EXHIBIT 10.40
================================================================================
CREDIT AGREEMENT
dated as of March 6, 1996
among
RUBY TUESDAY (GEORGIA), INC.,
THE LENDERS LISTED HEREIN,
and
SUNTRUST BANK, ATLANTA,
as Agent and
as Administrative Agent
================================================================================
TABLE OF CONTENTS
Page
----
ARTICLE I. DEFINITIONS; CONSTRUCTION............................ 2
Section 1.01. Definitions.......................................... 2
Section 1.02. Accounting Terms and Determination................... 18
Section 1.03. Other Definitional Terms............................. 18
Section 1.04. Exhibits and Schedules............................... 18
ARTICLE II. REVOLVING LOANS AND MONEY MARKET LOANS............... 18
Section 2.01. Revolving Loan Commitments; Use of
Proceeds........................................... 18
Section 2.02. Notes; Repayment of Principal........................ 20
Section 2.03. Voluntary Reduction of Commitments................... 20
Section 2.04. Money Market Loans................................... 20
ARTICLE III. TERM LOANS........................................... 23
Section 3.01. Amount of Term Loans; Use of Proceeds................ 23
Section 3.02. Notes; Repayment of Principal........................ 24
ARTICLE IV. GENERAL LOAN TERMS................................... 24
Section 4.01. Funding Notices...................................... 24
Section 4.02. Disbursement of Funds................................ 26
Section 4.03. Interest............................................. 27
Section 4.04. Interest Periods..................................... 29
Section 4.05. Fees................................................. 29
Section 4.06. Voluntary Prepayments of Borrowings.................. 30
Section 4.07. Payments, etc........................................ 31
Section 4.08. Interest Rate Not Ascertainable, etc................. 33
Section 4.09. Illegality........................................... 34
Section 4.10. Increased Costs...................................... 34
Section 4.11. Lending Offices...................................... 36
Section 4.12. Funding Losses....................................... 37
Section 4.13. Assumptions Concerning Funding of Euro-
dollar Advances.................................... 37
-i-
Section 4.14. Apportionment of Payments; Deemed
Utilization of Revolving Loan
Commitments by Money Market Loans.................. 37
Section 4.15. Sharing of Payments, Etc............................. 38
Section 4.16. Capital Adequacy..................................... 39
ARTICLE V. CONDITIONS TO BORROWINGS............................. 39
Section 5.01. Conditions Precedent to Initial Loans................ 39
Section 5.02. Conditions to Each Loan.............................. 42
ARTICLE VI. REPRESENTATIONS AND WARRANTIES....................... 43
Section 6.01. Corporate Existence; Compliance
with Law........................................... 43
Section 6.02. Corporate Power; Authorization....................... 43
Section 6.03. Enforceable Obligations.............................. 43
Section 6.04. No Legal Bar......................................... 44
Section 6.05. No Material Litigation............................... 44
Section 6.06. Investment Company Act, Etc.......................... 44
Section 6.07. Margin Regulations................................... 44
Section 6.08. Compliance with Environmental Laws................... 44
Section 6.09. Insurance............................................ 45
Section 6.10. No Default........................................... 46
Section 6.11. No Burdensome Restrictions........................... 46
Section 6.12. Taxes................................................ 46
Section 6.13. Subsidiaries......................................... 46
Section 6.14. Financial Statements................................. 46
Section 6.15. ERISA................................................ 47
Section 6.16. Patents, Trademarks, Licenses, Etc................... 49
Section 6.17. Ownership of Property................................ 49
Section 6.18. Indebtedness......................................... 49
Section 6.19. Financial Condition.................................. 50
Section 6.20. Labor Matters........................................ 50
Section 6.21. Payment or Dividend Restrictions..................... 51
Section 6.22. Transaction.......................................... 51
Section 6.23. Sharing Agreements................................... 51
Section 6.24. Disclosure........................................... 51
ARTICLE VII. AFFIRMATIVE COVENANTS................................ 51
Section 7.01. Corporate Existence, Etc............................. 51
Section 7.02. Compliance with Laws, Etc............................ 52
Section 7.03. Payment of Taxes and Claims, Etc..................... 52
Section 7.04. Keeping of Books..................................... 52
Section 7.05. Visitation, Inspection, Etc.......................... 52
Section 7.06. Insurance; Maintenance of Properties................. 52
-ii-
Section 7.07. Reporting Covenants.................................. 53
Section 7.08. Financial Covenants.................................. 57
Section 7.09. Notices Under Certain Other Indebtedness............. 58
Section 7.10. Additional Credit Parties and Collateral............. 58
ARTICLE VIII. NEGATIVE COVENANTS................................... 58
Section 8.01. Indebtedness......................................... 58
Section 8.02. Liens................................................ 59
Section 8.03. Mergers, Sales, Etc.................................. 61
Section 8.04. Investments, Loans, Etc.............................. 61
Section 8.05 Letters of Credit.................................... 63
Section 8.06. Sale and Leaseback Transactions...................... 63
Section 8.07. Transactions with Affiliates......................... 63
Section 8.08. Changes in Business.................................. 64
Section 8.09. ERISA................................................ 64
Section 8.10. Limitation on Payment Restrictions
Affecting Consolidated Companies................... 64
Section 8.11. Actions Under Certain Documents...................... 64
Section 8.12. Changes in Fiscal Year............................... 65
Section 8.13. Issuance of Stock by Subsidiaries.................... 65
ARTICLE IX. EVENTS OF DEFAULT.................................... 65
Section 9.01. Payments............................................. 65
Section 9.02. Covenants Without Notice............................. 65
Section 9.03. Other Covenants...................................... 65
Section 9.04. Representations...................................... 65
Section 9.05. Non-Payments of Other Indebtedness................... 66
Section 9.06. Defaults Under Other Agreements;
Change in Control Provisions....................... 66
Section 9.07. Bankruptcy........................................... 66
Section 9.08. ERISA................................................ 67
Section 9.09. Judgments............................................ 67
Section 9.10. Ownership of Credit Parties.......................... 68
Section 9.11. Change in Control of Borrower........................ 68
Section 9.12. Default Under Other Credit
Documents; Sharing Agreements...................... 68
ARTICLE X. THE AGENT AND THE ADMINISTRATIVE AGENT............... 69
Section 10.01 Appointment of Agent................................. 69
Section 10.02 Authorization of Agent with Respect
to the Security Documents.......................... 69
Section 10.03 Nature of Duties of Agent............................ 70
Section 10.04 Lack of Reliance on the Agent........................ 70
Section 10.05 Certain Rights of the Agent.......................... 71
Section 10.06 Reliance by Agent.................................... 71
-iii-
Section 10.07. Indemnification of Agent............................ 71
Section 10.08. The Agent in its Individual
Capacity.......................................... 72
Section 10.09. Holders of Notes.................................... 72
Section 10.10. Successor Agent..................................... 72
Section 10.11. Replacement of Administrative Agent
with the Borrower................................. 73
ARTICLE XI. MISCELLANEOUS....................................... 73
Section 11.01. Notices............................................. 73
Section 11.02. Amendments, Etc..................................... 74
Section 11.03. No Waiver; Remedies Cumulative...................... 74
Section 11.04. Payment of Expenses, Etc............................ 75
Section 11.05. Right of Setoff..................................... 76
Section 11.06. Benefit of Agreement; Assignments;
Participations.................................... 77
Section 11.07. Governing Law; Submission to
Jurisdiction...................................... 80
Section 11.08. Independent Nature of Lenders' Rights............... 81
Section 11.09. Counterparts........................................ 81
Section 11.10. Effectiveness; Termination of
Commitments; Survival............................. 81
Section 11.11. Severability........................................ 81
Section 11.12. Independence of Covenants........................... 82
Section 11.13. Change in Accounting Principles,
Fiscal Year or Tax Laws........................... 82
Section 11.14. Headings Descriptive; Entire Agreement.............. 82
SCHEDULES
---------
Schedule 1.01 Commitments
Schedule 6.01 Organization and Ownership of
Subsidiaries
Schedule 6.05 Certain Pending and Threatened
Litigation
Schedule 6.08(a) Environmental Compliance
Schedule 6.08(b) Environmental Notices
Schedule 6.08(c) Environmental Permits
Schedule 6.10 No Defaults
Schedule 6.11 Burdensome Restrictions
Schedule 6.12 Tax Filings and Payments
Schedule 6.13 Material Subsidiaries
Schedule 6.15 Employee Benefit Matters
Schedule 6.16 Patent, Trademark, License, and
Other Intellectual Property
Matters
Schedule 6.17 Ownership of Properties
-iv-
Schedule 6.20 Labor and Employment Matters
Schedule 6.21 Dividend Restrictions
Schedule 8.01 Existing Indebtedness
Schedule 8.02 Existing Liens
EXHIBITS
--------
Exhibit A - Form of Revolving Credit Note
Exhibit B - Form of Term Note
Exhibit C - Form of Money Market Note
Exhibit D - Form of Guaranty Agreement
Exhibit E - Form of Money Market Bid Request
Exhibit F - Form of Invitation to Bid
Exhibit G - Form of Money Market Bid
Exhibit H - Form of Money Market Bid Accept/Reject
Letter
Exhibit I - Form of Closing Certificate
Exhibit J-1 - Form of Opinion of Corporate Counsel
Exhibit J-2 - Form of Opinion of Powell, Goldstein,
Xxxxxx & Xxxxxx
Exhibit K - Form of Assignment and Acceptance
-v-
CREDIT AGREEMENT
----------------
THIS CREDIT AGREEMENT made and entered into as of March 6, 1996, by
and among RUBY TUESDAY (GEORGIA), INC., a Georgia corporation, to be known
following the Effective Date (as such term is defined below) as Ruby Tuesday,
Inc. (the "Borrower"), SUNTRUST BANK, ATLANTA, a banking corporation organized
--------
under the laws of the State of Georgia ("SunTrust"), the other banks and lending
--------
institutions listed on the signature pages hereof, and any assignees of SunTrust
or such other banks and lending institutions which become "Lenders" as provided
herein (SunTrust, and such other banks, lending institutions, and assignees
referred to collectively herein as the "Lenders"), SUNTRUST BANK, ATLANTA, in
-------
its capacity as agent for the Lenders and each successor agent for such Lenders
as may be appointed from time to time pursuant to Article X hereof (the
"Agent") and SUNTRUST BANK, ATLANTA in its capacity as administrative agent for
-----
the Lenders and each successor administrative agent for such Lenders as may be
appointed from time to time pursuant to Article X hereof (the "Administrative
--------------
Agent");
-----
W I T N E S S E T H:
--------------------
WHEREAS, Xxxxxxxx Restaurants Inc., a Delaware corporation
("Xxxxxxxx") has proposed, with shareholder approval, to divide Xxxxxxxx into
--------
three separate businesses: (i) casual dining; (ii) family dining; and (iii)
health care food and nutrition services;
WHEREAS, in order to accomplish this division, Xxxxxxxx proposes to
distribute to its shareholders all of the shares of the common stock of Xxxxxxxx
Fresh Cooking, Inc. ("MFCI"), a wholly-owned subsidiary of Xxxxxxxx, and all of
----
the shares of Xxxxxxxx Health Care, Inc. ("MHCI"), also a wholly-owned
----
subsidiary of Xxxxxxxx (collectively, the "Distribution");
------------
WHEREAS, in connection with the Distribution, Xxxxxxxx proposes to
reincorporate in Georgia by merging into Ruby Tuesday (Georgia), Inc. (the
"Merger") and simultaneously therewith, to effect a one-for-two reverse stock
-------
split (the "Reverse Stock Split");
-------------------
WHEREAS, immediately thereafter, Ruby Tuesday, Inc. (a current
Subsidiary of Xxxxxxxx) will merge into Ruby Tuesday (Georgia), Inc. and Ruby
Tuesday (Georgia), Inc. will change its name to Ruby Tuesday, Inc.;
WHEREAS, upon the consummation of the Distribution, the Merger and the
Reverse Stock Split (collectively, the "Transaction") on March 9, 1996 (the
-----------
"Transaction Date"), Xxxxxxxx will be divided into three publicly-owned
-----------------
companies: (i) MFCI, which will continue the cafeteria business of Xxxxxxxx,
(ii) MHCI, which will continue the health care food and nutrition services
business of Xxxxxxxx, and (iii) the Borrower, which will continue the casual
dining business of Xxxxxxxx;
WHEREAS, in connection with the Transaction, the outstanding credit
facilities of Xxxxxxxx will be repaid and terminated and the Borrower wishes to
establish a credit facility upon the terms set forth herein;
WHEREAS, at the request of the Borrower, the Lenders have agreed,
effective as of the Effective Date (as such term is defined below), to provide
certain credit facilities to the Borrower on the terms and subject to the
conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, Borrower, the Lenders and the Agent agree, upon the
terms and subject to the conditions set forth herein as follows:
ARTICLE I.
DEFINITIONS; CONSTRUCTION
-------------------------
Section 1.01. Definitions. In addition to the other terms defined
-----------
herein, the following terms used herein shall have the meanings herein specified
(to be equally applicable to both the singular and plural forms of the terms
defined):
"Adjusted LIBO Rate" shall mean, with respect to each Interest Period
------------------
for a Eurodollar Advance, the rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) determined pursuant to the following formula:
Adjusted LIBO Rate = LIBOR
------------------------------
1.00 - LIBOR Reserve Percentage
As used herein, LIBOR Reserve Percentage shall mean, for any Interest Period for
a Eurodollar Advance, the reserve percentage (expressed as a decimal) equal to
the then stated maximum rate of all reserves requirements (including, without
limitation, any marginal, emergency, supplemental, special or other reserves)
applicable to any member bank of the Federal Reserve System in respect of
Eurocurrency liabilities as defined in Regulation D (or
-2-
against any successor category of liabilities as defined in Regulation D).
"Administrative Agent" shall mean SunTrust, a Georgia banking
--------------------
corporation, and any successor administrative agent appointed pursuant to
Section 10.10 hereof or, at the election of the Borrower exercised in accordance
with Section 10.11 hereof, the Borrower.
"Advance" shall mean any principal amount advanced and remaining
-------
outstanding at any time as (i) the Revolving Loans, which Advances shall be made
or outstanding as Base Rate Advances or Eurodollar Advances, as the case may be,
(ii) a Money Market Loan, which Advances shall be made or outstanding as Money
Market Rate Advances, or (iii) the Term Loans, which Advances shall be made or
outstanding as Base Rate Advances or Eurodollar Advances, as the case may be.
"Affiliate" of any Person means any other Person directly or
---------
indirectly controlling, controlled by, or under common control with, such
Person, whether through the ownership of voting securities, by contract or
otherwise. For purposes of this definition, "control" (including with
correlative meanings, the terms "controlling", "controlled by", and "under
common control with") as applied to any Person, means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of that Person.
"Agent" shall mean SunTrust, a Georgia banking corporation, and any
-----
successor agent appointed pursuant to Section 10.10 hereto.
"Agreement" shall mean this Credit Agreement, as hereafter amended,
---------
restated, supplemented or otherwise modified from time to time.
"Assignment and Acceptance" shall mean an assignment and acceptance
-------------------------
entered into by a Lender and an Eligible Assignee in accordance with the terms
of this Agreement and substantially in the form of Exhibit K.
---------
"Bankruptcy Code" shall mean The Bankruptcy Code of 1978, as amended
---------------
and in effect from time to time (11 U.S.C. (S)101 et seq.).
-- ---
"Base Rate" shall mean (with any change in the Base Rate to be
---------
effective as of the date of change of either of the following rates) the higher
of (i) the rate which the Agent publicly announces from time to time as its
prime lending rate, as in effect from time to time, and (ii) the Federal Funds
Rate, as in
-3-
effect from time to time, plus one-half of one percent (0.50%) per annum. The
----
Agent's prime lending rate is a reference rate and does not necessarily
represent the lowest or best rate actually charged to customers; the Agent may
make commercial loans or other loans at rates of interest at, above or below the
Agent's prime lending rate.
"Base Rate Advance" shall mean an Advance made or outstanding as a
-----------------
Revolving Loan or a Term Loan, bearing interest based on the Base Rate.
"Base Rate Borrowing" shall mean a Borrowing made up of Base Rate
-------------------
Advances.
"Borrower" shall mean Ruby Tuesday, (Georgia) Inc., a Georgia
--------
corporation, to be known as of the Effective Date as Ruby Tuesday, Inc. and its
successors and permitted assigns.
"Borrowing" shall mean the incurrence by Borrower under any Facility
---------
of Advances of one Type concurrently having the same Interest Period or the
continuation or conversion of an existing Borrowing or Borrowings in whole or in
part.
"Business Day" shall mean any day excluding Saturday, Sunday and any
------------
other day on which banks are required or authorized to close in Atlanta, Georgia
and, if the applicable Business Day relates to Eurodollar Advances, any day on
---
which trading is not carried on by and between banks in deposits of the
applicable currency in the applicable interbank Eurocurrency market.
"Capital Lease" shall mean, as applied to any Person, any lease of any
-------------
property (whether real, personal or mixed) by such Person as lessee which would,
in accordance with GAAP, be required to be classified and accounted for as a
capital lease on a balance sheet of such Person, other than, in the case of
Borrower or any of its Subsidiaries, any such lease under which Borrower or a
wholly-owned Subsidiary of Borrower is the lessor.
"Capital Lease Obligation" shall mean, with respect to any Capital
------------------------
Lease, the amount of the obligation of the lessee thereunder which would, in
accordance with GAAP, appear on a bal ance sheet of such lessee in respect of
such Capital Lease.
"Change in Control Provision" shall mean any term or provision
---------------------------
contained in any indenture, debenture, note, or other agreement or document
evidencing or governing Indebtedness of Borrower evidencing debt or a commitment
to extend loans in excess of
-4-
$2,000,000 which requires, or permits the holder(s) of such Indebtedness of
Borrower to require that such Indebtedness of Borrower be redeemed, repurchased,
defeased, prepaid or repaid, either in whole or in part, or the maturity of such
Indebtedness of Borrower to be accelerated in any respect, as a result of a
change in ownership of the capital stock of Borrower or voting rights with
respect thereto.
"Closing Date" shall mean March 6, 1996.
------------
"Commitment" shall mean, for any Lender at any time, the sum of its
----------
Revolving Loan Commitment and its Term Loan Commitment.
"Commitment Fee" shall have the meaning ascribed to it in Section
--------------
4.05(a).
"Consolidated Companies" shall mean, collectively, Borrower and all of
----------------------
its Subsidiaries.
"Consolidated Funded Debt" shall mean, as of any date of
------------------------
determination, the Funded Debt of the Consolidated Companies.
"Consolidated Interest Expense" shall mean, for any period, total
-----------------------------
interest expense of the Consolidated Companies (including without limitation,
interest expense attributable to Capital Leases, all capitalized interest, all
commissions, discounts and other fees and charges owed with respect to bankers
acceptance financing, net costs (i.e., costs minus benefits) under Interest Rate
----
Contracts, and total interest expense (whether shown as interest expense or as
loss and expenses on sales of receivables) under a receivables purchase
facility) determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Income (Loss)" shall mean, with reference to any
------------------------------
period, the net income (or deficit) of the Consolidated Companies for such
period (taken as a cumulative whole), after deducting all operating expenses,
provisions for all taxes and reserves (including reserves for deferred income
taxes) and all other proper deductions, all determined in accordance with GAAP
on a consolidated basis, after eliminating all intercompany transactions and
after deducting portions of income properly attributable to minority interests,
if any, in the stock and surplus of the Subsidiaries of the Borrower.
"Consolidated Net Worth" shall mean the shareholders' equity of the
----------------------
Borrower calculated in accordance with GAAP, less treasury stock.
-5-
"Contractual Obligation" of any Person shall mean any provision of any
----------------------
security issued by such Person or of any agreement, instrument or undertaking
under which such Person is obligated or by which it or any of the property owned
by it is bound.
"Credit Documents" shall mean, collectively, this Agreement, the
----------------
Notes, the Guaranty Agreement and all other instruments, documents,
certificates, agreements and writings executed in connection herewith.
"Credit Parties" shall mean, collectively, each of the Borrower and
--------------
the Guarantors.
"Default" shall mean any condition or event which, with notice or
-------
lapse of time or both, would constitute an Event of Default.
"Dollar" and "U.S. Dollar" and the sign "$" shall mean lawful money of
------ ----------- -
the United States of America.
"EBITR" shall mean for any period, the Consolidated Net Income (Loss)
-----
of the Consolidated Companies, plus, to the extent deducted therefrom in
----
determining Consolidated Net Income (Loss), the sum of (i) Consolidated Interest
Expense, (ii) provision for income taxes (whether paid or deferred), (iii)
Rental Obligations for such period, and (iv) Restructuring Charges, and without
giving effect to any extraordinary gains or losses, any other non-cash charges
or gains or losses from sales of assets other than inventory sold in the
ordinary course of business.
"Effective Date" shall mean the first Business Day following the
--------------
Transaction Date or such later date on which the conditions to the initial Loans
set forth in Section 5.01 and 5.02 are satisfied.
"Eligible Assignee" shall mean (i) a commercial bank organized under
-----------------
the laws of the United States or any state thereof having total assets in excess
of $1,000,000,000.00 or any com mercial finance or asset-based lending Affiliate
of any such commercial bank and (ii) any Lender.
"Environmental Laws" shall mean all federal, state, local and foreign
------------------
statutes and codes or regulations, rules or ordinances issued, promulgated, or
approved thereunder, now or hereafter in effect (including, without limitation,
those with respect to asbestos or asbestos containing material or exposure to
asbestos or asbestos containing material), relating to pollution or protection
of the environment and relating to public health and safety, relating to (i)
emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals or industrial
-6-
toxic or hazardous constituents, substances or wastes, including without
limitation, any Hazardous Substance, petroleum including crude oil or any
fraction thereof, any petroleum product or other waste, chemicals or substances
regulated by any Environmental Law into the environment (including, without
limitation, ambient air, surface water, ground water, land surface or subsurface
strata), or (ii) the manufacture, processing, distribution, use, generation,
treatment, storage, disposal, transport or handling of any Hazardous Substance,
petroleum including crude oil or any fraction thereof, any petroleum product or
other waste, chemicals or substances regulated by any Environmental Law, and
(iii) underground storage tanks and related piping, and emissions, discharges
and releases or threatened releases therefrom, such Environmental Laws to
include, without limitation (a) the Clean Air Act (42 U.S.C. (S) 7401 et seq.),
-- ---
(b) the Clean Water Act (33 U.S.C. (S) 1251 et seq.), (c) the Resource
-- ---
Conservation and Recovery Act (42 U.S.C. (S) 6901 et seq.), (d) the Toxic
-- ---
Substances Control Act (15 U.S.C. (S) 2601 et seq.), (e) the Comprehensive
-- ---
Environmental Response Compensation and Liability Act, as amended by the
Superfund Amendments and Reauthorization Act (42 U.S.C. (S) 9601 et seq.), and
-- ---
(f) all applicable national and local laws or regulations with respect to
environmental control.
"ERISA" shall mean the Employee Retirement Income Security Act of
-----
1974, as amended and in effect from time to time.
"ERISA Affiliate" shall mean, with respect to any Person, each trade
---------------
or business (whether or not incorporated) which is a member of a group of which
that Person is a member and which is under common control within the meaning of
the regulations promulgated under Section 414 of the Tax Code.
"Eurodollar Advance" shall mean an Advance made or outstanding as a
------------------
Revolving Loan or a Term Loan, bearing interest based on the Adjusted LIBO Rate.
"Eurodollar Borrowing" shall mean a Borrowing made up of Eurodollar
--------------------
Advances.
"Event of Default" shall have the meaning provided in Article IX.
----------------
"Executive Officer" shall mean with respect to any Person, the
-----------------
President, Vice Presidents, Chief Financial Officer, Treasurer, Secretary and
any Person holding comparable offices or duties.
"Facility" or "Facilities" shall mean the Revolving Loan Commitments,
-------- ----------
the Term Loans or the Money Market Loan option, as the context may indicate.
-7-
"Federal Funds Rate" shall mean for any period, a fluctuating interest
------------------
rate per annum equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with member banks 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 Atlanta, or, if such rate is not so published for
any day which is a Business Day, the average of the quotations for such day on
such transactions received by the Agent from three Federal funds brokers of
recognized standing selected by the Agent.
"Fiscal Year" shall mean any period of 52 (or, if applicable 53)
-----------
consecutive weeks ending on the first Saturday occurring after May 30 of any
year; references to a Fiscal Year with a number corresponding to any calendar
year (e.g., "Fiscal Year 1996") refer to the Fiscal Year ending on the first
Saturday occurring after May 30 of that year.
"Fiscal Year End" shall mean the last day of any Fiscal Year.
---------------
"Fixed Charge Coverage Ratio" shall mean, for any period, the ratio of
---------------------------
(i) EBITR to (ii) Fixed Charges for such period.
"Fixed Charges" shall mean, with reference to any period, determined
-------------
in accordance with GAAP on a consolidated basis, the sum of the following for
the Consolidated Companies, after eliminating all intercompany items:
(a) Consolidated Interest Expense for such period; and
(b) all Rental Obligations payable as lessee under any operating lease
properly charged or chargeable to income during such period in
accordance with GAAP;
provided that any interest charges or rentals paid or accrued by any Person
--------
acquired by the Borrower or any of its Subsidiaries during such period, through
purchase, merger, consolidation or otherwise, shall be included in "Fixed
Charges" only to the extent that the earnings of such Person are taken into
account in determining EBITR for such period.
"Funded Debt" shall mean, as applied to any Person, all Indebtedness
-----------
of such Person which by its terms or by the terms of any instrument or agreement
relating thereto matures, or which is otherwise payable or unpaid, one year or
more from, or is directly or indirectly renewable or extendable at the option of
the debtor
-8-
to a date one year or more (including an option of the debtor under
a revolving credit or similar agreement obligating the lender or lenders to
extend credit over a period of one year or more) from, the date of the creation
thereof, provided that Funded Debt shall include, as at any date of
-------- ----
determination, any portion of such Indebtedness outstanding on such date which
matures on demand or within one year from such date (whether by sinking fund,
other required prepayment, or final payment at maturity) and shall also include
all Indebtedness of such Person for borrowed money under a line of credit,
guidance line, revolving credit, bankers acceptance facility or similar
arrangement for borrowed money, including, without limitation, all unpaid
drawings under letters of credit and unreimbursed amounts pursuant to letter of
credit reimbursement agreements, regardless of the maturity date thereof. In
addition, there shall also be included in Funded Debt the present value of all
minimum lease commitments to make payments with respect to operating leases of
such Person, determined based upon a discount rate of 10% in accordance with
discounted present value analytical methodology.
"GAAP" shall mean generally accepted accounting principles set forth
----
in the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or, if no such
statements are promulgated, then such other statements by such other entity as
may be approved by a significant segment of the accounting profession, which are
applicable to the circum stances as of the date of determination.
"Guarantors" shall mean, (i) Tias, Inc., a Texas corporation and (ii)
----------
all other Material Subsidiaries of the Borrower, and their respective successors
and permitted assigns.
"Guaranty" shall mean any contractual obligation, contingent or
--------
otherwise (other than letters of credit), of a Person with respect to any
Indebtedness or other obligation or liability of another Person, including
without limitation, any such Indebtedness, obligation or liability directly or
indirectly guaranteed, endorsed, co-made or discounted or sold with recourse by
that Person, or in respect of which that Person is otherwise directly or
indirectly liable, including contractual obligations (contingent or otherwise)
arising through any agreement to purchase, repurchase, or otherwise acquire such
Indebtedness, obligation or liability or any security therefor, or any agreement
to provide funds for the payment or discharge thereof (whether in the form of
loans, advances, stock purchases, capital contributions or otherwise), or to
maintain solvency, assets, level of income, or other financial condition, or to
make any payment other than for value received. The amount of any Guaranty
-9-
shall be deemed to be an amount equal to the stated or determinable amount of
the primary obligation in respect of which guaranty is made or, if not so stated
or determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such
Person in good faith.
"Guaranty Agreement" shall mean the Guaranty Agreement executed by
------------------
each of the Material Subsidiaries of the Borrower in favor of the Lenders and
the Agent, substantially in the form of Exhibit D as the same may be amended,
---------
restated or supplemented from time to time.
"Hazardous Substances" shall have the meaning assigned to that term in
--------------------
the Comprehensive Environmental Response Compensation and Liability Act of 1980,
as amended by the Superfund Amendments and Reauthorization Acts of 1986.
"Hostile Acquisition" shall mean any Investment resulting in control
-------------------
of a Person involving a tender offer or proxy contest that has not been
recommended or approved by the board of directors of the Person that is the
subject of the Investment prior to the first public announcement or disclosure
relating to such Investment.
"Indebtedness" of any Person shall mean, without duplication (i) all
------------
obligations of such Person which in accordance with GAAP would be shown on the
balance sheet of such Person as a liability (including, without limitation,
obligations for borrowed money and for the deferred purchase price of property
or services, and obligations evidenced by bonds, debentures, notes or other
similar instruments); (ii) all Capital Lease Obligations; (iii) all Guaranties
of such Person; (iv) Indebtedness of others secured by any Lien upon property
owned by such Person, whether or not assumed; and (v) obligations or other
liabilities under currency contracts, Interest Rate Contracts, or similar
agreements or combinations thereof. Notwithstanding the foregoing, in
determining the Indebtedness of any Person, there shall be included all
obligations of such Person of the character referred to in clauses (i) through
(v) above deemed to be extinguished under GAAP but for which such Person remains
legally liable except to the extent that such obligations (x) have been defeased
in accordance with the terms of the applicable instruments governing such
obligations and (y) the accounts or other assets dedicated to such defeasance
are not included as assets on the balance sheet of such Person.
"Interest Period" shall mean (i) as to any Eurodollar Advances, the
---------------
interest period selected by the Borrower pursuant to Section 4.04(a) hereof, and
(ii) as to any Money Market Rate Advances, the interest period requested by the
Borrower and agreed
-10-
to by the participating Lenders pursuant to Section 4.04(b) hereof.
"Interest Rate Contract" shall mean all interest rate swap agreements,
----------------------
interest rate cap agreements, interest rate collar agreements, interest rate
insurance and other agreements and arrangements designed to provide protection
against fluctuations in interest rates, in each case as the same may be from
time to time amended, restated, renewed, supplemented or otherwise modified.
"Investment" shall mean, when used with respect to any Person, any
----------
direct or indirect advance, loan or other extension of credit (other than the
creation of receivables in the ordinary course of business) or capital
contribution by such Person (by means of transfers of property to others or
payments for property or services for the account or use of others, or
otherwise) to any Person, or any direct or indirect purchase or other
acquisition by such Person of, or of a beneficial interest in, capital stock,
partnership interests, bonds, notes, debentures or other securities issued by
any other Person.
"Lender" or "Lenders" shall mean SunTrust, the other banks and lending
------ -------
institutions listed on the signature pages hereof, and each assignee thereof, if
any, pursuant to Section 11.06(c).
"Lending Office" shall mean for each Lender, the office such Lender
--------------
may designate in writing from time to time to Borrower and the Agent with
respect to each Type of Loan.
"LIBOR" shall mean, for any Interest Period, with respect to
-----
Eurodollar Advances the offered rate for deposits in U.S. Dollars, for a period
comparable to the Interest Period and in an amount comparable to the Agent's
portion of such Advances, appearing on the Reuters Screen LIBO Page as of 11:00
A.M. (London, England time) on the day that is two London Business Days prior to
the first day of the Interest Period. If two or more of such rates appear on
the Reuters Screen LIBO Page, the rate for that Interest Period shall be the
arithmetic mean of such rates. If the foregoing rate is unavailable from the
Reuters Screen for any reason, then such rate shall be determined by the Agent
from Telerate Page 3750 or, if such rate is also unavailable on such service,
then on any other interest rate reporting service of recognized standing
designated in writing by the Agent to Borrower and the other Lenders; in any
such case rounded, if necessary, to the next higher 1/16 of 1.0%, if the rate is
not such a multiple.
-11-
"Lien" shall mean any mortgage, pledge, security interest, lien,
----
charge, hypothecation, assignment, deposit arrangement, title retention,
preferential property right, trust or other ar rangement having the practical
effect of the foregoing and shall include the interest of a vendor or lessor
under any conditional sale agreement, capitalized lease or other title retention
agreement.
"Loans" shall mean, collectively, the Revolving Loans, the Term Loans
-----
and the Money Market Loans.
"Margin Regulations" shall mean Regulation G, Regulation T, Regulation
------------------
U and Regulation X of the Board of Governors of the Federal Reserve System, as
the same may be in effect from time to time.
"Material Subsidiary" shall mean (i) each Credit Party other than the
-------------------
Borrower, and (ii) each other Subsidiary of the Borrower, now existing or
hereafter established or acquired, that at any time prior to the Maturity Date,
has or acquires total assets in excess of $5,000,000, or that accounted for or
produced more than 5% of the Consolidated Net Income (Loss) of the Borrower on a
consolidated basis during any of the three most recently completed Fiscal Years
of the Borrower, or that is otherwise material to the operations or business of
the Borrower or another Material Subsidiary.
"Materially Adverse Effect" shall mean any materially adverse change
-------------------------
in (i) the business, results of operations, financial condition, assets or
prospects of the Consolidated Companies, taken as a whole, (ii) the ability of
Borrower to perform its obligations under this Agreement, or (iii) the ability
of the other Credit Parties (taken as a whole) to perform their respective
obligations under the Credit Documents.
"Maturity Date" shall mean the earlier of (i) March 11, 2001, and (ii)
-------------
the date on which all amounts outstanding under this Agreement have been
declared or have automatically be come due and payable pursuant to the
provisions of Article IX.
"Moody's" shall mean Xxxxx'x Investors Service, Inc.
-------
"Money Market Bid" shall mean an offer by a Lender to make a Money
----------------
Market Loan pursuant to Section 2.04.
"Money Market Bid Accept/Reject Letter" shall mean a notification made
-------------------------------------
by the Borrower pursuant to Section 2.04 substantially in the form of Exhibit H.
---------
-12-
"Money Market Bid Request" shall mean a request made pursuant to
------------------------
Section 2.04 substantially in the form of Exhibit E.
---------
"Money Market Loan" shall mean a Loan made up of Advances by all of
-----------------
those Lenders whose Money Market Bids have been accepted by the Borrower
pursuant to the same Money Market Bid Request under the bidding procedure
described in Section 2.04 for the same Interest Period and interest rate (with
the understanding that two Money Market Loans may be made pursuant to a single
Money Market Bid Request).
"Money Market Note" shall mean a promissory note of the Borrower
-----------------
payable to the order of any Lender, in substantially the form of Exhibit C
---------
hereto, evidencing the maximum aggregate principal indebtedness of the Borrower
to such Lender with respect to outstanding Money Market Rate Advances made by
such Lender pursuant to this Agreement, either as originally executed or as it
may be from time to time supplemented, modified, amended, renewed or extended.
"Money Market Rate" shall mean, as to any Money Market Bid made by a
-----------------
Lender pursuant to Section 2.04, the fixed rate of interest per annum offered by
the Lender making the Money Market Bid for the relevant Interest Period.
"Money Market Rate Advance" shall mean an Advance made by a Lender to
-------------------------
the Borrower pursuant to the bidding procedure described in Section 2.04.
"Multiemployer Plan" shall have the meaning set forth in Section
------------------
4001(a)(3) of ERISA.
"Net Proceeds" shall mean, with respect to any equity offering or
------------
issuance of Subordinated Debt, (i) all cash received with respect thereto,
whether by way of deferred payment pursuant to a promissory note, a receivable
or otherwise (and interest paid thereon), plus (ii) the higher of the book value
or the fair market value of any assets (including any stock) received with
respect thereto, in each case, net of reasonable and customary sale expenses,
fees and commissions incurred and taxes paid or expected to be payable within
the next twelve months in connection therewith.
"Notes" shall mean, collectively, the Revolving Credit Notes, the Term
-----
Notes and the Money Market Notes.
"Notice of Borrowing" shall have the meaning provided in Section
-------------------
3.01(a)(i).
-13-
"Notice of Conversion/Continuation" shall have the meaning provided in
---------------------------------
Section 3.01(b)(i).
"Obligations" shall mean all amounts owing to the Agent, the
-----------
Administrative Agent (unless the Borrower has assumed such role pursuant to
Section 10.11 hereof) or any Lender pursuant to the terms of this Agreement or
any other Credit Document, including, without limitation, all Loans (including
all principal and interest payments due thereunder), fees, expenses,
indemnification and reimbursement payments, indebtedness, liabilities, and
obligations of the Credit Parties, direct or indirect, absolute or contingent,
liquidated or unliquidated, now existing or hereafter arising, together with all
renewals, extensions, modifications or refinancings thereof.
"Payment Office" shall mean with respect to payments of principal,
--------------
interest, fees or other amounts relating to the Revolving Loans, the Money
Market Loans, and all other Obligations, the office specified as the "Payment
Office" for the Agent on the signature page of the Agent, or such other location
as to which the Agent shall have given written notice to the Borrower.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
----
successor thereto.
"Permitted Liens" shall mean those Liens expressly permitted by
---------------
Section 8.02.
"Person" shall mean any individual, partnership, firm, corporation,
------
association, joint venture, trust or other entity, or any government or
political subdivision or agency, department or instrumentality thereof.
"Plan" shall mean any "employee benefit plan" (as defined in Section
----
3(3) of ERISA), including, but not limited to, any defined benefit pension plan,
profit sharing plan, money purchase pension plan, savings or thrift plan, stock
bonus plan, employee stock ownership plan, Multiemployer Plan, or any plan,
fund, program, arrangement or practice providing for medical (including post-
retirement medical), hospitalization, accident, sickness, disability, or life
insurance benefits.
"Pro Rata Share" shall mean, with respect to each of the Commitments
--------------
of each Lender, each Revolving Loan or Term Loan to be made by, and each payment
(including, without limitation, any payment of principal, interest or fees) to
be made to each Lender with respect to the Revolving Loans or Term Loans, the
percentage designated as such Lender's Pro Rata Share of such Commitments, such
Loans or such payments, as applicable, set forth under the name of such Lender
on the respective signature page for such
-14-
Lender, in each case as such Pro Rata Share may change from time to time as a
result of assignments or amendments made pursuant to this Agreement, and shall
mean, with respect to each of the Money Market Loans (including, without
limitation, any payment of principal, interest or fees), the percentage of each
of the Lenders participating in such Loan determined by dividing the amount of
such Lender's Money Market Advance relating thereto by the total amount of such
Money Market Loan.
"Proxy Statement" shall mean that certain Proxy Statement dated
---------------
February 6, 1996 filed by Xxxxxxxx on Schedule 14A with the Securities Exchange
Commission on February 6, 1996.
"Regulation D" shall mean Regulation D of the Board of Governors of
------------
the Federal Reserve System, as the same may be in effect from time to time.
"Rental Obligations" shall mean, with reference to any period, the
------------------
aggregate amount of all rental obligations for which the Consolidated Companies
are directly or indirectly liable (as lessee or as guarantor or other surety but
without duplication) under all leases in effect at any time during such period
(other than operating leases for motor vehicles, computers, office equipment and
other similar items used in the ordinary course of business of the Consolidated
Companies), including all such amounts for which any Person was liable during
the period immediately prior to the date such Person became a Subsidiary of the
Borrower or was merged into or consolidated with the Borrower or a Subsidiary of
the Borrower, as determined in accordance with GAAP.
"Required Lenders" shall mean at any time, the Lenders holding at
----------------
least 66 2/3% of the sum of (x) committed funds under the Commitments, whether
or not advanced, plus (y) the Term Loans, or, following the termination of all
----
of the Commitments, the Lenders holding at least 66 2/3% of the aggregate
outstanding Advances at such time.
"Requirement of Law" for any person shall mean the articles or
------------------
certificate of incorporation and bylaws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation, or
determination of an arbitrator or a court or other governmental authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"Reuters Screen" shall mean, when used in connection with any
--------------
designated page and LIBOR, the display page so designated on the Reuters Monitor
Money Rates Service (or such other page as
-15-
may replace that page on that service for the purpose of displaying rates
comparable to LIBOR).
"Restructuring Charges" shall mean the charges to be incurred by
---------------------
Borrower (whether by directly or by allocation), in an amount not to exceed
$31,000,000.00, in connection with the restructuring of the business of Xxxxxxxx
pursuant to the Transaction.
"Restructured Indebtedness" shall mean the Indebtedness of Xxxxxxxx
-------------------------
restructured in accordance with the Transaction, as more particularly described
on Schedule 8.01 hereto.
-------------
"Revolving Credit Notes" shall mean, collectively, the promissory
----------------------
notes evidencing the Revolving Loans in the form attached hereto as Exhibit A,
---------
either as originally executed or as hereafter amended, modified or supplemented.
"Revolving Loan Commitment" shall mean, at any time for any Lender,
-------------------------
the amount of such commitment set forth below such Lender's name on Schedule
--------
1.01 attached hereto, as the same may be increased or decreased from time to
----
time as a result of any reduction thereof pursuant to Section 2.03, any
assignment thereof pursuant to Section 11.06, or any amendment thereof pursu ant
to Section 11.02, and as further limited by the deemed utilization of the
Revolving Loan Commitment by Money Market Loans as set forth in Section 4.14.
"Revolving Loans" shall mean, collectively, the revolving loans made
---------------
to the Borrower by the Lenders pursuant to Section 2.01.
"Security Documents" shall mean, collectively, the Guaranty Agreement
------------------
and each other guaranty agreement, mortgage, deed of trust, security agreement,
pledge agreement, or other security or collateral document guaranteeing or
securing the Obligations, now or hereafter executed, as the same may be amended,
restated, supplemented or otherwise modified from time to time.
"Sharing Agreements" shall mean, collectively, (i) that certain
------------------
Distribution Agreement, dated as of March 2, 1996 by and among Xxxxxxxx, MFCI
and MHCI, (ii) that certain License Agreement, dated as of March 2, 1996, by and
between MFCI and MHCI, (iii) that certain License Agreement, dated as of March
2, 1996, by and between Borrower and MHCI, (iv) that certain Amended and
Restated Tax Allocation and Indemnification Agreement, dated as of March 2,
1996, by and among Xxxxxxxx, MHCI, MFCI and certain other subsidiaries of
Xxxxxxxx, and (v) that certain Agreement Respecting Employee Benefit Matters,
dated as of March 2, 1996, by and among Xxxxxxxx, MFCI and MHCI.
-16-
"Subordinated Debt" shall mean all Indebtedness of Borrower
-----------------
subordinated to all obligations of Borrower or any other Credit Party arising
under this Agreement, the Notes, and the Guaranty Agreement, created, incurred
or assumed on terms and conditions satisfactory in all respects to the Agent
and the Required Lenders, including without limitation, with respect to interest
rates, payment terms, maturities, amortization schedules, covenants, defaults,
remedies, and subordination provisions, as evidenced by the written approval of
the Agent and Required Lenders.
"Subsidiary" shall mean, with respect to any Person, any corporation
----------
or other entity (including, without limitation, partnerships, joint ventures,
and associations) regardless of its jurisdiction of organization or formation,
at least a majority of the total combined voting power of all classes of voting
stock or other ownership interests of which shall, at the time as of which any
determination is being made, be owned by such Person, either directly or
indirectly through one or more other Subsidiaries.
"Tax Code" shall mean the Internal Revenue Code of 1986, as amended
--------
and in effect from time to time.
"Taxes" shall mean any present or future taxes, levies, imposts,
-----
duties, fees, assessments, deductions, withholdings or other charges of whatever
nature, including without limitation, income, receipts, excise, property, sales,
transfer, license, payroll, withholding, social security and franchise taxes now
or hereafter imposed or levied by the United States, or any state, local or
foreign government or by any department, agency or other political subdivision
or taxing authority thereof or therein and all interest, penalties, additions to
tax and similar liabilities with respect thereto.
"Telerate" shall mean, when used in connection with any designated
--------
page and LIBOR, the display page so designated on the Dow Xxxxx Telerate Service
(or such other page as may replace that page on that service for the purpose of
displaying rates comparable to LIBOR).
"Term Loan Commitment" shall mean, at any time for any Lender, the
--------------------
amount of such commitment set forth opposite such Lender's name on Schedule 1.01
-------------
attached hereto, as the same may be increased or decreased from time to time as
a result of any repayment of the Term Loans, any assignment thereof pursuant to
Section 11.06 or any amendment thereof pursuant to Section 11.02.
"Term Loans" shall mean, collectively, the term loans made to the
----------
Borrower by the Lenders pursuant to Section 3.01.
-17-
"Term Notes" shall mean the promissory note or notes evidencing the
----------
Term Loans, substantially in the form of Exhibit B, either as originally
---------
executed or as hereafter amended, modified or restated.
"Total Capitalization" shall mean, as of any date of determination,
--------------------
the sum of (i) Consolidated Funded Debt, plus (ii) Consolidated Net Worth.
----
"Transaction" shall have the meaning set forth in the recitals hereof.
-----------
"Transaction Date" shall have the meaning set forth in the recitals
----------------
hereof.
"Type" of Borrowing shall mean a Borrowing consisting of Base Rate
----
Advances, Eurodollar Advances or Money Market Rate Advances.
"Voting Stock" shall mean securities of any class or classes, the
------------
holders of which are entitled to elect all of the corporate directors (or
Persons performing similar functions).
Section 1.02. Accounting Terms and Determination. Unless otherwise
----------------------------------
defined or specified herein, all accounting terms shall be construed herein, all
accounting determinations hereunder shall be made, all financial statements
required to be delivered hereunder shall be prepared, and all financial records
shall be maintained in accordance with, GAAP.
Section 1.03. Other Definitional Terms. The words "hereof", "herein"
------------------------
and "hereunder" and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement, and Article, Section, Schedule, Exhibit and like references are to
this Agreement unless otherwise specified.
Section 1.04. Exhibits and Schedules. All Exhibits and Schedules
----------------------
attached hereto are by reference made a part hereof.
ARTICLE II.
REVOLVING LOANS AND MONEY MARKET LOANS
--------------------------------------
Section 2.01. Revolving Loan Commitments; Use of Proceeds.
-------------------------------------------
(a) Revolving Loan Commitments. Subject to and upon the terms and
--------------------------
conditions herein set forth, each Lender severally
-18-
establishes in favor of the Borrower, from on and after the Effective Date, but
prior to the Maturity Date, its Revolving Loan Commitment. The Lenders, subject
to and upon the terms and conditions set forth herein, from time to time, agree
to make to the Borrower Revolving Loans in an aggregate principal amount
outstanding at any time not to exceed such Lender's Revolving Loan Commitment.
Borrower shall be entitled to repay and reborrow Revolving Loans in accordance
with the provisions hereof. In addition to Revolving Loans, the Borrower may
request, from on and after the Effective Date but prior to the Maturity Date,
that the Lenders extend to the Borrower Money Market Loans subject to and upon
the terms and conditions herein set forth. Notwithstanding any provision of this
Agreement to the contrary, (i) the sum of (x) the aggregate principal amount of
the Revolving Loans, plus (y) the aggregate principal amount of the Money Market
----
Loans, at any one time outstanding shall not exceed the aggregate Revolving Loan
Commitments, (ii) the aggregate principal amount of all Base Rate Advances and
Eurodollar Advances of each Lender outstanding pursuant to this Article II shall
not at any time exceed the Revolving Loan Commitment of such Lender, (iii) no
Lender shall be obligated hereunder to extend Money Market Rate Advances or to
participate in the bid process or to make quotes for such Advances, (iv) a
Lender may elect, in its discretion, to extend Money Market Rate Advances which,
either alone or together with the other outstanding Advances of such Lender,
would exceed the Revolving Loan Commitment of such Lender, and (v) Money Market
Loans shall be allocated amongst the Revolving Loan Commitments of the Lenders
as set forth in Section 4.14 for purposes of determining the available Revolving
Loan Commitments.
(b) Amount and Terms of Loans. Each Revolving Loan shall, at the
-------------------------
option of Borrower, be made or continued as, or converted into, part of one or
more Borrowings that shall consist entirely of Base Rate Advances or Eurodollar
Advances. Each Money Market Loan shall consist of Money Market Advances made by
one or more of the Lenders in accordance with the procedure described in Section
2.04. Each Eurodollar Borrowing and each Money Market Loan shall be in a
principal amount of not less than $5,000,000 or a greater integral multiple of
$1,000,000, and each Base Rate Borrowing shall be in a principal amount of not
less than $1,000,000 or a greater integral multiple of $100,000. At no time
shall the aggregate number of Eurodollar Borrowings and Money Market Loans
outstanding under this Article II exceed six.
(c) Use of Proceeds. The proceeds of Revolving Loans and the Money
---------------
Market Loans shall be used solely to refinance the Borrower's allocated portion
of Restructured Indebtedness of Xxxxxxxx on the Effective Date, to acquire and
construct additional restaurants, to make other acquisitions permitted by
-19-
the terms of this Agreement, to fund working capital needs of the Borrower and
for other general corporate purposes of the Borrower.
Section 2.02. Notes; Repayment of Principal.
-----------------------------
(a) The Borrower's obligations to pay the principal of, and interest
on, the Revolving Loans to each Lender shall be evidenced by the records of the
Agent and such Lender and by the Revolving Credit Note payable to such Lender
(or the assignor of such Lender) in the amount of such Lender's Revolving Loan
Commitment completed in conformity with this Agreement.
(b) The Borrower's obligations to pay the principal of, and interest
on, the Money Market Loans to each Lender shall be evidenced by the records of
the Agent and such Lender and by the Money Market Note payable to such Lender
(or the assignor of such Lender) completed in conformity with this Agreement.
(c) All outstanding Borrowings outstanding under the Notes shall be
due and payable in full on the Maturity Date.
Section 2.03. Voluntary Reduction of Commitments. Upon at least
----------------------------------
three (3) Business Days' prior telephonic notice (promptly confirmed in writing)
to the Agent, Borrower shall have the right, without premium or penalty, to
terminate the unutilized Revolving Loan Commitments, in part or in whole,
provided that (i) any such termination shall apply to proportionately and
permanently reduce the Revolving Loan Commitments of each of the Lenders, and
(ii) any partial termination pursuant to this Section 2.03 shall be in an amount
of at least $5,000,000 and integral multiples of $1,000,000.
Section 2.04. Money Market Loans. (a) In order to request Money
------------------
Market Bids, the Borrower shall telecopy to the Administrative Agent a duly
completed Money Market Bid Request in the form of Exhibit E attached hereto
---------
(which may request not more than two Money Market Bids), to be received by the
Administrative Agent not later than 10:00 a.m. (local time for the
Administrative Agent), one (1) Business Day prior to the proposed Money Market
Rate Loan or Loans. A Money Market Bid Request that does not conform
substantially to the format of Exhibit E may be rejected in the Administrative
---------
Agent's sole discretion, and the Administrative Agent shall notify the Borrower
of such rejection by telecopy not later than 12:00 noon (Atlanta, Georgia time)
on the date of receipt. Such request shall in each case refer to this Agreement
and specify (i) the date of such Borrowing or Borrowings (which shall be a
Business Day) and (ii) the aggregate principal amount thereof which shall be in
a minimum principal amount of $5,000,000 and in an integral multiple of
$1,000,000, and (iii) the Interest Period with respect thereto. Promptly
-20-
after its receipt of a Money Market Bid Request that is not rejected as
aforesaid, the Administrative Agent shall invite by telecopy (substantially in
the form set forth in Exhibit F attached hereto) the Lenders to bid, on the
---------
terms and conditions of this Agreement, to make Money Market Rate Advances
pursuant to the Money Market Bid Request. Notwithstanding the foregoing, in the
event that the Borrower assumes the obligations of the Administrative Agent
pursuant to Section 10.11 hereof, the Borrower shall deliver the Money Market
Bid Request to each Lender by the time noted above and each Lender shall have
the right to reject a nonconforming bid in accordance with the foregoing.
(b) Each Lender may, in its sole discretion, make one or more Money
Market Bids (but not more than two) to the Borrower responsive to a Money Market
Bid Request. Each Money Market Bid by a Lender must be received by the
Administrative Agent via telecopy, substantially in the form of Exhibit G
---------
attached hereto, not later than 10:30 a.m. (local time for the Administrative
Agent) on the Business Day of the proposed Money Market Loan. Multiple bids
(not to exceed two per Lender) will be accepted by the Administrative Agent.
Money Market Bids that do not conform substantially to the format of Exhibit G
---------
may be rejected by the Administrative Agent acting in consultation with the
Borrower, and the Administrative Agent shall notify the Lender making such
nonconforming bid of such rejection as soon as practicable. Each Money Market
Bid shall refer to this Agreement and specify (i) the principal amount (which
shall be in a minimum principal amount of $1,000,000 and in an integral multiple
of $500,000 and which may equal the entire principal amount of the Money Market
Loan requested by the Borrower) of the Money Market Rate Advance or Advances
that the Lender is willing to make to the Borrower, (ii) the Money Market Rate
or Rates at which the Lender is prepared to make the Money Market Rate Advance
or Advances, and (iii) the Interest Period and the last day thereof. If any
Lender shall elect not to make a Money Market Bid, such Lender shall so notify
the Administrative Agent via telecopy by the time specified above for submitting
a Money Market Bid; provided, however, that failure by any Lender to give such
-------- -------
notice shall not cause such Lender to be obligated to make any Money Market Rate
Advance as part of such Money Market Loan. A Money Market Bid submitted by a
Lender pursuant to this paragraph (b) shall be irrevocable (absent manifest
error).
(c) The Administrative Agent shall promptly notify the Borrower by
telecopy of all the Money Market Bids made, the Money Market Rate and the
principal amount of each Money Market Rate Advance in respect of which a Money
Market Bid was made and the identity of the Lender that made each bid. The
Administrative Agent shall send a copy of all Money Market Bids to the Borrower
-21-
for its records as soon as practicable after completion of the bidding process
set forth in this Section 2.04.
(d) The Borrower may, in its sole and absolute discretion, subject
only to the provisions of this paragraph (d), accept or reject any Money Market
Bid referred to in paragraph (c) above. The Borrower shall notify the
Administrative Agent by telephone, confirmed by telecopy in the form of a Money
Market Bid Accept/Reject Letter, whether and to what extent it has decided to
accept or reject any of or all the bids referred to in paragraph (c) above not
later than 12:30 p.m. (local time for the Administrative Agent) on the Business
Day of the proposed Money Market Loan; provided, however, that (i) the failure
-------- -------
by the Borrower to give such notice shall be deemed to be a rejection of all the
bids referred to in paragraph (c) above, (ii) the Borrower shall not accept a
bid made at a particular Money Market Rate if the Borrower has decided to reject
a bid made at a lower Money Market Rate except for the sole purpose of
minimizing the aggregate Commitment Fees payable to the Lenders hereunder (i.e.,
the Borrower, in analyzing the bids, may take into account the total commitment
fees which may be payable to a Lender submitting a higher Money Market Bid in
determining the "all-in" rate to the Borrower of the various Money Market Bids),
(iii) the aggregate amount of the Money Market Bids accepted by the Borrower
shall not exceed the principal amount specified in the Money Market Bid Request,
(iv) if the Borrower shall accept a bid or bids made at a particular Money
Market Rate but the amount of such bid or bids shall cause the total amount of
bids to be accepted by the Borrower to exceed the amount specified in the Money
Market Bid Request, then the Borrower shall accept a portion of such bid or bids
in an amount equal to the amount specified in the Money Market Bid Request less
the amount of all other Money Market Bids accepted with respect to such Money
Market Bid Request, which acceptance, in the case of multiple bids at the same
Money Market Rate, shall be made pro rata in accordance with the amount of each
such bid at such Money Market Rate, and (v) except pursuant to clause (iv)
above, no bid shall be accepted for a Money Market Loan unless such Money Market
Loan is in a minimum principal amount of $5,000,000 and an integral multiple of
$1,000,000; provided further, however, that if a Money Market Loan must be in an
-------- ------- -------
amount less than $5,000,000 because of the provisions of clause (iv) above, such
Money Market Loan may be for a minimum of $1,000,000 or any integral multiple
thereof, and in calculating the pro rata allocation of acceptances of portions
of multiple bids at a particular Money Market Rate pursuant to clause (iv) the
amounts shall be rounded to integral multiples of $1,000,000 in a manner which
shall be in the discretion of the Borrower. A notice given by the Borrower
pursuant to this paragraph (d) shall be irrevocable. In the event that the
Borrower has assumed the obligations of the Administrative Agent pursuant to
Section 10.11
-22-
hereof, the Borrower shall continue to be bound by this subsection (d) but shall
accept or reject bids by giving notice directly to the Lenders.
(e) The Administrative Agent shall promptly notify each bidding
Lender whether or not its Money Market Bid has been accepted (and if so, in what
amount and at what Money Market Rate) by telecopy sent by the Administrative
Agent, and each successful bidder will thereupon become bound, subject to the
other applicable conditions hereof, to make the Money Market Loan
in respect of which its bid has been accepted.
(f) A Money Market Bid Request shall not be made within five (5)
Business Days after the date of any previous Money Market Bid Request.
(g) If the Administrative Agent shall elect to submit a Money Market
Bid in its capacity as a Lender, it shall submit such bid directly to the
Borrower one half of an hour earlier than the earliest time at which the other
Lenders are required to submit their bids to the Administrative Agent pursuant
to paragraph (b) above.
(h) Each Lender participating in any Money Market Loan shall make its
Money Market Rate Advance available to the Administrative Agent on the date
specified in the Bid Request at the time and in the manner and subject to the
provisions specified in Section 4.02.
ARTICLE III.
TERM LOANS
----------
Section 3.01. Amount of Term Loans; Use of Proceeds.
-------------------------------------
(a) Subject to and upon the terms and conditions herein set forth,
each Term Lender severally agrees to make to the Borrower on the Effective Date
a Term Loan in an amount equal to its Term Loan Commitment, such Term Loan to be
repaid as set forth in Section 3.02. The Borrower shall not be entitled to
reborrow any amounts repaid with respect to the Term Loans.
(b) Each Term Loan shall, at the option of the Borrower, be made or
continued as, or converted into, part of one or more Borrowings that shall
consist entirely of Base Rate Advances or Eurodollar Advances. The aggregate
principal amount of each Borrowing of Term Loans consisting of Eurodollar
Advances shall be in a principal amount of not less than $5,000,000 or a greater
integral multiple of $1,000,000, and each Borrowing of
-23-
Term Loans consisting of Base Rate Advances shall be in a principal amount of
not less than $1,000,000 or a greater integral multiple of $100,000. At no time
shall more than one Borrowing be outstanding under this Article III.
(c) The Borrower shall use the proceeds of the Term Loans solely for
the purpose of repaying the Restructured Indebtedness of Xxxxxxxx on the
Effective Date in the amount allocated to the Borrower.
Section 3.02. Notes; Repayment of Principal.
-----------------------------
(a) The Borrower's obligations to pay the principal of, and interest
on, the Term Loans to each Lender shall be evidenced by the records of the Agent
and such Lender and by the Term Note payable to such Lender (or the assignor of
such Lender) completed in conformity with this Agreement.
(b) All Term Loans, if not sooner paid, shall be due and payable in
full on the Maturity Date.
ARTICLE IV.
GENERAL LOAN TERMS
------------------
Section 4.01. Funding Notices.
---------------
(a) (i) Whenever Borrower desires to make a Borrowing with respect
to the Term Loans or the Revolving Loan Commitments (other than one resulting
from a conversion or continuation pursuant to Section 4.01(b)(i)), it shall give
the Agent prior written notice (or telephonic notice promptly confirmed in
writing) of such Borrowing (a "Notice of Borrowing"), such Notice of Borrowing
-------------------
to be given prior to 11:00 A.M. (local time for the Agent) at the Payment Office
of the Agent (x) one Business Day prior to the requested date of such Borrowing
in the case of Base Rate Advances, and (y) three Business Days prior to the
requested date of such Borrowing in the case of Eurodollar Advances. Notices
received after 11:00 A.M. shall be deemed received on the next Business Day.
Each Notice of Borrowing shall be irrevocable and shall specify the aggregate
principal amount of the Borrowing, the date of Borrowing (which shall be a
Business Day), and whether the Borrowing is to consist of Base Rate Advances or
Eurodollar Advances and (in the case of Eurodollar Advances) the Interest Period
to be applicable thereto.
(ii) Whenever Borrower desires to obtain a Money Market Bid, it shall
notify the Administrative Agent in accordance with the procedure set forth in
Section 2.04 hereof.
-24-
(b) (i) Whenever Borrower desires to convert all or a portion of an
outstanding Borrowing under the Revolving Loan Commitments or constituting a
portion of the Term Loans consisting of Base Rate Advances into a Borrowing
consisting of Eurodollar Advances, or to continue outstanding a Borrowing
consisting of Eurodollar Advances for a new Interest Period, it shall give the
Agent at least three Business Days' prior written notice (or telephonic notice
promptly confirmed in writing) of each such Borrowing to be converted into or
continued as Eurodollar Ad vances. Such notice (a "Notice of
---------
Conversion/Continuation") shall be given prior to 11:00 A.M. (local time for the
-----------------------
Agent) on the date specified at the Payment Office of the Agent. Each such
Notice of Conversion/Continuation shall be irrevocable and shall specify the
aggregate principal amount of the Advances to be converted or continued, the
date of such conversion or continuation and the Interest Period to be applicable
thereto. If, upon the expiration of any Interest Period in respect of any
Borrowing consisting of Eurodollar Advances, Borrower shall have failed to
deliver the Notice of Conversion/Continuation, Borrower shall be deemed to have
elected to convert or continue such Borrowing to, in the case of the Term Loans,
a Borrowing consisting of Eurodollar Advances for an Interest Period of three
months and, in the case of the Revolving Loans, a Borrowing consisting of Base
Rate Advances. So long as any Executive Officer of Borrower has knowledge that
any Default or Event of Default shall have occurred and be continuing, no
Borrowing may be converted into or continued as (upon expiration of the current
Interest Period) Eurodollar Advances unless the Agent and each of the Lenders
shall have otherwise consented in writing. No conversion of any Borrowing of
Eurodollar Advances shall be permitted except on the last day of the Interest
Period in respect thereof.
(ii) Upon the expiration of the applicable Interest Period with
respect to any Money Market Loan, the Borrower shall repay such Money Market
Loan to the Agent for the ratable benefit of the Lenders participating in such
Money Market Loan.
(c) Without in any way limiting Borrower's obligation to confirm in
writing any telephonic notice, the Agent and the Administrative Agent may act
without liability upon the basis of telephonic notice believed by the Agent or
the Administrative Agent in good faith to be from Borrower prior to receipt of
written confirmation. In each such case, Borrower hereby waives the right to
dispute the Agent's or the Administrative Agent's record of the terms of such
telephonic notice.
(d) The Agent and the Administrative Agent shall promptly give each
Lender notice by telephone (confirmed in writing) or by telex, telecopy or
facsimile transmission of the matters covered by the notices given to the Agent
and the
-25-
Administrative Agent pursuant to this Section 4.01 with respect to the
Term Loans, the Money Market Loans and the Revolving Loan Commitments. At such
time as the Borrower may assume the duties of the Administrative Agent pursuant
to Section 10.11 hereof, the Borrower shall give the Agent and each Lender
immediate notice by telephone (confirmed in writing) of the matters covered by
notices to the Administrative Agent hereunder and all references to the "Payment
Office" of the Administrative Agent shall be deemed to mean the Lending Office
of each Lender.
Section 4.02. Disbursement of Funds.
---------------------
(a) No later than 12:00 noon (local time for the Agent) on the date of
each Borrowing pursuant to the Term Loans or the Revolving Loan Commitments
(other than one resulting from a conversion or continuation pursuant to Section
4.01(b)(i)), each Lender will make available its Pro Rata Share of the amount of
such Borrowing in immediately available funds at the Payment Office of the
Agent. The Agent will make available to Borrower the aggregate of the amounts
(if any) so made available by the Lenders to the Agent in a timely manner by
crediting such amounts to Borrower's demand deposit account maintained with the
Agent or at Borrower's option, by effecting a wire transfer of such amounts to
Borrower's account specified by the Borrower, by the close of business on such
Business Day. In the event that the Lenders do not make such amounts available
to the Agent by the time prescribed above, but such amount is received later
that day, such amount may be credited to Borrower in the manner described in the
preceding sentence on the next Business Day (with interest on such amount to
begin accruing hereunder on such next Business Day).
(b) No later than 2:30 p.m. (local time for the Agent) on the date of
each Money Market Loan, each Lender participating in such Money Market Loan will
make available its pro rata share of the amount of such Money Market Loan in
immediately available funds at the Payment Office of the Agent. The Agent will
make available to Borrower the aggregate of the amounts (if any) so made
available by the Lenders to the Agent in a timely manner by crediting such
amount to Borrower's demand deposit account maintained with the Agent or at the
Borrower's option by effecting a wire transfer of such amounts to Borrower's
account specified by the Borrower by the close of business on such business day.
In the event that Lenders do not make such amounts available to the Agent by the
time prescribed above but such amount is received later that day, such amount
may be credited to the Borrower in the manner described in the preceding
sentence on the next business day (with interest on such amount to begin
accruing hereunder on such next business day).
-26-
(c) Unless the Agent shall have been notified by any Lender prior to
the date of a Borrowing that such Lender does not intend to make available to
the Agent such Lender's portion of the Borrowing to be made on such date, the
Agent may assume that such Lender has made such amount available to the Agent on
such date and the Agent may make available to Borrower a cor responding amount.
If such corresponding amount is not in fact made available to the Agent by such
Lender on the date of Borrowing, the Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest at the
Federal Funds Rate. If such Lender does not pay such corresponding amount
forthwith upon the Agent's demand therefor, the Agent shall promptly notify
Borrower, and Borrower shall immediately pay such corresponding amount to the
Agent together with interest at the rate specified for the Borrowing which
includes such amount paid and any amounts due under Section 4.12 hereof. Nothing
in this subsection shall be deemed to relieve any Lender from its obligation to
fund its Commitments or its Money Market Advances hereunder or to prejudice any
rights which Borrower may have against any Lender as a result of any default by
such Lender hereunder.
(d) All Borrowings under the Commitments (other than Money Market
Loans) shall be loaned by the Lenders on the basis of their Pro Rata Share of
the Commitments. No Lender shall be responsible for any default by any other
Lender in its obligations hereunder, and each Lender shall be obligated to make
the Loans provided to be made by it hereunder, regardless of the failure of any
other Lender to fund its Commitments or its Money Market Advances hereunder.
Section 4.03. Interest.
--------
(a) Borrower agrees to pay interest in respect of all unpaid principal
amounts of the Revolving Loans and the Term Loans from the respective dates such
principal amounts were advanced to maturity (whether by acceleration, notice of
prepayment or otherwise) at rates per annum equal to the applicable rates
indicated below:
(i) For Base Rate Advances--The Base Rate in effect from time to time;
and
(ii) For Eurodollar Advances--The relevant Adjusted LIBO Rate plus
----
seven sixteenths of one percent (.4375%) per annum.
(b) Borrower agrees to pay interest in respect of all unpaid principal
amounts of the Money Market Loans made to Borrower from the respective dates
such principal amounts were advanced to maturity (whether by acceleration,
notice of prepayment
-27-
or otherwise) at the Money Market Rate agreed to by the Borrower and the
Lender(s) participating therein for each such Money Market Loan.
(c) Overdue principal and, to the extent not prohibited by applicable
law, overdue interest, in respect of the Loans, and all other overdue amounts
owing hereunder, shall bear interest from each date that such amounts are
overdue:
(i) in the case of overdue principal and interest with respect to all
Loans outstanding as Eurodollar Advances and all Money Market Loans, at
the greater of (A) the rate otherwise applicable for the then current
Interest Period plus an additional two percent (2.0%) per annum or (B) the
----
rate in effect for Base Rate Advances plus an additional two percent
----
(2.0%) per annum; and
(ii) in the case of overdue principal and interest with respect to all
other Loans outstanding as Base Rate Advances and all other Obligations
hereunder (other than Loans), at a rate equal to the applicable Base Rate
plus an additional two percent (2.0%) per annum.
----
(d) Interest on each Loan shall accrue from and including the date of
such Loan to but excluding the date of any repayment thereof; provided that, if
--------
a Loan is repaid on the same day made, one day's interest shall be paid on such
Loan. Interest on all outstanding Base Rate Advances shall be payable quarterly
in arrears on the last day of each calendar quarter, commencing on March 31,
1996. Interest on all outstanding Eurodollar Advances and Money Market Advances
shall be payable on the last day of each Interest Period applicable thereto,
and, in the case of Eurodollar Advances and Money Market Advances having an
Interest Period in excess of three months, on each three month anniversary of
the initial date of such Interest Period. Interest on all Loans shall be payable
on any conversion of any Advances comprising such Loans into Advances of another
Type, prepayment (on the amount prepaid), at maturity (whether by acceleration,
notice of prepayment or otherwise) and, after maturity, on demand.
(e) The Agent, upon determining the Adjusted LIBO Rate for any
Interest Period, shall promptly notify by telephone (confirmed in writing) or in
writing Borrower and the other Lenders. Any such determination shall, absent
manifest error, be final, conclusive and binding for all purposes.
-28-
Section 4.04. Interest Periods.
----------------
(a) In connection with the making or continuation of, or conversion
into, each Borrowing of Eurodollar Advances, Borrower shall select an Interest
Period to be applicable to such Eurodollar Advances, which Interest Period shall
be either a 1, 2, 3 or 6 month period.
(b) In connection with the making or continuation of each Money
Market Loan, Borrower shall request an Interest Period to be applicable to such
Money Market Loan for a period equal to a minimum of seven (7) days and a
maximum of one hundred eighty (180) days which request may be accepted by any
Lender or Lenders as provided herein.
(c) Notwithstanding paragraphs (a) and (b) of this Section 4.04:
(i) The initial Interest Period for any Borrowing of Eurodollar
Advances shall commence on the date of such Borrowing (including the date
of any conversion from a Borrowing consisting of Base Rate Advances) and
each Interest Period occurring thereafter in respect of such Borrowing
shall commence on the day on which the next preceding Interest Period
expires;
(ii) If any Interest Period would otherwise expire on a day which is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day, provided that if any Interest Period in respect
--------
of Eurodollar Advances would otherwise expire on a day that is not a
Business Day but is a day of the month after which no further Business Day
occurs in such month, such Interest Period shall expire on the next
preceding Business Day;
(iii) Any Interest Period in respect of Eurodollar Advances which
begins 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 part
(iv) below, expire on the last Business Day of such calendar month; and
(iv) No Interest Period with respect to the Loans shall extend beyond
the Maturity Date.
Section 4.05. Fees.
----
(a) Commitment Fee. Borrower shall pay to the Agent, for the ratable
--------------
benefit of each Lender, a commitment fee (the
-29-
"Commitment Fee") for the period commencing on the Effective Date to and
--------------
including the Maturity Date, payable quarterly in arrears on the last day of
each calendar quarter, commencing on March 31, 1996, and on the Maturity Date,
equal to three-sixteenths of one percent (.1875%) per annum multiplied by the
average daily unused portion of the Revolving Loan Commitment of each Lender.
For the purposes of computing the Revolving Loan Commitment Fee, in addition to
utilization by Revolving Loans, the Revolving Loan Commitment of each Lender
shall be deemed to be utilized by the amount of Money Market Rate Advances
extended by such Lender but in no event shall the computation of any other
Lender's Commitment Fee be affected by the Money Market Advances extended by
such Lender.
(b) Administrative Fees. The Borrower shall pay to the Agent and the
-------------------
Administrative Agent an administrative fee in the amount and on the dates
previously agreed in writing by Borrower with the Agent and the Administrative
Agent.
Section 4.06. Voluntary Prepayments of Borrowings.
-----------------------------------
(a) Borrower may, at its option, prepay Borrowings consisting of Base
Rate Advances at any time in whole, or from time to time in part, in amounts
aggregating $1,000,000 or any greater integral multiple of $100,000, by paying
the principal amount to be prepaid together with interest accrued and unpaid
thereon to the date of prepayment. Borrowings consisting of Eurodollar Advances
or Money Market Advances may be prepaid, at Borrower's option, in whole, or from
time to time in part, in amounts aggregating $5,000,000 or any greater integral
multiple of $1,000,000, by paying the principal amount to be prepaid, together
with interest accrued and unpaid thereon to the date of prepayment, and all
compensation payments pursuant to Section 4.12 if such prepayment is made on a
date other than the last day of an Interest Period applicable thereto. Each
such optional prepayment shall be applied in accordance with Section 4.06(c)
below.
(b) Borrower shall give written notice (or telephonic notice
confirmed in writing) to the Agent of any intended prepayment of the Revolving
Loans or the Term Loans (i) not less than one Business Day prior to any
prepayment of Base Rate Advances and (ii) not less than three Business Days
prior to any prepayment of Eurodollar Advances. Borrower shall give written
notice (or telephonic notice confirmed in writing) to the Administrative Agent
of any intended prepayment of the Money Market Loans not less than one (1)
Business Day prior to such prepayment of Money Market Rate Advances. Such
notice, once given, shall be irrevocable. Upon receipt of such notice of
prepayment pursuant to the first sentence of this paragraph (b), the Agent shall
promptly notify each Lender of the contents of such notice and of
-30-
such Lender's Pro Rata Share of such prepayment. Upon receipt of any notice of
prepayment pursuant to the second sentence of this paragraph (b), the
Administrative Agent shall promptly notify each Lender participating in such
Money Market Loan of the contents of such notice and of such Lender's Pro Rata
Share of such prepayment.
(c) Borrower, when providing notice of prepayment pursuant to Section
4.06(b), may designate the Types of Advances and the specific Borrowing or
Borrowings which are to be prepaid, provided that (i) if any prepayment of
Eurodollar Advances made pursuant to a single Borrowing of the Revolving Loans
or Term Loans shall reduce the outstanding Advances made pursuant to such
Borrowing to an amount less than $5,000,000, such Borrowing shall immediately be
converted into Base Rate Advances; and (ii) each prepayment made pursuant to a
single Borrowing shall be applied pro rata among the Advances comprising such
Borrowing. In the absence of a designation by Borrower, the Agent shall, subject
to the foregoing, make such designation in its discretion but using reasonable
efforts to avoid funding losses to the Lenders pursuant to Section 4.12. All
voluntary prepayments shall be applied to the payment of interest before
application to principal.
Section 4.07. Payments, etc.
--------------
(a) Except as otherwise specifically provided herein, all payments
under this Agreement and the other Credit Documents shall be made without
defense, set-off or counterclaim to the Agent not later than 11:00 A.M. (local
time for the Agent) on the date when due and shall be made in Dollars in
immediately available funds at its Payment Office.
(b) (i) All such payments shall be made free and clear of and
without deduction or withholding for any Taxes in respect of this Agreement, the
Notes or other Credit Documents, or any payments of principal, interest, fees or
other amounts payable hereunder or thereunder (but excluding, except as provided
in paragraph (iii) hereof, any Taxes imposed on the overall net income of the
Lenders pursuant to the laws of the jurisdiction in which the principal
executive office or appropriate Lending Office of such Lender is located). If
any Taxes are so levied or imposed, Borrower agrees (A) to pay the full amount
of such Taxes, and such additional amounts as may be necessary so that every net
payment of all amounts due hereunder and under the Notes and other Credit
Documents, after withholding or deduction for or on account of any such Taxes
(including additional sums payable under this Section 4.07), will not be less
than the full amount provided for herein had no such deduction or withholding
been required, (B) to make such withholding or deduction and (C) to pay the full
amount deducted to the relevant authority in accordance with applicable
-31-
law. Borrower will furnish to the Agent, the Administrative Agent and each
Lender, within 30 days after the date the payment of any Taxes is due pursuant
to applicable law, certified copies of tax receipts evidencing such payment by
Borrower. Borrower will indemnify and hold harmless the Agent, the
Administrative Agent and each Lender and reimburse the Agent, the Administrative
Agent and each Lender upon written request for the amount of any Taxes so levied
or imposed and paid by the Agent, the Administrative Agent or such Lender and
any liability (including penalties, interest and expenses) arising therefrom or
with respect thereto, whether or not such Taxes were correctly or illegally
asserted. A certificate as to the amount of such payment by such Lender, the
Agent or the Administrative Agent, absent manifest error, shall be final,
conclusive and binding for all purposes provided that the Agent, the
Administrative Agent and each Lender shall use reasonable efforts to furnish
Borrower notice of the imposition of any Taxes as soon as practicable
thereafter; provided, however, that no delay or failure to furnish such notice
-------- -------
shall in any event release or discharge Borrower from its obligations to the
Agent, the Administrative Agent or such Lender pursuant to Section 4.07(b) or
otherwise result in any liability of the Agent or such Lender; provided that
-------- ----
such notice is provided to the Borrower within forty-five (45) days of such
Lender obtaining knowledge of the application of such Taxes to payments under
this Agreement.
(ii) Each Lender that is organized under the laws of any jurisdiction
other than the United States of America or any State thereof (including the
District of Columbia) agrees to furnish to Borrower, the Agent and the
Administrative Agent, prior to the time it becomes a Lender hereunder, two
copies of either U.S. Internal Revenue Service Form 4224 or U.S. Internal
Revenue Service Form 1001 or any successor forms thereto (wherein such Lender
claims entitlement to complete exemption from or reduced rate of U.S. Federal
withholding tax on interest paid by Borrower hereunder) and to provide to
Borrower, the Agent and the Administrative Agent a new Form 4224 or Form 1001 or
any successor forms thereto if any previously delivered form is found to be
incomplete or incorrect in any material respect or upon the obsolescence of any
previously delivered form; provided, however, that no Lender shall be required
-------- -------
to furnish a form under this paragraph (ii) after the date that it becomes a
Lender hereunder if it is not entitled to claim an exemption from or a reduced
rate of withholding under applicable law.
(iii) Borrower shall also reimburse each Lender, upon written
request, for any Taxes imposed (including, without limitation, Taxes imposed on
the overall net income of such Lender or its applicable Lending Office pursuant
to the laws of the jurisdiction in which the principal executive office or the
applicable Lending Office of such Lender is located) as such
-32-
Lender shall determine are payable by such Lender in respect of amounts paid by
or on behalf of Borrower to or on behalf of such Lender pursuant to paragraph
(i) hereof.
(c) Subject to Section 4.04(c)(ii), whenever any payment to be made
hereunder or under any Note shall be stated to be due on a day which is not a
Business Day, the due date thereof shall be extended to the next succeeding
Business Day and, with respect to payments of principal, interest thereon shall
be payable at the applicable rate during such extension.
(d) All computations of interest and fees shall be made on the basis
of a year of 360 days for the actual number of days (including the first day but
excluding the last day) occurring in the period for which such interest or fees
are payable (to the extent computed on the basis of days elapsed). Interest on
Base Rate Advances shall be calculated based on the Base Rate from and including
the date of such Loan to but excluding the date of the repayment or conversion
thereof. Interest on Eurodollar Advances and Money Market Rate Advances shall be
calculated as to each Interest Period from and including the first day thereof
to but excluding the last day thereof. Each determination by the Agent or the
Administrative Agent of an interest rate or fee hereunder shall be made in good
faith and, except for manifest error, shall be final, conclusive and binding for
all purposes; provided that, in the event that the Borrower assumes the duties
-------- ----
of the Administrative Agent hereunder, the determinations of the Lenders rather
than the Administrative Agent with respect to the foregoing shall, if determined
in good faith and without manifest error, shall be final, conclusive and binding
for all purposes.
(e) Payment by the Borrower to the Agent in accordance with the terms
of this Agreement shall, as to the Borrower, constitute payment to the Lenders
under this Agreement.
Section 4.08. Interest Rate Not Ascertainable, etc. In the event
-------------------------------------
that the Agent shall have determined (which determination shall be made in good
faith and, absent manifest error, shall be final, conclusive and binding upon
all parties) that on any date for determining the Adjusted LIBO Rate for any
Interest Period, by reason of any changes arising after the date of this
Agreement affecting the London interbank market, or the Agent's position in such
market, adequate and fair means do not exist for ascertaining the applicable
interest rate on the basis provided for in the definition of Adjusted LIBO Rate,
then, and in any such event, the Agent shall forthwith give notice (by telephone
confirmed in writing) to Borrower and to the Lenders, of such determination and
a summary of the basis for such determination. Until the Agent notifies
Borrower that the circumstances giving rise to
-33-
the suspension described herein no longer exist, the obligations of the Lenders
to make or permit portions of the Revolving Loans or Term Loans to remain
outstanding past the last day of the then current Interest Periods as Eurodollar
Advances shall be suspended, and such affected Advances shall bear the same
interest as Base Rate Advances.
Section 4.09. Illegality.
----------
(a) In the event that any Lender shall have determined (which
determination shall be made in good faith and, absent manifest error, shall be
final, conclusive and binding upon all parties) at any time that the making or
continuance of any Eurodollar Advance has become unlawful by compliance by such
Lender in good faith with any applicable law, governmental rule, regulation,
guideline or order (whether or not having the force of law and whether or not
failure to comply therewith would be unlawful), then, in any such event, the
Lender shall give prompt notice (by telephone confirmed in writing) to Borrower
and to the Agent of such determination and a summary of the basis for such
determination (which notice the Agent shall promptly transmit to the other
Lenders).
(b) Upon the giving of the notice to Borrower referred to in
subsection (a) above, (i) Borrower's right to request and such Lender's
obligation to make Eurodollar Advances shall be immediately suspended, and such
Lender shall make an Advance as part of the requested Borrowing of Eurodollar
Advances as a Base Rate Advance, which Base Rate Advance shall, for all other
purposes, be considered part of such Borrowing, and (ii) if the affected
Eurodollar Advance or Advances are then outstanding, Borrower shall immediately,
or if permitted by applicable law, no later than the date permitted thereby,
upon at least one Business Day's written notice to the Agent and the affected
Lender, convert each such Advance into a Base Rate Advance or Advances, provided
that if more than one Lender is affected at any time, then all affected Lenders
must be treated the same pursuant to this Section 4.09(b).
Section 4.10. Increased Costs.
---------------
(a) If, by reason of (x) after the date hereof, the introduction of
or any change (including, without limitation, any change by way of imposition or
increase of reserve requirements) in or in the interpretation of any law or
regulation, or (y) the compliance with any guideline or request from any central
bank or other governmental authority or quasi-governmental authority exercising
control over banks or financial institutions generally made after the date
hereof (whether or not having the force of law):
-34-
(i) any Lender (or its applicable Lending Office) shall be subject to
any tax, duty or other charge with respect to its Eurodollar Advances or
its obligation to make Eurodollar Advances or the basis of taxation of
payments to any Lender of the principal of or interest on its Eurodollar
Advances or its obligation to make Eurodollar Advances shall have changed
(except for changes in the tax on the overall net income of such Lender or
its applicable Lending Office imposed by the jurisdiction in which such
Lender's principal executive office or applicable Lending Office is
located); or
(ii) any reserve (including, without limitation, any imposed by the
Board of Governors of the Federal Reserve System), special deposit or
similar requirement against assets of, deposits with or for the account
of, or credit extended by, any Lender's applicable Lending Office shall be
imposed or deemed applicable or any other condition affecting its
Eurodollar Advances or its obligation to make Eurodollar Advances shall be
imposed on any Lender or its applicable Lending Office or the London
interbank market;
and as a result thereof there shall be any increase in the cost to such Lender
of agreeing to make or making, funding or maintaining Eurodollar Advances
(except to the extent already included in the determination of the applicable
Adjusted LIBO Rate for Eurodollar Advances) or its obligation to make Eurodollar
Advances, or there shall be a reduction in the amount received or receivable by
such Lender or its applicable Lending Office, then Borrower shall from time to
time (subject, in the case of certain Taxes, to the applicable provisions of
Section 4.07(b)), upon written notice from and demand by such Lender on Borrower
(with a copy of such notice and demand to the Agent), pay to the Agent for the
account of such Lender within five Business Days after the date of such notice
and demand, additional amounts sufficient to indemnify such Lender against such
increased cost. A certificate as to the amount of such increased cost, submitted
to Borrower and the Agent by such Lender in good faith and accompanied by a
statement prepared by such Lender describing in reasonable detail the basis for
and calculation of such increased cost, shall, except for manifest error, be
final, conclusive and binding for all purposes.
(b) If any Lender shall advise the Agent that at any time, because of
the circumstances described in clauses (x) or (y) in Section 4.10(a) or any
other circumstances beyond such Lender's reasonable control arising after the
date of this Agreement affecting such Lender or the London interbank market or
such Lender's position in such market, the Adjusted LIBO Rate as deter mined by
the Agent will not adequately and fairly reflect the cost
-35-
to such Lender of funding its Eurodollar Advances, then, and in any such event:
(i) the Agent shall forthwith give notice (by telephone confirmed in
writing) to Borrower and to the other Lenders of such advice;
(ii) Borrower's right to request and such Lender's obligation to make
or permit portions of the Loans to remain outstanding past the last day of
the then current Interest Periods as Eurodollar Advances shall be
immediately suspended; and
(iii) such Lender shall make a Loan as part of the requested Borrowing
of Eurodollar Advances as a Base Rate Advance, which such Base Rate
Advance shall, for all other purposes, be considered part of such
Borrowing.
Section 4.11. Lending Offices.
---------------
(a) Each Lender agrees that, if requested by Borrower, it will use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate an alternate Lending Office with respect to any of its Eurodollar
Advances affected by the matters or circumstances described in Sections 4.07(b),
4.08, 4.09 or 4.10 to reduce the liability of Borrower or avoid the results
provided thereunder, so long as such designation is not disadvantageous to such
Lender as reasonably determined by such Lender, which determination shall be
conclusive and binding on all parties hereto. Nothing in this Section 4.11
shall affect or postpone any of the obligations of Borrower or any right of any
Lender provided hereunder.
(b) If any Lender that is organized under the laws of any jurisdiction
other than the United States of America or any State thereof (including the
District of Columbia) issues a public announcement with respect to the closing
of its lending offices in the United States such that any withholdings or
deductions and additional payments with respect to Taxes may be required to be
made by Borrower thereafter pursuant to Section 4.07(b), such Lender shall use
reasonable efforts to furnish Borrower notice thereof as soon as practicable
thereafter; provided, however, that no delay or failure to furnish such notice
-------- -------
shall in any event release or discharge Borrower from its obligations to such
Lender pursuant to Section 4.07(b) or otherwise result in any liability of such
Lender; provided that such notice is provided to the Borrower within forty-five
-------- ----
(45) days of such Lender obtaining knowledge of the application of such Taxes to
payments under this Agreement.
-36-
Section 4.12. Funding Losses. Borrower shall compensate each Lender,
--------------
upon its written request to Borrower (which request shall set forth the basis
for requesting such amounts in reasonable detail and which request shall be made
in good faith and, absent manifest error, shall be final, conclusive and binding
upon all of the parties hereto), for all losses, expenses and liabilities
(including, without limitation, any interest paid by such Lender to lenders of
funds borrowed by it to make or carry its Eurodollar Advances or Money Market
Rate Advances, in either case to the extent not recovered by such Lender in
connection with the re-employment of such funds and including loss of
anticipated profits), which the Lender may sustain: (i) if for any reason
(other than a default by such Lender) a borrowing of, or conversion to or
continuation of, Eurodollar Advances to Borrower or a borrowing of Money Market
Rate Advances does not occur on the date specified therefor in a Notice of
Borrowing, a Notice of Conversion/Continuation or a Money Market Bid Acceptance
(whether or not withdrawn), (ii) if any repayment (including mandatory
prepayments and any conversions pursuant to Section 4.09(b)) of any Eurodollar
Advances or Money Market Advances to Borrower occurs on a date which is not the
last day of an Interest Period applicable thereto, or (iii), if, for any reason,
Borrower defaults in its obligation to repay its Eurodollar Advances or Money
Market Rate Advances when required by the terms of this Agreement.
Section 4.13. Assumptions Concerning Funding of Eurodollar Advances.
-----------------------------------------------------
Calculation of all amounts payable to a Lender under this Article IV shall be
made as though that Lender had actually funded its relevant Eurodollar Advances
through the purchase of deposits in the relevant market bearing interest at the
rate applicable to such Eurodollar Advances in an amount equal to the amount of
the Eurodollar Advances and having a maturity comparable to the relevant
Interest Period and through the transfer of such Eurodollar Advances from an
offshore office of that Lender to a domestic office of that Lender in the United
States of America; provided, however, that each Lender may fund each of its
-------- --------
Eurodollar Advances in any manner it sees fit and the foregoing assumption shall
be used only for calculation of amounts payable under this Article IV.
Section 4.14. Apportionment of Payments; Deemed Utilization of
------------------------------------------------
Revolving Loan Commitments by Money Market Loans. Aggregate principal and
------------------------------------------------
interest payments in respect of Revolving Loans, Term Loans and Commitment Fees
shall be apportioned among all outstanding Revolving Loan Commitments, Term
Loans and Revolving Loans to which such payments relate, proportionately to the
Lenders' respective Pro Rata Share of such Revolving Loan Commitments and
outstanding Revolving Loans and Term Loans. Each payment of principal of any
Money Market Loan shall be allocated pro rata among the Lenders participating in
such Loan in
-37-
accordance with the respective principal amounts of their outstanding Money
Market Rate Advances comprising such Money Market Loan. Each payment of interest
on any Money Market Loan shall be allocated pro rata among the Lenders
participating in such Money Market Loan in accordance with the respective
amounts of accrued and unpaid interest on their outstanding Money Market Rate
Advances comprising such Money Market Loan. For purposes of determining the
available Revolving Loan Commitments of the Lenders at any time (but not for
purposes of calculating the Commitment Fees payable to each Lender), each
outstanding Money Market Loan shall be deemed to have utilized the Revolving
Loan Commitments of the Lenders (including those Lenders which shall not have
made Advances as part of such Money Market Loan) pro rata in accordance with
each Lender's Pro Rata Share of the Revolving Loan Commitments. The Agent shall
promptly distribute to each Lender at its payment office set forth beside its
name on the appropriate signature page hereof or such other address as any
Lender may request its share of all such payments received by the Agent.
Section 4.15. Sharing of Payments, Etc. If any Lender shall obtain
-------------------------
any payment or reduction (including, without limitation, any amounts received as
adequate protection of a deposit treated as cash collateral under the Bankruptcy
Code) of the Obligations (whether voluntary, involuntary, through the exercise
of any right of set-off, or otherwise) in excess of its Pro Rata Share of
payments or reductions on account of such obligations obtained by all the
Lenders (other than payments of principal, interest and fees with respect to the
Money Market Loans which are payable solely to the Lenders participating
therein), such Lender shall forthwith (i) notify each of the other Lenders and
Agent of such receipt, and (ii) purchase from the other Lenders such
participations in the affected obligations as shall be necessary to cause such
purchasing Lender to share the excess payment or reduction, net of costs
incurred in connection therewith, ratably with each of them, provided that if
all or any portion of such excess payment or reduction is thereafter recovered
from such purchasing Lender or additional costs are incurred, the purchase shall
be rescinded and the purchase price restored to the extent of such recovery or
such additional costs, but without interest unless the Lender obligated to
return such funds is required to pay interest on such funds. Borrower agrees
that any Lender so purchasing a participation from another Lender pursuant to
this Section 4.15 may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of Borrower in
the amount of such participation.
-38-
Section 4.16. Capital Adequacy. Without limiting any other provision
----------------
of this Agreement, in the event that any Lender shall have determined that any
law, treaty, governmental (or quasi-governmental) rule, regulation, guideline or
order regarding capital adequacy not currently in effect or fully applicable as
of the Closing Date, or any change therein or in the interpretation or
application thereof, or compliance by such Lender with any request or directive
regarding capital adequacy not currently in effect or fully applicable as of the
Closing Date (whether or not having the force of law and whether or not failure
to comply therewith would be unlawful) from a central bank or governmental
authority or body having jurisdiction, does or shall have the effect of reducing
the rate of return on such Lender's capital as a consequence of its obligations
hereunder to a level below that which such Lender could have achieved but for
such law, treaty, rule, regulation, guideline or order, or such change or
compliance (taking into consideration such Lender's policies with respect to
capital adequacy) by an amount deemed by such Lender to be material, then within
ten (10) Business Days after written notice and demand by such Lender (with
copies thereof to the Agent), Borrower shall from time to time pay to such
Lender additional amounts sufficient to compensate such Lender for such
reduction (but, in the case of outstanding Base Rate Advances, without du
plication of any amounts already recovered by such Lender by reason of an
adjustment in the applicable Base Rate). Each certificate as to the amount
payable under this Section 4.16 (which cer tificate shall set forth the basis
for requesting such amounts in reasonable detail), submitted to Borrower by any
Lender in good faith, shall, absent manifest error, be final, conclusive and
binding for all purposes.
ARTICLE V.
CONDITIONS TO BORROWINGS
------------------------
The obligations of each Lender to make Advances to Borrower hereunder
is subject to the satisfaction of the following conditions:
Section 5.01. Conditions Precedent to Initial Loans. At the time of
-------------------------------------
the making of the initial Loans hereunder on the Effective Date, all obligations
of Borrower hereunder incurred prior to the initial Loans (including, without
limitation, Borrower's obligations to reimburse fees and expenses payable to the
Administrative Agent and the Agent as previously agreed with Borrower), shall
have been paid in full, and the Agent shall have received the following, in form
and substance reasonably satisfactory in all respects to the Agent:
-39-
(a) the duly executed counterparts of this Agreement;
(b) the duly completed Revolving Credit Notes evidencing the Revolving Loan
Commitments, the duly executed Term Notes evidencing the Term Loan Commitments
and the duly executed Money Market Notes;
(c) the duly executed Guaranty Agreement;
(d) certificates of the Secretaries or Assistant Secretaries of the Credit
Parties attaching and certifying copies of the resolutions of the boards of
directors of the Credit Parties, authorizing the execution, delivery and
performance of the Credit Documents to which each Credit Party is a party;
(e) certificates of the Secretaries or an Assistant Secretaries of the
Credit Parties certifying (i) the name, title and true signature of each officer
of the Credit Parties executing the Credit Documents to which each Credit Party
is a party, and (ii) the bylaws of such entities;
(f) certified copies of the certificate or articles of incorporation of the
Credit Parties certified by the Secretaries of State and by the Secretaries or
Assistant Secretaries of the Credit Parties, together with certificates of good
standing or existence, as may be avail able from the Secretaries of State of the
jurisdiction of incorporation or organization of the Credit Parties and each
other jurisdiction where the Credit Parties' ownership of property or the
conduct of their respective businesses require it to be qualified, except where
a failure to be so qualified would not have a Materially Adverse Effect;
(g) certificate of Borrower in substantially the form of Exhibit I attached
---------
hereto and appropriately completed;
(h) acknowledgments from Prentice Hall Corporation as to its appointment as
agent for service of process for the Credit Parties;
(i) the favorable opinion of (a) Xxxxxx X. Xxxx, Esquire, general counsel
to the Credit Parties as to certain corporate matters, and (b) Powell,
Goldstein, Xxxxxx & Xxxxxx, counsel to the Credit Parties as to certain other
matters, in the form of Exhibits J-1 and J-2, respectively, in each case
------------ ---
addressed to the Agent and each of the Lenders;
(j) certified copies of the Sharing Agreements;
-40-
(k) copies of all documents and instruments, including all consents,
authorizations and filings, required or advisable under any Requirement of Law
or by any material Contrac tual Obligation of the Credit Parties, in connection
with the execution, delivery, performance, validity and enforceability of the
Credit Documents and the other documents to be executed and delivered hereunder,
and such consents, authorizations, filings and orders shall be in full force and
effect and all applicable waiting periods shall have expired;
(l) certificates, reports and other information as the Agent may reasonably
request from any Consolidated Company in order to satisfy the Lenders as to the
absence of any material liabilities or obligations arising from matters relating
to employees of the Consolidated Companies, including employee relations,
collective bargaining agreements, Plans and other compensation and employee
benefit plans;
(m) certificates, reports and other information as the Agent may reasonably
request from the Borrower in order to satisfy the Lenders that the Transaction
has been consummated in accordance with the Proxy Statement and all Requirements
of Law, including without limitation, a copy of the Certificate of Merger filed
with the State of Delaware and the State of Georgia evidencing that Xxxxxxxx and
its subsidiary, Ruby Tuesday, Inc. have been merged into the Borrower;
(n) Either (i) a certified copy of a favorable ruling from the Internal
Revenue Service that the Distribution qualifies as a tax-free spin-off under the
provisions of Sections 355 and 368(a)(1)(D) of the Internal Revenue Code, or
(ii) an opinion to such effect from Powell, Goldstein, Xxxxxx & Xxxxxx together
with a reliance letter addressed to the Agent and the Lenders stating that the
Agent and the Lenders may rely upon such opinion;
(o) all Restructured Indebtedness identified on Schedule 8.01 hereof,
-------------
together with all interest, prepayment premiums and other amounts due and
payable with respect thereto shall have been paid in full (including with the
proceeds of the Term Loans and the initial Borrowing pursuant to the Revolving
Loan Commitments) and all commitments thereunder shall have been terminated as
evidenced by written notice from Xxxxxxxx to such Lenders;
(p) a certified copy of the projections described in Section 6.14(c);
-41-
(q) certificates, reports and other information as the Agent may reasonably
request from any Consolidated Company in order to satisfy the Lenders as to the
absence of any material liabilities or obligations arising from litigation
(including without limitation, products liability and patent infringement
claims) pending or threatened against the Consolidated Companies; and
(r) evidence assuring the Agent and the Lenders that all corporate
proceedings and all other legal matters in connection with the authorization,
legality, validity and en forceability of the Credit Documents and the
Transaction are in form and substance satisfactory to the Lenders.
Section 5.02. Conditions to Each Loan. At the time of the making of
-----------------------
each Loan (but not including the continuation or conversion of any Revolving
Loan or Term Loan in the same principal amount), including the initial Loans
hereunder, (before as well as immediately after giving effect to such Loans and
to the proposed use of the proceeds thereof), the following conditions shall
have been satisfied or shall exist:
(a) there shall exist no Default or Event of Default;
(b) all representations and warranties by Borrower contained herein shall
be true and correct in all material respects with the same effect as though
such representations and warranties had been made on and as of the date of
such Loans;
(c) the Loans to be made and the use of proceeds thereof shall not
contravene, violate or conflict with, or involve the Agent or any Lender in
a violation of, any law, rule, injunction, or regulation, or determination
of any court of law or other governmental authority applicable to Borrower;
and
(d) the Agent shall have received such other documents or legal opinions
as the Agent or any Lender may reasonably request, all in form and substance
reasonably sat isfactory to the Agent.
Each request for a Borrowing or a Money Market Bid and the acceptance
by Borrower of the proceeds thereof shall constitute a representation and
warranty by Borrower, as of the date of the Loans comprising such Borrowing,
that the applicable conditions specified in Sections 5.01 and 5.02 have been
satisfied.
-42-
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES
------------------------------
Borrower (as to itself and all other Consolidated Companies)
represents and warrants as follows (with the understanding that the matters
described in the Schedules hereto assume the consummation of the Transaction):
Section 6.01. Corporate Existence; Compliance with Law. Each of the
----------------------------------------
Consolidated Companies is a corporation duly organized, validly existing, and in
good standing under the laws of the jurisdiction of its incorporation, and each
of the Credit Parties has the corporate power and authority and the legal right
to own and operate its property and to conduct its business. Each of the
Consolidated Companies (i) has the corporate power and authority and the legal
right to own and operate its property and to conduct its business, (ii) is duly
qualified as a foreign corporation and in good standing under the laws of each
jurisdiction where its ownership of property or the conduct of its business
requires such qualification, and (iii) is in compliance with all Requirements of
Law, where (a) the failure to have such power, authority and legal right as set
forth in clause (i), (b) the failure to be so qualified or in good standing as
set forth in clause (ii), or (c) the failure to comply with Requirements of Law
as set forth in clause (iii), would reasonably be expected, in the aggregate, to
have a Materially Adverse Effect. The jurisdiction of incorporation or
organization, and the ownership of all issued and outstanding capital stock, for
each Subsidiary as of the date of this Agreement is accurately described on
Schedule 6.01.
-------------
Section 6.02. Corporate Power; Authorization. Each of the Credit
------------------------------
Parties has the corporate power and authority to make, deliver and perform the
Credit Documents to which it is a party and has taken all necessary corporate
action to authorize the execution, delivery and performance of such Credit
Documents. No consent or authorization of, or filing with, any Person
(including, without limitation, any governmental authority), is required in
connection with the execution, delivery or performance by any Credit Party, or
the validity or enforceability against any Credit Party, of the Credit
Documents, other than such consents, authorizations or filings which have been
made or obtained.
Section 6.03. Enforceable Obligations. This Agreement has been duly
-----------------------
executed and delivered, and each other Credit Document will be duly executed and
delivered, by the respective Credit Parties, and this Agreement constitutes, and
each other Credit Document when executed and delivered will constitute, legal,
valid
-43-
and binding obligations of the Credit Parties, respectively, en forceable
against the Credit Parties in accordance with their respective terms, except as
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
or similar laws affecting the enforcement of creditors' rights generally and by
general principles of equity.
Section 6.04. No Legal Bar. The execution, delivery and performance
------------
by the Credit Parties of the Credit Documents will not violate any Requirement
of Law or cause a breach or default under any of their respective material
Contractual Obligations.
Section 6.05. No Material Litigation. Except as set forth on
----------------------
Schedule 6.05 or in any notice furnished to the Lenders pursuant to Section
-------------
7.07(e) at or prior to the respective times the representations and warranties
set forth in this Section 6.05 are made or deemed to be made hereunder, no
litigation, investigations or proceedings of or before any courts, tribunals,
arbitrators or governmental authorities are pending or, to the knowledge of
Borrower, threatened by or against any of the Consolidated Companies, or against
any of their respective properties or revenues, existing or future (a) with
respect to any Credit Document, or any of the transactions contemplated hereby
or thereby, or (b) seeking money damages in excess of $2,500,000, either singly
or in the aggregate or which, if adversely determined, would otherwise
reasonably be expected to have a Materially Adverse Effect.
Section 6.06. Investment Company Act, Etc. None of the Credit
---------------------------
Parties is an "investment company" or a company "controlled" by an "investment
company" (as each of the quoted terms is defined or used in the Investment
Company Act of 1940, as amended). None of the Credit Parties is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, or any foreign, federal or local statute or regulation limiting its
ability to incur indebtedness for money borrowed, guarantee such indebtedness,
or pledge its assets to secure such indebtedness, as contemplated hereby or by
any other Credit Document.
Section 6.07. Margin Regulations. No part of the proceeds of any of
------------------
the Loans will be used for any purpose which violates, or which would be
inconsistent or not in compliance with, the provisions of the applicable Margin
Regulations.
Section 6.08. Compliance With Environmental Laws.
----------------------------------
(a) The Consolidated Companies have received no notices of claims or
potential liability under, and are in compliance with, all applicable
Environmental Laws, where such claims and liabilities under, and failures to
comply with, such statutes,
-44-
regulations, rules, ordinances, laws or licenses, would reasonably be expected
to result in penalties, fines, claims or other liabilities to the Consolidated
Companies in amounts in excess of $500,000, either individually or in the
aggregate (including any such penalties, fines, claims, or liabilities relating
to the matters set forth on Schedule 6.08(a)), except as set forth on Schedule
---------------- --------
6.08(a) or in any notice furnished to the Lenders pursuant to Section 7.07(f) at
-------
or prior to the respective times the representations and warranties set forth in
this Section 6.08(a) are made or deemed to be made hereunder.
(b) Except as set forth on Schedule 6.08(b) or in any notice furnished
----------------
to the Lenders pursuant to Section 7.07(f) at or prior to the respective times
the representations and warranties set forth in this Section 6.08(b) are made or
deemed to be made hereunder, none of the Consolidated Companies has received any
notice of violation, or notice of any action, either judicial or administrative,
from any governmental authority (whether United States or foreign) relating to
the actual or alleged violation of any Environmental Law, including, without
limitation, any notice of any actual or alleged spill, leak, or other release of
any Hazardous Substance, waste or hazardous waste by any Consolidated Company or
its employees or agents, or as to the existence of any contamination on any
properties owned by any Consolidated Company, where any such violation, spill,
leak, release or contamination would reasonably be expected to result in
penalties, fines, claims or other liabilities to the Consolidated Companies in
amounts in excess of $500,000, either individually or in the aggregate.
(c) Except as set forth on Schedule 6.08(c), the Consolidated
----------------
Companies have obtained all necessary governmental permits, licenses and
approvals which are material to the operations conducted on their respective
properties, including without limitation, all required material permits,
licenses and approvals for (i) the emission of air pollutants or contaminants,
(ii) the treatment or pretreatment and discharge of waste water or storm water,
(iii) the treatment, storage, disposal or generation of hazardous wastes, (iv)
the withdrawal and usage of ground water or surface water, and (v) the disposal
of solid wastes.
Section 6.09. Insurance. The Consolidated Companies currently
---------
maintain insurance with respect to their respective properties and businesses,
with financially sound and reputable insurers, having coverages against losses
or damages of the kinds customarily insured against by reputable companies in
the same or similar businesses, such insurance being in amounts no less than
those amounts which are customary for such companies under similar
circumstances. The Consolidated Companies have paid all material amounts of
insurance premiums now due and owing with respect to
-45-
such insurance policies and coverages, and such policies and coverages are in
full force and effect.
Section 6.10. No Default. Except as set forth on Schedule 6.10, none
---------- -------------
of the Consolidated Companies is in default under or with respect to any
Contractual Obligation in any respect which default or defaults would be
reasonably expected in the aggregate to have a Materially Adverse Effect.
Section 6.11. No Burdensome Restrictions. Except as set forth on
--------------------------
Schedule 6.11 or in any notice furnished to the Lenders pursuant to Section
-------------
7.07(k) at or prior to the respective times the representations and warranties
set forth in this Section 6.11 are made or deemed to be made hereunder, none of
the Consolidated Companies is a party to or bound by any Contractual Obligation
or Requirement of Law which has had or would reasonably be expected to have a
Materially Adverse Effect.
Section 6.12. Taxes. Except as set forth on Schedule 6.12, each of
----- -------------
the Consolidated Companies have filed or caused to be filed all declarations,
reports and tax returns which are required to have been filed, and has paid all
taxes, custom duties, levies, charges and similar contributions ("taxes" in this
Section 6.12) shown to be due and payable on said returns or on any assessments
made against it or its properties, and all other taxes, fees or other charges
imposed on it or any of its properties by any governmental authority (other than
those the amount or validity of which is currently being contested in good faith
by appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided in its books); and no tax liens have been filed and, to
the knowledge of Borrower, no claims are being asserted with respect to any such
taxes, fees or other charges.
Section 6.13. Subsidiaries. Except as disclosed on Schedule 6.01, on
------------ -------------
the date of this Agreement, Borrower has no Subsidiaries and neither Borrower
nor any Subsidiary is a joint ven ture partner or general partner in any
partnership. Except as disclosed on Schedule 6.13 or in any notice furnished to
-------------
the Lenders pursuant to Section 7.07(l) at or prior to the respective times the
representations and warranties set forth in this Section 6.13 are made or deemed
to be made hereunder, Borrower has no Material Subsidiaries.
Section 6.14. Financial Statements. Borrower has furnished to the
--------------------
Agent and the Lenders:
(a) Audited Reports. The audited consolidated balance sheet as of
---------------
June 5, 1993, June 4, 1994 and June 3, 1995 of
-46-
Xxxxxxxx and the related consolidated statements of income, share holders'
equity and cash flows for the Fiscal Years then ended, including in each case
the related schedules and notes, setting forth in each case in comparative form
the figures for Morrison's previous Fiscal Year. The foregoing financial
statements fairly present in all material respects the consolidated financial
condition of Xxxxxxxx as at the dates thereof and results of operations for such
periods in conformity with GAAP consistently applied;
(b) Pro Forma Reports. The unaudited pro forma consolidated balance
-----------------
sheet of the Borrower dated as of December 2, 1995, and the related consolidated
pro forma statements of income set forth in the Proxy fairly presents, on a pro
forma consolidated basis, in conformity with GAAP applied on a basis consistent
with the financial statements referred to in Section 6.14(a), the consolidated
---------------
financial position of the Borrower after giving effect to the Distribution. The
Borrower, did not, as of the date thereof, have any material contingent
obligation, contingent liability or liability for taxes, long-term lease or
unusual forward or long-term commitment, which is not reflected in the financial
statements or notes thereto for such date referred to above;
(c) The Projections. The projections, dated as of January 18, 1996,
---------------
prepared for the Borrower and its Subsidiaries on a consolidated basis with
respect to Fiscal Year 1996, Fiscal Year 1997, Fiscal Year 1998 and Fiscal Year
1999, on an annual basis, copies of which have been furnished to each Lender,
have been prepared on the basis of the assumptions set forth therein, which are
believed by the Borrower to be reasonable and fair in the light of current
conditions and the past history of Xxxxxxxx and its Subsidiaries and to reflect
a reasonable estimate of the projected balance sheets, results of operations,
cash flows and other information presented therein; and
(d) No Material Adverse Change. Since the date of the preparation of
--------------------------
the pro forma financial statements set forth above, there have been no changes
with respect to the Consolidated Companies which has had or would reasonably be
expected to have a Materially Adverse Effect.
Section 6.15. ERISA. Except as disclosed on Schedule 6.15 or in any
----- -------------
notice to the Lenders furnished pursuant to Section 7.07(g) at or prior to the
respective times the representations and warranties set forth in this Section
6.15 are made or deemed to be made hereunder:
(1) Identification of Plans. None of the Consolidated Companies nor
-----------------------
any of their respective ERISA Affiliates maintains
-47-
or contributes to, or has during the past seven years maintained or contributed
to, any Plan that is subject to Title IV of ERISA;
(2) Compliance. Each Plan maintained by the Consolidated Companies
----------
have at all times been maintained, by their terms and in operation, in
compliance with all applicable laws, and the Consolidated Companies are subject
to no tax or penalty with respect to any Plan of such Consolidated Company or
any ERISA Affiliate thereof, including without limitation, any tax or penalty
under Title I or Title IV of ERISA or under Chapter 43 of the Tax Code, or any
tax or penalty resulting from a loss of deduction under Sections 162, 404, or
419 of the Tax Code, where the failure to comply with such laws, and such taxes
and penalties, together with all other liabilities referred to in this Section
6.15 (taken as a whole), would in the aggregate have a Materially Adverse
Effect;
(3) Liabilities. The Consolidated Companies are subject to no
-----------
liabilities (including withdrawal liabilities) with respect to any Plans of such
Consolidated Companies or any of their ERISA Affiliates, including without
limitation, any liabilities arising from Titles I or IV of ERISA, other than
obligations to fund benefits under an ongoing Plan and to pay current
contributions, expenses and premiums with respect to such Plans, where such
liabilities, together with all other liabilities referred to in this Section
6.15 (taken as a whole), would in the aggregate have a Materially Adverse
Effect;
(4) Funding. The Consolidated Companies and, with respect to any Plan
-------
which is subject to Title IV of ERISA, each of their respective ERISA
Affiliates, have made full and timely payment of all amounts (A) required to be
contributed under the terms of each Plan and applicable law, and (B) required to
be paid as expenses (including PBGC or other premiums) of each Plan, where the
failure to pay such amounts (when taken as a whole, including any penalties
attributable to such amounts) would have a Materially Adverse Effect. No Plan
subject to Title IV of ERISA (other than a Multiemployer Plan) has an "amount of
unfunded benefit liabilities" (as defined in Section 4001(a)(18) of ERISA),
determined as if such Plan terminated on any date on which this representation
and warranty is deemed made, in any amount which, together with all other
liabilities referred to in this Section 6.15 (taken as a whole), would have a
Materially Adverse Effect if such amount were then due and payable. None of the
Consolidated Companies would be subject to withdrawal liability with respect to
any Multiemployer Plan, determined as if the event resulting in such withdrawal
liability occurred on any date on which this representation is made or deemed to
be made based on the most recent actuarial valuation data made available to
employers participating in the Multiemployer Plan, in any amount which,
-48-
together with all other liabilities referred to in this Section 6.15 (taken as a
whole), would have a Materially Adverse Effect if such amounts were then due and
payable. The Consolidated Companies are subject to no liabilities with respect
to post-retirement medical benefits in any amounts which, together with all
other liabilities referred to in this Section 6.15 (taken as a whole), would
have a Materially Adverse Effect if such amounts were then due and payable.
Section 6.16. Patents, Trademarks, Licenses, Etc. Except as set
-----------------------------------
forth on Schedule 6.16, (i) the Consolidated Companies have obtained and hold in
-------------
full force and effect all material patents, trademarks, service marks, trade
names, copyrights, licenses and other such rights, free from material burdensome
restrictions, which are necessary for the operation of their respective
businesses as presently conducted, and (ii) to the best of Borrower's knowledge,
no product, process, method, service or other item presently sold by or employed
by any Consolidated Company in connection with such business infringes any
patents, trademark, service xxxx, trade name, copyright, license or other right
owned by any other person and there is not presently pending, or to the
knowledge of Borrower, threatened, any claim or litigation against or affecting
any Consolidated Company contesting such Person's right to sell or use any such
product, process, method, substance or other item where the result of such
failure to obtain and hold such benefits or such infringement would have a
Materially Adverse Effect.
Section 6.17. Ownership of Property. Except as set forth on Schedule
--------------------- --------
6.17, each Consolidated Company has good and marketable fee simple title to or a
----
valid leasehold interest in all of its real property and good title to, or a
valid leasehold interest in, all of its other property, as such properties are
reflected in the pro forma consolidated balance sheet of the Consolidated
Companies as of December 2, 1995 referred to in Section 6.14, other than
properties disposed of in the ordinary course of business since such date or as
otherwise permitted by the terms of this Agreement, subject to no Lien or title
defect of any kind, except Permitted Liens. The Consolidated Companies enjoy
peaceful and undisturbed possession under all of their respective material
leases.
Section 6.18. Indebtedness. As of the Closing Date and the Effective
------------
Date, except for the Indebtedness set forth on Schedule 8.01 and the
-------------
Restructured Indebtedness to be repaid with the proceeds of the Term Loans on
the Effective Date, none of the Consolidated Companies is an obligor in respect
of any Indebtedness for borrowed money, or any commitment to create or incur any
Indebtedness for borrowed money, in an amount greater than $1,000,000 in any
single case, and such Indebtedness and
-49-
commitments for amounts less than $1,000,000 do not exceed $2,500,000 in the
aggregate for all such Indebtedness and commitments of the Consolidated
Companies.
Section 6.19. Financial Condition. On the Closing Date and on the
-------------------
Effective Date, and on the date of each Loan hereunder and after giving effect
to the Transaction and the other transactions contemplated by this Agreement and
the other Credit Documents, including without limitation, the use of the
proceeds of the Loans as provided in Sections 2.01 and 3.01, (i) the assets of
each Credit Party at fair valuation and based on their present fair saleable
value (including, without limitation, the fair and realistic value of any
contribution or subrogation rights in respect of any Guaranty Agreement given by
such Credit Party) will exceed such Credit Party's debts, including contingent
liabilities (as such liabilities may be limited under the express terms of any
Guaranty Agreement of such Credit Party), (ii) the remaining capital of such
Credit Party will not be unreasonably small to conduct the Credit Party's
business, and (iii) such Credit Party will not have incurred debts, or have
intended to incur debts, beyond the Credit Party's ability to pay such debts as
they mature. For purposes of this Section 6.19, "debt" means any liability on a
claim, and "claim" means (a) the right to payment, whether or not such right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured, or (b)
the right to an equitable remedy for breach of performance if such breach gives
rise to a right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured or unsecured.
Section 6.20. Labor Matters. Except as set forth in Schedule 6.20 or
------------- -------------
in any notice furnished to the Lenders pursuant to Section 7.07(k) at or prior
to the respective times the repre sentations and warranties set forth in this
Section 6.20 are made or deemed to be made hereunder, the Consolidated Companies
have experienced no strikes, labor disputes, slow downs or work stop pages due
to labor disagreements which have had, or would reasonably be expected to have,
a Materially Adverse Effect, and, to the best knowledge of Borrower, there are
no such strikes, disputes, slow downs or work stoppages threatened against any
Consolidated Company. The hours worked and payment made to employees of the
Consolidated Companies have not been in violation in any material respect of the
Fair Labor Standards Act or any other applicable law dealing with such matters.
All payments due from the Consolidated Companies, or for which any claim may be
made against the Consolidated Companies, on account of wages and employee health
and welfare insurance and other benefits have been paid or accrued as
liabilities on the books of the Consolidated Companies where
-50-
the failure to pay or accrue such liabilities would reasonably be expected to
have a Materially Adverse Effect.
Section 6.21. Payment or Dividend Restrictions. Except as described
--------------------------------
on Schedule 6.21, none of the Consolidated Companies is party to or subject to
-------------
any agreement or understanding restricting or limiting the payment of any
dividends or other distributions by any such Consolidated Company.
Section 6.22. Transaction. As of the Effective Date, the Transaction
-----------
has been consummated substantially in accordance with the terms of the Proxy
Statement and all applicable law. The Distribution qualifies as a tax-free
spin-off under the provisions of Sections 355 and 368(a)(1)(D) of the Internal
Revenue Code.
Section 6.23. Sharing Agreements. Each of the Sharing Agreements is
------------------
in full force and effect and no material default exists thereunder.
Section 6.24. Disclosure. No representation or warranty contained in
----------
this Agreement (including the Schedules attached hereto) or in any other
document furnished from time to time pursuant to the terms of this Agreement,
contains or will contain any untrue statement of a material fact or omits or
will omit to state any material fact necessary to make the statements herein or
therein not misleading in any material respect as of the date made or deemed to
be made. Except as may be set forth herein (including the Schedules attached
hereto), there is no fact known to Borrower which has had, or is reasonably
expected to have, a Materially Adverse Effect.
ARTICLE VII.
AFFIRMATIVE COVENANTS
---------------------
So long as any Commitment remains in effect hereunder or any Note
shall remain unpaid, Borrower will:
Section 7.01. Corporate Existence, Etc. Preserve and maintain, and
-------------------------
cause each of its Material Subsidiaries to preserve and maintain, its corporate
existence, its material rights, franchises, and licenses, and its material
patents and copyrights (for the scheduled duration thereof), trademarks, trade
names, and service marks, necessary or desirable in the normal conduct of its
business, and its qualification to do business as a foreign corporation in all
jurisdictions where it conducts business or other activities making such
qualification necessary, where the failure to be so qualified would reasonably
be expected to have a Materially Adverse Effect.
-51-
Section 7.02. Compliance with Laws, Etc. Comply, and cause each of
--------------------------
its Subsidiaries to comply with all Requirements of Law (including, without
limitation, the Environmental Laws subject to the exception set forth in Section
6.08 where the penalties, claims, fines, and other liabilities resulting from
noncompliance with such Environmental Laws do not involve amounts in excess of
$2,500,000 in the aggregate) and Contractual Obligations applicable to or
binding on any of them where the failure to comply with such Requirements of Law
and Contractual Obligations would reasonably be expected to have a Materially
Adverse Effect.
Section 7.03. Payment of Taxes and Claims, Etc. Pay, and cause each
---------------------------------
of its Subsidiaries to pay, (i) all taxes, assessments and governmental charges
imposed upon it or upon its property, and (ii) all claims (including, without
limitation, claims for labor, materials, supplies or services) which might, if
unpaid, become a Lien upon its property, unless, in each case, the validity or
amount thereof is being contested in good faith by appropriate proceedings and
adequate reserves are maintained with respect thereto.
Section 7.04. Keeping of Books. Keep, and cause each of its
----------------
Subsidiaries to keep, proper books of record and account, containing complete
and accurate entries of all their respective financial and business
transactions.
Section 7.05. Visitation, Inspection, Etc. Permit, and cause each of
----------------------------
its Subsidiaries to permit, any representative of the Agent or any Lender to
visit and inspect any of its property, to examine its books and records and to
make copies and take extracts therefrom, and to discuss its affairs, finances
and accounts with its officers, all at such reasonable times and as often as the
Agent or such Lender may reasonably request.
Section 7.06. Insurance; Maintenance of Properties.
------------------------------------
(a) Maintain or cause to be maintained with financially sound and
reputable insurers, insurance with respect to its properties and business, and
the properties and business of its Subsidiaries, against loss or damage of the
kinds customarily insured against by reputable companies in the same or similar
businesses, such insurance to be of such types and in such amounts as is cus-
tomary for such companies under similar circumstances; provided, however, that
-------- -------
in any event Borrower shall use its best efforts to maintain, or cause to be
maintained, insurance in amounts and with coverages not materially less
favorable to any Consolidated Company as in effect on the date of this
Agreement.
-52-
(b) Cause, and cause each of the Consolidated Companies to cause, all
properties used or useful in the conduct of its business to be maintained and
kept in good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, settlements and improvements thereof, all as in the judgment of
Borrower may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times.
Section 7.07. Reporting Covenants. Furnish to each Lender:
-------------------
(a) Annual Financial Statements. As soon as available and in any event
---------------------------
within 90 days after the end of each Fiscal Year of Borrower, balance
sheets of the Consolidated Companies as at the end of such year, presented
on a consolidated basis, and the related statements of income,
shareholders' equity, and cash flows of the Consolidated Companies for
such Fiscal Year, presented on a consolidated basis, setting forth in each
case in comparative form the figures for the previous Fiscal Year, all in
reasonable detail and accompanied by a report thereon of Ernst & Young or
other independent public accountants of comparable recognized national
standing, which such report shall be unqualified as to going concern and
scope of audit and shall state that such financial statements present
fairly in all material respects the financial condition as at the end of
such Fiscal Year on a consolidated basis, and the results of operations
and statements of cash flows of the Consolidated Companies for such Fiscal
Year in accordance with GAAP and that the examination by such accountants
in connection with such consolidated financial statements has been made in
accordance with generally accepted auditing standards;
(b) Quarterly Financial Statements. As soon as available and in any
------------------------------
event within 45 days after the end of each fiscal quarter of Borrower
(other than the fourth fiscal quarter), balance sheets of the Consolidated
Companies as at the end of such quarter presented on a consolidated basis
and the related statements of income, shareholders' equity, and cash flows
of the Consolidated Companies for such fiscal quarter and for the portion
of Borrower's Fiscal Year ended at the end of such quarter, presented on a
consolidated basis setting forth in each case in comparative form the
figures for the corresponding quarter and the corresponding portion of
Borrower's previous Fiscal Year, all in reasonable detail and certified by
the chief financial officer or principal accounting officer of Borrower
that such financial statements
-53-
fairly present in all material respects the financial condition of the
Consolidated Companies as at the end of such fiscal quarter on a
consolidated basis, and the results of operations and statements of cash
flows of the Consolidated Companies for such fiscal quarter and such
portion of Borrower's Fiscal Year, in accordance with GAAP consistently
applied (subject to normal year-end audit adjustments and the absence of
certain footnotes);
(c) No Default/Compliance Certificate. Together with the financial
---------------------------------
statements required pursuant to subsections (a) and (b) above, a
certificate of the treasurer or chief financial officer of Borrower (i)
to the effect that, based upon a review of the activities of the
Consolidated Companies and such financial statements during the period
covered thereby, there exists no Event of Default and no Default under
this Agreement, or if there exists an Event of Default or a Default
hereunder, specifying the nature thereof and the proposed response
thereto, and (ii) demonstrating in reasonable detail compliance as at the
end of such Fiscal Year or such fiscal quarter with Section 7.08 and
Sections 8.01 through 8.05;
(d) Notice of Default. Promptly after any Executive Officer of
-----------------
Borrower has notice or knowledge of the occurrence of an Event of Default
or a Default, a certificate of the chief financial officer or principal
accounting officer of Borrower specifying the nature thereof and the
proposed response thereto;
(e) Litigation. Promptly after (i) the occurrence thereof, notice of
----------
the institution of or any material adverse development in any material
action, suit or proceeding or any governmental investigation or any
arbitration, before any court or arbitrator or any governmental or
administrative body, agency or official, against any Consolidated Company,
or any material property of any thereof seeking money damages in excess of
$2,500,000 or which, if adversely determined, would otherwise reasonably
be expected to have a Materially Adverse Effect, or (ii) actual knowledge
thereof, notice of the threat of any such action, suit, proceeding,
investigation or arbitration;
(f) Environmental Notices. Promptly after receipt thereof, notice of
---------------------
any actual or alleged violation, or notice of any action, claim or request
for information, either judicial or administrative, from any governmental
authority relating to any actual or alleged claim, notice of potential
responsibility under or violation of any Environmental Law,
-54-
or any actual or alleged spill, leak, disposal or other release of any
waste, petroleum product, or hazardous waste or Hazardous Substance by any
Consolidated Company which could result in penalties, fines, claims or
other liabilities to any Consolidated Company in amounts in excess of
$500,000;
(g) ERISA. (i) Promptly after the occurrence thereof with respect to
-----
any Plan of any Consolidated Company or any ERISA Affiliate thereof, or
any trust established thereunder, notice of (A) a "reportable event"
described in Section 4043 of ERISA and the regulations issued from time to
time thereunder (other than a "reportable event" not subject to the
provisions for 30-day notice to the PBGC under such regulations), or (B)
any other event which could subject any Consolidated Company to any tax,
penalty or liability under Title I or Title IV of ERISA or Chapter 43 of
the Tax Code, or any tax or penalty resulting from a loss of deduction
under Sections 162, 404 or 419 of the Tax Code, where any such taxes,
penalties or liabilities exceed or could exceed $500,000 in the aggregate;
(ii) Promptly after such notice must be provided to the PBGC, or to
a Plan participant, beneficiary or alternative payee, any notice required
under Section 101(d), 302(f)(4), 303, 307, 4041(b)(1)(A) or 4041(c)(1)(A)
of ERISA or under Section 401(a)(29) or 412 of the Tax Code with respect
to any Plan of any Consolidated Company or any ERISA Affiliate thereof;
(iii) Promptly after receipt, any notice received by any Consolidated
Company or any ERISA Affiliate thereof concerning the intent of the PBGC
or any other governmental authority to terminate a Plan of such Company or
ERISA Affiliate thereof which is subject to Title IV of ERISA, to impose
any liability on such Company or ERISA Affiliate under Title IV of ERISA
or Chapter 43 of the Tax Code;
(iv) Upon the request of the Agent, promptly upon the filing thereof
with the Internal Revenue Service ("IRS") or the Department of Labor
("DOL"), a copy of IRS Form 5500 or annual report for each Plan of any
Consolidated Company or ERISA Affiliate thereof which is subject to Title
IV of ERISA;
(v) Upon the request of the Agent, (A) true and complete copies of
any and all documents, government reports and IRS determination or opinion
letters or rulings for any Plan of any Consolidated Company from the IRS,
PBGC or DOL, (B) any reports filed with the IRS, PBGC or DOL with respect
-55-
to a Plan of the Consolidated Companies or any ERISA Affiliate thereof, or
(C) a current statement of withdrawal liability for each Multiemployer
Plan of any Consolidated Company or any ERISA Affiliate thereof;
(h) Liens. Promptly upon any Consolidated Company becoming aware
-----
thereof, notice of the filing of any federal statutory Lien, tax or other
state or local government Lien or any other Lien affecting their
respective properties, other than Permitted Liens;
(i) Public Filings, Etc. Promptly upon the filing thereof or otherwise
-------------------
becoming available, copies of all financial statements, annual, quarterly
and special reports, proxy statements and notices sent or made available
generally by Borrower to its public security holders, of all regular and
periodic reports and all registration statements and prospectuses, if any,
filed by any of them with any securities exchange, and of all press
releases and other statements made available generally to the public
containing material developments in the business or financial condition of
Borrower and the other Consolidated Companies;
(j) Accountants' Reports. Promptly upon receipt thereof, copies of all
--------------------
financial statements of, and all reports submitted by, independent public
accountants to Borrower in connection with each annual, interim, or
special audit of Borrower's financial statements, including without
limitation, the comment letter submitted by such accountants to management
in connection with their annual audit;
(k) Burdensome Restrictions, Etc. Promptly upon the existence or
----------------------------
occurrence thereof, notice of the existence or occurrence of (i) any
Contractual Obligation or Requirement of Law described in Section 6.11,
(ii) failure of any Consolidated Company to hold in full force and effect
those material trademarks, service marks, patents, trade names,
copyrights, licenses and similar rights necessary in the normal conduct of
its business, and (iii) any strike, labor dispute, slow down or work
stoppage as described in Section 6.20;
(l) New Material Subsidiaries. Within 30 days after the formation or
-------------------------
acquisition of any Material Subsidiary, or any other event resulting in
the creation of a new Material Subsidiary, notice of the formation or
acquisition of such Material Subsidiary or such occurrence, including a
description of the assets of such entity, the activities in which it will
be engaged, and such other information as the Agent and any of the Lenders
may request;
-56-
(m) Intercompany Asset Transfers. Promptly upon the occurrence
----------------------------
thereof, notice of the transfer of any assets from any Credit Party to any
other Consolidated Company that is not a Credit Party in any transaction
or series of related transactions where either the book value or the fair
market value of such assets is greater than $2,500,000 (excluding sales or
other transfers of assets in the ordinary course of business); and
(n) Other Information. With reasonable promptness, such other
-----------------
information about the Consolidated Companies as the Agent or any Lender
may reasonably request from time to time.
Section 7.08. Financial Covenants.
-------------------
(a) Fixed Charge Coverage. Maintain a Fixed Charge Coverage Ratio
---------------------
greater than the ratio set forth opposite the periods set forth below, measured
as of the last day of each fiscal quarter during such period for the immediately
preceding four quarters ending on such date:
Applicable Period Ratio
----------------- -----
Fiscal Year End 1996 through
Fiscal Year End 1997 1.75:1.00
First day of Fiscal Year
1998 and thereafter 2.00:1.00
Notwithstanding the foregoing: (i) the calculation of the Fixed Charge Coverage
Ratio on June 1, 1996 shall be made solely with respect to the fiscal quarter
ending on such date, (ii) the calculation of the Fixed Charge Coverage Ratio on
August 31, 1996 shall be made solely with respect to the two fiscal quarters
ending on that date, and (iii) the calculation of the Fixed Charge Coverage
Ratio on November 30, 1996 shall be calculated solely with respect to the three
fiscal quarters ending on such date.
(b) Consolidated Funded Debt to Total Capitalization. Maintain at all
------------------------------------------------
times, measured as of the last day of each fiscal quarter of the Borrower,
commencing on Fiscal Year End 1996, a ratio of Consolidated Funded Debt to Total
Capitalization of less than 0.60:1.0.
(c) Consolidated Net Worth. Maintain at all times Consolidated Net
----------------------
Worth in an amount not less than the sum of (i) $180,000,000.00, plus (ii) the
----
greater of (x) $0, and (y) fifty percent (50%) of the Consolidated Net Income
(Loss) earned by Borrower during the period commencing on June 2, 1996 and
-57-
ending on the last day of the fiscal quarter of the Borrower immediately
preceding the date of any calculation hereof (with such period calculated as a
single accounting period and taking into account 100% of all losses during such
period), plus (iii) an amount equal to 100% of the Net Proceeds of all issuances
----
of stock, warrants, Subordinated Debt, or other equity of the Borrower issued
following the date hereof.
Section 7.09. Notices Under Certain Other Indebtedness. Immediately
----------------------------------------
upon its receipt thereof, Borrower shall furnish the Agent a copy of any notice
received by it or any other Consolidated Company from the holder(s) of
Indebtedness referred to in Section 8.01(b), (c), (f), (g) or (i) (or from any
trustee, agent, attorney, or other party acting on behalf of such holder(s)) in
an amount which, in the aggregate, exceeds $2,500,000, where such notice states
or claims (i) the existence or occurrence of any default or event of default
with respect to such Indebtedness under the terms of any indenture, loan or
credit agreement, debenture, note, or other document evidencing or governing
such Indebtedness, or (ii) the existence or occurrence of any event or condition
which requires or permits holder(s) of any Indebtedness to exercise rights under
any Change in Control Provision.
Section 7.10. Additional Credit Parties and Collateral. Promptly
----------------------------------------
after (i) the formation or acquisition of any Material Subsidiary not listed on
Schedule 6.13, (ii) the transfer of assets to any Consolidated Company if notice
-------------
thereof is required to be given pursuant to Section 7.07(m) and as a result
thereof the recipient of such assets becomes a Material Subsidiary, or (iii) the
occurrence of any other event creating a new Material Subsidiary, Borrower shall
cause to be executed and delivered a Guaranty Agreement from each such Material
Subsidiary, together with related corporate authorization documents,
organizational documents, secretary's certificates and opinions, all in form and
substance satisfactory to the Agent and the Required Lenders.
ARTICLE VIII.
NEGATIVE COVENANTS
------------------
So long as any Commitment remains in effect hereunder or any Note
shall remain unpaid, Borrower will not and will not permit any Subsidiary to:
Section 8.01. Indebtedness. Create, incur, assume, guarantee, suffer
------------
to exist or otherwise become liable on or with respect to, directly or
indirectly, any Indebtedness, other than:
-58-
(a) Indebtedness of the Borrower under this Agreement and of the
Material Subsidiaries of Borrower pursuant to the Guaranty Agreement;
(b) Indebtedness outstanding or incurred on the Closing Date and
described on Schedule 8.01 (other than the Restructured Indebtedness to be
-------------
repaid in full on the Effective Date);
(c) purchase money Indebtedness to the extent secured by a Lien
permitted by Section 8.02(b) or Indebtedness of a Person acquired by the
Borrower to the extent secured by a Lien permitted by Section 8.02(h);
(d) unsecured current liabilities (other than liabilities for borrowed
money or liabilities evidenced by promissory notes, bonds or similar
instruments) incurred in the ordinary course of business and either (i)
not more than 30 days past due, or (ii) being disputed in good faith by
appropriate proceedings with reserves for such disputed liability
maintained in conformity with GAAP;
(e) Indebtedness of Borrower or any of its Subsidiaries under Interest
Rate Contracts;
(f) Subordinated Debt of the Borrower (but not Subsidiaries of the
Borrower);
(g) Guarantees of advances to officers and employees in the ordinary
course of business, or Guarantees otherwise disclosed to and approved in
writing by the Agent and the Required Lenders;
(h) Endorsements of instruments for deposit or collection in the
ordinary course of business; and
(i) Other unsecured Indebtedness of the Borrower (but not Subsidiaries
of the Borrower) (other than Guarantees) which does not result in a
Default or an Event of Default pursuant hereto.
Section 8.02. Liens. Create, incur, assume or suffer to exist any
-----
Lien on any of its property now owned or hereafter acquired to secure any
Indebtedness other than:
(a) Liens existing on the Closing Date and disclosed on Schedule 8.02;
-------------
(b) any Lien on any property and proceeds thereof securing
Indebtedness incurred or assumed for the purpose of
-59-
financing all or any part of the acquisition cost of such property and any
refinancing thereof, provided that such Lien does not extend to any other
--------
property (other than the proceeds of such property);
(c) Liens for taxes not yet due, and Liens for taxes or Liens imposed
by ERISA which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves are being
maintained in accordance with GAAP;
(d) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, materialmen and other Liens imposed by law and created in the
ordinary course of business for amounts not yet due or which are being
contested in good faith by appropriate proceedings and with respect to
which adequate reserves are being maintained in accordance with GAAP;
(e) Liens incurred or deposits made in the ordinary course of business
in connection with workers' compensation, unemployment insurance and other
types of social security, or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases, government
contracts, performance and return-of-money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed money);
(f) zoning, easements and restrictions on the use of real property
which do not materially impair the use of such property;
(g) rights in property reserved or vested in any governmental
authority which do not materially impair the use of such property; and
(h) any Lien existing on property of a Person immediately prior to its
being consolidated with or merged into the Borrower or into any
Consolidated Company, or any Lien existing on any property acquired by any
Consolidated Company at the time such property is so acquired (whether or
not the Indebtedness secured thereby shall have been assumed), provided
that (x) no such Lien shall have been created or assumed in contemplation
of consolidation or merger or such Person's becoming a Consolidated
Company or such acquisition of property and (y) each such Lien shall at
all times be confined solely to the item or items of property so acquired
and, if required by the terms of the instruments originally creating such
Lien, other property which is an improvement to
-60-
or is acquired for specific use in connection with such acquired property;
provided that, the aggregate amount of Indebtedness secured by Liens permitted
-------------
pursuant to this Section 8.02 shall at no time exceed 15% of the Consolidated
Net Worth of the Borrower calculated as of the last day of the most recently
ended fiscal quarter of the Borrower.
Section 8.03. Mergers, Sales, Etc. (a) Merge or consolidate with any
-------------------
other Person, except that this Section 8.03 shall not apply to (i) any merger or
consolidation of Borrower with any other Person provided that the Borrower is
the surviving corporation after such merger or consolidation, (ii) any merger or
consolidation of any of the Borrower's Subsidiaries with any other Person
provided that any such Subsidiary shall be the surviving corporation after such
merger or consolidation or (iii) any merger between Subsidiaries of Borrower,
and (b) sell, lease, transfer or otherwise dispose of its accounts, property or
other assets (including capital stock of any Subsidiary of Borrower), except
that this Section 8.03 shall not apply to (i) any sale, lease, transfer or other
disposition of assets of any Subsidiary of the Borrower to the Borrower or any
of its Material Subsidiaries, (ii) sales of inventory in the ordinary course of
business of the Borrower and its Subsidiaries, (iii) disposition of equipment or
inventory determined in good faith to be obsolete or unusable by the Borrower or
its Subsidiaries, or (iv) any other sale of the Borrower's assets during the
term of this Agreement with an aggregate book value, when aggregated with all
other such sales since the Closing Date, not exceeding 7.5% of the aggregate
book value of all of the Borrower's assets on the date of such transfer;
provided, however, that no transaction pursuant to clause (a), clause (b)(i) or
clause (b)(iv) above shall be permitted if any Default or Event of Default
exists at the time of such transaction or would exist as a result of such
transaction.
Section 8.04. Investments, Loans, Etc. Make, permit or hold any
-----------------------
Investments in any Person, or otherwise acquire or hold any Subsidiaries, other
than:
(a) Investments in Subsidiaries of Borrower existing as of the Closing
Date;
(b) Investments in the stock or other assets of any other Person that
is engaged in a business permitted by Section 8.08 hereof that, as a
result of such Investment, becomes a Subsidiary of Borrower (other than
Hostile Acquisitions); provided, however, that the aggregate amount of
-------- -------
Investments made pursuant to this subsection (b) shall not exceed, during
the term of this Agreement, a total value of
-61-
ten percent (10%) of the Consolidated Net Worth of the Borrower as
calculated on the last day of the most recently ended fiscal quarter of
the Borrower;
(c) marketable direct obligations of the United States or any agency
thereof, or obligations guaranteed by the United States or any agency
thereof, in each case supported by the full faith and credit of the United
States and maturing within one year from the date of creation thereof;
(d) Investments received in settlement of Indebtedness created in the
ordinary course of business;
(e) marketable direct obligations issued by any state of the United
States of America or any political subdivision of any such state or any
public instrumentality thereof, the interest from which is exempt from
Federal income taxes, maturing within one year from the date of
acquisition thereof and either having as at any date of determination the
one of the two highest ratings obtainable from either Standard & Poor's or
Moody's;
(f) unsecured commercial paper, the interest from which is exempt from
Federal income taxes, maturing no more than 270 days from the date of
creation and having as at any date of determination either the highest
rating obtainable from either Standard & Poor's or Moody's;
(g) commercial paper issued by corporations, each of which has a
consolidated net worth of not less than $500,000,000, and conducts a
substantial portion of its business in the United States of America,
maturing no more than 365 days from the date of acquisition thereof and
having as at any date of determination the highest rating obtainable from
either Standard & Poor's or Moody's; and
(h) money market or similar depository accounts, certificates of
deposit or bankers acceptances, in each case redeemable upon demand or
maturing within one year from the date of acquisition thereof, issued by
commercial banks incorporated under the laws of the United States of
America or any state thereof or the District of Columbia, provided (x)
each such bank has at any date of determination combined capital and
surplus of not less than $1,000,000,000 and a rating of its long-term debt
of at least A by Standard & Poor's or at least A by Moody's or a long-term
deposit rating of at least A issued by Standard & Poor's or at least A
issued by Moody's, (y) the aggregate amount of all such certificates of
deposit issued by such bank are fully insured at all times by the Federal
Deposit Insurance Company;
-62-
provided however, notwithstanding the foregoing, the Borrower and any
--------- -------
Subsidiary may continue to own any Investment which (A) complied with the
provisions of clauses (f), (g) or (h) at the time such Investment was made and
(B) at any date of determination does not so comply solely because (x) such
Investment no longer has the rating required from Standard & Poor's or Moody's
or (y) the bank having the money market or depository account or issuing the
certificate of deposit or bankers acceptance ceases to have the required level
of capital and surplus or to have a rating of its long-term debt of at least A
by Standard & Poor's or at least A by Moody's or to have a long-term deposit
rating of at least A by Standard & Poor's or at least A by Moody's, if, and for
so long as, in the good faith judgment of the relevant Executive Officer, no
loss of the principal amount of such Investment would occur as the result of the
Borrower or such Subsidiary continuing to own such Investment to maturity.
Nothing contained in the foregoing proviso shall be deemed to be applicable to
any new or renewed Investment at the time such Investment is made or renewed.
Section 8.05 Letters of Credit. Create, incur, issue, assume,
-----------------
guarantee, suffer to exist or otherwise become liable on or with respect to,
directly or indirectly, letters of credit where the maximum amount available to
be drawn under all such letters of credit would exceed, at any one time
outstanding, $50,000,000 in the aggregate.
Section 8.06. Sale and Leaseback Transactions. Sell or transfer any
-------------------------------
property, real or personal, whether now owned or hereafter acquired, and
thereafter rent or lease such property or other property which any Consolidated
Company intends to use for substantially the same purpose or purposes as the
property being sold or transferred; provided that, the Consolidated Companies
-------------
shall be permitted to sell or transfer property and rent or lease such property
or other property back so long as the aggregate market value of such property
sold or transferred during the term of this Agreement does not exceed
$5,000,000.
Section 8.07. Transactions with Affiliates.
----------------------------
(a) Enter into any transaction or series of related transactions which
in the aggregate would be material, whether or not in the ordinary course of
business, with any Affiliate of any Consolidated Company (but excluding any
Affiliate which is also a wholly-owned Subsidiary of Borrower and any
compensation arrangement with an officer or director of the Borrower or any
other Consolidated Company entered into in the ordinary course of business),
other than on terms and conditions substantially as favorable to such
Consolidated Company as would be obtained by such Consolidated Company at the
time in a comparable arm's-length transaction with a Person other than an
Affiliate.
-63-
(b) Convey or transfer to any other Person (including any other
Consolidated Company) any real property, buildings, or fixtures used in the
manufacturing or production operations of any Consolidated Company, or convey or
transfer to any other Consolidated Company any other assets (excluding
conveyances or transfers in the ordinary course of business) if at the time of
such conveyance or transfer any Default or Event of Default exists or would
exist as a result of such conveyance or transfer.
Section 8.08. Changes in Business. Enter into or engage in any
-------------------
business which is substantially different from the business engaged in by the
Borrower and its Subsidiaries on the Closing Date.
Section 8.09. ERISA. Take or fail to take any action with respect to
-----
any Plan of any Consolidated Company or, with respect to its ERISA Affiliates,
any Plans which are subject to Title IV of ERISA or to continuation health care
requirements for group health plans under the Tax Code, including without
limitation (i) establishing any such Plan, (ii) amending any such Plan (except
where required to comply with applicable law), (iii) terminating or withdrawing
from any such Plan, or (iv) incurring an amount of unfunded benefit liabilities,
as defined in Section 4001(a)(18) of ERISA, or any withdrawal liability under
Title IV of ERISA with respect to any such Plan, which together with any other
action or omission referred to in this Section 7.09 (taken as a whole) would
have a Materially Adverse Effect, without first obtaining the written approval
of the Required Lenders.
Section 8.10. Limitation on Payment Restrictions Affecting
--------------------------------------------
Consolidated Companies. Create or otherwise cause or suffer to exist or become
----------------------
effective, any consensual encumbrance or restriction on the ability of any
Consolidated Company to (i) pay dividends or make any other distributions on any
stock of a Subsidiary of the Borrower, or (ii) pay any intercompany debt owed to
Borrower or any other Consolidated Company, or (iii) transfer any of its
property or assets to Borrower or any other Consolidated Company, except any
consensual encumbrance or restriction existing as of the Closing Date.
Section 8.11. Actions Under Certain Documents. Without the prior
-------------------------------
written consent of the Required Lenders (i) modify, amend, cancel or rescind any
agreements or documents evidencing or governing Subordinated Debt or
intercompany debt, (ii) make any payment with respect to Subordinated Debt,
except that current interest accrued on such Subordinated Debt as of the date of
this Agreement and all interest subsequently accruing thereon (whether or not
paid currently) may be paid unless a Default or Event of Default has occurred
and is continuing, (iii) voluntarily prepay any portion of intercompany debt, or
(iv) amend or revise the
-64-
Sharing Agreements so as to materially increase the liabilities or obligations
of the Consolidated Companies thereunder.
Section 8.12. Changes in Fiscal Year. Change the calculation of the
----------------------
Fiscal Year of the Borrower.
Section 8.13. Issuance of Stock by Subsidiaries. Permit any
---------------------------------
Subsidiary (either directly or indirectly by the issuance of rights or options
for, or securities convertible into such shares) to issue, sell or dispose of
any shares of its stock of any class (other than directors' qualifying shares,
if any) except to the Borrower or another Subsidiary.
ARTICLE IX.
EVENTS OF DEFAULT
-----------------
Upon the occurrence and during the continuance of any of the following
specified events (each an "Event of Default"):
Section 9.01. Payments. Borrower shall fail to make promptly when
--------
due (including, without limitation, by mandatory prepayment) any principal
payment with respect to the Loans, or Borrower shall fail to make any payment of
interest, fee or other amount payable hereunder within three (3) days of its due
date;
Section 9.02. Covenants Without Notice. Borrower shall fail to
------------------------
observe or perform any covenant or agreement contained in Sections 7.01, 7.05,
7.07, 7.08, 7.09 or Article VIII;
Section 9.03. Other Covenants. Borrower shall fail to observe or
---------------
perform any covenant or agreement contained in this Agreement, other than those
referred to in Sections 9.01 and 9.02, and, if capable of being remedied, such
failure shall remain unremedied for 30 days after the earlier of (i) Borrower's
obtaining knowledge thereof, or (ii) written notice thereof shall have been
given to Borrower by Agent or any Lender;
Section 9.04. Representations. Any representation or warranty made
---------------
or deemed to be made by Borrower or any other Credit Party or by any of its
officers under this Agreement or any other Credit Document (including the
Schedules attached thereto), or any certificate or other document submitted to
the Agent or the Lenders by any such Person pursuant to the terms of this
Agreement or any other Credit Document, shall be incorrect in any material
respect when made or deemed to be made or submitted;
-65-
Section 9.05. Non-Payments of Other Indebtedness. Any Consolidated
----------------------------------
Company shall fail to make when due (whether at stated maturity, by
acceleration, on demand or otherwise, and after giving effect to any applicable
grace period) any payment of principal of or interest on any Indebtedness (other
than the Obligations) exceeding $2,500,000 individually or in the aggregate;
Section 9.06. Defaults Under Other Agreements; Change In Control
--------------------------------------------------
Provisions. (a) Any Consolidated Company shall fail to observe or perform any
----------
covenants or agreements (whether or not waived) contained in any agreements or
instruments relating to any of its Indebtedness exceeding $2,500,000
individually or in the aggregate, or any other event shall occur if the effect
of such failure or other event is to accelerate, or with notice or passage of
time or both, to permit the holder of such Indebtedness or any other Person to
accelerate, the maturity of such Indebtedness; or any such Indebtedness shall be
required to be prepaid (other than by a regularly scheduled required prepayment)
in whole or in part prior to its stated maturity; or (b) any event or condition
shall occur or exist which, pursuant to the terms of any Change in Control
Provision, requires or permits the holder(s) of the Indebtedness subject to such
Change in Control Provision to require that such Indebtedness be redeemed,
repurchased, defeased, prepaid or repaid, in whole or in part, or the maturity
of such Indebtedness to be accelerated;
Section 9.07. Bankruptcy. The Borrower or any Material Subsidiary
----------
shall commence a voluntary case concerning itself under the Bankruptcy Code or
applicable foreign bankruptcy laws; or an involuntary case for bankruptcy is
commenced against Borrower or any Material Subsidiary and the petition is not
controverted within 10 days, or is not dismissed within 60 days, after
commencement of the case; or a custodian (as defined in the Bankruptcy Code) or
similar official under applicable foreign bankruptcy laws is appointed for, or
takes charge of, all or any substantial part of the property of the Borrower or
any Material Subsidiary; or the Borrower or any Material Subsidiary commences
proceedings of its own bankruptcy or to be granted a suspension of payments or
any other proceeding under any reorganization, arrangement, adjustment of debt,
relief of debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction, whether now or hereafter in effect, relating to the Borrower or
any Material Subsidiary or there is commenced against the Borrower or any
Material Subsidiary any such proceeding which remains undismissed for a period
of 60 days; or the Borrower or any Material Subsidiary is adjudicated insolvent
or bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or the Borrower or any Material Subsidiary suffers any
appointment of any custodian or the like for it or any substantial part of its
property to continue undischarged or
-66-
unstayed for a period of 60 days; or the Borrower or any Material Subsidiary
makes a general assignment for the benefit of creditors; or the Borrower or any
Material Subsidiary shall fail to pay, or shall state that it is unable to pay,
or shall be unable to pay, its debts generally as they become due; or the
Borrower or any Material Subsidiary shall call a meeting of its creditors with a
view to arranging a composition or adjustment of its debts; or the Borrower or
any Material Subsidiary shall by any act or failure to act indicate its consent
to, approval of or acquiescence in any of the foregoing; or any corporate action
is taken by the Borrower or any Material Subsidiary for the purpose of effecting
any of the foregoing;
Section 9.08. ERISA. A Plan of either a Consolidated Company or of
-----
any of its ERISA Affiliates which is subject to Title IV of ERISA:
(i) shall fail to be funded in accordance with the minimum funding standard
required by applicable law, the terms of such Plan, Section 412 of the
Tax Code or Section 302 of ERISA for any plan year or a waiver of such
standard is sought or granted with respect to such Plan under
applicable law, the terms of such Plan or Section 412 of the Tax Code
or Section 303 of ERISA; or
(ii) is being, or has been, terminated or the subject of termination
proceedings under applicable law or the terms of such Plan; or
(iii) shall require a Consolidated Company to provide security under
applicable law, the terms of such Plan, Section 401 or 412 of the Tax
Code or Section 306 or 307 of ERISA; or
(iv) results in a liability to a Consolidated Company under applicable law,
the terms of such Plan, or Title IV of ERISA;
and there shall result from any such failure, waiver, termination or other event
described in clauses (i) through (iv) above a liability to the PBGC or a Plan
that would have a Materially Adverse Effect;
Section 9.09. Judgments. Judgments or orders for the payment of money in
---------
excess of $2,500,000 individually or in the aggregate or otherwise having a
Materially Adverse Effect shall be rendered against Borrower or any other
Consolidated Company and such judgment or order shall continue unsatisfied (in
the case of a money judgment) and in effect for a period of 30 days during
-67-
which execution shall not be effectively stayed or deferred (whether by action
of a court, by agreement or otherwise);
Section 9.10. Ownership of Credit Parties. If Borrower shall at any time
---------------------------
fail to own and control the shares of Voting Stock of any Guarantor which it
owned or controlled at the time such Guarantor became a Credit Party hereunder
other than due to sale of the Voting Stock of such Guarantor permitted pursuant
to Section 8.03 hereof;
Section 9.11. Change in Control of Borrower. With the exception of
-----------------------------
Xxxxxxxx prior to the Effective Date, any person or group (within the meaning of
Rule 13d-5 of the Securities and Exchange Commission as in effect on the date
hereof) shall become the owner, beneficially or of record, of shares
representing more than thirty percent (30%) of the aggregate ordinary voting
power represented by the issued and outstanding capital stock of the Borrower;
or
Section 9.12. Default Under Other Credit Documents; Sharing Agreements.
--------------------------------------------------------
(x) There shall exist or occur any "Event of Default" as provided under the
terms of any other Credit Document, or any Credit Document ceases to be in full
force and effect or the validity or enforceability thereof is disaffirmed by or
on behalf of Borrower or any other Credit Party, or at any time it is or becomes
unlawful for Borrower or any other Credit Party to perform or comply with its
obligations under any Credit Document, or the obligations of Borrower or any
other Credit Party under any Credit Document are not or cease to be legal, valid
and binding on Borrower or any such Credit Party or (y) any party to the Sharing
Agreements shall default with respect to its covenants or obligations thereunder
where such default results in a Materially Adverse Effect with respect to the
Credit Parties;
then, and in any such event, and at any time thereafter if any Event of Default
shall then be continuing, the Agent may, and upon the written or telex request
of the Required Lenders, shall, take any or all of the following actions,
without prejudice to the rights of the Agent, any Lender or the holder of any
Note to enforce its claims against Borrower or any other Credit Party: (i)
declare all Commitments terminated, whereupon the Commitments of each Lender
shall terminate immediately and any commitment fee shall forthwith become due
and payable without any other notice of any kind; (ii) declare the principal of
and any accrued interest on the Loans, and all other Obligations owing hereunder
to be, whereupon the same shall become, forthwith due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower; provided, that, if an Event of Default specified
--------
in Section 9.07 shall occur, the result which would occur upon the giving of
notice by the Agent to any Credit Party, shall occur automatically without the
giving of any such notice, and (iii) may exercise any other rights or remedies
available under the Credit Documents, at law or in equity.
-68-
ARTICLE X.
THE AGENT AND THE ADMINISTRATIVE AGENT.
--------------------------------------
Section 10.01. (a) Appointment of Agent. Each Lender hereby designates
--------------------
SunTrust as Agent to administer all matters concerning the Loans and to act as
herein specified. Each Lender hereby irrevocably authorizes, and each holder of
any Note by the acceptance of a Note shall be deemed irrevocably to authorize,
the Agent to take such actions on its behalf under the provisions of this
Agreement, the other Credit Documents, and all other instruments and agreements
referred to herein or therein, and to exercise such powers and to perform such
duties hereunder and thereunder as are specifically delegated to or required of
the Agent by the terms hereof and thereof and such other powers as are
reasonably incidental thereto. The Agent may perform any of its duties hereunder
by or through their agents or employees.
(b) Administrative Agent. Each Lender hereby designates SunTrust as the
--------------------
Administrative Agent to administer Money Market Bid Facility and to receive the
notices and to undertake such other duties specifically delegated to the
Administrative Agent herein. Except as set forth in the preceding sentence, the
Administrative Agent, as such, shall have no duties or obligations whatsoever
under this Agreement or any other Loan Document or any other document or any
matter related hereto or thereto, but shall nevertheless be entitled to all of
the indemnities and other protection afforded to the Agent under this Article X
for all actions taken by the Administrative Agent during the period that the
Administrative Agent is SunTrust.
Section 10.02. Authorization of Agent with Respect to the Security
---------------------------------------------------
Documents. (a) Each Lender hereby authorizes the Agent to enter into each of the
---------
Security Documents substantially in the form attached hereto, and to take all
action contemplated thereby. All rights and remedies under the Security
Documents may be exercised by the Agent for the benefit of the Agent and the
Lenders and the other beneficiaries thereof upon the terms thereof. The Lenders
further agree that the Agent may assign its rights and obligations under any of
the Security Documents to any affiliate of the Agent or to any trustee, if
necessary or appropriate under applicable law, which assignee in each such case
shall (subject to compliance with any requirements of applicable law governing
the assignment of such Security Documents) be entitled to all the rights of the
Agent under and with respect to the applicable Security Document.
(b) In each circumstance where, under any provision of any Security
Document, the Agent shall have the right to grant or
-69-
withhold any consent, exercise any remedy, make any determination or direct any
action by the Agent under such Security Document, the Agent shall act in respect
of such consent, exercise of remedies, determination or action, as the case may
be, with the consent of and at the direction of the Required Lenders; provided,
--------
however, that no such consent of the Required Lenders shall be required with
-------
respect to any consent, determination or other matter that is, in the Agent's
judgment, ministerial or administrative in nature. In each circumstance where
any consent of or direction from the Required Lenders is required, the Agent
shall send to the Lenders a notice setting forth a description in reasonable
detail of the matter as to which consent or direction is requested and the
Agent's proposed course of action with respect thereto. In the event the Agent
shall not have received a response from any Lender within five (5) Business Days
after such Lender's receipt of such notice, such Lender shall be deemed to have
agreed to the course of action proposed by the Agent.
Section 10.03. Nature of Duties of Agent. The Agent shall have no duties
-------------------------
or responsibilities except those expressly set forth in this Agreement and the
other Credit Documents. None of the Agent nor any of its respective officers,
directors, employees or agents shall be liable for any action taken or omitted
by it as such hereunder or in connection herewith, unless caused by its or their
gross negligence or willful misconduct. The duties of the Agent shall be
ministerial and administrative in nature; the Agent shall not have by reason of
this Agreement a fiduciary relationship in respect of any Lender; and nothing in
this Agreement, express or implied, is intended to or shall be so construed as
to impose upon the Agent any obligations in respect of this Agreement or the
other Credit Documents except as expressly set forth herein.
Section 10.04. Lack of Reliance on the Agent.
-----------------------------
(a) Independently and without reliance upon the Agent, each Lender, to the
extent it deems appropriate, has made and shall continue to make (i) its own
independent investigation of the financial condition and affairs of the Credit
Parties in connection with the taking or not taking of any action in connection
herewith, and (ii) its own appraisal of the creditworthiness of the Credit
Parties, and, except as expressly provided in this Agreement, the Agent shall
have no duty or responsibility, either initially or on a continuing basis, to
provide any Lender with any credit or other information with respect thereto,
whether coming into its possession before the making of the Loans or at any time
or times thereafter.
-70-
(b) The Agent shall not be responsible to any Lender for any recitals,
statements, information, representations or warranties herein or in any
document, certificate or other writing delivered in connection herewith or for
the execution, effectiveness, genuineness, validity, enforceability,
collectibility, priority or sufficiency of this Agreement, the Notes, the
Guaranty Agreement or any other documents contemplated hereby or thereby, or the
financial condition of the Credit Parties, or be required to make any inquiry
concerning either the performance or observance of any of the terms, provisions
or conditions of this Agreement, the Notes, the Guaranty Agreement or the other
documents contemplated hereby or thereby, or the financial condition of the
Credit Parties, or the existence or possible existence of any Default or Event
of Default.
Section 10.05. Certain Rights of the Agent. If the Agent shall request
---------------------------
instructions from the Required Lenders with respect to any action or actions
(including the failure to act) in connection with this Agreement, the Agent
shall be entitled to refrain from such act or taking such act, unless and until
the Agent shall have received instructions from the Required Lenders; and the
Agent shall not incur liability in any Person by reason of so refraining.
Without limiting the foregoing, no Lender shall have any right of action
whatsoever against the Agent as a result of the Agent acting or refraining from
acting hereunder in accordance with the instructions of the Required Lenders.
Section 10.06. Reliance by Agent. The Agent shall be entitled to rely,
-----------------
and shall be fully protected in relying, upon any note, writing, resolution,
notice, statement, certificate, telex, teletype or telecopier message, cable
gram, radiogram, order or other documentary, teletransmission or telephone
message believed by it to be genuine and correct and to have been signed, sent
or made by the proper Person. The Agent may consult with legal counsel
(including counsel for any Credit Party), independent public accountants and
other experts selected by it and shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with the advice of such
counsel, accountants or experts.
Section 10.07. Indemnification of Agent. To the extent the Agent is not
------------------------
reimbursed and indemnified by the Credit Parties, each Lender will reimburse and
indemnify the Agent, ratably according to the respective amounts of the Loans
outstanding under all Facilities (or if no amounts are outstanding, ratably in
accordance with the Commitments), in either case, for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including counsel fees
-71-
and disbursements) or disbursements of any kind or nature whatsoever which may
be imposed on, incurred by or asserted against the Agent in performing its
duties hereunder, in any way relating to or arising out of this Agreement or the
other Credit Documents; provided that no Lender shall be liable to the Agent for
--------
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from the
Agent's gross negligence or willful misconduct.
Section 10.08. The Agent in its Individual Capacity. With respect to its
------------------------------------
obligation to lend under this Agreement, the Loans made by it and the Notes
issued to it, the Agent shall have the same rights and powers hereunder as any
other Lender or holder of a Note and may exercise the same as though it were not
performing the duties specified herein; and the terms "Lenders", "Required
Lenders", "holders of Notes", or any similar terms shall, unless the context
clearly otherwise indicates, include the Agent in its individual capacity. The
Agent may accept deposits from, lend money to, and generally engage in any kind
of banking, trust, financial advisory or other business with the Consolidated
Companies or any affiliate of the Consolidated Companies as if it were not
performing the duties specified herein, and may accept fees and other
consideration from the Consolidated Companies for services in connection with
this Agreement and otherwise without having to account for the same to the
Lenders.
Section 10.09. Holders of Notes. The Agent may deem and treat the payee
----------------
of any Note as the owner thereof for all purposes hereof unless and until a
written notice of the assignment or transfer thereof shall have been filed with
the Agent. Any request, authority or consent of any Person who, at the time of
making such request or giving such authority or consent, is the holder of any
Note shall be conclusive and binding on any subsequent holder, transferee or
assignee of such Note or of any Note or Notes issued in exchange therefor.
Section 10.10. Successor Agent.
---------------
(a) The Agent may resign at any time by giving written notice thereof to
the Lenders and Borrower and may be removed at any time with or without cause by
the Required Lenders; provided, however, the Agent may not resign or be removed
-------- -------
until a successor Agent has been appointed and shall have accepted such
appointment. Upon any such resignation or removal, the Required Lenders shall
have the right to appoint a successor Agent subject to Borrower's prior written
approval. If no successor Agent shall have been so appointed by the Required
Lenders, and shall have accepted such appointment, within 30 days after the
retiring Agent's giving of
-72-
notice of resignation or the Required Lenders' removal of the retiring Agent,
then the retiring Agent may, on behalf of the Lenders, appoint a successor Agent
subject to Borrower's prior written approval, which shall be a bank which
maintains an office in the United States, or a commercial bank organized under
the laws of the United States of America or any State thereof, or any Affiliate
of such bank, having a combined capital and surplus of at least $1,000,000,000.
(b) Upon the acceptance of any appointment as the Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations under
this Agreement. After any retiring Agent's resignation or removal hereunder as
Agent, the provisions of this Article X shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was an Agent under this
Agreement. Prior to the exercise by the Borrower of the option to assume the
obligations of the Administrative Agent hereunder, any resignation or removal of
the Agent shall also be deemed to be a resignation or removal of the
Administrative Agent so that the Agent and the Administrative Agent shall at all
times be the same Person except as provided in Section 10.11.
Section 10.11. Replacement of Administrative Agent with the Borrower.
-----------------------------------------------------
Upon no less than thirty days' prior written notice to the Administrative Agent
and each Lender, the Borrower shall have the option, on each anniversary of the
Closing Date, to elect to assume the obligations of the Administrative Agent
pursuant to this Agreement without the consent of the Agent or any Lender. In
the event that the Borrower so assumes such obligations in writing, all
references to the Administrative Agent set forth herein or in any other Loan
Document shall be deemed to refer to the Borrower.
ARTICLE XI.
MISCELLANEOUS
-------------
Section 11.01. Notices. All notices, requests and other communications to
-------
any party hereunder shall be in writing (including bank wire, telex, telecopy or
similar teletransmission or writing) and shall be given to such party at its
address or applicable teletransmission number set forth on the signature pages
hereof, or such other address or applicable teletransmission number as such
party may hereafter specify by notice to the Agent and Borrower. Each such
notice, request or other communication shall be effective (i) if given by telex,
when such telex is
-73-
transmitted to the telex number specified in this Section and the appropriate
answerback is received, (ii) if given by mail, 72 hours after such communication
is deposited in the mails with first class postage prepaid, addressed as
aforesaid, (iii) if given by telecopy, when such telecopy is transmitted to the
telecopy number specified in this Section and the appropriate confirmation is
received, or (iv) if given by any other means (including, without limitation, by
air courier), when delivered or received at the address specified in this
Section; provided that notices to the Administrative Agent and the Agent shall
--------
not be effective until received.
Section 11.02. Amendments, Etc. No amendment or waiver of any provision
----------------
of this Agreement or the other Credit Documents, nor consent to any departure by
any Credit Party therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Required Lenders (and in the case of any
amendment, the applicable Credit Party), and then such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given; provided that no amendment, waiver or consent shall, unless in
--------
writing and signed by all the Lenders do any of the following: (i) waive any of
the conditions specified in Section 5.01 or 5.02, (ii) increase the Commitments
or contractual obligations of the Lenders to Borrower under this Agreement,
(iii) reduce the principal of, or interest on, the Notes or any fees hereunder,
(iv) postpone any date fixed for the payment in respect of principal of, or
interest on, the Notes or any fees hereunder, (v) change the percentage of the
Commitments or of the aggregate unpaid principal amount of the Notes, or the
number or identity of Lenders which shall be required for the Lenders or any of
them to take any action hereunder, (vi) agree to release any Guarantor from its
obligations under any Guaranty Agreement, (vii) modify the definition of
"Required Lenders," or (viii) modify this Section 11.02. Notwithstanding the
foregoing, no amendment, waiver or consent shall, unless in writing and signed
by the Agent and the Administrative Agent in addition to the Lenders required
hereinabove to take such action, affect the rights or duties of the Agent or the
Administrative Agent, as the case may be, under this Agreement or under any
other Credit Document.
Section 11.03. No Waiver; Remedies Cumulative. No failure or delay on the
------------------------------
part of the Agent, the Administrative Agent, any Lender or any holder of a Note
in exercising any right or remedy hereunder or under any other Credit Document,
and no course of dealing between any Credit Party and the Agent, the
Administrative Agent, any Lender or the holder of any Note shall operate as a
waiver thereof, nor shall any single or partial exercise of any right or remedy
hereunder or under any other Credit Document preclude any other or further
exercise thereof or
-74-
the exercise of any other right or remedy hereunder or thereunder. The rights
and remedies herein expressly provided are cumulative and not exclusive of any
rights or remedies which the Agent, the Administrative Agent, any Lender or the
holder of any Note would otherwise have. No notice to or demand on any Credit
Party not required hereunder or under any other Credit Document in any case
shall entitle any Credit Party to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights of the
Agent, the Administrative Agent, the Lenders or the holder of any Note to any
other or further action in any circumstances without notice or demand.
Section 11.04. Payment of Expenses, Etc. Borrower shall:
-------------------------
(i) whether or not the transactions hereby contemplated are consummated,
pay all reasonable, out-of-pocket costs and expenses of the Agent and the
Administrative Agent in the administration (both before and after the
execution hereof and including reasonable expenses actually incurred relating
to advice of counsel as to the rights and duties of the Agent, the
Administrative Agent and the Lenders with respect thereto) of, and in
connection with the preparation, execution and delivery of, preservation of
rights under, enforcement of, and, after a Default or Event of Default,
refinancing, renegotiation or restructuring of, this Agreement and the other
Credit Documents and the documents and instruments referred to therein, and
any amendment, waiver or consent relating thereto (including, without
limitation, the reasonable fees actually incurred and disbursements of
counsel for the Agent and the Administrative Agent), and in the case of
enforcement of this Agreement or any Credit Document after an Event of
Default, all such reasonable, out-of-pocket costs and expenses (including,
without limitation, the reasonable fees actually incurred and reasonable
disbursements and changes of counsel), for any of the Lenders;
(ii) subject, in the case of certain Taxes, to the applicable provisions of
Section 4.07(b), pay and hold each of the Lenders harmless from and against
any and all present and future stamp, documentary, and other similar Taxes
with respect to this Agreement, the Notes and any other Credit Documents, any
collateral described therein, or any payments due thereunder, and save each
Lender harmless from and against any and all liabilities with respect to or
resulting from any delay or omission to pay such Taxes; and
(iii) indemnify the Agent, the Administrative Agent and each Lender, and
their respective officers, directors, employees, representatives and agents
from, and hold each of
-75-
them harmless against, any and all costs, losses, liabilities, claims,
damages or expenses incurred by any of them (whether or not any of them is
designated a party thereto) (an "Indemnitee") arising out of or by reason of
any investigation, litigation or other proceeding related to any actual or
proposed use of the proceeds of any of the Loans or any Credit Party's
entering into and performing of the Agreement, the Notes, or the other Credit
Documents, including, without limitation, the reasonable fees actually
incurred and disbursements of counsel incurred in connection with any such
investigation, litigation or other proceeding; provided, however, Borrower
-------- -------
shall not be obligated to indemnify any Indemnitee for any of the foregoing
arising out of such Indemnitee's gross negligence or willful misconduct;
(iv) without limiting the indemnities set forth in subsection (iii) above,
indemnify each Indemnitee for any and all expenses and costs (including
without limitation, remedial, removal, response, abatement, cleanup,
investigative, closure and monitoring costs), losses, claims (including
claims for contribution or indemnity and including the cost of investigating
or defending any claim and whether or not such claim is ultimately defeated,
and whether such claim arose before, during or after any Credit Party's
ownership, operation, possession or control of its business, property or
facilities or before, on or after the date hereof, and in cluding also any
amounts paid incidental to any compromise or settlement by the Indemnitee or
Indemnitees to the holders of any such claim), lawsuits, liabilities,
obligations, actions, judgments, suits, disbursements, encumbrances, liens,
damages (including without limitation damages for contamination or
destruction of natural resources), penalties and fines of any kind or nature
whatsoever (including without limitation in all cases the reasonable fees
actually incurred, other charges and disbursements of counsel in connection
therewith) incurred, suffered or sustained by that Indemnitee based upon,
arising under or relating to Environmental Laws based on, arising out of or
relating to in whole or in part, the existence or exercise of any rights or
remedies by any Indemnitee under this Agreement, any other Credit Document or
any related documents.
If and to the extent that the obligations of Borrower under this Section 11.04
are unenforceable for any reason, Borrower hereby agrees to make the maximum
contribution to the payment and satisfaction of such obligations which is
permissible under applicable law.
Section 11.05. Right of Setoff. In addition to and not in limitation
---------------
of all rights of offset that any Lender or other
-76-
holder of a Note may have under applicable law, each Lender or other holder of a
Note shall, upon the occurrence of any Event of Default and whether or not such
Lender or such holder has made any demand or any Credit Party's obligations have
matured, have the right to appropriate and apply to the payment of any Credit
Party's obligations hereunder and under the other Credit Documents, all deposits
of any Credit Party (general or special, time or demand, provisional or final)
then or thereafter held by and other indebtedness or property then or thereafter
owing by such Lender or other holder to any Credit Party, whether or not related
to this Agreement or any transaction hereunder.
Section 11.06. Benefit of Agreement; Assignments; Participations.
-------------------------------------------------
(a) This Agreement shall be binding upon and inure to the benefit of
and be enforceable by the respective successors and assigns of the parties
hereto, provided that Borrower may not assign or transfer any of its interest
hereunder without the prior written consent of the Lenders.
(b) Any Lender may make, carry or transfer Loans at, to or for the
account of, any of its branch offices or the office of an Affiliate of such
Lender.
(c) Each Lender may assign all or a portion of its interests, rights
and obligations under this Agreement (including all or a portion of any of its
Commitments and the Loans at the time owing to it and the Notes held by it) to
any Eligible Assignee; provided, however, that (i) the Borrower must give its
-------- -------
prior written consent to such assignment (which consent shall not be
unreasonably withheld or delayed) unless such assignment is an Affiliate of the
assigning Lender or unless an Event of Default has occurred and is continuing
hereunder, (ii) the amount of the Commitments of the assigning Lender subject to
each assignment (determined as of the date the assignment and acceptance with
respect to such assignment is delivered to the Agent) shall not be less than an
amount equal to $5,000,000 or greater integral multiplies of $1,000,000, (iii)
the parties to each such assignment shall execute and deliver to the Agent an
Assignment and Acceptance, together with a Note or Notes subject to such
assignment and, unless such assignment is to an Affiliate of such Lender, a
processing and recordation fee of $2,500, (iv) a Lender must assign a
proportionate amount of both its Revolving Loan Commitment and Term Loans, and
(v) no Lender shall make more than two (2) assignments to any Person or Persons
which are not Affiliates of such Lender during the term of this Agreement
without the prior written consent of the Borrower and the Agent (such consent
not to be unreasonably withheld or delayed). Borrower shall not be responsible
for such processing and
-77-
recordation fee or any costs or expenses incurred by any Lender or the Agent in
connection with such assignment. From and after the effective date specified in
each Assignment and Acceptance, which effective date shall be at least five (5)
Business Days after the execution thereof, the assignee thereunder shall be a
party hereto and to the extent of the interest assigned by such Assignment and
Acceptance, have the rights and obligations of a Lender under this Agreement.
Notwithstanding the foregoing, the assigning Lender must retain after the
consummation of such Assignment and Acceptance, a minimum aggregate amount of
Commitments of $5,000,000; provided, however, no such minimum amount shall be
-------- -------
required with respect to any such assignment made at any time there exists an
Event of Default hereunder. Within five (5) Business Days after receipt of the
notice and the Assignment and Acceptance, Borrower shall execute and deliver to
the Agent, in exchange for the surrendered Note or Notes, a new Note or Notes to
the order of such assignee in a principal amount equal to the applicable
Commitments assumed by it pursuant to such Assignment and Acceptance and new
Note or Notes to the assigning Lender in the amount of its retained Commitment
or Commitments. Such new Note or Notes shall be in an aggregate principal
amount equal to the aggregate principal amount of such surrendered Note or
Notes, shall be dated the date of the surrendered Note or Notes which they
replace, and shall otherwise be in substantially the form attached hereto.
(d) Each Lender may, without the consent of Borrower or the Agent,
sell participations to one or more banks or other entities in all or a portion
of its rights and obligations under this Agreement (including all or a portion
of its Commitments in the Loans owing to it and the Notes held by it), provided,
--------
however, that (i) no Lender may sell a participation in its aggregate
-------
Commitments (after giving effect to any permitted assignment hereof) unless it
retains an aggregate exposure of $5,000,000, provided, however, sales of
participations to an Affiliate of such Lender shall not be included in such
calculation; provided, however, no such maximum amount shall be applicable to
-------- -------
any such participation sold at any time there exists an Event of Default
hereunder, (ii) such Lender's obligations under this Agreement shall remain
unchanged, (iii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, and (iv) the
participating bank or other entity shall not be entitled to the benefit (except
through its selling Lender) of the cost protection provisions contained in
Article IV of this Agreement, and (v) Borrower and the Agent, the Administrative
Agent and other Lenders shall continue to deal solely and directly with each
Lender in connection with such Lender's rights and obligations under this
Agreement and the other Credit Documents, and such Lender shall retain the sole
right to enforce the obligations of Borrower relating to the Loans and to
approve any amendment,
-78-
modification or waiver of any provisions of this Agreement. Each Lender shall
promptly notify in writing the Agent and the Borrower of any sale of a
participation hereunder.
(e) Any Lender or participant may, in connection with the assignment
or participation or proposed assignment or participation, pursuant to this
Section, disclose to the assignee or participant or proposed assignee or
participant any information relating to Borrower or the other Consolidated
Companies furnished to such Lender by or on behalf of Borrower or any other
Consolidated Company. With respect to any disclosure of confidential, non-
public, proprietary information, such proposed assignee or participant shall
agree to use the information only for the pur pose of making any necessary
credit judgments with respect to this credit facility and not to use the
information in any manner prohibited by any law, including without limitation,
the securities laws of the United States. The proposed participant or assignee
shall agree not to disclose any of such information except (i) to directors,
employees, auditors or counsel to whom it is necessary to show such information,
each of whom shall be informed of the confidential nature of the information,
(ii) in any statement or testimony pursuant to a subpoena or order by any court,
governmental body or other agency asserting jurisdiction over such entity, or as
otherwise required by law (provided prior notice is given to Borrower and the
Agent unless otherwise prohibited by the subpoena, order or law), and (iii) upon
the request or demand of any regulatory agency or authority with proper
jurisdiction. The proposed participant or assignee shall further agree to return
all documents or other written material and copies thereof received from any
Lender, the Agent, the Administrative Agent or Borrower relating to such
confidential information unless otherwise properly disposed of by such entity.
(f) Any Lender may at any time assign all or any portion of its rights
in this Agreement and the Notes issued to it to a Federal Reserve Bank; provided
--------
that no such assignment shall release the Lender from any of its obligations
hereunder.
(g) If (i) any Taxes referred to in Section 4.07(b) have been levied
or imposed so as to require withholdings and reductions by the Borrower and
payment by the Borrower of additional amounts to any Lender as a result thereof
or any Lender shall make demand for payment of any material additional amounts
as compensation for increased cost pursuant to Section 4.10, then and in such
event, upon request from the Borrower delivered to such Lender, the Agent, such
Lender shall assign, in accordance with the provisions of Section 11.06(c), all
of its rights and obligations under this Agreement and the other Credit
Documents to an Eligible Assignee selected by the Borrower and consented to by
the Agent in consideration for the payment by such assignee to the Lender
-79-
of the principal of and interest on the outstanding Loans accrued to the date of
such assignment, the assumption of such Lender's Commitments hereunder, together
with any and all other amounts owing to such Lender under any provisions of this
Agreement or the other Credit Documents accrued to the date of such assignment.
Section 11.07. Governing Law; Submission to Jurisdiction.
-----------------------------------------
(a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER AND UNDER THE NOTES SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES
THEREOF) OF THE STATE OF GEORGIA.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT, THE
NOTES OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE SUPERIOR COURT OF
XXXXXX COUNTY, GEORGIA, OR ANY OTHER COURT OF THE STATE OF GEORGIA OR OF THE
UNITED STATES OF AMERICA FOR THE NORTHERN DISTRICT OF GEORGIA, AND, BY EXECUTION
AND DELIVERY OF THIS AGREEMENT, BORROWER HEREBY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE
AFORESAID COURTS. THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE TRIAL BY JURY,
AND BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.
(c) BORROWER HEREBY IRREVOCABLY DESIGNATES PRENTICE HALL CORPORATION,
ATLANTA, GEORGIA, AS ITS DESIGNEE, APPOINTEE AND LOCAL AGENT TO RECEIVE, FOR AND
ON BEHALF OF BORROWER, SERVICE OF PROCESS IN SUCH RESPECTIVE JURISDICTIONS IN
ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR THE NOTES OR
ANY DOCUMENT RELATED THERETO. IT IS UNDERSTOOD THAT A COPY OF SUCH PROCESS
SERVED ON SUCH LOCAL AGENT WILL BE PROMPTLY FORWARDED BY SUCH LOCAL AGENT AND BY
THE SERVER OF SUCH PROCESS BY MAIL TO BORROWER AT ITS ADDRESS SET FORTH OPPOSITE
ITS SIGNATURE BELOW, BUT THE FAILURE OF BORROWER TO RECEIVE SUCH COPY SHALL NOT
AFFECT IN ANY WAY THE SERVICE OF SUCH PROCESS. BORROWER FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY
SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO BORROWER AT ITS SAID ADDRESS, SUCH SERVICE
TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING.
(d) Nothing herein shall affect the right of the Agent, the
Administrative Agent, any Lender, any holder of a Note or any Credit Party to
serve process in any other manner permitted by law
-80-
or to commence legal proceedings or otherwise proceed against Borrower in any
other jurisdiction.
Section 11.08. Independent Nature of Lenders' Rights. The amounts
-------------------------------------
payable at any time hereunder to each Lender shall be a separate and independent
debt, and each Lender shall be entitled to protect and enforce its rights
pursuant to this Agreement and its Notes, and it shall not be necessary for any
other Lender to be joined as an additional party in any proceeding for such pur
pose.
Section 11.09. Counterparts. This Agreement may be executed in any
------------
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so ex ecuted and delivered shall be an
original, but all of which shall together constitute one and the same
instrument.
Section 11.10. Effectiveness; Termination of Commitments; Survival.
---------------------------------------------------
(a) This Agreement shall become effective on the date on which all of
the parties hereto shall have signed a copy hereof (whether the same or
different copies) and shall have delivered the same to the Agent or, in the case
of the Lenders, shall have given to the Agent written or telex notice (actually
received) that the same has been signed and mailed to them, provided that, the
-------- ----
Lenders shall have no obligation to make a Loan hereunder until the effective
Date. In the event that the Effective Date does not occur by March 22, 1996,
the Commitments and this Agreement shall terminate subject to the survival of
the Sections referenced below.
(b) The obligations of Borrower under Sections 4.07(b), 4.10, 4.12,
4.13, 4.16 and 11.04 hereof shall survive the payment in full of the Notes after
the Maturity Date. All representations and warranties made herein, in the
certificates, reports, notices, and other documents delivered pursuant to this
Agreement shall survive the execution and delivery of this Agreement, the other
Credit Documents, and such other agreements and documents, the making of the
Loans hereunder, and the execution and delivery of the Notes.
Section 11.11. Severability. In case any provision in or obligation
------------
under this Agreement or the other Credit Documents shall be invalid, illegal or
unenforceable, in whole or in part, in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be af
fected or impaired thereby.
-81-
Section 11.12. Independence of Covenants. All covenants hereunder
-------------------------
shall be given independent effect so that if a particular action or condition is
not permitted by any of such covenants, the fact that it would be permitted by
an exception to, or be otherwise within the limitation of, another covenant,
shall not avoid the occurrence of a Default or an Event of Default if such
action is taken or condition exists.
Section 11.13. Change in Accounting Principles, Fiscal Year or Tax
---------------------------------------------------
Laws. If (i) any preparation of the financial statements referred to in Section
----
7.07 hereafter occasioned by the promulgation of rules, regulations,
pronouncements and opinions by or required by the Financial Accounting Standards
Board or the American Institute of Certified Public Accounts (or successors
thereto or agencies with similar functions) result in a material change in the
method of calculation of financial covenants, standards or terms found in this
Agreement, (ii) there is any change in Borrower's fiscal quarter or Fiscal Year,
or (iii) there is a material change in federal tax laws which materially affects
any of the Consolidated Companies' ability to comply with the financial
covenants, standards or terms found in this Agreement, Borrower and the Required
Lenders agree to enter into negotiations in order to amend such provisions so as
to equitably reflect such changes with the de sired result that the criteria for
evaluating any of the Consolidated Companies' financial condition shall be the
same after such changes as if such changes had not been made. Unless and until
such provisions have been so amended, the provisions of this Agreement shall
govern.
Section 11.14. Headings Descriptive; Entire Agreement. The
--------------------------------------
headings of the several sections and subsections of this Agreement are inserted
for convenience only and shall not in any way affect the meaning or construction
of any provision of this Agreement. This Agreement, the other Credit Documents,
and the agreements and documents required to be delivered pursuant to the terms
of this Agreement constitute the entire agreement among the parties hereto and
thereto regarding the subject matters hereof and thereof and supersede all prior
agreements, representations and understandings related to such subject matters.
-82-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered in Atlanta, Georgia, by their duly authorized
officers as of the day and year first above written.
Address for Notices: RUBY TUESDAY (GEORGIA), INC.
-------------------
0000 Xxxxxxxx Xxxxx
P. O. Box 160266-0001
Xxxxxx, Xxxxxxx 00000 By:/s/ J. Xxxxxxx Xxxxxxxxxx
---------------------------
J. Xxxxxxx Xxxxxxxxxx
Vice President
Attn: J. Xxxxxxx Xxxxxxxxxx
Telecopy: (000) 000-0000
Attest:/s/ Xxxxxx X. Xxxx
-----------------------
Xxxxxx X. Xxxx
Secretary
[CORPORATE SEAL]
STATE OF GEORGIA
COUNTY OF _____________
Signed, sealed and delivered
in the presence of:
[SIGNATURE APPEARS HERE]
---------------------------------------------
Notary Public
Date Executed by Notary:
XXXXX X. XxXXXX
Notary Public, Dekalb County, Georgia 3/6/96
---------------------------------------------
My Commission Expires August 4th, 1996
[NOTARIAL SEAL]
-83-
Address for Notices: SUNTRUST BANK, ATLANTA,
-------------------
As Agent and Administrative
Agent
00 Xxxx Xxxxx, X.X.
00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000 By:/s/ Xxxxx X. Xxxxxx
Attention: Xxxxxxx X. Xxxxxx -------------------------
Xxxxx X. Xxxxxx
Vice President
Telecopy No.: 404/827-6270
By:/s/ Xxxxxxx X. Xxxxxx
-------------------------
Xxxxxxx X. Xxxxxx
Corporate Banking Officer
Payment Office:
--------------
00 Xxxx Xxxxx, X.X.
00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
-84-
Address for Notices: SUNTRUST BANK, ATLANTA
-------------------
00 Xxxx Xxxxx, X.X.
00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000 By:/s/ Xxxxx X. Xxxxxx
Attention: Xxxxxxx X. Xxxxxx -----------------------
Xxxxx X. Xxxxxx
Vice President
Telecopy No.: 404/827-6270
By:/s/ Xxxxxxx X. Xxxxxx
-----------------------
Xxxxxxx X. Xxxxxx
Banking Officer
-85-
Address for Notices:
-------------------
AMSOUTH BANK OF ALABAMA
00 Xxxxx Xxxxx Xxxxxx
Commercial Lending Department
Second Floor By:/s/ X. Xxxxxxx Xxxx
Xxxxxx, Xxxxxxx 00000 -------------------------
X. Xxxxxxx Xxxx
Vice President
Attention: X. Xxxxxxx Xxxx
Telecopy: (000) 000-0000
-86-
Address for Notices:
-------------------
WACHOVIA BANK OF GEORGIA, N.A.
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
By:/s/ Xxxx Xxxxxx
--------------------------------
Xxxx Xxxxxx
Corporate Banking Officer
Attention: Xxxx Xxxxxx
Telecopy: (000) 000-0000
-87-
Address for Notices:
-------------------
FIRST AMERICAN NATIONAL BANK
First American Center
0xx xxx Xxxxx
Xxxxxxxxx, XX 00000-0000 By:/s/ Xxxxxxx X. Xxxxxx
------------------------------
Xxxxxxx X. Xxxxxx
Vice President
Attention: Xxxxxxx X. Xxxxxx
Telecopy: (000) 000-0000
-88-
Address for Notices:
-------------------
XXXXXXX BANK OF JACKSONVILLE, N.A.
00 Xxxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
By: [signature appears here]
-------------------------------
Vice President
Attention: Xxxxxxxx Xxxxxxx
Telecopy: (000) 000-0000
-89-
