1
Exhibit (10)(s)
--------------------------------------------------------------------------------
AMENDED AND RESTATED
REVOLVING CREDIT AND TERM LOAN AGREEMENT
Dated as of November 4, 1997
By and among
UNO RESTAURANTS, INC.
and
SAXET CORPORATION,
as Borrowers
UNO FOODS INC.
PIZZERIA UNO CORPORATION
URC HOLDING COMPANY, INC.
and
UNO RESTAURANT CORPORATION,
as Guarantors
and
FLEET NATIONAL BANK, as Agent
and
BANKBOSTON, N.A., as Co-Agent
and
FLEET NATIONAL BANK
and
BANKBOSTON, N.A.
as Banks
--------------------------------------------------------------------------------
2
TABLE OF CONTENTS
Page
----
ARTICLE 1. DEFINITIONS AND ACCOUNTING TERMS...........................................................2
Section 1.1 Definitions...................................................................2
Section 1.2. Accounting Terms.............................................................16
ARTICLE 2. THE CREDITS...............................................................................17
Section 2.1. The Revolving Credit.........................................................17
Section 2.2. Notice and Manner of Borrowing or Conversion of Revolving Credit
Advances.....................................................................18
Section 2.3. Interest on Revolving Credit Advances........................................19
Section 2.4. The Term Loans...............................................................20
Section 2.5. Interest on Term Loans.......................................................20
Section 2.6. Additional Payments..........................................................21
Section 2.7. Computation of Interest, Etc.................................................21
Section 2.8. Duration of Interest Periods.................................................21
Section 2.9. Commitment Fee; Agency Fee, Facility Fee.....................................22
Section 2.10. Reduction and Termination by the Borrower....................................22
Section 2.11. Increased Costs, Etc.........................................................22
Section 2.12. Availability of LIBOR Pricing Option; Changed Circumstances..................24
Section 2.13. Use of Proceeds..............................................................25
Section 2.14. Guaranties...................................................................25
ARTICLE 3. CONDITIONS OF THE CREDITS.................................................................28
Section 3.1. Conditions to First Revolving Credit Advance and Term Loans..................28
Section 3.2. Conditions to All Loans......................................................29
ARTICLE 4. PAYMENT AND REPAYMENT.....................................................................30
Section 4.1. Mandatory Payments...........................................................30
Section 4.2. Voluntary Prepayment.........................................................30
Section 4.3. Payment and Interest Cutoff..................................................30
Section 4.4. Payment or Other Actions on Non-Business Days................................31
Section 4.5. Method and Timing of Payments................................................31
Section 4.6. Sharing of Payments, Etc.....................................................31
Section 4.7. Payments Not at End of Interest Period.......................................32
ARTICLE 5. REPRESENTATIONS AND WARRANTIES............................................................32
Section 5.1. Corporate Existence, Good Standing, Etc......................................32
Section 5.2. Principal Place of Business; Location of Records.............................33
Section 5.3. Qualification................................................................33
Section 5.4. Subsidiaries.................................................................33
(i)
3
Page
----
Section 5.5. Corporate Power..............................................................33
Section 5.6. Valid and Binding Obligations................................................34
Section 5.7. Other Agreements.............................................................34
Section 5.8. Payment of Taxes.............................................................34
Section 5.9. Financial Statements.........................................................35
Section 5.10. Other Materials Furnished....................................................35
Section 5.11. Stock........................................................................35
Section 5.12. Changes in Condition.........................................................35
Section 5.13. Assets, Licenses, Etc........................................................35
Section 5.14. Litigation...................................................................36
Section 5.15. Pension Plans................................................................36
Section 5.16. Outstanding Indebtedness.....................................................36
Section 5.17. Environmental Matters........................................................36
Section 5.18. Foreign Trade Regulations....................................................38
Section 5.19. Governmental Regulations.....................................................38
Section 5.20. Margin Stock.................................................................38
Section 5.21 Saxet Mortgaged Properties...................................................38
ARTICLE 6. REPORTS...................................................................................38
Section 6.1. Interim Financial Statements and Reports.....................................38
Section 6.2. Annual Financial Statements..................................................39
Section 6.3. Notice of Defaults...........................................................39
Section 6.4. Notice of Litigation.........................................................39
Section 6.5. Communications with Others...................................................39
Section 6.6. Reportable Events............................................................40
Section 6.7. Annual Pension Reports.......................................................40
Section 6.8. Reports to other Creditors...................................................40
Section 6.9. Management Letters...........................................................40
Section 6.10. Environmental Reports........................................................41
Section 6.11. MetLife Notes................................................................41
Section 6.12. Annual Projections...........................................................41
Section 6.13. Miscellaneous................................................................41
ARTICLE 7. FINANCIAL RESTRICTIONS....................................................................42
Section 7.1. Consolidated Tangible Net Worth..............................................42
Section 7.2. Cash Flow Coverage Ratio.....................................................42
Section 7.3. Ratio of Consolidated Liabilities to Consolidated Tangible Net Worth.........42
Section 7.4. Profitability................................................................42
Section 7.5. Operating Cash Flow..........................................................42
Section 7.6. Consolidated Leverage Ratio..................................................43
Section 7.7. Consolidated Adjusted EBITDA.................................................43
(ii)
4
Page
----
ARTICLE 8. AFFIRMATIVE COVENANTS.....................................................................44
Section 8.1. Existence and Business...................................................................44
Section 8.2. Taxes and Other Obligations..................................................44
Section 8.3. Maintenance of Properties and Leases.........................................44
Section 8.4. Insurance....................................................................44
Section 8.5. Records, Accounts and Places of Business.....................................45
Section 8.6. Inspection...................................................................45
Section 8.7. Change in Officers or Directors..............................................45
Section 8.8. Maintenance of Accounts......................................................45
Section 8.9. Access to Independent Public Accountants.....................................45
ARTICLE 9. NEGATIVE COVENANTS........................................................................46
Section 9.1. Restrictions on Indebtedness.................................................46
Section 9.2. Restriction on Liens.........................................................47
Section 9.3. Investments..................................................................48
Section 9.4. Dispositions of Assets.......................................................49
Section 9.5. Assumptions, Guaranties, Etc. of Indebtedness of Other Persons...............49
Section 9.6. Mergers, Etc.................................................................49
Section 9.7. Pension Reform Act...........................................................50
Section 9.8. Distributions................................................................50
Section 9.9. Sale and Leaseback...........................................................51
Section 9.10. Franchise Agreements.........................................................51
Section 9.11. Capital Structure............................................................51
Section 9.12. Transactions with Affiliates.................................................51
Section 9.13. New Subsidiaries.............................................................51
Section 9.14. New Restaurants..............................................................52
Section 9.15. Change in Bankruptcy Plan....................................................52
ARTICLE 10. EVENTS OF DEFAULT AND REMEDIES...........................................................52
Section 10.1. Events of Default............................................................52
Section 10.2. Remedies.....................................................................54
Section 10.3. Setoff.......................................................................54
Section 10.4. Application of Proceeds......................................................54
ARTICLE 11. WAIVERS; CONSENTS; AMENDMENTS; REMEDIES..................................................55
Section 11.1 Actions by Lenders...........................................................55
Section 11.2 Actions by Borrower..........................................................56
ARTICLE 12. SUCCESSORS AND ASSIGNS...................................................................56
Section 12.1. General......................................................................56
(iii)
5
Page
----
Section 12.2. Assignments..................................................................56
Section 12.3. Participations...............................................................58
ARTICLE 13. THE AGENT................................................................................59
Section 13.1. Authorization and Action.....................................................59
Section 13.2. Agent's Reliance, Etc........................................................59
Section 13.3. Fleet and Affiliates.........................................................60
Section 13.4. Bank Credit Decision.........................................................60
Section 13.5. Indemnification of Agent.....................................................60
Section 13.6. Successor Agent..............................................................61
Section 13.7. Amendment of Article 13......................................................61
ARTICLE 14. INDEMNIFICATION..........................................................................61
ARTICLE 15. MISCELLANEOUS............................................................................62
Section 15.1. Survival of Representations..................................................62
Section 15.2. Governmental Regulation......................................................62
Section 15.3. Notices......................................................................62
Section 15.4. Merger.......................................................................63
Section 15.5. Governing Law................................................................63
Section 15.6. Counterparts.................................................................63
Section 15.7. Bank Holidays................................................................63
Section 15.8. Expenses.....................................................................63
Section 15.9. Headings.....................................................................64
Section 15.10. Severability of Provisions...................................................64
Section 15.11. Nonliability of Lenders......................................................64
Section 15.12. WAIVER OF JURY TRIAL.........................................................64
(iv)
6
LIST OF EXHIBITS AND SCHEDULES
Exhibit A-1 Form of Revolving Credit Note
Exhibit A-2 Form of URI Term Note
Exhibit A-3 Form of Saxet Term Note
Exhibit B Form of Compliance Certificate
Exhibit C Form of Opinion of Borrower's Counsel
Exhibit D Form of Notice Borrowing or Conversion
Exhibit E Form of Affiliate Guaranty Agreement
Exhibit F Form of Assignment and Assumption Agreement
Exhibit G Form of Mortgage and Security Agreement
Exhibit H Form of Assignment of Leases
Schedule 3.1 Schedule of Saxet Mortgaged Properties Subject to Saxet
Mortgage Documents on Closing Date
Schedule 5.4 Schedule of Subsidiaries
Schedule 5.9 Schedule of Financial Statements
Schedule 5.8 Tax Matters
Schedule 5.10 Materials Furnished
Schedule 5.11 Schedule of Issued and Outstanding Stock
Schedule 5.12 Changes in Condition
Schedule 5.13(a) Schedule of Liens, Encumbrances, Indebtedness and
Capitalized Lease Obligations
Schedule 5.13(c) Restaurant Locations
Schedule 5.14 Litigation
Schedule 5.16 Indebtedness
Schedule 5.17 Environmental Matters
Schedule 8.4 Schedule of Insurance
Schedule 9.5 Guarantees
Schedule 9.10 The Franchise Program
(v)
7
AMENDED AND RESTATED
REVOLVING CREDIT AND TERM LOAN AGREEMENT
This AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN AGREEMENT is
entered into as of November 4, 1997, by and among UNO RESTAURANTS, INC., a
Massachusetts corporation ("URI"), SAXET CORPORATION, a Delaware corporation
("Saxet", and together with URI each a "Borrower" and collectively the
"Borrowers"), UNO FOODS INC., a Massachusetts corporation ("UFI"), PIZZERIA UNO
CORPORATION, a Delaware corporation ("PUC"), UNO RESTAURANT CORPORATION, a
Delaware corporation ("URC"), URC HOLDING COMPANY, INC., a Delaware corporation
("UHC" and, together with UFI, PUC, URC and the Borrowers, hereinafter referred
to collectively, as the "Loan Parties"), FLEET NATIONAL BANK, a national banking
association ("Fleet"), BANKBOSTON, N.A., a national banking association ("BKB"),
FLEET NATIONAL BANK, as Agent for the Banks referred to below (Fleet, together
with its successors and assigns in such capacity, the "Agent") and BANKBOSTON,
N.A., as Co-Agent for the Banks referred to below (BKB, together with its
successors and assigns in such capacity, the "Co-Agent").
RECITALS
WHEREAS, URC holds all of the issued and outstanding capital stock of
UHC and UHC, directly or indirectly, holds all of the issued and outstanding
capital stock of each of UFI, PUC, Saxet and URI; and
WHEREAS, the businesses of the Loan Parties are integrally related, and
the Borrowers' access to capital is necessary to the conduct, promotion and
attainment of the business of all the other Loan Parties; and
WHEREAS, the Loan Parties have requested the Banks to establish credit
facilities with the Borrowers to repay certain existing indebtedness of the
Borrowers, to provide funds for working capital and certain purchases of stock
of URC, and to fund certain advances to UFI and PUC; and
WHEREAS, the Banks have agreed, on the terms and conditions set forth
in this Agreement, to provide credit facilities to the Borrowers for such
purposes; and
WHEREAS, the Agent, the Banks and the Loan Parties are party to a
Revolving Credit and Term Loan Agreement dated as of December 9, 1994 (as
amended to the date hereof, the "1994 Credit Agreement") and desire to amend and
restate the 1994 Credit Agreement in its entirety;
8
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the parties hereby amend and restate the 1994 Credit
Agreement in its entirety and agree as follows:
ARTICLE 1. DEFINITIONS AND ACCOUNTING TERMS
Section 1.1 DEFINITIONS. In addition to the terms defined elsewhere in
this Agreement, unless otherwise specifically provided herein, the following
terms shall have the following meanings for all purposes when used in this
Agreement, and in any note, certificate, report or other document made or
delivered in connection with this Agreement:
"1996 FINANCIAL STATEMENTS" shall mean the Consolidated
Balance Sheet of URC and its Subsidiaries as of September 29, 1996 and
the related Consolidated Statements of Income, Shareholders' Equity and
Cash Flow for the year then ended and notes to such financial
statements.
"AFFILIATE" shall mean: (a) any present director or executive
officer of any of the Loan Parties or any Person owning, to the
knowledge of any of the Loan Parties, more than 5% of the outstanding
common stock of any of the Loan Parties; and (b) any Person that
controls, is controlled by or is under common control with such Person
or any Affiliate of such Person. For purposes of this definition,
"control" of a Person shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of its
management or policies, whether through the ownership of voting
securities, by contract or otherwise.
"AFFILIATE GUARANTORS" shall mean each of the Subsidiaries of
the Loan Parties (other than UHC, UFI, PUC and the Borrowers)
identified on SCHEDULE 5.4 hereto as Affiliate Guarantors, and any
future Subsidiary of the Loan Parties which executes an Affiliate
Guaranty Agreement pursuant to Section 9.13 hereof.
"AFFILIATE GUARANTY AGREEMENT(S)" shall mean the Guaranty
Agreements in the form of EXHIBIT E attached hereto, to be executed by
each Affiliate Guarantor in favor of the Agent, as the same may be
amended and in effect from time to time.
"AGENT" See Preamble.
"AGREEMENT" shall mean this Amended and Restated Revolving
Credit and Term Loan Agreement, as amended or supplemented from time to
time. References to Articles, Sections, Exhibits, Schedules and the
like refer to the Articles, Sections, Exhibits, Schedules and the like
of this Agreement unless otherwise indicated.
2
9
"APPLICABLE COMMITMENT FEE PERCENTAGE" shall mean during each
fiscal quarter of URI, the percentage set forth below opposite the
Consolidated Leverage Ratio in effect as of the end of the immediately
preceding fiscal quarter:
Consolidated Leverage Ratio
as of the end of the Immediately Applicable Commitment
Preceding Fiscal Quarter Fee Percentage
-------------------------------- ---------------------
Equal to or Greater than 2.0 : 1.0 .50%
Equal to or Greater than 1.5 : 1.0
and Less than 2.0 : 1.0 .375%
Equal to or Greater than 1.0 : 1.0
and Less than 1.5 : 1.0 .3125%
Less than 1.0 : 1.0 .25%
"APPLICABLE SAXET LIBOR RATE" shall mean the sum of (a) the
LIBOR Rate, PLUS (b) the Applicable Saxet Margin - LIBOR Rate as each
is in effect from time to time.
"APPLICABLE SAXET MARGIN - PRIME RATE" and "APPLICABLE SAXET
MARGIN - LIBOR RATE" shall mean during each fiscal quarter of Saxet,
the rate per annum set forth opposite the Consolidated Leverage Ratio
in effect as of the end of the immediately preceding fiscal quarter:
Consolidated Leverage Ratio
as of the end of the Immediately Applicable Margin
Preceding Fiscal Quarter - Prime Rate - LIBOR RATE
-------------------------------- ------------ ------------
Equal to or Greater than 2.0 : 1.0 0.50% 1.75%
Less than 2.0 : 1.0 0.25% 1.50%
"APPLICABLE SAXET PRIME RATE" shall mean the sum of (a) the
Prime Rate plus (b) the Applicable Saxet Margin - Prime Rate, as each
is in effect from time to time.
"APPLICABLE URI LIBOR RATE" shall mean the sum of (a) the
LIBOR Rate, PLUS (b) the Applicable URI Margin - LIBOR Rate as each is
in effect from time to time.
"APPLICABLE URI MARGIN - PRIME RATE" and "APPLICABLE URI
MARGIN - LIBOR RATE" shall mean during each fiscal quarter of URI, the
percentage set forth opposite
3
10
the Consolidated Leverage Ratio in effect as of the end of the
immediately preceding fiscal quarter:
Consolidated Leverage Ratio
as of the end of the Immediately Applicable Margin
Preceding Fiscal Quarter - Prime Rate - LIBOR Rate
-------------------------------- ------------ ------------
Equal to or Greater than 2.0 : 1.0 0.50% 1.75%
Equal to or Greater than 1.5 : 1.0
and Less than 2.0 : 1.0 0.25% 1.50%
Equal to or Greater than 1.0 : 1.0
and Less than 1.5 : 1.0 0.00% 1.25%
Less than 1.0 : 1.0 0.00% 1.00%
provided, however that if URC purchases any of its common stock on or
after the Closing Date, the Applicable Margins described above shall
thereafter be increased by an additional 37.5 basis points on a portion
of the outstanding Revolving Credit Advances equal to the amount
expended for such purchases.
"APPLICABLE URI PRIME RATE" shall mean the sum of (a) the
Prime Rate, PLUS (b) the Applicable URI Margin - Prime Rate, as each is
in effect from time to time.
"BANK AGREEMENT" shall mean this Agreement, the Notes, the
Affiliate Guaranty Agreements, the Saxet Mortgage Documents, and any
other present or future agreement from time to time entered into
between any of the Loan Parties or an Affiliate and the Agent or the
Banks arising out of this Agreement or which is stated to be a Bank
Agreement, each as from time to time amended or modified, and all
statements, reports and certificates delivered by a Loan Party or any
such Affiliate to the Agent or the Banks in connection therewith.
"BANKS" shall mean, Fleet, BKB and their successors and
assigns.
"BANK OBLIGATIONS" shall mean all present and future
obligations and Indebtedness of the Loan Parties or any Subsidiary
owing to the Agent or the Banks under this Agreement or any other Bank
Agreement, including, without limitation, the obligations to pay the
Indebtedness from time to time evidenced by the Notes, and obligations
to pay interest, commitment fees, balance deficiency fees and charges
from time to time owed under any Bank Agreement.
4
11
"BUSINESS DAY" shall mean (a) for all purposes other than as
covered by clause (b) below, a day on which Banks shall be open to
conduct commercial banking business in Boston, Massachusetts and New
York, New York, and (b) with respect to all notices and determinations
in connection with, and payments of principal and interest on, LIBOR
Rate Loans, any day that is a Business Day described in clause (a) and
that is also a day for trading by and between banks in U.S. dollar
deposits in the interbank Eurodollar market.
"CAPITAL EXPENDITURES" shall mean amounts paid or Indebtedness
incurred by any Person in connection with the purchase or lease by such
Person of assets that would be required to be capitalized and shown on
the balance sheet of such Person in accordance with GAAP, including,
without limitation, the acquisition (whether by purchase of stock or
assets) of any restaurant and any amount paid for the Florida Assets
above $3,200,000; PROVIDED, HOWEVER, that Capital Expenditures shall
not include lease obligations of URC and its Subsidiaries in respect of
Company Restaurants that are treated as Capitalized Leases on the
consolidated financial statements of URC and its Subsidiaries.
"CAPITALIZED LEASE" shall mean any lease which is or should be
capitalized on the balance sheet of the lessee in accordance with
generally accepted accounting principles and Statement of Financial
Accounting Standards No. 13.
"CAPITALIZED LEASE OBLIGATIONS" shall mean the amount of the
liability reflecting the aggregate discounted amount of future payments
under all Capitalized Leases calculated in accordance with generally
accepted accounting principles and Statement of Financial Accounting
Standards No. 13.
"CHANGE OF CONTROL" shall be deemed to have occurred when (a)
the individuals who at the Closing Date constituted the Board of
Directors of URC (together with any new directors whose election by
such Board of Directors or whose nomination for election by the
stockholders of URC was approved by a vote of a majority of the
directors then still in office who were directors on the Closing Date
or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors of URC then still in office or (b) less than thirty-three
percent (33%) of the outstanding shares of common stock of URC is owned
of record or beneficially by Xxxxx X. Xxxxxxx, the executors of his
estate, the trustees of any trust established under his will or the
family member beneficiaries of his estate. For purposes of the
preceding sentence, shares not owned of record by Xxxxx X. Xxxxxxx
shall be deemed to be owned beneficially by him only if he possesses
the sole power to exercise all voting rights associated with such
shares, whether as trustee or otherwise.
"CLOSING DATE" shall mean November 4, 1997.
5
12
"COMMITMENT" shall mean, as to any Bank, the product of (a)
the Maximum Credit Amount plus the principal amount of the Saxet Term
Loan plus the principal amount of the URI Term Loan, TIMES (b) such
Bank's Commitment Percentage and Commitments shall mean collectively
the Commitment of all Banks.
"COMMITMENT FEE" shall have the meaning set forth in
Section 2.9 hereof.
"COMMITMENT PERCENTAGE" shall mean, as to any Bank, the
percentage figure set forth below such Bank's name on an execution page
hereof as its Commitment Percentage.
"COMPANY RESTAURANT" shall mean a restaurant owned or leased
and operated by a Loan Party or any Subsidiary of a Loan Party.
"COMPLIANCE CERTIFICATE" shall mean a certificate in the form
of EXHIBIT B hereto and executed by the chief executive officer or
chief financial officer of the Borrower.
"CONSOLIDATED" and "CONSOLIDATING", when used with reference
to any term, shall mean that term (or the terms "combined" and
"combining", as the case may be, in the case of partnerships, joint
ventures and Affiliates that are not Subsidiaries) as applied to the
accounts of URC (or other specified Person) and all of its Subsidiaries
(or other specified Persons), or such of its Subsidiaries as may be
specified, consolidated (or combined) in accordance with GAAP and with
appropriate deductions for minority interests in Subsidiaries, as
required by GAAP.
"CONSOLIDATED ADJUSTED EBITDA" shall mean for any period, the
sum of (a) Consolidated EBIT, PLUS (b) the aggregate amount of
consolidated depreciation and amortization expense of URC and its
Subsidiaries other than Excluded Amortization Expense, determined in
accordance with GAAP on a consolidated basis.
"CONSOLIDATED CAPITAL EXPENDITURES" shall mean for any period,
all Capital Expenditures, including any amount paid for the Florida
Assets above $3,200,000, made or incurred by URC and its Subsidiaries,
other than Capital Expenditures for acquisitions of land up to
$2,000,000 in each fiscal year; provided that any portion of such
$2,000,000 allowance not used in any fiscal year for the purchase of
land may be carried forward and used for additional acquisitions of
land in future fiscal years.
"CONSOLIDATED CURRENT ASSETS" shall mean, at any date as of
which the amount thereof shall be determined, all assets of URC and its
Subsidiaries which should properly be classified as current, determined
in accordance with GAAP consistently applied.
6
13
"CONSOLIDATED CURRENT LIABILITIES" shall mean, at any date as
of which the amount thereof shall be determined, all liabilities of URC
and its Subsidiaries which should properly be classified as current in
accordance with GAAP consistently applied, including, without
limitation, all fixed prepayments of, and sinking fund payments with
respect to, Indebtedness and all tax liabilities of URC required to be
paid within one year from the date of determination.
"CONSOLIDATED EBIT" shall mean for any period, the earnings of
URC and its Subsidiaries before interest expense and taxes, determined
in accordance with GAAP on a consolidated basis; PROVIDED that any
non-cash charge against the earnings of URC and its Subsidiaries
required to be taken in accordance with the requirements of Statement
of Financial Accounting Standards No. 121 (Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed Of) shall be excluded for purposes of determining Consolidated
EBIT.
"CONSOLIDATED FUNDED INDEBTEDNESS" shall mean as at any date
of determination, all Indebtedness of URC and its Subsidiaries for
borrowed money (including, without limitation, Capitalized Lease
Obligations) maturing more than one year after the date of
determination, and further including, without limitation, all
Indebtedness in respect of the MetLife Notes and the Revolving Credit
Advances.
"CONSOLIDATED LEVERAGE RATIO" shall mean, as of any date of
determination, the ratio of (a) Consolidated Funded Indebtedness to (b)
Consolidated Adjusted EBITDA for the period of four fiscal quarters
ending on such date.
"CONSOLIDATED LIABILITIES" shall mean as at any date of
determination, the total of all liabilities of URC and its Subsidiaries
outstanding on such date, determined in accordance with GAAP on a
consolidated basis.
"CONSOLIDATED NET INCOME" shall mean with reference to any
period and as to any Person, the net income (or deficit) of such Person
and its Subsidiaries for such period (determined on a consolidated
basis), after deducting all operating expenses, provisions for all
taxes and reserves (including reserves for deferred income taxes) and
all other proper deductions, all determined in accordance with GAAP on
a consolidated basis, after eliminating all intercompany transactions
and after deducting portions of income properly attributable to
minority interests, if any, in the stock and surplus of such
Subsidiaries; PROVIDED that there shall be excluded (but only to the
extent otherwise included in net income for such period):
(a) the income (or deficit) of any entity accrued
prior to the date it becomes a Subsidiary of such Person or is
merged into or consolidated with such Person or a Subsidiary
of such Person;
7
14
(b) the income (or deficit) of any entity (other than
a Subsidiary of such Person) in which such Person or any of
its Subsidiaries has an ownership interest, except to the
extent that any such income has been actually received by such
Person or such Subsidiary in the form of dividends or similar
distributions;
(c) the undistributed earnings of any Subsidiary of
such Person to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary is not
at the time permitted by the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule
or governmental regulation applicable to such Subsidiary;
(d) any restoration to income of any contingency
reserve, except to the extent that provision for such reserve
was made out of income accrued during such period;
(e) any aggregate net gain (but not any aggregate net
loss) reflected during such period arising from the sale,
exchange or other disposition of capital assets (such term to
include all fixed assets, whether tangible or intangible, all
inventory sold in conjunction with the disposition of fixed
assets, and all securities);
(f) any write-up of any asset;
(g) any net gain from the collection of the proceeds
of life insurance policies;
(h) any gain arising from the acquisition of any
securities of URC or any of its Subsidiaries;
(i) any net income or gain (but not any net loss)
reflected during such period from any change in accounting,
from any discontinued operations or the disposition thereof,
from any extraordinary events or from any prior period
adjustment;
(j) any deferred credit representing the excess of
equity in any Subsidiary of such Person at the date of
acquisition over the cost of the investment in such
Subsidiary; and
(k) in the case of a successor to such Person by
consolidation or merger or as a transferee of its assets, any
earnings of the successor corporation prior to such
consolidation, merger or transfer of assets.
8
15
"CONSOLIDATED TANGIBLE NET WORTH" shall mean the sum of the
capital stock (but excluding treasury stock and capital stock
subscribed and unissued) and surplus (including earned surplus, capital
surplus and the balance of the current profit and loss account not
transferred to surplus) accounts of URC and its Subsidiaries appearing
on a consolidated balance sheet of URC and its Subsidiaries
(specifically including URI and its Subsidiaries) prepared in
accordance with GAAP as of the date of determination, after eliminating
all amounts properly attributable to minority interests, if any, in the
stock and surplus of Subsidiaries and after deducting therefrom
(without duplication of deductions):
(a) the net book amount of all assets, after
deducting any reserves applicable thereto, which would be
treated as intangibles under GAAP, including, without
limitation, such items as good will, trademarks, trade names,
service marks, brand names, copyrights, patents and licenses,
and rights with respect to the foregoing, unamortized debt
discount and expense, organizational expenses and the excess
of cost of purchased Subsidiaries over equity in the net
assets thereof at the date of acquisition;
(b) any write-up in the book value of any asset on
the books of URC or any Subsidiary of URC resulting from a
revaluation thereof subsequent to June 30, 1997;
(c) the amounts, if any, at which any shares of stock
of URC or any Subsidiary of URC appear on the asset side of
such balance sheet;
(d) all deferred charges (other than prepaid
expenses); and
(e) the amounts at which any Investments (other than
Investments which are permitted by Section 9.3) appear on the
asset side of such balance sheet.
"CONSOLIDATED TOTAL DEBT SERVICE" shall mean for any period,
the sum of (a) the aggregate amount of consolidated interest expense of
URC and its Subsidiaries in respect of Indebtedness for borrowed money,
calculated in accordance with the applicable instrument to which such
interest relates, PLUS (b) the interest component of all Rental
Obligations in respect of Capitalized Leases, PLUS (c) payments of
principal on long term Indebtedness for borrowed money actually paid
during such period, all as determined in accordance with GAAP on a
consolidated basis.
"DAYTONA CREDITOR'S PLAN" shall mean the Creditor Uno of
Daytona, Inc. Plan of Reorganization filed with the United States
Bankruptcy Court Middle District of Florida, Jacksonville Division, In
re: Consolidated Inns of Daytona Beach, Inc. d/b/a
9
00
Xxxxxx Xxx Xxxxxxxx, Xxxxxx, Case No. 97-126-BKC-3Fl, filed on October
28, 1997, a copy of which has been provided to the Banks.
"DEFAULT" shall mean an Event of Default as defined in Section
10, or an event or condition which with the passage of time or giving
of notice, or both, would become such an Event of Default.
"DISTRIBUTION" shall mean: (a) the declaration or payment of
any dividend on or in respect of any shares of any class of capital
stock of the Loan Parties, other than dividends payable solely in
shares of common stock of the corporation involved; (b) the purchase,
redemption, or other acquisition or retirement of any shares of any
class of capital stock of the Loan Parties directly or indirectly; (c)
any other distribution on or in respect of any shares of any class of
capital stock of the Loan Parties; (d) any setting apart or allocating
any sum for the payment of any dividend or distribution, or for the
purchase, redemption or retirement of any shares of capital stock of
the Loan Parties; and (e) any payment of principal on or any retirement
of Subordinated Indebtedness.
"ENVIRONMENTAL LAW" shall mean any judgment, decree, order,
law, license, rule or regulation pertaining to environmental matters,
or any federal, state, county or local statute, regulation, ordinance,
order or decree relating to public health, welfare, the environment, or
to the extent they pertain to the storage, handling, use or generation
of hazardous substances in or at the workplace, worker health or
safety, whether now existing or hereafter enacted.
"EVENT OF DEFAULT" shall have the meaning set forth in
Section 10.1 hereof.
"EXCLUDED AMORTIZATION EXPENSE" shall mean all amortization
expense of URC and its Subsidiaries attributable to pre-opening costs
of Company Restaurants.
"FEDERAL FUNDS RATE" shall mean, for any day, a fluctuating
interest rate per annum equal to the weighted average of the rates on
overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate
is not so published for any day that is a Business Day, the average of
the quotations for such day on such transactions received by the Agent
from three Federal funds brokers of recognized standing selected by the
Agent."
"FEE LETTER" the letter of even date herewith among the Agent
and the Loan Parties describing the arrangement fee to be paid on the
Closing Date and the agent's fee to be paid on the Closing Date and
each anniversary thereof.
10
17
"FISCAL QUARTER END" shall mean the last day of any designated
fiscal quarter of URC and its Subsidiaries.
"FLORIDA ASSETS" shall mean all of the (a) mortgage loans
purchased from First National Bank of Chicago; (b) New Preferred Stock;
and (c) New Common Stock, including all land, other assets, rights to
contracts and rights to unexpired leases of the Reorganized Debtor
which are indirectly owned by the owners of the New Common Stock (each
term as defined in the Daytona Creditor's Plan), all of which may be
purchased indirectly by URI through its subsidiary Uno's of Daytona
Inc. pursuant to the Daytona Creditor's Plan.
"FRANCHISEE" shall mean each Person who operates a pizza
restaurant pursuant to a franchise agreement with PUC or any of its
Affiliates.
"GAAP" shall mean generally accepted accounting principles as
set forth from time to time in the opinions of the Accounting
Principles Board of the American Institute of Certified Public
Accountants and statements of the Financial Accounting Standards Board
or in such opinions and statements of such other entities as shall be
approved by a significant segment of the accounting profession.
"GOVERNMENTAL AUTHORITY" shall mean any governmental or
quasi-governmental authority, whether executive, legislative, judicial,
administrative or other, or any combination thereof, including, without
limitation, any federal, state or local government or governmental or
quasi-governmental agency, board, body, branch, bureau, commission,
corporation, court, department, instrumentality or other political unit
or subdivision or other entity of any of the foregoing, whether
domestic or foreign.
"GUARANTY" or "GUARANTEE" or "GUARANTIES" shall include any
arrangement whereby a Person is or becomes liable in respect of any
Indebtedness or other obligation of another and any other arrangement
whereby credit is extended to another obligor on the basis of any
promise of a guarantor, whether that promise is expressed in terms of
an obligation to pay the Indebtedness of such obligor, or to purchase
or lease assets under circumstances that would enable such obligor to
discharge one or more of its obligations, or to maintain the capital,
the working capital, solvency or general financial condition of such
obligor, whether or not such arrangement is listed in the balance sheet
of the guarantor or referred to in a footnote thereto.
"GUARANTEED OBLIGATIONS" shall have the meaning set forth in
Section 2.14(a).
"GUARANTORS" shall mean each Borrower (with respect to the
Bank Obligations of the other Borrower), each of UFI, PUC, URC and UHC,
and their respective successors and assigns.
11
18
"INDEBTEDNESS" shall mean, as to any Person, all obligations,
contingent and otherwise, which in accordance with GAAP consistently
applied should be classified upon such Person's balance sheet as
liabilities, but in any event including liabilities secured by any
mortgage, pledge, security interest, lien, charge or other encumbrance
existing on property owned or acquired by such Person whether or not
the liability secured thereby shall have been assumed, letters of
credit open for account, obligations under acceptance facilities,
Capitalized Lease Obligations and all obligations on account of
Guaranties, endorsements and any other contingent obligations in
respect of the Indebtedness of others whether or not reflected on such
balance sheet or in a footnote thereto.
"INTEREST PERIOD" shall mean with respect to any LIBOR Rate
Loan, the period commencing on the date of such LIBOR Rate Loan and
ending one, two or three months thereafter, as the Borrower may request
as provided in Section 2.2 hereof, PROVIDED, THAT:
(a) any Interest Period (other than an Interest
Period determined pursuant to clause (c) below) that would otherwise
end on a day that is not a Business Day shall be extended to the next
succeeding Business Day;
(b) any Interest Period with respect to a Revolving
Credit Advance or any portion of the URI Term Loan that would otherwise
end after October 31, 2002 shall end on October 31, 2002 and any
Interest Period with respect to any portion of the Saxet Term Loan that
would otherwise end after October 31, 2004 shall end on October 31,
2004; and
(c) notwithstanding clause (b) above, no Interest
Period shall have a duration of less than 30 days, and if any Interest
Period applicable to LIBOR Rate Advances would be for a shorter period,
such Interest Period shall not be available hereunder.
"INVESTMENT" shall mean: (a) any stock, evidence of
Indebtedness or other security of another Person; (b) any loan,
advance, contribution to capital, extension of credit (except for
current trade and customer accounts receivable for inventory sold or
services rendered in the ordinary course of business and payable in
accordance with customary trade terms) to another Person; (c) any
purchase of (i) stock or other securities of another Person or (ii) any
business or undertaking of another Person (whether by purchase of
assets or securities), or any commitment or option to make any such
purchase if, in the case of an option, the aggregate consideration paid
for such option was in excess of $100; or (d) the $3,200,000 used to
purchase the Florida Assets; or (e) any other investment, and whether
existing on the date of this Agreement or thereafter made. The term
"Investment" shall not include (i) ordinary advances to employees for
travel and similar expenses, to a maximum aggregate amount of
12
19
$75,000; (ii) the existing loan to Xxxxx X. Xxxxxx in an outstanding
principal balance of $150,000; and (iii) the acquisition (whether by
purchase of stock or assets) of any restaurant that becomes a Company
Restaurant.
"LIBOR PRICING OPTION" shall mean the option granted to the
Borrowers pursuant to Section 2.2 to have interest on all or a portion
of the Loans computed on the basis of the Applicable Saxet LIBOR Rate
or the Applicable URI LIBOR Rate, as the case may be, for an applicable
Interest Period.
"LIBOR RATE" shall mean for any Interest Period for any LIBOR
Rate Loan, the quotient of (a) the rate of interest determined by the
Bank, at about 11:00 a.m. (Boston, Massachusetts time) on the LIBOR
Rate Fixing Day as being the rate at which deposits in U.S. dollars are
offered to it by first-class banks in the London interbank market for
deposit for such Interest Period in amounts comparable to the aggregate
principal amount of LIBOR Rate Loans to which such Interest Period
relates, divided by (b) the difference between one (1) minus the
Reserve Requirement (expressed as a decimal) applicable to that
Interest Period. The LIBOR Rate shall be adjusted automatically as of
the effective date of any change in the Reserve Requirement.
"LIBOR RATE FIXING DAY" shall mean, in the case of a LIBOR
Rate Loan, the second Business Day preceding the Business Day on which
an Interest Period begins.
"LIBOR RATE LOAN" means any Loan hereunder upon which interest
will accrue on the basis of a formula including as a component thereof
the LIBOR Rate. The expiration date of any LIBOR Rate Loan shall mean
the last day of the Interest Period applicable to such LIBOR Rate Loan.
"LOAN" shall mean any loan made by the Banks to a Borrower
pursuant to Article 2 of this Agreement, including each Revolving
Credit Advance, the URI Term Loan and the Saxet Term Loan.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect
on the business, assets, properties, prospects or condition, financial
or otherwise, of (a) either Borrower, URC or PUC, or (b) URC and its
Subsidiaries taken as a whole.
"MAXIMUM CREDIT AMOUNT" shall mean as of any date of
determination, the lesser of (a) $26,600,000 or (b) the amount to which
the Maximum Credit Amount may have been reduced pursuant to Section
2.8; provided that if the obligation of the Banks to make further
Revolving Credit Advances is terminated pursuant to Article 10, the
Maximum Credit Amount as of any date of determination thereafter shall
be deemed to be $0.
13
20
"METLIFE NOTES" shall mean the $1,875,000 8.75% Note dated
December 23, 1996 of 0000 Xxxxxxxxxxxxx Xxxxx Corporation, the $825,000
8.75% Note dated December 23, 1996 of Saxet Corporation, the $900,000
8.75% Note dated December 23, 1996 of Saxet Corporation, the $675,000
8.75% Note dated January 30, 1997 of Saxet Corporation, and the
$825,000 8.75% Note dated February 27, 1997 of Saxet Corporation, each
payable to the order of MetLife Capital Financial Corporation and each
with a related Guaranty executed by URC.
"NOTES" shall mean the Revolving Credit Notes, the URI Term
Notes and the Saxet Term Notes.
"NOTICE OF BORROWING OR CONVERSION" -- See Section 2.2(a).
"OPERATING CASH FLOW" shall mean with reference to any period
and with respect to each Company Restaurant, (a) operating revenues for
such Company Restaurant for such period, MINUS (b) operating expenses
for such Company Restaurant for such period, PLUS (c) the sum of
depreciation and amortization expense and deferred rental expense
attributable to assets located at such Company Restaurant for such
period, all as determined in accordance with GAAP consistently applied,
PLUS (d) free rent and rent increases over the terms of leases
calculated using the straight line method.
"PENSION PLAN" shall mean an employee benefit plan or other
plan maintained for the employees of the Borrower or any of the Loan
Parties or any Subsidiary as described in Section 4021(a) of Title IV
of the Pension Reform Act.
"PENSION REFORM ACT" shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time.
"PERMITTED STOCK REPURCHASE" shall mean the purchase by URC of
shares of its common stock from time to time (a) from the proceeds of
Revolving Credit Advances up to a maximum aggregate amount of
$5,000,000 and (b) as otherwise approved by the Required Banks.
"PERSON" shall mean an individual, corporation, partnership,
joint venture, association, estate, joint stock company, trust,
organization, business, or a government or agency or political
subdivision thereof.
"PRIME RATE" shall mean the rate of interest from time to time
announced and made effective by the Agent as its "Prime Rate," it being
understood that such rate is a reference rate, not necessarily the
lowest, which serves as the basis upon which effective rates of
interest are calculated for obligations making reference thereto.
14
21
"PRIME RATE LOAN" shall mean any Loan hereunder upon which
interest will accrue on the basis of a formula including as a component
thereof the Prime Rate.
"REGULATION D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System from time to time in effect and
shall include any successor or other regulation or official
interpretation of such Board of Governors relating to reserve
requirements applicable to member banks of the Federal Reserve System.
"RENTAL OBLIGATIONS" shall mean with reference to any period,
the aggregate amount of all minimum or guaranteed net rentals for which
URC and its Subsidiaries are directly or indirectly liable (as lessee
or as guarantor or other surety) under all leases in effect at any time
during such period, including all amounts for which any Person was so
liable during such period accrued prior to the date such Person becomes
a Subsidiary or was merged or consolidated with URC or any of its
Subsidiaries.
"REPORTABLE EVENT" shall mean an event reportable to the
Pension Benefit Guaranty Corporation under Section 4043 of Title IV of
the Pension Reform Act.
"REQUIRED BANKS" shall mean Banks having made at least 51% of
the aggregate principal amount of the Loans outstanding, or, if no
Loans shall be outstanding, Banks holding at least 51% of the aggregate
Commitments; PROVIDED, HOWEVER, that if at any time one Bank holds more
than 51% of the outstanding Loans or Commitments, "Required Banks"
shall mean two or more Banks holding at least 51% of the outstanding
Loans or Commitments.
"RESERVE REQUIREMENT" shall mean the maximum aggregate reserve
requirement (including all basic, supplemental, marginal and other
reserves) which is imposed under Regulation D on the Banks against
"Euro-currency Liabilities" as defined in said Regulation D.
"REVOLVING CREDIT ADVANCE" shall mean any loan or extension of
credit from the Banks to URI pursuant to Section 2.1(a) of this
Agreement.
"REVOLVING CREDIT COMMITMENT" shall mean, as to any Bank, the
product of (a) the Maximum Credit Amount TIMES (b) such Bank's
Commitment Percentage.
"REVOLVING CREDIT NOTES" shall mean the Revolving Credit Notes
executed by URI in favor of each Bank substantially in the form of
EXHIBIT A-1 hereto to evidence the Revolving Credit Advances.
"REVOLVING CREDIT TERMINATION DATE" shall mean October 31,
2002.
15
22
"SAXET TERM LOAN" shall mean the term loan made by the Banks
to Saxet pursuant to Section 2.4(b) hereof.
"SAXET TERM LOAN MATURITY DATE" shall mean October 31, 2004.
"SAXET TERM NOTES" shall mean the Term Notes executed by Saxet
in favor of each Bank substantially in the form of EXHIBIT A-3 hereto
to evidence the Saxet Term Loan.
"SAXET MORTGAGE DOCUMENTS" shall mean (a) the Mortgages and
Security Agreements from Saxet to the Agent substantially in the form
of EXHIBIT G hereto, by which Saxet has granted or will grant to the
Agent to secure the Bank Obligations a mortgage of and security
interest in all Saxet Mortgaged Properties, (b) the Assignment of
Leases from Saxet to the Agent substantially in the form of EXHIBIT H
hereto relating to the Saxet Mortgaged Properties, (c) the title
insurance policies in favor of the Agent insuring a first mortgage
title with only exceptions reasonably satisfactory to the Agent, with
respect to the Saxet Mortgaged Properties, (d) to the extent currently
on file with Saxet or any of the Loan Parties, surveys or plot plans
with respect to the Saxet Mortgaged Properties, and (e) all related
documents and instruments delivered to the Agent with respect to the
Saxet Mortgaged Properties, all on terms and conditions acceptable to
the Agent.
"SAXET MORTGAGED PROPERTIES" shall mean the real properties
owned by Saxet listed on Schedule 3.1 attached hereto.
"SUBORDINATED INDEBTEDNESS" shall mean Indebtedness of any
Borrower which is subordinated to the Indebtedness of the Borrowers
hereunder, under the Notes and to all other Bank Obligations, on terms
and conditions approved in writing by the Required Banks.
"SUBSIDIARY" shall mean any Person of which URC or other
specified parent shall now or hereafter at the time own, directly or
indirectly through one or more Subsidiaries or otherwise, sufficient
voting stock (or other beneficial interest) to entitle it to elect at
least a majority of the board of directors or trustees or similar
managing body.
"TERM LOANS" shall mean the URI Term Loan and the Saxet Term
Loan.
"URI TERM LOAN" shall mean the loan made to URI by the Banks
pursuant to Section 2.4(a) of this Agreement.
"URI TERM LOAN MATURITY DATE" shall mean October 31, 2002.
16
23
"URI TERM NOTES" shall mean the Term Notes executed by URI in
favor of each Bank substantially in the form of Exhibit A-2 hereto to
evidence the URI Term Loan.
Section 1.2. ACCOUNTING TERMS. All accounting terms used and not
defined in this Agreement shall be construed in accordance with GAAP
consistently applied, and all financial data required to be delivered hereunder
shall be prepared in accordance with such principles. If any changes in
accounting principles are hereafter occasioned by promulgation of rules,
regulations, pronouncements or opinions by or are otherwise required by the
Financial Accounting Standards Board or the American Institute of Certified
Public Accountants (or successors thereto or agencies with similar functions),
and any of such changes results in a change in the method of calculation of, or
affect the results of calculation of, any of the financial covenants, standards
or terms found herein, then the parties hereto agree to enter into and
diligently pursue negotiations in order to amend such financial covenants,
standards or terms so as to reflect fairly and equitably such changes, with the
desired result that the criteria for evaluating the financial condition and
results of operations of URC and its Subsidiaries shall be the same after such
changes as if such changes had not been made. If the parties are unable to agree
upon the amendments to any such financial covenants, standards or terms, the
parties agree to submit any remaining disputes to an independent third-party
accounting firm (having no substantial relationship with any party) of national
recognition selected by such parties for a determination of the appropriate
amendments to such financial covenant, standard or term, which determination
shall be binding upon the parties.
ARTICLE 2. THE CREDITS
Section 2.1. THE REVOLVING CREDIT.
(a) Subject to the terms and conditions of this Agreement and
so long as there exists no Default, at any time prior to the Revolving Credit
Termination Date, the Banks shall severally make such Revolving Credit Advances
to URI as URI may from time to time request by notice to the Agent in accordance
with Section 2.2; PROVIDED that no Revolving Credit Advance shall exceed an
amount determined by subtracting (i) the aggregate outstanding balance of all
Revolving Credit Advances theretofore made by the Banks FROM (ii) the Maximum
Credit Amount; and PROVIDED FURTHER, that the aggregate outstanding Revolving
Credit Advances of any Bank shall at no time exceed the amount of such Bank's
Commitment Percentage of the Maximum Credit Amount.
Subject to the foregoing limitations and the provisions of Section 4.1
and 4.7 below, URI may borrow, repay and reborrow from the date of this
Agreement to the Revolving Credit Termination Date; provided that the Agent and
the Banks shall have the absolute right to refuse to make any Advances for so
long as there exists any Default or any other condition which would, upon the
making of such Revolving Credit Advance, constitute a Default. Any
17
24
Revolving Credit Advances not repaid by the Revolving Credit Termination Date
shall be due and payable on the Revolving Credit Termination Date.
(b) The Revolving Credit Advances shall be evidenced by the
Revolving Credit Notes payable to the order of each Bank. Each Revolving Credit
Note shall be in the original principal amount of the applicable Bank's
Commitment Percentage of the Maximum Credit Amount, shall be dated the Closing
Date, shall have the blanks therein appropriately completed, and shall have a
final maturity of the Revolving Credit Termination Date. Each Bank shall, and is
hereby irrevocably authorized by the Borrower to, enter on the schedule forming
a part of its Revolving Credit Note or otherwise in its records appropriate
notations evidencing the date and the amount of each Revolving Credit Advance
made by such Bank and the date and amount of each payment of principal made by
URI with respect thereto; and in the absence of manifest error, such notations
shall constitute conclusive evidence thereof. Each Bank is hereby irrevocably
authorized by URI to attach to and make a part of its Revolving Credit Note a
continuation of any such schedule as and when required. No failure on the part
of a Bank to make any notation as provided in this subsection (b) shall in any
way affect any Revolving Credit Advance or the rights or obligations of the Bank
or URI with respect thereto.
Section 2.2. NOTICE AND MANNER OF BORROWING OR CONVERSION OF REVOLVING
CREDIT ADVANCES.
(a) Whenever URI desires to obtain or continue a Revolving
Credit Advance hereunder or to convert an outstanding Revolving Credit Advance
into a Revolving Credit Advance of another type provided for in this Agreement,
URI shall notify the Agent (which notice shall be irrevocable) by telephone,
telecopy, telex or cable received no later than (i) 12:30 p.m. Boston time on
the date on which the requested Revolving Credit Advance is to be made or
continued as or converted to a Prime Rate Loan, and (ii) 12:30 p.m. Boston time
on the date two (2) Business Days before the day on which the requested
Revolving Credit Advance is to be made or continued as or converted to a LIBOR
Rate Loan. Each such notice shall be made to the Agent by an individual
purporting to be the President, Senior Vice President-Finance or Controller of
URI (or such other duly authorized representative of URI identified to the Agent
in writing), and shall specify (A) the effective date of each Revolving Credit
Advance or portion thereof to be continued or converted (which must be a
Business Day), (B) the amount of such Revolving Credit Advance (which must be a
minimum of $100,000 for a Prime Rate Loan and $500,000 and in increments of
$100,000 for a LIBOR Rate Loan), (C) the interest rate option to be applicable
thereto, and (D) the duration of the applicable Interest Period, if any (subject
to the provisions of the definition of Interest Period and Section 2.8). Each
such notification shall be immediately followed by a written confirmation
thereof by URI in substantially the form of EXHIBIT D attached hereto (a "Notice
of Borrowing or Conversion"), PROVIDED that if such written confirmation differs
in any material respect from the action taken by the Agent, the records of the
Agent shall control absent manifest error.
18
25
The Agent shall give the Banks notice of each Notice of Borrowing or
Conversion in accordance with the Agent's customary practice. URI agrees to
indemnify and hold the Agent and the Banks harmless for any action, including
the making of any Revolving Credit Advance hereunder, or loss or expense, taken
or incurred by the Agent or the Banks in good faith reliance upon any such
request.
(b) Subject to the terms and conditions of this Agreement, so
long as the Agent shall have provided the Banks with notice of each Notice of
Borrowing or Conversion prior to 2:00 p.m. on the date of the Agent's receipt of
such notice, each Bank shall make available by 3:00 p.m. on the effective date
of the requested Revolving Credit Advance, at the office of the Agent specified
in Section 15.3, in immediately available funds, such Bank's Commitment
Percentage of each Revolving Credit Advance . After the Agent's receipt of such
funds and upon fulfillment of the applicable conditions set forth in Article III
hereof, the Agent will credit such funds to URI's demand deposit account with
the Agent.
(c) Unless the Agent shall have received notice from a Bank
prior to the date of any Revolving Credit Advance that such Bank will not make
available to the Agent such Bank's Commitment Percentage of such Revolving
Credit Advance, the Agent may assume that such Bank has made such funds
available to the Agent on the date of such Revolving Credit Advance in
accordance with and as provided in this Section 2.2, and the Agent may, in
reliance upon such assumption (but shall have no obligation to) make available
on such date a corresponding amount to URI. If and to the extent any Bank shall
not have made its Commitment Percentage of any Revolving Credit Advance
available to the Agent and the Agent shall have made available a corresponding
amount to URI, such Bank agrees to pay to the Agent forthwith on demand, and URI
agrees to repay to the Agent within two (2) Business Days after demand (but only
after demand for payment has first been made to such Bank and such Bank has
failed to make such payment), an amount equal to such corresponding amount
together with interest thereon for each day from the date the Agent shall have
made such amount available to URI until the date such amount is paid or repaid
to the Agent, at an interest rate equal to the interest rate applicable to such
Revolving Credit Advance. If such Bank shall pay to the Agent such corresponding
amount, such amount so paid shall constitute such Bank's Revolving Credit
Advance for purposes of this Agreement. If URI makes a repayment required by the
foregoing provisions of this Section 2.2(c) and thereafter the applicable Bank
or Banks make the payments to the Agent required by this Section 2.2(c), the
Agent shall promptly refund the amount of the URI's payment.
(d) The failure of any Bank to make any Revolving Credit
Advance shall not relieve any other Bank of its obligation, if any, hereunder to
make its Commitment Percentage of such Revolving Credit Advance on the date of
such Revolving Credit Advance, but no Bank shall be responsible for the failure
of any other Bank to make the Revolving Credit Advance to be made by such other
Bank. Each bank shall be liable to the Borrowers for its failure to make any
Revolving Credit Advance in accordance with the terms hereof.
19
26
Section 2.3. INTEREST ON REVOLVING CREDIT ADVANCES. Subject to the
provisions of Section 2.6, URI shall pay interest on the unpaid balance of each
Revolving Credit Advance which is a Prime Rate Loan from time to time
outstanding at a per annum rate equal to the Applicable URI Prime Rate, and
shall pay interest on each Revolving Credit Advance which is a LIBOR Rate Loan
at a rate per annum equal to the Applicable URI LIBOR Rate. Interest on
Revolving Credit Advances which are Prime Rate Loans shall be payable in arrears
on the last day of each January, April, July and October, commencing January 31,
1998, and continuing until all of the Indebtedness of URI to the Banks hereunder
shall have been fully paid. Interest on Revolving Credit Advances which are
LIBOR Rate Loans shall be paid for the applicable Interest Period on the last
day thereof and when such LIBOR Rate Loan is due (whether at maturity, by reason
of acceleration or otherwise) and, if such Interest Period is longer than three
months, at intervals of three months after the first day thereof.
Section 2.4. THE TERM LOANS.
(a) Subject to the terms and conditions of this Agreement, the
Banks shall severally, in proportion to their Commitment Percentages, make to
URI a Term Loan in the aggregate amount of $8,400,000 on the Closing Date (the
"URI Term Loan"). The principal amount of the URI Term Loan shall be repaid in
20 quarterly installments on the last day of each January, April, July and
October, commencing January 31, 1998, in the amount of $420,000 each, with the
final payment together with all interest and other amounts due and payable with
respect thereto, due on October 31, 2002.
(b) Subject to the terms and conditions of this Agreement, the
Banks shall severally, in proportion to their Commitment Percentages, make to
Saxet a Term Loan in the aggregate amount of $20,000,000 on the Closing Date
(the "Saxet Term Loan"). The principal amount of the Saxet Term Loan shall be
repaid in 28 quarterly installments on the last day of each January, April, July
and October, commencing January 31, 1998, with the first 27 of such installments
in the amount of $500,000 each and the final installment in the amount of all
outstanding principal, together with all interest and other amounts due and
payable with respect thereto, due on October 31, 2004.
(c) The URI Term Loan shall be evidenced by the URI Term Notes
payable to the order of each Bank. Each URI Term Note shall be in the original
principal amount of the applicable Bank's Commitment Percentage of the aggregate
amount of the URI Term Loan, shall be dated the Closing Date and shall have the
blanks therein appropriately completed. The Saxet Term Loan shall be evidenced
by the Saxet Term Notes payable to the order of each Bank. Each Saxet Term Note
shall be in the original principal amount of the applicable Bank's Commitment
Percentage of the aggregate amount of the Saxet Term Loan, shall be dated the
Closing Date and shall have the blanks therein completed.
20
27
Section 2.5. INTEREST ON TERM LOANS.
(a) Subject to the provisions of Section 2.6, URI shall pay interest on
the unpaid balance of each portion of the URI Term Loan which is a Prime Rate
Loan from time to time outstanding at a per annum rate equal to the Applicable
URI Prime Rate and shall pay interest on each portion of the URI Term Loan which
is a LIBOR Rate Loan at a per annum rate equal to the Applicable URI LIBOR Rate.
(b) Subject to the provisions of Section 2.6, Saxet shall pay interest
on the unpaid balance of each portion of the Saxet Term Loan which is a Prime
Rate Loan from time to time outstanding at a per annum rate equal to the
Applicable Saxet Prime Rate, and shall pay interest on each portion of the Saxet
Term Loan which is a LIBOR Rate Loan at a per annum rate equal to the Applicable
Saxet LIBOR Rate.
(c) Interest on the portions of the Term Loans which are Prime Rate
Loans shall be payable in arrears on the last day of each January, April, July
and October commencing January 31, 1998 and continuing until all of the
Indebtedness of the Term Loans shall have been fully paid. Interest on the
portions of the Term Loans which are LIBOR Rate Loans shall be paid for the
applicable Interest Period on the last day thereof and when such LIBOR Rate Loan
is due (whether at maturity, by reason of acceleration or otherwise) and, if
such Interest Period is longer than three months, at intervals of three months
after the first day thereof.
Section 2.6. ADDITIONAL PAYMENTS. During the continuance of any Event
of Default, the Borrowers shall, on demand, pay to the Banks interest on the
unpaid principal balance of the Loans and, to the extent permitted by law, on
any overdue installments of interest, at a rate per annum equal to the
applicable interest rate on Loans hereunder plus two percent (2%).
Section 2.7. COMPUTATION OF INTEREST, ETC. Interest hereunder and under
the Notes shall be computed on the basis of a 360-day year for the number of
days actually elapsed. Any increase or decrease in the interest rate on the
Notes resulting from a change in the Prime Rate shall be effective immediately
from the date of such change. No interest payment or interest rate charged
hereunder shall exceed the maximum rate authorized from time to time by
applicable law. The outstanding amount of the Loans as reflected on the Agent's
and the Banks' records from time to time shall be considered correct and binding
on the Loan Parties (absent manifest error) unless within thirty (30) days after
receipt of any notice from the Agent or any Bank of such outstanding amount, the
Loan Parties notify the Agent or such Bank to the contrary.
Section 2.8. DURATION OF INTEREST PERIODS.
(a) Subject to the provisions of the definition of Interest
Period, the duration of each Interest Period applicable to a LIBOR Rate Loan
shall be as specified in the applicable Notice of Borrowing or Conversion. The
applicable Borrower shall have the option to elect an
21
28
Interest Period to be applicable to a LIBOR Rate Loan by delivering to the Agent
a Notice of Borrowing or Conversion evidencing such election received no later
than 10:00 a.m. Boston time on the date two (2) Business Days before the end of
the then applicable Interest Period if a LIBOR Rate Loan is to be continued as
or a Prime Rate Loan is to be converted to a LIBOR Rate Loan. Each such Notice
of Borrowing or Conversion shall specify (i) the effective date of each Loan or
portion thereof to be continued or converted to a LIBOR Rate Loan (which must be
a Business Day), (ii) the amount of such Loan (which must be a minimum of
$100,000 for a Prime Rate Loan and $500,000 and increments of $100,000 for a
LIBOR Rate Loan), (iii) the interest rate option to be applicable thereto, and
(iv) the duration of the applicable Interest Period, if any (subject to the
provisions of the definition of Interest Period).
(b) If the Agent does not receive a notice of election of
duration of an Interest Period for a LIBOR Rate Loan pursuant to subsection (a)
above within the applicable time limits specified therein, or if, when such
notice must be given, a Default exists, the applicable Borrower shall be deemed
to have elected to convert such LIBOR Rate Loan in whole into a Prime Rate Loan
on the last day of the then current Interest Period with respect thereto.
(c) Notwithstanding the foregoing, (i) URI may not select an
Interest Period applicable to any Revolving Credit Advance that would end, but
for the provisions of the definition of Interest Period, after the Revolving
Credit Termination Date, (ii) URI may not select an Interest Period applicable
to any portion of the URI Term Loan that would end, but for the provisions of
the definition of Interest Period, after the URI Term Loan Maturity Date, and
(iii) Saxet may not select an Interest Period applicable to any portion of the
Saxet Term Loan that would end, but for the provisions of the definition of
Interest Period, after the Saxet Term Loan Maturity Date.
Section 2.9. COMMITMENT FEE; AGENCY FEE, FACILITY FEE. For the period
from the Closing Date of this Agreement to the Revolving Credit Termination
Date, URI shall pay to the Agent, for the ratable account of the Banks, a
commitment fee (the "Commitment Fee") calculated at the Applicable Commitment
Fee Percentage on the difference between the Maximum Credit Amount and the
average daily principal amount of the Revolving Credit Advances outstanding from
time to time. The commitment fee shall be payable quarterly in arrears on the
last day of each January, April, July and October, commencing January 31, 1998.
The Borrowers, jointly and severally, will pay to the Agent an agent's fee on
the Closing Date and on each anniversary thereof as described in the Fee Letter.
Upon the closing of this Agreement, the Borrowers, jointly and severally, will
pay a $100,000 Facility Fee to be shared pro rata between Fleet and BKB.
Section 2.10. REDUCTION AND TERMINATION BY THE BORROWER. Subject to the
provisions of Section 4.7 hereof with respect to LIBOR Rate Loans, URI may, at
its option, at any time and from time to time prior to the Revolving Credit
Termination Date, reduce in part (in integral multiples of $500,000) or
terminate in whole the unused portion of the Maximum
22
29
Credit Amount on not less than five (5) Business Days' notice to the Agent by
telephone, telecopy, telex or cable, in each case confirmed immediately in
writing. After any such termination, URI may not reinstate the portion
terminated.
Section 2.11. INCREASED COSTS, ETC.
(a) Anything herein to the contrary notwithstanding, if any
changes in present or future applicable law (which term "applicable law", as
used in this Agreement, includes statutes and rules and regulations thereunder
and interpretations thereof by any competent court or by any governmental or
other regulatory body or official charged with the administration or the
interpretation thereof and requests, directives, instructions and notices at any
time or from time to time heretofore or hereafter made upon or otherwise issued
to the Banks by any central bank or other fiscal, monetary or other authority,
whether or not having the force of law), including without limitation any change
according to a prescribed schedule of increasing requirements, whether or not
known or in effect as of the date hereof, shall (i) subject any Bank to any tax,
levy, impost, duty, charge, fee, deduction or withholding of any nature with
respect to this Agreement or the payment to any Bank of any amounts due to it
hereunder, or (ii) materially change the basis of taxation of payments to the
Banks of the principal of or the interest on the Loans or any other amounts
payable to the Banks hereunder, or (iii) impose or increase or render applicable
any special or supplemental deposit or reserve or similar requirements or
assessment against assets held by, or deposits in or for the account of, or any
liabilities of, or loans by an office of any Bank in respect of the transactions
contemplated herein, or (iv) impose on any Bank any other condition or
requirement with respect to this Agreement or any Loan, and the result of any of
the foregoing is (A) to increase the cost to any Bank of making, funding or
maintaining all or any part of the Loans, or (B) to reduce the amount of
principal, interest or other amount payable to any Bank hereunder, or (C) to
require any Bank to make any payment or to forego any interest or other sum
payable hereunder, the amount of which payment or foregone interest or other sum
is calculated by reference to the gross amount of any sum receivable or deemed
received by such Bank from the Borrowers, jointly and severally, hereunder,
then, and in each such case not otherwise provided for hereunder, the Borrower
will upon demand made by such Bank promptly following the Bank's receipt of
notice pertaining to such matters accompanied by calculations thereof in
reasonable detail, pay to such Bank such additional amounts as will be
sufficient to compensate such Bank for such additional cost, reduction, payment
or foregone interest or other sum; provided that the foregoing provisions of
this sentence shall not apply in the case of any additional cost, reduction,
payment or foregone interest or other sum resulting from any taxes charged upon
or by reference to the overall net income, profits or gains of the Bank.
(b) Anything herein to the contrary notwithstanding, if,
after the date hereof, any Bank shall have determined that any applicable law,
rule, regulation, guideline, directive or request (whether or not having force
of law), including, without limitation, any change according to a prescribed
schedule of increasing requirements, whether now existing or hereafter in
effect, regarding capital requirements for banks or bank holding companies
23
30
generally, or any change therein or in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by such Bank
with any of the foregoing, either imposes a requirement upon the Bank to
allocate additional capital resources or increases the Bank's requirement to
allocate capital resources or the Bank's commitment to make, or to the Bank's
maintenance of, Loans hereunder, which has or would have the effect of reducing
the return on such Bank's capital to a level below that which such Bank could
have achieved (taking into consideration the Bank's then existing policies with
respect to capital adequacy and assuming full utilization of the Bank's capital)
but for such applicability, change, interpretation, administration or
compliance, by any amount deemed by such Bank to be material, such Bank shall
promptly after its determination of such occurrence give notice thereof to the
Borrowers. In such event, commencing on the date of such notice (but not earlier
than the effective date of any such applicability, change, interpretation,
administration or compliance), the fees payable hereunder to such Bank shall
increase by an amount which will, in such Bank's reasonable determination,
evidenced by calculations in reasonable detail furnished to the Borrowers,
compensate the Bank for such reduction, the Bank's determination of such amount
to be conclusive and binding upon the Loan Parties, absent manifest error. In
determining such amount, the Bank may use any reasonable methods of averaging,
allocating or attributing such reduction among its customers.
Section 2.12. AVAILABILITY OF LIBOR PRICING OPTION; CHANGED
CIRCUMSTANCES. In the event that:
(a) on any date on which the LIBOR Rate would otherwise
be set, the Agent shall have determined in good faith (which determination shall
be final and conclusive) that adequate and fair means do not exist for
ascertaining the LIBOR Rate; or
(b) at any time the Agent shall have determined in good
faith (which determination shall be final and conclusive and which determination
may not be based solely upon a change in the LIBOR Rate) that:
(i) the implementation of the LIBOR Pricing
Option has been made impracticable or unlawful by (A) the occurrence of
a contingency that materially and adversely affects the London
interbank market, or (B) compliance by the Agent in good faith with any
applicable law or governmental regulation, guideline or order or
interpretation or change thereof by any governmental authority charged
with the interpretation or administration thereof or with any request
or directive of any such governmental authority (whether or not having
the force of law); or
(ii) the LIBOR Rate shall no longer represent the
effective cost to the Banks for U.S. dollar deposits in the London
interbank market for deposits in which they regularly participate;
24
31
then, and in such event, the Agent shall forthwith so notify the Borrowers and
the Banks thereof (the "Changed Circumstances Notice"). Until the Agent notifies
the Borrowers that the circumstances giving rise to such notice no longer apply,
the obligation of the Agent and the Banks to allow election by the Borrowers of
a LIBOR Pricing Option shall be suspended. If at the time the Agent provides a
Changed Circumstances Notice to the Borrowers, a Borrower has previously given
the Agent a Notice of Borrowing or Conversion electing a LIBOR Rate Loan, but
such LIBOR Pricing Option has not yet gone into effect, such Notice of Borrowing
or Conversion shall automatically be deemed to be a request for a Prime Rate
Loan. Upon such date as shall be specified in the Changed Circumstance Notice
(which shall not be earlier than the date such notice is given) all outstanding
LIBOR Rate Loans shall automatically convert to Prime Rate Loans and, in the
event of an occurrence of the type specified in Section 2.12(b), the Borrowers
shall pay any amounts required to be paid pursuant to Section 4.7. The Agent
shall notify the Borrowers and the Banks at such time as the circumstances
giving rise to the Changed Circumstances Notice no longer apply.
Section 2.13. USE OF PROCEEDS. The proceeds of the initial
Revolving Credit Advance shall be used by URI exclusively to repay existing
Indebtedness under the 1994 Credit Agreement in excess of the amount incurred in
the Dutch Auction Issuer Tender Offer referred to below. The proceeds of all
subsequent Revolving Credit Advances shall be used by URI for general working
capital and ordinary corporate purposes, including the addition of new
restaurants to be owned by URI or any of its Subsidiaries and to fund advances
to UFI and PUC to be used for their respective general working capital and
ordinary corporate purposes as and to the extent permitted hereunder and for
making advances to URC for the Permitted Stock Repurchase. The proceeds of the
URI Term Loan shall be used by URI to refinance that amount of Indebtedness
under the 1994 Credit Agreement incurred to purchase stock of URC in July, 1997
under a so-called "Dutch Auction Issuer Tender Offer". The proceeds of the Saxet
Term Loan shall be distributed by Saxet to URI to repay Indebtedness owed to URI
and used by URI to refinance Indebtedness under the 1994 Credit Agreement, the
proceeds of which were used, directly or indirectly, to fund the acquisition by
Saxet of the Saxet Mortgaged Properties. None of URI, Saxet or any of their
Subsidiaries will, directly or indirectly, use any part of such proceeds for the
purpose of purchasing or carrying any margin stock within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System, except for
a Permitted Stock Repurchase and the Dutch Auction Issuer Tender Offer referred
to above or to extend credit to any Person for the purpose of purchasing or
carrying any such margin stock, or to purchase or lease any real property for
use other than in connection with the conduct of the business in which they are
engaged on the date of this Agreement.
Section 2.14. GUARANTIES.
(a) GUARANTIES OF BANK OBLIGATIONS. For value received
and hereby acknowledged and as an inducement to the Banks to make the Loans
available to the Borrowers, each of the Guarantors (including the Borrowers)
hereby unconditionally guaranties
25
32
to the Agent and the Banks (i) the full and punctual payment when due, whether
at stated maturity, by acceleration or otherwise, of all Bank Obligations of the
Borrowers, and (ii) the performance and observance by the Borrowers of all of
their obligations under this Agreement and each other Bank Agreement and all
agreements, warranties and covenants applicable to the Borrowers in this
Agreement and all other applicable Bank Agreements (collectively, the
"Guarantied Obligations").
(b) GUARANTIES ABSOLUTE. Each of the Guarantors hereby
guaranties that the Guarantied Obligations will be paid strictly in accordance
with the terms of any instruments evidencing such Guarantied Obligations,
regardless of any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of the Agent or any Bank
with respect thereto. The liability of each of the Guarantors under this
Guaranty with regard to the Guarantied Obligations shall, to the extent
permitted by law, be absolute and unconditional irrespective of:
(i) any lack of validity or enforceability of
this Agreement or any other Bank Agreement with respect to any other
Loan Party;
(ii) any change in the time, manner or place of
payment of, or in any other term of, all or any of the Guarantied
Obligations or any other amendment or waiver of or any consent to
departure from any of the terms of any Bank Agreement;
(iii) any exchange, release or non-perfection of a
lien on any collateral for the Guarantied Obligations, or any release
or amendment or waiver of or consent to departure from any other
guaranty for all or any part of the Guarantied Obligations;
(iv) any change in ownership of any of the Loan
Parties;
(v) any acceptance of any partial payment(s)
from any Borrower; or
(vi) any other circumstance which might otherwise
constitute a defense available to, or a discharge of, any of the Loan
Parties in respect of the Guarantied Obligations.
The Guaranties set forth in this Section 2.14 shall continue to be
effective or be reinstated, as the case may be, if at any time any payment of
any of the Guarantied Obligations is rescinded or must otherwise be returned by
the Agent or any Bank upon the insolvency, bankruptcy or reorganization of any
of the Loan Parties, or otherwise, all as though such payment had not been made.
(c) EFFECTIVENESS, ENFORCEMENT. The Guaranties set forth
in this Section 2.14 shall be effective and shall be deemed to be made as of the
date of this Agreement. No
26
33
invalidity, irregularity or unenforceability by reason of any bankruptcy or
similar law, or any law or order of any government or agency thereof purporting
to reduce, amend or otherwise affect any liability of any of the Loan Parties,
and no defect in or insufficiency or want of powers of any of the Loan Parties
or irregular or improperly recorded exercise thereof, shall impair, affect, be a
defense to or claim against these Guaranties. These Guaranties are continuing
Guaranties and shall (i) survive any termination of this Agreement, and (ii)
remain in full force and effect until payment in full of, and performance of all
Guarantied Obligations and all other amounts payable under these Guaranties.
These Guaranties are made for the benefit of the Agent and the Banks and their
respective successors and assigns, and may be enforced from time to time as
often as occasion therefor may arise and without requirement on the part of the
Agent or any Bank first to exercise any rights against the Borrowers or the
Affiliate Guarantors or to exhaust any remedies available to them against the
Borrowers or the Affiliate Guarantors or to resort to any other source or means
of obtaining payment of any of the Guarantied Obligations or to elect any other
remedy.
(d) WAIVER. To the extent permitted by law, each of the
Guarantors hereby waives promptness, diligence, notice of acceptance and any
other notice with respect to any of the Guarantied Obligations and these
Guaranties and any requirement that the Agent or the Banks protect, secure,
perfect or otherwise take action to ensure any security interest or lien on any
property subject thereto (if any) or exhaust any right or take any action
against any other Guarantors, any Affiliate Guarantor, or any other Person or
any collateral for the Guarantied Obligations. Each of the Guarantors also
irrevocably waives, to the fullest extent permitted by law, all defenses which
at any time may be available to it in respect of the Guarantied Obligations by
virtue of any statute of limitation, valuation, stay, moratorium law or other
similar law now or hereafter in effect.
(e) SUBORDINATION; SUBROGATION RIGHTS. Until the payment and
performance in full of all Bank Obligations: (i) none of the Guarantors shall
exercise any rights against a Borrower or any other Guarantor arising as a
result of payment by such Guarantor under these Guaranties; (ii) none of the
Guarantors will prove any claim in competition with the Agent or the Banks in
respect of any payment hereunder in bankruptcy or insolvency proceedings of any
nature; (iii) none of the Guarantors will claim any set-off or counterclaim
against a Borrower or any other Guarantor in respect of any liability of such
Guarantor to a Borrower or such other Guarantor; and (iv) each Guarantor hereby
waives any benefit of and any right to participate in collateral which may be
held by the Agent or the Banks (if any). The payment of any amounts due with
respect to any Indebtedness of the Borrowers or any other Loan Party now or
hereafter held by any of the Guarantors (the "Affiliate Subordinated
Indebtedness") is hereby subordinated to the prior payment in full of the Bank
Obligations in the manner set forth in this paragraph. Each Borrower and each of
the Guarantors agrees that after the occurrence of any Default, neither Borrower
nor any other Loan Party shall, directly or indirectly, make any payment on
account of the Affiliate Subordinated Indebtedness, or demand, xxx for, or
otherwise attempt to collect any such Affiliate Subordinated Indebtedness until
the Guarantied Obligations shall have been paid in full. If, notwithstanding the
foregoing
27
34
sentence, any Guarantor shall, after the occurrence of any Default, collect or
receive any amounts in respect of such Affiliate Subordinated Indebtedness, such
amounts shall be collected and received by such Guarantor as trustee for the
Agent and the Banks and shall be paid over to the Agent on account of the
Guarantied Obligations without affecting in any manner the liability of such
Guarantor under the other provisions of its Guaranty.
(f) LIABILITY OF LOAN PARTIES; ADDITIONAL GUARANTIES. The
Guaranties established under this Section 2.14 are unlimited as to each
Guarantor, and each Guarantor shall be jointly and severally liable with each
other and with any other guarantor of the Bank Obligations, in respect of the
Guarantied Obligations. These Guaranties shall be separate and in addition to
any and all other Guaranties of the Guarantied Obligations, including, without
limitation, the Affiliate Guaranty Agreements.
(g) To the extent that any applicable law (including but not
limited to applicable laws pertaining to fraudulent conveyance or fraudulent
transfer) would render the full amount of any Loan Party's obligations under
this Section 2.14 invalid or unenforceable, such Loan Party's obligations
hereunder shall be limited to the maximum amount which does not result in such
invalidity or unenforceability.
ARTICLE 3. CONDITIONS OF THE CREDITS
Section 3.1. CONDITIONS TO FIRST REVOLVING CREDIT ADVANCE AND TERM
LOANS. The Banks' obligations to make the first Revolving Credit Advance and the
Term Loans shall be subject to compliance by the Loan Parties with their
respective agreements contained in this Agreement, and to the condition
precedent that the Banks shall have received each of the following, in form and
substance satisfactory to the Banks and the Agent's counsel or in the form
attached hereto as an Exhibit, as the case may be:
(a) the Notes duly executed by the Borrower in favor of each
Bank;
(b) the Affiliate Guaranty Agreement duly executed by each of
the Affiliate Guarantors;
(c) The Saxet Mortgage Documents with respect to those of the
Saxet Mortgaged Properties indicated on Schedule 3.1 in form and substance
satisfactory to the Agent.
(d) copies of the resolutions of the Board of Directors of
each of the Loan Parties and each of the Affiliate Guarantors authorizing the
execution, delivery and performance of this Agreement, the Notes, the Affiliate
Guaranty Agreement, the Saxet Mortgage Documents and the other Bank Agreements
to which each of them is a party,
28
35
certified by the Secretary or an Assistant Secretary (or Clerk or Assistant
Clerk) of each such corporation (which certificate shall state that such
resolutions are in full force and effect);
(e) a certificate of the Secretary or an Assistant Secretary
(or Clerk or Assistant Clerk) of each of the Loan Parties and each of the
Affiliate Guarantors certifying the name and signatures of the officers of each
such corporation authorized to sign this Agreement, the Notes, the Affiliate
Guaranty Agreement, the Saxet Mortgage Documents and the other Bank Agreements
to which each such corporation is a party and the other documents to be
delivered by the Loan Parties hereunder;
(f) certificates of legal existence or good standing for each
of the Loan Parties and each of the Affiliate Guarantors issued by the
appropriate Delaware, Massachusetts and other governmental authorities;
(g) the opinion of Brown, Rudnick, Freed & Gesmer, counsel to
the Loan Parties and the Affiliate Guarantors, dated the date of execution of
this Agreement, in substantially the form of EXHIBIT C hereto;
(h) a certificate of duly authorized officers of each of the
Loan Parties, dated the date of execution of this Agreement, to the effect that
(i) the representations and warranties of the Loan Parties herein and in all
other Bank Agreements are true and correct as of the date hereof, (ii) all
conditions precedent on the part of each of the Loan Parties to the execution
and delivery hereof and of all other Bank Agreements have been satisfied, and
(iii) upon execution and delivery of this Agreement and all other Bank
Agreements no Default will exist hereunder or thereunder; and
(i) payment of the accrued interest and commitment fees under
the 1994 Credit Agreement to the Closing Date;
(j) a Form U-1 executed by URI in form acceptable to the
Agent;
(k) payment of the Facility Fee in accordance with Section 2.9
hereof and the Agency Fee and the Arrangement Fee as described in the Fee
Letter; and
(l) such other documents, certificates and opinions as the
Agent or any Bank may reasonably request.
Section 3.2. CONDITIONS TO ALL LOANS. The Banks' obligation to make any
Revolving Credit Advance pursuant to this Agreement, or to continue any Loan as,
or convert any Loan to, a LIBOR Rate Loan, shall be subject to compliance by
each of the Loan Parties with its respective agreements contained in this
Agreement and each other Bank Agreement, and to the satisfaction, at or before
the making, continuation or conversion of such Revolving Credit Advance or Loan,
of all of the following conditions precedent:
29
36
(a) The representations and warranties herein and
those made by or on behalf of the Loan Parties and the Affiliate
Guarantors in any other Bank Agreement shall be correct in all material
respects as of the date on which any Revolving Credit Advance is made
or any such Loan is continued or converted, with the same effect as if
made at and as of such time (except as to transactions permitted
hereunder and except that the references in Article 5 to the 1996
Financial Statements shall be deemed to refer to the most recent annual
financial statements furnished to the Banks pursuant to Section 6.2
hereof);
(b) On the date of making, continuing or converting
any Revolving Credit Advance or Loan as described above, there shall
exist no Default; and
(c) The making, continuation or conversion of the
requested Revolving Credit Advance as described above, shall not be
prohibited by any law or governmental order or regulation applicable to
the Banks, the Agent or the Borrower and all necessary consents,
approvals and authorizations of any Person (other than the Banks) for
any such Revolving Credit Advance shall have been obtained.
The request by the Borrower for the making, continuation or
conversion of each Revolving Credit Advance or Loan as provided above,
and the acceptance by the Borrower of each such Revolving Credit
Advance and of each such continuation or conversion of such Loan, shall
be deemed a representation and warranty by the Borrower that the
conditions specified above in this Section 3.2 have been satisfied.
ARTICLE 4. PAYMENT AND REPAYMENT
Section 4.1. MANDATORY PAYMENTS.
(a) If at any time the Maximum Credit Amount shall be
less than the aggregate outstanding principal balance of the Revolving Credit
Advances made hereunder, URI shall immediately repay to the Agent for the
account of the Banks an amount equal to said difference.
(b) The Borrowers will make all required principal
payments on the Term Loans on the dates when due.
Section 4.2. VOLUNTARY PREPAYMENT. The Borrowers may make
prepayments to the Agent for the account of the Banks of any outstanding
principal amount of the Loans which are Prime Rate Loans at any time prior to
12:30 p.m. (Boston, Massachusetts time) on any Business Day without premium or
penalty. The Borrowers may make prepayments to the Agent for the account of the
Banks of any outstanding principal amount of Loans which are
30
37
LIBOR Rate Loans at any time prior to 12:30 p.m. (Boston, Massachusetts time) on
any Business Day, subject, however, to the premiums and penalties set forth in
Section 4.7.
Section 4.3. PAYMENT AND INTEREST CUTOFF. Notice of each prepayment
pursuant to Section 4.2 shall be given to the Agent (a) in the case of
prepayment of Prime Rate Loans, not later than 12:00 noon (Boston, Massachusetts
time) on the date of payment, and (b) in the case of prepayment of LIBOR Rate
Loans on any day other than the last day of the Interest Period applicable
thereto, not later than 12:00 noon (Boston, Massachusetts time) one Business Day
prior to the proposed date of payment, and, in each case, shall specify the
total principal amount of the Loans to be paid on such date. Notice of
prepayment having been given in compliance with this Section 4.3, the amount
specified to be prepaid shall become due and payable on the date specified for
prepayment and from and after said date (unless the Borrowers shall default in
the payment thereof) interest thereon shall cease to accrue. Unpaid interest on
the principal amount of any Loan so prepaid accrued to the date of prepayment
shall be due on the date of prepayment.
Section 4.4. PAYMENT OR OTHER ACTIONS ON NON-BUSINESS DAYS. Whenever
any payment to be made hereunder shall be stated to be due on a day other than a
Business Day such payment shall be made on the next succeeding Business Day, and
such extension of time shall in such case be included in the computation of
payment of interest or Commitment Fees, as the case may be. In the case of any
other action the last day for performance of which shall be a day other than a
Business Day, the date for performance shall be extended to the next succeeding
Business Day.
Section 4.5. METHOD AND TIMING OF PAYMENTS.
(a) All payments required to be made pursuant to the
provisions of this Agreement and any other Bank Agreement, and all mandatory
prepayments pursuant to Section 4.1, may be charged by the Agent against the
Borrowers' accounts with the Agent, for the account of the respective Banks in
proportion to their respective Commitment Percentages hereunder. Each Loan Party
hereby authorizes the Agent and the Banks, without notice to the Loan Parties,
to charge against any account of the Loan Parties with the Agent or such Bank an
amount equal to the accrued interest, principal and other amounts from time to
time due and payable to the Agent and the Banks hereunder and under all other
Bank Agreements.
(b) Each Borrower shall make each payment to be made by it
hereunder not later than 12:30 p.m. (Boston time) on the day when due in lawful
money of the United States to the Agent at its address set forth in Section 15.3
in immediately available funds. The Agent will, after its receipt thereof,
distribute like funds relating to the payment of principal, interest or any
other amounts payable hereunder ratably to the Banks. Any payment made by the
Borrowers to the Agent under this Agreement or under the Notes in the manner
provided in this Agreement shall be deemed to be a payment to each of the
respective Banks.
31
38
Section 4.6. SHARING OF PAYMENTS, ETC. If any Bank shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of the Loans in excess of its ratable share of
payments in respect thereof, such Bank shall forthwith purchase from each other
Bank such participations in the Loans held by such other Banks as shall be
necessary to cause such purchasing Bank to share the excess payment ratably with
each other Bank; PROVIDED, HOWEVER, that if all or any portion of such excess
payment is thereafter recovered from such purchasing Bank, such purchase from
each Bank shall be rescinded and each Bank shall repay to the purchasing Bank
the purchase price to the extent of such recovery together with an amount equal
to such Bank's ratable share (according to the proportion of (i) the amount of
such Bank's required repayment to (ii) the total amount so recovered from the
purchasing Bank) of any interest or other amount paid or payable by the
purchasing Bank in respect of the total amount so recovered. Each Borrower
agrees that any Bank so purchasing a participation from another Bank pursuant to
this Section 4.6 may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of set-off) with respect to such
participation as fully as if such Bank were the direct creditor of each Borrower
in the amount of such participation.
Section 4.7. PAYMENTS NOT AT END OF INTEREST PERIOD. If a Borrower for
any reason makes any payment of principal with respect to any LIBOR Rate Loan on
any day other than the last day of the Interest Period applicable to such LIBOR
Rate Loan, including without limitation by reason of acceleration, or fails to
borrow a LIBOR Rate Loan after electing a LIBOR Pricing Option with respect
thereto pursuant to Section 2.2(a) or 2.8, the Borrowers, jointly and severally,
shall pay to the Agent, for the account of the Banks, an amount computed
pursuant to the following formula:
L = (R - T) X P X D
---------------
360
L = amount payable to the Agent
R = interest rate on such LIBOR Rate Loan
T = effective interest rate per annum at which any readily
marketable bond or other obligation of the United States,
selected in the Agent's sole discretion, maturing on or near
the last day of the then applicable Interest Period of such
LIBOR Rate Loan and in approximately the same amount as such
LIBOR Rate Loan can be purchased by the Agent on the day of
such payment of principal or failure to borrow
P = the amount of principal prepaid or the amount of the requested
LIBOR Rate Loan
D = the number of days remaining in the Interest Period as of the
date of such payment or the number of days of the requested
Interest Period
The Borrowers shall pay such amount upon presentation by the Agent of a
statement setting forth the amount and the Agent's calculation thereof pursuant
hereto, which statement shall be deemed true and correct absent manifest error.
32
39
ARTICLE 5. REPRESENTATIONS AND WARRANTIES
In order to induce the Banks to enter into this Agreement and make the
Loans as contemplated hereby, the Loan Parties hereby make the following
representations and warranties:
Section 5.1. CORPORATE EXISTENCE, GOOD STANDING, ETC. URC and each of
its Subsidiaries is a corporation, or in the case of Pizzeria Uno Massachusetts
Business Trust, a Massachusetts business trust, duly organized, validly existing
and in good standing under the laws of the jurisdiction in which it is
organized, and has corporate power to own its properties and conduct its
business as now conducted and as proposed to be conducted by it. Each of the
Loan Parties has the corporate power to enter into and perform this Agreement
and all other Bank Agreements to which each of them is a party, and, in the case
of the Borrowers, to execute and deliver the Notes. Each Subsidiary has the
corporate power to enter into and perform each Bank Agreement to which it is a
party. Certified copies of the charter documents and By-Laws of each of the Loan
Parties and each Affiliate Guarantor have been delivered to the Agent and are
true, accurate and complete as of the date hereof.
Section 5.2. PRINCIPAL PLACE OF BUSINESS; LOCATION OF RECORDS. The
principal place of business of the Borrowers and each other Loan Party is
located at 000 Xxxxxxx Xxxx Xxxx, Xxxx Xxxxxxx, XX 00000. All of the books and
records or true and complete copies thereof relating to the accounts and
contracts of the Borrowers and each Loan Party are and will be kept at such
location.
Section 5.3. QUALIFICATION. URC and each of its Subsidiaries is duly
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction where its ownership or leasing of properties or the conduct of
its business requires it to be qualified, except where the failure to be so
qualified would not have a Material Adverse Effect.
Section 5.4. SUBSIDIARIES. URC's Subsidiaries and their respective
jurisdiction of incorporation are listed in SCHEDULE 5.4, and all of the issued
and outstanding capital stock of each such Subsidiary is owned by URC, UHC or
URI, as listed in SCHEDULE 5.11.
Section 5.5. CORPORATE POWER. The execution, delivery and performance
of this Agreement, the Notes and all other Bank Agreements and other documents
delivered by the Loan Parties or any Subsidiary to the Bank, and the incurrence
of Indebtedness to the Bank hereunder or thereunder:
(a) are within the corporate powers of each Loan Party and
each Affiliate Guarantor, as the case may be, having been duly authorized by its
Board of Directors or other similar governing body, and, if required by law, by
its charter documents or by its By-Laws, by its stockholders;
33
40
(b) do not require any approval or consent of, or filing
with, any governmental agency or other Person (or such approvals and consents
have been obtained and delivered to the Agent) and are not in contravention of
law or the terms of the charter documents or By-Laws of any Loan Party or any
Affiliate Guarantor or any amendment thereof; and
(c) do not
(i) result in a breach of or constitute a
default under any indenture or loan or credit agreement or any
other agreement, lease or instrument to which any Loan Party
or any Affiliate Guarantor is a party or by which any Loan
Party or any Affiliate Guarantor or any of their respective
properties are bound or affected, which gives any Person the
right (immediately or upon the giving of notice, the passage
of time, or otherwise) to accelerate any material amount of
Indebtedness or terminate any material right of URC or any
Subsidiary,
(ii) result in, or require, the creation or
imposition of any mortgage, deed of trust, pledge, lien,
security interest or other charge or encumbrance of any nature
on any property now owned or hereafter acquired by any Loan
Party or any Affiliate Guarantor, except as provided in the
Bank Agreements, or
(iii) result in a violation of or default under
any law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award, now in effect having
applicability to any Loan Party or any Affiliate Guarantor, or
to any of their respective properties.
Section 5.6. VALID AND BINDING OBLIGATIONS. This Agreement, the
Notes, and all the other Bank Agreements executed in connection herewith and
therewith constitute, the valid and binding obligations of the Loan Parties and
their Subsidiaries party thereto, as the case may be, enforceable in accordance
with their respective terms, except as the enforceability thereof may be subject
to bankruptcy, insolvency, moratorium and other laws affecting the rights and
remedies of creditors and secured parties and to the exercise of judicial
discretion in accordance with general equitable principles.
Section 5.7. OTHER AGREEMENTS. Except for the agreements, leases
and instruments listed under Part IV, Item 14(a)(3) of the URC Annual Report on
Form 10-K for the fiscal year ended September 29, 1996 and under each of the
three subsequent Quarterly Reports on Form 10-Q filed by URC and except for the
transactions contemplated by URC Schedule 13E- 4, neither URC nor any of its
Subsidiaries is a party to any indenture, loan or credit agreement, or any lease
or other agreement or instrument, or subject to any charter or corporate
restriction, which is likely to have a Material Adverse Effect or a material
adverse effect on the ability of URC or any such Subsidiary to carry out any of
the provisions of this
34
41
Agreement, the Notes or any of the Bank Agreements executed in connection
herewith and therewith.
Section 5.8. PAYMENT OF TAXES. URC and each of its Subsidiaries has
filed all tax returns which are required to be filed by them and have paid, or
made adequate provision for the payment of, all taxes which have or may become
due pursuant to said returns or to assessments received. All federal tax returns
of URC and its Subsidiaries through their fiscal year ended in 1993 have been
audited by the Internal Revenue Service, are not subject to such audit by virtue
of the expiration of the applicable period of limitation, and except as
described in SCHEDULE 5.8, the results of such audits are fully reflected in the
balance sheet contained in the 1996 Financial Statements. URC knows of no
material additional assessments since such date for which adequate reserves
appearing in the balance sheet contained in the 1996 Financial Statements have
not been established. URC and its Subsidiaries have made adequate provisions for
all current taxes, and in the opinion of URC, except as described in SCHEDULE
5.8, there will not be any additional assessments for any fiscal periods prior
to and including that which ended on the date of said balance sheet in excess of
the amounts reserved therefor.
Section 5.9. FINANCIAL STATEMENTS. All balance sheets, statements and
other financial information furnished to the Banks in connection with this
Agreement and the transactions contemplated hereby (each of which is listed on
SCHEDULE 5.9), including, without limitation, the 1996 Financial Statements and
the preliminary draft financial statements for the year ended September 28, 1997
(the "1997 Draft Financial Statements"), have been prepared in accordance with
GAAP consistently applied throughout the periods involved and present fairly the
consolidated financial condition of URC and its Subsidiaries and all such
information so furnished is true, correct and complete, except with respect to
the 1997 Draft Financial Statements which may be subject to normal adjustments
before they are finalized and any other interim statements, which will be
subject to normal recurring year-end adjustments.
Section 5.10. OTHER MATERIALS FURNISHED. All material written
information, exhibits, memoranda or reports furnished by or on behalf of URC or
its Subsidiaries to the Banks in connection with the negotiation of this
Agreement is set forth in SCHEDULE 5.10. None of such materials contains any
material misstatement of fact or omits to state a material fact or any fact
necessary to make the statements contained therein not misleading.
Section 5.11. STOCK. There are presently issued by URC and its
Subsidiaries and outstanding the shares of capital stock indicated on SCHEDULE
5.11. URC and its Subsidiaries have received the consideration for which such
stock was authorized to be issued and have otherwise complied with all legal
requirements relating to the authorization and issuance of shares of stock and
all such shares have been duly authorized, validly issued and are fully paid and
non-assessable. URC and its Subsidiaries have no other capital stock of any
class outstanding.
35
42
Section 5.12. CHANGES IN CONDITION. Except as set forth in SCHEDULE
5.12, since the date of the latest balance sheet listed on SCHEDULE 5.9, there
has been no material adverse change in the business or assets or in the
condition, financial or otherwise, of URC and its Subsidiaries taken as a whole,
and neither URC nor any such Subsidiary has entered into any transaction outside
of the ordinary course of business which is material to URC, or to URC and its
Subsidiaries taken as a whole. Except as set forth in SCHEDULE 5.12, neither URC
nor any of its Subsidiaries has any known contingent liabilities which are not
referred to in such balance sheet and which are material to URC and its
Subsidiaries taken as a whole.
Section 5.13. ASSETS, LICENSES, ETC.
(a) URC and its Subsidiaries have good and marketable title
to, or valid leasehold interests in, all of their assets, real and personal,
including the assets carried on its books and reflected in the latest balance
sheet listed on SCHEDULE 5.9, subject to no liens, charges or encumbrances,
except for (i) liens, charges and encumbrances described in SCHEDULE 5.13(A) or
permitted by Section 9.2 hereof, none of which individually or in the aggregate
materially impair or diminish the value of the asset or its ability to be used
for its intended purpose, and (ii) assets sold, abandoned or otherwise disposed
of in the ordinary course of business.
(b) URC and its Subsidiaries possess all licenses, permits,
franchises, patents, copyrights, trademarks and trade names, or rights thereto,
necessary to conduct their business substantially as now conducted and as
presently proposed to be conducted. URC has provided the Agent with a list of
its and its Subsidiaries patents, trademarks, tradenames and material franchises
(the "Material Rights"). URC and its Subsidiaries have no obligation to
compensate any third party for the use of the Material Rights, and to the best
knowledge of the Loan Parties, URC and its Subsidiaries are not in violation of
any valid rights of others with respect to any of the foregoing.
(c) As of the date of this Agreement, the location of each
Company Restaurant, the location of each restaurant operated by a Franchisee,
the month and year each such restaurant opened, the name and address of each
Franchisee, and the date each became a Franchisee, are set forth on SCHEDULE
5.13(C) hereto.
Section 5.14. LITIGATION. Except as described on SCHEDULE 5.14 hereto,
there is no litigation, at law or in equity, or any proceeding before any
federal, state, provincial or municipal board or other governmental or
administrative agency pending or, to the knowledge of URC, threatened, which
involves a material risk of any judgment or liability not fully covered by
insurance and which, if adversely determined, would result in a Material Adverse
Effect, and no judgment, decree, or order of any federal, state, provincial or
municipal court, board or other governmental or administrative agency has been
issued against URC or any of its Subsidiaries which has or may have a Material
Adverse Effect.
36
43
Section 5.15. PENSION PLANS. As of the date hereof, URC and its
Subsidiaries have no Pension Plan subject to the minimum funding or termination
insurance provisions of the Pension Reform Act.
Section 5.16. OUTSTANDING INDEBTEDNESS. The outstanding amount of
Indebtedness for borrowed money, including Capitalized Lease Obligations, of URC
and its Subsidiaries as of the date hereof, is correctly set forth in SCHEDULE
5.16 hereto or permitted hereunder, and said Schedule correctly lists the credit
agreements, guaranties, leases and other instruments pursuant to which such
Indebtedness has been incurred and all security interests securing such
Indebtedness.
Section 5.17. ENVIRONMENTAL MATTERS. Except as set forth in
SCHEDULE 5.17 hereto.
(a) To its knowledge, none of URC, any of its Subsidiaries or
any operator of any of their respective properties is in violation, or, to the
Loan Parties' knowledge, is in alleged violation, of any Environmental Law,
which violation would have a Material Adverse Effect.
(b) Neither URC nor any of its Subsidiaries has received
written notice from any third party, including without limitation any federal,
state, county, or local governmental authority, (i) that it has been identified
as a potentially responsible party under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 as amended ("CERCLA") or any
equivalent state law, with respect to any site or location; (ii) that any
hazardous waste, as defined in 42 U.S.C. ss. 6903(5), any hazardous substances,
as defined in 42 U.S.C. ss. 9601(14), any pollutant or contaminant, as defined
in 42 U.S.C. ss. 9601(33), or any toxic substance, oil or hazardous materials or
other chemicals or substances regulated by any Environmental Laws ("Hazardous
Substances") which it has generated, transported or disposed of, has been found
at any site at which a federal, state, county, or local agency or other third
party has conducted or has ordered URC, any Subsidiary or another third party or
parties (e.g. a committee of potentially responsible parties) to conduct a
remedial investigation, removal or other response action pursuant to any
Environmental Law; or (iii) that it is or shall be a named party to any claim,
action, cause of action, complaint (contingent or otherwise) or legal or
administrative proceeding arising out of any actual or alleged release or
threatened release of Hazardous Substances. For purposes of this Agreement,
"release" means any past or present releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, disposing or
dumping of Hazardous Substances into the environment.
(c) To the best of each Loan Party's knowledge: (i) URC, each
of its Subsidiaries and each operator of any real property owned or operated by
URC or any Subsidiary is in compliance, in all material respects, with all
provisions of the Environmental Laws relating to the handling, manufacturing,
processing, generation, storage or disposal of any Hazardous Substances; (ii) no
portion of property owned, operated or controlled by URC or any Subsidiary has
been used for the handling, manufacturing, processing, generation,
37
44
storage or disposal of Hazardous Substances except in accordance with applicable
Environmental Laws; (iii) there have been no releases or threatened releases of
Hazardous Substances on, upon, into or from any property owned, operated or
controlled by URC or any of its Subsidiaries, which releases could have a
Material Adverse Effect; (iv) there have been no releases of Hazardous
Substances on, upon, from or into any real property in the vicinity of the real
properties owned, operated or controlled by URC or any of its Subsidiaries
which, through soil or groundwater contamination, may have come to be located on
the properties of URC or any Subsidiary, which releases could have a Material
Adverse Effect; (v) there were no releases of Hazardous Substances on, upon,
from or into any real property formerly but no longer owned, operated or
controlled by URC or its Subsidiaries at the time of such ownership, operation
or control, which releases could have a Material Adverse Effect; .
(d) None of the properties of URC or any of its Subsidiaries
is or shall be subject to any applicable environmental cleanup responsibility
law or environmental restrictive transfer law or regulation by virtue of the
transactions set forth herein and contemplated hereby.
Section 5.18. FOREIGN TRADE REGULATIONS. Neither URC nor any of its
Subsidiaries is (a) a person included within the definition of "designated
foreign country" or "national" of a "designated foreign country" in Executive
Order No. 8389, as amended, in Executive Order No. 9193, as amended, in the
Foreign Assets Control Regulations (31 C.F.R., Chapter V, Part 500, as amended),
in the Cuban Assets Control Regulations of the United States Treasury Department
(31 C.F.R., Chapter V, Part 515, as amended) or in the Regulations of the Office
of Alien Property, Department of Justice (8 C.F.R., Chapter II, Part 507, as
amended) or within the meanings of any of the said orders or regulations, or of
any regulations, interpretations, or rulings issued thereunder, or in violation
of said Orders or regulations or of any regulations, interpretations or rulings
issued thereunder; or (b) an entity listed in Section 520.101 of the Foreign
Funds Control Regulations (31 C.F.R., Chapter V, Part 520, as amended).
Section 5.19. GOVERNMENTAL REGULATIONS. None of URC, any of its
Subsidiaries or any corporation controlling URC or under common control with URC
is subject to regulation under the Public Utility Holding Company Act of 1935,
the Federal Power Act, the Investment Company Act of 1940, or is a common
carrier under the Interstate Commerce Act, or is subject to any statute or
regulation which regulates the incurring by URC of indebtedness for borrowed
money, including statutes or regulations relating to common or contract carriers
or to the sale of electricity, gas, steam, water, telephone or telegraph or
other public utility services.
Section 5.20. MARGIN STOCK. Neither URC nor any of its Subsidiaries
owns any "margin stock" within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System, or any regulations, interpretations or
rulings thereunder, nor is URC or any such Subsidiary engaged principally or as
one of its important activities in extending credit
38
45
which is used for the purpose of purchasing or carrying margin stock. None of
the proceeds of the Loan will be used, directly or indirectly, to purchase or
carry any such "margin stock" except as described in Section 2.13.
Section 5.21 SAXET MORTGAGED PROPERTIES. Schedule 5.21 sets forth a
description of all real properties owned by Saxet on the Closing Date.
ARTICLE 6. REPORTS
Section 6.1. INTERIM FINANCIAL STATEMENTS AND REPORTS.
(a) As soon as available, and in any event within forty-five
(45) days after the end of the first three fiscal quarters of each fiscal year
of URC, URC shall furnish the Agent and the Banks with (i) consolidated and
consolidating balance sheets of URC and its Subsidiaries as of the end of such
quarter and consolidated and consolidating statements of income and cash flow of
URC and its Subsidiaries for such quarter and for the period commencing at the
end of the previous fiscal year and ending with the end of such quarter, setting
forth in each case in comparative form the corresponding figures for the
corresponding period of the preceding fiscal year, all in reasonable detail and
prepared in accordance with GAAP consistently applied (subject to the absence of
footnotes and ordinary year end adjustments), and (ii) a Compliance Certificate.
(b) As soon as available, and in any event within forty-five
(45) days after the end of each fiscal quarter of URC, URC shall furnish the
Agent and the Banks with statements of operations and cash flow for such fiscal
quarter for each pizzeria restaurant location operated by URC and its
Subsidiaries, such statements to be prepared in reasonable detail, in accordance
with GAAP consistently applied (subject to the absence of footnotes and ordinary
year-end adjustments) and on a restaurant by restaurant basis.
Section 6.2. ANNUAL FINANCIAL STATEMENTS. As soon as available, but in
any event within ninety (90) days after the end of each fiscal year of URC, URC
shall furnish to the Agent and the Banks (i) a consolidated balance sheet of URC
and its Subsidiaries as of the end of such fiscal year and consolidated
statements of income, shareholders' equity and cash flow of URC and its
Subsidiaries for such fiscal year, in each case reported on by Ernst & Young LLP
or other independent certified public accountants of recognized national
standing, which report shall express, without reliance upon others, a positive
opinion regarding the fairness of the presentation of such financial statements
in accordance with GAAP consistently applied, said report to be without
qualification, except in cases of unresolved litigation and accounting changes
with which such accountants concur, and (ii) a Compliance Certificate.
Section 6.3. NOTICE OF DEFAULTS. As soon as possible, and in any event
within five (5) days after the occurrence of each Default, the Loan Parties
shall furnish the Agent and the
39
46
Banks with the statement of their respective chief executive officer or chief
financial officer setting forth details of such Default and the action which the
Loan Parties have taken or propose to take with respect thereto.
Section 6.4. NOTICE OF LITIGATION. Promptly after the commencement
thereof, the Loan Parties shall furnish the Agent and the Banks written notice
of all actions, suits and proceedings before any court or governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, to which URC or any of its Subsidiaries is a party or directly
affecting any of their respective properties, which, if adversely determined,
would have a Material Adverse Effect.
Section 6.5. COMMUNICATIONS WITH OTHERS. At all times that the stock of
URC is traded publicly, URC shall furnish the Agent and the Banks with copies of
all regular, periodic and special reports and all registration statements which
URC files with the Securities and Exchange Commission or any governmental
authority which may be substituted therefor, or with any national or regional
securities exchange.
Section 6.6. REPORTABLE EVENTS. At any time that URC or any Subsidiary
has a Pension Plan, the Loan Parties shall furnish to the Agent and the Banks,
as soon as possible, but in any event within thirty (30) days after any Loan
Party knows or has reason to know that any Reportable Event with respect to any
Pension Plan has occurred, the statement of its chief executive officer or chief
financial officer setting forth the details of such Reportable Event and the
action which URC or any Subsidiary has taken or proposes to take with respect
thereto, together with a copy of the notice of such Reportable Event to the
Pension Benefit Guaranty Corporation.
Section 6.7. ANNUAL PENSION REPORTS. At any time that URC or any
Subsidiary has a Pension Plan, the Loan Parties shall furnish to the Agent and
the Banks, promptly after the filing thereof with the Secretary of Labor or the
Pension Benefit Guaranty Corporation, copies of each annual report which is
filed with respect to each Pension Plan for each plan year, including:
(a) a statement of assets and liabilities of such Pension Plan
as of the end of such plan year and statements of changes in fund balance and in
financial position, or a statement of changes in net assets available for plan
benefits, for such plan year;
(b) an opinion of Ernst & Young LLP (or other independent
certified public accountants of recognized standing) relating to such Pension
Plan to the extent that any such opinion for the Pension Plan is required by
law; and
(c) an actuarial statement of such Pension Plan applicable to
such plan year, together with an opinion of an enrolled actuary of recognized
standing, to the extent that any such statement and/or opinion for the Pension
Plan is required by law.
40
47
Section 6.8. REPORTS TO OTHER CREDITORS. Promptly after filing the
same, each Loan Party shall furnish to the Agent and the Banks copies of any
compliance certificate and other information furnished to any other holder of
the securities (including debt obligations) of URC or any Subsidiary pursuant to
the terms of any indenture, loan or credit or similar agreement and not
otherwise required to be furnished to the Agent and the Banks pursuant to any
other provision of this Agreement.
Section 6.9. MANAGEMENT LETTERS. Promptly after the receipt thereof,
URC shall furnish to the Agent and the Banks copies of any written
recommendations concerning the management, finances, financial controls, or
operations of URC and its Subsidiaries received from URC's independent public
accountants.
Section 6.10. ENVIRONMENTAL REPORTS. The Loan Parties shall provide the
Agent and the Banks: (a) not later than ten (10) days after written notice
thereof, notice of any enforcement actions, or, to the knowledge of the Loan
Parties, threatened enforcement actions affecting the Loan Parties or any
Subsidiary by any Governmental Authority related to Environmental Laws; (b)
copies, promptly after they are received, of all orders, notices of
responsibility, notices of violation, notices of enforcement actions, and
assessments, and other written communications pertaining to any such orders,
notices, claims and assessments received by the Loan Parties or any Subsidiary
from any Governmental Agency; (c) not later than seven (7) days after written
notice thereof, notice of any civil claims or, to the knowledge of the Loan
Parties, threatened civil claims affecting the Loan Parties or any Subsidiary by
any third party alleging any violation of Environmental Laws; (d) copies of all
cleanup plans, site assessment reports, response plans, remedial proposals, or
other submissions of the Loan Parties or any Subsidiary, other third party
(e.g., committee of potentially responsible parties at a Superfund site), or any
combination of same, submitted to a Governmental Agency in response to any
communication referenced in subsections (a) and (b) herein as soon as possible
and in any event within five (5) Business Days after their submission to such
Governmental Agency; and (e) from time to time, on request of the Agent,
evidence satisfactory to the Agent of URC's and its Subsidiaries' insurance
coverage, if any, for any environmental liabilities.
Section 6.11. METLIFE NOTES. The Loan Parties shall notify the Agent in
advance of any modification, amendment or waiver of any of the provisions of any
of the MetLife Notes and, promptly upon execution thereof, shall furnish to the
Agent and the Banks copies of any such modifications, amendments or waivers. As
soon as possible, and in any event within five (5) Business Days after the
occurrence of an event of default under any of the MetLife Notes, the Loan
Parties shall furnish the Agent and the Banks with the statement of their
respective chief executive officer or chief financial officer setting forth
details of such default and the action which the Loan Parties have taken or
propose to take with respect thereto.
Section 6.12. ANNUAL PROJECTIONS. Within 90 days after the end of each
fiscal year of URC and its Subsidiaries, the Borrower shall furnish to the Agent
and the Banks consolidated financial projections for URC and its Subsidiaries
for the then current fiscal year in form
41
48
consistent with the Long Range Plan dated August 19, 1997 previously delivered
by the Borrower to the Agent.
Section 6.13. MISCELLANEOUS. The Loan Parties shall provide the Agent
and the Banks with such other information as the Agent or any Bank may from time
to time reasonably request respecting the business, properties, condition or
operations, financial or otherwise, of URC and its Subsidiaries.
ARTICLE 7. FINANCIAL RESTRICTIONS
On and after the date hereof, until all of the Bank Obligations shall
have been paid in full and the Banks shall have no commitments to lend
hereunder, the Loan Parties shall observe the following covenants:
Section 7.1. CONSOLIDATED TANGIBLE NET WORTH. URC will at all times
maintain Consolidated Tangible Net Worth in an amount not less than the sum of
(i) $67,000,000, PLUS (ii) 50% of the sum of Consolidated Net Income (0% in the
case of a deficit) for each fiscal quarter ending after September 28, 1997, PLUS
(iii) 100% of the net proceeds received by URC in connection with any offering
of its capital stock LESS (iv) the amounts expended by URI on Permitted Stock
Repurchases.
Section 7.2. CASH FLOW COVERAGE RATIO. URC and its Subsidiaries shall
maintain a ratio of Consolidated Adjusted EBITDA to the sum of (i) Consolidated
Total Debt Service, PLUS (ii) Consolidated Capital Expenditures, PLUS (iii) all
cash dividends paid by URC on its capital stock, PLUS (iv) all taxes paid by URC
and its Subsidiaries in cash, for each four fiscal quarter period ending during
the periods indicated below, of not less than the ratio set forth opposite each
such period:
Date/Period Ratio
----------- -----
Closing Date through the date preceding
Fiscal Year End 1998 0.75:1.0
Fiscal Year End 1998 through
the date preceding Fiscal Year End 2000 0.90:1.0
Fiscal Year End 2000
and Thereafter 1.00:1.0
Section 7.3. RATIO OF CONSOLIDATED LIABILITIES TO CONSOLIDATED
TANGIBLE NET WORTH. URC shall at all times maintain a ratio of Consolidated
Liabilities to Consolidated Tangible
42
49
Net Worth of not more than (a) 1.15:1.0 at all times through the end of the 1998
fiscal year and (b) 1.0:1.0 at all times thereafter.
Section 7.4. PROFITABILITY. URC shall earn Consolidated Net Income in
each fiscal quarter of not less than $1.
Section 7.5. OPERATING CASH FLOW. For each four fiscal quarter period,
commencing with the period ending September 28, 1997, total Operating Cash Flow
for all Company Restaurants having negative Operating Cash Flow shall not exceed
2% of total Operating Cash Flow of all Company Restaurants for each such period.
For purposes of calculating total Operating Cash Flow there shall be excluded
from all such calculations Operating Cash Flow for any Company Restaurant(s)
which have been in operation less than two full fiscal quarters. Operating Cash
Flow for any new Company Restaurant in operation for more than two full fiscal
quarters shall be determined (i) for the initial four quarter period including
such new Company Restaurant's third full fiscal quarter of operation, by
annualizing Operating Cash Flow for such Company Restaurant for such third
quarter, (ii) for the initial four quarter period including such new Company
Restaurant's third and fourth full fiscal quarters of operation, by annualizing
Operating Cash Flow for such Company Restaurant for such third and fourth
quarters, and (iii) for any four quarter period thereafter, by reference to the
four fiscal quarters of operation of such new Company Restaurant then ended.
Section 7.6. CONSOLIDATED LEVERAGE RATIO. URC and its Subsidiaries
shall at all times during the periods set forth below maintain a Consolidated
Leverage Ratio of not more than the ratio set forth opposite each such period:
Date/Period Ratio
----------- -----
Closing Date through the date preceding
Fiscal Year End 1998 2.50:1.0
Fiscal Year End 1998 through the date
preceding Fiscal Year End 1999 2.20:1.0
Fiscal Year End 1999 through the date
preceding Fiscal Year End 2000 2.00:1.0
Fiscal Year End 2000 through the
date preceding Fiscal Year End 2001 1.90:1.0
Fiscal Year End 2001 through
the date preceding Fiscal Year End 2002 1.70:1.0
Fiscal Year End 2002 and
43
50
thereafter 1.50:1.0
Section 7.7. CONSOLIDATED ADJUSTED EBITDA. URC and its Subsidiaries'
Consolidated Adjusted EBITDA for each four fiscal quarter period shall not be
less than (a) $22,000,000 for the four-quarter period ending September 28, 1997,
and (b) for each subsequent four-quarter period, the greater of (i) $22,000,000
or 90% of actual Consolidated Adjusted EBITDA as of the end of the previous
four-quarter period.
ARTICLE 8. AFFIRMATIVE COVENANTS
On and after the date hereof, until all of the Bank Obligations shall
have been paid in full and the Banks shall have no commitment hereunder, each
Loan Party covenants that it and each of its Subsidiaries will comply with the
following covenants and provisions:
Section 8.1. EXISTENCE AND BUSINESS. URC and each of its Subsidiaries
will (a) preserve and maintain its corporate existence and qualify and remain
qualified as a foreign corporation in each jurisdiction in which such
qualification is required, except where the failure so to qualify would not have
a Material Adverse Effect and except that URC Holding Company, Inc. shall be
allowed to dissolve, (the "UHC Liquidation") provided that such UHC Liquidation
does not have a Material Adverse Effect, (b) maintain and preserve in full force
and effect all material rights, licenses, patents and franchises, reasonably
necessary or advisable to the conduct of its business, (c) comply with all valid
and applicable statutes, rules and regulations necessary for the conduct of
business, except where the failure so to comply would not have a Material
Adverse Effect, and (d) engage only in the businesses which it is conducting on
the date of this Agreement.
Section 8.2. TAXES AND OTHER OBLIGATIONS. URC and each of its
Subsidiaries (a) will pay and discharge, or cause to be paid and discharged, at
or prior to the time the same shall become due and payable all material taxes,
assessments and other governmental charges, imposed upon it and its properties,
sales and activities, or upon the income or profits therefrom, as well as the
claims for labor, materials, or supplies which if unpaid might by law become a
lien or charge upon any of its properties, and (b) will promptly pay or cause to
be paid when due, or in conformance with customary trade terms, all lease
obligations, trade debt and all other Indebtedness incident to its operations;
provided, however, that URC and any Subsidiary may contest any such charges or
claims in good faith so long as (i) an adequate reserve therefor has been
established and is maintained if and as required by generally accepted
accounting principles and (ii) no action to foreclose any lien with respect
thereto has been commenced. URC and each of its Subsidiaries shall cause all
applicable federal, state, local and franchise tax returns and all amounts due
thereunder to be filed and paid when due.
Section 8.3. MAINTENANCE OF PROPERTIES AND LEASES. URC and each of its
Subsidiaries shall maintain, keep and preserve all of its tangible properties,
real, personal or otherwise, in
44
51
good repair and working order, ordinary wear and tear excepted and URC and each
of its Subsidiaries shall maintain, keep and preserve all of its rights in its
intangible properties. URC and each of its Subsidiaries shall replace and
improve its properties as necessary for the conduct of its business. URC and
each of its Subsidiaries shall comply in all material respects with all leases
naming it as lessee if non-compliance therewith would have a Material Adverse
Effect.
Section 8.4. INSURANCE. URC and each of its Subsidiaries (a) will keep
its principal assets which are of an insurable character insured by financially
sound and reputable insurers against loss or damage by fire, explosion or
hazards, by extended coverage in an amount not less than 80% of the insurable
value of the property insured, and (b) will maintain with financially sound and
reputable insurers insurance against other hazards and risks and liability to
persons and property to the extent and in the manner as requested by the Agent,
and in any event as customary for companies in similar businesses similarly
situated; PROVIDED, HOWEVER, that URC and its Subsidiaries may effect workmen's
compensation insurance or similar coverage with respect to operations in any
particular state or other jurisdiction through an insurance fund operated by
such state or jurisdiction and may also be a self-insurer with respect to
workmen's compensation and with respect to group medical benefits under any
medical benefit plan. On request of the Agent from time to time, the Loan
Parties will render to the Agent a statement in reasonable detail as to all
insurance coverage required by this Section. A description of the material
elements of insurance coverage of URC and its Subsidiaries as of the date hereof
is set forth on SCHEDULE 8.4.
Section 8.5. RECORDS, ACCOUNTS AND PLACES OF BUSINESS. URC and each of
its Subsidiaries shall maintain comprehensive and accurate records and accounts,
including reserves, in accordance with generally accepted accounting principles
consistently applied. URC and each of its Subsidiaries will promptly notify the
Agent of (a) any changes in the places of business of URC and its Subsidiaries
and (b) any additional places of business which may arise hereafter.
Section 8.6. INSPECTION. At any reasonable time and from time to time,
the Loan Parties shall permit the Agent, the Banks and any of their agents or
representatives to examine and make copies of and abstracts from the records and
books of account of, and visit the properties of, the Loan Parties and their
Subsidiaries and to discuss the affairs, finances and accounts of the Loan
Parties and their Subsidiaries with any of their respective officers or
directors and with their independent accountants.
Section 8.7. CHANGE IN OFFICERS OR DIRECTORS. URC will promptly notify
the Agent in writing if there occurs any change in the present executive
officers or directors of any of the Loan Parties.
Section 8.8. MAINTENANCE OF ACCOUNTS. The Loan Parties shall maintain
the Agent as their principal depository for their operating, concentration and
disbursement accounts. The
45
52
Borrower and the Affiliate Guarantors may maintain depository accounts with
other banks for operation of Company Restaurants, provided that all excess funds
maintained in such accounts shall be deposited with the Agent within two (2)
Business Days after deposit in such accounts.
Section 8.9. ACCESS TO INDEPENDENT PUBLIC ACCOUNTANTS. At any
reasonable time and from time to time, URC shall provide the Agent, the Banks
and any of their agents or representatives access to the independent public
accountants of URC to discuss URC's financial condition, including, without
limitation any recommendations of such independent public accountants concerning
the management, finances, financial controls or operations of URC and its
Subsidiaries.
Section 8.10 EXECUTION OF SAXET MORTGAGE DOCUMENTS. Saxet will, on or
before January 31, 1998, execute and deliver Saxet Mortgage Documents
substantially in the form of the Saxet Mortgage Documents attached as Exhibit G,
but for differences required by local laws, on terms and conditions reasonably
acceptable to the Agent and Saxet in order to grant the Agent a first perfected
mortgage on and security interest in all Saxet Mortgaged Properties. In
addition, Saxet will cause to be delivered to the Agent, by January 31, 1998,
the opinions of Brown, Rudnick, Freed & Gesmer, or other counsel reasonably
acceptable to the Agent, as to the execution and enforceability of the Saxet
Mortgage Documents and such other related matters as reasonably requested by the
Agent.
ARTICLE 9. NEGATIVE COVENANTS
On and after the date hereof, until all of the Bank Obligations shall
have been paid in full and the Banks shall have no commitment to lend hereunder,
each Loan Party covenants that neither it nor any of its Subsidiaries will:
Section 9.1. RESTRICTIONS ON INDEBTEDNESS. Create, incur, suffer or
permit to exist, or assume or guarantee, either directly or indirectly, or
otherwise become or remain liable with respect to, any Indebtedness, except the
following:
(a) Indebtedness of URC and its Subsidiaries referred to in
SCHEDULE 5.16;
(b) Indebtedness on account of Consolidated Current
Liabilities (other than for money borrowed) incurred in the normal and ordinary
course of business;
(c) Indebtedness in respect of (i) taxes, assessments,
governmental charges or levies and claims for labor, materials and supplies to
the extent that payment thereof shall not at the time be required to be made in
accordance with the provisions of Section 8.2 hereof, (ii) judgments or awards
which have been in force for less than the applicable appeal period so long as
execution is not levied thereunder or in respect of which URC or any Subsidiary
shall at the time in good faith be prosecuting an appeal or proceedings for
review and in respect of
46
53
which a stay of execution shall have been obtained pending such appeal or
review, and (iii) endorsements made in connection with the deposit of items for
credit or collection in the ordinary course of business;
(d) Subordinated Indebtedness;
(e) Guarantees permitted under Section 9.5;
(f) other Indebtedness in an aggregate amount not to exceed
$7,500,000, so long as on the date URC or any Subsidiary becomes liable with
respect to such other Indebtedness and immediately after giving effect thereto
and to the concurrent retirement of any other Indebtedness, there shall be no
Default hereunder; and
(g) Indebtedness to the Agent and Banks hereunder and under
the Notes and the other Bank Agreements.
Section 9.2. RESTRICTION ON LIENS. Create or incur or suffer to be
created or incurred or to exist any encumbrance, mortgage, pledge, lien, charge
or other security interest of any kind upon any of its property or assets of any
character, whether now owned or hereafter acquired, or transfer any of such
property or assets for the purposes of subjecting the same to the payment of
Indebtedness or performance of any other obligation in priority to payment of
its general creditors, or acquire or agree or have an option to acquire any
property or assets upon conditional sale or other title retention agreement,
device or arrangement (including Capitalized Leases) or suffer to exist for a
period of more than 30 days after the same shall have been incurred any
Indebtedness against it which if unpaid might by law or upon bankruptcy or
insolvency, or otherwise, be given any priority whatsoever over its general
creditors, or sell, assign, pledge or otherwise transfer for security any of its
accounts, contract rights, general intangibles, or chattel paper (as those terms
are defined in the Massachusetts Uniform Commercial Code) with or without
recourse; PROVIDED, HOWEVER, that the Loan Parties and any Subsidiary may create
or incur or suffer to be created or incurred or to exist:
(a) Existing liens and security interests described in
SCHEDULE 5.13 securing presently outstanding Indebtedness permitted by
Section 9.1(a);
(b) Purchase money security interests (which term shall
include mortgages, conditional sale contracts, Capitalized Leases and all other
title retention or deferred purchase devices) to secure the purchase price of
property acquired hereafter by any Loan Party or Subsidiary, or to secure
Indebtedness incurred solely for the purpose of financing such acquisitions;
PROVIDED, HOWEVER, that no such purchase money security interests shall extend
to or cover any property other than the property the purchase price of which is
secured by it, and that the principal amount of Indebtedness (whether or not
assumed) with respect to each item of property subject to such a security
interest shall not exceed the fair value of such item on the date of its
acquisition;
47
54
(c) Deposits or pledges made in connection with, or to secure
payment of, workmen's compensation, unemployment insurance, old age pensions or
other social security; liens in respect of judgments or awards to the extent
such judgments or awards are permitted as Indebtedness by the provisions of
Section 9.1(c); and liens for taxes, assessments or governmental charges or
levies and liens to secure claims for labor, material or supplies to the extent
that payment thereof shall not at the time be required to be made in accordance
with Section 8.2;
(d) Encumbrances in the nature of zoning restrictions,
easements, and rights or restrictions of record on the use of real property
which do not materially detract from the value of such property or impair its
use in the business of the owner or lessee;
(e) Liens (other than judgments and awards) created by or
resulting from any litigation or legal proceeding, provided the execution or
other enforcement thereof is effectively stayed and the claims secured thereby
are being actively contested in good faith by appropriate proceedings;
(f) Liens arising by operation of law to secure landlords,
lessors or renters under leases or rental agreements made in the ordinary course
of business and confined to the premises or property rented;
(g) Liens in favor of the Agent for the benefit of the Banks
securing the Bank Obligations; and
(h) Mortgage liens on real property owned by the Loan Parties
or any Subsidiary securing Indebtedness permitted under Section 9.1(h).
Nothing contained in this Section 9.2 shall permit any Loan Party or
any Subsidiary to incur any Indebtedness or take any other action or permit to
exist any other condition to exist which would be in contravention of any other
provision of this Agreement.
Section 9.3. INVESTMENTS. Have outstanding or hold or acquire or make
or commit itself to acquire or make any Investment except the following:
(a) Investments having a maturity of less than one year from
the date thereof in: (i) obligations of the Banks; (ii) obligations of the
United States of America or any agency or instrumentality thereof; (iii)
repurchase agreements involving securities described in clauses (i) and (ii)
with the Banks; and (iv) commercial paper which is rated not less than prime-one
or A-1 or their equivalents by Xxxxx'x Investor Service, Inc. or Standard &
Poor's Corporation, respectively, or their successors;
(b) readily marketable preferred stock commonly referred to as
either "auction rate preferred stock" or "money market preferred stock" having
on its date of
48
55
acquisition a rating of either A- or higher from Standard & Poor's Corporation
or A-3 or higher from Xxxxx'x Investors Service, Inc.;
(c) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof (i) maturing within one year from the date of
acquisition thereof (PROVIDED that there shall be no maximum maturity
restriction with respect to so-called "variable rate demand notes" whose
interest rate is adjusted at least annually to reflect market changes such that
the adjusted interest rate parallels the interest rate assumptions underlying
the initial interest rate of such obligations), and (ii) having on its date of
acquisition a rating of either A- or higher from Standard & Poor's Corporation
or A-3 or higher from Xxxxx'x Investors Service, Inc.;
(d) Existing Investments of the Loan Parties in their
Subsidiaries;
(e) Investments consisting of intercompany advances between
the Borrowers and UFI; PROVIDED, HOWEVER, that at no time shall the net "due
from" account on the books of the Borrowers, adjusted to exclude non-cash
royalty charges, exceed $4,000,000, with respect to UFI;
(f) Investments in Subsidiaries which are Affiliate
Guarantors;
(g) Investments consisting of loans provided to employees of
URC and its Subsidiaries in an aggregate amount outstanding at any one time not
in excess of $75,000; and
(h) The amount paid for the Florida Assets up to $3,200,000.
Section 9.4. DISPOSITIONS OF ASSETS. Sell, lease or otherwise dispose
of any assets except for (a) the sale, lease or other disposition of inventory
or other property (not including receivables) in the ordinary course of
business, or (b) so long as no Default exists or would result on an actual or
pro forma basis after giving effect thereto, other sales of assets so long as
the earnings before interest, taxes, depreciation and amortization attributable
to the assets to be sold, together with the earnings before interest, taxes,
depreciation and amortization attributable to all other assets sold, leased,
contributed or conveyed in the ordinary course of business pursuant to Section
9.4(a) during the then current fiscal year does not exceed 10% of Consolidated
Adjusted EBITDA for the fiscal year immediately preceding the then current
fiscal year.
Section 9.5. ASSUMPTIONS, GUARANTIES, ETC. OF INDEBTEDNESS OF OTHER
PERSONS. Assume, guarantee, endorse or otherwise be or become directly or
contingently liable (including, without limitation, by way of agreement,
contingent or otherwise, to purchase, provide funds for payment, supply funds to
or otherwise invest in any Person or otherwise assure the creditors of any such
Person against loss) in connection with any Indebtedness of any other Person;
except the following:
49
56
(a) Guaranties existing on the date of this Agreement,
including the Guaranties related to the MetLife Notes, each described in
SCHEDULE 9.5, and additional Guarantees of Indebtedness of Franchisees incurred
in the ordinary course of business, provided that the maximum amount of
Indebtedness to which all Guarantees under this Subsection 9.5(a) relate does
not exceed, in the aggregate, $6,000,000;
(b) Guaranties by endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary course of
business;
(c) Guaranties in favor of the Agent for the account of the
Banks; and
(d) Guaranties of Indebtedness or Rental Obligations of its
Subsidiaries.
Section 9.6. MERGERS, ETC. Enter into any merger or consolidation with
or acquire all or substantially all of the assets of any Person, or sell,
assign, lease or otherwise dispose of (whether in one transaction or in a series
of transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to any Person, except that:
(a) URC and its Subsidiaries may acquire new restaurants
(whether through the purchase of stock or assets), so long as no Default has
occurred and continues to exist hereunder or would, after giving effect to such
acquisition, occur;
(b) URC and its Subsidiaries may engage in transactions
permitted under Section 9.4 hereof; and
(c) So long as no Default has occurred and continues to exist
hereunder or would, after giving effect to such transaction, occur, (i) UFI, PUC
and any Subsidiary of the Borrowers may consolidate with or merge into the
Borrower or any other wholly-owned Subsidiary of the Borrowers so long as in any
merger involving the Borrowers, the Borrowers shall be the surviving
corporations, (ii) the Borrowers and any Subsidiary of the Borrowers may acquire
all or substantially all of the assets of any other Subsidiary of the Borrowers,
(iii) UFI, PUC and any Subsidiary of the Borrowers may sell, assign, lease or
otherwise dispose of all or substantially all of its assets to the Borrowers or
any other wholly-owned Subsidiary of the Borrowers, (iv) UFI, PUC, URC, UHC and
any of their Subsidiaries may consolidate with or merge into any of UFI, PUC,
URC, UHC and any other wholly-owned Subsidiary of such entities (v) UFI, PUC,
URC, UHC and any of their wholly-owned Subsidiaries may acquire all or
substantially all of the assets of UFI, PUC, URC, UHC or any of their
Subsidiaries, (vi) UFI, PUC, URC, UHC and any of their Subsidiaries may sell,
assign, lease or otherwise dispose of all or substantially all of its assets to
UFI, PUC, URC, UHC and any of their wholly-owned Subsidiaries, and (vii) URI and
any Subsidiary of URI may acquire all or substantially all of the assets of UHC
upon the UHC Liquidation.
50
57
Section 9.7. PENSION REFORM ACT. At any time while URC or any of its
Subsidiaries has a Pension Plan, permit any accumulated funding deficiency to
occur with respect to any Pension Plan or other employee benefit plans
established or maintained by URC or any such Subsidiary or to which
contributions are made by URC or any such Subsidiary (the "Plans"), and which
are subject to the Pension Reform Act and the rules and regulations thereunder
or to Section 412 of the Internal Revenue Code of 1986, as amended (the "Code"),
and at all times comply in all material respects with the provisions of the
Pension Reform Act and Code which are applicable to the Plans. The Loan Parties
will not permit any condition to exist which would permit the Pension Benefit
Guaranty Corporation to cause the termination of any Pension Plan under
circumstances which would cause the lien provided for in Section 4068 of the
Pension Reform Act to attach to the assets of URC or any of its Subsidiaries.
Section 9.8. DISTRIBUTIONS. Make any Distribution or make any other
payment on account of the purchase, acquisition, redemption, or other retirement
of any shares of stock, whether now or hereafter outstanding, except the
following:
(a) Any Subsidiary may make Distributions to its corporate
parent which is a wholly-owned subsidiary of URC;
(b) So long as no Default has occurred and continues to exist
or would, after giving effect to the payment of such Distribution occur, URC may
make cash Distributions, provided that the aggregate amount of such
Distributions payable in any four fiscal quarter period shall not exceed
thirty-five percent (35%) of Consolidated Net Income of URC and its Subsidiaries
for such period; and
(c) The Permitted Stock Repurchase.
Section 9.9. SALE AND LEASEBACK. Sell or transfer any of its properties
with the intention of taking back a lease of the same property or leasing other
property for substantially the same use as the property being sold or
transferred.
Section 9.10. FRANCHISE AGREEMENTS. Without the prior written consent
of the Required Banks (which shall not be unreasonably withheld, delayed or
conditioned), (a) reduce or agree to reduce the continuing monthly royalties
payable by domestic Franchisees other than on a temporary basis or for specific
Franchisees and not generally for all Franchisees, or (b) reduce or agree to
reduce the amounts required to be contributed to an advertising cooperative fund
or spent on local advertising and public relations by domestic Franchisees other
than on a temporary basis or for specific Franchisees and not generally for all
Franchisees, or (c) make any other generally applicable changes to the Franchise
Program, except to the extent any such reduction or change would not have a
Material Adverse Effect. URC's and its Subsidiary's domestic and international
franchise programs as now conducted and as presently proposed to be conducted
are described in SCHEDULE 9.10 attached hereto (the "Franchise Programs").
51
58
Section 9.11. CAPITAL STRUCTURE. Change its capital structure; nor will
URC permit any of its Subsidiaries to suffer or permit any circumstance to exist
in which any Subsidiary is not wholly-owned, directly or indirectly, by URC.
Section 9.12. TRANSACTIONS WITH AFFILIATES. Enter into any transaction,
including, without limitation, the purchase, sale or exchange of any property,
or the rendering of any service, with any present Affiliate, except in the
ordinary course of and pursuant to the reasonable requirements of its business
and upon fair and reasonable terms no less favorable to it than would be
obtained in a comparable arms length transaction with any Person not an
Affiliate.
Section 9.13. NEW SUBSIDIARIES. Establish or acquire any new
Subsidiaries unless, immediately upon such establishment or acquisition, such
new Subsidiary executes and delivers to the Bank a guaranty of the Bank
Obligations in substantially the form of the Affiliate Guaranty Agreement, and
shall deliver such proof of corporate action, incumbency of officers, opinions
of counsel and other documents as the Agent shall reasonably request.
Section 9.14. NEW RESTAURANTS. Establish or acquire in any fiscal year
more than three (3) restaurants which do not utilize the "Pizzeria Uno" concept.
Section 9.15. CHANGE IN BANKRUPTCY PLAN. Make any change or amend in
any way the Daytona Creditor's Plan without the prior written consent of the
Agent.
ARTICLE 10. EVENTS OF DEFAULT AND REMEDIES
Section 10.1. EVENTS OF DEFAULT. Each of the following events shall be
deemed to be Events of Default hereunder:
(a) The Borrowers shall fail to make any payment in respect of
(i) the principal of any of the Bank Obligations as the same shall become due,
whether at the stated payment dates or by acceleration or otherwise, or (ii)
interest or commitment fees on or in respect of any of the Bank Obligations as
the same shall become due, and such failure shall continue for a period of five
(5) days;
(b) The Loan Parties shall fail to perform or observe any of
the terms, covenants, conditions or provisions of Articles 6, 7 or 9 hereof;
(c) The Loan Parties shall fail to perform or observe any
other covenant, agreement or provision to be performed or observed by them under
this Agreement or any other Bank Agreement, and such failure shall not be
rectified or cured within thirty (30) days after the earlier of (i) notice by
the Agent to the Borrowers of such failure, or (ii) the date on which the
Borrowers know or reasonably should know of such default;
52
59
(d) Any representation or warranty of the Loan Parties
herein or in any other Bank Agreement or any amendment to any thereof shall have
been materially false or misleading at the time made or intended to be
effective;
(e) Any Loan Party or any Subsidiary shall fail to make
any payment on account of Indebtedness for money borrowed by such Loan Party or
Subsidiary of which the total amount outstanding is in excess of $250,000, when
such payment is due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) or shall fail to perform or observe any
provision of any agreement or instrument relating to such Indebtedness, and such
failure shall permit the holder thereof to accelerate such Indebtedness;
(f) Any Loan Party or any Subsidiary shall be involved in
financial difficulties as evidenced:
(1) by its commencement of a voluntary case under
Title 11 of the United States Code as from time to time in
effect, or by its authorizing, by appropriate proceedings of
its board of directors or other governing body, the
commencement of such a voluntary case;
(2) by its filing an answer or other pleading
admitting or failing to deny the material allegations of a
petition filed against it commencing an involuntary case under
said Title 11, or seeking, consenting to or acquiescing in the
relief therein provided, or by its failing to controvert
timely the material allegations of any such petition;
(3) by the entry of an order for relief in any
involuntary case commenced under said Title 11;
(4) by its seeking relief as a debtor under any
applicable law, other than said Title 11, of any jurisdiction
relating to the liquidation or reorganization of debtors or to
the modification or alteration of the rights of creditors
generally, or by its consenting to or acquiescing in such
relief;
(5) by the entry of an order by a court of competent
jurisdiction (1) by finding it to be bankrupt or insolvent,
(2) ordering or approving its liquidation, reorganization or
any modification or alteration of the rights of its creditors
generally, or (3) assuming custody of, or appointing a
receiver or other custodian for all or a substantial part of
its property and such order shall not be vacated or stayed on
appeal or otherwise stayed within 60 days;
(6) by the filing of a petition against any Loan
Party or any Subsidiary under said Title 11 which shall not be
vacated within 60 days; or
53
60
(7) by its making an assignment for the benefit of,
or entering into a composition with, its creditors generally,
or appointing or consenting to the appointment of a receiver
or other custodian for all or a substantial part of its
property.
(g) There shall have occurred a judgment against any Loan
Party or any Subsidiary in any court (i) for an amount in excess of $1,500,000
not covered by insurance and from which no appeal has been taken or with respect
to which all appeal periods have expired, or (ii) which shall have a Material
Adverse Effect;
(h) The occurrence of a Change of Control; or
(i) Any "Event of Default" under any other Bank Agreement
shall have occurred.
Section 10.2. REMEDIES. Upon the occurrence of an Event of Default,
in each and every case, the Agent and the Banks may proceed to protect and
enforce their rights by suit in equity, action at law and/or other appropriate
proceeding either for specific performance of any covenant or condition
contained in this Agreement or any other Bank Agreement or in any instrument
delivered to the Agent or the Banks pursuant hereto or thereto, or in aid of the
exercise of any power granted in this Agreement, any Bank Agreement or any such
instrument, and (unless there shall have occurred an Event of Default under
Section 10.1(f), in which case the unpaid balance of Bank Obligations shall
automatically become due and payable) the Agent may, at the direction of the
Required Banks, by notice in writing to the Borrowers declare (a) the
obligations of the Banks to make Revolving Credit Advances to be terminated,
whereupon such obligations shall be terminated, and (b) declare all or any part
of the unpaid balance of the Bank Obligations then outstanding to be forthwith
due and payable, whereupon such unpaid balance or part thereof shall become so
due and payable without presentation, protest or further demand or notice of any
kind, all of which are hereby expressly waived. In such event, the Agent and the
Banks may proceed to enforce payment of such balance or part thereof in such
manner as they may elect.
Section 10.3. SETOFF. In addition to, and without limitation of,
any rights of the Agent or the Banks under applicable law, upon the occurrence
of an Event of Default, any Indebtedness from the Agent or any Bank to the
Borrowers or any Guarantor (including all account balances, whether provisional
or final and whether or not collected or available) may be offset and applied
toward the payment of the Bank Obligations then due and owing to the Banks. The
Borrowers agree that any holder of a participation in the Revolving Credit
Advance, the URI Term Loan and the Saxet Term Loan may, to the fullest extent
permitted by law, exercise all its rights of payment with respect to such
participation as if such holder were the direct creditor of the Borrowers in the
amount of the participation.
54
61
Section 10.4. APPLICATION OF PROCEEDS. In the event that following
the occurrence and during the continuance of any Event of Default, the Agent or
any Bank receives any monies on account of the Bank Obligations from the
Borrowers, any Guarantor, Affiliate Guarantor, from the proceeds of set-off or
otherwise, such monies shall be distributed for application as follows:
(a) FIRST, to the payment of or the reimbursement of the
Agent or any Bank for or in respect of all costs, expenses, disbursements and
losses incurred or sustained by the Agent or such Bank in connection with the
collection of such monies by the Agent, or in connection with the exercise,
protection or enforcement by the Agent or such Bank of any of the rights,
remedies, powers and privileges of the Agent or such Bank and/or the Banks under
this Agreement or any other Bank Agreements;
(b) SECOND, to the payment of all interest, including
interest on overdue amounts, and late charges, then due and payable with respect
to the Loans in such order as the Banks determine, allocated among the Banks in
proportion to their respective Commitment Percentages;
(c) THIRD, to the payment of the outstanding principal
balance of the Loans, in such order as the Banks determine, allocated among the
Banks in proportion to their respective Commitment Percentages;
(d) FOURTH, to any other outstanding Bank Obligations,
allocated among the Banks in proportion to their respective interests in such
Bank Obligations; and
(e) FIFTH, the excess, if any, shall be returned to the
Borrower or to such other Persons as are entitled thereto.
ARTICLE 11. WAIVERS; CONSENTS; AMENDMENTS; REMEDIES
Section 11.1 ACTIONS BY LENDERS. Except as otherwise expressly set
forth in any particular provision of this Agreement, any consent or approval
required or permitted by this Agreement or in any other Bank Agreement to be
given by the Banks, including under Section 11.2, may be given, and any term or
condition of this Agreement or of any Bank Agreement may be amended, and the
performance or observance by the Loan Parties or any Affiliate Guarantor of any
term of this Agreement or any other Bank Agreement may be waived (either
generally or in a particular instance and either retroactively or prospectively)
with, but only with, the written consent of the Required Banks; PROVIDED,
HOWEVER, that without the written consent of all of the Banks:
(a) no reduction of any principal of or interest rates on
or Commitment Fees relating to the Commitment or the Loans shall be made;
55
62
(b) no extension or postponement of the stated time of
payment of the principal amount of, interest on, Commitment Fees, or any other
fee relating to the Commitment or the Loans shall be made;
(c) no increase in the amount, or extension of the term,
of the Commitment beyond those provided for hereunder and no extension of the
Revolving Credit Termination Date or the scheduled maturity of the Term Loans
shall be made;
(d) no change in the definition of "Required Banks" shall
be made;
(e) no release of any Loan Party, no release of all or
substantially all of the Affiliate Guarantors from its or their obligations to
make payment of the principal amount of interest on, Commitment Fees, or any
other amount relating to the Commitment or the Loans and no release of all or
substantially all of the security provided under the Saxet Mortgage Documents
shall be made; and
(f) no change in the language of this Section 11.1 shall
be made.
Section 11.2 ACTIONS BY BORROWER. No delay or omission on the
Agent's or the Banks' part in exercising their rights and remedies against the
Borrowers or any other interested party shall constitute a waiver. A breach by
the Loan Parties of their obligations under this Agreement may be waived only by
a written waiver executed by the Agent, acting with the consent of the Required
Banks. The waiver of a Loan Party's breach in one or more instances shall not
constitute or otherwise be an implicit waiver of subsequent breaches. To the
extent permitted by applicable law, each Loan Party hereby agrees to waive, and
does hereby absolutely and irrevocably waive (a) all presentments, demands for
performance, notices of nonperformance, protests, notices of protest and notices
of dishonor in connection with any of the Indebtedness evidenced by the Notes,
(b) any requirement of diligence or promptness on the Agent's or on the Banks'
part in the enforcement of their rights under the provisions of this Agreement
or any Bank Agreement, and (c) any and all notices of every kind and description
which may be required to be given by any statute or rule of law with respect to
its liability (i) under this Agreement or in respect of the Indebtedness
evidenced by the Notes or any other Bank Obligation or (ii) under any other Bank
Agreement. No course of dealing between the Loan Parties, the Agent and the
Banks shall operate as a waiver of any of the Agent's or the Banks' rights under
this Agreement or any Bank Agreement or with respect to any of the Bank
Obligations. This Agreement shall be amended only by a written instrument
executed by the Borrowers and the Required Banks making explicit reference to
this Agreement. The Agent's and the Banks' rights and remedies under this
Agreement and under all subsequent agreements between or among the Borrowers and
the Agent and/or the Banks shall be cumulative and any rights and remedies
expressly set forth herein shall be in addition to, and not in limitation of,
any other rights and remedies which may be applicable to the Agent and the Banks
in law or at equity.
56
63
ARTICLE 12. SUCCESSORS AND ASSIGNS
Section 12.1. GENERAL. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
assigns, except that (a) no Loan Party may assign its rights or obligations
under this Agreement without the prior written consent of the Required Banks,
and (b) each Bank may assign its rights in this Agreement only as set forth
below in this Article 12.
Section 12.2. ASSIGNMENTS.
(a) ASSIGNMENTS. In compliance with applicable laws with
respect to such assignment and with the prior written consent of the Agent and
the Borrower (which consent will not be unreasonably withheld), a Bank may
assign to one or more financial institutions (each a "Successor Bank") a
proportionate part of its rights and obligations in connection with this
Agreement, its Notes and the related Bank Agreements, and each such Successor
Bank shall assume such rights and obligations pursuant to an Assignment and
Assumption Agreement duly executed by such Successor Bank and such Bank, and
acknowledged and consented to by the Agent and the Borrower, substantially in
the form of EXHIBIT F attached hereto. Any assignment under this Section 12.2(a)
shall be in a minimum amount of $10,000,000 in the aggregate for all Notes so
assigned. In connection with any assignment under this Section 12.2(a) the Bank
making such assignment shall pay to the Agent an administrative processing fee
in the amount of $2,500.
(b) ASSIGNMENT PROCEDURES. In the event of an assignment
under Section 12.2(a), upon execution and delivery of such an Assignment and
Assumption Agreement at least five (5) Business Days prior to the proposed
assignment date, and payment by such Successor Bank to the assignor making such
assignment of an amount equal to the purchase price agreed between such Bank and
such Successor Bank, such Successor Bank shall become party to this Agreement as
a signatory hereto and shall have all the rights and obligations of a Bank under
this Agreement and the other Bank Agreements with an interest therein as set
forth in such assignment, and such assignor making such assignment shall be
released from its obligations hereunder to a corresponding extent, and no
further consent or action by any party shall be required. Upon the consummation
of any such assignment, the assignor, the Successor Bank and the Borrowers shall
make appropriate arrangements so that, if required, new Notes are issued to the
Successor Bank and replacement Notes are issued to the assignor in principal
amounts reflecting their respective revised interests.
(c) REGISTER. The Agent shall maintain a register (the
"Register") for the recordation of (i) the names and addresses of the Successor
Banks which assume rights and obligations pursuant to an assignment hereunder,
(ii) the interests of each Bank, and (iii) the amounts of the Loans owing to
each Bank from time to time. The entries in the Register shall be conclusive, in
the absence of manifest error, and the Borrowers, the Agent and the Banks may
treat each Person whose name is registered therein for all purposes as a party
to this
57
64
Agreement. The Register shall be available for inspection by the Borrowers or
any Bank at any reasonable time and from time to time upon reasonable prior
notice.
(d) FURTHER ASSURANCES. The Borrowers shall sign such
documents and take such other actions from time to time reasonably requested by
the Agent or a Bank to enable any assignee to share in the benefits and rights
created by the Bank Agreements.
(e) ASSIGNMENTS TO FEDERAL RESERVE BANK AND AFFILIATES. Any
Bank at any time may assign all or any portion of its rights under this
Agreement and its Notes to a Federal Reserve Bank. No such assignment shall
release the assignor Bank from its obligations hereunder. Any Bank may at any
time assign all or a portion of its rights under this Agreement and its Notes,
in a minimum aggregate amount of $500,000, to any affiliate of such Bank which
is wholly-owned by the same bank holding company parent.
Section 12.3. PARTICIPATIONS. Any Bank may at any time grant or offer
to grant to one or more financial institutions ("Credit Participants")
participating interests in its rights and obligations in this Agreement, its
Notes and the related Bank Agreements, and each such Credit Participant shall
acquire such participation subject to the terms set forth below.
(a) AMOUNT. Each such participation shall be in a minimum
amount of $5,000,000.
(b) PROCEDURE. Each Bank granting such participation shall
comply with all applicable laws with respect to such transfer and shall remain
responsible for the performance of its obligations hereunder and under the other
Bank Agreements and shall retain the sole right and responsibility to exercise
its rights and to enforce the obligations of the Borrowers hereunder and under
the other Bank Agreements, including the right to consent to any amendment,
modification or waiver of any provision of any Bank Agreement, except for the
matters referred to in Section 11.1 requiring the consent of all Banks, which
may require consent of each Credit Participant.
(c) DEALING WITH BANKS. The Borrower shall continue to deal
solely and directly with the Banks in connection with their rights and
obligations under this Agreement and the other Bank Agreements.
(d) RIGHTS OF CREDIT PARTICIPANTS. The Borrower agrees that
each Credit Participant shall, to the extent provided in its participation
instrument, be entitled to the benefits of Sections 2.5, 2.9, 2.10, 15.7,
Article 14, and the setoff rights in Section 10.3 with respect to its
participating interest; provided, however, that no Credit Participant shall be
entitled to receive any greater payment under such Sections than the Bank
granting such participation would have been entitled to receive with respect to
the interests transferred.
58
65
(e) AFFILIATES. Notwithstanding the provisions of Section
12.3(a), a Bank may at any time grant participations in its rights and
obligations herein to its affiliates in minimum amounts of $500,000; provided,
however, that in the event of such grant, all other provisions of this Section
12.3 shall apply.
(f) NOTICE. Prior to any such participation, other than a
participation to an affiliate of a Bank, a Bank granting such participation
shall notify the Agent and the Borrowers.
ARTICLE 13. THE AGENT
SECTION 13.1. AUTHORIZATION AND ACTION. Each Bank hereby appoints and
authorizes the Agent to take such action on its behalf and to exercise such
powers under this Agreement and the other Bank Agreements as are delegated to
the Agent by the terms hereof and thereof, together with such powers as are
reasonably incidental thereto. As to any matters not expressly provided for by
this Agreement and the other Bank Agreements (including, without limitation,
enforcement or collection of the Notes), the Agent shall not be required to
exercise any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Banks, and such instructions shall be
binding upon all Banks; PROVIDED, HOWEVER, that the Agent shall not be required
to take any action which exposes the Agent to liability or which is contrary to
this Agreement or the other Bank Agreements or applicable law. Subject to the
foregoing provisions and to the other provisions of this Article 13, the Agent
shall, on behalf of the Banks: (i) execute any documents on behalf of the Banks
providing collateral for or guarantees of the Bank Obligations; (ii) hold and
apply any collateral for the Bank Obligations, and the proceeds thereof, at any
time received by it, in accordance with the provisions of this Agreement and the
other Bank Agreements; (iii) exercise any and all rights, powers and remedies of
the Banks under this Agreement or any of the other Bank Agreements, including
the giving of any consent or waiver or the entering into of any amendment,
subject to the provisions of Section 11.1; (iv) at the direction of the Banks,
execute, deliver and file UCC financing statements, mortgages, deeds of trust,
lease assignments and such other agreements in respect of any collateral for the
Bank Obligations, and possess instruments included in the collateral on behalf
of the Banks; and (v) in the event of acceleration of the Borrowers'
Indebtedness hereunder, act at the direction of the Banks to exercise the rights
of the Banks hereunder and under the other Bank Agreements.
SECTION 13.2. AGENT'S RELIANCE, ETC. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable to the Banks for any
action taken or omitted to be taken by it or them under or in connection with
this Agreement or the other Bank Agreement, except for its or their own gross
negligence or willful misconduct. Without limitation of the generality of the
foregoing, the Agent: (i) may treat the payee of any Note as the holder thereof
until the Agent receives written notice of the assignment or transfer thereof
signed by
59
66
such payee and in form required under Article 12 hereof; (ii) may consult with
legal counsel, independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel, accountants or
experts; (iii) makes no warranty or representations to any Bank and shall not be
responsible to any Bank for any statements, warranties or representations made
in or in connection with this Agreement or the other Bank Agreements; (iv) shall
not have any duty to ascertain or to inquire as to the performance or observance
of any of the terms, covenants or conditions of this Agreement or the other Bank
Agreements on the part of the Loan Parties or any other Person or to inspect the
property (including the books and records) of the Loan Parties or any other
Person; (v) shall not be responsible to any Bank for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement or the other Bank Agreements or any other instrument or document
furnished pursuant hereto or thereto; and (vi) shall incur no liability under or
in respect of this Agreement or the other Bank Agreements by acting upon any
notice, consent, certificate or other instrument or writing (which may be by
telecopy, telegram, cable or telex) believed by it to be genuine and signed or
sent by the proper party or parties.
SECTION 13.3. FLEET AND AFFILIATES. With respect to its Commitment
hereunder, Fleet shall have the same rights and powers under this Agreement and
the other Bank Agreements as any other Bank and may exercise the same as though
it were not the Agent; and the term "Bank" or "Bank(s)" shall, unless otherwise
expressly indicated, include Fleet in its individual capacity. Fleet and its
Affiliates may lend money to, and generally engage in any kind of business with,
the Loan Parties, any of their Subsidiaries and any Person who may do business
with or own securities of the Loan Parties or any such Subsidiary, all as if
Fleet were not the Agent and without any duty to account therefor to the Banks.
SECTION 13.4. BANK CREDIT DECISION. Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank and based on
the financial statements referred to in Section 5.9 and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Bank also acknowledges that it will,
independently and without reliance upon the Agent or any other Bank and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement.
SECTION 13.5. INDEMNIFICATION OF AGENT. Each Bank agrees to indemnify
the Agent (to the extent that the Agent is not reimbursed by the Loan Parties),
ratably according to its Commitment Percentage, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by, or asserted against the Agent in any way relating to or
arising out of this Agreement or any other Bank Agreement or any action taken or
omitted by the Agent in such capacity under this Agreement; PROVIDED that no
Bank shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions,
60
67
judgments, suits, costs, expenses or disbursements resulting from the Agent's
gross negligence or wilful misconduct. Without limitation of the foregoing, each
Bank agrees to reimburse the Agent promptly upon demand for its ratable share of
any out-of-pocket expenses (including counsel fees) incurred by the Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement and each other Bank Agreement, to the
extent that the Agent is not reimbursed for such expenses by the Borrower.
SECTION 13.6. SUCCESSOR AGENT. Except as provided below, the Agent may
resign at any time by giving written notice thereof to the Banks and the
Borrowers. Upon any such resignation, the Banks shall have the right to appoint
a successor Agent which shall be reasonably acceptable to the Borrowers. If no
successor Agent shall have been so appointed by the Banks (other than the
resigning Agent), and shall have accepted such appointment, within thirty (30)
days after the retiring Agent's giving notice of resignation, then the retiring
Agent may, on behalf of the Banks, appoint a successor Agent, which shall be a
commercial bank or financial institution organized under the laws of the United
States of America or of any state thereof and having a combined capital and
surplus of at least $50,000,000 and which shall be reasonably acceptable to the
Borrowers. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations under
this Agreement and the other Bank Agreements. After any retiring Agent's
resignation hereunder as Agent, the provisions of this Article 13 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement and the other Bank Agreements.
Section 13.7. AMENDMENT OF ARTICLE 13. The Borrowers hereby agree that
the foregoing provisions of this Article 13 constitute an agreement among the
Agent and the Banks (and the Agent and the Banks acknowledge that except for the
provisions of Section 13.6, the Borrowers are not parties to or bound by such
foregoing provisions) and that any and all of the provisions of this Article 13
may be amended at any time by the Banks without the consent or approval of, or
notice to, the Borrowers (other than the requirement of notice to the Borrowers
of the resignation of the Agent).
ARTICLE 14. INDEMNIFICATION
Without limitation of any other obligation or liability of the Loan
Parties or right or remedy of the Agent or the Banks contained herein, each Loan
Party, jointly and severally, hereby covenants and agrees to indemnify and hold
the Agent, the Banks, and their respective shareholders, directors, agents,
officers, partners, subsidiaries and affiliates, harmless from and against any
and all damages, losses (other than loss of profit), settlement payments,
obligations, liabilities, claims, including, without limitation, claims for
finder's or broker's
61
68
fees, actions or causes of action, and reasonable costs and expenses incurred,
suffered, sustained or required to be paid by an indemnified party in each case
by reason of or resulting from any claim relating to the transactions
contemplated hereby other than any such claims which arise or are marred solely
as a result of the Agent's or any Bank's gross negligence or willful misconduct.
Promptly upon receipt by any indemnified party hereunder of notice of the
commencement of any action against such indemnified party for which a claim is
to be made against the Loan Parties hereunder, such indemnified party shall
notify the Borrowers in writing of the commencement thereof, although the
failure to provide such notice shall not affect the indemnification rights of
any such indemnified party hereunder to the extent such indemnified party
demonstrates to the reasonable satisfaction of the Loan Parties that such
failure to provide notice does not prejudice the Loan Parties in the defense of
such claim. The Loan Parties shall have the right, at their option upon notice
to the indemnified parties, to defend any such matter at their own expense and
with their own counsel, except as provided below, which counsel must be
reasonably acceptable to the indemnified parties. The indemnified parties shall
cooperate with the Loan Parties in the defense of such matter. The indemnified
parties shall have the right to employ separate counsel and to participate in
the defense of such matter at their own expense. In the event that (a) the
employment of separate counsel by an indemnified party has been authorized in
writing by the Loan Parties, (b) the Loan Parties have failed to assume the
defense of such matter or (c) the named parties to any such action (including
impleaded parties) include any indemnified party who has been advised by counsel
that there may be one or more legal defenses available to it or prospective
bases for liability against it, which conflict with those available to or
against the Loan Parties, then the Loan Parties shall not have the right to
assume the defense of such matter with respect to such indemnified party. The
Loan Parties shall not be liable for any compromise or settlement of any such
matter effected without the Borrowers' written consent, which consent may not be
unreasonably withheld or delayed. The Loan Parties shall not compromise or
settle any such matter against an indemnified party without the written consent
of the indemnified party, which consent may not be unreasonably withheld or
delayed.
ARTICLE 15. MISCELLANEOUS
Section 15.1. SURVIVAL OF REPRESENTATIONS. All representations and
warranties of the Loan Parties contained in this Agreement shall survive the
execution of this Agreement and the delivery of the Notes and the making of the
Loans herein contemplated.
Section 15.2. GOVERNMENTAL REGULATION. Anything contained in this
Agreement to the contrary notwithstanding, neither the Agent nor any Bank shall
be obligated to extend credit to the Borrowers in violation of any limitation or
prohibition provided by any applicable statute or regulation.
Section 15.3. NOTICES. All notices and other communications made or
required to be given pursuant to this Agreement shall be in writing and shall be
mailed by United States mail,
62
69
postage prepaid, or sent by nationally-recognized overnight carrier service,
addressed as follows:
(a) If to the Agent, at Xxx Xxxxxxx Xxxxxx, Xxxx Xxxx
XXXXXX0X Xxxxxx, XX 00000, Attention: Xxxx X. Xxxxxx, Senior Vice President, or
at such other address(es) or to the attention of such other Person as the Agent
shall from time to time designate in writing to URC and the Banks;
(b) If to any Bank, at the address set forth below such
Bank's name on an execution page to this Agreement, or at such other address(es)
or to the attention of such other Person as such Bank shall from time to time
designate in writing to URC and the Agent;
(c) If to the Loan Parties, c/o URC, at 000 Xxxxxxx Xxxx
Xxxx, Xxxx Xxxxxxx, XX 00000, Attention: President and Chief Financial Officer,
or at such other address(es) or to the attention of such other Person as URC
shall from time to time designate in writing to the Agent and the Banks.
Any notice so addressed and mailed by registered or certified mail
shall be deemed to have been given five (5) days after deposit in the United
States mail. Any notice so addressed and sent by nationally recognized overnight
courier service shall be deemed to have been given one (1) day after delivery to
such courier service.
Section 15.4. MERGER. This Agreement and the documents and other
materials contemplated hereby constitute the entire agreement of the Loan
Parties, the Agent and the Banks and express their entire understanding with
respect to credit advanced or to be advanced by the Banks to the Loan Parties.
Section 15.5. GOVERNING LAW. This Agreement shall be governed by and
construed and enforced under the laws of The Commonwealth of Massachusetts.
Section 15.6. COUNTERPARTS. This Agreement and amendments to it may be
executed in several counterparts, each of which shall be an original. The
several counterparts shall constitute a single Agreement.
Section 15.7. BANK HOLIDAYS. Whenever any payment to be made under this
Agreement shall become due on a day which is not a Business Day, such payment
may be made on the next succeeding Business Day on which the Bank is open, and
such extension shall be included in computing the interest in connection with
such payment.
Section 15.8. EXPENSES. The Loan Parties, jointly and severally, agree
to pay on demand, all the reasonable expenses incurred by the Agent in
preparing, executing, delivering and administering this Agreement and related
instruments and documents, including, without limitation, the reasonable fees
and out-of-pocket expenses of the Agent's special counsel,
63
70
Xxxxxxx, Procter & Xxxx LLP. The Loan Parties also agree to pay on demand, all
reasonable out-of-pocket expenses incurred by the Agent and the Banks,
including, without limitation, legal and accounting fees, in connection with the
collection of amounts upon the occurrence of an Event of Default described in
Article 10 hereof, the revision, protection or enforcement of any of the Banks'
rights against the Loan Parties under this Agreement, the Notes, and the other
Bank Agreements, and the administration of special problems that may arise under
this Agreement or any other Bank Agreement. The Loan Parties also agree to pay
all stamp and other taxes in connection with the execution and delivery of this
Agreement and related instruments and documents.
Section 15.9. HEADINGS. Section headings in this Agreement are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of this Agreement.
Section 15.10. SEVERABILITY OF PROVISIONS. Any provision in any Bank
Agreement that is held to be inoperative, unenforceable, or invalid in any
jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or
invalid without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Bank Agreements are declared
to be severable.
Section 15.11. NONLIABILITY OF LENDERS. The relationship between the
Loan Parties and the Agent and the Banks shall be solely that of borrower and
lender. Neither the Agent nor any Bank shall have any fiduciary responsibilities
to the Loan Parties. The Agent and the Bank undertake no responsibility to the
Loan Parties to review or inform the Loan Parties of any matter in connection
with any phase of the Loan Parties' business or operations.
Section 15.12. WAIVER OF JURY TRIAL. THE AGENT, THE BANKS AND THE LOAN
PARTIES AGREE THAT NONE OF THEM NOR ANY ASSIGNEE OR SUCCESSOR SHALL (A) SEEK A
JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM OR ANY OTHER ACTION BASED
UPON OR ARISING OUT OF, THIS AGREEMENT, THE NOTES, ANY BANK AGREEMENT, ANY
RELATED INSTRUMENTS, ANY COLLATERAL OR THE DEALINGS OR THE RELATIONSHIP BETWEEN
OR AMONG ANY OF THEM, OR (B) SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER
ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THE PROVISIONS OF
THIS PARAGRAPH HAVE BEEN FULLY DISCUSSED BY THE AGENT, THE BANKS AND THE LOAN
PARTIES, AND THESE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS. NONE OF THE
AGENT, THE BANKS OR ANY OF THE LOAN PARTIES HAS AGREED WITH OR REPRESENTED TO
ANOTHER THAT THE PROVISIONS OF THIS PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL
INSTANCES.
64
71
IN WITNESS WHEREOF, the Loan Parties, the Agent and the Banks have
caused this Amended and Restated Revolving Credit and Term Loan Agreement to be
executed by their duly authorized officers as of the date set forth above.
UNO RESTAURANT CORPORATION
By:
----------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President-Finance
URC HOLDING COMPANY, INC.
By:
----------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President-Finance
UNO RESTAURANTS, INC.
By:
----------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President-Finance
UNO FOODS, INC.
By:
----------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President-Finance
65
72
PIZZERIA UNO CORPORATION
By:
----------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President-Finance
SAXET CORPORATION
By:
----------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President-Finance
FLEET NATIONAL BANK, as Agent
By:
----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Vice President
FLEET NATIONAL BANK
By:
----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Vice President
Address: Xxx Xxxxxxx Xxxxxx
Xxxx Xxxx XXXXX00X
Xxxxxx, XX 00000
Attn: Xxxx X. Xxxxxx, Senior Vice
President
Telefax: (000) 000-0000
Commitment Percentage: 50%
---
66
73
BANKBOSTON, N.A.
By:
----------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Vice President
Address: 000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxx, Vice
President
Telefax: (000) 000-0000
Commitment Percentage: 50%
---
BANKBOSTON, N.A., as Co-Agent
By:
----------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Vice President
Address: 000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxx, Vice
President
Telefax: (000) 000-0000
67
