CREDIT AGREEMENT
THIS CREDIT AGREEMENT dated as of June 19, 1997 ("this
Agreement") is entered into by XXXXXXXX FRESH COOKING, INC., a
Georgia corporation (the "Borrower") and AMSOUTH BANK OF ALABAMA,
an Alabama banking corporation (the "Lender").
Recitals
A. The Borrower has applied to the Lender for a revolving
credit facility in an aggregate principal amount outstanding not
to exceed $30,000,000 (the "Revolving Facility") the proceeds of
which are to be used by the Borrower for working capital, general
corporate purposes and letters of credit issued in the ordinary
course of business.
B. The Lender is willing to make the Revolving Facility
available to the Borrower only if, among other things, the
Borrower enters into this Agreement and the other Loan Documents
(as hereinafter defined).
Agreement
NOW, THEREFORE, in consideration of the foregoing Recitals,
and to induce the Lender to make the Revolving Facility
available, the Borrower and the Lender agree as follows:
ARTICLE 1
RULES OF CONSTRUCTION AND
DEFINITIONS
SECTION 1.1 For the purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise
requires:
All accounting terms not otherwise defined herein have
the meanings assigned to them, and all computations herein
provided or shall be made, in accordance with generally
accepted accounting principles applied on a consistent
basis. All references herein to "generally accepted
accounting principles" refer to such principles as they
exist at the date of application thereof; provided, however,
that if any change in generally accepted accounting
principles after the Closing Date could, in the reasonable
judgment of the Lender, affect adversely the interests of
the Lender in the interpretation or calculation of the
financial covenants or other provisions of this Agreement or
the other Loan Documents, such change shall not be effective
for purposes of this Agreement or the other Loan Documents
unless and until the provisions of this Agreement and the
other Loan Documents that could be adversely affected by
such change have been amended by the mutual agreement of the
Borrower and the Lender so as to insure that the interests
of the Lender will not be adversely affected by such change.
All references in this Agreement to designated
"Articles", "Sections" and other subdivisions or to lettered
Exhibits or numbered Schedules are to the designated
Articles, Sections and other subdivisions hereof and the
lettered Exhibits and numbered Schedules annexed hereto
unless the context otherwise clearly indicates. All
Article, Section, other subdivision and Exhibit captions
herein are used for reference only and in no way limit or
describe the scope or intent of, or in any way affect, this
Agreement.
The terms "herein", "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole
and not to any particular Article, Section or other
subdivision.
The terms "include," "including" and similar terms
shall be construed as if followed by the phrase "without
being limited to."
The terms defined in this article have the meanings
attributed to them in this article. Singular terms shall
include the plural as well as the singular, and vice versa.
Words of masculine, feminine or neuter gender shall mean and
include the correlative words of other genders.
All recitals set forth in this Agreement are hereby
incorporated in the operative provisions of this Agreement.
No inference in favor of or against any party shall be
drawn from the fact that such party or its counsel has
drafted any portion hereof.
All references herein to a separate instrument are to
such separate instrument as the same may be amended or
supplemented from time to time pursuant to the applicable
provisions thereof.
If the Borrower now or hereafter has any Subsidiaries,
all computations required in connection with the covenants
contained in Article 7 and all references to events or
conditions having a "material adverse effect" on the
Borrower shall be made for the Borrower and its Subsidiaries
on a combined or consolidated basis, after elimination of
intercompany items, and all financial statements, reports
and certificates required hereunder shall be prepared on the
same basis.
Actual/360 Basis shall mean a method of computing
interest or other charges hereunder on the basis of an
assumed year of 360 days for actual number of days elapsed,
meaning that interest or other charges accrued for each day
will be computed by multiplying the rate applicable on that
day by the unpaid principal balance (or other relevant sum)
on that day and dividing the result by 360.
Advance shall mean a borrowing under the Revolving
Facility pursuant to Section 0.
Affiliate of any specified person shall mean any person
directly or indirectly controlling or controlled by or under
direct or indirect common control with such specified
person. For purposes of this definition "control" when used
with respect to any specified person means the power to
direct the management and policies of such person, directly
or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to
the foregoing.
Agreement shall mean, on any date, this Credit
Agreement, as originally in effect on the Closing Date and
as thereafter from time to time amended, supplemented,
restated or otherwise modified and in effect on such date.
Application shall have the meaning attributed to that
term in Section 0.
Authorized Representative shall mean the officer or
officers of the Borrower that are duly authorized to act for
the Borrower in the specified capacity under the Governing
Documents of the Borrower or applicable law.
Borrower shall mean Xxxxxxxx Fresh Cooking, Inc., a
Georgia corporation.
Business Day shall mean (a) any day on which commercial
banks are not authorized or required to close in Birmingham,
Alabama and (b) if such day relates to the giving of notices
or quotes in connection with a LIBOR Quote or to a borrowing
of, a payment or prepayment of principal of or interest on,
or an Interest Period for, a LIBOR-Based Rate Segment or a
notice by the Borrower with respect to any such borrowing,
payment, prepayment or Interest Period, any day on which
dealings in Dollar deposits are carried out in the London
interbank market.
Capital Expenditures shall mean any expenditure for
fixed assets or that is properly chargeable to capital
account in accordance with generally accepted accounting
principles.
Closing Date shall mean the date of this Agreement.
Credit Obligations shall mean the Revolving Facility
Obligations, the Letter of Credit Obligations and all other
obligations and debts owing to the Lender, and arising under
the terms of this Agreement, the Note, the Applications and
the other Loan Documents, whether now or hereafter incurred,
existing or arising, including the principal amount of all
Advances, all Letter of Credit Borrowings and all
Reimbursement Obligations, any sums expended by the Lender
in exercising the rights and remedies described in Section
0, all accrued interest on Advances and Reimbursement
Obligations, and all costs, fees, charges and expenses
incurred and payable in connection therewith, including fees
payable under the terms of, or in connection with, this
Agreement, all other obligations and debts owing to the
Lender arising in connection with, ancillary to, or in
support of Advances and Letter of Credit Borrowings, and all
renewals, extensions, modifications and amendments of any of
the foregoing, whether or not any renewal, extension,
modification or amendment agreement is executed in
connection therewith.
Debt shall mean (i) the Credit Obligations and all
other indebtedness, whether or not represented by bonds,
debentures, notes or other securities, for the repayment of
borrowed money or for reimbursement of drafts drawn or
available to be drawn under letters of credit and banker's
acceptances issued for the account of such person, (ii) all
indebtedness deferred for the payment of the purchase price
of property or assets purchased, (iii) all capitalized lease
obligations, (iv) all indebtedness secured by any mortgage
or pledge of, or Lien on, property of such person, whether
or not the indebtedness secured thereby shall have been
assumed, (v) Guaranteed Obligations, (vi) all obligations
with respect to any conditional sale contract or title
retention agreement, and (vii) all obligations with respect
to interest rate swap agreements.
Default shall mean an Event of Default or an event that
with notice or lapse of time or both would become an Event
of Default.
Dollars and the symbol $ shall mean dollars
constituting legal tender for the payment of public and
private debts in the United States of America.
EBITDA for any period shall mean Net Income (or the net
deficit, if expenses and charges exceed revenues and other
proper income credits) after taxes for such period, plus
amounts that have been deducted for (i) depreciation, (ii)
amortization, (iii) Interest Expense and (iv) income and
profit taxes in determining Net Income for such period.
EBITDAR for any period shall mean Net Income (or the
net deficit, if expenses and charges exceed revenues and
other proper income credits) after taxes for such period,
plus amounts that have been deducted for (i) Interest
Expense, (ii) Operating Lease Payments, (iii) depreciation,
(iv) amortization and (v) income and profit taxes in
determining Net Income for such period.
ERISA shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time, and the
regulations promulgated and rulings issued thereunder.
ERISA Affiliate shall mean, as of any date, any
corporation, partnership or other trade or business (whether
or not incorporated) under common control with the Borrower
within the meaning of Sections 414(b), (c) or (m) of the
Internal Revenue Code, as amended.
Event of Default shall have the meaning assigned to
such term in Article 0 hereof.
Fixed Charge Coverage Ratio shall mean as of the last
day of any fiscal quarter, beginning with the fiscal quarter
ending August 31, 1997, the ratio of:
(i) the sum of (y) EBITDAR for the
applicable period then ending minus (z) dividends
actually paid during such period; to
(ii) the aggregate (without duplication) of
the following, all determined in accordance with
generally accepted accounting principles for the
applicable period then ending: (a) Interest Expense for
such period, (b) Operating Lease Payments for such
period, (c) Principal Maturities (not including the
Loans) for the next succeeding four fiscal quarters
following the date of determination, and (d) 20% of the
outstanding Loans during such period.
Funded Debt shall mean all Debt maturing by its terms
more than one year after, or which is renewable or
extendible at the option of the obligor to a date more than
one year after, the date as of which Funded Debt is being
determined.
Governing Documents of the Borrower shall mean all
organizational and governing documents applicable thereto
including its articles of incorporation and bylaws, and all
applicable resolutions or other directions of the directors,
shareholders, officers, or other relevant persons
comprising, owning, managing or operating the Borrower.
Governmental Authority shall mean any national,
federal, state, county, municipal or other agency,
authority, department, commission, bureau, board, court or
instrumentality thereof.
Governmental Requirements shall mean all laws, rules,
regulations, requirements, ordinances, judgments, decrees,
codes and orders of any Governmental Authority applicable to
the Borrower.
Guaranteed Obligations of any person shall mean all
guaranties (including guaranties of guaranties and
guaranties of dividends and other monetary obligations),
endorsement, assumptions and other contingent obligations
with respect to, or to purchase or otherwise pay or acquire,
Debt of others.
Hazardous Material shall mean (a) any asbestos or
insulation or other material composed of or containing
asbestos and (b) any hazardous, toxic or dangerous waste,
substance or material defined as such in (or for purposes
of) the Comprehensive Environmental Response, Compensation
and Liability Act, any so-called "Superfund" or "Superlien"
law, or any other Governmental Requirement regulating,
relating to, or imposing liability or standards of conduct
concerning, any hazardous, toxic or dangerous waste,
substance or material as at the Closing Date or at any time
thereafter in effect. This definition refers to the amounts
of such waste, substance or material present at a particular
facility in excess of the reportable quantity or threshold
planning quantity, if applicable, for such waste, substance
or material as may be listed in such act, law or other
Governmental Requirement described in the foregoing
sentence, as at the Closing Date or at any time thereafter
in effect.
Interest Expense shall mean all interest incurred on
Debt (including obligations payable under capitalized leases
attributable to interest) during the period in question.
Interest Period shall mean each period commencing on
the date a LIBOR Loan is made or the last day of the next
preceding Interest Period for such LIBOR Loan and ending on
the numerically corresponding day in the first, second,
third, or sixth calendar month thereafter, as the Borrower
may select as provided in Section 0 hereof, except that each
Interest Period that commences on the last Business Day of a
calendar month (or on any day for which there is no
numerically corresponding day in the appropriate subsequent
calendar month) shall end on the last Business Day of the
appropriate subsequent calendar month.
Notwithstanding the foregoing: (i) if any Interest Period
for any LIBOR Loan would otherwise end after the Termination
Date, such Interest Period shall end on the Termination
Date; (ii) each Interest Period that would otherwise end on
a day which is not a Business Day shall end on the next
succeeding Business Day (or, if such next succeeding
Business Day falls in the next succeeding calendar month, on
the next preceding Business Day); and (iii) notwithstanding
clauses (i) and (ii) above, no Interest Period for any LIBOR
Loan shall have a duration of less than one month and, if
the Interest Period for any LIBOR Loan would otherwise be a
shorter period, such LIBOR Loan shall not be available
hereunder for such period.
Letter of Credit Borrowings shall mean as of any date
the maximum aggregate amount that the Lender could be
required to pay under drafts that could be, or have been,
properly drawn in compliance with the terms of all Letters
of Credit outstanding on such date, other than drafts that
have been drawn and paid.
Letter of Credit Obligations shall mean (a) the Letter
of Credit Borrowings and (b) the Reimbursement Obligations
and the Borrower's other obligations under this Agreement
and the Applications with respect to Letters of Credit or
drawings made thereunder, including obligations with respect
to all principal, interest, fees and other charges related
thereto.
Letters of Credit shall mean all letters of credit
issued on or after the Closing Date by the Lender for the
account of the Borrower under this Agreement.
Liabilities shall mean all Debt and all other items
(including taxes accrued as estimated) that, in accordance
with generally accepted accounting principles, would be
included in determining total liabilities as shown on the
liabilities side of a balance sheet.
LIBOR-Based Rate shall mean a rate per annum equal to
the LIBOR Quote plus the applicable Margin.
LIBOR-Based Rate Segment shall mean a Segment to which
the LIBOR-Based Rate is (or is proposed to be) applicable.
LIBOR Loans shall mean Loans on which interest rates
are determined on the basis of LIBOR-Based Rates.
LIBOR Quote shall mean, with respect to any time at
which the LIBOR-Based Rate is to be determined, the rate of
interest determined by the Lender by reference to the Xxxxxx-
Xxxxxx Money Center reporting service or other comparable
financial information reporting service at the time employed
by the Lender as of 10:00 a.m. (Birmingham, Alabama time)
two (2) Business Days prior to the commencement of the
Interest Period, of the cost of funds available to the
Lender from the purchase on the London interbank market of
funds in the form of time deposits in Dollars in the
approximate amount of the Segment that is to bear interest
at the LIBOR-Based Rate, having a maturity comparable to the
Interest Period during which the LIBOR-Based Rate is to be
in effect, it being expressly understood that (1) the Lender
may not actually purchase any such time deposits and obtain
such funds and (2) the LIBOR Quote will be an estimate, and
for a variety of reasons, including changing market
conditions, the actual cost of funds to the Lender (if the
Lender elects to purchase funds in the form of time deposits
on such date) might vary from the LIBOR Quote.
LIBOR Reserve Requirement shall mean the percentage
(expressed as a decimal) prescribed by the Board of
Governors of the Federal Reserve System (or any successor),
on the date on which the LIBOR-Based Rate is determined, for
determining the reserve requirements of the Lender
(including any marginal, emergency, supplemental, special or
other reserves) with respect to liabilities relating to time
deposits purchased in the London interbank market having a
maturity equal to the period during which the LIBOR-Based
Rate will be in effect and in an amount equal to the Segment
involved, without any benefit or credit for any proration,
exemptions or offsets under any now or hereafter applicable
regulations.
Lien shall mean any mortgage, pledge, assignment,
charge, encumbrance, lien, security interest or financing
lease.
Loan Documents shall mean this Agreement, the Note, the
Applications and all other agreements, instruments and
documents executed or delivered at any time in connection
with the Credit Obligations, or to evidence or secure any of
the Credit Obligations.
Loans shall mean the aggregate outstanding amount of
all Advances, Letter of Credit Borrowings and Reimbursement
Obligations, and all extensions and renewals thereof.
Margin shall mean that percent per annum set forth
below, which shall be the Margin set forth opposite the
Fixed Charge Coverage Ratio at the time of each such Advance
as determined based on the most recent financial statements
furnished to the Lender pursuant to Section 5.3 or Section
7.3 hereof:
Fixed Applicable
Charge Coverage Ratio Margin *
>2.0:1 1.00%
<2.0:1 31.55:1 1.25%
<1.55:1 31.35:1 1.625%
<1.35:1 31.15:1 2.00%
* An additional 25 basis points will be added to the
applicable Margin if the ratio calculated with respect to
the financial covenant set forth in Section 7.8(2) exceeds
3.75 to 1.0 at any time; provided, however, if the ratio
calculated with respect to such financial covenant exceeds
3.75 to 1.0 at any time after the fiscal quarter ending
August 31, 1998, the default interest rate described in
Section 3.5 shall apply in lieu of the 25 basis point
increase provided hereunder.
Margin Stock shall have the meaning attributed to that
term in Regulation U of the Federal Reserve Board, as
amended.
Maximum Credit Amount shall mean the lesser of (a) 2.25
times Operating Cash Flow of the Borrower for the
immediately preceding four fiscal quarters and
(b) $30,000,000 or such lesser amount to which the Revolving
Facility may have been reduced under Section 2.6 hereof.
Multiemployer Plan shall mean a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA.
Net Income shall mean, for any period, net income (or
loss) for the Borrower for such period, determined in
accordance with generally accepted accounting principles.
Net Worth shall mean, at any time, the net worth of the
Borrower at such time, determined in accordance with
generally accepted accounting principles.
Note shall have the meaning assigned to such term in
Section 0 hereof.
Operating Cash Flow shall mean, for any period, the
aggregate of (a) Net Income, after taxes, for such period,
plus (b) the sum of Interest Expense, federal, state, local
and other income taxes, depreciation, amortization of
intangible assets, and extraordinary losses and other
noncash expenses or charges reducing income for such period,
all to the extent taken into account in the calculation of
Net Income for such period, minus the sum of dividends
actually paid during such period and extraordinary gains and
other noncash credits increasing income for such period, all
to the extent taken into account in the calculation of Net
Income for such period.
Operating Lease Payments shall mean all amounts payable
under any lease or rental agreement (other than obligations
under capital leases) during the period in question (but
excluding, in any event, amounts paid in respect of taxes,
utilities, insurance, common area maintenance and other like
charges associated with the lease and rental of real and
personal property).
PBGC shall mean the Pension Benefit Guaranty
Corporation and any successor thereto.
Permitted Encumbrances shall mean:
(1) taxes, assessments and other governmental charges
that are not delinquent or that are being contested in good
faith by appropriate proceedings duly pursued, and for which
adequate reserves have been established and are being
maintained;
(2) mechanics', materialmen's, contractors',
landlords' or other similar liens arising in the ordinary
course of business, securing obligations that are not
delinquent or that are being contested in good faith by
appropriate action or proceedings duly pursued, and for
which adequate reserves have been established and are being
maintained to the extent required by generally accepted
accounting principles;
(3) restrictions, exceptions, reservations, easements,
conditions, limitations and other matters of record other
than Liens that do not materially adversely affect the value
or utility of the property affected thereby or the use to
which such property is being put;
(4) Liens and other matters approved in writing by the
Lender;
(5) Purchase money Liens, not exceeding the purchase
price of the property securing the Lien and any refinancings
of such amounts; and
(6) the existing Liens described in Exhibit A hereto.
Permitted Investments shall mean:
(1) direct obligations of, or obligations the payment
of which is guaranteed by, the United States of America or
an interest in any trust or fund that invests solely in such
obligations or repurchase agreements, properly secured, with
respect to such obligations;
(2) direct obligations of agencies or
instrumentalities of the United States of America having a
rating of A or higher by Standard & Poor's Ratings Group or
A2 or higher by Xxxxx'x Investors Service, Inc.;
(3) a certificate of deposit issued by, or other
interest-bearing deposits with, a financial institution
having its principal place of business in the United States
of America and having equity capital of not less than
$250,000,000;
(4) certificates of deposit issued by, or other
interest-bearing deposits with, any other financial
institution organized under the laws of the United States of
America or any state thereof, provided that such deposit is
either (i) insured by the Federal Deposit Insurance
Corporation or (ii) properly secured by such financial
institution by pledging direct obligations of the United
States of America having a market value not less than the
face amount of such deposits;
(5) prime commercial paper maturing within 270 days of
the acquisition thereof and, at the time of acquisition,
having a rating of A-1 or higher by Standard & Poor's
Ratings Group, or P-1 or higher by Xxxxx'x Investors
Service, Inc.;
(6) eligible banker's acceptances, repurchase
agreements and tax-exempt municipal bonds having a maturity
of less than one year, in each case having a rating of, or
that is the full recourse obligation of a person whose
senior debt is rated, A or higher by Standard & Poor's
Ratings Group or A2 or higher by Xxxxx'x Investors Service,
Inc.;
(7) any other investment having a rating of A or
higher or A-1 or higher by Standard & Poor's Ratings Group
or A2 or higher or P-1 or higher by Xxxxx'x Investors
Service, Inc;
(8) other investments made with the express prior
written approval of the Lender;
(9) investments in Subsidiaries or resulting from
acquisitions permitted by Section 7.8(15) below;
(10) investments received in satisfaction of disputed
trade accounts; and
(11) other investments not to exceed $250,000 in the
aggregate.
person (whether or not capitalized) shall include
natural persons, sole proprietorships, corporations, trusts,
unincorporated organizations, associations, companies,
institutions, entities, joint ventures, partnerships,
limited liability companies and Governmental Authorities.
Plan shall mean any "employee benefit plan" maintained
by or on behalf of the Borrower or any ERISA Affiliate as
defined in Section 3(3) of ERISA, including any defined
benefit pension plan, profit sharing plan, money purchase
pension plan, savings or thrift plan, stock bonus plan,
employee stock ownership plan, Multiemployer Plan or any
plan, fund, program, arrangement or practice providing for
medical (including post-retirement medical),
hospitalization, accident, sickness, disability or life
insurance benefits.
Principal Maturities means principal maturing or coming
due on Debt during the period in question.
Principal Office shall mean the principal office of the
Lender located at AmSouth-Sonat Tower, 0000 Xxxxx Xxxxxx
Xxxxx, Xxxxxxxxxx, Xxxxxxx 00000, or such other location in
Jefferson County, Alabama designated by the Lender by notice
to the Borrower.
Quarterly Payment Date shall have the meaning
attributed to that term in Section 0.
Quoted Cost of Funds Rate shall mean the per annum rate
of interest (rounded upwards, if necessary, to the nearest
1/100 of 1%) equal to the weighted average of the rates on
overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on
such day, as published for such day (or, if such day is not
a Business Day, for the immediately preceding Business Day)
by the Federal Reserve Bank of Atlanta, or, if such rate is
not so published for any day that is a Business Day, the
average of the quotations at approximately 10:00 a.m.
(Birmingham, Alabama time) on such day on such transactions
received by the Lender from three Federal funds brokers of
recognized standing selected by the Lender in its sole
discretion, plus the applicable Margin.
Reimbursement Obligation shall mean at any time the
obligation of the Borrower with respect to any Letter of
Credit to reimburse the Lender for amounts theretofore paid
by the Lender pursuant to a drawing under such Letter of
Credit.
Request for LIBOR Loan or Interest Rate Election shall
have the meaning attributed to that term in Section 0.
Revolving Facility shall mean the credit facility made
available to the Borrower by the Lender under the terms of
Article 0 in an aggregate amount of up to $30,000,000 as
reduced by the Borrower pursuant to Section 0 hereof.
Revolving Facility Obligations shall mean the
outstanding principal amount of all Advances, all interest
accrued thereon, all costs, charges, fees and expenses
payable in connection therewith and all extensions and
renewals thereof.
Segment shall mean a portion of the Advances (or all
thereof) with respect to which a particular interest rate is
(or is proposed to be) applicable. The aggregate amount of
all Advances that bear interest at the Quoted Cost of Funds
Rate shall be deemed to constitute a single Segment. The
aggregate amount of all Advances that bear interest at the
same LIBOR-Based Rate and for the same Interest Period shall
be deemed to constitute a single Segment.
Solvent shall mean, as to any person, on a particular
date, that such person has capital sufficient to carry on
its business and transactions and all business and
transactions in which it is about to engage, is able to pay
its debts as they mature, owns property having a value, both
at fair valuation and at present fair saleable value,
greater than the amount required to pay its probable
liability on existing debts as they become mature (including
known reasonable contingencies and contingencies that should
be included in notes of such person's financial statements
pursuant to generally accepted accounting principles), and
does not intend to, and does not believe that it will, incur
debts or probable liabilities beyond its ability to pay such
debts or liabilities as they mature.
Subsidiary shall mean (1) any corporation more than 50%
of whose shares of stock having general voting power under
ordinary circumstances to elect a majority of the board of
directors, managers or trustees of such corporation
(irrespective of whether or not at the time stock of any
other class or classes has or might have voting power by
reason of the happening of any contingency), are owned or
controlled directly or indirectly by the Borrower, or
(2) any partnership or limited liability company, 50% or
more of the partnership or membership interests in which are
owned or controlled, directly or indirectly, by the
Borrower, and includes entities currently or hereafter
falling within the categories described above.
Technology Leases shall mean leases relating to
hardware, software and related programming and information
services.
Termination Date shall mean the maturity date of the
Credit Obligations (which is initially June 19, 2000), as
such date may be extended from time to time pursuant to
Section 2.8 or accelerated pursuant to Section 8.1.
ARTICLE 2
REVOLVING FACILITY TERMS
SECTION 2.1 Loans.
(a) From and after the Closing Date to (but not including)
the Termination Date, on the terms and subject to the conditions
set forth in this Agreement, the Lender agrees to lend to the
Borrower, and the Borrower may borrow, repay and reborrow, an
amount not exceeding the difference between (i) the Maximum
Credit Amount in effect from time to time, and (ii) the sum of
the then outstanding (x) Letter of Credit Borrowings, (y)
Reimbursement Obligations and (z) overdrafts that the Borrower
may have with respect to any operating account established by the
Borrower with the Lender; provided, however, in no event shall
the amount available under the Revolving Facility for Advances
exceed $25,000,000 minus the aggregate outstanding amount of
Letter of Credit Borrowings and Reimbursement Obligations in
excess of $5,000,000. All Advances made by the Lender to the
Borrower under this Agreement with respect to the Revolving
Facility shall be evidenced by a promissory note for the Lender
dated the Closing Date payable to the order of the Lender, duly
executed by the Borrower, and in the aggregate maximum principal
amount of $30,000,000 (the "Note"). The date, amount, interest
rate and duration of Interest Period (if applicable) of each
Advance made by the Lender to the Borrower, and each payment made
on account of the principal thereof, shall be recorded by the
Lender on its books; provided that the failure of the Lender to
make, or any error by the Lender in making, any such recordation
shall not affect the obligations of the Borrower to make a
payment when due of any amount owing hereunder or under the Note
with respect to the Advances to be evidenced by the Note. The
Advances shall bear interest as provided in Article 0 below.
(b) If a draft drawn under any Letter of Credit is paid by
the Lender, and the Borrower fails or refuses to reimburse the
Lender for such payment, as required by Section 0, on or before
the close of business on the next Business Day after demand is
made by the Lender on the Borrower for such reimbursement, the
Borrower hereby authorizes the Lender, without the requirement of
notice to the Borrower, to satisfy the Reimbursement Obligation
created by the payment of such draft by requesting Advances by
the Lender under the Revolving Facility with interest at the
Quoted Cost of Funds Rate. Such Advances shall not be subject to
the provisions of Section 0.
SECTION 2.2 Advances. Each Advance that is not designated
by the Borrower as a LIBOR Loan shall bear interest at the Quoted
Cost of Funds Rate. All such Advances shall be made not more
frequently than once each Business Day and shall be made either
on telephone request by the Borrower to the Bank not later than
noon (Birmingham, Alabama time) on the day on which the Advance
is to be made or in accordance with the provisions of the
automated Control Account-Credit Line Service Agreement executed
by the Borrower in favor of the Lender (the "Disbursement
Agreement"). Each LIBOR Loan shall be in an amount not less than
$1,000,000 and shall be in a multiple of $500,000. Each request
for a LIBOR Loan must be in writing (which may be by facsimile)
and must be received by the Lender not later than 10:00 a.m.,
Birmingham, Alabama time, at least three Business Days prior to
the date of any LIBOR Loan. Each request for a LIBOR Loan shall
be in the form attached hereto as Exhibit B ("Request for LIBOR
Loan or Interest Rate Election") and shall specify the amount of
the LIBOR Loan requested, the date as of which the LIBOR Loan is
to be made and shall provide the interest rate information called
for in Section 0. All LIBOR Loans requested in a single Request
for LIBOR Loan or Interest Rate Election shall be subject to the
same interest rate terms. Not later than 2:00 P.M. Birmingham,
Alabama time, on the date specified for each LIBOR Loan
hereunder, the Lender shall make available the amount of the
LIBOR Loan to be made by it on such date to the Borrower by
depositing the proceeds thereof into an account with the Lender
in the name of the Borrower. The Lender's obligation to make
Advances shall terminate, if not sooner terminated pursuant to
other provisions of this Agreement, on the Termination Date. The
Lender shall have no obligation to make Advances if a Default or
Event of Default has occurred and is continuing. Each Request
for LIBOR Loan or Interest Rate Election, whether submitted under
this Section 0 in connection with a requested LIBOR Loan or under
Section 0 in connection with an interest rate election, shall be
signed by an Authorized Representative of the Borrower designated
as authorized to sign and submit Request for LIBOR Loan or
Interest Rate Election forms in the documents submitted to the
Lender pursuant to Section 6.4. The Borrower may, from time to
time, by written notice to the Lender, terminate the authority of
any Authorized Representative to submit Request for LIBOR Loan or
Interest Rate Election forms, such termination of authority to
become effective upon actual receipt by the Lender of such notice
of termination. The Borrower may from time to time authorize
other Authorized Representatives to sign and submit Request for
LIBOR Loan or Interest Rate Election forms by delivering to the
Lender a certificate of the Secretary or Assistant Secretary of
the Borrower certifying the incumbency and specimen signature of
each such Authorized Representative. The Lender shall be
entitled to rely conclusively upon the authority of any
Authorized Representative so designated by the Borrower. The
Lender may, at its option, without any request by the Borrower,
make Advances (with interest calculated at the Quoted Cost of
Funds Rate) to itself for the purpose of paying overdrafts that
the Borrower may have from time to time with respect to any
operating account established by the Borrower with the Lender and
promptly shall notify Borrower in each such event.
SECTION 2.3 Letter of Credit Borrowings.
(a) From and after the Closing Date to and including thirty
(30) Business Days prior to the Termination Date, the Lender
shall, upon the terms and subject to the conditions of this
Agreement, issue Letters of Credit from time to time for the
account of the Borrower in such amounts as may be requested by
the Borrower, up to a maximum aggregate amount of Letter of
Credit Borrowings at any one time outstanding that, when added to
(i) the then outstanding Reimbursement Obligations plus (ii) the
then outstanding Advances, would not exceed the Maximum Credit
Amount then in effect; provided, however, that no Letter of
Credit shall be issued if the issuance thereof would cause the
aggregate outstanding amount of Letter of Credit Borrowings and
Reimbursement Obligations to exceed the lesser of (y) $6,000,000
and (z) the difference between $30,000,000 and the outstanding
amount of Advances under the Revolving Facility.
(b) Each request by the Borrower for the issuance of a
Letter of Credit (an "Application") shall be submitted to the
Lender by the Borrower at least three (3) Business Days prior to
the date the Letter of Credit is to be issued, shall be on the
Lender's then standard application form for letters of credit,
shall obligate the Borrower to reimburse the Lender on demand for
any amounts drawn under a Letter of Credit and such other sums as
may be provided for therein, and shall be executed by an
Authorized Representative of the Borrower. In the event of any
conflict between the provisions of any Application and the
provisions of this Agreement, the provisions of this Agreement
shall govern.
(c) Each Letter of Credit shall (i) be a letter of credit
issued in the ordinary course of the business of the Borrower;
(ii) expire by its terms on a date not later than thirty (30)
Business Days prior to the Termination Date; (iii) be in an
amount that complies with paragraph (a) of this Section 0; and
(iv) contain such further provisions and conditions as are
standard and reasonable for ordinary irrevocable letters of
credit and as may be requested by the Borrower, and reasonably
satisfactory to the Lender.
(d) The Borrower shall pay to the Lender a letter of credit
fee on the aggregate amount of Letter of Credit Obligations
outstanding on the date of determination at the rate equal to the
applicable Margin on LIBOR Loans on a per annum basis as follows:
(1) On the Closing Date a fee shall be payable for the
period beginning on such Closing Date and ending on August
31, 1997.
(2) On each Quarterly Payment Date in each year a fee
shall be payable for the period beginning on such date and
ending three months later.
Such fees shall be calculated on the assumption that the Letter
of Credit Obligations on the date of determination will be
available for the entire period for which such fee is payable.
At the end of such period the fee shall be recalculated based on
the actual daily average of the Letter of Credit Obligations for
such period, and the difference, if any, shall be added to or
subtracted from, as the case may be, the commission payable for
the next ensuing period or paid or credited as appropriate if
there is no ensuing period.
The Borrower acknowledges that the Lender will be required
by applicable rules and regulations of the Federal Reserve Board
to maintain reserves for its liability to honor draws made
pursuant to a Letter of Credit. The Borrower agrees to reimburse
the Lender promptly for all additional costs that it may
hereafter incur solely by reason of its acting as issuer of the
Letters of Credit and its being required to reserve for such
liability, it being understood by the Borrower that other
interest and fees payable under this Agreement do not include
compensation of the Lender for such reserves. The Lender shall
furnish to the Borrower, at the time of its demand for payment of
such additional costs, the computation of such additional cost,
which shall be conclusive absent manifest error, provided that
such computations are made on a reasonable basis.
The Borrower shall pay to the Lender administrative and
other fees, if any, in connection with the Letters of Credit in
such amounts and at such times as the Lender and the Borrower
shall agree from time to time.
(e) This Agreement shall not terminate so long as any
Letter of Credit is in effect; provided, however, no Letters of
Credit shall be issued under this Agreement after the Termination
Date.
SECTION 2.4 Payments. All interest accrued on Advances
subject to the Quoted Cost of Funds Rate shall be payable on the
first day of each successive March, June, September and December
(each, a "Quarterly Payment Date"), commencing on September 1,
1997. All interest accrued on each LIBOR Loan having an Interest
Period of three months or less, shall be payable at the end of
the applicable Interest Period then in effect. All interest
accrued on each LIBOR Loan having an Interest Period of greater
than three months, shall be payable (a) the date that is three
months after the initial date of the Interest Period applicable
to such LIBOR Loan and (b) the last day of the Interest Period
applicable to such LIBOR Loan. The principal amount of Loans,
together with accrued interest thereon, shall be due on the
Termination Date.
SECTION 2.5 Prepayment.
(a) The Borrower may at any time prepay all or any part of
the Advances, without premium or penalty; provided, however, that
(1) unless the Borrower pays the amounts, if any, due under
Section 4.2, no LIBOR-Based Rate Segment may be prepaid during an
Interest Period, and (2) any partial prepayment shall be in the
amount of $100,000 or more unless prepayments are made pursuant
to the terms of the Disbursement Agreement. The Borrower shall
pay, on the date of prepayment, all interest accrued to the date
of prepayment on any amount prepaid in connection with the
prepayment in full of the Credit Obligations and the concurrent
termination of this Agreement. The Borrower shall pay all
interest accrued to the date of prepayment on the amount prepaid.
(b) If at any time the principal amount of the Advances,
together with the sum of the then outstanding Letter of Credit
Borrowings and Reimbursement Obligations, is greater than the
Maximum Credit Amount then in effect, the Borrower shall
immediately make a prepayment (notwithstanding the provisions of
clause (a) of this section, but subject to the provisions of
Section 4.2) on the Advances equal to the difference between said
aggregate principal amount of the Advances plus the sum of the
then outstanding Letter of Credit Borrowings and Reimbursement
Obligations and the Maximum Credit Amount.
SECTION 2.6 Reduction in Revolving Facility. The Borrower
shall have the right from time to time on each Quarterly Payment
Date, upon not less than five (5) Business Days' written notice
to the Lender, to reduce the amount of the Revolving Facility.
Each such reduction shall be in the aggregate principal amount of
$5,000,000 or a larger integral multiple of $1,000,000, and shall
permanently reduce the Maximum Credit Amount. No such reduction
shall result in payment of a LIBOR-Based Rate Segment other than
on the last day of the respective Interest Period. Each
reduction of the Revolving Facility shall be accompanied by
payment of the Loans to the extent that the Credit Obligations
exceed the Revolving Facility after giving effect to such
reductions together with accrued and unpaid interest on the
amounts prepaid.
SECTION 2.7 Fees.
(a) The Borrower shall pay to the Lender on the Closing
Date a closing fee equal to $60,000. This fee shall be fully
earned and nonrefundable as of the Closing Date.
(b) The Borrower shall pay to the Lender an availability
fee (the "Availability Fee") that begins to accrue on the Closing
Date and shall be computed at the rate of thirty-five hundredths
of one percent (.35%) per annum times the daily average
difference between (1) $25,000,000 and (2) the aggregate
outstanding principal amount of the Advances made by the Lender.
The Availability Fee shall be payable in arrears on each
Quarterly Payment Date and on the Termination Date, commencing on
September 1, 1997. The Availability Fee shall not be refundable
under any circumstances and shall be calculated on an Actual/360
Basis.
SECTION 2.8 Extension of Termination Date. The Borrower
and the Lender may from time to time extend the then-current
Termination Date to any subsequent termination date upon which
the Borrower and the Lender may agree by executing a written
extension agreement. Upon the execution of such an extension
agreement by the Borrower and the Lender, the maturity date of
the Credit Obligations shall be extended to the agreed-upon
termination date, and the agreed-upon termination date shall
become the new "Termination Date" for purposes of this Agreement.
SECTION 2.9 Place and Time of Payments.
(a) All payments by the Borrower to the Lender under this
Agreement and the other Loan Documents shall be made in lawful
currency of the United States and in immediately available funds
to the Lender at its Principal Office or at such other address
within the continental United States as shall be specified by the
Lender by notice to the Borrower. Any payment received by the
Lender after 2:00 p.m. (Birmingham, Alabama time) on a Business
Day (or at any time on a day that is not a Business Day) shall be
deemed made by the Borrower and received by the Lender prior to
2:00 p.m. on the following Business Day.
(b) All amounts payable by the Borrower to the Lender under
this Agreement or any of the other Loan Documents for which a
payment date is expressly set forth herein or therein shall be
payable on the specified due date without notice or demand by the
Lender except as otherwise expressly provided herein. All
amounts payable by the Borrower to the Lender under this
Agreement or the other Loan Documents for which no payment date
is expressly set forth herein or therein shall be payable ten
days after written demand by the Lender to the Borrower. The
Lender may, at its option, send written notice or demand to the
Borrower of amounts payable on a specified due date pursuant to
this Agreement or the other Loan Documents, but the failure to
send such notice shall not affect or excuse the Borrower's
obligation to make payment of the amounts due on the specified
due date except as otherwise expressly provided herein.
(c) Payments that are due on a day that is not a Business
Day shall be payable on the next succeeding Business Day, and any
interest payable thereon shall be payable for such extended time
at the specified rate.
(d) Except as otherwise required by law, payments received
by the Lender shall be applied first to expenses, fees and
charges, then to interest and finally to principal.
(e) The Borrower agrees to pay to the Lender, on demand, a
late charge computed as follows to cover the extra expense
involved in handling late payments: The late charge will be
equal to five percent (5.0%) of any payment that is not paid
within twelve (12) days after it is due. The late charge shall
never be less than $10.00 on each payment. This provision shall
not be deemed to excuse a late payment or be deemed a waiver of
any other right the Lender may have, including the right to
declare the entire unpaid principal and interest immediately due
and payable.
ARTICLE 3
INTEREST
SECTION 3.1 Applicable Interest Rates. The Borrower shall
have the option to elect to have any Segment bear interest at the
LIBOR-Based Rate. For any period of time and for any Segment
with respect to which the Borrower does not elect the LIBOR-Based
Rate, such Segment shall bear interest at the Quoted Cost of
Funds Rate. The Borrower's right to elect a LIBOR-Based Rate for
a Segment shall be subject to the following requirements:
(a) each Segment shall be in the amount of $1,000,000 or more and
in an integral multiple of $500,000, (b) each such Segment shall
have a maturity selected by the Borrower of one, two, three or
six months and (c) no more than five Segments may be outstanding
at any time; provided, however, that no such Segment shall have a
maturity date later than the Termination Date.
SECTION 3.2 Procedure for Exercising the LIBOR-Based Rate.
The Borrower may elect to have the LIBOR-Based Rate apply to a
Segment by notifying the Lender in writing (which may be by
facsimile transmission) not later than 10:00 a.m., Birmingham,
Alabama time, three (3) Business Days prior to the effective date
on which any LIBOR-Based Rate is to become applicable. Any
notice of interest rate election hereunder shall be irrevocable
and shall be in the form attached hereto as Exhibit B and shall
set forth the following: (a) the amount of the LIBOR-Based Rate
Segment to which the requested interest rate will apply, (b) the
date on which the selected interest rate will become applicable,
and (c) the maturity selected for the Interest Period. On the
day that the Lender receives a notice hereunder requesting that
the requested LIBOR-Based Rate be applicable, the Lender shall
use its best efforts to notify the Borrower by telephone or by
facsimile transmission of the applicable LIBOR-Based Rate as
early on that day or the next Business Day as may be practical in
the circumstances. The Lender shall not be required to provide a
LIBOR-Based Rate on any day on which dealings in deposits in
Dollars are not transacted in the London interbank market. If
the Borrower does not immediately accept the LIBOR-Based Rate
quoted by the Lender, the Lender may, in view of changing market
conditions, revise the quoted LIBOR-Based Rate at any time.
SECTION 3.3 Quoted Cost of Funds Rate. Each Segment
subject to the Quoted Cost of Funds Rate shall bear interest from
the date the Quoted Cost of Funds Rate becomes applicable thereto
until payment in full, or until a LIBOR-Based Rate is selected by
the Borrower and becomes applicable thereto, on the unpaid
principal balance of such Segment on an Actual/360 Basis. Any
change in the Quoted Cost of Funds Rate shall take effect on the
effective date of such change in the Quoted Cost of Funds Rate
designated by the Lender, without notice to the Borrower and
without any further action by the Lender. Notwithstanding the
foregoing, for the purpose of enabling the Lender to send
periodic billing statements in advance of each interest payment
date reflecting the amount of interest payable on such interest
payment date, at the option of the Lender, the Quoted Cost of
Funds Rate, in effect 15 days prior to each interest payment date
shall be deemed to be the Quoted Cost of Funds Rate, as
continuing in effect until the date prior to such interest
payment date for purposes of computing the amount of interest
payable on such interest payment date. If the Lender elects to
use the Quoted Cost of Funds Rate 15 days prior to the interest
payment date for billing purposes, and if the Quoted Cost of
Funds Rate changes during such 15-day period, the difference
between the amount of interest that in fact accrues during such
period and the amount of interest actually paid will be added to
or subtracted from, as the case may be, the interest otherwise
payable in preparing the periodic billing statement for the next
succeeding interest payment date. In determining the amount of
interest payable at the Termination Date or upon full prepayment
of the Credit Obligations, all changes in the Quoted Cost of
Funds Rate, occurring on or prior to the day before the
Termination Date or the date of such full prepayment shall be
taken into account.
SECTION 3.4 LIBOR-Based Rate. Each LIBOR-Based Rate
Segment shall bear interest from the date the LIBOR-Based Rate
becomes applicable thereto until the end of the applicable
Interest Period on the unpaid principal balance of such LIBOR-
Based Rate Segment at the LIBOR-Based Rate on an Actual/360 Day
Basis.
SECTION 3.5 Post Maturity Interest. Upon and after the
occurrence of any Event of Default, the outstanding principal
amount of all Loans and, to the extent permitted by applicable
law, any interest payments thereon not paid when due and any fees
and other amounts then due and payable hereunder, shall
thereafter bear interest (including post-petition interest in any
proceeding under applicable bankruptcy laws) payable upon demand
at a rate that is 2.00% per annum (calculated on an Actual/360
Basis) in excess of the interest rate otherwise payable under
this Agreement with respect to the applicable Loans (or, in the
case of any such fees and other amounts, at a rate that is 2.00%
per annum in excess of the interest rate otherwise payable under
this Agreement for Advances bearing interest at the Quoted Cost
of Funds Rate); provided that, in the case of LIBOR Loans, upon
the expiration of the Interest Period in effect at the time any
such increase in interest rate is effective, such LIBOR Loans
shall thereupon bear interest at the Quoted Cost of Funds Rate
and thereafter bear interest payable upon demand at a rate that
is 2.00% per annum (calculated on an Actual/360 Basis) in excess
of the interest rate otherwise payable under this Agreement for
Segments bearing interest at the Quoted Cost of Funds Rate. The
payment or acceptance of the increased rate provided by this
Section 0 shall not constitute a waiver of any Event of Default
or an amendment to this Agreement or otherwise prejudice or limit
any rights or remedies of the Lender. Interest on all Loans
shall be calculated on an Actual/360 Basis.
SECTION 3.6 Changes in Margin. Any change in the LIBOR-
Based Rate or Quoted Cost of Funds Rate because of a change in
the applicable Margin shall become effective as of the first day
of the fiscal quarter next following the receipt by the Lender of
the Compliance Certificate furnished by the Borrower to the
Lender pursuant to Section 7.3(4) hereof, stating that as a
result of a change in the Fixed Charges Coverage Ratio there has
been a change in the Margin. Any such change in the Margin shall
be effective without notice to the Borrower and without any
further action by the Lender. From the Closing Date until the
first day of the first fiscal quarter after receipt by the Lender
of the financial statements for the fiscal quarter ending August
31, 1997 pursuant to Section 7.3 below, the applicable Margin
shall be 1.625%.
ARTICLE 4
TERMINATION OF LIBOR-BASED RATE AND YIELD PROTECTION
SECTION 4.1 Termination of LIBOR-Based Rate; Increase in
LIBOR-Based Rate; Reduction of Return.
(a) If at any time the Lender shall reasonably determine
(which determination, if reasonable, shall be final, conclusive
and binding upon all parties) that:
(1) by reason of any changes arising after Closing
Date affecting the London interbank market or affecting the
position of the Lender in such market, adequate and fair
means do not exist for ascertaining the LIBOR-Based Rate by
reference to the LIBOR Quote with respect to a LIBOR-Based
Rate Segment; or
(2) the continuation by the Lender of LIBOR-Based Rate
Segments at the LIBOR-Based Rate or the funding thereof in
the London interbank market would be unlawful by reason of
any law, governmental rule, regulation, guidelines or order;
or
(3) the continuation by the Lender of LIBOR-Based Rate
Segments at the LIBOR-Based Rate or the funding thereof in
the London interbank market would be impracticable as a
result of a contingency occurring after the Closing Date
that materially and adversely affects the London interbank
market;
then, and in any such event, the Lender shall on such date give
notice (by telephone and confirmed in writing) to the Borrower of
such determination. The obligation of the Lender to make or
maintain LIBOR-Based Rate Segments so affected or to permit
interest to be computed thereon at the LIBOR-Based Rate, as the
case may be, shall be terminated, and interest shall thereafter
be computed on the affected LIBOR-Based Rate Segment at the
Quoted Cost of Funds Rate.
(b) It is the intention of the parties hereto that the
LIBOR-Based Rate shall accurately reflect the cost to the Lender
of maintaining any LIBOR-Based Rate Segment during the applicable
Interest Period assuming the Lender purchases any such time
deposits and obtains such funds comprising any LIBOR-Based Rate
Segment. Accordingly, if by reason of any change after the
Closing Date in any applicable Governmental Requirement (or any
interpretation thereof and including the introduction of any new
Governmental Requirement), including any change in the LIBOR
Reserve Requirement, the cost to the Lender of maintaining any
LIBOR-Based Rate Segment or funding the same by means of a London
interbank market time deposit, as the case may be, shall
increase, the LIBOR-Based Rate applicable to such LIBOR-Based
Rate Segment shall be adjusted as necessary to reflect such
change in cost to the Lender, effective as of the date on which
such change in any applicable Governmental Requirement becomes
effective. Any amounts due under this Section 0 as a result of a
change in the LIBOR Reserve Requirement shall only be payable by
the Borrower to the extent the Lender incurs actual costs
associated with any such change.
(c) If the Lender shall have determined that the adoption
after the Closing Date of any Governmental Requirement regarding
capital adequacy, or any change in any of the foregoing or in the
interpretation or administration of any of the foregoing by any
Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance
by the Lender (or any lending office of the Lender) or the
Lender's holding company with any request or directive regarding
capital adequacy (whether or not having the force of law) of any
such Governmental Authority, central bank or comparable agency,
has or would have the effect of reducing the rate of return on
the Lender's capital or on the capital of the Lender's holding
company, as a consequence of the Lender's obligations under this
Agreement or the Advances made by the Lender pursuant hereto to a
level below that which the Lender or the Lender's holding company
could have achieved but for such adoption, change or compliance
(taking into consideration the Lender's guidelines with respect
to capital adequacy) by an amount deemed by the Lender to be
material, then from time to time the Borrower shall pay to the
Lender such additional amount or amounts as will compensate the
Lender or the Lender's holding company for any such reduction
suffered.
SECTION 4.2 Compensation. The Borrower shall compensate
the Lender for all reasonable losses, expenses and liabilities
(including any interest paid by the Lender to lenders on funds
borrowed by the Lender to make or carry any LIBOR-Based Rate
Segment and any loss sustained by the Lender in connection with
the re-employment of such funds), that the Lender may sustain:
(a) if for any reason (other than a default by the Lender)
following agreement between the Borrower and the Lender as to the
LIBOR-Based Rate applicable to the LIBOR-Based Rate Segment the
Borrower fails to accept such LIBOR-Based Rate Segment, (b) as a
consequence of any unauthorized action taken or default by the
Borrower in the repayment of any LIBOR-Based Rate Segment when
required by the terms of this Agreement or (c) as a consequence
of the prepayment of any LIBOR-Based Rate Segment pursuant to
Section 2.5. A certificate as to the amount of any additional
amounts payable pursuant to this section or Section 4.1(b) or (c)
(setting forth in reasonable detail the basis for requesting such
amounts) submitted by the Lender to the Borrower shall be
conclusive, in the absence of manifest error. The Borrower shall
pay to the Lender the amount shown as due on any such certificate
delivered by the Lender within 30 days after the Borrower's
receipt of the same.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lender as
follows:
SECTION 5.1 Organization Powers, Existence, etc. (a) The
Borrower is duly organized, validly existing and in good standing
under the laws of the state in which it is incorporated, (b) the
Borrower has the power and authority to own its properties and
assets and to carry on its business as now being conducted, (c)
the Borrower has the power to execute, deliver and perform the
Loan Documents to which it is a party, (d) the Borrower is duly
qualified to do business in each state with respect to which the
failure to be so qualified would have a material adverse effect
on its properties or business and (e) except as set forth in
Schedule 5.1(e) hereto, has not done business under any other
name, trade name or otherwise within the five years immediately
preceding the Closing Date.
SECTION 5.2 Authorization of Borrowing, etc. The
execution, delivery and performance of the Loan Documents (a)
have been duly authorized by all requisite action and (b) will
not violate any Governmental Requirement, the articles of
incorporation or bylaws of the Borrower, or any indenture,
agreement or other instrument to which the Borrower is a party,
or by which the Borrower or any of its properties are bound, or
be in conflict with, result in a breach of or constitute (with
due notice or lapse of time or both) a default under, any such
indenture, agreement or other instrument, or result in a material
adverse change, when taken as a whole.
SECTION 5.3 Liabilities. The Borrower has furnished to the
Lender a copy of the audited balance sheet of the Borrower dated
as of June 1, 1996 and a statement of changes in shareholders'
equity and the related statements of income and cash flow as of
the end of fiscal year 1996 and the unaudited balance sheet of
the Borrower dated as of March 1, 1997, and the related
statements of income and cash flow for the fiscal period then
ended. Such financial statements were prepared in conformity
with generally accepted accounting principles consistently
applied throughout the period involved, are in accordance with
the books and records of the Borrower, are correct and complete
and present fairly the financial condition of the Borrower as of
the date of such financial statements, and, since the date of
such financial statements, no material adverse change in the
financial condition, business or operations of the Borrower has
occurred. The Borrower has no Liabilities, Guaranteed
Obligations or other obligations or liabilities, direct or
contingent, that are material in amount other than the
Liabilities reflected in such balance sheet and the notes
thereto.
SECTION 5.4 Taxes. Except as set forth in Schedule 5.4
hereto, the Borrower has filed or caused to be filed all federal,
state and local tax returns that are required to be filed, and
has paid all taxes as shown on said returns or on any assessment
received by the Borrower to the extent that such taxes have
become due giving effect to all extensions then obtained. The
Borrower has reserves which are believed by the officers of the
Borrower to be adequate for the payment of additional taxes for
years which have not been audited by the respective tax
authorities.
SECTION 5.5 Litigation. Except as disclosed is Schedule
5.5 attached hereto, there are no actions, suits or proceedings
pending or, to the best knowledge of the Borrower, threatened
against or affecting the Borrower, by or before any Governmental
Authority that involve any of the transactions contemplated in
this Agreement or the possibility of any judgment or liability
that may reasonably be likely to result in a material adverse
change in the operations or financial condition of the Borrower
taken as a whole; and the Borrower is not in default with respect
to any material Governmental Requirement which default could
reasonably be likely to have a material adverse effect upon the
operations or financial condition of the Borrower taken as a
whole.
SECTION 5.6 Agreements. The Borrower is not a party to any
agreement or instrument, or subject to any charter or other
corporate or restriction, that materially and adversely affects
its business, properties or assets, operations or condition,
financial or otherwise, or is in default in the performance,
observance or fulfillment of any of the obligations contained in
any agreement or instrument to which it is a party, which default
could reasonably be likely to have a material adverse effect upon
the operations or financial condition of the Borrower.
SECTION 5.7 Use of Proceeds. The Borrower does not intend
to use any part of the proceeds of Advances for the purpose of
purchasing or carrying any Margin Stock or retiring any debt
incurred to purchase or carry any Margin Stock or for any other
purpose that is not expressly authorized by this Agreement.
SECTION 5.8 ERISA.
(a) Identification of Plans. Except as disclosed in
Schedule 5.8(a) attached hereto, neither the Borrower nor
any ERISA Affiliate maintains or contributes to, or has
maintained or contributed to, any Plan that is a Plan
subject to Title IV of ERISA.
(b) Liabilities. Except as disclosed in Schedule
5.8(b) attached hereto, the Borrower is not currently or
will not become subject to any liability (other than routine
Plan expenses or contributions, if timely paid), tax or
penalty whatsoever to any person whomsoever, which
liability, tax or penalty is directly or indirectly related
to any Plan including, but not limited to, any penalty or
liability arising under Title I or Title IV of ERISA, any
tax or penalty resulting from a loss of deduction under
Sections 404 or 419 of the Code, or any tax or penalty under
Chapter 43 of the Code, except such liabilities, taxes, or
penalties (when taken as a whole) as will not have a
material adverse effect on the Borrower, or upon its
financial condition, assets, business, operations,
liabilities or prospects; and
(c) Funding. Except as disclosed in Schedule 5.8(c)
attached hereto, the Borrower and each ERISA Affiliate has
made full and timely payment of all amounts (i) required to
be contributed under the terms of each Plan and applicable
law and (ii) required to be paid as expenses of each Plan.
No Plan would have an "amount of unfunded benefit
liabilities" (as defined in Section 4001(a)(18) of ERISA) if
such Plan were terminated as of the date on which this
representation and warranty is made.
SECTION 5.9 Subsidiaries. The Borrower has no
Subsidiaries.
SECTION 5.10 Principal Place of Business. The principal
place of business and chief executive office of the Borrower is
at its address shown in Section 0 and will not be changed from
such address unless, prior to such change, the Borrower shall
have notified the Lender of the proposed change.
SECTION 5.11 Environmental Laws.
(a) To the best knowledge of the Borrower, all properties
owned or used by the Borrower, while under the custody, care and
control of the Borrower, have been maintained in compliance in
all material respects with all federal, state and local
environmental protection, occupational, health and safety or
similar laws, including the Federal Water Pollution Control Act
(33 U.S.C. 1251 et seq.), Resource Conservation & Recovery Act
(42 U.S.C. 6901 et seq.), Safe Water Drinking Act (42 U.S.C.
3000(f) et seq.), Toxic Substances Control Act (15 U.S.C. 261
et seq.), Clean Air Act (42 U.S.C. 7401 et seq.) and
Comprehensive Environmental Response of Compensation and
Liability Act (42 U.S.C. 6901 et seq.) ("CERCLA").
(b) The Borrower has not received any written notification
from any Governmental Authority with respect to current, existing
violations of any of the laws enumerated in clause (a) above, or
pursuant to any of their respective implementing regulations or
state analogues to such laws or regulations.
(c) There has not been, at any location owned or used by
the Borrower, any "Release" by the Borrower, or anyone within the
Borrower's control, or to the best of the Borrower's knowledge,
any other person, of any Hazardous Materials.
(d) To the best knowledge of the Borrower, the Borrower has
not sent or arranged for the transportation or disposal of
Hazardous Materials or wastes to a site which, pursuant to CERCLA
or any similar state law (i) has been placed, or is proposed (by
the Environmental Protection Agency or relevant state authority)
to be placed, on the "National Priorities List" of hazardous
waste sites or its state equivalent, or (ii) is subject to a
claim, an administrative order or other request to take "removal"
or "remedial" action (in each case as defined in CERCLA) by any
person.
(e) The Borrower has not used and does not use storage
tanks located on any property owned or presently leased by the
Borrower.
SECTION 5.12 Disclosure. No financial statement, document,
certificate or other written communication furnished to the
Lender by or on behalf of the Borrower in connection with any
Loan Document contains any untrue statement of a material fact
after giving effect to all other statements so delivered to the
Lender.
SECTION 5.13 Licenses. All material licenses, permits,
accreditations and approvals required by all Governmental
Authorities necessary in order for each restaurant to be operated
for its intended purpose have been obtained and are in full force
and effect.
SECTION 5.14 Title to Properties. The Borrower has good
and marketable title to all its properties and assets reflected
on the balance sheet referred to in Section 0 except for those
matters shown on such balance sheet and except for such
properties and assets as have been disposed of since the date of
said balance sheet as no longer used or useful in the conduct of
its business or as have been disposed of in the ordinary course
of the business. All such properties and assets are free and
clear of all Liens, except as otherwise permitted or required by
the provisions of the Loan Documents.
SECTION 5.15 Enforceability. This Agreement and each of
the other Loan Documents, when duly executed and delivered by the
Borrower in accordance with the provisions of this Agreement,
will constitute the legal, valid and binding, joint and several,
obligations of the Borrower, enforceable in accordance with their
respective terms, subject to the effect of bankruptcy,
insolvency, reorganization, receivership, moratorium and similar
laws affecting the rights and remedies of creditors generally.
SECTION 5.16 Consents, Registrations, Approvals, etc. No
registration with or consent or approval of, or other action by,
any Governmental Authority is required for the execution,
delivery and performance of this Agreement or the other Loan
Documents, or the borrowings under this Agreement, by the
Borrower.
SECTION 5.17 Solvency. The Borrower is Solvent, and the
Borrower will not, as a result of the transactions provided for
herein (i) become not Solvent, (ii) be left with unreasonably
small capital, (iii) incur debts beyond its ability to pay them
as they mature or (iv) have Liabilities (including reasonable
contingencies) in excess of the fair saleable value of its
assets.
SECTION 5.18 Patents, Trademarks. The Borrower owns, or
possesses the right to use, all the patents, trademarks, service
marks, trade names, copyrights, franchises, consents,
authorizations and licenses and rights with respect to the
foregoing, necessary for the conduct of its business as now
conducted and proposed to be conducted, without any known
conflict with the rights of others.
ARTICLE 6
GENERAL CONDITIONS OF LENDING
The Lender's obligation to make each Advance and to issue
each Letter of Credit hereunder is subject to the following
conditions precedent:
SECTION 6.1 Representations and Warranties. On the Closing
Date and the date of each Advance or issuance of a Letter of
Credit hereunder and on the date the Borrower presents to the
Lender a Request for LIBOR Loan or Interest Rate Election form or
Application, the representations and warranties set forth in this
Agreement and in all other Loan Documents shall be true and
correct on and as of such date in all material respects with the
same effect as though such representations and warranties had
been made on the date of the Advance or issuance of the Letter of
Credit or on the date the Borrower presents to the Lender a
Request for LIBOR Loan or Interest Rate Election form or
Application, as the case may be (or in the case of any such
representation and warranty made as of a particular date, as of
such particular date). Each such warranty and representation
shall be deemed to be continuing in effect so long as this
Agreement remains in effect unless updated by the Borrower in a
written notice to the Lender given prior to the presentation of a
Request for LIBOR Loan or Interest Rate Election or Application.
The presentation by the Borrower of each Request for LIBOR Loan
or Interest Rate Election or Application shall constitute a
representation and warranty by the Borrower to the Lender that no
material adverse change in the financial condition of the
Borrower, as reflected in the financial statements delivered to
the Lender pursuant to Section 0 has occurred since the date of
such financial statements.
SECTION 6.2 No Default. On the Closing Date and the date
of each Advance hereunder and on the date of the issuance of each
Letter of Credit, the Borrower shall be in compliance in all
material respects with all the terms and conditions set forth in
this Agreement on its part to be observed or performed, and no
Default or Event of Default shall have occurred and be
continuing. The presentation by the Borrower of each Request for
LIBOR Loan or Interest Rate Election and Application shall
constitute a representation and warranty by the Borrower to the
Lender that no Default or Event of Default has occurred and is
continuing.
SECTION 6.3 Required Items. On and as of the Closing Date
and on and as of the date of each Advance and on the date the
Borrower presents to the Lender each Request for LIBOR Loan and
Interest Rate Election form, the Lender must have received all
financial statements (if any), reports and other items required
as of that date under Article 2 and Article 7 of this Agreement.
SECTION 6.4 Authorized Representative Certificates. On and
as of the Closing Date, the Borrower must have delivered to the
Lender the following certificates executed by the appropriate
Authorized Representatives of the Borrower, each of which
certificates must be of a current date and must be satisfactory
in form and substance to the Lender: (a) a certificate confirming
compliance by the Borrower with the conditions precedent set
forth in Sections 6.1 and 6.2; (b) a certificate certifying as in
full force and effect resolutions of its directors authorizing
the transactions contemplated by the Loan Documents and
authorizing certain Authorized Representatives of the Borrower to
execute the Loan Documents on behalf of the Borrower and to act
on behalf of the Borrower with respect to the Loan Documents,
including the authority to request disbursements of the proceeds
of the Advances and to direct the disposition of such proceeds
(including Request for LIBOR Loan and Interest Rate Election
forms); and (c) a certificate certifying as true and correct, as
amended, attached copies of the organizational documents of the
Borrower and the incumbency and signature of each Authorized
Representative of the Borrower specified in said resolutions.
The Lender may conclusively rely on the certified resolutions
described in Section 6.4(b) as to all actions on behalf of the
Borrower by the Authorized Representatives specified therein
until the Lender receives further duly adopted resolutions
cancelling or amending the prior resolutions.
SECTION 6.5 Other Supporting Documents. The Lender must
receive on or before the Closing Date the following, each of
which must be satisfactory to the Lender in form and content,
(a) such opinions of counsel, certificates, proceedings,
instruments and other documents as the Lender or its counsel may
reasonably request to evidence (1) compliance by the Borrower and
all other parties to the Loan Documents with legal requirements,
(2) the truth and accuracy as of the Closing Date of the
respective representations thereof contained in the Loan
Documents, and (3) the due performance or satisfaction by such
parties at or prior to the Closing Date of all agreements then
required to be performed and all conditions then required to be
satisfied by them pursuant to the Loan Documents, and (b) such
additional supporting documents as the Lender or its counsel may
reasonably request.
ARTICLE 7
GENERAL COVENANTS OF THE BORROWER
From the Closing Date until payment in full of the Credit
Obligations, the Borrower covenants and agrees that:
SECTION 7.1 Existence, Properties, etc. The Borrower shall
(a) do or cause to be done all things necessary to preserve and
keep in full force and effect its existence, all material rights
and franchises and comply in all material respects with all
Governmental Requirements applicable to it and (b) at all times
maintain, preserve and protect all necessary franchises and trade
names and preserve such of its property as the Borrower
reasonably determines at any date of determination to be useful
in the conduct of its business and keep the same in good repair,
working order and condition, and from time to time make, or cause
to be made, all needful and proper repairs, renewals and
replacements, betterments and improvements thereto, so that the
business carried on in connection therewith may be properly and
advantageously conducted at all times, and the failure to do
which would have a material adverse effect on the Borrower; and
at all times keep its insurable properties adequately insured and
maintain, and pay all premiums and costs of, (i) insurance on its
properties to such extent and against such risks, including fire,
as is customary with companies in the same or a similar business,
(ii) necessary workmen's compensation insurance and (iii) such
other insurance (including liability insurance) as may be
required by law or as may otherwise be customarily maintained by
companies in the same or a similar business.
SECTION 7.2 Payment of Indebtedness, Taxes, etc. The
Borrower shall (a) pay its indebtedness and obligations in
accordance with normal terms and (b) pay and discharge or cause
to be paid and discharged promptly all taxes, assessments and
other charges or levies of Governmental Authorities imposed upon
it or upon its income and profits or upon any of its properties
before the same shall become in default, as well as all lawful
claims for labor, materials and supplies or otherwise, which, if
unpaid, might reasonably be likely to become a Lien upon such
properties or any part thereof; provided, however, that the
Borrower shall not be required to pay and discharge or cause to
be paid and discharged any such indebtedness, obligation, tax,
assessment, charge, levy or claim so long as the validity thereof
shall be duly pursued and contested in good faith by appropriate
action or proceedings and the Borrower shall maintain to the
extent required under generally accepted accounting principles,
adequate reserves for such taxes, indebtedness, obligations,
assessments, charges, levies or claims during such proceedings.
SECTION 7.3 Financial Statements, Reports, etc. The
Borrower shall deliver or cause to be delivered to the Lender:
(1) Not later than 60 days after the end of each
first, second and third fiscal quarter, a copy of the
Borrower's 10-Q as filed with the Securities and Exchange
Commission or if such filing is no longer required, a
balance sheet and a statement of revenues and expenses of
the Borrower and a statement of cash flow of the Borrower
for such fiscal quarter and for the period beginning on the
first day of the fiscal year and ending on the last day of
such fiscal quarter (in sufficient detail to indicate the
Borrower's compliance with the financial covenants set forth
in this Article 0), together with statements in comparative
form for the corresponding periods in the preceding fiscal
year, and certified by the chief executive officer,
president or chief financial officer of the Borrower; each
certificate provided pursuant to this clause (1) shall state
that, except as disclosed in such certificate (a) on the
date of such certificate the representations and warranties
set forth in this Agreement and all the other Loan Documents
are true and correct in all material respects on and as of
such date with the same effect as though such
representations and warranties had been made on such date,
and (b) no Default or Event of Default has occurred and is
continuing as of such date or, if such certificate discloses
that a Default or Event of Default has occurred and is
continuing as of such date, such certificate shall describe
such Default or Event of Default in reasonable detail and
state what action, if any, the Borrower are taking or
propose to take with respect thereto.
(2) Not later than 105 days after the end of each
fiscal year, a copy of the Borrower's 10-K as filed with the
Securities and Exchange Commission or if such filing is no
longer required, financial statements (including a balance
sheet, a statement of revenues and expenses, a statement of
changes in shareholders' equity and a statement of cash
flow) of the Borrower for such fiscal year (in sufficient
detail to indicate the Borrower's compliance with the
financial covenants set forth in this Article 0), together
with statements in comparative form for the preceding fiscal
year, and accompanied by an opinion of certified public
accountants acceptable to the Lender, which opinion shall
state in effect that such financial statements (A) were
audited using generally accepted auditing standards, (B)
were prepared in accordance with generally accepted
accounting principles applied on a consistent basis, and (C)
present fairly the financial condition and results of
operations of the Borrower for the periods covered.
(3) With the financial statements submitted under
Section 7.3(1) and 7.3(2), a certificate signed by the party
certifying said statement to the effect that no Event of
Default, nor any event that, upon notice or lapse of time or
both, would constitute an Event of Default, exists or, if
any such Event of Default or event exists, specifying the
nature and extent thereof.
(4) Together with the financial statements required by
paragraphs (1) and (2) above, a compliance certificate duly
executed by an Authorized Representative of the Borrower
substantially in the form of Exhibit C attached hereto
evidencing compliance with the covenants set forth in
Section 7.8 (a "Compliance Certificate").
(5) Contemporaneously with the distributions thereof
to the Borrower's stockholders or the filing thereof with
the Securities and Exchange Commission, as the case may be,
copies of all statements, reports, notices and filings
distributed by the Borrower to its stockholders or filed
with the Securities and Exchange Commission.
(6) Promptly upon receipt thereof, copies of all other
reports, management letters and other documents submitted to
it by independent accountants in connection with any annual
or interim audit of its books made by such accountants.
(7) Promptly after the Borrower knows or has reason to
know of the occurrence of any "reportable event" under
Section 4043 of ERISA applicable to the Borrower or other
ERISA Affiliate, a certificate of the chief executive
officer, president or chief financial officer of the
Borrower setting forth the details as to such "reportable
event" and the action that the Borrower or other ERISA
Affiliate has taken or will take with respect thereto, and
promptly after the filing or receiving thereof, copies of
all reports and notices that any Borrower or other ERISA
Affiliate files under ERISA with the Internal Revenue
Service or the PBGC or the United States Department of
Labor.
(8) As soon as practicable, such other information
regarding the business affairs, financial condition or
operations of the Borrower as the Lender shall reasonably
request from time to time or at any time.
SECTION 7.4 Litigation Notice. The Borrower shall,
promptly after the same shall have become known to any officer of
the Borrower, notify the Lender in writing of any action, suit or
proceeding at law or in equity or by or before any Governmental
Authority that, if adversely determined, might reasonably be
likely to impair the ability of the Borrower to perform its
obligations under this Agreement or any other Loan Document or
might materially and adversely affect the business or condition,
financial or other, of the Borrower.
SECTION 7.5 Default Notice. The Borrower shall promptly
give notice in writing to the Lender of the occurrence of (a) any
Default or Event of Default, and (b) any event of default or any
event which upon notice or lapse of time or both would constitute
such an event of default under any other document or agreement to
which the Borrower is a party with entities other than the
Lender, which default would have a material and adverse effect on
the continued business operations of the Borrower, taken as a
whole.
SECTION 7.6 Further Assurances. The Borrower shall at its
cost and expense, upon the request of the Lender, duly execute
and deliver, or cause to be duly executed and delivered, to the
Lender such further instruments and do and cause to be done such
further acts as may be reasonably necessary or proper in the
opinion of the Lender or its counsel to carry out more
effectively the provisions and purposes of the Loan Documents.
SECTION 7.7 Insurance. [Intentionally omitted].
SECTION 7.8 Covenants Regarding Financial Condition. The
Borrower covenants and agrees that:
(1) Fixed Charges Coverage Ratio. The Fixed Charge
Coverage Ratio for any four consecutive fiscal quarters
immediately preceding the date of determination shall not be
less than (x) 1.15 to 1.0 at any time during fiscal year
1998, (y) 1.25 to 1.0 at any time during fiscal year 1999
and (z) 1.35 to 1.0 at any time during fiscal year 2000.
(2) Debt to EBITDAR Ratio. The ratio of Debt plus six
times Operating Lease Payments for any four consecutive
fiscal quarters to EBITDAR for such period shall not be
greater than (x) 4.0 to 1.0 at the end of any fiscal quarter
during fiscal year 1998, (y) 3.75 to 1.0 at the end of any
fiscal quarter during fiscal year 1999 and (z) 3.5 to 1.0 at
the end of any fiscal quarter during fiscal year 2000.
(3) Capital Expenditures. The Borrower will not make
in the aggregate in any consecutive four fiscal quarters
Capital Expenditures that exceed $20,000,000.
(4) Net Worth. The Borrower will not permit its Net
Worth to be at any time less than the sum of (i) $37,250,000
plus (ii) 100% of cumulative Net Income, if positive, after
taxes for the period from June 1, 1996 through the date of
determination, less dividends actually paid during such
period, determined on a quarterly basis; provided, however,
the amount of dividends paid cannot exceed 125% of Net
Income for fiscal year ending 1998, 110% of Net Income for
fiscal year ending 1999 and 100% of Net Income thereafter.
(5) Investment and Loans. The Borrower will not,
directly or indirectly, purchase or otherwise acquire any
stock, security, obligation or evidence of indebtedness of,
make any capital contribution to, own any equity interest
in, or make any loan or advance to, any other person;
provided, however, that it may acquire and continue to hold
Permitted Investments.
(6) Disposition of Assets. The Borrower will not
without the consent of the Lender, sell, lease, transfer or
otherwise dispose of any substantial part of its properties
and assets.
(7) Consolidation or Merger. The Borrower will not
consolidate with or merge with or into another person or
permit any other person to merge into it other than (x) a
merger or consolidation in which the Borrower is the
surviving entity and no Default or Event of Default shall
occur as a result thereof and (y) any merger of Subsidiaries
with the Borrower or each other.
(8) Liens. The Borrower will not, nor (except to the
extent required in connection with the terms of purchase
money Debt or performance or surety bond obligations or as
required by law or any Governmental Authority having
jurisdiction over the Borrower) covenant with any other
person not to, incur, create, assume or permit to exist any
Lien upon any of its accounts receivable, contract rights,
chattel paper, inventory, equipment, instruments, general
intangibles or other personal or real property of any
character, whether now owned or hereafter acquired, other
than Liens that constitute Permitted Encumbrances.
(9) Sale of Receivables. The Borrower will not sell,
assign or discount, or grant or permit any Lien on, any of
its accounts receivable or any promissory note held by it,
with or without recourse, other than the discount of such
notes in the ordinary course of business for collection.
(10) Lease Obligations. The Borrower will not incur,
create, permit to exist or assume any commitment to make any
direct or indirect payment, as rent, under any lease, rental
or other arrangement for the use of property of any other
person, if immediately thereafter the aggregate of such
payments to be made by it would exceed $15,000,000
(exclusive of Technology Leases) plus up to $3,000,000 of
payments with respect to Technology Leases in any
consecutive four fiscal quarters.
(11) Indebtedness. The Borrower will not incur,
create, assume or permit to exist any Debt, except the
indebtedness evidenced by the Note, other Debt to the
Lender, purchase money obligations in respect of Liens
allowed under Section 7.8(8), Debt set forth in Schedule
7.8(11) attached hereto existing on the date hereof, Debt
not exceeding $500,000 in the aggregate and capitalized
lease obligations.
(12) Guaranties. The Borrower will not guarantee,
endorse, become surety for or otherwise in any way become or
be responsible for the indebtedness, liabilities or
obligations of any other person, whether by agreement to
purchase the indebtedness or obligations of any other
person, or agreement for the furnishing of funds to any
other person (directly or indirectly, through the purchase
of goods, supplies or services or by way of stock purchase,
capital contribution, working capital maintenance agreement,
advance or loan) or for the purpose of paying or discharging
the indebtedness or obligations of any other person, or
otherwise, except for the endorsement of negotiable
instruments in the ordinary course of business for
collection.
(13) Take or Pay Contracts. The Borrower will not
enter into or be a party to any contract for the purchase of
merchandise, materials, supplies or other property if such
contract provides that payment for such merchandise,
materials, supplies or other property shall be made
regardless of whether delivery of such merchandise,
materials, supplies or other property is ever made or
tendered.
(14) Sale-Leaseback. The Borrower will not enter into
any arrangement, directly or indirectly, with any person
whereby it sells or transfers any property, real, personal
or mixed, and used or useful in its business, whether now
owned or hereafter acquired, and thereafter rents or leases
such property or other property that it intends to use for
substantially the same purpose or purposes as the property
sold or transferred, unless (A) such transaction is entered
into on commercially reasonable terms on an arms'-length
basis; (B) the Borrower notifies the Lender of any proposed
lease transaction subject to the provisions of this
clause and advises the Lender as to the terms thereof,
within 30 days prior to the effective date of such lease;
and (C) the net cash proceeds (if any) to the Borrower, from
such transaction are immediately applied to reduce the
Credit Obligations.
(15) Permitted Acquisitions. The Borrower shall not
make in any given fiscal year any acquisition having a cost
in excess of $5,000,000, if, on the date of the acquisition
a Default or Event of Default would occur or would result
from such acquisition without the express prior written
consent of the Lender.
(16) Solvency. The Borrower will continue to be
Solvent.
SECTION 7.9 Continuation of Current Business. The Borrower
will not engage in any business other than the restaurant
business and substantially related businesses.
SECTION 7.10 Cooperation; Inspection of Properties. The
Borrower shall permit the Lender and its representatives to
inspect the Borrower's properties and assets (including all
Stores), and to inspect, review and audit the Borrower's books
and records from time to time and at any time, after reasonable
notice and at reasonable times all with minimal disruption.
SECTION 7.11 Use of Proceeds. The Borrower shall use the
proceeds exclusively for general corporate purposes and other
capital needs including expenditures involving the construction
of new Borrower-owned restaurants and/or renovations of existing
cafeterias.
SECTION 7.12 Transactions with Affiliates. The Borrower
will not, directly or indirectly, enter into any lease or other
transaction with any Affiliate on terms that are less favorable
to the Borrower entering into such lease or other transaction
than those that are typical of those obtained at the time from
persons who are not Affiliates of the Borrower.
SECTION 7.13 Change in Management. The Borrower will
promptly notify the Lender of any change with respect to the
members of the Board of Directors of the Borrower or any change
in the senior executive officers of the Borrower.
SECTION 7.14 Continuation of Current Business, Offices,
Name, etc. The Borrower will not (a) remove its principal place
of business or business records from Xxxxxxx County, Georgia,
unless the removal is pursuant to a merger, consolidation or
transfer of assets approved by the Lender; or (b) without
providing the Lender with prior written notice, change its name
or conduct its business in any name other than its current names;
or (c) enter into (1) any agreement whereby the management,
supervision or control of its business is delegated to or placed
in any person other than its governing body and officers or
(2) any contract or agreement whereby any of its principal
functions are delegated to or placed in any agent or independent
contractor.
SECTION 7.15 Creation or Acquisition of Subsidiaries. The
Borrower may from time to time create or acquire new Subsidiaries
in connection with permitted acquisitions allowed under Section
7.8(15) or otherwise in accordance with this Agreement, provided
that promptly (and in any event within fifteen (15) Business
Days) after the creation or direct or indirect acquisition by the
Borrower of any such new Subsidiary, such new Subsidiary will
execute and deliver to the Lender a Guaranty Agreement in the
form customarily used by the Lender in similar transactions and
all such other documents necessary to cause it to guaranty all
the Credit Obligations.
ARTICLE 8
EVENTS OF DEFAULT AND REMEDIES
SECTION 8.1 Events of Default. The following shall
constitute Events of Default under this Agreement:
(a) default in the due payment of any principal or
interest payable under the terms of any Note or any other
amount payable under this Agreement or any other of the
Credit Obligations or any other amount owed to the Lender
under or in connection with any of the Loan Documents and,
if such default is with respect to a payment other than a
principal payment, such nonpayment continues for five (5)
days after such due date; or
(b) the Borrower shall default in the observance or
performance of any provision in Sections 7.3, 7.8, 7.11,
7.12, 7.14 and 7.15; or
(c) the Borrower shall default in the performance or
observance of any provision of this Agreement, except those
covered by clauses (a) and (b) above, and shall not cure
such default within 30 days after the first to occur of (i)
the date the Lender gives written or telephonic notice of
the default to the Borrower or (ii) the date an Authorized
Representative of the Borrower otherwise has actual notice
thereof; or
(d) the Lender shall determine that any statement,
certification, representation or warranty contained herein,
or in any of the other Loan Documents or in any report,
financial statement, certificate or other instrument
delivered to the Lender by or on behalf of the Borrower, was
misleading or untrue in any material respect at the time it
was made; or
(e) default shall be made with respect to any Debt
(other than the Credit Obligations) of the Borrower when due
or the performance of any other obligation incurred in
connection with any Debt of the Borrower, if the effect of
such default is to accelerate the maturity of such Debt or
to permit the holder thereof to cause such Debt to become
due prior to its stated maturity, or any such Debt shall not
be paid when due, if the aggregate amount of all such Debt
involved exceeds $1,000,000; or
(f) the Borrower shall (i) apply for or consent to the
appointment of a receiver, trustee, liquidator or other
custodian of it or any of its properties or assets,
(ii) fail or admit in writing its inability to pay its debts
generally as they become due, (iii) make a general
assignment for the benefit of creditors, (iv) suffer or
permit an order for relief to be entered against it in any
proceeding under the federal Bankruptcy Code, or (v) file a
voluntary petition in bankruptcy, or a petition or an answer
seeking an arrangement with creditors or seeking to take
advantage of any bankruptcy, reorganization, insolvency,
readjustment of debt, dissolution or liquidation law or
statute, or an answer admitting the material allegations of
a petition filed against it in any proceeding under any such
law or statute, or if corporate or partnership action shall
be taken by the Borrower for the purpose of effecting any of
the foregoing; or
(g) a petition shall be filed, without the
application, approval or consent of any of the Borrower, in
any court of competent jurisdiction, seeking bankruptcy,
reorganization, rearrangement, dissolution or liquidation of
the Borrower or of all or a substantial part of the
properties or assets of the Borrower, or seeking any other
relief under any law or statute of the type referred to in
clause (v) of paragraph (f) above against the Borrower, or
the appointment of a receiver, trustee, liquidator or other
custodian of the Borrower or of all or a substantial part of
the properties or assets of the Borrower, and such petition
shall not have been dismissed within 60 days after the
filing thereof; or
(h) there shall occur the insolvency, dissolution,
liquidation or suspension of business of the Borrower or the
issuance of a writ of execution, attachment or garnishment
against the assets of the Borrower, and such writ of
execution, attachment or garnishment shall not be dismissed,
discharged or quashed within 30 days of issuance; or
(i) the Borrower shall default under any agreement
material to the operation of its business as conducted on
the Closing Date or proposed to be conducted which default
shall have a material adverse effect on the Borrower; or
(j) final judgment or judgments for the payment of
money in excess of an aggregate of $500,000 (in excess of
insurance coverages) shall be rendered against any of the
Borrower and the same shall remain undischarged for a period
of 30 days during which execution shall not be effectively
stayed; or
(k) any event with respect to a Plan shall have
occurred that would result in termination of such Plan (a
"Termination Event") and, 30 days after the Borrower has
notice thereof, (i) such "Termination Event" shall still
exist and (ii) the sum (determined as of the date of
occurrence of such "Termination Event") of the
"Insufficiency" of such Plan attributable to the Borrower
and the "Insufficiency" of any and all other Plans
attributable to the Borrower with respect to which a
"Termination Event" shall have occurred and then exist is
equal to or greater than $1,000,000; or
(l) the Borrower 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 attributable to Borrower which, when
aggregated with all other amounts required to be paid to
Multiemployer Plans in connection with "Withdrawal
Liability" (determined as of the date of such notification),
exceeds $1,000,000 or requires payments exceeding $250,000
per annum; or
(m) the Borrower 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, if
solely as a result of such reorganization or termination the
aggregate annual contributions attributable to Borrower and
its ERISA Affiliates to all Multiemployer Plans which are
then in reorganization or being terminated have been or will
be increased over the amounts contributed to such
Multiemployer Plans for the respective plan years which
include the date hereof by an amount exceeding $250,000; or
(n) this Agreement shall cease to be in full force and
effect or the Borrower shall take any action to claim that
this Agreement is not in full force and effect;
then, and in any such event and at any time thereafter, if such
Event of Default shall then be continuing,
(A) either or both of the following actions may be
taken: (i) the Lender may declare any obligation of the
Lender to make further Advances or issue Letters of Credit
terminated, whereupon the obligation of the Lender to make
further Advances or issue Letters of Credit, hereunder shall
terminate immediately, and (ii) the Lender shall declare by
notice to the Borrower any or all of the Credit Obligations
to be immediately due and payable, and the same, including
all interest accrued thereon and all other obligations of
the Borrower to the Lender, shall forthwith become
immediately due and payable without presentment, demand,
protest, notice or other formality of any kind, all of which
are hereby expressly waived, anything contained herein or in
any instrument evidencing the Credit Obligations to the
contrary notwithstanding; provided, however, that
notwithstanding the above, if there shall occur an Event of
Default under clauses (f) or (g) above, then the obligation
of the Lender to lend hereunder shall automatically
terminate and any and all of the Credit Obligations shall be
immediately due and payable without the necessity of any
action by the Lender or notice to the Borrower;
(B) the Lender may treat all then outstanding Letters
of Credit as if drafts in the full amount available to be
drawn thereunder had been properly drawn thereunder and paid
by the Lender and the Borrower had failed or refused to
reimburse the Lender for the amount so paid within the time
permitted under Section 0;
(C) the Borrower shall, promptly upon demand of the
Lender, deposit in cash with the Lender an amount equal to
the amount of all Letter of Credit Obligations then
outstanding, as collateral security for the repayment
thereof, which deposit shall be held by the Lender under the
provisions of Section 0; and
(D) the Lender shall exercise any and all rights and
remedies available to the Lender under the Loan Documents
and applicable law.
SECTION 8.2 Cumulative Rights. No right or remedy herein
conferred upon the Lender is intended to be exclusive of any
other rights or remedies contained herein or in any other Loan
Document, and every such right or remedy shall be cumulative and
shall be in addition to every other such right or remedy
contained herein and therein or now or hereafter existing at law
or in equity or by statute, or otherwise.
SECTION 8.3 No Waiver. No course of dealing between the
Borrower and the Lender or any failure or delay on the part of
the Lender in exercising any rights or remedies hereunder shall
operate as a waiver of any rights or remedies hereunder and no
single or partial exercise of any rights or remedies hereunder
shall operate as a waiver or preclude the exercise of any other
rights or remedies hereunder or of the same right or remedy on a
future occasion.
ARTICLE 9
MISCELLANEOUS
SECTION 9.1 Participations. The Borrower and the Lender
understand that the Lender may grant a participation in the Note,
Loans and interest in the Credit Obligations and the Loan
Documents to any Affiliate of the Lender, and all communications
with the Lender and the Borrower shall be solely with the Lender
and not with any participant. The Borrower agrees that any
participant or subparticipant may exercise any and all rights of
banker's lien or set-off with respect to the Borrower, as fully
as if such participant or subparticipant had made a loan directly
to the Borrower in the amount of the participation or
subparticipation given to such participant or subparticipant in
the Credit Obligations and the Loan Documents. For purposes of
this Section 0 only, the Borrower shall be deemed to be directly
obligated to each participant or subparticipant in the amount of
its participating interest in the amount of the principal of, and
interest on, the Credit Obligations. Nothing contained in this
section shall affect the Lender's right of set-off (under
Section 0 or applicable law) with respect to the entire amount of
the Credit Obligations, notwithstanding any such participation or
subparticipation. The Lender may divulge to any participant or
subparticipant all information, reports, financial statements,
certificates and documents obtained by the Lender from the
Borrower or any other person under any provisions of this
Agreement or the other Loan Documents or otherwise.
SECTION 9.2 Notices.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other document provided or permitted by this
Agreement or the other Loan Documents to be made upon, given or
furnished to, or filed with, the Borrower or the Lender must
(except as otherwise provided in this Agreement or the other Loan
Documents) be in writing and be delivered by one of the following
means: (1) by personal delivery at the hand delivery address
specified below, (2) by first-class, registered or certified
mail, postage prepaid and addressed as specified below, or (3) if
facsimile transmission facilities for such party are identified
below or pursuant to a separate notice from such party, sent by
facsimile transmission to the number specified below or in such
notice.
(b) The hand delivery address, mailing address and (if
applicable) facsimile transmission number for receipt of notice
or other documents by such parties are as set forth below the
signatures of the Borrower and the Lender on the attached
signature pages. Any of such parties may change its address or
facsimile transmission number for receiving any such notice or
other document by giving notice of the change to the other
parties referred to in this Section 0.
(c) Any such notice or other document shall be deemed
delivered when actually received by an officer, director, partner
or other legal representative of the party) at the address or
number specified pursuant to this Section 0, or, if sent by mail
and not earlier received, three Business Days after such notice
or document is deposited in the United States mail, addressed as
provided above.
(d) Five (5) Business Days' notice to the Borrower as
provided above shall constitute reasonable notification to the
Borrower when notification is required by law; provided, however,
that nothing contained in the foregoing shall be construed as
requiring five (5) Business Days' notice if, under applicable law
and the circumstances then existing, a shorter period of time
would constitute reasonable notice.
SECTION 9.3 No Waiver. No failure or delay on the part of
the Lender or the Borrower in the exercise of any right, power or
privilege hereunder shall operate as a waiver of any such right,
power or privilege nor shall any such failure or delay preclude
any other or further exercise thereof. The rights and remedies
herein provided are cumulative and not exclusive of any rights or
remedies provided by law.
SECTION 9.4 Setoff. Upon the occurrence and during the
continuance of any Event of Default the Lender is hereby
authorized at any time and from time to time, without notice to
the Borrower (any such notice being expressly waived by the
Borrower), to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held
and other indebtedness at any time owing by the Lender (including
any branches, agencies or Affiliates of the Lender, wherever
located) 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 any of the Loan Documents, irrespective
of whether or not any demand shall have been made under the Loan
Documents and although such obligations may be unmatured. The
Lender agrees promptly to notify the Borrower after any such
set-off and application, provided that the failure to give such
notice shall not affect the validity of such set-off and
application or impose any liability on the Lender. The rights of
the Lender under this Section 0 are in addition to all other
rights and remedies (including other rights of set-off or
pursuant to any banker's lien) that the Lender may have.
SECTION 9.5 Survival. All representations and warranties
made under this Agreement shall be deemed to be made, and shall
be true and correct, at and as of the Closing Date and, as
updated by the Borrower from time to time, the date of each
Advance or of issuance of a Letter of Credit. All covenants,
agreements, representations and warranties made in this Agreement
or in any of the other Loan Documents and in the certificates
delivered pursuant to any of the Loan Documents shall survive the
making by the Lender of the Loans and the execution and delivery
to the Lender of this Agreement, the Note and the other Loan
Documents and shall continue in full force and effect so long as
any of the Credit Obligations remain outstanding.
SECTION 9.6 Expenses. The Borrower shall promptly pay all
reasonable legal fees and expenses actually incurred by Lender
(including reasonable documented fees and expenses of counsel for
the Lender), insurance premiums, recording, filing and transfer
fees and taxes, and other costs and expenses related to the
Credit Obligations or required by any of the Loan Documents. If
the Borrower fails to pay any such cost or expense, the Lender
may, but shall have no obligation to, pay the same from the
Lender's funds or by making an Advance for such purpose, without
notice to the Borrower. The Borrower shall reimburse the Lender
on demand for, and shall indemnify and hold the Lender harmless
from and against, all such costs and expenses paid by the Lender
and all other reasonable costs and expenses (including the
reasonable fees and disbursements of the Lender's counsel) of
every kind incurred by the Lender in connection with (i) the
making or collection of the Credit Obligations, (ii) the
preparation and review of the Loan Documents (whether or not the
transactions provided for in this Agreement shall be consummated)
and any other documents related thereto, (iii) the enforcement of
any of the Loan Documents and the defense of any claim, cross-
claim or counterclaim asserted against the Lender by the Borrower
or any other person that relates to the Credit Obligations or the
Loan Documents and (iv) the transactions provided for in the Loan
Documents. Any amount paid or advanced by the Lender under this
section or the other Loan Documents shall bear interest until
paid at a rate equal to two percent (2%) in excess of the Quoted
Cost of Funds Rate in effect from time to time, or the highest
rate permitted by law, whichever is less. The Borrower shall pay
all costs and expenses of performing and satisfying their
obligations under this Agreement. The Borrower's obligations
under this Section 0 shall survive the payment in full of the
Credit Obligations and the termination of this Agreement.
SECTION 9.7 Counterparts. This Agreement may be executed
in any number of counterparts, each of which when so executed and
delivered shall be deemed an original, and it shall not be
necessary in making proof of this Agreement to produce or account
for more than one such fully-executed counterpart.
SECTION 9.8 Submission to Jurisdiction. The Borrower
irrevocably (a) acknowledges that this Agreement will be accepted
by the Lender and performed by the Borrower in the State of
Alabama; (b) submits to the jurisdiction of each state or federal
court sitting in Jefferson County, Alabama (collectively, the
"Courts") over any suit, action or proceeding arising out of or
relating to this Agreement or any of the other Loan Documents
(individually, an "Agreement Action"); (c) waives, to the fullest
extent permitted by law, any objection or defense that the
Borrower may now or hereafter have based on improper venue, lack
of personal jurisdiction, inconvenience of forum or any similar
matter in any Agreement Action brought in any of the Courts; (d)
agrees that non-applicable final judgment in any Agreement Action
brought in any of the Courts shall be conclusive and binding upon
the Borrower and may be enforced in any other court to the
jurisdiction of which the Borrower is subject, by a suit upon
such judgment; (e) consents to the service of process on the
Borrower in any Agreement Action by the mailing of a copy thereof
by registered or certified mail, postage prepaid, to the Borrower
at its address designated in or pursuant to Section 0; (f) agrees
that service in accordance with this Section 0 shall in every
respect be effective and binding on the Borrower to the same
extent as though served on the Borrower in person by a person
duly authorized to serve such process; and (g) AGREES THAT THE
PROVISIONS OF THIS SECTION, EVEN IF FOUND NOT TO BE STRICTLY
ENFORCEABLE BY ANY COURT, SHALL CONSTITUTE "FAIR WARNING" TO THE
BORROWER THAT THE EXECUTION OF THIS AGREEMENT MAY SUBJECT THE
BORROWER TO THE JURISDICTION OF EACH STATE OR FEDERAL COURT
SITTING IN JEFFERSON COUNTY, ALABAMA WITH RESPECT TO ANY
AGREEMENT ACTIONS, AND THAT IT IS FORESEEABLE BY THE BORROWER
THAT IT MAY BE SUBJECTED TO THE JURISDICTION OF SUCH COURTS AND
MAY BE SUED IN THE STATE OF ALABAMA IN ANY AGREEMENT ACTIONS.
Nothing in this Section 0 shall limit or restrict the Lender's
right to serve process or bring Agreement Actions in manners and
in courts otherwise than as herein provided.
SECTION 9.9 Termination. The termination of this Agreement
shall not affect any rights of the Borrower, the Lender or any
obligation of the Borrower, the Lender, arising prior to the
effective date of such termination, and the provisions hereof
shall continue to be fully operative until all transactions
entered into or rights created or obligations incurred prior to
such termination have been fully disposed of, concluded or
liquidated and the Credit Obligations arising prior to or after
such termination have been irrevocably paid in full. The rights
granted to the Lender for the benefit of the Lender hereunder and
under the other Loan Documents shall continue in full force and
effect, notwithstanding the termination of this Agreement, until
all of the Credit Obligations have been paid in full after the
termination hereof or the Borrower have furnished the Lender with
an indemnification satisfactory to the Lender with respect
thereto. All representation, warranties, covenants, waivers and
agreements contained herein shall survive termination hereof
until payment in full of the Credit Obligations unless otherwise
provided herein. Notwithstanding the foregoing, if after receipt
of any payment of all or any part of the Credit Obligations, the
Lender is for any reason compelled to surrender such payment to
any Person because such payment is determined to be void or
voidable as a preference, impermissible setoff, a diversion of
trust funds or for any other reason, this Agreement shall
continue in full force and the Borrower shall be liable to, and
shall indemnify and hold the Lender harmless for, the amount of
such payment surrendered until the Lender shall have been finally
and irrevocably paid in full. The provisions of the foregoing
sentence shall be and remain effective notwithstanding any
contrary action which may have been taken by the Lender in
reliance upon such payment, and any such contrary action so taken
shall be without prejudice to the Lender's rights under this
Agreement and shall be deemed to have been conditioned upon such
payment having become final and irrevocable. If on any date on
which the Borrower wishes to pay the Credit Obligations in full
and terminate this Agreement, there are any outstanding Letter of
Credit Borrowings, the Borrower shall, unless otherwise agreed by
the Lender in its sole discretion, make a cash prepayment to the
Lender on such date in an amount equal to the then-outstanding
Letter of Credit Borrowings, and the Lender shall hold such
prepayment in an interest-bearing cash collateral account in the
name and under the sole control of the Lender (which account
shall bear interest at the Lender's then-current rate for such
accounts) as security for the Reimbursement Obligations and other
Letter of Credit Obligations. Such account shall not constitute
an asset of the Borrower, subject to its rights therein under
this Section 0. The Lender shall from time to time debit such
account for the payment of the Letter of Credit Obligations as
the same become due and payable and shall promptly refund any
excess funds (including interest) held in said account to the
Borrower if and when no Letter of Credit Borrowings remain
outstanding hereunder and all of the Credit Obligations have been
paid in full. The Borrower shall remain liable for any Credit
Obligations in excess of the amounts paid from such account.
SECTION 9.10 Governing Law. All documents executed
pursuant to the transactions contemplated herein, including this
Agreement and each of the Loan Documents shall be deemed to be
contracts made under, and for all purposes shall be construed in
accordance with, the internal laws and judicial decisions of the
State of Alabama.
SECTION 9.11 Indemnification. In consideration of the
execution and delivery of this Agreement by the Lender, and so
long as the Lender has fulfilled its obligations hereunder, the
Borrower hereby indemnifies, exonerates and holds the Lender and
its respective officers, directors, employees and agents
(collectively, the "Indemnified Parties") free and harmless from
and against any and all actions, causes of action, claims, suits,
losses, costs, liabilities and damages, and expenses incurred in
connection therewith (irrespective of whether any such
Indemnified Party is a party to the action for which
indemnification hereunder is sought), including reasonable
documented attorneys' fees and disbursements (collectively, the
"Indemnified Liabilities"), actually incurred by the Indemnified
Parties or any of them as a result of, or arising out of, or
relating to any of the following:
(a) any transaction financed or to be financed in
whole or in part, directly or indirectly, with the proceeds
of any Loan;
(b) the entering into and performance of this
Agreement and any other Loan Document by any of the
Indemnified Parties;
(c) any investigation, litigation or proceeding
related to any environmental cleanup, audit, compliance or
other matter relating to the protection of the environment
with respect to property owned or operated by the Borrower
or to any action or inaction of the Borrower or the release
by the Borrower of any Hazardous Materials; or
(d) the presence on or under, or the escape, seepage,
leakage, spillage, discharge, emission, discharging or
releases from, any real property owned or operated by the
Borrower thereof of any Hazardous Materials (including any
losses, liabilities, damages, injuries, costs, expenses or
claims asserted or arising under any environmental laws),
regardless of whether caused by, or within the control of,
the Borrower,
except for any such Indemnified Liabilities arising for the
account of a particular Indemnified Party by reason of the
relevant Indemnified Party's gross negligence or willful
misconduct, and if and to the extent that the foregoing
undertaking may be unenforceable for any reason, the Borrower
hereby agrees to make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law.
SECTION 9.12 Agreement Controls. In the event that any
term of any of the Loan Documents other than this Agreement
conflicts with any term of this Agreement, the terms and
provisions of this Agreement shall control.
SECTION 9.13 Successors and Assigns. This Agreement shall
be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns; provided,
however, that the Borrower may not assign or transfer their
rights or obligations hereunder without the prior written consent
of the Lender. The Lender may not assign or transfer its
interest hereunder except as otherwise provided in this
Agreement.
SECTION 9.14 Severability. Any provision of any of the
Loan Documents that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or thereof or
affecting the validity or enforceability of such provision in any
other jurisdiction.
SECTION 9.15 Arbitration; Preservation and Limitation of
Remedies.
(a) If any dispute or controversy shall arise among the
parties hereto as to any matter arising out of or in connection
with the Loan Documents, the parties shall attempt in good faith
to resolve such controversy by mutual agreement. If such dispute
or controversy cannot be so resolved, it shall be resolved solely
in accordance with the provisions of this Section 0. Institution
of a judicial proceeding by a party does not waive the right of
that party to demand arbitration hereunder.
(b) Any dispute, controversy or claim between or among the
parties hereto (the "Disputing Parties"), including disputes,
controversies and claims arising out of or related to the Loan
Documents, or the breach thereof, and the subject matter hereof,
shall, except as provided in this Section 0, be settled by a
single arbitrator by arbitration in Birmingham, Alabama in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association as amended from time to time and as
modified by this Agreement.
(c) The arbitrator shall be selected by the Disputing
Parties within 15 days after demand for arbitration is made by a
Disputing Party. If the Disputing Parties are unable to agree on
an arbitrator within such period, then each Disputing Party shall
select one arbitrator, and each such arbitrator shall select a
third arbitrator and the dispute shall be settled by the panel
consisting of such three arbitrators (such panel, or the single
arbitrator agreed to by both parties, as the case may be, being
hereinafter referred to as the "Arbiter"). Each arbitrator shall
be a licensed attorney in the State of Alabama and shall possess
substantive legal experience with respect to the principal issues
in dispute.
(d) Except as may otherwise be agreed in writing by the
Disputing Parties or as ordered by the Arbiter upon substantial
justification, the hearing of the dispute shall be held and
concluded within 90 days of submission of the dispute to
arbitration. The Arbiter shall render its final award within 30
days following conclusion of the hearing. The Arbiter shall
state the factual and legal basis for the award. The decision of
the Arbiter shall be final and binding except as provided in the
Federal Arbitration Act, 9 U.S.C. Section 1 et. seq., and except
for errors of law based on findings of fact. Final judgment may
be entered upon such an award in any court of competent
jurisdiction, but entry of such judgment shall not be required to
make such award effective.
(e) Nothing in this Section 0 shall limit any right that
any party may otherwise have to seek to obtain preliminary
injunctive relief in order to preserve the status quo pending the
disposition of any such arbitration proceeding.
SECTION 9.16 Usury Laws. Any provision of this Agreement
or any of the other Loan Documents to the contrary
notwithstanding, the Borrower and the Lender agree that they do
not intend for the interest or other consideration provided for
in this Agreement and the other Loan Documents to be greater than
the maximum amount permitted by applicable law. Regardless of
any provision in this Agreement or any of the other Loan
Documents, the Lender shall not be entitled to receive, collect
or apply, as interest on the Credit Obligations, any amount in
excess of the maximum rate of interest permitted to be charged
under applicable law until such time, if any, as that interest,
together with all other interest then payable, falls within the
then applicable maximum lawful rate of interest. If the Lender
shall receive, collect or apply any amount in excess of the then
maximum rate of interest, the amount that would be excessive
interest shall be applied first to the reduction of the principal
amount of the Credit Obligations then outstanding in the inverse
order of maturity, and second, if such principal amount is paid
in full, any excess shall forthwith be returned to the Borrower.
In determining whether the interest paid or payable under any
specific contingency exceeds the highest lawful rate, the
Borrower and the Lender shall, to the maximum extent permitted
under applicable law, (a) characterize any nonprincipal payment
as an expense, fee or premium rather than as interest,
(b) exclude voluntary prepayments and the effects thereof,
(c) consider all the Credit Obligations as one general obligation
of the Borrower, and (d) "spread" the total amount of the
interest throughout the entire term of the Note so that the
interest rate is uniform throughout the entire term of the Note.
SECTION 9.17 Confidentiality of Information. The Borrower
may from time to time furnish to the Lender written information
which is identified when delivered as being confidential (the
"Confidential Information"). The Lender shall use reasonable
efforts to apply to any Confidential Information such procedures
regarding confidentiality as it provides generally to information
of that nature; provided, however, that the Lender may disclose
any Confidential Information delivered by the Borrower in
connection with or pursuant to this Agreement to (i) the Lender's
directors, officers, employees, agents and professional
consultants; (ii) any person to which the Lender sells or offers
to sell a participation as provided in Section 9.1 so long as
such person agrees in writing prior to receipt of the
Confidential Information to comply with this Section 9.17; (iii)
any federal or state regulatory authority having jurisdiction
over the Lender; and (iv) any other person to which such delivery
or disclosure may be necessary or appropriate (a) in compliance
with any law, rule or regulation applicable to such person, (b)
in response to any subpoena or other legal process, (c) in
connection with any litigation to which the Lender is a party or
(d) in order to protect the Lender's rights under this Agreement.
In connection with disclosures by the Lender pursuant to clause
(b) or (c) above, the Lender shall use its best efforts to notify
the Borrower prior to any such disclosure unless such
notification to Borrower is prohibited by court order or law.
IN WITNESS WHEREOF, the Borrower and the Lender has caused
this Credit Agreement to be executed and delivered by its duly
authorized corporate officer as of the day and year first above
written.
XXXXXXXX FRESH COOKING, INC.
By: /s/Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx
Its Chief Executive Officer
Hand Delivery and Mailing Address:
0000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
FAX: (000) 000-0000
Attention: Chief Financial Officer
AMSOUTH BANK OF ALABAMA
By: /s/ Xxxx X. Xxxx
Xxxx X. Xxxx
Its Vice President
Hand Delivery Address:
7th Floor, AmSouth-Sonat Tower
0000 Xxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
FAX: (000) 000-0000
Attention: Regional Banking
Department
Mailing Address:
Xxxx Xxxxxx Xxx 00000
Xxxxxxxxxx, Xxxxxxx 00000
FAX: (000) 000-0000
Attention: Regional Banking Department
EXHIBIT A
EXISTING LIENS
Debtor Secured Party Place of Filing File
Number
1. Xxxxxxxx Fresh Orix Credit State of Florida
970000012651
Cooking, Inc. Alliance, Inc.
2. Xxxxxxxx Fresh AT&T Credit Xxxxxxx County, 96-5203
Cooking, Inc. Corporation Georgia
3. Xxxxxxxx Fresh Pitney Xxxxx Credit DeKalb County, 96-
9722
Cooking, Inc. Corporation Georgia
4. Xxxxxxxx Fresh Orix Credit State of North
1406028
Cooking, Inc. Alliance, Inc. Carolina
5. Xxxxxxxx Fresh Orix Credit State of North
1441827
Cooking, Inc. Alliance, Inc. Carolina
6. Xxxxxxxx Fresh Orix Credit State of South
123326B
Cooking, Inc. Alliance, Inc. Carolina
7. Xxxxxxxx Fresh Orix Credit State of Tennessee 972-020879
Cooking, Inc. Alliance, Inc.
EXHIBIT B
XXXXXXXX FRESH COOKING, INC.
REQUEST FOR LIBOR LOAN OR INTEREST RATE ELECTION
Under the Credit Agreement dated as of June 19, 1997 (the
"Credit Agreement") entered into by XXXXXXXX FRESH COOKING, INC.,
a Georgia corporation (the "Borrower") and AMSOUTH BANK OF
ALABAMA, an Alabama banking corporation (the "Lender"):
Request for LIBOR Loan
Pursuant to Section 2.2 of the Credit Agreement, the
Borrower hereby requests an LIBOR Loan at the LIBOR-Based Rate as
follows:
(a) Amount of LIBOR Loan -
$_______________.
(b) Date as of which the
LIBOR Loan is to be made -
_________________.
(c) The maturity selected for
the Interest Period is [one month]
[two months] [three months] [six
months] (circle one, if
applicable).
Interest Rate Election
Pursuant to Section 3.2 of the Credit Agreement, the
Borrower makes the following interest rate election with respect
to the Segment in the principal amount of $______________ that
matures on ____________________.
(a) The amount of the Segment
to which the requested interest
rate will apply - $__________.
(b) The date on which the
selected interest rate will become
applicable - _______________.
(c) The maturity selected for
the Interest Period is [one month]
[two months] [three months] [six
months] (circle one, if
applicable).
In accordance with Section 6.1 of the Credit Agreement, the
presentation by the Borrower of this Request for LIBOR Loan or
Interest Rate Election constitutes a representation and warranty
by the Borrower to the Lender that no material adverse change in
the financial condition of the Borrower, as reflected in the
financial statements referred to in Section 5.3 of the Credit
Agreement, has occurred since the date of such financial
statements and that the representations and warranties of
Borrower contained in the Credit Agreement continue to be true
and correct (except the financial statements referred to in
Section 5.3 shall be deemed those most recently delivered to the
Lender pursuant to Section 7.3).
Dated ________________.
XXXXXXXX FRESH COOKING, INC.
By:
Its
EXHIBIT C
FORM OF
COMPLIANCE CERTIFICATE
Reference is made to that certain Credit Agreement between
XXXXXXXX FRESH COOKING, INC., a Georgia corporation (the
"Borrower") and AMSOUTH BANK OF ALABAMA, an Alabama banking
corporation (the "Lender"), dated as of June 19, 1997 (the
"Credit Agreement"). Capitalized terms used in this certificate
and the Schedule attached hereto, unless otherwise defined
herein, have the meanings assigned to them in the Credit
Agreement.
The undersigned does hereby certify to the Lender as
follows:
1. He is the duly elected and serving [Senior Vice
President - Finance or chief executive officer or president] of
the Borrower and is authorized to execute and deliver this
Certificate on behalf of the Borrower acting in that capacity.
2. He has reviewed the terms of the Credit Agreement and
the other Loan Documents and has made, or has caused to be made
under his supervision, a review of the transactions and
conditions of the Borrower through the date on which this
certificate is delivered to the Lender. To the best of his
knowledge, no Default or Event of Default under the Credit
Agreement has occurred and is continuing as of the date this
certificate is delivered to the Lender, except as follows:
[Give detailed description or insert "none" if appropriate].
3. The computations relating to the Borrower's financial
condition set forth on Schedule D-1 attached hereto were true and
correct as of , 199 (such date being the last
day of the most recently ended fiscal calendar quarter) and there
has been no material adverse change in such amounts upon which
such computations are based through the date on which this
certificate is delivered to the Lender.
___________________ of
XXXXXXXX FRESH COOKING, INC.
Dated: , 199
SCHEDULE C-1
Financial Covenant Compliance
The following financial covenants calculations are made as
of ______________, 199__ (the "Determination Date"):
1. The Fixed Charge Coverage Ratio at the
Determination Date for the most recent four quarter period
was _______ to 1.00, calculated as follows:
(a) Net Income after taxes for the most recent-ended
four fiscal quarters $___________
(b) Depreciation and amortization for the most
recent-ended four fiscal quarters ___________
(c) Interest Expense for the most recent-ended
four fiscal quarters ___________
(d) Income and Profit Taxes for the most recent-ended
four fiscal quarters ___________
(e) Operating Lease Payments for the most recent-ended
four fiscal quarters ___________
(f) Sum of (a) through (e) ___________
(g) Dividends actually paid for the most recent-ended
four fiscal quarters ___________
(h) (f) - (g) ___________
(i) Interest Expense for the most
recent-ended four fiscal quarters ___________
(j) Principal Maturities (not including
the Loans) for the next succeeding four
fiscal quarters following the Determination Date___________
(k) Operating Lease Payments for the most
recent-ended four fiscal quarters ___________
(l) Outstanding Loans on the Determination
Date times 20% ___________
(m) Sum of (i) through (l) ___________
(n) (h) , (m) ___________
Required: Not less than 1.15 to 1.0 at any time during
fiscal year 1998, 1.25 to 1.0 at any time during fiscal year
1999 and 1.35 to 1.0 at any time during fiscal year 2000.
2. The ratio at the Determination Date of Debt plus
six times Operating Lease Payments to EBITDAR for the most
recent-ended four fiscal quarters was ______ to 1.00,
calculated as follows:
(a) Outstanding Debt on the Determination Date___________
(b) Operating Lease Payments for the most recent-ended
four fiscal quarters ___________
(c) Line (b) multiplied by six ___________
(d) Sum of (a) and (c) ___________
(e) Net Income after taxes for the most recent-ended
four fiscal quarters ___________
(f) Income and Profit Taxes for the most recent-ended
four fiscal quarters ___________
(g) Interest Expense for the most recent-ended
four fiscal quarters ___________
(h) Depreciation and amortization for the most
recent-ended four fiscal quarters ___________
(i) Operating Lease Payments for the most
recent-ended four fiscal quarters ___________
(j) Sum of (e) through (i) (EBITDAR) ___________
(k) (d) , (j) ___________
Required: Not greater than 4.0 to 1.0 at the end of
any fiscal quarter during fiscal year 1998, 3.75 to 1.0 at
the end of any fiscal quarter during fiscal year 1999 and
3.5 to 1.0 at the end of any fiscal quarter during fiscal
year 2000.
3. During the four fiscal quarter period ended on the
Determination Date the Borrower incurred in the aggregate:
Capital Expenditures of $_________.
Required: Not in excess of $20,000,000.
4. (a) The amount of obligations for Operating Lease
Payments (exclusive of Technology Leases) for the four
fiscal quarter period ended on the Determination Date was
$__________.
Required: Not in excess of $15,000,000.
(b) The amount of obligations for Technology
Leases for the four fiscal quarter period ended on the
Determination Date was $___________
Required: Not in excess of $3,000,000.
5. Net Worth at the Determination Date was
$_________.
Required: Not less than the sum of (i) $37,250,000
plus (ii) 100% of cumulative Net Income, if positive, after
taxes for the period from June 1, 1996 through the date of
determination, less dividends actually paid during such
period, determined on a quarterly basis; provided, however,
the amount of dividends paid cannot exceed 125% of Net
Income for fiscal year ending 1998, 110% of Net Income for
fiscal year ending 1999 and 100% of Net Income thereafter.
6. The Maximum Credit Amount was $______________ at
the Determination Date, calculated as follows:
(a) Net Income after taxes for the most recent-
ended
four fiscal quarters ___________
(b) Interest Expense for the most recent-ended
four fiscal quarters ___________
(c) Income and Profit Taxes for the most recent-ended
four fiscal quarters ___________
(d) Depreciation and Amortization for the most recent-
ended
four fiscal quarters ___________
(e) Extraordinary Losses/Noncash Charges for the most
recent-ended four fiscal quarters ___________
(f) Sum of (a) through (e) ___________
(g) Dividends actually paid for the most recent-ended
four fiscal quarters ___________
(h) Extraordinary gains/Noncash Credits for the most
recent-ended four fiscal quarters ___________
(i) Sum of (g) and (h) ___________
(j) (f) minus (i) ___________
(k) Lesser of (j) and $30,000,000 (Maximum Credit
Amount) ___________
___________________ of
XXXXXXXX FRESH COOKING, INC.
Dated: , 199
TABLE OF CONTENTS
Page
ARTICLE 1
RULES OF CONSTRUCTION AND
DEFINITIONS
SECTION 1.1 1
ARTICLE 2
REVOLVING FACILITY TERMS
SECTION 2.1 Loans 13
SECTION 2.2 Advances 13
SECTION 2.3 Letter of Credit Borrowings 14
SECTION 2.4 Payments 16
SECTION 2.5 Prepayment 16
SECTION 2.6 Reduction in Revolving Facility 16
SECTION 2.7 Fees 17
SECTION 2.8 Extension of Termination Date 17
SECTION 2.9 Place and Time of Payments 17
ARTICLE 3
INTEREST
SECTION 3.1 Applicable Interest Rates 18
SECTION 3.2 Procedure for Exercising the LIBOR-
Based Rate 18
SECTION 3.3 Quoted Cost of Funds Rate 18
SECTION 3.4 LIBOR-Based Rate 19
SECTION 3.5 Post Maturity Interest 19
SECTION 3.6 Changes in Margin 19
ARTICLE 4
TERMINATION OF LIBOR-BASED RATE AND YIELD PROTECTION
SECTION 4.1 Termination of LIBOR-Based Rate;
Increase in
LIBOR-Based Rate; Reduction of Return 20
SECTION 4.2 Compensation 21
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
SECTION 5.1 Organization Powers, Existence, etc 22
SECTION 5.2 Authorization of Borrowing, etc 22
SECTION 5.3 Liabilities 22
SECTION 5.4 Taxes 22
SECTION 5.5 Litigation 22
SECTION 5.6 Agreements 23
SECTION 5.7 Use of Proceeds 23
SECTION 5.8 ERISA 23
SECTION 5.9 Subsidiaries 23
SECTION 5.10 Principal Place of Business 23
SECTION 5.11 Environmental Laws 24
SECTION 5.12 Disclosure 24
SECTION 5.13 Licenses 24
SECTION 5.14 Title to Properties 24
SECTION 5.15 Enforceability 25
SECTION 5.16 Consents, Registrations, Approvals,
etc. 25
SECTION 5.17 Solvency 25
SECTION 5.18 Patents, Trademarks 25
ARTICLE 6
GENERAL CONDITIONS OF LENDING
SECTION 6.1 Representations and Warranties 25
SECTION 6.2 No Default 26
SECTION 6.3 Required Items 26
SECTION 6.4 Authorized Representative
Certificates 26
SECTION 6.5 Other Supporting Documents 26
ARTICLE 7
GENERAL COVENANTS OF THE BORROWER
SECTION 7.1 Existence, Properties, etc 27
SECTION 7.2 Payment of Indebtedness, Taxes, etc 27
SECTION 7.3 Financial Statements, Reports, etc 28
SECTION 7.4 Litigation Notice 29
SECTION 7.5 Default Notice 29
SECTION 7.6 Further Assurances 29
SECTION 7.7 Insurance 29
SECTION 7.8 Covenants Regarding Financial
Condition 30
SECTION 7.9 Continuation of Current Business 32
SECTION 7.10 Cooperation; Inspection of
Properties 32
SECTION 7.11 Use of Proceeds 32
SECTION 7.12 Transactions with Affiliates 32
SECTION 7.13 Change in Management 32
SECTION 7.14 Continuation of Current Business,
Offices,
Name, etc. 32
SECTION 7.15 Creation or Acquisition of
Subsidiaries 32
ARTICLE 8
EVENTS OF DEFAULT AND REMEDIES
SECTION 8.1 Events of Default 33
SECTION 8.2 Cumulative Rights 36
SECTION 8.3 No Waiver 36
ARTICLE 9
MISCELLANEOUS
SECTION 9.1 Participations 36
SECTION 9.2 Notices 36
SECTION 9.3 No Waiver 37
SECTION 9.4 Setoff 37
SECTION 9.5 Survival 37
SECTION 9.6 Expenses 38
SECTION 9.7 Counterparts 38
SECTION 9.8 Submission to Jurisdiction 38
SECTION 9.9 Termination 39
SECTION 9.10 Governing Law 40
SECTION 9.11 Indemnification 40
SECTION 9.12 Agreement Controls 41
SECTION 9.13 Successors and Assigns 41
SECTION 9.14 Severability 41
SECTION 9.15 Arbitration; Preservation and
Limitation
of Remedies 41
SECTION 9.16 Usury Laws 42
SECTION 9.17 Confidentiality of Information 42
EXHIBITS
A Existing Liens
B Request for LIBOR Loan or Interest Rate Election
C Form of Compliance Certificate
Schedule C-1 - Financial Covenant Compliance
SCHEDULES
5.1(e) Tradenames
5.4 Taxes
5.5 Material Litigation
5.8(a) ERISA Plans
5.8(b) Plan Liabilities
5.8(c) Funding
7.8(11) Existing Indebtedness
[EXECUTION COPY]
CREDIT AGREEMENT
Dated as of June 19, 1997
Between
XXXXXXXX FRESH COOKING, INC.
and
AMSOUTH BANK OF ALABAMA
Relating to a
$30,000,000 Revolving Loan
