) Discretionary Commitments and Borrowings. With
respect to each Discretionary Commitment and subject to the terms and
conditions of the Loan Documents and the applicable Supplemental Credit
Documents for such Discretionary Facility, each Lender having a
Discretionary Commitment for the Discretionary Facility, severally, but
not jointly, agrees to make Loans to the Borrower in an aggregate
principal amount at any time outstanding not in excess of its
Discretionary Commitment. Loans shall be made subject to the terms and
conditions set forth in this Article II and Article IV for all Loans.
ARTICLE III
Letters of Credit
3.1. Letters of Credit. The Issuing Bank agrees, in reliance upon
the agreements of the other Lenders set forth in this Section 3.1, subject to
the terms and conditions of this Agreement, upon request of the Borrower to
issue from time to time on and after the Funding Date for the account of the
Borrower Letters of Credit upon delivery to the Issuing Bank of an Application
and Agreement for Letter of Credit relating thereto in form and content
reasonably acceptable to the Issuing Bank; provided, that (i) the Issuing Bank
shall not be obligated to issue any Letter of Credit if it has been notified by
the Agent or has actual knowledge that a Default or Event of
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Default has occurred and is continuing or any order, judgment or decree of any
Governmental Authority or arbitrator shall by its terms purport to enjoin or
restrain the Issuing Bank from issuing such Letter of Credit, or any law
applicable to the Issuing Bank or any request or directive (whether or not
having the force of law) from any Governmental Authority with jurisdiction over
the Issuing Bank shall prohibit, or request that the Issuing Bank refrain from,
the issuance of letters of credit generally or such Letter of Credit in
particular or shall impose upon the Issuing Bank with respect to such Letter of
Credit any restriction, reserve or capital requirement (for which the Issuing
Bank is not otherwise compensated hereunder) not in effect on the Closing Date,
or shall impose upon the Issuing Bank any unreimbursed loss, cost or expense
which was not applicable on the Closing Date and which the Issuing Bank in good
faith deems material to it, (ii) the Letter of Credit Outstandings shall not
exceed the Total Letter of Credit Commitment, (iii) no Letter of Credit shall be
issued if, after giving effect thereto, Letter of Credit Outstandings plus
Revolving Credit Outstandings shall exceed the Total Revolving Credit Commitment
and (iv) the issuance of such Letter of Credit shall not violate any policy of
the Issuing Bank. No Letter of Credit shall have an expiry date (including all
rights of the Borrower or any beneficiary named in such Letter of Credit to
require renewal) or payment date occurring later than the earlier to occur of
one year after the date of its issuance or the seventh Business Day prior to the
Stated Termination Date.
3.2. Reimbursement and Participations.
(a) The Borrower hereby unconditionally agrees to pay to
the Issuing Bank immediately on demand at the Principal Office all
amounts required to pay all drafts drawn under the Letters of Credit or
documents purporting to be Letters of Credit and all reasonable
expenses incurred by the Issuing Bank in connection with the Letters of
Credit, and in any event to place in possession of the Issuing Bank
(which shall include Advances under the Revolving Credit Facility if
permitted by Section 2.1) sufficient funds to pay all debts and
liabilities arising under any Letter of Credit. The Issuing Bank agrees
to give the Borrower prompt notice of any request for a draw under a
Letter of Credit. The Issuing Bank may charge any account the Borrower
may have with it for any and all amounts the Issuing Bank pays under a
Letter of Credit, plus charges and reasonable expenses as from time to
time agreed to by the Issuing Bank and the Borrower; provided that to
the extent permitted by Section 2.1(c)(iii), amounts shall be paid
pursuant to Advances under the Revolving Credit Facility. The Borrower
agrees to pay the Issuing Bank interest on any Reimbursement
Obligations not paid when due hereunder either directly by the Borrower
or through Advances at the Default Rate.
(b) In accordance with the provisions of Section 2.1(c),
the Issuing Bank shall notify the Agent of any drawing under any Letter
of Credit promptly following the receipt by the Issuing Bank of such
drawing.
(c) Each Lender (other than the Issuing Bank) shall
automatically acquire on the date of issuance thereof, a Participation
in the liability of the Issuing Bank in respect of each Letter of
Credit in an amount equal to such Lender's Applicable Commitment
Percentage of such liability, and to the extent that the Borrower is
obligated to pay the Issuing Bank under Section 3.2(a), each Lender
(other than the Issuing Bank) thereby shall absolutely, unconditionally
and irrevocably assume, and shall be unconditionally
32
obligated to pay to the Issuing Bank, its Applicable Commitment
Percentage of the liability of the Issuing Bank under such Letter of
Credit in the manner and with the effect provided in Section
2.1(c)(iii).
(d) Simultaneously with the making of each payment by a
Lender to the Issuing Bank pursuant to Section 2.1(c)(iii)(B), such
Lender shall, automatically and without any further action on the part
of the Issuing Bank or such Lender, acquire a Participation in an
amount equal to such payment (excluding the portion thereof
constituting interest accrued prior to the date the Lender made its
payment) in the related Reimbursement Obligation of the Borrower. Each
Lender's obligation to make payment to the Agent for the account of the
Issuing Bank pursuant to Section 2.1(c)(iii) and Section 3.2(c), and
the right of the Issuing Bank to receive the same, shall be absolute
and unconditional, shall not be affected by any circumstance whatsoever
and shall be made without any offset, abatement, withholding or
reduction whatsoever. In the event the Lenders have purchased
Participations in any Reimbursement Obligation as set forth above, then
at any time payment (in fully collected, immediately available funds)
of such Reimbursement Obligation, in whole or in part, is received by
the Issuing Bank from the Borrower, the Issuing Bank shall promptly pay
to each Lender an amount equal to its Applicable Commitment Percentage
of such payment from the Borrower.
(e) Promptly following the end of each calendar quarter,
the Issuing Bank shall deliver to the Agent a notice describing the
aggregate undrawn amount of all Letters of Credit at the end of such
quarter. Upon the request of any Lender from time to time, the Issuing
Bank shall deliver to the Agent, and the Agent shall deliver to such
Lender, any other information reasonably requested by such Lender with
respect to each Letter of Credit outstanding.
(f) Unless otherwise expressly agreed by the Issuing Bank
and the Borrower when a Letter of Credit is issued (including any such
agreement applicable to an Existing Letter of Credit), (i) the rules of
the "International Standby Practices 1998" published by the Institute
of International Banking Law & Practice (or such later version thereof
as may be in effect at the time of issuance) shall apply to each
standby Letter of Credit, and (ii) the rules of the Uniform Customs and
Practice for Documentary Credits, as most recently published by the
International Chamber of Commerce (the "ICC") at the time of issuance
shall apply to each commercial Letter of Credit.
(g) The Borrower agrees that the Issuing Bank may, in its
sole discretion, accept or pay, as complying with the terms of any
Letter of Credit, any drafts or other documents, which on their face
otherwise comply with the terms of any Letter of Credit, which may be
signed or issued by an administrator, executor, trustee in bankruptcy,
debtor in possession, assignee for the benefit of creditors,
liquidator, receiver, attorney in fact or other legal representative of
a party who is authorized under such Letter of Credit to draw or issue
any drafts or other documents.
(h) Without limiting the generality of the provisions of
Section 13.9, the Borrower hereby agrees to indemnify and hold harmless
the Issuing Bank, each other Lender and the Agent from and against any
and all claims and damages, losses, liabilities,
33
reasonable costs and expenses which the Issuing Bank, such other Lender
or the Agent may incur (or which may be claimed against the Issuing
Bank, such other Lender or the Agent) by any Person by reason of or in
connection with the issuance or transfer of or payment or failure to
pay under any Letter of Credit; provided that the Borrower shall not be
required to indemnify the Issuing Bank, any other Lender or the Agent
for any claims, damages, losses, liabilities, costs or expenses to the
extent, but only to the extent, (i) caused by the willful misconduct or
gross negligence of the party to be indemnified or (ii) caused by the
failure of the Issuing Bank to pay under any Letter of Credit after the
presentation to it of a request for payment strictly complying with the
terms and conditions of such Letter of Credit, unless such payment is
prohibited by any law, regulation, court order or decree. The
indemnification and hold harmless provisions of this Section 3.2(h)
shall survive repayment of the Obligations, occurrence of the Revolving
Credit Termination Date, the Facility Termination Date and expiration
or termination of this Agreement.
(i) Without limiting Borrower's rights as set forth in
Section 3.2(h), the obligation of the Borrower to immediately reimburse
the Issuing Bank for drawings made under Letters of Credit and the
Issuing Bank's right to receive such payment shall be absolute,
unconditional and irrevocable, and such obligations of the Borrower
shall be performed strictly in accordance with the terms of this
Agreement and such Letters of Credit and the related Application and
Agreement for any Letter of Credit, under all circumstances whatsoever,
including the following circumstances:
(i) any lack of validity or enforceability of
the Letter of Credit, the obligation supported by the Letter of Credit
or any other agreement or instrument relating thereto (collectively,
the "Related LC Documents");
(ii) any amendment or waiver of or any consent to
or departure from all or any of the Related LC Documents approved in
writing by the Borrower;
(iii) the existence of any claim, setoff, defense
(other than the defense of payment in accordance with the terms of this
Agreement) or other rights which the Borrower may have at any time
against any beneficiary or any transferee of a Letter of Credit (or any
persons or entities for whom any such beneficiary or any such
transferee may be acting), the Agent, the Lenders or any other Person,
whether in connection with the Loan Documents, the Related LC Documents
or any unrelated transaction;
(iv) any breach of contract or other dispute
between the Borrower and any beneficiary or any transferee of a Letter
of Credit (or any persons or entities for whom such beneficiary or any
such transferee may be acting), the Agent, the Lenders or any other
Person;
(v) any draft, statement or any other document
presented under the Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect whatsoever; or
34
(vi) any delay, extension of time, renewal,
compromise or other indulgence or modification granted or agreed to by
the Agent, with or without notice to or approval by the Borrower in
respect of any of Borrower's Obligations under this Agreement.
3.3. Existing Letter of Credit. The Existing Letter of Credit shall
be deemed issued hereunder as of the Closing Date and constitute both usage of
the Total Letter of Credit Commitment and Letter of Credit Outstandings.
Accordingly, each of the Lenders (other than the Issuing Bank) shall be deemed
to have, as of the Closing Date, a Participation in the liability of the Issuing
Bank in respect of each such Existing Letter of Credit in an amount equal to
such Lender's Applicable Commitment Percentage of such liability.
ARTICLE IV
Loan Funding, Fees, and Payment Conventions
4.1. Interest Rate Options. Eurodollar Rate Loans and Base Rate
Loans may be outstanding at the same time and, so long as no Event of Default
shall have occurred and be continuing, the Borrower shall have the option to
elect the Type of Loan and the duration of the initial and any subsequent
Interest Periods and to Convert Loans in accordance with Sections 2.1(c)(i) and
4.2, as applicable; provided, however, (a) there shall not be outstanding at any
one time Eurodollar Rate Loans having more than eight (8) different Interest
Periods, (b) each Eurodollar Rate Loan (including each Conversion into and each
Continuation as a Eurodollar Rate Loan) shall be in an amount of $500,000 or, if
greater than $500,000 an integral multiple of $100,000, and (c) no Eurodollar
Rate Loan shall have an Interest Period that extends beyond the Stated
Termination Date. If the Agent does not receive a Borrowing Notice or an
Interest Rate Selection Notice giving notice of election of the duration of an
Interest Period or of Conversion of any Loan to or Continuation of a Loan as a
Eurodollar Rate Loan by the time prescribed by Sections 2.1(c)(i) and 4.2, as
applicable, the Borrower shall be deemed to have elected to obtain or Convert
such Loan to (or Continue such Loan as) a Base Rate Loan, in each case until the
Borrower notifies the Agent in accordance with Section 4.2. The Borrower shall
not be entitled to elect to Continue any Loan as or Convert any Loan into a
Eurodollar Rate Loan if an Event of Default shall have occurred and be
continuing.
4.2. Conversions and Elections of Subsequent Interest Periods.
Subject to the limitations set forth in the definition of "Interest Period" and
in Section 4.1 and Article VI, the Borrower may:
(a) upon delivery of telephonic notice to the Agent
(which shall be irrevocable) on or before 10:30 A.M. on any Business
Day, Convert any Eurodollar Rate Loan to a Base Rate Loan on the last
day of the Interest Period for such Eurodollar Rate Loan; and
(b) provided that no Default or Event of Default shall
have occurred and be continuing, upon delivery of telephonic notice to
the Agent (which shall be irrevocable) on or before 10:30 A.M. three
(3) Business Days' prior to the date of such Conversion or
Continuation:
35
(i) elect a subsequent Interest Period for any Eurodollar
Rate Loan to begin on the last day of the then current Interest Period
for such Eurodollar Rate Loan; or
(ii) Convert any Base Rate Loan to a Eurodollar Rate Loan
on any Business Day.
Each such notice shall be effective upon receipt by the Agent, shall specify the
amount of the Eurodollar Rate Loan affected, and, if a Continuation as or
Conversion into a Eurodollar Rate Loan, the Interest Period to be used in the
computation of interest. The Authorized Representative shall provide the Agent
written confirmation of each such telephonic notice in the form of a Borrowing
Notice or Interest Rate Selection Notice (as applicable) with appropriate
insertions but failure to provide such confirmation shall not affect the
validity of such telephonic notice. Notice of receipt of such Borrowing Notice
or Interest Rate Selection Notice, as the case may be, shall be provided by the
Agent to each Lender by telefacsimile transmission with reasonable promptness,
but (provided the Agent shall have received such notice by 10:30 A.M.) not later
than 3:00 P.M. on the same day as the Agent's receipt of such notice. All such
Continuations or Conversions of Loans shall be effected pro rata based on the
Applicable Commitment Percentages of the Lenders.
4.3. Payment of Interest. The Borrower shall pay interest on the
outstanding and unpaid principal amount of each Loan, commencing on the first
date of such Loan until such Loan shall be repaid, at the applicable Base Rate
or Eurodollar Rate as designated by the Borrower in the related Borrowing Notice
or Interest Rate Selection Notice or as otherwise provided hereunder. Interest
on each Loan shall be paid on the earlier of (a) in the case of any Base Rate
Loan, quarterly in arrears of the last Business Day of each June, September,
December and March, commencing on December 31, 2002, until the Revolving Credit
Termination Date, at which date the entire principal amount of and all accrued
interest on the Loans shall be paid in full, (b) in the case of any Eurodollar
Rate Loan, on last day of the applicable Interest Period for such Eurodollar
Rate Loan and if such Interest Period extends for more than three (3) months, at
intervals of three (3) months after the first day of such Interest Period, and
(c) upon payment in full of the related Loan; provided, however, that if any
Event of Default shall occur and be continuing, all amounts outstanding
hereunder shall bear interest thereafter until paid in full at the Default Rate
until paid in full or such Event of Default is waived.
4.4. Prepayments of Eurodollar Rate Loans. Whenever any payment of
principal shall be made in respect of any Eurodollar Rate Loan hereunder,
whether at maturity, on acceleration, by optional or mandatory prepayment or as
otherwise required or permitted hereunder, with the effect that any Eurodollar
Rate Loan shall be prepaid in whole or in part prior to the last day of the
Interest Period applicable to such Eurodollar Rate Loan, such payment of
principal shall be accompanied by the additional payment, if any, required by
Section 6.5.
4.5. Manner of Payment.(a) Each payment of principal (including any
prepayment) and payment of interest and fees, and any other amount required to
be paid by or on behalf of the Borrower to the Lenders, the Issuing Bank, the
Agent, or Bank of America with respect to any Loan, Letter of Credit, or
Reimbursement Obligation shall be made to the Agent at the Principal Office in
Dollars in immediately available funds without condition or deduction or for any
setoff, recoupment, deduction or counterclaim on or before 2:30 P.M. on the date
such payment is due.
36
The Agent may, but shall not be obligated to, debit the amount of such payment
from any one or more ordinary deposit accounts of the Borrower with the Agent.
(b) Any payment made by or on behalf of the Borrower that
is not made both in Dollars in immediately available funds and prior to
2:30 P.M. on the date such payment is to be made shall constitute a
non-conforming payment. Any such non-conforming payment shall not be
deemed to be received until the later of (i) the time such funds become
available funds and (ii) the next Business Day. Interest shall continue
to accrue at the applicable interest rate on any principal or fees as
to which a non-conforming payment is made from the date such amount was
due and payable until the later of (i) the date such funds become
available funds or (ii) the next Business Day.
(c) In the event that any payment hereunder or under any
of the Notes becomes due and payable on a day other than a Business
Day, then such due date shall be extended to the next succeeding
Business Day unless provided otherwise under the definition of
"Interest Period"; provided, however, that interest shall continue to
accrue during the period of any such extension; and provided further,
however, that in no event shall any such due date be extended beyond
the Revolving Credit Termination Date.
4.6. Fees. (a) Commitment Fee. For the period beginning on the
Closing Date and ending on the Revolving Credit Termination Date, the Borrower
agrees to pay to the Agent, for the pro rata benefit of the Lenders based on
their Applicable Commitment Percentages, a commitment fee equal to the
Applicable Commitment Fee multiplied by the average daily amount by which the
Total Revolving Credit Commitment exceeds the sum of (i) Revolving Credit
Outstandings plus (ii) Letter of Credit Outstandings. Such fees shall be due in
arrears on the last Business Day of each June, September, December and March,
commencing on December 31, 2002 to and on the Revolving Credit Termination Date.
Notwithstanding the foregoing, so long as any Lender fails to make available any
portion of its Revolving Credit Commitment when requested, such Lender shall not
be entitled to receive payment of its pro rata share of such fee until such
Lender shall make available such portion.
(b) Letter of Credit Facility Fees. The Borrower shall
pay to the Agent, for the pro rata benefit of the Lenders based on
their Applicable Commitment Percentages, a fee on the aggregate amount
available to be drawn on each outstanding Letter of Credit at a rate
equal to the Applicable Margin for Eurodollar Rate Loans on each
Determination Date. Such fees shall be due with respect to each Letter
of Credit quarterly in arrears on the last Business Day of each June,
September, December and March, the first such payment to be made on the
first such date occurring after the date of issuance of a Letter of
Credit.
(c) Letter of Credit Fronting and Administrative Fees.
From and after the date on which there is more than one Lender, the
Borrower shall pay to the Issuing Bank a fronting fee of one-eighth of
one percent per annum (0.125%) on the aggregate amount available to be
drawn on each outstanding Letter of Credit, such fee to be payable
quarterly in arrears with respect to each Letter of Credit on the dates
established in Section 4.6(b) for the payment of Letter of Credit
facility fees with respect to such Letter of Credit.
37
4.7. Pro Rata Payments. Except as otherwise specified herein, (a)
each payment on account of the principal of and interest on Loans, the fees
described in Section 4.6(a) and (b), and Reimbursement Obligations as to which
the Lenders have funded their respective Participations which remain
outstanding, shall be made to the Agent for the account of the Lenders pro rata
based on their Applicable Commitment Percentages, and (b) the Agent will
promptly distribute to the Lenders in immediately available funds payments
received in fully collected, immediately available funds from the Borrower.
4.8. Computation of Rates and Fees. Except as may be otherwise
expressly provided, (i) the Base Rate shall be computed on the basis of a year
of 365/6 days and calculated for actual days elapsed, and (ii) all other
interest rates (including each Eurodollar Rate and the Default Rate) and fees
shall be computed on the basis of a year of 360 days and calculated for actual
days elapsed.
4.9. Deficiency Advances; Failure to Purchase Participations. The
obligations of the Lenders hereunder to make Loans and to fund participations in
Letters of Credit are several and not joint. The failure of any Lender to make
any Loan or to fund any such participation on any date required hereunder shall
not relieve any other Lender of its corresponding obligation to do so on such
date, and no Lender shall be responsible for the failure of any other Lender to
so make its Loan or purchase its participation, nor shall the Revolving Credit
Commitment or Letter of Credit Commitment of any Lender hereunder be increased
as a result of such failure of any other Lender. Without limiting the generality
of the foregoing or the provisions of Section 4.10, in the event any Lender
shall fail to advance funds to the Borrower as herein provided, the Agent may in
its discretion, but shall not be obligated to, advance under the applicable Note
in its favor as a Lender all or any portion of such amount or amounts (each, a
"deficiency advance") and shall thereafter be entitled to payments of principal
of and interest on such deficiency advance in the same manner and at the same
interest rate or rates to which such other Lender would have been entitled had
it made such Advance under its Note; provided that, (i) such defaulting Lender
shall not be entitled to receive payments of principal, interest or fees with
respect to such deficiency advance until such deficiency advance (together with
interest thereon as provided in clause (ii)) shall be paid by such Lender and
(ii) upon payment to the Agent from such other Lender of the entire outstanding
amount of each such deficiency advance, together with accrued and unpaid
interest thereon, from the most recent date or dates interest was paid to the
Agent by a Borrower on each Loan comprising the deficiency advance at the
Federal Funds Rate, then such payment shall be credited against the applicable
Note of the Agent in full payment of such deficiency advance and the Borrower
shall be deemed to have borrowed the amount of such deficiency advance from such
other Lender as of the most recent date or dates, as the case may be, upon which
any payments of interest were made by such Borrower thereon. In the event any
Lender shall fail to fund its purchase of a Participation after notice from the
Issuing Bank, such Lender shall pay to the Issuing Bank, such amount on demand,
together with interest on the amount so due from the date of such notice at the
Federal Funds Rate on the date such purchase price is received by the Issuing
Bank.
4.10. Intraday Funding. Without limiting the provisions of Section
4.9, unless the Borrower or any Lender has notified the Agent, prior to the date
any payment is required to be made by it to the Agent hereunder, that the
Borrower or such Lender, as the case may be, will not make such payment, the
Agent may assume that the Borrower or such Lender, as the case may
38
be, has timely made such payment and may (but shall not be so required to), in
reliance thereon, make available a corresponding amount to the Person entitled
thereto. If and to the extent that such payment was not in fact made to the
Agent in immediately available funds, then:
(i) if the Borrower failed to make such payment, each
Lender shall forthwith on demand repay to the Agent the portion of such
assumed payment that was made available to such Lender in immediately
available funds, together with interest thereon in respect of each day
from and including the date such amount was made available by the Agent
to such Lender to the date such amount is repaid to the Agent in
immediately available funds at the Federal Funds Rate from time to time
in effect; and
(ii) if any Lender failed to make such payment, such
Lender shall forthwith on demand pay to the Agent the amount thereof in
immediately available funds, together with interest thereon for the
period from the date such amount was made available by the Agent to the
Borrower to the date such amount is recovered by the Agent (the
"Compensation Period") at a rate per annum equal to the Federal Funds
Rate from time to time in effect. If such Lender pays such amount to
the Agent, then such amount shall constitute such Lender's Commitment
included in the applicable Loan. If such Lender does not pay such
amount forthwith upon the Agent's demand therefor, the Agent may make a
demand therefor upon the Borrower, and the Borrower shall pay such
amount to the Agent, together with interest thereon for the
Compensation Period at a rate per annum equal to the rate of interest
applicable to the applicable Loan. Nothing herein shall be deemed to
relieve any Lender from its obligation to fulfill its Commitment or to
prejudice any rights which the Agent or the Borrower may have against
any Lender as a result of any default by such Lender hereunder.
A notice of the Agent to any Lender or the Borrower with respect to any
amount owing under this Section 4.10 shall be conclusive, absent manifest error.
ARTICLE V
Security
5.1. Security. As security for the full and timely payment and
performance of all Obligations, the Borrower shall, and shall cause all other
Credit Parties to, on or before the Closing Date, do or cause to be done all
things necessary in the opinion of the Agent and its counsel to grant to the
Agent for the benefit of the Lenders or maintain a duly perfected first priority
security interest in all Collateral subject to no prior Lien or other
encumbrance or restriction on transfer (other than Permitted Liens and
restrictions on transfer imposed by applicable securities laws). Without
limiting the foregoing, the Borrower shall on the Closing Date deliver to the
Agent, in form and substance reasonably acceptable to the Agent, (A) the
Security Agreement and (B) (i) a Pledge Agreement which shall pledge to the
Agent for the benefit of the Agent and the Lenders all of the Subsidiary
Securities (other than Management Securities) of Pei Wei, (ii) the certificated
securities representing the Subsidiary Securities, together with undated stock
powers or other appropriate transfer documents endorsed in blank pertaining
thereto, and (iii) Uniform Commercial Code financing statements reflecting the
Lien in favor of the Agent on such Subsidiary Securities, each in form and
substance reasonably
39
acceptable to the Agent, and shall take such further action and deliver or cause
to be delivered such further documents as required by the Security Instruments
or otherwise as the Agent may reasonably request to effect the transactions
contemplated by this Article V.
5.2. Further Assurances. At the request of the Agent, the Borrower
will or will cause all other Credit Parties, as the case may be, to execute, by
its duly authorized officers, alone or with the Agent, any certificate,
instrument, financing statement, control agreement, statement or document, or to
procure any such certificate, instrument, statement or document, or to take such
other action (and pay all connected costs) which the Agent reasonably deems
necessary from time to time to create, continue or preserve the liens and
security interests in Collateral (and the perfection and priority thereof) of
the Agent contemplated hereby and by the other Loan Documents and specifically
including all Collateral acquired by the Borrower or other Credit Party after
the Closing Date. The Agent is hereby irrevocably authorized to execute and file
or cause to be filed, with or if permitted by applicable law without the
signature of the Borrower or any Credit Party appearing thereon, all Uniform
Commercial Code financing statements reflecting the Borrower or any other Credit
Party as "debtor" and the Agent as "secured party", and continuations thereof
and amendments thereto, as the Agent reasonably deems necessary or advisable to
give effect to the transactions contemplated hereby and by the other Loan
Documents.
ARTICLE VI
Change in Circumstances
6.1. Increased Cost and Reduced Return.
(a) If, after the date hereof, the adoption of any
applicable law, rule, or regulation, or any change in any applicable
law, rule, or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank, or
comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender (or its Applicable Lending Office)
with any request or directive (whether or not having the force of law)
of any such governmental authority, central bank, or comparable agency:
(i) shall subject such Lender (or its Applicable Lending
Office) to any tax, duty, or other charge with respect to any
Eurodollar Rate Loans, its Note, or its obligation to make Eurodollar
Rate Loans, or change the basis of taxation of any amounts payable to
such Lender (or its Applicable Lending Office) under this Agreement or
its Note in respect of any Eurodollar Rate Loans (other than taxes
imposed on the overall net income of such Lender by the jurisdiction in
which such Lender has its principal office or such Applicable Lending
Office);
(ii) shall impose, modify, or deem applicable any reserve,
special deposit, assessment, or similar requirement (other than the
Reserve Requirement utilized in the determination of the Eurodollar
Rate) relating to any extensions of credit or other assets of, or any
deposits with or other liabilities or commitments of, such Lender (or
its
40
Applicable Lending Office), including the Revolving Credit Commitment
of such Lender hereunder; or
(iii) shall impose on such Lender (or its Applicable
Lending Office) or on the London interbank market any other condition
affecting this Agreement or its Note or any of such extensions of
credit or liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of making, Converting into, Continuing, or
maintaining any Loans or to reduce any sum received or receivable by such Lender
(or its Applicable Lending Office) under this Agreement or its Note with respect
to any Eurodollar Rate Loans, then the Borrower shall pay to such Lender on
demand such amount or amounts as will compensate such Lender for such increased
cost or reduction. If any Lender requests compensation by the Borrower under
this Section 6.1(a), the Borrower may, by notice to such Lender (with a copy to
the Agent), suspend the obligation of such Lender to make or Continue Eurodollar
Rate Loans with respect to which such compensation is requested, or to Convert
Loans of any other Type into Eurodollar Rate Loans, until the event or condition
giving rise to such request ceases to be in effect (in which case the provisions
of Section 6.4 shall be applicable); provided that such suspension shall not
affect the right of such Lender to receive the compensation so requested.
(b) If, after the date hereof, any Lender shall have
determined that the adoption of any applicable law, rule, or regulation
regarding capital adequacy or any change therein or in the
interpretation or administration thereof by any governmental authority,
central bank, or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital
adequacy (whether or not having the force of law) of any such
governmental authority, central bank, or comparable agency, has or
would have the effect of reducing the rate of return on the capital of
such Lender or any corporation controlling such Lender as a consequence
of such Lender's obligations hereunder to a level below that which such
Lender or such corporation could have achieved but for such adoption,
change, request, or directive (taking into consideration its policies
with respect to capital adequacy), then from time to time upon demand
the Borrower shall pay to such Lender such additional amount or amounts
as will compensate such Lender for such reduction.
(c) Each Lender shall promptly notify the Borrower and
the Agent of any event of which it has knowledge, occurring after the
date hereof, which will entitle such Lender to compensation pursuant to
this Section 6.1 and will designate a different Applicable Lending
Office if such designation will avoid the need for, or reduce the
amount of, such compensation and will not, in the judgment of such
Lender, be otherwise disadvantageous to it. Any Lender claiming
compensation under this Section 6.1 shall furnish to the Borrower and
the Agent a statement setting forth the additional amount or amounts to
be paid to it hereunder which shall be conclusive in the absence of
manifest error. In determining such amount, such Lender may use any
reasonable averaging and attribution methods.
6.2. Limitation on Types of Loans. If on or prior to the first day
of any Interest Period for any Eurodollar Rate Loan:
41
(a) the Agent reasonably determines (which determination
shall be conclusive) that by reason of circumstances affecting the
relevant market, adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate for such Interest Period; or
(b) the Required Lenders determine (which determination
shall be conclusive) and notify the Agent that the Eurodollar Rate will
not adequately and fairly reflect the cost to the Lenders of funding
Eurodollar Rate Loans for such Interest Period;
then the Agent shall give the Borrower prompt notice thereof specifying the
relevant amounts or periods, and so long as such condition remains in effect,
the Lenders shall be under no obligation to make additional Eurodollar Rate
Loans, Continue Eurodollar Rate Loans, or to Convert Loans of any other Type
into Eurodollar Rate Loans using such Interest Period and the Borrower shall, on
the last day(s) of the then current Interest Period(s) for the outstanding
Eurodollar Rate Loans, either prepay such Eurodollar Rate Loans or Convert such
Eurodollar Rate Loans into another Type of Loan or select an alternate Interest
Period available for such Eurodollar Rate Loans all in accordance with the terms
of this Agreement.
6.3. Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to make, maintain, or fund Eurodollar Rate Loans
hereunder, then such Lender shall promptly notify the Borrower thereof and such
Lender's obligation to make or Continue Eurodollar Rate Loans and to Convert
other Types of Loans into Eurodollar Rate Loans shall be suspended until such
time as such Lender may again make, maintain, and fund Eurodollar Rate Loans (in
which case the provisions of Section 6.4 shall be applicable).
6.4. Treatment of Affected Loans. If the obligation of any Lender
to make a Eurodollar Rate Loan or to Continue, or to Convert Loans of any other
Type into, Eurodollar Loans shall be suspended pursuant to Section 6.1 or 6.3
hereof (Loans of such Type being herein called "Affected Loans" and such Type
being herein called the "Affected Type"), such Lender's Affected Loans shall be
automatically Converted into Base Rate Loans on the last day(s) of the then
current Interest Period(s) for Affected Loans (or, in the case of a Conversion
required by Section 6.3 hereof, on such earlier date as such Lender may specify
to the Borrower with a copy to the Agent) and, unless and until such Lender
gives notice as provided below that the circumstances specified in Section 6.1
or 6.3 hereof that gave rise to such Conversion no longer exist:
(a) to the extent that such Lender's Affected Loans have
been so Converted, all payments and prepayments of principal that would
otherwise be applied to such Lender's Affected Loans shall be applied
instead to its Base Rate Loans; and
(b) all Loans that would otherwise be made or Continued
by such Lender as Loans of the Affected Type shall be made or Continued
instead as Base Rate Loans, and all Loans of such Lender that would
otherwise be Converted into Loans of the Affected Type shall be
Converted instead into (or shall remain as) Base Rate Loans.
42
If such Lender gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in Section 6.1 or 6.3 hereof that gave rise to the
Conversion of such Lender's Affected Loans pursuant to this Section 6.4 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Loans of the Affected Type made by other
Lenders are outstanding, such Lender's Base Rate Loans shall be automatically
Converted, on the first day(s) of the next succeeding Interest Period(s) for
such outstanding Loans of the Affected Type, to the extent necessary so that,
after giving effect thereto, all Loans held by the Lenders holding Loans of the
Affected Type and by such Lender are held pro rata (as to principal amounts,
Types, and Interest Periods) in accordance with their respective Revolving
Credit Commitments.
6.5. Compensation. Upon the request of any Lender, the Borrower
shall pay to such Lender such amount or amounts as shall be sufficient (in the
reasonable opinion of such Lender) to compensate it for any actual loss, cost,
or expense (including loss of demonstrable anticipated profits) incurred by it
as a result of:
(a) any payment, prepayment, or Conversion of a
Eurodollar Rate Loan for any reason (including, without limitation, the
acceleration of the Loans pursuant to Section 11.1) on a date other
than the last day of the Interest Period for such Loan; or
(b) any failure by the Borrower for any reason
(including, without limitation, the failure of any condition precedent
specified in Article VII to be satisfied) to borrow, Convert, Continue,
or prepay a Eurodollar Rate Loan on the date for such borrowing,
Conversion, Continuation, or prepayment specified in the relevant
notice of borrowing, prepayment, Continuation, or Conversion under this
Agreement.
6.6. Taxes. (a) Any and all payments by the Borrower to or for the
account of any Lender or the Agent hereunder or under any other Loan Document
shall be made free and clear of and without deduction for any and all present or
future taxes, duties, levies, imposts, deductions, charges or withholdings, and
all liabilities with respect thereto, excluding, in the case of each Lender and
the Agent, taxes imposed on its income, and franchise taxes imposed on it, by
the jurisdiction under the laws of which such Lender (or its Applicable Lending
Office) or the Agent (as the case may be) is organized or any political
subdivision thereof (all such non-excluded taxes, duties, levies, imposts,
deductions, charges, withholdings, and liabilities being hereinafter referred to
as "Taxes"). If the Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable under this Agreement or any other Loan Document
to any Lender or the Agent, (i) the sum payable shall be increased as necessary
so that after making all required deductions (including deductions applicable to
additional sums payable under this Section 6.6) such Lender or the Agent
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions, (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law, and (iv) the Borrower
shall furnish to the Agent, at its address referred to in Section 13.2, the
original or a certified copy of a receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any and all
present or future stamp or documentary taxes and any other excise or
property taxes or charges or similar levies
43
which arise from any payment made under this Agreement or any other
Loan Document or from the execution or delivery of, or otherwise with
respect to, this Agreement or any other Loan Document (hereinafter
referred to as "Other Taxes").
(c) The Borrower agrees to indemnify each Lender and the
Agent for the full amount of Taxes and Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this Section 6.6) paid by such
Lender or the Agent (as the case may be) and any liability (including
penalties, interest, and expenses) arising therefrom or with respect
thereto.
(d) Each Lender organized under the laws of a
jurisdiction outside the United States, on or prior to the date of its
execution and delivery of this Agreement in the case of each Lender
listed on the signature pages hereof and on or prior to the date on
which it becomes a Lender in the case of each other Lender, and from
time to time thereafter if requested in writing by the Borrower or the
Agent (but only so long as such Lender remains lawfully able to do so),
shall provide the Borrower and the Agent with (i) Internal Revenue
Service Form 1001 or 4224, as appropriate, or any successor form
prescribed by the Internal Revenue Service, certifying that such Lender
is entitled to benefits under an income tax treaty to which the United
States is a party which reduces the rate of withholding tax on payments
of interest or certifying that the income receivable pursuant to this
Agreement is effectively connected with the conduct of a trade or
business in the United States, (ii) Internal Revenue Service Form W-8
or W-9, as appropriate, or any successor form prescribed by the
Internal Revenue Service, and (iii) any other form or certificate
required by any taxing authority (including any certificate required by
Sections 871(h) and 881(c) of the Internal Revenue Code), certifying
that such Lender is entitled to an exemption from or a reduced rate of
tax on payments pursuant to this Agreement or any of the other Loan
Documents.
(e) For any period with respect to which a Lender has
failed to provide the Borrower and the Agent with the appropriate form
pursuant to Section 6.6(d) (unless such failure is due to a change in
treaty, law, or regulation occurring subsequent to the date on which a
form originally was required to be provided), such Lender shall not be
entitled to indemnification under Section 6.6(a) or 6.6(b) with respect
to Taxes imposed by the United States; provided, however, that should a
Lender, which is otherwise exempt from or subject to a reduced rate of
withholding tax, become subject to Taxes because of its failure to
deliver a form required hereunder, the Borrower shall take such steps
as such Lender shall reasonably request to assist such Lender to
recover such Taxes.
(f) If the Borrower is required to pay additional amounts
to or for the account of any Lender pursuant to this Section 6.6, then
such Lender will agree to use reasonable efforts to change the
jurisdiction of its Applicable Lending Office so as to eliminate or
reduce any such additional payment which may thereafter accrue if such
change, in the reasonable judgment of such Lender, is not otherwise
disadvantageous to such Lender.
(g) Within thirty (30) days after the date of any payment
of Taxes, the Borrower shall furnish to the Agent the original or a
certified copy of a receipt evidencing such payment.
44
(h) Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and obligations of
the Borrower contained in this Section 6.6 shall survive the
termination of the Revolving Credit Commitments and the payment in full
of the Notes and the Facility Termination Date.
ARTICLE VII
Conditions to Making Loans and Issuing Letters of Credit
7.1. Conditions of Closing and Initial Advance. The closing of this
Agreement the obligation of the Issuing Bank to issue the Existing Letter of
Credit, is subject to the conditions precedent that:
(a) the Agent shall have received on the Closing Date, in
form and substance satisfactory to the Agent and Lenders, the
following:
(i) executed originals of each of this
Agreement, the Notes, and the other Loan Documents;
(ii) evidence of the filing of Uniform Commercial
Code financing statements, amendments to financing statements
previously filed or USPTO Documents reflecting the filing in
all places required by applicable law to perfect the Liens of
the Agent under the Security Instruments as a first priority
Lien as to items of Collateral in which a security interest
may be perfected by the filing of financing statements or
USPTO Documents, and such other documents and/or evidence of
other actions as may be necessary under applicable law to
perfect the Liens of the Agent under the Security Instruments
as a first priority Lien in and to such other Collateral as
the Agent may require, including without limitation:
(A) the delivery by the Borrower of all
stock certificates evidencing Pledged Interests
accompanied in each case by duly executed stock
powers (or other appropriate transfer documents) in
blank affixed thereto; and
(B) the delivery by the Borrower of all
USPTO Documents.
(iii) evidence that all fees payable by the
Borrower on the Closing Date pursuant to this Agreement to the
Agent, BAS and the Lenders have been paid in full, including
all current and past due legal fees, expenses and
disbursements owing to Helms Mulliss & Wicker, PLLC (formerly
known as Smith Helms Mulliss & Moore, LLP); and
7.2. Conditions of Initial Advance and Letter of Credit Issuances.
The obligation of the Lenders to make the initial Advance under the Revolving
Credit Facility, and of the Issuing Bank to issue any Letter of Credit (other
than the Existing Letter of Credit), is subject to the conditions precedent
that:
45
(a) the Agent shall have received on the Funding Date, in
form and substance satisfactory to the Agent and Lenders, the
following:
(i) schedules and exhibits to this Agreement and
the other Loan Documents certified by an authorized
representative of the Borrower as correct as of both the
Closing Date and the Funding Date;
(ii) the favorable written opinion or opinions
with respect to the Loan Documents and the transactions
contemplated thereby of counsel to the Credit Parties dated
the Funding Date, addressed to the Agent and the Lenders and
satisfactory to special counsel to the Agent, substantially in
the form of Exhibit G, opining as necessary to matters
effective as of the Closing Date;
(iii) resolutions of the boards of directors or
other appropriate governing body (or of the appropriate
committee thereof) of each Credit Party effective as of the
Closing Date certified by its secretary or assistant secretary
as of the Funding Date, approving and adopting the Loan
Documents to be executed by such Person, and authorizing the
execution and delivery thereof;
(iv) specimen signatures of officers or other
appropriate representatives executing the Loan Documents on
behalf of each of the Credit Parties, certified by the
secretary or assistant secretary of such Credit Party
effective as of the Closing Date;
(v) for each Credit Party, copies of the
Organizational Documents of such Credit Party certified as of
a recent date by the Secretary of State of its state of
organization;
(vi) for each Credit Party, copies of the
Operating Documents of such Credit Party certified as of the
Funding Date as true and correct on and subsequent to the
Closing Date by its secretary or assistant secretary;
(vii) certificates issued as of a recent date by
the Secretaries of State of the respective jurisdictions of
formation of each of the Credit Parties as to the due
existence and good standing of such Person;
(viii) notice of appointment of the initial
Authorized Representative(s);
(ix) certificate of an executive officer of the
Borrower confirming the matters set forth in Section 7.2(b);
(x) a Borrowing Notice, if any, and, if elected
by the Borrower, an Interest Rate Selection Notice;
(xi) evidence that all fees payable by the
Borrower on the Funding Date pursuant to this Agreement to the
Agent, BAS and the Lenders have been
46
paid in full, including all legal fees, expenses and
disbursements owing to Helms Mulliss & Wicker, PLLC; and
(xii) such other documents, instruments,
certificates and opinions as the Agent or any Lender may
reasonably request on or prior to the Funding Date in
connection with the consummation of the transactions
contemplated hereby; and
(b) In the good faith judgment of the Agent and the
Lenders:
(i) there shall not have occurred or become
known to the Agent or the Lenders any event, condition,
situation or status since December 31, 2001 that has had or
could reasonably be expected to result in a Material Adverse
Effect;
(ii) no litigation, action, suit, investigation
or other arbitral, administrative or judicial proceeding shall
be pending or threatened which could reasonably be likely to
result in a Material Adverse Effect;
(iii) there shall not have occurred any material
disruption of or a material adverse change in conditions in
the financial, banking or capital markets which the Agent and
BAS, in their sole discretion, deem material in connection
with the syndication of the Revolving Credit Facility; and
(iv) the Credit Parties shall have received all
approvals, consents and waivers, and shall have made or given
all necessary filings and notices as shall be required to
consummate the transactions contemplated hereby without the
occurrence of any default under, conflict with or violation of
(A) any applicable law, rule, regulation, order or decree of
any Governmental Authority or arbitral authority or (B) any
agreement, document or instrument to which any of the Credit
Parties is a party or by which any of them or their properties
is bound, except for such approvals, consents, waivers,
filings and notices the receipt, making or giving of which
will not have a Material Adverse Effect.
7.3. Conditions of Loans and Letter of Credit. The obligations of
the Lenders to make any Loans and the Issuing Bank to issue any Letter of Credit
(other than the Existing Letter of Credit) hereunder on or subsequent to the
Funding Date are subject to the satisfaction of the following conditions:
(a) the Agent shall have received a Borrowing Notice if
required by Article II;
(b) the representations and warranties of the Credit
Parties set forth in Article VIII and in each of the other Loan
Documents shall be true and correct in all material respects on and as
of the date of such Advance or Letter of Credit issuance or renewal,
with the same effect as though such representations and warranties had
been made on and as of such date, except to the extent that such
representations and warranties expressly relate to an earlier date and
except that the financial statements referred to in Section 8.6(a)
shall be deemed (solely for the purpose of the representation and
warranty contained in such Section 8.6(a) but not for the purpose of
any cross reference to such
47
Section 8.6(a) or to the financial statements described therein
contained in any other provision of Section 8.6 or elsewhere in Article
8) to be those financial statements most recently delivered to the
Agent and the Lenders pursuant to Section 9.1 from the date financial
statements are delivered to the Agent and the Lenders in accordance
with such Section;
(c) in the case of the issuance of a Letter of Credit,
the Borrower shall have executed and delivered to the Issuing Bank an
Application and Agreement for Letter of Credit in form and content
reasonably acceptable to the Issuing Bank together with such other
instruments and documents as it shall request;
(d) at the time of (and after giving effect to) each
Advance or the issuance of a Letter of Credit, no Default or Event of
Default specified in Article XI shall have occurred and be continuing;
and
(e) immediately after giving effect to:
(i) a Loan, the aggregate principal balance of
all outstanding Loans for each Lender shall not exceed such
Lender's Revolving Credit Commitment;
(ii) a Letter of Credit or renewal thereof, the
aggregate principal balance of all outstanding Participations
in Letters of Credit and Reimbursement Obligations (or in the
case of the Issuing Bank, its remaining interest after
deduction of all Participations in Letters of Credit and
Reimbursement Obligations of other Lenders) for each Lender
and in the aggregate shall not exceed, respectively, (X) such
Lender's Letter of Credit Commitment or (Y) the Total Letter
of Credit Commitment; and
(iii) a Loan or a Letter of Credit or renewal
thereof, the sum of Letter of Credit Outstandings plus
Revolving Credit Outstandings shall not exceed the Total
Revolving Credit Commitment.
ARTICLE VIII
Representations and Warranties
The Borrower represents and warrants with respect to itself and to its
Subsidiaries (which representations and warranties shall survive the delivery of
the documents mentioned herein and the making of Loans), that:
8.1. Organization and Authority.
(a) The Borrower and each Subsidiary is a corporation,
partnership or limited liability company duly organized and validly
existing under the laws of the jurisdiction of its formation;
(b) The Borrower and each Subsidiary (x) has the
requisite power and authority to own its properties and assets and to
carry on its business as now being
48
conducted and as contemplated in the Loan Documents, and (y) is
qualified to do business in every jurisdiction in which failure so to
qualify would have a Material Adverse Effect;
(c) The Borrower has the power and authority to execute,
deliver and perform this Agreement and the Notes, and to borrow
hereunder, and to execute, deliver and perform each of the other Loan
Documents to which it is a party;
(d) Each Credit Party (other than the Borrower) has the
power and authority to execute, deliver and perform the Facility
Guaranty, the Security Instruments and each of the other Loan Documents
to which it is a party; and
(e) When executed and delivered, each of the Loan
Documents to which any Credit Party is a party will be the legal, valid
and binding obligation or agreement, as the case may be, of such Credit
Party, enforceable against such Credit Party in accordance with its
terms, subject to the effect of any applicable bankruptcy, moratorium,
insolvency, reorganization or other similar law affecting the
enforceability of creditors' rights generally and to the effect of
general principles of equity (whether considered in a proceeding at law
or in equity).
8.2. Loan Documents. The execution, delivery and performance by
each Credit Party of each of the Loan Documents to which it is a party:
(a) have been duly authorized by all requisite
Organizational Action of such Credit Party required for the lawful
execution, delivery and performance thereof;
(b) do not violate any provisions of (i) any applicable
law, rule or regulation, (ii) any judgment, writ, order, determination,
decree or arbitral award of any Governmental Authority or arbitral
authority binding on such Credit Party or its properties, or (iii) the
Organizational Documents or Operating Documents of such Credit Party,
except, with respect to clause (i) only, where such violation will not
have a Material Adverse Effect;
(c) does not and will not be in conflict with, result in
a breach of or constitute an event of default, or an event which, with
notice or lapse of time or both, would constitute an event of default,
under any material contract, indenture, agreement or other instrument
or document to which such Credit Party is a party, or by which the
properties or assets of such Credit Party are bound; and
(d) does not and will not result in the creation or
imposition of any Lien upon any of the properties or assets of such
Credit Party or any Subsidiary except any Liens in favor of the Agent
and the Lenders created by the Security Instruments.
8.3. Solvency. Each Credit Party is Solvent after giving effect to
the transactions contemplated by the Loan Documents.
49
8.4. Subsidiaries and Stockholders.
(a) The Borrower has no Subsidiaries other than those
Persons listed as Subsidiaries in Schedule 8.4 and additional
Subsidiaries created or acquired after the Closing Date in compliance
with Section 9.19; Schedule 8.4 states as of the date hereof the
organizational form of each entity, the authorized and issued
capitalization of each Subsidiary listed thereon, the number of shares
or other equity interests of each class of capital stock or interest
issued and outstanding of each such Subsidiary and the number and/or
percentage of outstanding shares or other equity interest (including
options, warrants and other rights to acquire any interest) of each
such class of capital stock or other equity interest owned by Borrower
or by any such Subsidiary; the outstanding shares or other equity
interests of each such Subsidiary have been duly authorized and validly
issued and are fully paid and nonassessable; and Borrower and each such
Subsidiary owns beneficially and of record all the shares and other
interests it is listed as owning in Schedule 8.4, free and clear of any
Lien.
(b) All Subsidiaries other than the Inactive Subsidiaries
are Guarantors.
8.5. Ownership Interests; Liens. Borrower owns no interest in any
Person other than the Persons listed in Schedule 8.4, equity investments in
Persons not constituting Subsidiaries permitted under Section 10.6 and
additional Subsidiaries created or acquired after the Closing Date in compliance
with Section 9.19.
8.6. Financial Condition.
(a) The Borrower has heretofore furnished to each Lender
an audited consolidated balance sheet of the Borrower and its
Subsidiaries as at January ___, 2002 and the notes thereto and the
related consolidated statements of income, stockholders' equity and
cash flows for the Fiscal Year then ended as examined and certified by
[Ernst & Young L.L.C.,] and unaudited consolidated interim financial
statements of the Borrower and its Subsidiaries consisting of a
consolidated balance sheets and related consolidated statements of
income, stockholders' equity and cash flows, in each case without
notes, for and as of the end of the thirty-nine week period ending
September 29, 2002. Except as set forth therein, such financial
statements (including the notes thereto) present fairly the financial
condition of the Borrower and its Subsidiaries as of the end of such
Fiscal Year and thirty-nine week period and results of their operations
and the changes in its stockholders' equity for the Fiscal Year and
interim period then ended, all in conformity with GAAP applied on a
Consistent Basis, subject however, in the case of unaudited interim
statements to year end audit adjustments;
(b) since the later of (i) the date of the audited
financial statements delivered pursuant to Section 8.6(a) hereof or
(ii) the date of the audited financial statements most recently
delivered pursuant to Section 9.1(a) hereof, there has been no material
adverse change in the condition, financial or otherwise, of the
Borrower or any of its Subsidiaries or in the businesses, properties,
performance, prospects or operations of the Borrower or its
Subsidiaries, nor have such businesses or properties been materially
adversely affected
50
as a result of any fire, explosion, earthquake, accident, strike,
lockout, combination of workers, flood, embargo or act of God; and
(c) except as set forth in the financial statements
referred to in Section 8.6(a) or in Schedule 8.6 or permitted by
Section 10.4, neither the Borrower nor any Subsidiary has incurred,
other than in the ordinary course of business, any material
Indebtedness, Contingent Obligation or other commitment or liability
which remains outstanding or unsatisfied.
8.7. Title to Properties. The Borrower and each of its Subsidiaries
and each other Credit Party has good and marketable title to all its owned real
properties and owns all its personal properties, subject to no transfer
restrictions or Liens of any kind, except for the transfer restrictions and
Liens described in Schedule 8.7 and Permitted Liens. The Borrower and each of
its Subsidiaries has a valid leasehold interest in all its leased real and
personal properties.
8.8. Taxes. The Borrower and each of its Subsidiaries has filed or
caused to be filed all federal, state and local tax returns which are required
to be filed by it and, except for (a) taxes and assessments the nonpayment of
which could not reasonably be expected to have a Material Adverse Effect and (b)
taxes and assessments being contested in good faith by appropriate proceedings
diligently conducted and against which reserves reflected in the financial
statements described in Section 8.6(a) or Sections 9.1(a) or (b) and
satisfactory to the Borrower's independent certified public accountants have
been established, have paid or caused to be paid all taxes as shown on said
returns or on any assessment received by it, to the extent that such taxes have
become due.
8.9. Other Agreements. No Credit Party nor any Subsidiary is
(a) a party to or subject to any judgment, order, decree,
agreement, lease or instrument, or subject to other restrictions, which
individually or in the aggregate could reasonably be expected to have a
Material Adverse Effect; or
(b) in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions
contained in any agreement or instrument to which such Credit Party or
any Subsidiary is a party, which default has, or if not remedied within
any applicable grace period could reasonably be likely to have, a
Material Adverse Effect.
8.10. Litigation. Except as set forth in Schedule 8.10, there is no
action, suit, investigation or proceeding at law or in equity or by or before
any governmental instrumentality or agency or arbitral body pending, or, to the
knowledge of the Borrower, threatened by or against the Borrower or any
Subsidiary or other Credit Party or affecting the Borrower or any Subsidiary or
other Credit Party or any properties or rights of the Borrower or any Subsidiary
or other Credit Party, which could reasonably be likely to have a Material
Adverse Effect.
8.11. Margin Stock. The proceeds of the borrowings made hereunder
will be used by the Borrower only for the purposes expressly authorized herein.
None of such proceeds will be used, directly or indirectly, for the purpose of
purchasing or carrying any margin stock or for the
51
purpose of reducing or retiring any Indebtedness which was originally incurred
to purchase or carry margin stock or for any other purpose which might
constitute any of the Loans under this Agreement a "purpose credit" within the
meaning of said Regulation U or Regulation X (12 C.F.R. Part 221) of the Board.
Neither the Borrower nor any agent acting in its behalf has taken or will take
any action which might cause this Agreement or any of the documents or
instruments delivered pursuant hereto to violate any regulation of the Board or
to violate the Securities Exchange Act of 1934, as amended, or the Securities
Act of 1933, as amended, or any state securities laws, in each case as in effect
on the date hereof.
8.12. Investment Company. No Credit Party is an "investment
company," or an "affiliated person" of, or "promoter" or "principal underwriter"
for, an "investment company", as such terms are defined in the Investment
Company Act of 1940, as amended (15 U.S.C. Section 80a-1, et seq.). The
application of the proceeds of the Loans and repayment thereof by the Borrower
and the performance by the Borrower and the other Credit Parties of the
transactions contemplated by the Loan Documents will not violate any provision
of said Act, or any rule, regulation or order issued by the Securities and
Exchange Commission thereunder, in each case as in effect on the date hereof.
8.13. Intellectual Property. The Borrower and each other Credit
Party owns or has the right to use, under valid license agreements or otherwise,
all its Intellectual Property, without known conflict with any patent, license,
franchise, trademark, trade secret, trade name, copyright, other proprietary
right of any other Person, and other than the trademarks listed in Schedule
8.13, neither the Borrower nor any Subsidiary owns or licenses any other
registered Intellectual Property.
8.14. No Untrue Statement. Neither (a) this Agreement nor any other
Loan Document or certificate or document executed and delivered by or on behalf
of the Borrower or any other Credit Party in accordance with or pursuant to any
Loan Document nor (b) any statement, representation, or warranty provided to the
Agent in connection with the negotiation or preparation of the Loan Documents
contains any material misrepresentation or material untrue statement of material
fact or omits to state a material fact necessary, in light of the circumstance
under which it was made, in order to make any such warranty, representation or
statement contained therein not materially misleading.
8.15. No Consents, Etc. Neither the respective businesses or
properties of the Credit Parties or any Subsidiary, nor any relationship among
the Credit Parties or any Subsidiary and any other Person, nor any circumstance
in connection with the execution, delivery and performance of the Loan Documents
and the transactions contemplated thereby, is such as to require a consent,
approval or authorization of, or filing, registration or qualification with, any
Governmental Authority or any other Person on the part of any Credit Party, that
has not been obtained by such Credit Party, as a condition to the execution,
delivery and performance of, or consummation of the transactions contemplated by
the Loan Documents, which, if not obtained or effected, would be reasonably
likely to have a Material Adverse Effect, or if so, such consent, approval,
authorization, filing, registration or qualification has been duly obtained or
effected, as the case may be.
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8.16. Employee Benefit Plans.
(a) The Borrower and each ERISA Affiliate is in
compliance with all applicable provisions of ERISA and the regulations
and published interpretations thereunder and in compliance with all
Foreign Benefit Laws with respect to all Employee Benefit Plans except
for any required amendments for which the remedial amendment period as
defined in Section 401(b) of the Code has not yet expired. Each
Employee Benefit Plan that is intended to be qualified under Section
401(a) of the Code has been determined or the Borrower or its
Subsidiaries is in the process of obtaining a determination by the
Internal Revenue Service to be so qualified, each trust related to such
plan has been determined to be exempt under Section 501(a) of the Code,
and each Employee Benefit Plan subject to any Foreign Benefit Law has
received the required approvals by any Governmental Authority
regulating such Employee Benefit Plan. No material liability has been
incurred by the Borrower or any ERISA Affiliate which remains
unsatisfied for any taxes or penalties with respect to any Employee
Benefit Plan or any Multiemployer Plan;
(b) Neither the Borrower nor any ERISA Affiliate has (i)
engaged in a nonexempt prohibited transaction described in Section 4975
of the Code or Section 406 of ERISA affecting any of the Employee
Benefit Plans or the trusts created thereunder which could subject any
such Employee Benefit Plan or trust to a material tax or penalty on
prohibited transactions imposed under Internal Revenue Code Section
4975 or ERISA, (ii) incurred any accumulated funding deficiency with
respect to any Employee Benefit Plan, whether or not waived, or any
other liability to the PBGC which remains outstanding other than the
payment of premiums and there are no premium payments which are due and
unpaid, (iii) failed to make a required contribution or payment to a
Multiemployer Plan, (iv) failed to make a required installment or other
required payment under Section 412 of the Code, Section 302 of ERISA or
the terms of such Employee Benefit Plan, or (v) failed to make a
required contribution or payment, or otherwise failed to operate in
compliance with any Foreign Benefit Law regulating any Employee Benefit
Plan;
(c) No Termination Event has occurred or is reasonably
expected to occur with respect to any Pension Plan or Multiemployer
Plan, and neither the Borrower nor any ERISA Affiliate has incurred any
unpaid withdrawal liability with respect to any Multiemployer Plan;
(d) The present value of all vested accrued benefits
under each Employee Benefit Plan which is subject to Title IV of ERISA,
or the funding of which is regulated by any Foreign Benefit Law did
not, as of the most recent valuation date for each such plan, exceed
the then current value of the assets of such Employee Benefit Plan
allocable to such benefits;
(e) To the best of the Borrower's knowledge, each
Employee Benefit Plan which is subject to Title IV of ERISA or the
funding of which is regulated by any Foreign Benefit Law, maintained by
the Borrower or any ERISA Affiliate, has been administered in
accordance with its terms in all material respects and is in compliance
in
53
all material respects with all applicable requirements of ERISA,
applicable Foreign Benefit Law and other applicable laws, regulations
and rules;
(f) The consummation of the Loans and the issuance of the
Letters of Credit provided for herein will not involve any prohibited
transaction under ERISA which is not subject to a statutory or
administrative exemption; and
(g) No material proceeding, claim, lawsuit and/or
investigation exists or, to the best knowledge of the Borrower after
due inquiry, is threatened concerning or involving any Employee Benefit
Plan.
8.17. No Default. As of the date hereof, there does not exist any
Default or Event of Default hereunder.
8.18. Environmental Laws. Except as listed on Schedule 8.18, the
Borrower and each Subsidiary is in compliance with all applicable Environmental
Laws and has been issued and currently maintains all required federal, state and
local permits, licenses, certificates and approvals except to the extent that
any noncompliance or failure to obtain or maintain such permits, licenses,
certificates or approvals could not reasonably be expected to have a Material
Adverse Effect. Except as listed on Schedule 8.18, neither the Borrower nor any
Subsidiary has been notified in writing of any pending or threatened action,
suit, proceeding or investigation, and neither the Borrower nor any Subsidiary
is aware of any facts, which (a) calls into question, or could reasonably be
expected to call into question, compliance by the Borrower or any Subsidiary
with any Environmental Laws, (b) seeks, or could reasonably be expected to form
the basis of a meritorious proceeding, to suspend, revoke or terminate any
license, permit or approval necessary for the operation of the Borrower's or any
Subsidiary's business or facilities or for the generation, handling, storage,
treatment or disposal of any Hazardous Materials, or (c) seeks to cause, or
could reasonably be expected to form the basis of a meritorious proceeding to
cause, any property of the Borrower or any Subsidiary or other Credit Party to
be subject to any restrictions on ownership, use, occupancy or transferability
under any Environmental Law.
8.19. Employment Matters. (a) None of the employees of the Borrower
or any Subsidiary is subject to any collective bargaining agreement and there
are no strikes, work stoppages, election or decertification petitions or
proceedings, unfair labor charges, equal opportunity proceedings, or other
material labor/employee related controversies or proceedings pending or, to the
actual knowledge of the Borrower, threatened against the Borrower or any
Subsidiary or between the Borrower or any Subsidiary and any of its employees,
other than employee grievances arising in the ordinary course of business which
could not reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect; and
(b) Except to the extent a failure to maintain compliance would
not have a Material Adverse Effect, the Borrower and each Subsidiary is in
compliance in all respects with all applicable laws, rules and regulations
pertaining to labor or employment matters, including without limitation those
pertaining to wages, hours, occupational safety and taxation and there is
neither pending nor, to the Borrower's actual knowledge, threatened any
litigation, administrative proceeding or, to the actual knowledge of the
Borrower, any investigation, in
54
respect of such matters which, if decided adversely, could reasonably be likely,
individually or in the aggregate, to have a Material Adverse Effect.
8.20. RICO. Neither the Borrower nor any Subsidiary is engaged in or
has engaged in any course of conduct that could subject any of their respective
properties to any Lien, seizure or other forfeiture under any criminal law,
racketeer influenced and corrupt organizations law, civil or criminal, or other
similar laws.
8.21. Operating Facilities. Schedule 8.21 contains a true and
complete list of all owned or leased restaurant, office and other operating
facilities of the Borrower and each Subsidiary and, as to each such facility,
describes (a) the address of the facility, (b) the type of facility, (c) whether
it is owned or leased by the Borrower or such Subsidiary, and (d) the identity
of such owner or lessee.
8.22. Inactive Subsidiaries. Each of the Inactive Subsidiaries is,
or is in the process of being, dissolved or terminated. None of the Inactive
Subsidiaries conducts business, owns or maintains any assets or has any
liabilities other than those pertaining to the maintenance of the Inactive
Subsidiaries existence and any necessary tax filings.
ARTICLE IX
Affirmative Covenants
Until the Facility Termination Date, unless the Required Lenders shall
otherwise consent in writing, the Borrower will, and where applicable will cause
each Subsidiary to:
9.1. Financial Reports, Etc. (a) As soon as practical and in any
event within 90 days after the end of each Fiscal Year of the Borrower, deliver
or cause to be delivered to the Agent and each Lender (i) consolidated and
consolidating balance sheets of the Borrower and its Subsidiaries as at the end
of such Fiscal Year, and the notes thereto, and the related consolidated and
consolidating statements of income, stockholders' equity and cash flows, and the
respective notes thereto, for such Fiscal Year, setting forth (other than for
consolidating statements) comparative financial statements for the preceding
Fiscal Year, in such form as any or all of the same have been or are being filed
for such Fiscal Year with the Securities and Exchange Commission (including
without limitation via EDGAR), all prepared in accordance with GAAP applied on a
Consistent Basis and containing, with respect to the consolidated financial
statements, opinions of Ernst & Young LLC, or other such independent certified
public accountants selected by the Borrower and approved by the Agent (such
approval not to be unreasonably withheld), which are unqualified as to the scope
of the audit performed and as to the "going concern" status of the Borrower and
without any exception not acceptable to the Lenders, and (ii) a certificate of
an Authorized Representative demonstrating compliance with Sections 10.1(a)
through 10.1(c), 10.4(h) and 10.6(g), which certificate shall be in the form of
Exhibit H;
(b) as soon as practical and in any event within 45 days after the
end of each fiscal quarter (except the last fiscal quarter of the Fiscal Year),
deliver to the Agent and each Lender (i)
55
consolidated and consolidating balance sheets of the Borrower and its
Subsidiaries as at the end of such fiscal quarter, and the related consolidated
and consolidating statements of income, stockholders' equity and cash flows for
such fiscal quarter and for the period from the beginning of the then current
Fiscal Year through the end of such reporting period, and accompanied by a
certificate of an Authorized Representative to the effect that such financial
statements present fairly the financial position of the Borrower and its
Subsidiaries as of the end of such fiscal period and the results of their
operations and the changes in their financial position for such fiscal period,
in conformity with the standards set forth in Section 8.6(a) with respect to
interim financial statements, and (ii) a certificate of an Authorized
Representative containing computations for such quarter comparable to that
required pursuant to Section 9.1(a)(ii);
(c) promptly upon their becoming available to the Borrower, the
Borrower shall deliver or make available to the Agent and each Lender a copy of
(i) all regular or special reports or effective registration statements which
Borrower or any Subsidiary shall file with the Securities and Exchange
Commission (or any successor thereto) or any securities exchange, (ii) any proxy
statement distributed by the Borrower or any Subsidiary to its shareholders,
bondholders or the financial community in general, and (iii) any management
letter or other report submitted to the Borrower or any Subsidiary by
independent accountants in connection with any annual, interim or special audit
of the Borrower or any Subsidiary;
(d) together with each delivery of financial statements required
by Section 9.1(a) or (b), deliver to the Agent and each Lender a supplement to
Schedule 8.22 reflecting any changes to the information provided therein;
(e) not later than the last Business Day of each Fiscal Year,
deliver to the Agent and each Lender a capital and operating expense budget and
consolidated financial projections for the Borrower and its Subsidiaries for the
next three (3) Fiscal Years prepared in good faith in accordance with prior
practice of the Borrower; and
(f) promptly, from time to time, deliver or cause to be delivered
to the Agent and each Lender such other information regarding Borrower's and any
Subsidiary's operations, business affairs and financial condition as the Agent
or such Lender may reasonably request;
The Agent and the Lenders are hereby authorized to deliver a copy of
any such financial or other information delivered hereunder to the Lenders (or
any affiliate of any Lender) or to the Agent, to any Governmental Authority
having jurisdiction over the Agent or any of the Lenders pursuant to any written
request therefor or in the ordinary course of examination of loan files, or to
any other Person who shall acquire or consider the assignment of, or acquisition
of any participation interest in, any Obligation permitted by this Agreement.
9.2. Maintain Properties. Maintain all properties necessary to its
operations in good working order and condition, make all needed repairs,
replacements and renewals to such properties, and maintain free from Liens all
trademarks, trade names, patents, copyrights, trade secrets, know-how, and other
intellectual property and proprietary information (or adequate licenses
thereto), in each case as are reasonably necessary to conduct its business as
currently
56
conducted or as contemplated hereby, all in accordance with customary and
prudent business practices.
9.3. Existence, Qualification, Etc. Do or cause to be done all
things necessary to preserve and keep in full force and effect its existence and
all material rights and franchises, and maintain its license or qualification to
do business as a foreign corporation and good standing in each jurisdiction in
which its ownership or lease of property or the nature of its business makes
such license or qualification necessary, except (a) where the failure to
maintain such good standing or qualification would not result in a Material
Adverse Effect or (b) as otherwise expressly permitted under Section 10.7.
9.4. Regulations and Taxes. Comply in all material respects with or
contest in good faith all statutes and governmental regulations and pay all
taxes, assessments, governmental charges, claims for labor, supplies, rent and
any other obligation which, if unpaid, would become a Lien against any of its
properties except liabilities being contested in good faith by appropriate
proceedings diligently conducted and against which adequate reserves acceptable
to the Borrower's independent certified public accountants have been established
unless and until any Lien resulting therefrom attaches to any of its property
and becomes enforceable against its creditors.
9.5. Insurance. (a) Keep all of its insurable properties adequately
insured at all times with responsible insurance carriers against loss or damage
by fire and other hazards to the extent and in the manner as are customarily
insured against by similar businesses owning such properties similarly situated
and otherwise as required by the Security Instruments, (b) maintain general
public liability insurance at all times with responsible insurance carriers
against liability on account of damage to persons and property and (c) maintain
insurance under all applicable workers' compensation laws (or in the
alternative, maintain required reserves if self-insured for workers'
compensation purposes) and against loss by reason by business interruption, such
policies of insurance to have such limits, deductibles, exclusions, co-insurance
and other provisions providing no less coverages than are maintained by similar
businesses that are similarly situated, such insurance policies to be in form
reasonably satisfactory to the Agent. Each of the policies of insurance
described in this Section 9.5 shall provide that the insurer shall give the
Agent not less than thirty (30) days' prior written notice before any such
policy shall be terminated, lapse or be altered in any manner.
9.6. True Books. Keep true books of record and account in which
full, true and correct entries will be made of all of its dealings and
transactions, and set up on its books such reserves as may be required by GAAP
with respect to doubtful accounts and all taxes, assessments, charges, levies
and claims and with respect to its business in general, and include such
reserves in interim as well as year-end financial statements.
9.7. Right of Inspection. Permit any Person (a) designated by any
Lender or the Agent (i) to visit and inspect any of the properties, corporate
books and financial reports of the Borrower or any Subsidiary, and (ii) to
discuss its affairs, finances and accounts with its principal officers and
independent certified public accountants, and (b) designated by the Agent to
conduct audits of the accounts receivable, inventory, payables, controls and
system of the Borrower and its Subsidiaries, which audits shall be at the
expense of the Borrower at any time a
57
Default or Event of Default has occurred and is continuing, and otherwise shall
be at the expense of the Lenders, all at reasonable times, at reasonable
intervals and with reasonable prior notice and subject to the confidentiality
provisions of Section 13.16.
9.8. Observe all Laws. Conform to and duly observe in all material
respects all laws, rules and regulations and all other valid requirements of any
Governmental Authority with respect to the conduct of its business.
9.9. Governmental Licenses. Obtain and maintain all licenses,
permits, certifications and approvals of all applicable Governmental Authorities
as are required for the conduct of its business as currently conducted and as
contemplated by the Loan Documents, except to the extent the failure to obtain
or maintain any of the foregoing would not have a Material Adverse Effect.
9.10. Covenants Extending to Other Persons. Cause each of its
Subsidiaries to do with respect to itself, its business and its assets, each of
the things required of the Borrower in Sections 9.2 through 9.9, and 9.19
inclusive.
9.11. Officer's Knowledge of Default. Upon any executive officer of
the Borrower obtaining knowledge of any Default or Event of Default hereunder or
under any other obligation of the Borrower or any Subsidiary or other Credit
Party to any Lender, or any event, development or occurrence which could
reasonably be expected to have a Material Adverse Effect, cause such executive
officer or an Authorized Representative to promptly notify the Agent of the
nature thereof, the period of existence thereof, and what action the Borrower or
such Subsidiary or other Credit Party proposes to take with respect thereto.
9.12. Suits or Other Proceedings. Upon any officer of the Borrower
obtaining knowledge of any litigation or other proceedings being instituted
against the Borrower or any Subsidiary or other Credit Party, or any attachment,
levy, execution or other process being instituted against any assets of the
Borrower or any Subsidiary or other Credit Party, making a claim or claims in an
aggregate amount greater than $500,000 not otherwise covered by insurance, the
Borrower shall promptly deliver to the Agent written notice thereof stating the
nature and status of such litigation, dispute, proceeding, levy, execution or
other process.
9.13. Notice of Environmental Complaint or Condition. Promptly
provide to the Agent true, accurate and complete copies of any and all notices,
complaints, orders, directives, claims or citations received by the Borrower or
any Subsidiary relating to any (a) violation or alleged violation by the
Borrower or any Subsidiary of any applicable Environmental Law; (b) release or
threatened release by the Borrower or any Subsidiary, or by any Person handling,
transporting or disposing of any Hazardous Material on behalf of the Borrower or
any Subsidiary, or at any facility or property owned or leased or operated by
the Borrower or any Subsidiary, of any Hazardous Material, except where
occurring legally pursuant to a permit or license; or (c) liability or alleged
liability of the Borrower or any Subsidiary for the costs of cleaning up,
removing, remediating or responding to a release of Hazardous Materials, except
to the extent any of the foregoing could not reasonably be expected to have a
Material Adverse Effect.
58
9.14. Environmental Compliance. If the Borrower or any Subsidiary
shall receive any letter, notice, complaint, order, directive, claim or citation
alleging that the Borrower or any Subsidiary has violated any Environmental Law,
has released any Hazardous Material, or is liable for the costs of cleaning up,
removing, remediating or responding to a release of Hazardous Materials, the
Borrower and any Subsidiary shall, within the time period permitted and to the
extent required by the applicable Environmental Law or the Governmental
Authority responsible for enforcing such Environmental Law, remove or remedy, or
cause the applicable Subsidiary to remove or remedy, such violation or release
or satisfy such liability.
9.15. Indemnification. Without limiting the generality of Section
13.9, the Borrower hereby agrees to indemnify and hold the Agent and the Lenders
and any affiliate of any Lender party to a Swap Agreement, and their respective
officers, directors, employees and agents, harmless from and against any and all
claims, losses, penalties, liabilities, damages and expenses (including
assessment and cleanup costs and reasonable attorneys', consultants' or other
expert fees, expenses and disbursements) arising directly or indirectly from,
out of or by reason of (a) the violation of any Environmental Law by the
Borrower or any Subsidiary or with respect to any property owned, operated or
leased by the Borrower or any Subsidiary or (b) the handling, storage,
transportation, treatment, emission, release, discharge or disposal of any
Hazardous Materials by or on behalf of the Borrower or any Subsidiary, or on or
with respect to property owned or leased or operated by the Borrower or any
Subsidiary. The provisions of this Section 9.15 shall survive repayment of the
Obligations, or the Facility Termination Date and expiration or termination of
this Agreement.
9.16. Further Assurances. At the Borrower's cost and expense, upon
request of the Agent, duly execute and deliver or cause to be duly executed and
delivered, to the Agent such further instruments, documents, certificates,
financing and continuation statements, and do and cause to be done such further
acts that may be reasonably necessary or advisable in the reasonable opinion of
the Agent to carry out more effectively the provisions and purposes of this
Agreement, the Security Instruments and the other Loan Documents; provided that
none of the foregoing shall alter, amend or modify the express rights or
liabilities of the Borrower hereunder or under the other Loan Documents.
9.17. Employee Benefit Plans.
(a) With reasonable promptness, and in any event within
thirty (30) days thereof, give notice to the Agent of (a) the
establishment of any new Pension Plan (which notice shall include a
copy of such plan), (b) the commencement of contributions to any
Employee Benefit Plan to which the Borrower or any of its ERISA
Affiliates was not previously contributing, (c) any material increase
in the benefits of any existing Employee Benefit Plan, (d) each funding
waiver request filed with respect to any Pension Plan and all
communications received or sent by the Borrower or any ERISA Affiliate
with respect to such request and (e) the failure of the Borrower or any
ERISA Affiliate to make a required installment or payment under Section
302 of ERISA or Section 412 of the Code (in the case of Employee
Benefit Plans regulated by the Code or ERISA) or under any Foreign
Benefit Law (in the case of Employee Benefit Plans regulated by any
Foreign Benefit Law) by the due date;
59
(b) Promptly and in any event within fifteen (15) days of
becoming aware of the occurrence or forthcoming occurrence of any (a)
Termination Event or (b) nonexempt "prohibited transaction," as such
term is defined in Section 406 of ERISA or Section 4975 of the Code, in
connection with any Employee Benefit Plan or any trust created
thereunder, deliver to the Agent a notice specifying the nature
thereof, what action the Borrower or any ERISA Affiliate has taken, is
taking or proposes to take with respect thereto and, when known, any
action taken or threatened by the Internal Revenue Service, the
Department of Labor or the PBGC with respect thereto; and
(c) With reasonable promptness but in any event within
fifteen (15) days for purposes of clauses (a), (b) and (c), deliver to
the Agent copies of (a) any unfavorable determination letter from the
Internal Revenue Service regarding the qualification of an Employee
Benefit Plan under Section 401(a) of the Code, (b) all notices received
by the Borrower or any ERISA Affiliate of the PBGC's or any
Governmental Authority's intent to terminate any Pension Plan or to
have a trustee appointed to administer any Pension Plan, (c) each
Schedule B (Actuarial Information) to the annual report (Form 5500
Series) filed by the Borrower or any ERISA Affiliate with the Internal
Revenue Service with respect to each Employee Benefit Plan and (d) all
notices received by the Borrower or any ERISA Affiliate from a
Multiemployer Plan sponsor concerning the imposition or amount of
withdrawal liability pursuant to Section 4202 of ERISA. The Borrower
will notify the Agent in writing within five (5) Business Days of the
Borrower or any ERISA Affiliate obtaining knowledge or reason to know
that the Borrower or any ERISA Affiliate has filed or intends to file a
notice of intent to terminate any Pension Plan under a distress
termination within the meaning of Section 4041(c) of ERISA.
9.18. Continued Operations. Continue at all times to conduct its
business and engage principally in the same line or lines of business
substantially as heretofore conducted.
9.19. New Subsidiaries. Simultaneously with the acquisition or
creation of any new wholly-owned domestic Subsidiary (each, a "New Subsidiary"),
cause to be delivered to the Agent for the benefit of the Lenders each of the
following:
(a) Facility Guaranty executed by the New Subsidiary
substantially in the form of Exhibit I;
(b) an opinion of counsel to the New Subsidiary dated as
of the date of delivery of the Facility Guaranty provided for in this
Section 9.19 and addressed to the Agent and the Lenders, in form and
substance reasonably acceptable to the Agent (which opinion may include
assumptions and qualifications of similar effect to those contained in
the opinions of counsel delivered pursuant to Section 7.2(a)), to the
effect (as applicable) that:
(i) the New Subsidiary is duly organized,
validly existing and in good standing in the jurisdiction of
its formation, has the requisite power and authority to own
its properties and conduct its business as then owned and then
conducted and proposed to be conducted and to execute, deliver
and perform the Facility Guaranty described in this Section
9.19 to which the New Subsidiary is a
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signatory, and is duly qualified to transact business and is
in good standing as a foreign corporation or partnership in
each other jurisdiction in which the character of the
properties owned or leased, or the business carried on by it,
requires such qualification and the failure to be so qualified
would reasonably be likely to result in a Material Adverse
Effect; and
(ii) the execution, delivery and performance of
the Facility Guaranty described in this Section 9.19 to which
the New Subsidiary is a signatory has been duly authorized by
all requisite corporate or partnership action (including any
required shareholder or partner approval), such agreement has
been duly executed and delivered and constitutes the valid and
binding agreement of the New Subsidiary, enforceable against
the New Subsidiary in accordance with its terms, subject to
the effect of any applicable bankruptcy, moratorium,
insolvency, reorganization or other similar law affecting the
enforceability of creditors' rights generally and to the
effect of general principles of equity (whether considered in
a proceeding at law or in equity); and
(c) current copies of the Organizational Documents and
Operating Documents of the New Subsidiary, certified resolutions (or
duly effected consent actions) of the Board of Directors, partners, or
appropriate committees thereof (and, if required by such Organizational
Documents, Operating Documents or applicable law, of the shareholders,
members or partners) of the New Subsidiary, authorizing the actions and
the execution and delivery of documents described in this Section 9.19.
9.20. Certain Notices. Furnish written notice to the Agent of each
of the following events, conditions or occurrences (together in each instance
with a statement of what action, if any, the Borrower proposes to take or cause
a Subsidiary to take with respect thereto) as soon as practicable but in any
event within the time period specified.
(a) the receipt of notice of (i) any default in the
performance, observance or fulfillment of any term, covenant or
condition contained in any lease or sublease of any restaurant or other
operating facility which default may result in the cancellation or
termination of such lease or sublease or (ii) any termination or
declaration of termination of any such lease or sublease by any party
thereto, no later than five (5) Business Days after receipt of such
notice; and
(b) (i) the expiration or termination of any lease or
sublease of any restaurant or other operating facility in accordance
with its terms and not as a result of any default or purported default
in performance, observance or fulfillment of any term, covenant or
condition contained therein, or (ii) any proposed amendment to the
terms of any such lease or sublease that accelerates the termination
date thereof, increases in any material way rental payments thereunder,
imposes in any material way more restrictive economic or operating
terms on the Borrower or any Subsidiary thereunder or is in the
Borrower's reasonable judgment otherwise adverse to the Lenders'
interest therein in any respect, not later than thirty (30) days prior
to the proposed effective date thereof (such notice to be accompanied
by a copy of or terms of any such proposed amendment).
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9.21. Information Regarding Operating Facilities. Upon request of
the Agent, the Borrower shall provide an updated list (in the format of Schedule
8.21 hereof) of all operating facilities of the Borrower and each Subsidiary.
ARTICLE X
Negative Covenants
Until the Facility Termination Date, unless the Required Lenders shall
otherwise consent in writing, the Borrower will not, nor will it permit any
Subsidiary to:
10.1. Financial Covenants.
(a) Consolidated Tangible Net Worth. Permit Consolidated
Tangible Net Worth to be less than (i) $130,000,000 from the Closing
Date until (but excluding) the last day of the fiscal quarter that
includes the Closing Date (the "Closing Date Quarter"), and (ii) as at
the last day of each fiscal quarter of the Borrower ending after the
Closing Date and until (but excluding) the last day of the next
following fiscal quarter of the Borrower, the sum of (A) the amount of
Consolidated Tangible Net Worth required to be maintained pursuant to
this Section 10.1(a) as at the end of the immediately preceding fiscal
quarter (or, in the case of the Closing Date Quarter, required to be
maintained as of the Closing Date), plus (B) 75% of Consolidated Net
Income (with no reduction for net losses during any period) for the
fiscal quarter of the Borrower ending on such day (including within
"Consolidated Net Income" certain items otherwise excluded, as provided
for in the definition of "Consolidated Net Income"), plus (C) 100% of
the aggregate amount of all increases in the stated capital and
additional paid-in capital accounts of the Borrower resulting from the
issuance of equity securities or other capital investments.
(b) Adjusted Consolidated Indebtedness to EBITDAR Ratio.
Permit at any time the Adjusted Consolidated Indebtedness to EBITDAR
Ratio to be greater than 3.50 to 1.00.
(c) Consolidated Fixed Charge Ratio. Permit at any time
the Consolidated Fixed Charge Ratio to be less than 1.25 to 1.00.
10.2. Acquisitions. Enter into any agreement, contract, binding
commitment or other arrangement providing for any Acquisition, or take any
action to solicit the tender of securities or proxies in respect thereof in
order to effect any Acquisition.
10.3. Liens. Incur, create or permit to exist any Lien, charge or
other encumbrance of any nature whatsoever with respect to any property or
assets now owned or hereafter acquired by the Borrower or any Subsidiary, other
than the following (collectively, "Permitted Liens"):
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(a) Liens created under the Security Instruments in favor
of the Agent and the Lenders, and Liens otherwise existing as of the
date hereof and as set forth in Schedule 8.7;
(b) Liens imposed by law for taxes, assessments or
charges of any Governmental Authority for claims not yet due or which
are being contested in good faith by appropriate proceedings diligently
conducted and with respect to which adequate reserves or other
appropriate provisions are being maintained in accordance with GAAP and
which Liens are not yet enforceable against other creditors;
(c) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other Liens imposed by law or
created in the ordinary course of business or for amounts not yet due
or which are being contested in good faith by appropriate proceedings
diligently conducted and with respect to which adequate reserves or
other appropriate provisions are being maintained in accordance with
GAAP and which Liens are not yet enforceable against other creditors;
(d) Liens incurred or deposits made in the ordinary
course of business (including, without limitation, surety bonds and
appeal bonds) in connection with workers' compensation, unemployment
insurance and other types of social security benefits or to secure the
performance of tenders, bids, leases, contracts (other than for the
repayment of Indebtedness), statutory obligations and other similar
obligations or arising as a result of progress payments under
government contracts;
(e) easements (including reciprocal easement agreements
and utility agreements), rights-of-way, covenants, consents,
reservations, encroachments, variations and zoning and other similar
restrictions, charges or encumbrances (whether or not recorded), which
do not interfere materially with the ordinary conduct of the business
of the Borrower or any Subsidiary and which do not materially detract
from the value of the property to which they attach or materially
impair the use thereof to the Borrower or any Subsidiary; and
(f) purchase money Liens to secure Indebtedness permitted
under Section 10.4(d) and incurred to purchase fixed assets, provided
such Indebtedness represents not less than 75% and not more than 90% of
the purchase price of such assets as of the date of purchase thereof
and no property other than the assets so purchased secures such
Indebtedness.
10.4. Indebtedness. Incur, create, assume or permit to exist any
Indebtedness, howsoever evidenced, except:
(a) Indebtedness existing as of the Closing Date as set
forth in Schedule 8.6; provided, none of the instruments and agreements
evidencing or governing such Indebtedness shall be amended, modified or
supplemented after the Closing Date to change in any material respect
any terms of subordination, repayment or rights of enforcement,
conversion, put, exchange or other rights from such terms and rights as
in effect on the Closing Date;
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(b) Indebtedness owing to the Agent or any Lender in
connection with this Agreement, any Note or other Loan Document;
(c) the endorsement of negotiable instruments for deposit
or collection or similar transactions in the ordinary course of
business;
(d) purchase money Indebtedness described in Section
10.3(f) not to exceed an aggregate outstanding principal amount at any
time of $500,000;
(e) Indebtedness arising from Rate Hedging Obligations
permitted under Section 10.15;
(f) unsecured intercompany Indebtedness for loans and
advances made by the Borrower or any Guarantor to the Borrower or any
Guarantor;
(g) unsecured Indebtedness of the Borrower owing to
former holders of Management Securities incurred in connection with the
redemption or repurchase thereof and constituting an Allowable
Distribution, as evidenced by one or more promissory notes providing
for payment in cash or common stock of the Borrower; provided that no
cash payment, whether principal, interest or otherwise, shall be paid
thereunder if there then exists, or would exist after giving effect to
such payment, any Default or Event of Default, including without
limitation a Default or Event of Default as a result of noncompliance
with Section 10.1.
(h) additional unsecured Indebtedness for Money Borrowed
not otherwise covered by clauses (a) through (g) above, provided that
the aggregate outstanding principal amount of all such other
Indebtedness permitted under this clause (h) shall in no event exceed
$5,000,000 at any time;
(i) Indebtedness extending the maturity of, or renewing,
refunding or refinancing, in whole or in part, Indebtedness incurred
under clauses (a), (d), (e), and (h) of this Section 10.4, provided
that the terms of any such extension, renewal, refunding or refinancing
Indebtedness (and of any agreement or instrument entered into in
connection therewith) are not materially less favorable to the Agent
and the Lenders than the terms of the Indebtedness as in effect prior
to such action, and provided further that (1) the aggregate principal
amount of or interest rate or rates and fees payable on such extended,
renewed, refunded or refinanced Indebtedness shall not be increased by
such action, (2) the group of direct or contingent obligors on such
Indebtedness shall not be expanded as a result of any such action, and
(3) immediately before and immediately after giving effect to any such
extension, renewal, refunding or refinancing, no Default or Event of
Default shall have occurred and be continuing.
10.5. Transfer of Assets. Sell, lease, transfer or otherwise dispose
of any assets of Borrower or any Subsidiary other than (a) dispositions of
inventory in the ordinary course of business, (b) dispositions of property that
is substantially worn, damaged, obsolete and, in the
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judgment of the Borrower, no longer best used or useful in its business or that
of any Subsidiary, (c) dispositions of property that is substantially worn,
damaged, obsolete or inefficient that is promptly replaced in the ordinary
course of business with assets of equal or greater utility and value, (d)
transfers of assets necessary to give effect to merger or consolidation
transactions permitted by Section 10.7, (e) the disposition of Eligible
Securities in the ordinary course of management of the investment portfolio of
the Borrower and its Subsidiaries, (f) sales or transfers in connection with a
sale leaseback transactions with respect to any of the Borrower's restaurant
sites, and (g) the issuance of Management Securities in the ordinary course of
the Borrower's and its Subsidiaries' business and on substantially the same
economic terms as (or other terms no less favorable to the Borrower and its
Subsidiaries than) the terms of such issuance as of the Closing Date.
10.6. Investments. Purchase, own, invest in or otherwise acquire,
directly or indirectly, any stock or other securities, or make or permit to
exist any interest whatsoever in any other Person or permit to exist any loans
or advances to any Person, except that Borrower may maintain investments or
invest in:
(a) securities of any Person acquired in an Acquisition
permitted hereunder;
(b) Eligible Securities;
(c) investments and loans existing as of the date hereof
and as set forth in Schedule 8.4;
(d) accounts receivable arising and trade credit granted
in the ordinary course of business and any securities received in
satisfaction or partial satisfaction thereof in connection with
accounts of financially troubled Persons to the extent reasonably
necessary in order to prevent or limit loss; and
(e) investments in Subsidiaries which are Guarantors;
(f) loans between the Borrower and the Guarantors
described in Section 10.4(f);
(g) loans to market partners, operating partners and chef
partners who hold Management Securities in an aggregate principal
amount at any time outstanding not to exceed $2,000,000;
(h) other loans, advances and investments in an aggregate
principal amount at any time outstanding not to exceed $2,000,000.
10.7. Merger or Consolidation. (a) Consolidate with or merge into
any other Person, or (b) permit any other Person to merge into it, or (c)
liquidate, wind-up or dissolve or sell, transfer or lease or otherwise dispose
of all or a substantial part of its assets (other than sales permitted under
Section 10.5(a), (b) and (d)); provided, however, any Subsidiary (other than Pei
Wei) of the Borrower may merge or transfer all or substantially all of its
assets into or consolidate with the Borrower or any wholly-owned domestic
Subsidiary of the Borrower; provided, further,
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however, that upon transfer of any such assets (x) such assets which are
Collateral subject to a Lien or security interest of the Agent shall continue to
be Collateral and subject to a Lien or security interest of the Agent and (y)
any Subsidiary that is a transferee of such assets but is not party to the
necessary Security Instruments shall execute and deliver the applicable Security
Instruments, as determined by the Agent in its sole discretion, to continue the
liens in the transferred assets.
10.8. Restricted Payments. Make any Restricted Payment or apply or
set apart any of their assets therefor or agree to do any of the foregoing.
10.9. Transactions with Affiliates. Other than transactions
permitted under Sections 10.4(g), 10.5(g), 10.6 and 10.7, enter into any
transaction after the Closing Date, including, without limitation, the purchase,
sale, lease or exchange of property, real or personal, or the rendering of any
service, with any Affiliate of the Borrower, except (a) that such Persons may
render services to the Borrower or its Subsidiaries for compensation at the same
rates generally paid by Persons engaged in the same or similar businesses for
the same or similar services, (b) that the Borrower or any Subsidiary may render
services to such Persons for compensation at the same rates generally charged by
the Borrower or such Subsidiary and (c) in either case in the ordinary course of
business and pursuant to the reasonable requirements of the Borrower's (or any
Subsidiary's) business consistent with past practice of the Borrower and its
Subsidiaries and upon fair and reasonable terms no less favorable to the
Borrower (or any Subsidiary) than would be obtained in a comparable arm's-length
transaction with a Person not an Affiliate.
10.10. Compliance with ERISA, the Code and Foreign Benefit Laws. With
respect to any Pension Plan, Employee Benefit Plan or Multiemployer Plan:
(a) permit the occurrence of any Termination Event which
would result in a liability on the part of the Borrower or any ERISA
Affiliate to the PBGC or to any Governmental Authority; or
(b) permit the present value of all benefit liabilities
under all Pension Plans to exceed the current value of the assets of
such Pension Plans allocable to such benefit liabilities; or
(c) permit any accumulated funding deficiency (as defined
in Section 302 of ERISA and Section 412 of the Code) with respect to
any Pension Plan, whether or not waived; or
(d) fail to make any contribution or payment to any
Multiemployer Plan which the Borrower or any ERISA Affiliate may be
required to make under any agreement relating to such Multiemployer
Plan, or any law pertaining thereto; or
(e) engage, or permit any Borrower or any ERISA Affiliate
to engage, in any prohibited transaction under Section 406 of ERISA or
Sections 4975 of the Code for which a civil penalty pursuant to Section
502(I) of ERISA or a tax pursuant to Section 4975 of the Code may be
imposed; or
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(f) permit the establishment of any Employee Benefit Plan
providing post-retirement welfare benefits or establish or amend any
Employee Benefit Plan which establishment or amendment could result in
liability to the Borrower or any ERISA Affiliate or increase the
obligation of the Borrower or any ERISA Affiliate to a Multiemployer
Plan; or
(g) fail, or permit the Borrower or any ERISA Affiliate
to fail, to establish, maintain and operate each Employee Benefit Plan
in compliance in all material respects with the provisions of ERISA,
the Code, all applicable Foreign Benefit Laws and all other applicable
laws and the regulations and interpretations thereof.
10.11. Fiscal Year. Change its Fiscal Year.
10.12. Dissolution, etc. Wind up, liquidate or dissolve (voluntarily
or involuntarily) or commence or suffer any proceedings seeking any such winding
up, liquidation or dissolution, except in connection with a merger or
consolidation permitted pursuant to Section 10.7.
10.13. Limitations on Sales and Leasebacks. Enter into any
arrangement or arrangements with any Person providing for the leasing by the
Borrower or any Subsidiary of real or personal property, whether now owned or
hereafter acquired in a single transaction or series of related transactions,
which has been or is to be sold or transferred by the Borrower or any Subsidiary
to such Person or to any other Person to whom funds have been or are to be
advanced by such Person on the security of such property or rental obligations
of the Borrower or any Subsidiary; provided, however, the Borrower and its
Subsidiaries may enter into such arrangements for leasing of its restaurant
sites.
10.14. Change in Control. Cause, suffer or permit to exist or occur
any Change of Control.
10.15. Rate Hedging Obligations. Incur any Rate Hedging Obligations
or enter into any agreements, arrangements, devices or instruments relating to
Rate Hedging Obligations, except pursuant to Swap Agreements in an aggregate
notional amount not to exceed at any time the Total Revolving Credit Commitment
or as otherwise agreed by the Borrower and the Agent.
10.16. Negative Pledge Clauses. Enter into or cause, suffer or permit
to exist any agreement with any Person other than the Agent and the Lenders
pursuant to this Agreement or any other Loan Documents which prohibits or limits
the ability of any of the Borrower or any Subsidiary to create, incur, assume or
suffer to exist any Lien upon any of its property, assets or revenues, whether
now owned or hereafter acquired, provided that the Borrower and any Subsidiary
may enter into such an agreement in connection with, and that applies only to,
property acquired with the proceeds of purchase money Indebtedness permitted
hereunder.
10.17. Prepayments, Etc. of Indebtedness. Prepay, redeem, purchase,
defease or otherwise satisfy prior to the scheduled maturity thereof in any
manner, or make any payment in violation of any subordination terms of, any
Indebtedness.
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10.18. Amendments to Operating Agreements. Amend the existing
operating agreement of any Subsidiary to include, or permit to exist an
operating agreement of any new Subsidiary which includes, any provision which
would (a) prohibit or restrict distributions by such Subsidiary to the Borrower
under such operating agreement in respect of the ownership interest of the
Borrower in such Subsidiary or in any restaurant or (b) decrease below 80% the
percentage ownership interest of the Borrower in such Subsidiary or in any
restaurant.
10.19. Inactive Subsidiaries. Permit any Inactive Subsidiary to
conduct business, obtain or maintain assets or incur liabilities other than
those pertaining to the maintenance of such Inactive Subsidiary's existence and
any necessary tax filings. Notwithstanding any terms of this Agreement to the
contrary, neither the Borrower nor any Subsidiary shall make any loans to or
investments in, or merge or consolidate into, any Inactive Subsidiary.
ARTICLE XI
Events of Default and Acceleration
11.1. Events of Default. If any one or more of the following events
(herein called "Events of Default") shall occur for any reason whatsoever (and
whether such occurrence shall be voluntary or involuntary or come about or be
effected by operation of law or pursuant to or in compliance with any judgment,
decree or order of any court or any order, rule or regulation of any
Governmental Authority), that is to say:
(a) if default shall be made, and shall continue for one
(1) day, in the due and punctual payment of the principal of any Loan,
Reimbursement Obligation or other Obligation, when and as the same
shall be due and payable whether pursuant to any provision of Article
II, Article III or Article IV, at maturity, by acceleration or
otherwise; or
(b) if default shall be made in the due and punctual
payment of any amount of interest on any Loan, Reimbursement Obligation
or other Obligation or of any fees or other amounts payable to any of
the Lenders or the Agent on the date on which the same shall be due and
payable and such default shall continue for a period of three (3) or
more days; or
(c) if default shall be made in the performance or
observance of any covenant set forth in Section 9.7, 9.11, 9.12, 9.19,
or Article X;
(d) if a default shall be made in the performance or
observance of, or shall occur under, any covenant, agreement or
provision contained in this Agreement or the Notes (other than as
described in clauses (a), (b) or (c) above) and such default shall
continue for thirty (30) or more days after the earlier of receipt of
notice of such default by the Authorized Representative from the Agent
or an officer of the Borrower becomes aware of such default, or if such
default is of a type that cannot be cured within thirty (30) days (but
reasonably can be cured within ninety (90) days), and the Borrower is
diligently and in good faith attempting to cure such default, such
default shall continue unremedied for a period of ninety (90) or more
days after such notice or if a default shall
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be made in the performance or observance of, or shall occur under, any
covenant, agreement or provision contained in any of the other Loan
Documents (beyond any applicable grace period, if any, contained
therein) or in any instrument or document evidencing or creating any
obligation, guaranty, or Lien in favor of the Agent or any of the
Lenders or delivered to the Agent or any of the Lenders in connection
with or pursuant to this Agreement or any of the Obligations, or if any
Loan Document ceases to be in full force and effect (other than as
expressly provided for hereunder or thereunder or with the express
written consent of the Agent), or if without the written consent of the
Lenders, this Agreement or any other Loan Document shall be disaffirmed
or shall terminate, be terminable or be terminated or become void or
unenforceable for any reason whatsoever (other than as expressly
provided for hereunder or thereunder or with the express written
consent of the Agent); or
(e) if there shall occur (i) a default, which is not
waived, in the payment of any principal, interest, premium or other
amount with respect to any Indebtedness (other than the Loans and other
Obligations) of the Borrower or any Subsidiary in an amount not less
than $500,000 in the aggregate outstanding, or (ii) a default, which is
not waived, in the performance, observance or fulfillment of any term
or covenant contained in any agreement or instrument under or pursuant
to which any such Indebtedness (other than the Loans and other
Obligations) may have been issued, created, assumed, guaranteed or
secured by the Borrower or any Subsidiary, or (iii) any other event of
default as specified in any agreement or instrument under or pursuant
to which any such Indebtedness (other than the Loans and other
Obligations) may have been issued, created, assumed, guaranteed or
secured by the Borrower or any Subsidiary, and such default or event of
default shall continue for more than the period of grace, if any,
therein specified, or such default or event of default shall permit the
holder of any such Indebtedness (or any agent or trustee acting on
behalf of one or more holders) to accelerate the maturity thereof; or
(f) if any representation, warranty or other statement of
fact contained in any Loan Document or in any writing, certificate,
report or statement at any time furnished to the Agent or any Lender by
or on behalf of the Borrower or any other Credit Party pursuant to or
in connection with any Loan Document, or otherwise, shall be false or
misleading in any material respect when given; or
(g) if the Borrower or any Subsidiary or other Credit
Party shall be unable to pay its debts generally as they become due;
file a petition to take advantage of any insolvency statute; make an
assignment for the benefit of its creditors; commence a proceeding for
the appointment of a receiver, trustee, liquidator or conservator of
itself or of the whole or any substantial part of its property; file a
petition or answer seeking liquidation, reorganization or arrangement
or similar relief under the federal bankruptcy laws or any other
applicable law or statute; or
(h) if a court of competent jurisdiction shall enter an
order, judgment or decree appointing a custodian, receiver, trustee,
liquidator or conservator of the Borrower or any Subsidiary or other
Credit Party or of the whole or any substantial part of its properties
and such order, judgment or decree continues unstayed and in effect for
a
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period of ninety (90) days, or approve a petition filed against the
Borrower or any Subsidiary seeking liquidation, reorganization or
arrangement or similar relief under the federal bankruptcy laws or any
other applicable law or statute of the United States of America or any
state, which petition is not dismissed within ninety (90) days; or if,
under the provisions of any other law for the relief or aid of debtors,
a court of competent jurisdiction shall assume custody or control of
the Borrower or any Subsidiary or other Credit Party or of the whole or
any substantial part of its properties, which control is not
relinquished within ninety (90) days; or if there is commenced against
the Borrower or any Subsidiary or other Credit Party any proceeding or
petition seeking reorganization, arrangement or similar relief under
the federal bankruptcy laws or any other applicable law or statute of
the United States of America or any state which proceeding or petition
remains undismissed for a period of sixty (60) days; or if the Borrower
or any Subsidiary or other Credit Party takes any action to indicate
its consent to or approval of any such proceeding or petition; or
(i) if (i) one or more judgments or orders where the
amount not covered by insurance (or the amount as to which the insurer
denies liability) is in excess of $500,000 is rendered against the
Borrower or any Subsidiary, or (ii) there is any attachment, injunction
or execution against any of the Borrower's or Subsidiaries' properties
for any amount in excess of $500,000 in the aggregate; and such
judgment, attachment, injunction or execution remains unpaid, unstayed,
undischarged, unbonded or undismissed for a period of sixty (60) days;
or
(j) if the Borrower or any Subsidiary shall, other than
in the ordinary course of business (as determined by past practices),
suspend all or any part of its operations material to the conduct of
the business of the Borrower or such Subsidiary for a period of more
than 60 days; or
(k) if the Borrower or any Subsidiary shall breach any of
the material terms or conditions of any agreement under which any Rate
Hedging Obligations permitted hereby is created and such breach shall
continue beyond any grace period, if any, relating thereto pursuant to
the terms of such agreement, or if the Borrower or any Subsidiary shall
disaffirm or seek to disaffirm any such agreement or any of its
obligations thereunder; or
(l) if (a) the Borrower or any Subsidiary shall default
(which default shall continue beyond any applicable grace period and
shall not be effectively waived) in the performance, observance or
fulfillment or any term, covenant or condition contained in any lease
or sublease of restaurant or other operating facilities or any other
agreement or commitment the expiration, termination or lapse of one or
more of which, individually or collectively, could reasonably be
expected to have a Material Adverse Effect (a "Material Agreement"), or
there shall occur any other event of default specified in any Material
Agreement, and such default or event of default shall continue for more
than the period of grace, if any, therein specified or shall permit any
other party to such Material Agreement to terminate its obligations
under such Material Agreement or otherwise cause such Material
Agreement to terminate, expire or lapse or (b) for any other reason any
such
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Material Agreement shall terminate, expire or lapse other than in the
ordinary course of business of the Borrower and its Subsidiaries; or
(m) if there shall occur and not be waived an Event of
Default as defined in any of the other Loan Documents; or
(l) if the Borrower or any Subsidiary shall fail to
deliver all items required pursuant to the terms of Section 7.2 hereof
by January 31, 2002;
then, and in any such event and at any time thereafter, if such Event of Default
or any other Event of Default shall have not been waived,
(A) either or both of the following actions may
be taken: (i) the Agent may, and at the direction of the
Required Lenders shall, declare any obligation of the Lenders
and the Issuing Bank to make further Loans or to issue
additional Letters of Credit terminated, whereupon the
obligation of each Lender to make further Loans and of the
Issuing Bank to issue additional Letters of Credit, hereunder
shall terminate immediately, and (ii) the Agent shall at the
direction of the Required Lenders, at their option, declare by
notice to the Borrower any or all of the Obligations to be
immediately due and payable, and the same, including all
interest accrued thereon and all other obligations of the
Borrower to the Agent and the Lenders, shall forthwith become
immediately due and payable without presentment, demand,
protest, notice or other formality of any kind, all of which
are hereby expressly waived, anything contained herein or in
any instrument evidencing the Obligations to the contrary
notwithstanding; provided, however, that notwithstanding the
above, if there shall occur an Event of Default under clause
(g) or (h) above, then the obligation of the Lenders to make
Loans and of the Issuing Bank to issue Letters of Credit
hereunder shall automatically terminate and any and all of the
Obligations shall be immediately due and payable without the
necessity of any action by the Agent or the Required Lenders
or notice to the Agent or the Lenders;
(B) The Borrower shall, upon demand of the Agent
or the Required Lenders, deposit cash with the Agent in an
amount equal to the amount of any Letter of Credit
Outstandings, as collateral security for the repayment of any
future drawings or payments under such Letters of Credit, and
such amounts shall be held by the Agent pursuant to the terms
of the LC Account Agreement; and
(C) the Agent and each of the Lenders shall have
all of the rights and remedies available under the Loan
Documents or under any applicable law.
11.2. Agent to Act. In case any one or more Events of Default shall
occur and not have been waived, the Agent may, and at the direction of the
Required Lenders shall, proceed to protect and enforce their rights or remedies
either by suit in equity or by action at law, or both, whether for the specific
performance of any covenant, agreement or other provision contained
71
herein or in any other Loan Document, or to enforce the payment of the
Obligations or any other legal or equitable right or remedy.
11.3. Cumulative Rights. No right or remedy herein conferred upon
the Lenders or the Agent is intended to be exclusive of any other rights or
remedies contained herein or in any other Loan Document, and every such right or
remedy shall be cumulative and shall be in addition to every other such right or
remedy contained herein and therein or now or hereafter existing at law or in
equity or by statute, or otherwise.
11.4. No Waiver. No course of dealing between the Borrower and any
Lender or the Agent or any failure or delay on the part of any Lender or the
Agent in exercising any rights or remedies under any Loan Document or otherwise
available to it shall operate as a waiver of any rights or remedies and no
single or partial exercise of any rights or remedies shall operate as a waiver
or preclude the exercise of any other rights or remedies hereunder or of the
same right or remedy on a future occasion.
11.5. Allocation of Proceeds. If an Event of Default has occurred
and not been waived, and the maturity of the Notes has been accelerated pursuant
to Article XI hereof, all payments received by the Agent hereunder, in respect
of any principal of or interest on the Obligations or any other amounts payable
by the Borrower hereunder, shall be applied by the Agent in the following order:
(a) the reasonable expenses incurred in connection with
retaking, holding, preserving, processing, maintaining or preparing for
sale, lease or other disposition of, any Collateral, including
reasonable attorney's fees and legal expenses pertaining thereto;
(b) amounts due to the Lenders and the Issuing Bank
pursuant to Sections 4.6(a), 4.6(b), 4.6(c), and 13.5;
(c) payments of interest on Loans and Reimbursement
Obligations, to be applied for the ratable benefit of the Lenders;
(d) payments of principal of Loans and Reimbursement
Obligations, to be applied for the ratable benefit of the Lenders;
(e) payments of cash amounts to the Agent in respect of
outstanding Letters of Credit pursuant to Section 11.1(B);
(f) amounts due to the Issuing Bank, the Agent and the
Lenders pursuant to Sections 3.2(h), 9.15 and 13.9;
(g) payments of all other amounts due under any of the
Loan Documents, if any, to be applied for the ratable benefit of the
Lenders;
(h) amounts due to any of the Lenders or their affiliates
in respect of Obligations consisting of liabilities under any Swap
Agreement with any of the Lenders or their affiliates on a pro rata
basis according to the amounts owed; and
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(i) any surplus remaining after application as provided
for herein, to the Borrower or otherwise as may be required by
applicable law.
ARTICLE XII
The Agent
12.1. Appointment and Authorization of Agent.
(a) Each Lender hereby irrevocably appoints, designates and
authorizes the Agent to take such action on its behalf under the provisions of
this Agreement and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere herein or in any other Loan Document, the Agent shall not
have any duties or responsibilities, except those expressly set forth herein,
nor shall the Agent have or be deemed to have any fiduciary relationship with
any Lender or participant, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the Agent.
Without limiting the generality of the foregoing sentence, the use of the term
"agent" herein and in the other Loan Documents with reference to the Agent is
not intended to connote any fiduciary or other implied (or express) obligations
arising under agency doctrine of any applicable Law. Instead, such term is used
merely as a matter of market custom, and is intended to create or reflect only
an administrative relationship between independent contracting parties.
(b) The Issuing Bank shall act on behalf of the Lenders with
respect to any Letters of Credit issued by it and the documents associated
therewith, and the Issuing Bank shall have all of the benefits and immunities
(i) provided to the Agent in this Article XII with respect to any acts taken or
omissions suffered by the Issuing Bank in connection with Letters of Credit
issued by it or proposed to be issued by it and the applications and agreements
for letters of credit pertaining to such Letters of Credit as fully as if the
term "Agent" as used in this Article XII and in the definition of "Agent-Related
Person" included the Issuing Bank with respect to such acts or omissions, and
(ii) as additionally provided herein with respect to the Issuing Bank.
12.2. Delegation of Duties. The Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel and other
consultants or experts concerning all matters pertaining to such duties. The
Agent shall not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects in the absence of gross negligence or willful
misconduct.
12.3. Liability of Agent. No Agent-Related Person shall (a) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct
in connection with its duties expressly set forth herein), or (b) be responsible
in any manner to any Lender or participant for any recital, statement,
73
representation or warranty made by any Credit Party or any officer thereof,
contained herein or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Agent under or in connection with, this Agreement or any other Loan Document, or
the validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document, or for any failure of any Credit Party or
any other party to any Loan Document to perform its obligations hereunder or
thereunder. No Agent-Related Person shall be under any obligation to any Lender
or participant to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement or any
other Loan Document, or to inspect the properties, books or records of any
Credit Party or any Affiliate thereof.
12.4. Reliance by Agent.
(a) The Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, communication, signature,
resolution, representation, notice, consent, certificate, affidavit,
letter, telegram, facsimile, telex or telephone message, electronic
mail message, statement or other document or conversation reasonably
believed by it to be genuine and correct and to have been signed, sent
or made by the proper Person or Persons, and upon advice and statements
of legal counsel (including counsel to any Credit Party), independent
accountants and other experts selected by the Agent. The Agent shall be
fully justified in failing or refusing to take any action under any
Loan Document unless it shall first receive such advice or concurrence
of the Required Lenders as it deems appropriate and, if it so requests,
it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it
by reason of taking or continuing to take any such action. The Agent
shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Loan Document in accordance
with a request or consent of the Required Lenders (or such greater
number of Lenders as may be expressly required hereby in any instance)
and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders.
(b) For purposes of determining compliance with the
conditions specified in Section 7.1, each Lender that has signed this
Agreement shall be deemed to have consented to, approved or accepted or
to be satisfied with, each document or other matter required thereunder
to be consented to or approved by or acceptable or satisfactory to a
Lender unless the Agent shall have received notice from such Lender
prior to the proposed Closing Date specifying its objection thereto.
12.5. Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default, except with respect to
defaults in the payment of principal, interest and fees required to be paid to
the Agent for the account of the Lenders, unless the Agent shall have received
written notice from a Lender or the Borrower referring to this Agreement,
describing such Default and stating that such notice is a "notice of default."
The Agent will notify the Lenders of its receipt of any such notice. The Agent
shall take such action with respect to such Default as may be directed by the
Required Lenders in accordance with Article XII; provided, however, that unless
and until the Agent has received any such direction, the
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Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default as it shall deem advisable or
in the best interest of the Lenders.
12.6. Credit Decision; Disclosure of Information by Agent. Each
Lender acknowledges that no Agent-Related Person has made any representation or
warranty to it, and that no act by the Agent hereafter taken, including any
consent to and acceptance of any assignment or review of the affairs of any
Credit Party or any Affiliate thereof, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Lender as to any
matter, including whether Agent-Related Persons have disclosed material
information in their possession. Each Lender represents to the Agent that it
has, independently and without reliance upon any Agent-Related Person and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the Credit
Parties and their respective Subsidiaries, and all applicable bank or other
regulatory laws relating to the transactions contemplated hereby, and made its
own decision to enter into this Agreement and to extend credit to the Borrower
hereunder. Each Lender also represents that it will, independently and without
reliance upon any Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigations as
it deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of the Borrower.
Except for notices, reports and other documents expressly required to be
furnished to the Lenders by the Agent herein, the Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of any of the Credit Parties or any of their
respective Affiliates which may come into the possession of any Agent Related
Person.
12.7. Indemnification of Agent. Whether or not the transactions
contemplated hereby are consummated, the Lenders shall indemnify upon demand
each Agent-Related Person (to the extent not reimbursed by or on behalf of any
Credit Party and without limiting the obligation of any Credit Party to do so),
pro rata, and hold harmless each Agent-Related Person from and against any and
all Indemnified Liabilities incurred by it; provided, however, that no Lender
shall be liable for the payment to any Agent-Related Person of any portion of
such Indemnified Liabilities to the extent determined in a final, nonappealable
judgment by a court of competent jurisdiction to have resulted from such
Agent-Related Person's own gross negligence or willful misconduct; provided,
however, that no action taken in accordance with the directions of the Required
Lenders shall be deemed to constitute gross negligence or willful misconduct for
purposes of this Section. Without limitation of the foregoing, each Lender shall
reimburse the Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including attorney costs and expenses) incurred by the
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that the Agent is not
reimbursed for such expenses by or on behalf of the Borrower. The undertaking in
this Section shall survive
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termination of the Aggregate Commitments, the payment of all other Obligations
and the resignation of the Agent.
12.8. Agent in its Individual Capacity. Bank of America and its
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory, underwriting or other business with each of
the Credit Parties and their respective Affiliates as though Bank of America
were not the Agent or the Issuing Bank hereunder and without notice to or
consent of the Lenders. The Lenders acknowledge that, pursuant to such
activities, Bank of America or its Affiliates may receive information regarding
any Credit Party or its Affiliates (including information that may be subject to
confidentiality obligations in favor of such Credit Party or such Affiliate) and
acknowledge that the Agent shall be under no obligation to provide such
information to them. With respect to its Loans, Bank of America shall have the
same rights and powers under this Agreement as any other Lender and may exercise
such rights and powers as though it were not the Agent or the Issuing Bank, and
the terms "Lender" and "Lenders" include Bank of America in its individual
capacity.
12.9. Successor Agent. The Agent may resign as Agent upon 30 days'
prior written notice to the Lenders; provided that any such resignation by Bank
of America shall also constitute its resignation as Issuing Bank. If the Agent
resigns under this Agreement, the Required Lenders shall appoint from among the
Lenders a successor administrative agent for the Lenders, which successor
administrative agent shall be consented to by the Borrower at all times other
than during the existence of an Event of Default (which consent of the Borrower
shall not be unreasonably withheld or delayed). If no successor administrative
agent is appointed prior to the effective date of the resignation of the Agent,
the Agent may appoint, after consulting with the Lenders and the Borrower, a
successor administrative agent from among the Lenders. Upon the acceptance of
its appointment as successor administrative agent hereunder, the Person acting
as such successor administrative agent shall succeed to all the rights, powers
and duties of the retiring Agent, Issuing Bank and the respective terms "Agent,"
and "Issuing Bank" shall mean such successor administrative agent and Letter of
Credit issuer, and the retiring Agent's appointment, powers and duties as Agent
shall be terminated and the retiring Issuing Bank's rights, powers and duties as
such shall be terminated, without any other or further act or deed on the part
of such retiring Issuing Bank or any other Lender, other than the obligation of
the successor Issuing Bank to issue letters of credit in substitution for the
Letters of Credit, if any, outstanding at the time of such succession or to make
other arrangements satisfactory to the retiring Issuing Bank to effectively
assume the obligations of the retiring Issuing Bank with respect to such Letters
of Credit. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article XII and Sections 13.5 and 13.9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement. If no successor administrative agent has accepted
appointment as Agent by the date which is 30 days following a retiring Agent's
notice of resignation, the retiring Agent's resignation shall nevertheless
thereupon become effective and the Lenders shall perform all of the duties of
the Agent hereunder until such time, if any, as the Required Lenders appoint a
successor agent as provided for above.
12.10. Agent May File Proofs of Claim. In case of the pendency of any
receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement,
adjustment, composition or
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other judicial proceeding relative to any Credit Party, the Agent (irrespective
of whether the principal of any Loan or Letter of Credit shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of
whether the Agent shall have made any demand on the Borrower) shall be entitled
and empowered, by intervention in such proceeding or otherwise
(a) to file and prove a claim for the whole amount of the
principal and interest owing and unpaid in respect of the Loans, Letter
of Credit and all other Obligations that are owing and unpaid and to
file such other documents as may be necessary or advisable in order to
have the claims of the Lenders and the Agent (including any claim for
the reasonable compensation, expenses, disbursements and advances of
the Lenders and the Agent and their respective agents and counsel and
all other amounts due the Lenders and the Agent under Sections 4.6 and
13.5) allowed in such judicial proceeding; and
(b) to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Agent and, in the event that the Agent
shall consent to the making of such payments directly to the Lenders, to pay to
the Agent any amount due for the reasonable compensation, expenses,
disbursements and advances of the Agent and its agents and counsel, and any
other amounts due the Agent under Sections 4.6 and 13.5.
Nothing contained herein shall be deemed to authorize the Agent to
authorize or consent to or accept or adopt on behalf of any Lender any plan of
reorganization, arrangement, adjustment or composition affecting the Obligations
or the rights of any Lender or to authorize the Agent to vote in respect of the
claim of any Lender in any such proceeding.
12.11. Collateral and Guaranty Matters. The Lenders irrevocably
authorize the Agent, at its option and in its discretion,
(a) to release any Lien on any property granted to or
held by the Agent under any Loan Document (i) upon the Facility
Termination Date, (ii) that is sold or to be sold as part of or in
connection with any sale permitted hereunder or under any other Loan
Document, or (iii) subject to Section 13.6, if approved, authorized or
ratified in writing by the Required Lenders; and
(c) to release any Guarantor from its obligations under
the Guaranty if such Person ceases to be a Subsidiary as a result of a
transaction permitted hereunder.
Upon request by the Agent at any time, the Required Lenders will
confirm in writing the Agent's authority to release or subordinate its interest
in particular types or items of property, or to release any Guarantor from its
obligations under the Guaranty pursuant to this Section 12.11.
12.12. Other Agents; Arrangers and Managers. None of the Lenders or
other Persons identified on the facing page or signature pages of this Agreement
as a "syndication agent," "documentation agent," "co-agent," "book manager,"
"lead manager," "arranger," "lead arranger" or "co-arranger" shall have any
right, power, obligation, liability, responsibility or duty
77
under this Agreement other than, in the case of such Lenders, those applicable
to all Lenders as such. Without limiting the foregoing, none of the Lenders or
other Persons so identified shall have or be deemed to have any fiduciary
relationship with any Lender. Each Lender acknowledges that it has not relied,
and will not rely, on any of the Lenders or other Persons so identified in
deciding to enter into this Agreement or in taking or not taking action
hereunder.
12.13. Sole Lender. Notwithstanding anything to the contrary
contained herein, until there shall be two or more Lenders, all references to
the Agent herein and in the other Loan Documents shall be deemed to refer to
Bank of America as Lender.
ARTICLE XIII
Miscellaneous
13.1. Successors and Assigns.
(a) The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that the
Borrower may not assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Lender
and no Lender may assign or otherwise transfer any of its rights or
obligations hereunder except (i) to an Eligible Assignee in accordance
with the provisions of subsection (b) of this Section, (ii) by way of
participation in accordance with the provisions of subsection (d) of
this Section, (iii) by way of pledge or assignment of a security
interest subject to the restrictions of subsection (f) of this Section
(and any other attempted assignment or transfer by any party hereto
shall be null and void). Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the
parties hereto, their respective successors and assigns permitted
hereby, Participants to the extent provided in subsection (d) of this
Section and, to the extent expressly contemplated hereby, the
Indemnitees) any legal or equitable right, remedy or claim under or by
reason of this Agreement.
(b) Any Lender may at any time assign to one or more
Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Revolving Credit
Commitment or Letter of Credit Commitment and the Loans (including for
purposes of this subsection (b), participations in Letters of Credit)
at the time owing to it); provided that (i) except in the case of an
assignment of the entire remaining amount of the assigning Lender's
Revolving Credit Commitment or Letter of Credit Commitment and the
Loans at the time owing to it or in the case of an assignment to a
Lender or an Affiliate of a Lender or an Approved Fund (as defined in
subsection (g) of this Section) with respect to a Lender, the aggregate
amount of the Revolving Credit Commitment or Letter of Credit
Commitment (which for this purpose includes Loans outstanding
thereunder) subject to each such assignment, determined as of the date
the Assignment and Assumption with respect to such assignment is
delivered to the Agent or, if "Trade Date" is specified in the
Assignment and Assumption, as of the Trade Date, shall not be less than
$5,000,000 unless each of the Agent and, so long as no Event of Default
has occurred and is continuing, the Borrower otherwise consents (each
such
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consent not to be unreasonably withheld or delayed); (ii) each partial
assignment shall be made as an assignment of a proportionate part of
all the assigning Lender's rights and obligations under this Agreement
with respect to the Loans, the Revolving Credit Commitment or Letter of
Credit Commitment assigned; (iii) any assignment of a Revolving Credit
Commitment or Letter of Credit Commitment must be approved by the Agent
and the Issuing Bank unless the Person that is the proposed assignee is
itself a Lender (whether or not the proposed assignee would otherwise
qualify as an Eligible Assignee); and (iv) the parties to each
assignment shall execute and deliver to the Agent an Assignment and
Assumption, together with a processing and recordation fee of $3,500.
Subject to acceptance and recording thereof by the Agent pursuant to
subsection (c) of this Section, from and after the effective date
specified in each Assignment and Assumption, the Eligible Assignee
thereunder shall be a party to this Agreement and, to the extent of the
interest assigned by such Assignment and Assumption, have the rights
and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this
Agreement (and, in the case of an Assignment and Assumption covering
all of the assigning Lender's rights and obligations under this
Agreement, such Lender shall cease to be a party hereto but shall
continue to be entitled to the benefits of Sections 6.1, 6.5, 6.6, 13.5
and 13.9 with respect to facts and circumstances occurring prior to the
effective date of such assignment). Upon request, the Borrower (at its
expense) shall execute and deliver a Note to the assignee Lender. Any
assignment or transfer by a Lender of rights or obligations under this
Agreement that does not comply with this subsection shall be treated
for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with
subsection (d) of this Section.
(c) The Agent, acting solely for this purpose as an agent
of the Borrower, shall maintain at the Agent's office a copy of each
Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amounts of the Loans and Letters of
Credit owing to, each Lender pursuant to the terms hereof from time to
time (the "Register"). The entries in the Register shall be conclusive,
and the Borrower, the Agent and the Lenders may treat each Person whose
name is recorded in the Register pursuant to the terms hereof as a
Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary. The Register shall be available for inspection
by the Borrower and any Lender, at any reasonable time and from time to
time upon reasonable prior notice.
(d) Any Lender may at any time, without the consent of,
or notice to, the Borrower or the Agent, sell participations to any
Person (other than a natural person or the Borrower or any of the
Borrower's Affiliates or Subsidiaries) (each, a "Participant") in all
or a portion of such Lender's rights and/or obligations under this
Agreement (including all or a portion of its Revolving Credit
Commitment or Letter of Credit Commitment and/or the Loans (including
such Lender's participations in Letters of Credit) owing to it);
provided that (i) such Lender's obligations under this Agreement shall
remain unchanged, (ii) such Lender shall remain solely responsible to
the other parties hereto for the performance of such obligations and
(iii) the Borrower, the Agent and the other Lenders shall continue to
deal solely and directly with such Lender in
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connection with such Lender's rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Lender sells
such a participation shall provide that such Lender shall retain the
sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided
that such agreement or instrument may provide that such Lender will
not, without the consent of the Participant, agree to any amendment,
waiver or other modification described in the first proviso to Section
13.6 that directly affects such Participant. Subject to subsection (e)
of this Section, the Borrower agrees that each Participant shall be
entitled to the benefits of Sections 6.1, 6.5 and 6.6 to the same
extent as if it were a Lender and had acquired its interest by
assignment pursuant to subsection (b) of this Section. To the extent
permitted by law, each Participant also shall be entitled to the
benefits of Section 13.3 as though it were a Lender, provided such
Participant agrees to be subject to Section 11.5 as though it were a
Lender.
(e) A Participant shall not be entitled to receive any
greater payment under Section 6.1 or 6.6 than the applicable Lender
would have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to such
Participant is made with the Borrower's prior written consent. A
Participant that would be a foreign lender if it were a Lender shall
not be entitled to the benefits of Section 6.6 unless the Borrower is
notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with
requirements of the Agent with respect to the delivery of tax forms
required of foreign lenders..
(f) Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this
Agreement (including under its Note, if any) to secure obligations of
such Lender, including any pledge or assignment to secure obligations
to a Federal Reserve Bank; provided that no such pledge or assignment
shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party
hereto.
(g) As used herein, the following terms have the
following meanings:
"Eligible Assignee" means (a) a Lender; (b) an Affiliate of a
Lender; (c) an Approved Fund; and (d) any other Person (other than a
natural person) approved by (i) the Agent and the Issuing Bank, and
(ii) unless an Event of Default has occurred and is continuing, the
Borrower (each such approval not to be unreasonably withheld or
delayed); provided that notwithstanding the foregoing, "Eligible
Assignee" shall not include the Borrower or any of the Borrower's
Affiliates or Subsidiaries.
"Fund" means any Person (other than a natural person) that is
(or will be) engaged in making, purchasing, holding or otherwise
investing in commercial loans and similar extensions of credit in the
ordinary course of its business.
"Approved Fund" means any Fund that is administered or managed
by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an
Affiliate of an entity that administers or manages a Lender.
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(h) Notwithstanding anything to the contrary contained
herein, if at any time Bank of America assigns all of its Revolving
Credit Commitment, Letter of Credit Commitment and Loans pursuant to
subsection (b) above, Bank of America may upon 30 days' prior written
notice to the Borrower and the Lenders, resign as Issuing Bank. In the
event of any such resignation as Issuing Bank, the Borrower shall be
entitled to appoint from among the Lenders a successor Issuing Bank
hereunder; provided, however, that no failure by the Borrower to
appoint any such successor shall affect the resignation of Bank of
America as Issuing Bank, as the case may be. If Bank of America resigns
as Issuing Bank, it shall retain all the rights and obligations of the
Issuing Bank hereunder with respect to all Letters of Credit
outstanding as of the effective date of its resignation as Issuing Bank
and all Letter of Credit with respect thereto.
13.2. Notices and Other Communications; Facsimile Copies.
(a) General. Unless otherwise expressly provided herein,
all notices and other communications provided for hereunder shall be in writing
(including by facsimile transmission). All such written notices shall be mailed,
faxed or delivered to the applicable address, facsimile number or (subject to
subsection (c) below) electronic mail address, and all notices and other
communications expressly permitted hereunder to be given by telephone shall be
made to the applicable telephone number, as follows:
(i) if to the Borrower:
P.F. Chang's China Bistro, Inc.
15210 N. Scottsdale Road
Suite 300
Phoenix, Arizona 85254
Attention: Chief Financial Officer
Telephone: (602) 381-7466
Telefacsimile: (602) 957-8998
E-mail: kristinac@pfchangs.com
(ii) if to the Agent:
Bank of America, N.A.
Agency Management
101 N. Tryon Street, 8th Floor
Mail Code: NC1-001-08-19
Charlotte, NC 28255
Attention: Katherine E. Traviss
Agency Management Officer
Telephone: 704-387-5448
Facsimile: 704-409-0637
Email: katherine.e.traviss@bankofamerica.com
with a copy to:
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Bank of America, N.A.
Portfolio Management
100 N. Tryon Street, 17th Floor
Mail Code: NC1-007-17-12
Charlotte, NC 28255
Attention: Cameron S. Cardozo
Portfolio Management Associate
Telephone: 704-388-6834
Facsimile: 704-388-8268
Email: Cameron.s.cardozo@bankofamerica.com
(iii) if to the Lenders:
At the addresses set forth on the signature
pages hereof and on the signature page of
each Assignment and Assumption;
(iv) if to any other Credit Party, at the address
set forth on the signature page of the
Facility Guaranty or Security Instrument
executed by such Credit Party, as the case
may be.
All such notices and other communications shall be deemed to
be given or made upon the earlier to occur of (i) actual receipt by the
relevant party hereto and (ii) (A) if delivered by hand or by courier,
when signed for by or on behalf of the relevant party hereto; (B) if
delivered by mail, four Business Days after deposit in the mails,
postage prepaid; (C) if delivered by facsimile, when sent and receipt
has been confirmed by telephone; and (D) if delivered by electronic
mail (which form of delivery is subject to the provisions of subsection
(c) below), when delivered; provided, however, that notices and other
communications to the Agent and the Issuing Bank pursuant to Articles
II, III and IV shall not be effective until actually received by such
Person. In no event shall a voicemail message be effective as a notice,
communication or confirmation hereunder.
(b) Effectiveness of Facsimile Documents and Signatures.
Loan Documents may be transmitted and/or signed by facsimile. The
effectiveness of any such documents and signatures shall, subject to
applicable law, have the same force and effect as manually-signed
originals and shall be binding on all Credit Parties, the Agent and the
Lenders. The Agent may also require that any such documents and
signatures be confirmed by a manually-signed original thereof;
provided, however, that the failure to request or deliver the same
shall not limit the effectiveness of any facsimile document or
signature.
(c) Limited Use of Electronic Mail. Electronic mail and
Internet and intranet websites may be used only to distribute routine
communications, such as financial statements and other information as
provided in Section 9.1, and to distribute Loan Documents for execution
by the parties thereto, and may not be used for notice under the Loan
Documents.
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(d) Reliance by Agent and Lenders. The Agent and the
Lenders shall be entitled to rely and act upon any notices (including
telephonic Borrowing Notices) purportedly given by or on behalf of the
Borrower even if (i) such notices were not made in a manner specified
herein, were incomplete or were not preceded or followed by any other
form of notice specified herein, or (ii) the terms thereof, as
understood by the recipient, varied from any confirmation thereof. The
Borrower shall indemnify each Agent-Related Person and each Lender from
all losses, costs, expenses and liabilities resulting from the reliance
by such Person on each notice purportedly given by or on behalf of the
Borrower. All telephonic notices to and other communications with the
Agent may be recorded by the Agent, and each of the parties hereto
hereby consents to such recording.
13.3. Right of Set-off; Adjustments. (a) Upon the occurrence and
during the continuance of any Event of Default, each Lender (and each of its
affiliates) is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by such Lender (or any of its affiliates)
to or for the credit or the account of the Borrower against any and all of the
obligations of the Borrower now or hereafter existing under this Agreement and
the Note held by such Lender, irrespective of whether such Lender shall have
made any demand under this Agreement or such Note and although such obligations
may be unmatured or otherwise fully-secured. Each Lender agrees promptly to
notify the Borrower in writing after any such set-off and application made by
such Lender; provided, however, that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of each Lender
under this Section 13.3 are in addition to other rights and remedies (including,
without limitation, other rights of set-off) that such Lender may have.
(b) If any Lender (a "benefitted Lender") shall at any
time receive any payment of all or part of the Loans owing to it, or
interest thereon, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, or otherwise), in a greater
proportion than any such payment to or collateral received by any other
Lender, if any, in respect of such other Lender's Loans owing to it, or
interest thereon, such benefitted Lender shall purchase for cash from
the other Lenders a participating interest in such portion of each such
other Lender's Loans owing to it, or shall provide such other Lenders
with the benefits of any such collateral, or the proceeds thereof, as
shall be necessary to cause such benefitted Lender to share the excess
payment or benefits of such collateral or proceeds ratably with each of
the Lenders; provided, however, that if all or any portion of such
excess payment or benefits is thereafter recovered from such benefitted
Lender, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without
interest. The Borrower agrees that any Lender so purchasing a
participation from a Lender pursuant to this Section 13.3 may, to the
fullest extent permitted by law, exercise all of its rights of payment
(including the right of set-off) with respect to such participation as
fully as if such Person were the direct creditor of the Borrower in the
amount of such participation.
83
13.4. Survival. All covenants, agreements, representations and
warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the Agent and
each Lender, regardless of any investigation made by the Agent or any Lender or
on their behalf and notwithstanding that the Agent or any Lender may have had
notice or knowledge of any Default at the time of any borrowing, and shall
continue in full force and effect as long as any Loan or any other Obligation
hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall
remain outstanding.
13.5. Attorney Costs, Expenses and Taxes. The Borrower agrees (a) to
pay or reimburse the Agent for all actual and reasonable costs and expenses
incurred in connection with the development, preparation, negotiation and
execution of this Agreement and the other Loan Documents and any amendment,
waiver, consent or other modification of the provisions hereof and thereof
(whether or not the transactions contemplated hereby or thereby are
consummated), and the consummation and administration of the transactions
contemplated hereby and thereby, including all Attorney Costs, and (b) to pay or
reimburse the Agent and each Lender for all actual and reasonable costs and
expenses incurred in connection with the enforcement, attempted enforcement, or
preservation of any rights or remedies under this Agreement or the other Loan
Documents (including all such costs and expenses incurred during any "workout"
or restructuring in respect of the Obligations and during any legal proceeding,
including any proceeding under the Bankruptcy Code of the United States or
similar debtor relief laws), including all Attorney Costs. The foregoing costs
and expenses shall include all search, filing, recording, title insurance and
appraisal charges and fees and taxes related thereto, and other out-of-pocket
expenses incurred by the Agent and the cost of independent public accountants
and other outside experts retained by the Agent or any Lender. All amounts due
under this Section 13.5 shall be payable within ten Business Days after demand
therefor. The agreements in this Section shall survive the termination of the
Revolving Credit Commitments and the Letter of Credit Commitments and repayment
of all other Obligations.
13.6. Amendments, Etc. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent to any departure by
the Borrower or any other Credit Party therefrom, shall be effective unless in
writing signed by the Required Lenders and the Borrower or the applicable Credit
Party, as the case may be, and acknowledged by the Agent, and each such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such amendment, waiver or
consent shall:
(a) waive any condition set forth in Section 7.1 or 7.2
without the written consent of each Lender;
(b) extend or increase the Revolving Credit Commitment or
Letter of Credit Commitment of any Lender (or reinstate any the
Revolving Credit Commitment or Letter of Credit Commitment terminated
pursuant to Article IX) without the written consent of such Lender;
84
(c) postpone any date fixed by this Agreement or any
other Loan Document for any payment or mandatory prepayment (of
principal, interest, fees or other amounts due to the Lenders (or any
of them) or any scheduled or mandatory reduction of the Revolving
Credit Commitments or Letter of Credit Commitments hereunder or under
any other Loan Document without the written consent of each Lender
directly affected thereby;
(d) reduce the principal of, or the rate of interest
specified herein on, any Loan or Letter of Credit, or (subject to
clause (iv) of the second proviso to this Section 13.6) any fees or
other amounts payable hereunder or under any other Loan Document, or
change the manner of computation of any financial ratio (including any
change in any applicable defined term) used in determining the
Applicable Margin that would result in a reduction of any interest rate
on any Loan or any fee payable hereunder without the written consent of
each Lender directly affected thereby; provided, however, that only the
consent of the Required Lenders shall be necessary (i) to amend the
definition of "Default Rate" or to waive any obligation of the Borrower
to pay interest at the Default Rate or (ii) to amend any financial
covenant hereunder (or any defined term used therein) even if the
effect of such amendment would be to reduce the rate of interest on any
Loan or Letter of Credit or to reduce any fee payable hereunder;
(e) change Section 11.5 or Section 13.3 in a manner that
would alter the pro rata sharing of payments required thereby without
the written consent of each Lender;
(f) change any provision of this Section or the
definition of "Required Lenders" or any other provision hereof
specifying the number or percentage of Lenders required to amend, waive
or otherwise modify any rights hereunder or make any determination or
grant any consent hereunder, without the written consent of each
Lender; or
(g) release any Guarantor from the Facility Guaranty
without the written consent of each Lender;
and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Issuing Bank in addition to the Lenders required
above, affect the rights or duties of the Issuing Bank under this Agreement or
any Letter of Credit Application relating to any Letter of Credit issued or to
be issued by it; (ii) no amendment, waiver or consent shall, unless in writing
and signed by the Agent in addition to the Lenders required above, affect the
rights or duties of the Agent under this Agreement or any other Loan Document;
and (iv) the Commitment Letter dated November 4, 2002 may be amended, or rights
or privileges thereunder waived, in a writing executed only by the parties
thereto. Notwithstanding anything to the contrary herein, no Defaulting Lender
shall have any right to approve or disapprove any amendment, waiver or consent
hereunder, except that the Revolving Credit Commitment and Letter of Credit
Commitment of such Lender may not be increased or extended without the consent
of such Lender.
13.7. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, and it shall not be
85
necessary in making proof of this Agreement to produce or account for more than
one such fully-executed counterpart.
13.8. Termination. The termination of this Agreement shall not
affect any rights of the Borrower, the Lenders or the Agent or any obligation of
the Borrower, the Lenders or the Agent, arising prior to the effective date of
such termination, and the provisions hereof shall continue to be fully operative
until all transactions entered into or rights created or obligations incurred
prior to such termination have been fully disposed of, concluded or liquidated
and the Obligations arising prior to or after such termination have been
irrevocably paid in full. The rights granted to the Agent for the benefit of the
Lenders under the Loan Documents shall continue in full force and effect,
notwithstanding the termination of this Agreement, until all of the Obligations
have been paid in full after the termination hereof (other than Obligations in
the nature of continuing indemnities or expense reimbursement obligations not
yet due and payable, which shall continue) or the Borrower has furnished the
Lenders and the Agent with an indemnification satisfactory to the Agent and each
Lender with respect thereto. Notwithstanding the foregoing, if after receipt of
any payment of all or any part of the Obligations, any Lender is for any reason
compelled to surrender such payment to any Person because such payment is
determined to be void or voidable as a preference, impermissible setoff, a
diversion of trust funds or for any other reason, this Agreement shall continue
in full force and the Borrower shall be liable to, and shall indemnify and hold
the Agent or such Lender harmless for, the amount of such payment surrendered
until the Agent or such Lender shall have been finally and irrevocably paid in
full. The provisions of the foregoing sentence shall be and remain effective
notwithstanding any contrary action which may have been taken by the Agent or
the Lenders in reliance upon such payment, and any such contrary action so taken
shall be without prejudice to the Agent or the Lenders' rights under this
Agreement and shall be deemed to have been conditioned upon such payment having
become final and irrevocable.
13.9. Indemnification by the Borrower. Whether or not the
transactions contemplated hereby are consummated, the Borrower shall indemnify
and hold harmless each Agent-Related Person, each Lender and their respective
Affiliates, directors, officers, employees, counsel, agents and
attorneys-in-fact (collectively the "Indemnitees") from and against any and all
liabilities, obligations, losses, damages, penalties, claims, demands, actions,
judgments, suits, costs, expenses and disbursements (including Attorney Costs)
of any kind or nature whatsoever which may at any time be imposed on, incurred
by or asserted against any such Indemnitee in any way relating to or arising out
of or in connection with (a) the execution, delivery, enforcement, performance
or administration of any Loan Document or any other agreement, letter or
instrument delivered in connection with the transactions contemplated thereby or
the consummation of the transactions contemplated thereby, (b) any Loan or
Letter of Credit or the use or proposed use of the proceeds therefrom (including
any refusal by the Issuing Bank to honor a demand for payment under a Letter of
Credit if the documents presented in connection with such demand do not strictly
comply with the terms of such Letter of Credit), any actual or prospective
claim, litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory (including any investigation
of, preparation for, or defense of any pending or threatened claim,
investigation, litigation or proceeding) and regardless of whether any
Indemnitee is a party thereto (all the foregoing, collectively, the "Indemnified
Liabilities"), in all cases, whether or not caused by or arising, in whole or in
part, out of the negligence of the Indemnitee; provided that such indemnity
shall not, as to any
86
Indemnitee, be available to the extent that such liabilities, obligations,
losses, damages, penalties, claims, demands, actions, judgments, suits, costs,
expenses or disbursements are determined by a court of competent jurisdiction by
final and nonappealable judgment to have resulted from the gross negligence or
willful misconduct of such Indemnitee. No Indemnitee shall be liable for any
damages arising from the use by others of any information or other materials
obtained through IntraLinks or other similar information transmission systems in
connection with this Agreement, nor shall any Indemnitee have any liability for
any indirect or consequential damages relating to this Agreement or any other
Loan Document or arising out of its activities in connection herewith or
therewith (whether before or after the Closing Date). All amounts due under this
Section 13.9 shall be payable within ten Business Days after demand therefor.
The agreements in this Section shall survive the resignation of the Agent, the
replacement of any Lender, the termination of the Revolving Credit Commitments
and the Letter of Credit Commitments and the repayment, satisfaction or
discharge of all the other Obligations.
13.10. Severability. If any provision of this Agreement or the other
Loan Documents shall be determined to be illegal or invalid as to one or more of
the parties hereto, then such provision shall remain in effect with respect to
all parties, if any, as to whom such provision is neither illegal nor invalid,
and in any event all other provisions hereof shall remain effective and binding
on the parties hereto.
13.11. Entire Agreement. This Agreement, together with the other Loan
Documents, constitutes the entire agreement among the parties with respect to
the subject matter hereof and supersedes all previous proposals, negotiations,
representations, commitments and other communications between or among the
parties, both oral and written, with respect thereto (except that those
provisions (if any) which by the express terms of the commitment letter dated as
of November 4, 2002, executed by Bank of America and BAS and accepted by the
Borrower, survive the closing of the Revolving Credit Facility and the Letter of
Credit Facility shall survive and continue in effect).
13.12. Agreement Controls. In the event that any term of any of the
Loan Documents other than this Agreement conflicts with any express term of this
Agreement, the terms and provisions of this Agreement shall control to the
extent of such conflict.
13.13. Usury Savings Clause. Notwithstanding any other provision
herein, the aggregate interest rate charged under any of the Notes, including
all charges or fees in connection therewith deemed in the nature of interest
under applicable law shall not exceed the Highest Lawful Rate (as such term is
defined below). If the rate of interest (determined without regard to the
preceding sentence) under this Agreement at any time exceeds the Highest Lawful
Rate (as defined below), the outstanding amount of the Loans made hereunder
shall bear interest at the Highest Lawful Rate until the total amount of
interest due hereunder equals the amount of interest which would have been due
hereunder if the stated rates of interest set forth in this Agreement had at all
times been in effect. In addition, if when the Loans made hereunder are repaid
in full the total interest due hereunder (taking into account the increase
provided for above) is less than the total amount of interest which would have
been due hereunder if the stated rates of interest set forth in this Agreement
had at all times been in effect, then to the extent permitted by law, the
Borrower shall pay to the Agent an amount equal to the difference between the
amount of interest paid and the amount of interest which would have been paid if
the Highest
87
Lawful Rate had at all times been in effect. Notwithstanding the foregoing, it
is the intention of the Lenders and the Borrower to conform strictly to any
applicable usury laws. Accordingly, if any Lender contracts for, charges, or
receives any consideration which constitutes interest in excess of the Highest
Lawful Rate, then any such excess shall be cancelled automatically and, if
previously paid, shall at such Lender's option be applied to the outstanding
amount of the Loans made hereunder or be refunded to the Borrower. As used in
this paragraph, the term "Highest Lawful Rate" means the maximum lawful interest
rate, if any, that at any time or from time to time may be contracted for,
charged, or received under the laws applicable to such Lender which are
presently in effect or, to the extent allowed by law, under such applicable laws
which may hereafter be in effect and which allow a higher maximum nonusurious
interest rate than applicable laws now allow.
13.14. Payments. All principal, interest, and other amounts to be
paid by the Borrower under this Agreement and the other Loan Documents shall be
paid to the Agent at the Principal Office in Dollars and in immediately
available funds, without setoff, deduction or counterclaim. All payments
properly made to the Agent by the Borrower hereunder shall satisfy the
Borrower's payment obligations to which they relate notwithstanding any failure
by the Agent to make further payments to the Lenders required hereunder. Subject
to the definition of "Interest Period" herein, whenever any payment under this
Agreement or any other Loan Document shall be stated to be due on a day that is
not a Business Day, such payment may be made on the next succeeding Business
Day, and such extension of time in such case shall be included in the
computation of interest and fees, as applicable, and as the case may be.
13.15. Governing Law; Waiver of Jury Trial.
(a) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER
THAN THOSE SECURITY INSTRUMENTS WHICH EXPRESSLY PROVIDE THAT THEY SHALL
BE GOVERNED BY THE LAWS OF ANOTHER JURISDICTION) SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA
APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH
STATE WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
(b) THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY AGREES
AND CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN MAY
BE INSTITUTED IN ANY STATE OR FEDERAL COURT SITTING IN THE COUNTY OF
SAN DIEGO, STATE OF CALIFORNIA, UNITED STATES OF AMERICA AND, BY THE
EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER EXPRESSLY WAIVES
ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE
IN, OR TO THE EXERCISE OF JURISDICTION OVER IT AND ITS PROPERTY BY, ANY
SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING, AND THE BORROWER
HEREBY IRREVOCABLY SUBMITS GENERALLY AND
88
UNCONDITIONALLY TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUCH SUIT,
ACTION OR PROCEEDING.
(c) THE PARTIES HERETO AGREE THAT SERVICE OF PROCESS MAY
BE MADE BY PERSONAL SERVICE OF A COPY OF THE SUMMONS AND COMPLAINT OR
OTHER LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING, OR BY
REGISTERED OR CERTIFIED MAIL (POSTAGE PREPAID) TO THE ADDRESS OF THE
PARTY PROVIDED IN SECTION 13.2, OR BY ANY OTHER METHOD OF SERVICE
PROVIDED FOR UNDER THE APPLICABLE LAWS IN EFFECT IN THE STATE OF
ARIZONA.
(d) NOTHING CONTAINED IN SUBSECTIONS (b) OR (c) HEREOF
SHALL PRECLUDE THE AGENT OR ANY LENDER FROM BRINGING ANY SUIT, ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT IN THE
COURTS OF ANY JURISDICTION WHERE THE BORROWER OR ANY OF THE BORROWER'S
PROPERTY OR ASSETS MAY BE FOUND OR LOCATED. TO THE EXTENT PERMITTED BY
THE APPLICABLE LAWS OF ANY SUCH JURISDICTION, THE BORROWER HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT AND EXPRESSLY
WAIVES, IN RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING, OBJECTION TO
THE EXERCISE OF JURISDICTION OVER IT AND ITS PROPERTY BY ANY SUCH OTHER
COURT OR COURTS WHICH NOW OR HEREAFTER MAY BE AVAILABLE UNDER
APPLICABLE LAW.
(e) EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES
ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF
THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED
THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND
WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY
AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY
PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
(f) EACH OF THE PARTIES HERETO HEREBY EXPRESSLY WAIVE ANY
OBJECTION IT MAY HAVE THAT ANY COURT TO WHOSE JURISDICTION IT HAS
SUBMITTED PURSUANT TO THE TERMS HEREOF IS AN INCONVENIENT FORUM.
89
13.16. Confidentiality. The Agent and each Lender (each, a "Lending
Party") agrees to keep confidential any information furnished or made available
to it by the Borrower pursuant to this Agreement that is marked confidential;
provided that nothing herein shall prevent any Lending Party from disclosing
such information (a) to any other Lending Party or any affiliate of any Lending
Party, or any officer, director, employee, agent, or advisor of any Lending
Party or affiliate of any Lending Party, (b) to any other Person if reasonably
incidental to the administration of the credit facility provided herein, (c) as
required by any law, rule, or regulation, (d) upon the order of any court or
administrative agency, (e) upon the request or demand of any regulatory agency
or authority, (f) that is or becomes available to the public or that is or
becomes available to any Lending Party other than as a result of a disclosure by
any Lending Party prohibited by this Agreement, (g) in connection with any
litigation to which such Lending Party or any of its affiliates may be a party,
(h) to the extent necessary in connection with the exercise of any remedy under
this Agreement or any other Loan Document, and (i) subject to provisions
substantially similar to those contained in this Section, to any actual or
proposed participant or assignee.
[Signatures on following pages]
90
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be made, executed and delivered by their duly authorized officers as of the day
and year first above written.
P.F. CHANG'S CHINA BISTRO, INC.
By:_____________________________________________
Name:___________________________________________
Title:__________________________________________
[CORPORATE SEAL]
BANK OF AMERICA, N.A.,
as Agent for the Lenders
By:_____________________________________________
Name:___________________________________________
Title:__________________________________________
CREDIT AGREEMENT
SIGNATURE PAGE 1 OF 3
BANK OF AMERICA, N.A., as a Lender
By:_____________________________________________
Name:___________________________________________
Title:__________________________________________
BANK OF AMERICA
Administrative Agent's Office and
Bank of America's Lending Office
(for payments and Requests for
Credit Extensions):
Bank of America, N.A.
101 North Tryon Street, 15th Floor
Mail Code: NC1-001-15-04
Charlotte, NC 28255
Attention: Jason Favret
Telephone: 704-386-6837
Facsimile: 704-409-0356
Electronic Mail: jason.favret@bankofamreica.com
Account No.: 1366212 250600
Ref: PF Changs China Bistro
ABA# 053-000-196
L/C Issuer:
Bank of America, N.A.
Trade Operations-Los Angeles #22621
333 S. Beaudry Avenue, 19th Floor
Mail Code: CA9-703-19-23
Los Angeles, CA 90017-1466
Attention: Trade Operations
Telephone: 213.345.5231
Facsimile: 213.345.6684
CREDIT AGREEMENT
SIGNATURE PAGE 2 OF 3
Other Notices as Administrative Agent:
Bank of America, N.A.
Agency Management
101 N. Tryon Street, 8th Floor
Mail Code: NC1-001-08-19
Charlotte, NC 28255
Attention: Katherine E. Traviss
Agency Management Officer
Telephone: 704-387-5448
Facsimile: 704-409-0637
Email: katherine.e.traviss@bankofamerica.com
Other Notices as a Lender:
Bank of America, N.A.
Portfolio Management
100 N. Tryon Street, 17th Floor
Mail Code: NC1-007-17-12
Charlotte, NC 28255
Attention: Cameron S. Cardozo
Portfolio Management Associate
Telephone: 704-388-6834
Facsimile: 704-388-8268
Email: Cameron.s.cardozo@bankofamerica.com
CREDIT AGREEMENT
SIGNATURE PAGE 3 OF 3
EXHIBIT A
Applicable Commitment Percentages
Applicable
Revolving Credit Commitment
Lender Commitment Percentage
- ------ ---------------- ----------
Bank of America, N.A. $ 20,000,000 100%
------------ ---
$ 20,000,000 100%
A-1
EXHIBIT B
Form of Assignment and Assumption
Reference is made to the Credit Agreement dated as of December 20, 2002
(the "Credit Agreement") among P.F. Chang's China Bistro, Inc., a Delaware
corporation (the "Borrower"), the Lenders (as defined in the Credit Agreement)
and Bank of America, N.A., as agent for the Lenders (the "Agent"). Terms defined
in the Credit Agreement are used herein with the same meaning.
The "Assignor" and the "Assignee" referred to on Schedule 1 agree as
follows:
1. The Assignor hereby sells and assigns to the Assignee, WITHOUT
RECOURSE and without representation or warranty except as expressly set forth
herein, and the Assignee hereby purchases and assumes from the Assignor, an
interest in and to the Assignor's rights and obligations under the Credit
Agreement and the other Loan Documents as of the date hereof equal to the
percentage interest specified on Schedule 1 of all outstanding rights and
obligations under the Credit Agreement and the other Loan Documents.* After
giving effect to such sale and assignment, the Assignee's Revolving Credit
Commitment and the amount of the Loans owing to the Assignee will be as set
forth on Schedule 1.
2. The Assignor (i) represents and warrants that it is the legal
and beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the Loan
Documents or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Loan Documents or any other instrument or document
furnished pursuant thereto; (iii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of any Credit
Party or the performance or observance by any Credit Party of any of its
obligations under the Loan Documents or any other instrument or document
furnished pursuant thereto; and (iv) attaches the Note held by the Assignor and
requests that the Agent exchange such Note for new Notes payable to the order of
the Assignee in an amount equal to the Revolving Credit Commitment assumed by
the Assignee pursuant hereto and to the Assignor in an amount equal to the
Revolving Credit Commitment retained by the Assignor, if any, as specified on
Schedule 1.
3. The Assignee (i) confirms that it has received a copy of the
Credit Agreement, together with copies of the financial statements referred to
in Section 9.1 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Assumption; (ii) agrees that it will, independently and without
reliance upon the Agent, the Assignor or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement; (iii) confirms that it is an Eligible Assignee; (iv) appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Credit Agreement as are delegated to
- ------------------
* In the case of Bank of America as Assignor, excluding any rights,
benefits, or duties as Issuing Bank.
B-1
the Agent by the terms thereof, together with such powers and discretion as are
reasonably incidental thereto; (v) agrees that it will perform in accordance
with their terms all of the obligations that by the terms of the Credit
Agreement are required to be performed by it as a Lender; and (vi) attaches any
U.S. Internal Revenue Service or other forms required under Section 6.6.
4. Following the execution of this Assignment and Assumption, it
will be delivered to the Agent for acceptance and recording by the Agent. The
effective date for this Assignment and Assumption (the "Effective Date") shall
be the date of acceptance hereof by the Agent, unless otherwise specified on
Schedule 1.
5. Upon such acceptance and recording by the Agent, as of the
Effective Date, (i) the Assignee shall be a party to the Credit Agreement and,
to the extent provided in this Assignment and Assumption, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Assumption, relinquish its rights and be
released from its obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Agent, from and
after the Effective Date, the Agent shall make all payments under the Credit
Agreement and the Notes in respect of the interest assigned hereby (including,
without limitation, all payments of principal, interest and commitment fees with
respect thereto) to the Assignee. The Assignor and Assignee shall make all
appropriate adjustments in payments under the Credit Agreement and the Notes for
periods prior to the Effective Date directly between themselves.
7. This Assignment and Assumption shall be governed by, and
construed in accordance with, the laws of the State of Arizona.
8. This Assignment and Assumption may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of Schedule 1 to this Assignment and Assumption by
telefacsimile shall be effective as delivery of a manually executed counterpart
of this Assignment and Assumption.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused Schedule
1 to this Assignment and Assumption to be executed by their officers thereunto
duly authorized as of the date specified thereon.
B-2
Schedule 1
Percentage interest assigned: ________%
Assignee's Revolving Credit Commitment: $_______
Aggregate outstanding principal amount
of Loans assigned: $_______
Principal amount of Note
payable to Assignee: $_______
Principal amount of Note
payable to Assignor: $_______
Effective Date (if other than date
of acceptance by Agent): *_______, ____
[NAME OF ASSIGNOR], as Assignor
By:____________________________
Title:______________________
Dated: _________________, 20__.
[NAME OF ASSIGNEE], as Assignee
By:____________________________
Title:______________________
Domestic Lending Office:
Eurodollar Lending Office:
* This date should be no earlier than five Business Days after the
delivery of this Assignment and Assumption to the Agent.
B-3
Accepted [and Approved] **
this ___ day of ___________, 200 _
BANK OF AMERICA, N.A., as Agent
By:_________________________________________
Title:___________________________________
[Approved this ____ day
of ____________, 200_
P.F. CHANG'S CHINA BISTRO, INC.
By:_________________________________________]**
Title:___________________________________
- ------------------
** Required if the Assignee is an Eligible Assignee solely by reason of
clause (iii) of the definition of "Eligible Assignee".
B-4
EXHIBIT C
Notice of Appointment (or Revocation) of Authorized Representative
Reference is hereby made to the Credit Agreement dated as of December
20, 2002 (the "Agreement") among P.F. China Bistro, Inc., a Delaware corporation
(the "Borrower"), the Lenders (as defined in the Agreement), and Bank of
America, N.A., as Agent for the Lenders ("Agent"). Capitalized terms used but
not defined herein shall have the respective meanings therefor set forth in the
Agreement.
The Borrower hereby nominates, constitutes and appoints each individual
named below as an Authorized Representative under the Loan Documents, and hereby
represents and warrants that (i) set forth opposite each such individual's name
is a true and correct statement of such individual's office (to which such
individual has been duly elected or appointed), a genuine specimen signature of
such individual and an address for the giving of notice, and (ii) each such
individual has been duly authorized by the Borrower to act as Authorized
Representative under the Loan Documents:
Name and Address Office Specimen Signature
__________________ ____________________ _________________________
__________________
__________________
__________________ ____________________ _________________________
__________________
__________________
Borrower hereby revokes (effective upon receipt hereof by the Agent) the prior
appointment of ________________ as an Authorized Representative.
This the ___ day of __________________, 200_.
P.F. CHANG'S CHINA BISTRO, INC.
By:_____________________________________________
Name:___________________________________________
Title:__________________________________________
C-1
EXHIBIT D
Form of Borrowing Notice
To: Bank of America, N.A.,
as Agent
101 North Tryon Street, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Agency Services
Telefacsimile: (704)386-9923
Reference is hereby made to the Credit Agreement dated as of December
20, 2002 (the "Agreement") among P.F. Chang's China Bistro, Inc. (the
"Borrower"), the Lenders (as defined in the Agreement), and Bank of America,
N.A., as Agent for the Lenders ("Agent"). Capitalized terms used but not defined
herein shall have the respective meanings therefor set forth in the Agreement.
The Borrower through its Authorized Representative hereby gives notice
to the Agent that Loans of the type and amount set forth below be made on the
date indicated:
Type of Loan Interest Aggregate
(check one) Period(1) Amount(2) Date of Loan(3)
- ----------- -------- --------- --------------
Base Rate Loan ________ _________ ______________
Eurodollar Rate Loan -- _________ ______________
1. No Default or Event of Default exists either now or
after giving effect to the borrowing described herein; and
- ------------------
(1) For any Eurodollar Rate Loan, one, two, three or six months.
(2) Must be $500,000 or if greater an integral multiple of $100,000, unless
a Base Rate Refunding Loan.
(3) At least three (3) Business Days later if a Eurodollar Rate Loan;
The Borrower hereby requests that the proceeds of Loans described
in this Borrowing Notice be made available to the Borrower as follows: [insert
transmittal instructions].
The undersigned hereby certifies that:
D-1
2. All the representations and warranties set forth in Article
VIII of the Agreement and in the Loan Documents (other than those expressly
stated to refer to a particular date) are true and correct as of the date hereof
except that the reference to the financial statements in Section 8.6(a) of the
Agreement (solely for the purpose of the representation and warranty contained
in such Section 8.6(a) but not for the purpose of any cross reference to such
Section 8.6(a) or to the financial statements described therein contained in any
other provision of Section 8.6 or elsewhere in Article VIII) to those financial
statements most recently delivered to you pursuant to Section 9.1 of the
Agreement (it being understood that any financial statements delivered pursuant
to Section 9.1(b) have not been certified by independent public accountants).
3. All conditions contained in the Agreement to the making of any
Loan requested hereby have been met or satisfied in full.
P.F. CHANG'S CHINA BISTRO, INC.
BY: ____________________________________________
Authorized Representative
DATE: __________________________________________
D-2
EXHIBIT E
Form of Interest Rate Selection Notice
To: Bank of America, N.A., as Agent
101 North Tryon Street, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Agency Services
Telefacsimile: (704) 386-9923
Reference is hereby made to the Credit Agreement dated as of December
20, 2002 (the "Agreement") among P.F. Chang's China Bistro, Inc. (the
"Borrower"), the Lenders (as defined in the Agreement), and Bank of America,
N.A., as Agent for the Lenders ("Agent"). Capitalized terms used but not defined
herein shall have the respective meanings therefor set forth in the Agreement.
The Borrower through its Authorized Representative hereby gives notice
to the Agent of the following selection of a type of Loan and Interest Period:
Type of Loan Interest Aggregate
(check one) Period(1) Amount(2) Date of Loan(3)
- ----------- -------- --------- --------------
Base Rate Loan ________ _________ ______________
Eurodollar Rate Loan ________ _________ ______________
- ------------------
(1) For any Eurodollar Rate Loan, one, two, three or six months.
(2) Must be $500,000 or if greater an integral multiple of $100,000, unless
a Base Rate Refunding Loan.
(3) At least three (3) Business Days later if a Eurodollar Rate Loan.
P.F. CHANG'S CHINA BISTRO, INC.
BY: ____________________________________________
Authorized Representative
DATE: __________________________________________
E-1
EXHIBIT F
Form of Note
Promissory Note
FOR VALUE RECEIVED, the undersigned (the "Borrower"), hereby promises
to pay to _____________________ or registered assigns (the "Lender"), in
accordance with the provisions of the Agreement (as hereinafter defined), the
principal amount of each Loan from time to time made by the Lender to the
Borrower under that certain Credit Agreement, dated as of December 20, 2002 (as
amended, restated, extended, supplemented or otherwise modified in writing from
time to time, the "Agreement"; the terms defined therein being used herein as
therein defined), among the Borrower, the Lenders from time to time party
thereto, and Bank of America, N.A., as Administrative Agent and Issuing Bank.
The Borrower promises to pay interest on the unpaid principal amount of
each Loan from the date of such Loan until such principal amount is paid in
full, at such interest rates and at such times as provided in the Agreement. All
payments of principal and interest shall be made to the Administrative Agent for
the account of the Lender in Dollars in immediately available funds at the
Administrative Agent's Office. If any amount is not paid in full when due
hereunder, such unpaid amount shall bear interest, to be paid upon demand, from
the due date thereof until the date of actual payment (and before as well as
after judgment) computed at the per annum rate set forth in the Agreement.
This Note is one of the Notes referred to in the Agreement, is entitled
to the benefits thereof and may be prepaid in whole or in part subject to the
terms and conditions provided therein. This Note is also entitled to the
benefits of the Guaranty and is secured by the Collateral. Upon the occurrence
and continuation of one or more of the Events of Default specified in the
Agreement, all amounts then remaining unpaid on this Note shall become, or may
be declared to be, immediately due and payable all as provided in the Agreement.
Loans made by the Lender shall be evidenced by one or more loan accounts or
records maintained by the Lender in the ordinary course of business. The Lender
may also attach schedules to this Note and endorse thereon the date, amount and
maturity of its Loans and payments with respect thereto.
The Borrower, for itself, its successors and assigns, hereby waives
diligence, presentment, protest and demand and notice of protest, demand,
dishonor and non-payment of this Note.
F-1
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF CALIFORNIA.
P.F. CHANG'S CHINA BISTRO, INC.
By: ____________________________________________
Name: __________________________________________
Title: _________________________________________
F-2
LOANS AND PAYMENTS WITH RESPECT THERETO
AMOUNT OF OUTSTANDING
END OF PRINCIPAL OR PRINCIPAL
TYPE OF AMOUNT OF INTEREST INTEREST PAID BALANCE NOTATION
DATE LOAN MADE LOAN MADE PERIOD THIS DATE THIS DATE MADE BY
---- --------- --------- -------- ------------- ----------- --------
- -------- ---------- ---------- ---------- ---------- ---------- --------
- -------- ---------- ---------- ---------- ---------- ---------- --------
- -------- ---------- ---------- ---------- ---------- ---------- --------
- -------- ---------- ---------- ---------- ---------- ---------- --------
- -------- ---------- ---------- ---------- ---------- ---------- --------
- -------- ---------- ---------- ---------- ---------- ---------- --------
- -------- ---------- ---------- ---------- ---------- ---------- --------
- -------- ---------- ---------- ---------- ---------- ---------- --------
- -------- ---------- ---------- ---------- ---------- ---------- --------
- -------- ---------- ---------- ---------- ---------- ---------- --------
- -------- ---------- ---------- ---------- ---------- ---------- --------
- -------- ---------- ---------- ---------- ---------- ---------- --------
- -------- ---------- ---------- ---------- ---------- ---------- --------
- -------- ---------- ---------- ---------- ---------- ---------- --------
- -------- ---------- ---------- ---------- ---------- ---------- --------
- -------- ---------- ---------- ---------- ---------- ---------- --------
- -------- ---------- ---------- ---------- ---------- ---------- --------
- -------- ---------- ---------- ---------- ---------- ---------- --------
- -------- ---------- ---------- ---------- ---------- ---------- --------
F-3
EXHIBIT G
Form of Opinion of Borrower's Counsel
See Attached.
G-1
EXHIBIT H
Compliance Certificate
Bank of America, N.A.
Agency Management
101 N. Tryon Street, 8th Floor
Mail Code: NC1-001-08-19
Charlotte, NC 28255
Attention: Katherine E. Traviss
Agency Management Officer
Facsimile: 704-409-0637
Bank of America, N.A.
Portfolio Management
100 N. Tryon Street, 17th Floor
Mail Code: NC1-007-17-12
Charlotte, NC 28255
Attention: Cameron S. Cardozo
Portfolio Management Associate
Facsimile: 704-388-8268
Reference is hereby made to the Credit Agreement dated as of December
20, 2002 (the "Agreement") among P.F. Chang's China Bistro, Inc., a Delaware
corporation (the "Borrower"), the Lenders (as defined in the Agreement) and Bank
of America, N.A., as Agent for the Lenders ("Agent"). Capitalized terms used but
not otherwise defined herein shall have the respective meanings therefor set
forth in the Agreement. The undersigned, a duly authorized and acting Authorized
Representative, hereby certifies to you as of __________ (the "Determination
Date") as follows:
1. Calculations:
[TO BE PROVIDED]
2. No Default
A. Since __________ (the date of the last similar
certification), (a) the Borrower has not defaulted in the keeping,
observance, performance or fulfillment of its obligations pursuant to
any of the Loan Documents; and (b) no Default or Event of Default
specified in Article XI of the Agreement has occurred and is
continuing.
B. If a Default or Event of Default has occurred since
__________ (the date of the last similar certification), the Borrower
proposes to take the following action with respect to such Default or
Event of Default:
H-1
(Note, if no Default or Event of Default has occurred, insert "Not
Applicable").
The Determination Date is the date of the last required financial
statements submitted to the Lenders in accordance with Section 9.1 of the
Agreement.
IN WITNESS WHEREOF, I have executed this Certificate this _____ day of
__________, ____.
By: ____________________________________________
Authorized Representative
Name: __________________________________________
Title: _________________________________________
H-2
EXHIBIT I
Form of Facility Guaranty
See Attached.
I-1
EXHIBIT J
Form of Security Agreement
See Attached.
J-1
EXHIBIT K
Form of Pledge Agreement
See Attached.
K-1
EXHIBIT L
Form of LC Account Agreement
See Attached.
L-1
EXHIBIT M
Form of LC Account Agreement
See Attached.
M-1
Schedule 8.4
Subsidiaries and Investments in Other Persons
See Attached.
S-1
Schedule 8.6
Indebtedness
See Attached.
S-2
Schedule 8.7
Liens
See Attached.
S-3
Schedule 8.8
Tax Matters
See Attached.
S-4
Schedule 8.10
Litigation
See Attached.
S-5
Schedule 8.13
Intellectual Property
REGISTRATIONS AT
UNITED STATES PATENT AND TRADEMARK OFFICE
- ------------------------------------------------------------------------------------------------------------------------
TRADEMARK OR REGISTRATION REGISTRATION SERIAL
SERVICE MARK NUMBER DATE NUMBER OWNER
- ------------------------------------------------------------------------------------------------------------------------
P.F. Chang's China Bistro 1847107 07-26-94 74410470 P.F. Chang's China Bistro, Inc.
- ------------------------------------------------------------------------------------------------------------------------
Pei Wei 2598916 07-23-02 76067556 P.F. Chang's China Bistro, Inc.
- ------------------------------------------------------------------------------------------------------------------------
Bowl Man Design 2541654 02-19-02 76067762 P.F. Chang's China Bistro, Inc.
- ------------------------------------------------------------------------------------------------------------------------
Pei Wei Asian Diner 2632664 10-08-02 76067761 P.F. Chang's China Bistro, Inc.
- ------------------------------------------------------------------------------------------------------------------------
PENDING APPLICATIONS AT
UNITED STATES PATENT AND TRADEMARK OFFICE
None.
S-6
Schedule 8.21
Operating Facilities
See Attached.
S-7