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EXHIBIT 10.6
CREDIT AGREEMENT
BY AND AMONG
ROMACORP OPERATING COMPANY, INC.
ROMACORP, INC.,
ROMA SYSTEMS, INC.,
ROMA FRANCHISE CORPORATION,
ROMA HOLDINGS, INC.,
ROMA DINING LP,
Borrowers,
THE PROVIDENT BANK,
Agent
AND
VARIOUS LENDERS DESCRIBED HEREIN
July 1, 1998
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TABLE OF CONTENTS
Page
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ARTICLE 1 INTERPRETATION............................................................................ 1
Section 1.1 Provisions Pertaining to Definitions............................................. 1
Section 1.2 Definitions...................................................................... 1
ARTICLE 2 THE LOANS................................................................................. 21
Section 2.1 Commitments...................................................................... 21
Section 2.2 Making the Loans................................................................. 21
Section 2.3 Draws, Advances and Settlement of Payments and Advances.......................... 21
Section 2.4 The Revolving Credit Notes....................................................... 22
Section 2.5 Letters of Credit................................................................ 22
Section 2.6 Interest Payable on the Loans.................................................... 24
Section 2.7 Repayments and Prepayments of Principal.......................................... 26
Section 2.8 Payments and Computations........................................................ 27
Section 2.9 Payments to be Free of Deductions................................................ 29
Section 2.10 Use of Proceeds.................................................................. 29
Section 2.11 Libor Breakage Cost.............................................................. 29
Section 2.12 Additional Costs, etc............................................................ 30
Section 2.13 Agent and Lender Statements...................................................... 30
Section 2.14 Allocation of Liability.......................................................... 30
ARTICLE 3 SECURITY AGREEMENT........................................................................ 31
Section 3.1 Security Interest................................................................ 31
Section 3.2 Financing Statements; Additional Documents....................................... 32
Section 3.3 Release of Collateral............................................................ 33
ARTICLE 4 CONDITIONS PRECEDENT TO DISBURSEMENTS..................................................... 33
Section 4.1 Conditions Precedent to Initial Closing.......................................... 33
Section 4.2 Conditions Precedent to Subsequent Loans......................................... 37
ARTICLE 5 GENERAL REPRESENTATIONS AND WARRANTIES.................................................... 37
Section 5.1 Existence, Etc................................................................... 38
Section 5.2 Authority, Etc................................................................... 39
Section 5.3 Binding Effect of Documents, Etc................................................. 39
Section 5.4 No Events of Default, Etc........................................................ 40
Section 5.5 Financial Statements............................................................. 40
Section 5.6 Changes; None Adverse............................................................ 40
Section 5.7 Title to Assets; Material Leases................................................. 40
Section 5.8 Intellectual Property............................................................ 40
Section 5.9 Indebtedness for Borrowed Money.................................................. 41
Section 5.10 Litigation....................................................................... 41
Section 5.11 No Materially Adverse Contracts.................................................. 41
Section 5.12 Taxes and Tax Returns, Etc....................................................... 41
Section 5.13 Contracts with Affiliates, Etc................................................... 42
Section 5.14 Employee Benefit Plans........................................................... 42
Section 5.15 Governmental Regulation.......................................................... 42
Section 5.16 Securities Activities............................................................ 43
Section 5.17 Disclosure....................................................................... 43
Section 5.18 No Material Default.............................................................. 43
Section 5.19 Environmental Conditions......................................................... 43
Section 5.20 Licenses and Permits............................................................. 44
Section 5.21 Special Flood Hazard Determination............................................... 44
Section 5.22 General Collateral Representation................................................ 44
Section 5.23 Year 2000 Compatibility.......................................................... 45
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ARTICLE 6 AFFIRMATIVE COVENANTS OF BORROWER......................................................... 45
Section 6.1 Reports and Other Information.................................................... 46
Section 6.2 Maintenance of Property; Authorization; Insurance................................ 49
Section 6.3 Key Man Life Insurance........................................................... 50
Section 6.4 Entity Existence................................................................. 50
Section 6.5 Inspection Rights................................................................ 50
Section 6.6 Payment of Taxes and Claims...................................................... 50
Section 6.7 Compliance with Laws............................................................. 51
Section 6.8 Notice of Other Events........................................................... 51
Section 6.9 Communication with Accountants................................................... 51
Section 6.10 Payment of Indebtedness.......................................................... 51
Section 6.11 Payment of Fees.................................................................. 52
Section 6.12 Performance of Obligations Under Certain Documents............................... 52
Section 6.13 Governmental Consents and Approvals.............................................. 52
Section 6.14 Employee Benefit Plans and Guaranteed Pension Plans.............................. 53
Section 6.15 Further Assurances............................................................... 53
Section 6.16 Bank Services.................................................................... 53
Section 6.17 Use of Proceeds.................................................................. 53
ARTICLE 7 FINANCIAL COVENANTS
......................................................................................... 54
Section 7.1 EBITDA........................................................................... 54
Section 7.2 Interest Coverage Ratio.......................................................... 54
ARTICLE 8 NEGATIVE COVENANTS OF BORROWER............................................................ 54
Section 8.1 Limitation on Nature of Business................................................. 54
Section 8.2 Limitation on Fundamental Changes................................................ 54
Section 8.3 Restricted Payments.............................................................. 54
Section 8.4 Limitation on Disposition of Assets.............................................. 55
Section 8.5 Limitation on Investments........................................................ 56
Section 8.6 Acquisition of Margin Securities................................................. 56
Section 8.7 Limitation on Mortgages, Liens and Encumbrances.................................. 56
Section 8.8 No Additional Negative Pledges................................................... 57
Section 8.9 No Restrictions on Subsidiary Distributions to Borrowers......................... 57
Section 8.10 Limitation on Indebtedness....................................................... 57
Section 8.11 Transactions with Affiliates..................................................... 58
Section 8.12 Changes Relating to Senior Debt.................................................. 58
Section 8.13 No Additional Bank Accounts...................................................... 58
ARTICLE 9 EVENTS OF DEFAULT AND REMEDIES............................................................ 58
Section 9.1 Events of Default................................................................ 58
Section 9.2 Termination of Commitments and Acceleration of Obligations....................... 60
Section 9.3 Remedies......................................................................... 61
Section 9.4 No Implied Waiver; Rights Cumulative............................................. 62
Section 9.5 Set-Off; Pro Rata Sharing........................................................ 63
ARTICLE 10 CONCERNING THE AGENT AND THE LENDERS...................................................... 63
Section 10.1 Appointment of the Agent......................................................... 63
Section 10.2 Authority........................................................................ 63
Section 10.3 Acceptance of Appointment........................................................ 64
Section 10.4 Collateral Matters............................................................... 64
Section 10.5 Agency for Perfection............................................................ 65
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Section 10.6 Application of Moneys............................................................ 65
Section 10.7 Reliance by the Agent............................................................ 66
Section 10.8 Exculpatory Provisions........................................................... 66
Section 10.9 Action by the Agent.............................................................. 66
Section 10.10 Amendments, Waivers and Consents................................................. 67
Section 10.11 Indemnification.................................................................. 67
Section 10.12 Reimbursement of the Agent....................................................... 68
Section 10.13 Sharing of Funds Received........................................................ 68
Section 10.14 Dealing with Lenders............................................................. 68
Section 10.15 Agent as Lender.................................................................. 68
Section 10.16 Duties Not to be Increased....................................................... 68
Section 10.17 Lender Credit Decisions.......................................................... 69
Section 10.18 Resignation of Agent............................................................. 69
Section 10.19 Assignment of Revolving Credit Notes; Participation.............................. 69
ARTICLE 11 PROVISIONS OF GENERAL APPLICATION......................................................... 70
Section 11.1 Term of Agreement................................................................ 70
Section 11.2 Notices.......................................................................... 70
Section 11.3 Survival of Representations...................................................... 71
Section 11.4 Power of Attorney................................................................ 72
Section 11.5 Amendments....................................................................... 72
Section 11.6 Costs, Expenses, Taxes and Indemnification....................................... 72
Section 11.7 Language......................................................................... 73
Section 11.8 Binding Effect; Assignment....................................................... 73
Section 11.9 Governing Law; Jurisdiction and Venue............................................ 73
Section 11.10 Waiver of Jury Trial............................................................. 74
Section 11.11 Waivers.......................................................................... 74
Section 11.12 Interpretation and Proof of Loan Documents....................................... 74
Section 11.13 Integration of Schedules and Exhibits............................................ 74
Section 11.14 Headings......................................................................... 74
Section 11.15 Counterparts..................................................................... 74
Section 11.16 Severability..................................................................... 75
Section 11.17 One General Obligation........................................................... 75
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INDEX OF DEFINITIONS
Definition Page #
Account Debtor ............................................................................................. 2
Accountants ................................................................................................ 2
Accounts ................................................................................................... 2
Affiliate .................................................................................................. 2
Agent ...................................................................................................... 2
Agent Deposit Account....................................................................................... 2, 22
Agent Disbursement Account.................................................................................. 2, 21
Assignment of Patents....................................................................................... 2
Assignment of Trademarks.................................................................................... 2
Blocked Account Agreement................................................................................... 3
Business Day ............................................................................................... 3
Capital Expenditure......................................................................................... 3
Capital Lease .............................................................................................. 3
Capital Lease Obligation.................................................................................... 3
Capital Stock .............................................................................................. 3
Cash Equivalents ........................................................................................... 3
Cash Flow .................................................................................................. 4
Cash Flow Available for Debt Service........................................................................ 4
Cash Interest Expense....................................................................................... 4
Casualty Loss .............................................................................................. 4
CFADS ...................................................................................................... 4
Change in Control .......................................................................................... 4
Chattel Paper .............................................................................................. 4
Closing Date ............................................................................................... 4
Code ....................................................................................................... 4
Collateral ................................................................................................. 5
Commitment Fee ............................................................................................. 5
Common Stock ............................................................................................... 5
Compliance Certificate...................................................................................... 5
Computation Date ........................................................................................... 5
Consolidated ............................................................................................... 5
Contingent Obligation....................................................................................... 5
Credit Commitment .......................................................................................... 6
Current Assets ............................................................................................. 6
Current Balance Sheet....................................................................................... 40
Current Financial Statements................................................................................ 40
Current Liabilities......................................................................................... 6
Current Ratio .............................................................................................. 6
Default .................................................................................................... 6
Default Interest Rate....................................................................................... 6
Documents .................................................................................................. 6
Draw Date .................................................................................................. 6
EBITDA ..................................................................................................... 6
Employee Benefit Plan....................................................................................... 7
Environmental Laws.......................................................................................... 7
EPA Permits ................................................................................................ 43
Equipment .................................................................................................. 7
Equity Interests ........................................................................................... 7
Equity Offering ............................................................................................ 7
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ERISA ...................................................................................................... 7
ERISA Affiliate ............................................................................................ 7
ERISA Liabilities .......................................................................................... 7
Event of Default ........................................................................................... 8
Excess Cash Flow ........................................................................................... 8
Extraordinary Disposition................................................................................... 8
Fair Market Value .......................................................................................... 8
Fee Mortgages .............................................................................................. 8
FEMA ....................................................................................................... 8
Fixed Charges .............................................................................................. 8
GAAP ....................................................................................................... 9
General Intangibles......................................................................................... 9
Generally Accepted Accounting Principles.................................................................... 9
Goods ...................................................................................................... 9
Guaranteed Pension Plan..................................................................................... 9
Hazardous Substances........................................................................................ 9
Head Office ................................................................................................ 9
Holdings ................................................................................................... 18
Indebtedness ............................................................................................... 9
Indebtedness for Borrowed Money............................................................................. 10
Instruments ................................................................................................ 11
Intellectual Property....................................................................................... 11
Interest Expense ........................................................................................... 11
Interest Period ............................................................................................ 11
Interest Rate .............................................................................................. 12
Inventory .................................................................................................. 12
Investment ................................................................................................. 12
Legal Requirements.......................................................................................... 12
Lenders .................................................................................................... 12
Liabilities ................................................................................................ 13
Libor ...................................................................................................... 13
Libor Break Funding Costs................................................................................... 13
Libor Break Funding Event................................................................................... 13
Libor Rate ................................................................................................. 13
Libor Rate Loan ............................................................................................ 13
Licenses and Permits........................................................................................ 13
Lien ....................................................................................................... 14
Litigation ................................................................................................. 14, 41
Loan Documents ............................................................................................. 14
Loan Year .................................................................................................. 14
Loans ...................................................................................................... 14
Long-Term Lease ............................................................................................ 14
Management Shareholders..................................................................................... 14
Margin Ratio ............................................................................................... 14
Material Adverse Effect..................................................................................... 14
Material Lease ............................................................................................. 14
Maximum Credit Liability.................................................................................... 14
Maximum Revolving Commitment................................................................................ 15, 23
Mortgages .................................................................................................. 15
Multiemployer Plan.......................................................................................... 15
Net Income ................................................................................................. 15
Net Proceeds ............................................................................................... 15
Net Worth .................................................................................................. 15
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Notice of Acceleration...................................................................................... 60
Obligations ................................................................................................ 16
Participation Percentage.................................................................................... 16
Patents .................................................................................................... 16
Permitted Liens ............................................................................................ 16, 56
Person ..................................................................................................... 16
Pledge Agreement ........................................................................................... 16
Pledged Stock .............................................................................................. 16
Preferred Stock ............................................................................................ 16
Premises ................................................................................................... 16
Prime Rate ................................................................................................. 16
Prime Rate Loan ............................................................................................ 17
Pro Rata Share ............................................................................................. 17
Proceeds ................................................................................................... 17
Projections ................................................................................................ 17
Property ................................................................................................... 17
Rate Option ................................................................................................ 17
Real Estate ................................................................................................ 17
Reference Period ........................................................................................... 17
Requisite Lenders .......................................................................................... 18
Restricted Payment.......................................................................................... 18
Revolving Credit Loan....................................................................................... 18
Revolving Credit Notes...................................................................................... 18
SEC ........................................................................................................ 18
Securities ................................................................................................. 18
Security Documents.......................................................................................... 19
Standard Flood Hazard Determination Form.................................................................... 19
Subsidiary ................................................................................................. 19
Subsidiary Net Worth........................................................................................ 19
Termination Date ........................................................................................... 19
Termination Event .......................................................................................... 20
Trademarks ................................................................................................. 20
UCC ........................................................................................................ 20
UCC Financing Statements.................................................................................... 20
Valuable Transfers.......................................................................................... 20
Working Capital ............................................................................................ 21
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SCHEDULES
1 Lenders
3.1 Exceptions to Mortgaged Property
5.1(a) Jurisdictions where qualified to do business
5.1(b) Capital Stock
5.1(d) Non-Subsidiary Capital Stock Ownership
5.7 Material Leases of Property
5.8 Intellectual Property
5.12(c) Pending or Threatened Audits
5.13 Affiliate Agreements
5.21 Exceptions to Flood Hazard Determination
5.22 UCC Filing Offices
5.24 Franchise Agreements
8.7(f) Permitted Liens
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT dated as of July 1, 1998 ("Credit Agreement") is
by and among ROMACORP OPERATING COMPANY, INC., a Delaware corporation,
("Romacorp"), ROMACORP, INC., a Delaware corporation, ROMA SYSTEMS, INC., a
Delaware corporation, ROMA FRANCHISE CORPORATION, a Delaware corporation, ROMA
HOLDINGS, INC., a Delaware corporation, and ROMA DINING LP, a Delaware limited
partnership (hereinafter, together with their successors in title and assigns
called "Borrowers" and each of which is a "Borrower"), the banks and lending
institutions set forth on Schedule 1 (the "Lenders") and THE PROVIDENT BANK, an
Ohio banking corporation, ("Provident") executing this Agreement in its capacity
of Agent for the Lenders under this Agreement (hereinafter called "Provident" or
"Agent").
WHEREAS, the Borrowers have requested that Lender establish a line of
credit for Borrowers for, among other things, purposes of the Recapitalization
and for financing working capital and for general corporate purposes; and
WHEREAS, pursuant to the Recapitalization, Romacorp will change its
name to Romacorp, Inc. and Holdings will change its name to Roma Restaurant
Holdings, Inc.
NOW, THEREFORE, it is agreed as follows:
ARTICLE 1
INTERPRETATION
Section 1.1 Provisions Pertaining to Definitions. For all purposes of
this Credit Agreement (except where such interpretations would be inconsistent
with the context or the subject matter):
(a) The expression "this Agreement" shall mean this Credit
Agreement (including all of the Schedules and Exhibits annexed hereto) as
originally executed, or, if supplemented, amended or restated from time to time,
as so supplemented, amended or restated;
(b) Where appropriate, words importing the singular only shall
include the plural and vice versa, and all references to dollars shall be United
States Dollars; and
(c) Accounting terms not otherwise defined herein shall have
the meanings customarily given in accordance with Generally Accepted Accounting
Principles (as hereinafter defined) and all financial computations or
determinations to be made under this Credit Agreement shall, unless otherwise
specifically provided herein, be made in accordance with the financial
statements delivered pursuant to Section 4.1(w) and shall be made on a
Consolidated basis.
Section 1.2 Definitions. In addition to terms defined elsewhere in this
Agreement, the following terms shall have the following meanings in this
Agreement:
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"Accountants" mean Ernst & Young LLP, or such other nationally
recognized firm of certified public accountants selected by Holdings and
acceptable to Agent and Lenders.
"Account Debtor" means any Person obligated for the payment of an
Account.
"Accounts" mean, with respect to any Person, such Person's accounts,
rental agreements and other contract rights, rights to payment and other forms
of obligation for the payment of money, whether now existing or existing in the
future, including, without limitation, all (i) accounts receivable (whether or
not specifically listed on schedules furnished to the Agent), all accounts
created by or arising from all of such Person's sales of goods, financial
instruments, documents, permits or other items, or rendition of services,
including funds transfer services, made under any of such Person's trade names
or styles, or through any of such Person's subsidiaries or divisions, and all
accounts acquired by assignment in the ordinary course of business; (ii) unpaid
seller's rights (including rescission, replevin, reclamation and stopping in
transit) relating to the foregoing or arising therefrom; (iii) rights to any
goods represented by any of the foregoing, including returned or repossessed
goods; (iv) reserves and credit balances held by such Person with respect to any
such accounts receivable or account debtors; (v) guarantees or collateral for
any of the foregoing; and (vi) insurance policies or rights relating to any of
the foregoing.
"Affiliate" means, in relation to any Person (in this definition called
"Affiliated Person"), any Person (i) which (directly or indirectly) controls or
is controlled by or is under common control with such Affiliated Person; (ii)
which (directly or indirectly) owns or holds five percent (5%) or more of any
equity interest in any Borrower; or (iii) five percent (5%) or more of whose
voting stock or other equity interest is directly or indirectly owned or held by
such Borrower. For the purposes of this definition, the term "control"
(including, with correlative meanings, the terms "controlled by" and "under
common control with"), as used with respect to any Person, shall mean the
possession (directly or indirectly) of the power to direct or to cause the
direction of the management or the policies of such Person, whether through the
ownership of shares of any class in the capital or any other voting securities
of such Person or by contract or otherwise.
"Agent" means Provident acting in the capacity as Agent for the Lenders
under the Loan" Documents and includes (where the context so admits) any other
Person or Persons succeeding to the functions of Agent under such documents.
"Agent Deposit Account" has the meaning set forth in Section 2.3(d)
hereof.
"Agent Disbursement Account" has the meaning set forth in Section
2.3(b) hereof.
"Assignment of Franchise Rights and Agreements" means the Assignment of
Franchise Rights and Agreements from a Borrower to Agent in the form of Exhibit
K hereto.
"Assignment of Patents" means the Grant of Security Interest in Patents
from a Borrower to Agent in the form of Exhibit A hereto.
"Assignment of Trademarks" means the Grant of Security Interest in
Trademarks from a Borrower to Agent in the form of Exhibit B hereto.
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"Blocked Account Agreement" shall mean the Blocked Account Agreement
between a Borrower and Agent in the form of Exhibit C hereto, acknowledged by
each financial institution with which any Borrower maintains deposits, pursuant
to which such financial institutions shall agree not to permit funds in such
bank accounts to be disbursed except to the Agent Disbursement Account, or any
other account maintained at or controlled by the Agent.
"Business Day" means any day other than a Saturday or Sunday on which
commercial banking institutions are open for business in Cincinnati, Ohio and
Dallas, Texas.
"Capital Expenditure" means any amount paid or incurred in connection
with the purchase of real estate, plant, machinery, equipment or other similar
expenditure (including all renewals, improvements and replacements thereto, and
all obligations under any lease of any of the foregoing) which would be required
to be capitalized and shown on the Consolidated balance sheet of Borrower in
accordance with GAAP.
"Capital Lease" means any lease of Property which has been or is
required to be capitalized on a Borrower's financial statements in accordance
with GAAP.
"Capital Lease Obligation" means any obligation to pay rent or other
amounts under a Capital Lease and, for the purpose of this Agreement, the amount
of such obligation at any date shall be the capitalized amount thereof at such
date, determined in accordance with GAAP.
"Capital Stock" means any and all shares, interests, participations,
rights or other equivalents (however designated) or corporate stock, whether
common or preferred, including, without limitation, partnership interests.
"Cash Equivalents" mean: (i) marketable direct obligations issued or
unconditionally guaranteed by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within three (3) months from the date of acquisition thereof;
(ii) investments in certificates of deposit or bankers' acceptances maturing
within three (3) months from the date of acquisition issued by any Lender or any
commercial bank organized under the laws of the United States or any state
thereof having capital surplus and undivided profits aggregating at least Two
Hundred Fifty Million Dollars ($250,000,000); (iii) investments in commercial
paper of any Lender or of any other Person which, at the time of issuance, have
a rating of at least A-1 from Standard & Poor's Corporation or at least P-1 from
Xxxxx'x Investors Service, Inc. and maturing not more than six (6) months from
the date of acquisition thereof; (iv) obligations of the type described in (i),
(ii) or (iii) above purchased pursuant to a repurchase agreement obligating the
counterparty to repurchase such obligations not later than thirty (30) days
after the purchase thereof, secured by a fully perfected security interest in
any such obligation, and having a market value at the time such repurchase
agreement is entered into of not less than 100% of the repurchase obligation of
the issuing bank; and (v) time deposits or Eurodollar time deposits maturing no
more than thirty (30) days from the date of creation with commercial banks
having membership in the Federal Deposit Insurance Corporation in amounts not
exceeding the lesser of One Hundred Thousand Dollars ($100,000) or the maximum
insurance applicable to the aggregate amount of such Person's deposits in such
institution.
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"Cash Flow" means, for any period, the following, each calculated for
such period, without duplication: (i) EBITDA, less (ii) income and franchise
taxes actually paid by a Borrower (net of any refunds received) (including
decreases in deferred income taxes resulting from tax payments actually made),
less (iv) Capital Expenditures (to the extent actually made in cash by a
Borrower and excluding the non-current portion of Capital Expenditures which
have been financed).
"Cash Flow Available for Debt Service" or "CFADS" means for any period,
the sum of Net Income from continuing operations, but without deduction of
income and franchise taxes, plus an amount equal to any non-cash expense items
and any extraordinary expense items minus an amount equal to any extraordinary
income items and any cash expended for Capital Expenditures, all of which shall
be determined and reported in accordance with GAAP.
"Cash Interest Expense" means the aggregate amount of all interest
expense of the Borrower on Indebtedness for Borrowed Money (net of interest
income) paid but not accrued.
"Casualty Loss" means any occurrence or event pursuant to which any
asset or property owned or used by Borrower is (i) damaged or destroyed, or
suffers any other loss, or (ii) condemned, confiscated or otherwise taken, in
whole or in part, or the use thereof is otherwise diminished so as to render
impracticable or unreasonable the use of such asset or property for the purposes
to which such asset or property were used immediately prior to such
condemnation, confiscation or taking, by exercise of the powers of condemnation
or eminent domain or otherwise.
"Change of Control" means the time at which (i) any Person (including a
Person's Affiliates and associates) or group (as that term is understood under
Section 13(d) of the Exchange Act and the rules and regulations thereunder),
other than Sentinel, Holdings and NPC Restaurant Holdings, Inc. and their
Affiliates (the "Control Group") or a group controlled by the Control Group, has
become the beneficial owner of a percentage (based on voting power, in the event
different classes of stock shall have different voting powers) of the voting
stock of Romacorp equal to at least fifty percent (50%), (ii) there shall be
consummated any consolidation or merger of a Borrower pursuant to which any
Borrower's Capital Stock would be converted into cash, securities or other
property, other than a merger or consolidation of such Borrower in which the
holders of such Capital Stock immediately prior to the merger have the same
proportionate ownership, directly or indirectly, of Capital Stock of the
surviving corporation immediately after the merger as they had of such
Borrower's Capital Stock immediately prior to such merger, or (iii) all or
substantially all of a Borrower's assets shall be sold, leased, conveyed or
otherwise disposed of as an entirety or substantially as an entirety to any
Person (including an Affiliate or associate of such Borrower) in one or a series
of transactions.
"Chattel Paper" means any "chattel paper" as such term is defined in
Section 9-105(1)(b) of the UCC, now owned or hereafter acquired.
"Closing Date" means July 1, 1998.
"Code" means the United States Internal Revenue Code of 1986, as
amended from time to time, or any successor federal tax code, and any reference
to any statutory provision shall be deemed to be a reference to any successor
provision or provisions.
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"Collateral" means all Accounts, Inventory, Equipment, General
Intangibles, fixtures, Goods, motor vehicles, leasehold improvements, Documents,
Instruments, Pledged Interests, Chattel Paper, Intellectual Property, Inventory
subject to leases and rights under lease agreements for the leasing of
inventory, money, deposit accounts, rights to draw on letters of credit,
permits, licenses and the cash or noncash Proceeds (including insurance or other
rights to receive payment with respect thereto) of any of the foregoing and all
accessions and additions to and replacements of the foregoing, and all books and
records (including, without limitation, customer lists, credit files, computer
programs, printouts and other computer materials and records of each Borrower)
pertaining to any of the foregoing or any of the Premises herein, together with
the real property, leasehold interests, buildings and fixtures described in the
Mortgages, and all other property and rights assigned by a Borrower to Agent, on
behalf of the Lenders, to secure Borrower's obligations under the Loan
Documents, all of the above whether now owned or hereafter acquired.
"Collateral Assignment of Transitional Financial and Accounting
Services Agreement" means the Collateral Assignment of Transitional Financial
and Accounting Services Agreement from Romacorp to Agent, and consented and
acknowledged to by NPC, in the form of Exhibit L hereto.
"Commitment Fee" means a fee equal to three eighths of one percent
(0.375%) per annum (computed on the basis of a 360-day year for the actual
number of days elapsed) on the daily unused amount of the Maximum Revolving
Commitment.
"Common Stock" means, with respect to any Person, any and all shares,
interests, participations and other equivalents (however designated, whether
voting or non-voting) of such Person's common stock, whether now outstanding or
issued after the date of this Credit Agreement, and includes, without
limitation, all series and classes of such common stock.
"Compliance Certificate" means a certificate, substantially in the form
of Exhibit D hereto, which certificate evidences the compliance by each Borrower
with the covenants of this Agreement.
"Computation Date" means the last day of the Fiscal Period closest to
the last day of each March, June, September and December.
"Consolidated" means, with respect to any accounting matter or amount,
such matter or amount computed on a consolidated basis for Holdings and each
Borrower, as the case may be, and any subsidiaries in accordance with GAAP.
"Contingent Obligation" means any direct or indirect liability,
contingent or otherwise, with respect to any Indebtedness, lease, dividend,
letter of credit, banker's acceptance or other obligation of another if the
primary purpose or intent thereof in incurring the Contingent Obligation is to
provide assurance to the obligee of such obligation of another that such
obligation of another will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders of such obligation
will be protected (in whole or in part) against loss in respect thereof.
Contingent Obligations shall include, without limitation, (i) the direct or
indirect guaranty, endorsement (otherwise than for collection or deposit in the
ordinary course of business), co-making, discounting with recourse or sale with
recourse by such Person of the obligation of another; (ii) any
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liability for the obligations of another through any agreement (contingent or
otherwise) (A) to purchase, repurchase or otherwise acquire such obligation or
any security therefor, or to provide funds for the payment or discharge of such
obligation (whether in the form of loans, advances, stock purchases, capital
contributions or otherwise), (B) to maintain the solvency of any balance sheet
item, level of income or financial condition of another, or (C) to make
take-or-pay, pay-or-play or similar payments if required regardless of
nonperformance by any other party or parties to an agreement, if in the case of
any agreement described under subclauses (A), (B) or (C) of this sentence the
primary purpose or intent thereof is as described in the preceding sentence. The
amount of any Contingent Obligation shall be equal to the amount of the
obligation so guaranteed or otherwise supported.
"Credit Commitment" means, in relation to any particular Lender, the
maximum amount with respect to the Loans to be loaned by such Lender to
Borrowers as set forth on Schedule 1.
"Current Assets" and "Current Liabilities" mean at any time, all assets
or liabilities, respectively, that, in accordance with GAAP should be classified
as current assets or current liabilities, respectively, on a Borrower's balance
sheet.
"Current Ratio" means the ratio of Current Assets (excluding cash, Cash
Equivalents, and any amounts due from Affiliates) to Current Liabilities
(excluding from Current Liabilities for the purpose of this definition of
Current Ratio, the current portion of any long term Indebtedness for Borrowed
Money and any amounts due to Affiliates).
"Default" means any event or occurrence which, with the giving of
notice or the passage of time, or both, would constitute an Event of Default.
"Default Interest Rate" means an annual rate of interest which shall
(to the extent permitted by applicable law) at all times be equal to two percent
(2.0%) above the applicable Interest Rate for a Loan.
"Documents" mean any "documents," as such term is defined in Section
9-105(l)(f) of the UCC, now owned or existing or hereafter arising or acquired.
"Draw Date" means in relation to any Loan, the day on which such Loan
is made or to be made to Borrowers pursuant to this Agreement.
"EBITDA" for any period shall mean, without duplication, (i) Net
Income; plus (ii) for such period any Interest Expense deducted in the
determination of Net Income; plus (iii) any income, ad valorem, and franchise
taxes paid in cash and included in the determination of Net Income; plus (iv)
amortization and depreciation and other non-cash charges deducted in determining
Net Income for such period; plus (v) extraordinary losses, losses on sales of
assets (other than sales of inventory in the ordinary course of business) and
unrealized gains from changes in currency; plus (vi) for any fiscal year of
Borrowers commencing on or after 2000, pre-opening expenses deducted in
determining Net Income for such period relating to the opening of restaurants
not to exceed $3,000,000 in any one fiscal year; minus (vii) the sum for such
period of interest income,
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15
extraordinary gains, gains from sales of assets (other than sales of inventory
in the ordinary course of business) and unrealized losses from changes in
currency.
"Employee Benefit Plan" means an "employee benefit plan" as defined in
Section 3(3) of ERISA.
"Employment Agreement" means the Management Agreement, dated as of July
1, 1998 between Romacorp and Xxxxxx X. Page.
"Environmental Laws" mean individually or collectively any local, state
or federal law, statute, rule, regulation, order, ordinance, common law, permit
or license term or condition, or state superlien or environmental clean-up or
disclosure statutes pertaining to the environment or to environmental
contamination, regulation, management, control, treatment, storage, disposal,
containment, removal, clean-up, reporting, or disclosure, including, but not
limited to, the Comprehensive Environmental Response, Compensation and Liability
Act of 1980 ("CERCLA"), as now or hereafter amended (including, but not limited
to, the Superfund Amendments and Reauthorization Act ("XXXX")); the Resource
Conservation and Recovery Act ("RCRA"), as now or hereafter amended (including,
but not limited to, the Hazardous and Solid Waste Amendments of 1984); the Toxic
Substances Control Act ("TSCA"), as now or hereafter amended; the Clean Water
Act, as now or hereafter amended; the Safe Drinking Water Act, as now or
hereafter amended; or the Clean Air Act, as now or hereafter amended.
"Equipment" means any "equipment," as such term is defined in Section
9-109(2) of the UCC, now owned or hereafter acquired and shall include, without
limitation, any and all additions, substitutions, and replacements of any of the
foregoing, wherever located, together with all attachments, components, parts
and accessories installed thereon or affixed thereto.
"Equity Interests" mean Capital Stock and all warrants, options or
other rights to acquire Capital Stock or that are measured by the value of
Capital Stock (but excluding any debt security that is convertible into, or
exchangeable for Capital Stock).
"Equity Transaction" means the cash equity investment by shareholders
of Holdings in the aggregate amount of not less than Twenty Seven Million
Dollars ($27,000,000).
"ERISA" means the Employee Retirement Income Security Act of 1974 and
regulations issued thereunder, as amended from time to time and any successor
statute.
"ERISA Affiliate" means, in relation to any Borrower, any Borrower or
Subsidiary of a Borrower (whether or not incorporated) which is a member of a
group of which that Borrower is a member and which is under common control
within the meaning of the regulations promulgated under Section 414 of the
Internal Revenue Code of 1986, as amended.
"ERISA Liabilities" mean the aggregate of all unfunded vested benefits
under any employee pension benefit plan, within the meaning of Section 3(2) of
ERISA, of a Borrower or any ERISA Affiliate of such Borrower under any Plan
covered by ERISA that is not a Multiemployer Plan and all potential withdrawal
liabilities of any thereof under all Multiemployer Plans.
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16
"Event of Default" means any event or condition described in Section
9.1 of this Agreement.
"Excess Cash Flow" means, for any period, the total of the following
for Romacorp on a Consolidated basis, each calculated (without duplication) for
such period: (i) Cash Flow; minus (ii) scheduled amortization of principal and
interest and all voluntary prepayments of long term Indebtedness for Borrowed
Money actually paid (it being understood that no voluntary prepayment of the
Revolving Credit Loan shall be included in this clause (ii)); minus (iii) cash
dividends and distributions paid on Borrower's Capital Stock to the extent
permitted under this agreement; minus (iv) increases in Working Capital; and
plus (v) decreases in Working Capital.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
"Extraordinary Disposition" means, with respect to a Borrower, the
sale, lease, transfer or other disposition of assets, other than (i)
sale-leaseback transactions in the aggregate amount not to exceed $5,000,000,
and (ii) assets transferred or disposed in the ordinary course of business,
whether by way of the sale of assets or the sale of stock or other rights in
which a Borrower has any ownership interest, and whether in one transaction or a
series of related or unrelated transactions, including, without limitation, the
licensing of Intellectual Property.
"Fair Market Value" means, with respect to any asset or property, the
price which could be negotiated in an arm's-length, free-market transaction, for
cash, between a willing seller and a willing and able buyer, neither of whom is
under undue pressure or compulsion to complete the transaction. Fair market
value shall be determined by the Board of Directors of a Borrower acting
reasonably and in good faith and shall be evidenced by a board resolution
(certified by the secretary or assistant secretary of a Borrower) delivered to
the Agent.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day for such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"Fee Mortgages" means the real estate mortgages or deeds of trust
granted from time to time by a Borrower to Agent to secure the Loans,
substantially in the form of Exhibit E hereto, and as they may be amended or
supplemented from time to time.
"FEMA" means the Federal Emergency Management Agency, or any similar
successor agency of the federal government.
"Fiscal Period" means, for each Borrower, a fiscal period of either
four or five weeks, in accordance with customary and historical reporting
practices of such Borrower.
"Fixed Charges" mean, for any period, the following, each calculated
for such period, without duplication: (i) Interest Expense paid or accrued,
minus (ii) interest income earned or
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17
accrued by a Borrower as determined in accordance with GAAP, plus (iii)
scheduled payments of principal with respect to all Indebtedness for Borrowed
Money of a Borrower including the principal component of any cash payments made
on any Capital Lease.
"General Intangibles" means any "general intangibles" as such term is
defined in Section 9-106 of the UCC, now owned or hereafter acquired and, in
any event, shall include, without limitation, all right, title and interest now
in existence or hereafter arising in or to all customer lists, trademarks,
patents, rights in intellectual property, trade names, copyrights, trade
secrets, proprietary or confidential information, inventions and technical
information, procedures, designs, knowledge, know-how, software, data bases,
data, processes, models, drawings, materials, and records now owned or hereafter
acquired, and any and all goodwill and rights of indemnification.
"Generally Accepted Accounting Principles" or "GAAP" mean generally
accepted accounting principles in the United States of America in effect from
time to time, consistently applied.
"Goods" mean any item which qualifies as "goods" as such term is
defined in Section 9-105(h) of the UCC, now owned or hereafter acquired.
"Guaranteed Pension Plan" means any pension plan maintained by a
Borrower or an ERISA Affiliate of a Borrower, or to which a Borrower or an ERISA
Affiliate contributes, some or all of the benefits under which are guaranteed by
the United States Pension Benefit Guaranty Corporation ("PBGC").
"Hazardous Substances" mean any and all hazardous and toxic substances,
wastes or materials, any pollutants, contaminants, or dangerous materials
(including, but not limited to, polychlorinated biphenyls, friable asbestos,
volatile and semi-volatile organic compounds, oils, petroleum products and
fractions, and any materials which include hazardous constituents or become
hazardous, toxic, or dangerous when their composition or state is changed), or
any other similar substances or materials which are included under or regulated
by any Environmental Law.
"Head Office" means, in relation to the Agent, the head office of The
Provident Bank located at Xxx Xxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxx 00000 or such
office designated in writing to Borrowers and Lenders by The Provident Bank or
any successor Agent.
"Holdings" means Romacorp, Inc., a Delaware corporation.
"Indebtedness" means, in relation to any Person, at any particular
time, all of the obligations of such Person which, in accordance with GAAP,
would be classified as indebtedness upon a balance sheet including any footnote
thereto of such Person prepared at such time, and in any event shall include,
without limitation, and without duplication:
(i) all indebtedness of such Person arising or
incurred under or in respect of (A) any guaranties (whether direct or
indirect) by such Person of the indebtedness, obligations or
liabilities of any other Person, or (B) any endorsement by such Person
of any of the indebtedness, obligations or liabilities of any other
Person (otherwise than as an
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18
endorser of negotiable instruments received in the ordinary course of
business and presented to commercial banks for collection of deposit),
or (C) the discount by such Person, with recourse to such Person, of
any of the indebtedness, obligations or liabilities of any other
Person;
(ii) all indebtedness of such Person arising or
incurred under or in respect of any agreement, contingent or otherwise
made by such Person (A) to purchase any indebtedness of any other
Person or to advance or supply funds to the payment or purchase of any
indebtedness of any other Person, or (B) to purchase, sell or lease (as
lessee or lessor) Property, products, materials or supplies or to
purchase or sell transportation or services, primarily for the purpose
of enabling any other Person to make payment of any indebtedness of
such other Person or to assure the owner of such other Person's
indebtedness against loss, regardless of the delivery or non-delivery
of the Property, products, materials or supplies or the furnishing or
non-furnishing of the transportation or services, or (C) to make any
loan, advance, capital contribution or other investment in any other
Person for the purpose of assuring a minimum equity, asset base,
working capital or other balance sheet condition for or as at any date,
or to provide funds for the payment of any liability, dividend or stock
liquidation payment, or otherwise to supply funds to or in any manner
invest in any other Person;
(iii) all indebtedness, obligations and liabilities
secured by or arising under or in respect of any Lien, upon or in
Property owned by such Person, even though such Person has not assumed
or become liable for the payment of such indebtedness, obligations and
liabilities;
(iv) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to
Property acquired by such Person, even though the rights and remedies
of the seller or lender (or lessor) under such agreement in the event
of default are limited to repossession or sale of such Property; and
(v) all indebtedness arising or incurred under or in
respect of any Contingent Obligation.
"Indebtedness for Borrowed Money" means at any particular time, all
Indebtedness (i) in respect of any money borrowed; (ii) under or in respect of
any Contingent Obligation (whether direct or indirect) of any money borrowed;
(iii) evidenced by any loan or credit agreement, promissory note, debenture,
bond, guaranty or other similar written obligation to pay money; or (iv) Capital
Lease Obligations.
"Initial Public Offering" shall mean (i) the time at which Romacorp or
Holdings becomes a registered public company under the Exchange Act subject to
the reporting requirements of Section 13 or 15(d) of the Exchange Act, or (ii)
the first time at which an offering, whether primary or secondary, of Capital
Stock or options, warrants or other securities convertible into or exchangeable
or exercisable for Capital Stock, is registered pursuant to an effective
registration statement (other than a registration statement on Form S-4 or Form
S-8 or any successor forms thereto) filed by Romacorp Holdings under the
Securities Act of 1933, as amended, or (iii) the
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19
merger of Romacorp Holdings into a corporation or other entity which at the time
of such merger is required to file reports, proxy statements and other
information with the Securities and Exchange Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act. An Initial Public Offering will
be deemed to be consummated (i) on the date such registration is declared
effective by the Securities and Exchange Commission and (ii) in the case of a
merger, upon the effectiveness of the merger.
"Instruments" mean any "instrument," as such term is defined in Section
9-105(1)(i) of the UCC, now owned or hereafter acquired.
"Intellectual Property" shall mean all Patents and Trademarks, together
with (a) all inventions, processes, production methods, proprietary information,
know-how and trade secrets; (b) all licenses or user or other agreements granted
to any obligor with respect to any of the foregoing, in each case whether now or
thereafter owned or used including, without limitation, the licenses or other
agreements with respect to the Patents or Trademarks, on Schedule 5.8; (c) all
information, customer lists, identification of suppliers, data, plans,
blueprints, specifications, designs, drawings, recorded knowledge, surveys,
engineering reports, test reports, manuals, materials standards, processing
standards, performance standards, catalogs, computer and automatic machinery
software and programs; (d) all field repair data, sales data and other
information relating to sales or service of products now or hereafter
manufactured; (e) all accounting information and all media on which or in which
any information or knowledge or data or records may be recorded or stored and
all computer programs used for the compilation or printout of such information,
knowledge, records or data, in each case owned by a Borrower; (f) all licenses,
consents, permits, variances, certifications and approvals of governmental
agencies now or hereafter held by Borrowers; and (g) all causes of action,
claims and warranties now or hereafter owned or acquired by Borrowers in respect
of any of the items listed above.
"Interest Expense" means, for any period, the total amount of all
charges for the use of funds (whether characterized as interest, debt service or
otherwise) payable during such period with respect to all Indebtedness for
Borrowed Money of a Borrower for such period, including without limitation, the
nets costs under any interest rate swap, interest rate cap, interest rate collar
or similar arrangement designed to protect a Borrower against the effect of
fluctuations in the Interest Rate excluding any amortization or write-off of
deferred financing costs.
"Interest Period" means:
(a) For each Libor Rate Loan, the period commencing on the
Draw Date and ending one, two or three months thereafter; provided that
(i) any Interest Period which would otherwise end on
a day which is not a Business Day shall be extended to the next
succeeding Business Day unless such Business Day falls in another
calendar month, in which case such Interest Period shall end on the
next preceding Business Day;
(ii) any Interest Period which begins on the last
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the
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20
calendar month at the end of such Interest Period) shall end on the
last Business Day of a calendar month; and
(iii) any Interest Period which begins before the
Termination Date and would otherwise end after the Termination Date
shall end on the Termination Date; and
(b) For a Prime Rate Loan, the period ending on the earlier of
repayment by the Borrower, the date on which such Prime Rate Loan is converted
to a Libor Rate Loan pursuant to Section 2.4(a) hereof, or the Termination Date.
"Interest Rate" means for a Libor Loan or Prime Rate Loan, an annual
rate of interest which shall be determined pursuant to Section 2.6 hereto.
"Inventory" means, with respect to any Person, such Person's inventory,
including without limitation: (i) all raw materials, work in process, parts,
components, assemblies, supplies and materials used or consumed in such Person's
business, wherever located and whether in the possession of such Person or any
other Person; (ii) all goods, wares and merchandise, finished or unfinished,
held for sale or lease or leased or furnished or to be furnished under contracts
of service, wherever located and whether in the possession of such Person or any
other Person; and (iii) all goods returned to or repossessed by such Person.
"Investment" means all investments in any other Person by stock
purchase, capital contribution, loan, advance, guaranty of any Indebtedness or
creation or assumption of any other liability in respect of any Indebtedness of
such other Person (including, without limitation, any liability of any kind
described in clause (i) or (ii) of the definition of the term "Indebtedness" set
forth in this Section 1.2), or the transfer or sale of Property (otherwise than
in the ordinary course of the business) to any other Person for less than
payment in full in cash of the transfer or sale price or the fair value thereof
(whichever of such price or value is higher).
"Issuing Bank" means Provident or such other Lender as shall issue any
Letter of Credit hereunder.
"Legal Requirements" mean all applicable laws, rules, regulations,
ordinances, judgments, orders, decrees, injunctions, arbitral awards, permits,
licenses, authorizations, directions and requirements of all governments,
departments, commissions, boards, courts, authorities, agencies, and officials
and officers thereof, that are now or at any time in the future in effect.
"Lenders" mean collectively each of the banks or lending institutions
set forth on Schedule 1 and their respective successors and assigns; and
"Lender" means any one of the Lenders.
"Letter of Credit Fee" means the fee charged by the Issuing Bank for
the issuance of a Letter of Credit pursuant to Section 2.5(g) hereof.
"Letters of Credit" means the letters of credit issued by the Issuing
Bank at any time pursuant to Section 2.5 hereof.
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21
"Liabilities" mean all indebtedness, obligations and other liabilities
of a Borrower whether matured or unmatured, liquidated or unliquidated, direct
or indirect, absolute or contingent, joint or several, secured or unsecured
arising by contract, operation of law or otherwise, classified as liabilities in
accordance with GAAP on a balance sheet of a Borrower.
"Libor" shall mean the rate (rounded upward to the next highest 1/100
of 1%) obtained by dividing (x) the rate of interest per annum determined by the
Agent equal to the offered rates for deposits in U.S. Dollars of one, two, three
or six-month periods (as the case may be) commencing of the first date of the
applicable Interest Period for which such rate is determined as such rate
appears on the Telerate system as of 11:00 a.m. (London, England time) on the
date which is two (2) Business Days preceding the first day of such Interest
Period, for a period comparable to the duration of such Interest Period and in
an amount comparable to the amount of the Libor Rate Loan to be outstanding
during such Interest Period, by (y) a percentage equal to 100% minus the stated
maximum rate of all reserves required to be maintained against "Libor Rate
liabilities" as specified in Regulation D (or against any other category of
liabilities which includes deposits by reference to which the interest rate on
Libor Rate Loans or loans is determined or any category of extensions of credit
or other assets which includes loans by a non-United States office of a bank to
United States residents) on such date to any member bank of the Federal Reserve
System.
"Libor Break Funding Costs" means an amount sufficient to reimburse
each Lender for any and all loss, cost or expense (including, without
limitation, any loss incurred in obtaining, liquidating or reemploying deposits
from third parties acquired to maintain any Revolving Credit Loan or part
thereof as a Libor Rate Loan) incurred or sustained by each of them as the
consequence of the occurrence of any Libor Break Funding Event. Such
indemnification shall include, without limitation, an amount equal to the
excess, if any, of (i) the amount of interest that otherwise would have accrued
on the principal amount so paid, prepaid or repaid or not borrowed for the
period, beginning with the date of such payment, prepayment or repayment until
the last day of the Interest Period that would otherwise have been in effect for
such Libor Rate Loan, at the applicable rate of interest for such Libor Rate
Loan over (ii) the amount of interest (determined by Agent) that otherwise would
have accrued on such principal amount by reemploying such amount at a rate equal
to Libor for such period or nearest available period for deposits bearing a rate
equal to Libor.
"Libor Break Funding Event" means any of the events or occurrences set
forth in Sections 2.11(a) or 2.11(b).
"Libor Rate" shall mean for each Interest Period, the sum of Libor,
plus two and one quarter percent (2.25%) per annum.
"Libor Rate Loan" means a Loan which bears interest at the Libor Rate.
"Licenses and Permits" mean all licenses, permits, registrations and
recordings thereof and all applications incorporated into for such licenses,
permits and registrations now owned or hereafter acquired by a Borrower and
required from time to time for the business operations of a Borrower.
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22
"Lien" means any lien, mortgage, pledge, security interest, charge or
other encumbrance of any kind including any conditional sale or other title
retention agreement, any lease in the nature thereof, and any agreement to give
any security interest.
"Litigation" has the meaning set forth in Section 5.10 hereof.
"Loan Documents" mean this Agreement, the Revolving Credit Notes, the
Letters of Credit, the Security Documents and any other agreement, instrument,
certificate or document executed in connection with or pursuant to this
Agreement whether concurrently herewith or subsequent hereto.
"Loans" mean the Revolving Credit Loans or the Letters of Credit, where
applicable, each singly a Loan made or to be made to Borrowers by the Lenders
pursuant to this Agreement.
"Loan Year" means each period of twelve (12) consecutive months,
commencing on the Closing Date and on each anniversary thereof.
"Long-Term Lease" means any lease of real or personal property having
an original term, including any period which the lease may be renewed or
extended, at the option of the lessee, of more than three (3) years.
"Margin Ratio" means, as of any date, the ratio of (a) Indebtedness for
Borrowed Money of Borrower and its Subsidiaries as of the date of determination
to (b) Consolidated EBITDA (adjusted on a pro forma basis (including, without
limitation, pro forma adjustments for all non-recurring expenses) satisfactory
to Agent for any acquisitions during the period for which such calculation is
made and not reflected in current EBITDA as if such acquisition had occurred at
the beginning of the period for which such calculation is made, subject to
appropriate closing adjustments for such acquisitions) minus Capital
Expenditures incurred during the four fiscal quarters of Borrower immediately
prior to such date, all calculated for the four fiscal quarters ending on the
Computation Date immediately preceding the date for which such ratio is
calculated.
"Management Shareholders" means those shareholders of Romacorp or
Holdings or any Affiliate of Romacorp or Holdings who are management employees
of a Borrower on the Closing Date.
"Material Adverse Effect" means any event which will, or is reasonably
likely to, have a material adverse effect upon the financial condition,
operations or assets of a Borrower or the Collateral.
"Material Lease" means any lease under which a Borrower shall lease (as
lessee) or acquire the right to possess and/or use any Real Estate or other
Property or any other similar agreement (whether written or oral) pursuant to
which such Borrower pays an annual lease payment or rental payment equal to or
greater than Fifty Thousand Dollars ($50,000).
"Maximum Credit Liability" for any Borrower, other than Romacorp, shall
mean, as of any date of determination thereof, the sum of (i) with respect to
each Loan the proceeds of which are used to make or the issuance of which
constitutes a Valuable Transfer to such Borrower, the amount
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23
of such Loan plus (ii) with respect to each Loan the proceeds of which are not
used to make or the issuance of which does not constitute a Valuable Transfer to
such Borrower, the lesser of (A) the outstanding amount of such Loan as of such
date or (B) the greater of (I) ninety-five percent (95%) of the Subsidiary Net
Worth at the time of such Loan or (II) ninety-five percent (95%) of the
Subsidiary Net Worth of such Borrower at the earliest of (x) such date, (y) the
date of the commencement of a case under Title 11 of the United States Code (or
any successor provision) in which such Borrower is a debtor or (z) the date
enforcement hereunder is sought.
"Maximum Revolving Commitment" means Fifteen Million and 00/100 Dollars
($15,000,000.00).
"Mortgages" means the Fee Mortgages, and each individually a
"Mortgage".
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA which is maintained for employees of a Borrower, or any
ERISA Affiliate of a Borrower.
"Net Income" means, for any period, the aggregate of the net income (or
net loss) of a Borrower for such period, determined in accordance with GAAP, but
excluding, without duplication: (i) the income of any Person in which a Borrower
has an ownership interest, unless received by such Borrower in a cash
distribution; (ii) any after-tax gains or losses attributable to dispositions of
assets; (iii) the income of any Subsidiary of a Borrower to the extent that the
declaration or payment of dividends or similar distributions by that Subsidiary
of that income is not at that time permitted by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary; and (iv) any after-tax
extraordinary non-cash gains or extraordinary non-cash losses.
"Net Proceeds" means the aggregate proceeds paid in cash or Cash
Equivalents received by a Borrower in respect of any Extraordinary Disposition,
net of direct costs relating to such Extraordinary Disposition (including
without limitation, legal, accounting and investment banking fees, and sales
commissions) and any relocation expenses incurred as a result thereof, taxes
paid or payable as a result thereof (after taking into account any available tax
credits or deductions in any tax sharing arrangements), amounts required to be
applied in payment of Indebtedness secured by a Lien incurred in accordance with
this Agreement on the assets or assets that are subject of such Extraordinary
Disposition and which Indebtedness is required pursuant to the terms of the
instrument governing such Indebtedness or Lien or in order to obtain the
necessary consent to such sale to be repaid in connection with such
Extraordinary Disposition and any reserve for adjustment in respect of the sale
price of or other liability in respect of such asset or assets.
"Net Worth" means, at any date, Consolidated stockholders' equity
(including the par value or stated value of all outstanding capital stock,
additional paid-in capital and retained earnings) of Romacorp determined in
accordance with GAAP, except that there shall be deducted therefrom any amount
of treasury stock reflected as an asset of Romacorp or any Subsidiary of
Holdings.
"NPC" means NPC International, Inc., a Kansas corporation.
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24
"Obligations" means, collectively, all of the indebtedness, obligations
and liabilities existing on the date hereof or arising from time to time
hereafter, whether direct, indirect, absolute, contingent, joint or several,
matured or unmatured, liquidated or unliquidated, secured or unsecured, arising
by contract, operation of law or otherwise, of a Borrower to the Agent or any
Lenders (i) in respect of the Loans made pursuant to this Agreement; or (ii)
under or in respect of any one or more of the Loan Documents. Obligations shall
also include all interest, charges and other fees chargeable hereunder to a
Borrower or due hereunder from a Borrower to Lenders from time to time and all
costs and expenses referred to in Section 11.6 herein.
"Participation Percentage" means, in relation to each Lender, the
percentage set forth with respect to such Lender on Schedule 1 with respect to
each Loan.
"Patents" shall mean all of the following in which a Borrower now holds
or hereafter acquires any interest: (i) all letters patent of the United States
or any country, all registrations and recordings thereof, and all applications
for letters patent of the United States or any other country, including
registrations, recordings and applications in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
state or territory thereof or any other country, and (ii) all reissues,
continuations, continuations-in-part or extensions thereof.
"Permitted Liens" means those Liens and encumbrances permitted
hereunder pursuant to Section 8.7.
"Person" shall include an individual, a company, a corporation, an
association, a partnership, a joint venture, an unincorporated trade or business
enterprise, a trust, an estate, or other legal entity or a government (national,
regional or local), court, arbitrator or any agency, instrumentality or official
of the foregoing.
"Pledge Agreement" means a pledge agreement or agreements with respect
to the Pledged Interests substantially in the form of Exhibit F-1 hereto in the
case of the pledge of common stock or Exhibit F-2 hereto in the case of the
pledge of partnership interests.
"Pledged Interests" means all of the Capital Stock of Borrowers and any
Subsidiary of a Borrower whether now existing or hereafter formed or acquired
other than Capital Stock issued to Management Shareholders pursuant to an
Employee Benefit Plan of a Borrower.
"Preferred Stock", as applied to the Capital Stock of any Person, means
Capital Stock of such Person (other than Common Stock of such Person) of any
class or classes (however designated) that rank prior, as to the payment of
dividends or as to the distribution of assets upon any voluntary or involuntary
liquidation, dissolution or winding up of such Person, to shares of Capital
Stock of any other class of such Person.
"Premises" means collectively, all real property and leasehold
interests now or hereinafter acquired by a Borrower, including without
limitation, all the Premises as defined in the Mortgages.
"Prime Rate" means the rate of interest announced from time to time by
Agent as its prime rate at its Head Office, whether or not Agent shall at times
lend to other borrowers at lower rates of
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interest, or, if there is no such prime rate, then such other rate as may be
substituted by Agent for its Prime Rate.
"Prime Rate Loan" means a Loan which bears interest at the Prime Rate.
"Proceeds" means "proceeds," as such term is defined in Section
9-306(1) of the UCC and, in any event, shall include, without limitation, (i)
any and all proceeds of any insurance, indemnity, warranty, or guaranty payable
from time to time with respect to any of the Collateral, and (ii) any and all
payments (in any form whatsoever) made or due and payable from time to time in
connection with any requisition, confiscation, condemnation, seizure, or
forfeiture of all or any part of the Collateral by any governmental body,
authority, bureau, or agency (or any Person acting under color of governmental
authority).
"Projections" means Romacorp's forecasted Consolidated and
consolidating: (a) balance sheets, (b) profit and loss statements, and (c) cash
flow statements, consistent with Romacorp's historical financial statements,
together with, if requested by Agent, appropriate supporting details and
statements of underlying assumptions.
"Property" means all types of real, personal, tangible, intangible or
mixed property.
"Pro Rata Share" means, in relation to any particular item, the share
of any Lender in such item, which shall be in the same proportion which the
aggregate amount of all of the obligations owing to such Lender with respect to
such item at such time shall bear to the aggregate amount of all of the
obligations owing to all of the Lenders with respect to such item at such time
net of any and all charges or fees due and payable to Agent under the Loan
Documents.
"Rate Option" means the Prime Rate or the Libor Rate.
"Real Estate" means all real property owned or leased by a Borrower and
all real property hereafter acquired or leased by any Borrower, together with
all fixtures, rights of way, privileges, liberties, tenements, hereditaments,
and appurtenances belonging or in any way appertaining thereto, all easements
now or hereafter benefiting such real property and all royalties and rights
appertaining to the use and enjoyment of such real property, together with all
of the buildings, structures, and other improvements thereto.
"Recapitalization" means the recapitalization of Holdings pursuant to
the Recapitalization Agreement, dated as of April 24, 1998 by and among NPC
Restaurant Holdings, Inc., NPC, Sentinel and Holdings.
"Reference Period" means, with respect to a particular Computation
Date, the period of four (4) consecutive calendar quarters ending on such
Computation Date.
"Reimbursement Obligations" means any amounts owing by Borrowers to the
Issuing Bank on account of draws or disbursements under or with respect to the
Letters of Credit.
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"Requisite Lenders" mean at such times as there are any Loans
outstanding, the Lenders whose aggregate Pro Rata Shares of the outstanding
Loans are greater than or equal to sixty-six and two-thirds percent (66 2/3%) of
the aggregate amount of the outstanding Loans, and at all other times, the
Lenders whose aggregate Credit Commitments are greater than or equal to
sixty-six and two-thirds percent (66 2/3%) of the aggregate Credit Commitments
of all the Lenders.
"Responsible Officer" (a) of a limited partnership means the general
partner of such limited partnership and if such limited partnership's general
partner is a corporation, then the chairman, vice-chairman, president, treasurer
or chief financial officer of such corporation; or (b) of a corporation means
any one or more of the corporation's or limited liability company's chairman,
vice-chairman, president, treasurer or chief financial officer.
"Restricted Payment" means: (a) any dividend or other distribution,
direct or indirect, on account of any Capital Stock of Romacorp or any of its
Subsidiaries now or hereafter outstanding, except a dividend payable solely in
shares of that class of Capital Stock to the holders of that class; (b) any
redemption, conversion, exchange, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any Capital
Stock or any notes or certificates evidencing Indebtedness of Holdings, Romacorp
or any of its Subsidiaries now or hereafter outstanding; (c) any payment or
prepayment of principal of, premium, if any, or interest on, redemption,
conversion, exchange, purchase, retirement, defeasance, sinking fund or similar
payment with respect to, any subordinated indebtedness; and (d) any payment made
to retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire shares of any Capital Stock of Romacorp or any of its
Subsidiaries now or hereafter outstanding.
"Revolving Credit Loan" means all Loans outstanding from time to time
made pursuant to Sections 2.2(a) and 2.3 hereof and any amounts added to the
principal balance of the Revolving Credit Loan pursuant to this Agreement.
"Revolving Credit Notes" mean, collectively, with respect to the
Revolving Credit Loan the promissory notes of Borrowers, in the face amounts of
the Revolving Credit Commitment of the respective Lenders in or substantially in
the form of Exhibit G hereto. "Revolving Credit Note" shall mean any one of the
Revolving Credit Notes.
"Romacorp" means Romacorp Operating Company, Inc., a Delaware
corporation with its chief executive office/principal place of business at 0000
Xxxxxx Xxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000.
"SEC" means the Securities and Exchange Commission or any successor
agency.
"Securities" mean any stock, shares, voting trust certificates, bonds,
debentures, notes, or other evidences of indebtedness, secured or unsecured,
convertible, subordinated or otherwise, or in general any instruments commonly
known as "securities" or any certificates of interest, shares or participation
in temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
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"Security Documents" shall mean, collectively, this Agreement, the
Mortgages, the Blocked Account Agreements, the Assignment of Patents, the
Assignment of Trademarks, the Assignment of Franchise Rights and Agreements, the
Collateral Assignment of Transitional Financial and Accounting Services
Agreement, the Pledge Agreements, and each other agreement, assignment or
instrument creating or purporting to create a lien in favor of Agent for the
ratable benefit of the Lenders.
"Senior Debt" means the Indebtedness of Romacorp acquired under the
Senior Debt Offering.
"Senior Debt Offering" means the issuance by Romacorp of approximately
$75,000,000 in aggregate principal amount of 12.0% Senior Notes due 2008.
"Sentinel" means Sentinel Capital Partners, L.P. and Sentinel Capital
Partners, X.X. XX, as applicable.
"Standard Flood Hazard Determination Form" means Form 81-93 or any
successor or replacement thereof developed by FEMA pursuant to Section 528 of
the National Flood Insurance Reform Act of 1994 (42 U.S.C. 1365(a)), for
determining whether a building or structure is located in an area identified as
an area having special flood hazards, whether flood insurance is required and
whether flood insurance is available under 42 U.S.C. 4001, et seq.
"Subsidiary" means, as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests having
such power only by reason of the happening of a contingency) to elect a majority
of the board of directors or other managers of such corporation, partnership or
other entity are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise qualified, all references to a "Subsidiary" or
to "Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries
of any Borrower (including each Borrower).
"Subsidiary Net Worth" of any Borrower, other than Romacorp, shall
mean, as of any date of determination thereof, the excess of (i) the amount of
the "present fair saleable value" of the assets of such Borrower as of the date
of such determination, over (ii) the amount of all "liabilities of such
Borrower, contingent or otherwise," as of the date of such determination, as
such quoted terms are determined in accordance with applicable federal and state
laws governing determinations of the insolvency of debtors. In determining the
Subsidiary Net Worth of any Borrower for purposes of calculating the Maximum
Credit Liability, the liabilities of such Borrower to be used in such
determination pursuant to clause (ii) of the preceding sentence shall in any
event include the liabilities of such Borrower hereunder and under the other
Loan Documents in respect of all Loans other than the Loans in respect of which
such calculation is being made.
"Termination Date" means the earlier of (i) the fifth anniversary of
the Closing Date; (ii) the date upon which the entire principal of the Revolving
Credit Notes shall become due pursuant to the provisions hereof (whether as a
result of acceleration by Agent or the Requisite Lenders or
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otherwise); or (iii) the date upon which the Credit Commitments terminate
pursuant to Section 9.2 hereof.
"Termination Event" means (i) a "Reportable Event" described in Section
4043 of ERISA and the regulations issued thereunder, but not including any such
event for which the 30 day notice requirement has been waived by applicable PBGC
regulation; or (ii) the withdrawal of a Borrower or an ERISA Affiliate of
Borrower from a Guaranteed Pension Plan during a plan year in which it was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA; or (iii) the
filing of a notice of intent to terminate a Guaranteed Pension Plan or the
treatment of a Guaranteed Pension Plan amendment as a termination under Section
4041 of ERISA; or (iv) the institution of proceedings to terminate a Guaranteed
Pension Plan by the Pension Benefit Guaranty Corporation; or (v) the withdrawal
or partial withdrawal of a Borrower or an ERISA Affiliate of a Borrower from a
Multiemployer Plan; or (vi) any other event or condition which might reasonably
be expected to constitute grounds under ERISA for the termination of, or the
appointment of a trustee to administer, any Guaranteed Pension Plan.
"Trademarks" shall mean all of the following in which any Borrower now
holds or hereafter acquires any interest: (i) all trademarks, trade names,
corporate names, business names, trade styles, service marks, logos, other
source or business identifiers, prints and labels on which any of the foregoing
have appeared or appear, designs and general intangibles of like nature, all
registrations and recordings thereof, and all applications in connection
therewith, including registrations, recordings and applications in the United
States Patent and Trademark Office or in any similar office or agency of the
United States, any state or territory thereof or any other country, and (ii) all
reissues, extensions or renewals thereof.
"UCC" means the Uniform Commercial Code as the same may, from time to
time, be in effect in the State of Ohio; provided, however, that in the event
that, by reason of mandatory provisions of law, any or all of the attachment,
perfection, or priority of Lender's security interest in any of the Collateral
is governed by the Uniform Commercial Code as in effect in a jurisdiction other
than the State of Ohio, the term "UCC" shall mean the Uniform Commercial Code as
in effect in such other jurisdiction for purposes of the provisions hereof
relating to such attachment, perfection, or priority and for purposes of
definitions related to such provisions.
"UCC Financing Statements" mean the UCC financing statements naming the
Borrower, as debtors, and Agent, for the ratable benefit of Lenders, as
creditor, which UCC financing statements describe all or some portion of the
Collateral and which together perfect Agent's security interest in the
Collateral.
"Valuable Transfers" shall mean, in respect of any Borrower, (i) all
loans, advances or capital contributions made to or for the benefit of such
Borrower with proceeds of Loans, (ii) all debt securities or other obligations
of such Borrower acquired by such Borrower or retired by such Borrower with
proceeds of Loans, (iii) the fair market value of all property acquired with
proceeds of Loans, and transferred, absolutely and not as collateral, to such
Borrower, and (iv) all equity securities of such Borrower acquired by such
Borrower with proceeds of Loans.
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"Working Capital" means the difference between (i) Current Assets,
excluding cash, Cash Equivalents, prepaid taxes and any amounts due from
Affiliates, and (ii) Current Liabilities, excluding the current portion of any
long term Indebtedness for Borrowed Money, accrued taxes and any amounts due to
Affiliates.
ARTICLE 2
THE LOANS
Section 2.1 Commitments. Each Lender, severally and not jointly,
agrees, upon the terms and subject to the conditions contained in this
Agreement, to make the Loans to Borrower from time to time prior to the
Termination Date, in a principal amount equal to such Lender's Participation
Percentage of the aggregate principal amount of such Loan request by Borrower on
each occasion.
Section 2.2 Making the Loans.
(a) Revolving Credit Loans. Each Lender will, subject to all
of the applicable terms and conditions of this Agreement, make an amount equal
to its Participation Percentage in each Revolving Credit Loan available to
Borrowers at such times and in such amount as shall be requested by Borrowers in
compliance with Section 2.3, and Borrowers may borrow on a revolving basis from
Lenders on the Closing Date and from time to time thereafter, sums not to exceed
the Maximum Revolving Commitment. Borrowers may borrow, repay and reborrow
hereunder on and after the date hereof until the Termination Date, subject to
the terms, provisions and limitations set forth herein.
Section 2.3 Draws, Advances and Settlement of Payments and Advances.
(a) On the Closing Date, and upon satisfaction of the
conditions set forth in Section 4.1, Lenders shall make available to Borrowers
the initial Revolving Credit Loan.
(b) All advances or disbursements of the Revolving Credit Loan
proceeds shall be effectuated at Borrowers' request either through wire transfer
or by receipt by Agent of a check drawn on a central disbursement account (the
"Agent Disbursement Account") of Borrowers maintained with Agent. Any request
for advance by wire transfer may be transmitted to Agent at its Head Office via
facsimile provided Borrowers immediately notify Agent by telephone of such
transmission. All such requests for wire transfer advances shall be made to and
received by Agent not later than 12:00 noon Cincinnati, Ohio time on the Draw
Date specified on such request and each such check or wire transfer request
shall be deemed to be a request for an advance on the Revolving Credit Loan on
the date when received and processed by Agent. Borrowers hereby designate the
President, Treasurer, Secretary or Chief Financial Officer of Romacorp (or any
other officer authorized by Borrowers and designated as such to Agent) acting
individually or jointly to make all requests for draws and advances.
(c) The Agent shall promptly notify each Lender of its
Participation Percentage of each requested Revolving Credit Loan and the date of
such borrowing. On the borrowing date
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specified in such notice, each Lender shall make its share of the borrowing
available at the Head Office of the Agent for deposit to such account as the
Agent shall designate, no later than 1:00 p.m. Cincinnati time in Federal or
other immediately available funds. Upon receipt of the funds to be made
available by Lenders to fund any Revolving Credit Loan hereunder, the Agent
shall disburse such funds by depositing them into the Agent Disbursement
Account.
(d) Within one hundred and twenty (120) days of the Closing
Date, each bank or other financial institution, other than Provident, with which
a Borrower maintains an account for the deposit of funds shall execute a Blocked
Account Agreement pursuant to which such bank or other financial institution
shall agree to direct all funds to an account at Agent's Head Office (the "Agent
Deposit Account"). All deposits to the Agent Deposit Account shall be the
property of Agent for the benefit of Lenders and shall not be commingled with
Borrowers' other funds or be deposited in any bank account of any Borrower, or
used in any manner except to pay the Obligations. Agent shall, at the close of
business on each Business Day, automatically debit the Agent Deposit Account and
apply the proceeds against the Loans and other Obligations pursuant to the
provisions of Section 2.8(b). So long as no Event of Default shall have occurred
and be continuing, if funds remain in the Agent Deposit Account following the
application provided for in the preceding sentence, the balance will be promptly
transferred to the Agent Disbursement Account. The crediting of items deposited
in the Agent Deposit Account to the reduction of the Loans shall be conditioned
upon final payment of the item and if any item is not so paid, the amount of any
credit given for it may be charged to the Loans or to any other deposit account
of a Borrower, whether or not the item is returned.
Section 2.4 The Revolving Credit Notes. The absolute and unconditional
obligation of Borrowers to repay to each Lender its respective Pro Rata Share of
the principal of each Revolving Credit Loan and the interest thereon shall be
evidenced by a separate Revolving Credit Note for each Lender in the amount of
its respective Credit Commitment for each Revolving Credit Loan dated as of the
Closing Date. All payments under the Revolving Credit Notes shall be made to
Agent at its Head Office, for the account of Lenders, and Agent shall allocate
all payments on each Revolving Credit Loan received from Borrower among all
Lenders in accordance with each Lender's Pro Rata Share of such Revolving Credit
Loan in accordance with Section 2.8(b).
Section 2.5 Letters of Credit.
(a) Obligation to Issue Letters of Credit. Subject to the
terms and conditions of this Agreement, prior to the maturity of the Loans
(whether by acceleration or otherwise) and so long as no Default has occurred
and is continuing, Issuing Bank agrees to issue, in accordance with Issuing
Bank's usual and customary business practices, one or more Letters of Credit at
the request of Borrowers, provided that Issuing Bank shall not issue any Letter
of Credit if: any order, judgment or decree of any governmental authority or
arbitrator shall purport by its terms to enjoin or restrain Issuing Bank from
issuing such Letter of Credit or any rule, regulation or law applicable to
Issuing Bank or any request or directive from any governmental authority with
jurisdiction over Issuing Bank shall prohibit or request that Issuing Bank
refrain from the issuance of letters of credit generally or such Letters of
Credit in particular or shall impose upon Issuing Bank with respect to such
Letters of Credit any restriction or reserve or capital requirement (for which
Issuing Bank is not otherwise compensated) not in effect on the date hereof, or
any unreimbursed loss, cost or
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expense which was not applicable, in effect or known to Issuing Bank as of the
date hereof in which Issuing Bank in good xxxxx xxxxx material to it; or any of
the conditions precedent for the issuance of such Letter of Credit or other
terms and provisions of this Loan or any subsequent loans hereof are not
satisfied.
(b) Expiration Date of Letters of Credit. The expiration date
of any Letter of Credit shall not be later than twelve (12) months after the
date of the issuance thereof.
(c) Letters of Credit Deemed to be Loans. All Letters of
Credit issued by Issuing Bank shall be issued in connection with this Agreement
and Borrowers' obligation to pay any amount drawn under any Letter of Credit
shall constitute an Obligation hereunder and shall be bound by and shall benefit
from all the terms, provisions and conditions hereunder, including without
limitation, Issuing Bank's rights to recover costs and expenses relating thereto
as provided in this Agreement and Issuing Bank's remedies upon the occurrence of
an Event of Default. Each Letter of Credit issued hereunder shall reduce the
amount of Loan proceeds available for disbursement under the Credit Commitment
in an amount equal to the face amount of each such Letter of Credit. No interest
shall accrue on the amount of undisbursed Loan proceeds representing the
aggregate amount of the Letters of Credit until such time as such Letters of
Credit are drawn upon.
(d) Procedure for Issuance of Letters of Credit. Borrowers
shall give Issuing Bank two (2) Business Days' prior written notice, or
telephonic or electronically transmitted notice confirmed promptly thereafter in
writing, of any requested issuance of a Letter of Credit under this Agreement.
Such notice shall specify the stated amount of the Letter of Credit requested,
the effective date (which day shall be a Business Day) of issuance of such
requested Letter of Credit, the date on which such requested Letter of Credit is
to expire (which date shall be a Business Day, the proposed beneficiaries of
such Letter of Credit, the conditions for draws under such Letter of Credit, and
any other information relevant thereto as Issuing Bank may request. Unless there
is a Default or Event of Default hereunder, or unless the amount of the Letter
of Credit exceeds the limitations set forth by Section 2.5(f) hereof, then,
subject to the terms and conditions of this Agreement, Issuing Bank shall issue,
on the requested date, a Letter of Credit for the account of Borrowers in
accordance with Issuing Bank's usual and customary business practices.
(e) Reimbursement Obligations. Borrower agrees that all
Reimbursement Obligations owing to Issuing Bank under or with respect to each
such Letter of Credit issued by Issuing Bank shall be deemed to be a request for
a draw or advance hereunder and shall be deemed to have been disbursed to
Borrowers as a Loan hereunder. Borrowers hereby promise to pay to Agent any and
all Reimbursement Obligations hereunder. Interest shall begin to accrue on the
Reimbursement Obligations on the day such Reimbursement Obligations are incurred
by Borrowers as a result of disbursement under the Letter of Credit.
(f) Amount of Letters of Credit. At no time shall the
aggregate amount of all of the issued and outstanding Letters of Credit exceed
Two Million Dollars ($2,000,000), nor shall the sum of all Letters of Credit
outstanding and all Loans outstanding exceed the Maximum Revolving Commitment.
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(g) Fees. A fee in the amount of two and one-quarter percent
(2.25%) per annum (computed on the basis of a 360-day year for the days elapsed)
of the daily average undrawn face amount of each of the Letters of Credit shall
be payable by Borrower ("Letter of Credit Fee"), plus all out-of-pocket
expenses, including, but not limited to, charges for the opening, closing,
amending, reissuing and extending of letters of credit. The Letter of Credit fee
shall be paid in arrears on the last day of each month and on the Termination
Date or if such day is not a Business Day on the next succeeding Business Day
commencing on the first such date following the issuance of any Letter of
Credit. The Agent agrees to disburse such Letter of Credit Fee, promptly upon
receipt, to the Issuing Bank, a fronting fee in an amount equal to 1/4 of 1% per
annum of the daily average undrawn face amount of each of the Letters of Credit,
plus all commissions, charges, costs and expenses in the amounts customarily
charged by the Issuing Bank from time to time in like circumstances with respect
to the issuance of each Letter of Credit, and the balance thereof to each Lender
its pro rata portion of such Letter of Credit fee.
(h) Letter of Credit Participations. By issuance of a Letter
of Credit and without any further action on the part of Issuing Bank or Lenders
in respect thereof, Issuing Bank hereby grants to each Lender, and each Lender
hereby agrees to acquire from Issuing Bank, a participation in such Letter of
Credit equal to such Lender's Pro Rata Share of the face amount of such Letter
of Credit, effective upon the issuance of such Letter of Credit. In
consideration and in furtherance of the foregoing, each Lender hereby absolutely
and unconditionally agrees to pay to Agent on behalf of Issuing Bank, such
Lender's Pro Rata Share of any Reimbursement Obligation. Each Lender
acknowledges and agrees that its obligation to acquire participations pursuant
to this Section 2.5(h) in respect of Letters of Credit is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including, without limitation, the occurrence and continuance of a default or an
event of default hereunder, and that each such payment shall be made without any
offset, abatement, withholding or reduction whatsoever. Credit beyond the
Termination Date;
Section 2.6 Interest Payable on the Loans.
(a) Interest Rate. Except as otherwise provided herein, the
Loans shall bear interest on the daily outstanding principal balance thereunder
at an annual rate equal to, at Borrowers' option, the Prime Rate or Libor Rate.
Each Libor Rate Loan shall bear interest from and including the first day of the
Interest Period applicable thereto to (but not including) the last day of such
Interest Period at the interest rate determined as applicable to such Libor Rate
Loan. Borrowers shall select Interest Periods with respect to Libor Rate Loans
so that it is not necessary to pay a Libor Rate Loan prior to the last day of
the applicable Interest Period in order to repay the Loans on the Termination
Date.
(b) Notice. Except as otherwise provided herein, if, on any
day any part of the Revolving Credit Loans is outstanding with respect to which
notice has not been timely received by the Agent in accordance with this
Agreement specifying that the Libor Rate shall be applicable thereto, then for
that day such Loan shall bear interest at the Prime Rate.
(c) Conversions. Borrower may elect from time to time to
convert all or part of the outstanding principal balance of any Revolving Credit
Loan from a Prime Rate Loan to a Libor
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Rate Loan by the Borrowers' giving Agent at least three (3) Business Days prior
irrevocable notice of such an election; provided, that no Loan may be converted
to a Libor Rate Loan while a Default or an Event of Default has occurred and is
continuing. Borrowers may also elect from time to time to continue any
outstanding Libor Rate Loan (whether for a similar or a different Interest
Period) upon expiration of the Interest Period then applicable thereto by the
Borrowers' giving the Agent at least three (3) Business Days' prior irrevocable
notice of such continuation of such Libor Rate Loan; provided, that no Revolving
Credit Loan may be continued as a Libor Rate Loan while a Default or an Event of
Default has occurred and is continuing.
(d) Election. Each notice of election to convert to a Libor
Rate Loan or to continue a Libor Rate Loan shall be in the form of Exhibit J
hereto and shall specify (i) the proposed conversion or continuation date; (ii)
the amount of the Revolving Credit Loan to be converted or continued; (iii)
whether a conversion or a continuation is being requested; and (iv) the
requested Interest Period. Each such notice shall also certify that no Default
or Event of Default has occurred and is then continuing.
(e) Effectiveness. On the date upon which each conversion to a
Libor Rate Loan or continuation of a Libor Rate Loan is being made pursuant to a
notice given in accordance with this Agreement, the Agent shall take such action
as is necessary to effect such conversion or continuation. Subject to the
limitations set forth in this Section 2.6 and in the definition of Interest
Period, all or any part of the Revolving Credit Loans may be converted into
Libor Rate Loans or continued as Libor Rate Loans as provided herein; provided,
that partial conversions or continuations of any Libor Rate Loan shall be in the
minimum amount of $1,000,000 and, if in excess thereof, in integral multiples of
$100,000; provided, further, that there shall be no more than three (3)
borrowings comprised of Libor Rate Loans outstanding at any time.
(f) Determination of Prime Rate. Agent shall determine the
Prime Rate in effect from time to time. Any change in the Prime Rate shall, for
all purposes of this Agreement and any of the other Loan Documents, become
effective on the effective date of such change in the Prime Rate as announced by
Agent in accordance with Agent's customary practices.
(g) Monthly Installments. Borrowers shall pay to Agent for the
account of Lenders in accordance with their respective Pro Rata Shares, monthly
in arrears on the first Business Day of each month beginning with the month
following the month in which the Closing Date falls, interest on the outstanding
principal amount of each Loan at the annual rate equal to the Interest Rate
applicable to such Loan.
(h) Interest on Overdue Payments; Default Interest Rate. If
the Revolving Credit Notes have been accelerated pursuant to Section 9.2(b) or
if a Default or an Event of Default with respect to any monetary payment
hereunder shall have occurred and during the period in which the Default or
Event of Default is continuing, the outstanding principal and all accrued
interest as well as any other Obligations due Lenders or Agent hereunder or
under any Loan Document shall bear interest from the date on which such amount
shall have first become due and payable to Lenders or Agent to the date on which
such amount shall be paid to Lenders or Agent (whether before or after
judgment), at the Default Interest Rate. Interest at the Default Interest Rate
will continue to accrue
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and will (to the extent permitted by applicable law) be compounded daily until
the Obligations in respect of the payment are discharged (whether before or
after judgment).
Section 2.7 Repayments and Prepayments of Principal.
(a) Repayments on the Revolving Credit Loans. Borrowers shall
have the right to repay the principal of the Revolving Credit Loans in full or
in part at any time and from time to time without any penalty or premium subject
to Section 2.7(h).
(b) Revolving Loan Overadvance. If at any time the aggregate
amount of the Loans outstanding to Borrowers exceeds the Maximum Revolving
Commitment, Borrowers shall be obligated to immediately prepay the amount that
exceeds the Maximum Revolving Commitment.
(c) Prepayments from Extraordinary Dispositions. Immediately
upon receipt by Borrowers of Net Proceeds, Borrowers shall prepay the Loans in
an amount equal to the total Net Proceeds then subject to this Section 2.7(c) in
accordance with Section 2.8(b). Notwithstanding the foregoing, in the event that
a Borrower (1) has an accrued tax liability with respect to an Extraordinary
Disposition or (2) reasonably expects the proceeds of such Extraordinary
Disposition to be (i) reinvested within six (6) months of the receipt thereof in
productive assets of a kind then used or useable in the business of such
Borrower or a Subsidiary of such Borrower, or (ii) in the case of insurance and
condemnation proceeds, utilized within six (6) months of the receipt thereof (or
such longer period as the Agent may agree to, such agreement not to be
unreasonably withheld if such Borrower has timely begun and is diligently
pursuing the rebuilding or repair in question but reasonably expects that such
rebuilding or repair will not be completed within such six (6) month period) to
repair the loss or damage to or otherwise rebuild the assets in respect of which
the proceeds were paid, then, subject to the terms of the lease, such Borrower
shall deliver such proceeds or portion thereof to Agent to be held by Agent in a
cash collateral account bearing interest payable to such Borrower at a rate per
annum (meaning three hundred sixty (360) days) equal to (i) the same rate of
interest payable hereunder with respect to the Revolving Loan for that portion
of such proceeds not in excess of the balance of the Revolving Credit Loan and
(ii) the Federal Funds Rate for any amount in excess of the balance of the
Revolving Credit Loan. Upon such Borrower's request, Agent and Lenders shall
release such proceeds to such Borrower for payment of the accrued tax liability
or for reinvestment, repair or rebuilding. In the event such Borrower (1) is not
required to pay all or any portion of the accrued tax liability or (2) fails to
reinvest such proceeds or utilize them for repair or rebuilding within six (6)
months of the receipt thereof (or such longer period that may be agreed to
pursuant to this Section 2.7(c), each Borrower authorizes and directs Agent and
Lenders to apply such amount as a prepayment of the Loans to be applied in
accordance with Section 2.8(b).
(d) Prepayment from Key Man Insurance. In the event that a
Borrower or Agent receives proceeds from payment of the key man life insurance
maintained pursuant to Section 6.3, Borrowers shall prepay or Agent shall apply
such amount as a prepayment of the Loans in an amount equal to the lesser of
such insurance proceeds or the amount of the Obligations then outstanding.
Prepayments made under this Section 2.7(d) shall be applied to the Loans in
accordance with Section 2.8(b).
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(e) Maturity. Subject to the terms and conditions of this
Agreement, Borrowers will be entitled to reborrow all or any part of the
principal of the Revolving Credit Notes repaid or prepaid prior to the
Termination Date. The Credit Commitments shall terminate and all of the
indebtedness evidenced by the Revolving Credit Notes shall, if not sooner paid,
be in any event absolutely and unconditionally due and payable in full by
Borrowers on the fifth anniversary of the Closing Date, the date of the final
maturity of such Revolving Credit Notes.
(f) Application of Prepayments. Any prepayment of the
Obligations under the Revolving Credit Notes or any of the other Loan Documents
shall be applied by Agent as set forth in Section 2.8 hereof. Any amounts
received in connection with a payment, repayment or prepayment shall be applied
to the extent possible, first, to Prime Rate Loans and, then, to Libor Rate
Loans. To the extent that such payment, repayment or prepayment shall be applied
to a Libor Rate Loan, Agent shall retain such amount until the expiration of the
Interest Period applicable to such Libor Rate Loan, and apply such payment at
such time so as to minimize the Libor Break Funding Costs applicable to such
payment, repayment or prepayment, unless otherwise instructed by Borrowers, to
pay, repay or prepay such Libor Rate Loan and nonetheless incur the applicable
Libor Break Funding Cost.
(g) Libor Breakage Costs. Upon any repayment or prepayment
pursuant to this Section 2.5 of any Loan which is also a Libor Rate Loan not
made on the last day of any Interest Period for such Libor Rate Loan, Borrowers
shall pay to Agent for the ratable benefit of the Lenders, such Libor Breakage
Costs pursuant to Section 2.12 hereof.
(h) Prepayment Fees. If Borrowers voluntarily prepay the
Obligations in full at any time during the first Loan Year in connection with
any early termination of this Agreement, Borrowers shall pay to Agent, for the
ratable benefit of Lenders, as liquidated damages and compensation for the costs
of being prepared to make funds available to Borrowers under this Agreement, and
not as a penalty, an amount determined by multiplying (x) the sum of the
prepayment plus if the Revolving Credit Loans are repaid in full and the Credit
Commitments terminated, the amount of the Credit Commitment with respect to then
unfunded Revolving Credit Loans times (y) one percent (1%) provided, however,
that if such prepayment occurs as a result of (i) a sale of Borrowers to an
unrelated third party or (ii) an Initial Public Offering, no such prepayment fee
shall be required.
Section 2.8 Payments and Computations.
(a) Time and Place of Payments. Notwithstanding anything in
this Agreement or any of the other Loan Documents to the contrary, each payment
payable by Borrowers to the Agent or any Lender under this Agreement or any of
the other Loan Documents other than payments pursuant to Section 2.3(d) made as
a result of the application of funds in the Agent Deposit Account, shall be made
directly to the Agent, at Agent's Head Office, not later than 12:00 noon Eastern
Standard or Eastern Daylight Time, as applicable in Cincinnati, Ohio, on the due
date of each such payment in immediately available and freely transferrable
funds. The Agent will promptly cause to be distributed to each Lender in
immediately available and freely transferrable funds such Lender's Pro Rata
Share of each such payment received by the Agent. In order to cause timely
payment to be made to Agent of all Obligations as and when due, each Borrower
hereby authorizes
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and directs Agent, at Agent's option to debit the Agent's Disbursement Account
(by increasing the principal balance of the Revolving Credit Loan) when such
Obligations become due.
(b) Application of Funds. Notwithstanding anything herein to
the contrary, the funds received by Agent with respect to the Obligations shall
be applied as follows:
(i) No Default. If the Revolving Credit Notes have
not been accelerated pursuant to Section 9.2(b) and if no Default or
Event of Default hereunder or under the Revolving Credit Notes or any
of the other Loan Documents shall have occurred and be continuing at
the time Agent receives such funds, in the following manner: (a) first,
to the payment of all fees, charges, and other sums (with exception of
principal and interest) due and payable to Agent or Lenders under the
Revolving Credit Notes, this Agreement or the other Loan Documents at
such time; (b) second, to the payment of all of the interest which
shall be due and payable on the principal of the Revolving Credit Notes
at the time of such payment in accordance with each Lender's Pro Rata
Share; (c) third, to the payment of such amount of principal of the
Revolving Credit Notes in accordance with each Lender's Pro Rata Share;
and (f) fourth, to the Borrowers.
(ii) Default. If the Revolving Credit Notes have been
accelerated pursuant to Section 9.2(b), or if a Default or Event of
Default hereunder shall have occurred and be continuing hereunder or
under the Revolving Credit Notes or any of the other Loan Documents at
the time Agent receives such funds, in the following manner: (a) first,
to the payment or reimbursement of Lenders and Agent for all costs,
expenses, disbursements and losses which shall have been incurred or
sustained by Lenders or Agent in or incidental to the collection of the
Obligations owed by Borrowers hereunder or the exercise, protection, or
enforcement by Lenders and Agent of all or any of the rights, remedies,
powers and privileges of Lenders and Agent under this Agreement, the
Revolving Credit Notes, or any of the other Loan Documents and in and
towards the provision of adequate indemnity to the Agent and any of the
Lenders against all taxes or Liens which by law shall have, or may have
priority over the rights of the Agent or Lenders in and to such funds
and (b) second, to the payment of all of the Obligations in accordance
with Section 2.8(b)(i) above.
(c) Payments on Business Days. If any sum would (but for the
provisions of this Section 2.8(c)) become due and payable to Agent or any Lender
by Borrowers under any of the Loan Documents on any day which is not a Business
Day, then such sum shall become due and payable on the Business Day next
succeeding the day on which such sum would otherwise have become due and payable
hereunder or thereunder, and interest payable to Agent or any Lender under this
Agreement or any of the other Loan Documents shall continue to accrue and shall
be adjusted by the Agent accordingly.
(d) Computation of Interest. All computations of interest
payable under this Agreement, the Revolving Credit Notes, or any of the other
Loan Documents shall be computed by Agent on the basis of the actual principal
amount outstanding on each day during the payment period and shall be calculated
on the basis of the actual number of days elapsed during such period for which
interest is being charged, predicated on a year consisting of three hundred and
sixty (360) days. The daily interest charge shall be one three-hundred-sixtieth
(1/360th) of the annual interest
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amount. Each determination of any interest rate by Agent pursuant to this
Agreement, any Revolving Credit Note, or any of the other Loan Documents shall
be conclusive and binding on Borrowers in the absence of manifest error. Absent
manifest error, a certificate or statement signed by an authorized officer of
Agent shall be conclusive evidence of the amount of the Obligations due and
unpaid as of the date of such certificate or statement.
Section 2.9 Payments to be Free of Deductions. Each payment payable by
a Borrower to Agent or any Lender under this Agreement, any Revolving Credit
Note, or any of the other Loan Documents shall be made in accordance with
Section 2.8 hereof, without set-off or counterclaim and free and clear of and
without any deduction of any kind for any taxes, levies, imposts, duties,
charges, fees, deductions, withholdings, compulsory loans, restrictions or
conditions of any nature now or hereafter imposed or levied by any political
subdivision or any taxing or other authority therein, unless a Borrower is
compelled by law to make any such deduction or withholding. In the event that
any such obligation to deduct or withhold is imposed upon a Borrower with
respect to any such payment payable by a Borrower to Agent or any Lender, (a)
each Borrower shall be permitted to make the deduction or withholding required
by law in respect of the said payment, and (b) there shall become and be
absolutely due and payable by such Borrower to Agent or such Lender on the date
on which the said payment shall become due and payable and each Borrower hereby
promises to pay to Agent or such Lender on such date, such additional amount as
shall be necessary to enable Agent or such Lender to receive the same net amount
which Agent or such Lender would have received on such due date had no such
obligation been imposed by law. Anything in this Section 2.9 to the contrary
notwithstanding, the foregoing provisions of this Section 2.9 shall not apply in
the case of any deductions or withholdings made in respect of taxes charged upon
or by reference to the overall net income, profits or gains of Agent or any
Lender. Borrowers shall have no obligation to make any payment pursuant to this
Section 2.9 with respect to any Lender who is not a party hereto on the Closing
Date unless (i) no such payments would be payable to any such Lender on the date
it becomes a party hereto and no such payments could be reasonably expected to
be payable to such Lender and (ii) if such Lender is organized under the laws of
a foreign jurisdiction, such jurisdiction is exempt from United States
withholding tax and such Lender has provided any Borrower with an Internal
Revenue Form 4224 or Form 1001 or other certificate of document required under
United States law to establish entitlement to such exemption.
Section 2.10 Use of Proceeds.
(a) Permitted Uses of Loan Proceeds. Each Borrower represents,
warrants and covenants to Agent and each Lender that all proceeds of the Loans
shall be used by Borrower solely for the purpose of financing working capital
and for general corporate purposes.
(b) Prohibited Uses. Each Borrower represents, warrants and
covenants to Agent and each Lender that no part of the proceeds of the Loans
will be used (directly or indirectly) so as to result in a violation under
Regulations G, T, U or X of the Board of Governors of the Federal Reserve System
or for any other purpose violative of any rule or regulation of such Board.
Section 2.11 Libor Breakage Cost. Borrowers shall pay to Agent, for the
ratable benefit of each Lender, the Libor Break Funding Costs that Agent
determines are attributable to the following events (regardless of whether such
events occur as a result of the occurrence of an Event
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of Default or the exercise of any right or remedy of the Agent or the Lenders
under this Agreement or any other agreement, or at law):
(a) any payment (including, without limitation, the
acceleration of the Loans pursuant to this Agreement or any Loan Document),
repayment, mandatory or optional prepayment, or conversion of a Libor Rate Loan
for any reason on a date other than the last day of the Interest Period for such
Libor Rate Loan; or
(b) any failure by Borrowers for any reason to borrow a Libor
Rate Loan on the date for such borrowing specified in the relevant notice of
borrowing given pursuant to this Agreement.
Section 2.12 Additional Costs, etc. If any Lender shall reasonably
determine that any future applicable law, rule or regulation, or any change in
any present law or in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender with any
request or directive regarding capital adequacy (whether or not having the force
of law) from any such authority, central bank or comparable agency, has or would
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 adoption, change or compliance by any
amount deemed by such Lender to be material and is not otherwise reflected in
the interest and other charges payable by Borrowers hereunder, then Borrowers
shall pay to such Lender upon demand such amount or amounts, in addition to the
amounts payable under the other provisions of this Agreement or the Revolving
Credit Notes, as will compensate such Lender for such reduction. Determinations
by any Lender of the additional amount or amounts required to compensate such
Lender in respect of the foregoing shall be conclusive in the absence of
manifest error. In determining such amount or amounts, Lender may use any
reasonable averaging and attribution methods.
Section 2.13 Agent and Lender Statements. A statement signed by an
officer of Agent or any Lender (as the case may be) setting forth any additional
amount required to be paid by Borrowers to Agent or such Lender under Sections
2.9 and 2.12 hereof, and the computations made by Agent or such Lender to
determine such additional amount or amounts, shall be submitted by Agent or such
Lender to Borrowers in connection with each demand made at any time by Agent
(and copies thereof delivered to each other Lender) or such Lender under either
of such Sections. A claim by Agent or any Lender for all or any part of any
additional amounts required to be paid by Borrowers under Sections 2.9 and 2.12
hereof may be made before or after any payment to which such claim relates. Each
such statement shall, in the absence of manifest error, constitute conclusive
evidence of the additional amount required to be paid to Agent or such Lender,
provided it sets out in reasonable detail the reasons for such notice and the
averaging and attribution methods used by Agent or such Lender to determine the
amounts set forth in such notice.
Section 2.14 Allocation of Liability.
(a) Notwithstanding anything herein to the contrary, each
Borrower's liability (other than Romacorp's) under the Revolving Credit Notes
shall be limited to the Maximum Credit Liability for each Borrower as determined
at the earlier of the date of commencement of a case
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under Title 11 of the United States Code (or any successor provision) in which
such Borrower is a debtor or the date enforcement is sought hereunder or under
the Revolving Credit Notes; provided, however, that each Borrower shall be
jointly and severally liable for all advances, charges, costs and expenses,
including reasonable attorneys' fees incurred or paid by Agent or any Lender in
exercising any right, power or remedy conferred by this Agreement or any
enforcement thereof, including, without limitation, those additional costs,
claims and damages set forth in Section 11.6.
(b) Each Borrower agrees that in the event of (i) the
dissolution or insolvency of any Borrower, (ii) the inability of any Borrower to
pay its debts as they become due, (iii) an assignment by any Borrower for the
benefit of its creditors, or (iv) the institution of any bankruptcy or other
proceeding by or against any Borrower alleging that such Borrower is insolvent
or unable to pay its debts as they become due, and whether or not such event
shall occur at a time when the Obligations are not then due and payable, the
other Borrowers shall pay the Obligations promptly upon demand as if the
Obligations were then due and payable. Each Borrower agrees that upon the filing
by or against any other Borrower of any proceeding under any present or future
provision of the United States Bankruptcy Code, or any other similar federal or
state statute, other Borrowers shall have no right to contribution,
indemnification, or any recourse whatsoever against the bankrupt Borrower for
any liability incurred by the other Borrowers under the terms of the Loan
Documents. Each Borrower agrees that this provision shall continue to be
effective or be reinstated, as the case may be, if at any time any payment, or
any part thereof, of principal, interest or any other amount with respect to the
Obligations is rescinded or must otherwise be restored by Agent or the Lenders
upon the bankruptcy or reorganization of any Borrower, any other Person or
otherwise.
Each Borrower further agrees that, to the extent that any Borrower
makes a payment to Agent, which payment or payments or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or otherwise required to be repaid to another Borrower, its estate, trustee,
receiver or any other party, including without limitation, under any bankruptcy
law, state or federal law, common law or equitable cause, then to the extent of
such payment or repayment, the obligation or part thereof which has been paid,
reduced or satisfied by such amount shall be reinstated and continued in full
force and effect as of the date such initial payment, reduction or satisfaction
occurred.
ARTICLE 3
SECURITY AGREEMENT
Section 3.1 Security Interest. To secure the prompt repayment of the
Revolving Credit Notes and the Obligations, Borrowers hereby grant, and hereby
pledge and collaterally assign, to Agent, on behalf of the Lenders, a lien and
security interest in and to the Collateral. To secure further such liabilities
and Obligations, each Borrower has granted to Agent, on behalf of the Lenders, a
first lien upon all real property owned by such Borrower; has executed and
delivered to Agent, on behalf of the Lenders, Mortgages or deeds of trust,
amendments or modifications to Mortgages and valid assignments of all other
property rights (including, without limitation, rights to receive rents and
rights with respect to judgments and claims) which now exist or which may exist
or arise hereafter from time to time; has executed and delivered to Agent, on
behalf of the Lenders,
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certificates of title and the like as necessary from time to time to secure the
Obligations hereunder; and shall deliver to Agent, on behalf of the Lenders, to
the extent required herein or upon Agent's request in accordance with the terms
of this Agreement, all instruments, documents and Chattel Paper in which such
Borrower from time to time has an interest and such other documents as Agent may
request to perfect a security interest in the Collateral. Notwithstanding the
foregoing, if any contract or General Intangible prohibits, or requires the
consent for (in accordance with the terms thereof after giving effect to any
applicable laws), the granting of a security interest therein or in the
Collateral, or if the granting of a security interest in any contract or General
Intangible shall violate applicable law, then the security interest granted
hereby shall be limited to the extent (and only to the extent) necessary so that
such contract or General Intangible shall not be so violated or no such
violation of law exist, as the case may be.
Section 3.2 Financing Statements; Additional Documents. Each Borrower
shall take all necessary action or as requested by Agent or any Lender to
continue as perfected the first lien and security interest in the Collateral of
Lenders and Agent, except for such Collateral in which a first lien can be
perfected only by possession and such possession is not required by Agent at
this time and Permitted Liens. Such filings shall be in form and substance
required by Agent, and each Borrower shall pay all costs of recording and filing
the financing statements (and any continuation or termination statements with
respect thereto), the Mortgages and any other documents, titles, statements,
assignments or the like reasonably required to create, maintain, preserve or
perfect the liens or security interests granted under the Loan Documents,
together with costs and expenses of any lien or UCC searches required by Agent
in connection with the making of the Loans. Each Borrower irrevocably hereby
makes, constitutes and appoints Agent (and all Persons designated by Agent for
that purpose) as such Borrower's true and lawful attorney and agent-in-fact to
execute such financing statements, documents and other agreements and
instruments and do such other acts and things as may be necessary to preserve
and perfect the security interest in the Collateral granted to Agent for the
benefit of the Lenders. At Agent's request, each Borrower shall execute and
deliver to Agent, on behalf of the Lenders, at any time and from time to time
hereafter, all supplemental documentation that Agent may reasonably request to
perfect, maintain, preserve or continue the security interest and liens granted
Lenders and Agent hereby and under any of the other Loan Documents, in form and
substance acceptable to Agent, and pay the costs of preparing and recording or
filing of the same. Each Borrower agrees that a carbon, photographic, or other
reproduction of this Agreement or of a financing statement is sufficient as a
financing statement. Except as otherwise provided in this Agreement, each
Borrower immediately on acquiring Inventory or Accounts or Proceeds thereof for
which separate perfection is necessary or reasonably considered desirable by
Agent, shall deliver to Agent, on behalf of the Lenders, any and all evidence of
ownership of any such property and shall take all such action as may be
reasonably necessary to perfect Agent's security interest in such property. Each
Lender (by any of its officers, employees or agents, but only upon authorization
of an officer of such Lender) shall have the right, at any time or times during
Borrower's usual business hours, to inspect the Collateral, all records related
thereto (and to make extracts from such records) and the premises upon which any
of the Collateral is located, to discuss Borrower's affairs and finances with
any accountant, account debtor or creditor of Borrower and to verify the amount,
quality, quantity, value and condition of, or any other matter relating to, the
Collateral. Each Borrower shall perform all reasonable acts and execute or cause
to be executed all documents, including, without limitation, the Assignment of
Patents and the Assignment of Trademarks for filing with the United States
Patent and Trademark Office, state
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offices and corresponding foreign registries as Agent reasonably deems necessary
or desirable, to establish, perfect, record and maintain the security interest
in the Intellectual Property and the goodwill symbolized thereby (whether now
existing or hereafter acquired).
Section 3.3 Release of Collateral. Upon Borrowers' full performance of
the Obligations Agent and Lenders shall release their interest in all
Collateral. Upon any sale of Collateral permitted pursuant to Section 8.4, Agent
shall release its interest in the portion of the Collateral being sold, without
prejudice to the continuation of its lien on any other Collateral.
ARTICLE 4
CONDITIONS PRECEDENT TO DISBURSEMENTS
Section 4.1 Conditions Precedent to Initial Closing. On or prior to the
Closing Date, each of the following conditions precedent shall have been
satisfied:
(a) Certified Copies of Charter Documents and Bylaws. (1)
Agent and each Lender shall have received from each Borrower that is a
corporation (i) a copy, certified by the Secretary or an Assistant Secretary of
such Borrower to be true and complete on and as of the Closing Date, of the
charter or other organization documents and by-laws of such Borrower as in
effect on the Closing Date (together with all, if any, amendments thereto); and
(ii) the charter or other organization documents of such Borrower certified by
the applicable Secretary of State.
(2) Agent and each Lender shall have received from
each Borrower that is a partnership (i) a copy, certified by a general partner
of such Person to be true and complete on and as of the Closing Date, of its
partnership agreement as in effect (together with all, if any, amendments
thereto) and (ii) a copy of its Certificate of Partnership, as amended to date,
certified as of a recent date by the applicable Secretary of State.
(b) Proof of Corporate Authority. (1) Agent and each Lender
shall have received from each Borrower that is a partnership copies, certified
by a Responsible Officer of such Person to be true and complete on and as of the
Closing Date, of records of all action taken by such Person, including without
limitation, all consents required by any limited partner, to authorize (i) the
execution and delivery of this Agreement and the other Loan Documents to which
it is or is to become a party as contemplated or required by this Agreement;
(ii) its performance of all of its obligations under each of such documents; and
(iii) the making by such Borrower of the borrowings contemplated hereby. Agent
shall have received from the applicable Secretary of State a Certificate of Good
Standing of recent date certifying the existence and good standing of each
Borrower under the laws of the state of such Borrower and certificates
evidencing such Borrower's good standing in each state where such Borrower is
required to qualify to conduct business.
(2) Agent and Lender shall have received from each
Borrower that is a corporation, all necessary consents to authority, copies,
certified by a Responsible Officer thereof to be true and complete on and as of
the Closing Date, of records and action taken by such Person, to authorize (i)
the execution and delivery of this Agreement and other the Loan Documents to
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which it is or is to become a party as contemplated or required by this
Agreement; (ii) its performance of all of its obligations under each of such
documents; and (iii) the making by such Borrower of the borrowings contemplated
hereby. Agent shall have received from the applicable Secretary of State a
Certificate of Good Standing of recent date certifying the existence and good
standing of each Borrower under the laws of the state where such Borrower is
incorporated and certificates evidencing each Borrower's good standing in each
state where such Borrower is required to qualify to conduct business.
(c) Authority to execute Pledge Agreements. Each Person
executing a Pledge Agreement which is not an individual shall deliver to Agent
such evidence as Agent shall reasonably deem necessary to evidence the authority
of such Person to execute and deliver each such Pledge Agreement and to perform
its respective obligations thereunder.
(d) Incumbency Certificate. Agent and each Lender shall have
received from each Borrower an incumbency certificate, dated as of the Closing
Date, signed by a Responsible Officer of such Borrower and giving the name and
bearing a specimen signature of each individual who shall be authorized (i) to
sign, in the name and on behalf of such Borrower, each of the Loan Documents to
which such Borrower is or is to become a party on the Closing Date; and (ii) to
give notices and to take other action on behalf of such Borrower under the Loan
Documents.
(e) Officers' Certificates. Agent and each Lender shall have
received from each Borrower a certificate dated as of the Closing Date, signed
by a Responsible Officer and certifying that each of the representations and
warranties made by and on behalf of such Borrower to Agent and each Lender in
this Agreement and in the other Loan Documents was true and correct when made,
and is true and correct on and as of the Closing Date.
(f) Loan Documents, etc. (i) Each of the Loan Documents shall
have been duly and properly authorized, executed and delivered by each Borrower
and shall be in full force and effect on and as of the Closing Date; (ii)
executed originals of each of the Revolving Credit Notes shall have been
delivered to each Lender in accordance with their respective Credit Commitments;
and (iii) executed originals or (as the case may be) executed counterparts of
each of the other Loan Documents shall have been delivered to Agent and/or each
Lender.
(g) Actions to Perfect Liens. Agent shall have received
evidence in form and substance satisfactory to it that all filings, recordings,
registrations and other actions, including without limitation, the filing of
duly executed financing statements on Form UCC-1, necessary or, in the opinion
of Agent, desirable to perfect the Liens created by the Security Documents shall
have been completed.
(h) Insurance. Agent shall have received copies of
certificates of insurance executed by each insurer or its authorized agent
evidencing the insurance required to be maintained by Borrower pursuant to
Section 6.2(b).
(i) Flood Hazard Determination. Agent shall have received, at
Borrowers' expense, a Standard Flood Hazard Determination Form issued or
certified by a Person satisfactory
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to Agent for each structure or improvement that is located on Real Estate owned
by a Borrower. Further, in the event such Standard Flood Hazard Determination
Form evidences that the subject structure or improvement is located in a special
flood hazard, as defined by FEMA, Borrowers shall deliver to Agent and Lenders
evidence of appropriate flood insurance in amounts and under such conditions as
identified in Section 6.2(b) hereof.
(j) Mortgage and Title Insurance. The following documents each
of which shall be executed (and, where appropriate, acknowledged) by Persons
reasonably satisfactory to the Agent:
(i) Mortgages on all Real Estate excluding those
identified on Schedule 3.1, in each case duly executed and delivered by
Borrowers (and where appropriate by the trustee thereunder) in
recordable form (in such number of copies as the Agent shall have
reasonably requested), together with such Uniform Commercial Code
financing statements as may be needed in order to perfect the security
interests granted by each of the Mortgages in any fixtures and other
property therein described which may be subject to the Uniform
Commercial Code, in each case appropriately completed and duly executed
and in proper form for filing in all offices in which required;
(ii) copies of all title insurance policies in the
name of a Borrower on any real property owned by a Borrower.
In addition, Borrowers shall have paid an amount equal to all mortgage and
mortgage recording taxes, intangibles taxes, stamp taxes and other taxes payable
in connection with the execution and delivery of the Mortgages and the
obligations secured thereby and the recording of the Mortgages in the
appropriate land offices; provided, however, that Borrowers shall not pay or be
responsible for mortgage recording taxes payable to or in jurisdictions where
such payments by Borrowers are prohibited by law.
(k) Legality of Transactions. No change in applicable law
shall have occurred as a consequence of which it shall have become and continue
to be unlawful (i) for Agent or any Lender to perform any of its agreements or
obligations under any of the Loan Documents to which it is a party on the
Closing Date; or (ii) for any Borrower to perform any of its agreements or
obligations under any of the Loan Documents to which it is a party on the
Closing Date.
(l) Performance, Etc. Each Borrower shall have duly and
properly performed, complied with and observed each of its covenants, agreements
and obligations contained in each of the Loan Documents to which such Borrower
is a party or by which such Borrower is bound on the Closing Date. No event
shall have occurred on or prior to the Closing Date, and no condition shall
exist on the Closing Date, which constitutes a Default or an Event of Default.
(m) Proceedings and Documents. All partnership, corporate,
governmental and other proceedings in connection with the transactions
contemplated by this Agreement, each of the other Loan Documents and all
instruments and documents incidental thereto shall be in form and substance
satisfactory to Agent and Lenders, and Agent and each Lender shall have received
all such
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counterpart originals or certified or other copies of all such instruments and
documents as Agent and each Lender shall have requested.
(n) Compliance with Laws. The borrowings made under this
Agreement are and shall be in compliance with the requirements of all applicable
laws, regulations, rules and orders, including without limitation, the
Environmental Laws and the requirements imposed by the Board of Governors of the
Federal Reserve System under Regulations U, G and X, and by the SEC.
(o) Legal Opinion. Agent and Lenders shall have received a
written legal opinion, addressed to Agent and each Lender and dated as of the
Closing Date, from legal counsel for Borrowers, which shall be substantially in
the form of Exhibit H hereto and which legal opinion shall otherwise be
acceptable to Agent and each Lender.
(p) Fees and Expenses. Borrowers shall have reimbursed Agent
for all reasonable out-of-pocket fees, expenses and disbursements which shall
have been incurred by Agent through the Closing Date in connection with the
preparation, negotiation, review, execution and delivery of the Loan Documents
and the handling of any other matters incidental thereto, including, without
limitation, legal fees, recording fees, filing fees and other related expenses.
Each Lender agrees that it shall be responsible for any fees incurred by it in
connection with the negotiation, review, execution and delivery of the Loan
Documents.
(q) Payment of Closing Fee. Borrowers shall have paid to Agent
a fee equal to three-quarters of one percent (0.75%) of the Maximum Revolving
Commitment.
(r) Equity Transaction, Senior Debt Offering and
Recapitalization. Holdings and Romacorp shall have closed, or be prepared to
simultaneously close with the closing of the Loans, the Equity Transaction, the
Senior Debt Offering and the Recapitalization on terms and conditions
satisfactory to Agent and each Lender.
(s) Payment of Indebtedness. Agent shall have received from
Borrowers, reasonably satisfactory to Agent, evidence of the repayment of all of
Borrowers' Indebtedness.
(t) Employment Agreement. Agent shall have received an
executed copy of the Employment Agreement in form and substance satisfactory to
Agent.
(u) Lien Searches. Agent shall have received the results of a
recent search by a Person satisfactory to Agent, of the UCC, judgment and tax
lien filings which may have been filed with respect to personal property of
Borrowers or any Subsidiaries in the jurisdictions listed on Schedule 5.22, and
the results of such search shall be satisfactory to Agent.
(v) Changes; None Adverse. From the date of the Current
Financial Statements referred to in Section 5.5 of this Agreement to the Closing
Date, no changes shall have occurred in the assets, liabilities, financial
condition, business or operations of Borrowers which, individually or in the
aggregate, are materially adverse to any Borrower.
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(w) Financial Statements. Each Lender shall have received the
financial statements referred to in Section 5.5, certified by an officer of the
applicable Borrower and each Lender shall have been satisfied that such
financial statements accurately reflect the financial status and condition of
the applicable Borrower.
(x) Acquisition Costs. The total price of Romacorp, including
all associated fees and expenses, shall not exceed One Hundred Fifteen Million
Dollars ($115,000,000).
Section 4.2 Conditions Precedent to Subsequent Loans. The obligation of
the Lenders to make any Loan shall be subject to the satisfaction, prior thereto
or concurrently therewith, of each of the following conditions precedent:
(a) Legality of Transactions. It shall not be unlawful (a) for
any Lender or the Agent to perform any of its agreements or obligations under
any of the Loan Documents to which such Person is a party on the Draw Date of
such Loan or (b) for Borrowers to perform any of its material agreements or
obligations under any of the Loan Documents.
(b) Representations and Warranties. Each of the
representations and warranties made by or on behalf of the Borrowers to the
Lenders or the Agent in this Agreement or any other Loan Document (a) shall be
true and correct in all material respects when made and (b) shall, for all
purposes of this Agreement, be deemed to be repeated on and as of the date of
Borrower's request for such Loan, as the case may be, and shall be true and
correct in all material respects as of each of such dates, except, in each case,
as affected by the consummation of the transactions contemplated by the Loan
Documents.
(c) No Default. No event shall have occurred on or prior to
such date and be continuing on such date, and no condition shall exist on such
date which constitutes a Default or Event of Default.
(d) Maximum Credit. The making of such Loan shall not result
in the sum of all outstanding Loans exceeding the Maximum Revolving Commitment.
(e) Compliance Certificate. Agent and each Lender shall have
received from each Borrower a Compliance Certificate, dated as of the date of
such Loan and signed by a Responsible Officer.
ARTICLE 5
GENERAL REPRESENTATIONS AND WARRANTIES
Each Borrower represents and warrants to Agent and each Lender as
follows:
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Section 5.1 Existence, Etc.
(a) Each Borrower (i) is duly organized, validly existing and
in good standing under the laws of the state of its respective organization; and
(ii) has full corporate power and authority and full legal right to own or to
hold under lease its respective Property and to carry on its respective
businesses. Each Borrower is qualified and licensed in each jurisdiction wherein
the character of the Property owned or held under lease by it, or the nature of
its business make such qualification necessary or advisable. Each Borrower that
is a corporation is currently qualified in good standing as a foreign
corporation in each jurisdiction set forth on Schedule 5.1(a) and each Borrower
that is a partnership is currently qualified in good standing as a foreign
partnership in each jurisdiction set forth on Schedule 5.1(a).
(b) The authorized Capital Stock of each Borrower and each
Subsidiary of a Borrower is as set forth on Schedule 5.1(b). All issued and
outstanding shares of Capital Stock of each Borrower and each Subsidiary of a
Borrower are duly authorized and validly issued, are fully paid and
nonassessable and such shares were issued in compliance with all applicable
state and federal laws concerning the issuance of securities. Except for the
liens of the Pledge Agreements, there are no outstanding options, rights or
warrants issued by any Borrower for the acquisition of shares of the Capital
Stock of any Borrower, nor any outstanding securities or obligations convertible
into such shares, nor any agreements by any Borrower to issue or sell such
shares. There are no options, sale agreements, pledges (other than the Pledge
Agreements in favor of the Agent), proxies, voting trusts, powers of attorney or
any other agreements or instruments binding upon any of Borrowers' shareholders
with respect to beneficial or record ownership of or voting rights with respect
to shares of the Capital Stock of any Borrower.
(c) Borrowers have no Subsidiaries except as set forth on
Schedule 5.1(b). All the Capital Stock of each Subsidiary is free and clear of
all Liens other than those in favor of Agent. Each Subsidiary is duly organized,
validly existing and in good standing under the laws of the state of its
organization, and has full corporate power and authority and full legal right to
own or to hold under lease its Property and to carry on its business. Each
Subsidiary is qualified and licensed in each jurisdiction wherein the character
of the Property owned or held under lease by it, or the nature of its business
makes such qualification necessary or advisable. Each Subsidiary which is a
corporation is currently qualified in good standing as a foreign corporation in
each jurisdiction set forth on Schedule 5.1(b) and each Subsidiary which is a
partnership is currently qualified in good standing as a foreign partnership in
each jurisdiction set forth on Schedule 5.1(b).
(d) Except for Capital Stock of Subsidiaries and as otherwise
set forth on Schedule 5.1(d) hereto, , (i) no Borrower owns or holds of record
(whether directly or indirectly) any shares of any class in the capital of any
corporation, and (ii) no Borrower owns or holds (whether directly or indirectly)
any legal and/or beneficial equity interest in any partnership, business trust
or joint venture or in any other unincorporated trade or business enterprise.
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Section 5.2 Authority, Etc.
(a) Each Borrower has adequate power and authority and has
full legal right to enter into this Agreement and each of the other Loan
Documents, and to perform, observe and comply with all of its agreements and
obligations under each of such documents, including, without limitation the
borrowings contemplated hereby.
(b) The execution and delivery by Borrowers of each of the
Loan Documents, the performance by Borrowers of all of their agreements and
obligations under such documents, and the making by Borrowers of the borrowings
contemplated by this Agreement, have been duly authorized by all necessary
action on the part of Borrowers and do not and will not (i) violate any
provision of its charter documents or by-laws (each as in effect from time to
time); (ii) conflict with, or result in a breach of the terms, conditions or
provisions of, or constitute a default under, or result in the creation of any
Lien upon any of the Property of Borrower under any agreement, trust deed,
indenture, mortgage or other material instrument to which Borrower is a party or
by which Borrower or any other Property of Borrower is bound or affected; (iii)
violate or contravene any provision of any law, rule or regulation (including,
without limitation, Regulations G, T, U or X of the Board of Governors of the
Federal Reserve System) or any order, ruling or interpretation thereunder or any
decree, order or judgment of any court or governmental or regulatory authority,
bureau, agency or official (all as from time to time in effect and applicable to
any Borrower); or (iv) require any waivers, consents or approvals by any of the
creditors or trustees for creditors of any Borrower or any other Person.
(c) Other than filings required to perfect the security
interests granted hereunder, no approval, consent, order, authorization or
license by, or giving notice to, or taking any other action with respect to, any
governmental or regulatory authority or agency is required, under any provision
of any applicable law:
(i) for the execution and delivery by Borrowers of
this Agreement, each Revolving Credit Note, and the other Loan
Documents, for the performance by Borrowers of any of the agreements
and obligations thereunder or for the making by Borrowers of the
borrowing contemplated by this Agreement or for the conduct by
Borrowers of its business; or
(ii) to ensure the continuing legality, validity,
binding effect, enforceability or admissibility in evidence of this
Agreement, the Revolving Credit Notes and the other Loan Documents.
Section 5.3 Binding Effect of Documents, Etc. Each of the Loan
Documents which each Borrower has or is to have executed and delivered as
contemplated and required to be executed and delivered as of the Closing Date by
this Agreement has been so executed and delivered by each Borrower, and each
such Loan Document is and will be in full force and effect. The agreements and
obligations of such Borrower contained in each such Loan Document constitute or
shall constitute legal, valid and binding obligations of such Borrower,
enforceable against each Borrower in accordance with its respective terms.
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Section 5.4 No Events of Default, Etc.
(a) No event has occurred and is continuing, and no condition
exists, which constitutes a Default or an Event of Default.
(b) No default by a Borrower and no accrued right of
rescission, cancellation or termination on the part of a Borrower, exists under
this Agreement or any of the other Loan Documents.
Section 5.5 Financial Statements. The balance sheets and other
financial statements of Borrowers dated March 29, 1998 previously delivered to
Agent ("Current Financial Statements") have been prepared in accordance with
GAAP except as otherwise indicated in the notes to such financial statements and
subject in the case of unaudited statements to changes resulting from year-end
adjustments. The balance sheets contained in the Current Financial Statements
present fairly the financial condition of the Borrowers as of the dates thereof
in accordance with GAAP. The statements of income contained in the Current
Financial Statements present fairly the results of operations of Borrowers for
the Fiscal Periods then ended in accordance with GAAP. There are no material
liabilities or obligations, secured or unsecured (whether accrued, absolute or
actual, contingent or otherwise), which were not reflected in the audited
balance sheets of Borrowers or that as at such date or in the footnotes thereto,
and which should, in accordance with GAAP, have been reflected in such balance
sheets.
Section 5.6 Changes; None Adverse. No changes have occurred in the
assets, liabilities or financial condition of the Borrowers from those reflected
in the most recent balance sheet referred to in Section 5.5 hereof (the "Current
Balance Sheet") which, individually or in the aggregate, have been materially
adverse. Since the date of Current Balance Sheet, there has been no material
adverse development in the business or in the operations of Borrowers.
Section 5.7 Title to Assets; Material Leases. Each Borrower has good,
sufficient and legal title to, or leasehold interest in, all the Property and
assets reflected in the Current Balance Sheet. Each Borrower enjoys peaceful and
undisturbed possession of all Property subject to Material Leases and all such
Material Leases are valid and in full force and effect. All Material Leases in
effect on the Closing Date are set forth on Schedule 5.7.
Section 5.8 Intellectual Property.
(a) Schedule 5.8 sets forth a complete and correct list of all
Patents and Trademarks owned by Borrowers on the date hereof which are material
to Borrowers' business or financial condition. Borrowers own and possess the
right to use any Patent or Trademark listed on said Schedule 5.8 and all
registrations listed on said Schedule 5.8 are valid and in full force and
effect. Borrowers own and possesses the right to use all registered Patents and
Trademarks. Borrowers have done nothing to authorize or enable any other Person
to use any Patent or Trademark listed on said Schedule 5.8 except as provided
for in the franchise agreements and the development agreements listed in
Schedule 5.24.
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(b) Schedule 5.8 sets forth a complete and correct list of all
licenses and other user agreements included in the Intellectual Property on the
date hereof.
(c) (i) There is no violation by others of any right of
Borrowers with respect to any registered Patent or Trademark listed on Schedule
5.8; (ii) to Borrowers' knowledge, Borrowers are not infringing in any respect
upon any Patent or Trademark of any other Person; (iii) no material proceedings
have been instituted or are pending against any Borrower or, to Borrowers'
knowledge, threatened, and no claim against any Borrower has been received by
Borrowers, alleging any such violation.
Section 5.9 Indebtedness for Borrowed Money. No Indebtedness of any
Borrower is secured by or otherwise benefits from any Lien on or with respect to
the whole or any part of Borrowers' properties or assets, present or future.
There exists no default or event or condition which, with the giving of notice
or passage of time, or both, would constitute a default under the provisions of
any instrument evidencing such Indebtedness or of any agreement relating thereto
which would interfere with the priority of Agent's lien on the Collateral.
Section 5.10 Litigation. There is no pending, or to Borrowers'
knowledge, threatened material action, suit, proceeding or investigation before
any court, governmental or regulatory authority, agency, commission or official,
board of arbitration or arbitrator against Borrowers or in which any Borrower is
a participant ("Litigation"). There are no proceedings pending or, to Borrowers'
knowledge, threatened against any Borrower which call into question the validity
or enforceability of any of the Loan Documents.
Section 5.11 No Materially Adverse Contracts. No Borrower is a party to
or bound by any forward purchase contract, futures contract, covenant not to
compete, unconditional purchase, take or pay or other contracts, agreements or
instruments (whether written or oral) which restricts its ability to conduct its
business or, either individually or in the aggregate has or could reasonably be
expected to have a Material Adverse Effect.
Section 5.12 Taxes and Tax Returns, Etc.
(a) Each Borrower has timely filed (inclusive of any permitted
extensions) or had filed on its behalf with the appropriate taxing authorities
all material returns (including without limitation, material information returns
and other material information) in respect of taxes required to be filed through
the date hereof. The information filed was complete and accurate in all material
respects at the time of filing. No Borrower nor any group of which Borrower is
or was the common parent has requested any extension of time within which to
file returns (including, without limitation, information returns) in respect of
any taxes other than routine extensions of time for filing returns which have
not involved the payment of material taxes (other than taxes immaterial in
amount) beyond the due date thereof.
(b) All taxes and assessments in respect of periods beginning
prior to the date hereof have been timely paid, or will be timely paid, or an
adequate reserve has been established therefor, as reflected in the most recent
financial statements of Borrowers. No Borrower has any liability for taxes in
excess of the amounts so paid or reserves so established.
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(c) No deficiencies for taxes have been claimed, proposed or
assessed by any taxing authority or other governmental authority against any
Borrower nor any Subsidiary of a Borrower and no tax liens have been filed.
Except as otherwise set forth on Schedule 5.12(c) hereto, there are no pending
or threatened audits, investigations or claims for or relating to any liability
in respect to taxes, and there are no matters under discussion with any taxing
authorities or other governmental authorities with respect to taxes which are
likely to result in a additional liability for taxes. No extension of a statute
of limitations relating to taxes or assessments is in effect with respect to any
Borrower.
(d) Neither Borrowers nor any Subsidiary of a Borrower has any
obligation under any tax sharing agreement or agreement regarding payments in
lieu of taxes.
Section 5.13 Contracts with Affiliates, Etc.
(a) Except as permitted by Section 8.11 hereof, no Borrower is
a party to or otherwise bound by any written agreements, instruments or
contracts (whether written or oral) with any Affiliate other than the agreements
listed on Schedule 5.13 hereto.
(b) There is no Indebtedness for Borrowed Money owing by any
Borrower to any Affiliate nor is there Indebtedness for Borrowed Money owing by
any Affiliate to any Borrower.
Section 5.14 Employee Benefit Plans.
(a) Each Borrower and its ERISA Affiliates are in compliance
in all material respects with any applicable provisions of ERISA and the
regulations thereunder and of the Internal Revenue Code of 1986, as amended,
with respect to all Employee Benefit Plans.
(b) No Termination Event has occurred or is reasonably
expected to occur with respect to any Guaranteed Pension Plan.
(c) The actuarial present value of all benefit commitments
under each Guaranteed Pension Plan does not exceed the assets of that Plan.
(d) No Borrower nor any of its ERISA Affiliates has incurred
or reasonably expects to incur any withdrawal liability under ERISA to
Multiemployer Plans.
As used in this Section 5.14, the terms "actuarial present value" and
"benefit commitments" shall have the meanings specified in Section 4001 of
ERISA.
Section 5.15 Governmental Regulation. No Borrower is a "public utility
company", a "holding company" or a "subsidiary" or an "affiliate" of a "holding
company," as such terms are defined in the federal Public Utility Holding
Company Act of 1935, as amended. No Borrower is an "investment company" or a
company "controlled" by an "investment company," as such terms are defined in
the Federal Investment Company Act of 1940, as amended. No Borrower is subject
to regulation under the Public Utility Holding Company Xxx 0000, the Federal
Power Act, the
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Interstate Commerce Act or the Investment Company Act of 1940 or to any federal
or state statute or regulation limiting its ability to incur Indebtedness for
Borrowed Money.
Section 5.16 Securities Activities. No Borrower is engaged in the
business of extending credit for the purpose of purchasing or carrying any
"margin security" or "margin stock" as such terms are used in Regulation G, T, U
and X of the Board of Governors of the Federal Reserve System.
Section 5.17 Disclosure. Neither this Agreement, any other Loan
Document, nor any other document, certificate or written statement furnished to
Agent or any Lender by or on behalf of Borrowers for use in connection with the
transactions contemplated by this Agreement, contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained therein not misleading as of the date of such document,
certificate or other statement. There is no fact known to any Borrower which has
or which could reasonably be expected in the future to have a Material Adverse
Effect.
Section 5.18 No Material Default. No Borrower is in default under any
material order, writ, judgment, injunction, decree, statute or governmental
rule, indenture, agreement, contract, lease or other instrument or contract
applicable to it, which default would have a Material Adverse Effect or
adversely effect any Borrower's performance of any covenants or conditions
respecting any of its Indebtedness, and no holder of any Indebtedness of any
Borrower has given notice of any asserted default thereunder, and no liquidation
or dissolution of any Borrower and no receivership, insolvency, bankruptcy,
reorganization or other similar proceedings relative to any Borrower or its
Property is pending or is threatened.
Section 5.19 Environmental Conditions.
(a) Each Borrower and its Affiliates have obtained all
necessary and material permits, licenses, variances, clearances and all other
necessary approvals (collectively the "EPA Permits") for use of the Real Estate
and the operation and conduct of its business from all applicable federal,
state, and local governmental authorities, utility companies or
development-related entities including, but not limited to, any and all
appropriate federal or state environmental protection agencies and other county
or city departments, public water works and public utilities in regard to the
use of the Real Estate and the operation and conduct of its business, and the
handling, transporting, treating, storage, disposal, discharge, or Release of
Hazardous Substances, if any, into, on or from the environment (including, but
not limited to, any air, water, or soil).
Each issued EPA Permit is in full force and effect, has not expired or
been suspended, denied or revoked, and is not under challenge by any Person.
Each Borrower is in compliance with each issued EPA Permit.
(b) To the knowledge of any Borrower, neither any Borrower,
the Real Estate, nor any other Property owned or leased by a Borrower is subject
to any material private or governmental litigation, threatened litigation, Lien
or judicial or administrative notice, order or action relating to Hazardous
Substances or environmental problems, impairments or liabilities with respect to
the Real Estate or such other Property.
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(c) There has been no Release (as defined in Section 101(22)
of CERCLA) into, on or from any Real Estate and no Hazardous Substances (except
"Household Waste" as that term is defined at 40 C.F.R. 261.4(b)(1) (1990)) are
located on or have been treated, stored, processed, disposed of, handled,
transported to or from, disposed of upon the Real Estate during Borrower's
ownership or into, upon or from the environment including, but not limited to,
any air, water, or soil. No Borrower has allowed any Hazardous Substance to
exist or be treated, stored, disposed, Released, located, discharged, possessed,
managed, processed, or otherwise handled on the Real Estate or in the operation
or conduct of its respective businesses in violation of Environmental Laws, and
complied in all material respects with all Environmental Laws affecting the Real
Estate.
(d) Borrowers and their Affiliates do not and shall not
transport, in any manner, any Hazardous Substances except in the ordinary course
of business in compliance with Environmental Laws.
(e) No Borrower has received written notice of any
circumstances which would result in any material obligation under any
Environmental Law to investigate or remediate any Hazardous Substances in, on or
under the Real Estate.
Section 5.20 Licenses and Permits. Each Borrower owns or possesses all
material Licenses and Permits and rights with respect thereto, necessary for the
conduct of its business as presently conducted and proposed to be conducted,
without any known conflict with the rights of others, and, in each case, free of
any Lien not permitted by Section 8.7 of this Agreement. All of the foregoing
are in full force and effect, and each Borrower is in material compliance with
the foregoing without any known material conflict with the valid rights of
others. To the Borrowers' knowledge, no event has occurred which permits, or
after notice or lapse of time or both would permit, the revocation or
termination of any such License or Permit, or affect the rights of such Borrower
thereunder.
Section 5.21 Special Flood Hazard Determination. Except as set forth on
Schedule 5.21 none of the Real Estate owned by Borrowers is located within a
hundred year flood plain or an area identified by FEMA as being in a special
flood hazard area.
Section 5.22 General Collateral Representation.
(a) Each Borrower is the sole owner of and has good and
marketable title to its Collateral, free from all Liens, in favor of any Person
other than the Agent and except Permitted Liens, and has full right and power to
grant the Agent a security interest therein. All information furnished to the
Agent concerning the Collateral is and will be complete, accurate and correct in
all material respects when furnished.
(b) No security agreement, UCC Financing Statement, equivalent
security or Lien instrument or continuation statement covering all or any part
of the Collateral is on file or of record in any public office, except such as
may have been filed (i) by Borrowers in favor of Agent pursuant to this
Agreement, or (ii) in respect of the items of Collateral subject to the
Permitted Liens.
(c) The provisions of this Agreement are sufficient to create
in favor of the Agent, as of the Closing Date, a valid and continuing lien on,
and first security interest in, the types of the
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Collateral hereunder in which a security interest may be created under Article 9
of the UCC. UCC Financing Statements have been duly executed on behalf of
Borrowers and the description of such Collateral set forth therein is sufficient
to perfect first priority security interests in such Collateral in which a
security interest may be perfected by the filing of UCC Financing Statements.
When such UCC Financing Statements are duly filed in the filing offices listed
on Schedule 5.22, and the requisite filing fees are paid, such filings will be
sufficient to perfect security interests in such of the Collateral described in
the UCC Financing Statements as can be perfected by filing (other than Equipment
affixed to real property so as to become fixtures), which perfected security
interests will be prior to all other Liens in favor of others and rights of
others, enforceable as such as against creditors of and purchasers from
Borrowers (other than purchasers of Inventory in the ordinary course) and as
against any owner of the Real Estate where any of the Equipment is located and
as against any purchaser of such Real Estate and any present or future creditor
obtaining a Lien on such real property.
(d) Upon delivery to and possession by Agent of the Pledged
Interests pursuant to the terms of the Pledge Agreements, Agent shall possess a
valid, first priority security interest in such Pledged Interests in accordance
with Article 9 of the UCC; and
(e) No Person now having possession or control of any of the
Collateral consisting of Inventory or Equipment has issued, in receipt therefor,
a negotiable xxxx of lading, warehouse receipt or other document of title.
Section 5.23 Year 2000 Compatibility. (a) Each Borrower represents and
warrants that to the best of its knowledge either it or NPC has developed and
begun to implement a plan to modify its date-sensitive hardware, software,
processes, procedures, interfaces and similar operating systems used within such
Borrower's operations so that such systems will not abruptly end or provide
invalid or incorrect results during the operation of such Borrower's business on
or after January 1, 2000, including, but not limited to date data century
recognition, calculations that accommodate same century and multi-century
formulas and date values, date data interface values that reflect the century,
and which include year 2000 leap year calculations.
Section 5.24 Franchises. Schedule 5.24 sets forth a complete and
correct list of all franchise agreements and development agreements to which any
Borrower is a party on the date hereof.
ARTICLE 6
AFFIRMATIVE COVENANTS OF BORROWER
Each Borrower covenants with and warrants to Agent and each Lender
that, from and after the Closing Date and until all of the Obligations are paid
and satisfied in full except as otherwise expressly consented to in writing by
the Requisite Lenders (unless the context otherwise requires):
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Section 6.1 Reports and Other Information.
(a) Borrowers shall provide to Agent as soon as available, and
in any event within thirty (30) days after the close of each Fiscal Period of
Holdings, balance sheets of Holdings as of the end of such Fiscal Period and
Consolidated statements of income and statements of cash flow of Holdings for
such Fiscal Period and for the period commencing at the end of the previous
fiscal year and ending with the end of such Fiscal Period, certified by the
chief financial officer, principal accounting officer or chief executive officer
of Holdings to the effect that such financial statements, while not examined by
independent public accountants, reflect in his opinion and in the opinion of
senior management of Holdings, all adjustments necessary to present fairly the
Consolidated financial position of Holdings as at the end of such Fiscal Period
and the results of its operations for the Fiscal Period then ended in conformity
with GAAP consistently applied, subject only to year-end and audit adjustments,
which statements shall be delivered at the end of each Fiscal Period, together
with a certificate of such officer stating that as of the date of such
certificate that, to the best of his knowledge, after reasonable inquiry, no
event has occurred which constitutes an Event of Default or would constitute an
Event of Default with the giving of notice or the lapse of time or both, or, if
an Event of Default or such an event has occurred and is continuing, a statement
as to the nature thereof and the action which Holdings has taken or proposes to
take with respect thereto.
(b) Borrowers shall provide to the Agent as soon as available,
and in any event within forty-five (45) days after the close of each quarter of
each fiscal year of Holdings, balance sheets of Holdings as of the end of such
quarter and Consolidated statements of income and statements of cash flow of
Holdings and its divisions and Subsidiaries for such quarter and for the period
commencing at the end of the previous fiscal year and ending with the end of
such quarter, certified by the chief financial officer, principal accounting
officer or chief executive officer of Holdings to the effect that such financial
statements, while not examined by independent public accountants, reflect in his
opinion all adjustments necessary to present fairly the financial position of
Holdings as at the end of such quarter and the results of its operations for the
quarter then ended in conformity with GAAP consistently applied, subject only to
year-end and audit adjustments, which statements shall be delivered at the end
of each fiscal quarter, together with a certificate of such officer stating that
as of the date of such certificate that, to the best of his knowledge, after
reasonable inquiry, no event has occurred which constitutes a Default or an
Event of Default or would constitute a Default or an Event of Default with the
giving of notice or the lapse of time or both, or, if a Default or an Event of
Default or such an event has occurred and is continuing, a statement as to the
nature thereof and the action which Holdings has taken or proposes to take with
respect thereto, and further setting out in such detail as is reasonably
required by the Lenders Borrowers' compliance with the requirements of Article 7
and Sections 8.7 and 8.10 hereof.
(c) Borrowers shall provide to the Agent as soon as available
and in any event within ninety (90) days after the end of each fiscal year of
Holdings a copy of the annual financial statements for such year for Holdings,
including therein a copy of the balance sheets of Holdings as of the end of such
fiscal year and consolidated statements of income and statements of cash flow
and statements of shareholders' equity of Holdings and its divisions and
Subsidiaries, certified without qualification by the Accountants, together with
a certificate of the chief financial officer, principal accounting officer or
chief executive officer of Holdings stating that, as of the date of such
certificate, to the best of his knowledge and after reasonable inquiry, no event
has occurred which
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constitutes a Default or an Event of Default or, if a Default or an Event of
Default or such an event has occurred and is continuing, a statement as to the
nature thereof and the action which Holdings has taken or proposes to take with
respect thereto and further setting out in such detail as is reasonably required
by the Lenders Holdings's compliance with the requirements of Article 7 and
Sections 8.7 and 8.10 hereof.
(d) Together with each delivery of financial statements of
Holdings pursuant to Sections 6.1(b) or 6.1(c), Borrowers will deliver a
management report: (1) describing the operations and financial condition of
Holdings for the period then ended and the portion of the current fiscal year
then elapsed (or for the fiscal year then ended in the case of year-end
financials); (2) setting forth in comparative form the corresponding figures for
the corresponding periods of the previous fiscal year and the corresponding
figures from the most recent Projections for the current fiscal year delivered
to the Agent pursuant to Section 6.1(f); and (3) discussing the reasons for any
significant variations. The information above shall be presented in reasonable
detail and shall be certified by the chief financial officer or controller of
Holdings to the effect that such information fairly presents the results of
operations and financial condition of Holdings as at the dates and for the
periods indicated.
(e) Together with each delivery of financial statements of
Holdings pursuant to Sections 6.1(b) or 6.1(c), Borrowers will deliver a
management report updating Borrowers' actions during the preceding quarter to
ensure Year 2000 compatibility, and the actions they have taken with respect to
Year 2000 compatibility of all of its material suppliers.
(f) As soon as available and in any event not later than the
end of each fiscal year, Borrowers will deliver Projections for the forthcoming
fiscal year, either quarterly or for each Fiscal Period.
(g) Borrowers shall provide to the Agent, promptly after
sending or filing thereof, copies of all reports and communications which
Holdings sends to its securityholders, and copies of all reports and
registration statements which Holdings files with the Securities and Exchange
Commission.
(h) Each Borrower shall provide to the Agent as soon as
possible, and in any event within fifteen (15) days after a Borrower knows or
has reason to know that any Termination Event with respect to any Plan has
occurred, a statement of the chief financial officer or treasurer of such
Borrower describing such Termination Event and the action which such Borrower
proposes to take with respect thereto.
(i) Each Borrower shall provide to the Agent as soon as
possible, and in any event within five (5) days after the occurrence of a
Default or Event of Default, continuing on the date of such statement, a
statement of the chief financial officer or treasurer of such Borrower setting
forth the details of such Default or Event of Default, and the action which
Borrower proposes to take with respect thereto.
(j) If (and on each occasion that) any of the following events
shall occur:
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(i) any Loan Document shall at any time be
terminated, canceled or rescinded for any reason whatever; or
(ii) any action at law, suit in equity or other legal
proceeding shall at any time be commenced or threatened in writing by
any Person (A) to terminate, cancel or rescind any Loan Document, or
(B) to enforce any other Person's performance or observance of or
compliance with any covenants, agreements or obligations under any Loan
Document; or
(iii) any Person which is a party to or otherwise
bound by any Loan Document shall fail or refuse to perform, comply with
or observe or shall otherwise breach any one or more of the material
covenants, agreements or obligations under such Loan Document;
then Borrowers will promptly (and, in any event, within five (5) Business Days)
after Borrowers shall have first become aware of the occurrence of any such
event, furnish to Agent written notice setting forth brief particulars thereof.
(k) Each Borrower shall provide the Agent with the following
additional reports:
(i) as soon as available and in any event within a
reasonable time after the close of each fiscal year of Romacorp copies
of the portions of any and all auditor's letters, if any, to the board
of directors of Romacorp or to any other entity comprising Romacorp
regarding the various accounting practices and control procedures used
by any Borrower;
(ii) promptly after Borrowers become aware of the
commencement thereof, notice of all actions, suits and proceedings
before any court or governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, which may adversely
affect Borrowers and which are not fully covered by insurance without
the applicability of any co-insurance provisions or which have not been
bonded and in which either (A) the amount in controversy exceeds One
Hundred Twenty Five Thousand Dollars ($125,000) for any single
proceeding or Two Hundred Fifty Thousand Dollars ($250,000) in the
aggregate or (B) would cause a Material Adverse Effect;
(iii) as soon as practicable after becoming aware of
a claim by any Person that a Borrower is in default under any agreement
entered into in connection with Indebtedness for Borrowed Money in
excess of Two Hundred Fifty Thousand Dollars ($250,000), notice of any
such claim or default;
(iv) notice of any change in the conduct of the
business, prospects or financial condition of a Borrower promptly upon
such Borrower becoming aware of any such change which would have a
Material Adverse Effect;
(v) notice of any release of Hazardous Substances on
the Real Estate that is in material violation of Environmental laws or
would require remediation pursuant to
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applicable federal or state law or of any notification having been
filed with regard to a release of Hazardous Substances on or into Real
Estate under the Federal Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section 9601, et seq., or the
Federal Resource Conservation and Recovery Act, 42 U.S.C. Section 6901
et seq., or any other applicable environmental law. Such notice shall
indicate the steps the responsible Borrower has or will take to
remediate all hazardous environmental conditions if any such steps are
required of it by applicable Environmental Law and the estimated costs
of such remediation; and
(vi) if (and on each occasion that) any event shall
at any time occur or any condition shall at any time develop which
constitutes a Default or an Event of Default, then, promptly (and, in
any event, within five (5) Business Days) after a Borrower shall have
first become aware of the occurrence or development of any such event
or condition, such Borrower will furnish or cause to be furnished to
Agent a written notice specifying the nature and the date of the
occurrence of such event or (as the case may be), the nature and the
period of existence of such condition and what action such Borrower is
taking or proposes to take with respect thereto.
(l) Each Borrower shall also provide the Agent with such other
information relating to any Borrower (including, without limitation, any
Employee Benefit Plan) as the Agent may from time to time reasonably request. To
the extent the Agent is obligated to do so by applicable law, rule or
regulation, it may deliver to any regulatory body having jurisdiction over it,
copies of the reports and other information provided by Borrowers to the Agent
pursuant to this Section 6.1.
Section 6.2 Maintenance of Property; Authorization; Insurance.
(a) Each Borrower covenants to keep and maintain all of its
Property in reasonably good repair, working order and condition, reasonable wear
and tear excepted, and from time to time to make, or use all reasonable legal
remedies to cause to be made, all proper repairs, renewals or replacements,
betterments and improvements thereto so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
(b) At its own cost and expense, Borrowers shall obtain and
maintain during the term of this Agreement (i) insurance against loss,
destruction or damage to its properties as Agent may reasonably require from
time to time to fully protect the Agent's and Lenders' interests in the
Collateral; (ii) minimum flood insurance as required by FEMA or any other
government agency or when required by federal, state or local law, statute,
regulation or ordinance and as may reasonably be required by Agent and Lenders;
and (iii) insurance against public liability and third party property damage,
with such insurance companies, in such amounts and covering such risks as are at
all times reasonably satisfactory to Agent and naming Agent for the benefit of
Lenders as mortgagee, loss payee and additional insured as its interests may
appear. Borrowers agree to deliver to Agent upon request insurance certificates
or policies evidencing compliance with the above requirements. Each Borrower
covenants, warrants and represents that it will not do any act or voluntarily
suffer or permit any act to be done whereby any insurance required hereunder
shall or may be suspended, impaired or defeated. In the event that any item or
Collateral shall be lost, destroyed or irreparably
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damaged from any cause whatsoever during the term hereof, Borrowers agree to
proceed diligently and cooperate fully with Agent and Lenders in the recovery of
any and all proceeds of insurance applicable thereto, and the carriers named
therein are hereby directed by Borrower to make payment for such loss to Agent,
on behalf of the Lenders, and not to Borrowers and Lenders jointly. If any
insurance losses are paid by check, draft or other instrument payable to
Borrowers and Agent and Lenders jointly, Agent may endorse the names of
Borrowers thereon and do such other things as it may deem advisable to reduce
the same to cash. Provided Borrower is not in Default in any of its Obligations
to Agent or Lenders under any of the Loan Documents, all loss recoveries
received by Agent and Lenders upon any such insurance shall be paid by Agent and
Lenders to Borrowers so long as such proceeds promptly are reinvested in such
Borrower's business. Should any Borrower then be in default in any of its
obligations to Agent or Lenders under any of the Loan Documents, such cash
resources may be applied and credited by Agent and Lenders to any obligation,
subject to Section 2.9(a). Borrowers further covenant that each shall require
that the insurer with respect to each such insurance policy provide for thirty
(30) days' advance written notice to Agent of any cancellation or termination
of, or other change of any nature whatsoever in, the coverage provided under any
such policy.
Section 6.3 Key Man Life Insurance. Within one hundred and twenty (120)
days of the Closing Date, Borrowers shall obtain and maintain a key man life
insurance policy covering Xxxxxx X. Page in an amount not less than $2,000,000
and Borrowers shall maintain such insurance in full force and effect until the
Loans have been paid in full and all financing agreements among Borrowers, Agent
and the Lenders related thereto have been terminated. Borrowers shall assign
such policy to the Agent for the benefit of itself and the Lenders pursuant to
an assignment in form and substance satisfactory to the Agent with respect to
such policy.
Section 6.4 Entity Existence. Each Borrower that is a corporation shall
preserve and maintain its existence as a corporation in its state of its
incorporation on the Closing Date and all of its rights, franchises and
privileges as a corporation. Each Borrower that is a partnership shall preserve
and maintain its existence as a partnership in its state of its organization on
the Closing Date and all of its rights, franchises and privileges as a
partnership.
Section 6.5 Inspection Rights. At any reasonable time, upon reasonable
notice, and from time to time, each Borrower shall permit the Agent or any
Lender, or any of their respective agents, representatives or current or
prospective participants in the Loan, to inspect the Collateral, to examine and
make copies of and abstracts from the records and books of account of, to visit
the properties of, any Borrower and to discuss the affairs, finances and
accounts of such Borrower with any of their officers, employees, agents or the
Accountants.
Section 6.6 Payment of Taxes and Claims. Each Borrower shall pay or
cause to be paid all taxes, assessments and other governmental charges imposed
upon its properties or assets or in respect of any of its franchises, business,
income or profits before any penalty or interest accrues thereon, and all claims
(including, without limitation, claims for labor, services, materials and
supplies) for sums which have become due and payable and which by law have
become due and payable and which by law have become a lien or charge upon any of
its properties or assets, provided that (unless any material item of property
would be lost, forfeited or materially damaged as a result thereof) no such
charge or claim need be paid if the amount, applicability or validity
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thereof is currently being contested in good faith and if such reserve or other
appropriate provision, if any, as shall be required by GAAP shall have been made
therefor.
Section 6.7 Compliance with Laws.
(a) Each Borrower will materially comply with all applicable
federal, state and local laws, rules, regulations and orders pertaining to the
operation of its business, paying before the same become delinquent all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits or its properties, and paying all lawful claims which if
unpaid might become a Lien upon any of its properties, except to the extent
contested in good faith by proper proceedings which stay the imposition of any
penalty, fine or Lien resulting from the non-payment thereof and with respect to
which adequate reserves have been set aside for the payment thereof.
(b) Each Borrower will promptly notify each Lender in the
event that such Borrower receives any notice, claim or demand from any
governmental agency which alleges that such Borrower is in material violation of
any of the terms of, or has materially failed to comply with any applicable
order issued pursuant to any Federal, state or local statute regulating its
operation and business, including, but not limited to, the Occupational Safety
and Health Act, the Federal Comprehensive Environmental Response, Compensation
and Liability Act and the Resource Conservation and Recovery Act and the Federal
Water Pollution Control Act.
Section 6.8 Notice of Other Events. Immediately upon a Borrower first
becoming aware of any of the following occurrences, such Borrower will furnish
or cause to be furnished to Agent written notice with full particulars of (i)
the business failure, insolvency or bankruptcy of Borrower; (ii) the rescission,
cancellation or termination, or the creation or adoption, of any material
agreement or contract to which Borrower is a party; (iii) any material labor
dispute, any attempt by any labor union or organization representatives to
organize or represent employees of any Borrower, or any unfair labor practices
or proceedings of the National Labor Relations Board with respect to Borrower;
or (iv) any material defaults or events of default under any material agreement
of Borrower or any material violations of any laws, regulations, rules or
ordinances of any governmental or regulatory body.
Section 6.9 Communication with Accountants. Each Borrower authorizes
Agent or any Lender to communicate directly with the Accountants in the presence
of a representative of such Borrower and authorizes the Accountants to disclose
to Agent or such Lender any and all financial statements and other information
of any kind, including copies of any management letter or the substance of any
oral information or conversation that such Accountants may have with respect to
the business, financial condition and other affairs of Borrowers.
Section 6.10 Payment of Indebtedness. Each Borrower will duly and
punctually pay or cause to be paid principal and interest on the Loans and all
fees and other amounts payable hereunder or under the Loan Documents in
accordance with the terms hereunder. Each Borrower shall pay all other
Indebtedness (whether existing on the date hereof or arising at any time
thereafter) punctually in accordance with trade practices or within any
applicable period of grace except to the extent that any such obligation is
contested in good faith by proper proceedings or such Borrower
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has provided Agent evidence that any Lien resulting from the non-payment thereof
has been bonded or with respect to which adequate reserves have been set aside
for the payment thereof.
Section 6.11 Payment of Fees.
(a) Borrowers shall pay to Agent for the ratable benefit of
Lenders, the Commitment Fee, which shall commence to accrue on the Closing Date,
in monthly installments in arrears with the first installment being due on
August 1, 1998 and the subsequent installments being due on the first Business
Day of each month thereafter until the Termination Date, at which time all
accrued amounts of the Commitment Fee shall be immediately due and payable.
Agent shall distribute the Commitment Fee to Lenders in accordance with each
Lender's Pro Rata Share.
(b) Borrowers shall reimburse Agent for all fees, expenses and
disbursements incurred by Agent in connection with the transactions contemplated
by this Agreement.
Section 6.12 Performance of Obligations Under Certain Documents. Each
Borrower will duly and properly perform, observe and comply with all of its
agreements, covenants and obligations under this Agreement and each of the other
Loan Documents.
Section 6.13 Governmental Consents and Approvals.
(a) Each Borrower will obtain or cause to be obtained all such
approvals, consents, orders, authorizations and licenses from, give all such
notices promptly to, register, enroll or file all such agreements, instruments
or documents promptly with, and promptly take all such other action with respect
to, any governmental or regulatory authority, agency or official, or any central
bank or other fiscal or monetary authority, agency or official, as may be
required from time to time under any provision of any applicable law, except
where such nonattainment shall not have a Material Adverse Effect:
(i) for the performance by such Borrower of any of
its agreements or obligations under the Revolving Credit Notes, this
Agreement or any of the other Loan Documents or for the payment by such
Borrower to the Agent at its Head Office of any sums which shall become
due and payable by such Borrower to Agent or any Lender thereunder;
(ii) to ensure the continuing legality, validity,
binding effect or enforceability of the Revolving Credit Notes or any
of the other Loan Documents or of any of the agreements or obligations
thereunder of such Borrower; or
(iii) to continue the proper operation of the
business and operations of such Borrower.
(b) Each Borrower shall duly perform and materially comply
with the terms and conditions of all such approvals, consents, orders,
authorizations and Licenses and Permits from time to time granted to or made
upon such Borrower.
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Section 6.14 Employee Benefit Plans and Guaranteed Pension Plans. Each
Borrower will and will cause each of its ERISA Affiliates to (a) comply with all
requirements imposed by ERISA and the Internal Revenue Code of 1986, as amended,
applicable from time to time to any of its Guaranteed Pension Plans or Employee
Benefit Plans, (b) make full payment when due of all amounts which, under the
provisions of Employee Benefit Plans or under applicable law, are required to be
paid as contributions thereto, (c) not permit to exist any accumulated funding
deficiency, whether or not waived, (d) file on a timely basis all reports,
notices and other filings required by any governmental agency with respect to
any of its Employee Benefit Plans, (e) make any payments to Multiemployer Plans
required to be made under any agreement relating to such Multiemployer Plans, or
under any law pertaining thereto, (f) not amend or otherwise alter any
Guaranteed Pension Plan if the effect would be to cause the actuarial present
value of all benefit commitments under each Guaranteed Pension Plan to be less
than the current value of the assets of such Guaranteed Pension Plan allocable
to such benefit commitments, (g) furnish to all participants, beneficiaries and
employees under any of the Employee Benefit Plans, within the periods prescribed
by law, all reports, notices and other information to which they are entitled
under applicable law, and (h) take no action which would cause any of the
Employee Benefit Plans to fail to meet any qualification requirement imposed by
the Internal Revenue Code of 1986, as amended. As used in this Section 6.14, the
term "accumulated funding deficiency" has the meaning specified in Section 302
of ERISA and Section 412 of the Internal Revenue Code, and the terms "actuarial
present value", "benefit commitments" and "current value" have the meaning
specified in Section 4001 of ERISA.
Section 6.15 Further Assurances. Each Borrower will execute,
acknowledge and deliver, or cause to be executed, acknowledged and delivered,
any and all such further assurances and other agreements or instruments, and
take or cause to be taken all such other action, as shall be reasonably
requested by the Agent from time to time in order to give full effect to any of
the Loan Documents.
Section 6.16 Bank Services.
(a) To the extent compliance with this section is not
unreasonable, within one hundred and twenty (120) days Borrowers shall
concentrate all of their bank and depository accounts with Provident, including
without limitation, all demand deposit, time deposit, concentration and zero
balance accounts except that any Borrower may maintain operating accounts with
any local financial institution, provided such Borrower shall use its best
efforts to maintain such accounts with one or more of the Lenders;
(b) To the extent compliance with this section is not
unreasonable, after the earlier of one hundred eighty (180) days after the
Closing Date or one hundred twenty (120) days from the hiring of a Chief
Financial Officer of Holdings, Borrowers shall maintain all credit card accounts
and 401(k) services with Provident, provided all fees for such services are
reasonable and customary.
Section 6.17 Use of Proceeds. Borrowers shall use all Loan proceeds
disbursed only in accordance with the purposes set forth in Section 2.10 of this
Agreement.
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ARTICLE 7
FINANCIAL COVENANTS
Each Borrower covenants with and warrants to Agent and each Lender
that, from and after the Closing Date and until all of the Obligations are paid
and satisfied in full except as otherwise expressly consented to in writing by
the Requisite Lenders (unless the context otherwise requires):
Section 7.1 EBITDA. Borrowers shall not permit their consolidated
EBITDA for any Reference Period to be less than Fifteen Million Dollars
($15,000,000).
Section 7.2 Interest Coverage Ratio. Holdings shall not permit the
ratio of its Consolidated EBITDA to Consolidated Cash Interest Expense for any
Reference Period to be less then 1.40 to 1.00.
ARTICLE 8
NEGATIVE COVENANTS OF BORROWER
Each Borrower covenants with and warrants to Agent and each Lender that
from and after the Closing Date and until all of the Obligations are paid and
satisfied in full except as otherwise expressly consented to in writing by the
Requisite Lenders:
Section 8.1 Limitation on Nature of Business. No Borrower will at any
time make any material change in the nature of its business as carried on at the
date hereto or reasonably related, ancillary or supplemental thereto, or
undertake, conduct or transact any business in a manner prohibited by applicable
law.
Section 8.2 Limitation on Fundamental Changes. No Borrower or any
Subsidiary of a Borrower shall at any time consolidate with or merge into or
with any Person or Persons or enter into or undertake any plan or agreement of
consolidation or merger with any Person except mergers of Borrowers with or into
other Borrowers and mergers the sole purpose of which is to change the merging
Borrower's jurisdiction of incorporation. No Borrower shall liquidate, wind-up
or dissolve (or suffer any liquidation or dissolution), or convey, lease, sell,
transfer or otherwise dispose of, in one transaction or series of transactions,
all or substantially all of Borrower's business or property whether now or
hereafter acquired. Neither Borrower nor any Subsidiary shall make or permit any
amendment or modification to its charter documents or by-laws.
Section 8.3 Restricted Payments. Following the Closing Date, Borrowers
will not and will not permit any of their Subsidiaries to directly or indirectly
declare, order, pay, make or set apart any sum for any Restricted Payments
except that:
(a) So long as no Default or Event of Default exists, Romacorp
may make the scheduled periodic payments of interest on the Senior Debt in
accordance with the terms thereof or otherwise as approved in writing by
Requisite Lenders; and
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(b) Borrowers may make Restricted Payments with respect to
their Capital Stock to the extent necessary to permit Borrowers to pay the
Obligations, to make any Restricted Payments permitted under clause (a) above,
to permit Borrowers to pay expenses incurred in the ordinary course of business
and, after , 200 , to permit Romacorp to pay the Senior Debt.
Section 8.4 Limitation on Disposition of Assets.
(a) Neither Borrowers nor any Subsidiary will,
without the express prior written consent of Agent, which consent shall not be
unreasonably withheld, sell, lease, transfer or otherwise dispose of any of its
property, business or assets, other than Real Estate or Intellectual Property
(but only to the extent required or necessary in connection with the grant of
area development rights), ("Asset Dispositions"), or grant any Person an option
to acquire any such property, business or assets except for (x) bona fide sales
of Inventory to customers in the ordinary course of business and dispositions of
obsolete equipment not used or useful in the business, (y) sale-leaseback
transactions in the aggregate amount not to exceed $5,000,000, and (z) asset
dispositions which satisfy the following conditions:
(i) the market value of assets sold or otherwise
disposed of in any single transaction or series of related transactions
does not exceed One Hundred Thousand Dollars ($100,000) and the
aggregate market value of assets sold or otherwise disposed of in any
Fiscal Year does not exceed Five Hundred Thousand Dollars ($500,000);
(ii) the consideration received is at least equal to
the fair market value of such assets;
(iii) if the consideration received is not solely in
cash, all non-cash consideration is pledged to the Agent pursuant to
documents satisfactory to the Agent so that the Agent has received a
first priority perfected security interest in such non-cash
consideration to secure the Obligations;
(iv) the Net Proceeds of such asset disposition are
applied as required by Section 2.7(c);
(v) after giving effect to the sale or other
disposition of the assets included within the asset disposition and the
repayment of Indebtedness with the proceeds thereof, Borrower is in
compliance on a pro forma basis with the covenants set forth in Article
7, recomputed for the most recently ended month for which information
is available and is in compliance with all other terms and conditions
contained in this Agreement;
(vi) no Default or Event of Default shall result from
such sale or other disposition; and
(vii) such assets include only tangible personal
property.
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(b) Except as permitted elsewhere in this Agreement, Borrowers
will not and will not permit any of its Subsidiary directly or indirectly to
sell, assign, pledge or otherwise encumber or dispose of any shares of Capital
Stock or other equity securities in any Borrower or any such Subsidiary
including warrants, rights or options to acquire shares or other equity
securities of any Subsidiary except to a Borrower or another Subsidiary of a
Borrower.
Section 8.5 Limitation on Investments. No Borrower shall at any time
make any Investments of any kind whatever in any Person or Persons; excluding,
however from the operation of the foregoing provisions of this Section 8.5:
(a) Assets to be used in the ordinary course of business of
such Borrower;
(b) Assets arising from the sale of goods and services in the
ordinary course of business of such Borrower; and
(c) Investments in cash and Cash Equivalents.
Section 8.6 Acquisition of Margin Securities. No Borrower shall own,
purchase or acquire (or enter into any contract to purchase or acquire) any
"margin security" as defined by any regulation of the Federal Reserve Board as
now in effect or as the same may hereafter be in effect unless, prior to any
such purchase or acquisition or entering into any such contract, Agent and each
Lender shall have received an opinion of counsel satisfactory to Agent and each
Lender to the effect that such purchase or acquisition will not cause this
Agreement or the Revolving Credit Notes to be in violation of Regulation G, T,
U, X or any other regulation of the Federal Reserve Board then in effect.
Section 8.7 Limitation on Mortgages, Liens and Encumbrances. No
Borrower shall at any time create, assume, incur or permit to exist, any
mortgage, Lien or other encumbrance in respect of any of the Collateral, whether
heretofore or hereafter acquired by it without the express prior written consent
of Agent, such consent not to be unreasonably withheld; excluding, however, from
the operation of the foregoing provisions of this Section 8.7 (each a "Permitted
Lien"):
(a) Any Liens for taxes, assessments or governmental charges
or claims the payment of which is not at the time required by Section 6.7 of
this Agreement;
(b) Any statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other Liens imposed by law incurred in
the ordinary course of business for sums not yet delinquent;
(c) Any Liens (other than any Lien imposed by ERISA) incurred
or deposits made in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social security;
(d) Any easements, rights-of-way, encroachments, leases,
royalties, restrictions and other similar title exceptions or encumbrances
provided such do not, in the aggregate, materially
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interfere with the ordinary conduct of the business of a Borrower or materially
reduce or impair the value of the Real Estate so encumbered;
(e) Any interest or title of a lessor under any Material Lease
listed on Schedule 5.7 annexed to this Agreement;
(f) Liens granted to Agent for the benefit of Lenders and the
additional existing mortgages, Liens and encumbrances of Borrowers, listed and
described, but only to the extent indicated, on Schedule 8.7(f) annexed to this
Agreement; and
(g) The Indebtedness of a Borrower under or in respect to any
conditional sales agreements, security agreements, equipment leases in the
nature of title retention agreements or security agreements or other similar
title retention agreements entered into by a Borrower on, prior to or after the
date of this Agreement in order to secure the payment of the purchase price of
any equipment purchased, leased or otherwise acquired by such Borrower for use
in the ordinary course of its business; provided, however, that such Borrower
is, by the terms of each of Sections ? or 8.11 hereof, expressly permitted to
enter into such agreement or lease.
(h) Liens granted to a third party pursuant to a lease
financing arrangement or agreement for the acquisition of real property other
than Real Estate owned or leased by a Borrower on the Closing Date or the
development of restaurants situated on real property other than Real Estate
owned or leased by a Borrower on the Closing Date.
Section 8.8 No Additional Negative Pledges. Other than prohibitions
contained in the indentures covering the Senior Debt, no Borrower will create or
otherwise cause or suffer to exist or become effective, directly or indirectly,
(a) any prohibition or restriction (including any agreement to provide equal or
ratable security to any other Person in the event a Lien is granted to or for
the benefit of the Agent) on the creation or existence of any Lien upon the
assets of a Borrower, or (b) any contractual obligation which may restrict or
inhibit the Agent's rights or ability to sell or otherwise dispose of the
Collateral or any part thereof after the occurrence of an Event of Default.
Section 8.9 No Restrictions on Subsidiary Distributions to Borrowers.
Except as provided herein, Borrowers will not and will not permit any Subsidiary
directly or indirectly to create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of any Subsidiary to: (1) pay dividends or make any other distribution on any of
a Subsidiary's Capital Stock owned by a Borrower or any Subsidiary of a
Borrower; (2) subject to subordination provisions, pay any indebtedness owed to
a Borrower or any other Subsidiary; (3) make loans or advances to a Borrower or
any other Subsidiary; or (4) transfer any of its property or assets to a
Borrower or any other Subsidiary.
Section 8.10 Limitation on Indebtedness. No Borrower shall at any time
create, incur or assume, or become or be liable (directly or indirectly) in
respect of, any Indebtedness for Borrowed Money, other than Indebtedness arising
under this Agreement and the other Loan Documents and the Senior Debt.
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Section 8.11 Transactions with Affiliates. No Borrower shall at any
time enter into or participate in any agreements or transactions of any kind
with any Affiliates of any Borrower (except that a Borrower shall be permitted
to enter into such agreements or transaction with any other Borrower), except
(i) agreements or transactions that produce annual payments of less than Twenty
Thousand Dollars ($20,000) individually or One Hundred Thousand Dollars
($100,000) in the aggregate, (ii) agreements or transactions entered into in the
ordinary course of business upon fair and reasonable terms no less favorable to
Borrower than could be obtained in a comparable arms-length transaction with an
unaffiliated Person, or (iii) obligations under the agreements listed on
Schedule 5.13 hereto.
Section 8.12 Changes Relating to Senior Debt. Neither Holdings nor
Borrowers will or permit any of its Subsidiaries to change or amend the terms of
any Senior Debt.
Section 8.13 No Additional Bank Accounts. Except as provided in Section
6.16, no Borrower shall open, maintain or otherwise have any bank accounts.
ARTICLE 9
EVENTS OF DEFAULT AND REMEDIES
Section 9.1 Events of Default. The occurrence of any one or more of the
following events shall constitute an "Event of Default":
(a) Principal and Interest. Any principal, interest or any
other sum payable under this Agreement or the Revolving Credit Notes shall not
be paid when due;
(b) Representation and Warranties. Any representation or
warranty at any time made by or on behalf of a Borrower in this Agreement, any
Loan Document or in any certificate, written report or statement furnished to
Agent or any Lender pursuant hereto or thereto shall prove to have been untrue,
incorrect or breached in any material respect on or as of the date on which such
representation or warranty was made or deemed to have been made or repeated;
(c) Certain Covenants. Any Borrower shall fail to comply with
the covenants set forth in Sections 6.2(b), Article 7 or Article 8;
(d) Other Covenants. Any Borrower shall fail to perform,
comply with or observe or shall otherwise breach any other covenant or agreement
contained in this Agreement and such failure or breach shall continue for more
than thirty (30) days after the earlier of the date on which a Borrower shall
have first become aware of such failure or breach or Agent or any Lender shall
have first notified Borrower of such failure or breach;
(e) Loan Documents. The breach or a failure of a Borrower to
perform, comply with or observe any Loan Document or any other agreement,
document, instrument or certificate executed on delivered in connection with
this Agreement and if such failure shall continue for more than thirty (30) days
after the earlier of the date on which a Borrower shall have first become aware
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of such failure or breach or Agent or any Lender shall have first notified a
Borrower of such failure or breach, or any Loan Document shall cease to be
legal, valid, binding or enforceable in accordance with the terms thereof;
(f) Litigation. Any action at law, suit in equity or other
legal proceeding to amend, cancel, revoke or rescind any Loan Document shall be
commenced by or on behalf of a Borrower or any other Person bound thereby, or by
any court or any other governmental or regulatory authority or agency of
competent jurisdiction; or any court or any other governmental or regulatory
authority or agency of competent jurisdiction shall make a determination that,
or shall issue a judgment, order, decree or ruling to the effect that, any one
or more of the covenants, agreements or obligations of a Borrower under any one
or more of the Loan Documents are illegal, invalid or unenforceable in
accordance with the terms thereof;
(g) Default by a Borrower under other Agreements. Any default
by any Borrower or any event of default shall occur under any agreement,
instrument or contract relating to Indebtedness individually or in the aggregate
in excess of Five Hundred Thousand Dollars ($500,000) to which such Borrower is
at any time a party or by which such Borrower is at any time bound or affected,
or any Borrower shall fail to perform or observe any of its agreements or
covenants thereunder, and such default, event of default or failure shall
continue for such period of time as would permit, or as would have permitted
(assuming the giving of appropriate notice), holders of Indebtedness of any
Borrower to accelerate the maturity of all or any part of such Indebtedness
under any such document;
(h) Insolvency. Any action shall be taken by or on behalf of
any Borrower for the termination, winding up, liquidation or dissolution of such
Borrower; or a Borrower shall make an assignment for the benefit of creditors,
become insolvent or be unable to pay its debts as they mature; or a Borrower
shall file a petition in voluntary liquidation or bankruptcy; or a Borrower
shall file a petition or answer or consent seeking the reorganization of such
Borrower, or the readjustment of any of the Indebtedness of such Borrower; or a
Borrower shall commence any case or proceeding under applicable insolvency or
bankruptcy laws now or hereafter existing; or a Borrower shall consent to the
appointment of any receiver, administrator, custodian, liquidator or trustee of
all or any part of the Property or assets of such Borrower; or any corporate
action shall be taken by a Borrower for the purpose of effecting any of the
foregoing; or by order or decree of any court of competent jurisdiction, a
Borrower shall be adjudicated as bankrupt or insolvent; or any petition for any
proceedings in bankruptcy or liquidation or for the reorganization or
readjustment of Indebtedness of such Borrower shall be filed, or any case or
proceeding shall be commenced, under any applicable bankruptcy or insolvency
laws now or hereafter existing, against such Borrower, or any receiver,
administrator, custodian, liquidator or trustee shall be appointed for a
Borrower or for all or any part of the Property of a Borrower and such case or
proceeding shall remain undismissed for a period of sixty (60) days, or any
order for relief shall be entered in a proceeding with respect to such Borrower
under the provisions of the United States Bankruptcy Code, as amended;
(i) Judgment. Any judgment, order or decree for the payment of
money in excess of Two Hundred Fifty Thousand Dollars ($250,000) if not bonded
or insured, or Fifty Thousand Dollars ($50,000) otherwise, shall be rendered
against a Borrower, and such Borrower shall not
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discharge the same or provide for its discharge in accordance with its terms, or
procure a stay of execution thereof, within Thirty (30) days after the date of
the entry thereof;
(j) ERISA. (i) Any Termination Event shall occur and as of the
date thereof or any subsequent date, the sum of the various liabilities of
Borrowers and their ERISA Affiliates (such liabilities to include, without
limitation, any liability to the Pension Benefit Guaranty Corporation (or any
successor thereto) or to any other party under Sections 4062, 4063, or 4064 of
ERISA or any other provision of law and to be calculated after giving effect to
the tax consequences thereof) resulting from or otherwise associated with such
event exceeds Fifty Thousand Dollars ($50,000); or Borrowers of any of their
ERISA Affiliates as an employer under any Multiemployer Plan shall have made a
complete or partial withdrawal from such Multiemployer Plans and the plan
sponsors of such Multiemployer Plans shall have notified such withdrawing
employer that such employer has incurred a withdrawal liability requiring a
payment in an amount exceeding Fifty Thousand Dollars ($50,000);
(k) Change of Control. Any Change of Control shall occur;
(l) Material Adverse Change. Unless and until Provident has
been acquired by another financial institution, any event or occurrence which
has a Material Adverse Effect.
Section 9.2 Termination of Commitments and Acceleration of Obligations.
If any one or more of the Events of Default shall at any time occur:
(a) The Agent may, and upon the request of the Requisite
Lenders, shall, by giving notice to Borrowers, immediately terminate the Credit
Commitments of all of the Lenders in full and each Lender shall thereupon be
relieved of all of its obligations to make any Loans thereunder; except that if
there shall be an Event of Default under Section 9.1(h) hereof, the Credit
Commitments of all of the Lenders shall automatically terminate in full, and
each Lender shall thereupon be relieved of all of its obligations to make any
Loans hereunder.
(b) The Agent, upon the request of the Requisite Lenders,
shall, by giving notice to Borrowers (in this Agreement and in the other Loan
Documents called a "Notice of Acceleration"), declare all of the Obligations,
including the entire unpaid principal of the Revolving Credit Notes, all of the
unpaid interest accrued thereon, and all other sums (if any) payable by
Borrowers under this Agreement, the Revolving Credit Notes, or any of the other
Loan Documents, to be immediately due and payable; except that if there shall be
an Event of Default under Section 9.1(h), all of the Obligations, including the
entire unpaid balance of all of the Revolving Credit Notes, all of the unpaid
interest accrued thereon and all other sums (if any) payable by Borrowers under
this Agreement, the Revolving Credit Notes or any of the other Loan Documents
shall automatically and immediately be due and payable without notice to
Borrowers. Thereupon, all of such Obligations which are not already due and
payable shall forthwith become and be absolutely and unconditionally due and
payable, without any further notice or any other formalities of any kind, all of
which are hereby expressly and irrevocably waived.
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Section 9.3 Remedies. From and after the occurrence of an Event of
Default which is continuing and which has not been waived by the Agent at the
direction of the Requisite Lenders, the Agent may, and, upon the request of the
Requisite Lenders, shall:
(a) Subject always to the provisions of Section 10.9 hereof,
proceed to protect and enforce all or any of its or the Lenders' rights,
remedies, powers and privileges under this Agreement, the Revolving Credit Notes
or any of the other Loan Documents by action at law, suit in equity or other
appropriate proceedings, whether for specific performance of any covenant
contained in this Agreement, any Revolving Credit Note or any of the other Loan
Documents, or in aid of the exercise of any power granted to Agent herein or
therein. In the event the Agent shall fail or refuse to so proceed, the
Requisite Lenders shall be entitled to take such action as they shall deem
appropriate to enforce their rights hereunder and under the other Loan
Documents.
(b) remove from any premises where same may be located any and
all Inventory or any and all documents, instruments, files and records
(including the copying of any computer records), and any receptacles or cabinets
containing same, relating to the Accounts of the Borrowers, or the Agent may use
(at the expense of the Borrowers) such of the supplies or space of the
Borrowers, at any Borrowers' place of business or otherwise, as may be necessary
to properly administer and control the Accounts of the Borrowers or the handling
of collections and realizations thereon;
(c) bring suit, in the name of any Borrower or the Lenders,
and generally shall have all other rights respecting said Accounts, including,
without limitation, the right to: accelerate or extend the time of payment,
settle, compromise, release in whole or in part any amounts owing on any such
Accounts and issue credits in the name of any Borrower or the Lenders;
(d) sell, assign and deliver such Inventory and Accounts and
any returned, reclaimed or repossessed merchandise, with or without
advertisement, at public or private sale, for cash, on credit or otherwise, at
the Agent's sole discretion, and any Lender may bid-or become a purchaser at any
such sale, free from any right of redemption, which right is hereby expressly
waived by the Borrowers;
(e) (i) notify the Account Debtor on any Account or Chattel
Paper of Lenders' security interest therein; (ii) demand that monies due or to
become due be paid directly to Agent for the account of Lenders; (iii) open
Borrowers' mail and to collect any and all amounts due Borrowers from account
debtors; (iv) enforce payment of the accounts receivable or Chattel Paper by
legal proceedings or otherwise; (v) exercise all of Borrowers' rights and
remedies with respect to the collection of the accounts receivable or Chattel
Paper; (vi) settle, adjust, compromise, modify, extend or renew the accounts
receivable or Chattel Paper; (vii) settle, adjust or compromise any legal
proceedings brought to collect the accounts receivable or Chattel Paper; (viii)
to the extent permitted by applicable law, sell or assign the accounts
receivable or Chattel Paper upon such terms, for such amounts and at such time
or times as Agent deems advisable; (ix) grant waivers or indulgences with
respect to, accept partial payments from, discharge, release, surrender,
substitute any customer security for, make compromise with or release, any other
party liable on, any account receivable or Chattel Paper; (x) take control, in
any manner, of any item of payment or proceeds from any account debtor; (xi)
prepare, file, and sign Borrowers' name on any proof of claim in Bankruptcy or
similar
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document against any account debtor; (xii) prepare, file, and sign the
appropriate Borrower's name on any notice of lien, assignment or satisfaction of
lien or similar document in connection with the accounts receivable or Chattel
Paper; (xiii) endorse the name of the appropriate Borrower upon any Chattel
Paper, document, instrument, invoice, freight xxxx, xxxx of lading or similar
document or agreement relating to the accounts receivable or Chattel Paper or
inventory; (xiv) use the appropriate Borrower's stationery and sign the
appropriate Borrower's name to verifications of the accounts receivable or
Chattel Paper and notices thereof to account debtors; and (xv) use the
information recorded on or contained in any data processing Equipment or
computer hardware or software relating to the accounts receivable, Chattel
Paper, inventory, or proceeds thereof to which such Borrower has access; and
(f) foreclose the security interests created pursuant to the
Loan Documents by any available judicial procedure, or take possession of any or
all of the Inventory and Equipment of any Borrower without judicial process and
enter any premises where any such Inventory and Equipment may be located for the
purpose of taking possession of or removing the same.
The Agent shall have the right, without notice of advertisement, to
sell, lease, or otherwise dispose of all or any part of the Inventory and
Equipment of any Borrower, whether in its then condition or after further
preparation or processing, in the name of such Borrower, or the Lenders, or in
the name of such other party as the Agent may designate, either at public or
private sale or at any broker's board, in lots or in bulk, for cash or for
credit, with or without warranties or representations, and upon such other terms
and conditions as the Agent in its sole discretion may deem advisable, and the
Agent or any other Lender shall have the right to purchase at any such sale. If
any such Inventory and Equipment shall require rebuilding, repairing,
maintenance or preparation, the Agent shall have the right, at its option, to do
such of the aforesaid as is necessary, for the purpose of putting such Inventory
and Equipment in such saleable form as the Agent shall deem appropriate. The
Borrowers agree, at the request of the Agent, to assemble such Inventory and
Equipment and to make it available to the Agent at places which the Agent shall
reasonably select, whether at the premises of such Borrower or elsewhere, and to
make available to the Agent the premises and facilities of such Borrower for the
purpose of the Agent's taking possession of, removing or putting such Inventory
and Equipment in saleable form. However, if notice of intended disposition of
any Collateral is required by law, it is agreed that five (5) Business Days
notice shall constitute reasonable notification and full compliance with the
law. The Agent shall be entitled to use all intangibles and computer software
programs and data bases used by a Borrower in connection with its business or in
connection with the Collateral. The net cash proceeds resulting from the Agent's
exercise of any of the foregoing rights (after deducting all charges, costs and
expenses including reasonable attorneys' fees) shall be applied by the Agent to
the payment of the Obligations, whether due or to become due, in such order as
the Agent may elect. Each Borrower shall remain liable to the Lenders for any
deficiencies, and the Lenders in turn agree to remit to the appropriate Borrower
or its successors or assigns, any surplus resulting therefrom. The enumeration
of the foregoing rights is not intended to be exhaustive and the exercise of any
right shall not preclude the exercise of any other rights, all of which shall be
cumulative.
Section 9.4 No Implied Waiver; Rights Cumulative. No delay on the part
of the Agent or any Lender in exercising any right, remedy, power or privilege
under any of the Loan Documents or provided by statute or at law or in equity or
otherwise shall impair, prejudice or constitute a
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waiver of any such right, remedy, power or privilege or be construed as a waiver
of any Default or Event of Default or as an acquiescence therein. No right,
remedy, power or privilege conferred on or reserved to Agent or any Lender under
any of the Loan Documents or otherwise is intended to be exclusive of any other
right, remedy, power or privilege. Each and every right, remedy, power and
privilege conferred on or reserved to Agent or any Lender under any of the Loan
Documents or otherwise shall be cumulative and in addition to each and every
other right, remedy, power or privilege so conferred on or reserved to Agent or
any such Lender and may be exercised at such time or times and in such order and
manner as Agent or any such Lender shall (in its sole and complete discretion)
deem expedient.
Section 9.5 Set-Off; Pro Rata Sharing. If any principal, interest or
other sum payable by a Borrower to Agent or any Lender under the Revolving
Credit Notes or any of the Loan Documents is not paid to Agent or such Lender
punctually when the same shall first become due and payable, or if any Event of
Default shall at any time occur, any deposits, balances or other sums credited
by or due from Agent or such Lender or any of the offices or branches of Agent
or any Lender to any Borrower, may, without any prior notice of any kind to such
Borrower, or compliance with any other conditions precedent now or hereafter
imposed by statute, rule or law or otherwise (all of which are hereby expressly
and irrevocably waived by Borrowers), be immediately set off, appropriated and
applied by Agent or such Lender toward the payment and satisfaction of the
Obligations (but not to any other obligations of any Borrower to Agent or such
Lender until all of the Obligations have been paid in full) in such order and
manner as Agent or such Lender (in its sole and complete discretion) may
determine, subject, however, to the provisions of Section 10.13.
ARTICLE 10
CONCERNING THE AGENT AND THE LENDERS
The Agent and the Lenders agree as follows:
Section 10.1 Appointment of the Agent. Each of the Lenders hereby
appoints Provident to serve as Agent, under this Agreement and the other Loan
Documents, and in such capacity, to administer this Agreement, and the other
Loan Documents.
Section 10.2 Authority. Each of the Lenders hereby irrevocably
authorizes the Agent (i) to take such action on such Lender's behalf under this
Agreement and the other Loan Documents and to exercise such powers and to
perform such duties hereunder and thereunder as are delegated to or required of
the Agent by the terms hereof or thereof, together with such powers as are
reasonably incidental thereto; and (ii) to take such action on such Lender's
behalf as the Agent shall consider necessary or advisable for the protection,
collection or enforcement of any of the Obligations. The Agent will promptly
notify each of the Lenders as soon as it becomes aware of any Default or Event
of Default or any failure by the Borrowers to make any payment in respect of any
of the Revolving Credit Notes, provided, however, that Agent shall not be deemed
to have knowledge of any item until such time as Agent's officers responsible
for administration of the Loans shall receive written notice thereof or have
actual knowledge of such event. If any Lender becomes aware of any Default or
Event of Default by Borrowers, it shall promptly notify Agent thereof provided,
however, that
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Lenders shall not be deemed to have knowledge of any item until such time as
Lenders' officers responsible for administration of the Loans shall receive
written notice thereof or have actual knowledge of such event.
Section 10.3 Acceptance of Appointment. The Agent hereby accepts its
appointment as Agent for each of the Lenders under this Agreement and the other
Loan Documents, but only on the terms set forth in this Agreement, including the
following:
(a) Agent makes no representation as to the value, validity or
enforceability of this Agreement or of any of the other Loan Documents or as to
the correctness of any statement contained in this Agreement or in any of the
other Loan Documents;
(b) Agent may exercise its powers and perform its duties under
this Agreement and the other Loan Documents either directly or through its
agents or attorneys;
(c) Agent shall be entitled to obtain from counsel selected by
it with reasonable care advice with respect to legal matters pertaining to this
Agreement, or any of the other Loan Documents and shall not be liable for any
action taken, omitted to be taken or suffered in good faith in accordance with
the advice of such counsel;
(d) Agent shall not be required to use its own funds in the
performance of any of its duties or in the exercise of any of its rights or
powers, and Agent shall not be obligated to take any action which, in its
reasonable judgment, would involve it in any expense or liability unless it
shall have been furnished security or indemnity in an amount and in form and
substance satisfactory to it; and
(e) Agent, in performing its duties and functions under this
Agreement and the other Loan Documents on behalf of the Lenders, will exercise
the same care which it normally exercises in making and handling loans in which
it alone is interested, but does not assume further responsibility.
Section 10.4 Collateral Matters.
(a) Release of Collateral. Lenders hereby irrevocably
authorize Agent, at its option and in its discretion, to release any Lien
granted to or held by Agent upon any property covered by the Security Documents
(i) upon termination of the Credit Commitments and payment and satisfaction of
all Obligations; or (ii) constituting property being sold or disposed of if
Borrower certifies to Agent that the sale or disposition is made in compliance
with the provisions of this Agreement (and Agent may rely in good faith
conclusively on any such certificate, without further inquiry); or (iii)
constituting property leased to Borrower under a lease which has expired or been
terminated in a transaction permitted under this Agreement or is about to expire
and which has not been, and is not intended by Borrower to be, renewed or
extended. Upon request by Agent at any time, any Lender will confirm in writing
Agent's authority to release particular types or items of property covered by
the Security Documents pursuant to this Section 10.4(a).
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(b) Confirmation of Authority; Execution of Releases. Without
in any manner limiting Agent's authority to act without any specific or further
authorization or consent by Requisite Lenders (as set forth in Section 10.4(a)),
each Lender agrees to confirm in writing, upon request by Borrower, the
authority to release any property covered by the Security Documents conferred
upon Agent under clauses (i) through (iii) of Section 10.4(a). So long as no
Event of Default is then continuing, upon receipt by Agent of confirmation from
the Requisite Lenders of its authority to release any particular item or types
of property covered by the Security Documents, and upon at least five (5)
Business Days prior written request by Borrower, Agent shall (and is hereby
irrevocably authorized by Lenders to) execute such documents as may be necessary
to evidence the release of the Liens granted to Agent for the benefit of Lenders
herein or pursuant hereto upon such Collateral; provided, however, that (i)
Agent shall not be required to execute any such document on terms which, in
Agent's opinion, would expose Agent to liability or create any obligation or
entail any consequence other than the release of such Liens without recourse or
warranty, and (ii) such release shall not in any manner discharge, affect or
impair the Obligations or any Liens upon (or obligations of Borrower, in respect
of), all interests retained by Borrower, including (without limitation) the
proceeds of any sale, all of which shall continue to constitute part of the
property covered by the Security Documents.
(c) Absence of Duty. Agent shall have no obligation whatsoever
to any Lender or any other Person to assure that the property covered by the
Security Documents exists or is owned by Borrower or is cared for, protected or
insured or has been encumbered or that the Liens granted to Agent herein or
pursuant hereto have been properly or sufficiently or lawfully created,
perfected, protected or enforced or are entitled to any particular priority, or
to exercise at all or in any particular manner or under any duty of care,
disclosure or fidelity, or to continue exercising, any of the rights,
authorities and powers granted or available to Agent in this Section 10.4 or in
any of the Loan Documents, it being understood and agreed that in respect of the
property covered by the Security Documents or any act, omission or event related
thereto, Agent may act in any manner it may deem appropriate, it its discretion,
given Agent's own interest in property covered by the Security Documents as one
of the Lenders and that Agent shall have no duty or liability whatsoever to any
of the other Lenders; provided that Agent shall exercise the same care which it
would in dealing with loans for its own account.
Section 10.5 Agency for Perfection. Each Lender hereby appoints each
other Lender as agent for the purpose of perfecting Lenders' security interest
in assets which, in accordance with Article 9 of the Uniform Commercial Code in
any applicable jurisdiction, can be perfected only by possession. Should any
Lender (other than Agent) obtain possession of any such Collateral, such Lender
shall notify Agent thereof, and, promptly upon Agent's request therefor, shall
deliver such Collateral to Agent or in accordance with Agent's instructions.
Each Lender agrees that it will not have any right individually to enforce or
seek to enforce any Security Document or to realize upon any collateral security
for the Loans, it being understood and agreed that such rights and remedies may
be exercised only by Agent.
Section 10.6 Application of Moneys. All moneys realized by the Agent
under the Loan Documents shall be held by Agent to apply in accordance with
Section 2.8(b) hereof.
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Section 10.7 Reliance by the Agent. Agent shall be entitled to rely on
any notice, consent, certificate, affidavit, letter, telegram, telecopy,
facsimile or teletype message, statement, order, instrument or other document
believed by it to be genuine and correct and to have been signed or sent by the
proper Person or Persons. Agent shall deem and treat the payee of any Revolving
Credit Note as the absolute owner thereof for all purposes hereof until such
time as it receives actual notice of an assignment permitted hereunder of such
payee's interest, together with the written agreement of the assignee in form
and substance satisfactory to Agent that such assignee is bound by this
Agreement as a "Lender" hereunder.
Section 10.8 Exculpatory Provisions. Neither Agent nor any of its
shareholders, directors, officers, employees or agents shall be liable in any
manner to any of the Lenders for any action taken, omitted to be taken or
suffered in good faith by it or them under any of the Loan Documents or in
connection therewith, or be responsible for the consequences of any oversight or
error of judgment, except for losses due to gross negligence or willful
misconduct of such Agent, shareholder, director, officer, employee or agent.
Without limiting the generality of the foregoing sentence of this Section 10.8,
under no circumstances shall the Agent be subject to any liability to any Lender
on account of any action taken or omitted to be taken by such Agent in
compliance with the direction of the Requisite Lenders or all of the Lenders, as
the case may be as provided for hereunder.
Agent shall not be responsible in any manner to any of the Lenders for
the due execution, effectiveness, genuineness, validity or enforceability,
perfection or recording of this Agreement, any of the Revolving Credit Notes,
any of the other Loan Documents or for any certificate, report or other document
used under or in connection with this Agreement or any of the other Loan
Documents, or for the truth or accuracy of any recitals, statements, warranties
or representations contained herein or in any certificate, report or other
document at any time hereafter furnished or purporting to have been furnished to
it by or on behalf of a Borrower, or any other Person, or be under any
obligation to any of the Lenders to ascertain or inquire as to the performance
or observance by a Borrower, or any other Person of any of the covenants,
agreements or conditions set forth in this Agreement, the Revolving Credit Notes
or any of the other Loan Documents or as to the use of any moneys lent hereunder
or thereunder.
Agent shall not be obligated to take any action or refrain from taking
any action under any Loan Document that might, in its judgment, involve it in
any expense or liability until it shall have been indemnified to its
satisfaction by or received an agreement to indemnify from each Person which
such Agent reasonably believes may be an intended recipient of such
distribution. If a court of competent jurisdiction shall adjudge that any amount
received and distributed by the Agent is to be repaid, each Person to whom any
such distribution shall have been made shall either repay to the Agent its
proportionate share of the amount so adjudged to be repaid or shall pay over the
same in such manner and to such Persons as shall be determined by such court.
Section 10.9 Action by the Agent. Except as otherwise expressly
provided under this Agreement or in any other of the Loan Documents, Agent will
take such action, assert such rights and pursue such remedies under this
Agreement and the other Loan Documents as the Requisite Lenders or all of the
Lenders, as the case may be as provided for hereunder shall direct. Except as
otherwise expressly provided in any of the Loan Documents, Agent will not (and
will not be
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obligated to) take any action, assert any rights or pursue any remedies under
this Agreement or any of the other Loan Documents in violation or contravention
of any express direction or instruction of the Requisite Lenders or all of the
Lenders, as the case may be as provided for hereunder. Agent may refuse (and
will not be obligated) to take any action, assert any rights or pursue any
remedies under this Agreement or any of the other Loan Documents without the
express written direction and instruction of the Requisite Lenders or all of the
Lenders, as the case may be as provided for hereunder. In the event Agent fails,
within a commercially reasonable time, to take such action, assert such rights,
or pursue such remedies as the Requisite Lenders or all of the Lenders, as the
case may be as provided for hereunder, direct, the Requisite Lenders or all of
the Lenders, as the case may be as provided for hereunder, shall have the right
to take such action, to assert such rights, or pursue such remedies on behalf of
all of the Lenders unless the terms hereof otherwise require the consent of all
the Lenders to the taking of such actions. All notices and other material
information required to be delivered by Borrower to Agent hereunder shall be
delivered within a reasonable time (and in any event not more than five (5)
days) after Agent's receipt of same by Agent to each Lender. No Lender (other
than the Agent, acting in its capacity as Agent) shall be entitled to take any
enforcement action of any kind under any of the Loan Documents, except as
expressly provided in this Agreement. Action that may be taken by Requisite
Lenders or all of the Lenders, as the case may be as provided for hereunder may
be taken pursuant to a vote at a meeting (which may be held by telephone
conference call) of all of the Lenders, or pursuant to the written consent of
such Lenders.
Section 10.10 Amendments, Waivers and Consents. Any provision of this
Agreement, the Revolving Credit Notes or the other Loan Documents may be amended
or waived upon the consent of the Requisite Lenders, and after such consent,
Agent, on behalf of the Lenders, may execute and deliver to Borrowers a written
instrument waiving or amending such provision; provided, however, that neither
this Agreement, the Revolving Credit Notes, nor any of the other Loan Documents
may be amended, waived or a variation therefrom or forbearance with respect to
such variation consented to without the written consent of the Agent and all of
Lenders which effect (i) a change in the Maximum Revolving Commitment; (ii) a
change in any Lender's Credit Commitment; (iii) a reduction in the interest
rates or reduction of the principal set forth in the Revolving Credit Notes;
(iv) the extension of the maturity date on the Notes or expiration date of any
Letter of Credit beyond the Termination Date; (v) a change in the payment
schedule or scheduled date for the payment of or amount of any interest or
principal; (vi) any change in Article 7; (vii) a change in this Section 10.10,
the definition of Requisite Lender or any provision of this Agreement which
requires consent or action of all the Lenders for action thereunder; (viii) a
change in the obligations and liabilities of Agent; (ix) a change which
increases the obligations of any Lender; or (x) a change in any fees or charges
hereunder or in Sections 2.12 or 11.6 hereof.
Section 10.11 Indemnification. Each Lender agrees to indemnify Agent
(to the extent Agent is not promptly reimbursed by Borrowers), in accordance
with its Participation Percentage from and against any and all liabilities,
obligations, losses, damages, penalties, interests, actions, judgments and suits
of any kind or nature whatsoever which may be imposed on, incurred by or
asserted against Agent relating to or arising out of this Agreement or any of
the other Loan Documents or relating to any action taken or omitted by such
Agent under this Agreement or any of the other Loan Documents, provided that no
Lender shall be liable for any portion of such liabilities, obligations,
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losses, damages, penalties, interest, actions, judgments or suits resulting from
Agent's own gross negligence or willful misconduct.
Section 10.12 Reimbursement of the Agent. Each Lender further agrees to
reimburse Agent, in accordance with its Participation Percentage, for any
reasonable out-of-pocket costs or expenses incurred by Agent in connection with
its duties under this Agreement (including, but not limited to, reasonable fees
and disbursements of counsel, travel and living expenses away from home of
employees or agents of the Agent and compensation of agents or of experts
employed by the Agent to render services for the Lenders hereunder), but only to
the extent such fees, disbursements, expenses and compensation have not been
promptly reimbursed to the Agent by Borrowers. If any such sums are reimbursed
to the Agent by Borrowers after one or more of the Lenders have reimbursed the
Agent for such sums, the Agent will refund such sums ratably to the Lenders who
contributed such sums.
Section 10.13 Sharing of Funds Received. Each Lender and Agent agrees
with Agent and each of the other Lenders that if such Lender shall receive from
a Borrower or any other Person or Persons, whether by payment received otherwise
than in accordance with the terms of the Loan Documents, exercise of the right
of set-off, counterclaim, cross-claim, enforcement of any claim, or proceedings
against any Borrower or any other Person or Persons, proof of claim in
bankruptcy, reorganization, liquidation, receivership or other similar
proceedings, or otherwise, and shall retain and apply to the payment of any of
the Obligations owing to such Lender any amount in excess of its Pro Rata Share
of the payments received by all of the Lenders and the Agent in respect of all
of the Obligations, such Lender will promptly make such dispositions and
arrangements with the other Lenders and the Agent with respect to such excess,
either by way of distribution, pro tanto assignment of claim, subrogation or
otherwise, as shall result in each of the Lenders receiving in respect of the
Obligations owing to it, its Pro Rata Share of such payments.
Section 10.14 Dealing with Lenders. Agent may at all times deal solely
with the several Lenders for all purposes of this Agreement and the protection,
enforcement and collection of the Revolving Credit Notes, including, without
limitation, the acceptance and reliance upon any certificate, consent or other
document executed on behalf of one or more of the Lenders and the division of
payments pursuant to Sections 2.6, 2.7, 2.8, 10.6, and 10.14 hereof. The Agent
shall not have a fiduciary relationship in respect of any Lender by reason of
this Agreement. The Agent shall have no implied duties to the Lenders, or any
obligation to the Lenders to take any action hereunder except any action
specifically provided by this Agreement to be taken by the Agent.
Section 10.15 Agent as Lender. Provident shall have, in its capacity as
a Lender under the Loan Documents, the same obligations and the same rights,
remedies, powers and privileges under this Agreement and the other Loan
Documents as it would have were it not also an Agent.
Section 10.16 Duties Not to be Increased. The duties and liabilities of
Agent under this Agreement and the other Loan Documents shall not be increased
or otherwise changed without its express prior written consent. The Agent shall
have no duty to provide information to the Lenders except as expressly set forth
herein.
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Section 10.17 Lender Credit Decisions. Each Lender acknowledges that it
has, independently of and without reliance upon Agent or any of the other
Lenders, made its own credit analysis and decision to enter into this Agreement
and the other Loan Documents to which it is a party. Each Lender also
acknowledges that it will, independently of and without reliance upon Agent or
any of the other Lenders, continue to make its own credit decisions in taking or
not taking action under this Agreement or any of the other Loan Documents and in
determining the compliance or lack thereof by any Borrower and any other Person
with any provision of any Loan Document or other document or agreement.
Section 10.18 Resignation of Agent. Provident and any successor Agent
may resign as such at any time by giving thirty (30) days' prior written notice
of resignation to each Lender and the Borrowers, such resignation to be
effective on the date which is specified in such notice. Upon any such
resignation by Provident as Agent, or in the event the office of Agent shall
thereafter become vacant for any other reason, the Requisite Lenders shall
appoint a successor Agent, by an instrument in writing signed by such Lenders
and delivered to such successor Agent and the Borrowers whereupon, such
successor Agent shall succeed to all of the rights and obligations of the
retiring Agent as if originally named. The retiring Agent shall duly assign,
transfer and deliver to such successor Agent all moneys at the time held by the
retiring Agent hereunder after deducting therefrom its expenses for which it is
entitled to be reimbursed. Upon such succession of any such successor Agent, the
retiring Agent shall be discharged from its duties and obligations hereunder,
except for its gross negligence or willful misconduct arising prior to its
retirement or removal hereunder. After any Agent's resignation, the provisions
of this Article 10 shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as Agent.
Section 10.19 Assignment of Revolving Credit Notes; Participation.
(a) Each Lender may, with concurrent notice to Agent, assign
all or a portion of its rights and obligations under this Credit Agreement and
the Revolving Credit Notes; provided that (i) for each such assignment, the
parties thereto shall execute and deliver to an assignment and assumption
agreement, in form and substance acceptable to Agent, together with any
Revolving Credit Notes subject to such assignment; (ii) no such assignment shall
reduce the assigning Lender's Credit Commitment to less that Fifty-One Percent
(51%) of such Lender's original Credit Commitment without the consent of Agent;
and (iii) no such assignment shall be for less than Five Million Dollars
($5,000,000) of the aggregate of the Lender's Credit Commitment, unless such
assignment is to a then-current holder of a Revolving Credit Note. Upon such
execution and delivery of such assignment and assumption agreement to Agent,
substantially in the form of Exhibit I hereto, from and after the date specified
as the effective date in such Agreement (the "Acceptance Date"), (x) the
assignee thereunder shall be a party hereto, and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such agreement, such
assignee shall have the rights and obligations of a Lender hereunder and (y) the
assignor thereunder shall, to the extent that rights and obligations hereunder
have been assigned by it pursuant to such agreement, relinquish its rights
(other than any rights it may have pursuant to Section 11.6 which will survive)
and be released from its obligations under this Agreement (and, in the case of
an assignment covering all or the remaining portion of an assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto).
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(b) Each Lender may sell participations of up to forty-nine
percent (49%) of its rights and obligations under the Loan Documents (including,
without limitation, up to such portion of its Credit Commitment, the Loans owing
to it and the Revolving Credit Note held by it); provided, however, that (i)
such Lenders' obligations under the Loan Documents (including, without
limitation, its Credit Commitment to the Borrowers hereunder) shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) such Lender shall remain
the holder of any such Revolving Credit Note for all purposes of the Loan
Documents, (iv) the participating banks or other entities shall be entitled to
the cost protection provisions of Sections 2.12 and 11.6 hereof, but a
participant shall not be entitled to receive pursuant to such provisions an
amount larger than its share of the amount to which the Lender granting such
participation would have been entitled, (v) the Borrowers, the Agent and the
other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under the Loan Documents,
and (vi) no such transfer shall include the transfer of any of such Lender's
rights to grant consents or approve amendments or modifications to the Loan
Documents except with respect to those items requiring the action of or consent
by all of the Lenders or affecting the rights and obligations of Agent. It is
understood and agreed that each Lender may share any and all information
received by it from or on behalf of the Borrowers pursuant to this Agreement or
any of the other Loan Documents with any participant or prospective participant
of such Lender.
ARTICLE 11
PROVISIONS OF GENERAL APPLICATION
Section 11.1 Term of Agreement. This Agreement shall continue in full
force and effect and the duties, covenants, and liabilities of Borrowers
hereunder and all the terms, conditions, and provisions hereof relating thereto
shall continue to be fully operative until all Obligations to Agent and each
Lender have been satisfied in full.
Section 11.2 Notices.
(a) All notices and other communications pursuant to this
Agreement shall be in writing, either delivered in hand or sent by first-class
mail, postage prepaid, or sent by telex, telecopier, facsimile transmission or
telegraph, addressed as follows:
(i) If to Borrowers, at:
Romacorp, Inc.
0000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Xxxxx Xxxxx
Fax Number: (000) 000-0000
with copies to:
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Sentinel Capital Partners
000 Xxxxx Xxxxxx, 00 Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax Number: (000) 000-0000
and
Xxxxxxxx & Xxxxx
Citicorp Center
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxxx Xxxxx
Fax Number: (000) 000-0000
(ii) If to Agent, at:
The Provident Bank
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attn: Xxxx Xxxxx
Fax Number: (000) 000-0000
with a copy to:
Xxxxxxx, Muething & Xxxxxxx, P.L.L.
1800 Provident Tower
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attn: J. Xxxxx Xxxxxxxxx
Fax Number: (000) 000-0000
(iii) If to a Lender, at such address set forth on
Schedule 1;
or to such other addresses or by way of such telex and other numbers as any
party hereto shall have designated in a written notice to the other parties
hereto.
(b) Except as otherwise expressly provided herein, any notice
or other communication pursuant to this Agreement or any other Loan Document
shall be deemed to have been duly given or made and to have become effective
when delivered in hand to the party to which it is directed, or, if sent by
first-class mail, postage prepaid, or by telex, telecopier, facsimile
transmission or telegraph, and properly addressed in accordance with Section
11.2(a), (i) when received by the addressee; or (ii) if sent by first class
mail, postage prepaid, on the third (3rd) Business Day following the day of the
dispatch thereof, whichever of (i) or (ii) shall be the earlier.
Section 11.3 Survival of Representations. All representations and
warranties made by or on behalf of each Borrower in this Agreement, or any of
the other Loan Documents shall be deemed
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to have been relied upon by Agent and each Lender notwithstanding any
investigation made by Agent or any Lender and shall survive the making of each
of the Loans.
Section 11.4 Power of Attorney. Each Borrower acknowledge and agree
that their appointments of Agent as their attorney and agent-in-fact for the
purposes specified in this Agreement is an appointment coupled with an interest
and shall be irrevocable until all of the Obligations are satisfied and this
Agreement is terminated.
Section 11.5 Amendments. Each of the Loan Documents may be modified,
amended or supplemented in any respect whatever, only with the prior written
consent or approval of Agent and the Requisite Lenders or all of the Lenders (as
the case may be) and each other Person (other than a Lender) which is a party to
such Loan Document, all in accordance with the terms of Section 10.10 hereof.
Section 11.6 Costs, Expenses, Taxes and Indemnification.
(a) Borrowers absolutely and unconditionally agree to pay to
the Agent, for the respective pro rata account of the Agent and each Lender,
upon demand by Agent or any Lender at any time and as often as the occasion
therefor may require, whether or not all or any of the transactions contemplated
by any of the Loan Documents are ultimately consummated (i) all reasonable
out-of-pocket costs and expenses which shall at any time be incurred or
sustained by Agent or any of its directors, officers, employees or agents as a
consequence of, on account of, in relation to or any way in connection with the
preparation, negotiation, execution and delivery of the Loan Documents and the
perfection and continuation of the rights of the Lenders and Agent in connection
with the Loans, as well as the preparation, negotiation, execution, or delivery
or in connection with the amendment or modification of any of the Loan Documents
or as a consequence of, on account of, in relation to or any way in connection
with the granting by Agent or any of the Lenders of any consents, approvals or
waivers under any of the Loan Documents including, but not limited to,
reasonable attorneys' fees and disbursements; (ii) all reasonable out-of-pocket
costs and expenses which shall be incurred or sustained by Agent or any of the
Lenders or any of their directors, officers, employees or agents as a
consequence of, on account of, in relation to or any way in connection with the
exercise, protection or enforcement (whether or not suit is instituted) any of
its rights, remedies, powers or privileges under any of the Loan Documents or in
connection with any litigation, proceeding or dispute in any respect related to
any of the relationships under, or any of the Loan Documents (including, but not
limited to, all of the reasonable fees and disbursements of consultants, legal
advisers, accountants, experts and agents for Agent or any of the Lenders, the
reasonable travel and living expenses away from home of employees, consultants,
experts or agents of Agent or any of the Lenders, and the reasonable fees of
agents, consultants and experts not in the full-time employ of Agent or any of
the Lenders for services rendered on behalf of Agent or any of the Lenders); and
(iii) Upon the failure of Borrowers to provide or cause to be provided the
insurance required under Section 6.2(b), Agent, on behalf of the Lenders, shall
have the option to procure and maintain such insurance without notice to
Borrowers.
(b) Borrowers shall absolutely and unconditionally indemnify
and hold harmless Agent and each Lender against any and all claims, demands,
suits, actions, causes of action, damages, losses, settlement payments,
obligations, costs, expenses and all other liabilities
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whatsoever which shall at any time or times be incurred or sustained by Agent or
any Lender or by any of their shareholders, directors, officers, employees,
subsidiaries, Affiliates or agents on account of, or in relation to, or in any
way in connection with, any of the arrangements or transactions contemplated by,
associated with or ancillary to this Agreement or any of the other Loan
Documents, whether or not all or any of the transactions contemplated by,
associated with or ancillary to this Agreement, or any of such Loan Documents
are ultimately consummated.
(c) Borrowers hereby covenant and agree that any sums expended
by Agent or any Lender which Agent or any Lender is entitled to be reimbursed
for pursuant to this Section 11.6, shall be immediately due and payable upon
demand by Agent or any Lender, and shall bear interest at the Default Interest
Rate applicable to Term Lease from the date Agent or any such Lender incurred
such expense until the date such payment is made in full to Agent or such
Lender.
Section 11.7 Language. All notices, applications, certificates,
reports, financial statements and other financial information, correspondence
and all other communications from any Borrower to Agent or any Lender pursuant
to this Agreement or any of the other Loan Documents shall be in the English
language or shall be accompanied by an English translation thereof completely
satisfactory to Agent or such Lender.
Section 11.8 Binding Effect; Assignment. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors in title and assigns; provided, however, that (i) no Borrower may
assign or delegate any of its rights or obligations hereunder to any Person or
Persons without the express prior written consent of the Agent and all of the
Lenders; and (ii) no Lender may assign or delegate its rights or obligation
hereunder to any Person or Persons except in accordance with Section 10.19
hereof.
Section 11.9 Governing Law; Jurisdiction and Venue. ANY DISPUTE BETWEEN
ANY BORROWERS AND THE AGENT, ANY LENDER, OR ANY OTHER HOLDER OF SECURED
OBLIGATIONS ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY
OF THE OTHER LOAN DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR
OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE SUBSTANTIVE INTERNAL LAWS
AND STATUTES OF LIMITATION (WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS)
OF THE STATE OF NEW YORK.
The Agent, each Lender and each Borrower hereby designate all courts of
record sitting in Cincinnati, Ohio, both state and federal, as forums where any
action, suit or proceeding in respect of or arising out of this Agreement, the
Revolving Credit Notes, Loan Documents, or the transactions contemplated by this
Agreement shall be prosecuted as to all parties, their successors and assigns,
and by the foregoing designations the Agent, each Lender, and each Borrower
consents to the jurisdiction and venue of such courts. In the event such
litigation is commenced, each Borrower agrees that service of process may be
made and personal jurisdiction over each Borrower obtained by service of a copy
of the summons, complaint and other pleadings required to commence such
litigation upon Borrower's appointed Agent for Service of Process in the State
of Ohio, which the undersigned hereof designates to be: CT Corporation Systems,
Cincinnati, Ohio. Each
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Borrower recognizes and agrees that the agency has been created for the benefit
of each Borrower, Agent and each Lender and agree that this agency shall not be
revoked, withdrawn, or modified without the consent of the Agent.
Section 11.10 Waiver of Jury Trial. AS A SPECIFICALLY BARGAINED
INDUCEMENT FOR THE LENDERS TO EXTEND CREDIT TO EACH BORROWER, AND AFTER HAVING
THE OPPORTUNITY TO CONSULT COUNSEL, EACH BORROWER HEREBY EXPRESSLY WAIVES THE
RIGHT TO TRIAL BY JURY IN ANY LAWSUIT OR PROCEEDING RELATING TO THIS AGREEMENT
OR ARISING IN ANY WAY FROM THE OBLIGATIONS.
Section 11.11 Waivers. Each Borrower waives notice of nonpayment,
demand, notice of demand, presentment, protest and notice of protest with
respect to the Obligations, or notice of acceptance hereof, notice of the Loans
made, issued, credit extended, or any other action taken in reliance hereon, and
all other demands and notices of any description, except such as are expressly
provided for herein.
Section 11.12 Interpretation and Proof of Loan Documents. Whenever
possible, the provisions of each Loan Document will be construed in such a
manner as to be consistent with this Agreement and each other Loan Document. If
any of the provisions of any Loan Document are inconsistent with this Agreement,
such provisions of this Agreement will supersede such provisions of such Loan
Document. This Agreement, the Loan Documents and all documents relating hereto,
including, without limitation, (a) consents, waivers and modifications which may
hereafter be executed, (b) documents received by the Agent or any Lender at the
closing or otherwise, and (c) financial statements, certificates and other
information previously or hereafter furnished to the Agent or any Lender, may be
reproduced by the Agent or such Lender by an photographic, photostatic,
microfilm, micro-card, miniature photographic or other similar process and the
Agent or such Lender may destroy any original document so reproduced. The
Borrowers agree and stipulate that any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not such
reproduction was made by the Agent of such Lender in the regular course of
business) and that any enlargement, facsimile or further reproduction of such
reproduction shall likewise be admissible in evidence.
Section 11.13 Integration of Schedules and Exhibits. The Exhibits and
Schedules annexed to this Agreement are an integral part of this Agreement and
are incorporated herein by reference.
Section 11.14 Headings. The headings of the Articles, Sections and
paragraphs of this Agreement have been inserted for convenience of reference
only and shall not be deemed to be a part of this Agreement.
Section 11.15 Counterparts. This Agreement may be executed in any
number of counterparts, but all of such counterparts shall together constitute
but one agreement. In making proof of this Agreement, it shall not be necessary
to produce or account for more than one counterpart hereof signed by each of the
parties hereto.
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Section 11.16 Severability. Any provision of this Agreement which is
prohibited and unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
Section 11.17 One General Obligation. All Loans and advances by Lenders
to Borrowers under this Agreement constitute one loan, and all Obligations of
Borrowers to Agent and the Lenders under this Agreement constitute one general
obligation. It is expressly understood and agreed that all of the rights of
Agent and each Lender contained in this Agreement shall likewise apply insofar
as applicable to any modification of or supplement to this Agreement.
[Remainder of page intentionally left blank. Signature page follows.]
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by or on behalf of each of the parties as of the day and in the year first above
written in Cincinnati, Ohio.
SIGNED IN THE PRESENCE OF: Borrower:
ROMACORP OPERATING COMPANY, INC.
_______________________________ By:_________________________________
Name:_______________________________
_______________________________ Title:______________________________
ROMACORP, INC.
_______________________________ By:_________________________________
Name:_______________________________
_______________________________ Title:______________________________
ROMA SYSTEMS, INC.
_______________________________ By:_________________________________
Name:_______________________________
_______________________________ Title:______________________________
ROMA FRANCHISE CORPORATION
_______________________________ By:_________________________________
Name:_______________________________
_______________________________ Title:______________________________
85
ROMA HOLDINGS, INC.
_______________________________ By:_________________________________
Name:_______________________________
_______________________________ Title:______________________________
ROMA DINING LP
_______________________________ By:_________________________________
Name:_______________________________
_______________________________ Title:______________________________
_______________________________ By:_________________________________
Name:_______________________________
_______________________________ Title:______________________________
THE LENDERS:
THE PROVIDENT BANK
_______________________________ By:_________________________________
Name: Xxxx Xxxxx
_______________________________ Title: Vice President
AGENT:
THE PROVIDENT BANK, as Agent
_______________________________ By:_________________________________
Name: Xxxx Xxxxx
_______________________________ Title: Vice President
86
SCHEDULE 1
CREDIT PARTICIPATION
LENDER COMMITMENT PERCENTAGE
THE PROVIDENT BANK Revolving Credit Loan
Xxx Xxxx Xxxxxx Xxxxxx
0xx Xxxxx $ 100%
Xxxxxxxxxx, Xxxx 00000
(000) 000-0000
87
EXHIBITS
Exhibit A Form of Grant of Security Interest in Patents
Exhibit B Form of Grant of Security Interest in Trademarks
Exhibit C Form of Blocked Account Agreement
Exhibit D Form of Compliance Certificate
Exhibit E Form of Fee Mortgage
Exhibit F-1 Form of Pledge Agreement (Stock)
Exhibit F-2 Form of Pledge Agreement (Partnership Interests)
Exhibit G Form of Revolving Credit Promissory Note
Exhibit H Form of Borrower's Counsel Opinion Letter
Exhibit I Form of Lender Assignment and Assumption Agreement
Exhibit J Form of Notice of Election to Convert or Continue a Libor Rate
Loan
Exhibit K Form of Assignment of Franchise Rights and Agreements
Exhibit L Form of Collateral Assignment of Transitional Financial and
Accounting Services Agreement