CREDIT AGREEMENT dated as of JUNE 29, 2007 between MEXICAN RESTAURANTS, INC., as Borrower, and WELLS FARGO BANK, N.A., as Lender
Exhibit
10.1
[Execution
Copy]
dated
as of
JUNE
29, 2007
between
MEXICAN
RESTAURANTS, INC., as Borrower,
and
▇▇▇▇▇
FARGO BANK, N.A., as Lender
{B0619138;
10}
THIS
CREDIT AGREEMENT is made as of June 29, 2007, by and between MEXICAN
RESTAURANTS, INC., a Texas corporation (the “Borrower”), and ▇▇▇▇▇ FARGO
BANK, N.A., a national banking association (“▇▇▇▇▇ Fargo” or the
“Lender”).
WHEREAS,
the Borrower has requested that the Lender provide a revolving credit facility,
and the Lender has indicated its willingness to lend and the LC Issuer has
indicated its willingness to issue Letters of Credit, in each case, on the
terms
and subject to the conditions set forth herein;
WHEREAS,
each Guarantor is a direct or indirect wholly-owned Subsidiary of the
Borrower;
WHEREAS,
the Borrower conducts the majority of its operations through such Guarantors,
and the relationship between the Guarantors, as Subsidiaries of the Borrower,
provides numerous benefits to the Guarantors, including shared purchasing
strength, centralized management and other economies of scale;
WHEREAS,
the Guarantors will receive the benefit of extensions of credit from the
Borrower and access to its cash flow for Capital Expenditures and Permitted
Acquisitions on the terms and subject to the conditions set forth
herein;
WHEREAS,
each Guarantor has agreed to guaranty the Obligations of the Lender and other
Guarantors under the Loan Documents; and
WHEREAS,
by virtue of the foregoing and after giving effect to the probable liability
of
each Guarantor under the Guaranty and other Loan Documents, the Borrower
and
each Guarantor consider that it is receiving at least fair consideration
and
reasonably equivalent value from the Lender for the Obligations;
NOW,
THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged,
the
parties hereto agree as follows:
SECTION
I
DEFINITIONS
1.1 Definitions.
All
capitalized terms used in this Agreement or in the Notes or in any certificate,
report or other document made or delivered pursuant to this Agreement (unless
otherwise defined therein) shall have the meanings assigned to them
below:
Acquired
Person. Any Person that is the subject of a Permitted
Acquisition.
Affected
Loans. See Section 2.11(a).
Affiliate. With
reference to any Person (i) any director or officer of that Person, (ii)
any
other Person controlling, controlled by or under direct or indirect common
control of that Person, (iii) any other Person directly or indirectly holding
5%
or more of any class of the capital stock or other equity interests (including
options, warrants, convertible securities and similar rights) of that Person
and
(iv) any other Person 5% or more of any class of whose capital stock or other
equity interests (including options, warrants, convertible securities and
similar rights) is held directly or indirectly by that Person.
Agreement. This
Credit Agreement, including the Exhibits and Schedules hereto, as the same
may
be supplemented or amended or restated from time to time.
Alternate
Base Rate. The greater of (i) the rate of interest announced from
time to time by ▇▇▇▇▇ Fargo at its head office as its “Base Rate”, and (ii) the
Federal Funds Effective Rate plus 1/2 of 1% per annum (rounded upwards, if
necessary, to the next 1/8 of 1%). The Base Rate is a reference rate
and does not necessarily represent the lowest or best rate being charged
to any
customer. Any change in the Base Rate or the Federal Funds Effective
Rate shall be effective from and including the effective date of such
change.
Anti-Terrorism
Order. The Executive Order 13224 issued on September 24,
2001.
Applicable
Margin. (i) From the Closing Date to the date on which
the Lender receives the financial statements satisfying the requirements
of
Section 6.1(b)
and a certificate pursuant to Section 6.1(d)
for the first full Fiscal Quarter after the Closing Date, the applicable
percentage set forth below for Pricing Level II below; (ii) thereafter, the
applicable percentage per annum set forth below determined by reference to
the
Total Leverage Ratio as set forth in the most recent certificate received
by the
Lender pursuant to Section 6.1(d)
with respect to any Fiscal Quarter:
|
Applicable
Margin
|
|||||
|
Pricing
Level
|
Total
Leverage
Ratio
|
Commitment
Fee
|
LIBOR
Loans
|
Base
Rate Loans
|
Letter
of Credit Fee
|
|
I
|
>
1.5:1.0
|
0.50%
|
2.50%
|
1.00%
|
2.50%
|
|
II
|
<
1.5:1.0
|
0.50%
|
2.25%
|
0.75%
|
2.25%
|
Any
increase or decrease in the Applicable Margin resulting from a change in
the
Total Leverage Ratio shall become effective as of the first Business Day
immediately following the date a certificate is delivered pursuant to Section
6.1(d)
with respect to any Fiscal Quarter; provided, however, that if a
certificate is not delivered when due in accordance with such Section, then
Pricing Level I shall apply, in each case as of the first Business Day after
the
date on which such certificate was required to have been delivered.
Approved
Fund. Any Fund that is administered or managed by (a) the Lender
or (b) an Affiliate of the Lender.
Assignee. See
Section 10.1.
Assignment
and Assumption. An assignment and assumption entered into by the
Lender and an Eligible Assignee (with the consent of any party whose consent is
required by Section 10.1(b)(ii)),
in substantially the form of Exhibit D or any other form approved by the
Lender.
Attributable
Indebtedness. On any date, (a) in respect of any Capitalized
Lease of any Person, the capitalized amount thereof that would appear on
a
balance sheet of such Person prepared as of such date in accordance with
GAAP,
(b) in respect of any Synthetic Lease Obligation, the capitalized amount
of the
remaining lease or similar payments under the relevant lease or other applicable
agreement or instrument that would appear on a balance sheet of such Person
prepared as of such date in accordance with GAAP if such lease or other
agreement or instrument were accounted for as a Capitalized Lease and (c)
all
Synthetic Debt of such Person.
Base
Rate Loan. Any Loan bearing interest determined with reference to
the Alternate Base Rate.
Borrower. See
the Preamble.
Borrower’s
Accountants. UHY LLP, or such other independent certified public
accountants as are selected by the Borrower and reasonably acceptable to
the
Lender.
Business
Day. (i) For all purposes other than as covered by clause (ii) below, any
day other than a Saturday, Sunday or legal holiday on which banks in Boston,
Massachusetts and Los Angeles, California are open for the conduct of
a substantial part of their commercial banking business; and (ii) with respect
to all notices and determinations in connection with, and payments of principal
and interest on, LIBOR Loans, any day that is a Business Day described in
clause
(i) and that is also a day on which dealings in U.S. dollar deposits are
also
carried on in the London interbank market and banks are open for business
in
London.
Capital
Expenditures. With respect to any Person for any period, any
expenditure in respect of the purchase or other acquisition of any fixed
or
capital asset (excluding normal replacements and maintenance which are properly
charged to current operations); provided that, in calculating the amount
of Capital Expenditures made by the Borrower or its Subsidiaries during any
fiscal period, amounts received or receivable by the Borrower or its
Subsidiaries from any landlord during such period in respect of landlord
contributions, as specified in the applicable lease(s) with such landlord,
shall
be deducted from the amount of such Capital Expenditures.
Capitalized
Leases. All leases that have been or should be, in accordance
with GAAP, recorded as capitalized leases.
Cash
Collateralize. To pledge and deposit with or deliver to the
Lender, for the benefit of the LC Issuer and the Lender, as collateral for
the
Maximum Drawing Amount, cash or deposit account balances pursuant to
documentation in form and substance satisfactory to the Lender and the LC
Issuer.
Cash
Management Agreement. Any agreement to provide cash management
services, including treasury, depository, overdraft, credit or debit card,
electronic funds transfer and other cash management arrangements.
Cash
Management Bank. Any Person that, at the time it enters into a
Cash Management Agreement, is the Lender or an Affiliate of the Lender, in
its
capacity as a party to such Cash Management Agreement.
CFC. A
Person that is a controlled foreign corporation under Section 957 of the
Code.
Change
of Control. An event or series of events by
which: (i) any Person or “group” (within the meaning of
Section 13(d) of the Securities Exchange Act of 1934, as amended) of Persons
(excluding ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ and D3 Family Fund) acting in concert as a
partnership or other group shall, as a result of a tender or exchange offer,
open market purchases, privately negotiated purchases or otherwise, have
become,
after the date hereof, the “beneficial owner” (within the meaning of such term
under Rule 13d-3 under the Exchange Act) of securities of the Borrower
representing 35% or more of the combined voting power of the then outstanding
securities of the Borrower ordinarily (and apart from rights accruing under
special circumstances) have the right to vote in the election of directors;
(ii)
the Board of Directors of the Borrower shall cease to consist of a majority
of
the individuals who constituted the Board of Directors as of the date hereof
or
who shall have become a member thereof subsequent to the date hereof after
having been nominated, or otherwise approved in writing, by at least a majority
of individuals who constituted the Board of Directors of the Borrower as
of the
date hereof; (iii) the Borrower is merged or consolidated with another
corporation and as a result of such merger or consolidation less than 50.1%
of
the outstanding voting securities of the surviving or resulting corporation
shall then be owned in the aggregate by the former stockholders of the Borrower,
other than affiliates within the meaning of the Exchange Act; (iv) the Borrower
transfers substantially all of its assets to another corporation which is
not a
wholly owned subsidiary of the Borrower; (v) ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇ and their affiliates cease to
hold
at least 20% in the aggregate of the outstanding shares of common stock of
the
Borrower any time prior to the Maturity Date; or (vi) ▇▇▇▇ ▇▇▇▇▇▇▇▇, President
and Chief Executive Officer, and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chief Financial Officer
and
Treasurer, shall have ceased to hold the offices, and engage in the duties
and
have the responsibilities thereof, in the Borrower that they hold as of the
Closing Date and a successor approved by the Lender shall not have been
appointed within 30 days thereafter (such approval not to be unreasonably
withheld or delayed).
Closing
Date. The first date on which the conditions set forth in Section
4.1
have been satisfied.
Code. The
Internal Revenue Code of 1986 and the rules and regulations thereunder,
collectively, as the same may from time to time be supplemented or amended
and
remain in effect.
Collateral. All
of the property, rights and interests of the Borrower, its Subsidiaries and
any
other Person that are or are intended to be subject to the security interests
and liens created by the Security Documents.
Commitment. The
maximum dollar amount of credit which the Lender has agreed to loan to the
Borrower as Loans or make available to the Borrower pursuant to Letters of
Credit upon the terms and subject to the conditions of this Agreement, initially
$10,000,000, as the Lender’s Commitment may be modified pursuant hereto and in
effect from time to time.
Commitment
Fee. See Section 2.5(a).
Commitment
Increase Supplement. See Section 2.1(a)(ii).
Consolidated
EBITDA. At any date of determination, an amount equal to
Consolidated Net Income of the Borrower and its Subsidiaries for the most
recently completed Measurement Period plus (a) the following to the
extent excluded or deducted in calculating such Consolidated Net
Income: (i) Consolidated Interest Charges, (ii) the provision for
Federal, state, local and foreign income taxes payable, (iii) depreciation
(including, without limitation, depreciation of leasehold improvements) and
amortization expense, (iv) other non-recurring expenses reducing such
Consolidated Net Income which do not represent a cash item in such period
or any
future period (in each case of or by the Borrower and its Subsidiaries for
such
Measurement Period), (v) Consolidated Restaurant Pre-Opening Expenses and
(vi)
the items identified on, and only to the extent permitted by, Schedule
1.1 hereof minus (b) the following to the extent included in
calculating such Consolidated Net Income: (i) Federal, state, local
and foreign income tax credits and (ii) all non-recurring items increasing
Consolidated Net Income (in each case of or by the Borrower and its Subsidiaries
for such Measurement Period).
Consolidated
Fixed Charge Coverage Ratio. At any date of determination,
the ratio of (a) the total of (i) Consolidated EBITDA for the most recently
completed Measurement Period, plus (ii) Consolidated Rent Expense for the
most recently completed Measurement Period, less (iii) the aggregate
amount of Federal, state, local and foreign income taxes paid in cash, in
each
case, of or by the Borrower and its Subsidiaries for such Measurement Period,
and less (iv) the aggregate amount of all Maintenance Capital
Expenditures made during such Measurement Period, to (b) the sum of
(i) Consolidated Interest Charges for such Measurement Period, plus
(ii) the aggregate principal amount of all regularly scheduled principal
payments or redemptions or similar acquisitions for value of outstanding
debt
for borrowed money during such Measurement Period (excluding, however, (y)
the
repayment of the Indebtedness under the Existing Credit Agreement and the
Harken
note on the Closing Date and (z) any payments of principal from time to time
with respect to the Loans made pursuant to this Agreement), and (iii) the
Consolidated Rent Expense for such Measurement Period.
Consolidated
Funded Indebtedness. As of any date of determination, for the
Borrower and its Subsidiaries on a Consolidated basis, the sum of (a) the
outstanding principal amount of all obligations, whether current or long-term,
for borrowed money (including Obligations hereunder) and all obligations
evidenced by bonds, debentures, notes, loan agreements or other similar
instruments, (b) all purchase money Indebtedness, (c) all direct obligations
arising under letters of credit, bankers’ acceptances, bank guaranties, surety
bonds and similar instruments, (d) all obligations secured by any mortgage,
pledge, security interest or other Encumbrance on property owned or acquired
by
the Borrower or any Subsidiary, whether or not the obligations secured thereby
shall have been assumed, (e) all obligations in respect of the deferred purchase
price of property or services (other than trade accounts payable in the ordinary
course of business), (f) all Attributable Indebtedness, (g) without duplication,
all Guarantees with respect to outstanding Indebtedness of the types specified
in clauses (a) through (f) above of Persons other than the Borrower or any
Subsidiary, and (h) all Indebtedness of the types referred to in clauses
(a)
through (g) above of any partnership or joint venture (other than a joint
venture that is itself a corporation or limited liability company) in which
the
Borrower or a Subsidiary is a general partner or joint venturer, unless such
Indebtedness is expressly made non-recourse to the Borrower or such
Subsidiary.
Consolidated
Interest Charges. For any Measurement Period, the sum of (a) all
interest, premium payments, debt discount, fees, charges and related expenses
in
connection with borrowed money (including capitalized interest) or in connection
with the deferred purchase price of assets, in each case to the extent treated
as interest in accordance with GAAP, (b) all interest paid or payable with
respect to discontinued operations and (c) the portion of rent expense under
Capitalized Leases that is treated as interest in accordance with GAAP, in
each
case, of or by the Borrower and its Subsidiaries on a Consolidated basis
for the
most recently completed Measurement Period.
Consolidated
Net Income. At any date of determination, the net income (or
loss) of the Borrower and its Subsidiaries on a Consolidated basis for the
most
recently completed Measurement Period; provided that Consolidated Net
Income shall exclude: (a) extraordinary gains and extraordinary losses for
such
Measurement Period; (b) the net income of any Subsidiary during such Measurement
Period to the extent that the declaration or payment of dividends or similar
distributions by such Subsidiary of such income is not permitted by operation
of
the terms of its organization documents or any agreement, instrument or law
applicable to such Subsidiary during such Measurement Period, except that
the
Borrower’s equity in any net loss of any such Subsidiary for such Measurement
Period shall be included in determining Consolidated Net Income; (c) any
income
(or loss) for such Period of any Person if such Person is not a Subsidiary,
except that the Borrower’s equity in the net income of any such Person for such
Measurement Period shall be included in Consolidated Net Income up to the
aggregate amount of cash actually distributed by such Person during such
Period
to the Borrower or a Subsidiary as a dividend or other distribution (and
in the
case of a dividend or other distribution to a Subsidiary, such Subsidiary
is not
precluded from further distributing such amount to the Borrower as described
in
clause (b) of this proviso); (d) any gain or loss arising from any write-up
of
assets, except to the extent inclusion thereof shall be approved in writing
by
the Lender; (e) earnings of any Subsidiary accrued prior to the date it became
a
Subsidiary; (f) any non-cash stock based compensation income or expense related
to restricted stock or stock options; (g) any deferred or other credit
representing any excess of the equity of any Subsidiary at the date of
acquisition thereof over the amount invested in such Subsidiary; and (h)
the
proceeds of any life insurance policy.
Consolidated
Rent Expense. For any Measurement Period, the sum of all rental
obligations (payable in cash) incurred by the Borrower or any Subsidiary
during
such Measurement Period with respect to all real and personal property,
calculated in accordance with GAAP on a Consolidated basis.
Consolidated
Restaurant Pre-Opening Expenses. “Start-up Costs” (as
defined in SOP 98-5 published by the American Institute of Certified Public
Accountants) of the Borrower related to the acquisition, opening and organizing
of New Operating Units, such costs including, without limitation, the cost
of
feasibility studies, initial marketing costs, construction period rents,
staff
training, and recruiting and travel costs for employees engaged in such start-up
activities.
Default. An
Event of Default or event or condition that, but for the requirement that
time
elapse or notice be given, or both, would constitute an Event of
Default.
Disposition
or Dispose. The sale, transfer, license, lease or other
disposition (including any sale and leaseback transaction) of any property
by
any Person (or the granting of any option or other right to do any of the
foregoing), including any sale, assignment, transfer or other disposal, with
or
without recourse, of any notes or accounts receivable or any rights and claims
associated therewith.
Drawdown
Date. The Business Day on which any Loan is made or is to be
made.
Exchange
Act. Securities Exchange Act of 1934, as amended.
Eligible
Assignee. Any Person that meets the requirements to be an
assignee under Section 10.1(b)(i),
(iii)
and (iv)
(subject to such consents, if any, as may be required under Section 10.1(b)(i)).
Eligible
Swap Agreements. Swap Agreements purchased by the Borrower from a
Swap Bank and approved by the Lender (such approval not to be unreasonably
withheld or delayed).
Encumbrances. See
Section 8.3.
Environmental
Laws. Any and all applicable federal, state and local
environmental, health or safety statutes, laws, regulations, rules and
ordinances (whether now existing or hereafter enacted or promulgated), and
all
applicable judicial, administrative and regulatory decrees, judgments and
orders, including common law rulings and determinations, relating to injury
to,
or the protection of, human health or the environment, including, without
limitation, all requirements pertaining to reporting, licensing, permitting,
investigation, remediation and removal of emissions, discharges, releases
or
threatened releases of Hazardous Materials into the environment or relating
to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of such Hazardous Materials.
Equity
Interests. With respect to any Person, all of the shares of
capital stock of (or other ownership or profit interests in) such Person,
all of
the warrants, options or other rights for the purchase or acquisition from
such
Person of shares of capital stock of (or other ownership or profit interests
in)
such Person, all of the securities convertible into or exchangeable for shares
of capital stock of (or other ownership or profit interests in) such Person
or
warrants, rights or options for the purchase or acquisition from such Person
of
such shares (or such other interests), and all of the other ownership or
profit
interests in such Person (including partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are outstanding on any date of
determination.
ERISA. The
Employee Retirement Income Security Act of 1974 and the rules and regulations
thereunder, collectively, as the same may from time to time be supplemented
or
amended and remain in effect.
ERISA
Affiliate. Any trade or business, whether or not incorporated,
that is treated as a single employer with the Borrower under Section 414(b),
(c), (m) or (o) of the Code and Section 4001(a)(14) of ERISA.
ERISA
Event. (a) Any “reportable event,” as defined in Section 4043 of
ERISA or the regulations issued thereunder, with respect to a Plan unless
the
30-day notice requirement with respect to such event has been waived by the
PBGC; (b) the adoption of any amendment to a Plan that would require the
provision of security pursuant to Section 401(a)(29) of the Code or Section
307
of ERISA; (c) the existence with respect to any Plan of an “accumulated funding
deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA),
whether or not waived; (d) the filing pursuant to Section 412(d) of the Code
or
Section 303(d) of ERISA of an application for a waiver of the minimum funding
standard with respect to any Plan; (e) the incurrence of any liability under
Title IV of ERISA with respect to the termination of any Plan or the withdrawal
or partial withdrawal of the Borrower or any ERISA Affiliate from any Plan
or
Multiemployer Plan; (f) the receipt by the Borrower or any ERISA Affiliate
from
the PBGC or a plan administrator of any notice relating to the intention
to
terminate any Plan or Plans or to appoint a trustee to administer any Plan;
(g)
the receipt by the Borrower or any ERISA Affiliate of any notice concerning
the
imposition of Withdrawal Liability (as defined in Part I of Subtitle E of
Title
IV of ERISA) with respect to any Multiemployer Plan or a determination that
a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA; (h) the occurrence of a Prohibited
Acquisition with respect to which the Borrower or any of its Subsidiaries
is a
“disqualified person” (within the meaning of Section 4975 of the Code) or with
respect to which the Borrower or any such Subsidiary could otherwise be liable;
and (i) any other event or condition with respect to a Plan or Multiemployer
Plan that could reasonably be expected to result in material liability of
the
Borrower.
Event
of Default. Any event described in Section 9.1.
Excess
Cash Flow. For any Fiscal Year of the Borrower, the excess (if
any) of (a) Consolidated EBITDA for such Fiscal Year over (b) the sum
(for such Fiscal Year) of (i) Consolidated Interest Charges actually paid
in
cash by the Borrower and its Subsidiaries, (ii) the aggregate principal amount
of all principal payments, redemptions and acquisitions for value of
Consolidated Funded Indebtedness actually made during such Fiscal Year to
the
extent permitted by this Agreement (excluding principal payments of Revolving
Loans), (iii) all income taxes actually paid in cash by the Borrower and
its
Subsidiaries and (iv) Capital Expenditures (including Growth Capital
Expenditures) actually made by the Borrower and its Subsidiaries in such
Fiscal
Year to the extent permitted by this Agreement.
Excluded
Taxes With respect to the Lender, the LC Issuer or any other
recipient of any payment to be made by or on account of any obligation of
the
Borrower hereunder, (a) taxes imposed on or measured by its overall net income
(however denominated), and franchise taxes imposed on it (in lieu of net
income
taxes), by the jurisdiction (or any political subdivision thereof) under
the
laws of which such recipient is organized or in which its principal office
is
located or, in the case of the Lender, in which its applicable lending office
is
located, and (b) any branch profits taxes imposed by the United States or
any
similar tax imposed by any other jurisdiction in which the Borrower is
located.
Existing
Credit Agreement. The Amended and Restated Revolving Credit and
Term Loan Agreement, dated as of January 7, 2004, as amended, between the
Borrower and Bank of America, N.A.
Extraordinary
Receipt. Any cash received by or paid to or for the account
of any Person not in the ordinary course of business, including tax refunds,
pension plan reversions, proceeds of insurance (other than proceeds of business
interruption insurance to the extent such proceeds constitute compensation
for
lost earnings), condemnation and eminent domain awards (and payments in lieu
thereof), indemnity payments and any purchase price adjustments.
Federal
Funds Effective Rate. For any day, a fluctuating interest rate
per annum equal to the weighted average of the rates on overnight Federal
funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published for such day (or, if such day is not a Business
Day,
for the next preceding Business Day) by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day that is a Business Day,
the
average of the quotations for such day on such transactions received by the
Lender from three Federal funds brokers of recognized standing selected by
the
Lender.
Financial
Statements. See Section 5.5(a)
Fiscal
Month. Any of the twelve periods of time, eight of which having
approximately 28 days and four of which having approximately 35 days, which
comprise the Fiscal Year of the Borrower.
Fiscal
Quarter. Any of the four periods of time, each of which consist
of three Fiscal Months, which comprise the Fiscal Year of the
Borrower.
Fiscal
Year. The 52-53 week fiscal period of the Borrower ending on the
Sunday in each calendar year closest to December 31 of such calendar
year.
Fixed
Rate Election. The Interest Period selected for a particular
LIBOR Loan pursuant to Section 2.9.
Fronting
Fee. See Section 2.5(b).
Fund. Any
Person (other than a natural person) that is (or will be) engaged in making,
purchasing, holding or otherwise investing in commercial loans and similar
extensions of credit in the ordinary course of its business.
GAAP. Generally
accepted accounting principles, consistently applied.
Governmental
Authority. The government of the United States of America or any
other nation, or of any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central
bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government (including
any supra-national bodies such as the European Union or the European Central
Bank).
Growth
Capital Expenditures. Capital Expenditures for growth including,
but not limited to, New Construction relating to Operating Units and the
acquisitions of restaurants, including remodeling expenditures for any
restaurant.
Guarantees. As
applied to the Borrower and its Subsidiaries, all guarantees, endorsements
or
other contingent or surety obligations with respect to obligations of others
whether or not reflected on the consolidated balance sheet of the Borrower
and
its Subsidiaries, including any obligation to furnish funds, directly or
indirectly (whether by virtue of partnership arrangements, by agreement to
keep-well or otherwise), through the purchase of goods, supplies or services,
or
by way of stock purchase, capital contribution, advance or loan, or to enter
into a contract for any of the foregoing, for the purpose of payment of
obligations of any other Person.
Guarantors. Each
Subsidiary of the Borrower required to execute and deliver a Guaranty pursuant
to either Section 4.1(a)(v)
or 6.12.
Guaranty. See
Section 4.1(a)(v).
Hazardous
Material. Any substance (i) the presence of which requires or may
hereafter require notification, investigation, a removal or remediation under
any Environmental Law; (ii) which is or becomes defined as a “hazardous waste”,
“hazardous material” or “hazardous substance” or “pollutant” or “contaminant”
under any present or future Environmental Law or amendments thereto including,
without limitation, the Comprehensive Environmental Response, Compensation
and
Liability Act (42 U.S.C. Section 9601 et seq.) and any applicable local
statutes and the regulations promulgated thereunder; (iii) which is toxic,
explosive, corrosive, flammable, infectious, radioactive, carcinogenic,
mutagenic or otherwise hazardous and which is or becomes regulated pursuant
to
any Environmental Law by any Governmental Authority, agency, department,
commission, board, agency or instrumentality of the United States, any state
of
the United States, or any political subdivision thereof; or (iv) without
limitation, which contains gasoline, diesel fuel or other petroleum products,
asbestos or polychlorinated biphenyls (“PCB’s”).
Hazardous
Materials Indemnity Agreement. The Hazardous Materials Indemnity
Agreement, dated as of the date hereof, made by the Borrower and the Guarantors
in favor of the Lender, as amended and in effect from time to time.
Indebtedness. As
to any Person at a particular time, without duplication, all of the following,
whether or not included as indebtedness or liabilities in accordance with
GAAP:
(a) all obligations of such Person for borrowed money and all obligations
of
such Person evidenced by bonds, debentures, notes, loan agreements or other
similar instruments; (b) the maximum amount of all direct or contingent
obligations of such Person arising under letters of credit (including standby
and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar
instruments; (c) net obligations of such Person under any Swap Agreement;
(d)
all obligations of such Person to pay the deferred purchase price of property
or
services (other than trade accounts payable in the ordinary course of business
and not past due for more than 60 days after the date on which such trade
account was created); (e) indebtedness (excluding prepaid interest thereon)
secured by an Encumbrance on property owned or being purchased by such Person
(including indebtedness arising under conditional sales or other title retention
agreements), whether or not such indebtedness shall have been assumed by
such
Person or is limited in recourse; (f) all Attributable Indebtedness in respect
of Capitalized Leases and Synthetic Lease Obligations of such Person and
all
Synthetic Debt of such Person; (g) all obligations of such Person to purchase,
redeem, retire, defease or otherwise make any payment in respect of any Equity
Interest in such Person or any other Person or any warrant, right or option
to
acquire such Equity Interest, valued, in the case of a redeemable preferred
interest, at the greater of its voluntary or involuntary liquidation preference
plus accrued and unpaid dividends; and (h) all Guarantees of such Person
in respect of any of the foregoing. For all purposes hereof, the Indebtedness
of
any Person shall include the Indebtedness of any partnership or joint venture
(other than a joint venture that is itself a corporation or limited liability
company) in which such Person is a general partner or a joint venturer, unless
such Indebtedness is expressly made non-recourse to such Person. The
amount of any net obligation under any Swap Agreement on any date shall be
deemed to be the Swap Termination Value thereof as of such date.
Indemnified
Taxes. All Taxes other than Excluded Taxes.
Intellectual
Property Security Agreement. See Section 4.1(a)(iv).
Interest
Period. With respect to each LIBOR Loan, the period commencing on
the date of the making or continuation of or conversion to such LIBOR Loan
and
ending one (1), two (2), three (3) or six (6) months thereafter, as the Borrower
may elect in the applicable Notice of Borrowing or Conversion; provided
that:
(i) any
Interest Period (other than an Interest Period determined pursuant to clause
(iii) below) that would otherwise end on a day that is not a Business Day
shall
be extended to the next succeeding Business Day unless such Business Day
falls
in the next calendar month, in which case such Interest Period shall end
on the
immediately preceding Business Day;
(ii) any
Interest Period that begins on the last Business Day of a calendar month
(or on
a day for which there is no numerically corresponding day in the calendar
month
at the end of such Interest Period) shall, subject to clause (iii) below,
end on
the last Business Day of a calendar month;
(iii) any
Interest Period that would otherwise end after the Maturity Date, shall end
on
the Maturity Date; and
(iv) notwithstanding
clause (iii) above, no Interest Period shall have a duration of less than
one
month, and if any Interest Period applicable to a Loan would be for a shorter
period, such Interest Period shall not be available hereunder.
Investment. As
applied to the Borrower and its Subsidiaries, the purchase or acquisition
of any
share of capital stock, partnership interest, evidence of indebtedness or
other
equity security of any other Person (including any Subsidiary), any loan,
advance or extension of credit (excluding accounts receivable arising in
the
ordinary course of business) to, or contribution to the capital of, any other
Person (including any Subsidiary), any real estate held for sale or investment,
any securities or commodities futures contracts held, any other investment
in
any other Person (including any other Subsidiary of the Borrower), and the
making of any commitment or acquisition of any option to make an
Investment.
IP
Rights. See Section 5.17.
LC
Disbursement. A payment made by the LC Issuer pursuant to a
Letter of Credit.
LC
Exposure. At any time, the sum of (a) the Maximum Drawing Amount
at such time, and (b) the aggregate LC Disbursements that at such time have
not
been reimbursed by or on behalf of the Borrower to the LC Issuer.
LC
Issuer. ▇▇▇▇▇ Fargo.
Lender. ▇▇▇▇▇
Fargo, and each other Person that may after the date hereof become an Assignee
and, thereby a party to this Agreement as a “Lender” hereunder, but from and
after the effective date that any Person shall have assigned its entire
Commitment pursuant to Section 10.1,
“Lender” shall no longer include such Person.
Letter
of Credit Applications. Applications for Letters of Credit in
such form as may be required by the LC Issuer from time to time which are
executed and delivered by the Borrower to the LC Issuer pursuant to Section
3.1,
as the same may be amended or supplemented from time to time.
Letter
of Credit Fee. See Section 2.5(b).
Letter
of Credit Sublimit. $1,500,000.
Letters
of Credit. See Section 3.1.
LIBOR
Loan. Any Loan bearing interest at a rate determined with
reference to the LIBOR Rate.
LIBOR
Rate. With respect to any LIBOR Loan for any Interest Period, the
rate per annum as determined by ▇▇▇▇▇ Fargo on the basis of the offered rates
for deposits in U.S. dollars, for a period of time comparable to such Interest
Period, which appears on the Reuters page LIBOR01 (formerly Telerate page
3750)
as of 11:00 a.m. London time on the day that is two Business Days preceding
the
Drawdown Date of such LIBOR Loan; provided, however, that if the rate described
above does not appear on the Reuters System on any applicable interest
determination date, the LIBOR Rate shall be the rate (rounded upward, if
necessary, to the nearest one hundred-thousandth of a percentage point)
determined on the basis of the offered rates for deposits in U.S. dollars
for a
period of time comparable to such Interest Period which are offered by four
major banks in the London interbank market at approximately 11:00 a.m. London
time, on the day that is two (2) Business Days preceding the first day of
such
Interest Period as selected by ▇▇▇▇▇ Fargo. The principal London
office of each of the four major London banks will be requested to provide
a
quotation of its U.S. dollar deposit offered rate. If at least two
such quotations are provided, the LIBOR Rate for that date will be the
arithmetic mean of the quotations. If fewer than two quotations are
provided as requested, the rate for that date will be determined on the basis
of
the rates quoted for loans in U.S. dollars to leading European banks for
a
period of time comparable to such Interest Period offered by major banks
in New
York City at approximately 11:00 a.m. New York City time, on the day that
is two
Business Days preceding the first day of such Interest Period.
Loan
Documents. This Agreement, the Note, the Letter of Credit
Applications, any Guaranties, the Eligible Swap Agreements, Secured Cash
Management Agreements, and the Security Documents, together with any agreements,
instruments or documents executed and delivered pursuant to or in connection
with any of the foregoing; provided that for purposes of the definition
of “Material Adverse Effect” and Sections V through IX, “Loan Documents” shall
not include Eligible Swap Agreements or Secured Cash Management
Agreements.
Loan
Parties. Collectively, the Borrower and each
Guarantor.
Maintenance
Capital Expenditures. Any Capital Expenditure that is not a
Growth Capital Expenditure.
Material
Adverse Effect. Any of (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, liabilities
(actual or contingent), condition (financial or otherwise) or prospects of
the
Borrower and its Subsidiaries taken as a whole; (b) a material impairment
of the
rights and remedies of the Lender under any Loan Document, or of the ability
of
any Loan Party to perform its obligations under any Loan Document to which
it is
a party; or (c) a material adverse effect upon the legality, validity, binding
effect or enforceability against any Loan Party of any Loan Document to which
it
is a party.
Maturity
Date. The third anniversary of the Closing Date.
Maximum
Drawing Amount. At any time, the aggregate undrawn amount of all
then outstanding Letters of Credit.
Measurement
Period. At any date of determination, the most recently completed
four Fiscal Quarters of the Borrower.
Multiemployer
Plan. Any Plan which is a Multiemployer Plan as defined in
Section 4001(a)(3) of ERISA.
Net
Cash Proceeds. With respect to:
(a) any
Disposition by the Borrower or any of its Subsidiaries, or any Extraordinary
Receipt received or paid to the account of the Borrower or any of its
Subsidiaries, the excess, if any, of (i) the sum of cash and Cash Equivalents
received in connection with such transaction (including any cash or Cash
Equivalents received by way of deferred payment pursuant to, or by monetization
of, a note receivable or otherwise, but only as and when so received) over
(ii)
the sum of (A) the principal amount of any Indebtedness that is secured by
the
applicable asset and that is required to be repaid in connection with such
transaction (other than Indebtedness under the Loan Documents), (B) the
reasonable and customary out-of-pocket expenses incurred by the Borrower
or a
Subsidiary in connection with such transaction and (C) income taxes reasonably
estimated to be actually payable within two years of the date of the relevant
transaction as a result of any gain recognized in connection therewith;
provided that, if the amount of any estimated taxes pursuant to subclause
(C) exceeds the amount of taxes actually required to be paid in cash in respect
of such Disposition, the aggregate amount of such excess shall constitute
Net
Cash Proceeds; and
(b) the
sale or issuance of any Equity Interest by the Borrower or any of its
Subsidiaries, or the incurrence or issuance of any Indebtedness by the Borrower
or any of its Subsidiaries, the excess of (i) the sum of the cash and Cash
Equivalents received in connection with such transaction over (ii) the
underwriting discounts and commissions, and other reasonable and customary
out-of-pocket expenses, incurred by the Borrower or such Subsidiary in
connection therewith.
New
Construction. Construction by the Borrower or any of its
Subsidiaries related to the opening of a new restaurant to be owned and operated
by the Borrower or any of its Subsidiaries or the meaningful expansion of
capacity at existing facilities of a restaurant owned and operated by the
Borrower or any of its Subsidiaries.
New
Operating Unit. A restaurant owned or operated by the Borrower or
any of its Subsidiaries whose ownership or operation by the Borrower or any
of
its Subsidiaries started on a date after the Closing Date.
Note
Record. Any internal record, including a computer record,
maintained by the Lender with respect to any Revolving Credit Loan.
Note. See
Section 2.2.
Notice
of Borrowing or Conversion. The notice, substantially in the form
of Exhibit B hereto, to be given by the Borrower to the Lender to request
a Revolving Credit Loan or to convert an outstanding Revolving Credit Loan
of
one Type into a Revolving Credit Loan of another Type, in accordance with
Section 2.3.
Obligations. The
following:
(a) the
due and punctual payment by the Borrower of (i) the principal of and
interest (including interest accruing during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding) on the Revolving Credit Loans, when
and
as due, whether at maturity, by acceleration, upon one or more dates set
for
prepayment or otherwise, (ii) each payment required to be made by the
Borrower in respect of any Letter of Credit, when and as due, including the
unreimbursed amount of any LC Disbursement, interest thereon (including interest
accruing during the pendency of any bankruptcy, insolvency, receivership
or
other similar proceeding, regardless of whether allowed or allowable in such
proceeding) and obligations to provide cash collateral, and (iii) all other
monetary obligations of the Borrower under this Agreement and under the other
Loan Documents (including, without limitation, under each Eligible Swap
Agreement and Secured Cash Management Agreement), including obligations to
pay
fees, expense reimbursement obligations and indemnification obligations,
whether
primary, secondary, direct, contingent, fixed or otherwise, arising under
the
Loan Documents (including monetary obligations incurred during the pendency
of
any bankruptcy, insolvency, receivership or other similar proceeding, regardless
of whether allowed or allowable in such proceeding), and
(b) the
due and punctual payment of all the monetary obligations of each other Loan
Party under or pursuant to this Agreement and each of the other Loan
Documents.
OFAC. The
U.S. Department of the Treasury’s Office of Foreign Assets Control.
Operating
Units. All restaurants operated by the Borrower or any of its
Subsidiaries, which for avoidance of doubt, shall include all New Operating
Units.
Other
Taxes All present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising from any
payment made hereunder or under any other Loan Document or from the execution,
delivery or enforcement of, or otherwise with respect to, this Agreement
or any
other Loan Document.
Participant. See
Section 10.2.
Patriot
Act. See Section 11.16.
PBGC. The
Pension Benefit Guaranty Corporation or any entity succeeding to any or all
of
its functions under ERISA.
Pension
Plan. Any Plan which is an “employee pension benefit plan” (as
defined in ERISA).
Permitted
Acquisition. An acquisition of all of the capital stock or all or
substantially all of the business and assets of an Acquired Person, whether
or
not involving a merger or consolidation with such Acquired Person, by the
Borrower or any Subsidiary of the Borrower that is a Guarantor on the date
of
such acquisition, provided that
(i)
the
Acquired Person is in substantially the same business as the Borrower or
the
acquiring Subsidiary of the Borrower (or any reasonable extensions or expansions
thereof) and any property acquired (or the property of the Acquired Person)
in
such acquisition is used or useful in the same business as the Borrower or
its
Subsidiaries were engaged in on the Closing Date (or any reasonable extensions
or expansions thereof);
(ii)
no
Indebtedness is assumed or incurred in connection with the acquisition other
than Indebtedness permitted under Section 8.1;
(iii)
the
total purchase price for any single acquisition shall not exceed
$1,500,000;
(iv)
the
aggregate purchase price for all acquisitions in any Fiscal Year shall not
exceed $3,000,000;
(v)
the
aggregate purchase price for all Permitted Acquisitions shall not exceed
$5,000,000;
(vi)
if a
merger, the Borrower or such Subsidiary is the surviving entity of such
transaction; and
(vii)
(A)
if the Acquired Person is to become a domestic Subsidiary, (I) the Borrower
shall cause such Acquired Person to become party to and bound by the Guaranty
and the Security Agreement, (II) the Lender shall have a valid, perfected,
first-priority security interest in the Collateral described in the Security
Agreement or other applicable Loan Document, to the extent a security interest
in the Collateral can be perfected by such filings or recordings or delivery,
in
each case subject only to Permitted Encumbrances, (III) the Borrower shall
cause
100% of the issued and outstanding capital stock or other equity interests
of
such Acquired Person to be delivered (if certificated) to the Lender (together
with undated stock or other equity interest powers signed in blank) and pledged
to the Lender pursuant to the Security Agreement and an appropriate pledge
agreement(s) in substantially the form of Exhibit G, and otherwise in
form and substance reasonably acceptable to the Lender, and the Lender, shall
have a perfected, first-priority security interest in 100% of such stock
or
other equity interest, (B) if the Acquired Person is to become a direct foreign
Subsidiary, cause 65% of the issued and outstanding capital stock or other
equity interests entitled to vote (within the meaning of Treas. Reg. Section
1.956-2(c)(2)) of such Acquired Person to be delivered (if certificated)
to the
Lender (together with undated stock or other equity interest powers signed
in
blank (unless, with respect to a foreign Subsidiary, such stock or other
equity
interest powers are deemed unnecessary by the Lender in its reasonable
discretion under the law of the jurisdiction of organization of such Acquired
Person)) and pledged to the Lender pursuant to the Security Agreement and
an
appropriate pledge agreement(s) in substantially the form of Exhibit G,
and otherwise in form and substance acceptable to the Lender and the Lender
shall have a perfected, first-priority security interest in 65% of such stock
or
other equity interests and (C) the Borrower shall cause any Acquired Person
to
deliver such other documentation as the Lender may reasonably request in
connection with the foregoing, including, without limitation, appropriate
UCC-1
financing statements.
Permitted
Encumbrances. See Section 8.3.
Person. Any
individual, corporation, partnership, trust, unincorporated association,
business or other legal entity, and any government or governmental agency
or
political subdivision thereof.
Plan. Any
“employee pension benefit plan” or “employee welfare benefit plan” (each as
defined in ERISA) maintained by the Borrower or any Subsidiary of the
Borrower.
Pro
Forma Financial Statements. See Section 4.1(e).
Prohibited
Acquisition. Any “prohibited transaction” within the meaning of
Section 406 of ERISA or Section 4975 of the Code.
Qualified
Investments. As applied to the Borrower and its Subsidiaries,
investments in (i) notes, bonds or other obligations of the United States
of
America or any agency thereof that as to principal and interest constitute
direct obligations of or are guaranteed by the United States of America and
that
have maturity dates not more than one year from the date of acquisition,
(ii)
certificates of deposit, demand deposit accounts or other deposit instruments
or
accounts maintained in the ordinary course of business with banks or trust
companies organized under the laws of the United States or any state thereof
that have capital and surplus of at least $500,000,000 which certificates
of
deposit and other deposit instruments, if not payable on demand, have maturities
of not more than one year from the date of acquisition, (iii) commercial
paper
that is rated not less than prime-one or A-1 or their equivalents by ▇▇▇▇▇’▇
Investors Service, Inc. or Standard & Poor’s Corporation, respectively, or
their successors, and in each case maturing not more than one year from the
date
of acquisition, (iv) any repurchase agreement secured by any one or more
of the
foregoing.
Regulations
T, U and X. See Section 6.7(b).
Related
Parties. With respect to any Person, such Person’s Affiliates and
the partners, directors, officers, employees, agents and advisors of such
Person
and of such Person’s Affiliates.
Reserve
Percentage. For any Interest Period, the aggregate of the maximum
reserve percentages (including all basic, marginal, special, emergency and
supplemental reserves), expressed as a decimal, established by the Board
of
Governors of the Federal Reserve System and any other banking authority,
domestic or foreign, to which the Lender is subject with respect to
“Eurocurrency Liabilities” (as defined in regulations issued from time to time
by such Board of Governors). The Reserve Percentage shall be adjusted
automatically on and as of the effective date of any change in any such reserve
percentage.
Responsible
Officer. The chief executive officer, president, chief financial
officer, treasurer, controller or general partner of a Loan
Party. Any document delivered hereunder that is signed by a
Responsible Officer of a Loan Party shall be conclusively presumed to have
been
authorized by all necessary corporate, partnership and/or other action on
the
part of such Loan Party and such Responsible Officer shall be conclusively
presumed to have acted on behalf of such Loan Party.
Restricted
Payment. Any of the following: (a) any dividend, distribution,
loan, advance, guaranty, extension of credit or other payment, whether in
cash
or property to or for the benefit of any Person who holds an equity interest
in
the Borrower or any of its Subsidiaries, whether or not such interest is
evidenced by a security, and any purchase, redemption, retirement or other
acquisition for value of any capital stock of the Borrower or any of its
Subsidiaries, whether now or hereafter outstanding, or of any options, warrants
or similar rights to purchase such capital stock or any security convertible
into or exchangeable for such capital stock and (b) any payment or prepayment
of
any kind, whether in cash or property, to or for the benefit of any Person
(other than the Borrower) that is an Affiliate of the Borrower or any of
its
Subsidiaries.
Revolving
Credit Loans. See Section 2.1(a)(i).
Revolving
Credit Outstandings. At any time, the sum of (i) the aggregate
outstanding principal balance of the Revolving Credit Loans at the time and
(ii)
the LC Exposure at the time.
Sanctioned
Country. A country subject to a sanctions program identified on
the list maintained by OFAC and available at
▇▇▇▇://▇▇▇.▇▇▇▇▇.▇▇▇/▇▇▇▇▇▇▇/▇▇▇▇▇▇/▇▇▇▇/▇▇▇▇▇▇▇▇▇/ index.html, or as
otherwise published from time to time.
Sanctioned
Person. Any of the following: (i) a Person named on
the list of “Specially Designated Nationals and Blocked Persons” maintained by
OFAC available at ▇▇▇▇://▇▇▇.▇▇▇▇▇.▇▇▇/▇▇▇▇▇▇▇/
eotffc/ofac/sdn/index.html, or as otherwise published from time to time, or
(ii) (A) an agency of the government of a Sanctioned Country, (B) an
organization controlled by a Sanctioned Country, or (C) a person resident
in a
Sanctioned Country, to the extent subject to a sanctions program administered
by
OFAC.
Secured
Cash Management Agreement. Any Cash Management Agreement entered
into between the Borrower and any Cash Management Bank.
Secured
Parties. Collectively, the Lender, the LC Issuer, the Swap Banks,
the Cash Management Banks, and the other Persons the Obligations owing to
which
are or are purported to be secured by the Collateral under the terms of the
Security Documents.
Security
Agreement. See Section 4.1(a)(iii).
Security
Documents. The Security Agreement, the Intellectual Property
Security Agreement, the Hazardous Materials Indemnity Agreement, and the
deposit
account control agreements referenced in Section Error! Reference source
not found., each in favor of the Lender to secure Obligations, in each
case as amended and/or restated and in effect from time to time, and any
additional documents evidencing or perfecting the Lender’s lien on the
Collateral.
Solvent
and Solvency. With respect to any Person on any date of
determination, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including contingent
liabilities, of such Person, (b) the present fair salable value of the
assets of such Person is not less than the amount that will be required to
pay
the probable liability of such Person on its debts as they become absolute
and
matured, (c) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person’s ability to pay such debts
and liabilities as they mature, (d) such Person is not engaged in business
or a transaction, and is not about to engage in business or a transaction,
for
which such Person’s property would constitute an unreasonably small capital, and
(e) such Person is able to pay its debts and liabilities, contingent obligations
and other commitments as they mature in the ordinary course of
business. The amount of contingent liabilities at any time shall be
computed as the amount that, in the light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected
to
become an actual or matured liability.
Subordinated
Debt. Indebtedness of the Borrower or any other Subsidiaries
which is expressly subordinated and made junior to the payment and performance
in full of the Obligations on terms and conditions satisfactory to the
Lender.
Subsidiary. With
respect to any Person means a corporation, partnership, joint venture, limited
liability company or other business entity of which a majority of the shares
of
securities or other interests having ordinary voting power for the election
of
directors or other governing body (other than securities or interests having
such power only by reason of the happening of a contingency) are at the time
beneficially owned, or the management of which is otherwise controlled,
directly, or indirectly through one or more intermediaries, or both, by such
Person. Unless otherwise specified, all references herein to a
“Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or
Subsidiaries of the Borrower.
Swap
Agreement. Any and all (a) rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps
or
options, bond or bond price or bond index swaps or options or forward bond
or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction
is
governed by or subject to any master agreement, and (b) transactions of any
kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by
the
International Swaps and Derivatives Association, Inc., any International
Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a “Master Agreement”),
including any such obligations or liabilities under any Master
Agreement.
Swap
Bank. Any Person that at the time it entered into an Eligible
Swap Agreement was the Lender or an Affiliate of the Lender, in its capacity
as
a party to that Eligible Swap Agreement.
Swap
Termination Value. In respect of any one or more Swap Agreements,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Agreements, (a) for any date on or after
the
date such Swap Agreements have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for
any
date prior to the date referenced in clause (a), the amount(s) determined
as the
▇▇▇▇-to-market value(s) for such Swap Agreements, as determined based upon
one
or more mid-market or other readily available quotations provided by any
recognized dealer in such Swap Agreements (which may include the Lender or
any
Affiliate of the Lender).
Synthetic
Debt. With respect to any Person as of any date of determination
thereof, all obligations of such Person in respect of transactions entered
into
by such Person that are intended to function primarily as a borrowing of
funds
(including any minority interest transactions that function primarily as
a
borrowing) but are not otherwise included in the definition of
“Indebtedness” or as a liability on the consolidated balance sheet of
such Person and its Subsidiaries in accordance with GAAP.
Synthetic
Lease Obligation. The monetary obligation of a Person under (a) a
so-called synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of property (including sale and leaseback
transactions), in each case, creating obligations that do not appear on the
balance sheet of such Person but which, upon the application of any bankruptcy
or similar law to such Person, would be characterized as the indebtedness
of
such Person (without regard to accounting treatment).
Taxes All
present or future taxes, levies, imposts, duties, deductions, withholdings,
assessments, fees or other charges imposed by any Governmental Authority,
including any interest, additions to tax or penalties applicable
thereto.
Total
Leverage Ratio. As of the end of any Measurement Period, the
ratio of Consolidated Funded Indebtedness as of the end of such Measurement
Period to Consolidated EBITDA for such Measurement Period.
Type. A
LIBOR Loan or a Base Rate Loan.
▇▇▇▇▇
Fargo. See Preamble.
1.2 Rules
of Interpretation.
(a) All
terms
of an accounting character used herein but not defined herein shall have
the
meanings assigned thereto by GAAP applied on a consistent basis. All
calculations for the purposes of Section VII hereof shall be made in accordance
with GAAP.
(b) A
reference to any document or agreement shall include such document or agreement
as amended, modified or supplemented and in effect from time to time in
accordance with its terms and the terms of this Agreement.
(c) The
singular includes the plural and the plural includes the
singular. Whenever the context may require, any pronoun shall include
the corresponding masculine, feminine and neuter forms.
(d) A
reference to any Person includes its permitted successors and permitted
assigns.
(e) The
words
“include”, “includes” and “including” are not limiting.
(f) The
words
“herein”, “hereof”, “hereunder” and words of like import shall refer to this
Agreement as a whole and not to any particular section or subdivision of
this
Agreement.
(g) All
terms
not specifically defined herein or by GAAP, which terms are defined in the
Uniform Commercial Code as in effect in The State of New York, shall have
the
meanings assigned to them in such Uniform Commercial Code.
SECTION
II
DESCRIPTION
OF CREDIT
2.1 Revolving
Credit Loans.
(a) Loans.
(i) Upon
the
terms and subject to the conditions of this Agreement, and in reliance upon
the
representations, warranties and covenants of the Borrower herein, the Lender
agrees to make revolving credit loans (the “Revolving Credit Loans”) to
the Borrower at the Borrower’s request from time to time from and after the
Closing Date and prior to the Maturity Date, provided that the Total
Revolving Credit Outstandings (after giving effect to all requested Revolving
Credit Loans and Letters of Credit) shall not at any time exceed the
Commitment. Subject to the terms and conditions of this Agreement,
the Borrower may borrow, repay, prepay and reborrow amounts, up to the limits
imposed by this Section 2.1,
from time to time between the Closing Date and the Maturity Date upon request
given to the Lender pursuant to Section 2.3. Each
request for a Revolving Credit Loan or a Letter of Credit hereunder shall
constitute a representation and warranty by the Borrower that the conditions
set
forth in Sections 4.1
or 4.2
(as the case may be) have been satisfied as of the date of such
request.
(ii) The
Borrower may (A) request the Lender to increase the amount of its Commitment
(which request shall be in writing and sent to the Lender) by an amount not
to
exceed $5,000,000 in the aggregate. In no event may the Lender’s
Commitment be increased without the prior written consent of the Lender,
and the
failure of the Lender to respond to the Borrower’s request for an increase shall
be deemed a rejection by the Lender of the Borrower’s request. The
Commitment may not be increased if, at the time of any proposed increase
hereunder, a Default has occurred and is continuing. Upon any request
by the Borrower to increase the Commitment, the Borrower shall be deemed
to have
represented and warranted on and as of the date of such request that no Default
has occurred and is continuing, giving effect to such
increase. Notwithstanding anything contained in this Agreement to the
contrary, the Lender shall have no obligation whatsoever to increase the
amount
of its Commitment, and the Lender may at its option, unconditionally and
without
cause, decline to increase its Commitment. If the Lender is willing,
in its sole and absolute discretion, to increase the amount of its Commitment
hereunder, it shall enter into a written agreement to that effect with the
Borrower, substantially in the form of Exhibit C (a “Commitment
Increase Supplement”), which agreement shall specify, among other things,
the amount of the increased Commitment of the Lender.
(iii) In
no
event shall an increase in the Lender’s Commitment which would result in the
Commitment exceeding the amount which is authorized at such time in resolutions
previously delivered to the Lender become effective until the Lender shall
have
received a copy of the resolutions, in form and substance reasonably
satisfactory to the Lender, of the board of directors of the Borrower
authorizing the borrowings contemplated pursuant to such increase, certified
by
the secretary or an assistant secretary of the
Borrower. Notwithstanding anything herein to the contrary, in no
event may the Commitment be increased hereunder unless (A) giving effect
to such
increase (and assuming the Commitment, as so increased, is fully utilized
by the
Borrower), no Default will have occurred and be continuing and the Borrower
will
be in compliance on a pro forma basis with all financial covenants under
Section
VII and (B) the Lender shall have received a certificate of a Responsible
Officer certifying that the condition in clause (A) has been satisfied (with
calculations demonstrating compliance with such financial covenants on a
pro
forma basis, in reasonable detail).
(b) Limitations. Each
LIBOR Loan shall be in a minimum principal amount of $500,000 or in integral
multiples of $100,000 in excess of such minimum amount, and each Base Rate
Loan
shall be in a minimum principal amount of $100,000 or in integral multiples
of
$100,000 in excess of such minimum amount. No more than five (5)
LIBOR Loans may be outstanding at any time.
(c) Conversions
of Loans. Upon the terms and subject to the conditions and
limitations of this Agreement, the Borrower may convert all or any part of
any
outstanding Revolving Credit Loan into a Revolving Credit Loan of another
Type
on any Business Day (which, in the case of a conversion of an outstanding
LIBOR
Loan shall be the last day of the Interest Period applicable to such LIBOR
Loan). The Borrower shall give the Lender prior notice of each such
conversion (which notice shall be effective upon receipt) in accordance with
Section 2.3. Notwithstanding
the foregoing, the Borrower may not convert any Revolving Credit Loan into
a
LIBOR Loan or continue a LIBOR Loan if there is a continuing
Default.
(d) Termination
or Reduction of Commitments.
(i) The
Commitment shall terminate on the Maturity Date.
(ii) The
Borrower shall have the right at any time and from time to time upon five
(5)
Business Days’ prior written notice to the Lender to reduce by $500,000, and in
integral multiples of $100,000 if in excess thereof, the Commitment or to
terminate entirely the Lender’s Commitment to make Revolving Credit Loans
hereunder, whereupon the Commitment of the Lender shall be reduced by the
aggregate amount specified in such notice or shall, as the case may be, be
terminated entirely.
(iii) If,
as a
result of any such reduction of the Commitment, the LC Exposure at the time
would exceed the Commitment or the amount of Letters of Credit permitted
to be
outstanding under Sections 2.1(a)
and 3.1,
the Borrower shall, in connection with any such reduction, deposit with and
pledge to the Lender and the LC Issuer cash in an amount equal to 105% of
such
excess. If any Letters of Credit would remain outstanding after the
effective date of any such termination of the Commitment, in addition to
satisfaction of all other applicable terms and conditions of this Agreement,
the
Borrower shall deposit with and pledge to the Lender and the LC Issuer cash
in
an amount equal to 105% of the Maximum Drawing Amount of under all Letters
of
Credit at the effective date of such termination.
(iv) No
such
reduction or termination of any Commitment may be reinstated.
2.2 The
Note.
(a) The
Revolving Credit Loans shall be evidenced by a promissory note to be in
substantially the form of Exhibit A hereto, dated as of the Closing Date
and completed with appropriate insertions (such note being referred to herein
as
the “Note”). The Note shall be payable to the order of the
Lender in a principal amount equal to the Lender’s Commitment.
(b) The
Borrower irrevocably authorizes the Lender to make or cause to be made, at
or
about the time of the Drawdown Date of any Revolving Credit Loan or at the
time
of receipt of any payment of principal on the Note, an appropriate notation
on
its Note Record reflecting (as the case may be) the making of such Revolving
Credit Loan or the receipt of such payment. The outstanding amount of
the Revolving Credit Loans set forth on the Note Record shall be prima
facie evidence of the principal amount thereof owing and unpaid to the
Lender, absent manifest error, but the failure to record, or any error in
so
recording, any such amount on the Lender’s Note Record shall not limit or
otherwise affect the obligations of the Borrower hereunder or under any Note
to
make payments of principal of or interest on the Note when due.
2.3 Notice
and Manner of Borrowing or Conversion of Revolving Credit
Loans.
(a) Whenever
the Borrower desires to obtain or continue a Revolving Credit Loan hereunder
or
convert an outstanding Revolving Credit Loan into a Revolving Credit Loan
of
another Type, the Borrower shall give the Lender a telephonic notice promptly
confirmed by a written Notice of Borrowing or Conversion, which telephonic
notice shall be irrevocable and which must be received no later than 11:00
a.m.
Pacific time on the date (i) one Business Day before the day on which the
requested Revolving Credit Loan is to be made as or converted to a Base Rate
Loan, and (ii) three Business Days before the day on which the requested
Revolving Credit Loan is to be made or continued as or converted to a LIBOR
Loan. Such Notice of Borrowing or Conversion shall specify (i) the
effective date and amount of each Revolving Credit Loan or portion thereof
requested to be made, continued or converted, subject to the limitations
set
forth in Section 2.1,
(ii) the interest rate option requested to be applicable thereto, and (iii)
the
duration of the applicable Interest Period, if any (subject to the provisions
of
the definition of the term “Interest Period”). If such Notice fails
to specify the interest rate option to be applicable to the requested Revolving
Credit Loan, then the Borrower shall be deemed to have requested a Base Rate
Loan. If the written confirmation of any telephonic notification
differs in any material respect from the action taken by the Lender, the
records
of the Lender shall be prima facie evidence of terms of the Revolving
Credit Loan requested absent manifest error.
(b) Subject
to the provisions of the definition of the term “Interest Period” herein, the
duration of each Interest Period for a LIBOR Loan shall be as specified in
the
applicable Notice of Borrowing or Conversion. If no Interest Period
is specified in a Notice of Borrowing or Conversion with respect to a requested
LIBOR Loan, then the Borrower shall be deemed to have selected an Interest
Period of one month’s duration. If the Lender receives a Notice of
Borrowing or Conversion after the time specified in subsection (a) above,
such
Notice shall not be effective. If the Lender does not receive an
effective Notice of Borrowing or Conversion with respect to an outstanding
LIBOR
Loan, or if, when such Notice must be given prior to the end of the Interest
Period applicable to such outstanding Revolving Credit Loan, the Borrower
shall
have failed to satisfy any of the conditions hereof, the Borrower shall be
deemed to have elected to convert such outstanding Revolving Credit Loan
in
whole into a Base Rate Loan on the last day of the then current Interest
Period
with respect thereto.
2.4 Interest
Rates and Payments of Interest.
(a) Each
Revolving Credit Loan which is a Base Rate Loan shall bear interest on the
outstanding principal amount thereof at a rate per annum equal to the Alternate
Base Rate plus the Applicable Margin, which rate shall change contemporaneously
with any change in the Alternate Base Rate or the Applicable Margin, as provided
below. Such interest shall be payable quarterly in arrears on the
first Business Day of each quarter.
(b) Each
Revolving Credit Loan which is a LIBOR Loan shall bear interest on the
outstanding principal amount thereof, for each Interest Period applicable
thereto, at a rate per annum equal to the LIBOR Rate plus the Applicable
Margin,
which rate shall change with any change in the Applicable Margin, as provided
below. Such interest shall be payable for such Interest Period on the
last day thereof and, if such Interest Period is longer than three months,
at
intervals of three months after the first day thereof.
(c) If
an
Event of Default shall occur, then (i) the unpaid balance of Revolving Credit
Loans shall bear interest, to the extent permitted by law, compounded daily
at
an interest rate equal to 2% per annum above the interest rate applicable
to
Base Rate Loans in effect on the day such Event of Default occurs, until
such
Event of Default is cured or waived, and (ii) the Maximum Drawing Amount
under
all outstanding Letters of Credit shall bear interest, to the extent permitted
by law, compounded daily at an interest rate of 2% per annum (in addition
to the
Letter of Credit Fee) until such Event of Default is cured or
waived.
(d) So
long
as the Lender shall be required under regulations of the Board of Governors
of
the Federal Reserve System (or any other banking authority, domestic or foreign,
to which the Lender is subject) to maintain reserves with respect to liabilities
or assets consisting of or including “Eurocurrency Liabilities” (as defined in
regulations issued from time to time by such Board of Governors), the Borrower
shall pay to the Lender additional interest on the unpaid principal amount
of
each LIBOR Loan made by the Lender from the date of such Revolving Credit
Loan
until such principal amount is paid in full, at an interest rate per annum
equal
at all times to the remainder (rounded upwards, if necessary, to the next
higher
1/100 of 1%) obtained by subtracting (i) the LIBOR Rate for the Interest
Period
for such LIBOR Loan from (ii) the rate obtained by dividing such LIBOR Rate
by a
percentage equal to 100% minus the Reserve Percentage of the Lender for such
Interest Period. Such additional interest shall be determined by the
Lender and notified to the Borrower, and shall be payable on each date on
which
interest is payable on such LIBOR Loan.
(e) All
agreements between or among the Borrower and the Lender are hereby expressly
limited so that in no contingency or event whatsoever, whether by reason
of
acceleration of maturity of the Obligations or otherwise, shall the amount
paid
or agreed to be paid to the Lender for the use or the forbearance of the
Obligations exceed the maximum permissible under applicable law. As
used herein, the term “applicable law” shall mean the law in effect as of the
date hereof provided, however, that in the event there is a change in the
law
which results in a higher permissible rate of interest, then the Loan Documents
shall be governed by such new law as of its effective date. In this
regard, it is expressly agreed that it is the intent of the Borrower and
the
Lender in the execution, delivery and acceptance of the Loan Documents to
contract in strict compliance with the laws of The State of New York from
time
to time in effect. If, under or from any circumstances whatsoever,
fulfillment of any provision of any of the Loan Documents at the time of
performance of such provision shall be due, shall involve transcending the
limit
of such validity prescribed by applicable law, then the Obligations to be
fulfilled shall automatically be reduced to the limits of such validity,
and if
under or from circumstances whatsoever the Lender should ever receive as
interest an amount which would exceed the highest lawful rate, such amount
which
would be excessive interest shall be applied to the reduction of the principal
balance of the Obligations and not to the payment of interest. This
provision shall control every other provision of all Loan
Documents.
2.5 Fees.
(a) The
Borrower shall pay to the Lender a commitment fee (the “Commitment Fee”),
computed on the basis of a 360-day year and payable quarterly in arrears
on the
first Business Day of each quarter, at a rate per annum equal to the Applicable
Margin for Commitment Fees multiplied by the excess of (i) the Commitment
at the
time over (ii) the Total Revolving Credit Outstandings from time to
time.
(b) The
Borrower shall pay to the Lender a fee (the “Letter of Credit Fee”) at a
rate per annum equal to (i) the Maximum Drawing Amount under each Letter
of
Credit multiplied by (ii) the Applicable Margin for Letter of Credit
Fees. The Borrower shall also pay to the LC Issuer for its own
account a fronting fee (the “Fronting Fee”) at a rate per annum equal to
one-quarter of one percent (1/4%) of the Maximum Drawing Amount under all
Letter
of Credit. The Letter of Credit Fee and the Fronting Fee shall be
paid quarterly in arrears on the last Business Day of each calendar
quarter.
(c) Without
limiting any of the Lender’s other rights hereunder or by law, if any Revolving
Credit Loan or any portion thereof or any interest thereon or any other amount
payable hereunder or under any other Loan Document is not paid within ten
(10)
days after its due date, the Borrower shall pay to the Lender on demand a
late
payment charge equal to 5% of the amount of the payment due.
(d) The
Borrower authorizes the Lender to charge to its Note Records or to any deposit
account which the Borrower may maintain with the Lender the interest, fees,
charges, taxes and expenses provided for in this Agreement, the other Loan
Documents or any other document executed or delivered in connection herewith
or
therewith. The Lender (with respect to any deposit account held by
the Lender) shall provide to the Borrower written notice of any such charge
promptly following such charge.
2.6 Repayment
of Revolving Credit Loans. The Borrower shall repay to the Lender
on the Maturity Date the aggregate principal amount of all Revolving Credit
Loans outstanding on such date, together with all accrued and unpaid interest,
fees and other charges hereunder.
2.7 Prepayments. (a) Optional. The
Borrower may, upon notice to the Lender in substantially the form of Exhibit
K at any time or from time to time voluntarily prepay the Revolving Credit
Loans in whole or in part without premium or penalty (except as provided
in
Section 2.9);
provided that (A) such notice must be received by the Lender not later
than 11:00 a.m. Pacific time (1) three Business Days prior to any date of
prepayment of LIBOR Loans and (2) on the date of prepayment of Base Rate
Loans;
(B) any prepayment of LIBOR Loans shall be in a principal amount of $100,000
or
a whole multiple of $100,000 in excess thereof; and (C) any prepayment of
Base
Rate Loans shall be in a principal amount of $100,000 or a whole multiple
of
$100,000 in excess thereof or, in each case, if less, the entire principal
amount thereof then outstanding. Each such notice shall specify the
date and amount of such prepayment and the Type(s) of Revolving Credit Loans
to
be prepaid and, if LIBOR Loans are to be prepaid, the Interest Period(s)
of such
Revolving Credit Loans. If such notice is given by the Borrower, the
Borrower shall make such prepayment and the payment amount specified in such
notice shall be due and payable on the date specified therein. Any
prepayment of a Revolving Credit Loan shall be accompanied by all accrued
interest on the amount prepaid, and if such Revolving Credit Loan is a LIBOR
Loan, any additional amounts required pursuant to Section 2.9.
(b) Mandatory.
(i) Within
the earlier of (x) 95 days after the end of each Fiscal Year (commencing
with
the Fiscal Year ending on January 1, 2007), or (y) five Business Days after
financial statements have been delivered pursuant to Section 6.1(a)
and the related certificate has been delivered pursuant to Section 6.1(d)
for such Fiscal Year, the Borrower shall prepay an aggregate principal amount
of
Revolving Credit Loans equal to fifty (50%) of Excess Cash Flow for the Fiscal
Year covered by such financial statements (such prepayments to be applied
as set
forth in clause (v)
and below), provided that no such prepayment will be required with respect
to
any Fiscal Year if the Borrower’s Total Leverage Ratio at the end of such Fiscal
Year is less than 1.50:1.00.
(ii) If
the
Borrower or any of its Subsidiaries Disposes of any property (other than
any
Disposition of any property permitted by clause (i)
of Section 8.4(b))
which results in the realization by such Person of Net Cash Proceeds, the
Borrower shall prepay an aggregate principal amount of Revolving Credit Loans
equal to 100% of such Net Cash Proceeds immediately upon receipt thereof
by such
Person (such prepayments to be applied as set forth in clause (v)below).
(iii) Upon
the
incurrence or issuance by the Borrower or any of its Subsidiaries of any
Indebtedness (other than Indebtedness expressly permitted to be incurred
or
issued pursuant to clauses (a) - (g), inclusive, of Section 8.1),
the Borrower shall prepay an aggregate principal amount of Revolving Credit
Loans equal to 100% of all Net Cash Proceeds received therefrom promptly
upon
receipt thereof by the Borrower or such Subsidiary (such prepayments to be
applied as set forth in clause (v)
below).
(iv) Upon
any
Extraordinary Receipt received by or paid to or for the account of the Borrower
or any of its Subsidiaries, and not otherwise included in clause (ii), (iii)
or
(iv) of this Section 2.7(b),
the Borrower shall prepay an aggregate principal amount of Revolving Credit
Loans equal to 100% of all Net Cash Proceeds received therefrom immediately
upon
receipt thereof by the Borrower or such Subsidiary (such prepayments to be
applied as set forth in clause (v)
and below); provided, however, that with respect to any proceeds
of insurance or condemnation or eminent domain awards (or payments in lieu
thereof), at the election of the Borrower (as notified by the Borrower to
the
Lender on or prior to the date of receipt of such insurance proceeds,
condemnation awards or indemnity payments), and so long as no Default shall
have
occurred and be continuing, the Borrower or such Subsidiary may apply such
cash
proceeds within one year after the receipt thereof to replace or repair the
equipment, fixed assets or real property in respect of which such cash proceeds
were received; and provided, further, however, that any
cash proceeds not so applied shall be immediately applied to the prepayment
of
the Revolving Credit Loans as set forth in this Section 2.7(b)(iv).
(v) Each
prepayment of Revolving Credit Loans pursuant to the foregoing provisions
of
this Section 2.7(b)
shall be applied as follows: first, ratably to any unpaid LC
Disbursements, and second, to the outstanding Revolving Credit Loans; and
the amount remaining, if any, after the prepayment in full of all LC
Disbursements and Revolving Credit Loans outstanding at such time may be
retained by the Borrower for use in the ordinary course of its
business.
(vi) If
for
any reason the Total Revolving Credit Outstandings at any time exceed the
Commitment at such time, the Borrower shall immediately prepay Revolving
Credit
Loans and LC Disbursements and/or Cash Collateralize the Maximum Drawing
Amount,
in an aggregate amount equal to such excess.
2.8 Method
and Application of Payments.
(a) All
payments by the Borrower hereunder and under any of the other Loan Documents
shall be made in lawful money of the United States in immediately available
funds, and shall be deemed to have been made only when made in compliance
with
this Section 2.8. All such payments shall be made without set-off or
counterclaim and free and clear of and without deduction for any taxes, levies,
imposts, duties, charges, fees, deductions, withholdings, compulsory loans,
restrictions or conditions of any nature (other than Excluded Taxes) now
or
hereafter imposed or levied by any jurisdiction or any political subdivision
thereof or taxing or other authority therein unless the Borrower is compelled
by
law to make such deduction or withholding. If any such obligation is
imposed upon the Borrower with respect to any amount payable by it hereunder
or
under any of the other Loan Documents, the Borrower will pay to the Lender
such
additional amount in U.S. Dollars as shall be necessary to enable the Lender
to
receive the same net amount which the Lender would have received on such
due
date had no such obligation been imposed upon the Borrower. The
Borrower will deliver promptly to the Lender certificates or other valid
vouchers or other evidence of payment reasonably satisfactory to the Lender
for
all taxes or other charges deducted from or paid with respect to payments
made
by the Borrower hereunder or under such other Loan Document. The
Lender may, and the Borrower hereby authorizes the Lender to, debit the amount
of any payment not made by such time to the demand deposit accounts of the
Borrower with the Lender or to its Note Records.
(b) All
such
payments shall be made at the Lender’s head office or at such other location
that the Lender may from time to time designate, in each case in immediately
available funds.
(c) If
the
Commitments shall have been terminated or the Obligations shall have been
declared immediately due and payable pursuant to Section 9.2,
proceeds of Collateral and all other funds received from or on behalf of
the
Borrower by the Lender or the LC Issuer in respect of Obligations shall be
remitted to the Lender, and all such funds, together with all other funds
received by the Lender from or on behalf of the Borrower (including proceeds
of
Collateral) in respect of Obligations, shall be applied by the Lender in
the
following manner and order: (i) first, to reimburse the Lender and
the LC Issuer, in that order, for any amounts payable pursuant to Sections
11.2
and 11.3
hereof; (ii) second, to the payment of Commitment Fees, Letter of Credit
Fees,
and any other fees payable to the Lender hereunder; (iii) third, to the payment
of interest due on the Revolving Credit Loans and the LC Disbursements; (iv)
fourth, to the payment of the outstanding principal balance of the Revolving
Credit Loans; (v) fifth, to the payment of any other Obligations payable
by the
Borrower, pro rata to the outstanding principal balance of each; and (vi)
any remaining funds shall be paid to whoever shall be entitled thereto or
as a
court of competent jurisdiction shall direct.
2.9 LIBOR
Indemnity. If the Borrower for any reason makes any payment of
principal with respect to any LIBOR Loan on any day other than the last day
of
an Interest Period applicable to such LIBOR Loan, or fails to borrow or continue
or convert to a LIBOR Loan after giving a Notice of Borrowing or Conversion
thereof pursuant to Section 2.3,
or fails to prepay a LIBOR Loan after having given notice thereof, the Borrower
shall pay to the Lender any amount required to compensate the Lender for
any
additional losses, costs or expenses which they may reasonably incur as a
result
of such payment or failure, including, without limitation, any loss (including
loss of anticipated profits), costs or expense incurred by reason of the
liquidation or re-employment of deposits or other funds required by the Lender
to fund or maintain such LIBOR Loan. Without limiting the foregoing,
the Borrower shall pay to the Lender a “yield maintenance fee” in an amount
computed as follows: the current rate for United States Treasury
securities (bills on a discounted basis shall be converted to a bond equivalent)
with a maturity date closest to the term chosen pursuant to the Fixed Rate
Election as to which the prepayment is made, shall be subtracted from the
interest rate applicable (pursuant to Section 2.4(b))
to each LIBOR Loan in effect at the time of prepayment. If the result
is zero or a negative number, there shall be no yield maintenance
fee. If the result is a positive number, then the resulting
percentage shall be multiplied by the amount of the principal balance being
prepaid. The resulting amount shall be divided by 360 and multiplied
by the number of days remaining in the term chosen pursuant to the Fixed
Rate
Election as to which the prepayment is made. Said amount shall be
reduced to present value calculated by using the above referenced United
States
Treasury securities rate and the number of days remaining in the term chosen
pursuant to the Fixed Rate Election as to which prepayment is
made. The resulting amount shall be the yield maintenance fee due to
the Lender upon the payment of a LIBOR Loan under the circumstances described
in
the first sentence of this Section. The Borrower shall pay such
amount upon presentation by the Lender of a statement setting forth the amount
and the Lender’s calculation thereof pursuant hereto, which statement shall be
prima facie evidence of the amounts owed hereunder absent manifest
error. If the Obligations are declared immediately due and payable
pursuant to Section 8.2, then any amount provided for in this Section shall
be
due and payable in the same manner as though the Borrower had made a prepayment
of the LIBOR Loans.
2.10 Computation
of Interest and Fees. All computations of interest for Base Rate
Loans when the Alternate Base Rate is determined by ▇▇▇▇▇ Fargo’s “Base Rate”
shall be made on the basis of a year of 365 or 366 days, as the case may
be, and
actual days elapsed. All other computations of fees and interest
shall be made on the basis of a 360-day year and actual days elapsed (which
results in more fees or interest, as applicable, being paid than if computed
on
the basis of a 365-day year). If the due date for any payment of
principal is extended by operation of law, interest shall be payable for
such
extended time. If any payment required by this Agreement becomes due
on a day that is not a Business Day such payment may be made on the next
succeeding Business Day (subject to the definition of the term “Interest
Period”), and such extension shall be included in computing interest in
connection with such payment.
2.11 Changed
Circumstances; Illegality.
(a) Notwithstanding
any other provision of this Agreement, in the event that:
(i) on
any
date on which the LIBOR Rate would otherwise be set the Lender shall have
determined in good faith (which determination shall be final and conclusive)
that adequate and fair means do not exist for ascertaining the LIBOR Rate,
or
(ii) at
any
time the Lender shall have determined in good faith (which determination
shall
be final and conclusive) that:
(A) the
making or continuation of or conversion of any Revolving Credit Loan to a
LIBOR
Loan has been made impracticable or unlawful by (1) the occurrence of a
contingency that materially and adversely affects the interbank LIBOR market
or
(2) compliance by the Lender in good faith with any applicable law or
governmental regulation, guideline or order or interpretation or change thereof
by any Governmental Authority charged with the interpretation or administration
thereof or with any request or directive of any such Governmental Authority
(whether or not having the force of law); or
(B) the
LIBOR
Rate shall no longer represent the effective cost to the Lender for U.S.
dollar
deposits in the interbank market for deposits in which it regularly
participates;
then,
and
in any such event, the Lender shall forthwith so notify the Borrower
thereof. Until the Lender notifies the Borrower that the
circumstances giving rise to such notice no longer apply, the obligation
of the
Lender to allow selection by the Borrower of the Type of Revolving Credit
Loan
affected by the contingencies described in this Section (herein called
“Affected Loans”) shall be suspended. If at the time the
Lender so notifies the Borrower, the Borrower has previously given the Lender
a
Notice of Borrowing or Conversion with respect to one or more Affected Loans
but
such Revolving Credit Loans have not yet gone into effect, such notification
shall be deemed to be a request for Base Rate Loans.
(b) In
the
event of a determination of illegality pursuant to Section 2.11(a)(ii)(A)
above, the Borrower shall, with respect to the outstanding Affected Loans,
prepay the same, together with interest thereon and any amounts required
to be
paid pursuant to Section 2.88,
on such date as shall be specified in such notice (which shall not be earlier
than the date such notice is given) and may, subject to the conditions of
this
Agreement, borrow a Revolving Credit Loan of another Type in accordance with
Section 2.1
by giving a Notice of Borrowing or Conversion pursuant to Section 2.3.
2.12 Increased
Costs. In case any change made after the Closing Date in any law,
regulation, treaty or official directive or the interpretation or application
thereof by any court or by any Governmental Authority charged with the
administration thereof or the compliance with any guideline or request of
any
central bank or other Governmental Authority (whether or not having the force
of
law):
(i) subjects
the Lender or the LC Issuer to any tax with respect to payments of principal
or
interest or any other amounts payable hereunder by the Borrower or otherwise
with respect to the transactions contemplated hereby (except for Indemnified
Taxes or Other Taxes covered by Section 2.144
and the imposition of, or any change in the rate of, and Excluded Tax payable
by
the Lender or the LC Issuer), or
(ii) imposes,
modifies or deems applicable any deposit insurance, reserve, special deposit
or
similar requirement against assets held by, or deposits in or for the account
of, or credit extended or participated in by, the Lender (other than such
requirements as are already included in the determination of the LIBOR Rate)
or
the LC Bank, or
(iii) imposes
upon the Lender or the Issuing Bank any other condition with respect to its
obligations or performance under this Agreement or in respect of any Letter
of
Credit,
and
the
result of any of the foregoing is to increase the cost to the Lender or the
LC
Issuer, reduce the income receivable by the Lender or the LC Issuer or impose
any expense upon the Lender or the LC Issuer with respect to any Revolving
Credit Loans or its obligations under this Agreement or in respect of any
Letter
of Credit, the Lender or the LC Issuer shall notify the Borrower and the
Lender
thereof. The Borrower agrees to pay to the Lender or the LC Issuer
the amount of such increase in cost, reduction in income or additional expense
as and when such cost, reduction or expense is incurred or determined, upon
presentation by the Lender or the LC issuer of a statement in the amount
and
setting forth in reasonable detail the Lender’s or the LC Issuer’s calculation
thereof and the assumptions upon which such calculation was based, which
statement shall be prima facie evidence of the amounts owing hereunder
absent manifest error.
2.13 Capital
Requirements. If after the date hereof the Lender determines that
(i) the adoption of or change in any law, rule, regulation or guideline
regarding capital requirements for banks or bank holding companies, or any
change in the interpretation or application thereof by any Governmental
Authority charged with the administration thereof, or (ii) compliance by
the
Lender or its parent bank holding company with any guideline, request or
directive of any such entity regarding capital adequacy (whether or not having
the force of law), has the effect of reducing the return on the Lender’s or such
holding company’s capital as a consequence of the Lender’s Commitment to make
Revolving Credit Loans hereunder or its obligations in respect of any Letter
of
Credit to a level below that which the Lender or such holding company could
have
achieved but for such adoption, change or compliance (taking into consideration
the Lender’s or such holding company’s then existing policies with respect to
capital adequacy and assuming the full utilization of such entity’s capital) by
any amount deemed by the Lender to be material, then the Lender shall notify
the
Borrower and the Lender thereof. The Borrower agrees to pay to the
Lender the amount of such reduction of return on capital as and when such
reduction is determined, payable within 90 days after presentation by the
Lender
of a statement in the amount and setting forth in reasonable detail the Lender’s
calculation thereof and the assumptions upon which such calculation was based
(which statement shall be prima facie evidence of amounts payable
hereunder absent manifest error) unless within such 90 day period the Borrower
shall have prepaid in full all Obligations to the Lender, in which event
no
amount shall be payable to the Lender under this Section. In
determining such amount, the Lender may use any reasonable averaging and
attribution methods.
2.14 Taxes. (a) Payments
Free of Taxes. Any and all payments by or on account of any
obligation of the Borrower hereunder or under any other Loan Document shall
be
made free and clear of and without reduction or withholding for any Indemnified
Taxes or Other Taxes, provided that if the Borrower shall be required by
applicable law to deduct any Indemnified Taxes (including any Other Taxes)
from
such payments, then (i) the sum payable shall be increased as necessary so
that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Lender or the LC Issuer,
as the
case may be, receives an amount equal to the sum it would have received had
no
such deductions been made, (ii) the Borrower shall make such deductions and
(iii) the Borrower shall timely pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.
(b) Payment
of Other Taxes by the Borrower. Without limiting the provisions
of subsection (a) above, the Borrower shall timely pay any Other Taxes to
the
relevant Governmental Authority in accordance with applicable law.
(c) Indemnification
by the Borrower. The Borrower shall indemnify the Lender and the
LC Issuer, within 10 days after demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section)
paid by the Lender or the LC Issuer, as the case may be, and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability delivered to the
Borrower by the Lender or the LC Issuer (with a copy to the Lender), or by
the
Lender on its own behalf or on behalf of the Lender or the LC Issuer, shall
be
conclusive absent manifest error.
(d) Evidence
of Payments. Upon request of the Lender, as soon as practicable
after any payment of Indemnified Taxes or Other Taxes by the Borrower to
a
Governmental Authority, the Borrower shall deliver to the Lender the original
or
a certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence
of
such payment reasonably satisfactory to the Lender.
(e) Treatment
of Certain Refunds. If the Lender or the LC Issuer determines, in
its sole discretion, that it has received a refund of any Taxes or Other
Taxes
as to which it has been indemnified by the Borrower or with respect to which
the
Borrower has paid additional amounts pursuant to this Section, it shall pay
to
the Borrower an amount equal to such refund (but only to the extent of indemnity
payments made, or additional amounts paid, by the Borrower under this Section
with respect to the Taxes or Other Taxes giving rise to such refund), net
of all
out-of-pocket expenses of the Lender or the LC Issuer, as the case may be,
and
without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund), provided that the Borrower upon
the request of the Lender or the LC Issuer, agree to repay the amount paid
over
to the Borrower (plus any penalties, interest or other charges imposed by
the relevant Governmental Authority) to the Lender or the LC Issuer if the
Lender or the LC Issuer is required to repay such refund to such Governmental
Authority. This subsection shall not be construed to require the
Lender or the LC Issuer to make available its tax returns (or any other
information relating to its taxes that it deems confidential) to the Borrower
or
any other Person.
SECTION
III
LETTERS
OF CREDIT
3.1 Issuance. Upon
the terms and subject to the conditions hereof, the LC Issuer in reliance
upon
the representations and warranties of the Borrower contained herein, agrees
to
issue letters of credit (the “Letters of Credit”) for the account of the
Borrower in such form as may be requested from time to time by the Borrower
and
agreed to by the LC Issuer, provided that the Maximum Drawing Amount
(after giving effect to all requested Letters of Credit) shall not at any
time
exceed the Letter of Credit Sublimit, provided, further that the
Total Revolving Credit Outstandings (after giving effect to all requested
Revolving Credit Loans and Letters of Credit) shall not at any time exceed
the
Commitment, and provided further that no Letter of Credit shall have an
expiration date later than five (5) Business Days prior to the Maturity
Date. At least three (3) Business Days prior to the proposed issuance
date of any Letter of Credit, the Borrower shall deliver to the LC Issuer
a
Letter of Credit Application setting forth the Maximum Drawing Amount of
all
Letters of Credit (including the requested Letter of Credit), the requested
language of the requested Letter of Credit and such other information as
the LC
Issuer shall require. Each request for the issuance of a Letter of
Credit hereunder shall constitute a representation and warranty by the Borrower
that the conditions set forth in Sections 4.1
or 4.2
(as the case may be) have been satisfied as of the date of such
request.
3.2 Reimbursement
Obligation of the Borrower. In order to induce the LC Issuer to
issue, extend and renew each Letter of Credit, the Borrower hereby agrees
to
reimburse or pay to the Lender, for the account of the LC Issuer or (as the
case
may be) the Lender, with respect to each Letter of Credit issued, extended
or
renewed by the LC Issuer hereunder as follows:
(a) on
each
date that any draft presented under any Letter of Credit is honored by the
LC
Issuer or the LC Issuer otherwise makes payment with respect thereto, (i)
the
amount paid by the LC Issuer under or with respect to such Letter of Credit,
and
(ii) the amount of any taxes, fees, charges or other costs and expenses
whatsoever incurred by the LC Issuer or the Lender in connection with any
payment made by the LC Issuer under, or with respect to, such Letter of Credit;
and
(b) upon
the
Maturity Date or the acceleration of the Maximum Drawing Amount pursuant
to
Section 9.2,
an amount equal to 105% of the then Maximum Drawing Amount of all Letters
of
Credit, which amount shall be held by the LC Issuer as cash collateral for
all
LC Disbursements.
Each
such
payment shall be made to the Lender at its head office in immediately available
funds. Interest on any and all amounts remaining unpaid by the
Borrower under this Section 3.2
at any time from the date such amounts become due and payable (whether as
stated
in this Section 3.2,
by acceleration or otherwise) until payment in full (whether before or after
judgment) shall be payable to the Lender, for the account of LC Issuer or
(as
the case may be) the Lender, on demand at a rate per annum equal to 2% above
the
Alternate Base Rate.
3.3 Letter
of Credit Payments. If any draft shall be presented or other
demand for payment shall be made under any Letter of Credit, the LC Issuer
shall
notify the Borrower of the date and amount of the draft presented or demand
for
payment and of the date and time when it expects to pay such draft or honor
such
demand for payment. The responsibility of the LC Issuer to the
Borrower shall be only to determine that the documents (including each draft)
delivered under each Letter of Credit in connection with such presentment
shall
be in conformity in all material respects with such Letter of
Credit. On the date that such draft is paid or other payment is made
by the LC Issuer, the LC Issuer shall promptly notify the Lender of the amount
of any unpaid LC Disbursement. All such unpaid LC Disbursements with
respect to Letters of Credit shall be deemed to be Revolving Credit
Loans. No later than 1:00 p.m. Pacific time on the Business Day next
following the receipt of such notice, the Lender shall make available to
the
Lender, at the Lender’s head office, in immediately available funds, the
Lender’s prorata share of such unpaid LC Disbursements, together
with an amount equal to the product of (i) the average, computed for the
period
referred to in clause (iii) below, of the weighted average interest rate
paid by
the Lender for federal funds acquired by the Lender during each day included
in
such period, times (ii) the amount equal to the Lender’s
prorata share of such unpaid LC Disbursement, times (iii) a
fraction, the numerator of which is the number of days that have elapsed
from
and including the date the LC Issuer paid the draft presented for honor or
otherwise made payment until the date on which the Lender’s
prorata share of such unpaid LC Disbursement shall become
immediately available to the Lender, and the denominator of which is
365.
3.4 Obligations
Absolute.
(a) The
Borrower’s obligations to reimburse the LC Issuer for all LC Disbursements shall
be absolute and unconditional under any and all circumstances and irrespective
of the occurrence of any Default or Event of Default or any condition precedent
whatsoever or any set off, counterclaim or defense to payment which the Borrower
may have or have had against the LC Issuer, the Lender or any beneficiary
of a
Letter of Credit. The Borrower further agrees that the LC Issuer and
the Lender shall not be responsible for, and the Borrower’s obligations in
respect of the LC Disbursements shall not be affected by, among other things,
the validity or genuineness of documents or of any endorsements thereon,
even if
such documents should in fact prove to be in any or all respects invalid,
fraudulent or forged, or any dispute between or among the Borrower, the
beneficiary of any Letter of Credit or any financing institution or other
party
to which any Letter of Credit may be transferred or any claims or defenses
whatsoever of the Borrower, against the beneficiary of any Letter of Credit
or
any such transferee.
(b) The
LC
Issuer and the Lender shall not be liable for any error, omission, interruption
or delay in transmission, dispatch or delivery of any message or advice,
however
transmitted, in connection with any Letter of Credit. The Borrower
agrees that any action taken or omitted by the LC Issuer or the Lender under
or
in connection with each Letter of Credit and the related drafts and documents,
if done in good faith, shall be binding upon the Borrower and shall not result
in any liability on the part of the LC Issuer or the Lender to the
Borrower.
(c) Notwithstanding
the foregoing, this Section 3.4
shall not be construed to excuse the LC Issuer from liability to the Borrower
to
the extent of any direct damages (as opposed to consequential damages, claims
in
respect of which are hereby waived by the Borrower to the extent permitted
by
applicable law) suffered by the Borrower that are caused by the LC Issuer’s
gross negligence or willful misconduct.
3.5 Reliance
by the LC Issuer and the Lender. To the extent not inconsistent
with Section 3.4,
the LC Issuer and the Lender shall be entitled to rely, and shall be fully
protected in relying upon, any Letter of Credit, draft writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy,
telex or teletype message, statement, order or other document believed by
it to
be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel, independent
accountants and other experts selected by the LC Issuer or the
Lender.
SECTION
IV
CONDITIONS
OF REVOLVING CREDIT LOANS AND LETTERS OF CREDIT
4.1 Conditions
Precedent to Initial Revolving Credit Loans and Letters of
Credit. The obligation of the Lender to make the initial
Revolving Credit Loans and of the LC Issuer to issue the initial Letter of
Credit is subject to the satisfaction of the following conditions precedent
on
or prior to the Closing Date:
(a) The
Lender’s receipt of the following, each of which shall be originals or
telecopies (followed promptly by originals) unless otherwise specified, each
properly executed by a Responsible Officer of the signing Loan Party, each
dated
the Closing Date (or, in the case of certificates of governmental officials,
a
recent date before the Closing Date) and each in form and substance satisfactory
to the Lender:
(i) executed
counterparts of this Agreement, sufficient in number for distribution to
the
Lender and the Borrower;
(ii) the
Note
executed by the Borrower in favor of the Lender;
(iii) a
security agreement in substantially the form of Exhibit F-1, a collateral
assignment of contracts in the form of Exhibit F-2 and a pledge agreement
in substantially the forms of Exhibit G (together with each other
security agreement and security agreement supplement delivered pursuant to
Section 6.12,
in each case as amended, collectively, the “Security Agreement”), duly
executed by each Loan Party, together with (subject to the provisions of
Section
4.1(h)):
(A) certificates
representing the pledged equity interests referred to therein accompanied
by
undated stock powers executed in blank,
(B) stamped
receipt copies of proper financing statements, duly filed on or before the
Closing Date under the Uniform Commercial Code of all jurisdictions that
the
Lender may deem necessary or desirable in order to perfect the Encumbrances
created under the Security Agreement, covering the Collateral described in
the
Security Agreement,
(C) completed
requests for information, dated on or before the date of the initial Credit
Extension, listing the financing statements referred to in
clause (B) above and all other effective financing statements filed in the
jurisdictions referred to in clause (ii) above that name any Loan Party as
debtor, together with copies of such other financing statements,
(D) evidence
of the completion of all other actions, recordings and filings of or with
respect to the Security Agreement that the Lender may deem necessary or
desirable in order to perfect the Encumbrances created thereby,
(E) copies
of
the assigned agreements subject to the collateral assignment of contracts
referred to above, together with any necessary consent to such assignment,
duly
executed by each party to such assigned agreements other than the Loan Parties,
and
(F) evidence
that all other action that the Lender may deem necessary or desirable in
order
to perfect the Encumbrances created under the Security Agreement has been
taken
(including receipt of duly executed payoff letters and UCC-3 termination
statements);
(iv) an
intellectual property security agreement, in substantially the form of
Exhibit H (together with each other intellectual property security
agreement and intellectual property security agreement supplement delivered
pursuant to Section 6.12,
in each case as amended, the “Intellectual Property Security Agreement”),
duly executed by each Loan Party, together with evidence that all action
that
the Lender may deem necessary or desirable in order to perfect the Encumbrances
created under the Intellectual Property Security Agreement has been
taken;
(v) a
guaranty, executed by each Subsidiary of the Borrower (other than any CFC
or a
Subsidiary that is held directly or indirectly by a CFC) substantially in
the
form attached hereto as Exhibit I, guaranteeing the other Loan Parties’
obligations under the Loan Documents (each such guaranty or any guaranty
supplement, a “Guaranty”);
(vi) such
certificates of resolutions or other action, incumbency certificates and/or
other certificates of Responsible Officers of each Loan Party as the Lender
may
require evidencing the authority of each Loan Party to consummate the
transactions contemplated hereby and the identity, authority and capacity
of
each Responsible Officer thereof authorized to act as a Responsible Officer
in
connection with this Agreement and the other Loan Documents to which such
Loan
Party is a party or is to be a party;
(vii) such
documents and certifications as the Lender may reasonably require to evidence
that each Loan Party is duly organized or formed, is validly existing, in
good
standing and qualified to engage in business in each jurisdiction where its
ownership, lease or operation of properties or the conduct of its business
requires such qualification, except to the extent that failure to do so could
not reasonably be expected to have a Material Adverse Effect;
(viii) a
favorable opinion of ▇▇▇▇▇▇ ▇▇▇▇ LLP, counsel to the Loan Parties, addressed
to
the Lender, as to the matters set forth in Exhibit J and such other
matters concerning the Loan Parties and the Loan Documents as the Lender
may
reasonably request;
(ix) a
certificate of a Responsible Officer of each Loan Party either (A) attaching
copies of all consents, licenses and approvals required in connection with
the
execution, delivery and performance by such Loan Party and the validity against
such Loan Party of the Loan Documents to which it is a party, and such consents,
licenses and approvals shall be in full force and effect, or (B) stating
that no
such consents, licenses or approvals are so required;
(x) certificates
attesting to the Solvency of each Loan Party, from its chief financial
officer;
(xi) evidence
that all insurance required to be maintained pursuant to the Loan Documents
has
been obtained and is in effect, together with the certificates of insurance,
naming the Lender, as an additional insured or loss payee, as the case may
be,
under all insurance policies maintained with respect to the assets and
properties of the Loan Parties that constitute Collateral;
(xii) evidence
that the Existing Credit Agreement has been, or concurrently with the
transactions contemplated hereby is being, terminated and all Encumbrances
securing obligations under the Existing Credit Agreement have been, or
concurrently with the transactions contemplated hereby are being, released
or
assigned to the Lender;
(xiii) such
other assurances, certificates, documents, consents or opinions as the Lender
or
the LC Issuer reasonably may require; and
(xiv) a
certificate reasonably satisfactory to the Lender, provided by the Borrower
that
sets forth information required by the Patriot Act including the identity
of the
Borrower, the name and address of the Borrower and other information that
will
allow the Lender, as applicable, to identify the Borrower in accordance with
the
Patriot Act.
(b) All
fees
required to be paid to the Lender on or before the Closing Date shall have
been
paid.
(c) The
Borrower shall have paid all fees, charges and disbursements of counsel to
the
Lender (directly to such counsel if requested by the Lender) to the extent
invoiced prior to or on the Closing Date, plus such additional amounts of
such
fees, charges and disbursements as shall constitute its reasonable estimate
of
such fees, charges and disbursements incurred or to be incurred by it through
the closing proceedings (provided that such estimate shall not thereafter
preclude a final settling of accounts among the Borrower and the
Lender).
(d) The
Borrower and its Subsidiaries will have outstanding no Indebtedness other
than
the Revolving Credit Loans.
(e) The
Lender shall have received the following:
(i) A
pro
forma consolidated balance sheet and a related pro forma consolidated statement
of income of the Borrower and its Subsidiaries as of and for the 12 Fiscal
Month
period most recently ended prior to the Closing Date, prepared as of such
date
(in the case of such balance sheet) or at the beginning of such period (in
the
case of such statement of income), in form and substance satisfactory to
the
Lender and certified by the chief financial officer of the Borrower (the
“Pro
Forma Financial Statements”). The Pro Forma Financial Statements
and such certificate shall confirm that (i) the Borrower had not less than
$5,100,000 of Consolidated EBITDA for the 12 Fiscal Month period most recently
ended prior to the Closing Date.
(ii) The
Borrower’s projections for each of the five Fiscal Years following the Closing
Date, including consolidated balance sheets and statements of income, retained
earnings and cash flows.
(f) The
Lender shall not have become aware, after April 1, 2007 of any new or
inconsistent information or other matter not previously disclosed to it relating
to the Borrower or the transactions contemplated by the Commitment Letter
dated
as of such date addressed to the Borrower that the Lender, in its reasonable
business judgment, deems material and adverse relative to the information
or
other matters disclosed to it prior to such date, including matters covered
by
any third-party diligence reports, background checks or other financial,
accounting, insurance or legal review.
(g) The
representations and warranties contained in Section IV and all other
representations and warranties made by the Borrower and each other Loan Party
under any other Loan Document shall be true and accurate on and as of the
Closing Date as though made at and as of the Closing Date.
(h) All
documents and instruments required to perfect the Lender’s security interest in
the Collateral shall have been executed and delivered and, if applicable,
be in
proper form for filing, in each case as contemplated by the foregoing provisions
of this Section 4.1,
and none of the Collateral will be subject to any other pledges, security
interests or mortgages except for Permitted Encumbrances.
(i) No
litigation, arbitration, proceeding or investigation shall be pending or
threatened which questions the validity or legality of the transactions
contemplated by any Loan Document or seeks a restraining order, injunction
or
damages in connection therewith, or which, in the judgment of the Lender,
might
adversely affect the transactions contemplated hereby or thereby or might
have a
materially adverse affect on the assets, business, financial condition or
prospects of the Borrower.
4.2 Conditions
Precedent to all Revolving Credit Loans and Letters of Credit after the Closing
Date. The obligation of the Lender to make any Revolving Credit
Loan, to continue LIBOR Loans or to convert Revolving Credit Loans of one
Type
to Revolving Credit Loans of another Type, and of the LC Issuer to issue
any
Letter of Credit, in each case after the Closing Date, is further subject
to the
following conditions:
(a) timely
receipt by the Lender of the Notice of Borrowing or Conversion with respect
to
any Revolving Credit Loan, or by the LC Issuer of the Letter of Credit
Application with respect to any Letter of Credit;
(b) the
outstanding Revolving Credit Loans and Letters of Credit do not and, after
giving effect to any requested Revolving Credit Loan, will not exceed the
limitations set forth in Sections 2.1(a)
and (b) and 3.1
hereof;
(c) the
representations and warranties contained in Section V hereof and all
representations and warranties made by the Borrower and each other Loan Party
under any other Loan Document shall be true and accurate in all material
respects on and as of the date of such Notice of Borrowing or Conversion
or
Letter of Credit Application and on the effective date of the making,
continuation or conversion of each Revolving Credit Loan or issuance of each
Letter of Credit as though made at and as of each such date (except to the
extent that such representations and warranties expressly relate to an earlier
date in which case such representations and warranties shall be true and
correct
as of such earlier date);
(d) no
Default or Event of Default shall have occurred and be continuing at the
time
of, and immediately after, the making of such requested Revolving Credit
Loan or
the issuance of such requested Letter of Credit;
(e) no
litigation, arbitration, proceeding or investigation shall be pending or
threatened which questions the validity or legality of the transactions
contemplated by any Loan Document or seeks a restraining order, injunction
or
damages in connection therewith, or which, in the judgment of the Lender,
might
adversely affect the transactions contemplated hereby or thereby or might
have a
materially adverse affect on the assets, business, financial condition or
prospects of the Borrower; and
(f) no
change
shall have occurred in any law or regulation or interpretation thereof that,
in
the opinion of counsel for the Lender, would make it illegal or against the
policy of any governmental agency or authority for the Lender to make Revolving
Credit Loans hereunder or, in the opinion of counsel for the LC Issuer, for
the
LC Issuer to issue Letters of Credit hereunder (as the case may
be).
The
making, continuation or conversion of each Revolving Credit Loan and the
issuance of each Letter of Credit shall be deemed to be a representation
and
warranty by the Borrower on the date of the making, continuation or conversion
of such Revolving Credit Loan as to the accuracy of the facts referred to
in
subsection (c)
of this Section 4.2
and of the satisfaction of all of the conditions set forth in this Section
4.2.
SECTION
V
REPRESENTATIONS
AND WARRANTIES
The
Borrower represents and warrants to the Lender that:
5.1 Existence,
Qualification and Power. Each Loan Party and each of its
Subsidiaries (a) is duly organized or formed, validly existing and, as
applicable, in good standing under the Laws of the jurisdiction of its
incorporation, organization or formation, (b) has all requisite power and
authority and all requisite governmental licenses, authorizations, consents
and
approvals to (i) own or lease its assets and carry on its business and (ii)
execute, deliver and perform its obligations under the Loan Documents to
which
it is a and (c) is duly qualified and is licensed and, as applicable, in
good
standing under the laws of each jurisdiction where its ownership, lease or
operation of properties or the conduct of its business requires such
qualification or license; except in each case referred to in clause (b)(i)
or
(c), to the extent that failure to do so could not reasonably be expected
to
have a Material Adverse Effect.
5.2 Authorization;
No Contravention. The execution, delivery and performance by each
Loan Party of each Loan Document to which such Person is or is to be a party
have been duly authorized by all necessary corporate or other organizational
action, and do not and will not (a) contravene the terms of any of such Person’s
organization documents; (b) conflict with or result in any breach or
contravention of, or the creation of any Encumbrance under, or require any
payment to be made under (i) any contractual obligation to which such Person
is
a party or affecting such Person or the properties of such Person or any
of its
Subsidiaries or (ii) any order, injunction, writ or decree of any Governmental
Authority or any arbitral award to which such Person or its property is subject;
or (c) violate any law, rule or regulation.
5.3 Governmental
Authorization; Other Consents. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with (a) the execution, delivery or performance by, or enforcement
against, any Loan Party of this Agreement or any other Loan Document,
(b) the grant by any Loan Party of the Encumbrances granted by it pursuant
to the Security Documents, (c) the perfection or maintenance of the
Encumbrances created under the Security Documents (including the first priority
nature thereof) or (d) the exercise by the Lender of its rights under the
Loan Documents or the remedies in respect of the Collateral pursuant to the
Security Documents.
5.4 Binding
Effect. This Agreement has been, and each other Loan Document,
when delivered hereunder, will have been, duly executed and delivered by
each
Loan Party that is party thereto. This Agreement constitutes, and
each other Loan Document when so delivered will constitute, a legal, valid
and
binding obligation of such Loan Party, enforceable against each Loan Party
that
is party thereto in accordance with its terms except as limited by bankruptcy,
insolvency, reorganization, moratorium or other laws affecting the enforcement
of creditors’ rights generally, and except as the remedy of specific performance
or of injunctive relief is subject to the discretion of the court before
which
any proceeding therefor may be brought.
5.5 Financial
Statements; No Material Adverse Effect. (a) The
audited consolidated balance sheet of the Borrower as of the end of, and
the
related consolidated statements of operations, retained earnings and cash
flows
for, the Fiscal Year ended December 31, 2006 (i) were prepared in accordance
with GAAP consistently applied throughout the period covered thereby; (ii)
fairly present the financial condition of the Borrower and its Subsidiaries
as
of the date thereof and their results of operations for the period covered
thereby in accordance with GAAP consistently applied throughout the period
covered thereby, in each case except as otherwise expressly noted therein
Holdings, subject to the absence of footnotes; (iii) show all material
indebtedness and other liabilities, direct or contingent, of the Borrower
and
its Subsidiaries as of the date thereof, including liabilities for taxes,
material commitments and Indebtedness; and (iv) have been delivered to the
Lender.
(b) The
unaudited consolidated and consolidating balance sheets of the Borrower and
its
Subsidiaries as of the end of, and the related consolidated and consolidating
statements of operations, retained earnings and cash flows for, the Fiscal
Month
ended April 1, 2007 and for the three Fiscal Months then ended (the
“Financial Statements”) (i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby; (ii) fairly present
the financial condition of the Borrower and its Subsidiaries as of the date
thereof and their results of operations for the period covered thereby in
accordance with GAAP consistently applied throughout the period covered thereby,
in each case except as otherwise expressly noted therein and subject to normal,
recurring year-end adjustments that shall not in the aggregate be material
in
amount and the absence of notes thereto; and (iii) have been delivered to
the
Lender. Schedule 5.5 sets forth all material indebtedness and
other liabilities, direct or contingent, of the Borrower and its consolidated
Subsidiaries as of the date of such financial statements, including liabilities
for taxes, material commitments and Indebtedness.
(c) Since
the
date of the Financial Statements, there has been no event or circumstance,
either individually or in the aggregate, that has had or could reasonably
be
expected to have a Material Adverse Effect.
(d) The
Pro
Forma Financial Statements, copies of which have been furnished to the Lender,
fairly present the consolidated and consolidating pro forma financial
condition of the Borrower and its Subsidiaries as at such date and the
consolidated and consolidating pro forma results of operations of the Borrower
and its Subsidiaries for the period ended on such date, all in accordance
with
GAAP.
(e) The
projected financial information of the Borrower and its Subsidiaries that
has
been provided by the Borrower prior to the date hereof was prepared in good
faith on the basis of the assumptions stated therein, which assumptions were
fair in light of the conditions existing at the time of delivery of such
forecasts, and represented, at the time of delivery, the best estimate of
the
Borrower of the Borrower’s future financial condition and
performance.
5.6 Litigation. There
are no actions, suits, proceedings, claims or disputes pending or, to the
knowledge of the Borrower after due and diligent investigation, overtly
threatened or contemplated, at law, in equity, in arbitration or before any
Governmental Authority, by or against the Borrower or any of its Subsidiaries
or
against any of their properties or revenues that (a) purport to affect or
pertain to this Agreement, any other Loan Document, or (b) either individually
or in the aggregate, if determined adversely, could reasonably be expected
to
have a Material Adverse Effect.
5.7 No
Default. No Loan Party or any Subsidiary thereof is in default
under or with respect to, or a party to, any contractual obligation that
could,
either individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. No Default has occurred and is continuing or
would result from the consummation of the transactions contemplated by this
Agreement or any other Loan Document.
5.8 Ownership
of Property; Encumbrances; Investments. (a) Each Loan Party and
each of its Subsidiaries has good record and marketable title in fee simple
to,
or valid leasehold interests in, all real property necessary or used in the
ordinary conduct of its business, except for such defects in title as could
not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(b) Schedule
5.8(b)
sets forth a complete and accurate list of all Encumbrances on the property
or
assets of each Loan Party and each of its Subsidiaries, showing as of the
date
hereof the lienholder thereof, the principal amount of the obligations secured
thereby and the property or assets of such Loan Party or such Subsidiary
subject
thereto. The property of each Loan Party and each of its Subsidiaries
is subject to no Encumbrances, other than Encumbrances set forth on Schedule
5.8(b),
and as otherwise permitted by Section 8.1.
(c) Schedule
5.8(c)
sets forth a complete and accurate list of all real property owned by each
Loan
Party and each of its Subsidiaries, showing as of the date hereof the street
address, county or other relevant jurisdiction, state, record owner and book
and
estimated fair value thereof. Each Loan Party and each of its
Subsidiaries has good, marketable and insurable fee simple title to the real
property owned by such Loan Party or such Subsidiary, free and clear of all
Encumbrances, other than Encumbrances created or permitted by the Loan
Documents.
(d) (i) Schedule
5.8(d)(i)
sets forth a complete and accurate list of all leases of real property under
which any Loan Party or any Subsidiary of a Loan Party is the lessee, showing
as
of the date hereof the street address, county or other relevant jurisdiction,
state, lessor, lessee and expiration date thereof. Each such lease is
the legal, valid and binding obligation of the lessor thereof, enforceable
in
accordance with its terms, except as limited by bankruptcy, insolvency,
reorganization, moratorium or other laws affecting the enforcement of creditors’
rights generally, and except as the remedy of specific performance or of
injunctive relief is subject to the discretion of the court before which
any
proceeding therefor may be brought.
(ii) Schedule
5.8(d)(ii)
sets forth a complete and accurate list of all leases of real property under
which any Loan Party or any Subsidiary of a Loan Party is the lessor, showing
as
of the date hereof the street address, county or other relevant jurisdiction,
state, lessor, lessee and expiration date thereof. Each such lease is
the legal, valid and binding obligation of the lessee thereof, enforceable
in
accordance with its terms, except as limited by bankruptcy, insolvency,
reorganization, moratorium or other laws affecting the enforcement of creditors’
rights generally, and except as the remedy of specific performance or of
injunctive relief is subject to the discretion of the court before which
any
proceeding therefor may be brought.
(e) Schedule
5.8(e)
sets forth a complete and accurate list of all Investments held by any Loan
Party or any Subsidiary of a Loan Party on the date hereof, showing as of
the
date hereof the amount, obligor or issuer and maturity, if any,
thereof.
5.9 Environmental
Compliance.
(a) The
Loan
Parties and each of their respective Subsidiaries will comply in all material
respects with all applicable Environmental Laws in all jurisdictions in which
any of them operates now or in the future, and the Loan Parties and each
of
their respective its Subsidiaries will comply in all material respects with
all
such Environmental Laws that may in the future be applicable to such Loan
Party’s or any of its Subsidiaries’ business, properties and
assets.
(b) If
a Loan
Party or any of its Subsidiaries shall (i) receive notice that any material
violation of any Environmental Law may have been committed or is about to
be
committed by such Loan Party or any of its Subsidiaries, (ii) receive notice
that any administrative or judicial complaint or order has been filed or
is
about to be filed against such Loan Party or any of its Subsidiaries alleging
a
material violation of any Environmental Law requiring such Loan Party or
any of
its Subsidiaries to take any action in connection with the release of Hazardous
Materials into the environment, (iii) receive any notice from a federal,
state
or local government agency or private party alleging that such Loan Party
or any
of its Subsidiaries may be liable or responsible for any material amount
of
costs associated with a response to or cleanup of a release of Hazardous
Materials into the environment or any damages caused thereby, (iv) become
aware
of any investigative action or proceedings by a governmental agency or authority
commenced or threatened against such Loan Party or any of its Subsidiaries
regarding any potential violation of Environmental Laws or any spill, release,
discharge or disposal of any Hazardous Material or (v) notify any governmental
agency or authority regarding any potential violation of Environmental Laws
or
any spill, release, discharge or disposal of any Hazardous Material by such
Loan
Party or any of its Subsidiaries, such Loan Party or such Subsidiary shall
promptly notify the Lender thereof (together with a copy of any such notice)
and
of any action being or proposed to be taken with respect thereto and thereafter
shall continue to furnish to the Lender all further notices, demands, reports
and other information regarding the foregoing.
5.10 Insurance. The
properties of the Borrower and its Subsidiaries are insured with financially
sound and reputable insurance companies not Affiliates of the Borrower, in
such
amounts, with such deductibles and covering such risks as are customarily
carried by companies engaged in similar businesses and owning similar properties
in localities where the applicable Borrower or Subsidiary operates.
5.11 Taxes. The
Borrower and its Subsidiaries have filed all Federal, state and other material
tax returns and reports required to be filed, and have paid all Federal,
state
and other material taxes, assessments, fees and other governmental charges
levied or imposed upon them or their properties, income or assets otherwise
due
and payable, except those which are being contested in good faith by appropriate
proceedings diligently conducted and for which adequate reserves have been
provided in accordance with GAAP. There is no proposed tax assessment
against the Borrower or any Subsidiary that would, if made, have a Material
Adverse Effect. No Loan Party or any Subsidiary thereof is party to
any tax sharing agreement.
5.12 ERISA
Compliance. (a) Each Plan is in compliance in all
material respects with the applicable provisions of ERISA, the Code and other
Federal or state laws. Each Plan that is intended to qualify under
Section 401(a) of the Code has received a favorable determination letter
from
the IRS or an application for such a letter is currently being processed
by the
IRS with respect thereto and, to the best knowledge of the Borrower, nothing
has
occurred which would prevent, or cause the loss of, such
qualification. The Borrower and each ERISA Affiliate have made all
required contributions to each Plan subject to Section 412 of the Code, and
no
application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code has been made with respect to any
Plan.
(b) There
are
no pending or, to the best knowledge of the Borrower, overtly threatened
claims,
actions or lawsuits, or action by any Governmental Authority, with respect
to
any Plan that could reasonably be expected to have a Material Adverse
Effect. There has been no prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan that has resulted
or
could reasonably be expected to result in a Material Adverse
Effect.
(c) (i)
No
ERISA Event has occurred or is reasonably expected to occur; (ii) no
Pension Plan has any Unfunded Pension Liability; (iii) neither of the Borrower
nor any ERISA Affiliate has incurred, or reasonably expects to incur, any
liability under Title IV of ERISA with respect to any Pension Plan (other
than
premiums due and not delinquent under Section 4007 of ERISA); (iv) neither
of
the Borrower nor any ERISA Affiliate has incurred, or reasonably expects
to
incur, any liability (and no event has occurred which, with the giving of
notice
under Section 4219 of ERISA, would result in such liability) under Section
4201
or 4243 of ERISA with respect to a Multiemployer Plan; and (v) neither of
the
Borrower nor any ERISA Affiliate has engaged in a transaction that could
be
subject to Section 4069 or 4212(c) of ERISA.
5.13 Subsidiaries;
Equity Interests; Loan Parties. The Borrower has no Subsidiaries
other than those specifically disclosed in Part (a) of Schedule 5.13,
and all of the outstanding Equity Interests in such Subsidiaries have been
validly issued, are fully paid and non-assessable and are owned by a Loan
Party
in the amounts specified on Part (a) of Schedule 5.13
free and clear of all Encumbrances except those created under the Security
Documents. The Borrower has no equity investments in any other
corporation or entity other than those specifically disclosed in Part (b)
of
Schedule 5.13. All
of the outstanding Equity Interests in the Borrower have been validly issued,
are fully paid and non-assessable. Set forth on Part (d) of
Schedule 5.13
is a complete and accurate list of all Loan Parties, showing as of the Closing
Date (as to each Loan Party) the jurisdiction of its incorporation, the address
of its principal place of business and its U.S. taxpayer identification number
or, in the case of any non-U.S. Loan Party that does not have a U.S. taxpayer
identification number, its unique identification number issued to it by the
jurisdiction of its incorporation. The copy of the charter of each
Loan Party and each amendment thereto provided pursuant to Section 4.1(a)(v)
is a true and correct copy of each such document, each of which is valid
and in
full force and effect.
5.14 Margin
Regulations; Investment Company Act. (a) The Borrower
has not engaged and, except as permitted by Section 6.7(b),
will not engage, principally or as one of its important activities, in the
business of purchasing or carrying margin stock (within the meaning of
Regulation U issued by the Federal Reserve Board), or extending credit for
the
purpose of purchasing or carrying margin stock.
(b) None
of
the Borrower, any Person Controlling the Borrower, or any Subsidiary is or
is
required to be registered as an “investment company” under the Investment
Company Act of 1940.
5.15 Disclosure. The
Borrower has disclosed to the Lender all agreements, instruments and corporate
or other restrictions to which it or any of its Subsidiaries is subject,
and all
other matters known to it, that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect. No
report, financial statement, certificate or other information furnished (whether
in writing or orally) by or on behalf of any Loan Party to the Lender in
connection with the transactions contemplated hereby and the negotiation
of this
Agreement or delivered hereunder or under any other Loan Document (in each
case
as modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary
to
make the statements therein, in the light of the circumstances under which
they
were made, not misleading; provided that, with respect to projected
financial information, the Borrower represents only that such information
was
prepared in good faith based upon assumptions believed to be reasonable at
the
time.
5.16 Compliance
with Laws. Each Loan Party and each Subsidiary thereof is in
compliance in all material respects with the requirements of all laws, rules
and
regulations and all orders, writs, injunctions and decrees applicable to
it or
to its properties, except in such instances in which (a) such requirement
of law
or order, writ, injunction or decree is being contested in good faith by
appropriate proceedings diligently conducted or (b) the failure to comply
therewith, either individually or in the aggregate, could not reasonably
be
expected to have a Material Adverse Effect.
5.17 Intellectual
Property; Licenses, Etc. Each Loan Party and each of its
Subsidiaries own, or possess the right to use, all of the trademarks, service
marks, trade names, copyrights, patents, patent rights, franchises, licenses
and
other intellectual property rights (collectively, “IP Rights”) that are
reasonably necessary for the operation of their respective businesses, without
conflict with the rights of any other Person, and Schedule 5.17
sets forth a complete and accurate list of all such IP Rights owned or used
by
each Loan Party and each of its Subsidiaries (other than “off the shelf”
software products used in the ordinary course of business). To the
best knowledge of the Borrower, no slogan or other advertising device, product,
process, method, substance, part or other material now employed, or now
contemplated to be employed, by any Loan Party or any of its Subsidiaries
infringes upon any rights held by any other Person. No claim or
litigation regarding any of the foregoing is pending or, to the best knowledge
of the Borrower, threatened, which, either individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
5.18 Solvency. Each
Loan Party is, individually and together with its Subsidiaries on a consolidated
basis, Solvent.
5.19 Casualty,
Etc. Neither the businesses nor the properties of any Loan Party
or any of its Subsidiaries are affected by any fire, explosion, accident,
strike, lockout or other labor dispute, drought, storm, hail, earthquake,
embargo, act of God or of the public enemy or other casualty (whether or
not
covered by insurance) that, either individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
5.20 Labor
Matters. There are no collective bargaining agreements or
Multiemployer Plans covering the employees of the Borrower or any of its
Subsidiaries as of the Closing Date and neither of the Borrower nor any
Subsidiary has suffered any strikes, walkouts, work stoppages or other material
labor difficulty within the last five years.
5.21 Security
Documents. The provisions of the Security Documents are effective
to create in favor of the Lender for the benefit of the Secured Parties a
legal,
valid and enforceable first priority Encumbrance (subject to Permitted
Encumbrances) on all right, title and interest of the respective Loan Parties
in
the Collateral described therein. Except for filings completed prior
to the Closing Date as contemplated hereby and by the Security Documents
or
addressed in Section 4.1(h),
no filing will be necessary to perfect or protect such
Encumbrances.
5.22 Compliance
with OFAC Rules and Regulations. Neither the Borrower, nor any
Subsidiary nor any Affiliate of the Borrower (i) is a Sanctioned Person,
(ii)
has any assets in Sanctioned Countries, or (iii) derives any of its operating
income from investments in, or transactions with Sanctioned Persons or
Sanctioned Countries. No part of the proceeds of any Loan hereunder
will be used directly or indirectly to fund any operations in, finance any
investments or activities in or make any payments to, a Sanctioned Person
or a
Sanctioned Country.
5.23 Foreign
Assets Control Regulations, Etc. Neither the Borrower nor any
Subsidiary is an “enemy” or an “ally of the enemy” within the meaning of Section
2 of the Trading with the Enemy Act of the United States of America (50 U.S.C.
App. §§ 1 et seq.), as amended. Neither the Borrower nor any
Subsidiary is in violation of (a) the Trading with the Enemy Act, as amended,
(b) any of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto or (c) the Patriot
Act. Neither the Borrower nor any Subsidiary (i) is a blocked person
described in Section 1 of the Anti-Terrorism Order or (ii) to the best of
the
Borrower’s knowledge, engages in any dealings or transactions, or is otherwise
associated, with any such blocked person.
SECTION
VI
AFFIRMATIVE
COVENANTS
The
Borrower covenants that so long as any Revolving Credit Loan, Letter of Credit
or other Obligation, remains outstanding or the Lender or the LC Issuer have
any
obligation to lend or to issue any Letter of Credit hereunder:
6.1 Financial
Statements. The Borrower shall furnish to the Lender and the
Lender:
(a) as
soon
as available to the Borrower, but in any event within 90 days after the end
of
each Fiscal Year, the consolidated and consolidating balance sheet of the
Borrower and all of its Subsidiaries as of the end of such year and related
consolidated and consolidating statements of income, retained earnings and
cash
flow of the Borrower and all of its Subsidiaries for such year, prepared
in
accordance with GAAP and audited and certified without qualification by the
Borrower’s Accountants in the case of such consolidated statements, and
certified by the chief financial officer of the Borrower, as the case may
be, in
the case of such consolidating statements; and, concurrently with such financial
statements, a copy of the Borrower’s Accountants management report and a written
statement by the Borrower’s Accountants that, in the making of the audit
necessary for their report and opinion upon such financial statements they
have
obtained no knowledge of any Default or, if in the opinion of such accountants
any such Default exists, they shall disclose in such written statement the
nature and status thereof;
(b) as
soon
as available to the Borrower, but in any event within 45 days after the end
of
each Fiscal Quarter of each Fiscal Year, a consolidated and consolidating
balance sheet of the Borrower and all its Subsidiaries as of the end of,
and
related consolidated and consolidating statements of income, retained earnings
and cash flow of the Borrower and all of its Subsidiaries for, the Fiscal
Quarter then ended and portion of the Fiscal Year then ended, prepared in
accordance with GAAP and certified by the chief financial officer of the
Borrower, subject to normal, recurring year-end adjustments that shall not
in
the aggregate be material in amount;
(c) as
soon
as available to the Borrower, but in any event within 30 days following the
end
of each Fiscal Month, a restaurant by restaurant statement of revenue
and EBITDA, for such Fiscal Month, for all restaurants owned or
operated by the Borrower or its Subsidiaries (including a statement of revenue
and EBITDA comparing year over year performance for all restaurants operated
for
more than one year), prepared in accordance with GAAP and certified by the
chief
financial officer of the Borrower;
(d) concurrently
with the delivery of each financial statement pursuant to subsections (a)
and
(b) of this Section 6.1,
a report in substantially the form of Exhibit E hereto signed on behalf
of the Borrower by its chief financial officer;
(e) at
least
fifteen (15) days prior to the first day of each Fiscal Year, the Borrower’s
projections for such Fiscal Year, prepared on a Fiscal Monthly basis and
including consolidated balance sheets and statements of income, retained
earnings and cash flows;
(f) commencing
with Fiscal Year 2007, and concurrently with its filing, true and correct
copies
of the Borrower’s federal and state tax returns and each amendment
thereto;
(g) promptly
after the receipt thereof by the Borrower, copies of any reports (including
any
so-called management letters) submitted to the Borrower by independent public
accountants in connection with any annual or interim review of the accounts
of
the Borrower and/or its Subsidiaries made by such accountants;
(h) promptly
after the same are delivered to its stockholders or the Securities and Exchange
Commission, copies of all proxy statements, financial statements and reports
as
the Borrower shall send to its stockholders or as the Borrower may file with
the
Securities and Exchange Commission or any Governmental Authority at any time
having jurisdiction over the Borrower or its Subsidiaries; and
(i) from
time
to time, such other financial data and information about the Borrower or
its
Subsidiaries as the Lender may reasonably request, including, without
limitation, periodic sales reports relating to restaurants and any accounts
receivables information (including aging).
6.2 Conduct
of Business. (a) The Borrower and each of its
Subsidiaries shall duly observe and comply in all material respects with
all
material contracts and with all applicable laws, regulations, decrees, orders,
judgments and valid requirements of any Governmental Authorities applicable
to
their corporate existence, rights and franchises, to the conduct of their
business and to their property and assets (including without limitation all
Environmental Laws and ERISA), except in any case where the failure to observe
and comply would not have a material adverse effect on the business, financial
condition, assets or properties of the Borrower and its Subsidiaries taken
as a
whole, and shall maintain and keep in full force and effect and comply in
all
material respects with all licenses and permits necessary to the proper conduct
of their business.
(b) The
Borrower and each of its Subsidiaries shall, except as otherwise permitted
by
this Agreement, maintain their corporate or other entity type existence,
comply
with their respective charters, by-laws limited partnership agreements and
other
organizational documents, observe all corporate and other entity type
formalities in their governance (including holding regular board of directors
and shareholders meetings, maintaining accurate corporate records, maintaining
separate accounts) and remain or engage substantially in the same business
as
that in which they are now engaged and in no unrelated business.
6.3 Maintenance
and Insurance.
(a) The
Borrower and each of its Subsidiaries shall maintain their properties in
good
repair, working order and condition as required for the normal conduct of
their
business.
(b) The
Borrower and each of its Subsidiaries shall at all times maintain liability,
casualty and business interruption insurance on their properties (including
all
Collateral) with financially sound and reputable insurers in such amounts
and
with such coverages, endorsements, deductibles and expiration dates as the
officers of the Borrower may determine in the exercise of their reasonable
judgment deem to be adequate, as are customary in the industry for companies
of
established reputation engaged in the same or similar business and owning
or
operating similar properties and as shall be reasonably satisfactory to the
Lender. The Lender shall be named as loss payee, additional insured
and/or mortgagee under such insurance as the Lender shall reasonably require
from time to time, and the Borrower shall provide to the Lender lender’s loss
payable endorsements in form and substance reasonably satisfactory to the
Lender. In addition, the Lender shall be given thirty (30) days
advance notice of any cancellation of insurance. In the event of
failure to provide and maintain insurance as herein provided, the Lender
may, at
its option, obtain such insurance and charge the amount thereof to the Borrower
as a Revolving Credit Loan. The Borrower shall furnish to the Lender
certificates or other evidence satisfactory to the Lender of compliance with
the
foregoing insurance provisions. The Lender shall not, by the fact of
approving, disapproving or accepting any such insurance, incur any liability
for
the form or legal sufficiency of insurance contracts, solvency of insurance
companies or payment of law suits, and the Borrower hereby expressly assumes
full responsibility therefor and liability, if any, thereunder.
6.4 Taxes. The
Borrower shall pay or cause to be paid all taxes, assessments or governmental
charges on or against it or any of its Subsidiaries or their properties on
or
prior to the time when they become delinquent; except for any tax, assessment
or
charge that is being contested in good faith by appropriate proceedings and
with
respect to which adequate reserves have been established and are being
maintained in accordance with GAAP if no Encumbrance shall have been filed
(the
enforcement of which shall not have been stayed) to secure such tax, assessment
or charge.
6.5 Inspection
Rights. The Borrower shall, and shall cause each of its
Subsidiaries to, permit any authorized representatives designated by the
Lender
to visit and inspect any of the properties of the Borrower or of any of its
Subsidiaries, to inspect, copy and take extracts from their financial and
accounting records, and to discuss their affairs, finances and accounts with
their officers, and independent public accountants (provided that the Borrower
may, if it so chooses, be present at or participate in any such discussion),
all
upon reasonable notice and at such reasonable times during normal business
hours
and as often as may reasonably be requested or at any time or from time to
time
following the occurrence and during the continuation of an Event of
Default.
6.6 Maintenance
of Books and Records. The Borrower and each of its Subsidiaries
shall keep adequate books and records of account, in which true and complete
entries will be made reflecting all of their business and financial
transactions, and such entries will be made in accordance with GAAP consistently
applied and applicable law.
6.7 Use
of
Proceeds.
(a) The
Borrower will use the proceeds of the Revolving Credit Loans to repay the
outstanding extensions of credit under the Existing Credit Agreement and
other
outstanding Indebtedness of the Borrower for borrowed money. The
remainder of the Revolving Credit Loans shall be available, subject to the
terms
of the Loan Documents, for working capital, to finance Capital Expenditures
and
for other general corporate purposes and to pay fees and expenses associated
with the transactions contemplated hereby.
(b) Except
as
set forth in the following sentence, no portion of any Revolving Credit Loan
shall be used for the “purpose of purchasing or carrying” any “margin stock” or
“margin security” as such terms are used in Regulations T, U and X of the Board
of Governors of the Federal Reserve System (“Regulations T, U and X”), or
otherwise in violation of such regulations. The Borrower may use proceeds
from
the Revolving Credit Loans to purchase "margin stock" or "margin
security" as such term is used in Regulations T, U or X in connection solely
with the repurchase by the Borrower of its common stock to the extent permitted
by Section 8.6(c),
provided that (i) immediately upon giving effect to any purchase of such
"margin
stock" or "margin security", there are no violations of Regulations T, U
or X,
and (ii) the Borrower shall complete in all respects any required forms
(including, without limitation, Form FR U-1 and amendments thereto), with
all
attachments thereto (including a then current list of collateral which
adequately supports all credit extended hereunder) pursuant to Regulations
T, U
or X and deliver such forms in a timely manner to the Lender.
6.8 Further
Assurances. At any time and from time to time the Borrower shall,
and shall cause each of its Subsidiaries to, execute and deliver such further
documents and take such further action as may reasonably be requested by
the
Lender to effect the purposes of the Loan Documents.
6.9 Notification
Requirements. The Borrower shall furnish to the
Lender:
(a) promptly
upon becoming aware of the existence of any condition or event that constitutes
a Default, written notice thereof specifying the nature and duration thereof
and
the action being or proposed to be taken with respect thereto;
(b) promptly
upon becoming aware of any litigation or of any investigative proceedings
by a
Governmental Authority commenced or threatened against the Borrower or any
of
its Subsidiaries of which either has notice, the outcome of which could
reasonably be expected to have a materially adverse effect on the assets,
business or prospects of the Borrower alone or the Borrower and its Subsidiaries
on a consolidated basis, written notice thereof and the action being or proposed
to be taken with respect thereto; and
(c) promptly
after becoming aware of any occurrence or any condition affecting the Borrower
or any Subsidiary of the Borrower which could reasonably be expected to
constitute a material adverse change in or which could reasonably be expected
to
have a material adverse effect on the business, properties or condition
(financial or otherwise) of the Borrower alone or the Borrower and its
Subsidiaries, taken as a whole, written notice thereof.
6.10 ERISA
Reports.
(a) Each
Plan
shall comply in all material respects with ERISA and the Code, except to
the
extent failure to comply in any instance would not have a material adverse
effect on the business, financial condition or operations of the Borrower
and
its Subsidiaries taken as a whole.
(b) With
respect to any Plan, the Borrower shall, or shall cause its Affiliates to,
furnish to the Lender promptly (i) as soon as possible and in any event within
10 days after the Borrower or any of its ERISA Affiliates know that any ERISA
Event has occurred or is expected to occur, a statement of the chief financial
officer of the Borrower, describing such ERISA Event, including copies of
any
notice concerning an ERISA Event received from PBGC, a plan administrator,
or
from a Multiemployer Plan sponsor, and the action, if any, the Borrower or
such
ERISA Affiliate proposes to take with respect thereto; and (ii) promptly
after
filing thereof, a copy of the annual report of each Pension Plan (Form 5500
or
comparable form) required to be filed with the IRS and/or the Department
of
Labor. Promptly after the adoption of any Pension Plan, the Borrower
shall notify the Lender of such adoption.
6.11 Environmental
Compliance.
(a) The
Borrower and its Subsidiaries will comply in all material respects with all
applicable Environmental Laws in all jurisdictions in which any of them operates
now or in the future, and the Borrower and its Subsidiaries will comply in
all
material respects with all such Environmental Laws that may in the future
be
applicable to the Borrower’s or any of its Subsidiaries’ business, properties
and assets.
(b) If
the
Borrower or any Subsidiary of the Borrower shall (i) receive notice that
any
material violation of any Environmental Law may have been committed or is
about
to be committed by the Borrower or any Subsidiary of the Borrower, (ii) receive
notice that any administrative or judicial complaint or order has been filed
or
is about to be filed against the Borrower or any Subsidiary of the Borrower
alleging a material violation of any Environmental Law requiring the Borrower
or
any Subsidiary of the Borrower to take any action in connection with the
release
of Hazardous Materials into the environment, (iii) receive any notice from
a
federal, state or local government agency or private party alleging that
the
Borrower or any Subsidiary of the Borrower may be liable or responsible for
any
material amount of costs associated with a response to or cleanup of a release
of Hazardous Materials into the environment or any damages caused thereby,
(iv)
become aware of any investigative proceedings by a governmental agency or
authority commenced or threatened against the Borrower or any of its
Subsidiaries regarding any potential material violation of Environmental
Laws or
any spill, release, discharge or disposal of any Hazardous Material or (v)
notify any Governmental Authority regarding any potential material violation
of
Environmental Laws or any spill, release, discharge or disposal of any Hazardous
Material by the Borrower or a Subsidiary of the Borrower, the Borrower shall
promptly notify the Lender thereof (together with a copy of any such notice)
and
of any action being or proposed to be taken with respect thereto and thereafter
shall continue to furnish to the Lender all further notices, demands, reports
and other information regarding the foregoing.
6.12 Covenant
to Guarantee Obligations and Give Security. (a) Upon the
formation or acquisition of any new direct or indirect Subsidiary by any
Loan
Party, then the Borrower shall, at the Borrower’s expense:
(i) within
10 days after such formation or acquisition, cause such Subsidiary (other
than any CFC or a Subsidiary that is held directly or indirectly by a CFC),
and
cause each direct and indirect parent of such Subsidiary (if it has not already
done so), to duly execute and deliver to the Lender a Guaranty;
(ii) within
10
days after such formation or acquisition, furnish to the Lender a description
of
the real and personal properties of such Subsidiary, in detail reasonably
satisfactory to the Lender;
(iii) within
15
days after such formation or acquisition, cause such Subsidiary (other than
any
CFC or a Subsidiary that is held directly or indirectly by a CFC) and each
direct and indirect parent of such Subsidiary (if it has not already done
so) to
duly execute and deliver to the Lender, Intellectual Property Security Agreement
Supplements and other security agreements and pledge agreements, as specified
by
and in form and substance reasonably satisfactory to the Lender (including
delivery of all Pledged Equity in and of such Subsidiary (except that the
Pledged Equity shall be limited to 65% of the equity of such Subsidiary in
the
case of a CFC or a Subsidiary that is held directly or indirectly by a CFC),
and
other instruments of the type specified in Section 4.1(a)(iii)),
securing payment of all the Obligations of such Subsidiary or such parent,
as
the case may be, under the Loan Documents and constituting Encumbrances on
all
such personal properties;
(iv) deliver
to the Lender, within 15 days after such formation or acquisition, landlord
waivers, estoppel and consent agreements, each in form and substance
satisfactory to the Lender, executed by each of the lessors of any of the
leased
real properties of such Subsidiary (other than any CFC or a Subsidiary that
is
held directly or indirectly by a CFC);
(v) within
30
days after such formation or acquisition, cause such Subsidiary (other than
any
CFC or a Subsidiary that is held directly or indirectly by a CFC) and each
direct and indirect parent of such Subsidiary (if it has not already done
so) to
take whatever action (including the filing of Uniform Commercial Code financing
statements and the giving of notices) as may be reasonably necessary or
advisable in the reasonable opinion of the Lender to vest in the Lender (or
in
any representative of the Lender designated by it) valid and subsisting
Encumbrances on the properties purported to be subject to the Intellectual
Property Security Agreement Supplements and security agreements and pledge
agreements delivered pursuant to this Section 6.12,
enforceable against all third parties in accordance with their terms;
and
(vi) within
60
days after such formation or acquisition, deliver to the Lender, upon the
request of the Lender in its sole discretion, a signed copy of a favorable
opinion, addressed to the Lender, of counsel for the Loan Parties acceptable
to
the Lender as to the matters contained in clauses (i),
(iii)
and (v)
above, and as to such other matters as the Lender may reasonably
request.
(b) Upon
the
acquisition of any property by the Borrower or any Subsidiary, if such property,
in the reasonable judgment of the Lender, shall not already be subject to
a
perfected first priority security interest in favor of the Lender, then the
Borrower shall, at the Borrower’s expense:
(i) within
10
days after such acquisition, furnish to the Lender a description of the property
so acquired in detail satisfactory to the Lender,
(ii) within
15
days after such acquisition, deliver to the Lender landlord waivers, estoppel
and consent agreements, each in form and substance satisfactory to the Lender,
executed by each of the lessors of any newly acquired leased real
properties,
(iii) within
15
days after such acquisition, cause the applicable Loan Party to duly execute
and
deliver to the Lender, Intellectual Property Security Agreement Supplements
as
requested by the Lender and other security agreements and pledge agreements,
as
specified by and in form and substance satisfactory to the Lender, securing
payment of all the Obligations of the applicable Loan Party under the Loan
Documents and constituting Encumbrances on all such properties,
(iv) within
30
days after such acquisition, cause the applicable Loan Party to take whatever
action (including the filing of Uniform Commercial Code financing statements
and
the giving of notices) may be reasonably necessary or advisable in the
reasonable opinion of the Lender to vest in the Lender (or in any representative
of the Lender designated by it) valid and subsisting Encumbrances on such
property, enforceable against all third parties, and
(v) within
60
days after such acquisition, deliver to the Lender, upon the request of the
Lender in its sole discretion, a signed copy of a favorable opinion, addressed
to the Lender, of counsel for the Loan Parties reasonably acceptable to the
Lender as to the matters contained in clauses (iii)
and (iv)
above and as to such other matters as the Lender may reasonably
request.
(c) Upon
the
request of the Lender following the occurrence and during the continuance
of a
Default, the Borrower shall, at the Borrower’s expense:
(i) within
10
days after such request, furnish to the Lender a description of the real
and
personal properties of the Loan Parties and their respective Subsidiaries
in
detail satisfactory to the Lender,
(ii) within
15
days after such request, duly execute and deliver, and cause each Loan Party
(if
it has not already done so) to duly execute and deliver, to the Lender,
Intellectual Property Security Agreement Supplements and other security
agreements and pledge agreements, as specified by and in form and substance
satisfactory to the Lender (including delivery of all Pledged Equity in and
of
such Subsidiary, and other instruments of the type specified in Section 4.1(a)(iii)),
securing payment of all the Obligations of the applicable Loan Party under
the
Loan Documents and constituting Encumbrances on all such
properties,
(iii) within
30
days after such request, take, and cause each Loan Party to take, whatever
action (including the filing of Uniform Commercial Code financing statements
and
the giving of notices) as may be necessary or advisable in the opinion of
the
Lender to vest in the Lender (or in any representative of the Lender designated
by it) valid and subsisting Encumbrances on the properties purported to be
subject to the Intellectual Property Security Agreement Supplements and security
agreements and pledge agreements delivered pursuant to this Section 6.12,
enforceable against all third parties in accordance with their terms,
and
(iv) within
60
days after such request, deliver to the Lender, upon the request of the Lender
in its sole discretion, a signed copy of a favorable opinion, addressed to
the
Lender, of counsel for the Loan Parties acceptable to the Lender as to the
matters contained in clauses (ii)
and (iii)
above, and as to such other matters as the Lender may reasonably
request.
(d) At
any
time upon request of the Lender, the Borrower shall promptly execute and
deliver
any and all further instruments and documents and take all such other action
as
the Lender may reasonably deem necessary or desirable in obtaining the full
benefits of, or (as applicable) in perfecting and preserving the Encumbrances
of, such guaranties, deeds of trust, trust deeds, deeds to secure debt,
mortgages, leasehold mortgages, leasehold deeds of trust, Intellectual Property
Security Agreement Supplements and other security agreements and pledge
agreements.
(e) Any
Subsidiary (other than a CFC or a Subsidiary that is held directly or indirectly
by a CFC) that is not a Loan Party on the date hereof shall become a Loan
Party
within 90 days after the Closing Date, unless it is thereafter merged with
a
Loan Party in accordance with Section 8.4(a).
6.13 Cash
Collateral Accounts. Within one hundred twenty (120) days after
the Closing Date the Borrower will establish and maintain, and cause each
of the
other Loan Parties to maintain, its depository and disbursement accounts
and
treasury management relationships with ▇▇▇▇▇ Fargo pursuant to a Secured
Cash
Management Agreement.
6.14 Release
of Real Estate Liens. Within sixty (60) days after the
Closing Date the Borrower shall have obtained and filed, in the appropriate
jurisdictions, executed terminations of all liens with respect to any real
estate, whether fee or leasehold, under the Existing Credit
Agreement.
6.15 Casa
Ole of Louisiana, Inc.. Within sixty (60) days after the Closing
Date the Borrower shall deliver evidence reasonably satisfactory to the Lender
that Casa Ole of Louisiana, Inc., a Subsidiary of the Borrower, is in good
standing in its jurisdiction of formation and any foreign jurisdictions in
which
it conducts business.
SECTION
VII
FINANCIAL
COVENANTS
The
Borrower covenants that so long as any Revolving Credit Loan, Letter of Credit
or other Obligation (other than contingent indemnification obligations),
remains
outstanding or the Lender or the LC Issuer have any obligation to make any
Revolving Credit Loan or issue any Letter of Credit hereunder:
7.1 Financial
Covenants.
(a) Total
Leverage Ratio. The Borrower will not permit the Total Leverage
Ratio as of the end of any Fiscal Quarter ending during the periods set forth
below to be greater than the ratio set forth below opposite such
period:
|
Period
|
Maximum
Total
Leverage
Ratio
|
|
Closing
Date through the end of the 2nd Fiscal Quarter of Fiscal Year 2009
(provided that the Measurement Period shall be the Closing Date
through
the end of such Fiscal Quarter)
|
2.00:1.00
|
|
3rd
Fiscal Quarter of Fiscal Year 2009 and thereafter
|
1.50:1.00
|
(b) Consolidated
Fixed Charge Coverage Ratio. The Borrower will not permit the
Consolidated Fixed Charge Coverage Ratio as of the end of any Fiscal Quarter
of
the Borrower during the periods set forth below to be less than the ratio
set
forth below opposite such period:
|
Period
|
Minimum
Consolidated Fixed Charge Coverage Ratio
|
|
Closing
Date through the end of the 2nd Fiscal Quarter of Fiscal Year
2009
|
1.15:1.00
|
|
3rd
Fiscal Quarter of Fiscal Year 2009 and thereafter
|
1.20:1.00
|
(c) Minimum
Consolidated EBITDA.
(i) The
Borrower will not permit the Consolidated EBITDA of the Borrower as of the
end
of any period set forth below to be less than the amount set forth below
opposite such period:
|
Period
|
Minimum
Consolidated EBITDA
|
|
Closing
Date through the end of the 2nd Fiscal Quarter of Fiscal Year 2007
(provided that the Measurement Period shall be the Closing Date
through
the end of such Fiscal Quarter)
|
$1,200,000
|
|
Closing
Date through the end of the 3rd Fiscal Quarter of Fiscal Year 2007
(provided that the Measurement Period shall be the Closing Date
through
the end of such Fiscal Quarter)
|
$2,400,000
|
|
Closing
Date through the end of the 4th Fiscal Quarter of Fiscal Year 2007
(provided that the Measurement Period shall be the Closing Date
through
the end of such Fiscal Quarter)
|
$3,450,000
|
|
Closing
Date through the end of the 1st Fiscal Quarter of Fiscal Year 2008
(provided that the Measurement Period shall be the Closing Date
through
the end of such Fiscal Quarter)
|
$4,750,000
|
(ii) The
Borrower will not permit the Consolidated EBITDA of the Borrower as of the
end
of any 12 Fiscal Month period during the periods set forth below to be less
than
the amount set forth below opposite such period:
|
Period
|
Minimum
Consolidated EBITDA
|
|
2nd
Fiscal Quarter of Fiscal Year 2008 through 4th Fiscal Quarter
of Fiscal Year 2008
|
$5,150,000
|
|
1st
Fiscal Quarter of Fiscal Year 2009 through 4th Fiscal Quarter
of Fiscal Year 2009
|
$5,800,000
|
|
1st
Fiscal Quarter of Fiscal Year 2010 through 4th Fiscal Quarter
of Fiscal Year 2010
|
$6,250,000
|
|
Thereafter
|
$6,750,000
|
SECTION
VIII
NEGATIVE
COVENANTS
The
Borrower covenants that so long as any Revolving Credit Loan, Letter of Credit
or other Obligation, remains outstanding or the Lender or the LC Issuer have
any
obligation to make any Revolving Credit Loan or to issue any Letter of Credit
hereunder:
8.1 Indebtedness. Neither
the Borrower nor any of its Subsidiaries shall create, incur, assume, guarantee
or be or remain liable with respect to any Indebtedness other than the
following:
(a) Obligations;
(b) Indebtedness
for taxes, assessments or governmental charges to the extent that payment
therefor shall at the time not be required to be made in accordance with
Section
6.4;
(c) current
liabilities on open account for the purchase price of services, materials
and
supplies incurred by the Borrower in the ordinary course of business (not
as a
result of borrowing), so long as all of such open account current liabilities
shall be promptly paid and discharged when due or in conformity with customary
trade terms and practices, except for any such open account Indebtedness
which
is being contested in good faith by the Borrower, as to which adequate reserves
required by GAAP have been established and are being maintained and as to
which
no Encumbrance has been placed on any property of the Borrower or any of
its
Subsidiaries (other than Permitted Encumbrances);
(d) Guarantees
permitted under Section 8.2
hereof;
(e) Indebtedness
of any Subsidiary of the Borrower to the Borrower or to any other Subsidiary
of
the Borrower;
(f) Indebtedness
existing as of the date of this Agreement and disclosed on Schedule
8.1(f) and renewals and refinancings thereof, but not any increase in the
principal amounts thereof;
(g) Subordinated
Debt; and
(h) Indebtedness
(of a type of described in subclauses (a), (e), (f) or (h) of the term
Indebtedness) of the Borrower incurred in the ordinary course of business
for
Capital Expenditures, provided that such Indebtedness does not exceed
$100,000 in the aggregate at any time outstanding.
8.2 Contingent
Liabilities. Neither the Borrower nor any of its Subsidiaries
shall create, incur, assume, guarantee or be or remain liable with respect
to
any Guarantees other than (i) any Guaranty, and (ii) Guarantees resulting
from
the endorsement of negotiable instruments for deposit or collection in the
ordinary course of business.
8.3 Encumbrances. Neither
the Borrower nor any of its Subsidiaries shall create, incur, assume or suffer
to exist any mortgage, pledge, security interest, lien or other charge or
encumbrance of any kind, including the lien or retained security title of
a
conditional vendor upon or with respect to any of its property or assets
(“Encumbrances”), or assign or otherwise convey any right to receive
income, including the sale or discount of accounts receivable with or without
recourse, except the following (“Permitted Encumbrances”):
(a) Encumbrances
created under the Security Documents;
(b) liens
for
taxes, fees, assessments and other governmental charges to the extent that
payment of the same may be postponed or is not required in accordance with
the
provisions of Section 6.4;
(c) landlords’
and lessors’ liens in respect of rent not in default or liens in respect of
pledges or deposits under workmen’s compensation, unemployment insurance, social
security laws, or similar legislation (other than ERISA) or in connection
with
appeal and similar bonds incidental to litigation; mechanics’, warehouseman’s,
laborers’ and materialmen’s and similar liens, if the obligations secured by
such liens are not then delinquent for more than 30 days or are being contested
in good faith by appropriate proceedings and with respect to which adequate
reserves have been established and are being maintained in accordance with
GAAP;
liens securing the performance of bids, tenders, contracts (other than for
the
payment of money); and liens securing statutory obligations or surety,
indemnity, performance, or other similar bonds incidental to the conduct
of the
Borrower’s or any of its Subsidiaries’ business in the ordinary course and that
do not in the aggregate materially detract from the value of their property
or
materially impair the use thereof in the operation of their
business;
(d) judgment
liens securing judgments that (i) are fully covered by insurance, and (ii)
shall
not have been in existence for a period longer than 30 days after the creation
thereof or, if a stay of execution shall have been obtained, for a period
longer
than 10 days after the expiration of such stay;
(e) rights
of
lessors under Capitalized Leases, to the extent such Capitalized Leases are
permitted hereunder;
(f) easements,
rights of way, restrictions and other similar charges or Encumbrances relating
to real property and not interfering in a material way with the ordinary
conduct
of the Borrower’s business;
(g) Encumbrances
constituting a renewal, extension or replacement of any Permitted Encumbrance;
and
(h) Encumbrances
securing Indebtedness for Capital Expenditures to the extent such Indebtedness
is permitted by Section 8.1(h),
provided that (i) each Encumbrance is given solely to secure the purchase
price of the property which is the subject of such Capital Expenditure, does
not
extend to any other property and is given at the time of acquisition of the
property, and (ii) the Indebtedness secured thereby does not exceed the lesser
of the cost of such property or its fair market value at the time of
acquisition.
8.4 Merger;
Sale or Lease of Assets; Liquidation.
(a) The
Borrower shall not, and shall not permit any Subsidiary to, merge or consolidate
into or with any other Person or entity or liquidate or dissolve, other than
a
merger of a Subsidiary into another Subsidiary or into the Borrower (or a
liquidation of a Subsidiary into another Subsidiary or into the Borrower
under
Section 332 of the Code) or in connection with a Permitted Acquisition,
provided that both immediately before and immediately after any such
merger, no Default shall have occurred and be continuing.
(b) The
Borrower shall not, and shall not permit any Subsidiary to, Dispose of any
assets or properties, other than
(i) sales
of
Qualified Investments, inventory and obsolete or worn out furniture, fixtures
and equipment, in each case in the ordinary course of business and consistent
with past practices,
(ii) Dispositions
for fair value by the Borrower or its Subsidiaries not otherwise permitted
under
this Section 8.4(b);
provided that (A) at the time of such Disposition, no Default shall exist
or would result from such Disposition, (B) the aggregate book value of all
property Disposed of in reliance on this clause (ii)
shall not exceed $250,000 in the aggregate between the Closing Date and the
Maturity Date, and (C) the purchase price for such asset shall be paid to
the Borrower or such Subsidiary solely in cash.
8.5 Subsidiaries. The
Borrower shall not permit any of its Subsidiaries to issue any additional
shares
of their capital stock or other equity securities, any options therefor or
any
securities convertible thereto other than to the Borrower. Neither
the Borrower nor any of its Subsidiaries shall sell, transfer or otherwise
dispose of any of the capital stock or other equity securities of a Subsidiary,
except to the Borrower or any of its Subsidiaries. The Borrower shall
not, and shall not permit any of its Subsidiaries to, create or suffer to
exist
any consensual Encumbrances or restrictions on the ability of any Subsidiary
of
the Borrower to pay dividends or make any other distributions on its equity
interests held by the Borrower or pay any Indebtedness owed to the Borrower
or
any Subsidiary of the Borrower or to make loans or advances or transfer any
of
its assets to the Borrower or any other Subsidiary of the Borrower.
8.6 Restricted
Payments. The Borrower will not, and will not permit any of its
Subsidiaries to, declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment, except
(a) Subsidiaries
of the Borrower may declare and pay dividends to the Borrower;
(b) compensation
paid to employees, officers and directors in the ordinary course of business
and
consistent with prudent business practices; and
(c) the
Borrower may from time to time make repurchases of its common stock in an
aggregate amount not to exceed $2,000,000 in any Fiscal Year, provided that
at
the time any such repurchase is proposed to be made, and after giving effect
thereto, (i) no Default shall have occurred and be continuing or shall occur
by
reason of the making of such repurchase, (ii) the Borrower shall be in
compliance with all financial covenants under Section VII, and (iii) the
Borrower shall be Solvent and the Lender shall have received a certificate
of
the Borrower, certified by its chief financial officer, certifying that the
Borrower will be Solvent after giving effect to the share repurchase (and
providing such evidence thereof as the Lender may require).
8.7 Investments;
Purchases of Assets. Neither the Borrower nor any of its
Subsidiaries shall make or maintain any Investments or purchase or otherwise
acquire any material amount of assets other than:
(a) Investments
existing on the date hereof in Subsidiaries as described on Schedule
5.8(e);
(b) Qualified
Investments;
(c) purchases
of inventory in the ordinary course of business;
(d) normal
trade credit extended in the ordinary course of business and consistent with
prudent business practice;
(e) Indebtedness
permitted by Section 8.1(e);
(f) advances
to employees for business related expenses to be incurred in the ordinary
course
of business and consistent with past practices in an amount not to exceed
$250,000 in the aggregate outstanding at any one time, provided that
advances to any single employee shall not exceed $50,000 in the
aggregate;
(g) advances
to Guarantors for the purposes of (i) Capital Expenditures, or (ii) Permitted
Acquisitions; provided that in either case immediately prior to and after
giving
effect to such advances no Default shall have occurred and be continuing;
and
(h) Permitted
Acquisitions; provided that
(A) immediately
prior to and after giving effect to any such acquisition, no Default shall
have
occurred and be continuing, and the Borrower shall have delivered to the
Lender
a pro forma compliance certificate demonstrating compliance with Section
7.1
(after giving effect to such acquisition) and certifying that no Default
or
Event of Default would exist after giving effect to such
acquisition;
(B) the
representations and warranties made by the Loan Parties in the Loan Documents
shall be true and correct in all material respects at and as if made as of
the
date of such acquisition (after giving effect thereto) except to the extent
such
representations and warranties expressly relate to an earlier date;
(C) the
Lender shall have notified the Borrower that the Lender’s due diligence review
of such acquisition has been completed and that the results thereof are
satisfactory and
(D) the
consummation of such acquisition of the Acquired Person has occurred within
180
days after the notification from the Lender, as provided in the immediately
preceding clause (C) above.
8.8 ERISA
Compliance. Neither the Borrower nor any of its ERISA Affiliates
nor any Plan shall (i) engage in any Prohibited Acquisition which would have
a
material adverse effect on the business, financial condition or operations
of
the Borrower and its Subsidiaries taken as a whole, (ii) incur any “accumulated
funding deficiency” (within the meaning of Section 412(a) of the Code and
Section 302 of ERISA) whether or not waived, (iii) permit to exist any material
amount of “unfunded benefit liabilities” (within the meaning of Section
4001(a)(18) of ERISA, (iv) terminate any Pension Plan in a manner which could
result in the imposition of a lien on any property of the Borrower or any
of its
Subsidiaries, (v) fail to make any required contribution to any Multiemployer
Plan or (vi) completely or partially withdraw from a Multiemployer Plan if
such
complete or partial withdrawal will result in any material withdrawal liability
under Title IV of ERISA.
8.9 Transactions
with Affiliates. The Borrower will not, and will not permit any
of its Subsidiaries to, directly or indirectly, enter into any purchase,
sale,
lease or other transaction with any Affiliate except (i) transactions in
the
ordinary course of business on terms that are no less favorable to the Borrower
than those which might be obtained at the time in a comparable arm’s-length
transaction with any Person who is not an Affiliate and (ii) employment
contracts with senior management of the Borrower entered into in the ordinary
course of business and consistent with prudent business
practices. Notwithstanding the foregoing, the Borrower will not, and
will not permit any Subsidiary to, directly or indirectly, pay any management,
consulting, overhead, indemnity, guarantee or other similar fee or charge
to any
Affiliate.
8.10 Fiscal
Year. The Borrower and its Subsidiaries shall not change their
Fiscal Year without the prior written consent of the Lender.
SECTION
IX
DEFAULTS
9.1 Events
of Default. Any of the following shall constitute an Event of
Default:
(a) Non-Payment. The
Borrower or any other Loan Party fails to (i) pay when and as required to
be
paid herein, any amount of principal of any Revolving Credit Loan or any
LC
Disbursement or deposit any funds as cash collateral in respect of the Maximum
Drawing Amount, or (ii) pay within three (3) days after the same becomes
due,
any interest on any Revolving Credit Loan or on any LC Disbursement, or any
fee
due hereunder, or (iii) pay within five (5) days after the same becomes due,
any
other amount payable hereunder or under any other Loan Document; or
(b) Specific
Covenants. (i) The Borrower fails to perform or observe any term,
covenant or agreement contained in any of Sections 6.1(a),
(b),
(c),
(d),
(h)
or (i),
Sections 6.2(b),
6.3,
6.5,
6.6,
6.7,
6.8,
6.9,
6.12,
6.13
or Section VII or VIII, (ii) any of the Guarantors fails to perform or observe
any term, covenant or agreement contained in any Guaranty or (iii) any of
the
Loan Parties fails to perform or observe any term, covenant or agreement
contained in Sections 3 or 4 of the Security Agreement to
which it is a party; or
(c) Other
Defaults. Any Loan Party fails to perform or observe any other
covenant or agreement (not specified in Section 9.1(a)
or 9.1(b)
above) contained in any Loan Document on its part to be performed or observed
and such failure continues for 30 days; or
(d) Representations
and Warranties. Any representation, warranty, certification or
statement of fact made or deemed made by or on behalf of the Borrower or
any
other Loan Party herein, in any other Loan Document, or in any document
delivered in connection herewith or therewith shall be materially incorrect
or
misleading when made or deemed made; or
(e) Cross-Default. (i)
Any Loan Party or any Subsidiary thereof (A) fails to make any payment when
due
(whether by scheduled maturity, required prepayment, acceleration, demand,
or
otherwise) in respect of any Indebtedness or Guarantee (other than Indebtedness
hereunder and Indebtedness under Swap Agreements) having an aggregate principal
amount (including undrawn committed or available amounts and including amounts
owing to all creditors under any combined or syndicated credit arrangement)
of
more than $100,000, or (B) fails to observe or perform any other agreement
or
condition relating to any such Indebtedness or Guarantee or contained in
any
instrument or agreement evidencing, securing or relating thereto, or any
other
event occurs, the effect of which default or other event is to cause, or
to
permit the holder or holders of such Indebtedness or the beneficiary or
beneficiaries of such Guarantee (or a trustee or agent on behalf of such
holder
or holders or beneficiary or beneficiaries) to cause, with the giving of
notice
if required, such Indebtedness to be demanded or to become due or to be
repurchased, prepaid, defeased or redeemed (automatically or otherwise),
or an
offer to repurchase, prepay, defease or redeem such Indebtedness to be made,
prior to its stated maturity, or such Guarantee to become payable or cash
collateral in respect thereof to be demanded; (ii) there occurs under any
Swap
Agreement an Early Termination Date (as defined in such Swap Agreement)
resulting from (A) any event of default under such Swap Agreement as to which
a
Loan Party or any Subsidiary thereof is the Defaulting Party (as defined
in such
Swap Agreement) or (B) any Termination Event (as so defined) under such Swap
Agreement as to which a Loan Party or any Subsidiary thereof is an Affected
Party (as so defined) and, in either event, the Swap Termination Value owed
by
such Loan Party or such Subsidiary as a result thereof is greater than $100,000;
or (iii) the Borrower or any Loan Party shall fail to pay when due (after
any
applicable period of grace) any amount payable under one or more agreements
for
the use of real or personal property requiring aggregate payments in excess
of
$100,000 in any twelve month period, or fail to observe or perform any term,
covenant or agreement or relating to such agreement(s) for the use of real
or
personal property, and the result of any such failure is to permit any other
party to such agreement(s) to exercise remedies under or terminate such
agreement(s) prior to the expiration date thereof; or
(f) Insolvency
Proceedings, Etc. Any Loan Party or any Subsidiary thereof
institutes or consents to the institution of any proceeding under any
bankruptcy, insolvency, reorganization, receivership or other debtor relief
law,
or makes an assignment for the benefit of creditors; or applies for or consents
to the appointment of any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer for it or for all or any material part of
its
property; or any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer is appointed without the application or
consent
of such Person and the appointment continues undischarged or unstayed for
60
calendar days; or any proceeding under any bankruptcy, insolvency,
reorganization, receivership or other debtor relief law relating to any such
Person or to all or any material part of its property is instituted without
the
consent of such Person and continues undismissed or unstayed for 60 calendar
days, or an order for relief is entered in any such proceeding; or
(g) Inability
to Pay Debts; Attachment. (i) Any Loan Party or any Subsidiary
thereof becomes unable or admits in writing its inability or fails generally
to
pay its debts as they become due, or (ii) any writ or warrant of attachment
or
execution or similar process is issued or levied against all or any material
part of the property of any such Person and is not released, vacated or fully
bonded within 30 days after its issue or levy; or
(h) Judgments. There
is entered against any Loan Party or any Subsidiary thereof (i) one or more
final judgments or orders for the payment of money in an aggregate amount
(as to
all such judgments and orders) exceeding $100,000 (to the extent not covered
by
independent third-party insurance as to which the insurer is rated at least
“A”
by A.M. Best Company, has been notified of the potential claim and does not
dispute coverage), or (ii) any one or more non-monetary final judgments that
have, or could reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect and, in either case, (A) enforcement proceedings
are
commenced by any creditor upon such judgment or order, or (B) there is a
period
of 30 consecutive days while such judgment shall not have been discharged
during
which a stay of enforcement of such judgment, by reason of a pending appeal
or
otherwise, is not in effect; or
(i) ERISA. (i)
An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan
which
has resulted or could reasonably be expected to result in liability of the
Borrower under Title IV of ERISA to the Pension Plan, Multiemployer Plan or
the PBGC in an aggregate amount in excess of $100,000, or (ii) the Borrower
or
any ERISA Affiliate fails to pay when due, after the expiration of any
applicable grace period, any installment payment with respect to its withdrawal
liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate
amount in excess of $100,000; or
(j) Invalidity
of Loan Documents. Any material provision of any Loan Document,
at any time after its execution and delivery and for any reason other than
as
expressly permitted hereunder or thereunder or satisfaction in full of all
the
Obligations, ceases to be in full force and effect; or any Loan Party contests
in any manner the validity or enforceability of any provision of any Loan
Document; or any Loan Party denies that it has any or further liability or
obligation under any provision of any Loan Document, or purports to revoke,
terminate or rescind any provision of any Loan Document; or
(k) Change
of Control. There occurs any Change of Control; or
(l) Security
Documents. Any Security Document after delivery thereof pursuant
to Section 4.1
or 6.12
shall for any reason (other than pursuant to the terms thereof or solely
as a
result of action or inaction of the secured party thereunder) cease to create
a
valid and perfected first priority Encumbrance (subject to Permitted
Encumbrances) on the Collateral purported to be covered thereby.
9.2 Remedies
upon Event of Default. If any Event of Default occurs and is
continuing, the Lender may take any or all of the following
actions:
(a) declare
the Commitment of the Lender to make Revolving Credit Loans and any obligation
of the LC Issuer to issue or extend any Letter of Credit to be terminated,
whereupon such commitments and obligation shall be terminated;
(b) declare
the unpaid principal amount of all outstanding Revolving Credit Loans, all
interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of
which
are hereby expressly waived by the Borrower;
(c) require
that the Borrower Cash Collateralize the Maximum Drawing Amount;
and
(d) exercise
on behalf of itself, the Lender and the LC Issuer all rights and remedies
available to it, the Lender and the LC Issuer under the Loan
Documents;
provided,
however, that upon the occurrence of an Event of Default described in
Section 9.1(f),
immediately and automatically, the obligation of the Lender to make Revolving
Credit Loans and any obligation of the LC Issuer to issue or extend any Letter
of Credit shall automatically terminate, the unpaid principal amount of all
outstanding Revolving Credit Loans and all interest and other amounts as
aforesaid shall automatically become due and payable, and the obligation
of the
Borrower to Cash Collateralize the Maximum Drawing Amount as aforesaid shall
automatically become effective, in each case without further act of the
Lender.
9.3 Application
of Funds. After the exercise of remedies provided for in Section
9.2
(or after the Revolving Credit Loans have automatically become immediately
due
and payable and the Maximum Drawing Amount has automatically been required
to be
Cash Collateralized as set forth in the proviso to Section 9.2),
any amounts received on account of the Obligations shall be applied by the
Lender in the following order:
First,
to payment of that portion of the Obligations constituting fees, indemnities,
expenses and other amounts (including fees, charges and disbursements of
counsel
to the Lender ) payable to the Lender in its capacity as such;
Second,
to payment of that portion of the Obligations constituting fees, indemnities
and
other amounts (other than principal, interest and Letter of Credit Fees)
payable
to the Lender and the LC Issuer (including fees, charges and disbursements
of
counsel to the Lender and the LC Issuer, including fees and time charges
for
attorneys who may be employees of the Lender or the LC Issuer) and amounts
payable under Sections 2.9,
2.11,
2.12,
2.13
and 2.14,
ratably among them in proportion to the respective amounts described in this
clause Second payable to them;
Third,
to payment of that portion of the Obligations constituting accrued and unpaid
Letter of Credit Fees and interest on the Revolving Credit Loans, LC
Disbursements and other Obligations, ratably among the Lender and the LC
Issuer
in proportion to the respective amounts described in this clause Third
payable to them;
Fourth,
to payment of that portion of the Obligations constituting unpaid principal
of
the Revolving Credit Loans, LC Disbursements and amounts owing under Eligible
Swap Agreements, ratably among the Lender, the LC Issuer and the Swap Banks
in
proportion to the respective amounts described in this clause Fourth held
by them;
Fifth,
to the Lender for the account of the LC Issuer, to Cash Collateralize the
Maximum Drawing Amount;
Sixth
, to payment of that portion of the Obligations constituting unpaid amounts
owing under Secured Cash Management Agreements, ratably among the Cash
Management Banks in proportion to the respective amounts described in this
clause Sixth held by them; and
Last,
the balance, if any, after all of the Obligations have been indefeasibly
paid in
full, to the Borrower or as otherwise required by Law.
Subject
to Section 3.2,
amounts used to Cash Collateralize the Maximum Drawing Amount pursuant to
clause
Fifth above shall be applied to satisfy drawings under the then
outstanding Letters of Credit as they occur. If any amount remains on
deposit as cash collateral after all Letters of Credit have either been fully
drawn or expired, such remaining amount shall be applied to the other
Obligations, if any, in the order set forth above.
SECTION
X
ASSIGNMENT
AND PARTICIPATION
10.1 Successors
and Assigns. (a) Successors and Assigns
Generally. The provisions of this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns permitted hereby, except that neither of the Borrower nor any
other
Loan Party may assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of the Lender. Nothing in
this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby, Participants to the extent provided in subsection (d) of
this
Section and, to the extent expressly contemplated hereby, the Related Parties
of
each of the Lender and the LC Issuer) any legal or equitable right, remedy
or
claim under or by reason of this Agreement.
(b) Assignments
by Lender. The Lender may at any time assign to one or more
assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Revolving Credit Loans
(including for purposes of this Section 10.1(b),
participations in the Maximum Drawing Amount) at the time owing to it);
provided that any such assignment shall be subject to the following
conditions:
(i) Required
Consents. No consent shall be required for any assignment
except:
(A) the
consent of the Borrower (such consent not to be unreasonably withheld or
delayed) shall be required unless (1) an Event of Default has occurred and
is
continuing at the time of such assignment or (2) such assignment is to the
Lender, an Affiliate of the Lender or an Approved Fund; and
(B) the
consent of the LC Issuer (such consent not to be unreasonably withheld or
delayed) shall be required for any assignment that increases the obligation
of
the assignee to participate in exposure under one or more Letters of Credit
(whether or not then outstanding).
(ii) Assignment
and Assumption. The parties to each assignment shall execute and
deliver to the Lender an Assignment and Assumption.
(iii) No
Assignment to Borrower. No such assignment shall be made to the
Borrower or any of the Borrower’s Affiliates or Subsidiaries.
(iv) No
Assignment to Natural Persons. No such assignment shall be made
to a natural person.
Subject
to acceptance and recording thereof by the Lender pursuant to Section 10.1(c),
from and after the effective date specified in each Assignment and Assumption,
the assignee thereunder shall be a party to this Agreement and, to the extent
of
the interest assigned by such Assignment and Assumption, have the rights
and
obligations of the Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment
and
Assumption, be released from its obligations under this Agreement (and, in
the
case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, the Lender shall cease to be
a
party hereto but shall continue to be entitled to the benefits of Sections
2.9,
2.11,
2.12,
2.14
and 11.2
with respect to facts and circumstances occurring prior to the effective
date of
such assignment). Upon request, the Borrower (at its expense) shall
execute and deliver a Note to the assignee Lender. Any assignment or
transfer by the Lender of rights or obligations under this Agreement that
does
not comply with this subsection shall be treated for purposes of this Agreement
as a sale by the Lender of a participation in such rights and obligations
in
accordance with Section 10.2.
Notwithstanding
anything to the contrary in this Section 10.1(b),
the Lender will also have the right, without consent of the Borrower or the
Lender, to assign as security all or part of its rights under the Loan Documents
to any Federal Reserve Bank.
(c) Register. The
Lender, acting solely for this purpose as an agent of the Borrower, shall
maintain at the Lender’s Office a copy of each Assignment and Assumption
delivered to it and a register for the recordation of the names and addresses
of
the Lender, and the Commitment of, and principal amounts of the Revolving
Credit
Loans owing to, the Lender pursuant to the terms hereof from time to time
(the
“Register”). The entries in the Register shall be conclusive,
and the Borrower and the Lender may treat each Person whose name is recorded
in
the Register pursuant to the terms hereof as the Lender hereunder for all
purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by the
Borrower and the Lender, at any reasonable time and from time to time upon
reasonable prior notice.
(d) Certain
Pledges. The Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement (including
under its Notes, if any) to secure obligations of the Lender, including any
pledge or assignment to secure obligations to a Federal Reserve Bank;
provided that no such pledge or assignment shall release the Lender from
any of its obligations hereunder or substitute any such pledgee or assignee
for
the Lender as a party hereto.
(e) Electronic
Execution of Assignments. The words “execution,” “signed,”
“signature,” and words of like import in any Assignment and Assumption shall be
deemed to include electronic signatures or the keeping of records in electronic
form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for
in
any applicable law, including the Federal Electronic Signatures in Global
and
National Commerce Act, the New York State Electronic Signatures and Records
Act,
or any other similar state laws based on the Uniform Electronic Transactions
Act.
10.2 Participations. The
Lender shall have the right at any time and from time to time, without the
consent of or notice to the Borrower, to grant participations to one or more
banks or other financial institutions (each a “Participant”) in all or
any part of any Revolving Credit Loans owing to the Lender and the Note held
by
the Lender, and shall have the right to furnish from time to time to prospective
Participants copies of the Loan Documents and any information concerning
the
Borrowers in its possession. The Lender shall retain the sole right
to approve, without the consent of any Participant, any amendment, modification
or waiver of any provision of the Loan Documents, provided that the
documents evidencing any such participation may provide that, except with
the
consent of such Participant, the Lender will not consent to (a) the reduction
in
or forgiveness of the stated principal of or rate of interest on or commitment
fee with respect to the portion of any Revolving Credit Loan subject to such
participation, (b) the extension or postponement of any stated date fixed
for
payment of principal or interest or commitment fee with respect to the portion
of any Revolving Credit Loan subject to such participation, (c) the waiver
or
reduction of any right to indemnification of the Lender hereunder, or (d)
except
as otherwise permitted hereunder, the release of any
Collateral. Notwithstanding the foregoing, no participation shall
operate to increase the total Commitments hereunder or otherwise alter the
substantive terms of this Agreement. In the event of any such sale by
the Lender of participating interests to a Participant, the Lender’s obligations
under this Agreement shall remain unchanged, the Lender shall remain solely
responsible for the performance thereof, the Lender shall remain the holder
of
such Note for all purposes under this Agreement and the Borrower shall continue
to deal solely and directly with the Lender in connection with the Lender’s
rights and obligations under this Agreement.
SECTION
XI
GENERAL
11.1 Notices;
Effectiveness of Signatures.
(a) Unless
otherwise specifically provided herein, any notice or other communication
herein
required or permitted to be given shall be in writing and may be personally
served, or sent by telefacsimile or United States mail or courier service
and
shall be deemed to have been given when delivered in person or by courier
service, upon receipt of telefacsimile in complete and legible form, or three
Business Days after depositing it in the United States mail with postage
prepaid
and properly addressed; provided that notices to the Lender and the LC
Issuer shall not be effective until received. For the purposes
hereof, the address of each party hereto shall be as set forth on Schedule
11.1
hereof or (subject to said Schedule) in its Administrative Questionnaire
or
(i) as to the Borrower and the Lender, such other address as shall be
designated by such Person in a written notice delivered to the other parties
hereto and (ii) as to each other party, such other address as shall be
designated by such party in a written notice delivered to the
Lender. The Lender or the Borrower may, in its discretion, agree to
accept notices and other communications to such parties hereunder by electronic
communications pursuant to procedures approved by such parties, provided
that approval of such procedures may be limited to particular notices or
communications.
(b) Loan
Documents and notices under the Loan Documents may be transmitted and/or
signed
by telefacsimile and by signatures delivered in ‘PDF’ format by electronic
mail. The effectiveness of any such documents and signatures shall,
subject to applicable law, have the same force and effect as an original
copy
with manual signatures and shall be binding on all Loan Parties, and the
Lender. The Lender may also require that any such documents and
signature be confirmed by a manually-signed copy thereof; provided,
however, that the failure to request or deliver any such manually-signed
copy shall not affect the effectiveness of any facsimile document or
signature.
11.2 Expenses. Whether
or not the transactions contemplated herein shall be consummated, the Borrower
promises to reimburse the Lender and the LC Issuer for all reasonable
out-of-pocket fees and disbursements (including all reasonable attorneys’ fees
and collateral evaluation costs) incurred or expended in connection with
the
preparation, filing or recording, or interpretation of this Agreement and
the
other Loan Documents, or any amendment, modification, approval, consent or
waiver hereof or thereof, or in connection with the enforcement of any
Obligations or the satisfaction of any indebtedness of the Borrower hereunder
or
thereunder, or in connection with any litigation, proceeding or dispute in
any
way related to the credit hereunder. The Borrower will pay any taxes
(including any interest and penalties in respect thereof), other than the
Lender’s federal and state income taxes, payable on or with respect to the
transactions contemplated by the Loan Documents (the Borrower hereby agrees
to
indemnify the Lender and the LC Issuer with respect thereto).
11.3 Indemnification. The
Borrower agrees to indemnify and hold harmless the Lender and the LC Issuer,
as
well as their respective shareholders, directors, offices, agents, attorneys,
subsidiaries and Affiliates, from and against all damages, losses, settlement
payments, obligations, liabilities, claims, suits, penalties, assessments,
citations, directives, demands, judgments, actions or causes of action, whether
statutorily created or under the common law, all reasonable costs and expenses
(including, without limitation, reasonable fees and disbursements of attorneys,
engineers and consultants) and all other liabilities whatsoever (including,
without limitation, liabilities under Environmental Laws) which shall at
any
time or times be incurred, suffered, sustained or required to be paid by
any
such indemnified Person (except any of the foregoing which result from the
gross
negligence or willful misconduct of the indemnified Person) on account of
or in
relation to or any way in connection with any of the arrangements or
transactions contemplated by, associated with or ancillary to this Agreement,
the other Loan Documents or any other documents executed or delivered in
connection herewith or therewith, all as the same may be amended from time
to
time, or with respect to any Letters of Credit, whether or not all or part
of
the transactions contemplated by, associated with or ancillary to this
Agreement, any of the Loan Documents or any such other documents are ultimately
consummated. In any investigation, proceeding or litigation, or the
preparation therefor, the Lender shall select its own counsel and, in addition
to the foregoing indemnity, the Borrower agrees to pay promptly the reasonable
fees and expenses of such counsel. In the event of the commencement
of any such proceeding or litigation, the Borrower shall be entitled to
participate in such proceeding or litigation with counsel of its choice at
its
own expense, provided that such counsel shall be reasonably satisfactory
to the
Lender. The Borrower authorizes the Lender and the LC Issuer to
charge any deposit account or Note Record which it may maintain with any
of them
for any of the foregoing. The covenants of this Section 11.3
shall survive payment or satisfaction of payment of all amounts owing with
respect to the Notes, any other Loan Document or any other
Obligation.
11.4 Survival
of Covenants, Etc. All covenants, agreements, representations and
warranties made herein, in the other Loan Documents or in any documents or
other
papers delivered by or on behalf of the Borrower pursuant hereto shall be
deemed
to have been relied upon by the Lender and the LC Issuer, notwithstanding
any
investigation heretofore or hereafter made by any of them, and shall survive
the
making by the Lender of the Revolving Credit Loans as herein contemplated,
and
shall continue in full force and effect so long as any Obligation remains
outstanding and unpaid or the Lender has any obligation to make any Revolving
Credit Loans hereunder or the LC Issuer has any obligation to issue any Letter
of Credit. All statements contained in any certificate or other
writing delivered by or on behalf of the Borrower pursuant hereto or in
connection with the transactions contemplated hereby shall constitute
representations and warranties by the Borrower hereunder.
11.5 Set-Off. If
an Event of Default shall have occurred and be continuing, the Lender, the
LC
Issuer and each of their respective Affiliates is hereby authorized at any
time
and from time to time, after obtaining the prior written consent of the Lender,
to the fullest extent permitted by applicable law, to set off and apply any
and
all deposits (general or special, time or demand, provisional or final, in
whatever currency) at any time held and other obligations (in whatever currency)
at any time owing by the Lender, the LC Issuer or any such Affiliate to or
for
the credit or the account of the Borrower or any other Loan Party against
any
and all of the obligations of the Borrower or such Loan Party now or hereafter
existing under this Agreement or any other Loan Document to the Lender or
the LC
Issuer, irrespective of whether or not the Lender or the LC Issuer shall
have
made any demand under this Agreement or any other Loan Document and although
such obligations of the Borrower or such Loan Party may be contingent or
unmatured or are owed to a branch or office of the Lender or the LC Issuer
different from the branch or office holding such deposit or obligated on
such
indebtedness. The rights of the Lender, the LC Issuer and their
respective Affiliates under this Section are in addition to other rights
and
remedies (including other rights of setoff) that the Lender, the LC Issuer
or
their respective Affiliates may have. The Lender and the LC Issuer
agrees to notify the Borrower and the Lender promptly after any such setoff
and
application, provided that the failure to give such notice shall not
affect the validity of such setoff and application.
11.6 No
Waivers. No failure or delay by the Lender or the LC Issuer in
exercising any right, power or privilege hereunder, under the Notes or under
any
other Loan Document shall operate as a waiver thereof; nor shall any single
or
partial exercise thereof preclude any other or further exercise thereof or
the
exercise of any other right, power or privilege. No waiver shall
extend to or affect any Obligation not expressly waived or impair any right
consequent thereon. No course of dealing or omission on the part of
the Lender or the LC Issuer in exercising any right shall operate as a waiver
thereof or otherwise be prejudicial thereto. No notice to or demand
upon the Borrower shall entitle the Borrower to other or further notice or
demand in similar or other circumstances, except as otherwise specifically
provided in the Loan Documents. The rights and remedies herein and in
the Notes and the other Loan Documents are cumulative and not exclusive of
any
rights or remedies otherwise provided by agreement or law.
11.7 Amendments,
Waivers, etc. Neither this Agreement nor the Notes nor any other
Loan Document nor any provision hereof or thereof may be amended, waived,
discharged or terminated except by a written instrument signed by the Lender
and, with respect to Letters of Credit, the LC Issuer, and also, in the case
of
amendments, by the Borrower.
11.8 Treatment
of Certain Information; Confidentiality. Each of the Lender and
the LC Issuer agrees to maintain the confidentiality of the Information (as
defined below), except that Information may be disclosed (a) to its
Affiliates and to its and its Affiliates’ respective partners, directors,
officers, employees, agents, advisors and representatives (it being understood
that the Persons to whom such disclosure is made will be informed of the
confidential nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority
purporting to have jurisdiction over it (including any self-regulatory
authority, such as the National Association of Insurance Commissioners),
(c) to the extent required by applicable laws or regulations or by any
subpoena or similar legal process, (d) to any other party hereto, (e) in
connection with the exercise of any remedies hereunder or under any other
Loan
Document or any action or proceeding relating to this Agreement or any other
Loan Document or the enforcement of rights hereunder or thereunder, (f) subject
to an agreement containing provisions substantially the same as those of
this
Section, to (i) any assignee of or Participant in, or any prospective assignee
of or Participant in, any of its rights or obligations under this Agreement
or
(ii) any actual or prospective counterparty (or its advisors) to any swap
or
derivative transaction relating to the Borrower and its obligations, (g)
with
the consent of the Borrower or (h) to the extent such Information
(i) becomes publicly available other than as a result of a breach of this
Section or (ii) becomes available to the Lender, the LC Issuer or any of
their respective Affiliates on a nonconfidential basis from a source other
than
the Borrower
For
purposes of this Section, “Information” means all information received
from any Loan Party or any Subsidiary thereof relating to any Loan Party
or any
Subsidiary thereof or their respective businesses, other than any such
information that is available to the Lender or the LC Issuer on a
nonconfidential basis prior to disclosure by any Loan Party or any Subsidiary
thereof, provided that, in the case of information received from a Loan
Party or any such Subsidiary after the date hereof, such information is clearly
identified at the time of delivery as confidential. Any Person
required to maintain the confidentiality of Information as provided in this
Section shall be considered to have complied with its obligation to do so
if
such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.
Each
of
the Lender and the LC Issuer acknowledges that (a) the Information may include
material non-public information concerning the Borrower or a Subsidiary,
as the
case may be, (b) it has developed compliance procedures regarding the use
of
material non-public information and (c) it will handle such material non-public
information in accordance with applicable law, including Federal and state
securities laws.
11.9 Binding
Effect of Agreement. This Agreement shall be binding upon and
inure to the benefit of the Borrower, the Lender, and the LC Issuer, and
their
respective successors and assigns; provided that the Borrower may not
assign or transfer its rights or obligations hereunder.
11.10 Lost
Note, Etc. Upon receipt of an affidavit of an officer of the
Lender as to the loss, theft, destruction or mutilation of any Note or any
Security Document which is not a public record and, in the case of any such
loss, theft, destruction or mutilation, upon cancellation of such Note or
Security Document, if available, the Borrower will issue, in lieu thereof,
a
replacement Note or other Security Document in the same principal amount
thereof
and otherwise of like tenor.
11.11 Captions;
Counterparts. The captions in this Agreement are for convenience
of reference only and shall not define or limit the provisions
hereof. This Agreement and any amendment hereof may be executed in
several counterparts and by each party on a separate counterpart, each of
which
when so executed and delivered shall be an original, but all of which together
shall constitute one instrument. In proving this Agreement it shall
not be necessary to produce or account for more than one such counterpart
signed
by the party against whom enforcement is sought. Except as provided
in Section 4.1,
this Agreement shall become effective when it shall have been executed by
the
Lender and when the Lender shall have received counterparts hereof that,
when
taken together, bear the signatures of each of the other parties
hereto.
11.12 Entire
Agreement, Etc. The Loan Documents and any other documents
executed in connection herewith or therewith express the entire understanding
of
the parties with respect to the transactions contemplated hereby and supersede
all prior agreements with respect to the subject matter hereof.
11.13 Waiver
of Jury Trial. THE BORROWER AND THE LENDER HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THEIR RIGHT TO A JURY TRIAL WITH RESPECT
TO
ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS
AGREEMENT, THE NOTES OR ANY OF THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR
OBLIGATIONS HEREUNDER OR THEREUNDER, THE PERFORMANCE OF SUCH RIGHTS AND
OBLIGATIONS OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY INCLUDING, WITHOUT LIMITATION,
ANY
COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF THE LENDER
RELATING TO THE ADMINISTRATION OR ENFORCEMENT OF THE REVOLVING CREDIT LOANS
AND
THE LOAN DOCUMENTS, AND AGREE THAT THEY WILL NOT SEEK TO CONSOLIDATE ANY
SUCH
ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN
WAIVED.
EXCEPT
AS
PROHIBITED BY LAW, THE BORROWER AND THE LENDER HEREBY WAIVE ANY RIGHT THEY
MAY
HAVE TO CLAIM OR RECOVER IN ANY LITIGATION REFERRED TO IN THE PRECEDING SENTENCE
ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES
OTHER
THAN, OR IN ADDITION TO, ACTUAL DAMAGES.
THE
BORROWER (a) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE LENDER
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE LENDER WOULD NOT, IN THE
EVENT
OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (b) ACKNOWLEDGES
THAT
THE LENDER HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS TO WHICH EACH IS A PARTY BECAUSE OF, AMONG OTHER THINGS, THE
BORROWER’S WAIVERS AND CERTIFICATIONS CONTAINED HEREIN.
11.14 Governing
Law. This Agreement and each of the other Loan Documents are
contracts under the laws of the State of New York and shall for all purposes
be
construed in accordance with and governed by the laws of said State (excluding
the laws applicable to conflicts or choice of law).
11.15 Jurisdiction;
Consent to Service of Process. (a) The Borrower hereby
irrevocably and unconditionally submit, for itself and its property, to the
nonexclusive jurisdiction of the Supreme Court of the State of New York sitting
in New York County and of the United States District Court of the Southern
District of New York, and any appellate court from any thereof, in any action
or
proceeding arising out of or relating to any Loan Document, or for recognition
or enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect of any
such
action or proceeding may be heard and determined in such New York State or,
to the extent permitted by law, in such Federal court. Each of the
parties hereto agrees that a final, non-appealed judgment in any such action
or
proceeding shall be conclusive and may be enforced in other jurisdictions
by
suit on the judgment or in any other manner provided by law. Nothing
in this Agreement or any other Loan Document shall affect any right that
the
Borrower, the Lender or the LC Issuer may otherwise have to bring any action
or
proceeding relating to this Agreement or any other Loan Document against
any
other party hereto or their properties in the courts of any
jurisdiction.
(b) The
Borrower hereby irrevocably and unconditionally waives, to the fullest extent
it
may legally and effectively do so, any objection which it may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out
of or
relating to this Agreement or any other Loan Document in any court referred
to
in paragraph (a) of this Section. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of
an
inconvenient forum to the maintenance of such action or proceeding in any
such
court.
(c) Each
party to this Agreement irrevocably consents to service of process in the
manner
provided for notices in Section 11.1. Nothing
in this Agreement or any other Loan Document will affect the right of any
party
to this Agreement to serve process in any other manner permitted by
law.
11.16 USA
PATRIOT Act Notice. The Borrower acknowledges that it is subject
to the Patriot Act (as defined below) and the Lender hereby notifies the
Borrower that pursuant to the requirements of the USA PATRIOT Act (Title
III of
Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot Act”),
it is required to obtain, verify and record information that identifies each
Loan Party, which information includes the name and address of each Loan
Party
and other information that will allow the Lender to identify each Loan Party
in
accordance with the Patriot Act.
11.17 Contribution
Among Guarantors. In the Guaranty, executed on the date hereof,
the Guarantors have agreed that, as among themselves in their capacity as
guarantors of the Obligations, the ultimate responsibility for repayment
of the
Obligations, in the event that the Borrower fails to pay its Obligations
when
due, shall be equitably apportioned, to the extent consistent with the Loan
Documents, among the respective Guarantors (a) in the proportion that each,
in
its capacity as a guarantor, has benefited from the extensions of credit
to the
Borrower by the Lender under this Agreement, or (b) if such equitable
apportionment cannot reasonably be determined or agreed upon among the affected
Guarantors, in proportion to their respective net worths determined on or
about
the date hereof (or such later date as such Guarantor becomes party
thereto). In the event that any Guarantor, in its capacity as a
guarantor, pays an amount with respect to the Obligations in excess of its
proportionate share as set forth in Section 17 of the Guaranty, such Section
17
of the Guaranty requires each other Guarantor, to the extent consistent with
the
Loan Documents, to make a contribution payment to such over-paying Guarantor
in
an amount such that the aggregate amount paid by each Guarantor reflects
its
proportionate share of the Obligations. In the event of any default
by any Guarantor under Section 17 of the Guaranty, each other Guarantor will
bear, to the extent consistent with the Loan Documents, its proportionate
share
of the defaulting Guarantor’s obligation under such section. This
Section is intended to describe only the rights and obligations of the
Guarantors among themselves and shall not in any way affect the obligations
of
any Guarantor to the Lender under the Loan Documents (which obligations shall
at
all times constitute the joint and several obligations of all the
Guarantors).
11.18 Severability. The
provisions of this Agreement are severable and if any one clause or provision
hereof shall be held invalid or unenforceable in whole or in part in any
jurisdiction, then such invalidity or unenforceability shall affect only
such
clause or provision, or part thereof, in such jurisdiction, and shall not
in any
manner affect such clause or provision in any other jurisdiction, or any
other
clause or provision of this Agreement in any jurisdiction.
[Remainder
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{B0619138;
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IN
WITNESS WHEREOF, the undersigned have duly executed this Credit Agreement
under
seal as of the date first above written.
MEXICAN
RESTAURANTS, INC.
By:___________________________
Name:
Title:
▇▇▇▇▇
FARGO BANK, N.A., individually and as LC Issuer
By:___________________________
Name:
Title:
[SIGNATURE
PAGE TO CREDIT
AGREEMENT]
Table
of
Contents
Page
SECTION
I DEFINITIONS 1
1.1 Definitions. 1
1.2 Rules
of Interpretation. 20
SECTION
II DESCRIPTION OF CREDIT 20
2.1 Revolving
Credit Loans. 20
2.2 The
Note. 22
2.3 Notice
and Manner of Borrowing or Conversion of Revolving Credit
Loans. 23
2.4 Interest
Rates and Payments of Interest. 23
2.5 Fees. 25
2.6 Repayment
of Revolving Credit Loans 25
2.7 Prepayments 25
2.8 Method
and Application of Payments. 27
2.9 LIBOR
Indemnity 28
2.10 Computation
of Interest and Fees 28
2.11 Changed
Circumstances; Illegality. 28
2.12 Increased
Costs 29
2.13 Capital
Requirements 30
2.14 Taxes 30
SECTION
III LETTERS OF CREDIT 32
3.1 Issuance 32
3.2 Reimbursement
Obligation of the Borrower 32
3.3 Letter
of Credit Payments 32
3.4 Obligations
Absolute. 33
3.5 Reliance
by the LC Issuer and the Lender 34
SECTION
IV CONDITIONS OF REVOLVING CREDIT LOANS AND LETTERS OF
CREDIT 34
4.1 Conditions
Precedent to Initial Revolving Credit Loans and Letters of
Credit 34
4.2 Conditions
Precedent to all Revolving Credit Loans and Letters of Credit after the Closing
Date 37
SECTION
V REPRESENTATIONS AND WARRANTIES 38
5.1 Existence,
Qualification and Power 38
5.2 Authorization;
No Contravention 39
5.3 Governmental
Authorization; Other Consents 39
5.4 Binding
Effect 39
5.5 Financial
Statements; No Material Adverse Effect 39
5.6 Litigation 40
5.7 No
Default 40
5.8 Ownership
of Property; Encumbrances; Investments 41
5.9 Environmental
Compliance. 41
5.10 Insurance 42
5.11 Taxes 42
5.12 ERISA
Compliance 42
5.13 Subsidiaries;
Equity Interests; Loan Parties 43
5.14 Margin
Regulations; Investment Company Act 43
5.15 Disclosure 44
5.16 Compliance
with Laws 44
5.17 Intellectual
Property; Licenses, Etc 44
5.18 Solvency 44
5.19 Casualty,
Etc 44
5.20 Labor
Matters 44
5.21 Security
Documents 45
5.22 Compliance
with OFAC Rules and Regulations 45
5.23 Foreign
Assets Control Regulations, Etc 45
SECTION
VI AFFIRMATIVE COVENANTS 45
6.1 Financial
Statements 45
6.2 Conduct
of Business 47
6.3 Maintenance
and Insurance. 47
6.4 Taxes 47
6.5 Inspection
Rights 48
6.6 Maintenance
of Books and Records 48
6.7 Use
of Proceeds. 48
6.8 Further
Assurances 48
6.9 Notification
Requirements 49
6.10 ERISA
Reports. 49
6.11 Environmental
Compliance. 49
6.12 Covenant
to Guarantee Obligations and Give Security 50
6.13 Cash
Collateral Accounts 53
6.14 Release
of Real Estate Liens 53
6.15 Casa
Ole of Louisiana, Inc. 53
SECTION
VII FINANCIAL COVENANTS 53
7.1 Financial
Covenants. 53
SECTION
VIII NEGATIVE COVENANTS 55
8.1 Indebtedness 55
8.2 Contingent
Liabilities 56
8.3 Encumbrances 56
8.4 Merger;
Sale or Lease of Assets; Liquidation. 57
8.5 Subsidiaries 57
8.6 Restricted
Payments 57
8.7 Investments;
Purchases of Assets 58
8.8 ERISA
Compliance 59
8.9 Transactions
with Affiliates 59
8.10 Fiscal
Year 59
SECTION
IX DEFAULTS 59
9.1 Events
of Default 59
9.2 Remedies
upon Event of Default 62
9.3 Application
of Funds 62
SECTION
X ASSIGNMENT AND PARTICIPATION 64
10.1 Successors
and Assigns 64
10.2 Participations 65
SECTION
XI GENERAL 66
11.1 Notices;
Effectiveness of Signatures. 66
11.2 Expenses 67
11.3 Indemnification 67
11.4 Survival
of Covenants, Etc 67
11.5 Set-Off 68
11.6 No
Waivers 68
11.7 Amendments,
Waivers, etc 68
11.8 Treatment
of Certain Information; Confidentiality 68
11.9 Binding
Effect of Agreement 69
11.10 Lost
Note, Etc 69
11.11 Captions;
Counterparts 69
11.12 Entire
Agreement, Etc 70
11.13 Waiver
of Jury Trial 70
11.14 Governing
Law 70
11.15 Jurisdiction;
Consent to Service of Process 70
11.16 USA
PATRIOT Act Notice 71
11.17 Contribution
Among Guarantors 71
11.18 Severability 72
EXHIBITS
Form
of
A Revolving
Credit Note
B Notice
of Borrowing or Conversion
C Commitment
Increase Supplement
D Assignment
and Assumption
E Compliance
Certificate
F-1 Security
Agreement
F-2 Collateral
Assignment of Contracts
G-1 Pledge
Agreement by Borrower of Subsidiary Equity Interests
G-2 Pledge
Agreement by Guarantors of Subsidiary Equity Interests
H Intellectual
Property Security Agreement
I Form
of Guaranty
J Opinion
Matters – Counsel to Loan Parties
K Revolving
Loan Prepayment Request
SCHEDULES
1.1 Adjustments
to EBITDA
5.5 Material
Liabilities and Indebtedness
5.8(b) Existing
Encumbrances
5.8(c) Owned
Real Property
5.8(d)(i) Leased
Real Property (Lessee)
5.8(d)(ii) Leased
Real Property (Lessor)
5.8(e) Existing
Investments
5.13 Subsidiaries
and Other Equity Investments; Loan Parties
5.17 Intellectual
Property Matters
8.1(g) Existing
Indebtedness
11.1 Lender’s
Office, Certain Addresses for Notices
{B0619138;
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