AMENDED AND RESTATED
LOAN FACILITY AGREEMENT
AND GUARANTY
by and among
RUBY TUESDAY, INC.,
SUNTRUST BANK, ATLANTA, as Servicer
and
EACH OF THE PARTICIPANTS PARTY HERETO
Dated as of October 2, 1998
AMENDED AND RESTATED
LOAN FACILITY AGREEMENT AND GUARANTY
Table of Contents
Page
I. DEFINITIONS 2
1.1 Definitions 2
Adjusted LIBO Rate 2
Advance 2
Affiliate 2
Agreement 2
Assignment and Acceptance 2
Bankruptcy Code 2
Borrower 3
Borrowers' Commitment Fee 3
Borrower Rate 3
Business Day 3
Capital Lease 3
Capital Lease Obligation 3
Change in Control Provision 3
Closing Date 3
Collateral 3
Collateral Agreement 3
Commitment 4
Commitment Fee 4
Consolidated Companies 4
Consolidated Funded Debt 4
Consolidated Interest Expense 4
Consolidated Net Income (Loss) 4
Consolidated Net Worth 4
Contractual Obligation 4
Credit Event 4
Credit Parties 4
Deemed Loan Default 4
Defaulted Borrower 4
Defaulted Loan 4
"Dollar" and "U.S. Dollar" and the sign "$" 5
EBITR 5
Effective Date 5
Eligible Assignee 5
Environmental Laws 5
ERISA 6
ERISA Affiliate 6
Excluded Management Salary 6
Executive Officer 6
Federal Funds Rate 6
Fee Letter 6
Final Termination Date 6
Fiscal Year 6
Fiscal Year End 6
Fixed Charge Coverage Ratio 6
Fixed Charges 6
Franchisee Debt 7
Franchisee Debt Service 7
Franchise Documents 7
Franchisee EBITDAR 7
Franchisee Fixed Charge Coverage Ratio 8
Franchisee Loan Program 8
Franchisee Partner 8
Franchise Partner Program 8
Franchisee Rents 8
Fronting Advance 8
Fully Guaranteed Pool 9
Funded Debt 9
Funded Participant's Interest 9
Funding Approval Notice 9
Funding Request 9
GAAP 10
Guaranteed Obligations 10
Guarantors 10
Guaranty 10
Guaranty Agreement 10
Guaranty Payments 10
Hazardous Substances 11
Hostile Acquisition 11
Indebtedness 11
Initial Funding Request 11
Interest Rate Contract 11
Investment 11
Letter of Credit 12
Letter of Credit Fee 12
Letter of Credit Obligations 12
Letter of Credit Outstandings 12
LIBOR 12
LIBOR Lease Transaction 12
Lien 12
Limited Guaranty Pool 13
Loan 13
Loan Commitment 13
Loan Agreement 13
Loan Default 13
Loan Documents 13
Loan Indebtedness 13
Loan Payment Default 13
Loan Term 13
Margin Regulations 14
Material Subsidiary 14
Materially Adverse Effect 14
Maturity Date 14
Maximum Amount 14
MFCI 14
MHCI 14
Moody's 14
Xxxxxxxx 14
Mozzarella's 14
Multiemployer Plan 14
Net Proceeds 14
Non-recurring Expenses 15
Non-recurring Income 15
Operative Documents 15
Participant 15
Participating Commitment 15
Participant Funding 15
Participant's Interest 15
Participant's Letter of Credit Fee 15
Participant's Unused Commitment 15
Participant's Unused Sponsor Commitment 15
Participation Certificate 16
Payment Date 16
Payment Period 16
PBGC 16
Permitted Liens 16
Person 16
Personal Guaranty 16
Plan 16
Prior Loan Facility Agreement 16
Prior Servicing Agreement 16
Pro Rata Share 16
Promissory Note 17
Qualified Store 17
Regulation D 17
Release 17
Remedial Action 17
Rental Obligations 17
Required Participants 17
Requirement of Law 18
Response Period 18
Restructuring Charges 18
Reuters Screen 18
Ruby Tuesday 18
Servicer's Letter of Credit Fee 18
Servicing Agreement 18
Servicing Fee 18
Servicing Report 18
Servicer 18
Sharing Agreements 18
Sponsor's Fee 18
Sponsor's Commitment Fee 19
Sponsor's Letter of Credit Fee 19
Spousal Consent 19
Standard & Poor's 19
Standstill Period 19
Subordinated Debt 19
Subsidiary 19
Tax Code 19
Taxes 19
Telerate 20
Tia's 20
Total Capitalization 20
Transaction 20
Unmatured Credit Event 20
Voting Stock 20
1.2 Accounting Terms and Determination. 20
1.3 Other Definitional Terms. 20
1.4 Exhibits and Schedules. 20
II. LOAN FACILITY 2.1 Establishment of Commitment; Terms of Loans and Letters
of Credit. 20
2.2 Conveyance of Participant's Interest. 22
2.3 Funding of Advances; Funding of Participant's Interest in
Loans; Purchase of Participation in Letters of Credit. 23
2.4 Commitment Fees and Participant's Letter of Credit Fees. 25
2.5 Interest on Funded Participant's Interest. 26
2.6 Default Interest. 27
2.7 Voluntary Reduction of the Unutilized Commitment . 27
2.8 Extension of Commitment 28
2.9 Reserve Requirements; Change in Circumstances 29
2.10 Wind-Down Event 30
2.11 Pro Rata Treatment 31
2.12 Payments 31
2.13 Sharing of Setoffs 31
III. SERVICER'S SERVICING OBLIGATIONS; DISTRIBUTION OF PAYMENTS
3.1 Servicer's Obligations with Respect to Loans; Collateral;
Non-Recourse. 32
3.2 Application of Payments. 33
3.3 Servicing Report 35
IV. LOAN DEFAULT; RIGHT TO MAKE GUARANTY DEMAND
4.1 Notice Of Loan Default. 35
4.2 Waiver or Cure By The Sponsor; Fully Guaranteed Pool. 35
4.3 Standstill Period; Defaulted Loan Guaranty Demand 36
4.4 No Waiver or Cure Available. 36
4.5 Fixed Charge Coverage Ratio for Loan Documents executed under
the Prior Loan Agreement. 37
4.6 Movement of Loans into and out of Fully Guaranteed Pool 38
4.7 Extension of Maturity Date of Defaulted Loans during the
Response Period and the Standstill Period 38
V. REPRESENTATIONS AND WARRANTIES
5.1 Representations and Warranties. 38
5.2 Representations and Warranties with Respect to Specific
Loans. 45
VI. COVENANTS
6.1 Affirmative Covenants. 46
6.2 Negative Covenants 53
VII. CREDIT EVENT
7.1 Credit Events. 60
VIII. GUARANTY
8.1 Unconditional Guaranty 63
8.2 Limitation on Guaranty of Loans. 64
8.3 Obligations of Sponsor With Respect to Loans 64
8.4 Continuing Guaranty. 66
8.5 Waivers. 66
8.6 Additional Actions 66
8.7 Additional Waivers 67
8.8 Postponement of Obligations 67
8.9 Effect on additional Guaranties 68
8.10 Reliance on Guaranty and Purchase Obligation; Disclaimer of
Liability 68
8.11 Reinstatement of Obligations. 69
8.12 Right to Bring Separate Action 69
IX. INDEMNIFICATION
9.1 Indemnification. 69
9.2 Notice Of Proceedings; Right To Defend 70
9.3 Third Party Beneficiaries 71
X. SURVIVAL OF LOAN FACILITY 72
XI. CONDITIONS PRECEDENT 72
11.1 Conditions to Effective Date 72
11.1.1 Receipt of Documents. 72
11.1.2 Corporate Actions 73
11.1.3 Payment of Fees 73
11.2 Effect of Amendment and Restatement 73
XII. THE SERVICER 75
12.1 Appointment of Servicer as Agent 75
12.2 Nature of Duties of Servicer 75
12.3 Lack of Reliance on the Servicer 75
12.4 Certain Rights of the Servicer 76
12.5 Reliance by Servicer 76
12.6 Indemnification of Servicer 76
12.7 The Servicer in its Individual Capacity 77
12.8 Holders of Participation Certificates 77
XIII. MISCELLANEOUS 77
13.1 Notices. 77
13.2 Amendments, Etc. 78
13.3 No Waiver; Remedies Cumulative 78
13.4 Payment of Expenses, Etc. 79
13.5 Right of Setoff 79
13.6 Benefit of Agreement; Assignments; Participations. 79
13.7 Governing Law; Submission to Jurisdiction. 81
13.8 Counterparts 82
13.9 Severability 83
13.10 Independence of Covenants 83
13.11 Change in Accounting Principles, Fiscal Year or Tax Laws. 83
13.12 Headings Descriptive; Entire Agreement 83
EXHIBITS
Exhibit A - Form of Assignment and Acceptance Agreement
Exhibit B - Form of Subsidiary Guaranty Agreement
Exhibit C - Form of Line of Credit Agreement
Exhibit D - Form of Participation Certificate
Exhibit E - Form of Master Note
Exhibit F - Form of Servicing Report
SCHEDULES
Schedule 5.1(a) - Percentage of Ownership of Subsidiaries and
Restrictions Thereon
Schedule 5.1(e) - Litigation
Schedule 5.1(h)(i) - Environmental Liabilities
Schedule 5.1(h)(ii) - Environmental Notices
Schedule 5.1(h)(iii) - Environmental Permits
Schedule 5.1(l) - Taxes
Schedule 5.1(m) - Subsidiaries
Schedule 5.1(o) - ERISA
Schedule 5.1(p) - Patents and Trademarks
Schedule 5.1(q) - Ownership of Properties
Schedule 6.2(a) - Existing Indebtedness
Schedule 6.2(b) - Existing Liens
AMENDED AND RESTATED
LOAN FACILITY AGREEMENT AND GUARANTY
THIS AMENDED AND RESTATED LOAN FACILITY AGREEMENT AND GUARANTY (the
"Agreement") made as of this 2nd day of October, 1998 by and among RUBY
TUESDAY, INC., a Georgia corporation having its principal place of
business and chief executive office at 000 X. Xxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxx 00000 ("Sponsor"), SUNTRUST BANK, ATLANTA ("STBA") and each of
the other lending institutions listed on the signature pages hereto
(STBA, such lenders, together with any assignees thereof becoming
"Participants" pursuant to the terms of this Agreement, the
"Participants") and SUNTRUST BANK, ATLANTA, a banking corporation
organized and existing under the laws of Georgia having its principal
office in Atlanta, Georgia, as Servicer and agent for the Participants
(in such capacity, the "Servicer").
W I T N E S S E T H:
WHEREAS, the Sponsor, Participants and Servicer, in order to make
available a loan facility to certain franchisees of Sponsor, entered into
that certain Loan Facility Agreement and Guaranty dated as of May 30,
1997, as amended by that certain First Amendment to Loan Facility
Agreement and Guaranty, dated as of October 30, 1997, as amended by that
certain Second Amendment to Loan Facility Agreement and Guaranty, dated
as of March 4, 1998, and as amended by that certain Third Amendment to
Loan Facility Agreement and Guaranty, dated as of June 18, 1998 (as
hereafter amended or modified, the "Prior Loan Facility Agreement") by
and among Sponsor, Servicer and the Participants;
WHEREAS, in order to expedite the ongoing operations of the loan
facility, Sponsor and Servicer entered into that certain Servicing
Agreement, dated as of May 30, 1997 (as amended or modified from time to
time, the "Prior Servicing Agreement") to set forth certain agreements
regarding fees and operations;
WHEREAS, at the request of Sponsor, Sponsor, the Participants and
Servicer are entering into this Agreement to amend and restate the terms
of the Prior Loan Facility Agreement to extend the termination date of
such Commitments and to modify certain other terms and provisions
thereof, including without limitation, the provisions of Article 8
thereof, all as is more fully set forth below;
THEREFORE, upon the terms and conditions hereinafter stated, and in
consideration of the mutual premises set forth above and other adequate
consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties, intending to be legally bound, hereby agree
that the Prior Loan Facility Agreement is amended and restated as
follows:
I. DEFINITIONS
1.1 Definitions. In addition to the other terms defined herein, the
following terms used herein shall have the meanings herein specified
(such meanings to be equally applicable to both the singular and plural
forms of the terms defined):
"Adjusted LIBO Rate" shall mean, with respect to each Payment
Period, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) determined pursuant to the following formula:
"Adjusted LIBO Rate" = LIBOR
---------------------
1.00 - LIBOR Reserve Percentage
As used herein, LIBOR Reserve Percentage shall mean, for any Payment
Period for any Funded Participant's Interest outstanding hereunder, the
reserve percentage (expressed as a decimal) equal to the then stated
maximum rate of all reserve requirements (including, without limitation,
any marginal, emergency, supplemental, special or other reserves)
applicable to any member bank of the Federal Reserve System in respect of
Eurocurrency liabilities as defined in Regulation D (or against any
successor category of liabilities as defined in Regulation D).
"Advance" means a funding of an advance pursuant to the Loan
Commitment of any Borrower pursuant to a Funding Request.
"Affiliate" of any Person means any other Person directly or
indirectly controlling, controlled by, or under common control with, such
Person, whether through the ownership of voting securities, by contract
or otherwise. For purposes of this definition, "control" (including with
correlative meanings, the terms "controlling", "controlled by", and
"under common control with") as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of that Person.
"Agreement" means this Loan Facility Agreement and Guaranty as it
may hereafter be amended or modified.
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by a Participant and an Eligible Assignee in accordance with
the terms of this Agreement and substantially in the form of Exhibit A.
"Bankruptcy Code" shall mean The Bankruptcy Code of 1978, as
amended and in effect from time to time (11 U.S.C. s101 et seq.).
"Borrower" means a Franchisee or other affiliated Person who is
primarily liable for repayment of a Loan as a result of having executed
Loan Documents as maker, or its permitted assignee.
"Borrowers' Commitment Fee" shall have the meaning set forth in
Section 2.4.
"Borrower Rate" shall mean, with respect to each Loan, the Prime
Rate per annum plus any additional margin per annum specified for such
Loan by Sponsor in the applicable Funding Approval Notice, such margin
not to exceed four percent (4.0%) per annum.
"Business Day" shall mean any day excluding Saturday, Sunday and
any other day on which banks are required or authorized to close in
Atlanta, Georgia.
"Capital Lease" shall mean, as applied to any Person, any lease of
any property (whether real, personal or mixed) by such Person as lessee
which would, in accordance with GAAP, be required to be classified and
accounted for as a capital lease on a balance sheet of such Person, other
than, in the case of Sponsor or any of its Subsidiaries, any such lease
under which Sponsor or a wholly-owned Subsidiary of Sponsor is the
lessor.
"Capital Lease Obligation" shall mean, with respect to any Capital
Lease, the amount of the obligation of the lessee thereunder which would,
in accordance with GAAP, appear on a balance sheet of such lessee in
respect of such Capital Lease.
"Change in Control Provision" shall mean any term or provision
contained in any indenture, debenture, note, or other agreement or
document evidencing or governing Indebtedness of Sponsor evidencing debt
or a commitment to extend loans in excess of $2,000,000 which requires,
or permits the holder(s) of such Indebtedness of Sponsor to require that
such Indebtedness of Sponsor be redeemed, repurchased, defeased, prepaid
or repaid, either in whole or in part, or the maturity of such
Indebtedness of Sponsor to be accelerated in any respect, as a result of
a change in ownership of the capital stock of Sponsor or voting rights
with respect thereto.
"Closing Date" means, for any Loan, the date upon which the Loan
Documents with respect to such Loan are executed and delivered and the
Loan Commitment is established thereunder.
"Collateral" means property subject to a security interest or lien
which secures a Loan.
"Collateral Agreement" means an agreement executed by a Borrower
and any other Persons primarily or secondarily liable for all or part of
the Loan, granting a security interest to the Servicer in specified
Collateral as security for such Loan.
"Commitment" shall have the meaning set forth in Section 2.1(a)
hereof.
"Commitment Fee" shall have the meaning set forth in Section 2.4.
"Commitment Termination Date" shall have the meaning set forth in
Section 2.1(a).
"Consolidated Companies" shall mean, collectively, Sponsor and all
of its Subsidiaries.
"Consolidated Funded Debt" shall mean, as of any date of
determination, the Funded Debt of the Consolidated Companies.
"Consolidated Interest Expense" shall mean, for any period, total
interest expense of the Consolidated Companies (including without
limitation, interest expense attributable to Capital Leases, all
capitalized interest, all commissions, discounts and other fees and
charges owed with respect to bankers acceptance financing, net costs
(i.e., costs minus benefits) under Interest Rate Contracts, and total
interest expense (whether shown as interest expense or as loss and
expenses on sales of receivables) under a receivables purchase facility)
determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Income (Loss)" shall mean, with reference to any
period, the net income (or deficit) of the Consolidated Companies for
such period (taken as a cumulative whole), after deducting all operating
expenses, provisions for all taxes and reserves (including reserves for
deferred income taxes) and all other proper deductions, all determined in
accordance with GAAP on a consolidated basis, after eliminating all
intercompany transactions and after deducting portions of income properly
attributable to minority interests, if any, in the stock and surplus of
the Subsidiaries of the Sponsor.
"Consolidated Net Worth" shall mean the shareholders' equity of the
Sponsor and its Subsidiaries calculated in accordance with GAAP, less
treasury stock.
"Contractual Obligation" of any Person shall mean any provision of
any security issued by such Person or of any agreement, instrument or
undertaking under which such Person is obligated or by which it or any of
the property owned by it is bound.
"Credit Event" shall have the meaning set forth in Section 7.1 of
this Agreement.
"Credit Parties" shall mean, collectively, each of the Sponsor and
the Guarantors.
"Deemed Loan Default" shall have the meaning set forth in Section
4.5(a) of this Agreement.
"Defaulted Borrower" means a Borrower under a Defaulted Loan.
"Defaulted Loan" means a Loan evidenced by Loan Documents under the
terms of which exist one or more Loan Defaults which have not been cured
or waived as permitted herein.
"Dollar" and "U.S. Dollar" and the sign "$" shall mean lawful money
of the United States of America.
"EBITR" shall mean for any period, the Consolidated Net Income
(Loss) of the Consolidated Companies, plus, to the extent deducted
therefrom in determining Consolidated Net Income (Loss), the sum of (i)
Consolidated Interest Expense, (ii) provision for income taxes (whether
paid or deferred), (iii) Rental Obligations for such period, and (iv)
Restructuring Charges, and without giving effect to any extraordinary
gains or losses, any other non-cash charges or gains or losses from sales
of assets other than inventory sold in the ordinary course of business.
"Effective Date" means October 2, 1998.
"Eligible Assignee" shall mean (i) a commercial bank organized
under the laws of the United States or any state thereof having total
assets in excess of $1,000,000,000.00 or any commercial finance or asset-
based lending Affiliate of any such commercial bank and (ii) any
Participant.
"Environmental Laws" shall mean all federal, state, local and
foreign statutes and codes or regulations, rules or ordinances issued,
promulgated, or approved thereunder, now or hereafter in effect
(including, without limitation, those with respect to asbestos or
asbestos containing material or exposure to asbestos or asbestos
containing material), relating to pollution or protection of the
environment and relating to public health and safety, relating to (i)
emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals or industrial toxic or hazardous constituents,
substances or wastes, including without limitation, any Hazardous
Substance, petroleum including crude oil or any fraction thereof, any
petroleum product or other waste, chemicals or substances regulated by
any Environmental Law into the environment (including, without
limitation, ambient air, surface water, ground water, land surface or
subsurface strata), or (ii) the manufacture, processing, distribution,
use, generation, treatment, storage, disposal, transport or handling of
any Hazardous Substance, petroleum including crude oil or any fraction
thereof, any petroleum product or other waste, chemicals or substances
regulated by any Environmental Law, and (iii) underground storage tanks
and related piping, and emissions, discharges and releases or threatened
releases therefrom, such Environmental Laws to include, without
limitation (a) the Clean Air Act (42 U.S.C. s 7401 et seq.), (b) the
Clean Water Act (33 U.S.C. s 1251 et seq.), (c) the Resource Conservation
and Recovery Act (42 U.S.C. s 6901 et seq.), (d) the Toxic Substances
Control Act (15 U.S.C. s 2601 et seq.), (e) the Comprehensive
Environmental Response Compensation and Liability Act, as amended by the
Superfund Amendments and Reauthorization Act (42 U.S.C. s 9601 et seq.),
and (f) all applicable national and local laws or regulations with
respect to environmental control.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended and in effect from time to time.
"ERISA Affiliate" shall mean, with respect to any Person, each
trade or business (whether or not incorporated) which is a member of a
group of which that Person is a member and which is under common control
within the meaning of the regulations promulgated under Section 414 of
the Tax Code.
"Excluded Management Salary" shall mean, with respect to any
Borrower for any period, (1) two-thirds of the salary and expenses paid
to the Franchisee Partner of such Borrower during any period that the
Borrower has only one Qualified Store and (2) one-third of the salary and
expenses paid to the Franchisee Partner of such Borrower during any
period that the Borrower has only two Qualified Stores.
"Executive Officer" shall mean with respect to any Person, the
President, Vice Presidents, Chief Financial Officer, Treasurer, Secretary
and any Person holding comparable offices or duties.
"Federal Funds Rate" shall mean, for any day, the weighted average
of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published on
the next succeeding Business Day by the Federal Reserve Bank of Atlanta,
or, if such rate is not so published for any day that is a Business Day,
the average quotations for the day of such transactions received by the
Servicer from three federal funds brokers of recognized standing selected
by it.
"Fee Letter" shall mean that certain letter agreement dated as of
even date herewith, by and between the Sponsor and the Servicer, setting
forth certain fees applicable to the loan facility described herein,
either as originally executed or as hereafter amended or modified.
"Final Termination Date" shall mean the date which is sixty (60)
days after the expiration of the last Loan Commitment established
hereunder.
"Fiscal Year" shall mean any period of 52 (or, if applicable 53)
consecutive weeks ending on the first Saturday occurring after May 30 of
any year; references to a Fiscal Year with a number corresponding to any
calendar year (e.g., "Fiscal Year 1996") refer to the Fiscal Year ending
on the first Saturday occurring after May 30 of that year.
"Fiscal Year End" shall mean the last day of any Fiscal Year.
"Fixed Charge Coverage Ratio" shall mean, for any period, the ratio
of (i) EBITR to (ii) Fixed Charges for such period.
"Fixed Charges" shall mean, with reference to any period,
determined in accordance with GAAP on a consolidated basis, the sum of
the following for the Consolidated Companies, after eliminating all
intercompany items:
(a) Consolidated Interest Expense for such period; and
(b) all Rental Obligations payable as lessee under any operating
lease properly charged or chargeable to income during such
period in accordance with GAAP;
provided that any interest charges or rentals paid or accrued by any
Person acquired by the Sponsor or any of its Subsidiaries during such
period, through purchase, merger, consolidation or otherwise, shall be
included in "Fixed Charges" only to the extent that the earnings of such
Person are taken into account in determining EBITR for such period.
"Franchisee Debt" shall mean, for any Borrower without duplication,
(i) indebtedness for borrowed money or for the deferred purchase price of
property or services (other than trade accounts payable on customary
terms in the ordinary course of business), (ii) financial obligations
evidenced by bonds, debentures, notes or other similar instruments, (iii)
financial obligations as lessee under leases which shall have been or
should be, in accordance with GAAP, recorded as capital leases, and (iv)
obligations under direct or indirect guaranties in respect of, and
obligations (contingent or otherwise) to purchase or otherwise acquire,
or otherwise to assure a creditor against loss in respect of,
indebtedness or financial obligations of others of the kinds referred to
in clauses (i) through (iii) above.
"Franchisee Debt Service" means, for any period for any Borrower
whose Loans were extended, or Letters of Credit issued pursuant to, Loan
Documents executed under the Prior Loan Facility Agreement, the sum of
(A) interest expense paid in cash during such period plus (B) scheduled
amortization of all Franchisee Debt (excluding Franchisee Debt of the
type described in clause (iv) of the definition of "Franchisee Debt") for
such period, in each case measured for such Borrower and its subsidiaries
on a consolidated basis in accordance with GAAP.
"Franchise Documents" means for any Borrower, collectively, (i) the
participation and operating agreements for any Borrower that is a limited
liability company or limited partnership agreement for any Borrower that
is a limited partnership and (ii) the written agreements between Sponsor
and Borrower whereby Borrower is authorized to establish one or more
"Ruby Tuesday" franchises, including, without limitation the Ruby
Tuesday, Inc. Operating Agreements between Sponsor and a Borrower and
each other operating agreement and development agreement related to each
franchise location, all as amended or modified from time to time.
"Franchisee EBITDAR" means, for any period for any Borrower whose
Loans were extended, or Letters of Credit issued pursuant to, Loan
Documents executed under the Prior Loan Facility Agreement, (1) net
income (loss) for such period, plus, (2) to the extent subtracted in
determining such net income (loss), (a) interest expense for such period,
(b) tax expense for such period, (c) depreciation, amortization and other
non-cash charges for such period, (d) Franchisee Rents for such period,
(e) Non-recurring Expenses for such period, and (f) Excluded Management
Salary for such period, if any, minus (3) Non-recurring Income for such
period to the extent included in such net income (loss), in each case
measured for such Borrower and its subsidiaries on a consolidated basis.
"Franchisee Fixed Charge Coverage Ratio" shall mean, as of any date
for any Borrower whose Loans were extended, or Letters of Credit issued
pursuant to, Loan Documents executed under the Prior Loan Facility
Agreement, the ratio of (i) Franchisee EBITDAR to (ii) the sum of (A)
Franchisee Debt Service plus (B) Franchisee Rents, in each case for the
immediately preceding four fiscal quarters ended on or closest to such
date; provided, however, that Sponsor may elect to exclude from the
calculation of the Franchisee Fixed Charge Coverage Ratio for any
Borrower the Franchisee EBITDAR, the Franchisee Debt Service and the
Franchisee Rents incurred by such Borrower and its subsidiaries that are
attributable to any stores that are not Qualified Stores; provided,
further, however, that if the Sponsor at any time includes any store that
is not a Qualified Store in the calculation of the Franchisee Fixed
Charge Coverage Ratio, such store shall thereafter be included in all
subsequent calculations of the Franchisee Fixed Charge Coverage Ratio.
"Franchisee Loan Program" shall mean that transaction evidenced by
(i) this Agreement wherein the Sponsor has guaranteed, to the extent set
forth herein, certain obligations of franchisees of the Sponsor, and (ii)
the other "Operative Documents" (as such term is defined herein) executed
by the Consolidated Companies in connection herewith and therewith.
"Franchisee Partner" means, collectively, the Person other than the
Sponsor that owns an equity interest in the Borrower and any Person who
directly or indirectly owns or controls such Person.
"Franchise Partner Program" shall mean the optional financing and
business structuring program offered by the Sponsor to a limited number
of qualified restaurant operators, such operators to be determined by the
Sponsor in its sole discretion, which provides such restaurant operators
a business structure for organizing, owning and funding the establishment
and operation of at least 8 to 10 restaurants doing business under
operating concepts owned by Sponsor.
"Franchisee Rents" means, for any period for any Borrower whose
Loans were extended, or Letters of Credit issued pursuant to, Loan
Documents executed under the Prior Loan Facility Agreement, the aggregate
amount of all lease and rent payments for which such Borrower and its
subsidiaries are directly or indirectly liable (as lessee or as guarantor
or other surety) under all operating leases in effect at any time during
such period, determined on a consolidated basis in accordance with GAAP.
"Fronting Advance" shall have the meaning set forth in Section 2.3.
"Fully Guaranteed Pool" shall mean Loans which are subject to the
full and unlimited guaranty of the Sponsor pursuant to the terms of
Section 4.2 and Article VIII of this Agreement.
"Funded Debt" shall mean, as applied to any Person, all
Indebtedness of such Person which by its terms or by the terms of any
instrument or agreement relating thereto matures, or which is otherwise
payable or unpaid, one year or more from, or is directly or indirectly
renewable or extendable at the option of the debtor to a date one year
or more (including an option of the debtor under a revolving credit or
similar agreement obligating the lender or lenders to extend credit over
a period of one year or more) from, the date of the creation thereof,
provided that Funded Debt shall include, as at any date of determination,
any portion of such Indebtedness outstanding on such date which matures
on demand or within one year from such date (whether by sinking fund,
other required prepayment, or final payment at maturity) and shall also
include (i) all Indebtedness of such Person for borrowed money under a
line of credit, guidance line, revolving credit, bankers acceptance
facility or similar arrangement for borrowed money, including, without
limitation, all unpaid drawings under letters of credit and unreimbursed
amounts pursuant to letter of credit reimbursement agreements, regardless
of the maturity date thereof, and (ii) as of any date of determination
with respect to the Sponsor, the aggregate guaranty obligations of the
Sponsor calculated as of such date (without giving effect to any
liability of the Sponsor on any subsequent date) pursuant to the
Franchise Loan Program, regardless of the maturity date thereof. In
addition, there shall also be included in Funded Debt the present value
of all minimum lease commitments to make payments with respect to
operating leases of such Person, determined based upon a discount rate of
10% in accordance with discounted present value analytical methodology,
and with respect to the Sponsor, shall include the rental obligations of
the Sponsor arising pursuant to the LIBOR Lease Transaction assuming, for
the purposes of such calculation regardless of the Sponsor's actual
election pursuant to the documents executed in connection therewith, that
the Sponsor has exercised and will exercise all optional extensions
thereof and will exercise its option to remarket the leased properties at
the end of the lease term.
"Funded Participant's Interest" means the aggregate outstanding
amount of Advances made by a Participant hereunder with respect to the
Loans, and shall include, with respect to STBA, the aggregate outstanding
amount of Fronting Advances.
"Funding Approval Notice" means a written notice to the Servicer
from Sponsor setting forth the conditions of a proposed Loan Commitment,
consistent with the requirements therefor as set forth in this Agreement,
and containing such information and in substantially such form as shall
be agreed to by Servicer and Sponsor pursuant to the Servicing Agreement.
"Funding Request" means (x) a request from a Borrower to the
Servicer to fund a portion of such Borrower's Loan Commitment, and (y)
the Initial Funding Request.
"GAAP" shall mean generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board
or, if no such statements are promulgated, then such other statements by
such other entity as may be approved by a significant segment of the
accounting profession, which are applicable to the circumstances as of
the date of determination.
"Guaranteed Obligations" means the aggregate amount of the Loan
Indebtedness outstanding under the Loan Documents and guaranteed by the
Sponsor pursuant to this Agreement to include, without limitation (i) all
principal, interest and commitment fees due with respect to all Loans,
including post-petition interest in any proceeding under federal
bankruptcy laws, (ii) all fees, expenses, and amounts payable by any
Borrower for reimbursement or indemnification under the terms of the Loan
Agreement or any other Loan Document executed in connection with the Loan
to such Borrower, (iii) all amounts advanced by Servicer to protect or
preserve the value of any security for the Loans, and (iv) all renewals,
extensions, modifications, and refinancings (in whole or in part) of any
of the amounts referred to in clauses (i) and (ii) above).
"Guarantors" shall mean, (i) Tias, Inc., a Texas corporation and
(ii) all other Material Subsidiaries of the Sponsor, and their respective
successors and permitted assigns.
"Guaranty" shall mean any contractual obligation, contingent or
otherwise (other than letters of credit), of a Person with respect to any
Indebtedness or other obligation or liability of another Person,
including without limitation, any such Indebtedness, obligation or
liability directly or indirectly guaranteed, endorsed, co-made or
discounted or sold with recourse by that Person, or in respect of which
that Person is otherwise directly or indirectly liable, including
contractual obligations (contingent or otherwise) arising through any
agreement to purchase, repurchase, or otherwise acquire such
Indebtedness, obligation or liability or any security therefor, or any
agreement to provide funds for the payment or discharge thereof (whether
in the form of loans, advances, stock purchases, capital contributions or
otherwise), or to maintain solvency, assets, level of income, or other
financial condition, or to make any payment other than for value
received. The amount of any Guaranty shall be deemed to be an amount
equal to the stated or determinable amount of the primary obligation in
respect of which guaranty is made or, if not so stated or determinable,
the maximum reasonably anticipated liability in respect thereof (assuming
such Person is required to perform thereunder) as determined by such
Person in good faith.
"Guaranty Agreement" shall mean the Guaranty Agreement executed by
each of the Material Subsidiaries of the Sponsor in favor of the Servicer
and the Participants, substantially in the form of Exhibit B as the same
may be amended, restated or supplemented from time to time.
"Guaranty Payments" mean all payments made by the Sponsor pursuant
to Section 8.2 of this Agreement with respect to Loans in the Limited
Guaranty Pool, and shall exclude all payments made by the Sponsor
hereunder with respect to Loans in the Fully Guaranteed Pool.
"Hazardous Substances" shall have the meaning assigned to that term
in the Comprehensive Environmental Response Compensation and Liability
Act of 1980, as amended by the Superfund Amendments and Reauthorization
Acts of 1986.
"Hostile Acquisition" shall mean any Investment resulting in
control of a Person involving a tender offer or proxy contest that has
not been recommended or approved by the board of directors of the Person
that is the subject of the Investment prior to the first public
announcement or disclosure relating to such Investment.
"Indebtedness" of any Person shall mean, without duplication (i)
all obligations of such Person which in accordance with GAAP would be
shown on the balance sheet of such Person as a liability (including,
without limitation, obligations for borrowed money and for the deferred
purchase price of property or services, and obligations evidenced by
bonds, debentures, notes or other similar instruments); (ii) all Capital
Lease Obligations; (iii) all Guaranties of such Person; (iv) Indebtedness
of others secured by any Lien upon property owned by such Person, whether
or not assumed; and (v) obligations or other liabilities under currency
contracts, Interest Rate Contracts, or similar agreements or combinations
thereof. Notwithstanding the foregoing, in determining the Indebtedness
of any Person, there shall be included all obligations of such Person of
the character referred to in clauses (i) through (v) above deemed to be
extinguished under GAAP but for which such Person remains legally liable
except to the extent that such obligations (x) have been defeased in
accordance with the terms of the applicable instruments governing such
obligations and (y) the accounts or other assets dedicated to such
defeasance are not included as assets on the balance sheet of such
Person.
"Initial Funding Request" means the Funding Request submitted by a
Borrower for the initial Advance on the Closing Date of such Loan.
"Interest Rate Contract" shall mean all interest rate swap
agreements, interest rate cap agreements, interest rate collar
agreements, interest rate insurance and other agreements and arrangements
designed to provide protection against fluctuations in interest rates, in
each case as the same may be from time to time amended, restated,
renewed, supplemented or otherwise modified.
"Investment" shall mean, when used with respect to any Person, any
direct or indirect advance, loan or other extension of credit (other than
the creation of receivables in the ordinary course of business) or
capital contribution by such Person (by means of transfers of property to
others or payments for property or services for the account or use of
others, or otherwise) to any Person, or any direct or indirect purchase
or other acquisition by such Person of, or of a
beneficial interest in, capital stock, partnership interests, bonds,
notes, debentures or other securities issued by any other Person.
"Letter of Credit" shall mean a standby letter of credit issued by
the Servicer on behalf of a Borrower pursuant to the terms of the
applicable Loan Commitment on the terms and conditions set forth in the
applicable Loan Agreement.
"Letter of Credit Fee" shall mean the fee paid by each Borrower
pursuant to the terms of the applicable Loan Agreement with respect to
all outstanding Letter of Credit Obligations thereunder.
"Letter of Credit Obligations" shall mean, with respect to each
Borrower, the aggregate of the face amount of all outstanding Letters of
Credit issued by the Servicer on behalf of such Borrower pursuant to the
applicable Loan Agreement plus, without duplication, the aggregate amount
of unreimbursed draws on such Letters of Credit.
"Letter of Credit Outstandings" shall mean the aggregate amount of
all Letter of Credit Obligations.
"LIBOR" shall mean, for each Payment Period, the offered rate for
deposits in U.S. Dollars, for a period of one month and in an amount
comparable to the aggregate outstanding Funding Participant's Interest as
of the first day of such Payment Period, appearing on Telerate Page 3750
as of 11:00 A.M. (Atlanta, Georgia time) on such date. If two or more of
such rates appear on Telerate Page 3750, the rate for that Payment Period
shall be the arithmetic mean of such rates. If the foregoing rate is
unavailable from Telerate Page 3750 for any reason, then such rate shall
be determined by the Servicer from the Reuters Screen LIBO Page or, if
such rate is also unavailable on such service, then on any other interest
rate reporting service of recognized standing designated in writing by
the Servicer to Sponsor; in any such case rounded, if necessary, to the
next higher 1/16 of 1.0%, if the rate is not such a multiple.
"LIBOR Lease Transaction" shall mean, collectively, (a) that
transaction evidenced by (i) that certain Lease Agreement, dated as of
May 30, 1997, by and between Sponsor, as lessee and Atlantic Financial
Group, LLP, as lessor, (ii) that certain Master Agreement, dated as of
May 30, 1997 by and among Sponsor, Atlantic Financial Group, LLP,
SunTrust Bank, Atlanta, as agent and the other financial institutions
named therein and (iii) the other Operative Documents (as such term is
defined in such Master Agreement) executed by the Consolidated Companies
in connection therewith and (b) certain similar lease transaction entered
into hereafter by the Consolidated Companies with a syndicate of lenders
agented by SunTrust Bank, Atlanta providing an aggregate amount of
financing to the Consolidated Companies in the approximate amount of
$75,000,000.
"Lien" shall mean any mortgage, pledge, security interest, lien,
charge, hypothecation, assignment, deposit arrangement, title retention,
preferential property right, trust or other arrangement having the
practical effect of the foregoing and shall include the interest of a
vendor or lessor under any conditional sale agreement, capitalized lease
or other title retention agreement.
"Limited Guaranty Pool" shall mean each of the Loans outstanding
hereunder other than the Loans comprising the Fully Guaranteed Pool.
"Loan" means the aggregate Advances made pursuant to a Loan
Commitment, as evidenced by the relevant Promissory Note.
"Loan Commitment" means the commitment of the Servicer to each
Borrower to make Advances to such Borrower in the aggregate amount
specified in the relevant Promissory Note, subject to the terms and
conditions set forth therein.
"Loan Agreement" means the Line of Credit Agreement setting forth
the terms and conditions, as between a Borrower and the Servicer, under
which the Servicer has established a Loan Commitment to make Advances to
the Borrower, substantially in the form of Exhibit C.
"Loan Default" means an occurrence with respect to a Loan which is
defined by the applicable Loan Documents to be an event of default
(including but not limited to a Loan Payment Default).
"Loan Documents" means the Loan Agreement, the Promissory Note, any
Personal Guaranty, any Spousal Consent, the Collateral Agreements, any
Letters of Credit and any other documents relating to the Loan or Letters
of Credit delivered by any Borrower or any guarantor or surety thereof to
the Servicer and any amendments thereto (provided that such amendments
are made with the consent of Sponsor, where such consent is required
under this Agreement).
"Loan Indebtedness" means all amounts due and payable by a Borrower
under the terms of the Loan Documents for a given Loan and outstanding
Letters of Credit, including, without limitation, outstanding principal,
accrued interest, any commitment fees, letter of credit fees and all
reasonable costs and expenses of any legal proceeding brought by the
Servicer to collect any of the foregoing (including without limitation,
reasonable attorneys' fees actually incurred).
"Loan Payment Default" means the failure of a Borrower to make a
payment of principal, accrued interest thereon or any other amounts,
within the cure period following the due date therefor, as provided under
the applicable Loan Documents.
"Loan Term" means the period from the Closing Date of a Loan
Commitment until the Maturity Date of such Loan Commitment and the Loan
outstanding thereunder, which period shall not exceed thirty-seven
months.
"Margin Regulations" shall mean Regulation G, Regulation T,
Regulation U and Regulation X of the Board of Governors of the Federal
Reserve System, as the same may be in effect from time to time.
"Material Subsidiary" shall mean (i) each Credit Party other than
the Sponsor, and (ii) each other Subsidiary of the Sponsor, now existing
or hereafter established or acquired, that at any time prior to the
Maturity Date, has or acquires total assets in excess of $5,000,000, or
that accounted for or produced more than 5% of the Consolidated Net
Income (Loss) of the Sponsor on a consolidated basis during any of the
three most recently completed Fiscal Years of the Sponsor, or that is
otherwise material to the operations or business of the Sponsor or
another Material Subsidiary.
"Materially Adverse Effect" shall mean any materially adverse
change in (i) the business, results of operations, financial condition,
assets or prospects of the Consolidated Companies, taken as a whole, (ii)
the ability of Sponsor to perform its obligations under this Agreement,
or (iii) the ability of the other Credit Parties (taken as a whole) to
perform their respective obligations under the Operative Documents.
"Maturity Date" means, with respect to any Loan Commitment, the
date set forth under the applicable Loan Documents when such Loan
Commitment terminates and all principal and interest with respect to the
Loan outstanding thereunder shall become due and payable in full;
provided that, each Maturity Date shall be a Payment Date.
"Maximum Amount" shall have the meaning set forth in Section 8.1
hereof.
"MFCI" shall mean Morrison's Fresh Cooking, Inc.
"MHCI" shall mean Morrison's Healthcare, Inc.
"Moody's" shall mean Xxxxx'x Investors Service, Inc.
"Xxxxxxxx" shall mean Xxxxxxxx Restaurants Inc. the predecessor
corporation to the Sponsor, MFCI and MHCI.
"Mozzarella's" shall mean "Mozzarella's American Cafes", an
operating concept of the Sponsor.
"Multiemployer Plan" shall have the meaning set forth in Section
4001(a)(3) of ERISA.
"Net Proceeds" shall mean, with respect to any equity offering or
issuance of Subordinated Debt, (i) all cash received with respect
thereto, whether by way of deferred payment pursuant to a promissory
note, a receivable or otherwise (and interest paid thereon), plus (ii)
the higher of the book value or the fair market value of any assets
(including any stock) received with respect thereto, in each case, net of
reasonable and customary sale expenses, fees and commissions incurred and
taxes paid or expected to be payable within the next twelve months in
connection therewith.
"Non-recurring Expenses" shall mean, for any Borrower for any
period, all expenses of such Borrower and its Subsidiaries for such
period that are extraordinary and generally not reflected in any prior
period or reasonably anticipated to be incurred in any subsequent period.
"Non-recurring Income" shall mean, for any Borrower for any period,
all income of such Borrower and its Subsidiaries for such period that is
extraordinary and generally not reflected in any prior period or
reasonably anticipated to be incurred in any subsequent period.
"Operative Documents" shall mean this Agreement, the Guaranty
Agreement, the Servicing Agreement, the Fee Letter and any other
documents delivered by Sponsor or any Guarantor to the Servicer or the
Participants in connection herewith or therewith.
"Participant" shall mean STBA, the other lending institutions
listed on the signature pages hereof and each assignee thereof, if any,
pursuant to the terms hereof.
"Participating Commitment" shall mean the amount set forth opposite
each Participant's name on the signature pages hereof, as such amount may
be modified by assignment pursuant to the terms hereof; provided that,
following the termination of the Commitment, each Participant's
Participating Commitment shall be deemed to be its Pro Rata Share of the
aggregate Loan Commitments.
"Participant Funding" shall mean a funding by the Participants of
their Pro Rata Share of Loans outstanding.
"Participant's Interest" shall have the meaning set forth in
Section 2.2.
"Participant's Letter of Credit Fee" shall have the meaning set
forth in Section 2.4(b).
"Participant's Unused Commitment" shall mean, with respect to any
Participant, the difference between such Participant's Participating
Commitment and such Participant's Funded Participant's Interest, as
further reduced by such Participant's Pro Rata Share of the Letter of
Credit Outstandings.
"Participant's Unused Sponsor Commitment" shall mean, with respect
to any Participant, the difference between such Participant's
Participating Commitment and such Participant's Pro Rata Share of all
outstanding Loan Commitments.
"Participation Certificate" shall mean, a certificate issued by the
Servicer to a Participant, substantially in the form of Exhibit D
attached hereto, evidencing such Participant's ownership interest
conveyed hereunder.
"Payment Date" means the last day of each calendar month, provided,
however, if such day is not a Business Day, the next succeeding Business
Day.
"Payment Period" shall mean a period of one (1) month; provided
that (i) the first day of a Payment Period must be a Business Day, (ii)
any Payment Period that would otherwise end on a day that is not a
Business Day shall be extended to the next succeeding Business Day, (iii)
the first Payment Period hereunder shall commence on the date hereof and
shall end on the last day of the next succeeding calendar month and (iv)
the first day of any succeeding Payment Period shall be the last day of
the preceding Payment Period.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
successor thereto.
"Permitted Liens" shall mean those Liens expressly permitted by
Section 6.2(b).
"Person" shall mean an individual, corporation, partnership,
limited liability company, trust, incorporated or unincorporated
organization, joint venture, joint stock company, or a government or any
agency or political subdivision thereof or other entity of any kind.
"Personal Guaranty" shall mean any guaranty from a principal of a
Borrower substantially in the form attached to the Servicing Agreement.
"Plan" shall mean any "employee benefit plan" (as defined in
Section 3(3) of ERISA), including, but not limited to, any defined
benefit pension plan, profit sharing plan, money purchase pension plan,
savings or thrift plan, stock bonus plan, employee stock ownership plan,
Multiemployer Plan, or any plan, fund, program, arrangement or practice
providing for medical (including post-retirement medical),
hospitalization, accident, sickness, disability, or life insurance
benefits.
"Prior Loan Facility Agreement" shall have the meaning as set forth
in the Recital paragraphs above.
"Prior Servicing Agreement" shall have the meaning as set forth in
the Recital paragraphs above.
"Pro Rata Share" shall mean, with respect to each of the
Participants, the percentage designated as such Participant's Pro Rata
Share on the signature pages hereof, as such percentage may change from
time to time as a result of assignments or amendments pursuant to this
Agreement.
"Promissory Note" means a Master Note of a Borrower, substantially
in the form attached hereto as Exhibit E setting forth the obligation of
such Borrower to repay the Loan evidenced thereby.
"Qualified Store" shall mean any store that has been open for at
least twelve months and was not acquired by a Borrower from the Sponsor
during the last twelve months.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System, as the same may be in effect from time to
time.
"Release" means any release, spill, emission, leaking, pumping,
injection, deposit, disposal (including the abandonment or discarding of
barrels, containers, or other closed receptacles), discharge, dispersal,
leaching or migration into the indoor or outdoor Environment or into or
out of any property, including the movement of Hazardous Substances
through or in the air, soil, surface water, ground water or property.
"Remedial Action" means all actions reasonably necessary, whether
voluntary or involuntary, to (a) clean up, remove, treat or in any other
way adjust Hazardous Substances in the indoor or outdoor Environment; (b)
prevent the Release or further movement of Hazardous Substances so that
they do not migrate or endanger or threaten to endanger public health or
welfare or the indoor or outdoor Environment; or (c) perform remedial
studies, investigations, restoration and post-remedial studies,
investigations and monitoring on, about or in the Property, assets,
equipment or facilities
"Rental Obligations" shall mean, with reference to any period, the
aggregate amount of all rental obligations for which the Consolidated
Companies are directly or indirectly liable (as lessee or as guarantor or
other surety but without duplication) under all leases in effect at any
time during such period (other than operating leases for motor vehicles,
computers, office equipment and other similar items used in the ordinary
course of business of the Consolidated Companies), including all such
amounts for which any Person was liable during the period immediately
prior to the date such Person became a Subsidiary of the Sponsor or was
merged into or consolidated with the Sponsor or a Subsidiary of the
Sponsor, as determined in accordance with GAAP and expressly including
all rental obligations arising pursuant to the LIBOR Lease Transaction
(excluding supplemental or contingent lease obligations thereunder).
"Required Participants" shall mean at any time, the Participants
holding at least 66 2/3% of the sum of (x) aggregate Funded Participant's
Interest, plus (y) the Participant's Unused Commitments, or, following
the termination of the Commitment and the Loan Commitments, the
Participants holding at least 66 2/3% of the aggregate outstanding Funded
Participant's Interests at such time.
"Requirement of Law" for any person shall mean the articles or
certificate of incorporation and bylaws or other organizational or
governing documents of such Person, and any law, treaty, rule or
regulation, or determination of an arbitrator or a court or other
governmental authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its
property is subject.
"Response Period" means a period of sixty (60) days commencing on
the day on which a Loan Payment Default or Loan Default occurs; provided
that no Response Period shall extend beyond the Final Termination Date.
"Restructuring Charges" shall mean the charges incurred by Borrower
(whether directly or by allocation), in an amount not to exceed
$31,000,000.00, in connection with the restructuring of the business of
Xxxxxxxx pursuant to the Transaction.
"Reuters Screen" shall mean, when used in connection with any
designated page and LIBOR, the display page so designated on the Reuters
Monitor Money Rates Service (or such other page as may replace that page
on that service for the purpose of displaying rates comparable to LIBOR).
"Ruby Tuesday" shall mean "Ruby Tuesday", an operating concept of
Sponsor.
"Servicer's Letter of Credit Fee" shall have the meaning set forth
in the Servicing Agreement.
"Servicing Agreement" shall have the meaning set forth in the
recitals hereof.
"Servicing Fee" shall mean the fee payable to the Servicer pursuant
to the terms of the Servicing Agreement.
"Servicing Report" shall have the meaning set forth in Section 3.3.
"Servicer" shall mean SunTrust Bank, Atlanta and its successors and
assigns.
"Sharing Agreements" shall mean, collectively, (i) that certain
Distribution Agreement, dated as of March 2, 1996 by and among Xxxxxxxx,
MFCI and MHCI, (ii) that certain License Agreement, dated as of March 2,
1996, by and between MFCI and MHCI, (iii) that certain License Agreement,
dated as of March 2, 1996, by and between Sponsor and MHCI, (iv) that
certain Amended and Restated Tax Allocation and Indemnification
Agreement, dated as of March 2, 1996, by and among Xxxxxxxx, MHCI, MFCI
and certain other subsidiaries of Xxxxxxxx, and (v) that certain
Agreement Respecting Employee Benefit Matters, dated as of March 2, 1996,
by and among Xxxxxxxx, MFCI and MHCI.
"Sponsor's Fee" shall have the meaning set forth in the Servicing
Agreement.
"Sponsor's Commitment Fee" shall have the meaning set forth in
Section 2.4.
"Sponsor's Letter of Credit Fee" shall have the meaning set forth
in the Servicing Agreement.
"Spousal Consent" shall mean a consent of the spouse of a Person
executing a Personal Guaranty, substantially in the form attached to the
Servicing Agreement.
"Standard & Poor's" shall mean Standard & Poor's Rating Service, a
division of The XxXxxx-Xxxx Companies.
"Standstill Period" means a sixty (60) day period commencing on the
date immediately following the date that the Response Period expires
during which the Servicer and the Participants will continue to refrain
from exercising remedies against a Defaulted Borrower while a Defaulted
Loan remains in the Limited Guaranty Pool.
"Subordinated Debt" shall mean all Indebtedness of Sponsor
subordinated to all obligations of Sponsor or any other Credit Party
arising under the Operative Documents, created, incurred or assumed on
terms and conditions satisfactory in all respects to the Servicer and the
Required Participants, including without limitation, with respect to
interest rates, payment terms, maturities, amortization schedules,
covenants, defaults, remedies, and subordination provisions, as evidenced
by the written approval of the Servicer and Required Participants.
"Subsidiary" shall mean, with respect to any Person, any
corporation or other entity (including, without limitation, partnerships,
joint ventures, and associations) regardless of its jurisdiction of
organization or formation, at least a majority of the total combined
voting power of all classes of voting stock or other ownership interests
of which shall, at the time as of which any determination is being made,
be owned by such Person, either directly or indirectly through one or
more other Subsidiaries.
"Tax Code" shall mean the Internal Revenue Code of 1986, as amended
and in effect from time to time.
"Taxes" shall mean any present or future taxes, levies, imposts,
duties, fees, assessments, deductions, withholdings or other charges of
whatever nature, including without limitation, income, receipts, excise,
property, sales, transfer, license, payroll, withholding, social security
and franchise taxes now or hereafter imposed or levied by the United
States, or any state, local or foreign government or by any department,
agency or other political subdivision or taxing authority thereof or
therein and all interest, penalties, additions to tax and similar
liabilities with respect thereto.
"Telerate" shall mean, when used in connection with any designated
page and LIBOR, the display page so designated on the Dow Xxxxx Telerate
Service (or such other page as may replace that page on that service for
the purpose of displaying rates comparable to LIBOR).
"Tia's" shall mean "Tia's Mexican Restaurants", an operating
concept of Tias, Inc., a Texas corporation, a wholly owned subsidiary of
Sponsor.
"Total Capitalization" shall mean, as of any date of determination,
the sum of (i) Consolidated Funded Debt, plus (ii) Consolidated Net
Worth.
"Transaction" shall have the meaning set forth in that certain
Credit Agreement, dated as of March 6, 1996, by and among Sponsor,
SunTrust Bank, Atlanta, individually and as Agent and the lenders named
therein, as amended or modified.
"Unmatured Credit Event" shall mean any condition or event which,
with notice or the passage of time or both, would constitute a Credit
Event.
"Voting Stock" shall mean securities of any class or classes, the
holders of which are entitled to elect all of the corporate directors (or
Persons performing similar functions).
1.2 Accounting Terms and Determination.
Unless otherwise defined or specified herein, all accounting terms
shall be construed herein, all accounting determinations hereunder
shall be made, all financial statements required to be delivered
hereunder shall be prepared, and all financial records shall be
maintained in accordance with, GAAP.
1.3 Other Definitional Terms.
The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as
a whole and not to any particular provision of this Agreement, and
Article, Section, Schedule, Exhibit and like references are to this
Agreement unless otherwise specified.
1.4 Exhibits and Schedules.
All Exhibits and Schedules attached hereto are by reference made a
part hereof.
II. LOAN FACILITY
2.1 Establishment of Commitment; Terms of Loans and Letters of Credit.
(a) Commitment. Subject to and upon the terms and
conditions set forth in this Agreement and the other Operative
Documents, and in reliance upon the guaranty of the Sponsor set
forth herein, the Servicer hereby establishes a Commitment to the
Sponsor to establish Loan Commitments and make Advances to such
Franchisees as may be designated by the Sponsor in its Funding
Approval Notices during a period commencing on the Effective Date
and ending on October 2, 1999 (as such period may be extended
for one or more subsequent 364-day periods pursuant to Section 2.8
hereof, the "Commitment Termination Date") in an aggregate
committed amount at any one time outstanding not to exceed FIFTY-
TWO MILLION FIVE HUNDRED AND NO/100 DOLLARS ($52,500,000.00) (the
"Commitment").
(b) Authorization of Loan Commitments; Loan Terms; Letter
of Credit Terms. Within the limits of the Commitment and in
accordance with the procedures set forth in the Servicing
Agreement, the Sponsor may authorize the Servicer to establish a
Loan Commitment in favor of a Franchisee who meets the credit
criteria established by the Sponsor. The amount of each Loan
Commitment shall be determined by the Sponsor but shall not be less
than $250,000 nor exceed $3,500,000 for any Franchisee. Pursuant
to the Loan Commitment, the Servicer shall agree to make Advances
to the Borrower thereunder in a minimum amount of $25,000 and in
integral multiples of $1,000, such Advances not to exceed six (6)
per month unless the Servicer shall otherwise agree. In addition,
the Servicer shall agree to issue Letters of Credit on behalf of
such Borrower in an aggregate amount at any one time outstanding
not to exceed $250,000. Each Loan shall bear interest at the
Borrower Rate designated by Sponsor in the applicable Funding
Approval Notice, and interest shall be payable on each Payment Date
and on the Maturity Date of such Loan when all principal and
interest shall be due and payable in full. Each Loan may be
prepaid in full or in part on any Business Day, without premium or
penalty. The Loan Term of each Loan shall not exceed twenty-four
months. Each Letter of Credit shall be for a term of not more than
one year (unless otherwise agreed by the Servicer) and shall mature
on a date which is at least ten (10) days prior to the Maturity
Date. If any drawing is made upon a Letter of Credit and not
reimbursed by the applicable Borrower on the same Business Day,
then the applicable Borrower shall be deemed to have requested an
Advance to repay such amount and the Servicer shall make such
Advance regardless of the minimum requirements set forth above and
regardless of whether or not a Default or Event of Default exists
under the applicable Loan Documents, which amounts shall be
Advances for all purposes hereunder. Notwithstanding the
foregoing, the terms of all Loans and Loan Commitments governed by
Loan Documents executed and delivered by Borrowers prior to the
Effective Date shall be subject in all respects to Section 11.2.2.
(c) Obligation to Establish Loan Commitments. Servicer's
obligation to establish each Loan Commitment under the Operative
Documents is subject to the fulfillment of the following conditions
as of the Closing Date of such Loan:
(i) this Agreement and each of the other Operative
Documents shall be in full force and effect;
(ii) the representations and warranties of the Sponsor
contained in Sections 5.1 and 5.2 hereof shall be true and
correct with the same effect as though such representations
and warranties had been made on the Closing Date of such
Loan;
(iii) the Servicer shall have received a Funding
Approval Notice from the Sponsor authorizing such Loan
Commitment;
(iv) all precedents and conditions to the Loan
Commitment specified in the Servicing Agreement, together
with such additional precedents and conditions as may, at
Sponsor's election, be included in the applicable Funding
Approval Notice, shall have been completed to the Servicer's
reasonable satisfaction; and
(v) no Credit Event or Unmatured Credit Event shall
have occurred and be continuing.
2.2 Conveyance of Participant's Interest.
(a) The Servicer hereby sells, assigns, transfers and
conveys to the Participants, without recourse or warranty, and each
Participant hereby purchases from the Servicer, an undivided
percentage ownership interest (which percentage shall be equal to
each Participant's Pro Rata Share) in (i) the Commitment, (ii) the
Loan Commitments, (iii) the Loans and Letter of Credit Obligations,
(iv) the Collateral, (v) all rights against any guarantor of any
Loan, including the Sponsor, and (vi) all right, title and interest
to any payment or right to receive payment with respect to the
foregoing (collectively, the "Participant's Interest").
Notwithstanding the foregoing, each Participant's right to receive
payments of interest, commitments fees, letter of credit fees or
other fees with respect to the Commitment, the Loan Commitments,
the Loans and the Letter of Credit Obligations shall not exceed the
amounts which such Participant is entitled to receive pursuant to
the terms of this Agreement.
(b) In consideration of the entry by each Participant into
this Agreement and the obligation of each Participant hereunder,
the Servicer shall issue to each Participant on the Closing Date, a
Participation Certificate. Each Participation Certificate shall be
in the amount of the relevant Participant's Participating
Commitment, and the Funded Participant's Interest outstanding
thereunder shall bear interest as hereinafter set forth and shall
be payable as hereinafter set forth.
(c) In accordance with the terms and conditions hereof, and
in consideration of the sale of the Participant's Interest to such
Participant, each Participant severally agrees from time to time,
during the period commencing on the Closing Date and ending on the
Final Termination Date, to fund its Pro Rata Share of outstanding
Loans (including Advances made by the Servicer in connection with
unreimbursed drawing upon outstanding Letters of Credit) made by
the Servicer in an aggregate amount at any one outstanding not to
exceed such Participant's Participating Commitment (subject to each
Participant's obligations pursuant to Section 2.3(d) hereof).
2.3 Funding of Advances; Funding of Participant's Interest in Loans;
Purchase of Participation in Letters of Credit.
(a) Funding of Advances and Issuance of Letters of Credit..
The Servicer shall fund Advances requested by the Borrowers
pursuant to the terms of the Loan Documents in accordance with the
terms of the applicable Loan Documents and the Servicing Agreement.
On the date of any such funding, the Servicer shall elect whether
or not to require the Participants to fund their respective Pro
Rata Share of such Advance or Advances to be made on such date. In
the event that the Servicer elects not to require the Participants
to fund their Pro Rata Share of the Advances on such date, the
Servicer shall make such Advance (each, a "Fronting Advance") to
the Borrower for the account of the Servicer; provided that, the
aggregate amount of Fronting Advances outstanding on any date shall
not exceed the amount of STBA's Participating Commitment and
further provided that the sum of (x) the aggregate Fronting
Advances plus (y) the aggregated Funded Participant's Interest plus
(z) the aggregate Letter of Credit Outstandings shall not exceed
the amount of the Commitment. If (i) any Credit Event shall have
occurred, (ii) after giving effect to any Advance, the aggregate
Fronting Advances outstanding hereunder would exceed STBA's
Participating Commitment, or (iii) the Servicer otherwise
determines in its sole discretion to request a Participant Funding
hereunder, then the Servicer shall notify the Participants pursuant
to subsection (b) requesting a Participant Funding. The Servicer
shall issue Letters of Credit requested by the Borrowers pursuant
to the terms of the Loan Documents in accordance with the terms of
the applicable Loan Documents and the Servicing Agreement. The
Participants shall be notified in each Servicing Report of the
aggregate amount of Letter of Credit Outstandings.
(b) Notification of Participant Funding. In the event
that the Servicer desires that the Participants fund their
respective Pro Rata Shares of Advances or Loans made or outstanding
pursuant to the Loan Documents, the Servicer shall deliver written
or telecopy notice to the Participants (or telephonic notice
promptly confirmed in writing or by telecopy) (a "Participant
Funding Request") by no later than 10:00 a.m. (Atlanta, Georgia
time) on the date which is the requested date of the Participant
Funding which shall specify (x) the date of the Participant
Funding, which shall be a Business Day, and (y) each Participant's
Pro Rata Share of the Loans outstanding to be funded in connection
with such Participant Funding.
(c) Participant Obligation. Each Participant shall make
its Participant Funding in the amount of its Pro Rata Share on the
proposed date thereof by wire transfer of immediately available
funds to the Servicer in Atlanta, Georgia by not later than
2:00 P.M. (Atlanta, Georgia time). Unless the Servicer shall have
received notice from a Participant prior to the date of any
Participant Funding that such Participant will not make available
to the Servicer such Participant's Pro Rata Share of such
Participant Funding, the Servicer may assume that the Participant
has made such portion available to the Servicer on the date of such
Participant Funding in accordance with this subsection (c) and the
Servicer may, in reliance on such assumption, make available to the
Borrowers a corresponding amount or credit the same to Fronting
Advances. If and to the extent that such Participant shall not
have made such portion available to the Servicer, such Participant
and the Sponsor shall severally agree to repay the Servicer
forthwith (on demand in the case of the Participant and within
three (3) days of such demand in the case of the Sponsor), without
duplication, such amount with interest at the Federal Funds Rate
plus 2% per annum and, until such time as such Participant has
repaid to the Servicer such amount, such Participant shall (i) have
no right to vote regarding any issue on which voting is required or
advisable under this Agreement or the other Operative Documents,
and (ii) shall not be entitled to receive any payments of interest,
fees or repayment of the principal amount of such Advance which the
Participant has failed to pay to the Servicer. If such Participant
shall repay to the Servicer such amount, then such amount shall
constitute part of such Participant's Funded Participant's
Interest.
(d) Participant's Obligation Absolute and Unconditional.
Each Participant's obligations to fund its Pro Rata Share of any
requested Participant Funding shall be absolute and unconditional
and shall not be affected by any circumstance, including, without
limitation, (i) any setoff, counterclaim, recoupment, defense, or
other right which such Participant may have against the Servicer,
the Sponsor, any Borrower or any other Person for any reason
whatsoever, (ii) the occurrence of any Credit Event or Unmatured
Credit Event, (iii) the occurrence of any Loan Default, (iv) any
adverse change in the condition (financial or otherwise) of the
Sponsor or any other Credit Party or any Borrower, (v) the
acceleration or maturity of any Loan or the Sponsor's obligations
hereunder or the termination of the Commitment, Loan Commitment or
the Participating Commitments after the making of any Fronting
Advance, (vi) any breach of this Agreement by the Sponsor or any
other Participant, or (vii) any other circumstance, happening or
event whatsoever, whether or not similar to any of the foregoing.
(e) Fundings Following Default. Notwithstanding the
foregoing provisions of this Section 2.3, no Participant shall be
required to fund its Pro Rata Share of any requested Participant
Funding for purposes of refunding a Fronting Advance pursuant to
subsection (d) above if a Credit Event, Unmatured Credit Event or
Loan Default with respect to the relevant Loan has occurred and is
continuing and, prior to the making by the Servicer of such
Fronting Advance, the Servicer had received written notice from
Sponsor, the relevant Borrower or any Participant specifying that
such Credit Event, Unmatured Credit Event or Loan Default had
occurred and was continuing (and identifying the same as a Credit
Event, Unmatured Credit Event or Loan Default, as the case may be);
provided that , in the case of an Unmatured Credit Event or Credit
Event where the Participants are not pursuing remedies, the
Participants will be obligated to fund their respective Pro Rata
Shares of Fronting Advances as long as the aggregate amount of such
Fronting Advances does not exceed $2,000,000. Each Participant
expressly agrees, however, that it shall be obligated to fund its
Pro Rata Share of requested Participant Funding with respect to
Advances made by the Servicer with respect to unreimbursed drawings
upon outstanding Letters of Credit whether or not a Credit Event,
Unmatured Credit Event or Loan Default has occurred and is
continuing and whether or not made as a Fronting Advance.
2.4 Commitment Fees and Participant's Letter of Credit Fees.
(a) Each Participant will receive from the Sponsor under
the Operative Documents a commitment fee (the "Sponsor's Commitment
Fee") with respect to the average daily amount of each
Participant's Unused Sponsor Commitment, for the period commencing
on the Effective Date and ending on the Final Termination Date, or
such earlier date as the Participating Commitment shall expire or
terminate, equal to 0.25% per annum, such Sponsor's Commitment Fee
to be payable in arrears on each Payment Date which is the last day
of a calendar quarter (a "Quarterly Date") commencing on December
31, 1998, calculated on the basis of a 360-day year and the actual
number of days elapsed;
(b) Each Participant will also receive from the Borrowers
under the Loan Documents a commitment fee (the "Borrowers'
Commitment Fees", and collectively with the Sponsor's Commitment
Fee, the "Commitment Fee") with respect to the average daily amount
of each Participant's Unused Borrower Commitment, for the period
commencing on the Effective Date and ending on the Final
Termination Date, or such earlier date as the Participating
Commitment shall expire or terminate, equal to 0.375% per annum,
such Borrowers' Commitment Fees to be payable in arrears on each
Payment Date which is the last day of a calendar quarter (a
"Quarterly Date") commencing on September 30, 1998, calculated on
the basis of a 360-day year and the actual number of days elapsed,
subject in all respects to Section 11.2.2. To the extent that the
commitment fee set forth in the Loan Documents to which a Borrower
is a party is less than 0.375% per annum, the Sponsor shall pay a
portion of the Borrowers' Commitment Fee for Loans in an amount
equal to (A) (i) 0.375% minus (ii) the commitment fee percentage
set forth in the Loan Documents to which the Borrower is a party,
multiplied by (B) the average daily amount of each Participant's
Unused Borrower Commitment, which amount shall be payable in
arrears on each Quarter Date commencing on September 30, 1998 and
continuing thereafter, calculated on the basis of a 360-day year
and the actual number of days elapsed, which amount paid by the
Sponsor under this Section 2.4(b) shall not constitute Guaranty
Payments with respect to Loans in the Limited Guaranty Pool.
(c) Each Participant will receive from amounts paid by the
Borrowers under the Loan Documents and the Sponsor under the
Operative Documents, a letter of credit fee (the "Participant's
Letter of Credit Fee") with respect to the average daily amount of
each Participant's Pro Rata Share of the Letter of Credit
Outstandings, for the period commencing on the Closing Date and
ending on the Final Termination Date, or such earlier date as the
Participating Commitment shall expire or terminate, equal to 1.75%
per annum, such Participant's Letter of Credit Fee to be payable in
arrears on each Quarterly Date commencing on September 30, 1998,
calculated on the basis of a 360-day year and the actual number of
days elapsed. To the extent that the letter of credit fee set
forth in the Loan Documents to which a Borrower is a party is less
than 1.75% per annum, the Sponsor shall pay a portion of the
Participant's Letter of Credit Fee in an amount equal to (A) (i)
1.75% minus (ii) the letter of credit fee percentage set forth in
the Loan Documents to which the Borrower is a party, multiplied by
(B) the average daily amount of each Participant's Pro Rata share
of the Letter of Credit Outstandings, which amount shall be payable
in arrears on each Quarter Date commencing on September 30, 1998
and continuing thereafter, calculated on the basis of a 360-day
year and the actual number of days elapsed, which amount paid by
the Sponsor under this Section 2.4(c) shall not constitute Guaranty
Payments with respect to Loans in the Limited Guaranty Pool.
(d) All Commitment Fees and Participant's Letter of Credit
Fees shall be paid on the dates due, in immediately available
funds, to the Participants by the Servicer from amounts received
from the Borrowers and Sponsor.
(e) In the event that (i) the Commitment Fees received by
the Servicer from the Borrowers and the Sponsor are not sufficient
on any Quarterly Date to pay the Commitment Fees to the
Participants required pursuant hereto, or (ii) the Letter of Credit
Fees received by the Servicer from the Borrowers and the Sponsor
are not sufficient on any Quarterly Date to pay the Participant's
Letter of Credit Fees required pursuant hereto, the Sponsor shall,
upon demand of the Servicer, immediately fund such difference to
the Servicer (with such payment allocated to specific Loan Payment
Defaults as agreed by Sponsor and Servicer) and the Sponsor shall
promptly be reimbursed by the Servicer upon receipt of such amount
from the Borrower.
2.5 Interest on Funded Participant's Interest.
(a) Subject to the provisions of Section 2.6, each
Participant's Funded Participant's Interest shall bear interest
(computed on the basis of the actual number of days elapsed over a
year of 360 days) at a rate per annum equal to the Adjusted LIBO
Rate for the Payment Period in which such Funded Participant's
Interest is outstanding (with the Payment Period being
automatically reset on each Payment Date for the next Payment
Period regardless of the date of any Participant Funding hereunder)
plus an additional one hundred seventy-five basis points (1.75%)
per annum.
(b) Interest on each Participant's Funded Participant's
Interest shall be payable by the Servicer to the Participants on
each Payment Date from interest payments received on the Loans on
such Payment Date.
(c) In the event that the interest received by the Servicer
on any Payment Date is not sufficient to pay the interest to the
Participants required pursuant hereto, the Sponsor shall, upon
demand of the Servicer, immediately fund such difference to the
Servicer (with such payment allocated to specific Loan Payment
Defaults as agreed by Sponsor and Servicer) and if such shortfall
results from Loan Payment Defaults rather than interest rate
variances, either, at the election of the Sponsor, (x) the Sponsor
shall be reimbursed by the Servicer upon receipt of such amount
from the Borrower, (y) the Loan Indebtedness shall be deemed to be
reduced by such amount upon a repayment or purchase of such
Defaulted Loan by Sponsor in accordance with the terms of this
Agreement, or (z) such amount shall be deemed to have satisfied
Sponsor's obligation to cure such Loan Payment Default hereunder.
2.6 Default Interest.
If any amount payable to the Servicer or the Participants by the
Sponsor under the Operative Documents is not paid on the date due
hereunder, such amount shall bear interest (to the extent permitted
by law) for each day from such date up to (but not including) the
date of actual payment (after as well as before judgment) at a rate
per annum (computed on the basis of the actual number of days
elapsed over a year of 360 days) equal to the Prime Rate plus 2%
per annum.
2.7 Voluntary Reduction of the Unutilized Commitment .
Upon at least three (3) Business Days' prior telephonic notice
(promptly confirmed in writing) to the Servicer, Sponsor shall have
the right, without premium or penalty, to terminate the Commitment,
in part or in whole, provided that (i) any such termination shall
apply to proportionately and permanently reduce the Participating
Commitments of each of the Participants, (ii) any partial
termination pursuant to this Section 2.7 shall be in an amount of
at least $5,000,000 and integral multiples of $1,000,000, and (iii)
the
Commitment may not be reduced to an amount which is less than the
aggregate sum of all outstanding Loan Commitments.
2.8 Extension of Commitment.
(a) The Sponsor may, by written notice to the Servicer (which
shall promptly deliver a copy to each of the Participants), given
not more than sixty (60) days prior to any anniversary of the date
of this Agreement while the Commitment is effect, request that the
Participants extend the then scheduled Commitment Termination Date
(the "Existing Date") for an additional 364-day period. Each
Participant shall, by notice to the Sponsor and the Servicer given
within fifteen (15) Business Days after receipt of such request,
advise the Sponsor and the Servicer whether or not such Participant
consents to the extension request (and any Participant which does
not respond during such 15-day period shall be deemed to have
advised the Sponsor and the Servicer that it will not agree to such
extension).
(b) In the event that, on the 15th Business Day after
receipt of the notice delivered pursuant to subsection (a) above,
all of the Participants shall have agreed to extend their
respective Participating Commitments, the Commitment Termination
Date shall be deemed to have been extended, effective as of the
Existing Date, to the date which is 364 days thereafter.
(c) In the event that, on the 15th Business Day after
receipt of the notice delivered pursuant to subsection (a) above,
all of the Participants shall not have agreed to extend their
respective Participating Commitments, the Sponsor shall notify the
consenting Participants ("Consenting Participants") of the amount
of the Participating Commitments of the non-extending Participants
("Non-Consenting Participants") and such Consenting Participants
shall, by notice to the Sponsor and the Servicer given within ten
(10) Business Days after receipt of such notice, advise the
Servicer and Sponsor whether or not such Participant wishes to
purchase all or a portion of the Participating Commitments of the
Non-Consenting Participants (and any Participant which does not
respond during such 10-Business Day period shall be deemed to have
rejected such offer). In the event that more than one Consenting
Participant agrees to purchase all or a portion of such
Participating Commitments, the Sponsor and the Servicer shall
allocate such Participating Commitments among such Consenting
Participants so as to preserve, to the extent possible, the
relative pro rata shares of the Consenting Participants of the
Participating Commitments prior to such extension request. If
Consenting Participants do not elect to assume all of the
Participating Commitments of the Non-Consenting Participants, the
Sponsor shall have the right to arrange for one or more banks (any
such bank being called a "New Participant"), to purchase the
Participating Commitment of any Non-Consenting Participant. Each
Non-Consenting Participant shall assign its Commitment and the
Loans outstanding hereunder to the Consenting Participant or New
Participant purchasing such Participating Commitment in accordance
with Section 13.6, in return for payment in full of all principal,
interest and other amounts owing to such Non-Consenting Participant
hereunder, on or before the Existing Date and, as of the effective
date of such assignment, shall no longer be a party hereto,
provided that each New Participant shall be subject to the approval
of the Servicer (which approval shall not be unreasonably
withheld). If (and only if) Participants (including New
Participants) holding Participating Commitments representing at
least an amount equal to the greater of (x) the sum of all
outstanding Loan Commitments and (y) 66 2/3% of the aggregate
Participating Commitments on the date of such extension request
shall have agreed to such extension by the Existing Date (the
"Continuing Participants"), then (i) the Commitment Termination
Date shall be extended for an additional 364-day period and (ii)
the Participating Commitment of any Non-Consenting Participant
which has not been assigned to a Consenting Participant or a New
Participant shall terminate (with the result that the amount of the
Commitment shall be decreased by the amount of such Participating
Commitment), and all amounts owing to such Non-Consenting
Participant shall become due and payable, together with all
interest accrued thereon and all other amounts owed to such Non-
Consenting Participant hereunder, on the Existing Date applicable
to such Participant without giving effect to any extension of the
Commitment Termination Date.
2.9 Reserve Requirements; Change in Circumstances.
(a) Notwithstanding any other provision herein, if, by
reason of (i) after the Effective Date, the introduction of or any
change (including any change by way of imposition or increase of
reserve requirements) in or in the interpretation of any law or
regulation, or (ii) the compliance with any guideline or request
from any central bank or other Governmental Authority or
quasi-Governmental Authority exercising control over banks or
financial institutions generally (whether or not having the force
of law), any reserve (including any imposed by the Federal Reserve
Board), special deposit or similar requirement (including a
reserve, special deposit or similar requirement that takes the form
of a tax) against assets of, deposits with or for the account of,
or credit extended by, any Participant's office through which it
funds its obligations hereunder shall be imposed or deemed
applicable or any other condition affecting its obligation to make
or maintain its Funded Participant's Interest at a rate based upon
the Adjusted LIBO Rate shall be imposed on any Participant or its
office through which it funds its obligations hereunder or the
interbank Eurodollar market; and as a result thereof there shall be
any increase in the cost to such Participant of agreeing to make or
making, funding or maintaining funds its obligations hereunder
(except to the extent already included in the determination of the
applicable Adjusted LIBO Rate), or there shall be a reduction in
the amount received or receivable by that Participant or its office
through which it funds its obligations hereunder, then the Sponsor
shall from time to time, upon written notice from and demand by the
Participant (with a copy of such notice and demand to the
Servicer), pay to the Servicer for the account of that Participant
within five Business Days after the date specified in such notice
and demand, additional amounts sufficient to indemnify that
Participant against such increased cost. A certificate as to the
amount of such increased cost submitted to the Sponsor and the
Servicer by that Participant, shall, except for manifest error, be
final, conclusive and binding for all purposes.
(b) If while the Commitment or any Loan Commitments are
outstanding, any Participant (including any the Servicer)
determines that the adoption of any law, rule or regulation
regarding capital adequacy or capital maintenance, or any change in
any of the foregoing or in the interpretation or administration
thereof by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof,
or compliance by any Participant (or any lending office of such
Participant) or any Participant's holding company with any request
or directive regarding capital adequacy or capital maintenance
(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 capital or on the
capital of such Participant's holding company, if any, as a
consequence of this Agreement, the Loan Documents or the purchases
made by such Participant pursuant hereto to a level below that
which such Participant or such Participant's holding company could
have achieved but for such adoption, change or compliance (taking
into consideration such Participant's policies and the policies of
such Participant's holding company with respect to capital
adequacy) by an amount reasonably deemed by such Participant to be
material, then from time to time, within 15 days after written
demand by such Participant, the Sponsor pay to such Participant
such additional amount or amounts as will compensate such
Participant or such Participant's holding company for such
reduction. A certificate as to the amount of any such additional
amount or amounts, submitted to the Sponsor and the Servicer by
such Participant, shall, except for manifest error, be final,
conclusive and binding for all purposes.
2.10 Wind-Down Event.
In the event that (i) the Commitment is not extended for any reason
and the Commitment Termination Date occurs, (ii) the Sponsor has
made Guaranty Payments of $5,000,000 or more in the aggregate since
the Effective Date, or (iii) three or more Loans become Defaulted
Loans since the Effective Date (provided, that for purposes of this
clause (iii), (A) any Defaulted Loan that remains in the Limited
Guaranty Pool because a new Franchisee Partner has acquired an
interest in the Defaulted Borrower shall be treated as a separate
Loan for purposes of the three Defaulted Loan test above and (B)
any Defaulted Loans that are moved to the Fully Guaranteed Pool
shall not be treated as a Defaulted Loan for purposes of the three
Defaulted Loan test above unless and until such Loan is returned to
the Limited Guaranty Pool and another Loan Default occurs) (each, a
"Wind Down Event"), then the Sponsor shall not have the right to
request that any further Loan Commitments be established or that
any Loan Commitments be extended or renewed. The occurrence of a
Wind Down Event shall not affect the obligation of (x) the Servicer
to make Advances pursuant to existing Loan Commitments, (y) the
Participants to fund their Participant's Interest as provided
herein, or (z) the Credit Parties under the Operative Documents.
2.11 Pro Rata Treatment.
Subject to the application of payments pursuant to Article III and
except as specifically provided therein, each payment of principal
of any Funded Participant's Interest, each payment of interest with
respect to the Funded Participant's Interest, each payment of the
Commitment Fees and Participant's Letter of Credit Fees and each
reduction of the Commitment shall be allocated pro rata among the
Participants in accordance with their respective applicable Pro
Rata Share. Each Participant agrees that in computing such
Participant's portion of any Funded Participant's Interest to be
made hereunder, the Servicer may, in its discretion, round each
Participant's percentage of such Participant Funding Request to the
next higher or lower whole dollar amount.
2.12 Payments.
(a) The Sponsor shall make each payment required to be made
by Sponsor hereunder and under any other Operative Document to any
Participant or the Servicer not later than 1:00 p.m. (Atlanta,
Georgia time), on the date when due in dollars to the Servicer at
its offices in Atlanta, Georgia in immediately available funds.
(b) Whenever any payment hereunder or under any other
Operative Document shall become due, or otherwise would occur,
on a day that is not a Business Day, such payment may be made on
the next succeeding Business Day, and such extension of time shall
in such case be included in the computation of interest or
Commitment Fees, if applicable.
2.13 Sharing of Setoffs.
Each Participant agrees that if it shall, in accordance with
applicable law, through the exercise of a right of banker's lien,
setoff or counterclaim against the Sponsor or any Borrower, or
pursuant to a secured claim under Section 506 or Title 11 of the
United States Code or other security or interest arising from, or
in lieu of, such secured claim, received by the Participant under
any applicable bankruptcy, insolvency or other similar law or
otherwise, or by any other means, obtain payment (voluntary or
involuntary) in respect of any Funded Participant's Interest under
this Agreement as a result of which the unpaid principal portion of
its Funded Participant's Interest shall be proportionately less
than the unpaid principal portion of the Funded Participant's
Interest of any other Participant, it shall be deemed
simultaneously to have purchases from such other Participant at
face value, and shall promptly pay to such other Participant the
purchase price for, a participation in the Funded Participant's
Interest of such other Participant, so that the aggregate unpaid
principal amount of the Funded Participant's Interest and
participations in Funded Participant's Interests held by each
Participant shall be in the same proportion to the aggregate unpaid
principal amount of all Funded Participant's Interests then
outstanding as the principal amount of its Purchases prior to such
exercise of banker's lien, setoff or counterclaim or other event
was to the principal amount of all Funded Participant's Interests
outstanding prior to such exercise of banker's lien, setoff or
counterclaim or other event; provided, however, that, if any such
purchase or purchases or adjustments shall be made pursuant to this
Section and the payment giving rise thereto shall thereafter be
recovered, such purchase or purchases or adjustments shall be
rescinded to the extent of such recovery and the purchase price or
prices or adjustment restored without interest. The Sponsor
expressly consents to the foregoing arrangements and agrees, to the
extent permitted by applicable law, that any Participant holding a
Funded Participant's Interest or a participation in a Funded
Participant's Interest deemed to have been so purchased may
exercise any and all rights of banker's lien, setoff or
counterclaim with respect to any and all moneys owing by the
Sponsor to such Participant by reason thereof.
III. SERVICER'S SERVICING OBLIGATIONS; DISTRIBUTION OF PAYMENTS
3.1 Servicer's Obligations with Respect to Loans; Collateral; Non-
Recourse.
(a) The Servicer shall, for itself and the benefit of all
of the Participants and the Sponsor, (i) document, close, manage,
administer and collect the Loans and issue and administer the
Letters of Credit in accordance with the terms of this Agreement
and the Servicing Agreement and exercise all discretionary powers
involved in such management, administration and collection and (ii)
shall distribute the funds received with respect to the Loans and
Letter of Credit Obligations and from the Sponsor in accordance
with the terms of this Agreement. The Servicer agrees that it will
exercise the same care in administering the Loans as it exercises
with respect to loans of similar size and type in which no
participations are allocated, and each of the Participants agrees
that the Servicer shall have no further responsibility to the
Participants.
(b) The forms of Loan Agreement and Promissory Note used by
the Servicer as documentation for each Loan shall be substantially
in the forms attached hereto. The Sponsor shall have the right to
direct the Servicer to make modifications to such forms and
amendments thereto from time to time but the Sponsor may not direct
the Servicer to revise or amend such forms so as to be inconsistent
with the terms of Section 2.1 hereof.
(c) Notwithstanding anything in this Agreement to the
contrary, each of the Participants acknowledges and agrees that the
Servicer shall have no obligation to the Participants with respect
to (i) the creation, perfection, priority or continuation of any
Lien on any Collateral obtained by the Servicer with respect to the
Loans at the request of the Sponsor, or (ii) the obtaining or
retention of any guaranties required by the Sponsor (other than to
distribute any proceeds therefrom in accordance with the terms of
this Article III). The Participants acknowledge and agree that the
Sponsor has the right to release or modify the terms of, any
Collateral or any Personal Guaranty.
(d) Each of the Participants acknowledges and agrees that
all payments made to the Participants pursuant to this Agreement by
the Servicer shall be made solely from amounts received from the
Sponsor, the Borrowers and other obligors or Collateral under the
applicable Loan Documents and the Servicer shall have no personal
liability for any amounts payable to the Participants hereunder.
3.2 Application of Payments.
(a) The Servicer and the Sponsor shall instruct each
Borrower to make payments with respect to Loans, Letter of Credit
Obligations and the Loan Commitments directly to the Servicer,
either by mail, wire transfer or debit pursuant to an ACH
Authorization (as such term is defined in the Servicing Agreement).
(b) On each Payment Date which is the last day of a
calendar quarter, all payments of commitments fees received by the
Servicer from the Borrowers and the Sponsor and not previously
distributed, shall be applied to pay the Commitment Fees, with any
excess amount applied in accordance with the terms of the Servicing
Agreement.
(c) On each Payment Date, all payments of interest received
by the Servicer from the Borrowers and the Sponsor pursuant to its
Guaranty contained herein with respect to the Loans and not
previously distributed by the Servicer, shall be applied to pay all
accrued but unpaid interest on the Funded Participant's Interest
pursuant to this Agreement, then to pay all accrued but unpaid
Servicing Fees and then to pay the Sponsor's Fee, in accordance
with the terms of the Servicing Agreement.
(d) On each Payment Date, all payments of Letter of Credit
Fees received by the Servicer from the Borrowers and the Sponsor
pursuant to its Guaranty contained herein with respect to the
Letter of Credit Obligations and not previously distributed by the
Servicer, shall be applied to pay all accrued but unpaid
Participant's Letter of Credit Fees on the Funded Participant's
Letter of Credit Interest pursuant to this Agreement, then to pay
all accrued but unpaid Servicer's Letter of Credit Fees and then to
pay the Sponsor's Letter of Credit Fee, in accordance with the
terms of the Servicing Agreement.
(e) On any Business Day on which the Servicer shall receive
any payment in respect of the principal amount of any Loan, whether
from a Borrower, the Sponsor pursuant to its Guaranty contained
herein, or any other obligor with respect thereto, the Servicer may
elect, in its sole discretion to (i) apply such principal payment
to fund any requested Advances, (ii) apply such amount to repay any
outstanding Fronting Advances, or (iii) to either (x) distribute
such amount to the Participants to reduce each Participant's Funded
Participant's Interest or (y) apply such amount to STBA's Funded
Participant's Interest only (with the understanding that the
Funded Participant's Interest of each Participant shall not be
deemed to have been repaid until such amount is actually received
by such Participant); provided that, in the event that the Servicer
elects to apply any repayment to reduce STBA's Funded Participant's
Interest without a corresponding reduction of the other
Participant's Funded Participant's Interest, STBA shall be
obligated to make a payment to each Participant equal to such
Participant's Pro Rata Share of such payment upon the earlier of
(i) the next Payment Date and (ii) the occurrence of a Credit Event
hereunder.
(f) If during any period when no Credit Event has occurred
and is continuing, amounts received by Servicer are not capable of
being allocated to any specific Loan or Letter of Credit
Obligations or, in the case of amounts allocable to a specific Loan
or Letter of Credit Obligations, are not sufficient to repay all
obligations then due and owing with respect thereto, such amounts
shall be applied by the Servicer as follows: (i) first, to the
payment of Commitment Fees and Participant's Letter of Credit Fees
owing to the Participants hereunder, (ii) second, to the payment of
accrued interest on the Funded Participant's Interest hereunder,
(iii) third, to the payment of the Servicing Fees and Servicer's
Letter of Credit Fees owing under the Servicing Agreement, (iv)
fourth, to the repayment of the Funded Participant's Interests
outstanding hereunder, (v) fifth, to the payment of all other
amounts owing to the Servicer or any Participant hereunder, and
(vi) sixth, if all obligations of the Sponsor pursuant to the
Operative Documents have been satisfied in full, to the Sponsor.
(g) During any period when a Credit Event has occurred and
is continuing, any amounts received by Servicer with respect to the
Loans or the Letter of Credit Obligations shall be applied, after
deduction of any expenses incurred in the collection of any such
amounts, as follows (i) first, to the payment of any accrued and
unpaid Servicing Fees and Servicer's Letter of Credit Fees, (ii)
second, to each Participant in accordance with Pro Rata Share, and
(iii) thereafter, to such Persons as may be legally entitled
thereto.
(h) If not sooner repaid, all amounts due and payable to
the Servicer and the Participants shall be due and payable in full
on the Final Termination Date, and if any Letter of Credit
Obligations are outstanding on such date, the Sponsor shall be
required to post cash collateral for such Letter of Credit
Obligations in an amount equal to 105% thereof.
3.3 Servicing Report.
On each Payment Date, the Servicer shall telecopy to the Sponsor
and each Participant a servicing report in the form of Exhibit F
attached hereto (the "Servicing Report") setting forth the
following information with respect the Loans:
a. the aggregate principal balance of the Loans as of the
close of business on the last Business Day of the preceding Payment
Period;
b. the aggregate amount of Loans repurchased by the
Sponsor or amounts collected with respect to the Collateral for the
Loans;
c. the aggregate amount of Letter of Credit Outstandings
as of the close of business on the last Business Day of the
preceding Payment Period;
d. the aggregate Loan Commitments as of the close of
business on the last Business Day of the preceding Payment Period;
and
e. each Loan which is fifteen days or more past due
(including the past due amount and the number of days past due).
IV. LOAN DEFAULT; RIGHT TO MAKE GUARANTY DEMAND
4.1 Notice Of Loan Default.
The Servicer shall notify the Sponsor and the relevant Borrower of
a Loan Payment Default within fifteen (15) days following the
occurrence thereof and of any other Loan Default in accordance with
the terms of the Servicing Agreement.
4.2 Waiver or Cure By The Sponsor; Fully Guaranteed Pool.
Unless a Credit Event or Unmatured Credit Event has occurred and is
continuing, within the Response Period, the Sponsor shall be
entitled (but not obligated) to, in the case of a Loan Payment
Default, cure such Loan Payment Default and shall be entitled to
waive any other Loan Default except as set forth in Section 4.4.
During a Response Period, the Servicer shall refrain from taking
any legal action against the Defaulted Borrower under the Defaulted
Loan which is the subject of such Response Period, and from
accelerating payment of the Loan Indebtedness under such Defaulted
Loan but the Servicer shall cease funding any further Advances
pursuant to the Loan Commitment or issuing any Letters of Credit.
If the Sponsor cures a Loan Payment Default prior to the expiration
of a Response Period and waives any other Loan Default (subject to
Section 4.4) prior to the expiration of a Response Period, then as
to each Loan Payment Default or other Loan Default so waived or so
cured, the Defaulted Borrower's and the Servicer's respective
rights and obligations under the Loan Documents shall be restored
to the same status as if such waived or cured Loan Default never
occurred except that, with respect to any Loan Payment Default
cured by the Sponsor hereunder, such Loan shall be deemed to have
been moved from the Limited Guaranty Pool into the Fully Guaranteed
Pool and shall thereafter be guaranteed fully and completely by the
Sponsor as provided herein.
4.3 Standstill Period; Defaulted Loan Guaranty Demand.
(a) In the event that following the end of a Response
Period, a Loan Payment Default is not cured or in the event that
any other Loan Default is not then waived, then unless a Credit
Event has occurred and is continuing, the Servicer will continue to
refrain from exercising remedies against such Borrower during the
Standstill Period provided that the Sponsor immediately pays all
past due interest and fees owing to the Servicer pursuant to the
applicable Loan Documents, if any, on such Defaulted Loans. After
the Standstill Period ends, the Servicer shall have the right at
any time thereafter, to demand payment of the entire Loan
Indebtedness with respect to such Loan from the Sponsor pursuant to
Article VIII hereof (unless the events set forth in Section
8.3(b)(ii) or (iii) have occurred), which amount, subject to the
limitations set forth therein, shall be due and payable on the date
which is five (5) days following demand. The Sponsor hereby
acknowledges and agrees that the requirement for payment in full of
the Loan Indebtedness shall include the posting of cash collateral
with the Servicer in an amount equal to 105% of the outstanding
Letter of Credit Obligations of such Borrower, unless the
outstanding Letters of Credit are canceled and returned to the
Servicer. The provisions of this Section 4.2(a) are subject in all
respects to Section 8.2 below.
(b) In the event that the Sponsor is not obligated to repay
the Loan Indebtedness with respect to a Defaulted Loan pursuant to
Article VIII hereof or in the event that a Credit Event has
occurred and is continuing and Sponsor has not purchased all
outstanding Loans hereunder, the Sponsor agrees that the Servicer
shall be released from its obligations to the Sponsor hereunder
with respect to administering and enforcing all Loans and may
administer and enforce such Loans and Letter of Credit Obligations
as it deems appropriate, without regard to any limitations or
restrictions set forth herein (but subject to Article III hereof in
all events) or in any other Operative Document.
4.4 No Waiver or Cure Available.
Notwithstanding anything contained in this Article to the contrary,
but subject to the limitations set forth in Section 8.2 below, the
Sponsor shall, within seven (7) days of its receipt of a written
demand from the Servicer instructing it to do so, make payment of
the Loan Indebtedness of any Loan and assume the Loan Commitment of
a Defaulted Borrower whose Loan Default either arises from the
bankruptcy or insolvency of the Borrower or the termination of the
Franchise Documents with such Borrower. The Sponsor hereby
acknowledges and agrees that, subject to the limitations set forth
in Section 8.2 below, the requirement for payment in full of the
Loan Indebtedness shall include the posting of cash collateral with
the Servicer in an amount equal to 105% of the outstanding Letter
of Credit Obligations of such Borrower.
4.5 Fixed Charge Coverage Ratio for Loan Documents executed under the
Prior Loan Agreement.
(a) The parties hereto acknowledge that the Loan Documents
executed under the Prior Loan Facility Agreement do not contain a
fixed charge coverage ratio in the form required under the Loan
Agreement attached hereto as Exhibit C. Notwithstanding the fact
that no Loan Default can arise under such Loan Documents as a
result of the applicable Borrower failing to meet such fixed charge
coverage ratio, a Loan Default shall be deemed to have occurred for
purposes of this Agreement if the Franchisee Fixed Charge Coverage
Ratio for any Borrower that executed Loan Documents under the Prior
Loan Facility Agreement is less than 1.2 to 1.0, as of the last day
of any fiscal quarter based upon the preceding twelve-month period,
commencing on the last day of the first fiscal quarter of such
Borrower in which such Borrower or its Subsidiaries own at least
one Qualified Store.
(b) During the sixty-day period immediately following the date
that the Sponsor delivers the Borrower Compliance Certificate to
the Servicer setting forth any Deemed Loan Default, the Sponsor
shall have the right, by written notice to the Servicer, to move
the Loan with respect to which the Deemed Loan Default has occurred
from the Limited Guaranty Pool and into the Fully Guaranteed Pool.
If such Loan has not been moved into the Fully Guaranteed Pool at
the end of such sixty-day period, then the Sponsor must purchase
such Loan and assume the related Loan Commitment for a purchase
price equal to the outstanding Loan Indebtedness, including the
posting of cash collateral with the Servicer in an amount equal to
105% of the outstanding Letter of Credit Obligations of such
Borrower (unless the outstanding Letters of Credit are canceled and
returned to the Servicer), on the date which is 120 days after the
date that the Sponsor delivers the Borrower Compliance Certificate
to the Servicer setting forth any Deemed Loan Default, unless prior
to the expiration of such 120-day period, the events set forth in
Section 8.3(c)(i) or (ii) have occurred with respect to such Loan.
Any amounts paid by the Sponsor to repurchase such Loans from the
Limited Guaranty Pool shall be deemed Guaranty Payments and shall
be subject to the limitations set forth in Section 8.2.
4.6 Movement of Loans into and out of Fully Guaranteed Pool.
(a) If no Loan Payment Default or Loan Default have occurred for
four consecutive fiscal quarters with respect to any Loan in the
Fully Guaranteed Pool, the Sponsor shall have the right, by written
notice to the Servicer, to move such Loan out of the Fully
Guaranteed Pool and into the Limited Guaranty Pool.
(b) If a Loan that otherwise must be repurchased by the Sponsor
pursuant to Section 8.3(b) or 8.3(c) instead remains in the Limited
Guaranty Pool as a result of the events described in 8.3(b)(ii) or
8.3(c)(ii), the Sponsor shall have the right to place such Loan in
the Fully Guaranteed Pool within thirty (30) days of such new
Franchise Partner acquiring an interest in the applicable Borrower,
by delivering written notice thereof to the Servicer. The Sponsor
shall also have the right to move any Loan placed in the Fully
Guaranteed Pool pursuant to this Section 4.6(b) from the Fully
Guaranteed Pool and into the Limited Guaranty Pool at any time by
delivering written notice thereof to the Servicer.
4.7 Extension of Maturity Date of Defaulted Loans during the Response
Period and the Standstill Period.
The Servicer, Participants and the Sponsor agree that (x) during
any Response Period, the maturity date of any Loans that have matured
prior to, or mature during, such Response Period shall automatically be
extended to the last day of such Response Period and (y) during any
Standstill Period, the maturity date of any Loans that have matured prior
to, or mature during, such Standstill Period shall automatically be
extended to the last day of such Standstill Period.
V. REPRESENTATIONS AND WARRANTIES
5.1 Representations and Warranties. The Sponsor (as to itself and each
of the Consolidated Companies) hereby represents and warrants to the
Servicer and each of the Participants that:
(a) Corporate Existence; Compliance with Law. Each of the
Consolidated Companies is a corporation duly organized, validly
existing, and in good standing under the laws of the jurisdiction
of its incorporation, and each of the Credit Parties has the
corporate power and authority and the legal right to own and
operate its property and to conduct its business. Each of the
Consolidated Companies (i) has the corporate power and authority
and the legal right to own and operate its property and to conduct
its business, (ii) is duly qualified as a foreign corporation and
in good standing under the laws of each jurisdiction where its
ownership of property or the conduct of its business requires such
qualification, and (iii) is in compliance with all Requirements of
Law, where (a) the failure to have such power, authority and legal
right as set forth in clause (i), (b) the failure to be so
qualified or in good standing as set forth in clause (ii), or (c)
the failure to comply with Requirements of Law as set forth in
clause (iii), would reasonably be expected, in the aggregate, to
have a Materially Adverse Effect. The jurisdiction of
incorporation or organization, and the ownership of all issued and
outstanding capital stock, for each Subsidiary as of the date of
this Agreement is accurately described on Schedule 5.1(a);
(b) Corporate Power; Authorization. Each of the Credit
Parties has the corporate power and authority to make, deliver and
perform the Operative Documents to which it is a party and has
taken all necessary corporate action to authorize the execution,
delivery and performance of such Operative Documents. No consent
or authorization of, or filing with, any Person (including, without
limitation, any governmental authority), is required in connection
with the execution, delivery or performance by any Credit Party, or
the validity or enforceability against any Credit Party, of the
Operative Documents, other than such consents, authorizations or
filings which have been or will be made or obtained;
(c) Enforceable Obligations. This Agreement has been duly
executed and delivered, and each other Operative Document will be
duly executed and delivered, by the respective Credit Parties, and
this Agreement constitutes, and each other Operative Document when
executed and delivered will constitute, legal, valid and binding
obligations of the Credit Parties, respectively, enforceable
against the Credit Parties in accordance with their respective
terms, except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or similar laws affecting
the enforcement of creditors' rights generally and by general
principles of equity;
(d) No Legal Bar. The execution, delivery and performance
by the Credit Parties of the Operative Documents will not violate
any Requirement of Law or cause a breach or default under any of
their respective material Contractual Obligations;
(e) No Material Litigation. Except as set forth on
Schedule 5.1(e) or in any notice furnished to the Participants
pursuant to Section 6.1(g)(v) at or prior to the respective times
the representations and warranties set forth in this Section 5.1(e)
are made or deemed to be made hereunder, no litigation,
investigations or proceedings of or before any courts, tribunals,
arbitrators or governmental authorities are pending or, to the
knowledge of Sponsor, threatened by or against any of the
Consolidated Companies, or against any of their respective
properties or revenues, existing or future (x) with respect to any
Operative Document, or any of the transactions contemplated hereby
or thereby, or (y) seeking money damages in excess of $2,500,000,
either singly or in the aggregate or which, if adversely
determined, would otherwise reasonably be expected to have a
Materially Adverse Effect;
(f) Investment Company Act, Etc. None of the Credit
Parties is an "investment company" or a company "controlled" by an
"investment company" (as each of the quoted terms is defined or
used in the Investment Company Act of 1940, as amended). None of
the Credit Parties is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, or any
foreign, federal or local statute or regulation limiting its
ability to incur indebtedness for money borrowed, guarantee such
indebtedness, or pledge its assets to secure such indebtedness, as
contemplated hereby or by any other Operative Document;
(g) Margin Regulations. No part of the proceeds of any of
the Loans will be used for any purpose which violates, or which
would be inconsistent or not in compliance with, the provisions of
the applicable Margin Regulations;
(h) Compliance With Environmental Laws.
(i) The Consolidated Companies have received no
notices of claims or potential liability under, and are in
compliance with, all applicable Environmental Laws, where
such claims and liabilities under, and failures to comply
with, such statutes, regulations, rules, ordinances, laws or
licenses, would reasonably be expected to result in
penalties, fines, claims or other liabilities to the
Consolidated Companies in amounts in excess of $500,000,
either individually or in the aggregate (including any such
penalties, fines, claims, or liabilities relating to the
matters set forth on Schedule 5.1(h)(i)), except as set forth
on Schedule 5.1(h)(i) or in any notice furnished to the
Participants pursuant to Section 6.1(g)(vi) at or prior to
the respective times the representations and warranties set
forth in this Section 5.1(h)(i) are made or deemed to be made
hereunder;
(ii) Except as set forth on Schedule 5.1(h)(ii) or in
any notice furnished to the Participants pursuant to Section
6.1(g)(vi) at or prior to the respective times the
representations and warranties set forth in this Section
5.1(h)(ii) are made or deemed to be made hereunder, none of
the Consolidated Companies has received any notice of
violation, or notice of any action, either judicial or
administrative, from any Governmental Authority (whether
United States or foreign) relating to the actual or alleged
violation of any Environmental Law, including, without
limitation, any notice of any actual or alleged spill, leak,
or other release of any Hazardous Substance, waste or
hazardous waste by any Consolidated Company or its employees
or agents, or as to the existence of any contamination on any
properties owned by any Consolidated Company, where any such
violation, spill, leak, release or contamination would
reasonably be expected to result in penalties, fines, claims
or other liabilities to the Consolidated Companies in amounts
in excess of $500,000, either individually or in the
aggregate;
(iii) Except as set forth on Schedule 5.1(h)(iii), the
Consolidated Companies have obtained all necessary
governmental permits, licenses and approvals which are
material to the operations conducted on their respective
properties, including without limitation, all required
material permits, licenses and approvals for (i) the emission
of air pollutants or contaminants, (ii) the treatment or
pretreatment and discharge of waste water or storm water,
(iii) the treatment, storage, disposal or generation of
hazardous wastes, (iv) the withdrawal and usage of ground
water or surface water, and (v) the disposal of solid wastes;
(i) Insurance. The Consolidated Companies currently
maintain insurance with respect to their respective properties and
businesses, with financially sound and reputable insurers, having
coverages against losses or damages of the kinds customarily
insured against by reputable companies in the same or similar
businesses, such insurance being in amounts no less than those
amounts which are customary for such companies under similar
circumstances. The Consolidated Companies have paid all material
amounts of insurance premiums now due and owing with respect to
such insurance policies and coverages, and such policies and
coverages are in full force and effect;
(j) No Default. None of the Consolidated Companies is in
default under or with respect to any Contractual Obligation in any
respect which default or defaults would be reasonably expected in
the aggregate to have a Materially Adverse Effect;
(k) No Burdensome Restrictions. Except as set forth in any
notice furnished to the Participants pursuant to Section 6.1(g)(xi)
at or prior to the respective times the representations and
warranties set forth in this Section 5.1(k) are made or deemed to
be made hereunder, none of the Consolidated Companies is a party to
or bound by any Contractual Obligation or Requirement of Law which
has had or would reasonably be expected to have a Materially
Adverse Effect;
(l) Taxes. Except as set forth on Schedule 5.1(l), each of
the Consolidated Companies have filed or caused to be filed all
declarations, reports and tax returns which are required to have
been filed, and has paid all taxes, custom duties, levies, charges
and similar contributions ("taxes" in this Section 5.1(l)) shown to
be due and payable on said returns or on any assessments made
against it or its properties, and all other taxes, fees or other
charges imposed on it or any of its properties by any governmental
authority (other than those the amount or validity of which is
currently being contested in good faith by appropriate proceedings
and with respect to which reserves in conformity with GAAP have
been provided in its books); and no tax liens have been filed and,
to the knowledge of Sponsor, no claims are being asserted with
respect to any such taxes, fees or other charges;
(m) Subsidiaries. Except as disclosed on Schedule 5.1(m),
on the date of this Agreement, Sponsor has no Subsidiaries and
neither Sponsor nor any Subsidiary is a joint venture partner or
general partner in any partnership. Except as disclosed on
Schedule 5.1(m) or in any notice furnished to the Participants
pursuant to Section 6.1(g)(xii) at or prior to the respective times
the representations and warranties set forth in this Section 5.1(m)
are made or deemed to be made hereunder, Sponsor has no Material
Subsidiaries;
(n) Financial Statements. Sponsor has furnished to the
Servicer and the Participants (i) the audited consolidated balance
sheet as of June 1, 1996 of Sponsor and the related consolidated
and consolidating statements of income, shareholders' equity and
cash flows for the fiscal year then ended, including in each case
the related schedules and notes, (ii) the unaudited balance sheet
of Sponsor presented on a consolidated basis as at the end of the
third fiscal quarter of 1997, and the related unaudited
consolidated and consolidating statements of income, shareholders'
equity and cash flows presented on a consolidated basis for the
year-to-date period then ended, setting forth in each case in
comparative form the figures for the corresponding quarter of
Sponsor's previous fiscal year. The foregoing financial statements
fairly present in all material respects the consolidated and
consolidating financial condition of Sponsor as at the dates
thereof and results of operations for such periods in conformity
with GAAP consistently applied (subject, in the case of the
quarterly financial statements, to normal year-end audit
adjustments and the absence of certain footnotes). The
Consolidated Companies taken as a whole do not have any material
contingent obligations, contingent liabilities, or material
liabilities for known taxes, long-term leases or unusual forward or
long-term commitments not reflected in the foregoing financial
statements or the notes thereto. Since June 1, 1996, there have
been no changes with respect to the Consolidated Companies which
have had or which would reasonably be expected to have a Materially
Adverse Effect.
(o) ERISA. Except as disclosed on Schedule 5.1(o) or in
any notice to the Participants furnished pursuant to Section
6.1(g)(vii) at or prior to the respective times the representations
and warranties set forth in this Section 5.1(o) are made or deemed
to be made hereunder:
(i) Indemnification of Plans. None of the
Consolidated Companies nor any of their respective ERISA
Affiliates maintains or contributes to, or has during the
past seven years maintained or contributed to, any Plan that
is subject to Title IV of ERISA;
(ii) Compliance. Each Plan maintained by the
Consolidated Companies has at all times been maintained, by
its terms and in operation, in compliance with all applicable
laws, and the Consolidated Companies are subject to no tax or
penalty with respect to any Plan of such Consolidated Company
or any ERISA Affiliate thereof, including without limitation,
any tax or penalty under Title I or Title IV of ERISA or
under Chapter 43 of the Tax Code, or any tax or penalty
resulting from a loss of deduction under Sections 162, 404,
or 419 of the Tax Code, where the failure to comply with such
laws, and such taxes and penalties, together with all other
liabilities referred to in this Section 5.1(o) (taken as a
whole), would in the aggregate have a Materially Adverse
Effect;
(iii) Liabilities. The Consolidated Companies are
subject to no liabilities (including withdrawal liabilities)
with respect to any Plans of such Consolidated Companies or
any of their ERISA Affiliates, including without limitation,
any liabilities arising from Titles I or IV of ERISA, other
than obligations to fund benefits under an ongoing Plan and
to pay current contributions, expenses and premiums with
respect to such Plans, where such liabilities, together with
all other liabilities referred to in this Section 5.1(o)
(taken as a whole), would in the aggregate have a Materially
Adverse Effect;
(iv) Funding. The Consolidated Companies and, with
respect to any Plan which is subject to Title IV of ERISA,
each of their respective ERISA Affiliates, have made full and
timely payment of all amounts (A) required to be contributed
under the terms of each Plan and applicable law, and (B)
required to be paid as expenses (including PBGC or other
premiums) of each Plan, where the failure to pay such amounts
(when taken as a whole, including any penalties attributable
to such amounts) would have a Materially Adverse Effect. No
Plan subject to Title IV of ERISA (other than a Multiemployer
Plan) has an "amount of unfunded benefit liabilities" (as
defined in Section 4001(a)(18) of ERISA), determined as if
such Plan terminated on any date on which this representation
and warranty is deemed made, in any amount which, together
with all other liabilities referred to in this Section 5.1(o)
(taken as a whole), would have a Materially Adverse Effect if
such amount were then due and payable. None of the
Consolidated Companies would be subject to withdrawal
liability with respect to any Multiemployer Plan, determined
as if the event resulting in such withdrawal liability
occurred on any date on which this representation is made or
deemed to be made based on the most recent actuarial
valuation data made available to employers participating in
the Multiemployer Plan, in any amount which, together with
all other liabilities referred to in this Section 5.1(o)
(taken as a whole), would have a Materially Adverse Effect if
such amounts were then due and payable. The Consolidated
Companies are subject to no liabilities with respect to post-
retirement medical benefits in any amounts which, together
with all other liabilities referred to in this Section 5.1(o)
(taken as a whole), would have a Materially Adverse Effect if
such amounts were then due and payable;
(p) Patents, Trademarks, Licenses, Etc. Except as set
forth on Schedule 5.1(p), (i) the Consolidated Companies have
obtained and hold in full force and effect all material patents,
trademarks, service marks, trade names, copyrights, licenses and
other such rights, free from material burdensome restrictions,
which are necessary for the operation of their respective
businesses as presently conducted, and (ii) to the best of
Sponsor's knowledge, no product, process, method, service or other
item presently sold by or employed by any Consolidated Company in
connection with such business infringes any patents, trademark,
service xxxx, trade name, copyright, license or other right owned
by any other person and there is not presently pending, or to the
knowledge of Sponsor, threatened, any claim or litigation against
or affecting any Consolidated Company contesting such Person's
right to sell or use any such product, process, method, substance
or other item where the result of such failure to obtain and hold
such benefits or such infringement would have a Materially Adverse
Effect;
(q) Ownership of Property. Except as set forth on Schedule
5.1(q), each Consolidated Company has good and marketable fee
simple title to or a valid leasehold interest in all of its real
property and good title to, or a valid leasehold interest in, all
of its other property, as such properties are reflected in the
consolidated balance sheet of the Consolidated Companies as of June
30, 1996 referred to in Section 5.1(n), other than properties
disposed of in the ordinary course of business since such date or
as otherwise permitted by the terms of this Agreement, subject to
no Lien or title defect of any kind, except Permitted Liens. The
Consolidated Companies enjoy peaceful and undisturbed possession
under all of their respective material leases;
(r) Indebtedness. As of the Closing Date, except for the
Indebtedness set forth on Schedule 6.2(a), none of the Consolidated
Companies is an obligor in respect of any Indebtedness for borrowed
money, or any commitment to create or incur any Indebtedness for
borrowed money, in an amount greater than $1,000,000 in any single
case, and such Indebtedness and commitments for amounts less than
$1,000,000 do not exceed $2,500,000 in the aggregate for all such
Indebtedness and commitments of the Consolidated Companies;
(s) Financial Condition. On the Closing Date and after
giving effect to the transactions contemplated by this Agreement
and the other Operative Documents, including without limitation,
the making of the Loans hereunder, (i) the assets of each Credit
Party at fair valuation and based on their present fair saleable
value (including, without limitation, the fair and realistic value
of any contribution or subrogation rights in respect of any
Guaranty Agreement given by such Credit Party) will exceed such
Credit Party's debts, including contingent liabilities (as such
liabilities may be limited under the express terms of any Guaranty
Agreement of such Credit Party), (ii) the remaining capital of such
Credit Party will not be unreasonably small to conduct the Credit
Party's business, and (iii) such Credit Party will not have
incurred debts, or have intended to incur debts, beyond the Credit
Party's ability to pay such debts as they mature. For purposes of
this Section 5.1(s), "debt" means any liability on a claim, and
"claim" means (a) the right to payment, whether or not such right
is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal,
equitable, secured or unsecured, or (b) the right to an equitable
remedy for breach of performance if such breach gives rise to a
right to payment, whether or not such right to an equitable remedy
is reduced to judgment, fixed, contingent, matured, unmatured,
disputed, undisputed, secured or unsecured;
(t) Labor Matters. The Consolidated Companies have
experienced no strikes, labor disputes, slow downs or work
stoppages due to labor disagreements which have had, or would
reasonably be expected to have, a Materially Adverse Effect, and,
to the best knowledge of Sponsor, there are no such strikes,
disputes, slow downs or work stoppages threatened against any
Consolidated Company. The hours worked and payment made to
employees of the Consolidated Companies have not been in violation
in any material respect of the Fair Labor Standards Act or any
other applicable law dealing with such matters. All payments due
from the Consolidated Companies, or for which any claim may be made
against the Consolidated Companies, on account of wages and
employee health and welfare insurance and other benefits have been
paid or accrued as liabilities on the books of the Consolidated
Companies where the failure to pay or accrue such liabilities would
reasonably be expected to have a Materially Adverse Effect;
(u) Payment or Dividend Restrictions. Except as described
on Schedule 5.1(a), none of the Consolidated Companies is party to
or subject to any agreement or understanding restricting or
limiting the payment of any dividends or other distributions by any
such Consolidated Company;
(v) Sharing Agreements. Each of the Sharing Agreements is
in full force and effect and no material default exists thereunder;
and
(w) Disclosure. No representation or warranty contained in
this Agreement (including the Schedules attached hereto) or in any
other document furnished from time to time pursuant to the terms of
this Agreement, contains or will contain any untrue statement of a
material fact or omits or will omit to state any material fact
necessary to make the statements herein or therein not misleading
in any material respect as of the date made or deemed to be made.
Except as may be set forth herein (including the Schedules attached
hereto), there is no fact known to Sponsor which has had, or is
reasonably expected to have, a Materially Adverse Effect.
5.2 Representations and Warranties with Respect to Specific Loans.
The Sponsor represents and warrants to the Servicer and each
Participant with respect to each Loan Commitment established and
each Advance made pursuant to the Operative Documents that:
(a) The Promissory Note, Loan Agreement and each other Loan
Document executed in connection with such Loan Commitment each
constitutes a valid and binding agreement of each Borrower or
guarantor party thereto and is enforceable against each such party
in accordance with its terms.
(b) The Promissory Note and accompanying Loan Documents
executed in connection with such Loan and delivered to the Servicer
are the only contracts evidencing the transaction described therein
and constitute the entire agreement of the parties thereto with
respect to such transaction and Sponsor has not made any other
promises, agreements or representations and warranties with respect
to the transactions evidenced by such Promissory Note.
(c) The Promissory Note and each accompanying Loan Document
executed in connection with such Loan is genuine and all
signatures, names, amounts and other facts and statements therein
and thereon are true and correct.
(d) All disclosures required to be made under applicable
federal and state law in connection with such Loan have been
properly and completely made with respect to each Promissory Note,
the other Loan Documents and the Loan and each such Promissory
Note, other Loan Documents and Loan is in full compliance with all
applicable federal and state laws, including without limitation,
applicable state and federal usury laws and regulations.
(e) The proceeds of each Promissory Note will be solely for
the purpose of financing the acquisition and expansion of
restaurants franchised by the Sponsor and operated by the relevant
Borrower and not for any non-business purposes.
VI. COVENANTS
6.1 Affirmative Covenants.
The Sponsor covenants and agrees that it will, as long as the
Commitment is in effect or the Servicer is committed to make
Advances under any Loan Documents and thereafter so long as any
Loans remain outstanding under this Agreement or Sponsor has any
other unsatisfied obligations under the Operative Documents:
(a) Corporate Existence, Etc. Preserve and maintain, and
cause each of its Material Subsidiaries to preserve and maintain,
its corporate existence, its material rights, franchises, and
licenses, and its material patents and copyrights (for the
scheduled duration thereof), trademarks, trade names, and service
marks, necessary or desirable in the normal conduct of its
business, and its qualification to do business as a foreign
corporation in all jurisdictions where it conducts business or
other activities making such qualification necessary, where the
failure to be so qualified would reasonably be expected to have a
Materially Adverse Effect.
(b) Compliance with Laws, Etc. Comply, and cause each of
its Subsidiaries to comply with all Requirements of Law (including,
without limitation, the Environmental Laws subject to the exception
set forth in Section 5.1(h) where the penalties, claims, fines, and
other liabilities resulting from noncompliance with such
Environmental Laws do not involve amounts in excess of $2,500,000
in the aggregate) and Contractual Obligations applicable to or
binding on any of them where the failure to comply with such
Requirements of Law and Contractual Obligations would reasonably be
expected to have a Materially Adverse Effect.
(c) Payment of Taxes and Claims, Etc. Pay, and cause each
of its Subsidiaries to pay, (i) all taxes, assessments and
governmental charges imposed upon it or upon its property, and (ii)
all claims (including, without limitation, claims for labor,
materials, supplies or services) which might, if unpaid, become a
Lien upon its property, unless, in each case, the validity or
amount thereof is being contested in good faith by appropriate
proceedings and adequate reserves are maintained with respect
thereto.
(d) Keeping of Books. Keep, and cause each of its
Subsidiaries to keep, proper books of record and account,
containing complete and accurate entries of all their respective
financial and business transactions.
(e) Visitation, Inspection, Etc. Permit, and cause each of
its Subsidiaries to permit, any representative of the Servicer or
any Participant to visit and inspect any of its property, to
examine its books and records and to make copies and take extracts
therefrom, and to discuss its affairs, finances and accounts with
its officers, all at such reasonable times and as often as the
Servicer or such Participant may reasonably request.
(f) Insurance; Maintenance of Properties.
(i) Maintain or cause to be maintained with
financially sound and reputable insurers, insurance with
respect to its properties and business, and the properties
and business of its Subsidiaries, against loss or damage of
the kinds customarily insured against by reputable companies
in the same or similar businesses, such insurance to be of
such types and in such amounts as is customary for such
companies under similar circumstances; provided, however,
that in any event Sponsor shall use its best efforts to
maintain, or cause to be maintained, insurance in amounts and
with coverages not materially less favorable to any
Consolidated Company as in effect on the date of this
Agreement.
(ii) Cause, and cause each of the Consolidated
Companies to cause, all properties used or useful in the
conduct of its business to be maintained and kept in good
condition, repair and working order and supplied with all
necessary equipment and will cause to be made all necessary
repairs, renewals, replacements, settlements and improvements
thereof, all as in the judgment of Sponsor may be necessary
so that the business carried on in connection therewith may
be properly and advantageously conducted at all times.
(g) Reporting Covenants. Furnish to each Participant:
(i) Annual Financial Statements. As soon as
available and in any event within 90 days after the end of
each Fiscal Year of Sponsor, balance sheets of the
Consolidated Companies as at the end of such year, presented
on a consolidated basis, and the related statements of
income, shareholders' equity, and cash flows of the
Consolidated Companies for such Fiscal Year, presented on a
consolidated basis, setting forth in each case in comparative
form the figures for the previous Fiscal Year, all in
reasonable detail and accompanied by a report thereon of
Ernst & Young or other independent public accountants of
comparable recognized national standing, which such report
shall be unqualified as to going concern and scope of audit
and shall state that such financial statements present fairly
in all material respects the financial condition as at the
end of such Fiscal Year on a consolidated basis, and the
results of operations and statements of cash flows of the
Consolidated Companies for such Fiscal Year in accordance
with GAAP and that the examination by such accountants in
connection with such consolidated financial statements has
been made in accordance with generally accepted auditing
standards;
(ii) Quarterly Financial Statements. As soon as
available and in any event within 45 days after the end of
each fiscal quarter of Sponsor (other than the fourth fiscal
quarter), balance sheets of the Consolidated Companies as at
the end of such quarter presented on a consolidated basis and
the related statements of income, shareholders' equity, and
cash flows of the Consolidated Companies for such fiscal
quarter and for the portion of Sponsor's Fiscal Year ended at
the end of such quarter, presented on a consolidated basis
setting forth in each case in comparative form the figures
for the corresponding quarter and the corresponding portion
of Sponsor's previous Fiscal Year, all in reasonable detail
and certified by the chief financial officer or principal
accounting officer of Sponsor that such financial statements
fairly present in all material respects the financial
condition of the Consolidated Companies as at the end of such
fiscal quarter on a consolidated basis, and the results of
operations and statements of cash flows of the Consolidated
Companies for such fiscal quarter and such portion of
Sponsor's Fiscal Year, in accordance with GAAP consistently
applied (subject to normal year-end audit adjustments and the
absence of certain footnotes);
(iii) No Default/Compliance Certificate. Together with
the financial statements required pursuant to subsections (i)
and (ii) above, a certificate of the treasurer or chief
financial officer of Sponsor (x) to the effect that, based
upon a review of the activities of the Consolidated Companies
and such financial statements during the period covered
thereby, there exists no Credit Event or Unmatured Credit
Event under this Agreement, or if there exists a Credit Event
or Unmatured Credit Event hereunder, specifying the nature
thereof and the proposed response thereto, and (y)
demonstrating in reasonable detail compliance as at the end
of such Fiscal Year or such fiscal quarter with Section
6.1(h) and Sections 6.2(a) through 6.2(e);
(iv) Borrower Compliance Certificate. As soon as
available and no later than (i) forty-five days after the end
of each fiscal quarter of each Borrower and (ii) ninety days
after the end of each fiscal year of each Borrower, a
certificate of the chief financial officer of Sponsor
demonstrating in reasonable detail compliance by such
Borrower with the "Fixed Charge Coverage Ratio" (as defined
in the form of Loan Agreement attached hereto as Exhibit C)
or, if such Borrower executed Loan Documents under the Prior
Loan Facility Agreement, the Franchisee Fixed Charge Coverage
Ratio as defined herein, as at the end of each such fiscal
quarter or fiscal year.
(v) Notice of Credit Event. Promptly after any
Executive Officer of Sponsor has notice or knowledge of the
occurrence of a Credit Event or an Unmatured Credit Event, a
certificate of the chief financial officer or principal
accounting officer of Sponsor specifying the nature thereof
and the proposed response thereto;
(vi) Litigation. Promptly after (i) the occurrence
thereof, notice of the institution of or any material adverse
development in any material action, suit or proceeding or any
governmental investigation or any arbitration, before any
court or arbitrator or any governmental or administrative
body, agency or official, against any Consolidated Company,
or any material property of any thereof seeking money damages
in excess of $2,500,000 or which, if adversely determined,
would otherwise reasonably be expected to have a Materially
Adverse Effect, or (ii) actual knowledge thereof, notice of
the threat of any such action, suit, proceeding,
investigation or arbitration;
(vii) Environmental Notices. Promptly after receipt
thereof, notice of any actual or alleged violation, or notice
of any action, claim or request for information, either
judicial or administrative, from any governmental authority
relating to any actual or alleged claim, notice of potential
responsibility under or violation of any Environmental Law,
or any actual or alleged spill, leak, disposal or other
release of any waste, petroleum product, or hazardous waste
or Hazardous Substance by any Consolidated Company which
could result in penalties, fines, claims or other liabilities
to any Consolidated Company in amounts in excess of $500,000;
(viii) ERISA. (A) Promptly after the occurrence
thereof with respect to any Plan of any Consolidated Company
or any ERISA Affiliate thereof, or any trust established
thereunder, notice of (A) a "reportable event" described in
Section 4043 of ERISA and the regulations issued from time to
time thereunder (other than a "reportable event" not subject
to the provisions for 30-day notice to the PBGC under such
regulations), or (B) any other event which could subject any
Consolidated Company to any tax, penalty or liability under
Title I or Title IV of ERISA or Chapter 43 of the Tax Code,
or any tax or penalty resulting from a loss of deduction
under Sections 162, 404 or 419 of the Tax Code, where any
such taxes, penalties or liabilities exceed or could exceed
$500,000 in the aggregate;
(B) Promptly after such notice must be provided
to the PBGC, or to a Plan participant, beneficiary or
alternative payee, any notice required under
Section 101(d), 302(f)(4), 303, 307, 4041(b)(1)(A) or
4041(c)(1)(A) of ERISA or under Section 401(a)(29) or
412 of the Tax Code with respect to any Plan of any
Consolidated Company or any ERISA Affiliate thereof;
(C) Promptly after receipt, any notice received
by any Consolidated Company or any ERISA Affiliate
thereof concerning the intent of the PBGC or any other
governmental authority to terminate a Plan of such
Company or ERISA Affiliate thereof which is subject to
Title IV of ERISA, to impose any liability on such
Company or ERISA Affiliate under Title IV of ERISA or
Chapter 43 of the Tax Code;
(D) Upon the request of the Servicer, promptly
upon the filing thereof with the Internal Revenue
Service ("IRS") or the Department of Labor ("DOL"), a
copy of IRS Form 5500 or annual report for each Plan of
any Consolidated Company or ERISA Affiliate thereof
which is subject to Title IV of ERISA;
(E) Upon the request of the Servicer, (A) true
and complete copies of any and all documents,
government reports and IRS determination or opinion
letters or rulings for any Plan of any Consolidated
Company from the IRS, PBGC or DOL, (B) any reports
filed with the IRS, PBGC or DOL with respect to a Plan
of the Consolidated Companies or any ERISA Affiliate
thereof, or (C) a current statement of withdrawal
liability for each Multiemployer Plan of any
Consolidated Company or any ERISA Affiliate thereof;
(ix) Liens. Promptly upon any Consolidated Company
becoming aware thereof, notice of the filing of any federal
statutory Lien, tax or other state or local government Lien
or any other Lien affecting their respective properties,
other than Permitted Liens;
(x) Public Filings, Etc. Promptly upon the filing
thereof or otherwise becoming available, copies of all
financial statements, annual, quarterly and special reports,
proxy statements and notices sent or made available generally
by Sponsor to its public security holders, of all regular and
periodic reports and all registration statements and
prospectuses, if any, filed by any of them with any
securities exchange, and of all press releases and other
statements made available generally to the public containing
material developments in the business or financial condition
of Sponsor and the other Consolidated Companies;
(xi) Accountants' Reports. Promptly upon receipt
thereof, copies of all financial statements of, and all
reports submitted by, independent public accountants to
Sponsor in connection with each annual, interim, or special
audit of Sponsor's financial statements, including without
limitation, the comment letter submitted by such accountants
to management in connection with their annual audit;
(xii) Burdensome Restrictions, Etc. Promptly upon the
existence or occurrence thereof, notice of the existence or
occurrence of (i) any Contractual Obligation or Requirement
of Law described in Section 5.1(k), (ii) failure of any
Consolidated Company to hold in full force and effect those
material trademarks, service marks, patents, trade names,
copyrights, licenses and similar rights necessary in the
normal conduct of its business, and (iii) any strike, labor
dispute, slow down or work stoppage as described in Section
5.1(t);
(xiii) New Material Subsidiaries. Within 30 days
after the formation or acquisition of any Material
Subsidiary, or any other event resulting in the creation of a
new Material Subsidiary, notice of the formation or
acquisition of such Material Subsidiary or such occurrence,
including a description of the assets of such entity, the
activities in which it will be engaged, and such other
information as the Servicer and any of the Participants may
request;
(xiv) Intercompany Asset Transfers. Promptly upon the
occurrence thereof, notice of the transfer of any assets from
any Credit Party to any other Consolidated Company that is
not a Credit Party in any transaction or series of related
transactions where either the book value or the fair market
value of such assets is greater than $2,500,000 (excluding
sales or other transfers of assets in the ordinary course of
business); and
(xv) Other Information. With reasonable promptness,
such other information about the Consolidated Companies as
the Servicer or any Participant may reasonably request from
time to time.
(h) Financial Covenants.
(i) Fixed Charge Coverage. Maintain, during the
period set forth below, a Fixed Charge Coverage Ratio greater
than the ratio set forth opposite such period, measured as of
the last day of each fiscal quarter during such period for
the immediately preceding four quarters ending on such date:
Applicable Period Ratio
Closing Date
through Fiscal Year End 1997 1.75:1.00
First day of Fiscal Year
1998 and thereafter 2.00:1.00
(ii) Consolidated Funded Debt to Total Capitalization.
Maintain at all times, measured as of the last day of each
fiscal quarter of the Sponsor, a ratio of Consolidated Funded
Debt to Total Capitalization of less than 0.60:1.0.
(iii) Consolidated Net Worth. Maintain at all times
Consolidated Net Worth in an amount not less than the sum of
(i) $180,000,000, plus (ii) an amount equal to 100% of the
Net Proceeds of all issuances of stock, warrants,
Subordinated Debt, or other equity of the Sponsor issued
following the Effective Date.
(i) Notices Under Certain Other Indebtedness. Immediately
upon its receipt thereof, Sponsor shall furnish the Servicer with a
copy of any notice received by it or any other Consolidated Company
from the holder(s) of Indebtedness referred to in Section 6.2(a)
(ii), (iii), (vi), (vii) or (ix) (or from any trustee, agent,
attorney, or other party acting on behalf of such holder(s)) in an
amount which, in the aggregate, exceeds $2,500,000, where such
notice states or claims (x) the existence or occurrence of any
default or event of default with respect to such Indebtedness under
the terms of any indenture, loan or credit agreement, debenture,
note, or other document evidencing or governing such Indebtedness,
or (y) the existence or occurrence of any event or condition which
requires or permits holder(s) of any Indebtedness to exercise
rights under any Change in Control Provision.
(j) Additional Credit Parties and Collateral. Promptly
after (i) the formation or acquisition of any Material Subsidiary
not listed on Schedule 5.1(m), (ii) the transfer of assets to any
Consolidated Company if notice thereof is required to be given
pursuant to Section 6.1(g)(xii) and as a result thereof the
recipient of such assets becomes a Material Subsidiary, or (iii)
the occurrence of any other event creating a new Material
Subsidiary, Sponsor shall cause to be executed and delivered a
Guaranty Agreement from each such Material Subsidiary, together
with related corporate authorization documents, organizational
documents, secretary's certificates and opinions, all in form and
substance satisfactory to the Servicer and the Required
Participants.
6.2 Negative Covenants
The Sponsor covenants and agrees that so long as the Commitment
remains outstanding or any Loans remain outstanding or the Sponsor
has any obligations under the Operative Documents, it will not, and
will not allow its Subsidiaries, without the prior written consent
of the Required Participants to:
(a) Indebtedness. Create, incur, assume, guarantee, suffer
to exist or otherwise become liable on or with respect to, directly
or indirectly, any Indebtedness, other than:
(i) Indebtedness of the Sponsor under this Agreement
and of the Material Subsidiaries of Sponsor pursuant to the
Guaranty Agreement;
(ii) Indebtedness outstanding or incurred on the
Closing Date and described on Schedule 6.2(a);
(iii) purchase money Indebtedness to the extent secured
by a Lien permitted by Section 6.2(a)(ii) or Indebtedness of
a Person acquired by the Sponsor to the extent secured by a
Lien permitted by Section 6.2(a)(viii);
(iv) unsecured current liabilities (other than
liabilities for borrowed money or liabilities evidenced by
promissory notes, bonds or similar instruments) incurred in
the ordinary course of business and either (x) not more than
30 days past due, or (y) being disputed in good faith by
appropriate proceedings with reserves for such disputed
liability maintained in conformity with GAAP;
(v) Indebtedness of Sponsor or any of its
Subsidiaries under (x) Interest Rate Contracts, or (y) to the
extent constituting Indebtedness, the LIBOR Lease
Transaction;
(vi) Subordinated Debt of the Sponsor (but not
Subsidiaries of the Sponsor);
(vii) Guarantees of advances to officers and employees
in the ordinary course of business, or Guarantees otherwise
disclosed to and approved in writing by the Servicer and the
Required Participants;
(viii) Endorsements of instruments for deposit or
collection in the ordinary course of business; and
(ix) Other unsecured Indebtedness of the Sponsor (but
not Subsidiaries of the Sponsor) (other than Guarantees)
which does not result in a Unmatured Credit Event or an
Credit Event pursuant hereto.
(b) Liens. Create, incur, assume or suffer to exist any
Lien on any of its property now owned or hereafter acquired to
secure any Indebtedness other than:
(i) Liens existing on the Closing Date and disclosed
on Schedule 6.2(b);
(ii) any Lien on any property and proceeds thereof
securing Indebtedness incurred or assumed for the purpose of
financing all or any part of the acquisition cost of such
property and any refinancing thereof, provided that such Lien
does not extend to any other property (other than the
proceeds of such property) including any Lien arising
pursuant to the LIBOR Lease Transaction;
(iii) Liens for taxes not yet due, and Liens for taxes
or Liens imposed by ERISA which are being contested in good
faith by appropriate proceedings and with respect to which
adequate reserves are being maintained in accordance with
GAAP;
(iv) statutory Liens of landlords and Liens of
carriers, warehousemen, mechanics, materialmen and other
Liens imposed by law and created in the ordinary course of
business for amounts not yet due or which are being contested
in good faith by appropriate proceedings and with respect to
which adequate reserves are being maintained in accordance
with GAAP;
(v) Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation,
unemployment insurance and other types of social security, or
to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids, leases, government contracts,
performance and return-of-money bonds and other similar
obligations (exclusive of obligations for the payment of
borrowed money);
(vi) zoning, easements and restrictions on the use of
real property which do not materially impair the use of such
property;
(vii) rights in property reserved or vested in any
governmental authority which do not materially impair the use
of such property; and
(viii) any Lien existing on property of a Person
immediately prior to its being consolidated with or merged
into the Sponsor or into any Consolidated Company, or any
Lien existing on any property acquired by any Consolidated
Company at the time such property is so acquired (whether or
not the Indebtedness secured thereby shall have been
assumed), provided that (x) no such Lien shall have been
created or assumed in contemplation of consolidation or
merger or such Person's becoming a Consolidated Company or
such acquisition of property and (y) each such Lien shall at
all times be confined solely to the item or items of property
so acquired and, if required by the terms of the instruments
originally creating such Lien, other property which is an
improvement to or is acquired for specific use in connection
with such acquired property;
provided that, the aggregate amount of Indebtedness secured by
Liens permitted pursuant to this Section 6.2(b), excluding
Indebtedness, if any arising pursuant to LIBOR Lease Transaction,
shall at no time exceed 15% of the Consolidated Net Worth of the
Sponsor calculated as of the last day of the most recently ended
fiscal quarter of the Sponsor.
(c) Mergers, Sales, Etc. (A) Merge or consolidate with any
other Person, except that this Section 6.2(c) shall not apply to
(i) any merger or consolidation of Sponsor with any other Person
provided that the Sponsor is the surviving corporation after such
merger or consolidation, (ii) any merger or consolidation of any of
the Sponsor's Subsidiaries with any other Person provided that any
such Subsidiary shall be the surviving corporation after such
merger or consolidation or (iii) any merger between Subsidiaries of
Sponsor, and (B) sell, lease, transfer or otherwise dispose of its
accounts, property or other assets (including capital stock of any
Subsidiary of Sponsor), except that this Section 6.2(c) shall not
apply to (i) any sale, lease, transfer or other disposition of
assets of any Subsidiary of the Sponsor to the Sponsor or any of
its Material Subsidiaries, (ii) sales of inventory in the ordinary
course of business of the Sponsor and its Subsidiaries,
(iii) disposition of equipment or inventory determined in good
faith to be obsolete or unusable by the Sponsor or its
Subsidiaries, or (iv) any other sale of the Sponsor's assets during
the term of this Agreement (excluding the sale of any assets
pertaining to Mozzarella's or Tia's units or any Ruby Tuesday units
pursuant to the Company's Franchise Partner Program) with an
aggregate book value, when aggregated with all other such sales
since May 30, 1997, not exceeding 7.5% of the aggregate book value
of all of the Sponsor's assets on the date of such transfer;
provided, however, that no transaction pursuant to clause (A),
clause (B)(i) or clause (B)(iv) above shall be permitted if any
Unmatured Credit Event or Credit Event exists at the time of such
transaction or would exist as a result of such transaction.
(d) Investments, Loans, Etc. Make, permit or hold any
Investments in any Person, or otherwise acquire or hold any
Subsidiaries, other than:
(i) Investments in Subsidiaries of Sponsor existing
as of March 6, 1996 and Investments in Franchisees arising
out of the guarantee of Loans hereunder;
(ii) Investments in the stock or other assets of any
other Person that is engaged in a business permitted by
Section 6.2(h) hereof that, as a result of such Investment,
becomes a Subsidiary of Sponsor (other than Hostile
Acquisitions); provided, however, that the aggregate amount
of Investments made pursuant to this subsection (ii) shall
not exceed, during the term of this Agreement, a total value
of ten percent (10%) of the Consolidated Net Worth of the
Sponsor as calculated on the last day of the most recently
ended fiscal quarter of the Sponsor;
(iii) marketable direct obligations of the United
States or any agency thereof, or obligations guaranteed by
the United States or any agency thereof, in each case
supported by the full faith and credit of the United States
and maturing within one year from the date of creation
thereof;
(iv) Investments received in settlement of
Indebtedness created in the ordinary course of business;
(v) marketable direct obligations issued by any state
of the United States of America or any political subdivision
of any such state or any public instrumentality thereof, the
interest from which is exempt from Federal income taxes,
maturing within one year from the date of acquisition thereof
and either having as at any date of determination the one of
the two highest ratings obtainable from either Standard &
Poor's or Moody's;
(vi) unsecured commercial paper, the interest from
which is exempt from Federal income taxes, maturing no more
than 270 days from the date of creation and having as at any
date of determination either the highest rating obtainable
from either Standard & Poor's or Moody's;
(vii) commercial paper issued by corporations, each of
which has a consolidated net worth of not less than
$500,000,000, and conducts a substantial portion of its
business in the United States of America, maturing no more
than 365 days from the date of acquisition thereof and having
as at any date of determination the highest rating obtainable
from either Standard & Poor's or Moody's; and
(viii) money market or similar depository
accounts, certificates of deposit or bankers acceptances, in
each case redeemable upon demand or maturing within one year
from the date of acquisition thereof, issued by commercial
banks incorporated under the laws of the United States of
America or any state thereof or the District of Columbia,
provided (x) each such bank has at any date of determination
combined capital and surplus of not less than $1,000,000,000
and a rating of its long-term debt of at least A by
Standard & Poor's or at least A by Moody's or a long-term
deposit rating of at least A issued by Standard & Poor's or
at least A issued by Moody's, (y) the aggregate amount of all
such certificates of deposit issued by such bank are fully
insured at all times by the Federal Deposit Insurance
Company; provided however, notwithstanding the foregoing, the Sponsor and
any Subsidiary may continue to own any Investment which (A)
complied with the provisions of clauses (f), (g) or (h) at the time
such Investment was made and (B) at any date of determination does
not so comply solely because (x) such Investment no longer has the
rating required from Standard & Poor's or Moody's or (y) the bank
having the money market or depository account or issuing the
certificate of deposit or bankers acceptance ceases to have the
required level of capital and surplus or to have a rating of its
long-term debt of at least A by Standard & Poor's or at least A by
Moody's or to have a long-term deposit rating of at least A by
Standard & Poor's or at least A by Moody's, if, and for so long as,
in the good faith judgment of the relevant Executive Officer, no
loss of the principal amount of such Investment would occur as the
result of the Sponsor or such Subsidiary continuing to own such
Investment to maturity. Nothing contained in the foregoing proviso
shall be deemed to be applicable to any new or renewed Investment
at the time such Investment is made or renewed.
(e) Letters of Credit. Create, incur, issue, assume,
guarantee, suffer to exist or otherwise become liable on or with
respect to, directly or indirectly, letters of credit where the
maximum amount available to be drawn under all such letters of
credit would exceed, at any one time outstanding, $50,000,000 in
the aggregate.
(f) Sale and Leaseback Transactions. Sell or transfer any
property, real or personal, whether now owned or hereafter
acquired, and thereafter rent or lease such property or other
property which any Consolidated Company intends to use for
substantially the same purpose or purposes as the property being
sold or transferred; provided that, the Consolidated Companies
shall be permitted to sell or transfer property and rent or lease
such property or other property back so long as the aggregate
market value of such property sold or transferred during the term
of this Agreement does not exceed $5,000,000.
(g) Transactions with Affiliates.
(i) Enter into any transaction or series of related
transactions which in the aggregate would be material,
whether or not in the ordinary course of business, with any
Affiliate of any Consolidated Company (but excluding any
Affiliate which is also a wholly-owned Subsidiary of Sponsor
and any compensation arrangement with an officer or director
of the Sponsor or any other Consolidated Company entered into
in the ordinary course of business), other than on terms and
conditions substantially as favorable to such Consolidated
Company as would be obtained by such Consolidated Company at
the time in a comparable arm's-length transaction with a
Person other than an Affiliate.
(ii) Convey or transfer to any other Person
(including any other Consolidated Company) any real property,
buildings, or fixtures used in the manufacturing or
production operations of any Consolidated Company, or convey
or transfer to any other Consolidated Company any other
assets (excluding conveyances or transfers in the ordinary
course of business) if at the time of such conveyance or
transfer any Credit Event or Unmatured Credit Event exists or
would exist as a result of such conveyance or transfer.
(h) Changes in Business. Enter into or engage in any
business which is substantially different from the business engaged
in by the Sponsor and its Subsidiaries on the Closing Date.
(i) ERISA. Take or fail to take any action with respect to
any Plan of any Consolidated Company or, with respect to its ERISA
Affiliates, any Plans which are subject to Title IV of ERISA or to
continuation health care requirements for group health plans under
the Tax Code, including without limitation (i) establishing any
such Plan, (ii) amending any such Plan (except where required to
comply with applicable law), (iii) terminating or withdrawing from
any such Plan, or (iv) incurring an amount of unfunded benefit
liabilities, as defined in Section 4001(a)(18) of ERISA, or any
withdrawal liability under Title IV of ERISA with respect to any
such Plan, which together with any other action or omission
referred to in this Section 6.2(i) (taken as a whole) would have a
Materially Adverse Effect, without first obtaining the written
approval of the Required Participants.
(j) Limitation on Payment Restrictions Affecting
Consolidated Companies. Create or otherwise cause or suffer to
exist or become effective, any consensual encumbrance or
restriction on the ability of any Consolidated Company to (i) pay
dividends or make any other distributions on any stock of a
Subsidiary of the Sponsor, or (ii) pay any intercompany debt owed
to Sponsor or any other Consolidated Company, or (iii) transfer any
of its property or assets to Sponsor or any other Consolidated
Company, except any consensual encumbrance or restriction existing
as of the Closing Date.
(k) Actions Under Certain Documents. Without the prior
written consent of the Required Participants (i) modify, amend,
cancel or rescind any agreements or documents evidencing or
governing Subordinated Debt or intercompany debt, (ii) make any
payment with respect to Subordinated Debt, except that current
interest accrued on such Subordinated Debt as of the date of this
Agreement and all interest subsequently accruing thereon (whether
or not paid currently) may be paid unless a Credit Event or
Unmatured Credit Event has occurred and is continuing, (iii)
voluntarily prepay any portion of intercompany debt, (iv) amend or
revise the Sharing Agreements so as to materially increase the
liabilities or obligations of the Consolidated Companies
thereunder, or (v) modify, amend, cancel or rescind (A) any rights
of the Sponsor to exercise any call rights with respect to
ownership interests in any Borrower or (B) any rights of the
Sponsor to remove the manager that is, or constitutes part of, the
Franchisee Partner, in either case arising upon the failure of the
Franchisee Partner to comply with its obligations under any
Franchisee Documents (including, without limitation, "for cause" as
defined in the Franchisee Documents), but excluding (A) any right
of first refusal that the Sponsor has upon the transfer of assets
or ownership interests by a Borrower that arises other than upon
the failure of the Franchisee Partner to comply with its
obligations under the Franchisee Documents or (B) any option that
the Sponsor has to purchase any ownership interests upon
termination or expiration of the Franchise Documents.
(l) Changes in Fiscal Year. Change the calculation of the
Fiscal Year of the Sponsor.
(m) Issuance of Stock by Subsidiaries. Permit any
Subsidiary (either directly or indirectly by the issuance of rights
or options for, or securities convertible into such shares) to
issue, sell or dispose of any shares of its stock of any class
(other than directors' qualifying shares, if any) except to the
Sponsor or another Subsidiary.
VII. CREDIT EVENT
7.1 Credit Events.
In the event that:
(a) Payments. Sponsor shall fail to pay any amount due and
payable hereunder on the due date thereof and, if such amount is
with respect to interest or fees, such nonpayment continues for
three (3) days thereafter;
(b) Covenants Without Notice. Sponsor shall fail to
observe or perform any covenant or agreement contained in Sections
6.1(a), 6.1(e), 6.1(g), 6.1(h), 6.1(i) or Section 6.2;
(c) Other Covenants. Sponsor shall fail to observe or
perform any covenant or agreement contained in this Agreement,
other than those referred to in subsection (a) and (b) above, if
capable of being remedied, such failure shall remain unremedied for
30 days after the earlier of (i) Sponsor's obtaining knowledge
thereof, or (ii) written notice thereof shall have been given to
Sponsor by Servicer or any Participant;
(d) Representations. Any representation or warranty made
or deemed to be made by Sponsor or any other Credit Party or by any
of its officers under this Agreement or any other Operative
Document (including the Schedules attached thereto), or any
certificate or other document submitted to the Servicer or the
Participants by any such Person pursuant to the terms of this
Agreement or any other Operative Document, shall be incorrect in
any material respect when made or deemed to be made or submitted.
(e) Non-Payments of Other Indebtedness. Any Consolidated
Company shall fail to make when due (whether at stated maturity, by
acceleration, on demand or otherwise, and after giving effect to
any applicable grace period) any payment of principal of or
interest on any Indebtedness (other than Indebtedness hereunder)
exceeding $2,500,000 individually or in the aggregate.
(f) Defaults Under Other Agreements; Change In Control
Provisions. (a) Any Consolidated Company shall fail to observe or
perform any covenants or agreements (whether or not waived)
contained in any agreements or instruments relating to any of its
Indebtedness exceeding $2,500,000 individually or in the aggregate,
or any other event shall occur if the effect of such failure or
other event is to accelerate, or with notice or passage of time or
both, to permit the holder of such Indebtedness or any other Person
to accelerate, the maturity of such Indebtedness; or any such
Indebtedness shall be required to be prepaid (other than by a
regularly scheduled required prepayment) in whole or in part prior
to its stated maturity; or (b) any event or condition shall occur
or exist which, pursuant to the terms of any Change in Control
Provision, requires or permits the holder(s) of the Indebtedness
subject to such Change in Control Provision to require that such
Indebtedness be redeemed, repurchased, defeased, prepaid or repaid,
in whole or in part, or the maturity of such Indebtedness to be
accelerated;
(g) Bankruptcy. The Sponsor or any Material Subsidiary
shall commence a voluntary case concerning itself under the
Bankruptcy Code or applicable foreign bankruptcy laws; or an
involuntary case for bankruptcy is commenced against Sponsor or any
Material Subsidiary and the petition is not controverted within 10
days, or is not dismissed within 60 days, after commencement of the
case; or a custodian (as defined in the Bankruptcy Code) or similar
official under applicable foreign bankruptcy laws is appointed for,
or takes charge of, all or any substantial part of the property of
the Sponsor or any Material Subsidiary; or the Sponsor or any
Material Subsidiary commences proceedings of its own bankruptcy or
to be granted a suspension of payments or any other proceeding
under any reorganization, arrangement, adjustment of debt, relief
of debtors, dissolution, insolvency or liquidation or similar law
of any jurisdiction, whether now or hereafter in effect, relating
to the Sponsor or any Material Subsidiary or there is commenced
against the Sponsor or any Material Subsidiary any such proceeding
which remains undismissed for a period of 60 days; or the Sponsor
or any Material Subsidiary is adjudicated insolvent or bankrupt; or
any order of relief or other order approving any such case or
proceeding is entered; or the Sponsor or any Material Subsidiary
suffers any appointment of any custodian or the like for it or any
substantial part of its property to continue undischarged or
unstayed for a period of 60 days; or the Sponsor or any Material
Subsidiary makes a general assignment for the benefit of creditors;
or the Sponsor or any Material Subsidiary shall fail to pay, or
shall state that it is unable to pay, or shall be unable to pay,
its debts generally as they become due; or the Sponsor or any
Material Subsidiary shall call a meeting of its creditors with a
view to arranging a composition or adjustment of its debts; or the
Sponsor or any Material Subsidiary shall by any act or failure to
act indicate its consent to, approval of or acquiescence in any of
the foregoing; or any corporate action is taken by the Sponsor or
any Material Subsidiary for the purpose of effecting any of the
foregoing;
(h) ERISA. A Plan of either a Consolidated Company or of
any of its ERISA Affiliates which is subject to Title IV of ERISA:
(i) shall fail to be funded in accordance with the
minimum funding standard required by applicable law, the
terms of such Plan, Section 412 of the Tax Code or Section
302 of ERISA for any plan year or a waiver of such standard
is sought or granted with respect to such Plan under
applicable law, the terms of such Plan or Section 412 of the
Tax Code or Section 303 of ERISA; or
(ii) is being, or has been, terminated or the subject
of termination proceedings under applicable law or the terms
of such Plan; or
(iii) shall require a Consolidated Company to provide
security under applicable law, the terms of such Plan,
Section 401 or 412 of the Tax Code or Section 306 or 307 of
ERISA; or
(iv) results in a liability to a Consolidated Company
under applicable law, the terms of such Plan, or Title IV of
ERISA; and there shall result from any such failure, waiver, termination
or other event described in clauses (i) through (iv) above a
liability to the PBGC or a Plan that would have a Materially
Adverse Effect;
(i) Judgments. Judgments or orders for the payment of
money in excess of $2,500,000 individually or in the aggregate or
otherwise having a Materially Adverse Effect shall be rendered
against Sponsor or any other Consolidated Company and such judgment
or order shall continue unsatisfied (in the case of a money
judgment) and in effect for a period of 30 days during which
execution shall not be effectively stayed or deferred (whether by
action of a court, by agreement or otherwise);
(j) Ownership of Credit Parties. If Sponsor shall at any
time fail to own and control the shares of Voting Stock of any
Guarantor which it owned or controlled at the time such Guarantor
became a Credit Party hereunder other than due to sale of the
Voting Stock of such Guarantor permitted pursuant to Section 6.2(c)
hereof;
(k) Change in Control of Sponsor. Any person or group
(within the meaning of Rule 13d-5 of the Securities and Exchange
Commission as in effect on the Effective Date) shall become the
owner, beneficially or of record, of shares representing more than
thirty percent (30%) of the aggregate ordinary voting power
represented by the issued and outstanding capital stock of the
Sponsor.
(l) Default Under Other Operative Documents; Sharing
Agreements. (x) There shall exist or occur any default as provided
under the terms of any other Operative Document, or any Operative
Document ceases to be in full force and effect or the validity or
enforceability thereof is disaffirmed by or on behalf of Sponsor or
any other Credit Party, or at any time it is or becomes unlawful
for Sponsor or any other Credit Party to perform or comply with its
obligations under any Operative Document, or the obligations of
Sponsor or any other Credit Party under any Operative Document are
not or cease to be legal, valid and binding on Sponsor or any such
Credit Party or (y) any party to the Sharing Agreements shall
default with respect to its covenants or obligations thereunder
where such default results in a Materially Adverse Effect with
respect to the Credit Parties;
then upon the occurrence and continuation of any such event (each, a
"Credit Event"):
the Servicer may, and upon the written request of the Required
Participants, shall, take any or all of the following actions, without
prejudice to the rights of the Servicer or any Participant to enforce its
claims against Sponsor, any other Credit Party, any Borrower or other
obligor with respect to any Loan: (i) declare the Commitment terminated,
whereupon the Commitment shall terminate immediately and any commitment
fee shall forthwith become due and payable without any other notice of
any kind; (ii) demand that the Sponsor purchase specified or all
outstanding Loans and Loan Commitments by paying to the Servicer the Loan
Indebtedness of each such Loan and assuming the Servicer's obligations
thereunder; whereupon such amount shall become, forthwith due and payable
without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Sponsor; provided, that, if a Credit Event
specified in Section 7.1(g) shall occur, the result which would occur
upon the giving of notice by the Servicer to any Credit Party, shall
occur automatically without the giving of any such notice, and (iii) may
exercise any other rights or remedies available under the Operative
Documents, at law or in equity. In addition, the Servicer may, and upon
the written request of the Required Participants, shall (x) cease funding
further Advances pursuant to the Loan Commitments and (y) declare all
Loan Indebtedness thereunder to be immediately due and payable in
accordance with the terms of the Loan Documents and exercise all rights
and remedies provided under the Loan Documents; provided that, the
Servicer shall not take the actions authorized under clause (y) unless
the Sponsor has failed to honor its obligation to pay the entire Loan
Indebtedness demanded by the Servicer (or deemed demanded) within ten
(10) Business Days. The Sponsor hereby acknowledges and agrees that its
obligation hereunder to purchase all outstanding Loans and Loan
Commitments shall include the obligation to immediately post cash-
collateral for all outstanding Letter of Credit Obligations in an amount
equal to 105% of the amount thereof.
VIII. GUARANTY
In addition to its obligations upon the occurrence of a Credit Event and
its other obligations pursuant to the Operative Documents, the Sponsor
hereby agrees as follows:
8.1 Unconditional Guaranty.
The Sponsor hereby unconditionally and irrevocably guarantees to
the Servicer, each Participant and any permitted assignee thereof,
the full and prompt payment of all Guaranteed Obligations and all
costs, charges and expenses (including reasonable attorneys' fees)
actually incurred or sustained by the Servicer or any Participant
in enforcing the obligations of the Sponsor hereunder or the
obligations of the Borrowers under the applicable Loan Documents.
If any portion of the Guaranteed Obligations is not paid when due,
Sponsor hereby agrees to and will immediately pay same, without
resort by Servicer or any Participant to any other person or party.
The obligation of Sponsor to Servicer and each Participant
hereunder is primary, absolute and unconditional, except as may be
specifically set forth herein. This is a guaranty of payment and
not of collection. This guaranty is subject to the limitations set
forth in Sections 8.2 and 8.3 below.
8.2 Limitation on Guaranty of Loans.
The obligation of the Sponsor pursuant to this Article VIII with
respect to the Limited Guaranty Pool shall be limited, as of any
date that Guaranty Payments are made by the Sponsor[, or demanded
by the Servicer,] with respect to any Loans in the Limited Guaranty
Pool, to an amount (the "Maximum Amount") equal to the greater of
(a) fifty percent (50%) of the aggregate outstanding principal
amount of the Loans on such date (after giving effect to any
payments, recoveries on Collateral or other recoveries made by the
Servicer or any Participant on such date with respect to the
Loans), (b) three (3) times the largest aggregate outstanding Loan,
and (c) $10,000,000; provided that, the maximum cumulative amount
of Guaranty Payments that the Sponsor shall be required to make
with respect to Loans in the Limited Guaranty Pool shall be
$26,250,000.
The foregoing limitation shall not in any way limit the
obligation of the Sponsor with respect to the Guaranteed
Obligations relating to the Fully Guaranteed Pool or any
obligation of the Sponsor to purchase the Loans and assume
the Loan Commitments relating thereto upon the occurrence of
a Credit Event without regard to any limitations set forth in
this Article VIII.
8.3 Obligations of Sponsor With Respect to Loans.
(a) If a Loan Payment Default occurs and is not cured by
Sponsor during the Response Period, or if a Loan Default other than
a Loan Payment Default occurs and is not waived by Sponsor during
the Response Period, then the Standstill Period shall commence and
the Sponsor shall immediately pay all past due interest and fees
owing to the Servicer pursuant to the applicable Loan Documents, if
any, on such Defaulted Loans and shall continue to make timely
payment of interest and fees, if any, on such Defaulted Loans
during the Standstill Period, which payment of interest and fees
shall not constitute Guaranty Payments made against Loans in the
Limited Guaranty Pool.
(b) On the date that the Standstill Period expires, the
Sponsor agrees to cause one of the following to have occurred: (i)
all Loan Indebtedness with respect to such Defaulted Loans shall
have been repaid in full, (ii) the Sponsor has acquired one hundred
percent (100%) of the Borrower owing such Defaulted Loans; or (iii)
the Sponsor and a new Franchise Partner have acquired one hundred
percent (100%) of the Borrower owing such Defaulted Loans and such
new Franchise Partner (x) has agreed to permit the entire Loan
Indebtedness with respect to the Defaulted Loans to remain
outstanding or (y) has agreed to permit a portion of the Loan
Indebtedness with respect to the Defaulted Loans to remain
outstanding and the Sponsor has repaid the remaining portion of the
Loan Indebtedness, which repayment shall constitute Guaranty
Payments made against Loans in the Limited Guaranty Pool. If
either of the conditions set forth in clauses (ii) or (iii) above
occur, then all Loan Payment Defaults must be immediately cured and
all Loan Defaults shall be deemed waived by the Servicer. If none
of the events set forth in clauses (i) through (iii) above have
occurred by the end of the Standstill Period, the Sponsor shall be
deemed to have failed to perform its agreement hereunder for
purposes of Section 7.1(c) above.
(c) Notwithstanding anything set forth in subsection (b)(i)
above, the Sponsor shall not be required to repay any Loan
Indebtedness with respect to any such Defaulted Loans beyond the
amounts set forth in Section 8.2; provided, however, that (i) the
Sponsor shall remain obligated to cause one of the events set forth
in clause (b)(ii) and (b)(iii) above to have occurred by the date
that the Standstill Period expires and (ii) to the extent that the
Sponsor is not obligated to repay all Loan Indebtedness with
respect to such Defaulted Loan pursuant to Section 8.2, the Sponsor
agrees that (A) the Servicer shall be released from its obligations
to the Sponsor hereunder with respect to administering and
enforcing such Defaulted Loans and may administer and enforce such
Loans and Letter of Credit Obligations as it deems appropriate,
without regard to any limitations or restrictions set forth herein
(but subject to Article III hereof in all events) or in any other
Operative Document and (B) it shall not amend, modify, rescind or
terminate any Franchise Documents with any Borrower that owes any
Defaulted Loan or related Letter of Credit Obligations to the
Servicer, without the consent of the Servicer, and any Franchise
Documents with any such Borrower that have previously been
rescinded or terminated shall immediately and automatically be
reinstated, and all such Franchise Documents shall remain in full
force and effect at all times until (x) the Servicer has been paid
in full with respect to such Loan Indebtedness and all commitments
of the Servicer to make additional advances to such Borrower have
been terminated or (y) the Servicer has otherwise, in its opinion,
exhausted all rights and remedies against the Borrower and has
terminated all commitments to such Borrower; provided, further,
however, that the Sponsor may continue to enforce the proper use of
the "Ruby Tuesday" servicemark (or other trademark or servicemark
used in the operation of the store) and the maintenance of required
systems and standards, in each case as required by the Franchisee
Documents, so long as the remedy the Sponsor uses to enforce such
compliance is not termination of the "Ruby Tuesday" franchise held
by such Borrower.
(d) On the date that Sponsor is required to purchase any
Loan with respect to which a Deemed Loan Default has occurred
pursuant to Section 4.5 above, one of the following must have
occurred: (i) the Sponsor shall have purchased such Loan and
assumed the related Loan Commitment from the Servicer by paying the
Servicer an amount equal to the Loan Indebtedness with respect to
such Loan, (ii) the Sponsor have acquired one hundred percent
(100%) of the Borrower that owes such Loan or (iii) the Sponsor and
a new Franchise Partner have acquired one hundred percent (100%) of
the Borrower that owes such Loan. Notwithstanding anything set
forth in clause (i) of the foregoing sentence, the Sponsor shall
not be required to repurchase such Loan to the extent the Sponsor
would be required to repay any Loan Indebtedness with respect to
any such Loan beyond the amounts set forth in Section 8.2;
provided, however, that to the extent that the Sponsor is not
obligated to repay all Loan Indebtedness with respect to such Loan
pursuant to Section 8.2, the Sponsor agrees that it will not amend,
modify, rescind or terminate any Franchise Documents with any
Borrower that owes such Loan or related Letter of Credit
Obligations to the Servicer, without the consent of the Servicer,
and (y) all such Franchise Documents shall remain in full force and
effect at all times until the Servicer has been paid in full with
respect to such Loan Indebtedness and all commitments of the
Servicer to make additional advances to such Borrower have been
terminated; provided, further, however, that the Sponsor may
continue to enforce the proper use of the "Ruby Tuesday"
servicemark (or other trademark or servicemark used in the
operation of the store) and the maintenance of required systems and
standards, in each case as required by the Franchisee Documents, so
long as the remedy the Sponsor uses to enforce such compliance is
not termination of the "Ruby Tuesday" franchise held by such
Borrower.
[(e) To the extent that the Sponsor makes any payments on
Loans owed by Borrowers that are wholly owned by the Sponsor, such
payments shall not constitute Guaranty Payments made against Loans
in the Limited Guaranty Pool.]
8.4 Continuing Guaranty.
The obligations of the Sponsor pursuant to this Article VIII
constitute a guarantee which is continuing in nature and
shall be effective with respect to the full amount
outstanding under all Guaranteed Obligations, now existing or
hereafter made or extended, regardless of the amount, subject
only to the limitations set forth in the preceding Section
8.2 and Section 8.3.
8.5 Waivers.
The Sponsor hereby waives notice of Servicer's and each
Participant's acceptance of this Agreement and the creation,
extension or renewal of any Loans or other Guaranteed Obligations.
Sponsor hereby consents and agrees that, at any time or times,
without notice to or further approval from Sponsor, and without in
any way affecting the obligations of Sponsor hereunder, Servicer
and the Participants may, with or without consideration (i)
release, compromise with, or agree not to xxx, in whole or in part,
any Borrower or any other obligor, guarantor, endorser or surety on
any Loans or any other Guaranteed Obligations, (ii) renew, extend,
accelerate, or increase or decrease the principal amount of any
Loans or other Guaranteed Obligations, either in whole or in part,
(iii) amend, waive, or otherwise modify any of the terms of any
Loans or other Guaranteed Obligations or of any mortgage, deed of
trust, security agreement, or other undertaking of any of the
Borrowers or any other obligor, endorser, guarantor or surety in
connection with any Loans or other Guaranteed Obligations, and (iv)
apply any payment received from Borrowers or from any other
obligor, guarantor, endorser or surety on the Loans or other
Guaranteed Obligations to any of the liabilities of Borrowers or of
such other obligor, guarantor, endorser, or surety which Servicer
may choose; provided, however, that during the Response Period and
the Standstill Period, the Servicer and Participants shall not
intentionally take any of the actions set forth in clause (i)
through (iv) above.
8.6 Additional Actions.
Sponsor hereby consents and agrees that the Servicer may at any
time or times, either with or without consideration, surrender,
release or receive any property or other Collateral of any kind or
nature whatsoever held by it or for its account securing any Loans
or other Guaranteed Obligations, or substitute any Collateral so
held by Servicer for other Collateral of like or different kind,
without notice to or further consent from Sponsor, and such
surrender, receipt, release or substitution shall not in any way
affect the obligations of Sponsor hereunder; provided, however,
that during the Response Period and the Standstill Period, the
Servicer and Participants shall not intentionally take any of the
actions described above. Servicer shall have full authority to
adjust, compromise, and receive less than the amount due upon any
such Collateral, and may enter into any accord and satisfaction
agreement with respect to the same as Servicer may deem advisable
without affecting the obligations of Sponsor hereunder. Servicer
shall be under no duty to undertake to collect upon such Collateral
or any part thereof, and Sponsor's obligations hereunder shall not
be affected by Servicer's alleged negligence or mistake in judgment
in handling, disposing of, obtaining, or failing to collect upon or
perfect a security interest in, any such Collateral.
8.7 Additional Waivers.
Sponsor hereby waives presentment, demand, protest, and notice of
dishonor of any of the liabilities guaranteed hereby. Neither
Servicer nor any Participant shall have any duty or obligation (i)
to proceed or exhaust any remedy against any Borrower, any other
obligor, guarantor, endorser, or surety on any Loans or other
Guaranteed Obligations, or any other security held by Servicer or
any Participant for any Loans or other Guaranteed Obligations, or
(ii) to give any notice whatsoever (except as expressly provided
herein of in the Loan Documents) to Borrowers, Sponsor, or any
other obligor, guarantor, endorser, or surety on any Loans or other
Guaranteed Obligations, before bringing suit, exercising rights to
any such security or instituting proceedings of any kind against
Sponsor, any Borrower, or any of them, and Sponsor hereby waives
any requirement for such actions by Servicer or any Participant.
Upon default by any Borrower and Servicer's demand to Sponsor
hereunder, Sponsor shall be held and bound to Servicer and each
Participant directly as principal debtor in respect of the payment
of the amounts hereby guaranteed, such liability of Sponsor being
joint and several with each Borrower and all other obligors,
guarantors, endorsers and sureties on the Loans or other Guaranteed
Obligations.
8.8 Postponement of Obligations.
Until the Loan and other Guaranteed Obligations of any Borrower to
the Servicer and the Participants have been paid in full (i) all
present and future indebtedness of such Borrower to Sponsor is
hereby postponed to the present and future indebtedness of such
Borrower to Servicer and each Participant, and all monies received
from such Borrower or for its account by Sponsor with respect to
such indebtedness shall be received in trust for Servicer and the
Participants, and promptly upon receipt, shall be paid over to
Servicer for distribution to the Participants in accordance
herewith until such Borrower's indebtedness to Servicer and the
Participants is fully paid and satisfied, all without prejudice to
and without in any way affecting the obligations of Sponsor
hereunder; provided that unless and until the occurrence of a Loan
Default or Loan Payment Default, the Sponsor may accept and retain
any payments made by any Borrower to the Sponsor in the ordinary
course of business, and (ii) Sponsor shall not have any rights of
subrogation or otherwise to participate in any security held by the
Servicer for any Loan to such Borrower or any other Guaranteed
Obligations arising therefrom, and Sponsor hereby waives such
rights until such time as such Loan and other Guaranteed
Obligations have been paid in full to the Servicer and each
Participant (whether by repurchase by the Sponsor, pursuant to this
Article VIII or otherwise).
8.9 Effect on additional Guaranties.
The obligations of the Sponsor pursuant to this Article VIII are in
addition to, and are not intended to supersede or be a substitute
for any other guarantee, suretyship agreement, or instrument which
Servicer may hold in connection with any Loans or other Guaranteed
Obligations.
8.10 Reliance on Guaranty and Purchase Obligation; Disclaimer of
Liability.
Sponsor expressly acknowledges and agrees that each of the Servicer
and the Participants, in making its credit decision with regard to
the funding of the Loans, will rely solely upon the guaranty and
purchase obligation of Sponsor set forth above and in Article VII
and that neither the Servicer nor any Participant is under any
obligation or duty to perform any credit analysis or investigation
with regard to the creditworthiness of any Borrower. In addition,
the Servicer expressly disclaims any responsibility or liability
for the authenticity of signatures on any of the Loan Documents
(other than the Servicer's), the authority of the Persons executing
the Loan Documents (other than the Servicer) or the enforceability
or compliance with laws of any of the Loan Documents.
SPONSOR EXPRESSLY ACKNOWLEDGES AND AGREES THAT SPONSOR'S
OBLIGATIONS TO PURCHASE LOANS UNDER THIS AGREEMENT ARE ABSOLUTE AND
UNCONDITIONAL. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,
SPONSOR'S OBLIGATION SHALL NOT BE AFFECTED BY THE EXISTENCE OF ANY
DEFAULT BY ANY BORROWER UNDER THE APPLICABLE LOAN DOCUMENTS, ANY
EXCHANGE, RELEASE OR NONPERFECTION OF ANY LIEN WITH RESPECT TO ANY
COLLATERAL SECURING PAYMENT OF ANY LOAN, THE SUBSTITUTION OR
RELEASE OF ANY ENTITY PRIMARILY OR SECONDARILY LIABLE FOR ANY LOAN,
ANY LACK OF ENFORCEABILITY OF ANY LOAN DOCUMENT, ANY LAW,
REGULATION, OR ORDER OF ANY JURISDICTION AFFECTING ANY LOAN OR LOAN
DOCUMENT OR THE RIGHTS OF THE HOLDER THEREOF, ANY CHANGE IN THE
CONDITION OR PROSPECTS OF THE BORROWER, INCLUDING WITHOUT
LIMITATION, INSOLVENCY, BANKRUPTCY, REORGANIZATION OR SIMILAR
PROCEEDING, OR ANY OTHER CIRCUMSTANCE WHICH MIGHT, BUT FOR THE
PROVISIONS OF THIS PARAGRAPH, CONSTITUTE A LEGAL OR EQUITABLE
DISCHARGE OF SPONSOR'S OBLIGATIONS HEREUNDER. SPONSOR'S OBLIGATIONS
HEREUNDER SHALL NOT BE AFFECTED BY ANY SET-OFF OR CLAIM WHICH IT
MIGHT HAVE AGAINST THE SERVICER OR ANY PARTICIPANT, WHETHER ARISING
OUT OF THIS AGREEMENT OR OTHERWISE.
8.11 Reinstatement of Obligations.
The obligations of the Sponsor pursuant to the Operative Documents
shall continue to be effective or be reinstated, as the case may
be, if at any time payment or any part thereof, of principal of,
interest on or any other amount with respect to any Loan or any
obligation of Sponsor pursuant to the Operative Documents is
rescinded or must otherwise be restored by the Servicer or any
Participant upon the bankruptcy or reorganization of Sponsor, any
Borrower or any guarantor or otherwise.
8.12 Right to Bring Separate Action.
Nothing contained in this Article VIII shall be construed to affect
any other right that Sponsor may otherwise have under this
Agreement, or any Operative Document, at law or in equity to
institute an action or assert a claim against the Servicer or any
Participant based upon a breach of Servicer's or such
Participant's obligations set forth in the Operative Documents or
to assert a compulsory counterclaim with respect thereto and any
waiver of notice or other matter set forth in this Article VIII
shall not affect Sponsor's right to seek damages arising from the
failure of the Servicer to give such notice otherwise required by
the terms of the Operative Documents.
IX. INDEMNIFICATION
9.1 Indemnification.
(a) In addition to the other rights of the Servicer and the
Participants hereunder, Sponsor hereby agrees to protect, indemnify
and save harmless the Servicer, each Participant, and the officers,
directors, shareholders, employees, agents and representatives
thereof (each an "Indemnified Party") from and against any and all
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs (including, without limitation, reasonable
attorney's fees and costs actually incurred), expenses or
disbursements of any kind or nature whatsoever, whether direct,
indirect, consequential or incidental, whether brought by the
Borrowers or any other party, with respect to or in connection with
or arising out of (i) the execution and delivery of this Agreement,
any other Operative Document or any agreement or instrument
contemplated hereby or thereby, including without limitation, the
Loan Documents, the performance by the parties hereto or thereto of
their respective obligations hereunder or thereunder or the
consummation of the transactions contemplated hereby, (ii) the
making or administration of the Loan Commitments, the Loans or any
of them, including any violation of federal or state usury or other
laws, provided that with respect to clauses (i) and (ii), Sponsor
shall have no obligation to indemnify the Servicer and all
Participants for more than one (1) counsel's reasonable fees and
expenses, (iii) the enforcement, performance and administration of
this Agreement or the Loan Documents or any powers granted to the
Servicer hereunder or under any Loan Documents, (iv) any
misrepresentation of the Sponsor hereunder, (v) any matter arising
pursuant to any Environmental Laws as a result of the Collateral or
(vi) any actual or prospective claim, litigation, investigation or
proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory, whether or not the Indemnified
Party is a named party thereto, except to the extent that such
losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence
or willful misconduct of such Indemnified Party.
(b) In addition to amounts payable elsewhere provided in
this Agreement, without duplication, the Sponsor hereby agrees to
protect, indemnify, pay and save the Servicer and each Participant
harmless from and against any and all claims, demands, liabilities,
damages, losses, costs, charges and reasonable expenses (including
reasonable attorney's fees and disbursements) which the Servicer or
any Participant may incur or be subject to as a consequence, direct
or indirect, of (i) the issuance of any Letter of Credit for the
account of a Borrower, other than as a result of the gross
negligence or willful misconduct of the Servicer; (ii) the failure
of the Servicer to honor a drawing under any Letter of Credit due
to any act or omission (whether rightful or wrongful) of any
present or future de jure or de facto government or governmental
authority; or (iii) any third party claim arising therefrom.
(c) The foregoing indemnitees shall survive the termination
of this Agreement.
9.2 Notice Of Proceedings; Right To Defend
(a) Any Person with an indemnification claim (or potential claim)
pursuant to Section 9.1 ("Potential Indemnitee") agrees to
notify Sponsor (the "Potential Indemnitor") in writing within
a reasonable time after receipt by it of written notice of
the commencement of any administrative, legal or other
proceeding, suit or action by a Person (other than Indemnitee
or an affiliate thereof), if a claim for indemnification may
be made by the Potential Indemnitee against the Potential
Indemnitor under this Article IX.
(b) Following receipt by the Potential Indemnitor of any such
notice from a Potential Indemnitee, (an "Indemnity Notice"),
the Potential Indemnitor shall be entitled at its own cost
and expense to investigate and participate in the proceeding,
suit or action referred to in the Indemnity Notice. At such
time as the Potential Indemnitor shall have acknowledged in
writing to the Potential Indemnitee that it will pay any
judgment, damages, or losses incurred by the Potential
Indemnitee in the proceeding, suit or action referred to in
the Indemnity Notice other than those for gross negligence or
willful misconduct on the part of the Potential Indemnitee
(at which time the "Potential Indemnitor" shall be deemed to
be the "Indemnitor" and the "Potential Indemnitee" shall be
deemed to be the "Indemnitee"), the Indemnitor shall be
entitled, to the extent that it shall desire, to assume the
defense of such proceeding, suit or action, with counsel
reasonably satisfactory to the Indemnitee. If the Indemnitor
shall so assume the defense of such proceeding, suit or
action, the Indemnitor shall conduct such defense with due
diligence and at its own cost and expense.
(c) In the event that the Indemnitor so assumes the defense of
such proceeding, suit or action, the Indemnitor shall not be
entitled to settle such proceeding, suit or action without
the written consent of the Indemnitee, provided that in the
event that the Indemnitee does not consent to such settlement
not to be unreasonably withheld or delayed (i) the
Indemnitor's indemnification liability in connection with
such proceeding, suit or action shall not exceed the amount
of such proposed settlement and (ii) Indemnitee shall assume
and pay all costs and expenses, including reasonable
attorneys' fees, incurred by Indemnitor from the date that
the Indemnitor presented the Indemnitee the terms of the
proposed settlement. An Indemnitor shall not be liable to an
Indemnitee for any settlement of a claim in any proceeding,
suit or other action referred to in an Indemnity Notice,
consented to by the Indemnitee without the consent of the
Indemnitor.
(d) A Potential Indemnitor shall be liable to a Potential
Indemnitee for a settlement of a claim in any proceeding,
suit or other action referred to in an Indemnity Notice
consented to by such Potential Indemnitee only if (i) such
Potential Indemnitor first had a reasonable opportunity to
investigate such claim and participate in such proceeding,
suit or action, (ii) the Potential Indemnitee gave the
Potential Indemnitor at least ten (10) Business Days notice
of the proposed terms of such settlement prior to entering
into such settlement and (iii) the Potential Indemnitor did
not acknowledge in writing to the Potential Indemnitee, by
the expiration of such ten (10) Business Days period, or such
longer period as may be agreed to by the Potential Indemnitee
and Potential Indemnitor that it would pay any judgment,
damages or losses incurred by the Potential Indemnitee in
such proceeding suit or action.
9.3 Third Party Beneficiaries
No Persons shall be deemed to be third party beneficiaries of this
Agreement. Except as expressly otherwise provided in this
Agreement, this Agreement is solely for the benefit of Sponsor and
the Servicer, the Participants and their respective successors and
permitted assigns, and no other Person shall have any right,
benefit, priority or interest under, or because of the existence
of, this Agreement.
X. SURVIVAL OF LOAN FACILITY
The terms of this Loan Facility Agreement shall survive the
termination of the Commitment hereunder and the termination of any Loan
Commitment established pursuant the terms hereof until (x) the
indefeasible payment in full of each of the Loans, (y) the termination of
each of the Letters of Credit outstanding, and (z) the indefeasible
payment in full of all outstanding Letter of Credit Obligations.
Notwithstanding the foregoing, Article IX hereof shall survive the
termination of this Agreement upon such repayment and termination.
XI. CONDITIONS PRECEDENT
CONDITIONS TO EFFECTIVE DATE; EFFECT OF
AMENDMENT AND RESTATEMENT; EXTENSIONS OF
CREDIT ON AND AFTER EFFECTIVE DATE
11.1 Conditions to Effective Date.
Notwithstanding any other provision of this Agreement and without
affecting in any manner the rights of the Participants and Servicer
hereunder, it is understood and agreed that this Agreement shall
not become effective, and the Prior Loan Facility Agreement shall
remain in full force and effect, Sponsor shall have no rights under
this Agreement and Servicer and Participants shall not be obligated
to take, fulfill or perform any action hereunder, until the
following conditions have been fulfilled
11.1.1 Receipt of Documents. The Servicer shall have
received the following, each dated as of the Effective Date, in
form and substance satisfactory to the Servicer and (except in the
case of the Servicing Agreement and the Fee Letter) the
Participants:
(a) Duly executed counterparts of this Agreement.
(b) Duly executed counterparts of the Servicing Agreement
and the Fee Letter.
(c) Duly executed counterparts of the Guaranty Agreement.
(d) Copies of the organizational papers of Sponsor and each
Guarantor, certified as true and correct by the Secretaries of
State of their respective States of incorporation, and certificates
from the Secretaries of State of such States of incorporation
certifying Sponsor's and each Guarantor's good standing as a
corporation in such State.
(e) A certificate of the Secretary or Assistant Secretary
of each of Sponsor and each Guarantor certifying (i) the names and
true signatures of the officers of Sponsor and each Guarantor
authorized to execute the Guaranty Agreement, this Agreement, the
Servicing Agreement and the other Operative Documents to be
delivered hereunder to which each is a party, (ii) the bylaws of
Sponsor and each Guarantor, respectively, and (iii) the resolutions
of the Board of Directors of each of Sponsor and each Guarantor,
respectively, approving the Operative Documents to which each is a
party and the transactions contemplated hereby.
(f) A favorable written opinion of Powell, Goldstein,
Xxxxxx & Xxxxxx, LLP, counsel for Sponsor and Guarantor, in a form
satisfactory to the Servicer and each Participant and covering such
matters relating to the transactions contemplated hereby as the
Servicer may reasonably request.
(g) In addition, each of the Participants shall have
received a duly executed Participation Certificate from the
Servicer.
11.1.2 Corporate Actions. All corporate and other
proceedings taken or to be taken in connection with the
transactions contemplated hereby and all documents incident hereto
or delivered in connection therewith shall be satisfactory in form
and substance to the Servicer and the Participants.
11.1.3 Payment of Fees. Sponsor shall have paid an
amendment fee in the amount of $175,000 to Servicer on behalf of
the Participants, all to the Participants based upon their
respective Pro Rata Shares and all other Fees, costs, and expenses
of closing payable by Borrower hereunder (including fees and
expenses of consultants and counsel to Lender presented as of the
Effective Date).
11.2 Effect of Amendment and Restatement.
11.2.1. Upon the effectiveness of this Agreement on the
Effective Date pursuant to Section 11.1:
(a) the Commitment of First Tennessee Bank shall terminate,
and First Tennessee Bank shall be deemed removed as a Participant
for all purposes under this Agreement and all Operative documents;
(b) First Union National Bank and The Fuji Bank, Limited
shall join this Agreement as Participants, and the Commitments of
all Participants are amended to the Commitments defined herein;
(c) the terms and conditions of the Prior Loan Facility -
Agreement shall be amended as set forth herein and, as so amended,
shall be restated in their entirety, but only with respect to the
rights, duties and obligations between Sponsor, Servicer and
Participants accruing from and after the Effective Date;
(d) this Agreement shall not in any way release or impair
the rights, duties, or obligations created pursuant to the Prior
Loan Facility Agreement and any other Operative Document or affect
the relative priorities thereof, in each case to the extent in
force and effect thereunder as of the Effective Date and except as
modified hereby or by documents, instruments and agreements
executed and delivered in connection herewith, and all of such
rights, duties, and obligations are assumed, ratified and affirmed
by Sponsor;
(e) all indemnification obligations of Sponsor under the
Prior Loan Facility Agreement and any other Operative Documents
shall survive the execution and delivery of this Agreement and
shall continue in full force and effect for the benefit of
Servicer, each Participant and any other Person indemnified under
the Prior Loan Facility Agreement or any other Operative Document
at any time prior to the Effective Date (including, without
limitation, to the extent set forth in Section 9.1 of the Prior
Loan Facility Agreement as in effect on the Effective Date);
(f) all "Loans", "Letters of Credit" and "Loan Commitments"
extended by Servicer under the Prior Loan Facility Agreement shall,
to the extent outstanding on the Effective Date continue outstand-
ing under this Agreement and shall not be deemed to be paid, re-
leased, discharged or otherwise satisfied by the execution of this
Agreement, and this Agreement shall not constitute a refinancing,
substitution or novation of such Loans, Letters of Credit, and Loan
Commitments or any of the other rights, duties and obligations of
the parties hereunder; and
(g) any and all references to the Prior Loan Facility
Agreement shall, without further action of the parties, be deemed a
reference to the Prior Loan Facility Agreement, as amended and re-
stated by this Agreement, and as this Agreement shall be further
amended or amended and restated from time to time hereafter.
11.2.2 Notwithstanding anything herein to the contrary,
the Servicer and Participants agree that (i) the Loan Term of each
Loan extended under the Prior Loan Facility Agreement may exceed
twenty-four months but shall not exceed thirty-seven months, and
(ii) the interest rates, commitment fees, letter of credit fees and
other amounts payable by Borrowers with respect to Loans extended
under, and Letters of Credit issued pursuant to, the Prior Loan
Facility Agreement shall continue at the same rates and amounts set
forth in the Loan Documents for such Loan. No amounts paid by the
Sponsor under this Section 11.2.2 shall constitute Guaranty
Payments.
XII. THE SERVICER
12.1 Appointment of Servicer as Agent.
To the extent of its ownership interest in the Loans, each
Participant hereby designates Servicer as its agent to administer
all matters concerning the Loans and to act as herein specified.
Each Participant hereby irrevocably authorizes the Servicer to take
such actions on its behalf under the provisions of this Agreement,
the other Operative Documents, and all other instruments and
agreements referred to herein or therein, and to exercise such
powers and to perform such duties hereunder and thereunder as are
specifically delegated to or required of the Servicer by the terms
hereof and thereof and such other powers as are reasonably
incidental thereto. The Servicer may perform any of its duties
hereunder by or through its agents or employees.
12.2 Nature of Duties of Servicer.
The Servicer shall have no duties or responsibilities except those
expressly set forth in this Agreement and the other Operative
Documents. None of the Servicer nor any of its respective
officers, directors, employees or agents shall be liable for any
action taken or omitted by it as such hereunder or in connection
herewith, unless caused by its or their gross negligence or willful
misconduct. The Servicer shall not have by reason of this
Agreement a fiduciary relationship in respect of any Participant;
and nothing in this Agreement, express or implied, is intended to
or shall be so construed as to impose upon the Servicer any
obligations in respect of this Agreement or the other Operative
Documents except as expressly set forth herein.
12.3 Lack of Reliance on the Servicer.
(a) Independently and without reliance upon the Servicer,
each Participant, to the extent it deems appropriate, has made and
shall continue to make (i) its own independent investigation of the
financial condition and affairs of the Credit Parties in connection
with the taking or not taking of any action in connection herewith,
and (ii) its own appraisal of the creditworthiness of the Credit
Parties, and, except as expressly provided in this Agreement, the
Servicer shall have no duty or responsibility, either initially or
on a continuing basis, to provide any Participant with any credit
or other information with respect thereto, whether coming into its
possession before the making of the Loans or at any time or times
thereafter.
(b) The Servicer shall not be responsible to any
Participant for any recitals, statements, information,
representations or warranties herein or in any document,
certificate or other writing delivered in connection herewith or
for the execution, effectiveness, genuineness, validity,
enforceability, collectibility, priority or sufficiency of this
Agreement, the Guaranty Agreement, and Loan Document or any other
documents contemplated hereby or thereby, or the financial
condition of the Credit Parties or any Borrower, or be required to
make any inquiry concerning either the performance or observance of
any of the terms, provisions or conditions of this Agreement, the
Guaranty Agreement or the other documents contemplated hereby or
thereby, or the financial condition of the Credit Parties or any
Borrower, or the existence or possible existence of any Unmatured
Credit Event or Credit Event.
12.4 Certain Rights of the Servicer.
If the Servicer shall request instructions from the Required
Participants with respect to any action or actions (including the
failure to act) in connection with this Agreement, the Servicer
shall be entitled to refrain from such act or taking such act,
unless and until the Servicer shall have received instructions from
the Required Participants; and the Servicer shall not incur
liability in any Person by reason of so refraining. Without
limiting the foregoing, no Participant shall have any right of
action whatsoever against the Servicer as a result of the Servicer
acting or refraining from acting hereunder in accordance with the
instructions of the Required Participants.
12.5 Reliance by Servicer.
The Servicer shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, notice,
statement, certificate, telex, teletype or telecopier message,
cable gram, radiogram, order or other documentary, teletransmission
or telephone message believed by it to be genuine and correct and
to have been signed, sent or made by the proper Person. The
Servicer may consult with legal counsel (including counsel for any
Credit Party), independent public accountants and other experts
selected by it and shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts.
12.6 Indemnification of Servicer.
To the extent the Servicer is not reimbursed and indemnified by the
Credit Parties, each Participant will reimburse and indemnify the
Servicer, ratably according to the respective Pro Rata Shares, in
either case, for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs,
expenses (including counsel fees and disbursements) or
disbursements of any kind or nature whatsoever which may be imposed
on, incurred by or asserted against the Servicer in performing its
duties hereunder, in any way relating to or arising out of this
Agreement or the other Operative Documents; provided that no
Participant shall be liable to the Servicer for any portion of such
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from
the Servicer's gross negligence or willful misconduct.
12.7 The Servicer in its Individual Capacity.
With respect to its obligations under this Agreement and the
amounts advanced by it, the Servicer shall have the same rights and
powers hereunder as any other Participant and may exercise the same
as though it were not performing the duties specified herein; and
the terms "Participants", "Required Participants", or any similar
terms shall, unless the context clearly otherwise indicates,
include the Servicer in its individual capacity. The Servicer may
accept deposits from, lend money to, and generally engage in any
kind of banking, trust, financial advisory or other business with
the Consolidated Companies or any affiliate of the Consolidated
Companies as if it were not performing the duties specified herein,
and may accept fees and other consideration from the Consolidated
Companies for services in connection with this Agreement and
otherwise without having to account for the same to the
Participants.
12.8 Holders of Participation Certificates.
The Servicer may deem and treat the payee of any Participation
Certificate as the owner thereof for all purposes hereof unless and
until a written notice of the assignment or transfer thereof shall
have been filed with the Servicer. Any request, authority or
consent of any Person who, at the time of making such request or
giving such authority or consent, is the holder of any
Participation Certificate shall be conclusive and binding on any
subsequent holder, transferee or assignee of such Participation
Certificate or of any Participation Certificate or Certificates
issued in exchange therefor.
XIII. MISCELLANEOUS
13.1 Notices.
All notices, requests and other communications to any party
hereunder shall be in writing (including bank wire, telex, telecopy
or similar teletransmission or writing) and shall be given to such
party at its address or applicable teletransmission number set
forth on the signature pages hereof, or such other address or
applicable teletransmission number as such party may hereafter
specify by notice to the Servicer and Sponsor. Each such notice,
request or other communication shall be effective (i) if given by
telex, when such telex is transmitted to the telex number specified
in this Section and the appropriate answerback is received, (ii) if
given by mail, 72 hours after such communication is deposited in
the mails with first class postage prepaid, addressed as aforesaid,
(iii) if given by telecopy, when such telecopy is transmitted to
the telecopy number specified in this Section and the appropriate
confirmation is received, or (iv) if given by any other means
(including, without limitation, by air courier),
when delivered or received at the address specified in this
Section; provided that notices to the Servicer shall not be
effective until received.
13.2 Amendments, Etc.
No amendment or waiver of any provision of this Agreement or the
other Operative Documents, nor consent to any departure by any
Credit Party therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Required Participants
(and in the case of any amendment, the applicable Credit Party),
and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given;
provided that no amendment, waiver or consent shall, unless in
writing and signed by all the Participants do any of the following:
(i) waive any of the conditions specified in Section 2.1 or 11.1,
(ii) increase the Participating Commitments or contractual
obligations of the Participants to Servicer or Sponsor under this
Agreement, (iii) reduce the principal of, or interest on, the
Participation Certificates or any fees hereunder, (iv) postpone any
date fixed for the payment in respect of principal of, or interest
on, the Participation Certificates or any fees hereunder, (v) agree
to release any Guarantor from its obligations under any Guaranty
Agreement or the Sponsor from its obligations pursuant to
Article VIII, (vi) modify the definition of "Required
Participants," or (vii) modify Article IV, Article VIII or this
Section 13.2. Notwithstanding the foregoing, no amendment, waiver
or consent shall, unless in writing and signed by the Servicer in
addition to the Participants required hereinabove to take such
action, affect the rights or duties of the Servicer under this
Agreement or under any other Operative Document or Loan Document.
In addition, notwithstanding the foregoing, the Servicer and the
Sponsor may, without the consent of or notice to the Participants,
enter into amendments, modifications or waivers with respect to the
Servicing Agreement and the Fee Letter as long as such amendments
or modifications do not conflict with the terms of this Agreement.
13.3 No Waiver; Remedies Cumulative.
No failure or delay on the part of the Servicer or any Participant
in exercising any right or remedy hereunder or under any other
Operative Document, and no course of dealing between any Credit
Party and the Servicer or any Participant shall operate as a waiver
thereof, nor shall any single or partial exercise of any right or
remedy hereunder or under any other Operative Document preclude any
other or further exercise thereof or the exercise of any other
right or remedy hereunder or thereunder. The rights and remedies
herein expressly provided are cumulative and not exclusive of any
rights or remedies which the Servicer or any Participant would
otherwise have. No notice to or demand on any Credit Party not
required hereunder or under any other Operative Document in any
case shall entitle any Credit Party to any other or further notice
or demand in similar or other circumstances or constitute a waiver
of the rights of the Servicer or the Participants to any other or
further action in any circumstances without notice or demand.
13.4 Payment of Expenses, Etc. Sponsor shall:
(i) whether or not the transactions hereby
contemplated are consummated, pay all reasonable, out-of-
pocket costs and expenses of the Servicer in the
administration (both before and after the execution hereof
and including reasonable expenses actually incurred relating
to advice of counsel as to the rights and duties of the
Servicer and the Participants with respect thereto) of, and
in connection with the preparation, execution and delivery
of, preservation of rights under, enforcement of, and, after
a Unmatured Credit Event or Credit Event, refinancing,
renegotiation or restructuring of, this Agreement and the
other Operative Documents and the documents and instruments
referred to therein, and any amendment, waiver or consent
relating thereto (including, without limitation, the
reasonable fees actually incurred and disbursements of
counsel for the Servicer), and in the case of enforcement of
this Agreement or any Operative Document after an Credit
Event, all such reasonable, out-of-pocket costs and expenses
(including, without limitation, the reasonable fees actually
incurred and reasonable disbursements and changes of
counsel), for any of the Participants; and
(ii) Pay and hold the Servicer and each of the
Participants harmless from and against any and all present
and future stamp, documentary, and other similar Taxes with
respect to this Agreement, the Participation Certificates,
the Loan Documents and any other Operative Documents, any
collateral described therein, or any payments due thereunder,
and save the Servicer and each Participant harmless from and
against any and all liabilities with respect to or resulting
from any delay or omission to pay such Taxes.
13.5 Right of Setoff.
In addition to and not in limitation of all rights of offset that
any Participant may have under applicable law, each Participant
shall, upon the occurrence of any Credit Event and whether or not
such Participant has made any demand or any Credit Party's
obligations have matured, have the right to appropriate and apply
to the payment of any Credit Party's obligations hereunder and
under the other Operative Documents, all deposits of any Credit
Party (general or special, time or demand, provisional or final)
then or thereafter held by and other indebtedness or property then
or thereafter owing by such Participant or other holder to any
Credit Party, whether or not related to this Agreement or any
transaction hereunder.
13.6 Benefit of Agreement; Assignments; Participations.
(a) This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the respective successors and
assigns of the parties hereto, provided that Sponsor may not assign
or transfer any of its interest hereunder without the prior written
consent of the Participants.
(b) Any Participant may make, carry or transfer Loans
at, to or for the account of, any of its branch offices or the
office of an Affiliate of such Participant.
(c) Each Participant may assign all of its interests,
rights and obligations under this Agreement (including all of its
Participating Commitments and the Funded Participant's Interest at
the time owing to it and the Participation Certificates held by it)
to any Eligible Assignee; provided, however, that (i) the Sponsor
has given its prior written consent to such assignment (which
consent shall not be unreasonably withheld or delayed) unless such
assignment is an Affiliate of the assigning Participant or unless a
Credit Event has occurred and is continuing hereunder, (ii) the
amount of the Participating Commitment of the assigning Participant
subject to each assignment (determined as of the date the
assignment and acceptance with respect to such assignment is
delivered to the Servicer) shall not be less than the entire
Participating Commitment of such assignor and (iii) the parties to
each such assignment shall execute and deliver to the Servicer an
Assignment and Acceptance, together with the Participation
Certificate subject to such assignment and, unless such assignment
is to an Affiliate of such Participant, a processing and
recordation fee of $2,500. Within ten (10) Business Days after
receipt of the notice and the Assignment and Acceptance, Servicer
shall execute and deliver, in exchange for the surrendered
Participation Certificate, a new Participation Certificate to the
order of such assignee in a principal amount equal to the
applicable Participating Commitment assumed by it pursuant to such
Assignment and Acceptance. Such new Participation Certificate
shall be in an aggregate principal amount equal to the aggregate
principal amount of such surrendered Participation Certificate,
shall be dated the date of the surrendered Participation
Certificate which it replaces, and shall otherwise be in
substantially the form attached hereto.
(d) Each Participant may, without the consent of
Sponsor or the Servicer, sell participations to one or more banks
or other entities in all or a portion of its rights and obligations
under this Agreement (including all or a portion of its
Participating Commitment and the Funded Participant's Interest
owing to it), provided, however, that (i) no Participant may sell a
participation in its Participating Commitment (after giving effect
to any permitted assignment hereof) unless it retains an aggregate
exposure of 50% of its original Participating Commitment, provided,
however, sales of participations to an Affiliate of such
Participant shall not be included in such calculation; provided,
however, no such maximum amount shall be applicable to any such
participation sold at any time there exists an Credit Event
hereunder, (ii) such Participant's obligations under this Agreement
shall remain unchanged, (iii) such Participant shall remain solely
responsible to the other parties hereto for the performance of such
obligations, and (iv) the participating bank or other entity shall
not be entitled to the benefit (except through its selling
Participant) of the cost protection provisions contained in Article
II of this Agreement, and (v) Sponsor, Servicer and the other
Participants shall continue to deal solely and directly with each
Participant in connection with such Participant's rights and
obligations under this Agreement and the other Operative Documents,
and such Participant shall retain the sole right to enforce the
obligations of Sponsor relating to the Loans and to approve any
amendment, modification or waiver of any provisions of this
Agreement (other than an amendment requiring approval of 100% of
the Participants). Each Participant shall promptly notify in
writing the Servicer and the Sponsor of any sale of a participation
hereunder and shall certify to Sponsor and Servicer its compliance
with the terms hereof.
(e) Any Participant or participant may, in connection
with the assignment or participation or proposed assignment or
participation, pursuant to this Section, disclose to the assignee
or participant or proposed assignee or participant any information
relating to Sponsor or the other Consolidated Companies furnished
to such Participant by or on behalf of Sponsor or any other
Consolidated Company. With respect to any disclosure of
confidential, non-public, proprietary information, such proposed
assignee or participant shall agree to use the information only for
the purpose of making any necessary credit judgments with respect
to this credit facility and not to use the information in any
manner prohibited by any law, including without limitation, the
securities laws of the United States. The proposed participant or
assignee shall agree not to disclose any of such information except
(i) to directors, employees, auditors or counsel to whom it is
necessary to show such information, each of whom shall be informed
of and shall acknowledge the confidential nature of the
information, (ii) in any statement or testimony pursuant to a
subpoena or order by any court, governmental body or other agency
asserting jurisdiction over such entity, or as otherwise required
by law (provided prior notice is given to Sponsor and the Servicer
unless otherwise prohibited by the subpoena, order or law), and
(iii) upon the request or demand of any regulatory agency or
authority with proper jurisdiction. The proposed participant or
assignee shall further agree to return all documents or other
written material and copies thereof received from any Participant,
the Servicer or Sponsor relating to such confidential information
unless otherwise properly disposed of by such entity.
(f) Any Participant may at any time assign all or any
portion of its rights in this Agreement to a Federal Reserve Bank;
provided that no such assignment shall release the Participant from
any of its obligations hereunder.
13.7 Governing Law; Submission to Jurisdiction.
(a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW
PRINCIPLES THEREOF) OF THE STATE OF GEORGIA.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER OPERATIVE DOCUMENT MAY BE BROUGHT IN THE
SUPERIOR COURT OF XXXXXX COUNTY, GEORGIA, OR ANY OTHER COURT OF THE
STATE OF GEORGIA OR OF THE UNITED STATES OF AMERICA FOR THE
NORTHERN DISTRICT OF GEORGIA, AND, BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, SPONSOR HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF
ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF
THE AFORESAID COURTS. THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE
TRIAL BY JURY, AND SPONSOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING
IN SUCH RESPECTIVE JURISDICTIONS.
(c) SPONSOR HEREBY IRREVOCABLY DESIGNATES PRENTICE HALL
CORPORATION, ATLANTA, GEORGIA, AS ITS DESIGNEE, APPOINTEE AND LOCAL
AGENT TO RECEIVE, FOR AND ON BEHALF OF SPONSOR, SERVICE OF PROCESS
IN SUCH RESPECTIVE JURISDICTIONS IN ANY LEGAL ACTION OR PROCEEDING
WITH RESPECT TO THIS AGREEMENT OR ANY DOCUMENT RELATED THERETO. IT
IS UNDERSTOOD THAT A COPY OF SUCH PROCESS SERVED ON SUCH LOCAL
AGENT WILL BE PROMPTLY FORWARDED BY SUCH LOCAL AGENT AND BY THE
SERVER OF SUCH PROCESS BY MAIL TO SPONSOR AT ITS ADDRESS SET FORTH
OPPOSITE ITS SIGNATURE BELOW, BUT THE FAILURE OF SPONSOR TO RECEIVE
SUCH COPY SHALL NOT AFFECT IN ANY WAY THE SERVICE OF SUCH PROCESS.
SPONSOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF
ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING
BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO SPONSOR AT ITS SAID ADDRESS, SUCH SERVICE TO
BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING.
(d) Nothing herein shall affect the right of the Servicer,
any Participant, or any Credit Party to serve process in any other
manner permitted by law or to commence legal proceedings or
otherwise proceed against Sponsor in any other jurisdiction.
13.8 Counterparts.
This Agreement may be executed in any number of counterparts and by
the different parties hereto on separate counterparts, each of
which when so executed and delivered shall be an original, but all
of which shall together constitute one and the same instrument.
13.9 Severability.
In case any provision in or obligation under this Agreement or the
other Operative Documents shall be invalid, illegal or
unenforceable, in whole or in part, in any jurisdiction, the
validity, legality and enforceability of the remaining provisions
or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
13.10 Independence of Covenants.
All covenants hereunder shall be given independent effect so that
if a particular action or condition is not permitted by any of such
covenants, the fact that it would be permitted by an exception to,
or be otherwise within the limitation of, another covenant, shall
not avoid the occurrence of a Unmatured Credit Event or an Credit
Event if such action is taken or condition exists.
13.11 Change in Accounting Principles, Fiscal Year or Tax Laws.
If (i) any preparation of the financial statements referred to in
Section 6.1(g) hereafter occasioned by the promulgation of rules,
regulations, pronouncements and opinions by or required by the
Financial Accounting Standards Board or the American Institute of
Certified Public Accounts (or successors thereto or agencies with
similar functions) result in a material change in the method of
calculation of financial covenants, standards or terms found in
this Agreement, (ii) there is any change in Sponsor's fiscal
quarter or Fiscal Year, or (iii) there is a material change in
federal tax laws which materially affects any of the Consolidated
Companies' ability to comply with the financial covenants,
standards or terms found in this Agreement, Sponsor and the
Required Participants agree to enter into negotiations in order to
amend such provisions so as to equitably reflect such changes with
the desired result that the criteria for evaluating any of the
Consolidated Companies' financial condition shall be the same after
such changes as if such changes had not been made. Unless and
until such provisions have been so amended, the provisions of this
Agreement shall govern.
13.12 Headings Descriptive; Entire Agreement.
The headings of the several sections and subsections of this
Agreement are inserted for convenience only and shall not in any
way affect the meaning or construction of any provision of this
Agreement. This Agreement, the other Operative Documents, and the
agreements and documents required to be delivered pursuant to the
terms of this Agreement constitute the entire agreement among the
parties hereto and thereto regarding the subject matters hereof and
thereof and supersede all prior agreements, representations and
understandings related to such subject matters.
[Signatures Set Forth on Next Page]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.
Address for Notices: RUBY TUESDAY, INC.
000 X. Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000 By:______________________________
Attention: J. Xxxxxxx Xxxxxxxxxx Name:
Telecopy: (000)000-0000 Title:
[CORPORATE SEAL]
STATE OF GEORGIA
COUNTY OF _____________
Signed, sealed and delivered
in the presence of:
_____________________________
Notary Public
Date Executed by Notary:
_____________________________
My commission expires:
______________________________
[NOTARIAL SEAL]
Address for Notices: SUNTRUST BANK, ATLANTA, as
Servicer
00 Xxxx Xxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Center No. 113 By:______________________________
Telecopy No. (000) 000-0000 Name:
Title:
with a copy to:
By:______________________________
Mr. Xxxxx Xxxx Name:
00 Xxxx Xxxxx, 00xx Xxxxx Title:
Xxxxxxx, Xxxxxxx 00000
Address for Notices: SUNTRUST BANK, ATLANTA
00 Xxxx Xxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Center No. 113
By:______________________________
Telecopy No.: (000) 000-0000 Name:________________________
Title:_________________________
with a copy to:
Mr. Xxxxx Xxxx
By:_____________________________
00 Xxxx Xxxxx, 00xx Xxxxx Name:________________________
Xxxxxxx, Xxxxxxx 00000 Title:_________________________
Participating Commitment: $9,000,000.00
Pro Rata Share: 17.14288%
Address for Notices: FIRST AMERICAN NATIONAL BANK
000 Xxxxx Xxx Xxxxxx
Xxxxxxxxx, XX 00000 By:____________________________
Attention: Xx. Xxxxx Xxxxxxx Name:_______________________
Telecopy: (000) 000-0000 Title:_______________________
Participating Commitment: 8,250,000.00
Pro Rata Share: 15.71429%
Address for Notices: NATIONSBANK, N.A., successor
to Xxxxxxx Bank, N.A.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000 By:____________________________
Attention: Xx. Xxxxx Xxxxxxxxx Name:
location code: NC-1-007-08-08 Title:
Telecopy: (000) 000-0000
Participating Commitment: 8,250,000.00
Pro Rata Share: 15.71429%
Address for Notices: HIBERNIA NATIONAL BANK
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xx. Xxxx Villaffara By:____________________________
Telecopy: (000) 000-0000 Name:
Title:_______________________
Participating Commitment: 6,750,000.00
Pro Rata Share: 12.85714%
Address for Notices: FIRST UNION NATIONAL BANK
000 0xx Xxxxxx Xxxxx
Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxx By:_________________________
Telecopy: (000) 000-0000 Name:
Title:
Participating Commitment: $6,750,000.00
Pro Rata Share: 12.85714%
Address for Notices: WACHOVIA BANK, N.A.
000 Xxxxxxxxx Xxxxxx, X.X.
00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxx Xxxx
Telecopy: (000) 000-0000 By:____________________________
Name:________________________
Title:_________________________
Participating Commitment: $4,500,000.00
Pro Rata Share: 8.57143%
Address for Notices: AMSOUTH BANK
Regional Banking
0000 0xx Xxxxxx, Xxxxx
0xx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Mr. Xxx Xxxxxxxx
Telecopy: (000) 000-0000 By:__________________________
Name: ____________________
Title:______________________
Participating Commitment: $4,500,000.00
Pro Rata Share: 8.57143%
Address for Notices: THE FUJI BANK, LIMITED
2 World Trade Center, 79th Floor
New York, New York 10048
Attention: Xx. Xxxxx Xxxxxxx
Telecopy: By:____________________________
Name:________________________
Title:______________________
Participating Commitment: $4,500,000.00
Pro Rata Share: 8.57143%
