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$375,000,000
CREDIT AGREEMENT
Dated as of November 28, 1997
Among
SHONEY'S, INC.
as Borrower,
THE INITIAL LENDERS, INITIAL ISSUING BANK AND
SWING LINE BANK NAMED HEREIN
as Initial Lenders, Initial Issuing Bank and Swing Line Bank,
NATIONSBANK, N.A.
as Administrative Agent
and
NATIONSBANC XXXXXXXXXX SECURITIES, INC.
as Syndication Agent
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T A B L E O F C O N T E N T S
SECTION PAGE
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01. Certain Defined Terms........................................................................... 1
1.02. Computation of Time Periods..................................................................... 26
1.03. Accounting Terms................................................................................ 27
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
2.01. The Advances.................................................................................... 27
2.02. Making the Advances............................................................................. 29
2.03. Issuance of and Drawings and Reimbursement Under Letters of Credit.............................. 32
2.04. Repayment of Advances........................................................................... 33
2.05. Termination or Reduction of the Commitments..................................................... 37
2.06. Prepayments..................................................................................... 37
2.07. Interest........................................................................................ 39
2.08. Fees............................................................................................ 40
2.09. Conversion of Advances.......................................................................... 41
2.10. Increased Costs, Etc............................................................................ 42
2.11. Payments and Computations....................................................................... 44
2.12. Taxes........................................................................................... 45
2.13. Sharing of Payments, Etc........................................................................ 47
2.14. Use of Proceeds and Issuance of Letters of Credit............................................... 48
2.15. Defaulting Lenders.............................................................................. 48
ARTICLE III
CONDITIONS OF LENDING
3.01. Conditions Precedent to Initial Extension of Credit............................................. 51
3.02. Conditions Precedent to Each Borrowing and Issuance............................................. 59
3.03. Determinations Under Section 3.01............................................................... 59
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.01. Representations and Warranties of the Borrower.................................................. 60
ARTICLE V
COVENANTS OF THE BORROWER
5.01. Affirmative Covenants........................................................................... 68
5.02. Negative Covenants.............................................................................. 82
5.03. Reporting Requirements.......................................................................... 91
5.04. Financial Covenants............................................................................. 94
ARTICLE VI
EVENTS OF DEFAULT
6.01. Events of Default............................................................................... 96
6.02. Actions in Respect of the Letters of Credit upon Default........................................100
ARTICLE VII
THE ADMINISTRATIVE AGENT
7.01. Authorization and Action........................................................................101
7.02. Agent's Reliance, Etc...........................................................................101
7.03. NationsBank and Affiliates......................................................................102
7.04. Lender Party Credit Decision....................................................................102
7.05. Indemnification.................................................................................102
7.06. Successor Agents................................................................................104
ARTICLE VIII
MISCELLANEOUS
8.01. Amendments, Etc.................................................................................105
8.02. Notices, Etc....................................................................................106
8.03. No Waiver; Remedies.............................................................................107
8.04. Costs, Expenses.................................................................................107
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8.05. Right of Set-off................................................................................109
8.06. Binding Effect..................................................................................109
8.07. Assignments and Participations..................................................................109
8.08. Execution in Counterparts.......................................................................112
8.09. No Liability of the Issuing Bank................................................................113
8.10. Confidentiality.................................................................................113
8.11. Jurisdiction, Etc...............................................................................113
8.12. Governing Law...................................................................................114
SECTION 8.13. Designation as Senior Indebtedness......................................................114
8.14. Waiver of Jury Trial............................................................................114
SCHEDULES
Schedule I - Commitments and Applicable Lending Offices
Schedule II - Applicable Margin
Schedule 3.01(d) - Disclosed Litigation
Schedule 3.01(g)(x) - Mortgaged Properties
Schedule 3.01(g)(xviii) - States in which Local Counsel are Located
Schedule 3.01(i) - Deeds
Schedule 3.01(j) - Fixture Filings
Schedule 4.01(b) - Subsidiaries
Schedule 4.01(m) - Plans, Multiemployer Plans and Welfare Plans
Schedule 4.01(v) - Environmental Lists
Schedule 4.01(aa) - Open Years
Schedule 4.01(gg) - Existing Debt
Schedule 4.01(hh) - Surviving Debt
Schedule 4.01(ii) - Owned Real Property
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Schedule 4.01(jj) - Leased Real Property
Schedule 4.01(kk) - Investments
Schedule 5.01(n)(i) - First American Mortgaged Properties
Schedule 5.01(n)(ii) - TPI Real Property
Schedule 5.02(a) - Existing Liens
Schedule 5.02(e) - Real Property to be Sold
Schedule 5.02(n) - Partnerships
Schedule 5.04 - Operate-to-Improve Stores
EXHIBITS
Exhibit A-1 - Form of Term A Note
Exhibit A-2 - Form of Term B Note
Exhibit A-3 - Form of Working Capital Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Form of Security Agreement
Exhibit E - Form of Intellectual Property Security Agreement
Exhibit F - Form of Mortgage
Exhibit G - Form of Subsidiary Guaranty
Exhibit H-1 - Form of Opinion of Borrower's Counsel
Exhibit H-2 - Form of Opinion of Borrower's Special New York Counsel
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Exhibit I - Form of Opinion of Special Intellectual Property Counsel
to the Administrative Agent
Exhibit J - Form of Opinion of Local Counsel to Administrative Agent
Exhibit K - Form of Solvency Certificate
Exhibit L - Form of Consolidated Income Statement for Fiscal Month
Exhibit M - Subordination Terms
Exhibit N - Master Lease
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CREDIT AGREEMENT
CREDIT AGREEMENT dated as of November 28, 1997 among SHONEY'S,
INC., a Tennessee corporation (the "Borrower"), the banks, financial
institutions and other institutional lenders listed on the signature pages
hereof as the Initial Lenders (the "Initial Lenders"), NATIONSBANK, N.A.
("NationsBank"), as the initial issuing bank (in such capacity, the "Initial
Issuing Bank"), FIRST AMERICAN NATIONAL BANK, as the swing line bank (in such
capacity, the "Swing Line Bank"), NATIONSBANK, as administrative agent (together
with any successor appointed pursuant to Article VII, the "Administrative
Agent") for the Lender Parties (as hereinafter defined), and NATIONSBANC
XXXXXXXXXX SECURITIES, INC. ("NMSI"), as arranger (in such capacity, the
"Arranger") and as syndication agent (in such capacity, the "Syndication Agent")
for the Lender Parties.
PRELIMINARY STATEMENT:
The Borrower has requested that the Lender Parties lend to it
up to $375,000,000 to refinance certain Existing Debt (as hereinafter defined)
of the Borrower and its Subsidiaries (as hereinafter defined) and to pay
transaction fees and expenses and that, from time to time, the Lender Parties
lend to the Borrower to provide working capital for the Borrower and its
Subsidiaries and issue Letters of Credit for the benefit of the Borrower. The
Lender Parties have indicated their willingness to agree to lend such amounts on
the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements contained herein, the parties hereto hereby
agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings (such meanings
to be equally applicable to both the singular and plural forms of the terms
defined):
"Account Credit Amount" has the meaning specified in Section
2.01(d).
"Account Debit Amount" has the meaning specified in Section
2.01(d).
"Administrative Agent" has the meaning specified in the
recital of parties to this Agreement.
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"Administrative Agent's Account" means the account of the
Administrative Agent maintained by the Administrative Agent with
NationsBank at its office at 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxxx
Center, 15th Floor, Xxxxxxxxx, XX 00000, ABA No. 000000000, Account No.
136621-2250600, Attention: Corporate Credit Services, Ref: Shoney's.
"Advance" means a Term A Advance, a Term B Advance, a Working
Capital Advance, a Swing Line Advance or a Letter of Credit Advance.
"Affiliate" means, as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common
control with such Person or is a director or officer of such Person.
For purposes of this definition, the term "control" (including the
terms "controlling," "controlled by" and "under common control with")
of a Person means the possession, direct or indirect, of the power to
vote 10% or more of the Voting Stock of such Person or to direct or
cause the direction of the management and policies of such Person,
whether through the ownership of Voting Stock, by contract or
otherwise.
"Applicable Lending Office" means, with respect to each Lender
Party, such Lender Party's Domestic Lending Office in the case of a
Prime Rate Advance and such Lender Party's Eurodollar Lending Office in
the case of a Eurodollar Rate Advance.
"Applicable Margin" means (x) prior to the date on which the
quarterly financial statements in respect of the fiscal quarter of the
Borrower ending May 10, 1998 are delivered to the Administrative Agent
pursuant to Section 5.03(c), (i) in respect of the Term A Facility and
the Working Capital Facility, 1-1/2% per annum for Prime Rate Advances
and 2-1/2% per annum for Eurodollar Rate Advances and (ii) in respect
of the Term B Facility, 2% per annum for Prime Rate Advances and 3% per
annum for Eurodollar Rate Advances and (y) thereafter a percentage per
annum determined by reference to the Leverage Ratio as set forth on
Schedule II. The Applicable Margin for each Prime Rate Advance shall be
determined by reference to the Leverage Ratio in effect from time to
time and the Applicable Margin for each Eurodollar Rate Advance shall
be determined by reference to the Leverage Ratio in effect on the first
day of each Interest Period for such Advance; provided, however, that
(A) no change in the Applicable Margin shall be effective until five
Business Days after the date on which the Administrative Agent receives
financial statements pursuant to Section 5.03(c) or (d) and a
certificate of the chief financial officer or principal financial
officer of the Borrower demonstrating such Leverage Ratio, and (B) if
the Borrower has not submitted to the Administrative Agent the
information described in clause (A) of this proviso as and when
required under Section 5.03(c) or (d), as the case may be, the
Applicable Margin shall be at Level 1
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as set forth on Schedule II for so long as such information has not
been received by the Administrative Agent.
"Appropriate Lender" means, at any time, with respect to (a)
any of the Term A, Term B or Working Capital Facilities, a Lender that
has a commitment with respect to such Facility at such time, (b) the
Letter of Credit Facility, (i) the Issuing Bank and (ii) if the other
Working Capital Lenders have made Letter of Credit Advances pursuant to
Section 2.03(c) that are outstanding at such time, each such other
Working Capital Lender and (c) the Swing Line Facility, the Swing Line
Bank.
"Arranger" has the meaning specified in the recital of parties
to this Agreement.
"Asset Impairment Charges" means all non-cash charges taken by
the Borrower and its Subsidiaries on or after October 26, 1997 in
accordance with Statement of Financial Accounting Standards No. 121.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender Party and an Eligible Assignee, and accepted
by the Administrative Agent, in accordance with Section 8.07 and in
substantially the form of Exhibit C hereto.
"Available Amount" of any Letter of Credit means, at any time,
the maximum amount available to be drawn under such Letter of Credit at
such time (assuming compliance at such time with all conditions to
drawing).
"Bank Hedge Agreement" means any interest rate Hedge Agreement
required or permitted under Article V that is entered into by and
between the Borrower and any Hedge Bank.
"Borrower" has the meaning specified in the recital of parties
to this Agreement.
"Borrower's Account" means the account of the Borrower
maintained by the Borrower with NationsBank at its office at 000 Xxxxx
Xxxxx Xxxxxx, Xxxxxxxxxxxx Center, 15th Xxxxx, Xxxxxxxxx, XX 00000,
Account No. 375-001-4916.
"Borrowing" means a Term A Borrowing, a Term B Borrowing, a
Working Capital Borrowing or a Swing Line Borrowing.
"Bridge Loan Credit Agreement" means the Bridge Loan Credit
Agreement dated as of May 3, 1996, as amended by Modification Agreement
No. 1 to Bridge
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Loan Credit Agreement dated as of November 24, 1996, by Modification
Agreement No. 2 to Bridge Loan Credit Agreement dated as of January 9,
1997 and by Waiver Agreement No. 1 to Bridge Loan Credit Agreement
dated as of October 21, 1997, among the Borrower, the other financial
institutions party thereto and Canadian Imperial Bank of Commerce.
"Business Day" means a day of the year on which banks are not
required or authorized by law to close in Charlotte, North Carolina or
New York, New York and, if the applicable Business Day relates to any
Eurodollar Rate Advances, on which dealings are carried on in the
London interbank market.
"Capital Expenditures" means, for any Person for any period,
the sum of (a) all expenditures made, directly or indirectly, by such
Person or any of its Subsidiaries during such period for equipment,
fixed assets, real property or improvements, or for replacements or
substitutions therefor or additions thereto, that have been or should
be, in accordance with GAAP, reflected as additions to property, plant
or equipment on a Consolidated balance sheet of such Person plus
(without duplication) (b) the aggregate principal amount of all Debt
(including Obligations under Capitalized Leases) assumed or incurred in
connection with any such expenditures. For purposes of this definition,
expenditures made for assets of the type described in clause (a) of the
immediately preceding sentence that are purchased simultaneously with
the trade-in of existing assets or with insurance proceeds shall be
included in Capital Expenditures only to the extent of the gross amount
of such purchase price less the credit granted by the seller of such
assets for the assets being traded in at such time or the amount of
such insurance proceeds, as the case may be.
"Capitalized Leases" means all leases that have been or should
be, in accordance with GAAP, recorded as capitalized leases.
"Cash Equivalents" means any of the following, to the extent
owned by the Borrower or any of its Subsidiaries free and clear of all
Liens other than Liens created under the Collateral Documents and
having a maturity of not greater than one year from the date of
acquisition thereof: (a) readily marketable direct obligations of the
Government of the United States or any agency or instrumentality
thereof or obligations unconditionally guaranteed by the full faith and
credit of the Government of the United States, (b) insured certificates
of deposit of or time deposits with any commercial bank that (i) is a
Lender Party or a member of the Federal Reserve System, (ii) issues (or
the parent of which issues) commercial paper rated as described in
clause (c), (iii) is organized under the laws of the United States or
any State thereof and (iv) has combined capital and surplus of at least
$1 billion, (c) commercial paper in an aggregate amount of no more than
$1,000,000 per issuer outstanding at any time, issued by any
corporation organized under the laws of any
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State of the United States and rated at least "Prime-1" (or the then
equivalent grade) by Xxxxx'x Investors Service, Inc. or "A-1" (or the
then equivalent grade) by Standard & Poor's Ratings Group or (d) any
repurchase agreement entered into with either any Lender Party or any
other commercial banking institution of the nature referred to in
clause (b), secured by a fully perfected Lien in any obligation of the
type described in any of clauses (a) through (c), having a market value
at the time such repurchase agreement is entered into of not less than
100% of the repurchase obligation thereunder of such Lender Party or
other commercial banking institution.
"Cash Management Account" has the meaning specified in Section
2.01(d).
"Cash Management Documentation" has the meaning specified in
Section 2.01(d).
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended from time to time.
"CERCLIS" means the Comprehensive Environmental Response,
Compensation and Liability Information System maintained by the U.S.
Environmental Protection Agency.
"Certificate of Merger" means that certain Certificate of
Merger of even date herewith, between Shoney's Real Estate, Inc. and
Shoney's SPV, pursuant to which Shoney's Real Estate, Inc. is to be
merged into Shoney's SPV and which is to be filed with the Secretary of
State of Delaware, in form satisfactory to the Administrative Agent.
"Collateral" means all "Collateral" referred to in the
Collateral Documents and all other property that is or is intended to
be subject to any Lien in favor of the Administrative Agent for the
benefit of the Secured Parties.
"Collateral Documents" means the Security Agreement, the
Intellectual Property Security Agreement and the Mortgages and any
other agreement that creates or purports to create a Lien in favor of
the Administrative Agent for the benefit of the Secured Parties.
"Collateral Grantor" means the Borrower and each Subsidiary
Guarantor other than TPI SPV, Shoney's SPV, Shoney's of Michigan and
Commissary Operations.
"Commissary Operations" means Commissary Operations, Inc., a
Tennessee corporation.
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"Commitment" means a Term A Commitment, a Term B Commitment, a
Working Capital Commitment or a Letter of Credit Commitment.
"Confidential Information" means information that the Borrower
furnishes to the Administrative Agent or any Lender Party on a
confidential basis, but does not include any such information that is
or becomes generally available to the public other than as a result of
a breach by the Administrative Agent or any Lender Party of its
obligations hereunder or that is or becomes available to the
Administrative Agent or such Lender Party from a source other than the
Borrower that is not, to the best of the Administrative Agent's or such
Lender Party's knowledge, acting in violation of a confidentiality
agreement with the Borrower.
"Consolidated" refers to the consolidation of accounts in
accordance with GAAP.
"Conversion", "Convert" and "Converted" each refer to a
conversion of Advances of one Type into Advances of the other Type
pursuant to Section 2.09 or 2.10.
"Current Assets" of any Person means all assets of such Person
that would, in accordance with GAAP, be classified as current assets of
a company conducting a business the same as or similar to that of such
Person, after deducting adequate reserves in each case in which a
reserve is proper in accordance with GAAP.
"Current Liabilities" of any Person means (a) all Debt of such
Person that by its terms is payable on demand or matures within one
year after the date of creation (excluding any Debt renewable or
extendible, at the option of such Person, to a date more than one year
from such date or arising under a revolving credit or similar agreement
that obligates the lender or lenders thereunder to extend credit during
a period of more than one year from such date) and (b) all other items
(including taxes accrued as estimated) that in accordance with GAAP
would be classified as current liabilities of such Person.
"Debentures" means those certain subordinated and unsecured
debentures originally issued by TPI Enterprises, Inc. and subsequently
assumed by the Borrower pursuant to the Indenture in the original
principal amount of Fifty-One Million Five Hundred Sixty-Three Thousand
Dollars ($51,563,000), which are designated 8.25% Convertible
Subordinated Debentures due 2002.
"Debt" of any Person means, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all Obligations of
such Person for the deferred purchase price of property or services
(other than trade payables not overdue by more
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than 60 days incurred in the ordinary course of such Person's
business), (c) all Obligations of such Person evidenced by notes,
bonds, debentures or other similar instruments, (d) all Obligations of
such Person created or arising under any conditional sale or other
title retention agreement with respect to property acquired by such
Person (even though the rights and remedies of the seller or lender
under such agreement in the event of default are limited to
repossession or sale of such property), (e) all Obligations of such
Person as lessee under Capitalized Leases, (f) all Obligations,
contingent or otherwise, of such Person under acceptance, letter of
credit or similar facilities, (g) all Obligations of such Person to
purchase, redeem, retire, defease or otherwise make any payment in
respect of any capital stock of or other ownership or profit interest
in such Person or any other Person or any warrants, rights or options
to acquire such capital stock, valued, in the case of Redeemable
Preferred Stock, at the greater of its voluntary or involuntary
liquidation preference plus accrued and unpaid dividends, (h) all
Obligations of such Person in respect of Hedge Agreements, (i) all Debt
of others referred to in clauses (a) through (h) above or clause (j)
below guaranteed directly or indirectly in any manner by such Person,
or in effect guaranteed directly or indirectly by such Person through
an agreement (i) to pay or purchase such Debt or to advance or supply
funds for the payment or purchase of such Debt, (ii) to purchase, sell
or lease (as lessee or lessor) property, or to purchase or sell
services, primarily for the purpose of enabling the debtor to make
payment of such Debt or to assure the holder of such Debt against loss,
(iii) to supply funds to or in any other manner invest in the debtor
(including any agreement to pay for property or services irrespective
of whether such property is received or such services are rendered) or
(iv) otherwise to assure a creditor against loss, and (j) all Debt
referred to in clauses (a) through (i) above of another Person secured
by (or for which the holder of such Debt has an existing right,
contingent or otherwise, to be secured by) any Lien on property
(including, without limitation, accounts and contract rights) owned by
such Person, even though such Person has not assumed or become liable
for the payment of such Debt.
"Debt for Borrowed Money" of any Person means all items that
in accordance with GAAP would be classified as debt on the Consolidated
balance sheet of such Person.
"Deed" shall mean a warranty deed in form sufficient under
applicable law to convey to Shoney's SPV the fee simple title to the
real property described in such Deed subject to the matters set forth
therein and otherwise satisfactory to the Lender Parties.
"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be
given or time elapse or both.
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"Defaulted Advance" means, with respect to any Lender Party at
any time, the portion of any Advance required to be made by such Lender
Party to the Borrower pursuant to Section 2.01 or 2.02 at or prior to
such time which has not been made by such Lender Party or by the
Administrative Agent for the account of such Lender Party pursuant to
Section 2.02(e) as of such time. In the event that a portion of a
Defaulted Advance shall be deemed made pursuant to Section 2.15(a), the
remaining portion of such Defaulted Advance shall be considered a
Defaulted Advance originally required to be made pursuant to Section
2.01 or 2.02 on the same date as the Defaulted Advance so deemed made
in part.
"Defaulted Amount" means, with respect to any Lender Party at
any time, any amount required to be paid by such Lender Party to the
Administrative Agent or any other Lender Party hereunder or under any
other Loan Document at or prior to such time which has not been so paid
as of such time, including, without limitation, any amount required to
be paid by such Lender Party to (a) the Swing Line Bank pursuant to
Section 2.02(b) to purchase a portion of a Swing Line Advance made by
the Swing Line Bank, (b) the Issuing Bank pursuant to Section 2.03(c)
to purchase a portion of a Letter of Credit Advance made by the Issuing
Bank, (c) the Administrative Agent pursuant to Section 2.02(e) to
reimburse the Administrative Agent for the amount of any Advance made
by the Administrative Agent for the account of such Lender Party, (d)
any other Lender Party pursuant to Section 2.13 to purchase any
participation in Advances owing to such other Lender Party and (e) the
Administrative Agent or the Issuing Bank pursuant to Section 7.05 to
reimburse the Administrative Agent or the Issuing Bank for such Lender
Party's ratable share of any amount required to be paid by the Lender
Parties to the Administrative Agent or the Issuing Bank as provided
therein. In the event that a portion of a Defaulted Amount shall be
deemed paid pursuant to Section 2.15(b), the remaining portion of such
Defaulted Amount shall be considered a Defaulted Amount originally
required to be paid hereunder or under any other Loan Document on the
same date as the Defaulted Amount so deemed paid in part.
"Defaulting Lender" means, at any time, any Lender Party that,
at such time, (a) owes a Defaulted Advance or a Defaulted Amount or (b)
shall take any action or be the subject of any action or proceeding of
a type described in Section 6.01(f).
"Disclosed Litigation" has the meaning specified in Section
3.01(d).
"Domestic Lending Office" means, with respect to any Lender
Party, the office of such Lender Party specified as its "Domestic
Lending Office" opposite its name on Schedule I hereto or in the
Assignment and Acceptance pursuant to which it became a Lender Party,
as the case may be, or such other office of such Lender Party
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as such Lender Party may from time to time specify as its "Domestic
Lending Office" to the Borrower and the Administrative Agent.
"EBITDA" means, for any period, the sum, determined on a
Consolidated basis, of (a) net income (or net loss), plus (b) interest
expense, plus (c) income tax expense, plus (d) depreciation expense,
plus (e) amortization expense, plus (f) all non-cash losses and charges
deducted in arriving at such net income, less (g) all non-cash gains
included in arriving at such net income in each case of the Borrower
and its Subsidiaries, determined in accordance with GAAP for such
period.
"Eligible Assignee" means (a) with respect to the Revolving
Credit Facility, (i) a Lender; (ii) an Affiliate of a Lender; (iii) a
commercial bank organized under the laws of the United States, or any
State thereof, and having total assets in excess of $500,000,000; (iv)
a savings and loan association or savings bank organized under the laws
of the United States, or any State thereof, and having total assets in
excess of $500,000,000; (v) a commercial bank organized under the laws
of any other country that is a member of the OECD or has concluded
special lending arrangements with the International Monetary Fund
associated with its General Arrangements to Borrow, or a political
subdivision of any such country, and having total assets in excess of
$500,000,000, so long as such bank is acting through a branch or agency
located in the United States; (vi) the central bank of any country that
is a member of the OECD; (vii) a finance company, insurance company or
other financial institution or fund (whether a corporation,
partnership, trust or other entity) that is engaged in making,
purchasing or otherwise investing in commercial loans in the ordinary
course of its business and having total assets in excess of
$250,000,000; and (viii) any other Person approved by the
Administrative Agent and, unless a Default has occurred and is
continuing at the time any assignment is effected in accordance with
Section 8.07, the Borrower, such approval not to be unreasonably
withheld or delayed, (b) with respect to any Term Facility, (i) any
Person that is an Eligible Assignee under clause (a) of this definition
and (ii) any other Person that is a fund that regularly invests in
loans similar to the Term A Advances or Term B Advances, and (c) with
respect to the Letter of Credit Facility, a Person that is an Eligible
Assignee under subclause (iii) or (v) of clause (a) of this definition
and is approved by the Administrative Agent and, unless a Default has
occurred and is continuing at the time any assignment is effected in
accordance with Section 8.07, the Borrower, such approval not to be
unreasonably withheld or delayed; provided, however, that neither any
Loan Party nor any Affiliate of a Loan Party shall qualify as an
Eligible Assignee under this definition.
"Environmental Action" means any action, suit, demand, demand
letter, claim, notice of non-compliance or violation, notice of
liability or potential liability, investigation, proceeding, consent
order or consent agreement relating in any way to
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any Environmental Law, any Environmental Permit or Hazardous Material
or arising from alleged injury or threat to health, safety or the
environment, including, without limitation, (a) by any governmental or
regulatory authority for enforcement, cleanup, removal, response,
remedial or other actions or damages and (b) by any governmental or
regulatory authority or third party for damages, contribution,
indemnification, cost recovery, compensation or injunctive relief.
"Environmental Law" means any federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, writ, judgment,
injunction, decree or judicial or agency interpretation, policy or
guidance relating to pollution or protection of the environment,
health, safety or natural resources, including, without limitation,
those relating to the use, handling, transportation, treatment,
storage, disposal, release or discharge of Hazardous Materials.
"Environmental Permit" means any permit, approval,
identification number, license or other authorization required under
any Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"ERISA Affiliate" means any Person that for purposes of Title
IV of ERISA is a member of the controlled group of any Loan Party, or
under common control with any Loan Party, within the meaning of Section
414 of the Internal Revenue Code.
"ERISA Event" means (a) (i) the occurrence of a reportable
event, within the meaning of Section 4043 of ERISA, with respect to any
Plan unless the 30-day notice requirement with respect to such event
has been waived by the PBGC, or (ii) the requirements of subsection (1)
of Section 4043(b) of ERISA (without regard to subsection (2) of such
Section) are met with respect to a contributing sponsor, as defined in
Section 4001(a)(13) of ERISA, of a Plan, and an event described in
paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA is
reasonably expected to occur with respect to such Plan within the
following 30 days; (b) the application for a minimum funding waiver
with respect to a Plan; (c) the provision by the administrator of any
Plan of a notice of intent to terminate such Plan, pursuant to Section
4041(a)(2) of ERISA (including any such notice with respect to a plan
amendment referred to in Section 4041(e) of ERISA); (d) the cessation
of operations at a facility of any Loan Party or any ERISA Affiliate in
the circumstances described in Section 4062(e) of ERISA; (e) the
withdrawal by any Loan Party or any ERISA Affiliate from a Multiple
Employer Plan during a plan year for which it was a substantial
employer, as defined in Section 4001(a)(2) of ERISA; (f) the conditions
for imposition of a lien under Section 302(f) of ERISA shall have been
met with
17
11
respect to any Plan; (g) the adoption of an amendment to a Plan
requiring the provision of security to such Plan pursuant to Section
307 of ERISA; or (h) the institution by the PBGC of proceedings to
terminate a Plan pursuant to Section 4042 of ERISA, or the occurrence
of any event or condition described in Section 4042 of ERISA that
constitutes grounds for the termination of, or the appointment of a
trustee to administer, such Plan.
"Eurocurrency Liabilities" has the meaning specified in
Regulation D of the Board of Governors of the Federal Reserve System,
as in effect from time to time.
"Eurodollar Lending Office" means, with respect to any Lender
Party, the office of such Lender Party specified as its "Eurodollar
Lending Office" opposite its name on Schedule I hereto or in the
Assignment and Acceptance pursuant to which it became a Lender Party
(or, if no such office is specified, its Domestic Lending Office), or
such other office of such Lender Party as such Lender Party may from
time to time specify as its "Eurodollar Lending Office" to the Borrower
and the Administrative Agent.
"Eurodollar Rate" means, for any Interest Period for all
Eurodollar Rate Advances comprising part of the same Borrowing, an
interest rate per annum equal to the rate per annum obtained by
dividing (a) the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor
page) as the London interbank offered rate for deposits in U.S. dollars
at 11:00 A.M. (London time) two Business Days before the first day of
such Interest Period for a period equal to such Interest Period
(provided that, if for any reason such rate is not available, the term
"Eurodollar Rate" shall mean, for any Interest Period for all
Eurodollar Rate Advances comprising part of the same Borrowing, the
rate per annum (rounded upwards, if necessary, to the nearest 1/100 of
1%) appearing on Reuters Screen LIBO Page as the London interbank
offered rate for deposits in Dollars at approximately 11:00 A.M.
(London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period; provided,
however, if more than one rate is specified on Reuters Screen LIBO
Page, the applicable rate shall be the arithmetic mean of all such
rates) by (b) a percentage equal to 100% minus the Eurodollar Rate
Reserve Percentage for such Interest Period.
"Eurodollar Rate Advance" means an Advance that bears interest
as provided in Section 2.07(a)(ii).
"Eurodollar Rate Reserve Percentage" means, for any Interest
Period for all Eurodollar Rate Advances comprising part of the same
Borrowing, the reserve percentage applicable two Business Days before
the first day of such Interest Period
18
12
under regulations issued from time to time by the Board of Governors of
the Federal Reserve System (or any successor) for determining the
maximum reserve requirement (including, without limitation, any
emergency, supplemental or other marginal reserve requirement) for a
member bank of the Federal Reserve System in New York City with respect
to liabilities or assets consisting of or including Eurocurrency
Liabilities (or with respect to any other category of liabilities that
includes deposits by reference to which the interest rate on Eurodollar
Rate Advances is determined) having a term equal to such Interest
Period.
"Events of Default" has the meaning specified in Section 6.01.
"Excess Cash Flow" means, for any period, the amount equal to
the sum of (i) Consolidated net income (or loss) of the Borrower and
its Subsidiaries for such period plus (ii) the aggregate amount of all
non-cash charges deducted in arriving at such Consolidated net income
(or loss) plus (iii) if there was a net increase in Consolidated
Current Liabilities of the Borrower and its Subsidiaries during such
period, the amount of such net increase plus (iv) if there was a net
decrease in Consolidated Current Assets (excluding Cash and Cash
Equivalents) of the Borrower and its Subsidiaries during such period,
the amount of such net decrease less (v) the aggregate amount of all
gains relating to any sale of assets added in arriving at such
Consolidated net income (or loss) less (vi) the aggregate amount of all
non-cash credits included in arriving at such Consolidated net income
(or loss) less (vii) if there was a net decrease in Consolidated
Current Liabilities of the Borrower and its Subsidiaries during such
period, the amount of such net decrease less (viii) if there was a net
increase in Consolidated Current Assets (excluding cash and Cash
Equivalents) of the Borrower and its Subsidiaries during such period,
the amount of such net increase less (ix) the aggregate amount of cash
Capital Expenditures made by the Borrower and its Subsidiaries during
such period less (x) the aggregate principal amount of all scheduled
amortization payments in respect of Debt paid by the Borrower and its
Subsidiaries during such period and the aggregate principal amount of
all Debt optionally prepaid by the Borrower and its Subsidiaries during
such period (with, in the case of revolving credit facilities, a
corresponding reduction in the commitments under such revolving credit
facilities).
"Existing Debt" has the meaning specified in Section 4.01(gg)
hereof.
"Existing Mortgage Notes" means the Debt listed as items 6, 7
and 8 on Schedule 4.01(gg).
"Existing Subsidiary" shall have the meaning set forth in the
Indenture.
19
13
"Facility" means the Term A Facility, the Term B Facility, the
Working Capital Facility, the Swing Line Facility or the Letter of
Credit Facility.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the
weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day for such
transactions received by the Administrative Agent from three Federal
funds brokers of recognized standing selected by it.
"First American Credit Agreement" means the Amended and
Restated Revolving Credit Agreement dated as of July 24, 1997, between
the Borrower and First American National Bank.
"Fiscal Year" means a fiscal year of the Borrower and its
Subsidiaries ending on the last Sunday in October in any calendar year.
"GAAP" has the meaning specified in Section 1.03.
"Hazardous Materials" means (a) petroleum or petroleum
products, by-products or breakdown products, radioactive materials,
asbestos-containing materials, polychlorinated biphenyls and radon gas
and (b) any other chemicals, materials or substances designated,
classified or regulated as hazardous or toxic or as a pollutant or
contaminant under any Environmental Law.
"Hedge Agreements" means interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap
agreements, currency future or option contracts and other similar
agreements.
"Hedge Bank" means any Lender Party or any of its Affiliates
in its capacity as a party to a Bank Hedge Agreement.
"Indemnified Party" has the meaning specified in Section
8.04(b).
"Indenture" shall mean that certain Indenture dated as of July
15, 1992, as amended by that First Supplemental Indenture dated as of
September 9, 1996, between and among the Borrower (as successor to TPI
Enterprises, Inc. pursuant to the First Supplemental Indenture), TPI
and The Bank of New York as trustee, pursuant to which the Debentures
were issued.
20
14
"Information Memorandum" means the Offering Memorandum dated
October 1997 used by the Arranger and the Administrative Agent in
connection with the syndication of the Commitments.
"Initial Extension of Credit" means the earlier to occur of
the initial Borrowing and the initial issuance of a Letter of Credit
hereunder.
"Initial Issuing Bank" has the meaning specified in the
recital of parties to this Agreement.
"Initial Lenders" has the meaning specified in the recital of
parties to this Agreement.
"Insufficiency" means, with respect to any Plan, the amount,
if any, of its unfunded benefit liabilities, as defined in Section
4001(a)(18) of ERISA.
"Intellectual Property Security Agreement" has the meaning
specified in Section 3.01(g)(ix).
"Interest Expense" means, as of the last day of any fiscal
quarter, cash interest expense of the Borrower and its Subsidiaries on
a Consolidated basis for the most recently ended four fiscal quarters;
provided, however, that (x) for the fiscal quarter ended February 15,
1998, Interest Expense shall be the product of cash interest expense
for such fiscal quarter times a fraction the numerator of which is 13
and the denominator of which is 4, (y) for the fiscal quarter ended May
10, 1998, Interest Expense shall be the product of cash interest
expense for the two fiscal quarters then ended times a fraction the
numerator of which is 13 and the denominator of which is 7 and (z) for
the fiscal quarter ended August 2, 1998, Interest Expense shall be the
product of cash interest expense for the three fiscal quarters then
ended times a fraction the numerator of which is 13 and the denominator
of which is 10.
"Interest Period" means, for each Eurodollar Rate Advance
comprising part of the same Borrowing, the period commencing on the
date of such Eurodollar Rate Advance or the date of the Conversion of
any Prime Rate Advance into such Eurodollar Rate Advance, and ending on
the last day of the period selected by the Borrower pursuant to the
provisions below and, thereafter, each subsequent period commencing on
the last day of the immediately preceding Interest Period and ending on
the last day of the period selected by the Borrower pursuant to the
provisions below. The duration of each such Interest Period shall be
one, two, three or six months, as the Borrower may, upon notice
received by the Administrative Agent not later than 11:00 A.M.
(Charlotte, North Carolina time) on the third Business Day prior to the
first day of such Interest Period, select; provided, however, that:
21
15
(a) the Borrower may not select any Interest Period
with respect to any Eurodollar Rate Advance under a Facility
that ends after any principal repayment installment date for
such Facility unless, after giving effect to such selection,
the aggregate principal amount of Prime Rate Advances and of
Eurodollar Rate Advances having Interest Periods that end on
or prior to such principal repayment installment date for such
Facility shall be at least equal to the aggregate principal
amount of Advances under such Facility due and payable on or
prior to such date;
(b) whenever the last day of any Interest Period
would otherwise occur on a day other than a Business Day, the
last day of such Interest Period shall be extended to occur on
the next succeeding Business Day, provided, however, that, if
such extension would cause the last day of such Interest
Period to occur in the next following calendar month, the last
day of such Interest Period shall occur on the next preceding
Business Day; and
(c) whenever the first day of any Interest Period
occurs on a day of an initial calendar month for which there
is no numerically corresponding day in the calendar month that
succeeds such initial calendar month by the number of months
equal to the number of months in such Interest Period, such
Interest Period shall end on the last Business Day of such
succeeding calendar month.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"Investment" in any Person means any loan or advance to such
Person, any purchase or other acquisition of any capital stock or other
ownership or profit interest, warrants, rights, options, obligations or
other securities of such Person, any capital contribution to such
Person or any other investment in such Person, including, without
limitation, any arrangement pursuant to which the investor incurs Debt
of the types referred to in clause (i) or (j) of the definition of
"Debt" in respect of such Person. The amount of any Investment shall be
the original principal or capital amount thereof less the sum of (i)
all cash returns of principal or equity thereon and (ii) in the case of
any guaranty, any reduction in the aggregate amount of liability under
such guaranty to the extent that such reduction is made strictly in
accordance with the terms of such guaranty (and, in each case, without
adjustment by reason of the financial condition of such other Person).
"Issuing Bank" means the Initial Issuing Bank and each
Eligible Assignee to which the Letter of Credit Commitment hereunder
has been assigned pursuant to Section 8.07.
22
16
"L/C Cash Collateral Account" has the meaning specified in the
Security Agreement.
"L/C Related Documents" has the meaning specified in Section
2.04(e)(ii)(A).
"Lender Party" means any Lender, the Issuing Bank or the Swing
Line Bank.
"Lenders" means the Initial Lenders and each Person that shall
become a Lender hereunder pursuant to Section 8.07.
"Letter of Credit" has the meaning specified in Section
2.01(e).
"Letter of Credit Advance" means an advance made by the
Issuing Bank or any Working Capital Lender pursuant to Section 2.03(c).
"Letter of Credit Agreement" has the meaning specified in
Section 2.03(a).
"Letter of Credit Commitment" means, with respect to the
Issuing Bank at any time, the amount set forth opposite the Issuing
Bank's name on Schedule I hereto under the caption "Letter of Credit
Commitment" or, if the Issuing Bank has entered into one or more
Assignments and Acceptances, set forth for the Issuing Bank in the
Register maintained by the Administrative Agent pursuant to Section
8.07(d) as the Issuing Bank's "Letter of Credit Commitment", as such
amount may be reduced at or prior to such time pursuant to Section
2.05.
"Letter of Credit Facility" means, at any time, an amount
equal to the amount of the Issuing Bank's Letter of Credit Commitment
at such time, as such amount may be reduced at or prior to such time
pursuant to Section 2.05.
"Leverage Ratio" means, as of the end of each fiscal quarter
of the Borrower, a ratio of (i) Debt for Borrowed Money of the Borrower
and its Subsidiaries as at the end of such fiscal quarter less the sum
of cash and Cash Equivalents held by the Borrower and its Subsidiaries
at the end of such fiscal quarter to (ii) Consolidated EBITDA of the
Borrower and its Subsidiaries for the four fiscal quarter period ending
at the end of such fiscal quarter.
"Lien" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance
on title to real property.
23
17
"Loan Documents" means (a) for purposes of this Agreement and
the Notes and any amendment or modification hereof or thereof and for
all other purposes other than for purposes of the Subsidiary Guaranty
and the Collateral Documents, (i) this Agreement, (ii) the Notes, (iii)
the Subsidiary Guaranty, (iv) the Collateral Documents and (v) each
Letter of Credit Agreement and (b) for purposes of the Subsidiary
Guaranty and the Collateral Documents, (i) this Agreement, (ii) the
Notes, (iii) the Subsidiary Guaranty, (iv) the Collateral Documents,
(v) each Letter of Credit Agreement and (vi) each Bank Hedge Agreement,
in each case as amended or otherwise modified from time to time.
"Loan Parties" means the Borrower and the Subsidiary
Guarantors.
"Margin Stock" has the meaning specified in Regulation U.
"Master Lease" means the Amended and Restated Master Lease
Agreement described in Section 3.01(k) and the Master Lease Agreement
described in Section 5.01(n)(ii).
"Material Adverse Change" means any material adverse change in
the business, condition (financial or otherwise), operations,
performance, properties or prospects of any Loan Party or any of its
Subsidiaries.
"Material Adverse Effect" means a material adverse effect on
(a) the business, condition (financial or otherwise), operations,
performance, properties or prospects of any Loan Party or any of its
Subsidiaries, (b) the rights and remedies of the Administrative Agent
or any Lender Party under any Loan Document or (c) the ability of any
Loan Party to perform its Obligations under any Loan Document to which
it is or is to be a party.
"Mortgage" has the meaning specified in Section 3.01(g)(x).
"Mortgage Policy" has the meaning specified in Section
3.01(g)(x)(B).
"Multiemployer Plan" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which any Loan Party or any ERISA
Affiliate is making or accruing an obligation to make contributions, or
has within any of the preceding five plan years made or accrued an
obligation to make contributions.
"Multiple Employer Plan" means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of any Loan Party or any ERISA Affiliate and at least one
Person other than the Loan Parties and the ERISA Affiliates or (b) was
so maintained and in respect of which any Loan Party or
24
18
any ERISA Affiliate could have liability under Section 4064 or 4069 of
ERISA in the event such plan has been or were to be terminated.
"NationsBank" has the meaning specified in the recital of
parties to this Agreement.
"Net Cash Proceeds" means, with respect to any sale, transfer
or other disposition (other than by lease but including by way of the
occurrence of an event that gives rise to insurance proceeds as
contemplated by Section 5.01(d)(i)) of any asset or the sale or
issuance of any Debt or capital stock or other ownership or profit
interest, any securities convertible into or exchangeable for capital
stock or other ownership or profit interest or any warrants, rights,
options or other securities to acquire capital stock or other ownership
or profit interest by any Person (excluding proceeds received pursuant
to employee stock purchase plans, director or employee option plans or
other employee benefit plans, provided that the aggregate amount of all
such proceeds excluded from the calculation of "Net Cash Proceeds" from
and after the date hereof shall not exceed $5,000,000), the aggregate
amount of cash received from time to time (whether as initial
consideration or through payment or disposition of deferred
consideration) by or on behalf of such Person in connection with such
transaction after deducting therefrom only (without duplication) (a)
reasonable and customary brokerage fees and commissions for similar
transactions, underwriting fees and discounts, legal fees, finder's
fees and other similar fees and commissions estimated to be paid in
connection with or as a result of such transaction and (b) the amount
of taxes estimated to be paid in connection with or as a result of such
transaction and (c) the amount of any Debt secured by a Lien on such
asset that, by the terms of such transaction, is required to be repaid
upon such disposition, in each case to the extent, but only to the
extent, that the amounts so deducted are, at the time of receipt of
such cash, actually paid to a Person that is not an Affiliate of such
Person or any Loan Party or any Affiliate of any Loan Party and are
properly attributable to such transaction or to the asset that is the
subject thereof; provided, however, that if any amounts described in
clauses (a) and (b) estimated to be paid in connection with or as a
result of any such transaction are not paid within one year following
the date of such transaction, the excess of such estimated amounts over
the amount of such fees, discounts, commissions and taxes paid within
such one-year period in connection with or as a result of such
transaction shall be "Net Cash Proceeds" at the end of such one-year
period; provided further that Net Cash Proceeds that are comprised of
insurance proceeds shall not include any such insurance proceeds to the
extent such insurance proceeds are applied to the replacement of the
asset or property in respect of which such insurance proceeds were
received, so long as such application is made within 12 months after
the occurrence of the event giving rise to such insurance proceeds.
25
19
"NMSI" has the meaning specified in the recital of parties to
the Agreement.
"Nonratable Assignment" means an assignment by a Lender Party
pursuant to Section 8.07(a) of a portion of its rights and obligations
under this Agreement, other than an assignment of a uniform, and not a
varying percentage of all of the rights and obligations of such Lender
Party under and in respect of all of the Facilities (other than the
Letter of Credit Facility and the Swing Line Facility).
"Note" means a Term A Note, a Term B Note or a Working Capital
Note.
"Notice of Borrowing" has the meaning specified in Section
2.02(a).
"Notice of Issuance" has the meaning specified in Section
2.03(a).
"Notice of Renewal" has the meaning specified in Section
2.01(e).
"Notice of Termination" has the meaning specified in Section
2.01(e).
"NPL" means the National Priorities List under CERCLA.
"Obligation" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including,
without limitation, any liability of such Person on any claim, whether
or not the right of any creditor to payment in respect of such claim is
reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, disputed, undisputed, legal, equitable, secured or unsecured,
and whether or not such claim is discharged, stayed or otherwise
affected by any proceeding referred to in Section 6.01(f). Without
limiting the generality of the foregoing, the Obligations of the Loan
Parties under the Loan Documents include (a) the obligation to pay
principal, interest, Letter of Credit commissions, charges, expenses,
fees, attorneys' fees and disbursements, indemnities and other amounts
payable by any Loan Party under any Loan Document and (b) the
obligation of any Loan Party to reimburse any amount in respect of any
of the foregoing that any Lender Party, in its sole discretion, may
elect to pay or advance on behalf of such Loan Party.
"OECD" means the Organization for Economic Cooperation and
Development.
"Open Year" has the meaning specified in Section 4.01(aa).
"Operate-to-Improve Stores" means the stores listed on
Schedule 5.04.
"Other Taxes" has the meaning specified in Section 2.12(b).
26
20
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
"Permitted Encumbrances" has the meaning specified in the
Mortgages.
"Permitted Liens" means (i) such of the following as to which
no enforcement, collection, execution, levy or foreclosure proceeding
shall have been commenced: (a) Liens for taxes, assessments and
governmental charges or levies not yet due and payable or that are
being contested in good faith and by proper proceedings and as to which
appropriate reserves are being maintained; (b) Liens (other than
materialmen's, mechanics', carriers', workmen's and repairmen's Liens)
arising in the ordinary course of business securing obligations that
are not overdue for a period of more than 180 days or being contested
in good faith and by proper proceedings and as to which appropriate
reserves are being maintained; and (c) pledges or deposits to secure
obligations under workers' compensation laws or similar legislation or
to secure public or statutory obligations; and (ii) easements, rights
of way and other encumbrances on title to real property that do not
render title to the property encumbered thereby unmarketable or
materially adversely affect the use of such property for its present
purposes.
"Person" means an individual, partnership, corporation
(including a business trust), limited liability company, joint stock
company, trust, unincorporated association, joint venture or other
entity, or a government or any political subdivision or agency thereof.
"Plan" means a Single Employer Plan or a Multiple Employer
Plan.
"Preferred Stock" means, with respect to any corporation,
capital stock issued by such corporation that is entitled to a
preference or priority over any other capital stock issued by such
corporation upon any distribution of such corporation's assets, whether
by dividend or upon liquidation.
"Prime Rate" means a fluctuating interest rate per annum in
effect from time to time, which rate per annum shall at all times be
equal to the higher of:
(a) the rate of interest announced publicly
by NationsBank, N.A. in Charlotte, North Carolina from time to
time, as NationsBank's prime rate base rate; or
(b) 1/2 of one percent per annum above the
Federal Funds Rate.
"Prime Rate Advance" means an Advance that bears interest as
provided in Section 2.07(a)(i).
27
21
"Pro Rata Share" of any amount means, with respect to any
Working Capital Lender at any time, the product of such amount times a
fraction the numerator of which is the amount of such Lender's Working
Capital Commitment at such time and the denominator of which is the
Working Capital Facility at such time.
"Redeemable" means, with respect to any capital stock or other
ownership or profit interest, Debt or other right or Obligation, any
such right or Obligation that (a) the issuer has undertaken to redeem
at a fixed or determinable date or dates, whether by operation of a
sinking fund or otherwise, or upon the occurrence of a condition not
solely within the control of the issuer or (b) is redeemable at the
option of the holder.
"Redemption Price" shall have the meaning set forth in the
Indenture.
"Reducing Revolving Credit Agreement" means the Amended and
Restated Reducing Revolving Credit Agreement dated as of July 21, 1993
as amended and restated as of May 3, 1996 and amended by Modification
Agreement No. 1 to Amended and Restated Reducing Revolving Credit
Agreement dated as of October 24, 1996, Modification Agreement No. 2 to
Amended and Restated Reducing Revolving Credit Agreement dated as of
January 9, 1997, and Waiver Agreement No. 1 to Amended and Restated
Reducing Revolving Credit Agreement dated as of October 21, 1997, among
the Borrower, CIBC Inc., Canadian Imperial Bank of Commerce and the
other financial institutions party thereto.
"Register" has the meaning specified in Section 8.07(d).
"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"Repurchase Price" shall have the meaning set forth in the
Indenture.
"Required Lenders" means at any time Lenders owed or holding
at least a majority in interest of the sum of (a) the aggregate
principal amount of the Advances outstanding at such time, (b) the
aggregate Available Amount of all Letters of Credit outstanding at such
time, (c) the aggregate unused Commitments under the Term A Facility
and the Term B Facility at such time and (d) the aggregate unused
Working Capital Commitments at such time; provided, however, that if
any Lender shall be a Defaulting Lender at such time, there shall be
excluded from the determination of Required Lenders at such time (A)
the aggregate principal amount of the Advances owing to such Lender (in
its capacity as a Lender) and outstanding at such time, (B) such
Lender's Pro Rata Share of the aggregate Available Amount of all
Letters of Credit issued by such Lender and outstanding at such time,
(C) the aggregate unused
28
22
Term A and Term B Commitments of such Lender at such time and (D) the
Unused Working Capital Commitment of such Lender at such time. For
purposes of this definition, the aggregate principal amount of Swing
Line Advances owing to the Swing Line Bank and of Letter of Credit
Advances owing to the Issuing Bank and the Available Amount of each
Letter of Credit shall be considered to be owed to the Working Capital
Lenders ratably in accordance with their respective Working Capital
Commitments.
"Responsible Officer" means, with respect to any Loan Party or
any of its Subsidiaries, at the time any determination thereof is to be
made, each of those Persons who are the Chairman of the Board (if at
the time, an officer), President, Chief Financial Officer (regardless
of title), Treasurer, Corporate Controller (regardless of title),
Secretary or Assistant Treasurer of such Loan Party or Subsidiary.
"Restructuring Charges" means all non-cash charges taken by
the Borrower and its Subsidiaries on or after October 26, 1997 in
accordance with GAAP in respect of the closure of the
Operate-to-Improve Stores.
"Secured Parties" means the Administrative Agent, the Lender
Parties and the Hedge Banks.
"Security Agreement" has the meaning specified in Section
3.01(g)(viii).
"Shoney's of Michigan" means Shoney's of Michigan, Inc., a
Tennessee corporation.
"Shoney's SPV" means SHN Properties, LLC, a limited liability
company organized under the laws of the State of Delaware, which is a
"bankruptcy-remote" special purpose limited liability company.
"Significant Subsidiary" shall mean Commissary Operations,
Shoney's SPV, Shoney's of Michigan, TPI and TPI SPV.
"Single Employer Plan" means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of any Loan Party or any ERISA Affiliate and no Person other
than the Loan Parties and the ERISA Affiliates or (b) was so maintained
and in respect of which any Loan Party or any ERISA Affiliate could
have liability under Section 4069 of ERISA in the event such plan has
been or were to be terminated.
29
23
"Solvent" and "Solvency" mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property
of such Person is greater than the total amount of liabilities,
including, without limitation, contingent liabilities, of such Person,
(b) the present fair salable value of the assets of such Person is not
less than the amount that will be required to pay the probable
liability of such Person on its debts as they become absolute and
matured, (c) such Person does not intend to, and does not believe that
it will, incur debts or liabilities beyond such Person's ability to pay
or refinance such debts and liabilities as they mature and (d) such
Person is not engaged in business or a transaction, and is not about to
engage in business or a transaction, for which such Person's property
would constitute an unreasonably small capital. The amount of
contingent liabilities at any time shall be computed as the amount
that, in the light of all the facts and circumstances existing at such
time, represents the amount that can reasonably be expected to become
an actual or matured liability.
"Standby Letter of Credit" means any Letter of Credit issued
under the Letter of Credit Facility, other than a Trade Letter of
Credit.
"Subsidiary" of any Person means any corporation, partnership,
joint venture, limited liability company, trust or estate of which (or
in which) more than 50% of (a) the issued and outstanding capital stock
having ordinary voting power to elect a majority of the board of
directors of such corporation (irrespective of whether at the time
capital stock of any other class or classes of such corporation shall
or might have voting power upon the occurrence of any contingency), (b)
the interest in the capital or profits of such partnership, joint
venture or limited liability company or (c) the beneficial interest in
such trust or estate is at the time directly or indirectly owned or
controlled by such Person, by such Person and one or more of its other
Subsidiaries or by one or more of such Person's other Subsidiaries.
"Subsidiary Guarantor" means TPI, TPI SPV, Shoney's SPV and
the other wholly-owned domestic Subsidiaries of the Borrower (other
than TPI Insurance Corporation).
"Subsidiary Guaranty" has the meaning specified in Section
3.01(g)(xi).
"Surviving Debt" has the meaning specified in Section
4.01(hh).
"Swing Line Advance" means an advance made by the Swing Line
Bank pursuant to Section 2.01(d).
"Swing Line Bank" has the meaning specified in the recital of
parties to this Agreement.
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"Swing Line Borrowing" means a borrowing consisting of a Swing
Line Advance made by the Swing Line Bank.
"Swing Line Facility" has the meaning specified in Section
2.01(d).
"Syndication Agent" has the meaning specified in the recitals
of the parties hereto.
"Taxes" has the meaning specified in Section 2.12(a).
"Term A Advance" has the meaning specified in Section 2.01(a).
"Term A Borrowing" means a borrowing consisting of
simultaneous Term A Advances of the same Type made by the Term A
Lenders.
"Term A Commitment" means, with respect to any Term A Lender
at any time, the amount set forth opposite such Lender's name on
Schedule I hereto under the caption "Term A Commitment" or, if such
Lender has entered into one or more Assignments and Acceptances, set
forth for such Lender in the Register maintained by the Administrative
Agent pursuant to Section 8.07(d) as such Lender's "Term A Commitment",
as such amount may be reduced at or prior to such time pursuant to
Section 2.05.
"Term A Facility" means, at any time, the aggregate amount of
the Term A Lenders' Term A Commitments at such time.
"Term A Lender" means any Lender that has a Term A Commitment.
"Term A Note" means a promissory note of the Borrower payable
to the order of any Term A Lender, in substantially the form of Exhibit
A-1 hereto, evidencing the indebtedness of the Borrower to such Lender
resulting from the Term A Advance made by such Lender.
"Term B Advance" has the meaning specified in Section 2.01(b).
"Term B Borrowing" means a borrowing consisting of
simultaneous Term B Advances of the same Type made by the Term B
Lenders.
"Term B Commitment" means, with respect to any Term B Lender
at any time, the amount set forth opposite such Lender's name on
Schedule I hereto under the caption "Term B Commitment" or, if such
Lender has entered into one or more Assignments and Acceptances, set
forth for such Lender in the Register maintained by
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the Agent pursuant to Section 8.07(d) as such Lender's "Term B
Commitment", as such amount may be reduced at or prior to such time
pursuant to Section 2.05.
"Term B Facility" means, at any time, the aggregate amount of
the Term B Lenders' Term B Commitments at such time.
"Term B Lender" means any Lender that has a Term B Commitment.
"Term B Note" means a promissory note of the Borrower payable
to the order of any Term B Lender, in substantially the form of Exhibit
A-2 hereto, evidencing the indebtedness of the Borrower to such Lender
resulting from the Term B Advance made by such Lender.
"Term Facilities" means the Term A Facility and the Term B
Facility.
"Termination Date" means the earlier of April 30, 2002 and the
date of termination in whole of the Term A Commitments, the Term B
Commitments, the Letter of Credit Commitments and the Working Capital
Commitments pursuant to Section 2.05 or 6.01.
"TPI" means TPI Restaurants, Inc., a Tennessee corporation.
"TPI SPV" means TPI Properties, Inc., a Tennessee corporation,
which is a "bankruptcy-remote" special purpose corporation.
"Trade Letter of Credit" means any Letter of Credit that is
issued under the Letter of Credit Facility for the benefit of a
supplier of inventory to the Borrower or any of its Subsidiaries to
effect payment for such inventory, the conditions to drawing under
which include the presentation to the Issuing Bank of negotiable bills
of lading, invoices and related documents sufficient, in the judgment
of the Issuing Bank, to create a valid and perfected lien on or
security interest in such inventory, bills of lading, invoices and
related documents in favor of the Issuing Bank.
"Type" refers to the distinction between Prime Rate Advances
and Eurodollar Rate Advances.
"Unused Working Capital Commitment" means, with respect to any
Working Capital Lender at any time, (a) such Lender's Working Capital
Commitment at such time minus (b) the sum of (i) the aggregate
principal amount of all Working Capital Advances and Letter of Credit
Advances made by such Lender (in its capacity as a Lender) and
outstanding at such time, plus (ii) such Lender's Pro Rata Share of (A)
the aggregate Available Amount of all Letters of Credit outstanding at
such time,
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(B) the aggregate principal amount of all Letter of Credit Advances
made by the Issuing Bank pursuant to Section 2.03(c) and outstanding at
such time and (C) the aggregate principal amount of all Swing Line
Advances made by the Swing Line Bank pursuant to Section 2.01(d) and
outstanding at such time.
"Variable Rate Notes" means the Debt listed in items 3, 4 and
5 of Schedule 4.01(gg).
"Voting Stock" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such
Person, even if the right so to vote has been suspended by the
happening of such a contingency.
"Welfare Plan" means a welfare plan, as defined in Section
3(1) of ERISA, that is maintained for employees of any Loan Party or in
respect of which any Loan Party could have liability.
"Withdrawal Liability" has the meaning specified in Part I of
Subtitle E of Title IV of ERISA.
"Working Capital Advance" has the meaning specified in Section
2.01(c).
"Working Capital Borrowing" means a borrowing consisting of
simultaneous Working Capital Advances of the same Type made by the
Working Capital Lenders.
"Working Capital Commitment" means, with respect to any
Working Capital Lender at any time, the amount set forth opposite such
Lender's name on Schedule I hereto under the caption "Working Capital
Commitment" or, if such Lender has entered into one or more Assignments
and Acceptances, set forth for such Lender in the Register maintained
by the Administrative Agent pursuant to Section 8.07(d) as such
Lender's "Working Capital Commitment", as such amount may be reduced at
or prior to such time pursuant to Section 2.05.
"Working Capital Facility" means, at any time, the aggregate
amount of the Working Capital Lenders' Working Capital Commitments at
such time.
"Working Capital Lender" means any Lender that has a Working
Capital Commitment.
"Working Capital Note" means a promissory note of the Borrower
payable to the order of any Working Capital Lender, in substantially
the form of Exhibit X-0
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hereto, evidencing the aggregate indebtedness of the Borrower to such
Lender resulting from the Working Capital Advances made by such Lender.
SECTION 1.02. Computation of Time Periods. In this Agreement
in the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and "until"
each mean "to but excluding".
SECTION 1.03. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles consistent with those applied in the preparation
of the financial statements referred to in Section 4.01(f) ("GAAP").
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
SECTION 2.01. The Advances. (a) The Term A Advances. Each Term
A Lender severally agrees, on the terms and conditions hereinafter set forth, to
make a single advance (a "Term A Advance") to the Borrower on any Business Day
during the period from the date hereof until December 15, 1997 in an amount
equal to such Lender's Term A Commitment at such time. The Term A Borrowing
shall consist of Term A Advances made simultaneously by the Term A Lenders
ratably according to their Term A Commitments. Amounts borrowed under this
Section 2.01(a) and repaid or prepaid may not be reborrowed.
(b) The Term B Advances. Each Term B Lender severally agrees,
on the terms and conditions hereinafter set forth, to make a single advance (a
"Term B Advance") to the Borrower on any Business Day during the period from the
date hereof until December 15, 1997 in an amount equal to such Lender's Term B
Commitment at such time. The Term B Borrowing shall consist of Term B Advances
made simultaneously by the Term B Lenders ratably according to their Term B
Commitments. Amounts borrowed under this Section 2.01(b) and repaid or prepaid
may not be reborrowed.
(c) The Working Capital Advances. Each Working Capital Lender
severally agrees, on the terms and conditions hereinafter set forth, to make
advances (each a "Working Capital Advance") to the Borrower from time to time on
any Business Day during the period from the date hereof until the Termination
Date in an amount for each such Advance not to exceed such Lender's Unused
Working Capital Commitment at such time. Each Working Capital Borrowing shall be
in an aggregate amount of $2,000,000 or an integral multiple of $500,000 in
excess thereof (other than a Borrowing the proceeds of
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which shall be used solely to repay or prepay in full outstanding Swing Line
Advances or outstanding Letter of Credit Advances) and shall consist of Working
Capital Advances made simultaneously by the Working Capital Lenders ratably
according to their Working Capital Commitments. Within the limits of each
Working Capital Lender's Unused Working Capital Commitment in effect from time
to time, the Borrower may borrow under this Section 2.01(c), prepay pursuant to
Section 2.06(a) and reborrow under this Section 2.01(c).
(d) The Swing Line Advances. A swing line credit facility (the
"Swing Line Facility") in a principal amount not to exceed $15,000,000 shall be
established by the Swing Line Bank for the Borrower from the date hereof through
the Termination Date. In connection with the Swing Line Facility, the Borrower
shall maintain cash management operations with the Swing Line Bank in an account
with the Swing Line Bank (the "Cash Management Account"), and shall execute such
documentation in connection therewith as the Swing Line Bank may reasonably
require (the "Cash Management Documentation"). At the close of each Business Day
during the term of the Facilities, the Swing Line Bank shall on behalf of the
Borrower draw from the Swing Line Facility amounts sufficient to pay the
difference between (i) the aggregate amount payable in such account for all
instruments presented since the close of the prior Business Day in connection
with the Cash Management Account (the "Account Debit Amount"), and (ii) the
aggregate amount received since the close of the prior Business Day into such
Cash Management Account (the "Account Credit Amount"). Each such drawing shall
be a Swing Line Advance and in no event shall (x) the aggregate amount of Swing
Line Advances outstanding at any one time exceed the Swing Line Facility or (y)
the aggregate amount of Swing Line Advances made on any Business Day exceed the
aggregate of the Unused Working Capital Commitments of the Working Capital
Lenders at such time. To the extent the Account Credit Amount exceeds the
Account Debit Amount, such excess proceeds shall be automatically applied by the
Swing Line Bank to prepay the outstanding Swing Line Advances and, if no Swing
Line Advance is outstanding at such time, such excess proceeds shall be invested
in "overnight" investments pursuant to the cash management documentation between
the Borrower and the Swing Line Bank. Each Swing Line Advance shall be made as a
Prime Rate Advance.
(e) Letters of Credit. The Issuing Bank agrees, on the terms
and conditions hereinafter set forth, to issue letters of credit (the "Letters
of Credit") for the account of the Borrower from time to time on any Business
Day during the period from the date hereof until 60 days before April 30, 2002
(i) in an aggregate Available Amount for all Letters of Credit not to exceed at
any time the Issuing Bank's Letter of Credit Commitment at such time and (ii) in
an Available Amount for each such Letter of Credit not to exceed the lesser of
(x) the Letter of Credit Facility at such time and (y) the Unused Working
Capital Commitments of the Working Capital Lenders at such time. No Letter of
Credit shall have an expiration date (including all rights of the Borrower or
the beneficiary to require renewal) later than the earlier of 60 days before
April 30, 2002 and (A) in the case of a Standby Letter of Credit, one year after
the date of issuance thereof, but may by its terms be
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renewable annually upon notice (a "Notice of Renewal") from the Borrower given
to the Issuing Bank and the Administrative Agent on or prior to any date for
notice of renewal set forth in such Letter of Credit but in any event at least
three Business Days prior to the date of the proposed renewal of such Standby
Letter of Credit and upon fulfillment of the applicable conditions set forth in
Article III unless the Issuing Bank has notified the Borrower (with a copy to
the Administrative Agent) on or prior to the date for notice of termination set
forth in such Letter of Credit but in any event at least 30 Business Days prior
to the date of automatic renewal of its election not to renew such Standby
Letter of Credit (a "Notice of Termination") and (B) in the case of a Trade
Letter of Credit, 60 days after the date of issuance thereof; provided that the
terms of each Standby Letter of Credit that is automatically renewable annually
shall (x) require the Issuing Bank that issued such Standby Letter of Credit to
give the beneficiary named in such Standby Letter of Credit notice of any Notice
of Termination, (y) permit such beneficiary, upon receipt of such notice, to
draw under such Standby Letter of Credit prior to the date such Standby Letter
of Credit otherwise would have been automatically renewed and (z) not permit the
expiration date (after giving effect to any renewal) of such Standby Letter of
Credit in any event to be extended to a date later than 60 days before April 30,
2002. If either a Notice of Renewal is not given by the Borrower or a Notice of
Termination is given by the Issuing Bank pursuant to the immediately preceding
sentence, such Standby Letter of Credit shall expire on the date on which it
otherwise would have been automatically renewed; provided, however, that even in
the absence of receipt of a Notice of Renewal the Issuing Bank may in its
discretion, unless instructed to the contrary by the Administrative Agent or the
Borrower, deem that a Notice of Renewal had been timely delivered and in such
case, a Notice of Renewal shall be deemed to have been so delivered for all
purposes under this Agreement. Within the limits of the Letter of Credit
Facility, and subject to the limits referred to above, the Borrower may request
the issuance of Letters of Credit under this Section 2.01(e), repay any Letter
of Credit Advances resulting from drawings thereunder pursuant to Section
2.03(c) and request the issuance of additional Letters of Credit under this
Section 2.01(e).
SECTION 2.02. Making the Advances. (a) Except as otherwise
provided in Section 2.02(b) or 2.03 and except in respect of Advances made on
the date of the Initial Extension of Credit, in which case notice will be given
on the date of such Initial Extension of Credit, each Borrowing (other than a
Swing Line Borrowing) shall be made on notice, given not later than 11:00 A.M.
(Charlotte, North Carolina time) on the third Business Day prior to the date of
the proposed Borrowing in the case of a Borrowing consisting of Eurodollar Rate
Advances, or the first Business Day prior to the date of the proposed Borrowing
in the case of a Borrowing consisting of Base Rate Advances, by the Borrower to
the Administrative Agent, which shall give to each Appropriate Lender prompt
notice thereof by telex or telecopier. Each such notice of a Borrowing (a
"Notice of Borrowing") shall be by telephone, confirmed promptly in writing, or
by telex or telecopier, in substantially the form of Exhibit B hereto,
specifying therein the requested (i) date of such Borrowing, (ii) Facility under
which such Borrowing is to be made, (iii) Type of Advances comprising
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such Borrowing, (iv) aggregate amount of such Borrowing and (v) in the case of a
Borrowing consisting of Eurodollar Rate Advances, initial Interest Period for
each such Advance. Each Appropriate Lender shall, before 11:00 A.M. (Charlotte,
North Carolina time) on the date of such Borrowing, make available for the
account of its Applicable Lending Office to the Administrative Agent at the
Administrative Agent's Account, in same day funds, such Lender's ratable portion
of such Borrowing in accordance with the respective Commitments under the
applicable Facility of such Lender and the other Appropriate Lenders. After the
Administrative Agent's receipt of such funds and upon fulfillment of the
applicable conditions set forth in Article III, the Administrative Agent will
make such funds available to the Borrower by crediting the Borrower's Account;
provided, however, that, in the case of any Working Capital Borrowing, the
Administrative Agent shall first make a portion of such funds equal to the
aggregate principal amount of any Swing Line Advances and Letter of Credit
Advances made by the Swing Line Bank or the Issuing Bank, as the case may be,
and, in the case of Letter of Credit Advances, by any other Working Capital
Lender and outstanding on the date of such Working Capital Borrowing, plus
interest accrued and unpaid thereon to and as of such date, available to the
Swing Line Bank or the Issuing Bank, as the case may be, and such other Working
Capital Lenders for repayment of such Letter of Credit Advances.
(b) Upon written demand by the Swing Line Bank (which demand
shall be given to the Administrative Agent and the Administrative Agent shall
notify each Working Capital Lender of such demand), each other Working Capital
Lender shall purchase from the Swing Line Bank, and the Swing Line Bank shall
sell and assign to each such other Working Capital Lender, such other Lender's
Pro Rata Share of the principal of such outstanding Swing Line Advance as of the
date of such demand, by making available for the account of its Applicable
Lending Office to the Administrative Agent for the account of the Swing Line
Bank, by deposit to the Administrative Agent's Account, in same day funds, an
amount equal to the portion of then outstanding principal amount of such Swing
Line Advance to be purchased by such Lender. Promptly after receipt thereof, the
Administrative Agent shall transfer such funds to the Swing Line Bank. Such
purchase by each Working Capital Lender shall be a Working Capital Advance for
all purposes of this Agreement. The Borrower hereby agrees to each such sale and
assignment. Each Working Capital Lender agrees to purchase its Pro Rata Share of
an outstanding Swing Line Advance on (i) the Business Day on which demand
therefor is made by the Swing Line Bank, provided that notice of such demand is
given not later than 11:00 A.M. (Charlotte, North Carolina) on such Business Day
or (ii) the first Business Day next succeeding such demand if notice of such
demand is given after such time. If such Lender shall pay to the Administrative
Agent such amount for the account of the Swing Line Bank on any Business Day,
such amount so paid in respect of principal shall constitute a Working Capital
Advance made by such Lender on such Business Day for purposes of this Agreement,
and the outstanding principal amount of the Swing Line Advance made by the Swing
Line Bank shall be reduced by such amount on such Business Day. Upon any such
assignment by the Swing Line Bank to any other Working Capital
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Lender of a portion of a Swing Line Advance, the Swing Line Bank represents and
warrants to such other Lender that the Swing Line Bank is the legal and
beneficial owner of such interest being assigned by it, but makes no other
representation or warranty and assumes no responsibility with respect to such
Swing Line Advance, the Loan Documents or any Loan Party. If and to the extent
that any Working Capital Lender shall not have so made the amount of such Swing
Line Advance available to the Administrative Agent, such Working Capital Lender
agrees to pay to the Administrative Agent forthwith on demand such amount
together with interest thereon, for each day from the date of demand by the
Swing Line Bank until the date such amount is paid to the Administrative Agent,
at the Federal Funds Rate.
(c) Anything in subsection (a) above to the contrary
notwithstanding, (i) the Borrower may not select Eurodollar Rate Advances for
the initial Borrowing hereunder or for any Borrowing if the aggregate amount of
such Borrowing is less than $2,000,000 or if the obligation of the Appropriate
Lenders to make Eurodollar Rate Advances shall then be suspended pursuant to
Section 2.09 or Section 2.10 and (ii) the Term A Advances may not be outstanding
as part of more than 4 separate Borrowings, the Term B Advances may not be
outstanding as more than 7 separate Borrowings and Working Capital Advances made
on any date may not be outstanding as part of more than 3 separate Borrowings
(other than Working Capital Advances made due to pro-rata purchases by the
Working Capital Lenders of Swing Line Advances).
(d) Each Notice of Borrowing shall be irrevocable and binding
on the Borrower. In the case of any Borrowing that the related Notice of
Borrowing specifies is to be comprised of Eurodollar Rate Advances, the Borrower
shall indemnify each Appropriate Lender against any loss, cost or expense
incurred by such Lender as a result of any failure by the Loan Parties to
fulfill on or before the date specified in such Notice of Borrowing for such
Borrowing the applicable conditions set forth in Article III, including, without
limitation, any loss (including loss of anticipated profits), cost or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by such Lender to fund the Advance to be made by such Lender as part of
such Borrowing when such Advance, as a result of such failure, is not made on
such date.
(e) Unless the Administrative Agent shall have received notice
from an Appropriate Lender prior to the date of any Borrowing under a Facility
under which such Lender has a Commitment that such Lender will not make
available to the Administrative Agent such Lender's ratable 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 subsection (a) or (b) of this Section 2.02 and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower on such date a corresponding amount. If and to the extent that such
Lender shall not have so made such ratable portion available to the
Administrative Agent, such Lender and the Borrower severally agree to repay or
pay to the Administrative Agent forthwith on demand
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such corresponding amount and to pay interest thereon, for each day from the
date such amount is made available to the Borrower until the date such amount is
repaid or paid to the Administrative Agent, at (i) in the case of the Borrower,
the interest rate applicable at such time under Section 2.07 to Advances
comprising such Borrowing and (ii) in the case of such Lender, the Federal Funds
Rate. If such Lender shall pay to the Administrative Agent such corresponding
amount, such amount so paid shall constitute such Lender's Advance as part of
such Borrowing for all purposes.
(f) The failure of any Lender to make the Advance to be made
by it as part of any Borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its Advance on the date of such Borrowing,
but no Lender shall be responsible for the failure of any other Lender to make
the Advance to be made by such other Lender on the date of any Borrowing.
SECTION 2.03. Issuance of and Drawings and Reimbursement Under
Letters of Credit. (a) Request for Issuance. Each Letter of Credit shall be
issued upon notice, given not later than 11:00 A.M. (Charlotte, North Carolina
time) on the tenth day prior to the date of the proposed issuance of such Letter
of Credit (or such later day as the Issuing Bank shall agree), by the Borrower
to the Issuing Bank, which shall give to the Administrative Agent and each
Working Capital Lender prompt notice thereof by telex or telecopier. Each such
notice of issuance of a Letter of Credit (a "Notice of Issuance") shall be by
telephone, confirmed promptly in writing, or by telex or telecopier, specifying
therein the requested (A) date of such issuance (which shall be a Business Day),
(B) Available Amount of such Letter of Credit, (C) expiration date of such
Letter of Credit, (D) name and address of the beneficiary of such Letter of
Credit and (E) form of such Letter of Credit, and shall be accompanied by such
application and agreement for letter of credit as the Issuing Bank may specify
to the Borrower for use in connection with such requested Letter of Credit (a
"Letter of Credit Agreement"). If the requested form of such Letter of Credit is
acceptable to the Issuing Bank in its sole discretion, the Issuing Bank will,
upon fulfillment of the applicable conditions set forth in Article III, make
such Letter of Credit available to the Borrower at the Issuing Bank's office
referred to in Section 8.02 or as otherwise agreed with the Borrower in
connection with such issuance. In the event and to the extent that the
provisions of any Letter of Credit Agreement shall conflict with this Agreement,
the provisions of this Agreement shall govern.
(b) Letter of Credit Reports. The Issuing Bank shall furnish
(A) to the Administrative Agent on the first Business Day of each week a written
report summarizing issuance and expiration dates of Letters of Credit issued
during the previous week and drawings during such week under all Letters of
Credit, (B) to each Working Capital Lender on the first Business Day of each
month a written report summarizing issuance and expiration dates of Letters of
Credit issued during the preceding month and drawings during such month under
all Letters of Credit and (C) to the Administrative Agent, the Borrower
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and each Working Capital Lender on the first Business Day of each calendar
quarter a written report setting forth the average daily aggregate Available
Amount during the preceding calendar quarter of all Letters of Credit.
(c) Drawing and Reimbursement. The payment by the Issuing Bank
of a draft drawn under any Letter of Credit shall constitute for all purposes of
this Agreement the making by the Issuing Bank of a Letter of Credit Advance,
which shall be a Prime Rate Advance, in the amount of such draft. Upon written
demand by the Issuing Bank, with a copy of such demand to the Administrative
Agent, each Working Capital Lender shall purchase from the Issuing Bank, and the
Issuing Bank shall sell and assign to each such Working Capital Lender, such
Lender's Pro Rata Share of such outstanding Letter of Credit Advance as of the
date of such purchase, by making available for the account of its Applicable
Lending Office to the Administrative Agent for the account of the Issuing Bank,
by deposit to the Administrative Agent's Account, in same day funds, an amount
equal to the portion of the outstanding principal amount of such Letter of
Credit Advance to be purchased by such Lender. Promptly after receipt thereof,
the Administrative Agent shall transfer such funds to the Issuing Bank. The
Borrower hereby agrees to each such sale and assignment. Each Working Capital
Lender agrees to purchase its Pro Rata Share of an outstanding Letter of Credit
Advance on (i) the Business Day on which demand therefor is made by the Issuing
Bank, provided notice of such demand is given not later than 11:00 A.M.
(Charlotte, North Carolina time) on such Business Day or (ii) the first Business
Day next succeeding such demand if notice of such demand is given after such
time. Upon any such assignment by the Issuing Bank to any other Lender of a
portion of a Letter of Credit Advance, the Issuing Bank represents and warrants
to such other Lender that the Issuing Bank is the legal and beneficial owner of
such interest being assigned by it, free and clear of any liens, but makes no
other representation or warranty and assumes no responsibility with respect to
such Letter of Credit Advance, the Loan Documents or any Loan Party. If and to
the extent that any Working Capital Lender shall not have so made the amount of
such Letter of Credit Advance available to the Administrative Agent, such Lender
agrees to pay to the Administrative Agent forthwith on demand such amount
together with interest thereon, for each day from the date of demand by the
Issuing Bank until the date such amount is paid to the Administrative Agent, at
the Federal Funds Rate for its account or the account of the Issuing Bank, as
applicable. If such Lender shall pay to the Administrative Agent such amount for
the account of the Issuing Bank on any Business Day, such amount so paid in
respect of principal shall constitute a Letter of Credit Advance made by such
Lender on such Business Day for purposes of this Agreement, and the outstanding
principal amount of the Letter of Credit Advance made by the Issuing Bank shall
be reduced by such amount on such Business Day (it being understood that any
such payment by any Lender is without prejudice to, and does not constitute a
waiver of, any right any Lender might have or might acquire as a result of the
payment by the Issuing Bank of any draft or the reimbursement by any Lender
thereof).
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(d) Failure to Make Letter of Credit Advances. The failure of
any Lender to make the Letter of Credit Advance to be made by it on the date
specified in Section 2.03(c) shall not relieve any other Lender of its
obligation hereunder to make its Letter of Credit Advance on such date, but no
Lender shall be responsible for the failure of any other Lender to make the
Letter of Credit Advance to be made by such other Lender on such date.
SECTION 2.04. Repayment of Advances. (a) Term A Advances. The
Borrower shall repay to the Administrative Agent for the ratable account of the
Term A Lenders the aggregate outstanding principal amount of the Term A Advances
on the following dates in the amounts indicated (which amounts shall be reduced
as a result of the application of prepayments in accordance with the order of
priority set forth in Section 2.06):
Date Amount
---- ------
March 15, 1998 $ 2,500,000
June 15, 1998 $ 2,500,000
September 15, 1998 $ 2,500,000
December 15, 1998 $ 2,500,000
March 15, 1999 $ 5,000,000
June 15, 1999 $ 5,000,000
September 15, 1999 $ 5,000,000
December 15, 1999 $ 5,000,000
March 15, 2000 $ 6,250,000
June 15, 2000 $ 6,250,000
September 15, 2000 $ 6,250,000
December 15, 2000 $ 6,250,000
March 15, 2001 $ 7,500,000
June 15, 2001 $ 7,500,000
September 15, 2001 $ 7,500,000
December 15, 2001 $ 7,500,000
March 15, 2002 $ 3,750,000
April 30, 2002 $11,250,000
; provided, however, that the final principal installment shall be repaid on the
Termination Date and in any event shall be in an amount equal to the aggregate
principal amount of the Term A Advances outstanding on such date.
(b) Term B Advances. The Borrower shall repay to the
Administrative Agent for the ratable account of the Term B Lenders the aggregate
outstanding principal amount of the Term B Advances on the following dates in
the amounts indicated (which
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amounts shall be reduced as a result of the application of prepayments in
accordance with the order of priority set forth in Section 2.06):
Date Amount
---- ------
March 15, 1998 $250,000
June 15, 1998 $250,000
September 15, 1998 $250,000
December 15, 1998 $250,000
March 15, 1999 $250,000
June 15, 1999 $250,000
September 15, 1999 $250,000
December 15, 1999 $250,000
March 15, 2000 $250,000
June 15, 2000 $250,000
September 15, 2000 $250,000
December 15, 2000 $250,000
March 15, 2001 $1,750,000
June 15, 2001 $1,750,000
September 15, 2001 $1,750,000
December 15, 2001 $1,750,000
March 15, 2002 $47,500,000
April 30, 2002 $142,500,000
; provided, however, that the final principal installment shall be repaid on the
Termination Date and in any event shall be in an amount equal to the aggregate
principal amount of the Term B Advances outstanding on such date.
(c) Working Capital Advances. The Borrower shall repay to the
Administrative Agent for the ratable account of the Working Capital Lenders on
the Termination Date the aggregate principal amount of the Working Capital
Advances then outstanding.
(d) Swing Line Advances. In addition to periodic principal
payments made on the Swing Line Advances pursuant to the Cash Management
Documentation, the Borrower shall repay to the Administrative Agent for the
account of the Swing Line Bank on the Termination Date the aggregate principal
amount of the Swing Line Advances then outstanding.
(e) Letter of Credit Advances. (i) The Borrower shall repay to
the Administrative Agent for the ratable account of the Issuing Bank and each
other Working
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Capital Lender that has made a Letter of Credit Advance on the earlier of demand
and the Termination Date the outstanding principal amount of each Letter of
Credit Advance made by each of them.
(ii) The payment Obligations of the Borrower under this
Agreement, any Letter of Credit Agreement and any other agreement or instrument
relating to any Letter of Credit shall be unconditional and irrevocable, and
shall be paid strictly in accordance with the terms of this Agreement, such
Letter of Credit Agreement and such other agreement or instrument under all
circumstances, including, without limitation, the following circumstances (it
being understood that any such payment by the Borrower is without prejudice to,
and does not constitute a waiver of, any rights the Borrower might have or might
acquire as a result of the payment by the Issuing Bank of any draft or the
reimbursement by the Borrower thereof):
(A) any lack of validity or enforceability of any Loan
Document, any Letter of Credit Agreement, any Letter of Credit or any
other agreement or instrument relating thereto (all of the foregoing
being, collectively, the "L/C Related Documents");
(B) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations of the Borrower in
respect of any L/C Related Document or any other amendment or waiver of
or any consent to departure from all or any of the L/C Related
Documents;
(C) the existence of any claim, set-off, defense or other
right that the Borrower may have at any time against any beneficiary or
any transferee of a Letter of Credit (or any Persons for whom any such
beneficiary or any such transferee may be acting), the Issuing Bank or
any other Person, whether in connection with the transactions
contemplated by the L/C Related Documents or any unrelated transaction;
(D) any statement or any other document presented under a
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(E) payment by the Issuing Bank under a Letter of Credit
against presentation of a draft or certificate that does not strictly
comply with the terms of such Letter of Credit;
(F) any exchange, release or non-perfection of any Collateral
or other collateral, or any release or amendment or waiver of or consent
to departure from the Guaranty or any other guarantee, for all or any of
the Obligations of the Borrower in respect of the L/C Related Documents;
or
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(G) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing, including, without limitation, any
other circumstance that might otherwise constitute a defense available
to, or a discharge of, the Borrower or a guarantor.
SECTION 2.05. Termination or Reduction of the Commitments. (a)
Optional. The Borrower may, upon at least five Business Days' notice to the
Administrative Agent, terminate in whole or reduce in part (i) the unused
portions of the Term A Commitments and the Term B Commitments and (ii) the
Unused Working Capital Commitments; provided, however, that each partial
reduction of a Facility (i) shall be in an aggregate amount of $2,000,000 or an
integral multiple of $500,000 in excess thereof and (ii) shall be made ratably
among the Appropriate Lenders in accordance with their Commitments with respect
to such Facility.
(b) Mandatory. (i) On the date of the Term A Borrowing, after
giving effect to such Term A Borrowing, and from time to time thereafter upon
each repayment or prepayment of the Term A Advances, the aggregate Term A
Commitments of the Term A Lenders shall be automatically and permanently
reduced, on a pro rata basis, by an amount equal to the amount by which the
aggregate Term A Commitments immediately prior to such reduction exceed the
aggregate unpaid principal amount of the Term A Advances then outstanding.
(ii) On the date of the Term B Borrowing, after giving effect
to such Term B Borrowing, and from time to time thereafter upon each repayment
or prepayment of the Term B Advances, the aggregate Term B Commitments of the
Term B Lenders shall be automatically and permanently reduced, on a pro rata
basis, by an amount equal to the amount by which the aggregate Term B
Commitments immediately prior to such reduction exceed the aggregate unpaid
principal amount of the Term B Advances then outstanding.
(iii) The Letter of Credit Facility shall be permanently
reduced from time to time on the date of each reduction in the Working Capital
Facility by the amount, if any, by which the amount of the Letter of Credit
Facility exceeds the Working Capital Facility after giving effect to such
reduction of the Working Capital Facility.
(iv) The Swing Line Facility shall be permanently reduced from
time to time on the date of each reduction in the Working Capital Facility by
the amount, if any, by which the amount of the Swing Line Facility exceeds the
Working Capital Facility after giving effect to such reduction of the Working
Capital Facility.
SECTION 2.06. Prepayments. (a) Optional. The Borrower may,
upon at least one Business Day's notice in the case of Prime Rate Advances and
three Business Day's notice in the case of Eurodollar Rate Advances, in each
case to the Administrative Agent
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stating the proposed date and aggregate principal amount of the prepayment, and
if such notice is given the Borrower shall, prepay the outstanding aggregate
principal amount of the Advances comprising part of the same Borrowing in whole
or ratably in part, together with accrued interest to the date of such
prepayment on the aggregate principal amount prepaid; provided, however, that
(x) each partial prepayment shall be in an aggregate principal amount of
$2,000,000 or an integral multiple of $500,000 in excess thereof and (y) if any
prepayment of a Eurodollar Rate Advance is made on a date other than the last
day of an Interest Period for such Advance the Borrower shall also pay any
amounts owing pursuant to Section 8.04(c). Each such prepayment of the Term
Facilities shall be applied ratably to each of the Term Facilities as follows:
first, to the next two scheduled amortization payments in respect of such Term
Facility in the order of maturity; and second, to the remaining amortization
payments in respect of such Term Facility on a pro rata basis.
(b) Mandatory. (i) The Borrower shall, on the 90th day
following the end of each Fiscal Year (commencing with the 1998 Fiscal Year),
prepay an aggregate principal amount of the Advances comprising part of the same
Borrowings equal to 50% of the amount of Excess Cash Flow for such Fiscal Year.
Each such prepayment shall be applied ratably to each of the Term Facilities and
shall reduce the scheduled amortization payments thereof on a pro rata basis.
(ii) The Borrower shall, within three days following receipt
of Net Cash Proceeds by the Borrower or any of its Subsidiaries from (A) the
sale, transfer or other disposition (other than by lease) of any assets of the
Borrower or any of its Subsidiaries (other than any sale, transfer or other
disposition of assets pursuant to clause (i), (ii) or (iii) of Section 5.02(e)),
(B) the incurrence or issuance by the Borrower or any of its Subsidiaries of any
Debt (other than Debt incurred or issued pursuant to Section 5.02(b)), and (C)
the sale or issuance by the Borrower or any of its Subsidiaries of any capital
stock or other ownership or profit interest, any securities convertible into or
exchangeable for capital stock or other ownership or profit interest or any
warrants, rights or options to acquire capital stock or other ownership or
profit interest, prepay an aggregate principal amount of the Advances comprising
part of the same Borrowings equal to the amount of such Net Cash Proceeds;
provided, however, that if the aggregate amount of Net Cash Proceeds referred to
in clause (A) above not previously applied to the prepayment of the Advances is
less than $2,000,000, the Borrower may retain such Net Cash Proceeds until the
amount of all Net Cash Proceeds so retained when aggregated with all other
retained Net Cash Proceeds shall equal or exceed $2,000,000. Each such
prepayment shall be applied ratably to each of the Term Facilities and shall
reduce the scheduled amortization payments thereof on a pro rata basis.
(iii) The Borrower shall, on each Business Day, prepay an
aggregate principal amount of the Working Capital Advances comprising part of
the same Borrowings, the Letter of Credit Advances and the Swing Line Advances
equal to the amount by which
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(A) the sum of the aggregate principal amount of (x) the Working Capital
Advances, (y) the Letter of Credit Advances and (z) the Swing Line Advances then
outstanding plus the aggregate Available Amount of all Letters of Credit then
outstanding exceeds (B) the Working Capital Facility on such Business Day.
Prepayments of the Working Capital Facility made pursuant to this clause (iii)
shall be first, applied to prepay Letter of Credit Advances then outstanding
until such Advances are paid in full, second, applied to prepay Swing Line
Advances then outstanding until such Advances are paid in full, and third,
applied to prepay Working Capital Advances then outstanding comprising part of
the same Borrowings until such Advances are paid in full.
(iv) The Borrower shall, on each Business Day, pay to the
Administrative Agent for deposit in the L/C Cash Collateral Account an amount
sufficient to cause the aggregate amount on deposit in such Account to equal the
amount by which the aggregate Available Amount of all Letters of Credit then
outstanding exceeds the Letter of Credit Facility on such Business Day.
(v) All prepayments under this subsection (b) shall be made
together with accrued interest to the date of such prepayment on the principal
amount prepaid.
SECTION 2.07. Interest. (a) Scheduled Interest. The Borrower
shall pay interest on the unpaid principal amount of each Advance owing to each
Lender from the date of such Advance until such principal amount shall be paid
in full, at the following rates per annum:
(i) Prime Rate Advances. During such periods as such Advance
is a Prime Rate Advance, a rate per annum equal at all times to the sum
of (A) the Prime Rate in effect from time to time plus (B) the
Applicable Margin in effect from time to time, payable in arrears
(subject to the provisions of Section 2.11) on the last Business Day of
each March, June, September and December during such periods and on the
date such Prime Rate Advance shall be Converted or paid in full.
(ii) Eurodollar Rate Advances. During such periods as such
Advance is a Eurodollar Rate Advance, a rate per annum equal at all
times during each Interest Period for such Advance to the sum of (A) the
Eurodollar Rate for such Interest Period for such Advance plus (B) the
Applicable Margin in effect on the first day of such Interest Period for
such Advance, payable in arrears on the last day of such Interest Period
and, if such Interest Period has a duration of more than three months,
on each day that occurs during such Interest Period every three months
from the first day of such Interest Period and on the date such
Eurodollar Rate Advance shall be Converted or paid in full.
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(b) Default Interest. Upon the occurrence and during the
continuance of an Event of Default, the Borrower shall pay interest on (i) the
unpaid principal amount of each Advance owing to each Lender, payable in arrears
on the dates referred to in clause (a)(i) or (a)(ii) above and on demand, at a
rate per annum equal at all times to 2% per annum above the rate per annum
required to be paid on such Advance pursuant to clause (a)(i) or (a)(ii) above
and (ii) to the fullest extent permitted by law, the amount of any interest, fee
or other amount payable hereunder that is not paid when due, from the date such
amount shall be due until such amount shall be paid in full, payable in arrears
on the date such amount shall be paid in full and on demand, at a rate per annum
equal at all times to 2% per annum above the rate per annum required to be paid,
in the case of interest, on the Type of Advance on which such interest has
accrued pursuant to clause (a)(i) or (a)(ii) above, and, in all other cases, on
Prime Rate Advances pursuant to clause (a)(i) above.
(c) Notice of Interest Rate. Promptly after receipt of a
Notice of Borrowing pursuant to Section 2.02(a), the Administrative Agent shall
give notice to the Borrower and each Appropriate Lender of the applicable
interest rate determined by the Administrative Agent for purposes of clause
(a)(i) or (ii).
SECTION 2.08. Fees. (a) Commitment Fee. The Borrower shall pay
to the Administrative Agent for the account of the Lenders a commitment fee,
from the date hereof in the case of each Initial Lender and from the effective
date specified in the Assignment and Acceptance pursuant to which it became a
Lender in the case of each other Lender until the Termination Date, payable in
arrears on the date of the initial Borrowing hereunder, on the last Business Day
of each March, June, September and December, commencing December 31, 1997, and
on the Termination Date, equal to (i) the average daily Unused Working Capital
Commitment of such Lender plus its Pro Rata Share of the average daily
outstanding Swing Line Advances for the prior three month period (or such
shorter period for which such commitment fee is calculated) times (ii) (x) prior
to the date on which the quarterly financial statements in respect of the fiscal
quarter ending May 10, 1998 are delivered to the Administrative Agent pursuant
to Section 5.03(c), 1/2 of 1% per annum and (y) thereafter, a percentage
determined by reference to the Leverage Ratio as set forth on Schedule II;
provided, however, that any commitment fee accrued with respect to any of the
Commitments of a Defaulting Lender during the period prior to the time such
Lender became a Defaulting Lender and unpaid at such time shall not be payable
by the Borrower so long as such Lender shall be a Defaulting Lender except to
the extent that such commitment fee shall otherwise have been due and payable by
the Borrower prior to such time; and provided further that no commitment fee
shall accrue on any of the Commitments of a Defaulting Lender so long as such
Lender shall be a Defaulting Lender.
(b) Letter of Credit Fees, Etc. (i) The Borrower shall pay to
the Administrative Agent for the account of each Lender a commission, payable in
arrears on the last Business Day of each March, June, September and December,
commencing December
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31, 1997, and on the earliest to occur of the full drawing expiration,
termination or cancellation of any such Letter of Credit and on the Termination
Date, equal to (A) such Lender's Pro Rata Share of the average daily aggregate
Available Amount for the prior three month period (or such shorter period for
which such commission is calculated) of all Letters of Credit outstanding from
time to time times (B) the Applicable Margin per annum then in effect for
Eurodollar Rate Advances under the Working Capital Facility.
(ii) The Borrower shall pay to the Issuing Bank, for its own
account, (A) a fronting fee, payable in arrears, on the last Business Day of
each March, June, September and December, commencing December 31, 1997, and on
the Termination Date, equal to (A) the average daily aggregate Available Amount
for the prior three month period (or such shorter period for which such fronting
fee is calculated), from the date hereof until the Termination Date, times (B)
0.125% per annum, and (B) such other reasonable and customary commissions,
fronting fees, transfer fees and other fees and charges in connection with the
issuance or administration of each Letter of Credit as the Borrower and the
Issuing Bank shall agree.
(c) Administrative Agent's Fees. The Borrower shall pay to the
Administrative Agent for its own account fees set forth in the Administrative
Agent's fee letter.
SECTION 2.09. Conversion of Advances. (a) Optional. The
Borrower may on any Business Day, upon notice given to the Administrative Agent
not later than 11:00 A.M. (Charlotte, North Carolina) on the third Business Day
prior to the date of the proposed Conversion and subject to the provisions of
Sections 2.07 and 2.10, Convert all or any portion of the Advances of one Type
comprising the same Borrowing into Advances of the other Type; provided,
however, that, except as provided in Section 2.10(a), any Conversion of
Eurodollar Rate Advances into Prime Rate Advances shall be made only on the last
day of an Interest Period for such Eurodollar Rate Advances, any Conversion of
Prime Rate Advances into Eurodollar Rate Advances shall be in an amount not less
than the minimum amount specified in Section 2.02(c), no Conversion of any
Advances shall result in more separate Borrowings than permitted under Section
2.02(c) and each Conversion of Advances comprising part of the same Borrowing
under any Facility shall be made ratably among the Appropriate Lenders in
accordance with their Commitments under such Facility. Each such notice of
Conversion shall, within the restrictions specified above, specify (i) the date
of such Conversion, (ii) the Advances to be Converted and (iii) if such
Conversion is into Eurodollar Rate Advances, the duration of the initial
Interest Period for such Advances. Each notice of Conversion shall be
irrevocable and binding on the Borrower.
(b) Mandatory. (i) On the date on which the aggregate unpaid
principal amount of Eurodollar Rate Advances comprising any Borrowing shall be
reduced, by
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payment or prepayment or otherwise, to less than $2,000,000, such Advances shall
automatically Convert into Prime Rate Advances.
(ii) If the Borrower shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01, the
Administrative Agent will forthwith so notify the Borrower and the Appropriate
Lenders, whereupon each such Eurodollar Rate Advance will automatically, on the
last day of the then existing Interest Period therefor, Convert into a Prime
Rate Advance.
(iii) Upon the occurrence and during the continuance of any
Event of Default, (x) each Eurodollar Rate Advance will automatically, on the
last day of the then existing Interest Period therefor, Convert into a Prime
Rate Advance and (y) the obligation of the Lenders to make, or to Convert
Advances into, Eurodollar Rate Advances shall be suspended.
SECTION 2.10. Increased Costs, Etc. (a) If, due to either (i)
the introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request from any central
bank or other governmental authority (whether or not having the force of law),
there shall be any increase in the cost to any Lender Party of agreeing to make
or of making, funding or maintaining Eurodollar Rate Advances or of agreeing to
issue or of issuing or maintaining Letters of Credit or of agreeing to make or
of making or maintaining Letter of Credit Advances (excluding for purposes of
this Section 2.10 any such increased costs resulting from (i) Taxes or Other
Taxes (as to which Section 2.12 shall govern) and (ii) changes in the basis of
taxation of overall net income or overall gross income by the United States or
by the foreign jurisdiction or state under the laws of which such Lender Party
is organized or has its Applicable Lending Office or any political subdivision
thereof), then the Borrower shall from time to time, upon demand by such Lender
Party (with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender Party additional amounts
sufficient to compensate such Lender Party for such increased cost; provided,
however, that a Lender Party claiming additional amounts under this Section
2.10(a) agrees to use reasonable efforts (consistent with its internal policy
and legal and regulatory restrictions) to designate a different Applicable
Lending Office if the making of such a designation would avoid the need for, or
reduce the amount of, such increased cost that may thereafter accrue and would
not, in the reasonable judgment of such Lender Party, be otherwise
disadvantageous to such Lender Party. A certificate as to the amount of such
increased cost, submitted to the Borrower by such Lender Party, shall be
conclusive and binding for all purposes, absent manifest error. Upon receipt of
notice from a Lender Party claiming compensation pursuant to this Section
2.10(a) and so long as no Event of Default shall have occurred and be
continuing, the Borrower shall have the right, on or before the 30th day after
receipt of such notice, to Convert each Eurodollar Rate Advance under which such
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Lender has a Commitment into a Prime Rate Advance, subject to payment in full of
(i) all amounts necessary to compensate such Lender for such increased costs and
(ii) any amounts owing pursuant to Section 8.04(c) as a result of such
conversion.
(b) If, due to either (i) the introduction of or any change in
or in the interpretation of any law or regulation or (ii) the compliance with
any guideline or request from any central bank or other governmental authority
(whether or not having the force of law), there shall be any increase in the
amount of capital required or expected to be maintained by any Lender Party or
any corporation controlling such Lender Party as a result of or based upon the
existence of such Lender Party's commitment to lend or to issue Letters of
Credit hereunder and other commitments of such type or the issuance or
maintenance of the Letters of Credit (or similar contingent obligations), then,
upon demand by such Lender Party (with a copy of such demand to the
Administrative Agent), the Borrower shall pay to the Administrative Agent for
the account of such Lender Party, from time to time as specified by such Lender
Party, additional amounts sufficient to compensate such Lender Party in the
light of such circumstances, to the extent that such Lender Party reasonably
determines such increase in capital to be allocable to the existence of such
Lender Party's commitment to lend or to issue Letters of Credit hereunder or to
the issuance or maintenance of any Letters of Credit. A certificate as to such
amounts submitted to the Borrower by such Lender Party shall be conclusive and
binding for all purposes, absent manifest error.
(c) If, with respect to any Eurodollar Rate Advances under any
Facility, Lenders owed more than 50% of the then aggregate unpaid principal
amount thereof notify the Administrative Agent that the Eurodollar Rate for any
Interest Period for such Advances will not adequately reflect the cost to such
Lenders of making, funding or maintaining their Eurodollar Rate Advances for
such Interest Period, the Administrative Agent shall forthwith so notify the
Borrower and the Lenders, whereupon (i) each such Eurodollar Rate Advance under
any Facility will automatically, on the last day of the then existing Interest
Period therefor, Convert into a Prime Rate Advance and (ii) the obligation of
the Appropriate Lenders to make, or to Convert Advances into, Eurodollar Rate
Advances shall be suspended until the Administrative Agent shall notify the
Borrower that such Lenders have determined that the circumstances causing such
suspension no longer exist.
(d) Notwithstanding any other provision of this Agreement, if
the introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any central bank or other governmental
authority shall assert that it is unlawful, for any Lender or its Eurodollar
Lending Office to perform its obligations hereunder to make Eurodollar Rate
Advances or to continue to fund or maintain Eurodollar Rate Advances hereunder,
then, on notice thereof and demand therefor by such Lender to the Borrower
through the Administrative Agent, (i) each Eurodollar Rate Advance made by such
Lender will automatically, upon such demand, Convert into a Prime Rate Advance,
and (ii) the obligation of such Lender to make, or to Convert Advances into,
Eurodollar Rate
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Advances shall be suspended until the Administrative Agent shall notify the
Borrower that such Lender has determined that the circumstances causing such
suspension no longer exist; provided, however, that, before making any such
demand, such Lender agrees to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to designate a different
Eurodollar Lending Office if the making of such a designation would allow such
Lender or its Eurodollar Lending Office to continue to perform its obligations
to make Eurodollar Rate Advances or to continue to fund or maintain Eurodollar
Rate Advances and would not, in the judgment of such Lender, be otherwise
disadvantageous to such Lender.
SECTION 2.11. Payments and Computations. (a) The Borrower
shall make each payment hereunder and under the Notes, irrespective of any right
of counterclaim or set-off (except as otherwise provided in Section 2.15), not
later than 11:00 A.M. (Charlotte, North Carolina time) on the day when due in
U.S. dollars to the Administrative Agent at the Administrative Agent's Account
in same day funds. The Administrative Agent will promptly thereafter cause like
funds to be distributed (i) if such payment by the Borrower is in respect of
principal, interest, commitment fees or any other Obligation then payable
hereunder and under the Notes to more than one Lender Party, to such Lender
Parties for the account of their respective Applicable Lending Offices ratably
in accordance with the amounts of such respective Obligations then payable to
such Lender Parties and (ii) if such payment by the Borrower is in respect of
any Obligation then payable hereunder to one Lender Party, to such Lender Party
for the account of its Applicable Lending Office, in each case to be applied in
accordance with the terms of this Agreement. Upon its acceptance of an
Assignment and Acceptance and recording of the information contained therein in
the Register pursuant to Section 8.07(d), from and after the effective date of
such Assignment and Acceptance, the Administrative Agent shall make all payments
hereunder and under the Notes in respect of the interest assigned thereby to the
Lender Party assignee thereunder, and the parties to such Assignment and
Acceptance shall make all appropriate adjustments in such payments for periods
prior to such effective date directly between themselves. Periodic principal
payments will be made in respect of the Swing Line Advances as funds are
available in the Cash Management Account in accordance with Section 2.01(d). The
Swing Line Bank shall invoice the Borrower directly on a quarterly basis for
interest in respect of the Swing Line Advances.
(b) If the Administrative Agent receives funds for application
to the Obligations under the Loan Documents under circumstances for which the
Loan Documents do not specify the Advances or the Facility to which, or the
manner in which, such funds are to be applied, the Administrative Agent may, but
shall not be obligated to, elect to distribute such funds to each Lender Party
ratably in accordance with such Lender Party's proportionate share of the
principal amount of all outstanding Advances and the Available Amount of all
Letters of Credit then outstanding, in repayment or prepayment of such of the
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outstanding Advances or other Obligations owed to such Lender Party, and for
application to such principal installments, as the Administrative Agent shall
direct.
(c) The Borrower hereby authorizes each Lender Party, if and
to the extent payment owed to such Lender Party is not made when due hereunder
or, in the case of a Lender, under the Note held by such Lender, to charge from
time to time against any or all of the Borrower's accounts with such Lender
Party any amount so due.
(d) All computations of interest, fees and Letter of Credit
commissions shall be made by the Administrative Agent on the basis of a year of
360 days, in each case for the actual number of days (including the first day
but excluding the last day) occurring in the period for which such interest,
fees or commissions are payable. Each determination by the Administrative Agent
of an interest rate, fee or commission hereunder shall be conclusive and binding
for all purposes, absent manifest error.
(e) Whenever any payment hereunder or under the Notes shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest or commitment fee, as
the case may be; provided, however, that, if such extension would cause payment
of interest on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.
(f) Unless the Administrative Agent shall have received notice
from the Borrower prior to the date on which any payment is due to any Lender
Party hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each such Lender Party
on such due date an amount equal to the amount then due such Lender Party. If
and to the extent the Borrower shall not have so made such payment in full to
the Administrative Agent, each such Lender Party shall repay to the
Administrative Agent forthwith on demand such amount distributed to such Lender
Party together with interest thereon, for each day from the date such amount is
distributed to such Lender Party until the date such Lender Party repays such
amount to the Administrative Agent, at the Federal Funds Rate.
SECTION 2.12. Taxes. (a) Any and all payments by the Borrower
hereunder or under the Notes shall be made, in accordance with Section 2.11,
free and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of each Lender Party and the
Administrative Agent, taxes that are imposed on its overall net income by the
United States and taxes that are imposed on or measured by its overall net
income
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(and franchise taxes or excise taxes pursuant to Sections 67-4-801 through 822
of the Tennessee Code Annotated imposed in lieu thereof) by the state or foreign
jurisdiction under the laws of which such Lender Party or the Administrative
Agent (as the case may be) is organized or any political subdivision thereof
and, in the case of each Lender Party, taxes that are imposed on or measured by
its overall net income (and franchise taxes imposed [or excise taxes pursuant to
Sections 67-4-801 through 822 of the Tennessee Code Annotated] in lieu thereof)
by the state or foreign jurisdiction of such Lender Party's Applicable Lending
Office or any political subdivision thereof (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities in respect of
payments hereunder or under the Notes being hereinafter referred to as "Taxes").
If the Borrower shall be required by law to deduct any Taxes from or in respect
of any sum payable hereunder or under any Note to any Lender Party or the
Administrative Agent, (i) the sum payable shall be increased as may be necessary
so that after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.12) such Lender Party or the
Administrative Agent (as the case may be) receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the Borrower shall
make such deductions and (iii) the Borrower shall pay the full amount deducted
to the relevant taxation authority or other authority in accordance with
applicable law.
(b) In addition, the Borrower shall pay any present or future
stamp, documentary, excise, property or similar taxes, charges or levies that
arise from any payment made hereunder or under the Notes or from the execution,
delivery or registration of, performing under, or otherwise with respect to,
this Agreement or the Notes (hereinafter referred to as "Other Taxes").
(c) The Borrower shall indemnify each Lender Party and the
Administrative Agent for and hold it harmless against the full amount of Taxes
and Other Taxes, and for the full amount of taxes of any kind imposed by any
jurisdiction on amounts payable under this Section 2.12, imposed on or paid by
such Lender Party or the Administrative Agent (as the case may be) and any
liability (including penalties, additions to tax, interest and expenses) arising
therefrom or with respect thereto. This indemnification shall be made within 30
days from the date such Lender Party or the Administrative Agent (as the case
may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the
Borrower shall furnish to the Administrative Agent, at its address referred to
in Section 8.02, the original or a certified copy of a receipt evidencing such
payment. In the case of any payment hereunder or under the Notes by or on behalf
of the Borrower through an account or branch outside the United States or by or
on behalf of the Borrower by a payor that is not a United States person, if the
Borrower determines that no Taxes are payable in respect thereof, the Borrower
shall furnish, or shall cause such payor to furnish, to the Administrative
Agent, at such address, an opinion of counsel acceptable to the Administrative
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Agent stating that such payment is exempt from Taxes. For purposes of this
subsection (d) and subsection (e), the terms "United States" and "United States
person" shall have the meanings specified in Section 7701 of the Internal
Revenue Code.
(e) Each Lender Party organized under the laws of a
jurisdiction outside the United States shall, on or prior to the date of its
execution and delivery of this Agreement in the case of each Initial Lender or
Initial Issuing Bank, as the case may be, and on the date of the Assignment and
Acceptance pursuant to which it becomes a Lender Party in the case of each other
Lender Party, and from time to time thereafter as requested in writing by the
Borrower (but only so long thereafter as such Lender Party remains lawfully able
to do so), provide each of the Administrative Agent and the Borrower with two
original Internal Revenue Service forms 1001 or 4224 or (in the case of a Lender
Party that has certified in writing to the Administrative Agent that it is not a
"bank" as defined in Section 881(c)(3)(A) of the Internal Revenue Code) form W-8
(and, if such Lender Party delivers a form W-8, a certificate representing that
such Lender Party is not a "bank" for purposes of Section 881(c) of the Internal
Revenue Code, is not a 10-percent shareholder (within the meaning of Section
871(h)(3)(B) of the Internal Revenue Code) of the Borrower and is not a
controlled foreign corporation related to the Borrower (within the meaning of
Section 864(d)(4) of the Internal Revenue Code), as appropriate, or any
successor or other form prescribed by the Internal Revenue Service, certifying
that such Lender Party is exempt from or entitled to a reduced rate of United
States withholding tax on payments pursuant to this Agreement or the Notes or,
in the case of a Lender Party providing a form W-8, certifying that such Lender
Party is a foreign corporation, partnership, estate or trust. If the forms
provided by a Lender Party at the time such Lender Party first becomes a party
to this Agreement indicates a United States interest withholding tax rate in
excess of zero, withholding tax at such rate shall be considered excluded from
Taxes unless and until such Lender Party provides the appropriate form
certifying that a lesser rate applies, whereupon withholding tax at such lesser
rate only shall be considered excluded from Taxes for periods governed by such
form; provided, however, that, if at the date of the Assignment and Acceptance
pursuant to which a Lender Party becomes a party to this Agreement, the Lender
Party assignor was entitled to payments under subsection (a) in respect of
United States withholding tax with respect to interest paid at such date, then,
to such extent, the term Taxes shall include (in addition to withholding taxes
that may be imposed in the future or other amounts otherwise includable in
Taxes) United States withholding tax, if any, applicable with respect to the
Lender Party assignee on such date. If any form or document referred to in this
subsection (e) requires the disclosure of information, other than information
necessary to compute the tax payable and information required on the date hereof
by Internal Revenue Service form 1001, 4224 or W-8 (or the related certificate
described above), that the Lender Party reasonably considers to be confidential,
the Lender Party shall give notice thereof to the Borrower and shall not be
obligated to include in such form or document such confidential information.
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(f) For any period with respect to which a Lender Party has
failed to provide the Borrower with the appropriate form described in subsection
(e) above (other than if such failure is due to a change in law occurring after
the date on which a form originally was required to be provided or if such form
otherwise is not required under subsection (e) above), such Lender Party shall
not be entitled to indemnification under subsection (a) or (c) with respect to
Taxes imposed by the United States by reason of such failure; provided, however,
that should a Lender Party become subject to Taxes because of its failure to
deliver a form required hereunder, the Borrower shall take such steps as such
Lender Party shall reasonably request to assist such Lender Party to recover
such Taxes.
(g) Nothing herein contained shall be construed to require
that the Borrower pay any mortgage tax under the laws of the State of Oklahoma.
(h) Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 2.12 shall survive the repayment of the Advances and
the other obligations under the Loan Documents and the termination of the
Commitments hereunder.
SECTION 2.13. Sharing of Payments, Etc. If any Lender Party
shall obtain at any time any payment (whether voluntary, involuntary, through
the exercise of any right of set-off, or otherwise) (other than pursuant to
Section 2.10, 2.12, 8.04 or 8.07 hereof and other than in respect of payments
made in respect of the Swing Line Advances pursuant to the Cash Management
Documentation) (a) on account of Obligations due and payable to such Lender
Party hereunder and under the Notes at such time in excess of its ratable share
(according to the proportion of (i) the amount of such Obligations due and
payable to such Lender Party at such time to (ii) the aggregate amount of the
Obligations due and payable to all Lender Parties hereunder and under the Notes
at such time) of payments on account of the Obligations due and payable to all
Lender Parties hereunder and under the Notes at such time obtained by all the
Lender Parties at such time or (b) on account of Obligations owing (but not due
and payable) to such Lender Party hereunder and under the Notes at such time in
excess of its ratable share (according to the proportion of (i) the amount of
such Obligations owing to such Lender Party at such time to (ii) the aggregate
amount of the Obligations owing (but not due and payable) to all Lender Parties
hereunder and under the Notes at such time) of payments on account of the
Obligations owing (but not due and payable) to all Lender Parties hereunder and
under the Notes at such time obtained by all of the Lender Parties at such time,
such Lender Party shall forthwith purchase from the other Lender Parties such
participations in the Obligations due and payable or owing to them, as the case
may be, as shall be necessary to cause such purchasing Lender Party to share the
excess payment ratably with each of them; provided, however, that if all or any
portion of such excess payment is thereafter recovered from such purchasing
Lender Party, such purchase from each other Lender Party shall be rescinded and
such other Lender Party shall repay to the purchasing Lender Party the purchase
price to the extent of such Lender Party's ratable
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share (according to the proportion of (i) the purchase price paid to such Lender
Party to (ii) the aggregate purchase price paid to all Lender Parties) of such
recovery together with an amount equal to such Lender Party's ratable share
(according to the proportion of (i) the amount of such other Lender Party's
required repayment to (ii) the total amount so recovered from the purchasing
Lender Party) of any interest or other amount paid or payable by the purchasing
Lender Party in respect of the total amount so recovered. The Borrower agrees
that any Lender Party so purchasing a participation from another Lender Party
pursuant to this Section 2.13 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with respect
to such participation as fully as if such Lender Party were the direct creditor
of the Borrower in the amount of such participation.
SECTION 2.14. Use of Proceeds and Issuance of Letters of
Credit. The proceeds of the Advances and issuances of Letters of Credit shall be
available (and the Borrower agrees that it shall use such proceeds and Letters
of Credit) solely to pay transaction fees and expenses, refinance certain
Existing Debt, provide funds for general corporate purposes, and provide working
capital for the Borrower and its Subsidiaries.
SECTION 2.15. Defaulting Lenders. (a) In the event that, at
any one time, (i) any Lender Party shall be a Defaulting Lender, (ii) such
Defaulting Lender shall owe a Defaulted Advance to the Borrower and (iii) the
Borrower shall be required to make any payment hereunder or under any other Loan
Document to or for the account of such Defaulting Lender, then the Borrower may,
so long as no Default shall occur or be continuing at such time and to the
fullest extent permitted by applicable law, set off and otherwise apply the
Obligation of the Borrower to make such payment to or for the account of such
Defaulting Lender against the obligation of such Defaulting Lender to make such
Defaulted Advance. In the event that, on any date, the Borrower shall so set off
and otherwise apply its obligation to make any such payment against the
obligation of such Defaulting Lender to make any such Defaulted Advance on or
prior to such date, the amount so set off and otherwise applied by the Borrower
shall constitute for all purposes of this Agreement and the other Loan Documents
an Advance by such Defaulting Lender made on the date of set-off or application
by the Borrower under the Facility pursuant to which such Defaulted Advance was
originally required to have been made pursuant to Section 2.01. Such Advance
shall be a Prime Rate Advance and shall be considered, for all purposes of this
Agreement, to comprise part of the Borrowing in connection with which such
Defaulted Advance was originally required to have been made pursuant to Section
2.01, even if the other Advances comprising such Borrowing shall be Eurodollar
Rate Advances on the date such Advance is deemed to be made pursuant to this
subsection (a). The Borrower shall notify the Administrative Agent at any time
the Borrower exercises its right of set-off pursuant to this subsection (a) and
shall set forth in such notice (A) the name of the Defaulting Lender and the
Defaulted Advance required to be made by such Defaulting Lender and (B) the
amount set off and otherwise applied in respect of such Defaulted Advance
pursuant to this subsection (a). Any portion of such payment otherwise required
to
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be made by the Borrower to or for the account of such Defaulting Lender which is
paid by the Borrower, after giving effect to the amount set off and otherwise
applied by the Borrower pursuant to this subsection (a), shall be applied by the
Administrative Agent as specified in subsection (b) or (c) of this Section 2.15.
(b) In the event that, at any one time, (i) any Lender Party
shall be a Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted
Amount to the Administrative Agent or any of the other Lender Parties and (iii)
the Borrower shall make any payment hereunder or under any other Loan Document
to the Administrative Agent for the account of such Defaulting Lender, then the
Administrative Agent may, on its behalf or on behalf of such other Lender
Parties and to the fullest extent permitted by applicable law, apply at such
time the amount so paid by the Borrower to or for the account of such Defaulting
Lender to the payment of each such Defaulted Amount to the extent required to
pay such Defaulted Amount. In the event that the Administrative Agent shall so
apply any such amount to the payment of any such Defaulted Amount on any date,
the amount so applied by the Administrative Agent shall constitute for all
purposes of this Agreement and the other Loan Documents payment, to such extent,
of such Defaulted Amount on such date. Any such amount so applied by the
Administrative Agent shall be retained by the Administrative Agent or
distributed by the Administrative Agent to such other Lender Parties, ratably in
accordance with the respective portions of such Defaulted Amounts payable at
such time to the Administrative Agent and such other Lender Parties and, if the
amount of such payment made by the Borrower shall at such time be insufficient
to pay all Defaulted Amounts owing at such time to the Administrative Agent and
the other Lender Parties, in the following order of priority:
(i) first, to the Administrative Agent for any Defaulted
Amount then owing to the Administrative Agent; and
(ii) second, to any other Lender Parties for any Defaulted
Amounts then owing to such other Lender Parties, ratably in accordance
with such respective Defaulted Amounts then owing to such other Lender
Parties.
Any portion of such amount paid by the Borrower for the account of such
Defaulting Lender remaining, after giving effect to the amount applied by the
Administrative Agent pursuant to this subsection (b), shall be applied by the
Administrative Agent as specified in subsection (c) of this Section 2.15.
(c) In the event that, at any one time, (i) any Lender Party
shall be a Defaulting Lender, (ii) such Defaulting Lender shall not owe a
Defaulted Advance or a Defaulted Amount and (iii) the Borrower, the
Administrative Agent or any other Lender Party shall be required to pay or
distribute any amount hereunder or under any other Loan Document to or for the
account of such Defaulting Lender, then the Borrower or such other
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Lender Party shall pay such amount to the Administrative Agent to be held by the
Administrative Agent, to the fullest extent permitted by applicable law, in
escrow or the Administrative Agent shall, to the fullest extent permitted by
applicable law, hold in escrow such amount otherwise held by it. Any funds held
by the Administrative Agent in escrow under this subsection (c) shall be
deposited by the Administrative Agent in an account with NationsBank, in the
name and under the control of the Administrative Agent, but subject to the
provisions of this subsection (c). The terms applicable to such account,
including the rate of interest payable with respect to the credit balance of
such account from time to time, shall be NationsBank's standard terms applicable
to escrow accounts maintained with it. Any interest credited to such account
from time to time shall be held by the Administrative Agent in escrow under, and
applied by the Administrative Agent from time to time in accordance with the
provisions of, this subsection (c). The Administrative Agent shall, to the
fullest extent permitted by applicable law, apply all funds so held in escrow
from time to time to the extent necessary to make any Advances required to be
made by such Defaulting Lender and to pay any amount payable by such Defaulting
Lender hereunder and under the other Loan Documents to the Administrative Agent
or any other Lender Party, as and when such Advances or amounts are required to
be made or paid and, if the amount so held in escrow shall at any time be
insufficient to make and pay all such Advances and amounts required to be made
or paid at such time, in the following order of priority:
(i) first, to the Administrative Agent for any amount then due
and payable by such Defaulting Lender to the Administrative Agent
hereunder;
(ii) second, to any other Lender Parties for any amount then
due and payable by such Defaulting Lender to such other Lender Parties
hereunder, ratably in accordance with such respective amounts then due
and payable to such other Lender Parties; and
(iii) third, to the Borrower for any Advance then required to
be made by such Defaulting Lender pursuant to a Commitment of such
Defaulting Lender.
In the event that any Lender Party that is a Defaulting Lender shall, at any
time, cease to be a Defaulting Lender, any funds held by the Administrative
Agent in escrow at such time with respect to such Lender Party shall be
distributed by the Administrative Agent to such Lender Party and applied by such
Lender Party to the Obligations owing to such Lender Party at such time under
this Agreement and the other Loan Documents ratably in accordance with the
respective amounts of such Obligations outstanding at such time.
(d) The rights and remedies against a Defaulting Lender under
this Section 2.15 are in addition to other rights and remedies that the Borrower
may have against such Defaulting Lender with respect to any Defaulted Advance
and that the Administrative
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Agent or any Lender Party may have against such Defaulting Lender with respect
to any Defaulted Amount.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Initial Extension of
Credit. The obligation of each Lender to make an Advance or of the Issuing Bank
to issue a Letter of Credit on the occasion of the Initial Extension of Credit
hereunder is subject to the satisfaction of the following conditions precedent
before or concurrently with the Initial Extension of Credit:
(a) The Lender Parties shall be satisfied with the corporate
or partnership (as applicable) and legal structure and capitalization of
each Loan Party and each of its Subsidiaries (including, without
limitation, Shoney's SPV and the TPI SPV), including the terms and
conditions of the charter, bylaws and each class of capital stock of
each Loan Party and each such Subsidiary and of each agreement or
instrument relating to such structure or capitalization.
(b) The Lender Parties shall (i) be satisfied that all
Existing Debt (including, without limitation, Debt in respect of the
Reducing Revolving Credit Agreement, the Bridge Loan Credit Agreement,
the First American Credit Agreement and the Existing Mortgage Notes),
other than the Surviving Debt, has been prepaid, redeemed or defeased in
full or otherwise satisfied and extinguished and that all such Surviving
Debt shall be on terms and conditions satisfactory to the Lender Parties
, (ii) have received duly executed and, if applicable, acknowledged,
satisfactions, releases and terminations in form sufficient under
applicable law to release, terminate and discharge all Liens securing
Existing Debt other than Surviving Debt and (iii) be satisfied with all
arrangements made in connection with the Variable Rate Notes and the
related letters of credit (including, without limitation, all escrow
arrangements made in respect of drawings under such letters of credit).
(c) Before giving effect to the transactions contemplated by
this Agreement, there shall have occurred no Material Adverse Change
since October 27, 1996.
(d) There shall exist no action, suit, investigation,
litigation or proceeding affecting any Loan Party or any of its
Subsidiaries pending or threatened before any court, governmental agency
or arbitrator that (i) would be reasonably likely to have a Material
Adverse Effect other than the matters described on Schedule 3.01(d) (the
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"Disclosed Litigation") or (ii) purports to affect the legality,
validity or enforceability of this Agreement, any Note, any other Loan
Document, any Deed or the Certificate of Merger or the consummation of
the transactions contemplated hereby or thereby, and there shall have
been no adverse change in the status, or financial effect on, any Loan
Party or any of its Subsidiaries, of the Disclosed Litigation from that
described on Schedule 3.01(d).
(e) The Lender Parties shall have completed a due diligence
investigation of the Borrower and its Subsidiaries in scope, and with
results, satisfactory to the Lender Parties, and nothing shall have come
to the attention of the Lender Parties during the course of such due
diligence investigation to lead them to believe that the Information
Memorandum was or has become misleading, incorrect or incomplete in any
material respect; without limiting the generality of the foregoing, the
Lender Parties shall have been given such access to the management,
records, books of account, contracts and properties of the Borrower and
its Subsidiaries as they shall have requested.
(f) The Borrower shall have paid all accrued fees of the
Administrative Agent and the Lender Parties and all accrued and invoiced
expenses of the Administrative Agent and the Lender Parties (including
the accrued and invoiced fees and expenses of counsel to the
Administrative Agent, special intellectual property counsel to the
Administrative Agent and local counsel to the Administrative Agent).
(g) The Administrative Agent shall have received on or before
the day of the Initial Extension of Credit the following, each dated
such day (unless otherwise specified), in form and substance
satisfactory to the Administrative Agent (unless otherwise specified)
and (except for the Notes) in sufficient copies for each Lender Party:
(i) The Notes payable to the order of the Lenders.
(ii) Certified copies of the resolutions of the Board
of Directors of the Borrower and each other Loan Party
approving this Agreement, the Notes and each other Loan
Document to which it is or is to be a party, and of all
documents evidencing other necessary corporate action and
governmental and other third party approvals and consents, if
any, with respect to this Agreement, the Notes and each other
Loan Document.
(iii) A copy of the charter of the Borrower and each
other Loan Party and each amendment thereto, certified (as of
a date reasonably near the date of the Initial Extension of
Credit) by the Secretary of State (or other
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appropriate officer) of the jurisdiction of its incorporation
as being a true and correct copy thereof.
(iv) A copy of a certificate of the Secretary of
State (or other appropriate officer) of the jurisdiction of
its incorporation, dated reasonably near the date of the
Initial Extension of Credit, certifying that (A) the Borrower
and each other Loan Party (other than Shoney's Investments,
Inc.) have paid all franchise taxes due prior to the date of
such certificate and (B) the Borrower and each other Loan
Party are duly incorporated and in good standing under the
laws of the jurisdiction of its incorporation.
(v) A copy of a certificate of the Secretary of State
(or other appropriate officer) of each jurisdiction in which
the Borrower and each other Loan Party transacts business,
dated reasonably near the date of the Initial Extension of
Credit, stating that the Borrower and each other Loan Party
are duly qualified and in good standing as foreign
corporations in such State and have filed all annual reports
required to be filed to the date of such certificate.
(vi) A certificate of the Borrower and each other
Loan Party, signed on behalf of the Borrower and such other
Loan Party by its President or a Vice President and its
Secretary or any Assistant Secretary, dated the date of the
Initial Extension of Credit (the statements made in which
certificate shall be true on and as of the date of the Initial
Extension of Credit), certifying as to (A) the absence of any
amendments to the charter of the Borrower or such other Loan
Party since the date of the Secretary of State's certificate
referred to in Section 3.01(g)(iii), (B) a true and correct
copy of the bylaws of the Borrower and such other Loan Party
as in effect on the date of the Initial Extension of Credit,
(C) the due incorporation or formation and good standing of
the Borrower and such other Loan Party as a corporation
organized under the laws of the jurisdiction of its
incorporation or formation, and the absence of any proceeding
for the dissolution or liquidation of the Borrower or such
other Loan Party, (D) the truth of the representations and
warranties contained in the Loan Documents as though made on
and as of the date of the Initial Extension of Credit and (E)
the absence of any event occurring and continuing, or
resulting from the Initial Extension of Credit, that
constitutes a Default.
(vii) A certificate of the Secretary or an Assistant
Secretary of the Borrower and each other Loan Party certifying
the names and true signatures of the officers of the Borrower
and such other Loan Party authorized to sign this Agreement,
the Notes and each other Loan Document to which they are or
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are to be parties and the other documents to be delivered
hereunder and thereunder.
(viii) A security agreement in substantially the form
of Exhibit D (together with each other security agreement
delivered pursuant to Section 5.01(l), in each case as
amended, supplemented or otherwise modified from time to time
in accordance with its terms, the "Security Agreement"), duly
executed by the Borrower and each other Collateral Grantor
together with:
(A) certificates representing the Pledged
Shares referred to therein accompanied by undated
stock powers executed in blank and instruments
evidencing the Pledged Debt referred to therein
indorsed in blank,
(B) executed copies of proper financing
statements, to be filed under the Uniform Commercial
Code of all jurisdictions that the Administrative
Agent may deem necessary or desirable in order to
perfect and protect the first priority liens and
security interests created under the Security
Agreement, covering the Collateral described in the
Security Agreement,
(C) completed requests for information,
dated on or before the date of the Initial Extension
of Credit, listing all effective financing statements
filed as of the date of such requests in the
jurisdictions referred to in clause (B) above that
name the Borrower or any other Collateral Grantor as
debtor, together with copies of such other financing
statements,
(D) evidence of the insurance required by
the terms of this Agreement,
(E) copies of the Assigned Agreements
referred to in the Security Agreement, and
(F) evidence that all other action that the
Administrative Agent may deem necessary or desirable
in order to perfect and protect the first priority
liens and security interests created under the
Security Agreement has been taken or that the
necessary steps for such action have been taken.
(ix) An intellectual property security agreement in
substantially the form of Exhibit I (together with each other
intellectual property security
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agreement delivered pursuant to Section 5.01(l), in each case
as amended, supplemented or otherwise modified from time to
time in accordance with its terms, the "Intellectual Property
Security Agreement"), duly executed by the Borrower and each
other Collateral Grantor together with evidence that all
action that the Administrative Agent may deem necessary or
desirable in order to perfect and protect the first priority
liens and security interests created under the Intellectual
Property Security Agreement has been taken or that the
necessary steps for such action have been taken.
(x) Deeds of trust, trust deeds and mortgages in
substantially the form of Exhibit F and covering the
properties listed on Schedule 3.01(g)(x) (together with each
other mortgage delivered pursuant to Section 5.01(l), (n) and
(q), in each case as amended, supplemented or otherwise
modified from time to time in accordance with their terms, the
"Mortgages"), duly executed by the Borrower, together with:
(A) fully paid American Land Title
Association Lender's Extended Coverage title
insurance policies or in lieu thereof binding
commitments therefor (the "Mortgage Policies") in
form and substance, with endorsements and in amount,
acceptable to the Administrative Agent, issued,
coinsured and reinsured by title insurers acceptable
to the Administrative Agent, insuring the Mortgages
to be valid first and subsisting Liens on the
properties listed on Schedule 3.01(g)(x), free and
clear of all defects (including, but not limited to,
mechanics' and materialmen's Liens) and encumbrances,
excepting only Permitted Encumbrances, and providing
for such other affirmative insurance (including
endorsements for future advances under the Loan
Documents and for mechanics' and materialmen's Liens)
and such coinsurance and direct access reinsurance as
the Administrative Agent may deem necessary or
desirable,
(B) American Land Title Association form
surveys for each of the properties listed on Schedule
3.01(g)(x), dated no more than 60 days before the day
of the Initial Extension of Credit, certified to the
Administrative Agent and the issuer of the Mortgage
Policies in a manner satisfactory to the
Administrative Agent by a land surveyor duly
registered and licensed in the States in which the
property described in such surveys is located and
acceptable to the Administrative Agent, in form and
substance satisfactory to the Administrative Agent.
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(C) an appraisal of each of the properties
indicated on Schedule 4.01(ii), which appraisals
shall be from Xxxxxxxx & Xxxxxxx or any other Person
acceptable to the Lender Parties and otherwise in
form and substance satisfactory to the Lender
Parties,
(D) evidence of the insurance required by
the terms of this Agreement, and
(E) evidence that all other action that the
Administrative Agent may deem necessary or desirable
in order to create valid first and subsisting Liens
on the properties listed on Schedule 3.01(g)(x) has
been taken or that the necessary steps for such
action have been taken.
(xi) A subsidiary guaranty in substantially the form
of Exhibit G (as amended, supplemented or otherwise modified
from time to time in accordance with its terms, the
"Subsidiary Guaranty"), duly executed by each Subsidiary
Guarantor.
(xii) Such financial, business and other information
regarding each Loan Party and its Subsidiaries as the Lender
Parties shall have requested, including, without limitation,
the Consolidated balance sheet as at August 3, 1997 for the
Borrower and its Subsidiaries, information as to possible
contingent liabilities, tax matters, environmental matters,
obligations under Plans, Multiemployer Plans and Welfare
Plans, collective bargaining agreements and other arrangements
with employees, audited annual financial statements dated
October 27, 1996, interim financial statements dated the end
of the most recent fiscal quarter for which financial
statements are available (or, in the event the Lender Parties'
due diligence review reveals material changes since such
financial statements, as of a later date within 45 days of the
day of the Initial Extension of Credit) and forecasts prepared
by management of the Borrower in form and substance
satisfactory to the Lender Parties, of balance sheets, income
statements and cash flow statements on a fiscal quarterly
basis for the Fiscal Year in which the Initial Extension of
Credit occurs and on an annual basis for each Fiscal Year
thereafter until the Termination Date.
(xiii) Certificates substantially in the form of
Exhibit K, attesting to the Solvency of the Borrower and each
Significant Subsidiary (other than TPI SPV) after giving
effect to the transactions contemplated hereby, from its
president, treasurer, controller, chief financial officer or
principal financial officer.
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(xiv) (A) Environmental data base searches, with
results acceptable to the Administrative Agent, with respect
to the properties indicated on Schedule 4.01(ii) (other than
the properties described in clause (C) of this Section
3.01(g)(xiv)), (B) completed ASTM Environmental Site
Assessment Transaction Screen Questionnaires, with results
acceptable to the Administrative Agent, with respect to the
properties listed on Schedule 3.01(g)(x) and (C) Phase I site
assessment reports prepared by Law Engineering, with results
acceptable to the Administrative Agent, with respect to the
four distribution facilities owned by Commissary Operations,
Inc.
(xv) A letter, in form and substance satisfactory to
the Administrative Agent, from the Borrower to Ernst & Young,
its independent certified public accountants, advising such
accountants that the Administrative Agent and the Lender
Parties have been authorized to exercise (in the presence of a
representative of the Borrower) all rights of the Borrower to
require such accountants to disclose any and all financial
statements and any other information of any kind that they may
have with respect to the Borrower and its Subsidiaries and
directing such accountants to comply with any reasonable
request of the Administrative Agent for such information.
(xvi) Evidence of insurance naming the Administrative
Agent as an additional insured party with such responsible and
reputable insurance companies or associations, and in such
amounts and covering such risks, as is satisfactory to the
Lender Parties, including, without limitation, business
interruption insurance.
(xvii) A favorable opinion of (A) Tuke Xxxx &
Xxxxxxx, counsel for the Borrower, in substantially the form
of Exhibit H-1 hereto and as to such other matters as any
Lender Party through the Administrative Agent may reasonably
request, (B) Xxxxx Xxxxxxxxxx, special New York counsel for
the Borrower, in substantially the form of Exhibit H-2 hereto
and as to such other matters as any Lender Party through the
Administrative Agent may reasonably request.
(xviii) Favorable opinions of local counsel in the
States listed on Schedule 3.01(g)(xviii), in substantially the
form of Exhibit J hereto and as to such other matters as any
Lender Party through the Administrative Agent may reasonably
request.
(xix) A favorable opinion of Xxxxxx & Xxxxxxx,
special intellectual property counsel to the Administrative
Agent in substantially the form of
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Exhibit I hereto and as to such other matters as any Lender
Party through the Administrative Agent may reasonably request.
(xx) A favorable opinion of Shearman & Sterling,
counsel for the Administrative Agent, in form and substance
satisfactory to the Administrative Agent.
(h) (A) The Certificate of Merger shall have been filed with
the Secretary of State of Delaware, (B) such merger shall be effective, (C) all
fees, charges, taxes and impositions payable in connection with such merger
shall have been paid in full and (D) certified copies of the Certificate of
Merger shall have been delivered to the Administrative Agent in number and form
sufficient to record in all jurisdictions in which Shoney's Real Estate, Inc.
holds title to real property and to transfer all such real property to Shoney's
SPV.
(i) The Administrative Agent shall have received executed and
recordable Deeds with respect to all real property listed on Schedule 3.01(i),
together with all (1) transfer tax or similar returns or filings required to be
filed in connection with the recording of the Deeds, appropriately completed and
executed and (2) an amount sufficient to pay all transfer taxes, stamp taxes, or
similar taxes and all documentary, filing and recording fees, charges, and
expenses.
(j) The Administrative Agent shall have received executed and
recordable UCC Fixture Filings in form and substance satisfactory to the Lender
Parties sufficient to grant to the Administrative Agent a first priority
security interest in all fixtures attached to all real property listed on
Schedule 3.01(j).
(k) The Borrower and Shoney's SPV shall have entered into that
certain Amended and Restated Master Lease Agreement in respect of all real
property owned by Shoney's SPV or to be conveyed to Shoney's SPV pursuant to
this Agreement, in the form attached hereto as Exhibit N.
(l) The Swing Line Bank shall have received the Cash
Management Documentation in form and substance reasonably satisfactory to the
Swing Line Bank.
SECTION 3.02. Conditions Precedent to Each Borrowing and
Issuance. The obligation of each Appropriate Lender to make an Advance (other
than a Letter of Credit Advance made by the Issuing Bank or a Working Capital
Lender pursuant to Section 2.03(c) and a Working Capital Advance made by a
Working Capital Lender pursuant to Section 2.02(b)) on the occasion of each
Borrowing (including the Initial Extension of Credit), and the obligation of the
Issuing Bank to issue a Letter of Credit (including the initial issuance) or
renew a Letter of Credit and the right of the Borrower to request the
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issuance or a renewal of a Letter of Credit, shall be subject to the further
conditions precedent that on the date of such Borrowing or issuance or renewal
(a) the following statements shall be true (and each of the giving of the
applicable Notice of Borrowing, Notice of Issuance or Notice of Renewal and the
acceptance by the Borrower of the proceeds of such Borrowing or of such Letter
of Credit or the renewal of such Letter of Credit shall constitute a
representation and warranty by the Borrower that both on the date of such notice
and on the date of such Borrowing or issuance or renewal such statements are
true):
(i) the representations and warranties contained in each Loan
Document are correct in all material respects on and as of such date,
before and after giving effect to such Borrowing or issuance or renewal
and to the application of the proceeds therefrom, as though made on and
as of such date, other than any such representations or warranties that,
by their terms, refer to a specific date other than the date of such
Borrowing or issuance or renewal, in which case as of such specific
date; and
(ii) no event has occurred and is continuing, or would result
from such Borrowing or issuance or renewal or from the application of
the proceeds therefrom, that constitutes a Default;
and (b) the Administrative Agent shall have received such other approvals,
opinions or documents as any Appropriate Lender through the Administrative Agent
may reasonably request.
SECTION 3.03. Determinations Under Section 3.01. For purposes
of determining compliance with the conditions specified in Section 3.01, each
Lender Party shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lender Parties unless an
officer of the Administrative Agent responsible for the transactions
contemplated by the Loan Documents shall have received notice from such Lender
Party prior to the Initial Extension of Credit specifying its objection thereto
and if the Initial Extension of Credit consists of a Borrowing, such Lender
Party shall not have made available to the Administrative Agent such Lender
Party's ratable portion of such Borrowing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower.
The Borrower represents and warrants as follows:
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(a) Each Loan Party (i) is a corporation or limited liability
company, as applicable, duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
formation, as applicable, (ii) is duly qualified and in good standing as
a foreign corporation or limited liability company, as applicable, in
each other jurisdiction in which it owns or leases property or in which
the conduct of its business requires it to so qualify or be licensed
except where the failure to so qualify or be licensed is not reasonably
likely to have a Material Adverse Effect and (iii) has all requisite
corporate power and authority (including, without limitation, all
governmental licenses, permits and other approvals) to own or lease and
operate its properties and to carry on its business as now conducted and
as proposed to be conducted.
(b) Set forth on Schedule 4.01(b) hereto is a complete and
accurate list of all Subsidiaries of each Loan Party, showing as of the
date hereof (as to each such Subsidiary) the jurisdiction of its
incorporation or formation, as applicable, the number of shares of each
class of capital stock authorized, and the number outstanding, on the
date hereof and the percentage of the outstanding shares of each such
class owned (directly or indirectly) by such Loan Party and the number
of shares covered by all outstanding options, warrants, rights of
conversion or purchase and similar rights at the date hereof. All of the
outstanding capital stock of all of such Subsidiaries has been validly
issued, is fully paid and non-assessable and is owned by such Loan Party
or one or more of its Subsidiaries free and clear of all Liens, except
those permitted by or created under the Loan Documents.
(c) The execution, delivery and performance by each Loan Party
of this Agreement, the Notes, each other Loan Document, each Deed, each
Master Lease and the Certificate of Merger to which it is or is to be a
party, and the consummation of the transactions contemplated hereby, are
within such Loan Party's corporate powers, have been duly authorized by
all necessary corporate action, and do not (i) contravene such Loan
Party's charter, bylaws, certificate of formation or operating
agreement, as applicable, (ii) violate any law (including, without
limitation, the Securities Exchange Act of 1934 and the Racketeer
Influenced and Corrupt Organizations Chapter of the Organized Crime
Control Act of 1970), rule, regulation (including, without limitation,
Regulation X of the Board of Governors of the Federal Reserve System),
order, writ, judgment, injunction, decree, determination or award
imposed upon or applicable to such Loan Party, (iii) conflict with or
result in the breach of, or constitute a default under, any contract,
loan agreement, indenture, mortgage, deed of trust, lease or other
instrument binding on or affecting any Loan Party, any of its
Subsidiaries or any of their properties or (iv) except for the Liens
created under the Loan Documents, result in or require the creation or
imposition of any Lien upon or with respect to any of the properties of
any Loan Party or any of its Subsidiaries. No Loan Party or any of its
Subsidiaries is in violation of any such law, rule, regulation, order,
writ, judgment,
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injunction, decree, determination or award or in breach of any such
contract, loan agreement, indenture, mortgage, deed of trust, lease or
other instrument, the violation or breach of which is reasonably likely,
either individually or in the aggregate, to have a Material Adverse
Effect.
(d) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body
or any other third party is required for (i) the due execution,
delivery, recordation, filing or performance by any Loan Party of this
Agreement, the Notes, any other Loan Document, any Deed, each Master
Lease or the Certificate of Merger to which it is or is to be a party,
or for the consummation of the transactions contemplated hereby, (ii)
the grant by any Loan Party of the Liens granted by it pursuant to the
Collateral Documents, (iii) the perfection or maintenance of the Liens
created by the Collateral Documents (including the first priority nature
thereof) or (iv) the exercise by the Administrative Agent or any Lender
Party of its rights under the Loan Documents or the remedies in respect
of the Collateral pursuant to the Collateral Documents, except for (A)
authorizations, approvals, actions, notices and filings which have been
duly obtained, taken, given or made and are in full force and effect and
(B) the filing and recording of certain of the Collateral Documents as
described herein.
(e) This Agreement has been, and each of the Notes, each other
Loan Document, each Deed, each Master Lease and the Certificate of
Merger when delivered hereunder will have been, duly executed and
delivered by each Loan Party party thereto. This Agreement is, and each
of the Notes, each other Loan Document, each Deed, each Master Lease and
the Certificate of Merger when delivered hereunder will be, the legal,
valid and binding obligation of each Loan Party party thereto,
enforceable against such Loan Party in accordance with its terms
subject, as to enforcement only, to bankruptcy, insolvency,
reorganization, moratoriums or similar laws at the time in effect
affecting the enforceability of the rights of creditors generally.
(f) The Consolidated balance sheet of the Borrower and its
Subsidiaries as at October 27, 1996, and the related Consolidated
statement of income and Consolidated statement of cash flows of the
Borrower and its Subsidiaries for the fiscal year then ended,
accompanied by an opinion of Ernst & Young, independent public
accountants, and the Consolidated balance sheet of the Borrower and its
Subsidiaries as of August 3, 1997, and the related Consolidated
statement of income and Consolidated statement of cash flows of the
Borrower and its Subsidiaries for the 40 weeks then ended, duly
certified by the chief financial officer or the principal financial
officer of the Borrower, copies of which have been furnished to the
Administrative Agent, fairly present, subject, in the case of said
balance sheet as of August 3, 1997, and said statements of income and
cash flows for the 40 weeks then ended, to year-end audit
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adjustments, the Consolidated financial condition of the Borrower and
its Subsidiaries as at such dates and the Consolidated results of
operations of the Borrower and its Subsidiaries for the periods ended on
such dates, all in accordance with generally accepted accounting
principles applied on a consistent basis, and since October 27, 1996,
there has been no Material Adverse Change.
(g) The Consolidated forecasted balance sheets, income
statements and cash flows statements of the Borrower and its
Subsidiaries delivered to the Lender Parties pursuant to Section
3.01(g)(xiii) or 5.03(e) were prepared in good faith on the basis of the
assumptions stated therein, which assumptions were reasonable in the
light of conditions existing at the time of delivery of such forecasts,
and represented, at the time of delivery, the Borrower's reasonable best
estimate of its expected future financial performance based upon the
assumptions set forth in such forecast.
(h) Except as modified or supplemented in this Agreement or
the other Loan Documents, neither the Information Memorandum nor any
other information, exhibit or report furnished by any Loan Party to the
Administrative Agent or any Lender Party in connection with the
negotiation of the Loan Documents or pursuant to the terms of the Loan
Documents contained any untrue statement of a material fact or omitted
to state a material fact necessary to make the statements made therein
not misleading.
(i) There is no action, suit, investigation, litigation or
proceeding affecting any Loan Party or any of its Subsidiaries,
including any Environmental Action, pending or threatened before any
court, governmental agency or arbitrator that (i) would be reasonably
likely to have a Material Adverse Effect (other than the Disclosed
Litigation) or (ii) purports to affect the legality, validity or
enforceability of this Agreement, any Note, any other Loan Document, any
Deed or the Certificate of Merger or the consummation of the
transactions contemplated hereby, and there has been no adverse change
in the status, or financial effect on any Loan Party or any of its
Subsidiaries, of the Disclosed Litigation from that described on
Schedule 3.01(d).
(j) No proceeds of any Advance or drawings under any Letter of
Credit will be used to acquire any equity security of a class that is
registered pursuant to Section 12 of the Securities Exchange Act of
1934.
(k) The Borrower is not engaged in the business of extending
credit for the purpose of purchasing or carrying Margin Stock, and no
proceeds of any Advance or drawings under any Letter of Credit will be
used to purchase or carry any Margin Stock or to extend credit to others
for the purpose of purchasing or carrying any Margin Stock.
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(l) Following application of the proceeds of each Advance or
drawing under each Letter of Credit, not more than 25 percent of the
value of the assets (either of the Borrower only or of the Borrower and
its Subsidiaries on a Consolidated basis) subject to the provisions of
Section 5.02(a) or 5.02(e) or subject to any restriction contained in
any agreement or instrument between the Borrower and any Lender Party or
any Affiliate of any Lender Party relating to Debt and within the scope
of Section 6.01(e) will be Margin Stock.
(m) Set forth on Schedule 4.01(m) hereto is a complete and
accurate list of all Plans, Multiemployer Plans and Welfare Plans.
(n) No ERISA Event has occurred or is reasonably expected to
occur with respect to any Plan that has resulted in or is reasonably
expected to result in a material liability of any Loan Party or any
ERISA Affiliate.
(o) As of the last annual actuarial valuation date, the funded
current liability percentage, as defined in Section 302(d)(8) of ERISA,
of each Plan exceeds 90% and there has been no material adverse change
in the funding status of any such Plan since such date.
(p) Schedule B (Actuarial Information), if applicable, to the
most recent annual report (Form 5500 Series) for each Plan, copies of
which have been filed with the Internal Revenue Service, is complete and
accurate and fairly presents the funding status of such Plan, and since
the date of such Schedule B there has been no material adverse change in
such funding status.
(q) Neither any Loan Party nor any ERISA Affiliate has
incurred or is reasonably expected to incur any Withdrawal Liability to
any Multiemployer Plan.
(r) Neither any Loan Party nor any ERISA Affiliate has been
notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or has been terminated, within the meaning of
Title IV of ERISA, and no such Multiemployer Plan is reasonably expected
to be in reorganization or to be terminated, within the meaning of Title
IV of ERISA.
(s) Except as set forth in the financial statements referred
to in this Section 4.01 and in Section 5.03, the Loan Parties and their
respective Subsidiaries have no material liability with respect to
"expected post retirement benefit obligations" within the meaning of
Statement of Financial Accounting Standards No. 106.
(t) Neither the business nor the properties of any Loan Party
or any of its Subsidiaries are affected by any fire, explosion,
accident, strike, lockout or other labor
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dispute, drought, storm, hail, earthquake, embargo, act of God or of the
public enemy or other casualty (whether or not covered by insurance)
that would be reasonably likely to have a Material Adverse Effect.
(u) The operations and properties of each Loan Party and each
of its Subsidiaries comply in all material respects with all applicable
Environmental Laws and Environmental Permits, all past non-compliance
with such Environmental Laws and Environmental Permits has been resolved
without material ongoing obligations or costs, and no circumstances
exist that would be reasonably likely to (i) form the basis of an
Environmental Action against any Loan Party or any of its Subsidiaries
or any of their properties that could have a Material Adverse Effect or
(ii) cause any such property to be subject to any material restrictions
on ownership, occupancy, use or transferability under any Environmental
Law.
(v) None of the properties currently or, to the knowledge of
the Loan Parties and their Subsidiaries, formerly, owned or operated by
any Loan Party or any of its Subsidiaries is listed or proposed for
listing on the NPL or on the CERCLIS or any analogous foreign, state or
local list or, to the knowledge of the Loan Parties and their
Subsidiaries, is adjacent to any such property, except for the
properties that are listed on Schedule 4.01(v); there are no and, to the
knowledge of the Loan Parties and their Subsidiaries, never have been,
any underground or aboveground storage tanks or any surface
impoundments, septic tanks, pits, sumps or lagoons in which Hazardous
Materials are being or have been treated, stored or disposed on any
property currently or, to the knowledge of the Loan Parties and their
Subsidiaries, formerly, owned or operated by any Loan Party or any of
its Subsidiaries, in each case, the presence of which would be
reasonably expected to have a Material Adverse Effect; there is no
asbestos or asbestos-containing material on any property currently owned
or operated by any Loan Party or any of its Subsidiaries in a form or
condition which violates, or gives rise to liability under,
Environmental Laws; and Hazardous Materials have not been released,
discharged or disposed of on any property currently or, to the knowledge
of the Loan Parties and their Subsidiaries, formerly, owned or operated
by any Loan Party or any of its Subsidiaries, in each case, the release,
discharge or disposal of which would be reasonably expected to have a
Material Adverse Effect.
(w) Except for monitoring xxxxx, neither any Loan Party nor
any of its Subsidiaries is undertaking, and has not completed, either
individually or together with other potentially responsible parties, any
investigation or assessment or remedial or response action relating to
any actual or threatened release, discharge or disposal of Hazardous
Materials at any site, location or operation, either voluntarily or
pursuant to the order of any governmental or regulatory authority or the
requirements of any Environmental Law; and all Hazardous Materials
generated, used, treated, handled or stored at, or transported to or
from, any property currently or, to the knowledge of the
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Loan Parties and their Subsidiaries, formerly, owned or operated by any
Loan Party or any of its Subsidiaries have been disposed of in a manner
not reasonably expected to have a Material Adverse Effect.
(x) Neither any Loan Party nor any of its Subsidiaries is a
party to any indenture, loan or credit agreement or any lease or other
agreement or instrument or subject to any charter or corporate
restriction that would be reasonably likely to have a Material Adverse
Effect.
(y) The provisions of the Collateral Documents executed by the
Loan Parties are effective to create, in favor of the Lenders, legal,
valid and enforceable security interests in all right, title and
interest of the Loan Parties in any and all of the collateral described
therein, securing the Notes and all other Obligations from time to time
outstanding under the Loan Documents, and each of such Collateral
Documents, upon the due filing of UCC-1 Financing Statements and
Mortgages, the taking of possession of the Security Collateral as
provided in the Security Agreement and the due filing of the
Intellectual Property Security Agreement with the United States Patent
and Trademark Office and the United States Copyright Office, shall
create a fully perfected security interest in all right, title and
interest of the Loan Parties in such collateral, superior in right to
any liens, existing or future, which the Loan Parties or any creditors
of or purchasers from, or any other Person, may have against such
collateral or interests therein, except to the extent, if any, otherwise
provided herein. Upon the due filing of UCC-1 financing statements and
Mortgages and the due filing of the Intellectual Property Security
Agreement with the United States Patent and Trademark Office and the
United States Copyright Office, all filings and other actions necessary
or desirable to perfect and protect such security interests will have
been duly taken. The Loan Parties are the legal and beneficial owners of
the Collateral free and clear of any Lien, except for the liens and
security interests created or permitted under the Loan Documents.
(z) Each Loan Party and each of its Subsidiaries and
Affiliates (other than Shoney's of Canada, Inc.) has filed, has caused
to be filed or has been included in all tax returns (Federal, state,
local and foreign) required to be filed and has paid all taxes shown
thereon to be due, together with applicable interest and penalties
except any such taxes or charges which are being contested in good faith
by appropriate proceedings and for which adequate reserves are being
maintained and certain de minimis amounts due by Shoney's of Canada,
Inc.
(aa) Set forth on Schedule 4.01(aa) hereto is a complete and
accurate list, as of the date hereof, of each taxable year of each Loan
Party and each of its Subsidiaries and Affiliates for which Federal
income tax returns have been filed and for which the
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expiration of the applicable statute of limitations for assessment or
collection has not occurred by reason of extension or otherwise (an
"Open Year").
(bb) There are no adjustments to the Federal income tax
liability of each Loan Party and each of its Subsidiaries and Affiliates
proposed by the Internal Revenue Service with respect to Open Years. No
issues have been raised by the Internal Revenue Service in respect of
Open Years that, in the aggregate, would be reasonably likely to have a
Material Adverse Effect.
(cc) The aggregate unpaid amount, as of the date hereof, of
adjustments to the state, local and foreign tax liability of each Loan
Party and its Subsidiaries and Affiliates proposed by all state, local
and foreign taxing authorities (other than amounts arising from
adjustments to Federal income tax returns) does not exceed $250,000. No
issues have been raised by such taxing authorities that, in the
aggregate, would be reasonably likely to have a Material Adverse Effect.
(dd) No "ownership change" as defined in Section 382(g) of the
Internal Revenue Code, and no event that would result in the application
of the "separate return limitation year" or "consolidated return change
of ownership" limitations under the Federal income tax consolidated
return regulations, has occurred with respect to the Borrower since
October 27, 1996.
(ee) Neither any Loan Party nor any of its Subsidiaries is an
"investment company," or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended.
(ff) The Borrower and each Significant Subsidiary is,
individually and together with its Subsidiaries, Solvent.
(gg) Set forth on Schedule 4.01(gg) hereto is a complete and
accurate list of all Debt of the Borrower and its Subsidiaries (other
than Debt of a Loan Party to another Loan Party) existing as of the date
hereof (the "Existing Debt"), showing as of the date hereof the
principal amount outstanding thereunder.
(hh) Set forth on Schedule 4.01(hh) hereto is a complete and
accurate list of all Debt of the Borrower and its Subsidiaries (other
than Debt of a Loan Party to another Loan Party) which will remain
outstanding after application of the proceeds from the Initial Advances
(the "Surviving Debt"), showing as of the date hereof the principal
amount outstanding thereunder, the maturity date thereof and the
amortization schedule therefor.
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(ii) Set forth on Schedule 4.01(ii) hereto is a complete and
accurate list of all real property owned by any Loan Party or any of its
Subsidiaries, showing as of the date hereof the street address, state,
record owner and, if appraised by Xxxxxxxx & Xxxxxxx, the appraised
value thereof. Each Loan Party or such Subsidiary (other than TPI) has
good, marketable and insurable fee simple title to the real property
identified as being owned by it on Schedule 4.01(ii), free and clear of
all Liens, other than Liens created or permitted by the Loan Documents.
TPI has, prior to the 90th day following the date of the Initial
Extension of Credit, good and marketable fee simple title to the real
property identified as being owned by TPI on Schedule 4.01(ii). On or
prior to the 90th day following the date of the Initial Extension of
Credit, TPI or TPI SPV will have good, marketable and insurable fee
simple title to the real property identified as being owned by TPI on
Schedule 4.01(ii), free and clear of all Liens, other than Liens created
or permitted by the Loan Documents. Except for limitations,
restrictions, easements, burdens, rights or other encumbrances on
properties with an aggregate value not in excess of $10,000,000, no real
property owned by any Loan Party (other than, in respect of the first 90
days following the date of the Initial Extension of Credit, TPI) is
subject to any (A) purchase option, reverter or other limitation,
restriction, interest, burden, right or other encumbrance by which such
real property or any portion thereof may be required to be forfeited,
defeased, surrendered or conveyed or (B) any other limitation,
restriction, easement, burden, right or other encumbrance, in either
case which would or may materially adversely affect the ability of the
Loan Party which currently owns (or which, upon consummation of the
conveyances, by merger or otherwise, herein contemplated, will own) such
real property to continue to use such real property as used on the date
hereof. No Loan Party (other than, in respect of the first 90 days
following the date of the Initial Extension of Credit, TPI) is aware of
any action to enforce any limitation, restriction, easement, burden,
right or other encumbrance pertaining to real property owned or to be
owned by such Loan Party which would or may materially adversely affect
the ability of the Loan Party which currently owns (or which, upon
consummation of the conveyances, by merger or otherwise, herein
contemplated, will own) such real property to continue to use such real
property as used on the date hereof.
(jj) Set forth on Schedule 4.01(jj) hereto is a complete and
accurate list of all leases of real property (other than office leases
and storage facility leases) to which any Loan Party or any of its
Subsidiaries is the lessee, showing as of the date hereof the address,
lessee and annual rental cost thereof.
(kk) Set forth on Schedule 4.01(kk) hereto is a complete and
accurate list of all Investments held by any Loan Party or any of its
Subsidiaries, showing as of the date hereof the amount, obligor or
issuer and maturity, if any, thereof.
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(ll) Schedules II and III, collectively, to the Intellectual
Property Security Agreement contain a complete and accurate list of all
patents, trademarks, trade names, service marks and copyrights, and all
applications therefor and licenses thereof (other than to franchisees),
of each Loan Party or any of its Subsidiaries, showing as of the date
hereof (i) in the case of registrations therefor, the jurisdiction in
which registered, the registration number, the date of registration and
the expiration date and (ii) in the case of pending applications
therefor, the jurisdiction in which filed, the application number and
the date of filing.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any Advance
shall remain unpaid, any Letter of Credit shall be outstanding or any Lender
Party shall have any Commitment hereunder, the Borrower will:
(a) Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, in all material respects, with all applicable
laws, rules, regulations and orders, such compliance to include, without
limitation, compliance with ERISA and the Racketeer Influenced and
Corrupt Organizations Chapter of the Organized Crime Control Act of
1970.
(b) Payment of Taxes, Etc. Pay and discharge, and cause each
of its Subsidiaries to pay and discharge, before the same shall become
delinquent, (i) all taxes, assessments and governmental charges or
levies imposed upon it or upon its property and (ii) all lawful claims
that, if unpaid, might by law become a Lien upon its property; provided,
however, that neither the Borrower nor any of its Subsidiaries shall be
required to pay or discharge any such tax, assessment, charge or claim
that is being contested in good faith and by proper proceedings and as
to which appropriate reserves are being maintained, unless and until any
Lien resulting therefrom attaches to its property and becomes
enforceable against its other creditors.
(c) Compliance with Environmental Laws. Comply, and cause each
of its Subsidiaries and all lessees and other Persons operating or
occupying its properties to comply with all applicable Environmental
Laws and Environmental Permits except in the cases where the failure to
so comply is not reasonably likely to have a Material Adverse Effect;
obtain and renew and cause each of its Subsidiaries to obtain and renew
all Environmental Permits necessary for its operations and properties;
and conduct, and cause each of its Subsidiaries to conduct, any
investigation, study, sampling and testing, and undertake any cleanup,
removal, remedial or other action
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necessary to remove and clean up all Hazardous Materials from any of its
properties, in accordance with the requirements of all Environmental
Laws; provided, however, that neither the Borrower nor any of its
Subsidiaries shall be required to undertake any such cleanup, removal,
remedial or other action to the extent that its obligation to do so is
being contested in good faith and by proper proceedings and appropriate
reserves are being maintained with respect to such circumstances.
(d) Maintenance of Insurance. (i) Maintain, and cause each of
its Subsidiaries to maintain (A) casualty insurance insuring all
buildings, structures and improvements owned or leased by the Borrower
or any Subsidiary (including, without limitation, all Improvements (as
defined under each Mortgage) now or hereafter constituting a part of the
Mortgaged Property (as defined under each Mortgage)) against damage by
fire and the other hazards covered by a standard all-risk, extended
coverage insurance policy for the full insurable value thereof (which,
unless the Administrative Agent shall otherwise agree in writing, shall
mean the full repair and replacement value thereof without reduction for
depreciation or co-insurance), (B) business interruption or rental
insurance in an amount adequate to cover continuing expenses during any
period of repairs or restoration which amount shall at least be equal to
twelve month's anticipated gross income from each of such premises, and
(C) Commercial General Liability Insurance in respect of the operation
of the all such properties as may from time to time be specified by the
Administrative Agent, but in no event less than $1,000,000 combined
single limit and $75,000,000 umbrella or excess coverage. In addition,
the Administrative Agent may require the Borrower and each of its
Subsidiaries to carry such other insurance on such properties in such
amounts as may from time to time reasonably be required by institutional
lenders, against insurable casualties including, without limitation, the
following types of insurance: flood (including surface waters) if any
such property is located in an area identified by the Secretary of
Housing and Urban Development or any other official having jurisdiction
as having special flood hazards and in which flood insurance has been
made available under the National Flood Insurance Act of 1968 and the
Flood Disaster Protection Act of 1973 (as the foregoing may be modified
or amended and any successor acts thereto), in an amount at least equal
to the full repair and replacement value of such property or the maximum
limit of coverage available under said Act in respect thereof, whichever
is less; automobile; Builder's Risk; sinkhole; earthquake; boiler and
machinery; all in amounts adequate to cover repair and replacement
expenses; and contingent liability in connection with any loss arising
from the fact that any improvement is deemed to be non-conforming
property, which at the time are commonly insured against in the case of
mortgaged property similarly situated, due regard being given to the
site and the type of the building, and the construction, location,
utilities and occupancy or any replacements or substitutions therefor.
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(ii) All liability insurance policies required pursuant to
clause (i) of this Section 5.01(d) in respect of any Mortgaged Property
(as defined in the Mortgages) shall name the Administrative Agent as an
additional insured thereunder, and all other insurance policies in
respect of any property encumbered by a Mortgage, to the extent
reasonably possible, or otherwise maintained by the Borrower and/or any
of its Subsidiaries shall name the Administrative Agent as the mortgagee
under New York long form non-contributory endorsements. All insurance
policies and endorsements required to be maintained under this Section
5.01(d) shall be fully paid or paid pursuant to an installment program
offered to the Borrower and/or any of its Subsidiaries by the insurer or
its broker/agent, provided that the installments are paid on or before
the due date thereof so that all required insurance coverage is
maintained without interruption. All such insurance policies required to
be maintained by the Borrower and/or any of its Subsidiaries shall
contain such provisions and expiration dates, and be in such form and
issued by such insurance companies qualified and licensed to do business
in the jurisdiction in which its insurable property is located, as may
be reasonably acceptable to the Administrative Agent. All insurance
companies issuing insurance required pursuant to clause (i) of this
Section 5.01(d) for property on behalf of the Borrower and/or any of its
Subsidiaries shall have a Best Insurance Guide Rating of A-/XIII or
better. Any coverage required to be maintained pursuant to clause (i) of
this Section may be maintained under a blanket insurance policy provided
such policy otherwise satisfies the requirements of this Section. Each
such policy required to be maintained by the Borrower and/or any of its
Subsidiaries shall provide that such policy may not be cancelled or
materially changed except upon not less than thirty (30) days' prior
written notice to the Administrative Agent of the intention of
non-renewal, cancellation or material change and that no act or thing
done by the Borrower and/or any of its Subsidiaries shall invalidate the
policy as against the Administrative Agent. In the event the Borrower
and/or any of its Subsidiaries fails to maintain insurance in compliance
with clause (i) of this Section 5.01(d) or, in the event that a notice
of non-renewal, cancellation or material change is given to the
Administrative Agent, as aforesaid, and within ten (10) days after the
delivery of such notice the Borrower and/or its applicable Subsidiary
shall fail to deliver to the Administrative Agent evidence of the
purchase of a substitute policy of insurance or a renewal of the
existing policy of insurance, the Administrative Agent may, after ten
(10) days' notice to the Borrower and/or its applicable Subsidiary (or,
if the policy in question shall sooner expire or be terminated, on or
after the day before the date of such expiration or termination) but
shall not be obligated to, obtain such insurance and pay the premium
therefor and the Borrower and/or its applicable Subsidiary shall, on
demand, reimburse the Administrative Agent for all sums, advances and
reasonable expenses incurred in connection therewith, together with
interest thereon at the rate of interest applicable under Section
2.07(b) upon the occurrence of an Event of Default (the "Default Rate")
from the date such amounts are advanced until the same are paid to the
Administrative Agent.
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(iii) Neither the Borrower nor any of its Subsidiaries shall
carry separate or additional insurance concurrent in form or
contributing, in the event of loss, with that required by clause (i) of
this Section 5.01(d) hereunder unless endorsed in favor of the
Administrative Agent as additional insured or mortgagee, as applicable,
and otherwise acceptable to the Administrative Agent in all respects.
(iv) In the event of foreclosure of any Mortgage or other
transfer of title or assignment of the premises encumbered thereby in
extinguishment, in whole or in part, of the Obligations secured thereby,
all right, title and interest of the Borrower and any of its
Subsidiaries in and to all policies of insurance required under clause
(i) of this Section 5.01(d) or otherwise then in force with respect to
such premises and all proceeds payable thereunder and unearned premiums
thereon shall immediately vest in the purchaser or other transferee of
such premises.
(v) The Borrower covenants that it has delivered to the
Administrative Agent, and shall, from time to time as may be requested
by the Administrative Agent, deliver to the Administrative Agent, the
policies of insurance (or, if such policies are not yet available,
unconditional binders to issue the same), or certificates thereof, that
may be requested by the Administrative Agent to confirm that the
insurance required under the terms of the Loan Documents is in place and
in full force and effect.
(vi) The Borrower shall, at its own expense, maintain and
cause each of its Subsidiaries, at their own expense, to maintain,
insurance with respect to the Equipment (as defined in the Security
Agreement) pledged by the Borrower and each such Subsidiary under the
Security Agreement in such amounts, against such risks, in such form and
with such insurers, as shall be satisfactory to the Administrative Agent
from time to time. Each policy for liability insurance shall provide for
all losses to be paid on behalf of the Administrative Agent and the
Borrower or the Subsidiary of the Borrower pledging such Equipment, as
applicable, as their interests may appear, and each policy for property
damage insurance shall provide for all losses (except for losses of less
than $200,000 per occurrence) to be paid directly to the Administrative
Agent. Each such policy shall in addition (i) name the Borrower or its
Subsidiary that owns the Equipment covered thereunder and the
Administrative Agent as insured parties thereunder (without any
representation or warranty by or obligation upon the Administrative
Agent) as their interests may appear, (ii) contain the agreement by the
insurer that any loss thereunder shall be payable to the Administrative
Agent notwithstanding any action, inaction or breach of representation
or warranty by the Borrower or such Subsidiary of the Borrower, as
applicable, (iii) provide that there shall be no recourse against the
Administrative Agent for payment of premiums or other amounts with
respect thereto and (iv) provide that at least 10 days' prior written
notice of cancellation or of lapse shall be given to the Administrative
Agent by the insurer. The Borrower shall and shall cause each of its
Subsidiaries, if so requested by
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the Administrative Agent, to deliver to the Administrative Agent
original or duplicate policies of such insurance and, as often as the
Administrative Agent may reasonably request, a report of a reputable
insurance broker with respect to such insurance. Further, at the request
of the Administrative Agent, the Borrower shall, and shall cause each of
its Subsidiaries to duly exercise and deliver instruments of assignment
of such insurance policies to comply with the requirements of Section 9
of the Security Agreement and cause the insurers to acknowledge notice
of such assignment.
(vii) Reimbursement under any liability insurance maintained
by the Borrower or any of its Subsidiaries pursuant to clause (vi) of
this Section 5.01(d) may be paid directly to the Person who shall have
incurred liability covered by such insurance. In case of any loss
involving damage to Equipment when clause (viii) of this Section 5.01(d)
is not applicable, the Borrower shall, and shall cause each of its
Subsidiaries to make or cause to be made the necessary repairs to or
replacements of the Equipment that it owns, and any proceeds of
insurance maintained by the Borrower or such Subsidiary of the Borrower,
as applicable, pursuant to clause (vi) of this Section 5.01(d) shall be
paid to the Borrower or such Subsidiary of the Borrower, as applicable,
as reimbursement for the costs of such repairs or replacements.
(viii) Upon the occurrence and during the continuance of any
Event of Default or the actual or constructive total loss (in excess of
$200,000 per occurrence) of any Equipment pledged by the Borrower or
such Subsidiary of the Borrower, as applicable, under the Security
Agreement, all insurance payments in respect of such Equipment shall be
paid to and applied by the Administrative Agent as specified in Section
20(b) of the Security Agreement.
(e) Preservation of Corporate Existence, Etc. Preserve and
maintain, and cause each of its Subsidiaries to preserve and maintain,
its existence, legal structure, legal name, rights (charter and
statutory), permits, licenses, approvals, privileges and franchises;
provided, however, that the Borrower and its Subsidiaries may consummate
any merger or consolidation permitted under Section 5.02(d); provided
further, that neither the Borrower nor any of its Subsidiaries shall be
required to preserve any right, permit, license, approval, privilege or
franchise if the board of directors of the Borrower or such Subsidiary
or equivalent governing body shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the
Borrower or such Subsidiary, as the case may be, and that the loss
thereof does not have a Material Adverse Effect.
(f) Visitation Rights. At any reasonable time and from time to
time, permit the Administrative Agent or any of the Lender Parties or
any agents or representatives thereof, to examine and make copies of and
abstracts from the records and books of account of, and visit the
properties of, the Borrower and any of its
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Subsidiaries, and to discuss the affairs, finances and accounts of the
Borrower and any of its Subsidiaries with any of their officers and in
the presence of the Borrower or its Subsidiaries, with their independent
certified public accountants; provided, however, that any such
visitation by any Lender Party or any agent or representative thereof
shall be done in coordination with the Administrative Agent.
(g) Preparation of Environmental Reports. Upon the occurrence
and during the continuance of an Event of Default or upon the occurrence
of an event which gives the Lender Parties a reasonable basis for
concern as to environmental matters, then at the request of the
Administrative Agent from time to time, provide to the Lender Parties
within 60 days after such request, at the expense of the Borrower, an
environmental site assessment report for any of its or its Subsidiaries
properties described in such request, prepared by an environmental
consulting firm acceptable to the Administrative Agent, indicating the
presence or absence of Hazardous Materials and the estimated cost of any
compliance, removal or remedial action in connection with any Hazardous
Materials on such properties; without limiting the generality of the
foregoing, if the Administrative Agent determines at any time that a
material risk exists that any such report will not be provided within
the time referred to above, the Administrative Agent may retain an
environmental consulting firm to prepare such report at the expense of
the Borrower, and the Borrower hereby grants and agrees to cause any
Subsidiary that owns any property described in such request to grant at
the time of such request, to the Administrative Agent, the Lender
Parties, such firm and any agents or representatives thereof an
irrevocable non-exclusive license, subject to the rights of tenants, to
enter onto their respective properties to undertake such an assessment.
(h) Keeping of Books. Keep, and cause each of its Subsidiaries
to keep, proper books of record and account, in which full and correct
entries shall be made of all financial transactions and the assets and
business of the Borrower and each such Subsidiary in accordance with
generally accepted accounting principles in effect from time to time.
(i) Maintenance of Properties, Etc. Maintain and preserve, and
cause each of its Subsidiaries to maintain and preserve, all of its
properties that are used or useful in the conduct of its business in
good working order and condition, ordinary wear and tear excepted.
(j) Compliance with Terms of Leaseholds. Make all payments and
otherwise perform all obligations in respect of all leases of real
property to which the Borrower or any of its Subsidiaries is a party,
keep such leases in full force and effect and not allow such leases to
lapse or be terminated or any rights to renew such leases to be
forfeited or cancelled, notify the Administrative Agent of any default
by any
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party with respect to such leases and cooperate with the Administrative
Agent in all respects to cure any such default, and cause each of its
Subsidiaries to do so except, in any case, where the failure to do so,
either individually or in the aggregate, would not be reasonably likely
to have a Material Adverse Effect.
(k) Transactions with Affiliates. Conduct, and cause each of
its Subsidiaries to conduct, all transactions otherwise permitted under
the Loan Documents with any of their Affiliates on terms that are fair
and reasonable and no less favorable to the Borrower or such Subsidiary
than it would obtain in a comparable arm's-length transaction with a
Person not an Affiliate; provided, however, that nothing in this Section
5.01(k) shall prevent the transfer of assets from TPI to TPI SPV or from
the Borrower to Shoney's SPV.
(l) Covenant to Give Security. Upon the request of the
Administrative Agent following the occurrence and during the continuance
of an Event of Default, and at the expense of the Borrower, (i) within
10 days after such request, furnish to the Administrative Agent a
description of the real and personal properties of the Borrower and its
Subsidiaries in detail reasonably satisfactory to the Administrative
Agent, (ii) within 15 Business Days after such request, duly execute and
deliver to the Administrative Agent mortgages, pledges, assignments and
other security agreements, as specified by and in form and substance
reasonably satisfactory to the Administrative Agent, securing payment of
all the Obligations of the Borrower under the Loan Documents and
constituting Liens on all such properties, (iii) within 30 days after
such request, take whatever action (including, without limitation, the
recording of mortgages, the filing of Uniform Commercial Code financing
statements, the giving of notices and the endorsement of notices on
title documents) may be necessary or advisable in the opinion of the
Administrative Agent to vest in the Administrative Agent (or in any
representative of the Administrative Agent designated by it) valid and
subsisting Liens on the properties purported to be subject to the
security agreements delivered pursuant to this Section 5.01(l),
enforceable against all third parties in accordance with their terms,
(iv) within 60 days after such request, deliver to the Administrative
Agent a signed copy of a favorable opinion, addressed to the
Administrative Agent, of counsel for the Borrower reasonably acceptable
to the Administrative Agent as to the matters contained in clauses (i),
(ii) and (iii) above, as to such security agreements being legal, valid
and binding obligations of the Borrower and its Subsidiaries enforceable
in accordance with their terms and as to such other matters as the
Administrative Agent may reasonably request, (v) as promptly as
practicable after such request, deliver to the Administrative Agent
surveys meeting the criteria specified in Section 3.01(g)(x)(C) and
Mortgage Policies as to each parcel of real property subject to such
request and (vi) at any time and from time to time, promptly execute and
deliver any and all further instruments and documents and take
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all such other action as the Administrative Agent may deem desirable in
obtaining the full benefits of, or in preserving the Liens of, such
security agreements.
(m) Interest Rate Hedging. Within 60 days following the
Closing Date, enter into and maintain at all times thereafter, interest
rate Hedge Agreements with Persons acceptable to the Administrative
Agent, covering a notional amount of not less than $50,000,000 and
providing for such Persons to make payments thereunder for a period of
no less than 2 years to the extent of increases in interest rates based
on LIBOR.
(n) Transfer of Real Property. (i) Within 45 days following
the date of the Initial Extension of Credit, (1) either (A) transfer all
of the real property listed on Schedule 5.01(n)(i) to Shoney's SPV on
terms reasonably satisfactory to the Administrative Agent and deliver to
the Administrative Agent signed copies of favorable opinions addressed
to the Lender Parties, of counsel reasonably acceptable to the
Administrative Agent in substantially the form of Exhibit J as to the
right, title and interest of Shoney's SPV in such real property (or
confirming the opinion delivered by such counsel pursuant to Section
3.01(g)(xviii)) or (B) place Mortgages on such real property and provide
the items described in clauses (A) through (F) of Section 3.01(g)(x),
(2) deliver to the Administrative Agent evidence satisfactory to the
Administrative Agent that all satisfactions, releases and terminations
necessary to release any Liens on such real properties (other than Liens
created by the Loan Documents) shall have been filed in the appropriate
filing offices and (3) record all UCC Fixture Filings with respect to
such real properties as the Administrative Agent may reasonably request
and pay as and when due all transfer taxes, stamp taxes or similar taxes
and all documentary filing and recording fees, charges and expenses due
in connection with such filing.
(ii) Within 90 days following the date of the Initial
Extension of Credit, (A) either (1) transfer all of the real property
listed on Part II of Schedule 5.01(n)(ii) to Shoney's SPV on terms
reasonably satisfactory to the Administrative Agent or (2) place
Mortgages on such real property and provide the items described in
clauses (A) through (F) of Section 3.01(g)(x) and (B) cause TPI (1)
either (x) to transfer all of the real property listed on Part I of
Schedule 5.01(n)(ii) to TPI SPV on terms reasonably satisfactory to the
Administrative Agent and deliver to the Administrative Agent (I) signed
copies of favorable opinions, addressed to the Lender Parties, of
counsel reasonably acceptable to the Administrative Agent in
substantially the form of Exhibit J as to the right, title and interest
of TPI SPV in such real property (or confirming the opinion delivered by
such counsel pursuant to Section 3.01(xviii)) and (II) a memorandum of
law prepared by counsel for the Borrower reasonably acceptable to the
Administrative Agent as to the due diligence performed by such counsel
in connection with such transfer or (y) to place Mortgages on such real
property and provide the
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items described in clauses (A) through (F) of Section 3.01(g)(x), (2) to
deliver to the Administrative Agent a certificate substantially in the
form of Exhibit K, attesting to the Solvency of TPI SPV after giving
effect to the transactions contemplated in clause (1) above, from its
chief financial officer or principal financial officer, (3) to record
all UCC Fixture Filings with respect to the real property listed on
Schedule 5.01(n)(ii) as the Administrative Agent may reasonably request
and to pay as and when due all transfer taxes, stamp taxes or similar
taxes and all documentary, filing and recording fees, charges and
expenses due in connection with such filing, (4) to deliver to the
Administrative Agent a voting trust agreement in form and substance
reasonably satisfactory to the Administrative Agent with respect to the
capital stock of TPI SPV and (5) to enter into a Master Lease Agreement
with TPI SPV in respect of all real property owned by TPI SPV or to be
conveyed to TPI SPV pursuant to this Agreement, in substantially the
form attached hereto as Exhibit N.
(o) Shoney SPV's Separate Limited Liability Company Existence.
(i) Do, and shall cause Shoney's SPV to do, all things necessary to
maintain the limited liability company existence of Shoney's SPV
separate and apart from the Borrower, any division thereof and any
Affiliate thereof and (ii) without limiting the foregoing provisions of
clause (i), cause Shoney's SPV to:
(A) conduct its affairs strictly in accordance with
its certificate of formation and operating agreement and
observe all necessary, appropriate and customary corporate
formalities, including, but not limited to, holding meetings
of its board of directors and its members as required by the
certificate of formation and operating agreement of Shoney's
SPV, maintaining a separate and current minute book and
passing all resolutions or consents necessary to authorize
actions taken or to be taken;
(B) not suffer any limitation on the authority of its
members to conduct its business and affairs in accordance with
their independent business judgment, or authorize or suffer
any Person other than its members to act on Shoney's SPV's
behalf with respect to matters (other than matters customarily
delegated to others under powers of attorney) for which a
limited liability company's own members would customarily be
responsible;
(C) maintain a separate telephone number from those
of the Borrower, or any Affiliate of the Borrower;
(D) allocate all overhead expense (including, without
limitation, telephone and other utility charges and legal,
auditing and other professional services) for items shared
between it and the Borrower, any other Affiliate of the
Borrower, or any other Person on the basis of actual use to
the extent
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practicable and, to the extent such allocation is not
practicable, on a basis reasonably related to actual use;
(E) the Borrower shall maintain on its books and
records separate accounts for Shoney's SPV, including without
limitation, payroll and intercompany transaction accounts,
separate and apart from those of the Borrower and each other
Affiliate of the Borrower or of any other Person to reflect
the financial statements of Shoney's SPV separate and apart
from the financial statements of the Borrower, any other
Affiliate of the Borrower or any other Person (other than as
they may be presented or consolidated on a consolidated
basis), and Shoney's SPV shall have its own letterhead;
(F) prepare financial statements for Shoney's SPV and
insure that any audited consolidated financial statements of
the Borrower or any of their other Affiliates that include
Shoney's SPV have notes clearly stating that Shoney's SPV is a
limited liability company (operated as a subsidiary and not as
a division) and that its assets will be available first and
foremost to satisfy the claims of its own creditors;
(G) unless the separate ownership of such funds or
assets are properly reflected on the financial statements of
the applicable Loan Parties, not commingle funds or other
assets of Shoney's SPV with those of the Borrower, any other
Affiliate of the Borrower or any other Person;
(H) maintain its assets in such a manner that it will
not be difficult or costly to segregate, ascertain or
otherwise identify the individual assets of Shoney's SPV,
separate from those of the Borrower, any other Affiliate of
the Borrower or any other Person;
(I) not permit the Borrower, any other Affiliate of
the Borrower or any other Person to pay any of the operating
expenses of Shoney's SPV except for payments to be reimbursed
in the ordinary course of business;
(J) maintain an arm's length relationship with the
Borrower and each other Affiliate of the Borrower and not hold
itself out, and will use its best efforts to prevent the
Borrower or any other Affiliate of the Borrower from holding
itself out, as ultimately responsible for the debts of
Shoney's SPV or the decisions or actions respecting the daily
business and affairs of Shoney's SPV;
(K) require that all of its full-time employees, if
any, identify themselves as such and not as employees of the
Borrower, any other Affiliate
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of the Borrower or any other Person (including, without
limitation, by means of providing appropriate employees with
business or identification cards identifying such employees as
its employees); and
(L) maintain capitalization adequate for the conduct
of its business and account for and manage its own liabilities
separate from those of any other Person, including payment of
all payroll and administrative expenses and taxes from its own
assets.
(p) TPI SPV's Separate Corporate Existence. (i) From and after
the date of the transfer of real property to TPI SPV in accordance with
Section 5.01(n), do, and shall cause TPI SPV to do, all things necessary
to maintain the corporate existence of TPI SPV separate and apart from
the Borrower, any division thereof and any Affiliate thereof and (ii)
without limiting the foregoing provisions of clause (i), cause TPI SPV
to:
(A) conduct its affairs strictly in accordance with
its articles of incorporation and observe all necessary,
appropriate and customary corporate formalities, including,
but not limited to, holding meetings of its board of directors
and its shareholders as required by the charter and by-laws of
TPI SPV, maintaining a separate and current minute book and
passing all resolutions or consents necessary to authorize
actions taken or to be taken;
(B) not suffer any limitation on the authority of its
directors and officers to conduct its business and affairs in
accordance with their independent business judgment, or
authorize or suffer any person other than its officers and
directors to act on TPI SPV's behalf with respect to matters
(other than matters customarily delegated to others under
powers of attorney) for which a corporation's own officers and
directors would customarily be responsible;
(C) maintain a separate telephone number from those
of the Borrower, or any Affiliate of the Borrower;
(D) allocate all overhead expense (including, without
limitation, telephone and other utility charges and legal,
auditing and other professional services) for items shared
between it and the Borrower, any other Affiliate of the
Borrower, or any other Person on the basis of actual use to
the extent practicable and, to the extent such allocation is
not practicable, on a basis reasonably related to actual use;
(E) the Borrower shall maintain on its books and
records separate accounts for TPI SPV, including without
limitation, payroll and intercompany
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transaction accounts, separate and apart from those of the
Borrower and each other Affiliate of the Borrower or of any
other Person to reflect the financial statements of TPI SPV
separate and apart from the financial statements of the
Borrower, any other Affiliate of the Borrower or any other
Person (other than as they may be presented or consolidated on
a consolidated basis), and TPI SPV shall have its own
letterhead;
(F) prepare financial statements for TPI SPV and
insure that any audited consolidated financial statements of
the Borrower or any of their other Affiliates that include TPI
SPV have notes clearly stating that TPI SPV is a corporate
entity (operated as a subsidiary and not as a division) and
that its assets will be available first and foremost to
satisfy the claims of its own creditors;
(G) unless the separate ownership of such funds or
assets are properly reflected in the financial statements of
the applicable Loan Parties, not commingle funds or other
assets of TPI SPV with those of the Borrower, any other
Affiliate of the Borrower or any other Person;
(H) maintain its assets in such a manner that it will
not be difficult or costly to segregate, ascertain or
otherwise identify the individual assets of TPI SPV, separate
from those of the Borrower, any other Affiliate of the
Borrower or any other Person;
(I) not permit the Borrower, any other Affiliate of
the Borrower or any other Person to pay any of the operating
expenses of TPI SPV except for payments to be reimbursed in
the ordinary course of business;
(J) maintain an arm's length relationship with the
Borrower and each other Affiliate of the Borrower and not hold
itself out, and will use its best efforts to prevent the
Borrower or any other Affiliate of the Borrower from holding
itself out, as ultimately responsible for the debts of TPI SPV
or the decisions or actions respecting the daily business and
affairs of TPI SPV;
(K) require that all of its full-time employees, if
any, identify themselves as such and not as employees of the
Borrower, any other Affiliate of the Borrower or any other
Person (including, without limitation, by means of providing
appropriate employees with business or identification cards
identifying such employees as its employees); and
(L) maintain capitalization adequate for the conduct
of its business and account for and manage its own
liabilities separate from those of any other
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Person, including payment of all payroll and administrative
expenses and taxes from its own assets.
(q) Schedule 5.02(e) Properties. In the event that any
property listed on Schedule 5.02(e) shall not have been sold within
twenty-four months following the date hereof, at the request of the
Administrative Agent from time to time thereafter and at the expense of
the Borrower, within 30 days after the date of such request, deliver to
the Administrative Agent Mortgages covering such of the properties
listed on such Schedule that have not been sold within such twenty-four
month period as the Administrative Agent may request, duly executed by
the Borrower, together with:
(i) evidence that counterparts of such Mortgages have
been duly recorded on or before the end of such 30 day period
in all filing or recording offices that the Administrative
Agent may reasonably deem necessary in order to create a valid
first and subsisting Lien on the property described therein in
favor of the Secured Parties and that all filing and recording
taxes and fees have been paid,
(ii) fully paid Mortgage Policies in form and
substance, with endorsements and in amounts acceptable to the
Administrative Agent, issued, coinsured and reinsured by title
insurers acceptable to the Administrative Agent, insuring such
Mortgages to be valid first and subsisting Liens on the
property described therein, free and clear of all defects
(including, but not limited to, mechanics' and materialmen's
Liens) and encumbrances, excepting only Permitted
Encumbrances, and providing for such other affirmative
insurance (including endorsements for future advances under
the Loan Documents and for mechanics' and materialmen's Liens)
and such coinsurance and direct access reinsurance as the
Administrative Agent may deem necessary or desirable,
(iii) American Land Title Association form surveys
for each of such properties delivered to the Administrative
Agent on or prior to the end of such 30 day period in respect
of such property, certified to the Administrative Agent and
the issuer of the Mortgage Policies in a manner satisfactory
to the Administrative Agent by a land surveyor duly registered
and licensed in the States in which the property described in
such surveys is located and acceptable to the Administrative
Agent, showing all buildings and other improvements, any
off-site improvements, the location of any easements, parking
spaces, rights of way, building set-back lines and other
dimensional regulations and the absence of encroachments,
either by such improvements or on to such property, and other
defects, other than encroachments and other defects acceptable
to the Administrative Agent,
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(iv) an appraisal (if reasonably requested by the
Administrative Agent) of each of the properties described in
such Mortgages which appraisals shall be from Xxxxxxxx &
Xxxxxxx or another Person acceptable to the Lender Parties and
otherwise in form and substance satisfactory to the Lender
Parties,
(v) evidence of the insurance required by the terms
of this Agreement, and
(vi) evidence that all other action that the
Administrative Agent may deem necessary in order to create a
valid first and subsisting Lien on the property described in
such Mortgages has been taken.
(r) Deeds. The Borrower shall at the Borrower's expense (i) promptly
cause all Deeds required to be delivered under this Agreement as a condition to
the Initial Extension of Credit to be recorded in the appropriate offices and
jurisdictions so as to convey to Shoney's SPV all real property required to be
conveyed to it under this Agreement, (ii) cause to be timely completed and filed
all transfer tax or similar returns or filings required to be filed in
connection with the recording of the Deeds, (iii) pay as and when due all
transfer taxes, stamp taxes, or similar taxes and all documentary, filing and
recording fees, charges, and expenses due in connection with such recording and
(iv) promptly provide the Administrative Agent with all recording information
and satisfactory evidence that all filings and payments required to be filed and
paid in connection with the recording of the Deeds have been filed and paid.
(s) UCC Fixture Filings. The Borrower shall at the Borrower's expense
(i) promptly cause all UCC Fixture Filings required to be delivered under this
Agreement as a condition to the Initial Extension of Credit to be recorded in
the appropriate offices and jurisdictions, (ii) cause to be timely completed and
filed all transfer tax or similar returns or filings required to be filed in
connection with the filing of such UCC Fixture Filings, (iii) pay as and when
due all transfer taxes, stamp taxes, or similar taxes and all documentary,
filing and recording fees, charges, and expenses due in connection with such
filing and (iv) promptly provide the Administrative Agent with all recording
information and satisfactory evidence that all filings and payments required to
be filed and paid in connection with the filing of the UCC Fixture Filings have
been filed and paid.
(t) Certificate of Merger. The Borrower shall at the Borrower's expense
(i) promptly cause a certified copy of the Certificate of Merger in recordable
form to be recorded (where required) in each jurisdiction in which Shoney's Real
Estate, Inc. owned real property immediately prior to the consummation of the
merger contemplated in the Certificate of Merger (and, to the extent that the
recording of the Certificate of Merger shall not be sufficient under applicable
law in any jurisdiction to convey to Shoney's SPV the real property of Shoney's
Real Estate, Inc. located in such jurisdiction, shall promptly cause a
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Deed for each such property to be recorded in such jurisdiction), (ii) cause to
be timely completed and filed all transfer tax or similar returns or filings
required to be filed in connection with the recording of the Certificate of
Merger (and/or Deed, as the case may be), (iii) pay as and when due all transfer
taxes, stamp taxes, or similar taxes and all documentary, filing and recording
fees, charges, and expenses due in connection with such recording and (iv)
promptly provide the Administrative Agent with all recording information and
satisfactory evidence that all filings and payments required to be filed and
paid in connection with the recording of the Certificate of Merger (and/or
Deeds, as the case may be) have been filed and paid.
(u) Satisfactions, Releases and Terminations. The Borrower shall at the
Borrower's expense (i) promptly cause all satisfactions, releases and
terminations required to be delivered by Borrower pursuant to this Agreement as
a condition to the Initial Extension of Credit to be recorded in each
jurisdiction required in order to release all Liens securing all Existing Debt
other than the Liens securing Surviving Debt and (ii) shall promptly provide the
Administrative Agent with all recording information and satisfactory evidence
that all such satisfactions, releases and terminations filings have been filed.
(v) Termination of Financing Statements. Upon the request of the
Administrative Agent, and at the expense of the Borrower, within 30 days after
such request, furnish to the Administrative Agent proper termination statements
on Form UCC-3 covering such financing statements as the Administrative Agent may
reasonably request that were listed in the complete requests for information
referred to in Section 3.01(g)(viii)(C).
SECTION 5.02. Negative Covenants. Subject to Section 5.02(r),
so long as any Advance shall remain unpaid, any Letter of Credit shall be
outstanding or any Lender Party shall have any Commitment hereunder, the
Borrower will not, at any time:
(a) Liens, Etc. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to
exist, any Lien on or with respect to any of its properties of any
character (including, without limitation, accounts) whether now owned or
hereafter acquired, or sign or file or suffer to exist, or permit any of
its Subsidiaries to sign or file or suffer to exist, under the Uniform
Commercial Code of any jurisdiction, a financing statement that names
the Borrower or any of its Subsidiaries as debtor, or sign or suffer to
exist, or permit any of its Subsidiaries to sign or suffer to exist, any
security agreement authorizing any secured party thereunder to file such
financing statement, or assign, or permit any of its Subsidiaries to
assign, any accounts or other right to receive income, excluding,
however, from the operation of the foregoing restrictions the following:
(i) Liens created under the Loan Documents;
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(ii) Permitted Liens;
(iii) Liens securing the Surviving Debt or any other
Debt described in Section 5.02(b)(iv)(E) and other Liens
existing on the date hereof and described on Schedule 5.02(a)
hereto;
(iv) purchase money Liens upon or in real property or
equipment acquired or held by the Borrower or any of its
Subsidiaries to secure the purchase price of such property or
equipment or to secure Debt incurred solely for the purpose of
financing the acquisition, construction or improvement of any
such property or equipment to be subject to such Liens, or
Liens existing on any such property or equipment at the time
of acquisition (other than any such Liens created in
contemplation of such acquisition that do not secure the
purchase price), or extensions, renewals or replacements of
any of the foregoing for the same or a lesser amount;
provided, however, that no such Lien shall extend to or cover
any property other than the property or equipment being
acquired, constructed or improved, and no such extension,
renewal or replacement shall extend to or cover any property
not theretofore subject to the Lien being extended, renewed or
replaced; and provided further that the aggregate principal
amount of the Debt secured by Liens permitted by this clause
(iv) at the time of acquisition, construction or improvement
of the property or equipment subject thereto shall not exceed
100% the cost of such property or equipment, construction or
improvement or of the then fair value thereof, whichever shall
be less and that any such Debt shall be subject to the limits
set forth in Section 5.02(b)(iv)(B);
(v) Liens arising in connection with Capitalized
Leases permitted under Section 5.02(b)(iii)(C); provided that
no such Lien shall extend to or cover any Collateral or assets
other than the assets subject to such Capitalized Leases;
(vi) other Liens securing Debt outstanding in an
aggregate principal amount not to exceed $5,000,000, provided
that no such Lien shall extend to or cover any Collateral;
(vii) the replacement, extension or renewal of any
Lien permitted by clause (iii) above upon or in the same
property theretofore subject thereto or the replacement,
extension or renewal (without increase in the amount or change
in any direct or contingent obligor) of the Debt secured
thereby;
(viii) judgment liens securing amounts not in excess
of $1,000,000 in existence less than thirty days after the
entry thereof or with respect to which
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execution has been stayed or with respect to which the
appropriate insurance carrier has agreed in writing that there
is full coverage (subject to a customary deductible not in
excess of $1,000,000) by insurance;
(ix) the license for the use of the "Shoney's Inn"
service xxxx granted to ShoLodge, Inc. by the Borrower
pursuant to the License Agreement dated October 25, 1991;
(x) materialmen's, mechanic's, carriers', workmen's
and repairmen's Liens, provided that the Borrower or the
applicable Subsidiary is contesting in good faith and at its
own expense the validity or applicability of any such Lien by
an appropriate legal proceeding which proceeding must operate
to prevent the sale or forfeiture of the real property or any
part thereof encumbered by such Lien; provided further that
during the pendency of such contest, the Borrower or the
applicable Subsidiary shall cause security satisfactory to
Administrative Agent to be provided, assuring the discharge of
the Borrower's or the applicable Subsidiary's obligations that
are the subject of such contest and of any additional interest
charge, penalty or expense arising from or incurred as a
result of such contest; and
(xi) Liens arising in respect of the escrow
arrangements entered into in connection with the defeasance of
the Variable Rate Notes and the drawings under the related
letters of credit.
(b) Debt. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to exist,
any Debt other than:
(i) in the case of the Borrower, Debt in respect of
Hedge Agreements designed to hedge against fluctuations in
interest rates incurred in the ordinary course of business and
consistent with prudent business practice in an aggregate
notional amount not to exceed $100,000,000 at any time
outstanding;
(ii) in the case of the Borrower, Debt owed to a
wholly-owned Subsidiary of the Borrower, provided that (x)
such Debt is subordinated to any Debt of the Borrower under
the Loan Documents on the terms and conditions set forth in
Exhibit M and (y) if such Debt is owed to a Collateral Grantor
and is evidenced by a promissory note, such promissory note
shall be pledged in favor of the Secured Parties pursuant to
the terms of the Security Agreement;
(iii) in the case of any of the Subsidiaries of the
Borrower (other than Shoney's SPV, TPI SPV and TPI Insurance
Corporation), Debt owed to
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the Borrower or to a wholly-owned Subsidiary of the Borrower
(provided, that Debt owed by Shoney's of Canada, Inc., shall
not exceed an aggregate principal amount equal to the excess
of (A) $500,000 over (B) the aggregate amount of Investments
made by the Borrower and its Subsidiaries in Shoney's of
Canada, Inc. pursuant to Section 5.02(f)(i)(B) at any time
outstanding); provided that (x) such Debt is subordinated to
any Debt of such Subsidiary under the Loan Documents on the
terms and conditions set forth in Exhibit M and (y) if such
Debt is owed to a Collateral Grantor and is evidenced by a
promissory note, such Promissory Note shall be pledged in
favor of the Secured Parties pursuant to the terms of the
Security Agreement; and
(iv) in the case of the Borrower and any of
its Subsidiaries (other than Shoney's SPV, TPI SPV and TPI
Insurance Corporation),
(A) Debt under the Loan Documents,
(B) Debt secured by Liens permitted by
Section 5.02(a)(iv) not to exceed in the aggregate
$3,000,000 at any time outstanding,
(C) (i) Capitalized Leases (other than those
permitted by clause (E) below) not to exceed in the
aggregate $15,000,000 at any time outstanding and
(ii) in the case of Capitalized Leases to which any
Subsidiary of the Borrower is a party, Debt of the
Borrower of the type described in clause (i) of the
definition of "Debt" guaranteeing the Obligations of
such Subsidiary under such Capitalized Leases,
(D) unsecured Debt incurred in the ordinary
course of business for the deferred purchase price of
property or services, maturing within one year from
the date created, and aggregating, on a Consolidated
basis, not more than $5,000,000 at any one time
outstanding,
(E) the Surviving Debt, and any Debt
extending the maturity of, or refunding or
refinancing, in whole or in part, any Surviving Debt,
provided that the terms of any such extending,
refunding or refinancing Debt, and of any agreement
entered into and of any instrument issued in
connection therewith, are otherwise permitted by the
Loan Documents and provided further that the
principal amount of such Surviving Debt shall not be
increased above the principal amount thereof
outstanding immediately prior to such extension,
refunding or refinancing, and the direct and
contingent obligors therefor shall not be
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changed, as a result of or in connection with such
extension, refunding or refinancing, and
(F) indorsement of negotiable instruments
for deposit or collection or similar transactions in
the ordinary course of business.
(c) Lease Obligations. (i) Create, incur, assume or suffer to
exist, or permit any of its Subsidiaries to create, incur, assume or
suffer to exist, any obligations as lessee for the rental or hire of
real or personal property of any kind under leases or agreements to
lease (excluding Capitalized Leases) having an original term of one year
or more that would cause the direct and contingent liabilities of the
Borrower and its Subsidiaries, on a Consolidated basis, in respect of
all such obligations to exceed $20,000,000 payable in any period of 12
consecutive months or (ii) amend, modify or assign, or permit any
Subsidiary to amend, modify or assign, either of the Master Leases other
than any amendment or modification of either Master Lease that is solely
for the purpose of subjecting (in the ordinary course of business)
additional real property to such Master Lease or terminating (in the
ordinary course of business) the provisions of such Master Lease as they
relate to a specific piece of real property.
(d) Mergers, Etc. Merge into or consolidate with any Person or
permit any Person to merge into it, or permit any of its Subsidiaries to
do so, except that (i) any Subsidiary of the Borrower (other than
Shoney's SPV and TPI SPV) may merge into or consolidate with any other
Subsidiary of the Borrower provided that, in the case of any such merger
or consolidation, the Person formed by such merger or consolidation
shall be a wholly-owned Subsidiary of the Borrower, and (ii) any of the
Borrower's Subsidiaries may merge into the Borrower.
(e) Sales, Etc. of Assets. Sell, lease, transfer or otherwise
dispose of, or permit any of its Subsidiaries to sell, lease, transfer
or otherwise dispose of, any assets, or grant any option or other right
to purchase, lease or otherwise acquire any assets, except:
(i) sales of Inventory in the ordinary course of its
business,
(ii) (A) the transfer of real property by the
Borrower to Shoney's SPV or by TPI to TPI SPV and (B) the
lease of the real property owned by Shoney's SPV to the
Borrower or the lease of the real property owned by TPI SPV to
TPI, in each case pursuant to the applicable Master Lease,
(iii) in a transaction authorized by subsection (d)
of this Section,
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(iv) sales of assets for cash and for fair value (as
determined by the Borrower's board of directors) in an
aggregate amount not to exceed $10,000,000 in any Fiscal Year,
(v) the sales, leases or subleases of one or more of
the real properties described on Schedule 5.02(e), the
equipment used therein and any tradenames, trademarks or
copyrights related thereto so long as such tradenames,
trademarks or copyrights relate to the "Pargo's" concept or
the "Fifth Quarter" concept, for cash and for fair value (as
determined by the Borrower's board of directors or officers of
the Borrower designated by the Borrower's board of directors),
(vi) so long as no Default shall occur and be
continuing, the grant of any option or other right to purchase
any asset in a transaction which would be permitted under the
provisions of clauses (iv) and (v) above,
(vii) leases to current or future franchisees of the
Borrower on terms consistent with prudent business practice,
(viii) the sale for cash of Insurex Agency, Inc. and
Insurex Benefits Administrators, Inc. and any tradenames or
trademarks related thereto, and
(ix) leases or subleases of properties with an
aggregate value (which value shall be the appraised value, if
appraised, or cost) not to exceed $10,000,000 (excluding
properties currently being leased or subleased), in each case
on terms consistent with prudent business practice,
provided that in the case of sales of assets pursuant to clauses (iv)
and (v) above, the Borrower shall, (except as provided in Section
2.06(b)(ii)) within three Business Days following receipt by the
Borrower or any of its Subsidiaries of the Net Cash Proceeds from such
sale, prepay the Advances pursuant to, and in the amount and order of
priority set forth in, Section 2.06(b)(ii), as specified therein.
(f) Investments in Other Persons. Make or hold, or permit any
of its Subsidiaries to make or hold, any Investment in any Person other
than:
(i) (A) Investments by the Borrower and its
Subsidiaries in their Subsidiaries (other than any foreign
Subsidiary) and (B) Investments by the Borrower and its
Subsidiaries in Shoney's of Canada, Inc. in an aggregate
amount invested from the date hereof not to exceed an amount
equal to the excess of (1) $500,000 over (2) the aggregate
amount of intercompany Debt owed by Shoney's of Canada, Inc.
and outstanding at such time, provided that,
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with respect to Investments in any newly acquired or created
wholly-owned domestic Subsidiary, such Subsidiary (x) shall
become an additional grantor pursuant to the terms of the
Security Agreement and shall become a Subsidiary Guarantor
pursuant to the terms of the Subsidiary Guaranty and (y) shall
engage in a business similar to that engaged in by the
Borrower and its Subsidiaries on the date hereof;
(ii) loans and advances to employees in the ordinary
course of the business of the Borrower and its Subsidiaries as
presently conducted in an aggregate principal amount not to
exceed $300,000 at any time outstanding;
(iii) Investments by the Borrower in Shoney's SPV and
by TPI in TPI SPV consisting of the transfer of real property;
(iv) Investments by the Borrower and its Subsidiaries
in Cash Equivalents;
(v) Investments by the Borrower in Hedge Agreements
permitted under Section 5.02(b)(i)(A);
(vi) Investments consisting of intercompany Debt
permitted under Section 5.02(b)(ii) and (b)(iii);
(vii) Investments existing on the date hereof and
described on Schedule 4.01(kk) hereto; and
(viii) other Investments in an aggregate amount
invested not to exceed $2,000,000; provided that with respect
to Investments made under this clause (viii): (1) any newly
acquired or created Subsidiary of the Borrower or any of its
Subsidiaries shall be a wholly-owned domestic Subsidiary
thereof; (2) immediately before and after giving effect
thereto, no Default shall have occurred and be continuing or
would result therefrom; (3) any business acquired or invested
in pursuant to this clause (vii) shall be in a similar line of
business as the business of the Borrower or any of its
Subsidiaries; and (4) such Subsidiary shall become an
additional grantor pursuant to the terms of the Security
Agreement and shall become a Subsidiary Guarantor pursuant to
the terms of the Subsidiary Guaranty.
(g) Dividends, Etc. Declare or pay any dividends, purchase,
redeem, retire, defease or otherwise acquire for value any of its
capital stock or any warrants, rights or options to acquire such
capital stock, now or hereafter outstanding, return any capital to its
stockholders as such, make any distribution of assets, capital stock,
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warrants, rights, options, obligations or securities to its stockholders
as such or issue or sell any capital stock or any warrants, rights or
options to acquire such capital stock, or permit any of its Subsidiaries
to do any of the foregoing or permit any of its Subsidiaries to
purchase, redeem, retire, defease or otherwise acquire for value any
capital stock of the Borrower or any warrants, rights or options to
acquire such capital stock or to issue or sell any capital stock or any
warrants, rights or options to acquire such capital stock, except that,
so long as no Default shall have occurred and be continuing at the time
of any action described in clauses (i) through (iii) below or would
result therefrom, (i) the Borrower may (A) declare and pay dividends and
distributions payable only in common stock of the Borrower and (B)
except to the extent the Net Cash Proceeds thereof are required to be
applied to the prepayment of the Advances pursuant to Section 2.06(b),
purchase, redeem, retire, defease or otherwise acquire shares of its
capital stock with the proceeds received from the issue of new shares of
its capital stock with equal or inferior voting powers, designations,
preferences and rights, (ii) any Subsidiary of the Borrower may (A)
declare and pay cash dividends to the Borrower and (B) declare and pay
cash dividends to any other wholly-owned Subsidiary of the Borrower of
which it is a Subsidiary, and (iii) the Borrower may issue (A) rights or
options to acquire capital stock of the Borrower pursuant to employee
stock purchase plans, director or employee option plans and other
employee benefit plans and (B) common stock upon the exercise of options
issued under, or pursuant to, employee stock purchase plans, director or
employee option plans and other employee benefit plans.
(h) Change in Nature of Business. Make, or permit any of its
Subsidiaries to make, any material change in the nature of its business
as carried on at the date hereof.
(i) Charter Amendments. Amend, or permit any of its
Subsidiaries to amend, its certificate of incorporation or bylaws if
such amendment would have a Material Adverse Effect.
(j) Accounting Changes. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in (i) accounting policies or
reporting practices, except as required or permitted by generally
accepted accounting principles or (ii) the Fiscal Year.
(k) Prepayments, Etc. of Debt. (i) Prepay, redeem, purchase,
convert, defease or otherwise satisfy prior to the scheduled maturity
thereof in any manner, or make any payment of, any Debt, other than (A)
the prepayment of the Advances in accordance with the terms of this
Agreement, (B) regularly scheduled or required repayments or redemptions
of Surviving Debt or other Debt permitted hereby, (C) the conversion of
Subordinated Debt in accordance with its terms, (D) the defeasance of
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the Variable Rate Notes and (E) the prepayment or redemption of Debt
under the Industrial Revenue Bonds listed on Schedule 4.01(hh) in an
aggregate principal amount so prepaid or redeemed not to exceed the sum
of (x) the Net Cash Proceeds from the sale, transfer or other
disposition of assets pledged to secure such Debt plus (y) $2,600,000
plus (z) any restricted funds received in connection with the payment of
any such Debt, or (ii) amend, modify or change in any manner any term or
condition of any Surviving Debt or Subordinated Debt, or permit any of
its Subsidiaries to do any of the foregoing other than to prepay any
Debt payable to the Borrower.
(l) Ownership Change. Take, or permit any of its Subsidiaries
to take, any action that would result in an "ownership change" (as
defined in Section 382 of the Internal Revenue Code) with respect to the
Borrower or any of its Subsidiaries or the application of the "separate
return limitation year" or "consolidated return change of ownership"
limitations under the Federal income tax consolidated return regulations
with respect to the Borrower or any of its Subsidiaries.
(m) Negative Pledge. Enter into or suffer to exist, or permit
any of its Subsidiaries to enter into or suffer to exist, any agreement
prohibiting or conditioning the creation or assumption of any Lien upon
any of its property or assets other than (i) in favor of the Secured
Parties or (ii) in connection with (A) any Surviving Debt or (B) any
Debt permitted by Section 5.02(b)(iv)(B) hereof.
(n) Partnerships, Etc. Except for the partnerships listed in
Schedule 5.02(n), become a general partner in any general or limited
partnership or joint venture, or permit any of its Subsidiaries to do
so, other than any Subsidiary the sole assets of which consist of its
interest in such partnership or joint venture.
(o) Speculative Transactions. Engage, or permit any of its
Subsidiaries to engage, in any transaction involving commodity options
or futures contracts or any similar speculative transactions (including,
without limitation, take-or-pay contracts, except for Hedge Agreements
permitted under Section 5.02(b).
(p) Capital Expenditures. Make, or permit any of its
Subsidiaries to make, any Capital Expenditures that would cause the
aggregate of all such Capital Expenditures made by the Borrower and its
Subsidiaries in any Fiscal Year to exceed $35,000,000 plus the lesser of
50% of the Excess Cash Flow for the prior Fiscal Year or $5,000,000.
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(q) Franchise Agreements. Will not permit, at any time, any of
its Subsidiaries to, (a) terminate or alter any of the material terms
and conditions of any of the franchise agreements pursuant to which the
Borrower or any such Subsidiary is the franchisor in such a way so as to
(i) prohibit the assignment by the franchisor (by way of collateral
security) of all of its rights and benefits in the franchise agreements
or (ii) significantly reduce the aggregate royalty fees or advertising
fees payable by the franchisees and (b) enter into any franchise
agreements which would not permit the assignment by the franchisor (by
way of collateral security) of all of its rights and benefits in such
franchise agreements or which would contain fee arrangements which are
materially less beneficial, in the aggregate, to the Borrower and its
Subsidiaries than the fee arrangements contained in existing franchise
agreements of the Borrower and its Subsidiaries.
(r) Existing Subsidiary Restrictions. None of the foregoing
covenants in this Section 5.02 shall restrict the transfer of funds by
an Existing Subsidiary to the Borrower sufficient to satisfy when due
all payment obligations of the Borrower or TPI in respect of the
Debentures, including, without limitation, the payment of principal,
premium, if any, interest or the Repurchase Price or the Redemption
Price, so long as at the time of such transfer, the payment of such
obligations in respect of the Debentures is permitted to be made under
Article XIV of the Indenture.
SECTION 5.03. Reporting Requirements. So long as any Advance
shall remain unpaid, any Letter of Credit shall be outstanding or any Lender
Party shall have any Commitment hereunder, the Borrower will furnish to the
Lender Parties and the Administrative Agent.
(a) Notice of Default or Material Adverse Effect. Within two
Business Days after the occurrence of each Default or any event,
development or occurrence reasonably likely to have a Material Adverse
Effect continuing on the date of such statement, a statement of the
chief financial officer or principal financial officer of the Borrower
setting forth details of such Default or such event, development or
occurrence and the action that the Borrower has taken and proposes to
take with respect thereto.
(b) Monthly Financials. Within 30 days after the end of each
fiscal accounting period, a statement of income of the Borrower and its
Subsidiaries as of the end of such fiscal accounting period in
substantially the form of Exhibit L and duly certified by the chief
financial officer or principal financial officer of the Borrower.
(c) Quarterly Financials. Within 45 days after the end of each
of the first three fiscal quarters of each Fiscal Year, Consolidated
balance sheets of the Borrower and its Subsidiaries as of the end of
such fiscal quarter and Consolidated statements of
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income and cash flow of the Borrower and its Subsidiaries for the period
commencing at the end of the previous fiscal quarter and ending with the
end of such fiscal quarter and Consolidated statements of income and
cash flow of the Borrower and its Subsidiaries for the period commencing
at the end of the previous Fiscal Year and ending with the end of such
fiscal quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding period of the preceding
Fiscal Year, all in reasonable detail and duly certified (subject to
year-end audit adjustments) by the corporate controller or chief
financial officer or principal financial officer of the Borrower as
having been prepared in accordance with GAAP, together with (i) a
certificate of said officer stating that no Default has occurred and is
continuing or, if a Default has occurred and is continuing, a statement
as to the nature thereof and the action that the Borrower has taken and
proposes to take with respect thereto and (ii) a schedule in form
satisfactory to the Administrative Agent of the computations used by the
Borrower in determining compliance with the covenants contained in
Sections 5.04(a) through (d), provided that in the event of any change
in GAAP used in the preparation of such financial statements, the
Borrower shall also provide, if necessary for the determination of
compliance with Section 5.04, a statement of reconciliation conforming
such financial statements to GAAP.
(d) Annual Financials. Within 90 days after the end of each
Fiscal Year, a copy of the annual report for such year for the Borrower
and its Subsidiaries, including therein the Consolidated balance sheet
of the Borrower and its Subsidiaries as of the end of such Fiscal Year
and Consolidated statements of income and cash flow of the Borrower and
its Subsidiaries for such Fiscal Year, accompanied by an opinion
acceptable to the Required Lenders of Ernst & Young or other independent
public accountants of recognized standing acceptable to the
Administrative Agent, together with (i) a certificate of such accounting
firm to the Lender Parties stating that in the course of the regular
audit of the business of the Borrower and its Subsidiaries, which audit
was conducted by such accounting firm in accordance with generally
accepted auditing standards, such accounting firm has obtained no
knowledge that a Default of a financial nature under Section 5.02(a),
5.02(b), 5.02(f), 5.02(p) or 5.04 has occurred and is continuing, or if,
in the opinion of such accounting firm, a Default of a financial nature
under Section 5.02(a), 5.02(b), 5.02(f), 5.02(p) or 5.04 has occurred
and is continuing, a statement as to the nature thereof, (ii) a schedule
in form satisfactory to the Administrative Agent of the computations
used by such accountants in determining, as of the end of such Fiscal
Year, compliance with the covenants contained in Sections 5.04(a)
through (d), provided that in the event of any change in GAAP used in
the preparation of such financial statements, the Borrower shall also
provide, if necessary for the determination of compliance with Section
5.04, a statement of reconciliation conforming such financial statements
to GAAP and (iii) a certificate of the corporate controller, chief
financial officer or principal financial officer of the Borrower stating
that no Default has occurred and is continuing or, if a Default has
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occurred and is continuing, a statement as to the nature thereof and the
action that the Borrower has taken and proposes to take with respect
thereto.
(e) Annual Forecasts. As soon as available and in any event no
later than 30 days after the end of each Fiscal Year, forecasts prepared
by management of the Borrower, in form satisfactory to the
Administrative Agent, of balance sheets, income statements and cash flow
statements on a quarterly basis for the Fiscal Year following such
Fiscal Year then ended and on an annual basis for each Fiscal Year
thereafter until the Termination Date.
(f) ERISA Events and ERISA Reports. Promptly and in any event
within 10 days after any Loan Party or any ERISA Affiliate knows or has
reason to know that any ERISA Event has occurred, a statement of the
chief financial officer or principal financial officer of the Borrower
describing such ERISA Event and the action, if any, that such Loan Party
or such ERISA Affiliate has taken and proposes to take with respect
thereto and (ii) on the date any records, documents or other information
must be furnished to the PBGC with respect to any Plan pursuant to
Section 4010 of ERISA, a copy of such records, documents and
information.
(g) Plan Terminations. Promptly and in any event within two
Business Days after receipt thereof by any Loan Party or any ERISA
Affiliate, copies of each notice from the PBGC stating its intention to
terminate any Plan or to have a trustee appointed to administer any
Plan.
(h) Litigation. Promptly after the commencement thereof,
notice of all actions, suits, investigations, litigation and proceedings
before any court or governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, affecting any Loan Party
or any of its Subsidiaries of the type described in Section 4.01(i), and
promptly after the occurrence thereof, notice of any adverse change in
the status or the financial effect on any Loan Party or any of its
Subsidiaries of the Disclosed Litigation from that described on Schedule
3.01(d). For purposes of this subclause (h), any litigation,
arbitration, or governmental investigation or proceeding which involves
a damage claim of $1,500,000 or less need not be the subject of any such
notice unless it is one of a series of claims arising out of the same
set of facts or circumstances which, in the aggregate, exceed
$10,000,000.
(i) Securities Reports. Promptly after the sending or filing
thereof, copies of all proxy statements, financial statements and
reports that any Loan Party or any of its Subsidiaries sends to its
stockholders, and copies of all regular, periodic and special reports,
and all registration statements, that any Loan Party or any of its
Subsidiaries files with the Securities and Exchange Commission or any
governmental authority that
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may be substituted therefor, or with any national securities exchange,
in each case excluding the exhibits thereto unless requested by the
Administrative Agent.
(j) Creditor Reports. Promptly after the furnishing thereof,
copies of any statement or report furnished to any other holder of the
securities of any Loan Party or of any of its Subsidiaries pursuant to
the terms of any indenture, loan or credit or similar agreement and not
otherwise required to be furnished to the Lender Parties or the
Administrative Agent pursuant to any other clause of this Section 5.03.
(k) Agreement Notices. Promptly upon receipt thereof, copies
of all notices, requests and other documents received by any Loan Party
or any of its Subsidiaries under or pursuant to any indenture, loan or
credit or similar agreement regarding or related to any breach or
default by any party thereto or any other event, in each case that could
materially impair the value of the interests or the rights of any Loan
Party or otherwise have a Material Adverse Effect.
(l) Revenue Agent Reports. Within 30 days after receipt,
copies of all Revenue Agent Reports (Internal Revenue Service Form 886),
or other written proposals of the Internal Revenue Service, that
propose, determine or otherwise set forth positive adjustments to the
Federal income tax liability of the affiliated group (within the meaning
of Section 1504(a)(1) of the Internal Revenue Code) of which the
Borrower is a member aggregating $2,000,000 or more.
(m) Environmental Conditions. Promptly after the assertion or
occurrence thereof, notice of any Environmental Action against or of any
noncompliance by any Loan Party or any of its Subsidiaries with any
Environmental Law or Environmental Permit that (i) could reasonably be
expected to have a Material Adverse Effect or (ii) cause any property
described in the Mortgages to be subject to any restrictions which would
interfere with its normal use or operation.
(n) Real Property. As soon as available and in any event
within 90 days after the end of each Fiscal Year, a report supplementing
Schedules 4.01(ii) and 4.01(jj) hereto, including a list of all real
property disposed of by the Borrower or any of its Subsidiaries during
such Fiscal Year (which list shall include the location of such real
property and the Net Cash Proceeds received by the Borrower and its
Subsidiaries from such disposal) and a list and description (including
the street address, state, record owner, book value thereof), of all
real property acquired during such Fiscal Year.
(o) Insurance. As soon as available and in any event within 90
days after the end of each Fiscal Year, a report summarizing the
insurance coverage required under the Credit Agreement (specifying type,
amount and carrier) in effect for the
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Borrower and its Subsidiaries and containing such additional information
as any Lender Party (through the Administrative Agent) may reasonably
specify.
(p) Other Information. Such other information respecting the
business, condition (financial or otherwise), operations, performance,
properties or prospects of any Loan Party or any of its Subsidiaries as
any Lender Party (through the Administrative Agent) may from time to
time reasonably request.
SECTION 5.04. Financial Covenants. So long as any Advance
shall remain unpaid, any Letter of Credit shall be outstanding or any Lender
Party shall have any Commitment hereunder, the Borrower will:
(a) Interest Coverage Ratio. Maintain as of the end of each
fiscal quarter of the Borrower a ratio of (i) EBITDA of the Borrower and
its Subsidiaries for the most recently completed four fiscal quarter
period to (ii) Interest Expense of the Borrower and its Subsidiaries for
such fiscal quarter of not less than the ratio set forth below for such
fiscal quarter:
FISCAL QUARTER ENDING RATIO
--------------------- -----
February 15, 1998 2.25:1
May 10, 1998 2.25:1
August 2, 1998 2.25:1
October 25, 1998 2.25:1
February 14, 1999 2.75:1
May 9, 1999 2.75:1
August 1, 1999 2.75:1
October 31, 1999 2.75:1
February 20, 2000 3.25:1
May 14, 2000 3.25:1
August 6, 2000 3.25:1
October 29, 2000 3.25:1
February 18, 2001 and thereafter 3.75:1
(b) Net Worth. Maintain at all times an excess of Consolidated
total assets over Consolidated total liabilities, in each case, of the
Borrower and its Subsidiaries (calculated, in each case, without taking
into account the Asset Impairment Charges and the Restructuring Charges
to the extent such charges have reduced such excess) of not less than
50% of Consolidated net income of the Borrower and its Subsidiaries for
the period after October 26, 1997 to and including each date of
determination computed on a cumulative basis for said entire period
(calculated without taking into
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account the Asset Impairment Charges and the Restructuring Charges to
the extent such charges have reduced such Consolidated net income).
(c) Leverage Ratio. Maintain as of the end of each fiscal
quarter of the Borrower a Leverage Ratio of not more than the ratio set
forth below for such fiscal quarter:
FISCAL QUARTER ENDING RATIO
--------------------- -----
February 15, 1998 5.50:1
May 10, 1998 5.50:1
August 2, 1998 5.50:1
October 25, 1998 4.75:1
February 14, 1999 4.75:1
May 9, 1999 4.75:1
August 1, 1999 4.75:1
October 31, 1999 4.50:1
February 20, 2000 4.50:1
May 14, 2000 4.50:1
August 6, 2000 4.00:1
October 29, 2000 4.00:1
February 18, 2001 4.00:1
May 13, 2001 4.00:1
August 5, 2001 4.00:1
October 28, 2001 and thereafter 3.75:1
(d) Fixed Charge Coverage Ratio. Maintain as of the end of
each fiscal quarter of the Borrower a ratio of (i) the sum of (A)
Consolidated EBITDA of the Borrower and its Subsidiaries for the most
recently completed four fiscal quarter period less (B) the aggregate
amount of cash Capital Expenditures made by the Borrower and its
Subsidiaries during such four fiscal quarter period to (ii) the sum of
(A) Interest Expense in respect of such fiscal quarter plus (B) the
aggregate principal amount of all scheduled amortization payments made
by the Borrower and its Subsidiaries during such four fiscal quarter
period in respect of Debt of the Borrower and its Subsidiaries plus (C)
the aggregate amount of all tax expense incurred by the Borrower and its
Subsidiaries during such four fiscal quarter period of not less than
1.10:1; provided, however, that for purposes of calculating the fixed
charge coverage ratio for (x) the fiscal quarter ended February 15,
1998, each component (other than EBITDA and Interest Expense) shall be
the product of such component for such fiscal quarter times a fraction
the numerator of which is 13 and the denominator of which is 4, (y) the
fiscal quarter ended May 10, 1998, each component (other than EBITDA and
Interest Expense) shall be the product of such component for the two
fiscal quarters then ended
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times a fraction the numerator of which is 13 and the denominator of
which is 7 and (z) for the fiscal quarter ended August 2, 1998, each
component (other than EBITDA and Interest Expense) shall be the product
of such component for the three fiscal quarters then ended times a
fraction the numerator of which is 13 and the denominator of which is
10; provided further that for purposes of calculating the fixed charge
coverage ratio for each of the fiscal quarters ended February 15, 1998,
May 10, 1998 and August 2, 1998, the Capital Expenditure component of
such ratio shall not exceed $35,000,000.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events
("Events of Default") shall occur and be continuing:
(a) (i) the Borrower shall fail to pay any principal of any
Advance when the same shall become due and payable or (ii) the Borrower
shall fail to pay any interest on any Advance, or any Loan Party shall
fail to make any other payment under any Loan Document, in each case
under this clause (ii) within 3 Business Days after the same becomes due
and payable; or
(b) any representation or warranty made by any Loan Party (or
any of its officers) under or in connection with any Loan Document shall
prove to have been incorrect in any material respect when made; or
(c) the Borrower shall fail to perform or observe any term,
covenant or agreement contained in Section 2.14, 5.01(d) (to the extent
that such covenant relates to casualty or liability insurance in respect
of Collateral), (e), (g), (l), (m) or (n), 5.02, 5.03 or 5.04; or
(d) any Loan Party shall fail to perform any other term,
covenant or agreement contained in any Loan Document on its part to be
performed or observed if such failure shall remain unremedied for 30
days after the earlier of the date on which (A) a Responsible Officer of
any Loan Party becomes aware of such failure or (B) written notice
thereof shall have been given to the Borrower by the Administrative
Agent or any Lender Party; or
(e) any Loan Party or any of its Subsidiaries shall fail to
pay any principal of, premium or interest on or any other amount payable
in respect of any Debt that is outstanding in a principal or notional
amount of at least $5,000,000 either individually
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or in the aggregate (but excluding Debt outstanding hereunder) of such
Loan Party or such Subsidiary (as the case may be), when the same
becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall
continue after the applicable grace period, if any, specified in the
agreement or instrument relating to such Debt; or any other event shall
occur or condition shall exist under any agreement or instrument
relating to any such Debt and shall continue after the applicable grace
period, if any, specified in such agreement or instrument, if the effect
of such event or condition is to accelerate, or to permit the
acceleration of, the maturity of such Debt or otherwise to cause, or to
permit the holder thereof to cause, such Debt to mature; or any such
Debt shall be declared to be due and payable or required to be prepaid
or redeemed (other than by a regularly scheduled required prepayment or
redemption), purchased or defeased, or an offer to prepay, redeem,
purchase or defease such Debt shall be required to be made, in each case
prior to the stated maturity thereof; or
(f) any Loan Party or any of its Subsidiaries shall generally
not pay its debts as such debts become due, or shall admit in writing
its inability to pay its debts generally, or shall make a general
assignment for the benefit of creditors; or any proceeding shall be
instituted by or against any Loan Party or any of its Subsidiaries
seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment
of a receiver, trustee, or other similar official for it or for any
substantial part of its property and, in the case of any such proceeding
instituted against it (but not instituted by it) that is being
diligently contested by it in good faith, either such proceeding shall
remain undismissed or unstayed for a period of 30 days or any of the
actions sought in such proceeding (including, without limitation, the
entry of an order for relief against, or the appointment of a receiver,
trustee, custodian or other similar official for, it or any substantial
part of its property) shall occur; or any Loan Party or any of its
Subsidiaries shall take any corporate action to authorize any of the
actions set forth above in this subsection (f); or
(g) any judgment or court order for the payment of money in
excess of $5,000,000 shall be rendered against any Loan Party or any of
its Subsidiaries and either (i) enforcement proceedings shall have been
commenced by any creditor upon such judgment or court order or (ii)
there shall be any period of 30 consecutive days during which such
judgment shall not have been discharged or a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not
be in effect; provided, however, that any such judgment or court order
shall not be an Event of Default under this Section 6.01(g) if and for
so long as (i) the entire amount of such judgment or court order is
covered by a valid and binding policy of insurance between
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the defendant and the insurer covering payment thereof and (ii) such
insurer, which shall be rated at least "A" by A.M. Best Company, has
been notified of, and has not disputed the claim made for payment of the
amount of such judgment or order; or
(h) any non-monetary judgment or order shall be rendered
against any Loan Party or any of its Subsidiaries that is reasonably
likely to have a Material Adverse Effect, and there shall be any period
of 30 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not
be in effect; or
(i) any provision of any Loan Document after delivery thereof
pursuant to Section 3.01 or 5.01(l) shall for any reason cease to be
valid and binding on or enforceable against any Loan Party party to it,
or any such Loan Party shall so state in writing; or
(j) any Collateral Document after delivery thereof pursuant to
Section 3.01 or 5.01(l) shall for any reason (other than pursuant to the
terms thereof) cease to create a valid and perfected first priority lien
on and security interest in the Collateral purported to be covered
thereby, other than in respect of any item or items of Collateral the
fair market value of which, either individually or in the aggregate,
does not exceed $5,000,000 ; or
(k) (i) any Person or two or more Persons acting in concert
shall have acquired beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934), directly or indirectly, of Voting Stock of the
Borrower (or other securities convertible into such Voting Stock)
representing 20% or more of the combined voting power of all Voting
Stock of the Borrower; or (ii) a majority of the board of directors of
the Borrower shall consist of directors other than (A) directors holding
office as of the date of this Agreement or (B) directors whose election
was recommended by such directors or subsequent directors so
recommended; or (iii) any Person or two or more Persons acting in
concert shall have acquired by contract or otherwise, or shall have
entered into a contract or arrangement that, upon consummation, will
result in its or their acquisition of the power to exercise, directly or
indirectly, a controlling influence over the management or policies of
the Borrower; or
(l) any ERISA Event shall have occurred with respect to a Plan
and the sum (determined as of the date of occurrence of such ERISA
Event) of the Insufficiency of such Plan and the Insufficiency of any
and all other Plans with respect to which an ERISA Event shall have
occurred and then exist (or the liability of the Loan Parties and the
ERISA Affiliates related to such ERISA Event) exceeds $5,000,000; or
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(m) any Loan Party or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that it has incurred
Withdrawal Liability to such Multiemployer Plan in an amount that, when
aggregated with all other amounts required to be paid to Multiemployer
Plans by the Loan Parties and the ERISA Affiliates as Withdrawal
Liability (determined as of the date of such notification), exceeds
$5,000,000 or requires payments exceeding $1,000,000 per annum; or
(n) any Loan Party or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or is being terminated, within the meaning of
Title IV of ERISA, and as a result of such reorganization or termination
the aggregate annual contributions of the Loan Parties and the ERISA
Affiliates to all Multiemployer Plans that are then in reorganization or
being terminated have been or will be increased over the amounts
contributed to such Multiemployer Plans for the plan years of such
Multiemployer Plans immediately preceding the plan year in which such
reorganization or termination occurs by an amount exceeding $1,000,000;
then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the consent, of the Required Lenders, by notice to the Borrower,
declare the obligation of each Appropriate Lender to make Advances (other than
Letter of Credit Advances by the Issuing Bank or a Working Capital Lender
pursuant to Section 2.03(c)) and of the Issuing Bank to issue Letters of Credit
to be terminated, whereupon the same shall forthwith terminate, and (ii) shall
at the request, or may with the consent, of the Required Lenders, by notice to
the Borrower, declare the Notes, all interest thereon and all other amounts
payable under this Agreement and the other Loan Documents to be forthwith due
and payable, whereupon the Notes, all such interest and all such amounts shall
become and be forthwith due and payable, without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived by the
Borrower; provided, however, that in the event of an actual or deemed entry of
an order for relief with respect to the Borrower under the Federal Bankruptcy
Code, (x) the obligation of each Appropriate Lender to make Advances (other than
Letter of Credit Advances by the Issuing Bank or a Working Capital Lender
pursuant to Section 2.03(c)) and Working Capital Advances by a Working Capital
Lender pursuant to Section 2.02(b) and of the Issuing Bank to issue Letters of
Credit shall automatically be terminated and (y) the Notes, all such interest
and all such amounts shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Borrower.
SECTION 6.02. Actions in Respect of the Letters of Credit upon
Default. If any Event of Default shall have occurred and be continuing, the
Administrative Agent may, or shall at the request of the Required Lenders,
irrespective of whether it is taking any of the actions described in Section
6.01 or otherwise, make demand upon the Borrower to, and forthwith upon such
demand the Borrower will, pay to the Administrative Agent on behalf of
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the Lender Parties in same day funds at the Administrative Agent's office
designated in such demand, for deposit in the L/C Cash Collateral Account, an
amount equal to the aggregate Available Amount of all Letters of Credit then
outstanding. If at any time the Administrative Agent determines that any funds
held in the L/C Cash Collateral Account are subject to any right or claim of any
Person other than the Administrative Agent and the Lender Parties or that the
total amount of such funds is less than the aggregate Available Amount of all
Letters of Credit, the Borrower will, forthwith upon demand by the
Administrative Agent, pay to the Administrative Agent, as additional funds to be
deposited and held in the L/C Cash Collateral Account, an amount equal to the
excess of (a) such aggregate Available Amount over (b) the total amount of
funds, if any, then held in the L/C Cash Collateral Account that the
Administrative Agent determines to be free and clear of any such right and
claim.
ARTICLE VII
THE ADMINISTRATIVE AGENT
SECTION 7.01. Authorization and Action. Each Lender Party (in
its capacities as a Lender, the Swing Line Bank (if applicable), the Issuing
Bank (if applicable) and a potential Hedge Bank) hereby appoints and authorizes
the Administrative Agent to take such action as agent on its behalf and to
exercise such powers and discretion under this Agreement and the other Loan
Documents as are delegated to the Administrative Agent by the terms hereof and
thereof, together with such powers and discretion as are reasonably incidental
thereto. As to any matters not expressly provided for by the Loan Documents
(including, without limitation, enforcement or collection of the Notes), the
Administrative Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders or such other Lenders as required by Section 8.01, and such
instructions shall be binding upon all Lender Parties and all holders of Notes;
provided, however, that the Administrative Agent shall not be required to take
any action that exposes the Administrative Agent to personal liability or that
is contrary to this Agreement or applicable law. To the extent permitted in the
Security Agreement and the Mortgages, the Administrative Agent may release any
assets permitted to be sold, leased, transferred or otherwise disposed of
pursuant to the terms hereof. The Administrative Agent agrees to give to each
Lender Party prompt notice of each notice given to it by the Borrower pursuant
to the terms of this Agreement.
SECTION 7.02. Agent's Reliance, Etc. Neither the
Administrative Agent nor any of its directors, officers, agents or employees
shall be liable for any action taken or omitted to be taken by it or them under
or in connection with the Loan Documents, except for its or their own gross
negligence or willful misconduct. Without limitation of the generality of the
foregoing, the Administrative Agent: (a) may treat the payee of any Note
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as the holder thereof until the Administrative Agent receives and accepts an
Assignment and Acceptance entered into by the Lender that is the payee of such
Note, as assignor, and an Eligible Assignee, as assignee, as provided in Section
8.07; (b) may consult with legal counsel (including counsel for any Loan Party),
independent public accountants and other experts selected by it with reasonable
care and shall not be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel, accountants or
experts; (c) makes no warranty or representation to any Lender Party and shall
not be responsible to any Lender Party for any statements, warranties or
representations (whether written or oral) made in or in connection with the Loan
Documents; (d) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of any
Loan Document on the part of any Loan Party or to inspect the property
(including the books and records) of any Loan Party; (e) shall not be
responsible to any Lender Party for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, any Loan Document or any other instrument or
document furnished pursuant thereto; and (f) shall incur no liability under or
in respect of any Loan Document by acting upon any notice, consent, certificate
or other instrument or writing (which may be by telegram, telecopy or telex)
believed by it to be genuine and signed or sent by the proper party or parties.
SECTION 7.03. NationsBank and Affiliates. With respect to its
Commitments, the Advances made by it and the Notes issued to it, NationsBank
shall have the same rights and powers under the Loan Documents as any other
Lender Party and may exercise the same as though it were not the Administrative
Agent; and the term "Lender Party" or "Lenders Parties" shall, unless otherwise
expressly indicated, include NationsBank in its individual capacity. NationsBank
and its affiliates may accept deposits from, lend money to, act as trustee under
indentures of, accept investment banking engagements from and generally engage
in any kind of business with, any Loan Party, any of its Subsidiaries and any
Person who may do business with or own securities of any Loan Party or any such
Subsidiary, all as if NationsBank were not the Administrative Agent and without
any duty to account therefor to the Lender Parties.
SECTION 7.04. Lender Party Credit Decision. Each Lender Party
acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender Party and based on the financial
statements referred to in Section 4.01 and such other documents and information
as it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. Each Lender Party also acknowledges that it will,
independently and without reliance upon the Administrative Agent or any other
Lender Party and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.
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SECTION 7.05. Indemnification. (a) Each Lender Party severally
agrees to indemnify the Administrative Agent (to the extent not promptly
reimbursed by the Borrower) from and against such Lender Party's ratable share
(determined as provided below) of any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever that may be imposed on, incurred by, or
asserted against the Administrative Agent in any way relating to or arising out
of the Loan Documents or any action taken or omitted by the Administrative Agent
under the Loan Documents; provided, however, that no Lender Party shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Administrative Agent's gross negligence or willful misconduct. Without
limitation of the foregoing, each Lender Party agrees to reimburse the
Administrative Agent promptly upon demand for its ratable share of any costs and
expenses (including, without limitation, fees and expenses of counsel) payable
by the Borrower under Section 8.04, to the extent that the Administrative Agent
is not promptly reimbursed for such costs and expenses by the Borrower. For
purposes of this Section 7.05(a), the Lender Parties' respective ratable shares
of any amount shall be determined, at any time, according to the sum of (a) the
aggregate principal amount of the Advances outstanding at such time and owing to
the respective Lender Parties, (b) their respective Pro Rata Shares of the
aggregate Available Amount of all Letters of Credit outstanding at such time,
(c) the aggregate unused portions of their respective Term A Commitments and
Term B Commitments at such time and (d) their respective Unused Working Capital
Commitments at such time; provided, that the aggregate principal amount of Swing
Line Advances owing to the Swing Line Bank and of Letter of Credit Advances
owing to the Issuing Bank shall be considered to be owed to the Working Capital
Lenders ratably in accordance with their respective Working Capital Commitments.
In the event that any Defaulted Advance shall be owing by any Defaulting Lender
at any time, such Lender Party's Commitment with respect to the Facility under
which such Defaulted Advance was required to have been made shall be considered
to be unused for purposes of this Section 7.05(a) to the extent of the amount of
such Defaulted Advance. The failure of any Lender Party to reimburse the
Administrative Agent promptly upon demand for its ratable share of any amount
required to be paid by the Lender Party to the Administrative Agent as provided
herein shall not relieve any other Lender Party of its obligation hereunder to
reimburse the Administrative Agent for its ratable share of such amount, but no
Lender Party shall be responsible for the failure of any other Lender Party to
reimburse the Administrative Agent for such other Lender Party's ratable share
of such amount. Without prejudice to the survival of any other agreement of any
Lender Party hereunder, the agreement and obligations of each Lender Party
contained in this Section 7.05(a) shall survive the payment in full of
principal, interest and all other amounts payable hereunder and under the other
Loan Documents.
(b) Each Lender Party severally agrees to indemnify the
Issuing Bank (to the extent not promptly reimbursed by the Borrower) from and
against such Lender Party's
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ratable share (determined as provided below) of any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever that may be imposed
on, incurred by, or asserted against the Issuing Bank in any way relating to or
arising out of the Loan Documents or any action taken or omitted by the Issuing
Bank under the Loan Documents; provided, however, that no Lender Party shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Issuing Bank's gross negligence or willful misconduct. Without
limitation of the foregoing, each Lender Party agrees to reimburse the Issuing
Bank promptly upon demand for its ratable share of any costs and expenses
(including, without limitation, fees and expenses of counsel) payable by the
Borrower under Section 8.04, to the extent that the Issuing Bank is not promptly
reimbursed for such costs and expenses by the Borrower. For purposes of this
Section 7.05(b), the Lender Parties' respective ratable shares of any amount
shall be determined, at any time, according to the sum of (a) the aggregate
principal amount of the Advances outstanding at such time and owing to the
respective Lender Parties, (b) their respective Pro Rata Shares of the aggregate
Available Amount of all Letters of Credit outstanding at such time, (c) the
aggregate unused portions of their respective Term A Commitments and Term B
Commitments at such time plus (d) their respective Unused Working Capital
Commitments at such time; provided that the aggregate principal amount of Swing
Line Advances owing to the Swing Line Bank and Letter of Credit Advances owing
to the Issuing Bank shall be considered to be owed to the Working Capital
Lenders ratably in accordance with their respective Working Capital Commitments.
In the event that any Defaulted Advance shall be owing by any Defaulting Lender
at any time, such Lender Party's Commitment with respect to the Facility under
which such Defaulted Advance was required to have been made shall be considered
to be unused for purposes of this Section 7.05(b) to the extent of the amount of
such Defaulted Advance. The failure of any Lender Party to reimburse the Issuing
Bank promptly upon demand for its ratable share of any amount required to be
paid by the Lender Parties to the Issuing Bank as provided herein shall not
relieve any other Lender Party of its obligation hereunder to reimburse the
Issuing Bank for its ratable share of such amount, but no Lender Party shall be
responsible for the failure of any other Lender Party to reimburse the Issuing
Bank for such other Lender Party's ratable share of such amount. Without
prejudice to the survival of any other agreement of any Lender Party hereunder,
the agreement and obligations of each Lender Party contained in this Section
7.05(b) shall survive the payment in full of principal, interest and all other
amounts payable hereunder and under the other Loan Documents.
SECTION 7.06. Successor Agents. The Administrative Agent may
resign as to any or all of the Facilities at any time by giving written notice
thereof to the Lender Parties and the Borrower and may be removed as to all of
the Facilities at any time with or without cause by the Required Lenders. Upon
any such resignation or removal, the Required Lenders shall have the right to
appoint a successor Administrative Agent as to such of the Facilities as to
which the Administrative Agent has resigned or been removed. If no
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successor Administrative Agent shall have been so appointed by the Required
Lenders, and shall have accepted such appointment, within 30 days after the
retiring Administrative Agent's giving of notice of resignation or the Required
Lenders' removal of the retiring Administrative Agent, then the retiring
Administrative Agent may, on behalf of the Lender Parties, appoint a successor
Administrative Agent, which shall be a commercial bank organized under the laws
of the United States or of any State thereof and having a combined capital and
surplus of at least $250,000,000. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent as to all of
the Facilities and upon the execution and filing or recording of such financing
statements, or amendments thereto, and such amendments or supplements to the
Mortgages, and such other instruments or notices, as may be necessary or
desirable, or as the Required Lenders may request, in order to continue the
perfection of the Liens granted or purported to be granted by the Collateral
Documents, such successor Administrative Agent shall succeed to and become
vested with all the rights, powers, discretion, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations under the Loan Documents. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent as to less than all of the Facilities and upon the
execution and filing or recording of such financing statements, or amendments
thereto, and such amendments or supplements to the Mortgages, and such other
instruments or notices, as may be necessary or desirable, or as the Required
Lenders may request, in order to continue the perfection of the Liens granted or
purported to be granted by the Collateral Documents, such successor
Administrative Agent shall succeed to and become vested with all the rights,
powers, discretion, privileges and duties of the retiring Administrative Agent
as to such Facilities, other than with respect to funds, transfers and other
similar aspects of the administration of borrowings under such Facilities,
issuance of Letters of Credit (notwithstanding any resignation as Administrative
Agent with respect to the Letter of Credit Facility) and payments by the
Borrower in respect of such Facilities, and the retiring Administrative Agent
shall be discharged from its duties and obligations under this Agreement as to
such Facilities, other than as aforesaid. After any retiring Administrative
Agent's resignation or removal hereunder as Administrative Agent, the provisions
of this Article VII shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent under this
Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the Notes or any other Loan Document, nor consent
to any departure by the Borrower therefrom, shall in any event be effective
unless the same shall be in writing and signed (or, in the case of the
Collateral Documents, consented to) by the
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Required Lenders, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided,
however, that (a) no amendment, waiver or consent shall, unless in writing and
signed by all of the Lenders (other than any Lender Party that is, at such time,
a Defaulting Lender), do any of the following at any time: (i) except as
provided in Section 3.03, waive any of the conditions specified in Section 3.01
or, in the case of the Initial Extension of Credit, Section 3.02, (ii) change
the number of Lenders or the percentage of (x) the Commitments, (y) the
aggregate unpaid principal amount of the Advances or (z) the aggregate Available
Amount of outstanding Letters of Credit that, in each case, shall be required
for the Lenders or any of them to take any action hereunder, (iii) except in
connection with actions permitted by Section 5.02(d), reduce or limit the
obligations of any Subsidiary Guarantor under Section 1 of the Subsidiary
Guaranty or otherwise limit a Subsidiary Guarantor's liability with respect to
the Obligations owing to the Administrative Agent and the Lender Parties, (iv)
release any material portion of the Collateral in any transaction or series of
related transactions or permit the creation, incurrence, assumption or existence
of any Lien on all or substantially all of the Collateral in any transaction or
series of related transactions to secure any Obligations other than Obligations
owing to the Secured Parties under the Loan Documents and other than Debt owing
to any other Person, provided that, in the case of the creation, incurrence,
assumption or existence of any Lien on any material portion of the Collateral to
secure Debt owing to any other Person, (A) the Borrower shall, on the date such
Debt shall be incurred or issued, prepay the Advances pursuant to, and in the
order of priority set forth in, Section 2.06(b)(ii) in an aggregate principal
amount equal to the amount of the Net Cash Proceeds received by the Borrower or
any of its Subsidiaries to the extent required to do so under Section
2.06(b)(ii), (B) such Lien shall be subordinated to the Liens created under the
Loan Documents on terms acceptable to the Required Lenders and (C) the Required
Lenders shall otherwise permit the creation, incurrence, assumption or existence
of such Lien and, to the extent not otherwise permitted under Section 5.02(b),
of such Debt or (v) amend this Section 8.01 and (b) no amendment, waiver or
consent shall, unless in writing and signed by the Required Lenders and each
Lender that has a Commitment under the Term A Facility, Term B Facility or
Working Capital Facility if affected by such amendment, waiver or consent, (i)
increase the commitments of such Lender or subject such Lender to any additional
obligations, (ii) reduce the principal of, or interest on, the Notes held by
such Lender or any fees or other amounts payable hereunder to such Lender, (iii)
postpone any date fixed for any payment of principal of, or interest on, the
Notes held by such Lender or any fees or other amounts payable hereunder to such
Lender (including, without limitation, the scheduled amortization payments set
forth in Section 2.04) or (iv) waive, amend or change the order of application
of any prepayment set forth in Section 2.06 in any manner that materially
affects such Lender; provided further that no amendment, waiver or consent
shall, unless in writing and signed by the Swing Line Bank or the Issuing Bank,
as the case may be, in addition to the Lenders required above to take such
action, affect the rights or obligations of the Swing Line Bank or of the
Issuing Bank, as the case may be, under this Agreement; and provided further
that no amendment, waiver or consent shall, unless in
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writing and signed by the Administrative Agent in addition to the Lenders
required above to take such action, affect the rights or duties of the
Administrative Agent under this Agreement.
SECTION 8.02. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing (including
telegraphic, telecopy or telex communication) and mailed, telegraphed,
telecopied, telexed or delivered, if to the Borrower, at its address at 0000 Xxx
Xxxx Xxxx, Xxxxxxxxx, Xxxxxxxxx 00000 (Telecopier No.: (000) 000-0000,
Attention: X. X. XxXxxxxx, Xx.; if to any Initial Lender or the Initial Issuing
Bank, at its Domestic Lending Office specified opposite its name on Schedule I
hereto; if to any other Lender Party, at its Domestic Lending Office specified
in the Assignment and Acceptance pursuant to which it became a Lender Party; and
if to the Administrative Agent, at its address at 000 Xxxxx Xxxxxx, Xxxxxxxxxxxx
Xxxxxx, Xxxxxxxxx, XX 00000, Attention: Corporate Credit Services, Ref:
Shoney's; or, as to each party, at such other address as shall be designated by
such party in a written notice to the other parties or, as to the Borrower or
the Administrative Agent, at such other address as shall be designated by such
party in a written notice to the other parties and, as to each other party, at
such other address as shall be designated by such party in a written notice to
the Borrower and the Administrative Agent. All such notices and other
communications shall, when mailed, telegraphed, telecopied or telexed, be
effective three days after being deposited in the mails, or, if sent by
overnight courier, on the first Business Day following the day of delivery to
the overnight courier, or when delivered to the telegraph company, transmitted
by telecopier or confirmed by telex answerback, respectively, except that
notices and communications to the Administrative Agent pursuant to Article II,
III or VII shall not be effective until received by the Administrative Agent.
Delivery by telecopier of an executed counterpart of any amendment or waiver of
any provision of this Agreement or the Notes or of any Exhibit hereto to be
executed and delivered hereunder shall be effective as delivery of a manually
executed counterpart thereof.
SECTION 8.03. No Waiver; Remedies. No failure on the part of
any Lender Party or the Administrative Agent to exercise, and no delay in
exercising, any right hereunder or under any Note shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right preclude any
other or further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
SECTION 8.04. Costs, Expenses. (a) The Borrower agrees to pay
on demand (i) all reasonable costs and expenses of the Administrative Agent in
connection with the preparation, execution, delivery, administration,
modification and amendment of the Loan Documents (including, without limitation,
(A) all due diligence, collateral review, syndication, transportation, computer,
duplication, appraisal, audit, insurance, consultant, search, filing and
recording fees and expenses and (B) the reasonable fees and expenses of
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counsel for the Administrative Agent with respect thereto, with respect to
advising the Administrative Agent as to its rights and responsibilities, or the
perfection, protection or preservation of rights or interests, under the Loan
Documents, with respect to negotiations with any Loan Party or with other
creditors of any Loan Party or any of its Subsidiaries arising out of any
Default or any events or circumstances that may give rise to a Default and with
respect to presenting claims in or otherwise participating in or monitoring any
bankruptcy, insolvency or other similar proceeding involving creditors' rights
generally and any proceeding ancillary thereto) and (ii) all reasonable costs
and expenses of the Administrative Agent and the Lender Parties in connection
with the enforcement of the Loan Documents, whether in any action, suit or
litigation, any bankruptcy, insolvency or other similar proceeding affecting
creditors' rights generally (including, without limitation, the reasonable fees
and expenses of counsel for the Administrative Agent and each Lender Party with
respect thereto).
(b) The Borrower agrees to indemnify and hold harmless the
Administrative Agent, each Lender Party and each of their Affiliates and their
officers, directors, trustees, employees, agents and advisors (each, an
"Indemnified Party") from and against any and all claims, damages, losses,
liabilities and expenses (including, without limitation, reasonable fees and
expenses of counsel) that may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or by
reason of (including, without limitation, in connection with any investigation,
litigation or proceeding or preparation of a defense in connection therewith)
(i) the Facilities, the actual or proposed use of the proceeds of the Advances
or the Letters of Credit, the Loan Documents or any of the transactions
contemplated thereby, or (ii) the actual or alleged presence of Hazardous
Materials on any property of any Loan Party or any of its Subsidiaries or any
Environmental Action relating in any way to any Loan Party or any of its
Subsidiaries, except to the extent such claim, damage, loss, liability or
expense is found in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party's gross negligence or
willful misconduct. In the case of an investigation, litigation or other
proceeding to which the indemnity in this Section 8.04(b) applies, such
indemnity shall be effective whether or not such investigation, litigation or
proceeding is brought by any Loan Party, its directors, shareholders or
creditors or an Indemnified Party or any Indemnified Party is otherwise a party
thereto and whether or not the transactions contemplated hereby are consummated.
The Borrower also agrees that no Indemnified Party shall have any liability
(whether direct or indirect, in contract or tort or otherwise) to the Borrower
or any of its Subsidiaries or Affiliates or to any security holders or creditors
of the Borrower or any of its Subsidiaries arising out of, related to or in
connection with the transactions contemplated under the Loan Documents, except
for direct, as opposed to consequential, damages determined in a final
nonappealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party's gross negligence or willful misconduct.
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(c) If any payment of principal of, or Conversion of, any
Eurodollar Rate Advance is made by the Borrower to or for the account of a
Lender Party other than on the last day of the Interest Period for such Advance,
as a result of a payment or Conversion pursuant to Section 2.09(b)(i), 2.10(a)
or 2.10(d), acceleration of the maturity of the Notes pursuant to Section 6.01
or for any other reason, the Borrower shall, upon demand by such Lender Party
(with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender Party any amounts required
to compensate such Lender Party for any additional losses, costs or expenses
that it may reasonably incur as a result of such payment, including, without
limitation, any loss (including loss of anticipated profits), cost or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by any Lender Party to fund or maintain such Advance.
(d) If any Loan Party fails to pay when due any costs,
expenses or other amounts payable by it under any Loan Document, including,
without limitation, fees and expenses of counsel and indemnities, such amount
may be paid on behalf of such Loan Party by the Administrative Agent or any
Lender Party, in its sole discretion.
(e) Without prejudice to the survival of any other agreement
of any Loan Party hereunder or under any other Loan Document, the agreements and
obligations of the Borrower contained in Sections 2.10 and 2.12 and this Section
8.04 shall survive the payment in full of principal, interest and all other
amounts payable hereunder and under any of the other Loan Documents.
SECTION 8.05. Right of Set-off. Upon (a) the occurrence and
during the continuance of any Event of Default and (b) the making of the request
or the granting of the consent specified by Section 6.01 to authorize the
Administrative Agent to declare the Notes due and payable pursuant to the
provisions of Section 6.01, each Lender Party and each of its respective
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and otherwise apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender Party or such
Affiliate to or for the credit or the account of the Borrower against any and
all of the Obligations of the Borrower now or hereafter existing under this
Agreement and the Note or Notes (if any) held by such Lender Party, irrespective
of whether such Lender Party shall have made any demand under this Agreement or
such Note or Notes and although such obligations may be unmatured. Each Lender
Party agrees promptly to notify the Borrower after any such set-off and
application; provided, however, that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of each Lender
Party and its respective Affiliates under this Section are in addition to other
rights and remedies (including, without limitation, other rights of set-off)
that such Lender Party and its respective Affiliates may have.
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SECTION 8.06. Binding Effect. This Agreement shall become
effective when it shall have been executed by the Borrower and the
Administrative Agent and when the Administrative Agent shall have been notified
by each Initial Lender and the Initial Issuing Bank that such Initial Lender and
the Initial Issuing Bank has executed it and thereafter shall be binding upon
and inure to the benefit of the Borrower, the Administrative Agent and each
Lender Party and their respective successors and assigns, except that the
Borrower shall not have the right to assign its rights hereunder or any interest
herein without the prior written consent of the Lender Parties.
SECTION 8.07. Assignments and Participations. (a) Each Lender
may assign to one or more Eligible Assignees all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Commitment or Commitments, the Advances owing to it and the Note
or Notes held by it); provided, however, that (i) each such assignment shall be
of a uniform, and not a varying, percentage of all rights and obligations under
and in respect of one or more of the Facilities, (ii) except in the case of an
assignment to a Person that, immediately prior to such assignment, was a Lender
or an assignment of all of a Lender's rights and obligations under this
Agreement, the amount of the Commitment of the assigning Lender being assigned
pursuant to each such assignment (determined as of the date of the Assignment
and Acceptance with respect to such assignment) shall in no event be less than
$5,000,000, (iii) each such assignment shall be to an Eligible Assignee, (iv) no
such assignments shall be permitted without the consent of the Administrative
Agent (which consent shall not be unreasonably withheld) until the
Administrative Agent shall have notified the Lender Parties that syndication of
the Commitments hereunder has been completed, and (v) the parties to each such
assignment shall execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance, together
with any Note or Notes subject to such assignment and a processing and
recordation fee of $3,500.
(b) Upon such execution, delivery, acceptance and recording,
from and after the effective date specified in such Assignment and Acceptance,
(x) the assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, have the rights and obligations of a Lender or
Issuing Bank, as the case may be, hereunder and (y) the Lender or Issuing Bank
assignor thereunder shall, to the extent that rights and obligations hereunder
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights (other than its rights under Sections 2.10, 2.12 and 8.04 (and other
similar provisions of the other Loan Documents that are specified under the
terms of such other Loan Documents to survive the payment in full of the
Obligations of the Loan Parties under or in respect of the Loan Documents) to
the extent any claim thereunder relates to an event arising prior to such
assignment) and be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all or the remaining portion
of an assigning Lender's or
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Issuing Bank's rights and obligations under this Agreement, such Lender or
Issuing Bank shall cease to be a party hereto).
(c) By executing and delivering an Assignment and Acceptance,
the Lender Party assignor thereunder and the assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender Party makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, this Agreement or any other Loan Document or any
other instrument or document furnished pursuant hereto or thereto; (ii) such
assigning Lender Party makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or any
other Loan Party or the performance or observance by any Loan Party of any of
its obligations under any Loan Document or any other instrument or document
furnished pursuant thereto; (iii) such assignee confirms that it has received a
copy of this Agreement, together with copies of the financial statements
referred to in Section 4.01 and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (iv) such assignee will, independently and
without reliance upon the Administrative Agent, such assigning Lender Party or
any other Lender Party and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (v) such assignee confirms
that it is an Eligible Assignee; (vi) such assignee appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Loan Documents as are delegated to the
Administrative Agent by the terms hereof, together with such powers and
discretion as are reasonably incidental thereto; and (vii) such assignee agrees
that it will perform in accordance with their terms all of the obligations which
by the terms of this Agreement are required to be performed by it as a Lender or
Issuing Bank, as the case may be.
(d) The Administrative Agent, acting for this purpose (but
only for this purpose) as the agent of the Borrower, shall maintain at its
address referred to in Section 8.02 a copy of each Assignment and Acceptance
delivered to and accepted by it and a register for the recordation of the names
and addresses of the Lender Parties and the Commitment of, and principal amount
of the Advances owing to, each Lender Party from time to time (the "Register").
The entries in the Register shall be conclusive and binding for all purposes,
absent manifest error, and the Borrower, the Administrative Agent and the Lender
Parties shall treat each Person whose name is recorded in the Register as a
Lender Party hereunder for all purposes of this Agreement. The Register shall be
available for
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inspection by the Borrower or any Lender Party at any reasonable time and from
time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender Party and an assignee, together with any Note or Notes
subject to such assignment, the Administrative Agent shall, if such Assignment
and Acceptance has been completed and is in substantially the form of Exhibit C
hereto, (i) accept such Assignment and Acceptance, (ii) record the information
(the "Ownership Information") contained therein in the Register and (iii) give
prompt notice thereof to the Borrower. Any transfer of an ownership interest in
any Advance, including any right to principal or interest payable with respect
to the Advance, shall be subject to and conditioned upon the due recordation of
such transfer and the Ownership Information with respect to the transferee in
the Register and such transfer shall be effective only upon such recordation
(and not prior thereto). In the case of any assignment by a Lender, within five
Business Days after its receipt of such notice, the Borrower, at its own
expense, shall execute and deliver to the Administrative Agent in exchange for
the surrendered Note or Notes a new Note to the order of such Eligible Assignee
in an amount equal to the Commitment assumed by it pursuant to such Assignment
and Acceptance and, if the assigning Lender has retained a Commitment hereunder,
a new Note to the order of the assigning Lender in an amount equal to the
Commitment retained by it hereunder. Such new Note or Notes shall be in an
aggregate principal amount equal to the aggregate principal amount of such
surrendered Note or Notes, shall be dated the effective date of such Assignment
and Acceptance and shall otherwise be in substantially the form of Exhibit X-0,
X-0 or A-3 hereto, as the case may be.
(f) The Issuing Bank may assign to an Eligible Assignee all of
its rights and obligations under the undrawn portion of its Letter of Credit
Commitment at any time; provided, however, that (i) each such assignment shall
be to an Eligible Assignee and (ii) the parties to each such assignment shall
execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance, together with a
processing and recordation fee of $3,500.
(g) Each Lender Party may sell participations to one or more
Persons (other than any Loan Party or any of its Affiliates) in or to all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitments, the Advances owing to it and
the Note or Notes (if any) held by it); provided, however, that (i) such Lender
Party's obligations under this Agreement (including, without limitation, its
Commitments) shall remain unchanged, (ii) such Lender Party shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender Party shall remain the holder of any such Note for all
purposes of this Agreement, and (iv) the Borrower, the Administrative Agent and
the other Lender Parties shall continue to deal solely and directly with such
Lender Party in connection with such Lender Party's rights and obligations under
this Agreement and (v) no participant under any
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such participation shall have any right to approve any amendment or waiver of
any provision of any Loan Document, or any consent to any departure by any Loan
Party therefrom, except to the extent that such amendment, waiver or consent
would reduce the principal of, or interest on, the Notes or any fees or other
amounts payable hereunder, in each case to the extent subject to such
participation, postpone any date fixed for any payment of principal of, or
interest on, the Notes or any fees or other amounts payable hereunder, in each
case to the extent subject to such participation, or release all or
substantially all of the Collateral or release any of the Subsidiary Guarantors
from any of their Obligations under the Loan Documents.
(h) Any Lender Party may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.07, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower furnished to such Lender
Party by or on behalf of the Borrower; provided, however, that, prior to any
such disclosure, the assignee or participant or proposed assignee or participant
shall agree to preserve the confidentiality of any Confidential Information
received by it from such Lender Party.
(i) Notwithstanding any other provision set forth in this
Agreement, any Lender Party may (without the consent of the Administrative Agent
or the Borrower) at any time (i) create a security interest in all or any
portion of its rights under this Agreement (including, without limitation, the
Advances owing to it and the Note or Notes held by it) in favor of any Federal
Reserve Bank in accordance with Regulation A of the Board of Governors of the
Federal Reserve System, or (ii) pledge its interest in all or any portion of its
rights under this Agreement to its trustee in support of its obligations to such
trustee.
SECTION 8.08. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 8.09. No Liability of the Issuing Bank. The Borrower
assumes all risks of the acts or omissions of any beneficiary or transferee of
any Letter of Credit with respect to its use of such Letter of Credit. Neither
the Issuing Bank nor any of its officers or directors shall be liable or
responsible for: (a) the use that may be made of any Letter of Credit or any
acts or omissions of any beneficiary or transferee in connection therewith; (b)
the validity, sufficiency or genuineness of documents, or of any endorsement
thereon, even if such documents should prove to be in any or all respects
invalid, insufficient, fraudulent or forged; (c) payment by the Issuing Bank
against presentation of documents that do not comply with the terms of a Letter
of Credit, including failure of any documents to
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bear any reference or adequate reference to the Letter of Credit; or (d) any
other circumstances whatsoever in making or failing to make payment under any
Letter of Credit, except that the Borrower shall have a claim against the
Issuing Bank, and the Issuing Bank shall be liable to the Borrower, to the
extent of any direct, but not consequential, damages suffered by the Borrower
that the Borrower proves were caused by (i) the Issuing Bank's willful
misconduct or gross negligence in determining whether documents presented under
any Letter of Credit comply with the terms of the Letter of Credit or (ii) the
Issuing Bank's willful failure to make lawful payment under a Letter of Credit
after the presentation to it of a draft and certificates strictly complying with
the terms and conditions of the Letter of Credit. In furtherance and not in
limitation of the foregoing, 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.
SECTION 8.10. Confidentiality. Neither the Administrative
Agent nor any Lender Party shall disclose any Confidential Information to any
Person without the consent of the Borrower, other than (a) to the Administrative
Agent's or such Lender Party's Affiliates and their officers, directors,
employees, agents and advisors and to actual or prospective Eligible Assignees
and participants, and then upon the recipient's agreement to be bound by the
terms of this Section 8.10 as if it were a Lender Party, (b) as required by any
law, rule or regulation or judicial process and (c) as requested or required by
any state, federal or foreign authority or examiner regulating banks or banking.
SECTION 8.11. Jurisdiction, Etc. (a) Each of the parties
hereto hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or any of the other Loan Documents to which it is a
party, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in any such
New York State court or, to the extent permitted by law, in such federal court.
Each of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that any party may otherwise have to bring any
action or proceeding relating to this Agreement or any of the other Loan
Documents in the courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or any of the
other Loan Documents to which it is a party in any New York State or federal
court. Each of the parties hereto hereby irrevocably waives, to
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the fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
SECTION 8.12. Governing Law. This Agreement and the Notes
shall be governed by, and construed in accordance with, the laws of the State
of New York.
SECTION 8.13. Designation as Senior Indebtedness. The Borrower
hereby acknowledges and agrees that its Obligations under and in respect of the
Loan Documents shall be "Designated Senior Indebtedness of the Company" for all
purposes of the Indenture (including, without limitation, Article Fourteen
thereof).
SECTION 8.14. Waiver of Jury Trial. Each of the Borrower, the
Administrative Agent and the Lender Parties irrevocably waives all right to
trial by jury in any action, proceeding or counterclaim (whether based on
contract, tort or otherwise) arising out of or relating to any of the Loan
Documents, the Advances or the actions of the Administrative Agent or any Lender
Party in the negotiation, administration, performance or enforcement thereof.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
SHONEY'S, INC.
By
---------------------------------
Title:
NATIONSBANK, N.A., as Administrative
Agent
By
---------------------------------
Title:
NATIONSBANC XXXXXXXXXX
SECURITIES, INC., as Syndication
Agent
By
---------------------------------
Title:
INITIAL ISSUING BANK
NATIONSBANK, N.A.,
as Initial Issuing Bank
By
---------------------------------
Title:
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SWING LINE BANK
FIRST AMERICAN NATIONAL BANK,
as Swing Line Bank
By
---------------------------------
Title:
INITIAL LENDERS
NATIONSBANK, N.A.
By
---------------------------------
Title:
GENERAL ELECTRIC CAPITAL
CORPORATION
By
---------------------------------
Title:
PRIME INCOME TRUST
By
---------------------------------
Title:
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119
XXXXXXX XXXXX SENIOR FLOATING
RATE FUND
By
---------------------------------
Title:
CRESCENT/MACH I
PARTNERS, L.P.,
By: TCW Asset Management
Company, as Investment Manager
By
---------------------------------
Title:
XXX XXXXXX AMERICAN
CAPITAL PRIME
RATE INCOME TRUST
By
---------------------------------
Title:
FIRST AMERICAN NATIONAL BANK
By
---------------------------------
Title:
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120
THE LONG-TERM CREDIT
BANK OF JAPAN, LTD.
By
---------------------------------
Title:
CIBC, INC.
By
---------------------------------
Title:
XXXXXX FINANCIAL, INC.
By
---------------------------------
Title:
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121
TRANSAMERICA BUSINESS CREDIT
CORPORATION
By
---------------------------------
Title:
DEUTSCHE FINANCIAL SERVICES
CORPORATION
By
---------------------------------
Title:
GREEN TREE FINANCIAL SERVICING
CORPORATION
By
---------------------------------
Title:
THE TORONTO DOMINION BANK
By
---------------------------------
Title:
128
SCHEDULE I
COMMITMENTS AND APPLICABLE LENDING OFFICES
============================================================================================================================
NAME OF LENDER TERM A TERM B WORKING CAPITAL LETTER OF CREDIT SWINGLINE
COMMITMENT COMMITMENT COMMITMENT COMMITMENT COMMITMENT
============================================================================================================================
NationsBank, N.A. 31,547,619.04 104,166,666.67 39,285,714.29 35,000,000.00
----------------------------------------------------------------------------------------------------------------------------
CIBC, Inc. 25,000,000.00 0.00 0.00
----------------------------------------------------------------------------------------------------------------------------
TransAmerica Business
Credit Corporation 14,285,714.29 0.00 10,714,285.71
----------------------------------------------------------------------------------------------------------------------------
The Long-Term Credit
Bank of Japan, Ltd. 4,285,714.29 10,000,000.00 3,214,285.71
----------------------------------------------------------------------------------------------------------------------------
First American National
Bank 7,142,857.14 0.00 5,357,142.86 15,000,000.00
----------------------------------------------------------------------------------------------------------------------------
Deutsche Financial Services 5,714,285.71 0.00 4,285,714.29
----------------------------------------------------------------------------------------------------------------------------
General Electric Capital
Corporation 5,000,000.00 5,000,000.00 0.00
----------------------------------------------------------------------------------------------------------------------------
Xxxxxx Financial Inc. 7,500,000.00 0.00 0.00
----------------------------------------------------------------------------------------------------------------------------
The Toronto-Dominion
Bank 0.00 25,000,000.00 0.00
----------------------------------------------------------------------------------------------------------------------------
Xxx Xxxxxx American
Capital 0.00 15,000,000.00 0.00
----------------------------------------------------------------------------------------------------------------------------
Prime Income Trust 0.00 10,000,000.00 0.00
----------------------------------------------------------------------------------------------------------------------------
Xxxxxxx Xxxxx Senior
Floating Rate Fund 0.00 5,000,000.00 0.00
----------------------------------------------------------------------------------------------------------------------------
Crescent/Mach I Partners, L.P. 0.00 5,000,000.00 0.00
----------------------------------------------------------------------------------------------------------------------------
Green Tree Financial
Servicing Corporation 6,666,666.67 13,333,333.33 5,000,000.00
============================================================================================================================
129
SCHEDULE II
APPLICABLE MARGIN AND
APPLICABLE PERCENTAGE
TERM A ADVANCES AND WORKING CAPITAL ADVANCES
Applicable Margin Applicable Margin Applicable Applicable
Leverage Ratio for Eurodollar for Prime Commitment Letter of Credit
Level Rate Advance Rate Advance Fee Percentage Fee Percentage
----- ------------ ------------ -------------- --------------
Xxxxx 0
4.75:1 or greater 2.75% 1.75% 0.50% 2.75%
Xxxxx 0
4.0:1 or greater but
less than 4.75:1 2.50% 1.50% 0.50% 2.50%
Xxxxx 0
3.5:1 or greater but
less than 4.0:1 2.25% 1.25% 0.50% 2.25%
Xxxxx 0
3.0:1 or greater but
less than 3.5:1 2.00% 1.00% 0.375% 2.00%
Xxxxx 0
2.5:1 or greater but
less than 3.0:1 1.75% 0.75% 0.25% 1.75%
Xxxxx 0
less than 2.5:1 1.50% 0.50% 0.25% 1.50%
TERM B ADVANCES
Applicable Margin Applicable Margin
for Eurodollar for Prime
Level Rate Advances Rate Advances
----- ------------- -------------
Level 1
4.75:1 or greater 3.25% 2.25%
Xxxxx 0
4.0:1 or greater
but less than 4.75 3.00% 2.00%
Xxxxx 0
3.5:1 or greater but
less than 4.0:1 2.75% 1.75%
Xxxxx 0
less than 3.5:1 2.50% 1.50%
