EXHIBIT 10.2
EXECUTION COPY
$150,000,000
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of April 10, 1996
Among
TWS FUNDING, INC.
as Borrower
and
FLAGSTAR CORPORATION
and
THE BANKS NAMED HEREIN
as Banks
and
BANKERS TRUST COMPANY
CHEMICAL BANK
and
CITIBANK, N.A.
as Co-Administrative Agents
and
CITIBANK, N.A.
as Funding Agent
T A B L E O F C O N T E N T S
Section
Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01. Certain Defined Terms....................................... 2
1.02. Computation of Time Periods................................. 30
1.03. Accounting Terms............................................ 30
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
2.01. The Advances.................................................31
2.02. Making the Advances..........................................32
2.03. Repayment....................................................35
2.04. Termination or Reduction of the Commitments..................35
2.05. Prepayments..................................................36
2.06. Interest.....................................................37
2.07. Fees.........................................................39
2.08. Conversion of Advances.......................................39
2.09. Increased Costs, Etc.........................................40
2.10. Payments and Computations....................................42
2.11. Taxes........................................................43
2.12. Sharing of Payments, Etc.....................................45
2.13. Letters of Credit............................................46
2.14. Use of Proceeds..............................................51
2.15. Defaulting Lenders...........................................51
ARTICLE III
CONDITIONS PRECEDENT
3.01. Conditions Precedent to Closing Date.........................54
3.02. Conditions Precedent to Each Borrowing and Issuance..........58
3.03. Determinations Under Section 3.01............................59
ARTCLE IV
REPRESENTATIONS AND WARRANTIES
4.01. Representations and Warranties of Flagstar...................59
ARTICLE V
COVENANTS OF FLAGSTAR
5.01. Affirmative Covenants....................................... 66
5.02. Negative Covenants.......................................... 71
5.03. Reporting Requirements...................................... 84
5.04. Financial Covenants......................................... 90
ARTICLE VI
EVENTS OF DEFAULT
6.01. Events of Default........................................... 92
6.02. Actions in Respect of the Letters of Credit upon Default.... 97
ARTICLE VII
THE AGENTS
7.01. Authorization and Action.................................... 97
7.02. Agents' Reliance, Etc....................................... 98
7.03. The Agents and Their Affiliates............................. 98
7.04. Lender Party Credit Decision................................ 99
7.05. Indemnification............................................. 99
7.06. Successor Agents............................................101
ARTICLE VIII
MISCELLANEOUS
8.01. Amendments, Etc.............................................102
8.02. Notices, Etc................................................103
8.03. No Waiver; Remedies.........................................103
8.04. Costs and Expenses..........................................103
8.05. Right of Set-off............................................105
8.06. Binding Effect..............................................105
8.07. Assignments and Participations..............................106
8.08. Confidentiality.............................................109
8.09. Jurisdiction, Etc...........................................109
8.10. Governing Law...............................................110
8.11. Execution in Counterparts...................................110
8.12. No Liability in Respect of Letters of Credit................110
8.13. Change of Lending Office....................................111
8.14. Waiver of Jury Trial........................................111
SCHEDULES
Schedule 2.01 - Commitments, Advances and Applicable
Lending Offices
Schedule 4.01(b) - Subsidiaries
Schedule 4.01(c) - Certain Defaults
Schedule 4.01(d) - Required Authorization, Approvals, Etc.
Schedule 4.01(i) - Disclosed Litigation
Schedule 4.01(n) - Withdrawal Liabilities
Schedule 4.01(o) - Welfare Plan Costs
Schedule 4.01(w) - Open Years
Schedule 4.01(x) - Adjustments to Tax Liabilities
Schedule 4.01(bb) - Existing Debt
Schedule 5.02(a) - Liens
EXHIBITS
Exhibit A - Promissory Note
Exhibit B-1 - Notice of Borrowing
Exhibit B-2 - Notice of Issuance
Exhibit C - Assignment and Acceptance
Exhibit D - Guaranty
Exhibit E - Security Agreement
Exhibit F - Flagstar Intercompany Note
Exhibit G - Borrower Intercompany Note
Exhibit H - Subsidiary Working Capital Note
Exhibit I - Trademark Security Agreement
Exhibit J - Subordination Agreement
Exhibit K - Form of Indenture for Subordinated Debentures
Exhibit L - FCI Intercompany Note
Exhibit M - Assignment Agreement
Exhibit N - Form of Letter of Credit Agreement (Citibank)
Exhibit O - Form of Letter of Credit Agreement (Bank of
Nova Scotia)
Exhibit 10.2
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of April
10, 1996 (this "Agreement") among TWS FUNDING, INC., a Delaware corporation
("Funding"), as Borrower (the "Borrower"), FLAGSTAR CORPORATION, a Delaware
corporation ("Flagstar"), the banks (the "Banks") listed on the signature pages
hereof as the Second Restatement Lenders (the "Second Restatement Lenders"), the
Issuing Banks and the Swing Line Bank (as hereinafter defined), BANKERS TRUST
COMPANY ("BT Co."), CHEMICAL BANK ("Chemical") and CITIBANK, N.A., as
co-administrative agents (the "Co- Administrative Agents"), and CITIBANK, N.A.
("Citibank"), as funding agent (together with any successor appointed pursuant
to Article VII, the "Funding Agent") for the Lender Parties hereunder.
PRELIMINARY STATEMENTS:
1. Funding, a wholly-owned subsidiary of Flagstar, and
Flagstar are borrowers under an Amended and Restated Credit Agreement dated as
of October 26, 1992, as amended (the "Existing Credit Agreement"), with the
Lenders named therein (the "Existing Lenders"), The Bank of Nova Scotia, Bankers
Trust Company, The Chase Manhattan Bank, N.A., Chemical Bank, The Long-Term
Credit Bank of Japan, Limited--New York Branch and NationsBank of North
Carolina, N.A., as Co-Agents, and Citibank, as Managing Agent.
2. The Borrower has requested that the Second Restatement
Lenders enter into this Agreement to amend and restate the Existing Credit
Agreement to provide continuing financing to the Borrower for working capital
needs and for general corporate purposes for the Borrower and certain of its
Affiliates. The Second Restatement Lenders have indicated their willingness to
amend and restate the Existing Credit Agreement and to provide such continuing
financing on the terms and conditions of this Agreement.
3. Simultaneously with the execution hereof the Existing
Lenders that are not Second Restatement Lenders have entered into an Assignment
and Agreement in the form of Exhibit M attached hereto dated as of the date
hereof (the "Assignment Agreement"), with the Second Restatement Lenders
hereunder pursuant to which such Existing Lenders have agreed to sell and assign
to the Second Restatement Lenders, and the Second Restatement Lenders have
agreed to purchase and assume, as of the Closing Date, all of such Existing
Lenders' rights and obligations under the Existing Credit Agreement on the terms
set forth in the Assignment Agreement. After giving effect to such sale and
assignment as of the Closing Date, the Commitments of and the amount of Advances
owing to each of the Second Restatement Lenders will be as set forth on Schedule
2.01.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements contained herein, the parties hereto hereby
agree that, subject to the
satisfaction of the conditions set forth in Section 3.01, the Existing Credit
Agreement is amended and restated in its entirety to read as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings (such meanings
to be equally applicable to both the singular and plural forms of the terms
defined):
"Advance" means a Working Capital Advance or a Swing Line
Advance or a Letter of Credit Advance.
"Affiliate" means, as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common
control with such Person or is a director or officer of such Person.
For purposes of this definition, the term "control" (including the
terms "controlling," "controlled by" and "under common control with")
of a Person means the possession, direct or indirect, of the power (i)
to direct or cause the direction of the management and policies of such
Person, whether through the ownership of Voting Stock, by contract or
otherwise, or (ii) to vote 5% or more of the securities having ordinary
voting power for the election of directors of such Person.
"Agents" means the Funding Agent and the Co-Administrative
Agents.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a Base
Rate Advance and such Lender's Eurodollar Lending Office in the case of
a Eurodollar Rate Advance.
"Applicable Margin" means, as of any date, a percentage per
annum determined by reference to the Performance Level applicable on
such date as set forth below:
Applicable
Applicable Margin Applicable Margin Margin for
Performance for Base Rate for Eurodollar Rate Letter of Credit
Level Loans Loans Fees
==================== =========================== =========================== =======================
I 0.75% 2.00% 2.00%
II 1.00% 2.25% 2.25%
III 1.25% 2.50% 2.50%
IV 1.50% 2.75% 2.75%
==================== =========================== =========================== =======================
provided that, until April 10, 1997, the Applicable Margin shall be as
set forth opposite Performance Level IV.
"Appropriate Lender" means, at any time with respect to (a)
the Working Capital Facility, a Lender that has a Commitment for a
portion of such Facility at such time, (b) the Letter of Credit
Facility, (i) any Issuing Bank and (ii) if the other Lenders have made
Letter of Credit Advances pursuant to Section 2.13(c) that are
outstanding at such time, each other Lender and (c) the Swing Line
Facility, (i) the Swing Line Bank and (ii) if the other Lenders have
made Swing Line Advances pursuant to Section 2.02(b) that are
outstanding at such time, each other Lender.
"Assignment Agreement" has the meaning specified in the
Preliminary Statements.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender Party and an Eligible Assignee, and accepted
by the Funding Agent, in accordance with Section 8.07 and in
substantially the form of Exhibit C hereto.
"Available Amount" of any Letter of Credit means the maximum
amount available to be drawn under such Letter of Credit (assuming
compliance with all conditions to drawing).
"Bank Hedge Agreement" means any Hedge Agreement required or
permitted under Article V that is entered into by and between any Loan
Party and any Lender Party.
"Base Rate" means a fluctuating interest rate per annum in
effect from time to time, which rate per annum shall at all times be
equal to the highest of:
(a) the arithmetic average of the rate of interest
announced publicly by each Reference Bank in New York, New
York, from time to time, as its respective "base" or "prime"
rate;
4
(b) the sum (adjusted to the nearest 1/4 of 1% or, if
there is no nearest 1/4 of 1%, to the next higher 1/4 of 1%)
of (i) 1/2 of 1% per annum, plus (ii) the rate obtained by
dividing (A) the arithmetic average of the latest three-week
moving average of secondary market morning offering rates in
the United States for three-month certificates of deposit of
major United States money market banks, such three-week moving
average (adjusted to the basis of a year of 360 days) being
determined weekly on each Monday (or, if such day is not a
Business Day, on the next succeeding Business Day) for the
three-week period ending on the previous Friday by each
Reference Bank on the basis of such rates reported by
certificate of deposit dealers to and published by the Federal
Reserve Bank of New York or, if such publication shall be
suspended or terminated, on the basis of the arithmetic
average of quotations for such rates received by each
Reference Bank from three New York certificate of deposit
dealers of recognized standing selected by such Reference
Bank, by (B) the arithmetic average of a percentage equal to
100% minus the average of the daily percentages specified
during such three-week period by the Board of Governors of the
Federal Reserve System (or any successor) for determining the
maximum reserve requirement (including, but not limited to,
any emergency, supplemental or other marginal reserve
requirement) for each Reference Bank with respect to
liabilities consisting of or including (among other
liabilities) three-month U.S. dollar non-personal time
deposits in the United States, plus (iii) the arithmetic
average of the average during such three-week period of the
annual assessment rates estimated by each Reference Bank for
determining the then current annual assessment payable by each
Reference Bank to the Federal Deposit Insurance Corporation
(or any successor) for insuring U.S. dollar deposits of each
Reference Bank in the United States; and
(c) 1/2 of 1% per annum above the Federal Funds Rate.
"Base Rate Advance" means an Advance that bears interest as
provided in Section 2.06(a)(i).
"Borrower" has the meaning specified in the recital of parties
to this Agreement.
"Borrowing" means a Working Capital Borrowing or a Swing Line
Borrowing.
"Borrower Cash Collateral Account" has the meaning specified
in the Security Agreement.
"Borrower Intercompany Notes" means intercompany notes made by
the Borrower in favor of Designated Operating Subsidiaries that
maintain Restricted Accounts (as defined in the Security Agreement), in
substantially the form of Exhibit G.
5
"Borrower's Account" means the account of the Borrower
maintained by the Borrower with Citibank at its office at 399 Park
Avenue, New York, New York 10043, Account No. 4052-9101
"BT Co." has the meaning specified in the recital of parties
to this Agreement.
"Business Day" means a day of the year on which banks are not
required or authorized to close in New York City and, if the applicable
Business Day relates to any Eurodollar Rate Advances, on which dealings
are carried on in the London interbank market.
"Capex Financing" means, with respect to any Capital
Expenditure, the incurrence by a Restricted Subsidiary of Flagstar
(other than the Borrower) of any Debt secured (whether such security is
limited to principal or otherwise) by a mortgage or other Lien,
including any Lien under a Capitalized Lease, on the asset that is the
subject of such Capital Expenditure, to the extent that the Net Cash
Proceeds of such Debt do not exceed the amount of such Capital
Expenditure.
"Capital Asset" means any equipment, fixed asset, real
property or improvement thereon that has a useful life of more than one
year.
"Capital Expenditures" means, for any period, without
duplication, the sum of all expenditures during such period that have
been or should be, in accordance with GAAP, be recorded as capital
expenditures during such period, including, without limitation, (a) all
expenditures during such period for Capital Assets or for replacements
or substitutions therefor or additions thereto, plus (b) the aggregate
principal amount of all Debt (including the principal component of
obligations under Capitalized Leases) assumed or incurred during such
period in connection with any such expenditures made at any time. For
purposes of this definition, the amount of any Capital Expenditure that
is made substantially simultaneously with the trade-in or sale of an
existing Capital Asset or with casualty insurance or condemnation
proceeds payable as a result of loss of or damage to an existing
Capital Asset shall be deemed to be the gross amount of such Capital
Expenditure less, without duplication, the credit granted by the seller
of the Capital Asset that is the subject of such Capital Expenditure
for the Capital Asset being traded in at such time, the cash amount
paid by a third-party purchaser at such time for the Capital Asset
being sold at such time and the amount of such casualty insurance or
condemnation proceeds, as the case may be.
"Capitalized Leases" has the meaning specified in clause (e)
of the definition of Debt.
"Cash Capital Expenditures" means, for any period, without
duplication, Capital Expenditures of Flagstar and its Restricted
Subsidiaries for such period, less (without duplication) (i) the Net
Cash Proceeds of all Capex Financings during such period and (ii) the
aggregate amount of the principal component of all obligations of
Flagstar and its Restricted Subsidiaries in respect of Capitalized
Leases entered into during such period.
"Cash Equivalents" means any of the following, to the extent
owned by Flagstar free and clear of all Liens (other than any Lien
pursuant to the Collateral Documents) and having a maturity of not
greater than 180 days from the date of acquisition thereof: (a) readily
marketable direct obligations of the Government of the United States or
any agency or instrumentality thereof or obligations unconditionally
guaranteed by the full faith and credit of the Government of the United
States, (b) insured certificates of deposit of or insured or uninsured
demand or time deposits with any commercial bank that is a Lender or a
member of the Federal Reserve System, is organized under the laws of
the United States or any State thereof and has combined capital and
surplus of at least $500,000,000 or (c) commercial paper in an
aggregate principal amount of no more than $20,000,000 per issuer
outstanding at any time, issued by any corporation organized under the
laws of any State of the United States, rated at least "Prime-1" (or
the then equivalent grade) by Moody's Investors Services, Inc. or "A-1"
(or the then equivalent grade) by Standard & Poor's Ratings Group.
"Cash Interest Expense" means, for any Rolling Period, without
duplication, interest expense net of interest income, whether paid or
accrued during such Rolling Period (including the interest component of
Capitalized Lease obligations) on all Debt, including, without
limitation, (a) interest expense in respect of Debt resulting from the
Advances (to the extent included in Total Debt), the Senior Notes and
the Subordinated Debt, (b) commissions and other fees and charges
payable in connection with letters of credit, (c) the net payment, if
any, payable in connection with all interest rate protection contracts
and (d) interest capitalized during construction but excluding, in each
case, interest not paid in cash (including amortization of discount and
deferred debt expenses), all as determined in accordance with GAAP.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended from time to time.
"CERCLIS" means the Comprehensive Environmental Response,
Compensation and Liability Information System maintained by the U.S.
Environmental Protection Agency.
"Chemical" has the meaning specified in the recital of parties
to this Agreement.
"Citibank" has the meaning specified in the recital of parties
to this Agreement.
"Closing Date" has the meaning specified in Section 3.01.
"Co-Administrative Agents" has the meaning specified in the
recital of parties to this Agreement.
"Collateral" means all "Collateral" referred to in the
Collateral Documents and all other property that is or is intended to
be subject to any Lien in favor of the Funding Agent for the benefit of
the Secured Parties.
"Collateral Documents" means the Security Agreement and the
Trademark Security Agreement and any other document that creates or
purports to create a Lien in favor of the Funding Agent for the benefit
of the Secured Parties.
"Commitment" means a Working Capital Commitment or a Letter of
Credit Commitment.
"Confidential Information" means information that Flagstar or
any of its Subsidiaries furnishes to the Funding Agent or any Lender
Party pursuant to Section 5.03 or in any other writing designated as
confidential, but does not include any such information that is or
becomes generally available to the public other than as a result of a
breach by the Funding Agent or any Lender Party of its obligations
hereunder or that is or becomes available to the Funding Agent or such
Lender Party from a source other than Flagstar or any of its
Subsidiaries.
"Consolidated" refers to the consolidation of accounts in
accordance with GAAP.
"Conversion", "Convert" and "Converted" each refers to a
conversion of Advances of one Type into Advances of the other Type
pursuant to Section 2.08 or 2.09.
"Debt" of any Person means, without duplication, the
following:
(a) all indebtedness of such Person for
borrowed money;
(b) all Obligations of such Person for the deferred
purchase price of property or services (other than trade
payables not overdue by more than 60 days incurred in the
ordinary course of such Person's business); provided that for
purposes of Section 6.01(f), trade payables incurred in the
ordinary course of business that are overdue by more than 60
days shall constitute Debt only when outstanding in an
aggregate amount of $2,000,000 or more;
(c) all Obligations of such Person evidenced by
notes, bonds, debentures or other similar instruments;
(d) all Obligations created or arising under any
conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the
rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession
or sale of such property);
(e) all Obligations of such Person as lessee under
leases that have been or should be, in accordance with GAAP,
recorded as capital leases ("Capitalized Leases");
(f) all Obligations, contingent or otherwise, of such
Person under acceptance, letter of credit or similar
facilities;
(g) all Obligations of such Person to purchase,
redeem, retire, defease or otherwise make any payment in
respect of any capital stock of or other ownership or profit
interest in such Person or any of its Affiliates or any
warrants, rights or options to acquire such capital stock,
valued, in the case of Redeemable Preferred Stock, at the
greater of its voluntary or involuntary liquidation preference
plus accrued and unpaid dividends;
(h) all Obligations of such Person in respect of
Hedge Agreements;
(i) all Debt of others of the kinds referred to in
clauses (a) through (h) above guaranteed directly or
indirectly in any manner by such Person, or in effect
guaranteed directly or indirectly by such Person through an
agreement (i) to pay or purchase such Debt or to advance or
supply funds for the payment or purchase of such Debt, (ii) to
purchase, sell or lease (as lessee or lessor) property, or to
purchase or sell services, primarily for the purpose of
enabling the debtor to make payment of such Debt or to assure
the holder of such Debt against loss, (iii) to supply funds to
or in any other manner invest in the debtor (including any
agreement to pay for property or services irrespective of
whether such property is received or such services are
rendered) or (iv) otherwise to assure a creditor against loss;
and
(j) all Debt of the kinds referred to in clauses (a)
through (h) above secured by (or for which the holder of such
Debt has an existing right, contingent or otherwise, to be
secured by) any Lien on property (including, without
limitation, accounts and contract rights) owned by such
Person, even though such Person has not assumed or become
liable for the payment of such Debt; provided that, where such
Person has not assumed or become liable for the payment of
such Debt, the principal amount thereof outstanding at any
time shall be deemed to be the lower of (i) the then
outstanding principal amount of such Debt and (ii) the Fair
Market Value at such time of all property so encumbered or
subject to encumbrance.
"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be
given or time elapse or both.
"Defaulted Advance" means, with respect to any Lender Party at
any time, the amount of any Advance required to be made by such Lender
Party to the Borrower pursuant to Section 2.01, 2.02 or 2.13 at or
prior to such time that has not been made by such Lender Party or by
the Funding Agent for the account of such Lender Party pursuant to
Section 2.02(e) as of such time. In the event that a portion of a
Defaulted Advance shall be deemed made pursuant to Section 2.15(a), the
remaining portion of such Defaulted Advances shall be considered a
Defaulted Advance originally required to be made pursuant to Section
2.01 on the same date as the Defaulted Advance so deemed made in part.
"Defaulted Amount" means, with respect to any Lender Party at
any time, any amount required to be paid by such Lender Party to the
Funding Agent or any other Lender Party hereunder or under any other
Loan Document at or prior to such time that has not been so paid as of
such time, including, without limitation, any amount required to be
paid by such Lender Party to (a) the Swing Line Bank pursuant to
Section 2.02(b) to purchase a portion of a Swing Line Advance made by
the Swing Line Bank, (b) any Issuing Bank pursuant to Section 2.13 to
purchase a portion of a
Letter of Credit Advance made by such Issuing Bank, (c) the Funding
Agent pursuant to Section 2.02(e) to reimburse the Funding Agent for
the amount of any Advance made by the Funding Agent for the account of
such Lender Party, (d) any other Lender Party pursuant to Section 2.12
to purchase any participation in Advances owing to such other Lender
Party and (e) any Agent or Issuing Bank pursuant to Section 7.05 to
reimburse such Agent or Issuing Bank for such Lender Party's ratable
share of any amount required to be paid by the Lender Parties to such
Agent or Issuing Bank as provided therein. In the event that a portion
of a Defaulted Amount shall be deemed paid pursuant to Section 2.15(b),
the remaining portion of such Defaulted Amount shall be considered a
Defaulted Amount originally required to be made hereunder or under any
other Loan Document on the same date as the Defaulted Amount so deemed
paid in part.
"Defaulting Lender" means, at any time, any Lender Party that,
at such time, (a) owes a Defaulted Advance or Defaulted Amount or (b)
shall take or be the subject of any action or proceeding of a type
described in Section 6.01(g).
"Denny's" means Denny's, Inc., a California corporation and an
indirect, wholly owned Subsidiary of Flagstar.
"Denny's Indenture" means the Indenture dated as of July 12,
1990 between Denny's Realty and State Street Bank and Trust Company, as
Trustee.
"Denny's Lease" means the Amended and Restated Lease dated as
of July 12, 1990 between Denny's Realty, as landlord, and Denny's, as
tenant.
"Denny's Realty" means Denny's Realty, Inc., a Delaware
corporation and a direct, wholly owned Subsidiary of Denny's.
"Denny's Trustee" means the Trustee, as defined in the Denny's
Indenture.
"Designated Operating Subsidiary" means each of the following
Restricted Subsidiaries of Flagstar: Denny's, Enterprises, Quincy's, El
Pollo Loco, Inc., Portiontrol Foods, Inc. and Flagstar Systems, Inc.,
and each other Restricted Subsidiary of Flagstar (a) that is designated
as a Designated Operating Subsidiary by notice to the Funding Agent and
the Lender Parties from time to time after the Closing Date, (b) that
has executed and delivered to the Borrower a Subsidiary Working Capital
Note that the Borrower has pledged and delivered to the Funding Agent
under the Security Agreement and (c) to which (if such Designated
Operating Subsidiary maintains a Restricted Account, as defined in the
Security Agreement) the Borrower has executed and delivered a Borrower
Intercompany Note that such Designated Operating Subsidiary has pledged
and delivered to the Funding Agent
under the Security Agreement; provided that any Designated Operating
Subsidiary shall cease to be a Designated Operating Subsidiary upon
notice thereof given by Flagstar to the Funding Agent and the Lender
Parties from time to time; and provided further that there shall be not
more than eight Designated Operating Subsidiaries at any time.
"Disclosed Litigation" means the litigation listed on Schedule
4.01(i).
"Domestic Lending Office" means, with respect to any Lender
Party, the office of such Lender Party specified as its "Domestic
Lending Office" opposite its name on Schedule 2.01 hereto or in the
Assignment and Acceptance pursuant to which it became a Lender Party,
or such other office of such Lender Party as such Lender Party may from
time to time specify to the Borrower and the Funding Agent.
"EBITDA" of any Person means, for any period, on a
Consolidated basis, net income (or net loss) plus the sum of (a)
interest expense net of interest income, (b) income tax expense, (c)
depreciation expense, (d) amortization expense and (e) extraordinary or
unusual losses included in net income (net of taxes to the extent not
already deducted in determining such losses), less extraordinary or
unusual gains included in net income (net of taxes to the extent not
already deducted in determining such gains), in each case determined in
accordance with GAAP.
"Eligible Assignee" means (a) with respect to the Working
Capital Facility, (i) a Lender, (ii) an Affiliate of a Lender, (iii) a
commercial bank organized under the laws of the United States, or any
State thereof, and having total assets in excess of $3,000,000,000,
(iv) a savings and loan association or savings bank organized under the
laws of the United States, or any State thereof, and having a net worth
determined in accordance with GAAP in excess of $250,000,000, (v) a
commercial bank organized under the laws of any other country that is a
member of the OECD or has concluded special lending arrangements with
the International Monetary Fund associated with its General
Arrangements to Borrow, or a political subdivision of any such country,
and having total assets in excess of $3,000,000,000, so long as such
bank is acting through a branch or agency located in the United States,
in the Cayman Islands or in the country in which it is organized or
another country that is described in this clause (v), (vi) the central
bank of any country that is a member of the OECD, (vii) a finance
company, insurance company or other financial institution or fund
(whether a corporation, partnership, trust or other entity) that (A) is
not Affiliated with Flagstar, (B) is engaged in making, purchasing or
otherwise investing in commercial loans in the ordinary course of its
business and (C) has total assets in excess of $250,000,000, and (viii)
any other Person approved by the Co-Administrative Agents and Flagstar,
such approval not to be unreasonably withheld or delayed and (b) with
respect to the Letter of Credit Facility, a Person that
is an Eligible Assignee under subclause (iii) or (v) of clause (a) of
this definition and is approved by the Co-Administrative Agents and
Flagstar, such approval not to be unreasonably withheld or delayed;
provided, however, that neither any Loan Party nor any Affiliate of a
Loan Party shall qualify as an Eligible Assignee under this definition.
"Enterprises" means Flagstar Enterprises, Inc., an Alabama
corporation and a direct, wholly owned Subsidiary of Spartan.
"Environmental Action" means any action, suit, demand, demand
letter, claim, notice of non-compliance or violation, written notice of
liability or potential liability, investigation, proceeding, consent
order or consent agreement relating in any way to any Environmental
Law, any Environmental Permit or Hazardous Material or arising from
alleged injury or threat to health, safety or the environment,
including, without limitation, (a) any written claim by any
governmental or regulatory authority for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any
Environmental Law and (b) any written claim by any governmental or
regulatory authority or any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief
resulting from Hazardous Materials or arising from alleged injury or
threat of injury to health, safety or the environment.
"Environmental Law" means any federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, writ, judgment,
injunction, decree or written judicial or agency interpretation, policy
or guidance relating to pollution or protection of the environment,
health, safety or natural resources, including, without limitation,
those relating to the use, handling, transportation, treatment,
storage, disposal, release or discharge of Hazardous Materials.
"Environmental Permit" means any permit, approval,
identification number, license or other authorization required under
any Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"ERISA Affiliate" means any Person that for purposes of Title
IV of ERISA is a member of the controlled group of any Loan Party, or
under common control with any Loan Party, within the meaning of Section
414 of the Internal Revenue Code.
"ERISA Event" means (a) (i) the occurrence of a reportable
event, within the meaning of Section 4043 of ERISA, with respect to any
Plan unless the 30-day notice
requirement with respect to such event has been waived by the PBGC, or
(ii) the requirements of subsection (1) of Section 4043(b) of ERISA
(without regard to subsection (2) of such Section) are met with respect
to a contributing sponsor, as defined in Section 4001(a)(13) of ERISA,
of a Plan, and an event described in paragraph (9), (10), (11), (12) or
(13) of Section 4043(c) of ERISA is reasonably expected to occur with
respect to such Plan within the following 30 days; (b) the application
for a minimum funding waiver with respect to a Plan; (c) the provision
by the administrator of any Plan of a notice of intent to terminate
such Plan, pursuant to Section 4041(a)(2) of ERISA (including any such
notice with respect to a plan amendment referred to in Section 4041(e)
of ERISA); (d) the cessation of operations at a facility of any Loan
Party or any ERISA Affiliate in the circumstances described in Section
4062(e) of ERISA; (e) the withdrawal by any Loan Party or any ERISA
Affiliate from a Multiple Employer Plan during a plan year for which it
was a substantial employer, as defined in Section 4001(a)(2) of ERISA;
(f) the conditions for imposition of a lien under Section 302(f) of
ERISA shall have been met with respect to any Plan; (g) the adoption of
an amendment to a Plan requiring the provision of security to such Plan
pursuant to Section 307 of ERISA; or (h) the institution by the PBGC of
proceedings to terminate a Plan pursuant to Section 4042 of ERISA, or
the occurrence of any event or condition described in Section 4042 of
ERISA that constitutes grounds for the termination of, or the
appointment of a trustee to administer, such Plan.
"Eurocurrency Liabilities" has the meaning specified in
Regulation D of the Board of Governors of the Federal Reserve System,
as in effect from time to time.
"Eurodollar Lending Office" means, with respect to any Lender
Party, the office of such Lender Party specified as its "Eurodollar
Lending Office" opposite its name on Schedule 2.01 hereto or in the
Assignment and Acceptance pursuant to which it became a Lender Party
(or, if no such office is specified, its Domestic Lending Office), or
such other office of such Lender Party as such Lender Party may from
time to time specify to the Borrower and the Funding Agent.
"Eurodollar Rate" means, for any Interest Period for each
Eurodollar Rate Advance comprising part of the same Borrowing, an
interest rate per annum equal to the rate per annum obtained by
dividing (a) the average (rounded upward to the nearest whole multiple
of 1/16 of 1% per annum) of the rate per annum at which deposits in
U.S. dollars are offered by the principal office of each of the
Reference Banks in London, England to prime banks in the London
interbank market at 11:00 A.M. (London time) two Business Days before
the first day of such Interest Period in an amount approximately equal
to such Reference Bank's Eurodollar Rate Advance comprising part of
such Borrowing to be outstanding during such Interest Period and for a
period equal to such Interest Period by (b) a percentage equal to
100% minus the Eurodollar Rate Reserve Percentage for such Interest
Period. The Eurodollar Rate for each Interest Period for each
Eurodollar Rate Advance comprising part of the same Borrowing shall be
determined by the Funding Agent on the basis of applicable rates
furnished to and received by the Funding Agent from the Reference Banks
two Business Days before the first day of such Interest Period,
subject, however, to the provisions of Section 2.06.
"Eurodollar Rate Advance" means an Advance that bears interest
as provided in Section 2.06(a)(ii).
"Eurodollar Rate Reserve Percentage" for any Interest Period
for each Eurodollar Rate Advance comprising part of the same Borrowing
means the reserve percentage applicable two Business Days before the
first day of such Interest Period under regulations issued from time to
time by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement (including,
without limitation, any emergency, supplemental or other marginal
reserve requirement) for a member bank of the Federal Reserve System in
New York City with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities (or with respect to any other
category of liabilities that includes deposits by reference to which
the interest rate on Eurodollar Rate Advances is determined) having a
term equal to such Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
"Existing Credit Agreement" has the meaning specified in the
Preliminary Statements.
"Existing Debt" means all Debt of Flagstar and its Restricted
Subsidiaries existing on the date hereof.
"Existing Lenders" has the meaning specified in the
Preliminary Statements.
"Existing Subordinated Debt" means, collectively, the Debt
designated as such and listed on Schedule 4.01(bb).
"Facility" means the Working Capital Facility, the Swing Line
Facility or the Letter of Credit Facility.
"Fair Market Value" means, with respect to any asset, the
value of the consideration obtainable in a sale of such asset in the
open market at a specific date assuming a sale by a willing seller to a
willing purchaser dealing at arm's length and arranged in an orderly
manner over a reasonable period of time having regard to the
nature and characteristics of such asset, which value shall, for any
asset with a Fair Market Value in excess of $5,000,000, be either (a)
the value of such asset as determined in good faith by the Board of
Directors of Flagstar or (b) if such asset shall have been the subject
of an appraisal done reasonably contemporaneously by an independent
third party appraiser and the basic assumptions underlying such
appraisal are reasonable, the value of such asset as stated in such
appraisal.
"FCI" means Flagstar Companies, Inc., a Delaware corporation.
"FCI Common Stock" means the common stock, $.10 par value per
share, of FCI.
"FCI Intercompany Note" means the $150,000,000 subordinated
promissory note dated as of July 28, 1992 made by Flagstar in favor of
FCI, as amended and restated to be in substantially the form of Exhibit
L.
"FCI Stock Documents" means the Stockholders' Agreement and
the Richardson Shareholder Agreement between Jerome J. Richardson and
FCI entered into as of August 11, 1992.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the
weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day for such
transactions received by the Funding Agent from three Federal funds
brokers of recognized standing selected by it.
"First-Tier Subsidiaries" means Funding and each Significant
Subsidiary.
"Flagstar" has the meaning specified in the recital of parties
to this Agreement.
"Flagstar Common Stock" means the common stock, $.01 par value
per share, of Flagstar.
"Flagstar Intercompany Note" means a promissory note made by
Flagstar in favor of the Borrower in substantially the form of Exhibit
F.
"Funded Debt" means the principal amount of Debt in respect of
the Advances and the principal amount of all Debt that should, in
accordance with GAAP, be
recorded as liabilities on a balance sheet and matures more than one
year from the date of creation or matures within one year from such
date but is renewable or extendible, at the option of the debtor, to a
date more than one year from such date or arises under a revolving
credit or similar agreement that obligates the lender or lenders to
extend credit during a period of more than one year from such date,
including, without limitation, all amounts of Funded Debt required to
be paid or prepaid within one year from the date of determination.
"Funding Agent" has the meaning specified in the recital of
parties to this Agreement.
"Funding Agent's Account" means the account of the Funding
Agent maintained by the Funding Agent with Citibank at its office at
399 Park Avenue, New York, New York 10043, Account No. 3885-8061,
Attention: Jeroen Fikke.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect as of the date of, and used in,
the preparation of the audited consolidated financial statements
referred to in Section 4.01(f), except that, for purposes of Section
5.01(f) and the preparation of any financial statement required to be
furnished pursuant to any of Sections 5.03(b) through (f), "GAAP" shall
mean such principles in the United States of America as in effect from
time to time.
"GTO" means either Gollust, Tierney and Oliver, a New Jersey
general partnership, or Gollust, Tierney and Oliver Incorporated, a New
York corporation.
"Guarantors" has the meaning specified in Section 3.01(h)(ii).
"Guaranty" has the meaning specified in Section 3.01(h)(ii).
"Hazardous Materials" means (a) petroleum or petroleum
products, by-products or breakdown products, radioactive materials,
asbestos containing materials, polychlorinated biphenyls and radon gas
and (b) any other chemicals, materials or substances designated,
classified or regulated as hazardous or toxic or as a pollutant or
contaminant under any Environmental Law.
"Hedge Agreements" means (i) currency swap agreements,
currency future or option contracts and other similar agreements
designed to hedge against fluctuations in foreign interest rates, and
(ii) interest rate swap, cap or collar agreements and interest rate
future or option contracts, including, without limitation, any such
agreement to which Flagstar is a party, whether as fixed rate payor or
floating rate payor.
"Indemnified Party" has the meaning specified in Section
8.04(b).
"Insufficiency" means, with respect to any Plan, the amount,
if any, of its unfunded benefit liabilities, as defined in Section
4001(a)(18) of ERISA.
"Interest Coverage Ratio" means the ratio, determined on the
last day of each fiscal quarter for the Rolling Period then ended, of
(a) EBITDA of Flagstar and its Restricted Subsidiaries on a
Consolidated basis to (ii) Cash Interest Expense of Flagstar and its
Restricted Subsidiaries on a Consolidated basis.
"Interest Period" means, for each Eurodollar Rate Advance
comprising part of the same Borrowing, the period commencing on the
date of such Eurodollar Rate Advance or the date of the Conversion of
any Base Rate Advance into such Eurodollar Rate Advance, and ending on
the last day of the period selected by the Borrower pursuant to the
provisions below and, thereafter, each subsequent period commencing on
the last day of the immediately preceding Interest Period and ending on
the last day of the period selected by the Borrower pursuant to the
provisions below. The duration of each such Interest Period shall be
one, two, three or six months, as the Borrower may, upon notice
received by the Funding Agent not later than 11:00 A.M. (New York City
time) on the third Business Day prior to the first day of such Interest
Period, select; provided, however, that:
(a) subject to the limitations of Section 2.02(c),
the Borrower may, on any Business Day, divide any existing
Borrowing comprised of Eurodollar Rate Advances into two or
more new Borrowings consisting of Base Rate Advances,
Eurodollar Rate Advances, or both, each such new Borrowing
having a principal amount as designated by the Borrower and
all such new Borrowings collectively having an aggregate
principal amount equal to the principal amount of such
existing Borrowing, provided, however that, if the date of
such division is not the last day of the then existing
Interest Period therefor, the Borrower shall compensate the
Lenders therefor under Section 8.04(c);
(b) whenever the last day of any Interest Period
would otherwise occur on a day other than a Business Day, the
last day of such Interest Period shall be extended to occur on
the next succeeding Business Day, provided, however, that, if
such extension would cause the last day of such Interest
Period to occur in the next following calendar month, the last
day of such Interest Period shall occur on the next preceding
Business Day; and
(c) whenever the first day of any Interest Period
occurs on a day of an initial calendar month for which there
is no numerically corresponding day in the calendar month that
succeeds such initial calendar month by the number of months
equal to the number of months in such Interest Period, such
Interest Period shall end on the last Business Day of such
succeeding calendar month.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"Investment" in any Person means any loan or advance to such
Person, any purchase or other acquisition of any capital stock,
warrants, rights, options, obligations or other securities of such
Person, any capital contribution to such Person or any other investment
in such Person, including, without limitation, any arrangement pursuant
to which the investor incurs Debt of the types referred to in clauses
(i) and (j) of the definition of "Debt" in respect of such Person.
"Issuing Bank" means Citibank or The Bank of Nova Scotia, as
issuer of a Letter of Credit.
"KKR" means Kohlberg Kravis Roberts & Co.
"Lender Party" means any Lender, any Issuing Bank or the Swing
Line Bank.
"Lenders" means the Second Restatement Lenders listed on the
signature pages hereof and each Eligible Assignee that shall become a
party hereto pursuant to Section 8.07.
"L/C Related Documents" has the meaning specified in Section
2.13(e)(ii).
"Letter of Credit" has the meaning specified in Section
2.13(a).
"Letter of Credit Advance" means an advance made by any
Issuing Bank or any Lender pursuant to Section 2.13(c).
"Letter of Credit Agreement" has the meaning specified in
Section 2.13(b).
"Letter of Credit Commitment" has the meaning specified in
Section 2.13(a).
"Letter of Credit Facility" means, at any time, an amount
equal to the lesser of (a) the aggregate amount of the Issuing Banks'
Letter of Credit Commitments at such time and (b) $150,000,000, as such
amount may be reduced at or prior to such time pursuant to Section
2.04.
"Lien" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance
on title to real property.
"Liquor License Affiliate" means each of the corporations
designated on Schedule 4.01(b) as a Liquor License Affiliate and each
other Affiliate of Flagstar that may be organized from time to time and
the business of which will be limited to the holding of a liquor
license for any business maintained by Flagstar or one of its
Subsidiaries in any jurisdiction where Flagstar and its Subsidiaries
are prohibited from holding a liquor license or where the holding by
Flagstar or any such Subsidiary of a liquor license would, in the best
judgment of Flagstar, be impracticable.
"Loan Documents" means (a) for purposes of this Agreement and
the Notes and any amendment or modification thereof and for all other
purposes other than for purposes of the Guaranty and the Collateral
Documents, this Agreement, the Notes, the Guaranty, the Subordination
Agreement, the Subsidiary Working Capital Notes, the Borrower
Intercompany Notes, the Flagstar Intercompany Note, each Letter of
Credit Agreement and the Collateral Documents, and (b) for purposes of
the Guaranty and the Collateral Documents, all of the foregoing and the
Bank Hedge Agreements.
"Loan Parties" means Flagstar, the Borrower, each Significant
Subsidiary, each Designated Operating Subsidiary and each Subsidiary
Pledgor, other than Canteen Holdings, Inc.
"Margin Stock" has the meaning specified in Regulation U.
"Material Adverse Change" means any material adverse change in
the business, condition (financial or otherwise), operations,
performance, properties or prospects of any Significant Subsidiary
Group or of Flagstar and its Restricted Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on
(a) the business, condition (financial or otherwise), operations,
performance, properties or prospects of any Significant Subsidiary
Group or of Flagstar and its Restricted Subsidiaries taken as a whole,
(b) the rights and remedies of the Funding Agent or any Lender Party
under any Loan Document or Related Document or (c) the ability of any
Loan Party to perform its Obligations under any Loan Document or
Related Document to which it is or is to be a party.
"Multiemployer Plan" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which any Loan Party or any ERISA
Affiliate is making or accruing an obligation to make contributions, or
has within any of the preceding five plan years made or accrued an
obligation to make contributions.
"Multiple Employer Plan" means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of any Loan Party or any ERISA Affiliate and at least one
Person other than the Loan Parties and the ERISA Affiliates or (b) was
so maintained and in respect of which any Loan Party or any ERISA
Affiliate could have liability under Section 4064 or 4069 of ERISA in
the event such plan has been or were to be terminated.
"Net Cash Proceeds" means, with respect to any sale, lease,
transfer or other disposition of any asset or the sale or issuance of
any Debt by any Person, the aggregate amount of cash received from time
to time by or on behalf of such Person in connection with such
transaction after deducting therefrom only (a) reasonable and customary
brokerage commissions, underwriting fees and discounts, legal fees,
finder's fees and other similar fees and commissions, (b) the amount of
taxes and other governmental fees and charges, if any, payable in
connection with or as a result of such transaction, (c) the amount of
any Debt secured by a Lien on such asset that, by the terms of such
transaction, is required to be repaid upon such disposition, in each
case to the extent, but only to the extent, that the amounts so
deducted are, at the time of receipt of such cash, properly
attributable to such transaction or to the asset that is the subject
thereof and are actually paid by such Person to a Person that is not an
Affiliate and (d) in the case of asset dispositions only, an amount of
such proceeds equal to the amount of liabilities associated with such
asset (including, without limitation, accrued tax liabilities) incurred
or retained by the Person disposing of such asset as part of such
transaction to the extent, and for the period, such liabilities are
reserved against in accordance with GAAP or actually paid by such
Person to a Person that is not an Affiliate; provided that such
proceeds shall be deemed received by such Person as and when such
reserves are no longer maintained and such liabilities are not actually
so paid by such Person.
"Newco" means FRD Acquisition Co., a wholly-owned Subsidiary
of Flagstar, formed as a vehicle for the acquisition of the Family
Restaurant Division of Family Restaurants, Inc. (Coco's and Carrows).
"Note" means a promissory note of the Borrower payable to the
order of any Lender, in substantially the form of Exhibit A hereto,
evidencing the aggregate indebtedness of the Borrower to such Lender
resulting from the Advances made by such Lender.
"Notice of Borrowing" has the meaning specified in Section
2.02(a).
"Notice of Issuance" has the meaning specified in Section
2.13(b).
"Notice of Swing Line Borrowing" has the meaning specified in
Section 2.02(b).
"NPL" means the National Priorities List under CERCLA.
"Obligation" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including,
without limitation, any liability of such Person on any claim, whether
or not the right of any creditor to payment in respect of such claim is
reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, disputed, undisputed, legal, equitable, secured or unsecured,
and whether or not such claim is discharged, stayed or otherwise
affected by any proceeding referred to in Section 6.01(g). Without
limiting the generality of the foregoing, the Obligations of the Loan
Parties under the Loan Documents include (a) the obligation to pay
principal, interest, Letter of Credit commissions, charges, expenses,
fees, attorneys' fees and disbursements, indemnities and other amounts
payable by any Loan Party under any Loan Document and (b) the
obligation of any Loan Party to reimburse any amount in respect of any
of the foregoing that any Lender Party, in its sole discretion, may
elect to pay or advance on behalf of such Loan Party.
"OECD" means the Organization for Economic Cooperation and
Development.
"Open Year" has the meaning specified in Section 4.01(w).
"Other Taxes" has the meaning specified in Section 2.11(b).
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
"Performance Level" means, as of any date of determination,
the level set forth below as then applicable, as determined in
accordance with the following provisions of this definition:
I Interest Coverage Ratio is greater than or
equal to 2.50:1.00.
II Interest Coverage Ratio is less than
2.50:1.00 but greater than or equal to
2.00:1.00.
III Interest Coverage Ratio is less than
2.00:1.00 but greater than or equal to
1.50:1.00.
IV Interest Coverage Ratio is less than 1.50:1.00.
For purposes of this definition, the Performance Level shall be
determined as at the end of each of the first three fiscal quarters of
Flagstar and as at the end of the fiscal year of Flagstar, based on the
relevant financial statements delivered pursuant to Section 5.03;
changes in the Performance Level shall become effective on the date
such financial statements are delivered to the Lender Parties and shall
remain in effect until the next change to be effected pursuant to this
definition.
"Permitted Amendments" means (i) any amendment or supplement
to the Real Estate Refinancing Documents, Senior Note Documents or
Subordinated Debt Documents that does not require a waiver or consent
of the holders of the Debt evidenced thereby, other than an amendment
or supplement that either (a) adds, directly or indirectly, any new
provision commonly characterized as an affirmative, negative or
financial covenant or any new event of default, collateral requirement
or repayment requirement (including, without limitation, any put
requirement) that relates to any date prior to two years after the
Termination Date, (b) modifies in any manner adverse to the issuer or
guarantors thereof any existing provision commonly characterized as an
affirmative, negative or financial covenant or any existing event of
default, collateral requirement or repayment requirement (including any
shortening of any amortization requirement) that relates to any date
prior to two years after the Termination Date, (c) increases the
interest rate thereon or modifies in any manner adverse to the issuer
or guarantors thereof the time or manner of payment of such interest
(including any option or right to pay such interest in kind) or (d)
modifies any of the subordination provisions thereof or (ii) any other
amendment or supplement not permitted under clause (i) that in the
opinion of the Agents is not materially adverse to the interests of the
Lender Parties.
"Permitted Liens" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding
shall have been commenced: (a) Liens for taxes, assessments and
governmental charges or levies that are either (i) not yet due and
payable or (ii) being contested in good faith and by appropriate
proceedings and as to which appropriate reserves are being maintained;
(b) Liens imposed by law, such as materialmen's, mechanics', carriers',
workmen's and repairmen's Liens and other similar Liens arising in the
ordinary course of business securing obligations that are either (i)
not overdue for a period of more than 30 days or (ii) being contested
in good faith and by appropriate proceedings and as to which
appropriate reserves are being maintained; (c) pledges or deposits to
secure obligations under workers' compensation laws or similar
legislation or to secure public or statutory obligations; and (d)
easements, rights of way and other encumbrances on title to real
property that do not render title to the property encumbered thereby
unmarketable or materially adversely affect the use of such property
for its present purposes.
"Person" means an individual, partnership, corporation
(including a business trust), limited liability company, joint stock
company, trust, unincorporated association, joint venture or other
entity, or a government or any political subdivision or agency thereof.
"Plan" means a Single Employer Plan or a Multiple Employer
Plan.
"Preferred Stock" means, with respect to any corporation,
capital stock issued by such corporation that is entitled to a
preference or priority over any other capital stock issued by such
corporation upon any distribution of such corporation's assets, whether
by dividend or upon liquidation.
"Proficient Food Companies" means Proficient Food Company, TWS
200 Corp. and DFC Trucking Co.
"Pro Rata Share" of any amount means, with respect to any
Lender at any time, the product of such amount times a fraction the
numerator of which is the amount of such Lender's Working Capital
Commitment at such time and the denominator of which is the Working
Capital Facility at such time.
"Qualifying Subsidiary" has the meaning specified in Section
6.01(g).
"Quincy's" means Quincy's Restaurants, Inc., an Alabama
corporation and a direct, wholly owned Subsidiary of Spartan.
"Quincy's Lease" means the Amended and Restated Lease dated as
of November 1, 1990 between Quincy's Realty, as lessor, and Quincy's,
as lessee.
"Quincy's Realty" means Quincy's Realty, Inc., an Alabama
corporation and a direct, wholly owned Subsidiary of Quincy's.
"Real Estate Refinancing Documents" means, collectively, the
Denny's Indenture, the Real Estate Security Documents (as defined in
the Denny's Indenture), the Spartan Indenture, the Security Documents
(as defined in the Spartan Indenture), the Denny's Lease, the Quincy's
Lease and the Spardee's Lease.
"Real Estate Subsidiaries" means, collectively, Denny's
Realty, Quincy's Realty and Spardee's Realty.
"Real Estate Trustees" means, collectively, the Denny's
Trustee and the Spartan Trustee.
"Redeemable" means, with respect to any capital stock or other
ownership or profit interest, Debt or other right or Obligation, any
such right or Obligation that (a) the issuer has undertaken to redeem
at a fixed or determinable date or dates, whether by operation of a
sinking fund or otherwise, or upon the occurrence of a condition not
solely within the control of the issuer or (b) is redeemable at the
option of the holder.
"Reference Banks" means BT Co., Chemical and Citibank.
"Register" has the meaning specified in Section 8.07(d).
"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"Related Documents" means (i) the Subordinated Debt Documents,
(ii) the Senior Note Documents, (iii) the FCI Stock Documents, (iv) the
Tax Sharing Agreement and (v) the Richardson Loan Documents.
"Required Lenders" means at any time Lenders (other than
Affiliates of the Borrower and Lender Parties that are Defaulting
Lenders at such time) owed or holding in the aggregate at least a
majority in interest of the sum of (a) the aggregate principal amount
of the Advances then outstanding, (b) the aggregate Available Amount of
all Letters of Credit then outstanding and (c) the aggregate Unused
Working Capital Commitments at such time; provided that there shall be
excluded from the determination of Required Lenders at such time (i)
the aggregate principal amount of the Advances then outstanding made by
all Lender Parties that are Defaulting Lenders at such time, (ii) each
such Defaulting Lender's Pro Rata Share of the aggregate Available
Amount of all Letters of Credit then outstanding and (iii) the
aggregate Unused Working Capital Commitment of each such Defaulting
Lender at such time. For purposes of this definition, the aggregate
principal amount of Swing Line Advances owing to the Swing Line Bank
and of Letter of Credit Advances owing to any Issuing Bank and the
Available Amount of each Letter of Credit shall be considered to be
owed to the Lenders ratably in accordance with their Working Capital
Commitments.
"Responsible Officer" means any officer of any Loan Party or
any of its Subsidiaries.
"Restricted Subsidiaries" means all Subsidiaries of Flagstar
other than the Unrestricted Subsidiaries.
"Richardson Loan" means a loan in the principal amount of
$14,000,000 made to Jerome J. Richardson, evidenced by a recourse
promissory note (the "Richardson Promissory Note") from Jerome J.
Richardson to Flagstar and secured by collateral, including Jerome J.
Richardson's shares of FCI Common Stock, pursuant to a pledge agreement
(the "Richardson Pledge Agreement") entered into by Jerome J.
Richardson and Flagstar.
"Richardson Loan Documents" means the Richardson Promissory
Note and the Richardson Pledge Agreement.
"Rolling Period" means, for any fiscal quarter, such quarter
and the three preceding fiscal quarters.
"Second Restatement Lenders" has the meaning specified in the
recital of parties to this Agreement.
"Secured Obligations" has the meaning specified in the
Security Agreement.
"Secured Parties" means the Agents, the Lender Parties, the
Hedge Lenders (as defined in the Security Agreement) and the other
Persons the Obligations owing to which are or are purported to be
secured by the Collateral under the terms of the Collateral Documents.
"Security Agreement" has the meaning specified in Section
3.01(h)(iii).
"Senior Debt" outstanding on any date means the sum, without
duplication, of (a) Total Debt outstanding on such date less (b) the
aggregate principal amount of all Subordinated Debt outstanding on such
date.
"Senior Note Documents" means all agreements, indentures and
instruments pursuant to which Senior Notes are issued.
"Senior Notes" means the Senior Notes designated as such and
listed on Schedule 4.01(bb).
"Significant Subsidiary" means each of Denny's Holdings, Inc.,
Spartan and each other Restricted Subsidiary of Flagstar (other than
the Borrower) that is not a Subsidiary of another Subsidiary of
Flagstar, other than Canteen Holdings, Inc.
"Significant Subsidiary Group" means each of (i) Denny's
Holdings, Inc. and its Subsidiaries, taken as a whole, (ii) Spartan
Holdings, Inc. and its Subsidiaries, taken as a whole, and (iii) each
other Significant Subsidiary and its Subsidiaries, taken as a whole,
that at any time has (x) assets with a value of not less than 15% of
the total value of the assets of Flagstar and its Restricted
Subsidiaries taken as a whole or (y) Consolidated EBITDA of not less
than 15% of the Consolidated EBITDA of Flagstar and its Restricted
Subsidiaries taken as a whole for the most recent four fiscal quarters.
"Single Employer Plan" means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of any Loan Party or any ERISA Affiliate and no Person other
than the Loan Parties and the ERISA Affiliates or (b) was so maintained
and in respect of which any Loan Party or any ERISA Affiliate could
have liability under Section 4069 of ERISA in the event such plan has
been or were to be terminated.
"Solvent" and "Solvency" mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property
of such Person is greater than the total amount of liabilities,
including, without limitation, contingent liabilities, of such Person,
(b) the present fair salable value of the assets of such Person is not
less than the amount that will be required to pay the probable
liability of such Person on its debts as they become absolute and
matured, (c) such Person does not intend to, and does not believe that
it will, incur debts or liabilities beyond such Person's ability to pay
such debts and liabilities as they mature and (d) such Person is not
engaged in business or a transaction, and is not about to engage in
business or a transaction, for which such Person's property would
constitute an unreasonably small capital. The amount of contingent
liabilities at any time shall be computed as the amount that, in the
light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an
actual or matured liability.
"Spardee's Lease" means the Amended and Restated Lease dated
as of November 1, 1990 between Spardee's Realty, as lessor, and
Enterprises, as lessee.
"Spardee's Realty" means Spardee's Realty, Inc., an Alabama
corporation and a direct, wholly owned Subsidiary of Enterprises.
"Spartan" means Spartan Holdings, Inc., a New York corporation
and a direct, wholly owned Subsidiary of Flagstar.
"Spartan Indenture" means the Indenture dated as of November
1, 1990 between Secured Restaurants Trust, as Issuer, and The Bank of
New York Trust Company of Florida, as successor Trustee.
"Spartan Trustee" means the Trustee, as defined in the Spartan
Indenture.
"Standby Letter of Credit" means any letter of credit other
than a Trade Letter of Credit.
"Stockholder's Agreement" means a stockholder's agreement
dated as of August 11, 1992 among FCI, TW Associates, L.P. and certain
holders of FCI Common Stock, as amended from time to time.
"Subordinated Debt" means the Existing Subordinated Debt, Debt
of the kind referred to in Section 5.02(b)(i)(C) and any other Debt of
Flagstar that is subordinated to the Obligations of Flagstar under the
Loan Documents on, and that otherwise contains, terms and conditions
satisfactory to the Agents and the Required Lenders.
"Subordinated Debt Documents" means all agreements, indentures
and instruments pursuant to which Subordinated Debt is issued.
"Subordination Agreement" has the meaning specified in Section
3.01(h)(v).
"Subsidiary" of any Person means any corporation, partnership,
joint venture, limited liability company, trust or estate of which (or
in which) more than 50% of (a) the issued and outstanding capital stock
having ordinary voting power to elect a majority of the Board of
Directors of such corporation (irrespective of whether at the time
capital stock of any other class or classes of such corporation shall
or might have voting power upon the occurrence of any contingency), (b)
the interest in the capital or profits of such partnership or joint
venture or (c) the beneficial interest in such trust or estate is at
the time directly or indirectly owned or controlled by such Person, by
such Person and one or more of its other Subsidiaries or by one or more
of such Person's other Subsidiaries.
"Subsidiary Group" means each Restricted Subsidiary of
Flagstar (other than the Borrower) and its Subsidiaries, taken as a
whole.
"Subsidiary Intercompany Debt" means, collectively:
(a) Debt of Restricted Subsidiaries of Flagstar to
Flagstar for money borrowed which Debt (i) arises from loans
or advances made by Flagstar to such Restricted Subsidiaries
out of the proceeds of Debt of Flagstar that is permitted by
Section 5.02(b), (ii) constitutes a Subordinated Obligation
(as that term is defined in the Subordination Agreement),
(iii) is not prepayable and (iv) matures not earlier than
January 1, 2001; and
(b) Debt of Flagstar to the Borrower for money
borrowed as and to the extent that the principal amount
thereof is necessary to enable Flagstar to meet its
obligations in the ordinary course as the same become due and
payable (provided that such borrowings are represented by the
Flagstar Intercompany Note and that amounts so borrowed by
Flagstar shall be applied by Flagstar to the payment of such
obligations as the same become due and payable).
"Subsidiary Pledgor" means each Restricted Subsidiary of
Flagstar that owns all or any portion of the capital stock of any other
Restricted Subsidiary of Flagstar.
"Subsidiary Working Capital Notes" means intercompany notes
made by Designated Operating Subsidiaries in favor of the Borrower in
substantially the form of Exhibit H.
"Surplus Cash" means, as of any date, the lesser of (a) cash
reflected on the Consolidated balance sheet of Flagstar and its
Restricted Subsidiaries in excess of $13,000,000 and (b) the aggregate
of amounts on deposit in the Borrower Cash Collateral Account and in
the Collateral Investment Accounts (as defined in the Security
Agreement).
"Swing Line Advance" means an advance made by (a) the Swing
Line Bank pursuant to Section 2.01(c) or (b) any Lender pursuant to
Section 2.02(b).
"Swing Line Bank" means Citibank.
"Swing Line Borrowing" means a borrowing consisting of a Swing
Line Advance made by the Swing Line Bank.
"Swing Line Facility" has the meaning specified in Section
2.01(c).
"Tax Certificate" has the meaning specified in Section
5.03(r).
"Tax Sharing Agreement" means the Tax Sharing Agreement dated
as of December 6, 1989 among FCI, Flagstar and the Restricted
Subsidiaries of Flagstar.
"Taxes" has the meaning specified in Section 2.11(a).
"Termination Date" means the earlier of (a) April 10, 1999 and
(b) the date of termination in whole of the Letter of Credit
Commitments and the Working Capital Commitments pursuant to Section
2.04 or 6.01.
"Total Debt" outstanding on any date means the sum, without
duplication, of (a) the aggregate principal amount of all Debt of
Flagstar and its Restricted Subsidiaries, on a Consolidated basis,
outstanding on such date of the kinds referred to in clauses (a), (c),
(d) and (e) of the definition of Debt, (b) the aggregate principal
amount of all Debt of Flagstar and its Restricted Subsidiaries, on a
Consolidated basis, outstanding on such date of the kinds referred to
in clause (i) of the definition of "Debt" that relates to Debt of other
Persons of the kinds referred to in clauses (a), (c), (d) and (e) of
the definition of Debt and (c) the aggregate principal amount of all
Funded Debt of Flagstar and its Restricted Subsidiaries on a
Consolidated basis of the kind referred to in clause (f) of the
definition of Debt.
"Trade Letter of Credit" means any letter of credit that is
issued in support of trade obligations incurred in the ordinary course
of business.
"Trademark Security Agreement" has the meaning specified in
Section 3.01(h)(iv).
"Transferred Businesses" has the meaning specified in Section
2.04(b)(i)A)(3).
"Type" refers to the distinction between Advances bearing
interest at the Base Rate and Advances bearing interest at the
Eurodollar Rate.
"Unrestricted Subsidiary" means Newco and such other
Subsidiaries of Flagstar as Flagstar shall designate as an Unrestricted
Subsidiary in writing to the Agents and the Lenders in accordance with
the terms of Section 5.02(t), and any Subsidiaries thereof.
"Unused Working Capital Commitment" means, with respect to any
Lender at any time, (a) such Lender's Working Capital Commitment at
such time minus (b) the sum of (i) the aggregate principal amount of
all Working Capital Advances, Swing Line Advances and Letter of Credit
Advances made by such Lender (in its capacity as a Lender) and
outstanding at such time, plus (ii) such Lender's Pro Rata Share of (A)
the aggregate Available Amount of all Letters of Credit outstanding at
such time, (B) the aggregate principal amount of all Letter of Credit
Advances made by the Issuing Banks pursuant to Section 2.13(c) and
outstanding at such time other than any such Letter of Credit Advance
which, at or prior to such time, has been assigned in part to such
Lender pursuant to Sections 2.13(c) and other than Letter of Credit
Advances contemporaneously repaid with the proceeds of Working Capital
Advances in connection with which a determination of the unused Working
Capital Commitment is made and (C) the aggregate principal amount of
all Swing Line Advances made by the Swing Line Bank pursuant to Section
2.01(c) and outstanding at such time other than any such Swing Line
Advance which, at or prior to such time, has been assigned in part to
such Lender pursuant to Sections 2.02(b) and other than Swing Line
Advances contemporaneously repaid with the proceeds of Working Capital
Advances in connection with which a determination of the unused Working
Capital Commitment is made.
"Voting Stock" means 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 though the right so to vote has been suspended by the
happening of such a contingency.
"Welfare Plan" means a welfare plan, as defined in Section
3(1) of ERISA.
"Withdrawal Liability" has the meaning specified in Part I of
Subtitle E of Title IV of ERISA.
"Working Capital Advance" has the meaning specified in Section
2.01(b).
"Working Capital Borrowing" means a borrowing consisting of
Working Capital Advances of the same Type and, in the case of
Eurodollar Rate Advances, having Interest Periods of the same duration
commencing on the same date.
"Working Capital Commitment" of any Lender means the amount
set forth opposite such Lender's name on Schedule I hereto under the
caption Working Capital Commitment or, if such Lender has entered into
one or more Assignments and Acceptances, set forth for such Lender in
the Register maintained by the Funding Agent pursuant to Section
8.07(e).
"Working Capital Facility" means the aggregate amount of the
Lenders' Working Capital Commitments.
SECTION 1.02. Computation of Time Periods. In this Agreement
in the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and "until"
mean "to but excluding".
SECTION 1.03. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles consistent with those applied in the preparation
of the financial statements referred to in Section 4.01(f).
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
SECTION 2.01. The Advances. (a) Purchase of Assignments. Each
Second Restatement Lender severally agrees, on the terms and conditions
hereinafter set forth, to purchase and assume on the Closing Date an undivided
interest in the rights and obligations of the Existing Lenders under the
Existing Credit Agreement in an amount equal to, in the case of the "Working
Capital Advances" under the Existing Credit Agreement, such Second Restatement
Lender's Pro Rata Share of the aggregate of the Working Capital Commitments
hereunder, such purchase to be effected by payment to the Funding Agent for the
account of the Existing Lenders of an amount equal to such Second Restatement
Lender's Pro Rata Share of the aggregate principal amount of such "Working
Capital Advances" (it being understood that Flagstar and Funding shall make
payment of all Term Advances (as defined in the Existing Credit Agreement), if
any, and all accrued interest, commitment fees and other accrued amounts and
other amounts due and owing through the Closing Date directly to the Existing
Lenders in accordance with the terms of the Existing Credit Agreement). Such
purchase shall be made on such notice, and otherwise on such terms, as are
provided under this Agreement as though such purchase were a Borrowing
hereunder. The "Working Capital Advances" so purchased shall be redesignated
Working Capital Advances hereunder. In furtherance of the foregoing, each Second
Restatement Lender hereby authorizes and directs the Funding Agent to accept the
Assignment Agreement on behalf of the Second Restatement Lenders.
(b) The Working Capital Advances. Each Lender severally
agrees, on the terms and conditions hereinafter set forth, to make advances
(such advances, together with the advances assigned and owing to such Lender as
of the Closing Date, as set forth opposite such Lender's name on Schedule 2.01
under the caption "Working Capital Advances", being such Lender's "Working
Capital Advances") to the Borrower from time to time on any Business Day during
the period from the Closing Date until the Termination Date, in an amount for
each such Advance not to exceed such Lender's Unused Working Capital Commitment
at such time and in an aggregate amount for all Working Capital Advances and all
Swing Line Advances not to exceed $75,000,000 at any time outstanding. Each
Working Capital Borrowing shall be (i) in the case of a Borrowing to effect a
repayment of a Swing Line Advance, equal to the amount of such Swing Line
Advance and (ii) in each other case, an aggregate amount of $5,000,000 or an
integral multiple of $1,000,000 in excess thereof, and shall consist of Working
Capital Advances made by the Lenders ratably according to their Working Capital
Commitments. Within the limits of each Lender's Unused Working Capital
Commitment, the Borrower may borrow under this Section 2.01(b), prepay pursuant
to Section 2.05(a) and reborrow under this Section 2.01(b).
(c) The Swing Line Advances. The Borrower may request the
Swing Line Bank to make, and the Swing Line Bank may, if, in its sole
discretion, it elects to do so, make, on the terms and conditions hereinafter
set forth, Swing Line Advances to the Borrower from time to time on any Business
Day during the period from the Closing Date until the Termination Date, (i) in
an aggregate principal amount not to exceed at any time outstanding the lesser
of (A) $15,000,000 (the "Swing Line Facility") and (B) the excess of $75,000,000
over the aggregate amount of all Working Capital Advances then outstanding and
(ii) in an amount for such Swing Line Advance not to exceed the aggregate of the
Unused Working Capital Commitments of the Lenders at such time. No Swing Line
Advance shall be used for the purpose of funding the payment of principal of any
other Swing Line Advance. Each Swing Line Borrowing shall be in an amount of
$1,000,000 or an integral multiple of $100,000 in excess thereof and shall be
made as a Base Rate Advance. Within the limits of the Swing Line Facility and
within the limits referred to in clause (ii) above, so long as the Swing Line
Bank, in its sole discretion, elects to make Swing Line Advances, the Borrower
may (i) borrow under this Section 2.01(c), (ii) repay pursuant to Section 2.03
or prepay pursuant to Section 2.05(a) (or the Swing Line Advances may be reduced
pursuant to Section 2.02(b)(ii)) and (iii) reborrow under this Section 2.01(c).
SECTION 2.02. Making the Advances. (a) Except as otherwise
provided in Sections 2.02(b) and 2.13, each Borrowing shall be made on notice,
given not later than 11:00 A.M. (New York City time) on the first Business Day
prior to the date of the proposed Borrowing, in the case of Base Rate Advances,
and on the third Business Day prior to the date of the proposed Borrowing, in
the case of Eurodollar Rate Advances, by the Borrower to the Funding Agent,
which shall give to each Appropriate Lender prompt notice thereof by telex,
telecopier or cable. Each such notice of a Borrowing (a "Notice of Borrowing")
shall be by telex, telecopier or cable, in substantially the form of Exhibit B-1
hereto, specifying therein the requested (i) date of such Borrowing, (ii)
Facility under which such Borrowing is to be made, (iii) Type of Advances
comprising such Borrowing, (iv) aggregate amount of such Borrowing and (v) in
the case of a Borrowing consisting of Eurodollar Rate Advances, initial Interest
Period for each such Advance. Each Appropriate Lender shall, before 12:00 Noon
(New York City time) on the date of such Borrowing, make available for the
account of its Applicable Lending Office to the Funding Agent at the Funding
Agent's Account, in same day funds, such Lender's ratable portion of such
Borrowing. After the Funding Agent's receipt of such funds and upon fulfillment
of the applicable conditions set forth in Article III, the Funding Agent will
make such funds available to the Borrower by crediting the Borrower's Account;
provided, however, that, in the case of any Working Capital Borrowing, the
Funding Agent shall first make a portion of such funds equal to the aggregate
principal amount of any Swing Line Advances and Letter of Credit Advances made
by the Swing Line Bank or any Issuing Bank, as the case may be, and by any other
Lender and outstanding on the date of such Working Capital Borrowing,
plus interest accrued and unpaid thereon to and as of such date, available to
the Swing Line Bank or such Issuing Bank, as the case may be, and such other
Lenders for repayment of such Swing Line Advances and Letter of Credit Advances.
(b) (i) Each Swing Line Borrowing shall be made on notice,
given not later than 11:00 A.M. (New York City time) on the date of the proposed
Swing Line Borrowing, by the Borrower to the Swing Line Bank and the Funding
Agent. Each such notice of a Swing Line Borrowing (a "Notice of Swing Line
Borrowing") shall be by telephone, telex or telecopier, confirmed immediately in
writing in the case of telephonic notice, specifying therein the requested date
and amount of such Borrowing. If, in its sole discretion, it elects to make the
requested Swing Line Advance, the Swing Line Bank will make the amount thereof
available to the Funding Agent at the Funding Agent's Account, in same day
funds. After the Funding Agent's receipt of such funds and upon fulfillment of
the applicable conditions set forth in Article III, the Funding Agent will make
such funds available to the Borrower by crediting the Borrower's Account.
(ii) Upon written demand by the Swing Line Bank, with a copy
of such demand to the Funding Agent, each other Lender shall purchase from the
Swing Line Bank, and the Swing Line Bank shall sell and assign to each such
other Lender, such other Lender's Pro Rata Share of each outstanding Swing Line
Advance as of the date of such demand, by making available for the account of
its Applicable Lending Office to the Agent for the account of the Swing Line
Bank, by deposit to the Funding Agent's Account, in same day funds, an amount
equal to the portion of the outstanding principal amount of such Swing Line
Advance to be purchased by such Lender. The Borrower hereby agrees to each such
sale and assignment. Each Lender agrees to purchase its Pro Rata Share of an
outstanding Swing Line Advance on (i) the Business Day on which demand therefor
is made by the Swing Line Bank, provided that notice of such demand is given not
later than 11:00 A.M. (New York City time) on such Business Day or (ii) the
first Business Day next succeeding such demand if notice of such demand is given
after such time. Upon any such assignment by the Swing Line Bank to any other
Lender of a portion of a Swing Line Advance, the Swing Line Bank represents and
warrants to such other Lender that the Swing Line Bank is the legal and
beneficial owner of such interest being assigned by it, but makes no other
representation or warranty and assumes no responsibility with respect to such
Swing Line Advance, the Loan Documents or any Loan Party. If and to the extent
that any Lender shall not have so made the amount of such Swing Line Advance
available to the Funding Agent, such Lender agrees to pay to the Funding Agent
forthwith on demand such amount together with interest thereon, for each day
from the date of demand by the Swing Line Bank until the date such amount is
paid to the Funding Agent, at the Federal Funds Rate. If such Lender shall pay
to the Funding Agent such amount for the account of the Swing Line Bank on any
Business Day, such amount so paid in respect of principal shall constitute a
Swing Line Advance made by such Lender on such Business Day for purposes of this
Agreement, and the outstanding principal amount of the Swing Line Advance made
by the Swing Line Bank shall be reduced by such amount on such Business Day.
(c) Anything in subsection (a) above to the contrary
notwithstanding, (i) the Borrower may not select Eurodollar Rate Advances for
any Borrowing if the aggregate amount of such Borrowing is less than $5,000,000
or if the obligation of the Appropriate Lenders to make Eurodollar Rate Advances
shall then be suspended pursuant to Section 2.08 or Section 2.09 and (ii) the
aggregate number of different Interest Periods in effect at any time for
outstanding Eurodollar Advances shall not exceed ten (for purposes of this
clause (ii), Interest Periods of the same duration, but commencing on different
dates, shall be treated as different Interest Periods).
(d) Each Notice of Borrowing and Notice of Swing Line
Borrowing shall be irrevocable and binding on the Borrower. In the case of any
Borrowing that the related Notice of Borrowing specifies is to be comprised of
Eurodollar Rate Advances, the Borrower shall indemnify each Appropriate Lender
against any loss, cost or expense incurred by such Lender as a result of any
failure to fulfill on or before the date specified in such Notice of Borrowing
for such Borrowing the applicable conditions set forth in Article III,
including, without limitation, any loss (including loss of anticipated profits),
cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund the Advance to be made
by such Lender as part of such Borrowing when such Advance, as a result of such
failure, is not made on such date.
(e) Unless the Funding Agent shall have received notice from
an Appropriate Lender prior to the date of any Borrowing under a Facility under
which such Lender has a Commitment that such Lender will not make available to
the Funding Agent such Lender's ratable portion of such Borrowing, the Funding
Agent may assume that such Lender has made such portion available to the Funding
Agent on the date of such Borrowing in accordance with subsection (a) or (b) of
this Section 2.02 and the Funding Agent may, in reliance upon such assumption,
make available to the Borrower on such date a corresponding amount. If and to
the extent that such Lender shall not have so made such ratable portion
available to the Funding Agent, but the Funding Agent has nonetheless made such
portion available to the Borrower, such Lender and the Borrower severally agree
to repay to the Funding Agent, not later than 12:00 Noon (New York City time)
forthwith on demand by the Funding Agent, such corresponding amount together
with interest thereon, for each day from the date such amount is made available
to such Borrower until the date such amount is repaid to the Funding Agent, at
(i) in the case of such Borrower, the interest rate applicable at such time
under such Section 2.06 to Advances comprising such Borrowing and (ii) in the
case of such Lender, the Federal Funds Rate. If such Lender shall repay to the
Funding Agent such corresponding amount, such amount so repaid shall constitute
such Lender's Advance as part of such Borrowing for all purposes.
(f) The failure of any Lender to make the Advance to be made
by it as part of any Borrowing shall not relieve any other Lender of its
obligations, if any, hereunder to make its Advances on the date of such
Borrowing, but no Lender shall be responsible for the failure of any other
Lender to make the Advance to be made by such other Lender on the date of any
Borrowing.
SECTION 2.03. Repayment. (a) Working Capital Advances. The
Borrower shall repay to the Funding Agent for the account of the Lenders the
outstanding principal amount of the Working Capital Advances on the Termination
Date.
(b) Swing Line Advances. The Borrower shall repay to the
Funding Agent for the account of the Swing Line Bank and each other Lender that
has made a Swing Line Advance the outstanding principal amount of each Swing
Line Advance made by each of them on the earlier to occur of (i) the tenth
Business Day after the requested date of such Borrowing and (ii) the Termination
Date.
SECTION 2.04. Termination or Reduction of the Commitments. (a)
Optional. The Borrower may, upon at least two Business Days' notice to the
Funding Agent, terminate in whole or reduce ratably in part the unused portions
of the Commitments; provided, however, that each partial reduction of a Facility
(i) shall be in an aggregate amount of $5,000,000 or an integral multiple of
$1,000,000 in excess thereof and (ii) shall be made ratably among the
Appropriate Lenders in accordance with their Commitments with respect to such
Facility.
(b) Mandatory. (i) The Working Capital Facility shall be
permanently reduced (A) on the date that is twelve months after the date of
receipt of Net Cash Proceeds of the sale, lease, transfer or other disposition
of any assets of Flagstar or any of its Restricted Subsidiaries (other than (1)
dispositions of assets permitted under Section 5.02(e), to the extent not
expressly stated therein to give rise to a mandatory Commitment reduction
hereunder, (2) the disposition of Portiontrol Foods, Inc. and (3) the
dispositions of Proficient Food Companies, IM Parks, Inc. and its Subsidiaries
and IM Stadium, Inc. and its Subsidiaries (collectively, the "Transferred
Businesses")) in an amount equal to the amount of such Net Cash Proceeds minus
(I) the amount, without duplication of the amounts referred to in Section
2.04(b)(i)(B)(1) and Section 2.04(b)(i)(C)(1) below, of Capital Expenditures
made by Flagstar and its Restricted Subsidiaries during such twelve months and
(II) the amount, without duplication of the amounts referred to in Section
2.04(b)(i)(B)(2) and Section 2.04(b)(i)(C)(2) below, of Investments made by
Flagstar and its Restricted Subsidiaries during such twelve months;
(B) on the date that is twelve months after the date of
receipt of Net Cash Proceeds of the disposition of Portiontrol Foods, Inc. in an
amount equal to the amount of such Net Cash Proceeds minus (1) the amount,
without duplication of the amounts referred to in Section 2.04(b)(i)(A)(I) above
and Section 2.04(b)(i)(C)(1) below, of Capital Expenditures made by Flagstar and
its Restricted Subsidiaries during such twelve months, (2) the amount,
without duplication of the amounts referred to in Section 2.04(b)(i)(A)(II)
above and Section 2.04(b)(i)(C)(2) below, of Investments made by Flagstar and
its Restricted Subsidiaries during such twelve months, (3) the amount, without
duplication of the amount referred to in Section 2.04(b)(i)(C)(3) below, of
Senior Debt other than the Commitments retired or defeased during such twelve
months, provided that the amount described in this clause (3) shall not exceed
$20,000,000;
(C) on the date that is twelve months after the date of
receipt of Net Cash Proceeds of the dispositions of each of the Transferred
Businesses in an amount equal to the aggregate of such Net Cash Proceeds minus
(1) the amount, without duplication of the amounts referred to in Section
2.04(b)(i)(A)(I) and Section 2.04(b)(i)(B)(1) above for Capital Expenditures
made by Flagstar and its Restricted Subsidiaries during such twelve months, (2)
the amount, without duplication of the amounts referred to in Section
2.04(b)(i)(A)(II) and Section 2.04(b)(i)(B)(2) above, of Investments made by
Flagstar and its Restricted Subsidiaries during such twelve months, (3) the
amount, without duplication of the amount referred to in Section
2.04(b)(i)(B)(3) above, of Senior Debt other than the Commitments retired or
defeased during such twelve months, provided that the amount described in this
clause (3) shall not exceed $40,000,000; and
(D) on the date of receipt of the Net Cash Proceeds of the
sale or issuance by FCI, Flagstar or any of its Restricted Subsidiaries of any
Debt (other than Debt permitted under Section 5.02(b) and, to the extent the Net
Cash Proceeds thereof are applied to the repayment or refinancing of
Subordinated Debt other than the FCI Intercompany Note, Subordinated Debt) in an
amount equal to such Net Cash Proceeds.
(ii) The Letter of Credit Facility shall be permanently
reduced from time to time on the date of each reduction in the Working Capital
Facility by the amount, if any, by which the Letter of Credit Facility exceeds
the Working Capital Facility after giving effect to such reduction of the
Working Capital Facility.
SECTION 2.05. Prepayments. (a) Optional. The Borrower may,
upon at least two Business Days' notice to the Funding Agent stating the
proposed date and aggregate principal amount of the prepayment, and if such
notice is given the Borrower shall, prepay the outstanding principal amount of
the Advances owing by it and comprising part of the same Borrowings in whole or
ratably in part, together with accrued interest to the date of such prepayment
on the principal amount prepaid; provided, however, that (x) each partial
prepayment shall be in an aggregate principal amount of $5,000,000 or an
integral multiple of $1,000,000 in excess thereof and (y) if any prepayment of a
Eurodollar Rate Advance is made on a date other than the last day of an Interest
Period for such Advance the Borrower shall also pay any amounts owing pursuant
to Section 8.04(c).
(b) Mandatory. (i) The Borrower shall, on each Business Day,
prepay an aggregate principal amount of the Working Capital Advances comprising
part of the same Borrowing and the Swing Line Advances equal to the amount by
which the sum of (1) the aggregate principal amount of Working Capital Advances
plus (2) Swing Line Advances plus (3) Letter of Credit Advances plus (4) the
Available Amount of Letters of Credit exceeds (5) the amount of the Working
Capital Facility. Each prepayment made under this Section 2.05(b)(i) shall be
made ratably among the Appropriate Lenders in accordance with their Commitments
with respect to such Facility.
(ii) The Borrower shall, on each Business Day, pay to the
Funding Agent for deposit in the Borrower Cash Collateral Account an amount
sufficient to cause the aggregate amount on deposit in such account to equal the
amount by which the aggregate Available Amount of all Letters of Credit then
outstanding exceeds the Letter of Credit Facility on such Business Day.
(iii) All prepayments under this subsection (b) shall be made
together with accrued interest to the date of such prepayment on the principal
amount prepaid.
(iv) To the extent that (A) the provisions of this Section
2.05(b) would otherwise require the application of any prepayment to Eurodollar
Rate Advances on a date that is not the last day of the then existing Interest
Period therefor and (B) the Lenders entitled to such prepayment shall not have
waived their rights to compensation under Section 8.04(c) in respect of such
prepayment, the Borrower shall have the right, in lieu of making such prepayment
on such date, to deposit the amount of such prepayment in the Borrower Cash
Collateral Account for disbursement and application in accordance with the
foregoing provisions of this Section 2.05 on the last day of the then existing
Interest Period for such Eurodollar Rate Advances or as otherwise provided in
the Security Agreement.
SECTION 2.06. Interest. (a) Scheduled Interest. The Borrower
shall pay interest on the unpaid principal amount of each Advance owing by it to
each Lender from the date of such Advance until such principal amount shall be
paid in full, at the following rates per annum:
(i) Base Rate Advances. During such periods as such Advance is
a Base Rate Advance, a rate per annum equal at all times to the sum of
(i) the Base Rate in effect from time to time plus (ii) the Applicable
Margin in effect from time to time, payable in arrears quarterly on the
last day of each March, June, September, and December during such
periods and on the date such Base Rate Advance shall be Converted or
paid in full.
(ii) Eurodollar Rate Advances. During such periods as such
Advance is a Eurodollar Rate Advance, a rate per annum equal at all
times during each Interest Period for such Advance to the sum of (i)
the Eurodollar Rate for such Interest Period for such Advance plus (ii)
the Applicable Margin in effect from time to time, payable in arrears
on the last day of such Interest Period and, if such Interest Period
has a duration of more than three months, on each day that occurs
during such Interest Period every three months from the first day of
such Interest Period and on the day such Eurodollar Rate Advance shall
be Converted or paid in full.
(b) Default Interest. Upon the occurrence and during the
continuance of a Default, the Borrower shall pay interest on (i) the unpaid
principal amount of each Advance owing by it to each Lender, payable in arrears
on the dates referred to in clause (a)(i) or (a)(ii) above and on demand, at a
rate per annum equal at all times to 2% per annum above the rate per annum
required to be paid on such Advance pursuant to clause (a)(i) or (a)(ii) above
and (ii) to the fullest extent permitted by law, the amount of any interest, fee
or other amount payable hereunder that is not paid when due, from the date such
amount shall be due until such amount shall be paid in full, payable in arrears
on the date such amount shall be paid in full and on demand, at a rate per annum
equal at all times to 2% per annum above the rate per annum required to be paid,
in the case of interest, on the Type of Advance on which such interest has
accrued pursuant to clause (a)(i) or (a)(ii) above, and, in all other cases, on
Base Rate Advances pursuant to clause (a)(i) above.
(c) Notice of Interest Rate. Promptly after receipt of a
Notice of Borrowing pursuant to Section 2.02(a), the Funding Agent shall give
notice to the Borrower and each Lender of the applicable interest rate
determined by the Agent for purposes of clause (a)(i) or (ii).
(d) Interest Rate Determination. (i) Each Reference Bank
agrees to furnish to the Funding Agent timely information for the purpose of
determining each Base Rate and Eurodollar Rate. If any one or more of the
Reference Banks shall not furnish such timely information to the Funding Agent
for the purpose of determining any such interest rate, the Funding Agent shall
determine such interest rate on the basis of timely information furnished by the
remaining Reference Banks.
(ii) If none of the Reference Banks is able to furnish timely
information to the Funding Agent for determining the Eurodollar Rate for any
Eurodollar Rate Advances,
(A) the Funding Agent shall forthwith notify the Borrower and
the Lenders that the interest rate cannot be determined for such
Eurodollar Rate Advances,
(B) each such Advance will automatically, on the last day of
the then existing Interest Period therefor, convert into a Base Rate
Advance (or if such Advance is then a Base Rate Advance, will continue
as a Base Rate Advance), and
(C) the obligation of the Lenders to make, or to Convert
Advances into, Eurodollar Rate Advances shall be suspended until the
Funding Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist.
SECTION 2.07. Fees. (a) Commitment Fee. The Borrower shall pay
to the Funding Agent for the account of the Lenders a commitment fee on the
average daily unused portion of each Lender's Commitments from the Closing Date
in the case of each Second Restatement Lender and from the effective date
specified in the Assignment and Acceptance pursuant to which it became a Lender
in the case of each other Lender until the Termination Date at the rate of 1/2
of 1% per annum, payable in arrears quarterly on the last day of each March,
June, September and December, commencing June 1996, and on the Termination Date;
provided, however, that any commitment fee accrued with respect to any of the
Commitments of a Defaulting Lender during the period prior to the time such
Lender became a Defaulting Lender and unpaid at such time shall not be due from
or payable by the Borrower at any time except to the extent that such commitment
fee shall otherwise have been due and payable prior to such time; and provided
further that no commitment fee shall accrue on any of the Commitments of a
Defaulting Lender so long as such Lender shall be a Defaulting Lender.
(b) Funding Agent's Fees. The Borrower shall pay to the
Funding Agent for its own account such fees as may from time to time be agreed
between the Borrower and the Funding Agent.
SECTION 2.08. Conversion of Advances. (a) Optional. The
Borrower may on any Business Day, upon notice given to the Funding Agent not
later than 11:00 A.M. (New York City time) on the third Business Day prior to
the date of the proposed Conversion and subject to the provisions of Sections
2.09 and 2.10, convert all or any portion of the Advances of one Type comprising
the same Borrowing into Advances of the other Type; provided, however, that any
Conversion of Eurodollar Rate Advances into Base Rate Advances shall be made
only on the last day of an Interest Period for such Eurodollar Rate Advances,
any Conversion of Base Rate Advances into Eurodollar Rate Advances shall be in
an amount not less than the minimum amount specified in Section 2.02(c) and no
Conversion of any Advances shall result in a greater number of Interest Periods
for Eurodollar Rate Advances than is permitted under Section 2.02(c). Each such
notice of Conversion shall, within the restrictions specified above, specify (i)
the date of such Conversion, (ii) the Advances to be Converted and (iii) if such
Conversion is into Eurodollar Rate Advances, the duration of the initial
Interest Period for such Advances. Each notice of Conversion shall be
irrevocable and binding on the Borrower.
(b) Mandatory. (i) Whenever the aggregate unpaid principal
amount of Eurodollar Rate Advances comprising any Borrowing shall be reduced, by
payment or prepayment or otherwise, to less than $5,000,000, such Advances shall
automatically Convert into Base Rate Advances on the last day of the then
existing Interest Period for such Advances.
(ii) If the Borrower shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01, the
Funding Agent will forthwith so notify the Borrower and the Appropriate Lenders,
whereupon each such Eurodollar Rate Advance will automatically, on the last day
of the then existing Interest Period therefor, Convert into a Base Rate Advance.
(iii) Upon the occurrence and during the continuance of any
Default, (x) each Eurodollar Rate Advance will automatically, on the last day of
the then existing Interest Period therefor, Convert into a Base Rate Advance and
(y) the obligation of the Lenders to make, or to Convert Advances into,
Eurodollar Rate Advances shall be suspended.
SECTION 2.09. Increased Costs, Etc. (a) If, due to either (i)
the introduction of or any change in or in the interpretation of any law or
regulation occurring after the Closing Date or (ii) the compliance with any
guideline or request from any central bank or other governmental authority
issued after the date hereof (whether or not having the force of law), there
shall be any increase in the cost to any Lender Party of agreeing to make or
making, funding or maintaining Eurodollar Rate Advances, then the Borrower shall
from time to time, not later than 12:00 Noon (New York City time) on demand by
such Lender Party (with a copy of such demand to the Funding Agent), pay to the
Funding Agent for the account of such Lender Party additional amounts sufficient
to compensate such Lender Party for such increased cost; provided, however,
that, before making any such demand, each Lender Party agrees to use reasonable
efforts (consistent with its internal policy and legal and regulatory
restrictions) to designate a different Applicable Lending Office if the making
of such a designation would avoid the need for, or reduce the amount of, such
increased cost that may thereafter accrue and would not, in the reasonable
judgment of such Lender Party, be otherwise disadvantageous to such Lender
Party. A certificate as to the amount of such increased cost, setting forth the
basis thereof in reasonable detail and submitted to the Borrower by such Lender
Party, shall be conclusive and binding for all purposes, absent manifest error.
(b) If any Lender Party determines that compliance with any
law or regulation or any guideline or request from any central bank or other
governmental authority issued after the date hereof (whether or not having the
force of law) affects or would affect the amount of capital required or
requested (whether or not having the force of law) to be maintained by such
Lender Party or any corporation controlling such Lender Party and that the
amount of such capital is increased, or the rate of return thereon is reduced by
or based
upon the existence of such Lender Party's commitment to lend hereunder and other
commitments of this type or the issuance of the Letters of Credit (or similar
contingent obligations), then, not later than 12:00 Noon (New York City time) on
demand by such Lender Party (with a copy of such demand to the Funding Agent),
the Borrower shall pay to the Funding Agent for the account of such Lender Party
from time to time as specified by such Lender Party or corporation, as the case
may be, additional amounts sufficient to compensate such Lender Party in the
light of such circumstances for such increase in capital, or reduction in the
rate of return, but only to the extent that such Lender Party reasonably
determines such increase or reduction to be allocable to the existence of such
Lender Party's commitment to lend hereunder or to the issuance or maintenance of
any Letters of Credit. A certificate as to such amounts setting forth the basis
thereof in reasonable detail submitted to the Borrower by such Lender Party,
shall be conclusive and binding for all purposes, absent manifest error.
(c) If, with respect to any Eurodollar Rate Advances, Lenders
owed at least 51% of the then aggregate unpaid principal amount thereof notify
the Funding Agent that the Eurodollar Rate for any Interest Period for such
Advances will not adequately reflect the cost to such Lenders of making, funding
or maintaining their Eurodollar Rate Advances for such Interest Period, the
Funding Agent shall forthwith so notify the Borrower and the Appropriate
Lenders, whereupon (i) each such Eurodollar Rate Advance will automatically, on
the last day of the then existing Interest Period therefor, Convert into a Base
Rate Advance and (ii) the obligation of the Appropriate Lenders to make, or to
Convert Advances into, Eurodollar Rate Advances shall be suspended until the
Funding Agent shall notify the Borrower that such Lenders have determined that
the circumstances causing such suspension no longer exist.
(d) Notwithstanding any other provision of this Agreement, if
the introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any central bank or other governmental
authority shall assert that it is unlawful, for any Lender or its Eurodollar
Lending Office to perform its obligations hereunder to make Eurodollar Rate
Advances or to continue to fund or maintain Eurodollar Rate Advances hereunder,
then, on notice thereof and demand therefor by such Lender to the Borrower
through the Funding Agent, (i) each Eurodollar Rate Advance under each Facility
under which such Lender has a Commitment will automatically, not later than
12:00 Noon (New York City time) on the Business Day following such demand,
Convert into a Base Rate Advance and (ii) the obligation of the Appropriate
Lenders to make, or to Convert Advances into, Eurodollar Rate Advances shall be
suspended until the Funding Agent shall notify the Borrower that such Lender has
determined that the circumstances causing such suspension no longer exist;
provided, however, that, before making any such demand, such Lender agrees to
use reasonable efforts (consistent with its internal policy and legal and
regulatory restrictions) to designate a different Eurodollar Lending Office if
the making of such a designation would allow such Lender or its Eurodollar
Lending Office to continue to perform
its obligations to make Eurodollar Rate Advances or to continue to fund or
maintain Eurodollar Rate Advances and would not, in the judgment of such Lender,
be otherwise disadvantageous to such Lender.
SECTION 2.10. Payments and Computations. (a) The Borrower
shall make each payment hereunder and under the Notes not later than 11:00 A.M.
(New York City time) on the day when due in U.S. dollars to the Funding Agent at
the Funding Agent's Account in same day funds. The Funding Agent will promptly
thereafter cause to be distributed like funds relating to the payment of
principal or interest or commitment fees under or in respect of a particular
Facility ratably (other than amounts payable pursuant to Section 2.09(a),
2.09(b), 2.11, 2.13(d) or 8.04(c), amounts payable to the Swing Line Bank in
respect of Swing Line Advances and amounts payable to any Issuing Bank in
respect of Letters of Credit) to the Appropriate Lenders for the account of
their Applicable Lending Offices, and like funds relating to the payment of any
other amount payable to any Lender to such Lender for the account of its
Applicable Lending Office, in each case to be applied in accordance with the
terms of this Agreement. Upon its acceptance of an Assignment and Acceptance and
recording of the information contained therein in the Register pursuant to
Section 8.07(e), from and after the effective date of such Assignment and
Acceptance, the Funding Agent shall make all payments hereunder and under the
Notes in respect of the interest assigned thereby to the Lender assignee
thereunder, and the parties to such Assignment and Acceptance shall make all
appropriate adjustments in such payments for periods prior to such effective
date directly between themselves.
(b) The Borrower hereby authorizes each Lender Party, if and
to the extent payment owed to such Lender Party is not made by the Borrower to
the Funding Agent when due hereunder or under the Note held by such Lender
Party, to charge from time to time against any or all of such Borrower's
accounts with such Lender Party any amount so due.
(c) All computations of interest, fees and Letter of Credit
commissions shall be made by the Funding Agent on the basis of a year of 360
days, in each case for the actual number of days (including the first day but
excluding the last day) occurring in the period for which such interest, fees or
commissions are payable. Each determination by the Funding Agent of an interest
rate, fee or commission hereunder shall be conclusive and binding for all
purposes, absent manifest error.
(d) Whenever any payment hereunder or under the Notes shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest or commitment fee, as
the case may be; provided, however, that, if such extension would cause payment
of interest on or principal of Eurodollar Rate Advances or any payment payable
on the last day of December to be made in the next following calendar month,
such payment shall be made on the next preceding Business Day.
(e) Unless the Funding Agent shall have received notice from
the Borrower prior to the date on which any payment is due to any Lender Party
hereunder that the Borrower will not make such payment in full, the Funding
Agent may assume that the Borrower has made such payment in full to the Funding
Agent on such date and the Funding Agent may, in reliance upon such assumption,
cause to be distributed to each such Lender Party on such due date an amount
equal to the amount then due such Lender Party from the Borrower. If and to the
extent the Borrower shall not have so made such payment in full to the Funding
Agent, each such Lender Party shall repay to the Funding Agent forthwith on
demand such amount distributed to such Lender Party together with interest
thereon, for each day from the date such amount is distributed to such Lender
Party until the date such Lender Party repays such amount to the Funding Agent,
at the Federal Funds Rate.
SECTION 2.11. Taxes. (a) Any and all payments by the Borrower
hereunder or under the Notes shall be made, in accordance with Section 2.10,
free and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, (i) in the case of each Lender Party and the Funding
Agent, taxes that are imposed on its overall net income by the United States and
taxes that are imposed on its overall net income or franchise taxes imposed by
the state or foreign jurisdiction under the laws of which such Lender Party or
the Funding Agent (as the case may be) is organized or any political subdivision
thereof and, in the case of each Lender Party, taxes that are imposed on its
overall net income or franchise taxes imposed by the state or foreign
jurisdiction of such Lender Party's Applicable Lending Office or any political
subdivision thereof (ii) taxes imposed by a jurisdiction other than the United
States or any political subdivision thereof that are payable other than by
reason of a payment made by or on behalf of the Borrower either (A) by a Person
other than a United States person (as defined below) or (B) out of funds from an
account outside the United States and (iii) in the case of each Lender Party,
United States withholding taxes to the extent such amounts are considered
excluded from Taxes under subsection (e) below (all such non- excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities in respect of
payments hereunder or under the Notes 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 hereunder or under any Note to any Lender Party or the
Funding Agent, (i) the sum payable shall be increased as may be necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.11) such Lender Party or the
Funding Agent (as the case may be) receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the Borrower shall make
such deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
law.
(b) In addition, the Borrower shall pay any present or future
stamp, documentary, excise, property or similar taxes, charges or levies that
arise from any payment made hereunder or under the Notes or from the execution,
delivery or registration of, performing under, or otherwise with respect to,
this Agreement or the Notes (hereinafter referred to as "Other Taxes").
(c) The Borrower shall indemnify each Lender Party and the
Funding Agent for the full amount of Taxes and Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section 2.11), imposed on or paid by such Lender Party or the
Funding Agent (as the case may be) and any liability (including penalties,
additions to tax, interest and expenses) arising therefrom or with respect
thereto. This indemnification shall be made within 30 days from the date such
Lender Party or the Funding Agent (as the case may be) makes written demand
therefor.
(d) Within 30 days after the date of any payment of Taxes, the
Borrower shall furnish to the Funding Agent, at its address referred to in
Section 8.02, the original receipt of payment thereof or a certified copy of
such receipt or other documentation reasonably satisfactory to the Funding Agent
evidencing payment thereof. If no Taxes are payable in respect of any payment
hereunder or under the Notes by or on behalf of the Borrower through an account
or branch outside the United States or by or on behalf of the Borrower by a
payor that is not a United States person, the Borrower shall furnish, or shall
cause such payor to furnish, to the Funding Agent, at such address, a
certificate from the appropriate taxing authority or authorities, or an opinion
of counsel acceptable to the Funding Agent in either case stating that such
payment is exempt from or not subject to Taxes. For purposes of this Section
2.11, the terms "United States" and "United States person" shall have the
meanings specified in Section 7701 of the Internal Revenue Code.
(e) Each Lender Party organized under the laws of a
jurisdiction outside the United States shall, on or prior to the date of its
execution and delivery of this Agreement in the case of each Second Restatement
Lender, and on the date of the Assignment and Acceptance pursuant to which it
became a Lender Party in the case of each other Lender Party, and from time to
time thereafter as requested in writing by the Borrower or the Funding Agent
(but only so long thereafter as such Lender Party remains lawfully able to do
so), provide each of the Funding Agent and the Borrower with either (i) two
original Internal Revenue Service forms 1001 or 4224, as appropriate, or any
successor or other form prescribed by the Internal Revenue Service, certifying
that such Lender Party is exempt from or entitled to a reduced rate of United
States withholding tax on payments pursuant to this Agreement or the Notes or
(ii) to the extent permitted by law, as an alternative to form 1001 or 4224,
each such Lender Party may provide the Borrower and the Funding Agent with two
original Internal Revenue Service Forms W-8, or any successor form prescribed by
the Internal Revenue Service, certifying that such Lender Party is exempt from
United States federal withholding tax pursuant to Section 871(h) or 881(c) of
the Code, together with an annual certificate stating that such Lender Party or
participant is not a "person" or other entity described in Section 871(h)(3) or
881(c)(3) of the Code. If the forms provided by a
Lender Party at the time such Lender Party first becomes a party to this
Agreement indicates a United States interest withholding tax rate in excess of
zero, withholding tax at such rate shall be considered excluded from Taxes
unless and until such Lender Party provides the appropriate form certifying that
a lesser rate applies, whereupon withholding tax at such lesser rate only shall
be considered excluded from Taxes for periods governed by such form; provided,
however, that, if at the date of the Assignment and Acceptance pursuant to which
a Lender Party becomes a party to this Agreement, the Lender Party assignor was
entitled to payments under subsection (a) in respect of United States
withholding tax with respect to interest paid at such date, then, to such
extent, the term Taxes shall include (in addition to withholding taxes that may
be imposed in the future or other amounts otherwise includable in Taxes) United
States withholding tax, if any, applicable with respect to the Lender Party
assignee on such date.
(f) For any period with respect to which a Lender Party has
failed to provide the Borrower with the appropriate form described in subsection
(e) (other than if such failure is due to a change in law occurring after the
date on which a form originally was required to be provided or if such form
otherwise is not required under subsection (e)), such Lender Party shall not be
entitled to indemnification under subsection (a) or indemnification under
subsection (c) with respect to Taxes imposed by the United States by reason of
such failure; provided, however, that should a Lender become subject to Taxes
because of its failure to deliver a form required hereunder, the Borrower shall
take such steps as such Lender Party shall reasonably request to assist such
Lender Party to recover such Taxes.
(g) Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 2.11 shall survive the payment in full of principal
and interest hereunder and under the Notes.
SECTION 2.12. Sharing of Payments, Etc. If any Lender Party
shall obtain at any time any payment (whether voluntary, involuntary, through
the exercise of any right of set-off, or otherwise) (a) on account of
Obligations due and payable to such Lender Party hereunder and under the Notes
at such time in excess of its ratable share (according to the proportion of (i)
the amount of such Obligations due and payable to such Lender Party at such time
to (ii) the aggregate amount of the Obligations due and payable to all Lender
Parties hereunder and under the Notes at such time) of payments on account of
the Obligations due and payable to all Lender Parties hereunder and under the
Notes at such time obtained by all the Lender Parties at such time or (b) on
account of Obligations owing (but not due and payable to such Lender Party
hereunder and under the Notes at such time in excess of its ratable share
(according to the proportion of (i) the amount of such Obligations owing to such
Lender Party at such time to (ii) the aggregate amount of the Obligations owing
(but not due and payable to all Lender Parties hereunder and under the Notes at
such time) of payments on account of the Obligations owing (but not due and
payable) to all Lender Parties hereunder and under the Notes at such time
obtained by all of the Lender Parties at such time, such Lender Party shall
forthwith purchase from the other Lender Parties such participations in the
Obligations due and payable or owing to them, as the case may be, as shall be
necessary to cause such purchasing Lender Party to share the excess payment
ratably with each of them; provided, however, that if all or any portion of such
excess payment is thereafter recovered from such purchasing Lender Party, such
purchase from each other Lender Party shall be rescinded and such other Lender
Party shall repay to the purchasing Lender Party the purchase price to the
extent of such Lender Party's ratable share (according to the proportion of (i)
the purchase price paid to such Lender Party to (ii) the aggregate purchase
price paid to all Lender Parties) of such recovery together with an amount equal
to such Lender Party's ratable share (according to the proportion of (i) the
amount of such Lender Party's required repayment to (ii) the total amount so
recovered from the purchasing Lender Party) of any interest or other amount paid
or payable by the purchasing Lender Party in respect of the total amount so
recovered. The Borrower agrees that any Lender Party so purchasing a
participation from another Lender Party pursuant to this Section 2.12 may, to
the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender Party were the direct creditor of the Borrower in the amount of
such participation.
SECTION 2.13. Letters of Credit. (a) The Letter of Credit
Facility. Each Issuing Bank severally agrees, on the terms and conditions
hereinafter set forth, to issue letters of credit (the "Letters of Credit") for
the account of the Borrower from time to time on any Business Day from the
Closing Date until 60 days before the Termination Date (i) in an aggregate
Available Amount for all Letters of Credit then outstanding and issued by such
Issuing Bank not to exceed at any time the amount set forth opposite such
Issuing Bank's name on Schedule I hereto under the caption Letter of Credit
Commitment or, if such Issuing Bank has entered into one or more Assignments and
Acceptances, set forth for such Issuing Bank in the Register maintained by the
Funding Agent pursuant to Section 8.07(e) (such amount, as the same may be
reduced pursuant to Section 2.04, being such Issuing Bank's "Letter of Credit
Commitment") and (ii) in an Available Amount for each such Letter of Credit not
to exceed the lesser of (x) the Letter of Credit Facility at such time and (y)
an amount equal to the Unused Working Capital Commitments of the Lenders at such
time, provided that an Issuing Bank may agree in its sole discretion to issue
Letters of Credit during the period from the date that is 60 days before the
Termination Date until the date that is five days before the Termination Date.
No Letter of Credit shall have an expiration date (including all rights of the
Borrower or the beneficiary to require renewal) later than the earlier of 60
days before the Termination Date and one year after the issuance thereof, but
may by its terms be renewable annually with the consent of the Issuing Bank
thereof, provided that an Issuing Bank may agree in its sole discretion to
permit any Letter of Credit to have an expiration date not later than 60 days
before the first anniversary of the Termination Date, provided further that the
Borrower shall deposit into the Borrower Cash Collateral Account at least five
Business Days prior to the Termination Date an amount equal to 105% of the sum
of (i) the aggregate Available Amount of all Letters of Credit that have an
expiration date (after giving effect to any renewal) that extends beyond the
Termination Date and (ii) the aggregate amount of all fees and expenses owing on
or in respect of such Letters of Credit. Within the limits of the Letter of
Credit Facility, and subject to the limits referred to above, the Borrower may
request the issuance of Letters of Credit under this Section 2.13(a), repay any
Letter of Credit Advances resulting from drawings thereunder pursuant to Section
2.13(c), return Letters of Credit for cancellation, allow Letters of Credit to
expire and request the issuance of additional Letters of Credit under this
Section 2.13(a). All Letters of Credit shall be Standby Letters of Credit. All
Letters of Credit outstanding on the Closing Date under the Existing Credit
Agreement shall be deemed to constitute Letters of Credit issued hereunder.
(b) Request for Issuance. (i) Each Letter of Credit shall be
issued upon notice, given not later than 11:00 A.M. (New York City time) on the
third Business Day prior to the date of the proposed issuance of such Letter of
Credit, by the Borrower to the requested Issuing Bank for such Letter of Credit,
which shall give to the Funding Agent and each Lender prompt notice thereof by
telex or telecopier. Each such notice of issuance of a Letter of Credit (a
"Notice of Issuance") shall be by tested telex, telecopier or tested cable, in
substantially the form of Exhibit B-2 hereto, specifying therein the requested
(A) date of such issuance (which shall be a Business Day), (B) Available Amount
of such Letter of Credit, (C) expiration date of such Letter of Credit, (D) name
and address of the beneficiary of such Letter of Credit and (E) form of such
Letter of Credit, and shall be accompanied by such Issuing Banks's application
and agreement for letter of credit in substantially the form of Exhibits N and O
hereto (a "Letter of Credit Agreement"). If (x) the requested form of such
Letter of Credit is acceptable to the requested Issuing Bank in its reasonable
discretion, and (y) such Issuing Bank has not received notice of any reasonable
objection to the form of such Letter of Credit from the Funding Agent or Lenders
holding in the aggregate a majority in interest of the Working Capital
Commitments, such Issuing Bank will, upon satisfaction of the applicable
conditions set forth in Article III, make such Letter of Credit available to the
Borrower at the office of such Issuing Bank referred to in Section 8.02 or as
otherwise agreed with the Borrower in connection with such issuance. For
purposes of determining the satisfaction of the applicable conditions set forth
in Article III in connection with the issuance of any Letter of Credit
hereunder, each Issuing Bank (i) shall not have any duty to ascertain or to
inquire as to the performance or observance of any of the terms, covenants or
conditions of any Loan Document on the part of any Loan Party and (ii) shall
incur no liability under or in respect of any Loan Document by acting upon any
notice, consent, certificate or other instrument or writing (which may be by
telegram, telecopy, cable or telex) believed by it to be genuine and signed or
sent by the proper party or parties.
(ii) Each Issuing Bank shall furnish (A) to the Funding Agent
on the first Business Day of each week a written report summarizing issuance and
expiration dates of Letters of Credit issued by such Issuing Bank during the
previous week and drawings during such week under all Letters of Credit issued
by such Issuing Bank, (B) to each Lender on the first Business Day of each month
a written report summarizing issuance and expiration dates of Letters of Credit
issued by such Issuing Bank during the preceding month and drawings during such
month under all Letters of Credit issued by such Issuing Bank and setting forth
each Lender's participation therein, (C) to the Funding Agent and each Lender on
the first Business Day of each calendar quarter a written report setting forth
the average daily aggregate Available Amount during the preceding calendar
quarter of all Letters of Credit issued by such Issuing Bank and (D) to each
Lender on the first Business Day of each calendar quarter a copy of each Letter
of Credit issued by such Issuing Bank during the preceding calendar quarter.
(c) Drawing and Reimbursement. The payment by any Issuing Bank
of a draft drawn under any Letter of Credit issued shall constitute for all
purposes of this Agreement the making by such Issuing Bank of a Letter of Credit
Advance, which shall be a Base Rate Advance, in the amount of such draft (but
without any requirement for compliance with the provisions of Sections 2.01 and
2.02 or the conditions set forth in Article III). Upon written demand by any
Issuing Bank with an outstanding Letter of Credit Advance, with a copy of such
demand to the Funding Agent, each Lender shall, until the Termination Date,
purchase from such Issuing Bank, and such Issuing Bank shall sell and assign to
each such Lender, such Lender's Pro Rata Share of such outstanding Letter of
Credit Advance as of the date of such purchase, by making available for the
account of its Applicable Lending Office to the Funding Agent for the account of
such Issuing Bank, by deposit to the Funding Agent's Account, in same day funds,
an amount equal to the portion of the outstanding principal amount of such
Letter of Credit Advance to be purchased by such Lender. Promptly after receipt
thereof, the Funding Agent shall transfer such funds to such Issuing Bank. The
Borrower hereby agrees to each such sale and assignment. Each Lender agrees to
purchase its Pro Rata Share of an outstanding Letter of Credit Advance on (i)
the Business Day on which demand therefor is made by the Issuing Bank which made
such Advance, provided notice of such demand is given not later than 11:00 A.M.
(New York City time) on such Business Day or (ii) the first Business Day next
succeeding such demand if notice of such demand is given after such time. Upon
any such assignment by an Issuing Bank to any other Lender of a portion of a
Letter of Credit Advance, such Issuing Bank represents and warrants to such
other Lender that such Issuing Bank is the legal and beneficial owner of such
interest being assigned by it, free and clear of any liens, but makes no other
representation or warranty and assumes no responsibility with respect to such
Letter of Credit Advance, the Loan Documents or any Loan Party. If and to the
extent that any Lender shall not have so made the amount of such Letter of
Credit Advance available to the Funding Agent, such Lender and the Borrower
severally agree to pay to the Funding Agent, not later than 12:00 Noon (New York
City time) on demand, such amount together with interest thereon, for each day
from the date of demand by such Issuing Bank until the date such amount is paid
to the Funding Agent, at (i) in the case of the Borrower, the interest rate
applicable at such time under Section 2.06 to Base Rate Advances and (ii) in the
case of such Lender, the Federal Funds Rate. If such Lender shall pay to the
Funding Agent such amount, such amount so paid shall constitute such Lender's
Letter of Credit Advance for purposes of this Agreement, and the outstanding
principal amount of the Letter of Credit Advance made by such Issuing Bank shall
be reduced by such amount on such Business Day. The failure of any Lender to
make the Letter of Credit Advance to be made by it on the date specified in
Section 2.13(c) shall not relieve any other Lender of its obligation hereunder
to make its Letter of Credit Advance on such date, but no Lender shall be
responsible for the failure of any other Lender to make the Letter of Credit
Advance to be made by such other Lender on such date.
(d) Increased Costs. If any change occurring after the Closing
Date in any law or regulation or in the interpretation thereof by any court or
administrative or governmental authority of competent jurisdiction charged with
the administration thereof shall either (i) impose, modify or deem applicable
any reserve, special deposit or similar requirement against letters of credit or
guarantees issued by, or assets held by, or deposits in or for the account of,
any Issuing Bank or any Lender or (ii) other than matters covered by Section
2.11, impose on any Issuing Bank or any Lender any other condition regarding
this Agreement or such Lender or any Letter of Credit, and the result of any
event referred to in the preceding clause (i) or (ii) shall be to increase the
cost to any Issuing Bank of issuing or maintaining any Letter of Credit or to
any Lender of purchasing any participation therein, then, upon demand by such
Issuing Bank or such Lender, the Borrower shall immediately pay to such Issuing
Bank or such Lender, from time to time as specified by such Issuing Bank or such
Lender, additional amounts that shall be sufficient to compensate such Issuing
Bank or such Lender for such increased cost (but without duplication of any
amounts payable under Section 2.11). A certificate as to the amount of such
increased cost, setting forth the basis thereof in reasonable detail and
submitted to the Borrower by such Issuing Bank or such Lender, shall be
conclusive and binding for all purposes, absent manifest error.
(e) Repayment and Obligations Absolute. (i) The Borrower shall
repay to the Funding Agent for the account of each Issuing Bank and each other
Lender that has made a Letter of Credit Advance on the earlier of one Business
Day following demand and the Termination Date the outstanding principal amount
of each Letter of Credit Advance made by each of them.
(ii) The Obligations of the Borrower relating to any Letter of
Credit under this Agreement and any other agreement or instrument shall, to the
extent permitted by law, be unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement and such other agreement
or instrument under all circumstances, including, without limitation, the
following circumstances:
(A) any lack of validity or enforceability of this Agreement,
any Letter of Credit, and Letter of Credit Agreement or any other
agreement or instrument relating thereto (collectively, the "L/C
Related Documents");
(B) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations of the Borrower in
respect of the Letters of Credit or any other amendment or waiver of or
any consent to departure from all or any of the L/C Related Documents;
(C) the existence of any claim, set-off, defense or other
right that the Borrower may have at any time against any beneficiary or
any transferee of a Letter of Credit (or any Person for whom any such
beneficiary or any such transferee may be acting), any Issuing Bank or
any other Person, whether in connection with this Agreement, the
transactions contemplated hereby or by the L/C Related Documents or any
unrelated transaction;
(D) any statement or any other document presented under a
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;
(E) payment by any Issuing Bank under a Letter of Credit
against presentation of a draft or certificate that does not comply
with the terms of the Letter of Credit;
(F) any exchange, release or non-perfection of any Collateral
or other collateral, or any release or amendment or waiver of or
consent to departure from the Guaranty or any other guarantee, for all
or any of the Obligations of the Borrower in respect of the Letters of
Credit; or
(G) any other circumstances or happening whatsoever, whether
or not similar to any of the foregoing, including, without limitation,
any other circumstances that might otherwise constitute a defense
available to, or a discharge of, the Borrower or a guarantor;
provided, however, that the payment by the Borrower of any Obligation relating
to any Letter of Credit or any L/C Related Document shall not constitute a
waiver by the Borrower of any claims it may have with respect to any of the
matters set forth in clauses (A) through (G) above or otherwise.
(f) Compensation. (i) The Borrower shall pay to the Funding
Agent for the account of each Working Capital Lender a commission on the average
daily aggregate Available Amount of all Letters of Credit outstanding during the
quarter ended on such date at the rate per annum equal to the Applicable Margin
payable quarterly in arrears on the last day of each March, June, September and
December, commencing June 1996, and on the Termination Date, provided that upon
the occurrence and during the continuance of an Event of Default, the Borrower
shall pay the Funding Agent for the account of each Working Capital Lender a
commission on the average daily aggregate Available Amount of all Letters of
Credit outstanding during the quarter ended on such date at a rate per annum
equal to the Applicable Margin plus 2% payable quarterly in arrears on the dates
set forth above.
(ii) The Borrower shall pay to each Issuing Bank, for its own
account, an administrative fee in an amount equal to 1/4 of 1% per annum of the
Available Amount of each Letter of Credit issued by such Issuing Bank, payable
quarterly in arrears on the last day of each March, June, September and
December, commencing June 1996, and on the date of the full drawing, expiration,
termination or cancellation of the last of such Letters of Credit to remain
outstanding.
(iii) The Borrower shall pay to each Issuing Bank, for its own
account, such issuance fees, transfer fees and amendment, payment and other fees
and charges in connection with the issuance of each Letter of Credit as the
Borrower and such Issuing Bank shall agree.
SECTION 2.14. Use of Proceeds. The proceeds of all Working
Capital Advances and Swing Line Advances shall be available (and the Borrower
agrees that such proceeds shall be used) solely to provide working capital for
Flagstar and its Restricted Subsidiaries.
SECTION 2.15. Defaulting Lenders. (a) In the event that, at
any one time, (i) any Lender Party shall be a Defaulting Lender, (ii) such
Defaulting Lender shall owe a Defaulted Advance to the Borrower and (iii) the
Borrower shall be required to make any payment hereunder or under any other Loan
Document to or for the account of such Defaulting Lender, then the Borrower may,
so long as no Default shall occur or be continuing at such time and to the
fullest extent permitted by applicable law, set off and otherwise apply the
Obligation of the Borrower to make such payment to or for the account of such
Defaulting Lender against the obligation of such Defaulting Lender to make such
Defaulted Advance. In the event that, on any date, the Borrower shall so set off
and otherwise apply its obligation to make any such payment against the
obligation of such Defaulting Lender to make any such Defaulted Advance on or
prior to such date, the amount so set off and otherwise applied by the Borrower
shall constitute for all purposes of this Agreement and the other Loan Documents
an advance by such Defaulting Lender made on the date under the Facility
pursuant to which such Defaulted Advance was originally required to have been
made pursuant to Section 2.01. Such Advance shall be a Base Rate Advance and
shall be considered, for all purposes of this Agreement, to comprise part of the
Borrowing in connection with which such Defaulted Advance was originally
required to have been made pursuant to Section 2.01, even if the other Advances
comprising such Borrowing shall be Eurodollar Rate Advances on the date such
Advance is deemed to be made pursuant to this subsection (a). The Borrower shall
notify the Funding Agent at any time the Borrower exercises its right of set-off
pursuant to this subsection (a) and shall set forth in such notice (A) the name
of the Defaulting Lender and the Defaulted Advance required to be made by such
Defaulting Lender and (B) the amount set off and otherwise applied in respect of
such Defaulted Advance pursuant to this subsection (a). Any portion of such
payment otherwise required to be made by the Borrower to or for the account of
such Defaulting Lender which is paid by the Borrower, after giving effect to the
amount set off and otherwise applied by the Borrower pursuant to this subsection
(a), shall be applied by the Agent as specified in subsection (b) or (c) of this
Section 2.15.
(b) In the event that, at any one time, (i) any Lender Party
shall be a Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted
Amount to the Funding Agent or any of the other Lender Parties and (iii) the
Borrower shall make any payment hereunder or under any other Loan Document to
the Funding Agent for the account of such Defaulting Lender, then the Funding
Agent may, on its behalf or on behalf of such other Lender Parties and to the
fullest extent permitted by applicable law, apply at such time the amount so
paid by the Borrower to or for the account of such Defaulting Lender to the
payment of each such Defaulted Amount to the extent required to pay such
Defaulted Amount. In the event that the Funding Agent shall so apply any such
amount to the payment of any such Defaulted Amount on any date, the amount so
applied by the Funding Agent shall constitute for all purposes of this Agreement
and the other Loan Documents payment, to such extent, of such Defaulted Amount
on such date. Any such amount so applied by the Funding Agent shall be retained
by the Funding Agent or distributed by the Funding Agent to such other Lender
Parties, ratably in accordance with the respective portions of such Defaulted
Amounts payable at such time to the Funding Agent and such other Lender Parties
and, if the amount of such payment made by the Borrower shall at such time be
insufficient to pay all Defaulted amounts owing at such time to the Funding
Agent and the other Lender Parties, in the following order or priority:
(i) first, to the Funding Agent for any Defaulted Amount then
owing to the Funding Agent; and
(ii) second, to any other Lender Parties for any Defaulted
Amounts then owing to such other Lender Parties, ratably in accordance
with such respective Defaulted Amounts then owing to such other Lender
Parties.
Any portion of such amount paid by the Borrower for the account of such
Defaulting Lender remaining, after giving effect to the amount applied by the
Funding Agent pursuant to this subsection (b), shall be applied by the Funding
Agent as specified in subsection (c) of this Section 2.15.
(c) In the event that, at any one time, (i) any Lender Party
shall be a Defaulting Lender, (ii) such Defaulting Lender shall not owe a
Defaulted Advance or a Defaulted Amount and (iii) the Borrower, the Funding
Agent or any other Lender Party shall be required to pay or distribute any
amount hereunder or under any other Loan Document to or for the account of such
Defaulting Lender, then the Borrower or such other Lender Party shall pay such
amount to the Funding Agent to be held by the Funding Agent to the fullest
extent permitted by applicable law, in escrow or the Funding Agent shall, to the
fullest extent permitted by applicable law, hold in escrow such amount otherwise
held by it. Any funds held by the Funding Agent in escrow under this subsection
(c) shall be deposited by the Agent in an account with Citibank, in the name and
under the control of the Funding Agent, but subject to the provisions of this
subsection (c). The terms applicable to such account, including the rate of
interest payable with respect to the credit balance of such account from time to
time, shall be Citibank's standard terms applicable to escrow accounts
maintained with it. Any interest credited to such account from time to time
shall be held by the Funding Agent in escrow under, and applied by the Funding
Agent from time to time in accordance with the provisions of, this subsection
(c). The Funding Agent shall, to the fullest extent permitted by applicable law,
apply all funds so held in escrow from time to time to the extent necessary to
make any Advances required to be made by such Defaulting Lender and to pay any
amount payable by such Defaulting Lender hereunder and under the other Loan
Documents to the Funding Agent or any other Lender Party, as and when such
Advances or amounts are required to be made or paid and, if the amount so held
in escrow shall at any time be insufficient to make and pay all such Advances
and amounts required to be made or paid at such time, in the following order of
priority:
(i) first, to the Funding Agent for any amount then due and
payable by such Defaulting Lender to the Funding Agent hereunder;
(ii) second, to any other Lender Parties for any amount then
due and payable by such Defaulting Lender to such other Lender Parties
hereunder, ratably in accordance with such respective amounts then due
and payable to such other Lender Parties; and
(iii) third, to the Borrower for any Advance then required to
be made by such Defaulting Lender pursuant to a Commitment of such
Defaulting Lender.
In the event that any Lender Party that is a Defaulting Lender shall, at any
time cease to be a Defaulting Lender, any funds held by the Funding Agent in
escrow at such time with respect to such Lender Party shall be distributed by
the Funding Agent to such Lender Party and applied by such Lender Party to the
Obligations owing to such Lender Party at such time under this Agreement and the
other Loan Documents ratably in accordance with the respective amounts of such
Obligations outstanding at such time.
(d) The rights and remedies against a Defaulting Lender under
this Section 2.15 are in addition to any and all other rights and remedies that
the Borrower may have
against such Defaulting Lender with respect to any Defaulted Advance and that
the Funding Agent or any Lender Party may have against such Defaulting Lender
with respect to any Defaulted Amount.
ARTICLE III
CONDITIONS PRECEDENT
SECTION 3.01. Conditions Precedent to Closing Date. The
amendment and restatement of the Existing Credit Agreement pursuant hereto shall
become effective on and as of the date (the "Closing Date"), which shall occur
on or prior to April 30, 1996, on which each of the following conditions
precedent shall have been satisfied or duly waived:
(a) The Assignment Agreement shall be in full force and effect
and shall not have been terminated and, pursuant thereto, the
Commitments and Advances (as defined in the Existing Credit Agreement)
of each Existing Lender shall have been sold and assigned to the Second
Restatement Lenders hereunder on the terms and in the amounts set forth
in the Assignment Agreement.
(b) The Lender Parties shall be satisfied with the corporate
and legal structure and capitalization of Flagstar and the Borrower,
including the terms and conditions of the charter, bylaws and each
class of capital stock of Flagstar and the Borrower and of each
agreement or instrument relating to such structure or capitalization.
(c) Except as previously disclosed to the Lender Parties in
writing, there shall have occurred no Material Adverse Change since
December 31, 1995.
(d) The representations and warranties contained in each Loan
Document shall be correct as though made on and as of the Closing Date.
(e) No event shall have occurred and be continuing that
constituted a Default under (and as defined in) the Existing Credit
Agreement or constitutes a Default hereunder.
(f) There shall exist no action, suit, investigation,
litigation or proceeding affecting any Loan Party or any of their
Subsidiaries pending or threatened before any court, governmental
agency or arbitrator that (A) is reasonably likely to have a Material
Adverse Effect, other than the Disclosed Litigation or (B) purports to
affect the legality, validity or enforceability of this Agreement, any
Note, any other Loan Document, any Related Document or the consummation
of the transactions
contemplated hereby, and there shall have been no material adverse
change in the status, or financial effect on any Significant Subsidiary
Group or on Flagstar and its Restricted Subsidiaries taken as a whole
of any Disclosed Litigation from that described on Schedule 4.01(i).
(g) The Borrower shall have paid all accrued fees of the
Co-Administrative Agents, the Funding Agent and the Lender Parties and
all accrued expenses of the Co-Administrative Agents and the Funding
Agent (including all agency and unused commitment fees under the
Existing Credit Agreement and the reasonable accrued fees and expenses
of counsel to the Funding Agent and special trademark counsel to the
Lender Parties).
(h) The Funding Agent shall have received on or before the
Closing Date the following, each dated the Closing Date (unless
otherwise specified), in form and substance satisfactory to the Funding
Agent (unless otherwise specified) and (except for the Notes) in
sufficient copies for each Second Restatement Lender:
(i) The Notes to the order of such Second Restatement
Lender.
(ii) An amended and restated guaranty in
substantially the form of Exhibit D (as amended from time to
time in accordance with its terms, the "Guaranty"), duly
executed by Flagstar and each of its Restricted Subsidiaries
other than the Borrower, Denny's Realty, Quincy's Realty and
Spardee's Realty (collectively, the "Guarantors").
(iii) An amended and restated security agreement in
substantially the form of Exhibit E (as amended from time to
time in accordance with its terms, the "Security Agreement"),
duly executed by Flagstar and each of its Restricted
Subsidiaries other than Denny's Realty, Quincy's Realty and
Spardee's Realty, together with:
(A) certificates representing the Pledged
Shares referred to in the Security Agreement not
previously delivered to Citibank, as agent under the
Existing Credit Agreement, accompanied by undated
stock powers executed in blank and instruments
evidencing the Pledged Debt referred to in the
Security Agreement endorsed in blank,
(B) acknowledgment copies or stamped receipt
copies of proper amendments to financing statements,
duly filed on or before the Closing Date under the
Uniform Commercial Code of all jurisdictions that the
Funding Agent may deem necessary or desirable in
order to
perfect and protect the Liens created by the Security
Agreement, covering the Collateral described in the
Security Agreement in which Loan Parties have rights,
(C) completed requests for information,
dated on or before the Closing Date, listing the
financing statements referred to in clause (B) above
and all other effective financing statements filed in
the jurisdictions referred to in clause (B) above
that name any of the Loan Parties as debtor, together
with copies of such other financing statements,
(D) copies of the Assigned Agreements
referred to in the Security Agreement not previously
delivered to Citibank, as agent under the Existing
Credit Agreement, together with a consent to such
assignment, in substantially the form of Exhibit A to
the Security Agreement, duly executed by each party
to such Assigned Agreements other than Flagstar and
its Subsidiaries,
(E) the Restricted Account Letters referred
to in the Security Agreement not previously delivered
to Citibank, as agent under the Existing Credit
Agreement, duly executed by each Restricted Account
Bank referred to in the Security Agreement, and
(F) evidence of the completion of all other
recordings and filings of or with respect to the
Security Agreement that the Funding Agent may deem
necessary or desirable in order to perfect and
protect the Liens created thereby in the Collateral
described in the Security Agreement in which the Loan
Parties have rights.
(iv) An amended and restated trademark security
agreement in substantially the form of Exhibit I (as amended
from time to time in accordance with its terms, the "Trademark
Security Agreement"), duly executed by such Loan Parties as
the Funding Agent may request, together with:
(A) evidence of filings with the United
States Patent and Trademark Office with respect
thereto, and
(B) evidence that all other action that the
Funding Agent may deem necessary or desirable in
order to perfect and protect the Liens created by the
Trademark Security Agreement has been taken.
(v) An amended and restated subordination agreement
in substantially the form of Exhibit J (as amended from time
to time in accordance with its terms, the "Subordination
Agreement"), duly executed by FCI, Flagstar and each of its
Restricted Subsidiaries.
(vi) Certified copies of each of the Related
Documents, duly executed by the parties thereto, together with
all agreements, instruments and other documents delivered in
connection therewith.
(vii) A certificate, in form and substance
satisfactory to the Lender Parties, attesting to the Solvency
of Flagstar and its Subsidiaries taken as a whole from its
chief financial officer.
(viii) Certified copies of all necessary resolutions
of the Board of Directors of each Loan Party approving this
Agreement, the Notes and each other Loan Document to which it
is or is to be a party, and of all documents evidencing other
necessary corporate action and governmental approvals, if any,
with respect to this Agreement, the Notes and each other Loan
Document.
(ix) A certificate of each Loan Party, signed on
behalf of such Loan Party by its President or any Vice
President and its Secretary or any Assistant Secretary, dated
the Closing Date (the statements made in which certificate
shall be true on and as of the Closing Date), certifying as to
(A) a true and correct copy of the charter of such Loan Party
as in effect on the Closing Date, (B) a true and correct copy
of the bylaws of such Loan Party as in effect on the Closing
Date, (C) the due incorporation and good standing of such Loan
Party as a corporation organized under the laws of its state
of incorporation, and the absence of any proceeding for the
dissolution or liquidation of such Loan Party, (D) the truth
of the representations and warranties contained in the Loan
Documents as though made on and as of the Closing Date and (E)
the absence of any event continuing on the Closing Date that
constitutes a Default.
(x) A certificate of the Secretary or an Assistant
Secretary of each Loan Party certifying the names and true
signatures of the officers of such Loan Party authorized to
sign this Agreement, the Notes and each other Loan Document to
which it is or is to be a party and the other documents to be
delivered hereunder and thereunder.
(xi) A favorable opinion of Parker, Poe, Adams &
Bernstein L.L.P., counsel for the Loan Parties, in form and
substance reasonably satisfactory to the Lender Parties.
(xii) A favorable opinion of Pennie & Edmonds,
special trademark counsel to the Agents, in form and substance
reasonably satisfactory to the Lender Parties.
(xiii) A favorable opinion of Shearman & Sterling,
counsel for the Agents, in form and substance reasonably
satisfactory to the Lender Parties.
(j) The Funding Agent shall have received such other
approvals, opinions or documents as any Lender through the Funding
Agent may reasonably request.
SECTION 3.02. Conditions Precedent to Each Borrowing and
Issuance. The obligation of each Appropriate Lender to make an Advance on the
occasion of each Borrowing, and the right of the Borrower to request a Swing
Line Borrowing or the issuance or renewal of Letters of Credit, shall be subject
to the further conditions precedent that, on the date of such Borrowing,
issuance or renewal, the following statements shall be true (and each of the
giving of the applicable Notice of Borrowing, Notice of Swing Line Borrowing,
Notice of Issuance or request for renewal and the acceptance by the Borrower of
the proceeds of such Borrowing or of such Letter of Credit shall constitute a
representation and warranty by the Borrower that on the date of such Borrowing,
issuance or renewal such statements are true):
(i) the representations and warranties contained in each Loan
Document are correct on and as of such date, before and after giving
effect to such Borrowing, issuance or renewal and to the application of
the proceeds therefrom, as though made on and as of such date (other
than any such representations or warranties that, by their terms, are
made as of a date other than the date of such Borrowing, issuance or
renewal); and
(ii) no event has occurred and is continuing, or would result
from such Borrowing, issuance or renewal or from the application of the
proceeds therefrom, that constitutes a Default;
provided, however, that the obligation of each Lender to make an Advance (x)
pursuant to Section 2.02(b)(ii) or (y) pursuant to Section 2.13(c) shall be
absolute and unconditional and such Advance shall be made by such Lender
notwithstanding the failure of the Borrower to satisfy any condition set forth
in this Section 3.02.
SECTION 3.03. Determinations Under Section 3.01. For purposes
of determining compliance with the conditions specified in Section 3.01, each
Lender Party 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 the Lender Parties unless an
officer of the Funding Agent responsible for the transactions contemplated by
the Loan Documents shall have received written notice from such Lender Party
prior to the Closing Date.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of Flagstar.
Flagstar represents and warrants on the date hereof and on each date that such
representation and warranty is made or deemed made hereunder as follows:
(a) Each Loan Party (i) is a corporation duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation, (ii) is duly qualified as a foreign
corporation and is in good standing in each jurisdiction in which it
owns or leases property or in which the conduct of its business
requires it to so qualify or be licensed (except for jurisdictions in
which the failure to so qualify or be in good standing would not be
reasonably likely to have a Material Adverse Effect) and (iii) has all
requisite corporate power and authority to own or lease and operate its
properties and to carry on its business as now conducted and as
proposed to be conducted. All of the outstanding capital stock of
Flagstar has been validly issued, is fully paid and (except as
otherwise required by applicable law) non-assessable and is owned by
FCI free and clear of all Liens.
(b) Set forth on Schedule 4.01(b) hereto is a complete and
accurate list as of the Closing Date of all of the Subsidiaries of each
Loan Party, showing as of such date (as to each such Subsidiary) the
jurisdiction of its incorporation, the number of shares of each class
of capital stock authorized, and the number issued and outstanding, on
such date and the percentage of the outstanding shares of each such
class owned (directly or indirectly) by such Loan Party and the number
of shares covered by all outstanding options, warrants, rights of
conversion or purchase and similar rights at such date. All of the
outstanding capital stock of all of such Subsidiaries has been validly
issued, is fully paid and (except as otherwise required by applicable
law) non-assessable and is owned by such Loan Party or one or more of
its Subsidiaries free and clear of all Liens, except those created by
the Collateral Documents and those described on Schedule 5.02(a). Each
such Subsidiary (i) is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified as a foreign corporation and is
in good standing in each jurisdiction in which it owns or leases
property or in which the conduct of its business requires it to so
qualify or be licensed (except for jurisdictions in which the failure
to do so would have a Material Adverse Effect) and (iii) has all
requisite corporate power and authority to own or lease and operate its
properties and to carry on its business as now conducted and as
proposed to be conducted.
(c) The execution, delivery and performance by each Loan Party
of this Agreement, the Notes, each other Loan Document and each Related
Document to which it is or is to be a party, and the consummation of
the other transactions contemplated hereby and thereby, are within such
Loan Party's corporate powers, have been duly authorized by all
necessary corporate action on the part of such Loan Party, and do not
(i) contravene such Loan Party's charter or by-laws, (ii) violate any
law (including, without limitation, the Securities Exchange Act of
1934, as amended), rule, regulation (including, without limitation,
Regulation X of the Board of Governors of the Federal Reserve System,
as in effect from time to time), order, writ, judgment, injunction,
decree, determination or award applicable to any Loan Party, (iii)
except as set forth on Schedule 4.01(c), conflict with or result in the
breach of, or constitute a default under, any contract, loan agreement,
indenture, mortgage, deed of trust, lease or other instrument binding
on or affecting any Loan Party, any of its Subsidiaries or any of their
properties or (iv) result in or require the creation or imposition of
any Lien (other than Liens created by or permitted under the Loan
Documents) upon or with respect to any of the properties of any Loan
Party or any of its Subsidiaries except, as to (ii) and (iii) above, as
would not, and would not be reasonably likely to, have a Material
Adverse Effect. No Loan Party is in violation of any such law, rule,
regulation, order, writ, judgment, injunction, decree, determination or
award or in breach of any such contract, loan agreement, indenture,
mortgage, deed of trust, lease or other instrument, the violation or
breach of which is reasonably likely to have a Material Adverse Effect.
(d) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body
or any other third party is required for (i) the due execution,
delivery, recordation, filing or performance by any Loan Party of this
Agreement, the Notes, any other Loan Document or any Related Document
to which it is or is to be a party, or the other transactions
contemplated hereby, (ii) the grant by any Loan Party of the Liens
granted by it pursuant to the Collateral Documents, (iii) the
perfection or maintenance of the Liens granted by any Loan Party
pursuant to the Collateral Documents (including the first priority
nature thereof) or (iv) the exercise by the Funding Agent or any Lender
Party of its rights under the Loan Documents or the remedies in respect
of the Collateral pursuant to the
Collateral Documents, except for matters referred to in clauses (A)
through (D) of Section 9(h) of the Security Agreement and the
authorizations, approvals, actions, notices and filings listed on
Schedule 4.01(d), and those which have been duly obtained, taken, given
or made and are in full force and effect.
(e) This Agreement has been, and each of the Notes, each other
Loan Document and each Related Document when delivered hereunder will
have been, duly executed and delivered by each Loan Party party
thereto. This Agreement is, and each of the Notes, each other Loan
Document and each Related Document when delivered hereunder will be,
the legal, valid and binding obligation of each Loan Party party
thereto, enforceable against such Loan Party in accordance with its
terms.
(f) The Consolidated balance sheets of Flagstar and its
Subsidiaries as at December 31, 1995, and the related Consolidated
statements of income and cash flows of Flagstar and its Subsidiaries
for the fiscal year then ended, certified by Deloitte & Touche,
independent public accountants, copies of which have been furnished to
each Lender Party, fairly present, the Consolidated financial condition
of Flagstar and its Subsidiaries and of the Significant Subsidiary
Groups, as the case may be, as at such date and the Consolidated
results of the operations and cash flows of Flagstar and its
Subsidiaries and of the Significant Subsidiary Groups for the period
ended on such date, all in accordance with generally accepted
accounting principles.
(g) Except as disclosed in writing to the Second Restatement
Lenders prior to the Closing Date, since December 31, 1995, there has
been no Material Adverse Change.
(h) No information, exhibit or report furnished by or on
behalf of any Loan Party to the Funding Agent or any Lender Party in
the Information Memorandum dated February, 1996 or in connection with
the negotiation of the Loan Documents or pursuant to the terms of the
Loan Documents (in each case after giving effect to revisions and
updates furnished by or on behalf of such Loan Party to the Funding
Agent or such Lender Party in accordance with the terms of the Loan
Documents) contained any untrue statement of material fact or omitted
to state a material fact required or necessary to make the statements
contained therein not misleading, except the forecasted financial
statements contained in such materials are based upon good faith
estimates and assumptions believed to be reasonable at the time made,
it being recognized by the Lender Parties that such forecasted
financial statements as to future events are not to be viewed as facts
and that actual results during the period or periods covered by such
forecasted financial statements may differ from the forecasted results.
(i) Except for the Disclosed Litigation, there is no action,
suit, investigation, litigation or proceeding affecting any Loan Party
or any of their respective Subsidiaries, pending, and to Flagstar's
best knowledge, there is no such action, suit, investigation,
litigation or proceeding threatened, before any court, governmental
agency or arbitrator that has had or is reasonably likely to have a
Material Adverse Effect or that purports to affect the legality,
validity or enforceability against any of the Loan Parties or their
respective Subsidiaries of this Agreement, the Notes, any other Loan
Document or any Related Document the consummation of the transactions
contemplated hereby and thereby and there has been no material adverse
change in the status, or financial effect on any Significant Subsidiary
Group or on Flagstar and its Subsidiaries taken as a whole, of any
Disclosed Litigation from that described in Schedule 4.01(i).
(j) Neither Flagstar nor any other Loan Party is engaged in
the business of extending credit for the purpose of purchasing or
carrying Margin Stock. No proceeds of any Advance will be used to
purchase or carry any Margin Stock or to extend credit to others for
the purpose of purchasing or carrying any Margin Stock.
(k) No ERISA Event (i) has occurred that resulted in a
material liability that has not been satisfied or (ii) is reasonably
expected to occur with respect to any Plan where such ERISA Event
would, or would be reasonably likely to, have a Material Adverse
Effect.
(l) As of the last annual actuarial valuation date, the funded
current liability percentage, as defined in Section 302(d)(8) of ERISA,
of each Plan exceeds 90% and there has been no material adverse change
in the funding status of any such Plan since such date.
(m) Schedule B (Actuarial Information) to the most recent
annual report (Form 5500 Series) for each Plan of any Loan Party or any
ERISA Affiliate, copies of which have been filed with the Internal
Revenue Service and furnished to the Lender Parties, is complete and
accurate and fairly presents as of the date of such Schedule B the
funding status of such Plan, and since the date of such Schedule B
there has been no change in such funding status that has had or is
reasonably expected to have a Material Adverse Effect.
(n) None of the Loan Parties nor any ERISA Affiliate has
incurred any Withdrawal Liability to any Multiemployer Plan that has
had, or is reasonably expected to have, a Material Adverse Effect.
(o) None of the Loan Parties nor any ERISA Affiliate has been
notified by the sponsor of a Multiemployer Plan of any Loan Party or an
ERISA Affiliate that such Multiemployer Plan is in reorganization or
has been terminated, within the
meaning of Title IV of ERISA, or is reasonably expected to be in
reorganization or to be terminated, within the meaning of Title IV of
ERISA, where such reorganization or termination has had, or is
reasonably expected to have, a Material Adverse Effect.
(p) Except as set forth in the financial statements referred
to in this Section 4.01 and in Section 5.03, the Loan Parties and their
respective Subsidiaries have no material liability with respect to
"expected post retirement benefit obligations" within the meaning of
Statement of Financial Accounting Standards No.
106.
(q) Neither the business nor the properties of Flagstar or any
of its Subsidiaries is affected by any fire, explosion, accident,
strike, lockout or other labor dispute, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy or other
casualty (whether or not covered by insurance) that has had, or is
reasonably likely to have, a Material Adverse Effect.
(r) The operations and properties of each Loan Party and each
of its Subsidiaries comply with all applicable Environmental Laws and
Environmental Permits, and all past non-compliance with such
Environmental Laws and Environmental Permits has been resolved without
ongoing obligations or costs, except where such failure to comply and
such obligations and costs have not had, and are not reasonably
expected to have, individually or in the aggregate, a Material Adverse
Effect and no circumstances exist that would be reasonably likely to
(i) form the basis of an Environmental Action against any Loan Party or
any of its Subsidiaries or any of their properties that is reasonably
likely to have a Material Adverse Effect or (ii) cause any such
property to be subject to any material restrictions on ownership,
occupancy, use or transferability under any Environmental Law.
(s) Except as has not had and is not reasonably expected to
have, individually or in the aggregate, a Material Adverse Effect, none
of the properties currently or, to the best knowledge of each Loan
Party and its Subsidiaries, formerly owned or operated by any Loan
Party or any of its Subsidiaries is listed or proposed for listing on
the NPL or on the CERCLIS or any analogous foreign, state or local list
or, to the best knowledge of each Loan Party and its Subsidiaries, is
adjacent to any such property; there are no and never have been any
underground or aboveground storage tanks or any surface impoundments,
septic tanks, pits, sumps or lagoons in which Hazardous Materials are
being or have been treated, stored or disposed on any property
currently owned or operated by any Loan Party or any of its
Subsidiaries or, to the best of its knowledge, on any property formerly
owned or operated by any Loan Party or any of its Subsidiaries; there
is no asbestos or asbestos-containing material on any property
currently owned or operated by any Loan Party or any of its
Subsidiaries; and Hazardous Materials have not been released,
discharged or disposed of on any property currently or, to the best
knowledge of each Loan Party and its Subsidiaries, formerly owned or
operated by any Loan Party or any of its Subsidiaries. For purposes of
this Section 4.01(s), "knowledge of each Loan Party and its
Subsidiaries" means the knowledge of any current officer or plant
manager of a Loan Party or any of its Subsidiaries, or of any current
employee of a Loan Party or any of its Subsidiaries who is an
environmental manager.
(t) Neither any Loan Party nor any of its Subsidiaries is
undertaking, and has not completed, either individually or together
with other potentially responsible parties, any investigation or
assessment or remedial or response action relating to any actual or
threatened release, discharge or disposal of Hazardous Materials at any
site, location or operation, either voluntarily or pursuant to the
order of any governmental or regulatory authority or the requirements
of any Environmental Law, that has had or is reasonably expected to
have a Material Adverse Effect.
(u) No Loan Party is a party to any indenture, loan or credit
agreement or any lease or other agreement or instrument or subject to
any charter or corporate restriction that is reasonably likely to have
a Material Adverse Effect.
(v) Each Loan Party and each of their respective Subsidiaries
and Affiliates has filed all tax returns (Federal, state, local and
foreign) required to be filed (except, in the case of state, local and
foreign tax returns, where the failure to file would not have a
Material Adverse Effect) and has paid all taxes shown to be due on all
returns so filed, including interest and penalties.
(w) Set forth on Schedule 4.01(w) hereto is a complete and
accurate list, as of the date hereof, of each taxable year of Flagstar,
the Borrower and each of their Subsidiaries and Affiliates for which
Federal income tax returns have been filed and for which the expiration
of the applicable statute of limitations for assessment or collection
has not occurred by reason of extension or otherwise (an "Open Year").
(x) The aggregate unpaid amount, as of the date hereof, of
adjustments to the Federal income tax liability (exclusive of
applicable penalties and interest) of Flagstar, the Borrower and each
of their Subsidiaries and Affiliates proposed by the Internal Revenue
Service with respect to Open Years does not exceed $13,000,000. Set
forth on Schedule 4.01(x) hereto is a complete and accurate
description, as of the date hereof, of each proposed adjustment to
Federal taxable income comprising a portion of such proposed unpaid
Federal income tax liability that separately, for all such Open Years,
would result in an increase of taxable income of $5,000,000 or more.
Other than as set forth on Schedule 4.01(x), no issues have been raised
by the Internal Revenue Service in respect of Open Years that, in the
aggregate, would be reasonably likely to have a Material Adverse
Effect.
(y) The aggregate unpaid amount, as of the date hereof, of
adjustments to the state, local and foreign tax liability (exclusive of
applicable penalties and interest) of Flagstar and its Subsidiaries and
Affiliates proposed by all state, local and foreign taxing authorities
(other than amounts arising from adjustments to Federal income tax
returns) does not exceed $2,000,000. Other than as set forth on
Schedule 4.01(x), no issues have been raised by such taxing authorities
that, in the aggregate, would be reasonably likely to have a Material
Adverse Effect.
(z) Neither any Loan Party nor any of their respective
Subsidiaries 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. Neither the making of any Advances, nor the issuance of any
Letters of Credit, nor the application of the proceeds or repayment
thereof by the Borrower, nor the consummation of the other transactions
contemplated hereby will violate any provision of such Act or any rule,
regulation or order of the Securities and Exchange Commission
thereunder.
(aa) Each Loan Party is Solvent.
(bb) Set forth on Schedule 4.01(bb) hereto is a complete and
accurate list of all Existing Debt, showing as of the date specified on
such Schedule the principal amount outstanding thereunder.
(cc) The Collateral Documents create a valid and perfected
first priority security interest in the Collateral, securing the
payment of the Secured Obligations, and all filings and other actions
necessary or desirable to perfect and protect such security interest
have been duly taken. The Loan Parties are the legal and beneficial
owners of the Collateral free and clear of any Lien, except for the
liens and security interests created or permitted under the Loan
Documents.
(dd) Each of Denny's Realty, Quincy's Realty and Spardee's
Realty engages in no business other than the acquisition, leasing and
financing of real property, improvements and personalty comprising
restaurants, and other activities incident to, connected with or
necessary or convenient to the foregoing.
(ee) None of the Restricted Subsidiaries other than the Loan
Parties is the owner (other than as a licensee) of any property of the
type described in the definition of Trademark Collateral (as defined in
the Security Agreement) in any material amount.
ARTICLE V
COVENANTS OF FLAGSTAR
SECTION 5.01. Affirmative Covenants. So long as any Advance or
Letter of Credit shall be outstanding or any Lender Party shall have any
Commitment hereunder, Flagstar will:
(a) Compliance with Laws, Etc. Comply, and cause each of its
Restricted Subsidiaries to comply, in all material respects, with all
applicable laws, rules, regulations and orders (such compliance to
include, without limitation, compliance with ERISA and all applicable
Environmental Laws), except where the failure so to comply would not,
and would not be reasonably likely to, have a Material Adverse Effect.
(b) Payment of Taxes, Etc. Pay and discharge, and cause each
of its Restricted Subsidiaries to pay and discharge, before any penalty
or interest shall accrue thereon, (i) all taxes, assessments and
governmental charges or levies imposed upon it or upon its property and
(ii) all lawful claims that, if unpaid, might by law become a Lien upon
its property; provided, however, that neither Flagstar nor any of its
Restricted Subsidiaries shall be required to pay or discharge any such
tax, assessment, charge, levy or claim that is being contested in good
faith and by proper proceedings and as to which appropriate reserves
are being maintained, unless and until any Lien resulting therefrom
attaches to its property and becomes enforceable against other
creditors.
(c) Maintenance of Insurance. Maintain, and cause each of its
Restricted Subsidiaries to maintain, insurance with responsible and
reputable insurance companies or associations in such amounts and
covering such risks as is consistent with prudent business practice for
comparable companies in the industry; provided, however, that Flagstar
and its Restricted Subsidiaries may self-insure, pursuant to policies
adopted by the Board of Directors of Flagstar and reviewed at least
once annually, to the extent determined in good faith by senior
management of Flagstar and its Restricted Subsidiaries, to be
consistent with prudent business practice, in the best interests of
Flagstar and its Restricted Subsidiaries and not materially adverse to
the rights and interests of the Funding Agent and the Lender Parties
under this Agreement and the other Loan Documents.
(d) Preservation of Corporate Existence, Etc. Preserve and
maintain, and cause each of its Restricted Subsidiaries to preserve and
maintain, its corporate existence, rights (charter and statutory) and
franchises, except (i) in the case of any Restricted Subsidiary of
Flagstar (other than First-Tier Subsidiaries), as permitted pursuant to
Section 5.02(d) or (ii) where the failure to maintain such existence
(in the case of any Restricted Subsidiary that is not a Loan Party) or
such rights and franchises (in the case of Flagstar or any of its
Restricted Subsidiaries) would not, and would not be reasonably likely
to, have a Material Adverse Effect.
(e) Visitation Rights. From time to time, at any reasonable
time, permit each of the Funding Agent, any of the Lender Parties, and
any agents or representatives thereof, to examine and make copies of
and abstracts from the records and books of account of, and visit the
properties of, Flagstar or any of its Restricted Subsidiaries, and to
discuss the affairs, finances and accounts of Flagstar or any of its
Restricted Subsidiaries with any of their officers or directors and
with their independent certified public accountants and, at the request
of the Co-Administrative Agents, participate in an annual meeting of
the Co-Administrative Agents and the Lender Parties to be held at such
place and time as may be agreed to by Flagstar and the
Co-Administrative Agents.
(f) Keeping of Books. Keep, and cause each of its Restricted
Subsidiaries to keep, appropriate books of record and account, in which
shall be recorded all financial transactions and the assets and
business of Flagstar and each such Restricted Subsidiary in accordance
with GAAP.
(g) Maintenance of Properties, Etc. Maintain and preserve, and
cause each of its Restricted Subsidiaries to maintain and preserve, all
of their respective properties that are used or useful in the conduct
of their respective businesses in good working order and condition,
ordinary wear and tear excepted, except where the failure so to
maintain and preserve such properties would not, and would not be
reasonably likely to, have a Material Adverse Effect.
(h) Compliance with Terms of Leaseholds and Franchise
Agreements. Make all payments and otherwise perform in all material
respects all obligations in respect of all leases of real property and
franchise agreements, maintain such leases and franchise agreements in
full force and effect and not allow such leases and franchise
agreements to lapse or be terminated prior to the end of the term
thereunder (provided, however, that neither Flagstar nor any of its
Restricted Subsidiaries shall be required to pay any amount under such
leases or franchise agreements that is being contested in good faith
and by proper proceedings and as to which appropriate reserves are
being maintained) or any rights to renew such leases and franchise
agreements or, in the case of leases, options to purchase the premises
demised thereby, to be forfeited or cancelled (except in accordance
with their terms), notify the Funding Agent of any material default by
any party with respect to such leases and franchise agreements and
cooperate with the Funding Agent in all respects to cure
any such default, and cause each of its Restricted Subsidiaries to do
so; provided that Flagstar or any of its Restricted Subsidiaries may
terminate a lease or franchise agreement or allow a lease or franchise
agreement to lapse or be terminated or allow rights to renew or options
to purchase to be forfeited or cancelled if the facility so leased or
such franchise is no longer necessary or desirable for the prudent
operation of the business of Flagstar or such Restricted Subsidiary as
at the time conducted or contemplated to be conducted or if, at the
time of the termination or surrender thereof or promptly thereafter (i)
Flagstar or such Restricted Subsidiary has executed and delivered a
lease or leases for other premises or another franchise agreement that
may and will be used for the purposes for which the premises subject to
the lease or franchise to be terminated were then used and (ii) the
term thereof has commenced.
(i) Performance of Related Documents. Subject to Section
5.02(o), perform and observe, and cause each of its Restricted
Subsidiaries to perform and observe, all of the material terms and
provisions of each Related Document to be performed or observed by it
or them, as the case may be, maintain each such Related Document in
full force and effect, enforce such Related Document in accordance with
its terms and, upon request of the Funding Agent, make to each other
party to each such Related Document such demands and requests for
information and reports as Flagstar or any of its Restricted
Subsidiaries is entitled to make under such Related Document.
(j) Cash Concentration Accounts. Maintain, and cause the
Borrower to maintain, central cash concentration accounts with Citibank
and, to that end, (i) maintain the Borrower's Account and, except for
Flagstar's daily operating account with Branch Banking and Trust
Company at its Spartanburg, South Carolina headquarters, other accounts
maintained by Flagstar and the Borrower with Citibank as the principal
operating accounts of Flagstar and the Borrower, respectively, (ii) pay
or cause to be paid, at or prior to the end of each Business Day, to
the Funding Agent, for deposit into the Borrower's Account or such
other account, all cash of Flagstar (including, without limitation, all
proceeds of Collateral in which Flagstar is granting a security
interest under the Collateral Documents) in excess of the amount
determined by Flagstar, in the exercise of its prudent business
judgment, to be required by Flagstar for the conduct of its business
operations in the ordinary course; and (iii) cause each of its
Restricted Subsidiaries to pay or cause to be paid, at or prior to the
end of each Business Day, to the Funding Agent, for deposit into the
Borrower's Account or another account maintained by the Borrower with
Citibank, or a Restricted Account (as defined in the Security
Agreement), as the case may be, all cash of such Restricted Subsidiary
(including, without limitation, all proceeds of Collateral in which
such Restricted Subsidiary is granting a security interest under the
Collateral Documents) in excess of the amount determined by such
Restricted Subsidiary, in the exercise of its prudent business
judgment, to be required by such
Restricted Subsidiary for the conduct of its business operations in the
ordinary course, in each case as and to the extent required under the
terms of the Collateral Documents to which such Restricted Subsidiary
is a party.
(k) Transactions with Affiliates. Conduct, and cause each of
its Restricted Subsidiaries to conduct, all transactions otherwise
permitted under the Loan Documents with any of their Affiliates on
terms that are fair and reasonable and no less favorable to Flagstar or
such Restricted Subsidiary than it would obtain in a comparable
arm's-length transaction with a Person not such an Affiliate, except:
(i) advances of cash by the Borrower to Designated
Operating Subsidiaries under the Subsidiary Working Capital
Notes;
(ii) advances of cash by Designated Operating
Subsidiaries that maintain Restricted Accounts (as defined in
the Security Agreement) to the Borrower under the Borrower
Intercompany Notes;
(iii) the incurrence and repayment of Subsidiary
Intercompany Debt;
(iv) the provision of services by Flagstar or any of
its Restricted Subsidiaries to other Subsidiaries of Flagstar,
provided there is a fair and reasonable allocation of the
costs associated therewith;
(v) arrangements among Subsidiaries of Flagstar
(other than First- Tier Subsidiaries) for the common purchase
of goods and services, provided that the terms and provisions
of such arrangements and the allocation of costs associated
therewith are fair and reasonable;
(vi) leases of real property by Flagstar or any of
its Restricted Subsidiaries (other than First-Tier
Subsidiaries) to other such Subsidiaries, provided that (A)
such leases are in writing and freely assignable and (B) the
terms and provisions of such leases and the allocation of
costs associated therewith (including, without limitation, the
rentals payable thereunder) are fair and reasonable;
(vii) payments by Flagstar and its Restricted
Subsidiaries as and to the extent required under the Tax
Sharing Agreement;
(viii) capital contributions by Flagstar and its
Restricted Subsidiaries to their respective Subsidiaries,
provided that capital contributions to Unrestricted
Subsidiaries shall not exceed the amount permitted by Section
5.02(f);
(ix) transactions permitted under Section
5.02(f)(ix) and Section 5.02(g);
(x) the Richardson Loan;
(xi) the FCI Stock Documents; and
(xii) payments to KKR of management fees not to
exceed $1,250,000 per annum for the twelve-month period ended
on December 31, 1995 and, for each subsequent twelve-month
period, an amount equal to 110% of the amount so paid in the
immediately preceding twelve-month period;
provided, however, that nothing in this Agreement or any other Loan
Document shall prohibit any transfer of assets, transactions or other
arrangement among Restricted Subsidiaries that (x) are members of the
same Significant Subsidiary Group or (y) are not members of any
Significant Subsidiary Group.
(l) New Subsidiaries. As soon as possible and in any event
within 30 days following the organization or acquisition of any new
Subsidiary of Flagstar, (i) cause such new Subsidiary that is a
Restricted Subsidiary to execute and deliver (A) to the Funding Agent,
an Assumption of Guaranty (as defined in the Guaranty), a Security
Agreement Supplement (as defined in the Security Agreement), a
Trademark Security Agreement Supplement (as defined in the Trademark
Security Agreement) and a Subordination Agreement Supplement (as
defined in the Subordination Agreement) and (B) if such new Subsidiary
is a Designated Operating Subsidiary, a Subsidiary Working Capital Note
to the Borrower, (ii) if such new Subsidiary is a Designated Operating
Subsidiary that maintains Restricted Accounts (as defined in the
Security Agreement), cause the Borrower to execute and deliver to such
new Subsidiary a Borrower Intercompany Note, and (iii) cause any such
Subsidiary Working Capital Note, any such Borrower Intercompany Note
and all of the outstanding capital stock of such new Subsidiary as is
owned directly by Flagstar or any of its Restricted Subsidiaries to be
pledged to the Funding Agent for the ratable benefit of the Funding
Agent and the Secured Parties in accordance with the terms of the
Collateral Documents.
(m) Delivery of Additional Pledged Shares. Cause to be pledged
and delivered to the Funding Agent under the Security Agreement
certificates representing the capital stock of each of Flagstar's
Denny's Realty, Inc., Quincy's Realty and Spardee's Realty Subsidiaries
upon the release of such certificates from the Liens thereon described
on Schedule 5.02(a).
(n) Additional Covenants Regarding Real Estate Refinancing
Documents. (i) Furnish to the Lender Parties as soon as possible, and
in any event within three Business Days, after the occurrence of each
Default or Event of Default, as the case may be, under (and as defined
in) any Real Estate Refinancing Document, which Default or Event of
Default is continuing on the date of such statement, a statement of the
chief financial officer of Flagstar setting forth details of such
Default or Event of Default and the action that Flagstar proposes to
take with respect thereto; and (ii) cause each of Denny's, Quincy's,
Enterprises and each of the Real Estate Subsidiaries not to amend,
modify or change, or permit or suffer to exist any amendment or
modification to or change in, any term or condition of any Real Estate
Refinancing Document to which such corporation is a party or provide
any or give any consent, waiver or approval thereunder except for
Permitted Amendments.
SECTION 5.02. Negative Covenants. So long as any Advance or
Letter of Credit shall be outstanding or any Lender Party shall have any
Commitment hereunder, Flagstar will not:
(a) Liens, Etc. Create, incur, assume or suffer to exist, or
permit any of its Restricted Subsidiaries to create, incur, assume or
suffer to exist, any Lien on or with respect to any of its properties
of any character (including, without limitation, accounts) whether now
owned or hereafter acquired, or sign or file, or permit any of its
Restricted Subsidiaries to sign or file, under the Uniform Commercial
Code of any jurisdiction (except in respect of true leases not intended
as security and otherwise permitted under Section 5.02(c)), a financing
statement that names Flagstar or any of its Restricted Subsidiaries as
debtor, or sign, or permit any of its Restricted Subsidiaries to sign,
any security agreement authorizing any secured party thereunder to file
such financing statement, or assign, or permit any of its Restricted
Subsidiaries to assign, any accounts, excluding, however, from the
operation of the foregoing restrictions the following:
(i) Liens created by or pursuant to the Loan
Documents;
(ii) Liens existing on the property of Flagstar or
any of its Restricted Subsidiaries (other than First-Tier
Subsidiaries) on the Closing Date and described on Schedule
5.02(a) or extensions, renewals, refinancings or replacements
thereof; provided, however, that no such extensions, renewals,
refinancing or replacements shall extend to or cover any
property not theretofore subject to the Lien being extended,
renewed, refinanced or replaced; and provided further that
Flagstar and its Restricted Subsidiaries (other than
First-Tier Subsidiaries) may substitute for the property
subject to any such Lien other property with substantially the
same Fair Market Value
and not otherwise subject to the Lien of a Collateral
Document, so long as (1) the property for which such
substitution is made is fully and effectively released from
such Lien and (2) the property being subjected to such Lien is
held (x) by a Restricted Subsidiary (other than a First-Tier
Subsidiary) that is a member of the same Significant
Subsidiary Group as the Subsidiary holding the property being
released or (y) if the Restricted Subsidiary holding the
property being released is not a member of a Significant
Subsidiary Group, by another Restricted Subsidiary that is not
a member of a Significant Subsidiary Group;
(iii) The following Liens arising in the ordinary
course of business:
(A) Permitted Liens;
(B) (1) purchase money Liens upon or in any
property acquired or held by Restricted Subsidiaries
of Flagstar (other than First- Tier Subsidiaries) to
secure the purchase price of such property or to
secure Debt (including interest, fees, reimbursement
and indemnification amounts, and all other accruals
and Obligations accruing on or after the time at
which the principal amount of such Debt is incurred)
incurred solely for the purpose of financing the
acquisition, construction or improvement of the
property subject to such Liens (including, without
limitation, Liens securing Capex Financings), whether
incurred before or after such acquisition,
construction or improvement, provided that any such
Liens shall be placed on such property within 180
days following the acquisition, construction or
improvement thereof, and (2) Liens existing on any
such property at the time of acquisition, and
extensions, renewals, refinancings or replacements of
any of the foregoing for the same or a lesser
principal amount; provided, however, in each case,
that no such Lien shall extend to or cover any
property other than the property being acquired,
constructed or improved, and no such extension,
renewal, refinancings or replacement shall extend to
or cover any property not theretofore subject to the
Lien being extended, renewed or replaced;
(C) Liens arising under leases permitted
under Section 5.02(c) (including, without limitation,
the Lien of the owner of, or mortgagee of the
ownership interest in, the property subject to any
such lease on such property and any improvements and
fixtures thereon);
(D) Liens of lessees under leases permitted
under Section 5.02(e);
(E) unperfected Liens on the property of
Restricted Subsidiaries of Flagstar (other than
First-Tier Subsidiaries) in favor of (1) other
Restricted Subsidiaries of Flagstar (other than
First-Tier Subsidiaries) arising in connection with
intercompany transactions permitted under the final
proviso to Section 5.01(k) or (2) Flagstar arising in
connection with intercompany transactions permitted
under Section 5.01(k)(vi);
(F) Liens on real property securing Debt
outstanding under the Real Estate Refinancing
Documents;
(G) Liens upon or on any assets acquired
directly or indirectly as permitted by Section
5.02(f)(xii), provided such Liens exist at the time
such assets are so acquired and that no such Lien
shall extend to or cover any property other than such
assets; and
(H) Liens upon or on any other assets
securing Obligations in an aggregate amount not to
exceed $5,000,000 at any time outstanding.
(b) Debt. Create, incur, assume or suffer to exist, or permit
any of its Restricted Subsidiaries to create, incur, assume or suffer
to exist, any Debt other than:
(i) in the case of Flagstar,
(A) all interest, fees, reimbursement and
indemnification amounts, and all other accruals and
Obligations under the Senior Notes;
(B) all interest, fees, reimbursement and
indemnification amounts, and all other accruals and
Obligations under the Existing Subordinated Debt;
(C) all interest, fees, reimbursement and
indemnification amounts, and all other accruals and
Obligations under Debt incurred to refinance all or
any portion of the Existing Subordinated Debt,
provided such refinancing Debt, (1) is in a principal
amount no greater than the aggregate principal amount
and premium, if any, payable in respect of the Debt
refinanced, (2) bears interest at a rate no greater
than the rate of interest applicable to the Debt
refinanced; and (3) otherwise contains terms and
conditions, including terms of subordination, no less
favorable to Flagstar and the Lenders than the
terms and conditions of the indenture governing the
11.25% Senior Subordinated Debentures due 2004 of
Flagstar in the form of indenture attached as Exhibit
J;
(D) Debt in respect of Hedge Agreements
entered into with Lenders provided that the aggregate
notional amount thereof shall not exceed
$800,000,000;
(E) all interest, fees, reimbursement and
indemnification amounts, and all other accruals and
Obligations under the FCI Intercompany Note;
(ii) in the case of the Borrower, Debt under the Loan
Documents and the Borrower Intercompany Notes;
(iii) in the case of Flagstar and any of its
Restricted Subsidiaries (other than First-Tier Subsidiaries),
(A) Debt under the Loan Documents;
(B) Debt secured by Liens permitted under
Section 5.02(a)(iii)(B), provided that the aggregate
principal amount of all such Debt (other than Capex
Financings) shall not exceed $10,000,000 at any time
outstanding;
(C) Debt under Capitalized Leases permitted
under Section 5.02(c);
(D) all interest, fees, reimbursement and
indemnification amounts, and all other accruals and
Obligations under the Existing Debt and renewals,
extensions, modifications or refinancings of the
Existing Debt, provided such renewals, extensions,
modifications and refinancings (1) do not increase
the outstanding principal amount of the Existing Debt
being extended, modified or refinanced, or shorten
the maturity thereof to a date earlier than one year
after the Termination Date, and (2) are otherwise on
terms consistent with prudent business practice and
then prevailing market practices and prices in the
applicable geographic area;
(E) endorsement of negotiable instruments
for deposit or collection or similar transactions in
the ordinary course of business;
(F) additional unsecured Debt not otherwise
permitted by this Section 5.02(b)(iii) aggregating
not more than $20,000,000 in principal amount at any
one time outstanding;
(G) Debt of any such Subsidiary to another
such Subsidiary, provided that (1) both such
Subsidiaries are members of the same Significant
Subsidiary Group or (2) neither such Subsidiary is a
member of any Significant Subsidiary Group;
(H) obligations under performance or surety
bonds that constitute Debt (if any) incurred in the
ordinary course of business, provided that the
aggregate maximum amount available to be paid or
drawn under such performance or surety bonds that are
not supported by Letters of Credit shall not exceed
$10,000,000 at any time outstanding; and
(I) Debt incurred or assumed in any
transaction permitted under Section 5.02(f)(xii);
(iv) in the case of Significant Subsidiaries, Debt
under the Loan Documents; and
(v) Subsidiary Intercompany Debt.
(c) Lease Obligations. Create, incur, assume or suffer to
exist, or permit any of its Restricted Subsidiaries to create, incur,
assume or suffer to exist, any Obligations as lessee (i) for the rental
or hire of real or personal property in connection with any sale and
leaseback transaction or (ii) for the rental or hire of real or
personal property in connection with other transactions of any kind
under leases or agreements to lease (including, without limitation,
Capitalized Leases) other than (in the case of Flagstar and its
Restricted Subsidiaries other than First-Tier Subsidiaries) Obligations
under:
(A) leases in existence on the Closing Date and any
renewal, extension, modification or replacement of such
leases, provided such renewals, extensions, modifications and
replacements (1) are on terms consistent with prudent business
practice and (2) in the case of Capitalized Leases, do not
advance the expiration date thereof to a date earlier than one
year after the Termination Date;
(B) additional leases (other than Capitalized Leases)
entered into in the ordinary course of business and in a
manner and to an extent consistent with prudent business
practice for which the aggregate rent expense in any fiscal
year does not exceed $80,000,000;
(C) additional Capitalized Leases entered into in the
ordinary course of business and in a manner and to an extent
consistent with prudent business practice (1) in connection
with Capital Expenditures or (2) the principal amount of which
would not increase the direct or contingent liabilities of
Flagstar and its Restricted Subsidiaries, on a Consolidated
basis, in respect of all such Capitalized Leases that are not
entered into in connection with Capital Expenditures by more
than $15,000,000 in any fiscal year; and
(D) intercompany leases permitted under Section
5.01(k).
(d) Mergers, Etc. Merge with or into or consolidate with or
into, or convey, transfer or otherwise dispose of (whether in one
transaction or in a series of related transactions) all or
substantially all of its assets (whether now owned or hereafter
acquired) to, any Person, or permit any of its Restricted Subsidiaries
to do so, except that any Restricted Subsidiary of Flagstar (other than
First-Tier Subsidiaries) may (i) merge or consolidate with or transfer
all or substantially all of its assets to any other Restricted
Subsidiary of Flagstar within the same Significant Subsidiary Group or,
if such Restricted Subsidiary is not a member of any Significant
Subsidiary Group, with any other Restricted Subsidiary of Flagstar
which is not a member of any Significant Subsidiary Group (other than
the Borrower), (ii) acquire by merger the assets of any Person to the
extent permitted by Section 5.02(f)(xii) and (iii) dispositions
permitted by 5.02(e)(iv); provided no such merger, consolidation,
transfer or acquisition involving a Restricted Subsidiary of Flagstar
results in any loss of ownership by Flagstar of such Restricted
Subsidiary.
(e) Sales, Etc. of Assets. Sell, lease, transfer or otherwise
dispose of, or permit any of its Restricted Subsidiaries to sell,
lease, transfer or otherwise dispose of, any of its assets, including
(without limitation) substantially all assets constituting the
business of a division, branch or other unit operation, except:
(i) dispositions of inventory in the ordinary course
of business;
(ii) dispositions of obsolete or surplus equipment
in the ordinary course of business consistent with past
practice, provided that all such dispositions shall be for
Fair Market Value;
(iii) dispositions in the ordinary course of business
consistent with past practice of other properties no longer
used or useful in the business of
Flagstar and its Restricted Subsidiaries, provided that all
such dispositions shall be for Fair Market Value and provided
further that the aggregate Fair Market Value of all such other
properties disposed of in any fiscal year shall not exceed
$10,000,000;
(iv) dispositions of assets for Fair Market Value in
cash in connection with any sale and leaseback transaction,
provided that (A) the obligations of Flagstar and its
Restricted Subsidiaries under any related lease are permitted
under Section 5.02(c) and (B) if such transaction is
consummated more than 180 days after the acquisition or
completion of construction of the property that is the subject
of such transaction the Borrower shall, in accordance with
Section 2.04, reduce the Working Capital Commitments by an
amount equal to the sum of the Net Cash Proceeds of such
transaction;
(v) exchanges of real property, fixtures and
improvements for other real property, fixtures and
improvements, provided (A) each such exchange is for Fair
Market Value, (B) any consideration (other than real property,
fixtures and improvements) received by Flagstar and its
Restricted Subsidiaries in connection with such exchanges is
received by Flagstar and its Restricted Subsidiaries in cash,
and (C) the Net Cash Proceeds of each such exchange are used
to reduce Working Capital Commitments in accordance with
Section 2.04;
(vi) intercompany transactions permitted under the
last proviso to Section 5.01(k);
(vii) dispositions from time to time of all or any
portion of the assets constituting any of the restaurants of
Denny's Holdings, Inc. and its Subsidiaries (other than sales
(but not licenses) of Trademark Collateral (as defined in the
Security Agreement)) for a consideration determined by the
board of directors of the Subsidiaries that own such assets
(which board of directors shall include members of senior
management of Flagstar) to be equal to the fair market value
of the assets disposed of; provided that the excess of
aggregate Net Cash Proceeds of such dispositions received
after the date hereof over $30,000,000 are used to reduce
Working Capital Commitments in accordance with Section 2.04;
(viii) disposition of Portiontrol Foods, Inc. and its
Subsidiaries, provided that (A) on or prior to the date of
such disposition, the Borrower shall have returned to the
Issuing Banks for cancellation, or shall have made other
arrangements satisfactory to the Required Lenders in respect
of, the Letters of Credit issued in support of obligations of
Portiontrol Foods, Inc.
and its Subsidiaries, (B) such disposition shall be for an
amount not less than Fair Market Value (but in any event the
Net Cash Proceeds thereof shall not be less than $40,000,000)
and on other terms and conditions reasonable and customary in
similar transactions, in each case as determined in the
reasonable judgment of the Required Lenders and (C) the Net
Cash Proceeds of such disposition are used to reduce Working
Capital Commitments to the extent required by Section
2.04(b)(i)(B);
(ix) disposition of underperforming restaurants (as
determined in the good faith judgment of Flagstar), provided
that such dispositions shall be for an amount not less than
Fair Market Value and provided further that the aggregate Fair
Market Value of all such assets disposed of in any fiscal year
shall not exceed $15,000,000 for the fiscal year ended in 1996
and $8,000,000 for each fiscal year thereafter; and
(x) dispositions of restaurant assets to franchisees
within 90 days following the acquisition thereof, provided
that such dispositions shall be for an amount not less than
Fair Market Value;
provided, as to clauses (iv), (v), (vii), (viii), (ix) and (x) of this
Section 5.02(e), that after giving effect to such transaction no
Default shall have occurred and be continuing.
(f) Investments in Other Persons. Make, or permit any of its
Restricted Subsidiaries to make, any Investment in any Person that is
not a Restricted Subsidiary that is directly or indirectly wholly owned
by Flagstar or such Restricted Subsidiary or one or more other
Restricted Subsidiaries within the same Significant Subsidiary Group,
other than:
(i) advances by the Borrower to Designated Operating
Subsidiaries under the Subsidiary Working Capital Notes;
(ii) advances to the Borrower by Restricted
Subsidiaries of Flagstar other than the Borrower under the
Borrower Intercompany Notes;
(iii) loans or advances constituting Debt permitted
under Section 5.02(b)(iii)(G) and (b)(v) and other Investments
by Restricted Subsidiaries of Flagstar in other Restricted
Subsidiaries of Flagstar where both such Restricted
Subsidiaries are (A) members of the same Significant
Subsidiary Group or (B) not members of any Significant
Subsidiary Group;
(iv) loans or advances made by Restricted
Subsidiaries of Flagstar (other than First-Tier Subsidiaries)
in the ordinary course of business consistent with prudent
business practice to customers, distributors, franchisors or
franchisees relating to concession, food service,
distribution or franchise agreements;
(v) Cash Equivalents and, to the extent insured by
the full faith and credit of the Government of the United
States and in an aggregate amount not to exceed $2,000,000 at
any time outstanding, insured certificates of deposit or time
deposits with commercial banks that have combined capital and
surplus of less than $500,000,000;
(vi) Investments by Restricted Subsidiaries of
Flagstar (other than First-Tier Subsidiaries) made pursuant to
joint venture or franchise arrangements entered into in
accordance with prudent business practice and in an aggregate
amount of not more than $10,000,000 at any time outstanding;
(vii) non-cash consideration received from any sale,
lease, transfer or other disposition of assets permitted under
Section 5.02(e);
(viii) loans or advances to employees made in the
ordinary course of business consistent with prudent business
practice and in an aggregate amount not to exceed $2,500,000
at any time outstanding;
(ix) loans or advances to or Investments in Liquor
License Affiliates to the extent necessary to enable Liquor
License Affiliates to pay taxes, fees and other expenses as
and when required to maintain the liquor licenses held by
them;
(x) additional Investments not otherwise permitted
by this Section 5.02(f), in an aggregate amount not to exceed
$3,000,000;
(xi) the Richardson Loan plus interest, fees,
reimbursement and indemnification amounts, and all other
accruals and obligations thereunder;
(xii) Investments in new operations, properties or
franchises through the purchase or other acquisition of assets
of any Person or stock of new Restricted Subsidiaries where
Flagstar or the Restricted Subsidiary of Flagstar making such
purchase or acquisition determines in its prudent business
judgment that such purchase or acquisition would be beneficial
in lieu of making Capital Expenditures;
(xiii) Investments by Flagstar in Newco in an
aggregate amount not to exceed $75,000,000 at any time
outstanding; and (xiv) restaurant deposits in the form of
demand deposits with any commercial bank.
(g) Dividends, Etc. In addition to the prohibitions set forth
in Section 12 of the Security Agreement, declare or pay any dividends,
purchase, redeem, retire, defease or otherwise acquire for value any of
its capital stock or any warrants, rights or options to acquire such
capital stock, now or hereafter outstanding, return any capital to its
stockholders as such, or make any distribution or exchange of assets,
capital stock, warrants, rights, options, obligations or securities to
or with its stockholders as such, or permit any of its Restricted
Subsidiaries to purchase, redeem, retire, defease or otherwise acquire
for value any capital stock of Flagstar or any warrants, rights or
options to acquire such capital stock, other than:
(i) dividends and other distributions paid by
Subsidiaries of Flagstar to Flagstar or other Subsidiaries of
Flagstar within the same Significant Subsidiary Group or, if
such Subsidiary (other than the Borrower) is not a member of
any Significant Subsidiary Group, to Flagstar or any other
Subsidiary of Flagstar;
(ii) cash dividends paid by Subsidiaries of Flagstar
(other than the Borrower), in an aggregate amount not to
exceed $3,000,000 in any fiscal year, to the holders of
minority interests in such Subsidiaries ratably in accordance
with the ownership interests of such holders in such
Subsidiaries;
(iii) dividends and other distributions in cash paid
by Flagstar to FCI for the purpose of repurchasing from
officers, employees or employee benefit plans of Flagstar and
its Subsidiaries shares and options to purchase shares of FCI
Common Stock upon the death, disability, retirement or
termination of employment of such person as provided for in
any such employee benefit plan or in any agreement relating to
such shares or options, provided that the aggregate amount of
such cash dividends shall not exceed the sum of (A)
$20,000,000 plus (B) the cash proceeds from any reissuance of
FCI Common Stock by FCI to officers, employees or employee
benefit plans, which proceeds are contributed by FCI to the
capital of Flagstar upon receipt thereof;
(iv) cash dividends to FCI for the purpose of
compensating FCI for, or enabling FCI to pay (A) accounting
and legal fees and other fees and expenses, in each case to
the extent incurred by FCI in the ordinary course of business
in its capacity as a holding company for Flagstar and (B)
underwriting fees and discounts in connection with securities
offerings by FCI to the extent
the net proceeds thereof are contributed to the capital of
Flagstar or advanced to Flagstar on terms no less favorable to
Flagstar and the Lenders than the FCI Intercompany Note; and
(v) cash dividends to pay tax liabilities in an
amount not to exceed Flagstar's or such Restricted
Subsidiary's tax liability computed on a separate liability
basis.
(h) Maintenance of Ownership of Subsidiaries. Sell or
otherwise dispose of any shares of capital stock of any of its
Subsidiaries or any warrants, rights or options to acquire such capital
stock or permit any of its Restricted Subsidiaries to issue, sell or
otherwise dispose of any shares of its capital stock or the capital
stock of any other Restricted Subsidiary of Flagstar or any warrants,
rights or options to acquire such capital stock, other than (i) by a
Restricted Subsidiary of Flagstar (other than a First-Tier Subsidiary)
to Flagstar or any wholly owned Subsidiary of Flagstar within the same
Significant Subsidiary Group, (ii) if the Restricted Subsidiary making
such issuance, sale or other disposition is not a member of a
Significant Subsidiary Group, to Flagstar or any other wholly owned
Restricted Subsidiary of Flagstar (other than the Borrower) which is
not a member of a Significant Subsidiary Group or (iii) as part of any
disposition permitted under Section 5.02(e) or acquisition by merger or
consolidation permitted under Section 5.02(f)(xii).
(i) Change in Nature of Business. (i) Conduct any business or
enter into any transaction inconsistent with its status as a holding
company, or permit any Significant Subsidiary to conduct any business
or enter into any transaction inconsistent with such Significant
Subsidiary's status as a holding company, (ii) permit the Borrower to
conduct any business or enter into any transaction inconsistent with
its status as a single purpose Subsidiary of Flagstar providing working
capital financing for Flagstar and its other Restricted Subsidiaries,
or (iii) make, or permit any Significant Subsidiary Group to make, any
material change in the nature of its business as carried on at the date
hereof.
(j) Plan Termination. Terminate, or permit any ERISA
Affiliate to terminate, any Plan where such termination would, or
would be reasonably likely to, have a Material Adverse Effect.
(k) Plan Amendments. Amend, modify or change, or permit any of
its Restricted Subsidiaries to amend, modify or change, any Plan,
Multiemployer Plan or Welfare Plan except as required by law or where
such amendment, modification or change does not, and would not be
reasonably likely to, have a Material Adverse Effect.
(l) Charter Amendments. Amend, or permit any of its
Restricted Subsidiaries to amend, its charter or bylaws except in a
manner which does not materially impair the rights and interests of
the Funding Agent or any Lender Party.
(m) Accounting Changes. Make or permit, or permit any of its
Restricted Subsidiaries to make or permit, any change in its fiscal
year or any material change in accounting policies affecting the
presentation of financial statements or reporting practices, except as
required by generally accepted accounting principles.
(n) Prepayments, Etc. of Debt. (i) 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, if any, of, any Debt, other than (A) regularly scheduled or
required payments on, or repayments or redemptions of, Debt permitted
under Section 5.02(b), (B) payments to retire Debt to the extent
required under a "due on sale" clause applicable to any disposition of
assets permitted under Section 5.02(e), (C) prepayments of Funded Debt
(other than Subordinated Debt), provided that before and immediately
after giving effect to any such prepayment (1) the Interest Coverage
Ratio shall be greater than or equal to 2.00:1.00 and (2) the aggregate
amount of Working Capital Advances and Swing Line Advances then
outstanding shall not exceed $0, (D) prepayments of Funded Debt (other
than Subordinated Debt) from the Net Cash Proceeds of the disposition
of (1) Portiontrol Foods, Inc. in an amount not to exceed $20,000,000
and (2) the Transferred Businesses in an aggregate amount not to exceed
$40,000,000, or as otherwise permitted or required pursuant to Section
2.05, (E) renewals, extensions, modifications and refinancings
permitted under Section 5.02(a)(ii), (a)(iii)(B), (b)(i)(C) or
(b)(iii)(D) and (F) payments required in respect of Hedge Agreements
(as scheduled payments, payments upon termination or otherwise), or
(ii) except for Permitted Amendments and as otherwise provided in
Sections 5.02(a)(ii), (b)(iii)(D) or (o), modify or change in any
manner any term or condition of any Subordinated Debt or any other
Existing Debt or permit any of its Restricted Subsidiaries to do any of
the foregoing.
(o) Amendment, Etc. of Related Documents. Cancel or terminate
any Related Document or consent to, permit or accept any cancellation
or termination thereof, amend, modify or change in any manner any term
or condition of any Related Document or give any consent, waiver or
approval thereunder, waive any default under or any breach of any term
or condition of any Related Document, agree in any manner to any other
amendment, modification or change of any term or condition of any
Related Document or take any other action in connection with any
Related Document, or permit any of its Restricted Subsidiaries to do
so, except (i) in the case of the Subordinated Debt Documents and
Senior Note Documents, Permitted Amendments and as otherwise provided
in Section 5.02(b)(iii)(D), (ii) the termination of the Tax Sharing
Agreement and (iii) in all other cases, where such action would not,
and would not be reasonably likely to, have a Material Adverse Effect.
(p) Dividend and Other Payment Restrictions Affecting
Subsidiaries. Create or otherwise cause or suffer to exist or become
effective, or permit any of its Restricted Subsidiaries to create or
otherwise cause or suffer to exist or become effective, directly or
indirectly, any consensual encumbrance or restriction on the ability of
any such Restricted Subsidiary to (i) pay dividends or make other
distributions on its capital stock or any other interest or
participation in, or measured by, its profits, owned by Flagstar or any
of its Restricted Subsidiaries, or pay any Debt owed to Flagstar or any
of its Restricted Subsidiaries, (ii) make loans or advances to Flagstar
or a Restricted Subsidiary of Flagstar, or (iii) transfer any of its
properties or assets to Flagstar or any of its Restricted Subsidiaries,
except for such encumbrances or restrictions existing under or by
reason of (A) applicable law, (B) this Agreement, any other Loan
Document or any other agreement entered into hereunder or thereunder or
as contemplated hereby or thereby, (C) the Related Documents, (D)
customary provisions restricting (1) subletting or assignment of any
lease governing a leasehold interest of Flagstar or any of its
Restricted Subsidiaries, (2) the transfer of intellectual property
rights held by Flagstar or any of its Restricted Subsidiaries through
license agreements with the owners of such rights and (3) the
assignment of supply contracts, (E) any instrument governing Debt, plus
interest, fees, reimbursement and indemnification amounts, and all
other accruals and Obligations thereunder of a Person acquired by
Flagstar or any of its Restricted Subsidiaries at the time of such
acquisition, (F) Existing Debt, Debt permitted under provisions of
indentures governing Existing Debt that are identical to Section
3.11(b)(vi) of the form of indenture attached as Exhibit J and not
otherwise prohibited by the terms of this Agreement, and other
contractual obligations of Flagstar or any of its Restricted
Subsidiaries existing on the Closing Date and any amendment,
modification, renewal, extension, replacement, refinancing or refunding
thereof, provided that the encumbrances and restrictions contained in
any such amendment, modification, renewal, extension, replacement,
refinancing or refunding are in the aggregate no less favorable in all
material respects to the Lenders, (G) any Capex Financing and (H) any
Investment permitted under Section 5.02(f).
(q) Negative Pledge. Enter into or suffer to exist, or permit
any of its Restricted Subsidiaries to enter into or suffer to exist,
any agreement prohibiting or conditioning the creation or assumption of
any Lien upon any of its property or assets other than (i) in favor of
the Funding Agent and the Secured Parties or (ii) in connection with
(A) any Existing Debt and any Debt outstanding on the date such
Restricted Subsidiary first becomes a Subsidiary of Flagstar, plus, in
each case, interest, fees, reimbursement and indemnification amounts,
and all other accruals and
Obligations thereunder, (B) any property subject to a Lien permitted by
Section 5.02(a)(iii)(B), (C) and (D) in the agreement creating such
Lien or (C) any assets acquired directly or indirectly as permitted
under Section 5.02(f)(xii), provided such agreement prohibiting or
conditioning the creation or assumption of any Lien exists at the time
such assets are so acquired and that no such agreement shall extend to
or cover any property other than such assets.
(r) Partnerships. Become a general partner in any general or
limited partnership, or permit any of its Restricted Subsidiaries to do
so, other than any Restricted Subsidiary the sole assets of which
consist of its interest in such partnership.
(s) Floating Rate Debt. Permit the sum of (i) the aggregate
principal amount of Total Debt that accrues interest at a floating rate
plus (ii) the aggregate notional amount of Hedge Agreements under which
Flagstar is a floating rate payor minus (iii) the aggregate notional
amount of Hedge Agreements under which Flagstar is a fixed rate payor
to be greater than 50% of the aggregate principal amount of Total Debt
at any time.
(t) Designation of Restricted and Unrestricted Subsidiaries.
(i) Designate a Subsidiary, in connection with an acquisition permitted
under Section 5.02(f)(xii), as an Unrestricted Subsidiary or
redesignate an Unrestricted Subsidiary as a Restricted Subsidiary
unless, in either case, immediately before and after giving effect
thereto, no Default shall have occurred and be continuing or would
result therefrom and Flagstar shall be in pro forma compliance with the
covenants set forth in Section 5.04, or (ii) without the prior written
consent of the Required Lenders, redesignate a Restricted Subsidiary as
an Unrestricted Subsidiary.
SECTION 5.03. Reporting Requirements. So long as any Advance
or Letter of Credit shall be outstanding or any Lender shall have any
Commitment hereunder, Flagstar will:
(a) Default Notice. As soon as possible and in any event
within three days after knowledge of any Significant Subsidiary,
Designated Operating Subsidiary, Flagstar or the Borrower of the
occurrence of each Default continuing on the date of such statement,
provide to each Lender Party a statement of the chief financial officer
of Flagstar setting forth details of such Default and the action that
Flagstar has taken and proposes to take with respect thereto.
(b) Monthly Financials. As soon as available and in any event
within 60 days after the end of each December, 45 days after the end
of each March, June and September and 35 days after the end of each
other month, provide to each Lender Party a copy of the monthly report
to the Board of Directors of Flagstar setting forth certain financial
information with respect to Flagstar and its Subsidiaries, prepared in
accordance with current practice of Flagstar as of the date hereof,
together with Consolidated balance sheets of Flagstar and its
Subsidiaries, Flagstar and its Restricted Subsidiaries and of each
Significant Subsidiary Group as of the end of such month and
Consolidated statements of income and retained earnings and cash flows
of Flagstar and its Subsidiaries, Flagstar and its Restricted
Subsidiaries and of each Significant Subsidiary Group (i) for the
period commencing at the end of the previous month and ending with the
end of such month, setting forth in each case in comparative form the
figures for the corresponding month of the preceding year and (ii) for
the period commencing at the end of the preceding year and ending with
the end of such month, setting forth in each case in comparative form
the figures both for the corresponding year-to-date period as set
forth in the annual business plan for such year and for the
corresponding year-to-date period of the preceding year, all in
reasonable detail and duly certified by the chief financial officer of
Flagstar as having been prepared, in the case of such Consolidated
balance sheets and statements of income and retained earnings, in
accordance with GAAP but subject to year-end audit adjustments, and,
in the case of such Consolidated statements of cash flows, in
accordance with GAAP (except for certain notes that would be required
in the preparation of financial statements in accordance with GAAP).
(c) Quarterly Financials. As soon as available and in any
event within 45 days after the end of each of the first three quarters
of each fiscal year of Flagstar, provide to each Lender Party
Consolidated balance sheets of Flagstar and its Subsidiaries, Flagstar
and its Restricted Subsidiaries and of each Significant Subsidiary
Group as of the end of such quarter and Consolidated statements of
income and cash flows of Flagstar and its Subsidiaries, Flagstar and
its Restricted Subsidiaries and of each Significant Subsidiary Group
(i) for the period commencing at the end of the previous fiscal quarter
and ending with the end of such quarter, setting forth in each case in
comparative form the figures for the corresponding quarter of the
preceding fiscal quarter, and (ii) for the period commencing at the end
of the previous fiscal year and ending with the end of such quarter,
setting forth in each case in comparative form the figures both for the
corresponding year-to-date period as set forth in the annual business
plan for such fiscal year and for the corresponding year-to-date period
of the preceding fiscal year, all in reasonable detail and duly
certified (subject to year-end audit adjustments) by the chief
financial officer of Flagstar as having been prepared in accordance
with GAAP, together with (x) a certificate of said officer stating that
no Default has occurred and is continuing or, if a Default has occurred
and is continuing, a statement as to the nature thereof and the action
that Flagstar has taken and proposes to take with respect thereto and
(y) a schedule in form satisfactory to the Funding Agent of the
computations used by Flagstar in determining compliance with the
covenants contained in Sections 5.02(b) and 5.04.
(d) Annual Financials. As soon as available and in any event
within 90 days after the end of each fiscal year of Flagstar, provide
to each Lender Party a copy of the annual audit report for such year
for Flagstar and its Subsidiaries and for Flagstar and its Restricted
Subsidiaries, including therein a Consolidated balance sheet of
Flagstar and its Subsidiaries and of Flagstar and its Restricted
Subsidiaries as of the end of such fiscal year and Consolidated
statements of income and cash flows of Flagstar and its Subsidiaries
and of Flagstar and its Restricted Subsidiaries for such fiscal year,
in each case setting forth in comparative form the figures for the
preceding fiscal year, and in each case accompanied by an opinion
acceptable to the Required Lenders of Deloitte & Touche or other
independent public accountants of recognized standing acceptable to the
Required Lenders, together with (i) a letter of such accounting firm to
the Lender Parties stating that in the course of the regular audit of
the financial statements of Flagstar and its Subsidiaries and of
Flagstar and its Restricted Subsidiaries, which audit was conducted by
such accounting firm in accordance with generally accepted auditing
standards, such accounting firm has obtained no knowledge that a
Default has occurred and is continuing, or if, in the opinion of such
accounting firm, a Default has occurred and is continuing, a statement
as to the nature thereof, (ii) a schedule in form satisfactory to the
Funding Agent of the computations prepared by Flagstar in determining,
as of the end of such fiscal year, compliance with the covenants
contained in Sections 5.02(b) and 5.04 and (iii) a certificate of the
chief financial officer of Flagstar stating that no Default has
occurred and is continuing or, if a default has occurred and is
continuing, a statement as to the nature thereof and the action that
Flagstar has taken and proposes to take with respect thereto.
(e) Annual Reports by Significant Subsidiary Group. As soon as
available and in any event within 90 days after the end of each fiscal
year of Flagstar, provide to the Co-Administrative Agents a copy of the
Consolidated balance sheets of each Significant Subsidiary Group as of
the end of such fiscal year and Consolidated statements of income and
retained earnings and cash flows of each Significant Subsidiary Group
for such fiscal year, in each case setting forth in comparative form
the figures for the preceding fiscal year, all in reasonable detail and
duly certified by the chief financial officer of Flagstar as having
been prepared in accordance with GAAP.
(f) Additional Subsidiary Financial Reports. Together with the
Consolidated financial statements of each Significant Subsidiary Group
referred to in Sections 5.03(b), (c) and (e), provide to the
Co-Administrative Agents separately stated Consolidated statements of
income, Capital Expenditures, Cash Capital Expenditures and
depreciation for each of Flagstar's Hardees, Quincy's, Denny's, El
Pollo Loco and Portiontrol operations.
(g) Changes in GAAP. In the event of any change in GAAP from
the date of the financial statements referred to in Section 4.01(f) and
upon delivery of any financial statement required to be furnished under
subsections (b) through (e) of this Section 5.03, provide to the
Co-Administrative Agents or each Lender Party, as applicable, a
statement of reconciliation conforming any information contained in
such financial statement required to be furnished under subsections (b)
through (e) of this Section 5.03 with GAAP as on the date of the
financial statements referred to in Section 4.01(f).
(h) Annual Business Plan. As soon as available and in any
event no later than the end of each fiscal year of Flagstar, provide to
the Co-Administrative Agents (i) the annual business plan of Flagstar
and its Restricted Subsidiaries, (ii) projections prepared by
management of Flagstar of (A) statements concerning selected financial
data (consisting of net sales, earnings before interest and taxes,
working capital items, capital expenditures and depreciation) on a
monthly basis for the first year following such fiscal year, and (B)
balance sheets, income statements and cash flow statements, on a
quarterly basis for the first year following such fiscal year and on an
annual basis for each year thereafter during the term of this
Agreement, and (iii) a statement in reasonable detail of the
assumptions used in preparing such projections, all in form and
substance reasonably satisfactory to the Funding Agent.
(i) ERISA Events. Promptly and in any event within 15 days
after knowledge of any Significant Subsidiary, Designated Operating
Subsidiary, Flagstar or the Borrower that any ERISA Event has occurred
after the date hereof with respect to a Plan of any Loan Party or any
ERISA Affiliate, provide to the Co-Administrative Agents a statement of
the chief financial officer or Vice President-Human Resources of such
Loan Party describing such ERISA Event and the action, if any, that
such Loan Party or ERISA Affiliate proposes to take with respect
thereto, provided, however, that such statement with respect to any
ERISA Event of any Plan that has an Insufficiency in excess of
$5,000,000 shall be furnished to the Lender Parties within 15 days
after any Loan Party or any ERISA Affiliate knows or has reason to know
that any such ERISA Event has occurred.
(j) Plan Terminations. Promptly and in any event within two
Business Days after knowledge of any Significant Subsidiary, Designated
Operating Subsidiary, Flagstar or the Borrower of the receipt thereof
by any Loan Party or any ERISA Affiliate, provide to the
Co-Administrative Agents copies of each notice from the PBGC stating
its intention to terminate any Plan or to have a trustee appointed to
administer any Plan, provided, however, that any such notice with
respect to any Plan that has an Insufficiency in excess of $5,000,000
shall be furnished to the Lender Parties within two Business Days after
receipt thereof by any Loan Party or any ERISA Affiliate.
(k) Plan Annual Reports. Promptly and in any event within 30
days after the filing thereof with the Internal Revenue Service,
provide to the Co-Administrative Agents copies of each Schedule B
(Actuarial Information) to the annual report (Form 5500 Series) with
respect to each Plan.
(l) Multiemployer Plan Notices. Promptly and in any event
within 10 days after knowledge of any Significant Subsidiary,
Designated Operating Subsidiary, Flagstar or the Borrower of the
receipt thereof by any Loan Party or any ERISA Affiliate from the
sponsor of a Multiemployer Plan, provide to the Co-Administrative
Agents a copy of each notice received by such Loan Party or ERISA
Affiliate concerning (i) the imposition of Withdrawal Liability by any
Multiemployer Plan, (ii) the reorganization or termination, within the
meaning of Title IV of ERISA, of any Multiemployer Plan or (iii) the
amount of liability incurred, or that may be incurred, by such Loan
Party or ERISA Affiliate in connection with any event described in
clause (i) or (ii), provided, however, that any such notice shall be
furnished to the Lender Parties within 10 days after receipt thereof by
any Loan Party or any ERISA Affiliate if the amount of liability
incurred, or that may be incurred, by such Loan Party and the ERISA
Affiliates in connection with such event is in excess of $5,000,000.
(m) Litigation. Promptly after the commencement hereof,
provide to the Co-Administrative Agents notice of all actions, suits
and proceedings before any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or
foreign, of the type described in Section 4.01(i) affecting any Loan
Party or any of its Subsidiaries.
(n) SEC Filings. Promptly after the sending or filing thereof,
provide to the Co-Administrative Agents copies of all such proxy
statements, financial statements and reports that FCI or any Loan Party
or any of its Restricted Subsidiaries sends to its public stockholders
generally in their capacity as such, and copies of all regular,
periodic and special reports, and all registration statements, that FCI
or any Loan Party or any of its Restricted Subsidiaries files with the
Securities and Exchange Commission or any governmental authority that
may be substituted therefor, or with any national securities exchange.
(o) Reports to Other Creditors. Promptly after the furnishing
thereof, provide to the Co-Administrative Agents copies of any
statement or report furnished to any other holder of the securities of
any Loan Party or of any of its Restricted Subsidiaries pursuant to the
terms of any indenture, loan or credit or similar agreement under which
the aggregate principal amount of Debt outstanding exceeds $10,000,000
and not otherwise required to be furnished to the Lender Parties
pursuant to any other clause of this Section 5.03.
(p) Asset Sales. Promptly upon entering into any agreement for
the sale, lease, transfer or other disposition of assets the
consummation of which would give rise to a mandatory Commitment
reduction under Section 2.04, provide to the Co- Administrative Agents
copies of such agreement and such other information concerning such
disposition as any Lender Party through the Funding Agent may
reasonably request.
(q) Revenue Agent Reports. Within 10 days after receipt,
provide to the Co-Administrative Agents copies of all Revenue Agent
Reports (Internal Revenue Service Form 886), or other written proposals
of the Internal Revenue Service, that propose, determine or otherwise
set forth adjustments increasing the Federal income tax liability of
the affiliated group (within the meaning of Section 1504(a)(1) of the
Internal Revenue Code) of which Flagstar is a member aggregating
$5,000,000 or more.
(r) Tax Certificates. Promptly, and in any event within five
Business Days after the due date (as the same may be extended from time
to time) for filing the final Federal income tax return in respect of
each taxable year, provide to the Co- Administrative Agents a
certificate (a "Tax Certificate"), signed by the president or the chief
financial officer of Flagstar, stating that the common parent of the
affiliated group (within the meaning of Section 1504(a)(1) of the
Internal Revenue Code) of which Flagstar is a member has paid to the
Internal Revenue Service or other taxing authority, or to Flagstar, the
full amount that such affiliated group is required to pay in respect of
Federal income tax for such year and that Flagstar and its Subsidiaries
have received any amounts payable to them, and have not paid amounts in
respect of taxes (Federal, state, local or foreign) in excess of the
amount they are required to pay, under the Tax Sharing Agreement in
respect of such taxable year.
(s) Environmental Conditions. Promptly after the occurrence
thereof, provide to the Co-Administrative Agents notice of any
condition or occurrence on any property of any Loan Party or any of its
Restricted Subsidiaries that (i) results in a noncompliance by any Loan
Party or any of its Restricted Subsidiaries with any Environmental Law
or Environmental Permit that is reasonably expected to have a Material
Adverse Effect, (ii) is reasonably likely to form the basis of an
Environmental Action against any Loan Party or any of its Restricted
Subsidiaries or such property that is reasonably expected to have a
Material Adverse Effect, or (iii) is reasonably likely to cause any
such property to be subject to any material restrictions on ownership,
occupancy, use or transferability under any Environmental Law.
(t) Other Information. Provide to the Co-Administrative Agents
such other information respecting the business, condition (financial or
otherwise), operations, performance, properties or prospects of any
Loan Party or any of its Restricted Subsidiaries as any Lender Party
through the Funding Agent may from time to time reasonably request.
SECTION 5.04. Financial Covenants. So long as any Advance or
Letter of Credit shall be outstanding or any Lender shall have any Commitment
hereunder, Flagstar will not, unless the Required Lenders shall otherwise
consent in writing:
(a) Total Debt to EBITDA. Permit the ratio of (i) Total Debt
outstanding on the last day of any fiscal quarter less Surplus Cash to
(ii) EBITDA of Flagstar and its Restricted Subsidiaries on a
Consolidated basis for the Rolling Period then ended to be more than
the amount for such Rolling Period set forth below:
Rolling Periods Ending Ratio
June 30, 1996 7.50:1.00
September 30, 1996 7.60:1.00
December 31, 1996 7.50:1.00
March 31, 1997 7.50:1.00
June 30, 1997 7.20:1.00
September 30, 1997 7.00:1.00
December 31, 1997 6.80:1.00
March 31, 1998 6.60:1.00
June 30, 1998 6.40:1.00
September 30, 1998 6.20:1.00
December 31, 1998 6.00:1.00
March 31, 1999 6.00:1.00
(b) Senior Debt to EBITDA. Permit the ratio of (i) Senior Debt
outstanding on the last day of any fiscal quarter less Surplus Cash to
(ii) EBITDA of Flagstar and its Restricted Subsidiaries on a
Consolidated basis for the Rolling Period then ended to be more than
the amount for such Rolling Period set forth below:
Rolling Periods Ending Ratio
June 30, 1996 3.60:1.00
September 30, 1996 3.65:1.00
December 31, 1996 3.60:1.00
March 31, 1997 3.60:1.00
June 30, 1997 3.50:1.00
September 30, 1997 3.35:1.00
December 31, 1997 3.25:1.00
March 31, 1998 3.15:1.00
June 30, 1998 3.00:1.00
September 30, 1998 3.00:1.00
December 31, 1998 2.90:1.00
March 31, 1999 2.90:1.00
(c) Interest Coverage Ratio. Permit the Interest Coverage
Ratio to be less than the amount for such Rolling Period set forth
below:
Rolling Periods Ending Ratio
June 30, 1996 1.15:1.00
September 30, 1996 1.10:1.00
December 31, 1996 1.15:1.00
March 31, 1997 1.15:1.00
June 30, 1997 1.25:1.00
September 30, 1997 1.25:1.00
December 31, 1997 1.35:1.00
March 31, 1998 1.35:1.00
June 30, 1998 1.40:1.00
September 30, 1998 1.45:1.00
December 31, 1998 1.50:1.00
March 31, 1999 1.50:1.00
(d) Capital Expenditures. Make, or permit any of its
Restricted Subsidiaries to make, any Capital Expenditure that would
cause the aggregate amount of all Capital Expenditures made by Flagstar
and its Restricted Subsidiaries on a Consolidated basis to exceed the
amount set forth below for each period set forth below:
Fiscal Year Ending In Amount
December 1996 $ 80,000,000
December 1997 115,000,000
December 1998 115,000,000
Fiscal Quarter Ending Amount
March 31, 1999 $30,000,000
provided that in any fiscal year the amount specified above may be
increased by an amount equal to (i) the amount set forth above
applicable to the immediately preceding year minus (ii) the amount of
Capital Expenditures actually made by Flagstar and its Restricted
Subsidiaries in such preceding fiscal year, provided, however, that
Capital Expenditures made in any fiscal year shall be deemed to be made
first as a use of the limit of Capital Expenditures set forth above for
such fiscal year and thereafter as a use of Capital Expenditures
permitted to be made pursuant to the immediately preceding proviso;
provided further that, for purposes of this Section 5.04(d), (i)
Investments made during any period in reliance on Section 5.02(f)(xii)
shall be deemed to constitute a Capital Expenditure made during such
period by Flagstar and its Restricted Subsidiaries on a Consolidated
basis in an amount equal to the aggregate amount of such Investment
(including, without limitation, the aggregate principal amount of Debt
incurred or assumed in connection therewith), (ii) Investments
permitted by Section 5.02(f)(xiii) shall not be deemed to be Capital
Expenditures and (iii) acquisitions of restaurants for the purpose of
transferring such properties to franchisees as permitted by Section
5.02(e)(x) shall not be deemed to be Capital Expenditures to the extent
that such restaurants are sold to franchisees within 90 days following
the acquisition thereof.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following
events ("Events of Default") shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any
Advance when the same becomes due and payable; or
(b) The Borrower shall fail to pay any amount of interest on
any Advance, or any Loan Party shall fail to make any other payment
under any Loan Document, within two days after the same becomes due and
payable; or
(c) any representation or warranty made or deemed made by any
Loan Party (including any Person acting in the capacity of an officer
of any Loan Party) under or in connection with any Loan Document shall
prove to have been incorrect in any material respect when made or
deemed to have been made; or
(d) Flagstar shall fail to perform or observe any term,
covenant or agreement contained in Section 5.01(k), 5.01(l), 5.02(a)
through (i), inclusive, 5.02(l) and 5.02(n) through (q) inclusive,
5.03(a) or 5.04; or
(e) any Loan Party shall fail to perform any other term,
covenant or agreement contained in any Loan Document on its part to be
performed or observed if such failure shall remain unremedied for 10
days after written notice thereof shall have been given to Flagstar by
the Funding Agent or any Lender Party; or
(f) any Loan Party or any of its Subsidiaries shall fail to
pay any principal of, premium or interest on or any other amount
payable in respect of any Debt (other than Debt described in clause (h)
of the definition of such term) that is outstanding in a principal
amount of at least $10,000,000 in the aggregate (but excluding Debt
outstanding hereunder) of such Loan Party or Subsidiary (as the case
may be), when the same becomes due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise), and
such failure shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to any Debt (other
than Debt described in clause (h) of the definition of such term); or
any other event shall occur or condition shall exist under any
agreement or instrument relating to any Debt (other than Debt described
in clause (h) of the definition of such term) and shall continue after
the applicable grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to accelerate,
or, in the case of any Loan Party or any of its Restricted
Subsidiaries, to permit the acceleration of, the maturity of such Debt
or such Debt shall be declared to be due and payable or required to be
prepaid (other than by a regularly scheduled required prepayment),
redeemed, purchased or defeased, or an offer to prepay, redeem,
purchase or defease such Debt shall be required to be made, in each
case prior to the stated maturity thereof; or
(g) any Loan Party or any of its Subsidiaries shall generally
not pay its debts as such debts become due, or shall make a general
assignment for the benefit of creditors; or an executive officer of any
Loan Party shall admit in writing the inability of it or any of its
Subsidiaries to pay its debts generally; or any proceeding shall be
instituted by any Loan Party or any of its Subsidiaries or against any
Loan Party or any of its Qualifying Subsidiaries, in any such case
seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment
of a receiver, trustee, or other similar official for it or for any
substantial part of its property and, in the case of any such
proceeding instituted against any Loan Party (but not instituted by
it), either such proceeding shall remain undismissed or unstayed for a
period of 30 days, or in the case of any such proceeding instituted
against any Loan Party or any of its Qualifying Subsidiaries (but not
instituted by it) any of the actions sought in such proceeding
(including, without limitation, the entry of an order for relief
against, or the appointment of a receiver, trustee, custodian or other
similar official for, it or for any substantial part of its property)
shall occur (for purposes of this subsection (g), "Qualifying
Subsidiary" means any Subsidiary that owns assets valued at $5,000,000
or more or, together with the assets of any other Subsidiary subject
to the provisions of this subsection (g), owns assets valued at
$10,000,000 or more); or any Loan Party shall take any corporate action
to authorize any of the actions set forth above in this subsection
(g); or
(h) judgments or orders for the payment of money in excess of
$5,000,000 in the aggregate shall be rendered against, and be
unsatisfied by, any Loan Party or any of its Restricted Subsidiaries
and either (i) enforcement proceedings shall be pending upon such
judgment or order and a stay of such enforcement proceedings shall not
be in effect; or (ii) there shall be any period of 20 consecutive days
during which a stay of enforcement of such judgment or order, by reason
of a pending appeal or otherwise, shall not be in effect; or
(i) any non-monetary judgment or order shall be rendered
against any Loan Party or any of its Restricted Subsidiaries that is
reasonably likely to have a Material Adverse Effect and either (x)
enforcement proceedings shall have been commenced by any person upon
such judgment or order and a stay of such enforcement proceedings shall
not be in effect; or (y) there shall be any period of 20 consecutive
days during which a stay of enforcement of such judgment or order, by
reason of a pending appeal or otherwise, shall not be in effect; or
(j) Any provision of any Loan Document after delivery thereof
pursuant to Section 3.01 or 5.01(l) shall for any reason, other than by
reason of any act or omission by the Funding Agent, any
Co-Administrative Agent or any Lender Party, cease to be valid and
binding on or enforceable against any Loan Party party to it, or any
such Loan Party shall so state in writing; or
(k) Any Collateral Document after delivery thereof pursuant to
Section 3.01 or 5.01(l) shall for any reason (other than pursuant to
the terms thereof or by reason of any act or omission by the Funding
Agent, any Co-Administrative Agent, or any Lender Party) cease to
create a valid Lien on any item or items of Collateral having a fair
market value of at least $5,000,000 purported to be covered thereby, or
any such Lien which the Funding Agent shall have taken steps to perfect
shall cease or fail to constitute a perfected first priority Lien on
any such item of Collateral; or
(l) (i) Any Person or two or more Persons acting in concert
(other than KKR, GTO and their respective Affiliates) shall acquire
beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act of
1934, as amended), of securities of FCI representing more
of the combined voting power of all Voting Stock of FCI than the
beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act of
1934, as amended) of securities of FCI representing the combined voting
power of all Voting Stock of FCI then held by KKR and its Affiliates
other than Persons that are Affiliates of KKR solely as a result of
owning stock of FCI or (ii) any Person or two or more Persons acting in
concert (other than KKR and its Affiliates) shall have acquired by
contract or otherwise, or shall have entered into a contract or
arrangement that, upon consummation, will result in its or their
acquisition of, the power to exercise, directly or indirectly, a
controlling influence over the management or policies of Flagstar or
FCI or (iii) Flagstar shall cease at any time to be a wholly owned
Subsidiary of FCI; or
(m) Any ERISA Event shall have occurred with respect to a Plan
and the sum (determined as of the date of occurrence of such ERISA
Event) of the Insufficiency of such Plan and the Insufficiency of any
and all other Plans with respect to which an ERISA Event shall have
occurred and then exist (or in the case of a Plan with respect to which
an ERISA Event described in clauses (c) through (e) of the definition
of ERISA Event shall have occurred and then exist, the liability
related thereto) has, or is reasonably likely to have, a Material
Adverse Effect; or
(n) Any Loan Party or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that it has incurred
Withdrawal Liability to such Multiemployer Plan in an amount that, when
aggregated with all other amounts required to be paid to Multiemployer
Plans by the Loan Parties and the ERISA Affiliates in connection with
Withdrawal Liabilities (determined as of the date of such notification)
has, or is reasonably likely to have, a Material Adverse Effect; or
(o) Any Loan Party or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or is being terminated, within the meaning of
Title IV of ERISA, if as a result of such reorganization or termination
the aggregate annual contributions of the Loan Parties and the ERISA
Affiliates to all Multiemployer Plans that are then in reorganization
or being terminated have been or will be increased over the amounts
contributed to such Multiemployer Plans for the plan year of each such
Multiemployer Plan immediately preceding the plan year in which such
reorganization or termination occurs by an amount which has, or is
reasonably likely to have, a Material Adverse Effect; or
(p) FCI or any other Person of which Flagstar and its
Subsidiaries may from time to time be Subsidiaries, or any Subsidiary
(other than Flagstar and its Subsidiaries) of FCI or any such other
Person, shall create, incur, assume or suffer to exist any Lien on any
of its properties or any Debt, other than (i) trade payables incurred
in the ordinary course of business consistent with its status as a
holding company and not overdue by more than 60 days, (ii) Debt of the
kind described in clause (g) of the definition of Debt, (iii) Debt of
Flagstar and its Restricted Subsidiaries permitted under this Agreement
and Debt of Unrestricted Subsidiaries of Flagstar, (iv) Liens on the
property of Flagstar and its Subsidiaries permitted under this
Agreement and Liens on the property of Unrestricted Subsidiaries of
Flagstar and (v) Debt of FCI incurred pursuant to the exchange of FCI's
$2.25 Series A Cumulative Convertible Exchangeable Preferred Stock for
9% Convertible Subordinated Debentures due July 15, 2017 in a principal
amount equal to $25.00 per share of Preferred Stock so exchanged, in
accordance with the terms and conditions of such Preferred Stock; or
(q) any Loan Party or any of its Restricted Subsidiaries shall
fail to pay any amount payable in respect of any Hedge Agreement having
a notional amount of at least $20,000,000 when the same becomes due and
payable (whether by scheduled payment, termination or otherwise), and
such failure shall continue after the applicable grace period, if any,
specified in such Hedge Agreement;
then, and in any such event, the Funding Agent (i) shall at the request, or may
with the consent, of the Required Lenders, by notice to the Borrower, declare
the obligation of each Appropriate Lender to make Advances and of each Issuing
Bank to issue Letters of Credit to be terminated, whereupon the same shall
forthwith terminate, and (ii) shall at the request, or may with the consent, of
the Required Lenders, (A) by notice to the Borrower, declare the Notes, all
interest thereon and all other amounts payable under this Agreement and the
other Loan Documents to be forthwith due and payable, whereupon the Notes, all
such interest and all such amounts shall become and be forthwith due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Borrower and (B) in the event that
the terms of the documentation for any industrial revenue bond or similar
transaction in support of which a Letter of Credit has been issued expressly
provide that all Obligations thereunder may be declared to be due and payable at
any time by the giving of notice to such effect by the issuer of such Letter of
Credit, request that all Obligations under such industrial revenue bond or
similar transaction be so declared to be due and payable; provided, however,
that in the event of an actual or deemed entry of an order for relief with
respect to any Loan Party under the Federal Bankruptcy Code, (x) the obligation
of each Lender to make Advances (other than Letter of Credit Advances by an
Issuing Bank or a Lender pursuant to Section 2.13(c) and Swing Line Advances by
a Lender pursuant to Section 2.02(b)(ii)) and of each Issuing Bank to issue
Letters of Credit shall automatically be terminated and (y) the Notes, all such
interest and all such amounts (including, without limitation, amounts payable by
the Borrower upon demand by the Funding Agent pursuant to Section 6.02) shall
automatically become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived by
the Borrower.
SECTION 6.02. Actions in Respect of the Letters of Credit upon
Default. If any Event of Default shall have occurred and be continuing, the
Funding Agent may, irrespective of whether it is taking any of the actions
described in Section 6.01 or otherwise, make demand upon the Borrower to, and
forthwith upon such demand the Borrower shall, pay to the Funding Agent on
behalf of the Lender Parties in same day funds at the Funding Agent's office
designated in such demand, for deposit in the Borrower Cash Collateral Account,
an amount equal to the aggregate Available Amount of all Letters of Credit then
outstanding. If at any time the Funding Agent determines that any funds held in
the Borrower Cash Collateral Account are subject to any right or claim of any
Person other than the Funding Agent and the Secured Parties or that the total
amount of such funds is less than the aggregate Available Amount of all Letters
of Credit, the Borrower shall, forthwith upon demand by the Funding Agent, pay
to the Funding Agent, as additional funds to be deposited and held in the
Borrower Cash Collateral Account, an amount equal to the excess of (a) such
aggregate Available Amount over (b) the total amount of funds, if any, then held
in the Borrower Cash Collateral Account that the Funding Agent reasonably
determines to be free and clear of any such right and claim.
ARTICLE VII
THE AGENTS
SECTION 7.01. Authorization and Action. Each Lender Party (in
its capacities as a Lender, the Swing Line Bank (if applicable), an Issuing Bank
(if applicable) and a potential counterparty to a Bank Hedge Agreement) hereby
appoints and authorizes each of the Agents to take such action as agent on its
behalf and to exercise such powers and discretion under this Agreement and the
other Loan Documents as are delegated to the Funding Agent or such
Co-Administrative Agent, as the case may be, by the terms hereof, together with
such powers and discretion as are reasonably incidental thereto. As to any
matters not expressly provided for by the Loan Documents (including, without
limitation, enforcement or collection of the Notes), neither the Funding Agent
nor any Co- Administrative Agent shall be required to exercise any discretion or
take any action, but shall be required to act or to refrain from acting (and
shall be fully protected in so acting or refraining from acting) upon the
instructions of the Required Lenders, and such instructions shall be binding
upon all Lender Parties and all holders of Notes; provided, however, that
neither the Funding Agent nor any Co-Administrative Agent shall be required to
take any action that exposes the Funding Agent or such Co-Administrative Agent,
as the case may be, to personal liability or that is contrary to this Agreement
or applicable law. The Funding Agent agrees to give to each Lender Party prompt
notice of each notice given to it by the Borrowers pursuant to the terms of this
Agreement. Each Lender Party hereby authorizes and directs the Funding Agent to
agree to and accept on behalf of the Lender Parties on the Closing Date the
Guaranty, each of the Collateral Documents to which the Funding Agent is a
party and the Subordination Agreement.
SECTION 7.02. Agents' Reliance, Etc. None of the Agents nor
any of their respective directors, officers, agents or employees shall be liable
for any action taken or omitted to be taken by it or them under or in connection
with the Loan Documents, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, each of the
Agents: (a) may treat the payee of any Note as the holder thereof until the
Funding Agent receives and accepts an Assignment and Acceptance entered into by
the Lender that is the payee of such Note, as assignor, and an Eligible
Assignee, as assignee, as provided in Section 8.07; (b) may consult with legal
counsel (including counsel for any Loan Party), independent public accountants
and other experts selected by them and shall not be liable for any action taken
or omitted to be taken in good faith in accordance with the advice of such
counsel, accountants or experts; (c) make no warranty or representation to any
Lender Party and shall not be responsible to any Lender Party for any
statements, warranties or representations (whether written or oral) made in or
in connection with the Loan Documents; (d) shall not have any duty to ascertain
or to inquire as to the performance or observance of any of the terms, covenants
or conditions of any Loan Document on the part of any Loan Party or to inspect
the property (including the books and records) of any Loan Party; (e) shall not
be responsible to any Lender Party for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, any Loan Document or any other instrument or
document furnished pursuant thereto; and (f) shall incur no liability under or
in respect of any Loan Document by acting upon any notice, consent, certificate
or other instrument or writing (which may be by telegram, telecopy, cable or
telex) believed by it to be genuine and signed or sent by the proper party or
parties.
SECTION 7.03. The Agents and Their Affiliates. With respect to
their respective Commitments, the Advances made by them and the Note issued to
them, each of the Agents, in its capacity as a Lender Party hereunder, shall
have the same rights and powers under the Loan Documents as any other Lender
Party and may exercise the same as though it were not an Agent; and the term
"Lender Party" or "Lender Parties" shall, unless otherwise expressly indicated,
include each of the Agents in their respective individual capacities. Each of
the Agents and their respective affiliates may accept deposits from, lend money
to, act as trustee under indentures of, accept investment banking engagements
from and generally engage in any kind of business with, any Loan Party, any of
its Subsidiaries and any Person who may do business with or own securities of
any Loan Party or any such Subsidiary, all as if such Agent were not an Agent
and without any duty to account therefor to the Lender Parties.
SECTION 7.04. Lender Party Credit Decision. Each Lender Party
acknowledges that it has, independently and without reliance upon any of the
Agents or any other Lender Party and based on the financial statements referred
to in Section 4.01 and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender Party also acknowledges that it will, independently and
without reliance upon any of the Agents or any other Lender Party and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement.
SECTION 7.05. Indemnification. (a) The Lender Parties agree to
indemnify the Funding Agent and each of the Co-Administrative Agents (to the
extent not promptly reimbursed by the Borrower) from and against such Lender
Party's ratable share (determined as provided below) of any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever that may be imposed
on, incurred by, or asserted against the Funding Agent or any Co-Administrative
Agent in any way relating to or arising out of the Loan Documents or any action
taken or omitted by the Funding Agent or any Co-Administrative Agent under the
Loan Documents; provided, however, that no Lender Party shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from gross
negligence or willful misconduct on the part of the Funding Agent or such
Co-Administrative Agent, as the case may be. Without limitation of the
foregoing, each Lender Party agrees to reimburse the Funding Agent and each of
the Co-Administrative Agents promptly upon demand for such Lender Party's
ratable share of any costs and expenses (including, without limitation, fees and
expenses of counsel) payable by the Borrower under Section 8.04, to the extent
that the Funding Agent or such Co-Administrative Agent is not promptly
reimbursed for such costs and expenses by the Borrower. For purposes of this
Section 7.05(a), the Lender Parties' respective ratable shares of any amount
shall be determined, at any time, according to the sum of (i) the aggregate
principal amount of the Advances outstanding at such time and owing to the
respective Lender Parties plus (ii) their respective Pro Rata Shares of the
aggregate Available Amount of all Letters of Credit outstanding at such time
plus (iii) their respective Unused Working Capital Commitments at such time;
provided that the aggregate principal amount of Swing Line Advances owing to the
Swing Line Bank and of Letter of Credit Advances owing to any Issuing Bank shall
be considered to be owed to the Lenders ratably in accordance with their
respective Working Capital Commitments. In the event that any Defaulted Advance
shall be owing by any Defaulting Lender at any time, such Lender Party's
Commitment with respect to the Facility under which such Defaulted Advance was
required to have been made shall be considered to be unused for purposes of this
Section 7.05(a) to the extent of the amount of such Defaulted Advance. The
failure of any Lender Party to reimburse the Agent promptly upon demand for its
ratable share of any amount required to be paid by the Lender Party to the Agent
as provided herein shall not relieve any other Lender Party of its obligation
hereunder to reimburse the Agent for its ratable share of such amount, but no
Lender Party shall be responsible for the failure of any other Lender Party to
reimburse the Agent for such other Lender Party's ratable share of such amount.
Without prejudice to the survival of any other agreement of any Lender Party
hereunder, the agreement and obligations of each Lender Party contained in this
Section 7.05(a) shall survive the payment in full of principal, interest and all
other amounts payable hereunder and under the other Loan Documents.
(b) Each Lender Party severally agrees to indemnify each
Issuing Bank (to the extent not promptly reimbursed by the Borrower) from and
against such Lender Party's ratable share (determined as provided below) of any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind (the "Indemnified
Liabilities") or nature whatsoever that may be imposed on, incurred by, or
asserted against such Issuing Bank in any way relating to or arising out of the
Loan Documents or any action taken or omitted by such Issuing Bank under the
Loan Documents other than Indemnified Liabilities that (x) relate to Letters of
Credit continuing beyond the Termination Date and (y) arise after the
Termination Date; provided, however, that no Lender Party shall be liable for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from such
Issuing Bank's gross negligence or willful misconduct. Without limitation of the
foregoing, each Lender Party agrees to reimburse such Issuing Bank promptly upon
demand for its ratable share of any such costs and expenses (including, without
limitation, fees and expenses of counsel) payable by the Borrower under Section
8.04, to the extent that such Issuing Bank is not promptly reimbursed for such
costs and expenses by the Borrower. For purposes of this Section 7.05(b), the
Lender Parties' respective ratable shares of any amount shall be determined, at
any time, according to the sum of (i) the aggregate principal amount of the
Advances outstanding at such time and owing to the respective Lender Parties
plus (ii) their respective Pro Rata Shares of the aggregate Available Amount of
all Letters of Credit outstanding at such time plus (iii) their respective
Unused Working Capital Commitments at such time; provided that the aggregate
principal amount of Swing Line Advances owing to the Swing Line Bank and of
Letter of Credit Advances owing to any Issuing Bank shall be considered to be
owed to the Lenders ratably in accordance with their respective Working Capital
Commitments. In the event that any Defaulted Advance shall be owing by any
Defaulting Lender at any time, such Lender Party's Commitment with respect to
the Facility under which such Defaulted Advance was required to have been made
shall be considered to be unused for purposes of this Section 7.05(b) to the
extent of the amount of such Defaulted Advance. The failure of any Lender Party
to reimburse such Issuing Bank promptly upon demand for its ratable share of any
amount required to be paid by the Lender Parties to such Issuing Bank as
provided herein shall not relieve any other Lender Party of its obligation
hereunder to reimburse such Issuing Bank for its ratable share of such amount,
but no Lender Party shall be responsible for the failure of any other Lender
Party to reimburse such Issuing Bank for such other Lender Party's ratable share
of such amount. Without prejudice to the survival of any other agreement of any
Lender Party hereunder, the agreement and obligations of each Lender Party
contained in this Section 7.05(b) shall survive the payment in full of
principal, interest and all other amounts payable hereunder and under the
other Loan Documents.
SECTION 7.06. Successor Agents. (a) The Funding Agent may
resign at any time by giving written notice thereof to the Lender Parties and
the Borrower and may be removed at any time with or without cause by the
Required Lenders. Upon any such resignation or removal, the Required Lenders
shall have the right to appoint a successor Funding Agent, provided that prior
to the occurrence of an Event of Default, such successor Funding Agent shall not
be appointed without the prior consent of Flagstar, which consent shall not be
unreasonably withheld or delayed. If no successor Funding Agent shall have been
so appointed by the Required Lenders, and shall have accepted such appointment,
within 30 days after the retiring Funding Agent's giving of notice of
resignation or the Required Lenders' removal of the retiring Funding Agent, then
the retiring Funding Agent may, on behalf of the Lender Parties, appoint a
successor Funding Agent, which shall be a commercial bank organized under the
laws of the United States or of any State thereof and having a combined capital
and surplus of at least $250,000,000. Upon the acceptance of any appointment as
Funding Agent hereunder by a successor Funding Agent, such successor Funding
Agent shall succeed to and become vested with all the rights, powers,
discretion, privileges and duties of the retiring Funding Agent, and the
retiring Funding Agent shall be discharged from its duties and obligations as
Funding Agent under the Loan Documents. After any retiring Funding Agent's
resignation or removal hereunder as Funding Agent, the provisions of this
Article VII shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Funding Agent under this Agreement.
(b) Any Co-Administrative Agent may resign at any time by
giving written notice thereof to the other Agents, the Lenders and the
Borrowers, and may be removed at any time with or without cause by the Required
Lenders. Upon any such resignation or removal, the Required Lenders shall have
the right to appoint a successor Co-Administrative Agent, provided that prior to
the occurrence of an Event of Default, such successor or Co- Administrative
Agent shall not be appointed without the prior consent of Flagstar, which
consent shall not be unreasonably withheld or delayed. If no successor
Co-Administrative Agent shall have been so appointed by the Required Lenders,
and shall have accepted such appointment, within 30 days after the retiring
Co-Administrative Agent's giving of notice of resignation or the Required
Lenders' removal of the retiring Co-Administrative Agent, then the retiring
Co-Administrative Agent may, on behalf of the Lender Parties, appoint a
successor Co-Administrative Agent, which shall be a commercial bank organized
under the laws of the United States or of any State thereof and having a
combined capital and surplus of at least $250,000,000. Upon the acceptance of
any appointment as Co-Administrative Agent hereunder by a successor
Co-Administrative Agent, such successor Co-Administrative Agent shall succeed to
and become vested with all the rights, powers, discretion, privileges and duties
of the retiring Co-Administrative Agent, and the retiring Co-Administrative
Agent shall be discharged from its duties and obligations as a Co-Administrative
Agent under the Loan Documents. After any retiring Co-Administrative Agent's
resignation or removal hereunder as Co-Administrative Agent, the provisions of
this Article VII shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Co-Administrative Agent under this Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the Notes or any other Loan Document, nor consent
to any departure by the Borrower therefrom, shall in any event be effective
unless the same shall be in writing and signed (or, in the case of the
Collateral Documents, consented to) by the Required Lenders, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that (a) no amendment,
waiver or consent shall, unless in writing and signed by all the Lenders (other
than any Lender that is, at such time, a Defaulting Lender), do any of the
following: (i) waive any of the conditions specified in Section 3.01 or, in the
case of the initial Borrowing, Section 3.02, (ii) change the percentage of the
Commitment of the aggregate unpaid principal amount of the Notes or the
aggregate Available Amount of outstanding Letters of Credit that, in each case,
shall be required for the Lenders or any of them to take any action hereunder,
(iii) release all or substantially all of the Collateral from the Lien of the
Collateral Documents or release the stock of any Significant Subsidiaries from
the Lien of the Collateral Documents, (iv) reduce or limit the obligations of
the Guarantors under Section 1 of the Guaranty or otherwise limit liability of
any Guarantor that is a Qualifying Subsidiary with respect to the Obligations
owing to the Agents and the Lender Parties, (v) change the definition of
"Defaulting Lender" in Section 1.01 or (vi) amend this Section 8.01; and (b) no
amendment, waiver or consent shall, directly or indirectly, unless in writing
and signed by the Required Lenders and each Lender that has or is owed
Obligations under the Loan Documents that are modified by such amendment, waiver
or consent, (i) increase the Commitments of such Lender or subject such Lender
to any additional obligations, (ii) reduce the principal of, or interest on, the
Notes held by such Lender or any fees or other amounts payable hereunder to such
Lender, or (iii) postpone any date fixed for any payment of principal of, or
interest on, the Notes held by such Lender or any fees or other amounts payable
hereunder to such Lender; provided further that no amendment, waiver or consent
shall, unless in writing and signed by the Swing Line Bank or each Issuing Bank,
as the case may be, in addition to the Lenders required above to take such
action, affect the rights or obligations of the Swing Line Bank or of the
Issuing Banks, as the case may be, under this Agreement; and provided further
that no amendment, waiver or consent shall, unless in writing and signed by the
Funding Agent in addition to the Lenders required above to take such action,
affect the rights or duties of the Funding Agent under this Agreement or any
Note.
SECTION 8.02. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing (including
telegraphic, telecopy, telex or cable communication) and mailed, telegraphed,
telecopied, telexed, cabled or delivered, if to Flagstar or the Borrower, at
Flagstar's address at 203 East Main Street, Spartanburg, South Carolina 29319,
Attention: Chief Financial Officer; if to any Second Amendment Lender or
Co-Administrative Agent, at its Domestic Lending Office specified opposite its
name on Schedule 2.01 hereto; if to any other Lender Party, at its Domestic
Lending Office specified in the Assignment and Acceptance pursuant to which it
became a Lender Party; and if to the Funding Agent, at its address at 399 Park
Avenue, New York, New York 10043, Attention: Jeroen Fikke, Vice President; or,
as to the Borrower or the Funding Agent, at such other address as shall be
designated by such party in a written notice to the other parties and, as to
each other party, at such other address as shall be designated by such party in
a written notice to the Borrower and the Funding Agent. All such notices and
communications shall, when mailed, telegraphed, telecopied, telexed or cabled,
be effective when deposited in the mails, delivered to the telegraph company,
transmitted by telecopier, confirmed by telex answerback or delivered to the
cable company, respectively, except that notices and communications to the
Funding Agent pursuant to Article II, III or VII shall not be effective until
received by the Funding Agent. Delivery by telecopier of an executed counterpart
of any amendment, or waiver of any provision of this Agreement or the Notes or
any Exhibit hereto to be executed and delivered hereunder shall be effective as
delivery of a manually executed counterpart hereof.
SECTION 8.03. No Waiver; Remedies. No failure on the part of
any Lender Party or the Funding Agent to exercise, and no delay in exercising,
any right hereunder or under any Note shall operate as a waiver thereof; nor
shall any single or partial exercise of any such right preclude any other or
further exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
SECTION 8.04. Costs and Expenses. (a) Flagstar agrees to pay
on demand (i) all costs and expenses of the Funding Agent in connection with the
preparation, execution, delivery, administration, modification and amendment of
the Loan Documents (including, without limitation, (A) all due diligence,
collateral review, syndication, transportation, computer, duplication,
appraisal, audit, insurance, consultant, search, filing and recording fees and
expenses and (B) the reasonable fees and expenses of counsel for the Funding
Agent with respect thereto, with respect to advising the Funding Agent as to its
rights and responsibilities, or the perfection, protection or preservation of
rights or interests, under the Loan Documents, with respect to negotiations with
any Loan Party or with other creditors of any Loan Party or any of its
Subsidiaries arising out of any Default or any events or circumstances that may
give rise to a Default and with respect to presenting claims in or otherwise
participating in or monitoring any bankruptcy, insolvency or other similar
proceeding involving creditors' rights generally and any proceeding ancillary
thereto) and (ii) all costs and expenses of the Funding Agent and the Lender
Parties in connection with the enforcement of the Loan Documents, whether in
any action, suit or litigation, any bankruptcy, insolvency or other similar
proceeding affecting creditors' rights generally or otherwise (including,
without limitation, the reasonable fees and expenses of counsel for
the Funding Agent and each Lender with respect thereto).
(b) Flagstar agrees to indemnify and hold harmless the Funding
Agent and each Lender Party and each of their Affiliates and their officers,
directors, employees, agents and advisors (each, an "Indemnified Party") from
and against any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and expenses of counsel) that
may be incurred by or asserted or awarded against any Indemnified Party, in each
case arising out of or in connection with or by reason of, or in connection with
the preparation for a defense of, any investigation, litigation or proceeding
arising out of, related to or in connection with (i) the Loan Documents, the
Related Documents, the Lenders' agreement to make Advances hereunder or the use
or intended use of any of the Advances made or Letters of Credit issued
hereunder, (ii) any acquisition or proposed acquisition (including, without
limitation, any of the transactions contemplated hereby or by the Existing
Credit Agreement) by GTO, KKR, FCI, Flagstar or any of their respective
Subsidiaries or Affiliates of all or any portion of the stock or substantially
all the assets of Flagstar or any of its Subsidiaries or (iii) the actual or
alleged presence of Hazardous Materials on any property of FCI or any of its
Subsidiaries or any Environmental Action relating in any way to FCI or any of
its Subsidiaries, in each case whether or not such investigation, litigation or
proceeding is brought by any Loan Party, its directors, shareholders or
creditors or an Indemnified Party or any Indemnified Party is otherwise a party
thereto and whether or not the transactions contemplated hereby are consummated,
except to the extent such claim, damage, loss, liability or expense is found in
a final, non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party's gross negligence or willful misconduct.
(c) If any payment of principal of, or Conversion of, any
Eurodollar Rate Advance is made by the Borrower to or for the account of a
Lender Party other than on the last day of the Interest Period for such Advance,
as a result of a payment or Conversion pursuant to Section 2.08(b)(i) or
2.09(d), acceleration of the maturity of the Notes pursuant to Section 6.01 or
for any other reason, or by an Eligible Assignee to a Lender Party other than on
the last day of the Interest Period for such Advance upon an assignment of
rights and obligations under this Agreement pursuant to Section 8.07 as a result
of a demand by the Borrower pursuant to Section 8.07(a), or if the Borrower
elects to divide any existing Borrowing comprised of Eurodollar Rate Advances
other than on the last day of the Interest
Period for such Advances, or if the Borrower fails to make any prepayment in
accordance notice delivered in accordance with Section 2.05(a), the Borrower
shall, upon demand by such Lender Party (with a copy of such demand to the
Funding Agent), pay to the Funding Agent for the account of such Lender Party
any amounts required to compensate such Lender Party for any additional losses,
costs or expenses that it may reasonably incur as a result of such payment,
including, without limitation, any loss (including loss of anticipated profits),
cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by any Lender Party to fund or maintain such
Advance.
(d) If any Loan Party fails to pay when due any costs,
expenses or other amounts payable by it under any Loan Document, including,
without limitation, fees and expenses of counsel and indemnities, such amount
may be paid on behalf of such Loan Party by the Funding Agent or any Lender
Party, in its sole discretion.
(e) Without prejudice to the survival of any other agreement
of any Loan Party hereunder or under any other Loan Document, the agreements and
obligations of the Borrower contained in Sections 2.09, 2.11 and 2.13 and this
Section 8.04 shall survive the payment in full of principal, interest and all
other amounts payable hereunder and under any of the other Loan Documents.
SECTION 8.05. Right of Set-off. Upon (a) the occurrence and
during the continuance of any Event of Default and (b) the making of the request
or the granting of the consent specified by Section 6.01 to authorize the
Funding Agent to declare the Notes due and payable pursuant to the provisions of
Section 6.01, each Lender Party 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 otherwise 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 Party or such Affiliate to or for the credit or the
account of Flagstar or the Borrower against any and all of the Obligations of
Flagstar or the Borrower now or hereafter existing under this Agreement and the
Note held by such Lender Party, irrespective of whether such Lender Party shall
have made any demand under this Agreement or such Note and although such
obligations may be unmatured. Each Lender Party agrees promptly to notify
Flagstar after any such set-off and application; 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 Party and its Affiliates under this
Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) that such Lender Party and its Affiliates
may have.
SECTION 8.06. Binding Effect. This Agreement shall become
effective to bind the parties hereto when it shall have been executed by
Flagstar, the Borrower and the Funding Agent and when the Funding Agent shall
have been notified by each Co- Administrative Agent and Second Restatement
Lender that such Co-Administrative Agent or Second Restatement Lender, as the
case may be, has executed it and thereafter shall be binding upon and inure to
the benefit of Flagstar, the Borrower, the Funding Agent and each Co-
Administrative Agent and Lender Party and their respective successors and
assigns, except that neither Flagstar nor Funding shall have the right to assign
its rights hereunder or any interest herein without the prior written consent of
the Lender Parties; provided that if the Closing Date shall not occur, then the
amendment and restatement of the Existing Credit Agreement contemplated hereby
shall not become effective and this Agreement shall be of no further force and
effect.
SECTION 8.07. Assignments and Participations. (a) Each Lender
may and, if demanded by Flagstar (following a demand by such Lender pursuant to
Section 2.09 or 2.11) upon at least five Business Days' notice to such Lender
and the Funding Agent, will assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment, the Advances owing to it and the
Note or Notes held by it); provided, however, that (i) each such assignment
shall be of a fixed, and not a varying, percentage of all of the assigning
Lender's rights and obligations under and in respect of one or more Facilities,
(ii) except in the case of an assignment to a Person that immediately prior to
such assignment was a Lender or an assignment of all a Lender's rights and
obligations under this Agreement, the amount of the Commitment of the assigning
Lender being assigned pursuant to each such assignment (determined as of the
date of the Assignment and Acceptance with respect to such assignment) shall in
no event be less than $5,000,000, (iii) each such assignment shall be to an
Eligible Assignee, (iv) each such assignment made as a result of a demand by
Flagstar pursuant to this Section 8.07(a) shall be arranged by Flagstar after
consultation with the Funding Agent and shall be either an assignment of all of
the rights and obligations of the assigning Lender under this Agreement or an
assignment of a portion of such rights and obligations made concurrently with
another such assignment or other such assignments which together cover all of
the rights and obligations of the assigning Lender under this Agreement, (v) no
Lender shall be obligated to make any such assignment as a result of a demand by
Flagstar pursuant to this Section 8.07(a) unless and until such Lender shall
have received, as consideration for such assignment, one or more payments from
either Flagstar or one or more Eligible Assignees in an aggregate amount at
least equal to the sum of all amounts owing to such Lender under this Agreement
as of the effective date of such assignment (including, without limitation, the
aggregate outstanding principal amount of the Advances owing to such Lender as
of the effective date of such assignment, together with accrued interest thereon
to such date), and (vi) the parties to each such assignment shall execute and
deliver to the Funding Agent, for its acceptance and recording in the Register,
an Assignment and Acceptance, together with any Note or Notes subject to such
assignment and a processing and recordation fee of $3,500.
(b) Upon such execution, delivery, acceptance, recording and
payment, from and after the effective date specified in such Assignment and
Acceptance, (x) the assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, have the rights and obligations of a Lender
or Issuing Bank, as the case may be, hereunder and (y) the Lender or Issuing
Bank assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's or Issuing Bank's rights and obligations under
this Agreement, such Lender or Issuing Bank shall cease to be a party hereto).
(c) By executing and delivering an Assignment and Acceptance,
the assigning Lender Party thereunder and the assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender Party makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, this Agreement or any other Loan Document or any
other instrument or document furnished pursuant hereto or thereto; (ii) such
assigning Lender Party makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Loan Party or the
performance or observance by any Loan Party of any of their respective
obligations under any Loan Document or any other instrument or document
furnished pursuant thereto; (iii) such assignee confirms that it has received a
copy of this Agreement, together with copies of the financial statements
referred to in Section 4.01 and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (iv) such assignee will, independently and
without reliance upon the Funding Agent or any Co-Administrative Agent, such
assigning Lender Party or any other Lender Party and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement, (v) such
assignee confirms that it is an Eligible Assignee; (vi) such assignee appoints
and authorizes the Funding Agent and each Co-Administrative Agent to take such
action as agent on its behalf and to exercise such powers and discretion under
the Loan Documents as are delegated to them by the terms hereof, together with
such powers and discretion as are reasonably incidental thereto; (vii) such
assignee agrees that it will perform in accordance with their terms all of the
obligations that by the terms of this Agreement are required to be performed by
it as a Lender or Issuing Bank, as the case may be; and (viii) such assignee
attaches any U.S. Internal Revenue Service forms required under Section 2.11.
(d) The Funding Agent shall maintain at its address referred
to in Section 8.02 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Lender Parties and the Commitment under each Facility of, and principal
amount of the Advances owing under each Facility to, each Lender Party from
time to time (the "Register"). The entries in the Register shall be conclusive
and binding for all purposes, absent manifest error, and Flagstar, Funding, the
Agents and the Lender Parties may treat each Person whose name is recorded in
the Register as a Lender Party hereunder for all purposes of this Agreement.
The Register shall be available for inspection by Flagstar, the Borrower or any
Lender Party at any reasonable time and from time to time upon reasonable prior
notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender Party and an assignee, together with any Note or Notes
subject to such assignment, the Funding Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of Exhibit C
hereto, (i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to
Flagstar. Within five Business Days after its receipt of such notice, the
Borrower, at its own expense, shall execute and deliver to the Funding Agent
upon receipt of the surrendered Note or Notes a new Note to the order of the
assignee under such Assignment and Acceptance in an amount equal to the
Commitment assumed by it pursuant to such Assignment and Acceptance and, if the
assigning Lender Party has retained a Commitment hereunder, a new Note to the
order of the assigning Lender Party in an amount equal to the Commitment
retained by it hereunder. Such new Note or Notes shall be in an aggregate
principal amount equal to the aggregate principal amount of such surrendered
Note or Notes, shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of Exhibit A hereto.
(f) Each Lender Party may sell participations in all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitments, the Advances owing to it and
the Note or Notes held by it); provided, however, that (i) such Lender Party's
obligations under this Agreement (including, without limitation, its
Commitments) shall remain unchanged, (ii) such Lender Party shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender Party shall remain the holder of any such Note for all
purposes of this Agreement, (iv) the Borrower, the Funding Agent and the other
Lender Parties shall continue to deal solely and directly with such Lender Party
in connection with such Lender Party's rights and obligations under this
Agreement and (v) no participant under any such participation shall have any
right to approve any amendment or waiver of any provision of any Loan Document,
or any consent to any departure by any Loan Party therefrom, except to the
extent that such amendment, waiver or consent would reduce the principal of, or
interest on, the Notes or any fees or other amounts payable hereunder, in each
case to the extent subject to such participation, postpone any date fixed for
any payment of principal of, or interest on, the Notes or any fees or other
amounts payable hereunder, in each case to the extent subject to such
participation, or release all or substantially all of the Collateral.
Anything herein to the contrary notwithstanding, neither Flagstar nor the
Borrower shall, at any time, be obligated to pay to any Lender Party any sum in
excess of the sum Flagstar or the Borrower, as the case may be, would have been
obligated to pay to such Lender Party hereunder if such Lender Party had not
sold any participation in its rights and obligations under this Agreement.
(g) Each Issuing Bank may assign to one or more Eligible
Assignees all or a portion of its rights and obligations under the undrawn
portion of its Letter of Credit Commitment at any time; provided, however, that
(i) except in the case of an assignment to a Person that immediately prior to
such assignment was an Issuing Bank or an assignment of all of an Issuing Bank's
rights and obligations under this Agreement, the amount of the Letter of Credit
Commitment of the assigning Issuing Bank being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $5,000,000 and shall
be in an integral multiple of $1,000,000 in excess thereof, (ii) each such
assignment shall be to an Eligible Assignee and (iii) the parties to each such
assignment shall execute and deliver to the Funding Agent, for its acceptance
and recording in the Register, an Assignment and Acceptance, together with a
processing and recordation fee of $3,500.
(h) Any Lender Party may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.07, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower furnished to such Lender
Party by or on behalf of the Borrower; provided, however, that, prior to any
such disclosure, the assignee or participant or proposed assignee or participant
shall agree to preserve the confidentiality of any Confidential Information
received by it from such Lender Party.
(i) Notwithstanding any other provision set forth in this
Agreement, any Lender Party may at any time create a security interest in all or
any portion of its rights under this Agreement (including, without limitation,
the Advances owing to it and the Note or Notes held by it) in favor of any
Federal Reserve Bank in accordance with Regulation A of the Board of Governors
of the Federal Reserve System.
SECTION 8.08. Confidentiality. Neither the Funding Agent nor
any Lender Party shall disclose any Confidential Information to any Person
without the consent of the Borrower, other than (a) to the Funding Agent's or
such Lender Party's Affiliates and their officers, directors, employees, agents
and advisors and to actual or prospective Eligible Assignees and participants,
and then only on a confidential basis, (b) as required by any law, rule or
regulation or judicial process and (c) as requested or required by any state,
federal or foreign authority or examiner regulating banks or banking.
SECTION 8.09. Jurisdiction, Etc. (a) Each of the parties
hereto hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or any of the other Loan Documents to which it is a
party, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in any
such New York State court or, to the extent permitted by law, in such federal
court. Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that any party may otherwise
have to bring any action or proceeding relating to this Agreement or any of the
other Loan Documents in the courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or any of the
other Loan Documents to which it is a party in any New York State or federal
court. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.
SECTION 8.10. Governing Law. This Agreement and the Notes
shall be governed by, and construed in accordance with, the laws of the State
of New York.
SECTION 8.11. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 8.12. No Liability in Respect of Letters of Credit.
The Borrower assume all risks of the acts or omissions of any beneficiary or
transferee of any Letter of Credit with respect to its use of such Letter of
Credit. Neither any Issuing Bank nor any of its officers or directors shall be
liable or responsible for: (a) the use that may be made of any Letter of Credit
or any acts or omissions of any beneficiary or transferee in connection
therewith; (b) the validity, sufficiency or genuineness of documents, or of any
endorsement thereon, even if such documents should prove to be in any or all
respects invalid, insufficient, fraudulent or forged; (c) payment by such
Issuing Bank against presentation of documents that do not comply with the terms
of a Letter of Credit, including failure of any documents to bear any reference
or adequate reference to the Letter of Credit; or (d) any
other circumstances whatsoever in making or failing to make payment under any
Letter of Credit, except that the Borrower shall have a claim against such
Issuing Bank and such Issuing Bank shall be liable to the Borrower, to the
extent of any direct, but not consequential, damages suffered by the Borrower
that the Borrower proves were caused by (i) willful misconduct or gross
negligence on the part of such Issuing Bank in determining whether documents
presented under any Letter of Credit comply with the terms of the Letter of
Credit or (ii) willful failure on the part of such Issuing Bank to make lawful
payment under a Letter of Credit after the presentation to it of a draft and
certificates strictly complying with the terms and conditions of the Letter of
Credit. In furtherance and not in limitation of the foregoing, each Issuing Bank
may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary.
SECTION 8.13. Change of Lending Office. Subject to Section
8.07, each Lender Party may from time to time specify a different office as its
Domestic Lending Office or Eurodollar Lending Office and transfer and carry its
Commitments, Advances and Notes and any Letters of Credit issued by it at, to or
for the account of any branch office, subsidiary or affiliate of such Lender
Party; provided that, except in the case of any such transfer made at the
request of Flagstar, the Borrower shall not be responsible for costs arising
under Section 2.09, 2.11 or 2.13(d) resulting from any such transfer to the
extent not otherwise applicable to such Lender prior to such transfer.
SECTION 8.14. Waiver of Jury Trial. Each of Flagstar, the
Borrower, the Funding Agent, the Co-Administrative Agents and the Lender Parties
hereby irrevocably waives all right to trial by jury in any action, proceeding
or counterclaim (whether based on contract, tort or otherwise) arising out of or
relating to any of the Loan Documents, the Advances or the actions of the
Funding Agent, any Co-Administrative Agent or any Lender Party in the
negotiation, administration, performance or enforcement thereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
TWS FUNDING, INC.
By
Title:
FLAGSTAR CORPORATION
By
Title:
Funding Agent
CITIBANK, N.A.,
as Funding Agent
By
Title: Vice President
Co-Administrative Agents
BANKERS TRUST COMPANY,
as Co-Administrative Agent
By
Title:
CHEMICAL BANK,
as Co-Administrative Agent
By
Title:
CITIBANK, N.A.
as Co-Administrative Agent
By
Title: Vice President
Banks
BANKERS TRUST COMPANY
By
Title: Vice President
CHEMICAL BANK
By
Title: Managing Director
CITIBANK, N.A.
By
Title: Vice President
THE BANK OF NOVA SCOTIA
By
Title:
NATIONSBANK, N.A.
By
Title: Vice President
THE LONG-TERM CREDIT
BANK OF JAPAN, LIMITED -
NEW YORK BRANCH
By
Title:
SCHEDULE 2.01
COMMITMENTS AND APPLICABLE LENDING OFFICES
WORKING CAPITAL LETTER OF CREDIT
NAME OF BANK COMMITMENT COMMITMENT DOMESTIC LENDING OFFICE EURODOLLAR LENDING OFFICE
- ------------ ---------------------------- ----------------------- ----------------------- -------------------------
Bankers Trust Company $30,688,600.00 130 Liberty Street 130 Liberty Street
New York, New York New York, New York 10006
10006
Chemical Bank $50,688,600.00 270 Park Avenue 270 Park Avenue
New York, New York New York, New York 10017
10017
Citibank, N.A. $30,688,600.00 $75,000,000.00 399 Park Avenue 399 Park Avenue
New York, New York New York, New York
10043 10043
The Bank of Nova $15,000,000.00 $75,000,000.00 One Liberty Plaza One Liberty Plaza
Scotia New York, New York New York, New York 10006
10006
NationsBank, N.A. $12,934,200.00 100 North Tryon Street 100 North Tryon Street
Charlotte, North Carolina Charlotte, North Carolina
28255 28255
The Long-Term Credit $10,000,000.00 165 Broadway 1251 Avenue of the Americas
Bank of Japan, Limited- New York, New York New York, New York 10118
New York Branch 10006
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