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LOAN AND SECURITY AGREEMENT
Dated as of August 31, 2000
Between
COMMISSARY OPERATIONS, INC.
(the Borrower)
and
BANK OF AMERICA, N.A.
(the Lender)
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TABLE OF CONTENTS(1)
Page
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ARTICLE 1 - DEFINITIONS..................................................1
SECTION 1.1 DEFINITIONS................................................1
SECTION 1.2 OTHER REFERENTIAL PROVISIONS..............................15
SECTION 1.3 EXHIBITS AND SCHEDULES....................................16
ARTICLE 2 - REVOLVING CREDIT FACILITY...................................16
A. REVOLVING CREDIT FACILITY...........................................16
SECTION 2.1 LOANS.....................................................16
SECTION 2.2 MANNER OF BORROWING LOANS.................................16
SECTION 2.3 REPAYMENT OF LOANS........................................17
SECTION 2.4 NOTE......................................................17
SECTION 2.5 EXTENSION OF FACILITY.....................................18
SECTION 2.6 LETTERS OF CREDIT.........................................18
ARTICLE 3 - GENERAL LOAN PROVISIONS.....................................18
SECTION 3.1 INTEREST..................................................18
SECTION 3.2 FEES......................................................19
SECTION 3.3 NOTICE OF CONVERSION OR CONTINUATION OF LOANS.............20
SECTION 3.4 CONVERSION OR CONTINUATION................................20
SECTION 3.5 DURATION OF INTEREST PERIODS; MAXIMUM NUMBER OF LIBOR
LOANS; MINIMUM INCREMENTS.................................20
SECTION 3.6 CHANGED CIRCUMSTANCES.....................................21
SECTION 3.7 PAYMENTS NOT AT END OF INTEREST PERIOD; FAILURE TO BORROW.21
SECTION 3.8 INCREASED COSTS AND REDUCED RETURNS.......................21
SECTION 3.9 MANNER OF PAYMENT.........................................22
SECTION 3.10 STATEMENTS OF ACCOUNT....................................22
SECTION 3.11 TERMINATION OF AGREEMENT; REDUCTION OF FACILITY..........22
ARTICLE 4 - CONDITIONS PRECEDENT........................................23
SECTION 4.1 CONDITIONS PRECEDENT TO INITIAL LOAN......................23
SECTION 4.2 ALL LOANS.................................................26
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF THE BORROWER..............26
SECTION 5.1 REPRESENTATIONS AND WARRANTIES............................26
SECTION 5.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC...........30
ARTICLE 6 - SECURITY INTEREST...........................................31
SECTION 6.1 SECURITY INTEREST.........................................31
SECTION 6.2 CONTINUED PRIORITY OF SECURITY INTEREST...................31
ARTICLE 7 - COLLATERAL COVENANTS........................................31
SECTION 7.1 COLLECTION OF RECEIVABLES.................................32
SECTION 7.2 VERIFICATION AND NOTIFICATION.............................32
SECTION 7.3 DISPUTES, RETURNS AND ADJUSTMENTS.........................32
SECTION 7.4 INVOICES..................................................32
SECTION 7.5 DELIVERY OF INSTRUMENTS...................................33
SECTION 7.6 SALES OF INVENTORY........................................33
SECTION 7.7 RETURNED GOODS............................................33
SECTION 7.8 OWNERSHIP AND DEFENSE OF TITLE............................33
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(1) This Table of contents is included for reference purposes only and does
not constitute part of the Loan and Security Agreement.
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SECTION 7.9 INSURANCE.................................................33
SECTION 7.10 LOCATION OF OFFICES AND COLLATERAL.......................34
SECTION 7.11 RECORDS RELATING TO COLLATERAL...........................34
SECTION 7.12 INSPECTION...............................................34
SECTION 7.13 MAINTENANCE OF EQUIPMENT.................................35
SECTION 7.14 INFORMATION AND REPORTS..................................35
SECTION 7.15 POWER OF ATTORNEY........................................35
ARTICLE 8 - AFFIRMATIVE COVENANTS.......................................36
SECTION 8.1 PRESERVATION OF CORPORATE EXISTENCE AND SIMILAR MATTERS...36
SECTION 8.2 COMPLIANCE WITH APPLICABLE LAW............................36
SECTION 8.3 CONDUCT OF BUSINESS.......................................36
SECTION 8.4 PAYMENT OF TAXES AND CLAIMS...............................36
SECTION 8.5 ACCOUNTING METHODS AND FINANCIAL RECORDS..................36
SECTION 8.6 USE OF PROCEEDS...........................................36
SECTION 8.7 HAZARDOUS WASTE AND SUBSTANCES; ENVIRONMENTAL
REQUIREMENTS..............................................37
SECTION 8.8 ACCURACY OF INFORMATION...................................37
SECTION 8.9 REVISIONS OR UPDATES TO SCHEDULES.........................37
SECTION 8.10 CHANGE IN MANAGEMENT.....................................37
ARTICLE 9 - INFORMATION.................................................37
SECTION 9.1 FINANCIAL STATEMENTS......................................37
SECTION 9.2 COMMUNICATION WITH ACCOUNTANTS............................38
SECTION 9.3 OFFICER'S CERTIFICATE.....................................38
SECTION 9.4 COPIES OF OTHER REPORTS...................................38
SECTION 9.5 NOTICE OF LITIGATION AND OTHER MATTERS....................39
SECTION 9.6 ERISA.....................................................39
ARTICLE 10 - NEGATIVE COVENANTS.........................................40
SECTION 10.1 FINANCIAL RATIOS.........................................40
SECTION 10.2 INDEBTEDNESS.............................................40
SECTION 10.3 GUARANTIES...............................................40
SECTION 10.4 INVESTMENTS..............................................40
SECTION 10.5 CAPITAL EXPENDITURES.....................................40
SECTION 10.6 RESTRICTED DISTRIBUTIONS AND PAYMENTS, ETC...............40
SECTION 10.7 MERGER, CONSOLIDATION AND SALE OF ASSETS.................41
SECTION 10.8 TRANSACTIONS WITH AFFILIATES.............................41
SECTION 10.9 LIENS....................................................41
SECTION 10.10 OPERATING LEASES........................................41
SECTION 10.11 BENEFIT PLANS...........................................41
SECTION 10.12 SALES AND LEASEBACKS....................................41
SECTION 10.13 TAX SHARING AGREEMENT; AMENDMENTS OF OTHER AGREEMENTS...41
SECTION 10.14 MINIMUM AVAILABILITY....................................42
ARTICLE II - DEFAULT....................................................42
SECTION 11.1 EVENTS OF DEFAULT........................................42
SECTION 11.2 REMEDIES.................................................44
SECTION 11.3 APPLICATION OF PROCEEDS..................................46
SECTION 11.4 POWER OF ATTORNEY........................................46
SECTION 11.5 MISCELLANEOUS PROVISIONS CONCERNING REMEDIES.............47
SECTION 11.6 TRADEMARK LICENSE........................................47
ARTICLE 12 - MISCELLANEOUS..............................................48
SECTION 12.1 NOTICES..................................................48
SECTION 12.2 EXPENSES.................................................49
SECTION 12.3 STAMP AND OTHER TAXES....................................49
SECTION 12.4 SETOFF...................................................49
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SECTION 12.5 LITIGATION...............................................50
SECTION 12.6 WAIVER OF RIGHTS.........................................50
SECTION 12.7 REVERSAL OF PAYMENTS.....................................51
SECTION 12.8 INJUNCTIVE RELIEF........................................51
SECTION 12.9 ACCOUNTING MATTERS......................................51
SECTION 12.10 ASSIGNMENT; PARTICIPATION...............................51
SECTION 12.11 AMENDMENTS..............................................51
SECTION 12.12 PERFORMANCE OF BORROWER'S DUTIES........................51
SECTION 12.13 INDEMNIFICATION.........................................51
SECTION 12.14 ALL POWERS COUPLED WITH INTEREST........................52
SECTION 12.15 SURVIVAL................................................52
SECTION 12.16 SEVERABILITY OF PROVISIONS..............................52
SECTION 12.17 GOVERNING LAW...........................................52
SECTION 12.18 COUNTERPARTS............................................52
SECTION 12.19 REPRODUCTION OF DOCUMENTS...............................52
SECTION 12.20 FUNDS TRANSFER SERVICES.................................53
SECTION 12.21 CONSENT TO ADVERTISING AND PUBLICITY....................53
SECTION 12.22 FINAL AGREEMENT........................................53
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EXHIBITS AND SCHEDULES
EXHIBIT A FORM OF REVOLVING CREDIT NOTE
EXHIBIT B FORM OF BORROWING BASE CERTIFICATE
EXHIBIT C FORM OF OFFICER'S CERTIFICATE
EXHIBIT D FORM OF TAX SHARING AGREEMENT
SCHEDULE 5.1(a) Jurisdictions in Which Borrower is Qualified as a
Foreign Corporation
SCHEDULE 5.1(b) Borrower's Capital Stock
SCHEDULE 5.1(e) Borrower's Business
SCHEDULE 5.1(f) Exceptions to Governmental Approvals
SCHEDULE 5.1(g) Non Lien Title Exceptions and Defects and Property
Disposed of Out of Ordinary Course of Business
SCHEDULE 5.1(h) Liens
SCHEDULE 5.1(i) Indebtedness for Money Borrowed and Guaranties
SCHEDULE 5.1(j) Litigation
SCHEDULE 5.1(k) Tax Returns and Payments
SCHEDULE 5.1(m) Financial Statements
SCHEDULE 5.1(o) ERISA
SCHEDULE 5.1(t) Location of Chief Executive Office
SCHEDULE 5.1(u) Locations of Inventory
SCHEDULE 5.1(v) Locations of Equipment
SCHEDULE 5.1(w) Corporate and Fictitious Names
SCHEDULE 5.1(z) Employee Relations
SCHEDULE 5.1(aa) Proprietary Rights
SCHEDULE 5.1(bb) Real Property
SCHEDULE 8.6 Use of Proceeds
SCHEDULE 11.6 Trademark Licenses
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LOAN AND SECURITY AGREEMENT
Dated as of August 31, 2000
COMMISSARY OPERATIONS, INC., a Tennessee corporation, and BANK OF
AMERICA, N.A., a national banking association, agree as follows:
ARTICLE 1 - DEFINITIONS
Section 1.1 Definitions. For the purposes of this Agreement:
"Account Debtor" means a Person who is obligated on a Receivable.
"Accounting Period" means, with respect to the Borrower, any of the
thirteen fiscal periods following the last Sunday in October in any year.
"Acquire", as applied to any Business Unit or Investment, means the
acquisition of such Business Unit or Investment by purchase, exchange,
issuance of stock or other securities, or by merger, reorganization or any
other method.
"Affiliate" means, with respect to a Person, (a) any officer,
director, employee or managing agent of such Person, (b) any spouse, parents,
brothers, sisters, children and grandchildren of such Person, (c) any
association, partnership, trust, entity or enterprise in which such Person is
a director, officer or general partner, (d) any other Person that, (i)
directly or indirectly, through one or more intermediaries, controls, or is
controlled by, or is under common control with, such given Person, (ii)
directly or indirectly beneficially owns or holds 10% or more of any class of
voting stock or partnership or other interest of such Person or any
Subsidiary of such Person, or (iii) 10% or more of the voting stock or
partnership or other interest of which is directly or indirectly beneficially
owned or held by such Person or a Subsidiary of such Person. The term
"control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through ownership of voting securities or partnership or other
interests, by contract or otherwise.
"Agency Account" means an account of the Borrower maintained by it
with a Clearing Bank pursuant to an Agency Account Agreement.
"Agency Account Agreement" means an agreement among the Borrower, the
Lender and a Clearing Bank (if other than the Lender) concerning the
collection of payments which represent the proceeds of Receivables or of any
other Collateral.
"Agreement" means this Agreement, including the Exhibits and
Schedules hereto, and all amendments, modifications and supplements hereto
and thereto and restatements hereof and thereof.
"Agreement Date" means the date as of which this Agreement is dated.
"Availability" means, as of the date of determination, the Borrowing
Base less the outstanding principal balance of all Loans hereunder as of such
date.
"Benefit Plan" means an employee benefit plan as defined in Section
3(35) of ERISA (other than a Multiemployer Plan) in respect of which a Person
or any Related Company is, or within the immediately
preceding 6 years was, an "employer" as defined in Section 3(5) of ERISA,
including such plans as may be established after the Agreement Date.
"Borrower" means Commissary Operations, Inc., a Tennessee
corporation, and its successors and assigns.
"Borrowing Base" means at any time an amount equal to the sum of:
(a) the lesser of
(i) 85% of the face value of Eligible Receivables due
and owing by Franchisees at such time, and
(ii) $7,500,000, plus
(b) 85% of the face value of Eligible Receivables due and owing
by Persons other than Franchisees at such time, plus
(c) 65% of the lesser of cost (computed on a first-in-first-out
basis) and fair market value of Eligible Non-Branded Inventory at such time,
plus
(d) the lesser of
(i) 25% of the lesser of cost (computed on a first-in-
first-out basis) and fair market value of Eligible Branded Inventory
at such time, and
(ii) $5,000,000, minus
(e) the Letter of Credit Reserve and such other reserves as the
Lender may determine from time to time in the exercise of its reasonable
asset based lending practices.
"Borrowing Base Certificate" means a certificate in the form of
Exhibit B attached hereto, or in such other form as the Lender may require.
"Business Day" means (a) any day other than a Saturday, Sunday or
other day on which banks in the city in which the principal office of the
Lender is located are authorized to close, and (b) in respect of any
determination with respect to a LIBOR Loan, any day referred to in clause (a)
that is also a day on which tradings are conducted in the London interbank
eurodollar market.
"Business Unit" means the assets constituting the business, or a
division or operating unit thereof, of any Person.
"Capital Expenditures" means, with respect to any Person, all
expenditures made and liabilities incurred for the acquisition of assets
(other than assets which constitute a Business Unit) which are not, in
accordance with GAAP, treated as expense items for such Person in the year
made or incurred or as a prepaid expense applicable to a future year or
years.
"Capitalized Lease" means a lease that is required to be capitalized
for financial reporting purposes in accordance with GAAP.
"Capitalized Lease Obligation" means Indebtedness represented by
obligations under a Capitalized Lease, and the amount of such Indebtedness
shall be the capitalized amount of such obligations determined in accordance
with GAAP.
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"Captain D's" means Captain D's Inc., a Delaware corporation;
provided, that for purposes of Sections 5.1(m)(v) and (vi), Captain D's means
the Captain D's division of the Parent.
"Clearing Bank" means the Lender and any other banking institution
with which an Agency Account has been established pursuant to an Agency
Account Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Collateral" means and includes all of the Borrower's right, title
and interest in and to each of the following, wherever located and whether
now or hereafter existing or now owned or hereafter acquired or arising:
(a) all Receivables,
(b) all Inventory,
(c) all Equipment,
(d) all Contract Rights,
(e) all General Intangibles,
(f) all Deposit Accounts,
(g) all Real Estate,
(h) all Investment Property;
(i) all goods and other property, whether or not delivered, (i)
the sale or lease of which gives or purports to give rise to any Receivable,
including, but not limited to, all merchandise returned or rejected by or
repossessed from customers, or (ii) securing any Receivable, including,
without limitation, all rights as an unpaid vendor or lienor (including,
without limitation, stoppage in transit, replevin and reclamation) with
respect to such goods and other properties,
(j) all mortgages, deeds to secure debt and deeds of trust on
real or personal property, guaranties, leases, security agreements and other
agreements and property which secure or relate to any Receivable or other
Collateral or are acquired for the purpose of securing and enforcing any item
thereof,
(k) all documents of title, policies and certificates of
insurance, securities, chattel paper and other documents and instruments
evidencing or pertaining to any and all items of Collateral,
(l) all files, correspondence, computer programs, tapes, disks
and related data processing software which contain information identifying or
pertaining to any of the Collateral or any Account Debtor or showing the
amounts thereof or payments thereon or otherwise necessary or helpful in the
realization thereon or the collection thereof,
(m) all cash deposited with the Lender or any Affiliate thereof
or which the Lender is entitled to retain or otherwise possess as collateral
pursuant to the provisions of this Agreement or any of the Security
Documents, and
(n) any and all products and cash and non-cash proceeds of the
foregoing (including, but not limited to, any claims to any items referred to
in this definition and any claims against third parties for loss of, damage
to or destruction of any or all of the Collateral or for proceeds payable
under or unearned premiums with respect to
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policies of insurance) in whatever form, including, but not limited to, cash,
negotiable instruments and other instruments for the payment of money,
chattel paper, security agreements and other documents.
"Contingent Insurance Obligations" means the indemnification
obligations of the Borrower in respect of bonds and letters of credit related
to self insurance and insurance policies and programs of the Borrower,
Parent, Captain D's and their Affiliates. Agreements entered into in respect
of Contingent Insurance Obligations will be on a joint and several basis
among the Borrower, the Parent, Captain D's, and their Affiliates.
"Contract Rights" means and includes, as to any Person, all of such
Person's then owned or existing and future acquired or arising rights under
contracts not yet earned by performance and not evidenced by an instrument or
chattel paper, to the extent that the same may lawfully be assigned.
"Debentures" means those certain subordinated and unsecured
debentures originally issued by TPI and subsequently assumed by the Parent
pursuant to the Indenture in the original principal amount of $51,563,000,
which are designated 8.25% Convertible Subordinated Debentures due 2002.
"Default" means any of the events specified in Section 11.1 that,
with the passage of time or giving of notice or both, would constitute an
Event of Default.
"Default Margin" means 2%.
"Deposit Accounts" means any demand, time, savings, passbook or like
account maintained with a bank, savings and loan association, credit union or
like organization, other than an account evidenced by a certificate of
deposit that is an instrument under the UCC.
"Disbursement Account" means the account maintained by and in the
name of the Borrower with the Lender for the purpose of disbursing Loan
proceeds and amounts credited thereto pursuant to Sections 2.2(b)(i) and
7.1(b)(ii).
"Dollar" and "$" means freely transferable United States dollars.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as in effect from time to time, and any successor statute.
"Effective Date" means the later of (a) the Agreement Date, and (b)
the first date on which all of the conditions set forth in Section 4.1 shall
have been fulfilled or waived by the Lender.
"Effective Interest Rate" means the rate of interest per annum on the
Loans in effect from time to time pursuant to the provisions of Section
3.1(a), (b) and (c).
"Eligible Branded Inventory" means items of Inventory of the Borrower
held for sale in the ordinary course of the business of the Borrower (but not
including packaging or shipping materials or maintenance supplies) which are
deemed by the Lender in the exercise of reasonable asset based lending
practices to be eligible for inclusion in the calculation of the Borrowing
Base as Eligible Branded Inventory. Unless otherwise approved in writing by
the Lender, no Inventory shall be deemed to be Eligible Branded Inventory
unless it meets all of the following requirements: (a) such Inventory is
owned by the Borrower, is subject to the Security Interest, which is
perfected as to such Inventory, and is subject to no other Lien whatsoever
other than a Permitted Lien; (b) such Inventory consists of raw materials or
finished goods and does not consist of work-in-process (other than meat
products that have not yet been aged but are otherwise salable as finished
goods), supplies (other than supplies held for sale) or consigned goods; (c)
such Inventory is in good condition and meets all standards applicable to
such goods, their use or sale imposed by any governmental agency, or
department or division thereof, having regulatory authority over such
matters; (d) such Inventory is currently either usable or saleable, at
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prices approximating at least the cost thereof, in the normal course of the
Borrower's business; (e) such Inventory is not obsolete or returned or
repossessed or used goods taken in trade; (f) such Inventory is located at
one of the locations listed in Schedule 5.1(u); (g) such Inventory is in the
possession and control of the Borrower and not any third party, or, if
located in a warehouse or other facility leased by the Borrower, the
warehouseman or lessor has delivered to the Lender a waiver and consent in
form and substance satisfactory to the Lender; and (h) neither such Inventory
nor any proceeds thereof is subject to any Lien, trust arrangement or other
encumbrance or title retention provision under the Packers and Stockyards Act
of 1921, the Perishable Agricultural Commodities Act, 1930, or any similar
state or federal statute.
"Eligible Non-Branded Inventory" means all Inventory of the Borrower
held for sale in the ordinary course of business of the Borrower (but not
including packaging or shipping materials or maintenance supplies) which are
deemed by the Lender in the exercise of its reasonable asset based lending
practices to be eligible for inclusion into the calculation of the Borrowing
Base as Eligible Non-Branded Inventory. Unless otherwise approved in writing
by the Lender, no Inventory shall be deemed to be Eligible Non-Branded
Inventory unless it meets all of the requirements of Eligible Branded
Inventory and, in addition, such Inventory does not consist of good that are
branded with a customer's name (such as cups, napkins, condiment packets,
etc.).
"Eligible Receivable" means the unpaid portion of a Receivable
payable in Dollars to the Borrower net of any returns, discounts, claims,
credits, charges or other allowances, offsets, deductions, counterclaims,
disputes or other defenses and reduced by the aggregate amount of all
reserves (without duplication of reserves contemplated in the definition of
"Borrowing Base"), limits and deductions provided for in this definition and
elsewhere in this Agreement which is deemed by the Lender in the exercise of
its reasonable asset based landing practices to be eligible for inclusion in
the calculation of the Borrowing Base. Unless otherwise approved in writing
by the Lender, no Receivable shall be deemed an Eligible Receivable unless it
meets all of the following requirements: (a) such Receivable is owned by the
Borrower and represents a complete bona fide transaction which requires no
further act under any circumstances on the part of the Borrower to make such
Receivable payable by the Account Debtor; (b) such Receivable is not past due
more than 85 days after its due date, which shall not be later than 113 days
after the invoice date; (c) such Receivable does not arise out of any
transaction with any Subsidiary or Affiliate of the Borrower; (d) if such
Receivable is owing by any Account Debtor which is a creditor, lessor or
supplier of the Borrower, the Borrower may only include otherwise Eligible
Receivables owing by any such Person if and to the extent that such Eligible
Receivables exceed amounts owing to any such Person; (e) such Receivable is
not owing by an Account Debtor more than 50% of whose then-existing accounts
owing to the Borrower do not meet the requirements set forth in clause b
above; (f) if the Account Debtor with respect thereto is located outside of
the United States of America, the goods which gave rise to such Receivable
were shipped after receipt by the Borrower from the Account Debtor of an
irrevocable letter of credit that has been confirmed by a financial
institution reasonably acceptable to the Lender and is in form and substance
reasonably acceptable to the Lender, payable in the full face amount of the
face value of the Receivable in Dollars at a place of payment located within
the United States and has been duly delivered to the Lender; (g) such
Receivable is not subject to the Assignment of Claims Act of 1940, as amended
from time to time, or any applicable law now or hereafter existing similar in
effect thereto, as determined in the reasonable discretion of the Lender, or
to any provision prohibiting its assignment or requiring notice of or consent
to such assignment; (h) the Borrower is not in breach of any express or
implied representation or warranty with respect to the goods the sale of
which gave rise to such Receivable; (i) the Account Debtor with respect to
such Receivable is not insolvent or the subject of any bankruptcy or
insolvency proceedings of any kind or of any other proceeding or action,
threatened or pending, which might, in the Lender's reasonable judgment, have
a materially adverse effect on such Account Debtor; (j) the goods the sale of
which gave rise to such Receivable were shipped or delivered to the Account
Debtor on an absolute sale basis and not on a xxxx and hold sale basis, a
consignment sale basis, a guaranteed sale basis, a sale or return basis or on
the basis of any other similar understanding, and such goods have not been
returned or rejected; (k) if such Receivable is owing by any Account Debtor
which, together with all affiliated Account Debtors, has then-existing
Receivables owing to the Borrower that exceed, in aggregate face amount, 25%
of the Borrower's total Eligible Receivables, any otherwise Eligible
Receivables in excess of such percentage shall be excluded from Eligible
Receivables; (l) such Receivable is evidenced by an invoice or other
documentation in form reasonably acceptable to the Lender containing only
terms normally offered by the
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Borrower, and dated not earlier than two days prior to the date of shipment;
(m) such Receivable is a valid, legally enforceable obligation of the Account
Debtor with respect thereto and is not subject to any present, or contingent
(and no facts exist which are the basis for any future), offset, deduction or
counterclaim, dispute or other defense on the part of such Account Debtor;
(n) such Receivable is not evidenced by chattel paper or an instrument of any
kind, unless such chattel paper or instrument has been delivered and endorsed
and/or assigned to the Lender; (o) if such Receivable arises from the
performance of services, such services have been fully performed; and (p)
such Receivable is subject to the Security Interest, which is perfected as to
such Receivable, and is subject to no other Lien whatsoever other than a
Permitted Lien and the goods giving rise to such Receivable were not, at the
time of the sale thereof, subject to any Lien other than a Permitted Lien,
and (a) neither such Receivable nor any proceeds thereof is subject to any
Lien, trust arrangement or other encumbrance or title retention provision
under the Packers and Stockyards Act of 1921, the Perishable Agricultural
Commodities Act, 1930, or any similar state or federal statute.
"Environmental Indemnity Agreement" means the Environmental Indemnity
Agreement, executed by the Borrower in favor of the Lender, with respect to
each parcel of Mortgaged Real Estate.
"Environmental Laws" means all federal, state, local and foreign laws
now or hereafter in effect relating to pollution or protection of the
environment, including laws relating to emissions, discharges, releases or
threatened releases of pollutants, contaminants, chemicals or industrial,
toxic or hazardous substances or wastes into the environment (including,
without limitation, ambient air, surface water, ground water or land) or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, removal, transport or handling of pollutants,
contaminants, chemicals or industrial, toxic or hazardous substances or
wastes, and any and all regulations, notices or demand letters issued,
entered, promulgated or approved thereunder.
"Equipment" means and includes, as to any Person, all of such
Person's then owned or existing and future acquired or arising machinery,
apparatus, equipment, motor vehicles, tractors, trailers, rolling stock,
fittings, and other tangible personal property (other than Inventory) of
every kind and description used in such Person's business operations or owned
by such Person or in which such Person has an interest and all parts,
accessories and special tools and all increases and accessions thereto and
substitutions and replacements therefor.
"Event of Default" means any of the events specified in Section 11.1.
"Existing Subsidiary" shall have the meaning set forth in the
Indenture.
"Facility" means the facility for the Loans in the principal sum of
up to $30,000,000, as the same may be reduced pursuant to Section 3.11(c).
"Financing Statements" means the Uniform Commercial Code financing
statements executed and delivered by the Borrower to the Lender, naming the
Lender as secured party and the Borrower as debtor, in connection with this
Agreement.
"Fixed Charges" means, for any period, (a) Interest Expense, plus (b)
payments of principal scheduled to be made with respect to Indebtedness
(other than Subordinated Indebtedness and payments under the Loans),
including payments with respect to Capitalized Leases.
"Franchisee" means any Person that has entered into a franchise or
similar agreement with the Parent, Captain D's or any other Affiliate of the
Borrower to operate a restaurant.
"GAAP" means generally accepted accounting principles consistently
applied and maintained throughout the period indicated and consistent with
the prior financial practice of the Person referred to.
"General Intangibles" means, as to any Person, all of such Person's
then owned or existing and future acquired or arising general intangibles,
choses in action and causes of action and all other intangible personal
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property of such Person of every kind and nature (other than Receivables),
including, without limitation, Intellectual Property, corporate or other
business records, inventions, designs, blueprints, plans, specifications,
trade secrets, goodwill, computer software, customer lists, registrations,
licenses, franchises, tax refund claims, reversions or any rights thereto and
any other amounts payable to such Person from any Benefit Plan, Multi-
employer Plan or other employee benefit plan, rights and claims against
carriers and shippers, rights to indemnification, business interruption
insurance and proceeds thereof, property, casualty or any similar type of
insurance and any proceeds thereof, proceeds of insurance covering the lives
of key employees on which such Person is beneficiary and any letter of
credit, guarantee, claims, security interest or other security held by or
granted to such Person to secure payment by an Account Debtor of any of the
Receivables.
"Governmental Approvals" means all authorizations, consents,
approvals, licenses and exemptions of, registrations and filings with, and
reports to, all governmental bodies, whether federal, state, local, foreign
national or provincial, and all agencies thereof.
"Governmental Authority" means any government or political
subdivision or any agency, authority, bureau, central bank, commission,
department or instrumentality of either, or any court, tribunal, grand jury
or arbitrator, in each case whether foreign or domestic.
"Guaranty", "Guaranteed" or to "Guarantee," as applied to any
obligation of another Person shall mean and include
(a) a guaranty (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), directly or
indirectly, in any manner, of any part or all of such obligation of such
other Person, and
(b) an agreement, direct or indirect, contingent or otherwise,
and whether or not constituting a guaranty, the practical effect of which is
to assure the payment or performance (or payment of damages in the event of
nonperformance) of any part or all of such obligation of such other Person
whether by (i) the purchase of securities or obligations, (ii) the purchase,
sale or lease (as lessee or lessor) of property or the purchase or sale of
services primarily for the purpose of enabling the obligor with respect to
such obligation to make any payment or performance (or payment of damages in
the event of nonperformance) of or on account of any part or all of such
obligation or to assure the owner of such obligation against loss, (iii) the
supplying of funds to, or in any other manner investing in, the obligor with
respect to such obligation, (iv) repayment of amounts drawn down by
beneficiaries of letters of credit issued for the account of such other
Person, or (v) the supplying of funds to or investing in such other Person on
account of all or any part of such Person's obligation under a guaranty of
any obligation or indemnifying or holding harmless, in any way, such Person
against any part or all of such obligation.
"Indebtedness" of any Person means, without duplication, (a) all
obligations for money borrowed or for the deferred purchase price of property
or services or in respect of reimbursement obligations under letters of
credit, (b) all obligations represented by bonds, debentures, notes and
accepted drafts that represent extensions of credit, (c) Capitalized Lease
Obligations, (d) all obligations (including, during the noncancellable term
of any lease in the nature of a title retention agreement, all future payment
obligations under such lease discounted to their present value in accordance
with GAAP) secured by any Lien to which any property or asset owned or held
by such Person is subject, whether or not the obligation secured thereby
shall have been assumed by such Person, (e) all obligations of other Persons
which such Person has Guaranteed, including, but not limited to, all
obligations of such Person consisting of recourse liability with respect to
accounts receivable sold or otherwise disposed of by such Person, and (f) in
the case of the Borrower (without duplication) the Loans.
"Indenture" shall mean that certain Indenture dated as of July 15,
1992, as amended by that First Supplemental Indenture dated as of September
9, 1996, between and among the Parent (as successor to TPI pursuant to the
First Supplemental Indenture), TPI and The Bank of New York as trustee,
pursuant to which the Debentures were issued.
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"Initial Loans" means the Loan made to the Borrower on the Effective
Date.
"Intellectual Property" means, as to any Person, all of such Person's
then owned existing and future acquired or arising patents, patent rights,
copyrights, works which are the subject of copyrights, trademarks, service
marks, trade names, trade styles, patent, trademark and service xxxx
applications, and all licenses and rights related to any of the foregoing and
all other rights under any of the foregoing, all extensions, renewals,
reissues, divisions, continuations and continuations-in-part of any of the
foregoing and all rights to xxx for past, present and future infringements of
any of the foregoing.
"Interbank Offered Rate" means, with respect to any LIBOR Loan for
the Interest Period applicable thereto, the average (rounded upward to the
nearest one-sixteenth (1/16) of one percent) per annum rate of interest
determined by the Lender (each such determination to be conclusive and
binding absent manifest error) as of two Business Days prior to the first day
of such Interest Period from Telerate Page 3750 as the effective rate at
which deposits in immediately available funds in Dollars are being offered or
quoted to major banks in the interbank market for eurodollar deposits for a
term comparable to such Interest Period and in the amount of the LIBOR Loan.
If such rate is unavailable from such service, then such rate may be
determined by the Lender from any other interest rate reporting service of
recognized standing that the Lender shall select.
"Interest Expense" means interest on Indebtedness during the period
for which computation is being made, excluding (a) the amortization of fees
and costs incurred with respect to the closing of loans which have been
capitalized as transaction costs, and (b) interest payable in kind.
"Interest Payment Date" means the first day of each calendar month
commencing on October 1, 2000 and continuing thereafter until the Secured
Obligations have been irrevocably paid in full.
"Interest Period" means, with respect to each LIBOR Loan, the period
commencing on the date of the making or continuation of or conversion to such
LIBOR Loan and ending one, two, three or six months thereafter, as the
Borrower may elect in the applicable Notice of Borrowing or Notice of
Conversion or Continuation; provided, that:
(a) any Interest Period that would otherwise end on a
day that is not a Business Day shall, subject to the provisions of
clause (c) below, be extended to the next succeeding Business Day
unless such Business Day falls in the next calendar month, in which
case such Interest Period shall end on the immediately preceding
Business Day;
(b) any Interest Period that begins on the last Business
Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of
such Interest Period) shall, subject to clause (c) below, end on the
last Business Day of a calendar month;
(c) any Interest Period that would otherwise end after
the Termination Date shall end on the Termination Date; and
(d) notwithstanding clause (c) above, no Interest Period
shall have a duration of less than one month, and, if any applicable
Interest Period would be for a shorter period, such Interest Period
shall not be available hereunder.
"Inventory" means and includes, as to any Person, all of such
Person's then owned or existing and future acquired or arising (a) goods
intended for sale or lease or for display or demonstration, (b) work in
process, (c) raw materials and other materials and supplies of every nature
and description used or which might be used in connection with the
manufacture, packing, shipping, advertising, selling, leasing or furnishing
of goods or otherwise used or consumed in the conduct of business, and (d)
documents evidencing and general intangibles relating to any of the
foregoing.
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"Investment" means, with respect to any Person: (a) the direct or
indirect purchase or acquisition of any beneficial interest in, any share of
capital stock of, evidence of Indebtedness of or other security issued by any
other Person, (b) any loan, advance or extension of credit to, or
contribution to the capital of, any other Person, excluding advances to
employees in the ordinary course of business for business expenses, (c) any
Guaranty of the obligations of any other Person, or (d) any commitment or
option to take any of the actions described in clauses (a), (b) or (c) above.
"Investment Property" means all of the Borrower's investment property
(as defined in the UCC), including all of the Borrower's right, title and
interest in and to any and all: (a) securities, whether certificated or
uncertificated, (b) securities entitlements, (c) securities accounts, (d)
commodity contracts, and (e) commodity accounts, as each such term is defined
in the UCC.
"Lease Agreement" means that certain Ground Lease Agreement dated as
of August 31, 2000, by and between the Borrower, as lessee, and the Parent,
as lessor, providing for a ground lease of the Nashville Meat Processing
Plant.
"Lender" means Bank of America, N.A., a national banking association,
and its successors and assigns.
"Lender's Office" means the office of the Lender specified in or
determined in accordance with the provisions of Section 12.1(c).
"Letter of Credit" means any letter of credit issued by the Lender
for the account of the Borrower.
"Letter of Credit Documents" means each of the documents, agreements
and other writings required by the Lender to be executed and/or delivered in
connection with the issuance of a Letter of Credit, including, without
limitation, each letter of credit application and reimbursement agreement.
"Letter of Credit Facility" means, at any time, obligations arising
under Letters of Credit in an aggregate face amount not to exceed $5,000,000
incurred pursuant to Section 2.6.
"Letter of Credit Reserve" means, at any time, 100% of the sum of (i)
the aggregate undrawn amount of all Letters of Credit outstanding at such
time, plus (ii) the aggregate amount of all drawings under Letters of Credit
for which the Lender has not been reimbursed.
"LIBOR" means, with respect to the Interest Period applicable
thereto, a simple per annum interest rate determined pursuant to the
following formula:
LIBOR = Interbank Offered Rate
------------------------------
1 - LIBOR Reserve Percentage
LIBOR shall be adjusted automatically as of the effective date of any change
in the LIBOR Reserve Percentage.
"LIBOR Loan" means any Loan bearing interest at the time in question
determined with reference to LIBOR.
"LIBOR Reserve Percentage" means, for any day, that percentage
(expressed as a decimal) which is in effect from time to time under
Regulation D of the Board of Governors of the Federal Reserve System, as such
regulation may be amended from time to time, or any successor regulation, as
the maximum reserve requirement (including, without limitation, any basic,
supplemental, emergency, special or marginal reserves) applicable to any
member bank with respect to Eurocurrency liabilities as that term is defined
in Regulation D (or against any other category of liabilities that includes
deposits by reference to which the interest rate of any LIBOR Loan is
determined), whether or not Lender has any Eurocurrency liabilities subject
to such reserve requirement at that
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time. All LIBOR Loans shall be deemed subject to reserve requirements
without the benefit of credits for proration, exceptions or offsets that may
be available from time to time to Lender.
"Lien" as applied to the property of any Person means: (a) any
mortgage, deed to secure debt, deed of trust, lien, pledge, charge, lease
constituting a Capitalized Lease Obligation, conditional sale, constructive
trust or other title retention agreement, or other security interest,
security title or encumbrance of any kind in respect of any property of such
Person or upon the income or profits therefrom, (b) any arrangement, express
or implied, under which any property of such Person is transferred,
sequestered or otherwise identified for the purpose of subjecting the same to
the payment of Indebtedness or performance of any other obligation in
priority to the payment of the general, unsecured creditors of such Person,
(c) any Indebtedness which is unpaid more than 30 days after the same shall
have become due and payable and which if unpaid might by law (including, but
not limited to, bankruptcy and insolvency laws) or otherwise be given any
priority whatsoever over general unsecured creditors of such Person, and (d)
the filing of, or any agreement to give, any financing statement under the
UCC or its equivalent in any jurisdiction.
"Loans" means loans made to the Borrower pursuant to Section 2.1.
"Loan Documents" means, collectively, this Agreement, the Note, the
Security Documents and each other instrument, agreement and document executed
and delivered by the Borrower or any other Obligor in connection with this
Agreement.
"Lockbox" means the U.S. Post Office Box(es) specified in,
established pursuant to, or governed by, an Agency Account Agreement.
"Materially Adverse Effect" means, with respect to any Person, any
act, omission, event or undertaking which would, singly or in the aggregate,
have a materially adverse effect upon (a) the business, assets, properties,
liabilities, condition (financial or otherwise), or results of operations of
such Person or any of its Subsidiaries, (b) in the case of the Borrower only,
the respective ability of the Borrower or any of its Subsidiaries to perform
any obligations under this Agreement or any other Loan Document to which it
is a party, or (c) in the case of the Borrower only, the legality, validity,
binding effect, enforceability or admissibility into evidence of any Loan
Document or the ability of Lender to enforce any rights or remedies under or
in connection with any Loan Document; in any case, whether resulting from any
single act, omission, situation, status, event, or undertaking, together with
other such acts, omissions, situations, statuses, events, or undertakings.
"Money Borrowed" means, as applied to Indebtedness, (a) Indebtedness
for money borrowed, (b) Indebtedness, whether or not in any such case the
same was for money borrowed, (i) represented by notes payable and drafts
accepted, that represent extensions of credit, (ii) constituting obligations
evidenced by bonds, debentures, notes or similar instruments, or (iii) upon
which interest charges are customarily paid (other than trade Indebtedness)
or that was issued or assumed as full or partial payment for property, (c)
Indebtedness that constitutes a Capitalized Lease Obligation, and (d)
Indebtedness that is such by virtue of clause (f) of the definition thereof,
but only to the extent that the obligations Guaranteed are obligations that
would constitute Indebtedness for Money Borrowed.
"Mortgaged Real Estate" means, collectively, the interests in real
property in which a Lien has been granted pursuant to the Mortgages.
"Mortgages" means, collectively, (i) that certain Deed of Trust,
Assignment and Security Agreement dated as of August 31, 2000, executed by
the Borrower in favor of the Lender and covering the Borrower's fee interest
in the real property located in Davidson County, Tennessee, as more fully
described in such Deed of Trust, Assignment and Security Agreement; (ii) that
certain Deed of Trust, Assignment and Security Agreement dated as of August
31, 2000, executed by the Borrower and the Parent in favor of the Lender and
covering the Borrower's leasehold and fee interests and the Parent's fee
interest in the real property located in Davidson County, Tennessee, as more
fully described in such Deed of Trust, Assignment and Security
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Agreement; (iii) that certain Deed of Trust, Assignment and Security
Agreement dated as of August 31, 2000, executed by the Borrower in favor of
the Lender and covering the Borrower's fee interest in the real property
located in Xxxxxxx County, West Virginia, as more fully described in such
Deed of Trust, Assignment and Security Agreement; and (iv) that certain
Mortgage, Assignment and Fixture Instrument dated as of August 31, 2000,
executed by the Borrower in favor of the of Lender and covering the
Borrower's fee interest in the real property located in Sedgwick County,
Kansas, as more fully described in such Mortgage, Assignment and Fixture
Instrument.
"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA to which the Borrower or a Related Company is
required to contribute or has contributed within the immediately preceding 6
years.
"Net Income" or "Net Loss" means, as applied to any Person, the net
income (or net loss) of such Person for the period in question after giving
effect to deduction of or provision for all operating expenses, all taxes and
reserves (including reserves for deferred taxes and all other proper
deductions), all determined in accordance with GAAP, provided that there
shall be excluded: (a) the net income (or net loss) of any Person accrued
prior to the date it becomes a Subsidiary of, or is merged into or
consolidated with, the Person whose Net Income is being determined or a
Subsidiary of such Person, (b) the net income (or net loss) of any Person in
which the Person whose Net Income is being determined or any Subsidiary of
such Person has an ownership interest, except, in the case of net income, to
the extent that any such income has actually been received by such Person or
such Subsidiary in the form of cash dividends or similar distributions, (c)
any restoration of any contingency reserve, except to the extent that
provision for such reserve was made out of income during such period, (d) any
net gains or losses on the sale or other disposition, not in the ordinary
course of business, of Investments, Business Units and other capital assets,
provided that there shall also be excluded any related charges for taxes
thereon, (e) any net gain arising from the collection of the proceeds of any
insurance policy, (f) any write-up of any asset, and (g) any other
extraordinary item.
"Net Worth" of any Person means the total shareholders' equity
(including capital stock, additional paid-in capital and retained earnings,
after deducting treasury stock) which would appear as such on a balance sheet
of such Person prepared in accordance with GAAP.
"Note" means the promissory note made by the Borrower payable to the
order of the Lender evidencing the obligation of the Borrower to pay the
aggregate unpaid principal amount of all Loans made to it by the Lender (and
any promissory note or notes that may be issued from time to time in
substitution, renewal, extension, replacement or exchange therefor, whether
payable to the Lender or a different lender, whether issued in connection
with a Person becoming a lender after the Effective Date or otherwise),
substantially in the form of Exhibit A hereto, with all blanks properly
completed.
"Notice of Borrowing" has the meaning set forth in Section
2.2(a)(iii).
"Notice of Conversion or Continuation" has the meaning set forth in
Section 3.3.
"Obligor" means the Borrower, each party to the Security Documents
(other than the Lender), and each other party at any time primarily or
secondarily, directly or indirectly, liable on any of the Secured
Obligations.
"Operating Lease" means any lease (other than a lease constituting
a Capitalized Lease) of real or personal property.
"Parent" means Shoney's Inc., a Tennessee corporation.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor agency.
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"Permitted Indebtedness for Money Borrowed" means (a) Permitted
Purchase Money Indebtedness, and (b) Subordinated Indebtedness.
"Permitted Investments" means Investments of the Borrower in: (a)
negotiable certificates of deposit, time deposits and banker's acceptances
issued by the Lender or any Affiliate of the Lender or by any United States
bank or trust company having capital, surplus and undivided profits in excess
of $250,000,000, (b) any direct obligation of the United States of America or
any agency or instrumentality thereof which has a remaining maturity at the
time of purchase of not more than one year and repurchase agreements relating
to the same, (c) sales on credit in the ordinary course of business on terms
customary in the industry, but excluding sales to Parent, Captain D's, or any
other Affiliate of the Borrower, (d) sales on credit in the ordinary course
of business to Parent, Captain D's, or any other Affiliate of the Borrower on
terms customary to the industry, provided that the aggregate amount of
Investments under this clause (d) shall not exceed at any one time
outstanding the greater of (x) $5,500,000 and (y) the gross amount of the
Borrower's sales during the immediately preceding week, and (e) notes,
accepted in the ordinary course of business, evidencing overdue accounts
receivable (other than accounts receivable owing by Parent, Captain D's, or
any other Affiliate of the Borrower) arising in the ordinary course of
business.
"Permitted Liens" means: (a) Liens securing taxes, assessments and
other governmental charges or levies (excluding any Lien imposed pursuant to
any of the provisions of ERISA) or the claims of materialmen, mechanics,
carriers, warehousemen or landlords for labor, materials, supplies or rentals
incurred in the ordinary course of business, but (i) in all cases, only if
payment shall not at the time be required to be made in accordance with
Section 8.4, and (ii) in the case of warehousemen or landlords controlling
locations where Inventory is located, only if such liens have been waived or
subordinated to the Security Interest in a manner reasonably satisfactory to
the Lender; (b) Liens consisting of deposits or pledges made in the ordinary
course of business in connection with, or to secure payment of, obligations
under workers' compensation, unemployment insurance or similar legislation or
under surety or performance bonds, in each case arising in the ordinary
course of business (provided that in no event shall this clause (b) be
construed to permit any Lien securing, or otherwise arising in connection
with, any portion of the Contingent Insurance Obligations attributable to any
Person other than the Borrower); (c) Liens constituting encumbrances in the
nature of zoning restrictions, easements and rights or restrictions of record
on the use of the Borrower's real estate, which in the reasonable judgment of
the Lender do not materially detract from the value of such real estate or
impair the use thereof in the business of the Borrower; (d) Purchase Money
Liens securing Permitted Purchase Money Indebtedness; (e) Liens of the Lender
arising under this Agreement and the other Loan Documents; and (f) Liens
arising out of or resulting from any judgment or award, the time for the
appeal or petition for rehearing of which shall not have expired, or in
respect of which the Borrower is fully protected by insurance or in respect
of which the Borrower shall at any time in good faith be prosecuting an
appeal or proceeding for a review and in respect of which a stay of execution
pending such appeal or proceeding for review shall have been secured, and as
to which appropriate reserves have been established on the books of the
Borrower.
"Permitted Purchase Money Indebtedness" means Purchase Money
Indebtedness secured only by Purchase Money Liens and Capitalized Lease
Obligations up to an aggregate amount outstanding at any time equal to
$500,000.
"Person" means an individual, corporation, partnership, association,
trust or unincorporated organization or a government or any agency or
political subdivision thereof.
"Prime Rate" means during the period from the Effective Date through
the last day of the month in which the Effective Date falls, the per annum
rate of interest publicly announced by the Lender at its principal office as
its "prime rate" as in effect on the Effective Date , and thereafter during
each succeeding calendar month, means such "prime rate" as in effect on the
last Business Day of the immediately preceding calendar month. Any change in
an interest rate resulting from a change in the Prime Rate shall become
effective as of 12:01 a.m. on the first day of the month following the month
in which such change was announced. The Prime
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Rate is a reference used by the Lender in determining interest rates on
certain loans and is not intended to be the lowest rate of interest charged
on any extension of credit to any debtor.
"Prime Rate Loan" means a Loan bearing interest at the time in
question determined with reference to the Prime Rate.
"Purchase Money Indebtedness" means Indebtedness created to finance
the payment of all or any part of the purchase price (not in excess of the
fair market value thereof) of any tangible asset (other than Inventory) and
incurred at the time of or within 20 days prior to or after the acquisition
of such tangible asset.
"Purchase Money Lien" means any Lien securing Purchase Money
Indebtedness, but only if such Lien shall at all times be confined solely to
the tangible asset (other than Inventory) the purchase price of which was
financed through the incurrence of the Purchase Money Indebtedness secured by
such Lien.
"Real Estate" means all of the Borrower's now owned or hereafter
acquired estates in real property, including, without limitation, all fees,
leaseholds, future interests and easements, together with all of the
Borrower's now owned or hereafter acquired interests in the improvements and
emblements thereon, the fixtures attached thereto and the easements
appurtenant thereto.
"Receivables" means and includes, as to any Person, all of such
Person's then owned or existing and future acquired or arising (a) rights to
the payment of money or other forms of consideration of any kind (whether
classified under the UCC as accounts, contract rights, chattel paper, general
intangibles or otherwise) including, but not limited to, accounts receivable,
letters of credit and the right to receive payment thereunder, chattel paper,
tax refunds, insurance proceeds, Contract Rights, notes, drafts, instruments,
documents, acceptances and all other debts, obligations and liabilities in
whatever form from any Person and guaranties, security and Liens securing
payment thereof, (b) goods, whether now owned or hereafter acquired, and
whether sold, delivered, undelivered, in transit or returned, which may be
represented by, or the sale or lease of which may have given rise to, any
such right to payment or other debt, obligation or liability, and (c) cash
and non-cash proceeds of any of the foregoing.
"Redemption Price" shall have the meaning set forth in the Indenture.
"Related Company" means, as to any Person, any (a) corporation which
is a member of the same controlled group of corporations (within the meaning
of Section 414(b) of the Code) as such Person, (b) partnership or other trade
or business (whether or not incorporated) under common control (within the
meaning of Section 414(c) of the Code) with such Person, or (c) member of the
same affiliated service group (within the meaning of Section 414(m) of the
Code) as such Person or any corporation described in clause (a) above or any
partnership, trade or business described in clause (b) above.
"Repurchase Price" shall have the meaning set forth in the Indenture.
"Restricted Distribution" by any Person means (a) its retirement,
redemption, purchase, or other acquisition for value of any capital stock or
other equity securities or partnership interests issued by such Person, (b)
the declaration or payment of any dividend or distribution on or with respect
to any such securities or partnership interests, (c) any loan or advance by
such Person to, or other investment by such Person in, the holder of any of
such securities or partnership interests, and (d) any other payment by such
Person in respect of such securities or partnership interests.
"Restricted Payment" means (a) any redemption, repurchase or
prepayment or other retirement, prior to the stated maturity thereof or prior
to the due date of any regularly scheduled installment or amortization
payment with respect thereto, of any Indebtedness of a Person (other than the
Secured Obligations and trade debt), and (b) the payment by any Person of the
principal amount of or interest on any Indebtedness (other than trade debt)
owing to an Affiliate of such Person.
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"Schedule of Equipment" means a schedule delivered by the Borrower
to the Lender pursuant to the provisions of Section 7.14(c).
"Schedule of Inventory" means a schedule delivered by the Borrower
to the Lender pursuant to the provisions of Section 7.14(b).
"Schedule of Receivables" means a schedule delivered by the Borrower
to the Lender pursuant to the provisions of Section 7.14(a).
"Secured Obligations" means, in each case whether now in existence
or hereafter arising, (a) the principal of and interest and premium, if any,
on the Loans, (b) all reimbursement and other obligations relating to Letters
of Credit, and (c) all indebtedness, liabilities, obligations, overdrafts,
covenants and duties of the Borrower to the Lender or any Affiliate of the
Lender of every kind, nature and description, direct or indirect, absolute or
contingent, due or not due, contractual or tortious, liquidated or
unliquidated, and whether or not evidenced by any note and whether or not for
the payment of money, in each case to the extent arising under or in respect
of this Agreement, the Note or any of the other Loan Documents.
"Security Documents" means each of (a) the Financing Statements, (b)
the Mortgages, and (c) each other writing executed and delivered by any
Person securing the Secured Obligations or evidencing such security.
"Security Interest" means the Liens of the Lender on and in the
Collateral effected hereby or by any of the Security Documents or pursuant to
the terms hereof or thereof.
"Subordinated Indebtedness" means any Indebtedness for Money Borrowed
of the Borrower which is subordinated to the Secured Obligations on terms and
conditions acceptable to the Lender in its sole discretion.
"Subsidiary" when used to determine the relationship of a Person to
another Person, means a Person of which an aggregate of 50% or more of the
stock of any class or classes or 50% or more of other ownership interests is
owned of record or beneficially by such other Person or by one or more
Subsidiaries of such other Person or by such other Person and one or more
Subsidiaries of such Person, (i) if the holders of such stock or other
ownership interests (A) are ordinarily, in the absence of contingencies,
entitled to vote for the election of a majority of the directors (or other
individuals performing similar functions) of such Person, even though the
right so to vote has been suspended by the happening of such a contingency,
or (B) are entitled, as such holders, to vote for the election of a majority
of the directors (or individuals performing similar functions) of such
Person, whether or not the right so to vote exists by reason of the happening
of a contingency, or (ii) in the case of such other ownership interests, if
such ownership interests constitute a majority voting interest.
"Tangible Net Worth" means, as applied to any Person, the Net Worth
of such Person at the time in question, after deducting therefrom all amounts
due from Affiliates and the amount of all intangible items reflected therein,
including all unamortized debt discount and expense, unamortized research and
development expense, unamortized deferred charges, goodwill, Intellectual
Property, unamortized excess cost of investment in Subsidiaries over equity
at dates of acquisition, and all similar items which should properly be
treated as intangibles in accordance with GAAP.
"Tax Sharing Agreement" means an agreement among the Borrower, the
Parent, Captain D's, and certain other Subsidiaries of the Parent providing
for the sharing of tax liabilities among the Parent and its consolidated
Subsidiaries.
"Termination Date" means August 31, 2003 or such later date to which
the termination of the Facility shall be extended pursuant to Section 2.5.
"Termination Event" means (a) a "Reportable Event" as defined in
Section 4043(b) of ERISA, but excluding any such event as to which the
provision for 30 days' notice to the PBGC is waived under applicable
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regulations, (b) the filing of a notice of intent to terminate a Benefit Plan
or the treatment of a Benefit Plan amendment as a termination under Section
4041 of ERISA, or (c) the institution of proceedings to terminate a Benefit
Plan by the PBGC under Section 4042 of ERISA or the appointment of a trustee
to administer any Benefit Plan.
"TPI" means TPI Restaurants, Inc., a Tennessee corporation.
"Type" means, with respect to a Loan, its classification as a LIBOR
Loan or Prime Rate Loan.
"UCC" means the Uniform Commercial Code as in effect from time to
time in the State of Georgia.
"Unfunded Capital Expenditures" means Capital Expenditures which are
paid for by a Person other than with the proceeds of Indebtedness for Money
Borrowed (other than the Loans) incurred to finance such Capital Expenditures
and other than those represented by Capitalized Lease Obligations.
"Unfunded Vested Accrued Benefits" means, with respect to any Benefit
Plan at any time, the amount (if any) by which (a) the present value of all
vested nonforfeitable benefits under such Benefit Plan exceeds (b) the fair
market value of all Benefit Plan assets allocable to such benefits, as
determined using such reasonable actuarial assumptions and methods as are
specified in the Schedule B (Actuarial Information) to the most recent Annual
Report (Form 5500) filed with respect to such Benefit Plan.
Section 1.2 Other Referential Provisions.
(a) All terms in this Agreement, the Exhibits and Schedules
hereto shall have the same defined meanings when used in any other Loan
Documents, unless the context shall require otherwise.
(b) Except as otherwise expressly provided herein, all accounting
terms not specifically defined or specified herein shall have the meanings
generally attributed to such terms under GAAP including, without limitation,
applicable statements and interpretations issued by the Financial Accounting
Standards Board and bulletins, opinions, interpretations and statements
issued by the American Institute of Certified Public Accountants or its
committees.
(c) All personal pronouns used in this Agreement, whether used
in the masculine, feminine or neuter gender, shall include all other genders;
the singular shall include the plural, and the plural shall include the
singular.
(d) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as
a whole and not to any particular provisions of this Agreement.
(e) Titles of Articles and Sections in this Agreement are for
convenience only, do not constitute part of this Agreement and neither limit
nor amplify the provisions of this Agreement, and all references in this
Agreement to Articles, Sections, Subsections, paragraphs, clauses,
subclauses, Schedules or Exhibits shall refer to the corresponding Article,
Section, Subsection, paragraph, clause or subclause of, or Schedule or
Exhibit attached to, this Agreement, unless specific reference is made to the
articles, sections or other subdivisions or divisions of, or to schedules or
exhibits to, another document or instrument.
(f) Each definition of a document in this Agreement shall include
such document as amended, modified, supplemented or restated from time to
time in accordance with the terms of this Agreement.
(g) Except where specifically restricted, reference to a party
to a Loan Document includes that party and its successors and assigns
permitted hereunder or under such Loan Document.
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(h) Unless otherwise specifically stated, whenever a time is
referred to in this Agreement or in any other Loan Document, such time shall
be the local time in the city in which the principal office of Lender is
located.
(i) Whenever the phrase "to the knowledge of the Borrower" or
words of similar import relating to the knowledge of the Borrower are used
herein, such phrase shall mean and refer to (i) the actual knowledge of the
President or chief financial officer or (ii) the knowledge that such officers
would have obtained if they had engaged in good faith in the diligent
performance of their duties, including the making of such reasonably specific
inquiries as may be necessary of the appropriate persons in a good faith
attempt to ascertain the accuracy of the matter to which such phrase relates.
(j) The terms accounts, chattel paper, documents, equipment,
instruments, general intangibles and inventory, as and when used (without
being capitalized) in this Agreement or the Security Documents, shall have
the meanings given those terms in the UCC.
Section 1.3 Exhibits and Schedules. All Exhibits and Schedules
attached hereto are by reference made a part hereof.
ARTICLE 2 - REVOLVING CREDIT FACILITY
A. REVOLVING CREDIT FACILITY
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Section 2.1 Loans. Upon the terms and subject to the conditions
of, and in reliance upon the representations and warranties made under, this
Agreement, the Lender shall make Loans to the Borrower from time to time from
the Effective Date to the Termination Date, as requested by the Borrower in
accordance with the terms of Section 2.2, in an aggregate principal amount
outstanding not to exceed at any time the lesser of (a) the Facility minus
the Letter of Credit Reserve and (b) the Borrowing Base. It is expressly
understood and agreed that the Lender may and at present intends to use the
lesser of the amounts referred to in the foregoing subclauses (a) and (b) as
a maximum ceiling on Loans; provided, however, that it is agreed that should
Loans exceed the ceiling so determined or any other limitation set forth in
this Agreement, such Loans shall nevertheless constitute Secured Obligations
and, as such, shall be entitled to all benefits thereof and security
therefor. The principal amount of any Loan which is repaid may be reborrowed
by the Borrower in accordance with the terms of this Section 2.1. The Lender
is hereby authorized to record each repayment of principal of the Loans in
its books and records, such books and records constituting prima facie
evidence absent manifest error of the accuracy of the information contained
therein.
Section 2.2 Manner of Borrowing Loans. Borrowings of the Loans
shall be made as follows:
(a) Requests for Borrowing.
(i) Prime Rate Loans. A request for the borrowing of a
Prime Rate Loan shall be made, or shall be deemed to be made, in the
following manner:
(A) the Borrower may request a Prime Rate Loan
by notifying the Lender, before 12:00 noon (Eastern time) on
the proposed borrowing date, of its intention to borrow,
specifying the effective date and amount of such proposed
Prime Rate Loan;
(B) whenever a check is presented to the Lender
for payment against the Disbursement Account in an amount
greater than the then available balance in such account,
such presentation shall be deemed to be a request for a
Prime Rate Loan on the date of such presentation in an
amount equal to the excess of such check over such available
balance, and such request shall be irrevocable;
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(C) unless payment is otherwise made by the
Borrower, the becoming due of any amount required to be paid
under this Agreement or the Note as interest shall be deemed
to be a request for a Prime Rate Loan on the due date in the
amount required to pay such interest, and such request shall
be irrevocable;
(D) unless payment is otherwise made by the
Borrower, the maturity of any Secured Obligation required to
be paid shall be deemed to be a request for a Prime Rate
Loan on the due date in the amount required to pay such
Secured Obligation, and such request shall be irrevocable;
and
(E) whenever a drawing is made under a Letter
of Credit and the Borrower fails to reimburse the Lender
therefor, such failure to reimburse shall be deemed to be a
request for a Prime Rate Loan on the date of such failure to
reimburse in the amount so unreimbursed, and such request
shall be irrevocable.
(ii) LIBOR Loans. The Borrower may request a LIBOR Loan
by notifying the Lender (which notice shall be irrevocable) not later
than 12:00 noon (Eastern time) on the date two Business Days before
the day on which the requested LIBOR Loan is to be made, specifying
the effective date and amount of such LIBOR Loan and the duration of
the applicable Interest Period; provided that, notwithstanding
anything to the contrary contained in this Agreement, if an Event of
Default exists the Borrower shall not have the right to request LIBOR
Loans.
(iii) Notice of Borrowing. Any request for a Prime Rate
Loan under Section 2.2(a)(i)(A) or a LIBOR Loan under Section
2.2(a)(ii) (a "Notice of Borrowing") shall be made by telephone or
in writing (including telecopy) and, in the case of any telephonic
notice, shall be immediately followed by a written confirmation
thereof in a form acceptable to the Lender, provided that the failure
to provide written confirmation shall not invalidate any telephonic
notice and, if such written confirmation differs in any respect from
the action taken by the Lender, the records of the Lender shall
control absent manifest error.
(b) Disbursement of Loans. The Borrower hereby irrevocably
authorizes the Lender to disburse the proceeds of each borrowing requested,
or deemed to be requested, pursuant to this Section 2.2 as follows: (i) the
proceeds of each borrowing requested under Section 2.2(a)(i)(A) or (B) or
Section 2.2(ii) shall be disbursed by the Lender in lawful money of the
United States of America in immediately available funds, (A) in the case of
the initial borrowing, in accordance with the terms of the written
instructions from the Borrower to the Lender, and (B) in the case of each
subsequent borrowing, by credit to the Disbursement Account or to such other
account as may be agreed upon by the Borrower and the Lender from time to
time; and (ii) the proceeds of each borrowing requested under Section
2.2(a)(i)(C), (D) or (E) shall be disbursed by the Lender by way of direct
payment of the relevant principal, interest or other Secured Obligation, as
the case may be.
Section 2.3 Repayment of Loans. The Loans will be repaid as
follows: (a) whether or not any Default or Event of Default has occurred, the
outstanding principal amount of all the Loans is due and payable, and shall
be repaid by the Borrower in full together with accrued and unpaid interest
on the amount repaid to the date of repayment, on the Termination Date; (b)
if at any time the aggregate unpaid principal amount of the Loans then
outstanding exceeds the lesser of the amounts referred to in clauses (a) and
(b) of Section 2.1, the Borrower shall repay the Loans in an amount
sufficient to reduce the aggregate unpaid principal amount of such Loans by
an amount equal to such excess, together with accrued and unpaid interest on
the amount repaid to the date of repayment; and (c) the Borrower hereby
instructs the Lender to repay the Loans outstanding on any day in an amount
equal to the amount received by the Lender on such day pursuant to Section
7.1(b).
Section 2.4 Note. The Loans and the obligation of the Borrower
to repay such Loans shall also be evidenced by a single Note payable to the
order of the Lender. Such Note shall be dated the Effective Date and be duly
and validly executed and delivered by the Borrower.
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Section 2.5 Extension of Facility. The Termination Date shall
be automatically extended for successive one-year periods unless either the
Lender or the Borrower provides to the other written notice of termination
not less than 60 days prior to the then effective Termination Date.
Section 2.6 Letters of Credit. (a) Upon the request of the
Borrower from time to time, the Lender shall, in accordance with the
provisions of this Section 2.6, issue one or more Letters of Credit up to an
aggregate amount available to be drawn (plus the aggregate amount of
unreimbursed drawings under all Letters of Credit) at any time not to exceed
the Letter of Credit Facility; provided, that (i) all Letter of Credit
Documents in connection with each Letter of Credit shall be satisfactory to
the Lender in its sole discretion, (ii) no Letter of Credit shall be issued
if, after issuance thereof, the sum of the aggregate principal amount of
Loans outstanding, plus the Letter of Credit Reserve, would exceed the
Borrowing Base plus the Letter of Credit Reserve, (iii) each Letter of Credit
shall be a documentary letter of credit issued to or for the benefit of a
supplier of the Borrower in connection with the purchase of Inventory or a
standby letter of credit issued for the benefit of a beneficiary in
connection with insurance requirements, bonds or similar obligations or for
any other purpose reasonably acceptable to the Lender, and (iv) no Letter of
Credit shall have an initial term longer than one year or an expiration date
later than five (5) Business Days prior to the Termination Date, unless such
Letter of Credit is cash collateralized on terms satisfactory to the Lender.
(b) The Borrower acknowledges and agrees that if and to the
extent the Borrower shall fail to reimburse the Lender under any Letter of
Credit Documents, the Borrower hereby irrevocably requests and directs the
Lender, subject to and in accordance with the provisions of Section 2.1, to
make payment on its behalf and the amount of any such payment by the Lender
shall constitute a Prime Rate Loan made at the time of such payment.
(c) The issuance and negotiation of Letters of Credit shall be
governed by the Uniform Customs and Practices for Documentary Credits (1993
Revision), as published in the International Chamber of Commerce Uniform
Customs and Practices, Publication No. 500, or any successor thereto (the
"UCP"), or such other policies and practices as may be followed by the Lender
with respect to similar letters of credit at the time. To the extent that
the Lender follows any practices or policies with respect to letters of
credit (other than the UCP), the Lender will provide notice of such practices
or policies to the Borrower in accordance with the terms of this Agreement.
ARTICLE 3 - GENERAL LOAN PROVISIONS
Section 3.1 Interest.
(a) (i) Prime Rate Loans. The Borrower will pay interest on
the unpaid principal amount of each Prime Rate Loan for each day from
the day such Loan was made until such Loan is paid (whether at
maturity, by reason of acceleration or otherwise), or is converted
to a Loan of a different Type, at a rate per annum equal to the sum
of one-half percent (.50%) plus the Prime Rate, payable monthly in
arrears on each Interest Payment Date and on the Termination Date.
(ii) LIBOR Loans. The Borrower will pay interest on the
unpaid principal amount of each LIBOR Loan for the Interest Period
applicable thereto at a rate per annum equal to the sum of two and
three-quarters percent (2.75%) plus LIBOR for such Interest Period,
payable in arrears on each Interest Payment Date, on the last day of
such Interest Period, and when such LIBOR Loan is paid (whether at
maturity, by reason of acceleration or otherwise).
(b) The Borrower shall pay interest on the unpaid principal
amount of each Secured Obligation other than a Loan for each day from the day
such Secured Obligation becomes due and payable until such Secured Obligation
is paid at the rate per annum applicable to Prime Rate Loans, payable on
demand.
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(c) From and after the occurrence of an Event of Default, the
unpaid principal amount of each Secured Obligation shall bear interest until
paid in full (or, if earlier, until such Event of Default is cured or waived
in writing by the Lender) at a rate per annum equal to the Default Margin
plus the rate otherwise in effect under Section 3.1(a) or (b), payable on
demand. The interest rate provided for in this Section 3.1(c) shall to the
extent permitted by applicable law apply to and accrue on the amount of any
judgment entered with respect to any Secured Obligation and shall continue to
accrue at such rate during any proceeding described in Section 11.1(g) or
(h).
(d) The interest rates provided for in Sections 3.1(a), (b) and
(c) shall be computed on the basis of a year of 360 days and the actual
number of days elapsed.
(e) It is not intended by the Lender, and nothing contained in
this Agreement or the Note shall be deemed, to establish or require the
payment of a rate of interest in excess of the maximum rate permitted by
applicable law (the "Maximum Rate"). If, in any month, the Effective
Interest Rate, absent such limitation, would have exceeded the Maximum Rate,
then the Effective Interest Rate for that month shall be the Maximum Rate,
and if, in future months, the Effective Interest Rate would otherwise be less
than the Maximum Rate, then the Effective Interest Rate shall remain at the
Maximum Rate until such time as the amount of interest paid hereunder equals
the amount of interest which would have been paid if the same had not been
limited by the Maximum Rate. In this connection, in the event that, upon
payment in full of the Secured Obligations, the total amount of interest paid
or accrued under the terms of this Agreement is less than the total amount of
interest which would have been paid or accrued if the Effective Interest Rate
had at all times been in effect, then the Borrower shall, to the extent
permitted by applicable law, pay to the Lender an amount equal to the
difference between (i) the lesser of (A) the amount of interest which would
have been charged if the Maximum Rate had, at all times, been in effect and
(B) the amount of interest which would have accrued had the Effective
Interest Rate, at all times, been in effect, and (ii) the amount of interest
actually paid or accrued under this Agreement. In the event the Lender
receives, collects or applies as interest any sum in excess of the Maximum
Rate, such excess amount shall be applied to the reduction of the principal
balance of the applicable Secured Obligation, and, if no such principal is
then outstanding, such excess or part thereof remaining shall be paid to the
Borrower.
Section 3.2 Fees.
(a) Unused Line Fee. In connection with and as consideration for
the Lender's commitment hereunder, subject to the terms hereof, to lend to
the Borrower under the Facility, the Borrower shall pay a fee to the Lender,
from the Effective Date until the Termination Date, in an amount equal to one
half percent (.50%) per annum of the average daily unused portion of the
Facility, payable monthly in arrears on the first day of each month and on
the date of any permanent reduction in the Facility.
(b) Administration Fee. For services performed by the Lender in
connection with its continuing administration hereof, the Borrower shall pay
to the Lender a fee of $25,000 per annum, payable annually in advance on the
Effective Date and thereafter on each anniversary of the date of this
Agreement, and continuing so long as any Loan shall remain outstanding or the
Facility shall not have been terminated.
(c) Letter of Credit Fees. The Borrower agrees to pay to the
Lender (i) a Letter of Credit fee equal to a rate per annum equal to 2.75%
with respect to all Letters of Credit based on the average daily aggregate
face amount of all such Letters of Credit from time to time outstanding
during the term of this Agreement; such fees shall be due and payable in
arrears on each Interest Payment Date, (ii) a facing fee of 0.125% of the
face amount of each Letter of Credit issued on or after the Effective Date,
such fee to be paid on the date of the issuance of each Letter of Credit, and
(iii) without duplication, the Lender's standard fees and charges with
respect to the issuance, amendment, processing, negotiation, renewal, and
extension of letters of credit and drawings thereunder.
(e) General. All fees shall be fully earned by the Lender when
due and payable and, except as otherwise set forth herein, shall not be
subject to refund or rebate. All fees are for compensation for services and
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are not, and shall not be deemed to be, interest or a charge for the use of
money. The fees provided for in Sections 3.2(a) and (c)(i) shall be computed
on the basis of a year of 360 days and the actual number of days elapsed
Section 3.3 Notice of Conversion or Continuation of Loans.
Whenever the Borrower desires, subject to the provisions of Section 3.4, to
convert an outstanding Loan into a Loan of a different Type provided for in
this Agreement or to continue all or a portion of an outstanding LIBOR Loan
for a subsequent Interest Period, the Borrower shall notify the Lender (which
notice shall be irrevocable) by telephone or in writing (including telecopy)
not later than 12:00 noon (Eastern time) on the date one Business Day before
the day on which a proposed conversion of a LIBOR Loan into a Prime Rate Loan
is to be effective (which effective date shall be the last day of the
Interest Period applicable to such LIBOR Loan) and two Business Days before
the day on which a proposed conversion of a Prime Rate Loan into, or
continuation of a LIBOR Loan as, a LIBOR Loan is to be effective (and such
effective date of any continuation shall be the last day of the Interest
Period for such LIBOR Loan). Each such notice (a "Notice of Conversion or
Continuation") shall (a) identify the Loan to be converted or continued,
including the Type thereof, the aggregate outstanding principal balance
thereof and, in the case of a LIBOR Loan, the last day of the Interest Period
therefor, (b) specify the effective date of such conversion or continuation,
(c) specify the principal amount of such Loan to be converted or continued
and, if converted, the Type or Types of Loan into which conversion of such
principal amount or specified portions thereof is to be made, and (d) in the
case of any conversion into or continuation as a LIBOR Loan, the Interest
Period to be applicable thereto, and, in the case of any telephonic notice,
shall be immediately followed by a written confirmation thereof by the
Borrower in a form acceptable to the Lender, provided that the failure to
provide a written confirmation shall not invalidate any telephonic notice
and, if such written confirmation differs in any respect from the action
taken by the Lender, the records of the Lender shall control absent manifest
error. In the event the Borrower fails to provide timely notice of the
conversion or continuation of any LIBOR Loan, such Loan shall automatically
convert to a Prime Rate Loan as of the last day of the Interest Period
applicable to such LIBOR Loan.
Section 3.4. Conversion or Continuation. Provided that no Event
of Default exists (but subject to the provisions of Sections 3.5 and 3.6),
the Borrower may request that all or any part of any outstanding Loan of one
Type (a) be converted into a Loan or Loans of any other Type provided for in
this Agreement, or (b) be continued as a Loan or Loans of the same Type, in
the same aggregate principal amount, on any Business Day (which, in the case
of a conversion or continuation of a LIBOR Loan, shall be the last day of the
Interest Period applicable to such LIBOR Loan), upon notice (which notice
shall be irrevocable) given in accordance with Section 3.3. Notwithstanding
anything to the contrary contained in this Agreement, if an Event of Default
exists (i) the Borrower shall not have the right to convert Loans into, or
continue Loans as, LIBOR Loans and (ii) all outstanding LIBOR Loans shall be
automatically converted to Prime Rate Loans as of the last day of the then
applicable Interest Period.
Section 3.5 Duration of Interest Periods; Maximum Number of
LIBOR Loans; Minimum Increments.
(a) Subject to the provisions of the definition "Interest
Period", the duration of each Interest Period applicable to a LIBOR Loan
shall be as specified in the applicable Notice of Borrowing or Notice of
Conversion or Continuation. The Borrower may elect a subsequent Interest
Period to be applicable to any LIBOR Loan by giving a Notice of Conversion or
Continuation with respect to such Loan in accordance with Section 3.3.
(b) If the Lender does not receive a Notice of Conversion or
Continuation in accordance with Section 3.3 with respect to the continuation
of a LIBOR Loan within the applicable time limits specified in Section 3.3,
or if, when such notice must be given, an Event of Default exists or such
Type of Loan is not available, the Borrower shall be deemed to have elected
to convert such LIBOR Loan in whole into a Prime Rate Loan on the last day of
the Interest Period therefor.
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(c) Notwithstanding the foregoing, the Borrower may not select
an Interest Period that would end, but for the provisions of the definition
"Interest Period," after the Termination Date.
(d) In no event shall there be more than five LIBOR Loans
outstanding hereunder at any time. For the purpose of this subsection (d),
each LIBOR Loan having a distinct Interest Period shall be deemed to be a
separate Loan hereunder.
(e) Each LIBOR Loan shall be in a minimum amount of $1,000,000.
Section 3.6 Changed Circumstances.
(a) If the introduction of or any change in or in the
interpretation of (in each case, after the date hereof) any law or regulation
makes it unlawful, or any Governmental Authority asserts, after the date
hereof, that it is unlawful, for the Lender to perform its obligations
hereunder to make or maintain LIBOR Loans, the Lender shall notify the
Borrower of such event, and the right of the Borrower to select LIBOR Loans
for any subsequent Interest Period or in connection with any subsequent
conversion of any Loan shall be suspended until the circumstances causing
such suspension no longer exist, and all LIBOR Loans then outstanding shall
be converted to Prime Rate Loans, and the Borrower shall pay all interest
accrued thereon through the date of such conversion; provided, that if the
date of such conversion is not the last day of the Interest Period applicable
to such LIBOR Loans, the Borrower shall also pay any amount due pursuant to
Section 3.7.
(b) If the Lender shall, prior to the disbursement of any
requested Loan or the effective date of any conversion or continuation of an
existing Loan to be made or continued as or converted into a LIBOR Loan (each
such requested Loan made and Loan to be converted or continued, a "Pending
Loan"), notify the Borrower that LIBOR will not adequately reflect the cost
to the Lender of making or funding such Pending Loan as a LIBOR Loan or that
the Interbank Offered Rate is not determinable from any interest rate
reporting service of recognized standing, then the right of the Borrower to
select LIBOR Loans for such Pending Loan, any subsequent Loan, or in
connection with any subsequent conversion or continuation of any Loan, shall
be suspended until the circumstances causing such suspension no longer exist,
and each Loan comprising each Pending Loan and each such subsequent Loan
requested to be made, continued or converted shall be made or continued as or
converted into a Prime Rate Loan.
Section 3.7 Payments Not at End of Interest Period; Failure to
Borrow. If (a) for any reason any payment of principal with respect to any
LIBOR Loan is made on any day prior to the last day of the Interest Period
applicable to such LIBOR Loan, or (b) after having given a Notice of
Borrowing with respect to any Loan to be comprised of LIBOR Loans or a Notice
of Conversion or Continuation with respect to any Loan to be continued as or
converted into a LIBOR Loan, such Loan is not made or is not continued as or
converted into a LIBOR Loan due to the Borrower's failure to borrow or to
fulfill the applicable conditions set forth in Article 4, the Borrower shall
pay to the Lender, in addition to any other amounts that may be due under
this Agreement, an amount equal to all costs, expenses and losses incurred by
the Lender in connection therewith.
Section 3.8 Increased Costs and Reduced Returns. The Borrower
agrees that if any law hereafter in effect or any request, guideline or
directive of any Governmental Authority hereafter made or issued (whether or
not having the force of law and whether or not failure to comply therewith
would be unlawful) or the interpretation or administration thereof hereafter
made by any Governmental Authority , shall either (a)(i) impose, affect,
modify or deem applicable any reserve, special deposit, capital maintenance
or similar requirement against any Loan (other than as reflected in the LIBOR
Reserve Percentage), (ii) impose on the Lender any other condition (other
than as reflected in the LIBOR Reserve Percentage) regarding any Loan, this
Agreement, the Note or the facilities provided hereunder, or (iii) result in
any requirement (other than as reflected in the LIBOR Reserve Percentage)
regarding capital adequacy (including any risk-based capital guidelines)
affecting the Lender being imposed or modified or deemed applicable to the
Lender, or (b) subject the Lender to any taxes on the recording,
registration, notarization or other formalization of the Loans or the Note,
and the result of any event referred to in clause (a) or (b) above shall be
to increase the cost to the Lender of making, funding or maintaining
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any Loan or to reduce the amount of any sum receivable by the Lender or the
Lender's rate of return on capital with respect to any Loan to a level below
that which the Lender could have achieved but for such imposition,
modification or deemed applicability (taking into consideration the Lender's
policies with respect to capital adequacy) by an amount deemed by Lender (in
the exercise of its reasonable discretion) to be material, then, upon demand
by the Lender, the Borrower shall immediately pay to the Lender additional
amounts which shall be sufficient to compensate the Lender for such increased
cost, tax or reduced rate of return. A certificate of the Lender to the
Borrower claiming compensation under this Section 3.8 shall be final,
conclusive and binding on all parties for all purposes in the absence of
manifest error. Such certificate shall set forth the nature of the
occurrence giving rise to such compensation, the additional amount or amounts
to be paid to it hereunder, and the method by which such amounts were
determined. In determining such amount, the Lender may use any reasonable
averaging and attribution methods.
Section 3.9 Manner of Payment. (a) Each payment (including
prepayments) by the Borrower on account of the principal of or interest on
the Loans or of any fee or other amounts payable to the Lender under this
Agreement or the Note shall be made not later than 1:30 p.m. on the date
specified for payment under this Agreement (or if such day is not a Business
Day, the next succeeding Business Day) to the Lender at the Lender's Office,
in Dollars, in immediately available funds and shall be made without any
setoff, counterclaim or deduction whatsoever.
(b) The Borrower hereby irrevocably authorizes the Lender and
each Affiliate of the Lender to charge any account of the Borrower maintained
with the Lender or such Affiliate with such amounts as may be necessary from
time to time to pay any Secured Obligations which are not paid when due.
Section 3.10 Statements of Account. The Lender will account to
the Borrower within 30 days after the end of each calendar month with a
statement of Loans, charges and payments made pursuant to this Agreement
during such calendar month, and such account rendered by the Lender shall be
deemed an account stated as between the Borrower and the Lender and shall be
deemed final, binding and conclusive unless the Lender is notified by the
Borrower in writing to the contrary within 60 days after the date such
account is delivered to the Borrower, save for manifest error. Any such
notice shall be deemed an objection only to those items specifically objected
to therein. Failure of the Lender to render such account shall in no way
affect its rights hereunder.
Section 3.11 Termination of Agreement; Reduction of Facility.
(a) On the Termination Date or upon any date on which the
Borrower shall have elected early termination of this Agreement in accordance
with clause (b) of this Section 3.11, (i) the amount of the Facility shall be
automatically and permanently reduced to zero; (ii) the Borrower shall pay to
the Lender, in same day funds, an amount equal to the aggregate amount of all
Loans outstanding on such date, together with accrued interest thereon, all
fees payable pursuant to Section 3.2 accrued from the date last paid until
the effective date of termination, any amounts payable to the Lender pursuant
to the other provisions of this Agreement, including, without limitation,
Sections 3.7, 3.8, 11.2, 12.12 and 12.13, any and all other Secured
Obligations then outstanding, and provide the Lender with an indemnification
agreement in form and substance satisfactory to the Lender with respect to
returned and dishonored items and such other matters as the Lender shall
require; (iii) the Borrower shall provide the Lender a stand-by letter of
credit, in form and substance satisfactory to the Lender, securing the
reimbursement obligations that may be owing by the Borrower to the Lender in
respect of any Letters of Credit; and (iv) the Borrower shall provide the
Lender with an indemnification agreement in form and substance satisfactory
to the Lender with respect to returned and dishonored items and such other
matters as the Lender shall require.
(b) Upon not less than 60 days prior written notice to the
Lender, which notice shall be irrevocable, the Borrower may terminate this
Agreement prior to the Termination Date in effect at such time. On the date
of early termination, in addition to the amounts specified in clause (a) of
this Section 3.11, the Borrower shall pay the Lender an early termination fee
computed by multiplying the amount of the Facility times a percentage, such
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percentage to be: (A) 3.0%, if such termination occurs on or prior to the
first anniversary of the Agreement Date, and (B) 1.0%, if such termination
occurs after the first anniversary of the Agreement Date but on or prior to
the second anniversary of the Agreement Date. If such termination occurs at
any time thereafter and prior to August 31, 2003, the Borrower shall pay the
Lender an early termination fee equal to $100,000. Notwithstanding the
foregoing, if any such termination of this Agreement results from a
refinancing of the Loans and Letters of Credit outstanding under this
Agreement by the Lender or an Affiliate of the Lender, no fee shall be
payable under this clause (b).
(c) Upon not less than 45 days prior written notice to the
Lender, which notice shall be irrevocable, the Facility may be permanently
reduced by the Borrower to $25,000,000, provided, that if, immediately after
giving effect to such reduction, the aggregate amount of Loans then
outstanding would exceed an amount equal to the Facility minus the Letter of
Credit Reserve, the Borrower shall be required to make a prepayment of Loans
in the amount of such excess, together with interest thereon and any amounts
owing in respect of such prepayment under Section 3.7. Notwithstanding such
Facility reduction, if the Borrower shall terminate this Agreement prior to
the Termination Date and within six months of such reduction, any amounts
owing under clause (b) of this Section 3.11 shall be determined as if the
Facility was $30,000,000 as of the date of such termination.
ARTICLE 4 - CONDITIONS PRECEDENT
Section 4.1 Conditions Precedent to Initial Loan.
Notwithstanding any other provision of this Agreement, the Lender's
obligation to make the Initial Loan is subject to the fulfillment of each of
the following conditions prior to or contemporaneously with the making of
such Loan:
(a) Closing Documents. The Lender shall have received each of
the following documents, all of which shall be satisfactory in form and
substance to the Lender and its counsel:
(1) this Agreement, duly executed and delivered by the
Borrower;
(2) the Note, dated the Effective Date and duly executed
and delivered by the Borrower;
(3) certified copies of the articles of incorporation
and bylaws of the Borrower as in effect on the Effective Date;
(4) certified copies of all corporate action, including
stockholder approval, if necessary, taken by the Borrower to
authorize the execution, delivery and performance of this Agreement
and the other Loan Documents and the borrowings under this Agreement;
(5) certificates of incumbency and specimen signatures
with respect to each of the officers of the Borrower who is
authorized to execute and deliver this Agreement or any other Loan
Document on behalf of the Borrower or any document, certificate or
instrument to be delivered in connection with this Agreement or the
other Loan Documents and to request borrowings under this Agreement;
(6) a certificate evidencing the good standing of the
Borrower in the jurisdiction of its incorporation and in each other
jurisdiction in which it is qualified as a foreign corporation to
transact business;
(7) the Financing Statements duly executed and delivered
by the Borrower;
(8) landlord's waiver and consent agreements duly
executed on behalf of each landlord of real property on which any
Collateral is located;
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(9) a Schedule of Inventory, a Schedule of Receivables
and a Schedule of Equipment, each prepared as of a recent date;
(10) certificates of title with each item of Equipment
subject to a certificate of title statute, including in each case a
notation of the Lender's first priority Lien;
(11) the Lease Agreement, containing terms and conditions
satisfactory to the Lender;
(12) the Mortgages, each duly executed and delivered by
the Borrower;
(13) With respect to the Nashville Meat Processing Plant,
an ALTA mortgagee's Policy of Title Insurance (or binder to issue
such a policy) in favor of the Lender in a dollar amount acceptable
to the Lender and issued by a title insurance company acceptable to
the Lender, showing the fee simple title to the land as being vested
in the Parent and a leasehold estate in the land and fee simple title
to the improvements thereon as being vested in the Borrower, and
insuring that the Lien granted by such Mortgage is a valid lien
against said real property, subject only to such exceptions,
restrictions, encumbrances, easements and reservations as are
acceptable to the Lender and stating that the Lease Agreement is a
subordinate item to the Mortgage;
(14) With respect to each parcel of Mortgaged Real Estate
other than the Nashville Meat Processing Plant, an ALTA mortgagee's
Policy of Title Insurance (or binder to issue such a policy) in favor
of the Lender, or, if acceptable to the Lender, each in a dollar
amount acceptable to the Lender and each issued by a title insurance
company acceptable to the Lender, showing the fee simple title to
such Mortgaged Real Estate and improvements described in each
applicable Mortgage as vested in Borrower, and insuring that the Lien
granted by each Mortgage is a valid lien against said real property,
subject only to such exceptions, restrictions, encumbrances,
easements and reservations as are acceptable to the Lender
(15) the Environmental Indemnity Agreements, dated the
Effective Date and duly executed and delivered by the Borrower;
(16) such materials and information concerning the
Mortgaged Real Estate as the Lender may require, including, without
limitation, (a) surveys in form and substance satisfactory the
Lender, (b) zoning letters as to the zoning status of all of the
Mortgaged Real Estate, and (c) owner's affidavits as to such matters
relating to the Mortgaged Real Estate as the Lender may request;
(17) certificates or binders of insurance relating to
each of the policies of insurance covering any of the Collateral
together with loss payable clauses which comply with the terms of
Section 7.9(b);
(18) such Agency Account Agreements as shall be required
by the Lender duly executed by the applicable Clearing Bank and the
Borrower;
(19) a Borrowing Base Certificate prepared as of the
Effective Date duly executed and delivered by the chief financial
officer of the Borrower;
(20) a letter from the Borrower to the Lender requesting
the Initial Loan and specifying the method of disbursement;
(21) copies of all the financial statements referred to
in Section 5.1(m) and meeting the requirements thereof;
(22) a balance sheet of the Borrower as at May 14, 2000,
prepared by the Borrower on a pro forma basis, giving effect to the
transactions contemplated by this Agreement and setting forth the
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assumptions on which such balance sheet was prepared; forecasted
consolidated financial statements consisting of balance sheets, cash
flow statements and income statements of the Borrower, giving effect
to the transactions contemplated by this Agreement and reflecting
projected borrowings hereunder and setting forth the assumptions on
which such forecasted financial statements were prepared, covering
the two-year period commencing on August 31, 2000, and prepared on
a quarterly basis; and such other evidence as the Lender shall
require supporting the representation and warranty of the Borrower
set forth in Section 5.1(r);
(23) a certificate of the President of the Borrower
stating that, to the best of his knowledge and based on an
examination sufficient to enable him to make an informed statement,
(a) all of the representations and warranties made or deemed to be
made under this Agreement are true and correct as of the Effective
Date, both with and without giving effect to the Initial Loan and the
application of the proceeds thereof, and (b) no Default or Event of
Default exists;
(24) a signed opinion of King & Spalding, counsel for the
Borrower, and such local counsel as the Lender shall deem necessary
or desirable, opining as to such matters in connection with this
Agreement as the Lender or its counsel may reasonably request; and
(25) copies of each of the other Loan Documents duly
executed by the parties thereto with evidence satisfactory to the
Lender and its counsel of the due authorization, binding effect and
enforceability of each such Loan Document on each such party and such
other documents and instruments as the Lender may reasonably request.
(b) Availability. The Lender shall be provided with evidence
satisfactory to it that, as of the Effective Date, after giving effect to the
Initial Loan, Availability will be not less than $1,000,000.
(c) Recapitalization. The initial steps of the recapitalization
of the Parent and its Subsidiaries shall have been completed on terms and
conditions satisfactory to the Lender. Such initial steps shall include,
without limitation:
(1) Captain D's shall have entered into a senior loan
facility with Bank of America, N.A. or another financial institution
providing for extensions of credit to Captain D's in an aggregate
principal amount of at least $135,000,000 on terms and conditions
satisfactory to the Lender, and all conditions to the initial
extensions of credit thereunder shall have been satisfied or waived;
(2) The Parent shall have obtained the proceeds of a real
estate loan from Franchise Finance Corporation of America or another
financial institution in the amount of at least $99,000,000 on terms
and conditions satisfactory to the Lender;
(3) The Parent shall have entered into a revolving loan
facility with Bank of America, N.A. and a syndicate of lenders
providing for revolving credit loans and letters of credit in an
aggregate amount of at least $40,000,000; and
(4) The Parent shall own 100% of the equity interests of
Captain D's and the Borrower.
(d) No Injunctions, Etc. No action, proceeding, investigation,
regulation or legislation shall have been instituted, threatened or proposed
before any court, governmental agency or legislative body to enjoin, restrain
or prohibit or to obtain substantial damages in respect of or which is
related to or arises out of this Agreement or the consummation of the
transactions contemplated hereby (including the transactions contemplated by
the recapitalization transactions described in clause (c) above) or which, in
the Lender's sole discretion, would make it inadvisable to consummate the
transactions contemplated by this Agreement.
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(e) Solvency. The Lender shall have received a certificate of
the chief financial officer of the Borrower to the effect that, after giving
effect to the Initial Loan, (i) the Borrower has assets (excluding goodwill
and other intangible assets not capable of valuation) having value, both at
fair value and at present fair saleable value, greater than the amount of its
liabilities, and (ii) the Borrower's assets are sufficient in value to
provide the Borrower with sufficient working capital to enable it to operate
its business and to meet its obligations as they become due, and (iii) the
Borrower has adequate capital to conduct the business in which it is and
proposes to be engaged.
(f) Release of Security Interests. The Lender shall have
received evidence satisfactory to it of the release and termination of all
Liens other than Permitted Liens and Liens securing the Secured Obligations.
(g) Due Diligence. The Lender shall have completed its field
examinations and other due diligence on the Borrower and all of the
Borrower's property, assets and business, and shall be satisfied in its sole
discretion with the results thereof.
(h) Fees. The Borrower shall have paid all fees required to be
paid on or before the Effective Date pursuant to the terms of this Agreement
and the other Loan Documents.
Section 4.2 All Loans. At the time of making of each Loan,
including the Initial Loan:
(a) Representations and Warranties. All of the representations
and warranties made or deemed to be made under this Agreement shall be true
and correct at such time both with and without giving effect to the Loans to
be made at such time and the application of the proceeds thereof, except that
representations and warranties which, by their terms, are applicable only to
the Effective Date or other specified date shall be required to be true and
correct only as of the Effective Date or such other specified date,
(b) Corporate Actions; Incumbency. The corporate actions of the
Borrower referred to in Section 4.1(a)(4) shall remain in full force and
effect and the incumbency of officers shall be as stated in the certificates
of incumbency delivered pursuant to Section 4.1(a)(5) or as subsequently
modified and reflected in a certificate of incumbency delivered to the
Lender, and
(c) Material Adverse Change. There shall not have occurred any
change which has had or could reasonably be expected to have a Materially
Adverse Effect as compared to the condition of the Borrower, Parent or
Captain D's presented as of October 31, 1999 by the financial statements as
of such date of such Person described in Section 5.1(m).
(d) Parent and Captain D's. Such borrowing of Loans shall not
require any Governmental Approval or violate any applicable law relating to
the Parent, Captain D's or any other Affiliate of the Borrower.
(e) Satisfaction of Conditions Precedent. The Lender may,
without waiving any condition, consider the conditions specified in Sections
4.2(a), (b), (c) and (d) fulfilled and a representation by the Borrower to
such effect made if no written notice to the contrary is received by the
Lender from the Borrower prior to the making of the Loans then to be made.
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF THE BORROWER
Section 5.1 Representations and Warranties. The Borrower
represents and warrants to the Lender as follows:
(a) Organization; Power; Qualification. The Borrower is a
corporation, duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, has the corporate power and
authority to own its properties and to carry on its business as now being and
hereafter proposed to be conducted and is duly qualified and authorized to do
business in each jurisdiction in which failure to be so qualified and
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authorized would have a Materially Adverse Effect. The jurisdictions in
which the Borrower is qualified to do business as a foreign corporation are
listed on Schedule 5.1(a).
(b) Subsidiaries and Ownership of the Borrower. Except as set
forth on Schedule 5.1(b), the Borrower has no Subsidiaries. The outstanding
stock of the Borrower has been duly and validly issued and is fully paid and
nonassessable by the Borrower and the number and owners of such shares of
capital stock of the Borrower are set forth on Schedule 5.1(b).
(c) Authorization of Agreement, Note, Loan Documents and
Borrowing. The Borrower has the right and power and has taken all necessary
action to authorize it to execute, deliver and perform this Agreement and
each of the other Loan Documents to which it is a party in accordance with
their respective terms and to borrow hereunder. This Agreement and each of
the other Loan Documents to which it is a party have been duly executed and
delivered by the duly authorized officers of the Borrower and each is, or
when executed and delivered in accordance with this Agreement will be, a
legal, valid and binding obligation of the Borrower, enforceable in
accordance with its terms.
(d) Compliance of Agreement, Note, Loan Documents and Borrowing
with Laws, Etc. The execution, delivery and performance of this Agreement
and each of the other Loan Documents to which the Borrower is a party in
accordance with their respective terms and the borrowings hereunder do not
and will not, by the passage of time, the giving of notice or otherwise,
(i) require any Governmental Approval or violate any
applicable law relating to the Borrower or, to the Borrower's
knowledge, any of its Affiliates,
(ii) conflict with, result in a breach of or constitute
a default under (A) the articles or certificate of incorporation or
bylaws of the Borrower, (B) any indenture, agreement or other
instrument to which the Borrower is a party or by which any of its
property may be bound or (C) any Governmental Approval relating to
the Borrower, or,
(iii) result in or require the creation or imposition of
any Lien upon or with respect to any property now owned or hereafter
acquired by the Borrower other than the Security Interest.
(e) Business. The Borrower is engaged principally in the
business described on Schedule 5.1(e).
(f) Compliance with Law; Governmental Approvals. Except as set
forth in Schedule 5.1(f), the Borrower (i) has all Governmental Approvals,
including permits relating to federal, state and local Environmental Laws,
ordinances and regulations required by any applicable law for it to conduct
its business (other than any such immaterial Government Approvals the failure
to have of which could not reasonably be expected to cause a Default or Event
of Default or have a Materially Adverse Effect), each of which is in full
force and effect, is final and not subject to review on appeal and is not the
subject of any pending or, to the knowledge of the Borrower, threatened
attack by direct or collateral proceeding, and (ii) is in compliance with
each Governmental Approval applicable to it and in compliance with all other
applicable laws relating to it, including, without being limited to, all
Environmental Laws and all occupational health and safety laws applicable to
the Borrower or its properties, except for instances of noncompliance which
would not, singly or in the aggregate, cause a Default or Event of Default or
have a Materially Adverse Effect and in respect of which adequate reserves
have been established on the books of the Borrower.
(g) Titles to Properties. Except as set forth in Schedule
5.1(g), the Borrower has good and marketable title to or a valid leasehold
interest in all Real Estate and valid and legal title to or a valid leasehold
interest in all personal property and assets used in or necessary to the
conduct of the Borrower's business, including, but not limited to, those
reflected on the balance sheet of the Borrower delivered pursuant to Section
5.1(m)(ii).
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(h) Liens. Except as set forth in Schedule 5.1(h), none of the
properties and assets of the Borrower is subject to any Lien, except
Permitted Liens and the Security Interest. Other than the Financing
Statements, no financing statement under the Uniform Commercial Code of any
state which names the Borrower as debtor and which has not been terminated
has been filed in any state or other jurisdiction, and the Borrower has not
signed any such financing statement or any security agreement authorizing any
secured party thereunder to file any such financing statement, except to
perfect those Liens listed in Schedule 5.1(h) and Permitted Liens.
(i) Indebtedness and Guaranties. Set forth on Schedule 5.1(i)
is a complete and correct listing of all of the Borrower's (i) Indebtedness
for Money Borrowed and (ii) Guaranties. The Borrower is not in default of any
material provision of any agreement evidencing or relating to any such
Indebtedness or Guaranty.
(j) Litigation. Except as set forth on Schedule 5.1(j), there
are no actions, suits or proceedings pending (nor, to the knowledge of the
Borrower, are there any actions, suits or proceedings threatened, nor is
there any basis therefor) against or in any other way relating adversely to
or affecting the Borrower or any of its property in any court or before any
arbitrator of any kind or before or by any governmental body.
(k) Tax Returns and Payments. Except as set forth on Schedule
5.1(k), all United States federal, state and local and foreign national,
provincial and local and all other tax returns of the Borrower required by
applicable law to be filed have been duly filed, and all United States
federal, state and local and foreign national, provincial and local and all
other taxes, assessments and other governmental charges or levies upon the
Borrower and its property, income, profits and assets which are due and
payable have been paid, except any such nonpayment which is at the time
permitted under Section 8.4. The charges, accruals and reserves on the books
of the Borrower in respect of United States federal, state and local taxes
and foreign national, provincial and local taxes for all fiscal years and
portions thereof since the organization of the Borrower are in the judgment
of the Borrower adequate, and the Borrower knows of no reason to anticipate
any additional assessments for any of such years which, singly or in the
aggregate, could reasonably be expected to have a Materially Adverse Effect.
The federal taxpayer identification number of the Borrower is set forth on
Schedule 5.1(k).
(l) Burdensome Provisions. The Borrower is not a party to any
indenture, agreement, lease or other instrument, or subject to any charter or
corporate restriction, Governmental Approval or applicable law, compliance
with the terms of which could reasonably be expected to have a Materially
Adverse Effect.
(m) Financial Statements. The Borrower has furnished to the
Lender a copy of (i) the unaudited balance sheet of the Borrower as at
October 31, 1999, and the related statements of income, cash flow and
retained earnings for the twelve-month period then ended; (ii) the unaudited
balance sheet of the Borrower as at May 14, 2000, and the related statement
of income for the seven consecutive Accounting Periods then ended; (iii) the
audited consolidated balance sheet of the Parent and its subsidiaries as at
October 31, 1999, and the related statements of income, cash flow and
retained earnings for the twelve month period then ended; (iv) the unaudited
consolidated balance sheet of the Parent and its subsidiaries as at May 14,
2000, and the related statements of income, cash flow and retained earnings
for the seven month period then ended; (v) the audited balance sheet of
Captain D's as at October 31, 1999, and the related statements of income,
cash flow and retained earnings for the twelve-month period then ended; and
(vi) the unaudited balance sheet of Captain D's as at May 14, 2000, and the
related statement of income for the seven consecutive Accounting Periods then
ended;. In the case of the financial statements described in the foregoing
clauses (i) and (ii), such financial statements present fairly and in all
material respects in accordance with GAAP (in the case of the financial
statements described in clause (i) only) and consistent with past practice
the financial position of the Borrower as at the dates thereof and the
results of operations of the Borrower for the periods then ended. Except as
set forth on Schedule 5.1(m) or as otherwise disclosed or reflected in such
financial statements, the Borrower had no material liabilities, contingent or
otherwise, and there were no material unrealized or anticipated losses of the
Borrower. In the case of the financial statements described in the foregoing
clauses (iii) through (vi), to the Borrower's knowledge, such financial
statements present fairly and in all material respects in accordance with
GAAP and consistent with past practice the financial position of the Parent
or Captain D's, as applicable, as at the dates thereof and the results of
operations of such Person for the periods then ended. To the Borrower's
knowledge, except as disclosed or
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reflected in such financial statements, neither the Parent nor Captain D's
has any material liabilities, contingent or otherwise, and there were no
material unrealized or anticipated losses of either such Person.
(n) Adverse Change. Since October 31, 1999, except as reflected
in the financial statements described in Section 5.1(m), (i) no change in the
business, assets, liabilities, condition (financial or otherwise), or results
of operations of the Borrower, or, to the Borrower's knowledge, of Captain
D's or the Parent, has occurred that has had, or could reasonably be expected
to have, a Materially Adverse Effect, and (ii) no event has occurred or
failed to occur which has had, or could reasonably be expected to have, a
Materially Adverse Effect.
(o) ERISA. Neither the Borrower nor any Related Company
maintains or contributes to any Benefit Plan other than those listed on
Schedule 5.1(o). Each Benefit Plan is in substantial compliance with ERISA,
and neither the Borrower nor any Related Company has received any notice
asserting that a Benefit Plan is not in compliance with ERISA. No material
liability to the PBGC or to a Multiemployer Plan has been, or is expected by
the Borrower to be, incurred by the Borrower or any Related Company.
(p) Absence of Defaults. The Borrower is not in default under
its articles or certificate of incorporation or bylaws, and no event has
occurred which has not been remedied, cured or waived (i) that constitutes a
Default or an Event of Default or (ii) that constitutes or that, with the
passage of time or giving of notice, or both, would constitute a default or
event of default by the Borrower under any material agreement (other than
this Agreement) or judgment, decree or order to which the Borrower is a party
or by which the Borrower or any of its properties may be bound or which would
require the Borrower to make any payment thereunder prior to the scheduled
maturity date therefor.
(q) Accuracy and Completeness of Information. All written
information, reports and other papers and data produced by or on behalf of
the Borrower and furnished to the Lender were, at the time the same were so
furnished, complete and correct in all material respects, no fact is known to
the Borrower which has had, or could reasonably be expected to have in the
future (so far as the Borrower can foresee), a Materially Adverse Effect
which has not been set forth in the financial statements or disclosure
delivered prior to the Effective Date, in each case referred to in Section
5.1(m), or in such written information, reports or other papers or data or
otherwise disclosed in writing to the Lender prior to the Effective Date. No
document furnished or written statement made to the Lender by the Borrower in
connection with the negotiation, preparation or execution of this Agreement
or any of the Loan Documents contains any untrue statement of a fact material
to the creditworthiness of the Borrower or omits to state a material fact
necessary in order to make the statements contained therein not misleading.
(r) Solvency. In each case after giving effect to the
Indebtedness represented by the Loans outstanding and to be incurred and the
transactions contemplated by this Agreement, the Borrower is solvent, having
assets of a fair value which exceeds the amount required to pay its debts
(including contingent, subordinated, unmatured and unliquidated liabilities)
as they become absolute and matured, and the Borrower is able to and
anticipates that it will be able to meet its debts as they mature and has
adequate capital to conduct the business in which it is or proposes to be
engaged.
(s) Status of Receivables. Each Receivable reflected in the
computations included in any Borrowing Base Certificate meets the criteria
enumerated in the definition of Eligible Receivables, except as disclosed in
such Borrowing Base Certificate or as disclosed in a timely manner in a
subsequent Borrowing Base Certificate or otherwise in writing to the Lender.
(t) Chief Executive Office. The chief executive office of the
Borrower and the books and records relating to the Receivables are located at
the address or addresses set forth on Schedule 5.1(t); except as set forth
Schedule 5.1(t), the Borrower has not maintained its chief executive office
or the books and records relating to any Receivables at any other address at
any time during the five years immediately preceding the Agreement Date.
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(u) Status of Inventory. All Inventory included as Eligible
Branded Inventory in any Borrowing Base Certificate delivered to the Lender
meets the criteria enumerated in the definition of Eligible Branded
Inventory, and all Inventory included as Eligible Non-Branded Inventory in
any Borrowing Base Certificate delivered to the Lender meets the criteria
enumerated in the definition of Eligible Non-Branded Inventory, except in
each case as disclosed in such Borrowing Base Certificate or in a subsequent
Borrowing Base Certificate or as otherwise specifically disclosed in writing
to the Lender. Set forth on Schedule 5.1(u) is the (i) address (including
street, city, county and state) of each facility at which Inventory is
located, (ii) the approximate quantity in Dollars of the Inventory
customarily located at each such facility, and (iii) if the facility is
leased or is a third party warehouse or processor location, the name of the
landlord or such third party warehouseman or processor. All Inventory is
located on the premises set forth on Schedule 5.1(u) or is in transit to one
of such locations or the point of sale, except as otherwise disclosed in
writing to the Lender; the Borrower has not located Inventory at premises
other than those set forth on Schedule 5.1(u) at any time during the five
years immediately preceding the Agreement Date. None of the Inventory is
subject to any Intellectual Property rights or distribution agreements that
would in any way hinder the Lender's ability to foreclose upon or sell such
Inventory.
(v) Equipment. All Equipment is in good order and repair in all
material respects. Set forth on Schedule 5.1(v) is the (i) address
(including street, city, county and state) of each facility at which
Equipment (other than motor vehicles) is located, (ii) the approximate value
of Equipment located at such facility; and (iii) if such facility is leased,
the name of the landlord. Except as set forth on Section 5.1(v), within the
past five years no Equipment has been located at any other location.
(w) Corporate and Fictitious Names; Trade Names. Except as
otherwise disclosed on Schedule 5.1(w), during the one-year period preceding
the Agreement Date, the Borrower has not been known as or used any corporate
or fictitious name other than the corporate name of the Borrower on the
Effective Date. All trade names or styles under which the Borrower sells
Inventory or Equipment or creates Receivables, or to which instruments in
payment of Receivables are made payable, are listed on Schedule 5.1(w).
(x) Federal Regulations. The Borrower is not engaged,
principally or as one of its important activities, in the business of
extending credit for the purpose of "purchasing" or "carrying" any "margin
stock" (as each of the quoted terms is defined or used in Regulation U of the
Board of Governors of the Federal Reserve System).
(y) Investment Company Act. The Borrower is not an "investment
company" or a company "controlled" by an "investment company" (as each of the
quoted terms is defined or used in the Investment Company Act of 1940, as
amended).
(z) Employee Relations. The Borrower is not, except as set forth
on Schedule 5.1(z), party to any collective bargaining agreement nor has any
labor union been recognized as the representative of the Borrower's
employees; the Borrower knows of no pending, threatened or contemplated
strikes, work stoppage or other labor disputes involving its employees or
those of its Subsidiaries.
(aa) Intellectual Property. The Borrower owns or possesses all
Intellectual Property required to conduct its business as now and presently
planned to be conducted without, to its knowledge, conflict with the rights
of others, and Schedule 5.1(aa) lists all Intellectual Property owned by the
Borrower.
(bb) Real Property. Set forth on Schedule 5.1(bb) is (i) the
address (street, city, county and state) of each parcel of Real Estate owned
or leased by the Borrower, and (ii) the name of the lessor of each leased
parcel.
Section 5.2 Survival of Representations and Warranties, Etc. All
representations and warranties set forth in this Article 5 and all statements
contained in any certificate, financial statement or other instrument
delivered by or on behalf of the Borrower pursuant to or in connection with
this Agreement or any of the Loan Documents (including, but not limited to,
any such representation, warranty or statement made in or in connection
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with any amendment thereto) shall constitute representations and warranties
made under this Agreement. All representations and warranties made under
this Agreement shall be made or deemed to be made at and as of the Agreement
Date, at and as of the Effective Date and at and as of the date of each Loan,
except that representations and warranties which, by their terms are
applicable only to one such date shall be deemed to be made only at and as of
such date. All representations and warranties made or deemed to be made
under this Agreement shall survive and not be waived by the execution and
delivery of this Agreement, any investigation made by or on behalf of the
Lender or any borrowing hereunder.
ARTICLE 6 - SECURITY INTEREST
Section 6.1 Security Interest. (a) To secure the payment,
observance and performance of the Secured Obligations, the Borrower hereby
mortgages, pledges and assigns all of the Collateral to the Lender for itself
and as agent for any Affiliate of the Lender and grants to the Lender for
itself and as agent for any Affiliate of the Lender a continuing security
interest in, and a continuing Lien upon, all of the Collateral.
(b) As additional security for all of the Secured Obligations,
the Borrower grants to the Lender for itself and as agent for any Affiliate
of the Lender a security interest in, and assigns to the Lender for itself
and as agent for any Affiliate of the Lender all of the Borrower's right,
title and interest in and to, any deposits or other sums at any time credited
by or due from the Lender and each Affiliate of the Lender to the Borrower,
with the same rights therein as if the deposits or other sums were credited
by or due from the Lender.
Section 6.2 Continued Priority of Security Interest. (a) The
Security Interest granted by the Borrower shall at all times be valid,
perfected and enforceable against the Borrower and all third parties in
accordance with the terms of this Agreement, as security for the Secured
Obligations, and the Collateral shall not at any time be subject to any Liens
that are prior to, on a parity with or junior to the Security Interest, other
than Permitted Liens.
(b) The Borrower shall, at its sole cost and expense, take all
action that may be necessary or desirable, or that the Lender may request, so
as at all times to maintain the validity, perfection, enforceability and rank
of the Security Interest in the Collateral in conformity with the
requirements of Section 6.2(a) or to enable the Lender to exercise or enforce
its rights hereunder, including, but not limited to: (i) paying all taxes,
assessments and other claims lawfully levied or assessed on any of the
Collateral, except to the extent that such taxes, assessments and other
claims constitute Permitted Liens, (ii) diligently seeking to obtain, after
the Agreement Date, landlords', mortgagees' or mechanics' releases,
subordinations or waivers, (iii) delivering to the Lender, endorsed or
accompanied by such instruments of assignment as the Lender may specify, and
stamping or marking in such manner as the Lender may specify, any and all
chattel paper, instruments, letters and advices of guaranty and documents
evidencing or forming a part of the Collateral, and (iv) executing and
delivering financing statements, pledges, designations, hypothecations,
notices and assignments, in each case in form and substance satisfactory to
the Lender, relating to the creation, validity, perfection, maintenance or
continuation of the Security Interest under the UCC or other applicable law.
(c) The Lender is hereby authorized to file one or more financing
or continuation statements or amendments thereto without the signature of or
in the name of the Borrower for any purpose described in Section 6.2(b). A
carbon, photographic or other reproduction of this Agreement or of any of the
Security Documents or of any financing statement filed in connection with
this Agreement is sufficient as a financing statement, to the extent
permitted by applicable law.
(d) The Borrower shall xxxx its books and records as may be
necessary or appropriate to evidence, protect and perfect the Security
Interest and shall cause its financial statements to reflect the Security
Interest.
ARTICLE 7 - COLLATERAL COVENANTS
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Until the Facility has been terminated and all the Secured
Obligations (other than Secured Obligations consisting of indemnities that
survive termination of the Facility and payment in full of the Loans) have
been paid in full, unless the Lender shall otherwise consent in the manner
provided in Section 12.11:
Section 7.1 Collection of Receivables. (a) The Borrower will
cause all moneys, checks, notes, drafts and other payments relating to or
constituting proceeds of Receivables arising out of the sale or lease of
goods or the rendering of services to be forwarded to a Lockbox for deposit
in an Agency Account in accordance with the procedures set out in the
corresponding Agency Account Agreement, and in particular the Borrower will
(i) advise each Account Debtor to address all remittances with respect to
amounts payable on account of any Receivables to a specified Lockbox, and
(ii) xxxx all invoices relating to any such amounts with a legend
satisfactory to the Lender indicating that payment is to be made to the
Borrower via a specified Lockbox.
(b) The Borrower and the Lender shall cause all collected
balances in each Agency Account to be transmitted daily by wire transfer or
depository transfer check or Automated Clearing House transfer in accordance
with the procedures set forth in the corresponding Agency Account Agreement
to the Lender at the Lender's Office (i) for application, on account of the
Secured Obligations, as provided in Section 2.3(c), 11.2 and 11.3, such
credits to be entered on the first Business Day following receipt and to be
conditioned upon final payment in cash or solvent credits of the items giving
rise to them, and (ii) with respect to any balance remaining after such
application, so long as no Default or Event of Default has occurred and is
continuing, for transfer to the Disbursement Account or such other account of
the Borrower as the Borrower and the Lender may agree.
(c) Any moneys, checks, notes, drafts or other payments referred
to in clause (a) of this Section 7.1 which are received by or on behalf of
the Borrower will be held in trust for the Lender and will be delivered to
the Lender at the Lender's Office as promptly as possible in the exact form
received, together with any necessary endorsements.
Section 7.2 Verification and Notification. The Lender shall
have the right (a) at any time and from time to time, in the name of the
Lender or in the name of the Borrower, to verify the validity, amount or any
other matter relating to any Receivables by mail, telephone, telegraph or
otherwise, and (b) after the occurrence and during the continuance of an
Event of Default, to notify the Account Debtors or obligors under any
Receivables of the assignment of such Receivables to the Lender and to direct
such Account Debtor or obligors to make payment of all amounts due or to
become due thereunder directly to the Lender and, upon such notification and
at the expense of the Borrower, to enforce collection of any such Receivables
and to adjust, settle or compromise the amount or payment thereof, in the
same manner and to the same extent as the Borrower might have done.
Section 7.3 Disputes, Returns and Adjustments. (a) In the
event amounts due and owing under any Receivable in excess of $100,000 are in
dispute between the Account Debtor and the Borrower, the Borrower shall
provide the Lender with prompt written notice thereof.
(b) The Borrower shall notify the Lender promptly of all material
returns and credits in excess of $100,000 in respect of any Receivable, which
notice shall specify the Receivables affected.
(c) The Borrower may, in the ordinary course of business, unless
an Event of Default shall have then occurred and be continuing, grant any
extension of time for payment of any Receivable or compromise, compound or
settle the same for less than the full amount thereof or release wholly or
partly any Person liable for the payment thereof or allow any credit or
discount whatsoever thereon; provided that no such action results in the
reduction of more than $100,000 in the amount payable with respect to any
Receivable or of more than $250,000 with respect to all Receivables in any
fiscal year of the Borrower.
Section 7.4 Invoices. (a) The Borrower will not use any
invoices except invoices in the forms delivered to the Lender prior to the
Agreement Date, unless the Borrower shall have given the Lender 45 days'
prior notice of the intended use of a different form of invoice together with
a copy of such different form.
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(b) Upon the request of the Lender, the Borrower shall deliver
to the Lender, at the Borrower's expense, copies of customers' invoices or
the equivalent, original shipping and delivery receipts or other proof of
delivery, customers' statements, the original copy of all documents,
including, without limitation, repayment histories and present status
reports, relating to Receivables and such other documents and information
relating to the Receivables as the Lender shall specify.
Section 7.5 Delivery of Instruments. In the event any
Receivable in an amount in excess of $50,000 is, or Receivables in excess of
$100,000 in the aggregate are, at any time evidenced by a promissory note or
notes, trade acceptance or any other instrument for the payment of money, the
Borrower will immediately thereafter deliver such instruments to the Lender,
appropriately endorsed to the Lender.
Section 7.6 Sales of Inventory. All sales of Inventory will be
made in compliance with all requirements of applicable law in all material
respects.
Section 7.7 Returned Goods. The Security Interest in the
Inventory shall, without further act, attach to the cash and non-cash
proceeds resulting from the sale or other disposition thereof and to all
Inventory which is returned to the Borrower by customers or is otherwise
recovered.
Section 7.8 Ownership and Defense of Title. (a) Except for
Permitted Liens and the Security Interest, the Borrower shall at all times be
the sole owner of each and every item of Collateral and shall not create any
Lien on, or sell, lease, exchange, assign, transfer, pledge, hypothecate,
grant a security interest or security title in or otherwise dispose of, any
of the Collateral or any interest therein, except for sales of Inventory in
the ordinary course of business, for cash or on open account or on terms of
payment ordinarily extended to its customers and except as otherwise
expressly contemplated herein. The inclusion of "proceeds" of the Collateral
under the Security Interest shall not be deemed a consent by the Lender to
any other sale or other disposition of any part or all of the Collateral.
(b) The Borrower shall defend its title in and to the Collateral
and shall defend the Security Interest in the Collateral against the claims
and demands of all Persons.
(c) In addition to, and not in derogation of, the foregoing and
the requirements of any of the Security Documents, the Borrower shall (i)
protect and preserve all properties material to its business, including
Intellectual Property and maintain all tangible property in good and workable
condition in all material respects, with reasonable allowance for wear and
tear, and (ii) from time to time make or cause to be made all needed and
appropriate repairs, renewals, replacements and additions to such properties
necessary for the conduct of its business, so that the business carried on in
connection therewith may be properly and advantageously conducted at all
times.
Section 7.9 Insurance. (a) The Borrower shall at all times
maintain insurance on the Inventory and Equipment against loss or damage by
fire, theft, burglary, pilferage, loss in transit and such other hazards as
the Lender shall reasonably specify, in amounts and under policies issued by
insurers reasonably acceptable to the Lender. All premiums on such insurance
shall be paid by the Borrower and copies of the policies delivered to the
Lender. The Borrower will not use or permit the Inventory or Equipment to be
used in violation of any applicable law or in any manner which might render
inapplicable any insurance coverage.
(b) All insurance policies required under Section 7.9(a) shall
name the Lender as an additional named insured and shall contain "New York
standard" loss payable clauses in the form submitted to the Borrower by the
Lender, or otherwise in form and substance reasonably satisfactory to the
Lender, naming the Lender as loss payee as its interests may appear, and
providing that (i) all proceeds thereunder shall be payable to the Lender,
(ii) no such insurance shall be affected by any act or neglect of the insured
or owner of the property described in such policy, and (iii) such policy and
loss payable clauses may not be cancelled, amended or terminated unless at
least 30 days' prior written notice is given to the Lender.
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(c) Any proceeds of insurance referred to in this Section 7.9
which are paid to the Lender shall be, at the option of the Lender in its
good faith discretion, either (i) applied to rebuild, restore or replace the
damaged or destroyed property, or (ii) applied to the payment or prepayment
of the Secured Obligations; provided, that so long as no Default or Event of
Default shall then exist, and to the extent such insurance proceeds so
received are less than $500,000 in the aggregate during the term of this
Agreement, the Borrower may apply such proceeds at its discretion.
(d) The Borrower shall at all times maintain, in addition to the
insurance required by Section 7.9(a) or any of the Security Documents,
insurance with responsible insurance companies against such risks and in such
amounts as is customarily maintained by similar businesses or as may be
required by applicable law, including such public liability, products
liability, third party property damage and business interruption insurance as
is consistent with reasonable business practices, and from time to time
deliver to the Lender upon its request a detailed list of the insurance then
in effect, stating the names of the insurance companies, the amounts and
rates of the insurance, the dates of the expiration thereof and the
properties and risks covered thereby.
Section 7.10 Location of Offices and Collateral. (a) The
Borrower will not change the location of its chief executive office or the
place where it keeps its books and records relating to the Collateral or
change its name, identity or corporate structure without giving the Lender 30
days' prior written notice thereof.
(b) All Inventory, other than Inventory in transit to any such
location or to the point of sale, and all Equipment, other than motor
vehicles, will at all times be kept by the Borrower at one of the locations
set forth in Schedules 5.1(u) and 5.1(v), respectively, and shall not,
without the prior written consent of the Lender, be removed therefrom except,
so long as no Event of Default shall have occurred and be continuing, for
sales of Inventory permitted under Section 7.8.
(c) If any Inventory is in the possession or control of any of
the Borrower's agents or processors, the Borrower shall notify such agents or
processors of the Security Interest and, upon the occurrence and during the
continuance of an Event of Default, shall instruct them (and cause them to
acknowledge such instruction) to hold all such Inventory for the account of
the Lender, subject to the instructions of the Lender.
Section 7.11 Records Relating to Collateral. (a) The Borrower
will at all times (i) keep complete and accurate records of Inventory on a
basis consistent with past practices of the Borrower, itemizing and
describing the kind, type and quantity of Inventory and the Borrower's cost
therefor, and (ii) keep complete and accurate records of all other
Collateral.
(b) The Borrower will take a physical listing of all Inventory,
wherever located, at least annually.
Section 7.12 Inspection. The Lender (by any of its officers,
employees or agents) shall have the right, to the extent that the exercise of
such right shall be within the control of the Borrower, at any time or times
to (a) visit the properties of the Borrower, inspect the Collateral and the
other assets of the Borrower and its Subsidiaries and inspect and make
extracts from the books and records of the Borrower and its Subsidiaries,
including, but not limited to, management letters prepared by independent
accountants, all during customary business hours at such premises, (b)
discuss the Borrower's business, assets, liabilities, financial condition,
results of operations and business prospects, insofar as the same are
reasonably related to the rights of the Lender hereunder or under any of the
Loan Documents, with the Borrower's and its Subsidiaries' (i) principal
officers, (ii) independent accountants and other professionals providing
services to the Borrower, and (iii) any other Person (except that any such
discussion with any third parties shall be conducted only in accordance with
the Lender's standard operating procedures relating to the maintenance of
confidentiality of confidential information of borrowers), and (c) verify the
amount, quantity, value and condition of, or any other matter relating to,
any of the Collateral and in this connection to review, audit and make
extracts from all records and files related to any of the Collateral. The
Borrower will deliver to the Lender any instrument necessary to authorize an
independent
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accountant or other professional to have discussions of the type outlined
above with the Lender or for the Lender to obtain records from any service
bureau maintaining records on behalf of the Borrower.
Section 7.13 Maintenance of Equipment. The Borrower shall
maintain all physical property that constitutes Equipment in good and
workable condition in all material respects, with reasonable allowance for
wear and tear, and shall exercise proper custody over all such property.
Section 7.14 Information and Reports.
(a) Schedule of Receivables. The Borrower shall deliver to the
Lender (i) on or before the Effective Date, a Schedule of Receivables that
arise out of the sale or lease of goods or the rendering of services as of a
date not more than three Business Days prior to the Effective Date setting
forth a detailed aged trial balance of all of such then existing Receivables,
specifying the name of and the balance due from (and any rebate due to) each
Account Debtor obligated on any such Receivable so listed, and (ii) no later
than 15 days after the end of each Accounting Period of the Borrower, a
Schedule of such Receivables as of the last Business Day of the Borrower's
immediately preceding Accounting Period setting forth (A) a detailed aged
trial balance of all of such then existing Receivables of the Borrower,
specifying the name of and the balance due from (and any rebate due to) each
Account Debtor obligated on a Receivable so listed and (B) a reconciliation
to the Schedule of Receivables delivered in respect of the next preceding
Accounting Period.
(b) Schedule of Inventory. The Borrower shall deliver to the
Lender on or before the Effective Date, and no later than 15 days after the
end of each Accounting Period of the Borrower thereafter, a Schedule of
Inventory as of the last Business Day of the immediately preceding Accounting
Period of the Borrower, itemizing and describing the kind, type, quantity and
location of Inventory and the cost thereof.
(c) Schedule of Equipment. The Borrower shall deliver to the
Lender on or before the Effective Date and thereafter on such subsequent
dates as may be requested by the Lender, a Schedule of Equipment, describing
each item of such Equipment and the location, cost and then current book
value thereof.
(d) Borrowing Base Certificate. The Borrower shall deliver to
the Lender not later than three Business Days after the last day of each
accounting week of the Borrower a Borrowing Base Certificate prepared as of
the close of business on the last Business Day of such accounting week.
(e) Notice of Diminution of Value. The Borrower shall give
prompt notice to the Lender of any matter or event which has resulted in, or
may result in, the actual or potential diminution in excess of $100,000 in
the value of any of its Collateral, except for any diminution in the value of
any Receivables or Inventory in the ordinary course of business which has
been appropriately reserved against, as reflected in the financial statements
previously delivered to the Lender pursuant to Article 9.
(f) Certification. Each of the schedules delivered to the Lender
pursuant to this Section 7.14 shall be certified by the Chief Financial
Officer of the Borrower to be true, correct and complete in all material
respects as of the date indicated thereon.
(g) Other Information. The Lender may, in its good faith
discretion, from time to time require the Borrower to deliver the schedules
described in Section 7.14(a), (b), (c) and (d) more or less often and on
different schedules than specified in such Section, and the Borrower will
comply with such requests. The Borrower shall also furnish to the Lender
such other information with respect to the Collateral as the Lender may from
time to time reasonably request.
Section 7.15 Power of Attorney.
(a) Effective upon the occurrence and during the continuance of
an Event of Default, the Borrower hereby appoints the Lender as its attorney,
with power (i) to endorse the name of the Borrower on any checks,
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notes, acceptances, money orders, drafts or other forms of payment or
security that may come into the Lender's possession, and (ii) to sign the
name of the Borrower on any invoice or xxxx of lading relating to any
Receivables, Inventory or other Collateral, on any drafts against customers
related to letters of credit, on schedules and assignments of Receivables
furnished to the Lender by the Borrower, on notices of assignment, financing
statements and other public records relating to the perfection or priority of
the Security Interest.
(b) The Borrower hereby appoints the Lender as its attorney, with
power to sign the name of the Borrower on verifications of account and on
notices to or from customers.
ARTICLE 8 - AFFIRMATIVE COVENANTS
Until the Facility has been terminated and all the Secured
Obligations (other than Secured Obligations consisting of indemnities that
survive termination of the Facility and payment in full of the Loans) have
been paid in full, unless the Lender shall otherwise consent in the manner
provided for in Section 12.11, the Borrower will, and will cause each of its
Subsidiaries to:
Section 8.1 Preservation of Corporate Existence and Similar
Matters. Preserve and maintain its corporate existence, rights, franchises,
licenses and privileges in the jurisdiction of its incorporation and qualify
and remain qualified as a foreign corporation and authorized to do business
in each jurisdiction in which the character of its properties or the nature
of its business requires such qualification or authorization, except in each
such case where the failure to do so could not reasonably be expected to
result in a Materially Adverse Effect.
Section 8.2 Compliance with Applicable Law. Comply in all
material respects with all applicable laws relating to it, except where the
failure to so comply could not reasonably be expected to result in a
Materially Adverse Effect.
Section 8.3 Conduct of Business. Engage only in businesses in
substantially the same fields as the businesses conducted on the Effective
Date.
Section 8.4 Payment of Taxes and Claims. Pay or discharge when
due (a) all taxes, assessments and governmental charges or levies imposed
upon it or upon its income or profits or upon any properties belonging to it,
and (b) all lawful claims of materialmen, mechanics, carriers, warehousemen
and landlords for labor, materials, supplies and rentals which, if unpaid,
might become a Lien on any properties of the Borrower or such Subsidiary,
except that this Section 8.4 shall not require the payment or discharge of
any such tax, assessment, charge, levy or claim which is being contested in
good faith by appropriate proceedings and for which adequate reserves have
been established on the appropriate books.
Section 8.5 Accounting Methods and Financial Records. Maintain
a system of accounting, and keep such books, records and accounts (which
shall be true and complete in all material respects), as may be required or
as may be necessary to permit the preparation of financial statements in
accordance with GAAP consistently applied.
Section 8.6 Use of Proceeds. (a) Use the proceeds of (i) the
Initial Loans to pay the amounts indicated in Schedule 8.6 to the Persons
indicated therein, and (ii) all subsequent Loans only for working capital and
general business purposes, and
(b) not use any part of such proceeds to purchase or carry, or
to reduce or retire or refinance any credit incurred to purchase or carry,
any margin stock (within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System) or for any other purpose which would
involve a violation of such Regulation U or Regulation T or X of such Board
of Governors or for any other purpose prohibited by law or by the terms and
conditions of this Agreement.
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Section 8.7 Hazardous Waste and Substances; Environmental
Requirements. (a) In addition to, and not in derogation of, the
requirements of Section 8.2 and of the Security Documents, comply in all
material respects with all laws, governmental standards and regulations
applicable to the Borrower or to any of its assets in respect of occupational
health and safety laws, rules and regulations and Environmental Laws,
promptly notify the Lender of its receipt of any notice of a violation of any
such law, rule, standard or regulation and indemnify and hold the Lender
harmless from all loss, cost, damage, liability, claim and expense incurred
by or imposed upon the Lender on account of the Borrower's failure to perform
its obligations under this Section 8.7.
(b) Whenever the Borrower gives notice to the Lender pursuant to
this Section 8.7 with respect to a matter that reasonably could be expected
to result in liability to the Borrower in excess of $100,000 in the
aggregate, the Borrower shall, at the Lender's request and the Borrower's
expense, (i) cause an independent environmental engineer acceptable to the
Lender to conduct such tests of the site where the noncompliance or alleged
noncompliance with Environmental Laws has occurred and prepare and deliver to
the Lender a report setting forth the results of such tests, a proposed plan
to bring the Borrower into compliance with such Environmental Laws and an
estimate of the costs thereof, and (ii) provide to the Lender a supplemental
report of such engineer whenever the scope of the noncompliance or the
response thereto or the estimated costs thereof shall materially change.
Section 8.8 Accuracy of Information. All written information,
reports, statements and other papers and data furnished to the Lender,
whether pursuant to Article 9 or any other provision of this Agreement or any
of the other Loan Documents, shall be, at the time the same is so furnished,
complete and correct in all material respects, and no such information,
reports, statements or other papers or data so furnished shall contain any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements contained therein not misleading.
Section 8.9 Revisions or Updates to Schedules. Should any of
the information or disclosures provided on any of the Schedules originally
attached hereto become outdated or incorrect in any material respect, the
Borrower shall provide promptly to the Lender such revisions or updates to
such Schedule(s) as may be necessary or appropriate to update or correct such
Schedule(s); provided that no such revisions or updates to any Schedule(s)
shall be deemed to have cured any breach of warranty or representation
resulting from the inaccuracy or incompleteness of any such Schedule(s)
unless and until the Lender, in its sole discretion, shall have accepted in
writing such revisions or updates to such Schedule(s).
Section 8.10 Change in Management. In the event that any
executive officer of the Borrower ceases to be an executive officer for any
reason, the Borrower shall appoint a replacement for such executive officer
reasonably satisfactory to the Lender within 120 days following the date on
which such executive officer ceased to be an executive officer.
ARTICLE 9 - INFORMATION
Until the Facility has been terminated and all the Secured
Obligations (other than Secured Obligations consisting of indemnities that
survive termination of the Facility and payment in full of the Loans) have
been paid in full, unless the Lender shall otherwise consent in the manner
set forth in Section 12.11, the Borrower will furnish to the Lender at the
Lender's Office:
Section 9.1 Financial Statements.
(a) Audited Year-End Statements. As soon as available, but in
any event within 100 days after the end of each fiscal year of each of the
Borrower, Captain D's and the Parent, copies of the balance sheet of each
such Person as at the end of such fiscal year and the related statements of
income, shareholders' equity and cash flow for such fiscal year, in each case
setting forth in comparative form the figures for the previous year of such
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Person and reported on, without qualification, by Ernst & Young PLLC or other
independent certified public accountants selected by such Person and
reasonably acceptable to the Lender.
(b) Quarterly Financial Statements. As soon as available, but
in any event within 50 days after the end of each fiscal quarter of each of
the Borrower, Captain D's and the Parent, copies of the unaudited balance
sheet of each such Person as at the end of such fiscal quarter and the
related unaudited income statement for each Borrower for such fiscal quarter
and for the portion of the fiscal year of such Person through such fiscal
quarter, in the case of Borrower only, certified by the chief financial
officer of the Borrower to the best of his knowledge as presenting fairly the
financial condition and results of operations of such Person as at the date
thereof and for the periods ended on such date, subject to normal year end
adjustments.
(c) Periodic Financial Statements. As soon as available, but in
any event within 30 days after the end of each Accounting Period of the
Borrower, copies of the unaudited income statement for the Borrower for such
period and for the portion of the fiscal year of the Borrower through such
period, certified by the chief financial officer of the Borrower to the best
of his knowledge as presenting fairly the financial condition and results of
operations of the Borrower as at the date thereof and for the periods ended
on such date, subject to normal year end adjustments.
(d) Projected Financial Statements. As soon as available, but
in any event within 30 days prior to the end of each fiscal year of the
Borrower, forecasted financial statements, prepared by the Borrower,
consisting of balance sheets, cash flow statements and income statements of
the Borrower, reflecting projected borrowings hereunder and setting forth the
assumptions on which such forecasted financial statements were prepared,
covering the one-year period until the next fiscal year end and prepared on
an Accounting Period basis.
All such financial statements referred to in clauses (a) and (b) shall be
prepared in accordance with GAAP (except, with respect to interim financial
statements, for the omission of footnotes) applied consistently throughout
the periods reflected therein. The financial statements referred to in
clause (c) are not required to be prepared in accordance with GAAP, but shall
be prepared consistent with past practice.
Section 9.2 Communication with Accountants. The Borrower
authorizes the Lender to discuss the financial condition of the Borrower with
the Borrower's independent certified public accountants and agrees that such
discussion or communication shall be without liability to either the Lender
or the Borrower's independent certified public accountants. The Borrower
shall deliver a letter addressed to such accountants authorizing them to
comply with the provisions of this Section 9.2.
Section 9.3 Officer's Certificate. Together with each delivery
of financial statements for the Borrower required by Section 9.1(a), (b) and
(c), a certificate of the Borrower's President or Chief Financial Officer, in
the form of Exhibit D attached hereto, (a) stating that, based on an
examination sufficient to enable him to make an informed statement, no
Default or Event of Default exists or, if such is not the case, specifying
such Default or Event of Default and its nature, when it occurred, whether it
is continuing and the steps being taken by the Borrower with respect to such
Default or Event of Default, and (b) setting forth the calculations necessary
to establish whether or not the Borrower was in compliance with the covenants
contained in Sections 10.1, 10.2, and 10.5 as of the date of such statements.
Section 9.4 Copies of Other Reports. (a) Promptly upon receipt
thereof, copies of all reports, if any, submitted to the Borrower or its
Board of Directors by its independent public accountants, including, without
limitation, all management reports .
(b) From time to time and promptly upon each request, such
forecasts, data, certificates, reports, statements, opinions of counsel,
documents or further information regarding the business, assets, liabilities,
financial condition, results of operations or business prospects of the
Borrower as the Lender may reasonably request. The rights of the Lender
under this Section 9.4(b) are in addition to and not in derogation of its
rights under any other provision of this Agreement or any Loan Document.
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(c) If requested by the Lender, statements in conformity with the
requirements of Federal Reserve Form U-1 referred to in Regulation U of the
Board of Governors of the Federal Reserve System.
(d) Promptly upon the filing thereof, copies of all reports filed
by the Parent with the Securities Exchange Commission.
Section 9.5 Notice of Litigation and Other Matters. Prompt
notice of:
(a) the commencement, to the extent the Borrower is aware of the
same, of all proceedings and investigations by or before any governmental or
nongovernmental body and all actions and proceedings in any court or before
any arbitrator against or in any other way relating adversely to, or
adversely affecting, the Borrower or any Affiliate of the Borrower or any of
their respective property, assets or businesses which could reasonably be
expected to, singly or in the aggregate, cause a Default or an Event of
Default or have a Materially Adverse Effect,
(b) any amendment of the articles of incorporation or bylaws of
the Borrower,
(c) any change in the business, assets, liabilities, financial
condition, results of operations or business prospects of the Borrower which
has had or could reasonably be expected to have any Materially Adverse
Effect; any change in the executive officers of the Borrower; and, to the
extent that the Borrower is aware of the same, any change in the business,
assets, liabilities, financial condition, results of operations, or business
prospects of any Affiliate of the Borrower which could reasonably be expected
to have a Materially Adverse Effect.
(d) any (i) Default or Event of Default, or (ii) event that
constitutes or that, with the passage of time or giving of notice or both,
would constitute a default or event of default by the Borrower under any
material agreement (other than this Agreement) to which the Borrower is a
party or by which the Borrower or any of its property may be bound if the
exercise of remedies thereunder by the other party to such agreement would
have, either individually or in the aggregate, a Materially Adverse Effect;
(e) to the extent that the Borrower is aware of the same, (i) any
failure on the part of the Parent or Captain D's to pay when due and payable
the principal of or interest on any Indebtedness where the principal amount
of such Indebtedness is in excess of $250,000, or (ii) the maturity of any
such Indebtedness shall have (A) been accelerated in accordance with the
provisions of any indenture, contract or instrument providing for the
creation of or concerning such Indebtedness, or (B) been required to be
prepaid prior to the stated maturity thereof, or (iii) any event shall have
occurred and be continuing which, with or without the passage of time or the
giving of notice, or both, would permit any holder or holders of such
Indebtedness, any trustee or agent acting on behalf of such holder or holders
or any other Person so to accelerate such maturity.
Section 9.6 ERISA. As soon as possible and in any event within
30 days after the Borrower knows, or has reason to know, that:
(a) any Termination Event with respect to a Benefit Plan has
occurred or will occur,
(b) the aggregate present value of the Unfunded Vested Accrued
Benefits under all Plans has increased to an amount in excess of $0, or
(c) the Borrower is in "default" (as defined in Section
4219(c)(5) of ERISA) with respect to payments to a Multiemployer Plan
required by reason of its complete or partial withdrawal (as described in
Section 4203 or 4205 of ERISA) from such Multiemployer Plan,
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a certificate of the President or the chief financial officer of the Borrower
setting forth the details of such of the events described in clauses (a)
through (c) as applicable and the action which is proposed to be taken with
respect thereto and, simultaneously with the filing thereof, copies of any
notice or filing which may be required by the PBGC or other agency of the
United States government with respect to such of the events described in
clauses (a) through (c) as applicable.
ARTICLE 10 - NEGATIVE COVENANTS
Until the Facility has been terminated and all the Secured
Obligations (other than Secured Obligations consisting of indemnities that
survive termination of the Facility and payment in full of the Loans) have
been paid in full, unless the Lender shall otherwise consent in the manner
set forth in Section 12.11, the Borrower and its Subsidiaries will not,
directly or indirectly:
Section 10.1 Financial Ratios.
(a) Minimum Tangible Net Worth. Permit the Tangible Net Worth
of the Borrower at any time, measured from and after the Effective Date
through October 29, 2000, to be less than $9,000,000; for the fiscal year
ending October 28, 2001, the minimum Tangible Net Worth shall be increased by
an amount equal to Net Income (if positive) for the fourth fiscal quarter of
the Borrower's fiscal year ending October 29, 2000, and for each subsequent
fiscal year, the minimum Tangible Net Worth shall be further increased by an
amount equal to Net Income (if positive) for the prior fiscal year minus any
Restricted Distributions permitted and made pursuant to Section 10.6(iv)
hereof in respect of such prior fiscal year.
(b) Minimum Fixed Charge Coverage Ratio. Permit the ratio of (i)
the Borrower's Net Income, plus depreciation, plus Interest Expense, plus
amortization and other noncash charges, less Unfunded Capital Expenditures
and dividends, to (ii) the Borrower's Fixed Charges, as of the end of each
fiscal quarter of the Borrower, measured for the immediately preceding four
fiscal quarters, at any time from and after the Effective Date to be less
than 1.25 to 1 at any time.
(c) Maximum Intercompany Indebtedness. The aggregate amount of
Indebtedness owing by all Affiliates of the Borrower to Borrower shall not
exceed at any one time outstanding the greater of (x) $5,500,000 or (y) the
gross amount of the Borrower's sales during the immediately preceding week.
Section 10.2 Indebtedness. Create, assume, or otherwise become
or remain obligated in respect of, or permit or suffer to exist or to be
created, assumed or incurred or to be outstanding any Indebtedness for Money
Borrowed, except for Contingent Insurance Obligations and for Permitted
Indebtedness for Money Borrowed.
Section 10.3 Guaranties. Become or remain liable with respect to
any Guaranty of any obligation of any other Person, other than Contingent
Insurance Obligations.
Section 10.4 Investments. Acquire, after the Agreement Date, any
Business Unit or Investment or, after such date, permit any Investment to be
outstanding, other than Permitted Investments.
Section 10.5 Capital Expenditures. Make or incur any Capital
Expenditures, except that the Borrower may make or incur Capital Expenditures
in any fiscal year in an amount not to exceed, in the aggregate, $750,000.
Section 10.6 Restricted Distributions and Payments, Etc. Declare
or make any Restricted Distribution or Restricted Payment, except that:
(i) the Borrower may pay a dividend to the Parent on the
Effective Date in the amount of $16,000,000,
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(ii) so long as an Event of Default does not then exist and
would not result therefrom, the Borrower may make payments to the
Parent as required under any Tax Sharing Agreement that has been
entered into in accordance with Section 10.13 hereof,
(iii) the Borrower may make payments or transfer assets
(valued at the higher of cost or book value) to the Parent pursuant
to transactions no less favorable to the Borrower than would be in
the case if such transaction had been effected with a Person not an
Affiliate in an aggregate amount for all such transactions not to
exceed $1,825,000 in any year, and
(iv) so long as an Event of Default does not then exist and
would not result therefrom, commencing with the fiscal year ending
October 28, 2002, the Borrower may pay dividends no more frequently
than once per fiscal year in an amount not to exceed 30% of Net
Income for the immediately preceding fiscal year, so long as (a)
immediately after giving effect to any such dividend, the Borrower
shall be in pro forma compliance with the financial covenants
contained in Section 10.1 above, (b) both before and after the making
of any such dividend, Availability is at least $5,000,000, and (c)
any such dividend is paid during thirty days after the Borrower's
audited financial statements for the immediately preceding fiscal
year are required to be delivered pursuant to Section 9.1(a).
None of the foregoing covenants in this Section 10.6 shall, prior to
the date on which the indebtedness under the Indenture has been paid in full
or defeased or otherwise satisfied or until Section 1109 of the Indenture has
been removed, restrict the transfer of funds by the Borrower or any other
Existing Subsidiary to the Parent sufficient to satisfy when due all payment
obligations of the Parent or TPI in respect of the Debentures, including,
without limitation, the payment of principal, premium, if any, interest or
the Repurchase Price or the Redemption Price, so long as at the time of such
transfer the payment of such obligations in respect of the Debentures is
permitted to be made under Article XIV of the Indenture.
Section 10.7 Merger, Consolidation and Sale of Assets. Merge or
consolidate with any other Person or sell, lease or transfer or otherwise
dispose of all or a substantial portion of its assets to any Person.
Section 10.8 Transactions with Affiliates. Effect any
transaction with any Affiliate, other than transactions on a basis no less
favorable to the Borrower than would be the case if such transaction had been
effected with a Person not an Affiliate.
Section 10.9 Liens. Create, assume or permit or suffer to exist
or to be created or assumed any Lien on any of the property or assets of the
Borrower, real, personal or mixed, tangible or intangible, except for
Permitted Liens.
Section 10.10 Operating Leases. Enter into any Operating Lease
which would cause the aggregate payment obligations of the Borrower under all
Operating Leases to exceed $3,500,000 in any fiscal year.
Section 10.11 Benefit Plans. Permit, or take any action which
would result in, the aggregate present value of the Unfunded Vested Accrued
Benefits under all Benefit Plans of the Borrower to exceed $0.
Section 10.12 Sales and Leasebacks. Enter into any arrangement
with any Person providing for the leasing from such Person of real or
personal property which has been or is to be sold or transferred, directly or
indirectly, by the Borrower to such Person.
Section 10.13 Tax Sharing Agreement; Amendments of Other
Agreements.
(a) Enter into any Tax Sharing Agreement, other than in the form
of Exhibit D attached hereto or otherwise with the prior written approval of
the Lender, or amend or otherwise modify any Tax Sharing
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Agreement to which it is a party, unless the Borrower shall have obtained the
prior written consent of the Lender to such amendment or other modification.
(b) Amend in any way the interest rate or principal amount or
schedule of payments of principal and interest with respect to any
Indebtedness (other than the Secured Obligations) other than to reduce the
interest rate or extend the schedule of payments with respect thereto.
Section 10.14 Minimum Availability. Permit Availability to be
less than $1,000,000 at any time.
ARTICLE 11 - DEFAULT
Section 11.1 Events of Default. Each of the following shall
constitute an Event of Default, whatever the reason for such event and
whether it shall be voluntary or involuntary or be effected by operation of
law or pursuant to any judgment or order of any court or any order, rule or
regulation of any governmental or nongovernmental body:
(a) Default in Payment of Loans. The Borrower shall default in
any payment of principal of, or interest on, any Loan or Note when and as due
(whether at maturity, by reason of acceleration or otherwise).
(b) Other Payment Default. The Borrower shall default in the
payment, as and when due, of principal of or interest on, any other Secured
Obligation, and such default shall continue for five days after written
notice thereof has been given to the Borrower by the Lender.
(c) Misrepresentation. Any representation or warranty made or
deemed to be made by the Borrower under this Agreement or any other Loan
Document or any amendment hereto or thereto shall at any time prove to have
been incorrect or misleading in any material respect when made.
(d) Default in Performance. The Borrower shall default:
(i) in the performance or observance of any term,
covenant, condition or agreement contained in Sections 7.3, 8.1, 8.3,
8.4, 8.7 or 8.9 and such failure shall continue unremedied for a
period of twenty days; or
(ii) in the performance or observance of any term,
covenant, condition or agreement contained in Sections 7.5, 7.10,
7.11, 7.13, 7.14, 8.2 or 8.5 and such failure shall continue
unremedied for a period of five days; provided, that any default by
the Borrower under the terms of Section 7.14 shall immediately
constitute an Event of Default hereunder, if the Borrower has
previously defaulted under such Section on two or more instances
during the twelve month period ending on the date of such default;
or
(iii) in the performance or observance of any term,
covenant, condition or agreement contained in Articles 6, 7, 8, 9 or
10 other than as set forth in clause (i) or (ii) of this subsection
(d) above; or
(iv) in the performance or observance of any term, covenant,
condition or agreement contained in any other provision of this
Agreement (other than as specifically provided for otherwise in this
Section 11.1) and such default shall continue for a period of 30 days
after written notice thereof has been given to the Borrower by the
Lender.
(e) Indebtedness Cross-Default. (i) The Borrower shall fail to
pay when due and payable the principal of or interest on any Indebtedness
(other than the Loans or Note) where the principal amount of such
Indebtedness is in excess of $100,000, and any grace or cure period
applicable thereto shall have elapsed without such payment being made, or
(ii) the maturity of any such Indebtedness shall have (A) been accelerated in
accordance with the provisions of any indenture, contract or instrument
providing for the creation of or
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concerning such Indebtedness, or (B) been required to be prepaid prior to the
stated maturity thereof, or (iii) any event shall have occurred and be
continuing which, with or without the passage of time or the giving of
notice, or both, would permit any holder or holders of such Indebtedness, any
trustee or agent acting on behalf of such holder or holders or any other
Person so to accelerate such maturity.
(f) Other Cross-Defaults. The Borrower shall default in the
payment when due or in the performance or observance of any material
obligation or condition of the Lease Agreement, or the Borrower shall default
in the payment when due or in the performance of any material obligation or
condition of any other agreement, contract or lease (other than the Security
Documents or any such agreement, contract or lease relating to Indebtedness),
if the exercise of remedies thereunder by the other party to such other
agreement, contract or lease could have a Materially Adverse Effect.
(g) Voluntary Bankruptcy Proceeding. Any Obligor, Parent or
Captain D's shall (i) commence a voluntary case under the federal bankruptcy
laws (as now or hereafter in effect), (ii) commence a proceeding seeking to
take advantage of any other laws, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, winding up or composition for
adjustment of debts, (iii) consent to or fail to contest in a timely and
appropriate manner any petition filed against it in an involuntary case under
such bankruptcy laws or other laws, (iv) apply for or consent to, or fail to
contest in a timely and appropriate manner, the appointment of, or the taking
of possession by, a receiver, custodian, trustee or liquidator of itself or
of a substantial part of its property, domestic or foreign, (v) admit in
writing its inability to pay its debts as they become due, (vi) make a
general assignment for the benefit of creditors, or (vii) take any corporate
action for the purpose of authorizing any of the foregoing.
(h) Involuntary Bankruptcy Proceeding. A case or other
proceeding shall be commenced against any Obligor, Parent or Captain D's in
any court of competent jurisdiction seeking (i) relief under the federal
bankruptcy laws (as now or hereafter in effect) or under any other laws,
domestic or foreign, relating to bankruptcy, insolvency, reorganization,
winding up or adjustment of debts, or (ii) the appointment of a trustee,
receiver, custodian, liquidator or the like of any Obligor, Parent or Captain
D's or of all or any substantial part of the assets, domestic or foreign, of
any Obligor, Parent or Captain D's, and such case or proceeding shall
continue undismissed or unstayed for a period of 60 consecutive calendar
days, or an order granting the relief requested in such case or proceeding
against any Obligor, Parent or Captain D's (including, but not limited to, an
order for relief under such federal bankruptcy laws) shall be entered.
(i) Loan Documents. Any event of default or Event of Default
under any other Loan Document shall occur or any Obligor shall default in the
performance or observance of any material term, covenant, condition or
agreement contained in, or the payment of any other sum covenanted to be paid
by any Obligor under, any such Loan Document, and any applicable grace or
cure period shall pass without such default being cured; or any provision of
this Agreement, or of any other Loan Document after delivery thereof
hereunder, shall for any reason cease to be valid and binding, other than a
nonmaterial provision rendered unenforceable by operation of law, or any
Obligor or other party thereto (other than the Lender) shall so state in
writing; or this Agreement or any other Loan Document, after delivery thereof
hereunder, shall for any reason (other than any action taken independently by
the Lender and except to the extent permitted by the terms thereof) cease to
create a valid, perfected and, except as otherwise expressly permitted
herein, first priority Lien on, or security interest in, any of the
Collateral purported to be covered thereby.
(j) Judgment. A judgment or order for the payment of money which
exceeds $100,000 in amount shall be entered against any Obligor by any court
and such judgment or order shall continue undischarged or unstayed for 30
days.
(k) Attachment. A warrant or writ of attachment or execution or
similar process shall be issued against any property of any Obligor and such
warrant or process shall continue undischarged or unstayed for 30 days.
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(l) ERISA. (i) Any Termination Event with respect to a Benefit
Plan shall occur that, after taking into account the excess, if any, of (A)
the fair market value of the assets of any other Benefit Plan with respect to
which a Termination Event occurs on the same day (but only to the extent that
such excess is the property of the Borrower) over (B) the present value on
such day of all vested nonforfeitable benefits under such other Benefit Plan,
results in an Unfunded Vested Accrued Benefit in excess of $0, (ii) any
Benefit Plan shall incur an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA) for which a waiver has not
been obtained in accordance with the applicable provisions of the Code and
ERISA, or (iii) the Borrower is in "default" (as defined in Section
4219(c)(5) of ERISA) with respect to payments to a Multiemployer Plan
resulting from the Borrower's complete or partial withdrawal (as described in
Section 4203 or 4205 of ERISA) from such Multiemployer Plan.
(m) Consummation of Tender Offer. If, by the close of business
on the Business Day immediately after the Effective Date, Section 1109 of the
Indenture has not been removed.
(n) Change of Control. The Parent shall cease to own,
beneficially and of record, 100% of the outstanding capital stock of the
Borrower or such ownership shall cease to vest in it voting control of the
Borrower.
(o) Material Adverse Change. There occurs any act, omission,
event, undertaking or circumstance or series of acts, omissions, events,
undertakings or circumstances which have, or would have, either individually
or in the aggregate, a Materially Adverse Effect with respect to the
Borrower, Parent or Captain D's.
(p) Affiliate Indebtedness Cross-Default. (i) The Parent or
Captain D's shall fail to pay when due and payable the principal of or
interest on any Indebtedness where the principal amount of such Indebtedness
is in excess of $250,000, and any grace or cure period applicable thereto
shall have elapsed without such payment being made, or (ii) the maturity of
any such Indebtedness shall have (A) been accelerated in accordance with the
provisions of any indenture, contract or instrument providing for the
creation of or concerning such Indebtedness, or (B) been required to be
prepaid prior to the stated maturity thereof, or (iii) any event shall have
occurred and be continuing which would permit any holder or holders of such
Indebtedness, any trustee or agent acting on behalf of such holder or holders
or any other Person so to accelerate such maturity.
(q) Contingent Insurance Obligations. Any Person shall make any
claim for indemnification or reimbursement, or shall be indemnified or
reimbursed, under any Contingent Insurance Obligations.
Section 11.2 Remedies.
(a) Automatic Acceleration and Termination of Facilities. Upon
the occurrence of an Event of Default specified in Section 11.1(g) or (h),
(i) the principal of and the interest on the Loans and the Note at the time
outstanding, and all other amounts owed to the Lender under this Agreement or
any of the Loan Documents and all other Secured Obligations, shall thereupon
become due and payable without presentment, demand, protest or other notice
of any kind, all of which are expressly waived, anything in this Agreement or
any of the Loan Documents to the contrary notwithstanding, and (ii) the
Facility and the commitment of the Lender to make advances thereunder or
under this Agreement shall immediately terminate.
(b) Other Remedies. If any Event of Default (other than as
specified in Section 11.1(g) or (h)) shall have occurred and be continuing,
the Lender, in its sole and absolute discretion, may do any of the following:
(i) declare the principal of and interest on the Loans
and the Note at the time outstanding, and all other amounts owed to
the Lender under this Agreement or any of the Loan Documents and all
other Secured Obligations, to be forthwith due and payable, whereupon
the same shall immediately become due and payable without
presentment, demand, protest or other notice of any kind, all of
which are expressly waived, anything in this Agreement or the Loan
Documents to the contrary notwithstanding;
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(ii) terminate the Facility and any commitment of the
Lender to make advances hereunder;
(c) Further Remedies. If any Event of Default shall have
occurred and be continuing, the Lender, in its sole and absolute discretion,
may do any of the following:
(i) notify, or request the Borrower to notify, in
writing or otherwise, any Account Debtor or obligor with respect to
any one or more of the Receivables to make payment to the Lender or
any agent or designee of the Lender, at such address as may be
specified by the Lender, and, if, notwithstanding the giving of any
notice, any Account Debtor or other such obligor shall make payments
to the Borrower, the Borrower shall hold all such payments it
receives in trust for the Lender, without commingling the same with
other funds or property of, or held by, the Borrower and shall
deliver the same to the Lender or any such agent or designee
immediately upon receipt by the Borrower in the identical form
received, together with any necessary endorsements;
(ii) settle or adjust disputes and claims directly with
Account Debtors and other obligors on Receivables for amounts and on
terms which the Lender considers advisable and in all such cases only
the net amounts received by the Lender in payment of such amounts,
after deductions of costs and attorneys' fees, shall constitute
Collateral, and the Borrower shall have no further right to make any
such settlements or adjustments or to accept any returns of
merchandise;
(iii) enter upon any premises on which Inventory or
Equipment may be located and, without resistance or interference by
the Borrower, take physical possession of any or all thereof and
maintain such possession on such premises or move the same or any
part thereof to such other place or places as the Lender shall
choose, without being liable to the Borrower on account of any loss,
damage or depreciation that may occur as a result thereof, so long
as the Lender shall act reasonably and in good faith;
(iv) require the Borrower to and the Borrower shall,
without charge to the Lender, assemble the Inventory and Equipment
and maintain or deliver it into the possession of the Lender or any
agent or representative of the Lender at such place or places as the
Lender may designate;
(v) at the expense of the Borrower, cause any of the
Inventory and Equipment to be placed in a public or field warehouse,
and the Lender shall not be liable to the Borrower on account of any
loss, damage or depreciation that may occur as a result thereof, so
long as the Lender shall act reasonably and in good faith;
(vi) without notice, demand or other process, and without
payment of any rent or any other charge, enter any of the Borrower's
premises and, without breach of the peace, until the Lender completes
the enforcement of its rights in the Collateral, take possession of
such premises or place custodians in exclusive control thereof,
remain on such premises and use the same and any of the Borrower's
equipment, for the purpose of (A) completing any work in process,
preparing any Inventory for disposition and disposing thereof, and
(B) collecting any Receivable, and the Lender is hereby granted a
license or sublicense and all other rights as may be necessary,
appropriate or desirable to use the Intellectual Property in
connection with the foregoing, and the rights of the Borrower under
all licenses and franchise agreements shall inure to the Lender's
benefit (provided, however, that any use of any federally registered
trademarks as to any goods shall be subject to the control as to the
quality of such goods of the owner of such trademarks and the
goodwill of the business symbolized thereby);
(vii) exercise any and all of its rights under any and all
of the Security Documents;
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(viii) apply any cash Collateral to the payment of the
Secured Obligations in any order in which the Lender may elect or use
such cash in connection with the exercise of any of its other rights
hereunder or under any of the Security Documents;
(ix) establish or cause to be established one or more
Lockboxes or other arrangement for the deposit of proceeds of
Receivables, and, in such case, the Borrower shall cause to be
forwarded to the Lender at the Lender's Office, on a daily basis,
copies of all checks and other items of payment and deposit slips
related thereto deposited in such Lockboxes, together with collection
reports in form and substance satisfactory to the Lender; and
(x) exercise all of the rights and remedies of a secured
party under the UCC (whether or not the UCC is applicable) and under
any other applicable law, including, without limitation, the right,
without notice except as specified below and with or without taking
the possession thereof, to sell the Collateral or any part thereof
in one or more parcels at public or private sale, at any location
chosen by the Lender, for cash, on credit or for future delivery and
at such price or prices and upon such other terms as the Lender may
deem commercially reasonable. The Borrower agrees that, to the
extent notice of sale shall be required by law, at least 10 days'
notice to the Borrower of the time and place of any public sale or
the time after which any private sale is to be made shall constitute
reasonable notice, but notice given in any other reasonable manner
or at any other reasonable time shall also constitute reasonable
notification. The Lender shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. The
Lender may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was
so adjourned.
Section 11.3 Application of Proceeds. All proceeds from each
sale of, or other realization upon, all or any part of the Collateral
following an Event of Default shall be applied or paid over as follows:
(a) First: to the payment of all costs and expenses incurred in
connection with such sale or other realization, including attorneys' fees,
(b) Second: to the payment of the Secured Obligations (with the
Borrower remaining liable for any deficiency) in any order which the Lender
may elect,
(c) Third: to the creation of a fund in an amount equal to the
Letter of Credit Reserve, which fund shall be held by the Lender as security
for and applied to the payment of any amounts which may thereafter become due
under the Letter of Credit Facility, and
(d) Fourth: the balance (if any) of such proceeds shall be paid
to the Borrower or, subject to any duty imposed by law or otherwise, to
whomsoever is entitled thereto.
THE BORROWER SHALL REMAIN LIABLE AND WILL PAY, ON DEMAND, ANY DEFICIENCY
REMAINING IN RESPECT OF THE SECURED OBLIGATIONS, TOGETHER WITH INTEREST
THEREON AT A RATE PER ANNUM EQUAL TO THE HIGHEST RATE THEN PAYABLE HEREUNDER
ON SUCH SECURED OBLIGATIONS, WHICH INTEREST SHALL CONSTITUTE PART OF THE
SECURED OBLIGATIONS.
Section 11.4 Power of Attorney. In addition to the
authorizations granted to the Lender under Section 7.15 or under any other
provision of this Agreement or any of the Loan Documents, upon the occurrence
and during the continuance of any Event of Default, the Borrower hereby
irrevocably designates, makes, constitutes and appoints the Lender (and all
Persons designated by the Lender from time to time) as the Borrower's true
and lawful attorney and agent in fact, and following the occurrence and
during the continuance of any such Event of Default, the Lender or any agent
of the Lender may, without notice to the Borrower, and at such time or times
as the Lender or any such agent in its sole discretion may determine, in the
name of the Borrower or the Lender,
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(a) demand payment of the Receivables, enforce payment thereof
by legal proceedings or otherwise, settle, adjust, compromise, extend or
renew any or all of the Receivables or any legal proceedings brought to
collect the Receivables, discharge and release the Receivables or any of them
and exercise all of the Borrower's rights and remedies with respect to the
collection of Receivables,
(b) prepare, file and sign the name of the Borrower on any proof
of claim in bankruptcy or any similar document against any Account Debtor or
any notice of Lien, assignment or satisfaction of Lien or similar document in
connection with any of the Collateral,
(c) endorse the name of the Borrower upon any chattel paper,
document, instrument, notice, freight xxxx, xxxx of lading or similar
document or agreement relating to the Receivables, the Inventory or any other
Collateral,
(d) use the stationery of the Borrower, open the Borrower's mail,
notify the post office authorities to change the address for delivery of the
Borrower's mail to an address designated by the Lender and sign the name of
the Borrower to verifications of the Receivables and on any notice to the
Account Debtors,
(e) use the information recorded on or contained in any data
processing equipment and computer hardware and software relating to the
Receivables, Inventory or other Collateral to which the Borrower or any
Subsidiary of the Borrower has access.
Section 11.5 Miscellaneous Provisions Concerning Remedies .
(a) Rights Cumulative. The rights and remedies of the Lender
under this Agreement, the Note and each of the Loan Documents shall be
cumulative and not exclusive of any rights or remedies which it would
otherwise have. In exercising such rights and remedies, the Lender may be
selective and no failure or delay by the Lender in exercising any right shall
operate as a waiver of such right nor shall any single or partial exercise of
any power or right preclude its other or further exercise or the exercise of
any other power or right.
(b) Waiver of Marshalling. The Borrower hereby waives any right
to require any marshalling of assets and any similar right.
(c) Limitation of Liability. Nothing contained in this Article
11 or elsewhere in this Agreement or in any of the Loan Documents shall be
construed as requiring or obligating the Lender or any agent or designee of
the Lender to make any demand or to make any inquiry as to the nature or
sufficiency of any payment received by it or to present or file any claim or
notice or take any action with respect to any Receivable or any other
Collateral or the moneys due or to become due thereunder or in connection
therewith or to take any steps necessary to preserve any rights against prior
parties, and neither the Lender nor any of its agents or designees shall have
any liability to the Borrower for actions taken pursuant to this Article 11,
any other provision of this Agreement or any of the Loan Documents, so long
as the Lender or such agent or designee shall act reasonably and in good
faith.
(d) Appointment of Receiver. In any action pursuant to this
Article 11, the Lender shall be entitled to the appointment of a receiver,
without notice of any kind whatsoever, to take possession of all or any
portion of the Collateral and to exercise such power as the court shall
confer upon such receiver.
Section 11.6 Trademark License. The Borrower hereby grants to
the Lender the nonexclusive right and license to use any trademark then used
by the Borrower, for the purposes set forth in Section 11.2(c)(vi) and for
the purpose of enabling the Lender to realize on the Collateral and to permit
any purchaser of any portion of the Collateral through a foreclosure sale or
any other exercise of the Lender's rights and remedies under the Loan
Documents to use, sell or otherwise dispose of the Collateral bearing any
such trademark. Such right and license is granted free of charge, without
the requirement that any monetary payment whatsoever be made to the
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Borrower or any other Person by the Lender. Except as set forth on Schedule
11.6 attached hereto, the Borrower hereby represents, warrants, covenants and
agrees that it presently has, and shall continue to have, the right, without
the approval or consent of others, to grant the license set forth in this
Section 11.6.
ARTICLE 12 - MISCELLANEOUS
Section 12.1 Notices.
(a) Method of Communication. Except as specifically provided in
this Agreement or in any of the Loan Documents, all notices and the
communications hereunder and thereunder shall be in writing or by telephone
subsequently confirmed in writing. Notices in writing shall be delivered
personally or sent by overnight courier service, by certified or registered
mail, postage prepaid, or by facsimile transmission and shall be deemed
received, in the case of personal delivery, when delivered, in the case of
overnight courier service, on the next Business Day after delivery to such
service, in the case of mailing, on the third day after mailing (or, if such
day is a day on which deliveries of mail are not made, on the next succeeding
day on which deliveries of mail are made) and, in the case of facsimile
transmission, upon transmittal. A telephonic notice to the Lender as
understood by the Lender will be deemed to be the controlling and proper
notice in the event of a discrepancy with or failure to receive a confirming
written notice.
(b) Addresses for Notices. Notices to any party shall be sent
to it at the following addresses, or any other address of which all the other
parties are notified in writing.
If to the Borrower: Commissary Operations, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxx Xxxxxxxxx, Xx.
Facsimile No.: (000) 000-0000
with copies to: Shoney's, Inc.
0000 Xxx Xxxx Xxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: General Counsel
Facsimile No.: (000) 000-0000
King & Spalding
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxx Xxxxxxx
Facsimile No.: (000) 000-0000
If to the Lender: Bank of America, N.A.
c/o Bank of America Business Credit
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxx
Facsimile No.: (000) 000-0000
with a copy to: Xxxxxxxx Xxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Bank of America Plaza, Suite 5200
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx Xxxxxxxx, Esq.
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Facsimile No.: (000) 000-0000
(c) Lender's Office. The Lender hereby designates its office
located at 000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxx, Xxxxxxx 00000, or any
subsequent office which shall have been specified for such purpose by written
notice to the Borrower, as the office to which payments due are to be made
and at which Loans will be disbursed.
Section 12.2 Expenses. The Borrower agrees to pay or reimburse
on demand all reasonable costs and expenses incurred by the Lender,
including, without limitation, the reasonable fees and disbursements of
counsel, in connection with (a) the negotiation, preparation, execution,
delivery, administration, enforcement and termination of this Agreement and
each of the other Loan Documents, whenever the same shall be executed and
delivered, including, without limitation, (i) the reasonable out-of-pocket
costs and expenses incurred in connection with the administration and
interpretation of this Agreement and the other Loan Documents, (ii) the costs
and expenses of lien searches, and (iii) taxes, fees and other charges of
filing the Financing Statements and continuations and the reasonable costs
and expenses of taking other actions to perfect, protect, and continue the
Security Interest; (b) the preparation, execution and delivery of any waiver,
amendment, supplement or consent by the Lender relating to this Agreement or
any of the Loan Documents; (c) sums paid or obligations incurred in
connection with the payment of any amount or taking any action required of
the Borrower under the Loan Documents that the Borrower fails to pay or take;
(d) reasonable costs of inspections and verifications of the Collateral,
including, without limitation, a standard per diem fee charged by the Lender
of $750 per auditor for inspections of the Collateral and the Borrower's
operations and books and records, together with reasonable costs and expenses
for travel, lodging, and meals for such auditors and other agents of the
Lender; provided, that the Borrower shall be liable for the costs of (x) four
such audits/inspections per year, and (y) such additional audits/inspections
as the Lender may require following the occurrence and during the continuance
of any Event of Default; (e) costs and expenses of forwarding loan proceeds,
collecting checks and other items of payment, and establishing and
maintaining each Disbursement Account, Agency Account and Lockbox; (f)
reasonable costs and expenses of preserving and protecting the Collateral;
(g) after the occurrence and during the continuance of an Event of Default,
consulting with and obtaining opinions and appraisals from one or more
Persons, including personal property appraisers, accountants and lawyers,
concerning the value of any Collateral for the Secured Obligations or related
to the nature, scope or value of any right or remedy of the Lender hereunder
or under any of the Loan Documents, including any review of factual matters
in connection therewith, which expenses shall include the reasonable fees and
disbursements of such Persons; and (h) reasonable costs and expenses paid or
incurred to obtain payment of the Secured Obligations, enforce the Security
Interest, sell or otherwise realize upon the Collateral, and otherwise
enforce the provisions of the Loan Documents, or to prosecute or defend any
claim in any way arising out of, related to or connected with, this Agreement
or any of the Loan Documents, which expenses shall include the reasonable
fees and disbursements of counsel and of experts and other consultants
retained by the Lender.
The foregoing shall not be construed to limit any other provisions of the
Loan Documents regarding costs and expenses to be paid by the Borrower. The
Borrower hereby authorizes the Lender to debit the Borrower's loan accounts
(by increasing the principal amount of the Loan) in the amount of any such
costs and expenses owed by the Borrower when due.
Section 12.3 Stamp and Other Taxes. The Borrower will pay any
and all stamp, registration, recordation and similar taxes, fees or charges
and shall indemnify the Lender against any and all liabilities with respect
to or resulting from any delay in the payment or omission to pay any such
taxes, fees or charges, which may be payable or determined to be payable in
connection with the execution, delivery, performance or enforcement of this
Agreement and any of the Loan Documents or the perfection of any rights or
security interest thereunder.
Section 12.4 Setoff. In addition to any rights now or hereafter
granted under applicable law, and not by way of limitation of any such
rights, upon the occurrence and during the continuance of any Event of
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Default, the Lender and any participant with the Lender in the Loans are
hereby authorized by the Borrower at any time or from time to time, without
notice to the Borrower or to any other Person, any such notice being hereby
expressly waived, to set off and to appropriate and to apply any and all
deposits (general or special, time or demand, including, but not limited to,
indebtedness evidenced by certificates of deposit, whether matured or
unmatured) and any other indebtedness at any time held or owing by the Lender
or any participant to or for the credit or the account of the Borrower
against and on account of the Secured Obligations irrespective or whether or
not (a) the Lender shall have made any demand under this Agreement or any of
the Loan Documents, or (b) the Lender shall have declared any or all of the
Secured Obligations to be due and payable as permitted by Section 11.2 and
although such Secured Obligations shall be contingent or unmatured.
Section 12.5 Litigation. EACH OF THE LENDER AND THE BORROWER
HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY WAIVES TRIAL BY JURY IN ANY
ACTION OR PROCEEDING OF ANY KIND OR NATURE IN ANY COURT IN WHICH AN ACTION
MAY BE COMMENCED BY OR AGAINST THE BORROWER OR THE LENDER ARISING OUT OF THIS
AGREEMENT, THE COLLATERAL OR ANY ASSIGNMENT THEREOF OR BY REASON OF ANY OTHER
CAUSE OR DISPUTE WHATSOEVER BETWEEN THE BORROWER AND THE LENDER OF ANY KIND
OR NATURE. THE BORROWER AND THE LENDER HEREBY AGREE THAT THE FEDERAL COURT
OF THE NORTHERN DISTRICT OF GEORGIA OR, AT THE OPTION OF THE LENDER, ANY
COURT IN WHICH THE LENDER SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND
WHICH HAS SUBJECT MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY AND
WHICH SITS IN A JURISDICTION IN WHICH THE BORROWER TRANSACTS BUSINESS SHALL
HAVE NON-EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES
BETWEEN THE BORROWER AND THE LENDER, PERTAINING DIRECTLY OR INDIRECTLY TO
THIS AGREEMENT OR THE LOAN DOCUMENTS OR TO ANY MATTER ARISING THEREFROM. THE
BORROWER EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN
ANY ACTION OR PROCEEDING COMMENCED IN SUCH COURTS, HEREBY WAIVING PERSONAL
SERVICE OF THE SUMMONS AND COMPLAINT OR OTHER PROCESS OR PAPERS ISSUED
THEREIN AND AGREEING THAT SERVICE OF SUCH SUMMONS AND COMPLAINT OR OTHER
PROCESS OR PAPERS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO
THE BORROWER AT THE ADDRESS SET FORTH IN SECTION 12.1(b), WHICH SERVICE SHALL
BE DEEMED MADE UPON RECEIPT THEREOF. THE NON-EXCLUSIVE CHOICE OF FORUM SET
FORTH IN THIS SECTION SHALL NOT BE DEEMED TO PRECLUDE THE ENFORCEMENT OF ANY
JUDGMENT OBTAINED IN SUCH FORUM OR THE TAKING OF ANY ACTION UNDER THIS
AGREEMENT TO ENFORCE THE SAME IN ANY APPROPRIATE JURISDICTION.
Section 12.6 Waiver of Rights. THE BORROWER HEREBY KNOWINGLY,
INTENTIONALLY AND VOLUNTARILY WAIVES ALL RIGHTS WHICH THE BORROWER HAS UNDER
CHAPTER 14 OF TITLE 44 OF THE OFFICIAL CODE OF GEORGIA OR UNDER ANY SIMILAR
PROVISION OF APPLICABLE LAW TO NOTICE AND TO A JUDICIAL HEARING PRIOR TO THE
ISSUANCE OF A WRIT OF POSSESSION ENTITLING THE LENDER, ITS SUCCESSORS AND
ASSIGNS TO POSSESSION OF THE COLLATERAL UPON AN EVENT OF DEFAULT. WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING AND WITHOUT LIMITING ANY OTHER RIGHT
WHICH THE LENDER MAY HAVE, THE BORROWER CONSENTS THAT, IF THE LENDER FILES A
PETITION FOR AN IMMEDIATE WRIT OF POSSESSION IN COMPLIANCE WITH SECTIONS 44-
14-261 AND 44-14-262 OF THE OFFICIAL CODE OF GEORGIA OR UNDER ANY SIMILAR
PROVISION OF APPLICABLE LAW AND THIS WAIVER OR A COPY HEREOF IS ALLEGED IN
SUCH PETITION AND ATTACHED THERETO, THE COURT BEFORE WHICH SUCH PETITION IS
FILED MAY DISPENSE WITH ALL RIGHTS AND PROCEDURES HEREIN WAIVED AND MAY ISSUE
FORTHWITH AN IMMEDIATE WRIT OF POSSESSION IN ACCORDANCE WITH CHAPTER 14 OF
TITLE 44 OF THE OFFICIAL CODE OF GEORGIA OR IN ACCORDANCE WITH ANY SIMILAR
PROVISION OF APPLICABLE LAW, WITHOUT THE NECESSITY OF AN ACCOMPANYING BOND AS
OTHERWISE REQUIRED BY SECTION 00-00-000 OF THE OFFICIAL CODE OF GEORGIA OR IN
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ACCORDANCE WITH ANY SIMILAR PROVISION OF APPLICABLE LAW. THE BORROWER HEREBY
ACKNOWLEDGES THAT IT HAS READ AND FULLY UNDERSTANDS THE TERMS OF THIS WAIVER
AND THE EFFECT HEREOF.
Section 12.7 Reversal of Payments. To the extent the Borrower
makes a payment or payments to the Lender or the Lender receives any payment
or proceeds of the Collateral for the Borrower's benefit, which payment(s) or
proceeds or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside and/or required to be repaid to a
trustee, receiver or any other party under any bankruptcy law, state or
federal law, common law or equitable cause, then, the Lender shall have the
continuing and exclusive right to apply, reverse and reapply any and all
payments to any portion of the Secured Obligations, and, to the extent of
such payment or proceeds received, the Secured Obligations or part thereof
intended to be satisfied shall be revived and continued in full force and
effect, as if such payment or proceeds had not been received by the Lender.
Section 12.8 Injunctive Relief. The Borrower recognizes that, in
the event the Borrower fails to perform, observe or discharge any of its
obligations or liabilities under this Agreement, any remedy of law may prove
to be inadequate relief to the Lender; therefore, the Borrower agrees that
the Lender, at the Lender's option, shall be entitled to temporary and
permanent injunctive relief in any such case without the necessity of proving
actual damages.
Section 12.9 Accounting Matters. All financial and accounting
calculations, measurements and computations made for any purpose relating to
this Agreement, including, without limitation, all computations utilized by
the Borrower to determine whether it is in compliance with any covenant
contained herein, shall, unless there is an express written direction or
consent by the Lender to the contrary, be performed in accordance with GAAP,
as applicable.
Section 12.10 Assignment; Participation. All the provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns, except that the Borrower
may not assign or transfer any of its rights under this Agreement. The
Lender may assign to one or more Persons, or sell participations to one or
more Persons in, all or a portion of its rights and obligations hereunder and
under the Note and, in connection with any such assignment or sale of a
participation, may assign its rights and obligations under the Security
Documents. So long as there shall not then exist an Event of Default, any
such assignment (but no such sale of a participation) shall be subject to the
prior written consent of the Borrower, such consent not to be unreasonably
withheld, conditioned or delayed. The Lender may, in connection with any
assignment or proposed assignment or sale or proposed sale of a
participation, disclose to the assignee or proposed assignee or participant
or proposed participant any information relating to the Borrower furnished to
the Lender by or on behalf of the Borrower.
Section 12.11 Amendments. Any term, covenant, agreement or
condition of this Agreement or any of the other Loan Documents may be amended
or waived and any departure therefrom may be consented to if, but only if,
such amendment, waiver or consent is in writing signed by the Lender and, in
the case of an amendment, by the Borrower. Unless otherwise specified in
such waiver or consent, a waiver or consent given hereunder shall be
effective only in the specific instance and for the specific purpose for
which given.
Section 12.12 Performance of Borrower's Duties. The Borrower's
obligations under this Agreement and each of the Loan Documents shall be
performed by the Borrower at its sole cost and expense. If the Borrower
shall fail to do any act or thing which it has covenanted to do under this
Agreement or any of the Loan Documents, the Lender may (but shall not be
obligated to) do the same or cause it to be done either in the name of the
Lender or in the name and on behalf of the Borrower, and the Borrower hereby
irrevocably authorizes the Lender so to act.
Section 12.13 Indemnification. The Borrower agrees to reimburse
the Lender for all reasonable costs and expenses, including reasonable
counsel fees and disbursements, incurred and to indemnify and hold the
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Lender harmless from and against all losses suffered by the Lender, other
than losses resulting from the Lender's gross negligence or willful
misconduct, in connection with (a) the exercise by the Lender of any right or
remedy granted to it under this Agreement or any of the Loan Documents, (b)
any claim, and the prosecution or defense thereof, arising out of or in any
way connected with this Agreement or any of the Loan Documents, except in the
case of a dispute between the Borrower and the Lender in which the Borrower
prevails in a final unappealed or unappealable judgment, and (c) the
collection or enforcement of the Secured Obligations or any of them.
Section 12.14 All Powers Coupled with Interest. All powers of
attorney and other authorizations granted to the Lender and any Persons
designated by the Lender pursuant to any provisions of this Agreement or any
of the Loan Documents shall be deemed coupled with an interest and shall be
irrevocable so long as any of the Secured Obligations remain unpaid or
unsatisfied or the Facility has not been terminated.
Section 12.15 Survival. Notwithstanding any termination of this
Agreement, (a) until all Secured Obligations have been paid in full and the
Facility terminated, the Lender shall retain its Security Interest and shall
retain all rights under this Agreement and each of the Security Documents
with respect to the Collateral as fully as though this Agreement had not been
terminated, and (b) the indemnities to which the Lender is entitled under the
provisions of this Article 12 and under any other provision of this Agreement
and the Loan Documents shall continue in full force and effect and shall
protect the Lender against events arising after such termination as well as
before.
Section 12.16 Severability of Provisions. Any provision of this
Agreement or any other Loan Document which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective only to the
extent of such prohibition or unenforceability without invalidating the
remainder of such provision or the remaining provisions hereof or thereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 12.17 Governing Law. This Agreement and the Note shall be
construed in accordance with and governed by the law of the State of Georgia.
Section 12.18 Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an
original and shall be binding upon all parties, their successors and assigns,
and all of which taken together shall constitute one and the same agreement.
Section 12.19 Reproduction of Documents. This Agreement, each of
the Loan Documents and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by the Lender, and (c) financial statements,
certificates and other information previously or hereafter furnished to the
Lender, may be reproduced by the Lender by any photographic, photostatic,
microcard, microfilm, miniature photographic or other similar process, and
the Lender may destroy any original document so reproduced. Each party
hereto stipulates that, to the extent permitted by applicable laws any such
reproduction shall be as admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original shall be
in existence and whether or not such reproduction was made by such Lender in
the regular course of business), and any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
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Section 12.20 Funds Transfer Services.
(a) The Borrower acknowledges that the Lender has made available
to it a description of security procedures regarding funds transfers executed
by the Lender or an affiliate bank at the request of such Borrower (the
"Security Procedures"). The Borrower and the Lender agree that the Security
Procedures are commercially reasonable. The Borrower further acknowledges
that the full scope of the Security Procedures which the Lender or such
affiliate bank offers and strongly recommends for funds transfers is
available only if the Borrower communicates directly with the Lender or such
affiliate bank as applicable in accordance with said procedures. If the
Borrower attempts to communicate by any other method or otherwise not in
accordance with the Security Procedures, the Lender or such affiliate bank,
as applicable, shall not be required to execute such instructions, but if the
Lender or such affiliate bank, as applicable, does so, the Borrower will be
deemed to have refused the Security Procedures that the Lender or such
affiliate bank, as applicable, offers and strongly recommends, and the
Borrower will be bound by any funds transfer, whether or not authorized,
which is issued in the Borrower's name and accepted by the Lender or such
affiliate bank, as applicable, in good faith. The Lender or such affiliate
bank, as applicable, may modify the Security Procedures at such time or times
and in such manner as the Lender or such affiliate bank, as applicable, in
its sole discretion, deems appropriate to meet prevailing standards of good
banking practice. By continuing to use the Lender's or such affiliate
bank's, as applicable, wire transfer services after receipt of notice of any
modification of the Security Procedures, the Borrower agrees that the
Security Procedures, as modified, are likewise commercially reasonable. The
Borrower further agrees to establish and maintain procedures to safeguard the
Security Procedures and any information related thereto.
(b) The Lender or such affiliate bank, as applicable, will
generally use the Fedwire funds transfer system for domestic funds transfers,
and the funds transfer system operated by the Society for Worldwide
International Financial Telecommunication (SWIFT) for international funds
transfers. International funds transfers may also be initiated through the
Clearing House InterBank Payment System (CHIPs) or international cable.
However, the Lender or such affiliate bank, as applicable, may use any means
and routes that the Lender or such affiliate bank, as applicable, in its sole
discretion, may consider suitable for the transmission of funds. Each
payment order, or cancellation thereof, carried out through a funds transfer
system or a clearing house will be governed by all applicable funds transfer
system rules and clearing house rules and clearing arrangements, whether or
not the Lender or such affiliate bank, as applicable, is a member of the
system, clearing house or arrangement and the Borrower acknowledges that the
Lender's or such affiliate bank's, as applicable, right to reverse, adjust,
stop payment or delay posting of an executed payment order is subject to the
laws, regulations, rules, circulars and arrangements described herein.
Section 12.21 Consent to Advertising and Publicity. The Borrower
agrees that the Lender may issue and disseminate to the public information
describing in general the credit accommodation entered into pursuant to this
Agreement, which information may consist of the name and address of the
Borrower and the amount and a type of the credit facilities provided
hereunder.
Section 12.22 Final Agreement. This Agreement and the other Loan
Documents are intended by the parties hereto as the final, complete and
exclusive expression of the agreement among them with respect to the subject
matter hereof and thereof. This Agreement and the other Loan Documents
supersede any and all prior oral or written agreements between the parties
hereto relating to the subject matter hereof and thereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in Atlanta, Georgia by their duly authorized officers in several
counterparts all as of the day and year first written above.
BORROWER:
COMMISSARY OPERATIONS, INC.
[CORPORATE SEAL]
Attest: By: /s/ Xxxxx X. Xxxxxxxxx, Xx.
------------------------------
Name: Xxxxx X. Xxxxxxxxx, Xx.
By: /s/ Xxxxxx X. Xxxxxxxx Title: Vice President and CFO
-------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Assistant Secretary
LENDER:
BANK OF AMERICA, N.A.
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Title: SVP
EXHIBITS AND SCHEDULES OMITTED DUE TO IMMATERIALITY.
