PARTICIPATION AGREEMENT
(Apple South Trust No. 97-1)
Dated as of September 24, 1997
among
APPLE SOUTH, INC.,
as the Lessee,
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity except as expressly provided herein,
but solely as Owner Trustee under Apple South Trust No. 97-1,
SUNTRUST BANK, ATLANTA,
as Holder,
SUNTRUST BANK, ATLANTA,
as Administrative Agent,
and
certain financial institutions from time to time parties hereto,
as Lenders
TABLE OF CONTENTS
SECTION 1. DEFINITIONS; INTERPRETATION OF THIS AGREEMENT................2
1.1 Definitions.........................................2
1.2 Directly or Indirectly..............................2
SECTION 2. FUNDING OF LOANS AND ADVANCES; PURCHASE OF EQUIPMENT;
PARTICIPATION IN THE EQUIPMENT COST; CLOSING; TRANSACTION
COSTS........................................................2
2.1 Funding of Loans and Advances; Purchase.............2
2.2 Participation in Equipment Cost.....................3
2.3 Closing Date; Commencement Dates; Procedures for
Participation.......................................4
2.4 Directions to Owner Trustee and Administrative
Agent; Satisfaction of Conditions...................6
2.5 Expenses; Fees......................................7
SECTION 3. REPRESENTATIONS AND WARRANTIES...............................8
3.1 Representations and Warranties of the Owner Trustee.8
3.2 Representations and Warranties of the Lessee as of
the Closing Date...................................11
3.3 Representations and Warranties of the Lessee as of
Each Commencement Date.............................15
SECTION 4. CLOSING CONDITIONS..........................................16
4.1 Conditions Precedent to the Obligations of Parties
other than the Lessee on the Closing Date..........16
4.2 Conditions Precedent to the Obligations of the
Parties other than the Lessee on each Commencement
Date...............................................18
4.3 Conditions Precedent to the Obligation of the
Lessee on the Closing Date.........................21
4.4 Conditions Precedent to the Obligations of the
Lessee on each Commencement Date...................22
SECTION 5. COVENANTS OF THE LESSEE.....................................23
5.1 Information........................................23
5.2 Inspection of Property, Books and Records..........25
5.3 Adjusted Funded Debt/Adjusted Capitalization Ratio.25
5.4 Minimum Stockholder's Equity.......................25
5.5 Fixed Charge Coverage Ratio........................26
5.6 Total Funded Debt/Cash Flow Coverage Ratio.........26
5.7 Negative Pledge....................................26
5.8 Maintenance of Existence...........................27
5.9 Dissolution........................................27
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5.10 Consolidations, Mergers and Sales of Assets........27
5.11 Investments........................................27
5.12 Compliance with Laws; Payment of Taxes.............30
5.13 Maintenance of Property............................30
5.14 Insurance..........................................30
5.15 Change in Fiscal Year..............................30
5.16 Environmental Notices..............................30
5.17 Environmental Matters..............................31
5.18 Environmental Releases.............................31
5.19 Subsidiary Debt....................................31
5.20 Change of Chief Executive Office...................31
5.21 Lien Searches......................................32
5.22 Classification of Equipment........................32
5.23 Lien Perfection Filings............................32
5.24 Allocation of Equipment Cost among the States
and Counties.......................................32
5.25 UCC Filing Amendments..............................32
SECTION 6. OTHER COVENANTS AND AGREEMENTS..............................33
6.1 Restrictions on Transfer...........................33
6.2 Lessor's Liens Attributable to the Holders.........35
6.3 Lessor's Liens Attributable to the Owner Trustee...36
6.4 Liens Created by the Lenders.......................36
6.5 Liens Created by the Administrative Agent..........37
6.6 Covenants Restricting the Owner Trustee............37
6.7 Covenants of All Parties Regarding Operative
Agreements.........................................39
6.8 Rent Sufficiency...................................39
6.9 Receipts Distribution and Application of Income....39
6.10 Acceleration Upon Certain Events of Default........42
SECTION 7. LESSEE'S INDEMNITIES........................................42
7.1 General Tax Indemnity..............................42
7.2 Special Income Tax Indemnity.......................46
7.3 General Indemnification and Waiver of Certain
Claims.............................................47
SECTION 8. YIELD PROTECTION; TAXES; COMPENSATION.......................49
8.1 Yield Protection Provisions........................49
8.2 Withholding Taxes..................................51
8.3 Compensation.......................................54
SECTION 9. MISCELLANEOUS...............................................54
9.1 Consents...........................................54
9.2 Appointment of Agent...............................54
9.3 Notices............................................55
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9.4 Successors and Assigns.............................56
9.5 Governing Law; Submission To Jurisdiction..........57
9.6 Severability.......................................58
9.7 Counterparts.......................................58
9.8 The Lessee's Right to Quiet Enjoyment..............59
9.9 Limitations of Liability...........................59
9.10 Confidentiality....................................59
9.11 Effectiveness and Survival of Indemnities..........60
9.12 Compliance Certificate.............................60
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ATTACHMENTS
Attachment A - Form of Certificate of Delivery and Acceptance
Attachment B - Form of Compliance Certificate
Attachment C - Form of Assignment and Assumption Agreement
SCHEDULES
Schedule 3.2(h) - List of Subsidiaries
Schedule 5.7 - List of Existing Liens
APPENDIX A - Definitions
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PARTICIPATION AGREEMENT
Apple South Trust No. 97-1
THIS PARTICIPATION AGREEMENT (Apple South Trust No. 97-1) dated as of
September 24, 1997 (as amended, modified, supplemented, restated and for
replaced from time to time, the "Agreement"), is among (i) APPLE SOUTH, INC., a
corporation organized and existing under the Laws of Georgia (herein, together
with its successors and assigns permitted hereunder, called the "Lessee"), (ii)
FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking association
("First Security"), not in its individual capacity except as expressly provided
herein, but solely as Owner Trustee under Apple South Trust No. 97-1 (herein in
such capacity, together with its successors and assigns permitted hereunder,
called the "Owner Trustee"), (iii) SUNTRUST BANK, ATLANTA, a banking corporation
organized and existing under the Laws of Georgia, in its capacity as the holder
of the beneficial interest in the trust estate established under Apple South
Trust No. 97-1 (in such capacity as of the date hereof, the "Holder", and
together with its successors and assigns permitted hereunder, called the
"Holders"), (iv) the financial institutions now and from time to time parties
hereto (each herein in such capacity, together with its successors and assigns
permitted hereunder, called a "Lender" and collectively, the "Lenders"), and (v)
SUNTRUST BANK, ATLANTA, a banking corporation organized and existing under the
laws of Georgia, ("SunTrust"), as collateral agent and administrative agent for
the Lenders and the Holders (in such capacity, the "Administrative Agent").
W I T N E S S E T H:
WHEREAS, concurrently with the execution and delivery of this Agreement,
the Holders have entered into that certain Trust Agreement (Apple South Trust
No. 97-1) dated as of the date hereof (as amended, modified, supplemented,
restated and/or replaced from time to time, the "Trust Agreement") with the
Owner Trustee pursuant to which the Owner Trustee agrees, among other things,
(a) to hold the Trust Estate for the benefit of the Holders thereunder on the
terms specified in the Trust Agreement and (b) subject to the terms and
conditions hereof, to purchase the Equipment from each applicable Seller and
concurrently therewith lease such Equipment to the Lessee;
WHEREAS, pursuant to the terms of the Trust Agreement, the Owner Trustee is
authorized and directed (a) to accept delivery from time to time of any and all
title transfer documents evidencing the purchase of each Unit by the Owner
Trustee, and (b) to execute and deliver the Lease relating to the Equipment
pursuant to which the Owner Trustee agrees to lease to the Lessee, and the
Lessee agrees to lease from the Owner Trustee, each Unit to be delivered on the
applicable Commencement Date, such lease of Equipment to be evidenced by the
execution and delivery of a Lease Schedule or a Lease Replacement Schedule, as
the case may be, to the Lease;
WHEREAS, concurrently with the execution and delivery of this Agreement,
the Owner Trustee has entered into the Loan Agreement with the Lenders and the
Administrative Agent pursuant to which the Owner Trustee agrees, among other
things, to issue the Notes to the Lenders as evidence of the Owner Trustee's
indebtedness in respect of the Loans made under the
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Loan Agreement, which Notes are to be secured by, among other things, the
Equipment and certain of the Lessee's obligations under the Lease;
WHEREAS, the proceeds from the Loans will be applied, together with the
equity contributions made by the Holders pursuant to this Agreement and the
Trust Agreement, to effect the purchase of the Equipment by the Owner Trustee
contemplated hereby.
NOW, THEREFORE, in consideration of the mutual agreements herein contained
and other good and valuable consideration, receipt of which is acknowledged, the
parties hereto agree as follows:
SECTION 1. DEFINITIONS; INTERPRETATION OF THIS AGREEMENT
1.1 Definitions.
The capitalized terms used in this Agreement (including the foregoing
recitals) and not otherwise defined herein shall have the respective meanings
specified in Appendix A hereto, unless the context hereof shall otherwise
require. The "General Provisions" of Appendix A hereto are hereby incorporated
herein by this reference.
1.2 Directly or Indirectly.
Where any provision in this Agreement refers to action to be taken by any
Person, or which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such Person.
SECTION 2. FUNDING OF LOANS AND ADVANCES; PURCHASE OF EQUIPMENT;
PARTICIPATION IN THE EQUIPMENT COST; CLOSING;
TRANSACTION COSTS
2.1 Funding of Loans and Advances; Purchase of Equipment.
The Loans and Holder Advances shall be made, at the request of the Lessee,
on any Commencement Date, in accordance with the terms hereof; provided, it is
understood and agreed that (a) no such Loan or Holder Advance shall be made
subsequent to the Commitment Expiration Date and (b) the aggregate amount of
Loans and Holder Advances requested by the Lessee shall be in an amount of (1)
at least $1,000,000 on the first Commencement Date and (2) at least $3,000,000
on each subsequent Commencement Date, unless the remaining unfunded portion of
the Commitments is less than $3,000,000, in which case the aggregate amount of
Loans and Holders Advances may be the amount of such unfunded portion of the
Commitments.
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Subject to the terms and conditions hereof and on the basis of the
representations and warranties set forth herein, the Owner Trustee agrees to
purchase from the applicable Seller on the applicable Commencement Date the
Units of such Seller described in the applicable Certificate of Delivery and
Acceptance delivered pursuant to Section 2.3(b), and in connection therewith,
the Owner Trustee agrees to pay to such Seller, or at the request of the Lessee
to reimburse the Lessee for, the cost for each such Unit as specified in the
Certificate of Delivery and Acceptance therefor; provided, however, that the
Owner Trustee shall not be obligated to purchase on any Commencement Date any
Unit that is destroyed, damaged, defective, in unsuitable condition or otherwise
unacceptable to the Lessee for lease pursuant to the Lease. Each Seller shall
deliver its respective Units to the Owner Trustee (or its designee) and the
Owner Trustee (or its designee) shall accept such delivery of all the Equipment
on a Commencement Date not later than the Commitment Expiration Date.
2.2 Participation in Equipment Cost.
(a) Subject to the terms and conditions hereof and on the basis of the
representations and warranties set forth herein, on each applicable Commencement
Date, each Holder hereby agrees that it shall participate in the payment of the
Equipment Cost for the Units delivered on such Commencement Date by making a
Holder Advance to the Owner Trustee (payable to the Administrative Agent for the
benefit of the Owner Trustee) in an amount equal to the product of the Equity
Percentage of the aggregate Equipment Cost for the Units delivered on such
Commencement Date and such Holder's Pro Rata Share percentage set forth opposite
such Holder's name on the signature pages of the Trust Agreement (collectively,
the "Aggregate Holder Funded Amount"). The Lessee shall not request, pursuant to
a Certificate of Delivery and Acceptance or otherwise, that the Owner Trustee
obtain a Holder Advance (and the Holders shall have no obligation to make any
Holder Advances regarding any Equipment) in excess of the unused portion of the
Holder Commitments. Each Holder shall pay its respective portion of the
Aggregate Holder Funded Amount required on each applicable Commencement Date to
the Administrative Agent to be held and applied by the Administrative Agent
toward the payment of the Equipment Cost for the Units accepted on such
Commencement Date as provided in Section 2.3.
(b) Subject to the terms and conditions hereof and on the basis of the
representations and warranties set forth herein, on each applicable Commencement
Date, each Lender hereby agrees that it shall participate in the payment of the
Equipment Cost for the Units delivered on such Commencement Date by making a
Loan Advance to the Owner Trustee (payable to the Administrative Agent for the
benefit of the Owner Trustee) in an amount equal to the product of the Debt
Percentage of the aggregate Equipment Cost for the Units delivered on such
Commencement Date and the Lender's Pro Rata Share percentage set forth opposite
such Lender's name on the signature pages of the Loan Agreement (collectively,
the "Aggregate Lender Funded Amount"). The Lessee shall not request, pursuant to
a Certificate of Delivery and Acceptance or otherwise, that the Owner Trustee
obtain a Loan (and the Lenders shall have no obligation to make any Loan
Advances regarding any Equipment) in excess of the unused portion
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of the Lender Commitments. Each Lender shall pay its respective portion of the
Aggregate Lender Funded Amount required on each applicable Commencement Date to
the Administrative Agent to be held and applied by the Administrative Agent
toward the payment of the Equipment Cost for the Units accepted on such
Commencement Date as provided in Section 2.3.
2.3 Closing Date; Commencement Dates; Procedures for Participation.
(a) All documents and instruments required to be delivered on the Closing
Date shall be delivered on or prior to such date at the office of King &
Spalding, 000 Xxxxxxxxx Xxxxxx., X.X., Xxxxxxx, Xxxxxxx 00000 or at such other
location as may be determined by the Owner Trustee, the Administrative Agent and
the Lessee.
(b) Not later than 11:00 A.M., Eastern time, on the fifteenth Business Day
preceding each applicable Commencement Date, the Lessee shall deliver to the
Administrative Agent, on behalf of the Owner Trustee, the Holders and the
Lenders (1) a certificate substantially in the form attached as Attachment A (a
"Certificate of Delivery and Acceptance") setting forth the information
requested therein, including without limitation a requested Commencement Date
and a description of any Units that the Lessee requests be purchased and leased
to it by the Owner Trustee on the Commencement Date (including the location of
each such Unit by county and state) and (2) the original invoices respecting the
Units of Equipment described in such Certificate of Delivery and Acceptance,
which invoices must reference (to the extent available), for each Unit, the
make, model, serial number, and registration number and Equipment Cost of such
Units. Such Certificate of Delivery and Acceptance and original invoices must be
complete in all material respects and in form and substance reasonably
satisfactory to the Administrative Agent in its sole discretion.
(c) If the Certificate of Delivery and Acceptance and original invoices are
reasonably satisfactory to the Administrative Agent in its sole discretion, not
later than 3:00 P.M. Eastern time, three Business Days prior to the applicable
Commencement Date, the Administrative Agent shall deliver to the Holders, the
Owner Trustee and the Lenders, by facsimile or other form of telecommunication
or telephone (to be promptly confirmed in writing), a copy of the Certificate of
Delivery and Acceptance together with a statement prepared by the Administrative
Agent (the "Funding Statement") setting forth (1) the date on which each Lender
shall be obligated to fund its portion of the Aggregate Lender Funded Amount
unless it has notified the Administrative Agent that a condition to funding has
not been met, (2) the Aggregate Holder Funded Amount required to be advanced on
such Commencement Date and each Holder's portion thereof, (3) the Aggregate
Lender Funded Amount required to be advanced on such Commencement Date and each
Lender's portion thereof and (4) the Scheduled Payment Dates and the Base Loan
Installments for such Loan (including the Scheduled Principal Installment and
the Scheduled Interest Installment portions thereof).
(d) Prior to 11:00 A.M., Eastern time on the applicable Commencement Date,
each Holder shall make its respective portion of the Aggregate Holder Funded
Amount required
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to be paid on such Commencement Date available to the Administrative Agent, and
each Lender shall make its respective portion of the Aggregate Lender Funded
Amount for the Equipment Cost required to be paid on such Commencement Date
available to the Administrative Agent, in each case, by transferring or
delivering such amounts, in funds immediately available on such Commencement
Date, to the Administrative Agent. The making available by a Holder or a Lender
of its respective portion of the Aggregate Holder Funded Amount or Aggregate
Lender Funded Amount for the Equipment Cost, as the case may be, shall be deemed
a consent to the terms set forth in the Certificate of Delivery and Acceptance
and the Funding Statement by such Holder or Lender.
(e) Upon receipt by the Administrative Agent on each applicable
Commencement Date of the full amount of the Aggregate Holder Funded Amount and
the Aggregate Lender Funded Amount in respect of the Units delivered on such
Commencement Date, the Administrative Agent on behalf of the Owner Trustee
shall, subject to the conditions set forth in Section 4 having been fulfilled to
the satisfaction of the Owner Trustee, the Holders, the Lenders and the
Administrative Agent or waived by such parties as appropriate, pay to the
applicable Seller, or at the request of the Lessee reimburse the Lessee, from
the funds then held by the Administrative Agent, in immediately available funds,
an amount equal to the Equipment Cost for the Units delivered by the applicable
Seller on such Commencement Date, and simultaneously therewith, (i) the Lessee,
individually and as authorized representative of the Owner Trustee (the making
available by the Holders of the Aggregate Holder Funded Amount to be paid on
such Commencement Date shall constitute their agreement to permit the Lessee to
act as the authorized representative of the Owner Trustee), shall be deemed to
have confirmed acceptance of such Units from the applicable Seller for all
purposes as among the Owner Trustee and the Lessee (except that there shall not
be any waiver of claims by any Person as against the applicable Seller as a
result thereof), such confirmation to be conclusively evidenced by the execution
and delivery by the Lessee or its authorized representative of the Certificate
of Delivery and Acceptance, (ii) the Lessee shall cause to be delivered to the
Owner Trustee (or its designee) all title transfer documents which are legally
sufficient to evidence the purchase and the transfer of good and marketable
title in the Units to the Owner Trustee and (iii) the Owner Trustee shall,
pursuant to the Lease, lease the Units delivered on such Commencement Date to
the Lessee, and the Lessee, pursuant to the Lease, shall accept delivery of the
Units under the Lease (such lease, delivery and acceptance of the Units under
the Lease being conclusively evidenced by the execution and delivery by the
Lessee and the Owner Trustee of a Lease Schedule to the Lease concerning such
Units so delivered). Each of the Lessee, the Holders, the Owner Trustee, the
Lenders and the Administrative Agent hereby agree to take all actions required
to be taken by such party in connection therewith and pursuant to this Section
2.3(e).
(f) If any Lender does not fund its portion of the Aggregate Lender Funded
Amount on any Commencement Date, the Administrative Agent shall, subject to the
conditions set forth in Section 4 having been fulfilled to the satisfaction of
the Owner Trustee, the Holders, the other Lenders and the Administrative Agent
or waived by such parties as appropriate, (i) delete from the Certificate of
Acceptance and Delivery and the Lease Schedule for such
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Commencement Date such Units as it shall deem appropriate in its sole discretion
such that the Equipment Cost for the remaining Units is as close as possible to,
but less than, the portion of the Aggregate Holder Funded Amount and the
Aggregate Lender Funded Amount that the Administrative Agent has received on
such Commencement Date and (ii) pay to the applicable Seller, or at the request
of the Lessee reimburse the Lessee, from the funds then held by the
Administrative Agent, in immediately available funds, an amount equal to the
Equipment Cost for the Units delivered by the applicable Seller on such
Commencement Date (after giving effect to the removal of Units from the
Certificate of Acceptance and Delivery and the Lease Schedule by the
Administrative Agent), and simultaneously therewith, (i) the Lessee,
individually and as authorized representative of the Owner Trustee (the making
available by the Holders of the Aggregate Holder Funded Amount to be paid on
such Commencement Date shall constitute their agreement to permit the Lessee to
act as the authorized representative of the Owner Trustee), shall be deemed to
have confirmed acceptance of such Units from the applicable Seller for all
purposes as among the Owner Trustee and the Lessee (except that there shall not
be any waiver of claims by any Person as against the applicable Seller as a
result thereof), such confirmation to be conclusively evidenced by the execution
and delivery by the Lessee or its authorized representative of the Certificate
of Delivery and Acceptance, as modified by the Administrative Agent, (ii) the
Lessee shall cause to be delivered to the Owner Trustee (or its designee) all
title transfer documents which are legally sufficient to evidence the purchase
and the transfer of good and marketable legal title in such Units to the Owner
Trustee and (iii) the Owner Trustee shall, pursuant to the Lease, lease such
Units delivered on such Commencement Date to the Lessee, and the Lessee,
pursuant to the Lease, shall accept delivery of such Units under the Lease (such
lease, delivery and acceptance of such Units under the Lease being conclusively
evidenced by the execution and delivery by the Lessee and the Owner Trustee of a
Lease Schedule to the Lease (as modified by the Administrative Agent) concerning
such Units so delivered). Each of the Lessee, the Holders, the Owner Trustee,
the Lenders and the Administrative Agent hereby agree to take all actions
required to be taken by such party in connection therewith and pursuant to this
Section 2.3(f). Upon the Administrative Agent's request, the Lessee and the
Owner Trustee agree promptly to execute and deliver to the Administrative Agent
a new Certificate of Acceptance and Delivery and a new Lease Schedule revised to
reflect the deletion of Units from the original Certificate of Acceptance and
Delivery and Lease Schedule by the Administrative Agent.
2.4 Directions to Owner Trustee and Administrative Agent; Satisfaction of
Conditions.
(a) Each Holder agrees that the making available to the Administrative
Agent on each applicable Commencement Date of its respective portion of the
Aggregate Holder Funded Amount for the Units delivered on the corresponding
Commencement Date in accordance with the terms of this Section 2 shall
constitute the direction of such Holder to the Owner Trustee, without further
act, authorization and direction by such Holder to the Owner Trustee, subject,
on such Commencement Date, to the conditions set forth in Section 4 having been
fulfilled to the satisfaction of such Holder or waived by the Required Holders,
to take the actions specified in this Agreement and the Trust Agreement with
respect to the Units on such
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Commencement Date and the corresponding Commencement Date. Such Holder further
agrees that the making available to the Administrative Agent on each applicable
Commencement Date of its respective portion of the Aggregate Holder Funded
Amount for the Units delivered on the corresponding Commencement Date in
accordance with the terms of this Section 2 shall constitute (i) the direction
of such Holder to the Administrative Agent to release to each applicable Seller
or the Lessee (upon its request) its respective portion of the Aggregate Holder
Funded Amount with respect to the Units delivered on the corresponding
Commencement Date and (ii) the agreement of such Holder, without further act,
notice or confirmation, that all conditions set forth in Section 4 were either
met to the satisfaction of such Holder or, if not so met, were waived by it with
respect to the Units; provided, notwithstanding the foregoing, such Holder shall
not be deemed (pursuant to the foregoing provisions) to have waived its right
after such Commencement Date to require the satisfaction of any such condition
for which the Lessee was responsible unless the Required Holders shall have
given the Lessee an express written waiver with respect to any such condition.
(b) Each Lender agrees that the making available to the Administrative
Agent of its respective portion of the Aggregate Lender Funded Amount for the
Units delivered on each applicable Commencement Date in accordance with the
terms of this Section 2 shall constitute the direction of such Lender to the
Administrative Agent, without further act, authorization and direction by such
Lender to the Administrative Agent, subject, on such Commencement Date, to the
conditions set forth in Section 4 having been fulfilled to the satisfaction of
such Lender or waived by the Required Lenders, to take the actions specified in
this Agreement and the Loan Agreement with respect to the Units on such
Commencement Date. Such Lender further agrees that the making available to the
Administrative Agent on each applicable Commencement Date of its respective
portion of the Aggregate Lender Funded Amount for the Units delivered on the
corresponding Commencement Date in accordance with the terms of this Section 2
shall constitute (i) the direction of such Lender to the Administrative Agent to
release to each applicable Seller or the Lessee (upon its request) its
respective portion of the Aggregate Lender Funded Amount with respect to the
Units delivered on the corresponding Commencement Date and (ii) the agreement of
such Lender, without further act, notice or confirmation, that all conditions
set forth in Section 4 were either met to the satisfaction of such Lender or, if
not so met, were waived by it with respect to the Units; provided,
notwithstanding the foregoing, such Lender shall not be deemed (pursuant to the
foregoing provisions) to have waived its right after such Commencement Date to
require the satisfaction of any such condition for which the Lessee was
responsible unless the Required Lenders shall have given the Lessee an express
written waiver with respect to any such condition.
2.5 Expenses; Fees.
(a) Subject to the provisions of Section 2.5(b), the Lessee agrees to pay
when due the reasonable fees, costs and expenses (including, without limitation,
reasonable legal fees and expenses) of the Owner Trustee, the initial Holder and
the Administrative Agent incurred in connection with the negotiation,
documentation and closing of the Overall Transaction and the
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recording, registration and filing of documents from time to time in connection
with the Overall Transaction ("Transaction Costs"). In addition, the Lessee
agrees to pay as Supplemental Rent (i) all reasonable fees, costs and expenses
(including, without limitation, reasonable legal fees and expenses) of the Owner
Trustee and the Administrative Agent from time to time in connection with any
lien searches and UCC financing statements (including preparation and filing
costs) made in connection with Equipment leased hereunder after the Closing
Date, (ii) all fees, costs and expenses (including without limitation,
reasonable legal fees and expenses) of the Owner Trustee, the initial Holder and
the Administrative Agent, and if a Default or Event of Default has occurred and
is continuing, all fees, costs and expenses (including without limitation,
reasonable legal fees and expenses) of all other Holders and the Lenders, from
time to time in connection with (A) any supplements, amendments, modifications
or alterations of any of the Operative Agreements (other than with respect to
such supplements, amendments, modifications, waivers or alterations requested
solely by parties to this Agreement other than the Lessee regarding matters
solely for the benefit of such parties, in which case each other party
requesting such supplement, amendment, modification or alteration shall bear its
own fees, costs and expenses associated with such matter), (B) any enforcement
action, preservation of rights, or exercise of remedies with regard to the
Operative Agreements or the Overall Transaction, and (C) any disposition of any
Unit, (iii) all fees payable to the Owner Trustee in accordance with the Owner
Trustee Fee Schedule, (iv) the ongoing reasonable out-of-pocket fees and
expenses of the Owner Trustee (including, without limitation, reasonable legal
fees and expenses of the Owner Trustee) under the Operative Agreements, (v) the
reasonable fees, costs and expenses of any separate Owner Trustee or co-trustee
appointed pursuant to the Trust Agreement as a result of any requirement of Law
or if otherwise required by any Operative Agreement or if requested or consented
to by the Lessee and (vi) the Administrative Agent's Fee payable in accordance
with the Fee Letter. The Lessee also agrees to pay as Supplemental Rent on the
respective due date therefor from time to time the Commitment Fee.
(b) If the transactions contemplated hereby are not consummated for any
reason, the Lessee shall pay all Transaction Costs.
(c) Notwithstanding the foregoing provisions of this Section 2.5, except as
specifically provided in the Operative Agreements, the Lessee shall have no
liability for any costs or expenses relating to any voluntary transfer by a
Holder of a Certificate or by a Lender of a Note (other than during the
occurrence and continuation of a Lease Event of Default). No such costs or
expenses shall constitute Transaction Costs, and the Lessee will not have any
obligation with respect to the costs and expenses resulting from any such
transfer, whenever occurring.
SECTION 3. REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Owner Trustee.
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The Owner Trustee, both in its individual capacity and as the Owner
Trustee, represents and warrants to the other parties to this Agreement,
notwithstanding the provisions of Section 9.9 or any similar provision in any
other Operative Agreement, that, as of the date hereof:
(a) The Owner Trustee, in its individual capacity, is a national banking
association duly organized and validly existing in good standing under the Laws
of the United States of America, has full power and authority to carry on its
business as now conducted and to enter into and perform its obligations
hereunder and under the Trust Agreement and (assuming due authorization,
execution and delivery of the Trust Agreement by the Holder) has full power and
authority, as the Owner Trustee or, to the extent expressly provided herein or
therein, in its individual capacity, to enter into and perform its obligations
under each of the Owner Trustee Agreements.
(b) The Owner Trustee, in its individual capacity, has duly authorized,
executed and delivered the Trust Agreement and (assuming the due authorization,
execution and delivery of the Trust Agreement by the Holder) the Owner Trustee
in its trust capacity and, to the extent expressly provided therein, in its
individual capacity, has duly authorized, executed and delivered each of the
other Owner Trustee Agreements to be delivered as of the Closing Date; and the
Owner Trustee Agreements each constitute or when entered into will constitute a
legal, valid and binding obligation of the Owner Trustee, in its individual
capacity to the extent such Owner Trustee Agreements relate to the Owner Trustee
in its individual capacity, enforceable against it in its individual capacity in
accordance with its terms except as the same may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar Laws affecting the rights of
creditors generally and by general principles of equity.
(c) Assuming the due authorization, execution and delivery of the Trust
Agreement by the Holders and each of the Owner Trustee Agreements to be
delivered as of the Closing Date by each of the other parties thereto, each of
the Owner Trustee Agreements to which it is a party constitutes, or when entered
into will constitute, a legal, valid and binding obligation of the Owner
Trustee, enforceable against the Owner Trustee, in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar Laws affecting the rights of
creditors generally and by general principles of equity.
(d) Neither the execution and delivery by the Owner Trustee, in its
individual capacity or as the Owner Trustee, as the case may be, of the Owner
Trustee Agreements, nor the consummation by the Owner Trustee, in its individual
capacity or as the Owner Trustee, as the case may be, of any of the transactions
contemplated hereby or thereby, nor the compliance by the Owner Trustee, in its
individual capacity or as the Owner Trustee, as the case may be, with any of the
terms and provisions hereof and thereof, (i) requires or will require any
approval of its stockholders, or approval or consent of any trustees or holders
of any indebtedness or obligations of it in its individual capacity, or (ii)
violates or will violate its organizational documents or bylaws, or contravenes
or will contravene any provision of, or constitutes or will constitute a
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default under, or results or will result in any breach of, any indenture,
mortgage, chattel mortgage, deed of trust, conditional sale contract, bank loan
or credit agreement, license or other agreement or instrument to which the Owner
Trustee in its individual capacity is a party or by which it is bound, or
contravenes or will contravene any Law, governmental rule or regulation of the
State of Utah or of the United States of America governing the banking or trust
powers of the Owner Trustee, or any judgment or order applicable to or binding
on it.
(e) There are no Taxes payable by the Owner Trustee, either in its
individual capacity or as the Owner Trustee, imposed by the State of Utah or any
political subdivision thereof in connection with the execution and delivery by
the Owner Trustee in its individual capacity of the Trust Agreement, and, in its
individual capacity or as the Owner Trustee, as the case may be, of this
Agreement or the other Owner Trustee Agreements solely because the Owners
Trustee in its individual capacity is a national banking association with its
principal place of business in Salt Lake City, Utah and performs certain of its
duties as the Owner Trustee in the State of Utah; and there are no Taxes payable
by the Owner Trustee, in its individual capacity or as the Owner Trustee, as the
case may be, imposed by the State of Utah or any political subdivision thereof
in connection with the acquisition of its interest in the Equipment (other than
franchise or other Taxes based on or measured by any fees or compensation
received by the Owner Trustee for services rendered in connection with the
transactions contemplated hereby) solely because the Owner Trustee in its
individual capacity is a national banking association with its principal place
of business in Salt Lake City, Utah and performs certain of its duties as the
Owner Trustee in the State of Utah.
(f) There are no pending or, to its knowledge, threatened actions or
proceedings against the Owner Trustee, either in its individual capacity or as
the Owner Trustee, before any court or administrative agency which individually
or in the aggregate, if determined adversely to it, would materially adversely
affect the ability of the Owner Trustee, in its individual capacity or as the
Owner Trustee, as the case may be, to perform its obligations under the Trust
Agreement or the other Owner Trustee Agreements.
(g) Its chief executive office, principal place of business and the place
where its records concerning the Equipment and all its interest in, to and under
all documents relating to the Trust Estate are located at 00 Xxxxx Xxxx Xxxxxx,
Xxxx Xxxx Xxxx, Xxxx 00000.
(h) No consent, approval, order or authorization of, giving of notice to,
or registration with, or taking of any other action in respect of, any Utah
state or local governmental authority or agency or any United States federal
governmental authority or agency regulating the banking or trust powers of the
Owner Trustee, in its individual capacity, is required for the execution and
delivery of, or the carrying out by, the Owner Trustee in its individual
capacity or as the Owner Trustee, as the case may be, of any of the transactions
contemplated hereby or by the Trust Agreement or of any of the transactions
contemplated by any of the other Owner Trustee Agreements, other than any such
consent, approval, order, authorization, registration, notice or action as has
been duly obtained, given or taken.
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3.2 Representations and Warranties of the Lessee as of the Closing Date.
The Lessee represents and warrants to the other parties to this Agreement
that, as of the Closing Date:
(a) Each of the Lessee and its Subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, is duly qualified to transact business in
every jurisdiction where, by the nature of its business, such qualification is
necessary, and has all corporate powers and all governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted, except where the failure to so qualify or obtain such licenses,
authorizations, consents or approvals could not be reasonably expected to have
or cause a Material Adverse Effect.
(b) The execution, delivery and performance by the Lessee of this
Agreement, the Lease, and the other Operative Agreements to which it is a party
(i) are within the Lessee's corporate powers, (ii) have been duly authorized by
all necessary corporate action, and, except for such Operative Agreements which
are to be delivered at subsequent Commencement Dates, accepted and delivered,
(iii) require no action by or in respect of or filing with, any governmental
body, agency or official, (iv) do not contravene, or constitute a default under,
any provision of applicable Law or of the articles of incorporation or by-laws
of the Lessee or, to the best of the Lessee's knowledge, of any material
agreement, judgment, injunction, order, decree or other instrument binding upon
the Lessee or any of its Subsidiaries, and (v) do not result in the creation or
imposition of any Lien on any asset of the Lessee or any of its Subsidiaries.
(c) This Agreement and the Lease constitute valid and binding obligations
of the Lessee enforceable in accordance with their respective terms, and the
other Operative Agreements, when executed and delivered in accordance with this
Agreement and the Lease, will constitute valid and binding obligations of the
Lessee enforceable in accordance with their respective terms, provided that the
enforceability hereof and thereof is subject in each case to general principles
of equity and to bankruptcy, insolvency and similar laws affecting the enforce
ment of creditors' rights generally.
(d) The audited balance sheet of the Lessee and its Consolidated
Subsidiaries as of December 29, 1996, and the related consolidated audited
statements of income, shareholders' equity and cash flows of the Lessee and its
Consolidated Subsidiaries for the Fiscal Year then ended, copies of which have
been delivered to each of the Holders and the Lenders, and the unaudited
financial statements of the Lessee and its Consolidated Subsidiaries as of and
for the Fiscal Quarter ended June 29, 1997, copies of which have been delivered
to each of the Holders and the Lender, fairly present, in conformity with GAAP,
the financial position of the Lessee and its Consolidated Subsidiaries as of
such dates and the results of its operations and cash flow for such periods
stated; provided, that, (i) the interim statements remain subject to normal
year-end audit adjustments and (ii) during the term of this Agreement after the
Closing Date, future rep resentations as to the matters set forth in this
sentence shall be deemed to refer to the most recent
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financial statements delivered pursuant to Sections 5.1(a) and 5.1(b). Since
June 29, 1997, there has been no event, act, condition or occurrence having or
which could be expected to have a Material Adverse Effect, except for matters
disclosed in the quarterly financial statements referred to above; provided that
during the term of this Agreement following the Closing Date, future
representations as to matters set forth in this sentence shall be deemed to
refer to the last day of the most recent audited financial statements delivered
by the Lessee pursuant to Section 5.1(a).
(e) There is no action, suit or proceeding pending, or to the knowledge of
the Lessee threatened, against or affecting the Lessee or any of its
Subsidiaries before any court or arbitrator or any governmental body, agency or
official which could have a Material Adverse Effect or which in any manner draws
into question the validity of, or could impair the ability of the Lessee to
perform its obligations under, this Agreement, the Lease, or any of the other
Operative Agreements.
(f) The Lessee and each Subsidiary are in compliance in all material
respects with applicable Laws (including, but not limited to, ERISA) and similar
requirements of Gov ernmental Authorities (including, but not limited to, PBGC),
noncompliance with which could have or cause a Material Adverse Effect, except
where the necessity of such compliance is being contested in good faith through
appropriate proceedings. To the best of the Lessee's knowledge, (i) the Lessee
and each member of the Controlled Group have fulfilled their respective
obligations under the minimum funding standards of ERISA and the Code with
respect to each Plan and are in compliance in all material respects with the
presently applicable provisions of ERISA and the Code, and have not incurred any
liability to the PBGC or a Plan under Title IV of ERISA; and (ii) neither the
Lessee nor any member of the Controlled Group is or ever has been obligated to
contribute to any Multiemployer Plan.
(g) There have been filed on behalf of the Lessee and its Subsidiaries all
federal, state and local income, excise, property and other tax returns which
are required to be filed by them and all taxes due pursuant to such returns or
pursuant to any assessment received by or on behalf of the Lessee or any
Subsidiary have been paid, except for amounts that either are immaterial or are
being disputed in good faith and by appropriate proceedings. The charges,
accruals and reserves on the books of the Lessee and its Subsidiaries in respect
of taxes or other governmental charges are, in the opinion of the Lessee,
adequate.
(h) As of the Closing Date, the Lessee has no Subsidiaries, except for the
Subsidiaries set forth on Schedule 3.2(h), all of which are Consolidated
Subsidiaries.
(i) Neither the Lessee nor any Subsidiary is a "holding company," or a
"subsidiary company" of a "holding company," or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company," or a "public
utility," within the meaning of the Public Utility Holding Company Act of 1935,
as amended; or a "public utility" within the meaning of the Federal Power Act,
as amended; or an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended; or an "investment adviser" within the meaning of the Investment
Advisers Act of 1940, as amended.
(j) The Lessee owns Properties, or interests in Properties, sufficient for
the conduct of its business; and none of such Properties is subject to any Lien
except as permitted in Section 5.7.
(k) Neither the Lessee nor any of its Subsidiaries is in default under or
with respect to any agreement, instrument or undertaking to which it is a party
or by which it or any of its property is bound which could have or cause a
Material Adverse Effect. No Lease Default or Lease Event of Default has occurred
and is continuing and no Event of Loss has occurred.
(l) All written information and, to the best of the Lessee's knowledge, all
other information, heretofore furnished by the Lessee to the Owner Trustee, any
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Holder, any Lender or the Administrative Agent for purposes of or in connection
with this Agreement or any transaction contemplated hereby is, and all such
information hereafter furnished by the Lessee to the Owner Trustee, any Holder,
any Lender or the Administrative Agent will be, true, accurate and complete in
every material respect or based on reasonable estimates on the date as of which
such information is stated or certified. The Lessee has disclosed to the Owner
Trustee, the Holders, the Lenders and the Administrative Agent in writing any
and all facts which could reasonably be expected to have or cause a Material
Adverse Effect.
(m) To the best of the Lessee's knowledge: (i) neither the Lessee nor any
Subsidiary is subject to any Environmental Liability which could have or cause a
Material Adverse Effect, and neither the Lessee nor any Subsidiary has been
designated as a potentially responsible party under CERCLA or under any state
statute similar to CERCLA; (ii) none of the Properties located in the United
States, owned by either the Lessee or a Subsidiary, has been identified on any
current or proposed (A) National Priorities List under 40 C.F.R. ss. 300, (B)
CERCLIS list or (C) any list arising from a state statute similar to CERCLA;
(iii) no Hazardous Materials have been or are being used, produced,
manufactured, processed, treated, recycled, generated, stored, disposed of,
managed or otherwise handled at, or shipped or transported to or from the
Properties or are otherwise present at, in or under the Properties, owned or
operated by either the Lessee or a Subsidiary, or at or from any adjacent site
or facility, except for Hazardous Materials such as cleaning solvents,
pesticides and other materials used, produced, manufactured, processed, treated,
recycled, generated, stored, disposed of, managed, or otherwise handled in the
ordinary course of business in compliance with all applicable Environmental
Requirements; and (iv) the Lessee and its Subsidiaries are in compliance with
all Environmental Requirements in connection with the ownership, use and
operation of the Properties and the Lessee's and such Subsidiary's respective
businesses.
(n) All Capital Stock, debentures, bonds, notes and all other securities of
the Lessee and its Subsidiaries presently issued and outstanding are validly and
properly issued in ac cordance with all applicable laws, including but not
limited to, the "Blue Sky" laws of all applicable states and the federal
securities laws.
(o) Neither the Lessee nor any of its Subsidiaries is engaged principally,
or as one of its important activities, in the business of purchasing or carrying
any Margin Stock, and no part of the proceeds of any Loan 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, or be used for any purpose which
violates, or which is inconsistent with the provisions of, Regulations G, T, U
or X.
(p) After giving effect to the execution and delivery of this Agreement,
the Lease, and the other Operative Agreements to which it is a party, and the
leasing of the Equipment to Lessee under the Lease, the Lessee will be Solvent.
(q) The Lessee and its Subsidiaries possess to the extent material all
franchises, certificates, licenses, permits and other authorizations from
governmental and political subdivisions or regulatory authorities, and all
patents, trademarks, service marks, trade names, copyrights, franchises,
licenses and other rights that are necessary for ownership, maintenance and
operation of any of their respective material Properties and assets, and neither
the Lessee nor any of its Subsidiaries is in violation of any thereof, which,
individually or in the aggregate, would or might have or cause a Material
Adverse Effect. Without limiting the generality of the foregoing, and, in any
event, the Lessee and its Subsidiaries possess all Franchise Rights necessary
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for the ownership, operation and development of its (or their) franchised
restaurant business as con ducted, or contemplated to be conducted, by the
Lessee and such Subsidiaries, including, without limitation, in the case of
"Applebee's" restaurants, franchise agreements for each franchised restaurant
location and exclusive development rights for each designated area in which
franchised restaurants are located or contemplated to be located.
(r) The Lessee and each of its Subsidiaries maintain adequate insurance on,
and in respect of the ownership and operation of, its Properties in at least
such amounts and against at least such risks as are usually insured against in
the same general area by companies of established repute engaged in the same or
similar business.
(s) The principal place of business and chief executive office of the
Lessee and the place where the Lessee shall retain its records concerning the
Equipment and all its interest in, to and under all documents relating to the
Trust Estate (i) are located in Xxxxxx County, Georgia and (ii) have been
located at such address for no less than the six month period immediately
preceding the Closing Date.
(t) The legal name of the Lessee is (and for no less than the five-year
period immediately preceding the Closing Date has been) "Apple South, Inc."
(u) Each item of Equipment is personal property and is not, and is not
intended to be, attached to real estate in such manner that any item of
Equipment constitutes or would constitute a fixture.
(v) The Equipment will (i) qualify as property with respect to which the
depreciation deductions provided by Code Section 167(a) are determined pursuant
to Code Section 168 using the applicable depreciation method set forth in Code
Section 168(b)(1) and the applicable convention described in Code Section
168(d)(4); (ii) qualify as "five-year property" within the meaning of Code
Section 168(d)(1); and (iii) have a tax basis equal to one hundred percent
(100%) of Equipment Cost (not taking into account the Transaction Costs).
3.3 Representations and Warranties of the Lessee as of Each Commencement
Date.
The Lessee represents and warrants to the other parties to this Agreement
that, as of each Commencement Date (except to the extent any such
representations and warranties are waived in writing by the Required Holders and
Required Lenders as of such Commencement Date):
(a) The representations and warranties given by the Lessee under Section
3.2 shall be true and accurate as of each such Commencement Date.
(b) Upon (i) the filing of the Uniform Commercial Code financing statements
(which have been prepared by the Administrative Agent and reviewed by the
Lessee) in the filing offices referenced on such Uniform Commercial Code
financing statements, and (ii) the execution and delivery of the applicable
Lease Schedule regarding the Equipment accepted under the Lease on such
Commencement Date, all filings and other actions necessary or required to
establish and perfect the right, title and interest of the Owner Trustee (and to
establish good and marketable legal title in favor of the Owner Trustee, free
and clear of all Liens, except Permitted Liens) in and to the Equipment funded
on the applicable Commencement Date and the remainder of the Trust Estate and to
perfect the Lien of the Administrative Agent on the Collateral will have been
made on or prior to such Commencement Date, and the Loan Agreement will on such
Commencement Date create a valid and perfected first priority Lien on the
Collateral, subject only to any Lessor's Liens and Permitted Liens.
(c) On the applicable Commencement Date all sales, use or transfer Taxes
due and payable upon the purchase of the Equipment by the Owner Trustee on each
applicable Commencement Date and on the lease thereof to the Lessee will have
been paid or the Lessee shall be liable for the payment thereof.
(d) The Units accepted under the Lease on such Commencement Date are
adequate to operate in commercial service and comply with all Laws governing the
service in which such Units are being placed by the Lessee; each Unit specified
in Annex 1 to the applicable
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Lease Schedule has been delivered directly by the applicable Seller to the
Lessee, and the Lessee is unaware of any defects in or damage to such Units.
(e) The conveyance of the Units effected on such Commencement Date are not
void or voidable under any applicable Law.
(f) The Lessee is in compliance with all applicable Environmental Laws
relating to the Equipment accepted under the Lease on such Commencement Date,
including, without limitation, the ownership, use, transport, storage,
condition, maintenance and operation of the Equipment.
(g) The Lessee has received no service of any writs, injunctions, decrees,
orders or judgments outstanding against the Lessee relating to the Equipment
accepted under the Lease on such Commencement Date, including, without
limitation, the ownership, use, transport, storage, condition, maintenance or
operation of the Equipment resulting from a material violation of any applicable
Environmental Law, and there are no material lawsuits, proceedings or
investigations under any applicable Environmental Law pending or, to the
Lessee's knowledge, threatened against the Lessee relating to the ownership,
use, maintenance or operation of the Equipment.
(h) Since the date of the financial statements referenced in Section 5.1(a)
or Section 5.1(b) most recently provided by the Lessee to the Administrative
Agent, there has been no change in the financial condition, operations or
business of the Lessee and its Subsidiaries, taken as a whole, which would give
rise to a Material Adverse Effect.
(i) The Equipment accepted on such Commencement Date has an Equipment Cost
as set forth in the Certificate of Acceptance.
SECTION 4. CLOSING CONDITIONS
4.1 Conditions Precedent to the Obligations of Parties other than
the Lessee on the Closing Date.
The obligation of each of the parties hereto (other than the Lessee) to
comply with its obligations under Article 2 and to participate in the
transactions contemplated hereby on the Closing Date shall be subject to
satisfaction of the following conditions (and, to the extent such conditions
precedent require the delivery of any agreement, document, instrument, opinion
or any other item, such shall be in form and substance reasonably satisfactory
to the Owner Trustee, the Holders, the Lenders and the Administrative Agent) on
or prior to the Closing Date, except that (i) the obligation of any such party
shall not be subject to such party's own performance or compliance and (ii) the
conditions specified below as being only for the benefit of a specified party or
parties need be fulfilled only to the satisfaction of, or waived by, such party
or parties:
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(a) (i) Each of the Operative Agreements to be delivered as of such date
shall have been duly authorized, executed and delivered by the parties thereto,
shall be in full force and effect and executed counterparts of each shall have
been delivered to the Administrative Agent or its designee (on behalf of the
Owner Trustee, the Holders and the Lenders) on or before the Closing Date and
promptly thereafter, the Administrative Agent shall cause executed counterparts
of each to be delivered to the Owner Trustee, the Holders and the Lenders
(except that the executed Certificates shall be delivered only to the Holders
and executed Notes shall be delivered only to the Lenders), and (ii) no event
shall have occurred and be continuing that constitutes a Lease Default or a
Lease Event of Default.
(b) (i) The Lessee shall have caused the original chattel paper counterpart
of the Lease to be duly delivered to the Administrative Agent, and (ii) Uniform
Commercial Code financing statements and other documents pertaining to Lien
perfection shall have been filed in such places as the Owner Trustee or the
Administrative Agent may reasonably request for (A) the protection of the Owner
Trustee's and Administrative Agent's interest in the Lease and (B) the
termination of any existing Liens against the Lease.
(c) The representations and warranties of the parties hereto contained in
Section 3 shall be true and correct with the same effect as though made on and
as of said date, and the execution and delivery of this Agreement shall
constitute a certification by each party giving such representations and
warranties as to the accuracy of the representations and warranties in Section 3
as of the Closing Date.
(d) The Owner Trustee, the Holders, the Lenders and the Administrative
Agent shall have received the favorable written opinion of each of (i)
Xxxxxxxxxx Xxxxxxxx L.L.P., counsel for the Lessee and (ii) Ray, Xxxxxxx &
Xxxxxxx, counsel for the Owner Trustee.
(e) The Lessee shall deliver or cause to be delivered to the Owner Trustee,
the Holders, the Lenders and the Administrative Agent the following, each unless
otherwise noted dated the Closing Date, (i) good standing certificates from its
jurisdiction of incorporation, the jurisdiction of its principal place of
business and each other jurisdiction in which the failure to qualify may have a
Material Adverse Effect, each dated a recent date prior to the Closing Date,
(ii) a certified copy of its articles of incorporation, bylaws and the
resolutions of its Board of Directors approving and authorizing the execution,
delivery and performance of this Agreement, the Lease, and all other Lessee
Agreements, certified as of the Closing Date by its corporate secretary or
assistant secretary as being in full force and effect without modification or
amendment, and (iii) signature and incumbency certificates of its officers
executing this Agreement, the Lease, and all other Lessee Agreements.
(f) The Owner Trustee shall deliver or cause to be delivered to the
Holders, the Lenders and the Administrative Agent the following, each unless
otherwise noted dated the Closing Date, (i) a good standing certificate from the
Office of the Comptroller of the Currency dated a recent date prior to the
Closing Date (ii) a certified copy of its articles of association,
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bylaws and the resolutions of its Board of Directors approving and authorizing
the execution, delivery and performance of the Operative Agreements to which it
is a party, certified as of the Closing Date by an authorized officer as being
in full force and effect without modification or amendment, and (iii) signature
and incumbency certificates of its officers executing the Operative Agreements
to which it is a party.
(g) No action or proceeding shall have been instituted nor shall
governmental action be threatened before any court or Governmental Authority,
nor shall any order, judgment or decree have been issued or proposed to be
issued by any court or Governmental Authority at the time of the Closing Date,
to set aside, restrain, enjoin or prevent the completion and consummation of
this Agreement or the transactions contemplated hereby.
(h) All approvals and consents of any trustees or holders of any
indebtedness or obligations of the Lessee which are required to be obtained on
or prior to the Closing Date in connection with the transactions contemplated by
the Operative Agreements, shall have been duly obtained and be in full force and
effect.
(i) All actions, if any, required to have been taken by any Governmental
Authority on or prior to the Closing Date in connection with the transactions
contemplated by the Operative Agreements shall have been taken by such
Governmental Authority, and all orders, permits, waivers, exemptions,
authorizations and approvals of such entities required to be in effect on or
prior to the Closing Date in connection with the transactions contemplated by
this Agreement shall have been issued, and all such orders, permits, waivers,
exemptions, authorizations and approvals shall be in full force and effect, on
the Closing Date.
(j) The Administrative Agent shall have received evidence satisfactory to
it that the aggregate amount of all Fees due and payable on the Closing Date
have been paid.
(k) The Owner Trustee and the Administrative Agent shall have received such
other documents, appraisals, certificates, financing statements and other items
as any such parties may reasonably require.
4.2 Conditions Precedent to the Obligations of the Parties other than the
Lessee on each Commencement Date.
The obligation of each of the parties hereto (other than the Lessee) to
comply with its obligations under Article 2 and to participate in the
transactions contemplated hereby on each Commencement Date shall be subject to
satisfaction of the following conditions (and, to the extent such conditions
precedent require the delivery of any agreement, document, instrument, opinion
or any other item, such shall be in form and substance reasonably satisfactory
to the Owner Trustee and the Administrative Agent) on or prior to each such
Commencement Date, except that (i) the obligation of any such party shall not be
subject to such party's own performance or compliance and (ii) the conditions
specified below as being only for the benefit of
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a specified party or parties need be fulfilled only to the satisfaction of, or
waived by, such party or parties:
(a) Each of the Operative Agreements to be delivered as of such
Commencement Date shall have been duly authorized, executed and delivered by the
parties thereto, shall be in full force and effect and executed counterparts of
each shall have been delivered to the Owner Trustee, the Holders, the Lenders
and the Administrative Agent or their counsel on or before such Commencement
Date, and no event shall have occurred and be continuing that constitutes a
Lease Default or a Lease Event of Default.
(b) (i) The Lessee shall have caused the original chattel paper counterpart
of the Lease Schedule covering the Units delivered on such Commencement Date to
be duly delivered to the Administrative Agent (and the Units described on such
Lease Schedule shall be identical to the Units described in the applicable
Certificate of Delivery and Acceptance) and (ii) Uniform Commercial Code
financing statements and other documents pertaining to Lien perfection shall
have been filed in such places as the Owner Trustee or the Administrative Agent
may request for (A) the protection of the Owner Trustee's title to the Equipment
and interest in the Lease or the Lien of the Administrative Agent in the
Collateral and (B) the termination of any existing Liens against the Collateral.
(c) The Owner Trustee, the Holders, the Lenders and the Administrative
Agent shall have received Lien searches regarding the Lessee (including without
limitation Uniform Commercial Code searches and similar searches in foreign
jurisdictions), Tax Lien searches and judgment Lien searches in such
jurisdictions as such parties shall determine based on the location of the
Equipment and all such Liens which would materially impair the rights of such
parties (as determined in good faith by such parties) shall have been removed at
such time or otherwise handled in a manner satisfactory to all such parties.
(d) The Owner Trustee, the Holders, the Lenders and the Administrative
Agent shall have received (1) landlord consents and waivers, in form and
substance satisfactory to the Majority In Interest, from the landlords at all
real property locations leased by Lessee where Equipment is, or as of such
applicable Commencement Date will be, located to the extent that Lessee is able
to obtain such landlord consents and waivers after using its reasonable efforts
to do so and (2) commencing on the September 30, 1998 Commencement Date and
continuing on each Commencement Date thereafter, a certificate from a
Responsible Officer of the Lessee to the effect that after giving effect to the
purchase of the Units on such Commencement Date, at least seventy percent (70%)
of the Equipment, based on the Equipment Cost of all Equipment on such
Commencement Date, will be located at locations either owned by Lessee or leased
by Lessee for which a landlord consent and waiver, in form and substance
satisfactory to the Majority In Interest, has been delivered.
(e) The Lessee shall have delivered the Certificate of Delivery and
Acceptance and all related originals invoices for such Commencement Date to the
Administrative Agent (on
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behalf of the Owner Trustee, the Holders and the Lenders) in accordance with the
provisions of Section 2.3(b).
(f) The representations and warranties of the parties hereto contained in
Section 3 shall be true and correct with the same effect as though made on and
as of said date, and the execution and delivery of the applicable Lease Schedule
shall constitute a certification by each party giving such representations and
warranties of the accuracy of the representations and the warranties in Section
3 as of such Commencement Date.
(g) After giving effect to the transactions contemplated hereby, the Owner
Trustee shall have good and marketable legal title to each Unit of Equipment to
be delivered on such Commencement Date, free and clear of all Liens other than
Permitted Liens, and the execution and delivery of the Lease Schedule by the
Lessee to which such Unit is applicable shall be deemed a certification by the
Lessee of the same.
(h) If not previously furnished, the Additionally Insured Parties shall
have received certificates of insurance signed by the insurer or by an
independent insurance broker evidencing insurance coverages required pursuant to
Section 12 of the Lease.
(i) No action or proceeding shall have been instituted nor shall
governmental action be threatened before any court or Governmental Authority,
nor shall any order, judgment or decree have been issued or proposed to be
issued by any court or Governmental Authority at the time of the applicable
Commencement Date, to set aside, restrain, enjoin or prevent the completion and
consummation of this Agreement or the transactions contemplated hereby.
(j) The Administrative Agent (on behalf of the other parties to this
Agreement) shall have received (or shall have waived receipt of) the Certificate
of Delivery and Acceptance applicable to such Commencement Date required
pursuant to Section 2.3.
(k) No change shall have occurred after the date of the execution and
delivery of this Agreement in applicable Law or interpretations thereof by
regulatory authorities that, in the opinion of either the Owner Trustee, any
Holder, any Lender, the Administrative Agent or their counsel, would make it
illegal for such party to enter into any transaction contemplated by the
Operative Agreements.
(l) Each Holder shall have made available its respective portion of the
Aggregate Holder Funded Amount in the amount specified in, and otherwise in
accordance with, Sections 2.2(a) and 2.3.
(m) All approvals and consents of any trustees or holders of any
indebtedness or obligations of the Lessee which are required to be obtained
prior to such Commencement Date in connection with the transactions contemplated
by the Operative Agreements shall have been duly obtained and be in full force
and effect.
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(n) All actions, if any, required to have been taken by any Governmental
Authority on or prior to such Commencement Date in connection with the
transactions contemplated by the Operative Agreements on such Commencement Date
shall have been taken by such Governmental Authority, and all orders, permits,
waivers, exemptions, authorizations and approvals of such entities required to
be in effect on such Commencement Date in connection with the transactions
contemplated by this Agreement on such Commencement Date shall have been issued,
and all such orders, permits, waivers, exemptions, authorizations and approvals
shall be in full force and effect, on such Commencement Date.
(o) A Certificate of Acceptance with respect to the applicable Units
delivered to the Lessee, on behalf of the Owner Trustee on such Commencement
Date shall have been duly executed and delivered by the Lessee, as the
authorized representative of the Owner Trustee.
(p) The Owner Trustee and the Administrative Agent shall have received such
other documents, appraisals, certificates, financing statements, opinions of
counsel, and other items as any such parties may reasonably require.
4.3 Conditions Precedent to the Obligation of the Lessee on the Closing Date.
The obligations of the Lessee to enter into this Agreement and the other
Operative Agreements to which the Lessee is a party is subject to the following
conditions as of the Closing Date:
(a) Each of the Operative Agreements to be delivered as of such date shall
be satisfactory in form and substance to the Lessee and shall have been duly
authorized, executed and delivered by the respective party or parties thereto
(other than the Lessee), and an executed counterpart of each thereof shall have
been delivered to the Lessee or its counsel (except that the executed
Certificates shall be delivered only to the Holders and executed Notes shall be
delivered only to the Lenders).
(b) The representations and warranties of the Owner Trustee contained in
Section 3 shall be true and correct in all material respects as of the Closing
Date as though made on and as of such date, and the execution and delivery of
this Agreement shall constitute a certification by the Owner Trustee as to the
accuracy of the representations and warranties in Section 3 as of the Closing
Date.
(c) The Lessee shall have received the opinion of counsel, in form and
substance reasonably satisfactory to the Lessee, referred to in Section
4.l(d)(ii).
(d) The Notes shall have been duly issued and delivered by the Owner
Trustee to the Lenders, and the Certificate shall have been duly issued and
delivered by the Owner Trustee to the Holders, each dated the Closing Date.
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(e) The Owner Trustee shall deliver or cause to be delivered to the Lessee
the following, each unless otherwise noted dated the Closing Date and in form
and substance satisfactory to the Lessee, (i) a good standing certificate from
the Office of the Comptroller of the Currency dated a recent date prior to the
Closing Date, (ii) a certified copy of its articles of association, bylaws and
the resolutions of its Board of Directors approving and authorizing the
execution, delivery and performance of the Operative Agreements to which it is a
party, certified as of the Closing Date by an authorized officer as being in
full force and effect without modification or amendment, and (iii) signature and
incumbency certificates of its officers executing the Operative Agreements to
which it is a party.
(f) No change shall have occurred after the date of the execution and
delivery of this Agreement in applicable Law or interpretations thereof by
regulatory authorities that, in the opinion of either the Lessee or its counsel,
would make it illegal for the Lessee to enter into any transaction contemplated
by the Operative Agreements.
(g) All actions, if any, required to have been taken by any Governmental
Authority on or prior to the Closing Date in connection with the transactions
contemplated by the Operative Agreements on the Closing Date shall have been
taken by any such Governmental Authority, and all orders, permits, waivers,
exemptions, authorizations and approvals of such entities required to be in
effect on the Closing Date in connection with the transactions contemplated by
the Operative Agreements on the Closing Date shall have been issued, and all
such orders, permits, waivers, exemptions, authorizations and approvals shall be
in full force and effect, on the Closing Date.
4.4 Conditions Precedent to the Obligations of the Lessee on each
Commencement Date.
The obligation of the Lessee to participate in the transactions
contemplated hereby on each Commencement Date shall be subject to satisfaction
of the following conditions (and, to the extent such conditions precedent
require the delivery of any agreement, document, instrument, opinion or any
other item, such shall be in form and substance reasonably satisfactory to the
Lessee) on or prior to such Commencement Date, except that (i) the obligation of
the Lessee shall not be subject to the Lessee's own performance or compliance
and (ii) the conditions specified below as being only for the benefit of a
specified party or parties need be fulfilled only to the satisfaction of, or
waived by, such party or parties:
(a) Each of the Operative Agreements to be delivered as of such date shall
be reasonably satisfactory in form and substance to the Lessee and shall have
been duly authorized, executed and delivered by the respective party or parties
thereto (other than the Lessee), and an executed counterpart of each thereof
shall have been delivered to the Lessee or its counsel.
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(b) The representations and warranties of the Owner Trustee contained in
Section 3 shall be true and correct with the same effect as though made on and
as of said date, and the execution and delivery of the applicable Lease Schedule
shall constitute a certification by the Owner Trustee as to the accuracy of the
representations and warranties in Section 3 as of such Commencement Date.
(c) No action or proceeding shall have been instituted nor shall
governmental action be threatened before any court or Governmental Authority,
nor shall any order, judgment or decree have been issued or proposed to be
issued by any court or Governmental Authority at the time of such Commencement
Date, to set aside, restrain, enjoin or prevent the completion and consummation
of this Agreement or the Lease or the transactions contemplated hereby or
thereby.
(d) The Holders shall have made available the Aggregate Holder Funded
Amount in the amount specified in, and otherwise in accordance with, Sections
2.2(a) and 2.3.
(e) The Lenders shall have made available the Aggregate Lender Funded
Amount in the amount specified in, and otherwise in accordance with, Sections
2.2(b) and 2.3.
(f) After giving effect to the transactions contemplated hereby, the Owner
Trustee shall have good and marketable legal title to each Unit of Equipment to
be delivered on such Commencement Date, free and clear of all Liens, except
Lessor Liens and Permitted Liens.
(g) No change shall have occurred after the date of the execution and
delivery of this Agreement in applicable Law or interpretations thereof by
regulatory authorities that, in the opinion of either the Lessee or its counsel,
would make it illegal for the Lessee to enter into any transaction contemplated
by the Operative Agreements.
(h) All actions, if any, required to have been taken by any Governmental
Authority on or prior to such Commencement Date in connection with the
transactions contemplated by the Operative Agreements on such Commencement Date
shall have been taken by any such Governmental Authority and all orders,
permits, waivers, exemptions, authorizations and approvals of such entities
required to be in effect on such Commencement Date in connection with the
transactions contemplated by the Operative Agreements on such Commencement Date
shall have been issued, and all such orders, permits, waivers, exemptions,
authorizations and approvals shall be in full force and effect, on such
Commencement Date.
SECTION 5. COVENANTS OF THE LESSEE
5.1 Information.
The Lessee will deliver to each of the Holders and Lenders:
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(a) as soon as available and in any event within ninety (90) days after the
end of each Fiscal Year, a consolidated balance sheet of the Lessee and its
Consolidated Subsidiaries as of the end of such Fiscal Year and the related
consolidated statements of income, shareholders' equity and cash flows for such
Fiscal Year, setting forth in each case in comparative form the figures for the
previous fiscal year, all audited and reported on by independent public
accountants of nationally recognized standing, with such report to be free of
any material exceptions and qualifications; provided that, the information
required by this paragraph may be satisfied by delivery of information pursuant
to Section 5.1(e) or Section 5.1(f);
(b) As soon as available and in any event within fifty (50) days after the
end of each of the first three (3) Fiscal Quarters of each Fiscal Year, a
consolidated balance sheet of the Lessee and its Consolidated Subsidiaries as of
the end of such Fiscal Quarter and the related statement of income and statement
of cash flows for such quarter and for the portion of the Fiscal Year ended at
the end of such quarter, setting forth in each case in comparative form the
figures for the corresponding quarter and the corresponding portion of the
previous Fiscal Year, all certified (subject to normal year-end adjustments) as
to fairness of presentation, GAAP and consistency by the chief financial officer
of the Lessee; provided, that the information required by this paragraph may be
satisfied by delivery of information pursuant to Section 5.1(e) or Section
5.1(f);
(c) Simultaneously with the delivery of each set of financial statements
referred to in Sections 5.1(a) and 5.1(b), a certificate, substantially in the
form of Attachment B (a "Compliance Certificate"), of the chief financial
officer of the Lessee (i) setting forth in reasonable detail the calculations
required to establish whether the Lessee was in compliance with the requirements
of Sections 5.3, 5.4, 5.5, 5.6 and 5.11 on the date of such financial statements
and (ii) stating whether any Lease Default exists on the date of such
certificate and, if any Lease Default then exists, setting forth the details
thereof and the action which the Lessee is taking or proposes to take with
respect thereto;
(d) Promptly (and, in any event, within five (5) Business Days) after the
Lessee becomes aware of the occurrence of any Lease Default, a certificate of
the chief financial officer of the Lessee setting forth the details thereof and
the action which the Lessee is taking or pro poses to take with respect thereto;
(e) Promptly upon the mailing thereof to the shareholders of the Lessee
generally, copies of all financial statements, reports and proxy statements so
mailed;
(f) Promptly upon the filing thereof, copies of all registration statements
and annual, quarterly or monthly reports which the Lessee shall have filed with
the Securities and Exchange Commission;
(g) If and when any member of the Controlled Group (i) gives or is required
to give notice to the PBGC of any reportable event (as defined in Section 4043
of ERISA) with
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respect to any Plan which might constitute grounds for a termination of such
Plan under Title IV of ERISA, or knows that the plan administrator of any Plan
has given or is required to give notice of any such reportable event, a copy of
the notice of such reportable event given or required to be given to the PBGC;
(ii) receives notice of complete or partial withdrawal liability under Title IV
of ERISA, a copy of such notice; or (iii) receives notice from the PBGC under
Title IV of ERISA of an intent to terminate or appoint a trustee to administer
any Plan, a copy of such notice; and
(h) From time to time such additional information regarding the financial
position or business of the Lessee and its Subsidiaries as the Administrative
Agent, at the request of any Holder or Lender, may reasonably request.
5.2 Inspection of Property, Books and Records.
The Lessee will keep, and require each Subsidiary to keep, proper books of
record and account in which full, true and correct entries in conformity with
GAAP (or, in the case of any non-domestic Subsidiary, such other accounting
standards, rules, regulations and practices applicable to businesses operating
in the locality in which each such Person operates); and permit, and cause each
Subsidiary to permit, representatives of any Holder or Lender, at such Person's
expense prior to the occurrence of a Lease Default and at the Lessee's expense
after the occurrence and during the continuation of a Lease Default to visit and
inspect any of their respective properties, to examine and make abstracts from
any of their respective books and records and to discuss their respective
affairs, finances and accounts with their respective officers, employees and
independent public accountants. The Lessee agrees to cooperate and assist in
such visits and inspections in each case at such reasonable times and as often
as may reasonably be desired.
5.3 Adjusted Funded Debt/Adjusted Capitalization Ratio.
The Adjusted Funded Debt/Adjusted Capitalization Ratio will not at any time
exceed 0.65:1.00.
5.4 Minimum Stockholder's Equity.
Stockholders' Equity will at no time be less than the sum of (i)
$180,000,000, as of the Fiscal Quarter ended closest to December 31, 1996 (the
"Base Fiscal Quarter"), plus (ii) fifty percent (50%) of Consolidated Net Income
(if positive) for each Fiscal Quarter subsequent to the Base Fiscal Quarter;
plus, without duplication, (iii) seventy-five percent (75%) of any net proceeds
received by Lessee from any offering of equity securities (other than Redeemable
Preferred Stock) by Lessee subsequent to February 27, 1996; plus, without
duplication, (iv) seventy-five percent (75%) of any net proceeds received by
Lessee from any conversion of debt into equity subsequent to February 27, 1996;
plus, without duplication, (v) seventy-five percent (75%) of any adjustment to
equity due to any pooling of interests occurring subsequent to December 31,
1996; plus, without duplication, (vi) seventy-five percent (75%) of any increase
in
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Stockholders' Equity resulting from the issuance or exchange of any equity
securities in furtherance of any acquisition constituting a permitted investment
under Section 5.11.
5.5 Fixed Charge Coverage Ratio.
Lessee's Fixed Charge Coverage Ratio, measured on a rolling four (4) Fiscal
Quarters' basis as of the end of each Fiscal Quarter, commencing with the Fiscal
Quarter ended closest to September 30, 1997, shall be not less than 2:1.
5.6 Total Funded Debt/Cash Flow Coverage Ratio.
The ratio which (i) the Total Funded Debt of the Lessee and its
Consolidated Subsidiaries at the end of any Fiscal Quarter, commencing with the
Fiscal Quarter ended closest to September 30, 1997, bears to (ii) the Cash Flow
of the Lessee and its Consolidated Subsidiaries, measured on a rolling four (4)
Fiscal Quarters' basis as of the end of such Fiscal Quarter, commencing with the
Fiscal Quarter ended closest to September 30, 1997, shall be less than
4.50:1.00.
5.7 Negative Pledge.
The Lessee will not, nor will the Lessee permit any Subsidiary to, create,
assume or suffer to exist any Lien on any asset now owned or hereafter acquired
by it, except: (i) those Liens, if any, described on Schedule 5.7, concerning
existing debt of the Lessee, to be set forth and described more particularly
therein, together with any Lien arising out of the refinancing, extension,
renewal or refunding of any debt secured by any such Lien, provided that such
debt is not secured by any additional assets, and the amount of such debt
secured by any such Lien is not increased; (ii) Liens incidental to the conduct
of its business or the ownership of its Properties which (A) do not secure debt
and (B) do not in the aggregate materially detract from the value of its
Properties or materially impair the use thereof or the operation of its
business, including, without limitation, easements, rights of way, restrictive
covenants, zoning and other similar restrictions on real property; (iii)
materialmen's mechanics', warehousemen's carriers', landlords' and other similar
statutory Liens which secure debt or other obligations that are not past due,
or, if past due are being contested in good faith by the Lessee or the
appropriate Subsidiary by appropriate proceedings; (iv) Liens for taxes not
delinquent or taxes being contested in good faith and by appropriate
proceedings; (v) pledges or deposits in connection with worker's compen sation,
unemployment insurance and other social security legislation; (vi) deposits to
secure performance of bids, trade contracts, leases, statutory obligations (to
the extent not excepted elsewhere herein); (vii) grants of security and rights
of setoff in accounts, securities and other properties held at banks or
financial institutions to secure the payment or reimbursement under overdraft,
letter of credit, acceptance and other credit facilities; (viii) rights of
setoff, banker's liens and other similar rights arising solely by operation of
law; (ix) Purchase Money Liens; (x) Liens on any Properties acquired by Lessee
or any Subsidiary subsequent to the Closing Date, to the extent that (A) such
Liens are existing at the time of acquisition, (B) the debt secured thereby is
not secured by any other Properties of Lessee or such Subsidiary except the
acquired
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Properties, (C) the amount of such debt so secured thereby is not increased at
or subsequent to the acquisition and (D) the total amount of all such debt
secured by all such acquired Properties does not exceed at any time, in
aggregate amount, fifteen percent (15%) of Tangible Net Worth, together with any
Lien arising out of the refinancing, extension, renewal or refunding of any debt
secured by any such Lien described in this clause (x), provided that such debt
is not secured by any additional assets, and the amount of such debt secured by
any such Lien is not increased; and (xi) capital leases made in the ordinary
course of business (but excluding, however, sale-leaseback transactions in any
event) in which there is no provision for title to the leased Property to pass
to the Lessee or such Subsidiary at the expiration of the lease term or as to
which no bargain purchase option exists.
5.8 Maintenance of Existence.
Except as permitted in Section 5.10, the Lessee shall, and shall cause each
Subsidiary to, maintain its corporate existence and carry on its business in
substantially the same manner and in substantially the same fields as such
business is now carried on and maintained. Without limiting the generality of
the foregoing, the Lessee shall, and shall cause each Subsidiary to, maintain at
all times in full force and effect all Franchise Rights necessary to the
ownership, operation and development of all franchised restaurant business
conducted, or contemplated to be conducted, by the Lessee and such Subsidiaries,
except with respect to Voluntary Store Closings.
5.9 Dissolution.
Neither the Lessee nor any of its Subsidiaries shall suffer or permit
dissolution or liq uidation either in whole or in part, except through corporate
reorganization to the extent per mitted by Section 5.10.
5.10 Consolidations, Mergers and Sales of Assets.
The Lessee will not, nor will it permit any Subsidiary to, consolidate or
merge with or into, or sell, lease or otherwise transfer all or any substantial
part of its assets to, any other Person, or discontinue or eliminate any
business line or segment, provided that, subject at all times to Section 5.11,
the Lessee or any Subsidiary may merge with another Person (which is not the
Lessee or such Subsidiary) if (i) such Person was organized under the laws of
the United States of America or one of its states (ii) the Lessee or such
Subsidiary (as the case may be) is the corpora tion surviving such merger and
(iii) immediately after giving effect to such merger, no Lease De fault shall
have occurred and be continuing; and, provided, further, that any Subsidiaries
of the Lessee may (i) merge or consolidate with each other or with the Lessee
(so long as the Lessee is the corporation surviving such merger), or (ii) sell
assets to each other or to the Lessee.
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5.11 Investments.
The Lessee will not make (nor will the Lessee permit any Subsidiary to
make) any invest ment in any Person or Property (which term "investment," for
purposes hereof, shall mean and in clude, without limitation, the acquisition of
any property, the issuance, acquisition or exchange of any capital stock, debt
or other obligations or security to, from or with any Person, and the making of
any loan, advance, extension of credit, credit accommodation, Guarantee or
capital contribution to or on behalf of any Person), provided, however, that,
notwithstanding the foregoing, the Lessee (or any Subsidiary) may, from time to
time, undertake the following, without the necessity of obtaining the prior
written consent of the Majority In Interest thereto:
(a) Current Assets. Acquire current assets for use in, or arising from, the
sale of goods or services in the ordinary course of its business (including, for
this purpose, but without limitation, credit card receivables);
(b) Capital Expenditures. Make capital expenditures in the ordinary course
of its business;
(c) Franchise Fees. Pay franchisee fees and royalties to its franchisors in
the ordinary course of its business;
(d) Escrow Deposits. Make or maintain escrow deposits for the payment of
taxes, rents, utilities, insurance or like matters in the ordinary course of its
business;
(e) Bank Accounts. Make and maintain deposits of cash in demand deposit
accounts of banks in the ordinary course of its business, and make endorsements
of checks, drafts or other instruments in connection therewith;
(f) Surplus Cash. Consistent at all times with the Lessee's internal
Statement of Investment Policy, invest surplus cash in (A) obligations of, or
guaranteed by, the United States of America or any agency thereof, (B)
short-term certificates of deposit issued by, and time deposits with, any Bank
or any other financial institution domiciled in the United States of America
with assets of at least $500,000,000, (C) short-term commercial paper rated at
least "A1" by Standard & Poors or "P1" by Moody's, and (D) fixed or adjustable
rate corporate debt securities with a credit rating of at least double A (Aa/AA)
by either Moody's or Standard & Poors, provided that any fixed rate debt
securities have a maturity of one year or less;
(g) Subsidiaries. Make investments in those Consolidated Subsidiaries of
the Lessee which are wholly-owned, directly or indirectly, by the Lessee, in the
ordinary course of, and pursuant to the reasonable requirements of, the Lessee's
and such Subsidiaries' respective businesses, provided that the aggregate amount
of such investments which may be outstanding at any one time hereafter, as to
all such Subsidiaries, shall not exceed, in any event, (A) ten percent (10%) of
Lessee's consolidated total assets at any time prior to December 30, 1997, (B)
seven and one-half percent (7 1/2%) of Lessee's consolidated total assets on or
at any time after December 31, 1997, but prior to June 30, 1998, and (C) five
percent (5%) of Lessee's consolidated total
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assets on or after June 30, 1998; it being understood and agreed that (i) there
shall be excluded from such calculation any investment deemed made by the Lessee
in DF&R Restaurants, Inc., a Texas corporation which is a wholly-owned,
Consolidated Subsidiary of the Lessee, pursuant to the accounting for the prior
acquisition of such corporation by the Lessee as a pooling of interests; (ii)
there shall be deducted in any event from the amount of investments in
Subsidiaries which may be made pursuant to this clause (g) the aggregate amount
of Capitalized Lease Obligations of all Subsidiaries which are at any time
outstanding; and (iii) the provisions of this clause (g) henceforth shall be the
exclusive means by which the Lessee (or any Subsidiary) may make investments in
any Subsidiaries (whether or not wholly-owned Subsidiaries) and shall override
any other provisions of this Section 5.11 (including, particularly, clauses (j),
(k) and (l) below) which may be construed otherwise to permit such investments.
(h) Travel Advances. Make travel and similar advances to employees from
time to time in the ordinary course of business;
(i) Special Life Insurance Program. The Lessee may invest up to$850,000 per
Fiscal Year in the making of annual premiums payable on the split dollar joint
survivor life insurance program implemented, or to be implemented, covering the
lives of Xxx X. XxXxxx, Xx. and his spouse Xxxx XxXxxx, with an initial death
benefit of $50,000,000, provided, however, that (i) such investments are made
over a period not to exceed ten (10) Fiscal Years and (ii) the Lessee maintains
at all times during the effective period of the program a security interest in
policy proceeds and cash values of policies issued as part of the program equal
in amount to not less than its then cumulative premium investments;
(j) Applebee's Franchisees. Make investments in franchisees of "Applebee's"
restaurants, but no investment in Xxxxxxxx'x International, Inc. (or any Person
which subsequent hereto shall become the franchisor of "Applebee's" restaurants)
shall be permitted to be made subsequent to the Closing Date, notwithstanding
this clause (j) or any other provision of this Sec tion, except with the prior
written consent of the Majority In Interest;
(k) Other Restaurant Concepts. Make investments in other restaurant
concepts, besides "Applebee's," so long as the total amount of each such
investment (either considered individually or as part of a series of related,
concurrent investments), does not exceed ten percent (10%) of Lessee's
consolidated total assets immediately before such investment (or the last in a
series of related, concurrent investments) is made;
(l) Other Investments Generally. Make other investments, not described in
clauses (a) through (k) above, provided that all such investments, in the
aggregate, do not exceed at any one time ten percent (10%) of Stockholders'
Equity.
The Lessee shall notify the Administrative Agent from time to time, but not
less frequently than quarterly, or at any time at the Administrative Agent's
request, of the nature and amount of any
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investments made pursuant to clauses (j), (k) and (l) hereof which, individually
or in the aggregate, exceed $100,000.
Notwithstanding anything in this Section 5.11 to the contrary, no Subsidiary
shall be required to comply with, and Lessee shall not be required to cause any
Subsidiary to comply with, any part of clause (g), (j), (k) and (l) of this
Section 5.11 to the extent it would cause a violation of any term of the
Lessee's $125,000,000 9 3/4% Senior Notes due 2006 or the Prospectus Supplement
dated May 23, 1996 related thereto.
5.12 Compliance with Laws; Payment of Taxes.
The Lessee will, and will cause each of its Subsidiaries and each member of
the Controlled Group to, comply in all material respects with applicable Laws
(including but not limited to ERISA) and similar requirements of Governmental
Authorities (including but not limited to PBGC), except where the necessity of
such compliance is being contested in good faith through appropriate
proceedings. The Lessee will, and will cause each of its Subsidiaries to, pay
promptly when due all taxes, assessments governmental charges, claims for labor,
supplies, rent and other obligations which, if unpaid, might become a Lien
against the Property of the Lessee or any Subsidiary, except liabilities being
contested in good faith and against which, if requested by the Administrative
Agent, the Lessee will set up reserves in accordance with GAAP.
5.13 Maintenance of Property.
The Lessee shall, and shall cause each Subsidiary to, maintain all of its
Properties in good condition, repair and working order, ordinary wear and tear
excepted.
5.14 Insurance.
The Lessee will maintain, and will cause each of its Subsidiaries to
maintain (either in the name of the Lessee or in such Subsidiary's own name),
with financially sound and reputable insurance companies, insurance on, and in
respect of the ownership and operation of, its Properties in at least such
amounts and against at least such risks as are usually insured against in the
same general area by companies of established repute engaged in the same or
similar business.
5.15 Change in Fiscal Year.
The Lessee will not change its Fiscal Year without the consent of the
Majority In Interest.
5.16 Environmental Notices.
The Lessee shall furnish to the Administrative Agent, promptly after the
Lessee becomes aware thereof, written notice of all Environmental Liabilities,
pending or threatened Environmental Proceedings, Environmental Notices,
Environmental Judgments and Orders, and
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Environmental Releases, at, on, in, under or in any way affecting the Properties
or any adjacent property and all facts, events, or conditions that could
reasonably be expected to lead to any of the foregoing.
5.17 Environmental Matters.
The Lessee will not, and will not permit any Third Party to, use, produce,
manufacture, process, treat, recycle, generate, store, dispose of, manage at, or
otherwise handled or ship or transport to or from the Properties any Hazardous
Materials except for Hazardous Materials such as cleaning solvents, pesticides
and other similar materials used, produced, manufactured, processed, treated,
recycled, generated, stored, disposed, managed, or otherwise handled in the
ordinary course of business in compliance with all applicable Environmental
Requirements.
5.18 Environmental Releases.
The Lessee agrees that upon the occurrence of an Environmental Release
(except for any Environmental Release which (x) occurred in compliance with all
Environmental Requirements and (y) could not reasonably be expected to have or
cause a Material Adverse Effect), it will act immediately to investigate the
extent of, and to take appropriate remedial action to eliminate, such
Environmental Release, whether or not ordered or otherwise directed to do so by
any Environmental Authority.
5.19 Subsidiary Debt.
Except solely to the extent expressly permitted in clause (g) of Section
5.11 of this Agreement, the Lessee will not permit any Consolidated Subsidiary
of the Lessee which is a wholly owned Subsidiary, directly or indirectly, of the
Lessee, to create, incur or suffer to exist any of the following: (i)
indebtedness for borrowed funds; (ii) Capitalized Lease Obligations, provided,
however, that DF&R Restaurants, Inc. and its Subsidiaries may incur Capitalized
Lease Obligations in an aggregate amount not to exceed $10,000,000 at any one
time outstanding; (iii) Guarantees; (iv) debts, liabilities or obligations to
any seller incurred to pay the deferred purchase price of property or services
having a deferred purchase price of $1,000,000 or more, excepting, in any event,
trade accounts payable arising in the ordinary course of business and purchase
options prior to their exercise; and (v) debts, liabilities or obligations in
respect of Synthetic Leases.
5.20 Change of Chief Executive Office.
No less than 30 days prior to the date upon which the Lessee shall change
its chief executive office (as such term is defined in Article 9 of the Uniform
Commercial Code as in effect in the State of Georgia), principal place of
business or the place where the Lessee shall retain its records concerning the
Equipment and all its interests in, to and under all documents relating to the
Trust Estate from Xxxxxxx at Washington, Xxxxxxx, Xxxxxxx 00000, then in any
such case
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the Lessee shall notify the Administrative Agent (on behalf of the Owner
Trustee, the Holders and the Lenders) of the same and of the need to make
additional Uniform Commercial Code filing with respect thereto.
5.21 Lien Searches.
Within 30 days after the Closing Date and within 30 days after the last
Commencement Date, the Administrative Agent (on behalf of the Owner Trustee, the
Holders and the Lenders) shall have received Lien searches regarding the Lessee
and the Equipment (including, without limitation, Uniform Commercial Code
searches and similar searches in foreign jurisdictions, Tax Lien searches and
judgment Lien searches) in such jurisdictions as such parties shall determine in
their reasonable discretion, and Lessee shall cause all such Liens which would
materially impair the rights of such parties (as reasonably determined by such
parties) to be removed at such time or otherwise handled in a manner
satisfactory to all such parties.
5.22 Classification of Equipment.
At all times during the Term, the Lessee shall cause all Equipment to be
personal property, not fixtures.
5.23 Lien Perfection Filings.
Regarding the Uniform Commercial Code financing statements and other
filings referenced in Section 4.2 of this Agreement relating to any Commencement
Date, the Lessee shall execute and deliver any and all such financing statements
and filings as the Administrative Agent may deem necessary or desirable promptly
and no later than five Business Days after receipt of such financing statements
and filings by the Administrative Agent . The Lessee also hereby authorizes the
Administrative Agent, for the benefit of itself, the Lenders and the Holders, to
file any such financing statements, filings or continuation statements without
the signature of the Lessee to the extent permitted by applicable law, and to
pay all reasonable fees and expenses in connection therewith.
5.24 Allocation of Equipment Cost among the States and Counties.
On each December 31 during the Term, the Lessee shall provide a certificate
to the Administrative Agent on behalf of the Owner Trustee, the Lenders and the
Holders certifying (a) any changes in the allocation of Equipment Cost among the
various States and counties therein referenced in each Certificate of Delivery
and Acceptance and (b) the Lessee shall have made all necessary and appropriate
payment of additional filing taxes and other like charges in connection with the
foregoing. The Lessee shall provide evidence of the same to the Administrative
Agent on each such date.
5.25 UCC Filing Amendments.
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The Administrative Agent (at the direction of the Majority In Interest but
at the cost and expense of the Lessee) shall have the option of electing to
amend the Uniform Commercial Code financing statements filed with respect to the
Equipment in a manner determined by the Administrative Agent in its reasonable
discretion (such amendments to be in form and substance satisfactory to the
Majority In Interest) in order to correct or supplement the description of the
property therein or any other information set forth therein. The Lessee hereby
agrees to execute any and all such amendments (as provided by the Administrative
Agent to the Lessee) and to promptly return the same to the Administrative
Agent.
SECTION 6. OTHER COVENANTS AND AGREEMENTS
6.1 Restrictions on Transfer.
(a) Subject to the provisos to this sentence, each of the Holders and
Lenders agrees that no such entity shall sell, transfer or assign (in whole or
in part) its right, title and interest in and to the Operative Agreements (or
any of them) without the prior written consent of the Lessee and the
Administrative Agent (which consent may not be unreasonably withheld or
delayed); provided, no such consent from Lessee shall be required subsequent to
the occurrence and during the continuance of a Lease Default or Lease Event of
Default; provided, further, that without the prior written consent of the Lessee
and the Administrative Agent (i) any Holder may sell, transfer or assign its
interest to an Affiliate of such Holder, to another Holder or to an Eligible
Assignee, and (ii) any Lender may sell, transfer or assign its interest to an
Affiliate of such Lender, to another Lender or to an Eligible Assignee. In
addition, (x) no Holder may sell, transfer or assign any such interest unless
(1) such sale, transfer or assignment is ratable as to all of such Holder's
interests in the Operative Agreements (including, without limitation, with
respect to its Certificate), and (2) the amount of the Holder Commitment
assigned by such Holder is at least $5,000,000 and increments thereof, unless
such Holder is selling, transferring or assigning one hundred percent (100%) of
its Holder Commitment, and (y) no Lender may sell, transfer or assign any such
interest unless (1) such sale, transfer or assignment is ratable as to all such
Lender's interests in the Operative Agreements (including, without limitation,
with respect to all Notes), (2) the amount of the Lender Commitment assigned by
such Lender is at least $5,000,000 and increments thereof, unless such Lender is
selling, transferring or assigning one hundred percent (100%) of its Lender
Commitment and (3) such Lender and the Person to whom such sale, transfer or
assignment is made shall execute and deliver to the Administrative Agent an
Assignment and Assumption Agreement in substantially the form of Attachment C
attached hereto (the "Assignment Agreement"). In addition, there shall be no
such sale, transfer or assignment of any Certificate or Note in violation of
applicable securities Laws, and Lessee shall have no obligation to pay any cost
or expense for the registration under applicable securities Laws of any
Certificate or Note.
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(b) Upon any such transfer, (i) except as the context otherwise requires,
the Person to whom such sale, transfer or assignment is made (a "Transferee")
shall be deemed a "Holder" or "Lender", as the case may be, and shall enjoy the
rights and privileges and perform the obligations of the transferring party (the
"Transferor") to the extent of the interest transferred hereunder and under each
other Operative Agreement to which the Transferor is a party, and, except as the
context otherwise requires, each reference in this Agreement and each other
Operative Agreement to the "Holders" or the "Lenders", as the case may be, shall
thereafter be deemed to include such Transferee for all purposes to the extent
of the interest transferred, (ii) the Transferor shall continue to be entitled
to all the benefits and rights, including without limitation any right to
indemnification, rights to reimbursement for increased costs or similar rights,
hereunder and under each other Operative Agreement to which the Transferor was a
party or by which it was bound except to the extent otherwise agreed in writing;
provided, subsequent to any such sale, transfer or assignment from a Transferor
to a Transferee, with respect to any judgment award for which the Lessee has an
indemnity obligation under the Operative Agreements, the Lessee shall not have
an obligation to pay such judgment award more than once for the benefit of such
Transferor and Transferee; provided, further, the foregoing proviso shall not
diminish the obligations of the Lessee under the Operative Agreements to
indemnify each Transferor and Transferee in all matters regarding fees, costs
and expenses associated with litigation and (iii) the Transferor shall be
released from all obligations hereunder and under each other Operative Agreement
to which the Transferor is a party or by which the Transferor is bound to the
extent such obligations are expressly assumed by a Transferee; provided,
further, that in no event shall any such sale, transfer or assignment waive or
release the Transferor from any liability on account of any breach existing
immediately prior to such sale, transfer or assignment of any of its
representations, warranties, covenants or obligations set forth in the Operative
Agreements or for any gross negligence or fraudulent or willful misconduct. The
restrictions set forth in this Section 6.1 shall not apply with respect to the
sale, transfer or assignment of the Equipment which is to be consummated on or
after the expiration or the termination of the Lease or after the occurrence and
during the continuation of a Lease Event of Default. In connection with any such
sale, transfer or assignment of a Lender's interest, the Transferor or the
Transferee (as agreed between the parties) shall pay the Administrative Agent a
transfer fee of $2,500.
(c) The Lessee agrees that any Holder or Lender may, without the consent of
the Lessee, at any time sell to one or more Persons (each a "Participant")
participating interests in any Holders Advances owing to such Holder, any
Certificate of such Holder, such Holder's Holder Commitment hereunder or any
other interest of such Holder hereunder, in the case of any Holder, or
participating interests in any Loan Advances owing to such Lender, any Note held
by such Lender, such Lender's Lender Commitment hereunder or any other interest
of such Lender hereunder, in the case of any Lender. In the event of any such
sale by any Holder or Lender of a participating interest to a Participant, such
Holder's or such Lender's obligations, as the case may be, under this Agreement
shall remain unchanged, such Holder or such Lender, as the case may be, shall
remain solely responsible for the performance thereof, such Holder or such
Lender, as the case may be, shall remain the holder of any such Certificate or
Note, as the case may be, for all purposes under this Agreement, and the Lessee
and the Administrative Agent shall continue to
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deal solely and directly with such Holder or such Lender, as the case may be, in
connection with such Holder's or such Lender's, as the case may be, rights and
obligations under this Agreement. In no event shall any Holder that sells a
participation be obligated to the Participant to take or refrain from taking any
action hereunder except that such Holder may agree that it will not (except as
provided below), without the consent of the Participant, agree to (i) the change
of any date fixed for the payment of any Holder Advances or yield on the Holder
Advances, (ii) the change of the amounts of the Holder Advances or yield on
Holder Advances due on any date fixed for the payment thereof, (iii) the change
of the Holder Commitment or the amount of the Holder Advances, (iv) any change
in the rate at which the yield on the Holder Advances is computed from the rate
at which the Participant is entitled to receive yield in respect of such
participation, (v) the release or substitution of all or any substantial part of
the Trust Estate or (vi) the release of any Guarantee given to support payment
of the Holder Advances. In no event shall any Lender that sells a participation
be obligated to the Participant to take or refrain from taking any action
hereunder except that such Lender may agree that it will not (except as provided
below), without the consent of the Participant, agree to (i) the change of any
date fixed for the payment of principal of or interest on the Loans, (ii) the
change of principal, interest or fees due on any date fixed for the payment
thereof, (iii) the change of such Lender's Lender Commitment or the principal
amount of the Loans related thereto, (iv) any change in the rate at which
interest on the Loans or any commitment fee is payable from the rate at which
the Participant is entitled to receive interest or a commitment fee in respect
of such participation, (v) the release or substitu tion of all or any
substantial part of the Collateral or (vi) the release of any Guarantee given to
support payment of the Loans. Each Holder or Lender selling such a participating
interest to any other Person shall, within ten (10) Business Days of such sale,
provide the Lessee and the Administrative Agent with written notification
stating that such sale has occurred and identifying the Participant and the
interest purchased by such Participant. The Administrative Agent, the Owner
Trustee and the Lessee agree that each Participant shall be entitled to the
benefits of Article 8 with respect to its participation in the Holder Advances
or the Loans outstanding from time to time, but only to the extent that the
Holder or Lender which sold the relevant participation would have been entitled
thereto pursuant to the terms of this Agreement.
(d) Subject to the rights of the Lessee pursuant to Section 18.2(b) of the
Lease, the Lessee shall not sell, transfer or assign (in whole or in part) its
respective right, title and interest in and to the Equipment or its obligations
hereunder or the other Operative Agreements without the prior written consent of
each other party to this Agreement (which consent may be withheld in such
party's sole discretion).
6.2 Lessor's Liens Attributable to the Holders.
(a) Each Holder hereby covenants and agrees with and for the benefit of the
other parties to this Agreement that such Holder will not directly or indirectly
create, incur, assume or suffer to exist any Lessor's Liens on or against any
part of the Trust Estate or the Equipment attributable to it, and such Holder
agrees that it will, at its own cost and expense, take such action as may be
necessary to duly discharge and satisfy in full any such Lessor's Lien
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described above (by bonding or otherwise in a manner reasonably acceptable to
the Lessee and the Administrative Agent); provided, that such Holder may contest
any such Lessor's Lien in good faith by appropriate proceedings so long as such
proceedings do not involve any material danger of the sale, forfeiture or loss
of the Equipment or any interest therein and do not interfere with the use,
operation, or possession of the Equipment by the Lessee under the Lease or the
rights of the Lenders under the Loan Agreement or the payment of Rent.
(b) Each Holder agrees, severally and not jointly, to indemnify and hold
harmless the other parties to this Agreement from time to time from and against
any loss, cost, expense or damage which may be suffered by such party as a
result of the failure of such Holder to discharge and satisfy in full any
Lessor's Lien attributable to it and of the type identified in and when required
to be discharged and satisfied by it under Section 6.2(a).
6.3 Lessor's Liens Attributable to the Owner Trustee.
(a) The Owner Trustee in its individual capacity hereby unconditionally
agrees with and for the benefit of the other parties to this Agreement that the
Owner Trustee in its individual capacity will not directly or indirectly create,
incur, assume or suffer to exist any Lessor's Liens on or against any part of
the Trust Estate or the Equipment arising out of any act or omission of or claim
against the Owner Trustee in its individual capacity, and the Owner Trustee in
its individual capacity agrees that it will, at its own cost and expense, take
such action as may be necessary to duly discharge and satisfy in full any such
Lessor's Lien attributable to the Owner Trustee in its individual capacity (by
bonding or otherwise in a manner reasonably acceptable to the Lessee and
Lenders); provided, that the Owner Trustee may contest any such Lessor's Lien in
good faith by appropriate proceedings so long as such proceedings do not involve
any material danger of the sale, forfeiture or loss of the Equipment or any
interest therein and do not interfere with the use, operation, or possession of
the Equipment by the Lessee under the Lease or the rights of the Lenders under
the Loan Agreement or the payment of Rent.
(b) The Owner Trustee in its individual capacity agrees to indemnify and
hold harmless the other parties to this Agreement from and against any loss,
cost, expense or damage which may be suffered by such party as a result of the
failure of the Owner Trustee to discharge and satisfy any Lessor's Liens
attributable to it in its individual capacity and of the type identified in and
when required to be discharged and satisfied by it under Section 6.3(a).
6.4 Liens Created by the Lenders.
(a) Each Lender covenants and agrees with and for the benefit of the other
Parties to this Agreement that such Lender shall not cause or permit to exist
any Lien on or against any part of the Trust Estate or the Equipment
attributable to such Lender, except such Liens which are contemplated and
permitted by the Operative Agreements, and that such Lender will, at its own
cost and expense, promptly take such action as may be necessary duly to
discharge any such Lien; provided, that such Lender may contest any such Lien in
good faith by appropriate
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proceedings so long as such proceedings do not involve any material danger of
the sale, forfeiture or loss of the Equipment or any interest therein and do not
interfere with the use, operation, or possession of the Equipment by the Lessee
under the Lease or the rights of the Lenders under the Loan Agreement or the
payment of Rent.
(b) Each Lender agrees, severally and not jointly, to indemnify and hold
harmless the other parties to this Agreement from time to time from and against
any loss, cost, expense or damage which may be suffered by such party as a
result of the failure of such Lender to discharge and satisfy in full any Lien
attributable to it and of the type identified in and when required to be
discharged and satisfied by it under Section 6.4(a).
6.5 Liens Created by the Administrative Agent.
(a) The Administrative Agent covenants and agrees with and for the benefit
of the other parties to this Agreement that the Administrative Agent shall not
cause or permit to exist any Lien on or against any part of the Trust Estate or
the Equipment attributable to the Administrative Agent, except such Liens which
are contemplated and permitted by the Operative Agreements, and that the
Administrative Agent will, at its own cost and expense, promptly take such
action as may be necessary duly to discharge any such Lien.
(b) The Administrative Agent agrees to indemnify and hold harmless the
other parties to this Agreement from time to time from and against any loss,
cost, expense or damage which may be suffered by such party as a result of the
failure of the Administrative Agent to discharge and satisfy in full any Lien
attributable to it and of the type identified in and when required to be
discharged and satisfied by it under Section 6.5(a).
6.6 Covenants Restricting the Owner Trustee.
So long as any Loans, Notes, Holder Advances or Certificates remain
outstanding and have not been paid in full or otherwise discharged in accordance
with the terms of the Operative Agreements:
(a) The Owner Trustee shall not conduct, transact or otherwise engage in,
or commit to transact, conduct or otherwise engage in, any business or
operations other than the entry into, and exercise of rights and performance of
obligations in respect of, the Operative Agreements and other activities
incidental or related to the foregoing.
(b) The Owner Trustee shall not own, lease, manage or otherwise operate any
properties or assets other than in connection with the activities described in
Section 6.6(a), or incur, create, assume or suffer to exist any indebtedness or
other consensual liabilities or financial obligations other than as may be
incurred, created or assumed or as may exist in connection with the activities
described in Section 6.6(a).
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(c) The Owner Trustee shall not convey, sell, lease, assign, transfer or
otherwise dispose of any of its property, business or assets, including without
limitation its interest in the Trust Estate, whether now owned or hereafter
acquired, except to the extent expressly contemplated by the Operative
Agreements.
(d) The Owner Trustee shall at all times (i) observe and perform all of the
covenants, conditions and obligations required to be performed by it (whether in
its capacity as the Lessor, the Owner Trustee or otherwise) under each Operative
Agreement to which it is a party and (ii) observe and perform, or cause to be
observed and performed, all of the covenants, conditions and obligations of the
Lessor under the Lease, even in the event that the Lease is terminated at stated
expiration following a Lease Event of Default or otherwise.
(e) At any time and from time to time, upon the written request of the
Administrative Agent or any Lender or Holder, the Owner Trustee will promptly
and duly execute and deliver such further instruments and documents and take
such further action as the Administrative Agent or any Lender or Holder may
reasonably request for the purpose of obtaining or preserving the full benefits
of this Agreement and the other Operative Agreements and of the rights and
powers herein or therein granted.
(f) If on any date a Responsible Officer of the Owner Trustee shall obtain
actual knowledge of the occurrence of a Default or Event of Default, the Owner
Trustee will give written notice thereof to the Administrative Agent within five
Business Days after such date.
(g) Without prejudice to any right under the Trust Agreement of the Owner
Trustee to resign, the Owner Trustee (in such capacity and in its individual
capacity) agrees not to terminate or revoke the trust created by the Trust
Agreement except as permitted by the terms thereof.
(h) On each Commencement Date, the Owner Trustee's rights, title and
interests in and to the Equipment delivered on such Commencement Date and the
Collateral shall be free of any Lessor's Liens attributable to the Owner Trustee
in its individual capacity.
(i) The Owner Trustee shall receive from each Seller such title to the
Equipment as is conveyed to it by such Seller, subject to the rights of the
Owner Trustee and the Lessee under the Lease.
(j) The Owner Trustee in its individual capacity agrees to give the Lessee,
the Holders, the Lenders and the Administrative Agent at least 30 days prior
written notice of any relocation of the Owner Trustee's chief executive office,
principal place of business or said place where its records concerning the
Equipment and all its interest in, to and under all documents relating to the
Trust Estate are located from its present location referenced in Section 3.1(g)
or any subsequent location, which in all cases shall remain in the United
States.
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6.7 Covenants of All Parties Regarding Operative Agreements.
The Owner Trustee (in such capacity and in its individual capacity), the
Holders, the Administrative Agent, the Lenders and the Lessee hereby agree to
comply with the provisions of all Operative Agreements to which they are a party
and not to terminate, amend, modify, supplement, restate or replace any
Operative Agreement in such a manner that increases the obligations or
liabilities, or decreases the rights of, or is adverse to, any other party
hereto without the prior written consent of such Person (it being understood
that (i) the consent of each Lender and Holder is unnecessary to the extent
permitted by the provisions of Section 9.1 of the Loan Agreement and Section
11.01 of the Trust Agreement, respectively and (ii) the Owner Trustee, the
Holders, the Administrative Agent and the Lenders may exercise the remedies
granted to them in the Operative Agreements).
6.8 Rent Sufficiency.
Anything contained herein, in the Lease or in any other Operative Agreement
to the contrary notwithstanding, (i) the aggregate amount of Basic Rent payable
on any Payment Date under the Lease shall be, under all circumstances and in any
event, at least equal to the sum of (A) the amount of the scheduled installments
of yield on the Certificates pursuant to the Trust Agreement, plus (B) the
amount of the scheduled installments of principal and interest on the Notes
pursuant to the Loan Agreement, in each case, due on such Payment Date, and (ii)
the amount of the Stipulated Loss Value payable on any date on account of any
Unit of Equipment, together with any other amounts payable pursuant to Sections
11 or 21 of the Lease, as the case may be, shall be, under all circumstances and
in any event, at least equal to the sum of (x) the amount of any payments then
required to be made respecting such Unit on account of the outstanding principal
of and interest on the Notes pursuant to the Loan Agreement plus (y) the amount
of any payments then required to be made respecting such Unit on account of the
outstanding Holder Advances to be repaid and yield on the Certificates pursuant
to the Trust Agreement. Anything contained herein, in the Lease or in any other
Operative Agreement to the contrary notwithstanding, the amount of the Early
Termination Option Payment payable on any date on account of any Unit of
Equipment, together with any other amounts payable pursuant to Section 10 of the
Lease, shall be, under all circumstances and in any event, at least equal to the
amount of any payments then required to be made respecting such Unit on account
of the outstanding principal of and interest on the Notes pursuant to the Loan
Agreement.
6.9 Receipts Distribution and Application of Income.
The Lessee has agreed pursuant to the terms of the Operative Agreements to
pay to the Administrative Agent, until such time as the Loan Agreement has been
discharged pursuant to its terms and thereafter to the Holders, any and all Rent
(provided, that such right to receive Rent shall not include a right to receive
Segregated Excepted Property but shall include a right to receive all other
Excepted Property) and any and all other amounts of any kind or type under any
of the Operative Agreements due and owing the Lessor, the Owner Trustee, the
Holders, the
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Administrative Agent and the Lenders (excluding such amounts referenced in the
immediately preceding parenthetical phrase in this sentence). The Lessee has
agreed pursuant to the terms of the Operative Agreements to pay to the Holders
or such other Persons as are entitled to the receipt thereof, as appropriate,
the Segregated Excepted Property payable to such Persons. Notwithstanding the
preceding provisions of this Section 6.9, in connection with any disposition of
Equipment, upon the exercise of remedies in connection with any Event of Default
and with regard to all amounts received by the Administrative Agent under the
Operative Agreements other than Segregated Excepted Property or otherwise with
respect to the Equipment, the Administrative Agent shall apply all such amounts
received in accordance with the terms of this Section 6.9 to the obligations
owed under the Operative Agreements (including, without limitation, to the
Certificates and Notes and to the out-of-pocket costs and expenses of the
Administrative Agent or the Owner Trustee in connection with such disposition or
exercise of remedies).
(a) Any such payment or amount identified as or deemed to be Basic Rent
shall be applied and allocated by the Administrative Agent: first, ratably
(based on principal amounts then outstanding under the Notes) to the Lenders for
application and allocation to the payment of interest and principal (in that
order of priority) then due and payable on the Notes, second, ratably (based on
amounts then outstanding as Holders Advances) to the Holders for application and
allocation to the payment of accrued yield and Holder Advances (in that order of
priority) then due and payable on the Certificates; and third, if no Lease
Default or Lease Event of Default has occurred and is continuing, any excess (if
other than a prepayment) shall be paid to such Person or Persons as the Lessee
may designate; provided, that if a Lease Default or a Lease Event of Default has
occurred and is continuing, such excess (if any) shall instead be held by the
Administrative Agent until the earlier of (i) the first date thereafter on which
no Lease Default or Lease Event of Default shall be in effect (in which case
such payments or amounts shall then be made to such other Person or Persons as
the Lessee may designate) and (ii) the Maturity Date (or, if earlier, the date
of any acceleration of the Notes), in which case such amounts shall be applied
and allocated in the manner contemplated by Section 6.9(c)(i).
(b) Any such payment or amount identified as or deemed to be Renewal Rent
or proceeds from the disposition of a Class of Equipment pursuant to Section
21.2 of the Lease shall be applied and allocated by the Administrative Agent:
first, ratably (based on amounts then outstanding as Holders Advances) to the
Holders for application and allocation to the payment of accrued yield and
Holder Advances (in that order of priority) then due and payable on the
Certificates; and second, if no Lease Default or Lease Event of Default has
occurred and is continuing, any excess (if other than a prepayment) shall be
paid to such Person or Persons as the Lessee may designate; provided, that if a
Lease Default or a Lease Event of Default has occurred and is continuing, such
excess (if any) shall instead be held by the Administrative Agent until the
earlier of (i) the first date thereafter on which no Lease Default or Lease
Event of Default shall be in effect (in which case such payments or amounts
shall then be made to such other Person or Persons as the Lessee may designate)
and (ii) the Termination Date (or, if earlier, the date of any
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acceleration of the Certificates), in which case such amounts shall be applied
and allocated in the manner contemplated by Section 6.9(c)(i).
(c) (i) Except as otherwise provided in Sections 6.9(c)(ii), or 6.9(e), in
the event that any prepayment of the Notes or the Certificates, in whole or in
part, is required in accordance with the provisions of' Section 2.10 of the Loan
Agreement or Section 4.10 of the Trust Agreement, then any amount received
pursuant to Section 10 or 11 of the Lease or otherwise shall in each case be
distributed and paid in the following order of priority: first, ratably to the
Owner Trustee and the Administrative Agent with respect to their respective
out-of pocket costs and expenses regarding any such prepayment or sale of the
Equipment; second, ratably (based on principal amounts then outstanding under
the Notes) to the Lenders as provided in Section 2.10 of the Loan Agreement;
third, ratably (based on amounts then outstanding as Holder Advances) to the
Holders as provided in Section 4.10 of the Trust Agreement; fourth, ratably to
the Owner Trustee and the Administrative Agent regarding any other amounts owing
to either such party under the Operative Agreements; and fifth, the balance, if
any, of such amount remaining thereafter shall be distributed to the Owner
Trustee for distribution to the Holders.
(ii) Any insurance payment, requisition payment or other amount received by
the Administrative Agent that is not required to be paid over to the Lessee or
distributed shall be held by the Administrative Agent as security for the
obligations of the Lessee under the Lease and applied as set forth therein or
herein.
(d) (i) Except as otherwise provided in Section 6.9(e),
(A) An amount equal to any such payment identified as or which is is
Supplemental Rent received by the Administrative Agent for which provision as to
the application thereof is made in the Operative Agreements shall be applied
forthwith to the purpose for which such payment was made in accordance with the
terms thereof and otherwise shall be applied and allocated by the Administrative
Agent to the payment of any amounts (other than any such amounts payable
pursuant to the preceding provisions of this Section 6.9) then owing first,
ratably to the Owner Trustee and the Administrative Agent with respect any
Supplemental Rent then due and payable to such Person; second, ratably (based on
principal amounts then outstanding under the Notes) to the Lenders with respect
to any Supplemental Rent then due and payable to the Lenders; third, ratably
(based on amounts then outstanding as Holder Advances) to the Holders with
respect to any Supplemental Rent then due and payable to the Holders; and
fourth, the balance, if any, of such amount remaining thereafter shall be
distributed to the Owner Trustee for distribution to the Holders.
(B) Subject to Section 6.9(d)(ii), any payments received and amounts
realized by the Administrative Agent for which no provision as to the
application thereof is made in the Lease or this Section 6.9 or otherwise in any
Operative Agreement shall be distributed forthwith by the Administrative Agent
to the Owner Trustee for distribution pursuant to
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the Trust Agreement; provided, however, that if a Loan Agreement Event of
Default has occurred and is continuing, such amounts shall be paid to the
Lenders pursuant to the Loan Agreement.
(ii) Any payments received by the Administrative Agent for which provision
as to the application thereof is made in the Lease or any other Operative
Agreement, but not elsewhere in this Agreement, shall be applied to the purposes
for which such payments were made in accordance with the provisions of the Lease
or such other Operative Agreement, as the case may be.
(iii) The Administrative Agent in its reasonable judgment shall identify
the nature of each payment or amount received by the Administrative Agent and
apply and allocate each such amount in the manner specified above.
(e) All amounts constituting Excepted Property received by the
Administrative Agent shall be paid by the Administrative Agent to the Person or
Persons entitled thereto.
Ratable allocations under this Section 6.9 between the Administrative Agent
and the Owner Trustee shall be based upon the relative amount of costs, expenses
and other amounts owed to each such party at the particular time under the
particular provisions of the Operative Agreements.
6.10 Acceleration Upon Certain Events of Default.
Each of the parties hereto agrees that the occurrence of a Lease Event of
Default and the exercise of any remedies set forth in Section 15 of the Lease
with respect thereto shall immediately create a Loan Agreement Event of Default
and an acceleration of the Notes under the Loan Agreement and the Certificates
under the Trust Agreement.
SECTION 7. LESSEE'S INDEMNITIES
7.1 General Tax Indemnity.
(a) Indemnification. The Lessee shall pay and assume liability for, and
does hereby agree to indemnify, protect and defend all Indemnified Persons, and
hold them harmless against all Impositions (other than amounts addressed in and
either covered by or specifically excluded from the coverage of Section 7.2
hereof) on an After Tax Basis.
(b) The foregoing indemnity in Section 7.1(a) hereof shall not apply to any
Impositions for Taxes to the extent they result from the gross negligence or
willful misconduct of an Indemnified Person, or (subject to the last sentence of
Section 7.1(b)) to the extent such Taxes are based upon or measured by an
Indemnified Person's net income (other than Taxes that are, or are in the nature
of, sales, use, value added, transfer or property Taxes, and other than a
Covered
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Income Tax as defined in the following sentence). For purposes of this
Agreement, a "Covered Income Tax" shall mean an income Tax (including without
limitation a Tax imposed upon gross income or receipts) imposed on an
Indemnified Person by any state, local or foreign taxing authority (excluding
the United States federal government) in whose jurisdiction an Indemnified
Person (including without limitation for this purpose all entities with which it
is combined, integrated or consolidated in such taxing authority's jurisdiction)
would not engage in business, would not maintain an office or other place of
business, would not otherwise be located therein, and would not otherwise be
subject to such taxing authority but for an Indemnified Person's role in the
Operative Agreements and the transactions contemplated thereby, with respect to
the Equipment, its manufacture, construction, ordering, purchase, acceptance or
rejection, ownership, delivery, leasing, releasing, subleasing, possession, use,
operation, maintenance, storage, titling or retitling, licensing or
re-licensing, documentation, removal, return, sale (including without limitation
sale to the Lessee by an Indemnified Person pursuant to the terms hereof) or
other applications or dispositions thereof, or the presence of the Lessee in
such jurisdiction. The foregoing indemnity in Section 7.1(a) shall apply to any
Taxes upon or with respect to any of the enumerated matters of Section 7.1(a)
imposed on the Owner Trustee (including without limitation those based upon or
measured by the Owner Trustee's net income or other such Taxes that are, or are
in the nature of, a Tax on net income) other than such Taxes based on or
measured by any fees or compensation received by the Owner Trustee for services
rendered in connection with the transactions contemplated hereby.
(c) Payments. (i) Subject to the terms of Section 7.1(e) hereof, the Lessee
shall pay or cause to be paid all Impositions directly to the taxing authorities
where feasible and otherwise to the Indemnified Person, as appropriate, and the
Lessee shall at its own expense, upon such Indemnified Person's reasonable
request, furnish to such Indemnified Person copies of official receipts or other
satisfactory proof evidencing such payment.
(ii) In the case of Impositions for which no contest is conducted pursuant
to Section 7.1(e) hereof and which the Lessee pays directly to the taxing
authorities, the Lessee shall pay such Impositions prior to the latest time
permitted by the relevant taxing authority for timely payment. In the case of
Impositions for which the Lessee is to reimburse an Indemnified Person, the
Lessee shall make such payment within twenty (20) days after receipt by the
Lessee of demand by such Indemnified Person describing in reasonable detail the
nature of the Imposition and the basis for the demand (including the computation
of the amount payable), but in no event shall the Lessee be required to make
such payment prior to thirty (30) days before the latest time permitted by the
relevant taxing authority for timely payment. In the case of Impositions for
which a contest is conducted pursuant to Section 7.1(e) hereof, the Lessee shall
pay such Impositions or reimburse such Indemnified Person for such Impositions,
to the extent not previously paid or reimbursed pursuant to subsection (a),
prior to the latest time permitted by the relevant taxing authority for timely
payment after conclusion of all contests under Section 7.1(e) hereof.
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(iii) Impositions imposed with respect to Equipment for a Tax billing
period during which the Lease expires or terminates (unless the Lessee has
exercised its option to purchase the Equipment pursuant to Section 21.2 of the
Lease or to renew the Lease pursuant to Section 21.3 of the Lease) shall be
adjusted and prorated on a daily basis between the Lessee and the Lessor,
whether or not such Imposition is imposed before or after such expiration or
termination, and each party shall pay or reimburse the other for each party's
pro rata share thereof.
(d) Reports and Returns. (i) The Lessee shall be responsible for preparing
and filing all property and ad valorem tax returns in respect of each item of
Equipment. In case any other report or tax return shall be required to be made
with respect to any obligations of the Lessee under or arising out of subsection
(a) and of which the Lessee has knowledge or should have knowledge, the Lessee,
at its cost and expense, shall notify the relevant Indemnified Person of such
requirement and (except if such Indemnified Person notifies the Lessee that such
Indemnified Person intends to file such report or return) (A) to the extent
required or permitted by and consistent with applicable Laws, make and file in
its own name such return, statement or report: and (B) in the case of any other
such return, statement or report required to be made in the name of such
Indemnified Person, advise such Indemnified Person of such fact and prepare and
deliver to such Indemnified Person (together with payment of all Impositions
required to be paid at the time of filing such return, statement or report), at
least fifteen (15) Business Days prior to the date of any required filing, such
return, statement or report for filing by such Indemnified Person or, where such
return, statement or report shall be required to reflect items in addition to
any obligations of the Lessee under or arising out of subsection (a), provide
such Indemnified Person at the Lessee's expense with information sufficient to
permit such return, statement or report to be properly made with respect to any
obligations of the Lessee under or arising out of subsection (a). Such
Indemnified Person shall, upon the Lessee's request and at the Lessee's expense,
provide any data maintained by such Indemnified Person (and not otherwise
available to or within the control of the Lessee) with respect to each item of
Equipment which the Lessee reasonably requires to prepare any required tax
returns or reports.
(ii) The Lessee shall deliver to the Administrative Agent copies of all
property and ad valorem tax returns that it is required to file pursuant to
clause (i) above no later than fifteen (15) Business Days prior to the date
Lessee intends to file such tax returns.
(e) Contests of Impositions. (i) If a written claim is made against any
Indemnified Person or if any proceeding shall be commenced against such
Indemnified Person (including a written notice of such proceeding) for any
Impositions, such Indemnified Person shall promptly notify the Lessee in writing
and shall not take action with respect to such claim or proceeding without the
consent of the Lessee for thirty (30) days after the receipt of such notice by
the Lessee; provided, however, that, in the case of any such claim or
proceeding, if action shall be required by Law to be taken prior to the end of
such 30-day period, such Indemnified Person shall, in such notice to the Lessee,
inform the Lessee of such shorter period, and no action shall be taken with
respect to such claim or proceeding without the consent of the Lessee before two
(2)
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days before the end of such shorter period; provided, further, that the failure
of such Indemnified Person to give the notices referred to in this sentence
shall not diminish the Lessee's obligation hereunder except to the extent
failure to give such notice precludes the Lessee from contesting all or part of
such claim.
(ii) If, within thirty (30) days of receipt of such notice from the
Indemnified Person (or such shorter period as the Indemnified Person has
notified the Lessee is required by Law or regulation for the Indemnified Person
to commence such contest), the Lessee shall request in writing that such
Indemnified Person contest such Imposition, the Indemnified Person shall, at the
sole cost and expense of the Lessee, in good faith conduct and control such
contest (including, without limitation, by pursuit of appeals) relating to the
validity, applicability or amount of such Impositions (provided, however, that
(A) if such contest involves a tax other than a tax on net income and can be
pursued independently from any other proceeding involving a tax liability of
such Indemnified Person, the Indemnified Person, at the Lessee's request, shall
allow the Lessee to conduct and control such contest and (B) in the case of any
contest, the Indemnified Person may require the Lessee to conduct and control
such contest at the sole cost and expense of the Lessee) by, in the sole
discretion of the Person conducting and controlling such contest, (1) resisting
payment thereof, (2) not paying the same except under protest, if protest is
necessary and proper, (3) if the payment be made, using reasonable efforts to
obtain a refund thereof in appropriate administrative and judicial proceedings,
or (4) taking such other action as is reasonably requested by the Lessee from
time to time. If Lessee conducts and controls such contest, it shall use counsel
selected by it and consented to by the Indemnified Person (which consent shall
not be unreasonably withheld), except that in the event of any material conflict
of interest between Lessee and such Indemnified Person, such Indemnified Person
may retain separate counsel, the reasonable fees and expenses of which will be
paid by the Lessee.
(iii) The Person controlling any contest shall consult in good faith with
the non-controlling Person and shall keep the non-controlling party reasonably
informed as to the conduct of such contest; provided, that all decisions
ultimately shall be made in the sole discretion of the controlling party. The
parties agree that an Indemnified Person may at any time decline to take further
action with respect to the contest of any Imposition and may settle such contest
if such Indemnified Person shall waive its rights to any indemnity from the
Lessee that otherwise would be payable in respect of such claim (and any future
claim by any taxing authority, the contest of which is precluded by reason of
such resolution of such claim) and shall pay to the Lessee any amount previously
paid or advanced by the Lessee pursuant to this Section 7.1 by way of
indemnification or advance for the payment of an Imposition other than expenses
of such contest.
(iv) Notwithstanding the foregoing provisions of this Section 7.1, an
Indemnified Person shall not be required to take any action and the Lessee shall
not be permitted to contest any Impositions in its own name or that of the
Indemnified Person unless (A) the Lessee shall have agreed in writing to pay and
shall pay to such Indemnified Person on demand and on an After Tax Basis all
reasonable costs, losses and expenses that such Indemnified Person
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actually incurs in connection with contesting such Impositions, including,
without limitation, all reasonable legal, accounting and investigatory fees and
disbursements, and the amount of such Imposition should the contest be
unsuccessful, (B) in the case of a claim that must be pursued in the name of an
Indemnified Person (or an Affiliate thereof), the amount of the potential
indemnity (taking into account all similar or logically related claims that have
been or could be raised in any audit involving such Indemnified Person for which
the Lessee may be liable to pay an indemnity under this Section 7.1) exceeds
$100,000, (C) the Indemnified Person shall have reasonably determined that the
action to be taken will not result in any material danger of sale, forfeiture or
loss of any Equipment, or any part thereof or interest therein, will not
interfere with the payment of Rent, and will not result in risk of criminal
liability, (D) if such contest shall involve the payment of the Imposition prior
to the contest, the Lessee shall provide to the Indemnified Person an
interest-free advance in an amount equal to the Imposition that the Indemnified
Person is required to pay (with no additional net after-tax cost to such
Indemnified Person), (E) in the case of a claim that must be pursued in the name
of an Indemnified Person (or an Affiliate thereof), the Lessee shall have
provided to such Indemnified Person an opinion of independent tax counsel
selected by the Indemnified Person and reasonably satisfactory to the Lessee
stating that a reasonable basis exists to contest such claim (or, in the case of
an appeal of an adverse determination, an opinion of such counsel to the effect
that the position asserted in such appeal will more likely than not prevail) and
(F) no Lease Event of Default shall have occurred and be continuing. In no event
shall an Indemnified Person be required to appeal an adverse judicial
determination to the United States Supreme Court. In addition, an Indemnified
Person shall not be required to contest any claim in its name (or that of an
Affiliate) if the subject matter thereof shall be of a continuing nature and
shall have previously been decided adversely by a court of competent
jurisdiction pursuant to the contest provisions of this Section 7.1, unless
there shall have been a change in Law (or interpretation thereof) and the
Indemnified Person shall have received, at the Lessee's expense, an opinion of
independent tax counsel selected by the Indemnified Person and reasonably
acceptable to the Lessee stating that as a result of such change in Law (or
interpretation thereof), it is more likely than not that the Indemnified Person
will prevail in such contest.
7.2 Special Income Tax Indemnity.
(a) Indemnity. The Lessee will indemnify the Lessor and each Holder on an
After Tax Basis for (i) any loss, reduction, failure to claim (based on an
opinion of tax counsel that there is no reasonable basis to claim),
disallowance, recapture, or deferral, in whole or in part, of any tax benefits
that the Lessor or such Holder has claimed in connection with the Equipment and
the transactions contemplated by the Operative Agreements and any costs,
expenses, losses or breakage incurred by the Lessor or such Holder in connection
therewith, and (ii) any inclusion (an "Inclusion") in the Lessor's or such
Holder's foreign, federal, state or local gross income of any amounts other than
(A) Basic Rent, Renewal Rent, Stipulated Loss Value, or the purchase price paid
by Lessee pursuant to Section 21.2 of the Lease, in the amounts and at the times
provided in the Lease; (B) payments made hereunder or under the Lease on an
After-Tax Basis; (C) any other amount to the extent that such income Inclusion
is completely offset by a deduction of the same
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character and in the same taxable year as the Inclusion; and (D) any amount
designated as a pre-tax fee or interest payment due and owing to the Lessor or
such Holder under the terms of the Operative Agreements, each loss and Inclusion
under clause (a)(i) and (ii) constituting a "Tax Loss." This tax indemnity shall
constitute an "all events" indemnity, covering, by way of example only, any Tax
Loss resulting from a change of law, change in tax rates, recharacterization of
the transaction for tax purposes, and the Lessor's inability to currently
utilize any tax benefits. Notwithstanding the foregoing, the Lessee shall not
indemnify the Lessor or any Holder for (i) a Tax Loss resulting solely from (x)
such Holder's failure to take the actions within its control that are reasonably
necessary to secure the benefits that are the subject of the Tax Loss or (y)
such Holder's failure to prevent the Trust from becoming an entity separately
subject to United States federal income tax liability; or (ii) a Tax Loss to the
extent that such Tax Loss exceeds the amount that the Tax Loss would have been
had the Lessor not transferred, assigned, pledged or sold its interest in the
Equipment after the applicable Closing Date or had such Holder not transferred,
assigned, pledged or sold its interest in its Certificate or in the Trust or
Trust Estate after the applicable Closing Date.
(b) Computation of Indemnity and Gross-Up; Payment. The amount of the
indemnity payable as a result of a Tax Loss, and the gross-up of the indemnity
payment for income taxes attributable to the indemnity payment hereunder, shall
be computed using the actual rate(s) of United States federal, state and local
tax then in effect and applicable to the Lessor or the affected Holder, as the
case may be. An event or occurrence giving rise to a Tax Loss for federal income
tax purposes shall be deemed to give rise to a Tax Loss at the same time and in
the same amount for state and local income tax purposes. At the Lessor's option,
the Lessee shall pay the indemnity in installments on each subsequent Scheduled
Payment Date or by an amendment to the Lease.
(c) Certain Adjustments. If the Lessor shall suffer a Tax Loss involving a
tax benefit that was taken into account in calculating any amount under the
Lease, then such value or values shall be adjusted to take into account the
unavailability, if any, of such tax benefit.
(d) Contests. Any contests of claims arising in connection with a Tax Loss
shall be conducted under the provisions set forth in Section 7.1(e) hereof,
except that (i) references to the Indemnified Person shall be to the Lessor or
the Holders, or both, as the case may be; and (ii) references to an Imposition
shall be to a Tax Loss.
7.3 General Indemnification and Waiver of Certain Claims.
The Lessee hereby assumes liability for, and does hereby agree, whether or
not any of the transactions contemplated hereby are consummated, to indemnify,
protect, save, defend, exonerate, pay and hold harmless each Indemnified Person
on an After-Tax Basis from and against any and all obligations, fees,
liabilities, losses, interest, damages, punitive damages, penalties, fines,
claims, demands, actions, suits, judgments, costs and expenses (collectively
"Expenses"), including, without limitation, reasonable legal fees and expenses
payable pursuant to
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Section 2.5(a) (including, without limitation, such reasonable legal fees and
expenses incurred in connection with the enforcement or modification of this
Agreement or any other Operative Agreement), of every kind and nature whatsoever
imposed on, incurred by, or asserted against any Indemnified Person, in any way
relating to or arising out of (a) the Equipment, including without limitation
the manufacture, construction, ordering, purchase, acceptance or rejection,
ownership, delivery, leasing, releasing, subleasing, possession, use, operation,
maintenance, storage, titling or re-titling, licensing or re-licensing,
documentation, removal, return, sale (including, without limitation, sale by an
Indemnified Person to the Lessee pursuant to the terms of the Lease) or other
applications or dispositions of the Equipment, including, without limitation,
any of such as may arise from (i) loss or damage to any property or death or
injury to any Person, (ii) patent or latent defects in the Equipment (whether or
not discoverable by the Lessee or any Indemnified Person), (iii) any claims
based on strict liability in tort or otherwise, (iv) any claims based on patent,
trademark or copyright infringement and (v) any claims relating to any
Environmental Violation, Hazardous Material or otherwise based on liability
arising under any Environmental Law or other pollution control Law, (b) any
failure on the part of the Lessee to perform or comply with any of the terms of
the Lease, any other Operative Agreement or any document, instrument, agreement
or contract entered into in relation hereto or otherwise in relation to the
Equipment, (c) any claims, Liens or legal processes regarding such Indemnified
Person's title to or interest in the Equipment (except as such arise in
connection with Lessor's Liens), (d) any representation or warranty made by the
Lessee under or in connection with this Agreement, the Lease, or any other
Operative Agreement or any certificate or report delivered by the Lessee
pursuant hereto or thereto which shall have been false or incorrect in any
material respect when made or deemed made, or (e) the Operative Agreements
(including, without limitation, Section 8 of this Agreement). The Lessee shall
not be required to indemnify an Indemnified Person for any claims resulting from
acts which would constitute the willful misconduct or gross negligence of such
Indemnified Person. The Lessee shall give each Indemnified Person prompt notice
of any occurrence, event or condition known to the Lessee as a consequence of
which any Indemnified Person is or is reasonably likely to be entitled to
indemnification hereunder. The indemnification provided in this Section 7.3
shall specifically apply to and include claims or actions brought by or on
behalf of employees of the Lessee notwithstanding any immunity to which the
Lessee may otherwise be entitled under any industrial or worker's compensation
Laws. The Lessee shall promptly upon request of any such Indemnified Person (but
in any event within 30 days of such request) reimburse such Indemnified Person
for amounts expended by it in connection with any of the foregoing or pay such
amounts directly.
In case any action, suit or proceeding is brought against any Indemnified
Person in connection with any claim indemnified against hereunder, such
Indemnified Person will, after receipt of notice of the commencement of such
action, suit or proceeding, notify the Lessee thereof, enclosing a copy of all
papers served upon such Indemnified Person; provided, failure to deliver such
notice will not impair the rights of indemnification of such Indemnified Person
unless such failure by the Indemnified Person materially and adversely affects
the ability of the Lessee to defend such action, suit or proceeding. The Lessee
shall, at its sole cost and expense, assume control of such action, suit or
proceeding (with counsel to be selected by the Lessee and
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consented to by the Indemnified Person, such consent not to be unreasonably
withheld). Notwithstanding any of the foregoing to the contrary, the Lessee
shall not be entitled to pursue any such action, suit or proceeding if (i) a
Lease Event of Default shall have occurred and be continuing, (ii) such action,
suit or proceeding will involve a material risk of the sale, forfeiture or loss
of, or the creation of any lien on the Equipment unless the Lessee shall have
posted a bond or other security reasonably satisfactory to the Owner Trustee and
the Holders in respect to such risk, (iii) such proceedings, in the good faith
opinion of the Indemnified Person, entail any risk of criminal liability to such
Indemnified Person or (iv) a conflict of interest exists between the Indemnified
Person and the Lessee with respect to such action, suit or proceeding. The
Indemnified Person may participate at its own expense and with its own counsel
in any judicial proceeding controlled by the Lessee pursuant to the preceding
provisions; provided, in the event of a material conflict of interest between
the Lessee and such Indemnified Person, the Lessee shall pay the costs and
expenses of counsel for such Indemnified Person.
Each Indemnified Person shall supply the Lessee with such information
reasonably available to it and reasonably requested by the Lessee as is
necessary or advisable for the Lessee to control or participate in any
proceeding to the extent permitted by this Section 7.3. Unless a Lease Event of
Default shall have occurred and be continuing, each Indemnified Person agrees
not to enter into a settlement or other compromise with respect to any such
action, suit or proceeding without the prior written consent of the Lessee,
which consent shall not be unreasonably withheld or delayed, unless the
Indemnified Person waives its right to be indemnified with respect to such
action, suit or proceeding. The Lessee shall supply the Indemnified Person with
such information reasonably requested by the Indemnified Person as is necessary
or advisable for the Indemnified Person to control or participate in any
proceeding to the extent permitted by this Section 7.3. In addition, the Lessee
shall be subrogated to the rights of the Indemnified Person against any
manufacturer or maintenance provider with respect to any such action, suit or
proceeding with respect to which the Lessee has actually reimbursed such
Indemnified Person for amounts expended by it or has actually paid such amounts
directly pursuant to this Section 7.3; provided, further to do so will not
impair the rights of indemnification of such Indemnified Person unless the
failure by the Indemnified Person to deliver such notice materially and
adversely affects the ability of the Lessee to defend such action, suit or
proceeding.
SECTION 8. YIELD PROTECTION; TAXES; COMPENSATION.
8.1 Yield Protection Provisions.
(a) If, after the date hereof, any Participant has determined that the
adoption or the becoming effective of, or any change in, or any change by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof in the interpretation or administration
of, any applicable Law regarding capital adequacy, or compliance by such
Participant or its parent with any request or directive regarding capital
adequacy (whether or not having the force of Law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on such Participant's or its parent's capital or
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assets as a consequence of such Participant's obligations hereunder to a level
below that which such Participant or its parent could have achieved but for such
adoption, effectiveness, change or compliance (taking into consideration such
Participant's or its parent's policies with respect to capital adequacy), then,
upon notice from such Participant to the Owner Trustee, the Owner Trustee shall
be obligated to pay (with funds provided by the Lessee as Supplemental Rent) to
such Participant such additional amount or amounts as will compensate such
Participant for such reduction. Each determination by such Participant of
amounts owing under this Section 8.1 shall, absent manifest error, be conclusive
and binding on the parties hereto.
(b) Notwithstanding any other provision herein, if the adoption of or any
change in any Requirement of Law or in the interpretation or application thereof
occurring after the Closing Date shall make it unlawful for any Participant to
fund or maintain its Loan Advances or its Holder Advances, as the case may be,
based upon LIBOR, (a) such Participant shall promptly give written notice of
such circumstances to the Owner Trustee, the Administrative Agent and the Lessee
(which notice shall be withdrawn whenever such circumstances no longer exist),
(b) the commitment of such Participant to continue Loan Advances or Holder
Advances, as the case may be, based upon LIBOR shall forthwith be canceled and
(c) the interest rate on the outstanding Loan Advances and the yield on the
outstanding Holder Advances, as the case may be, shall automatically begin to
accrue or be computed, as the case may be, based upon the CD Rate (and all
calculations and definitions shall substitute CD Rate for LIBOR) on the next
succeeding Scheduled Payment Date or within such earlier period as required by
Law until such time as such Participant shall notify the Owner Trustee, the
Administrative Agent and the Lessee that it is no longer unlawful for such
Participant to fund or maintain Loan Advances or Holder Advances, as the case
may be, based upon LIBOR, whereupon the interest rate on the outstanding Loan
Advances and the yield on the outstanding Holder Advances shall automatically be
restored to accrue or be computed based upon LIBOR.
(c) If the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof applicable to any Participant, or
compliance by any Participant with any request or directive (whether or not
having the force of Law) from any central bank or other Governmental Authority,
in each case made subsequent to the Closing Date (or, if later, the date on
which a Participant becomes a Participant):
(i) shall subject such Participant to any Tax of any kind whatsoever with
respect to the Operative Agreements, ownership, maintenance, or financing of the
Loan Advances or Holder Advances or payments of other amounts due, as the case
may be, made by it, or change the basis of taxation of payments to such
Participant in respect thereof (except for Non-Excluded Taxes covered by Section
8.2 hereof (including Non- Excluded Taxes imposed solely by reason of any
failure of such Participant to comply with its obligations under Section 8.2(b)
hereof) and changes in Taxes measured by or imposed upon the overall net income,
or franchise Tax (imposed in lieu of such net income Tax), of such Participant
or its applicable lending office, or any branch, or any affiliate thereof);
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(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement (including
without limitation any requirement imposed by the Board of Governors of
the Federal Reserve System) against assets held by, deposits or other
liabilities in or for the account of, advances, loans or other
extensions of credit by, or any other acquisition of funds by, any
office of such Participant which is not otherwise included in the
determination of LIBOR hereunder;
(iii) shall impose on such Participant any other condition
(excluding any Tax of any kind whatsoever); or
(iv) shall impose upon any Indemnified Party any other expense
(including, without limitation, reasonable attorneys' fees and
expenses, and expenses of litigation or preparation therefor in
contesting any of the foregoing) with respect to this Agreement, the
other Operative Agreements, the ownership, maintenance or financing of
the Loan Advances or Holder Advances or payments of amounts due under
the Operative Agreements or any obligation of any Indemnified Party to
advance funds under the Operative Agreements, the Loan Advances by the
Lenders, the Holder Advances by the Holders or otherwise in respect of
this Agreement, the other Operative Agreements or the ownership,
maintenance or financing of the Loans or the Holder Advances;
and the result of any of the foregoing in (i), (ii), (iii) or (iv) above is to
increase the cost to such Participant, by an amount which such Participant deems
to be material, of continuing or maintaining the Loan Advances or Holder
Advances, as the case may be, based upon LIBOR, then, upon notice to the Owner
Trustee from such Participant, through the Administrative Agent, in accordance
herewith, the Owner Trustee shall be obligated to promptly pay (with funds
provided by the Lessee as Supplemental Rent) to such Participant, within 10 days
after its demand, any additional amounts necessary to compensate such
Participant for such increased cost or reduced amount receivable.
(d) If a Participant becomes entitled to claim any additional amounts
pursuant to this Section 8.1, it shall provide prompt written notice thereof to
the Owner Trustee, through the Administrative Agent, certifying (x) that one of
the events described in this Section 8.1 has occurred and describing in
reasonable detail the nature of such event, (y) as to the increased cost or
reduced amount resulting from such event and (z) as to the additional amount
demanded by such Participant and a reasonably detailed explanation of the
calculation thereof. Such a certificate as to any additional amounts payable
pursuant to this Section 8.1 submitted by such Participant to the Owner Trustee,
through the Administrative Agent, shall be conclusive and binding on the parties
hereto in the absence of manifest error.
8.2 Withholding Taxes.
(a) Except as provided below in this Section 8.2, all payments made by the
Owner Trustee under this Agreement, any Operative Agreements, the Notes and the
Certificates,
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as the case may be, shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp or other
Taxes, now or hereafter imposed, levied, collected, withheld or assessed by any
court or Governmental Authority excluding Taxes measured by or imposed upon the
overall net income of any Participant or its applicable lending office, or any
branch or affiliate thereof, and all franchise Taxes or Taxes on the overall
capital or net worth of any Participant or its applicable lending office, or any
branch or affiliate thereof, in each case imposed in lieu of income Taxes,
imposed: (i) by the jurisdiction under the Laws of which such Participant,
applicable lending office, branch or affiliate is organized or is located, or in
which its principal executive office is located, or any nation within which such
jurisdiction is located or any political subdivision thereof, or (ii) by reason
of any connection between the jurisdiction imposing such Tax and such
Participant, applicable lending office, branch or affiliate other than a
connection arising solely from such Participant having executed, delivered or
performed its obligations, or received payment under or enforced, this
Agreement, the Operative Agreements, the Notes, or the Certificates, as the case
may be. If any such non-excluded Taxes ("Non-Excluded Taxes") are required to be
withheld from any amounts payable to the Administrative Agent or any Participant
hereunder or under the Notes or the Certificates, (A) the amounts so payable to
the Administrative Agent or such Participant shall be increased to the extent
necessary to yield to the Administrative Agent or such Participant (after
payment of all Non-Excluded Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Agreement, the Notes
or the Certificates; provided, however, that the Owner Trustee shall be entitled
to deduct and withhold any Non-Excluded Taxes and shall not be required to
increase any such amounts payable to such Participant if such Participant is not
organized under the Laws of the United States of America or a state thereof and
such Participant fails to comply with the requirements of paragraph (b) of this
subsection whenever any Non-Excluded Taxes are payable by the Owner Trustee, and
(B) as promptly as possible thereafter the Owner Trustee shall send to the
Administrative Agent for its own account or for the account of such Participant,
as the case may be, a certified copy of an original official receipt received by
the Owner Trustee showing payment thereof. If the Owner Trustee fails to pay any
Non-Excluded Taxes when due to the appropriate taxing authority or fails to
remit to the Administrative Agent the required receipts or other required
documentary evidence, the Owner Trustee shall indemnify (with funds provided by
the Lessee as Supplemental Rent) the Administrative Agent and any Participant
for any incremental Taxes, interest or penalties that may become payable by the
Administrative Agent or such Participant as a result of any such failure.
(b) If any Participant is not incorporated under the laws of the United
States of America or any state thereof such Participant shall:
(i) on or before the date of any payment by the Owner Trustee
under this Agreement, the Notes or the Certificates, as the case may
be, to such Participant, deliver to the Owner Trustee and the
Administrative Agent (A) two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224, or successor applicable
form, as the case may be, certifying that it is entitled to receive
payments under this Agreement, the Notes or the Certificate, as the
case may be, without deduction or withholding of any
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United States federal income Taxes and (B) an Internal Revenue Service
Form W-8 or W- 9, or any successor applicable form, as the case may be,
certifying that it is entitled to an exemption from United States
backup withholding Tax;
(ii) deliver to the Owner Trustee and the Administrative Agent
two further copies of any such form or certification on or before the
date that any such form or certification expires or becomes obsolete
and after the occurrence of any event requiring a change in the most
recent form previously delivered by it to the Owner Trustee; and
(iii) (A) obtain such extensions of time for filing and
complete such forms or certifications as may reasonably be requested by
the Owner Trustee or the Administrative Agent in order to establish the
legal entitlement of such Participant to an exemption from withholding
with respect to payments under this Agreement, the Notes or the
Certificate, as the case may be; or
(B) in the case of any such Participant that is not a
"bank" within the meaning of Section 881(c)(3)(A) of the Code, (1)
represent to the Lessee and the Owner Trustee (for the benefit of the
Owner Trustee and the Administrative Agent) that it is not a bank
within the meaning of Section 881(c)(3)(A) of the Code, (2) agree to
furnish to the Owner Trustee on or before the date of any payment by
the Owner Trustee, with a copy to the Administrative Agent two accurate
and complete original signed copies of Internal Revenue Service Form
W-8, or any successor applicable form, as the case may be, certifying
to such Participant's legal entitlement at the date of such certificate
to an exemption from U.S. withholding Tax under the provisions of
Section 881(c) of the Code with respect to payments to be made under
this Agreement, the Notes or the Certificates, as the case may be (and
to deliver to the Lessee, the Owner Trustee and the Administrative
Agent two further copies of such form on or before the date it expires
or becomes obsolete and after the occurrence of any event requiring a
change in the most recently provided form and, if necessary, obtain any
extensions of time reasonably requested by the Lessee, the Owner
Trustee or the Administrative Agent for filing and completing such
forms), and (3) agree, to the extent legally entitled to do so, upon
reasonable request by the Lessee or the Owner Trustee, to provide to
the Lessee and the Owner Trustee (for the benefit of the Owner Trustee
and the Administrative Agent) such other forms as may be reasonably
required in order to establish the legal entitlement of such
Participant to an exemption from withholding with respect to payments
under this Agreement, the Notes or the Certificates, as the case may
be.
Notwithstanding the above, if any change in treaty or other Law has occurred
after the date such Person becomes a Participant hereunder which renders all
such forms inapplicable or which would prevent such Participant from duly
completing and delivering any such form with respect to it and such Participant
so advises the Owner Trustee and the Administrative Agent then such Participant
shall be exempt from such requirements. Each Person that shall become a
Participant or a participant of a Participant shall, upon the effectiveness of
the related transfer, be required to
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provide all of the forms, certifications and statements required pursuant to
this Section 8.2(b); provided, that in the case of a participant of a
Participant the obligations of such participant of such Participant pursuant to
this Section 8.2(b) shall be determined as if the participant of such
Participant were a Participant except that such participant of such Participant
shall furnish all such required forms, certifications and statements to such
Participant from which the related participation shall have been purchased.
8.3 Compensation.
The Owner Trustee promises to indemnify (with funds provided by the Lessee
as Supplemental Rent) and to hold each Participant harmless from any loss or
expense which such Participant may sustain or incur as a consequence of the
failure of the Lessee to close on any funding to be made on a Commencement Date
as identified in any Certificate of Delivery and Acceptance or as a consequence
of the making of any payment of Basic Rent or Renewal Rent on any date other
than a Scheduled Payment Date. Such indemnification shall be an amount equal to
(i) the amount of interest or yield, as the case may be, which would have
accrued or been realized on the amount not funded or the amount paid, as the
case may be, for the period from the date of such failure to close or such
payment, as the case may be, to the next succeeding Scheduled Payment Date at
the rate of interest yield, as the case may be, provided for in the Operative
Agreements minus (ii) the amount of interest (as reasonably determined by such
Participant) which would have accrued to such Participant on such amount by
placing such amount on deposit for a comparable period with leading banks in the
London interbank market.
SECTION 9. MISCELLANEOUS
9.1 Consents.
Each Holder hereby covenants and agrees that it shall not unreasonably
withhold its consent to any consent requested of the Owner Trustee under the
terms of the Operative Agreements that by its terms is not to be unreasonably
withheld by the Owner Trustee.
9.2 Appointment of Agent.
The Owner Trustee, the Holders and the Lenders hereby designate and appoint
the Administrative Agent as the agent for each such Person under this Agreement
and the other Operative Agreements to take such action on behalf of such Person
under the provisions of Section 6.9 of this Agreement, to receive notices,
documents and other items under the Operative Agreements (including, without
limitation, pursuant to Sections 2.3(c), 2.8, 3.2(l), 3.3(m), 4.1(a), 4.2(c),
5.3, 5.4, 5.6 and 5.8 of this Agreement and Sections 19 and 21.1 of the Lease)
and to take such other action, exercise such powers and perform such duties as
are expressly delegated to the Administrative Agent by the terms of this
Agreement and the other Operative Agreements, together with such other powers as
are reasonably incidental thereto. The Owner Trustee and the
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Holders, as applicable, hereby designate and appoint the Administrative Agent as
the collateral agent for each such Person under this Agreement and the other
Operative Agreements to accept and hold the Liens (a) securing the obligations,
agreements and covenants of the Owner Trustee in favor of the Holders under the
Operative Agreements and granted by the Owner Trustee in favor of the
Administrative Agent for the benefit of the Holders under the Loan Agreement and
(b) securing the obligations, agreements and covenants of the Lessee under the
Lease and the other Operative Agreements (to the extent such obligations run in
favor of the Owner Trustee or the Holders) granted by the Lessee in favor of the
Owner Trustee for the benefit of the Holders under the Lease and assigned by the
Owner Trustee in favor of the Administrative Agent pursuant to various Uniform
Commercial Code financing statements. The Owner Trustee hereby designates and
appoints the Administrative Agent as its attorney-in-fact for the purpose of
executing UCC-1 financing statements and UCC-3 assignments on behalf of the
Owner Trustee to evidence the assignment to the Administrative Agent of UCC-1
financing statements granted by the Lessee in favor of the Owner Trustee. The
Administrative Agent hereby accepts such appointments and agrees, promptly upon
receipt by the Administrative Agent, to forward copies of all such notices,
documents and other items (referenced in the first sentence of this Section 9.2)
to the Owner Trustee, the Holders and the Lenders. The Administrative Agent
further agrees for the benefit of the Owner Trustee and each Holder and Lender
to act on behalf of such parties respecting Uniform Commercial Code filings
pertaining to the Equipment and other filings evidencing Liens on the Equipment,
to the extent such Uniform Commercial Code filings and other filings relate to
Liens in favor of any such party and are made in connection with the Overall
Transaction. The preceding sentence is intended as an agreement among the
Administrative Agent, the Owner Trustee, and each Holder and Lender and shall in
no way impact or diminish the obligations of the Lessee under the Operative
Agreements. For purposes of this Section 9.2, the Lenders hereby reaffirm their
appointment of the Administrative Agent under the Loan Agreement, and the
Administrative Agent hereby reaffirms its acceptance of such appointment. The
parties to this Agreement further agree that any successor Administrative Agent
appointed pursuant to the terms of the Loan Agreement shall also be subject to
approval by the Required Holders.
9.3 Notices.
Unless otherwise expressly specified or permitted by the terms hereof, all
communications and notices provided for herein shall be in writing or by a
telecommunications device capable of creating a written record, and any such
notice shall become effective (a) upon personal delivery thereof, including
without limitation by express mail or courier service, (b) in the case of notice
by United States mail, certified or registered, postage prepaid, return receipt
requested, upon receipt thereof or (c) in the case of notice by such a
telecommunications device, upon transmission thereof; provided, such
transmission is promptly confirmed by any of the methods set forth in clauses
(a) or (b) above or this clause (c), in each case addressed to each party hereto
at its address set forth below or, in the case of any such party hereto, at such
other address as such party may from time to time designate by written notice to
the other parties hereto:
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If to the Lessee: Apple South, Inc.
Corporate Headquarters
Xxxxxxx at Washington
Xxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxx,
Chief Financial Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Owner
Trustee: First Security Bank, National Association
00 Xxxxx Xxxx Xxxxxx, 0xx Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attention: Xx. Xxx X. Xxxxx
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to: the Holder at the address set forth below
If to the Holder: SunTrust Bank, Atlanta
00 Xxxx Xxxxx, Mail Code 130
Xxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxx X. XxxXxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Administrative
Agent: SunTrust Bank, Atlanta
00 Xxxx Xxxxx, Mail Code 126
Xxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to any Lender: To the addresses of such Lender set forth on the
signature pages to the Loan Agreement
If to any Person which becomes a party to this Agreement (including without
limitation as a Lender) after the Closing Date, to such address as such Person
may from time to time designate by written notice to the other parties hereto.
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9.4 Successors and Assigns.
This Agreement shall be binding upon and shall inure to the benefit of, and
shall be enforceable by, the parties hereto and their respective successors and
assigns as permitted by and in accordance with the terms of the Operative
Agreements, including, without limitation, each successive holder of any
Certificate and each successive holder of any Note issued and delivered pursuant
to this Agreement, the Trust Agreement or the Loan Agreement. Except as
expressly provided herein or in the other Operative Agreements, no party hereto
may assign its interests herein without the consent of the parties hereto.
9.5 Governing Law; Submission To Jurisdiction.
THIS AGREEMENT SHALL BE IN ALL RESPECTS GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, WITHOUT GIVING EFFECT TO ANY
CONFLICT-OF-LAWS RULES. EACH PARTY TO THIS AGREEMENT AND THEIR RESPECTIVE
SUCCESSORS AND ASSIGNS PERMITTED HEREUNDER, (I) HEREBY IRREVOCABLY SUBMITS FOR
ITSELF AND ITS PROPERTY TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE
STATE OF GEORGIA IN XXXXXX COUNTY, AND TO THE NON-EXCLUSIVE JURISDICTION OF THE
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA, FOR THE
PURPOSES OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF THIS AGREEMENT
OR ANY OTHER OPERATIVE AGREEMENT TO WHICH IT IS A PARTY, THE SUBJECT MATTER OF
ANY THEREOF OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY BROUGHT BY
ANY PARTY OR PARTIES THERETO, OR THEIR SUCCESSORS OR ASSIGNS, (II) HEREBY
WAIVES, AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE, OR OTHERWISE,
IN ANY SUCH SUIT, ACTION OR PROCEEDING, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM,
THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER, OR THAT THIS
AGREEMENT OR ANY OTHER OPERATIVE AGREEMENT TO WHICH IT IS A PARTY OR THE SUBJECT
MATTER OF ANY THEREOF OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY
MAY NOT BE ENFORCED IN OR BY SUCH COURTS AND (III) HEREBY WAIVES ITS RIGHT TO A
JURY TRIAL TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW. EACH OF THE
PARTIES TO THIS AGREEMENT CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY
SUCH PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO SUCH PARTY AT ITS
ADDRESS SPECIFIED IN SECTION 9.3.
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9.6 Severability.
Whenever possible, each provision of this Agreement shall be interpreted in
such manner as to be effective and valid under applicable Law, but if any
provision of this Agreement shall be prohibited by or invalid under the Laws of
any applicable jurisdiction, such provision, as to such jurisdiction, shall be,
to the extent permitted by Law, ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement in such jurisdiction or in any other
jurisdiction.
9.7 Counterparts.
This Agreement may be executed in any number of counterparts (and each of
the parties hereto shall not be required to execute the same counterpart). Each
counterpart of this Agreement including a signature page executed by each of the
parties hereto shall be an original counterpart of this Agreement, but all such
counterparts together shall constitute one instrument.
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9.8 The Lessee's Right to Quiet Enjoyment.
Each party to this Agreement acknowledges notice of, and consents in all
respects to, the terms of the Lease, and expressly agrees that with respect to
the Lease, so long as no Lease Event of Default has occurred and is continuing
thereunder, it or any Person acting on its authority, shall not, through its or
any such Person's actions or inactions, interfere with the Lessee's rights under
the Lease, including without limitation the right to possession, use and quiet
enjoyment by the Lessee or any permitted sublessee of the Equipment leased
thereunder.
9.9 Limitations of Liability.
(a) Neither the Lenders, the Owner Trustee, the Holders nor the
Administrative Agent shall have any obligation or duty to the Lessee, to any
other party hereto or to others with respect to the transactions contemplated
hereby, except those obligations or duties of such parties expressly set forth
in this Agreement and the other Operative Agreements, and neither the Lenders,
the Owner Trustee, the Holders nor the Administrative Agent shall be liable for
performance by any other party hereto of such other party's obligations or
duties hereunder. Without limiting the generality of the foregoing, under no
circumstances whatsoever shall the Lenders, the Holders or the Administrative
Agent be liable to the Lessee or any other Person for any action or inaction on
the part of the Owner Trustee in connection with the transactions contemplated
herein, whether or not such action or inaction is caused by the willful
misconduct or gross negligence of the Owner Trustee, unless such action or
inaction is at the direction of the Lenders, the Holders or the Administrative
Agent, as the case may be.
(b) It is expressly understood and agreed by and among the Owner Trustee,
the Lessee, the Holders, the Lenders and the Administrative Agent, and their
respective successors and permitted assigns that, subject to the proviso
contained in this Section 9.9(b), all representations, warranties and
undertakings of the Owner Trustee hereunder shall be binding upon the Owner
Trustee only in its capacity as the Owner Trustee under the Trust Agreement, and
(except as expressly provided herein) the Owner Trustee shall not be liable in
its individual capacity (i) for any breach thereof, except for its gross
negligence or willful misconduct, or (ii) for breach of its covenants,
representations and warranties contained herein, except to the extent expressly
covenanted or made in its individual capacity; provided, however, that nothing
in this Section 9.9(b) shall be construed to limit in scope or substance those
representations and warranties of the Owner Trustee made expressly in its
individual capacity set forth herein. The term "Owner Trustee" as used in this
Agreement shall include any successor trustee under the Trust Agreement.
9.10 Confidentiality.
Each of the Owner Trustee, the Lenders, the Holders and the Administrative
Agent agrees to exercise its best efforts (and, in any event, with at least the
same degree of care as it ordinarily exercises with respect to confidential
information of its other customers) to keep any information
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delivered or made available by the Lessee to it, including, without limitation,
information obtained by the Owner Trustee, such Lender, such Holder or the
Administrative Agent, as the case may be, by reason of a visit or investigation
by any Person contemplated in Section 5.2, confidential from any one other than
persons employed or retained by the Owner Trustee, such Lender, such Holder or
the Administrative Agent, as the case may be, who are or are expected to become
engaged in evaluating, approving, structuring or administering the transactions
contemplated by the Operative Agreements; provided, however that nothing herein
shall prevent the Owner Trustee, any Lender, any Holder or the Administrative
Agent from disclosing such information (i) to the Owner Trustee, any other
Lender, any other Holder or the Administrative Agent, as the case may be, (ii)
upon the order of any court or administrative agency, (iii) upon the request or
demand of any regulatory agency or authority having jurisdiction over the Owner
Trustee, such Lender, such Holder or the Administrative Agent, as the case may
be, (iv) which has been publicly disclosed other than by an act or omission of
the Owner Trustee, such Lender, such Holder or the Administrative Agent, as the
case may be, except as permitted herein, (v) to the extent reasonably required
in connection with any litigation (with respect to this Agreement, any of the
other Operative Agreements, in connection with any of the foregoing, or any
other obligations of the Lessee or any Subsidiary owing to the Owner Trustee,
any Lender, any Holder or the Administrative Agent, as the case may be) to which
the Owner Trustee, such Lender, such Holder, the Administrative Agent or their
respective Affiliates may be a party, (vi) to the extent reasonably required in
connection with the exercise of any remedy hereunder, (vii) to legal counsel and
independent auditors of the Owner Trustee, such Lender, such Holder or the
Administrative Agent, as the case may be, and (viii) to any actual or proposed
participant, assignee or other transferee of all or part of its rights hereunder
which has agreed in writing to be bound by the provisions of this Section 9.10.
9.11 Effectiveness and Survival of Indemnities.
All indemnification obligations of the Lessee, including, without
limitation, the indemnities set forth in Section 2.5 and Sections 7 and 8, shall
apply from the date of the execution of this Agreement and shall survive the
expiration or earlier termination of this Agreement, the other Operative
Agreements, and all other documents, instruments, agreements and contracts
entered into in connection herewith or otherwise relating to the Equipment, and
are expressly made for the benefit of, and shall be enforceable by, each
Indemnified Person. Notwithstanding anything in this Agreement or in any other
document or agreement to the contrary, any indemnity provided by any Person
hereunder (including without limitation Sections 7.1, 7.2, 8.1, 8.2 or 8.3) or
in any other Operative Agreement shall survive the termination of this
Agreement, the Lease and any other Operative Agreement.
9.12 Compliance Certificate.
The Compliance Certificate, as required to be delivered from time to time
by the terms of the Operative Agreements, shall be executed by the President,
any Vice President, the Treasurer
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or the Chief Financial Officer of the Lessee and delivered as required by the
applicable provisions of the Operative Agreements.
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IN WITNESS WHEREOF, the parties hereto have caused this Participation
Agreement to be executed and delivered by their respective officers thereunto
duly authorized, all as of the date first above written.
APPLE SOUTH, INC., as the Lessee
By:
Name:
Title:
[Signature Pages Continued]
[SIGNATURE PAGE TO PARTICIPATION AGREEMENT]
FIRST SECURITY BANK,
NATIONAL ASSOCIATION, not
in its individual capacity
except as expressly
provided herein, but solely
as Owner Trustee under
Apple South Trust No. 97-1
By:
Name:
Title:
[Signature Pages Continued]
[SIGNATURE PAGE TO PARTICIPATION AGREEMENT]
SUNTRUST BANK, ATLANTA, as Administrative
Agent
By:
Name:
Title:
By:
Name:
Title:
[SIGNATURE PAGE TO PARTICIPATION AGREEMENT]
SUNTRUST BANK, ATLANTA, as
a Lender
By:
Name:
Title:
By:
Name:
Title:
[SIGNATURE PAGE TO PARTICIPATION AGREEMENT]
SOUTHTRUST BANK, NATIONAL
ASSOCIATION
By:
Name:
Title:
[Signatures Pages Continued]
[SIGNATURE PAGE TO PARTICIPATION AGREEMENT]
FIRST UNION NATIONAL BANK
By:
Name:
Title:
[Signatures Pages Continued]
[SIGNATURE PAGE TO PARTICIPATION AGREEMENT]
BANKBOSTON, N.A.
By:
Name:
Title:
[Signatures Pages Continued]
[SIGNATURE PAGE TO PARTICIPATION AGREEMENT]
AMSOUTH BANK
By:
Name:
Title:
[Signatures Pages Continued]
[SIGNATURE PAGE TO PARTICIPATION AGREEMENT]
SUNTRUST BANK, ATLANTA,
as the Holder
By:
Name:
Title:
By:
Name:
Title:
[SIGNATURE PAGE TO PARTICIPATION AGREEMENT]
ATTACHMENT A
(Form of Certificate of Delivery and Acceptance)
CERTIFICATE OF DELIVERY AND ACCEPTANCE
THIS CERTIFICATE OF DELIVERY AND ACCEPTANCE dated as of____________, ____,
199_ is given by APPLE SOUTH, INC., as Lessee, under that certain Master
Equipment Lease Agreement (Apple South Trust No. 97-1) dated as of September 24,
1997 (as amended, modified, supplemented, restated or replaced from time to
time, the "Lease") between Lessor and Lessee, pursuant to the terms of Section
2.3(b) of the Participation Agreement (such term and other capitalized terms
used herein and not otherwise defined herein shall have the meanings provided
therefor in the Agreement). The Lessee hereby makes the following requests and
certifications:
1. The Lessee requests that:
a. The Units described in Annex 1 (the "Class of
Equipment") be leased to the Lessee pursuant to the
Lease.
b. The Commencement Date for funding of the Class of
Equipment is---------.
2. The Lessee certifies that:
a. The aggregate Equipment Cost of the Class of
Equipment is $_________.
b. The allocation of the Equipment Cost of the Class of
Equipment by state is set forth in Annex 2 and is
true and correct.
c. As between the Lessee and the Lessor, the Lessee
unconditionally accepts all of the Units in the Class
of Equipment listed on the attached Annex 1 and
hereby subjects such Units to the Lease.
d. As between the Lessee and the Lessor, all of the
Units in the Class of Equipment are adequate to
operate in commercial service, comply with all Laws
governing the service in which such Units are being
placed by the Lessee and have been delivered directly
by the applicable Seller to the Lessee, and the
Lessee is unaware of any defects in or damage to such
Units.
e. The undersigned person signing on behalf of the
Lessee is duly authorized to execute and deliver this
Certificate of Delivery and Acceptance.
A-1-
f. No Lease Event of Default has occurred and is
continuing, and no Loan Agreement Event of Default
has occurred and is continuing.
[The remainder of this page has been intentionally
left blank.]
DATED: ____________1 APPLE SOUTH, INC.
By:
Name:
Title:
--------
1 Notice must be dated no later than 15 Business Days prior to
the requested Commencement Date.
A-2-
ANNEX 1
to Certificate of Delivery and Acceptance
DESCRIPTION OF THE EQUIPMENT/EQUIPMENT COST
Per Store Location
Unit Total (County
Make Model Serial No. Quantity Cost Cost and State) Store #
---- ----- ------ -- -------- ---- ---- --- ------ ----- -
A-3-
ANNEX 2
to Certificate of Delivery and Acceptance
Allocation of Equipment Cost among the Approved States
A-4-
ATTACHMENT B
(Form of Compliance Certificate)
COMPLIANCE CERTIFICATE
Reference is made to that certain Participation Agreement dated as of
September 24, 1997 (as modified and supplemented and in effect from time to
time, the "Participation Agreement") among Apple South, Inc. (the "Lessee"),
First Security Bank National Association, in its capacity as Owner Trustee of
Apple South Trust No. 97-1, SunTrust Bank, Atlanta, as the Holder, the Lenders
from time to time party thereto, and SunTrust Bank as Administrative Agent as
ascribed thereto in the Participation Agreement.
Pursuant to Section 5.1(c) of the Participation Agreement, the undersigned,
the [Chief Financial Officer/Chief Accounting Officer] of the Lessee, hereby
certifies that (i) attached hereto as Annex 1 are the true and accurate
calculations required to establish whether the Lessee was in compliance with
Sections 5.3, 5.4, 5.5, 5.6 and 5.11 of the Participation Agreement as of the
end of the Fiscal [Quarter/Year] ended __________, 19__, each determined in
accordance with the requirements of the Participation Agreement and (ii) [no
Event of Default, Potential Default, Lease Event of Default, Lease Default, Loan
Agreement Default or Loan Agreement Event of Default exists on the date hereof]
[the following Event of Defaults, Potential Defaults, Lease Event of Defaults,
Lease Defaults, Loan Agreement Defaults or Loan Agreement Events of Default
(including the details thereof) exist and the Lessee is taking or proposes to
take the following actions with respect thereto]:
======================
======================
In addition, the attached [audited] [unaudited] financial statements have
been prepared by the Lessee in accordance with generally accepted accounting
principles and, in the judgment of management, present fairly and consistently
the Lessee's financial position and results of operations.
B-1-
IN WITNESS WHEREOF, the undersigned has executed this Certificate in his
capacity as [Chief Financial Officer/Chief Accounting Officer] and not
personally as of the ____ day of __________, 199___.
By:_________________________________
_______________________,
as _________________,
for and on behalf of
Apple South, Inc.
B-2-
ATTACHMENT C
(Form of Assignment and Assumption Agreement)
ASSIGNMENT AND ASSUMPTION AGREEMENT
Reference is made to the Loan and Security Agreement, dated as of September
24, 1997 (together with all amendments and modifications thereto, the
"Agreement"), by and among First Security Bank, National Association, as Owner
Trustee under Apple South Trust No. 97-1 (the "Owner Trustee"), certain
financial institutions party thereto (the "Lenders") and SunTrust Bank, Atlanta,
as Administrative Agent (the "Administrative Agent"). Terms used herein and not
otherwise defined herein or in the Agreement shall have the meanings specified
therefor in Appendix A to that certain Participation Agreement, dated as of
September 24, 1997 (as it may be amended or otherwise modified from time to
time, (the "Participation Agreement"), by and among Apple South, Inc., as the
Lessee (the "Lessee"), the Owner Trustee, SunTrust Bank, Atlanta (the "Holder"),
the Administrative Agent and the Lenders.
[Name of Assignor], in its capacity as Lender under the Participation
Agreement (the "Assignor") and [Name of Assignee] (the "Assignee") hereby agree
as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, an interest in and to the Notes,
the Loans and all of the Assignor's right, title, interest and obligations under
the Agreement (the "Assignor's Interest"), such interest acquired by the
Assignee hereunder expressed as a percentage of all rights and obligations of
the Lenders being equal to the percentage equivalent of a fraction, the
numerator of which is $[__________] and the denominator of which is the
aggregate Lender Commitments of all Lenders.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the Assignor's Interest being assigned by it hereunder and
that such Assignor's Interest is free and clear of any Lien created by it; (ii)
makes no representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in connection with
the Operative Agreements, the Notes or the Loans or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Operative
Agreements, the Notes or the Loans; and (iii) makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Owner Trustee or the Lessee or the performance or observance by the Owner
Trustee or the Lessee of any of its respective obligations under the Agreement
or any instrument or document furnished pursuant thereto.
3. The Assignee (i) confirms that it has received a copy of the Operative
Agreements and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Assignment and
Assumption Agreement and purchase the
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Assignor's Interest from the Assignor; (ii) agrees that it will, independently
and without reliance upon the Administrative Agent or any of its Affiliates, the
Assignor or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Operative Agreements to which the Assignor
is a party; (iii) appoints and authorizes the Administrative Agent to take such
action as agent on its behalf and to exercise such powers under the Operative
Agreements as are delegated to the Administrative Agent by the terms thereof,
together with such powers as are reasonably incidental thereto; (iv) appoints
the Administrative Agent to enforce its respective rights and interests in and
under the Agreement and the Collateral in accordance with the Operative
Agreements; (v) agrees that it will perform in accordance with their terms all
of the obligations which by the terms of the Operative Agreements are required
to be performed by it as a Lender; (vi) specifies as its address for notices and
its account for payments the office and account set forth beneath its name on
the signature pages hereof, (vii) attaches the forms prescribed by the Internal
Revenue Service of the United States of America certifying as to the Assignee's
status for purposes of determining exemption from United States withholding
taxes with respect to all payments to be made to the Assignee under the
Agreement or such other documents as are necessary to indicate that all such
payments are subject to such rates at a rate reduced by an applicable tax
treaty; and (viii) represents and warrants to the Assignor that (A) it is duly
organized and in good standing under the laws of its jurisdiction of
organization, (B) its execution, delivery and performance of this Agreement have
been duly authorized and (C) this Agreement is enforceable against it in
accordance with its terms.
4. The effective date for this Assignment and Assumption Agreement shall be
the later of (i) the date on which the Administrative Agent receives this
Assignment and Assumption Agreement executed by the parties hereto, and receives
the consent of the Lessee and the Administrative Agent, (provided, however, the
consent of the Lessee shall not be required if a Default or Event of Default has
occurred and is continuing), and (ii) the date of this Assignment and Assumption
Agreement (the "Effective Date"). Following the execution of this Assignment and
Assumption Agreement and the consent of the Lessee and the Administrative Agent
(provided, however, the consent of the Lessee shall not be required if a Default
or Event of Default has occurred and is continuing), this Assignment and
Assumption Agreement shall be delivered to the Administrative Agent for
acceptance and, with respect to the Agreement, recording by the Administrative
Agent.
5. Upon such acceptance and recording, as of the Effective Date, (i) the
Assignee shall be a party to the Agreement and, to the extent provided in this
Agreement, have the rights and obligations of a Lender thereunder and (ii) the
Assignor shall, to the extent provided in this Assignment and Assumption
Agreement, relinquish its rights and be released from its obligations under the
Agreement.
6. Upon such acceptance and recording, from and after the Effective Date,
the Administrative Agent shall make all payments under the Agreement in respect
of the interest assigned hereby (including, without limitation, all payments in
respect of such interest in the
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related principal of and interest on the Loans allocable to the related Lender
and fees) to the Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments under the Agreement for periods prior to the Effective
Date directly between themselves.
7. THIS ASSIGNMENT AND ASSUMPTION AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF GEORGIA.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
C-3-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the __ day
of ____ 199_.
[ASSIGNOR]
By:
Name:
Title:
[ASSIGNEE]
By:
Name:
Title:
Address for notices and Account for payments:
For Credit Matters: For Administrative Matters:
[NAME] [NAME]
===================== ====================
Attn: ________________ Attn: _______________
Telephone:(___)___-____ Telephone:(___)___-___
Telefax:(___)___-____ Telefax:(___)___-____
Account for Payments:
NAME
--------------
ABA Number:___-___-___
Account Number: _______
Attn: ________________
Re: ______________
C-4-
Consented to this __ day
of ________ 199_
SUNTRUST BANK, ATLANTA, as Administrative Agent
By:
Name:
Title:
By:
Name:
Title:
[if required] APPLE SOUTH, INC., as the Lessee
By:
Name:
Title:
Accepted this ___ day
of ___________, 199_
SUNTRUST BANK, ATLANTA, as Administrative Agent
By:
Name:
Title:
By:
Name:
Title:
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SCHEDULE 3.2(h)
Subsidiaries
SCHEDULE 5.7
Existing Liens
