EXHIBIT 10
EXECUTION COPY
CREDIT AGREEMENT
dated as of
October 2, 1997
among
TRICON GLOBAL RESTAURANTS, INC.,
The Lenders Party Hereto,
THE CHASE MANHATTAN BANK,
as Administrative Agent,
and
CHASE MANHATTAN BANK DELAWARE,
as Issuing Bank
___________________________
CITIBANK, N.A., MORGAN GUARANTY TRUST
COMPANY OF NEW YORK and NATIONSBANK, N.A.,
as Syndication Agents
CHASE SECURITIES INC., CITICORP SECURITIES, INC.,
J.P. MORGAN SECURITIES INC. and
NATIONSBANC MONTGOMERY SECURITIES, INC.,
as Arrangers
TABLE OF CONTENTS
ARTICLE I
Definitions
SECTION 1.01. Defined Terms
SECTION 1.02. Classification of Loans and
Borrowings
SECTION 1.03. Terms Generally
SECTION 1.04. Accounting Terms; GAAP
ARTICLE II
The Credits
SECTION 2.01. Commitments
SECTION 2.02. Loans and Borrowings
SECTION 2.03. Requests for Borrowings
SECTION 2.04. Competitive Bid Procedure
SECTION 2.05. Swingline Loans
SECTION 2.06. Letters of Credit
SECTION 2.07. Funding of Borrowings
SECTION 2.08. Interest Elections
SECTION 2.09. Termination and Reduction of
Commitments
SECTION 2.10. Repayment of Loans; Evidence of
Debt
SECTION 2.11. Prepayment of Loans
SECTION 2.12. Fees
SECTION 2.13. Interest
SECTION 2.14. Alternate Rate of Interest
SECTION 2.15. Increased Costs
SECTION 2.16. Break Funding Payments
SECTION 2.17. Taxes
SECTION 2.18. Payments Generally; Pro Rata
Treatment; Sharing of Setoffs
SECTION 2.19. Mitigation Obligations; Replacement
of Lenders
ARTICLE III
Representations and Warranties
SECTION 3.01. Organization; Powers
SECTION 3.02. Authorization; Enforceability
SECTION 3.03. Governmental Approvals; No
Conflicts
SECTION 3.04. Financial Condition; No Material
Adverse Change
SECTION 3.05. Properties
SECTION 3.06. Litigation and Environmental
Matters
SECTION 3.07. Compliance with Laws and
Agreements
SECTION 3.08. Investment and Holding Company
Status
SECTION 3.09. Taxes
SECTION 3.10. ERISA
SECTION 3.11. Disclosure
SECTION 3.12. Solvency
SECTION 3.13. Consummation of Spin-Off
Transactions
SECTION 3.14. Fountain Beverage Pour Agreements
SECTION 3.15. Initial Guarantors
ARTICLE IV
Conditions
SECTION 4.01. Effective Date
SECTION 4.02. Each Credit Event
ARTICLE V
Affirmative Convenants
SECTION 5.01. Financial Statements and Other
Information
SECTION 5.02. Notices of Material Events
SECTION 5.03. Existence; Conduct of Business
SECTION 5.04. Payment of Obligations
SECTION 5.05. Maintenance of Properties;
Insurance
SECTION 5.06. Books and Records; Inspection
Rights
SECTION 5.07. Compliance with Laws
SECTION 5.08. Use of Proceeds and Letters of
Credit
SECTION 5.09. Principal Domestic Subsidiaries
ARTICLE VI
Negative Covenants
SECTION 6.01. Subsidiary Indebtedness
SECTION 6.02. Liens
SECTION 6.03. Fundamental Changes
SECTION 6.04. Investments, Loans, Advances,
Guarantees and Acquisitions
SECTION 6.05. Hedging Agreements
SECTION 6.06. Restricted Payments
SECTION 6.07. Transactions with Affiliates
SECTION 6.08. Restrictive Agreements
SECTION 6.09. Issuances of Capital Stock by
Subsidiaries
SECTION 6.10. Spin-Off Transactions
SECTION 6.11. Leverage Ratio
SECTION 6.12. Fixed Charge Coverage Ratio
ARTICLE VII
Events of Default
SECTION 7.01 Events of Default
SECTION 7.02. Exclusion of Immaterial
Subsidiaries
ARTICLE VIII
The Administrative Agent
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices
SECTION 9.02. Waivers; Amendments
SECTION 9.03. Expenses; Indemnity; Damage Waiver
SECTION 9.04. Successors and Assigns
SECTION 9.05. Survival
SECTION 9.06. Counterparts; Integration;
Effectiveness
SECTION 9.07. Severability
SECTION 9.08. Right of Setoff
SECTION 9.09. Governing Law; Jurisdiction; Consent
to Service of Process
SECTION 9.10. WAIVER OF JURY TRIAL
SECTION 9.11. Headings
SECTION 9.12. Confidentiality
SECTION 9.13. Interest Rate Limitation
SECTION 9.14. Judgment Currency
SECTION 9.15. European Monetary Union
SCHEDULES:
Schedule A -- Initial Guarantors
Schedule 2.01 -- Commitments
Schedule 3.03 -- Governmental Consents
Schedule 3.06 -- Disclosed Matters
Schedule 3.11 -- Disclosure
Schedule 3.13 -- Spin-Off Transactions
Schedule 6.02 -- Existing Liens
Schedule 6.08 -- Existing Restrictions
EXHIBITS:
Exhibit A -- Form of Assignment and Acceptance
Exhibit B -- Form of Guarantee Agreement
Exhibit C-1 -- Form of Opinion of Christian Campbell
Exhibit C-2 -- Form of Opinion of Lawrence F. Dickie
Exhibit C-3 -- Form of Opinion of Cahill Gordon & Reindel
CREDIT AGREEMENT dated as of
October 2, 1997, among TRICON GLOBAL
RESTAURANTS, INC., the LENDERS party hereto,
and THE CHASE MANHATTAN BANK, as
Administrative Agent.
The parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this
Agreement, the following terms have the meanings specified
below:
"ABR", when used in reference to any Loan or
Borrowing, refers to whether such Loan, or the Loans
comprising such Borrowing, are bearing interest at a rate
determined by reference to the Alternate Base Rate.
"Adjusted LIBO Rate" means, with respect to any
Eurodollar Borrowing for any Interest Period, an interest
rate per annum (rounded upwards, if necessary, to the next
1/16 of 1%) equal to (a) the LIBO Rate for such Interest
Period multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" means The Chase Manhattan
Bank, in its capacity as administrative agent for the
Lenders hereunder.
"Administrative Questionnaire" means an
Administrative Questionnaire in a form supplied by the
Administrative Agent.
"Affiliate" means, with respect to a specified
Person, another Person that directly, or indirectly through
one or more intermediaries, Controls or is Controlled by or
is under common Control with the Person specified.
"Alternate Base Rate" means, for any day, a rate
per annum equal to the greatest of (a) the Prime Rate in
effect on such day and (b) the Federal Funds Effective Rate
in effect on such day plus 1/2 of 1%. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the
Federal Funds Effective Rate shall be effective from and
including the effective date of such change in the Prime
Rate or the Federal Funds Effective Rate, respectively.
"Alternative Currency" means any currency other
than dollars which is freely transferable and convertible
into dollars.
"Applicable Percentage" means, with respect to any
Revolving Lender, the percentage of the total Revolving
Commitments represented by such Lender's Revolving
Commitment. If the Revolving Commitments have terminated or
expired, the Applicable Percentages shall be determined
based upon the Revolving Commitments most recently in
effect, giving effect to any assignments.
"Applicable Rate" means, for any day, with respect
to any Eurodollar Revolving Loan or Eurodollar Term Loan, or
with respect to the facility fees payable hereunder, as the
case may be, the applicable rate per annum set forth below
under the caption "Eurodollar Revolving Spread", "Eurodollar
Term Spread" or "Facility Fee Rate", as the case may be,
based upon either (a) the ratings by Moody's and S&P,
respectively, applicable on such date to the Index Debt or
(b) the Leverage Ratio as of the most recent determination
date (and, if such ratings and the Leverage Ratio result in
the application of different Categories, the Category
resulting in the lower Eurodollar Revolving Spread,
Eurodollar Term Spread and Facility Fee Rate will apply);
provided that until the date that is three months after the
Effective Date, the Applicable Rate shall be based on
Category 3:
Index Leverage Eurodollar Eurodollar Facility
Debt Ratings: Ratio Revolving Term Fee Rate
Spread Spread
Category BBB/Baa2 <2.5 to 0.250% .375% 0.125%
1 or better 1.0
Category BBB-/Baa3 >2.5<3.25 0.350% .500% 0.150%
2 to 1.0
Category BB+/Ba1 >3.25<3.75 0.450% .625% 0.175%
3 to 1.0
Category BB/Ba2 >3.75<4.0 0.550% .750% 0.200%
4 to 1.0
Category Less than >4.0 to 0.625% .875% 0.250%
5 BB/Ba2 1.0
For purposes of the foregoing, (i) if either
Moody's or S&P shall not have in effect a rating for the
Index Debt (other than by reason of the circumstances
referred to in the last sentence of this definition), then
such rating agency shall be deemed to have established a
rating in Category 5; (ii) if the ratings established or
deemed to have been established by Moody's and S&P for the
Index Debt shall fall within different Categories, the
Applicable Rate shall be based on the higher of the two
ratings unless one of the two ratings is two or more
Categories lower than the other, in which case the
Applicable Rate shall be determined by reference to the
Category immediately above that of the lower of the two
ratings; (iii) if the ratings established or deemed to have
been established by Moody's and S&P for the Index Debt shall
be changed (other than as a result of a change in the rating
system of Moody's or S&P), such change shall be effective as
of the date on which it is first announced by the applicable
rating agency; (iv) each change in the Applicable Rate
resulting from a change in such ratings shall apply during
the period commencing on the effective date of such change
and ending on the date immediately preceding the effective
date of the next change in the Applicable Rate; (v) the
Leverage Ratio shall be determined as of the end of each
fiscal quarter of the Borrower's fiscal year based upon the
Borrower's consolidated financial statements delivered
pursuant to Section 5.01(a) or (b); and (vi) each change in
the Applicable Rate resulting from a change in the Leverage
Ratio shall be effective during the period commencing on and
including the date of delivery to the Administrative Agent
of such consolidated financial statements indicating such
change and ending on the date immediately preceding the
effective date of the next change in the Applicable Rate;
provided that the Leverage Ratio shall be deemed to be in
Category 5 (A) at any time that an Event of Default (other
than an Event of Default set forth in clauses (e) and (h) of
Section 7.01) has occurred and is continuing or (B) if the
Borrower fails to deliver the consolidated financial
statements required to be delivered by it pursuant to
Section 5.01(a) or (b), during the period from the
expiration of the time for delivery thereof until such
consolidated financial statements are delivered. If the
rating system of Moody's or S&P shall change, or if either
such rating agency shall cease to be in the business of
rating corporate debt obligations, the Borrower and the
Lenders shall negotiate in good faith to amend this
definition to reflect such changed rating system or the
unavailability of ratings from such rating agency and,
pending the effectiveness of any such amendment, the
Applicable Rate shall be determined by reference to the
rating most recently in effect prior to such change or
cessation.
"Arrangers" means Chase Securities Inc., Citicorp
Securities, Inc., J. P. Morgan Securities Inc. and
NationsBanc Montgomery Securities, Inc., in their capacities
as arrangers hereunder.
"Assignment and Acceptance" means an assignment
and acceptance entered into by a Lender and an assignee
(with the consent of any party whose consent is required by
Section 9.04), and accepted by the Administrative Agent, in
the form of Exhibit A or any other form approved by the
Administrative Agent.
"Availability Period" means the period from and
including the Effective Date to but excluding the earlier of
the Maturity Date and the date of termination of the
Commitments.
"Board" means the Board of Governors of the
Federal Reserve System of the United States of America.
"Borrower" means TRICON Global Restaurants, Inc.,
a North Carolina corporation.
"Borrowing" means (a) Loans of the same Class and
Type, made, converted or continued on the same date and, in
the case of Eurodollar Loans, as to which a single Interest
Period is in effect, (b) a Competitive Loan or group of
Competitive Loans of the same Type made on the same date and
as to which a single Interest Period is in effect or (c) a
Swingline Loan.
"Borrowing Request" means a request by the
Borrower for a Borrowing in accordance with Section 2.03.
"Business Day" means any day that is not a
Saturday, Sunday or other day on which commercial banks in
New York City are authorized or required by law to remain
closed; provided that, when used in connection with a
Eurodollar Loan, the term "Business Day" shall also exclude
any day on which banks are not open for dealings in dollar
deposits in the London interbank market.
"Capital Expenditures" means, for any period,
(a) the additions to property, plant and equipment and other
capital expenditures of the Borrower and its Included
Subsidiaries that are (or would be) set forth in a
consolidated statement of cash flows of the Borrower for
such period prepared in accordance with GAAP (except for the
exclusion of Excluded Subsidiaries) and (b) Capital Lease
Obligations incurred by the Borrower and its Included
Subsidiaries during such period.
"Capital Lease Obligations" of any Person means
the obligations of such Person to pay rent or other amounts
under any lease of (or other arrangement conveying the right
to use) real or personal property, or a combination thereof,
which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such
Person under GAAP, and the amount of such obligations shall
be the capitalized amount thereof determined in accordance
with GAAP.
"Change in Control" means (a) the acquisition of
ownership, directly or indirectly, beneficially or of
record, by any Person or group (within the meaning of the
Securities Exchange Act of 1934 and the rules of the
Securities and Exchange Commission thereunder as in effect
on the date hereof) of shares representing more than 25% of
the aggregate ordinary voting power represented by the
issued and outstanding capital stock of the Borrower; (b)
occupation of a majority of the seats (other than vacant
seats) on the board of directors of the Borrower by Persons
who were neither (i) nominated by the board of directors of
the Borrower nor (ii) appointed by directors so nominated;
or (c) the acquisition of direct or indirect Control of the
Borrower by any Person or group.
"Change in Law" means (a) the adoption of any law,
rule or regulation after the date of this Agreement, (b) any
change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance
by any Lender or the Issuing Bank (or, for purposes of
Section 2.15(b), by any lending office of such Lender or by
such Lender's or the Issuing Bank's holding company, if any)
with any request, guideline or directive (whether or not
having the force of law) of any Governmental Authority made
or issued after the date of this Agreement that would be
complied with by similarly situated banks acting reasonably.
"Class", when used in reference to any Loan or
Borrowing, refers to whether such Loan, or the Loans
comprising such Borrowing, are Revolving Loans, Term Loans,
Competitive Loans or Swingline Loans and, when used in
reference to any Commitment, refers to whether such
Commitment is a Revolving Commitment or a Term Commitment.
"Code" means the Internal Revenue Code of 1986, as
amended from time to time.
"Commitment" means a Revolving Commitment or Term
Commitment, or any combination thereof (as the context
requires).
"Competitive Bid" means an offer by a Lender to
make a Competitive Loan in accordance with Section 2.04.
"Competitive Bid Rate" means, with respect to any
Competitive Bid, the Margin or the Fixed Rate, as
applicable, offered by the Lender making such Competitive
Bid.
"Competitive Bid Request" means a request by the
Borrower for Competitive Bids in accordance with
Section 2.04.
"Competitive Loan" means a Loan made pursuant to
Section 2.04.
"Consolidated EBITDA" means, for any period,
Consolidated Net Income for such period, plus, without
duplication and to the extent deducted from revenues in
determining Consolidated Net Income, the sum of (a) the
aggregate amount of Consolidated Interest Expense for such
period, (b) the aggregate amount of income tax expense for
such period, (c) all amounts attributable to depreciation
and amortization for such period and (d) all non-cash
charges and non-cash losses during such period and minus,
without duplication and to the extent added to revenues in
determining Consolidated Net Income for such period, all
non-cash gains from the sale of assets during such period,
all as determined on a consolidated basis with respect to
the Borrower and the Included Subsidiaries in accordance
with GAAP; provided that Consolidated EBITDA shall be
determined (i) based on the financial statements presented
in the Registration Statement, in the case of any fiscal
quarters of the Borrower ending on or prior to June 14,
1997, (ii) based on financial statements prepared on the
same basis as those presented in the Registration Statement,
in the case of the fiscal quarter of the Borrower ending
September 6, 1997, and for the period from September 7,
1997, to the Effective Date, and (iii) based on actual
financial results thereafter.
"Consolidated EBITDAR" means, for any period, the
sum of Consolidated EBITDA for such period and Rental
Expense for such period.
"Consolidated Indebtedness" means, as of any date
of determination, (a) the aggregate principal amount of
Indebtedness of the Borrower and the Included Subsidiaries
outstanding as of such date (including Indebtedness of
Excluded Subsidiaries to the extent Guaranteed by the
Borrower or any Included Subsidiary), minus (b) the
aggregate amount of cash and Permitted Investments owned by
the Borrower and the Included Subsidiaries as of such date,
determined on a consolidated basis in accordance with GAAP
(except for the exclusion of Excluded Subsidiaries);
provided that, for purposes of this definition, the term
"Indebtedness" shall exclude obligations as an account party
in respect of letters of credit to the extent that such
letters of credit have not been drawn upon.
"Consolidated Interest Expense" means, for any
period, the interest expense, both expensed and capitalized
(including the interest component in respect of Capital
Lease Obligations), accrued or paid by the Borrower and the
Included Subsidiaries during such period, determined on a
consolidated basis in accordance with GAAP (except for the
exclusion of Excluded Subsidiaries); provided that interest
expense of an Excluded Subsidiary shall be deemed to be
interest expense of the Borrower to the extent such interest
expense relates to Indebtedness to the extent Guaranteed by
the Borrower or an Included Subsidiary.
"Consolidated Net Income" means, for any period,
net income or loss of the Borrower and the Subsidiaries for
such period determined on a consolidated basis in accordance
with GAAP; provided that there shall be excluded (a) the
income of any Person (other than a Foreign Subsidiary) in
which any other Person (other than the Borrower or any
Domestic Subsidiary or any director holding qualifying
shares in compliance with applicable law) has a joint
interest, except to the extent of the amount of dividends or
other distributions (including distributions made as a
return of capital or repayment of principal of advances)
actually paid to the Borrower or any Domestic Subsidiaries
by such Person, (b) the income of any Excluded Subsidiary,
except to the extent of the amount of dividends or other
distributions (including distributions made as a return of
capital or repayment of principal of advances) actually paid
to the Borrower or any Included Subsidiaries by such
Excluded Subsidiary during such period, (c) the income (or
loss) of any Person accrued prior to the date it becomes a
Subsidiary or is merged into or consolidated with the
Borrower or any of the Subsidiaries or the date such
Person's assets are acquired by the Borrower or any of the
Subsidiaries and (d) for purposes of Section 6.06, without
duplication and to the extent added to or subtracted from
revenues in determining net income or loss for such period,
all non-cash extraordinary items during such period, as
determined on a consolidated basis for the Borrower and the
Subsidiaries in accordance with GAAP.
"Contingent Rental Expense" means, for any period,
an amount equal to 25% of all minimum rental expenses (not
included in Rental Expense) for the fiscal year of the
Borrower ended as of the last day of such period (or, if
such period is not the Borrower's fiscal year, for the
fiscal year of the Borrower most recently ended prior to the
end of such period) of Persons other than the Borrower and
its Included Subsidiaries for which the Borrower or any
Included Subsidiary is contingently liable, by reason of any
Guarantee or otherwise.
"Control" means the possession, directly or
indirectly, of the power to direct or cause the direction of
the management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative
thereto.
"Default" means any event or condition which
constitutes an Event of Default or which upon notice, lapse
of time or both would, unless cured or waived, become an
Event of Default.
"Disclosed Matters" means the actions, suits and
proceedings and the environmental matters disclosed in
Schedule 3.06.
"Dollar Amount" means, in relation to any
Competitive Borrowing denominated in an Alternative
Currency, the amount designated by the Borrower as the
dollar amount of such Competitive Borrowing in the
Competitive Bid Request for such Borrowing, subject to
Section 2.04(g).
"dollars" or "$" refers to lawful money of the
United States of America.
"Domestic Subsidiary" means a Subsidiary that is
not a Foreign Subsidiary.
"Effective Date" means the date on which the
conditions specified in Section 4.01 are satisfied (or
waived in accordance with Section 9.02).
"Employee Programs Agreement" means the Employee
Programs Agreement, dated as of August 26, 1997, by and
between PepsiCo and the Borrower.
"Environmental Laws" means all laws, rules,
regulations, codes, ordinances, orders, decrees, judgments,
injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or
reclamation of natural resources, the management, release or
threatened release of any Hazardous Material or to health
and safety matters.
"Environmental Liability" means any liability,
contingent or otherwise (including any liability for
damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower or any Subsidiary
directly or indirectly resulting from or based upon
(a) violation of any Environmental Law, (b) the generation,
use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any
Hazardous Materials, (d) the release or threatened release
of any Hazardous Materials into the environment or (e) any
contract, agreement or other consensual arrangement pursuant
to which liability is assumed or imposed with respect to any
of the foregoing.
"Equivalent Amount" means, in connection with the
determination of the amount of a Competitive Loan to be made
in an Alternative Currency in relation to the Dollar Amount
of such Loan, the amount of such Alternative Currency
converted from such Dollar Amount at the spot buying rate of
the Lender that is to make such Loan (based on the London
interbank market rate then prevailing) for dollars against
such Alternative Currency as of approximately 9:00 a.m.,
New York City time, three Business Days before such date.
"ERISA" means the Employee Retirement Income
Security Act of 1974, as amended from time to time.
"ERISA Affiliate" means any trade or business
(whether or not incorporated) that, together with the
Borrower, is treated as a single employer under
Section 414(b) or (c) of the Code or, solely for purposes of
Section 302 of ERISA and Section 412 of the Code, is treated
as a single employer under Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as
defined in Section 4043 of ERISA or the regulations issued
thereunder with respect to a Plan (other than an event for
which the 30-day notice period is waived); (b) the existence
with respect to any Plan of an "accumulated funding
deficiency" (as defined in Section 412 of the Code or
Section 302 of ERISA), whether or not waived; (c) the filing
pursuant to Section 412(d) of the Code or Section 303(d) of
ERISA of an application for a waiver of the minimum funding
standard with respect to any Plan; (d) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability
under Title IV of ERISA with respect to the termination of
any Plan; (e) the receipt by the Borrower or any ERISA
Affiliate from the PBGC or a plan administrator of any
notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f)
the incurrence by the Borrower or any of its ERISA
Affiliates of any liability with respect to the withdrawal
or partial withdrawal from any Plan or Multiemployer Plan;
or (g) the receipt by the Borrower or any ERISA Affiliate of
any notice, or the receipt by any Multiemployer Plan from
the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected
to be, insolvent or in reorganization, within the meaning of
Title IV of ERISA.
"Eurodollar", when used in reference to any Loan
or Borrowing, refers to whether such Loan, or the Loans
comprising such Borrowing, are bearing interest at a rate
determined by reference to the Adjusted LIBO Rate (or, in
the case of a Competitive Loan, the LIBO Rate).
"Event of Default" has the meaning assigned to
such term in Article VII.
"Excluded Subsidiary" means a Foreign Subsidiary
of which securities or other ownership interests
representing less than 80% of the outstanding capital stock
or other equity interests, as the case may be, are, at the
time any determination is being made, beneficially owned,
whether directly or indirectly, by the Borrower.
"Excluded Taxes" means, with respect to the
Administrative Agent, any Lender, the Issuing Bank or any
other recipient of any payment to be made by or on account
of any obligation of the Borrower hereunder, (a) income or
franchise taxes imposed on (or measured by) its net income
by the United States of America, or by the jurisdiction
under the laws of which such recipient is organized or in
which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located,
(b) any branch profits taxes imposed by the United States of
America or any similar tax imposed by any other jurisdiction
in which the Borrower is located and (c) in the case of a
Foreign Lender (other than an assignee pursuant to a request
by the Borrower under Section 2.19(b)), any withholding tax
that is imposed on amounts payable to such Foreign Lender at
the time such Foreign Lender becomes a party to this
Agreement (or designates a new lending office) or is
attributable to such Foreign Lender's failure to comply with
Section 2.17(e), except to the extent that such Foreign
Lender (or its assignor, if any) was entitled, at the time
of designation of a new lending office (or assignment), to
receive additional amounts from the Borrower with respect to
such withholding tax pursuant to Section 2.17(a).
"Federal Funds Effective Rate" means, for any day,
the weighted average (rounded upwards, if necessary, to the
next 1/100 of 1%) of the rates on overnight Federal funds
transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next
succeeding 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 (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for
such day for such transactions received by the
Administrative Agent from three Federal funds brokers of
recognized standing selected by it.
"Financial Officer" means the chief financial
officer, principal accounting officer, treasurer or
controller of the Borrower.
"Fixed Charge Coverage Ratio" means, for any
period, the ratio of (i) Consolidated EBITDAR for such
period plus Contingent Rental Expense for such period minus
Capital Expenditures for such period to (ii) the sum of
Consolidated Interest Expense for such period plus Rental
Expense for such period plus Contingent Rental Expense for
such period.
"Fixed Rate" means, with respect to any
Competitive Loan (other than a Eurodollar Competitive Loan),
the fixed rate of interest per annum specified by the Lender
making such Competitive Loan in its related Competitive Bid.
"Fixed Rate Loan" means a Competitive Loan bearing
interest at a Fixed Rate.
"Foreign Exposure Limit" means, at any time, the
sum of:
(a) an amount equal to the sum of (i) all
investments existing on the Effective Date by the
Borrower and its Domestic Subsidiaries in the capital
stock of Foreign Subsidiaries, plus (ii) all loans and
advances existing on the Effective Date made by the
Borrower and its Domestic Subsidiaries to Foreign
Subsidiaries, plus (iii) all investments existing on
the Effective Date made by the Borrower and its
Domestic Subsidiaries in joint ventures, plus (iv) the
principal amount of all Indebtedness of joint ventures
Guaranteed as of the Effective Date by the Borrower or
any of its Domestic Subsidiaries, plus (v) the
principal amount of all Indebtedness of Foreign
Subsidiaries Guaranteed as of the Effective Date by the
Borrower or any of its Domestic Subsidiaries; plus
(b) $150,000,000; plus
(c) in the case of any determination made after
December 27, 1997, 20% of Consolidated EBITDA for each
fiscal year of the Borrower ended on or after
December 27, 1997, and prior to such time.
For purposes of this definition, (x) the items set
forth in clause (a) of this definition shall be determined
after giving effect to all adjustments made in connection
with the Spin-Off Transactions and (y) the items set forth
in clauses (a)(iv) and (v) shall be determined by reference
to the foreign currency exchange rate with respect to the
applicable currencies on the Effective Date available on
Bloomberg Daily Market Summary at the close of business on
the Effective Date or, if not so available, shall be
reasonably determined by the Borrower by reference to
information then available to it.
"Foreign Lender" means any Lender that is
organized under the laws of a jurisdiction other than that
in which the Borrower is located. For purposes of this
definition, the United States of America, each State thereof
and the District of Columbia shall be deemed to constitute a
single jurisdiction.
"Foreign Subsidiary" means a Subsidiary organized
under the laws of a jurisdiction other than the United
States of America, any State thereof or the District of
Columbia.
"Fountain Beverage Pour Agreements" means (i) the
letter agreement dated July 29, 1997 between, on the one
hand, Pepsi-Cola Company, a division of PepsiCo ("Pepsi-
Cola"), on its own behalf and on behalf of Pepsi/Lipton Tea
Partnership (the "Partnership"), and, on the other hand,
Taco Bell Corp., on its own behalf and on behalf of its
direct and indirect subsidiaries; (ii) the letter agreement
dated August 12, 1997 between, on the one hand, Pepsi-Cola,
on its own behalf and on behalf of the Partnership, and, on
the other hand, Kentucky Fried Chicken Corporation and
Kentucky Fried Chicken of California, Inc., on their own
behalf and on behalf of their direct and indirect
subsidiaries; and (iii) the letter agreement dated
August 12, 1997 between, on the one hand, Pepsi-Cola, on its
own behalf and on behalf of the Partnership, and, on the
other hand, Pizza Hut Inc., on its own behalf and on behalf
of its direct and indirect subsidiaries.
"GAAP" means generally accepted accounting
principles in the United States of America.
"Governmental Authority" means the government of
the United States of America, any other nation or any
political subdivision thereof, whether state or local, and
any agency, authority, instrumentality, regulatory body,
court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative
powers or functions of or pertaining to government.
"Guarantee" of or by any Person (the "guarantor")
means any obligation, contingent or otherwise, of the
guarantor guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether
directly or indirectly, and including any obligation of the
guarantor, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to
advance or supply funds for the purchase of) any security
for the payment thereof, (b) to purchase or lease property,
securities or services for the purpose of assuring the owner
of such Indebtedness or other obligation of the payment
thereof, (c) to maintain working capital, equity capital or
any other financial statement condition or liquidity of the
primary obligor so as to enable the primary obligor to pay
such Indebtedness or other obligation or (d) as an account
party in respect of any letter of credit or letter of
guaranty issued to support such Indebtedness or obligation;
provided that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary
course of business.
"Guarantee Agreement" means the Guarantee
Agreement substantially in the form of Exhibit B among the
Borrower, the Guarantors and the Administrative Agent.
"Guarantors" means the Initial Guarantors and any
other Subsidiaries that become parties to the Guarantee
Agreement.
"Hazardous Materials" means all explosive or
radioactive substances or wastes and all hazardous or toxic
substances, wastes or other pollutants, including petroleum
or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious
or medical wastes and all other substances or wastes of any
nature regulated pursuant to any Environmental Law.
"Hedging Agreement" means any interest rate
protection agreement, foreign currency exchange agreement or
other interest or currency exchange rate hedging
arrangement.
"Included Subsidiary" means any Subsidiary that is
not an Excluded Subsidiary.
"Indebtedness" of any Person means, without
duplication, (a) all obligations of such Person for borrowed
money or with respect to deposits or advances of any kind,
(b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all
obligations of such Person upon which interest charges are
customarily paid, (d) all obligations of such Person under
conditional sale or other title retention agreements
relating to property acquired by such Person, (e) all
obligations of such Person in respect of the deferred
purchase price of property or services (excluding accounts
payable incurred in the ordinary course of business),
(f) all Indebtedness of others secured by (or for which the
holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not
the Indebtedness secured thereby has been assumed, (g) all
Guarantees by such Person of outstanding Indebtedness of
others (other than Guarantees of contingent lease payments
related to sales of restaurants by the Borrower and the
Subsidiaries or their predecessors in interest (howsoever
effected)), (h) all Capital Lease Obligations of such
Person, (i) all obligations, contingent or otherwise, of
such Person as an account party in respect of letters of
credit and letters of guaranty and (j) all obligations,
contingent or otherwise, of such Person in respect of
bankers' acceptances; provided that obligations under the
Separation Agreement with respect to post-closing
adjustments, and obligations under the Tax Separation
Agreement, shall not be construed to constitute
"Indebtedness". The Indebtedness of any Person shall
include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to
the extent such Person is liable therefor as a result of
such Person's ownership interest in or other relationship
with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable
therefor.
"Indemnified Taxes" means Taxes other than
Excluded Taxes.
"Index Debt" means senior, unsecured, long-term
indebtedness for borrowed money of the Borrower that is not
guaranteed by any other Person or subject to any other
credit enhancement (regardless of whether there is any such
indebtedness outstanding).
"Information Memorandum" means the Confidential
Information Memorandum dated August 1997 relating to the
Borrower and the Transactions.
"Information Statement" means the Information
Statement of the Borrower dated August 28, 1997.
"Initial Guarantors" means the Subsidiaries listed
on Schedule A.
"Interest Election Request" means a request by the
Borrower to convert or continue a Revolving Borrowing or
Term Borrowing in accordance with Section 2.08.
"Interest Payment Date" means (a) with respect to
any ABR Loan (other than a Swingline Loan), the last day of
each March, June, September and December, (b) with respect
to any Eurodollar Loan, the last day of the Interest Period
applicable to the Borrowing of which such Loan is a part
and, in the case of a Eurodollar Borrowing with an Interest
Period of more than three months' duration, each day prior
to the last day of such Interest Period that occurs at
intervals of three months' duration after the first day of
such Interest Period, (c) with respect to any Fixed Rate
Loan, the last day of the Interest Period applicable to the
Borrowing of which such Loan is a part and, in the case of a
Fixed Rate Borrowing with an Interest Period of more than 90
days' duration (unless otherwise specified in the applicable
Competitive Bid Request), each day prior to the last day of
such Interest Period that occurs at intervals of 90 days'
duration after the first day of such Interest Period, and
any other dates that are specified in the applicable
Competitive Bid Request as Interest Payment Dates with
respect to such Borrowing and (d) with respect to any
Swingline Loan, the day that such Loan is required to be
repaid.
"Interest Period" means (a) with respect to any
Eurodollar Borrowing, the period commencing on the date of
such Borrowing and ending on the numerically corresponding
day in the calendar month that is one, two, three or
six months thereafter, as the Borrower may elect, and
(b) with respect to any Fixed Rate Borrowing, the period
(which shall not be less than one day or more than 360 days)
commencing on the date of such Borrowing and ending on the
date specified in the applicable Competitive Bid Request;
provided, that (i) if any Interest Period would end on a day
other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless, in the
case of a Eurodollar Borrowing only, such next succeeding
Business Day would fall in the next calendar month, in which
case such Interest Period shall end on the next preceding
Business Day and (ii) any Interest Period pertaining to a
Eurodollar Borrowing that commences on the last Business Day
of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of
such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period. For
purposes hereof, the date of a Borrowing initially shall be
the date on which such Borrowing is made and, in the case of
a Revolving Borrowing, thereafter shall be the effective
date of the most recent conversion or continuation of such
Borrowing.
"Issuing Bank" means Chase Manhattan Bank
Delaware, in its capacity as the issuer of Letters of Credit
hereunder, and its successors in such capacity as provided
in Section 2.06(i). The Issuing Bank may, in its
discretion, arrange for one or more Letters of Credit to be
issued by Affiliates of the Issuing Bank, in which case the
term "Issuing Bank" shall include any such Affiliate with
respect to Letters of Credit issued by such Affiliate.
"LC Disbursement" means a payment made by the
Issuing Bank pursuant to a Letter of Credit.
"LC Exposure" means, at any time, the sum of (a)
the aggregate undrawn amount of all outstanding Letters of
Credit at such time plus (b) the aggregate amount of all LC
Disbursements that have not yet been reimbursed by or on
behalf of the Borrower at such time. The LC Exposure of any
Revolving Lender at any time shall be its Applicable
Percentage of the total LC Exposure at such time.
"Lenders" means the Persons listed on
Schedule 2.01 and any other Person that shall have become a
party hereto pursuant to an Assignment and Acceptance, other
than any such Person that ceases to be a party hereto
pursuant to an Assignment and Acceptance. Unless the
context otherwise requires, the term "Lenders" includes the
Swingline Lender.
"Letter of Credit" means any letter of credit
issued by an Issuing Bank pursuant to this Agreement.
"Leverage Ratio" means, on any date, the ratio of
(a) Consolidated Indebtedness as of such date to
(b) Consolidated EBITDA for the period of four consecutive
fiscal quarters of the Borrower most recently ended as of
such date.
"LIBO Rate" means, with respect to any Eurodollar
Borrowing for any Interest Period, the rate appearing on
Page 3750 of Dow Jones Markets (or on any successor or
substitute page of such service, or any successor to or
substitute for such service, providing rate quotations
comparable to those currently provided on such page of such
service, as determined by the Administrative Agent from time
to time for purposes of providing quotations of interest
rates applicable to dollar deposits in the London interbank
market) at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest
Period, as the rate for dollar deposits with a maturity
comparable to such Interest Period. In the event that such
rate is not available at such time for any reason, then the
"LIBO Rate" with respect to such Eurodollar Borrowing for
such Interest Period shall be the rate at which dollar
deposits of $5,000,000 and for a maturity comparable to such
Interest Period are offered by the principal London office
of the Administrative Agent in immediately available funds
in the London interbank market at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of
such Interest Period.
"Lien" means, with respect to any asset, (a) any
mortgage, deed of trust, lien, pledge, hypothecation,
encumbrance, charge or security interest in, on or of such
asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention
agreement (or any financing lease having substantially the
same economic effect as any of the foregoing) relating to
such asset and (c) in the case of securities, any purchase
option, call or similar right of a third party (other than
any such rights of a financial institution under repurchase
agreements described in clause (d) of the definition of
"Permitted Investments" entered into with such financial
institution) with respect to such securities.
"Loan Documents" means this Agreement, the
Guarantee Agreement and any promissory notes issued pursuant
to Section 2.10(e).
"Loan Parties" means the Borrower and the
Guarantors.
"Loans" means the loans made by the Lenders to the
Borrower pursuant to this Agreement.
"Margin" means, with respect to any Competitive
Loan bearing interest at a rate based on the LIBO Rate, the
marginal rate of interest, if any, to be added to or
subtracted from the LIBO Rate to determine the rate of
interest applicable to such Loan, as specified by the Lender
making such Loan in its related Competitive Bid.
"Material Adverse Effect" means a material adverse
effect on (a) the business, assets, operations or condition,
financial or otherwise, of the Borrower and the Subsidiaries
taken as a whole, (b) the ability of the Borrower to perform
any of its obligations under any Loan Document or (c) the
rights and remedies available to the Lenders under any Loan
Document.
"Material Indebtedness" means Indebtedness (other
than the Loans and Letters of Credit), or obligations in
respect of one or more Hedging Agreements, of any one or
more of the Borrower and its Subsidiaries in an aggregate
principal amount exceeding $50,000,000. For purposes of
determining Material Indebtedness, the "principal amount" of
the obligations of the Borrower or any Subsidiary in respect
of any Hedging Agreement at any time shall be the maximum
aggregate amount (giving effect to any netting agreements)
that the Borrower or such Subsidiary would be required to
pay if such Hedging Agreement were terminated at such time.
"Maturity Date" means October 2, 2002.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Proceeds" means, with respect to any event,
(a) the cash proceeds received in respect of such event
including any cash received in respect of the principal
amount of any non-cash proceeds, but only as and when
received, net of (b) the sum of (i) all reasonable fees and
out-of-pocket expenses paid (or reasonably estimated to be
payable) by the Borrower and the Subsidiaries to third
parties (other than Affiliates) in connection with such
event (including underwriting discounts), (ii) in the case
of a sale, transfer or other disposition of an asset
(including pursuant to a sale and leaseback transaction),
the amount of all payments required to be made by the
Borrower and the Subsidiaries as a result of such event to
repay Indebtedness (other than Loans) secured by such asset
or otherwise subject to mandatory prepayment as a result of
such event, (iii) the amount of all taxes paid (or
reasonably estimated to be payable) by the Borrower and the
Subsidiaries, and the amount of any reserves established by
the Borrower and the Subsidiaries to fund contingent
liabilities reasonably estimated to be payable, (iv) in the
case of any issuance of preferred stock that has accrued and
unpaid dividends at the time of such issuance, the amount of
such accrued and unpaid dividends at such time and (v) in
the case of any issuance of debt securities that have
accrued and unpaid interest at the time of such issuance,
the amount of such accrued and unpaid interest at such time,
in each case that are directly attributable to such event
(as determined reasonably and in good faith by the chief
financial officer of the Borrower). Customary franchise
fees collected in the ordinary course of business from
purchasers of restaurants shall not be deemed to be proceeds
of the sales of such restaurants (howsoever denominated).
"Other Taxes" means any and all present or future
stamp or documentary taxes or any other excise or property
taxes, charges or similar levies arising from any payment
made hereunder or from the execution, delivery or
enforcement of, or otherwise with respect to, this
Agreement.
"PBGC" means the Pension Benefit Guaranty
Corporation referred to and defined in ERISA and any
successor entity performing similar functions.
"PepsiCo" means PepsiCo, Inc., a North Carolina
corporation.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are not
yet due or are being contested in compliance with
Section 5.04;
(b) carriers', warehousemen's, mechanics',
materialmen's, repairmen's and other like Liens imposed
by law, arising in the ordinary course of business and
securing obligations that are not overdue by more than
30 days or are being contested in compliance with
Section 5.04;
(c) pledges and deposits made in the ordinary
course of business in compliance with workers'
compensation, unemployment insurance and other social
security laws or regulations;
(d) deposits to secure the performance of bids,
trade contracts, leases, statutory obligations, surety
and appeal bonds, performance bonds and other
obligations of a like nature, in each case in the
ordinary course of business;
(e) judgment liens in respect of judgments that do
not constitute an Event of Default under clause (l) of
Section 7.01; and
(f) easements, zoning restrictions, rights-of-way
and similar encumbrances on real property imposed by
law or arising in the ordinary course of business that
do not secure any monetary obligations and do not
materially detract from the value of the affected
property or interfere with the ordinary conduct of
business of the Borrower or any Subsidiary;
provided that the term "Permitted Encumbrances" shall not
include any Lien securing Indebtedness.
"Permitted Investments" means:
(a) direct obligations of, or obligations the
principal of and interest on which are unconditionally
guaranteed by, the United States of America (or by any
agency thereof to the extent such obligations are
backed by the full faith and credit of the United
States of America), in each case maturing within one
year from the date of acquisition thereof;
(b) investments in commercial paper maturing
within 270 days from the date of acquisition thereof
and having, at such date of acquisition, the highest
credit rating obtainable from S&P or from Moody's;
(c) investments in certificates of deposit,
banker's acceptances and time deposits maturing within
180 days from the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit
accounts issued or offered by, any domestic office of
any Lender or any Affiliate of any Lender or any other
commercial bank organized under the laws of the United
States of America or any State thereof which has a
combined capital and surplus and undivided profits of
not less than $500,000,000;
(d) fully collateralized repurchase agreements
with a term of not more than 30 days for securities
described in clause (a) above and entered into with a
financial institution satisfying the criteria described
in clause (c) above;
(e) investments in money market funds with a
policy to invest substantially all their assets in one
or more investments described in the foregoing items
(a), (b), (c) and (d); and
(f) in the case of any Foreign Subsidiary,
investments by such Subsidiary that are denominated in
the currency of the jurisdiction where such Foreign
Subsidiary's principal business activities are
conducted and are available in the principal financial
markets of the jurisdiction and otherwise are
comparable (as nearly as practicable) to the
investments described above; provided that, for
purposes of this clause (f), (i) the foregoing
clause (a) shall be deemed to refer to obligations of,
or obligations the principal of and interest on which
are unconditionally guaranteed by, the government of
the jurisdiction in which such Foreign Subsidiary is
located, in each case maturing within one year from the
date of acquisition thereof, and (ii) commercial banks
referred to in the foregoing clause (c) shall be deemed
to include commercial banks located in the applicable
jurisdiction that the applicable Foreign Subsidiary
determines in good faith to be among the most
creditworthy banks available for deposits in the
location where such deposits are being made.
"Permitted Obligations" means (a) obligations of
the Borrower or any Guarantor with respect to unsecured debt
securities issued by the Borrower or such Guarantor,
respectively, and (b) a negative pledge obligation not
exceeding $25,000,000 under an agreement with the PBGC
pursuant to which the PBGC has been granted the right to an
equal and ratable security interest in any of the Borrower's
property or assets with respect to which the Lenders are
granted a security interest.
"Person" means any natural person, corporation,
limited liability company, trust, joint venture,
association, company, partnership, Governmental Authority or
other entity.
"Plan" means any employee pension benefit plan
(other than a Multiemployer Plan) subject to the provisions
of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, and in respect of which the Borrower
or any ERISA Affiliate is (or, if such plan were terminated,
would under Section 4069 of ERISA be deemed to be) an
"employer" as defined in Section 3(5) of ERISA.
"Prepayment Event" means, without duplication:
(a) any sale, transfer or other disposition
(including pursuant to a sale and leaseback
transaction) of any restaurant of the Borrower or any
Domestic Subsidiary; or
(b) the issuance on or after the date hereof by
the Borrower or any Domestic Subsidiary of any equity
securities, or the receipt by the Borrower or any
Domestic Subsidiary of any capital contribution, other
than (i) any such issuance of equity securities to, or
receipt of any such capital contribution from, the
Borrower or a Domestic Subsidiary, (ii) the issuance of
equity securities pursuant to stock option, stock
purchase and other similar plans for officers,
directors or employees of the Borrower or any
Subsidiary, (iii) any such issuance of equity
securities by, or capital contribution to, a Domestic
Subsidiary that does not dilute the Borrower's direct
or indirect equity interest therein or is made pursuant
to an agreement existing on the date hereof between the
Borrower or any of its Domestic Subsidiaries and any
joint venture of the Borrower or any of its Domestic
Subsidiaries in accordance with the terms of such
agreement as in effect on the date hereof or (iv) any
such issuance of equity securities by, or capital
contribution to, a Domestic Subsidiary in connection
with the formation of such Domestic Subsidiary; or
(c) the incurrence on or after the date hereof by
the Borrower or any Domestic Subsidiary of any
Indebtedness described in clause (a), (b) or (c) of the
definition of "Indebtedness" having a stated maturity
of more than one year from the date of issuance
thereof, other than (i) Indebtedness in respect of the
Loans and Letters of Credit, (ii) Indebtedness owed to
the Borrower or a Subsidiary or (iii) Indebtedness to
the extent such Indebtedness is incurred to finance
Capital Expenditures or to refinance other
Indebtedness;
provided that the first $25,000,000 of Net Proceeds received
in each fiscal year of the Borrower in respect of events
described in clause (a) above, and the first $25,000,000 of
Net Proceeds received in each fiscal year of the Borrower in
respect of events described in clauses (b) and (c) above
(combined), shall be deemed not to be Net Proceeds of a
"Prepayment Event".
"Prime Rate" means the rate of interest per annum
publicly announced from time to time by The Chase Manhattan
Bank as its prime rate in effect at its principal office in
New York City; each change in the Prime Rate shall be
effective from and including the date such change is
publicly announced as being effective.
"Principal Domestic Subsidiary" means (a) any
Subsidiary organized in the United States of America whose
consolidated assets exceed 5% of the consolidated assets of
the Borrower and its consolidated Subsidiaries or whose
revenues exceed 5% of the consolidated revenues of the
Borrower and its consolidated Subsidiaries, in each case as
of the end of the most recent fiscal quarter or for the most
recently ended four consecutive fiscal quarters,
respectively, or (b) any Subsidiary that holds any Kentucky
Fried Chicken, KFC, Pizza Hut or Taco Bell trademark for use
in the United States of America or any jurisdiction therein.
"Register" has the meaning set forth in
Section 9.04.
"Registration Statement" means the Registration
Statement on Form 10 filed by the Borrower with the
Securities and Exchange Commission on July 2, 1997, as
amended.
"Related Parties" means, with respect to any
specified Person, such Person's Affiliates and the
respective directors, officers, employees, agents and
advisors of such Person and such Person's Affiliates.
"Rental Expense" means, for any period, the
minimum rental expense deducted in determining Consolidated
Net Income for such period.
"Required Lenders" means, at any time, Lenders
having Revolving Credit Exposures, Term Loans and unused
Commitments representing more than 50% of the sum of the
total Revolving Credit Exposures, outstanding Term Loans and
unused Commitments at such time; provided that, for purposes
of declaring the Loans to be due and payable pursuant to
Section 7.01, and for all purposes after the Loans become
due and payable pursuant to Article VII or the Commitments
expire or terminate, the outstanding Competitive Loans of
the Lenders shall be included in their respective Revolving
Credit Exposures in determining the Required Lenders.
"Restricted Payment" means any dividend or other
distribution (whether in cash, securities or other property)
with respect to any shares of any class of capital stock of
the Borrower or any Subsidiary, or any payment (whether in
cash, securities or other property), including any sinking
fund or similar deposit, on account of the purchase,
redemption, retirement, acquisition, cancelation or
termination of any such shares of capital stock of the
Borrower or any option, warrant or other right to acquire
any such shares of capital stock of the Borrower.
"Revolving Commitment" means, with respect to each
Lender, the commitment, if any, of such Lender to make
Revolving Loans and to acquire participations in Letters of
Credit and Swingline Loans hereunder, expressed as an amount
representing the maximum aggregate amount of such Lender's
Revolving Credit Exposure hereunder, as such commitment may
be (a) reduced from time to time pursuant to Section 2.09
and (b) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 9.04.
The initial amount of each Lender's Revolving Commitment is
set forth on Schedule 2.01, or in the Assignment and
Acceptance pursuant to which such Lender shall have assumed
its Revolving Commitment, as applicable. The initial
aggregate amount of the Lenders' Revolving Commitments is
$3,250,000,000.
"Revolving Credit Exposure" means, with respect to
any Lender at any time, the sum of the outstanding principal
amount of such Lender's Revolving Loans and its LC Exposure
and Swingline Exposure at such time.
"Revolving Lender" means a Lender with a Revolving
Commitment or, if the Revolving Commitments have terminated
or expired, a Lender with Revolving Credit Exposure or an
outstanding Competitive Loan.
"Revolving Loan" means a Loan made pursuant to
clause (b) of Section 2.01.
"Separation Agreement" means the Separation
Agreement, dated as of August 26, 1997, by and between
PepsiCo and the Borrower.
"S&P" means Standard & Poor's Ratings Group, a
Division of the McGraw-Hill Companies.
"Spin-Off Documents" means the Separation
Agreement, the Tax Separation Agreement, the Employee
Programs Agreement, the Telecommunications Agreement and all
other material agreements and documents (other than the
Fountain Beverage Pour Agreements) to be entered into in
connection with the Spin-Off Transactions.
"Spin-Off Transactions" means the transactions
contemplated by the Information Statement and the Spin-Off
Documents to occur on or before the date of distribution by
PepsiCo to the holders of its capital stock of the
Borrower's common stock, including (i) the contribution by
PepsiCo and its subsidiaries (other than the Borrower and
the Subsidiaries) to the Borrower and the Subsidiaries of
properties and other assets (including the capital stock of
certain corporations that will become Subsidiaries as a
result of such contribution) as contemplated by the
Information Statement and the Separation Agreement, (ii) the
capitalization of the Borrower (including the elimination of
intercompany balances between PepsiCo and its subsidiaries
or the Borrower's Subsidiaries) and (iii) the distribution
by PepsiCo of the common stock of the Borrower to the
holders of PepsiCo's capital stock.
"Statutory Reserve Rate" means a fraction
(expressed as a decimal), the numerator of which is the
number one and the denominator of which is the number one
minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental
reserves) expressed as a decimal established by the Board to
which the Administrative Agent is subject for eurocurrency
funding (currently referred to as "Eurocurrency Liabilities"
in Regulation D of the Board). Such reserve percentages
shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency
funding and to be subject to such reserve requirements
without benefit of or credit for proration, exemptions or
offsets that may be available from time to time to any
Lender under such Regulation D or any comparable regulation.
The Statutory Reserve Rate shall be adjusted automatically
on and as of the effective date of any change in any reserve
percentage.
"subsidiary" means, with respect to any Person
(the "parent") at any date, any corporation, limited
liability company, partnership, association or other entity
the accounts of which would be consolidated with those of
the parent in the parent's consolidated financial statements
if such financial statements were prepared in accordance
with GAAP as of such date, as well as any other corporation,
limited liability company, partnership, association or other
entity of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of
the ordinary voting power or, in the case of a partnership,
more than 50% of the general partnership interests are, as
of such date, owned, controlled or held by the parent or one
or more subsidiaries of the parent or by the parent and one
or more subsidiaries of the parent.
"Subsidiary" means any subsidiary of the Borrower.
"Swingline Exposure" means, at any time, the
aggregate principal amount of all Swingline Loans
outstanding at such time. The Swingline Exposure of any
Lender at any time shall be its Applicable Percentage of the
total Swingline Exposure at such time.
"Swingline Lender" means The Chase Manhattan Bank,
in its capacity as lender of Swingline Loans hereunder.
"Swingline Loan" means a Loan made pursuant to
Section 2.05.
"Syndication Agents" means The Chase Manhattan
Bank, Citibank, N.A., Morgan Guaranty Trust Company of New
York and NationsBank, N.A., in their capacities as
syndication agents hereunder.
"Tax Separation Agreement" means the Tax
Separation Agreement, dated as of August 26, 1997, between
PepsiCo, on behalf of itself and the members of the PepsiCo
Group (as such term is defined therein), and the Borrower,
on behalf of itself and the members of the TRICON Group (as
such term is defined therein).
"Taxes" means any and all present or future taxes,
levies, imposts, duties, deductions, charges or withholdings
imposed by any Governmental Authority.
"Telecommunications Agreement" means the
Telecommunications, Software and Computing Services
Agreement, dated as of August 26, 1997, by and between
PepsiCo and the Borrower.
"Term Commitment" means, with respect to each
Lender, the commitment, if any, of such Lender to make a
Term Loan hereunder on the Effective Date, expressed as an
amount representing the maximum principal amount of the Term
Loan to be made by such Lender hereunder, as such commitment
may be (a) reduced from time to time pursuant to
Section 2.09 and (b) reduced or increased from time to time
pursuant to assignments by or to such Lender pursuant to
Section 9.04. The initial amount of each Lender's Term
Commitment is set forth on Schedule 2.01, or in the
Assignment and Acceptance pursuant to which such Lender
shall have assumed its Term Commitment, as applicable. The
initial aggregate amount of the Lenders' Term Commitments is
$2,000,000,000.
"Term Lender" means a Lender with a Term
Commitment or an outstanding Term Loan.
"Term Loan" means a Loan made pursuant to clause
(a) of Section 2.01.
"Transactions" means the execution, delivery and
performance by the Loan Parties of the Loan Documents, the
borrowing of Loans, the use of the proceeds thereof, the
issuance of Letters of Credit hereunder and the Spin-Off
Transactions.
"Type", when used in reference to any Loan or
Borrowing, refers to whether the rate of interest on such
Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBO Rate, the
Alternate Base Rate or, in the case of a Competitive Loan or
Borrowing, the LIBO Rate or a Fixed Rate.
"Withdrawal Liability" means liability to a
Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Classification of Loans and
Borrowings. For purposes of this Agreement, Loans may be
classified and referred to by Class (e.g., a "Revolving
Loan") or by Type (e.g., a "Eurodollar Loan") or by Class
and Type (e.g., a "Eurodollar Revolving Loan"). Borrowings
also may be classified and referred to by Class (e.g., a
"Revolving Borrowing") or by Type (e.g., a "Eurodollar
Borrowing") or by Class and Type (e.g., a "Eurodollar
Revolving Borrowing").
SECTION 1.03. Terms Generally. The definitions
of terms herein shall apply equally to the singular and
plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding mascu
line, feminine and neuter forms. The words "include",
"includes" and "including" shall be deemed to be followed by
the phrase "without limitation". The word "will" shall be
construed to have the same meaning and effect as the word
"shall". Unless the context requires otherwise (a) any
definition of or reference to any agreement, instrument or
other document herein shall be construed as referring to
such agreement, instrument or other document as from time to
time amended, supplemented or otherwise modified (subject to
any restrictions on such amendments, supplements or
modifications set forth herein), (b) any reference herein to
any Person shall be construed to include such Person's
successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed
to refer to this Agreement in its entirety and not to any
particular provision hereof, (d) all references herein to
Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits
and Schedules to, this Agreement and (e) the words "asset"
and "property" shall be construed to have the same meaning
and effect and to refer to any and all tangible and
intangible assets and properties, including cash,
securities, accounts and contract rights.
SECTION 1.04. Accounting Terms; GAAP. Except as
otherwise expressly provided herein, all terms of an
accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time;
provided that, if the Borrower notifies the Administrative
Agent that the Borrower requests an amendment to any
provision hereof to eliminate the effect of any change
occurring after the date hereof in GAAP or in the
application or interpretation thereof on the operation of
such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to
any provision hereof for such purpose), regardless of
whether any such notice is given before or after such change
in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become
effective until such notice shall have been withdrawn or
such provision amended in accordance herewith.
ARTICLE II
The Credits
SECTION 2.01. Commitments. Subject to the terms
and conditions set forth herein, each Lender agrees (a) to
make a Term Loan to the Borrower on the Effective Date in a
principal amount not exceeding its Term Commitment and
(b) to make Revolving Loans to the Borrower from time to
time during the Availability Period in an aggregate
principal amount that will not result in (i) such Lender's
Revolving Credit Exposure exceeding such Lender's Revolving
Commitment or (b) the sum of the total Revolving Credit
Exposures plus the aggregate principal amount of outstanding
Competitive Loans exceeding the total Revolving Commitments.
Within the foregoing limits and subject to the terms and
conditions set forth herein, the Borrower may borrow, prepay
and reborrow Revolving Loans. Amounts repaid in respect of
Term Loans may not be reborrowed.
SECTION 2.02. Loans and Borrowings. (a) Each
Loan (other than a Competitive Loan or a Swingline Loan)
shall be made as part of a Borrowing consisting of Loans of
the same Class and Type made by the Lenders ratably in
accordance with their respective Commitments. Each
Competitive Loan shall be made in accordance with the
procedures set forth in Section 2.04. The failure of any
Lender to make any Loan required to be made by it shall not
relieve any other Lender of its obligations hereunder;
provided that the Commitments and Competitive Bids of the
Lenders are several and no Lender shall be responsible for
any other Lender's failure to make Loans as required.
(b) Subject to Section 2.14, (i) each Revolving
Borrowing and Term Borrowing shall be comprised entirely of
ABR Loans or Eurodollar Loans as the Borrower may request in
accordance herewith, and (ii) each Competitive Borrowing
shall be comprised entirely of Eurodollar Loans or Fixed
Rate Loans as the Borrower may request in accordance
herewith. Each Swingline Loan shall be an ABR Loan unless
otherwise agreed by the Borrower and the Swingline Lender
pursuant to Section 2.13(d). Each Lender at its option may
make any Eurodollar Loan by causing any domestic or foreign
branch or Affiliate of such Lender to make such Loan;
provided that any exercise of such option shall not affect
the obligation of the Borrower to repay such Loan in accord
ance with the terms of this Agreement and shall not result
in any increased costs under Section 2.15 or any obligation
by the Borrower to make any payment under Section 2.17 in
excess of the amounts, if any, that such Lender would be
entitled to claim under Section 2.15 or 2.17, as applicable,
without giving effect to such change in lending office.
(c) At the commencement of each Interest Period
for any Eurodollar Revolving Borrowing or Eurodollar Term
Borrowing, such Borrowing shall be in an aggregate amount
that is an integral multiple of $2,500,000 and not less than
$15,000,000. At the time that each ABR Revolving Borrowing
is made, such Borrowing shall be in an aggregate amount that
is an integral multiple of $2,500,000 and not less than
$15,000,000; provided that an ABR Revolving Borrowing may be
in an aggregate amount that is equal to the entire unused
balance of the total Commitments or that is required to
finance the reimbursement of an LC Disbursement as
contemplated by Section 2.06(e). Each Competitive Borrowing
shall be in an aggregate amount that is an integral multiple
of $2,500,000 and not less than $15,000,000 (or, in the case
of a Competitive Borrowing made in an Alternative Currency,
a Dollar Amount of not less than $10,000,000). Each
Swingline Loan shall be in an amount that is an integral
multiple of $1,000,000 and not less than $5,000,000.
Borrowings of more than one Type and Class may be
outstanding at the same time; provided that there shall not
at any time be more than a total of ten Eurodollar Revolving
Borrowings and Eurodollar Term Borrowings outstanding.
(d) Notwithstanding any other provision of this
Agreement, the Borrower shall not be entitled to request, or
to elect to convert or continue, any Borrowing if the
Interest Period requested with respect thereto would end
after the Maturity Date.
SECTION 2.03. Requests for Borrowings. To
request a Revolving Borrowing or Term Borrowing, the
Borrower shall notify the Administrative Agent of such
request by telephone (a) in the case of a Eurodollar
Borrowing, not later than 11:00 a.m., New York City time,
three Business Days before the date of the proposed
Borrowing or (b) in the case of an ABR Borrowing, not later
than 10:00 a.m., New York City time, on the date of the
proposed Borrowing. Each such telephonic Borrowing Request
shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a
written Borrowing Request in a form approved by the
Administrative Agent and signed by the Borrower. Each such
telephonic and written Borrowing Request shall specify the
following information in compliance with Section 2.02:
(i) whether the requested Borrowing is to be a
Revolving Borrowing or Term Borrowing;
(ii) the aggregate amount of such Borrowing;
(iii) the date of such Borrowing, which shall be a
Business Day;
(iv) whether such Borrowing is to be an ABR
Borrowing or a Eurodollar Borrowing;
(v) in the case of a Eurodollar Borrowing, the
initial Interest Period to be applicable thereto, which
shall be a period contemplated by the definition of the
term "Interest Period"; and
(vi) the location and number of the Borrower's
account to which funds are to be disbursed, which shall
comply with the requirements of Section 2.07.
If no election as to the Type of Borrowing is specified,
then the requested Borrowing shall be an ABR Borrowing. If
no Interest Period is specified with respect to any
requested Eurodollar Borrowing, then the Borrower shall be
deemed to have selected an Interest Period of one month's
duration. Promptly following receipt of a Borrowing
Request in accordance with this Section, the Administrative
Agent shall advise each Lender of the details thereof and of
the amount of such Lender's Loan to be made as part of the
requested Borrowing.
SECTION 2.04. Competitive Bid Procedure.
(a) Subject to the terms and conditions set forth herein,
from time to time during the Availability Period the
Borrower may request Competitive Bids and may (but shall not
have any obligation to) accept Competitive Bids and borrow
Competitive Loans; provided that the sum of the total
Revolving Credit Exposures plus the aggregate principal
amount of outstanding Competitive Loans at any time shall
not exceed the total Commitments. To request Competitive
Bids, the Borrower shall notify the Administrative Agent of
such request by telephone (x) in the case of a Eurodollar
Borrowing to be made in dollars, not later than 11:00 a.m.,
New York City time, four Business Days before the date of
the proposed Borrowing, (y) in the case of a Fixed Rate
Borrowing to be made in dollars, not later than 10:00 a.m.,
New York City time, one Business Day before the date of the
proposed Borrowing and (z) in the case of a Competitive
Borrowing to be made in an Alternate Currency in accordance
with subsection (g) of this Section, not later than 10:00
a.m., New York City time, six Business Days before the date
of the proposed Borrowing; provided that the Borrower may
submit up to (but not more than) three Competitive Bid
Requests on the same day, but a Competitive Bid Request
shall not be made within five Business Days after the date
of any previous Competitive Bid Request, unless any and all
such previous Competitive Bid Requests shall have been
withdrawn or all Competitive Bids received in response
thereto rejected. Each such telephonic Competitive Bid
Request shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written
Competitive Bid Request in a form approved by the
Administrative Agent and signed by the Borrower. Each such
telephonic and written Competitive Bid Request shall specify
the following information in compliance with Section 2.02:
(i) the aggregate amount of the requested
Borrowing (expressed in dollars);
(ii) the date of such Borrowing, which shall be a
Business Day;
(iii) whether such Borrowing is to be a Eurodollar
Borrowing or a Fixed Rate Borrowing;
(iv) the currency in which the proposed Borrowing
is to be made, which shall be dollars or, subject to
paragraph (g) of this Section, an Alternative Currency;
(v) the Interest Period to be applicable to such
Borrowing, which shall be a period contemplated by the
definition of the term "Interest Period"; and
(vi) the location and number of the Borrower's
account to which funds are to be disbursed, which shall
comply with the requirements of Section 2.07.
Promptly following receipt of a Competitive Bid Request in
accordance with this Section, the Administrative Agent shall
notify the Lenders of the details thereof by telecopy,
inviting the Lenders to submit Competitive Bids.
(b) Each Lender may (but shall not have any
obligation to) make one or more Competitive Bids to the
Borrower in response to a Competitive Bid Request. Each
Competitive Bid by a Lender must be in a form approved by
the Administrative Agent and must be received by the
Administrative Agent by telecopy, in the case of a
Eurodollar Competitive Borrowing, not later than 9:30 a.m.,
New York City time, three Business Days before the proposed
date of such Competitive Borrowing, and in the case of a
Fixed Rate Borrowing, not later than 9:30 a.m., New York
City time, on the proposed date of such Competitive Borrow
ing. Competitive Bids that do not conform substantially to
the form approved by the Administrative Agent may be
rejected by the Administrative Agent, and the Administrative
Agent shall notify the applicable Lender as promptly as
practicable. Each Competitive Bid shall specify (i) the
principal amount (which shall be expressed in dollars and be
a minimum of $5,000,000 and an integral multiple of
$1,000,000 and which may equal the entire principal amount
of the Competitive Borrowing requested by the Borrower) of
the Competitive Loan or Loans that the Lender is willing to
make, (ii) the Competitive Bid Rate or Rates at which the
Lender is prepared to make such Loan or Loans (expressed as
a percentage rate per annum in the form of a decimal to no
more than four decimal places), (iii) the currency in which
such Loan or Loans will be made and (iv) the Interest Period
applicable to each such Loan and the last day thereof.
(c) The Administrative Agent shall promptly
notify the Borrower by telecopy of the Competitive Bid Rate
and the principal amount specified in each Competitive Bid
and the identity of the Lender that shall have made such
Competitive Bid.
(d) Subject only to the provisions of this
paragraph, the Borrower may accept or reject any Competitive
Bid. The Borrower shall notify the Administrative Agent by
telephone, confirmed by telecopy in a form approved by the
Administrative Agent, whether and to what extent it has
decided to accept or reject each Competitive Bid, in the
case of a Eurodollar Competitive Borrowing, not later than
10:30 a.m., New York City time, three Business Days before
the date of the proposed Competitive Borrowing, and in the
case of a Fixed Rate Borrowing, not later than 10:30 a.m.,
New York City time, on the proposed date of the Competitive
Borrowing; provided that (i) the failure of the Borrower to
give such notice shall be deemed to be a rejection of each
Competitive Bid, (ii) the Borrower shall not accept a
Competitive Bid made at a particular Competitive Bid Rate if
the Borrower rejects a Competitive Bid made at a lower
Competitive Bid Rate, (iii) the aggregate amount of the
Competitive Bids accepted by the Borrower shall not exceed
the aggregate amount of the requested Competitive Borrowing
specified in the related Competitive Bid Request, (iv) to
the extent necessary to comply with clause (iii) above, the
Borrower may accept Competitive Bids at the same Competitive
Bid Rate in part, which acceptance, in the case of multiple
Competitive Bids at such Competitive Bid Rate, shall be made
pro rata in accordance with the amount of each such
Competitive Bid, and (v) except pursuant to clause (iv)
above, no Competitive Bid shall be accepted for a Compet
itive Loan unless such Competitive Loan is in a minimum
principal amount of $5,000,000 and an integral multiple of
$1,000,000; provided further that if a Competitive Loan must
be in an amount less than $5,000,000 because of the
provisions of clause (iv) above, such Competitive Loan may
be for a minimum of $1,000,000 or any integral multiple
thereof, and in calculating the pro rata allocation of
acceptances of portions of multiple Competitive Bids at a
particular Competitive Bid Rate pursuant to clause (iv) the
amounts shall be rounded to integral multiples of $1,000,000
in a manner determined by the Borrower. A notice given by
the Borrower pursuant to this paragraph shall be
irrevocable.
(e) The Administrative Agent shall promptly
notify each bidding Lender by telecopy whether or not its
Competitive Bid has been accepted (and, if so, the amount
and Competitive Bid Rate so accepted), and each successful
bidder will thereupon become bound, subject to the terms and
conditions hereof, to make the Competitive Loan in respect
of which its Competitive Bid has been accepted.
(f) If the Administrative Agent shall elect to
submit a Competitive Bid in its capacity as a Lender, it
shall submit such Competitive Bid directly to the Borrower
at least one quarter of an hour earlier than the time by
which the other Lenders are required to submit their
Competitive Bids to the Administrative Agent pursuant to
paragraph (b) of this Section.
(g) The Borrower may request Competitive Loans in
an Alternative Currency, subject to the terms and conditions
of this subsection (g), in addition to the other conditions
applicable to such Loans hereunder. Any request for
Competitive Loans in an Alternative Currency shall be
subject to the following conditions:
(i) after giving effect to any Competitive
Borrowing in an Alternative Currency, the aggregate
Dollar Amount of all outstanding Competitive Loans
denominated in Alternative Currencies shall not exceed
$250,000,000, and
(ii) if there shall occur at or prior to
10:00 a.m., New York City time, on the date of any
Competitive Borrowing to be denominated in an
Alternative Currency any change in national or
international financial, political or economic
conditions or currency exchange rates or exchange
controls which would, in the reasonable opinion of any
Lender that shall have offered to make any Competitive
Loan in connection with such Borrowing, make it
impracticable for such Lender's Loan to be denominated
in such Alternative Currency, then such Lender may by
notice to the Borrower and the Administrative Agent
withdraw its offer to make such Loan.
Any Competitive Loan which is to be made in an
Alternative Currency in accordance with this subsection (g)
shall be advanced in the Equivalent Amount of the Dollar
Amount thereof and shall be repaid or prepaid in such
Alternative Currency in the amount borrowed. Interest
payable on any Loan denominated in an Alternative Currency
shall be paid in such Alternative Currency.
For purposes of determining whether the aggregate
principal amount of Loans outstanding hereunder exceeds any
applicable limitation expressed in dollars, each Competitive
Loan denominated in an Alternative Currency shall be deemed
to be in a principal amount equal to the Dollar Amount
thereof. The Dollar Amount of any Competitive Loan with an
Interest Period exceeding three months in duration shall be
adjusted on each date that would have been the last day of
an Interest Period for such Loan if such Loan had successive
Interest Periods of three months duration. Each such
adjustment shall be made by the Lender holding such Loan by
determining the amount in dollars that would be required in
order to result in an Equivalent Amount in the applicable
Alternative Currency equal to the principal amount of the
applicable Loan outstanding on the date of the adjustment,
and the amount in dollars so determined shall be the Dollar
Amount of such Loan unless and until another adjustment is
required hereby. Each Lender that makes a Competitive Loan
denominated in an Alternative Currency agrees to determine
any such adjustments if and when required to be made
pursuant to this paragraph and to notify the Borrower and
the Administrative Agent of each such adjustment promptly
upon making such determination.
SECTION 2.05. Swingline Loans. (a) Subject to
the terms and conditions set forth herein, the Swingline
Lender agrees to make Swingline Loans to the Borrower from
time to time during the Availability Period, in an aggregate
principal amount at any time outstanding that will not
result in (i) the aggregate principal amount of outstanding
Swingline Loans exceeding $50,000,000 or (ii) the sum of the
total Revolving Credit Exposures plus the aggregate
principal amount of outstanding Competitive Loans exceeding
the total Revolving Commitments. Within the foregoing
limits and subject to the terms and conditions set forth
herein, the Borrower may borrow, prepay and reborrow
Swingline Loans.
(b) To request a Swingline Loan, the Borrower
shall notify the Administrative Agent of such request by
telephone (confirmed by telecopy), not later than 12:00
noon, New York City time, on the day of a proposed Swingline
Loan. Each such notice shall be irrevocable and shall
specify the requested date (which shall be a Business Day)
and amount of the requested Swingline Loan. The
Administrative Agent will promptly advise the Swingline
Lender of any such notice received from the Borrower. The
Swingline Lender shall make each Swingline Loan available to
the Borrower by means of a credit to the general deposit
account of the Borrower with the Swingline Lender (or, in
the case of a Swingline Loan made to finance the
reimbursement of an LC Disbursement as provided in
Section 2.06(e), by remittance to the Issuing Bank) by
3:00 p.m., New York City time, on the requested date of such
Swingline Loan.
(c) The Swingline Lender may by written notice
given to the Administrative Agent not later than 10:00 a.m.,
New York City time, on any Business Day require the
Revolving Lenders to acquire participations on such Business
Day in all or a portion of the Swingline Loans outstanding.
Such notice shall specify the aggregate amount of Swingline
Loans in which Revolving Lenders will participate. Promptly
upon receipt of such notice, the Administrative Agent will
give notice thereof to each Revolving Lender, specifying in
such notice such Lender's Applicable Percentage of such
Swingline Loan or Loans. Each Revolving Lender hereby
absolutely and unconditionally agrees, upon receipt of
notice as provided above, to pay to the Administrative
Agent, for the account of the Swingline Lender, such
Lender's Applicable Percentage of such Swingline Loan or
Loans. Each Revolving Lender acknowledges and agrees that
its obligation to acquire participations in Swingline Loans
pursuant to this paragraph is absolute and unconditional and
shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or
reduction or termination of the Revolving Commitments, and
that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever. Each
Revolving Lender shall comply with its obligation under this
paragraph by wire transfer of immediately available funds,
in the same manner as provided in Section 2.07 with respect
to Loans made by such Lender (and Section 2.07 shall apply,
mutatis mutandis, to the payment obligations of the
Revolving Lenders), and the Administrative Agent shall
promptly pay to the Swingline Lender the amounts so received
by it from the Revolving Lenders. The Administrative Agent
shall notify the Borrower of any participations in any
Swingline Loan acquired pursuant to this paragraph, and
thereafter payments in respect of such Swingline Loan shall
be made to the Administrative Agent and not to the Swingline
Lender. Any amounts received by the Swingline Lender from
the Borrower (or other party on behalf of the Borrower) in
respect of a Swingline Loan after receipt by the Swingline
Lender of the proceeds of a sale of participations therein
shall be promptly remitted to the Administrative Agent; any
such amounts received by the Administrative Agent shall be
promptly remitted by the Administrative Agent to the
Revolving Lenders that shall have made their payments
pursuant to this paragraph and to the Swingline Lender, as
their interests may appear. The purchase of participations
in a Swingline Loan pursuant to this paragraph shall not
relieve the Borrower of any default in the payment thereof.
SECTION 2.06. Letters of Credit. (a) General.
Subject to the terms and conditions set forth herein, the
Borrower may request the issuance of Letters of Credit for
its own account, in a form reasonably acceptable to the
Administrative Agent and the Issuing Bank, at any time and
from time to time during the Availability Period. In the
event of any inconsistency between the terms and conditions
of this Agreement and the terms and conditions of any form
of letter of credit application or other agreement submitted
by the Borrower to, or entered into by the Borrower with,
the Issuing Bank relating to any Letter of Credit, the terms
and conditions of this Agreement shall control, and any
obligations or liabilities imposed on the Borrower under any
such letter of credit application (including by reason of
rights or remedies granted to an Issuing Bank) shall be
disregarded (it being understood that this Agreement sets
forth all obligations and liabilities of the Borrower with
respect to Letters of Credit).
(b) Notice of Issuance, Amendment, Renewal,
Extension; Certain Conditions. To request the issuance of a
Letter of Credit (or the amendment, renewal or extension of
an outstanding Letter of Credit), the Borrower shall hand
deliver or telecopy (or transmit by electronic
communication, if arrangements for doing so have been
approved by the Issuing Bank) to the Issuing Bank and the
Administrative Agent (reasonably in advance of the requested
date of issuance, amendment, renewal or extension) a notice
requesting the issuance of a Letter of Credit, or
identifying the Letter of Credit to be amended, renewed or
extended, and specifying the date of issuance, amendment,
renewal or extension (which shall be a Business Day), the
date on which such Letter of Credit is to expire (which
shall comply with paragraph (c) of this Section), the amount
of such Letter of Credit, the name and address of the
beneficiary thereof and such other information as shall be
necessary to prepare, amend, renew or extend such Letter of
Credit. If requested by the Issuing Bank, the Borrower also
shall submit a letter of credit application on the Issuing
Bank's standard form in connection with any request for a
Letter of Credit. A Letter of Credit shall be issued,
amended, renewed or extended only if (and upon issuance,
amendment, renewal or extension of each Letter of Credit the
Borrower shall be deemed to represent and warrant that),
after giving effect to such issuance, amendment, renewal or
extension (i) the LC Exposure shall not exceed $650,000,000
and (ii) the sum of the total Revolving Credit Exposures
plus the aggregate principal amount of outstanding
Competitive Loans shall not exceed the total Revolving
Commitments.
(c) Expiration Date. Each Letter of Credit shall
expire at or prior to the close of business on the earlier
of (i) the date one year after the date of the issuance of
such Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension)
and (ii) the date that is five Business Days prior to the
Maturity Date.
(d) Participations. By the issuance of a Letter
of Credit (or an amendment to a Letter of Credit increasing
the amount thereof) and without any further action on the
part of the Issuing Bank or the Lenders, the Issuing Bank
hereby grants to each Revolving Lender, and each Revolving
Lender hereby acquires from the Issuing Bank, a
participation in such Letter of Credit equal to such
Lender's Applicable Percentage of the aggregate amount
available to be drawn under such Letter of Credit. In
consideration and in furtherance of the foregoing, each
Revolving Lender hereby absolutely and unconditionally
agrees to pay to the Administrative Agent, for the account
of the Issuing Bank, such Lender's Applicable Percentage of
each LC Disbursement made by the Issuing Bank and not
reimbursed by the Borrower on the date due as provided in
paragraph (e) of this Section, or of any reimbursement
payment required to be refunded to the Borrower for any
reason. Each Lender acknowledges and agrees that its
obligation to acquire participations pursuant to this
paragraph in respect of Letters of Credit is absolute and
unconditional and shall not be affected by any circumstance
whatsoever, including any amendment, renewal or extension of
any Letter of Credit or the occurrence and continuance of a
Default or reduction or termination of the Revolving
Commitments, and that each such payment shall be made
without any offset, abatement, withholding or reduction
whatsoever; provided that the foregoing shall not be
construed to excuse the Issuing Bank from liability to the
Lenders for damages caused by the Issuing Bank's gross
negligence or willful misconduct.
(e) Reimbursement. If the Issuing Bank shall
make any LC Disbursement in respect of a Letter of Credit,
the Borrower shall reimburse such LC Disbursement by paying
to the Administrative Agent an amount equal to such LC
Disbursement not later than 12:00 noon, New York City time,
on the date that such LC Disbursement is made, if the
Borrower shall have received notice of such LC Disbursement
prior to 10:00 a.m., New York City time, on such date, or,
if such notice has not been received by the Borrower prior
to such time on such date, then not later than 12:00 noon,
New York City time, on (i) the Business Day that the
Borrower receives such notice, if such notice is received
prior to 10:00 a.m., New York City time, on the day of
receipt, or (ii) the Business Day immediately following the
day that the Borrower receives such notice, if such notice
is not received prior to such time on the day of receipt;
provided that the Borrower may, subject to the conditions to
borrowing set forth herein, request in accordance with
Section 2.03 or 2.05 that such payment be financed with an
ABR Revolving Borrowing (if such LC Disbursement is not less
than $15,000,000) or Swingline Loan (if such LC Disbursement
is not less than $5,000,000) in an equivalent amount and, to
the extent so financed, the Borrower's obligation to make
such payment shall be discharged and replaced by the
resulting ABR Revolving Borrowing or Swingline Loan, as
applicable. If the Borrower fails to make such payment when
due, the Administrative Agent shall notify each Revolving
Lender of the applicable LC Disbursement, the payment then
due from the Borrower in respect thereof and such Lender's
Applicable Percentage thereof. Promptly following receipt
of such notice, each Revolving Lender shall pay to the
Administrative Agent its Applicable Percentage of the
payment then due from the Borrower, in the same manner as
provided in Section 2.07 with respect to Loans made by such
Lender (and Section 2.07 shall apply, mutatis mutandis, to
the payment obligations of the Revolving Lenders), and the
Administrative Agent shall promptly pay to the Issuing Bank
the amounts so received by it from the Revolving Lenders.
Promptly following receipt by the Administrative Agent of
any payment from the Borrower pursuant to this paragraph,
the Administrative Agent shall distribute such payment to
the Issuing Bank or, to the extent that Revolving Lenders
have made payments pursuant to this paragraph to reimburse
the Issuing Bank, then to such Lenders and the Issuing Bank
as their interests may appear. Any payment made by a
Revolving Lender pursuant to this paragraph to reimburse the
Issuing Bank for any LC Disbursement (other than the funding
of ABR Revolving Loans or a Swingline Loan as contemplated
above) shall not constitute a Loan and shall not relieve the
Borrower of its obligation to reimburse such LC
Disbursement.
(f) Obligations Absolute. The Borrower's
obligation to reimburse LC Disbursements as provided in
paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed
strictly in accordance with the terms of this Agreement
under any and all circumstances whatsoever and irrespective
of (i) any lack of validity or enforceability of any Letter
of Credit or this Agreement, or any term or provision
therein, (ii) any draft or other document presented under a
Letter of Credit proving to be forged, fraudulent or invalid
in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Bank
under a Letter of Credit against presentation of a draft or
other document that does not comply with the terms of such
Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing,
that might, but for the provisions of this Section,
constitute a legal or equitable discharge of, or provide a
right of setoff against, the Borrower's obligations
hereunder. Neither the Administrative Agent, the Lenders
nor the Issuing Bank, nor any of their Related Parties,
shall have any liability or responsibility by reason of or
in connection with the issuance or transfer of any Letter of
Credit or any payment or failure to make any payment
thereunder (irrespective of any of the circumstances
referred to in the preceding sentence), or any error,
omission, interruption, loss or delay in transmission or
delivery of any draft, notice or other communication under
or relating to any Letter of Credit (including any document
required to make a drawing thereunder), any error in
interpretation of technical terms or any consequence arising
from causes beyond the control of the Issuing Bank; provided
that the foregoing shall not be construed to excuse the
Issuing Bank from liability to the Borrower to the extent of
any direct or actual damages (as opposed to consequential
damages, claims in respect of which are hereby waived by the
Borrower to the extent permitted by applicable law) suffered
by the Borrower that are caused by the Issuing Bank's
failure to exercise care when determining whether drafts and
other documents presented under a Letter of Credit comply
with the terms thereof. The parties hereto expressly agree
that, in the absence of gross negligence or wilful
misconduct on the part of the Issuing Bank (as finally
determined by a court of competent jurisdiction), the
Issuing Bank shall be deemed to have exercised care in each
such determination. In furtherance of the foregoing and
without limiting the generality thereof, the parties agree
that, with respect to documents presented which appear on
their face to be in substantial compliance with the terms of
a Letter of Credit, the Issuing Bank may, in its sole
discretion, either accept and make payment upon such
documents without responsibility for further investigation,
regardless of any notice or information to the contrary, or
refuse to accept and make payment upon such documents if
such documents are not in strict compliance with the terms
of such Letter of Credit.
(g) Disbursement Procedures. The Issuing Bank
shall, promptly following its receipt thereof, examine all
documents purporting to represent a demand for payment under
a Letter of Credit. The Issuing Bank shall promptly notify
the Administrative Agent and the Borrower by telephone
(confirmed by telecopy) of such demand for payment and
whether the Issuing Bank has made or will make an LC
Disbursement thereunder; provided that any failure to give
or delay in giving such notice shall not relieve the
Borrower of its obligation to reimburse the Issuing Bank and
the Revolving Lenders with respect to any such LC
Disbursement.
(h) Interim Interest. If the Issuing Bank shall
make any LC Disbursement, then, unless the Borrower shall
reimburse such LC Disbursement in full on the date such LC
Disbursement is made, the unpaid amount thereof shall bear
interest, for each day from and including the date such LC
Disbursement is made to but excluding the date that the
Borrower reimburses such LC Disbursement, at the rate per
annum then applicable to ABR Revolving Loans; provided that,
if the Borrower fails to reimburse such LC Disbursement when
due pursuant to paragraph (e) of this Section, then Section
2.13(e) shall apply. Interest accrued pursuant to this
paragraph shall be for the account of the Issuing Bank,
except that interest accrued on and after the date of
payment by any Revolving Lender pursuant to paragraph (e) of
this Section to reimburse the Issuing Bank shall be for the
account of such Lender to the extent of such payment.
(i) Replacement of the Issuing Bank. The Issuing
Bank may be replaced at any time by written agreement among
the Borrower, the Administrative Agent, the replaced Issuing
Bank and the successor Issuing Bank. The Administrative
Agent shall notify the Lenders of any such replacement of
the Issuing Bank. At the time any such replacement shall
become effective, the Borrower shall pay all unpaid fees
accrued for the account of the replaced Issuing Bank
pursuant to Section 2.12(b). From and after the effective
date of any such replacement, (i) the successor Issuing Bank
shall have all the rights and obligations of the Issuing
Bank under this Agreement with respect to Letters of Credit
to be issued thereafter and (ii) references herein to the
term "Issuing Bank" shall be deemed to refer to such
successor or to any previous Issuing Bank, or to such
successor and all previous Issuing Banks, as the context
shall require. After the replacement of an Issuing Bank
hereunder, the replaced Issuing Bank shall remain a party
hereto and shall continue to have all the rights and
obligations of an Issuing Bank under this Agreement with
respect to Letters of Credit issued by it prior to such
replacement, but shall not be required to issue additional
Letters of Credit.
(j) Cash Collateralization. If any Event of
Default shall occur and be continuing, on the Business Day
that the Borrower receives notice from the Administrative
Agent or the Required Lenders (or, if the maturity of the
Loans has been accelerated, Revolving Lenders with LC
Exposure representing greater than 50% of the total LC
Exposure) demanding the deposit of cash collateral pursuant
to this paragraph, the Borrower shall deposit in an account
with the Administrative Agent, in the name of the
Administrative Agent and for the benefit of the Lenders, an
amount in cash equal to the LC Exposure as of such date plus
any accrued and unpaid interest thereon; provided that the
obligation to deposit such cash collateral shall become
effective immediately, and such deposit shall become
immediately due and payable, without demand or other notice
of any kind, upon the occurrence of any Event of Default
with respect to the Borrower described in clause (i) or (j)
of Section 7.01. Such deposit shall be held by the
Administrative Agent as collateral for the payment and
performance of the obligations of the Borrower under this
Agreement. The Administrative Agent shall have exclusive
dominion and control, including the exclusive right of
withdrawal, over such account. Other than any interest
earned on the investment of such deposits, which investments
shall be made at the option and sole discretion of the
Administrative Agent and at the Borrower's risk and expense,
such deposits shall not bear interest. Interest or profits,
if any, on such investments shall accumulate in such
account. Moneys in such account shall be applied by the
Administrative Agent to reimburse the Issuing Bank for LC
Disbursements for which it has not been reimbursed and, to
the extent not so applied, shall be held for the
satisfaction of the reimbursement obligations of the
Borrower for the LC Exposure at such time or, if the
maturity of the Loans has been accelerated (but subject to
the consent of Revolving Lenders with LC Exposure
representing greater than 50% of the total LC Exposure), be
applied to satisfy other obligations of the Borrower under
this Agreement. If the Borrower is required to provide an
amount of cash collateral hereunder as a result of the
occurrence of an Event of Default, (i) such amount (to the
extent not applied as aforesaid) shall be returned to the
Borrower within three Business Days after all Events of
Default have been cured or waived and (ii) if any Letter of
Credit thereafter expires or is terminated, then within
three Business Days thereafter there shall be returned to
the Borrower an amount equal to the excess, if any, of the
amount of cash collateral then held hereunder (excluding
amounts attributable to interest or profits on investments)
over the amount of LC Exposure and accrued and unpaid
interest thereon after giving effect to such expiration or
termination.
SECTION 2.07. Funding of Borrowings. (a) Each
Lender shall make each Loan to be made by it hereunder on
the proposed date thereof (i) by wire transfer of
immediately available funds by 12:00 noon, New York City
time at the place of payment, to the account of the
Administrative Agent most recently designated by it for such
purpose by notice to the Lenders or (ii) subject to the
provisions of Section 2.04, if such Borrowing is to be made
in an Alternative Currency, by making available the
Equivalent Amount of such Alternative Currency (in such
funds as may then be customary for the settlement of
international transactions in the Alternative Currency) by
12:00 noon, local time at the place of payment, to the
account of the Administrative Agent at such place as shall
have been notified by the Administrative Agent to the
Lenders by not less than five Business Days' notice;
provided that Swingline Loans shall be made as provided in
Section 2.05. The Administrative Agent will make such Loans
available to the Borrower by promptly crediting the amounts
so received, in like funds, to an account of the Borrower
maintained with the Administrative Agent in New York City
and designated by the Borrower in the applicable Borrowing
Request or Competitive Bid Request (or, in the case of a
Borrowing made in an Alternative Currency, to an account
mutually agreed between the Borrower and the Administrative
Agent for funding such Borrowing); provided that ABR
Revolving Loans made to finance the reimbursement of an LC
Disbursement as provided in Section 2.06(e) shall be
remitted by the Administrative Agent to the Issuing Bank.
(b) Unless the Administrative Agent shall have
received notice from a Lender prior to the proposed date of
any Borrowing that such Lender will not make available to
the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such
Lender has made such share available on such date in
accordance with paragraph (a) of this Section and may, in
reliance upon such assumption, make available to the
Borrower a corresponding amount. In such event, if a Lender
has not in fact made its share of the applicable Borrowing
available to the Administrative Agent, then the applicable
Lender and the Borrower severally agree to pay to the
Administrative Agent forthwith on demand such corresponding
amount with interest thereon, for each day from and
including the date such amount is made available to the
Borrower to but excluding the date of payment to the
Administrative Agent, at (i) in the case of such Lender, the
greater of the Federal Funds Effective Rate and a rate
determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation or (ii) in
the case of the Borrower, the interest rate applicable to
ABR Loans. If such Lender pays such amount to the
Administrative Agent, then such amount shall constitute such
Lender's Loan included in such Borrowing.
SECTION 2.08. Interest Elections. (a) Each
Revolving Borrowing and Term Borrowing initially shall be of
the Type specified in the applicable Borrowing Request and,
in the case of a Eurodollar Borrowing, shall have an initial
Interest Period as specified in such Borrowing Request.
Thereafter, the Borrower may elect to convert such Borrowing
to a different Type or to continue such Borrowing and, in
the case of a Eurodollar Borrowing, may elect Interest
Periods therefor, all as provided in this Section. The
Borrower may elect different options with respect to
different portions of the affected Borrowing, in which case
each such portion shall be allocated ratably among the
Lenders holding the Loans comprising such Borrowing, and the
Loans comprising each such portion shall be considered a
separate Borrowing. This Section shall not apply to
Competitive Borrowings or Swingline Borrowings, which may
not be converted or continued.
(b) To make an election pursuant to this Section,
the Borrower shall notify the Administrative Agent of such
election by telephone by the time that a Borrowing Request
would be required under Section 2.03 if the Borrower were
requesting a Revolving Borrowing of the Type resulting from
such election to be made on the effective date of such
election. Each such telephonic Interest Election Request
shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a
written Interest Election Request in a form approved by the
Administrative Agent and signed by the Borrower.
(c) Each telephonic and written Interest Election
Request shall specify the following information in
compliance with Section 2.02:
(i) the Borrowing to which such Interest Election
Request applies and, if different options are being
elected with respect to different portions thereof, the
portions thereof to be allocated to each resulting
Borrowing (in which case the information to be
specified pursuant to clauses (iii) and (iv) below
shall be specified for each resulting Borrowing);
(ii) the effective date of the election made
pursuant to such Interest Election Request, which shall
be a Business Day;
(iii) whether the resulting Borrowing is to be an
ABR Borrowing or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar
Borrowing, the Interest Period to be applicable thereto
after giving effect to such election, which shall be a
period contemplated by the definition of the term
"Interest Period".
If any such Interest Election Request requests a Eurodollar
Borrowing but does not specify an Interest Period, then the
Borrower shall be deemed to have selected an Interest Period
of one month's duration.
(d) Promptly following receipt of an Interest
Election Request, the Administrative Agent shall advise each
Lender of the details thereof and of such Lender's portion
of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely
Interest Election Request with respect to a Eurodollar
Revolving Borrowing or Eurodollar Term Borrowing prior to
the end of the Interest Period applicable thereto, then,
unless such Borrowing is repaid as provided herein, at the
end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing. Notwithstanding any contrary
provision hereof, if an Event of Default has occurred and is
continuing and the Administrative Agent, at the request of
the Required Lenders, so notifies the Borrower, then, so
long as an Event of Default is continuing (i) no outstanding
Borrowing may be converted to or continued as a Eurodollar
Borrowing and (ii) unless repaid, each Eurodollar Revolving
Borrowing or Eurodollar Term Borrowing shall be converted to
an ABR Borrowing at the end of the Interest Period
applicable thereto.
SECTION 2.09. Termination and Reduction of
Commitments. (a) Unless previously terminated, (i) the
Term Commitments shall terminate at 5:00 p.m., New York City
time, on the Effective Date and (ii) the Revolving
Commitments shall terminate on the Maturity Date.
(b) The Borrower may at any time terminate, or
from time to time reduce, the Revolving Commitments;
provided that (i) each reduction of the Revolving
Commitments shall be in an amount that is an integral
multiple of $2,500,000 and not less than $15,000,000 and
(ii) the Borrower shall not terminate or reduce the
Revolving Commitments if, after giving effect to any
concurrent prepayment of the Revolving Loans in accordance
with Section 2.11, the sum of the Revolving Credit Exposures
plus the aggregate principal amount of outstanding
Competitive Loans would exceed the total Revolving
Commitments.
(c) The Borrower shall notify the Administrative
Agent of any election to terminate or reduce the Revolving
Commitments under paragraph (b) of this Section at least
three Business Days prior to the effective date of such
termination or reduction, specifying such election and the
effective date thereof. Promptly following receipt of any
notice, the Administrative Agent shall advise the Lenders of
the contents thereof. Each notice delivered by the Borrower
pursuant to this Section shall be irrevocable; provided that
a notice of termination of the Revolving Commitments
delivered by the Borrower may state that such notice is
conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by the
Borrower (by notice to the Administrative Agent on or prior
to the specified effective date) if such condition is not
satisfied. Any termination or reduction of the Revolving
Commitments shall be permanent. Each reduction of the
Revolving Commitments shall be made ratably among the
Lenders in accordance with their respective Revolving
Commitments.
SECTION 2.10. Repayment of Loans; Evidence of
Debt. (a) The Borrower hereby unconditionally promises to
pay (i) to the Administrative Agent for the account of each
Lender the then unpaid principal amount of each Revolving
Loan and Term Loan of such Lender on the Maturity Date,
(ii) to the Administrative Agent for the account of each
Lender the then unpaid principal amount of each Competitive
Loan on the last day of the Interest Period applicable to
such Loan and (iii) to the Swingline Lender the then unpaid
principal amount of each Swingline Loan on the earlier of
the Maturity Date and the date that is five Business Days
after such Swingline Loan is made; provided that on each
date that a Revolving Borrowing or Competitive Borrowing
(other than a Competitive Borrowing denominated in an
Alternative Currency) is made, the Borrower shall repay all
Swingline Loans which were outstanding at the time such
Borrowing was requested.
(b) Each Lender shall maintain in accordance with
its usual practice an account or accounts evidencing the
indebtedness of the Borrower to such Lender resulting from
each Loan made by such Lender, including the amounts of
principal and interest payable and paid to such Lender from
time to time hereunder.
(c) The Administrative Agent shall maintain
accounts in which it shall record (i) the amount and
currency of each Loan made hereunder, the Class and Type
thereof and the Interest Period applicable thereto, (ii) the
amount of any principal or interest due and payable or to
become due and payable from the Borrower to each Lender
hereunder and (iii) the amount of any sum received by the
Administrative Agent hereunder for the account of the
Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained
pursuant to paragraph (b) or (c) of this Section shall be
prima facie evidence of the existence and amounts of the
obligations recorded therein; provided that the failure of
any Lender or the Administrative Agent to maintain such
accounts or any error therein shall not in any manner affect
the obligation of the Borrower to repay the Loans in
accordance with the terms of this Agreement.
(e) Any Lender may request that Loans of any
Class made by it be evidenced by a promissory note. In such
event, the Borrower shall prepare, execute and deliver to
such Lender a promissory note payable to the order of such
Lender (or, if requested by such Lender, to such Lender and
its registered assigns) and in a form approved by the
Administrative Agent. Thereafter, the Loans evidenced by
such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 9.04) be
represented by one or more promissory notes in such form
payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its
registered assigns).
SECTION 2.11. Prepayment of Loans. (a) The
Borrower shall have the right at any time and from time to
time to prepay any Borrowing in whole or in part, subject to
prior notice in accordance with paragraph (d) of this
Section; provided that the Borrower shall not have the right
to prepay any Competitive Loan without the prior consent of
the Lender thereof.
(b) In the event and on each occasion that any Net
Proceeds are received by or on behalf of the Borrower or any
Domestic Subsidiary in respect of any Prepayment Event, the
Borrower shall, within 10 Business Days after such Net
Proceeds are received, prepay Term Borrowings in an
aggregate amount equal to (i) 75% of such Net Proceeds, in
the event that the aggregate outstanding Indebtedness of the
Borrower and the Subsidiaries exceeds $4,000,000,000 at the
time such prepayment is to be made, or (ii) 50% of such Net
Proceeds, in the event that the aggregate outstanding
Indebtedness of the Borrower and the Subsidiaries exceeds
$3,500,000,000 but is less than or equal to $4,000,000,000
at the time such prepayment is to be made, or
(iii) notwithstanding the foregoing clauses (i) and (ii),
25% of such Net Proceeds, in the event that either (A) the
Index Debt is rated at least BBB- by S&P or Baa3 by Moody's
at the time such prepayment is to be made or (B) the
aggregate outstanding Indebtedness of the Borrower and the
Subsidiaries is less than or equal to $3,500,000,000 at the
time such prepayment is to be made; provided that (x) no
prepayment shall be required under this paragraph if at the
time such prepayment is to be made the Index Debt is rated
at least BBB- by S&P and Baa3 by Moody's and (y) in the
event that, after application of part of any required
prepayment in accordance with clause (i) or (ii) above
(under circumstance where such clause is applicable), the
aggregate outstanding Indebtedness of the Borrower and its
Subsidiaries is reduced below $4,000,000,000 or
$3,500,000,000, the remainder of such prepayment shall be
made, with respect to the portion of such Net Proceeds
applicable to such remainder, in accordance with the
foregoing clause (ii) or (iii), as applicable.
Notwithstanding the foregoing (1) no prepayment shall be
required under this paragraph in an aggregate principal
amount less than $25,000,000 and any prepayments that would
(if not for this sentence) be required in a lesser amount
shall be cumulated until the aggregate principal amount of
prepayments not yet made equals or exceeds $25,000,000, at
which time such prepayments shall be required, (2) each
prepayment required under this paragraph shall be in an
aggregate principal amount that is an integral multiple of
$1,000,000 (rounded down to the nearest $1,000,000), and (3)
so long as no Default has occurred and is continuing, any
mandatory prepayment required under this paragraph in excess
of the aggregate principal amount of ABR Term Loans at the
time may be deferred, if necessary in order to avoid
payments that otherwise would be required under
Section 2.16, and made on the last day of each Interest
Period of a Eurodollar Term Borrowing occurring thereafter
in an amount equal to such Borrowing until the full amount
of the required prepayment is made.
(c) In the event that any mandatory prepayment of
Term Borrowings would be required under paragraph (b) above
at a time when no Term Borrowings are outstanding, then
(i) the Revolving Commitments shall be ratably reduced by an
amount equal to the required prepayments and (ii) the
Borrower shall prepay Revolving Borrowings in an amount
equal to the amount, if any, by which the sum of the
Revolving Credit Exposures plus the aggregate principal
amount of outstanding Competitive Loans exceeds the
Revolving Commitments after giving effect to such reduction;
provided that no such reduction of the Revolving Commitments
shall be required after the Revolving Commitments have been
reduced to an amount less than or equal to $3,000,000,000.
(d) The Borrower shall notify the Administrative
Agent (and, in the case of prepayment of a Swingline Loan,
the Swingline Lender) by telephone (confirmed by telecopy)
of any prepayment hereunder (i) in the case of prepayment of
a Eurodollar Borrowing, not later than 11:00 a.m., New York
City time, three Business Days before the date of
prepayment, (ii) in the case of prepayment of an ABR
Borrowing, not later than 11:00 a.m., New York City time,
one Business Day before the date of prepayment or (iii) in
the case of prepayment of a Swingline Loan, not later than
12:00 noon, New York City time, on the date of prepayment.
Each such notice shall be irrevocable and shall specify the
prepayment date, the principal amount of each Borrowing or
portion thereof to be prepaid and, in the case of a
mandatory prepayment, a reasonably detailed calculation of
the amount of such prepayment; provided that, if a notice of
optional prepayment is given in connection with a
conditional notice of termination of the Revolving
Commitments as contemplated by Section 2.09, then such
notice of prepayment may be revoked if such notice of
termination is revoked in accordance with Section 2.09.
Promptly following receipt of any such notice (other than a
notice relating solely to Swingline Loans), the
Administrative Agent shall advise the Lenders of the
contents thereof. Each partial prepayment of any Borrowing
shall be in an aggregate amount that is an integral multiple
of $2,500,000 (except as necessary to apply fully the
required amount of a mandatory prepayment) and not less than
$15,000,000. Each prepayment of a Borrowing shall be
applied ratably to the Loans included in the prepaid
Borrowing. Prepayments shall be accompanied by accrued
interest to the extent required by Section 2.13.
SECTION 2.12. Fees. (a) The Borrower agrees to
pay to the Administrative Agent for the account of each
Lender a facility fee, which shall accrue at the Applicable
Rate on the daily amount of the Commitment of such Lender
(whether used or unused) during the period from and
including October 2, 1997, to but excluding the date on
which such Commitment terminates; provided that, if such
Lender continues to have any Revolving Credit Exposure after
its Revolving Commitment terminates, then such facility fee
shall continue to accrue on the daily amount of such
Lender's Revolving Credit Exposure from and including the
date on which its Revolving Commitment terminates to but
excluding the date on which such Lender ceases to have any
Revolving Credit Exposure. Accrued facility fees shall be
payable in arrears on the last day of March, June, September
and December of each year and on the date on which the
Revolving Commitments terminate, commencing on the first
such date to occur after the date hereof; provided that
(i) facility fees accrued on the Term Commitments shall be
payable on the Effective Date and (ii) any facility fees
accruing after the date on which the Revolving Commitments
terminate shall be payable on demand. All facility fees
shall be computed on the basis of a year of 360 days and
shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).
(b) The Borrower agrees to pay (i) to the
Administrative Agent for the account of each Revolving
Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue at
the same Applicable Rate as interest on Eurodollar Revolving
Loans on the average daily amount of such Lender's LC
Exposure (excluding any portion thereof attributable to
unreimbursed LC Disbursements) during the period from and
including the Effective Date to but excluding the later of
the date on which such Lender's Revolving Commitment
terminates and the date on which such Lender ceases to have
any LC Exposure, and (ii) to the Issuing Bank a fronting
fee, which shall accrue at the rate or rates per annum
separately agreed upon between the Borrower and the Issuing
Bank on the average daily amount of the LC Exposure
(excluding any portion thereof attributable to unreimbursed
LC Disbursements) during the period from and including the
Effective Date to but excluding the later of the date of
termination of the Revolving Commitments and the date on
which there ceases to be any LC Exposure, as well as the
Issuing Bank's standard fees with respect to the issuance,
amendment, renewal or extension of any Letter of Credit or
processing of drawings thereunder. Participation fees and
fronting fees accrued through and including the last day of
March, June, September and December of each year shall be
payable on the third Business Day following such last day,
commencing on the first such date to occur after the
Effective Date; provided that all such fees shall be payable
on the date on which the Revolving Commitments terminate and
any such fees accruing after the date on which the Revolving
Commitments terminate shall be payable on demand. Any other
fees payable to the Issuing Bank pursuant to this paragraph
shall be payable within 10 days after demand. All
participation fees and fronting fees shall be computed on
the basis of a year of 360 days and shall be payable for the
actual number of days elapsed (including the first day but
excluding the last day).
(c) The Borrower agrees to pay to the
Administrative Agent, for its own account, fees payable in
the amounts and at the times separately agreed upon between
the Borrower and the Administrative Agent.
(d) All fees payable hereunder shall be paid on
the dates due, in immediately available funds, to the
Administrative Agent (or to the Issuing Bank, in the case of
fees payable to it) for distribution, in the case of
facility fees and participation fees, to the Lenders. Fees
paid shall not be refundable under any circumstances.
SECTION 2.13. Interest. (a) The Loans
comprising each ABR Borrowing shall bear interest at the
Alternate Base Rate.
(b) The Loans comprising each Eurodollar
Borrowing shall bear interest (i) in the case of a
Eurodollar Revolving Loan or a Eurodollar Term Borrowing, at
the Adjusted LIBO Rate for the Interest Period in effect for
such Borrowing plus the Applicable Rate, or (ii) in the case
of a Eurodollar Competitive Loan, at the LIBO Rate for the
Interest Period in effect for such Borrowing plus (or minus,
as applicable) the Margin applicable to such Loan.
(c) Each Fixed Rate Loan shall bear interest at
the Fixed Rate applicable to such Loan.
(d) Each Swingline Loan shall bear interest at
such rate per annum as shall be agreed to in writing by the
Borrower and the Swingline Lender with respect to such
Swingline Loan or, if no such agreement shall be made, at
the Alternate Base Rate.
(e) Notwithstanding the foregoing, if any
principal of or interest on any Loan or any fee or other
amount payable by the Borrower hereunder is not paid when
due, whether at stated maturity, upon acceleration or
otherwise, such overdue amount shall bear interest, after as
well as before judgment, at a rate per annum equal to (i) in
the case of overdue principal of any Loan, 2% plus the rate
otherwise applicable to such Loan as provided in the
preceding paragraphs of this Section or (ii) in the case of
any other amount, 2% plus the rate applicable to ABR Loans
as provided in paragraph (a) of this Section.
(f) Accrued interest on each Loan shall be
payable in arrears on each Interest Payment Date for such
Loan and, in the case of Revolving Loans, upon termination
of the Revolving Commitments; provided that (i) interest
accrued pursuant to paragraph (e) of this Section shall be
payable on demand, (ii) in the event of any repayment or
prepayment of any Loan (other than a prepayment of an ABR
Revolving Loan prior to the end of the Availability Period),
accrued interest on the principal amount repaid or prepaid
shall be payable on the date of such repayment or prepayment
and (iii) in the event of any conversion of any Eurodollar
Loan prior to the end of the current Interest Period
therefor, accrued interest on such Loan shall be payable on
the effective date of such conversion.
(g) All interest hereunder shall be computed on
the basis of a year of 360 days, except that interest
computed by reference to the Alternate Base Rate at times
when the Alternate Base Rate is based on the Prime Rate
shall be computed on the basis of a year of 365 days (or 366
days in a leap year), and in each case shall be payable for
the actual number of days elapsed (including the first day
but excluding the last day). The applicable Alternate Base
Rate, Adjusted LIBO Rate or LIBO Rate shall be determined by
the Administrative Agent, and such determination shall be
conclusive absent manifest error.
SECTION 2.14. Alternate Rate of Interest. If
prior to the commencement of any Interest Period for a
Eurodollar Borrowing:
(a) the Administrative Agent determines (which
determination shall be conclusive absent manifest
error) that adequate and reasonable means do not exist
for ascertaining the Adjusted LIBO Rate or the LIBO
Rate, as applicable, for such Interest Period; or
(b) the Administrative Agent is advised by the
Required Lenders (or, in the case of a Eurodollar
Competitive Loan, the Lender that is required to make
such Loan) that the Adjusted LIBO Rate or the LIBO
Rate, as applicable, for such Interest Period will not
adequately and fairly reflect the cost to such Lenders
(or Lender) of making or maintaining their Loans (or
its Loan) included in such Borrowing for such Interest
Period;
then the Administrative Agent shall give notice thereof to
the Borrower and the Lenders by telephone or telecopy as
promptly as practicable thereafter and, until the
Administrative Agent notifies the Borrower and the Lenders
that the circumstances giving rise to such notice no longer
exist, (i) any Interest Election Request that requests the
conversion of any Borrowing to, or continuation of any
Borrowing as, a Eurodollar Borrowing shall be ineffective,
(ii) if any Borrowing Request requests a Eurodollar
Revolving Borrowing, such Borrowing shall be made as an ABR
Borrowing and (iii) any request by the Borrower for a
Eurodollar Competitive Borrowing shall be ineffective;
provided that, if the circumstances giving rise to such
notice do not affect all the Lenders, then requests by the
Borrower for Eurodollar Competitive Borrowings may be made
to Lenders that are not affected thereby.
SECTION 2.15. Increased Costs. (a) If any
Change in Law shall:
(i) impose, modify or deem applicable any reserve,
special deposit or similar requirement against assets
of, deposits with or for the account of, or credit
extended by, any Lender (except any such reserve
requirement reflected in the Adjusted LIBO Rate) or the
Issuing Bank; or
(ii) impose on any Lender or the Issuing Bank or
the London interbank market any other condition
affecting this Agreement or Eurodollar Loans or Fixed
Rate Loans made by such Lender or any Letter of Credit
or participation therein;
and the result of any of the foregoing shall be to increase
the cost to such Lender of making or maintaining any
Eurodollar Loan or Fixed Rate Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to
such Lender or the Issuing Bank of participating in, issuing
or maintaining any Letter of Credit or to reduce the amount
of any sum received or receivable by such Lender or the
Issuing Bank hereunder (whether of principal, interest or
otherwise), then the Borrower will pay to such Lender or the
Issuing Bank, as the case may be, such additional amount or
amounts as will compensate such Lender or the Issuing Bank,
as the case may be, for such additional costs incurred or
reduction suffered.
(b) If any Lender or the Issuing Bank reasonably
determines that any Change in Law regarding capital
requirements has or would have the effect of reducing the
rate of return on such Lender's or the Issuing Bank's
capital or on the capital of such Lender's or the Issuing
Bank's holding company, if any, as a consequence of this
Agreement or the Loans made by, or participations in Letters
of Credit held by, such Lender, or the Letters of Credit
issued by the Issuing Bank, to a level below that which such
Lender or the Issuing Bank or such Lender's or the Issuing
Bank's holding company could have achieved but for such
Change in Law (taking into consideration such Lender's or
the Issuing Bank's policies and the policies of such
Lender's or the Issuing Bank's holding company with respect
to capital adequacy), then from time to time the Borrower
will pay to such Lender or the Issuing Bank, as the case may
be, such additional amount or amounts as will compensate
such Lender or the Issuing Bank or such Lender's or the
Issuing Bank's holding company for any such reduction
suffered.
(c) A certificate of a Lender or the Issuing Bank
setting forth the amount or amounts necessary to compensate
such Lender or the Issuing Bank or its holding company, as
the case may be, as specified in paragraph (a) or (b) of
this Section shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay
such Lender or the Issuing Bank, as the case may be, the
amount shown as due on any such certificate within 10 days
after receipt thereof.
(d) Failure or delay on the part of any Lender or
the Issuing Bank to demand compensation pursuant to this
Section shall not constitute a waiver of such Lender's or
the Issuing Bank's right to demand such compensation;
provided that the Borrower shall not be required to
compensate a Lender or the Issuing Bank pursuant to this
Section for any increased costs or reductions incurred more
than 270 days prior to the date that such Lender or the
Issuing Bank, as the case may be, notifies the Borrower of
the Change in Law giving rise to such increased costs or
reductions and of such Lender's or the Issuing Bank's
intention to claim compensation therefor; provided further
that, if the Change in Law giving rise to such increased
costs or reductions is retroactive, then the 270-day period
referred to above shall be extended to include the period of
retroactive effect thereof.
(e) Notwithstanding the foregoing provisions of
this Section, a Lender shall not be entitled to compensation
pursuant to this Section in respect of any Competitive Loan
if the Change in Law that would otherwise entitle it to such
compensation shall have been publicly announced prior to
submission of the Competitive Bid pursuant to which such
Loan was made.
SECTION 2.16. Break Funding Payments. In the
event of (a) the payment of any principal of any Eurodollar
Loan or Fixed Rate Loan other than on the last day of an
Interest Period applicable thereto (including as a result of
an Event of Default), (b) the conversion of any Eurodollar
Loan other than on the last day of the Interest Period
applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Revolving Loan or Term Loan on the
date specified in any notice delivered pursuant hereto
(regardless of whether such notice may be revoked under
Section 2.11(b) and is revoked in accordance therewith),
(d) the failure to borrow any Competitive Loan after
accepting the Competitive Bid to make such Loan, or (e) the
assignment of any Eurodollar Loan or Fixed Rate Loan other
than on the last day of the Interest Period applicable
thereto as a result of a request by the Borrower pursuant to
Section 2.19, then, in any such event, the Borrower shall
compensate each Lender for the loss, cost and expense
attributable to such event. In the case of a Eurodollar
Loan, such loss, cost or expense to any Lender shall be
deemed to include an amount determined by such Lender to be
the excess, if any, of (i) the amount of interest which
would have accrued on the principal amount of such Loan had
such event not occurred, at the Adjusted LIBO Rate that
would have been applicable to such Loan, for the period from
the date of such event to the last day of the then current
Interest Period therefor (or, in the case of a failure to
borrow, convert or continue, for the period that would have
been the Interest Period for such Loan), over (ii) the
amount of interest which would accrue on such principal
amount for such period at the interest rate which such
Lender would bid were it to bid, at the commencement of such
period, for dollar deposits of a comparable amount and
period from other banks in the eurodollar market. A certifi
cate of any Lender setting forth any amount or amounts that
such Lender is entitled to receive pursuant to this Section
shall be delivered to the Borrower and shall be conclusive
absent manifest error. The Borrower shall pay such Lender
the amount shown as due on any such certificate within 10
days after receipt thereof.
SECTION 2.17. Taxes. (a) Any and all payments
by or on account of any obligation of the Borrower hereunder
shall be made free and clear of and without deduction for
any Indemnified Taxes or Other Taxes; provided that if the
Borrower shall be required to deduct any Indemnified Taxes
or Other Taxes from such payments, then (i) the sum payable
shall be increased as necessary so that after making all
required deductions (including deductions applicable to
additional sums payable under this Section) the
Administrative Agent, Lender or Issuing Bank (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 Governmental
Authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any Other
Taxes to the relevant Governmental Authority in accordance
with applicable law.
(c) The Borrower shall indemnify the
Administrative Agent, each Lender and the Issuing Bank,
within 10 days after written demand therefor, for the full
amount of any Indemnified Taxes or Other Taxes paid by the
Administrative Agent, such Lender or the Issuing Bank, as
the case may be, on or with respect to any payment by or on
account of any obligation of the Borrower hereunder
(including Indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this
Section) and any penalties, interest and reasonable expenses
arising therefrom or with respect thereto, whether or not
such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment
or liability delivered to the Borrower by a Lender or the
Issuing Bank, or by the Administrative Agent on its own
behalf or on behalf of a Lender or the Issuing Bank, shall
be conclusive absent manifest error.
(d) As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Borrower to a
Governmental Authority, the Borrower shall deliver to the
Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or
other evidence of such payment reasonably satisfactory to
the Administrative Agent.
(e) Any Foreign Lender that is entitled to an
exemption from or reduction of withholding tax under the law
of the jurisdiction in which the Borrower is located, or any
treaty to which such jurisdiction is a party, with respect
to payments under this Agreement shall deliver to the
Borrower (with a copy to the Administrative Agent), at the
time or times prescribed by applicable law, such properly
completed and executed documentation prescribed by
applicable law or reasonably requested by the Borrower as
will permit such payments to be made without withholding or
at a reduced rate.
SECTION 2.18. Payments Generally; Pro Rata
Treatment; Sharing of Setoffs. (a) Except for payments
required to be made hereunder in an Alternative Currency as
expressly provided in Section 2.04(g), the Borrower shall
make each payment required to be made by it hereunder
(whether of principal, interest, fees or reimbursement of LC
Disbursements, or of amounts payable under Section 2.15,
2.16 or 2.17, or otherwise) in dollars prior to 12:00 noon,
New York City time, on the date when due, in immediately
available funds, without setoff or counterclaim. All such
payments shall be made to the Administrative Agent at its
offices at 270 Park Avenue, New York, New York, except
payments to be made directly to the Issuing Bank or
Swingline Lender as expressly provided herein and except
that payments pursuant to Sections 2.15, 2.16, 2.17 and 9.03
shall be made directly to the Persons entitled thereto. All
payments to be made by the Borrower in an Alternative
Currency pursuant to Section 2.04(g) shall be made in such
Alternative Currency in such funds as may then be customary
for the settlement of international transactions in such
Alternative Currency for the account of the Administrative
Agent at such time and at such place as shall have been
notified by the Administrative Agent to the Borrower by not
less than four Business Days' notice. Any amounts received
after the time required to be received hereunder on any date
may, in the discretion of the Administrative Agent, be
deemed to have been received on the next succeeding Business
Day for purposes of calculating interest thereon. The
Administrative Agent shall distribute any such payments
received by it for the account of any other Person to the
appropriate recipient promptly following receipt thereof.
If any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall be extended to the
next succeeding Business Day, and, in the case of any
payment accruing interest, interest thereon shall be payable
for the period of such extension. Except for payments
required to be made hereunder in an Alternative Currency as
expressly provided in Section 2.04(g), all payments
hereunder shall be made in dollars.
(b) If at any time insufficient funds are
received by and available to the Administrative Agent to pay
fully all amounts of principal, unreimbursed LC
Disbursements, interest and fees then due hereunder, such
funds shall be applied (i) first, towards payment of
interest and fees then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of
interest and fees then due to such parties, and (ii) second,
towards payment of principal and unreimbursed LC
Disbursements then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal
and unreimbursed LC Disbursements then due to such parties;
provided that all funds received by the Administrative Agent
in an Alternative Currency pursuant to Section 2.04(g) shall
be applied ratably to the payment of amounts due with
respect to Competitive Loans in such Alternative Currency in
accordance with the provisions of this paragraph to the
parties entitled thereto in accordance with the amounts then
due to such parties.
(c) If any Lender shall, by exercising any right
of set-off or counterclaim or otherwise, obtain payment in
respect of any principal of or interest on any of its
Revolving Loans, Term Loans or participations in LC
Disbursements or Swingline Loans resulting in such Lender
receiving payment of a greater proportion of the aggregate
amount of its Revolving Loans, Term Loans and participations
in LC Disbursements and Swingline Loans and accrued interest
thereon than the proportion received by any other Lender,
then the Lender receiving such greater proportion shall
purchase (for cash at face value) participations in the
Revolving Loans, Term Loans and participations in LC
Disbursements and Swingline Loans of other Lenders to the
extent necessary so that the benefit of all such payments
shall be shared by the Lenders ratably in accordance with
the aggregate amount of principal of and accrued interest on
their respective Revolving Loans, Term Loans and
participations in LC Disbursements and Swingline Loans;
provided that (i) if any such participations are purchased
and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery,
without interest, and (ii) the provisions of this paragraph
shall not be construed to apply to any payment made by the
Borrower pursuant to and in accordance with the express
terms of this Agreement or any payment obtained by a Lender
as consideration for the assignment of or sale of a
participation in any of its Loans or participations in LC
Disbursements to any assignee or participant, other than to
the Borrower or any Subsidiary or Affiliate thereof (as to
which the provisions of this paragraph shall apply). The
Borrower consents to the foregoing and agrees, to the extent
it may effectively do so under applicable law, that any
Lender acquiring a participation pursuant to the foregoing
arrangements may exercise against the Borrower rights of set-
off and counterclaim with respect to such participation as
fully as if such Lender were a direct creditor of the
Borrower in the amount of such participation.
(d) Unless the Administrative Agent shall have
received notice from the Borrower prior to the date on which
any payment is due to the Administrative Agent for the
account of the Lenders or the Issuing Bank hereunder that
the Borrower will not make such payment, the Administrative
Agent may assume that the Borrower has made such payment on
such date in accordance herewith and may, in reliance upon
such assumption, distribute to the Lenders or the Issuing
Bank, as the case may be, the amount due. In such event, if
the Borrower has not in fact made such payment, then each of
the Lenders or the Issuing Bank, as the case may be,
severally agrees to repay to the Administrative Agent
forthwith on demand the amount so distributed to such Lender
or Issuing Bank with interest thereon, for each day from and
including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent,
at the greater of the Federal Funds Effective Rate and a
rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment
required to be made by it pursuant to Section 2.05(c),
2.06(d) or (e), 2.07(b) or 2.18(d), then the Administrative
Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by
the Administrative Agent for the account of such Lender to
satisfy such Lender's obligations under such Sections until
all such unsatisfied obligations are fully paid.
SECTION 2.19. Mitigation Obligations; Replacement
of Lenders. (a) If any Lender requests compensation under
Section 2.15, or if the Borrower is required to pay any
additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to
Section 2.17, then such Lender shall use reasonable efforts
to file any certificate or document reasonably requested by
the Borrower or designate a different lending office for
funding or booking its Loans hereunder or to assign its
rights and obligations hereunder to another of its offices,
branches or affiliates, if such filing, designation or
assignment (i) would eliminate or reduce amounts payable
pursuant to Section 2.15 or 2.17, as the case may be, in the
future and (ii) in the judgment of such Lender, would not
subject such Lender to any unreimbursed cost or expense and
would not otherwise be disadvantageous to such Lender. The
Borrower hereby agrees to pay all reasonable costs and
expenses incurred by any Lender in connection with any such
designation or assignment.
(b) If any Lender requests compensation under
Section 2.15, or if the Borrower is required to pay any
additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to
Section 2.17, or if any Lender defaults in its obligation to
fund Loans hereunder, then the Borrower may, at its sole
expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject
to the restrictions contained in Section 9.04), all its
interests, rights and obligations under this Agreement
(other than in respect of any outstanding Competitive Loans
held by it) to an assignee that shall assume such
obligations (which assignee may be another Lender, if a
Lender accepts such assignment); provided that (i) the
Borrower shall have received the prior written consent of
the Administrative Agent (and, if a Revolving Commitment is
being assigned, the Issuing Bank and Swingline Lender),
which consent shall not unreasonably be withheld, (ii) such
Lender shall have received payment of an amount equal to the
outstanding principal of its Loans (other than Competitive
Loans) and participations in LC Disbursements and Swingline
Loans, accrued interest thereon, accrued fees and all other
amounts payable to it hereunder, from the assignee (to the
extent of such outstanding principal and accrued interest
and fees) or the Borrower (in the case of all other amounts)
and (iii) in the case of any such assignment resulting from
a claim for compensation under Section 2.15 or payments
required to be made pursuant to Section 2.17, such
assignment will result in a reduction in such compensation
or payments. A Lender shall not be required to make any
such assignment and delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such
assignment and delegation cease to apply.
ARTICLE III
Representations and Warranties
The Borrower represents and warrants to the
Lenders that:
SECTION 3.01. Organization; Powers. Each of the
Borrower and its Subsidiaries is duly organized, validly
existing and in good standing under the laws of the
jurisdiction of its organization, has all requisite power
and authority to carry on its business as now conducted and
is qualified to do business in, and is in good standing in,
every jurisdiction where such qualification is required, in
each case except where the failure to do so, individually or
in the aggregate, would not reasonably be expected to result
in a Material Adverse Effect.
SECTION 3.02. Authorization; Enforceability. The
Transactions to be entered into by each Loan Party are
within such Loan Party's corporate powers and have been (or,
in the case of the Spin-Off Transactions, on or prior to the
Effective Date will be) duly authorized by all necessary
corporate and, if required, stockholder action. This
Agreement and any promissory notes issued pursuant to
Section 2.10(e) have been duly executed and delivered by the
Borrower and constitute, and the Guarantee Agreement, when
executed and delivered by any Loan Party that becomes party
thereto will constitute, a legal, valid and binding
obligation of the Borrower or such Loan Party, as the case
may be, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights
generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity
or at law.
SECTION 3.03. Governmental Approvals; No
Conflicts. The Transactions (a) do not require any consent
or approval of, registration or filing with, or any other
action by, any Governmental Authority, except such as
(i) have been obtained or made and are in full force and
effect or (ii) in the case of the Spin-Off Transactions, are
disclosed in Schedule 3.03 or are not, individually or in
the aggregate, material, (b) will not violate any applicable
law or regulation or the charter, by-laws or other
organizational documents of the Borrower or any of its
Subsidiaries or any order of any Governmental Authority, (c)
will not violate or result in a default under any indenture,
agreement or other instrument binding upon the Borrower or
any of its Subsidiaries or its assets, or give rise to a
right thereunder to require any payment (other than pursuant
to this Agreement and the Spin-Off Documents) to be made by
the Borrower or any of its Subsidiaries, and (d) will not
result in the creation or imposition of any Lien on any
asset of the Borrower or any of its Subsidiaries, except,
with respect to clauses (b) and (c), any such violations,
defaults and payments which, individually or in the
aggregate, would not reasonably be expected to result in a
Material Adverse Effect and except, with respect to
clause (d), any such Liens set forth in Schedule 6.02.
SECTION 3.04. Financial Condition; No Material
Adverse Change. (a) The Borrower has heretofore furnished
to the Lenders (i) its combined balance sheets and
statements of operations, stockholders equity and cash flows
as of and for the fiscal years ended December 28, 1996,
December 30, 1995, and December 31, 1994, reported on by
KPMG Peat Marwick LLP, independent public accountants, and
(ii) its condensed combined balance sheets as of June 14,
1997 and December 28, 1996, its condensed combined
statements of operations for the 12 and 24 week periods
ended June 14, 1997 and June 15, 1996, and its condensed
combined statements of cash flows for the 24 week periods
ended June 14, 1997, and June 15, 1996, certified by its
chief financial officer. Such financial statements present
fairly, in all material respects, the financial position and
results of operations and cash flows of the Borrower and its
consolidated Subsidiaries as of such dates and for such
periods in accordance with GAAP, subject to year-end audit
adjustments and the absence of footnotes in the case of the
statements referred to in clause (ii) above.
(b) The Borrower has heretofore furnished to the
Lenders its pro forma condensed combined balance sheet and
statement of operations as of and for the 24 week period
ended June 14, 1997, and its pro forma condensed combined
statement of operations for the fiscal year ended
December 28, 1996, in each case as included in the
Information Statement. Such pro forma financial statements
furnished to the Lenders (i) have been prepared in good
faith on the basis stated in the notes thereto, (ii) are
based on the best information available to the Borrower
after due inquiry and (iii) present fairly, in all material
respects, the pro forma financial position of the Borrower
and the Subsidiaries as of the dates and for the periods set
forth therein after giving effect to the adjustments set
forth therein.
(c) Since December 28, 1996, there has been no
material adverse change (it being understood that those
changes publicly disclosed prior to the date of execution of
this Agreement are agreed not to be materially adverse) in
the business, assets, operations or condition, financial or
otherwise, of the Borrower and its Subsidiaries, taken as a
whole (assuming for this purpose that all businesses, assets
and liabilities to be transferred to or assumed by the
Borrower and its Subsidiaries in connection with the
Spin-Off Transactions had been so transferred or assumed
prior to December 28, 1996).
SECTION 3.05. Properties. (a) Each of the
Borrower and its Subsidiaries has good title to, or valid
leasehold interests in, all its real and personal property
material to the business of the Borrower and its
Subsidiaries on a consolidated basis, except for minor
defects in title and other matters that do not interfere
with their ability to conduct their businesses on a
consolidated basis as currently conducted or to utilize such
properties for their intended purposes on a consolidated
basis.
(b) Each of the Borrower and its Subsidiaries
owns, or is licensed to use, all trademarks, tradenames,
copyrights, patents and other intellectual property material
to the business of the Borrower and its Subsidiaries on a
consolidated basis, and the use thereof by the Borrower and
its Subsidiaries does not infringe upon the rights of any
other Person, except for any such infringements that,
individually or in the aggregate, would not reasonably be
expected to result in a Material Adverse Effect.
SECTION 3.06. Litigation and Environmental
Matters. (a) There are no actions, suits or proceedings by
or before any arbitrator or Governmental Authority pending
against or, to the knowledge of the Borrower, threatened
against or affecting the Borrower or any of its Subsidiaries
(i) as to which there is a reasonable likelihood of an
adverse determination and that, if adversely determined,
would reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect (other
than the Disclosed Matters) or (ii) that, other than
actions, suits or proceedings commenced by the
Administrative Agent or any Lender, involve this Agreement
or the Transactions (other than the Spin-Off Transactions).
(b) Except for the Disclosed Matters and except
with respect to any other matters that, individually or in
the aggregate, would not reasonably be expected to result in
a Material Adverse Effect, neither the Borrower nor any of
its Subsidiaries (i) has failed to comply with any
Environmental Law or to obtain, maintain or comply with any
permit, license or other approval required under any
Environmental Law, (ii) has become subject to any
Environmental Liability, (iii) has received notice of any
claim with respect to any Environmental Liability or (iv)
knows of any basis for any Environmental Liability.
(c) Since the date of this Agreement, there has
been no change in the status of the Disclosed Matters that,
individually or in the aggregate, has resulted in, or would
reasonably be expected to result in, a Material Adverse
Effect.
SECTION 3.07. Compliance with Laws and
Agreements. Each of the Borrower and its Subsidiaries is in
compliance with all laws, regulations and orders of any
Governmental Authority applicable to it or its property and
all indentures, agreements and other instruments binding
upon it or its property, except where the failure to do so,
individually or in the aggregate, would not reasonably be
expected to result in a Material Adverse Effect. No Default
has occurred and is continuing.
SECTION 3.08. Investment and Holding Company
Status. Neither the Borrower nor any of its Subsidiaries is
(a) an "investment company" as defined in, or subject to
regulation under, the Investment Company Act of 1940 or
(b) a "holding company" as defined in, or subject to regula
tion under, the Public Utility Holding Company Act of 1935.
SECTION 3.09. Taxes. Each of the Borrower and
its Subsidiaries has timely filed or caused to be filed all
Tax returns and reports required to have been filed and has
paid or caused to be paid all Taxes required to have been
paid by it, except (a) Taxes that are being contested in
good faith by appropriate proceedings and for which the
Borrower or such Subsidiary, as applicable, has set aside on
its books adequate reserves or (b) to the extent that the
failure to do so would not reasonably be expected to result
in a Material Adverse Effect.
SECTION 3.10. ERISA. No ERISA Event has occurred
or is reasonably expected to occur that, when taken together
with all other such ERISA Events for which liability is
reasonably expected to occur, would reasonably be expected
to result in a Material Adverse Effect. The present value
of all accumulated benefit obligations of all underfunded
Plans (based on the assumptions used for purposes of
Statement of Financial Accounting Standards No. 87) did not,
as of the date of the most recent financial statements
reflecting such amounts, exceed the fair market value of the
assets of all such underfunded Plans by an amount which, if
it were required to be fully paid, would reasonably be
expected to result in a Material Adverse Effect.
SECTION 3.11. Disclosure. The Borrower has
disclosed to the Lenders all agreements, instruments and
corporate or other restrictions to which it or any of its
Subsidiaries is subject, and all other matters known to it,
that, individually or in the aggregate, would reasonably be
expected to result in a Material Adverse Effect. Except as
set forth in Schedule 3.11, neither the Information
Memorandum, the Information Statement nor any of the other
reports, financial statements, certificates or other
information furnished by or on behalf of the Borrower to the
Administrative Agent or any Lender in connection with the
negotiation of this Agreement or delivered hereunder (as
modified or supplemented by other information so furnished)
contained, at the time so furnished, any material
misstatement of fact or omitted, at the time so furnished,
to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they
were made and the nature and scope of the report, financial
statement, certificate or other information being furnished,
not misleading; provided that, with respect to projected
financial information, the Borrower represents only that
such information was prepared in good faith based upon
assumptions believed to be reasonable at the time.
SECTION 3.12. Solvency. Immediately after the
consummation of the Transactions to occur on the Effective
Date and all related transactions (including the making of
each Loan made on the Effective Date and the application of
the proceeds of such Loans, including all payments to be
made to PepsiCo or any subsidiary thereof in connection with
the Spin-Off Transactions), as of the Effective Date (a) the
fair value of the assets of the Borrower and the Principal
Domestic Subsidiaries taken together, at a fair valuation,
will exceed their debts and liabilities, subordinated,
contingent or otherwise, on a consolidated basis; (b) the
present fair saleable value of the property of the Borrower
and the Principal Domestic Subsidiaries taken together will
be greater than the amount that will be required to pay the
probable liability of their debts and other liabilities,
subordinated, contingent or otherwise, on a consolidated
basis as such debts and other liabilities become absolute
and matured; (c) the Borrower and the Principal Domestic
Subsidiaries taken together will be able to pay their debts
and liabilities, subordinated, contingent or otherwise, on a
consolidated basis as such debts and liabilities become
absolute and matured; and (d) the Borrower and the Principal
Domestic Subsidiaries taken together will not have
unreasonably small capital with which to conduct the
business in which they are engaged as such business is now
conducted and is proposed to be conducted following the
Effective Date.
SECTION 3.13. Consummation of Spin-Off
Transactions. As of the Effective Date, except as disclosed
in Schedule 3.13, all transactions and arrangements,
including all transfers of businesses and assets to the
Borrower and the Subsidiaries, necessary to consummate the
Spin-Off Transactions as contemplated by the Information
Statement have been completed in all material respects.
SECTION 3.14. Fountain Beverage Pour Agreements.
As of the Effective Date, all financial information and
projections provided by or on behalf of the Borrower or
PepsiCo to the Administrative Agent, the Issuing Bank or the
Lenders or included in the Information Memorandum (insofar
as the same are affected by the Fountain Beverage Pour
Agreements) are consistent in all material respects with the
terms and conditions of the Fountain Beverage Pour
Agreements (except for any inconsistency that is favorable
to the Borrower and its Subsidiaries).
SECTION 3.15. Initial Guarantors. As of the
Effective Date, there are no Principal Domestic Subsidiaries
other than the Initial Guarantors.
ARTICLE IV
Conditions
SECTION 4.01. Effective Date. The obligations of
the Lenders to make Loans and of the Issuing Bank to issue
Letters of Credit hereunder shall not become effective until
the date on which each of the following conditions is
satisfied (or waived in accordance with Section 9.02):
(a) The Administrative Agent (or its counsel)
shall have received from each party hereto either (i) a
counterpart of this Agreement signed on behalf of such
party or (ii) written evidence satisfactory to the
Administrative Agent (which may include telecopy
transmission of a signed signature page of this
Agreement) that such party has signed a counterpart of
this Agreement.
(b) The Administrative Agent (or its counsel)
shall have received from each of the Borrower and the
Initial Guarantors either (i) a counterpart of the
Guarantee Agreement signed on behalf of such party or
(ii) written evidence satisfactory to the
Administrative Agent (which may include telecopy
transmission of a signed signature page of the
Guarantee Agreement) that such party has signed a
counterpart of the Guarantee Agreement.
(c) The Administrative Agent shall have received
a favorable written opinion (addressed to the
Administrative Agent and the Lenders and dated the
Effective Date) of each of Christian Campbell,
Lawrence F. Dickie and Cahill Gordon & Reindel, counsel
for the Loan Parties, substantially in the form of
Exhibits C-1, C-2 and C-3, respectively, and covering
such other matters relating to the Loan Parties, the
Loan Documents or the Transactions as the Required
Lenders shall reasonably request. The Borrower hereby
requests such counsel to deliver such opinion.
(d) The Administrative Agent shall have received
such documents and certificates as the Administrative
Agent or its counsel may reasonably request relating to
the organization, existence and good standing of the
Loan Parties, the authorization of the Transactions and
any other legal matters relating to the Loan Parties,
the Loan Documents or the Transactions, all in form and
substance reasonably satisfactory to the Administrative
Agent and its counsel.
(e) The Administrative Agent shall have received
a certificate, dated the Effective Date and signed by
the President, a Vice President or a Financial Officer
of the Borrower, solely in his capacity as such and not
individually, confirming compliance with the conditions
set forth in paragraphs (a) and (b) of Section 4.02.
(f) The Administrative Agent shall have received
all fees and other amounts due and payable on or prior
to the Effective Date, including, to the extent
invoiced, reimbursement or payment of all out-of-pocket
expenses required to be reimbursed or paid by the
Borrower hereunder.
(g) All consents and approvals required to be
obtained from any Governmental Authority (other than
the PBGC) or other Person in connection with the Spin-
Off Transactions (other than any consents and approvals
disclosed in Schedule 3.03 and any consents and
approvals that are not, individually or in the
aggregate, material) shall have been obtained, and all
applicable waiting periods and appeal periods shall
have expired, in each case without the imposition of
any materially burdensome conditions.
(h) To the extent not received prior to the date
of execution and delivery of this Agreement, the
Lenders shall have received copies of the Information
Statement and the Spin-Off Documents, certified by a
Financial Officer as true and complete, and the Lenders
shall be reasonably satisfied therewith.
(i) All transactions and arrangements, including
all transfers of businesses and assets to the Borrower
and the Subsidiaries, necessary to consummate the Spin-
Off Transactions (other than any transactions and
arrangements disclosed in Schedule 3.13) on terms
consistent in all material respects with the pro forma
financial statements and projections provided to the
Lenders and as described in the Information Statement,
shall be completed in all material respects and the
Administrative Agent shall have received a certificate
to such effect executed on behalf of PepsiCo.
(j) After giving effect to the Transactions to
occur on the Effective Date, the unused portion of the
Revolving Commitments will not be less than
$200,000,000.
(k) The Administrative Agent shall have received
a certificate, dated the Effective Date and signed by
the Chief Financial Officer of the Borrower, solely in
his capacity as such and not individually, as to the
accuracy of the matters set forth in Section 3.12.
The Administrative Agent shall notify the Borrower and the
Lenders of the Effective Date, and such notice shall be
conclusive and binding. Notwithstanding the foregoing, the
obligations of the Lenders to make Loans and of the Issuing
Bank to issue Letters of Credit hereunder shall not become
effective unless each of the foregoing conditions is
satisfied (or waived pursuant to Section 9.02) at or prior
to 3:00 p.m., New York City time, on October 31, 1997 (and,
in the event such conditions are not so satisfied or waived,
the Commitments shall terminate at such time).
SECTION 4.02. Each Credit Event. The obligation
of each Lender to make a Loan on the occasion of any
Borrowing, and of the Issuing Bank to issue, amend, renew or
extend any Letter of Credit, is subject to the satisfaction
of the following conditions:
(a) The representations and warranties of the
Borrower set forth in this Agreement shall be true and
correct on and as of the date of such Borrowing or the
date of issuance, amendment, renewal or extension of
such Letter of Credit, as applicable, except to the
extent that any such representations and warranties
expressly relate to an earlier date in which case any
such representations and warranties shall be true and
correct at and as of such earlier date; provided that,
solely for purposes of a Competitive Borrowing, the
representation and warranty set forth in
Section 3.04(c) shall not apply to any material adverse
change that shall have been disclosed by the Borrower
to the Lenders in writing prior to the time that the
Borrower submitted its Competitive Bid Request with
respect to such Competitive Borrowing.
(b) At the time of and immediately after giving
effect to such Borrowing or the issuance, amendment,
renewal or extension of such Letter of Credit, as
applicable, no Default shall have occurred and be
continuing.
Each Borrowing and each issuance, amendment, renewal or
extension of a Letter of Credit shall be deemed to
constitute a representation and warranty by the Borrower on
the date thereof as to the matters specified in paragraphs
(a) and (b) of this Section.
ARTICLE V
Affirmative Covenants
Until the Commitments have expired or been
terminated and the principal of and interest on each Loan
and all fees payable hereunder shall have been paid in full
and all Letters of Credit shall have expired or terminated
and all LC Disbursements shall have been reimbursed, the
Borrower covenants and agrees with the Lenders that:
SECTION 5.01. Financial Statements and Other
Information. The Borrower will furnish to the
Administrative Agent (with sufficient copies for each
Lender):
(a) within 90 days after the end of each fiscal
year of the Borrower, its audited consolidated balance
sheet and related statements of operations,
stockholders' equity and cash flows as of the end of
and for such year, setting forth in each case in
comparative form the figures for the previous fiscal
year, all reported on by KPMG Peat Marwick LLP or other
independent public accountants of recognized national
standing (without a "going concern" or like
qualification or exception and without any
qualification or exception as to the scope of such
audit) to the effect that such consolidated financial
statements present fairly in all material respects the
financial condition and results of operations of the
Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP (identifying
in an explanatory paragraph any material accounting
changes);
(b) within 45 days after the end of each of the
first three fiscal quarters of each fiscal year of the
Borrower, its consolidated balance sheet and related
statements of operations, stockholders' equity and cash
flows as of the end of and for such fiscal quarter and
the then elapsed portion of the fiscal year, setting
forth in each case in comparative form the figures for
the corresponding period or periods of (or, in the case
of the balance sheet, as of the end of) the previous
fiscal year, all certified by one of its Financial
Officers as presenting fairly in all material respects
the financial condition and results of operations of
the Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently
applied, subject to normal year-end audit adjustments
and the absence of footnotes; provided that delivery of
the Borrower's Form 10-Q, containing the information
required to be contained therein pursuant to the rules
and regulations of the Securities and Exchange
Commission, together with the certificate of a
Financial Officer as described above, shall be deemed
to satisfy the requirements of this clause (b);
(c) concurrently with any delivery of financial
statements under clause (a) or (b) above, a certificate
of a Financial Officer of the Borrower (i) certifying
as to whether a Default has occurred and, if a Default
has occurred, specifying the details thereof and any
action taken or proposed to be taken with respect
thereto, (ii) setting forth reasonably detailed
calculations demonstrating compliance with
Sections 6.01, 6.06, 6.11 and 6.12 (including
identification of any Excluded Subsidiaries and
adjustments necessary to reflect their existence) and
(iii) stating whether any material change in GAAP or in
the application thereof has occurred since the date of
the audited financial statements referred to in
Section 3.04 and, if any such change has occurred,
specifying the effect of such change on the financial
statements accompanying such certificate;
(d) concurrently with any delivery of financial
statements under clause (a) above, a certificate of the
accounting firm that reported on such financial
statements stating whether they obtained knowledge
during the course of their examination of such
financial statements of any Default (which certificate
may be limited to the extent required by accounting
rules or guidelines);
(e) promptly after the same become publicly
available, copies of all periodic and other reports,
proxy statements and other materials filed by the
Borrower or any Subsidiary with the Securities and
Exchange Commission, or any Governmental Authority
succeeding to any or all of the functions of said
Commission, or with any national securities exchange,
or distributed by the Borrower to its shareholders
generally, as the case may be; and
(f) promptly following any request therefor, such
other information regarding the operations, business
affairs and financial condition of the Borrower or any
Subsidiary, or compliance with the terms of this
Agreement, as the Administrative Agent or any Lender
may reasonably request.
SECTION 5.02. Notices of Material Events. The
Borrower will furnish to the Administrative Agent written
notice of any of the following promptly after becoming aware
thereof:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit
or proceeding by or before any arbitrator or
Governmental Authority against or affecting the
Borrower or any Affiliate thereof that, if adversely
determined, would reasonably be expected to result in a
Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone
or together with any other ERISA Events that have
occurred, could reasonably be expected to result in
liability of the Borrower and its Subsidiaries in an
aggregate amount exceeding $25,000,000; and
(d) any other development (except any change in
general economic conditions) that results in, or would
reasonably be expected to result in, a Material Adverse
Effect.
Each notice delivered under this Section shall be
accompanied by a statement of a Financial Officer or other
executive officer of the Borrower setting forth the details
of the event or development requiring such notice and any
action taken or proposed to be taken with respect thereto.
SECTION 5.03. Existence; Conduct of Business.
The Borrower will, and will cause each of its Subsidiaries
to, do or cause to be done all things necessary to preserve,
renew and keep in full force and effect its legal existence
and the rights, licenses, permits, privileges and franchises
material to the conduct of the business of the Borrower and
its Subsidiaries on a consolidated basis; provided that the
foregoing shall not prohibit any merger, consolidation,
liquidation, dissolution or sale of assets permitted under
Section 6.03.
SECTION 5.04. Payment of Obligations. The
Borrower will, and will cause each of its Subsidiaries to,
pay its obligations, including Tax liabilities, that, if not
paid, would reasonably be expected to result in a Material
Adverse Effect before the same shall become delinquent or in
default, except where (a) the validity or amount thereof is
being contested in good faith by appropriate proceedings,
(b) the Borrower or such Subsidiary has set aside on its
books adequate reserves with respect thereto in accordance
with GAAP and (c) the failure to make payment pending such
contest would not reasonably be expected to result in a
Material Adverse Effect.
SECTION 5.05. Maintenance of Properties;
Insurance. The Borrower will, and will cause each of its
Subsidiaries to, (a) keep and maintain all property material
to the conduct of their business on a consolidated basis in
good working order and condition, ordinary wear and tear
excepted, and (b) maintain, with financially sound and
reputable insurance companies (or pursuant to self-insurance
arrangements that are consistent with those used by other
companies that are similarly situated), insurance in such
amounts and against such risks as are customarily maintained
by companies engaged in the same or similar businesses
operating in the same or similar locations.
SECTION 5.06. Books and Records; Inspection
Rights. The Borrower will, and will cause each of its
Subsidiaries to, keep proper books of record and account in
which full, true and correct entries are made of all
dealings and transactions in relation to its business and
activities. The Borrower will, and will cause each of its
Subsidiaries to, permit any representatives designated by
the Administrative Agent or any Lender, upon reasonable
prior notice, to visit and inspect its properties, to
examine and make extracts from its books and records, and to
discuss its affairs, finances and condition with its
officers and independent accountants, all at such reasonable
times and as often as reasonably requested.
SECTION 5.07. Compliance with Laws. The Borrower
will, and will cause each of its Subsidiaries to, comply
with all laws, rules, regulations and orders of any
Governmental Authority applicable to it or its property,
except where the failure to do so, individually or in the
aggregate, would not reasonably be expected to result in a
Material Adverse Effect.
SECTION 5.08. Use of Proceeds and Letters of
Credit. The proceeds of all Term Loans, and the proceeds of
the initial $2,500,000,000 of Revolving Loans made on the
Effective Date, will be used to make payments on the
Effective Date to PepsiCo and its subsidiaries not exceeding
$4,500,000,000 as contemplated by the Information Statement
and the Separation Agreement. The proceeds of all other
Loans will be used only for general corporate purposes. No
part of the proceeds of any Loan will be used, whether
directly or indirectly, for any purpose that entails a
violation of any of the Regulations of the Board, including
Regulations G, U and X. Letters of Credit will be issued
only to support obligations of the Borrower and its
Subsidiaries incurred in the ordinary course of business.
SECTION 5.09. Principal Domestic Subsidiaries.
Promptly after any Subsidiary (including any Subsidiary
formed or acquired after the date of execution and delivery
of this Agreement) that is not a Guarantor becomes a
Principal Domestic Subsidiary, the Borrower will cause such
Subsidiary to enter into the Guarantee Agreement and become
a Guarantor as provided in the Guarantee Agreement.
ARTICLE VI
Negative Covenants
Until the Commitments have expired or terminated
and the principal of and interest on each Loan and all fees
payable hereunder have been paid in full and all Letters of
Credit have expired or terminated and all LC Disbursements
shall have been reimbursed, the Borrower covenants and
agrees with the Lenders that:
SECTION 6.01. Subsidiary Indebtedness. The
Borrower will not permit the aggregate principal amount of
Indebtedness of its Domestic Subsidiaries (excluding (a) any
Indebtedness of a Domestic Subsidiary owed to the Borrower
or another Domestic Subsidiary, (b) any Indebtedness of a
Guarantor and (c) Capital Lease Obligations of Domestic
Subsidiaries existing as of the Effective Date in an
aggregate principal amount not exceeding $130,000,000, but
including any Guarantee by a Domestic Subsidiary (other than
a Guarantor) of Indebtedness of any other Person, including
the Borrower, a Guarantor or a Foreign Subsidiary) at any
time to exceed $50,000,000.
SECTION 6.02. Liens. The Borrower will not, and
will not permit any Subsidiary to, create, incur, assume or
permit to exist any Lien on any property or asset now owned
or hereafter acquired by it, or assign or sell any income or
revenues (including accounts receivable) or rights in
respect of any thereof, except:
(a) Permitted Encumbrances;
(b) any Lien on any property or asset of the
Borrower or any Domestic Subsidiary existing on the
date hereof; provided that (i) such Lien shall not
apply to any other property or asset of the Borrower or
any Subsidiary and (ii) such Lien shall secure only
those obligations which it secures on the date hereof
and refinancings, extensions, renewals and replacements
thereof that do not increase the outstanding principal
amount thereof; provided further that any such Lien
securing obligations in excess of $2,000,000 shall not
be permitted under this clause (b) unless such Lien is
set forth in Schedule 6.02;
(c) any Lien existing on any property or asset
prior to the acquisition thereof by the Borrower or any
Subsidiary or existing on any property or asset of any
Person that becomes a Subsidiary after the date hereof
prior to the time such Person becomes a Subsidiary;
provided that (i) such Lien is not created in
contemplation of or in connection with such acquisition
or such Person becoming a Subsidiary, as the case may
be, (ii) such Lien shall not apply to any other
property or assets of the Borrower or any Subsidiary
and (iii) such Lien shall secure only those obligations
which it secures on the date of such acquisition or the
date such Person becomes a Subsidiary, as the case may
be and extensions, renewals and replacements thereof
that do not increase the outstanding principal amount
thereof;
(d) Liens on fixed or capital assets (including
equipment) hereafter acquired, constructed or improved
by the Borrower or any Subsidiary; provided that
(i) such security interests secure Indebtedness
incurred to finance the acquisition, construction or
improvement of such fixed or capital assets, (ii) such
security interests and the Indebtedness secured thereby
are incurred prior to or within 90 days after such
acquisition or the completion of such construction or
improvement, (iii) the Indebtedness secured thereby
does not exceed 90% of the cost of acquiring,
constructing or improving such fixed or capital assets
and (iv) such security interests shall not apply to any
other property or assets of the Borrower or any
Subsidiary;
(e) Liens securing Capital Lease Obligations
arising out of sale-leaseback transactions; provided
that (i) such sale-leaseback transaction is consummated
within 90 days after the purchase by the Borrower or a
Subsidiary of the property or assets which are the
subject of such sale-leaseback transaction and
(ii) such Liens do not at any time encumber any
property or assets other than the property or assets
that are the subject of such sale-leaseback
transaction;
(f) any Lien on any property or asset of any
Subsidiary securing obligations in favor of the
Borrower or any other Subsidiary;
(g) any Lien on any property or asset of any
Foreign Subsidiary securing obligations of such Foreign
Subsidiary; and
(h) Liens arising in the ordinary course of
business of the Borrower and its Subsidiaries and not
otherwise permitted by the foregoing clauses of this
Section securing obligations of the Borrower and its
Subsidiaries in an aggregate principal amount at any
time outstanding not to exceed $50,000,000 (or its
equivalent in any other currency) for all such Liens.
SECTION 6.03. Fundamental Changes. (a) The
Borrower will not, and will not permit any Subsidiary to,
merge into or consolidate with any other Person, or permit
any other Person to merge into or consolidate with it, or
sell, transfer, lease or otherwise dispose of (in one
transaction or in a series of transactions) all or any
substantial part of its assets, or all or substantially all
of the stock of any of its Subsidiaries (in each case,
whether now owned or hereafter acquired), or liquidate or
dissolve, except that, if at the time thereof and
immediately after giving effect thereto no Event of Default
shall have occurred and be continuing and no Default shall
result therefrom (i) any Person may merge into the Borrower
in a transaction in which the Borrower is the surviving
corporation, (ii) any Person may merge into any Subsidiary
in a transaction in which the surviving entity is a
Subsidiary, (iii) any Subsidiary may sell, transfer, lease
or otherwise dispose of all or any substantial part of its
assets to the Borrower or to another Subsidiary or to a
joint venture pursuant to an investment permitted by
Section 6.04, (iv) any Subsidiary may liquidate or dissolve
if the Borrower determines in good faith that such
liquidation or dissolution is in the best interests of the
Borrower and is not materially disadvantageous to the
Lenders, (v) restaurants comprising such assets may be sold
(directly or indirectly) for cash consideration (A) pursuant
to any transaction constituting a Prepayment Event provided
that a prepayment would then or thereafter be required under
Section 2.11(b) as a result of such transaction or (B) in
the case of a sale by a Foreign Subsidiary, pursuant to any
transaction that would constitute a Prepayment Event if such
Foreign Subsidiary were a Domestic Subsidiary (disregarding
the proviso to the definition of "Prepayment Event" for this
purpose), (vi) restaurants comprising such assets may be
sold (directly or indirectly) by the Borrower or any
Domestic Subsidiary provided that any transaction (or series
of related transactions) consummated in reliance upon this
clause (vi) involve the sale (directly or indirectly) of
assets with a fair market value not exceeding $250,000,000,
(vii) a Subsidiary may transfer all or any substantial part
of its assets pursuant to investments in joint ventures
permitted by Section 6.04 and (viii) Subsidiaries may engage
in any of the foregoing transactions to effect the
reformation or restructuring of the form of ownership
thereof in a manner that is not prohibited by any other
Section of this Agreement; provided that any such merger
involving a Person that is not a wholly owned Subsidiary
immediately prior to such merger shall not be permitted
unless also permitted by Section 6.04.
(b) The Borrower will not, and will not permit
any of its Subsidiaries to, engage to any material extent in
any business other than businesses of the type conducted by
the Borrower and its Subsidiaries on the Effective Date
(after giving effect to the Spin-Off Transactions) and
businesses reasonably related thereto; provided that the
foregoing shall not be construed to prohibit the conduct of
businesses that are limited to serving the Borrower and its
Subsidiaries, such as the creation of Subsidiaries to
conduct insurance or inventory purchasing activities for the
Borrower and its Subsidiaries.
SECTION 6.04. Investments, Loans, Advances,
Guarantees and Acquisitions. The Borrower will not, and
will not permit any of its Subsidiaries to, purchase, hold
or acquire (including pursuant to any merger with any Person
that was not a wholly owned Subsidiary prior to such merger)
any capital stock, evidences of indebtedness or other
securities (including any option, warrant or other right to
acquire any of the foregoing) of, make or permit to exist
any loans or advances to, Guarantee any obligations of, or
make or permit to exist any investment or any other interest
in, any other Person, or purchase or otherwise acquire (in
one transaction or a series of transactions) any assets of
any other Person constituting a business unit, except:
(a) Permitted Investments;
(b) investments by the Borrower or any of its
Subsidiaries in the capital stock of their respective
Subsidiaries;
(c) loans or advances made by the Borrower to any
Subsidiary and made by any Subsidiary to the Borrower
or any other Subsidiary and promissory notes issued by
any Subsidiary to the Borrower or any other Subsidiary;
(d) subject to Section 6.01, Guarantees by the
Borrower of Indebtedness of any Subsidiary or by any
Subsidiary of Indebtedness of the Borrower or any other
Subsidiary;
(e) Guarantees made by the Borrower and the
Subsidiaries of lease payments related to sales of
restaurants by the Borrower and the Subsidiaries;
(f) investments by Subsidiaries in, and Guarantees
by Subsidiaries of Indebtedness of, joint ventures that
are formed to engage in businesses that the Borrower
and its Subsidiaries would be permitted to engage in;
(g) debt securities, promissory notes and similar
instruments received as non-cash consideration in
connection with sales or dispositions of assets;
(h) investments received as a result of the
compromise of claims against delinquent account debtors
in the ordinary course of business or the bankruptcy or
reorganization of such account debtors;
(i) Guarantees made by the Borrower and the
Subsidiaries of obligations of franchisees and other
third parties (other than the Borrower, the
Subsidiaries and any joint ventures of the Borrower and
the Subsidiaries) incurred in the ordinary course of
business; and
(j) investments not otherwise permitted by the
foregoing clauses of this Section in an aggregate
amount at any time outstanding not to exceed
$50,000,000;
provided that the sum of (i) all investments by the Borrower
and its Domestic Subsidiaries in the capital stock of
Foreign Subsidiaries (whether existing on the Effective Date
or made thereafter), plus (ii) all loans and advances made
by the Borrower and its Domestic Subsidiaries to Foreign
Subsidiaries (whether existing on the Effective Date or made
thereafter), plus (iii) all investments made by the Borrower
and its Domestic Subsidiaries in joint ventures (whether
existing on the Effective Date or made thereafter), plus
(iv) the principal amount of all Indebtedness of joint
ventures Guaranteed by the Borrower or any of its Domestic
Subsidiaries (whether existing on the Effective Date or
incurred thereafter), plus (v) the principal amount of all
Indebtedness of Foreign Subsidiaries Guaranteed by the
Borrower or any of its Domestic Subsidiaries (whether
existing on the Effective Date or incurred thereafter) shall
not at any time exceed the Foreign Exposure Limit at such
time; provided further that the amounts set forth in the
foregoing clauses (iv) and (v) shall be determined by
reference to the foreign currency exchange rate with respect
to the applicable currencies on the date of such
determination available on Bloomberg Daily Market Summary at
the close of business on such date of determination or, if
not so available, shall be reasonably determined by the
Borrower by reference to information then available to it.
SECTION 6.05. Hedging Agreements. The Borrower
will not, and will not permit any of its Subsidiaries to,
enter into any Hedging Agreement or commodity price
protection agreement or other commodity price hedging
arrangement, other than Hedging Agreements, commodity price
protection agreements and other commodity price hedging
arrangements entered into in the ordinary course of business
to hedge or mitigate risks to which the Borrower or any
Subsidiary is exposed in the conduct of its business or the
management of its liabilities.
SECTION 6.06. Restricted Payments. The Borrower
will not, and will not permit any of its Subsidiaries to,
declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment, except (a) the Borrower
may make the payments to PepsiCo and its subsidiaries on the
Effective Date (or following the Effective Date in respect
of post-closing adjustments in connection with the Spin-Off
Transactions) contemplated by the Information Statement and
the Separation Agreement, (b) the Borrower may declare and
pay dividends with respect to its capital stock payable
solely in additional shares of its common stock, (c)
Subsidiaries may make Restricted Payments to the Borrower or
a wholly owned Subsidiary and may make other Restricted
Payments that are made ratably to the holders of their
capital stock, (d) the Borrower may make Restricted Payments
pursuant to and in accordance with stock option plans or
other benefit plans for management or employees of the
Borrower and its Subsidiaries and (e) the Borrower may
declare and make Restricted Payments in any fiscal year that
do not exceed 50% of Consolidated Net Income for such fiscal
year; provided that the Borrower may, on a one time basis,
declare and pay dividends in an aggregate amount not
exceeding $50,000,000 in any one twelve month period
following the Effective Date even if such dividends exceed
50% of Consolidated Net Income for the fiscal year during
which such dividends are paid; provided further that in no
event shall the aggregate amount of Restricted Payments made
on and after the Effective Date pursuant to clause (e) above
and the foregoing proviso exceed 50% of the cumulative
Consolidated Net Income since the Effective Date.
SECTION 6.07. Transactions with Affiliates. The
Borrower will not, and will not permit any of its
Subsidiaries to, sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise
acquire any property or assets from, or otherwise engage in
any other transactions with, any of its then Affiliates,
except (a) consummation of the Spin-Off Transactions as
contemplated by the Information Statement and the Separation
Agreement, (b) in the ordinary course of business at prices
and on terms and conditions not less favorable to the
Borrower or such Subsidiary than could be obtained on an
arm's-length basis from unrelated third parties (including
pursuant to joint venture agreements entered into after the
Effective Date with third parties that are not Affiliates),
(c) transactions between or among the Borrower and its
wholly owned Subsidiaries or between or among wholly owned
Subsidiaries, in each case not involving any other
Affiliate, provided that any transaction between the
Borrower or any Domestic Subsidiary, on the one hand, and
any Foreign Subsidiary, on the other hand, shall be treated
as an investment in such Foreign Subsidiary for purposes of
Section 6.04 to the extent that such transaction involves
the transfer to such Foreign Subsidiary of any material
assets for consideration materially less than the
consideration that could have been received were such assets
sold to an unrelated third party in an arm's length
transaction, (d) any Restricted Payment permitted by Section
6.06 and (e) the foregoing shall not prevent the Borrower or
any Subsidiary from performing its obligations under
agreements existing on the date hereof between the Borrower
or any of its Subsidiaries and any joint venture of the
Borrower or any of its Subsidiaries in accordance with the
terms of such agreements as in effect on the date hereof or
pursuant to amendments or modifications to any such
agreements that are not adverse to the interests of the
Lenders.
SECTION 6.08. Restrictive Agreements. The
Borrower will not, and will not permit any of its
Subsidiaries to, directly or indirectly, enter into, incur
or permit to exist any agreement or other consensual
arrangement that prohibits, restricts or imposes any
condition upon (a) the ability of the Borrower or any
Subsidiary to create, incur or permit to exist any Lien upon
any of its property or assets, or (b) the ability of any
Subsidiary to pay dividends or other distributions with
respect to any shares of its capital stock or to make or
repay loans or advances to the Borrower or any other
Subsidiary or to Guarantee Indebtedness of the Borrower or
any other Subsidiary; provided that (i) the foregoing shall
not apply to restrictions and conditions imposed by law or
by this Agreement or the Tax Separation Agreement, (ii) the
foregoing shall not apply to restrictions and conditions
existing on the date hereof and either identified on
Schedule 6.08 or affecting only Foreign Subsidiaries or any
extensions or renewals of any such restrictions and
conditions that do not expand the scope thereof (but shall
apply to any extension or renewal of, or any amendment or
modification of, any such restriction or condition that
expands the scope of such restriction or condition), (iii)
the foregoing shall not apply to customary restrictions and
conditions contained in agreements relating to the sale of a
Subsidiary pending such sale, provided such restrictions and
conditions apply only to the Subsidiary that is to be sold
and such sale is permitted hereunder, (iv) clause (a) of the
foregoing shall not apply to restrictions or conditions
imposed by any agreement relating to secured Indebtedness
permitted by this Agreement if such restrictions or
conditions apply only to the property or assets securing
such Indebtedness, (v) clause (a) of the foregoing shall not
apply to customary provisions in leases and other contracts
restricting the assignment thereof, (vi) clause (b) of the
foregoing shall not apply to financial covenants applicable
to a Subsidiary contained in an agreement relating to
permitted Indebtedness of such Subsidiary if, on the date
such agreement is entered into, the Borrower reasonably
believes that such covenants will not prevent such
Subsidiary from paying dividends to the extent of its net
income and (vii) the foregoing shall not apply to
restrictions and conditions imposed by any agreement
relating to Permitted Obligations that consist of
requirements that Liens securing Indebtedness must equally
and ratably secure such Permitted Obligations or
restrictions substantially the same as (or less restrictive
than) those imposed by this Section.
SECTION 6.09. Issuances of Capital Stock by
Subsidiaries. The Borrower will not permit any Subsidiary
to issue any additional shares of its capital stock or other
ownership interest in such Subsidiary other than (a) to the
Borrower, (b) to another Subsidiary in which the Borrower
owns, directly or indirectly, a percentage interest not less
than the percentage interest owned in the Subsidiary issuing
such capital stock or other interest, (c) any such issuance
that is treated as a Prepayment Event for purposes of
Section 2.11(b) (or, in the case of any such issuance by a
Foreign Subsidiary, any such issuance that would be treated
as a Prepayment Event if such Foreign Subsidiary were a
Domestic Subsidiary), (d) any such issuance that does not
change the Borrower's direct or indirect percentage
ownership interest in such Subsidiary or (e) any such
issuance that is permitted pursuant to Section 6.03 or 6.04.
SECTION 6.10. Spin-Off Transactions. The
Borrower shall not make or agree to make any material change
in the terms of the Spin-Off Transactions from those set
forth in the Spin-Off Documents (as in effect on the
Effective Date) that materially adversely affects the rights
or interests of the Lenders or the creditworthiness of the
Borrower.
SECTION 6.11. Leverage Ratio. The Borrower will
not permit the Leverage Ratio as of any date during any
period set forth below (inclusive of the specified first and
last day of such period) to be in excess of the ratio set
forth below opposite such period:
Period Ratio
Effective Date-December 27, 1997 4.25 to 1.00
December 28, 1997-December 26, 1998 4.00 to 1.00
December 27, 1998-December 25, 1999 3.50 to 1.00
December 26, 1999-December 30, 2000 3.25 to 1.00
after December 30, 2000 3.00 to 1.00
SECTION 6.12. Fixed Charge Coverage Ratio. The
Borrower will not permit the Fixed Charge Coverage Ratio for
any period of four consecutive fiscal quarters ending during
any period set forth below (inclusive of the specified first
and last day of such period) to be less than the ratio set
forth below opposite such period:
Period Ratio
Effective Date-December 25, 1999 1.25 to 1.00
December 26, 1999-December 30, 2000 1.35 to 1.00
after December 30, 2000 1.50 to 1.00
ARTICLE VII
Events of Default
SECTION 7.01. Events of Default. If any of the
following events ("Events of Default") shall occur:
(a) the Borrower shall fail to pay any principal
of any Loan (other than a mandatory prepayment required
by Section 2.11(b)) or any reimbursement obligation in
respect of any LC Disbursement when and as the same
shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or
otherwise;
(b) the Borrower shall fail to pay any mandatory
prepayment of any Loan required by Section 2.11(b) or
any interest on any Loan or any fee or any other amount
(other than an amount referred to in clause (a) of this
Article) payable under this Agreement, when and as the
same shall become due and payable, and such failure
shall continue unremedied for a period of five days;
(c) any representation or warranty made or deemed
made by or on behalf of the Borrower or any Subsidiary
in or in connection with this Agreement or any
amendment or modification hereof or waiver hereunder,
or in any report, certificate, financial statement or
other document furnished pursuant to or in connection
with this Agreement or any amendment or modification
hereof or waiver hereunder, shall prove to have been
incorrect in any material respect when made or deemed
made;
(d) the Borrower shall fail to observe or perform
any covenant, condition or agreement contained in
Section 5.02, 5.03 (with respect to the Borrower's
existence) or 5.08 or in Article VI;
(e) the Borrower shall fail to observe or perform
any covenant, condition or agreement contained in this
Agreement (other than those specified in clause (a),
(b) or (d) of this Article), and such failure shall
continue unremedied for a period of 30 days after
notice thereof from the Administrative Agent to the
Borrower (which notice will be given at the request of
any Lender);
(f) the Borrower or any Subsidiary shall fail to
make any payment (whether of principal or interest and
regardless of amount) in respect of any Material
Indebtedness, when and as the same shall become due and
payable;
(g) any event or condition occurs that results in
any Material Indebtedness becoming due prior to its
scheduled maturity; provided that this clause (g) shall
not apply to Indebtedness that becomes due as a result
of the voluntary sale or transfer of property or assets
by the Borrower or a Subsidiary;
(h) any event or condition occurs that enables or
permits the holder or holders of any Material
Indebtedness or any trustee or agent on its or their
behalf to cause any Material Indebtedness to become
due, or to require the prepayment, repurchase,
redemption or defeasance thereof, prior to its
scheduled maturity; provided that this clause (h) shall
not apply (i) at any time when the Index Debt is rated
at least BBB by S&P and Baa2 by Moody's or (ii) to
secured Indebtedness that becomes due as a result of
the voluntary sale or transfer of the property or
assets securing such Indebtedness;
(i) subject to Section 7.02, an involuntary
proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation,
reorganization or other relief in respect of the
Borrower or any Subsidiary or its debts, or of a
substantial part of its assets, under any Federal,
state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, seques
trator, conservator or similar official for the
Borrower or any Subsidiary or for a substantial part of
its assets, and, in any such case, such proceeding or
petition shall continue undismissed for 60 days or an
order or decree approving or ordering any of the
foregoing shall be entered;
(j) subject to Section 7.02, the Borrower or any
Subsidiary shall (i) voluntarily commence any
proceeding or file any petition seeking liquidation,
reorganization or other relief under any Federal, state
or foreign bankruptcy, insolvency, receivership or
similar law now or hereafter in effect, (ii) consent to
the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or petition
described in clause (h) of this Article, (iii) apply
for or consent to the appointment of a receiver,
trustee, custodian, sequestrator, conservator or
similar official for the Borrower or any Subsidiary or
for a substantial part of its assets, (iv) file an
answer admitting the material allegations of a petition
filed against it in any such proceeding, (v) make a
general assignment for the benefit of creditors or
(vi) take any action for the purpose of effecting any
of the foregoing;
(k) subject to Section 7.02, the Borrower or any
Subsidiary shall become unable, admit in writing its
inability or fail generally to pay its debts as they
become due;
(l) subject to Section 7.02, one or more judgments
for the payment of money in an aggregate amount in
excess of $25,000,000 shall be rendered against the
Borrower, any Subsidiary or any combination thereof and
the same shall remain undischarged for a period of
30 consecutive days during which execution shall not be
effectively stayed, or any action shall be legally
taken by a judgment creditor to attach or levy upon any
assets of the Borrower or any Subsidiary to enforce any
such judgment;
(m) an ERISA Event shall have occurred that, when
taken together with all other ERISA Events that have
occurred, would reasonably be expected to result in a
Material Adverse Effect; or
(n) a Change in Control shall occur;
then, and in every such event (other than an event with
respect to the Borrower described in clause (i) or (j) of
this Article), and at any time thereafter during the
continuance of such event, the Administrative Agent may, and
at the request of the Required Lenders shall, by notice to
the Borrower, take any or all of the following actions, at
the same or different times: (i) terminate the Commitments,
and thereupon the Commitments shall terminate immediately,
(ii) declare the Loans then outstanding to be due and
payable in whole (or in part, in which case any principal
not so declared to be due and payable may thereafter be
declared to be due and payable), and thereupon the principal
of the Loans so declared to be due and payable, together
with accrued interest thereon and all fees and other
obligations of the Borrower accrued hereunder, shall become
due and payable immediately, without presentment, demand,
protest or other notice of any kind, all of which are hereby
waived by the Borrower, and (iii) enforce its rights under
the Guarantee Agreement on behalf of the Lenders and the
Issuing Bank; and in case of any event with respect to the
Borrower described in clause (i) or (j) of this Article, the
Commitments shall automatically terminate and the principal
of the Loans then outstanding, together with accrued
interest thereon and all fees and other obligations of the
Borrower accrued hereunder, shall automatically become due
and payable, without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the
Borrower.
SECTION 7.02. Exclusion of Immaterial
Subsidiaries. Solely for purposes of determining whether a
Default has occurred under clause (i), (j), (k) or (l) of
Section 7.01, any reference in any such clause to any
"Subsidiary" shall be deemed not to include any Subsidiary
affected by any event or circumstance referred to in any
such clause that (a) is not a Principal Domestic Subsidiary,
(b) does not have consolidated assets accounting for more
than 3% of the consolidated assets of the Borrower and its
Subsidiaries, (c) did not, for the most recent period of
four consecutive fiscal quarters, have consolidated revenues
accounting for more than 3% of the consolidated revenues of
the Borrower and its Subsidiaries and (d) did not, for the
most recent period of four consecutive fiscal quarters, have
Consolidated EBITDAR in an amount exceeding 3% of the
Borrower's Consolidated EBITDAR for such period; provided
that if it is necessary to exclude more than one Subsidiary
from clause (i), (j), (k) and (l) of Section 7.01 pursuant
to this Section in order to avoid a Default thereunder, all
excluded Subsidiaries shall be considered to be a single
consolidated Subsidiary for purposes of determining whether
the conditions specified in clauses (b), (c) and (d) above
are satisfied.
ARTICLE VIII
The Administrative Agent
Each of the Lenders and the Issuing Bank hereby
irrevocably appoints the Administrative Agent as its agent
and authorizes the Administrative Agent to take such actions
on its behalf and to exercise such powers as are delegated
to the Administrative Agent by the terms of the Loan
Documents, together with such actions and powers as are
reasonably incidental thereto.
The bank serving as the Administrative Agent
hereunder shall have the same rights and powers in its
capacity as a Lender as any other Lender and may exercise
the same as though it were not the Administrative Agent, and
such bank and its Affiliates may accept deposits from, lend
money to and generally engage in any kind of business with
the Borrower or any Subsidiary or other Affiliate thereof as
if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties
or obligations except those expressly set forth in the Loan
Documents. Without limiting the generality of the
foregoing, (a) the Administrative Agent shall not be subject
to any fiduciary or other implied duties, regardless of
whether a Default has occurred and is continuing, (b) the
Administrative Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers,
except discretionary rights and powers expressly
contemplated by the Loan Documents that the Administrative
Agent is required to exercise in writing by the Required
Lenders (or such other number or percentage of the Lenders
as shall be necessary under the circumstances as provided in
Section 9.02), and (c) except as expressly set forth in the
Loan Documents, the Administrative Agent shall not have any
duty to disclose, and shall not be liable for the failure to
disclose, any information relating to the Borrower or any of
its Subsidiaries that is communicated to or obtained by the
bank serving as Administrative Agent or any of its
Affiliates in any capacity. The Administrative Agent shall
not be liable for any action taken or not taken by it with
the consent or at the request of the Required Lenders (or
such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in
Section 9.02) or in the absence of its own gross negligence
or wilful misconduct. The Administrative Agent shall be
deemed not to have knowledge of any Default unless and until
written notice thereof is given to the Administrative Agent
by the Borrower or a Lender, and the Administrative Agent
shall not be responsible for or have any duty to ascertain
or inquire into (i) any statement, warranty or
representation made in or in connection with any Loan
Document, (ii) the contents of any certificate, report or
other document delivered thereunder or in connection
therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth
in any Loan Document, (iv) the validity, enforceability,
effectiveness or genuineness of any Loan Document or any
other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article IV or
elsewhere in any Loan Document, other than to confirm
receipt of items expressly required to be delivered to the
Administrative Agent.
The Administrative Agent shall be entitled to rely
upon, and shall not incur any liability for relying upon,
any notice, request, certificate, consent, statement,
instrument, document or other writing believed by it to be
genuine and to have been signed or sent by the proper
Person. The Administrative Agent also may rely upon any
statement made to it orally or by telephone and believed by
it to be made by the proper Person, and shall not incur any
liability for relying thereon. The Administrative Agent may
consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken
or not taken by it in accordance with the advice of any such
counsel, accountants or experts.
The Administrative Agent may perform any and all
its duties and exercise its rights and powers by or through
any one or more sub-agents appointed by the Administrative
Agent. The Administrative Agent and any such sub-agent may
perform any and all its duties and exercise its rights and
powers through their respective Related Parties. The
exculpatory provisions of the preceding paragraphs shall
apply to any such sub-agent and to the Related Parties of
the Administrative Agent and any such sub-agent, and shall
apply to their respective activities in connection with the
syndication of the credit facilities provided for herein as
well as activities as Administrative Agent.
Subject to the appointment and acceptance of a
successor Administrative Agent as provided in this
paragraph, the Administrative Agent may resign at any time
by notifying the Lenders, the Issuing Bank and the Borrower.
Upon any such resignation, the Required Lenders shall have
the right, with the consent of the Borrower (which consent
shall not be unreasonably withheld, and shall not be
required so long as any Event of Default set forth in
clause (i) or (j) of Section 7.01 has occurred and is
continuing), to appoint a successor. If no successor shall
have been so appointed by the Required Lenders and shall
have accepted such appointment within 30 days after the
retiring Administrative Agent gives notice of its
resignation, then the retiring Administrative Agent may, on
behalf of the Lenders and the Issuing Bank, appoint a
successor Administrative Agent which shall be a bank with an
office in New York, New York, or an Affiliate of any such
bank. Upon the acceptance of its appointment as
Administrative Agent hereunder by a successor, such
successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent
shall be discharged from its duties and obligations
hereunder. The fees payable by the Borrower to a successor
Administrative Agent shall be the same as those payable to
its predecessor unless otherwise agreed between the Borrower
and such successor. After the Administrative Agent's
resignation hereunder, the provisions of this Article and
Section 9.03 shall continue in effect for the benefit of
such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken
or omitted to be taken by any of them while it was acting as
Administrative Agent.
Each Lender acknowledges that it has,
independently and without reliance upon the Administrative
Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement.
Each Lender also acknowledges that it will, independently
and without reliance upon the Administrative Agent or any
other Lender and based on such documents and information as
it shall from time to time deem appropriate, continue to
make its own decisions in taking or not taking action under
or based upon this Agreement, any other Loan Document or
related agreement or any document furnished hereunder or
thereunder.
Each party hereto agrees and acknowledges that the
Syndication Agents and the Arrangers do not have any duties
or responsibilities in their capacities as Syndication
Agents and Arrangers, respectively, hereunder and shall not
have, or become subject to, any liability hereunder in such
capacities.
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices. Except in the case of
notices and other communications expressly permitted to be
given by telephone, all notices and other communications
provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by
certified or registered mail or sent by telecopy, as
follows:
(a) if to the Borrower, to it at TRICON Global
Restaurants, Inc., P.O. Box 32070, Louisville, KY 40232
(or, in the case of overnight packages, 1900 Colonel
Sanders Lane, Louisville, KY 40213-1964), Attention of
Sandra S. Wijnberg, Senior Vice President and
Treasurer (Telecopy No. (502) 454-2410);
(b) if to the Administrative Agent, to The Chase
Manhattan Bank, Loan and Agency Services Group, One
Chase Manhattan Plaza, 8th Floor, New York, New York
10081, Attention of Sandra Miklave (Telecopy No. (212)
552-5658), with a copy to The Chase Manhattan Bank,
270 Park Avenue, New York, New York 10017, Attention of
Karen May Sharf (Telecopy No. (212) 270-5120);
(c) if to the Issuing Bank, to it at Chase
Manhattan Bank Delaware, Corporate Banking Department,
9th Floor, 1201 Market Street, Wilmington, DE 19801,
Attention of Michael Handago (Telecopy No. (302) 428-
3390);
(d) if to the Swingline Lender, to it at The Chase
Manhattan Bank, Loan and Agency Services Group, One
Chase Manhattan Plaza, 8th Floor, New York, New York
10081, Attention of Sandra Miklave (Telecopy No.
(212) 552-5658); and
(e) if to any other Lender, to it at its address
(or telecopy number) set forth in its Administrative
Questionnaire.
Any party hereto may change its address or telecopy number
for notices and other communications hereunder by notice to
the other parties hereto. All notices and other
communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have
been given on the date of receipt.
SECTION 9.02. Waivers; Amendments. (a) No
failure or delay by the Administrative Agent, the Issuing
Bank or any Lender in exercising any right or power
hereunder or under any other Loan Document shall operate as
a waiver thereof, nor shall any single or partial exercise
of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and
remedies of the Administrative Agent, the Issuing Bank and
the Lenders hereunder and under the other Loan Documents are
cumulative and are not exclusive of any rights or remedies
that they would otherwise have. No waiver of any provision
of any Loan Document or consent to any departure by any Loan
Party therefrom shall in any event be effective unless the
same shall be permitted by paragraph (b) of this Section,
and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making
of a Loan or issuance of a Letter of Credit shall not be
construed as a waiver of any Default, regardless of whether
the Administrative Agent, any Lender or the Issuing Bank may
have had notice or knowledge of such Default at the time.
(b) Neither this Agreement nor any other Loan
Document nor any provision hereof or thereof may be waived,
amended or modified except, in the case of this Agreement,
pursuant to an agreement or agreements in writing entered
into by the Borrower and the Required Lenders or, in the
case of any other Loan Document, pursuant to an agreement or
agreements in writing entered into by the Administrative
Agent and the Loan Party or Loan Parties that are parties
thereto, in each case with the consent of the Required
Lenders; provided that no such agreement shall (i) increase
the Commitment of any Lender without the written consent of
such Lender, (ii) reduce the principal amount of any Loan or
LC Disbursement or reduce the rate of interest thereon, or
reduce any fees payable hereunder, without the written
consent of each Lender affected thereby, (iii) postpone the
scheduled date of payment of the principal amount of any
Loan or LC Disbursement, or any interest thereon, or any
fees payable hereunder, or reduce the amount of, waive or
excuse any such payment, or postpone the scheduled date of
expiration of any Commitment, without the written consent of
each Lender affected thereby, (iv) release any Principal
Domestic Subsidiary from its Guarantee under the Guarantee
Agreement (except as expressly provided in the Guarantee
Agreement), or limit its liability in respect of such
Guarantee or its obligation to enter into, and provide a
Guarantee pursuant to, the Guarantee Agreement, without the
written consent of each Lender, (v) change Section 2.18(b)
or (c) in a manner that would alter the pro rata sharing of
payments required thereby, without the written consent of
each Lender, (vi) change any of the provisions of this
Section or the definition of "Required Lenders" or any other
provision of any Loan Document specifying the number or
percentage of Lenders (or Lenders of any Class) required to
waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder, without the
written consent of each Lender (or each Lender of such
Class, as the case may be) or (vii) change any provisions of
any Loan Documents in a manner that by its terms adversely
affects the rights in respect of payments due to Lenders
holding Loans of any Class differently than those holding
Loans of any other Class, without the written consent of
Lenders holding a majority in interest of the outstanding
Loans and unused Commitments of each affected Class;
provided further that no such agreement shall change
Section 2.11(b) or (c) in a manner that would alter the
Borrower's obligation to prepay Term Borrowings or Revolving
Borrowings or the reduction of Revolving Commitments
required thereby without the written consent of Lenders
holding not less than 66.67% of the outstanding Loans and
unused Commitments of each affected Class; provided further
that no such agreement shall amend, modify or otherwise
affect the rights or duties of the Administrative Agent, the
Issuing Bank or the Swingline Lender hereunder without the
prior written consent of the Administrative Agent, the
Issuing Bank or the Swingline Lender, as the case may be.
SECTION 9.03. Expenses; Indemnity; Damage Waiver.
(a) The Borrower shall pay (i) all reasonable out-of-pocket
expenses incurred by the Administrative Agent, the Arrangers
and their respective Affiliates, including the reasonable
fees, charges and disbursements of Cravath, Swaine & Moore,
primary counsel for the Administrative Agent and the
Arrangers, in connection with the syndication of the credit
facilities provided for herein, the preparation and
administration of the Loan Documents or any amendments,
modifications or waivers of the provisions thereof (whether
or not the transactions contemplated hereby or thereby shall
be consummated), (ii) all reasonable out-of-pocket expenses
incurred by the Issuing Bank in connection with the
issuance, amendment, renewal or extension of any Letter of
Credit or any demand for payment thereunder and (iii) all
out-of-pocket expenses incurred by the Administrative Agent,
the Issuing Bank or any Lender, including the fees, charges
and disbursements of any counsel for the Administrative
Agent, the Issuing Bank or any Lender, in connection with
the enforcement or protection of its rights in connection
with the Loan Documents, including its rights under this
Section, or in connection with the Loans made or Letters of
Credit issued hereunder, including all such out-of-pocket
expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit.
(b) The Borrower shall indemnify the
Administrative Agent, the Issuing Bank and each Lender, and
each Related Party of any of the foregoing Persons (each
such Person being called an "Indemnitee") against, and hold
each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including the
fees, charges and disbursements of any counsel for any
Indemnitee, incurred by or asserted against any Indemnitee
arising out of, in connection with, or as a result of
(i) the execution or delivery of any Loan Document or any
other agreement or instrument contemplated hereby, the
performance by the parties to the Loan Documents of their
respective obligations thereunder or the consummation of the
Transactions or any other transactions contemplated hereby,
(ii) any Loan or Letter of Credit or the use of the proceeds
therefrom (including any refusal by the Issuing Bank to
honor a demand for payment under a Letter of Credit if the
documents presented in connection with such demand do not
strictly comply with the terms of such Letter of Credit),
(iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by the
Borrower or any of its Subsidiaries, or any Environmental
Liability related in any way to the Borrower or any of its
Subsidiaries, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other
theory and regardless of whether any Indemnitee is a party
thereto; provided that such indemnity shall not, as to any
Indemnitee, be available (i) to the extent that such losses,
claims, damages, liabilities or related expenses are deter
mined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross
negligence or wilful misconduct of such Indemnitee or
(ii) with respect to any amounts paid pursuant to any
settlement made by such Indemnitee without the consent of
the Borrower, which consent shall not be unreasonably
withheld.
(c) To the extent that the Borrower fails to pay
any amount required to be paid by it to the Administrative
Agent, the Issuing Bank or the Swingline Lender under
paragraph (a) or (b) of this Section, each Lender severally
agrees to pay to the Administrative Agent, the Issuing Bank
or the Swingline Lender, as the case may be, such Lender's
pro rata share (determined as of the time that the
applicable unreimbursed expense or indemnity payment is
sought) of such unpaid amount; provided that the
unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was
incurred by or asserted against the Administrative Agent,
the Issuing Bank or the Swingline Lender in its capacity as
such. For purposes hereof, a Lender's "pro rata share"
shall be determined based upon its share of the sum of the
total Revolving Credit Exposures, outstanding Term Loans and
unused Commitments at the time.
(d) To the extent permitted by applicable law,
the Borrower shall not assert, and hereby waives, any claim
against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as
opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement or any
agreement or instrument contemplated hereby, the
Transactions, any Loan or Letter of Credit or the use of the
proceeds thereof.
(e) All amounts due under this Section shall be
payable promptly after written demand therefor.
SECTION 9.04. Successors and Assigns. (a) The
provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective
successors and assigns permitted hereby (including any
Affiliate of the Issuing Bank that issues any Letter of
Credit), except that the Borrower may not assign or
otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender
(and any attempted assignment or transfer by the Borrower
without such consent shall be null and void). Nothing in
this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby
(including any Affiliate of the Issuing Bank that issues any
Letter of Credit) and, to the extent expressly contemplated
hereby, the Related Parties of each of the Administrative
Agent, the Issuing Bank and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this
Agreement.
(b) Any Lender may assign to one or more
assignees all or a portion of its rights and obligations
under this Agreement (including all or a portion of its
Commitment and the Loans at the time owing to it); provided
that (i) except in the case of an assignment to a Lender or
an Affiliate of a Lender, each of the Borrower and the
Administrative Agent (and, in the case of an assignment of
all or a portion of a Revolving Commitment or any Lender's
obligations in respect of its LC Exposure or Swingline
Exposure, the Issuing Bank and the Swingline Lender) must
give their prior written consent to such assignment (which
consent shall not be unreasonably withheld, it being
understood that it shall be reasonable for the Borrower to
withhold its consent to any assignment to any direct
competitor of the Borrower or an Affiliate of any such
competitor), (ii) except in the case of an assignment to a
Lender or an Affiliate of a Lender or an assignment of the
entire remaining amount of the assigning Lender's Commitment
or Loans, the amount of the Commitment or Loans of the
assigning Lender subject to each such assignment (determined
as of the date the Assignment and Acceptance with respect to
such assignment is delivered to the Administrative Agent)
shall not be less than $10,000,000 unless each of the
Borrower and the Administrative Agent otherwise consent,
(iii) each partial assignment shall be made as an assignment
of a proportionate part of all the assigning Lender's rights
and obligations under this Agreement, except that this
clause (iii) shall not (A) apply to rights in respect of
outstanding Competitive Loans or (B) be construed to
prohibit the assignment of a proportionate part of all the
assigning Lender's rights and obligations in respect of one
Class of Commitments or Loans, (iv) the parties to each
assignment shall execute and deliver to the Administrative
Agent an Assignment and Acceptance, together with a
processing and recordation fee of $3,500, and (v) the
assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire; and
provided further that any consent of the Borrower otherwise
required under this paragraph shall not be required if an
Event of Default under clause (i) or (j) of Section 7.01 has
occurred and is continuing. Subject to acceptance and
recording thereof pursuant to paragraph (d) of this Section,
from and after the effective date specified in each
Assignment and Acceptance the assignee thereunder shall be a
party hereto and, to the extent of the interest assigned by
such Assignment and Acceptance, have the rights and
obligations of a Lender under this Agreement, and the
assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all of the
assigning Lender's rights and obligations under this
Agreement, such Lender shall cease to be a party hereto but
shall continue to be entitled to the benefits of
Sections 2.15, 2.16, 2.17 and 9.03). Any assignment or
transfer by a Lender of rights or obligations under this
Agreement that does not comply with this paragraph shall be
treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in
accordance with paragraph (e) of this Section.
(c) The Administrative Agent, acting for this
purpose as an agent of the Borrower, shall maintain at one
of its offices in The City of New York a copy of each
Assignment and Acceptance delivered to it and a register for
the recordation of the names and addresses of the Lenders,
and the Commitment of, and principal amount of the Loans and
LC Disbursements owing to, each Lender pursuant to the terms
hereof from time to time (the "Register"). The entries in
the Register shall be conclusive, and the Borrower, the
Administrative Agent, the Issuing Bank and the Lenders may
treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all
purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by
the Borrower, the Issuing Bank and any Lender, at any
reasonable time and from time to time upon reasonable prior
notice.
(d) Upon its receipt of a duly completed
Assignment and Acceptance executed by an assigning Lender
and an assignee, the assignee's completed Administrative
Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to
in paragraph (b) of this Section and any written consent to
such assignment required by paragraph (b) of this Section,
the Administrative Agent shall accept such Assignment and
Acceptance and record the information contained therein in
the Register. No assignment shall be effective for purposes
of this Agreement unless it has been recorded in the
Register as provided in this paragraph.
(e) Any Lender may, without the consent of the
Borrower, the Administrative Agent, the Issuing Bank or the
Swingline Lender, sell participations to one or more banks
or other entities (a "Participant") in all or a portion of
such Lender's rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans
owing to it); provided that (i) such Lender's obligations
under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the
Borrower, the Administrative Agent, the Issuing Bank and the
other Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and
obligations under this Agreement. Any agreement or
instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain
the sole right to enforce the Loan Documents and to approve
any amendment, modification or waiver of any provision of
the Loan Documents; provided that such agreement or
instrument may provide that such Lender will not, without
the consent of the Participant, agree to any amendment,
modification or waiver described in the first proviso to
Section 9.02(b) that affects such Participant. Subject to
paragraph (f) of this Section, the Borrower agrees that each
Participant shall be entitled to the benefits of Sections
2.15, 2.16 and 2.17 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant
to paragraph (b) of this Section. To the extent permitted
by law, each Participant also shall be entitled to the
benefits of Section 9.08 as though it were a Lender,
provided such Participant agrees to be subject to Section
2.18(c) as though it were a Lender.
(f) A Participant shall not be entitled to
receive any greater payment under Section 2.15 or 2.17 than
the applicable Lender would have been entitled to receive
with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is
made with the Borrower's prior written consent. A
Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 2.17
unless the Borrower is notified of the participation sold to
such Participant and such Participant agrees, for the
benefit of the Borrower, to comply with Section 2.17(e) as
though it were a Lender.
(g) Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under
this Agreement to secure obligations of such Lender,
including any pledge or assignment to secure obligations to
a Federal Reserve Bank, and this Section shall not apply to
any such pledge or assignment of a security interest;
provided that no such pledge or assignment of a security
interest shall release a Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for
such Lender as a party hereto.
SECTION 9.05. Survival. All covenants,
agreements, representations and warranties made by the Loan
Parties in the Loan Documents and in the certificates or
other instruments delivered in connection with or pursuant
to this Agreement or any other Loan Document shall be
considered to have been relied upon by the other parties
hereto and shall survive the execution and delivery of the
Loan Documents and the making of any Loans and issuance of
any Letters of Credit, regardless of any investigation made
by any such other party or on its behalf and notwithstanding
that the Administrative Agent, the Issuing Bank or any
Lender may have had notice or knowledge of any Default or
incorrect representation or warranty at the time any credit
is extended hereunder, and shall continue in full force and
effect as long as the principal of or any accrued interest
on any Loan or any fee or any other amount payable under
this Agreement is outstanding and unpaid or any Letter of
Credit is outstanding and so long as the Commitments have
not expired or terminated. The provisions of Sections 2.15,
2.16, 2.17 and 9.03 and Article VIII shall survive and
remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the
repayment of the Loans, the expiration or termination of the
Letters of Credit and the Commitments or the termination of
this Agreement or any provision hereof.
SECTION 9.06. Counterparts; Integration;
Effectiveness. This Agreement may be executed in
counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original,
but all of which when taken together shall constitute a
single contract. This Agreement, the Guarantee Agreement
and any separate letter agreements with respect to fees
payable to the Administrative Agent constitute the entire
contract among the parties relating to the subject matter
hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject
matter hereof. Except as provided in Section 4.01, this
Agreement shall become effective when it shall have been
executed by the Administrative Agent and when the
Administrative Agent shall have received counterparts hereof
which, when taken together, bear the signatures of each of
the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and
their respective successors and assigns. Delivery of an
executed counterpart of a signature page of this Agreement
by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 9.07. Severability. Any provision of
this Agreement held to be invalid, illegal or unenforceable
in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality
and enforceability of the remaining provisions hereof; and
the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any
other jurisdiction.
SECTION 9.08. Right of Setoff. If an Event of
Default shall have occurred and be continuing, each Lender
and each of its Affiliates is hereby authorized at any time
and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time
held and other obligations at any time owing by such Lender
or Affiliate to or for the credit or the account of the
Borrower against any of and all the obligations of the
Borrower now or hereafter existing under this Agreement held
by such Lender, irrespective of whether or not such Lender
shall have made any demand under this Agreement, but only to
the extent such obligations are then due and payable. The
rights of each Lender under this Section are in addition to
other rights and remedies (including other rights of setoff)
which such Lender may have.
SECTION 9.09. Governing Law; Jurisdiction;
Consent to Service of Process. (a) This Agreement shall be
construed in accordance with and governed by the law of the
State of New York.
(b) The Borrower hereby irrevocably and
unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of the Supreme Court of the State
of New York sitting in New York County and of the United
States District Court of the Southern District of New York,
and any appellate court from any thereof, in any action or
proceeding arising out of or relating to any Loan Document,
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 such New York
State 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 or any other Loan Document shall
affect any right that the Administrative Agent, the Issuing
Bank or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement or any other Loan
Document against the Borrower or its properties in the
courts of any jurisdiction.
(c) The Borrower hereby irrevocably and
unconditionally waives, to the fullest extent it may legally
and effectively do so, any objection which 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 other Loan Document in any court referred to in
paragraph (b) of this Section. 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.
(d) Each party to this Agreement irrevocably
consents to service of process in the manner provided for
notices in Section 9.01. Nothing in this Agreement or any
other Loan Document will affect the right of any party to
this Agreement to serve process in any other manner
permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY
HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT, THE GUARANTEE AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF
ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. Headings. Article and Section
headings and the Table of Contents used herein are for
convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be
taken into consideration in interpreting, this Agreement.
SECTION 9.12. Confidentiality. Each of the
Administrative Agent, the Issuing Bank and the Lenders
agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed
(a) to its and its Affiliates' directors, officers,
employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to
whom such disclosure is made will be informed of the
confidential nature of such Information and instructed to
keep such Information confidential), (b) to the extent
requested by any regulatory authority, (c) to the extent
required by applicable laws or regulations or by any
subpoena or similar legal process (subject to the last
sentence of this paragraph), (d) to any other party to this
Agreement, (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding
relating to this Agreement or any other Loan Document or the
enforcement of rights hereunder or thereunder, (f) subject
to an agreement containing provisions substantially the same
as those of this Section, to any assignee of or Participant
in, or any prospective assignee of or Participant in, any of
its rights or obligations under this Agreement, (g) with the
consent of the Borrower or (h) to the extent such
Information (i) becomes publicly available other than as a
result of a breach of this Section or (ii) becomes available
to the Administrative Agent, the Issuing Bank or any Lender
on a nonconfidential basis from a source other than the
Borrower. For the purposes of this Section, "Information"
means all information received from the Borrower relating to
the Borrower or its business, other than any such
information that is available to the Administrative Agent,
the Issuing Bank or any Lender on a nonconfidential basis
prior to disclosure by the Borrower. Any Person required to
maintain the confidentiality of Information as provided in
this Section shall be considered to have complied with its
obligation to do so if such Person has exercised the same
degree of care to maintain the confidentiality of such
Information as such Person would accord to its own
confidential information. If any Lender receives any
subpoena or similar legal process referred to in clause (c)
above, such Lender will endeavor, to the extent practicable,
to notify the Borrower and afford the Borrower an
opportunity to challenge the same before disclosing any
Confidential Information pursuant thereto.
SECTION 9.13. Interest Rate Limitation.
Notwithstanding anything herein to the contrary, if at any
time the interest rate applicable to any Loan, together with
all fees, charges and other amounts which are treated as
interest on such Loan under applicable law (collectively the
"Charges"), shall exceed the maximum lawful rate (the
"Maximum Rate") which may be contracted for, charged, taken,
received or reserved by the Lender holding such Loan in
accordance with applicable law, the rate of interest payable
in respect of such Loan hereunder, together with all Charges
payable in respect thereof, shall be limited to the Maximum
Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but
were not payable as a result of the operation of this
Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods
shall be increased (but not above the Maximum Rate therefor)
until such cumulated amount, together with interest thereon
at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.
SECTION 9.14. Judgment Currency. If for the
purposes of obtaining judgment in any court it is necessary
to convert a sum due from the Borrower hereunder in the
currency expressed to be payable herein (the "specified
currency") into another currency, the parties hereto agree,
to the fullest extent that they may effectively do so, that
the rate of exchange used shall be that at which in
accordance with normal banking procedures the Administrative
Agent could purchase the specified currency with such other
currency at the Administrative Agent's New York office on
the Business Day preceding that on which final judgment is
given. The obligations of the Borrower in respect of any
sum due to any Lender or the Administrative Agent hereunder
shall, notwithstanding any judgment in a currency other than
the specified currency, be discharged only to the extent
that on the Business Day following receipt by such Lender or
the Administrative Agent (as the case may be) of any sum
adjudged to be so due in such other currency such Lender or
the Administrative Agent (as the case may be) may in
accordance with normal banking procedures purchase the
specified currency with such other currency; if the amount
of the specified currency so purchased is less than the sum
originally due to such Lender or the Administrative Agent,
as the case may be, in the specified currency, the Borrower
agrees, to the fullest extent that it may effectively do so,
as a separate obligation and notwithstanding any such
judgment, to indemnify such Lender or the Administrative
Agent, as the case may be, against such loss.
SECTION 9.15. European Monetary Union. It is
hereby acknowledged that during the term of this Agreement
certain European nations may adopt a single European
currency as their lawful currency in place of certain
currencies that are available hereunder as part of the
anticipated European Economic and Monetary Union. It is
hereby acknowledged and agreed that "Alternative Currency",
as defined herein, including sterling, shall include any
such successor currency and that conversion into such
successor currency shall be made at the official rate of
conversion, as determined by the Administrative Agent, on
the date on which any such Alternative Currency is so
replaced, and that the denomination of the original currency
shall be retained hereunder for so long as it is legally
permissible. It is hereby further acknowledged and agreed
that the provisions of this Agreement relating to
Alternative Currency Loans shall remain in full force and
effect upon such conversion, and that neither the
introduction of a single European currency, the replacement
of an Alternative Currency thereby, the fixing of the
official rate of conversion, nor any economic consequences
resulting therefrom shall give rise to any right to
terminate, contest, cancel, modify or renegotiate the
provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed by their respective
authorized officers as of the day and year first above
written.
TRICON GLOBAL RESTAURANTS,
INC.,
by
_________________________
Name:
Title:
THE CHASE MANHATTAN BANK,
individually and as
Administrative Agent and
Swingline Lender,
by
_________________________
Name:
Title:
CHASE MANHATTAN BANK DELAWARE,
as Issuing Agent,
by
_________________________
Name:
Title:
CITIBANK, N.A.,
by
_________________________
Name:
Title:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK,
by
_________________________
Name:
Title:
NATIONSBANK, N.A.,
by
_________________________
Name:
Title:
DAI ICHI KANGYO BANK LTD,
by
_________________________
Name:
Title:
FUJI BANK LTD,
by
_________________________
Name:
Title:
INDUSTRIAL BANK OF JAPAN,
by
_________________________
Name:
Title:
THE LONG-TERM CREDIT BANK OF
JAPAN, LIMITED, NEW YORK
BRANCH,
by
_________________________
Name:
Title:
SANWA BANK LTD,
by
_________________________
Name:
Title:
SUMITOMO BANK LTD.,
by
_________________________
Name:
Title:
HONG KONG & SHANGHAI BANKING
CORP.,
by
_________________________
Name:
Title:
CREDIT SUISSE FIRST BOSTON,
by
_________________________
Name:
Title:
by
_________________________
Name:
Title:
GOLDMAN SACHS & CO.,
by
_________________________
Name:
Title:
PNC BANK,
by
_________________________
Name:
Title:
ROYAL BANK OF CANADA,
by
_________________________
Name:
Title:
THE YASUDA TRUST AND BANKING
COMPANY, LTD.,
by
_________________________
Name:
Title:
FLEET NATIONAL BANK,
by
_________________________
Name:
Title:
BANCA DI ROMA
by
_________________________
Name:
Title:
BANK OF AMERICA,
by
________________________
Name:
Title:
THE BANK OF NOVA SCOTIA,
by
_________________________
Name:
Title:
BANQUE NATIONALE DE PARIS,
by
_________________________
Name:
Title:
CREDIT AGRICOLE,
by
_________________________
Name:
Title:
NBD BANK, N.A.,
by
_________________________
Name:
Title:
FIRST UNION NATIONAL BANK,
by
_________________________
Name:
Title:
BAYERISCHE HYPOTHEKEN-UND-
WECHSEL-BANK, NEW YORK BRANCH,
by
_________________________
Name:
Title:
by
_________________________
Name:
Title:
ING BANK N.V.,
by
_________________________
Name:
Title:
by
_________________________
Name:
Title:
LEHMAN COMMERCIAL PAPER INC.,
by
_________________________
Name:
Title:
THE MITSUBISHI TRUST AND
BANKING CORPORATION,
by
_________________________
Name:
Title:
NATIONAL CITY BANK,
by
_________________________
Name:
Title:
NORDDEUTSCHE LANDESBANK
GIROZENTRALE, NEW YORK AND/OR
CAYMAN ISLANDS BRANCH,
by
_________________________
Name:
Title:
SAKURA BANK LTD,
by
_________________________
Name:
Title:
STANDARD CHARTERED BANK,
by
_________________________
Name:
Title:
THE SUMITOMO TRUST & BANKING
CO., LTD., NEW YORK BRANCH,
by
_________________________
Name:
Title:
SUMMIT BANK,
by
_________________________
Name:
Title:
SUNTRUST BANKS INC.,
by
_________________________
Name:
Title:
THE TOKAI BANK, LIMITED,
NEW YORK BRANCH,
by
_________________________
Name:
Title:
THE TOYO TRUST & BANKING CO.,
LTD.,
by
_________________________
Name:
Title:
WACHOVIA BANK,
by
_________________________
Name:
Title:
HIBERNIA CORP.,
by
_________________________
Name:
Title:
FIRST SECURITY BANK, N.A.,
by
_________________________
Name:
Title:
NATIONAL BANK OF KUWAIT SAK,
by
_________________________
Name:
Title:
CHAN HWA COMMERICAL BANK,
LTD., NEW YORK BRANCH,
by
_________________________
Name:
Title:
NORTHERN TRUST COMPANY,
by
_________________________
Name:
Title:
CRESTAR BANK,
by
_________________________
Name:
Title:
FIFTH THIRD BANK,
by
_________________________
Name:
Title:
BANK OF LOUISVILLE,
by
_________________________
Name:
Title:
SCHEDULE A
INITIAL GUARANTORS
Subsidiary/State of Incorporation
Buckeye PH, Inc./Ohio
KFC Corporation/Delaware
KFC Enterprises, Inc./Delaware
KFC National Management Company/Delaware
KFC USA, Inc./Delaware
Kentucky Fried Chicken Caribbean Holdings, Inc./Delaware
Kentucky Fried Chicken Corporate Holdings, Inc./Delaware
Kentucky Fried Chicken Corporation/Delaware
Kentucky Fried Chicken International Holdings/Delaware
Kentucky Fried Chicken of California, Inc./Delaware
NKFC, Inc./Delaware
Pizza Hut, Inc./California
Pizza Hut International, LLC/Delaware
Pizza Hut of America, Inc./Delaware
QSR, Inc./Delaware
Taco Bell Corp./California
Taco Bell Royalty Company/California
SCHEDULE 2.01
COMMITMENTS
Lender Term Commitment Revolving
Commitment
The Chase Manhattan Bank $198,190,476.13 $322,059,523.87
Citicorp, N.A. 198,190,476.19 322,059,523.81
Morgan Guaranty Trust Company of 198,190,476.19 322,059,523.81
New York
Nationsbank, N.A. 198,190,476.19 322,059,523.81
Dai-Ichi Kangyo Bank, Ltd 75,809,523.81 123,190,476.19
Fuji Bank Ltd 75,809,523.81 123,190,476.19
Industrial Bank of Japan 75,809,523.81 123,190,476.19
The-Long Term Credit Bank of 75,809,523.81 123,190,476.19
Japan, Limited, New York Branch
Sanwa Bank Ltd 75,809,523.81 123,190,476.19
Sumitomo Bank Ltd 75,809,523.81 123,190,476.19
Marine Midland Bank 57,142,857.14 92,857,142.86
Credit Suisse First Boston 38,095,238.10 61,904,761.90
Goldman Sachs & Co. 38,095,238.10 61,904,761.90
PNC Bank 38,095,238.10 61,904,761.90
Royal Bank of Canada 38,095,238.10 61,904,761.90
The Yasuda Trust and Banking 38,095,238.10 61,904,761.90
Company, Ltd.
Fleet National Bank 28,571,428.57 46,428,571.43
Banca di Roma 19,047,619.05 30,952,380.95
Bank of America 19,047,619.05 30,952,380.95
The Bank of Nova Scotia 19,047,619.05 30,952,380.95
Banque Nationale de Paris 19,047,619.05 30,952,380.95
Credit Agricole 19,047,619.05 30,952,380.95
NBD Bank, N.A. 19,047,619.05 30,952,380.95
First Union National Bank 19,047,619.05 30,952,380.95
Bayerische Hypotheken-und- 19,047,619.05 30,952,380.95
Wechsel-Bank
ING Bank N.V. 19,047,619.05 30,952,380.95
Lehman Commercial Paper Inc. 19,047,619.05 30,952,380.95
The Mitsubishi Trust and Banking 19,047,619.05 30,952,380.95
Corporation
National City Bank 19,047,619.05 30,952,380.95
Norddeutsche Landesbank 19,047,619.05 30,952,380.95
Girozentrale, New York and/or
Cayman Islands Branch
Sakura Bank Ltd 19,047,619.05 30,952,380.95
Standard Chartered Bank 19,047,619.05 30,952,380.95
The Sumitomo Trust & Banking 19,047,619.05 30,952,380.95
Co., Ltd., New York Branch
Summit Bank 19,047,619.05 30,952,380.95
Suntrust Banks, Inc. 19,047,619.05 30,952,380.95
The Tokai Bank, Limited, 19,047,619.05 30,952,380.95
New York Branch
The Toyo Trust & Banking Co., 19,047,619.05 30,952,380.95
Ltd.
Wachovia Bank 19,047,619.05 30,952,380.95
Hibernia Corp. 13,333,333.33 21,666,666.67
First Security Bank, N.A. 11,428,571.43 18,571,428.57
National Bank of Kuwait SAK 11,428,571.43 18,571,428.57
Chang Hwa Commercial Bank, Ltd., 9,523,809.52 15,476,190.48
New York Branch
Northern Trust Company 9,523,809.52 15,476,190.48
Crestar Bank 7,619,047.62 12,380,952.38
Fifth Third Bank 7,619,047.62 12,380,952.38
Bank of Louisville 5,714,285.71 9,285,714.29
TOTALS $2,000,000,000.00 $3,250,000,000.00
SCHEDULE 3.03
GOVERNMENTAL CONSENTS
Governmental Authority Pending Approval
China Transfer of legal title of Shenzhen
KFC Ltd., Xiamen - KFC Co., Ltd.
and Wuhan KFC Ltd.
India Transfer of legal title of Global
Restaurants, Inc.
Mexico Transfer of legal title of Kentucky
Fried Chicken de Mexico, S.A. de
C.V.
SCHEDULE 3.06
DISCLOSED MATTERS
None.
SCHEDULE 3.11
DISCLOSURE
In the Information Memorandum, $63 million of EBIT
in 1997 is attributable to the initial public offering
("IPO") of company owned restaurants in New Zealand. This
figure consisted of two pieces: $88 million of gains
associated with the transaction, partially offset by
$25 million of various restructuring and impairment charges
taken in international restaurants. A tax rate of 39% was
applied to this gain in computing net income.
In actuality, no tax costs were incurred in
connection with the IPO. It actually generated a non-cash
tax benefit of roughly $7 million while the charges
generated a tax benefit of $2 million. Consequently, the
net income impact of the IPO, net of the charges, is
$72 million.
SCHEDULE 3.13
SPIN-OFF TRANSACTIONS
Pending Spin-Off Transactions
Transfer of legal title of Shenzhen KFC Ltd., Xiamen - KFC
Co., Ltd. and Wuhan KFC Ltd.
Transfer of legal title of Global Restaurants, Inc.
Transfer of legal title of Kentucky Fried Chicken de Mexico,
S.A. de C.V.
SCHEDULE 6.02
EXISTING LIENS
Item Amount Lien Holder Description
(USD)
Cash 20,000,000 Corporate Cash collateralization
collateral Receivables of Tricon's Tip
Corporation guarantee of CRC (a)
("CRC") as
Investor
Cash 10,000,000 The Bank of Nova Cash collateralization
collateral Scotia, as Agent of Tricon's Tip
for the Letter guarantee of Tricon
of Credit Banks Capital Corp. (a)
and Texas
Commerce Bank
National
Association, as
Collateral Agent
Cash initially Texas Commerce Cash collateralization
collateral 100,000 Bank National of Tricon's guarantee
and not Association, as of the working capital
to exceed Working Capital line for Tricon
1,000,000 Lender Capital Corp. (a)
Pizza Hut 2,800,000 N/A IRB issued by City
Inc. of Wichita, Kansas
head- to fund expansion of
quarters PHI's headquarters
in Wichita,
Kansas
Pownell 2,800,000 N/A Amortizing loans
Note issued in
conjunction with the
acquisition of
Windmill Industries
Lampo Note 2,100,000 N/A Amortizing loan
issued in
conjunction with
acquisition
Lincoln 4,700,000 N/A Mortgage notes
National assumed in
Note acquisition of
Titusville Pizza Hut
franchise
(a) Cash collateral to be posted October 6, 1997.
SCHEDULE 6.08
EXISTING RESTRICTIONS
None.