EXHIBIT (b)(2)
Execution Copy
FIFTH AMENDED AND RESTATED
CREDIT AGREEMENT
DATED AS OF APRIL 13, 2005
BY AND BETWEEN
QUALITY DINING, INC.,
as Borrower,
AND
THE BANKS WHICH ARE PARTY HERETO
AND
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
as Administrative Agent
BANK OF AMERICA, NATIONAL ASSOCIATION,
as Syndication Agent
NATIONAL CITY BANK OF INDIANA,
as Documentation Agent
X.X. XXXXXX SECURITIES INC.,
as Arranger
TABLE OF CONTENTS
PAGE
ARTICLE I. DEFINITIONS............................................................................... 1
ARTICLE II. THE LOANS................................................................................. 18
2.1 Revolving Credit Loans........................................................................ 18
2.2 Term Loans.................................................................................... 21
2.3 Interest on Loans............................................................................. 22
2.4 Repayment of Loans............................................................................ 24
2.5 Increased Costs; Capital Adequacy............................................................. 25
2.6 Liquidation Fee............................................................................... 27
2.7 Basis for Determining LIBOR Rate Inadequate or Unfair......................................... 27
2.8 Payments...................................................................................... 28
2.9 Setoff; etc................................................................................... 28
2.10 Revolving Credit Commitment Fee............................................................... 29
2.11 Upfront Fees.................................................................................. 30
2.12 Letters of Credit............................................................................. 30
2.13 Application of Payments and Collections....................................................... 33
2.14 The Swing Line................................................................................ 34
ARTICLE III. CONDITIONS PRECEDENT...................................................................... 37
3.1 Conditions Precedent to Effectiveness......................................................... 37
3.2 Conditions Precedent to All Loans, Swing Loans and Issuances of Letters of Credit............. 40
ARTICLE IV. REPRESENTATIONS AND WARRANTIES............................................................ 40
4.1 Organization; etc............................................................................. 40
4.2 Due Authorization............................................................................. 41
4.3 Subsidiaries.................................................................................. 41
4.4 Validity of the Agreement; etc................................................................ 41
4.5 Financial Statements.......................................................................... 42
4.6 Litigation; etc............................................................................... 42
4.7 Compliance with Law........................................................................... 42
4.8 ERISA Compliance.............................................................................. 42
4.9 Title to Assets............................................................................... 43
4.10 Indebtedness.................................................................................. 43
4.11 Use of Proceeds............................................................................... 43
4.12 Margin Stock.................................................................................. 43
4.13 Investment Company Act........................................................................ 43
4.14 Unregistered Securities....................................................................... 43
4.15 Public Utility Holding Company Act............................................................ 44
4.16 Accuracy of Information....................................................................... 44
4.17 Tax Returns; Audits........................................................................... 44
4.18 Environmental and Safety Regulations.......................................................... 44
4.19 Pro Formas; Forecasts......................................................................... 45
4.20 Solvency...................................................................................... 45
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TABLE OF CONTENTS
(continued)
PAGE
4.21 No Default; No Material Adverse Occurrence.................................................... 45
4.22 Subsidiary Guarantors; Security Documents..................................................... 45
4.23 Collateral.................................................................................... 45
4.24 Merger........................................................................................ 46
4.25 Affiliated Lease Agreements................................................................... 46
ARTICLE V. CERTAIN AFFIRMATIVE COVENANTS............................................................. 47
5.1 Financial Information; etc.................................................................... 47
5.2 Maintenance of Corporate Existence; etc....................................................... 48
5.3 Payment of Taxes; etc......................................................................... 48
5.4 Compliance with Laws.......................................................................... 49
5.5 Books and Records; etc........................................................................ 49
5.6 Insurance..................................................................................... 49
5.7 Conduct of Business........................................................................... 49
5.8 Maintain Business............................................................................. 50
5.9 ERISA......................................................................................... 50
5.10 Changes to GAAP............................................................................... 50
5.11 Use of Proceeds............................................................................... 50
5.12 Subsidiary Guaranty........................................................................... 51
5.13 Security Documents............................................................................ 51
5.14 Survival of Warranties and Representations.................................................... 53
ARTICLE VI. CERTAIN FINANCIAL COVENANTS AND NEGATIVE COVENANTS........................................ 54
6.1 Fixed Charge Coverage Ratio................................................................... 54
6.2 Indebtedness Ratio............................................................................ 54
6.3 Limitations on Indebtedness................................................................... 54
6.4 Liens......................................................................................... 55
6.5 Dividends, Stock Purchase and Restricted Payments............................................. 56
6.6 Sales of Assets............................................................................... 56
6.7 Mergers and Consolidations.................................................................... 57
6.8 Preferred Stock of Subsidiaries............................................................... 57
6.9 Disposition of Securities of a Subsidiary..................................................... 57
6.10 Investments................................................................................... 58
6.11 Transactions with Affiliates.................................................................. 58
6.12 Capital Expenditures.......................................................................... 58
6.13 Acquisitions.................................................................................. 59
6.14 SPE........................................................................................... 59
6.15 Rate Hedging Obligations...................................................................... 59
6.16 Franchise Agreements.......................................................................... 59
6.17 Management Compensation....................................................................... 59
ARTICLE VII. EVENTS OF DEFAULT......................................................................... 60
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TABLE OF CONTENTS
(continued)
PAGE
7.1 Events of Default............................................................................. 60
7.2 Action If Event of Default.................................................................... 62
7.3 Remedies...................................................................................... 62
ARTICLE VIII. THE AGENT................................................................................. 63
8.1 Appointment and Authorization................................................................. 63
8.2 Power......................................................................................... 63
8.3 Employment of Counsel; etc.................................................................... 63
8.4 Reliance...................................................................................... 64
8.5 General Immunity.............................................................................. 64
8.6 Credit Analysis............................................................................... 64
8.7 Agent and Affiliates.......................................................................... 65
8.8 Indemnification............................................................................... 65
8.9 Successor Administrative Agent................................................................ 65
8.10 Administrative Agent's Fees................................................................... 66
8.11 Collateral Matters............................................................................ 66
8.12 Agents and Arranger........................................................................... 66
ARTICLE IX. AMENDMENT AND RESTATEMENT................................................................. 67
9.1 Amendment and Restatement of Existing Credit Agreement........................................ 67
9.2 Allocation of Loans under Existing Credit Agreement........................................... 67
9.3 Replacement of Notes.......................................................................... 69
9.4 Security Documents............................................................................ 69
9.5 Release of Excluded Assets.................................................................... 69
9.6 Release of Excluded Subsidiaries.............................................................. 70
ARTICLE X. MISCELLANEOUS............................................................................. 70
10.1 Waivers, Amendments; etc...................................................................... 70
10.2 Payment Dates................................................................................. 70
10.3 Notices....................................................................................... 70
10.4 Costs and Expenses............................................................................ 71
10.5 Indemnification............................................................................... 71
10.6 Severability.................................................................................. 72
10.7 Cross-References.............................................................................. 72
10.8 Headings...................................................................................... 72
10.9 Governing Law................................................................................. 72
10.10 Successors and Assigns........................................................................ 72
10.11 Execution in Counterparts..................................................................... 74
10.12 USA Patriot Act Notice........................................................................ 74
10.13 Consent to Jurisdiction....................................................................... 74
10.14 Waiver of Jury Trial.......................................................................... 74
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TABLE OF CONTENTS
(continued)
SCHEDULE I - Commitments
ANNEX I - List of Jurisdictions in which the Borrower is Qualified to Do Business
ANNEX II - List of Subsidiaries; Jurisdiction of Incorporation and Stock Ownership
ANNEX III - Indebtedness; Liens
ANNEX IV - Investments
ANNEX V - Description of Subject Assets
ANNEX VI - List of Excluded Property
ANNEX VII - Affiliated Lease Agreements
ANNEX VIII - Excluded Subsidiaries
ANNEX IX - Environmental Matters
EXHIBIT A - Form of Revolving Credit Note
EXHIBIT B - Notice of Borrowing
EXHIBIT C - Form of Term Note
EXHIBIT D - Effective Date Borrowing Notice
EXHIBIT E - Form of Swing Line Note
EXHIBIT F - Legal Opinion of Counsel
EXHIBIT G - Form of Assignment Agreement
EXHIBIT H - Form of Buy-Out Note
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FIFTH AMENDED AND RESTATED
CREDIT AGREEMENT
This Fifth Amended and Restated Credit Agreement dated as of April 13,
2005 by and between QUALITY DINING, INC., an Indiana corporation, as Borrower,
the banks now or hereafter parties hereto (the "Banks"), and JPMORGAN CHASE
BANK, NATIONAL ASSOCIATION, in its capacity as Administrative Agent for the
Banks (in its capacity as such, and together with any successor administrative
agent hereunder, the "Administrative Agent").
WHEREAS, Quality Dining, Inc. and GAGHC, Inc., as borrowers under the
Existing Credit Agreement (the "Existing Borrowers"), have requested, and the
Banks have agreed, to amend the Existing Credit Agreement (as defined below);
WHEREAS, GAGHC, Inc. has requested no loans outstanding under the Existing
Credit Agreement and the Existing Borrowers desire, among other things, to
remove GAGHC, Inc. as a borrower;
WHEREAS, the Existing Borrowers, the Banks and the Administrative Agent
have agreed to enter into this Agreement in order to amend and restate the
Existing Credit Agreement; and
WHEREAS, it is the intention of the parties to this Agreement that this
Agreement not constitute a novation of the obligations under the Existing Credit
Agreement and that, from and after the Effective Date, the Existing Credit
Agreement shall be amended and restated hereby and all references herein to
"hereunder," "hereof," or words of like import and all references in any other
Loan Document to the "Credit Agreement" or words of like import shall mean and
be a reference to the Existing Credit Agreement as amended and restated hereby.
NOW, THEREFORE, in consideration of the terms and conditions contained
herein, and of any loans or extensions of credit heretofore, now or hereafter
made to or for the benefit of the Borrower by the Banks and the Administrative
Agent, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
The following terms when used in this Agreement shall, except where the
context otherwise requires, have the following meanings (such definitions to be
equally applicable to the singular and plural forms thereof):
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the Effective Date, by which the Borrower
and/or its Subsidiaries (other than an SPE) (i) acquires any going business or
all or substantially all of the assets of any firm, corporation or division
thereof, whether through purchase of assets, merger or otherwise or (ii)
directly or indirectly acquires (in one transaction or as the most recent
transaction in a series of transactions) voting power for the election of
directors (other than securities having such power only by reason of the
happening of a contingency) or a majority (by percentage of voting power) of the
outstanding partnership interests of a partnership (any such target business,
assets, corporation, partnership or the like herein referred to as a "Target").
"Additional Equity Contribution" shall mean the aggregate amount of equity
contributed to or realized by the Borrower as of the effective date of the
Merger, in excess of that reflected in the pro forma balance sheet of the
Borrower and its consolidated subsidiaries delivered to the Banks pursuant to
Section 4.19 hereof, as a result of (i) cash consideration received by the
Borrower in respect of the issuance and sale of additional shares of its common
stock after the effectiveness of the Merger or (ii) the reduction of cash
consideration paid or payable by the Borrower in the Merger as a result of
certain shareholders of Quality Dining, Inc. transferring their shares to Merger
Corp. in exchange for shares of Merger Corp. which were converted into shares of
the Borrower in the Merger.
"Adjusted GAAP" shall mean GAAP, provided that it shall exclude the
effects of any consolidation in the consolidated financial statements of the
Borrower of any real estate partnership which is a party to an Affiliated Lease
Agreement to the extent that (and only to the extent that) the Borrower and its
Subsidiaries have (x) no ownership interest in such partnership and (y) no
obligation to pay or guarantee any indebtedness, liability or obligation of such
partnership. All accounting terms used in the calculation of any financial
covenant or test shall be interpreted and all accounting determinations
hereunder in the calculation of any financial covenant or test shall be made in
accordance with Adjusted GAAP.
"Adjusted LIBOR Rate" shall mean a rate per annum determined pursuant to
the following formula:
LIBOR Rate
Adjusted LIBOR Rate = -----------------------
1 - Reserve Requirement
"Affiliate" shall include, with respect to any Person, any Person which
directly or indirectly controls, is controlled by, or is under common control
with such party and in addition, in the case of the Borrower and each
Subsidiary, each officer, director, stockholder, joint venturer and partner of
the Borrower and each Subsidiary. For purposes of this definition, a Person
shall be deemed to control another Person if the controlling Person owns
directly or indirectly five percent (5%) or more of the shares of stock of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.
"Affiliated Lease Agreement" means any lease agreement entered into by the
Borrower or any of its Subsidiaries with any member of Management or any
Affiliate thereof for the lease by such Borrower or such Subsidiary of any
Property.
"Agent" shall mean each of the Administrative Agent, the Syndication Agent
and the Documentation Agent, and "Agents" shall mean the Administrative Agent,
the Syndication Agent and the Documentation Agent collectively.
"Agreement" shall mean this Fifth Amended and Restated Credit Agreement as
originally executed and as amended, modified or supplemented from time to time.
"Arranger" shall mean X.X. Xxxxxx Securities Inc., as book manager and
lead arranger of the credit facilities provided to the Borrower by this
Agreement.
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"Banks" shall mean the Banks referenced in the preamble hereto or any
successor thereto or permitted assignee under the terms of this Agreement,
including, without limitation, JPMorgan Chase Bank as Issuing Bank and LaSalle,
in its individual capacity.
"Base Rate" shall mean, for any day, a fluctuating rate of interest per
annum equal to the higher of (i) the Prime Rate for such day, and (ii) the
Federal Funds Rate plus 0.50%.
"Base Rate Loan" shall mean, as of any date, a Loan designated as a "Base
Rate Loan" pursuant to Section 2.1(d), Section 2.2(a) or Section 2.3(c).
"Board of Directors" shall mean the Board of Directors or other governing
body of the Borrower or any Subsidiary Guarantor, as applicable.
"Borrower" shall mean Quality Dining, Inc., an Indiana corporation, and
its successors and assigns, and any surviving, resulting or transferee
corporation.
"Borrowing" shall have the meaning assigned thereto in Section 2.1(a).
"Business Day" shall mean any day on which commercial banks are not
authorized or required to close in Houston, Texas, or Chicago, Illinois, and if
such day relates to an event, a transaction or a notice in respect of a LIBOR
Base Loan, a day which is also a day on which dealings in U.S. Dollar deposits
are carried out in the London interbank market.
"Buy-Out Note" shall mean a subordinated note substantially in the form
attached hereto as Exhibit H, issued by the Borrower pursuant to the terms of
the Shareholders Agreement.
"Capital Expenditure" shall mean any expenditure by the Borrower or any
Subsidiary in respect of the purchase or other acquisition of assets which, in
conformity with Adjusted GAAP, are included in the property, plant, equipment,
or other fixed asset accounts reflected in the consolidated balance sheet of the
Borrower.
"Capital Lease" shall mean a lease of (or other agreement conveying the
right to use) real and/or personal property, which obligation is, or in
accordance with GAAP (including Statement of Financial Accounting Standards No.
13 of the Financial Accounting Standards Board) is required to be, classified
and accounted for as a capital lease on a balance sheet of such Person.
"Capital Lease Obligations" shall mean, with respect to any Person, any
obligation of such Person to pay rent or other amounts under a Capital Lease and
for purposes of this Agreement the amount of each Capital Lease Obligation shall
be the capitalized amount thereof determined in accordance with Adjusted GAAP.
"Change of Control" shall mean the ownership, through purchase or
otherwise (including the agreement to act in concert without anything more), by
any Person or group of Persons (other than one or more of Xxxxxx X. Xxxxxxxxxxx,
the spouse, children or grandchildren or the heirs of Xxxxxx X. Xxxxxxxxxxx or
any trusts created for their benefit) acting in concert, directly or indirectly,
in one or more transactions, of (i) beneficial ownership or control of
securities representing more than 30% of the combined voting power of the
Borrower's Voting Stock or (ii) substantially all of the assets of the Borrower.
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"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
"Collateral" shall mean all collateral referred to in the Security
Documents and all other property that is or is intended to be subject to any
Lien in favor of the Administrative Agent for the benefit of the Banks.
"Collateral Assignment of Franchise Agreements" shall mean each of the
collateral assignments of franchise agreements, in form and substance reasonably
acceptable to the Administrative Agent, heretofore or hereafter executed and
delivered by the Borrower and/or its Subsidiaries to the Administrative Agent
for the benefit of the Banks, as the same may be amended, supplemented or
otherwise modified from time to time.
"Collateral Assignment of Leases" shall mean each of the collateral
assignments of leases, in form and substance reasonably acceptable to the
Administrative Agent, heretofore or hereafter executed and delivered by the
Borrower and its Subsidiaries to the Administrative Agent for the benefit of the
Banks, as the same may be amended, supplemented or otherwise modified from time
to time.
"Commitment" shall mean, for each Bank, the aggregate amount of such
Bank's Revolving Credit Commitment, Term Loan Commitment and Swing Line
Commitment (if any); provided, however, that the aggregate Commitments of all
Banks shall not exceed $58,000,000.
"Commitment Termination Date" shall mean the date which is the earlier of
(a) the Maturity Date or (b) the date upon which the obligation of the Banks to
make Revolving Credit Loans is terminated pursuant to Section 2.1(c).
"Consolidated Capital Expenditures" shall mean, for any fiscal period, the
sum of all Capital Expenditures made by the Borrower and its consolidated
Subsidiaries during such period.
"Consolidated Cash Flow" of any person shall mean, for any period for
which the amount thereof is to be determined, Consolidated Net Income of the
Borrower and its Subsidiaries for such period, plus (to the extent deducted in
determining Consolidated Net Income and without duplication to adjustments to
net income (determined in accordance with Adjusted GAAP) made in the
determination of Consolidated Net Income) (i) provisions for any Federal, state
or local taxes during such period, (ii) interest expense during such period,
(iii) depreciation and amortization during such period, and (iv) other non-cash
income or expenses during such period.
"Consolidated Net Income" shall mean, for any period for which the amount
thereof is to be determined, the net income (or net losses) of the Borrower and
its Subsidiaries on a consolidated basis as determined in accordance with
Adjusted GAAP after deducting, to the extent included in computing said net
income and without duplication, (i) the income (or deficit) of any Person (other
than a Subsidiary) in which the Borrower or any of its Subsidiaries has any
ownership interest, except to the extent that any such income has been actually
received by the Borrower or such Subsidiary in the form of cash dividends or
similar cash distributions, (ii) any income (or deficit) of any other Person
accrued prior to the date it becomes a Subsidiary of the Borrower or merges into
or consolidates with the Borrower or another of its Subsidiaries, (iii) the gain
or loss (net of any tax effect) resulting from the sale, exchange or disposal of
any capital assets, (iv) any gains or losses, or other income (net of any tax
effect in respect thereof) which is
4
nonrecurring or otherwise properly classified as extraordinary in accordance
with GAAP, (v) income resulting from any reappraisal, reevaluation or write-up
of any assets, (vi) any portion of the net income of the Subsidiaries which for
any reason is not available for distribution, and (vii) the proceeds of any life
insurance policy on the life of any officer, director or employee of the
Borrower or any of its Subsidiaries.
"Default" shall mean any event which if continued uncured would, with
notice or lapse of time or both, constitute an Event of Default.
"Earnings Available for Fixed Charges" shall mean, for any period for
which the amount thereof is to be determined, the sum of (without duplication):
(i) the Consolidated Cash Flow of the Borrower and its Subsidiaries for such
period, and (ii) the rents and other payments (exclusive of property taxes,
property and liability insurance premiums and maintenance costs) made by the
Borrower and its Subsidiaries during such period under Operating Leases.
"Effective Date" shall mean the date on which the conditions set forth in
Article III are satisfied.
"Effective Date Borrowing Notice" shall mean the notice in the form
attached hereto as Exhibit D, delivered by the Borrower to the Administrative
Agent pursuant to Section 2.2(a) hereof.
"Environmental Indemnity" shall mean the Environmental Indemnity dated as
of May 30, 2002 executed by the Borrower and its Subsidiaries for the benefit of
the Administrative Agent for the Banks, as it may be amended, supplemented or
otherwise modified from time to time.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, together with the
regulations thereunder and under the Code, in each case as in effect from time
to time. References to sections of ERISA shall be construed to also refer to any
successor sections.
"ERISA Affiliate" shall mean any corporation, trade or business that is,
along with the Borrower or any of its Subsidiaries, a member of a controlled
group of corporations or a controlled group of trades or businesses, as
described in Sections 414(b) and 414(c), respectively, of the Code or Section
4001 of ERISA.
"Event of Default" shall mean any Event of Default described in Article
VII.
"Excess Proceeds" in respect of any Replacement Mortgage Transaction shall
mean an amount by which the proceeds received in connection with the Replacement
Mortgage Transaction exceeds the principal amount of the indebtedness secured by
the Mortgage Transaction being refinanced by such Replacement Mortgage
Transaction.
"Excluded Property" shall mean each parcel of Real Property identified on
Annex VI to the extent that, and only for so long as, (x) such Real Property is
subject to a lease which prohibits the execution of a Leasehold Mortgage or
Collateral Assignment of Lease, as applicable, without the prior consent,
approval or other action of the lessor and (y) the Borrower
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and its Subsidiaries have been unable, after using commercially reasonable
efforts, to obtain the consent, approval or other action of the lessor thereto.
"Excluded Subsidiary" shall mean each of the Subsidiaries of the Borrower
designated as such by the Borrower on Annex VIII hereto, provided that the total
assets of the Subsidiaries so designated shall not exceed $500,000 and provided
further that at any time the condition set forth in the foregoing proviso is not
satisfied one or more of the Subsidiaries identified on Annex VIII shall execute
the Subsidiary Guaranty pursuant to Section 5.12 hereof and all applicable
Security Documents pursuant to Section 5.13 hereof, such that after giving
effect thereto the condition set forth in the foregoing proviso shall be
satisfied in respect of the Subsidiaries identified on Annex VIII which have not
become Subsidiary Guarantors, and thereafter such Subsidiaries executing the
Loan Documents shall be Subsidiary Guarantors and Pledgors for all purposes of
this Agreement and the Loan Documents and shall no longer be deemed to be
"Excluded Subsidiaries".
"Executive Officers" shall mean Xxxxxx X. Xxxxxxxxxxx, Xxxx X. Xxxxx,
Xxxxx X. Xxxxxxxxxxx and Xxxxxx X. Xxxxxxxxxxx and any person who succeeds any
of such individuals to the position with the Borrower or any of its Subsidiaries
held by such individual as of the Effective Date or assumes the duties and
responsibilities of such individual as of the Effective Date.
"Existing Credit Agreement" shall mean the Fourth Amended and Restated
Revolving Credit Agreement dated as of May 30, 2002 by and between, Quality
Dining, Inc. and GAGHC, Inc., as borrowers, the Banks which are a party thereto
(the "Existing Banks") and JPMorgan Chase Bank, as Administrative Agent, as
amended, supplemented or modified prior to the date hereof.
"Existing Notes" shall mean the promissory notes issued by the Borrower in
favor of the Existing Banks evidencing the loans outstanding under the Existing
Credit Agreement.
"Federal Funds Rate" means a fluctuating interest rate per annum equal for
each day to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day which is a Business Day, the
average of the quotations for such day on such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by it.
"Fixed Charge Coverage Ratio" shall mean the ratio, determined as of the
last day of a fiscal quarter, of (x) Earnings Available for Fixed Charges to (y)
Fixed Charges, each determined for a period of twelve months ending on such
date.
"Fixed Charges" shall mean, for any period for which the amount thereof is
to be determined, the sum of the following (without duplication): (i) Interest
Expense of the Borrower and its Subsidiaries for such period, plus (ii) all
rents and other payments (exclusive of property taxes, property and liability
insurance premiums and maintenance costs) which are made by the Borrower and its
Subsidiaries during such period under Operating Leases in respect of which the
Borrower or any of its Subsidiaries is obligated as a lessee or user or as a
guarantor of the
6
obligations of a lessee or user, plus (iii) Capital Lease Obligations paid or
required to be paid by the Borrower or any of its Subsidiaries during such
period, plus (iv) the Principal Requirements for such period.
"Franchise" in respect of any Person shall mean all rights of such Person
as a franchisee pursuant to a Franchise Agreement relating to one or more of the
businesses conducted by such Person or an Affiliate of such Person.
"Franchise Agreement" in respect of any Person shall mean each of the
franchise agreements to which such Person is a party as franchisee, as any of
the same may from time to time be amended, modified, supplemented or restated.
"Funded Debt" of any Person shall mean all Indebtedness owed or guaranteed
by such Person which by its terms matures more than one year from the date of
creation or which is renewable at the option of the obligor for more than one
year from such date whether or not theretofore renewed.
"GAAP" shall mean generally accepted accounting principles consistently
applied and maintained throughout the term of this Agreement except for such
changes as are in accordance with the generally accepted accounting principles
in effect at the time of such change, shall be concurred in by the certified
public accountants certifying the financial statements of the Borrower and its
Subsidiaries and shall be disclosed in the financial statements (or notes
thereto).
"Guarantee(s)" shall mean all guarantees, sales with recourse,
endorsements (other than for collection or deposit in the ordinary course of
business) and other obligations (contingent or otherwise) by any Person to pay,
purchase, repurchase or otherwise acquire or become liable upon or in respect of
any Indebtedness of any other Person, and, without limiting the generality of
the foregoing, all obligations (contingent or otherwise) by any Person to
purchase products, supplies or other property or services for any Person under
agreements requiring payment therefor regardless of the non-delivery or
non-furnishing thereof, or to make investments in any other Person, or to
maintain the capital, working capital, solvency or general financial condition
of any other Person, or to indemnify any other Person against and hold him
harmless from damages, losses and liabilities, all under circumstances intended
to enable such other Person or Persons to discharge any Indebtedness or to
comply with agreements relating to such Indebtedness or otherwise to assure or
protect creditors against loss in respect of such Indebtedness. The amount of
any Guarantee shall be deemed to be the amount of the Indebtedness of, or
damages, losses or liabilities of, the other Person or Persons in connection
with which the Guarantee is made or to which it is related unless the
obligations under the Guarantee are limited to a determinable amount, in which
case the amount of such Guarantee shall be deemed to be such determinable
amount.
"Indebtedness" of any Person shall mean and include, as of any date as of
which the amount thereof is to be determined, (i) all obligations of such Person
for borrowed money or which has been incurred in connection with the acquisition
of Property or services (other than current trade payables incurred in the
ordinary course of business and paid in accordance with customary trade terms);
(ii) all obligations of such Person evidenced by notes, bonds, debentures or
similar instruments; (iii) Guarantees by such Person; (iv) all indebtedness,
liabilities and other
7
obligations secured by any Lien on or in respect of Property of such Person,
whether or not liability has been assumed by such Person for the payment of such
obligations; (v) all indebtedness, liabilities and other obligations of such
Person arising under any conditional sale or other title retention agreement,
whether or not the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property; (vi) all obligations of such Person as an account party in respect of
letters of credit and bankers acceptances; (vii) all net obligations of such
Person in respect of Rate Hedging Obligations and (viii) Capital Lease
Obligations of such Person.
"Indebtedness Ratio" shall mean, as of any date of determination thereof,
the ratio of (i) Funded Debt of the Borrower and its Subsidiaries as of such
date, excluding, however, for purposes of this calculation, any obligations in
respect of letters of credit (to the extent undrawn) securing insurance and
workers' compensation programs of the Borrower and its Subsidiaries, to (ii) the
Pro Forma Consolidated Cash Flow of the Borrower and its Subsidiaries for the
twelve-month period ending on such date.
"Intercreditor Agreement" shall mean the Intercreditor Agreement dated as
of August 3, 1999 by and among Captec Financial Group, Inc. and CNL Financial
Services, Inc., as mortgage lenders, JPMorgan Chase Bank (as successor to Chase
Bank of Texas, National Association), for itself and as Administrative Agent,
the Borrower, Bravokilo, Inc., Southwest Dining, Inc. and Grayling Corporation,
as the operating companies, and BKCAP, LLC, BKCN, LLC, SWCAP, LLC, SWCN, LLC,
GRAYCAP, LLC, and GRAYCN, LLC, as borrowers, as it may be amended or modified
from time to time.
"Interest Expense" shall mean, for any period for which the amount thereof
is to be determined, the consolidated interest expense of the Borrower and its
Subsidiaries, including all interest on Indebtedness (including imputed interest
related to Capitalized Leases), all amortization of debt discount and expense
and Rate Hedging Obligations of the Borrower and its Subsidiaries, to the extent
required to be reflected on the income statement of the Borrower and its
Subsidiaries on a consolidated basis in accordance with Adjusted GAAP.
"Interest Period" shall mean, with respect to any LIBOR Base Loan, the
period designated by the Borrower for the computation of interest commencing on
the date the relevant Loan is made, or continued as or converted to a LIBOR Base
Loan pursuant to Section 2.3(c), and ending on the date which is one (1), two
(2), three (3) or six (6) months thereafter. For purposes of determining an
Interest Period, a month means a period starting on one day in a calendar month
and ending on a numerically corresponding date in the next calendar month,
provided, however, that if there is no numerically corresponding day in the
month in which an Interest Period is to end or if an Interest Period begins on
the last day of a calendar month, such Interest Period shall end on the last
Business Day of such next calendar month and provided further that no Interest
Period may extend beyond the Termination Date.
"Investment" shall mean any purchase of capital stock, obligations or
other securities of any Person, any contribution of capital to any Person, any
loan, advance or extension of credit to any Person or other investment or
acquisition of any interest in any Person.
8
"Issuing Bank" shall mean JPMorgan Chase Bank as issuer of Letters of
Credit in accordance with Section 2.12.
"JPMorgan Chase Bank" shall mean JPMorgan Chase Bank, National
Association, in its individual capacity, and its successors and assigns.
"LaSalle" shall mean LaSalle Bank National Association, in its individual
capacity, and its successors and assigns.
"L/C Outstandings" shall mean, at any time, the sum of (i) the stated
amount available to be drawn under all Letters of Credit outstanding and (ii)
the aggregate amount of all unpaid drawings in respect of all Letters of Credit.
"Leasehold Mortgages" shall mean the leasehold mortgages and deeds of
trust, in form and substance reasonably acceptable to the Administrative Agent,
heretofore or hereafter executed and delivered by the Borrower and its
Subsidiaries in favor of the Administrative Agent for the benefit of the Banks,
as the same may be amended, supplemented or otherwise modified from time to
time.
"Letter of Credit" is defined in Section 2.12.
"LIBOR Base Loan" shall mean, for any Interest Period, a Loan designated
as a LIBOR Base Loan pursuant to Section 2.1(d) or Section 2.3(c).
"LIBOR Rate" shall mean for each Interest Period the rate of interest per
annum as determined by the Administrative Agent (rounded upward, if necessary,
to the nearest whole multiple of one-sixteenth of one percent (1/16th of 1%)) at
which deposits of United States Dollars in immediately available and freely
transferable funds are offered at 11:00 A.M. London time two (2) Business Days
prior to the commencement of such Interest Period to the Administrative Agent or
its agent in the London interbank market for a term comparable to such Interest
Period and in an amount comparable to the principal amount of the LIBOR Base
Loan to be outstanding during such Interest Period.
"Lien" shall mean: (a) any interest in Property (whether real, personal or
mixed and whether tangible or intangible) which secures the payment of
indebtedness or an obligation owed to, or a claim by, a Person other than the
owner of such Property, whether such interest is based on common law, statute or
contract, including, without limitation, any such interest arising from a
mortgage, charge, pledge, security agreement, conditional sale, Capital Lease or
trust receipt, or arising from a lease, consignment or bailment given for
security purposes, and (b) any exception to or defect in the title to or
ownership interest in such Property, including, without limitation,
reservations, rights of entry, possibilities of reverter, encroachments,
easements, rights of way, restrictive covenants, leases and licenses. For
purposes of this Agreement, the Borrower or any Subsidiary shall be deemed to be
the owner of any Property which it has acquired or holds subject to a
conditional sale agreement, Capital Lease or other arrangement pursuant to which
title to the Property has been retained by or vested in some other person for
security purposes.
"Loan" shall mean, individually or collectively, as the case may be, the
Revolving Credit Loans and the Term Loans.
9
"Loan Document" shall mean, individually or collectively, as the case may
be, this Agreement, the Notes, the Subsidiary Guaranty, the Reaffirmation of
Subsidiary Guaranty, the Personal Guaranty, the Environmental Indemnity and each
Security Document, each as originally executed and as amended, modified or
supplemented from time to time.
"Management" shall mean and include (i) all officers of the Borrower and
its Subsidiaries; (ii) all directors or trustees of, or Persons holding similar
positions with, the Borrower or any Subsidiary; and (iii) all stockholders,
members, partners of, or Persons holding similar positions with, the Borrower or
any Subsidiary which are Affiliates of the Borrower or such Subsidiary.
"Material Adverse Occurrence" shall mean any occurrence of whatsoever
nature (including, without limitation, any adverse determination in any
litigation, arbitration or governmental investigation or proceeding) which could
materially adversely affect the business, properties, operations or condition,
financial or otherwise, of the Borrower and its Subsidiaries or could materially
impair the ability of the Borrower or any of its Subsidiaries to perform their
respective obligations under the Loan Documents.
"Maturity Date" shall mean the fifth anniversary of the date of this
Agreement.
"Maximum Restricted Payment Amount" shall mean, as of any date of
determination thereof, (i) with respect to fiscal year 2005, $0, and (ii) with
respect to any fiscal year thereafter, the sum of the Allowable Restricted
Payment Amounts for the current fiscal year and for each of the preceding fiscal
years, commencing with fiscal year 2006, less the aggregate amount of Restricted
Payments made on and after the Effective Date, but immediately prior to and
without giving effect to the proposed Restricted Payment to repurchase capital
stock of the Borrower pursuant to the proviso to Section 6.5 hereof. For
purposes hereof, "Allowable Restricted Payment Amount" for each fiscal year
shall mean $5,000,000.
"Merger" means the merger of Merger Corp. with and into Quality Dining,
Inc., an Indiana corporation, pursuant to the terms of the Merger Agreement.
"Merger Agreement" shall mean that certain Agreement and Plan of Merger
dated as of November 9, 2004, between Merger Corp. and Quality Dining, Inc., and
any amendments or supplements thereto that shall have been consented to in
writing by the Administrative Agent and the Required Banks.
"Merger Corp." means QDI Merger Corp., an Indiana corporation.
"Monthly Payment Date" shall mean the first Business Day of each calendar
month, commencing on the first of such dates to occur after the Effective Date.
"Moody's" shall mean Xxxxx'x Investors Service, Inc., or any successor to
the rating agency business thereof.
"Mortgage Transaction" shall mean (a) one or more transactions in
existence as of the Effective Date (i) pursuant to which (x) the Borrower and/or
a Subsidiary thereof sold for fair consideration all or a portion of the Subject
Assets to a SPE, (y) the Borrower and/or its
10
Subsidiaries leased from such SPE the Subject Assets which were sold to such
SPE, as contemplated by clause (x) above, and (z) none of the Borrower and its
Subsidiaries (other than such SPE) have entered into any Guarantee in respect of
any of the obligations of such SPE and (ii) in respect of which the aggregate
annual rentals and other payments (exclusive of property taxes, property and
liability insurance premiums and maintenance costs) shall not exceed the annual
mortgage payments payable by the SPEs to unaffiliated third parties and (b) any
Replacement Mortgage Transaction.
"Mortgages" shall mean the mortgages and deeds of trust, in form and
substance reasonably acceptable to the Administrative Agent, heretofore or
hereafter executed and delivered by the Borrower and/or any of its Subsidiaries
in favor of the Administrative Agent for the benefit of the Banks, as the same
may be amended, supplemented or otherwise modified from time to time.
"Net Proceeds" shall mean, with respect to any sale of assets, the
proceeds of such sale net of (i) direct out-of-pocket costs and expenses of such
sale, (ii) federal and state income taxes, sales taxes, transfer taxes or
similar taxes imposed on the seller on account of such sale, and (iii) amounts,
if any, required to be paid with respect to Indebtedness secured by any Lien on
such assets which is senior in priority to the Lien of the Administrative Agent,
if any, on such assets.
"Northern" shall mean The Northern Trust Company, in its individual
capacity.
"Note(s)" shall mean, individually or collectively, as the case may be,
(a) the Revolving Credit Notes, (b) the Term Notes, (c) the Swing Line Note and
(d) such other promissory notes accepted by the Banks in exchange for or in
substitution of any such Notes.
"Notice of Borrowing" shall mean notice in the form of Exhibit B attached
hereto to be delivered to the Administrative Agent pursuant to Section 2.1(d).
"Obligations" shall mean (i) all Loans, Swing Line Loans, L/C
Outstandings, debts, liabilities, obligations, covenants and duties owing by the
Borrower or any of the Subsidiary Guarantors to the Administrative Agent, the
Banks or any Bank of any kind or nature, present or future, arising under this
Agreement or any other Loan Document, whether evidenced by any note, guaranty or
other instrument, whether for the payment of money or in kind, whether arising
by reason of any extension of credit, issuing, guaranteeing or confirming of a
letter of credit, guaranty, indemnification or in any other manner, whether
direct or indirect (including those acquired by assignment or purchase),
absolute or contingent, due or to become due, and however acquired and (ii) all
Rate Hedging Obligations owing at any time or from time to time by the Borrower
or any of the Subsidiary Guarantors, or any of them, to the Banks or any Bank.
The term includes, without limitation, all principal, interest, fees, charges,
expenses, reasonable attorneys' fees, and any other sum chargeable to the
Borrower or any of the Subsidiary Guarantors under this Agreement or any other
Loan Document or in connection with any Rate Hedging Obligation.
"Operating Lease" shall mean a lease (excluding Capital Leases) of
Property to which the Borrower or any of its Subsidiaries is a party as lessee
having an unexpired term (including any
11
periods of renewal or extension which may be exercised at the option of the
lessor or lessee) in excess of one year.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Percentage" shall mean, with respect to each Bank, the percentage derived
from dividing (a) the sum of (i) such Bank's Revolving Credit Commitment and
(ii) the principal amount of such Bank's Term Loan outstanding by (b) the sum of
(i) the aggregate Revolving Credit Commitments for all Banks and (ii) the
aggregate principal amount of Term Loans of all Banks outstanding; provided that
after the termination of the Commitments, "Percentage" shall mean, with respect
to each Bank, the percentage derived by dividing the principal amount
outstanding of such Bank's Note(s) by the aggregate principal amount outstanding
of all Notes.
"Permitted Disposition" shall mean (i) any sale by the Borrower or any of
its Subsidiaries of inventory in the ordinary course of its business and on
usual and customary terms, (ii) any sale of a past due receivable for collection
only in the ordinary course of business, (iii) any sale of assets of a
Subsidiary to the Borrower or a Subsidiary Guarantor, (iv) any sale of equipment
no longer used or useful in the business of the Borrower or any Subsidiary and
(v) any sale or lease by the Borrower or any Subsidiary of any other assets
(including without limitation the capital stock of any Subsidiary), provided
that no sale or lease of assets by the Borrower or a Subsidiary described in
clause (v) above shall be a Permitted Disposition unless (A) the Net Proceeds of
such sale or lease are applied within twelve months (x) to prepay Funded Debt of
the Borrower and/or (y) to acquire replacement assets having equal or greater
value and (B) the Borrower complies with the provisions of Section 2.4(c), if
applicable.
"Permitted Investment" shall mean any of the following Investments made by
the Borrower or any of its Subsidiaries in any Person: (i) obligations, with a
maturity of less than two years from the date of acquisition thereof, issued by
or unconditionally guaranteed by the United States of America or an agency or
instrumentality thereof backed by the full faith and credit of the United States
of America; (ii) direct obligations of any state of the United States, any
subdivision or agency thereof or any municipality therein which are rated by S&P
or Moody's in one of the top two rating classifications and maturing within two
years of the date of acquisition thereof; (iii) certificates of deposit or
banker's acceptances, maturing within two years of the date of acquisition
thereof, issued by commercial banks organized under the laws of the United
States or any state thereof, having capital, surplus and undivided profits
aggregating not less than $100 million and whose unsecured long-term debt is
rated in one of the top two rating classifications by S&P or Moody's; (iv)
commercial paper of any corporation organized under the laws of the United
States or any state thereof, rated in one of the top two rating classifications
by S&P or Moody's and with a maturity of less than 270 days from the date of
acquisition thereof; (v) Investments of the Borrower in and to any Wholly-Owned
Subsidiary of the Borrower (other than any SPE) and Investments of any
Wholly-Owned Subsidiary of the Borrower in and to the Borrower or any
Wholly-Owned Subsidiary of the Borrower (other than any SPE), including any
Investments in a corporation which after giving effect thereto will become a
Wholly-Owned Subsidiary; (vi) Investments existing as of the date of this
Agreement, as disclosed on Annex IV; and (vii) Investments in SPEs in an
aggregate amount not to exceed $40,000,000.
12
"Person" shall mean any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, trust or other entity or
organization, whether acting in an individual, fiduciary or other capacity, or
any government or political subdivision thereof or any agency, department or
instrumentality thereof.
"Personal Guaranty" shall mean the Personal Guaranty dated as of the date
of this Agreement, in form and substance reasonably acceptable to the
Administrative Agent, executed by Xxxxxx X. Xxxxxxxxxxx to the Administrative
Agent for the benefit of the Banks.
"Plan" shall mean each employee benefit plan or other class of benefits
covered by Title IV of ERISA, in either case whether now in existence or
hereafter instituted, of the Borrower, any of its Subsidiaries or any ERISA
Affiliate.
"Pledge Agreement" shall mean the Pledge Agreement, dated as of October
31, 1997, entered into by the Borrower and certain of the Borrower's
Subsidiaries in favor of the Administrative Agent for the benefit of the Banks,
as it may be amended, modified, restated or replaced from time to time.
"Pledgor" shall mean each of the Borrower and its Subsidiaries and
Affiliates which is a party to the Pledge Agreement, the Security Agreement or
any other Security Document at any time or from time to time.
"Preferred Stock" shall mean any class of capital stock of a Person with
respect to which mandatory payments are required or with respect to which a
payment (of interest, dividends or return of capital) has a preference or
priority over the making of a similar payment on any other class of capital
stock of such Person.
"Prime Rate" shall mean the rate announced by JPMorgan Chase Bank from
time to time as its prime rate, changing as and when such prime rate changes.
JPMorgan Chase Bank may lend to its customers at rates that are at, above or
below the Prime Rate.
"Principal Requirements" shall mean, for any period for which the amount
thereof is to be determined, all payments of principal made or required to be
made by the Borrower and its Subsidiaries during such period on Indebtedness for
borrowed money, including without limitation any payments of Term Loans pursuant
to Section 2.4(b) hereof, but excluding (i) any other payments of Loans pursuant
to Section 2.4 or of Swing Line Loans pursuant to Section 2.14 and (ii) payments
in respect of Capital Leases.
"Pro Forma Consolidated Cash Flow" shall mean, for any period for which
the amount thereof is to be determined, Consolidated Cash Flow of the Borrower
and its Subsidiaries during such period, plus the Going-Private Supplement, if
applicable; provided that (i) in respect of any Acquisition consummated during
such period, the Consolidated Cash Flow thereof shall be calculated on a pro
forma basis as if such Acquisition had occurred on the first day of such period,
and (ii) in respect of any Property developed during such period, the
Consolidated Cash Flow of such Property shall be an amount equal to the average
Consolidated Cash Flow for such period of all other Properties of the Borrower
and its Subsidiaries of the same brand, similar type and store configuration
which have been open for business for at least one year. The "Going-Private
Supplement" shall be (a) $125,000 for each of the four fiscal quarters of the
Borrower
13
most recently completed immediately prior to the Effective Date, plus (b) for
the fiscal quarter in which the Effective Date occurs and for each of the three
fiscal quarters of the Borrower most recently completed prior to the Effective
Date, the non-recurring expenses incurred by the Borrower during such quarter in
connection with the implementation of the Merger to the extent deducted in
determining Consolidated Net Income for such quarter, provided that the
aggregate amount of such expenses to be included in the Going Private Supplement
described in this clause (b) shall not exceed $3,000,000.
"Property" shall mean any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"Quarterly Payment Date" shall mean the first Business Day of each
January, April, July and October, commencing July 1, 2005.
"Rate Hedging Obligations" shall mean any and all obligations of such
Person, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates applicable to such
party's assets or liabilities, including but not limited to interest rate swaps,
basis swaps, interest rate floors, interest rate collars, interest rate caps,
forward rate agreements or other similar rate protection transactions, or any
combination of or option with respect to any of the foregoing, and (ii) any and
all cancellations, buy backs, reversals, terminations or assignments of any of
the foregoing.
"Real Property" shall mean all real property or interests therein wherever
situated now, heretofore or hereafter owned, leased or utilized by the Borrower
or any of its Subsidiaries.
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof establishing margin requirements.
"Regulation U" shall mean Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof establishing margin requirements.
"Regulatory Change" shall mean any change after the date hereof in any (or
the adoption after the date hereof of any new):
(a) Federal or state law or foreign law applying to a class of
financial institutions (including the Administrative Agent or one or more
of the Banks); or
(b) regulation, interpretation, directive or request (whether or not
having the force of law) applying to a class of financial institutions
(including the Administrative Agent or one or more of the Banks) of any
court or governmental authority charged with the interpretation or
administration of any law referred to in clause (a) of this definition or
of any fiscal, monetary or other authority having jurisdiction over the
Administrative Agent or any Bank.
14
"Replacement Mortgage Transaction" shall mean any transaction entered into
on an arm's length basis by an SPE after the date of this Agreement pursuant to
which (a) such SPE refinances a Mortgage Transaction by paying off in full all
indebtedness and other liabilities and obligations arising under or in
connection with such Mortgage Transaction and the refinancing thereof; (b) the
property subject to the mortgage, deed of trust or similar instrument securing
such transaction includes only the Subject Assets which were subject to the
Mortgage Transaction being refinanced; (c) any proceeds received by such SPE in
excess of the principal amount of the indebtedness secured by the Mortgage
Transaction being refinanced shall be applied to repay Term Loans as provided in
Section 2.4(c)(iii) hereof; (d) none of the Borrower and its Subsidiaries (other
than such SPE) have entered into any Guarantee in respect of any of the
obligations of such SPE; (e) the aggregate annual rentals and other payments
(exclusive of property taxes, property and liability insurance premiums and
maintenance costs) payable by the Borrower and its Subsidiaries (other than such
SPE) to such SPE shall not exceed the lesser of (x) the annual mortgage payments
payable by such SPE under the Mortgage Transaction being refinanced and (y) the
annual mortgage payments payable by such SPE under such transaction; and (f)
such transaction, and any and all lenders, collateral agents, trustees and other
persons with an interest in the Subject Assets subject to the mortgage, deed of
trust or similar instrument entered into in connection with such transaction,
shall be subject to an intercreditor agreement with the Administrative Agent
and/or the Banks on terms substantially similar to the terms of the
Intercreditor Agreement and otherwise in form and substance reasonably
satisfactory to the Administrative Agent.
"Required Banks" shall mean Banks (excluding Banks whose failure to fund
an advance have not been cured) whose Percentage, in the aggregate, equals or
exceeds 51%.
"Reserve Requirement" shall mean, for any Interest Period for any LIBOR
Base Loan, the sum (expressed as a decimal) of (a) the average maximum rate at
which reserves (including any marginal, supplemental or emergency reserves) are
required to be maintained during such Interest Period under Regulation D by
member banks of the Federal Reserve System against "Eurocurrency liabilities"
and (b) any other reserves required to be maintained by such member banks by
reason of any Regulatory Change against (i) any category of liabilities which
includes deposits by reference to which the LIBOR Rate is to be determined or
(ii) any category of extensions of credit or other assets which includes a LIBOR
Base Loan.
"Restricted Payments Basket" as of any date shall mean, for the period
commencing on the Effective Date through such date of determination, (a) the sum
of (i) $5,000,000 and (ii) the Consolidated Cash Flow of the Borrower and its
Subsidiaries for such period, less (b) the sum of (i) the aggregate amount of
Capital Expenditures during such period, (ii) the aggregate Principal
Requirements during such period, (iii) the aggregate Capital Lease Obligations
during such period, (iv) the aggregate Interest Expense during such period, and
(v) the aggregate amount of taxes (federal, state and local) paid or payable by
the Borrower and its Subsidiaries during such period.
"Revolving Credit Commitment" shall mean for each Bank the amount
appearing opposite such Bank's name under the heading "Revolving Credit
Commitments" in Schedule I, as such amount may be reduced pursuant to Section
2.1(b) or temporarily adjusted pursuant to
15
Section 2.1(d), and as said Schedule I may be amended from time to time pursuant
to Section 10.10.
"Revolving Credit Loan" shall have the meaning assigned thereto in Section
2.1(a).
"Revolving Credit Note" shall mean each of the promissory notes,
substantially in the form of Exhibit A attached hereto, made by the Borrower
payable to the order of each of the Banks to evidence the Revolving Credit Loans
made by such Bank.
"Revolving Credit Percentage" shall mean, with respect to each Bank, the
percentage derived by dividing such Bank's Revolving Credit Commitment by the
sum of the Revolving Credit Commitments for all Banks.
"Security Agreement" shall mean the Pledge and Security Agreement dated as
of September 11, 1998, entered into by the Borrower and certain of its
Subsidiaries in favor of the Administrative Agent for the benefit of the Banks,
as it may be amended, modified, restated or replaced from time to time.
"Security Document" shall mean the Pledge Agreement, the Security
Agreement, the Collateral Assignment of Franchise Agreements, the Collateral
Assignments of Leases, the Mortgages, the Leasehold Mortgages and each other
mortgage, assignment, pledge or security agreement or other document executed
from time to time by any person in favor of the Administrative Agent for the
benefit of the Banks, to secure all or any portion of the Obligations, as said
agreements or documents may be amended, modified, restated or replaced from time
to time.
"Shareholders Agreement" shall mean the Amended and Restated Shareholders
Agreement dated as of February 3, 2005 among QDI Merger Corp. and each of the
shareholders named in the signature pages thereto, as such Shareholders
Agreement may be amended or modified from time to time.
"SPE" shall mean one or more Delaware corporations, each of which was
established on or prior to the date of this Agreement as a single purpose entity
for the purpose of engaging in a Mortgage Transaction, and its successors and
assigns, and any surviving, resulting or transferee corporation; provided that
for purposes of this Agreement, such entity shall be deemed an SPE only for so
long as such entity remains a single purpose entity engaged solely in a Mortgage
Transaction.
"S&P" shall mean Standard & Poor's Ratings Services, a division of the
McGraw Hill Companies, Inc., or any successor to the rating agency business
thereof.
"Subject Assets" shall mean the fee interests and/or leasehold interests
in the parcels of real property identified in Annex V hereto and the equipment
(including fixtures) located on such parcels of real property.
"Subsidiary" of any Person shall mean (i) any corporation of which more
than 50% of the outstanding shares of capital stock of any class or classes
having ordinary voting power for the election of directors (irrespective of
whether or not at the time stock of any class or classes of
16
such corporation shall have or might have voting power by reason of the
happening of any contingency) is now or hereafter owned directly or indirectly
by such Person, by such Person and one or more of its Subsidiaries, or by one or
more of such Person's other Subsidiaries, and (ii) any partnership, association,
limited liability company, joint venture or other entity in which such Person,
such Person and one or more of its Subsidiaries, or one or more of its
Subsidiaries, is either a general partner or has an equity interest of more than
50% at the time. Unless otherwise qualified, all references to a "Subsidiary" or
to "Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries
of the Borrower.
"Subsidiary Guaranty" shall mean the Subsidiary Guaranty dated December
21, 1995 entered into by each of the Subsidiary Guarantors, in favor of
Northern, as agent for the benefit of the Banks, as reaffirmed as of the
Effective Date by each such Subsidiary Guarantor in favor of the Administrative
Agent hereunder for the benefit of the Banks.
"Subsidiary Guarantor" shall mean each of Bravokilo, Inc., Southwest
Dining, Inc., Full Service Dining, Inc., Grayling Corporation, Xxxxx'x American
Grill Restaurant Corporation, Bravogrand, Inc. and QDI Management, LLC and each
other Person which shall be or shall hereafter become a Wholly-Owned Subsidiary
of the Borrower and shall become a party to the Subsidiary Guaranty.
Notwithstanding the foregoing, for so long as any Indebtedness described under
the caption "Indebtedness of SPE's" on Annex III remains outstanding, each of
the SPEs shall for all purposes of this Agreement be deemed not to be a
"Subsidiary Guarantor".
"Swing Line" shall mean the credit facility for making Swing Loans
described in Section 2.14 hereof.
"Swing Line Commitment" shall mean the commitment of LaSalle to make Swing
Loans in the aggregate amount of $3,000,000 at any one time outstanding.
"Swing Loan" is defined in Section 2.14(a) hereof.
"Swing Line Note" is defined in Section 2.14(e) hereof.
"Term Loan" shall have the meaning assigned thereto in Section 2.2.
"Term Loan Commitment" shall mean for each Bank the amount appearing
opposite such Bank's name under the heading "Term Loan Commitments" in Schedule
I, as said Schedule I may be amended from time to time on or at any time prior
to the Effective Date.
"Term Loan Note" shall mean each of the promissory notes, substantially in
the form of Exhibit B attached hereto, made by the Borrower payable to the order
of each of the Banks to evidence the Term Loans made by such Bank.
"Type" shall mean, with respect to any Loan, its nature as a Base Rate
Loan or a LIBOR Base Loan.
"Unfunded Obligations" shall mean at any time the obligations of the
Borrower to the Issuing Bank in respect of undrawn amounts of Letters of Credit.
Each Unfunded Obligation will be deemed to be in an amount equal to the undrawn
amount of the relevant Letter of Credit.
17
"Unused Portion" shall mean, as of any date, the excess of the aggregate
Revolving Credit Commitments on such date over the sum of the aggregate
outstanding principal amount of the Revolving Credit Loans and the aggregate
stated amount of the outstanding Letters of Credit on such date.
"Voting Stock" shall mean stock or similar interests of any class or
classes (however designated), the holders of which are generally and ordinarily,
in the absence of contingencies, entitled to vote for the election of the
directors (or Persons performing similar functions) of a corporation or other
business entity.
"Wholly-Owned Subsidiary" shall mean a Subsidiary in which all voting
shares (except for directors' qualifying shares, if any) are owned by the
Borrower and/or one or more Wholly Owned Subsidiaries of the Borrower.
Other terms defined herein shall have the meanings ascribed to them
herein.
ARTICLE II.
THE LOANS
2.1 Revolving Credit Loans.
(a) Revolving Credit Commitments. Each Bank severally agrees, subject to
the terms and conditions hereinafter set forth, to make a revolving credit loan
(each a "Revolving Credit Loan") to the Borrower from time to time on any
Business Day during the period from the date hereof and ending on the Commitment
Termination Date; provided, however, that no Bank shall be required to make any
Revolving Credit Loan if, after giving effect thereto, the sum of the aggregate
outstanding principal amount of all Revolving Credit Loans made by such Bank,
plus the Bank's Revolving Credit Percentage of L/C Outstandings would exceed
such Bank's Revolving Credit Commitment. Each borrowing under this Section
2.1(a) (a "Borrowing") shall consist of Revolving Credit Loans made on the same
day by the Banks ratably in accordance with their respective Revolving Credit
Commitments. Within the limits set forth above, the Borrower may borrow, prepay
and reborrow pursuant to this Section 2.1(a). Each Borrowing under this Section
2.1(a) shall be in a minimum amount of $500,000.
(b) Reduction of Revolving Credit Commitments.
(A) The Borrower, at any time on at least three (3) Business Days'
prior written notice to the Administrative Agent (which shall promptly
notify each Bank), may reduce the Revolving Credit Commitments pro rata
among the Banks permanently in a minimum aggregate amount of $100,000;
provided, however, that the Borrower may not reduce the Revolving Credit
Commitments below an amount equal to the sum of the principal amount then
outstanding of the Revolving Credit Loans plus the aggregate amount of the
L/C Outstandings.
(B) The aggregate Revolving Credit Commitments of the Banks shall be
automatically and permanently reduced pursuant to Section 2.4(c)(i)
hereof.
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(c) Termination. The obligation of the Banks to make Revolving Credit
Loans, of LaSalle to make Swing Loans and of the Issuing Bank to issue Letters
of Credit shall terminate:
(A) Upon written notice by the Borrower to the Administrative Agent
(which shall promptly notify each Bank) at any time when no amount is
outstanding on the Notes, no Letters of Credit are outstanding hereunder
and all drawings under Letters of Credit have been reimbursed in
accordance with Section 2.12(c) hereof;
(B) Immediately and without further action upon the occurrence of an
Event of Default described in clauses (f) and (g) of Section 7.1; or
(C) Immediately when any Event of Default (other than of the nature
specified in clauses (f) and (g) of Section 7.1) shall have occurred and
be continuing and either: (A) the Required Banks shall have demanded
payment of the Notes or (B) the Required Banks shall so elect by giving
written notice to the Borrower for purposes of this clause.
(d) Manner of Borrowing. The Borrower may request Revolving Credit Loans
upon the delivery to the Administrative Agent of an Effective Date Borrowing
Notice, as provided in Section 2.2(a) hereof. In addition, the Borrower may
request Revolving Credit Loans by delivering to the Administrative Agent a
written Notice of Borrowing (which may be transmitted by telecopier) or by oral
notice to the Administrative Agent confirmed by a written Notice of Borrowing
(which may be transmitted by telecopier), indicating thereon the aggregate
amount of the Revolving Credit Loans requested, by not later than 10:00 a.m.
(Houston, Texas time) on the Business Day preceding the Business Day on which a
borrowing is to be made; provided, however, if such borrowing is to be made as a
LIBOR Base Loan, the Borrower shall give such Notice of Borrowing to the
Administrative Agent by not later than 10:00 a.m. (Houston, Texas time) on the
third Business Day preceding the Business Day on which the borrowing is to be
made. Any such Notice of Borrowing given by the Borrower shall be irrevocable.
Upon receipt of such Notice of Borrowing, the Administrative Agent shall
promptly notify each Bank thereof. By not later than 2:00 p.m. (Houston, Texas
time) on the requested Business Day of a Borrowing, each Bank shall make
available to the Administrative Agent, at its address referred to in Section
10.3, in immediately available funds, the amount of such Bank's Revolving Credit
Loan. After (and subject to) the Administrative Agent's receipt of such funds
and upon satisfaction of the applicable conditions set forth in Article III, the
Administrative Agent shall make such Revolving Credit Loans available to the
Borrower by transferring the amount thereof in immediately available funds for
credit to an account (other than a payroll account) maintained by the Borrower
at the Administrative Agent, or otherwise as directed by the Borrower. If the
Administrative Agent shall receive less than all the amounts payable by the
Banks in accordance with this Section 2.1, the Administrative Agent shall make
available to the Borrower such amount as it shall actually have received. Unless
the Administrative Agent shall have been notified by any Bank prior to the date
of a Borrowing that such Bank does not intend to make available to the Bank its
Revolving Credit Loan, the Administrative Agent may assume that each Bank has
made such amount available to the Administrative Agent on the date of such
Borrowing and the Administrative Agent may, in reliance upon such assumption,
make available to the Borrower a corresponding amount. If and to the extent any
Bank shall not have made available its Revolving Credit Loan to the
Administrative Agent on the date of any Borrowing, the Administrative Agent
shall notify such Bank and JPMorgan Chase Bank of such Bank's
19
failure and, if such Bank fails to make its Revolving Credit Loan, JPMorgan
Chase Bank may in its sole discretion make an advance (the "Over-Advance") to
repay the Administrative Agent forthwith on demand a corresponding amount and
the Bank which failed to make its Revolving Credit Loan agrees to repay JPMorgan
Chase Bank forthwith on demand a 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 JPMorgan Chase Bank at the
interest rate applicable during such period to the Revolving Credit Loans and
the principal amount repaid by such Bank shall constitute such Bank's Revolving
Credit Loan for purposes of this Agreement. In the event any Bank fails to make
available its Revolving Credit Loan to the Administrative Agent on the date of
any Borrowing and JPMorgan Chase Bank elects not to make an Over-Advance, each
of such Bank and the Borrower agrees to repay to the Administrative Agent
forthwith upon demand such corresponding amount together with interest thereon
for each day from the date such amount is made available by the Administrative
Agent to the date such amount is repaid to the Administrative Agent at the rate
applicable to such Revolving Credit Loan. If JPMorgan Chase Bank makes any
Over-Advance, JPMorgan Chase Bank's and such other Bank's relevant Revolving
Credit Commitments shall be temporarily increased and decreased, respectively,
by the amount of the Over-Advance and any payments allocable to such other Bank
shall be paid to JPMorgan Chase Bank until the principal of and interest on the
Over-Advance shall be paid in full. The failure of any Bank to make any
Revolving Credit Loan to be made by it shall not relieve any other Bank of its
obligation, if any, hereunder to make its Revolving Credit Loan on the date of
such Borrowing. No Bank shall be responsible for the failure of any other Bank
to make a Revolving Credit Loan to be made by such Bank on the date of any such
Borrowing. The Administrative Agent shall promptly give the Borrower notice of
any Bank's failure to make its Revolving Credit Loan. Each request for Revolving
Credit Loans shall be deemed a representation and warranty by the Borrower,
binding upon the Borrower, that all conditions precedent to such Revolving
Credit Loan under Article III are satisfied as of the date of such request and
as of the date of such Borrowing.
(e) Evidence of Indebtedness. The Revolving Credit Loans (other than any
Over-Advance) made by a Bank shall be evidenced by a Revolving Credit Note made
by the Borrower payable to the order of such Bank in a principal amount equal to
the Revolving Credit Commitment of such Bank; subject, however, to the
provisions of such Revolving Credit Note to the effect that the principal amount
payable thereunder at any time shall not exceed the then unpaid principal amount
of the Revolving Credit Loans made by such Bank. The Borrower hereby irrevocably
authorizes each Bank to make or cause to be made, at or about the time of each
Revolving Credit Loan made by such Bank, an appropriate notation on the records
of such Bank, reflecting the principal amount of such Revolving Credit Loan, and
such Bank shall make or cause to be made, on or about the time of receipt of
payment of any principal of any Revolving Credit Loan, an appropriate notation
on its records reflecting such payment. Failure to make any such notation shall
not affect the Borrower's obligations in respect of such Revolving Credit Loan.
The aggregate amount of all Revolving Credit Loans set forth on the records of
such Bank shall be rebuttable presumptive evidence of the principal amount owing
and unpaid on such Bank's Revolving Credit Loans. The aggregate amount of all
Over-Advances set forth on the records of JPMorgan Chase Bank shall be
rebuttable presumptive evidence of the principal amount owing and unpaid on the
Over-Advances. Upon request of the Borrower, each Bank agrees to provide the
Borrower with a written summary of the records maintained by it under this
Section 2.1(e).
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2.2 Term Loans.
(a) Term Loan Commitment. On or no later than the second Business Day
following the Effective Date, the Borrower shall give written notice to the
Administrative Agent (which may be transmitted by telecopier), substantially in
the form of Exhibit D hereto, (the "Effective Date Borrowing Notice") stating
that the conditions precedent set forth in Article III of this Agreement have
been satisfied and requesting Revolving Credit Loans and/or Term Loans, by
specifying the principal amount of the Revolving Credit Loans and Term Loans to
be outstanding under the Agreement immediately following such borrowings. Upon
receipt of the Effective Date Borrowing Notice, the Administrative Agent shall
promptly notify each Bank thereof. Each of the Banks shall make (i) a Revolving
Credit Loan to the Borrower in a principal amount equal to the lesser of such
Bank's Revolving Credit Commitment and such Bank's Revolving Credit Percentage
of the principal amount of Revolving Credit Loans specified in the Effective
Date Borrowing Notice and (ii) a loan (a "Term Loan") to the Borrower in a
principal amount equal to the lesser of such Bank's Term Loan Commitment and
such Bank's Percentage of the principal amount of Term Loans specified in the
Effective Date Borrowing Notice; provided that to the extent that a Bank has
outstanding "Revolving Credit Loans", as defined in the Existing Credit
Agreement, the principal amount of the Loans to be funded by each Bank pursuant
to the Effective Date Borrowing Notice shall be correspondingly reduced. If the
Effective Date Borrowing Notice is given prior to 12:00 noon (Houston, Texas
time) on any Business Day, each Bank shall fund its obligation in respect of the
Loans requested therein on such Business Day; provided that if the Effective
Date Borrowing Notice is given after 12:00 noon (Houston, Texas time) on any
Business Day, each Bank shall fund its obligation in respect of the Loans
requested therein on the next succeeding Business Day. By not later than 2:00
p.m. (Houston, Texas time) on the borrowing date, each Bank shall make available
to the Administrative Agent, at its address referred to in Section 10.3, in
immediately available funds, the amount of the Loans to be funded by such Bank.
After (and subject to) the Administrative Agent's receipt of such funds and upon
satisfaction of the applicable conditions set forth in Article III, the
Administrative Agent shall make such Loans available to the Borrower by
transferring the amount thereof in immediately available funds for credit to an
account (other than a payroll account) maintained by the Borrower at the
Administrative Agent, or otherwise as directed by the Borrower. The Effective
Date Borrowing Notice shall be irrevocable. The Term Loan Commitment of the
Banks to make Term Loans to the Borrower shall terminate upon the earlier to
occur of (i) the making of the Term Loan on the date provided for in the
Effective Date Borrowing Notice and (ii) the close of business on the sixth
Business Day following the Effective Date. No amounts repaid or prepaid on any
Term Loan may be reborrowed. The Term Loans shall initially be made as Base Rate
Loans. Thereafter, as provided in Section 2.3(c), the Borrower may elect that
the Term Loans be outstanding as Base Rate Loans or LIBOR Base Loans.
(b) Evidence of Indebtedness. The Term Loan made to the Borrower by each
Bank shall be evidenced by a single promissory note of the Borrower issued to
such Lender in the form of Exhibit C hereto.
21
2.3 Interest on Loans.
(a) Interest . The Borrower agrees to pay interest on the aggregate
outstanding principal amount of the Loans as follows:
(A) with respect to any Loan constituting a Base Rate Loan, at a
fluctuating rate per annum equal to the sum of the Base Rate and the
Applicable Base Rate Margin (as determined in accordance with Section
2.3(b)); and
(B) with respect to any Loan constituting a LIBOR Base Loan, at a
rate per annum equal at all times during the Interest Period relating to
such LIBOR Base Loan to the sum of the Adjusted LIBOR Rate, plus the
Applicable LIBOR Margin (as determined in accordance with Section 2.3(b)).
The Borrower agrees to pay interest on any overdue installment of principal of
or interest on any Loan from the due date thereof until paid, (i) in the case of
any Base Rate Loan, at a rate per annum at all times equal to the sum of the
rate in effect thereon plus 1.50% per annum and (ii) in the case of any LIBOR
Base Loan, at a rate per annum equal to the sum of 1.50% plus the rate of
interest in effect thereon at the time of such default until the end of the
Interest Period then applicable thereto and thereafter at a rate per annum equal
to the sum of 1.50% per annum, plus the Base Rate, plus the Applicable Base Rate
Margin from time to time in effect.
Interest accrued on each Loan shall be payable (A) with respect to each
Base Rate Loan, on each Monthly Payment Date; and (B) with respect to each LIBOR
Base Loan, on the last day of each Interest Period applicable thereto and in the
case of any Interest Period in excess of three (3) months, on each date
occurring at three (3) month intervals after the first day of such Interest
Period. Interest accrued after the Termination Date shall be payable upon
demand. No provision of this Agreement or the Notes shall require the payment or
permit the collection of interest in excess of the rate permitted by applicable
law. Interest shall be calculated for actual days elapsed on the basis of a
360-day year.
(b) Determination of Applicable Margin. The Applicable Base Rate Margin
and the Applicable LIBOR Margin (collectively, the "Applicable Margin") in
respect of any Base Rate Loan or LIBOR Base Loan, as applicable, shall be
determined by reference to the table set forth below on the basis of the Type of
Loan and the Indebtedness Ratio determined by reference to the most recent
financial statements delivered pursuant to Section 5.1(a) or 5.1(b).
Applicable Applicable Base
Indebtedness Ratio LIBOR Margin Rate Margin
------------------ ------------ ---------------
Greater than or equal to 4.25:1.00 3.75% 2.00%
Less than 4.25:1.00 but greater than or 3.50% 1.75%
equal to 4.00:1.00
Less than 4.00:1.00 but greater than or 3.25% 1.50%
equal to 3.75:1.00
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Applicable Applicable Base
Indebtedness Ratio LIBOR Margin Rate Margin
------------------ ------------ ---------------
Less than 3.75:1.00 but greater than or 3.00% 1.25%
equal to 3.50:1.00
Less than 3.50:1.00 but greater than or 2.75% 1.00%
equal to 3.00:1.00
Less than 3.00:1.00 but greater than or 2.25% 0.50%
equal to 2.50:1.00
Less than 2.50:1.00 but greater than or 2.00% 0.25%
equal to 2.00:1.00
Less than 2.00:1.00 1.75% 0.00%
Upon receipt of the financial statements delivered pursuant to Section 5.1(a) or
Section 5.1(b), as applicable, the Applicable Margin shall be adjusted, such
adjustment being effective on the tenth Business Day after receipt of such
financial statements and the Compliance Certificate to be delivered in
connection therewith; provided, however, if the Borrower shall not have timely
delivered such financial statements in accordance with Section 5.1(a) or Section
5.1(b), as applicable, beginning with the date upon which such financial
statements should have been delivered and continuing until such financial
statements are delivered, the Applicable Margin shall equal the Applicable
Margin for the prior period; provided further, however, that if upon delivery of
such financial statements the Applicable Margin is adjusted upwards, the
adjustment of the Applicable Margin shall be retroactive to the date upon which
such financial statements should have been delivered.
(c) Election by Borrower. The Borrower may elect in accordance with this
Section 2.3(c) to obtain and maintain all or any portion of the Loans as a Base
Rate Loan or all or any portion of the Loans which is in an integral multiple of
$500,000 as a LIBOR Base Loan. In addition, the Borrower may elect in accordance
with this Section 2.3(c) to convert all or any portion of the Loans from one
Type of Loan to another Type of Loan; provided however, that (a) any conversion
to a LIBOR Base Loan shall be only in an integral multiple of $500,000, (b) any
conversion of any LIBOR Base Loan into a Base Rate Loan shall be made on, and
only on, the last day of the Interest Period then applicable thereto and (c) no
Loan may be obtained, continued as, or converted into, a LIBOR Base Loan when
any Default or Event of Default has occurred and is continuing. Subject to the
provisions of the prior sentence, the Borrower may convert a LIBOR Base Loan
into a Base Rate Loan upon one Business Day's prior written notice to the
Administrative Agent of the Borrower's election to do so. The Borrower, not less
than three (3) Business Days prior to the date on which (i) a LIBOR Base Loan is
to be obtained, (ii) a Base Rate Loan is to be converted into a LIBOR Base Loan
or (iii) any LIBOR Base Loan is to be continued as a LIBOR Base Loan at the end
of the Interest Period then applicable thereto, shall give written notice to the
Administrative Agent of the Borrower's election to do so; said notice shall
specify the amount of such LIBOR Base Loan and the first day and duration of the
Interest Period pertaining thereto. If, upon the expiration of any Interest
Period, the Borrower
23
shall fail to elect the duration of a new Interest Period for any LIBOR Base
Loan or to designate a Base Rate Loan in accordance with this Section 2.3(c),
the Borrower shall be deemed to have elected automatically to convert such LIBOR
Base Loan into a Base Rate Loan on the last day of the Interest Period then
applicable thereto. On the date on which the aggregate unpaid principal amount
of any LIBOR Base Loan shall be reduced, by payment or prepayments or otherwise,
to less than an integral multiple of $500,000, such LIBOR Base Loan shall
automatically convert into a Base Rate Loan at the end of the Interest Period
then applicable thereto. The Borrower hereby irrevocably authorizes each Bank to
make, or cause to be made, an appropriate notation on the records of such Bank,
reflecting the date and original principal amount of each Loan made by such
Bank, the dates for each period when such Loan is being maintained as a Base
Rate Loan or a LIBOR Base Loan, the interest rate for each such period and the
dates of principal and interest payments on such Loan. Failure to make any such
notation shall not affect the Borrower's obligations in respect of such Loans.
Each Bank's records shall be rebuttable presumptive evidence of the matters
stated therein. Upon request by the Borrower, each Bank agrees to provide the
Borrower with a written summary of the records maintained by it under this
Section 2.3(c).
2.4 Repayment of Loans.
(a) Voluntary Prepayment. The Borrower shall have the right, by giving
written notice to the Administrative Agent by not later than 11:00 a.m.
(Houston, Texas time) on the second Business Day preceding the date of such
prepayment, to prepay all or any portion of the Loans, without premium or
penalty; provided, that any Base Rate Loan may be prepaid in whole or in part at
any time and any LIBOR Base Loan may be prepaid in whole or in part on the last
day of the Interest Period applicable thereto; provided further, that each
partial prepayment shall be in an aggregate principal amount of not less than
$100,000 and shall be accompanied by accrued interest to the date of prepayment
on the amount prepaid.
(b) Amortization of Term Loan. On July 1, 2005 and on each Quarterly
Payment Date thereafter, to but not including the Maturity Date, the Borrower
shall repay $1,500,000 of the principal amount (or such lesser amount as shall
then be outstanding) of the Term Notes, without penalty or premium (but subject
to Section 2.6), provided that upon any partial prepayment of the Term Notes
pursuant to Section 2.4(a) or Section 2.4(c)(iii), the principal amount of such
required payment of the Term Notes due under this Section 2.4(b) on and after
the date of such prepayment shall be reduced in the same proportion as the
aggregate unpaid principal amount of the Term Notes is reduced as a result of
such prepayment. On the Maturity Date, the Borrower shall pay the remaining
outstanding principal amount of the Term Notes.
(c) Mandatory Prepayments.
(i) Concurrently with the consummation of a sale, in a transaction
or a series of related transactions, of all or a portion of the assets of the
Borrower and its Subsidiaries (including without limitation the capital stock of
any Subsidiary of the Borrower but excluding the assets sold in any Permitted
Disposition described in clauses (i), (ii), (iii) and (iv) of the definition of
Permitted Disposition) the aggregate Net Proceeds of which exceed $10,000,000
(the "Excess Proceeds"), the Borrower shall (i) prepay the Loans in a principal
amount equal to the Net Proceeds of such sale and (ii) permanently and
automatically reduce the Revolving
24
Credit Commitments of the Banks in an amount equal to the lesser of the then
existing Revolving Credit Commitments and the Excess Proceeds.
(ii) At any time that the sum of the aggregate outstanding principal
balance of the Revolving Credit Loans and the aggregate stated amount of L/C
Outstandings exceeds the aggregate Revolving Credit Commitments, the Borrower
shall immediately prepay the outstanding principal amount of the Revolving
Credit Loans in an amount equal to such excess.
(iii) Within three Business Days of the refinancing of any Mortgage
Transaction with a Replacement Mortgage Transaction, the Borrower shall prepay
the Term Loans in an aggregate principal amount equal to the lesser of (x) the
Excess Proceeds in respect of such Replacement Mortgage Transaction and (y) the
aggregate outstanding principal amount of the Term Loans.
(d) Application of Prepayments. Unless specified by the Borrower to the
contrary at or prior to the time of any prepayment pursuant to Section 2.4(a) or
Section 2.4(c)(i), any prepayment shall be applied to the prepayment of
Revolving Credit Loans until all Revolving Credit Loans have been prepaid in
full, and then to the prepayment of Term Loans, and in respect of the prepayment
of Revolving Credit Loans or Term Loans, shall be applied first to the
prepayment of Base Rate Loans. No voluntary prepayment of any LIBOR Base Loan
prior to the last day of the Interest Period applicable thereto shall be made.
Upon any other repayment or prepayment of any LIBOR Base Loan prior to the last
day of the Interest Period applicable thereto, the Borrower shall pay any
amounts owing pursuant to Section 2.6.
2.5 Increased Costs; Capital Adequacy.
(a) Increased Costs. If (i) as a result of any Regulatory Change (A) any
reserve (other than the amount of such reserve as has been included in the
computation of the Adjusted LIBOR Rate), special deposit or similar requirements
relating to any extension of credit or other assets of or any deposits with or
other liabilities of, any Bank which affects the making or maintaining by such
Bank of any loans (including the Loans and Swing Loans) or letters of credit
(including the Letters of Credit) are imposed, modified or deemed applicable; or
(B) any other condition affecting this Agreement or the making or maintaining by
any Bank of any loans (including the Loans and Swing Loans) or letters of credit
(including the Letters of Credit) is imposed on such Bank; or (ii) other
circumstances arise affecting any Bank or the position of any Bank in the
relevant market, and such Bank reasonably determines that, by reason thereof,
the cost to such Bank of making or maintaining any loans (including the Loans
and Swing Loans) or letters of credit (including the Letters of Credit) is
increased as a result of such change in circumstances, or any amount receivable
hereunder in respect of any Loan, Swing Loan or Letter of Credit is reduced (and
such Bank shall not have been compensated for such increase or reduction by an
increase in interest or otherwise by Regulatory Change), then such Bank shall
promptly notify the Borrower in writing and the Borrower shall pay upon request
such additional amount or amounts (which shall be specified in such request) as
will (in the reasonable determination of such Bank) compensate such Bank for
such additional cost or reduction; provided, however, that the Borrower's
liability for additional amounts computed in accordance with this Section 2.5(a)
shall be neither changed nor waived by any failure to give such notice.
25
(b) Capital Adequacy. If any Regulatory Change imposes, modifies or deems
applicable any capital adequacy, capital maintenance or similar requirement
(including a request or requirement which affects the manner in which any Bank
allocates capital resources to its commitments, including a Commitment
hereunder) and as a result thereof, the rate of return on any Bank's capital as
a consequence of a Commitment hereunder or the making or maintaining of any
Loans, Swing Loans or Letters of Credit hereunder is reduced to a level below
that which such Bank could reasonably have achieved but for such circumstances,
then and in each such case upon notice from time to time by a Bank to the
Borrower, the Borrower shall pay to such Bank such additional amount or amounts
as shall compensate such Bank for such reduction in rate of return; provided,
however, that the Borrower's liability for additional amounts computed in
accordance with this Section 2.5(b) shall be neither changed nor waived by any
failure to give such notice.
(c) Taxes. If any Regulatory Change shall subject any Bank or any Loan,
Swing Loan or Letter of Credit to any tax (including, without limitation, any
United States interest equalization tax or similar tax however named applicable
to the acquisition or holding of debt obligations and any interest or penalties
with respect thereto), duty, charge, stamp tax, fee, deduction or withholding in
respect of this Agreement or any Loan, Swing Loan or Letter of Credit, except
such taxes as may be measured by the overall net income of such Bank and imposed
by the jurisdiction, or any political subdivision or taxing authority thereof,
in which such Bank's principal executive office or its lending branch is located
and such Bank in good faith determines that the result thereof is to increase
the cost (whether by incurring a cost or adding to a cost) to such Bank of
making or maintaining any Loan, Swing Loan or Letter of Credit hereunder or to
reduce the amount of principal or interest received by such Bank (without
benefit of, or credit for, any prorations, exemptions, credits or other offsets
available under any such laws, treaties, regulations, guidelines or
interpretations thereof), then such Bank shall promptly notify in writing the
Borrower and the Borrower shall pay, upon request, such additional amount or
amounts as will (in the reasonable determination of such Bank) compensate such
Bank for such additional cost or reduction; provided, however, that the
Borrower's liability for additional amounts computed in accordance with this
Section 2.5(c) shall be neither changed nor waived by any failure to give such
notice.
(d) Applicable Tax Forms. On or prior to the Effective Date in the case of
each Bank which is a party hereto as of the Effective Date, and on the date of
the delivery to the Administrative Agent of the Assignment Agreement pursuant to
which it became a Bank in the case of each other Bank, each Bank organized under
the laws of a jurisdiction outside the United States shall provide the
Administrative Agent and the Borrower with the forms prescribed by the Internal
Revenue Service of the United States certifying that such Bank is exempt from
United States withholding taxes with respect to all payments to be made to such
Bank hereunder and under the Notes. Each Bank which so delivers such a form
further undertakes to deliver to each of the Borrower and the Administrative
Agent additional copies of such form (or a successor form) on or before the date
that such form expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent forms so delivered by it, and such
amendments thereto or extensions or renewals thereof as may be reasonably
requested by the Borrower or the Administrative Agent, in each case certifying
that such Bank is entitled to receive payments under this Agreement and the
Notes without deduction or withholding of any United States federal income
taxes. If for any reason during the term of this Agreement, any Bank becomes
26
unable to submit the forms referred to above or the information or
representations contained therein are no longer accurate in any material
respect, such Bank shall promptly notify the Administrative Agent and the
Borrower in writing to that effect. Unless the Borrower and the Administrative
Agent have received forms or other documents satisfactory to them indicating
that payments hereunder or under any Note are not subject to United States
withholding tax, the Borrower or the Administrative Agent shall withhold taxes
from such payments at the applicable statutory rate in the case of payments to
or for any Bank organized under the laws of a jurisdiction outside the United
States.
(e) Lending Office. Subject to the next succeeding sentence, each Bank
may, at its option, elect to make, fund or maintain its Loans or Swing Loans
hereunder at the branch or office specified on the signature pages hereto or
such other of its branches or offices as such Bank may from time to time elect.
Any Bank claiming any additional amounts payable pursuant to this Section 2.5
shall use its best efforts (consistent with its internal policy and legal and
regulatory restrictions) to change the jurisdiction of its lending office or
branch if the making of such change would avoid the need for, or reduce the
amount of, any such additional amounts which may thereafter accrue and would
not, in the reasonable judgment of such Bank, be otherwise disadvantageous to
such Bank.
(f) Conclusive and Binding; Survival. With respect to any additional
amount or amounts owing by the Borrower pursuant to this Section 2.5, a
statement of a Bank as to any such additional amount or amounts shall, in the
absence of manifest error, be conclusive and binding on the Borrower. In
determining such amount, a Bank may use any method of averaging and attribution
that it (in its sole and absolute discretion) shall deem applicable. The
obligation of the Borrower under this Section 2.5 shall survive the termination
of this Agreement.
2.6 Liquidation Fee. The Borrower understands that upon the request for a
LIBOR Base Loan for an Interest Period, each Bank intends to enter into funding
arrangements with third parties on terms and conditions which could result in
substantial losses to such Bank if such LIBOR Base Loan is not made or does not
remain outstanding for the entire Interest Period. Therefore, if either (a)
after the Borrower requests a LIBOR Base Loan, the LIBOR Base Loan is not made
on the first day of the specified Interest Period for any reason (including, but
not limited to, the failure of the Borrower to comply with one or more of the
conditions precedent to any Loan under this Agreement) other than a wrongful
failure by such Bank to make the LIBOR Base Loan, or (b) any LIBOR Base Loan is
repaid in whole or in part prior to the last day of its Interest Period (whether
as a result of acceleration, operation of law or otherwise), the Borrower agrees
to indemnify such Bank for any loss, cost and expense incurred by it resulting
therefrom, including without limitation any loss of profit and any loss or cost
in liquidating or employing deposits acquired to fund or maintain the LIBOR Base
Loan.
2.7 Basis for Determining LIBOR Rate Inadequate or Unfair. If with respect
to any Interest Period:
(a) a Bank is advised that deposits in lawful money of the United
States of America (in the applicable amounts) are not being offered to
such Bank in the eurodollar market for the relevant Interest Period, or a
Bank otherwise determines (which determination shall be binding and
conclusive on all parties) that by reason of
27
circumstances affecting the relevant market or the position of such Bank
in such market adequate and reasonable means do not exist for ascertaining
the Adjusted LIBOR Rate;
(b) a Bank determines that the Adjusted LIBOR Rate will not
adequately and fairly reflect the cost to such Bank of maintaining or
funding a LIBOR Base Loan for the relevant Interest Period, or that the
making or funding of a LIBOR Base Loan has become impracticable as a
result of an event occurring after the date of this Agreement which in the
opinion of such Bank materially affects such LIBOR Base Loan; or
(c) a Bank determines in good faith that any Regulatory Change makes
it unlawful or impracticable for such Bank to make or continue to maintain
any LIBOR Base Loan;
then such Bank shall promptly notify the Borrower of such circumstances and then
so long as such circumstances shall continue: (i) the obligation of such Bank to
make a LIBOR Base Loan and to convert any Loan into a LIBOR Base Loan shall be
terminated and (ii) all LIBOR Base Loans of such Bank then outstanding shall
automatically be converted into Base Rate Loans on the last day of the Interest
Period then applicable thereto, provided that if it shall become unlawful or
impracticable for such Bank to maintain any LIBOR Base Loan, such Loan shall
automatically and immediately be converted into a Base Rate Loan. If any such
conversion of a LIBOR Base Loan occurs on a day which is not the last day of
then current Interest Period with respect thereto, the Borrower shall pay such
amounts, if any, as may be required pursuant to Section 2.6 hereof.
2.8 Payments. Any other provision of this Agreement to the contrary
notwithstanding, the Borrower shall make each payment of interest on and
principal of the Loans, and fees and other payments due under this Agreement
(except as otherwise expressly provided herein), in immediately available funds
to the Administrative Agent at its office referred to in Section 10.3 hereof not
later than 11:00 a.m. (Houston, Texas time) on the date when due. The Borrower
hereby authorizes and directs the Administrative Agent and agrees that on the
Business Day on which any payment of principal, interest and/or fees are due,
the Administrative Agent may automatically charge one or more demand deposit
accounts of the Borrower maintained with the Administrative Agent. All payments
by the Borrower under this Agreement shall be made without offset, counterclaim
or other deduction and in such amounts as may be necessary in order that all
such payments shall not be less than the amounts otherwise specified to be paid
under this Agreement and the Notes. The Administrative Agent will promptly
thereafter distribute like funds ratably to each Bank (unless such amount is not
to be shared ratably in accordance with the terms hereof).
2.9 Setoff; etc.
(a) Setoff. Upon the occurrence and during the continuance of an Event of
Default, each Bank is hereby authorized at any time and from time to time,
without notice to the Borrower (any such notice being expressly waived by the
Borrower), 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 such Bank to or for the credit or the account of the Borrower,
including specifically any amounts held in any account maintained at such Bank,
28
against any and all amounts which may be owed to the Administrative Agent or the
Banks, or any of them, by the Borrower, in connection with this Agreement or any
Loan Document. The rights of the Banks under this Section 2.9(a) are in addition
to other rights and remedies (including, without limitation, other rights of
set-off) which the Banks may have. The Borrower agrees that any holder of any
participation in a Loan may, to the fullest extent permitted by law, exercise
all its rights of payment (including set-off) with respect to such participation
as fully as if such holder were the direct creditor of the Borrower in the
amount of such participation. Each Bank agrees to use reasonable efforts to
notify the Borrower of any exercise of its rights pursuant to this Section
2.9(a), provided, however, that failure to provide such notice shall not affect
the Bank's rights under this Section 2.9(a) or the effectiveness of any action
taken pursuant hereto.
(b) Sharing. If any Bank shall obtain any payment (whether voluntary,
involuntary, by application of offset or otherwise) on account of the Loans made
by it in excess of such Bank's ratable share of payments on account of the Loans
obtained by all the Banks, such Bank shall purchase from the other Banks such
participations in the Loans made by them as shall be necessary to cause such
purchasing Bank to share the excess payment ratably with each of them; provided,
however, that if all or any portion of the excess payment is thereafter
recovered from such purchasing Bank, the purchase shall be rescinded and the
purchase price restored pro rata according to the extent of such recovery, but
without interest. The Borrower agrees that any Bank so purchasing a
participation from another Bank pursuant to this Section 2.9(b) may, to the
fullest extent permitted by law, exercise all its rights of payment (including
the right to setoff) with respect to such participation as fully as if such Bank
were the direct creditor of the Borrower in the amount of such participation.
2.10 Revolving Credit Commitment Fee. (a) The Borrower agrees to pay a
commitment fee (the "Revolving Credit Commitment Fee") for the period
(including, without limitation, any portion thereof when the Banks' obligations
to lend shall be suspended by reason of the Borrower's inability to satisfy the
conditions of Article III) commencing on the Effective Date and continuing
through the Commitment Termination Date, computed on the average daily amount of
the Unused Portion during the period for which payment is made at the rate per
annum equal to the Applicable Fee Percentage (as determined in accordance with
subsection (b) of this Section 2.10). Such Revolving Credit Commitment Fee shall
be payable to the Administrative Agent for the ratable benefit of the Banks in
arrears on each Monthly Payment Date occurring after the Effective Date.
(b) The Applicable Fee Percentage shall be determined by reference to the
table set forth below on the basis of the Indebtedness Ratio determined by
reference to the most recent financial statements delivered pursuant to Section
5.1(a) or 5.1(b).
Indebtedness Ratio Applicable Fee Percentage
------------------ -------------------------
Greater than or equal to 2.50:1.00 0.50%
Less than 2.50:100 0.375%
Upon receipt of the financial statements delivered pursuant to Section 5.1(a) or
Section 5.1(b), as applicable, the Applicable Fee Percentage shall be adjusted,
such adjustment being effective on
29
the tenth Business Day after receipt of such financial statements and the
Compliance Certificate to be delivered in connection therewith; provided,
however, if the Borrower shall not have timely delivered such financial
statements in accordance with Section 5.1(a) or Section 5.1(b), as applicable,
beginning with the date upon which such financial statements should have been
delivered and continuing until such financial statements are delivered, the
Applicable Fee Percentage shall equal the Applicable Fee Percentage for the
prior period; provided further, however, that if upon delivery of such financial
statements the Applicable Fee Percentage is adjusted upwards, the adjustment of
the Applicable Fee Percentage shall be retroactive to the date upon which such
financial statements should have been delivered.
2.11 Upfront Fees. The Borrower agrees to pay on the Effective Date to the
Administrative Agent for the ratable benefit of the Banks which are party hereto
a nonrefundable upfront fee pursuant to the terms of a letter dated October 29,
2004 (the "Fee Letter") between the Borrower and the Administrative Agent.
2.12 Letters of Credit.
(a) Subject to all of the terms and conditions hereof (including Section
2.1(a) hereof, as if the Borrower had requested a Revolving Credit Loan in the
amount of the stated amount of the Letter of Credit), at the written request of
the Borrower, the Issuing Bank will on or after the date hereof issue standby
letters of credit ("Letters of Credit") for the account or benefit of the
Borrower expiring on or before the fifth Business Day preceding the Commitment
Termination Date; provided, however, the Issuing Bank shall not be required to
issue a Letter of Credit if, after giving effect thereto, (i) the aggregate
stated amount of all outstanding Letters of Credit, plus unreimbursed
reimbursement obligations, would exceed $6,000,000 or (ii) the sum of the
aggregate outstanding principal amount of all Revolving Credit Loans and the L/C
Outstandings would exceed the aggregate amount of the Revolving Credit
Commitments. The aggregate stated amount of any and all Letters of Credit shall
count against and reduce the amount available under the Revolving Credit
Commitments on a pro rata basis.
(b) Immediately upon the issuance of each Letter of Credit hereunder, each
Bank shall be deemed to have automatically, irrevocably and unconditionally
purchased and received from the Issuing Bank an undivided interest and
participation in and to such Letter of Credit, the obligations of the Borrower
in respect thereof, and the liability of the Issuing Bank thereunder in an
amount equal to the amount available for drawing under such Letter of Credit
multiplied by such Bank's Revolving Credit Percentage. The Administrative Agent
will notify each Bank promptly (a) upon the issuance of any Letter of Credit and
(b) upon any draw under a Letter of Credit. On or before the Business Day on
which the Issuing Bank makes payment of any draw on a Letter of Credit, on
demand of the Issuing Bank (which demand shall not require payment prior to the
Business Day such payment is required to be made under the Letter of Credit),
each Bank shall make payment to the Administrative Agent for the account of the
Issuing Bank, in immediately available funds an amount equal to such Bank's
Revolving Credit Percentage of the amount of such payment or draw. The
obligation of each Bank to reimburse the Administrative Agent for the account of
the Issuing Bank shall be unconditional, continuing, irrevocable and absolute.
In the event that any Bank fails to make payment to the Administrative Agent for
the account of the Issuing Bank of any amount due hereunder, the Administrative
Agent shall be entitled to receive, retain and apply against such obligation the
principal and interest otherwise
30
payable to such Bank hereunder until the Administrative Agent receives such
payment from such Bank on behalf of the Issuing Bank or such obligation is
otherwise fully satisfied; provided, however, that nothing contained in this
sentence shall relieve such Bank of its obligation to reimburse the
Administrative Agent on behalf of the Issuing Bank for such amount in accordance
with this Section 2.12.
(c) If and to the extent a drawing is at any time made under a Letter of
Credit, the Borrower agrees to pay to the Administrative Agent, for the account
of the Issuing Bank and the Banks immediately and unconditionally upon demand in
lawful money of the United States, an amount equal to each amount which shall be
so drawn. Interest shall be payable on any and all amounts remaining unpaid by
the Borrower under this subsection from the date such amounts become payable
(whether at stated maturity, by acceleration or otherwise) until payment in full
at the rate which would be payable on any outstanding Base Rate Loans which were
then overdue. The Administrative Agent shall have the right, at the request of
the Issuing Bank or otherwise, to convert the reimbursement obligation of the
Borrower arising out of any such drawing into a Revolving Credit Loan made under
this Agreement (the Borrower hereby irrevocably authorizing the Administrative
Agent to refinance without notice to the Borrower the reimbursement obligation
of the Borrower arising out of any such drawing into such a Revolving Credit
Loan and to take all action on behalf of the Borrower required pursuant to
Section 2.1(d) hereof to request such Revolving Credit Loan), although without
regard to the conditions precedent to making any such Revolving Credit Loan and
any requirement of this Agreement that each Revolving Credit Loan under this
Agreement be in a minimum amount. If and to the extent any such Letter of Credit
expires or otherwise terminates in a manner satisfactory to the Issuing Bank
without having been drawn upon, the amount available under the Revolving Credit
Commitments of the Banks shall to such extent be reinstated.
(d) The Borrower agrees to pay (i) monthly, in arrears, to the
Administrative Agent for the ratable benefit of the Banks a letter of credit
fee, computed at an annual rate equal to the Applicable LIBOR Margin in effect
from time to time applied to the aggregate amount available for drawing under
all of the Letters of Credit issued for the account of the Borrower from the
date of issuance of each Letter of Credit until the expiration thereof, and (ii)
to the Issuing Bank directly for its benefit as issuing bank, all customary fees
(including fronting fees) and other issuance, amendment, document examination,
negotiation and presentment expenses and related charges in connection with the
issuance, amendment, presentation of drafts, and the like customarily charged by
the Issuing Bank with respect to standby letters of credit, payable at the time
of invoice of such amounts.
(e) (i) In addition to amounts payable as elsewhere provided in this
Agreement, the Borrower hereby agrees to protect, indemnify, pay and save
harmless the Administrative Agent and each Bank, including the Issuing Bank.
from and against any and all liabilities and costs which the Administrative
Agent or such Bank may incur or be subject to as a consequence, direct or
indirect, of (A) the issuance of any Letter of Credit other than, in the case of
the Issuing Bank, as a result of its gross negligence or willful misconduct, as
determined by the final judgment of a court of competent jurisdiction, in
determining whether documents presented under any Letter of Credit comply with
the terms thereof, or (B) the failure of the Issuing Bank to honor a drawing
under such Letter of Credit as a result of any act or omission, whether
31
rightful or wrongful, of any present or future de jure or de facto governmental
authority (all such acts or omissions herein called "Governmental Acts").
(ii) As among the Borrower, the Banks (including the Issuing Bank)
and the Administrative Agent, the Borrower assumes all risks of the acts and
omissions of, or misuse of any Letter of Credit by, the beneficiary of such
Letter of Credit. In furtherance and not in limitation of the foregoing, subject
to the provisions of the Letter of Credit applications and Letter of Credit
reimbursement agreements executed by the Borrower, at the time of request for
any Letter of Credit, the Administrative Agent and the Banks (including the
Issuing Bank) shall not be responsible: (A) for the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document submitted by any party in
connection with the application for and issuance 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; (B) for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign a
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;
(C) for failure of the beneficiary of a Letter of Credit to comply with
conditions required in order to draw upon such Letter of Credit; (D) for errors,
omissions, interruptions or delays in transmission or delivery of any messages,
by mail, cable, telegraph, telex, or other similar form of teletransmission or
otherwise; (E) for errors in interpretation of technical trade terms; (F) for
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;
(G) for the misapplication by the beneficiary of a Letter of Credit of the
proceeds of any drawing under such Letter of Credit; and (H) for any
consequences arising from causes beyond the control of the Administrative Agent
and the Banks.
(iii) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted by the
Issuing Bank under or in connection with Letters of Credit issued on behalf of
the Borrower, or any related certificates shall not, in the absence of gross
negligence or willful misconduct of the Issuing Bank, as determined by the final
judgment of a court of competent jurisdiction, in determining whether documents
presented under any Letter of Credit comply with the terms thereof, put the
Issuing Bank, the Administrative Agent or any Bank under any resulting liability
to the Borrower or relieve the Borrower of any of its obligations hereunder to
any such Person.
(iv) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 2.12(e) shall survive the payment of the Obligations hereunder, the
termination of the Letters of Credit and termination of this Agreement.
(f) Upon acceleration of the Notes as a result of the occurrence of an
Event of Default, the Borrower shall immediately pay to the Administrative
Agent, for the benefit of the Banks, an amount equal to the Unfunded
Obligations, and upon receipt of the payment of such amount, the Administrative
Agent shall deposit such funds in an interest-bearing cash account (the "Cash
Account") in the name of the Borrower maintained with the Administrative Agent
as to which the Borrower shall have no right of withdrawal, except as provided
below. Upon any draw on a Letter of Credit, the Administrative Agent shall pay
the amounts allocated in respect of such Unfunded Obligation to the Issuing
Bank. Upon cancellation or termination of a Letter
32
of Credit without its being fully drawn, the Administrative Agent shall reapply
the amounts allocated in respect of such Unfunded Obligation as provided in
Section 2.13(a) or (b), as applicable, as if such portion had then been paid to
the Administrative Agent by the Borrower for application pursuant to said
Section.
2.13 Application of Payments and Collections.
(a) Subject to the provisions of subsection (b) below or any agreement of
the Administrative Agent and the Banks to the contrary, all payments and
prepayments and any other amounts received by the Administrative Agent from or
for the benefit of the Borrower shall be applied, first, to pay principal of and
interest on any amounts which may have been advanced by the Administrative Agent
on behalf of any Bank for which the Administrative Agent has not then been
reimbursed by such Bank or the Borrower, second, to pay all other obligations in
respect of fees, expenses, reimbursements or indemnities then due and payable,
third, to pay interest then due in respect of the Loans, and fourth, to pay the
principal of the Loans then due and payable.
(b) After the occurrence of an Event of Default and while the same is
continuing, the Administrative Agent shall, unless the Administrative Agent and
the Banks shall agree otherwise, apply all payments and prepayments in respect
of any Obligations hereunder in the following order:
FIRST, to pay interest on and then principal of any amounts which
the Administrative Agent may have advanced on behalf of any Bank for which
the Administrative Agent has not then been reimbursed by such Bank or the
Borrower;
SECOND, to pay Obligations in respect of any fees, expense
reimbursements or indemnities then due to the Administrative Agent;
THIRD, to pay Obligations in respect of any fees, expenses,
reimbursements or indemnities then due to the Banks;
FOURTH, to the payment of interest accrued on all Loans and Swing
Loans and any amounts due pursuant to Sections 2.5 and 2.6, to be
allocated among the Banks pro rata based on the respective aggregate
amounts of such accrued interest and amounts owed to them; and
FIFTH, to the payment of the outstanding principal amounts of all
Loans and Swing Loans and to the provision of cash collateral for Unfunded
Obligations, to be allocated pro rata based on the respective outstanding
principal amounts of the Loans and the aggregate outstanding Unfunded
Obligations.
(c) Each of the Banks hereby irrevocably designates the Administrative
Agent its attorney in fact for the purpose of receiving any and all payments to
be made to such Bank in respect of Obligations held by it, and hereby directs
each payor of any such payment to make such payment to the Administrative Agent;
and each of the Banks hereby further agrees that if, notwithstanding the
foregoing, it should receive any such payment, it shall hold such payment in
trust for, and promptly deliver such payment to, the Administrative Agent.
Notwithstanding the
33
foregoing, this Section 2.13(c) shall only apply to LaSalle in respect of Swing
Loans after the occurrence of an Event of Default and while the same is
continuing.
(d) Whenever any portion of any payment received or amount realized by the
Administrative Agent is applied pursuant to FIFTH of clause (b) above, the part
thereof allocated to Unfunded Obligations shall be held by the Administrative
Agent for the benefit of the Issuing Bank and the Banks. Pending distribution of
such amounts, the Administrative Agent shall hold such amounts in the Cash
Account pursuant to Section 2.12(f).
(e) The Administrative Agent shall promptly distribute to each Bank at its
primary address set forth on the appropriate signature page hereof or at such
other address as a Bank may designate to the Administrative Agent in writing,
such funds as such Bank may be entitled to receive.
2.14 The Swing Line.
(a) Swing Loans. Subject to all of the terms and conditions hereof,
LaSalle agrees to make loans to the Borrower ("Swing Loans") which shall not in
the aggregate at any time outstanding exceed the Swing Line Commitment. The
Swing Line Commitment shall be available to the Borrower and may be availed of
by the Borrower from time to time and borrowings thereunder may be repaid and
reborrowed during the period ending on the Commitment Termination Date.
(b) Payment.
(i) Each Swing Loan shall be due and payable on the Commitment
Termination Date. The Borrower may voluntarily prepay any Swing Loan before its
maturity at any time upon notice to LaSalle prior to 2:30 p.m. (Chicago time) on
the date fixed for prepayment, each such prepayment to be made by the payment of
the principal amount to be prepaid, plus accrued interest thereon to the date of
prepayment and any amount due LaSalle under Section 2.14(g) hereof as a result
of such prepayment.
(ii) Each Swing Loan shall bear interest (computed on the basis of
360 days and actual days elapsed) at (x) a fluctuating rate per annum equal to
the Base Rate or (y) if the Borrower so elects in accordance with the following
provisions, the Quoted Rate (as defined below); provided, however, that upon the
occurrence and during the continuance of any Event of Default, such Swing Loan
shall bear interest at a rate per annum equal to the sum of 1.50% per annum,
plus the Base Rate, plus the Applicable Base Rate Margin from time to time in
effect. Interest on each Swing Loan shall be due and payable on each Monthly
Payment Date or, in the event of Swing Loans bearing interest at the Quoted
Rate, the last day of each Quoted Interest Period (as defined below) applicable
thereto, and interest after maturity (whether by lapse of time, acceleration or
otherwise) shall be due and payable upon demand.
(iii) The Borrower will make each payment under this Section 2.14
and under the Swing Line Note on the day when due to LaSalle at its address set
forth in Section 10.3 in immediately available funds. If LaSalle does not
receive such payment when due, then LaSalle may, but is not obligated to, apply
amounts in any account that the Borrower maintains with LaSalle to such payment.
Notwithstanding the foregoing, after the occurrence of an Event of
34
Default and while the same is continuing, all payments shall be made to the
Administrative Agent in accordance with Section 2.13.
(c) Requests for Swing Loans. The Borrower shall give LaSalle prior notice
(which may be written or oral) no later than 12:00 Noon (Chicago time) on the
date upon which the Borrower requests that any Swing Loan be made, of the amount
and date of such Swing Loan and, if applicable, the interest period selected
therefor (the "Quoted Interest Period"). Within one hundred twenty (120) minutes
after receiving such notice, LaSalle shall in its discretion quote an interest
rate to the Borrower at which LaSalle would be willing to make such Swing Loan
available to the Borrower for the Quoted Interest Period (the rate so quoted for
the Quoted Interest Period being herein referred to as the "Quoted Rate"). The
Borrower acknowledges and agrees that the interest rate quote is given for
immediate and irrevocable acceptance, and if the Borrower does not so
immediately accept the Quoted Rate for the full amount requested by the Borrower
for such Swing Loan, the Quoted Rate shall be deemed immediately withdrawn and
such Swing Loan shall bear interest at the Base Rate from time to time in
effect. Subject to all of the terms and conditions hereof, the proceeds of such
Swing Loan shall be made available to the Borrower no later than 3:00 p.m.
(Chicago time) on the date so requested in funds immediately available at the
principal office of LaSalle in Chicago, Illinois. Anything contained in the
foregoing to the contrary notwithstanding, (i) the obligation of LaSalle to make
Swing Loans shall be subject to all of the terms and conditions of this
Agreement and (ii) LaSalle shall not be obligated to make more than one Swing
Loan during any one day. LaSalle shall promptly notify the Administrative Agent,
and the Administrative Agent shall thereafter notify each Bank, of each Swing
Loan and the amount of each Swing Loan made since the last notice. The Borrower
agrees that LaSalle may rely on any such telephonic or telecopy notice given by
any person LaSalle in good faith believes is an authorized representative of the
Borrower without the necessity of independent investigation, and in the event
any such notice by telephone conflicts with any written confirmation, such
telephonic notice shall govern if LaSalle has acted in reliance thereon.
(d) Swing Line Note. The Swing Loans made to the Borrower by LaSalle shall
be evidenced by a single promissory note of the Borrower issued to LaSalle in
the form of Exhibit E hereto. Such promissory note is hereinafter referred to as
the "Swing Line Note."
(e) Swing Line Fees. The Borrower agrees to pay a commitment fee (the
"Swing Line Commitment Fee") for the period (including, without limitation, any
portion thereof when LaSalle's obligation to lend shall be suspended by reason
of the Borrower's inability to satisfy the conditions of Article III) commencing
on the Effective Date and continuing through the Termination Date, computed on
the average daily amount of the excess of the Swing Line Commitment on such date
over the aggregate outstanding principal amount of the Swing Loans during the
period for which payment is made at the rate per annum equal to the Applicable
Fee Percentage (as determined in accordance with subsection (b) of Section
2.10). Such Swing Line Commitment Fee shall be payable to LaSalle in arrears on
each Monthly Payment Date occurring after the Effective Date.
(f) Conversion to Advances. Either LaSalle or the Borrower may, prior to
the Termination Date and upon at least two Business Days' prior written notice
to the Administrative Agent and to the Borrower or LaSalle, as applicable (which
notice shall be promptly transmitted
35
by the Administrative Agent to each Bank), in whole but not in part, terminate
the Swing Line Commitment and increase LaSalle's Revolving Credit Commitment by
the amount of the Swing Line Commitment on the date specified in such notice
(the "Conversion Date"), provided that no Event of Default or Unmatured Event of
Default shall exist at the time of the request of the proposed increase. In such
event:
(i) On the Conversion Date, (A) the Revolving Credit Commitment of
LaSalle shall be increased by the amount of the Swing Line Commitment, (B) the
Revolving Credit Percentages of each Bank will be revised to reflect the
increase in LaSalle's Revolving Credit Commitment, (C) the Swing Loans shall be
converted to Revolving Credit Loans and (D) each Bank shall purchase (or sell,
as applicable) Revolving Credit Loans in an amount necessary such that, after
giving effect to the increase in the aggregate Revolving Credit Commitments,
each Bank will hold its Revolving Credit Percentage (as revised) of outstanding
Revolving Credit Loans. In consideration for the sale and assignment of
Revolving Credit Loans hereunder, each purchasing Bank shall pay on the
Conversion Date to the Administrative Agent for the ratable benefit of the
selling Banks an amount equal to the principal amount of Revolving Credit Loans
to be acquired by such Bank hereunder. On or after the Conversion Date, each of
the Banks shall be entitled to receive from the Administrative Agent all
payments of principal, interest and fees with respect to any interest assigned
to it hereby. The assigning Bank shall be entitled to any interest on or fees in
respect of any interest assigned for periods prior to the Conversion Date. In
the event that any Bank receives any payment to which any other Bank may be
entitled, then the Bank receiving such amount shall promptly remit it to the
Administrative Agent on behalf of such other Banks. The Borrower shall execute
and deliver a replacement Revolving Credit Note to LaSalle in the principal
amount of LaSalle's Revolving Credit Commitment, as so increased.
(ii) On the Conversion Date, the Borrower will be deemed to have
requested a Revolving Credit Loan (without regard to any requirement of this
Agreement that each Revolving Credit Loan under this Agreement be in a minimum
amount) constituting a Base Rate Loan in an amount equal to the amount of the
Swing Loans outstanding on such date. Based upon the Revolving Credit
Percentages of each Bank as revised in accordance with clause (i) above, each
Bank (including LaSalle) shall make the proceeds of its requested Revolving
Credit Loan available to the Administrative Agent, in immediately available
funds, before 12:00 Noon (Chicago time) on the Conversion Date. The proceeds of
such Revolving Credit Loans shall be paid to LaSalle, as applicable, to repay
the outstanding Swing Loans. In the event that any such purchase occurs on a
date other than the end of an interest period in respect of any LIBOR Base Loan
or any Quoted Interest Period in respect of any Swing Loan, the Borrower shall
pay any amounts that would be owing to any Bank pursuant to Sections 2.4 and
2.14(g) as if such purchase were a prepayment.
(g) Liquidation Fee. The Borrower understands that upon the acceptance by
the Borrower of a Quoted Rate in respect of a Swing Loan, LaSalle intends to
enter into funding arrangements with third parties on terms and conditions which
could result in substantial losses to LaSalle if such Swing Loan is not made at
the Quoted Rate or does not remain outstanding for the entire Quoted Interest
Period. Therefore, if either (a) after the Borrower accepts a Quoted Rate in
respect of a Swing Loan, the Swing Loan is not made on the first day of the
applicable Quoted Interest Period for any reason (including, but not limited to
the failure of the Borrower to
36
comply with one or more of the conditions precedent to any Swing Loan under this
Agreement) other than a wrongful failure by LaSalle to make the Swing Loan, or
(b) such Swing Loan is repaid in whole or in part prior to the last day of its
Interest Period (whether as a result of acceleration, operation of law or
otherwise), the Borrower agrees to indemnify LaSalle for any loss, cost and
expense incurred by it resulting therefrom, including without limitation any
loss of profit and any loss or cost in liquidating or employing deposits
acquired to fund or maintain such Swing Loan.
ARTICLE III.
CONDITIONS PRECEDENT
3.1 Conditions Precedent to Effectiveness. The effectiveness of this
Agreement and the obligation of each of the Banks to make any Loan hereunder, of
LaSalle to make a Swing Loan or of the Issuing Bank to issue any Letter of
Credit hereunder is subject to the following conditions precedent:
(a) The Administrative Agent shall have received copies (in sufficient
number for each of the Banks to receive a copy) of all of the following, each in
form and substance reasonably satisfactory to the Administrative Agent and the
Banks, unless waived by each of the Banks:
(i) This Agreement, appropriately completed and duly executed by the
parties hereto;
(ii) Signature pages for the Subsidiary Guaranty and for the
Security Agreement, each duly executed and delivered by QDI Management, LLC;
(iii) Reaffirmation of Subsidiary Guaranty, duly executed and
delivered by each of the Subsidiary Guarantors;
(iv) Personal Guaranty, duly executed and delivered by Xxxxxx X.
Xxxxxxxxxxx;
(v) Mortgages, and/or amendments to existing Mortgages, as
appropriate, relating to each parcel of Real Property owned by the Borrower or
any of its Subsidiaries, in form reasonably satisfactory to the Administrative
Agent and its counsel, in recordable form, appropriately completed and duly
executed by the parties thereto;
(vi) Leasehold Mortgages, and/or amendments to existing Leasehold
Mortgages, as appropriate, relating to each parcel of Real Property (other than
any Excluded Property) subject to a ground lease pursuant to which the Borrower
or any of its subsidiaries is lessee, in recordable form, appropriately
completed and duly executed by the parties thereto;
(vii) Collateral Assignment of Leases, and/or amendments to any
existing Collateral Assignment of Leases, as appropriate, duly executed by the
parties thereto, in form reasonably satisfactory to the Administrative Agent and
its counsel, granting to the Administrative Agent, for the benefit of the Banks,
a collateral assignment of and security interest in each of the leases relating
to Real Property (other than any Excluded Property) leased
37
by Borrower or any of its Subsidiaries as lessee, provided, however, any
Collateral Assignment of Leases relating to the Subject Assets are subject to
the Intercreditor Agreement;
(viii) To the extent not already obtained and delivered to the
Administrative Agent, agreements or estoppel letters from each of the lessors on
each parcel of Real Property (other than the Excluded Property) leased by the
Borrower or any of its Subsidiaries, in form and substance reasonably
satisfactory to the Administrative Agent;
(ix) A certificate of the secretary of the Borrower, certifying
that (i) a correct and complete copy of its Articles of Incorporation, with all
amendments thereto, is attached to the certificate, (ii) a correct and complete
copy of its Bylaws, with all amendments thereto, is attached to the certificate,
(iii) a correct and complete copy of the resolutions of its Board of Directors
authorizing the execution, delivery and performance of the Loan Documents to
which it is a party are attached to the certificate, and such resolutions have
not been subsequently modified or repealed and (iv) except in respect of the
Merger, there are no proceedings pending or contemplated as to the merger,
consolidation, liquidation or dissolution of such Borrower;
(x) A certificate of the secretary of each Subsidiary Guarantor,
certifying that (i) with respect to each Subsidiary Guarantor which is a
corporation, (A) a correct and complete copy of its Articles of Incorporation,
with all amendments thereto, is attached to the certificate, (B) a correct and
complete copy of its Bylaws, with all amendments thereto, is attached to the
certificate, and (C) a correct and complete copy of the resolutions of its Board
of Directors authorizing the execution, delivery and performance of the Loan
Documents to which it is a party are attached to the certificate, and such
resolutions have not been subsequently modified or repealed, (ii) with respect
to each Subsidiary Guarantor which is a limited liability company, (A) a correct
and complete copy of the articles of organization and operating agreement (if
any), with all amendments thereto, is attached to the certificate and (B) all
action on behalf of the limited liability company and members necessary to
authorize the execution, delivery and performance of the Loan Documents to which
it is a party has been taken, and (iii) there are no proceedings pending or
contemplated as to the merger, consolidation, liquidation or dissolution of such
Subsidiary Guarantor;
(xi) A certified copy of all documents evidencing any necessary
consent or governmental approvals (if any) with respect to the consummation of
the Merger and the execution, delivery and performance of the Loan Documents and
the consummation of the transactions contemplated hereby;
(xii) A certificate executed by the secretary or any assistant
secretary of the Borrower certifying the names of the officers of the Borrower
authorized to sign the Loan Documents and to give notices and other
communications in connection with this Agreement and the transactions
contemplated hereby, together with a sample of the true signature of such
officers;
(xiii) A certificate executed by the secretary or an assistant
secretary of each of the Subsidiary Guarantors certifying the names of the
officers of such Subsidiary authorized to sign the Subsidiary Guaranty or the
Reaffirmation of Subsidiary Guaranty, as applicable, and any Security Documents
to which it is a party;
38
(xiv) A favorable opinion of counsel to the Borrower and the
Subsidiary Guarantors substantially in the form of Exhibit F attached hereto;
(xv) A closing certificate (the "Closing Certificate"), executed
by the president, executive vice president or chief financial officer of the
Borrower, certifying that (i) the Merger has been consummated in accordance with
the provisions of the Merger Agreement, (ii) attached thereto are true and
correct copies of the Merger Agreement and the Shareholders Agreement, each as
in effect on the date thereof, (iii) representations and warranties contained in
this Agreement and each other Loan Document are true and accurate in all
material respects, and (iv) no Default or Event of Default has occurred and is
continuing;
(xvi) Evidence of insurance for all insurance required to be
maintained by the Borrower and its Subsidiaries pursuant to this Agreement and
the Security Documents;
(xvii) A certified copy of the Articles of Merger filed with the
Secretary of State of the State of Indiana; and
(xviii) Such other approvals or documents as the Administrative
Agent or the Required Banks may reasonably request;
(b) The Indebtedness Ratio of the Borrower as of the last day of the
fiscal quarter most recently completed for which financial statements have been
provided in accordance with Section 5.1 of the Existing Credit Agreement (the
"Determination Date") shall not be greater than 4.00:1.00 and the Pro Forma
Consolidated Cash Flow of the Borrower and its Subsidiaries for the twelve month
period ending on the Determination Date shall be not less than $24,500,000; and
the Borrower shall have furnished to the Administrative Agent a certificate of
the president, executive vice president or chief financial officer of the
Borrower certifying to such effect;
(c) Payment by the Borrower (i) to the Administrative Agent for the
ratable benefit of the Banks of a nonrefundable upfront fee in accordance with
the provisions of Section 2.11 hereof and (ii) to the Administrative Agent, for
its own account, the fees payable on the Effective Date in accordance with the
provisions of Section 8.10 hereof; and
(d) Payment by the Borrower of all costs and expenses of the
Administrative Agent's special counsel (including, without limitation, legal
fees and expenses) incurred in connection with the preparation and execution of
the Loan Documents and incident to all proceedings in connection with,
transactions contemplated by, and documents relating to this Agreement and the
Loan Documents, for which the Borrower has received an invoice no later than the
second Business Day prior to the Effective Date.
Upon the making of the initial Loans and Swing Loans hereunder, the foregoing
conditions shall be deemed to be satisfied; provided, however, that the making
of such Loans and Swing Loans shall not constitute a waiver by the
Administrative Agent or any Bank of any right which the Administrative Agent or
such Bank may have in the event that any certificate, financial statement or
other document delivered pursuant to this Section 3.1 or otherwise in connection
with the transactions contemplated by this Agreement shall prove to have been
false or misleading in any material respect.
39
3.2 Conditions Precedent to All Loans, Swing Loans and Issuances of
Letters of Credit. The obligation of each of the Banks to make any Loan
hereunder, of LaSalle to make any Swing Loan or of the Issuing Bank to issue any
Letters of Credit shall be further subject to the satisfaction of each of the
following conditions, unless waived in writing by each of the Banks:
(a) In the case of a Revolving Credit Loan, the Effective Date Borrowing
Notice or a Notice of Borrowing, in each case appropriately completed and duly
executed by the Borrower; in the case of the Term Loans, the Effective Date
Borrowing Notice appropriately completed and duly executed by the Borrower; in
the case of a Swing Loan, a request meeting the requirements of Section 2.14(c)
hereof; and in the case of a Letter of Credit, an application for a letter of
credit, in form and substance satisfactory to the Issuing Bank, appropriately
completed and duly executed by a Borrower;
(b) The representations and warranties set forth in Article IV hereof and
in each of the other Loan Documents are true and correct on the Effective Date
and on the date of and after giving effect to the making of the Loan or Swing
Loan or the issuance of the Letter of Credit, except that the representations
and warranties set forth in Section 4.5 as to the financial statements of the
Borrower shall be deemed a reference to the audited and unaudited financial
statements of the Borrower, as the case may be, most recently delivered to the
Banks pursuant to Section 5.1;
(c) No Default or Event of Default shall exist, and since October 31, 2004
no Material Adverse Occurrence shall have occurred and be continuing, on or as
of the date of the making of the Loan or Swing Loan or the issuance of the
Letter of Credit; and
(d) The making of the Loan by such Bank, the making of the Swing Loan by
LaSalle or the issuance of the Letter of Credit by the Issuing Bank, is not in
violation of any applicable law, rule or regulation or any directive, request or
order of any court or governmental authority having jurisdiction over such Bank
or the Issuing Bank, as applicable.
The delivery of the Notice of Borrowing, the Effective Date Borrowing Notice,
the request for the Swing Loan or the application for the issuance of a Letter
of Credit, as applicable, by the Borrower shall constitute a certification by
the Borrower, binding upon the Borrower, as to the matters set forth in
subsections (b) and (c) above.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Administrative Agent, each of
the Banks and the Issuing Bank that as of the Effective Date, and as of the date
of each Loan and Swing Loan and each issuance of a Letter of Credit, as follows:
4.1 Organization; etc. The Borrower is a corporation validly organized and
existing and in good standing under the laws of the state of its organization,
has full power and authority to own its property and conduct its business as
conducted by it and is duly qualified to do business and is in good standing as
a foreign corporation in each jurisdiction where the nature of its business or
the character of its property makes such qualification or licensing necessary. A
40
list of the jurisdictions in which the Borrower is qualified to do business is
set forth in Annex I. The Borrower has full power and authority to enter into
and to perform its obligations under the Loan Documents and to request Loans,
Swing Loans and Letters of Credit under the Agreement. The Borrower has all
licenses, permits and franchises necessary to carry on its business as now being
conducted and to own and operate its Property, except for permits, licenses and
franchises the failure of which to obtain will not result in a Material Adverse
Occurrence.
4.2 Due Authorization. The execution, delivery and performance by the
Borrower and of each of the Subsidiary Guarantors of the Loan Documents to which
it is a party have been duly authorized by all necessary corporate action, do
not require any approval or consent of, or any registration, qualification or
filing with, any governmental agency or authority or any approval or consent of
any other Person, do not and will not conflict with, result in any violation of
or constitute any default under, any provision of the organizational,
constitutive or governing documents (including, as applicable, articles of
incorporation, bylaws and partnership agreements) of the Borrower or any of the
Subsidiary Guarantors, any agreement binding on or applicable to the Borrower,
any of the Subsidiary Guarantors or any of their respective Property, or any law
or governmental regulation or court decree or order binding upon or applicable
to the Borrower, any of the Subsidiary Guarantors or any of their respective
Property and will not result in the creation or imposition of any Lien on any of
their respective Property pursuant to the provisions of any agreement binding on
or applicable to the Borrower, any of the Subsidiary Guarantors or any of their
respective Property, except any such Liens created pursuant to the Security
Documents in favor of the Administrative Agent, for the benefit of the Banks.
4.3 Subsidiaries. As of the date hereof, the Borrower has no Subsidiaries
except those listed on Annex II, which correctly sets forth the name of each
Subsidiary, the jurisdiction of its incorporation and the percentage ownership
of each Subsidiary which is owned, of record or beneficially, by each Borrower
and/or one or more of its Subsidiaries. The Borrower and its Subsidiaries has
good and marketable title to all of the shares or other equity interests it
purports to own of each of its Subsidiaries, free and clear of any Lien (other
than any Liens in favor of the Administrative Agent for the benefit of the
Banks) and all such shares have been duly issued and are fully paid and
nonassessable. Each Subsidiary has been duly organized and is validly existing
and in good standing under the laws of its jurisdiction of incorporation or
organization and is duly licensed or qualified and in good standing in each
other jurisdiction where the nature of the business transacted by it or the
character of its properties owned or leased makes such qualification or
licensing necessary. A list of the jurisdictions in which each Subsidiary is
qualified to do business as of the date hereof is set forth on the attached
Annex II. Each Subsidiary has full power and authority to own and operate its
properties, to carry on its business as now conducted and to enter into and
perform the Subsidiary Guaranty and the Security Documents to which it is a
party. Each Subsidiary has all licenses, permits and franchises necessary to
carry on its business as now being conducted and to own and operate its
properties, except for permits, licenses and franchises the failure of which to
obtain will not result in a Material Adverse Occurrence.
4.4 Validity of the Agreement; etc. Each Loan Document is the legal, valid
and binding obligation of the Borrower and of each of the Subsidiary Guarantors
which are a party thereto and is enforceable in accordance with its terms.
41
4.5 Financial Statements. The consolidated balance sheets of the Borrower
and its Subsidiaries as of October 31, 2004, October 26, 2003 and October 27,
2002 and the related consolidated statements of income, stockholders' equity and
cash flows for the three years then ended certified by PricewaterhouseCoopers
LLP, the Borrower's independent public accountants, copies of which have
heretofore been delivered to the Banks, were prepared in accordance with
generally accepted accounting principles which, except as noted therein, were
consistently applied throughout the periods involved, and present fairly the
financial condition and results of operations and cash flows of the Borrower and
its Subsidiaries for and as of the end of each of such years. The unaudited
consolidated balance sheet of the Borrower and its Subsidiaries as of February
20, 2005 and the unaudited statements of operations for the sixteen week period
ended on said date, copies of which have heretofore been delivered to the Banks,
have been prepared in accordance with GAAP, present fairly in all material
respects the financial position of the Borrower and its Subsidiaries, on a
consolidated basis, as of said date and the result of operations and cash flows
of the Borrower and its Subsidiaries, on a consolidated basis, for said period,
subject to customary year-end adjustments.
4.6 Litigation; etc. Except as disclosed in the Borrower's Annual Report
on Form 10-K for the year ended October 31, 2004, there is no action, suit or
proceeding at law or equity, or before or by any federal, state, local or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, pending, or to the knowledge of the Borrower threatened,
against the Borrower or any of its Subsidiaries or any of their respective
Properties, which if determined adversely would be a Material Adverse Occurrence
or would affect the ability of the Borrower or any of its Wholly-Owned
Subsidiaries to perform its obligations under the Loan Documents; and neither
the Borrower nor any of its Subsidiaries is in default with respect to any final
judgment, writ, injunction, decree, rule or regulation of any court or federal,
state, local or other governmental department, commission, board, bureau, agency
or instrumentality, domestic or foreign, where the effect of such default could
result in a Material Adverse Occurrence.
4.7 Compliance with Law. Neither the Borrower nor any of its Subsidiaries
is (a) in default with respect to any order, writ, injunction or decree of any
court, governmental authority or arbitration board or tribunal to which it is a
named party or (b) in violation of any law, rule, regulation, ordinance or order
relating to its or their respective businesses, the violation of which could
result in a Material Adverse Occurrence.
4.8 ERISA Compliance. The Internal Revenue Service has issued a
determination that each Plan (except for any Plan which is unfunded and
maintained primarily for the purpose of providing deferred compensation for a
select group of management or highly compensated employees) is qualified under
Section 401(a) and related provisions of the Code, as amended by ERISA, and that
each related trust or custodial account is exempt from taxation under Section
501(a) of the Code. All Plans comply in all material respects with ERISA and
other applicable laws. There exist with respect to the Borrower and its
Subsidiaries no "multi-employer plans," as defined in the Multi-employer Pension
Plan Amendments Act of 1980, for which a material withdrawal or termination
liability may be incurred. There exist with respect to all Plans and trusts: (a)
no material accumulated funding deficiency within the meaning of ERISA; (b) no
termination of any Plan or trust which would result in any material liability to
the PBGC or any "reportable event," as that term is defined in ERISA, which is
likely to constitute grounds for
42
termination of any Plan or trust by the PBGC; and (c) no "prohibited
transaction," as that term is defined in ERISA, which is likely to subject any
Plan, trust or party dealing with any Plan or trust to any material tax or
penalty on prohibited transactions imposed by Section 4975 of the Code.
4.9 Title to Assets. The Borrower and each of its Subsidiaries has good
and marketable fee simple title to all of its Property constituting real
property and good and marketable title to and ownership of all of its Property
and assets constituting personal property, in each case as disclosed on the
consolidated financial statements of the Borrower as of and for the sixteen week
period ending February 20, 2005 (except for any such Property disposed of by the
Borrower or any of its Subsidiaries in the ordinary course of business), free
and clear of all Liens except for Liens and other encumbrances permitted
pursuant to Section 6.4. The Borrower and each of its Subsidiaries has a valid
leasehold interest in all Property leased by it and used in the operation of its
business.
4.10 Indebtedness. Except for Indebtedness listed in Annex III or
otherwise incurred after the Effective Date pursuant to Section 6.3, neither the
Borrower nor any of its Subsidiaries has any Indebtedness.
4.11 Use of Proceeds. The proceeds of the Loans and Swing Loans will be
used by the Borrower to fund the consideration payable to effect the Merger,
working capital requirements of the Borrower and for other general corporate
purposes.
4.12 Margin Stock. No part of any Loan or Swing Loan shall be used at any
time by the Borrower to purchase or carry margin stock (within the meaning of
Regulation U) or to extend credit to others for the purpose of purchasing or
carrying any margin stock. Neither the Borrower nor any of its Subsidiaries is
engaged principally, or as one of its important activities, in the business of
extending credit for the purposes of purchasing or carrying any such margin
stock. No part of the proceeds of any Loan or Swing Loan will be used by the
Borrower for any purpose which violates, or which is inconsistent with, any
regulations promulgated by the Board of Governors of the Federal Reserve System.
4.13 Investment Company Act. Neither the Borrower nor any of its
Subsidiaries is an "investment company," or an "affiliated person" of, or a
"promoter" or "principal underwriter" for, an "investment company," as such
terms are defined in the Investment Company Act of 1940, as amended. The making
of the Loans and Swing Loans, the application of the proceeds and repayment
thereof by the Borrower and the performance of the transactions contemplated by
the Agreement will not violate any provision of said Act, or any rule,
regulation or order issued by the Securities and Exchange Commission thereunder.
4.14 Unregistered Securities. Neither the Borrower nor any of its
Subsidiaries has (a) issued any unregistered securities in violation of the
registration requirements of Section 5 of the Securities Act of 1933, as
amended, or any other law; or (b) violated any rule, regulation or requirement
under the Securities Act of 1933, as amended, or the Securities Exchange Act of
1934, as amended.
43
4.15 Public Utility Holding Company Act. Neither the Borrower nor any of
its Subsidiaries is a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company," within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
4.16 Accuracy of Information. All information heretofore or herewith
furnished by or on behalf of the Borrower to the Administrative Agent or the
Banks for purposes of or in connection with the Agreement or any transaction
contemplated by the Agreement is, and all other such information hereafter
furnished by or on behalf of the Borrower to the Administrative Agent or the
Banks will be, true and accurate in every material respect on the date as of
which such information is dated or certified and no such information contains
any material misstatement of fact or omits to state a material fact or any fact
necessary to make the statements contained therein not misleading.
4.17 Tax Returns; Audits. Each of the Borrower and its Subsidiaries has
filed all federal, state and local income tax returns and other reports which
are required to be filed, and has paid all taxes as shown on said returns and on
all assessments received by any such Person (except for any assessments which
are being contested in good faith by appropriate proceedings that will prevent a
forfeiture or sale of any property and for which an adequate book reserve in
accordance with GAAP shall have been set aside), to the extent that such taxes
have become due or has obtained extensions with respect to the filing of such
returns and has made provision for the payment of taxes anticipated to be
payable in connection with such returns. Each of the Borrower and its
Subsidiaries has made all required withholding deposits. The Borrower does not
have knowledge of any objections to or claims for additional taxes by federal,
state or local taxing authorities against it or any of its Subsidiaries which
could result in a Material Adverse Occurrence.
4.18 Environmental and Safety Regulations. The Borrower and each of its
Subsidiaries are in compliance with all requirements of applicable federal,
state and local environmental, pollution control, health and safety statutes,
laws and regulations except for any noncompliance which, individually or in the
aggregate, could not result in a Material Adverse Occurrence and are not the
subject of any federal or state investigation evaluating whether any remedial
action is needed to respond to a release of any toxic or hazardous waste or
substance into the environment. The Borrower further represents and warrants
that (i) the Real Property and its intended use complies with all applicable
laws, governmental regulations and the terms of any enforcement action by any
federal, state, regional or local governmental agency, including, without
limitation, all applicable federal, state and local laws pertaining to air and
water quality, hazardous waste, waste disposal and other environmental matters
(including, but not limited to, the Clean Water, Clean Air, Federal Water
Pollution Control, Solid Waste Disposal, Resource Conservation and Recovery and
Comprehensive Environmental Response, Compensation, and Liability Acts, as said
acts may be amended), and the rules, regulations and ordinances of all
applicable federal, state and local agencies and bureaus, except in each case
(x) for any noncompliance which, individually or in the aggregate, could not
result in a Material Adverse Occurrence or (y) as disclosed on Annex IX, and
(ii) no notice, demand, request for information, citation, summons or order has
been issued, no complaint has been filed, no penalty has been assessed and no
investigation or review is pending or threatened by any governmental or other
entity with respect to any alleged failure by the Borrower or any of its
Subsidiaries to comply in
44
any respect with any of such environmental laws except for any such liability
for which an adequate book reserve in accordance with GAAP shall have been set
aside in respect thereto.
4.19 Pro Formas; Forecasts. The pro forma balance sheet and the forecasts
of the Borrower and its Subsidiaries, furnished to the Administrative Agent and
each of the Banks, consisting of consolidated balance sheets, consolidated cash
flow statements and consolidated income statements of the Borrower and its
Subsidiaries, after giving effect to the Merger and the making of the Loans and
Swing Loans hereunder and the application of the proceeds thereof, together with
appropriate supporting details and a statement of underlying assumptions, have
been prepared in the light of the past business history of the Borrower and its
Subsidiaries and on the basis of the assumptions set forth therein, which
assumptions are in the opinion of the Borrower reasonable. The forecasts have
been prepared in good faith and represent the good faith opinion of the Borrower
as to the most probable course of business of the Borrower and its Subsidiaries
on the basis of the assumptions which are set forth therein.
4.20 Solvency. After giving effect to the transactions contemplated by
this Agreement, each of the Borrower and its Subsidiaries has capital sufficient
to carry on its business, is solvent and is able to pay its debts and
obligations as they mature in the ordinary course. After giving effect to the
consummation of the transactions contemplated by this Agreement, each of the
Borrower and its Subsidiaries now owns property having a value, both at fair
valuation and at present fair saleable value, greater than the amount required
to pay its debts, obligations and contingent liabilities.
4.21 No Default; No Material Adverse Occurrence. No Default or Event of
Default has occurred and is continuing. Since October 31, 2004, no Material
Adverse Occurrence has occurred and is continuing.
4.22 Subsidiary Guarantors; Security Documents. Each of the Wholly-Owned
Subsidiaries of the Borrower (except for any SPE, for so long as such SPE
remains a single purpose entity engaged solely in a Mortgage Transaction, and
except for Wholly-Owned Subsidiaries of the Borrower (other than any SPE) which
do not in the aggregate have assets in excess of $500,000) have executed the
Subsidiary Guaranty, the Security Agreement and such other Security Documents
which are necessary or desirable to grant to the Administrative Agent for the
benefit of the Banks, a security interest and Lien in substantially all of the
Property of such Subsidiary, including without limitation a Mortgage on any Real
Property owned by such Subsidiary, a Leasehold Mortgage relating to Real
Property (other than Excluded Property) with respect to which such Subsidiary is
a lessee under a ground lease and a Collateral Assignment of Lease with respect
to any other lease of Real Property (other than Excluded Property) by such
Subsidiary as lessee. The total assets of the Excluded Subsidiaries is less than
$500,000.
4.23 Collateral. The provisions of each of the Security Documents
constitute in favor of the Administrative Agent, for the benefit of the Banks, a
legal, valid and enforceable security interest in all right, title, and interest
of the Borrower and each of the Borrower's Subsidiaries which is a party to such
Security Document in the Collateral described in such Security Document. All
filings and other actions necessary or desirable to perfect and protect the
security interest in the Collateral created under the Security Documents have
been duly made or taken and are in full force and effect. The Security
Documents, together with such filings and other
45
actions, create in favor of the Administrative Agent, for the benefit of the
Banks, a perfected first priority security interest in the Collateral, securing
the payment of the Obligations, subject only to Liens permitted by Section 6.4
hereof. The Borrower and its Subsidiaries are the legal and beneficial owners of
the Collateral free and clear of any Lien, except for the liens and security
interests created or permitted under the Loan Documents.
4.24 Merger.
(a) The Borrower has heretofore furnished to each of the Banks a true and
correct copy of the Merger Agreement.
(b) The Borrower and Merger Corp. have duly taken all necessary
corporate, partnership or other organizational action to authorize the
execution, delivery and performance of the Merger Agreement and the consummation
of transactions contemplated thereby.
(c) The Merger complies with all applicable legal requirements. All
necessary governmental, regulatory, creditor, shareholder, partner and other
material consents, approvals and exemptions required to be obtained by the
Borrower and Merger Corp. in connection with the Merger have been duly obtained
and are in full force and effect. All applicable waiting periods with respect to
the Merger have expired without any action being taken by any competent
governmental authority which restrains, prevents or imposes material adverse
conditions upon the consummation of the Merger.
(d) The execution and delivery of the Merger Agreement, and the
consummation of the Merger, do not (i) violate any statute or regulation of the
United States (including any securities law) or of any state or other applicable
jurisdiction, or any order, judgment or decree of any court or governmental body
binding on the Borrower or Merger Corp., or (ii) result in a breach of, or
constitute a default under, any material agreement, indenture, instrument or
other document, or any judgment, order or decree, to which the Borrower or any
of its Subsidiaries is bound or to which Merger Corp. is a party or by which it
is bound.
(e) Merger Corp. was created solely for the purposes of effecting the
Merger and the transactions contemplated thereby. Immediately prior to the
consummation of the Merger, Merger Corp. was not engaged in any other activity
or business and the total liabilities of Merger Corp. did not exceed $1,500,000.
(f) The Merger has been consummated in accordance with the terms of the
Merger Agreement.
4.25 Affiliated Lease Agreements. The Affiliated Lease Agreements in
effect as of the date of this Agreement are disclosed on Annex VII hereto. Annex
VII accurately identifies (i) the Borrower or Subsidiary and the member of
Management and/or Affiliate thereof which has entered into each such Affiliated
Lease Agreement, (ii) if the party is an Affiliate of a member of Management,
such member of Management and the ownership interest of such member of
Management in such Affiliate, and (iii) the property locations which are subject
to such Affiliated Lease Agreement.
46
ARTICLE V.
CERTAIN AFFIRMATIVE COVENANTS
The Borrower agrees with the Administrative Agent and each of the Banks
that, from the date hereof and thereafter for so long as any portion of any
Loan, any Swing Loan or any Letter of Credit shall be outstanding or any Bank
shall have any Commitment hereunder, unless the Required Banks shall otherwise
consent in writing:
5.1 Financial Information; etc. The Borrower will furnish to the
Administrative Agent and each of the Banks copies of the following financial
statements, reports and information:
(a) 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 audited consolidated
financial statements, including balance sheet, related statements of income,
statements of stockholders' equity and statements of cash flows, of the Borrower
and its consolidated Subsidiaries for such fiscal year, with comparative figures
for the preceding fiscal year, prepared in accordance with GAAP, certified
without qualification or exception by PricewaterhouseCoopers LLP or such other
nationally or regionally recognized firm of independent public accountants which
are reasonably acceptable to the Administrative Agent and the Required Banks;
(b) as soon as available and in any event within forty-five (45) days
after the end of each of the first three (3) fiscal quarterly periods of each
fiscal year of the Borrower, consolidated statements of income, stockholders'
equity and cash flows of the Borrower and its consolidated Subsidiaries for such
period and for the period from the beginning of the respective fiscal year to
the end of such period, and the related consolidated balance sheets as at the
end of such period, setting forth in each case in comparative form the
corresponding consolidated figures for the corresponding period in the preceding
fiscal year, accompanied by a certificate of a senior financial officer of the
Borrower which shall state that said financial statements fairly present the
consolidated financial condition and results of operations of the Borrower and
its Subsidiaries in accordance with GAAP for such period;
(c) with each financial statement required by Section 5.1(a) and (b) to be
delivered to the Administrative Agent and each of the Banks, (i) a certificate
("Compliance Certificate") in a form acceptable to the Administrative Agent and
the Required Banks signed by the president, the executive vice president or the
chief financial officer of the Borrower (i) stating that, to the best of his
knowledge after reasonable investigation, no Default or Event of Default has
occurred and is continuing, or if a Default or an Event of Default has occurred
and is continuing, a statement of the nature thereof and the action which the
Borrower proposes to take with respect thereto, and (ii) setting forth, in
sufficient detail, the information and computations required to establish
whether or not the Borrower was in compliance with the requirements of Sections
6.1 through 6.3, inclusive, Section 6.12 and Section 6.17, during the periods
covered by the financial reports then being furnished and as of the end of such
periods;
(d) with each financial statement required by Section 5.1(a) to be
delivered to the Administrative Agent and each of the Banks for a fiscal year, a
separate written statement of the independent public accountant which certified
such financial statements that (i) such accountants
47
have obtained no knowledge of any Default or Event of Default having occurred
and continuing, or if such accountants have obtained knowledge of any such
Default or Event of Default, the accountants shall disclose such Defaults or
Events of Default and the nature thereof and (ii) that such accountants have
reviewed the Compliance Certificate to be delivered by the Borrower for and as
of the end of such fiscal year and found the calculations contained therein to
be accurate and in agreement with such financial statements;
(e) promptly upon their becoming available, copies of all registration
statements, reports (including without limitation any regular, periodic or
special reports) and proxy materials which the Borrower or any Subsidiary may
file with the Securities and Exchange Commission;
(f) promptly upon the furnishing thereof to the stockholders of the
Borrower, copies of all financial statements, reports and other materials
furnished to the stockholders which have not been previously provided to the
Administrative Agent and the Banks pursuant to clauses (a), (b) or (e) of this
Section 5.1;
(g) promptly after the Borrower knows or has reason to know that any
Default has occurred, a notice of such Default describing the same in reasonable
detail and a description of the action that the Borrower has taken and proposes
to take with respect thereto;
(h) promptly after receipt thereof, all letters and reports to management
of the Borrower prepared by its independent certified public accountants and the
responses of the management of the Borrower thereto;
(i) promptly following the commencement of any litigation, suit,
administrative proceeding or arbitration relating to the Borrower or any of its
Subsidiaries relating to the transactions contemplated by this Agreement or
which if adversely determined could result in a Material Adverse Occurrence, a
notice thereof describing the allegations of such litigation, suit,
administrative proceeding or arbitration and the Borrower's or such Subsidiary's
response thereto;
(j) promptly upon learning thereof, a notice of any "reportable event" or
"prohibited transaction" or the imposition of a withdrawal or termination
liability within the meaning of ERISA in connection with any Plan and, when
known, any action taken by the Internal Revenue Service, Department of Labor or
PBGC with respect thereto; and
(k) such other information with respect to the financial condition and
operations of the Borrower or any of its Subsidiaries as the Administrative
Agent or any Bank may reasonably request.
5.2 Maintenance of Corporate Existence; etc. Except as permitted by
Section 6.7, the Borrower shall maintain and preserve, and cause each of its
Subsidiaries to maintain and preserve, its corporate existence and qualification
and good standing in all states in which such qualification and good standing
are required in order to conduct its business and own its property as conducted
and owned in such states.
5.3 Payment of Taxes; etc. The Borrower shall pay and discharge, and shall
cause each of its Subsidiaries to pay and discharge, as the same may become due
and payable, all taxes,
48
assessments and other governmental charges or levies against or on any of its
Property, as well as claims of any kind which, if unpaid, might become a Lien
upon any of its Property; provided, however, that the foregoing shall not
require the Borrower or any of its Subsidiaries to pay any such tax, assessment,
charge or levy so long as the validity thereof shall be contested in good faith
by appropriate proceedings that will prevent a forfeiture or sale of any
Property and an adequate book reserve in accordance with GAAP shall have been
set aside with respect thereto. The Borrower shall make, and shall cause each of
its Subsidiaries to make, all required withholding deposits.
5.4 Compliance with Laws. The Borrower shall carry on, and shall cause
each of its Subsidiaries to carry on, its business activities in substantial
compliance with all applicable federal or state laws and all applicable rules,
regulations and orders of all governmental bodies and offices having power to
regulate or supervise its business activities, including, without limitation,
all applicable environmental, pollution control, health and safety statutes,
laws and regulations. The Borrower shall maintain, and shall cause each of its
Subsidiaries to maintain, all material rights, liens, franchises, permits,
certificates of compliance or grants of authority required in the conduct of its
business. The Borrower agrees that the Real Property owned or leased by the
Borrower and/or any of its Subsidiaries and its intended use will comply at all
times with all applicable laws, governmental regulations and the terms of any
enforcement action now or hereafter commenced by any federal, state, regional or
local governmental agency, including, without limitation, all applicable
federal, state and local laws pertaining to air and water quality, hazardous
waste, waste disposal and other environmental matters (including, but not
limited to, the Clean Water, Clean Air, Federal Water Pollution Control, Solid
Waste Disposal, Resource Conservation and Recovery and Comprehensive
Environmental Response, Compensation, and Liability Acts, as said acts may be
amended from time to time), and the rules, regulations and ordinances of all
applicable federal, state and local agencies and bureaus.
5.5 Books and Records; etc. The Borrower shall keep, and shall cause each
of its Subsidiaries to keep, books and records reflecting all of its business
affairs and transactions in accordance with GAAP and permit the Administrative
Agent and each of the Banks and their respective representatives, at reasonable
times and intervals and upon reasonable notice to the Borrower, to visit the
offices of the Borrower and its Subsidiaries, discuss financial matters with
officers of the Borrower or its Subsidiaries and with its independent public
accountants (and by this provision the Borrower authorizes its independent
public accountants to participate in such discussions) and examine the
Borrower's or any of its Subsidiaries' books and other corporate records.
5.6 Insurance. The Borrower will maintain, and will cause each of its
Subsidiaries to maintain, insurance coverage in such forms and amounts and
against such risks including without limitation insurance with respect to its
Property, the operation thereof and its business against casualties,
contingencies and risks and insurance against loss or damage from such hazard
and risks to the person or property of others, as are customary for corporations
similarly situated and engaged in the same or a similar business and owning and
operating similar properties. All such insurance shall be carried with
financially sound and reputable insurers.
5.7 Conduct of Business. The Borrower shall maintain and keep, and shall
cause each of its Subsidiaries to maintain and keep, its assets, Property and
equipment in good repair,
49
working order and condition and from time to time make or cause to be made all
needed renewals, replacements and repairs.
5.8 Maintain Business. The Borrower shall continue to engage primarily,
and shall cause each of its Subsidiaries to continue to engage primarily, in the
business or businesses being conducted on the date of this Agreement.
5.9 ERISA.
(a) The Borrower agrees that all assumptions and methods used to determine
the actuarial valuation of employee benefits, both vested and unvested, under
any Plan, and each such Plan, will comply in all material respects with ERISA
and other applicable laws.
(b) The Borrower will not at any time permit any Plan to:
(i) engage in any "prohibited transaction" as such term is defined
in Section 4975 of the Code or in Section 406 of ERISA;
(ii) incur any "accumulated funding deficiency" as such term is
defined in Section 302 of ERISA, whether or not waived; or
(iii) be terminated under circumstances which are likely to result
in the imposition of a lien on the property of the Borrower or any of its
Subsidiaries pursuant to Section 4068 of ERISA, if and to the extent such
termination is within the control of the Borrower;
if the event or condition described in (i), (ii) or (iii) above is likely to
subject the Borrower or any Subsidiary or ERISA Affiliate to a Material Adverse
Occurrence.
(c) Upon the request of the Administrative Agent or any Bank, the Borrower
will furnish a copy of the annual report of each Plan (Form 5500) required to be
filed with the Internal Revenue Service. Copies of annual reports shall be
delivered no later than thirty (30) days after the date the copy is requested.
5.10 Changes to GAAP. In the event that the Borrower makes any changes to
the generally accepted accounting principles used in the preparation of its
books and/or financial statements such that such principles are not applied
consistently with any such principles applied during any prior period, (a) such
change shall be in accordance with the generally accepted accounting principles
in effect at the time of such change and shall be concurred in by the certified
public accountants certifying the financial statements of the Borrower and its
Subsidiaries, and (b) the Borrower shall give the Administrative Agent thirty
(30) days prior written notice thereof. The Administrative Agent is hereby
authorized, in consultation with the Borrower, to adjust the financial covenants
of this Agreement to reflect the effect of such changes.
5.11 Use of Proceeds. The Borrower will use the proceeds of the Loans and
Swing Loans only for lawful purposes and in accordance with Sections 4.11 and
4.12 hereof.
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5.12 Subsidiary Guaranty. The Borrower hereby agrees to cause each Person
which is or may hereafter become a Wholly-Owned Subsidiary of the Borrower
(other than (i) SPEs and (ii) Wholly-Owned Subsidiaries of the Borrower (other
than SPEs) which in the aggregate have assets of less than $500,000) to execute,
deliver and perform the Subsidiary Guaranty. At the time that any Wholly-Owned
Subsidiary becomes a party to the Subsidiary Guaranty, the Borrower shall
deliver to the Administrative Agent copies (in sufficient number for each of the
Banks to receive a copy) of each of the following documents in form and
substance reasonably satisfactory to the Administrative Agent:
(a) Counterpart signature page to the Subsidiary Guaranty, duly executed
by such Subsidiary;
(b) A copy of the articles of incorporation (or similar charter
document), including all amendments thereto, of such Subsidiary, certified by
the Secretary of State of the state of its incorporation or organization;
(c) A copy of (i) the By-laws (or similar charter document) of such
Subsidiary and (ii) the resolutions of the Board of Directors (or other
governing body) and of the shareholders, partners, members or other owners (if
required) of such Subsidiary authorizing the execution, delivery and performance
of the Subsidiary Guaranty, each certified as true and complete by the secretary
or assistant secretary of such Subsidiary;
(d) An incumbency certificate executed by the secretary or assistant
secretary of such Subsidiary, certifying the names of the officers authorized to
execute the Subsidiary Guaranty, together with a sample of the true signatures
of such officers;
(e) Certificates of good standing (or the substantial equivalent thereof)
for such Subsidiary certified by the Secretaries of State of the state of its
incorporation or organization and each other state in which it is required to be
qualified; and
(f) a favorable opinion of counsel to such Subsidiary in form and
substance reasonably satisfactory to the Administrative Agent.
5.13 Security Documents.
(a) If at any time the Borrower or any Subsidiary owns, acquires an
ownership interest in or creates an entity which is or becomes a Subsidiary (the
"Target Subsidiary"), the Borrower shall, or shall cause its Subsidiary to, take
all such action and execute such agreements, documents and instruments,
including without limitation execution and delivery of a counterpart signature
page in the form of Annex I to the Pledge Agreement and Annex I to the Security
Agreement and execution and delivery of such other Security Documents, that may
be necessary or desirable to grant to the Administrative Agent, for the benefit
of the Banks, a first priority, perfected security interest and Lien in all of
the assets of and all of the capital stock of such Target Subsidiary. If at any
time the Borrower or any Subsidiary owns or acquires an interest in any assets
not covered by the Security Documents then in effect, the Borrower shall, or
shall cause such Subsidiary to, take all such action and execute such
agreements, documents and instruments, including without limitation any Security
Documents, that may be necessary or desirable to grant to the Administrative
Agent for the benefit of the Banks, a first priority,
51
perfected security interest in such assets. With respect to any fee interest in
any real property acquired or ground lease in respect of any real property
leased after the date of this Agreement by the Borrower or any Subsidiary, the
Borrower shall, or shall cause its Subsidiary to, promptly execute and deliver a
first priority Mortgage or Leasehold Mortgage, as applicable, in favor of the
Administrative Agent, for the benefit of the Banks, covering such real property,
and shall provide the Administrative Agent with the following documents (w) a
mortgagee's title insurance policy covering such real property, (x) an ALTA
survey thereof, together with a surveyor's certificate, (y) to the extent
reasonably available to the Borrower, an environmental audit report covering
such real property and (z) with respect to any real property subject to a ground
lease, any consents or estoppels reasonably deemed necessary or advisable by the
Administrative Agent in connection therewith which the Borrower and its
Subsidiaries are able to obtain using commercially reasonable efforts. With
respect to any leasehold interest in real property acquired by the Borrower or
any Subsidiary, such Borrower shall, or shall cause such Subsidiary to, promptly
execute and deliver a Collateral Assignment of Lease with respect to such real
property, together with any consents or estoppels reasonably deemed necessary or
advisable by the Administrative Agent in connection therewith which the Borrower
and its Subsidiaries are able to obtain using commercially reasonable efforts.
Notwithstanding the foregoing, (i) the Borrower shall not be required to, or be
required to cause its Subsidiaries to, pledge the assets or capital stock of any
Subsidiary if the Borrower and/or any of its Subsidiaries is subject to any
effective and enforceable contractual obligation entered into in good faith in
the ordinary course of business of the Borrower or such Subsidiary which
prohibits the pledge of the assets or capital stock of such Subsidiary pursuant
to the Pledge Agreement or the Security Agreement; provided that the Borrower
and/or its Subsidiaries shall use reasonable efforts to obtain any necessary
waivers, consents or amendments to permit such pledge or to obtain reasonably
equivalent security and (ii) the Borrower and its Subsidiaries shall not be
obligated to pledge the assets or capital stock of a Subsidiary, provided that
the aggregate value of the assets (other than Excluded Property) and the capital
stock of the Subsidiaries (other than SPEs) that have not been pledged to the
Administrative Agent for the benefit of the Banks shall not at any time exceed
$500,000. Notwithstanding the foregoing, for so long as any SPE remains a single
purpose entity engaged solely in a Mortgage Transaction, such SPE shall not be
required to execute, deliver and perform any Security Documents. For purposes of
this Section 5.13, however, at such time that any Subsidiary which qualified as
an SPE on the date of this Agreement no longer is deemed to be an SPE or any
Subsidiary becomes a Subsidiary Guarantor pursuant to Section 5.12 hereof, any
fee interest in real property owned or held by such Subsidiary shall be deemed
to be acquired, and any ground lease or other lease in respect of real property
leased to such Subsidiary shall be deemed to be entered into, at the time that
such Subsidiary ceases to qualify as an SPE and/or becomes a Subsidiary
Guarantor.
(b) At the time that the Borrower or any Subsidiary or Affiliate thereof
becomes a party to a Security Document, the Borrower shall deliver to the
Administrative Agent copies (in sufficient number for each of the Banks to
receive a copy) of each of the following documents in form and substance
reasonably satisfactory to the Administrative Agent:
(i) (A) Counterpart signature page to the Pledge Agreement, duly
executed by the Borrower or such Subsidiary, (B) counterpart signature page to
the Security Agreement, duly executed by the applicable Pledgor and/or (C) such
other Security Document, duly executed by the parties thereto, as applicable;
52
(ii) A certificate of the secretary or assistant secretary of such
Pledgor, certifying that (A) (x) there have been no changes to its Articles of
Incorporation and By-laws (or similar documents) of such Pledgor since the date
of certification thereof to the Banks pursuant to this Agreement or (y) a
correct and complete copy of its Articles of Incorporation (certified by the
Secretary of State of organization) and By-laws (or similar documents) of such
Pledgor is attached to the certificate and (B) a correct and complete copy of
the resolutions of its Board of Directors (or other governing body) and of the
shareholders, partners, members of other owners (if required) of such Pledgor,
authorizing the execution, delivery and performance of each such Security
Document, is attached to the certificate;
(iii) An incumbency certificate executed by the secretary or
assistant secretary of each Pledgor, certifying the names of the officers
authorized to execute each such Security Document, together with a sample of the
true signatures of such officers;
(iv) A favorable opinion of counsel to each Pledgor in form and
substance reasonably satisfactory to the Administrative Agent; provided that in
connection with the execution and delivery of a Mortgage or Leasehold Mortgage
by a Subsidiary, an opinion of counsel, licensed to practice in the state in
which the real property subject to such Mortgage or Leasehold Mortgage is
located, as to the proper form and enforceability of such Mortgage or Leasehold
Mortgage will not be required, so long as (i) the value (at the greater of book
value and fair market value) of such Subsidiary's assets located at such
location is less than $3,000,000, (ii) the form of mortgage or leasehold
mortgage executed and delivered by such Subsidiary is in substantially the same
form as a mortgage or leasehold mortgage, as applicable, previously delivered by
the Borrower or a Subsidiary in respect of real property located in such state
for which an opinion of local counsel in form and substance reasonably
acceptable to the Administrative Agent was delivered to the Administrative Agent
and the Banks, and (iii) the Borrower and such Subsidiary are not aware of any
change in law which would adversely affect the enforceability of a mortgage or
leasehold mortgage in such form or the rights of the Administrative Agent and
the Banks thereunder.
(v) Delivery of stock certificates, stock powers, irrevocable
proxies, instructions or other instruments or documents required to be delivered
pursuant to the applicable Security Document; and
(vi) UCC-1 Financing Statements in form acceptable to the
Administrative Agent appropriately completed and filed in all places that the
Administrative Agent, in its sole judgment, deems necessary or desirable.
5.14 Survival of Warranties and Representations. The Borrower covenants,
warrants and represents to the Administrative Agent and each Bank that all
representations and warranties of the Borrower contained in this Agreement and
in the other Loan Documents shall be true at the time of Borrower's execution of
this Agreement and shall survive the execution, delivery and acceptance hereof
and thereof by the parties thereto and the closing of the transactions described
herein and therein or related hereto and thereto and any investigation at any
time made by or on behalf of the Administrative Agent or any of the Banks shall
not diminish their rights to rely thereon.
53
ARTICLE VI.
CERTAIN FINANCIAL COVENANTS AND NEGATIVE COVENANTS
The Borrower agrees with the Administrative Agent and each of the Banks
that, from the date hereof and thereafter for so long as any Loan, any Swing
Loan or any Letter of Credit shall be outstanding or any Bank shall have any
Commitment hereunder, unless the Required Banks shall otherwise consent in
writing:
6.1 Fixed Charge Coverage Ratio. (a) As of the last day of each fiscal
quarter of the Borrower, the Borrower shall maintain a Fixed Charge Coverage
Ratio of not less than 1.20:1.00.
(b) The Borrower will not, and will not permit any of its Subsidiaries to,
enter into any Operating Lease if after giving effect thereto on a pro forma
basis the Fixed Charge Coverage Ratio would be less than 1.20:1.00.
6.2 Indebtedness Ratio. As of the last day of each fiscal quarter of the
Borrower, the Borrower shall maintain an Indebtedness Ratio of not more than the
ratio set forth below:
Maximum Ratio of Funded Debt to
Applicable Fiscal Quarter Pro Forma Consolidated Cash Flow
---------------------------------------------------- --------------------------------
Second fiscal quarter of 2005 fiscal year 4.50:1.00
Third and fourth fiscal quarters of 2005 fiscal year 4.00:1.00
First and second fiscal quarters of 2006 fiscal year 3.75:1.00
Third and fourth fiscal quarters of 2006 fiscal year 3.50:1.00
Each fiscal quarter of 2007 fiscal year 3.00:1.00
Each fiscal quarter of 2008 fiscal year 2.50:1.00
Each fiscal quarter thereafter 2.00:1.00
6.3 Limitations on Indebtedness. The Borrower will not, and will not
permit any of its Subsidiaries to, create, issue, guarantee or otherwise become
liable in respect of any Indebtedness, except:
(a) Indebtedness existing on the date hereof and disclosed on Annex III
hereto;
(b) The Loans, the Swing Loans or any other Indebtedness outstanding under
any Loan Document;
(c) Capital Lease Obligations incurred after the date of this Agreement,
provided that after taking into account the incurrence of such Capital Lease
Obligations, (x) the aggregate outstanding Capital Lease Obligations incurred
pursuant to this clause (c) shall not exceed $5,000,000 and (y) no Default or
Event of Default shall exist;
(d) Indebtedness owing to the Borrower or any of its Wholly-Owned
Subsidiaries (other than any SPE);
(e) Rate Hedging Obligations permitted by Section 6.15 hereof;
54
(f) Replacement Mortgage Transactions, provided that any proceeds
therefrom in excess of the principal amount of the Mortgage Transaction being
refinanced shall be applied to repay the Terms Loans in accordance with Section
2.4(c)(iii) hereof;
(g) Buy-Out Notes issued in accordance with the terms of the Shareholders
Agreement as in effect on the date of this Agreement; provided that any payments
of principal of, interest on or other amounts in respect of such Buy-Outs are in
accordance with the provisions of Section 6.5 hereof; and
(h) Indebtedness, in addition to Indebtedness permitted by clauses (a)
through (g) above, in an aggregate principal amount at any one time outstanding
not to exceed $1,000,000, which Indebtedness shall not be secured by a Lien on
any Property of the Borrower or its Subsidiaries.
6.4 Liens. The Borrower will not, and will not permit any of its
Subsidiaries to, create, incur or permit to exist any Lien on its Property,
whether now owned or hereafter acquired, or upon any income or profits
therefrom, or own or acquire or agree to acquire Property of any kind subject to
any Lien, except the following:
(a) Liens securing taxes, assessments or governmental charges or levies or
the claims or demands of contractors, materialmen, mechanics, carriers,
warehousemen, landlords and other like Persons, provided the payment thereof is
not at the time required by Section 5.3 hereof;
(b) Liens incurred or deposits made in the ordinary course of business (A)
in connection with workmen's compensation, unemployment insurance, social
security and other like laws or (B) to secure the performance of letters of
credit, bids, tenders, sales contracts, leases, statutory obligations, surety,
appeal and performance bonds and other similar obligations not incurred in
connection with the borrowing of money, the obtaining of advances or the payment
of the deferred purchase price of Property;
(c) attachments, judgment and other similar Liens arising in connection
with court proceedings, provided the execution or other enforcement of such
Liens is effectively stayed and the claims secured thereby are being actively
contested in good faith and by appropriate proceedings in such manner as not to
have the Property subject to such Liens forfeitable;
(d) easements, rights-of-ways, reservations, exceptions, minor
encroachments, restrictions and similar charges on Real Property created or
incurred in the ordinary course of business, which in the aggregate do not
materially interfere with the business operations of the Borrower or any of its
Subsidiaries;
(e) Liens existing on the date hereof and disclosed on Annex III hereto;
(f) Liens securing Capital Lease Obligations permitted pursuant to Section
6.3(c) hereof;
(g) Liens in favor of the Borrower or a Subsidiary Guarantor; and
(h) Liens in favor of the Administrative Agent for the benefit of the
Banks.
55
For purposes of this Section 6.4, all Liens of a Person which becomes a
Subsidiary and which are outstanding as of the date such Person becomes a
Subsidiary shall be deemed to have been incurred as of such date.
6.5 Dividends, Stock Purchase and Restricted Payments. The Borrower will,
and will not permit any of its Subsidiaries to, except as hereinafter provided:
(a) declare or pay any dividends, either in cash or Property, on any shares of
its capital stock of any class (except dividends payable by the Borrower solely
in shares of common stock of the Borrower and dividends payable solely to the
Borrower or a Wholly-Owned Subsidiary of the Borrower, other than any SPE); or
(b) directly or indirectly, or through any Subsidiary, purchase, redeem, retire,
or otherwise acquire any shares of its capital stock, or other equity interests
therein, of any class or any warrants, rights or options to purchase or acquire
any shares of its capital stock, or other equity interests therein (except for
any such purchases, redemptions, retirements or other acquisitions payable
solely in shares of common stock of the Borrower); (c) make any other
distribution, either directly or indirectly or through any Subsidiary, in
respect of its capital stock, or other equity interests therein; or (d) make any
payments, directly or indirectly, of principal of, interest on or pay any other
amounts in respect of Buy-Out Notes (such declarations or payments of dividends,
purchases, redemptions or retirements of stock and warrants, rights or options,
and all such other distributions and payments in respect of Buy-Out Notes
described in clauses (a) - (d) above being herein collectively called
"Restricted Payments"); provided that, notwithstanding the foregoing, the
Borrower may (1) declare and pay dividends payable in cash, (2) make payments in
respect of any Buy-Out Note issued pursuant to Section 6.3(g) hereof, and/or (3)
make any other payments under or pursuant to the Shareholders Agreement, if (i)
after giving effect thereto, the aggregate cumulative amount of all Restricted
Payments made in any fiscal year does not exceed the then applicable Maximum
Restricted Payment Amount, (ii) after giving effect thereto, the aggregate
cumulative amount of all Restricted Payments on and after the Effective Date
does not exceed the Restricted Payments Basket, (iii) as of the date of payment
of such Restricted Payment the Indebtedness Ratio, after giving effect to such
Restricted Payment (and any Indebtedness incurred in connection therewith), is
less than the greater of (x) the Indebtedness Ratio requirement set forth in
Section 6.2 hereof applicable as of the date of such Restricted Payment, less
0.25, and (y) 3.0 to 1.0 and (iv) at the time of payment of such Restricted
Payment no Default or Event of Default exists and, after giving effect to such
Restricted Payment, no Default or Event of Default would exist.
For purposes of this Section 6.5, the amount of any Restricted Payment
which is payable or distributable in Property other than cash or shares of
capital stock of the Borrower shall be deemed to be the fair market value (as
determined in good faith by the Board of Directors of the Borrower) of such
Property as of the date of the payment of such Restricted Payment.
Notwithstanding the foregoing, the issuance of a Buy-Out Note pursuant to the
terms of the Shareholders Agreement shall not constitute a Restricted Payment;
provided, however, that any principal of, interest on and other amounts which is
paid, directly or indirectly, by the Borrower in respect of any Buy-Out Note
shall constitute a Restricted Payment as provided in clause (d) of the preceding
paragraph.
6.6 Sales of Assets. The Borrower shall not, and shall not permit any of
its Subsidiaries to, sell, lease, transfer or otherwise dispose of assets
(including without limitation the capital stock of any Subsidiary), other than
Permitted Dispositions.
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6.7 Mergers and Consolidations. The Borrower shall not, and shall not
permit any of its Subsidiaries to, consolidate with or merge into any other
Person or permit any other Person to consolidate with or merge into it (except
that a Subsidiary may consolidate with or merge into the Borrower or a
Wholly-Owned Subsidiary of the Borrower, other than any SPE); provided that the
foregoing restriction does not apply to the merger or consolidation of the
Borrower with another corporation if:
(i) the corporation which results from such merger or
consolidation (the "surviving corporation") is organized under the laws of the
United States of America or a jurisdiction thereof;
(ii) the due and punctual payment of the principal of and premium,
if any, and interest on the Loans, according to their tenor, and the due and
punctual performance and observance of all of the covenants in this Agreement to
be performed or observed by the Borrower, are expressly assumed in writing by
the surviving corporation; and
(iii) immediately after the consummation of the transaction and
after giving effect thereto, no condition or event shall exist which constitutes
a Default, an Event of Default or a Change of Control.
6.8 Preferred Stock of Subsidiaries. The Borrower will not permit any
Subsidiary to issue Preferred Stock, any security convertible into Preferred
Stock or options, warrants or rights to purchase Preferred Stock of any
Subsidiary except shares held by the Borrower or a Wholly-Owned Subsidiary of
the Borrower (other than any SPE) and shares of Preferred Stock held by others
at the time such Subsidiary becomes a Subsidiary of the Borrower, provided that
such shares of Preferred Stock are not issued or transferred by the Borrower or
any Subsidiary to others in contemplation of, or in connection with, such
Subsidiary becoming a Subsidiary.
6.9 Disposition of Securities of a Subsidiary. The Borrower will not, and
will not permit any of its Subsidiaries to, sell or otherwise dispose of any
shares of the stock or other equity interests therein (or any options or
warrants to purchase stock or other equity interests therein or other securities
convertible or exchangeable therefor) of a Subsidiary (said stock, options,
warrants and other securities herein called "Subsidiary Stock"), nor will the
Borrower permit any of its Subsidiaries to issue, sell or otherwise dispose of
any shares of its own Subsidiary Stock, if the effect of the transaction would
be to reduce the proportionate interest of the Borrower and its other
Wholly-Owned Subsidiaries (other than SPEs) in the outstanding Subsidiary Stock
of the Subsidiary whose shares are the subject of the transaction; provided that
the foregoing restrictions shall not apply to:
(a) the issue of directors' qualifying shares; or
(b) the sale for cash consideration to a Person in a single transaction
(other than directly or indirectly to an Affiliate) of the entire investment
(whether represented by stock, debt, claims or otherwise) of the Borrower and
its other Subsidiaries in any Subsidiary, if all of the following conditions are
met:
(i) the sale or other disposition of the assets by the Borrower
and its other Subsidiaries is permitted by Section 6.6;
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(ii) in the opinion of the Borrower's Board of Directors (as
evidenced by a resolution of such Board of Directors), the sale is for
fair value and is in the best interests of the Borrower;
(iii) the Subsidiary being disposed of has no continuing investment
in any other Subsidiary not being simultaneously disposed of or in the
Borrower; and
(iv) immediately after the consummation of the transaction and after
giving effect thereto, no condition or event shall exist which constitutes
a Default or an Event of Default.
Notwithstanding the foregoing, neither the Borrower nor any Subsidiary may
dispose of any Subsidiary Stock to any SPE.
6.10 Investments. The Borrower will not, and will not permit any of its
Subsidiaries to, make or permit to exist any Investment other than Permitted
Investments.
6.11 Transactions with Affiliates. (a) The Borrower will not, and will not
permit any of its Subsidiaries to, enter into any material transaction
(including, without limitation, the purchase, sale or exchange of Property, the
rendering of any service, the making of any material investment in an Affiliate
or the repayment of any indebtedness owed to an Affiliate) with an Affiliate
(other than the Borrower or a Subsidiary Guarantor (other than Xxxxx'x Inc.)),
except in the ordinary course of business and pursuant to the reasonable
requirements of the Borrower's or such Subsidiary's business, upon terms which
are fair and reasonable to the Borrower or such Subsidiary and which are not
less favorable to the Borrower or such Subsidiary than would be obtained in a
comparable transaction with a Person not an Affiliate.
(b) The Borrower will not, and will not permit any of its Subsidiaries to
(i) enter into any Affiliated Lease Agreement, except for any Affiliated Lease
Agreement on terms (x) substantially similar to the terms of the Affiliated
Lease Agreements existing on the date of this Agreement and (y) on terms no less
favorable to the Borrower or such Subsidiary than would be obtainable in a
comparable transaction with an unaffiliated third party; or (ii) amend, modify
or grant a waiver under any Affiliated Lease Agreement in any respect without
the prior written consent of the Required Banks.
6.12 Capital Expenditures. (a) The Borrower will not, and will not permit
any of its Subsidiaries to, expend or contract to expend any amount for Capital
Expenditures during any fiscal year if as a result thereof the Consolidated
Capital Expenditures for such fiscal year shall exceed (i) the amount specified
below opposite such fiscal year (the "Maximum Consolidated Capital
Expenditures") plus (ii) the aggregate amount, if positive, of the Maximum
Consolidated Capital Expenditures set forth below for each of the preceding
fiscal years, commencing with fiscal year 2005, on a cumulative basis, less the
actual aggregate amount of Consolidated Capital Expenditures made in such prior
fiscal years, on a cumulative basis:
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Maximum Consolidated Capital
Fiscal Year Expenditures
--------------------------- ----------------------------
2005 $9,250,000
2006 $4,500,000
Each fiscal year thereafter $3,500,000
Notwithstanding the foregoing, at any time after fiscal year 2005 that (i) for
two consecutive fiscal quarters the Indebtedness Ratio is less than 3.50:1.00
and (ii) the Indebtedness Ratio requirement set forth in Section 6.2 of this
Agreement applicable at such time is less than 4.00:1.00 (by way of example, in
accordance with the provisions of Section 6.2 of this Agreement as in effect on
the date of this Agreement, this provision would be satisfied for fiscal
quarters ending after the 2005 fiscal year of the Borrower), the Maximum
Consolidated Capital Expenditures for such fiscal year shall be $7,500,000.
(b) In addition to the foregoing, the Borrower may make additional
Capital Expenditures at any time or from time to time during the 2005 Fiscal
Year in an aggregate amount equal to the lesser of (i) $1,000,000 and (ii) the
Additional Equity Contribution.
6.13 Acquisitions. The Borrower will not, and will not permit any of its
Subsidiaries to, make any Acquisitions, other than an Acquisition relating to
the operation and development of Burger King restaurants and/or Chili's Grill
and Bar restaurants.
6.14 SPE. No SPE shall engage in any activity or conduct any business
other than a Mortgage Transaction.
6.15 Rate Hedging Obligations. The Borrower will not, and will not permit
any of its Subsidiaries to, create, incur, guarantee or otherwise become liable
on or in respect of any Rate Hedging Obligations, except for any such Rate
Hedging Obligations entered into on commercially reasonable terms with a
commercial or investment bank or other financial institution in the ordinary
course of business and not for speculative purposes.
6.16 Franchise Agreements. The Borrower will not, and will not permit any
of its Subsidiaries to, terminate or agree to terminate any Franchise Agreement
to which such Person is a party, or amend, modify or grant a waiver of any
material provision of any such Franchise Agreement, if such termination,
amendment, modification or waiver could result in a Material Adverse Occurrence.
6.17 Management Compensation.
(a) The Borrower will not, and will not permit any of its Subsidiaries
to, pay or become obligated to pay to the Executive Officers any amounts in
respect of salaries or other compensation, including without limitation bonuses,
pensions and profit sharing payments, whether in cash or other Property (other
than common stock of the Borrower), if the aggregate amount of all such
compensation paid or payable by the Borrower and its Subsidiaries to the
Executive Officers in any fiscal year would exceed the amount set forth below
opposite the applicable fiscal year:
59
Fiscal Year Maximum Compensation
------------------- --------------------
2005 $2,300,000
2006 $2,250,000
2007 $2,350,000
2008 $2,450,000
2009 and thereafter $2,600,000
Notwithstanding the foregoing, at such time that the Indebtedness Ratio is less
than 3.00:1.00 for two consecutive quarters and thereafter, the provisions of
this Section 6.17(a) shall no longer be applicable.
(b) The Borrower will not, and will not permit any of its Subsidiaries to,
(i) make any loans to any members of Management of the Borrower or any
Subsidiary, except for (x) advances for travel expenses to the Borrower's or a
Subsidiary's officers, directors or employees in the ordinary course of
business; or (y) loans to employees of the Borrower and its Subsidiaries in an
aggregate amount at any time outstanding not to exceed $500,000; (ii) issue any
Guarantee for the benefit of any member of Management of the Borrower or of any
Subsidiary or for the benefit of any Affiliate thereof; or (iii) pay any
consulting or similar fees to any members of Management of the Borrower or any
Subsidiary or to any Affiliate thereof, whether for services rendered to the
Borrower or otherwise, in an aggregate amount during any fiscal year of more
than $100,000, provided, however, that any payments in respect of, and in
accordance with the terms of, the Affiliated Lease Agreements, as in effect on
the date of this Agreement and as amended, or as entered into, in accordance
with the provisions of Section 6.11(b) hereof, shall not be restricted by this
Section 6.17(b)(ii).
ARTICLE VII.
EVENTS OF DEFAULT
7.1 Events of Default. The term "Event of Default" shall mean any of the
following events:
(a) A default in the payment when due of the principal of the Notes;
(b) A default in the payment when due of any interest on the Notes or of
fees under this Agreement and such default shall continue unremedied for five
(5) days;
(c) A default in the due performance and observance of any of the
covenants contained in Sections 5.2, 5.6, 6.1 through 6.17, inclusive;
(d) A default (other than those defaults described in other subsections of
this Section 7.1) by the Borrower in the due performance and observance of any
of the covenants contained in this Agreement and such default shall continue
unremedied for a period of thirty (30) days after notice from the Administrative
Agent or any Bank to the Borrower thereof;
(e) A default by the Borrower or any of its Subsidiaries on any
Indebtedness or any event shall occur or any condition shall exist in respect of
any Indebtedness of the Borrower or such Subsidiary, or under any agreement
securing or relating to such Indebtedness, the effect of
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which is (i) to result in the failure to pay when due $500,000 or more in
aggregate principal amount of such Indebtedness or (ii) to cause or permit any
holder of such Indebtedness or a trustee to cause $500,000 or more in aggregate
principal amount of such Indebtedness to become due, or subject to repurchase,
prepayment or redemption, prior to its stated maturity or prior to its regularly
scheduled dates of payment;
(f) An involuntary case under any applicable federal or state bankruptcy
laws shall be commenced against the Borrower or any of its Subsidiaries and the
petition shall not be dismissed, stayed, bonded or discharged within sixty (60)
days after the commencement of the case; the entry of a decree or order by a
court having jurisdiction in the premises in respect of the Borrower or any of
its Subsidiaries under the federal bankruptcy laws, as now or hereafter
constituted, or any other applicable federal or state bankruptcy, insolvency or
other similar law; or the entry of a decree or order by a court having
jurisdiction in the premises appointing a receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Borrower or any of its
Subsidiaries or of any substantial part of the property of the Borrower or any
of its Subsidiaries, or ordering the winding up or liquidation of its affairs,
and the continuance of any such decree or order unstayed and in effect for a
period of sixty (60) consecutive days;
(g) The commencement by the Borrower or any of its Subsidiaries of a
voluntary case under the federal bankruptcy laws, as now or hereafter
constituted, or any other applicable federal or state bankruptcy, insolvency or
other similar law or the consent by it to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator or other similar official of the
Borrower or any of its Subsidiaries or of any substantial part of the property
of the Borrower or any of its Subsidiaries, or the making by it of an assignment
for the benefit of creditors, or the failure by the Borrower or any of its
Subsidiaries to pay its debts generally as they become due, or the taking of any
action by the Borrower or any of its Subsidiaries in furtherance thereof;
(h) Any judgments, writs, warrants of attachment, executions or similar
process (to the extent not covered by insurance as to which the relevant
insurance company has acknowledged coverage) shall be issued or levied against
the Borrower or any of its Subsidiaries or any of the assets of the Borrower or
any of its Subsidiaries where the amount of such judgments, writs, warrants of
attachment, executions or similar process exceeds $500,000 in the aggregate and
where such judgments, writs, warrants of attachment, executions or similar
process are not discharged, released, vacated, suspended, stayed, abated or
fully bonded prior to any sale and in any event within thirty (30) days after
its issue or levy;
(i) Any representation or warranty set forth in this Agreement or any
other Loan Document shall be untrue in any material respect on the date as of
which the facts set forth are stated or certified, or deemed stated or
certified;
(j) Default shall occur in the observance or performance by any Subsidiary
of any provision, covenant or agreement of the Subsidiary Guaranty;
(k) The Subsidiary Guaranty shall cease to be in full force and effect or
any Subsidiary shall so state in writing;
(l) A Change of Control shall occur;
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(m) Any Security Document shall cease to be in full force and effect or
any Pledgor shall so state in writing; or the Administrative Agent, for the
benefit of the Banks, shall cease to have a first priority, perfected security
interest on all or any portion of the collateral subject or purported to be
subject to any Security Document; or
(n) The Personal Guaranty shall cease to be in full force and effect or
Xxxxxx X. Xxxxxxxxxxx, or his executors, heirs, devisees or legal
representatives, shall so state in writing; or Xxxxxx X. Xxxxxxxxxxx, or his
executors, heirs, devisees or legal representatives, shall fail to perform and
comply in all respects with the covenants and agreements contained in the
Personal Guaranty.
7.2 Action If Event of Default. If an Event of Default described in
Section 7.1(f) or (g) shall occur, the full unpaid principal amount of the Notes
and all other amounts due and owing hereunder shall automatically be due and
payable without any declaration, notice, presentment, protest or demand of any
kind (all of which are hereby waived) and the obligation of the Banks to make
Loans or Swing Loans or to issue Letters of Credit shall automatically
terminate. If any other Event of Default shall occur and be continuing, the
Required Banks, upon written notice to the Borrower, may terminate the Banks'
obligation to make Loans, LaSalle's obligation to make Swing Loans and the
Issuing Bank's obligation to issue Letters of Credit and may declare the
outstanding principal amount of the Notes and all other amounts due and owing
hereunder to be due and payable without other notice to the Borrower,
presentment, protest or demand of any kind (all of which are hereby waived),
whereupon the full unpaid amount of the Loans, the Swing Loans and any and all
other amounts, which shall be so declared due and payable shall be and become
immediately due and payable.
7.3 Remedies. The Administrative Agent, personally or by attorney, may in
its discretion, proceed to protect and enforce its rights by pursuing any
available remedy including a suit or suits in equity or at law, whether for
damages or for the specific performance of any obligation, covenant or agreement
contained in this Agreement, or in aid of the execution of any power herein or
therein granted, or for the enforcement of any other appropriate legal or
equitable remedy, as the Administrative Agent shall deem most effectual to
collect the payments then due and thereafter to become due under this Agreement,
to enforce performance and observance of any obligation, agreement or covenant
of the Borrower hereunder or to protect and enforce any of the Administrative
Agent's or any Bank's rights or duties hereunder.
No remedy herein conferred upon or reserved to the Administrative Agent or
any Bank is intended to be exclusive of any other remedy or remedies, and each
and every such remedy shall be cumulative, and shall be in addition to every
other remedy given hereunder or under any other Loan Document now or hereafter
existing at law, in equity or by statute.
Each Bank agrees that it will not take any action, nor institute any
actions or proceedings, against the Borrower hereunder or under any Loan
Document, without the prior written consent of the Required Banks or, as may be
provided in this Agreement or the other Loan Documents, at the direction of the
Administrative Agent.
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ARTICLE VIII.
THE AGENT
8.1 Appointment and Authorization. Each Bank hereby irrevocably appoints
JPMorgan Chase Bank as the administrative agent of such Bank and authorizes the
Administrative Agent to act on such Bank's behalf to the extent provided herein
or under any of the other Loan Documents or in connection therewith, and to take
such other action and exercise such other powers as may be reasonably incidental
thereto. Notwithstanding the use of the term "agent," it is expressly understood
and agreed that the Administrative Agent shall not have any fiduciary
responsibilities to any Bank by reason of this Agreement and that the
Administrative Agent is merely acting as the representative of the Banks with
only those duties as are expressly set forth in this Agreement and the other
Loan Documents. In its capacity as the Banks' contractual representative, the
Administrative Agent (i) does not hereby assume any fiduciary duties to any of
the Banks and (ii) is acting as an independent contractor, the rights and duties
of which are limited to those expressly set forth in this Agreement and the
other Loan Documents. Each of the Banks hereby agrees to assert no claim against
the Administrative Agent on any agency theory or any other theory of liability
for breach of fiduciary duty, all of which claims each Bank hereby waives.
8.2 Power. The Administrative Agent shall have and may exercise such
powers under this Agreement and any other Loan Documents as are specifically
delegated to the Administrative Agent by the terms hereof or thereof, together
with such powers as are reasonably incidental thereto. As to any matters not
expressly provided for by the Loan Documents (including, without limitation,
enforcement or collection of the Notes), the Administrative 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 Required Banks, and such
instructions shall be binding upon all Banks and all holders of the Notes;
provided, however, that the Administrative Agent shall not be required to take
any action which exposes the Administrative Agent to personal liability or which
is contrary to any Loan Document or applicable law. The Administrative Agent
shall not have any implied duties or any obligation to take any action under
this Agreement or any other Loan Document except such action as is specifically
provided by this Agreement or any other Loan Document to be taken by the
Administrative Agent. The Administrative Agent shall act as an independent
contractor in performing its obligations as Administrative Agent hereunder and
nothing contained herein shall be deemed to create a fiduciary relationship
among or between the Administrative Agent and the Borrower or among or between
the Administrative Agent and any Bank.
8.3 Employment of Counsel; etc. The Administrative Agent may execute any
of its duties under this Agreement or any other Loan Document, and any
instrument, agreement or document executed, issued or delivered pursuant hereto
or in connection herewith, by or through employees, agents and attorneys-in-fact
and shall not be answerable for the default or misconduct of any such employee,
agent or attorney-in-fact selected by it with reasonable care. The
Administrative Agent shall be entitled to rely on advice of counsel (including
counsel who are the employees of the Administrative Agent) selected by the
Administrative Agent concerning all matters pertaining to the agency hereby
created and its duties under any of the Loan Documents.
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8.4 Reliance. The Administrative Agent shall be entitled to rely upon and
shall not be under a duty to examine or pass upon the validity, effectiveness,
genuineness of any notice, consent, waiver, amendment, certificate, affidavit,
letter, telegram, statement, paper, document or writing believed by it to be
genuine and to have been signed or sent by the proper Person or Persons, and the
Administrative Agent shall be entitled to assume that the same are valid,
effective and genuine and what they purport to be.
8.5 General Immunity. Neither the Administrative Agent nor any of the
Administrative Agent's directors, officers, agents, attorneys or employees shall
be liable to any Bank for any action taken or omitted to be taken by it or them
under the Loan Documents or in connection therewith except that the
Administrative Agent shall be obligated on the terms set forth herein for
performance of its express obligations hereunder and except that no Person shall
be relieved of any liability imposed by law for willful misconduct or gross
negligence. Without limitation on the generality of the foregoing, the
Administrative Agent: (a) shall not be responsible to any Bank for any recitals,
statements, warranties or representations under the Loan Documents or any
agreement or document relative thereto or for the financial condition of the
Borrower; (b) shall not be responsible for the authenticity, accuracy,
completeness, value, validity, effectiveness, due execution, legality,
genuineness, enforceability or sufficiency of any of the Loan Documents; (c)
shall not be responsible for the validity, genuineness, creation, perfection or
priority of any of the liens created or reaffirmed by any of the Loan Documents,
or the validity, genuineness, enforceability, existence, value or sufficiency of
any collateral or other security; (d) shall not be bound to ascertain or inquire
as to the performance or observance of any of the terms, covenants or conditions
of any of the Loan Documents on the part of the Borrower or of any of the terms
of any such agreement by any party thereto and shall have no duty to inspect the
property (including the books and records) of the Borrower; (e) shall incur no
liability under or in respect of any of the Loan Documents or any other document
or Collateral by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telegram, cable or telex) believed by the
Administrative Agent to be genuine and signed or sent by the proper party; and
(f) may consult with legal counsel (including counsel for the Borrower),
independent public accountants and other experts selected by the Administrative
Agent and shall not be liable for any action taken or omitted to be taken in
good faith in accordance with the advice of such counsel, accountants or
experts.
8.6 Credit Analysis. Each Bank has made, and shall continue to make, its
own independent investigation or evaluation of the operations, business,
property and condition, financial and otherwise, of the Borrower in connection
with the making of its commitments hereunder and has made, and will continue to
make, its own independent appraisal of the creditworthiness of the Borrower.
Without limiting the generality of the foregoing, each Bank acknowledges that
prior to the execution of this Agreement, it had this Agreement and all other
Loan Documents and such other documents or matters as it deemed appropriate
relating thereto reviewed by its own legal counsel as it deemed appropriate, and
it is satisfied with the form of this Agreement and all other Loan Documents.
Each Bank agrees and acknowledges that neither the Administrative Agent nor any
of its directors, officers, attorneys or employees makes any representation or
warranties about the creditworthiness of the Borrower or with respect to the due
execution, legality, validity, genuineness, effectiveness, sufficiency or
enforceability of this Agreement or any other Loan Documents, or the validity,
genuineness, execution, perfection or priority of Liens created or reaffirmed by
any of the Loan Documents, or the validity,
64
genuineness, enforceability, existence, value or sufficiency of any collateral
or other security. Each of the Banks shall use its best efforts to provide the
other Banks with any credit or other material information which comes into the
possession of such Bank on or before a Default or Event of Default or at any
time thereafter with respect to the operations, business, property, condition or
creditworthiness of the Borrower but no Bank shall have any liability to any
other Bank for its inadvertent failure to do so. Each Bank, upon the request of
another Bank, shall deliver to such other bank any financial statement, report,
certificate or other document required to be delivered to the Banks pursuant to
Section 5.1 which the requesting Bank did not receive. Except as explicitly
provided herein, neither the Administrative Agent nor any Bank has any duty or
responsibility, either initially or on a continuing basis, to provide any other
Bank with any credit or other information with respect to such operations,
business, property, condition or creditworthiness, whether such information
comes into its possession on or before a Default or an Event of Default or at
any time thereafter.
8.7 Agent and Affiliates. With respect to the Loans made by it and the
Notes issued to it, each Agent, in its individual capacity, shall have the same
rights and powers under the Loan Documents as any other Bank and may exercise
the same as though it were not an Agent; and the term "Bank" or "Banks" shall,
unless otherwise expressly indicated, include each Agent in its individual
capacity. Each Agent, in its individual capacity, 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, or any of its Subsidiaries,
and any person or entity who may do business with or own securities of the
Borrower, all as if it were not an Agent and without any duty to account
therefor to the Banks.
8.8 Indemnification. The Banks jointly and severally agree to indemnify
and hold harmless the Administrative Agent and its officers, directors,
employees and agents (to the extent not reimbursed by the Borrower), ratably
according to their respective Commitments, from and against any and all claims,
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by, or asserted against the Administrative Agent or any of
its officers, directors, employees or agents, in any way relating to or arising
out of any investigation, litigation or proceeding concerning or relating to the
transaction contemplated by this Agreement or any of the other Loan Documents,
or any of them, or any action taken or omitted by the Administrative Agent or
any of its officers, directors, employees or agents, under any of the Loan
Documents; provided, however, that no Bank shall be liable for any portion of
such claims, liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the gross
negligence or willful misconduct of the Administrative Agent or any of its
officers, directors, employees or agents. Without limitation of the foregoing,
each Bank agrees to reimburse the Administrative Agent promptly upon demand for
such Bank's proportionate share of any out-of-pocket expenses (including counsel
fees) incurred by Administrative Agent or its officers, directors, employees or
agents in connection with the preparation, execution, administration, or
enforcement of, or legal advice in respect of rights or responsibilities under
any of, the Loan Documents, to the extent that the Administrative Agent is not
reimbursed for such expenses by the Borrower.
8.9 Successor Administrative Agent. The Administrative Agent may resign at
any time as Administrative Agent under the Loan Documents by giving thirty (30)
days' prior written
65
notice thereof to the Banks and the Borrower. Upon any such resignation, the
Required Banks shall have the right to appoint a successor Administrative Agent
hereunder; provided that prior to the occurrence of a Default the Borrower shall
consent (which consent shall not be unreasonably withheld) thereto. If no
successor Administrative Agent shall have been so appointed by the Required
Banks, and shall have accepted such appointment, within 30 days after the
retiring Administrative Agent's giving of notice of resignation, then the
retiring Administrative Agent may, on behalf of the Banks, appoint a successor
Administrative Agent, which shall be a commercial bank organized under the laws
of the United States or of any state thereof and having a combined capital and
surplus of at least $200,000,000. Upon the acceptance of any appointment as
Administrative Agent under the Loan Documents by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations under the Loan Documents. After any retiring
Administrative Agent's resignation or removal as Administrative Agent under the
Loan Documents, the provisions of this Article VIII shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was Administrative
Agent under the Loan Documents.
8.10 Administrative Agent's Fees. The Borrower agrees to pay to JPMorgan
Chase Bank, for its own account, the fees agreed to by the Borrower and JPMorgan
Chase Bank pursuant to the Fee Letter, or as otherwise agreed from time to time.
8.11 Collateral Matters. The Administrative Agent is authorized on behalf
of all the Banks, without the necessity of any notice to or further consent from
the Banks, from time to time to take any action with respect to the Security
Documents or any collateral thereunder which may be necessary to perfect and
maintain perfected the security interest in and Liens upon the collateral
granted pursuant to the Security Documents. The Banks irrevocably authorize the
Administrative Agent, at its option and in its discretion, to release any Lien
granted to or held by the Administrative Agent upon any collateral (i) upon
termination of the Commitments and payment in full of all Loans, all Swing Loans
and all other obligations of the Borrower known to the Administrative Agent and
payable under this Agreement or any other Loan Document; (ii) constituting
property sold or to be sold or disposed of as part of or in connection with any
disposition permitted hereunder; (iii) consisting of an instrument evidencing
Indebtedness or other debt instrument, if the Indebtedness evidenced thereby has
been paid in full; or (iv) if approved, authorized or ratified in writing by all
the Banks. Upon request by the Administrative Agent at any time the Banks will
confirm in writing the Administrative Agent's authority to release particular
types or items of collateral pursuant to this Section 8.11, provided that the
absence of any such confirmation for whatever reason shall not affect the
Administrative Agent's rights under this Section 8.11.
8.12 Agents and Arranger. Notwithstanding anything contained herein which
may be construed to the contrary, none of the Syndication Agent, the
Documentation Agent and the Arranger shall exercise any of the rights or have
any of the responsibilities of the Administrative Agent hereunder, or any other
rights or responsibilities other than respective rights and responsibilities as
Banks, if applicable, hereunder.
66
ARTICLE IX.
AMENDMENT AND RESTATEMENT
9.1 Amendment and Restatement of Existing Credit Agreement. Quality
Dining, Inc., GAGHC, Inc., the Banks, and the Agents agree that, upon the
execution and delivery by each of the parties hereto of this Agreement and
satisfaction of the conditions set forth in Article III, the terms and
provisions of the Existing Credit Agreement shall be and hereby are amended,
superseded and restated in their entirety by the terms and provision of this
Agreement. It is the intention of the parties to this Agreement that this
Agreement not constitute a novation of the obligations under the Existing Credit
Agreement and shall not operate as a novation, waiver of any right, power or
remedy of the Administrative Agent or any Bank nor constitute an amendment or a
waiver of any provision of the Loan Documents, except as expressly set forth
herein and shall be limited to the particular instance expressly set forth
herein. All Loans and Swing Loans made and Obligations incurred under the
Existing Credit Agreement which are outstanding on the Effective Date shall
continue as Loans, Swing Loans and Obligations under (and shall be governed by
the terms of) this Agreement. From and after the Effective Date, the Existing
Credit Agreement shall be amended and restated hereby and all references herein
to "hereunder," "hereof," or words of like import and all references in any
other Loan Document to the "Credit Agreement" or words of like import shall mean
and be a reference to the Existing Credit Agreement as amended and restated
hereby and all references in any Loan Document to the "Borrowers" shall be
deemed to be a reference to Quality Dining, Inc., as Borrower.
9.2 Allocation of Loans under Existing Credit Agreement. As of the
Effective Date, (i) each of the Banks' Commitments shall equal the amounts set
forth opposite such Bank's name in Schedule I, (ii) each such Banks' outstanding
Revolving Credit Loans under the Existing Credit Agreement shall be allocated to
and thereafter deemed to be Term Loans or Revolving Credit Loans by such Bank
under this Agreement as and to the extent provided in Section 2.2 and the
Effective Date Borrowing Notice and subject to the reallocation as provided in
this Section 9.2, and (iii) the Swing Loans outstanding under the Existing
Credit Agreement shall continue as Swing Loans under this Agreement.
(a) Assignment and Assumption. As of the Effective Date, each of the Banks
shall fund, or be deemed to have funded the Term Loans in accordance with
Section 2.2 hereof. In respect of the Revolving Credit Loans remaining
outstanding on the Effective Date, after giving effect to any conversion to
Terms Loans pursuant to Section 2.2 hereof, each of the Banks whose Revolving
Credit Percentage on the Effective Date is less than its "Percentage" (as
defined in the Existing Credit Agreement) prior to the Effective Date (the
"Assignors") hereby sells and assigns to the other Banks (the "Assignees"), and
each of the Assignees hereby purchases and assumes from the Assignors, as of the
Effective Date an interest in and to the Assignors' Revolving Credit
Commitments, outstanding Revolving Credit Loans, rights and obligations with
respect to Letters of Credit, and other obligations in respect thereof and
Assignors' rights and obligations under this Agreement in respect thereof, such
that after giving effect to such assignment, the Revolving Credit Commitment of
each of the Assignees and each of the Assignors shall equal the amounts set
forth on Schedule I opposite such Bank's name and the principal amount of each
Bank's Revolving Credit Loans outstanding shall be equal to such Bank's
Revolving Credit Percentage of the aggregate principal amount of all Revolving
Credit Loans outstanding. As of the Effective Date, each of the Assignees shall
have the rights and obligations of a Bank under
67
the Loan Documents with respect to the rights and obligations assigned to the
Assignees hereunder by the Assignors and each of the Assignors shall relinquish
its rights and be released from its Obligations under this Agreement with
respect to the rights and obligations assigned to the Assignees hereunder and
shall retain its rights against the Existing Borrowers under Sections 10.4 and
10.5. The Administrative Agent hereby waives the processing fee for the
assignments pursuant to this Section 9.2 provided for in Section 10.10(b) of
this Agreement.
(b) Payment Obligations. On and after the Effective Date, each of the
Assignees shall be entitled to receive from the Administrative Agent all
payments of principal, interest and fees with respect to the interest assigned
hereby. Each of the Assignees shall advance funds directly to the Administrative
Agent with respect to all Loans and reimbursement payments made on or after the
Effective Date with respect to the interest assigned hereby. In consideration
for the sale and assignment of Loans hereunder, the Assignees shall pay on the
Effective Date to the Administrative Agent for the ratable account of the
Assignors an amount for each Assignee equal to the principal amount of the
portion of all Loans assigned to such Assignee hereunder. Each of the Assignees
will also promptly remit to the Administrative Agent for the ratable benefit of
the Assignors any amounts of interest on Loans and fees received from the
Administrative Agent which relate to the portion of the Loans assigned to the
Assignees hereunder for periods prior to the Effective Date and not previously
paid by the Assignees to the Assignors. In the event that any party hereto
receives any payment to which any other party hereto is entitled, then the party
receiving such amount shall promptly remit it to the Administrative Agent on
behalf of the other party hereto. The Administrative Agent shall promptly remit
to each Assignor all amounts received on behalf of such Assignor. In no event
will the Effective Date occur if the payments required to be made by each of the
Assignees to the Administrative Agent for the account of the Assignors under
this paragraph (b) are not made on the proposed Effective Date.
(c) Representations of the Assignors; Limitation of the Assignors'
Liability. Each of the Assignors (only as to itself) represents and warrants
that with respect to its interest assigned hereby, it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim created by the respective
Assignor. It is understood and agreed that the assignment and assumption
hereunder are made without recourse to the Assignors and that the Assignors make
no other representation or warranty of any kind to the Assignees. Neither the
Assignors nor any of their respective, officers, directors, employees, agents or
attorneys shall be responsible for (i) the due execution, legality, validity,
enforceability, genuineness, sufficiency or collectability of any Loan
Documents, (ii) any representation, warranty or statement made in or in
connection with any of the Loan Documents, (iii) the financial condition or
creditworthiness of the Borrower or any guarantor, (iv) the performance of or
compliance with any of the terms or provisions of any of the Loan Documents, (v)
inspecting any of the property, books or records of the Borrower, or (vi) any
mistake, error of judgment, or action taken or omitted to be taken in connection
with the Loans, Letters of Credit or the Loan Documents.
(d) Representations of the Assignees. Each of the Assignees (only as to
itself) (i) confirms that as of the Effective Date, it is a Bank under this
Agreement and has received a copy of the Agreement and the other Loan Documents,
together with copies of the financial statements requested by such Assignee and
such other documents and information as it has
68
deemed appropriate to make its own credit analysis and decision to enter into
the Agreement; (ii) agrees that it will, independently and without reliance upon
JPMorgan Chase Bank or the Assignors or any other Bank and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Loan
Documents; and (iii) confirms that none of the funds, monies, assets or other
consideration being used to make the purchase and assumption hereunder are "plan
assets" as defined under ERISA and that its rights, benefits and interests in
and under the Loan Documents will not be "plan assets" under ERISA.
(e) Indemnity. Each of the Assignees severally agrees to indemnify and
hold harmless each of the Assignors against any and all losses, cost and
expenses (including, without limitation, reasonable attorneys' fees) and
liabilities incurred by it in connection with or arising in any manner from such
Assignee's non-performance of the obligations assumed under this Section 9.2.
(f) Subsequent Assignments. After the Effective Date, each of the Banks
shall have the rights pursuant to Section 10.10 of this Agreement to assign the
rights which are assigned to such Assignee hereunder to any entity or person,
provided that, unless the prior written consent of the Assignors is obtained,
the Assignee is not thereby released from its obligations to the Assignors
hereunder, if any remain unsatisfied, including, without limitation, its
obligations under paragraphs (b) and (e) hereof.
9.3 Replacement of Notes. The Borrower shall execute and deliver Revolving
Credit Notes and Term Notes to each of the Banks and a Swing Line Note to
LaSalle. The Notes are issued in substitution for each of the Existing Notes. On
the Effective Date: (a) each of the Existing Banks shall return its Existing
Note(s) to the Existing Borrowers; (b) each of the Banks shall receive a
Revolving Credit Note in the principal amount of such Bank's Revolving Credit
Commitment and a Term Note in the principal amount of such Bank's Term Loan; and
LaSalle shall receive a new Swing Line Note in the principal amount of the Swing
Line Commitment.
9.4 Security Documents. The Borrower hereby acknowledges and agrees that
the Obligations, including the Notes, all Loans and Swing Loans now outstanding
or hereafter made hereunder and all amounts now or hereafter owing to the
Administrative Agent, the Issuing Bank and the Banks under or pursuant to this
Agreement or any other Loan Document and all Rate Hedging Obligations owing by
the Borrower and/or its Subsidiaries to the Banks or any Bank, shall be secured
under and pursuant to the Pledge Agreement, the Security Agreement and each and
every other Security Document and that all references therein to the "Credit
Agreement" shall be deemed a reference to this Agreement and all capitalized
terms not otherwise defined therein shall have the meanings ascribed thereto in
this Agreement.
9.5 Release of Excluded Assets. The Banks irrevocably authorize and direct
the Administrative Agent to release any Lien granted to or held by the
Administrative Agent under any Security Document upon any Excluded Assets,
whether by amendment to such Security Documents or otherwise. For purposes
hereof, "Excluded Assets" shall mean all right, title and interest of any
Pledgor in any contract or any General Intangible (as defined in the Security
Agreement), or any copyright license or trademark license arising under any
contract to the extent that such contract prohibits the grant of a security
interest in such contract without the
69
consent of any other party thereto or would give any other party to such
contract the right to terminate its obligations thereunder (it being understood
that the foregoing shall not be deemed to obligate such Pledgor to obtain such
consents).
9.6 Release of Excluded Subsidiaries. The Banks irrevocably authorize and
direct the Administrative Agent to release the Excluded Subsidiaries identified
on Annex VIII hereto from the Subsidiary Guaranty and to release any Lien upon
any assets of such Excluded Subsidiaries granted by such Excluded Subsidiaries
to the Administrative Agent under any Security Document.
ARTICLE X.
MISCELLANEOUS
10.1 Waivers, Amendments; etc. The provisions of this Agreement, including
the closing conditions set forth herein, may from time to time be amended,
modified or waived, if such amendment, modification or waiver is in writing and
consented to by the Borrower and the Required Banks; provided, that no
amendment, waiver or consent shall, unless in writing and signed by all the
Banks, do any of the following: (a) waive any of the conditions specified in
Article III, (b) increase the Commitments of the Banks or subject the Banks to
any additional obligations, (c) reduce the principal of, or interest on, the
Notes or any fees or other amounts payable hereunder, (d) postpone any date
fixed for any payment, including any scheduled repayment, of principal of, or
interest on, the Notes or any fees or other amounts payable hereunder, (e)
change the percentage of the Commitments or of the aggregate unpaid principal
amount of the Notes, or the number of Banks, which shall be required for the
Banks or any of them to take any action hereunder, or (f) amend this Section
10.1 or (g) except as specifically permitted hereby or thereby, release or
impair the security interest in any of the collateral granted to the
Administrative Agent, for the benefit of the Banks, under the Security Documents
or discharge any Subsidiary Guarantor; provided, further, that no amendment,
waiver or consent shall, unless in writing and signed by the Administrative
Agent in addition to the Banks required above to take such action, affect the
rights or duties of the Administrative Agent under this Agreement or any Note.
No failure or delay on the part of the Administrative Agent, any Bank or
the holder of any Note in exercising any power or right under this Agreement or
any Note shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power or right preclude any other or further exercise
thereof or the exercise of any other power or right. No notice to or demand on
the Borrower in any case shall entitle it to any notice or demand in similar or
other circumstances.
10.2 Payment Dates. Whenever any payment to be made hereunder by or to the
Banks or to the holder of any Note shall otherwise be due on a day which is not
a Business Day, such payment shall be made on the next succeeding Business Day,
and such extension of time shall be included in computing the fees or interest
payable on such next succeeding Business Day.
10.3 Notices. All communications and notices provided under this Agreement
shall be in writing by mail, telecopy or personal delivery and if to the
Borrower addressed or delivered to the Borrower at its address shown on the
signature page hereof or if to the Administrative Agent
70
or the Banks delivered to it at the address shown on the signature page hereof,
or to any party at such other address as may be designated by such party in a
notice to the other parties. Any notice, if mailed properly addressed, shall be
deemed given upon the third Business Day after the placing thereof in the United
States mail, postage prepaid; any notice shall be deemed given when transmitted
by telecopier or when personally delivered.
10.4 Costs and Expenses. The Borrower agrees to pay, or reimburse, the
Administrative Agent for all reasonable expenses for the preparation of this
Agreement, including exhibits, and the Loan Documents and any amendments hereto
or thereto or consents or waivers hereunder or thereunder as may from time to
time hereafter be required thereby or by the transactions contemplated hereby,
including, but not limited to, the fees and out-of-pocket expenses of the
Administrative Agent, charges and disbursements of special counsel to the
Administrative Agent from time to time incurred in connection with the
preparation and execution of this Agreement and any document relevant to this
Agreement, including the Loan Documents, any amendments hereto or thereto, or
consents or waivers hereunder or thereunder, and the consideration of legal
questions relevant hereto and thereto. The Borrower agrees to pay, or reimburse,
the Administrative Agent and each Bank upon demand for all reasonable costs and
expenses (including attorneys', auditors' and accountants' fees and expenses)
arising out of the transactions contemplated by this Agreement and the Loan
Documents, in connection with any work-out or restructuring of the transactions
contemplated hereby and by the Loan Documents and any collection or enforcement
of the obligations of the Borrower hereunder or thereunder, whether or not suit
is commenced, including, without limitation, reasonable attorneys' fees and
legal expenses in connection with any appeal of a lower court's order or
judgment. The obligations of the Borrower under this Section 10.4 shall survive
any termination of this Agreement.
10.5 Indemnification.
(a) In consideration of the execution and delivery of this Agreement by
the Administrative Agent and the Banks, the Borrower agrees to indemnify,
exonerate and hold the Administrative Agent, each Bank and their respective
officers, directors, employees and agents (the "Indemnified Parties") free and
harmless from and against any and all actions, causes of action, suits, losses,
claims, damages, penalties, judgments, liabilities and damages, and expenses in
connection therewith, including, without limitation, reasonable attorneys' fees
and disbursements and all expenses of litigation or preparation therefor whether
or not the Administrative Agent or such Bank is a party thereto (the
"Indemnified Liabilities"), incurred by the Indemnified Parties or any of them
as a result of, or arising out of, or relating to:
(i) any transaction financed or to be financed in whole or in part
directly or indirectly with proceeds of any Loan or Swing Loan, or
(ii) the execution, delivery, performance or enforcement of this
Agreement, the Loan Documents or any document executed pursuant hereto or
thereto by any of the Indemnified Parties,
71
except for any such Indemnified Liabilities arising on account of such
Indemnified Party's breach of contract or such Indemnified Party's gross
negligence or willful misconduct in violation of law or in tort.
(b) The Borrower acknowledges and reaffirms its obligations and liability
under the Environmental Indemnity and confirms that each reference to Property
in such Environmental Indemnity shall refer to and include any and all Property
now owned, leased or utilized, or heretofore or hereafter owned, leased or
utilized, by any of the Indemnitors thereunder. Notwithstanding the foregoing,
the representations and warranties of the Indemnitors in the Environmental
Indemnity, but not the liabilities and obligations of the Indemnitors to
indemnify the Indemnitees thereunder, are subject in all respects to the
disclosure contained in Annex IX.
(c) The provisions of this Section 10.5 shall survive termination of this
Agreement and payment in full of the Notes.
10.6 Severability. Any provision of this Agreement or the Notes executed
pursuant hereto which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this Agreement
or the Notes or affecting the validity or enforceability of such provision in
any other jurisdiction.
10.7 Cross-References. References in this Agreement to any Section or
Article are, unless otherwise specified, to such Section or Article of this
Agreement.
10.8 Headings. The various headings of this Agreement are inserted for
convenience only and shall not affect the meaning or interpretation of this
Agreement or any provisions hereof.
10.9 Governing Law. This Agreement and the Notes shall each be deemed to
be a contract made under and governed by the internal laws (and not the law of
conflicts) of the State of Indiana.
10.10 Successors and Assigns. (a) This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and assigns except that: (i) the Borrower may not assign or transfer its rights
hereunder without the prior written consent of each of the Banks; and (ii) any
assignment by a Bank must be made in compliance with subsection (b) below.
Notwithstanding clause (ii) of this subsection (a), any Bank may at any time,
without the consent of the Borrower or the Administrative Agent, assign all or
any portion of its rights under this Agreement and its Notes to a Federal
Reserve Bank; provided, however, that no such assignment shall release the
transferor Bank from its obligations hereunder. Except to the extent otherwise
required by its context, the word "Bank" where used in this Agreement shall mean
and include any such assignee and such assignee shall be bound by and have the
benefits of this Agreement the same as if such holder had been a signatory
hereto.
(b) Any Bank may, in the ordinary course of its business and in
accordance with applicable law, at any time assign to one or more banks or other
entities ("Purchasers") all or a portion of its Revolving Credit Commitments,
all Loans owing to it, all of its participation interests in existing Letters of
Credit and its obligation to participate in additional Letters of
72
Credit hereunder and its rights and obligations under this Agreement in respect
thereof in accordance with the provisions of this subsection (b). Each
assignment shall be of a constant, and not a varying, ratable percentage of the
assigning Bank's rights and obligations under this Agreement. Such assignment
shall be substantially in the form of Exhibit G hereto and shall not be
permitted hereunder unless (i) such assignment is for all of such Bank's
Revolving Credit Commitment and the rights and obligations under this Agreement
related thereto or (ii) the amount of the Revolving Credit Commitment assigned
by the assigning Bank pursuant to each assignment shall be at least $10,000,000
and the amount of the Revolving Credit Commitment retained by the assigning Bank
shall be at least $10,000,000. The consent of the Administrative Agent (which
consent shall not be unreasonably withheld or delayed) shall be required prior
to an assignment becoming effective with respect to a transferee which is not a
Bank or an Affiliate thereof if at the time of such assignment no Event of
Default shall have occurred and is continuing. In addition, the consent of the
Borrower shall be required (which consent shall not be unreasonably withheld or
delayed) prior to an assignment becoming effective if such assignment is at a
time when no Default or Event of Default has occurred and is continuing. Upon
(i) delivery to the Administrative Agent of an executed Assignment Agreement,
together with any required consents and (ii) payment of a $2,000 fee to the
Administrative Agent for processing such assignment, such assignment shall
become effective on the effective date specified in such Assignment Agreement.
On and after the effective date of such assignment, such transferee, if not
already a Bank, shall for all purposes be a Bank party to this Agreement and any
other Loan Documents executed by the Banks and shall have all the rights and
obligations of a Bank under the Loan Documents, to the same extent as if it were
an original party hereto, and no further consent or action by the Borrower, the
Banks or the Administrative Agent shall be required to release the transferor
Bank with respect to the percentage of the Revolving Credit Commitment, Loans
and Letter of Credit participations assigned to such transferee Bank. Upon the
consummation of any assignment pursuant to this Section 10.10, the
Administrative Agent and the Borrower shall make appropriate arrangements so
that replacement Notes are issued to such transferor Bank and new Notes or, as
appropriate, replacement Notes, are issued to such transferee Bank, in each case
in principal amounts reflecting their Revolving Credit Commitment and Term Loan,
as adjusted pursuant to such assignment.
(c) Each Bank may, without the consent of the Borrower or the
Administrative Agent, sell participations to one or more banks or other entities
in all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment, the Loans owing to it, its
interest as an issuer with respect to Letters of Credit, its participations in
Letters of Credit and its obligation to participate in additional Letters of
Credit hereunder); provided, however, that (i) such Bank's obligations under
this Agreement shall remain unchanged, (ii) such Bank shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) the participating banks or other entities shall be entitled to the benefit
of the cost protection provisions contained in Section 2.5 to the extent of the
Bank selling such participation and the Borrower's aggregate obligations with
respect to Section 2.5 shall not be increased by reason of such participation,
and (iv) the Borrower, the Administrative Agent and the other Banks shall
continue to deal solely and directly with such Bank in connection with such
Bank's rights and obligations under this Agreement, and such Bank shall retain
the sole right (and shall not limit its rights) to enforce the obligations of
the Borrower relating to the Loans and to approve any amendment, modification or
waiver of any provision of this Agreement (other than amendments, modifications
or waivers with respect to any fees payable hereunder (to the extent
73
such participants are entitled to such fees) or the amount of principal of or
the rate at which interest is payable on the Loans, or the dates fixed for
payments of principal of or interest on the Loans).
10.11 Execution in Counterparts. This Agreement may be executed in any
number of counterparts and by 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.
10.12 USA Patriot Act Notice. Each Bank hereby notifies the Borrower that
pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)), it is required to obtain, verify and record
information that identifies the Borrower, which information includes the name
and address of the Borrower and other information that will allow such Bank to
identify the Borrower in accordance with the USA Patriot Act.
10.13 Consent to Jurisdiction. THE BORROWER HEREBY IRREVOCABLY SUBMITS TO
THE JURISDICTION OF ANY INDIANA STATE OR FEDERAL COURT SITTING IN SOUTH BEND,
INDIANA, OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE NOTES OR ANY OTHER LOAN DOCUMENT AND THE BORROWER HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY
BE HEARD AND DETERMINED IN SUCH INDIANA STATE OR FEDERAL COURT. THE BORROWER
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING. THE BORROWER IRREVOCABLY CONSENTS TO THE SERVICE OF COPIES OF THE
SUMMONS AND COMPLAINT AND ANY OTHER PROCESS WHICH MAY BE SERVED IN ANY SUCH
ACTION OR PROCEEDING BY THE MAILING BY UNITED STATES CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, OF COPIES OF SUCH PROCESS TO THE BORROWER'S ADDRESS SPECIFIED
IN SECTION 10.3. THE BORROWER AGREES THAT A JUDGMENT, FINAL BY APPEAL OR
EXPIRATION OF TIME TO APPEAL WITHOUT AN APPEAL BEING TAKEN, IN ANY SUCH ACTION
OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS
SECTION 10.13 SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY BANK TO
SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF
THE ADMINISTRATIVE AGENT OR ANY BANK TO BRING ANY ACTION OR PROCEEDING AGAINST
THE BORROWER, OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION.
10.14 Waiver of Jury Trial. THE BORROWER, THE AGENT AND THE BANKS HEREBY
IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY NOTE, OR ANY
OTHER INSTRUMENT OR DOCUMENT DELIVERED HEREUNDER OR THEREUNDER.
[Signature pages follow]
74
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
QUALITY DINING, INC.
Address: 0000 Xxxxxx Xxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxx
Executive Vice President, General
Counsel and Secretary
By: /s/ XXXX X. XXXXX
Xxxx X. Xxxxx
Executive Vice President, General
Counsel and Secretary
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
in its individual capacity and as
Administrative Agent
Address: 000 Xxxxxx Xxxxxx
XX0-XX00
Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxx
By: /s/ XXXXXX X. XXXXXXX
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
S-1
BANK OF AMERICA NATIONAL ASSOCIATION
Address: 000 Xxxxxxxxx Xxxxxx, XX,
00xx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxx
By: /s/ XXXXX XXXX XXXXXX, JR.
Name: Xxxxx Xxxx Xxxxxx, Jr.
Title: Vice President
S-2
LASALLE BANK NATIONAL ASSOCIATION
Address: 000 Xxxxx XxXxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxx
By: /s/ XXXXXXX XXXXX XX.
Name: Xxxxxxx Xxxxx Xx.
Title: Commercial Banking Officer
S-3
NATIONAL CITY BANK OF INDIANA
Address: 000 X. XxXxxxxx Xxx.
Xxxxxxxxx, XX 00000
Attention: Xxx Xxxxxx
By: /s/ XXXXXXX X. XXXXXX
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
S-4
THE NORTHERN TRUST COMPANY
Address: 00 X. XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Art Xxxxx
By: /s/ XXXXXX X. XXXXX
Name: Xxxxxx X. Xxxxx
Title: Vice President
S-5
Solely for the purpose of acknowledging and agreeing to the amendment to the
Credit Agreement as provided in Article IX and the removal of GAGHC, Inc. as a
borrower:
GAGHC, INC.
By: /s/ XXXX X. XXXXX
Name: Xxxx X. Xxxxx
Title: Executive V.P., General Counsel, and Secretary
S-6
SCHEDULE I
COMMITMENTS AS OF EFFECTIVE DATE
Revolving Revolving
Credit Term Loan Swing Line Credit
Bank Commitment Commitment Commitment Percentage Percentage
--------------------- --------------- --------------- -------------- ---------- ----------
XX Xxxxxx Xxxxx Bank, $ 5,750,000.00 $ 8,750,000.00 -- 28.75000% 25.00000%
National Association
Bank of America, $ 5,750,000.00 $ 8,750,000.00 -- 28.75000% 25.00000%
National Association
National City Bank of $ 3,833,333.34 $ 5,833,333.34 -- 19.16667% 16.66667%
Indiana
The Northern Trust $ 3,833,333.33 $ 5,833,333.33 -- 19.16667% 16.66667%
Company
LaSalle Bank National $ 833,333.33 $ 5,833,333.33 $ 3,000,000.00 4.16666% 16.66666%
Association
--------------- --------------- --------------
TOTAL $ 20,000,000.00 $ 35,000,000.00 $ 3,000,000.00
ANNEX I
LIST OF JURISDICTIONS IN WHICH THE BORROWER IS QUALIFIED TO DO BUSINESS
Corporation: Jurisdiction:
----------- ------------
Quality Dining, Inc. Indiana*
Michigan
Ohio
----------
*State of Incorporation
ANNEX II
LIST OF SUBSIDIARIES; JURISDICTION OF INCORPORATION AND STOCK
OWNERSHIP
JURISDICTION OF JURISDICTIONS
INCORPORATION QUALIFIED TO DO
CORPORATE ENTITY OR ORGANIZATION BUSINESS STOCK OWNERSHIP
---------------------------- --------------- ------------------- ----------------------------------------
Bravogrand, Inc. Indiana IN, MI Bravokilo, Inc. (100%)
1,000 shares Issued
Bravokilo, Inc. Indiana IN, MI Quality Dining, Inc. (100%)
243 Shares Issued & Outstanding
Chili's Of Christiana, Inc. Delaware DE, IN Southwest Dining, Inc. (100%)
100 Shares Issued & Outstanding
Chili's Of Mount Laurel, Inc. New Jersey IN, NJ Southwest Dining, Inc. (100%)
100 Shares Issued & Outstanding
Full Service Dining, Inc. Indiana IN, MI, OH Southwest Dining, Inc. (100%)
106.648 Shares Issued & Outstanding
GAGHC, Inc. Delaware DE, IN Southwest Dining, Inc. (100%)
100 Shares Issued & Outstanding
Xxxxx'x American Grill, L.P. Texas TX 1% Interest-General Partner-Xxxxx'x
American Grill Restaurant Corporation
99% Interest-Limited Partner-GAGHC, Inc.
Xxxxx'x American Grill Indiana AR, FL, GA, IN, MI, Southwest Dining, Inc. (100%)
Restaurant Corporation MS, NC, NJ, OH, OK, 100 Shares Issued & Outstanding
TN, TX
Xxxxx'x, Inc. Tennessee AL, IN, TN Southwest Dining, Inc. (100%)
9,970 Shares Issued & Outstanding
Grayling Corporation Delaware DE, IN, NJ, PA Southwest Dining, Inc. (100%)
1,098.90 Shares Issued & Outstanding
Grayling Management Virginia IN, VA Southwest Dining, Inc. (100%)
Corporation 1,098.90 Shares Issued & Outstanding
QDI Management, LLC Indiana IN, MI Quality Dining, Inc, 100% Membership
Units
Southwest Dining, Inc. Indiana IN, MI, OH Quality Dining, Inc. (100%)
100 Shares Issued & Outstanding
Tri-State Construction Co. Indiana IN, MI, NJ, OH, PA Southwest Dining, Inc. (100%)
Inc. 166-2/3 Shares Issued & Outstanding
ANNEX III
INDEBTEDNESS; LIENS
Loans in the original aggregate principal amount of $49,066,000 (of which
$41,947,399 is outstanding as of 2/20/05) to the SPE's secured by the record
owner's (for owned sites) or tenant's (for leased sites) interest in franchise
agreements, improvements and equipment located at:
STORE NO. STORE ADDRESS
----------------- --------------------------
Burger King 8203 0000 Xxxx Xxxx
Xxxx Xxxxx, XX 00000
Burger King 8664 0000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Burger King 8665 0000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Burger King 9012 0000 Xxxx 0xx Xxxxxx
Xxxxxx, XX 00000
Burger King 9028 0000 Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Burger King 9157 000 Xxxxx 00xx Xxxxxx
Xxxxxxx, XX 00000
Burger King 9349 2037 US 31
Xxxxxxxx, XX 00000
Burger King 9461 0000 Xxxxx X-000
Xxxxxxxxxx, XX 00000
Burger King 9640 0000 Xxxxxx Xxxx
Xxxxx Xxxxxxxx, XX 00000
Burger King 9713 0000 Xxxxx Xxxxxxxx
Xxxxxxxx, XX 00000
Burger King 10436 000 Xxxx Xxxxxxxxx Xxxxxx
Xxxx Xxxxx, XX 00000
Burger King 10568 0000 Xxxxxxx Xxxx
Xxxxxx, XX 00000
Burger King 11248 000 Xxxxx Xxxx Xxxx
Xxx Xxxxx, XX 00000
Burger King 11365 000 Xxxx Xxxxxx Xxxx
Xxxx Xxxxx, XX 00000
Burger King 11739 0000 Xxxx 0000 Xxxxx
Xxxxxxxx, XX 00000
Chili's 59 0000 X.X. Xxxxx 0
Xxxx Xxxxxxx, XX 00000
Chili's 60 000 Xxxxxxxx Xxxx.
Xxxxxxxx Xxxxx, XX 00000
STORE NO. STORE ADDRESS
------------ -----------------------
Chili's 61 0000 Xxxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Chili's 62 0000 Xxxx Xxxxx 00
Xxxxxx Xxxx, XX 00000
Chili's 63 00 Xxxxxx Xxxx
Xxxxxxxxxxx, XX 00000
Chili's 64 0000 Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Chili's 100 0000 Xxxxx Xxxx
Xxxxxxxxx, XX 00000
Chili's 300 0000 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Chili's 400 000 X. Xxxxxxxx Xxxx.
Xxxx Xxxxx, XX 00000
Chili's 500 0000 X. Xxxxxxxxx
Xxxxxxx, XX 00000
Chili's 600 0000 00xx Xxxxxx
Xxxxxxxx, XX 00000
Chili's 700 0000 Xxxxxxxx Xxxx
Xxxxxx, XX 00000
Chili's 800 0000 Xxxxx Xxxx 00 Xxxx
Xxxxxxxxx, XX 00000
Chili's 900 000 X. Xxxxx Xxxxx Xxxx
Xxxxxxxxxx, XX 00000
Chili's 0000 Xxx Xxxxx Xxxxx
Xxxxxxx, XX 00000
Chili's 1100 0000 Xxxxxx Xxxx
Xxxxx, XX 00000
Chili's 1200 0000 Xxxxx Xxxx
Xxxxxxxx, XX 00000
Chili's 1300 0000 Xxxxxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
Chili's 1400 0000 Xxxxxxxx Xx.
Xxxxxxxx Xxxx, XX 00000
Land Contract: $ 144,483 (as of 2/20/05)
Letters of Credit: $ 1,980,000 (as of 2/20/05)
Burger King Capitalized Lease Obligations:
BURGER KING BALANCE
STORE NO. 2/20/05
----------- -----------
5298 $ 62,102
5397 $ 66,688
5987 $ 122,089
6574 $ 178,656
7055 $ 329,073
467 $ 82,194
5193 $ 56,314
7113 $ 219,018
7433 $ 308,999
5988 $ 123,726
810 $ 214,975
988 $ 440,503
5118 $ 49,153
5603 $ 110,096
5250 $ 60,431
5323 $ 66,590
5753 $ 113,892
5790 $ 132,320
7014 $ 212,470
-----------
TOTALS $ 2,949,289
===========
Lien on Quality Dining, Inc.'s membership interest in Six Edison Lakes, L.L.C.
granted to Xxxxxx Land Planning Associates
ANNEX IV
INVESTMENTS
Quality Dining, Inc. owns a Fifty Percent (50%) interest in Six Edison Lakes,
L.L.C.
ANNEX V
DESCRIPTION OF SUBJECT ASSETS
STORE NO. STORE ADDRESS
----------------- --------------------------
Burger King 8203 0000 Xxxx Xxxx
Xxxx Xxxxx, XX 00000
Burger King 8664 0000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Burger King 8665 0000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Burger King 9012 0000 Xxxx 0xx Xxxxxx
Xxxxxx, XX 00000
Burger King 9028 0000 Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Burger King 9157 000 Xxxxx 00xx Xxxxxx
Xxxxxxx, XX 00000
Burger King 9349 2037 US 31
Xxxxxxxx, XX 00000
Burger King 9461 0000 Xxxxx X-000
Xxxxxxxxxx, XX 00000
Burger King 9640 0000 Xxxxxx Xxxx
Xxxxx Xxxxxxxx, XX 00000
Burger King 9713 0000 Xxxxx Xxxxxxxx
Xxxxxxxx, XX 00000
Burger King 10436 000 Xxxx Xxxxxxxxx Xxxxxx
Xxxx Xxxxx, XX 00000
Burger King 10568 0000 Xxxxxxx Xxxx
Xxxxxx, XX 00000
Burger King 11248 000 Xxxxx Xxxx Xxxx
Xxx Xxxxx, XX 00000
Burger King 11365 000 Xxxx Xxxxxx Xxxx
Xxxx Xxxxx, XX 00000
Burger King 11739 0000 Xxxx 0000 Xxxxx
Xxxxxxxx, XX 00000
Chili's 59 0000 X.X. Xxxxx 0
Xxxx Xxxxxxx, XX 00000
Chili's 60 000 Xxxxxxxx Xxxx.
Xxxxxxxx Xxxxx, XX 00000
Chili's 61 0000 Xxxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Chili's 62 0000 Xxxx Xxxxx 00
Xxxxxx Xxxx, XX 00000
Chili's 63 00 Xxxxxx Xxxx
Xxxxxxxxxxx, XX 00000
STORE NO. STORE ADDRESS
------------ --------------------------
Chili's 64 0000 Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Chili's 100 0000 Xxxxx Xxxx
Xxxxxxxxx, XX 00000
Chili's 300 0000 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Chili's 400 000 X. Xxxxxxxx Xxxx.
Xxxx Xxxxx, XX 00000
Chili's 500 0000 X. Xxxxxxxxx
Xxxxxxx, XX 00000
Chili's 600 0000 00xx Xxxxxx
Xxxxxxxx, XX 00000
Chili's 700 0000 Xxxxxxxx Xxxx
Xxxxxx, XX 00000
Chili's 800 0000 Xxxxx Xxxx 00 Xxxx
Xxxxxxxxx, XX 00000
Chili's 900 000 X. Xxxxx Xxxxx Xxxx
Xxxxxxxxxx, XX 00000
Chili's 0000 Xxx Xxxxx Xxxxx
Xxxxxxx, XX 00000
Chili's 1100 0000 Xxxxxx Xxxx
Xxxxx, XX 00000
Chili's 1200 0000 Xxxxx Xxxx
Xxxxxxxx, XX 00000
Chili's 1300 0000 Xxxxxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
Chili's 1400 0000 Xxxxxxxx Xx.
Xxxxxxxx Xxxx, XX 00000
ANNEX VI
LIST OF EXCLUDED PROPERTY
Xxxxx'x American Grill Restaurant subject to Sublease
No. Address
---- ---------------------------------------------
GR11 0000 Xxxxxxxx Xx., Xxxxxx, XX 00000
GR14 000 Xxxxxxx Xxxx., Xxxxxx Xxxx, XX 00000
GR25 0000 Xxxx Xxxxx Xxxx, Xxxxxxxxxx, XX 00000
GR57 00000 Xxxxxxxx Xxxx., #0000, Xxxxxx, XX 00000
Locations where Landlord Refused Consent
No. Landlord Location
------- ------------------------------- ----------------------------
BK519 Burger King Corporation 000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
BK 527 Burger King Corporation 00000 Xxxxxx Xxxx
Xxxxxx, XX 00000
BK637 Burger King Corporation 00000 Xxxx Xxxx
Xxxxxx Xxxx, XX 00000
BK764 Burger King Corporation 0000 X. Xxxxxxxx Xxxxxx
Xxxxx Xxx, XX 00000
BK889 Burger King Corporation 0000 Xxxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
BK8834 Xxxxxxxxxx, Xxxxx 0000 Xxxxxxx Xxx., X.X.
Xxxxxxxx, XX 00000
BK9303 LTB, L.L.C. 0000 00 Xxxx Xxxx, X.X.
Xxxxxxxx, XX 00000
BK9487 Venturer Group, LLC 0000 Xxxxx Xxxxxx
Xxxxxxx, XX 00000
BK9672 Xxxxxxxxxx, Xxxxx 00 00xx Xxxxxx
Xxxxxxxxxx, XX 00000
BK11347 0000 Xxxxxxxxx Xxxx
Xxxxxx, XX 00000
BK13005 LTB, L.L.C. 000 00xx Xx., X.X.
Xxxxxxx, XX 00000
CH 52 000 X. Xxxxxxxxx Xxxxxx
Xxxxx, XX 00000
XX00 Xxxxxxx Xxxxxx Associates, L.P. 0000 Xxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
CH2100 GGP-Grandville L.L.C. 0000 Xxxxx Xxxx Xxxxxxx, X.X.
Xxxxx #0000
Xxxxxxxxxx, XX 00000
GR3 Regency Centers, L.P. 0000 Xxxxxxxxxxx Xx., X.X.
Xxxxxxx, XX 00000
ANNEX VII
AFFILIATED LEASE AGREEMENTS
% of
Member of Management Ownership
Affiliated Lessor Affiliated with Lessor of Affiliate Properties Subject to Lease
--------------------------- ---------------------- ------------ ---------------------------
Bendan Properties, LLC Xxxxxx X. Xxxxxxxxxxx 41.7% BK00328, BK00467, BK01606,
Xxxx X. Xxxxxxxxxxx 30.64% BK04124, BK04216, BK04276,
Xxxxx X. Xxxxxxxxxxx 1.8% BK04505, BK05193, BK05298,
Xxxxxx X. Xxxxxxxxxxx 1.8% BK05397, BK05398, BK05987,
BK06574, BK06622, BK07055,
BK07113, BK07433
BK Fort Xxxxx Properties, Xxxxxx X. Xxxxxxxxxxx 60.0% BK05250, BK05323, BK05413,
LLC Xxxx X. Xxxxxxxxxxx 13.333% BK05753, BK05790, BK06389,
Xxxxx X. Xxxxxxxxxxx 20.0% BK06485, BK07014, BK07060
BK Muskegon Properties, LLC Xxxxxx X. Xxxxxxxxxxx 55.0% BK00300, BK00458, BK05188,
Xxxx X. Xxxxxxxxxxx 16.67% BK05988, BK06843
Xxxxx X. Xxxxxxxxxxx 20.0%
Xxxxxxxxxxx Properties, LLC Xxxxxx X. Xxxxxxxxxxx 100.0% BK00810, BK00988, BK02148,
BK02624, BK04102, BK05118,
BK05603, BK06296
F&S Properties, LLC Xxxxxx X. Xxxxxxxxxxx 75.0% BK04435
Xxxx X. Xxxxxxxxxxx 16.67%
J&B Real Estate Company Xxxxxx X. Xxxxxxxxxxx 50.0% BK03172
Silver Creek Plaza, Inc. Xxxxxx X. Xxxxxxxxxxx 50.0% BK08448
Xxxx X. Xxxxxxxxxxx 33.33%
Burger Management South Xxxxxx X. Xxxxxxxxxxx 50.0% Airplane
Bend #3, Inc. Xxxx X. Xxxxxxxxxxx 25.0%
Xxxxx X. Xxxxxxxxxxx 25.0%
Xxxx-Xxxx Xxxxxxx Xxxxxxxxxx 51.0% BK509
Xxxxxxx Xxxxxxxxxx Xxxxxxx Xxxxxxxxxx 100.0% BK4814
ANNEX VIII
EXCLUDED SUBSIDIARIES
Subsidiary Total Assets
------------------------------- ------------
Chili's of Christiana, Inc. -0-
Chili's of Mount Laurel, Inc. -0-
XXXXX, Inc. $ 339,532
Xxxxx'x American Grill, L.P. -0-
Xxxxx'x Inc. $ 155,949
Grayling Management Corporation -0-
Tri-State Construction Co. Inc. -0-
ANNEX IX
ENVIRONMENTAL MATTERS
0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000:
The Quartermaster Plaza Shopping Center consists of approximately 44 acres of
vacant land which was previously owned by the United States Army. It is
contaminated with petroleum constituents and is currently being remediated. The
Pennsylvania Department of Environmental Protection has required, inter alia, a
vapor barrier system be installed beneath all building foundations. Grayling
Corporation is complying with The Philadelphia Department of Environmental
Protection's requirements for developing a Chili's Grill & Bar restaurant on
this site.
0000 Xxxxxxx Xxxx, Xx. Xxxxxx, XX 00000 (CH #1700):
This property is contaminated due to leaking underground gasoline and diesel
storage tanks. The Seller agreed to remediate the property according to Michigan
law. Southwest Dining, Inc. constructed its Chili's Grill & Bar restaurant
pursuant to a Site Specific Safety Plan designed to meet the requirements of the
Occupational Safety and Health Administration Standard for Hazardous Waste and
Emergency Response Operations.
EXHIBIT A
[FORM OF REVOLVING CREDIT NOTE]
REVOLVING CREDIT NOTE
$__________ ____________, 0000
Xxxxxxxxx, Xxxxxxx
FOR VALUE RECEIVED, QUALITY DINING, INC., an Indiana corporation (together
with its successors and assigns, the "Borrower"), hereby promises to pay to
____________________ (the "Holder"), the principal sum of __________ DOLLARS
($__________), or such lesser amount as shall equal the aggregate unpaid
principal amount of the Revolving Credit Loans (as defined in the hereinafter
defined Credit Agreement) made by the Holder to the Borrower under the Credit
Agreement, on the Maturity Date (as defined in the Credit Agreement) and to pay
interest on the unpaid principal amount of each Revolving Credit Loan, for the
period commencing on the date of such Revolving Credit Loan until such Revolving
Credit Loan shall be paid in full, at the rates per annum and on the dates
provided in the Credit Agreement.
Both principal and interest are payable in lawful money of the United
States of America and in immediately available funds to the Administrative Agent
(as defined in the Credit Agreement) to such domestic account as the
Administrative Agent may designate. The date, amount and type of each Revolving
Credit Loan made by the Holder to the Borrower and each payment made on account
of the principal thereof, shall be recorded by the Holder on its books and,
prior to any transfer of this Note, endorsed by the Holder on the schedule
attached hereto or any continuation thereof; provided that the Holder's failure
to make any such recordation or notation shall not affect the Obligations of the
Borrower hereunder or under the Credit Agreement.
This Note is one of the Notes referred to in the Fifth Amended and
Restated Credit Agreement (as amended from time to time, the "Credit Agreement")
dated as of April 13, 2005 by and between the Borrower, the banks party thereto
(the "Banks"), and JPMorgan Chase Bank, National Association, as administrative
agent (the "Administrative Agent"), which amends and restates the Fourth Amended
and Restated Revolving Credit Agreement dated as of May 30, 2002, as amended
(the "Existing Credit Agreement"), by and between Quality Dining, Inc. and
GAGHC, Inc., as borrowers (the "Existing Borrowers"), the banks party thereto,
and JPMorgan Chase Bank, National Association, as administrative agent for such
Banks. This Note, together with the Term Note issued to the Holder pursuant to
the Credit Agreement, is issued in substitution for a Promissory Note dated May
30, 2002 (the "Existing Note") issued by the Existing Borrowers pursuant to the
Existing Credit Agreement. This Note does not constitute a novation of the
obligations under the Existing Note. Capitalized terms used in this Note have
the respective meanings assigned to them in the Credit Agreement.
The Credit Agreement provides for the acceleration of the maturity of the
Revolving Credit Loans evidenced by this Note upon the occurrence of certain
events and for prepayments of Revolving Credit Loans upon the terms and
conditions specified therein.
A-1
This Note is secured by a Subsidiary Guaranty issued by certain
Wholly-Owned Subsidiaries of Quality Dining, Inc. in favor of the Administrative
Agent for the benefit of the Banks, by certain assets of the Borrower and its
Subsidiaries pursuant to the Pledge Agreement, the Security Agreement and the
other Security Documents and may now or hereafter be secured by one or more
other security agreements, pledge agreements, assignments, mortgages,
guaranties, instruments or agreements of the Borrower or any other Person.
The Borrower hereby waives demand, presentment, protest and notice of
nonpayment and protest.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF INDIANA.
QUALITY DINING, INC.
By: ___________________________________________
Xxxx X. Xxxxx
Executive Vice President, General Counsel
and Secretary
A-2
Schedule to Promissory Note
Date Principal
Date of Advance Amount of Advance Type of Advance of Advance Repaid
--------------- ----------------- --------------- -----------------
A-3
EXHIBIT B
NOTICE OF BORROWING
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
as Administrative Agent
000 Xxxxxx Xxxxxx
XX0-XX00
Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxx
___________, 2005
(Date of Notice)
Ladies and Gentlemen:
The undersigned, Quality Dining, Inc., an Indiana corporation, refers to
the Fifth Amended and Restated Credit Agreement dated as of April 13, 2005 (said
Fifth Amended and Restated Credit Agreement, as amended, modified or
supplemented from time to time being the "Agreement") by and between Quality
Dining, Inc. as borrower, the banks party thereto and JPMorgan Chase Bank,
National Association, as administrative agent. The terms used herein shall have
the meanings ascribed thereto in the Agreement. Pursuant to the terms of the
Agreement the undersigned hereby requests a Revolving Credit Loan under the
Agreement, and in that connection sets forth below the information relating to
such Revolving Credit Loan (the "Proposed Borrowing"):
(i) The borrowing date (which shall be a Business Day) of the Proposed
Borrowing is __________, 20__.
(ii) The aggregate amount of the Proposed Borrowing is $__________.
(iii) The Proposed Borrowing is to be made as the following Type(s) of
Loan:
(A) $__________ Base Rate Loan; or
(B) $__________ LIBOR Base Loan.
(iv) If the Proposed Borrowing is to be made as a LIBOR Base Loan, the
Interest Period applicable thereto is ___ months.
The undersigned confirms that the conditions precedent set forth in
Article III of the Agreement are satisfied as of the date hereof.
QUALITY DINING, INC.
By: _______________________________
Its: _________________________
B-1
EXHIBIT C
[FORM OF TERM NOTE]
TERM NOTE
$___________ ____________, 0000
Xxxxxxxxx, Xxxxxxx
FOR VALUE RECEIVED, QUALITY DINING, INC., an Indiana corporation (together
with its successors and assigns, the "Borrower"), hereby promises to pay to
____________________ (the "Holder"), the principal sum of __________ DOLLARS
($__________) on the Maturity Date (as defined in the Credit Agreement) and to
pay interest on the unpaid principal amount hereof, for the period commencing on
the date hereof until paid in full, at the rates per annum and on the dates
provided in the Credit Agreement.
Both principal and interest are payable in lawful money of the United
States of America and in immediately available funds to the Administrative Agent
(as defined in the Credit Agreement) to such domestic account as the
Administrative Agent may designate.
This Note is one of the Notes referred to in the Fifth Amended and
Restated Credit Agreement (as amended from time to time, the "Credit Agreement")
dated as of April 13, 2005 by and between the Borrower, the banks party thereto
(the "Banks"), and JPMorgan Chase Bank, National Association, as administrative
agent (the "Administrative Agent"), which amends and restates the Fourth Amended
and Restated Revolving Credit Agreement dated as of May 30, 2002, as amended
(the "Existing Credit Agreement"), by and between Quality Dining, Inc. and
GAGHC, Inc., as borrowers (the "Existing Borrowers"), the banks party thereto,
and JPMorgan Chase Bank, National Association, as administrative agent for such
Banks. This Note, together with the Revolving Credit Note issued to the Holder
pursuant to the Credit Agreement, is issued in substitution for a Promissory
Note dated May 30, 2002 (the "Existing Note") issued by the Existing Borrowers
pursuant to the Existing Credit Agreement. This Note does not constitute a
novation of the obligations under the Existing Note. Capitalized terms used in
this Note have the respective meanings assigned to them in the Credit Agreement.
The Credit Agreement provides for the acceleration of the maturity of the
Term Loans evidenced by this Note upon the occurrence of certain events and for
prepayments of Term Loans upon the terms specified therein.
This Note is secured by a Subsidiary Guaranty issued by certain
Wholly-Owned Subsidiaries of Quality Dining, Inc. in favor of the Administrative
Agent for the benefit of the Banks, by certain assets of the Borrower and its
Subsidiaries pursuant to the Pledge Agreement, the Security Agreement and the
other Security Documents and may now or hereafter be secured by one or more
other security agreements, pledge agreements, assignments, mortgages,
guaranties, instruments or agreements of the Borrower or any other Person.
The Borrower hereby waives demand, presentment, protest and notice of
nonpayment and protest.
C-1
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF INDIANA.
QUALITY DINING, INC.
By: _________________________________________
Xxxx X. Xxxxx
Executive Vice President, General Counsel
and Secretary
C-2
EXHIBIT D
EFFECTIVE DATE BORROWING NOTICE
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
as Administrative Agent
000 Xxxxxx Xxxxxx
XX0-XX00
Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxx
_________, 2005
(Date of Notice)
Ladies and Gentlemen:
The undersigned, Quality Dining, Inc., an Indiana corporation, refers to
the Fifth Amended and Restated Credit Agreement dated as of April 13, 2005 (said
Fifth Amended and Restated Credit Agreement, as amended, modified or
supplemented from time to time being the "Agreement") by and between Quality
Dining, Inc. as borrower, the banks party thereto and JPMorgan Chase Bank,
National Association, as administrative agent. The terms used herein shall have
the meanings ascribed thereto in the Agreement.
The Borrower hereby certifies to the Administrative Agent and the Banks
that the conditions precedent set forth in Article III of the Agreement have
been satisfied and that the Effective Date is ________, 2005.
The Borrower hereby requests that the Banks make Revolving Credit Loans
and Term Loans under the Credit Agreement on April 14, 2005 and that the
principal amount of Loans outstanding immediately following such borrowings
shall be as follows:
Principal Amount Outstanding
Term Loans, constituting Base Rate Loans $________________
Revolving Credit Loans, constituting Base Rate
Loans $________________
QUALITY DINING, INC.
By:
Name: __________________
Title: __________________
D-1
EXHIBIT E
[FORM OF SWING LINE NOTE]
SWING LINE NOTE
$3,000,000.00 __________, 2005
__________,_____________
FOR VALUE RECEIVED, QUALITY DINING, INC., an Indiana corporation (the
"Borrower"), hereby promises to pay to LASALLE BANK NATIONAL ASSOCIATION (the
"Holder"), the principal sum of THREE MILLION DOLLARS ($3,000,000), or such
lesser amount as shall equal the aggregate unpaid principal amount of the Swing
Loans (as defined in the hereinafter defined Credit Agreement) made by the
Holder to the Borrower under the Credit Agreement, on the Termination Date (as
defined in the Credit Agreement) and to pay interest on the unpaid principal
amount of each Swing Loan, for the period commencing on the date of such Swing
Loan until such Swing Loan shall be paid in full at the rates per annum and on
the dates provided in the Credit Agreement.
Both principal and interest are payable in lawful money of the United
States of America and in immediately available funds to the Holder to such
domestic account as the Holder may designate. The date, amount and type of each
Swing Loan made by the Holder to the Borrower and each payment made on account
of the principal thereof, shall be recorded by the Holder on its books and,
prior to any transfer of this Note, endorsed by the Holder on the schedule
attached hereto or any continuation thereof; provided that the Holder's failure
to make any such recordation or notation shall not affect the Obligations of the
Borrower hereunder or under the Credit Agreement.
This Note is the Swing Line Note referred to in the Fifth Amended and
Restated Revolving Credit Agreement dated as of April 13, 2005 (the "Credit
Agreement") by and between the Borrower, the banks party thereto (the "Banks")
and XX Xxxxxx Xxxxx Bank, as administrative agent, which amends and restates the
Fourth Amended and Restated Revolving Credit Agreement dated as of May 30, 2002,
as amended (the "Existing Credit Agreement"), by and between Quality Dining,
Inc. and GAGHC, Inc., as borrowers (the "Existing Borrowers"), the banks party
thereto, XX Xxxxxx Chase Bank (formerly known as Chase Bank of Texas National
Association), as administrative agent for the Banks, Bank One, Indiana, N.A.
(formerly known as NBD Bank, N.A.), as documentation agent, and Bank of America,
National Association (formerly known as NationsBank, N.A. (South)), as co-agent.
This Note amends and restates and is issued in substitution for a Promissory
Note dated May 30, 2002 (the "Existing Note") issued by the Existing Borrowers
pursuant to the Existing Credit Agreement and evidences Swing Loans made
thereunder. This Note does not constitute a novation of the obligations under
the Existing Note. Capitalized terms used in this Note have the respective
meanings assigned to them in the Credit Agreement.
The Credit Agreement provides for the acceleration of the maturity of the
Swing Loans evidenced by this Note upon the occurrence of certain events and for
prepayments of Swing Loans upon the terms and conditions specified therein.
E-1
This Note is secured by a Subsidiary Guaranty issued by certain
Wholly-Owned Subsidiaries of Quality Dining, Inc. in favor of the Administrative
Agent for the benefit of the Banks, by certain assets of the Borrower and its
Subsidiaries pursuant to the Pledge Agreement, the Security Agreement, the Note
Pledge Agreement and the other Security Documents and may now or hereafter be
secured by one or more other security agreements, pledge agreements,
assignments, mortgages, guaranties, instruments or agreements of the Borrower or
any other Person.
The Borrower hereby waives demand, presentment, protest and notice of
nonpayment and protest.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF INDIANA.
QUALITY DINING, INC.
By:________________________________
Xxxx X. Xxxxx
Executive Vice President,
General Counsel and Secretary
E-2
Schedule to Swing Line Note
Date of Swing Line Amount of Swing Type of Swing Line
Loan Line Loan Loan Date Principal Repaid
------------------ --------------- ------------------ ---------------------
------------------ --------------- ------------------ ---------------------
------------------ --------------- ------------------ ---------------------
------------------ --------------- ------------------ ---------------------
E-3
EXHIBIT F
LEGAL OPINION OF COUNSEL
April 13, 2005
JPMorgan Chase Bank, National Association, individually and as Agent
Bank of America, National Association
National City Bank of Indiana
The Northern Trust Company
LaSalle Bank, N.A.
Re: Fifth Amended and Restated Credit Agreement
dated as of April 13, 2005
Ladies and Gentlemen:
I am the General Counsel of Quality Dining, Inc. You have requested an
opinion from me as counsel to Quality Dining, Inc., an Indiana corporation (the
"Borrower"), and Bravokilo, Inc., Bravogrand, Inc. Full Service Dining, Inc.,
Southwest Dining, Inc., Xxxxx'x American Grill Restaurant Corporation, Indiana
corporations, Grayling Corporation, a Delaware corporation, and QDI Management,
LLC, an Indiana limited liability company (the "Subsidiary Guarantors"), in
connection with that certain Fifth Amended and Restated Credit Agreement dated
as of April 13, 2005 between the Borrower and you (the "Credit Agreement"). In
connection with this opinion letter, I have obtained and relied upon
certificates (the "Company Certificates") executed and delivered to me by
officers of the Borrower and the Subsidiary Guarantors, copies of which are
attached hereto.
In connection with this opinion, I have reviewed:
1. the Credit Agreement;
2. the swing line note to be issued in the form attached to the Credit
Agreement as Exhibit C (the "Swing Line Note");
3. the Notes;
4. the Subsidiary Guaranty dated as of December 21, 1995, executed by
each of the Subsidiary Guarantors, as reaffirmed pursuant to the
Reaffirmation of Subsidiary Guaranty dated as of April 13, 2005 (the
"Subsidiary Guaranty").
5. the Pledge Agreement dated as of September 11, 1998;
6. the Pledge and Security Agreement dated as of September 11, 1998;
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7. the First Amendment to Pledge and Security Agreement dated as of May
30, 2002;
8. the Environmental Indemnity Agreement dated as of May 30, 2002;
9. the Mortgages;
10. those certain Collateral Assignments of Franchise Agreements
executed by each of Bravokilo, Inc., Southwest Dining, Inc. and
Grayling Corporation, each dated as of July 26, 1999;
11. those certain Collateral Assignments of Lessee's Interest in Leases
executed by each of Bravokilo, Inc., Southwest Dining, Inc. and
Grayling Corporation, each dated as of July 26, 1999;
12. the Burger King Intercreditor Agreement by and among Burger King
Corporation, Bravokilo, Inc., Quality Dining, Inc., Chase Bank of
Texas, National Association, Bank One, Indiana, N.A., and
Nationsbank, N.A. (South) dated as of July 26, 1999;
13. the Burger King Intercreditor Agreement by and among Burger King
Corporation, Bravogrand, Inc., Quality Dining, Inc. and XX Xxxxxx
Chase Bank dated as of October 15, 2001;
14. the Consent to Collateral Assignment by and among Xxxxxxx
International, Inc., Southwest Dining, Inc., Grayling Corporation
and Chase Bank of Texas, National Association, dated as of September
11, 1998;
15. the Intercreditor Agreement by and among Captec Financial Group,
Inc., CNL Financial Services, Inc., Quality Dining, Inc., Bravokilo,
Inc., Southwest Dining, Inc., Grayling Corporation, SWCAP, LLC,
SWCN, LLC, GRAYCAP, LLC, GRAYCN, LLC, BKCAP, LLC and Chase Bank of
Texas, National Association dated as of August 3, 1999;
16. the Collateral Assignment of Franchise Agreements executed by
Bravogrand, Inc. dated as of October 15, 2001;
17. those certain Collateral Assignments of Lessee's Interest in Leases
executed by each of Bravokilo, Inc., Southwest Dining, Inc.,
Grayling Corporation and Bravogrand, Inc., each dated as of May 30,
2002; and
18. the Personal Guaranty dated as of April 13, 2005, executed by Xxxxxx
X. Xxxxxxxxxxx.
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Items 12, 13 and 14 above are collectively referred to as the "Franchisor
Consents" and Item 15 as the "Intercreditor Agreement." The foregoing are
sometimes collectively referred to as the "Transaction Documents." I have also
examined originals or copies of the Certificates of Incorporation and By-Laws of
the Borrower and each of the Subsidiary Guarantors (other than QDI Management,
LLC), the Articles of Organization [and Operating Agreement] of QDI Management,
LLC, and the resolutions of the Board of Directors of the Borrower and the
Subsidiary Guarantors. I have further reviewed such other documents and such
matters of law as are necessary for rendering this opinion. As to all factual
matters material to the opinion set forth herein, I have (with your permission
and without any investigation or independent confirmation), relied upon, and
assumed the accuracy of the Company Certificates, and other certificates,
corporate records and other documents with respect to the facts stated therein.
This opinion should in no way be construed as passing upon the accuracy or
completeness of any of the representations and warranties made in the
Transaction Documents or on any matter, legal or otherwise, not specifically
mentioned herein.
Capitalized terms used but not otherwise defined herein shall have the
respective meanings accorded such terms in the Credit Agreement.
I am qualified to practice law only in the State of Indiana and I do not
purport to be an expert on, nor do I express any opinion herein concerning, any
laws other than the laws of the States of Indiana and Delaware (with respect to
Grayling Corporation and the opinions expressed in Paragraphs 1, 3 and 4) and
the federal laws of the United States. The General Qualifications of the Legal
Opinion Accord of the ABA Section of Business Law (1991) (the "Accord") are
incorporated herein by reference and this opinion should be read in conjunction
therewith.
In rendering the opinions expressed in this letter I have made, with your
permission and without independent verification, the following assumptions:
(a) All of the assumptions set forth in Section 4 of the Accord;
(b) Borrower has acquired good and sufficient title to each item of
Collateral existing on the date hereof and has "rights" in and to
such Collateral within the meaning of Section 9-203 of the Uniform
Commercial Code consistent with and sufficient for purposes of the
Loan Documents, and the same will be true of each item of Collateral
arising after the date hereof;
(c) The descriptions of the Collateral in the relevant Loan Documents
reasonably describes the property intended to be described as
Collateral therein;
(d) Financing Statements are properly completed, executed, timely filed
and continued in all appropriate state and local offices;
(e) the Mortgages are recorded in each of the Offices of the Recorders
of the Counties in which the Collateral is located.
Based upon and subject to the foregoing and the qualifications stated
herein, it is my opinion that:
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1. The Borrower and each of the Subsidiary Guarantors (other than QDI
Management, LLC) is a corporation organized and validly existing in good
standing under the laws of its jurisdiction of incorporation, and has all
requisite corporate power and authority to carry on the business now being
conducted by it and to own its property and to enter into and perform the Credit
Agreement, the Subsidiary Guaranty and the Security Documents to which it is a
party.
2. QDI Management, LLC is a limited liability company organized and
validly existing in good standing under the laws of the State of Indiana and has
all requisite power and authority to carry on the business now being conducted
by it and to own its property and to enter into and perform the Subsidiary
Guaranty and the Security Documents to which it is a party.
3. The Borrower and each of the Subsidiary Guarantors is duly qualified
and in good standing as a foreign corporation in the jurisdictions enumerated in
Annex I and Annex II attached to this opinion and such jurisdictions are all of
the jurisdictions where the nature of their business or the character of their
properties makes such qualification or licensing necessary.
4. Each of the Credit Agreement, the Subsidiary Guaranty and the Security
Documents have been duly authorized by proper corporate (or company) action on
the part of the Borrower and the Subsidiary Guarantors which are party thereto
and have been duly executed and delivered by an authorized officer (or member)
of each of the Borrower and Subsidiary Guarantors. Each of the Credit Agreement,
the Subsidiary Guaranty and the Security Documents constitutes the legal, valid
and binding obligations of the Borrower and the Subsidiary Guarantors which are
a party thereto, enforceable in accordance with their respective terms, except
to the extent that enforcement thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws of general application
relating to or affecting the enforcement of the rights of creditors or by
equitable principles (regardless of whether enforcement is sought in a
proceeding in equity or at law).
5. To the extent subject to Indiana law and/or Article 9 of the Indiana
Uniform Commercial Code, each of the Security Documents creates an enforceable
security interest in favor of the Administrative Agent for the benefit of the
Banks in the Collateral described therein as security for the payment, to the
extent set forth therein, of the Obligations. I caution you that your ability to
realize upon such security interests in the Collateral is subject to the
conditions, terms and provisions of the Franchisor Consents, the Intercreditor
Agreement and the rights of the other parties thereto.
6. No authorization, approval or consent of any governmental or regulatory
body is necessary or required in connection with the lawful execution, delivery
and performance by the Borrower and the Subsidiary Guarantors of the Credit
Agreement, the Subsidiary Guaranty and the Security Documents.
7. The execution, delivery and performance of the Credit Agreement, the
Subsidiary Guaranty and the Security Documents and compliance with the terms
thereof by the Borrower and the Subsidiary Guarantors will not conflict with, or
result in any breach of any of the provisions of, or constitute a default under,
or result in the creation or imposition of any Lien (other than Liens in favor
of the Administrative Agent pursuant to the Security Documents) upon
F-4
any of the Property of the Borrower or the Subsidiary Guarantors pursuant to the
provisions of the articles of incorporation, by-laws or other charter document
of the Borrower or the Subsidiary Guarantors or any loan agreement under which
Borrower or the Subsidiary Guarantors are bound, or other agreement or
instrument under which the Borrower or the Subsidiary Guarantors or their
Property is bound.
8. There are no actions, suits or proceedings pending or, to the best of
my knowledge after due inquiry, threatened against, or affecting the Borrower or
the Subsidiary Guarantors at law or in equity or before or by any federal,
state, municipal or other governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, which (i) would contest or
affect the execution, validity or performance of any of the Loan Documents, or
(ii) could result, either individually or collectively, in a Material Adverse
Occurrence, except as disclosed in Quality Dining, Inc.'s Annual Report on Form
10-K for the fiscal year ended October 31, 2004.
9. Each of the Borrower and the Subsidiary Guarantors have all franchises,
permits, licenses and other authority as are material to enable them to carry on
their business as now being conducted and as proposed to be conducted, and they
are not in default under any of such franchises, permits, licenses or other
authority, which defaults could, individually or in the aggregate, result in a
Material Adverse Occurrence.
10. The execution and delivery of the Credit Agreement, the Subsidiary
Guaranty and the Security Documents and the performance thereof by the Borrower
and the Subsidiary Guarantors will not result in a breach or violation of any of
the terms, conditions, or provisions of any law or regulation (including any
usury laws), order, writ, injunction or decree of any court or governmental
authority applicable to the Borrower or the Subsidiary Guarantors.
11. The Personal Guaranty has been duly executed and delivered by Xxxxxx
X. Xxxxxxxxxxx. The Personal Guaranty constitutes the legal, valid and binding
obligation of Xxxxxx X. Xxxxxxxxxxx, enforceable in accordance with its terms,
except to the extent that enforcement thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws of general
application relating to or affecting the enforcement of the rights of creditors
or by equitable principles (regardless of whether enforcement is sought in a
proceeding in equity or at law).
12. No authorization, approval or consent of any governmental or
regulatory body is necessary or required in connection with the lawful
execution, delivery and performance by Xxxxxx X. Xxxxxxxxxxx of the Personal
Guaranty. The execution and delivery of the Personal Guaranty and the
performance thereof by Xxxxxx X. Xxxxxxxxxxx will not result in a breach or
violation of any of the terms, conditions, or provisions of (i) any law or
regulation (including any usury laws), order, writ, injunction or decree of any
court or governmental authority applicable to him or (ii) any agreement or
instrument to which he is a party or to which he or his property is subject.
13. None of the Borrower and the Subsidiary Guarantors is (i) a "public
utility company" or a "holding company," or an "affiliate" or a "subsidiary
company" of a "holding company" or an "affiliate" of such a "subsidiary
company," as such terms are defined in the
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Public Utility Holding Company Act of 1935, as amended, or (ii) a "public
utility" as defined in the Federal Power Act, as amended, or (iii) an
"investment company" or an "affiliated person" thereof or an "affiliated person"
of any such "affiliated person", as such terms are defined in the Investment
Company Act of 1940, as amended.
14. All of the issued and outstanding shares of capital stock of each of
the Subsidiary Guarantors have been duly and validly issued, are fully paid and
non-assessable and are owned by Quality Dining, Inc., and/or a subsidiary of
Quality Dining, Inc. as reflected on Annex II attached to this opinion free and
clear of any lien or encumbrance.
15. The Borrower and Merger Corp. have taken all necessary corporate,
partnership or other organizational action to authorize the execution, delivery
and performance of the Merger Agreement and the consummation of transactions
contemplated thereby. The execution and delivery of the Merger Agreement, and
the consummation of the Merger, do not, violate any statute or regulation of the
United States (including any securities law) or of the State of Indiana, or any
order, judgment or decree of any court or governmental body binding on the
Borrower or Merger Corp., or result in a breach of, or constitute a default
under, any material agreement, indenture, instrument or other document, or any
judgment, order or decree, to which the Borrower or any of its Subsidiaries is
bound or to which Merger Corp. is a party or by which its is bound.
16. The Merger complies with all applicable legal requirements, and all
necessary governmental, regulatory, creditor, shareholder, partner and other
material consents, approvals and exemptions required to be obtained by the
Borrower and Merger Corp. in connection with the Merger have been duly obtained
and are in full force and effect. All applicable waiting periods with respect to
the Merger have expired without any action being taken by any competent
governmental authority which restrains, prevents or imposes material adverse
conditions upon the consummation of the Merger.
17. I have reviewed the opinion of Xxxxxxx X. Xxxxxxx, Xx., attorney at
law, special New Jersey counsel for the Borrower, dated __________, 2005 and
addressed to you. The opinion of Xxxxxxx X. Xxxxxxx, Xx., delivered to you
pursuant to the Credit Agreement, is satisfactory in form and scope to me, and,
in my opinion, you are justified in relying thereon.
My opinions are limited to the specific issues addressed and are limited
in all respects to laws and facts existing on the date hereof. Without limiting
the foregoing, I express no opinion as to the priority of any lien or security
interest in the Collateral nor as to the title to, condition of title to, or
ownership of the Collateral. By rendering my opinions, I do not undertake to
advise you of any changes in such laws or facts which may occur after the date
hereof.
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This opinion is rendered only to you and is solely for your benefit in
connection with the Credit Agreement. This opinion may not be relied upon for
any other purpose or by any other person, firm or corporation, and may not be
used, circulated, quoted or otherwise referred to, nor may copies be delivered
to any person (except as set forth in Section 20 of the Accord) without my prior
written consent, provided, however, that this opinion may be relied upon by each
of the Bank's successors and assigns.
Yours very truly,
Xxxx X. Xxxxx
Executive Vice President and
General Counsel
F-7
ANNEX I
TO
OPINION LETTER DATED AS OF APRIL 13, 2005
List of Jurisdictions in which the Borrower is qualified to do business.
Corporation: Jurisdiction:
----------- ------------
Quality Dining, Inc. Indiana*
Michigan
Ohio
----------
*State of Incorporation
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ANNEX II
TO
OPINION LETTER DATED AS OF APRIL 13, 2005
List of Subsidiaries, Jurisdiction of Incorporation and Stock Ownership
JURISDICTION OF JURISDICTIONS
INCORPORATION QUALIFIED TO DO
CORPORATE ENTITY OR ORGANIZATION BUSINESS STOCK OWNERSHIP
---------------------------- --------------- ------------------- ----------------------------------------
Bravogrand, Inc. Indiana IN, MI Bravokilo, Inc. (100%)
1,000 shares Issued
Bravokilo, Inc. Indiana IN, MI Quality Dining, Inc. (100%)
243 Shares Issued & Outstanding
Chili's Of Christiana, Inc. Delaware DE, IN Southwest Dining, Inc. (100%)
100 Shares Issued & Outstanding
Chili's Of Mount Laurel, Inc. New Jersey IN, NJ Southwest Dining, Inc. (100%)
100 Shares Issued & Outstanding
Full Service Dining, Inc. Indiana IN, MI, OH Southwest Dining, Inc. (100%)
106.648 Shares Issued & Outstanding
GAGHC, Inc. Delaware DE, IN Southwest Dining, Inc. (100%)
100 Shares Issued & Outstanding
Xxxxx'x American Grill, L.P. Texas TX 1% Interest-General Partner-Xxxxx'x
American Grill Restaurant Corporation
99% Interest-Limited Partner-GAGHC, Inc.
Xxxxx'x American Grill Indiana AR, FL, GA, IN, MI, Southwest Dining, Inc. (100%)
Restaurant Corporation MS, NC, NJ, OH, OK, 100 Shares Issued & Outstanding
TN, TX
Xxxxx'x, Inc. Tennessee AL, IN, TN Southwest Dining, Inc. (100%)
9,970 Shares Issued & Outstanding
Grayling Corporation Delaware DE, IN, NJ, PA Southwest Dining, Inc. (100%)
1,098.90 Shares Issued & Outstanding
Grayling Management Virginia IN, VA Southwest Dining, Inc. (100%)
Corporation 1,098.90 Shares Issued & Outstanding
QDI Management, LLC Indiana IN, MI Quality Dining, Inc, 100% Membership
Units
Southwest Dining, Inc. Indiana IN, MI, OH Quality Dining, Inc. (100%)
100 Shares Issued & Outstanding
Tri-State Construction Co. Indiana IN, MI, NJ, OH, PA Southwest Dining, Inc. (100%)
Inc. 166-2/3 Shares Issued & Outstanding
F-9
EXHIBIT G
FORM OF
ASSIGNMENT AGREEMENT
Reference is made to the Fifth Amended and Restated Credit Agreement dated
as of April 13, 2005 (the "Credit Agreement") among Quality Dining, Inc. an
Indiana corporation (the "Borrower"), the Banks party thereto (the "Banks"), and
JPMorgan Chase Bank, National Association, as administrative agent (in such
capacity, the "Administrative Agent"). Terms defined in the Credit Agreement are
used herein with the same meanings.
_____________________________________ (the "Assignor") and
__________________________________________ (the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, a ___% interest in and to the
Assignor's Revolving Credit Commitment, such percentage interest of the
Assignor's participations in Letters of Credit on the Effective Date and such
percentage interest in each Loan owing to the Assignor outstanding on the
Effective Date, together with all unpaid interest and Revolving Credit
Commitment Fees accrued thereon or in respect thereof to the Effective Date, and
all rights and obligations of Assignor under the Credit Agreement in respect
thereof.
2. The Assignor represents that as of the date hereof (without giving
effect to assignments thereof which have not yet become effective): (i) its
Revolving Credit Commitment is $__________, (ii) the outstanding principal
balance (unreduced by any assignments thereof which have not yet become
effective) of its Revolving Credit Note is $________________, (iii) the
outstanding principal balance (unreduced by any assignments thereof which have
not yet become effective) of its Term Note is $________, and (iv) the stated
amount of its participations in Letters of Credit is $______________. The
Assignor (i) makes no representation or warranty and assumes no responsibility
with respect to any statements, warranties or representations made in or in
connection with the Credit Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement, any
other Legal Document or any other instrument or document furnished pursuant
thereto, other than that it is the legal and beneficial owner of the interest
being assigned by it hereunder and that such interest is free and clear of any
adverse claim; and (ii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or any of
its Subsidiaries or the performance or observance by the Borrower or any of its
Subsidiaries of any of their respective obligations under the Credit Agreement,
any other Loan Document or any other instrument or document furnished pursuant
hereto or thereto.
3. The Assignee (i) represents and warrants that it is legally authorized
to enter into this Assignment Agreement; (ii) confirms that it has received a
copy of the Credit Agreement, together with copies of the most recent financial
statements delivered pursuant to Section 5.1 thereof and such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment Agreement; (iii) agrees that it will,
independently and without reliance upon the Administrative Agent, the Assignor
or any other
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person which has become a Bank and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Credit Agreement; (iv) appoints and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers under the Credit Agreement as is delegated to the
Administrative Agent by the terms thereof, together with such powers as are
reasonably incidental thereto and (v) agrees that it will be bound by the
provisions of the Credit Agreement and will perform in accordance with their
terms all the obligations which by the terms of the Credit Agreement are
required to be performed by it as a Bank.
4. The effective date of this Assignment and Acceptance shall be
_______________ (the "Effective Date").(1)
5. From and after the Effective Date, (i) the Assignee shall be a party to
the Credit Agreement and, to the extent provided in this Assignment Agreement,
have the rights and obligations of a Bank thereunder and under the Loan
Documents and (ii) the Assignor shall, to the extent provided in this Assignment
Agreement, relinquish its rights and be released from its obligations under the
Credit Agreement.
6. This Assignment and Acceptance shall be governed by and construed in
accordance with the internal laws (and not the law of conflicts) of the State of
Illinois.
[NAME OF ASSIGNOR],
By______________________________________
Title:
[NAME OF ASSIGNEE],
By______________________________________
Title:
----------
(1) The Effective Date must be at least five Business Days after the delivery of
the executed Assignment Agreement to the Agent.
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EXHIBIT H
[FORM OF BUY-OUT NOTE]
SUBORDINATED NOTE
THIS SUBORDINATED NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR UNDER APPLICABLE STATE LAWS. THIS
SUBORDINATED NOTE MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF
AN EXEMPTION THEREFROM UNDER SAID ACT AND APPLICABLE STATE LAWS.
$__________ ___________, 20__ (the "Issue Date")
Mishawaka, Indiana
FOR VALUE RECEIVED, on ________________, 20__ (such date, as it may be
adjusted in accordance with the terms of this Subordinated Note as described
below under the caption "Payment Terms", the "Maturity"), QUALITY DINING, INC.,
a corporation organized under the laws of the State of Indiana ("Company"),
promises to pay to the order of _____________________ ("Holder"), at
___________, _____________ or at such other place as Holder may direct, the
principal sum of ___________________________ Dollars ($__________) (such amount,
as it may be adjusted in accordance with the terms of this Subordinated Note as
described below under the caption "Payment Terms", the "Principal Amount").
1. PAYMENT TERMS.
(a) Except as described below in this Section 1 or in Section 2 of this
Subordinated Note, the Company shall make annual payments of principal of
$_______ each on the __ day of each [state month] (each, a "Payment Date") of
each year. Said payments of principal shall continue until the Maturity of this
Subordinated Note, whether by acceleration or otherwise, at which time the
entire remaining principal balance of this Subordinated Note, plus accrued but
unpaid interest thereon as set forth below, shall be due and payable in full.
(b) The Company further promises to pay interest on the outstanding
Principal Amount of this Subordinated Note from the date hereof until Maturity
at a rate per annum equal to ___%, computed on the basis of a 360-day year
consisting of twelve 30-day months. After the Maturity, whether by acceleration
or otherwise, the Principal Amount of this Subordinated Note shall bear interest
until paid at a rate equal to two percent (2%) in addition to the rate in effect
immediately prior to Maturity. Interest shall be due and payable on each Payment
Date and at the Maturity hereof; provided that all accrued but unpaid interest
shall be due and payable in full with the final principal payment hereunder.
After Maturity interest shall be payable on demand.
(c) [INSERT, IF NOTE ISSUED TO PAY PUT SHARES] Notwithstanding the
foregoing provisions of this Section 2, in accordance with the terms of the
Amended and Restated Shareholders Agreement dated as of February 3, 2005 (as it
may be amended, modified or
H-1
supplemented from time to time, the "Shareholders Agreement") among QDI Merger
Corp. (as predecessor to the Company) and each of the Shareholders party
thereto, this Subordinated Note shall automatically be adjusted on each
anniversary of the Issue Date (each, a "Principal Adjustment Date"), with such
adjustment to be effective as of such Principal Adjustment Date and to remain in
effect until the next Principal Adjustment Date, to an amount equal to
((OPA/PCSV) x LCSV) - P, where:
OPA = the original principal amount of this Subordinated Note;
PCSV = the Common Stock Value (as defined in the Shareholders Agreement)
used in the determination of the original principal amount of this
Subordinated Note;
LCSV = the lowest Common Stock Value in effect on the Issue Date and each
anniversary thereof occurring on or prior to the date of determination;
P = the cumulative total of principal payments made on this Subordinated
Note repaid prior to the applicable Principal Adjustment Date;
and such adjusted principal amount shall thereupon be payable in equal annual
installments (plus accrued and unpaid interest thereon) commencing on such
Principal Adjustment Date and thereafter on each subsequent anniversary of the
Issue Date (subject to further adjustment as provided above) through the
Maturity (subject to adjustment as provided below); provided further, that in
the event that the foregoing principal adjustment formula yields a negative
number, this Subordinated Note shall thereupon automatically be deemed to be
paid in full and the Holder shall not be obligated to repay any such negative
balance to the Company;
(d) Notwithstanding anything in this Subordinated Note or the
[Shareholders Agreement] [Amended and Restated Shareholders Agreement dated as
of February 3, 2005 (as it may be amended, modified or supplemented from time to
time, the "Shareholders Agreement")] to the contrary, if on any principal
repayment date, after taking into account the outstanding principal amount of
and all accrued interest on all Buy-Out Notes (as defined in the Shareholders
Agreement), there exists, or payment of such principal or accrued interest would
result in, an event of default (or an event which with notice or lapse of time
or both would constitute an event of default) under any of the Senior
Indebtedness Documents (as defined in Section 3 of this Subordinated Note) or
under any other Indebtedness (as defined in the Shareholders Agreement) of the
Company or any of its Subsidiaries, or such payment of principal or accrued
interest would otherwise be prevented by law, the principal amount and accrued
interest otherwise payable on such Payment Date shall not be paid and such
accrued and unpaid interest shall be added to the principal amount of this
Subordinated Note, which shall thereafter be payable in equal annual
installments (plus accrued and unpaid interest thereon) on each Payment Date
through the Maturity, which Maturity shall automatically be extended for one (1)
full year each time that repayment of the principal amount of this Subordinated
Note is not required to be made on a Payment Date due to the circumstances
described in this subsection [(d)][(c)] of Section 1.
2. SUBORDINATION PROVISIONS. The Company covenants and agrees, and the Holder by
its acceptance of this Subordinated Note, likewise covenants and agrees on
behalf of itself and any holder of this Subordinated Note, that the payment of
the principal amount of and
H-2
interest on this Subordinated Note is hereby expressly subordinated in right of
payment to the payment and performance of the Senior Indebtedness (as defined
below) to the extent and in the manner set forth in the following clauses of
this Section 2:
(a) No payment or other distribution of the Company's assets of any kind
or character, whether in cash, securities, or other rights or property, shall be
made on account of this Subordinated Note except to the extent such payment or
other distribution is permitted under the Senior Indebtedness Documents (as
defined below).
(b) In the event of any dissolution, winding up, liquidation,
readjustment, reorganization or other similar event relating to the Company,
whether voluntary or involuntary, partial or complete, and whether in
bankruptcy, insolvency or receivership proceedings, or upon an assignment for
the benefit of creditors, or any other marshalling of the assets and liabilities
of the Company or any sale of all or substantially all of the assets of the
Company (such proceedings being herein collectively called "Bankruptcy
Proceedings"), the Senior Indebtedness shall first be paid and performed in full
and in cash before the Holder shall be entitled to receive and to retain any
payment or distribution in respect of this Subordinated Note. In order to
implement the foregoing during any Bankruptcy Proceeding: (i) all payments and
distributions of any kind or character in respect of this Subordinated Note to
which Holder would be entitled except for this clause (b) shall be made directly
to the Representative; (ii) Holder shall promptly file a claim or claims, in the
form required in any Bankruptcy Proceedings, for the full outstanding amount of
this Subordinated Note, and shall use commercially reasonable efforts to cause
said claim or claims to be approved and all payments and other distributions in
respect thereof to be made directly to the Representative (for the benefit of
the holders of the Senior Indebtedness) until the Senior Indebtedness shall have
been paid and performed in full and in cash; and (iii) Holder hereby irrevocably
agrees that the Representative, in the name of Holder or otherwise, may demand,
xxx for, collect, receive and receipt for any and all such payments or
distributions, and file, prove and vote or consent in any such Bankruptcy
Proceedings with respect to any and all claims of Holder relating to this
Subordinated Note, in each case until the Senior Indebtedness shall have been
paid and performed in full and in cash.
(c) During the continuance of any event of default (or an event which with
notice or lapse of time or both would constitute an event of default) under any
Senior Indebtedness Document, no payment of principal, premium or interest shall
be made on this Subordinated Note.
(d) In the event that Holder receives any payment or other distribution of
any kind or character from the Company or from any other source whatsoever, in
respect of this Subordinated Note, other than as expressly permitted by the
terms of this Subordinated Note, such payment or other distribution shall be
received in trust for the holders of the Senior Indebtedness and shall be turned
over by Holder to the Representative forthwith. Holder will xxxx its books and
records so as clearly to indicate that this Subordinated Note is subordinated in
accordance with the terms hereof. All payments and distributions received by the
Representative in respect of this Subordinated Note, to the extent received in
or converted into cash, may be applied by the Representative first to the
payment of any and all expenses (including reasonable attorneys' fees and legal
expenses) paid or incurred by the Representative in enforcing the subordination
provisions set forth in this Section 2, or in endeavoring to collect or realize
upon
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this Subordinated Note, and any balance thereof shall, solely as between the
Holder and the Representative, be applied by the Representative toward the
payment of the Senior Indebtedness; but as between the Company and its
creditors, no such payments or distributions of any kind or character shall be
deemed to be payments or distributions in respect of the Senior Indebtedness.
(e) Notwithstanding any payments or distributions received by the
Representative in respect of this Subordinated Note, while any Bankruptcy
Proceedings are pending Holder shall not be subrogated to the then existing
rights of the holders of the Senior Indebtedness until the Senior Indebtedness
have been paid and performed in full and in cash. If no Bankruptcy Proceedings
are pending, Holder shall only be entitled to exercise any subrogation rights
that it may acquire (by reason of a payment or distribution to the
Representative in respect of this Subordinated Note) to the extent that any
payment arising out of the exercise of such rights would be permitted under the
Senior Indebtedness Documents.
(f) The provisions of this Section 2 are intended solely for the purpose
of defining the relative rights of Holder, on the one hand, and the holders of
the Senior Indebtedness on the other hand. Nothing contained in these
Subordination Provisions or elsewhere in this Subordinated Note is intended to
or shall impair, as between the Company, its creditors (other than the holders
of the Senior Indebtedness) and Holder, the Company's obligation, which is
unconditional and absolute, to pay Holder the principal of and interest on this
Subordinated Note as and when the same shall become due and payable in
accordance with the terms hereof or to affect the relative rights of Holder and
creditors of the Company (other than the holders of the Senior Indebtedness).
(g) Holder shall not, until the Senior Indebtedness has been paid and
performed in full and in cash, cancel, waive, forgive, transfer or assign, or
commence legal proceedings to enforce or collect, or subordinate to any
obligation of the Company, howsoever created, arising or evidenced, whether
direct or indirect, absolute or contingent, or now or hereafter existing, or due
or to become due, other than the Senior Indebtedness, this Subordinated Note or
any rights in respect hereof, unless Holder shall have received the prior
written consent of the Representative.
(h) Holder shall not, without the advance written consent of the
Representative, commence, or join with any other Person in commencing, any
Bankruptcy Proceedings with respect to the Company until at least one year and
one day shall have passed since the Senior Indebtedness shall have been paid and
performed in full and in cash.
(i) If, at any time, any payment (in whole or in part) of any Senior
Indebtedness is rescinded or must be restored or returned by the holders of the
Senior Indebtedness (whether in connection with Bankruptcy Proceedings or
otherwise), these Subordination Provisions shall continue to be effective or
shall be reinstated, as the case may be, as though such payment had not been
made.
(j) The Representative and/or any of the holders of the Senior
Indebtedness may, from time to time, at its sole discretion, without notice to
Holder, and without waiving any of its rights under this Section 2, take any or
all of the following actions: (i) retain or obtain an interest in any property
to secure any of the Senior Indebtedness; (ii) retain or obtain the primary or
secondary obligations of any other obligor or obligors with respect to any of
the Senior
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Indebtedness; (iii) extend or renew for one or more periods (whether or not
longer than the original period), alter or exchange any of the Senior
Indebtedness, or release or compromise any obligation of any nature with respect
to any of the Senior Indebtedness; (iv) amend, supplement, amend and restate, or
otherwise modify the Senior Indebtedness Documents; and (v) release its security
interest in, or surrender, release or permit any substitution or exchange for
all or any part of any rights or property securing any of the Senior
Indebtedness, or extend or renew for one or more periods (whether or not longer
than the original period), or release, compromise, alter or exchange any
obligations of any nature of any obligor with respect to any such rights or
property.
(k) Holder hereby waives: (i) notice of acceptance of these Subordination
Provisions by the Representative and the holders of the Senior Indebtedness;
(ii) notice of the existence, creation, non-payment or non-performance of all or
any of the Senior Indebtedness; and (iii) all diligence in enforcement,
collection or protection of, or realization upon, the Senior Indebtedness, or
any thereof, or any security therefor.
(l) The holders of the Senior Indebtedness may, from time to time, on the
terms and subject to the conditions set forth in the Senior Indebtedness
Documents to which such Persons are party, but without notice to Holder, assign
or transfer any or all of the Senior Indebtedness, or any interest therein; and,
notwithstanding any such assignment or transfer or any subsequent assignment or
transfer thereof, such Senior Indebtedness shall be and remain Senior
Indebtedness for the purposes of these Subordination Provisions, and every
immediate and successive assignee or transferee of any of the Senior
Indebtedness or of any interest of such assignee or transferee in the Senior
Indebtedness shall be entitled to the benefits of these Subordination Provisions
to the same extent as if such assignee or transferee were the assignor or
transferor.
(m) The subordination provisions contained in this Section 2 constitute a
continuing offer from the holder of this Subordinated Note to all persons who
become the holders of, or who continue to hold, Senior Indebtedness; and these
subordination provisions are made for the benefit of the holders of the Senior
Indebtedness, and the Representative may proceed to enforce such provisions on
behalf of each of such persons.
(n) For purposes of this Section 2, the following terms shall have the
following meanings:
"Credit Agreement" shall mean the Fifth Amended and Restated Credit Agreement
dated as of April 13, 2005 by and between the Company, JPMorgan Chase Bank,
National Association, as administrative agent, and the Banks party thereto, as
it may be amended, modified, supplemented or restated at any time and in any
manner.
"Representative" shall mean with respect to the holders of Senior
Indebtedness, (i) the Administrative Agent under the Credit Agreement and (ii)
any other trustee, agent or other similar representative for the holders of
Senior Indebtedness.
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"Senior Indebtedness" shall mean (i) all "Obligations" (as defined in the
Credit Agreement) of or owing by the Company, (ii) all liabilities and
obligations of the Company in respect of any indebtedness (whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses or otherwise) of the Company which refinances, replaces or is in
substitution for such Obligations and (iii) all other obligations, liabilities
or indebtedness of the Company designated by the Company as "Senior
Indebtedness" for the purposes of this Subordinated Note.
"Senior Indebtedness Documents" shall mean the Credit Agreement, the Loan
Documents (as defined in the Credit Agreement) and any and all other documents
that from time to time evidence any of the Senior Indebtedness or secure or
support payment or performance thereof.
3. EVENTS OF DEFAULT. The occurrence of any of the following shall constitute an
"Event of Default":
(a) failure to pay when due the principal of, or any interest on, this
Subordinated Note and continuance thereof for 30 days after notice of default in
such payment is given by Holder to the Company; or
(b) the Company (i) files a voluntary petition for bankruptcy; (ii) is
adjudicated bankrupt or insolvent by a final and unappealable order; (iii) files
a petition seeking for itself any arrangement, composition, readjustment, or
similar relief; (iv) files an answer admitting the material allegation of a
petition filed against such party in any of the proceedings referenced in (i)
through (iii) above; (v) seeks or consents to or acquiesces in the appointment
of a trustee or receiver for all or a substantial part of the Company's
property; or (vi) makes an assignment for the benefit of creditors.
4. DEFAULT REMEDIES.
(a) Upon the occurrence and during the continuance of any Event of Default
specified in clause (a) of Section 3, Holder at its option may, subject,
however, to the provisions of Section 2 of this Subordinated Note, declare this
Subordinated Note (principal, interest and other amounts) immediately due and
payable without notice or demand of any kind. Upon the occurrence of any Event
of Default specified in clause (b) of Section 3, this Subordinated Note
(principal, interest and other amounts) shall be immediately and automatically
due and payable without action of any kind on the part of Holder. Upon the
occurrence and during the continuance of any Event of Default, Holder may,
subject to the provisions of Section 2 of this Subordinated Note, exercise any
rights and remedies under this Subordinated Note, at law or in equity.
(b) Holder may, by written notice to the Company, at any time and from
time to time, waive any Event of Default, which shall be for such period and
subject to such conditions as shall be specified in any such notice. In the case
of any such waiver, Holder and the Company shall be restored to their former
position and rights hereunder, and any Event of Default so waived shall be
deemed to be cured and not continuing; but no such waiver shall extend to or
impair any subsequent or other Event of Default. No failure to exercise, and no
delay in
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exercising, on the part of Holder of any right, power or privilege hereunder
shall preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies of Holder herein
provided are cumulative and not exclusive of any rights or remedies provided by
law.
5. PAYMENTS, ETC. All payments hereunder shall be made in immediately available
funds, and shall be applied first to accrued interest and then to principal;
however, if an Event of Default occurs, Holder may, in its sole discretion, and
in such order as it may choose, apply any payment to interest, principal and/or
lawful charges and expenses then accrued.
All payments shall be made without deduction for or on account of any
present or future taxes, duties or other charges levied or imposed on this
Subordinated Note or the proceeds, Holder or the Company by any government or
political subdivision thereof. The Company shall upon request of Holder pay all
such taxes, duties or other charges in addition to principal and interest,
including without limitation all documentary stamp and intangible taxes, but
excluding income taxes based solely on Holder's income.
6. NOTICES. All notices, requests and demands to or upon the respective parties
hereto shall be deemed to have been given or made when deposited in the mail,
postage prepaid, addressed, if to Holder, to ________________ and, if to the
Company, to its address set forth below, or to such other address as may be
hereafter designated in writing by the respective parties hereto.
7. MISCELLANEOUS. This Subordinated Note and any document or instrument executed
in connection herewith shall be governed by and construed in accordance with the
internal law of the State of Indiana, and shall be deemed to have been executed
in the State of Indiana. Holder and Company hereby irrevocably submit to the
jurisdiction of any Indiana State or Federal court sitting in St. Xxxxxx County,
Indiana, over any action or proceeding arising out of or relating to this
Subordinated Note and hereby irrevocably agrees that all claims in respect of
such action or proceeding shall be heard and determined in only such Indiana
State or Federal Court. Holder and Company hereby irrevocably waive, to the
fullest extent it may effectively do so, the defense of an inconvenient forum to
the maintenance of such action or proceeding. Holder and Company irrevocably
consent to the service of copies of the summons and complaint and any other
process which may be served in any such action or proceeding by the mailing by
United States certified mail, return receipt requested, of copies of such
process at the address specified herein. Unless the context requires otherwise,
wherever used herein the singular shall include the plural and vice versa, and
the use of one gender shall also denote the other. Captions herein are for
convenience of reference only and shall not define or limit any of the terms or
provisions hereof; references herein to Sections or provisions without reference
to the document in which they are contained are references to this Subordinated
Note. This Subordinated Note shall bind the Company, its successors and assigns,
and shall inure to the benefit of Holder, its successors and assigns, except
that the Company may not transfer or assign any of its rights or interest
hereunder without the prior written consent of Holder. The Company agrees to pay
upon demand all expenses (including without limitation attorneys' fees, legal
costs and expenses of Holder, in each case whether in or out of court, in
original or appellate proceedings or in bankruptcy) incurred or paid by Holder
or any holder hereof in connection with the enforcement or preservation of its
rights hereunder or under any document or instrument executed in
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connection herewith. The Company expressly and irrevocably waives notice of
dishonor or default as well as presentment, protest, demand and notice of any
kind in connection herewith.
QUALITY DINING, INC.
Address: ________________________________
________________________________
________________________________
By: _____________________________________
Its: ____________________________________
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