Exhibit 10.1
EXECUTION COPY
$295,000,000
CREDIT AGREEMENT
dated as of June 28, 2002,
among
BUFFETS, INC.,
BUFFETS HOLDINGS, INC.,
THE LENDERS NAMED HEREIN
and
CREDIT SUISSE FIRST BOSTON,
as Administrative Agent
----------------------
CREDIT SUISSE FIRST BOSTON,
as Sole Bookrunner and Sole Lead Arranger
FLEET NATIONAL BANK,
as Syndication Agent
[CS&M Ref No. 5865-148]
TABLE OF CONTENTS
Page
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ARTICLE I
Definitions
SECTION 1.01. Defined Terms.................................................. 1
SECTION 1.02. Terms Generally................................................ 22
SECTION 1.03. Pro Forma Calculations......................................... 22
SECTION 1.04. Classification of Loans and Borrowings......................... 23
ARTICLE II
The Credits
SECTION 2.01. Commitments..................................................... 23
SECTION 2.02. Loans........................................................... 23
SECTION 2.03. Borrowing Procedure............................................. 25
SECTION 2.04. Evidence of Debt; Repayment of Loans............................ 26
SECTION 2.05. Fees............................................................ 26
SECTION 2.06. Interest on Loans............................................... 28
SECTION 2.07. Default Interest................................................ 28
SECTION 2.08. Alternate Rate of Interest...................................... 28
SECTION 2.09. Termination and Reduction of Commitments........................ 28
SECTION 2.10. Conversion and Continuation of Borrowings....................... 29
SECTION 2.11. Repayment of Term Borrowings.................................... 30
SECTION 2.12. Prepayment...................................................... 31
SECTION 2.13. Mandatory Prepayments........................................... 32
SECTION 2.14. Reserve Requirements; Change in Circumstances................... 33
SECTION 2.15. Change in Legality.............................................. 34
SECTION 2.16. Indemnity....................................................... 35
SECTION 2.17. Pro Rata Treatment.............................................. 35
SECTION 2.18. Sharing of Setoffs.............................................. 35
SECTION 2.19. Payments........................................................ 36
SECTION 2.20. Taxes........................................................... 36
SECTION 2.21. Assignment of Commitments Under Certain Circumstances; Duty to
Mitigate...................................................................... 38
SECTION 2.22. Swingline Loans................................................. 39
SECTION 2.23. Letters of Credit............................................... 40
SECTION 2.24. Increase in Term Loan Commitments............................... 44
ARTICLE III
Representations and Warranties
SECTION 3.01. Organization; Powers............................................ 45
SECTION 3.02. Authorization................................................... 46
SECTION 3.03. Enforceability.................................................. 46
SECTION 3.04. Governmental Approvals.......................................... 46
SECTION 3.05. Financial Statements............................................ 46
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SECTION 3.06. No Material Adverse Change...................................... 47
SECTION 3.07. Title to Properties; Possession Under Leases.................... 47
SECTION 3.08. Subsidiaries.................................................... 47
SECTION 3.09. Litigation; Compliance with Laws................................ 47
SECTION 3.10. Agreements...................................................... 48
SECTION 3.11. Federal Reserve Regulations..................................... 48
SECTION 3.12. Investment Company Act; Public Utility Holding Company Act...... 48
SECTION 3.13. Use of Proceeds................................................. 48
SECTION 3.14. Tax Returns..................................................... 48
SECTION 3.15. No Material Misstatements....................................... 48
SECTION 3.16. Employee Benefit Plans.......................................... 49
SECTION 3.17. Environmental Matters........................................... 49
SECTION 3.18. Insurance....................................................... 49
SECTION 3.19. Security Documents.............................................. 49
SECTION 3.20. Location of Real Property and Leased Premises................... 50
SECTION 3.21. Labor Matters................................................... 50
SECTION 3.22. Solvency........................................................ 50
SECTION 3.23. Senior Indebtedness............................................. 50
ARTICLE IV
Conditions of Lending
SECTION 4.01. All Credit Events............................................... 51
SECTION 4.02. First Credit Event.............................................. 51
ARTICLE V
Affirmative Covenants
SECTION 5.01. Existence; Businesses and Properties............................ 53
SECTION 5.02. Insurance....................................................... 54
SECTION 5.03. Obligations and Taxes........................................... 54
SECTION 5.04. Financial Statements, Reports, etc.............................. 55
SECTION 5.05. Litigation and Other Notices.................................... 56
SECTION 5.06. Information Regarding Collateral................................ 57
SECTION 5.07. Maintaining Records; Access to Properties and Inspections....... 57
SECTION 5.08. Use of Proceeds................................................. 57
SECTION 5.09. Further Assurances.............................................. 57
SECTION 5.10. Mortgaged Property.............................................. 58
SECTION 5.11. Interest Rate Protection........................................ 58
ARTICLE VI
Negative Covenants
SECTION 6.01. Indebtedness.................................................... 58
SECTION 6.02. Liens........................................................... 60
SECTION 6.03. Sale and Leaseback Transactions................................. 61
SECTION 6.04. Investments, Loans and Advances................................. 61
SECTION 6.05. Mergers, Consolidations, Sales of Assets and Acquisitions....... 62
SECTION 6.06. Restricted Payments; Restrictive Agreements..................... 64
SECTION 6.07. Transactions with Affiliates.................................... 65
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SECTION 6.08. Business of Holdings, Borrower and Subsidiaries................. 65
SECTION 6.09. Other Indebtedness and Agreements............................... 66
SECTION 6.10. Capital Expenditures............................................ 66
SECTION 6.11. Interest Coverage Ratio......................................... 67
SECTION 6.12. Fixed Charge Coverage Ratio..................................... 67
SECTION 6.13. Maximum Leverage Ratio.......................................... 67
SECTION 6.14. Fiscal Year..................................................... 67
ARTICLE VII
Events of Default
ARTICLE VIII
The Administrative Agent and the Collateral Agent
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices......................................................... 72
SECTION 9.02. Survival of Agreement........................................... 72
SECTION 9.03. Binding Effect.................................................. 72
SECTION 9.04. Successors and Assigns.......................................... 73
SECTION 9.05. Expenses; Indemnity............................................. 76
SECTION 9.06. Right of Setoff................................................. 77
SECTION 9.07. Applicable Law.................................................. 77
SECTION 9.08. Waivers; Amendment.............................................. 77
SECTION 9.09. Interest Rate Limitation........................................ 78
SECTION 9.10. Entire Agreement................................................ 79
SECTION 9.11. WAIVER OF JURY TRIAL............................................ 79
SECTION 9.12. Severability.................................................... 79
SECTION 9.13. Counterparts.................................................... 79
SECTION 9.14. Headings........................................................ 79
SECTION 9.15. Jurisdiction; Consent to Service of Process..................... 79
SECTION 9.16. Confidentiality................................................. 80
SECTION 9.17. Release of Collateral........................................... 80
Schedule 1.01(a) Existing Letters of Credit
Schedule 1.01(b) Sale-Leaseback B
Schedule 1.01(c) Subsidiary Guarantors
Schedule 2.01 Lenders and Commitments
Schedule 3.08 Subsidiaries
Schedule 3.09 Litigation
Schedule 3.17 Environmental Matters
Schedule 3.18 Insurance
Schedule 3.19(a) UCC Filing Offices
Schedule 3.20(a) Owned Real Property
Schedule 3.20(b) Leased Real Property
Schedule 5.10 Mortgaged Property
Schedule 6.01 Existing Indebtedness
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Schedule 6.02 Existing Liens
Schedule 6.04 Existing Investments
Exhibit A Form of Administrative Questionnaire
Exhibit B Form of Assignment and Acceptance
Exhibit C Form of Borrowing Request
Exhibit D Form of Guarantee and Collateral Agreement
Exhibit E Form of Perfection Certificate
Exhibit F-1 Form of Opinion of Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
Exhibit F-2 Form of Opinion of Faegre & Xxxxxx
Exhibit G Form of Solvency Certificate
iv
CREDIT AGREEMENT dated as of June
28, 2002, among BUFFETS, INC., a Minnesota
corporation (the "Borrower"), BUFFETS
HOLDINGS, INC., a Delaware corporation
("Holdings"), the Lenders (as defined in
Article I) and CREDIT SUISSE FIRST BOSTON,
as administrative agent (in such capacity,
the "Administrative Agent") and as
collateral agent (in such capacity, the
"Collateral Agent") for the Lenders.
The parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this Agreement, the following
terms shall have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
"Adjusted LIBO Rate" shall mean, with respect to any Eurodollar
Borrowing for any Interest Period, an interest rate per annum equal to the
product of (a) the LIBO Rate in effect for such Interest Period and (b)
Statutory Reserves.
"Administrative Agent Fees" shall have the meaning assigned to such
term in Section 2.05(b).
"Administrative Questionnaire" shall mean an Administrative
Questionnaire in the form of Exhibit A, or such other form as may be supplied
from time to time by the Administrative Agent.
"Affiliate" shall mean, when used with respect to a specified person,
another person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the person
specified; provided, however, that, for purposes of Section 6.07, the term
"Affiliate" shall also include any person that directly or indirectly owns 10%
or more of any class of Equity Interests of the person specified or that is an
officer or director of the person specified.
"Aggregate L/C Exposure" shall mean, at any time, the sum of the
Revolving Facility L/C Exposure and the Letter of Credit Facility L/C Exposure
at such time.
"Aggregate Revolving Credit Exposure" shall mean the aggregate amount
of the Lenders' Revolving Credit Exposures.
"Alternate Base Rate" shall mean, for any day, a rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greater of
(a) the Prime Rate in effect on such day and (b) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1%. If for any reason the Administrative
Agent shall have determined (which determination shall
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be conclusive absent manifest error) that it is unable to ascertain the Federal
Funds Effective Rate for any reason, including the inability or failure of the
Administrative Agent to obtain sufficient quotations in accordance with the
terms of the definition thereof, the Alternate Base Rate shall be determined
without regard to clause (b) of the preceding sentence until the circumstances
giving rise to such inability no longer exist. Any change in the Alternate Base
Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall
be effective on the effective date of such change in the Prime Rate or the
Federal Funds Effective Rate, respectively.
"Applicable Percentage" shall mean, for any day, with respect to any
Eurodollar Loan or ABR Loan, or with respect to the Commitment Fees, as the case
may be, the applicable percentage set forth below under the caption "Eurodollar
Spread - Term Loans", "ABR Spread - Term Loans", "Eurodollar Spread - Revolving
Loans", "ABR Spread - Revolving Loans" or "Commitment Fee Percentage", as the
case may be, based upon the Leverage Ratio as of the relevant date of
determination:
EURODOLLAR ABR EURODOLLAR ABR
SPREAD - SPREAD - SPREAD - SPREAD - COMMITMENT
LEVERAGE TERM TERM REVOLVING REVOLVING FEE
RATIO LOANS LOANS LOANS LOANS PERCENTAGE
----- ----- ----- ----- ----- ----------
Category 1
Greater than 3.50% 2.50% 3.25% 2.25% 0.50%
3.25 to 1.00
-------------------------------------------------------------------------------------
Category 2
Greater than
2.75 to 1.00,
but less than 3.50% 2.50% 3.00% 2.00% 0.50%
or equal to
3.25 to 1.00
-------------------------------------------------------------------------------------
Category 3 3.50% 2.50% 2.75% 1.75% 0.50%
Less than or
equal to 2.75
to 1.00
Each change in the Applicable Percentage resulting from a change in the
Leverage Ratio shall be effective with respect to all Loans, Commitments and
Letters of Credit outstanding on and after the date of delivery to the
Administrative Agent of the financial statements and certificates required by
Section 5.04(a) or (b) and Section 5.04(d), respectively, indicating such change
until the date immediately preceding the next date of delivery of such financial
statements and certificates indicating another such change. Notwithstanding the
foregoing, until the Borrower shall have delivered the financial statements and
certificates required by Section 5.04(b) and Section 5.04(d), respectively, for
the period ended on or around December 31, 2002, the Leverage Ratio shall be
deemed to be in Category 1 for purposes of determining the Applicable
Percentage. In addition, (a) at any time during which the Borrower has failed to
deliver the financial statements and certificates required by Section 5.04(a) or
(b) and Section 5.04(d), respectively, or (b) at any time after the occurrence
and during the continuance of an Event of Default, the Leverage Ratio shall be
deemed to be in Category 1 for purposes of determining the Applicable
Percentage.
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"Asset Sale" shall mean the sale, transfer or other disposition (by way
of merger, casualty, condemnation or otherwise) by Holdings, the Borrower or any
of the Subsidiaries to any person other than the Borrower or any Subsidiary
Guarantor of (a) any Equity Interests of any of the Subsidiaries (other than
directors' qualifying shares) or (b) any other assets of Holdings, the Borrower
or any of the Subsidiaries (other than (i) inventory, damaged, obsolete, surplus
or worn out assets, scrap and Permitted Investments, in each case disposed of in
the ordinary course of business, or (ii) dispositions between or among Foreign
Subsidiaries), provided that any asset sale or series of related asset sales
described in clause (b) above having a value not in excess of $500,000 shall be
deemed not to be an "Asset Sale" for purposes of this Agreement.
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 9.04), and accepted by the Administrative Agent,
in the form of Exhibit B or such other form as shall be approved by the
Administrative Agent.
"Board" shall mean the Board of Governors of the Federal Reserve System
of the United States of America.
"Borrowing" shall mean (a) Loans of the same Class and Type made,
converted or continued on the same date and, in the case of Eurodollar Loans, as
to which a single Interest Period is in effect, or (b) a Swingline Loan.
"Borrowing Request" shall mean a request by the Borrower in accordance
with the terms of Section 2.03 and substantially in the form of Exhibit C, or
such other form as shall be approved by the Administrative Agent.
"Business Day" shall mean any day other than a Saturday, Sunday or day
on which banks in New York City are authorized or required by law to close;
provided, however, that when used in connection with a Eurodollar Loan, the term
"Business Day" shall also exclude any day on which banks are not open for
dealings in dollar deposits in the London interbank market.
"Capital Expenditures" shall mean, for any period and with respect to
any person, all expenditures for the acquisition or leasing of fixed or capital
assets or additions to equipment during such period by such person that would be
classified as capital expenditures in accordance with GAAP, but excluding any
such expenditure made (a) to restore, replace or rebuild property to the
condition of such property immediately prior to any damage, loss, destruction or
condemnation of such property, to the extent such expenditure is made with
insurance proceeds, condemnation awards or indemnification or damage recovery
proceeds relating to any such damage, loss, destruction or condemnation, (b)
with proceeds from the sale or exchange of property to the extent utilized to
purchase functionally equivalent property or equipment, (c) as the purchase
price of any Permitted Acquisition or (d) with the proceeds of a substantially
contemporaneous equity contribution from Holdings.
"Capital Lease Obligations" of any person shall mean the obligations of
such person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
A "Change in Control" shall be deemed to have occurred if (a) prior to
a Qualified Initial Public Equity Offering, the Permitted Investors shall cease
to own, directly or indirectly, beneficially and of record, Equity Interests in
Holdings representing at least 51%
4
of the aggregate ordinary voting power represented by the issued and outstanding
Equity Interests of Holdings; (b) after a Qualified Initial Public Equity
Offering, the Permitted Investors shall cease to own, directly or indirectly,
beneficially and of record, Equity Interests in Holdings representing at least
35% of the aggregate ordinary voting power represented by the issued and
outstanding Equity Interests of Holdings; (c) after a Qualified Initial Public
Equity Offering, the acquisition of ownership, directly or indirectly,
beneficially or of record, by any person or group (within the meaning of Rule
13d-5 of the Securities Exchange Act of 1934 as in effect on the date hereof)
other than the Permitted Investors, of Equity Interests representing a greater
percentage of the aggregate ordinary voting power represented by the issued and
outstanding Equity Interests in Holdings then held, directly or indirectly,
beneficially and of record, by the Permitted Investors; (d) a majority of the
seats (other than vacant seats) on the board of directors of Holdings shall at
any time be occupied by persons who were neither (i) nominated by the board of
directors of Holdings or any Permitted Investor nor (ii) appointed by directors
so nominated; (e) unless Holdings shall have merged with the Borrower in
accordance with Section 6.05, Holdings shall cease to own, directly or
indirectly, beneficially and of record, 100% of the outstanding Equity Interests
of the Borrower; or (f) any change in control (or similar event, however
denominated) with respect to Holdings or the Borrower shall occur under and as
defined in any indenture or agreement in respect of Material Indebtedness to
which Holdings or the Borrower is a party.
"Change in Law" shall mean (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender or
the Issuing Bank (or, for purposes of Section 2.14, by any lending office of
such Lender or by such Lender's or Issuing Bank's holding company, if any) with
any request, guideline or directive (whether or not having the force of law) of
any Governmental Authority made or issued after the date of this Agreement.
"Class", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans,
Letter of Credit Facility Loans, Term Loans, Other Term Loans or Swingline Loans
and, when used in reference to any Commitment, refers to whether such Commitment
is a Revolving Credit Commitment, Letter of Credit Facility Commitment, Term
Loan Commitment, Incremental Term Loan Commitment in respect of Other Term Loans
or Swingline Commitment.
"Closing Date" shall mean June 28, 2002.
"Closing Date Dividend" shall mean Holdings' repurchase of its
preferred stock and/or payment of dividends to certain holders of its Equity
Interests, in each case on the Closing Date, in an aggregate amount of up to
$150,000,000.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" shall mean all the "Collateral" as defined in any Security
Document and shall also include any Mortgaged Properties.
"Commitment" shall mean, with respect to any Lender, such Lender's
Revolving Credit Commitment, Letter of Credit Facility Commitment, Term Loan
Commitment, Swingline Commitment or Incremental Term Loan Commitment.
"Commitment Fee" shall have the meaning assigned to such term in
Section 2.05(a).
"Confidential Information Memorandum" shall mean the Confidential
Information Memorandum of the Borrower dated June 2002.
5
"Consolidated EBITDA", of any person for any period, shall mean
Consolidated Net Income of such person and its subsidiaries for such period
plus, without duplication and to the extent reflected as a charge in the
statement of such Consolidated Net Income for such period, (a) the sum of (i)
income tax expense, (ii) Consolidated Interest Expense of such person and its
subsidiaries, amortization or write-off of debt discount and debt issuance costs
and commissions, discounts and other fees and charges associated with
Indebtedness (including, in the case of the Borrower, the Loans and Letters of
Credit), (iii) depreciation and amortization expense, (iv) amortization of
intangibles (including goodwill) and organization costs, (v) any extraordinary,
unusual or non-recurring expenses or losses determined in accordance with GAAP
(including, whether or not otherwise includable as a separate item in the
statement of such Consolidated Net Income for such period, losses on sales of
assets outside of the ordinary course of business), (vi) any other non-cash
charges in an amount not to exceed $5,000,000 for any fiscal year and (vii)
management fees, and minus, without duplication, to the extent included in the
statement of such Consolidated Net Income for such period, (b) the sum of (i)
any extraordinary, unusual or non-recurring income or gains (including, whether
or not otherwise includable as a separate item in the statement of such
Consolidated Net Income for such period, gains on the sales of assets outside of
the ordinary course of business) and (ii) any other non-cash income, all as
determined on a consolidated basis.
"Consolidated Fixed Charges" shall mean, for any period, without
duplication the sum of (a) Consolidated Interest Expense of the Borrower and the
Subsidiaries for such period, (b) the aggregate amount of scheduled principal
payments during such period (whether or not made) in respect of long term
Indebtedness (including Capital Lease Obligations and Synthetic Lease
Obligations) of the Borrower and the Subsidiaries (other than payments made by
the Borrower or any Subsidiary to the Borrower or a Subsidiary), (c) the
aggregate Tax Payments paid in cash by the Borrower and the Subsidiaries for
such period (excluding Tax Payments on extraordinary items), (d) Rent payments
made or required to be made by the Borrower and the Subsidiaries during such
period and (e) the aggregate amount of all Restricted Payments made in cash
during such period under Section 6.06(a)(ii)(w), (y) or (z).
"Consolidated Interest Expense" shall mean, for any person for any
period, the total cash interest expense (including imputed interest expense in
respect of Capital Lease Obligations and Synthetic Lease Obligations) of such
person and its subsidiaries for such period (including amortization of deferred
financing fees, premiums or interest rate protection agreements and original
issue discounts), in each case determined on a consolidated basis in accordance
with GAAP. For purposes of the foregoing, interest expense of any person shall
be determined after giving effect to any net payments made or received by such
person with respect to interest rate Hedging Agreements.
"Consolidated Net Income" shall mean, for any person for any period,
the net income or loss before cumulative effect in change of accounting of such
person and its subsidiaries for such period determined on a consolidated basis
in accordance with GAAP; provided that there shall be excluded (a) the income of
any subsidiary of such person to the extent that the declaration or payment of
dividends or similar distributions by such subsidiary of that income is not at
the time permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, statute, rule or governmental regulation
applicable to such subsidiary, (b) the income or loss of any person accrued
prior to the date it becomes a subsidiary of such person or is merged into or
consolidated with such person or any subsidiary thereof or the date that such
person's assets are acquired by such person or any subsidiary thereof and (c)
the income or loss of any person (other than a Subsidiary Guarantor) in which
any other person (other than the Borrower, a Subsidiary Guarantor, a wholly
owned Subsidiary or any director holding qualifying shares in accordance with
applicable law) has a joint interest, except to the extent of the amount of
dividends or other
6
distributions actually paid to the Borrower or a wholly owned Subsidiary by such
person during such period.
"Control" shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
person, whether through the ownership of voting securities, by contract or
otherwise, and the terms "Controlling" and "Controlled" shall have meanings
correlative thereto.
"Credit Event" shall have the meaning assigned to such term in Section
4.01.
"Current Assets" shall mean, at any time, the consolidated current
assets (other than cash and Permitted Investments) of the Borrower and the
Subsidiaries in accordance with GAAP.
"Current Liabilities" shall mean, at any time, the consolidated current
liabilities of the Borrower and the Subsidiaries at such time in accordance with
GAAP, but excluding, without duplication, (a) the current portion of any
long-term Indebtedness and (b) outstanding Revolving Loans and Swingline Loans.
"Default" shall mean any event or condition which upon notice, lapse of
time or both would constitute an Event of Default.
"dollars" or "$" shall mean lawful money of the United States of
America.
"Domestic Subsidiaries" shall mean all Subsidiaries incorporated or
organized under the laws of the United States of America, any State thereof or
the District of Columbia.
"Environmental Laws" shall mean all former, current and future Federal,
state, local and foreign laws (including common law), treaties, regulations,
rules, ordinances, codes, decrees, judgments, directives, orders (including
consent orders), and agreements in each case, relating to protection of the
environment, natural resources, human health and safety or the presence, Release
of, or exposure to, Hazardous Materials, or the generation, manufacture,
processing, distribution, use, treatment, storage, transport, recycling or
handling of, or the arrangement for such activities with respect to, Hazardous
Materials.
"Environmental Liability" shall mean all liabilities, obligations,
damages, losses, claims, actions, suits, judgments, orders, fines, penalties,
fees, expenses and costs (including administrative oversight costs, natural
resource damages and remediation costs), whether contingent or otherwise,
arising out of or relating to (a) compliance or non-compliance with any
Environmental Law, (b) the generation, use, handling, transportation, storage,
treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the Release of any Hazardous Materials or (e) any contract,
agreement or other consensual arrangement pursuant to which liability is assumed
or imposed with respect to any of the foregoing.
"Equity Interests" shall mean shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity interests in any person, or any obligations
convertible into or exchangeable for, or giving any person a right, option or
warrant to acquire such equity interests or such convertible or exchangeable
obligations.
"Equity Issuance" shall mean any issuance or sale by Holdings, the
Borrower or any of their respective subsidiaries of any Equity Interests of
Holdings, the Borrower or any such subsidiary, as applicable, or any obligations
convertible into or exchangeable for, or giving any person a right, option or
warrant to acquire such Equity Interests or such convertible or
7
exchangeable obligations, except in each case for (a) any issuance or sale to
Holdings, the Borrower or any Subsidiary, (b) any issuance or sale of Equity
Interests or such convertible or exchangeable obligations of Holdings to one or
more Permitted Investors, (c) any issuance of directors' qualifying shares and
(d) sales or issuances of common stock of Holdings to management or employees of
Holdings, the Borrower or any Subsidiary under any employee stock option or
stock purchase plan or employee benefit plan in existence from time to time.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as the same may be amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code, or solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" shall mean (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder, with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan or the withdrawal or partial withdrawal of the Borrower
or any of its ERISA Affiliates from any Plan or Multiemployer Plan; (e) the
receipt by the Borrower or any of its ERISA Affiliates from the PBGC or a plan
administrator of any notice relating to the intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the adoption of any
amendment to a Plan that would require the provision of security pursuant to
Section 401(a)(29) of the Code or Section 307 of ERISA; (g) the receipt by the
Borrower or any of its ERISA Affiliates of any notice, or the receipt by any
Multiemployer Plan from the Borrower or any of its ERISA Affiliates of any
notice, concerning the imposition of Withdrawal Liability or a determination
that a Multiemployer Plan is, or is expected to be, insolvent or in
reorganization, within the meaning of Title IV of ERISA; or (h) the occurrence
of a "prohibited transaction" with respect to which Holdings, the Borrower or
any of the Subsidiaries is a "disqualified person" (within the meaning of
Section 4975 of the Code) or with respect to which Holdings, the Borrower or any
such Subsidiary could otherwise be liable.
"Eurodollar", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" shall have the meaning assigned to such term in
Article VII.
"Excess Cash Flow" shall mean, for any fiscal year of the Borrower, the
excess of (a) the sum, without duplication, of (i) Consolidated EBITDA of the
Borrower for such fiscal year and (ii) reductions to noncash working capital of
the Borrower and the Subsidiaries for such fiscal year (i.e., the decrease, if
any, in Current Assets minus Current Liabilities from the beginning to the end
of such fiscal year) over (b) the sum, without duplication, of (i) the amount of
any Tax Payments payable with respect to such fiscal year, (ii) cash interest
paid (net of cash interest received) by the Borrower and the Subsidiaries,
during such fiscal year, (iii) the aggregate amount paid in cash in respect of
Capital Expenditures, Permitted Acquisitions and the acquisition of Equity
Interests of Tahoe Joe's during such fiscal year made in accordance with
Sections 6.10, 6.04(f) and 6.04(g), respectively, except to the extent financed
with the proceeds of Indebtedness, equity, casualty or condemnation proceeds,
(iv)
8
permanent repayments of Indebtedness (other than mandatory prepayments of Loans
under Section 2.13 and voluntary prepayments of Term Loans pursuant to Section
2.12(b)) made by the Borrower and the Subsidiaries during such fiscal year, but
only to the extent that such prepayments by their terms cannot be reborrowed or
redrawn and do not occur in connection with a refinancing of all or any portion
of such Indebtedness, and (v) additions to noncash working capital for such
fiscal year (i.e., the increase, if any, in Current Assets minus Current
Liabilities from the beginning to the end of such fiscal year).
"Excluded Taxes" shall mean, with respect to the Administrative Agent,
any Lender, the Issuing Bank or any other recipient of any payment to be made by
or on account of any obligation of the Borrower hereunder, (a) income or
franchise taxes imposed on (or measured by) its net income by the United States
of America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which the Borrower is located and (c) in the case
of a Foreign Lender (other than an assignee pursuant to a request by the
Borrower under Section 2.21(a)), any withholding tax that is imposed on amounts
payable to such Foreign Lender at the time such Foreign Lender becomes a party
to this Agreement (or designates a new lending office) or is attributable to
such Foreign Lender's failure to comply with Section 2.20(e), except to the
extent that such Foreign Lender (or its assignor, if any) was entitled, at the
time of designation of a new lending office (or assignment), to receive
additional amounts from the Borrower with respect to such withholding tax
pursuant to Section 2.20(a).
"Existing Credit Agreement" shall mean the Credit Agreement dated as of
September 29, 2000, as amended, among Holdings, the Borrower, the lenders from
time to time party thereto, Xxxxxx Brothers Inc. and FleetBoston Xxxxxxxxx
Xxxxxxxx Inc., as co-lead arrangers and joint book-running managers, Xxxxxx
Commercial Paper Inc., as administrative agent, Fleet National Bank, as
syndication agent, and First Union National Bank, as documentation agent.
"Existing Holdings Notes" shall mean Holdings' 16% Senior Notes due
2008, issued pursuant to the Note Purchase Agreements dated as of September 29,
2000, between Holdings and the purchasers party thereto.
"Existing Letters of Credit" shall mean each Letter of Credit
previously issued for the account of the Borrower that is (a) outstanding on the
Closing Date and (b) listed on Schedule 1.01(a).
"Existing Notes Redemption" shall mean the redemption, on the Closing
Date, by Holdings and the Borrower of all the outstanding Existing Holdings
Notes and Existing Subordinated Notes, respectively, and preferred warrants held
by the holders of the Existing Holdings Notes and Existing Subordinated Notes
pursuant to the Existing Notes Redemption Agreement.
"Existing Notes Redemption Agreement" shall mean the Redemption Payment
Agreement dated as of May 29, 2002, among the Borrower, Holdings and the holders
of the Existing Holdings Notes and the Existing Subordinated Notes.
"Existing Subordinated Notes" shall mean the Borrower's 14% Senior
Subordinated Notes due 2008, issued pursuant to the Note Purchase Agreements
dated as of September 29, 2000, between the Borrower and the purchasers party
thereto.
"Federal Funds Effective Rate" shall mean, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal
9
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers, as published on the next succeeding Business Day by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average (rounded upwards, if necessary, to the
next 1/100 of 1%) of the quotations for the day for such transactions received
by the Administrative Agent from three Federal funds brokers of recognized
standing selected by it.
"Fee Letter" shall mean the Fee Letter dated as of May 28, 2002 between
the Borrower and the Administrative Agent.
"Fees" shall mean the Commitment Fees, the Administrative Agent Fees,
the L/C Participation Fees, the Letter of Credit Facility Commitment Fees and
the Issuing Bank Fees.
"Financial Officer" of any person shall mean the chief financial
officer, principal accounting officer, Treasurer or Controller of such person.
"Fixed Charge Coverage Ratio" shall mean, for any period, the ratio of
(a) Consolidated EBITDA of the Borrower for such period plus Rent payments made
or required to be made by the Borrower and the Subsidiaries during such period
minus Maintenance Capital Expenditures of the Borrower and the Subsidiaries
during such period to (b) Consolidated Fixed Charges of the Borrower for such
period.
"Foreign Lender" shall mean any Lender that is organized under the laws
of a jurisdiction other than that in which the Borrower is located. For purposes
of this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"Foreign Subsidiary" shall mean any Subsidiary that is not a Domestic
Subsidiary.
"Funded Debt" shall mean, at any time, the Total Debt at such time less
cash and Permitted Investments of the Borrower and the Domestic Subsidiaries at
such time in an aggregate amount not to exceed $30,000,000.
"Funded Senior Debt" shall mean, at any time, the Funded Debt at such
time less, to the extent included therein, the amount of any Indebtedness that
is subordinated to the Obligations pursuant to subordination provisions no less
favorable to the Lenders than those contained in the New Subordinated Note
Indenture.
"GAAP" shall mean United States generally accepted accounting
principles applied on a consistent basis.
"Governmental Authority" shall mean any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or regulatory
body.
"Granting Lender" shall have the meaning assigned to such term in
Section 9.04(i).
"Guarantee" of or by any person shall mean any obligation, contingent
or otherwise, of such person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other person (the "primary obligor") in any
manner, whether directly or indirectly, and including any obligation of such
person, direct or indirect, (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or to purchase (or to advance
or supply funds for the purchase of) any security for the payment of such
Indebtedness, (b) to purchase or lease property, securities or services for the
purpose of assuring the owner of such Indebtedness of the payment of such
Indebtedness or (c) to maintain working capital, equity capital or any other
financial statement condition or
10
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness; provided, however, that the term "Guarantee" shall not include
endorsements for collection or deposit in the ordinary course of business.
"Guarantee and Collateral Agreement" shall mean the Guarantee and
Collateral Agreement, substantially in the form of Exhibit D, among the
Borrower, Holdings, the Subsidiaries party thereto and the Collateral Agent.
"Guarantors" shall mean Holdings and the Subsidiary Guarantors.
"Hazardous Materials" shall mean (a) any petroleum products or
byproducts and all other hydrocarbons, coal ash, radon gas, asbestos, urea
formaldehyde foam insulation, polychlorinated biphenyls, chlorofluorocarbons and
all other ozone-depleting substances and (b) any chemical, material, substance
or waste that is prohibited, limited or regulated by or pursuant to any
Environmental Law.
"Hedging Agreement" shall mean any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement.
"Inactive Subsidiary" shall mean any Subsidiary of the Borrower that
(a) does not conduct any business operations, (b) has assets with a total book
value not in excess of $10,000 and (c) does not have any Indebtedness
outstanding.
"Incremental Debt Amount" shall mean, at any time, the excess, if any,
of (a) $25,000,000 over (b) an amount equal to (i) the aggregate amount of all
Incremental Term Loan Commitments established prior to such time pursuant to
Section 2.24 plus (ii) the aggregate principal amount of New Subordinated Notes
issued by the Borrower pursuant to the New Subordinated Note Indenture after the
Closing Date in excess of the initial aggregate principal amount of $230,000,000
plus (iii) the aggregate principal amount of all other Indebtedness incurred
under Section 6.01(k).
"Incremental Term Lender" shall mean a Lender with an Incremental Term
Loan Commitment or an outstanding Incremental Term Loan.
"Incremental Term Loan Assumption Agreement" shall mean an Incremental
Term Loan Assumption Agreement in form and substance reasonably satisfactory to
the Administrative Agent, among the Borrower, the Administrative Agent and one
or more Incremental Term Lenders.
"Incremental Term Loan Commitment" shall mean the commitment of any
Lender, established pursuant to Section 2.24, to make Incremental Term Loans to
the Borrower.
"Incremental Term Loan Maturity Date" shall mean the final maturity
date of any Incremental Term Loan, as set forth in the applicable Incremental
Term Loan Assumption Agreement.
"Incremental Term Loan Repayment Dates" shall mean the dates scheduled
for the repayment of principal of any Incremental Term Loan, as set forth in the
applicable Incremental Term Loan Assumption Agreement.
"Incremental Term Loans" shall mean term loans made by one or more
Lenders to the Borrower pursuant to clause (b) of Section 2.01. Incremental Term
Loans may be made in the form of additional Term Loans or, to the extent
permitted by Section 2.24 and
11
provided for in the relevant Incremental Term Loan Assumption Agreement, Other
Term Loans.
"Indebtedness" of any person shall mean, without duplication, (a) all
obligations of such person for borrowed money, (b) all obligations of such
person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such person under conditional sale or other title retention
agreements relating to property or assets purchased by such person, (d) all
obligations of such person issued or assumed as the deferred purchase price of
property or services (excluding trade accounts payable and accrued obligations
incurred in the ordinary course of business), (e) all Indebtedness of others
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such person, whether or not the obligations secured thereby have
been assumed, (f) all Guarantees by such person of Indebtedness of others, (g)
all Capital Lease Obligations and Synthetic Lease Obligations of such person,
(h) all obligations of such person as an account party in respect of letters of
credit and (i) all obligations of such person as an account party in respect of
bankers' acceptances. The Indebtedness of any person shall include the
Indebtedness of any partnership in which such person is a general partner,
except to the extent that, by its terms, such Indebtedness is nonrecourse to
such person.
"Indemnified Taxes" shall mean Taxes other than Excluded Taxes.
"Interest Coverage Ratio" shall mean, for any period, the ratio of (a)
Consolidated EBITDA of the Borrower for such period to (b) Consolidated Interest
Expense of the Borrower for such period.
"Interest Payment Date" shall mean (a) with respect to any ABR Loan,
the last Business Day of each March, June, September and December and (b) with
respect to any Eurodollar Loan, the last day of the Interest Period applicable
to the Borrowing of which such Loan is a part and, in the case of a Eurodollar
Borrowing with an Interest Period of more than three months' duration, each day
that would have been an Interest Payment Date had successive Interest Periods of
three months' duration been applicable to such Borrowing, and, in addition, the
date of any prepayment of a Eurodollar Borrowing or conversion of a Eurodollar
Borrowing to an ABR Borrowing.
"Interest Period" shall mean, with respect to any Eurodollar Borrowing,
the period commencing on the date of such Borrowing and ending on the
numerically corresponding day (or, if there is no numerically corresponding day,
on the last day) in the calendar month that is 1, 2, 3 or 6 months thereafter,
as the Borrower may elect; provided, however, that if any Interest Period would
end on a day other than a Business Day, such Interest Period shall be extended
to the succeeding Business Day unless, such next succeeding Business Day would
fall in the next calendar month, in which case such Interest Period shall end on
the preceding Business Day. Interest shall accrue from and including the first
day of an Interest Period to but excluding the last day of such Interest Period.
For purposes hereof, the date of a Borrowing initially shall be the date on
which such Borrowing is made and thereafter shall be the effective date of the
most recent conversion or continuation of such Borrowing.
"Issuing Bank" shall mean, as the context may require, (a) Fleet
National Bank, in its capacity as the issuer of Letters of Credit hereunder, (b)
with respect to each Existing Letter of Credit, the Lender that issued such
Letter of Credit, and (c) any other Lender that may become an Issuing Bank
pursuant to Section 2.23(i) or 2.23(k), with respect to Letters of Credit issued
by such Lender. The Issuing Bank may, in its discretion, arrange for one or more
Letters of Credit to be issued by Affiliates of the Issuing Bank, in which case
the term "Issuing Bank" shall include any such Affiliate with respect to Letters
of Credit issued by such Affiliate.
12
"Issuing Bank Fees" shall have the meaning assigned to such term in
Section 2.05(c).
"L/C Commitment" shall mean the commitment of the Issuing Bank to issue
Letters of Credit pursuant to Section 2.23.
"L/C Disbursement" shall mean a payment or disbursement made by the
Issuing Bank pursuant to a Letter of Credit.
"L/C Participation Fee" shall have the meaning assigned to such term in
Section 2.05(c).
"Lenders" shall mean (a) the persons listed on Schedule 2.01 (other
than any such person that has ceased to be a party hereto pursuant to an
Assignment and Acceptance) and (b) any person that has become a party hereto
pursuant to an Assignment and Acceptance or an Incremental Term Loan Assumption
Agreement. Unless the context clearly indicates otherwise, the term "Lenders"
shall include the Swingline Lender.
"Letter of Credit" shall mean a Revolving Facility Letter of Credit or
a Letter of Credit Facility Letter of Credit.
"Letter of Credit Facility Commitment" shall mean, with respect to each
Lender, the commitment of such Lender to acquire participations in Letter of
Credit Facility Letters of Credit pursuant to Section 2.23(d), as set forth on
Schedule 2.01, or in the Assignment and Acceptance pursuant to which such Lender
assumed its Letter of Credit Facility Commitment, as applicable, as the same may
be (a) reduced from time to time pursuant to Section 2.09 and (b) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 9.04. The initial amount of the Letter of Credit Facility
Commitment is $20,000,000.
"Letter of Credit Facility Commitment Fee" shall have the meaning
assigned to such term in Section 2.05(c).
"Letter of Credit Facility L/C Exposure" shall mean at any time the sum
of (a) the aggregate undrawn amount of all outstanding Letter of Credit Facility
Letters of Credit at such time and (b) the aggregate principal amount of all L/C
Disbursements in respect of Letter of Credit Facility Letters of Credit that
have not yet been reimbursed at such time. The Letter of Credit Facility L/C
Exposure of any Letter of Credit Facility Lender at any time shall mean its
Letter of Credit Facility Pro Rata Percentage of the aggregate Letter of Credit
Facility L/C Exposure at such time.
"Letter of Credit Facility Lender" shall mean a Lender with a Letter of
Credit Facility Commitment or a participation in an outstanding Letter of Credit
Facility Letter of Credit or L/C Disbursement in respect thereof.
"Letter of Credit Facility Letter of Credit" shall mean a Letter of
Credit designated (or deemed designated) as such and issued pursuant to Section
2.23.
"Letter of Credit Facility Loans" shall mean the loans deemed made by
the Lenders to the Borrower pursuant to Section 2.02(g). Each Letter of Credit
Facility Loan when made shall be an ABR Loan and thereafter shall be an ABR Loan
or a Eurodollar Loan as the Borrower may select in accordance with the
provisions of this Agreement.
"Letter of Credit Facility Pro Rata Percentage" of any Letter of Credit
Facility Lender at any time shall mean the percentage of the aggregate Letter of
Credit Facility Commitments represented by such Letter of Credit Facility
Lender's Letter of Credit Facility
13
Commitment. In the event the Letter of Credit Facility Commitments shall have
expired or been terminated, the Letter of Credit Facility Pro Rata Percentages
shall be determined on the basis of the Letter of Credit Facility Commitments
most recently in effect.
"Leverage Ratio" shall mean, on any date, the ratio of Funded Debt on
such date to Consolidated EBITDA of the Borrower for the period of four
consecutive fiscal quarters most recently ended as of such date.
"LIBO Rate" shall mean, with respect to any Eurodollar Borrowing for
any Interest Period, the rate per annum determined by the Administrative Agent
at approximately 11:00 a.m. (London time), on the date that is two Business Days
prior to the commencement of such Interest Period by reference to the British
Bankers' Association Interest Settlement Rates for deposits in dollars (as set
forth by the Bloomberg Information Service or any successor thereto or any other
service selected by the Administrative Agent that has been nominated by the
British Bankers' Association as an authorized information vendor for the purpose
of displaying such rates) for a period equal to such Interest Period; provided
that, to the extent that an interest rate is not ascertainable pursuant to the
foregoing provisions of this definition, the "LIBO Rate" shall be the interest
rate per annum determined by the Administrative Agent to be the average of the
rates per annum at which deposits in dollars are offered for such relevant
Interest Period to major banks in the London interbank market in London, England
by the Administrative Agent at approximately 11:00 a.m. (London time) on the
date that is two Business Days prior to the beginning of such Interest Period.
"Lien" shall mean, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, encumbrance, charge or security interest in or on such
asset and (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset.
"Loan Documents" shall mean this Agreement, the Security Documents and
any Incremental Term Loan Assumption Agreement.
"Loan Parties" shall mean the Borrower and the Guarantors.
"Loans" shall mean the Revolving Loans, the Letter of Credit Facility
Loans, the Term Loans and the Swingline Loans.
"Maintenance Capital Expenditures" shall mean, for any period, actual
Capital Expenditures during such period for maintenance, repair, upkeep and
normal course renovations.
"Management Services Agreement" shall mean the Management and Fee
Agreement dated as of October 2, 2000, between the Borrower and Xxxxxx-Xxxxxx
Capital, Inc.
"Margin Stock" shall have the meaning assigned to such term in
Regulation U.
"Material Adverse Effect" shall mean (a) a materially adverse effect on
the business, assets, operations or condition (financial or otherwise) of the
Borrower and the Subsidiaries, taken as a whole, (b) material impairment of the
ability of the Borrower and the other Loan Parties, taken as a whole, to perform
any of their respective obligations under any Loan Document to which any such
person is or will be a party or (c) material impairment of the rights of or
benefits available to the Lenders under any Loan Document.
"Material Indebtedness" shall mean Indebtedness (other than the Loans
and Letters of Credit), or obligations in respect of one or more Hedging
Agreements, of any one or more
14
of Holdings, the Borrower and the Subsidiaries in an aggregate principal amount
exceeding $5,000,000. For purposes of determining Material Indebtedness, the
"principal amount" of the obligations of Holdings, the Borrower or any
Subsidiary in respect of any Hedging Agreement at any time shall be the maximum
aggregate amount (giving effect to any netting agreements) that Holdings, the
Borrower or such Subsidiary would be required to pay if such Hedging Agreement
were terminated at such time.
"Moody's" shall mean Xxxxx'x Investors Service, Inc.
"Mortgaged Properties" shall mean the owned real properties of the Loan
Parties and improvements thereto with respect to which a Mortgage is granted
pursuant to Section 5.09 or 5.10.
"Mortgages" shall mean the mortgages, deeds of trust, leasehold
mortgages, assignments of leases and rents, modifications and other security
documents delivered pursuant to Section 5.09 or 5.10, each in form and substance
reasonably satisfactory to the Administrative Agent.
"Multiemployer Plan" shall mean a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Net Cash Proceeds" shall mean (a) with respect to any Asset Sale, the
cash proceeds (including cash proceeds subsequently received (as and when
received) in respect of noncash consideration initially received but excluding
rent received from any sublessee in connection with a sublease by a Loan Party
of any leasehold interest), net of (i) selling expenses (including reasonable
broker's fees or commissions, legal fees, transfer and similar taxes and the
Borrower's good faith estimate of taxes paid or payable in connection with such
sale), (ii) amounts provided as a reserve, in accordance with GAAP, against any
liabilities under any indemnification obligations or purchase price adjustment
associated with such Asset Sale (provided that, to the extent and at the time
any such amounts are released from such reserve, such amounts shall constitute
Net Cash Proceeds) and (iii) the principal amount, premium or penalty, if any,
interest and other amounts on any Indebtedness for borrowed money which is
secured by the asset sold in such Asset Sale and which is repaid with such
proceeds; provided, however, that, except with respect to the Net Cash Proceeds
of any sale or disposition described in Section 6.05(c), if (x) the Borrower
shall deliver a certificate of a Financial Officer to the Administrative Agent
at the time of receipt thereof setting forth the Borrower's intent to reinvest
such proceeds in Permitted Acquisitions or productive assets of a kind then used
or usable in the business of the Borrower and its Subsidiaries within 360 days
of receipt of such proceeds and (y) no Default or Event of Default shall have
occurred and shall be continuing at the time of such certificate or at the
proposed time of the application of such proceeds, such proceeds shall not
constitute Net Cash Proceeds except to the extent not so used or contractually
committed to be used at the end of such 360-day period, at which time such
proceeds shall be deemed to be Net Cash Proceeds; and (b) with respect to any
issuance or disposition of Indebtedness or any Equity Issuance, the cash
proceeds thereof, net of all taxes and customary fees, commissions, costs and
other expenses incurred in connection therewith; provided, however, that, for
purposes of this definition, the cash proceeds of any Equity Issuance shall be
deemed not to be reduced by the amount of any fee payable pursuant to the
proviso to Section 6.07(d)(ii).
"New Holdings Note Documents" shall mean all instruments, agreements
and other documents evidencing or governing the New Holdings Notes or providing
for any right in respect thereof.
15
"New Holdings Notes" shall mean Holdings' Series A Senior Subordinated
Notes due 2011 and Series B Junior Subordinated Notes due 2011 in an initial
aggregate principal amount of $28,000,000.
"New Subordinated Note Documents" shall mean the New Subordinated
Notes, the New Subordinated Note Indenture and all other documents executed and
delivered with respect to the New Subordinated Notes or the New Subordinated
Note Indenture.
"New Subordinated Note Indenture" shall mean the indenture dated as of
June 28, 2002, between the Borrower and U.S. Bank Corporate Trust Services, as
the senior subordinated note indenture trustee, as in effect on the Closing Date
and as thereafter amended from time to time in accordance with the requirements
thereof and of this Agreement.
"New Subordinated Notes" shall mean the Borrower's 11-1/4% Senior
Subordinated Notes due 2010 in an initial aggregate principal amount of
$230,000,000 issued pursuant to the New Subordinated Note Indenture and any
notes issued by the Borrower in exchange for, and as contemplated by, the New
Subordinated Notes with substantially identical terms as the New Subordinated
Notes.
"Obligations" shall mean all obligations defined as "Obligations" in
the Guarantee and Collateral Agreement and the other Security Documents.
"Other Taxes" shall mean any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made under any Loan Document or from the
execution, delivery or enforcement of, or otherwise with respect to, any Loan
Document.
"Other Term Loans" shall have the meaning assigned to such term in
Section 2.24(a).
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to
and defined in ERISA.
"Perfection Certificate" shall mean the Perfection Certificate,
substantially in the form of Exhibit E, prepared by the Borrower.
"Permitted Acquisition" shall have the meaning assigned to such term in
Section 6.04(f).
"Permitted Investments" shall mean:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
of America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America),
in each case maturing within one year from the date of acquisition
thereof;
(b) investments in commercial paper maturing within six months
days from the date of acquisition thereof and having, at such date of
acquisition, the highest credit rating obtainable from S&P or from
Xxxxx'x;
(c) investments in certificates of deposit, banker's
acceptances and time deposits maturing within six months from the date
of acquisition thereof issued or guaranteed by or placed with, and
money market deposit accounts issued or offered
16
by, the Administrative Agent or any domestic office of any Lender or
any commercial bank organized under the laws of the United States of
America or any State thereof that has a combined capital and surplus
and undivided profits of not less than $500,000,000;
(d) fully collateralized repurchase agreements with a term of
not more than 30 days for securities described in clause (a) above and
entered into with a financial institution satisfying the criteria of
clause (c) above;
(e) investments in "money market funds" within the meaning of
Rule 2a-7 of the Investment Company Act of 1940, as amended,
substantially all of whose assets are invested in investments of the
type described in clauses (a) through (d) above;
(f) investments in municipal securities maturing within one
year from the date of acquisition thereof and having, at such date of
acquisition, a rating of at least AA by S&P or at least Aa by Xxxxx'x;
and
(g) other short-term investments utilized by Foreign
Subsidiaries in accordance with normal investment practices for cash
management in investments of a type analogous to the foregoing.
"Permitted Investors" shall mean (a) Xxxxxx-Xxxxxx Investments L.P.,
Sentinel Capital Partners, II, L.P., Xxxxxxxxx X. Xxxxxx, Xxxxxx X. Xxxxxxxxx,
Xxxxxx X. Xxxxxxxxx, Xxxxxx X. Xxxxxx, Xxx X. Xxxxxx and Xxxxx X. Xxxxx and any
other person who is a Controlled Affiliate of any of the foregoing and any
member of senior management of Holdings or the Borrower on the Closing Date and
(b) any Related Party of any of the foregoing.
"person" shall mean any natural person, corporation, business trust,
joint venture, association, company, limited liability company, partnership,
Governmental Authority or other entity.
"Plan" shall mean any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 307 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Prime Rate" shall mean the rate of interest per annum publicly
announced from time to time by the Administrative Agent as its prime rate in
effect at its principal office in New York City; each change in the Prime Rate
shall be effective on the date such change is publicly announced as being
effective.
"Pro Forma Basis" shall mean, with respect to compliance with any test
or covenant hereunder, compliance with such covenant or test after giving effect
to any proposed incurrence of Indebtedness, Permitted Acquisition or Asset Sale
(including pro forma adjustments arising out of events which are directly
attributable to the proposed incurrence of Indebtedness, Permitted Acquisition
or Asset Sale, are factually supportable and are expected to have a continuing
impact, in each case which adjustments (a) are based on reasonably detailed
written assumptions reasonably acceptable to the Administrative Agent and (b)
are certified by a Financial Officer of the Borrower as having been prepared in
good faith based upon reasonable assumptions) using, for purposes of determining
such compliance, the historical financial statements of all entities or assets
so acquired or sold or to be acquired or sold and the consolidated financial
statements of the Borrower and its Subsidiaries which shall be reformulated as
if such incurrence of Indebtedness, Permitted
17
Acquisition or Asset Sale, and any other Permitted Acquisitions and Asset Sales
that have been consummated during the period, and any Indebtedness or other
liabilities incurred in connection with any such Permitted Acquisitions had been
consummated and incurred at the beginning of such period.
"Pro Forma Compliance" shall mean, at any date of determination, that
the Borrower shall be in pro forma compliance with the covenants set forth in
Sections 6.11, 6.12 and 6.13 as of the last day of the most recent fiscal
quarter-end (computed on the basis of (a) balance sheet amounts as of the most
recently completed fiscal quarter, and (b) income statement amounts for the most
recently completed period of four consecutive fiscal quarters, in each case, for
which financial statements shall have been delivered to the Administrative Agent
and calculated on a Pro Forma Basis in respect of the event giving rise to such
determination).
"Qualified Initial Public Equity Offering" shall mean an underwritten
initial public offering of common stock of, and by, Holdings pursuant to a
registration statement filed with the Securities and Exchange Commission in
accordance with the Securities Act of 1933, as amended, which initial public
equity offering results in gross cash proceeds to Holdings of not less than
$50,000,000.
"Qualified Tahoe Joe's Equity Offering" shall mean the sale of common
stock of Tahoe Joe's which results in gross cash proceeds to Holdings or the
Borrower and its Subsidiaries (other than Tahoe Joe's) of not less than
$25,000,000.
"Register" shall have the meaning assigned to such term in Section
9.04(d).
"Regulation T" shall mean Regulation T of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation U" shall mean Regulation U of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation X" shall mean Regulation X of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Related Fund" shall mean, with respect to any Lender that is a fund
that invests in bank loans, any other fund that invests in bank loans and is
advised or managed by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"Related Lender Parties" shall mean, with respect to any specified
person, such person's Affiliates and the respective directors, officers,
employees, agents and advisors of such person and such person's Affiliates.
"Related Party" shall mean (a) any Controlling stockholder, Controlling
member, general partner, majority owned subsidiary, or spouse or immediate
family member (in the case of an individual) of any Permitted Investor, (b) any
estate, trust, corporation, partnership or other entity, the beneficiaries,
stockholders, partners, owners or persons holding a Controlling interest of
which consist solely of one or more Permitted Investors and/or such other
persons referred to in the immediately preceding clause (a) or (c) any executor,
administrator, trustee, manager, director or other similar fiduciary of any
person referred to in the immediately preceding clause (b) acting solely in such
capacity.
"Release" shall mean any release, spill, emission, leaking, dumping,
injection, pouring, deposit, disposal, discharge, dispersal, leaching or
migration into or through the environment or within or upon any building,
structure, facility or fixture.
18
"Rent" shall mean, for any period, the aggregate amount of fixed and
contingent rentals (including percentage rents) payable by the Borrower and the
Subsidiaries, determined on a consolidated basis in accordance with GAAP, for
such period with respect to leases of real property and fixtures; provided that
payments in respect of Capital Lease Obligations shall not constitute Rent.
"Repayment Date" shall have the meaning given such term in Section
2.11. Unless the context shall otherwise require, the term "Repayment Date"
shall include the Incremental Term Loan Repayment Dates.
"Required Lenders" shall mean, at any time, Lenders having Loans
(excluding Swingline Loans), Aggregate L/C Exposure, Swingline Exposure and
unused Revolving Credit Commitments, Letter of Credit Facility Commitments and
Term Loan Commitments representing greater than 50% of the sum of all Loans
outstanding (excluding Swingline Loans), Aggregate L/C Exposure, Swingline
Exposure and unused Revolving Credit Commitments, Letter of Credit Facility
Commitments and Term Loan Commitments at such time.
"Responsible Officer" of any person shall mean any executive officer or
Financial Officer of such person and any other officer or similar official
thereof responsible for the administration of the obligations of such person in
respect of this Agreement.
"Restricted Indebtedness" shall mean the New Holdings Notes, the New
Subordinated Notes and any other Indebtedness of Holdings, the Borrower or any
Subsidiary, the payment, prepayment, repurchase or defeasance of which is
restricted under Section 6.09(b).
"Restricted Payment" shall mean any dividend, interest or other
distribution (whether in cash, securities or other property) with respect to any
Equity Interests in Holdings, the Borrower or any Subsidiary or the New Holdings
Notes or any payment (whether in cash, securities or other property), including
any sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancelation or termination of any Equity Interests in
Holdings, the Borrower or any Subsidiary or the New Holdings Notes or any
option, warrant or other right to acquire any such Equity Interests in Holdings,
the Borrower or any Subsidiary. The amount of any Restricted Payment resulting
from the Tahoe Joe's Dividend shall be the fair market value of the Equity
Interests of Tahoe Joe's subject thereto, as determined by an independent
investment banking firm of recognized national standing.
"Revolving Credit Borrowing" shall mean a Borrowing comprised of
Revolving Loans.
"Revolving Credit Commitment" shall mean, with respect to each Lender,
the commitment of such Lender to make Revolving Loans hereunder as set forth on
Schedule 2.01, or in the Assignment and Acceptance pursuant to which such Lender
assumed its Revolving Credit Commitment, as applicable, as the same may be (a)
reduced from time to time pursuant to Section 2.09 and (b) reduced or increased
from time to time pursuant to assignments by or to such Lender pursuant to
Section 9.04.
"Revolving Credit Exposure" shall mean, with respect to any Lender at
any time, the aggregate principal amount at such time of all outstanding
Revolving Loans of such Lender, plus the aggregate amount at such time of such
Lender's Revolving Facility L/C Exposure, plus the aggregate amount at such time
of such Lender's Swingline Exposure.
"Revolving Credit Lender" shall mean a Lender with a Revolving Credit
Commitment or an outstanding Revolving Loan.
19
"Revolving Credit Maturity Date" shall mean June 28, 2007.
"Revolving Facility L/C Exposure" shall mean at any time the sum of (a)
the aggregate undrawn amount of all outstanding Revolving Facility Letters of
Credit at such time and (b) the aggregate principal amount of all L/C
Disbursements in respect of Revolving Facility Letters of Credit that have not
yet been reimbursed at such time. The Revolving Facility L/C Exposure of any
Revolving Credit Lender at any time shall equal its Revolving Facility Pro Rata
Percentage of the aggregate Revolving Facility L/C Exposure at such time.
"Revolving Facility Letter of Credit" shall mean a Letter of Credit
designated (or deemed designated) as such and issued pursuant to Section 2.23.
"Revolving Facility Pro Rata Percentage" of any Revolving Credit Lender
at any time shall mean the percentage of the Total Revolving Credit Commitment
represented by such Lender's Revolving Credit Commitment. In the event the
Revolving Credit Commitments shall have expired or been terminated, the
Revolving Facility Pro Rata Percentages shall be determined on the basis of the
Revolving Credit Commitments most recently in effect.
"Revolving Loans" shall mean the revolving loans made by the Lenders to
the Borrower pursuant to clause (c) of Section 2.01 and clause (f) of Section
2.02.
"Roadhouse Disposition" shall mean the sale by the Borrower of all the
Equity Interests of, or all or substantially all of the assets of, Distinctive
Dining, Inc. (d/b/a Original Roadhouse Grill).
"S&P" shall mean Standard & Poor's Ratings Services.
"Sale and Leaseback" shall have the meaning assigned to such term in
Section 6.03.
"Sale-Leaseback B" shall mean one or more related Sale and Leasebacks
of up to 38 restaurants owned by the Borrower or the Subsidiaries and identified
on Schedule 1.01(b).
"Sale-Leaseback C" shall mean one or more related Sale and Leasebacks
of equipment and fixtures owned by the Borrower or the Subsidiaries.
"Secured Parties" shall have the meaning assigned to such term in the
Guarantee and Collateral Agreement.
"Security Documents" shall mean the Mortgages, the Guarantee and
Collateral Agreement and each of the security agreements, mortgages and other
instruments and documents executed and delivered pursuant to any of the
foregoing or pursuant to Section 5.09 or 5.10.
"Seller Notes" shall have the meaning assigned to such term in Section
6.01(h).
"Senior Leverage Ratio" shall mean, on any date, the ratio of Funded
Senior Debt on such date to Consolidated EBITDA of the Borrower for the period
of four consecutive fiscal quarters most recently ended as of such date.
"SPC" shall have the meaning assigned to such term in Section 9.04(i).
"Special Disposition" shall mean Sale-Leaseback B or the Roadhouse
Disposition, in each case if consummated within 270 days after the Closing Date.
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"Special Prepayment Amount" shall mean, with respect to each of
Sale-Leaseback B and the Roadhouse Disposition, the lesser of (a) the Net Cash
Proceeds received from Sale- Leaseback B or the Roadhouse Disposition, as the
case may be, and (b) (i) in the case of Sale- Leaseback B, 3.7 times the
scheduled average annual cash rent expense of the property sold and thereafter
leased back for the period commencing on the date of the completion of Sale-
Leaseback B and ending on the Term Loan Maturity Date and (ii) in the case of
the Roadhouse Disposition, 3.7 times the excess of (x) Consolidated EBITDA of
the Borrower and the Subsidiaries for the period of four consecutive fiscal
quarters most recently ended on or prior to the consummation of the Roadhouse
Disposition over (y) Consolidated EBITDA of the Borrower and the Subsidiaries
over the same period, calculated on a Pro Forma Basis as if the Roadhouse
Disposition had occurred at the beginning of such period.
"Statutory Reserves" shall mean a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board for Eurocurrency Liabilities (as defined in Regulation
D of the Board). Such reserve percentages shall include those imposed pursuant
to such Regulation D. Eurodollar Loans shall be deemed to constitute
Eurocurrency Liabilities) and to be subject to such reserve requirements without
benefit of or credit for proration, exemptions or offsets that may be available
from time to time to any Lender under such Regulation D. Statutory Reserves
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
"subsidiary" shall mean, with respect to any person (herein referred to
as the "parent"), any corporation, partnership, association or other business
entity of which securities or other ownership interests representing more than
50% of the equity or more than 50% of the ordinary voting power are, at the time
any determination is being made, owned, controlled or held by the parent or one
or more subsidiaries of the parent or by the parent and one or more subsidiaries
of the parent.
"Subsidiary" shall mean any subsidiary of the Borrower.
"Subsidiary Guarantor" shall mean each Subsidiary listed on Schedule
1.01(c), and each other Subsidiary that is or becomes a party to the Guarantee
and Collateral Agreement.
"Swingline Commitment" shall mean the commitment of the Swingline
Lender to make loans pursuant to Section 2.22, as the same may be reduced from
time to time pursuant to Section 2.09 or Section 2.22.
"Swingline Exposure" shall mean at any time the aggregate principal
amount at such time of all outstanding Swingline Loans. The Swingline Exposure
of any Revolving Credit Lender at any time shall equal its Revolving Facility
Pro Rata Percentage of the aggregate Swingline Exposure at such time.
"Swingline Lender" shall mean Credit Suisse First Boston, in its
capacity as lender of Swingline Loans hereunder.
"Swingline Loan" shall mean any loan made by the Swingline Lender
pursuant to Section 2.22.
"Synthetic Lease" shall mean, as to any person, any lease (including
leases that may be terminated by the lessee at any time) of any property
(whether real, personal or mixed) (a) that is accounted for as an operating
lease under GAAP and (b) in respect of which the lessee retains or obtains
ownership of the property so leased for U.S. federal income tax purposes, other
than any such lease under which such person is the lessor.
21
"Synthetic Lease Obligations" shall mean, as to any person, an amount
equal to the sum of (a) the obligations of such person to pay rent or other
amounts under any Synthetic Lease which are attributable to principal and,
without duplication, (b) the amount of any purchase price payment under any
Synthetic Lease assuming the lessee exercises the option to purchase the leased
property at the end of the lease term.
"Synthetic Purchase Agreement" shall mean any swap, derivative or other
agreement or combination of agreements pursuant to which Holdings, the Borrower
or any Subsidiary is or may become obligated to make (a) any payment in
connection with a purchase by any third party from a person other than Holdings,
the Borrower or any Subsidiary of any Equity Interest or Restricted Indebtedness
of Holdings, the Borrower or a Subsidiary or (b) any payment (other than on
account of a permitted purchase by it of any Equity Interest or Restricted
Indebtedness) the amount of which is determined by reference to the price or
value at any time of any Equity Interest or Restricted Indebtedness of Holdings,
the Borrower or a Subsidiary; provided that no phantom stock or similar plan
providing for payments only to current or former directors, officers,
consultants or employees of Holdings, the Borrower or the Subsidiaries (or to
their heirs or estates) shall be deemed to be a Synthetic Purchase Agreement.
"Tahoe Joe's" shall mean Tahoe Joe's, Inc., a Delaware corporation.
"Tahoe Joe's Dividend" shall mean the dividend or distribution by the
Borrower or Holdings of all the Equity Interests of Tahoe Joe's held by the
Borrower or Holdings.
"Tahoe Joe's Stockholders' Agreement" shall mean the Stockholders'
Agreement dated April 8, 1999, among the Borrower, HomeTown Buffet, Inc., a
Delaware corporation, Xxxxx X. Xxxxxxx, Xx. and Tahoe Joe's.
"Taxes" shall mean any and all present or future taxes, levies,
imposts, duties, deductions, charges, liabilities or withholdings imposed by any
Governmental Authority.
"Tax Payments" shall mean payments in cash in respect of Federal,
state, local and foreign income taxes and assessments, including all interests,
penalties and additions imposed with respect to such amounts, paid or payable by
or on behalf of the Borrower and its consolidated Subsidiaries.
"Term Borrowing" shall mean a Borrowing comprised of Term Loans.
"Term Loan Commitment" shall mean, with respect to each Lender, the
commitment of such Lender to make Term Loans hereunder as set forth on Schedule
2.01, or in the Assignment and Acceptance pursuant to which such Lender assumed
its Term Loan Commitment, as applicable, as the same may be (a) reduced from
time to time pursuant to Section 2.09 and (b) reduced or increased from time to
time pursuant to assignments by or to such Lender pursuant to Section 9.04. The
total amount of the initial Term Loan Commitments is $245,000,000. Unless the
context shall otherwise require, after the effectiveness of any Incremental Term
Loan Commitment the term "Term Loan Commitment" shall include such Incremental
Term Loan Commitments.
"Term Loan Maturity Date" shall mean June 28, 2009.
"Term Loans" shall mean the term loans made by the Lenders to the
Borrower pursuant to Section 2.01. Unless the context shall otherwise require,
the term "Term Loans" shall include any Incremental Term Loans.
22
"Total Debt" shall mean, at any time, the total Indebtedness of the
Borrower and the Subsidiaries at such time (excluding Indebtedness of the type
described in clause (h) of the definition of such term, except to the extent of
any unreimbursed drawings).
"Total Revolving Credit Commitment" shall mean, at any time, the
aggregate amount of the Revolving Credit Commitments, as in effect at such time.
The initial Total Revolving Credit Commitment is $30,000,000.
"Transactions" shall mean, collectively, (a) the execution, delivery
and performance by the Loan Parties of the Loan Documents to which they are a
party and, in the case of the Borrower, the Borrowings hereunder, (b) the
execution, delivery and performance by the Loan Parties of the New Holdings
Notes Documents and the New Subordinated Notes Documents to which they are a
party and, in the case of Holdings and the Borrower, the issuance of the New
Holdings Notes and the New Subordinated Notes, respectively, (c) the execution,
delivery and performance by Holdings and the Borrower of the Existing Notes
Redemption Agreement and the consummation of the Existing Notes Redemption, (d)
the payment of the Closing Date Dividend, (e) the refinancing and termination of
the Existing Credit Agreement and (f) the payment of related fees and expenses.
"Type", when used in respect of any Loan or Borrowing, shall refer to
the Rate by reference to which interest on such Loan or on the Loans comprising
such Borrowing is determined. For purposes hereof, the term "Rate" shall include
the Adjusted LIBO Rate and the Alternate Base Rate.
"wholly owned Subsidiary" of any person shall mean a subsidiary of such
person of which securities (except for directors' qualifying shares) or other
ownership interests representing 100% of the Equity Interests are, at the time
any determination is being made, owned, controlled or held by such person or one
or more wholly owned Subsidiaries of such person or by such person and one or
more wholly owned Subsidiaries of such person.
"Withdrawal Liability" shall mean liability to a Multiemployer Plan as
a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Terms Generally. The definitions in Section 1.01 shall
apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall"; and the words "asset" and "property" shall be construed as having
the same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, securities, accounts and contract rights.
All references herein to Articles, Sections, Exhibits and Schedules shall be
deemed references to Articles and Sections of, and Exhibits and Schedules to,
this Agreement unless the context shall otherwise require. Except as otherwise
expressly provided herein, (a) any reference in this Agreement to any document
shall mean such document as amended, restated, supplemented or otherwise
modified from time to time in accordance with the terms thereof and of this
Agreement and (b) all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided,
however, that if the Borrower notifies the Administrative Agent that the
Borrower wishes to amend any covenant in Article VI or any related definition to
eliminate the effect of any change in GAAP occurring after the date of this
Agreement on the operation of such covenant (or if the Administrative Agent
notifies the Borrower that the Required Lenders wish to amend Article VI or any
related definition for such purpose), then the Borrower's compliance with such
covenant shall be determined on the basis of GAAP in effect immediately before
the
23
relevant change in GAAP became effective, until either such notice is withdrawn
or such covenant is amended in a manner satisfactory to the Borrower and the
Required Lenders.
SECTION 1.03. Pro Forma Calculations. With respect to any period during
which any Permitted Acquisition or Asset Sale individually or in the aggregate
in excess of $5,000,000 occurs as permitted pursuant to the terms hereof, the
Leverage Ratio, the Senior Leverage Ratio, the Interest Coverage Ratio and the
Fixed Charge Coverage Ratio shall be calculated with respect to such period and
such Permitted Acquisition or Asset Sale on a Pro Forma Basis.
SECTION 1.04. Classification of Loans and Borrowings. For purposes of
this Agreement, Loans may be classified and referred to by Class (e.g., a
"Revolving Loan") or by Type (e.g., a "Eurocurrency Loan") or by Class and Type
(e.g., a "Eurocurrency Revolving Loan"). Borrowings also may be classified and
referred to by Class (e.g., a "Revolving Borrowing") or by Type (e.g., a
"Eurocurrency Borrowing") or by Class and Type (e.g., a "Eurocurrency Revolving
Borrowing").
ARTICLE II
The Credits
SECTION 2.01. Commitments. Subject to the terms and conditions and
relying upon the representations and warranties herein set forth, each Lender
agrees, severally and not jointly, (a) to make a Term Loan to the Borrower on
the Closing Date in a principal amount not to exceed its Term Loan Commitment,
(b) if such Lender has so committed pursuant to Section 2.24, to make
Incremental Term Loans to the Borrower, in an aggregate principal amount not to
exceed its Incremental Term Loan Commitment and (c) to make Revolving Loans to
the Borrower, at any time and from time to time on or after the date hereof, and
until the earlier of the Revolving Credit Maturity Date and the termination of
the Revolving Credit Commitment of such Lender in accordance with the terms
hereof, in an aggregate principal amount at any time outstanding that will not
result in such Lender's Revolving Credit Exposure exceeding such Lender's
Revolving Credit Commitment. Within the limits set forth in clause (c) of the
preceding sentence and subject to the terms, conditions and limitations set
forth herein, the Borrower may borrow, prepay and reborrow Revolving Loans.
Amounts paid or prepaid in respect of Term Loans may not be reborrowed. Letter
of Credit Facility Loans may be prepaid without reducing the Letter of Credit
Facility Commitments; provided, however, that Letter of Credit Facility Loans
may not be reborrowed as such.
SECTION 2.02. Loans. (a) Each Loan (other than Swingline Loans) shall
be made as part of a Borrowing consisting of Loans made by the Lenders ratably
in accordance with their applicable Commitments; provided, however, that the
failure of any Lender to make any Loan shall not in itself relieve any other
Lender of its obligation to lend hereunder (it being understood, however, that
no Lender shall be responsible for the failure of any other Lender to make any
Loan required to be made by such other Lender). Except for Loans deemed made
pursuant to Section 2.02(f) and 2.02(g), the Loans comprising any Borrowing
shall be in an aggregate principal amount that is (i) an integral multiple of
$500,000 and not less than $2,500,000 or (ii) equal to the remaining available
balance of the applicable Commitments.
(b) Subject to Sections 2.08 and 2.15, each Borrowing shall be
comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request
pursuant to Section 2.03. Each Lender may at its option make any Eurodollar Loan
by causing any domestic or foreign branch or Affiliate of such Lender to make
such Loan; provided that any exercise of such
24
option shall not affect the obligation of the Borrower to repay such Loan in
accordance with the terms of this Agreement. Borrowings of more than one Type
may be outstanding at the same time; provided, however, that the Borrower shall
not be entitled to request any Borrowing that, if made, would result in more
than 10 Eurodollar Borrowings outstanding hereunder at any time. For purposes of
the foregoing, Eurodollar Borrowings having different Interest Periods,
regardless of whether they commence on the same date, shall be considered
separate Borrowings.
(c) Except with respect to Loans made pursuant to Section 2.02(f) and
2.02(g), each Lender shall make each Loan to be made by it hereunder on the
proposed date thereof by wire transfer of immediately available funds to such
account in New York City as the Administrative Agent may designate not later
than 11:00 a.m., New York City time, in the case of a Eurodollar Borrowing, or
1:00 p.m., New York City time, in the case of an ABR Borrowing, and the
Administrative Agent shall promptly credit the amounts so received to an account
in the name of the Borrower, maintained with the Administrative Agent and
designated by the Borrower in the applicable Borrowing Request or, if a
Borrowing shall not occur on such date because any condition precedent herein
specified shall not have been met, return the amounts so received to the
respective Lenders.
(d) Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender's portion of such Borrowing,
the Administrative Agent may assume that such Lender has made such portion
available to the Administrative Agent on the date of such Borrowing in
accordance with paragraph (c) above and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If the Administrative Agent shall have so made funds
available then, to the extent that such Lender shall not have made such portion
available to the Administrative Agent, such Lender and the Borrower severally
agree to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrower until the date such amount is
repaid to the Administrative Agent at (i) in the case of the Borrower, the
interest rate applicable at the time to the Loans comprising such Borrowing and
(ii) in the case of such Lender, a rate determined by the Administrative Agent
to represent its cost of overnight or short-term funds (which determination
shall be conclusive absent manifest error). If such Lender shall repay to the
Administrative Agent such corresponding amount, such amount shall constitute
such Lender's Loan as part of such Borrowing for purposes of this Agreement.
(e) Notwithstanding any other provision of this Agreement, the Borrower
shall not be entitled to request any Revolving Credit Borrowing if the Interest
Period requested with respect thereto would end after the Revolving Credit
Maturity Date.
(f) If the Issuing Bank shall not have received from the Borrower the
payment required to be made by Section 2.23(e) with respect to any Revolving
Facility Letter of Credit within the time specified in such Section, the Issuing
Bank will promptly notify the Administrative Agent of the L/C Disbursement and
the Administrative Agent will promptly notify each Revolving Credit Lender of
such L/C Disbursement and its Revolving Facility Pro Rata Percentage thereof.
Each Revolving Credit Lender shall pay by wire transfer of immediately available
funds to the Administrative Agent not later than 2:00 p.m., New York City time,
on such date (or, if such Revolving Credit Lender shall have received such
notice later than 12:00 (noon), New York City time, on any day, not later than
10:00 a.m., New York City time, on the immediately following Business Day), an
amount equal to such Lender's Revolving Facility Pro Rata Percentage of such L/C
Disbursement (it being understood that such amount shall be deemed to constitute
an ABR Revolving Loan of such Lender and such payment shall be deemed to have
reduced the Revolving Facility L/C Exposure), and the Administrative Agent will
promptly pay to the Issuing Bank amounts so
25
received by it from such Revolving Credit Lenders. The Administrative Agent will
promptly pay to the Issuing Bank any amounts received by it from the Borrower
pursuant to Section 2.23(e) prior to the time that any Revolving Credit Lender
makes any payment pursuant to this paragraph (f); any such amounts received by
the Administrative Agent thereafter will be promptly remitted by the
Administrative Agent to the Revolving Credit Lenders that shall have made such
payments and to the Issuing Bank, as their interests may appear. If any
Revolving Credit Lender shall not have made its Revolving Facility Pro Rata
Percentage of such L/C Disbursement available to the Administrative Agent as
provided above, such Lender and the Borrower severally agree to pay interest on
such amount, for each day from and including the date such amount is required to
be paid in accordance with this paragraph to but excluding the date such amount
is paid, to the Administrative Agent for the account of the Issuing Bank at (i)
in the case of the Borrower, a rate per annum equal to the interest rate
applicable to Revolving Loans pursuant to Section 2.06(a), and (ii) in the case
of such Lender, for the first such day, the Federal Funds Effective Rate, and
for each day thereafter, the Alternate Base Rate.
(g) If the Issuing Bank shall not have received from the Borrower the
payment required to be made by Section 2.23(e) with respect to any Letter of
Credit Facility Letter of Credit within the time specified in such Section, the
Issuing Bank will promptly notify the Administrative Agent of the L/C
Disbursement and the Administrative Agent will promptly notify each Letter of
Credit Facility Lender of such L/C Disbursement and its Letter of Credit
Facility Pro Rata Percentage thereof. Each Letter of Credit Facility Lender
shall pay by wire transfer of immediately available funds to the Administrative
Agent not later than 2:00 p.m., New York City time, on such date (or, if such
Letter of Credit Facility Lender shall have received such notice later than
12:00 (noon), New York City time, on any day, not later than 10:00 a.m., New
York City time, on the immediately following Business Day), an amount equal to
such Lender's Letter of Credit Facility Pro Rata Percentage of such L/C
Disbursement (it being understood that such amount shall be deemed to constitute
an ABR Letter of Credit Facility Loan of such Lender and such payment shall be
deemed to have reduced the Letter of Credit Facility L/C Exposure), and the
Administrative Agent will promptly pay to the Issuing Bank amounts so received
by it from such Letter of Credit Facility Lenders. The Administrative Agent will
promptly pay to the Issuing Bank any amounts received by it from the Borrower
pursuant to Section 2.23(e) prior to the time that any Letter of Credit Facility
Lender makes any payment pursuant to this paragraph (g); any such amounts
received by the Administrative Agent thereafter will be promptly remitted by the
Administrative Agent to the Letter of Credit Facility Lenders that shall have
made such payments and to the Issuing Bank, as their interests may appear. If
any Letter of Credit Facility Lender shall not have made its Letter of Credit
Facility Pro Rata Percentage of such L/C Disbursement available to the
Administrative Agent as provided above, such Lender and the Borrower severally
agree to pay interest on such amount, for each day from and including the date
such amount is required to be paid in accordance with this paragraph to but
excluding the date such amount is paid, to the Administrative Agent for the
account of the Issuing Bank at (i) in the case of the Borrower, a rate per annum
equal to the interest rate applicable to Revolving Loans pursuant to Section
2.06(a), and (ii) in the case of such Lender, for the first such day, the
Federal Funds Effective Rate, and for each day thereafter, the Alternate Base
Rate.
SECTION 2.03. Borrowing Procedure. In order to request a Borrowing
(other than a Swingline Loan or a deemed Borrowing pursuant to Section 2.02(f)
or 2.02(g), as to which this Section 2.03 shall not apply), the Borrower shall
hand deliver or fax to the Administrative Agent a duly completed Borrowing
Request (a) in the case of a Eurodollar Borrowing, not later than 12:00 (noon),
New York City time, three Business Days before a proposed Borrowing, and (b) in
the case of an ABR Borrowing, not later than 12:00 (noon), New York City time,
one Business Day before a proposed Borrowing. Each Borrowing Request shall be
irrevocable, shall be signed by or on behalf of the Borrower and shall
26
specify the following information: (i) whether the Borrowing then being
requested is to be a Term Borrowing or a Revolving Credit Borrowing, and whether
such Borrowing is to be a Eurodollar Borrowing or an ABR Borrowing; (ii) the
date of such Borrowing (which shall be a Business Day); (iii) the number and
location of the account to which funds are to be disbursed (which shall be an
account that complies with the requirements of Section 2.02(c)); (iv) the amount
of such Borrowing; and (v) if such Borrowing is to be a Eurodollar Borrowing,
the Interest Period with respect thereto; provided, however, that,
notwithstanding any contrary specification in any Borrowing Request, each
requested Borrowing shall comply with the requirements set forth in Section
2.02. If no election as to the Type of Borrowing is specified in any such
notice, then the requested Borrowing shall be an ABR Borrowing. If no Interest
Period with respect to any Eurodollar Borrowing is specified in any such notice,
then the Borrower shall be deemed to have selected an Interest Period of one
month's duration. The Administrative Agent shall promptly advise the applicable
Lenders of any notice given pursuant to this Section 2.03 (and the contents
thereof), and of each Lender's portion of the requested Borrowing.
SECTION 2.04. Evidence of Debt; Repayment of Loans. (a) The Borrower
hereby unconditionally promises to pay to the Administrative Agent for the
account of each Lender (i) the principal amount of each Term Loan of such Lender
as provided in Section 2.11 and (ii) the then unpaid principal amount of each
Revolving Loan and Letter of Credit Facility Loan of such Lender on the
Revolving Credit Maturity Date. The Borrower hereby unconditionally promises to
pay to the Swingline Lender the then unpaid principal amount of each Swingline
Loan on the Revolving Credit Maturity Date.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such Lender
resulting from each Loan made by such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Agreement.
(c) The Administrative Agent shall maintain accounts in which it will
record (i) the amount of each Loan made hereunder, the Type thereof and the
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iii) the amount of any sum received by the Administrative Agent
hereunder from the Borrower or any Guarantor and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to paragraphs
(b) and (c) above shall be prima facie evidence of the existence and amounts of
the obligations therein recorded; provided, however, that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligations of the Borrower to repay
the Loans in accordance with their terms.
(e) Any Lender may request that Loans made by it hereunder be evidenced
by a promissory note. In such event, the Borrower shall execute and deliver to
such Lender a promissory note payable to such Lender and its registered assigns
and in a form and substance reasonably acceptable to the Administrative Agent
and the Borrower. Notwithstanding any other provision of this Agreement, in the
event any Lender shall request and receive such a promissory note, the interests
represented by such note shall at all times (including after any assignment of
all or part of such interests pursuant to Section 9.04) be represented by one or
more promissory notes payable to the payee named therein or its registered
assigns.
SECTION 2.05. Fees. (a) The Borrower agrees to pay to each Lender,
through the Administrative Agent, on the last Business Day of March, June,
September and December in each year and on each date on which any Commitment of
such Lender shall expire or be
27
terminated as provided herein, a commitment fee (a "Commitment Fee") equal to
the Applicable Percentage per annum in effect from time to time on the daily
unused amount of the Revolving Credit Commitments of such Lender during the
preceding quarter (or other period commencing with the date hereof or ending
with the Revolving Credit Maturity Date or the date on which the Commitments of
such Lender shall expire or be terminated). All Commitment Fees shall be
computed on the basis of the actual number of days elapsed in a year of 360
days. The Commitment Fee due to each Lender shall commence to accrue on the date
hereof and shall cease to accrue on the date on which the Commitment of such
Lender shall expire or be terminated as provided herein. For purposes of
calculating Commitment Fees only, no portion of the Revolving Credit Commitments
of any Lender other than the Swingline Lender shall be deemed utilized under
Section 2.17 as a result of outstanding Swingline Loans.
(b) The Borrower agrees to pay to the Administrative Agent, for its own
account, the administration fees set forth in the Fee Letter at the times and in
the amounts specified therein (the "Administrative Agent Fees").
(c) The Borrower agrees to pay (i) to each Revolving Credit Lender,
through the Administrative Agent, on the last Business Day of March, June,
September and December of each year and on the date on which the Revolving
Credit Commitment of such Lender shall be terminated as provided herein, a fee
(an "L/C Participation Fee") calculated on such Lender's Revolving Facility Pro
Rata Percentage of the daily aggregate Revolving Facility L/C Exposure
(excluding the portion thereof attributable to unreimbursed L/C Disbursements in
respect of Revolving Facility Letters of Credit) during the preceding quarter
(or shorter period commencing with the date hereof or ending with the Revolving
Credit Maturity Date or the date on which all Revolving Facility Letters of
Credit have been canceled or have expired and the Revolving Credit Commitments
of all Lenders shall have been terminated) at a rate per annum equal to the
Applicable Percentage from time to time used to determine the interest rate on
Revolving Credit Borrowings comprised of Eurodollar Loans pursuant to Section
2.06, (ii) to each Letter of Credit Facility Lender, through the Administrative
Agent, on the last Business Day of March, June, September and December of each
year and on the date on which the Letter of Credit Facility Commitment of such
Lender shall be terminated as provided herein, a fee (a "Letter of Credit
Facility Commitment Fee") calculated on such Lender's Letter of Credit Facility
Pro Rata Percentage of the daily aggregate Letter of Credit Facility Commitments
(whether used or unused but excluding, in any case, the amount thereof
represented by outstanding Letter of Credit Facility Loans) during the preceding
quarter (or shorter period commencing with the date hereof or ending with the
Revolving Credit Maturity Date or the date on which all Letter of Credit
Facility Letters of Credit have been canceled or have expired and the Letter of
Credit Facility Commitment of such Letter of Credit Facility Lender shall have
been terminated) at a rate per annum equal to the Applicable Percentage from
time to time used to determine the interest rate on Revolving Credit Borrowings
comprised of Eurodollar Loans pursuant to Section 2.06 (provided that, if any
Letter of Credit Facility Lender continues to have any Letter of Credit Facility
L/C Exposure after its Letter of Credit Facility Commitment terminates, then the
Letter of Credit Facility Commitment Fee shall continue to accrue (and be
payable on demand) on the amount of such Letter of Credit Facility Lender's
Letter of Credit Facility L/C Exposure from and including the date on which its
Letter of Credit Facility Commitment terminates to and including the date on
which such Letter of Credit Facility Lender ceases to have any Letter of Credit
Facility L/C Exposure) and (iii) to the Issuing Bank with respect to each Letter
of Credit, on the Closing Date, each anniversary of the Closing Date and on the
date on which the L/C Commitment of the Issuing Bank shall be terminated as
provided herein (or later date on which all the Letters of Credit issued by such
Issuing Bank shall have been terminated or expired), the standard fronting (in
the case of Letter of Credit Facility Letters of Credit, equal to 0.25% per
annum on the aggregate outstanding face amount of such Letter of Credit Facility
Letters of Credit), issuance and
28
drawing fees specified from time to time by the Issuing Bank (the "Issuing Bank
Fees"). All L/C Participation Fees, Letter of Credit Facility Commitment Fees
and Issuing Bank Fees shall be computed on the basis of the actual number of
days elapsed in a year of 360 days.
(d) All Fees shall be paid on the dates due, in immediately available
funds, to the Administrative Agent for distribution, if and as appropriate,
among the Lenders, except that the Issuing Bank Fees shall be paid directly to
the Issuing Bank. Once paid, none of the Fees shall be refundable under any
circumstances.
SECTION 2.06. Interest on Loans. (a) Subject to the provisions of
Section 2.07, the Loans comprising each ABR Borrowing, including each Swingline
Loan, shall bear interest (computed on the basis of the actual number of days
elapsed over a year of 365 or 366 days, as the case may be, when the Alternate
Base Rate is determined by reference to the Prime Rate and over a year of 360
days at all other times and calculated from and including the date of such
Borrowing to but excluding the date of repayment thereof) at a rate per annum
equal to the Alternate Base Rate plus the Applicable Percentage in effect from
time to time.
(b) Subject to the provisions of Section 2.07, the Loans comprising
each Eurodollar Borrowing shall bear interest (computed on the basis of the
actual number of days elapsed over a year of 360 days) at a rate per annum equal
to the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing
plus the Applicable Percentage in effect from time to time.
(c) Interest on each Loan shall be payable to the Administrative Agent
on the Interest Payment Dates applicable to such Loan except as otherwise
provided in this Agreement. The applicable Alternate Base Rate or Adjusted LIBO
Rate shall be determined by the Administrative Agent, and such determination
shall be conclusive absent manifest error.
SECTION 2.07. Default Interest. If the Borrower shall default in the
payment of the principal of or interest on any Loan or any other amount becoming
due hereunder, by acceleration or otherwise, or under any other Loan Document,
the Borrower shall on demand from time to time pay interest, to the extent
permitted by law, on such defaulted amount to but excluding the date of actual
payment (after as well as before judgment) (a) in the case of overdue principal,
at the rate otherwise applicable to such Loan pursuant to Section 2.06 plus
2.00% per annum and (b) in all other cases, at a rate per annum (computed on the
basis of the actual number of days elapsed over a year of 365 or 366 days, as
the case may be, when determined by reference to the Prime Rate and over a year
of 360 days at all other times) equal to the rate that would be applicable to an
ABR Revolving Loan plus 2.00%.
SECTION 2.08. Alternate Rate of Interest. In the event, and on each
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for a Eurodollar Borrowing the Administrative Agent shall have
determined that dollar deposits in the principal amounts of the Loans comprising
such Borrowing are not generally available in the London interbank market, or
that the rates at which such dollar deposits are being offered will not
adequately and fairly reflect the cost to a majority in interest of the Lenders
making or maintaining such Eurodollar Loans during such Interest Period, or that
reasonable means do not exist for ascertaining the Adjusted LIBO Rate, the
Administrative Agent shall, as soon as practicable thereafter, give written or
fax notice of such determination to the Borrower and the Lenders. In the event
of any such determination, until the Administrative Agent shall have advised the
Borrower and the Lenders that the circumstances giving rise to such notice no
longer exist (which the Administrative Agent agrees to do as soon as practicable
after such circumstances cease to exist), any request by the Borrower for a
Eurodollar Borrowing pursuant to Section 2.03 or 2.10 shall be deemed to be a
request for an ABR Borrowing. Each determination by the Administrative Agent
hereunder shall be conclusive absent manifest error.
29
SECTION 2.09. Termination and Reduction of Commitments. (a) The Term
Loan Commitments (other than any Incremental Term Loan Commitments, which shall
terminate in accordance with the applicable Incremental Term Loan Assumption
Agreement) shall automatically terminate at 5:00 p.m., New York City time, on
the Closing Date. The Revolving Credit Commitments, the Letter of Credit
Facility Commitments, the Swingline Commitment and the L/C Commitment shall
automatically terminate on the Revolving Credit Maturity Date. Notwithstanding
the foregoing, all the Commitments shall automatically terminate at 5:00 p.m.,
New York City time, on July 3, 2002, if the initial Credit Event shall not have
occurred by such time.
(b) Upon at least three Business Days' prior irrevocable written or fax
notice to the Administrative Agent, the Borrower may at any time in whole
permanently terminate, or from time to time in part permanently reduce, the Term
Loan Commitments, the Revolving Credit Commitments or the Letter of Credit
Facility Commitments; provided, however, that (i) each partial reduction of the
Term Loan Commitments, the Revolving Credit Commitments or the Letter of Credit
Facility Commitments shall be in an integral multiple of $1,000,000, (ii) the
Total Revolving Credit Commitment shall not be reduced to an amount that is less
than the sum of the Aggregate Revolving Credit Exposure at the time and (iii)
the aggregate amount of the Letter of Credit Facility Commitments shall not be
reduced to an amount that is less than the sum of the outstanding Letter of
Credit Facility Loans and the Letter of Credit Facility L/C Exposure at the
time.
(c) Each reduction in the Term Loan Commitments, the Revolving Credit
Commitments or the Letter of Credit Facility Commitments hereunder shall be made
ratably among the Lenders in accordance with their respective applicable
Commitments. The Borrower shall pay to the Administrative Agent for the account
of the applicable Lenders, on the date of each termination or reduction, the
Commitment Fees on the amount of the Commitments so terminated or reduced
accrued to but excluding the date of such termination or reduction.
SECTION 2.10. Conversion and Continuation of Borrowings. The Borrower
shall have the right at any time upon prior irrevocable notice to the
Administrative Agent (a) not later than 12:00 (noon), New York City time, on the
day of conversion, to convert any Eurodollar Borrowing into an ABR Borrowing,
(b) not later than 12:00 (noon), New York City time, three Business Days prior
to conversion or continuation, to convert any ABR Borrowing into a Eurodollar
Borrowing or to continue any Eurodollar Borrowing as a Eurodollar Borrowing for
an additional Interest Period, and (c) not later than 12:00 (noon), New York
City time, three Business Days prior to conversion, to convert the Interest
Period with respect to any Eurodollar Borrowing to another permissible Interest
Period, subject in each case to the following:
(i) each conversion or continuation shall be made pro rata
among the Lenders in accordance with the respective principal amounts
of the Loans comprising the converted or continued Borrowing;
(ii) if less than all the outstanding principal amount of any
Borrowing shall be converted or continued, then each resulting
Borrowing shall satisfy the limitations specified in Sections 2.02(a)
and 2.02(b) regarding the principal amount and maximum number of
Borrowings of the relevant Type;
(iii) each conversion shall be effected by each Lender and the
Administrative Agent by recording for the account of such Lender the
new Type and/or Interest Period for such Borrowing resulting from such
conversion; accrued interest on any Eurodollar Loan (or portion
thereof) being converted shall be paid by the Borrower at the time of
conversion;
30
(iv) if any Eurodollar Borrowing is converted at a time other
than the end of the Interest Period applicable thereto, the Borrower
shall pay, upon demand, any amounts due to the Lenders pursuant to
Section 2.16;
(v) any portion of a Borrowing maturing or required to be
repaid in less than one month may not be converted into or continued as
a Eurodollar Borrowing;
(vi) any portion of a Eurodollar Borrowing that cannot be
converted into or continued as a Eurodollar Borrowing by reason of the
immediately preceding clause shall be automatically converted at the
end of the Interest Period in effect for such Borrowing into an ABR
Borrowing;
(vii) no Interest Period may be selected for any Eurodollar
Term Borrowing that would end later than a Repayment Date occurring on
or after the first day of such Interest Period if, after giving effect
to such selection, the aggregate outstanding amount of (A) the
Eurodollar Term Borrowings with Interest Periods ending on or prior to
such Repayment Date and (B) the ABR Term Borrowings would not be at
least equal to the principal amount of Term Borrowings to be paid on
such Repayment Date; and
(viii) upon notice to the Borrower from the Administrative
Agent given at the request of the Required Lenders, after the
occurrence and during the continuance of a Default or Event of Default,
no outstanding Loan may be converted into, or continued as, a
Eurodollar Loan.
Each notice pursuant to this Section 2.10 shall be irrevocable and
shall refer to this Agreement and specify (i) the identity and amount of the
Borrowing that the Borrower requests be converted or continued, (ii) whether
such Borrowing is to be converted to or continued as a Eurodollar Borrowing or
an ABR Borrowing, (iii) if such notice requests a conversion, the date of such
conversion (which shall be a Business Day) and (iv) if such Borrowing is to be
converted to or continued as a Eurodollar Borrowing, the Interest Period with
respect thereto. If no Interest Period is specified in any such notice with
respect to any conversion to or continuation as a Eurodollar Borrowing, the
Borrower shall be deemed to have selected an Interest Period of one month's
duration. The Administrative Agent shall advise the Lenders of any notice given
pursuant to this Section 2.10 and of each Lender's portion of any converted or
continued Borrowing. If the Borrower shall not have given notice in accordance
with this Section 2.10 to continue any Eurodollar Borrowing into a subsequent
Interest Period (and shall not otherwise have given notice in accordance with
this Section 2.10 to convert such Borrowing), such Borrowing shall, at the end
of the Interest Period applicable thereto (unless repaid pursuant to the terms
hereof), automatically be converted into an ABR Borrowing.
SECTION 2.11. Repayment of Term Borrowings. (a) (i) The Borrower shall
pay to the Administrative Agent, for the account of the Lenders, on the dates
set forth below, or if any such date is not a Business Day, on the next
preceding Business Day (each such date being called a "Repayment Date"), a
principal amount of the Term Loans (as adjusted from time to time pursuant to
Sections 2.11(b), 2.12, 2.13(f) and 2.24(d)) equal to the amount set forth below
for such date, together in each case with accrued and unpaid interest on the
principal amount to be paid to but excluding the date of such payment:
31
Repayment Date Amount
-------------- ------
September 30, 2002 $612,500
December 31, 2002 $612,500
March 31, 2003 $612,500
June 30, 2003 $612,500
September 30, 2003 $612,500
December 31, 2003 $612,500
March 31, 2004 $612,500
June 30, 2004 $612,500
September 30, 2004 $612,500
December 31, 2004 $612,500
March 31, 2005 $612,500
June 30, 2005 $612,500
September 30, 2005 $612,500
December 31, 2005 $612,500
March 31, 2006 $612,500
June 30, 2006 $612,500
September 30, 2006 $612,500
December 31, 2006 $612,500
March 31, 2007 $612,500
June 30, 2007 $612,500
September 30, 2007 $612,500
December 31, 2007 $612,500
March 31, 2008 $612,500
June 30, 2008 $612,500
September 30, 2008 $57,575,000
December 31, 2008 $57,575,000
March 31, 2009 $57,575,000
Term Loan Maturity Date $57,575,000
(ii) The Borrower shall pay to the Administrative Agent, for the
account of the Lenders, on each Incremental Term Loan Repayment Date, a
principal amount of the Other Term Loans (as adjusted from time to time pursuant
to Sections 2.11(b), 2.12 and 2.13(f)) equal to the amount set forth for such
date in the applicable Incremental Term Loan Assumption Agreement, together in
each case with accrued and unpaid interest on the principal amount to be paid to
but excluding the date of such payment.
(b) In the event and on each occasion that any Term Loan Commitments
shall be reduced or shall expire or terminate other than as a result of the
making of a Term Loan, the installments payable on each Repayment Date shall be
reduced pro rata by an aggregate amount equal to the amount of such reduction,
expiration or termination.
(c) To the extent not previously paid, all Term Loans and Other Term
Loans shall be due and payable on the Term Loan Maturity Date and the applicable
Incremental Term Loan Maturity Date, respectively, together with accrued and
unpaid interest on the principal amount to be paid to but excluding the date of
payment.
(d) All repayments pursuant to this Section 2.11 shall be subject to
Section 2.16, but shall otherwise be without premium or penalty.
SECTION 2.12. Prepayment. (a) The Borrower shall have the right at any
time and from time to time to prepay any Borrowing (other than a prepayment of
Swingline Loans), in whole or in part, upon at least three Business Days' prior
written or fax notice (or
32
telephone notice promptly confirmed by written or fax notice) in the case of
Eurodollar Loans, or written or fax notice (or telephone notice promptly
confirmed by written or fax notice) at least one Business Day prior to the date
of prepayment in the case of ABR Loans, to the Administrative Agent before 12:00
(noon), New York City time; provided, however, that each partial prepayment
(other than a prepayment of Swingline Loans) shall be in an amount that is an
integral multiple of $500,000 and not less than $2,500,000.
(b) Optional prepayments of Term Loans shall be applied pro rata
against the remaining scheduled installments of principal due in respect of the
Term Loans.
(c) Each notice of prepayment shall specify the prepayment date and the
principal amount of each Borrowing (or portion thereof) to be prepaid, shall be
irrevocable and shall commit the Borrower to prepay such Borrowing by the amount
stated therein on the date stated therein. All prepayments under this Section
2.12 shall be subject to Section 2.16 but otherwise without premium or penalty.
All prepayments of Eurodollar Loans under this Section 2.12 shall be accompanied
by accrued interest on the principal amount being prepaid to the date of
payment.
SECTION 2.13. Mandatory Prepayments. (a) In the event of any
termination of all the Revolving Credit Commitments, the Borrower shall, on the
date of such termination, repay or prepay all its outstanding Revolving Credit
Borrowings and all outstanding Swingline Loans and replace all outstanding
Revolving Facility Letters of Credit and/or deposit an amount equal to the
Revolving Facility L/C Exposure in cash in a cash collateral account established
with the Collateral Agent for the benefit of the Secured Parties. In the event
of any partial reduction of the Revolving Credit Commitments, then (i) at or
prior to the effective date of such reduction, the Administrative Agent shall
notify the Borrower and the Revolving Credit Lenders of the Aggregate Revolving
Credit Exposure after giving effect thereto and (ii) if the Aggregate Revolving
Credit Exposure would exceed the Total Revolving Credit Commitment after giving
effect to such reduction or termination, then the Borrower shall, on the date of
such reduction or termination, repay or prepay Revolving Credit Borrowings or
Swingline Loans (or a combination thereof) and/or replace or cash collateralize
outstanding Revolving Facility Letters of Credit in an amount sufficient to
eliminate such excess. In the event of any termination of all the Letter of
Credit Facility Commitments, the Borrower shall, on the date of such
termination, repay or prepay all its outstanding Letter of Credit Facility Loans
and replace all outstanding Letter of Credit Facility Letters of Credit and/or
deposit an amount equal to the Letter of Credit Facility L/C Exposure in cash in
a cash collateral account established with the Collateral Agent for the benefit
of the Secured Parties. In the event of any partial reduction of the Letter of
Credit Facility Commitments, then (i) at or prior to the effective date of such
reduction, the Administrative Agent shall notify the Borrower and the Letter of
Credit Facility Lenders of the aggregate amount of the outstanding Letter of
Credit Facility Loans and the Letter of Credit Facility L/C Exposure after
giving effect thereto and (ii) if such aggregate amount would exceed the
aggregate amount of the Letter of Credit Facility Commitments after giving
effect to such reduction or termination, then the Borrower shall, on the date of
such reduction or termination, repay or prepay Letter of Credit Facility Loans
and/or replace or cash collateralize outstanding Letter of Credit Facility
Letters of Credit in an amount sufficient to eliminate such excess.
(b) Not later than the third Business Day following the completion of
any Asset Sale, the Borrower shall apply 100% of the Net Cash Proceeds received
with respect thereto to prepay outstanding Term Loans in accordance with Section
2.13(f); provided, however, that the prepayment required by this Section 2.13(b)
shall equal the Special Prepayment Amount if such Asset Sale shall be a Special
Disposition.
33
(c) In the event and on each occasion that an Equity Issuance occurs,
the Borrower shall, substantially simultaneously with (and in any event not
later than the third Business Day next following) the occurrence of such Equity
Issuance, apply 50% of the Net Cash Proceeds therefrom to prepay outstanding
Term Loans in accordance with Section 2.13(f).
(d) No later than the earlier of (i) 90 days after the end of each
fiscal year of the Borrower, commencing with the portion of the fiscal year
ending on or around January 1, 2003 (or if the Borrower shall have changed its
fiscal year as permitted by Section 6.14, the fiscal year ending on or around
July 2, 2003), and (ii) the third Business Day following the date on which the
financial statements with respect to such period are delivered pursuant to
Section 5.04(a), the Borrower shall prepay outstanding Term Loans in accordance
with Section 2.13(f) in an aggregate principal amount equal to 75% of Excess
Cash Flow for the fiscal year then ended minus voluntary prepayments of Term
Loans during such fiscal year pursuant to Section 2.12(b); provided, however,
that such percentage shall be reduced to 50% for any year if the Leverage Ratio
at the end of such year shall have been less than 3.0 to 1.0.
(e) In the event that any Loan Party or any subsidiary of a Loan Party
shall receive Net Cash Proceeds from the issuance or other disposition of
Indebtedness for money borrowed of any Loan Party or any subsidiary of a Loan
Party (other than Indebtedness for money borrowed permitted pursuant to Section
6.01), the Borrower shall, substantially simultaneously with (and in any event
not later than the third Business Day next following) the receipt of such Net
Cash Proceeds by such Loan Party or such subsidiary, apply an amount equal to
100% of such Net Cash Proceeds to prepay outstanding Term Loans in accordance
with Section 2.13(f).
(f) Mandatory prepayments of outstanding Term Loans under this
Agreement shall be applied pro rata against the remaining scheduled installments
of principal due in respect of the Term Loans under Section 2.11.
(g) The Borrower shall deliver to the Administrative Agent, at the time
of each pre payment required under this Section 2.13, (i) a certificate signed
by a Financial Officer of the Borrower setting forth in reasonable detail the
calculation of the amount of such prepayment and (ii) to the extent practicable,
at least three days prior written notice of such prepayment. Each notice of
prepayment shall specify the prepayment date, the Type of each Loan being
prepaid and the principal amount of each Loan (or portion thereof) to be
prepaid. All pre payments of Borrowings under this Section 2.13 shall be subject
to Section 2.16, but shall otherwise be without premium or penalty.
SECTION 2.14. Reserve Requirements; Change in Circumstances. (a)
Notwithstanding any other provision of this Agreement, if any Change in Law
shall impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of or credit
extended by any Lender or the Issuing Bank (except any such reserve requirement
which is reflected in the Adjusted LIBO Rate) or shall impose on such Lender or
the Issuing Bank or the London interbank market any other condition affecting
this Agreement or Eurodollar Loans made by such Lender or any Letter of Credit
or participation therein, and the result of any of the foregoing shall be to
increase the cost to such Lender or the Issuing Bank of making or maintaining
any Eurodollar Loan or increase the cost to any Lender of issuing or maintaining
any Letter of Credit or purchasing or maintaining a participation therein or to
reduce the amount of any sum received or receivable by such Lender or the
Issuing Bank hereunder (whether of principal, interest or otherwise), in each
case, by an amount deemed by such Lender or the Issuing Bank to be material,
then the Borrower will pay to such Lender or the Issuing Bank, as the case may
be, upon demand in accordance with paragraph (c) below such additional amount or
amounts as will compensate such Lender or the Issuing Bank, as the case may be,
for such additional costs incurred or reduction suffered.
34
(b) If any Lender or the Issuing Bank shall have determined that any
Change in Law regarding capital adequacy has or would have the effect of
reducing the rate of return on such Lender's or the Issuing Bank's capital or on
the capital of such Lender's or the Issuing Bank's holding company, if any, as a
consequence of this Agreement or the Loans made or participations in Letters of
Credit purchased by such Lender pursuant hereto or the Letters of Credit issued
by the Issuing Bank pursuant hereto to a level below that which such Lender or
the Issuing Bank or such Lender's or the Issuing Bank's holding company could
have achieved but for such Change in Law (taking into consideration such
Lender's or the Issuing Bank's policies and the policies of such Lender's or the
Issuing Bank's holding company with respect to capital adequacy) by an amount
deemed by such Lender or the Issuing Bank to be material, then from time to time
in accordance with paragraph (c) below the Borrower shall pay to such Lender or
the Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or the Issuing Bank or such Lender's or the Issuing
Bank's holding company for any such reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting forth the
amount or amounts necessary to compensate such Lender or the Issuing Bank or its
holding company, as applicable, as specified in paragraph (a) or (b) above,
together with supporting documentation or computations in each case in
reasonable detail, shall be delivered to the Borrower and shall be conclusive
absent manifest error. The Borrower shall pay such Lender or the Issuing Bank
the amount shown as due on any such certificate delivered by it within 10 days
after its receipt of the same.
(d) Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation for any increased costs or reduction in amounts received or
receivable or reduction in return on capital shall not constitute a waiver of
such Lender's or the Issuing Bank's right to demand such compensation; provided
that the Borrower shall not be under any obligation to compensate any Lender or
the Issuing Bank under paragraph (a) or (b) above with respect to increased
costs or reductions with respect to any period prior to the date that is 120
days prior to such request if such Lender or the Issuing Bank knew or could
reasonably have been expected to know of the circumstances giving rise to such
increased costs or reductions and of the fact that such circumstances would
result in a claim for increased compensation by reason of such increased costs
or reductions; provided further that the foregoing limitation shall not apply to
any increased costs or reductions arising out of the retroactive application of
any Change in Law within such 120-day period. The protection of this Section
shall be available to each Lender and the Issuing Bank regardless of any
possible contention of the invalidity or inapplicability of the Change in Law
that shall have occurred or been imposed.
SECTION 2.15. Change in Legality. (a) Notwithstanding any other
provision of this Agreement, if any Change in Law shall make it unlawful for any
Lender to make or maintain any Eurodollar Loan or to give effect to its
obligations as contemplated hereby with respect to any Eurodollar Loan, then, by
written notice to the Borrower and to the Administrative Agent:
(i) such Lender may declare that Eurodollar Loans will not
thereafter (for the duration of such unlawfulness) be made by such
Lender hereunder (or be continued for additional Interest Periods and
ABR Loans will not thereafter (for such duration) be converted into
Eurodollar Loans), whereupon any request for a Eurodollar Borrowing (or
to convert an ABR Borrowing to a Eurodollar Borrowing or to continue a
Eurodollar Borrowing for an additional Interest Period) shall, as to
such Lender only, be deemed a request for an ABR Loan (or a request to
continue an ABR Loan as such or to convert a Eurodollar Loan into an
ABR Loan, as the case may be), unless such declaration shall be
subsequently withdrawn (which such Lender agrees to do as promptly as
practicable after circumstances allow); and
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(ii) such Lender may require that all outstanding Eurodollar
Loans made by it be converted to ABR Loans, in which event all such
Eurodollar Loans shall be automatically converted to ABR Loans as of
the effective date of such notice as provided in paragraph (b) below.
In the event any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal that would otherwise have been applied to
repay the Eurodollar Loans that would have been made by such Lender or the
converted Eurodollar Loans of such Lender shall instead be applied to repay the
ABR Loans made by such Lender in lieu of, or resulting from the conversion of,
such Eurodollar Loans.
(b) For purposes of this Section 2.15, a notice to the Borrower by any
Lender shall be effective as to each Eurodollar Loan made by such Lender, if
lawful, on the last day of the Interest Period then applicable to such
Eurodollar Loan; in all other cases such notice shall be effective on the date
of receipt by the Borrower.
SECTION 2.16. Indemnity. The Borrower shall indemnify each Lender
against any loss or expense (other than any loss of margin over funding cost or
anticipated profit) that such Lender may sustain or incur as a consequence of
(a) any event, other than a default by such Lender in the performance of its
obligations hereunder, which results in (i) such Lender receiving or being
deemed to receive any amount on account of the principal of any Eurodollar Loan
prior to the end of the Interest Period in effect therefor, (ii) the conversion
of any Eurodollar Loan to an ABR Loan, or the conversion of the Interest Period
with respect to any Eurodollar Loan, in each case other than on the last day of
the Interest Period in effect therefor, or (iii) any Eurodollar Loan to be made
by such Lender (including any Eurodollar Loan to be made pursuant to a
conversion or continuation under Section 2.10) not being made after notice of
such Loan shall have been given by the Borrower hereunder (any of the events
referred to in this clause (a) being called a "Breakage Event") or (b) any
default in the making of any payment or prepayment required to be made
hereunder. In the case of any Breakage Event, such loss shall include an amount
equal to the excess, as reasonably determined by such Lender, of (i) its cost of
obtaining funds for the Eurodollar Loan that is the subject of such Breakage
Event for the period from the date of such Breakage Event to the last day of the
Interest Period in effect (or that would have been in effect) for such Loan over
(ii) the amount of interest likely to be realized by such Lender in redeploying
the funds released or not utilized by reason of such Breakage Event for such
period. A certificate of any Lender in reasonable detail with supporting
calculations setting forth any amount or amounts which such Lender is entitled
to receive pursuant to this Section 2.16 shall be delivered to the Borrower and
shall be conclusive absent manifest error.
SECTION 2.17. Pro Rata Treatment. Except as provided below in this
Section 2.17 with respect to Swingline Loans and as required under Section 2.15,
each Borrowing, each payment or prepayment of principal of any Borrowing, each
payment of interest on the Loans, each payment of the Commitment Fees and the
Letter of Credit Facility Commitment Fees, each reduction of the Term Loan
Commitments, the Incremental Term Loan Commitments (if any), the Revolving
Credit Commitments or the Letter of Credit Facility Commitments and each
conversion of any Borrowing to or continuation of any Borrowing as a Borrowing
of any Type shall be allocated pro rata among the Lenders in accordance with
their respective applicable Commitments (or, if such Commitments shall have
expired or been terminated, in accordance with the respective principal amounts
of their outstanding Loans or participations in L/C Disbursements, as
applicable). For purposes of determining the available Revolving Credit
Commitments of the Lenders at any time, each outstanding Swingline Loan shall be
deemed to have utilized the Revolving Credit Commitments of the Lenders
(including those Lenders which shall not have made Swingline Loans) pro rata in
accordance with such respective Revolving Credit Commitments. Each Lender agrees
that in computing such Lender's portion of any Borrowing to be made hereunder,
the
36
Administrative Agent may, in its discretion, round each Lender's percentage of
such Borrowing to the next higher or lower whole dollar amount.
SECTION 2.18. Sharing of Setoffs. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, setoff or counterclaim against
the Borrower or any other Loan Party, or pursuant to a secured claim under
Section 506 of Title 11 of the United States Code or other security or interest
arising from, or in lieu of, such secured claim, received by such Lender under
any applicable bankruptcy, insolvency or other similar law or otherwise, or by
any other means, obtain payment (voluntary or involuntary) in respect of any of
its Loans or participations in L/C Disbursements and accrued interest thereon as
a result of which the unpaid portion of its Loans or participations in L/C
Disbursements and accrued interest thereon shall be proportionately less than
the unpaid portion of the Loans and participations in L/C Disbursements and
accrued interest thereon of any other Lender, it shall be deemed simultaneously
to have purchased from such other Lender at face value, and shall promptly pay
to such other Lender the purchase price for, a participation in the Loans and
participations in L/C Disbursements and accrued interest thereon of such other
Lender, so that the benefit of all such payments shall be shared by the Lenders
ratably in accordance with the aggregate amount of the principal of and accrued
interest on their respective Loans and participations in L/C Disbursements;
provided, however, that if any such purchase or purchases or adjustments shall
be made pursuant to this Section 2.18 and the payment giving rise thereto shall
thereafter be recovered, such purchase or purchases or adjustments shall be
rescinded to the extent of such recovery and the purchase price or prices or
adjustment restored without interest. The Borrower expressly consents to the
foregoing arrangements and agrees that any Lender acquiring a participation
pursuant to the foregoing arrangements may exercise any and all rights of
banker's lien, setoff or counterclaim with respect to any and all moneys owing
by the Borrower to such Lender by reason thereof as fully as if such Lender were
a direct creditor of the Borrower in the amount of such participation.
SECTION 2.19. Payments. (a) The Borrower shall make each payment
(including principal of or interest on any Borrowing or any L/C Disbursement or
any Fees or other amounts) hereunder and under any other Loan Document not later
than 1:00 p.m., New York City time, on the date when due in immediately
available dollars, without setoff, defense or counterclaim. Each such payment
(other than (i) Issuing Bank Fees, which shall be paid directly to the Issuing
Bank, and (ii) principal of and interest on Swingline Loans, which shall be paid
directly to the Swingline Lender except as otherwise provided in Section
2.21(e)) shall be made to the Administrative Agent at its offices at Eleven
Madison Avenue, New York, New York.
(b) Except as otherwise expressly provided herein, whenever any payment
(including principal of or interest on any Borrowing or any Fees or other
amounts) hereunder or under any other Loan Document shall become due, or
otherwise would occur, on a day that is not a Business Day, such payment may be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of interest or Fees, if applicable.
SECTION 2.20. Taxes. (a) Any and all payments by or on account of any
obligation of the Borrower or any Loan Party hereunder or under any other Loan
Document shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes; provided that if the Borrower or any Loan
Party shall be required to deduct any Indemnified Taxes or Other Taxes from such
payments, then (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section) the Administrative Agent or such Lender (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrower or such Loan Party shall make such
deductions and
37
(iii) the Borrower or such Loan Party shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent and each
Lender, within 10 days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by the Administrative Agent or such
Lender, as the case may be, on or with respect to any payment by or on account
of any obligation of the Borrower or any Loan Party hereunder or under any other
Loan Document (including Indemnified Taxes or Other Taxes imposed or asserted on
or attributable to amounts payable under this Section) and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority. A certificate as to
the amount of such payment or liability delivered to the Borrower by a Lender,
or by the Administrative Agent on its behalf or on behalf of a Lender, shall be
conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Borrower or any other Loan Party to a Governmental Authority,
the Borrower shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Borrower (with a
copy to the Administrative Agent), on or prior to the Closing Date, or in the
case of a Lender that is an assignee or transferee of an interest under this
Credit Agreement pursuant to Section 9.04 (unless the Lender was already a
Lender hereunder immediately prior to such assignment or transfer), on the date
of such assignment or transfer to such Lender, such accurate, properly completed
and executed documentation prescribed by applicable law or reasonably requested
by the Borrower as will permit such payments to be made without withholding or
at a reduced rate. In addition, each Lender agrees that from time to time after
the Closing Date, when a lapse in time or change in circumstances renders the
previous certification obsolete or inaccurate in any material respect, it will
deliver to the Borrower and the Administrative Agent new accurate, properly
completed and executed documentation prescribed by applicable law or as may be
required in order to confirm or establish the entitlement of such Lender to a
continued exemption from or reduction in United States withholding tax with
respect to payments under this Agreement, or it shall immediately notify the
Borrower and the Administrative Agent of its inability to deliver any such
documentation, in which case such Lender shall not be required to deliver any
such documentation, pursuant to this Section 2.20(e). Notwithstanding anything
to the contrary contained in this Section 2.20 but subject to Section 9.04 and
the immediately succeeding sentence, (x) the Borrower shall be entitled, to the
extent it is required to do so by law, to deduct or withhold income or similar
taxes imposed by the United States (or any political subdivision or taxing
authority thereof or therein) from interest, fees or other amounts payable
hereunder for the account of any Lender which is a Foreign Lender to the extent
that such Lender has not provided to the Borrower accurate, properly completed
and executed documentation that establishes a complete exemption from such
deduction or withholding (the "Exemption Documentation") and (y) the Borrower
shall not be obligated pursuant to Section 2.20 to make any additional payments
to a Lender pursuant to Section 2.20(a), 2.20(b) or 2.20(c), as the case may be
(the "Gross-Up Payments") if such Lender has not provided to the Borrower the
Exemption Documentation
38
required to be provided to the Borrower pursuant to this Section 2.20(e).
Notwithstanding anything to the contrary contained in the preceding sentence or
elsewhere in this Section 2.20 and except as set forth in Section 9.04, the
Borrower agrees to pay additional amounts and to indemnify each Lender in the
manner set forth in Sections 2.20(a), 2.20(b) and 2.20(c) (without regard to the
identity of the jurisdiction requiring the deduction or withholding) in respect
of any Taxes deducted or withheld by it as described in the immediately
preceding sentence as a result of any Change in Law relating to the deducting or
withholding of such Taxes.
(f) If the Borrower pays any additional amount under this Section 2.20
to a Lender and such Lender determines in its sole discretion that it has
actually received or realized in connection therewith any refund or any
reduction of, or credit against, its Tax liabilities in or with respect to the
taxable year in which the additional amount is paid, such Lender shall pay to
the Borrower an amount that the Lender shall, in its sole discretion, determine
is equal to the net benefit, after tax, which was obtained by the Lender in such
year as a consequence of such refund, reduction or credit.
SECTION 2.21. Assignment of Commitments Under Certain Circumstances;
Duty to Mitigate. (a) In the event (i) any Lender or the Issuing Bank delivers a
certificate requesting compensation pursuant to Section 2.14, (ii) any Lender or
the Issuing Bank delivers a notice described in Section 2.15, (iii) the Borrower
is required to pay any additional amount to any Lender or the Issuing Bank or
any Governmental Authority on account of any Lender or the Issuing Bank pursuant
to Section 2.20 or (iv) any Lender refuses to consent to any amendment, waiver
or other modification of any Loan Document requested by the Borrower that
requires the consent of a greater percentage of the Lenders than the Required
Lenders and such amendment, waiver or other modification is consented to by the
Required Lenders, the Borrower may, at its sole expense and effort (including
with respect to the processing and recordation fee referred to in Section
9.04(b)), upon notice to such Lender or the Issuing Bank and the Administrative
Agent, require such Lender or the Issuing Bank to transfer and assign, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all of its interests, rights and obligations under this Agreement
to an assignee that shall assume such assigned obligations (which assignee may
be another Lender, if a Lender accepts such assignment); provided that (x) such
assignment shall not conflict with any law, rule or regulation or order of any
court or other Governmental Authority having jurisdiction, (y) the Borrower
shall have received the prior written consent of the Administrative Agent (and,
if a Revolving Credit Commitment is being assigned, of the Issuing Bank and the
Swingline Lender), which consent shall not unreasonably be withheld, and (z) the
Borrower or such assignee shall have paid to the affected Lender or the Issuing
Bank in immediately available funds an amount equal to the sum of the principal
of and interest accrued to the date of such payment on the outstanding Loans or
L/C Disbursements of such Lender or the Issuing Bank, respectively, plus all
Fees and other amounts accrued for the account of such Lender or the Issuing
Bank hereunder (including any amounts under Section 2.14 and Section 2.16);
provided further that, if prior to any such transfer and assignment the
circumstances or event that resulted in such Lender's or the Issuing Bank's
claim for compensation under Section 2.14 or notice under Section 2.15 or the
amounts paid pursuant to Section 2.20, as the case may be, cease to cause such
Lender or the Issuing Bank to suffer increased costs or reductions in amounts
received or receivable or reduction in return on capital, or cease to have the
consequences specified in Section 2.15, or cease to result in amounts being
payable under Section 2.20, as the case may be (including as a result of any
action taken by such Lender or the Issuing Bank pursuant to paragraph (b)
below), or if such Lender or the Issuing Bank shall waive its right to claim
further compensation under Section 2.14 in respect of such circumstances or
event or shall consent to the proposed amendment, waiver, consent or other
modification or shall withdraw its notice under Section 2.15 or shall waive its
right to further payments under Section 2.20 in respect of such circumstances or
event or shall consent to the proposed amendment, waiver,
39
consent or other modification, as the case may be, then such Lender or the
Issuing Bank shall not thereafter be required to make any such transfer and
assignment hereunder.
(b) If (i) any Lender or the Issuing Bank shall request compensation
under Section 2.14, (ii) any Lender or the Issuing Bank delivers a notice
described in Section 2.15 or (iii) the Borrower is required to pay any
additional amount to any Lender or the Issuing Bank or any Governmental
Authority on account of any Lender or the Issuing Bank, pursuant to Section
2.20, then such Lender or the Issuing Bank shall use reasonable efforts (which
shall not require such Lender or the Issuing Bank to incur an unreimbursed loss
or unreimbursed cost or expense or otherwise take any action inconsistent with
its internal policies or legal or regulatory restrictions or suffer any
disadvantage or burden deemed by it to be significant) (x) to file any
certificate or document reasonably requested in writing by the Borrower or (y)
to assign its rights and delegate and transfer its obligations hereunder to
another of its offices, branches or affiliates, if such filing or assignment
would reduce its claims for compensation under Section 2.14 or enable it to
withdraw its notice pursuant to Section 2.15 or would reduce amounts payable
pursuant to Section 2.20, as the case may be, in the future. The Borrower hereby
agrees to pay all reasonable costs and expenses incurred by any Lender or the
Issuing Bank in connection with any such filing or assignment, delegation and
transfer.
SECTION 2.22. Swingline Loans. (a) Swingline Commitment. Subject to the
terms and conditions and relying upon the representations and warranties herein
set forth, the Swingline Lender agrees to make loans to the Borrower at any time
and from time to time on and after the Closing Date and until the earlier of the
Revolving Credit Maturity Date and the termination of the Revolving Credit
Commitments in accordance with the terms hereof, in an aggregate principal
amount at any time outstanding that will not result in (i) the aggregate
principal amount of all Swingline Loans exceeding $10,000,000 in the aggregate,
(ii) the Revolving Credit Exposure of any Lender, after giving effect to any
Swingline Loan, exceeding such Lender's Revolving Credit Commitment, or (iii)
the Aggregate Revolving Credit Exposure, after giving effect to any Swingline
Loan, exceeding the Total Revolving Credit Commitment. Each Swingline Loan shall
be in a principal amount that is an integral multiple of $250,000. The Swingline
Commitment may be terminated or reduced from time to time as provided herein.
Within the foregoing limits, the Borrower may borrow, pay or prepay and reborrow
Swingline Loans hereunder, subject to the terms, conditions and limitations set
forth herein.
(b) Swingline Loans. The Borrower shall notify the Swingline Lender by
fax, or by telephone (confirmed by fax), with a copy of such notice to the
Administrative Agent not later than 1:00 p.m., New York City time, on the day of
a proposed Swingline Loan. Such notice shall be delivered on a Business Day,
shall be irrevocable and shall refer to this Agreement and shall specify the
requested date (which shall be a Business Day) and amount of such Swingline
Loan. The Swingline Lender shall make each Swingline Loan available to the
Borrower by means of a credit to the general deposit account of the Borrower
with the Swingline Lender by 3:00 p.m. on the date such Swingline Loan is so
requested.
(c) Prepayment. The Borrower shall have the right at any time and from
time to time to prepay any Swingline Loan, in whole or in part, upon giving
written or fax notice (or telephone notice promptly confirmed by written, or fax
notice) to the Swingline Lender and to the Administrative Agent before 12:00
(noon), New York City time on the date of prepayment at the Swingline Lender's
address for notices specified on Schedule 2.01. All principal payments of
Swingline Loans shall be accompanied by accrued interest on the principal amount
being repaid to the date of payment.
(d) Interest. Each Swingline Loan shall be an ABR Loan and, subject to
the provisions of Section 2.07, shall bear interest as provided in Section
2.06(a).
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(e) Participations. The Swingline Lender may by written notice given to
the Administrative Agent not later than 11:00 a.m., New York City time, on any
Business Day require the Revolving Credit Lenders to acquire participations on
such Business Day in all or a portion of the Swingline Loans outstanding. Such
notice shall specify the aggregate amount of Swingline Loans in which the
Revolving Credit Lenders will participate. The Administrative Agent will,
promptly upon receipt of such notice, give notice to each Revolving Credit
Lender, specifying in such notice such Lender's Revolving Facility Pro Rata
Percentage of such Swingline Loan or Loans. In furtherance of the foregoing,
each Revolving Credit Lender hereby absolutely and unconditionally agrees, upon
receipt of notice as provided above, to pay to the Administrative Agent, for the
account of the Swingline Lender, such Revolving Credit Lender's Revolving
Facility Pro Rata Percentage of such Swingline Loan or Loans. Each Revolving
Credit Lender acknowledges and agrees that its obligation to acquire
participations in Swingline Loans pursuant to this paragraph is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or an Event of Default,
and that each such payment shall be made without any offset, abatement,
withholding or reduction whatsoever. Each Revolving Credit Lender shall comply
with its obligation under this paragraph by wire transfer of immediately
available funds, in the same manner as provided in Section 2.02(c) with respect
to Loans made by such Lender (and Section 2.02(c) shall apply, mutatis mutandis,
to the payment obligations of the Lenders) and the Administrative Agent shall
promptly pay to the Swingline Lender the amounts so received by it from the
Lenders. The Administrative Agent shall notify the Borrower of any
participations in any Swingline Loan acquired pursuant to this paragraph and
thereafter payments in respect of such Swingline Loan shall be made to the
Administrative Agent and not to the Swingline Lender. Any amounts received by
the Swingline Lender from the Borrower (or other party on behalf of the
Borrower) in respect of a Swingline Loan after receipt by the Swingline Lender
of the proceeds of a sale of participations therein shall be promptly remitted
to the Administrative Agent; any such amounts received by the Administrative
Agent shall be promptly remitted by the Administrative Agent to the Lenders that
shall have made their payments pursuant to this paragraph and to the Swingline
Lender, as their interests may appear. The purchase of participations in a
Swingline Loan pursuant to this paragraph shall not relieve the Borrower (or
other party liable for obligations of the Borrower) of any default in the
payment thereof.
SECTION 2.23. Letters of Credit. (a) General. The Borrower may request
the issuance of a Letter of Credit for its own account or for the account of any
of its wholly owned Subsidiaries (in which case the Borrower and such wholly
owned Subsidiary shall be co-applicants with respect to such Letter of Credit),
in a form reasonably acceptable to the Administrative Agent and the Issuing
Bank, at any time and from time to time while the Revolving Credit Commitments
remain in effect. This Section shall not be construed to impose an obligation
upon the Issuing Bank to issue any Letter of Credit that is inconsistent with
the terms and conditions of this Agreement.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. In order to request the issuance of a Letter of Credit (or to amend,
renew or extend an existing Letter of Credit), the Borrower shall hand deliver
or fax to the Issuing Bank and the Administrative Agent (reasonably in advance
of the requested date of issuance, amendment, renewal or extension) a notice
requesting the issuance of a Letter of Credit, or identifying the Letter of
Credit to be amended, renewed or extended, whether such Letter of Credit shall
be a Revolving Facility Letter of Credit or a Letter of Credit Facility Letter
of Credit, the date of issuance, amendment, renewal or extension, the date on
which such Letter of Credit is to expire (which shall comply with paragraph (c)
below), the amount of such Letter of Credit, the name and address of the
beneficiary thereof and such other information as shall be necessary to prepare
such Letter of Credit. The Issuing Bank shall promptly (i) notify the
Administrative Agent in writing of the amount and expiry date of each Letter of
Credit issued
41
by it and (ii) provide a copy of each such Letter of Credit (and any amendments,
renewals or extensions thereof) to the Administrative Agent. A Revolving
Facility Letter of Credit shall be issued, amended, renewed or extended only if,
and upon issuance, amendment, renewal or extension of each such Letter of Credit
the Borrower shall be deemed to represent and warrant that, after giving effect
to such issuance, amendment, renewal or extension (i) the Revolving Facility L/C
Exposure shall not exceed $20,000,000 and (ii) the Aggregate Revolving Credit
Exposure shall not exceed the Total Revolving Credit Commitment. A Letter of
Credit Facility Letter of Credit shall be issued, amended, renewed or extended
only if, and upon issuance, amendment, renewal or extension of each such Letter
of Credit the Borrower shall be deemed to represent and warrant that, after
giving effect to such issuance, amendment, renewal or extension the sum of the
Letter of Credit Facility L/C Exposure and the outstanding Letter of Credit
Facility Loans shall not exceed $20,000,000. If the Borrower shall fail to
specify whether any requested Letter of Credit is to be a Revolving Facility
Letter of Credit or a Letter of Credit Facility Letter of Credit, then the
requested Letter of Credit shall be deemed to be a Letter of Credit Facility
Letter of Credit unless the issuance thereof would result in the sum of the
Letter of Credit Facility L/C Exposure and the outstanding Letter of Credit
Facility Loans exceeding $20,000,000, in which case it shall be deemed to be a
Revolving Facility Letter of Credit. All Existing Letters of Credit shall be
deemed to be Letter of Credit Facility Letters of Credit.
(c) Expiration Date. Each Letter of Credit shall expire at the close of
business on the earlier of the date one year after the date of the issuance of
such Letter of Credit and the date that is five Business Days prior to the
Revolving Credit Maturity Date, unless such Letter of Credit expires by its
terms on an earlier date; provided, that a Letter of Credit may, upon the
request of the Borrower, include a provision whereby such Letter of Credit shall
be renewed automatically for additional consecutive periods of 12 months or less
(but not beyond the date that is five Business Days prior to the Revolving
Credit Maturity Date) unless the Issuing Bank notifies the beneficiary thereof
at least 30 days prior to the then-applicable expiration date that such Letter
of Credit will not be renewed.
(d) Participations. By the issuance of a Letter of Credit and without
any further action on the part of the Issuing Bank or the Lenders, the Issuing
Bank hereby grants to each Revolving Credit Lender or Letter of Credit Facility
Lender, as the case may be, and each such Lender hereby acquires from the
Issuing Bank, a participation in such Letter of Credit equal to such Lender's
Revolving Facility Pro Rata Percentage or Letter of Credit Facility Pro Rata
Percentage, as applicable, of the aggregate amount available to be drawn under
such Letter of Credit, effective upon the issuance of such Letter of Credit (or,
in the case of the Existing Letters of Credit, effective upon the Closing Date).
In consideration and in furtherance of the foregoing, each Revolving Credit
Lender and Letter of Credit Facility Lender hereby absolutely and
unconditionally agrees to pay to the Administrative Agent, for the account of
the Issuing Bank, such Lender's Revolving Facility Pro Rata Percentage or Letter
of Credit Facility Pro Rata Percentage, as applicable, of each L/C Disbursement
made by the Issuing Bank and not reimbursed by the Borrower (or, if applicable,
another party pursuant to its obligations under any other Loan Document)
forthwith on the date due as provided in Section 2.02(f), in the case of
Revolving Facility Letters of Credit, or Section 2.02(g), in the case of Letter
of Credit Facility Letters of Credit. Each Revolving Credit Lender and Letter of
Credit Facility Lender acknowledges and agrees that its obligation to acquire
participations pursuant to this paragraph in respect of Letters of Credit is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including the occurrence and continuance of a Default or an Event of
Default, and that each such payment shall be made without any offset, abatement,
withholding or reduction whatsoever.
(e) Reimbursement. If the Issuing Bank shall make any L/C Disbursement
in respect of a Letter of Credit, then, subject to Section 2.02(f) in the case
of any Revolving Facility Letter of Credit, or Section 2.02(g) in the case of
any Letter of Credit Facility Letter of
42
Credit, the Borrower shall pay to the Administrative Agent an amount equal to
such L/C Disbursement on the same Business Day that the Borrower shall have
received notice from the Issuing Bank that payment of such draft will be made,
or, if the Borrower shall have received such notice later than 10:00 a.m., New
York City time, on any Business Day, not later than 10:00 a.m., New York City
time, on the immediately following Business Day.
(f) Obligations Absolute. The Borrower's obligations to reimburse L/C
Disbursements as provided in paragraph (e) above shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement, under any and all circumstances whatsoever,
and irrespective of:
(i) any lack of validity or enforceability of any Letter of
Credit or any Loan Document, or any term or provision therein;
(ii) any amendment or waiver of or any consent to departure
from all or any of the provisions of any Letter of Credit or any Loan
Document;
(iii) the existence of any claim, setoff, defense or other
right that the Borrower, any other party guaranteeing, or otherwise
obligated with, the Borrower, any Subsidiary or other Affiliate thereof
or any other person may at any time have against the beneficiary under
any Letter of Credit, the Issuing Bank, the Administrative Agent or any
Lender or any other person, whether in connection with this Agreement,
any other Loan Document or any other related or unrelated agreement or
transaction;
(iv) any draft or other document presented under a Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any
respect;
(v) payment by the Issuing Bank under a Letter of Credit
against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit; and
(vi) any other act or omission to act or delay of any kind of
the Issuing Bank, the Lenders, the Administrative Agent or any other
person or any other event or circumstance whatsoever, whether or not
similar to any of the foregoing, that might, but for the provisions of
this Section, constitute a legal or equitable discharge of the
Borrower's obligations hereunder.
Without limiting the generality of the foregoing, it is expressly
understood and agreed that the absolute and unconditional obligation of the
Borrower hereunder to reimburse L/C Disbursements will not be excused by the
gross negligence or wilful misconduct of the Issuing Bank. However, the
foregoing shall not be construed to excuse the Issuing Bank from liability to
the Borrower to the extent of any direct damages (as opposed to consequential
damages, claims in respect of which are hereby waived by the Borrower to the
extent permitted by applicable law) suffered by the Borrower that are caused by
the Issuing Bank's gross negligence or wilful misconduct in determining whether
drafts and other documents presented under a Letter of Credit comply with the
terms thereof; it is understood that the Issuing Bank may accept documents that
appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary and, in
making any payment under any Letter of Credit (i) the Issuing Bank's exclusive
reliance on the documents presented to it under such Letter of Credit as to any
and all matters set forth therein, including reliance on the amount of any draft
presented under such Letter of Credit, whether or not the amount due to the
beneficiary thereunder equals the amount of such draft and whether or not any
document presented pursuant to such Letter of Credit proves to be insufficient
in any respect, if such document on its face appears to be in order,
43
and whether or not any other statement or any other document presented pursuant
to such Letter of Credit proves to be forged or invalid or any statement therein
proves to be inaccurate or untrue in any respect whatsoever and (ii) any
noncompliance in any immaterial respect of the documents presented under such
Letter of Credit with the terms thereof shall, in each case, be deemed not to
constitute wilful misconduct or gross negligence of the Issuing Bank.
(g) Disbursement Procedures. The Issuing Bank shall, promptly following
its receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Issuing Bank shall as promptly as possible
give telephonic notification, confirmed by fax, to the Administrative Agent and
the Borrower of such demand for payment and whether the Issuing Bank has made or
will make an L/C Disbursement thereunder; provided that any failure to give or
delay in giving such notice shall not relieve the Borrower of its obligation to
reimburse the Issuing Bank and the Revolving Credit Lenders with respect to any
such L/C Disbursement. The Administrative Agent shall promptly give each
Revolving Credit Lender notice thereof.
(h) Interim Interest. If the Issuing Bank shall make any L/C
Disbursement in respect of a Letter of Credit, then, unless the Borrower shall
reimburse such L/C Disbursement in full on such date, the unpaid amount thereof
shall bear interest for the account of the Issuing Bank, for each day from and
including the date of such L/C Disbursement, to but excluding the earlier of the
date of payment by the Borrower or the date on which interest shall commence to
accrue thereon as provided in Section 2.02(f) or 2.02(g), as applicable, at the
rate per annum that would apply to such amount if such amount were an ABR
Revolving Loan.
(i) Resignation or Removal of the Issuing Bank. The Issuing Bank may
resign at any time by giving 30 days' prior written notice to the Administrative
Agent, the Lenders and the Borrower, and may be removed at any time by the
Borrower by notice to the Issuing Bank, the Administrative Agent and the
Lenders. Subject to the next succeeding paragraph, upon the acceptance of any
appointment as the Issuing Bank hereunder by a Lender that shall agree to serve
as successor Issuing Bank, such successor shall succeed to and become vested
with all the interests, rights and obligations of the retiring Issuing Bank and
the retiring Issuing Bank shall be discharged from its obligations to issue
additional Letters of Credit hereunder. At the time such removal or resignation
shall become effective, the Borrower shall pay all accrued and unpaid fees
pursuant to Section 2.05(c)(iii). The acceptance of any appointment as the
Issuing Bank hereunder by a successor Lender shall be evidenced by an agreement
entered into by such successor, in a form satisfactory to the Borrower and the
Administrative Agent, and, from and after the effective date of such agreement,
(i) such successor Lender shall have all the rights and obligations of the
previous Issuing Bank under this Agreement and the other Loan Documents and (ii)
references herein and in the other Loan Documents to the term "Issuing Bank"
shall be deemed to refer to such successor or to any previous Issuing Bank, or
to such successor and all previous Issuing Banks, as the context shall require.
After the resignation or removal of the Issuing Bank hereunder, the retiring
Issuing Bank shall remain a party hereto and shall continue to have all the
rights and obligations of an Issuing Bank under this Agreement and the other
Loan Documents with respect to Letters of Credit issued by it prior to such
resignation or removal, but shall not be required to issue additional Letters of
Credit.
(j) Cash Collateralization. If any Event of Default shall occur and be
continuing, the Borrower shall, on the Business Day it receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Revolving Credit Lenders or Letter of Credit Facility
Lenders, as the case may be, holding participations in outstanding Letters of
Credit representing greater than 50% of the aggregate undrawn amount of all
outstanding Revolving Facility Letters of Credit or Letter of Credit Facility
Letters of
44
Credit, respectively) thereof and of the amount to be deposited, deposit in an
account with the Collateral Agent, for the benefit of the Revolving Credit
Lenders or Letter of Credit Facility Lenders, as the case may be, an amount in
cash equal to the Revolving Facility L/C Exposure or the Letter of Credit
Facility L/C Exposure, respectively, as of such date; provided, however that the
obligation to deposit such cash shall become effective immediately, and such
deposit shall become immediately due and payable, without demand or other notice
of any kind, upon the occurrence of any Event of Default with respect to the
Borrower described in clause (g) or (h) of Article VII. Such deposit shall be
held by the Collateral Agent as collateral for the payment and performance of
the Obligations. The Collateral Agent shall have exclusive dominion and control,
including the exclusive right of withdrawal, over such account. Other than any
interest earned on the investment of such deposits in Permitted Investments,
which investments shall be made at the option and sole discretion of the
Collateral Agent, such deposits shall not bear interest. Interest or profits, if
any, on such investments shall accumulate in such account. Moneys in such
account shall (i) automatically be applied by the Administrative Agent to
reimburse the Issuing Bank for L/C Disbursements for which it has not been
reimbursed, (ii) be held for the satisfaction of the reimbursement obligations
of the Borrower for the Revolving Facility L/C Exposure or the Letter of Credit
Facility L/C Exposure, as applicable, at such time and (iii) if the maturity of
the Loans has been accelerated (but subject to the consent of Revolving Credit
Lenders or Letter of Credit Facility Lenders, as applicable, holding
participations in outstanding Letters of Credit representing greater than 50% of
the aggregate undrawn amount of all outstanding Revolving Facility Letters of
Credit or Letters of Credit Facility Letters of Credit, respectively), be
applied to satisfy the Obligations. If the Borrower is required to provide an
amount of cash collateral hereunder as a result of the occurrence of an Event of
Default, such amount (to the extent not applied as aforesaid) shall be returned
to the Borrower within three Business Days after all Events of Default have been
cured or waived.
(k) Additional Issuing Banks. The Borrower may, at any time and from
time to time with the consent of the Administrative Agent (which consent shall
not be unreasonably withheld) and such Lender, designate, with respect to
Revolving Facility Letters of Credit only, one or more additional Lenders to act
as an issuing bank under the terms of this Agreement. Any Lender designated as
an issuing bank pursuant to this paragraph (k) shall be deemed to be an "Issuing
Bank" (in addition to being a Lender) in respect of Letters of Credit issued or
to be issued by such Lender, and, with respect to such Letters of Credit, such
term shall thereafter apply to the other Issuing Bank and such Lender.
SECTION 2.24. Increase in Term Loan Commitments. (a) The Borrower may,
by written notice to the Administrative Agent from time to time, request
Incremental Term Loan Commitments in an amount not to exceed the Incremental
Debt Amount from one or more Incremental Term Lenders, which may include any
existing Lender; provided that each Incremental Term Lender, if not already a
Lender hereunder, shall be subject to the approval of the Administrative Agent
(which approval shall not be unreasonably withheld). Such notice shall set forth
(i) the amount of the Incremental Term Loan Commitments being requested (which
shall be in minimum increments of $1,000,000 and a minimum amount of $5,000,000
or equal to the remaining Incremental Debt Amount), (ii) the date on which such
Incremental Term Loan Commitments are requested to become effective (which shall
not be less than 10 Business Days nor more than 60 days after the date of such
notice) and (iii) whether such Incremental Term Loan Commitments are to be Term
Loan Commitments or commitments to make term loans with terms different from the
Term Loans ("Other Term Loans").
(b) The Borrower and each Incremental Term Lender shall execute and
deliver to the Administrative Agent an Incremental Term Loan Assumption
Agreement and such other documentation as the Administrative Agent shall
reasonably specify to evidence the Incremental Term Loan Commitment of such
Incremental Term Lender. Each Incremental
45
Term Loan Assumption Agreement shall specify the terms of the Incremental Term
Loans to be made thereunder; provided that, without the prior written consent of
the Required Lenders, (i) the interest rate spreads in respect of any Other Term
Loans shall not exceed by more than 1/2 of 1% the Applicable Percentage for the
Term Loans, (ii) the final maturity date of any Other Term Loans shall be no
earlier than the Term Loan Maturity Date and (iii) the average life to maturity
of any Other Term Loans shall be no shorter than the average life to maturity of
the Term Loans. The Administrative Agent shall promptly notify each Lender as to
the effectiveness of each Incremental Term Loan Assumption Agreement. Each of
the parties hereto hereby agrees that, upon the effectiveness of any Incremental
Term Loan Assumption Agreement, this Agreement shall be deemed amended to the
extent (but only to the extent) necessary to reflect the existence and terms of
the Incremental Term Loan Commitment evidenced thereby. Any such deemed
amendment may be memorialized in writing by the Administrative Agent with the
Borrower's consent (not to be unreasonably withheld) and furnished to the other
parties hereto.
(c) Notwithstanding the foregoing, no Incremental Term Loan Commitment
shall become effective under this Section 2.24 unless (i) on the date of such
effectiveness, the conditions set forth in paragraphs (b) and (c) of Section
4.01 shall be satisfied and the Administrative Agent shall have received a
certificate to that effect dated such date and executed by a Financial Officer
of the Borrower, (ii) the Administrative Agent shall have received (with
sufficient copies for each of the Incremental Term Lenders) legal opinions,
board resolutions and other closing certificates and documentation consistent
with those delivered on the Closing Date under Section 4.02 and (iii) the
Leverage Ratio on such date, calculated on a Pro Forma Basis after giving effect
to such Incremental Term Loan Commitment and the Loans to be made thereunder and
the application of the proceeds therefrom as if made and applied on such date,
shall be at least 0.25 to 1.0 less than the maximum Leverage Ratio permitted
under Section 6.13 applicable at such time.
(d) Each of the parties hereto hereby agrees that the Administrative
Agent may take any and all action as may be reasonably necessary to ensure that
all Incremental Term Loans (other than Other Term Loans), when originally made,
are included in each Borrowing of outstanding Term Loans on a pro rata basis.
This may be accomplished at the discretion of the Administrative Agent by
requiring each outstanding Eurodollar Term Borrowing to be converted into an ABR
Term Borrowing on the date of each Incremental Term Loan, or by allocating a
portion of each Incremental Term Loan to each outstanding Eurodollar Term
Borrowing on a pro rata basis, even though as a result thereof such Incremental
Term Loan may effectively have a shorter Interest Period than the Term Loans
included in the Borrowing of which they are a part (and notwithstanding any
other provision of this Agreement that would prohibit such an initial Interest
Period). Any conversion of Eurodollar Term Loans to ABR Term Loans made pursuant
to the preceding sentence shall be subject to Section 2.16. If any Incremental
Term Loan is to be allocated to an existing Interest Period for a Eurodollar
Term Borrowing then, subject to Section 2.07, the interest rate applicable to
such Incremental Term Loan for the remainder of such Interest Period shall equal
the Adjusted LIBO Rate for a period approximately equal to the remainder of such
Interest Period (as determined by the Administrative Agent two Business Days
before the date such Incremental Term Loan is made) plus the Applicable
Percentage. In addition, to the extent any Incremental Term Loans are not Other
Term Loans, the scheduled amortization payments under Sections 2.11(a)(i)
required to be made after the making of such Incremental Term Loans shall be
ratably increased by the aggregate principal amount of such Incremental Term
Loans.
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ARTICLE III
Representations and Warranties
Each of Holdings and the Borrower represents and warrants to the
Administrative Agent, the Collateral Agent, the Issuing Bank and each of the
Lenders that:
SECTION 3.01. Organization; Powers. Holdings, the Borrower and each of
the Subsidiaries (a) is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (b) has all requisite
power and authority to own its property and assets and to carry on its business
as now conducted and as proposed to be conducted, (c) is qualified to do
business in, and is in good standing in, every jurisdiction where such
qualification is required, except where the failure so to qualify could not
reasonably be expected to result in a Material Adverse Effect, and (d) has the
power and authority to execute, deliver and perform its obligations under each
of the Loan Documents and each other agreement or instrument contemplated hereby
or thereby to which it is or will be a party and, in the case of the Borrower,
to borrow hereunder.
SECTION 3.02. Authorization. The Transactions (a) have been duly
authorized by all requisite corporate or other company and, if required,
stockholder, action on the part of each Loan Party and (b) will not (i) violate
(A) any material provision of law, statute, rule or regulation, or of the
certificate or articles of incorporation or other constitutive documents or
by-laws of Holdings, the Borrower or any Subsidiary, (B) any applicable order of
any Governmental Authority or (C) any provision of any indenture or any other
material agreement or other instrument to which Holdings, the Borrower or any
Subsidiary is a party or by which any of them or any of their property is or may
be bound, (ii) be in conflict with, result in a breach of or constitute (alone
or with notice or lapse of time or both) a default under, or give rise to any
right to accelerate or to require the prepayment, repurchase or redemption of
any obligation under any such indenture, agreement or other instrument or (iii)
result in the creation or imposition of any Lien upon or with respect to any
property or assets now owned or hereafter acquired by Holdings, the Borrower or
any Subsidiary (other than any Lien created hereunder or under the Security
Documents).
SECTION 3.03. Enforceability. This Agreement has been duly executed and
delivered by Holdings and the Borrower and constitutes, and each other Loan
Document when executed and delivered by each Loan Party thereto will constitute,
a legal, valid and binding obligation of such Loan Party enforceable against
such Loan Party in accordance with its terms, except as such enforceability may
be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization and
other similar laws relating to or affecting creditors' rights generally and
general equitable principles.
SECTION 3.04. Governmental Approvals. No action, consent or approval
of, registration or filing with or any other action by any Governmental
Authority is or will be required in connection with the Transactions, except for
(a) the filing of Uniform Commercial Code financing statements and filings with
the United States Patent and Trademark Office and the United States Copyright
Office, (b) recordation of any Mortgages, (c) such as have been made or obtained
and are in full force and effect and (d) such actions, consents, approvals,
registrations or filings, the failure of which to make or obtain could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 3.05. Financial Statements. (a) The Borrower has heretofore
furnished to the Lenders its consolidated balance sheets and related statements
of income, stockholders' equity and cash flows (i) as of and for (x) the fiscal
years ended on or around January 2, 2002 and December 29, 1999, (y) the three
fiscal months ended on or about January 3, 2001 and (z) the nine month period
ended on or about September 27, 2000, in
47
each case audited by and accompanied by the opinion of Deloitte & Touche LLP,
independent public accountants, and (ii) as of and for (A) the fiscal quarter
and the portion of the fiscal year ended on or around April 24, 2002 and (B)
each fiscal four week period after the most recent financial statements
furnished pursuant to the preceding clause (A) and ended 30 days prior to the
Closing Date, certified by its chief financial officer. Such financial
statements present fairly in all material respects the financial condition and
results of operations and cash flows of the Borrower and its consolidated
Subsidiaries as of such dates and for such periods. Such balance sheets and the
notes thereto disclose all material liabilities, direct or contingent, of the
Borrower and its consolidated Subsidiaries as of the dates thereof. Such
financial statements were prepared in accordance with GAAP (as applicable to
interim financial statements, in the case of such interim financial statements)
applied on a consistent basis.
(b) The Borrower has heretofore delivered to the Lenders its unaudited
pro forma consolidated balance sheet and related pro forma consolidated
statement of income as of and for the four fiscal quarters ended April 24, 2002,
prepared giving effect to the Transactions as if they had occurred, with respect
to such balance sheet, on such date and, with respect to such other financial
statements, on the first day of the four fiscal quarter period ending on such
date. Such pro forma financial statements have been prepared in good faith by
the Borrower, based on the assumptions used to prepare the pro forma financial
information contained in the Confidential Information Memorandum (which
assumptions at the time made were believed by the Borrower to be reasonable),
were based on the best information available to the Borrower as of the date of
delivery thereof, accurately reflect all adjustments required to be made to give
effect to the Transactions and present fairly in all material respects on a pro
forma basis the estimated consolidated financial position of the Borrower and
its consolidated Subsidiaries as of such date and for such period, assuming that
the Transactions had actually occurred at such date or at the beginning of such
period, as the case may be.
(c) The Borrower has heretofore delivered to the Lenders its unaudited
pro forma consolidated statement of income as of and for the year ended January
3, 2001, prepared giving effect to the acquisition by Holdings of 100% of the
Equity Interests of the Borrower and the financing therefor as if such
transactions had occurred on the first day of the one-year period ending on such
date. Such pro forma financial statements have been prepared in good faith by
the Borrower, based on the assumptions used to prepare the pro forma financial
information contained in the Confidential Information Memorandum (which
assumptions at the time made were believed by the Borrower to be reasonable),
were based on the best information available to the Borrower as of the date of
delivery thereof, accurately reflect all adjustments required to be made to give
effect to such transactions and present fairly in all material respects on a pro
forma basis the estimated consolidated financial position of the Borrower and
its consolidated Subsidiaries for such period, assuming that the such
transactions had actually occurred at the beginning of such period.
SECTION 3.06. No Material Adverse Change. No event, change or condition
has occurred that has had, or could reasonably be expected to have, a material
adverse effect on the business, assets, operations or condition, financial or
otherwise, of the Borrower and the Subsidiaries, taken as a whole, since January
2, 2002.
SECTION 3.07. Title to Properties; Possession Under Leases. (a) Each of
Holdings, the Borrower and each of the Subsidiaries has good and marketable
title to, or valid leasehold interests in, all its material properties and
assets (including any Mortgaged Property), except for minor defects in title
that do not interfere with its ability to conduct its business as currently
conducted or to utilize such properties and assets for their intended purposes.
All such material properties and assets are free and clear of Liens, other than
Liens expressly permitted by Section 6.02.
48
(b) Each of Holdings, the Borrower and each of the Subsidiaries has
complied with all obligations under all leases to which it is a party and all
such leases are in full force and effect except, in each case, for such
noncompliance or such failures to be in full force and effect that could not
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect. Each of Holdings, the Borrower and each of the
Subsidiaries enjoys peaceful and undisturbed possession under all such material
leases.
SECTION 3.08. Subsidiaries. Schedule 3.08 sets forth as of the Closing
Date a list of all Subsidiaries and the percentage ownership interest of
Holdings, the Borrower or any Subsidiary therein. The shares of Equity Interests
so indicated on Schedule 3.08 are fully paid and non-assessable and are owned by
Holdings, the Borrower or one of the Subsidiaries, directly or indirectly, free
and clear of all Liens (other than Liens created under the Security Documents).
SECTION 3.09. Litigation; Compliance with Laws. (a) Except as set forth
on Schedule 3.09, there are not any actions, suits or proceedings at law or in
equity or by or before any Governmental Authority now pending or, to the
knowledge of Holdings or the Borrower, threatened against or affecting Holdings
or the Borrower or any Subsidiary or any business, property or rights of any
such person (i) that involve any Loan Document or the Transactions or (ii) as to
which there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect.
(b) Since the date of this Agreement, there has been no change in the
status of the matters disclosed on Schedule 3.09 that, individually or in the
aggregate, has resulted in, or materially increased the likelihood of, a
Material Adverse Effect.
SECTION 3.10. Agreements. None of Holdings, the Borrower or any of the
Subsidiaries is in default in any manner under any provision of any indenture
or other agreement or instrument evidencing Indebtedness, or any other material
agreement or instrument to which it is a party or by which it or any of its
properties or assets are or may be bound, where such default could reasonably be
expected to result in a Material Adverse Effect.
SECTION 3.11. Federal Reserve Regulations. (a) None of Holdings, the
Borrower or any of the Subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
buying or carrying Margin Stock.
(b) No part of the proceeds of any Loan or any Letter of Credit will be
used, whether directly or indirectly, and whether immediately, incidentally or
ultimately, for any purpose that entails a violation of, or that is inconsistent
with, the provisions of the Regulations of the Board, including Regulation T, U
or X.
SECTION 3.12. Investment Company Act; Public Utility Holding Company
Act. None of Holdings, the Borrower or any Subsidiary is (a) an "investment
company" as defined in, or subject to regulation under, the Investment Company
Act of 1940 or (b) a "holding company" as defined in, or subject to regulation
under, the Public Utility Holding Company Act of 1935.
SECTION 3.13. Use of Proceeds. The Borrower will use the proceeds of
the Term Loans (other than any Incremental Term Loans) solely (a) to repay all
amounts outstanding or due under the Existing Credit Agreement, (b) to redeem
the Existing Holdings Notes and the Existing Subordinated Notes, and to pay
accrued interest thereon and prepayment penalties and premiums related thereto
and to redeem warrants under the Existing Notes Redemption Agreement, (c) to pay
the Closing Date Dividend and (d) to pay related fees and expenses. The Borrower
will use the proceeds of the Revolving Loans and the Swingline
49
Loans, and will request the issuance of Letters of Credit, solely for general
corporate purposes of the Borrower. The Borrower will use the proceeds of any
Incremental Term Loans solely as set forth in the applicable Incremental Term
Loan Assumption Agreement.
SECTION 3.14. Tax Returns. Each of the Holdings, the Borrower and each
of the Subsidiaries has filed or caused to be filed all Federal, state and
material, local and foreign tax returns or materials required to have been filed
by it and has paid or caused to be paid all material Taxes due and payable by it
and all material assessments received by it, except Taxes that are being
contested in good faith by appropriate proceedings and for which Holdings, the
Borrower or such Subsidiary, as applicable, shall have set aside on its books
adequate reserves.
SECTION 3.15. No Material Misstatements. None of (a) the Confidential
Information Memorandum or (b) any other information, report, financial
statement, exhibit or schedule furnished by or on behalf of Holdings or the
Borrower to the Administrative Agent or any Lender in connection with the
negotiation of any Loan Document or included therein or delivered pursuant
thereto, when taken as a whole, contained, contains or will contain any material
misstatement of fact or omitted, omits or will omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were, are or will be made, not misleading; provided that to the
extent any such information, report, financial statement, exhibit or schedule
was based upon or constitutes a forecast or projection, each of Holdings and the
Borrower represents only that it acted in good faith and utilized reasonable
assumptions and due care in the preparation of such information, report,
financial statement, exhibit or schedule.
SECTION 3.16. Employee Benefit Plans. Each of the Borrower and each of
its ERISA Affiliates is in compliance in all material respects with the
applicable provisions of ERISA and the Code and the regulations and published
interpretations thereunder. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events,
could reasonably be expected to result in material liability of the Borrower or
any of its ERISA Affiliates. The present value of all benefit liabilities under
each Plan (based on the assumptions used to fund such Plan) did not, as of the
last annual valuation date applicable thereto, exceed the fair market value of
the assets of such Plan by a material amount, and the present value of all
benefit liabilities of all underfunded Plans (based on the assumptions used to
fund such plan) did not, as of the last annual valuation dates applicable
thereto, exceed the fair market value of the assets of all such underfunded
Plans by a material amount.
SECTION 3.17. Environmental Matters. (a) Except as set forth in
Schedule 3.17 and except with respect to any other matters that, individually or
in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect, none of Holdings, the Borrower or any of the Subsidiaries (i)
has failed to comply with any Environmental Law or to obtain, maintain or comply
with any permit, license or other approval required under any Environmental Law,
(ii) has become subject to any Environmental Liability, (iii) has received
notice of any claim with respect to any Environmental Liability or (iv) knows of
any basis for any Environmental Liability.
(b) Since the date of this Agreement, there has been no change in the
status of the matters disclosed on Schedule 3.17 that, individually or in the
aggregate, has resulted in, or materially increased the likelihood of, a
Material Adverse Effect.
SECTION 3.18. Insurance. Schedule 3.18 sets forth a true, complete and
correct description of all insurance maintained by the Borrower or by the
Borrower for its Subsidiaries as of the date hereof and the Closing Date. As of
each such date, such insurance is in full force and effect and all premiums have
been duly paid. The Borrower and its
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Subsidiaries have insurance in such amounts and covering such risks and
liabilities as are in accordance with normal industry practice.
SECTION 3.19. Security Documents. (a) The Guarantee and Collateral
Agreement, upon execution and delivery by the parties thereto, will create in
favor of the Collateral Agent, for the ratable benefit of the Secured Parties, a
legal, valid and enforceable security interest in the Collateral (as defined in
the Guarantee and Collateral Agreement) and proceeds thereof and (i) when the
Pledged Collateral (as defined in the Guarantee and Collateral Agreement) is
delivered to the Collateral Agent, the Guarantee and Collateral Agreement shall
constitute a fully perfected first priority Lien on, and security interest in,
all right, title and interest of the Loan Parties thereto in such Pledged
Collateral, in each case prior and superior in right to any other person, and
(ii) when financing statements in appropriate form are filed in the offices
specified on Schedule 3.19(a), the Lien created under the Guarantee and
Collateral Agreement will constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the Loan Parties in such
Collateral (other than Intellectual Property, as defined in the Guarantee and
Collateral Agreement) to the extent such security interest may be perfected by
filing, in each case prior and superior in right to any other person, other than
with respect to Liens expressly permitted by Section 6.02.
(b) Upon the recordation of the Guarantee and Collateral Agreement with
the United States Patent and Trademark Office and the United States Copyright
Office, together with financing statements in appropriate form filed in the
offices specified on Schedule 3.19(a), the Liens created under the Guarantee and
Collateral Agreement shall constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the grantors thereunder in the
Intellectual Property (as defined in the Guarantee and Collateral Agreement) in
which a security interest may be perfected by filing in the United States and
its territories and possessions, in each case prior and superior in right to any
other person (it being understood that subsequent recordings in the United
States Patent and Trademark Office and the United States Copyright Office may be
necessary to perfect a Lien on registered trademarks, trademark applications and
copyrights acquired by the grantors after the date hereof).
SECTION 3.20. Location of Real Property and Leased Premises. Schedule
3.20(a) lists completely and correctly as of the Closing Date all real property
owned by the Borrower and the Subsidiaries and the addresses thereof. The
Borrower and the Subsidiaries, as the case may be, as of the Closing Date, own
in fee all the real property set forth on Schedule 3.20(a). Schedule 3.20(b)
lists completely and correctly as of the Closing Date all material real property
leased by the Borrower and the Subsidiaries and the addresses thereof. The
Borrower and the Subsidiaries, as the case may be, as of the Closing Date have
valid leasehold interests in all the real property set forth on Schedule
3.20(b).
SECTION 3.21. Labor Matters. As of the date hereof and the Closing
Date, there are no strikes, lockouts or slowdowns against Holdings, the Borrower
or any Subsidiary pending or, to the knowledge of Holdings or the Borrower,
threatened. The hours worked by and payments made to employees of Holdings, the
Borrower and the Subsidiaries have not been in violation of the Fair Labor
Standards Act or any other applicable Federal, state, local or foreign law
dealing with such matters, except for such violations that could not reasonably
be expected, individually or in the aggregate, to result in a Material Adverse
Effect. All payments due from Holdings, the Borrower or any Subsidiary, or for
which any claim may be made against Holdings, the Borrower or any Subsidiary, on
account of wages and employee health and welfare insurance and other benefits,
have been paid or accrued as a liability on the books of Holdings, the Borrower
or such Subsidiary, except for such failures that could not reasonably be
expected, individually or in the aggregate, to result in a Material Adverse
Effect. The consummation of the Transactions will not give rise to any
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right of termination or right of renegotiation on the part of any union under
any collective bargaining agreement to which Holdings, the Borrower or any
Subsidiary is bound.
SECTION 3.22. Solvency. Immediately after the consummation of the
Transactions to occur on the Closing Date and immediately following the making
of each Loan and after giving effect to the application of the proceeds of each
Loan, (a) the fair value of the assets of each Loan Party, at a fair valuation,
will exceed its debts and liabilities, subordinated, contingent or otherwise;
(b) the present fair saleable value of the property of each Loan Party will be
greater than the amount that will be required to pay the probable liability of
its debts and other liabilities, subordinated, contingent or otherwise, as such
debts and other liabilities become absolute and matured; (c) each Loan Party
will be able to pay its debts and liabilities, subordinated, contingent or
otherwise, as such debts and liabilities become absolute and matured; and (d)
each Loan Party will not have unreasonably small capital with which to conduct
the business in which it is engaged as such business is now conducted and is
proposed to be conducted following the Closing Date.
SECTION 3.23. Senior Indebtedness. The Obligations constitute "Senior
Indebtedness" under and as defined in the New Subordinated Note Documents and
the New Holdings Note Documents.
ARTICLE IV
Conditions of Lending
The obligations of the Lenders to make Loans and of the Issuing Bank to
issue Letters of Credit hereunder are subject to the satisfaction of the
following conditions:
SECTION 4.01. All Credit Events. On the date of each Borrowing,
including each Borrowing of a Swingline Loan but excluding the conversion of a
Eurodollar Borrowing to an ABR Borrowing or vice versa or the continuation or
conversion of the Interest Period of a Eurodollar Borrowing into another
permitted Interest Period, and on the date of each issuance, amendment,
extension or renewal of a Letter of Credit (each such event being called a
"Credit Event"):
(a) The Administrative Agent shall have received a notice of such
Borrowing as required by Section 2.03 (or such notice shall have been deemed
given in accordance with Section 2.03) or, in the case of the issuance,
amendment, extension or renewal of a Letter of Credit, the Issuing Bank and the
Administrative Agent shall have received a notice requesting the issuance,
amendment, extension or renewal of such Letter of Credit as required by Section
2.23(b) or, in the case of the Borrowing of a Swingline Loan, the Swingline
Lender and the Administrative Agent shall have received a notice requesting such
Swingline Loan as required by Section 2.22(b).
(b) The representations and warranties set forth in Article III hereof
and in each other Loan Document shall be true and correct in all material
respects on and as of the date of such Credit Event with the same effect as
though made on and as of such date, except to the extent such representations
and warranties expressly relate to an earlier date.
(c) At the time of and immediately after such Credit Event, no Event of
Default or Default shall have occurred and be continuing.
Each Credit Event shall be deemed to constitute a representation and
warranty by the Borrower and Holdings on the date of such Credit Event as to the
matters specified in paragraphs (b) and (c) of this Section 4.01.
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SECTION 4.02. First Credit Event. On the Closing Date:
(a) The Administrative Agent shall have received, on behalf of
itself, the Lenders and the Issuing Bank, a favorable written opinion
of (i) Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx, counsel for Holdings
and the Borrower, substantially to the effect set forth in Exhibit F-1
and (ii) Faegre & Xxxxxx, local counsel for the Borrower, substantially
to the effect set forth in Exhibit F-2, in each case (A) dated the
Closing Date, (B) addressed to the Issuing Bank, the Administrative
Agent and the Lenders and (C) covering such other matters relating to
the Loan Documents and the Transactions as the Administrative Agent
shall reasonably request, and Holdings and the Borrower hereby request
such counsel to deliver such opinions.
(b) The Administrative Agent shall have received (i) a copy of
the certificate or articles of incorporation, including all amendments
thereto, of each Loan Party, certified as of a recent date by the
Secretary of State of the state of its organization, and a certificate
as to the good standing of each Loan Party as of a recent date, from
such Secretary of State; (ii) a certificate of the Secretary or
Assistant Secretary of each Loan Party dated the Closing Date and
certifying (A) that attached thereto is a true and complete copy of the
by-laws of such Loan Party as in effect on the Closing Date and at all
times since a date prior to the date of the resolutions described in
clause (B) below, (B) that attached thereto is a true and complete copy
of resolutions duly adopted by the Board of Directors of such Loan
Party authorizing the execution, delivery and performance of the Loan
Documents to which such person is a party and, in the case of the
Borrower, the borrowings hereunder, and that such resolutions have not
been modified, rescinded or amended and are in full force and effect,
(C) that the certificate or articles of incorporation of such Loan
Party have not been amended since the date of the last amendment
thereto shown on the certificate of good standing furnished pursuant to
clause (i) above and (D) as to the incumbency and specimen signature of
each officer executing any Loan Document or any other document
delivered in connection herewith on behalf of such Loan Party; (iii) a
certificate of another officer as to the incumbency and specimen
signature of the Secretary or Assistant Secretary executing the
certificate pursuant to clause (ii) above; and (iv) such other
documents as the Lenders, the Issuing Bank or the Administrative Agent
may reasonably request.
(c) The Administrative Agent shall have received a
certificate, dated the Closing Date and signed by a Financial Officer
of the Borrower, confirming compliance with the conditions precedent
set forth in paragraphs (b) and (c) of Section 4.01.
(d) The Administrative Agent shall have received all Fees and
other amounts due and payable on or prior to the Closing Date,
including, to the extent invoiced, reimbursement or payment of all
out-of-pocket expenses required to be reimbursed or paid by the
Borrower hereunder or under any other Loan Document.
(e) The Security Documents shall have been duly executed by
each Loan Party that is to be a party thereto, and shall be in full
force and effect on the Closing Date, and each document (including each
Uniform Commercial Code financing statement) required by law or
reasonably requested by the Collateral Agent to be filed, registered or
recorded in order to create in favor of the Collateral Agent for the
benefit of the Secured Parties a valid, legal and perfected first
priority Lien on, and security interest in, the Collateral (subject to
any Liens expressly permitted by Section 6.02) shall have been
delivered to the Collateral Agent. The Pledged Collateral (as defined
in the Guarantee and Collateral Agreement) shall have been duly and
validly pledged under the Guarantee and Collateral Agreement to the
53
Collateral Agent for the benefit of the Secured Parties, and
certificates representing such Pledged Collateral, accompanied by
instruments of transfer and stock powers endorsed in blank, shall be in
the actual possession of the Collateral Agent.
(f) The Collateral Agent shall have received a Perfection
Certificate with respect to the Loan Parties dated the Closing Date and
duly executed by a Responsible Officer of the Borrower, and shall have
received the results of a search of the Uniform Commercial Code filings
(or equivalent filings) made with respect to the Loan Parties in the
states (or other jurisdictions) of formation of such persons, in which
the chief executive office of each such person is located and in the
other jurisdictions in which such persons maintain property, in each
case as indicated on such Perfection Certificate, together with copies
of the financing statements (or similar documents) disclosed by such
search, and accompanied by evidence reasonably satisfactory to the
Collateral Agent that the Liens indicated in any such financing
statement (or similar document) would be permitted under Section 6.02
or have been or will be contemporaneously released or terminated.
(g) The Administrative Agent shall have received a copy of, or
a certificate as to coverage under, the insurance policies required by
Section 5.02 and the applicable provisions of the Security Documents,
each of which shall be endorsed or otherwise amended to include a
customary lender's loss payable endorsement and to name the Collateral
Agent as additional insured, in form and substance reasonably
satisfactory to the Administrative Agent and the Collateral Agent.
(h) The Borrower shall have received gross cash proceeds of
not less than $220,000,000 from the issuance of the New Subordinated
Notes. The Administrative Agent shall have received copies of the New
Subordinated Note Documents, certified by a Financial Officer as being
complete and correct.
(i) All principal, premium, if any, interest, fees and other
amounts due or outstanding under the Existing Credit Agreement shall
have been, or simultaneously with the initial Credit Event on the
Closing Date shall be, paid in full, the commitments thereunder
terminated and all guarantees and security in support thereof
discharged and released, and the Administrative Agent shall have
received reasonably satisfactory evidence thereof.
(j) The Existing Notes Redemption shall have occurred or shall
occur simultaneously with the initial Credit Event on the Closing Date
in accordance with the Existing Notes Redemption Agreement, and the
Administrative Agent shall have received reasonably satisfactory
evidence thereof.
(k) The Lenders shall have received a certificate
substantially in the form of Exhibit G from the chief financial officer
of the Borrower to the effect that, after giving effect to the
Transactions and the other transactions contemplated hereby, the
Borrower and the Subsidiaries, taken as a whole, will not (i) be
insolvent, (ii) be rendered insolvent by the Indebtedness incurred in
connection therewith, (iii) be left with unreasonably small capital
with which to engage in its business or (iv) have incurred debts beyond
its ability to pay such debts as they mature.
(l) All requisite Governmental Authorities and third parties
shall have approved or consented to the Transactions and the other
transactions contemplated hereby to the extent required, in each case
to the extent failure to obtain such approval or consent will or is
reasonably likely to have a Material Adverse Effect, and there shall be
no litigation, governmental, administrative or judicial action, actual
or threatened, that has or would have, singly or in the aggregate, a
reasonable
54
likelihood of restraining, preventing or imposing burdensome conditions
on the Transactions or the other transactions contemplated hereby.
ARTICLE V
Affirmative Covenants
Each of Holdings and the Borrower covenants and agrees with each Lender
that so long as this Agreement shall remain in effect and until the Commitments
have been terminated and the principal of and interest on each Loan, all Fees
and all other expenses or amounts payable under any Loan Document shall have
been paid in full and all Letters of Credit have been canceled or have expired
and all amounts drawn thereunder have been reimbursed in full, unless the
Required Lenders shall otherwise consent in writing, each of Holdings and the
Borrower will, and will cause each of the Subsidiaries to:
SECTION 5.01. Existence; Businesses and Properties. (a) Do or cause to
be done all things necessary to preserve, renew and keep in full force and
effect its legal existence, except as otherwise expressly permitted under
Section 6.05.
(b) Do or cause to be done all things necessary to obtain, preserve,
renew, extend and keep in full force and effect the rights, licenses, permits,
franchises, authorizations, patents, copyrights, trademarks and trade names
material to the conduct of its business; maintain and operate such business in
substantially the manner in which it is presently conducted and operated with,
in the case of the Borrower and the Subsidiaries, reasonable extensions thereof;
comply in all material respects with all applicable laws, rules, regulations,
decrees and orders of any Governmental Authority, whether now in effect or
hereafter enacted; and at all times maintain and preserve all property material
to the conduct of such business and keep such property in good repair, working
order and condition and from time to time make, or cause to be made, all needful
and proper repairs, renewals, additions, improvements and replacements thereto
necessary in order that the business carried on in connection therewith may be
properly conducted at all times.
SECTION 5.02. Insurance. (a) Keep its insurable properties adequately
insured at all times by financially sound and reputable insurers; maintain such
other insurance, to such extent and against such risks, including fire and other
risks insured against by extended coverage, as is customary with companies in
the same or similar businesses operating in the same or similar locations,
including public liability insurance against claims for personal injury or death
or property damage occurring upon, in, about or in connection with the use of
any properties owned, occupied or controlled by it; and maintain such other
insurance as may be required by law.
(b) Cause all such policies covering any Collateral to be endorsed or
otherwise amended to include a customary lender's loss payable endorsement, in
form and substance reasonably satisfactory to the Administrative Agent and the
Collateral Agent, which endorsement shall provide that, from and after the
Closing Date, if the insurance carrier shall have received written notice from
the Administrative Agent or the Collateral Agent of the occurrence of an Event
of Default, the insurance carrier shall pay all proceeds otherwise payable to
the Borrower or the Loan Parties under such policies directly to the Collateral
Agent; cause all such policies to provide that neither the Borrower, the
Administrative Agent, the Collateral Agent nor any other party shall be a
coinsurer thereunder and to contain a "Replacement Cost Endorsement", without
any deduction for depreciation, and such other provisions as the Administrative
Agent or the Collateral Agent may reasonably require from time to time to
protect their interests; deliver original or certified copies of all such
policies
55
to the Collateral Agent; cause each such policy to provide that it shall not be
canceled, modified or not renewed (i) by reason of nonpayment of premium upon
not less than 10 days' prior written notice thereof by the insurer to the
Administrative Agent and the Collateral Agent (giving the Administrative Agent
and the Collateral Agent the right to cure defaults in the payment of premiums)
or (ii) for any other reason upon not less than 30 days' prior written notice
thereof by the insurer to the Administrative Agent and the Collateral Agent;
deliver to the Administrative Agent and the Collateral Agent, prior to the
cancelation, modification or nonrenewal of any such policy of insurance, a copy
of a renewal or replacement policy (or other evidence of renewal of a policy
previously delivered to the Administrative Agent and the Collateral Agent)
together with evidence satisfactory to the Administrative Agent and the
Collateral Agent of payment of the premium therefor.
(c) Notify the Administrative Agent and the Collateral Agent
immediately whenever any separate insurance concurrent in form or contributing
in the event of loss with that required to be maintained under this Section 5.02
is taken out by the Borrower; and promptly deliver to the Administrative Agent
and the Collateral Agent a duplicate original copy of such policy or policies.
SECTION 5.03. Obligations and Taxes. Pay its Material Indebtedness and
other material obligations promptly and in accordance with their terms and pay
and discharge promptly when due all material Taxes, assessments and governmental
charges or levies imposed upon it or upon its income or profits or in respect of
its property, before the same shall become delinquent or in default, as well as
all lawful claims for labor, materials and supplies or otherwise that, if
unpaid, might give rise to a Lien upon such properties or any part thereof;
provided, however, that such payment and discharge shall not be required with
respect to any such material obligation or Tax, assessment, charge, levy or
claim so long as the validity or amount thereof shall be contested in good faith
by appropriate proceedings and the Borrower shall have set aside on its books
adequate reserves with respect thereto in accordance with GAAP and such contest
operates to suspend collection of the contested obligation, tax, assessment or
charge and enforcement of a Lien and, in the case of a Mortgaged Property, there
is no risk of forfeiture of such property.
SECTION 5.04. Financial Statements, Reports, etc. In the case of the
Borrower, furnish to the Administrative Agent:
(a) within 90 days after the end of each fiscal year, its
consolidated balance sheet and related statements of income,
stockholders' equity and cash flows showing the financial condition of
the Borrower and its consolidated Subsidiaries as of the close of such
fiscal year and the results of its operations and the operations of
such Subsidiaries during such year, together with comparative figures
for the immediately preceding fiscal year, all audited by Deloitte &
Touche LLP or other independent public accountants of recognized
national standing and accompanied by an opinion of such accountants
(which shall not be qualified in any material respect) to the effect
that such consolidated financial statements fairly present the
financial condition and results of operations of the Borrower and its
consolidated Subsidiaries on a consolidated basis in accordance with
GAAP consistently applied;
(b) within 45 days after the end of each of the first three
fiscal quarters of each fiscal year, its consolidated balance sheet and
related statements of income, stockholders' equity and cash flows
showing the financial condition of the Borrower and its consolidated
Subsidiaries as of the close of such fiscal quarter and the results of
its operations and the operations of such Subsidiaries during such
fiscal quarter and the then elapsed portion of the fiscal year, and
comparative figures for the same periods in the immediately preceding
fiscal year, all certified by one of its Financial Officers as fairly
presenting in all material respects the financial condition and results
56
of operations of the Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied,
subject to normal year-end audit adjustments;
(c) within 45 days after the end of the first two fiscal
four-week periods of each fiscal quarter, its consolidated balance
sheet and related statements of income and cash flows showing the
financial condition of the Borrower and its consolidated Subsidiaries
during such fiscal period and the then elapsed portion of the fiscal
year, all certified by one of its Financial Officers as fairly
presenting in all material respects the financial condition and results
of operations of the Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied,
subject to normal year-end audit adjustments;
(d) concurrently with any delivery of financial statements
under paragraph (a), (b) or (c) above, a certificate of the accounting
firm (in the case of paragraph (a)) or Financial Officer (in the case
of paragraph (b) or (c)) opining on or certifying such statements
(which certificate, when furnished by an accounting firm, may be
limited to accounting matters and disclaim responsibility for legal
interpretations) (i) certifying that no Event of Default or Default has
occurred or, if such an Event of Default or Default has occurred,
specifying the nature and extent thereof and any corrective action
taken or proposed to be taken with respect thereto and (ii) in the case
of paragraphs (a) and (b), of a Financial Officer setting forth
computations in reasonable detail satisfactory to the Administrative
Agent (x) demonstrating compliance with the covenants contained in
Sections 6.11, 6.12 and 6.13 and (y) if Tahoe Joe's has not become a
Loan Party pursuant to Section 5.09, the calculation of Tahoe Joe's
Consolidated EBITDA contemplated by Section 5.09 and, in the case of a
certificate delivered with the financial statements required by
paragraph (a) above, (x) setting forth the Borrower's calculation of
Excess Cash Flow and (y) certifying that there has been no change in
the business activities, assets or liabilities of Holdings, or if there
has been any such change, describing such change in reasonable detail
and certifying that Holdings is in compliance with Section 6.08;
(e) at least 45 days after the commencement of each fiscal
year of the Borrower commencing with the fiscal year ending on or about
June 30, 2003, a detailed consolidated budget for such fiscal year
(including a projected consolidated balance sheet and related
statements of projected operations and cash flows as of the end of and
for such fiscal year and setting forth the assumptions used for
purposes of preparing such budget) and, promptly when available, any
significant revisions of such budget;
(f) promptly after the same become publicly available, copies
of all periodic and other reports, final proxy statements, and upon
notice of filing to the Administrative Agent and upon the request of
the Administrative Agent, other materials filed by Holdings, the
Borrower or any Subsidiary with the Securities and Exchange Commission,
or any Governmental Authority succeeding to any or all of the functions
of said Commission, or with any national securities exchange, or
distributed to its shareholders, as the case may be, and all press
releases;
(g) promptly after the receipt thereof by Holdings, the
Borrower or any Subsidiary, a copy of any "management letter" (in final
form) received by any such person from its certified public accountants
and the management's response thereto; and
(h) promptly, from time to time, such other information
regarding the operations, business affairs and financial condition of
Holdings, the Borrower or any
57
Subsidiary, or compliance with the terms of any Loan Document, as the
Administrative Agent or any Lender may reasonably request.
SECTION 5.05. Litigation and Other Notices. Furnish to the
Administrative Agent, the Issuing Bank and each Lender prompt written notice of
the following:
(a) any Event of Default or Default, specifying the nature and
extent thereof and the corrective action (if any) taken or proposed to
be taken with respect thereto;
(b) the filing or commencement of, or any threat or notice of
intention of any person to file or commence, any action, suit or
proceeding, whether at law or in equity or by or before any
Governmental Authority, against the Borrower or any Affiliate thereof
that could reasonably be expected to result in a Material Adverse
Effect;
(c) the occurrence of any ERISA Event that, alone or together
with any other ERISA Events that have occurred, could reasonably be
expected to result in liability of the Borrower and the Subsidiaries in
an aggregate amount exceeding $1,000,000.
(d) any development that has resulted in, or could reasonably
be expected to result in, a Material Adverse Effect.
SECTION 5.06. Information Regarding Collateral. (a) Furnish to the
Administrative Agent prompt written notice of any change in any Loan Party's
legal name, corporate structure, jurisdiction of organization or Federal
Taxpayer Identification Number. Holdings and the Borrower agree not to effect or
permit any change referred to in the preceding sentence unless all filings have
been made under the Uniform Commercial Code or otherwise that are required in
order for the Collateral Agent to continue at all times following such change to
have a valid, legal and perfected security interest in all the Collateral.
Holdings and the Borrower also agree promptly to notify the Administrative Agent
if any material portion of the Collateral is damaged or destroyed.
(b) In the case of the Borrower, each year, at the time of delivery of
the annual financial statements with respect to the preceding fiscal year
pursuant to Section 5.04(a), deliver to the Administrative Agent a certificate
of a Financial Officer setting forth the information required pursuant to
Section 2 of the Perfection Certificate or confirming that there has been no
change in such information since the date of the Perfection Certificate
delivered on the Closing Date or the date of the most recent certificate
delivered pursuant to this Section 5.06.
SECTION 5.07. Maintaining Records; Access to Properties and
Inspections. Keep proper books of record and account in which full, true and
correct entries in conformity with GAAP and all requirements of law are made of
all dealings and transactions in relation to its business and activities. Each
of Holdings and the Borrower will, and will cause each of its subsidiaries to,
permit any representatives designated by the Administrative Agent, the
Collateral Agent or any Lender to visit and inspect the financial records and
the properties of Holdings, the Borrower or any Subsidiary at reasonable times
(but not more often then two times each year unless an Event of Default is
continuing) and to make extracts from and copies of such financial records, and
permit any representatives designated by the Administrative Agent, the
Collateral Agent or any Lender to discuss the affairs, finances and condition of
Holdings, the Borrower or any Subsidiary with the officers thereof and
independent accountants therefor.
SECTION 5.08. Use of Proceeds. Use the proceeds of the Loans and
request the issuance of Letters of Credit only for the purposes set forth in
Section 3.13.
58
SECTION 5.09. Further Assurances. Execute any and all further
documents, financing statements, agreements and instruments, and take all
further action (including filing Uniform Commercial Code and other financing
statements, mortgages and deeds of trust) that may be required under applicable
law, or that the Required Lenders, the Administrative Agent or the Collateral
Agent may reasonably request, in order to effectuate the transactions
contemplated by the Loan Documents and in order to grant, preserve, protect and
perfect the validity and first priority of the security interests created or
intended to be created by the Security Documents. The Borrower will cause (a)
Tahoe Joe's if either (i) Tahoe Joe's shall become a wholly owned Subsidiary of
the Borrower or (ii) (x) the Borrower's Consolidated EBITDA for any period of
four consecutive fiscal quarters shall be less than $110,000,000 and (y) at
least 10% of such Consolidated EBITDA shall be associated with Tahoe Joe's and
(b) any subsequently acquired or organized Domestic Subsidiary (other than any
Inactive Subsidiary) or any Domestic Subsidiary that ceases to be an Inactive
Subsidiary to become a Loan Party by executing the Guarantee and Collateral
Agreement and each other applicable Security Document in favor of the Collateral
Agent. In addition, from time to time, the Borrower will, at its cost and
expense, promptly secure the Obligations by pledging or creating, or causing to
be pledged or created, perfected security interests with respect to such of its
assets and properties as the Administrative Agent, the Collateral Agent or the
Required Lenders shall designate (it being understood that, subject to Section
5.10, it is the intent of the parties that the Obligations shall be secured by
substantially all the assets of the Borrower and its Subsidiaries (including
material owned real and other properties acquired subsequent to the Closing
Date)). Such security interests and Liens will be created under the Security
Documents and other security agreements, mortgages, deeds of trust and other
instruments and documents in form and substance reasonably satisfactory to the
Administrative Agent and the Collateral Agent, and the Borrower shall deliver or
cause to be delivered to the Lenders all such instruments and documents
(including legal opinions, title insurance policies and lien searches) as the
Collateral Agent shall reasonably request to evidence compliance with this
Section 5.09. The Borrower agrees to provide such evidence as the Collateral
Agent shall reasonably request as to the perfection and priority status of each
such security interest and Lien. In furtherance of the foregoing, the Borrower
will give prompt notice to the Administrative Agent of the acquisition by it or
any of the Subsidiaries of any real property (or any interest in real property)
having a value in excess of $250,000.
SECTION 5.10. Mortgaged Property. Promptly execute Mortgages with
respect to each parcel of owned real property and the improvements thereon
specified on Schedule 5.10 that is still owned by the Borrower or any Subsidiary
on the date that is 270 days after the Closing Date, and take such further
action that the Required Lenders, the Administrative Agent or the Collateral
Agent may reasonably request in order to grant, preserve, protect and perfect
the validity and first priority of the security interest created or intended to
be created by such Mortgages. Such Mortgages will be in form and substance
reasonably satisfactory to the Administrative Agent and the Collateral Agent,
and the Borrower shall deliver or cause to be delivered to the Lenders all such
instruments and documents (including legal opinions, title insurance policies
and lien searches) as the Collateral Agent shall reasonably request to evidence
compliance with this Section 5.10.
SECTION 5.11. Interest Rate Protection. The Borrower will ensure that
for at least two years following the Closing Date no less than 50% of the
Borrower's long-term Indebtedness effectively bears interest at a fixed rate,
either by its terms or through the Borrower's entering into, as promptly as
practicable and in any event not later than the 90th day following the Closing
Date, one or more Hedging Agreements with any of the Lenders or other financial
institutions reasonably satisfactory to the Administrative Agent on customary
terms reasonably satisfactory to the Administrative Agent.
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ARTICLE VI
Negative Covenants
Each of Holdings and the Borrower covenants and agrees with each Lender
that, so long as this Agreement shall remain in effect and until the Commitments
have been terminated and the principal of and interest on each Loan, all Fees
and all other expenses or amounts payable under any Loan Document have been paid
in full and all Letters of Credit have been canceled or have expired and all
amounts drawn thereunder have been reimbursed in full, unless the Required
Lenders shall otherwise consent in writing, neither Holdings nor the Borrower
will, nor will they cause or permit any of the Subsidiaries to:
SECTION 6.01. Indebtedness. Incur, create, assume or permit to exist
any Indebtedness, except:
(a) Indebtedness for borrowed money existing on the date
hereof and set forth in Schedule 6.01, and any extensions, renewals or
replacements of such Indebtedness to the extent the principal amount of
such Indebtedness is not increased, the weighted average life to
maturity of such Indebtedness is not decreased, such Indebtedness, if
subordinated to the Obligations, remains so subordinated on terms not
less favorable to the Lenders, and the original obligors in respect of
such Indebtedness remain the only obligors thereon;
(b) Indebtedness created hereunder and under the other Loan
Documents;
(c) intercompany Indebtedness of Holdings, the Borrower and
the Subsidiaries to the extent permitted by Section 6.04(c) and
unsecured Guarantees made in the ordinary course of business by the
Borrower or any Subsidiary Guarantor of obligations of the Borrower or
any Subsidiary Guarantor;
(d) Indebtedness of the Borrower or any Subsidiary incurred to
finance the acquisition, construction or improvement of any fixed or
capital assets, and extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount
thereof; provided that (i) such Indebtedness is incurred prior to or
within 90 days after such acquisition or the completion of such
construction or improvement and (ii) the aggregate principal amount of
Indebtedness permitted by this Section 6.01(d), when combined with the
aggregate principal amount of all Capital Lease Obligations and
Synthetic Lease Obligations incurred pursuant to Section 6.01(e)(ii)
shall not exceed $25,000,000 at any time outstanding;
(e) in the case of the Borrower and its Subsidiaries, (i)
Capital Lease Obligations in respect of Sale-Leaseback B and
Sale-Leaseback C and (ii) other Capital Lease Obligations and Synthetic
Lease Obligations, in the case of this clause (ii) only, in an
aggregate principal amount, when combined with the aggregate principal
amount of all Indebtedness incurred pursuant to Section 6.01(d), not in
excess of $25,000,000 at any time outstanding;
(f) Indebtedness under performance bonds or with respect to
workers' compensation claims, in each case incurred in the ordinary
course of business;
(g) Indebtedness of any person that becomes a Subsidiary after
the date hereof; provided that (i) such Indebtedness exists at the time
such person becomes a Subsidiary and is not created in contemplation of
or in connection with such person becoming a Subsidiary, (ii)
immediately before and after such person becomes a
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Subsidiary, no Default or Event of Default shall have occurred and be
continuing and (iii) the aggregate principal amount of Indebtedness
permitted by this clause (g) shall not exceed $10,000,000 at any time
outstanding;
(h) unsecured subordinated Indebtedness of the Borrower
("Seller Notes") issued to the seller in connection with any Permitted
Acquisition under Section 6.04(f); provided that (i) such Indebtedness
provides for cash interest payments in an amount not greater than 14%
per annum and requires no cash payments of principal prior to the date
that is one year after the Term Loan Maturity Date, (ii) such
Indebtedness does not impose any financial or other "maintenance"
covenants on Holdings, the Borrower or any of the Subsidiaries, (iii)
such Indebtedness is subordinated to the Obligations on terms no less
favorable to the Secured Parties than those governing the New
Subordinated Notes and (iv) the aggregate principal amount of any such
Seller Notes does not exceed $20,000,000 at any one time outstanding;
(i) New Subordinated Notes in an aggregate principal amount at
any time outstanding not to exceed the sum of (i) $230,000,000 plus
(ii) the Incremental Debt Amount, and any Guarantees relating to such
New Subordinated Notes; provided that no Indebtedness in respect of the
New Subordinated Notes may be incurred pursuant to this clause (i) in
excess of $230,000,000 at any time outstanding unless at the time of
and immediately after such incurrence (A) no Event of Default or
Default shall have occurred and be continuing and (B) the Leverage
Ratio of the Borrower, on a Pro Forma Basis after giving effect to such
incurrence and the application of the proceeds therefrom, shall be at
least 0.25 to 1.0 less than the maximum Leverage Ratio permitted under
Section 6.13 applicable at such time;
(j) in the case of Holdings, Indebtedness in respect of the
New Holdings Notes not in excess of $28,000,000 at any time
outstanding; and
(k) other unsecured Indebtedness of the Borrower or the
Subsidiaries in an aggregate principal amount at any time outstanding
not to exceed the Incremental Debt Amount.
SECTION 6.02. Liens. Create, incur, assume or permit to exist any Lien
on any property or assets (including Equity Interests or other securities of any
person, including any Subsidiary) now owned or hereafter acquired by it or on
any income or revenues or rights in respect of any thereof, except:
(a) Liens on property or assets of the Borrower and its
Subsidiaries existing on the date hereof and set forth in Schedule
6.02; provided that such Liens shall secure only those obligations
which they secure on the date hereof;
(b) any Lien created under the Loan Documents;
(c) any Lien existing on any property or asset prior to the
acquisition thereof by the Borrower or any Subsidiary; provided that
(i) such Lien is not created in contemplation of or in connection with
such acquisition and (ii) such Lien does not apply to any other
property or assets of the Borrower or any Subsidiary;
(d) Liens for taxes not yet due or which are being contested
in compliance with Section 5.03;
(e) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business and securing obligations
61
that are not due and payable or which are being contested in compliance
with Section 5.03;
(f) pledges and deposits in compliance with workmen's
compensation, unemployment insurance and other social security laws or
regulations;
(g) deposits to secure the performance of bids, trade
contracts (other than for Indebtedness for borrowed money), leases
(other than Capital Lease Obligations), statutory obligations, surety
and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business;
(h) zoning restrictions, easements, rights-of-way,
restrictions on use of real property and other similar encumbrances
incurred in the ordinary course of business which, in the aggregate,
are not substantial in amount and do not materially detract from the
value of the property subject thereto or interfere with the ordinary
conduct of the business of the Borrower or any of its Subsidiaries;
(i) purchase money security interests in real property,
improvements thereto or equipment hereafter acquired (or, in the case
of improvements, constructed) by the Borrower or any Subsidiary;
provided that (i) such security interests secure Indebtedness permitted
by Section 6.01, (ii) such security interests are incurred, and the
Indebtedness secured thereby is created, within 90 days after such
acquisition (or construction) and (iii) such security interests do not
apply to any other property or assets of the Borrower or any
Subsidiary;
(j) judgment liens securing judgments that have not resulted
in an Event of Default under Article VII; and
(k) any interest or title of a lessor under any lease entered
into by the Borrower or any of the Subsidiaries in the ordinary course
of business and covering only the assets so leased.
SECTION 6.03. Sale and Leaseback Transactions. Enter into any
arrangement, directly or indirectly, with any person whereby it shall sell or
transfer any property, real or personal, used or useful in its business, whether
now owned or hereafter acquired, and thereafter rent or lease such property or
other property which it intends to use for substantially the same purpose or
purposes as the property being sold or transferred (a "Sale and Leaseback")
unless (i) the sale of such property is permitted by Section 6.05 and (ii) any
Capital Lease Obligations or Liens arising in connection therewith are permitted
by Sections 6.01 and 6.02, respectively.
SECTION 6.04. Investments, Loans and Advances. Purchase, hold or
acquire any Equity Interests, evidences of Indebtedness or other securities of,
make or permit to exist any loans or advances to, or make or permit to exist any
investment or any other interest in, any other person, except:
(a) (i) investments by Holdings, the Borrower and the
Subsidiaries existing on the date hereof in the Equity Interests of the
Borrower and the Subsidiaries, (ii) additional investments by Holdings,
the Borrower and the Subsidiaries in the Equity Interests of the
Borrower and the Subsidiary Guarantors; provided that any such Equity
Interests held by a Loan Party shall be pledged pursuant to the
Guarantee and Collateral Agreement (subject to the limitations
applicable to voting stock of a Foreign Subsidiary referred to
therein), and (iii) additional investments by Holdings, the Borrower
and the Subsidiaries in the Equity Interests of Tahoe Joe's at any time
that Tahoe Joe's shall not be a Subsidiary Guarantor so long as the
aggregate amount
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of investments by Loan Parties in, and loans and advances by Loan
Parties to, Tahoe Joe's (determined without regard to any write downs
or write offs) shall not exceed $12,500,000 at any time outstanding;
(b) Permitted Investments;
(c) (i) loans or advances made by the Borrower to any
Subsidiary Guarantor and made by any Subsidiary to the Borrower or any
Subsidiary Guarantor; provided that any such loans and advances made by
a Loan Party shall be evidenced by a promissory note pledged to the
Collateral Agent for the ratable benefit of the Secured Parties
pursuant to the Guarantee and Collateral Agreement, and (ii) loans or
advances made by the Borrower and any Subsidiary to Tahoe Joe's at any
time that Tahoe Joe's shall not be a Subsidiary Guarantor; provided
that the amount of such loans and advances made by Loan Parties to
Tahoe Joe's shall be subject to the limitations set forth in paragraph
(a) above;
(d) investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes
with, customers and suppliers, in each case in the ordinary course of
business;
(e) the Borrower and the Subsidiaries may make loans and
advances in the ordinary course of business to their respective
employees so long as the aggregate principal amount thereof at any time
outstanding (determined without regard to any write-downs or write-offs
of such loans and advances) shall not exceed $5,000,000;
(f) the Borrower or any wholly owned Subsidiary may acquire
all or substantially all the assets of a person or line of business of
such person, or all of the Equity Interests of a person (referred to
herein as the "Acquired Entity"); provided that (i) the Acquired Entity
shall be a going concern and shall be in a similar line of business as
that of the Borrower and the Subsidiaries as conducted during the
current and most recent calendar year; (ii) at the time of such
transaction (A) both before and after giving effect thereto, no Event
of Default or Default shall have occurred and be continuing or shall
exist; (B) the Borrower would be in Pro Forma Compliance; (C) after
giving effect to such acquisition, there must be at least $10,000,000
of unused and available Revolving Credit Commitments; and (D) the
aggregate of the consideration paid in connection with such acquisition
and any related acquisitions pursuant to this Section 6.04(f)
(including any Indebtedness of the Acquired Entity that is assumed by
the Borrower or any Subsidiary following such acquisition) shall not in
the aggregate exceed $45,000,000; (iii) the Borrower shall assume no
Indebtedness in connection with such acquisition, except as permitted
by Section 6.01; and (iv) the Borrower shall comply, and shall cause
the Acquired Entity to comply, with the applicable provisions of
Section 5.09 and the Security Documents (any acquisition of an Acquired
Entity meeting all the criteria of this Section 6.04(f) being referred
to herein as a "Permitted Acquisition");
(g) the Borrower may acquire all the Equity Interests of Tahoe
Joe's not currently owned by the Borrower in the event that the current
minority shareholder of Tahoe Joe's exercises its right to require such
acquisition by the Borrower in accordance with the Tahoe Joe's
Stockholders' Agreement as in effect on the Closing Date; provided that
(i) no Event of Default or Default shall have occurred and be
continuing or would result therefrom and (ii) the aggregate cash
payment made by or on behalf of the Borrower in respect of such
acquisition shall not exceed $7,000,000;
(h) investments existing on the date hereof and set forth on
Schedule 6.04;
63
(i) investments consisting of non-cash proceeds of Asset Sales
made in accordance with Section 6.05(b);
(j) loans or advances permitted by Section 6.06(a);
(k) extensions of trade credit in the ordinary course of
business; and
(l) in addition to investments permitted by paragraphs (a)
through (k) above, additional investments, loans and advances by the
Borrower and the Subsidiaries so long as the aggregate amount invested,
loaned or advanced pursuant to this paragraph (l) (determined without
regard to any write-downs or write-offs of such investments, loans and
advances, but net of any return of principal or capital, as the case
may be) does not exceed $5,000,000 in the aggregate.
SECTION 6.05. Mergers, Consolidations, Sales of Assets and
Acquisitions. (a) Merge into or consolidate with any other person, or permit any
other person to merge into or consolidate with it, or sell, transfer, lease or
otherwise dispose of (in one transaction or in a series of transactions) all or
substantially all of the assets (whether now owned or hereafter acquired) of the
Borrower or less than all the Equity Interests of any Subsidiary, or purchase,
lease or otherwise acquire (in one transaction or a series of transactions) all
or any substantial part of the assets of any other person, except that (i) the
Borrower and any Subsidiary may purchase and sell inventory in the ordinary
course of business, (ii) the Borrower and any wholly owned Subsidiary may make
Permitted Acquisitions and (iii) if at the time thereof and immediately after
giving effect thereto no Event of Default or Default shall have occurred and be
continuing (x) any wholly owned Subsidiary may merge into or consolidate with
the Borrower in a transaction in which the Borrower is the surviving
corporation, (y) any wholly owned Subsidiary may merge into or consolidate with
any other wholly owned Subsidiary (or, in order to consummate a Permitted
Acquisition, any other person) in a transaction in which the surviving entity is
a wholly owned Subsidiary and (except in the case of Permitted Acquisitions) no
person other than the Borrower or a wholly owned Subsidiary receives any
consideration; provided that if any such merger described in this clause (y)
shall involve a Domestic Subsidiary, the surviving entity of such merger shall
be a Domestic Subsidiary and (z) Holdings may merge with or into the Borrower in
a transaction in which no person other than Holdings or the Borrower receives
any consideration other than, in the case of the stockholders of Holdings,
consideration consisting solely of the Equity Interests of the surviving
corporation (following which all references to Holdings or the Borrower shall
mean the survivor of such merger).
(b) Engage in any Asset Sale otherwise permitted under paragraph (a)
above unless (i) such Asset Sale is for consideration at least 75% of which is
cash, (ii) such consideration is at least equal to the fair market value of the
assets being sold, transferred, leased or disposed of and (iii) the fair market
value of all assets sold, transferred, leased or disposed of pursuant to this
paragraph (b) shall not exceed $10,000,000 in any fiscal year.
(c) Notwithstanding the foregoing paragraphs (a) and (b), the Borrower
shall be permitted to:
(i) consummate Sale-Leaseback B if (x) the material terms of
Sale-Leaseback B are not materially different from those set forth on
Schedule 1.01(b), and the documentation therefor is reasonably
satisfactory to the Administrative Agent, (y) Sale-Leaseback B raises
aggregate gross cash proceeds of not less than $25,000,000 and (z) the
Net Cash Proceeds received with respect thereto are applied to prepay
outstanding Term Loans in accordance with Section 2.13;
64
(ii) consummate Sale-Leaseback C if (x) the material terms of
Sale-Leaseback C are not materially different from those disclosed to
the Lenders prior to the Closing Date and the documentation therefor is
reasonably satisfactory to the Administrative Agent, (y) Sale-Leaseback
C raises aggregate gross cash proceeds of not less than the book value
of the assets sold pursuant thereto less $12,000,000 and (z) the Net
Cash Proceeds received with respect thereto are applied to prepay
outstanding Term Loans in accordance with Section 2.13;
(iii) consummate the Roadhouse Disposition if (x) the Net Cash
Proceeds received with respect thereto are not less than 4.0 times the
amount of trailing four-quarter Consolidated EBITDA associated with the
assets sold pursuant thereto, (y) the consideration received therefor
is not less than the fair market value of the assets sold pursuant
thereto and (z) the Net Cash Proceeds received with respect thereto are
applied to prepay outstanding Term Loans in accordance with Section
2.13;
(iv) sell Equity Interests of Tahoe Joe's pursuant to a
Qualified Tahoe Joe's Equity Offering so long as (x) no Event of
Default or Default shall have occurred and be continuing or result
therefrom and (y) the Net Cash Proceeds received with respect thereto
are applied to prepay outstanding Term Loans in accordance with Section
2.13; and
(v) sell (A) Equity Interests of Tahoe Joe's or all or
substantially all the assets of Tahoe Joe's, (B) the Borrower's
manufacturing facility located in Marshfield, Wisconsin and/or (C) up
to 40 restaurants during the term of this Agreement, in each case so
long as (x) no Event of Default or Default shall have occurred and be
continuing or result therefrom, (y) the requirements of Section
6.05(b)(i) and (ii) have been satisfied with respect to any such sale
and (z) the Net Cash Proceeds received with respect thereto are applied
to prepay outstanding Term Loans in accordance with Section 2.13.
SECTION 6.06. Restricted Payments; Restrictive Agreements. (a) Declare
or make, or agree to declare or make, directly or indirectly, any Restricted
Payment (including pursuant to any Synthetic Purchase Agreement), or incur any
obligation (contingent or otherwise) to do so; provided, however, that (i) any
Subsidiary may declare and pay dividends or make other distributions ratably to
its equity holders, (ii) so long as no Event of Default or Default shall have
occurred and be continuing or would result therefrom, the Borrower may, or the
Borrower may make distributions to Holdings so that Holdings may (w) make
Restricted Payments in an aggregate amount not to exceed $10,000,000, (x) in the
event of a Special Disposition, make Restricted Payments in an aggregate amount
not to exceed the Net Cash Proceeds of such Special Disposition less the Special
Prepayment Amount in respect of such Special Disposition, (y) if at the end of
any fiscal year the Leverage Ratio was less than 3.0 to 1.0 and the Senior
Leverage Ratio was less than 1.25 to 1.0, make Restricted Payments during the
following fiscal year in an aggregate amount not to exceed 50% of Excess Cash
Flow for the fiscal year then ended so long as, after giving effect to any such
Restricted Payment, the Leverage Ratio would be less than 3.0 to 1.0 and the
Senior Leverage Ratio would be less than 1.25 to 1.0 and (z) repurchase its
Equity Interests owned by employees of Holdings, the Borrower or the
Subsidiaries or make payments to employees of Holdings, the Borrower or the
Subsidiaries upon termination of employment in connection with the exercise of
stock options, stock appreciation rights or similar equity incentives or equity
based incentives pursuant to management incentive plans or in connection with
the death or disability of such employees in an aggregate amount not to exceed
$8,000,000 in any fiscal year, of which the aggregate amount paid to any one
such employee (or estate of such employee) shall not exceed $4,000,000, (iii)
the Borrower may make Restricted Payments or make loans and advances to Holdings
(x) in an amount not to
65
exceed $250,000 in any fiscal year, to the extent necessary to pay general
corporate and overhead expenses incurred by Holdings in the ordinary course of
business and (y) in an amount necessary to make Tax Payments directly
attributable to (or arising as a result of) the operations of the Borrower and
the Subsidiaries; provided, however, that (A) the amount of such dividends shall
not exceed the amount that the Borrower and the Subsidiaries would be required
to pay in respect of Federal, State and local taxes were the Borrower to pay
such taxes as a stand-alone taxpayer and (B) all Restricted Payments made to
Holdings pursuant to this clause (iii) are used by Holdings for the purposes
specified herein within 30 days of the receipt thereof, (iv) the Borrower may,
or the Borrower may make distributions to Holdings so that Holdings may, pay the
Closing Date Dividend and (v) the Borrower may acquire all of the Equity
Interests of Tahoe Joe's not currently owned by the Borrower in accordance with
the provisions of Section 6.04(g).
(b) Enter into, incur or permit to exist any agreement or other
arrangement that prohibits, restricts or imposes any condition upon (i) the
ability of Holdings, the Borrower or any Subsidiary to create, incur or permit
to exist any Lien upon any of its property or assets to secure the Obligations
or any refinancing thereof, or (ii) the ability of any Subsidiary to pay
dividends or other distributions with respect to any of its Equity Interests or
to make or repay loans or advances to the Borrower or any other Subsidiary or to
Guarantee Indebtedness of the Borrower or any other Subsidiary; provided that
(A) the foregoing shall not apply to restrictions and conditions imposed by law
or by any Loan Document, (B) the foregoing shall not apply to customary
restrictions and conditions contained in agreements relating to the sale of a
Subsidiary pending such sale, provided such restrictions and conditions apply
only to the Subsidiary that is to be sold and such sale is permitted hereunder,
(C) the foregoing shall not apply to restrictions and conditions imposed on any
Foreign Subsidiary by the terms of any Indebtedness of such Foreign Subsidiary
permitted to be incurred hereunder, (D) clause (i) of the foregoing shall not
apply to restrictions or conditions imposed by any agreement relating to secured
Indebtedness, Capital Lease Obligations or Synthetic Lease Obligations permitted
by this Agreement if such restrictions or conditions apply only to the property
or assets securing such Indebtedness or subject to such lease and (E) clause (i)
of the foregoing shall not apply to customary provisions in leases and other
contracts restricting the assignment thereof.
SECTION 6.07. Transactions with Affiliates. Except for transactions by
or among Loan Parties, sell or transfer any property or assets to, or purchase
or acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except that:
(a) the Borrower or any Subsidiary may engage in any of the
foregoing transactions in the ordinary course of business at prices and
on terms and conditions not less favorable to the Borrower or such
Subsidiary than could be obtained on an arm's-length basis from
unrelated third parties;
(b) Restricted Payments may be made to the extent provided in
Section 6.06;
(c) loans may be made and other transactions may be entered
into between and among the Borrower, Holdings, the Subsidiaries and
their respective Affiliates to the extent permitted by Sections 6.01
and 6.04;
(d) so long as no Event of Default or Default shall have
occurred and be continuing or would result therefrom, (i) business
management fees may be paid to Xxxxxx-Xxxxxx Capital, Inc. or any of
its Affiliates in an aggregate amount not to exceed 2% of the
Borrower's Consolidated EBITDA in any fiscal year, (ii) upon the
consummation of acquisitions and divestitures by the Borrower,
investment banking fees in an aggregate amount not to exceed 1.0% of
the consideration paid for such
66
acquisition or divestiture may be paid to Xxxxxx-Xxxxxx Capital, Inc.
or any of its Affiliates in connection with such acquisition or
divestiture, in the case of clauses (i) and (ii) as provided for in the
Management Services Agreement as in effect on the Closing Date;
provided that in connection with a Qualified Initial Public Equity
Offering, the Borrower may terminate the Management Services Agreement
and pay a termination fee from the proceeds of such Qualified Initial
Public Equity Offering and (iii) fees may be paid to Sentinel Capital
Partners, II, L.P. or any of its Affiliates in an aggregate amount not
to exceed $250,000 in any fiscal year, as provided in the services
agreement between the Borrower and Sentinel Capital Partners, II, L.P.
as in effect on the Closing Date; and
(e) a registration rights agreement may be entered into
between and among Holdings and holders of Equity Interests in it
providing for customary registration rights in connection with a
Qualified Initial Public Equity Offering.
SECTION 6.08. Business of Holdings, Borrower and Subsidiaries. (a) With
respect to Holdings, engage in any business activities or have any assets or
liabilities other than its ownership of the Equity Interests of the Borrower
and, following a Tahoe Joe's Dividend, Tahoe Joe's, and liabilities incidental
thereto, including its liabilities hereunder and pursuant to the Guarantee and
Collateral Agreement and the New Holdings Note Documents.
(b) With respect to the Borrower and its Subsidiaries, engage at any
time in any business or business activity other than the business currently
conducted by it and reasonable extensions thereof and business activities
reasonably incidental thereto.
SECTION 6.09. Other Indebtedness and Agreements. (a) Permit any waiver,
supplement, modification, amendment, termination or release of any indenture,
instrument or agreement pursuant to which any Material Indebtedness of Holdings,
the Borrower or any of the Subsidiaries is outstanding if the effect of such
waiver, supplement, modification, amendment, termination or release would
materially increase the obligations of the obligor or confer additional material
rights on the holder of such Indebtedness in a manner adverse to Holdings, the
Borrower, any of the Subsidiaries or the Lenders unless such amended Material
Indebtedness could be incurred under Section 6.01.
(b) (i) Make any distribution, whether in cash, property, securities or
a combination thereof, other than regular scheduled payments of principal and
interest as and when due (to the extent not prohibited by applicable
subordination provisions), in respect of, or pay, or offer or commit to pay, or
directly or indirectly (including pursuant to any Synthetic Purchase Agreement)
redeem, repurchase, retire or otherwise acquire for consideration, or set apart
any sum for the aforesaid purposes, any subordinated Indebtedness, or (ii) pay
in cash any amount in respect of any Indebtedness or preferred Equity Interests
that may at the obligor's option be paid in kind or in other securities.
(c) Notwithstanding the foregoing, the Borrower shall be permitted to:
(i) expend up to $10,000,000 to optionally prepay, repurchase
or redeem any New Subordinated Notes so long as, after giving effect
thereto, (x) no Default or Event of Default shall have occurred and be
continuing or result therefrom, (y) the Leverage Ratio would be less
than 3.5 to 1.0 and (z) the Senior Leverage Ratio would be less than
1.5 to 1.0; and
(ii) use the Net Cash Proceeds of a Qualified Initial Public
Equity Offering to redeem or repurchase New Subordinated Notes in
accordance with the "equity clawback" or "equity repurchase" provisions
of the New Subordinated Note Indenture so long as (x) the Net Cash
Proceeds of such Qualified Initial Public Equity
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Offering are applied to prepay outstanding Term Loans to the extent
required by Section 2.13 and (y) after giving effect thereto, no
Default or Event of Default shall have occurred and be continuing or
result therefrom.
(d) Notwithstanding the foregoing, Holdings may prepay or redeem the
New Holdings Notes with the proceeds of any Restricted Payment under Section
6.06(a)(ii)(w), (x) or (y).
SECTION 6.10. Capital Expenditures. Permit the aggregate amount of
Capital Expenditures made by the Borrower and the Subsidiaries in any period set
forth below to exceed the amount set forth below for such period:
Period Amount
------ ------
Closing Date through July 2, 2003 $50,000,000
July 3, 2003 through June 30, 2004 $70,000,000
July 1, 2004 through June 29, 2005 $82,000,000
June 30, 2005 through June 28, 2006 $83,500,000
Each fiscal year thereafter $85,000,000
The amount of permitted Capital Expenditures set forth above in respect of any
fiscal period commencing with the fiscal period ending on or around June 30,
2003, shall be increased (but not decreased) by the sum of (a) an amount equal
to the aggregate amount of all Restricted Payments that may be made during such
year under Section 6.06(a)(ii)(y) that have not been so made and (b) 50% of the
amount of unused permitted Capital Expenditures for the immediately preceding
fiscal period (without giving effect to clause (a) and (b) of this sentence).
SECTION 6.11. Interest Coverage Ratio. Permit the Interest Coverage
Ratio for any period of four consecutive fiscal quarters, in each case taken as
one accounting period, ending with the last day of any fiscal quarter ending in
or around any period set forth below to be less than the ratio set forth
opposite such period below:
Period Ratio
------ -----
Closing Date through December 31, 2002 2.25 to 1.00
January 1, 2003 through September 30, 2003 2.375 to 1.00
October 1, 2003 through September 30, 2004 2.50 to 1.00
October 1, 2004 through September 30, 2005 2.625 to 1.00
October 1, 2005 through September 30, 2006 2.75 to 1.00
Thereafter 3.00 to 1.00
SECTION 6.12. Fixed Charge Coverage Ratio. Permit the Fixed Charge
Coverage Ratio for any period of four consecutive fiscal quarters, in each case
taken as one accounting period, ending with the last day of any fiscal quarter
to be less than 1.15 to 1.00.
SECTION 6.13. Maximum Leverage Ratio. Permit the Leverage Ratio as at
the last day of any fiscal quarter ending in or around any period set forth
below to be greater than the ratio set forth opposite such period below:
Period Ratio
------ -----
Closing Date through March 31, 2003 4.50 to 1.00
April 1, 2003 through September 30, 2003 4.25 to 1.00
October 1, 2003 through September 30, 2004 4.00 to 1.00
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October 1, 2004 through September 30, 2005 3.50 to 1.00
October 1, 2005 through September 30, 2006 3.00 to 1.00
Thereafter 2.75 to 1.00
SECTION 6.14. Fiscal Year. With respect to the Borrower, change its
fiscal year-end, except that within 30 days after the Closing Date the Borrower
may change its fiscal year to the Wednesday closest to June 30 of each year.
ARTICLE VII
Events of Default
In case of the happening of any of the following events ("Events of
Default"):
(a) any representation or warranty made or deemed made in or in
connection with any Loan Document or the borrowings or issuances of Letters of
Credit hereunder, or any representation, warranty, statement or information
contained in any report, certificate, financial statement or other instrument
furnished in connection with or pursuant to any Loan Document, shall prove to
have been false or misleading in any material respect when so made, deemed made
or furnished;
(b) default shall be made in the payment of any principal of any Loan
or the reimbursement with respect to any L/C Disbursement when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or by acceleration thereof or otherwise;
(c) default shall be made in the payment of any interest on any Loan or
any Fee or L/C Disbursement or any other amount (other than an amount referred
to in (b) above) due under any Loan Document, when and as the same shall become
due and payable, and such default shall continue unremedied for a period of five
Business Days;
(d) default shall be made in the due observance or performance by
Holdings, the Borrower or any Subsidiary of any covenant, condition or agreement
contained in Section 5.01(a) (with respect to Holdings and the Borrower only) or
5.08 or in Article VI;
(e) default shall be made in the due observance or performance by
Holdings, the Borrower or any Subsidiary of any covenant, condition or agreement
contained in any Loan Document (other than those specified in (b), (c) or (d)
above) and such default shall continue unremedied for a period of 30 days after
notice thereof from the Administrative Agent or any Lender to the Borrower;
(f) (i) Holdings, the Borrower or any Subsidiary shall (i) fail to pay
any principal or interest, regardless of amount, due in respect of any Material
Indebtedness, when and as the same shall become due and payable, or (ii) any
other event or condition occurs that results in any Material Indebtedness
becoming due prior to its scheduled maturity or that enables or permits (with or
without the giving of notice, the lapse of time or both) the holder or holders
of any Material Indebtedness or any trustee or agent on its or their behalf to
cause any Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity;
provided that this clause (ii) shall not apply to secured Indebtedness that
becomes due as a result of the voluntary sale or transfer of the property or
assets securing such Indebtedness;
69
(g) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i) relief
in respect of Holdings, the Borrower or any Subsidiary, or of a substantial part
of the property or assets of Holdings, the Borrower or a Subsidiary, under Title
11 of the United States Code, as now constituted or hereafter amended, or any
other Federal, state or foreign bankruptcy, insolvency, receivership or similar
law, (ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for Holdings, the Borrower or any Subsidiary or
for a substantial part of the property or assets of Holdings, the Borrower or a
Subsidiary or (iii) the winding-up or liquidation of Holdings, the Borrower or
any Subsidiary; and such proceeding or petition shall continue undismissed for
60 days or an order or decree approving or ordering any of the foregoing shall
be entered;
(h) Holdings, the Borrower or any Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking relief under Title 11 of
the United States Code, as now constituted or hereafter amended, or any other
Federal, state or foreign bankruptcy, insolvency, receivership or similar law,
(ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or the filing of any petition described in
(g) above, (iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for Holdings, the
Borrower or any Subsidiary or for a substantial part of the property or assets
of Holdings, the Borrower or any Subsidiary, (iv) file an answer admitting the
material allegations of a petition filed against it in any such proceeding, (v)
make a general assignment for the benefit of creditors, (vi) become unable,
admit in writing its inability or fail generally to pay its debts as they become
due or (vii) take any action for the purpose of effecting any of the foregoing;
(i) one or more judgments for the payment of money in an aggregate
amount in excess of $5,000,000 shall be rendered against Holdings, the Borrower,
any Subsidiary or any combination thereof and the same shall remain undischarged
for a period of 30 consecutive days during which execution shall not be
effectively stayed, or any action shall be legally taken by a judgment creditor
to levy upon assets or properties of Holdings, the Borrower or any Subsidiary to
enforce any such judgment;
(j) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other such ERISA Events, could
reasonably be expected to result in liability of the Borrower and its ERISA
Affiliates in an aggregate amount exceeding $5,000,000;
(k) any Guarantee under the Guarantee and Collateral Agreement for any
reason shall cease to be in full force and effect (other than in accordance with
its terms), or any Guarantor shall deny in writing that it has any further
liability under the Guarantee and Collateral Agreement (other than as a result
of the discharge of such Guarantor in accordance with the terms of the Loan
Documents);
(l) any security interest purported to be created by any Security
Document shall cease to be, or shall be asserted by the Borrower or any other
Loan Party not to be, a valid, perfected, first priority (except as otherwise
expressly provided in this Agreement or such Security Document) security
interest in the securities, assets or properties covered thereby, except to the
extent that any such loss of perfection or priority results from the failure of
the Collateral Agent to maintain possession of certificates representing
securities pledged under the Pledge Agreement and except to the extent that such
loss is covered by a lender's title insurance policy and the related insurer
promptly after such loss shall have acknowledged in writing that such loss is
covered by such title insurance policy;
(m) there shall have occurred a Change in Control;
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(n) default shall be made in the due observance or performance by the
Borrower or the Subsidiaries of greater than 10% of the aggregate number of
restaurant operating leases of the Borrower and the Subsidiaries, such that the
landlords under such leases would be entitled to terminated such leases; or
(o) the Indebtedness under the New Subordinated Notes or the New
Holdings Notes or any Guarantees thereof shall cease, for any reason, to be
validly subordinated to the Obligations, as provided in the New Subordinated
Note Documents or the New Holdings Note Documents, or any Loan Party or any
Affiliate of any Loan Party shall so assert;
then, and in every such event (other than an event with respect to Holdings or
the Borrower described in paragraph (g) or (h) above), and at any time
thereafter during the continuance of such event, the Administrative Agent may,
and at the request of the Required Lenders shall, by notice to the Borrower,
take either or both of the following actions, at the same or different times:
(i) terminate forthwith the Commitments and (ii) declare the Loans then
outstanding to be forthwith due and payable in whole or in part, whereupon the
principal of the Loans so declared to be due and payable, together with accrued
interest thereon and any unpaid accrued Fees and all other liabilities of the
Borrower accrued hereunder and under any other Loan Document, shall become
forthwith due and payable, without presentment, demand, protest or any other
notice of any kind, all of which are hereby expressly waived by the Borrower,
anything contained herein or in any other Loan Document to the contrary
notwithstanding; and in any event with respect to Holdings or the Borrower
described in paragraph (g) or (h) above, the Commitments shall automatically
terminate and the principal of the Loans then outstanding, together with accrued
interest thereon and any unpaid accrued Fees and all other liabilities of the
Borrower accrued hereunder and under any other Loan Document, shall
automatically become due and payable, without presentment, demand, protest or
any other notice of any kind, all of which are hereby expressly waived by the
Borrower, anything contained herein or in any other Loan Document to the
contrary notwithstanding.
ARTICLE VIII
The Administrative Agent and the Collateral Agent
Each of the Lenders and the Issuing Bank hereby irrevocably appoints
the Administrative Agent and the Collateral Agent (for purposes of this Article
VIII, the Administrative Agent and the Collateral Agent are referred to
collectively as the "Agents") its agent and authorizes the Agents to take such
actions on its behalf and to exercise such powers as are delegated to such Agent
by the terms of the Loan Documents, together with such actions and powers as are
reasonably incidental thereto. Without limiting the generality of the foregoing,
the Agents are hereby expressly authorized to execute any and all documents
(including releases) with respect to the Collateral and the rights of the
Secured Parties with respect thereto, as contemplated by and in accordance with
the provisions of this Agreement and the Security Documents.
The bank serving as the Administrative Agent and/or the Collateral
Agent hereunder shall have the same rights and powers in its capacity as a
Lender as any other Lender and may exercise the same as though it were not an
Agent, and such bank and its Affiliates may accept deposits from, lend money to
and generally engage in any kind of business with Holdings, the Borrower or any
Subsidiary or other Affiliate thereof as if it were not an Agent hereunder.
Neither Agent shall have any duties or obligations except those
expressly set forth in the Loan Documents. Without limiting the generality of
the foregoing, (a) neither Agent
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shall be subject to any fiduciary or other implied duties, regardless of whether
a Default has occurred and is continuing, (b) neither Agent shall have any duty
to take any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated hereby that such Agent is
required to exercise in writing by the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.08), and (c) except as expressly set forth in the Loan
Documents, neither Agent shall have any duty to disclose, nor shall it be liable
for the failure to disclose, any information relating to Holdings, the Borrower
or any of the Subsidiaries that is communicated to or obtained by the bank
serving as Administrative Agent and/or Collateral Agent or any of its Affiliates
in any capacity. Neither Agent shall be liable for any action taken or not taken
by it with the consent or at the request of the Required Lenders (or such other
number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 9.08) or in the absence of its own gross
negligence or wilful misconduct. Neither Agent shall be deemed to have knowledge
of any Default unless and until written notice thereof is given to such Agent by
Holdings, the Borrower or a Lender, and neither Agent shall be responsible for
or have any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with any Loan Document, (ii) the
contents of any certificate, report or other document delivered thereunder or in
connection therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth in any Loan
Document, (iv) the validity, enforceability, effectiveness or genuineness of any
Loan Document or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article IV or elsewhere in any Loan
Document, other than to confirm receipt of items expressly required to be
delivered to such Agent.
Each Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper person. Each Agent may also rely
upon any statement made to it orally or by telephone and believed by it to have
been made by the proper person, and shall not incur any liability for relying
thereon. Each Agent may consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.
Each Agent may perform any and all its duties and exercise its rights
and powers by or through any one or more sub-agents appointed by it. Each Agent
and any such sub-agent may perform any and all its duties and exercise its
rights and powers by or through their respective Related Parties. The
exculpatory provisions of the preceding paragraphs shall apply to any such
sub-agent and to the Related Parties of each Agent and any such sub-agent, and
shall apply to their respective activities in connection with the syndication of
the credit facilities provided for herein as well as activities as Agent.
Subject to the appointment and acceptance of a successor Agent as
provided below, either Agent may resign at any time by notifying the Lenders,
the Issuing Bank and the Borrower. Upon any such resignation, the Required
Lenders shall have the right, in consultation and (except during the continuance
of an Event of Default) with the prior approval of the Borrower, to appoint a
successor. If no successor shall have been so appointed by the Required Lenders
and shall have accepted such appointment within 30 days after the retiring Agent
gives notice of its resignation, then the retiring Agent may, on behalf of the
Lenders and the Issuing Bank, appoint a successor Agent which shall be a bank
with an office in New York, New York, or an Affiliate of any such bank and
(except during the continuance of an Event of Default) shall be acceptable to
the Borrower. Upon the acceptance of its appointment as Agent hereunder by a
successor, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring
72
Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder. The fees payable by the Borrower to a successor Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor. After an Agent's resignation hereunder,
the provisions of this Article and Section 9.05 shall continue in effect for the
benefit of such retiring Agent, its sub-agents and their respective Related
Parties in respect of any actions taken or omitted to be taken by any of them
while acting as Agent.
Each Lender acknowledges that it has, independently and without
reliance upon the Agents or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Agents or any other Lender and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement or any other Loan Document, any related
agreement or any document furnished hereunder or thereunder.
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices. Notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail or sent by fax, as follows:
(a) if to the Borrower or Holdings, to it at 0000 Xxxxxx Xxx,
Xxxxx, XX 00000, Attention of H. Xxxxxx Xxxxxxxx (Fax No. (651)
365-2356), with a copy to Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx,
0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX 00000, Attention of Xxxx X.
Xxxxxxxx and Xxxxxx-Xxxxxx Capital, Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx,
XX 00000, Attention of Xxxx Xxxxxx;
(b) if to the Administrative Agent, to Credit Suisse First
Boston, Eleven Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention of Agency
Group (Fax No. (000) 000-0000; and
(c) if to a Lender, to it at its address (or fax number) set
forth on Schedule 2.01 or in the Assignment and Acceptance pursuant to
which such Lender shall have become a party hereto.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by fax
or on the date five Business Days after dispatch by certified or registered mail
if mailed, in each case delivered, sent or mailed (properly addressed) to such
party as provided in this Section 9.01 or in accordance with the latest
unrevoked direction from such party given in accordance with this Section 9.01.
Any party hereto may change its address for notices by giving notice of such
change to each party hereto in accordance with this Section 9.01.
SECTION 9.02. Survival of Agreement. All covenants, agreements,
representations and warranties made by the Borrower or Holdings herein and in
the certificates or other instruments prepared or delivered in connection with
or pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Lenders and the Issuing Bank and shall survive the
making by the Lenders of the Loans and the issuance of
73
Letters of Credit by the Issuing Bank, regardless of any investigation made by
the Lenders or the Issuing Bank or on their behalf, and shall continue in full
force and effect as long as the principal of or any accrued interest on any Loan
or any Fee or any other amount payable under this Agreement or any other Loan
Document is outstanding and unpaid or any Letter of Credit is outstanding and so
long as the Commitments have not been terminated. The provisions of Sections
2.14, 2.16, 2.20 and 9.05 shall remain operative and in full force and effect
regardless of the expiration of the term of this Agreement, the consummation of
the transactions contemplated hereby, the repayment of any of the Loans, the
expiration of the Commitments, the expiration of any Letter of Credit, the
invalidity or unenforceability of any term or provision of this Agreement or any
other Loan Document, or any investigation made by or on behalf of the
Administrative Agent, the Collateral Agent, any Lender or the Issuing Bank.
SECTION 9.03. Binding Effect. This Agreement shall become effective
when it shall have been executed by the Borrower, Holdings and the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof which, when taken together, bear the signatures of each of
the other parties hereto.
SECTION 9.04. Successors and Assigns. (a) Whenever in this Agreement
any of the parties hereto is referred to, such reference shall be deemed to
include the permitted successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of the Borrower, Holdings, the
Administrative Agent, the Collateral Agent, the Issuing Bank or the Lenders that
are contained in this Agreement shall bind and inure to the benefit of their
respective successors and assigns.
(b) Each Lender may assign to one or more assignees all or a portion of
its interests, rights and obligations under this Agreement (including all or a
portion of its Commitments and the Loans at the time owing to it); provided,
however, that (i) except in the case of an assignment to a Lender or an
Affiliate or Related Fund of a Lender, (x) the Borrower and the Administrative
Agent (and, in the case of any assignment of a Revolving Credit Commitment, the
Issuing Bank and the Swingline Lender) must give their prior written consent to
such assignment (which consent shall not be unreasonably withheld or delayed);
provided, however, that the consent of the Borrower shall not be required to any
such assignment during the continuance of any Event of Default, and (y) the
amount of the Commitment of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Administrative Agent) shall not be less than
$1,000,000 (or, if less, the entire remaining amount of such Lender's
Commitment), (ii) subject to Section 9.04(k), the parties to each such
assignment shall execute and deliver to the Administrative Agent an Assignment
and Acceptance, together (except in the case of any assignment to an Affiliate
or a Related Fund) with a processing and recordation fee of $3,500 and (iii) the
assignee, if it shall not be a Lender, shall deliver to the Administrative Agent
an Administrative Questionnaire. Upon acceptance and recording pursuant to
paragraph (e) of this Section 9.04, from and after the effective date specified
in each Assignment and Acceptance, (A) the assignee thereunder shall be a party
hereto and, to the extent of the interest assigned by such Assignment and
Acceptance, have the rights and obligations of a Lender under this Agreement and
(B) the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of an assigning Lender's rights and obligations
under this Agreement, such Lender shall cease to be a party hereto but shall
continue to be entitled to the benefits of Sections 2.14, 2.16, 2.20 and 9.05,
as well as to any Fees accrued for its account and not yet paid).
(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with
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each other and the other parties hereto as follows: (i) such assigning Lender
warrants that it is the legal and beneficial owner of the interest being
assigned thereby free and clear of any adverse claim and that its Commitments,
and the outstanding balances of its Loans, in each case without giving effect to
assignments thereof which have not become effective, are as set forth in such
Assignment and Acceptance, (ii) except as set forth in (i) above, such assigning
Lender makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement, any other
Loan Document or any other instrument or document furnished pursuant hereto, or
the financial condition of the Borrower or any Subsidiary or the performance or
observance by the Borrower or any Subsidiary of any of its obligations under
this Agreement, any other Loan Document or any other instrument or document
furnished pursuant hereto; (iii) such assignee represents and warrants that it
is legally authorized to enter into such Assignment and Acceptance; (iv) such
assignee confirms that it has received a copy of this Agreement, together with
copies of the most recent financial statements referred to in Section 3.05(a) or
delivered pursuant to Section 5.04 and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance; (v) such assignee will independently and
without reliance upon the Administrative Agent, the Collateral Agent, such
assigning Lender or any other Lender and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement; (vi) such
assignee appoints and authorizes the Administrative Agent and the Collateral
Agent to take such action as agent on its behalf and to exercise such powers
under this Agreement as are delegated to the Administrative Agent and the
Collateral Agent, respectively, by the terms hereof, together with such powers
as are reasonably incidental thereto; and (vii) such assignee agrees that it
will perform in accordance with their terms all the obligations which by the
terms of this Agreement are required to be performed by it as a Lender.
(d) The Administrative Agent, acting for this purpose as an agent of
the Borrower, shall maintain at one of its offices in The City of New York a
copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the "Register"). The entries in the Register shall be
conclusive and the Borrower, the Administrative Agent, the Issuing Bank, the
Collateral Agent and the Lenders may treat each person whose name is recorded in
the Register pursuant to the terms hereof as a Lender hereunder for all purposes
of this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower, the Issuing Bank, the Collateral Agent
and any Lender, at any reasonable time and from time to time upon reasonable
prior notice.
(e) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, an Administrative Questionnaire
completed in respect of the assignee (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph
(b) above and, if required, the written consent of the Borrower, the Swingline
Lender, the Issuing Bank and the Administrative Agent to such assignment, the
Administrative Agent shall (i) accept such Assignment and Acceptance and (ii)
record the information contained therein in the Register. No assignment shall be
effective unless it has been recorded in the Register as provided in this
paragraph (e).
(f) Each Lender may without the consent of the Borrower, the Swingline
Lender, the Issuing Bank or the Administrative Agent sell participations to one
or more banks or other entities in all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans owing to it); provided, however, that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
75
remain solely responsible to the other parties hereto for the performance of
such obligations, (iii) the participating banks or other entities shall be
entitled to the benefit of the cost protection provisions contained in Sections
2.14, 2.16 and 2.20 and shall be bound by the confidentiality provisions
contained in Section 9.16 to the same extent as if they were Lenders and (iv)
the Borrower, the Administrative Agent, the Issuing Bank and the Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement, and such Lender shall
retain the sole right to enforce the obligations of the Borrower relating to the
Loans or L/C Disbursements and to approve any amendment, modification or waiver
of any provision of this Agreement (other than amendments, modifications or
waivers decreasing any fees payable hereunder or the amount of principal of or
the rate at which interest is payable on the Loans, extending any scheduled
principal payment date or date fixed for the payment of interest on the Loans,
increasing or extending the Commitments or releasing any Guarantor or all or any
substantial part of the Collateral). All amounts payable by the Borrower to any
Lender hereunder in respect of any Loan and the applicability of the cost
protection provisions contained in Section 2.14, 2.16 and 2.20 shall be
determined as if such Lender had not sold or agreed to sell any participation in
such Loan, and as if such Lender were funding the participated portion of such
Loan the same way that it is funding the portion of such Loan in which no
participation has been sold.
(g) Any Lender or participant may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
9.04, disclose to the assignee or participant or proposed assignee or
participant any information relating to the Borrower furnished to such Lender by
or on behalf of the Borrower; provided that, prior to any such disclosure of
information designated by the Borrower as confidential, each such assignee or
participant or proposed assignee or participant shall execute an agreement
whereby such assignee or participant shall agree (subject to customary
exceptions) to preserve the confidentiality of such confidential information on
terms no less restrictive than those applicable to the Lenders pursuant to
Section 9.16.
(h) Any Lender may at any time assign all or any portion of its rights
under this Agreement to secure extensions of credit to such Lender or in support
of obligations owed by such Lender; provided that no such assignment shall
release a Lender from any of its obligations hereunder or substitute any such
assignee for such Lender as a party hereto. Any Lender that is a fund that
invests in bank loans may (without the consent of the Borrower or the
Administrative Agent) pledge all or any portion of its rights in connection with
this Agreement to the trustee for holders of obligations owed, or securities
issued, by such fund as security for such obligations or securities, provided
that any foreclosure or other exercise of remedies by such trustee shall be
subject to the provisions of this Section 9.04 regarding assignments in all
respects. No pledge described in the immediately preceding sentence shall
release such Lender from its obligations hereunder.
(i) Notwithstanding anything to the contrary contained herein, any
Lender (a "Granting Lender") may grant to a special purpose funding vehicle (an
"SPC"), identified as such in writing from time to time by the Granting Lender
to the Administrative Agent and the Borrower, the option to provide to the
Borrower all or any part of any Loan that such Granting Lender would otherwise
be obligated to make to the Borrower pursuant to this Agreement; provided that
(i) nothing herein shall constitute a commitment by any SPC to make any Loan and
(ii) if an SPC elects not to exercise such option or otherwise fails to provide
all or any part of such Loan, the Granting Lender shall be obligated to make
such Loan pursuant to the terms hereof. The making of a Loan by an SPC hereunder
shall utilize the Commitment of the Granting Lender to the same extent, and as
if, such Loan were made by such Granting Lender. Each party hereto hereby agrees
that no SPC shall be liable for any indemnity or similar payment obligation
under this Agreement (all liability for which shall remain with the Granting
Lender). In furtherance of the foregoing, each party hereto hereby
76
agrees (which agreement shall survive the termination of this Agreement) that,
prior to the date that is one year and one day after the payment in full of all
outstanding commercial paper or other senior indebtedness of any SPC, it will
not institute against, or join any other person in instituting against, such SPC
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under the laws of the United States or any State thereof. In
addition, notwithstanding anything to the contrary contained in this Section
9.04, any SPC may (i) with notice to, but without the prior written consent of,
the Borrower and the Administrative Agent and without paying any processing fee
therefor, assign all or a portion of its interests in any Loans to the Granting
Lender or to any financial institutions (consented to by the Borrower and
Administrative Agent) providing liquidity and/or credit support to or for the
account of such SPC to support the funding or maintenance of Loans and (ii)
disclose on a confidential basis any non-public information relating to its
Loans to any rating agency, commercial paper dealer or provider of any surety,
guarantee or credit or liquidity enhancement to such SPC.
(j) Neither Holdings nor the Borrower shall assign or delegate any of
its rights or duties hereunder without the prior written consent of the
Administrative Agent, the Issuing Bank and each Lender, and any attempted
assignment without such consent shall be null and void.
(k) Notwithstanding the foregoing, the processing and recordation fee
payable to the Administrative Agent pursuant to paragraph (b) above shall be
waived in connection with any assignment made to either (i) a person that is not
a bank, an investment bank or an Affiliate of a bank or an investment bank or
(ii) a bank, an investment bank or an Affiliate of a bank or an investment bank
(a "Financial Institution") which has, to the satisfaction of the Administrative
Agent, announced and adopted a general policy that (x) is in effect on the date
of the proposed assignment, (y) is binding on such Financial Institution and (z)
provides that such Financial Institution has agreed to waive its rights to
receive all similar processing, recordation or assignment fees which would be
payable as a result of an assignment by any person of any commitments, loans or
other extensions of credit under a syndicated leveraged credit facility.
SECTION 9.05. Expenses; Indemnity. (a) The Borrower and Holdings agree,
jointly and severally, to pay all reasonable out-of-pocket expenses incurred by
the Administrative Agent, the Collateral Agent, the Issuing Bank and the
Swingline Lender in connection with the syndication of the credit facilities
provided for herein and the preparation and administration of this Agreement and
the other Loan Documents or in connection with any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
hereby or thereby contemplated shall be consummated) or incurred by the
Administrative Agent, the Collateral Agent or any Lender in connection with the
enforcement or protection of its rights in connection with this Agreement and
the other Loan Documents or in connection with the Loans made or Letters of
Credit issued hereunder, including the reasonable fees, charges and
disbursements of Cravath, Swaine & Xxxxx, counsel for the Administrative Agent
and the Collateral Agent, and, in connection with any such enforcement or
protection, the fees, charges and disbursements of any other counsel for the
Administrative Agent, the Collateral Agent or any Lender.
(b) The Borrower and Holdings agree, jointly and severally, to
indemnify the Administrative Agent, the Collateral Agent, each Lender, the
Issuing Bank and each Related Lender Party of any of the foregoing persons (each
such person being called an "Indemnitee") against, and to hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and related
expenses, including reasonable counsel fees, charges and disbursements, incurred
by or asserted against any Indemnitee arising out of, in any way connected with,
or as a result of (i) the execution or delivery of this Agreement or any other
Loan Document or any agreement or instrument contemplated thereby, the
performance by
77
the parties thereto of their respective obligations thereunder or the
consummation of the Transactions and the other transactions contemplated
thereby, (ii) the use of the proceeds of the Loans or issuance of Letters of
Credit, (iii) any claim, litigation, investigation or proceeding relating to any
of the foregoing, whether or not any Indemnitee is a party thereto, or (iv) any
actual or alleged presence or Release of Hazardous Materials on any property
currently or formerly owned or operated by the Borrower or any of the
Subsidiaries, or any Environmental Liability related in any way to the Borrower
or the Subsidiaries; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or wilful misconduct of such Indemnitee.
(c) To the extent that Holdings and the Borrower fail to pay any amount
required to be paid by them to the Administrative Agent, the Collateral Agent,
the Issuing Bank or the Swingline Lender under paragraph (a) or (b) of this
Section, each Lender severally agrees to pay to the Administrative Agent, the
Collateral Agent, the Issuing Bank or the Swingline Lender, as the case may be,
such Lender's pro rata share (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount;
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent, the Collateral Agent, the Issuing Bank or the
Swingline Lender in its capacity as such. For purposes hereof, a Lender's "pro
rata share" shall be determined based upon its share of the sum of the Aggregate
Revolving Credit Exposure, outstanding Term Loans and unused Commitments at the
time.
(d) To the extent permitted by applicable law, neither Holdings nor the
Borrower shall assert, and each hereby waives, any claim against any Indemnitee,
on any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of, this Agreement or any agreement or instrument
contemplated hereby, the Transactions, any Loan or Letter of Credit or the use
of the proceeds thereof.
(e) The provisions of this Section 9.05 shall remain operative and in
full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the expiration of the Commitments, the expiration
of any Letter of Credit, the invalidity or unenforceability of any term or
provision of this Agreement or any other Loan Document, or any investigation
made by or on behalf of the Administrative Agent, the Collateral Agent, any
Lender or the Issuing Bank. All amounts due under this Section 9.05 shall be
payable on written demand therefor.
SECTION 9.06. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender is hereby authorized at any time and
from time to time, except to the extent prohibited by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender to or
for the credit or the account of the Borrower or Holdings against any of and all
the obligations of the Borrower or Holdings now or hereafter existing under this
Agreement and other Loan Documents held by such Lender, irrespective of whether
or not such Lender shall have made any demand under this Agreement or such other
Loan Document and although such obligations may be unmatured. The rights of each
Lender under this Section 9.06 are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.
SECTION 9.07. Applicable Law. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS (OTHER THAN LETTERS OF CREDIT AND AS EXPRESSLY SET FORTH IN OTHER LOAN
DOCUMENTS) SHALL BE CONSTRUED IN
78
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. EACH LETTER
OF CREDIT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE
LAWS OR RULES DESIGNATED IN SUCH LETTER OF CREDIT, OR IF NO SUCH LAWS OR RULES
ARE DESIGNATED, THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS MOST
RECENTLY PUBLISHED AND IN EFFECT, ON THE DATE SUCH LETTER OF CREDIT WAS ISSUED,
BY THE INTERNATIONAL CHAMBER OF COMMERCE (THE "UNIFORM CUSTOMS") AND, AS TO
MATTERS NOT GOVERNED BY THE UNIFORM CUSTOMS, THE LAWS OF THE STATE OF NEW YORK.
SECTION 9.08. Waivers; Amendment. (a) No failure or delay of the
Administrative Agent, the Collateral Agent, any Lender or the Issuing Bank in
exercising any power or right hereunder or under any other Loan Document shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce
such a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of the
Administrative Agent, the Collateral Agent, the Issuing Bank and the Lenders
hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of this Agreement or any other Loan Document or consent to any
departure by the Borrower or any other Loan Party therefrom shall in any event
be effective unless the same shall be permitted by paragraph (b) below, and then
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given. No notice or demand on the Borrower or Holdings in
any case shall entitle the Borrower or Holdings to any other or further notice
or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Borrower, Holdings and the Required Lenders (except as
provided in Section 2.24); provided, however, that no such agreement shall (i)
decrease the principal amount of, or extend the maturity of or any scheduled
principal payment date or date for the payment of any interest on any Loan or
any date for reimbursement of an L/C Disbursement, or waive or excuse any such
payment or any part thereof, or decrease the rate of interest on any Loan or L/C
Disbursement, without the prior written consent of each Lender adversely
affected thereby, (ii) increase or extend the Commitment or decrease or extend
the date for payment of any Fees of any Lender without the prior written consent
of such Lender, (iii) amend or modify the pro rata requirements of Section 2.17,
the provisions of Section 9.04(j), the provisions of this Section, the
definition of the term "Required Lenders" or release any Guarantor or all or any
substantial part of the Collateral (except as provided in Section 9.17), without
the prior written consent of each Lender, (iv) change the provisions of any Loan
Document in a manner that by its terms adversely affects the rights in respect
of payments due to Lenders holding Loans of one Class differently from the
rights of Lenders holding Loans of any other Class without the prior written
consent of Lenders holding a majority in interest of the outstanding Loans and
unused Commitments of each adversely affected Class, or (v) modify the
protections afforded to an SPC pursuant to the provisions of Section 9.04(i)
without the written consent of such SPC; provided further that no such agreement
shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent, the Collateral Agent, the Issuing Bank or the Swingline
Lender hereunder or under any other Loan Document without the prior written
consent of the Administrative Agent, the Collateral Agent, the Issuing Bank or
the Swingline Lender, respectively. Notwithstanding the foregoing and except as
provided in Section 9.17, if the Borrower shall request the release of any
Collateral to be sold as part of any Asset Sale permitted under Section 6.05 and
shall deliver to the Collateral Agent a certificate to the effect that such
Asset Sale and the disposition of the proceeds thereof will comply with the
terms of this Agreement, the Collateral Agent, if satisfied that the applicable
certificate is correct, shall and is hereby
79
authorized to, without the consent of any Lender, execute and deliver all such
instruments as may be required to effect the release of such Collateral.
SECTION 9.09. Interest Rate Limitation. Notwithstanding anything herein
to the contrary, if at any time the interest rate applicable to any Loan or
participation in any L/C Disbursement, together with all fees, charges and other
amounts which are treated as interest on such Loan or participation in such L/C
Disbursement under applicable law (collectively the "Charges"), shall exceed the
maximum lawful rate (the "Maximum Rate") which may be contracted for, charged,
taken, received or reserved by the Lender holding such Loan or participation in
accordance with applicable law, the rate of interest payable in respect of such
Loan or participation hereunder, together with all Charges payable in respect
thereof, shall be limited to the Maximum Rate and, to the extent lawful, the
interest and Charges that would have been payable in respect of such Loan or
participation but were not payable as a result of the operation of this Section
9.09 shall be cumulated and the interest and Charges payable to such Lender in
respect of other Loans or participations or periods shall be increased (but not
above the Maximum Rate therefor) until such cumulated amount, together with
interest thereon at the Federal Funds Effective Rate to the date of repayment,
shall have been received by such Lender.
SECTION 9.10. Entire Agreement. This Agreement, the Fee Letter and the
other Loan Documents constitute the entire contract between the parties relative
to the subject matter hereof. Any other previous agreement among the parties
with respect to the subject matter hereof is superseded by this Agreement and
the other Loan Documents. Nothing in this Agreement or in the other Loan
Documents, expressed or implied, is intended to confer upon any person (other
than the parties hereto and thereto, their respective successors and assigns
permitted hereunder (including any Affiliate of the Issuing Bank that issues any
Letter of Credit) and, to the extent expressly contemplated hereby, the Related
Parties of each of the Administrative Agent, the Collateral Agent, the Issuing
Bank and the Lenders) any rights, remedies, obligations or liabilities under or
by reason of this Agreement or the other Loan Documents.
SECTION 9.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS.
EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.11.
SECTION 9.12. Severability. In the event any one or more of the
provisions contained in this Agreement or in any other Loan Document should be
held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired thereby (it being understood that
the invalidity of a particular provision in a particular jurisdiction shall not
in and of itself affect the validity of such provision in any other
jurisdiction). The parties shall endeavor in good-faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
80
SECTION 9.13. Counterparts. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original but all of which when taken together shall
constitute a single contract, and shall become effective as provided in Section
9.03. Delivery of an executed signature page to this Agreement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Agreement.
SECTION 9.14. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
SECTION 9.15. Jurisdiction; Consent to Service of Process. (a) Each of
Holdings and the Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any New York State
court or Federal court of the United States of America sitting in New York City,
and any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Agreement or the other Loan Documents, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State or,
to the extent permitted by law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that the Administrative Agent, the Collateral Agent, the Issuing Bank or
any Lender may otherwise have to bring any action or proceeding relating to this
Agreement or the other Loan Documents against the Borrower, Holdings or their
respective properties in the courts of any jurisdiction.
(b) Each of Holdings and the Borrower hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
the other Loan Documents in any New York State or Federal court. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 9.16. Confidentiality. Each of the Administrative Agent, the
Collateral Agent, the Issuing Bank and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates' officers, directors, employees
and agents, including accountants, legal counsel and other advisors (it being
understood that the persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory
authority or quasi-regulatory authority (such as the National Association of
Insurance Commissioners), (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) in connection with
the exercise of any remedies hereunder or under the other Loan Documents or any
suit, action or proceeding relating to the enforcement of its rights hereunder
or thereunder, (e) subject to an agreement containing provisions substantially
the same as those of this Section 9.16, to (i) any actual or prospective
assignee of or participant in any of its rights or obligations under this
Agreement and the other Loan Documents or (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
the Borrower or any Subsidiary or any of their respective
81
obligations, (f) with the consent of the Borrower or (g) to the extent such
Information becomes publicly available other than as a result of a breach of
this Section 9.16. For the purposes of this Section, "Information" shall mean
all information received from the Borrower or Holdings and related to the
Borrower or Holdings or their business, other than any such information that was
available to the Administrative Agent, the Collateral Agent, the Issuing Bank or
any Lender on a nonconfidential basis prior to its disclosure by the Borrower or
Holdings; provided that, in the case of Information received from the Borrower
or Holdings after the date hereof, such information is clearly identified at the
time of delivery as confidential or such information is of such a nature that a
prudent person would expect such information to be confidential. Any person
required to maintain the confidentiality of Information as provided in this
Section 9.16 shall be considered to have complied with its obligation to do so
if such person has exercised the same degree of care to maintain the
confidentiality of such Information as such person would accord its own
confidential information.
SECTION 9.17. Release of Collateral. (a) Notwithstanding any other
provision of this Agreement or the Guarantee and Collateral Agreement, all
Collateral in respect of Sale-Leaseback B, Sale-Leaseback C or the Roadhouse
Disposition or owned by Tahoe Joe's (to the extent applicable), as the case may
be, held under the Guarantee and Collateral Agreement shall be released from the
Liens created thereunder, in each case without representation, warranty or
recourse of any nature, on a Business Day specified by the Borrower (the
"Release Date"), and the provisions of Section 5.06, 5.09 and 5.10 of this
Agreement insofar as they relate to such Collateral shall cease to be of any
force and effect, upon satisfaction of the following conditions precedent: (i)
the Borrower shall have given written notice to the Administrative Agent at
least five Business Days' (or such shorter period as shall be acceptable to the
Administrative Agent) prior to the Release Date, specifying the proposed Release
Date; (ii) as of the Release Date, Sale-Leaseback B, Sale-Leaseback C, the
Roadhouse Disposition, a Qualified Tahoe Joe's Equity Offering or a Tahoe Joe's
Dividend, as the case may be, shall have been consummated; (iii) no Default or
Event of Default shall have occurred and be continuing as of the Release Date;
and (iv) on the Release Date, the Collateral Agent shall have received a
certificate, dated the Release Date and executed on behalf of the Borrower by a
Financial Officer of the Borrower, confirming the satisfaction of the conditions
precedent set forth in clauses (ii) and (iii) above.
(b) Upon the release of Collateral owned by Tahoe Joe's pursuant to
paragraph (a) above, Tahoe Joe's shall automatically (x) be released from its
Guarantee under the Guarantee and Collateral Agreement and cease to be a
Subsidiary Guarantor and (y) be deemed not to be a Subsidiary of the Borrower or
a Loan Party for purposes of the Loan Documents.
(c) Subject to the satisfaction of the conditions set forth in
paragraph (a) above, on or after the Release Date, the Lenders hereby expressly
authorize the Collateral Agent to, and the Collateral Agent hereby agrees to,
execute and deliver to the Borrower all such financing statements, agreements,
instruments and documents as the Borrower may reasonably request to effectuate,
evidence or confirm the release of Collateral provided for in this Section 9.17.
Any execution and delivery of documents pursuant to this Section 9.17 shall be
without recourse to or warranty by the Collateral Agent.
(d) Without limiting the provisions of Section 9.05, the Borrower shall
reimburse the Administrative Agent, the Collateral Agent and the Lenders upon
demand for all costs and expenses, including the fees, charges and disbursements
of counsel, incurred by any of them in connection with any action contemplated
by this Section 9.17.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
BUFFETS, INC.,
by /s/ R. Xxxxxxx Xxxxxxx
------------------------------
Name: R. Xxxxxxx Xxxxxxx
Title: EVP
BUFFETS HOLDINGS, INC.,
by /s/ R. Xxxxxxx Xxxxxxx
------------------------------
Name: R. Xxxxxxx Xxxxxxx
Title: EVP
CREDIT SUISSE FIRST BOSTON,
individually and as Administrative Agent,
Collateral Agent and as Swingline Lender,
by /s/ Xxxxxx Xxxx
------------------------------
Name: Xxxxxx Xxxx
Title: Director
by /s/ Xxxxx X. Xxxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
FLEET NATIONAL BANK, individually and
as Issuing Bank,
by /s/ Xxxxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxxxx X. Xxxxx
Title: Vice President
SIGNATURE PAGE TO BUFFETS INC.
CREDIT AGREEMENT DATED AS OF
JUNE 28, 2002
NAME OF INSTITUTION: Credit Industriel et Commercial
-------------------------------
by /s/ Xxxx Mournier /s/ Xxxxxx Xxxxxx
--------------------------- -----------------
Name: Xxxx Mournier Xxxxxx Xxxxxx
Title: First Vice President Vice President
SIGNATURE PAGE TO BUFFETS INC.
CREDIT AGREEMENT DATED AS OF
JUNE 28, 2002
NAME OF INSTITUTION: US Bank National Association
----------------------------
by /s/ Xxxxx X. Xxxxxxxx
-------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SIGNATURE PAGE TO BUFFETS INC.
CREDIT AGREEMENT DATED AS OF
JUNE 28, 2002
NAME OF INSTITUTION: KZH CypressTree-1 LLC
---------------------
by /s/ Xxxxx Xxx
-----------------------
Name: Xxxxx Xxx
Title: Authorized Agent
SIGNATURE PAGE TO BUFFETS INC.
CREDIT AGREEMENT DATED AS OF
JUNE 28, 2002
NAME OF INSTITUTION: KZH Riverside LLC
---------------------
by /s/ Xxxxx Xxx
-----------------------
Name: Xxxxx Xxx
Title: Authorized Agent
SIGNATURE PAGE TO BUFFETS INC.
CREDIT AGREEMENT DATED AS OF
JUNE 28, 2002
NAME OF INSTITUTION: KZH Sterling LLC
---------------------
by /s/ Xxxxx Xxx
-----------------------
Name: Xxxxx Xxx
Title: Authorized Agent
SIGNATURE PAGE TO BUFFETS INC.
CREDIT AGREEMENT DATED AS OF
JUNE 28, 2002
NAME OF INSTITUTION: SKUDDER FLOATING RATE FUND
--------------------------
by /s/ Xxxxxxx Xxxxx
-------------------------
Name: Xxxxxxx Xxxxx
Title: Sr. Vice President
