EXECUTION COPY
$135,000,000
CREDIT AGREEMENT
Dated as of September 6, 2000
Among
CAPTAIN D'S, INC.
as Borrower,
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THE INITIAL LENDERS, INITIAL ISSUING BANK AND
SWING LINE BANK NAMED HEREIN
as Initial Lenders, Initial Issuing Bank and Swing Line Bank,
-- ------- -------- ------- ------- ---- ----- ---- -----
BANK OF AMERICA, N.A.
as Administrative Agent
-- -------------- -----
and
BANC OF AMERICA SECURITIES LLC
as Sole Lead Arranger and Sole Book Manager
-- ---- ---- -------- --- ---- ---- -------
T A B L E O F C O N T E N T S
Page
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ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms......................................2
SECTION 1.02. Computation of Time Periods...............................27
SECTION 1.03. Accounting Terms..........................................27
ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES AND THE LETTERS OF
CREDIT
SECTION 2.01. The Advances..............................................28
SECTION 2.02. Making the Advances.......................................30
SECTION 2.03. Issuance of and Drawings and Reimbursement Under Letters
of Credit..............................................32
SECTION 2.04. Repayment of Advances.....................................33
SECTION 2.05. Termination or Reduction of the Commitments...............35
SECTION 2.06. Prepayments...............................................35
SECTION 2.07. Interest..................................................37
SECTION 2.08. Fees......................................................38
SECTION 2.09. Conversion of Advances....................................39
SECTION 2.10. Increased Costs, Etc......................................39
SECTION 2.11. Payments and Computations.................................41
SECTION 2.12. Taxes.....................................................42
SECTION 2.13. Sharing of Payments, Etc..................................45
SECTION 2.14. Use of Proceeds and Issuance of Letters of Credit.........45
SECTION 2.15. Defaulting Lenders........................................46
SECTION 2.16. Replacement of Certain Lenders............................48
ARTICLE III CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Initial Extension of Credit.......49
SECTION 3.02. Conditions Precedent to Each Borrowing and Issuance.......56
SECTION 3.03. Determinations Under Section 3.01.........................57
ARTICLE IV REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower............57
ARTICLE V COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants.....................................64
SECTION 5.02. Negative Covenants........................................78
SECTION 5.03. Reporting Requirements....................................87
SECTION 5.04. Financial Covenants.......................................90
ARTICLE VI EVENTS OF DEFAULT
SECTION 6.01. Events of Default.........................................92
SECTION 6.02. Actions in Respect of the Letters of Credit upon Default..95
ARTICLE VII THE ADMINISTRATIVE AGENT
SECTION 7.01. Authorization and Action..................................95
SECTION 7.02. Agent's Reliance, Etc.....................................96
SECTION 7.03. Bank of America and Affiliates............................97
SECTION 7.04. Lender Party Credit Decision..............................97
SECTION 7.05. Indemnification...........................................97
SECTION 7.06. Successor Agents..........................................99
ARTICLE VIII MISCELLANEOUS
SECTION 8.01. Amendments, Etc..........................................100
SECTION 8.02. Notices, Etc.............................................101
SECTION 8.03. No Waiver; Remedies......................................101
SECTION 8.04. Costs, Expenses..........................................102
SECTION 8.05. Right of Set-off.........................................103
SECTION 8.06. Binding Effect...........................................104
SECTION 8.07. Assignments and Participations...........................104
SECTION 8.08. Execution in Counterparts................................107
SECTION 8.09. No Liability of the Issuing Bank.........................107
SECTION 8.10. Confidentiality..........................................107
SECTION 8.11. Jurisdiction, Etc........................................108
SECTION 8.12. Governing Law............................................108
SECTION 8.13. Waiver of Jury Trial.....................................108
SCHEDULES
Schedule I -- Commitments and Applicable Lending Offices
Schedule II -- Applicable Margin
Schedule 3.01(a) -- Transaction Description
Schedule 3.01(e) -- Disclosed Litigation
Schedule 3.01(g) -- Third Party Consents and Approvals
Schedule 3.01(h) -- Disclosed Liabilities
Schedule 3.01(k)(xii) -- Florida Properties
Schedule 3.01(k)(xviii) -- States in which Local Counsel are Located
Schedule 3.01(l) -- Deeds
Schedule 3.01(m) -- Fixture Filings
Schedule 4.01(b) -- Subsidiaries
Schedule 4.01(m) -- Plans, Multiemployer Plans and Welfare Plans
Schedule 4.01(v) -- Environmental Lists
Schedule 4.01(aa) -- Open Years
Schedule 4.01(gg) -- Existing Debt
Schedule 4.01(hh) -- Surviving Debt
Schedule 4.01(ii) -- Owned Real Property
Schedule 4.01(jj) -- Leased Real Property
Schedule 4.01(kk) -- Investments
Schedule 5.01(n) -- Mortgaged Properties of Captain D's
Properties
Schedule 5.01(x)(i) -- Mortgaged Properties of the Borrower and its
Subsidiaries
Schedule 5.02(a) -- Existing Liens
Schedule 5.02(b) -- Restructuring Debt
EXHIBITS
Exhibit A-1 -- Form of Term B Note
Exhibit A-2 -- Form of Term C Note
Exhibit A-3 -- Form of Working Capital Note
Exhibit B -- Form of Notice of Borrowing
Exhibit C -- Form of Assignment and Acceptance
Exhibit D-1 -- Form of Security Agreement
Exhibit D-2 -- Forms of Pledge Agreement
Exhibit E -- Form of Intellectual Property Security
Agreement
Exhibit F -- Form of Mortgage
Exhibit G -- Form of Subsidiary Guaranty
Exhibit H-1 -- Form of Opinion of Borrower's Counsel
Exhibit H-2 -- Form of Opinion of Borrower's Special New
York Counsel
Exhibit H-3 -- Form of Opinion of Special Delaware Counsel
Exhibit I -- Form of Opinion of Special Intellectual
Property Counsel to the Administrative Agent
Exhibit J -- Form of Opinion of Local Counsel to
Administrative Agent
Exhibit K -- Form of Solvency Certificate
Exhibit L -- Subordination Terms
Exhibit N -- Form of Master Lease
CREDIT AGREEMENT
CREDIT AGREEMENT dated as of September 6, 2000 among CAPTAIN D'S, INC.,
a Delaware corporation (the "Borrower"), the banks, financial institutions
and other institutional lenders listed on the signature pages hereof as the
Initial Lenders (the "Initial Lenders"), BANK OF AMERICA, N.A. ("Bank of
America"), as the initial issuing bank (in such capacity, the "Initial
Issuing Bank"), Bank of America, as the swing line bank (in such capacity,
the "Swing Line Bank"), BANK OF AMERICA, as administrative agent and
collateral agent (together with any successor appointed pursuant to Article
VII, the "Administrative Agent") for the Lender Parties (as hereinafter
defined), and BANC OF AMERICA SECURITIES LLC ("BAS"), as sole lead arranger
and sole book manager (in such capacity, the "Arranger") for the Lender
Parties.
PRELIMINARY STATEMENT:
(1) Shoney's, Inc., a Tennessee corporation ("Shoney's"), intends
to consummate a restructuring (the "Restructuring") of its business and a
refinancing (the "Refinancing") of substantially all of the Debt (as defined
herein) of Shoney's and its subsidiaries.
(2) As part of the initial Restructuring, there shall be two
operating subsidiaries wholly-owned by Shoney's (the "Operating
Subsidiaries"). One Operating Subsidiary, the Borrower hereunder, will
operate the Captain D's business and the second Operating Subsidiary (the
"Commissary") will operate Shoney's food distribution operations.
(3) Shoney's and/or its Subsidiaries intends to finance its
operations through a separate $99 million real estate financing (the "Real
Estate Financing"), a separate $40 million dollar revolving credit facility
(the "Amended and Restated Senior Credit Facility") and a separate $10
million dollar senior bank financing that may be entered into by Shoney's
(the "CB&T Financing"), in which case the amount of the Amended and Restated
Senior Credit Facility will be reduced to $30 million. Shoney's further
intends to finance the Commissary through a separate $30 million revolving
credit facility (the "Commissary Financing"). The Restructuring, the
Refinancing, the Real Estate Financing, the Amended and Restated Senior
Credit Facility, the CB&T Financing, the Commissary Financing, the entering
into and funding of the Facilities hereunder and all related transactions are
hereinafter collectively referred to as the "Transaction".
(4) The Borrower has requested that the Lender Parties lend to it
up to $135,000,000 to finance in part the Restructuring and the Refinancing,
and to pay transaction fees and expenses and that, from time to time, the
Lender Parties lend to the Borrower to provide working capital and for other
general corporate purposes of the Borrower and its Subsidiaries and issue
Letters of Credit for the benefit of the Borrower. The Lender Parties have
indicated their willingness to agree to lend such amounts on the terms and
conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms
defined):
"Account Credit Amount" has the meaning specified in Section 2.01(d).
"Account Debit Amount" has the meaning specified in Section 2.01(d).
"Adjusted EBITDA" means, for any period, the sum, determined on a
Consolidated basis, of (a) net income (or net loss), plus (b) interest
expense, plus (c) income tax expense, plus (d) depreciation expense, plus (e)
amortization expense, plus (f) all non-cash losses and charges deducted in
arriving at such net income, plus (g) other one-time non-recurring
restructuring charges, litigation expenses and asset impairment charges not
to exceed $4,000,000 in the aggregate for the Fiscal Year ended October 31,
1999 and $2,500,000 in the aggregate for the Fiscal Year ended October 31,
2000, less (h) all gains included in arriving at such net income, less (i)
income tax benefits, in each case of the Borrower and its Subsidiaries,
determined in accordance with GAAP for such period.
"Administrative Agent" has the meaning specified in the recital of
parties to this Agreement.
"Administrative Agent's Account" means the account of the
Administrative Agent maintained by the Administrative Agent with Bank of
America at its office at 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxxx Center, 15th
Floor, Xxxxxxxxx, XX 00000, ABA No. 000000000, Account No. 136621-0000000,
Attention: Corporate Credit Services, Ref: Captain D's.
"Administrative Service Agreements" means, collectively, the
administrative services agreements entered into from time to time regarding
services to be provided by Shoney's to the Borrower and its Affiliates,
including, without limitation, accounting, real estate, human resources and
general and administrative services; provided that the total payments made in
the first full Fiscal Year following the Closing Date (and a prorated portion
prior thereto) may not exceed $9,500,000 and after such first full Fiscal
Year, increasing by $500,000 (or a prorated portion for a partial year) each
year thereafter.
"Advance" means a Term B Advance, a Term C Advance, a Working Capital
Advance, a Swing Line Advance or a Letter of Credit Advance.
"Affiliate" means, as to any Person, any other Person that, directly
or indirectly, controls, is controlled by or is under common control with
such Person or is a director or officer of such Person. For purposes of this
definition, the term "control" (including the terms "controlling",
"controlled by" and "under common control with") of a Person
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means the possession, direct or indirect, of the power to vote 10% or more of
the Voting Interests of such Person or to direct or cause the direction of
the management and policies of such Person, whether through the ownership of
Voting Interests, by contract or otherwise.
"Agreement" means this Credit Agreement.
"Agreement Value" means, for each Hedge Agreement, on any date of
determination, an amount determined by the Administrative Agent equal to:
(a) in the case of a Hedge Agreement documented pursuant to the Master
Agreement (Multicurrency-Cross Border) published by the International Swap
and Derivatives Association, Inc. (the "Master Agreement"), the amount, if
any, that would be payable by any Loan Party or any of its Subsidiaries to
its counterparty to such Hedge Agreement, as if (i) such Hedge Agreement was
being terminated early on such date of determination, (ii) such Loan Party or
Subsidiary was the sole "Affected Party", and (iii) the Administrative Agent
was the sole party determining such payment amount (with the Administrative
Agent making such determination pursuant to the provisions of the form of
Master Agreement); or (b) in the case of a Hedge Agreement traded on an
exchange, the xxxx-to-market value of such Hedge Agreement, which will be the
unrealized loss on such Hedge Agreement to the Loan Party or Subsidiary of a
Loan Party party to such Hedge Agreement determined by the Administrative
Agent based on the settlement price of such Hedge Agreement on such date of
determination, or (c) in all other cases, the xxxx-to-market value of such
Hedge Agreement, which will be the unrealized loss on such Hedge Agreement to
the Loan Party or Subsidiary of a Loan Party party to such Hedge Agreement
determined by the Administrative Agent as the amount, if any, by which (i)
the present value of the future cash flows to be paid by such Loan Party or
Subsidiary exceeds (ii) the present value of the future cash flows to be
received by such Loan Party or Subsidiary pursuant to such Hedge Agreement;
capitalized terms used and not otherwise defined in this definition shall
have the respective meanings set forth in the above described Master
Agreement.
"Amended and Restated Senior Credit Facility" has the meaning set
forth in Preliminary Statement No. 3.
"Applicable Lending Office" means, with respect to each Lender
Party, such Lender Party's Domestic Lending Office in the case of a Prime
Rate Advance and such Lender Party's Eurodollar Lending Office in the case of
a Eurodollar Rate Advance.
"Applicable Margin" means (x) in respect of the Working Capital
Facility, (i) for the period from the Closing Date until delivery of the
financial statements for the Fiscal Year ended October 29, 2000 pursuant to
Section 5.03(d), 2.75% per annum for Prime Rate Advances and 3.75% per annum
for Eurodollar Rate Advances and (ii) thereafter a percentage per annum
determined by reference to the Leverage Ratio as set forth on Schedule II
hereto, (y) in respect of the Term B Facility, 3% per annum for Prime Rate
Advances and 4% per annum for Eurodollar Rate Advances, and (z) in respect of
the Term C Facility, 3% per annum for Prime Rate Advances and 4% per annum
for Eurodollar Rate Advances, which percentages in the case of this clause
(z) shall be
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increased by 50 basis points on January 1, 2001 and on the last day of each
calendar quarter thereafter. The Applicable Margin for each Prime Rate
Advance shall be determined by reference to the Leverage Ratio in effect from
time to time and the Applicable Margin for each Eurodollar Rate Advance shall
be determined by reference to the Leverage Ratio in effect on the first day
of each Interest Period for such Advance; provided, however, that (A) no
change in the Applicable Margin shall be effective until five Business Days
after the date on which the Administrative Agent receives financial
statements pursuant to Section 5.03(c) or (d) and a certificate of the chief
financial officer or principal financial officer of the Borrower
demonstrating such Leverage Ratio, and (B) if the Borrower has not submitted
to the Administrative Agent the information described in clause (A) of this
proviso as and when required under Section 5.03(c) or (d), as the case may
be, the Applicable Margin shall be at Level 1 as set forth on Schedule II for
so long as such information has not been received by the Administrative
Agent.
"Appropriate Lender" means, at any time, with respect to (a) either
of the Term or Working Capital Facilities, a Lender that has a commitment
with respect to such Facility at such time, (b) the Letter of Credit
Facility, (i) the Issuing Bank and (ii) if the other Working Capital Lenders
have made Letter of Credit Advances pursuant to Section 2.03(c) that are
outstanding at such time, each such other Working Capital Lender and (c) the
Swing Line Facility, the Swing Line Bank.
"Approved Fund" means, with respect to any Lender that is a fund that
invests in bank loans, any other fund that invests in bank loans and is
advised or managed by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"Arranger" has the meaning specified in the recital of parties to
this Agreement.
"Assigned Agreement" has the meaning specified in the Security
Agreement.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender Party and an Eligible Assignee, and accepted by the
Administrative Agent, in accordance with Section 8.07 and in substantially
the form of Exhibit C hereto.
"Available Amount" of any Letter of Credit means, at any time, the
maximum amount available to be drawn under such Letter of Credit at such time
(assuming compliance at such time with all conditions to drawing).
"Bank Hedge Agreement" means any interest rate Hedge Agreement
required or permitted under Article V that is entered into by and between the
Borrower and any Hedge Bank.
"Bank of America" has the meaning specified in the recital of parties
to this Agreement.
"BAS" has the meaning specified in the recital of parties to this
Agreement.
"Bills of Sale" means the bills of sale for the transfer of equipment
from Shoney's and TPI to the Borrower in connection with the Restructuring.
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"Borrower" has the meaning specified in the recital of parties to
this Agreement.
"Borrower's Account" means the account of the Borrower maintained by
the Borrower with Bank of America at its office at 000 Xxxxx Xxxxx Xxxxxx,
Xxxxxxxxxxxx Center, 00xx Xxxxx, Xxxxxxxxx, XX 00000, Account No.
1366212250600.
"Borrowing" means a Term B Borrowing, a Term C Borrowing, a Working
Capital Borrowing or a Swing Line Borrowing.
"Business Day" means a day of the year on which banks are not
required or authorized by law to close in Charlotte, North Carolina or New
York, New York and, if the applicable Business Day relates to any Eurodollar
Rate Advances, on which dealings are carried on in the London interbank
market.
"Capital Expenditures" means, for any Person for any period, the sum
of (a) all expenditures made, directly or indirectly, by such Person or any
of its Subsidiaries during such period for equipment, fixed assets, real
property or improvements, or for replacements or substitutions therefor or
additions thereto, that have been or should be, in accordance with GAAP,
reflected as additions to property, plant or equipment on a Consolidated
balance sheet of such Person, excluding any such expenditures made by the
Borrower or any of its Subsidiaries with respect to intercompany transfers of
assets or property in connection with the Restructuring, plus (without
duplication) (b) the aggregate principal amount of all Debt (including
Obligations under Capitalized Leases) assumed or incurred in connection with
any such expenditures. For purposes of this definition, expenditures made
for assets of the type described in clause (a) of the immediately preceding
sentence that are purchased simultaneously with the trade-in of existing
assets or with insurance proceeds shall be included in Capital Expenditures
only to the extent of the gross amount of such purchase price less the credit
granted by the seller of such assets for the assets being traded in at such
time or the amount of such insurance proceeds, as the case may be.
"Capitalized Leases" means all leases that have been or should be,
in accordance with GAAP, recorded as capitalized leases.
"Captain D's Lease Program" means a program entered into by the
Borrower and its Subsidiaries for the expansion of the Captain D's system.
"Captain D's Properties" means Captain D's Properties, LLC, a limited
liability company organized under the laws of the State of Delaware, which is
a special purpose limited liability company.
"Captain D's Realty" means Captain D's Realty, LLC, a limited
liability company organized under the laws of the State of Delaware, which is
a special purpose limited liability company.
"Cash Equivalents" means any of the following, to the extent owned
by the Borrower or any of its Subsidiaries free and clear of all Liens other
than Liens created under the Collateral Documents and having a maturity of
not greater than one year from
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the date of acquisition thereof: (a) readily marketable direct obligations
of the Government of the United States or any agency or instrumentality
thereof or obligations unconditionally guaranteed by the full faith and
credit of the Government of the United States, (b) insured certificates of
deposit of or time deposits with any commercial bank that (i) is a Lender
Party or a member of the Federal Reserve System, (ii) issues (or the parent
of which issues) commercial paper rated as described in clause (c), (iii) is
organized under the laws of the United States or any State thereof and (iv)
has combined capital and surplus of at least $1 billion, (c) commercial paper
in an aggregate amount of no more than $1,000,000 per issuer outstanding at
any time, issued by any corporation organized under the laws of any State of
the United States and rated at least "Prime-1" (or the then equivalent grade)
by Xxxxx'x Investors Service, Inc. or "A-1" (or the then equivalent grade) by
Standard & Poor's Ratings Services, a division of The XxXxxx-Xxxx Companies,
Inc. or (d) any repurchase agreement entered into with either any Lender
Party or any other commercial banking institution of the nature referred to
in clause (b), secured by a fully perfected Lien in any obligation of the
type described in any of clauses (a) through (c), having a market value at
the time such repurchase agreement is entered into of not less than 100% of
the repurchase obligation thereunder of such Lender Party or other commercial
banking institution.
"Cash Management Account" has the meaning specified in Section
2.01(d).
"Cash Management Documentation" has the meaning specified in Section
2.01(d).
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended from time to time.
"CERCLIS" means the Comprehensive Environmental Response,
Compensation and Liability Information System maintained by the U.S.
Environmental Protection Agency.
"Closing Date" means the date hereof.
"Collateral" means all "Collateral" referred to in the Collateral
Documents and all other property that is or is intended to be subject to any
Lien in favor of the Administrative Agent for the benefit of the Secured
Parties.
"Collateral Documents" means the Security Agreement, the Pledge
Agreement, the Intellectual Property Security Agreement and the Mortgages and
any other agreement that creates or purports to create a Lien in favor of the
Administrative Agent for the benefit of the Secured Parties.
"Collateral Grantor" means the Borrower and each Subsidiary
Guarantor.
"Commissary" has the meaning set forth in Preliminary Statement No.
2.
"Commissary Financing" has the meaning set forth in Preliminary
Statement No. 3.
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"Commitment" means a Term B Commitment, a Term C Commitment, a
Working Capital Commitment or a Letter of Credit Commitment.
"Confidential Information" means information that the Borrower
furnishes to the Administrative Agent or any Lender Party on a confidential
basis, but does not include any such information that is or becomes generally
available to the public other than as a result of a breach by the
Administrative Agent or any Lender Party of its obligations hereunder or that
is or becomes available to the Administrative Agent or such Lender Party from
a source other than the Borrower that is not, to the best of the
Administrative Agent's or such Lender Party's knowledge, acting in violation
of a confidentiality agreement with the Borrower.
"Consolidated" refers to the consolidation of accounts in accordance
with GAAP.
"Contingent Insurance Obligations" has the meaning specified in
Section 5.02(b)(vi).
"Contingent Obligation" means, with respect to any Person, any
Obligation or arrangement of such Person to guarantee or intended to
guarantee any Debt, leases, dividends or other payment Obligations ("primary
obligations") of any other Person (the "primary obligor") in any manner,
whether directly or indirectly, including, without limitation, (a) the direct
or indirect guarantee, endorsement (other than for collection or deposit in
the ordinary course of business), co-making, discounting with recourse or
sale with recourse by such Person of the Obligation of a primary obligor, (b)
the Obligation to make take-or-pay or similar payments, if required,
regardless of nonperformance by any other party or parties to an agreement or
(c) any Obligation of such Person, whether or not contingent, (i) to purchase
any such primary obligation or any property constituting direct or indirect
security therefor, (ii) to advance or supply funds (A) for the purchase or
payment of any such primary obligation or (B) to maintain revolving credit or
equity capital of the primary obligor or otherwise to maintain the net worth
or solvency of the primary obligor, (iii) to purchase property, assets,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment
of such primary obligation or (iv) otherwise to assure or hold harmless the
holder of such primary obligation against loss in respect thereof. The
amount of any Contingent Obligation shall be deemed to be an amount equal to
the stated or determinable amount of the primary obligation in respect of
which such Contingent Obligation is made (or, if less, the maximum amount of
such primary obligation for which such Person may be liable pursuant to the
terms of the instrument evidencing such Contingent Obligation) or, if not
stated or determinable, the maximum reasonably anticipated liability in
respect thereof (assuming such Person is required to perform thereunder), as
determined by such Person in good faith.
"Conversion", "Convert" and "Converted" each refer to a conversion
of Advances of one Type into Advances of the other Type pursuant to Section
2.09 or 2.10.
"Current Assets" of any Person means all assets of such Person that
would, in accordance with GAAP, be classified as current assets of a company
conducting a
8
business the same as or similar to that of such Person, after deducting
adequate reserves in each case in which a reserve is proper in accordance
with GAAP.
"Current Liabilities" of any Person means (a) all Debt of such Person
that by its terms is payable on demand or matures within one year after the
date of creation (excluding any Debt renewable or extendible, at the option
of such Person, to a date more than one year from such date or arising under
a revolving credit or similar agreement that obligates the lender or lenders
thereunder to extend credit during a period of more than one year from such
date) and (b) all other items (including taxes accrued as estimated) that in
accordance with GAAP would be classified as current liabilities of such
Person.
"Debentures" means those certain subordinated and unsecured
debentures originally issued by TPI Enterprises, Inc. and subsequently
assumed by Shoney's pursuant to the Indenture in the original principal
amount of Fifty-One Million Five Hundred Sixty-Three Thousand Dollars
($51,563,000), which are designated 8.25% Convertible Subordinated Debentures
due 2002.
"Debt" of any Person means, without duplication, (a) all indebtedness
of such Person for borrowed money, (b) all Obligations of such Person for the
deferred purchase price of property or services (other than trade payables
not overdue by more than 60 days incurred in the ordinary course of such
Person's business), (c) all Obligations of such Person evidenced by notes,
bonds, debentures or other similar instruments, (d) all Obligations of such
Person created or arising under any conditional sale or other title retention
agreement with respect to property acquired by such Person (even though the
rights and remedies of the seller or lender under such agreement in the event
of default are limited to repossession or sale of such property), (e) all
Obligations of such Person as lessee under Capitalized Leases, (f) all
Obligations, contingent or otherwise, of such Person under acceptance, letter
of credit or similar facilities, (g) all Obligations of such Person to
purchase, redeem, retire, defease or otherwise make any payment in respect of
any Equity Interests in such Person or any other Person or any warrants,
rights or options to acquire such capital stock, valued, in the case of
Redeemable Preferred Interests, at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid dividends, (h) all
Obligations of such Person in respect of Hedge Agreements, valued at the
Agreement Value thereof, (i) all Contingent Obligations of such Person, and
(j) all Debt referred to in clauses (a) through (i) above of another Person
secured by (or for which the holder of such Debt has an existing right,
contingent or otherwise, to be secured by) any Lien on property (including,
without limitation, accounts and contract rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of such
Debt.
"Deed" shall mean a warranty deed or, in the case of fixtures, a quit
claim deed, in form sufficient under applicable law to convey to the Borrower
or Captain D's Properties the fee simple title to the real property described
in such Deed subject to the matters set forth therein and otherwise
satisfactory to the Lender Parties.
"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be given
or time elapse or both.
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"Defaulted Advance" means, with respect to any Lender Party at any
time, the portion of any Advance required to be made by such Lender Party to
the Borrower pursuant to Section 2.01 or 2.02 at or prior to such time which
has not been made by such Lender Party or by the Administrative Agent for the
account of such Lender Party pursuant to Section 2.02(e) as of such time. In
the event that a portion of a Defaulted Advance shall be deemed made pursuant
to Section 2.15(a), the remaining portion of such Defaulted Advance shall be
considered a Defaulted Advance originally required to be made pursuant to
Section 2.01 or 2.02 on the same date as the Defaulted Advance so deemed made
in part.
"Defaulted Amount" means, with respect to any Lender Party at any
time, any amount required to be paid by such Lender Party to the
Administrative Agent or any other Lender Party hereunder or under any other
Loan Document at or prior to such time which has not been so paid as of such
time, including, without limitation, any amount required to be paid by such
Lender Party to (a) the Swing Line Bank pursuant to Section 2.02(b) to
purchase a portion of a Swing Line Advance made by the Swing Line Bank, (b)
the Issuing Bank pursuant to Section 2.03(c) to purchase a portion of a
Letter of Credit Advance made by the Issuing Bank, (c) the Administrative
Agent pursuant to Section 2.02(e) to reimburse the Administrative Agent for
the amount of any Advance made by the Administrative Agent for the account of
such Lender Party, (d) any other Lender Party pursuant to Section 2.13 to
purchase any participation in Advances owing to such other Lender Party and
(e) the Administrative Agent or the Issuing Bank pursuant to Section 7.05 to
reimburse the Administrative Agent or the Issuing Bank for such Lender
Party's ratable share of any amount required to be paid by the Lender Parties
to the Administrative Agent or the Issuing Bank as provided therein. In the
event that a portion of a Defaulted Amount shall be deemed paid pursuant to
Section 2.15(b), the remaining portion of such Defaulted Amount shall be
considered a Defaulted Amount originally required to be paid hereunder or
under any other Loan Document on the same date as the Defaulted Amount so
deemed paid in part.
"Defaulting Lender" means, at any time, any Lender Party that, at
such time, (a) owes a Defaulted Advance or a Defaulted Amount or (b) shall
take any action or be the subject of any action or proceeding of a type
described in Section 6.01(f).
"Default Termination Notice" has the meaning specified in Section
2.01(e).
"Disclosed Litigation" has the meaning specified in Section 3.01(e).
"Domestic Lending Office" means, with respect to any Lender Party,
the office of such Lender Party specified as its "Domestic Lending Office"
opposite its name on Schedule I hereto or in the Assignment and Acceptance
pursuant to which it became a Lender Party, as the case may be, or such other
office of such Lender Party as such Lender Party may from time to time
specify as its "Domestic Lending Office" to the Borrower and the
Administrative Agent.
"Domestic Subsidiary" means any Subsidiary other than a Foreign
Subsidiary.
10
"Eligible Assignee" means (a) with respect to the Working Capital
Facility, (i) a Lender; (ii) an Affiliate of a Lender; (iii) a commercial
bank organized under the laws of the United States, or any State thereof, and
having total assets in excess of $500,000,000; (iv) a savings and loan
association or savings bank organized under the laws of the United States, or
any State thereof, and having total assets in excess of $500,000,000; (v) a
commercial bank organized under the laws of any other country that is a
member of the OECD or has concluded special lending arrangements with the
International Monetary Fund associated with its General Arrangements to
Borrow, or a political subdivision of any such country, and having total
assets in excess of $500,000,000, so long as such bank is acting through a
branch or agency located in the United States; (vi) the central bank of any
country that is a member of the OECD; (vii) a finance company, insurance
company or other financial institution or fund (whether a corporation,
partnership, trust or other entity) that is engaged in making, purchasing or
otherwise investing in commercial loans in the ordinary course of its
business and having total assets in excess of $250,000,000; and (viii) any
other Person approved by the Administrative Agent and, unless a Default has
occurred and is continuing at the time any assignment is effected in
accordance with Section 8.07, the Borrower, such approval not to be
unreasonably withheld or delayed, (b) with respect to the Term Facilities,
(i) any Person that is an Eligible Assignee under clause (a) of this
definition and (ii) any other Person that is a fund that regularly invests in
loans similar to the Term Advances, and (c) with respect to the Letter of
Credit Facility, a Person that is an Eligible Assignee under subclause (iii)
or (v) of clause (a) of this definition and is approved by the Administrative
Agent and, unless a Default has occurred and is continuing at the time any
assignment is effected in accordance with Section 8.07, the Borrower, such
approval not to be unreasonably withheld or delayed; provided, however, that
neither any Loan Party nor any Affiliate of a Loan Party shall qualify as an
Eligible Assignee under this definition.
"Environmental Action" means any action, suit, demand, demand letter,
claim, notice of non-compliance or violation, notice of liability or
potential liability, investigation, proceeding, consent order or consent
agreement relating in any way to any Environmental Law, any Environmental
Permit or Hazardous Material or arising from alleged injury or threat to
health, safety or the environment, including, without limitation, (a) by any
governmental or regulatory authority for enforcement, cleanup, removal,
response, remedial or other actions or damages and (b) by any governmental or
regulatory authority or third party for damages, contribution,
indemnification, cost recovery, compensation or injunctive relief.
"Environmental Law" means any federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, writ, judgment,
injunction, decree or judicial or agency interpretation, policy or guidance
relating to pollution or protection of the environment, health, safety or
natural resources, including, without limitation, those relating to the use,
handling, transportation, treatment, storage, disposal, release or discharge
of Hazardous Materials.
"Environmental Permit" means any permit, approval, identification
number, license or other authorization required under any Environmental Law.
11
"Equipment" has the meaning specified in the Security Agreement.
"Equity Interests" means, with respect to any Person, shares of
capital stock of (or other ownership or profit interests in) such Person,
warrants, options or other rights for the purchase or other acquisition from
such Person of shares of capital stock of (or other ownership or profit
interests in) such Person, securities convertible into or exchangeable for
shares of capital stock of (or other ownership or profit interests in) such
Person or warrants, rights or options for the purchase or other acquisition
from such Person of such shares (or such other interests), and other
ownership or profit interests in such Person (including, without limitation,
partnership, member or trust interests therein), whether voting or nonvoting,
and whether or not such shares, warrants, options, rights or other interests
are authorized or otherwise existing on any date of determination.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA Affiliate" means any Person that for purposes of Title IV of
ERISA is a member of the controlled group of any Loan Party, or under common
control with any Loan Party, within the meaning of Section 414 of the
Internal Revenue Code.
"ERISA Event" means (a) (i) the occurrence of a reportable event,
within the meaning of Section 4043 of ERISA, with respect to any Plan unless
the 30-day notice requirement with respect to such event has been waived by
the PBGC, or (ii) the requirements of subsection (1) of Section 4043(b) of
ERISA (without regard to subsection (2) of such Section) are met with respect
to a contributing sponsor, as defined in Section 4001(a)(13) of ERISA, of a
Plan, and an event described in paragraph (9), (10), (11), (12) or (13) of
Section 4043(c) of ERISA is reasonably expected to occur with respect to such
Plan within the following 30 days; (b) the application for a minimum funding
waiver with respect to a Plan; (c) the provision by the administrator of any
Plan of a notice of intent to terminate such Plan, pursuant to Section
4041(a)(2) of ERISA (including any such notice with respect to a plan
amendment referred to in Section 4041(e) of ERISA); (d) the cessation of
operations at a facility of any Loan Party or any ERISA Affiliate in the
circumstances described in Section 4062(e) of ERISA; (e) the withdrawal by
any Loan Party or any ERISA Affiliate from a Multiple Employer Plan during a
plan year for which it was a substantial employer, as defined in Section
4001(a)(2) of ERISA; (f) the conditions for imposition of a lien under
Section 302(f) of ERISA shall have been met with respect to any Plan; (g) the
adoption of an amendment to a Plan requiring the provision of security to
such Plan pursuant to Section 307 of ERISA; or (h) the institution by the
PBGC of proceedings to terminate a Plan pursuant to Section 4042 of ERISA, or
the occurrence of any event or condition described in Section 4042 of ERISA
that constitutes grounds for the termination of, or the appointment of a
trustee to administer, such Plan.
"Eurocurrency Liabilities" has the meaning specified in Regulation
D of the Board of Governors of the Federal Reserve System, as in effect from
time to time.
12
"Eurodollar Lending Office" means, with respect to any Lender Party,
the office of such Lender Party specified as its "Eurodollar Lending Office"
opposite its name on Schedule I hereto or in the Assignment and Acceptance
pursuant to which it became a Lender Party (or, if no such office is
specified, its Domestic Lending Office), or such other office of such Lender
Party as such Lender Party may from time to time specify as its "Eurodollar
Lending Office" to the Borrower and the Administrative Agent.
"Eurodollar Rate" means, for any Interest Period for all Eurodollar
Rate Advances comprising part of the same Borrowing, an interest rate per
annum equal to the rate per annum obtained by dividing (a) the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on
Telerate Page 3750 (or any successor page) as the London interbank offered
rate for deposits in U.S. dollars at 11:00 A.M. (London time) two Business
Days before the first day of such Interest Period for a period equal to such
Interest Period (provided that, if for any reason such rate is not available,
the term "Eurodollar Rate" shall mean, for any Interest Period for all
Eurodollar Rate Advances comprising part of the same Borrowing, the rate per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing
on Reuters Screen LIBO Page as the London interbank offered rate for deposits
in Dollars at approximately 11:00 A.M. (London time) two Business Days prior
to the first day of such Interest Period for a term comparable to such
Interest Period; provided, however, if more than one rate is specified on
Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of
all such rates) by (b) a percentage equal to 100% minus the Eurodollar Rate
Reserve Percentage for such Interest Period.
"Eurodollar Rate Advance" means an Advance that bears interest as
provided in Section 2.07(a)(ii).
"Eurodollar Rate Reserve Percentage" means, for any Interest Period
for all Eurodollar Rate Advances comprising part of the same Borrowing, the
reserve percentage applicable two Business Days before the first day of such
Interest Period under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor) for determining
the maximum reserve requirement (including, without limitation, any
emergency, supplemental or other marginal reserve requirement) for a member
bank of the Federal Reserve System in New York City with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities (or
with respect to any other category of liabilities that includes deposits by
reference to which the interest rate on Eurodollar Rate Advances is
determined) having a term equal to such Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
"Excess Cash Flow" means, for any period, the amount equal to the sum
of (i) Consolidated net income (or loss) of the Borrower and its Subsidiaries
for such period plus (ii) the aggregate amount of all non-cash charges
deducted in arriving at such Consolidated net income (or loss) less (iii) the
aggregate amount of all gains relating to any sale of assets added in
arriving at such Consolidated net income (or loss) less (iv) the aggregate
amount of all non-cash credits included in arriving at such Consolidated net
13
income (or loss) less (v) the aggregate amount of cash Capital Expenditures
made by the Borrower and its Subsidiaries during such period less (vi) the
aggregate principal amount of all scheduled amortization payments in respect
of Debt paid by the Borrower and its Subsidiaries during such period and the
aggregate principal amount of all Debt optionally prepaid by the Borrower and
its Subsidiaries during such period (with, in the case of revolving credit
facilities, a corresponding reduction in the commitments under such revolving
credit facilities) less (vii) proceeds from sales under the Captain D's Lease
Program received during such period; provided such proceeds are reinvested in
a new company unit that is in a similar line of business as the Borrower or
any of its Subsidiaries within 12 months after the date of such sale less
(viii) any adjustments with respect to the Restructuring made to Consolidated
net income (or loss) of the Borrower and its Subsidiaries during such period
less (ix) any Extraordinary Receipt applied to the repayment of the
Facilities pursuant to Section 2.06(b)(ii)(B) to the extent such
Extraordinary Receipt was added in arriving at such Consolidated net income
(or loss).
"Existing Debt" has the meaning specified in Section 4.01(gg) hereof.
"Extraordinary Receipt" means any cash received by or paid to or for
the account of any Person not in the ordinary course of business, including,
without limitation, tax refunds, pension plan reversions, proceeds of
insurance (other than proceeds of business interruption insurance to the
extent such proceeds constitute compensation for lost earnings), condemnation
awards (and payments in lieu thereof), indemnity payments; provided, however,
that an Extraordinary Receipt shall not include Net Cash Proceeds nor shall
it include cash receipts received from proceeds of insurance, condemnation
awards (or payments in lieu thereof) or indemnity payments to the extent that
such proceeds, awards or payments (A) in respect of loss or damage to
equipment, fixed assets or real property are applied (or in respect of which
expenditures were previously incurred) to replace or repair the equipment,
fixed assets or real property in respect of which such proceeds were received
in accordance with the terms of the Loan Documents, so long as such
application is made within 12 months after the occurrence of such damage of
loss or (B) are received by any Person in respect of any third party claim
against such Person and applied to pay (or to reimburse such Person for its
prior payment of) such claim and the costs and expenses of such Person with
respect thereto.
"Facility" means the Term B Facility, the Term C Facility, the
Working Capital Facility, the Swing Line Facility or the Letter of Credit
Facility
.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted average
of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for
such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate is
not so published for any day that is a Business Day, the average of the
quotations for such day for such transactions received by the Administrative
Agent from three Federal funds brokers of recognized standing selected by it.
14
"Fiscal Year" means a fiscal year of the Borrower and its
Subsidiaries ending on the last Sunday in October in any calendar year.
"Foreign Subsidiary" means a Subsidiary organized under the laws of
a jurisdiction other than the United States or any State thereof or the
District of Columbia.
"Funded Debt" of any Person means Debt of such Person other than (i)
Debt in respect of Contingent Obligations and (ii) Debt under letters of
credit.
"GAAP" has the meaning specified in Section 1.03.
"Hazardous Materials" means (a) petroleum or petroleum products, by-
products or breakdown products, radioactive materials, asbestos-containing
materials, polychlorinated biphenyls and radon gas and (b) any other
chemicals, materials or substances designated, classified or regulated as
hazardous or toxic or as a pollutant or contaminant under any Environmental
Law.
"Hedge Agreements" means interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap
agreements, currency future or option contracts and other hedging agreements.
"Hedge Bank" means any Lender Party or any of its Affiliates in its
capacity as a party to a Bank Hedge Agreement.
"Indemnified Party" has the meaning specified in Section 8.04(b).
"Indenture" shall mean that certain Indenture dated as of July 15,
1992, as amended by that First Supplemental Indenture dated as of September
9, 1996, between and among Shoney's (as successor to TPI Enterprises, Inc.
pursuant to the First Supplemental Indenture), TPI and The Bank of New York
as trustee, pursuant to which the Debentures were issued.
"Information Memorandum" means the Offering Memorandum dated July
2000 used by the Arranger and the Administrative Agent in connection with the
syndication of the Commitments.
"Initial Extension of Credit" means the earlier to occur of the
initial Borrowing and the initial issuance of a Letter of Credit hereunder.
"Initial Issuing Bank" has the meaning specified in the recital of
parties to this Agreement.
"Initial Lenders" has the meaning specified in the recital of parties
to this Agreement.
"Insufficiency" means, with respect to any Plan, the amount, if any,
of its unfunded benefit liabilities, as defined in Section 4001(a)(18) of
ERISA.
15
"Intellectual Property Security Agreement" has the meaning specified
in Section 3.01(k)(ix).
"Interest Expense" means, as of the last day of any fiscal quarter,
cash interest expense of the Borrower and its Subsidiaries on a Consolidated
basis for the most recently ended four fiscal quarters; provided, however,
that (x) for the fiscal quarter ended February 18, 2001 Interest Expense
shall be the product of cash interest expense for such fiscal quarter times
a fraction the numerator of which is 13 and the denominator of which is 4,
(y) for the fiscal quarter ended May 13, 2001 Interest Expense shall be the
product of cash interest expense for the two fiscal quarters then ended times
a fraction the numerator of which is 13 and the denominator of which is 7 and
(z) for the fiscal quarter ended August 5, 2001 Interest Expense shall be the
product of cash interest expense for the three fiscal quarters then ended
times a fraction the numerator of which is 13 and the denominator of which is
10.
"Interest Period" means, for each Eurodollar Rate Advance comprising
part of the same Borrowing, the period commencing on the date of such
Eurodollar Rate Advance or the date of the Conversion of any Prime Rate
Advance into such Eurodollar Rate Advance, and ending on the last day of the
period selected by the Borrower pursuant to the provisions below and,
thereafter, each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the last day of the
period selected by the Borrower pursuant to the provisions below. The
duration of each such Interest Period shall be one, two, three or six months,
as the Borrower may, upon notice received by the Administrative Agent not
later than 11:00 A.M. (Charlotte, North Carolina time) on the third Business
Day prior to the first day of such Interest Period, select; provided,
however, that:
(a) the Borrower may not select any Interest Period with
respect to any Eurodollar Rate Advance under a Facility that ends
after any principal repayment installment date for such Facility
unless, after giving effect to such selection, the aggregate
principal amount of Prime Rate Advances and of Eurodollar Rate
Advances having Interest Periods that end on or prior to such
principal repayment installment date for such Facility shall be at
least equal to the aggregate principal amount of Advances under such
Facility due and payable on or prior to such date;
(b) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next
succeeding Business Day, provided, however, that, if such extension
would cause the last day of such Interest Period to occur in the next
following calendar month, the last day of such Interest Period shall
occur on the next preceding Business Day; and
(c) whenever the first day of any Interest Period occurs on
a day of an initial calendar month for which there is no numerically
corresponding day in the calendar month that succeeds such initial
calendar month by the number of months equal to the number of months
in such Interest Period, such Interest Period shall end on the last
Business Day of such succeeding calendar month.
16
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"Inventory" has the meaning specified in the Security Agreement.
"Investment" in any Person means any loan or advance to such Person,
any purchase or other acquisition of any Equity Interests or Debt or the
assets comprising a division or business unit or a substantial part of all of
the business of such Person, any capital contribution to such Person or any
other direct or indirect investment in such Person, including, without
limitation, any acquisition by way of merger or consolidation and any
arrangement pursuant to which the investor incurs Debt of the types referred
to in clause (i) or (j) of the definition of "Debt" in respect of such
Person. The amount of any Investment shall be the original principal or
capital amount thereof less the sum of (i) all cash returns of principal or
equity thereon and (ii) in the case of any guaranty, any reduction in the
aggregate amount of liability under such guaranty to the extent that such
reduction is made strictly in accordance with the terms of such guaranty
(and, in each case, without adjustment by reason of the financial condition
of such other Person).
"Issuing Bank" means the Initial Issuing Bank and each Eligible
Assignee to which the Letter of Credit Commitment hereunder has been assigned
pursuant to Section 8.07 so long as each such Working Capital Lender or each
such Eligible Assignee expressly agrees to perform in accordance with their
terms all of the obligations that by the terms of this Agreement are required
to be performed by it as an Issuing Bank and notifies the Administrative
Agent of its Applicable Lending Office and the amount of its Letter of Credit
Commitment (which information shall be recorded by the Administrative Agent
in the Register), for so long as such Initial Issuing Bank, Working Capital
Lender or Eligible Assignee, as the case may be, shall have a Letter of
Credit Commitment.
"L/C Cash Collateral Account" has the meaning specified in the
Security Agreement.
"L/C Related Documents" has the meaning specified in Section
2.04(d)(ii)(A).
"Lender Party" means any Lender, the Issuing Bank or the Swing Line
Bank.
"Lenders" means the Initial Lenders and each Person that shall become
a Lender hereunder pursuant to Section 8.07 for so long as such Initial
Lender or Person, as the case may be, shall be a party to this Agreement.
"Letter of Credit" has the meaning specified in Section 2.01(e).
"Letter of Credit Advance" means an advance made by the Issuing Bank
or any Working Capital Lender pursuant to Section 2.03(c).
"Letter of Credit Agreement" has the meaning specified in Section
2.03(a).
"Letter of Credit Commitment" means, with respect to the Issuing Bank
at any time, the amount set forth opposite the Issuing Bank's name on
Schedule I hereto under
17
the caption "Letter of Credit Commitment" or, if the Issuing Bank has entered
into one or more Assignments and Acceptances, set forth for the Issuing Bank
in the Register maintained by the Administrative Agent pursuant to Section
8.07(d) as the Issuing Bank's "Letter of Credit Commitment", as such amount
may be reduced at or prior to such time pursuant to Section 2.05.
"Letter of Credit Facility" means, at any time, an amount equal to
the amount of the Issuing Bank's Letter of Credit Commitment at such time, as
such amount may be reduced at or prior to such time pursuant to Section 2.05.
"Leverage Ratio" means, as of the end of each fiscal quarter of the
Borrower, a ratio of (i) Funded Debt of the Borrower and its Subsidiaries as
at the end of such fiscal quarter less the excess of (x) the sum of cash and
Cash Equivalents held by the Borrower and its Subsidiaries at the end of such
fiscal quarter in excess of $1,000,000 to (ii) Consolidated Adjusted EBITDA
of the Borrower and its Subsidiaries for the four fiscal quarter period
ending at the end of such fiscal quarter.
"Lien" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance on
title to real property.
"Loan Documents" means (a) for purposes of this Agreement and the
Notes and any amendment or modification hereof or thereof and for all other
purposes other than for purposes of the Subsidiary Guaranty and the
Collateral Documents, (i) this Agreement, (ii) the Notes, (iii) the
Subsidiary Guaranty, (iv) the Collateral Documents and (v) each Letter of
Credit Agreement and (b) for purposes of the Subsidiary Guaranty and the
Collateral Documents, (i) this Agreement, (ii) the Notes, (iii) the
Subsidiary Guaranty, (iv) the Collateral Documents, (v) each Letter of Credit
Agreement and (vi) each Bank Hedge Agreement, in each case as amended or
otherwise modified from time to time.
"Loan Parties" means the Borrower and the Subsidiary Guarantors.
"XXXXX" means the $177,358,000 at maturity of zero coupon liquid
yield option notes due 2004 issued by Shoney's.
"Maintenance Capital Expenditures" means, as of the end of each
fiscal quarter of the Borrower, the greater of (i) $8 million or (ii) the
aggregate amount of cash Capital Expenditures made by the Borrower and its
Subsidiaries during the four fiscal quarter period ending at the end of such
fiscal quarter in connection with the operation and maintenance of
restaurants as set forth in a detailed summary of Maintenance Capital
Expenditures and total Capital Expenditures delivered by the Borrower to the
Administrative Agent and the Lender Parties together with the annual
financial statements required to be delivered pursuant to Section 5.03(d).
"Management and Operating Agreements" means (i) the Management and
Operating Agreement dated the Closing Date between the Borrower and TPI and
(ii) the
18
Management and Operating Agreement dated the Closing Date between the
Borrower and Shoney's.
"Margin Stock" has the meaning specified in Regulation U.
"Master Lease" means, collectively, the Master Lease Agreement
described in Section 3.01(n) and any other master lease agreement entered
into by the Borrower on substantially similar terms as the preceding master
lease agreement.
"Material Adverse Change" means any material adverse change in the
business, assets, liabilities (actual or contingent), operations, condition
(financial or otherwise) or prospects of the Borrower or any of its
Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, liabilities (actual or contingent), operations, condition
(financial or otherwise) or prospects of the Borrower or any of its
Subsidiaries taken as a whole, (b) the rights and remedies of the
Administrative Agent or any Lender Party under any Loan Document or any
Related Document or (c) the ability of any Loan Party to perform its
Obligations under any Related Document or under any Loan Document to which it
is or is to be a party.
"Mortgage" has the meaning specified in Section 3.01(k)(xii).
"Mortgage Policy" has the meaning specified in Section
3.01(k)(xii)(A).
"Multiemployer Plan" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate
is making or accruing an obligation to make contributions, or has within any
of the preceding five plan years made or accrued an obligation to make
contributions.
"Multiple Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any
Loan Party or any ERISA Affiliate and at least one Person other than the Loan
Parties and the ERISA Affiliates or (b) was so maintained and in respect of
which any Loan Party or any ERISA Affiliate could have liability under
Section 4064 or 4069 of ERISA in the event such plan has been or were to be
terminated.
"Net Cash Proceeds" means, with respect to any sale, transfer or
other disposition (other than by lease but including by way of the occurrence
of an event that gives rise to insurance proceeds as contemplated by Section
5.01(d)(i)) of any asset or the sale or issuance of any Debt or Equity
Interests (excluding proceeds received through payroll deductions pursuant to
employee stock purchase plans, director or employee option plans or other
employee benefit plans, provided that the aggregate amount of all such
proceeds excluded from the calculation of "Net Cash Proceeds" from and after
the date hereof shall not exceed $2,500,000), the aggregate amount of cash
received from time to time (whether as initial consideration or through
payment or disposition of deferred consideration) by or on behalf of such
Person in connection with such transaction after deducting therefrom only
(without duplication) (a) reasonable and customary brokerage
19
fees and commissions for similar transactions, underwriting fees and
discounts, legal fees, finder's fees and other similar fees and commissions
estimated to be paid in connection with or as a result of such transaction
and (b) the amount of taxes estimated to be paid in connection with or as a
result of such transaction and (c) the amount of any Debt secured by a Lien
on such asset that, by the terms of such transaction, is required to be
repaid upon such disposition, in each case to the extent, but only to the
extent, that the amounts so deducted are, at the time of receipt of such
cash, actually paid to a Person that is not an Affiliate of such Person or
any Loan Party or any Affiliate of any Loan Party and are properly
attributable to such transaction or to the asset that is the subject thereof
and (d) the amount of consideration paid in connection with the purchase,
repurchase or buy-out of leases or the exercise of any option to purchase
real estate, improvements, fixtures or equipment used in its operations by
the Borrower or its Subsidiaries; provided such purchase, re-purchase, buy-
out or exercise of such option is made within six months of the receipt of
such cash proceeds with respect thereto and (e) the amount of proceeds from
the sale of shares of preferred stock or subordinated debt to finance
research and development expenditures of the Borrower; provided no Default or
Event of Default exists immediately before and after giving effect to such
transaction; provided, however, that if any amounts described in clauses (a)
and (b) estimated to be paid in connection with or as a result of any such
transaction are not paid within one year following the date of such
transaction, the excess of such estimated amounts over the amount of such
fees, discounts, commissions and taxes paid within such one-year period in
connection with or as a result of such transaction shall be "Net Cash
Proceeds" at the end of such one-year period; provided further that Net Cash
Proceeds that are comprised of insurance proceeds shall not include any such
insurance proceeds to the extent such insurance proceeds are applied to the
replacement of the asset or property in respect of which such insurance
proceeds were received, so long as such application is made within 12 months
after the occurrence of the event giving rise to such insurance proceeds;
provided further that Net Cash Proceeds in respect of any sale, transfer or
other disposition of any asset shall exclude proceeds received from sales
under the Captain D's Lease program to the extent such proceeds are
reinvested in a new company unit that is in a similar line of business as the
Borrower or any of its Subsidiaries, so long as such proceeds are so
reinvested within 12 months after the date of such sale.
"Note" means a Term B Note, a Term C Note or a Working Capital Note.
"Notice of Borrowing" has the meaning specified in Section 2.02(a).
"Notice of Issuance" has the meaning specified in Section 2.03(a).
"Notice of Renewal" has the meaning specified in Section 2.01(e).
"Notice of Termination" has the meaning specified in Section 2.01(e).
"NPL" means the National Priorities List under CERCLA.
"Obligation" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including,
without limitation, any liability of
20
such Person on any claim, whether or not the right of any creditor to payment
in respect of such claim is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, disputed, undisputed, legal, equitable, secured
or unsecured, and whether or not such claim is discharged, stayed or
otherwise affected by any proceeding referred to in Section 6.01(f). Without
limiting the generality of the foregoing, the Obligations of any Loan Party
under the Loan Documents include (a) the obligation to pay principal,
interest, Letter of Credit commissions, charges, expenses, fees, attorneys'
fees and disbursements, indemnities and other amounts payable by such Loan
Party under any Loan Document and (b) the obligation of such Loan Party to
reimburse any amount in respect of any of the foregoing that any Lender
Party, in its sole discretion, may elect to pay or advance on behalf of such
Loan Party.
"OECD" means the Organization for Economic Cooperation and
Development.
"Office Lease" means the Office Lease to be entered into by Shoney's,
as landlord, and the Borrower, as tenant.
"Open Year" has the meaning specified in Section 4.01(aa).
"Operating Subsidiaries" has the meaning set forth in Preliminary
Statement No. 2.
"Other Taxes" has the meaning specified in Section 2.12(b).
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
"Permitted Encumbrances" has the meaning specified in the Mortgages.
"Permitted Liens" means (i) such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding shall have
been commenced: (a) Liens for taxes, assessments and governmental charges or
levies not yet due and payable or that are being contested in good faith and
by proper proceedings and as to which appropriate reserves are being
maintained; (b) Liens imposed by law arising in the ordinary course of
business securing obligations that (x) are not overdue for a period of more
than 180 days or are being contested in good faith and by proper proceedings
and as to which appropriate reserves are being maintained and (y)
individually or together with all other Permitted Liens outstanding on any
date of determination do not materially adversely affect the use of the
property to which they relate; and (c) pledges or deposits to secure
obligations under workers' compensation laws or similar legislation or to
secure public or statutory obligations; and (ii) easements, rights of way and
other encumbrances on title to real property that do not render title to the
property encumbered thereby unmarketable or materially adversely affect the
use of such property for its present purposes.
"Permitted Reorganization" means (i) a transaction in which Shoney's
becomes a wholly-owned subsidiary of a newly-formed holding company and/or
such other transactions, a result of which the Borrower and Shoney's and/or
an Affiliate of Shoney's, each respectively, has the same shareholders as
Shoney's immediately before
21
the reorganization (except for changes as a result of ordinary market
transactions or the exercise of any dissenters' rights) and pursuant to which
no Material Adverse Effect occurs; provided that no new capital is received
by Shoney's or the Borrower in connection with such reorganization and,
provided further, the capital stock of the Borrower shall continue to be
pledged to the Administrative Agent for its benefit and the ratable benefit
of the Lender Parties, or (ii) such other transactions and circumstances,
including, without limitation, the receipt of new capital by Shoney's or the
Borrower, as may be approved by the Administrative Agent and the Required
Lenders.
"Person" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Pledge Agreement" has the meaning specified in Section 3.01(k)(x).
"Pledged Debt" has the meaning specified in the Security Agreement.
"Pledged Shares" has the meaning specified in the Security Agreement.
"Preferred Interests" means, with respect to any Person, Equity
Interests issued by such corporation that is entitled to a preference or
priority over any other Equity Interests issued by such Person upon any
distribution of such Person's property and assets, whether by dividend or
upon liquidation.
"Prime Rate" means a fluctuating interest rate per annum in effect
from time to time, which rate per annum shall at all times be equal to the
higher of:
(a) the rate of interest announced publicly by Bank of
America in Charlotte, North Carolina from time to time, as Bank of
America's prime rate; or
(b) 1/2 of 1% per annum above the Federal Funds Rate.
"Prime Rate Advance" means an Advance that bears interest as provided
in Section 2.07(a)(i).
"Pro Rata Share" of any amount means, with respect to any Working
Capital Lender at any time, the product of such amount times a fraction the
numerator of which is the amount of such Lender's Working Capital Commitment
at such time and the denominator of which is the Working Capital Facility at
such time.
"Real Estate Financing" has the meaning set forth in Preliminary
Statement No. 3.
"Redeemable" means, with respect to any Equity Interests, any Debt
or any other right or Obligation, any such Equity Interest, Debt, right or
Obligation that (a) the issuer has undertaken to redeem at a fixed or
determinable date or dates, whether by operation
22
of a sinking fund or otherwise, or upon the occurrence of a condition not
solely within the control of the issuer or (b) is redeemable at the option of
the holder.
"Refinancing" has the meaning set forth in Preliminary Statement No.
1.
"Register" has the meaning specified in Section 8.07(d).
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Related Documents" means the Voting Trust Agreement, the Master
Lease, the Deeds, the Administrative Service Agreement, the Management and
Operating Agreements, the Tax Sharing Agreement, the Office Lease and the
Bills of Sale.
"Required Lenders" means at any time Lenders owed or holding at least
a majority in interest of the sum of (a) the aggregate principal amount of
the Advances outstanding at such time, (b) the aggregate Available Amount of
all Letters of Credit outstanding at such time and (c) the aggregate unused
Working Capital Commitments at such time; provided, however, that if any
Lender shall be a Defaulting Lender at such time, there shall be excluded
from the determination of Required Lenders at such time (A) the aggregate
principal amount of the Advances owing to such Lender (in its capacity as a
Lender) and outstanding at such time, (B) such Lender's Pro Rata Share of the
aggregate Available Amount of all Letters of Credit issued by such Lender and
outstanding at such time and (C) the Unused Working Capital Commitment of
such Lender at such time. For purposes of this definition, the aggregate
principal amount of Swing Line Advances owing to the Swing Line Bank and of
Letter of Credit Advances owing to the Issuing Bank and the Available Amount
of each Letter of Credit shall be considered to be owed to the Working
Capital Lenders ratably in accordance with their respective Working Capital
Commitments.
"Responsible Officer" means, with respect to any Loan Party or any
of its Subsidiaries, at the time any determination thereof is to be made,
each of those Persons who are the Chairman of the Board (if at the time, an
officer), President, Chief Financial Officer (regardless of title),
Treasurer, Corporate Controller (regardless of title), Secretary or Assistant
Treasurer of such Loan Party or Subsidiary.
"Restructuring" has the meaning set forth in Preliminary Statement
No. 1.
"Secured Parties" means the Administrative Agent, the Lender Parties,
the Treasury Banks and the Hedge Banks.
"Security Agreement" has the meaning specified in Section
3.01(k)(viii).
"Senior Credit Facility" means the Credit Agreement dated as of
November 28, 1997, as amended, among Shoney's, the lenders party thereto,
Bank of America, N.A., as administrative agent, and BAS, as arranger and
syndication agent.
"Shoney's" has the meaning set forth in Preliminary Statement No. 1.
23
"Single Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any
Loan Party or any ERISA Affiliate and no Person other than the Loan Parties
and the ERISA Affiliates or (b) was so maintained and in respect of which any
Loan Party or any ERISA Affiliate could have liability under Section 4069 of
ERISA in the event such plan has been or were to be terminated.
"Solvent" and "Solvency" mean, with respect to any Person on a
particular date, that on such date (a) on a pro forma basis, the fair value
of the property of such Person is greater than the total amount of
liabilities, including, without limitation, contingent liabilities, of such
Person, (b) on a pro forma basis, the present fair salable value of the
assets of such Person is not less than the amount that will be required to
pay the probable liability of such Person on its debts as they become
absolute and matured, (c) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's ability
to pay or refinance such debts and liabilities as they mature and (d) such
Person is not engaged in business or a transaction, and is not about to
engage in business or a transaction, for which such Person's property would
constitute an unreasonably small capital. The amount of contingent
liabilities at any time shall be computed as the amount that, in the light of
all the facts and circumstances existing at such time, represents the amount
that can reasonably be expected to become an actual or matured liability.
"SPV Subsidiaries" means each of Captain D's Properties and Captain
D's Realty.
"Standby Letter of Credit" means any Letter of Credit issued under
the Letter of Credit Facility, other than a Trade Letter of Credit.
"Subsidiary" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which)
more than 50% of (a) the issued and outstanding capital stock having ordinary
voting power to elect a majority of the board of directors of such
corporation (irrespective of whether at the time capital stock of any other
class or classes of such corporation shall or might have voting power upon
the occurrence of any contingency), (b) the interest in the capital or
profits of such partnership, joint venture or limited liability company or
(c) the beneficial interest in such trust or estate is at the time directly
or indirectly owned or controlled by such Person, by such Person and one or
more of its other Subsidiaries or by one or more of such Person's other
Subsidiaries.
"Subsidiary Guarantor" means each of the wholly-owned Domestic
Subsidiaries of the Borrower.
"Subsidiary Guaranty" has the meaning specified in Section
3.01(k)(xi).
"Supermajority Lenders" means at any time (i) Working Capital Lenders
and Term B Lenders owed or holding at least 75% of the sum of (a) the
aggregate principal amount of the Working Capital Advances outstanding at
such time, (b) the aggregate
24
Available Amount of all Letters of Credit outstanding at such time, (c) the
aggregate unused Working Capital Commitments at such time and (d) the
aggregate amount of the Term B Advances outstanding at such time, and (ii)
Term C Lenders owed or holding at least 75% of the Term C Advances
outstanding at such time ; provided, however, that if any Lender shall be a
Defaulting Lender at such time, there shall be excluded from the
determination of Supermajority Lenders at such time (A) the aggregate
principal amount of the Advances owing to such Lender (in its capacity as a
Lender) and outstanding at such time, (B) such Lender's Pro Rata Share of the
aggregate Available Amount of all Letters of Credit issued by such Lender and
outstanding at such time and (C) the Unused Working Capital Commitment of
such Lender at such time. For purposes of this definition, the aggregate
principal amount of Swing Line Advances owing to the Swing Line Bank and of
Letter of Credit Advances owing to the Issuing Bank and the Available Amount
of each Letter of Credit shall be considered to be owed to the Working
Capital Lenders ratably in accordance with their respective Working Capital
Commitments.
"Surviving Debt" has the meaning specified in Section 4.01(hh).
"Swing Line Advance" means an advance made by the Swing Line Bank
pursuant to Section 2.01(d).
"Swing Line Bank" has the meaning specified in the recital of parties
to this Agreement.
"Swing Line Borrowing" means a borrowing consisting of a Swing Line
Advance made by the Swing Line Bank.
"Swing Line Facility" has the meaning specified in Section 2.01(d).
"Taxes" has the meaning specified in Section 2.12(a).
"Tax Sharing Agreement" means the Tax Sharing Agreement dated the
Closing Date between Shoney's, the Borrower and their respective
Subsidiaries.
"Term Advances" means, collectively, the Term B Advances and the Term
C Advances.
"Term B Advance" has the meaning specified in Section 2.01(a).
"Term B Borrowing" means a borrowing consisting of simultaneous Term
B Advances of the same Type made by the Term B Lenders.
"Term B Commitment" means, with respect to any Term B Lender at any
time, the amount set forth opposite such Lender's name on Schedule I hereto
under the caption "Term B Commitment" or, if such Lender has entered into one
or more Assignments and Acceptances, set forth for such Lender in the
Register maintained by the Administrative Agent pursuant to Section 8.07(d)
as such Lender's "Term B Commitment", as such amount may be reduced at or
prior to such time pursuant to Section 2.05.
25
"Term B Facility" means, at any time, the aggregate amount of the
Term B Lenders' Term B Commitments at such time.
"Term B Lender" means any Lender that has a Term B Commitment.
"Term B Note" means a promissory note of the Borrower payable to the
order of any Term B Lender, in substantially the form of Exhibit A-1 hereto,
evidencing the indebtedness of the Borrower to such Lender resulting from the
Term B Advance made by such Lender.
"Term Borrowings" means, collectively, Term B Borrowings and Term C
Borrowings.
"Term C Advance" has the meaning specified in Section 2.01(b).
"Term C Borrowing" means a borrowing consisting of simultaneous Term
C Advances of the same Type made by the Term C Lenders.
"Term C Commitment" means, with respect to any Term C Lender at any
time, the amount set forth opposite such Lender's name on Schedule I hereto
under the caption "Term C Commitment" or, if such Lender has entered into one
or more Assignments and Acceptances, set forth for such Lender in the
Register maintained by the Administrative Agent pursuant to Section 8.07(d)
as such Lender's "Term C Commitment", as such amount may be reduced at or
prior to such time pursuant to Section 2.05.
"Term C Facility" means, at any time, the aggregate amount of the
Term C Lenders' Term C Commitments at such time.
"Term C Lender" means any Lender that has a Term C Commitment.
"Term C Note" means a promissory note of the Borrower payable to the
order of any Term C Lender, in substantially the form of Exhibit A-2 hereto,
evidencing the indebtedness of the Borrower to such Lender resulting from the
Term C Advance made by such Lender.
"Term Commitments" means, collectively, the Term B Commitments and
the Term C Commitments.
"Term Facilities" means, collectively, the Term B Facility and the
Term C Facility.
"Term Lenders" means, collectively, the Term B Lenders and the Term
C Lenders.
"Term Notes" means, collectively, the Term B Notes and the Term C
Notes.
"Termination Date" means (a) with respect to the Term B Facility, the
earlier of December 31, 2001 and the date of termination in whole of the Term
B Commitments
26
pursuant to Section 6.01, (b) with respect to the Term C Facility, the
earlier of December 31, 2001 and the date of termination in whole of the Term
C Commitments pursuant to Section 2.05 or 6.01, and (c) with respect to the
Working Capital Facility, the earlier of December 31, 2001 and the date of
termination in whole of the Letter of Credit Commitments and the Working
Capital Commitments pursuant to Section 2.05 or 6.01.
"TPI" means TPI Restaurants, Inc., a Tennessee corporation.
"Trade Letter of Credit" means any Letter of Credit that is issued
under the Letter of Credit Facility for the benefit of a supplier of
inventory to the Borrower or any of its Subsidiaries to effect payment for
such inventory, the conditions to drawing under which include the
presentation to the Issuing Bank of negotiable bills of lading, invoices and
related documents sufficient, in the judgment of the Issuing Bank, to create
a valid and perfected lien on or security interest in such inventory, bills
of lading, invoices and related documents in favor of the Issuing Bank.
"Transaction" has the meaning set forth in Preliminary Statement No.
3.
"Transaction Documents" means, collectively, the Loan Documents and
the Related Documents.
"Treasury Banks" means any Lender that provides treasury or cash
management services to the Borrower or its Subsidiaries.
"Treasury Management Services" means any and all treasury and cash
management services provided by any Lender or any of its Affiliates to the
Borrower and its Subsidiaries.
"Type" refers to the distinction between Prime Rate Advances and
Eurodollar Rate Advances.
"UCC Fixture Filings" has the meaning specified in the Security
Agreement.
"Unused Working Capital Commitment" means, with respect to any
Working Capital Lender at any time, (a) such Lender's Working Capital
Commitment at such time minus (b) the sum of (i) the aggregate principal
amount of all Working Capital Advances and Letter of Credit Advances made by
such Lender (in its capacity as a Lender) and outstanding at such time, plus
(ii) such Lender's Pro Rata Share of (A) the aggregate Available Amount of
all Letters of Credit outstanding at such time, (B) the aggregate principal
amount of all Letter of Credit Advances made by the Issuing Bank pursuant to
Section 2.03(c) and outstanding at such time (other than such Lender's pro
rata share thereof) and (C) the aggregate principal amount of all Swing Line
Advances made by the Swing Line Bank pursuant to Section 2.01(c) and
outstanding at such time (other than such Lender's pro rata share thereof).
"Voting Interests" means shares of capital stock issued by a
corporation, or equivalent Equity Interests in any other Person, the holders
of which are ordinarily, in the absence of contingencies, entitled to vote
for the election of directors (or persons
27
performing similar functions) of such Person, even if the right so to vote
has been suspended by the happening of such a contingency.
"Voting Trust Agreement" means the Voting Trust Agreement dated as
of September 6, 2000 among the Borrower, Shoney's, Wilmington Trust Company,
as Trustee, and the Administrative Agent.
"Welfare Plan" means a welfare plan, as defined in Section 3(1) of
ERISA, that is maintained for employees of any Loan Party or in respect of
which any Loan Party could have liability.
"Withdrawal Liability" has the meaning specified in Part I of
Subtitle E of Title IV of ERISA.
"Working Capital Advance" has the meaning specified in Section
2.01(c).
"Working Capital Borrowing" means a borrowing consisting of
simultaneous Working Capital Advances of the same Type made by the Working
Capital Lenders.
"Working Capital Commitment" means, with respect to any Working
Capital Lender at any time, the amount set forth opposite such Lender's name
on Schedule I hereto under the caption "Working Capital Commitment" or, if
such Lender has entered into one or more Assignments and Acceptances, set
forth for such Lender in the Register maintained by the Administrative Agent
pursuant to Section 8.07(d) as such Lender's "Working Capital Commitment", as
such amount may be reduced at or prior to such time pursuant to Section 2.05.
"Working Capital Facility" means, at any time, the aggregate amount
of the Working Capital Lenders' Working Capital Commitments at such time.
"Working Capital Lender" means any Lender that has a Working Capital
Commitment.
"Working Capital Note" means a promissory note of the Borrower
payable to the order of any Working Capital Lender, in substantially the form
of Exhibit A-3 hereto, evidencing the aggregate indebtedness of the Borrower
to such Lender resulting from the Working Capital Advances made by such
Lender.
SECTION 1.02. Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and
"until" each mean "to but excluding".
SECTION 1.03. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles consistent with those applied in the
preparation of the financial statements referred to in Section 4.01(f)
("GAAP").
28
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
SECTION 2.01. The Advances. (a) The Term B Advances. Each Term B
Lender severally agrees, on the terms and conditions hereinafter set forth,
to make a single advance (a "Term B Advance") to the Borrower on the Closing
Date in an amount equal to such Lender's Term B Commitment at such time. The
Term B Borrowing shall consist of Term B Advances made simultaneously by the
Term B Lenders ratably according to their Term B Commitments. Amounts
borrowed under this Section 2.01(a) and repaid or prepaid may not be
reborrowed.
(b) The Term C Advances. Each Term C Lender severally agrees, on
the terms and conditions hereinafter set forth, to make a single advance (a
"Term C Advance") to the Borrower on the Closing Date in an amount equal to
such Lender's Term C Commitment at such time. The Term C Borrowing shall
consist of Term C Advances made simultaneously by the Term C Lenders ratably
according to their Term C Commitments. Amounts borrowed under this Section
2.01(b) and repaid or prepaid may not be reborrowed.
(c) The Working Capital Advances. Each Working Capital Lender
severally agrees, on the terms and conditions hereinafter set forth, to make
advances (each a "Working Capital Advance") to the Borrower from time to time
on any Business Day during the period from the date hereof until the
Termination Date in an amount for each such Advance not to exceed such
Lender's Unused Working Capital Commitment at such time. Each Working
Capital Borrowing shall be in an aggregate amount of $1,000,000 or an
integral multiple of $500,000 in excess thereof (other than a Borrowing the
proceeds of which shall be used solely to repay or prepay in full outstanding
Swing Line Advances or outstanding Letter of Credit Advances) and shall
consist of Working Capital Advances made simultaneously by the Working
Capital Lenders ratably according to their Working Capital Commitments.
Within the limits of each Working Capital Lender's Unused Working Capital
Commitment in effect from time to time, the Borrower may borrow under this
Section 2.01(c), prepay pursuant to Section 2.06(a) and reborrow under this
Section 2.01(c).
(d) The Swing Line Advances. A swing line credit facility (the
"Swing Line Facility") in a principal amount not to exceed $5,000,000 shall
be established by the Swing Line Bank for the Borrower from the date hereof
through the Termination Date. In connection with the Swing Line Facility,
the Borrower shall maintain cash management operations account with the Swing
Line Bank (the "Cash Management Account"), and shall execute such
documentation in connection therewith as the Swing Line Bank may reasonably
require (the "Cash Management Documentation"). At the close of each Business
Day during the term of the Facilities, the Swing Line Bank shall on behalf of
the Borrower draw from the Swing Line Facility amounts sufficient to pay the
difference between (i) the aggregate amount payable in such account for all
instruments presented since the close of the prior Business Day in connection
with the Cash Management Account (the "Account Debit Amount"), and (ii) the
aggregate amount received since the close of the prior Business Day into such
Cash Management Account (the "Account Credit Amount"). Each such drawing
shall be a Swing Line Advance and in no event shall (x)
29
the aggregate amount of Swing Line Advances outstanding at any one time
exceed the Swing Line Facility or (y) the aggregate amount of Swing Line
Advances made on any Business Day exceed the aggregate of the Unused Working
Capital Commitments of the Working Capital Lenders at such time. To the
extent the Account Credit Amount exceeds the Account Debit Amount, such
excess proceeds shall be automatically applied by the Swing Line Bank to
prepay the outstanding Swing Line Advances and, if no Swing Line Advance is
outstanding at such time, such excess proceeds shall be invested in
"overnight" investments pursuant to the cash management documentation between
the Borrower and the Swing Line Bank. Each Swing Line Advance shall be made
as a Prime Rate Advance.
(e) Letters of Credit. The Issuing Bank agrees, on the terms and
conditions hereinafter set forth, to issue letters of credit (the "Letters of
Credit") for the account of the Borrower from time to time on any Business
Day during the period from the date hereof until 60 days before December 31,
2001 (i) in an aggregate Available Amount for all Letters of Credit not to
exceed at any time the Issuing Bank's Letter of Credit Commitment at such
time and (ii) in an Available Amount for each such Letter of Credit not to
exceed the lesser of (x) the Letter of Credit Facility at such time and (y)
the Unused Working Capital Commitments of the Working Capital Lenders at such
time. No Letter of Credit shall have an expiration date (including all
rights of the Borrower or the beneficiary to require renewal) later than the
earlier of 60 days before December 31, 2001 and (A) in the case of a Standby
Letter of Credit, one year after the date of issuance thereof, but may by its
terms be renewable annually upon notice (a "Notice of Renewal") from the
Borrower given to the Issuing Bank and the Administrative Agent on or prior
to any date for notice of renewal set forth in such Letter of Credit but in
any event at least three Business Days prior to the date of the proposed
renewal of such Standby Letter of Credit and upon fulfillment of the
applicable conditions set forth in Article III unless the Issuing Bank has
notified the Borrower (with a copy to the Administrative Agent) on or prior
to the date for notice of termination set forth in such Letter of Credit but
in any event at least 30 Business Days prior to the date of automatic renewal
of its election not to renew such Standby Letter of Credit (a "Notice of
Termination") and (B) in the case of a Trade Letter of Credit, 60 days after
the date of issuance thereof; provided that the terms of each Standby Letter
of Credit that is automatically renewable annually shall (x) require the
Issuing Bank that issued such Standby Letter of Credit to give the
beneficiary named in such Standby Letter of Credit notice of any Notice of
Termination, (y) permit such beneficiary, upon receipt of such notice, to
draw under such Standby Letter of Credit prior to the date such Standby
Letter of Credit otherwise would have been automatically renewed and (z) not
permit the expiration date (after giving effect to any renewal) of such
Standby Letter of Credit in any event to be extended to a date later than 60
days before December 31, 2001. If either a Notice of Renewal is not given by
the Borrower or a Notice of Termination is given by the Issuing Bank pursuant
to the immediately preceding sentence, such Standby Letter of Credit shall
expire on the date on which it otherwise would have been automatically
renewed; provided, however, that even in the absence of receipt of a Notice
of Renewal the Issuing Bank may in its discretion, unless instructed to the
contrary by the Administrative Agent or the Borrower, deem that a Notice of
Renewal had been timely delivered and in such case, a Notice of Renewal shall
be deemed to have been so delivered for all purposes under this Agreement.
Within the limits of the Letter of Credit Facility, and subject to the limits
referred to above, the Borrower may request the issuance of Letters of Credit
under this Section 2.01(e), repay any Letter of Credit Advances resulting
from drawings thereunder pursuant to
30
Section 2.03(c) and request the issuance of additional Letters of Credit
under this Section 2.01(e).
SECTION 2.02. Making the Advances. (a) Except as otherwise
provided in Section 2.02(b) or 2.03 and except in respect of Advances made on
the date of the Initial Extension of Credit, in which case notice will be
given on the date of such Initial Extension of Credit, each Borrowing (other
than a Swing Line Borrowing) shall be made on notice, given not later than
11:00 A.M. (Charlotte, North Carolina time) on the third Business Day prior
to the date of the proposed Borrowing in the case of a Borrowing consisting
of Eurodollar Rate Advances, or the first Business Day prior to the date of
the proposed Borrowing in the case of a Borrowing consisting of Prime Rate
Advances, by the Borrower to the Administrative Agent, which shall give to
each Appropriate Lender prompt notice thereof by telex or telecopier. Each
such notice of a Borrowing (a "Notice of Borrowing") shall be by telephone,
confirmed promptly in writing, or by telex or telecopier, in substantially
the form of Exhibit B hereto, specifying therein the requested (i) date of
such Borrowing, (ii) Facility under which such Borrowing is to be made, (iii)
Type of Advances comprising such Borrowing, (iv) aggregate amount of such
Borrowing and (v) in the case of a Borrowing consisting of Eurodollar Rate
Advances, initial Interest Period for each such Advance. Each Appropriate
Lender shall, before 11:00 A.M. (Charlotte, North Carolina time) on the date
of such Borrowing, make available for the account of its Applicable Lending
Office to the Administrative Agent at the Administrative Agent's Account, in
same day funds, such Lender's ratable portion of such Borrowing in accordance
with the respective Commitments under the applicable Facility of such Lender
and the other Appropriate Lenders. After the Administrative Agent's receipt
of such funds and upon fulfillment of the applicable conditions set forth in
Article III, the Administrative Agent will make such funds available to the
Borrower by crediting the Borrower's Account; provided, however, that, in the
case of any Working Capital Borrowing, the Administrative Agent shall first
make a portion of such funds equal to the aggregate principal amount of any
Swing Line Advances and Letter of Credit Advances made by the Swing Line Bank
or the Issuing Bank, as the case may be, and, in the case of Letter of Credit
Advances, by any other Working Capital Lender and outstanding on the date of
such Working Capital Borrowing, plus interest accrued and unpaid thereon to
and as of such date, available to the Swing Line Bank or the Issuing Bank, as
the case may be, and such other Working Capital Lenders for repayment of such
Letter of Credit Advances.
(b) Upon written demand by the Swing Line Bank (which demand shall
be given to the Administrative Agent and the Administrative Agent shall
notify each Working Capital Lender of such demand), each other Working
Capital Lender shall purchase from the Swing Line Bank, and the Swing Line
Bank shall sell and assign to each such other Working Capital Lender, such
other Lender's Pro Rata Share of the principal of such outstanding Swing Line
Advance as of the date of such demand, by making available for the account of
its Applicable Lending Office to the Administrative Agent for the account of
the Swing Line Bank, by deposit to the Administrative Agent's Account, in
same day funds, an amount equal to the portion of then outstanding principal
amount of such Swing Line Advance to be purchased by such Lender. Promptly
after receipt thereof, the Administrative Agent shall transfer such funds to
the Swing Line Bank. Such purchase by each Working Capital Lender shall be
a Working Capital Advance for all purposes of this Agreement. The Borrower
hereby agrees to each such sale and assignment. Each Working Capital Lender
agrees to purchase its Pro Rata Share of an
31
outstanding Swing Line Advance on (i) the Business Day on which demand
therefor is made by the Swing Line Bank, provided that notice of such demand
is given not later than 11:00 A.M. (Charlotte, North Carolina) on such
Business Day or (ii) the first Business Day next succeeding such demand if
notice of such demand is given after such time. If such Lender shall pay to
the Administrative Agent such amount for the account of the Swing Line Bank
on any Business Day, such amount so paid in respect of principal shall
constitute a Working Capital Advance made by such Lender on such Business Day
for purposes of this Agreement, and the outstanding principal amount of the
Swing Line Advance made by the Swing Line Bank shall be reduced by such
amount on such Business Day. Upon any such assignment by the Swing Line Bank
to any other Working Capital Lender of a portion of a Swing Line Advance, the
Swing Line Bank represents and warrants to such other Lender that the Swing
Line Bank is the legal and beneficial owner of such interest being assigned
by it, but makes no other representation or warranty and assumes no
responsibility with respect to such Swing Line Advance, the Loan Documents or
any Loan Party. If and to the extent that any Working Capital Lender shall
not have so made the amount of such Swing Line Advance available to the
Administrative Agent, such Working Capital Lender agrees to pay to the
Administrative Agent forthwith on demand such amount together with interest
thereon, for each day from the date of demand by the Swing Line Bank until
the date such amount is paid to the Administrative Agent, at the Federal
Funds Rate.
(c) Anything in subsection (a) above to the contrary notwithstanding,
(i) the Borrower may not select Eurodollar Rate Advances for the initial
Borrowing hereunder or for any Borrowing if the aggregate amount of such
Borrowing is less than $1,000,000 or if the obligation of the Appropriate
Lenders to make Eurodollar Rate Advances shall then be suspended pursuant to
Section 2.09 or Section 2.10 and (ii) the Term Advances may not be
outstanding as part of more than 6 separate Borrowings and Working Capital
Advances made on any date may not be outstanding as part of more than 3
separate Borrowings (other than Working Capital Advances made due to pro rata
purchases by the Working Capital Lenders of Swing Line Advances).
(d) Each Notice of Borrowing shall be irrevocable and binding on the
Borrower. In the case of any Borrowing that the related Notice of Borrowing
specifies is to be comprised of Eurodollar Rate Advances, the Borrower shall
indemnify each Appropriate Lender against any loss, cost or expense incurred
by such Lender as a result of any failure by the Loan Parties to fulfill on
or before the date specified in such Notice of Borrowing for such Borrowing
the applicable conditions set forth in Article III, including, without
limitation, any loss (including loss of anticipated profits), cost or expense
incurred by reason of the liquidation or reemployment of deposits or other
funds acquired by such Lender to fund the Advance to be made by such Lender
as part of such Borrowing when such Advance, as a result of such failure, is
not made on such date.
(e) Unless the Administrative Agent shall have received notice from
an Appropriate Lender prior to the date of any Borrowing under a Facility
under which such Lender has a Commitment that such Lender will not make
available to the Administrative Agent such Lender's ratable portion of such
Borrowing, the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent on the date of such Borrowing
in accordance with subsection (a) or (b) of this Section 2.02 and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower on such date a
32
corresponding amount. If and to the extent that such Lender shall not have
so made such ratable portion available to the Administrative Agent, such
Lender and the Borrower severally agree to repay or pay to the Administrative
Agent forthwith on demand such corresponding amount and to pay interest
thereon, for each day from the date such amount is made available to the
Borrower until the date such amount is repaid or paid to the Administrative
Agent, at (i) in the case of the Borrower, the interest rate applicable at
such time under Section 2.07 to Advances comprising such Borrowing and (ii)
in the case of such Lender, the Federal Funds Rate. If such Lender shall pay
to the Administrative Agent such corresponding amount, such amount so paid
shall constitute such Lender's Advance as part of such Borrowing for all
purposes.
(f) The failure of any Lender to make the Advance to be made by it
as part of any Borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its Advance on the date of such
Borrowing, but no Lender shall be responsible for the failure of any other
Lender to make the Advance to be made by such other Lender on the date of any
Borrowing.
SECTION 2.03. Issuance of and Drawings and Reimbursement Under
Letters of Credit. (a) Request for Issuance. Each Letter of Credit shall be
issued upon notice, given not later than 11:00 A.M. (Charlotte, North
Carolina time) on the tenth day prior to the date of the proposed issuance of
such Letter of Credit (or such later day as the Issuing Bank shall agree), by
the Borrower to the Issuing Bank, which shall give to the Administrative
Agent and each Working Capital Lender prompt notice thereof by telex or
telecopier. Each such notice of issuance of a Letter of Credit (a "Notice of
Issuance") shall be by telephone, confirmed promptly in writing, or by telex
or telecopier, specifying therein the requested (A) date of such issuance
(which shall be a Business Day), (B) Available Amount of such Letter of
Credit, (C) expiration date of such Letter of Credit, (D) name and address of
the beneficiary of such Letter of Credit and (E) form of such Letter of
Credit, and shall be accompanied by such application and agreement for letter
of credit as the Issuing Bank may specify to the Borrower for use in
connection with such requested Letter of Credit (a "Letter of Credit
Agreement"). If the requested form of such Letter of Credit is acceptable to
the Issuing Bank in its sole discretion, the Issuing Bank will, upon
fulfillment of the applicable conditions set forth in Article III, make such
Letter of Credit available to the Borrower at the Issuing Bank's office
referred to in Section 8.02 or as otherwise agreed with the Borrower in
connection with such issuance. In the event and to the extent that the
provisions of any Letter of Credit Agreement shall conflict with this
Agreement, the provisions of this Agreement shall govern.
(b) Letter of Credit Reports. The Issuing Bank shall furnish (A) to
the Administrative Agent on the first Business Day of each week a written
report summarizing issuance and expiration dates of Letters of Credit issued
during the previous week and drawings during such week under all Letters of
Credit, (B) to each Working Capital Lender on the first Business Day of each
month a written report summarizing issuance and expiration dates of Letters
of Credit issued during the preceding month and drawings during such month
under all Letters of Credit and (C) to the Administrative Agent, the Borrower
and each Working Capital Lender on the first Business Day of each calendar
quarter a written report setting forth the average daily aggregate Available
Amount during the preceding calendar quarter of all Letters of Credit.
33
(c) Drawing and Reimbursement. The payment by the Issuing Bank of
a draft drawn under any Letter of Credit shall constitute for all purposes of
this Agreement the making by the Issuing Bank of a Letter of Credit Advance,
which shall be a Prime Rate Advance, in the amount of such draft. Upon
written demand by the Issuing Bank, with a copy of such demand to the
Administrative Agent, each Working Capital Lender shall purchase from the
Issuing Bank, and the Issuing Bank shall sell and assign to each such Working
Capital Lender, such Lender's Pro Rata Share of such outstanding Letter of
Credit Advance as of the date of such purchase, by making available for the
account of its Applicable Lending Office to the Administrative Agent for the
account of the Issuing Bank, by deposit to the Administrative Agent's
Account, in same day funds, an amount equal to the portion of the outstanding
principal amount of such Letter of Credit Advance to be purchased by such
Lender. Promptly after receipt thereof, the Administrative Agent shall
transfer such funds to the Issuing Bank. The Borrower hereby agrees to each
such sale and assignment. Each Working Capital Lender agrees to purchase its
Pro Rata Share of an outstanding Letter of Credit Advance on (i) the Business
Day on which demand therefor is made by the Issuing Bank, provided that
notice of such demand is given not later than 11:00 A.M. (Charlotte, North
Carolina time) on such Business Day or (ii) the first Business Day next
succeeding such demand if notice of such demand is given after such time.
Upon any such assignment by the Issuing Bank to any other Lender of a portion
of a Letter of Credit Advance, the Issuing Bank represents and warrants to
such other Lender that the Issuing Bank is the legal and beneficial owner of
such interest being assigned by it, free and clear of any liens, but makes no
other representation or warranty and assumes no responsibility with respect
to such Letter of Credit Advance, the Loan Documents or any Loan Party. If
and to the extent that any Working Capital Lender shall not have so made the
amount of such Letter of Credit Advance available to the Administrative
Agent, such Lender agrees to pay to the Administrative Agent forthwith on
demand such amount together with interest thereon, for each day from the date
of demand by the Issuing Bank until the date such amount is paid to the
Administrative Agent, at the Federal Funds Rate for its account or the
account of the Issuing Bank, as applicable. If such Lender shall pay to the
Administrative Agent such amount for the account of the Issuing Bank on any
Business Day, such amount so paid in respect of principal shall constitute a
Letter of Credit Advance made by such Lender on such Business Day for
purposes of this Agreement, and the outstanding principal amount of the
Letter of Credit Advance made by the Issuing Bank shall be reduced by such
amount on such Business Day (it being understood that any such payment by any
Lender is without prejudice to, and does not constitute a waiver of, any
right any Lender might have or might acquire as a result of the payment by
the Issuing Bank of any draft or the reimbursement by any Lender thereof).
(d) Failure to Make Letter of Credit Advances. The failure of any
Lender to make the Letter of Credit Advance to be made by it on the date
specified in Section 2.03(c) shall not relieve any other Lender of its
obligation hereunder to make its Letter of Credit Advance on such date, but
no Lender shall be responsible for the failure of any other Lender to make
the Letter of Credit Advance to be made by such other Lender on such date.
SECTION 2.04. Repayment of Advances. (a) Term B Advances. The
Borrower shall repay to the Administrative Agent for the ratable account of
the Term B Lenders on the Termination Date the aggregate outstanding
principal amount of the Term B Advances then outstanding.
34
(b) Term C Advances. The Borrower shall repay to the Administrative
Agent for the ratable account of the Term C Lenders on the Termination Date
the aggregate principal amount of the Term C Advances then outstanding.
(c) Working Capital Advances. The Borrower shall repay to the
Administrative Agent for the ratable account of the Working Capital Lenders
on the Termination Date the aggregate principal amount of the Working Capital
Advances then outstanding.
(d) Swing Line Advances. In addition to periodic principal payments
made on the Swing Line Advances pursuant to the Cash Management
Documentation, the Borrower shall repay to the Administrative Agent for the
account of the Swing Line Bank on the Termination Date the aggregate
principal amount of the Swing Line Advances then outstanding.
(e) Letter of Credit Advances. (i) The Borrower shall repay to the
Administrative Agent for the ratable account of the Issuing Bank and each
other Working Capital Lender that has made a Letter of Credit Advance on the
earlier of demand and the Termination Date the outstanding principal amount
of each Letter of Credit Advance made by each of them.
(ii) The payment Obligations of the Borrower under this
Agreement, any Letter of Credit Agreement and any other agreement or
instrument relating to any Letter of Credit shall be unconditional
and irrevocable, and shall be paid strictly in accordance with the
terms of this Agreement, such Letter of Credit Agreement and such
other agreement or instrument under all circumstances, including,
without limitation, the following circumstances (it being understood
that any such payment by the Borrower is without prejudice to, and
does not constitute a waiver of, any rights the Borrower might have
or might acquire as a result of the payment by the Issuing Bank of
any draft or the reimbursement by the Borrower thereof):
(A) any lack of validity or enforceability of any
Loan Document, any Letter of Credit Agreement, any Letter of
Credit or any other agreement or instrument relating thereto
(all of the foregoing being, collectively, the "L/C Related
Documents");
(B) any change in the time, manner or place of
payment of, or in any other term of, all or any of the
Obligations of the Borrower in respect of any L/C Related
Document or any other amendment or waiver of or any consent
to departure from all or any of the L/C Related Documents;
(C) the existence of any claim, set-off, defense or
other right that the Borrower may have at any time against
any beneficiary or any transferee of a Letter of Credit (or
any Persons for whom any such beneficiary or any such
transferee may be acting), the Issuing Bank or any other
Person, whether in connection with the transactions
contemplated by the L/C Related Documents or any unrelated
transaction;
(D) any statement or any other document presented
under a Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect;
35
(E) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or certificate that
does not strictly comply with the terms of such Letter of
Credit;
(F) any exchange, release or non-perfection of any
Collateral or other collateral, or any release or amendment
or waiver of or consent to departure from the Subsidiary
Guaranty or any other guarantee, for all or any of the
Obligations of the Borrower in respect of the L/C Related
Documents; or
(G) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing, including,
without limitation, any other circumstance that might
otherwise constitute a defense available to, or a discharge
of, the Borrower, a Subsidiary Guarantor or any other
guarantor.
SECTION 2.05. Termination or Reduction of the Commitments. (a)
Optional. The Borrower may, upon at least five Business Days' notice to the
Administrative Agent, terminate in whole or reduce in part the Unused Working
Capital Commitments; provided, however, that each partial reduction (i) shall
be in an aggregate amount of $1,000,000 or an integral multiple of $500,000
in excess thereof and (ii) shall be made ratably among the Appropriate
Lenders in accordance with their Working Capital Commitments.
(b) Mandatory. (i) The Letter of Credit Facility shall be permanently
reduced from time to time on the date of each reduction in the Working
Capital Facility by the amount, if any, by which the amount of the Letter of
Credit Facility exceeds the Working Capital Facility after giving effect to
such reduction of the Working Capital Facility.
(ii) The Swing Line Facility shall be permanently reduced
from time to time on the date of each reduction in the Working
Capital Facility by the amount, if any, by which the amount of the
Swing Line Facility exceeds the Working Capital Facility after giving
effect to such reduction of the Working Capital Facility.
SECTION 2.06. Prepayments. (a) Optional. The Borrower may, upon
at least one Business Day's notice in the case of Prime Rate Advances and
three Business Day's notice in the case of Eurodollar Rate Advances, in each
case to the Administrative Agent stating the proposed date and aggregate
principal amount of the prepayment, and if such notice is given the Borrower
shall, prepay the outstanding aggregate principal amount of the Advances
comprising part of the same Borrowing in whole or ratably in part, together
with accrued interest to the date of such prepayment on the aggregate
principal amount prepaid; provided, however, that (x) each partial prepayment
shall be in an aggregate principal amount of $2,000,000 or an integral
multiple of $500,000 in excess thereof and (y) if any prepayment of a
Eurodollar Rate Advance is made on a date other than the last day of an
Interest Period for such Advance the Borrower shall also pay any amounts
owing pursuant to Section 8.04(c).
(b) Mandatory. (i) The Borrower shall, on the 90th day following the
end of each Fiscal Year (commencing with the 2001 Fiscal Year), if the
Leverage Ratio is equal to or greater than 2.5:1.00 as determined by the
financial statements delivered pursuant to Section 5.03, prepay an aggregate
principal amount of the Advances comprising part of the same
36
Borrowings equal to 50% of the amount of Excess Cash Flow for such Fiscal
Year. Each such prepayment shall be applied as follows: first, ratably to
the Term Facilities until such Facilities are paid in full and second, to the
Working Capital Facility in the manner set forth in clause (iii) below.
(ii) The Borrower shall, within five days following receipt
of Net Cash Proceeds by the Borrower or any of its Subsidiaries from
(A) the sale, transfer or other disposition (other than by lease) of
any assets of the Borrower or any of its Subsidiaries (other than any
sale, transfer or other disposition of assets pursuant to clause (i),
(ii) or (iii) of Section 5.02(e)), and (B) any Extraordinary Receipt
received by or paid to or for the account of the Borrower or any of
its Subsidiaries and not otherwise included in clause (A) or (B)
above, prepay an aggregate principal amount of the Advances
comprising part of the same Borrowings equal to the amount of such
Net Cash Proceeds; provided, however, that if the aggregate amount
of Net Cash Proceeds referred to in clause (A) above not previously
applied to the prepayment of the Advances is less than $1,000,000,
the Borrower may retain such Net Cash Proceeds until the amount of
all Net Cash Proceeds so retained when aggregated with all other
retained Net Cash Proceeds shall equal or exceed $1,000,000. Each
such prepayment shall be applied as follows: first, ratably to the
Term Facilities and second, to the Working Capital Facility in the
manner set forth in clause (iv) below.
(iii) The Borrower shall, within five days following receipt
of Net Cash Proceeds by the Borrower or any of its Subsidiaries from
(A) the incurrence or issuance by the Borrower or any of its
Subsidiaries of any Debt (other than Debt incurred or issued pursuant
to Section 5.02(b)), (B) the sale or issuance by the Borrower or any
of its Subsidiaries of any capital stock or other ownership or profit
interest, any securities convertible into or exchangeable for capital
stock or other ownership or profit interest or any warrants, rights
or options to acquire capital stock or other ownership or profit
interest, and (C) the incurrence or issuance by Captain D's Realty
of Debt permitted by Section 5.02(b)(vii), prepay an aggregate
principal amount of the Advances comprising part of the same
Borrowings equal to the amount of such Net Cash Proceeds. Each such
prepayment referred to in clause (A) or (B) shall be applied as
follows: first, ratably to the Term Facilities until such Facilities
are paid in full, and second, to the Working Capital Facility in the
manner set forth in clause (iv) below and each such prepayment
referred to in clause (C) shall be applied as follows: first, to the
Term C Facility until such Facility is paid in full, second, to the
Term B Facility until such Facilitiy is paid in full, and third, to
the Working Capital Facility in the manner set forth in clause (iv)
below.
(iv) The Borrower shall, on each Business Day, prepay an
aggregate principal amount of the Working Capital Advances comprising
part of the same Borrowings, the Letter of Credit Advances and the
Swing Line Advances equal to the amount by which (A) the sum of the
aggregate principal amount of (x) the Working Capital Advances, (y)
the Letter of Credit Advances and (z) the Swing Line Advances then
outstanding plus the aggregate Available Amount of all Letters of
Credit then outstanding exceeds (B) the Working Capital Facility on
such Business Day. Prepayments of the Working Capital Facility made
pursuant to clauses (i) and (ii) and this
37
clause (iii) shall be first, applied to prepay Letter of Credit
Advances then outstanding until such Advances are paid in full,
second, applied to prepay Swing Line Advances then outstanding until
such Advances are paid in full, and third, applied to prepay Working
Capital Advances then outstanding comprising part of the same
Borrowings until such Advances are paid in full.
(v) The Borrower shall, on each Business Day, pay to the
Administrative Agent for deposit in the L/C Cash Collateral Account
an amount sufficient to cause the aggregate amount on deposit in such
Account to equal the amount by which the aggregate Available Amount
of all Letters of Credit then outstanding exceeds the Letter of
Credit Facility on such Business Day.
(vi) All prepayments under this subsection (b) shall be made
together with accrued interest to the date of such prepayment on the
principal amount prepaid.
SECTION 2.07. Interest. (a) Scheduled Interest. The Borrower shall
pay interest on the unpaid principal amount of each Advance owing to each
Lender from the date of such Advance until such principal amount shall be
paid in full, at the following rates per annum:
(i) Prime Rate Advances. During such periods as such
Advance is a Prime Rate Advance, a rate per annum equal at all times
to the sum of (A) the Prime Rate in effect from time to time plus (B)
the Applicable Margin in effect from time to time, payable in arrears
(subject to the provisions of Section 2.11) on the last Business Day
of each March, June, September and December during such periods and
on the date such Prime Rate Advance shall be Converted or paid in
full.
(ii) Eurodollar Rate Advances. During such periods as such
Advance is a Eurodollar Rate Advance, a rate per annum equal at all
times during each Interest Period for such Advance to the sum of (A)
the Eurodollar Rate for such Interest Period for such Advance plus
(B) the Applicable Margin in effect on the first day of such Interest
Period for such Advance, payable in arrears on the last day of such
Interest Period and, if such Interest Period has a duration of more
than three months, on each day that occurs during such Interest
Period every three months from the first day of such Interest Period
and on the date such Eurodollar Rate Advance shall be Converted or
paid in full.
(b) Default Interest. Upon the occurrence and during the continuance
of an Event of Default, the Borrower shall pay interest on (i) the unpaid
principal amount of each Advance owing to each Lender, payable in arrears on
the dates referred to in clause (a)(i) or (a)(ii) above and on demand, at a
rate per annum equal at all times to 2% per annum above the rate per annum
required to be paid on such Advance pursuant to clause (a)(i) or (a)(ii)
above and (ii) to the fullest extent permitted by law, the amount of any
interest, fee or other amount payable hereunder that is not paid when due,
from the date such amount shall be due until such amount shall be paid in
full, payable in arrears on the date such amount shall be paid in full and on
demand, at a rate per annum equal at all times to 2% per annum above the rate
per annum required to be paid, in the case of interest, on the Type of
Advance on which such interest has
38
accrued pursuant to clause (a)(i) or (a)(ii) above, and, in all other cases,
on Prime Rate Advances pursuant to clause (a)(i) above.
(c) Notice of Interest Rate. Promptly after receipt of a Notice of
Borrowing pursuant to Section 2.02(a), the Administrative Agent shall give
notice to the Borrower and each Appropriate Lender of the applicable interest
rate determined by the Administrative Agent for purposes of clause (a)(i) or
(ii).
SECTION 2.08. Fees. (a) Commitment Fee. The Borrower shall pay to
the Administrative Agent for the account of the Lenders a commitment fee,
from the date hereof in the case of each Initial Lender and from the
effective date specified in the Assignment and Acceptance pursuant to which
it became a Lender in the case of each other Lender until the Termination
Date, payable in arrears on the date of the initial Borrowing hereunder, on
the fifteenth day of each March, June, September and December, commencing
September 15, 2000, and on the Termination Date, equal to (i) the average
daily Unused Working Capital Commitment of such Lender plus its Pro Rata
Share of the average daily outstanding Swing Line Advances for the prior
three-month period (or such shorter period for which such commitment fee is
calculated) times (ii) (x) for the period from the Closing Date until
delivery of the financial statements for the Fiscal Year ended October 29,
2000 pursuant to Section 5.03(d), 1/2 of 1% per annum and (y) thereafter, a
percentage determined by reference to the Leverage Ratio as set forth on
Schedule II; provided, however, that any commitment fee accrued with respect
to any of the Commitments of a Defaulting Lender during the period prior to
the time such Lender became a Defaulting Lender and unpaid at such time shall
not be payable by the Borrower so long as such Lender shall be a Defaulting
Lender except to the extent that such commitment fee shall otherwise have
been due and payable by the Borrower prior to such time; and provided further
that no commitment fee shall accrue on any of the Commitments of a Defaulting
Lender so long as such Lender shall be a Defaulting Lender.
(b) Letter of Credit Fees, Etc. (i) The Borrower shall pay to the
Administrative Agent for the account of each Lender a commission, payable in
arrears on the fifteenth day of each March, June, September and December,
commencing September 15, 2000, and on the earliest to occur of the full
drawing expiration, termination or cancellation of any such Letter of Credit
and on the Termination Date, equal to (A) such Lender's Pro Rata Share of the
average daily aggregate Available Amount for the prior three month period (or
such shorter period for which such commission is calculated) of all Letters
of Credit outstanding from time to time times (B) the Applicable Margin per
annum then in effect for Eurodollar Rate Advances under the Working Capital
Facility.
(ii) The Borrower shall pay to the Issuing Bank, for its own
account, (A) a fronting fee, payable in arrears, on the fifteenth day
of each March, June, September and December, commencing September 15,
2000, and on the Termination Date, equal to (x) the average daily
aggregate Available Amount for the prior three month period (or such
shorter period for which such fronting fee is calculated), from the
date hereof until the Termination Date, times (y) 0.25% per annum,
and (B) such other reasonable and customary fees and charges in
accordance with the standard fee schedule of the Issuing Bank or as
the Borrower and the Issuing Bank shall otherwise agree.
39
(c) Administrative Agent's Fees. The Borrower shall pay to the
Administrative Agent for its own account fees set forth in the Administrative
Agent's fee letter.
SECTION 2.09. Conversion of Advances. (a) Optional. The Borrower
may on any Business Day, upon notice given to the Administrative Agent not
later than 11:00 A.M. (Charlotte, North Carolina) on the third Business Day
prior to the date of the proposed Conversion and subject to the provisions of
Sections 2.07 and 2.10, Convert all or any portion of the Advances of one
Type comprising the same Borrowing into Advances of the other Type; provided,
however, that, except as provided in Section 2.10(a), any Conversion of
Eurodollar Rate Advances into Prime Rate Advances shall be made only on the
last day of an Interest Period for such Eurodollar Rate Advances, any
Conversion of Prime Rate Advances into Eurodollar Rate Advances shall be in
an amount not less than the minimum amount specified in Section 2.02(c), no
Conversion of any Advances shall result in more separate Borrowings than
permitted under Section 2.02(c) and each Conversion of Advances comprising
part of the same Borrowing under any Facility shall be made ratably among the
Appropriate Lenders in accordance with their Commitments under such Facility.
Each such notice of Conversion shall, within the restrictions specified
above, specify (i) the date of such Conversion, (ii) the Advances to be
Converted and (iii) if such Conversion is into Eurodollar Rate Advances, the
duration of the initial Interest Period for such Advances. Each notice of
Conversion shall be irrevocable and binding on the Borrower.
(b) Mandatory. (i) On the date on which the aggregate unpaid
principal amount of Eurodollar Rate Advances comprising any Borrowing shall
be reduced, by payment or prepayment or otherwise, to less than $1,000,000,
such Advances shall automatically Convert into Prime Rate Advances.
(ii) If the Borrower shall fail to select the duration of
any Interest Period for any Eurodollar Rate Advances in accordance
with the provisions contained in the definition of "Interest Period"
in Section 1.01, the Administrative Agent will forthwith so notify
the Borrower and the Appropriate Lenders, whereupon each such
Eurodollar Rate Advance will automatically, on the last day of the
then existing Interest Period therefor, Convert into a Prime Rate
Advance.
(iii) Upon the occurrence and during the continuance of any
Event of Default, (x) each Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest Period
therefor, Convert into a Prime Rate Advance and (y) the obligation
of the Lenders to make, or to Convert Advances into, Eurodollar Rate
Advances shall be suspended.
SECTION 2.10. Increased Costs, Etc. (a) If, due to either (i) the
introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request from any
central bank or other governmental authority (whether or not having the force
of law), there shall be any increase in the cost to any Lender Party of
agreeing to make or of making, funding or maintaining Eurodollar Rate
Advances or of agreeing to issue or of issuing or maintaining Letters of
Credit or of agreeing to make or of making or maintaining Letter of Credit
Advances (excluding for purposes of this Section 2.10 any such increased
costs resulting from (i) Taxes or Other Taxes (as to which Section 2.12 shall
govern) and (ii) changes
40
in the basis of taxation of overall net income or overall gross income by the
United States or by the foreign jurisdiction or state under the laws of which
such Lender Party is organized or has its Applicable Lending Office or any
political subdivision thereof), then the Borrower shall from time to time,
upon demand by such Lender Party (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of
such Lender Party additional amounts sufficient to compensate such Lender
Party for such increased cost; provided, however, that a Lender Party
claiming additional amounts under this Section 2.10(a) agrees to use
reasonable efforts (consistent with its internal policy and legal and
regulatory restrictions) to designate a different Applicable Lending Office
if the making of such a designation would avoid the need for, or reduce the
amount of, such increased cost that may thereafter accrue and would not, in
the reasonable judgment of such Lender Party, be otherwise disadvantageous to
such Lender Party. A certificate as to the amount of such increased cost,
submitted to the Borrower by such Lender Party, shall be conclusive and
binding for all purposes, absent manifest error. Upon receipt of notice from
a Lender Party claiming compensation pursuant to this Section 2.10(a) and so
long as no Event of Default shall have occurred and be continuing, the
Borrower shall have the right, on or before the 30th day after receipt of
such notice, to Convert each Eurodollar Rate Advance under which such Lender
has a Commitment into a Prime Rate Advance, subject to payment in full of (i)
all amounts necessary to compensate such Lender for such increased costs and
(ii) any amounts owing pursuant to Section 8.04(c) as a result of such
conversion.
(b) If, due to either (i) the introduction of or any change in or in
the interpretation of any law or regulation or (ii) the compliance with any
guideline or request from any central bank or other governmental authority
(whether or not having the force of law), there shall be any increase in the
amount of capital required or expected to be maintained by any Lender Party
or any corporation controlling such Lender Party as a result of or based upon
the existence of such Lender Party's commitment to lend or to issue Letters
of Credit hereunder and other commitments of such type or the issuance or
maintenance of the Letters of Credit (or similar contingent obligations),
then, upon demand by such Lender Party (with a copy of such demand to the
Administrative Agent), the Borrower shall pay to the Administrative Agent for
the account of such Lender Party, from time to time as specified by such
Lender Party, additional amounts sufficient to compensate such Lender Party
in the light of such circumstances, to the extent that such Lender Party
reasonably determines such increase in capital to be allocable to the
existence of such Lender Party's commitment to lend or to issue Letters of
Credit hereunder or to the issuance or maintenance of any Letters of Credit.
A certificate as to such amounts submitted to the Borrower by such Lender
Party shall be conclusive and binding for all purposes, absent manifest
error.
(c) If, with respect to any Eurodollar Rate Advances under any
Facility, Lenders owed more than 50% of the then aggregate unpaid principal
amount thereof notify the Administrative Agent that the Eurodollar Rate for
any Interest Period for such Advances will not adequately reflect the cost to
such Lenders of making, funding or maintaining their Eurodollar Rate Advances
for such Interest Period, the Administrative Agent shall forthwith so notify
the Borrower and the Lenders, whereupon (i) each such Eurodollar Rate Advance
under any Facility will automatically, on the last day of the then existing
Interest Period therefor, Convert into a Prime Rate Advance and (ii) the
obligation of the Appropriate Lenders to make, or to Convert Advances into,
Eurodollar Rate Advances shall be suspended until the Administrative Agent
41
shall notify the Borrower that such Lenders have determined that the
circumstances causing such suspension no longer exist.
(d) Notwithstanding any other provision of this Agreement, if the
introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any central bank or other governmental
authority shall assert that it is unlawful, for any Lender or its Eurodollar
Lending Office to perform its obligations hereunder to make Eurodollar Rate
Advances or to continue to fund or maintain Eurodollar Rate Advances
hereunder, then, on notice thereof and demand therefor by such Lender to the
Borrower through the Administrative Agent, (i) each Eurodollar Rate Advance
made by such Lender will automatically, upon such demand, Convert into a
Prime Rate Advance, and (ii) the obligation of such Lender to make, or to
Convert Advances into, Eurodollar Rate Advances shall be suspended until the
Administrative Agent shall notify the Borrower that such Lender has
determined that the circumstances causing such suspension no longer exist;
provided, however, that, before making any such demand, such Lender agrees to
use reasonable efforts (consistent with its internal policy and legal and
regulatory restrictions) to designate a different Eurodollar Lending Office
if the making of such a designation would allow such Lender or its Eurodollar
Lending Office to continue to perform its obligations to make Eurodollar Rate
Advances or to continue to fund or maintain Eurodollar Rate Advances and
would not, in the judgment of such Lender, be otherwise disadvantageous to
such Lender.
SECTION 2.11. Payments and Computations. (a) The Borrower shall
make each payment hereunder and under the Notes, irrespective of any right of
counterclaim or set-off (except as otherwise provided in Section 2.15), not
later than 11:00 A.M. (Charlotte, North Carolina time) on the day when due in
U.S. dollars to the Administrative Agent at the Administrative Agent's
Account in same day funds. The Administrative Agent will promptly thereafter
cause like funds to be distributed (i) if such payment by the Borrower is in
respect of principal, interest, commitment fees or any other Obligation then
payable hereunder and under the Notes to more than one Lender Party, to such
Lender Parties for the account of their respective Applicable Lending Offices
ratably in accordance with the amounts of such respective Obligations then
payable to such Lender Parties and (ii) if such payment by the Borrower is in
respect of any Obligation then payable hereunder to one Lender Party, to such
Lender Party for the account of its Applicable Lending Office, in each case
to be applied in accordance with the terms of this Agreement. Upon its
acceptance of an Assignment and Acceptance and recording of the information
contained therein in the Register pursuant to Section 8.07(d), from and after
the effective date of such Assignment and Acceptance, the Administrative
Agent shall make all payments hereunder and under the Notes in respect of the
interest assigned thereby to the Lender Party assignee thereunder, and the
parties to such Assignment and Acceptance shall make all appropriate
adjustments in such payments for periods prior to such effective date
directly between themselves. Periodic principal payments will be made in
respect of the Swing Line Advances as funds are available in the Cash
Management Account in accordance with Section 2.01(d). The Swing Line Bank
shall invoice the Borrower directly on a quarterly basis for interest in
respect of the Swing Line Advances.
(b) If the Administrative Agent receives funds for application to the
Obligations under the Loan Documents under circumstances for which the Loan
Documents do not specify the Advances or the Facility to which, or the manner
in which, such funds are to be applied, the
42
Administrative Agent may, but shall not be obligated to, elect to distribute
such funds to each Lender Party ratably in accordance with such Lender
Party's proportionate share of the principal amount of all outstanding
Advances and the Available Amount of all Letters of Credit then outstanding,
in repayment or prepayment of such of the outstanding Advances or other
Obligations owed to such Lender Party, and for application to such principal
installments, as the Administrative Agent shall direct.
(c) The Borrower hereby authorizes each Lender Party, if and to the
extent payment owed to such Lender Party is not made when due hereunder or,
in the case of a Lender, under the Note held by such Lender, to charge from
time to time against any or all of the Borrower's accounts with such Lender
Party any amount so due.
(d) All computations of interest, fees and Letter of Credit
commissions shall be made by the Administrative Agent on the basis of a year
of 360 days, in each case for the actual number of days (including the first
day but excluding the last day) occurring in the period for which such
interest, fees or commissions are payable. Each determination by the
Administrative Agent of an interest rate, fee or commission hereunder shall
be conclusive and binding for all purposes, absent manifest error.
(e) Whenever any payment hereunder or under the Notes shall be stated
to be due on a day other than a Business Day, such payment shall be made on
the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest or commitment fee,
as the case may be; provided, however, that, if such extension would cause
payment of interest on or principal of Eurodollar Rate Advances to be made in
the next following calendar month, such payment shall be made on the next
preceding Business Day.
(f) Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to any Lender
Party hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in
full to the Administrative Agent on such date and the Administrative Agent
may, in reliance upon such assumption, cause to be distributed to each such
Lender Party on such due date an amount equal to the amount then due such
Lender Party. If and to the extent the Borrower shall not have so made such
payment in full to the Administrative Agent, each such Lender Party shall
repay to the Administrative Agent forthwith on demand such amount distributed
to such Lender Party together with interest thereon, for each day from the
date such amount is distributed to such Lender Party until the date such
Lender Party repays such amount to the Administrative Agent, at the Federal
Funds Rate.
SECTION 2.12. Taxes. (a) Any and all payments by the Borrower and
each other Loan Party to or for the account of any Lender Party or the
Administrative Agent hereunder or under any other Loan Document shall be
made, in accordance with Section 2.11 or the applicable provisions of such
other Loan Document, free and clear of and without deduction for any and all
present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in the
case of each Lender Party and the Administrative Agent, taxes that are
imposed on its overall net income by the United States and taxes that are
imposed on or measured by its overall net income (and franchise taxes or
excise
43
taxes pursuant to Sections 67-4-801 through 822 of the Tennessee Code
Annotated imposed in lieu thereof) by the state or foreign jurisdiction under
the laws of which such Lender Party or the Administrative Agent (as the case
may be) is organized or any political subdivision thereof and, in the case of
each Lender Party, taxes that are imposed on or measured by its overall net
income (and franchise taxes imposed or excise taxes pursuant to Sections 67-
4-801 through 822 of the Tennessee Code Annotated in lieu thereof) by the
state or foreign jurisdiction of such Lender Party's Applicable Lending
Office or any political subdivision thereof (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities in respect
of payments hereunder or under any other Loan Document being hereinafter
referred to as "Taxes"). If any Loan Party shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder or under any
other Loan Document to any Lender Party or the Administrative Agent, (i) the
sum payable shall be increased as may be necessary so that after making all
required deductions (including deductions applicable to additional sums
payable under this Section 2.12) such Lender Party or the Administrative
Agent (as the case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Loan Party shall make
such deductions and (iii) the Borrower shall pay the full amount deducted to
the relevant taxation authority or other governmental authority in accordance
with applicable law and (iv) within 30 days after the date of any payment of
Taxes, the Borrower shall furnish to the Administrative Agent, at its address
referred to in Section 8.02, the original or a certified copy of a receipt
evidencing such payment.
(b) In addition, the Borrower and each other Loan Party shall pay any
present or future stamp, documentary, excise, property or similar taxes,
charges or levies that arise from any payment made hereunder or under any
other Loan Document or from the execution, delivery or registration of,
performance under, or otherwise with respect to, this Agreement or any other
Loan Document (hereinafter referred to as "Other Taxes").
(c) The Borrower and each other Loan Party shall indemnify each
Lender Party and the Administrative Agent for and hold it harmless against
the full amount of Taxes and Other Taxes (including, without limitation, the
full amount of taxes of any kind imposed or asserted by any jurisdiction on
amounts payable under this Section 2.12), imposed on or paid by such Lender
Party or the Administrative Agent (as the case may be) and any liability
(including penalties, additions to tax, interest and expenses) arising
therefrom or with respect thereto. This indemnification shall be made within
30 days from the date such Lender Party or the Administrative Agent (as the
case may be) makes written demand therefor.
(d) In the case of any payment hereunder or under any other Loan
Document by or on behalf of the Borrower through an account or branch outside
the United States or by or on behalf of the Borrower by a payor that is not
a United States person, if the Borrower determines that no Taxes are payable
in respect thereof, the Borrower shall furnish, or shall cause such payor to
furnish, to the Administrative Agent, at such address, an opinion of counsel
acceptable to the Administrative Agent stating that such payment is exempt
from Taxes. For purposes of this subsection (d) and subsection (e) of this
Section 2.12, the terms "United States" and "United States person" shall have
the meanings specified in Section 7701 of the Internal Revenue Code.
(e) Each Lender Party organized under the laws of a jurisdiction
outside the United States shall, on or prior to the date of its execution and
delivery of this Agreement in the
44
case of each Initial Lender or Initial Issuing Bank, as the case may be, and
on or prior to the date of the Assignment and Acceptance pursuant to which it
becomes a Lender Party in the case of each other Lender Party, and from time
to time thereafter as reasonably requested in writing by the Borrower (but
only so long thereafter as such Lender Party remains lawfully able to do
so), provide each of the Administrative Agent and the Borrower either with
two original Internal Revenue Service Forms W-8BEN, W-8IMY or W-8ECI, as
appropriate, or any successor or other form prescribed by the Internal
Revenue Service or in the case of a Lender Party that has certified in
writing to the Administrative Agent that it is not (i) a "bank" as defined in
Section 881(c)(3)(A) of the Internal Revenue Code), (ii) a 10-percent
shareholder (within the meaning of Section 871(h)(3)(B) of the Internal
Revenue Code) of the Borrower or (iii) a controlled foreign corporation
related to the Borrower (within the meaning of Section 864(d)(4) of the
Internal Revenue Code), an Internal Revenue Service Form W-8BEN or Form W-
8IMY as appropriate, or any successor or other form prescribed by the
Internal Revenue Service, certifying that such Lender Party is exempt from or
entitled to a reduced rate of United States withholding tax on payments
pursuant to this Agreement or any other Loan Document or, in the case of a
Lender Party that is not a "bank" as described above, certifying that such
Lender Party is a foreign corporation, partnership, estate or trust. If the
forms provided by a Lender Party at the time such Lender Party first becomes
a party to this Agreement indicate a United States interest withholding tax
rate in excess of zero, withholding tax at such rate shall be considered
excluded from Taxes unless and until such Lender Party provides the
appropriate forms certifying that a lesser rate applies, whereupon
withholding tax at such lesser rate only shall be considered excluded from
Taxes for periods governed by such form; provided, however, that, if at the
date of the Assignment and Acceptance pursuant to which a Lender Party
becomes a party to this Agreement, the Lender Party assignor was entitled to
payments under subsection (a) of this Section 2.12 in respect of United
States withholding tax with respect to interest paid at such date, then, to
such extent, the term Taxes shall include (in addition to withholding taxes
that may be imposed in the future or other amounts otherwise includable in
Taxes) United States withholding tax, if any, applicable with respect to the
Lender Party assignee on such date. If any form or document referred to in
this subsection (e) requires the disclosure of information, other than
information necessary to compute the tax payable and information required on
the date hereof by Internal Revenue Service Forms X-0XXX, X-0XXX or W-8IMY or
the related certificate described above, that the Lender Party reasonably
considers to be confidential, the Lender Party shall give notice thereof to
the Borrower and shall not be obligated to include in such form or document
such confidential information.
(f) For any period with respect to which a Lender Party has failed
to provide the Borrower or the Administrative Agent with the appropriate
form, certificate or other document described in subsection (e) above (other
than if such failure is due to a change in law, or in the interpretation or
application thereof, occurring after the date on which a form, certificate or
other document originally was required to be provided or if such form,
certificate or other document otherwise is not required under subsection (e)
above), such Lender Party shall not be entitled to indemnification under
subsection (a) or (c) of this Section 2.12 with respect to Taxes imposed by
the United States by reason of such failure; provided, however, that should
a Lender Party become subject to Taxes because of its failure to deliver a
form, certificate or other document required hereunder, the Borrower shall
take such steps as such Lender Party shall reasonably request to assist such
Lender Party to recover such Taxes. For purposes of this Section 2.12, the
entry into force of the final U.S. Department of Treasury regulations
promulgated under Sections
45
1441 and 1442 of the Internal Revenue Code, published but not yet effective
as of the date of this Agreement, will not be considered a change in the
applicable law or in the interpretation or application thereof.
(g) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained
in this Section 2.12 shall survive the repayment of the Advances and the
other obligations under the Loan Documents and the termination of the
Commitments hereunder.
SECTION 2.13. Sharing of Payments, Etc. If any Lender Party shall
obtain at any time any payment (whether voluntary, involuntary, through the
exercise of any right of set-off, or otherwise) (other than pursuant to
Section 2.10, 2.12, 8.04 or 8.07 hereof and other than in respect of payments
made in respect of the Swing Line Advances pursuant to the Cash Management
Documentation) (a) on account of Obligations due and payable to such Lender
Party hereunder and under the Notes at such time in excess of its ratable
share (according to the proportion of (i) the amount of such Obligations due
and payable to such Lender Party at such time to (ii) the aggregate amount of
the Obligations due and payable to all Lender Parties hereunder and under the
Notes at such time) of payments on account of the Obligations due and payable
to all Lender Parties hereunder and under the Notes at such time obtained by
all the Lender Parties at such time or (b) on account of Obligations owing
(but not due and payable) to such Lender Party hereunder and under the Notes
at such time in excess of its ratable share (according to the proportion of
(i) the amount of such Obligations owing to such Lender Party at such time to
(ii) the aggregate amount of the Obligations owing (but not due and payable)
to all Lender Parties hereunder and under the Notes at such time) of payments
on account of the Obligations owing (but not due and payable) to all Lender
Parties hereunder and under the Notes at such time obtained by all of the
Lender Parties at such time, such Lender Party shall forthwith purchase from
the other Lender Parties such participations in the Obligations due and
payable or owing to them, as the case may be, as shall be necessary to cause
such purchasing Lender Party to share the excess payment ratably with each of
them; provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender Party, such purchase from
each other Lender Party shall be rescinded and such other Lender Party shall
repay to the purchasing Lender Party the purchase price to the extent of such
Lender Party's ratable share (according to the proportion of (i) the purchase
price paid to such Lender Party to (ii) the aggregate purchase price paid to
all Lender Parties) of such recovery together with an amount equal to such
Lender Party's ratable share (according to the proportion of (i) the amount
of such other Lender Party's required repayment to (ii) the total amount so
recovered from the purchasing Lender Party) of any interest or other amount
paid or payable by the purchasing Lender Party in respect of the total amount
so recovered. The Borrower agrees that any Lender Party so purchasing a
participation from another Lender Party pursuant to this Section 2.13 may, to
the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully
as if such Lender Party were the direct creditor of the Borrower in the
amount of such participation.
SECTION 2.14. Use of Proceeds and Issuance of Letters of Credit.
The proceeds of the Advances and issuances of Letters of Credit shall be
available (and the Borrower agrees that it shall use such proceeds and
Letters of Credit) solely (i) to finance in part the Restructuring
46
and the Refinancing, (ii) to pay transaction fees and expenses, and (iii) to
provide funds for general corporate purposes, and provide working capital for
the Borrower and its Subsidiaries.
SECTION 2.15. Defaulting Lenders. (a) In the event that, at any one
time, (i) any Lender Party shall be a Defaulting Lender, (ii) such Defaulting
Lender shall owe a Defaulted Advance to the Borrower and (iii) the Borrower
shall be required to make any payment hereunder or under any other Loan
Document to or for the account of such Defaulting Lender, then the Borrower
may, so long as no Default shall occur or be continuing at such time and to
the fullest extent permitted by applicable law, set off and otherwise apply
the Obligation of the Borrower to make such payment to or for the account of
such Defaulting Lender against the Obligation of such Defaulting Lender to
make such Defaulted Advance. In the event that, on any date, the Borrower
shall so set off and otherwise apply its obligation to make any such payment
against the obligation of such Defaulting Lender to make any such Defaulted
Advance on or prior to such date, the amount so set off and otherwise applied
by the Borrower shall constitute for all purposes of this Agreement and the
other Loan Documents an Advance by such Defaulting Lender made on the date of
set-off or application by the Borrower under the Facility pursuant to which
such Defaulted Advance was originally required to have been made pursuant to
Section 2.01. Such Advance shall be a Prime Rate Advance and shall be
considered, for all purposes of this Agreement, to comprise part of the
Borrowing in connection with which such Defaulted Advance was originally
required to have been made pursuant to Section 2.01, even if the other
Advances comprising such Borrowing shall be Eurodollar Rate Advances on the
date such Advance is deemed to be made pursuant to this subsection (a). The
Borrower shall notify the Administrative Agent at any time the Borrower
exercises its right of set-off pursuant to this subsection (a) and shall set
forth in such notice (A) the name of the Defaulting Lender and the Defaulted
Advance required to be made by such Defaulting Lender and (B) the amount set
off and otherwise applied in respect of such Defaulted Advance pursuant to
this subsection (a). Any portion of such payment otherwise required to be
made by the Borrower to or for the account of such Defaulting Lender which is
paid by the Borrower, after giving effect to the amount set off and otherwise
applied by the Borrower pursuant to this subsection (a), shall be applied by
the Administrative Agent as specified in subsection (b) or (c) of this
Section 2.15.
(b) In the event that, at any one time, (i) any Lender Party shall
be a Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted
Amount to the Administrative Agent or any of the other Lender Parties and
(iii) the Borrower shall make any payment hereunder or under any other Loan
Document to the Administrative Agent for the account of such Defaulting
Lender, then the Administrative Agent may, on its behalf or on behalf of such
other Lender Parties and to the fullest extent permitted by applicable law,
apply at such time the amount so paid by the Borrower to or for the account
of such Defaulting Lender to the payment of each such Defaulted Amount to the
extent required to pay such Defaulted Amount. In the event that the
Administrative Agent shall so apply any such amount to the payment of any
such Defaulted Amount on any date, the amount so applied by the
Administrative Agent shall constitute for all purposes of this Agreement and
the other Loan Documents payment, to such extent, of such Defaulted Amount on
such date. Any such amount so applied by the Administrative Agent shall be
retained by the Administrative Agent or distributed by the Administrative
Agent to such other Lender Parties, ratably in accordance with the respective
portions of such Defaulted Amounts payable at such time to the Administrative
Agent and such other Lender Parties and, if the amount of such payment made
by the Borrower shall at such time be insufficient to pay all
47
Defaulted Amounts owing at such time to the Administrative Agent and the
other Lender Parties, in the following order of priority:
(i) first, to the Administrative Agent for any Defaulted
Amount then owing to the Administrative Agent; and
(ii) second, to any other Lender Parties for any Defaulted
Amounts then owing to such other Lender Parties, ratably in
accordance with such respective Defaulted Amounts then owing to such
other Lender Parties.
Any portion of such amount paid by the Borrower for the account of such
Defaulting Lender remaining, after giving effect to the amount applied by the
Administrative Agent pursuant to this subsection (b), shall be applied by the
Administrative Agent as specified in subsection (c) of this Section 2.15.
(c) In the event that, at any one time, (i) any Lender Party shall
be a Defaulting Lender, (ii) such Defaulting Lender shall not owe a Defaulted
Advance or a Defaulted Amount and (iii) the Borrower, the Administrative
Agent or any other Lender Party shall be required to pay or distribute any
amount hereunder or under any other Loan Document to or for the account of
such Defaulting Lender, then the Borrower or such other Lender Party shall
pay such amount to the Administrative Agent to be held by the Administrative
Agent, to the fullest extent permitted by applicable law, in escrow or the
Administrative Agent shall, to the fullest extent permitted by applicable
law, hold in escrow such amount otherwise held by it. Any funds held by the
Administrative Agent in escrow under this subsection (c) shall be deposited
by the Administrative Agent in an account with Bank of America, in the name
and under the control of the Administrative Agent, but subject to the
provisions of this subsection (c). The terms applicable to such account,
including the rate of interest payable with respect to the credit balance of
such account from time to time, shall be Bank of America's standard terms
applicable to escrow accounts maintained with it. Any interest credited to
such account from time to time shall be held by the Administrative Agent in
escrow under, and applied by the Administrative Agent from time to time in
accordance with the provisions of, this subsection (c). The Administrative
Agent shall, to the fullest extent permitted by applicable law, apply all
funds so held in escrow from time to time to the extent necessary to make any
Advances required to be made by such Defaulting Lender and to pay any amount
payable by such Defaulting Lender hereunder and under the other Loan
Documents to the Administrative Agent or any other Lender Party, as and when
such Advances or amounts are required to be made or paid and, if the amount
so held in escrow shall at any time be insufficient to make and pay all such
Advances and amounts required to be made or paid at such time, in the
following order of priority:
(i) first, to the Administrative Agent for any amount then
due and payable by such Defaulting Lender to the Administrative Agent
hereunder;
(ii) second, to any other Lender Parties for any amount then
due and payable by such Defaulting Lender to such other Lender
Parties hereunder, ratably in accordance with such respective amounts
then due and payable to such other Lender Parties; and
48
(iii) third, to the Borrower for any Advance then required
to be made by such Defaulting Lender pursuant to a Commitment of such
Defaulting Lender.
In the event that any Lender Party that is a Defaulting Lender shall, at any
time, cease to be a Defaulting Lender, any funds held by the Administrative
Agent in escrow at such time with respect to such Lender Party shall be
distributed by the Administrative Agent to such Lender Party and applied by
such Lender Party to the Obligations owing to such Lender Party at such time
under this Agreement and the other Loan Documents ratably in accordance with
the respective amounts of such Obligations outstanding at such time.
The rights and remedies against a Defaulting Lender under this
Section 2.15 are in addition to other rights and remedies that the Borrower
may have against such Defaulting Lender with respect to any Defaulted Advance
and that the Administrative Agent or any Lender Party may have against such
Defaulting Lender with respect to any Defaulted Amount.
SECTION 2.16. Replacement of Certain Lenders. If any Lender (a
"Subject Lender") makes demand upon the Borrower for (or if the Borrower is
otherwise required to pay) amounts pursuant to Section 2.10(a) or (b) or
Section 2.12 or gives notice pursuant to Section 2.10 (c) or (d) requiring a
conversion of such Subject Lender's Eurodollar Rate Advances to Prime Rate
Advances or suspending such Lender's obligation to make advances as, or to
Convert or continue Advances into or as, Eurodollar Rate Advances, the
Borrower, may, within 90 days of receipt by the Borrower of such demand or
notice (or the occurrence of such other event causing the Borrower to be
required to pay such compensation), as the case may be, give notice (a
"Replacement Notice") in writing to the Administrative Agent and such Subject
Lender of its intention to replace such Subject Lender with a financial
institution (a "Replacement Lender") designated in such Replacement Notice.
Unless the Administrative Agent shall, in the exercise of its reasonable
discretion and within 30 days of its receipt of such Replacement Notice,
notify the Borrower and such Subject Lender in writing that the designated
financial institution is unsatisfactory to the Administrative Agent (such
denial not being available to the Administrative Agent where the Replacement
Lender is already a Lender), then such Subject Lender shall, subject to the
payment of any amounts due pursuant to Sections 2.10(a) and (b) and Section
2.12 assign, in accordance with Section 8.07, all of its Commitments,
Advances, Notes and other rights and obligations under this Agreement and all
other Loan Documents to such designated financial institution; provided,
however, that (i) such assignment shall be without recourse, representation
or warranty and (ii) the purchase price paid by such designated financial
institution shall be in at least the amount of such Subject Lender's
Advances, together with all accrued and unpaid interest and fees in respect
thereof, plus all other amounts (including the amounts demanded and
unreimbursed under Sections 2.10(a) and (b) and Section 2.12 owing to such
Subject Lender hereunder. Upon the effective date of an assignment described
above, the Borrower shall issue a replacement Note or Notes, as the case may
be, to such designated financial institution or Replacement Lender, as
applicable, and such institution shall become a "Lender" for all purposes
under this Agreement and the other Loan Documents.
ARTICLE III
CONDITIONS OF LENDING
49
SECTION 3.01. Conditions Precedent to Initial Extension of Credit.
The obligation of each Lender to make an Advance or of the Issuing Bank to
issue a Letter of Credit on the occasion of the Initial Extension of Credit
hereunder is subject to the satisfaction of the following conditions
precedent before or concurrently with the Initial Extension of Credit:
(a) The elements of the Transaction to be effected on or before the
Closing Date as set forth on Schedule 3.01(a) hereto shall have been
consummated on terms and conditions consistent with those described in the
Information Memorandum and otherwise reasonably satisfactory to the Lenders
and in compliance with applicable law and regulatory approvals, and each of
the Lenders shall be satisfied in all reasonable respects with the terms and
conditions of all material agreements and instruments relating to the
Transaction and there shall not have been any material modification,
amendment, supplement or waiver to any material agreement or instrument
relating to the Transaction that could adversely affect the Lenders in any
material respect including, without limitation, any modification, amendment,
supplement or waiver relating to (A) the amount or type of consideration to
be paid in connection with the Transaction and all related tax, legal and
accounting matters and (B) the capitalization, structure and equity ownership
of the Borrower and its Subsidiaries after giving effect to the Transaction.
(b) The Lender Parties shall be satisfied with the corporate or
partnership (as applicable) and legal structure and capitalization of each
Loan Party and each of its Subsidiaries, including the terms and conditions
of the charter (including, without limitation, the provisions in the charter
of the Borrower providing for the unanimous vote of its shareholders to
effect a voluntary bankruptcy of the Borrower), bylaws and each class of
Equity Interests of each Loan Party and each such Subsidiary and of each
agreement or instrument relating to such structure or capitalization
(including, without limitation, the Voting Trust Agreement and all
shareholders' arrangements with respect to the Borrower or its Subsidiaries).
(c) The Lender Parties shall (i) be satisfied that all Existing Debt,
other than the Surviving Debt, has been prepaid, redeemed or defeased in full
or otherwise satisfied and extinguished and that all such Surviving Debt
shall be on terms and conditions satisfactory to the Lender Parties, (ii)
have received duly executed and, if applicable, acknowledged, satisfactions,
releases and terminations in form sufficient under applicable law to release,
terminate and discharge all Liens securing Existing Debt other than Surviving
Debt and (iii) be satisfied that Shoney's has accepted a tender offer for the
Debentures and the XXXXX on terms and conditions satisfactory to the Lender
Parties.
(d) Before giving effect to the transactions contemplated by this
Agreement, there shall have occurred no Material Adverse Change since October
31, 1999.
(e) There shall exist no action, suit, investigation, litigation or
proceeding affecting any Loan Party or any of its Subsidiaries pending or
threatened before any court, governmental agency or arbitrator that (i) would
be reasonably likely to have a Material Adverse Effect other than the matters
described on Schedule 3.01(e) (the "Disclosed Litigation") or (ii) purports
to affect the legality, validity or enforceability of this Agreement, any
Note or any other Transaction Document, or the consummation of the
Transaction or the transactions contemplated hereby or thereby, and there
shall have been no adverse change in the status, or financial effect
50
on, any Loan Party or any of its Subsidiaries, of the Disclosed Litigation
from that described on Schedule 3.01(e).
(f) The Lender Parties shall have completed a due diligence
investigation of the Borrower and its Subsidiaries in scope, and with
results, satisfactory to the Lender Parties, and nothing shall have come to
the attention of the Lender Parties during the course of such due diligence
investigation to lead them to believe that (i) the Information Memorandum was
or has become misleading, incorrect or incomplete in any material respect or
(ii) any changes or developments have occurred, or any new or additional
information has come to their attention regarding Shoney's or any of its
Subsidiaries or any aspect of the Transaction that either individually or in
the aggregate could reasonably be expected to have a Material Adverse Effect
or adversely affect the Lender Parties or the Transaction; without limiting
the generality of the foregoing, the Lender Parties shall have been given
such access to the management, records, books of account, contracts and
properties of the Borrower and its Subsidiaries as they shall have requested.
(g) All governmental and third party consents and approvals and
authorizations of, notices and filings to or with, and other actions by any
other Person necessary in connection with any aspect of the Transaction, any
of the Transaction Documents or any of the other transactions contemplated
thereby, other than third party consents and approvals described on Schedule
3.01(g) hereto that have not been obtained that relate to the Restructuring,
shall have been obtained (without the imposition of any conditions that are
not acceptable to the Lender Parties) and shall remain in effect; all
applicable waiting periods in connection with the Transaction shall have
expired without any action being taken by any competent authority, and no law
or regulation shall be applicable in the judgment of the Lender Parties, in
each case that restrains, prevents or imposes materially adverse conditions
upon the Transaction or the rights of the Loan Parties or their Subsidiaries
freely to transfer or otherwise dispose of, or to create any Lien on, any
properties now owned or hereafter acquired by any of them.
(h) The Lender Parties shall be satisfied that there are no existing
or potential material tax, ERISA or environmental liabilities, or other
existing or potential material direct or contingent liabilities, other than
such liabilities disclosed in the audited financial statements for the fiscal
year ended October 31, 1999 of Shoney's and its Subsidiaries or described on
Schedule 3.01(h) hereto.
(i) The Administrative Agent shall be satisfied with (i) all
arrangements between the Borrower and its Subsidiaries, on the one hand, and
Shoney's and its other Subsidiaries, on the other hand, and (ii) all tax
sharing arrangements and administrative service agreements among Shoney's and
its Subsidiaries, including the Borrower.
(j) The Borrower shall have paid all accrued fees of the
Administrative Agent and the Lender Parties and all accrued and invoiced
expenses of the Administrative Agent and the Lender Parties (including the
accrued and invoiced fees and expenses of counsel to the Administrative
Agent, special intellectual property counsel to the Administrative Agent and
local counsel to the Administrative Agent).
51
(k) The Administrative Agent shall have received on or before the day
of the Initial Extension of Credit the following, each dated such day (unless
otherwise specified), in form and substance reasonably satisfactory to the
Administrative Agent (unless otherwise specified) and (except for the Notes)
in sufficient copies for each Lender Party:
(i) The Notes payable to the order of the Lenders.
(ii) Certified copies of the resolutions of the Board of
Directors of the Borrower and each other Loan Party approving the
Transaction, this Agreement, the Notes and each other Transaction
Document to which it is or is to be a party, and of all documents
evidencing other necessary corporate action and governmental and
other third party approvals and consents, if any, with respect to the
Transaction, this Agreement, the Notes and each other Transaction
Document.
(iii) A copy of the charter or certificate of formation, as
applicable, of the Borrower and each other Loan Party and each
amendment thereto, certified (as of a date reasonably near the date
of the Initial Extension of Credit) by the Secretary of State (or
other appropriate officer) of the jurisdiction of its incorporation
or formation as being a true and correct copy thereof.
(iv) A copy of a certificate of the Secretary of State (or
other appropriate officer) of the jurisdiction of its incorporation
or formation, dated reasonably near the date of the Initial Extension
of Credit, certifying that (A) the Borrower and each other Loan Party
have paid all franchise taxes due prior to the date of such
certificate and (B) the Borrower and each other Loan Party are duly
incorporated or formed and in good standing under the laws of the
jurisdiction of its incorporation or formation.
(v) A copy of a certificate of the Secretary of State (or
other appropriate officer) of each jurisdiction in which the Borrower
and each other Loan Party transacts business, dated reasonably near
the date of the Initial Extension of Credit, stating that the
Borrower and each other Loan Party are duly qualified and in good
standing as foreign corporations or limited liability companies, as
applicable, in such State and have filed all annual reports required
to be filed to the date of such certificate.
(vi) A certificate of the Borrower and each other Loan
Party, signed on behalf of the Borrower and such other Loan Party by
its President or a Vice President and its Secretary or any Assistant
Secretary, dated the date of the Initial Extension of Credit (the
statements made in which certificate shall be true on and as of the
date of the Initial Extension of Credit), certifying as to (A) the
absence of any amendments to the charter or certificate of formation,
as applicable, of the Borrower or such other Loan Party since the
date of the Secretary of State's certificate referred to in Section
3.01(k)(iii), (B) a true and correct copy of the bylaws or operating
agreement, as applicable, of the Borrower and such other Loan Party
as in effect on the date of the Initial Extension of Credit, (C) the
due incorporation or formation and good standing of the Borrower and
such other Loan Party as a corporation or limited liability company,
as applicable, organized under the laws of the jurisdiction of its
incorporation or formation, and the absence of any proceeding for the
dissolution or liquidation of the Borrower or such other Loan Party,
52
(D) the truth of the representations and warranties contained in the
Transaction Documents as though made on and as of the date of the
Initial Extension of Credit and (E) the absence of any event
occurring and continuing, or resulting from the Initial Extension of
Credit, that constitutes a Default.
(vii) A certificate of the Secretary or an Assistant
Secretary of the Borrower and each other Loan Party certifying the
names and true signatures of the officers of the Borrower and such
other Loan Party authorized to sign this Agreement, the Notes and
each other Transaction Document to which they are or are to be
parties and the other documents to be delivered hereunder and
thereunder.
(viii) A security agreement in substantially the form of
Exhibit D (together with each other security agreement delivered
pursuant to Section 5.01(l), in each case as amended, supplemented
or otherwise modified from time to time in accordance with its terms,
the "Security Agreement"), duly executed by the Borrower and each
other Collateral Grantor together with:
(A) certificates representing the Pledged Shares
accompanied by undated stock powers executed in blank and
instruments evidencing the Pledged Debt indorsed in blank,
(B) executed copies of proper financing statements,
to be filed under the Uniform Commercial Code of all
jurisdictions that the Administrative Agent may deem
necessary or desirable in order to perfect and protect the
first priority liens and security interests created under
the Security Agreement, covering the Collateral,
(C) completed requests for information, dated on or
before the date of the Initial Extension of Credit, listing
all effective financing statements filed as of the date of
such requests in the jurisdictions referred to in clause (B)
above that name the Borrower or any other Collateral Grantor
as debtor, together with copies of such other financing
statements that the Administrative Agent deems necessary or
desirable,
(D) evidence of the insurance required by the terms
of this Agreement,
(E) copies of the Assigned Agreements, and
(F) evidence that all other action that the
Administrative Agent may deem necessary or desirable in
order to perfect and protect the first priority liens and
security interests created under the Security Agreement has
been taken or that the necessary steps for such action have
been taken.
(ix) An intellectual property security agreement in
substantially the form of Exhibit I (together with each other
intellectual property security agreement delivered pursuant to
Section 5.01(l), in each case as amended, supplemented or otherwise
modified from time to time in accordance with its terms, the
"Intellectual
53
Property Security Agreement"), duly executed by the Borrower and each
other Collateral Grantor together with evidence that all action that
the Administrative Agent may deem necessary or desirable in order to
perfect and protect the first priority liens and security interests
created under the Intellectual Property Security Agreement has been
taken or that the necessary steps for such action have been taken.
(x) A Pledge Agreement in substantially the form of Exhibit
D-2 (together with each other pledge agreement delivered pursuant to
Section 5.01(l), in each case as amended, supplemented or otherwise
modified from time to time in accordance with its terms, the "Pledge
Agreement"), duly executed by Shoney's, TPI and any other Person that
holds any Equity Interests in the Borrower (other than the Trustee
under the Voting Trust Agreement) together with:
(A) certificates representing the Pledged Shares
accompanied by undated stock powers executed in blank,
(B) executed copies of proper financing statements,
to be filed under the Uniform Commercial Code of all
jurisdictions that the Administrative Agent may deem
necessary or desirable in order to perfect and protect the
first priority liens and security interests created under
the Pledge Agreement, covering the Collateral,
(C) completed requests for information, dated on or
before the date of the Initial Extension of Credit, listing
all effective financing statements filed as of the date of
such requests in the jurisdictions referred to in clause (B)
above that name Shoney's as debtor, together with copies of
such other financing statements, and
(D) evidence that all other action that the
Administrative Agent may deem reasonably necessary or
desirable in order to perfect and protect the first priority
liens and security interests created under the Pledge
Agreement has been taken or that the necessary steps for
such action have been taken.
(xi) A subsidiary guaranty in substantially the form of
Exhibit G (as amended, supplemented or otherwise modified from time
to time in accordance with its terms, the "Subsidiary Guaranty"),
duly executed by each Subsidiary Guarantor.
(xii) Deeds of trust, trust deeds and mortgages in
substantially the form of Exhibit F and covering each of the
properties located in Florida listed on Schedule
3.01(k)(xii)(together with each other mortgage delivered pursuant to
Section 5.01(l), (n) and (x), in each case as amended, supplemented
or otherwise modified from time to time in accordance with their
terms, the "Mortgages"), duly executed by the Borrower, together
with:
(A) fully paid American Land Title Association
Lender's Extended Coverage title insurance policies or in
lieu thereof binding commitments therefor (the "Mortgage
Policies") in form and substance, with endorsements and in
amount, acceptable to the Administrative Agent, issued,
coinsured and reinsured
54
by title insurers acceptable to the Administrative Agent,
insuring the Mortgages to be valid first and subsisting
Liens on the properties listed on Schedule 3.01(k)(xii),
free and clear of all defects (including, but not limited
to, mechanics' and materialmen's Liens) and encumbrances,
excepting only Permitted Encumbrances and receipt of
surveys, and providing for such other affirmative insurance
(including endorsements for future advances under the Loan
Documents and for mechanics' and materialmen's Liens) and
such coinsurance and direct access reinsurance as the
Administrative Agent may deem necessary or desirable,
(B) an appraisal of each of the properties indicated
on Schedule 3.01(k)(xii) that are located in Florida, which
appraisals shall be from Xxxxxxxx & Xxxxxxx or any other
Person acceptable to the Lender Parties and otherwise in
form and substance satisfactory to the Lender Parties,
(C) evidence of the insurance required by the terms
of this Agreement, and
(D) evidence that all other action that the
Administrative Agent may reasonably deem necessary or
desirable in order to create valid first and subsisting
Liens on the properties listed on Schedule 3.01(k)(xii) has
been taken or that the necessary steps for such action have
been taken.
(xiii) Such financial, business and other information
regarding each Loan Party and its Subsidiaries as the Lender Parties
shall have requested, including, without limitation, the Consolidated
balance sheet as at May 14, 2000 for the Borrower and its
Subsidiaries, information as to possible contingent liabilities, tax
matters, environmental matters, obligations under Plans,
Multiemployer Plans and Welfare Plans, collective bargaining
agreements and other arrangements with employees, audited annual
financial statements of the Borrower and its Subsidiaries dated
October 25, 1998 and October 31, 1999, interim year-to-date financial
statements of the Borrower and its Subsidiaries for the twenty-eight
week period ended May 14, 2000, a pro forma balance sheet and income
statement of the Borrower and its Subsidiaries as of May 14, 2000
which gives effect to all elements of the Transaction to be effected
on or before the Closing Date, and forecasts prepared by management
of the Borrower in form and substance satisfactory to the Lender
Parties, of balance sheets, income statements and cash flow
statements on a fiscal quarterly basis for the Fiscal Year in which
the Initial Extension of Credit occurs and on an annual basis for
each Fiscal Year thereafter until the Termination Date.
(xiv) Certificates substantially in the form of Exhibit K,
attesting to the Solvency of the Loan Parties after giving effect to
the elements of the Transaction to be effected on or before the
Closing Date and the other transactions contemplated hereby, from its
president, treasurer, controller, chief financial officer or
principal financial officer.
55
(xv) A letter, in form and substance satisfactory to the
Administrative Agent, from the Borrower to Ernst & Young, its
independent certified public accountants, advising such accountants
that the Administrative Agent and the Lender Parties have been
authorized to exercise (in the presence of a representative of the
Borrower) all rights of the Borrower to require such accountants to
disclose any and all financial statements and any other information
of any kind that they may have with respect to the Borrower and its
Subsidiaries and directing such accountants to comply with any
reasonable request of the Administrative Agent for such information.
(xvi) Evidence of insurance naming the Administrative Agent
as an additional insured party with such responsible and reputable
insurance companies or associations, and in such amounts and covering
such risks, as is satisfactory to the Lender Parties, including,
without limitation, business interruption insurance.
(xvii) A favorable opinion of (A) Xxxxxxxx & Shohl, LLP,
counsel for the Borrower, in substantially the form of Exhibit H-1
hereto and as to such other matters as any Lender Party through the
Administrative Agent may reasonably request, (B) Xxxxx Xxxxxxxxxx,
special New York counsel for the Borrower, in substantially the form
of Exhibit H-2 hereto and as to such other matters as any Lender
Party through the Administrative Agent may reasonably request, and
(C) Xxxxxxxx, Xxxxxx & Finger, P.A., special Delaware Counsel for the
Borrower, in substantially the form of Exhibit H-3 hereto and as to
such other matters as any Lender Party through the Administrative
Agent may reasonably request.
(xviii) Favorable opinions of local counsel in the States
listed on Schedule 3.01(k)(xviii), in substantially the form of
Exhibit J hereto and as to such other matters as any Lender Party
through the Administrative Agent may reasonably request.
(xix) A favorable opinion of Shearman & Sterling, counsel
for the Administrative Agent, in form and substance satisfactory to
the Administrative Agent.
(xx) Certified copies of each of the Related Documents
(other than the Office Lease), duly executed by the parties thereto
and in form and substance satisfactory to the Lender Parties,
together with all agreements, instruments and other documents
delivered in connection therewith as the Administrative Agent shall
request.
(l) The Administrative Agent shall have received executed and
recordable Deeds with respect to all real property listed on Schedule
3.01(l), together with all (1) transfer tax or similar returns or filings
required to be filed in connection with the recording of the Deeds,
appropriately completed and executed and (2) an amount sufficient to pay all
transfer taxes, stamp taxes, or similar taxes and all documentary, filing and
recording fees, charges, and expenses.
(m) The Administrative Agent shall have received executed and
recordable UCC Fixture Filings in form and substance satisfactory to the
Lender Parties sufficient to grant to the Administrative Agent a first
priority security interest in all fixtures attached to all real property
listed on Schedule 3.01(m).
56
(n) The Borrower and Captain D's Properties shall have entered into
that certain Master Lease in respect of all real property owned by Captain
D's Properties or to be conveyed to Captain D's Properties in connection with
the Transaction, in the form attached hereto as Exhibit N.
(o) Shoney's and/or its Subsidiaries shall have obtained the Real
Estate Financing on terms and conditions satisfactory to the Administrative
Agent.
(p) The Commissary shall have obtained the Commissary Financing on
terms and conditions satisfactory to the Administrative Agent.
(q) Shoney's shall have entered into the Amended and Restated Senior
Credit Agreement on terms and conditions satisfactory to the Administrative
Agent or the Senior Credit Facility shall have been terminated and all
amounts due thereunder shall have been paid in full.
(r) The Lender Parties shall be satisfied that, after giving effect
to the Transaction, the pro forma Adjusted EBITDA of the Borrower and its
Subsidiaries for the fiscal year ended October 31, 1999 is at least $39
million.
(s) The Swing Line Bank shall have received the Cash Management
Documentation in form and substance reasonably satisfactory to the Swing Line
Bank.
(t) The Borrower shall have been deeded all equipment and fixtures
related to the Borrower's operations.
SECTION 3.02. Conditions Precedent to Each Borrowing and Issuance.
The obligation of each Appropriate Lender to make an Advance (other than a
Letter of Credit Advance made by the Issuing Bank or a Working Capital Lender
pursuant to Section 2.03(c) and a Working Capital Advance made by a Working
Capital Lender pursuant to Section 2.02(b)) on the occasion of each Borrowing
(including the Initial Extension of Credit), and the obligation of the
Issuing Bank to issue a Letter of Credit (including the initial issuance) or
renew a Letter of Credit and the right of the Borrower to request the
issuance or a renewal of a Letter of Credit, shall be subject to the further
conditions precedent that on the date of such Borrowing or issuance or
renewal (a) the following statements shall be true (and each of the giving of
the applicable Notice of Borrowing, Notice of Issuance or Notice of Renewal
and the acceptance by the Borrower of the proceeds of such Borrowing or of
such Letter of Credit or the renewal of such Letter of Credit shall
constitute a representation and warranty by the Borrower that both on the
date of such notice and on the date of such Borrowing or issuance or renewal
such statements are true):
(i) the representations and warranties contained in each
Loan Document are correct in all material respects on and as of such
date, before and after giving effect to such Borrowing or issuance
or renewal and to the application of the proceeds therefrom, as
though made on and as of such date, other than any such
representations or warranties that, by their terms, refer to a
specific date other than the date of such Borrowing or issuance or
renewal, in which case as of such specific date; and
57
(ii) no event has occurred and is continuing, or would
result from such Borrowing or issuance or renewal or from the
application of the proceeds therefrom, that constitutes a Default;
and (b) the Administrative Agent shall have received such other approvals,
opinions or documents as any Appropriate Lender through the Administrative
Agent may reasonably request.
SECTION 3.03. Determinations Under Section 3.01. For purposes of
determining compliance with the conditions specified in Section 3.01, each
Lender Party shall be deemed to have consented to, approved or accepted or to
be satisfied with each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to the Lender
Parties unless an officer of the Administrative Agent responsible for the
transactions contemplated by the Loan Documents shall have received notice
from such Lender Party prior to the Initial Extension of Credit specifying
its objection thereto and if the Initial Extension of Credit consists of a
Borrowing, such Lender Party shall not have made available to the
Administrative Agent such Lender Party's ratable portion of such Borrowing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower. The
Borrower represents and warrants as follows:
(a) Each Loan Party (i) is a corporation or limited liability
company, as applicable, duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or formation, as
applicable, (ii) is duly qualified and in good standing as a foreign
corporation or limited liability company, as applicable, in each other
jurisdiction in which it owns or leases property or in which the conduct of
its business requires it to so qualify or be licensed except where the
failure to so qualify or be licensed is not reasonably likely to have a
Material Adverse Effect and (iii) has all requisite corporate power and
authority (including, without limitation, all governmental licenses, permits
and other approvals) to own or lease and operate its properties and to carry
on its business as now conducted and as proposed to be conducted. All of the
outstanding Equity Interests in the Borrower have been validly issued, are
fully paid and non-assessable and are owned by the Persons and in the amounts
set forth on Schedule 4.01(b) hereto free and clear of all Liens, except
those permitted by or created under the Loan Documents.
(b) Set forth on Schedule 4.01(b) hereto is a complete and accurate
list of all Subsidiaries of each Loan Party, showing as of the date hereof
(as to each such Subsidiary) the jurisdiction of its incorporation or
formation, as applicable, the number of shares of each class of its Equity
Interests authorized, and the number outstanding, on the date hereof and the
percentage of each such class of its Equity Interests owned (directly or
indirectly) by such Loan Party and the number of shares covered by all
outstanding options, warrants, rights of conversion or purchase and similar
rights at the date hereof. All of the outstanding Equity Interests in each
Loan Party's Subsidiaries have been validly issued, are fully paid and non-
assessable and are
58
owned by such Loan Party or one or more of its Subsidiaries free and clear of
all Liens, except those permitted by or created under the Loan Documents.
(c) The execution, delivery and performance by each Loan Party of
this Agreement, the Notes, each other Loan Document and each Related
Document, to which it is or is to be a party, and the consummation of the
Transaction and the other transactions contemplated hereby, are within such
Loan Party's corporate powers, have been duly authorized by all necessary
corporate action, and do not (i) contravene such Loan Party's charter,
bylaws, certificate of formation or operating agreement, as applicable, (ii)
violate any law (including, without limitation, the Securities Exchange Act
of 1934 and the Racketeer Influenced and Corrupt Organizations Chapter of the
Organized Crime Control Act of 1970), rule, regulation (including, without
limitation, Regulation X of the Board of Governors of the Federal Reserve
System), order, writ, judgment, injunction, decree, determination or award
imposed upon or applicable to such Loan Party, (iii) conflict with or result
in the breach of, or constitute a default under, any contract, loan
agreement, indenture, mortgage, deed of trust, lease or other instrument
binding on or affecting any Loan Party, any of its Subsidiaries or any of
their properties (except for (x) any conflict, breach or default which would
not reasonably be expected to have a Material Adverse Effect and (y) certain
leases set forth on Schedule 3.01(g) for which third party consents or
approvals for assignment have not been obtained) or (iv) except for the Liens
created under the Loan Documents, result in or require the creation or
imposition of any Lien upon or with respect to any of the properties of any
Loan Party or any of its Subsidiaries. No Loan Party or any of its
Subsidiaries is in violation of any such law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award or in breach of any such
contract, loan agreement, indenture, mortgage, deed of trust, lease or other
instrument, the violation or breach of which is reasonably likely, either
individually or in the aggregate, to have a Material Adverse Effect.
(d) No authorization or approval or other action by, and no notice
to or filing with, any governmental authority or regulatory body or any other
third party is required for (i) the due execution, delivery, recordation,
filing or performance by any Loan Party of this Agreement, the Notes or any
other Transaction Document to which it is or is to be a party, or for the
consummation of the Transaction or the other transactions contemplated
hereby, (ii) the grant by any Loan Party of the Liens granted by it pursuant
to the Collateral Documents, (iii) the perfection or maintenance of the Liens
created by the Collateral Documents (including the first priority nature
thereof) or (iv) the exercise by the Administrative Agent or any Lender Party
of its rights under the Loan Documents or the Related Documents or the
remedies in respect of the Collateral pursuant to the Collateral Documents,
except for (A) authorizations, approvals, actions, notices and filings which
have been duly obtained, taken, given or made and are in full force and
effect and (B) the filing and recording of certain of the Collateral
Documents as described herein.
(e) This Agreement has been, and each of the Notes and each other
Transaction Document when delivered hereunder will have been, duly executed
and delivered by each Loan Party party thereto. This Agreement is, and each
of the Notes and each other Transaction Document, when delivered hereunder
will be, the legal, valid and binding obligation of each Loan Party party
thereto, enforceable against such Loan Party in accordance with its terms
subject, as to enforcement only, to bankruptcy, insolvency, reorganization,
moratoriums or similar laws at the time in effect affecting the
enforceability of the rights of creditors generally.
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(f) The Consolidated balance sheet of the Borrower and its
Subsidiaries as at October 31, 1999, and the related Consolidated statement
of income and Consolidated statement of cash flows of the Borrower and its
Subsidiaries for the fiscal year then ended, accompanied by an opinion of
Ernst & Young, independent public accountants, and the Consolidated balance
sheet of the Borrower and its Subsidiaries as of May 14, 2000, and the
related Consolidated statement of income and Consolidated statement of cash
flows of the Borrower and its Subsidiaries for the 28 weeks then ended, duly
certified by the chief financial officer or the principal financial officer
of the Borrower, copies of which have been furnished to the Administrative
Agent, fairly present, subject, in the case of said balance sheet as of May
14, 2000, and said statements of income and cash flows for the 28 weeks then
ended, to year-end audit adjustments, the Consolidated financial condition of
the Borrower and its Subsidiaries as at such dates and the Consolidated
results of operations of the Borrower and its Subsidiaries for the periods
ended on such dates, all in accordance with generally accepted accounting
principles applied on a consistent basis, and since October 31, 1999, there
has been no Material Adverse Change.
(g) The Consolidated forecasted balance sheets, income statements and
cash flows statements of the Borrower and its Subsidiaries delivered to the
Lender Parties pursuant to Section 3.01(k)(xiii) or 5.03(e) were prepared in
good faith on the basis of the assumptions stated therein, which assumptions
were reasonable in the light of conditions existing at the time of delivery
of such forecasts, and represented, at the time of delivery, the Borrower's
reasonable best estimate of its expected future financial performance based
upon the assumptions set forth in such forecast.
(h) Except as modified or supplemented in this Agreement or the other
Loan Documents, neither the Information Memorandum nor any other information,
exhibit or report furnished by any Loan Party to the Administrative Agent or
any Lender Party in connection with the negotiation of the Transaction
Documents or pursuant to the terms of the Transaction Documents contained any
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements made therein not misleading.
(i) There is no action, suit, investigation, litigation or proceeding
affecting any Loan Party or any of its Subsidiaries, including any
Environmental Action, pending or threatened before any court, governmental
agency or arbitrator that (i) would be reasonably likely to have a Material
Adverse Effect (other than the Disclosed Litigation) or (ii) purports to
affect the legality, validity or enforceability of this Agreement, any Note,
any other Transaction Document or the consummation of the Transaction or the
other transactions contemplated hereby, and there has been no adverse change
in the status, or financial effect on any Loan Party or any of its
Subsidiaries, of the Disclosed Litigation from that described on Schedule
3.01(e).
(j) Except for the repurchase of the XXXXX and the Debentures, no
proceeds of any Advance or drawings under any Letter of Credit will be used
to acquire any equity security of a class that is registered pursuant to
Section 12 of the Securities Exchange Act of 1934.
(k) The Borrower is not engaged in the business of extending credit
for the purpose of purchasing or carrying Margin Stock, and no proceeds of
any Advance or drawings
60
under any Letter of Credit will be used to purchase or carry any Margin Stock
or to extend credit to others for the purpose of purchasing or carrying any
Margin Stock.
(l) Following application of the proceeds of each Advance or drawing
under each Letter of Credit, not more than 25 percent of the value of the
assets (either of the Borrower only or of the Borrower and its Subsidiaries
on a Consolidated basis) subject to the provisions of Section 5.02(a) or
5.02(e) or subject to any restriction contained in any agreement or
instrument between the Borrower and any Lender Party or any Affiliate of any
Lender Party relating to Debt and within the scope of Section 6.01(e) will be
Margin Stock.
(m) Set forth on Schedule 4.01(m) hereto is a complete and accurate
list of all Plans, Multiemployer Plans and Welfare Plans.
(n) No ERISA Event has occurred or is reasonably expected to occur
with respect to any Plan that has resulted in or is reasonably expected to
result in a material liability of any Loan Party or any ERISA Affiliate.
(o) As of the last annual actuarial valuation date, the funded
current liability percentage, as defined in Section 302(d)(8) of ERISA, of
each Plan exceeds 90% and there has been no material adverse change in the
funding status of any such Plan since such date.
(p) Schedule B (Actuarial Information), if applicable, to the most
recent annual report (Form 5500 Series) for each Plan, copies of which have
been filed with the Internal Revenue Service, is complete and accurate and
fairly presents the funding status of such Plan, and since the date of such
Schedule B there has been no material adverse change in such funding status.
(q) Neither any Loan Party nor any ERISA Affiliate has incurred or
is reasonably expected to incur any Withdrawal Liability to any Multiemployer
Plan.
(r) Neither any Loan Party nor any ERISA Affiliate has been notified
by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or has been terminated, within the meaning of Title IV of
ERISA, and no such Multiemployer Plan is reasonably expected to be in
reorganization or to be terminated, within the meaning of Title IV of ERISA.
(s) Except as set forth in the financial statements referred to in
this Section 4.01 and in Section 5.03, the Loan Parties and their respective
Subsidiaries have no material liability with respect to "expected post
retirement benefit obligations" within the meaning of Statement of Financial
Accounting Standards No. 106.
(t) Neither the business nor the properties of any Loan Party or any
of its Subsidiaries are affected by any fire, explosion, accident, strike,
lockout or other labor dispute, drought, storm, hail, earthquake, embargo,
act of God or of the public enemy or other casualty (whether or not covered
by insurance) that would be reasonably likely to have a Material Adverse
Effect.
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(u) The operations and properties of each Loan Party and each of its
Subsidiaries comply in all material respects with all applicable
Environmental Laws and Environmental Permits, all past non-compliance with
such Environmental Laws and Environmental Permits has been resolved without
material ongoing obligations or costs, and no circumstances exist that would
be reasonably likely to (i) form the basis of an Environmental Action against
any Loan Party or any of its Subsidiaries or any of their properties that
could have a Material Adverse Effect or (ii) cause any such property to be
subject to any material restrictions on ownership, occupancy, use or
transferability under any Environmental Law.
(v) None of the properties currently or, to the knowledge of the Loan
Parties and their Subsidiaries, formerly, owned or operated by any Loan Party
or any of its Subsidiaries is listed or proposed for listing on the NPL or on
the CERCLIS or any analogous foreign, state or local list or, to the
knowledge of the Loan Parties and their Subsidiaries, is adjacent to any such
property, except for the properties that are listed on Schedule 4.01(v);
there are no and, to the knowledge of the Loan Parties and their
Subsidiaries, never have been, any underground or aboveground storage tanks
or any surface impoundments, septic tanks, pits, sumps or lagoons in which
Hazardous Materials are being or have been treated, stored or disposed on any
property currently or, to the knowledge of the Loan Parties and their
Subsidiaries, formerly, owned or operated by any Loan Party or any of its
Subsidiaries, in each case, the presence of which would be reasonably
expected to have a Material Adverse Effect; there is no asbestos or asbestos-
containing material on any property currently owned or operated by any Loan
Party or any of its Subsidiaries in a form or condition which violates, or
gives rise to liability under, Environmental Laws; and Hazardous Materials
have not been released, discharged or disposed of on any property currently
or, to the knowledge of the Loan Parties and their Subsidiaries, formerly,
owned or operated by any Loan Party or any of its Subsidiaries, in each case,
the release, discharge or disposal of which would be reasonably expected to
have a Material Adverse Effect.
(w) Except for monitoring xxxxx, neither any Loan Party nor any of
its Subsidiaries is undertaking, and has not completed, either individually
or together with other potentially responsible parties, any investigation or
assessment or remedial or response action relating to any actual or
threatened release, discharge or disposal of Hazardous Materials at any site,
location or operation, either voluntarily or pursuant to the order of any
governmental or regulatory authority or the requirements of any Environmental
Law; and all Hazardous Materials generated, used, treated, handled or stored
at, or transported to or from, any property currently or, to the knowledge of
the Loan Parties and their Subsidiaries, formerly, owned or operated by any
Loan Party or any of its Subsidiaries have been disposed of in a manner not
reasonably expected to have a Material Adverse Effect.
(x) Neither any Loan Party nor any of its Subsidiaries is a party to
any indenture, loan or credit agreement or any lease or subject to any
charter or corporate restriction that would be reasonably likely to have a
Material Adverse Effect.
(y) The provisions of the Collateral Documents executed by the Loan
Parties are effective to create, in favor of the Lenders, legal, valid and
enforceable security interests in all right, title and interest of the Loan
Parties in any and all of the collateral described therein, securing the
Notes and all other Obligations from time to time outstanding under the Loan
Documents, and each of such Collateral Documents, upon the due filing of UCC-
1 Financing
62
Statements and Mortgages, the taking of possession of the Security Collateral
as provided in the Security Agreement and the Pledge Agreement and the due
filing of the Intellectual Property Security Agreement with the United States
Patent and Trademark Office and the United States Copyright Office, shall
create a fully perfected security interest in all right, title and interest
of the Loan Parties in such collateral, superior in right to any liens,
existing or future, which the Loan Parties or any creditors of or purchasers
from, or any other Person, may have against such collateral or interests
therein, except to the extent, if any, otherwise provided herein. Upon the
due filing of UCC-1 Financing Statements and Mortgages and the due filing of
the Intellectual Property Security Agreement with the United States Patent
and Trademark Office and the United States Copyright Office, all filings and
other actions necessary or desirable to perfect and protect such security
interests will have been duly taken. The Loan Parties are the legal and
beneficial owners of the Collateral free and clear of any Lien, except for
the liens and security interests created or permitted under the Loan
Documents.
(z) Each Loan Party and each of its Subsidiaries and Affiliates has
filed, has caused to be filed or has been included in all tax returns
(Federal, state, local and foreign) required to be filed and has paid all
taxes shown thereon to be due, together with applicable interest and
penalties except any such taxes or charges which are being contested in good
faith by appropriate proceedings and for which adequate reserves are being
maintained.
(aa) Set forth on Schedule 4.01(aa) hereto is a complete and accurate
list, as of the date hereof, of each taxable year of each Loan Party and each
of its Subsidiaries and Affiliates for which Federal income tax returns have
been filed and for which the expiration of the applicable statute of
limitations for assessment or collection has not occurred by reason of
extension or otherwise (an "Open Year").
(bb) There are no adjustments to the Federal income tax liability of
each Loan Party and each of its Subsidiaries and Affiliates proposed by the
Internal Revenue Service with respect to Open Years. No issues have been
raised by the Internal Revenue Service in respect of Open Years that, in the
aggregate, would be reasonably likely to have a Material Adverse Effect.
(cc) The aggregate unpaid amount, as of the date hereof, of
adjustments to the state, local and foreign tax liability of each Loan Party
and its Subsidiaries and Affiliates proposed by all state, local and foreign
taxing authorities (other than amounts arising from adjustments to Federal
income tax returns) does not exceed $250,000. No issues have been raised by
such taxing authorities that, in the aggregate, would be reasonably likely to
have a Material Adverse Effect.
(dd) No "ownership change" as defined in Section 382(g) of the
Internal Revenue Code, and no event that would result in the application of
the "separate return limitation year" or "consolidated return change of
ownership" limitations under the Federal income tax consolidated return
regulations, has occurred with respect to the Borrower since October 31,
1999.
(ee) Neither any Loan Party nor any of its Subsidiaries is an
"investment company," or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an
63
"investment company," as such terms are defined in the Investment Company Act
of 1940, as amended.
(ff) The Borrower and each of its Subsidiaries is, individually and
together with its Subsidiaries, Solvent.
(gg) Set forth on Schedule 4.01(gg) hereto is a complete and accurate
list of all Debt of the Borrower and its Subsidiaries (other than Debt of a
Loan Party to another Loan Party) existing as of the date hereof (the
"Existing Debt"), showing as of the date hereof the principal amount
outstanding thereunder.
(hh) Set forth on Schedule 4.01(hh) hereto is a complete and accurate
list of all Debt of the Borrower and its Subsidiaries (other than Debt of a
Loan Party to another Loan Party) which will remain outstanding after
application of the proceeds from the Initial Borrowing (the "Surviving
Debt"), showing as of the date hereof the principal amount outstanding
thereunder, the maturity date thereof and the amortization schedule therefor.
(ii) Set forth on Schedule 4.01(ii) hereto is a complete and accurate
list of all real property owned by any Loan Party or any of its Subsidiaries,
showing as of the date hereof the street address, state, record owner and, if
appraised by Xxxxxxxx & Xxxxxxx, the appraised value thereof. Each Loan
Party or such Subsidiary has good, marketable and insurable fee simple title
to the real property identified as being owned by it on Schedule 4.01(ii),
free and clear of all Liens, other than Liens created or permitted by the
Loan Documents. Except for limitations, restrictions, easements, burdens,
rights or other encumbrances on properties with an aggregate value not in
excess of $5,000,000, no real property owned by any Loan Party is subject to
any (A) purchase option, reverter or other limitation, restriction, interest,
burden, right or other encumbrance by which such real property or any portion
thereof may be required to be forfeited, defeased, surrendered or conveyed or
(B) any other limitation, restriction, easement, burden, right or other
encumbrance, in either case which would or may materially adversely affect
the ability of the Loan Party which currently owns (or which, upon
consummation of the conveyances, by merger or otherwise, herein contemplated,
will own) such real property to continue to use such real property as used on
the date hereof. No Loan Party is aware of any action to enforce any
limitation, restriction, easement, burden, right or other encumbrance
pertaining to real property owned or to be owned by such Loan Party which
would or may materially adversely affect the ability of the Loan Party which
currently owns (or which, upon consummation of the conveyances, by merger or
otherwise, herein contemplated, will own) such real property to continue to
use such real property as used on the date hereof.
(jj) Set forth on Schedule 4.01(jj) hereto is a complete and accurate
list of all leases of real property (other than office leases and storage
facility leases) to which any Loan Party or any of its Subsidiaries is the
lessee, showing as of the date hereof the address, lessee and annual rental
cost thereof.
(kk) Set forth on Schedule 4.01(kk) hereto is a complete and accurate
list of all Investments held by any Loan Party or any of its Subsidiaries,
showing as of the date hereof the amount, obligor or issuer and maturity, if
any, thereof.
64
(ll) Schedules II and III, collectively, to the Intellectual Property
Security Agreement contain a complete and accurate list of all patents,
trademarks, trade names, service marks and copyrights, and all applications
therefor and licenses thereof (other than to franchisees), of each Loan Party
or any of its Subsidiaries, showing as of the date hereof (i) in the case of
registrations therefor, the jurisdiction in which registered, the
registration number, the date of registration and the expiration date and
(ii) in the case of pending applications therefor, the jurisdiction in which
filed, the application number and the date of filing.
(mm) There are no more than eight real properties for which the
Borrower is required to deliver environmental database searches and ASTM
Environmental Site Assessment Transaction Screen Questionnaires pursuant to
Section 5.01(x)(ii).
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any Advance shall
remain unpaid, any Letter of Credit shall be outstanding or any Lender Party
shall have any Commitment hereunder, the Borrower will:
(a) Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, in all material respects, with all applicable laws,
rules, regulations and orders, such compliance to include, without
limitation, compliance with ERISA and the Racketeer Influenced and Corrupt
Organizations Chapter of the Organized Crime Control Act of 1970.
(b) Payment of Taxes, Etc. Pay and discharge, and cause each of its
Subsidiaries to pay and discharge, before the same shall become delinquent,
(i) all taxes, assessments and governmental charges or levies imposed upon it
or upon its property and (ii) all lawful claims that, if unpaid, might by law
become a Lien upon its property; provided, however, that neither the Borrower
nor any of its Subsidiaries shall be required to pay or discharge any such
tax, assessment, charge or claim that is being contested in good faith and by
proper proceedings and as to which appropriate reserves are being maintained,
unless and until any Lien resulting therefrom attaches to its property and
becomes enforceable against its other creditors.
(c) Compliance with Environmental Laws. Comply, and cause each of
its Subsidiaries and all lessees and other Persons operating or occupying its
properties to comply with all applicable Environmental Laws and Environmental
Permits except in the cases where the failure to so comply is not reasonably
likely to have a Material Adverse Effect; obtain and renew and cause each of
its Subsidiaries to obtain and renew all Environmental Permits necessary for
its operations and properties; and conduct, and cause each of its
Subsidiaries to conduct, any investigation, study, sampling and testing, and
undertake any cleanup, removal, remedial or other action necessary to remove
and clean up all Hazardous Materials from any of its properties, in
accordance with the requirements of all Environmental Laws; provided,
however, that neither the Borrower nor any of its Subsidiaries shall be
required to undertake any such cleanup, removal, remedial or other action to
the extent that its obligation to do so is being
65
contested in good faith and by proper proceedings and appropriate reserves
are being maintained with respect to such circumstances.
(d) Maintenance of Insurance. (i) Maintain, and cause each of its
Subsidiaries to maintain (A) casualty insurance insuring all buildings,
structures and improvements owned or leased by the Borrower or any Subsidiary
(including, without limitation, all Improvements (as defined under each
Mortgage) now or hereafter constituting a part of the Mortgaged Property (as
defined under each Mortgage)) against damage by fire and the other hazards
covered by a standard all-risk, extended coverage insurance policy for the
full insurable value thereof (which, unless the Administrative Agent shall
otherwise agree in writing, shall mean the full repair and replacement value
thereof without reduction for depreciation or co-insurance), (B) business
interruption or rental insurance in an amount adequate to cover continuing
expenses during any period of repairs or restoration which amount shall at
least be equal to twelve month's anticipated gross income from each of such
premises, and (C) Commercial General Liability Insurance in respect of the
operation of all such properties as may from time to time be specified by the
Administrative Agent, but in no event less than $1,000,000 combined single
limit and $25,000,000 umbrella or excess coverage. In addition, the
Administrative Agent may require the Borrower and each of its Subsidiaries to
carry such other insurance on such properties in such amounts as may from
time to time reasonably be required by institutional lenders, against
insurable casualties including, without limitation, the following types of
insurance: flood (including surface waters) if any such property is located
in an area identified by the Secretary of Housing and Urban Development or
any other official having jurisdiction as having special flood hazards and in
which flood insurance has been made available under the National Flood
Insurance Act of 1968 and the Flood Disaster Protection Act of 1973 (as the
foregoing may be modified or amended and any successor acts thereto), in an
amount at least equal to the full repair and replacement value of such
property or the maximum limit of coverage available under said Act in respect
thereof, whichever is less; automobile; Builder's Risk; sinkhole; earthquake;
boiler and machinery; all in amounts adequate to cover repair and replacement
expenses; and contingent liability in connection with any loss arising from
the fact that any improvement is deemed to be non-conforming property, which
at the time are commonly insured against in the case of mortgaged property
similarly situated, due regard being given to the site and the type of the
building, and the construction, location, utilities and occupancy or any
replacements or substitutions therefor.
(ii) All liability insurance policies required pursuant to
clause (i) of this Section 5.01(d) in respect of any Mortgaged
Property (as defined in the Mortgages) shall name the Administrative
Agent as an additional insured thereunder, and all other insurance
policies in respect of any property encumbered by a Mortgage, to the
extent reasonably possible, or otherwise maintained by the Borrower
and/or any of its Subsidiaries shall name the Administrative Agent
as the mortgagee under New York long form non-contributory
endorsements. All insurance policies and endorsements required to
be maintained under this Section 5.01(d) shall be fully paid or paid
pursuant to an installment program offered to the Borrower and/or any
of its Subsidiaries by the insurer or its broker/agent, provided that
the installments are paid on or before the due date thereof so that
all required insurance coverage is maintained without interruption.
All such insurance policies required to be maintained by the Borrower
and/or any of its Subsidiaries shall contain such provisions and
expiration dates, and be in such form and
66
issued by such insurance companies qualified and licensed to do
business in the jurisdiction in which its insurable property is
located, as may be reasonably acceptable to the Administrative Agent.
All insurance companies issuing insurance required pursuant to clause
(i) of this Section 5.01(d) for property on behalf of the Borrower
and/or any of its Subsidiaries shall have a Best Insurance Guide
Rating of A-/XIII or better. Any coverage required to be maintained
pursuant to clause (i) of this Section may be maintained under a
blanket insurance policy provided such policy otherwise satisfies the
requirements of this Section. Each such policy required to be
maintained by the Borrower and/or any of its Subsidiaries shall
provide that such policy may not be cancelled or materially changed
except upon not less than thirty (30) days' prior written notice to
the Administrative Agent of the intention of non-renewal,
cancellation or material change and that no act or thing done by the
Borrower and/or any of its Subsidiaries shall invalidate the policy
as against the Administrative Agent. In the event the Borrower
and/or any of its Subsidiaries fails to maintain insurance in
compliance with clause (i) of this Section 5.01(d) or, in the event
that a notice of non-renewal, cancellation or material change is
given to the Administrative Agent, as aforesaid, and within ten (10)
days after the delivery of such notice the Borrower and/or its
applicable Subsidiary shall fail to deliver to the Administrative
Agent evidence of the purchase of a substitute policy of insurance
or a renewal of the existing policy of insurance, the Administrative
Agent may, after ten (10) days' notice to the Borrower and/or its
applicable Subsidiary (or, if the policy in question shall sooner
expire or be terminated, on or after the day before the date of such
expiration or termination) but shall not be obligated to, obtain such
insurance and pay the premium therefor and the Borrower and/or its
applicable Subsidiary shall, on demand, reimburse the Administrative
Agent for all sums, advances and reasonable expenses incurred in
connection therewith, together with interest thereon at the rate of
interest applicable under Section 2.07(b) for Prime Rate Advances
upon the occurrence of an Event of Default from the date such amounts
are advanced until the same are paid to the Administrative Agent.
(iii) Neither the Borrower nor any of its Subsidiaries shall
carry separate or additional insurance concurrent in form or
contributing, in the event of loss, with that required by clause (i)
of this Section 5.01(d) hereunder unless endorsed in favor of the
Administrative Agent as additional insured or mortgagee, as
applicable, and otherwise acceptable to the Administrative Agent in
all respects.
(iv) In the event of foreclosure of any Mortgage or other
transfer of title or assignment of the premises encumbered thereby
in extinguishment, in whole or in part, of the Obligations secured
thereby, all right, title and interest of the Borrower and any of its
Subsidiaries in and to all policies of insurance required under
clause (i) of this Section 5.01(d) or otherwise then in force with
respect to such premises and all proceeds payable thereunder and
unearned premiums thereon shall immediately vest in the purchaser or
other transferee of such premises.
(v) The Borrower covenants that it has delivered to the
Administrative Agent, and shall, from time to time as may be
requested by the Administrative Agent, deliver to the Administrative
Agent, the policies of insurance (or, if such policies are not yet
available, unconditional binders to issue the same), or certificates
thereof, that may be
67
requested by the Administrative Agent to confirm that the insurance
required under the terms of the Loan Documents is in place and in
full force and effect.
(vi) The Borrower shall, at its own expense, maintain and
cause each of its Subsidiaries, at their own expense, to maintain,
insurance with respect to the Equipment pledged by the Borrower and
each such Subsidiary under the Security Agreement in such amounts,
against such risks, in such form and with such insurers, as shall be
satisfactory to the Administrative Agent from time to time. Each
policy for liability insurance shall provide for all losses to be
paid on behalf of the Administrative Agent and the Borrower or the
Subsidiary of the Borrower pledging such Equipment, as applicable,
as their interests may appear, and each policy for property damage
insurance shall provide for all losses (except for losses of less
than $200,000 per occurrence) to be paid directly to the
Administrative Agent. Each such policy shall in addition (i) name
the Borrower or its Subsidiary that owns the Equipment covered
thereunder and the Administrative Agent as insured parties thereunder
(without any representation or warranty by or obligation upon the
Administrative Agent) as their interests may appear, (ii) contain the
agreement by the insurer that any loss thereunder shall be payable
to the Administrative Agent notwithstanding any action, inaction or
breach of representation or warranty by the Borrower or such
Subsidiary of the Borrower, as applicable, (iii) provide that there
shall be no recourse against the Administrative Agent for payment of
premiums or other amounts with respect thereto and (iv) provide that
at least 10 days' prior written notice of cancellation or of lapse
shall be given to the Administrative Agent by the insurer. The
Borrower shall and shall cause each of its Subsidiaries, if so
requested by the Administrative Agent, to deliver to the
Administrative Agent original or duplicate policies of such insurance
and, as often as the Administrative Agent may reasonably request, a
report of a reputable insurance broker with respect to such
insurance. Further, at the request of the Administrative Agent, the
Borrower shall, and shall cause each of its Subsidiaries to duly
exercise and deliver instruments of assignment of such insurance
policies to comply with the requirements of Section 9 of the Security
Agreement and cause the insurers to acknowledge notice of such
assignment.
(vii) Reimbursement under any liability insurance maintained
by the Borrower or any of its Subsidiaries pursuant to clause (vi)
of this Section 5.01(d) may be paid directly to the Person who shall
have incurred liability covered by such insurance. In case of any
loss involving damage to Equipment when clause (viii) of this Section
5.01(d) is not applicable, the Borrower shall, and shall cause each
of its Subsidiaries to make or cause to be made the necessary repairs
to or replacements of the Equipment that it owns, and any proceeds
of insurance maintained by the Borrower or such Subsidiary of the
Borrower, as applicable, pursuant to clause (vi) of this Section
5.01(d) shall be paid to the Borrower or such Subsidiary of the
Borrower, as applicable, as reimbursement for the costs of such
repairs or replacements.
(viii) Upon the occurrence and during the continuance of any
Event of Default or the actual or constructive total loss (in excess
of $200,000 per occurrence) of any Equipment pledged by the Borrower
or such Subsidiary of the Borrower, as applicable, under the Security
Agreement, all insurance payments in respect of such
68
Equipment shall be paid to and applied by the Administrative Agent
as specified in Section 20(b) of the Security Agreement.
(e) Preservation of Corporate Existence, Etc. Preserve and maintain,
and cause each of its Subsidiaries to preserve and maintain, its existence,
legal structure, legal name, rights (charter and statutory), permits,
licenses, approvals, privileges and franchises; provided, however, that the
Borrower and its Subsidiaries may consummate (i) the Restructuring on terms
satisfactory to the Lender Parties and (ii) any merger or consolidation
permitted under Section 5.02(d); provided further, that neither the Borrower
nor any of its Subsidiaries shall be required to preserve any right, permit,
license, approval, privilege or franchise if the board of directors of the
Borrower or such Subsidiary or equivalent governing body shall determine that
the preservation thereof is no longer desirable in the conduct of the
business of the Borrower or such Subsidiary, as the case may be, and that the
loss thereof does not have a Material Adverse Effect.
(f) Visitation Rights. At any reasonable time and from time to time,
permit the Administrative Agent or any of the Lender Parties or any agents or
representatives thereof, to examine and make copies of and abstracts from the
records and books of account of, and visit the properties of, the Borrower
and any of its Subsidiaries, and to discuss the affairs, finances and
accounts of the Borrower and any of its Subsidiaries with any of their
officers and in the presence of the Borrower or its Subsidiaries, with their
independent certified public accountants; provided, however, that any such
visitation by any Lender Party or any agent or representative thereof shall
be done in coordination with the Administrative Agent.
(g) Preparation of Environmental Reports. Upon the occurrence and
during the continuance of an Event of Default or upon the occurrence of an
event which gives the Lender Parties a reasonable basis for concern as to
environmental matters, then at the request of the Administrative Agent from
time to time, provide to the Lender Parties within 60 days after such
request, at the expense of the Borrower, an environmental site assessment
report for any of its or its Subsidiaries properties described in such
request, prepared by an environmental consulting firm acceptable to the
Administrative Agent, indicating the presence or absence of Hazardous
Materials and the estimated cost of any compliance, removal or remedial
action in connection with any Hazardous Materials on such properties; without
limiting the generality of the foregoing, if the Administrative Agent
determines at any time that a material risk exists that any such report will
not be provided within the time referred to above, the Administrative Agent
may retain an environmental consulting firm to prepare such report at the
expense of the Borrower, and the Borrower hereby grants and agrees to cause
any Subsidiary that owns any property described in such request to grant at
the time of such request, to the Administrative Agent, the Lender Parties,
such firm and any agents or representatives thereof an irrevocable non-
exclusive license, subject to the rights of tenants, to enter onto their
respective properties to undertake such an assessment.
(h) Keeping of Books. Keep, and cause each of its Subsidiaries to
keep, proper books of record and account, in which full and correct entries
shall be made of all financial transactions and the assets and business of
the Borrower and each such Subsidiary in accordance with generally accepted
accounting principles in effect from time to time.
69
(i) Maintenance of Properties, Etc. Maintain and preserve, and cause
each of its Subsidiaries to maintain and preserve, all of its properties that
are used or useful in the conduct of its business in good working order and
condition, ordinary wear and tear excepted and except for such failure to so
maintain which would not reasonably be expected to have a Material Adverse
Effect.
(j) Compliance with Terms of Leaseholds. Make all payments and
otherwise perform all obligations in respect of all leases of real property
to which the Borrower or any of its Subsidiaries is a party, keep such leases
in full force and effect and not allow such leases to lapse or be terminated
or any rights to renew such leases to be forfeited or cancelled, notify the
Administrative Agent of any default by any party with respect to such leases
and cooperate with the Administrative Agent in all respects to cure any such
default, and cause each of its Subsidiaries to do so except, in any case,
where the failure to do so, either individually or in the aggregate, would
not be reasonably likely to have a Material Adverse Effect.
(k) Transactions with Affiliates. Conduct, and cause each of its
Subsidiaries to conduct, all transactions otherwise permitted under the Loan
Documents with any of their Affiliates on terms that are fair and reasonable
and no less favorable to the Borrower or such Subsidiary than it would obtain
in a comparable arm's-length transaction with a Person not an Affiliate;
provided, however, that nothing in this Section 5.01(k) shall prevent (i) the
transfer of assets from (x) Shoney's or its Subsidiaries or Affiliates to the
Borrower or any of its Subsidiaries or (y) the Borrower or Captain D's
Properties to Shoney's or any of its Subsidiaries or Affiliates so long as
such assets are not used in the operation of the Borrower's business, in each
case on terms and conditions consistent with those described in the
Information Memorandum and otherwise satisfactory to the Lender Parties in
connection with the Transaction, (ii) the assignment of existing Hedge
Agreements from Shoney's to the Borrower, (iii) the issuance of preferred
stock and/or subordinated debt (in an aggregate amount not to exceed $5
million) issued to an Affiliate to finance research and development
expenditures of the Borrower; provided no Default or Event of Default exists
immediately before or after giving effect to such transaction, and (iv) the
transfer of fixtures from Shoney's and/or its Subsidiaries to the Borrower.
(l) Covenant to Give Security. Upon the request of the
Administrative Agent following the occurrence and during the continuance of
an Event of Default, and at the expense of the Borrower, (i) within 10 days
after such request, furnish to the Administrative Agent a description of the
real and personal properties of the Borrower and its Subsidiaries in detail
reasonably satisfactory to the Administrative Agent, (ii) within 15 Business
Days after such request, duly execute and deliver to the Administrative Agent
mortgages, pledges, assignments and other security agreements, as specified
by and in form and substance reasonably satisfactory to the Administrative
Agent, securing payment of all the Obligations of the Borrower under the Loan
Documents and constituting Liens on all such properties, (iii) within 30 days
after such request, take whatever action (including, without limitation, the
recording of mortgages, the filing of Uniform Commercial Code financing
statements, the giving of notices and the endorsement of notices on title
documents) may be necessary or advisable in the opinion of the Administrative
Agent to vest in the Administrative Agent (or in any representative of the
Administrative Agent designated by it) valid and subsisting Liens on the
properties purported to be subject to the security agreements delivered
pursuant to this Section 5.01(l), enforceable
70
against all third parties in accordance with their terms, (iv) within 60 days
after such request, deliver to the Administrative Agent a signed copy of a
favorable opinion, addressed to the Administrative Agent, of counsel for the
Borrower reasonably acceptable to the Administrative Agent as to the matters
contained in clauses (i), (ii) and (iii) above, as to such security
agreements being legal, valid and binding obligations of the Borrower and its
Subsidiaries enforceable in accordance with their terms and as to such other
matters as the Administrative Agent may reasonably request, (v) as promptly
as practicable after such request, deliver to the Administrative Agent
surveys meeting the criteria specified in Section 5.01(x)(i)(B) and Mortgage
Policies as to each parcel of real property subject to such request and (vi)
at any time and from time to time, promptly execute and deliver any and all
further instruments and documents and take all such other action as the
Administrative Agent may deem desirable in obtaining the full benefits of, or
in preserving the Liens of, such security agreements.
(m) Interest Rate Hedging. Within 45 days following the Closing
Date, enter into and maintain at all times thereafter, interest rate Hedge
Agreements with Persons acceptable to the Administrative Agent, covering at
least 50% of the outstanding principal balance of the Term Facilities and
providing for such Persons to make payments thereunder for a period of no
less than 2 years to the extent of increases in interest rates based on the
Eurodollar Rate.
(n) Transfer of Real Property. Within 45 days following the date of
the Initial Extension of Credit, (1) transfer all of the real property listed
on Schedule 5.01(n) and which was not transferred on or prior to the Initial
Extension of Credit to Captain D's Properties (provided that such real
property shall not have an aggregate market value in excess of $5 million) on
terms reasonably satisfactory to the Administrative Agent and deliver to the
Administrative Agent signed copies of favorable opinions addressed to the
Lender Parties, of counsel reasonably acceptable to the Administrative Agent
in substantially the form of Exhibit J as to the right, title and interest of
Captain D's Properties in such real property (or confirming the opinion
delivered by such counsel pursuant to Section 3.01(k)(xvii)), (2) deliver to
the Administrative Agent evidence satisfactory to the Administrative Agent
that all satisfactions, releases and terminations necessary to release any
Liens on such real properties (other than Liens created by the Loan
Documents) shall have been filed in the appropriate filing offices, and (3)
record all UCC Fixture Filings with respect to such real properties as the
Administrative Agent may reasonably request and pay as and when due all
transfer taxes, stamp taxes or similar taxes and all documentary filing and
recording fees, charges and expenses due in connection with such filing.
(o) SPV Subsidiaries' Separate Limited Liability Company Existence.
(i) Do, and shall cause each of the SPV Subsidiaries to do, all things
necessary to maintain its limited liability company existence separate and
apart from the Borrower, any division thereof and any Affiliate thereof and
(ii) without limiting the foregoing provisions of clause (i), cause each SPV
Subsidiary to:
(A) conduct its affairs strictly in accordance with
its certificate of formation and operating agreement and
observe all necessary, appropriate and customary corporate
formalities, including, but not limited to, holding meetings
of its board of directors and its members as required by its
certificate of formation and operating agreement,
maintaining a separate and current minute book and
71
passing all resolutions or consents necessary to authorize
actions taken or to be taken;
(B) not suffer any limitation on the authority of
its members to conduct its business and affairs in
accordance with their independent business judgment, or
authorize or suffer any Person other than its members to act
on its behalf with respect to matters (other than matters
customarily delegated to others under powers of attorney)
for which a limited liability company's own members would
customarily be responsible;
(C) maintain a separate telephone number from those
of the Borrower, or any Affiliate of the Borrower;
(D) allocate all overhead expense (including,
without limitation, telephone and other utility charges and
legal, auditing and other professional services) for items
shared between it and the Borrower, any other Affiliate of
the Borrower, or any other Person on the basis of actual use
to the extent practicable and, to the extent such allocation
is not practicable, on a basis reasonably related to actual
use;
(E) the Borrower shall maintain on its books and
records separate accounts for each of the SPV Subsidiaries,
including without limitation, payroll and intercompany
transaction accounts, separate and apart from those of the
Borrower and each other Affiliate of the Borrower or of any
other Person to reflect the financial statements of such SPV
Subsidiary separate and apart from the financial statements
of the Borrower, any other Affiliate of the Borrower or any
other Person (other than as they may be presented or
consolidated on a consolidated basis), and each SPV
Subsidiary shall have its own letterhead;
(F) prepare financial statements for each SPV
Subsidiary and ensure that any audited consolidated
financial statements of the Borrower or any of their other
Affiliates that include such SPV Subsidiary have notes
clearly stating that such SPV Subsidiary is a limited
liability company (operated as a subsidiary and not as a
division) and that its assets will be available first and
foremost to satisfy the claims of its own creditors;
(G) unless the separate ownership of such funds or
assets are properly reflected on the financial statements of
the applicable Loan Parties, not commingle funds or other
assets of such SPV Subsidiary with those of the Borrower,
any other Affiliate of the Borrower or any other Person;
(H) maintain its assets in such a manner that it
will not be difficult or costly to segregate, ascertain or
otherwise identify the individual assets of such Subsidiary,
separate from those of the Borrower, any other Affiliate of
the Borrower or any other Person;
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(I) not permit the Borrower, any other Affiliate of
the Borrower or any other Person to pay any of its operating
expenses except for payments to be reimbursed in the
ordinary course of business;
(J) maintain an arm's length relationship with the
Borrower and each other Affiliate of the Borrower and not
hold itself out, and will use its best efforts to prevent
the Borrower or any other Affiliate of the Borrower from
holding itself out, as ultimately responsible for its debts
or the decisions or actions respecting its daily business
and affairs;
(K) require that all of its full-time employees, if
any, identify themselves as such and not as employees of the
Borrower, any other Affiliate of the Borrower or any other
Person (including, without limitation, by means of providing
appropriate employees with business or identification cards
identifying such employees as its employees); and
(L) maintain capitalization adequate for the conduct
of its business and account for and manage its own
liabilities separate from those of any other Person,
including payment of all payroll and administrative expenses
and taxes from its own assets.
(p) Shoney's Separate Corporate Existence. Do all things necessary
to maintain the corporate existence of the Borrower separate and apart from
Shoney's, any division thereof and any Affiliate thereof, including:
(i) conduct its affairs strictly in accordance with its
articles of incorporation and observe all necessary, appropriate and
customary corporate formalities, including, but not limited to,
holding meetings of its board of directors and its shareholders as
required by its charter and bylaws, maintaining a separate and
current minute book and passing all resolutions or consents necessary
to authorize actions taken or to be taken;
(ii) not suffer any limitation on the authority of its
directors and officers to conduct its business and affairs in
accordance with their independent business judgment, or authorize or
suffer any person other than its officers and directors to act on its
behalf with respect to matters (other than matters customarily
delegated to others under powers of attorney) for which a
corporation's own officers and directors would customarily be
responsible;
(iii) maintain a separate telephone number from those of
Shoney's, or any Affiliate of Shoney's;
(iv) allocate all overhead expense (including, without
limitation, telephone and other utility charges and legal, auditing
and other professional services) for items shared between it and
Shoney's, any other Affiliate of Shoney's, or any other Person on the
basis of actual use to the extent practicable and, to the extent such
allocation is not practicable, on a basis reasonably related to
actual use;
73
(v) agree with Shoney's that Shoney's will, pursuant to
Section 7 of the Pledge Agreement, maintain on its books and records
separate accounts for the Borrower, including without limitation,
payroll and intercompany transaction accounts, separate and apart
from those of Shoney's and each other Affiliate of Shoney's or of
any other Person to reflect the financial statements of the Borrower
separate and apart from the financial statements of Shoney's, any
other Affiliate of Shoney's or any other Person (other than as they
may be presented or consolidated on a consolidated basis), and the
Borrower shall have its own letterhead;
(vi) prepare financial statements for the Borrower and
ensure that any audited consolidated financial statements of Shoney's
or any of its other Affiliates that include the Borrower have notes
clearly stating that the Borrower is a corporate entity (operated as
a subsidiary and not as a division) and that its assets will be
available first and foremost to satisfy the claims of its own
creditors;
(vii) unless the separate ownership of such funds or assets
are properly reflected in the financial statements of the applicable
Loan Parties, not commingle funds or other assets of the Borrower
with those of Shoney's, any other Affiliate of Shoney's or any other
Person;
(viii) maintain its assets in such a manner that it will not
be difficult or costly to segregate, ascertain or otherwise identify
the individual assets of the Borrower, separate from those of
Shoney's, any other Affiliate of Shoney's or any other Person;
(ix) not permit Shoney's, any other Affiliate of Shoney's,
or any other Person to pay any of the operating expenses of the
Borrower except for payments to be reimbursed in the ordinary course
of business;
(x) maintain an arm's-length relationship with Shoney's and
each other Affiliate of Shoney's and not hold itself out, and will
use its best efforts to prevent Shoney's or any other Affiliate of
Shoney's from holding itself out, as ultimately responsible for the
debts of the Borrower or the decisions or actions respecting the
daily business and affairs of the Borrower;
(xi) require that all of its full-time employees, if any,
identify themselves as such and not as employees of, Shoney's any
other Affiliate of Shoney's or any other Person (including, without
limitation, by means of providing appropriate employees with business
or identification cards identifying such employees as its employees);
and
(xii) maintain capitalization adequate for the conduct of
its business and account for and manage its own liabilities separate
from those of any other Person, including payment of all payroll and
administrative expenses and taxes from its own assets.
(q) TPI Separate Corporate Existence. Do all things necessary to
maintain the corporate existence of the Borrower separate and apart from TPI,
any division thereof and any Affiliate thereof, including:
74
(i) conduct its affairs strictly in accordance with its
articles of incorporation and observe all necessary, appropriate and
customary corporate formalities, including, but not limited to,
holding meetings of its board of directors and its shareholders as
required by its charter and bylaws, maintaining a separate and
current minute book and passing all resolutions or consents necessary
to authorize actions taken or to be taken;
(ii) not suffer any limitation on the authority of its
directors and officers to conduct its business and affairs in
accordance with their independent business judgment, or authorize or
suffer any person other than its officers and directors to act on its
behalf with respect to matters (other than matters customarily
delegated to others under powers of attorney) for which a
corporation's own officers and directors would customarily be
responsible;
(iii) maintain a separate telephone number from those of
TPI, or any Affiliate of TPI;
(iv) allocate all overhead expense (including, without
limitation, telephone and other utility charges and legal, auditing
and other professional services) for items shared between it and TPI,
any other Affiliate of TPI, or any other Person on the basis of
actual use to the extent practicable and, to the extent such
allocation is not practicable, on a basis reasonably related to
actual use;
(v) agree with TPI that TPI will, pursuant to Section 8 of
the Pledge Agreement, maintain on its books and records separate
accounts for the Borrower, including without limitation, payroll and
intercompany transaction accounts, separate and apart from those of
TPI and each other Affiliate of TPI or of any other Person to
reflect the financial statements of the Borrower separate and apart
from the financial statements of TPI, any other Affiliate of TPI or
any other Person (other than as they may be presented or consolidated
on a consolidated basis), and the Borrower shall have its own
letterhead;
(vi) prepare financial statements for the Borrower and
ensure that any audited consolidated financial statements of TPI or
any of its other Affiliates that include the Borrower have notes
clearly stating that the Borrower is a corporate entity (operated as
a subsidiary and not as a division) and that its assets will be
available first and foremost to satisfy the claims of its own
creditors;
(vii) unless the separate ownership of such funds or assets
are properly reflected in the financial statements of the applicable
Loan Parties, not commingle funds or other assets of the Borrower
with those of TPI, any other Affiliate of TPI or any other Person;
(viii) maintain its assets in such a manner that it will not
be difficult or costly to segregate, ascertain or otherwise identify
the individual assets of the Borrower, separate from those of TPI,
any other Affiliate of TPI or any other Person;
75
(ix) not permit TPI, any other Affiliate of TPI, or any
other Person to pay any of the operating expenses of the Borrower
except for payments to be reimbursed in the ordinary course of
business;
(x) maintain an arm's-length relationship with TPI and each
other Affiliate of TPI and not hold itself out, and will use its best
efforts to prevent TPI or any other Affiliate of TPI from holding
itself out, as ultimately responsible for the debts of the Borrower
or the decisions or actions respecting the daily business and affairs
of the Borrower;
(xi) require that all of its full-time employees, if any,
identify themselves as such and not as employees of, TPI any other
Affiliate of TPI or any other Person (including, without limitation,
by means of providing appropriate employees with business or
identification cards identifying such employees as its employees);
and
(xii) maintain capitalization adequate for the conduct of
its business and account for and manage its own liabilities separate
from those of any other Person, including payment of all payroll and
administrative expenses and taxes from its own assets.
(r) Deeds. The Borrower shall cause Shoney's at its expense to (i)
promptly cause all Deeds required to be delivered under this Agreement with
respect to the real property listed on Schedule 3.01(l) as a condition to the
Initial Extension of Credit to be recorded in the appropriate offices and
jurisdictions so as to convey to the Borrower or Captain D's Properties all
real property set forth on Schedule 3.01(l) required to be conveyed to it
under this Agreement, (ii) cause to be timely completed and filed all
transfer tax or similar returns or filings required to be filed in
connection with the recording of the Deeds, (iii) pay as and when due all
transfer taxes, stamp taxes, or similar taxes and all documentary, filing and
recording fees, charges, and expenses due in connection with such recording
and (iv) promptly provide the Administrative Agent with all recording
information and satisfactory evidence that all filings and payments required
to be filed and paid in connection with the recording of the Deeds have been
filed and paid.
(s) UCC Fixture Filings. The Borrower shall at the Borrower's
expense (i) promptly cause all UCC Fixture Filings required to be delivered
under this Agreement as a condition to the Initial Extension of Credit to be
recorded in the appropriate offices and jurisdictions, (ii) cause to be
timely completed and filed all transfer tax or similar returns or filings
required to be filed in connection with the filing of such UCC Fixture
Filings, (iii) pay as and when due all transfer taxes, stamp taxes, or
similar taxes and all documentary, filing and recording fees, charges, and
expenses due in connection with such filing and (iv) promptly provide the
Administrative Agent with all recording information and satisfactory evidence
that all filings and payments required to be filed and paid in connection
with the filing of the UCC Fixture Filings have been filed and paid.
(t) Satisfactions, Releases and Terminations. The Borrower shall
at the Borrower's expense (i) promptly cause all satisfactions, releases and
terminations required to be
76
delivered by Borrower pursuant to this Agreement as a condition to the
Initial Extension of Credit to be recorded in each jurisdiction required in
order to release all Liens securing all Existing Debt other than the Liens
securing Surviving Debt and (ii) shall promptly provide the Administrative
Agent with all recording information and satisfactory evidence that all such
satisfactions, releases and terminations filings have been filed.
(u) Termination of Financing Statements. Upon the request of the
Administrative Agent, and at the expense of the Borrower, within 30 days
after such request, furnish to the Administrative Agent proper termination
statements on Form UCC-3 covering such financing statements as the
Administrative Agent may reasonably request that were listed in the complete
requests for information referred to in Section 3.01(k)(x)(C).
(v) Performance of Related Documents. Perform and observe, and cause
each of its Subsidiaries to perform and observe, all of the terms and
provisions of each Related Document to be performed or observed by it,
maintain each such Related Document in full force and effect in all material
respects, enforce such Related Document in accordance with its terms except
when such failure would not reasonably be expected to have a Material Adverse
Effect, take all such action to such end as may be from time to time
reasonably requested by the Administrative Agent and, upon the reasonable
request of the Administrative Agent, make to each other party to each such
Related Document such demands and requests for information and reports or for
action as any Loan Party or any of its Subsidiaries is entitled to make under
such Related Document.
(w) Consents and Approvals. Obtain and deliver to the Administrative
Agent a copy of at least 50% of the third party consents and approvals with
respect to the transfer of such leaseholds to the Borrower set forth on
Schedule 3.01(g) within 6 months after the Closing Date, and deliver to the
Administrative Agent no less frequently than monthly a revised Schedule
3.01(g) reflecting an updated list of such approvals and consents that have
not been obtained as of such date.
(x) Conditions Subsequent to the Closing Date. (i) Within 210 days
after the Closing Date, furnish to the Administrative Agent deeds of trust,
trust deeds and mortgages in substantially the form of Exhibit F and covering
the all fee simple properties of the Borrower and its Subsidiaries listed on
Schedule 5.01(x)(i), duly executed by the Borrower, together with:
(A) fully paid American Land Title Association
Lender's Extended Coverage title insurance policies or in
lieu thereof binding commitments therefor (the "Mortgage
Policies") in form and substance, with endorsements and in
amount, acceptable to the Administrative Agent, issued,
coinsured and reinsured by title insurers acceptable to the
Administrative Agent, insuring the Mortgages to be valid
first and subsisting Liens on the properties listed on
Schedule 5.01(x)(i), free and clear of all defects
(including, but not limited to, mechanics' and materialmen's
Liens) and encumbrances, excepting only Permitted
Encumbrances, and providing for such other affirmative
insurance (including endorsements for future advances under
the Loan Documents and for mechanics' and materialmen's
Liens) and such coinsurance and direct access reinsurance as
the Administrative Agent may deem necessary or desirable,
77
(B) American Land Title Association form surveys for
each of the properties listed on Schedule 5.01(x)(i), dated
no more than 60 days before the date of recordation of the
applicable Mortgage, certified to the Administrative Agent
and the issuer of the Mortgage Policies in a manner
satisfactory to the Administrative Agent by a land surveyor
duly registered and licensed in the States in which the
property described in such surveys is located and acceptable
to the Administrative Agent, in form and substance
satisfactory to the Administrative Agent.
(C) an appraisal of each of the properties indicated
on Schedule 5.01 (x)(i), which appraisals shall be from
Xxxxxxxx & Xxxxxxx or any other Person acceptable to the
Lender Parties and otherwise in form and substance
satisfactory to the Lender Parties,
(D) evidence of the insurance required by the terms
of this Agreement, and
(E) evidence that all other action that the
Administrative Agent may reasonably deem necessary or
desirable in order to create valid first and subsisting
Liens on the properties listed on Schedule 5.01(x)(i) has
been taken or that the necessary steps for such action have
been taken.
(ii) To the extent not previously delivered to the
Administrative Agent, furnish to the Administration Agent within 60
days after the Closing Date (A) environmental database searches, with
results acceptable to the Administrative Agent, with respect to the
properties acquired since November 28, 1997, and (B) completed ASTM
Environmental Site Assessment Transaction Screen Questionnaires, with
results acceptable to the Administrative Agent, with respect to the
properties acquired since November 28, 1997.
(iii) Within 30 days after the Closing Date, furnish to the
Administrative Agent with respect to each of the real properties
located in Florida listed on Schedule 3.01(k)(xii) hereto:
(A) Final Mortgage Policies delivered pursuant to
Section 3.01(k)(xii) reissued by the title issuer without
survey exceptions in form and substance, with endorsements
and in amount, acceptable to the Administrative Agent, and
(B) American Land Title Association form surveys for
each of the properties listed on Schedule 3.01(k)(xii),
dated no more than 60 days before the day of the Initial
Extension of Credit, certified to the Administrative Agent
and the issuer of the Mortgage Policies in a manner
satisfactory to the Administrative Agent by a land surveyor
duly registered and licensed in the States in which the
property described in such surveys is located and acceptable
to the Administrative Agent, in form and substance
satisfactory to the Administrative Agent.
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(iv) Within thirty (30) days after the Closing Date, furnish
to the Administrative Agent copies of confirmatory deeds or
certificates of merger evidencing that all property held by the
Borrower or Captain D's Properties on the Closing Date relating to
a "Shoney's" restaurant has been transferred to Shoney's, Inc. or one
of its Affiliates (other than the Borrower or its Subsidiaries).
(v) (x)Within thirty (30) days after the Closing Date,
furnish to the Administrative Agent a certified copy of the Office
Lease duly executed by the parties thereto, and (y) within forty-five
(45) days after the Closing Date, furnish to the Administrative Agent
certified copies of the Administrative Services Agreements duly
executed by the parties thereto.
(vi) (x)Within 10 Business Days after the Closing Date,
transfer to Captain D's Realty all of the leasehold interests held
by the Borrower that may be assigned without the consent of any third
party or for which such third party consents have been obtained, (y)
within 120 days after the Closing Date, use its best efforts to
obtain and deliver to the Administrative Agent a copy of at least 50%
of the third party consents and approvals set forth on Schedule
3.01(g) (as of the Closing Date) pertaining to such transfer and (z)
promptly after receiving any third party consent after the Closing
Date, transfer the applicable leasehold interest to Captain D's
Realty, and deliver no less frequently than monthly a list of
leasehold interests so transferred during such period.
SECTION 5.02. Negative Covenants. So long as any Advance shall
remain unpaid, any Letter of Credit shall be outstanding or any Lender Party
shall have any Commitment hereunder, the Borrower will not, at any time:
(a) Liens, Etc. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to exist, any Lien
on or with respect to any of its properties of any character (including,
without limitation, accounts) whether now owned or hereafter acquired, or
sign or file or suffer to exist, or permit any of its Subsidiaries to sign or
file or suffer to exist, under the Uniform Commercial Code of any
jurisdiction, a financing statement that names the Borrower or any of its
Subsidiaries as debtor, or sign or suffer to exist, or permit any of its
Subsidiaries to sign or suffer to exist, any security agreement authorizing
any secured party thereunder to file such financing statement, or assign, or
permit any of its Subsidiaries to assign, any accounts or other right to
receive income, excluding, however, from the operation of the foregoing
restrictions the following:
(i) Liens created under the Loan Documents;
(ii) Permitted Liens;
(iii) Liens securing the Surviving Debt or any other Debt
described in Section 5.02(b)(iv)(E) and other Liens existing on the
date hereof and described on Schedule 5.02(a) hereto;
(iv) purchase money Liens upon or in real property or
equipment acquired or held by the Borrower or any of its Subsidiaries
to secure the purchase price of such property or equipment or to
secure Debt incurred solely for the purpose of financing
79
the acquisition, construction or improvement of any such property or
equipment to be subject to such Liens, or Liens existing on any such property
or equipment at the time of acquisition (other than any such Liens created in
contemplation of such acquisition that do not secure the purchase price), or
extensions, renewals or replacements of any of the foregoing for the same or
a lesser amount; provided, however, that no such Lien shall extend to or
cover any property other than the property or equipment being acquired,
constructed or improved, and no such extension, renewal or replacement shall
extend to or cover any property not theretofore subject to the Lien being
extended, renewed or replaced; and provided further that the aggregate
principal amount of the Debt secured by Liens permitted by this clause (iv)
at the time of acquisition, construction or improvement of the property or
equipment subject thereto shall not exceed 100% the cost of such property or
equipment, construction or improvement or of the then fair value thereof,
whichever shall be less and that any such Debt shall be subject to the limits
set forth in Section 5.02(b)(iv)(B);
(v) Liens arising in connection with Capitalized Leases
permitted under Section 5.02(b)(iv)(C); provided that no such Lien
shall extend to or cover any Collateral or assets other than the
assets subject to such Capitalized Leases;
(vi) other Liens securing Debt outstanding in an aggregate
principal amount not to exceed $2,500,000, provided that no such Lien
shall extend to or cover any Collateral;
(vii) the replacement, extension or renewal of any Lien
permitted by clause (iii) above upon or in the same property
theretofore subject thereto or the replacement, extension or renewal
(without increase in the amount or change in any direct or contingent
obligor) of the Debt secured thereby;
(viii) judgment liens securing amounts not in excess of
$1,000,000 in existence less than thirty days after the entry thereof
or with respect to which execution has been stayed or with respect
to which the appropriate insurance carrier has agreed in writing that
there is full coverage (subject to a customary deductible not in
excess of $1,000,000) by insurance;
(ix) materialmen's, mechanic's, carriers', workmen's and
repairmen's Liens, provided that the Borrower or the applicable
Subsidiary is contesting in good faith and at its own expense the
validity or applicability of any such Lien by an appropriate legal
proceeding which proceeding must operate to prevent the sale or
forfeiture of the real property or any part thereof encumbered by
such Lien; provided further that during the pendency of such contest,
the Borrower or the applicable Subsidiary shall cause security
satisfactory to Administrative Agent to be provided, assuring the
discharge of the Borrower's or the applicable Subsidiary's
obligations that are the subject of such contest and of any
additional interest charge, penalty or expense arising from or
incurred as a result of such contest; and
(x) Liens on the assets of Captain D's Realty securing the
Debt permitted by Section 5.02(b)(vii).
80
(b) Debt. Create, incur, assume or suffer to exist, or permit any
of its Subsidiaries to create, incur, assume or suffer to exist, any Debt
other than:
(i) in the case of the Borrower, Debt in respect of Hedge
Agreements designed to hedge against fluctuations in interest rates
incurred in the ordinary course of business and consistent with
prudent business practice the aggregate Agreement Value thereof not
to exceed $100,000,000 at any time outstanding;
(ii) in the case of the Borrower, Debt owed to a wholly-
owned Subsidiary of the Borrower, provided that (x) such Debt is
subordinated to any Debt of the Borrower under the Loan Documents on
the terms and conditions set forth in Exhibit L and (y) if such Debt
is owed to a Collateral Grantor (1) such Debt shall constitute
Pledged Debt, and (2) if evidenced by promissory notes, in form and
substance satisfactory to the Administrative Agent, such promissory
notes shall be pledged as security for the Obligations of the holder
thereof under the Loan Documents to which such holder is a party and
delivered to the Administrative Agent pursuant to the terms of the
Security Agreement;
(iii) in the case of any of the Subsidiaries of the Borrower
(other than Captain D's Properties or Captain D's Realty) Debt owed
to the Borrower or to a wholly-owned Subsidiary of the Borrower;
provided that (x) such Debt is subordinated to any Debt of such
Subsidiary under the Loan Documents on the terms and conditions set
forth in Exhibit L, and (y) if such Debt is owed to a Collateral
Grantor, (1) such Debt shall constitute Pledged Debt, and (2) if
evidenced by promissory notes, in form and substance satisfactory to
the Administrative Agent, such promissory notes shall be pledged as
security for the Obligations of the holder thereof under the Loan
Documents to which such holder is a party and delivered to the
Administrative Agent pursuant to the terms of the Security Agreement;
(iv) in the case of the Borrower and any of its Subsidiaries
(other than Captain D's Properties or Captain D's Realty);
(A) Debt under the Loan Documents,
(B) Debt secured by Liens permitted by Section
5.02(a)(iv) not to exceed in the aggregate $3,000,000 at any
time outstanding,
(C) (i) Capitalized Leases (other than those
permitted by subclause (ii) of this clause (C) and those
permitted by clause (E) below) not to exceed in the
aggregate $15,000,000 at any time outstanding, (ii)
Capitalized Leases in connection with the Captain D's Lease
Program not to exceed in the aggregate $5,000,000 in any
Fiscal Year plus, in any Fiscal Year ending in 2000 or
thereafter, an amount up to $5,000,000 equal to the excess
(if any) of the amount of Capitalized Leases permitted to be
incurred in the immediately preceding Fiscal Year in
connection with the Captain D's Lease Program over the
aggregate amount of Capitalized Leases in connection with
the Captain D's Lease Program actually incurred in the
immediately preceding Fiscal Year, and (iii) in the case of
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Capitalized Leases to which any Subsidiary of the Borrower is
a party, Debt of the Borrower of the type described in clause
(i) of the definition of "Debt" guaranteeing the Obligations
of such Subsidiary under the Capitalized Leases permitted
under this clause (C),
(D) unsecured Debt incurred in the ordinary course
of business for the deferred purchase price of property or
services, maturing within one year from the date created,
and aggregating, on a Consolidated basis, not more than
$2,000,000 at any one time outstanding,
(E) the Surviving Debt, and any Debt extending the
maturity of, or refunding or refinancing, in whole or in
part, any Surviving Debt, provided that the terms of any
such extending, refunding or refinancing Debt, and of any
agreement entered into and of any instrument issued in
connection therewith, are otherwise permitted by the Loan
Documents and provided further that the principal amount of
such Surviving Debt shall not be increased above the
principal amount thereof outstanding immediately prior to
such extension, refunding or refinancing, and the direct and
contingent obligors therefor shall not be changed, as a
result of or in connection with such extension, refunding or
refinancing,
(F) Contingent Obligations of the Borrower or any of
its Subsidiaries in an amount not to exceed $5,000,000;
provided that such Contingent Obligations are unsecured,
(G) Debt arising in connection with the
Restructuring and described on Schedule 5.02(b),
(H) Debt under the Master Leases,
(I) endorsement of negotiable instruments for
deposit or collection or similar transactions in the
ordinary course of business,
(J) (i) preferred stock and (ii) subordinated debt
in an amount not to exceed $5,000,000, in each case to
finance research and development expenditures of the
Borrower; provided no Default or Event of Default exists
immediately before or after giving effect to the issuance
thereof.
(v) in the case of the Borrower, Debt in respect of letters
of credit in an aggregate amount not to exceed $10,000,000 at any
time outstanding.
(vi) in the case of the Borrower, Debt in respect of
indemnification obligations of the Borrower in connection with bonds
and letters of credit related to self insurance and insurance
programs and policies of the Borrower, Shoney's and their respective
Subsidiaries and Affiliates ("Contingent Insurance Obligations");
provided that agreements entered into in respect of Contingent
Insurance Obligations will be on a joint and several basis among the
Borrower, Shoney's and their respective Subsidiaries and Affiliates.
82
(vii) in the case of Captain D's Realty, secured Debt up
to the aggregate principal amount of the Term C Advances then
outstanding so long as the proceeds of such Debt is used to prepay
the Term C Facility.
(c) Lease Obligations. (i) Create, incur, assume or suffer to exist,
or permit any of its Subsidiaries to create, incur, assume or suffer to
exist, any obligations as lessee for the rental or hire of real or personal
property of any kind under leases or agreements to lease (excluding
Capitalized Leases) having an original term of one year or more that would
cause the direct and contingent liabilities of the Borrower and its
Subsidiaries, on a Consolidated basis, in respect of all such obligations to
exceed $10,000,000 payable in any period of 12 consecutive months or (ii)
amend, modify or assign, or permit any Subsidiary to amend, modify or assign,
any Master Lease other than any amendment or modification of such Master
Lease that is solely for the purpose of subjecting (in the ordinary course of
business) additional real property to such Master Lease or terminating (in
the ordinary course of business) the provisions of such Master Lease as they
relate to a specific piece of real property.
(d) Mergers, Etc. Merge into or consolidate with any Person or
permit any Person to merge into it, or permit any of its Subsidiaries to do
so, except that (i) any Subsidiary of the Borrower (other than Captain D's
Properties or Captain D's Realty) may merge into or consolidate with any
other Subsidiary of the Borrower provided that, in the case of any such
merger or consolidation, the Person formed by such merger or consolidation
shall be a wholly-owned Subsidiary of the Borrower, (ii) any of the
Borrower's Subsidiaries may merge into the Borrower, and (iii) the Borrower
and its Subsidiaries may consummate the Restructuring on terms and conditions
consistent with those described in the Information Memorandum and otherwise
satisfactory to the Lender Parties.
(e) Sales, Etc. of Assets. Sell, lease, transfer or otherwise
dispose of, or permit any of its Subsidiaries to sell, lease, transfer or
otherwise dispose of, any assets, or grant any option or other right to
purchase, lease or otherwise acquire any assets, except:
(i) sales of Inventory in the ordinary course of its
business,
(ii) (A) the transfer of real property by the Borrower to
Captain D's Properties on terms satisfactory to the Lender Parties,
(B) the lease of the real property owned by Captain D's Properties
to the Borrower, in each case pursuant to the Master Lease (C) the
transfer of the leasehold interests by the Borrower to Captain D's
Realty, (D) the transfer of intellectual property by the Borrower to
a newly created wholly-owned Subsidiary of the Borrower (the "IP
Subsidiary"); provided the IP Subsidiary satisfies the requirements
of Section 5.02(f)(i)(x) and becomes a grantor under the IP Security
Agreement and (E) the transfer of intellectual property related to
the "Shoney's" business by the Borrower to Shoney's; provided that
such transfer shall occur within 10 Business Days of the Closing
Date.
(iii) in a transaction authorized by subsection (d) of this
Section,
(iv) sales of assets for cash and for fair value (as
determined by (x) in the case of a sale for cash consideration of
less than or equal to $2,000,000, a person
83
authorized by the Borrower's board of directors and (y) in all other
cases, the Borrower's board of directors) in an aggregate amount not
to exceed $10,000,000 (excluding sales made under the Captain D's
Lease Program) in any Fiscal Year,
(v) so long as no Default shall occur and be continuing, the
grant of any option or other right to purchase any asset in a
transaction which would be permitted under the provisions of clause
(iv) above,
(vi) leases to current or future franchisees of the Borrower
on terms consistent with prudent business practice,
(vii) leases or subleases of properties with an aggregate
value (which value shall be the appraised value, if appraised, or
cost) not to exceed $10,000,000 (excluding properties currently being
leased or subleased and leases entered into pursuant to the Captain
D's Lease Program), in each case on terms consistent with prudent
business practice,
(viii) the transfer of real property not used by the
Borrower or its Subsidiaries in connection with the operation of its
business to Shoney's or any of its Affiliates,
(ix) the transfer of real property with a fair market
value of not more than $10 million from Captain D's Properties to
Captain D's Realty solely in connection with the Debt permitted
pursuant to Section 5.02(b)(vii),
provided that in the case of sales of assets pursuant to clause (iv)
above, the Borrower shall, (except as provided in Section
2.06(b)(ii)) within five Business Days following receipt by the
Borrower or any of its Subsidiaries of the Net Cash Proceeds from
such sale, prepay the Advances pursuant to, and in the amount and
order of priority set forth in, Section 2.06(b)(ii), as specified
therein.
(f) Investments in Other Persons. Make or hold, or permit any of its
Subsidiaries to make or hold, any Investment in any Person other than:
(i) Investments by the Borrower and its Subsidiaries in
their Subsidiaries (other than any Foreign Subsidiary), provided
that, with respect to Investments in any newly acquired or created
wholly-owned Domestic Subsidiary, such Subsidiary (x) shall become
an additional grantor pursuant to the terms of the Security Agreement
and shall become a Subsidiary Guarantor pursuant to the terms of the
Subsidiary Guaranty and (y) shall engage in a business similar to
that engaged in by the Borrower and its Subsidiaries on the date
hereof;
(ii) loans and advances to employees in the ordinary course
of the business of the Borrower and its Subsidiaries as presently
conducted in an aggregate principal amount not to exceed $300,000 at
any time outstanding;
84
(iii) Investments by the Borrower in Captain D's Properties
or Captain D's Realty consisting of the transfer of real property and
leasehold interests on terms satisfactory to the Lender Parties;
(iv) Investments by the Borrower and its Subsidiaries in
Cash Equivalents;
(v) Investments by the Borrower in Hedge Agreements
permitted under Section 5.02(b)(i);
(vi) Investments consisting of intercompany Debt permitted
under Section 5.02(b)(ii) and (b)(iii);
(vii) Investments existing on the date hereof and described
on Schedule 4.01(kk) hereto;
(viii) other Investments in an aggregate amount invested not
to exceed $2,000,000; provided that with respect to Investments made
under this clause (viii): (1) any newly acquired or created
Subsidiary of the Borrower or any of its Subsidiaries shall be a
wholly-owned Domestic Subsidiary thereof; (2) immediately before and
after giving effect thereto, no Default shall have occurred and be
continuing or would result therefrom; (3) any business acquired or
invested in pursuant to this clause (vii) shall be in a similar line
of business as the business of the Borrower or any of its
Subsidiaries; and (4) such Subsidiary shall become an additional
grantor pursuant to the terms of the Security Agreement and shall
become a Subsidiary Guarantor pursuant to the terms of the Subsidiary
Guaranty; and
(ix) Investments constituting non-cash proceeds of asset
sales to the extent permitted by Section 5.02(e)(viii).
(g) Dividends, Etc. Declare or pay any dividends, purchase, redeem,
retire, defease or otherwise acquire for value any of its Equity Interests,
now or hereafter outstanding, return any capital to its stockholders,
partners or members (or the equivalent Persons thereof) as such, make any
distribution of assets, Equity Interests, obligations or securities to its
stockholders, partners or members (or the equivalent Persons thereof) as such
or issue or sell any Equity Interests or accept capital contributions, or
permit any of its Subsidiaries to do any of the foregoing or permit any of
its Subsidiaries to purchase, redeem, retire, defease or otherwise acquire
for value any Equity Interests in the Borrower or issue or sell any Equity
Interests therein, except that, so long as no Default shall have occurred and
be continuing at the time of any action described in clauses (i) through
(iii) below or would result therefrom, (i) the Borrower may (A) declare and
pay dividends and distributions payable only in common stock of the Borrower,
(B) declare and pay a dividend to its parent from the proceeds of the
Facility in the amount necessary to consummate the Restructuring; provided
the aggregate unused principal amount of the Working Capital Facility
(including drawn and undrawn amounts under outstanding Letters of Credit) is
at least $5,000,000 immediately after payment of such dividend, (C) except to
the extent the Net Cash Proceeds thereof are required to be applied to the
prepayment of the Advances pursuant to Section 2.06(b), purchase, redeem,
retire, defease or
85
otherwise acquire shares of its capital stock with the proceeds received from
the issue of new shares of its capital stock with equal or inferior voting
powers, designations, preferences and rights, and (D) declare and pay cash
dividends to the Parent on and after the date on which the Administrative
Agent receives the audited financial statements of the Borrower for the 2001
Fiscal Year in an amount equal to 50% of the Excess Cashflow for such Fiscal
Year, (ii) any Subsidiary of the Borrower may (A) declare and pay cash
dividends to the Borrower and (B) declare and pay cash dividends to any other
wholly-owned Subsidiary of the Borrower of which it is a Subsidiary, (iii)
the Borrower may issue (A) rights or options to acquire capital stock of the
Borrower pursuant to employee stock purchase plans, director or employee
option plans and other employee benefit plans and (B) common stock upon the
exercise of options issued under, or pursuant to, employee stock purchase
plans, director or employee option plans and other employee benefit plans and
(iv) the Borrower may consummate the Permitted Reorganization.
(h) Change in Nature of Business. Except as contemplated by the
Transaction, make, or permit any of its Subsidiaries to make, any material
change in the nature of its business as carried on at the date hereof.
(i) Charter Amendments; Related Documents. (i) Amend, or permit any
of its Subsidiaries to amend, its certificate of incorporation or certificate
of formation or bylaws or operating agreement, in each case, as applicable,
if such amendment would have a Material Adverse Effect; or
(ii) Cancel or terminate any Related Document or consent to
or accept any cancellation or termination thereof, amend, modify or
change in any material respect any term or condition of any material
Related Document or give any consent, waiver or approval thereunder,
waive any default under or any breach of any term or condition of any
Related Document, agree in any manner to any other amendment,
modification or change of any term or condition of any Related
Document or take any other action in connection with any Related
Document that would impair the value of the interest or rights of any
Loan Party thereunder or that would impair the rights or interests
of the Administrative Agent or any Lender Party, or permit any of its
Subsidiaries to do any of the foregoing.
(j) Accounting Changes. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in (i) accounting policies or
reporting practices, except as required or permitted by generally accepted
accounting principles or (ii) the Fiscal Year.
(k) Prepayments, Etc. of Debt. (i) Prepay, redeem, purchase,
convert, defease or otherwise satisfy prior to the scheduled maturity thereof
in any manner, or make any payment in violation of any subordination terms
of, any Debt, other than (A) the prepayment of the Advances in accordance
with the terms of this Agreement, (B) regularly scheduled or required
repayments or redemptions of Surviving Debt or other Debt permitted hereby
and (C) the conversion of subordinated debt in accordance with its terms, or
(ii) amend, modify or change in any manner any term or condition of any
Surviving Debt or subordinated debt, or permit any of its Subsidiaries to do
any of the foregoing other than to prepay any Debt payable to the Borrower.
86
(l) Ownership Change. Take, or permit any of its Subsidiaries to
take, any action that would result in an "ownership change" (as defined in
Section 382 of the Internal Revenue Code) with respect to the Borrower or any
of its Subsidiaries or the application of the "separate return limitation
year" or "consolidated return change of ownership" limitations under the
Federal income tax consolidated return regulations with respect to the
Borrower or any of its Subsidiaries.
(m) Negative Pledge. Enter into or suffer to exist, or permit any
of its Subsidiaries to enter into or suffer to exist, any agreement
prohibiting or conditioning the creation or assumption of any Lien upon any
of its property or assets other than (i) in favor of the Secured Parties or
(ii) in connection with (A) any Surviving Debt or (B) any Debt permitted by
Section 5.02(b)(iv)(B) hereof.
(n) Partnerships, Etc. Become a general partner in any general or
limited partnership or joint venture, or permit any of its Subsidiaries to do
so, other than any Subsidiary the sole assets of which consist of its
interest in such partnership or joint venture.
(o) Speculative Transactions. Engage, or permit any of its
Subsidiaries to engage, in any transaction involving commodity options or
futures contracts or any similar speculative transactions (including, without
limitation, take-or-pay contracts), except for Hedge Agreements permitted
under Section 5.02(b).
(p) Capital Expenditures. Make, or permit any of its Subsidiaries
to make, any Capital Expenditures that would cause the aggregate of all such
Capital Expenditures made by the Borrower and its Subsidiaries to exceed (i)
$6,500,000 for the period commencing on the Closing Date through October 29,
2000 and (ii) in any Fiscal Year thereafter, $15,000,000 plus 50% of the
unused portion of such permitted Capital Expenditures carried over from the
prior Fiscal Year; provided, however, that the foregoing calculation of
Capital Expenditures made by the Borrower and its Subsidiaries in any Fiscal
Year shall exclude any Capital Expenditures made in such Fiscal Year in
connection with the Captain D's Lease Program not to exceed $10,000,000 in
any Fiscal Year or $40,000,000 in aggregate.
(q) Franchise Agreements. Will not permit, at any time, any of its
Subsidiaries to, (a) terminate or alter any of the material terms and
conditions of any of the franchise agreements pursuant to which the Borrower
or any such Subsidiary is the franchisor in such a way so as to (i) prohibit
the assignment by the franchisor (by way of collateral security) of all of
its rights and benefits in the franchise agreements or (ii) significantly
reduce the aggregate royalty fees or advertising fees payable by the
franchisees and (b) enter into any franchise agreements which would not
permit the assignment by the franchisor (by way of collateral security) of
all of its rights and benefits in such franchise agreements or which would
contain fee arrangements which are materially less beneficial, in the
aggregate, to the Borrower and its Subsidiaries than the fee arrangements
contained in existing franchise agreements of the Borrower and its
Subsidiaries.
(r) Payment Restrictions Affecting Subsidiaries. Directly or
indirectly, enter into or suffer to exist, or permit any of its Subsidiaries
to enter into or suffer to exist, any agreement or arrangement limiting the
ability of any of its Subsidiaries to declare or pay dividends or other
distributions in respect of its Equity Interests or repay or prepay any Debt
owed to, make loans or
87
advances to, or otherwise transfer assets to or invest in, the Borrower or
any of its Subsidiaries (whether through a covenant restricting dividends,
loans, asset transfers or investments, a financial covenant or otherwise),
except (i) the Loan Documents and (ii) any agreement or instrument evidencing
Surviving Debt as in effect on the date hereof.
SECTION 5.03. Reporting Requirements. So long as any Advance shall
remain unpaid, any Letter of Credit shall be outstanding or any Lender Party
shall have any Commitment hereunder, the Borrower will furnish to the Lender
Parties and the Administrative Agent:
(a) Notice of Default or Material Adverse Effect. (i) Within two
Business Days after the occurrence of each Default or any event, development
or occurrence reasonably likely to have a Material Adverse Effect continuing
on the date of such statement, a statement of the chief financial officer or
principal financial officer of the Borrower setting forth details of such
Default or such event, development or occurrence and the action that the
Borrower has taken and proposes to take with respect thereto, (ii) prior to
the consummation of the Permitted Reorganization on terms satisfactory to the
Lender Parties, within two Business Days after the occurrence of any default
or event of default under any agreement or instrument relating to any Debt of
Shoney's, written notice of such default or event of default, and (iii)
within five Business Days after the occurrence of a default or event of
default under any agreement or instrument relating to any Debt of Shoney's in
a principal amount of at least $5,000,000, which default or event of default,
with notice or the passage of time, will cause or permit the holder thereof
to cause, such Debt to mature prior to the stated maturity thereof, a
statement of the chief financial officer or principal financial officer of
the Borrower setting forth details of such default or such event of default
and the action that Shoney's has taken and proposes to take with respect
thereto;
(b) Monthly Financials. Within 30 days after the end of each fiscal
accounting period, such financial statements and in such form as is mutually
agreed by the Borrower and the Administrative Agent, of the Borrower and its
Subsidiaries duly certified by an authorized financial officer of the
Borrower.
(c) Quarterly Financials. Within 50 days after the end of each of
the first three fiscal quarters of each Fiscal Year, Consolidated balance
sheets of the Borrower and its Subsidiaries as of the end of such fiscal
quarter and Consolidated statements of income and cash flow of the Borrower
and its Subsidiaries for the period commencing at the end of the previous
fiscal quarter and ending with the end of such fiscal quarter and
Consolidated statements of income and cash flow of the Borrower and its
Subsidiaries for the period commencing at the end of the previous Fiscal Year
and ending with the end of such fiscal quarter, setting forth in each case in
comparative form the corresponding figures for the corresponding period of
the preceding Fiscal Year, all in reasonable detail and duly certified
(subject to year-end audit adjustments) by the corporate controller or chief
financial officer or principal financial officer of the Borrower as having
been prepared in accordance with GAAP, together with (i) management's
discussion and analysis of the results of operations of the Borrower and its
Subsidiaries for such period, (ii) a certificate of said officer stating that
no Default has occurred and is continuing or, if a Default has occurred and
is continuing, a statement as to the nature thereof and the action that the
Borrower has taken and proposes to take with respect thereto and (iii) a
schedule in form satisfactory to the Administrative Agent of the computations
used by the
88
Borrower in determining compliance with the covenants contained in Sections
5.04(a) through (d), provided that in the event of any change in GAAP used in
the preparation of such financial statements, the Borrower shall also
provide, if necessary for the determination of compliance with Section 5.04,
a statement of reconciliation conforming such financial statements to GAAP.
(d) Annual Financials. Within 95 days after the end of each Fiscal
Year, a copy of the annual report, if any, for such year for the Borrower and
its Subsidiaries, and a Consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of such Fiscal Year and Consolidated statements of
income and cash flow of the Borrower and its Subsidiaries for such Fiscal
Year, together with management's discussion and analysis of the results of
operations of the Borrower and its Subsidiaries for such period, accompanied
by an opinion acceptable to the Required Lenders of Ernst & Young or other
independent public accountants of recognized standing acceptable to the
Administrative Agent, together with (i) a certificate of such accounting firm
to the Lender Parties stating that in the course of the regular audit of the
business of the Borrower and its Subsidiaries, which audit was conducted by
such accounting firm in accordance with generally accepted auditing
standards, such accounting firm has obtained no knowledge that a Default of
a financial nature under Section 5.02(a), 5.02(b), 5.02(f), 5.02(p) or 5.04
has occurred and is continuing, or if, in the opinion of such accounting
firm, a Default of a financial nature under Section 5.02(a), 5.02(b),
5.02(f), 5.02(p) or 5.04 has occurred and is continuing, a statement as to
the nature thereof, (ii) a schedule in form satisfactory to the
Administrative Agent of the computations used by such accountants in
determining, as of the end of such Fiscal Year, compliance with the covenants
contained in Sections 5.04(a) through (d), provided that in the event of any
change in GAAP used in the preparation of such financial statements, the
Borrower shall also provide, if necessary for the determination of compliance
with Section 5.04, a statement of reconciliation conforming such financial
statements to GAAP and (iii) a certificate of the corporate controller, chief
financial officer or principal financial officer of the Borrower stating that
no Default has occurred and is continuing or, if a Default has occurred and
is continuing, a statement as to the nature thereof and the action that the
Borrower has taken and proposes to take with respect thereto.
(e) Annual Forecasts. As soon as available and in any event no later
than 30 days after the end of each Fiscal Year, forecasts prepared by
management of the Borrower, in form satisfactory to the Administrative Agent,
of balance sheets, income statements and cash flow statements on a quarterly
basis for the Fiscal Year following such Fiscal Year then ended and on an
annual basis for each Fiscal Year thereafter until the Termination Date.
(f) ERISA Events and ERISA Reports. Promptly and in any event within
10 days after any Loan Party or any ERISA Affiliate knows or has reason to
know that any ERISA Event has occurred, a statement of the chief financial
officer or principal financial officer of the Borrower describing such ERISA
Event and the action, if any, that such Loan Party or such ERISA Affiliate
has taken and proposes to take with respect thereto and (ii) on the date any
records, documents or other information must be furnished to the PBGC with
respect to any Plan pursuant to Section 4010 of ERISA, a copy of such
records, documents and information.
(g) Plan Terminations; Plan Annual Reports; Multiemployer Plan
Notices. (i) Promptly and in any event within two Business Days after receipt
thereof by any Loan Party or
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any ERISA Affiliate, copies of each notice from the PBGC stating its
intention to terminate any Plan or to have a trustee appointed to administer
any Plan,
(ii) Promptly upon the request of the Administrative Agent,
copies of each Schedule B (Actuarial Information) to the annual
report (Form 5500 Series) with respect to each Plan, and
(iii) Promptly and in any event within five Business Days
after receipt thereof by any Loan Party or any ERISA Affiliate from
the sponsor of a Multiemployer Plan, copies of each notice concerning
(A) the imposition of Withdrawal Liability by any such Multiemployer
Plan, (B) the reorganization or termination, within the meaning of
Title IV of ERISA, of any such Multiemployer Plan or (C) the amount
of liability incurred, or that may be incurred, by such Loan Party
or any ERISA Affiliate in connection with any event described in
clause (A) or (B); provided, however, that the notice under this
clause (iii) is required to be given only if the event or
circumstance identified in such notice, when aggregated with any
other events or circumstances required to be reported under Section
5.03(f) and (g) could reasonably be expected to result in a Material
Adverse Effect.
(h) Litigation. Promptly after the commencement thereof, notice of
all actions, suits, investigations, litigation and proceedings before any
court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting any Loan Party or any of its
Subsidiaries of the type described in Section 4.01(i), and promptly after the
occurrence thereof, notice of any adverse change in the status or the
financial effect on any Loan Party or any of its Subsidiaries of the
Disclosed Litigation from that described on Schedule 3.01(e). For purposes
of this subclause (h), any litigation, arbitration, or governmental
investigation or proceeding which involves a damage claim of $500,000 or less
need not be the subject of any such notice unless it is one of a series of
claims arising out of the same set of facts or circumstances which, in the
aggregate, exceed $2,000,000.
(i) Securities Reports. Promptly after the sending or filing
thereof, copies of all proxy statements, financial statements and reports
that any Loan Party or any of its Subsidiaries sends to its stockholders, and
copies of all regular, periodic and special reports, and all registration
statements, that any Loan Party or any of its Subsidiaries files with the
Securities and Exchange Commission or any governmental authority that may be
substituted therefor, or with any national securities exchange, in each case
excluding the exhibits thereto unless requested by the Administrative Agent.
(j) Creditor Reports. Promptly after the furnishing thereof, copies
of any statement or report furnished to any other holder of the securities of
any Loan Party or of any of its Subsidiaries pursuant to the terms of any
indenture, loan or credit or similar agreement and not otherwise required to
be furnished to the Lender Parties or the Administrative Agent pursuant to
any other clause of this Section 5.03.
(k) Agreement Notices. Promptly upon receipt thereof, copies of all
notices, requests and other documents received by any Loan Party or any of
its Subsidiaries under or pursuant to any Related Document or indenture, loan
or credit or similar agreement regarding or
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related to any breach or default by any party thereto or any other event, in
each case that could materially impair the value of the interests or the
rights of any Loan Party or otherwise have a Material Adverse Effect.
(l) Revenue Agent Reports. Within 30 days after receipt, copies of
all Revenue Agent Reports (Internal Revenue Service Form 886), or other
written proposals of the Internal Revenue Service, that propose, determine or
otherwise set forth positive adjustments to the Federal income tax liability
of the affiliated group (within the meaning of Section 1504(a)(1) of the
Internal Revenue Code) of which the Borrower is a member aggregating
$2,000,000 or more.
(m) Environmental Conditions. Promptly after the assertion or
occurrence thereof, notice of any Environmental Action against or of any
noncompliance by any Loan Party or any of its Subsidiaries with any
Environmental Law or Environmental Permit that (i) could reasonably be
expected to have a Material Adverse Effect or (ii) cause any property
described in the Mortgages to be subject to any restrictions which would
interfere with its normal use or operation.
(n) Real Property. As soon as available and in any event within 90
days after the end of each Fiscal Year, a report supplementing Schedules
4.01(ii) and 4.01(jj) hereto, including a list of all real property disposed
of by the Borrower or any of its Subsidiaries during such Fiscal Year (which
list shall include the location of such real property and the Net Cash
Proceeds received by the Borrower and its Subsidiaries from such disposal)
and a list and description (including the street address, state, record
owner, book value thereof), of all real property acquired during such Fiscal
Year.
(o) Insurance. As soon as available and in any event within 90 days
after the end of each Fiscal Year, a report summarizing the insurance
coverage required under the Credit Agreement (specifying type, amount and
carrier) in effect for the Borrower and its Subsidiaries and containing such
additional information as any Lender Party (through the Administrative Agent)
may reasonably specify.
(p) Other Information. Such other information respecting the
business, condition (financial or otherwise), operations, performance,
properties or prospects of any Loan Party or any of its Subsidiaries as any
Lender Party (through the Administrative Agent) may from time to time
reasonably request.
SECTION 5.04. Financial Covenants. So long as any Advance shall
remain unpaid, any Letter of Credit shall be outstanding or any Lender Party
shall have any Commitment hereunder, the Borrower will:
(a) Interest Coverage Ratio. Maintain as of the end of each fiscal
quarter of the Borrower a ratio of (i) Consolidated Adjusted EBITDA of the
Borrower and its Subsidiaries for the most recently completed four fiscal
quarter period to (ii) Interest Expense of the Borrower and its Subsidiaries
for such fiscal quarter of not less than the ratio set forth below for such
fiscal quarter:
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FISCAL QUARTER ENDING RATIO
-------------------------------------
February 18, 2001 2.00:1.00
May 13, 2001 2.25:1.00
August 5, 2001 2.25:1.00
October 28, 2001 2.50:1.00
(b) Minimum Adjusted EBITDA. Maintain as of the end of the fiscal
quarter of the Borrower minimum Consolidated Adjusted EBITDA of not less than
the dollar amount set forth below for such fiscal quarter:
FISCAL QUARTER ENDING AMOUNT
---------------------------------------
February 18, 2001 $34,000,000
May 13, 2001 $34,000,000
August 5, 2001 $34,000,000
October 28, 2001 $35,000,000
(c) Leverage Ratio. Maintain as of the end of each fiscal
quarter of the Borrower a Leverage Ratio of not more than the ratio set forth
below for such fiscal quarter:
FISCAL QUARTER ENDING RATIO
-------------------------------------
February 18, 2001 3.75:1.00
May 13, 2001 3.75:1.00
August 5, 2001 3.75:1.00
October 28, 2001 3.50:1.00
(d) Fixed Charge Coverage Ratio. Maintain as of the end of each
fiscal quarter of the Borrower a ratio of (i) the sum of (A) Consolidated
Adjusted EBITDA of the Borrower and its Subsidiaries for the most recently
completed four fiscal quarter period less (B) the aggregate amount of all tax
expense incurred (net of any tax benefit received) by the Borrower and its
Subsidiaries during such four fiscal quarter period less (c) the aggregate
amount of Maintenance Capital Expenditures made by the Borrower and its
Subsidiaries during such four fiscal quarter period to (ii) the sum of (A)
Interest Expense in respect of such fiscal quarter plus (B) the aggregate
principal amount of all scheduled amortization payments made by the Borrower
and its Subsidiaries during such four fiscal quarter period in respect of
Debt of the Borrower and its Subsidiaries of not less than the ratio set
forth below for such fiscal quarter:
FISCAL QUARTER ENDING RATIO
-------------------------------------
February 18, 2001 1.25:1.00
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May 13, 2001 1.50:1.00
August 5, 2001 1.50:1.00
October 28, 2001 1.50:1.00
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events
("Events of Default") shall occur and be continuing:
(a) (i) the Borrower shall fail to pay any principal of any Advance
when the same shall become due and payable or (ii) the Borrower shall fail to
pay any interest on any Advance, or any Loan Party shall fail to make any
other payment under any Loan Document, in each case under this clause (ii)
within 3 Business Days after the same becomes due and payable; or
(b) any representation or warranty made by any Loan Party (or any of
its officers) under or in connection with any Loan Document shall prove to
have been incorrect in any material respect when made; or
(c) the Borrower shall fail to perform or observe any term, covenant
or agreement contained in Section 2.14, 5.01(d) (to the extent that such
covenant relates to casualty or liability insurance in respect of
Collateral), (e), (g), (l), (m), (n) or (x), 5.02, 5.03 or 5.04; or
(d) any Loan Party shall fail to perform any other term, covenant or
agreement contained in any Loan Document on its part to be performed or
observed if such failure shall remain unremedied for 30 days after the
earlier of the date on which (A) a Responsible Officer of any Loan Party
becomes aware of such failure or (B) written notice thereof shall have been
given to the Borrower by the Administrative Agent or any Lender Party; or
(e) any Loan Party or any of its Subsidiaries shall, fail to pay any
principal of, premium or interest on or any other amount payable in respect
of any Debt that is outstanding in a principal amount (or, in the case of any
Hedge Agreement, an Agreement Value) of at least $5,000,000 either
individually or in the aggregate (but excluding Debt outstanding hereunder)
of such Loan Party or such Subsidiary (as the case may be), when the same
becomes due and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue after the
applicable grace period, if any, specified in the agreement or instrument
relating to such Debt; or any other event shall occur or condition shall
exist under any agreement or instrument relating to any such Debt and shall
continue after the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such event or condition is to
accelerate, or to permit the acceleration of, the maturity of such Debt or
otherwise to cause, or to permit the holder thereof to cause, such Debt to
mature; or any such Debt shall be declared to be due and payable or required
to be prepaid or redeemed (other than by a regularly scheduled required
prepayment or redemption), purchased or defeased, or an offer to prepay,
redeem, purchase or defease such Debt shall be required to be made, in each
case prior to the stated maturity thereof; or
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(f) (i) any Loan Party or any of its Subsidiaries shall generally not
pay its debts as such debts become due, or shall admit in writing its
inability to pay its debts generally, or shall make a general assignment for
the benefit of creditors; or (ii) any proceeding shall be instituted by or
against any Loan Party or any of its Subsidiaries seeking to adjudicate it a
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its
debts under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, or other similar official for it or for
any substantial part of its property and, in the case of any such proceeding
instituted against it (but not instituted by it) that is being diligently
contested by it in good faith, either such proceeding shall remain
undismissed or unstayed for a period of 30 days or any of the actions sought
in such proceeding (including, without limitation, the entry of an order for
relief against, or the appointment of a receiver, trustee, custodian or other
similar official for, it or any substantial part of its property) shall
occur; or (iii) any Loan Party or any of its Subsidiaries shall take any
corporate action to authorize any of the actions set forth above in this
subsection (f)(ii); provided that, for purposes of this subsection (f)(ii) or
(iii) the term "Loan Party" shall include Shoney's; or
(g) any judgment or court order for the payment of money in excess
of $2,500,000 shall be rendered against any Loan Party or any of its
Subsidiaries and either (i) enforcement proceedings shall have been commenced
by any creditor upon such judgment or court order or (ii) there shall be any
period of 30 consecutive days during which such judgment shall not have been
discharged or a stay of enforcement of such judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect; provided, however,
that any such judgment or court order shall not be an Event of Default under
this Section 6.01(g) if and for so long as (i) the entire amount of such
judgment or court order is covered by a valid and binding policy of insurance
between the defendant and the insurer covering payment thereof and (ii) such
insurer, which shall be rated at least "A" by A.M. Best Company, has been
notified of, and has not disputed the claim made for payment of the amount of
such judgment or order; or
(h) any non-monetary judgment or order shall be rendered against any
Loan Party or any of its Subsidiaries that is reasonably likely to have a
Material Adverse Effect, and there shall be any period of 30 consecutive days
during which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect; or
(i) any provision of any Loan Document after delivery thereof
pursuant to Section 3.01 or 5.01(l) shall for any reason cease to be valid
and binding on or enforceable against any Loan Party party to it, or any such
Loan Party shall so state in writing; or
(j) any Collateral Document or financing statement after delivery
thereof pursuant to Section 3.01 or 5.01(l) shall for any reason (other than
pursuant to the terms thereof) cease to create a valid and perfected first
priority lien on and security interest in the Collateral purported to be
covered thereby, other than in respect of any item or items of Collateral the
fair market value of which, either individually or in the aggregate, does not
exceed $5,000,000; or
(k) (i) any Person or two or more Persons acting in concert shall
have acquired beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act of
1934), directly or indirectly, of Voting
94
Interests of the Borrower (or other securities convertible into such Voting
Interests) representing 20% or more of the combined voting power of all
Voting Interests of the Borrower; or (ii) any Person or two or more Persons
acting in concert shall have acquired by contract or otherwise, or shall have
entered into a contract or arrangement that, upon consummation, will result
in its or their acquisition of the power to exercise, directly or indirectly,
a controlling influence over the management or policies of the Borrower
except for, in either case, the consummation of the Permitted Reorganization;
or
(l) the Borrower shall cease to be the record and beneficial owner
of 100% of the Equity Interests in Captain D's Properties or Captain D's
Realty; or
(m) any ERISA Event shall have occurred with respect to a Plan and
the sum (determined as of the date of occurrence of such ERISA Event) of the
Insufficiency of such Plan and the Insufficiency of any and all other Plans
with respect to which an ERISA Event shall have occurred and then exist (or
the liability of the Loan Parties and the ERISA Affiliates related to such
ERISA Event) exceeds $5,000,000; or
(n) any Loan Party or any ERISA Affiliate shall have been notified
by the sponsor of a Multiemployer Plan that it has incurred Withdrawal
Liability to such Multiemployer Plan in an amount that, when aggregated with
all other amounts required to be paid to Multiemployer Plans by the Loan
Parties and the ERISA Affiliates as Withdrawal Liability (determined as of
the date of such notification), exceeds $5,000,000 or requires payments
exceeding $1,000,000 per annum; or
(o) any Loan Party or any ERISA Affiliate shall have been notified
by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of
ERISA, and as a result of such reorganization or termination the aggregate
annual contributions of the Loan Parties and the ERISA Affiliates to all
Multiemployer Plans that are then in reorganization or being terminated have
been or will be increased over the amounts contributed to such Multiemployer
Plans for the plan years of such Multiemployer Plans immediately preceding
the plan year in which such reorganization or termination occurs by an amount
exceeding $1,000,000;
then, and in any such event, the Administrative Agent (i) shall at
the request, or may with the consent, of the Required Lenders, by notice to
the Borrower, declare the Commitments of each Lender Party and the obligation
of each Lender Party to make Advances (other than Letter of Credit Advances
by an Issuing Bank or a Working Capital Lender pursuant to Section 2.03(c)
and Swing Line Advances by a Working Capital Lender pursuant to Section
2.02(b)) and of each Issuing Bank to issue Letters of Credit to be
terminated, whereupon the same shall forthwith terminate, and (ii) shall at
the request, or may with the consent, of the Required Lenders, (A) by notice
to the Borrower, declare the Notes, all interest thereon and all other
amounts payable under this Agreement and the other Loan Documents to be
forthwith due and payable, whereupon the Notes, all such interest and all
such amounts shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by the Borrower, and (B) by notice to each party
required under the terms of any agreement in support of which a Standby
Letter of Credit is issued, request that all Obligations under such agreement
be declared to be due and payable;
95
provided, however, that in the event of an actual or deemed entry of an order
for relief with respect to the Borrower under the Federal Bankruptcy Code,
(x) the Commitments of each Lender Party and the obligation of each Lender
Party to make Advances (other than Letter of Credit Advances by an Issuing
Bank or a Working Capital Lender pursuant to Section 2.03(c)) and Working
Capital Advances by a Working Capital Lender pursuant to Section 2.02(b) and
of each Issuing Bank to issue Letters of Credit shall automatically be
terminated and (y) the Notes, all such interest and all such amounts shall
automatically become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived
by the Borrower.
SECTION 6.02. Actions in Respect of the Letters of Credit upon
Default. If any Event of Default shall have occurred and be continuing, the
Administrative Agent may, or shall at the request of the Required Lenders,
irrespective of whether it is taking any of the actions described in Section
6.01 or otherwise, make demand upon the Borrower to, and forthwith upon such
demand the Borrower will, pay to the Administrative Agent on behalf of the
Lender Parties in same day funds at the Administrative Agent's office
designated in such demand, for deposit in the L/C Cash Collateral Account, an
amount equal to the aggregate Available Amount of all Letters of Credit then
outstanding. If at any time the Administrative Agent determines that any
funds held in the L/C Cash Collateral Account are subject to any right or
claim of any Person other than the Administrative Agent and the Lender
Parties or that the total amount of such funds is less than the aggregate
Available Amount of all Letters of Credit, the Borrower will, forthwith upon
demand by the Administrative Agent, pay to the Administrative Agent, as
additional funds to be deposited and held in the L/C Cash Collateral Account,
an amount equal to the excess of (a) such aggregate Available Amount over (b)
the total amount of funds, if any, then held in the L/C Cash Collateral
Account that the Administrative Agent determines to be free and clear of any
such right and claim. Upon the drawing of any Letter of Credit for which
funds are on deposit in the L/C Cash Collateral Account, such funds shall be
applied to reimburse the relevant Issuing Bank or Working Capital Lenders, as
applicable, to the extent permitted by applicable law.
ARTICLE VII
THE ADMINISTRATIVE AGENT
SECTION 7.01. Authorization and Action. (a) Each Lender Party (in
its capacities as a Lender, the Swing Line Bank (if applicable), the Issuing
Bank (if applicable) and on behalf of itself and its Affiliates as potential
Hedge Banks) hereby appoints and authorizes the Administrative Agent to take
such action as agent on its behalf and to exercise such powers and discretion
under this Agreement and the other Loan Documents as are delegated to the
Administrative Agent by the terms hereof and thereof, together with such
powers and discretion as are reasonably incidental thereto. As to any
matters not expressly provided for by the Loan Documents (including, without
limitation, enforcement or collection of the Notes), the Administrative Agent
shall not be required to exercise any discretion or take any action, but
shall be required to act or to refrain from acting (and shall be fully
protected in so acting or refraining from acting) upon the instructions of
the Required Lenders or such other Lenders as required by Section 8.01, and
such instructions shall be binding upon all Lender Parties and all holders of
Notes; provided, however, that the Administrative Agent shall not be required
to take any action
96
that exposes the Administrative Agent to personal liability or that is
contrary to this Agreement or applicable law. To the extent permitted in the
Security Agreement and the Mortgages, the Administrative Agent may release
any assets permitted to be sold, leased, transferred or otherwise disposed of
pursuant to the terms hereof. The Administrative Agent agrees to give to
each Lender Party prompt notice of each notice given to it by the Borrower
pursuant to the terms of this Agreement.
(b) The Administrative Agent shall also act as the "collateral
agent" under the Loan Documents, and each Lender Party (in its capacity as a
Lender and a Secured Party) hereby appoints and authorizes the Administrative
Agent to act as the agent of such Lender Party for purposes of acquiring,
holding and enforcing any and all Liens on Collateral granted by any of the
Loan Parties to secure any of the Secured Obligations, together with such
powers and discretion as are reasonably incidental thereto. The
Administrative Agent may from time to time in its discretion appoint any of
the other Lender Party or any of the Affiliates of a Lender Party to act as
its co-agent or sub-agent for purposes of holding or enforcing any Lien on
the Collateral (or any portion thereof) granted under the Collateral
Documents or of exercising any rights and remedies thereunder at the
direction of the Administrative Agent. In this connection, the
Administrative Agent, as "collateral agent", and such co-agents and sub-
agents shall be entitled to the benefits of all provisions of this Article
VII (including, without limitation, Section 7.05, as though such co-agents or
sub-agents were the "collateral agent" under the Loan Documents) as if set
forth in full herein with respect thereto.
(c) The Arranger shall have no powers or discretion under this
Agreement or any of the other Loan Documents other than those bestowed upon
it as a co-agent or sub-agent from time to time by the Administrative Agent
pursuant to subsection (b) of this Section 7.01, and each Lender Party hereby
acknowledges that the Arranger has no liability under this Agreement or any
of the other Loan Documents.
SECTION 7.02. Agent's Reliance, Etc. Neither the Administrative
Agent nor any of its directors, officers, agents or employees shall be liable
for any action taken or omitted to be taken by it or them under or in
connection with the Loan Documents, except for its or their own gross
negligence or willful misconduct. Without limitation of the generality of
the foregoing, the Administrative Agent: (a) may treat the payee of any Note
as the holder thereof until the Administrative Agent receives and accepts an
Assignment and Acceptance entered into by the Lender that is the payee of
such Note, as assignor, and an Eligible Assignee, as assignee, as provided in
Section 8.07; (b) may consult with legal counsel (including counsel for any
Loan Party), independent public accountants and other experts selected by it
with reasonable care and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts; (c) makes no warranty or representation to
any Lender Party and shall not be responsible to any Lender Party for any
statements, warranties or representations (whether written or oral) made in
or in connection with the Loan Documents; (d) shall not have any duty to
ascertain or to inquire as to the performance or observance of any of the
terms, covenants or conditions of any Loan Document on the part of any Loan
Party or to inspect the property (including the books and records) of any
Loan Party; (e) shall not be responsible to any Lender Party for the due
execution, legality, validity, enforceability, genuineness, sufficiency or
value of, or the perfection or priority of any lien or security interest
created or purported to be created under or in connection with, any Loan
97
Document or any other instrument or document furnished pursuant thereto; and
(f) shall incur no liability under or in respect of any Loan Document by
acting upon any notice, consent, certificate or other instrument or writing
(which may be by telegram, telecopy or telex) believed by it to be genuine
and signed or sent by the proper party or parties.
SECTION 7.03. Bank of America and Affiliates. With respect to its
Commitments, the Advances made by it and the Notes issued to it, Bank of
America shall have the same rights and powers under the Loan Documents as any
other Lender Party and may exercise the same as though it were not the
Administrative Agent; and the term "Lender Party" or "Lenders Parties" shall,
unless otherwise expressly indicated, include Bank of America in its
individual capacity. Bank of America and its affiliates may accept deposits
from, lend money to, act as trustee under indentures of, accept investment
banking engagements from and generally engage in any kind of business with,
any Loan Party, any of its Subsidiaries and any Person who may do business
with or own securities of any Loan Party or any such Subsidiary, all as if
Bank of America were not the Administrative Agent and without any duty to
account therefor to the Lender Parties.
SECTION 7.04. Lender Party Credit Decision. Each Lender Party
acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender Party and based on the financial
statements referred to in Section 4.01 and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender Party also acknowledges
that it will, independently and without reliance upon the Administrative
Agent or any other Lender Party and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement.
SECTION 7.05. Indemnification. Each Lender Party severally
agrees to indemnify the Administrative Agent (to the extent not promptly
reimbursed by the Borrower) from and against such Lender Party's ratable
share (determined as provided below) of any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever that may be imposed on,
incurred by, or asserted against the Administrative Agent in any way relating
to or arising out of the Loan Documents or any action taken or omitted by the
Administrative Agent under the Loan Documents; provided, however, that no
Lender Party shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Administrative Agent's gross
negligence or willful misconduct. Without limitation of the foregoing, each
Lender Party agrees to reimburse the Administrative Agent promptly upon
demand for its ratable share of any costs and expenses (including, without
limitation, reasonable fees and expenses of counsel) payable by the Borrower
under Section 8.04, to the extent that the Administrative Agent is not
promptly reimbursed for such costs and expenses by the Borrower. For
purposes of this Section 7.05(a), the Lender Parties' respective ratable
shares of any amount shall be determined, at any time, according to the sum
of (a) the aggregate principal amount of the Advances outstanding at such
time and owing to the respective Lender Parties, (b) their respective Pro
Rata Shares of the aggregate Available Amount of all Letters of Credit
outstanding at such time, (c) the aggregate unused portions of their
respective Term Commitments at such time and (d) their respective Unused
Working Capital Commitments at such time; provided, that the aggregate
principal amount of Swing Line Advances owing to the
98
Swing Line Bank and of Letter of Credit Advances owing to the Issuing Bank
shall be considered to be owed to the Working Capital Lenders ratably in
accordance with their respective Working Capital Commitments. In the event
that any Defaulted Advance shall be owing by any Defaulting Lender at any
time, such Lender Party's Commitment with respect to the Facility under which
such Defaulted Advance was required to have been made shall be considered to
be unused for purposes of this Section 7.05(a) to the extent of the amount of
such Defaulted Advance. The failure of any Lender Party to reimburse the
Administrative Agent promptly upon demand for its ratable share of any amount
required to be paid by the Lender Party to the Administrative Agent as
provided herein shall not relieve any other Lender Party of its obligation
hereunder to reimburse the Administrative Agent for its ratable share of such
amount, but no Lender Party shall be responsible for the failure of any other
Lender Party to reimburse the Administrative Agent for such other Lender
Party's ratable share of such amount. Without prejudice to the survival of
any other agreement of any Lender Party hereunder, the agreement and
obligations of each Lender Party contained in this Section 7.05(a) shall
survive the payment in full of principal, interest and all other amounts
payable hereunder and under the other Loan Documents.
(b) Each Lender Party severally agrees to indemnify the Issuing Bank
(to the extent not promptly reimbursed by the Borrower) from and against such
Lender Party's ratable share (determined as provided below) of any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever that
may be imposed on, incurred by, or asserted against the Issuing Bank in any
way relating to or arising out of the Loan Documents or any action taken or
omitted by the Issuing Bank under the Loan Documents; provided, however, that
no Lender Party shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Issuing Bank's gross negligence
or willful misconduct. Without limitation of the foregoing, each Lender
Party agrees to reimburse the Issuing Bank promptly upon demand for its
ratable share of any costs and expenses (including, without limitation,
reasonable fees and expenses of counsel) payable by the Borrower under
Section 8.04, to the extent that the Issuing Bank is not promptly reimbursed
for such costs and expenses by the Borrower. For purposes of this Section
7.05(b), the Lender Parties' respective ratable shares of any amount shall be
determined, at any time, according to the sum of (a) the aggregate principal
amount of the Advances outstanding at such time and owing to the respective
Lender Parties, (b) their respective Pro Rata Shares of the aggregate
Available Amount of all Letters of Credit outstanding at such time, (c) the
aggregate unused portions of their respective Term Commitments at such time
plus (d) their respective Unused Working Capital Commitments at such time;
provided that the aggregate principal amount of Swing Line Advances owing to
the Swing Line Bank and Letter of Credit Advances owing to the Issuing Bank
shall be considered to be owed to the Working Capital Lenders ratably in
accordance with their respective Working Capital Commitments. The failure of
any Lender Party to reimburse the Issuing Bank promptly upon demand for its
ratable share of any amount required to be paid by the Lender Parties to the
Issuing Bank as provided herein shall not relieve any other Lender Party of
its obligation hereunder to reimburse the Issuing Bank for its ratable share
of such amount, but no Lender Party shall be responsible for the failure of
any other Lender Party to reimburse the Issuing Bank for such other Lender
Party's ratable share of such amount. Without prejudice to the survival of
any other agreement of any Lender Party hereunder, the agreement and
obligations of each Lender Party contained in this Section 7.05(b) shall
survive the payment in
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full of principal, interest and all other amounts payable hereunder and under
the other Loan Documents.
SECTION 7.06. Successor Agents. The Administrative Agent may resign
as to any or all of the Facilities at any time by giving written notice
thereof to the Lender Parties and the Borrower and may be removed as to all
of the Facilities at any time with or without cause by the Required Lenders.
Upon any such resignation or removal, the Required Lenders shall have the
right to appoint a successor Administrative Agent as to such of the
Facilities as to which the Administrative Agent has resigned or been removed.
If no successor Administrative Agent shall have been so appointed by the
Required Lenders, and shall have accepted such appointment, within 30 days
after the retiring Administrative Agent's giving of notice of resignation or
the Required Lenders' removal of the retiring Administrative Agent, then the
retiring Administrative Agent may, on behalf of the Lender Parties, appoint
a successor Administrative Agent, which shall be a commercial bank organized
under the laws of the United States or of any State thereof and having a
combined capital and surplus of at least $250,000,000. Upon the acceptance
of any appointment as Administrative Agent hereunder by a successor
Administrative Agent as to all of the Facilities and upon the execution and
filing or recording of such financing statements, or amendments thereto, and
such amendments or supplements to the Mortgages, and such other instruments
or notices, as may be necessary or desirable, or as the Required Lenders may
request, in order to continue the perfection of the Liens granted or
purported to be granted by the Collateral Documents, such successor
Administrative Agent shall succeed to and become vested with all the rights,
powers, discretion, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its
duties and obligations under the Loan Documents. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent as to less than all of the Facilities and upon the execution and filing
or recording of such financing statements, or amendments thereto, and such
amendments or supplements to the Mortgages, and such other instruments or
notices, as may be necessary or desirable, or as the Required Lenders may
request, in order to continue the perfection of the Liens granted or
purported to be granted by the Collateral Documents, such successor
Administrative Agent shall succeed to and become vested with all the rights,
powers, discretion, privileges and duties of the retiring Administrative
Agent as to such Facilities, other than with respect to funds, transfers and
other similar aspects of the administration of borrowings under such
Facilities, issuance of Letters of Credit (notwithstanding any resignation as
Administrative Agent with respect to the Letter of Credit Facility) and
payments by the Borrower in respect of such Facilities, and the retiring
Administrative Agent shall be discharged from its duties and obligations
under this Agreement as to such Facilities, other than as aforesaid. If
within 45 days after written notice is given of the retiring Administrative
Agent's resignation or removal under this Section 7.06 no successor
Administrative Agent shall have been appointed and shall have accepted such
appointment, then on such 45th day (a) the retiring Administrative Agent's
resignation or removal shall become effective, (b) the retiring
Administrative Agent shall thereupon be discharged from its duties and
obligations under the Loan Documents and (c) the Required Lenders shall
thereafter perform all duties of the retiring Administrative Agent under the
Loan Documents until such time, if any, as the Required Lenders appoint a
successor Administrative Agent as provided above. After any retiring
Administrative Agent's resignation or removal hereunder as Administrative
Agent, the provisions of this Article VII shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was Administrative
Agent under this Agreement.
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ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the Notes or any other Loan Document, nor
consent to any departure by any Loan Party therefrom, shall in any event be
effective unless the same shall be in writing and signed (or, in the case of
the Collateral Documents, consented to) by the Required Lenders, and then
such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given; provided, however, that (a) no
amendment, waiver or consent shall, unless in writing and signed by all of
the Lenders (other than any Lender Party that is, at such time, a Defaulting
Lender), do any of the following at any time: (i) except as provided in
Section 3.03, waive any of the conditions specified in Section 3.01 or, in
the case of the Initial Extension of Credit, Section 3.02, (ii) change the
number of Lenders or the percentage of (x) the Commitments, (y) the aggregate
unpaid principal amount of the Advances or (z) the aggregate Available Amount
of outstanding Letters of Credit that, in each case, shall be required for
the Lenders or any of them to take any action hereunder, (iii) except in
connection with actions permitted by Section 5.02(d), reduce or limit the
obligations of any Subsidiary Guarantor under Section 1 of the Subsidiary
Guaranty or release any Subsidiary Guarantor or otherwise limit a Subsidiary
Guarantor's liability with respect to the Obligations owing to the
Administrative Agent and the Lender Parties, (iv) except for the release of
up to $10 million fair market value of real property and related assets
(which real properties shall be reasonably acceptable to the Required
Lenders) in connection with the Debt permitted by Section 5.02(b), release
any material portion of the Collateral in any transaction or series of
related transactions or permit the creation, incurrence, assumption or
existence of any Lien on all or substantially all of the Collateral in any
transaction or series of related transactions to secure any Obligations other
than Obligations owing to the Secured Parties under the Loan Documents and
other than Debt owing to any other Person, provided that, in the case of the
creation, incurrence, assumption or existence of any Lien on any material
portion of the Collateral to secure Debt owing to any other Person, (A) the
Borrower shall, on the date such Debt shall be incurred or issued, prepay the
Advances pursuant to, and in the order of priority set forth in, Section
2.06(b)(ii) in an aggregate principal amount equal to the amount of the Net
Cash Proceeds received by the Borrower or any of its Subsidiaries to the
extent required to do so under Section 2.06(b)(ii), (B) such Lien shall be
subordinated to the Liens created under the Loan Documents on terms
acceptable to the Required Lenders and (C) the Required Lenders shall
otherwise permit the creation, incurrence, assumption or existence of such
Lien and, to the extent not otherwise permitted under Section 5.02(b), of
such Debt or (v) amend this Section 8.01, (b) no amendment, waiver or consent
shall, unless in writing and signed by the Required Lenders and each Lender
that has a Commitment under either Term Facility or Working Capital Facility
if affected by such amendment, waiver or consent, (i) increase the
Commitments of such Lender or subject such Lender to any additional
obligations, (ii) reduce the principal of, or interest on, the Notes held by
such Lender or any fees or other amounts payable hereunder to such Lender,
(iii) postpone any date fixed for any payment of principal of, or interest
on, the Notes held by such Lender or any fees or other amounts payable
hereunder to such Lender (including, without limitation, the scheduled
amortization payments set forth in Section 2.04) or (iv) waive, amend or
change the order of application of any prepayment set forth in Section 2.06
in any manner that materially affects such Lender; provided further that no
amendment, waiver or consent shall, unless in writing and
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signed by the Swing Line Bank or the Issuing Bank, as the case may be, in
addition to the Lenders required above to take such action, affect the rights
or obligations of the Swing Line Bank or of the Issuing Bank, as the case may
be, under this Agreement; and provided further that no amendment, waiver or
consent shall, unless in writing and signed by the Administrative Agent in
addition to the Lenders required above to take such action, affect the rights
or duties of the Administrative Agent under this Agreement or the other Loan
Documents and (c) without the consent of the Supermajority Lenders, no
amendment, waiver or consent shall (i) permit the creation, incurrence,
assumption or existence of any Lien on any of the Collateral in any
transaction or series of related transactions to secure Obligations in
respect of any Debt (including the Term C Facility) on a pari passu basis
with all other Obligations owing to the Secured Parties under the Loan
Documents, (ii) permit the release of any Collateral (other than (x) in the
ordinary course of business and (y) the release of up to $10 million fair
market value of real property and related assets (which real properties shall
be reasonably acceptable to the Required Lenders) in connection with the Debt
permitted by Section 5.02(b)) which secures the Working Capital Facility and
the Term B Facility or (iii) increase the aggregate amount of the Working
Capital Facility and the Term B Facility above the aggregate amount of
$105,000,000.
SECTION 8.02. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopy
or telex communication) and mailed, telegraphed, telecopied, telexed or
delivered, if to the Borrower, at its address at 0000 Xxx Xxxx Xxxx,
Xxxxxxxxx, Xxxxxxxxx 00000 (Telecopier No.: (000) 000-0000, Attention: X.
X. XxXxxxxx, Xx.; if to any Initial Lender or the Initial Issuing Bank, at
its Domestic Lending Office specified opposite its name on Schedule I hereto;
if to any other Lender Party, at its Domestic Lending Office specified in the
Assignment and Acceptance pursuant to which it became a Lender Party; and if
to the Administrative Agent, at its address at 000 Xxxxx Xxxxx Xxxxxx,
Xxxxxxxxxxxx Xxxxxx, Xxxxxxxxx, XX 00000, Attention: Corporate Credit
Services, Ref: Captain D's; or, as to each party, at such other address as
shall be designated by such party in a written notice to the other parties
or, as to the Borrower or the Administrative Agent, at such other address as
shall be designated by such party in a written notice to the other parties
and, as to each other party, at such other address as shall be designated by
such party in a written notice to the Borrower and the Administrative Agent.
All such notices and other communications shall, when mailed, telegraphed,
telecopied or telexed, be effective three days after being deposited in the
mails, or, if sent by overnight courier, on the first Business Day following
the day of delivery to the overnight courier, or when delivered to the
telegraph company, transmitted by telecopier or confirmed by telex
answerback, respectively, except that notices and communications to the
Administrative Agent pursuant to Article II, III or VII shall not be
effective until received by the Administrative Agent. Delivery by telecopier
of an executed counterpart of any amendment or waiver of any provision of
this Agreement or the Notes or of any Exhibit hereto to be executed and
delivered hereunder shall be effective as delivery of a manually executed
counterpart thereof.
SECTION 8.03. No Waiver; Remedies. No failure on the part of any
Lender Party or the Administrative Agent to exercise, and no delay in
exercising, any right hereunder or under any Note shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right preclude
any other or further exercise thereof or the exercise of any other right.
The remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
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SECTION 8.04. Costs, Expenses. (a) The Borrower agrees to pay on
demand (i) all reasonable costs and expenses of the Administrative Agent in
connection with the preparation, execution, delivery, administration,
modification and amendment of the Loan Documents (including, without
limitation, (A) all due diligence, collateral review, syndication,
transportation, computer, duplication, appraisal, audit, insurance,
consultant, search, filing and recording fees and expenses and (B) the
reasonable fees and expenses of counsel for the Administrative Agent with
respect thereto, with respect to advising the Administrative Agent as to its
rights and responsibilities, or the perfection, protection or preservation of
rights or interests, under the Loan Documents, with respect to negotiations
with any Loan Party or with other creditors of any Loan Party or any of its
Subsidiaries arising out of any Default or any events or circumstances that
may give rise to a Default and with respect to presenting claims in or
otherwise participating in or monitoring any bankruptcy, insolvency or other
similar proceeding involving creditors' rights generally and any proceeding
ancillary thereto) and (ii) all reasonable costs and expenses of the
Administrative Agent and the Lender Parties in connection with the
enforcement of the Loan Documents, whether in any action, suit or litigation,
any bankruptcy, insolvency or other similar proceeding affecting creditors'
rights generally (including, without limitation, the reasonable fees and
expenses of counsel for the Administrative Agent and each Lender Party with
respect thereto).
(b) The Borrower agrees to indemnify, defend and save and hold
harmless the Administrative Agent, the Arranger, each Lender Party and each
of their Affiliates and their officers, directors, trustees, employees,
agents and advisors (each, an "Indemnified Party") from and against, and
shall pay on demand, any and all claims, damages, losses, liabilities and
expenses (including, without limitation, reasonable fees and expenses of
counsel) that may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or by
reason of (including, without limitation, in connection with any
investigation, litigation, settlement or proceeding or preparation of a
defense in connection therewith) (i) the Facilities, the actual or proposed
use of the proceeds of the Advances or the Letters of Credit, the Transaction
Documents, the Transaction or any of the transactions contemplated thereby,
or (ii) the actual or alleged presence of Hazardous Materials on any property
of any Loan Party or any of its Subsidiaries or any Environmental Action
relating in any way to any Loan Party or any of its Subsidiaries, except to
the extent such claim, damage, loss, liability or expense is found in a
final, non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party's gross negligence or willful
misconduct. In the case of an investigation, litigation, settlement or other
proceeding to which the indemnity in this Section 8.04(b) applies, such
indemnity shall be effective whether or not such investigation, litigation,
settlement or proceeding is brought by any Loan Party, its directors,
shareholders or creditors or an Indemnified Party or whether or not any
Indemnified Party is otherwise a party thereto and whether or not the
Transaction or the transactions contemplated hereby are consummated. The
Borrower also agrees not to assert any claim against any Indemnified Party on
any theory of liability (whether direct or indirect, in contract or tort or
otherwise) to the Borrower or any of its Subsidiaries or Affiliates or to any
security holders or creditors of the Borrower or any of its Subsidiaries
arising out of, related to or in connection with the Facilities, the actual
or proposed use of the proceeds of the Advances or the Letters of Credit, or
the Transaction or the transactions contemplated under the Transaction
Documents, except for direct, as opposed to consequential, damages determined
in a final
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nonappealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party's gross negligence or willful misconduct.
(c) If any payment of principal of, or Conversion of, any Eurodollar
Rate Advance is made by the Borrower to or for the account of a Lender Party
other than on the last day of the Interest Period for such Advance, as a
result of a payment or Conversion pursuant to Section 2.06, 2.09(b)(i) or
2.10(d), acceleration of the maturity of the Notes pursuant to Section 6.01
or for any other reason, or by an Eligible Assignee to a Lender Party other
than on the last day of the Interest Period for such Advance upon an
assignment of rights and obligations under this Agreement pursuant to Section
8.07, or if such Borrower fails to make any payment or prepayment of an
Advance for which a notice of prepayment has been given or that is otherwise
required to be made, whether pursuant to Section 2.04, 2.06 or 6.01 or
otherwise the Borrower shall, upon demand by such Lender Party (with a copy
of such demand to the Administrative Agent), pay to the Administrative Agent
for the account of such Lender Party any amounts required to compensate such
Lender Party for any additional losses, costs or expenses that it may
reasonably incur as a result of such payment or Conversion or such failure to
pay or prepay, as the case may be, including, without limitation, any loss
(including loss of anticipated profits), cost or expense incurred by reason
of the liquidation or reemployment of deposits or other funds acquired by any
Lender Party to fund or maintain such Advance.
(d) If any Loan Party fails to pay when due any costs, expenses or
other amounts payable by it under any Loan Document, including, without
limitation, fees and expenses of counsel and indemnities, such amount may be
paid on behalf of such Loan Party by the Administrative Agent or any Lender
Party, in its sole discretion.
(e) Without prejudice to the survival of any other agreement of any
Loan Party hereunder or under any other Loan Document, the agreements and
obligations of the Borrower contained in Sections 2.10 and 2.12 and this
Section 8.04 shall survive the payment in full of principal, interest and all
other amounts payable hereunder and under any of the other Loan Documents.
SECTION 8.05. Right of Set-off. Upon (a) the occurrence and during
the continuance of any Event of Default and (b) the making of the request or
the granting of the consent specified by Section 6.01 to authorize the
Administrative Agent to declare the Notes due and payable pursuant to the
provisions of Section 6.01, the Administrative Agent and each Lender Party
and each of their respective Affiliates is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and
otherwise apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time
owing by the Administrative Agent or such Lender Party or such Affiliate to
or for the credit or the account of the Borrower against any and all of the
Obligations of the Borrower now or hereafter existing under the Loan
Documents, irrespective of whether the Administrative Agent or such Lender
Party shall have made any demand under this Agreement or such Note or Notes
and although such Obligations may be unmatured. The Administrative Agent and
each Lender Party agrees promptly to notify the Borrower after any such
setoff and application; provided, however, that the failure to give such
notice shall not affect the validity of such setoff and application. The
rights of the Administrative Agent and each Lender Party and its respective
Affiliates under this Section are in addition to other rights and remedies
(including,
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without limitation, other rights of setoff) that the Administrative Agent,
such Lender Party and their respective Affiliates may have.
SECTION 8.06. Binding Effect. This Agreement shall become effective
when it shall have been executed by the Borrower and the Administrative Agent
and when the Administrative Agent shall have been notified by each Initial
Lender Party that such Initial Lender Party has executed it and thereafter
shall be binding upon and inure to the benefit of the Borrower, the
Administrative Agent and each Lender Party and their respective successors
and assigns, except that the Borrower shall not have the right to assign its
rights hereunder or any interest herein without the prior written consent of
the Lender Parties.
SECTION 8.07. Assignments and Participations. (a). Each Lender may
assign to one or more Eligible Assignees all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Commitment or Commitments, the Advances owing to it and the
Note or Notes held by it); provided, however, that (i) each such assignment
shall be of a uniform, and not a varying, percentage of all rights and
obligations under and in respect of one or more of the Facilities, (ii)
except in the case of an assignment to a Person that, immediately prior to
such assignment, was a Lender, an Affiliate of any Lender or any Approved
Fund of any Lender or an assignment of all of a Lender's rights and
obligations under this Agreement, the amount of the Commitment of the
assigning Lender being assigned pursuant to each such assignment (determined
as of the date of the Assignment and Acceptance with respect to such
assignment) shall in no event be less than $5,000,000, unless otherwise
agreed by the Administrative Agent and the Borrower, (iii) each such
assignment shall be to an Eligible Assignee, (iv) no such assignments shall
be permitted without the consent of the Administrative Agent (which consent
shall not be unreasonably withheld) until the earlier of (A) 30 Business Days
following the Closing Date and (B) the date on which the Administrative Agent
shall have notified the Lender Parties that syndication of the Commitments
hereunder has been completed, and (v) the parties to each such assignment
shall execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance, together with any
Note or Notes subject to such assignment and a processing and recordation fee
of $3,500.
(b) Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in such Assignment and Acceptance, (x) the
assignee thereunder shall be a party hereto and, to the extent that rights
and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, have the rights and obligations of a Lender or
Issuing Bank, as the case may be, hereunder and (y) the Lender or Issuing
Bank assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights (other than its rights under Sections 2.10,
2.12 and 8.04 (and other similar provisions of the other Loan Documents that
are specified under the terms of such other Loan Documents to survive the
payment in full of the Obligations of the Loan Parties under or in respect of
the Loan Documents) to the extent any claim thereunder relates to an event
arising prior to such assignment) and be released from its obligations under
this Agreement (and, in the case of an Assignment and Acceptance covering all
of the remaining portion of an assigning Lender's or Issuing Bank's rights
and obligations under this Agreement, such Lender or Issuing Bank shall cease
to be a party hereto).
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(c) By executing and delivering an Assignment and Acceptance, each
Lender Party assignor thereunder and each assignee thereunder confirm to and
agree with each other and the other parties thereto and hereto as follows:
(i) other than as provided in such Assignment and Acceptance, such assigning
Lender Party makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with any Loan Document or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of, or the
perfection or priority of any lien or security interest created or purported
to be created under or in connection with any Loan Document or any other
instrument or document furnished pursuant thereto; (ii) such assigning Lender
Party makes no representation or warranty and assumes no responsibility with
respect to the financial condition of the Borrower or any other Loan Party or
the performance or observance by any Loan Party of any of its obligations
under any Loan Document or any other instrument or document furnished
pursuant thereto; (iii) such assignee confirms that it has received a copy of
this Agreement, together with copies of the financial statements referred to
in Section 4.01 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon the Administrative Agent, such assigning Lender Party or any
other Lender Party and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (v) such assignee confirms
that it is an Eligible Assignee; (vi) such assignee appoints and authorizes
the Administrative Agent to take such action as agent on its behalf and to
exercise such powers and discretion under the Loan Documents as are delegated
to the Administrative Agent by the terms hereof and thereof, together with
such powers and discretion as are reasonably incidental thereto; and (vii)
such assignee agrees that it will perform in accordance with their terms all
of the obligations which by the terms of this Agreement are required to be
performed by it as a Lender or Issuing Bank, as the case may be.
(d) The Administrative Agent, acting for this purpose (but only for
this purpose) as the agent of the Borrower, shall maintain at its address
referred to in Section 8.02 a copy of each Assignment and Acceptance
delivered to and accepted by it and a register for the recordation of the
names and addresses of the Lender Parties and the Commitment of, and
principal amount of the Advances owing to, each Lender Party from time to
time (the "Register"). The entries in the Register shall be conclusive and
binding for all purposes, absent manifest error, and the Borrower, the
Administrative Agent and the Lender Parties shall treat each Person whose
name is recorded in the Register as a Lender Party hereunder for all purposes
of this Agreement. The Register shall be available for inspection by the
Borrower or any Lender Party at any reasonable time and from time to time
upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender Party and an assignee, together with any Note or Notes
subject to such assignment, the Administrative Agent shall, if such
Assignment and Acceptance has been completed and is in substantially the form
of Exhibit C hereto, (i) accept such Assignment and Acceptance, (ii) record
the information (the "Ownership Information") contained therein in the
Register and (iii) give prompt notice thereof to the Borrower. Any transfer
of an ownership interest in any Advance, including any right to principal or
interest payable with respect to the Advance, shall be subject to and
conditioned upon the due recordation of such transfer and the Ownership
Information with respect to the transferee in the Register and such transfer
shall be effective only upon
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such recordation (and not prior thereto). In the case of any assignment by
a Lender, within five Business Days after its receipt of such notice, the
Borrower, at its own expense, shall execute and deliver to the Administrative
Agent in exchange for the surrendered Note or Notes a new Note to the order
of such Eligible Assignee in an amount equal to the Commitment assumed by it
pursuant to such Assignment and Acceptance and, if the assigning Lender has
retained a Commitment hereunder, a new Note to the order of the assigning
Lender in an amount equal to the Commitment retained by it hereunder. Such
new Note or Notes shall be in an aggregate principal amount equal to the
aggregate principal amount of such surrendered Note or Notes, shall be dated
the effective date of such Assignment and Acceptance and shall otherwise be
in substantially the form of Exhibit X-0, X-0 or A-3 hereto, as the case may
be.
(f) The Issuing Bank may assign to an Eligible Assignee all of its
rights and obligations under the undrawn portion of its Letter of Credit
Commitment at any time; provided, however, that (i) each such assignment
shall be to an Eligible Assignee and (ii) the parties to each such assignment
shall execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance, together with a
processing and recordation fee of $3,500.
(g) Each Lender Party may sell participations to one or more Persons
(other than any Loan Party or any of its Affiliates) in or to all or a
portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitments, the Advances owing
to it and the Note or Notes (if any) held by it); provided, however, that (i)
such Lender Party's obligations under this Agreement (including, without
limitation, its Commitments) shall remain unchanged, (ii) such Lender Party
shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) such Lender Party shall remain the
holder of any such Note for all purposes of this Agreement, and (iv) the
Borrower, the Administrative Agent and the other Lender Parties shall
continue to deal solely and directly with such Lender Party in connection
with such Lender Party's rights and obligations under this Agreement and (v)
no participant under any such participation shall have any right to approve
any amendment or waiver of any provision of any Loan Document, or any consent
to any departure by any Loan Party therefrom, except to the extent that such
amendment, waiver or consent would reduce the principal of, or interest on,
the Notes or any fees or other amounts payable hereunder, in each case to the
extent subject to such participation, postpone any date fixed for any payment
of principal of, or interest on, the Notes or any fees or other amounts
payable hereunder, in each case to the extent subject to such participation,
or release all or substantially all of the Collateral or release any of the
Subsidiary Guarantors from any of their Obligations under the Loan Documents.
(h) Any Lender Party may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this
Section 8.07, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower furnished to such
Lender Party by or on behalf of the Borrower; provided, however, that, prior
to any such disclosure, the assignee or participant or proposed assignee or
participant shall agree to preserve the confidentiality of any Confidential
Information received by it from such Lender Party.
107
(i) Notwithstanding any other provision set forth in this Agreement,
any Lender Party may (without the consent of the Administrative Agent or the
Borrower) at any time (i) create a security interest in all or any portion of
its rights under this Agreement (including, without limitation, the Advances
owing to it and the Note or Notes held by it) in favor of any Federal Reserve
Bank in accordance with Regulation A of the Board of Governors of the Federal
Reserve System, or (ii) pledge its interest in all or any portion of its
rights under this Agreement to its trustee in support of its obligations to
such trustee.
SECTION 8.08. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of an originally
executed counterpart of this Agreement.
SECTION 8.09. No Liability of the Issuing Bank. The Borrower
assumes all risks of the acts or omissions of any beneficiary or transferee
of any Letter of Credit with respect to its use of such Letter of Credit.
Neither the Issuing Bank nor any of its officers or directors shall be liable
or responsible for: (a) the use that may be made of any Letter of Credit or
any acts or omissions of any beneficiary or transferee in connection
therewith; (b) the validity, sufficiency or genuineness of documents, or of
any endorsement thereon, even if such documents should prove to be in any or
all respects invalid, insufficient, fraudulent or forged; (c) payment by the
Issuing Bank against presentation of documents that do not comply with the
terms of a Letter of Credit, including failure of any documents to bear any
reference or adequate reference to the Letter of Credit; or (d) any other
circumstances whatsoever in making or failing to make payment under any
Letter of Credit, except that the Borrower shall have a claim against the
Issuing Bank, and the Issuing Bank shall be liable to the Borrower, to the
extent of any direct, but not consequential, damages suffered by the Borrower
that the Borrower proves were caused by (i) the Issuing Bank's willful
misconduct or gross negligence in determining whether documents presented
under any Letter of Credit comply with the terms of the Letter of Credit or
(ii) the Issuing Bank's willful failure to make lawful payment under a Letter
of Credit after the presentation to it of a draft and certificates strictly
complying with the terms and conditions of the Letter of Credit. In
furtherance and not in limitation of the foregoing, the Issuing Bank may
accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary.
SECTION 8.10. Confidentiality. Neither the Administrative Agent nor
any Lender Party shall disclose any Confidential Information to any Person
without the consent of the Borrower, other than (a) to the Administrative
Agent's or such Lender Party's Affiliates and their officers, directors,
employees, agents and advisors and to actual or prospective Eligible
Assignees and participants, and then only on a confidential basis, (b) as
required by any law, rule or regulation or judicial process, (c) as requested
or required by any state, federal or foreign authority or examiner regulating
such Lender Party, and (d) to any rating agency when required by it, provided
that, prior to any such disclosure, such rating agency shall undertake to
preserve the confidentiality of any Confidential Information relating to the
Loan Parties received by it from such Lender Party.
108
SECTION 8.11. Termination of Voting Trust Agreement. It is hereby
agreed by the parties hereto that in the event of a Permitted Reorganization
the Voting Trust Agreement shall be terminated in the event that (i) the
Borrower shall have become a wholly-owned Subsidiary of a newly formed
holding company (the "Parent") and (ii) the Parent does not hold any Equity
Interests in Shoney's, Inc. or any of its Affiliates (other than the
Borrower).
SECTION 8.12. Jurisdiction, Etc. (a) Each of the parties hereto
hereby irrevocably and unconditionally submits, for itself and its property,
to the nonexclusive jurisdiction of any New York State court or Federal court
of the United States of America sitting in New York City, and any appellate
court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or any of the other Loan Documents to which it is
a party, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims
in respect of any such action or proceeding may be heard and determined in
any such New York State court or, to the fullest extent permitted by law, in
such Federal court. Each of the parties hereto agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided
by law. Nothing in this Agreement shall affect any right that any party may
otherwise have to bring any action or proceeding relating to this Agreement
or any of the other Loan Documents in the courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any
suit, action or proceeding arising out of or relating to this Agreement or
any of the other Loan Documents to which it is a party in any New York State
or federal court. Each of the parties hereto hereby irrevocably waives, to
the fullest extent permitted by law, the defense of an inconvenient forum to
the maintenance of such action or proceeding in any such court.
SECTION 8.13. Governing Law. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 8.14. Waiver of Jury Trial. Each of the Borrower, the
Administrative Agent and the Lender Parties irrevocably waives all right to
trial by jury in any action, proceeding or counterclaim (whether based on
contract, tort or otherwise) arising out of or relating to any of the Loan
Documents, the Advances, the Letters of Credit or the actions of the
Administrative Agent or any Lender Party in the negotiation, administration,
performance or enforcement thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
CAPTAIN D'S, INC.
By /s/ X.X. XxXxxxxx, Xx.
--------------------------------
Title:
BANK OF AMERICA, N.A., as
Administrative Agent
By /s/
---------------------------------
Title: Attorney in Fact
BANC OF AMERICA SECURITIES LLC,
as Arranger
By /s/
---------------------------------
Title: Managing Director
INITIAL ISSUING BANK
BANK OF AMERICA, N.A.,
as Initial Issuing Bank
By /s/
---------------------------------
Title: Attorney in Fact
SWING LINE BANK
BANK OF AMERICA, N.A.,
as Swing Line Bank
By /s/
---------------------------------
Title: Attorney in Fact
INITIAL LENDERS
BANK OF AMERICA, N.A.
By /s/
--------------------------------
Title: Attorney in Fact
XXXXXX XXXXXXX XXXX XXXXXX
PRIME INCOME TRUST
By
--------------------------------
Title:
XXX XXXXXX SENIOR
INCOME TRUST
By: Xxx Xxxxxx Investment
Advisory Corp
By /s/ Xxxxxx X. Xxxxxx
--------------------------------
Title: Xxxxxx X. Xxxxxx
Vice President
XXX XXXXXX SENIOR
FLOATING RATE FUND
By: Xxx Xxxxxx Investment
Advisory Corp
By /s/ Xxxxxx X. Xxxxxx
--------------------------------
Title: Xxxxxx X. Xxxxxx
Vice President
XXX XXXXXX PRIME RATE
INCOME TRUST
By: Xxx Xxxxxx Investment
Advisory Corp
By /s/ Xxxxxx X. Xxxxxx
--------------------------------
Title: Xxxxxx X. Xxxxxx
Vice President
CYPRESSTREE INVESTMENT
MANAGEMENT COMPANY, INC.
As: Attorney-in-Fact and on behalf of First
Allmerica Financial Life Insurance
Company as Portfolio Manager
By /s/ P. Xxxxxxx Xxxx
--------------------------------
Name: P. Xxxxxxx Xxxx
Title: Principal
NORTH AMERICA SENIOR FLOATING
RATE FUND
By: CypressTree Investment Management
Company, Inc. as Portfolio Manager
By /s/ P. Xxxxxxx Xxxx
---------------------------------
Name: P. Xxxxxxx Xxxx
Title: Principal
KZH CYPRESSTREE-1 LLC
By /s/ Xxxxx Xxxx
--------------------------------
Name: Xxxxx Xxxx
Title: Authorized Agent
KZH STERLING LLC
By /s/ Xxxxx Xxxx
-------------------------------
Name: Xxxxx Xxxx
Title: Authorized Agent
XXXXXX XXXXXXX XXXX XXXXXX
PRIME INCOME TRUST
By /s/ Xxxxxx X. Xxxxxxxx
--------------------------------
Title: Xxxxxx X. Xxxxxxxx
Senior Vice President
EXHIBITS AND SCHEDULES OMITTED DUE TO IMMATERIALITY.
