U.S. $35,000,000
CREDIT AGREEMENT
Dated as of October 31, 1996
By and Among
VICORP RESTAURANTS, INC.
as the Borrower
and
THE FINANCIAL INSTITUTIONS NAMED HEREIN
as the Lenders
and
NATIONSBANK OF TEXAS, N.A.
as the Agent for the Lenders
and
COLORADO NATIONAL BANK
as a Lender
TABLE OF CONTENTS
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Page
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ARTICLE I DEFINITIONS AND ACCOUNTING TERMS 1
1.01 Certain Defined Terms 1
1.02 Computation of Time Periods 9
1.03 Accounting Terms; Fiscal Periods 9
1.04 Other Definitional Provisions 9
ARTICLE II THE FACILITIES AND COMMITMENTS 9
2.01 The Facilities 9
2.02 The Advance Commitment 9
2.03 The Letter of Credit Commitment 9
2.04 Fees 10
2.05 Reduction of the Commitment 10
2.06 Payments and Computations 10
2.07 Increased Capital or Costs and Reduced Return 11
2.08 Interest Rate Contracts 11
ARTICLE III THE ADVANCE FACILITY 11
3.01 The Advances 11
3.02 Making the Advances 12
3.03 Conversion or Continuation of Advances 13
3.04 Additional Provisions Applicable to Eurodollar Rate
Advances 13
3.05 Notes; Repayment 15
3.06 Interest 15
3.07 AdditionalInterest on Eurodollar Rate Advances 15
3.08 Pre-payments 16
3.09 Maximum Interest Rate 16
3.10 Interest Recapture 16
3.11 Extension of Maturity 16
ARTICLE IV THE LETTER OF CREDIT FACILITY 17
4.01 The Letters of Credit 17
4.02 Amounts and Terms 17
4.03 Conditions 17
4.04 Issuing Letters of Credit 17
4.05 Paying under Letters of Credit 18
4.06 Reimbursement Obligations 18
4.07 Compensation for Letters of Credit 18
4.08 Sharing of Payments 18
4.09 Documentation 19
4.10 Indemnification; Exoneration 19
4.11 Termination of Letters of Credit; Cash Collateral 19
ARTICLE V CONDITIONS OF EXTENSIONS OF CREDIT 20
5.01 Conditions Precedent to Initial Extension of Credit 20
5.02 Conditions Precedent to Each Extension of Credit,
Conversion or Continuation 20
ARTICLE VI REPRESENTATIONS AND WARRANTIES 21
6.01 Representations and Warranties of the Borrower 21
ARTICLE VII COVENANTS OF THE BORROWER 23
7.01 Affirmative Covenants 23
7.02 Negative Covenants 25
7.03 Financial Covenants 28
ARTICLE VIII EVENTS OF DEFAULT 29
8.01 Events of Default 29
ARTICLE IX MISCELLANEOUS 31
9.01 Amendments, Etc. 31
9.02 Notices, Etc. 31
9.03 No Waiver; Remedies 31
9.04 Payments Set Aside 31
9.05 Costs, Expenses and Taxes 31
9.06 Right of Set-Off 32
9.07 Sharing of Payments 32
9.08 Indemnification 32
9.09 Change in Accounting Principles 33
9.10 The Agent's Performance of Defaulted Acts 33
9.11 Binding Effect; Assignments; Participations 33
9.12 CHOICE OF LAW 34
9.13 CONSENT TO JURISDICTION 34
9.14 WAIVER OF JURY TRIAL 34
9.15 Term 34
9.16 Execution in Counterparts 35
9.17 Lenders' Creation of Security Interest 35
ARTICLE X THE AGENT 35
10.01 Appointment 35
10.02 Agent's Reliance. Etc. 35
10.03 NationsBank and Affiliates 35
10.04 Lender Credit Decision 35
10.05 Indemnification 36
10.06 Successor Agent 36
10.07 Invalidated Payments 36
CREDIT AGREEMENT
This Credit Agreement is made as of October 31, 1996 by and
among VICORP Restaurants, Inc., a Colorado corporation with an
office located at 000 Xxxx 00xx Xxxxxx, X.X. Xxx 00000, Xxxxxx,
Xxxxxxxx 00000 (the "Borrower"), the banks or other financial
institutions listed on the signature pages hereof (such banks or
other financial institutions and their respective successors and
assigns being referred to collectively as the "Lenders"), and
NationsBank of Texas, N.A., a national banking association
("NationsBank"), as agent for the Lenders (in such capacity, the
"Agent") (said Credit Agreement, as the same may be amended,
modified or supplemented from time to time, being hereinafter
referred to as the "Agreement").
PRELIMINARY STATEMENT
---------------------
The Borrower, the Lenders and the Agent have entered into
this Agreement in order to set forth the terms and conditions
under which the Lenders will, from time to time, make loans and
extend other financial accommodations to or for the benefit of
the Borrower.
NOW, THEREFORE, the Borrower, the Lenders and the Agent
agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement,
the following capitalized terms shall have the following meanings
(such meanings to be equally applicable to both the singular and
plural form of the terms defined):
"Adjusted Consolidated EBITDAR" means, for any period with
respect to the Borrower and its subsidiaries, the sum of the
amounts for such period, of (i) Operating Income, plus (ii)
depreciation, amortization and other non-cash charges deducted in
computing operating income, plus (iii) Consolidated Rental
Payments.
"Adjusted Debt" means, as of the last day of any fiscal
quarter, with respect to the Borrower and its subsidiaries, the
sum of (i) Consolidated Funded Debt, plus (ii) Capital Lease
Obligations, minus (iii) the aggregate outstanding principal
balance of any subordinated debt, plus (iv) the product of
Operating Lease expense for the four fiscal quarters ending on
the date of determination times eight.
"Advance" means an advance by any Lender to the Borrower
pursuant to Article III, and refers to a Base Rate Advance or a
Eurodollar Rate Advance (each of which shall be a "Type" of
Advance).
"Advance Commitment" has the meaning specified in Section 2.02.
"Advance Facility" has the meaning specified in Section 2.01.
"Affiliate" means, with respect to any Person, any other
Person controlled by, controlling or under common control with
such Person, or having similar shareholders owning at least five
percent (5%) of such Person and such other Person, whether such
control be direct or indirect. All of the Borrower's officers,
shareholders holding in excess of five percent (5%) of any class
of capital stock of the Borrower, directors, subsidiary corporations,
joint ventures and partners shall be deemed to be the Borrower's
Affiliates for purposes of this Agreement.
"Aggregate Commitment" means, at any time, the lesser of
$35,000,000 through October 31, 1997, $30,000,000 from November 1, 1997,
through October 31, 1998, and $25,000,000 from November 1, 1998,
through October 31, 1999, as such amounts may be reduced from
time to time pursuant to the terms of this Agreement.
"Aggregate Outstandings" means, at any time, the sum of (i)
the aggregate principal amount of the Advances outstanding at
such time, plus (ii) the aggregate Letter of Credit Obligations
at such time.
"Alternate Base Rate" means, for any day, the greater of (a)
the sum of the Federal Funds Rate plus 0.5%, or (b) the annual
interest rate most recently announced by Agent as its prime rate
(or, if the Person then acting as Agent under this Agreement is
not a bank organized under the Laws of the United States or any
State, then the rate announced by NationsBank of Texas, N.A. as
its prime rate) in effect at its principal office, automatically
fluctuating upward and downward with and as specified in each
announcement without special notice to Borrower or any other
Person (which prime rate may not necessarily represent the lowest
or best rate actually charged to a customer).
"Applicable Commitment Fee" means, on any day, the commitment
fee percentage based on the ratio of debt to capitalization,
calculated as set forth in the definition of "Applicable Margin",
as follows:
Applicable
Commitment
Fee
Ratio of debt to capitalization Percentage
-------------------------------------- ----------
Greater than or equal to 0.35 to 1.0 0.500%
Less than 0.35 to 1.0 but greater than 0.500%
or equal to 0.30 to 1.0
Less than 0.30 to 1.0 but greater than 0.375%
or equal to 0.20 to 1.0
Less than 0.20 to 1.0 0.250%
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office, in the case of a
Base Rate Advance, and such Lender's Eurodollar Lending Office,
in the case of a Eurodollar Rate Advance.
"Applicable Margin" means, on any day, the interest margin
over the Eurodollar Rate, based on a ratio of debt to capitalization,
as follows:
Applicable
Margin for
Eurodollar
Ratio of debt to capitalization Rate
Advances
-------------------------------------- ----------
Greater than or equal to 0.35 to 1.0 1.750%
Less than 0.35 to 1.0 but greater than 1.625%
or equal to 0.30 to 1.0
Less than 0.30 to 1.0 but greater than 1.500%
or equal to 0.20 to 1.0
Less than 0.20 to 1.0 1.250%
For purposes of determining the Applicable Margin, (i) the ratio
of debt to capitalization shall be the ratio of (i) the sum of
(A) Consolidated Funded Debt, plus (B) Capital Lease Obligations
of the Borrower and its subsidiaries, to (ii) the sum of (x)
Consolidated Funded Debt, plus (y) Consolidated Net Worth, plus
(z) Capital Lease Obligations of the Borrower and its subsidiaries,
and shall be calculated quarterly as of the last day of the fiscal
quarter for which the most recent quarterly financial statements have
been delivered pursuant to Section 7.01(b), and shall apply to all
Advances made on or after the date such financial statements are delivered,
until recalculated in accordance with this paragraph. If Borrower
fails to furnish Agent any such financial statements (or the
related compliance certificate) when required pursuant to Section
7.02(b), then the highest applicable margin identified above
shall apply to all subsequent Advances until Borrower furnishes
the required financial statements and compliance certificate.
The initial calculation as of the Closing Date shall be based
upon the financial statements dated as of July 31, 1996.
"Bankruptcy Code" means Title 11 of the United States Code
(11 U.S.C. 101 et seq.), as amended from time to time.
"Base Rate Advance" means an Advance that bears interest as
provided in Section 3.06(a).
"Benefit Plan" means an employee benefit plan as defined in
Section 3(35) of ERISA (other than a Multi-employer Plan) in
respect of which the Borrower or any ERISA Affiliate is, or
within the immediately preceding six (6) years was, an "employer"
as defined in Section 3(5) of ERISA.
"Borrowing" means a borrowing consisting of one or more
Advances of the same Type made on the same day by the Lenders.
"Business Day" means a day of the year on which banks are
not required or authorized to close in Dallas, Texas, and if the
applicable Business Day relates to any Eurodollar Rate Advance, a
day of the year on which dealings are carried on in the London
interbank market.
"Capital Lease" means, as applied to any Person, any lease
of any property (whether real, personal or mixed) by that Person
as lessee that, in conformity with GAAP, is or should be
accounted for as a capital lease on the balance sheet of such
Person.
"Capital Lease Obligations" means, as applied to any Person,
the obligations of such Person as lessee under leases that are
Capital Leases.
"Commitment" means, with respect to each Lender at any time,
such Lender's Pro Rata Share of the Aggregate Commitment at such
time.
"Consolidated Capital Expenditures" means, for any period,
the aggregate of all Permitted Asset Acquisitions and other
expenditures (whether paid in cash or accrued as liabilities
during that period and including that portion of Capital Leases
that is capitalized on the consolidated balance sheet of the
Borrower and its subsidiaries) by the Borrower or any of its
subsidiaries during such period that, in conformity with GAAP,
are required to be included in the property, plant and equipment
or similar fixed asset accounts in the consolidated balance sheet
of the Borrower and its subsidiaries (including equipment which
is purchased simultaneously with the trade-in of existing
equipment owned by the Borrower or any such subsidiary to the
extent of the gross amount of such purchase price less the book
value (net of accumulated depreciation) of the equipment being
traded in at such time), but excluding expenditures made in
connection with the replacement or restoration of assets, to the
extent reimbursed or financed from insurance proceeds paid on
account of the loss of or damage to the assets being replaced or
restored or from awards of compensation arising from the taking
by condemnation or eminent domain of such assets being replaced.
"Consolidated Fixed Charges" means, for any period, (i)
consolidated gross cash payments of interest expense (including
the interest component of Capital Leases) of the Borrower and its
subsidiaries, including, without limitation, all commissions,
discounts and other fees and charges owed with respect to letters
of credit, all as determined in conformity with GAAP, plus (ii)
Consolidated Rental Payments for such period, plus (iii) all
scheduled principal payments required to be made by the Borrower
or any of its subsidiaries during such period with respect to any
Debt.
"Consolidated Funded Debt" means, as at any date of
determination, all interest bearing indebtedness, obligations and
other liabilities of the Borrower and its subsidiaries for
borrowed money or evidenced by bonds, debentures, acceptances,
notes or other similar instruments (whether such interest arises
as a result of accrual or accretion).
"Consolidated Net Worth" means, as at any date of
determination, the amount by which consolidated total assets of
the Borrower and its subsidiaries, determined in conformity with
GAAP, exceed consolidated total liabilities of the Borrower and
its subsidiaries, determined in conformity with GAAP.
"Consolidated Rental Payments" means, for any period, the
aggregate amount of all rents paid or accrued (net of sublease
rents paid or accrued) under all Operating Leases of the Borrower
or any of its consolidated subsidiaries as lessee, as determined
in conformity with GAAP.
"Consolidated Tangible Net Worth" means at any time, the sum
of(i) Consolidated Net Worth, at such time, minus (ii) the
aggregate amount, at such time (on a consolidated basis for the
Borrower and its subsidiaries), of any intangible assets,
including, without limitation, patents, trademarks, service
marks, good will, rights and claims against carriers and
shippers, trade names, rights to refunds and indemnification, and
any other asset that would be classified as an intangible under
GAAP other than leasehold rights.
"Contaminant" means any waste, pollutant, hazardous
substance, toxic substance, hazardous waste, special waste,
petroleum or petroleum-derived substance or waste, or any
constituent of any such substance or waste.
"Conversion Date" means, with respect to any Advance, the
date that such Advance, if a Base Rate Advance, is converted into
a Eurodollar Rate Advance, or, if a Eurodollar Rate Advance, is
converted into a Base Rate Advance, in either case in accordance
with the procedures described in Section 3.03.
"Costs and Expenses" has the meaning specified in Section 9.05.
"Debt" means, as applied to any Person, (i) indebtedness for
borrowed money of such Person, (ii) obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments,
(iii) obligations of such Person to pay the deferred purchase price
of property or services, except trade accounts payable and accrued
expenses arising in the ordinary course of business but only if and
so long as the same are payable on available trade terms, (iv) Capital
Lease Obligations of such Person, (v) obligations of such Person under
direct or indirect guaranties in respect of, and obligations (contingent
or otherwise) to purchase or otherwise acquire, or otherwise to
assure a creditor against loss in respect of, indebtedness or
obligations of others of the kinds referred to in clauses (i)
through (iv) above, and (vi) liabilities of such Person in
respect of unfunded vested benefits under Benefit Plans.
"Default" means an event which with the lapse of time or the
giving of notice or both would constitute an Event of Default.
"Domestic Lending Office" means, with respect to each
Lender, the office of such Lender specified as such Lender's
"Domestic Lending Office" on the signature pages hereof or such
other office as such Lender may from time to time specify to the
Borrower and the Agent.
"DOL" means the United States Department of Labor and any
Person succeeding to the functions thereof.
"Eligible Interest Rate Contract" has the meaning specified
in Section 2.08.
"ERISA" means the Employee Retirement Income Security Act of
1974, any amendments thereto, any successor statute, and any
regulations or guidance promulgated thereunder.
"ERISA Affiliate" means any (i) corporation which is a
member of the same controlled group of corporations (within the
meaning of Section 414(b) of the IRC) as the Borrower, (ii)
partnership or other trade or business (whether or not
incorporated) under common control (within the meaning of Section
414(c) of the IRC) with the Borrower, or (iii) member of the same
affiliated service group (within the meaning of Section 414(m) of
the IRC) as the Borrower, any corporation described in clause (i)
above or any partnership or trade or business described in clause
(ii) above.
"Eurocurrency Liabilities" has the meaning assigned to that
term in Regulation D of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"Eurodollar Lending Office" means, with respect to each
Lender, the office of such Lender specified as such Lender's
"Eurodollar Lending Office" on the signature pages hereof, or
such other office as such Lender may from time to time specify to
the Borrower and the Agent.
"Eurodollar Rate" means, for any Eurodollar Rate Advance for
any Interest Period therefor, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) appearing on
Telerate Page 3750 (or any successor page) as the London
interbank offered rate for deposits in Dollars at approximately
11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period for a term comparable to such Interest
Period. If for any reason such rate is not available, the term
"Eurodollar Rate" shall mean, for any Eurodollar Rate Advance for
any Interest Period therefor, the rate per annum (rounded upwards,
if necessary, to the nearest 1/100 of 1%) appearing on
Reuters Screen LIBO Page as the London interbank offered rate for
deposits in Dollars at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period;
provided, however, that if more than one rate is specified on
Reuters Screen LIBO Page, the applicable rate shall be the
arithmetic mean of all such rates.
"Eurodollar Rate Advance" means an Advance which bears
interest as provided in Section 3.06(b).
"Eurodollar Rate Reserve Percentage" means, with respect to
each Lender, for any Interest Period for any Eurodollar Rate
Advance, the reserve percentage applicable during such Interest
Period (or if more than one such percentage shall be so
applicable, the daily average of such percentages for those days
in such Interest Period during which any such percentage shall be
so applicable), with respect to such Lender, under regulations
issued from time to time by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum
reserve requirement (including, without limitation, any
emergency, supplemental or other marginal reserve requirement),
if any, for such Lender, with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities having a term
equal to such Interest Period.
"Event of Default" has the meaning specified in Section 8.01.
"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 immediately 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 on such transactions received by
the Agent from three federal funds brokers of recognized standing
selected by it.
"Final Order" has the meaning specified in Section 9.08(a).
"GAAP" means generally accepted accounting principles set
forth in the rules, regulations, statements, opinions and
pronouncements of the American Institute of Certified Public
Accountants and the Financial Accounting Standards Board (or
agencies with similar functions and of comparable stature and
authority within the accounting profession), which are applicable
to the circumstances as of the date of determination.
"Governmental Acts" has the meaning specified in Section 4.10(a).
"Governmental Authority" means any nation or government, any
federal, state, city, town, municipality, county, local or other
political subdivision thereof or thereto and any department,
commission, board, bureau, instrumentality, agency or other
entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Indemnified Parties" has the meaning specified in Section 9.08(a).
"Interest Period" means, for each Eurodollar Rate Advance, a
period of one (1), two (2) or three (3) months, as the Borrower
may select, upon notice received by the Agent not later than noon
(Dallas time) on the third Business Day prior to the first day of
such period, and commencing on the date of such Advance, the date
of continuation of such Advance pursuant to Section 3.03 or the
date of conversion of a Base Rate Advance pursuant to Section
3.03; provided, however, that:
(i) the aggregate principal amount of all Advances having
Interest Periods ending after any Principal Repayment Date shall
not exceed the principal amount of all Advances permitted to be
outstanding after giving effect to the principal payments to be
made on or prior to such Principal Repayment Date;
(ii) the Borrower may not select any Interest Period that
ends after the Maturity Date;
(iii) Interest Periods commencing on the same date for
Advances shall be of the same duration; and
(iv) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day
of such Interest Period shall be extended to occur on the next
succeeding Business Day, provided, however, that if such extension
would cause the last day of such Interest Period to
occur in the next following calendar month, the last day of such
interest Period shall occur on the next preceding Business Day.
"Interest Period Expiration Date" means the last day of
any Interest Period for any Eurodollar Rate Advance.
"Interest Rate Contracts" means interest rate swap
agreements, interest rate collar agreements, options on any of
the foregoing, or any other agreements or arrangements designed
to provide protection against fluctuations in interest rates.
"IRC" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter, any
successor statute and any regulations or guidance promulgated
thereunder.
"IRS" means the Internal Revenue Service and any Person
succeeding to the functions thereof.
"Letter of Credit" means any letter of credit issued
under this Agreement upon the application of, and for the account
of, the Borrower.
"Letter of Credit Application" means, with respect to a
Letter of Credit, such form of application therefor and form of
reimbursement agreement therefor (whether in a single or several
documents) as the Agent may employ in the ordinary course of its
business for its own account without requirement of collateral
security.
"Letter of Credit Commitment" has the meaning specified in Section 2.03.
"Letter of Credit Facility" has the meaning specified in Section 2.01.
"Letter of Credit Fee" has the meaning specified in Section 4.07.
"Letter of Credit Obligations" means, at any time, the
sum of (i) the aggregate Reimbursement Obligations at such time,
plus (ii) the maximum aggregate amount available for drawing
under Letters of Credit at such time.
"Letter of Credit Rate" has the meaning specified in Section 4.07.
"Lien" means any mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, security
arrangement, security interest, encumbrance for the payment of
money, lien (statutory or other), preference, priority or other
security agreement or preferential arrangement of any kind or
nature whatsoever.
"Loan Documents" means this Agreement, the Notes, the
Credit Agreement of even date herewith between NationsBank and
the Borrower, and each of the other instruments, documents and
agreements executed and/or delivered by the Borrower in
connection herewith and therewith (including, without limitation,
Letter of Credit Applications).
"Majority Lenders" means those Lenders whose Pro Rata
Shares aggregate 66 2/3%.
"Maturity Date" means October 31, 1999.
"Maximum Amount" and "Maximum Rate" respectively mean,
for a Lender, the maximum non-usurious amount and the maximum non-
usurious rate of interest that, under applicable law, such Lender
is permitted to contract for, charge, take, reserve or receive on
the Obligations.
"Multiemployer Plan" means a Plan maintained pursuant
to a collective bargaining agreement or any other arrangement to
which the Borrower or any ERISA Affiliate is a party and to which
more than one employer is obligated to make contributions.
"Net Equity Issuance Proceeds" means the net cash
proceeds received by the Borrower or any of its subsidiaries from
the issuance and sale of equity securities.
"Note" has the meaning specified in Section 3.05.
"Notice of Borrowing" has the meaning specified in Section 3.02(a).
"Notice of Continuation or Conversion" has the meaning
specified in Section 3.03(b).
"Obligations" means and includes all loans, advances,
debts, liabilities, obligations, covenants and duties owing to
the Agent or any of the Lenders from the Borrower of any kind or
nature, present or future, arising under any of the Loan
Documents, whether or not for the payment of money, whether
arising by reason of an extension of credit, opening of a letter
of credit, loan, guaranty, indemnification or in any other
manner, whether direct or indirect, absolute or contingent, due
or to become due, now existing or hereafter arising and the
performance obligations of the Borrower under any Eligible
Interest Rate Contracts. The term "Obligations" includes,
without limitation, the principal amount of all Advances and
Reimbursement Obligations, interest, charges, expenses, fees,
attorneys' and paralegals' fees and any other sums chargeable to
the Borrower under this Agreement.
"Operating Income" means earnings before interest expenses,
taxes and extraordinary gains and losses, calculated in accordance
with GAAP.
"Operating Lease" means, as applied to any Person, any lease
of any property (whether real, personal or mixed) by that
Person as lessee which is not a Capital Lease.
"PBGC" means the Pension Benefit Guaranty Corporation
and any Person succeeding to the functions thereof.
"Permitted Asset Acquisition" means (a) any acquisition
in any fiscal year by the Borrower from any of the Borrower's
franchisees of the franchise granted by the Borrower to such
franchisee and all or substantially all of the assets of such
franchisee associated with such franchise, (b) any acquisition by
the Borrower of all or substantially all of the assets of any
Person, other than a subsidiary of the Borrower, in any fiscal
year, and (c) any acquisition by the Borrower of the capital
stock or ownership interests of any other Person in any fiscal
year, provided that the aggregate consideration paid by the
Borrower in connection with all acquisitions permitted pursuant
to clauses (a), (b) and (c) above in such fiscal year may not
exceed $5,000,000, and shall be included in Consolidated Capital
Expenditures for such fiscal year.
"Permitted Existing Debt" means the Debt of the Borrower
or any of its subsidiaries reflected on Schedule 7.02(b).
"Permitted Existing Liens" means the Liens against
property of the Borrower or any of its subsidiaries reflected on
Schedule 7.02(a).
"Permitted Franchisee Guarantees" means any guarantee
by the Borrower of obligations of any of the Borrower's
franchisees arising in connection with the operation or
maintenance of such franchisee's franchise so long as the
aggregate amount of all such franchisee obligations guaranteed by
the Borrower at any time does not exceed $10,000,000.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture or other entity, or a
government or any political subdivision or agency thereof.
"Plan" means an employee pension benefit plan that is
covered by Title IV of ERISA or subject to the minimum funding
standards under Section 412 of the IRC as to which the Borrower
or any ERISA Affiliate may have any liability.
"Principal Repayment Date" means any date on which an
installment of the aggregate outstanding principal amount of the
Advances is due under the Notes.
"Prior Agreement" means the Second Amended and Restated
Credit Agreement dated as of June 18, 1993, among Borrower, the
financial institutions named therein as lenders, and Citibank,
N.A., as agent for such lenders, as amended.
"Pro Rata Share" means, with respect to any Lender, the
percentage specified on the signature pages hereto or as
hereafter specified in the documentation governing any
assignments of such Lender's Commitment.
"Rate Adjustment Period" means a period (i) commencing
on the first day of the month next succeeding the date that the
Agent receives internal financial statements acceptable to it
demonstrating that the Borrower has maintained, for two (2)
consecutive fiscal quarters, the Required Rate Adjustment Level,
and (ii) continuing for so long as the Borrower continues to
maintain such Required Rate Adjustment Level.
"Reimbursement Obligation" has the meaning specified in
Section 4.06.
"Reportable Event" means any of the events described in
Section 4043 of ERISA or the regulations issued thereunder.
"Request for Letters of Credit" has the meaning
specified in Section 4.04.
"Required Rate Adjustment Level" means a ratio of
Adjusted Consolidated EBITDAR to Consolidated Fixed Charges,
measured as of the end of the most recently ended fiscal quarter
for the period of four fiscal quarters ending on such date, of at
least 1.75 to 1.
"SEC" means the Securities and Exchange Commission and
any successor agency.
"Single Employer Plan" means a Plan maintained by the
Borrower or any ERISA Affiliate for employees of the Borrower or
such ERISA Affiliate.
"Taxes" means, for any Person, taxes, assessments or
other governmental charges or levies imposed upon it, its income,
or any of its properties, franchises or assets.
"Termination Date" means the earliest to occur of (i)
the Maturity Date, (ii) the termination in whole of the
Commitments pursuant to Section 8.01, or (iii) the termination in
whole of the Advance Commitment pursuant to Section 2.05.
"Termination Event" means (i) with respect to a Benefit
Plan, a Reportable Event, or (ii) the withdrawal of the Borrower
or any ERISA Affiliate from a Benefit Plan during a plan year in
which it was a "substantial employer" as defined in Section
4001(a)(2) of ERISA, or (iii) the imposition of an obligation on
the Borrower or any ERISA Affiliate under Section 4041 of ERISA
to provide affected parties written notice of intent to terminate
a Benefit Plan in a distress termination described in Section
4041(c) of ERISA, or (iv) the institution of proceedings to
terminate a Benefit Plan by the PBGC, or (v) any other event or
condition that might constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to
administer, any Benefit Plan, or (vi) the partial or complete
withdrawal of the Borrower or any ERISA Affiliate from a Multi-
employer Plan.
"Unfunded Liabilities" means, (i) in the case of a
Single Employer Plan, the amount, if any, by which the present
value of all vested nonforfeitable benefits under such Plan
exceeds the fair market value of all Plan assets allocable to
such benefits, all determined as of the most recent valuation
date for such Plan, and (ii) in the case of a Multiemployer Plan,
the withdrawal liability of the Borrower or any ERISA Affiliate
under such Plan.
"Unused Commitment" means, at any time, the excess of
the Aggregate Commitment at such time over the Aggregate
Outstandings at such time.
SECTION 1.02. Computation of Time Periods. In this Agreement
in the computation of periods of time from a specified date to a
later specified date, the word "from" means "from and including"
and the words "to" and "until" each means "to but excluding."
SECTION 1.03. Accounting Terms; Fiscal Periods. Except as
otherwise permitted pursuant to Section 9.09 all accounting terms
not specifically defined herein shall be construed in accordance
with GAAP. All references in this Agreement to any fiscal period
shall refer to a fiscal period of the Borrower, unless otherwise
specified.
SECTION 1.04. Other Definitional Provisions. References to
"Sections", "Articles", "Schedules" and "Exhibits" shall be to
Sections, Articles, Schedules and Exhibits, respectively, of
this Agreement unless otherwise specifically provided.
ARTICLE II
THE FACILITIES AND COMMITMENTS
SECTION 2.01. The Facilities. On and subject to the terms and
conditions hereinafter set forth each Lender severally agrees to
extend credit and other financial accommodations of the kind
described below to the Borrower, from time to time, on any
Business Day during the period from the date hereof until the
Termination Date by (i) making Advances to the Borrower pursuant
to Article III (the "Advance Facility"); and (ii) issuing Letters
of Credit for the account of the Borrower pursuant to Article IV
(the "Letter of Credit Facility").
SECTION 2.02. The Advance Commitment. The credit extended by
the Lenders by making Advances under the Advance Facility shall
be in an aggregate principal amount of Advances not to exceed at
any time outstanding the excess of the Aggregate Commitment over
the Letter of Credit Obligations outstanding at such time, as
such amount may be reduced pursuant to Section 2.05, during the
period from the date hereof to the Termination Date (the "Advance
Commitment").
SECTION 2.03. The Letter of Credit Commitment. The credit extended
by the Lenders by issuing Letters of Credit under the Letter of
Credit Facility shall be in an aggregate amount of Letter of
Credit Obligations outstanding at any time not to exceed the
lesser of (a) $10,000,000 and (b) the excess of the Aggregate
Commitment over the aggregate principal amount of Advances
outstanding at such time, as such amount may be reduced pursuant
to Section 2.05, during the period from the date hereof to the
Termination Date (the "Letter of Credit Commitment").
SECTION 2.04. Fees. The Borrower agrees to pay (i) to the
Agent, for the account of each Lender, the upfront fees described
in the fee letter agreement of even date herewith between the
Borrower and NationsBank, (ii) to NationsBank, for its own
account, the fees described in the second fee letter agreement of
even date herewith, and (iii) to NationsBank, for its own account
and the account of the Lenders, as applicable, the Letter of
Credit fees described in Section 4.07. The Borrower also agrees
to pay to the Agent, for the account of each Lender, a commitment
fee on such Lender's Pro Rata Share of the average daily Unused
Commitment from the date of this Agreement until the Termination
Date equal to the Applicable Commitment Fee per annum. Such
commitment fee shall be payable on the last day of each March,
June, September and December, commencing December 31, 1996,
during the term of this Agreement, and on the Termination Date.
SECTION 2.05. Reduction of the Commitment. The Borrower shall
have the right, upon at least thirty (30) Business Days' notice
to the Agent, to terminate in whole or reduce in part the
Aggregate Commitment by an amount not exceeding the Unused
Commitment, each such reduction to be allocated among the unused
portions of the Advance Commitment and the Letter of Credit
Commitment, as the Borrower shall specify, in accordance with
each Lender's Pro Rata Share thereof; provided, however, that
each partial reduction shall be in the amount of $1,000,000 and
in integral multiples of $1,000,000 in excess of that amount.
SECTION 2.06. Payments and Computations.
(a) The Borrower shall make each payment hereunder by
wire transfer of immediately available funds not later than Noon
(Dallas time) on the day when due in United States Dollars to the
Agent, for the account of the Lenders, at the Agent's address
referred to in Section 9.02. The Agent will promptly thereafter
cause to be distributed like funds relating to the payment of
principal or interest or commitment fees ratably (other than
amounts payable pursuant to Section 2.07, 3.07, or 9.05(b)) to
the Lenders for the account of their respective Applicable
Lending office, and like funds relating to the payment of any
other amount payable to any Lender to such Lender for the account
of its Applicable Lending office, in each case to be applied in
accordance with the terms of this Agreement.
(b) The Borrower hereby authorizes each Lender, if and
to the extent payment owed to such Lender is not made when due
hereunder, to charge from time to time against any or all of the
Borrower's accounts with such Lender any amount so due, or, upon
notice to the Borrower, to make Base Rate Advances in the amount
of and in payment of such amounts.
(c) All computations of interest on Base Rate Advances
shall be made by the Agent, on the basis of a year of 365 or 366
days, as the case may be, for the actual number of days
(including the first day but excluding the last day) occurring in
the period for which such interest is payable. All computations
of interest on Eurodollar Rate Advances and of fees (including,
without limitation, all computations of interest pursuant to
Section 3.07) shall be made by the Agent, on the basis of a year
of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in
the period for which such interest or fees are payable. Each
determination by the Agent of an interest rate hereunder shall be
conclusive and binding for all purposes, absent manifest error.
(d) Whenever any payment hereunder shall be stated to
be due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day, and such extension of
time shall in such case be included in the computation of payment
of interest or fees, as the case may be; provided, however, that
if such extension would cause payment of interest on or principal
of Eurodollar Rate Advances to be made in the next following
calendar month, such payment shall be made on the immediately
preceding Business Day.
(e) Unless the Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the
Lenders hereunder that the Borrower will not make such payment in
full, the Agent may assume that the Borrower has made such
payment in full to the Agent on such date and the Agent may, in
reliance upon such assumption, cause to be distributed to each
Lender on such date an amount equal to the amount then due such
Lender. If and to the extent the Borrower shall not have so made
such payment in full to the Agent, each Lender shall repay to the
Agent forthwith on demand such amount distributed to such Lender
together with interest thereon, for each day from the date such
amount is distributed to such Lender until the date such Lender
repays such amount to the Agent, at the Federal Funds Rate.
SECTION 2.07. Increased Capital or Costs and Reduced Return.
(a) If, due to either (i) the introduction of or any change
(other than any change by way of imposition or increase of
reserve requirements included in the Eurodollar Rate Reserve
Percentage) in or in the interpretation of any law or regulation;
or (ii) the compliance with any guideline or request from any
central bank or other Governmental Authority (whether or not
having the force of law), there shall be any increase in the cost
to any Lender of agreeing to make or making, funding or
maintaining Eurodollar Rate Advances, by an amount deemed by such
Lender to be material, then the Borrower shall, from time to
time, promptly following demand by such Lender (with a copy of
such demand to the Agent), pay to the Agent, for the account of
such Lender, such additional amount or amounts as will compensate
such Lender for such increased cost.
(b) If after the date hereof, any Lender shall have
determined that the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change therein, or
any change 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 such Lender (or its Applicable Lending Office) with any
request or directive regarding capital adequacy (whether or not
having the force of law) of any such Governmental 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 an amount deemed by such Lender to be
material, then the Borrower shall, from time to time, promptly
following demand by such Lender (with a copy of such demand to
the Agent), pay to the Agent, for the account of such Lender,
such additional amount or amounts as will compensate such Lender
for such reduction.
(c) Each Lender agrees to promptly notify the Borrower
and Agent of any event of which such Lender has knowledge,
occurring after the date hereof, which will entitle such Lender
to compensation pursuant to this Section 2.07 and will designate
a different Applicable Lending Office if such designation will
avoid the need for, or reduce the amount of, such compensation
and will not, in the judgment of such Lender, be otherwise
disadvantageous to such Lender. A certificate of the Lender
claiming compensation under this Section 2.07 and setting forth
the additional amount or amounts to be paid to such Lender
hereunder, submitted to the Borrower and the Agent
contemporaneously, shall be conclusive in the absence of manifest
error. In determining such amount, such Lender may use any
reasonable averaging and attribution methods.
SECTION 2.08. Interest Rate Contracts. At any time a Lender
may, but shall have no obligation to, enter into Interest Rate
Contracts with respect to the Advances, provided that the notional
amount for all such Interest Rate Contracts in effect at any time
shall not exceed $35,000,000 in the aggregate. The Borrower and the
Lender entering into an Interest Rate Contract shall give written
notice to the Agent, at least three (3) Business Days prior to
entering into any Interest Rate Contract, specifying the term
thereof and the notional amount thereof. The Agent shall, within
two (2) Business Days of such notice, notify the applicable
Lender and the Borrower whether the sum of (A) the aggregate
notional amount of all Interest Rate Contracts then in effect
plus (B) the notional amount of the proposed Interest Rate
Contract, is within the limit set forth above, and if the sum of
the notional amounts described in clauses (A) and (B) above is
within such limit at such time, then the proposed Interest Rate
Contract shall be deemed an "Eligible Interest Rate Contract"
(whether or not the aggregate notional amount subsequently
exceeds such limit).
ARTICLE III
THE ADVANCE FACILITY
SECTION 3.01. The Advances. Each Lender severally agrees, on
the terms and conditions hereinafter set forth, to make Advances
to the Borrower from time to time on any Business Day during the
period from the date hereof until the Termination Date in an
amount not to exceed the excess of (i) such Lender's Pro Rata
Share of the Advance Commitment at such time over (ii) the
aggregate principal amount of all Advances made by such Lender
and outstanding at such time. Each Advance made by a Lender
shall be in an amount not less than such Lender's Pro Rata Share
of $250,000. Each Borrowing shall consist of Advances made on
the same day by the Lenders, each Lender's Advance as part of a
Borrowing to be in an amount equal to its Pro Rata Share of such
Borrowing. Within the limits of the Advance Commitment in effect
from time to time, the Borrower may borrow pursuant to this
Section 3.01, prepay pursuant to Section 3.08, and reborrow under
this Section 3.01.
SECTION 3.02. Making the Advances.
(a) Each Borrowing shall be made on notice by the Borrower
to the Agent, given not later than 12:00 noon (Dallas time)(i)
in the case of a Borrowing comprised of Base Rate Advances, on
the date of the proposed Borrowing; and (ii) in the case of a
Borrowing comprised of Eurodollar Rate Advances, on the third
Business Day prior to the date of the proposed Borrowing;
provided, however, that (x) in the case of any requested
Borrowing to be comprised of Base Rate Advances, the proceeds of
which Base Rate Advances are to be applied toward the Borrower's
Reimbursement Obligations under a Letter of Credit, the notice
effecting such request may be given at or prior to 2:00 P.M. on
the date of the drawing giving rise to such Reimbursement
Obligation for a Borrowing comprised of Base Rate Advances to be
made on such date in the amount of such Reimbursement Obligation;
and (y) if a Default or an Event of Default has occurred and is
continuing, the Borrower shall not be entitled to request
Borrowings comprised of Eurodollar Rate Advances and the Lenders
shall not be required to make any Advances. Each such notice of
a borrowing (a "Notice of Borrowing") shall be by telephone,
confirmed immediately in writing (whether by telecopy, telex,
cable or otherwise), in substantially the form of Exhibit A,
specifying therein the requested (i) date of such Borrowing
(which shall be a Business Day); (ii) Type of Advances comprising
such Borrowing; (iii) amount of such Borrowing; and (iv) Interest
Period for such Advance in the case of a requested Borrowing
comprised of Eurodollar Rate Advances. Promptly after receipt of
a Notice of Borrowing under this Section 3.02 (or telephonic
notice in lieu thereof), the Agent shall notify each Lender by
telex, telecopy, telegram, telephone or other similar form of
transmission of the proposed Borrowing, and in each case of a
proposed Borrowing comprised of Eurodollar Rate Advances, of the
applicable interest rate. Each Lender shall, before Noon (Dallas
time) on the date of such Borrowing, make available to the Agent
at its address referred to in Section 9.02, in same day funds,
such Lender's Pro Rata Share of such Borrowing. After the
Agent's receipt of such funds, and upon fulfillment of the
applicable conditions set forth in Article V, the Agent will make
same day funds available to the Borrower at the Agent's address
referred to in Section 9.02 in an amount equal to the amount
requested by the Borrower for such Borrowing on the date
requested by the Borrower therefor.
(b) Each Notice of Borrowing shall be irrevocable and
binding on the Borrower. In the case of any Borrowing that the
related Notice of Borrowing specifies is to be comprised of
Eurodollar Rate Advances, the Borrower shall indemnify each
Lender against any loss, cost or expense incurred by such Lender
as a result of any failure by the Borrower to fulfill, on or
before the date specified in such Notice of Borrowing for such
Borrowing, the applicable conditions set forth in Article V,
including, without limitation, any loss (including loss of
anticipated profits), cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired
by such Lender to fund the Advance to be made by such Lender as
part of such Borrowing when such Advance, as a result of such
failure, is not made on such date.
(c) Unless the Agent shall have received notice from a
Lender prior to the date of any Borrowing that such Lender will
not make available to the Agent such Lender's Pro Rata Share of
such Borrowing, the Agent may assume that such Lender has made
such portion available to the Agent on the date of such Borrowing
in accordance with and to the extent provided in subsection (a)
of this Section 3.02 and the Agent may, in reliance upon such
assumption, make available to the Borrower on such date a
corresponding amount; provided, however, that if the Agent has
received such notice from such Lender, the Agent may not make
such assumption and may not make available to the Borrower on
such date such corresponding amount. If and to the extent such
Lender shall not have so made such Pro Rata Share available to
the Agent, such Lender and the Borrower severally agree to repay
to the Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date such
amount is made available to the Borrower until the date such
amount is repaid to the Agent, at the Federal Funds Rate for such
day. If such Lender shall repay to the Agent such corresponding
amount, such amount so repaid shall constitute such Lender's
Advance as part of such Borrowing for purposes of this Agreement.
(d) The failure of a Lender to make the Advance to be made
by it as part of any Borrowing shall not relieve any other Lender
of its obligation, if any, hereunder to make its Advance on the
date of such Borrowing, but no Lender shall be responsible for
the failure of any other Lender to make the Advance to be made by
such other Lender on the date of any Borrowing.
SECTION 3.03. Conversion or Continuation of Advances.
(a) The Borrower shall have the option (i) to convert at
any time all or any part of the outstanding Base Rate Advances
comprising the same Borrowing into one or more Eurodollar Rate
Advances, each for an Interest Period commencing on the
applicable Conversion Date; (ii) to convert on any Interest
Period Expiration Date all of the outstanding Eurodollar Rate
Advances comprising the same Borrowing into one or more Base Rate
Advances; or (iii) to continue on any Interest Period Expiration
Date all or any part of outstanding Eurodollar Rate Advances
comprising the same Borrowing as one or more Eurodollar Rate
Advances, each for an Interest Period commencing on such Interest
Period Expiration Date; provided, however, that (A) if the
Borrower shall not have exercised its options set forth in either
clauses (ii) or (iii) of this Section 3.03(a) with respect to any
Eurodollar Rate Advances comprising a Borrowing by delivery to
the Agent of a Notice of Continuation or Conversion in accordance
with the terms of Section 3.03(b), the Borrower shall be deemed
to have irrevocably elected to convert such Eurodollar Rate
Advances into Base Rate Advances on the Interest Period
Expiration Date for such Advances, and (B) if a Default or an
Event of Default has occurred and is continuing the Borrower
shall not be entitled to convert Base Rate Advances or continue
Eurodollar Rate Advances.
(b) Each continuation or conversion of Advances pursuant to
this Section 3.03 shall be made on notice by the Borrower to the
Agent given not later than Noon (Dallas time) on (i) in the case
of the conversion of one or more Eurodollar Rate Advances into
Base Rate Advances, the first Business Day prior to the date of
the proposed conversion, and (ii) in every other instance, the
third Business Day prior to the date of the proposed conversion
or continuation. Each such notice of continuation or conversion
(a "Notice of Continuation or Conversion") shall be by telephone,
confirmed immediately in writing (whether by telecopy, telex,
cable or otherwise), in substantially the form of Exhibit B,
specifying therein the requested (i) date of such continuation or
conversion (which shall be a Business Day); (ii) amount of the
Advances to be converted or continued; (iii) nature of such
conversion or continuation; and (iv) Interest Periods for such
Advances, in the case of a conversion of one or more Base Rate
Advances to a Eurodollar Rate Advance or a continuation of one or
more Eurodollar Rate Advances. Promptly after receipt of a
notice of Continuation or Conversion (or telephonic notice in
lieu thereof), the Agent shall notify each Lender by telex,
telecopy, telegram, telephone or other similar form of
transmission, of the proposed continuation or conversion.
(c) Each Notice of Continuation or Conversion shall be
irrevocable and binding upon the Borrower. In the case of any
Advance which the related Notice of Continuation or Conversion
specifies is to be a Eurodollar Rate Advance, the Borrower shall
indemnify each Lender against any loss, cost or expense incurred
by such Lender as a result of any failure to fulfill on or before
the date of the continuation or conversion specified in such
Notice of Continuation or conversion for such Advance the
applicable conditions set forth in Article V, including, without
limitation, any loss (including loss of anticipated profits),
cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender
to fund such Advance when such Advance is not converted or
continued, as the case may be, on such date.
SECTION 3.04. Additional Provisions Applicable to Eurodollar
Rate Advances. Anything in Section 3.02 or 3.03 above to the
contrary notwithstanding:
(a) If any Lender shall notify the Borrower (with a
copy of such notice to the Agent) that the introduction of or any
change in or in the interpretation of any law or regulation makes
it unlawful, or that any central bank or other Governmental
Authority asserts that it is unlawful, for such Lender or its
Eurodollar Lending Office to perform its obligations hereunder to
make Eurodollar Rate Advances or to fund or maintain Eurodollar
Rate Advances hereunder, the right of the Borrower to select
Eurodollar Rate Advances for any Borrowing or to convert any Base
Rate Advances to Eurodollar Rate Advances shall be suspended
until such Lender shall notify the Borrower (with a copy of such
notice to the Agent) that the circumstances causing such
suspension no longer exist. Upon any Lender's giving of the
notice to the Borrower referred to in this Section 3.04(a), the
Borrower shall, upon at least one (1) Business Day's written
notice to such Lender (with a copy of such notice to the Agent),
or if permitted by applicable law no later than the date
permitted thereby, in the Borrower's sole discretion, either (i)
prepay, notwithstanding the provisions of Section 3.08 hereof,
the principal amount of all outstanding Eurodollar Rate Advances
of such Lender together with accrued interest thereon to the date
of payment; or (ii) convert, notwithstanding the provisions of
Section 3.03, all Eurodollar Rate Advances of all Lenders then
outstanding into Base Rate Advances. Upon any such prepayment or
conversion of a Eurodollar Rate Advance, the Borrower shall
reimburse the applicable Lender in respect thereof pursuant to
Section 9.05(b).
(b) If the Agent shall, on the date of the making of
any requested Borrowing comprised of Eurodollar Rate Advances,
the continuation pursuant to Section 3.03 of any Eurodollar Rate
Advances or the conversion pursuant to Section 3.03 of any Base
Rate Advances, notify the Borrower that it is unable, for any
reason whatsoever, to obtain timely information for determining
the Eurodollar Rate for such Advances, the right of the Borrower
to select Eurodollar Rate Advances for such Borrowing or any
Borrowing subsequently made, converted or continued shall be
suspended until the Agent shall notify the Borrower that the
circumstances causing such suspension no longer exist and each
Advance requested to be converted into or made or continued as a
Eurodollar Rate Advance shall be a Base Rate Advance.
(c) If any Lender shall, at least one (1) Business Day
prior to the date of the making of any requested Borrowing to be
comprised of Eurodollar Rate Advances, the continuation pursuant
to Section 3.03 of any Eurodollar Rate Advances or the conversion
pursuant to Section 3.03 of any Base Rate Advances, notify the
Borrower (with a copy of such notice to the Agent) that the
Eurodollar Rate for such Advances will not adequately reflect the
cost to such Lender of making or funding such Advances, the right
of the Borrower to select Eurodollar Rate Advances for such
Borrowing or any Borrowing subsequently made, converted or
continued shall be suspended until such Lender shall notify the
Borrower (with a copy of such notice to the Agent) that the
circumstances causing such suspension no longer exist and each
Advance by such Lender requested to be converted into or made or
continued as a Eurodollar Rate Advance shall be a Base Rate
Advance.
(d) Any Taxes payable by the Agent or any Lender or
ruled (by a Governmental Authority) payable by the Agent or any
Lender in respect of any Loan Document shall, if permitted by
law, be paid by the Borrower, together with interest and
penalties, if any (except for (i) (1) Taxes imposed on or
measured by the overall net income of the Agent or that Lender,
(2) franchise or similar taxes of the Agent or that Lender, and
(3) amounts requested to be withheld for Taxes pursuant to the
last sentence of Section 3.04(f) and (ii) interest and penalties
incurred as a result of the gross negligence or willful
misconduct of the Agent or any Lender). The Agent or that Lender
(through the Agent) shall notify the Borrower and deliver to the
Borrower a certificate setting forth in reasonable detail the
calculation of the amount of payable Taxes, which certificate is
conclusive and binding (absent manifest error), and the Borrower
shall promptly pay that amount to the Agent for its account or
the account of that Lender, as the case may be. If the Agent or
that Lender subsequently receives a refund of the Taxes paid to
it by the Borrower, then the recipient shall promptly pay the
refund to the Borrower.
(e) THE BORROWER AGREES TO INDEMNIFY EACH LENDER
AGAINST, AND PAY TO IT UPON DEMAND, ANY FUNDING LOSSES, COSTS OR
EXPENSES DESCRIBED IN SECTION 3.02(b), 3.03(c) OR 9.05(b) WITH
RESPECT TO EURODOLLAR RATE ADVANCES. The provisions of and
undertakings and indemnification set forth in this paragraph
shall survive the satisfaction and payment of the Obligations and
termination of this Agreement.
(f) Each Lender that is organized under the laws of
any jurisdiction other than the United States of America or any
State thereof (a) represents to the Agent and the Borrower that
(i) no Taxes are required to be withheld by the Agent or the
Borrower with respect to any payments to be made to it in respect
of the Obligations and (ii) it has furnished to the Agent and the
Borrower two duly completed copies of U.S. Internal Revenue
Service Form 4224, Form 1001, Form W-8, or any other tax form
acceptable to the Agent (wherein it claims entitlement to
complete exemption from U.S. federal withholding tax on all
interest payments under the Loan Papers), and (b) covenants to
(i) provide the Agent and the Borrower a new tax form upon the
expiration or obsolescence of any previously delivered form
according to law, duly executed and completed by it, and (ii)
comply from time to time with all laws with regard to the
withholding tax exemption. If any of the foregoing is not true
or the applicable forms are not provided, then the Borrower and
the Agent (without duplication) may deduct and withhold from
interest payments under the Loan Documents United States federal
income tax at the full rate applicable under law.
SECTION 3.05. Notes; Repayment. Each Lender's Advances shall be
evidenced by a Revolving Loan Note executed by the Borrower and
delivered to such Lenders pursuant to Article V (each such
Revolving Loan Note, as the same may be amended, modified,
substituted or supplemented from time to time being hereinafter
referred to individually as a "Note" and collectively as the
"Notes"), substantially in the form of Exhibit C, in an original
principal amount equal to such Lender's Pro Rata Share of the
maximum Advance Commitment on the date hereof. Unless the
Termination Date shall have earlier occurred, the Borrower shall
repay the principal amount of the Advances outstanding on the
Maturity Date.
SECTION 3.06. Interest. The Borrower shall pay interest on the
unpaid principal amount of each Advance from the date of such
Advance until such principal amount shall be paid in full, at the
following rates specified below:
(a) Base Rate Advances. If such Advance is a Base Rate
Advance, at a rate per annum equal at all times to the Alternate
Base Rate in effect from time to time, payable monthly in arrears
on the last Business Day of each calendar month and on the date
such Base Rate Advance shall be paid in full; provided, however,
that any amount of principal which is not paid when due (whether
at stated maturity, by acceleration or otherwise) shall bear
interest, from the date on which such amount is due until such
amount is paid in full, payable on demand, at a rate per annum
equal at all times to two percent (2.0%) per annum above the
Alternate Base Rate in effect from time to time.
(b) Eurodollar Rate Advances. If such Advance is a
Eurodollar Rate Advance, at a rate per annum equal at all times
during any Interest Period for such Advance to the sum of the
Applicable Margin plus the Eurodollar Rate for such Advance for
such Interest Period, payable in arrears on the last day of such
Interest Period; provided, however, that any amount of principal
which is not paid when due (whether at stated maturity, by
acceleration or otherwise) shall bear interest, from the date on
which such amount is due until such amount is paid in full,
payable on demand, at a rate per annum equal at all times to two
percent (2.0%) per annum above the Alternate Base Rate in effect
from time to time.
(c) Default Interest. Notwithstanding anything to the
contrary in Sections 3.06(a) and 3.06(b), effective upon the
occurrence of an Event of Default and for as long thereafter as
such Event of Default shall be continuing, all amounts
outstanding under the Loan Documents shall bear interest at a
rate per annum equal at all times to two percent (2.0%) per annum
above the Alternate Base Rate in effect from time to time,
payable on demand and, absent demand, at the times specified in
Section 3.06(a) with respect to Base Rate Advances and at the
times specified in Section 3.06(b) with respect to Eurodollar
Rate Advances.
(d) Rate Adjustment Periods. Notwithstanding anything to
the contrary in Sections 3.06(a) and 3.06(b) but subject to
Section 3.06(c) above, at all times during a Rate Adjustment
Period, interest on each Eurodollar Rate Advance shall be at a
rate of one-quarter of one percent (0.25%) below the rate that
would otherwise be payable under Section 3.06(b), provided,
however, that (A) no reduction in the interest rate applicable to
any Eurodollar Rate Advance outstanding on the commencement of a
Rate Adjustment Period shall take effect until such Eurodollar
Rate Advance has been continued or converted pursuant to Section
3.03; (B) no reduction in the interest rate applicable to any
Eurodollar Rate Advance shall reduce such rate below the sum of
1.25% plus the Eurodollar Rate for such Advance for such Interest
Period; and (C) interest on any amount of principal which is not
paid when due (whether at stated maturity, by acceleration or
otherwise) shall continue to be paid at the rates otherwise
specified in Section 3.06(a) or 3.06(b) for such past due
amounts.
SECTION 3.07. Additional Interest on Eurodollar Rate Advances.
The Borrower shall pay to each Lender (or to the Agent for the
account of such Lender) so long as such Lender shall be required
under regulations of the Board of Governors of the Federal
Reserve System to maintain reserves with respect to liabilities
or assets consisting of or including Eurocurrency Liabilities,
additional interest on the unpaid principal amount of each
Eurodollar Rate Advance of such Lender, from the date of such
Advance until such principal amount is paid in full, at an
interest rate per annum equal at all times to the remainder
obtained by subtracting (i) the Eurodollar Rate for the Interest
Period for such Advance from (ii) the rate obtained by dividing
such Eurodollar Rate by a percentage equal to 100% minus the
Eurodollar Rate Reserve Percentage of such Lender for such
Interest Period, payable on each date on which interest is
payable on such Advance. Such additional interest so notified to
the Borrower (with a copy to the Agent) by such Lender shall be
payable to such Lender (or to the Agent for the account of such
Lender) on the dates specified for payment of interest for such
Advance in Section 3.06.
SECTION 3.08. Pre-payments. The Borrower may prepay the
outstanding amount of any Advance in whole or in part with
accrued interest to the date of such prepayment on the amount
prepaid; provided, however, that (i) notice of any prepayment of
a Eurodollar Rate Advance must be given at least three (3)
Business Days prior to the date of prepayment; (ii) notice of any
prepayment of a Base Rate Advance must be given not later than
12:00 noon (Dallas time) on the date of prepayment; (iii) any
prepayment of any Eurodollar Rate Advance shall be made on, and
only on, the last day of an Interest Period for such Advance; and
(iv) each partial prepayment shall be in a principal amount of
$250,000 and integral multiples of $50,000 in excess of that
amount and, if made after the Termination Date, shall be applied
to the principal installments on each Lender's Note in the
inverse order of their maturities.
SECTION 3.09. Maximum Interest Rate. Regardless of any
provision contained in any Loan Document or any document related
thereto, it is the intent of the parties to this Agreement that
neither the Agent nor any Lender contract for, charge, take,
reserve, receive or apply, as interest on all or any part of the
Obligations any amount in excess of the Maximum Rate or the
Maximum Amount or receive any unearned interest in violation of
any applicable law, and, if the Lenders ever do so, then any
excess shall be treated as a partial repayment or prepayment of
principal and any remaining excess shall be refunded to the
Borrower. In determining if the interest paid or payable exceeds
the Maximum Rate, the Borrower and the Lenders shall, to the
maximum extent permitted under applicable law, (a) treat all
Borrowings as but a single extension of credit (and the Lenders
and the Borrower agree that is the case and that provision in
this Agreement for multiple Borrowings is for convenience only),
(b) characterize any nonprincipal payment as an expense, fee or
premium rather than as interest, (c) exclude voluntary repayments
or prepayments and their effects, and (d) amortize, prorate,
allocate and spread the total amount of interest throughout the
entire contemplated term of the Obligations. However, if the
Obligations are paid in full before the end of their full
contemplated term, and if the interest received for its actual
period of existence exceeds the Maximum Amount, the Lenders shall
refund any excess (and the Lenders may not, to the extent
permitted by law, be subject to any penalties provided by any
laws for contracting for, charging, taking, reserving or
receiving interest in excess of the Maximum Amount). If the laws
of the State of Texas are applicable for purposes of determining
the "Maximum Rate" or the "Maximum Amount," then those terms mean
the "indicated rate ceiling" from time to time in effect under
Article 5069-1.04, Title 79, Revised Civil Statutes of Texas, as
amended. The Borrower agrees that Chapter 15, Subtitle 79,
Revised Civil Statutes of Texas, 1925, as amended (which
regulates certain revolving credit loan accounts and revolving
tri-party accounts), does not apply to the Obligations, other
than Article 15.10(b).
SECTION 3.10. Interest Recapture. If the designated interest
rate applicable to any Borrowing exceeds the Maximum Rate, the
interest rate on that the Borrowing is limited to the Maximum
Rate, but any subsequent reductions in the designated rate shall
not reduce the interest rate thereon below the Maximum Rate until
the total amount of accrued interest equals the amount of
interest that would have accrued if that designated rate had
always been in effect. If at maturity (stated or by
acceleration), or at final payment of the Notes, the total
interest paid or accrued is less than the interest that would
have accrued if the designated rates had always been in effect,
then, at that time and to the extent permitted by applicable law,
the Borrower shall pay an amount equal to the difference between
(a) the lesser of the amount of interest that would have accrued
if the designated rates had always been in effect and the amount
of interest that would have accrued if the Maximum Rate had
always been in effect, and (b) the amount of interest actually
paid or accrued on the Notes.
SECTION 3.11. Extension of Maturity. If no Default or Event of
Default exists, the Borrower may request one-year extensions of
the then-existing Maturity Date by making such request to the
Agent and each Lender between 90 and 60 days preceding each
anniversary of the date of this Agreement. The then-existing
Maturity Date shall be extended for one year only if (a) the
Agent and each Lender consent in writing to such extension within
30 days following the Borrower's request (with a failure to
respond by the Agent or any Lender being deemed a denial of such
consent by such party), and (b) the Borrower pays to the Agent,
for the account of the Lenders, within 10 days after its receipt
of such consent, an extension fee equal to one-eighth of one
percent (1/8%) of the then-existing Aggregate Commitment.
ARTICLE IV
THE LETTER OF CREDIT FACILITY
SECTION 4.01. The Letters of Credit. The Agent agrees, on the
terms and conditions hereinafter set forth, to issue for the
account of the Borrower one or more Letters of Credit in
accordance with this Article IV, from time to time on any
Business Day during the period from the date hereof to the
Termination Date in an aggregate face amount not to exceed the
excess of (a) the Letter of Credit Commitment at such time over
(b) the Letter of Credit Obligations at such time. Within the
limits of the Letter of Credit Commitment, the Borrower may
obtain credit by having the Agent issue the Letters of Credit
being requested by the Borrower at such time, pay its Obligations
with respect to such Letters of Credit pursuant to Section 4.06,
and again obtain credit by having the Agent issue Letters of
Credit under this Section 4.01.
SECTION 4.02. Amounts and Terms. The Agent shall not have any
obligation to issue any Letter of Credit at any time if the
aggregate maximum amount then available for drawing under Letters
of Credit theretofore issued, after giving effect to the Letter
of Credit requested hereunder, shall exceed any limit imposed by
law or regulation upon the Agent.
SECTION 4.03. Conditions. In addition to being subject to the
satisfaction of the conditions contained in Article V, the
obligation of the Agent to issue any Letter of Credit is subject
to the satisfaction in full of the following conditions:
(a) the proposed Letter of Credit (including, without
limitation, the level of detail and specificity with respect to
the documents, certificates and drafts to be presented
thereunder) shall be reasonably satisfactory to the Agent as to
form and content;
(b) as of the date of issuance, no order, judgment or
decree of any Governmental Authority shall purport by its terms
to enjoin or restrain the Agent from issuing the Letter of
Credit, and no law, rule or regulation applicable to the Agent
and no request or directive (whether or not having the force of
law) from any Governmental Authority with jurisdiction over the
Agent shall prohibit or request that the Agent refrain from the
issuance of Letters of Credit generally or the issuance of that
Letter of Credit; and
(c) the proposed Letter of Credit shall be governed by The
Uniform Customs and Practice for Documentary Credits, 1993
Revision, International Chamber of Commerce Publication No. 500,
or any successor thereto, and, as to matters not covered thereby,
shall be governed by the internal laws and decisions (as
distinguished from conflict of laws principles) of the State of
Texas.
SECTION 4.04. Issuing Letters of Credit.
(a) Letters of Credit shall be issued upon written
notice by the Borrower to the Agent, given not later than 10:00
A.M. (Dallas time) on the second Business Day prior to the
Business Day on which such Letters of Credit are requested to be
issued, or such lesser time prior to the requested issuance date
as is acceptable to the Agent. Each such notice (a "Request for
Letters of Credit") shall be in substantially the form of Exhibit D
hereto, specifying therein (i) the aggregate stated amount of
the Letters of Credit requested, (ii) the effective date (which
day shall be a Business Day) of issuance of such requested
Letters of Credit, (iii) the date on which such requested Letters
of Credit are to expire (which date shall be a Business Day no
more than 18 months following such effective date and shall in no
event be later than the Maturity Date unless the Borrower
deposits with and pledges to the Agent cash or cash equivalent
investments acceptable to the Agent in an amount equal to the
face amount of such Letter of Credit as collateral security for
the Borrower's Obligations in connection with such Letter of
Credit), and (iv) the Person for whose benefit the requested
Letters of Credit are to be issued. At the time such request is
made, the Borrower shall also provide the Agent with completed
and executed Letter of Credit Applications and copies of the
forms the Letters of Credit which the Borrower has requested the
Agent to issue. Each Request for Letters of Credit shall be
irrevocable and binding on the Borrower.
(b) Promptly after receipt of a Request for Letters of
Credit together with all supporting documentation, the Agent
shall notify each Lender by telex, telecopy, telegram, telephone
or other similar form of transmission of the proposed issuance of
Letters of Credit. Subject to the satisfaction of the terms and
conditions of this Article IV and upon fulfillment of the
applicable conditions set forth in Article V, the Agent shall, on
the requested date, issue its Letter of Credit on behalf of the
Borrower.
SECTION 4.05. Paying under Letters of Credit. In determining
whether to pay under any Letter of Credit, the Agent shall have
no obligation other than to confirm that documents that appear to
comply on their face with the requirements of such Letter of
Credit have been delivered to it.
SECTION 4.06. Reimbursement Obligations. The Borrower is
obligated, and hereby unconditionally agrees, to pay in
immediately available funds to the Agent the amount of each
drawing made under each Letter of Credit on the date of such
drawing (the obligation of the Borrower under this Section 4.06
with respect to any drawing being the "Reimbursement Obligation"
with respect to such drawing). Any Reimbursement Obligation with
respect to any Letter of Credit that is not paid by the Borrower
to the Agent with respect to a Letter of Credit at or prior to
1:00 P.M. (Dallas time) on the date of the drawing giving rise
thereto shall bear interest, payable on demand, from the date of
such drawing until repaid in full to the Agent at a rate per
annum equal at all times to two and one-half percent (2.50%) per
annum above the Alternate Base Rate in effect from time to time.
In the event of any conflict between the terms of this Agreement
and any Letter of Credit Application the terms of this Agreement
shall control.
SECTION 4.07. Compensation for Letters of Credit.
(a) The Borrower agrees to pay to the Agent, for the
benefit of each Lender, a letter of credit fee ("Letter of Credit
Fee") with respect to each Letter of Credit issued under this
Article IV, payable on the date of issuance, renewal or extension
of such Letter of Credit, and thereafter in advance at such
intervals as are agreed upon by the Borrower and the Lenders
during the period in which such Letter of Credit is outstanding,
at a per annum rate equal to one percent (1%), in the case of
commercial Letters of Credit, and the Applicable Margin, in the
case of standby Letters of Credit (the "Letter of Credit Rate")
for the actual number of days to elapse from such date to the
earlier to occur of (i) the stated expiration date of such Letter
of Credit, or (ii) the last day of the immediately following
interval agreed to by the Lenders and the Borrower.
(b) The Borrower shall also pay to the Agent, for the
benefit of each Lender, on the date of any modification of a
Letter of Credit which increases the maximum amount available for
drawing thereunder, an additional fee calculated on the same
basis as that set forth in Section 4.07(a) with respect to any
such additional amount. The Borrower shall, in addition, pay to
the Agent for its own account with respect to each Letter of
Credit issued hereunder (i) upon its issuance, a fronting fee
equal to one-eighth percent (1/8%) of its face amount, (ii) upon
any drawing under such Letter of Credit, a negotiation fee with
respect to such drawing equal in amount to $250, and (ii) upon
any transfer of or amendment to such Letter of Credit, a
transaction fee equal in amount to $100.
(c) Notwithstanding the foregoing, effective immediately
upon the occurrence of an Event of Default and for as long
thereafter as such Event of Default shall be continuing, the
Letter of Credit Rate shall be increased to three and one-eighth
percent (3.125%) per annum, payable on demand and, absent demand,
at the times specified in Section 4.07(a).
SECTION 4.08. Sharing of Payments. Immediately upon the Agent's
issuance of any Letter of Credit, the Agent shall be deemed to
have sold and transferred to each Lender, and each Lender shall
be deemed irrevocably and unconditionally to have purchased and
received from the Agent, without recourse or warranty, an
undivided interest and participation (to the extent of such
Lender's Pro Rata Share) in the Letter of Credit and all
applicable rights of the Agent in the Letter of Credit, including
rights to cash collateral pledged under Section 4.11 (other than
rights to receive the fees provided for in the last sentence of
Section 4.07(b)). If the Borrower does not timely pay any
Reimbursement Obligation, the Agent is irrevocably authorized to
fund the Reimbursement Obligation as a Base Rate Borrowing and
the proceeds of the Base Rate Borrowing shall be advanced
directly to the Agent to pay the Reimbursement Obligation. If
the Borrower fails to reimburse the Agent as provided in Section
4.06 and funds are not advanced to satisfy the Reimbursement
Obligation, the Agent shall promptly notify each Lender of the
Borrower's failure, of the date and amount paid, and of each
Lender's Pro Rata Share of the unreimbursed amount. Each Lender
shall promptly and unconditionally make available to the Agent in
immediately available funds its Pro Rata Share of the unpaid
Reimbursement Obligation. Such funds are due and payable to the
Agent before the close of business on (i) the Business Day the
Agent gives notice to each Lender of the Borrower's reimbursement
failure if the notice is received by a Lender before 2:00 p.m. in
the time zone where such Lender's Domestic Lending Office is
located, or (ii) on the next succeeding Business Day after the
Business Day the Agent gives notice to each Lender of the
Borrower's reimbursement failure, if such notice is received
after 2:00 p.m. All amounts payable by any Lender accrue
interest at the Federal Funds Rate from the day the applicable
draft or draw is paid by the Agent to (but not including) the
date the amount is paid by the Lender to the Agent.
SECTION 4.09. Documentation. Upon the request of any Lender,
the Agent shall furnish to such Lender copies of any Letters of
Credit, Letter of Credit Reimbursement Agreements, and applications
for any Letter of Credit to which the Agent is party and such other
documentation as may reasonably be requested by such Lender.
SECTION 4.10. Indemnification; Exoneration.
(a) In addition to amounts payable as elsewhere
provided in this Article IV, and without limitation of the
Borrower's obligations pursuant to Section 9.05, the Borrower
hereby agrees to protect, indemnify, pay and save the Agent and
each Lender harmless from and against any and all claims,
demands, liabilities, damages, losses, costs, charges and
expenses (including reasonable attorneys' and paralegals' fees)
which the Agent or any of the Lenders may incur or be subject to
as a consequence, direct or indirect, of the failure of the Agent
to honor a drawing under any Letter of Credit as a result of any
act or omission, whether rightful or wrongful, of any present or
future de jure or de facto Governmental Authority (all such acts
or omissions being hereinafter referred to collectively as
"Governmental Acts").
(b) As among the Borrower, the Agent and any of the
Lenders, the Borrower assumes all risks of the acts and omissions
of, or misuse of any of the Letters of Credit by, the respective
beneficiaries of such Letters of Credit. In furtherance and not
in limitation of the foregoing, the Agent and the Lenders shall
not be responsible for: (i) the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document submitted
by any Person in connection with the application for and issuance
of any of the Letters of Credit, even if it should in fact prove
to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (ii) the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or
assign any Letter of Credit or the rights or benefits thereunder
or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) the failure of the
beneficiary of any Letter of Credit to comply fully with the
conditions required in order to draw upon such Letter of Credit,
other than conditions expressly stated in such Letter of Credit;
(iv) errors, omissions, interruptions or delays in transmission
or delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they be in cipher; (v) errors in inter
pretation of technical terms; (vi) any loss or delay in the
transmission or otherwise of any document required in order to
make a drawing under any Letter of Credit or of the proceeds
thereof; (vii) the misapplication by the beneficiary of a Letter
of Credit of the proceeds of any drawing under such Letter of
Credit; or (viii) any consequences arising from causes beyond the
control of the Agent or any of the Lenders, including, without
limitation, any Government Acts. None of the above shall affect,
impair, or prevent the vesting of the Agent's or any Lender's
rights or powers under this Section 4.10.
(c) In furtherance and extension, and not in limita
tion, of the specific provisions set forth above, any action
taken or omitted by the Agent under or in connection with any of
the Letters of Credit issued by the Agent or any related certificates,
if taken or omitted in good faith shall not result in any liability
of the Agent to the Borrower.
SECTION 4.11. Termination of Letters of Credit; Cash Collateral.
The Agent may, at any time upon or following the occurrence of an
Event of Default at its sole option, request that the Borrower
deposit with the Agent, and upon any such request the Borrower
shall forthwith deposit with and pledge to the Agent, cash or
cash equivalent investments acceptable to the Agent in an amount
equal to the undrawn face amount of any Letters of Credit that
remain outstanding from time to time thereafter as collateral
security for the Borrower's Obligations in connection with such
Letters of Credit. The right of the Agent to require, and the
Obligation of the Borrower to provide, collateral security shall
continue to exist notwithstanding the release of any other
collateral security by the Agent or any of the Lenders at any
time. If the Borrower does not immediately deposit such
collateral security with the Agent upon any such request, the
Agent is hereby irrevocably authorized by the Borrower to fund
such collateral security by making a Base Rate Advance in the
amount thereof and depositing the proceeds of such Advance in a
cash collateral account with the Agent.
ARTICLE V
CONDITIONS OF EXTENSIONS OF CREDIT
SECTION 5.01. Conditions Precedent to Initial Extension of
Credit. The obligation of each Lender to make its Pro Rata Share
of the initial extension of credit under this Agreement (whether
in the form of an Advance or a Letter of Credit) is subject to
the following conditions precedent:
(a) The Agent shall have received on or before the day of
the initial extension of credit under this Agreement the
following, each dated such day, in form and substance satisfactory
to the Agent:
(i) A Note payable to the order of each Lender in an amount
equal to such Lender's Pro Rata Share of the maximum Advance
Commitment on the date hereof;
(ii) Certified copies of (A) the resolutions of the Board of
Directors of the Borrower approving this Agreement, the Notes and
each of the other Loan Documents; and (B) all documents
evidencing other necessary corporate action and governmental
approvals, if any, with respect to this Agreement, the Notes and
each of the other Loan Documents;
(iii) A certificate of the Secretary or an Assistant
Secretary of the Borrower certifying the names and true
signatures of the officers of the Borrower authorized to sign
this Agreement, the Notes and each of the other Loan Documents,
and the accuracy and currency of the Borrower's Articles of
Incorporation and By-Laws attached thereto;
(iv) A favorable opinion of counsel to the Borrower,
substantially in the form of Exhibit E hereto and as to such
other matters as the Agent may reasonably request;
(v) Payment instructions from the Borrower with respect to
its obligations under the Prior Agreement and evidence that the
Borrower has cancelled the financing commitments under the Prior
Agreement; and
(vi) Such other documents, instruments and agreements in
furtherance of the financing transaction contemplated in the Loan
Documents, each in form and substance satisfactory to the Agent
and its counsel, as the Agent shall reasonably request,
including, without limitation, the documents, instruments and
agreements described on the List of Closing Documents attached
hereto as Exhibit F.
(b) No law or regulation affecting the Agent's or any
Lender's entering into the financing transaction contemplated by
the Loan Documents shall impose upon the Agent or any of the Lenders
any material obligation, fee, liability, cost, expense or damages.
SECTION 5.02. Conditions Precedent to Each Extension of Credit,
Conversion or Continuation. The obligation of each Lender to
make any Advance, to issue any Letter of Credit, or to convert or
continue any Advance as described in Section 3.03 on the occasion
of each such extension of credit (including the initial extension
of credit hereunder), conversion or continuation shall be subject
to the further conditions precedent that on the date of such
extension of credit, conversion or continuation:
(a) The following statements shall be true (and each of the
giving of the applicable Notice of Borrowing, Request for Letter
of Credit or Notice of Continuation or Conversion, as applicable,
and the acceptance by the Borrower of the proceeds or other benefits
of the requested extension of credit, conversion or continuation
shall constitute a representation and warranty by the Borrower that
on the date of such extension of credit, conversion or continuation
such statements are true):
(i) The representations and warranties contained in Section
6.01 are correct on and as of the date of such extension of
credit, conversion or continuation before and immediately after
giving effect to such extension of credit, conversion or
continuation and to the application of the proceeds or other
benefits thereof, as though made on and as of such date; and
(ii) No event has occurred and is continuing, or would
result from such extension of credit, conversion or continuation
or from the application of the proceeds or other benefits
thereof, that constitutes a Default or an Event of Default.
(b) The Lenders shall have received such other approvals,
opinions or documents as the Lenders may reasonably request.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01. Representations and Warranties of the Borrower.
The Borrower represents and warrants to the Agent and each Lender
that the following statements are true, correct and complete as
of the date of this Agreement and as of the date of each
reaffirmation thereof made pursuant to Section 5.02(a)(i):
(a) The Borrower (i) is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Colorado, and is duly qualified to do business, and is in good
standing as a foreign corporation, in each jurisdiction in which
such qualification is necessary or proper in view of its business
and operations or the ownership of its properties; (ii) does not
own any material amount of capital stock of, or have any other
material equity investment in, any Person other than its wholly-
owned subsidiary, Vicorp Restaurants, Inc., a corporation duly
organized, validly existing and in good standing under the laws
of the State of Delaware, and the Borrower's ownership of 100,004
shares of Preferred Stock issued by a single issuer in
replacement of a subordinated debenture in the original principal
amount of $10,000,000 and (iii) has not (nor has any subsidiary)
used or transacted business under any other corporate or trade
name in the past five years, except as disclosed on Schedule
6.01(a).
(b) The execution, delivery and performance by the Borrower
of this Agreement, the Notes and each of the other Loan Documents
are within the Borrower's corporate powers, have been duly
authorized by all necessary corporate action, and do not
contravene (i) the Borrower's charter or by-laws; or (ii) any law
or any contractual restriction binding on or affecting the Borrower.
(c) No authorization or approval or other action by, and no
notice to or filing with, any Governmental Authority or regulatory
body is required for the due execution, delivery and performance by
the Borrower of this Agreement, the Notes or any of the other Loan
Documents.
(d) This Agreement is, and the Notes and each of the other
Loan Documents when delivered hereunder will be, legal, valid and
binding obligations of the Borrower enforceable against the
Borrower in accordance with their respective terms.
(e) The consolidated balance sheet of the Borrower and its
subsidiaries as at July 31, 1996, and the related consolidated
statement of income and retained earnings of the Borrower and its
subsidiaries for the three fiscal quarters then ended, copies of
which have been furnished to the Agent and each Lender, fairly
present the financial condition of the Borrower and its
subsidiaries on a consolidated basis as at such date and the
results of the operations of the Borrower and its subsidiaries an
a consolidated basis for the period ended on such date, all in
accordance with GAAP consistently applied, and since July 31,
1996, there has been no material adverse change in such condition
or operations, or in the financial condition or operations of the
Borrower and its subsidiaries.
(f) Except as set forth on Schedule 6.01(f), there is no
pending or threatened action or proceeding affecting the Borrower
or any of its subsidiaries before any Governmental Authority or
arbitrator, which action or proceeding (i) may materially
adversely affect the financial condition or operations of the
Borrower and its subsidiaries on a consolidated basis or (ii)
purports to affect the legality, validity or enforceability of
any Loan Document; and since the date hereof there has been no
development in any action or proceeding described on Schedule
6.01(f) as a result of which such action or proceeding, if
adversely determined, would give rise to an effect of the kind
described in the foregoing clause (i) or clause (ii).
(g) Neither the Borrower nor any of its subsidiaries is in
violation of (i) any applicable statute, regulation, rule, ordinance
or permit of any Governmental Authority or (ii) any patent, patent
application, copyright, trademark, trademark application, trade name,
or license of any Governmental Authority, in each case, in any respect
that may materially adversely affect the financial condition or
operations of the Borrower and its subsidiaries on a consolidated
basis. The Borrower possesses adequate licenses, permits and other
governmental approvals and authorization and adequate patents, trademarks,
copyrights, trade names and licenses to continue to conduct its business
as heretofore conducted by it.
(h) Neither the Borrower nor any of its subsidiaries is in
default with respect to any note, indenture, loan agreement,
mortgage, lease, deed or other similar agreement relating to the
borrowing of monies to which it is a party or by which it is
bound, which default may materially adversely affect the financial
condition or operations of the Borrower or any of its subsidiaries.
(i) All of the Borrower's and its subsidiaries' respective
property, tangible and intangible, is free and clear of all
Liens, except as specifically permitted by Section 7.02(a).
(j) The Borrower and each of its subsidiaries have filed
all Tax returns and other reports they are required by law to
file and have paid all Taxes that are due and payable, other than
those being contested in good faith by appropriate proceedings
diligently conducted and for which adequate cash and financial
reserves have been established.
(k) Without limiting the representations and warranties set
forth in Section 6.01(g), and except as otherwise set forth on
Schedule 6.01(k), neither the Borrower nor any of its subsidiaries
has received notice to the effect or is otherwise aware that its
operations are not in material compliance with all of the requirements
of applicable federal, state and local environmental, health and
safety statutes and regulations or the subject of or likely to
become the subject of any federal or state investigation evaluating
whether any remedial action is needed to respond to a release of any
Contaminant into the environment, which non-compliance or remedial
action could have a material adverse effect on the business,
operations, properties, assets or condition (financial or otherwise)
of the Borrower or any of its subsidiaries.
(l) No Plan has any Unfunded Liabilities. Except as
otherwise set forth on Schedule 6.01(1), each Plan complies in
all material respects with all applicable requirements of law and
regulations; no Reportable Event has occurred with respect to any
Plan; neither the Borrower nor any of its subsidiaries has
withdrawn from any Plan or initiated steps to do so; and no steps
have been taken to terminate any Plan.
(m) None of the Borrower or any of its ERISA Affiliates
maintains any employee welfare benefit plans within the meaning
of Section 3(l) of ERISA that provides benefits to employees
after termination of employment other than as required by Section
601 of ERISA.
(n) The Borrower is not engaged in the business of
extending credit for the purpose of purchasing or carrying margin
stock (within the meaning of Regulation U issued by the Board of
Governors of the Federal Reserve System), and no proceeds of any
extension of credit hereunder will be used to purchase or carry
any margin stock or to extend credit to others for the purpose of
purchasing or carrying any margin stock.
ARTICLE VII
COVENANTS OF THE BORROWER
SECTION 7.01. Affirmative Covenants. The Borrower covenants
to Agent and each Lender that, so long as any Obligation shall remain
unpaid or any Lender shall have any Commitment hereunder, the Borrower will,
unless the Majority Lenders shall otherwise consent in writing:
(a) Compliance with Laws, Etc. Comply, and cause each of
its subsidiaries to comply, in all material respects with all
applicable laws, rules, regulations, orders, ordinances and
decrees, such compliance to include, without limitation, paying
before the same become delinquent all Taxes, recordation charges,
rates, dues, fees, fines, impositions, liabilities, obligations
and encumbrances imposed upon it or upon any of its property
except to the extent contested in good faith and with respect to
which adequate (as determined by independent public accountants
having a national reputation) reserves shall have been
established. Without limiting the generality of the foregoing,
the Borrower (i) will conduct, and will cause each of its
subsidiaries to conduct, its business so as to comply in all
material respects with all applicable environmental, health and
safety laws and regulations in all jurisdictions in which it is
or may at any time be doing business, including, without
limitation, the Federal Resource Conservation and Recovery Act,
the federal Comprehensive Environmental Response, Compensation
and Liability Act, the federal Clean Water Act, the federal Clean
Air Act and the federal Occupational Safety and Health Act; and
(ii) will establish, maintain and operate, and will cause each
ERISA Affiliate to establish, maintain and operate, all Plans to
comply in all material respects with the provisions of ERISA,
IRC, all other applicable laws and all regulations and interpretations
thereunder.
(b) Reporting Requirements. Furnish to each Lender:
(i) as soon as available and in any event within forty-five
(45) days after the end of each fiscal quarter of the Borrower,
consolidated (and, if the Borrower at any time has any operating
subsidiaries, consolidating) balance sheets of the Borrower and
its subsidiaries as of the end of such quarter consolidated (and,
if the Borrower at any time has any operating subsidiaries,
consolidating) statements of income and retained earnings of the
Borrower and its 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, all in accordance with GAAP consistently
applied, certified by the chief financial officer of the Borrower
on behalf of the Borrower and, in the case of quarter-end
statements with respect to which a review shall have been
undertaken by public accountants, accompanied by a summary of the
review report rendered by such accountants;
(ii) as soon as available and in any event within ninety
(90) days after the end of each fiscal year of the Borrower, a
copy of the annual report for such year for the Borrower and its
subsidiaries, containing consolidated financial statements for
such year all in accordance with GAAP consistently applied,
certified by independent public accountants having a national
reputation in a manner acceptable to the Agent;
(iii) together with the financial statements required to
be delivered under Sections 7.01(b)(i) and (ii), a certificate of
the president, chief financial officer or treasurer of the
Borrower demonstrating compliance with the financial covenants
set forth in Section 7.03 for and as at the end of such quarter
or year, as applicable, setting forth the calculations made by
such officer to determine such compliance, and certifying on
behalf of the Borrower that no Default or Event of Default shall
have occurred during such quarter or year, as applicable (or as
of the end of such quarter or year, as applicable, in the case of
a Default or Event of Default consisting of a breach of the
financial covenants set forth in Section 7.03), or, if any
Default or Event of Default shall have occurred for or during
such quarter or year, as applicable, describing the nature
thereof and the procedures that the Borrower shall have taken or
proposes to take with respect thereto;
(iv) as soon as possible and in any event within five (5)
days after the occurrence of each Default, Event of Default or
other development, financial or otherwise, which might materially
adversely affect the business, properties or affairs of the
Borrower or any of its subsidiaries or the ability of the
Borrower to repay the Obligations, a statement of the chief financial
officer of the Borrower setting forth details of such
Default, Event of Default or other development and the action
which the Borrower has taken and proposes to take with respect
thereto;
(v) promptly after the sending or filing thereof, copies of
all reports which the Borrower sends to any of its security
holders, and copies of all reports and registration statements
which the Borrower or any subsidiary files with the SEC or any
national securities exchange;
(vi) before the beginning of each fiscal year of the
Borrower, financial and operations projections with respect to
such fiscal year, including, without limitation, pro forma
financial statements prepared on a basis consistent with the most
recent financial statements delivered to the Lenders in
accordance with Sections 7.01(b)(i) and (ii), all in such detail
as the Agent may reasonably request;
(vii) within two hundred seventy (270) days after the
close of each fiscal year, a statement of the Unfunded
Liabilities of each Plan, certified as correct, to the extent
applicable, by any actuary enrolled under ERISA;
(viii) as soon as possible and in any event within ten
(10) days after the Borrower or any of its subsidiaries knows
that any Reportable Event has occurred with respect to any Plan,
a statement, signed by the chief financial officer of the
Borrower, describing such Reportable Event and the action which
the Company proposes to take with respect thereto;
(ix) as soon as possible and in any event within ten (10)
days after receipt thereof by the Borrower or any of its
subsidiaries, a copy of (i) any notice or claim to the effect
that the Borrower or any such subsidiary is or may be liable to
any Person as a result of the release by the Borrower, any of its
subsidiaries, or any other Person of any toxic or hazardous waste
or substance into the environment, and (ii) any notice alleging
any violation of any federal, state or local environmental,
health or safety law or regulation by the Borrower or any of its
subsidiaries; provided, however, that the Borrower shall not be
required to furnish to the Agent any such notice resulting from
any routine OSHA or health inspection to which the Borrower or
any of its subsidiaries is subject by virtue of its respective
activities in the food service industry, unless any violation
described in such notice might have a material adverse effect on
the financial condition or operations of the Borrower or any
subsidiary; and
(x) such other information respecting the condition or
operations, financial or otherwise, of the Borrower or any of its
subsidiaries as the Agent may from time to time reasonably
request, all in such detail as the Agent may reasonably request.
(c) Preservation of Corporation Existence, Etc. Except as
otherwise permitted under Subsection 7.02(d), preserve and
maintain, and cause each of its subsidiaries to preserve and
maintain, its corporate existence, rights, franchises and privileges
in the jurisdiction of its incorporation, and qualify and
remain qualified and in good standing, and cause each of its
subsidiaries to qualify and remain qualified and in good
standing, as a foreign corporation in each jurisdiction in which
such qualification is necessary or proper in view of its business
and operations or the ownership of its properties.
(d) Maintenance of Insurance. Maintain, and cause each of
its subsidiaries to maintain, insurance with responsible and
reputable insurance companies or associations in such amounts as
are usually carried, and covering such risks as are ordinarily
insured against, by Persons engaged in similar businesses and
owning similar properties in the same general areas in which the
Borrower and each such subsidiary operate; and comply, and cause
each subsidiary to comply, with all conditions and requirements
necessary to maintain such insurance in effect.
(e) Maintenance of Properties, Etc. Maintain and preserve,
and cause each of its subsidiaries to maintain and preserve, all
of its properties, necessary or useful in the proper conduct of
its business, in good working order and condition, ordinary wear
and tear excepted, and maintain all assets, permits, licenses,
privileges, franchises, concessions, privileges, patents,
trademarks, copyrights, and trade names necessary to conduct its
business as heretofore conducted by it.
(f) Visitation Rights. At any reasonable time and from
time to time, permit the Lenders or any agent or representative
thereof to visit and inspect any of the properties of the
Borrower or any of its subsidiaries, to examine and make copies
of and abstracts from the records and books of account of the
Borrower or any of its subsidiaries, and to visit and discuss the
affairs, finances and accounts of the Borrower or any of its
subsidiaries with any of their respective officers or with any of
those of their respective directors that are involved in the
operations of the Borrower's or such subsidiary's business.
(g) Maintenance of Records. Maintain, and cause each of
its subsidiaries to maintain, books and records with respect to
accounting matters in accordance with generally accepted
accounting principles consistently applied and in detail
sufficient to provide the Lenders the information required
pursuant to Section 7.01(b).
(h) Condemnation. Notify the Agent, immediately upon
learning of the institution of any proceeding for the
condemnation or other taking of all or any part of any of the
Borrower's real property or interests in real property if the
property or interests involved have a book value in excess of
$500,000 (regardless of the value of the specific portion subject
to such proceeding), of the pendency of such proceeding, permit
the Agent to participate in any such proceeding and deliver to
the Agent all instruments reasonably requested by the Agent to
permit such participation.
(i) Destruction of Real Property. Notify the Agent
immediately of any material damage to or material loss or
destruction of the Borrower's real property or interests in real
property with a book value in excess of $250,000, setting forth
the nature and extent of such destruction.
(j) Use of Proceeds. The Borrower will use the proceeds of
the Advances only to repay its obligations under the Prior
Agreement and for general corporate purposes.
SECTION 7.02. Negative Covenants. The Borrower covenants to
Agent and each Lender that, so long as any Obligation shall
remain unpaid or any Lender shall have any Commitment hereunder,
the Borrower will not, unless the Majority Lenders shall
otherwise consent in writing:
(a) Liens, Etc.
(i) Enter into or suffer to exist, or permit any of its
subsidiaries to enter into or suffer to exist, any arrangement
that directly or indirectly prohibits the Borrower or any of its
subsidiaries from creating or incurring any Lien upon or with
respect to any of its property, other than the Loan Documents,
leases that prohibit Liens on the property leased and documents
governing transactions described in clause (a)(ii)(C) below that
prohibit Liens on the property or asset which is the subject of
such transaction; or
(ii) Create or suffer to exist, or permit any of its
subsidiaries to create or suffer to exist, any Lien (other than
the interest of the lessor under any Operating Lease) upon or
with respect to any of its property, whether now owned or
hereafter acquired, or assign, or permit any of its subsidiaries
to assign, any right to receive income, in each case to secure or
provide for the payment of any Debt of any Person, other than:
(A) Liens securing Taxes or the claims or demands of
materialmen, mechanics, carriers, warehousemen, landlords and
other like persons, which in any such case (1) are not delinquent
or (2) are being contested diligently and in good faith, provided
that in the latter case the Borrower or the applicable subsidiary
has established adequate reserves therefor and that neither the
Borrower's nor any subsidiary's title to and right to use its
property is materially and adversely affected by the nonpayment
of such Tax, claim or demand;
(B) Permitted Existing Liens;
(C) Liens existing on such property at the time of its
acquisition (other than any such Liens created in contemplation
of such acquisition), and Liens on fixed assets of the Borrower
or any of its subsidiaries acquired, constructed or improved
after the date of this Agreement which are created
contemporaneously with such acquisition, construction or
improvement to secure the purchase price of such property or the
cost of such construction or improvement, and Liens on fixed
assets of the Borrower or any of its subsidiaries arising in
connection with sale and leaseback transactions entered into by
the Borrower or any of its subsidiaries after the date of this
Agreement; provided, however, that no Lien of the kind described
in this clause (C) shall extend to or cover any property or asset
of the Borrower or any subsidiary of the Borrower other than the
property or asset so acquired or the construction or improvement
so procured; and
(D) any extension, renewal or replacement, in whole or in
part of any of the Liens referred to in the foregoing clauses (A)
through (C), inclusive; provided, however, that the amount of
Debt secured by any such extension, renewal or replacement Lien
shall not exceed the amount of such Debt secured immediately
prior to such extension, renewal or replacement and such
extended, renewed, or replaced Lien shall be limited to the
property or assets covered by the Lien existing immediately prior
to such extension, renewal or replacement;
provided, however, that notwithstanding anything to the contrary in
this Section 7.02(a), the aggregate amount of Debt of the Borrower
or any of its subsidiaries (including, without limitation, Capital
Lease Obligations of the Borrower or any of its subsidiaries) secured
by any of the Liens referred to in the foregoing clauses (B) and (C),
plus all Guarantees permitted by Section 7.02(e) (whether or not secured)
shall not at any time exceed $20,000,000.
(b) Debt. (i) Prepay or permit any of its subsidiaries to
prepay, any of its Debt, other than (A) the Obligations and (B)
Debt other than as described in the foregoing clause (i)(A) in an
amount not to exceed $5,000,000 in any fiscal year; or (ii)
create, incur, assume or suffer to exist, or permit any of its
subsidiaries to incur, assume or suffer to exist, any Debt,
except for (A) the Obligations, (B) Permitted Existing Debt, (C)
Debt secured by Liens upon the property of the Borrower or any of
its subsidiaries permitted pursuant to Section 7.02(a), and (D)
Permitted Franchise Guarantees.
(c) Dividends, Etc. Declare or make any dividend payment
or other distribution of assets, properties, cash, rights,
obligations or securities on account of any shares of any class
of capital stock of the Borrower, or purchase, redeem or
otherwise acquire for value (or permit any of its subsidiaries to
do so) any shares of any class of capital stock of the Borrower
or any warrants, rights or options to acquire any such shares,
now or hereafter outstanding, or make any other distribution in
respect of any shares of such capital stock, or agree to any of
the foregoing, if immediately after giving effect to such
proposed action, a Default or Event of Default would exist.
(d) Mergers, Etc. Merge or consolidate with or into, or
convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially
all of its assets (whether now owned or hereafter acquired) to,
or acquire all or substantially all of the assets or capital
stock of, any Person, or enter into an agreement to do any of the
foregoing, or permit any of its subsidiaries to do so, except
that (i) the Borrower may acquire the assets of any Person
pursuant to a Permitted Asset Acquisition, (ii) any subsidiary of
the Borrower may merge or consolidate with or into, or transfer
assets to, or acquire assets of, any other subsidiary of the
Borrower, and (iii) any subsidiary of the Borrower may merge into
or transfer assets to the Borrower; provided, however, that at
the time of any transaction permitted under any of the foregoing
clauses (i), (ii) and (iii), and immediately after giving effect
to such transaction, no Default or Event of Default would exist.
(e) Guarantees; Assumption of Obligations; Contingent
Liabilities. Guarantee or assume the obligations of any Person,
including any subsidiaries of the Borrower, or create or suffer
to exist any other contingent liability, or permit any subsidiary
of the Borrower to do any of the foregoing, other than (i)
guarantees by endorsement of negotiable instruments for deposit
or collection or similar transactions in the ordinary course of
business, and (ii) Permitted Franchisee Guarantees of up to
$10,000,000.
(f) Transactions with Affiliates or Stockholders. Enter
into, or be a party to any transaction with one of the Borrower's
Affiliates or stockholders, except in the ordinary course of
business and pursuant to the reasonable requirements of the
Borrower's business and upon fair and reasonable terms which are
no less favorable to the Borrower than the Borrower would obtain
in a comparable arm's-length transaction with a Person not the
Borrower's Affiliate or stockholder.
(g) Transactions Detrimental to Business, Etc. Enter into
any transaction which materially and adversely affects its
business, property, assets, operation, condition (financial or
otherwise), any collateral security for the Obligations or the
Borrower's ability to perform its obligations under this
Agreement or to repay the Obligations.
(h) Dispositions of Assets.
(i) Sell, lease, assign, transfer or otherwise dispose of
any real property (or enter into an agreement to do any of the
foregoing), or permit any of its subsidiaries to sell, lease,
assign, transfer or otherwise dispose of any real property (or
enter into an agreement to do any of the foregoing), except for
the properties described on Schedule 7.02(h), without the prior
written consent of all of the Lenders; or
(ii) Sell, lease, assign, transfer or otherwise dispose of
any other asset (or enter into an agreement to do any of the
foregoing), or permit any of its subsidiaries to sell, lease,
assign, transfer or otherwise dispose of any other asset (or
enter into an agreement to any of the foregoing), other than:
(A) the sale of inventory in the ordinary course of the
Borrower's or such subsidiary's business;
(B) the sale or other disposition of assets of the Borrower
or such subsidiary which are obsolete or no longer used or usable
in the business of the Borrower or such subsidiary; and
(C) the sale or other disposition of assets of the Borrower
or such subsidiary other than of the kind described in clause (A)
or (B) above; provided, however, that the value of all such other
assets sold or otherwise disposed of during any fiscal year
pursuant to this clause (C) shall not exceed $10,000,000, and
provided further that in the event that the proceeds of such
dispositions exceed $500,000 in the aggregate during any fiscal
year, the Aggregate Commitment shall be permanently reduced by
such excess and the Borrower shall make an immediate mandatory
prepayment of the Obligations equal to the amount by which the
Aggregate Outstandings exceed such reduced Aggregate Commitment.
(i) ERISA. (i) Engage, or permit any ERISA Affiliate to
engage, in any prohibited transaction described in Section 406 of
ERISA or 4975 of the IRC for which a statutory or class exemption
is not available or a private exemption has not been previously
obtained from the DOL; (ii) permit to exist any accumulated
funding deficiency (as defined in Sections 302 of ERISA and 412
of the IRC), whether or not waived; (iii) fail, or permit any
ERISA Affiliate to fail, to pay timely required contributions or
annual installments due with respect to any waived funding
deficiency to any Benefit Plan; (iv) terminate, or permit any
ERISA Affiliate to terminate, any Benefit Plan which would result
in any liability of the Borrower or any ERISA Affiliate under
Title IV of ERISA; (v) fail, or permit any ERISA Affiliate to
fail, to make any contribution or payment to any Multiemployer
Plan which the Borrower or any ERISA Affiliate may be required to
make under any agreement relating to such Multiemployer Plan, or
any law pertaining thereto; (vi) fail, or permit any ERISA
Affiliate to fail, to pay any required installment or any other
payment required under Section 412 of the IRC on or before the
due date for such installment or other payment; (vii) amend, or
permit any ERISA Affiliate to amend, a Plan resulting in an
increase in current liability for the plan year such that the
Borrower or any ERISA Affiliate is required to provide security
to such Plan under Section 401(a)(29) of the IRC.
(j) Restrictions on Operating Leases. Become, or permit
any of its subsidiaries to become, liable in any way whatsoever
under any Operating Lease in any fiscal year, unless, immediately
after giving effect to the incurrence of liability with respect
to such Operating Lease, projected Consolidated Rental Payments
for such fiscal year and each succeeding fiscal year do not
exceed $20,000,000 per fiscal year.
(k) Loans, Advances and Investments. Not make and not
permit any subsidiary to make any loan, advance, extension of
credit or capital contribution to, make any investment in, or
purchase or commit to purchase any stock or other securities or
evidences of Debt of, or interests in, any other Person, other
than: (i) expense accounts for and other advances to its
directors, officers and employees in the ordinary course of
business up to an aggregate amount of $500,000 outstanding at any
time; (ii) marketable obligations issued or unconditionally
guaranteed by the United States Government or issued by any of
its agencies and backed by the full faith and credit of the
United States of America, in each case maturing within one year
from the date of acquisition (and investments in mutual funds
investing primarily in those obligations); (iii) short-term
investment grade domestic and eurodollar certificates of deposit
or time deposits that are fully insured by the Federal Deposit
Insurance Corporation or are issued by commercial banks organized
under the Laws of the United States of America or any of its
states having combined capital, surplus, and undivided profits of
not less than $100,000,000 (as shown on its most recently
published statement of condition); (iv) commercial paper and
similar obligations rated "P-1" or better by Xxxxx'x Investors
Services, Inc., or "A-1" or better by Standard & Poors Ratings
Group (a division of McGraw Hill, Inc.); (v) investments in, and
advances to, wholly-owned subsidiaries, or by a wholly-owned
subsidiary in or to its parent; (vi) readily marketable tax-free
municipal bonds of a domestic issuer rated "aaa" or better by
Xxxxx'x Investors Service, Inc., or "AAA" or better by Standard &
Poors Ratings Group (a division of McGraw Hill, Inc.), and
maturing within one year from the date of issuance (and
investments in mutual funds investing primarily in those bonds);
(vii) promissory notes up to an aggregate amount of $3,000,000
outstanding at any time accepted as consideration for the
disposition of properties described on Schedule 7.02(h); (viii)
demand deposit accounts maintained in the ordinary course of
business; and (ix) current trade and customer accounts receivable
that are for goods furnished or services rendered in the ordinary
course of business and that are payable in accordance with
customary trade terms.
SECTION 7.03. Financial Covenants. The Borrower covenants to
the Agent and each Lender that so long as any Obligation shall
remain unpaid or any Lender shall have any obligation hereunder,
the Borrower will, unless the Majority Lenders shall otherwise
consent in writing:
(a) Maximum Adjusted Debt to EBITDAR Ratio. Maintain a
ratio, determined as of the last day of each fiscal quarter, of
(i) Adjusted Debt as of such date to (ii) Adjusted Consolidated
EBITDAR for the four fiscal quarters ending on such date of no
more than the amount set out below opposite such date:
Date Maximum Ratio
October 31, 1996 3.75 to 1
January 31, 1997, April 30, 1997, 3.50 to 1
July 31, 1997, and October 31, 1997
January 31, 1998 and thereafter 3.00 to 1
(b) Minimum Consolidated Tangible Net Worth. Maintain
Consolidated Tangible Net Worth, determined as of the last day of
each fiscal quarter, of at least (i) $115,000,000, plus (ii) an
amount equal to the greater of zero (0) and fifty percent (50%)
of the consolidated net earnings after taxes of the Borrower and
its subsidiaries determined in accordance with GAAP for the
period (taken as a single accounting period) from and including
November 1, 1996, to and including such day, plus (iii) an amount
equal to seventy-five percent (75%) of any Net Equity Issuance
Proceeds for the period (taken as a single accounting period)
from and including November 1, 1996, to and including such day.
(c) Maximum Consolidated Capital Expenditures. Not make
or incur, and not permit any of its consolidated subsidiaries to
make or incur, Consolidated Capital Expenditures, in any fiscal
year in excess of $25,000,000; provided that in the event the
actual Consolidated Capital Expenditures made or incurred during
the applicable fiscal year are less than $25,000,000 (such
difference being referred to as a "Carry-Over Amount"), the
permitted amount solely with respect to the immediately
succeeding fiscal year shall be increased by the lesser of (i)
$5,000,000 and (ii) such Carry-Over Amount.
(d) Minimum Fixed Charge Coverage Ratio. Maintain a ratio
of (i) Adjusted Consolidated EBITDAR to (ii) Consolidated Fixed
Charges, determined as of the last day of each fiscal quarter for
the twelve month period ending on such day, of at least the
amount set out below opposite the period in which such financial
quarter ends:
Date Minimum Ratio
October 31, 1996, January 31, 1.50 to 1
1997, April 30, 1997, July 31,
1997, and October 31, 1997
January 31, 1998 and thereafter 1.75 to 1
(e) Maximum Debt to Capitalization Ratio. Maintain a ratio
of (i) the sum of (A) Consolidated Funded Debt, plus (B) Capital
Lease Obligations of the Borrower and its subsidiaries to (ii)
the sum of (X) Consolidated Funded Debt, plus (Y) Consolidated
Net Worth, plus (Z) Capital Lease Obligations of the Borrower and
its subsidiaries, in each case, determined as of the last day of
each fiscal quarter, of no more than the amount set out below
opposite such date:
Date Maximum Ratio
October 31, 1996, January 31, 1997, 0.40 to 1
April 30, 1997, July 31, 1997,
October 31, 1997, January 31, 1998,
April 30, 1998, July 31,
1998, and October 31, 1998
January 31, 1999 and thereafter 0.35 to 1
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.01. Events of Default. If any of the following events
("Events of Default") shall occur and be continuing:
(a) either (i) the Borrower shall fail to make any payment
of principal on the Advances when the same becomes due, or (ii)
the Borrower shall fail to make any other payment on the
Obligations when the same becomes due and such failure shall
continue for five (5) days; or
(b) any representation or warranty made by the Borrower
herein or in any other Loan Document or by the Borrower (or any
of its officers) in connection with any Loan Document shall prove
to have been incorrect or misleading in any material respect when
made; or
(c) the Borrower shall fail to perform or observe any term,
covenant or agreement contained in Section 7.02 on its part to be
performed or observed; or
(d) the Borrower shall fail to perform or observe any other
term, covenant or agreement contained in any Loan Document on its
part to be performed or observed and any such failure shall
remain unremedied for the earliest of (i) ten (10) business days
after written notice thereof shall have been given to the
Borrower by the Agent, (ii) ten (10) business days after the date
the Borrower discovers, or should have discovered, such failure,
and (iii) if such failure has existed for more that sixty (60)
days, five (5) business days after the earlier of (A) the date of
delivery by the Agent to the Borrower of written notice thereof,
and (B) the date that the Borrower discovers, or should have
discovered, such failure; or
(e) with respect to any Debt (other than Debt constituting
Obligations) of the Borrower or any subsidiary of the Borrower in
an aggregate principal amount outstanding in excess of $500,000,
the Borrower or such subsidiary shall fail to pay any principal
of or premium or interest on such Debt when the same becomes due
and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall
continue after the applicable grace period, if any, specified in
the agreement or instrument relating to such Debt; or any other
event shall occur or condition shall exist under any agreement or
instrument relating to any such Debt and shall continue after the
applicable grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to cause
the holders of such Debt to accelerate, or to permit the holders
of such Debt to accelerate, the maturity of such Debt; or any
such Debt shall be declared to be due and payable, or required to
be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof; or
(f) (i) the Borrower or any of its subsidiaries shall
generally not pay its debts as such debts become due, or shall
admit in writing its inability to pay its debts generally, or
shall make a general assignment for the benefit of creditors; or
any proceeding shall be instituted by or against the Borrower or
any of its subsidiaries seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it
or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee, or
other similar official for it or for any substantial part of its
property; or (ii) the Borrower or any of its subsidiaries shall
take any corporate action to authorize any of the actions set
forth in clause (i) above; or
(g) any judgment or order for the payment of money in
excess of $1,000,000 above any insurance coverage therefor shall
be rendered against the Borrower or any of its subsidiaries by
any Governmental Authority or quasi-governmental authority, and
either (i) enforcement proceedings shall have been commenced by
any creditor upon such judgment or order, or (ii) there shall be
any period of thirty (30) consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; or
(h) any Plan shall have any Unfunded Liabilities, or any
Reportable Event shall occur in connection with any Plan; or
(i) the Borrower or any of its subsidiaries shall be the
subject of any proceeding or investigation pertaining to the
release by the Borrower, any of its subsidiaries, or any other
Person of any toxic or hazardous waste or substance into the
environment, or any violation of any federal, state or local
environmental, health or safety law or regulation, which would,
in either case, have a material adverse effect upon the
operations of the Borrower or any of its subsidiaries; or
(j) the acquisition by any Person, or two or more Persons
acting in concert (other than any Person or Persons who own,
prior to that acquisition, 20% or more of the outstanding shares
of the Borrower's voting stock), of beneficial ownership (within
the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934) of 20% or
more of the outstanding shares of the Borrower's voting stock; or
(k) the occurrence of an "Event of Default" as defined in
the Credit Agreement of even date herewith between NationsBank
and the Borrower;
then, and in any such event, the Agent shall, at the direction of
the Majority Lenders, by notice to the Borrower (i) declare the
Advance Commitment and the Letter of Credit Commitment and the
Advance Facility and the Letter of Credit Facility and the
obligations of each Lender under each of the Loan Documents, to be
terminated, whereupon the same shall forthwith terminate, and
(ii) declare the Obligations to be forthwith due and payable,
whereupon such Obligations shall become and be forthwith due and
payable, without presentment, demand, protest or further notice
of any kind, all of which are hereby expressly waived by the
Borrower; provided, however, that upon the occurrence of any Event
of Default described in Section 8.01(f)(i) above, (A) the Advance
Commitment and the Letter of Credit Commitment, and the obligations
of each Lender under each of the Advance Facility and the Letter
of Credit Facility, shall automatically be terminated, and (B) the
Obligations shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of which are
hereby expressly waived by the Borrower.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Amendments, Etc. No amendment or waiver of any
provision of any Loan Document, nor consent to any departure by
the Borrower therefrom, shall in any event be effective unless
the same shall be in writing and signed by the Majority Lenders,
and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given,
provided that no amendment or waiver which (i) increases the
amount of any Lender's Commitment; (ii) decreases the interest
rates specified in Sections 3.06 or any fees payable to the
Lenders in Sections 2.04 and 4.07; (iii) extends the due date or
decreases the amount of any payments required hereunder; (iv)
changes the definition of "Majority Lenders" or "Pro Rata
Shares"; or (v) changes the provisions of this Section 9.01,
shall be effective unless the same is signed by all of the Lenders.
SECTION 9.02. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing
(including telegraphic, telecopy, telex or cable communication)
and mailed, telegraphed, telexed, cabled or delivered, if to the
Borrower, at its address at 000 Xxxx 00xx Xxxxxx, X.X. Xxx 00000,
Xxxxxx, Xxxxxxxx 00000, Attention: Xxxxxxx Xxxxxxxx, Xx.; and if
to the Agent, at its address at 000 Xxxx Xxxxxx, Xxxxxx, Xxxxx
00000, Attention: Xxxxxxxxx Xxxx, with a copy to Xxxxxx & Xxxxxx,
L.L.P., 000 Xxxxxxxxx, 00xx Xxxxx, Xxxxxxx, Xxxxx 00000, Attention:
F. Xxxxxx Xxxxxxxx, Xx.; or, as to each party, at such other address
as shall be designated by such party in a written notice to the other
party. All such notices and communications shall be effective upon
receipt, or if mailed, four (4) days after deposit in the United States
mails; if telegraphed, when delivered to the telegraph company; if
telexed, when confirmed by telex answerback; if telecopied, when verbally
confirmed by telephone; or if cabled, when delivered to the cable company,
except that notices and communications to the Agent pursuant to
Article II, III or IV shall not be effective until received by the Agent.
SECTION 9.03. No Waiver; Remedies. No failure on the part of
the Agent or any Lender to exercise, and no delay in exercising,
any right under any Loan Document shall operate as a waiver
thereof; nor shall any single or partial exercise of any such
right preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 9.04. Payments Set Aside. To the extent that the
Borrower makes a payment or payments to the Agent or any of the
Lenders, or the Agent or any of the Lenders exercise their rights
of set-off, and such payment or payments or the proceeds of such
enforcement or set-off or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other
party under any bankruptcy law, real estate or federal law,
common law or equitable cause, then to the extent of such
recovery, the Obligation or part thereof originally intended to
be satisfied, and all such Liens, rights and remedies therefor,
shall be revived and continued in full force and effect as if
such payment had not been made or such enforcement or set-off had
not occurred.
SECTION 9.05. Costs, Expenses and Taxes.
(a) The Borrower agrees to pay on demand all "Costs and
Expenses," as hereinafter defined. "Costs and Expenses," as used
in this Agreement, shall mean (A) all costs, expenses, fees and
charges incurred by the Agent or its Affiliates (including,
without limitation, NationsBanc Capital Markets, Inc.) and all
fees for services (including disbursements) of the attorneys,
accountants, valuation experts and all professionals (and all
paraprofessionals and other staff employed by such professionals)
employed by the Agent or any such Affiliate from time to time in
any way or for any purpose arising out of, or relating to, the
Obligations of the Borrower, any of the Loan Documents or the
Agent's or such Affiliate's relationship or transactions with the
Borrower, including, without limitation, (i) the development,
preparation, negotiation, execution, delivery, syndication,
modification, review and administration of the Loan Documents,
(ii) the commencement, defense of or intervention in any court
proceeding in any way related to the Obligations of the Borrower
or the Loan Documents, or any other agreements contemplated by
the terms of this Agreement, (iii) the filing of a petition,
complaint, answer, motion or other pleadings, or the taking of
any other action in or with respect to any suit or proceeding
(bankruptcy or otherwise) relating to the Borrower or any Loan
Document, (iv) the enforcement of any of the Agent's or any
Lender's rights to collect any of the Obligations, (v) all costs
and expenses incurred by the Agent or any Affiliate internally
including, but not limited to, travel, food and lodging expenses
for employees, duplicating and document processing costs, and
internal auditing service expenses, and (vi) all audit costs,
appraisal costs and costs of searches, recordings and filings,
all recording and filing fees, all Taxes and all other similar
fees and disbursements; and (B) all costs, expenses, fees and
charges incurred by each Lender (including fees and disbursements
for services of attorneys and paralegals) in connection with the
matters described in clauses (ii), (iii) and (iv) above. The
Borrower also agrees to pay, and to save harmless the Agent and
the Lenders from any delay in paying, any tangibles, intangibles,
documentary stamp and other Taxes, if any, which may be payable
in connection with the execution and delivery of this Agreement
or any of the Loan Documents, or the recording of any hereof or
thereof, or in connection with any modification hereof or
thereof, any of which Taxes payable by the Agent or the Lenders
are to be part of the Costs and Expenses. All Costs and Expenses
provided for in this Section 9.05 may, at the option of the
Lenders, be charged and treated as a Borrowing comprised of Base
Rate Advances made by each Lender in accordance with its Pro Rata
Share.
(b) If any payment of principal of any Eurodollar Rate
Advance is made other than on the last day of the Interest Period
for such Advance, as a result of acceleration of the maturity of
the Notes pursuant to Section 8.01 or for any other reason, or if
any Eurodollar Rate Advance is converted to a Base Rate Advance
pursuant to Section 3.04(a), the Borrower shall, upon demand by
the Agent, pay to each Lender any amounts required to compensate
such Lender for any additional losses, costs or expenses which
such Lender may reasonably incur as a result of such payment
including, without limitation, any loss (including loss of
anticipated profits), cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired
by such Lender to fund or maintain such Advance.
SECTION 9.06. Right of Set-Off. Subject to the provisions of
Section 9.07, the Agent, each Lender and each Affiliate of each
Lender is hereby authorized at any time and from time to time, to
the fullest extent permitted by law, to set off and apply any and
all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing
by the Agent, such Lender or such Affiliate to or for the credit
or the account of the Borrower against any and all of the
Obligations, irrespective of whether or not any demand shall have
been made under any Loan Document and although such Obligations
may be contingent and unmatured. Each Lender agrees to promptly
notify the Agent after any such setoff and application made by
such Lender and the Agent shall promptly thereafter notify the
Borrower of such set-off and application. The Agent agrees
promptly to notify the Borrower after any set-off and application
made by the Agent; provided, however, that the Agent's failure to
notify the Borrower as set forth in this sentence and the
immediately preceding sentence shall not affect the validity of
such set-off and application. The rights of the Agent and each
Lender under this Section 9.06 are in addition to other rights
and remedies (including, without limitation, other rights of
set-off) which the Agent or any Lender may have.
SECTION 9.07. Sharing of Payments. If any Lender shall obtain
any payment (whether voluntary, involuntary, through the exercise
of any right of set-off, or otherwise) on account of the Advances
made by it (other than pursuant to Section 3.08 and Section
9.05(b)) in excess of its Pro Rata share of payments on account
of the Advances obtained by the other Lenders, such Lender shall
forthwith purchase from the other Lenders a participation in the
Advances made by them as shall be necessary to cause such
purchasing Lender to share the excess payment ratably with the
other Lenders; provided; however, that if all or any portion of
such excess payment is thereafter received from such purchasing
Lender, such purchase from the other Lenders shall be rescinded
to the extent of such recovery and the other Lenders shall repay
to the purchasing Lender that proportion of the purchase price
received by it equal to (A) the amount recovered from the
purchasing Lender, divided by (B) the total amount of the
participation purchased by the purchasing Lender, together with
an amount equal to each such Lender's Pro Rata Share of any
interest or other amount payable by the purchasing Lender in
respect of the total amount so recovered. The Borrower agrees
that any Lender so purchasing a participation from any other
Lender pursuant to this Section 9.07 may, to the fullest extent
permitted by law, exercise all its rights of payment (including
the right of set-off) with respect to such participation as fully
as if such Lender were the direct creditor of the Borrower in the
amount of such participation.
SECTION 9.08. Indemnification.
(a) The Borrower hereby indemnifies and holds the Agent and
its Affiliates and each Lender, their respective attorneys and
agents (individually and collectively referred to for purposes of
this Section 9.08 as the "Indemnified Parties") harmless from and
against any and all claims (including, without limitation, causes
of action, cross-claims, counterclaims, rights of set-off and
recoupment), whether by any Affiliate or shareholder of the
Borrower, or by any creditor of the Borrower, or any Affiliate
thereof, which are at any time asserted against the Indemnified
Parties (together with all Costs and Expenses relating to the
defense of such claims) arising out of, or relating to, the
Indemnified Parties' relationship or transactions with the
Borrower or any of its Affiliates, including, without limitation,
(i) any claim for funds received by the Agent or any of the
Lenders and applied to the Obligations; (ii) any claims
contesting the validity or priority of the Liens granted to the
Agent for the benefit of the Lenders pursuant to the terms and
provisions of any of the Loan Documents; and (iii) any claims for
actions taken or not taken by any of the Indemnified Parties in
connection with, or otherwise resulting from, whether directly or
indirectly, the negotiation, structuring, funding, issuance or
administration of the Advances, Letters of Credit and all other
extensions of credit by the Lenders to or on behalf of the
Borrower; provided, however, that the Agent and each Lender
hereby agrees to refund to the Borrower any amounts paid to the
Agent or such Lender by the Borrower pursuant to the foregoing
indemnity to the extent that a court of competent jurisdiction
has found, pursuant to a "Final Order," as hereinafter defined,
that the liability asserted against the Indemnified Parties for
which such indemnity payment was made resulted primarily from the
Indemnified Parties' own willful misconduct or knowing and
intentional violation (individually and not as a co-conspirator
with the Borrower or any of its Affiliates) of any applicable
law, rule or statute, which violation is punishable as a criminal
offense. As used herein, a "Final Order" shall mean an order
entered by a court of competent jurisdiction which is not
interlocutory and as to which (i) the time to appeal or petition
for a writ of certiorari has expired with no appeals or petitions
for a writ of certiorari from such order having been taken, or
(ii) all appeals and petitions for writs of certiorari prosecuted
from such order have been exhausted. An used herein, "knowing
and intentional" violation of a law, rule or statute shall be
interpreted to mean that an Indemnified Party had knowledge both
of the applicable law, rule or statute which it violated and that
its act was a violation of such law, rule or statute.
(b) The Borrower hereby agrees to reimburse the Indemnified
Parties for all Costs and Expenses incurred by the Indemnified
Parties at any time from and after the date of this Agreement
relating in any way to any and all claims which fall within the
scope of the Borrower's indemnity obligations pursuant to Section
9.08(a). All such Costs and Expenses shall be payable by the
Borrower upon demand. At each Lender's option, such Lender may
reimburse itself for any such Costs and Expenses, and the amount
of any such reimbursement shall constitute additional Obligations
of the Borrower under this Agreement.
SECTION 9.09. Change in Accounting Principles. If any changes
in accounting principles from those used in the preparation of
the financial statements referred to in Section 6.01(e) are
hereafter required or permitted by GAAP, and are adopted by the
Borrower with the agreement of its independent certified public
accountants, and such changes result in a change in the method of
calculation or the interpretation of any of the financial
covenants, standards or terms found in Article VII or any other
provision of this Agreement, the Borrower agrees to amend any
such affected terms and provisions to reflect such changes in
GAAP with the result that the criteria for evaluating the
financial condition of the Borrower and its consolidated
subsidiaries shall be the same after such changes in GAAP as if
such changes had not been made.
SECTION 9.10. The Agent's Performance of Defaulted Acts. The
Agent may, but need not, following five (5) days prior notice to
the Borrower and so long as the Borrower shall have failed to
have made such payment or perform such act in a manner satisfactory
to the Lenders, make any payment or perform any act herein required
of the Borrower in any form and manner deemed expedient by the Lenders.
All monies paid for any of the purposes herein authorized and all
expenses paid or incurred in connection therein, including reasonable
attorney's fees shall constitute Obligations and bear interest at
the rate provided herein for Base Rate Advances.
SECTION 9.11. Binding Effect; Assignments; Participations.
This Agreement shall become effective when it shall have been executed
by the Borrower, the Agent and each Lender and thereafter shall
be binding upon and inure to the benefit of the Borrower, the
Agent, the Lenders and their respective successors and assigns,
except that the Borrower shall not have the right to assign its
rights hereunder or any interest herein without the prior written
consent of the Lenders. Each Lender may assign (in minimum
amounts of $5,000,000 and with the consent of the Borrower and
the Agent) to one or more banks or other entities all or any part
or portion of, or may grant participations to one or more banks
or other entities in all or any part or portion of its rights and
obligations hereunder (including, without limitation, its
Commitment, its Note, its Advances or its Letters of Credit).
Upon, and to the extent of, any assignment (unless otherwise
stated therein) made by a Lender hereunder and payment of a
processing fee in the amount of $3,000 to Agent for its own
account, the assignee or purchaser of such assignment shall be a
Lender hereunder for all purposes of this Agreement. Without
limiting the foregoing, each assignee and each purchaser of an
assignment or participation shall, to the fullest extent
permitted by law, have the same rights and benefits hereunder
with respect to the rights and benefits so assigned or
participated as it would have if it were a Lender hereunder.
SECTION 9.12. CHOICE OF LAW. THE LOAN DOCUMENTS SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF TEXAS. ANY DISPUTE BETWEEN THE BORROWER, THE AGENT OR
ANY OF THE LENDERS ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH ANY OF THE LOAN DOCUMENTS AND WHETHER ARISING IN
CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN
ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS AND NOT THE
CONFLICTS OF LAW PROVISIONS OF THE STATE OF TEXAS.
SECTION 9.13. CONSENT TO JURISDICTION.
(a) EXCEPT AS PROVIDED IN SECTION 9.13(b), THE BORROWER,
THE AGENT AND EACH LENDER AGREE THAT ALL DISPUTES BETWEEN THEM
ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH ANY OF
THE LOAN DOCUMENTS OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION THEREWITH OR THE TRANSACTIONS
RELATED THERETO AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR
OTHERWISE, SHALL BE RESOLVED ONLY BY STATE OR FEDERAL COURTS
LOCATED IN DALLAS COUNTY, TEXAS, BUT THE BORROWER, THE AGENT AND
EACH LENDER ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY
HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF DALLAS COUNTY,
TEXAS. THE BORROWER WAIVES IN ALL DISPUTES ANY OBJECTION THAT IT
MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.
(b) THE BORROWER AGREES THAT THE AGENT AND EACH LENDER
SHALL HAVE THE RIGHT TO PROCEED AGAINST THE BORROWER OR ITS
PROPERTY IN A COURT IN ANY LOCATION TO ENABLE SUCH PERSON TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF SUCH
PERSON. THE BORROWER AGREES THAT IT WILL NOT ASSERT ANY
PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING BROUGHT BY THE AGENT
OR ANY LENDER TO REALIZE ON THE BORROWER'S PROPERTY, THE BORROWER
OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF SUCH
PERSON. THE BORROWER WAIVES ANY OBJECTION THAT IT MAY HAVE TO
THE LOCATION OF THE COURT IN WHICH THE AGENT OR ANY LENDER HAS
COMMENCED A PROCEEDING DESCRIBED IN THIS PARAGRAPH.
SECTION 9.14. WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT
AND EACH LENDER EACH WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR
OTHERWISE, BETWEEN OR AMONG THE BORROWER, THE AGENT OR ANY OF THE
LENDERS ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL
TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH
ANY OF THE LOAN DOCUMENTS OR ANY OTHER INSTRUMENT, DOCUMENT OR
AGREEMENT EXECUTED OR DELIVERED IN CONNECTION THEREWITH OR THE
TRANSACTIONS RELATED THERETO. THE BORROWER, THE AGENT AND EACH
LENDER HEREBY AGREE AND CONSENT THAT ANY SUCH CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
JURY.
SECTION 9.15. Term. This Agreement shall remain in full force
and effect until the later to occur of (i) the Termination Date,
and (ii) the repayment in full of all the Obligations and the
extinguishment of all Letters of Credit issued hereunder.
SECTION 9.16. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by the different
parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
SECTION 9.17. Lenders' Creation of Security Interest.
Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time create a security interest in all or
any portion of its rights under this Agreement (including,
without limitation, Obligations owing to it and the Note held by
it) in favor of any Federal Reserve bank in accordance with
Regulation A of the Federal Reserve Board.
ARTICLE X
THE AGENT
SECTION 10.01. Appointment. Each Lender hereby designates and
appoints NationsBank as its Agent under the Loan Documents, and
each Lender hereby irrevocably authorizes the Agent to take such
action on its behalf under the provisions of the Loan Documents
and to exercise such powers as are set forth herein or therein,
together with such other powers as are reasonably incidental
thereto. As to any matters not expressly provided for by this
Agreement (including, without limitation, enforcement or
collection of the Notes), the Agent shall not be required to
exercise any discretion or take any action, but shall be required
to act or to refrain from acting (and shall be fully protected in
so acting or refraining from acting) upon the instructions of the
Majority Lenders, and such instructions shall be binding upon all
Lenders and all holders of Notes; provided, however, that the
Agent shall not be required to take any action which exposes the
Agent to personal liability or which is contrary to any Loan
Document or applicable law.
SECTION 10.02. Agent's Reliance. Etc. Neither the Agent nor any
of its Affiliates, directors, officers, agents or employees shall
be liable for any action taken or omitted to be taken by it or
then under or in connection with any Loan Document, except for
its or their own gross negligence or willful misconduct. Without
limitation of the generality of the foregoing, the Agent: (a) may
treat the payee of any Note as the holder thereof until the Agent
has received written notice of the assignment or transfer thereof
signed by such payee and in form satisfactory to the Agent
(together with the processing fee described in Section 9.11); (b)
may consult with legal counsel (including counsel for the
Borrower), independent public accountants and other experts
selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (c) makes no
warranty or representation to any Lender and shall not be
responsible to any Lender for any statements, warranties or
representations made in or in connection with any Loan Document;
(d) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or
conditions of any Loan Document or to inspect the property
(including the books and records) of the Borrower; (e) shall not
be responsible to any Lender for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of
any Loan Document or collateral covered thereby or any other
instrument or document furnished pursuant thereto; and (f) shall
incur no liability under or in respect of any Loan Document by
acting upon any notice, consent, certificate or other instrument
or writing (which may be by telegram, cable, telecopy or telex)
believed by it to be genuine and signed or sent by the proper
party or parties.
SECTION 10.03. NationsBank and Affiliates. With respect to its
Commitment, the Advances made by it, the Note issued to it and
the Letters of Credit by it, NationsBank shall have the same
rights and powers under the Loan Documents as any other Lender
and may exercise the same as though it were not the Agent, and
the term "Lender" or "Lenders" shall, unless otherwise expressly
indicated, include NationsBank in its individual capacity.
NationsBank and its Affiliates may accept deposits from, lend
money to, act as trustee under indentures of, and generally
engage in any kind of business with, the Borrower and any person
or entity who may do business with or own securities of the
Borrower, all as if NationsBank were not the Agent and without
any duty to account therefor to the Lenders.
SECTION 10.04. Lender Credit Decision. Each Lender acknowledges
that it has, independently and without reliance upon the Agent or
any of its Affiliates or any other Lender and based on the
financial statements referred to in Section 6.01 and such other
documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement.
Each Lender also acknowledges that it will, independently and
without reliance upon the Agent or any of its Affiliates or any
other Lender and based on such documents and information an it
shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Loan
Documents.
SECTION 10.05. Indemnification. The Lenders agree to indemnify
the Agent and its Affiliates (to the extent not reimbursed by the
Borrower) ratably according to their Pro Rata Shares, from and
against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses and
disbursements of any kind or nature whatsoever which may be
imposed on, incurred by, or asserted against the Agent or any of
its Affiliates in any way relating to or arising out of any Loan
Document, or any action taken or omitted by the Agent or any of
its Affiliates pursuant to the Loan Document, provided that no
Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the
Agent's or any of its Affiliates' gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender
agrees to reimburse the Agent and its Affiliates promptly upon
demand for its Pro Rata Share of any reasonable out-of-pocket
expenses (including counsel fees) incurred by the Agent or any of
its Affiliates in connection with the preparation, execution,
administration, or enforcement of, or legal advice in respect of
rights or responsibilities under, the Loan Documents, or any of
them, to the extent that the Agent or such Affiliate is not
reimbursed for such expenses by the Borrower.
SECTION 10.06. Successor Agent. The Agent may resign at any time
as Agent under the Loan Documents by giving written notice
thereof to the Lenders and the Borrower. Upon any such
resignation, all of the Lenders shall have the right to appoint a
successor Agent thereunder. If no successor Agent shall have
been so appointed by all of the Lenders, and shall have accepted
such appointment within thirty (30) days after the retiring
Agent's giving of notice of resignation, then the retiring Agent
may, on behalf of the Lenders, appoint a successor Agent, which
shall be a commercial bank organized under the laws of the United
States of America or of any State thereof and having a combined
capital and surplus of at least $50,000,000. Upon the acceptance
of any appointment as Agent under the Loan Documents by a
successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and
duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations under the Loan
Documents. After any retiring Agent's resignation or removal as
Agent under the Loan Documents, the provisions of this Article X
shall continue to inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under the Loan Documents.
SECTION 10.07. Invalidated Payments. If any amounts distributed
by the Agent to a Lender are subsequently returned or repaid by
the Agent to the Borrower or any of its representatives or
successors in interest, whether by court order, settlement or
otherwise, such Lender shall, promptly upon its receipt of notice
thereof from the Agent, pay to the Agent such amount. If any
such amounts are recovered by the Agent from the Borrower or any
of its representatives or successors in interest, the Agent shall
redistribute such recovered amounts to the Lenders on the same
basis as such amounts were originally distributed. The obligations
of the Lenders and the Agent under this Section 10.07 shall survive
the repayment of the Notes and the termination of the Loan Documents.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto
duly authorized, as of the date first above written.
VICORP RESTAURANTS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------
Name: Xxxxxxx X. Xxxxxx
Title: Treasurer
Pro Rata Share: 71.42857% NATIONSBANK OF TEXAS, N.A., as Agent and a
Lender
By: /s/ Xxxxx X. Xxxxxxx
--------------------
Xxxxx X. Xxxxxxx
Senior Vice President
Domestic Lending Office:
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxxx X. Xxxxxxx
Eurodollar Lending Office:
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxxx X. Xxxxxxx
Pro Rata Share: 28.57143% COLORADO NATIONAL BANK, as a Lender
By: /s/ Xxxxxx X. Xxxxxxx
---------------------
Xxxxxx X. Xxxxxxx
Vice President
Domestic Lending Office:
000 00xx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx
Eurodollar Lending Office:
000 00xx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx
