CREDIT AGREEMENT
dated as of May 14, 1999
Among
COCO'S RESTAURANTS, INC.,
CARROWS RESTAURANTS, INC.,
JOJOS RESTAURANTS, INC.,
as Borrowers,
FRD ACQUISITION CO.,
FRI-M CORPORATION,
as Guarantors,
THE LENDERS NAMED HEREIN,
CREDIT LYONNAIS NEW YORK BRANCH,
as Administrative Agent,
and
THE CHASE MANHATTAN BANK,
as Documentation Agent and Syndication Agent
CHASE SECURITIES INC.
and
CREDIT LYONNAIS NEW YORK BRANCH,
as Book Managers
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
PAGE
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SECTION 1.01. Defined Terms .............................................................. 1
SECTION 1.02. Terms Generally ............................................................ 18
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments ................................................................ 18
SECTION 2.02. Loans ...................................................................... 18
SECTION 2.03. Borrowing Procedure ........................................................ 20
SECTION 2.04. Evidence of Debt; Repayment of Loans ....................................... 20
SECTION 2.05. Fees ....................................................................... 21
SECTION 2.06. Interest on Loans .......................................................... 22
SECTION 2.07. Default Interest ........................................................... 22
SECTION 2.08. Alternate Rate of Interest ................................................. 22
SECTION 2.09. Termination and Reduction of Commitments ................................... 22
SECTION 2.10. Conversion and Continuation of Borrowings ................................. 23
SECTION 2.11. Amortization of Term Loans ................................................. 24
SECTION 2.12. Prepayment ................................................................. 24
SECTION 2.13. Reserve Requirements; Change in Circumstances............................... 26
SECTION 2.14. Change in Legality ......................................................... 27
SECTION 2.15. Indemnity................................................................... 27
SECTION 2.16. Pro Rata Treatment.......................................................... 28
SECTION 2.17. Sharing of Setoffs.......................................................... 28
SECTION 2.18. Payments.................................................................... 28
SECTION 2.19. Taxes....................................................................... 29
SECTION 2.20. Assignment of Commitments Under Certain Circumstances;
Duty to Mitigate...................................................... 30
SECTION 2.21. Letters of Credit........................................................... 31
SECTION 2.22. Swingline Loans............................................................. 34
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Organization; Powers ....................................................... 35
SECTION 3.02. Authorization .............................................................. 35
SECTION 3.03. Enforceability ............................................................. 35
SECTION 3.04. Governmental Approvals ..................................................... 35
SECTION 3.05. Financial Statements ....................................................... 36
SECTION 3.06. No Material Adverse Change ................................................. 36
SECTION 3.07. Title to Properties; Possession Under Leases ............................... 36
SECTION 3.08. Subsidiaries ............................................................... 36
SECTION 3.09. Litigation; Compliance with Laws ........................................... 36
SECTION 3.10. Agreements ................................................................. 37
SECTION 3.11. Federal Reserve Regulations ................................................ 37
SECTION 3.12. Investment Company Act; Public Utility Holding Company Act ................. 37
PAGE
SECTION 3.13. Use of Proceeds ............................................................ 37
SECTION 3.14. Tax Returns ................................................................ 37
SECTION 3.15. No Material Misstatements .................................................. 37
SECTION 3.16. Employee Benefit Plans ..................................................... 37
SECTION 3.17. Environmental Matters ...................................................... 38
SECTION 3.18. Insurance .................................................................. 39
SECTION 3.19. Security Documents ......................................................... 39
SECTION 3.20. Labor Matters .............................................................. 39
SECTION 3.21. Solvency ................................................................... 39
SECTION 3.22. Year 2000 .................................................................. 40
ARTICLE IV
CONDITIONS OF LENDING
SECTION 4.01. All Credit Events .......................................................... 40
SECTION 4.02. First Credit Event ......................................................... 41
ARTICLE V
AFFIRMATIVE COVENANTS
SECTION 5.01. Existence; Businesses and Properties ....................................... 45
SECTION 5.02. Insurance .................................................................. 45
SECTION 5.03. Obligations and Taxes ...................................................... 45
SECTION 5.04. Financial Statements, Reports, etc. ........................................ 46
SECTION 5.05. Litigation and Other Notices ............................................... 47
SECTION 5.06. Employee Benefits .......................................................... 47
SECTION 5.07. Maintaining Records; Access to Properties and Inspections .................. 48
SECTION 5.08. Use of Proceeds ............................................................ 48
SECTION 5.09. Compliance with Environmental Laws ......................................... 48
SECTION 5.10. Preparation of Environmental Reports ....................................... 48
SECTION 5.11. Further Assurances.......................................................... 48
PAGE
ARTICLE VI
NEGATIVE COVENANTS
SECTION 6.01. Indebtedness ............................................................... 49
SECTION 6.02. Liens ...................................................................... 50
SECTION 6.03. Sale and Lease-Back Transactions ........................................... 51
SECTION 6.04. Investments, Loans and Advances ............................................ 51
SECTION 6.05. Mergers, Consolidations, Sales of Assets and Acquisitions .................. 52
SECTION 6.06. Dividends and Distributions; Restrictions on Ability of
Subsidiaries to Pay Dividends ........................................ 52
SECTION 6.07. Transactions with Affiliates ............................................... 53
SECTION 6.08. Other Indebtedness and Agreements........................................... 54
SECTION 6.09. Operating Leases ........................................................... 54
SECTION 6.10. Capital Expenditures........................................................ 54
SECTION 6.11. Consolidated Total Debt Ratio............................................... 54
SECTION 6.12. Consolidated Senior Secured Debt Ratio...................................... 55
SECTION 6.13. Consolidated Interest Coverage Ratio........................................ 56
SECTION 6.14. Consolidated Fixed Charge Coverage Ratio.................................... 56
SECTION 6.15. Business of FRD, the Borrower and the Subsidiaries.......................... 57
SECTION 6.16. Fiscal Year ................................................................ 57
ARTICLE VII
EVENTS OF DEFAULT 58
ARTICLE VIII
THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT 60
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices .................................................................... 62
SECTION 9.02. Survival of Agreement ...................................................... 63
SECTION 9.03. Binding Effect ............................................................. 63
SECTION 9.04. Successors and Assigns ..................................................... 63
SECTION 9.05. Expenses; Indemnity ........................................................ 65
SECTION 9.06. Right of Setoff ............................................................ 66
SECTION 9.07. Applicable Law ............................................................. 66
SECTION 9.08. Waivers; Amendment ......................................................... 67
SECTION 9.09. Interest Rate Limitation ................................................... 67
SECTION 9.10. Entire Agreement ........................................................... 67
SECTION 9.11. WAIVER OF JURY TRIAL ....................................................... 68
SECTION 9.12. Severability ............................................................... 68
SECTION 9.13. Counterparts ............................................................... 68
SECTION 9.14. Headings ................................................................... 68
PAGE
SECTION 9.15. Jurisdiction; Consent to Service of Process ................................ 68
EXHIBITS AND SCHEDULES
Schedule 1.01(a) Existing Letters of Credit
Schedule 1.01(b) Mortgaged Property
Schedule 1.01(c) Subsidiary Guarantors
Schedule 2.01(a) Revolving Commitments
Schedule 2.01(b) Term Commitments
Schedule 3.08 Subsidiaries
Schedule 3.09 Litigation
Schedule 3.17 Environmental Matters
Schedule 3.18 Insurance
Schedule 3.19(d) Mortgage Filing Offices
Schedule 6.01 Indebtedness
Schedule 6.02 Indebtedness
Schedule 6.06 Agreements Restricting Dividends
Exhibit A Form of Administrative Questionnaire
Exhibit B Form of Assignment and Acceptance
Exhibit C Form of Borrowing Request
Exhibit D Form of Indemnity, Subrogation and Contribution
Agreement
Exhibit E Form of Deed of Trust
Exhibit F Form of Parent Guarantee Agreement
Exhibit G Form of FRD Guarantee Agreement
Exhibit H Form of Pledge Agreement
Exhibit I Form of Security Agreement
Exhibit J Form of Subsidiary Guarantee Agreement
Exhibit K Form of Opinion of Parker, Poe, Xxxxx and
Xxxxxxxxx, L.L.P.
Exhibit L Form of Local Counsel Opinion
CREDIT AGREEMENT dated as of May 14, 1999
(this "AGREEMENT"), among COCO'S RESTAURANTS, INC., a
California corporation, CARROWS RESTAURANTS, INC., a
California corporation, XXXX'X RESTAURANTS, INC., a
California corporation (each of the foregoing,
individually, a "BORROWER" and, collectively, the
"BORROWERS"), FRD ACQUISITION CO., a Delaware
corporation ("FRD"), FRI-M CORPORATION, a Delaware
corporation and a direct wholly owned subsidiary of
FRD ("FRI-M"), the Lenders (as defined in Article I),
CREDIT LYONNAIS NEW YORK BRANCH, a licensed branch of
a banking corporation organized and existing under
the laws of the Republic of France ("CL"), as
swingline lender (in such capacity, the "SWINGLINE
LENDER"), as issuing bank, as administrative agent
(in such capacity, the "ADMINISTRATIVE AGENT") and as
collateral agent (in such capacity, the "COLLATERAL
AGENT") for the Lenders, and THE CHASE MANHATTAN
BANK, a New York banking corporation ("CHASE"), as
documentation agent (in such capacity, the
"DOCUMENTATION AGENT") and as syndication agent (in
such capacity, the "SYNDICATION AGENT").
The Borrowers have requested the Lenders to extend credit in the form
of (a) Term Loans (such term and each other capitalized term used but not
otherwise defined herein having the meaning given it in Article I) on the
Closing Date, in an aggregate principal amount of $30,000,000 and (b) Revolving
Loans at any time and from time to time prior to the Maturity Date, in an
aggregate principal amount at any time outstanding not in excess of $40,000,000
minus the aggregate L/C Exposure and Swingline Exposure at such time. The
Borrowers have requested the Swingline Lender to extend credit, at any time and
from time to time prior to the Maturity Date, in the form of Swingline Loans.
The Borrowers have requested the Issuing Banks to issue letters of credit, in an
aggregate face amount at any time outstanding not in excess of $20,000,000, to
support payment obligations incurred in the ordinary course of business by the
Borrowers and their wholly owned subsidiaries. The proceeds of the Loans are to
be used solely (a) on the Closing Date, to repay or refinance loans under the
Existing Credit Agreement and (b) after the Closing Date, for general corporate
purposes.
The Lenders and the Swingline Lender are willing to extend such credit
to the Borrowers and the Issuing Banks are willing to issue letters of credit
for the account of the Borrowers on the terms and subject to the conditions set
forth herein. Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINED TERMS. As used in this Agreement, the following
terms shall have the meanings specified below:
"ABR BORROWING" shall mean a Borrowing comprised of ABR Loans.
"ABR LOAN" shall mean any Loan bearing interest at a rate determined by
reference to the Alternate Base Rate in accordance with the provisions of
Article II.
"ADJUSTED LIBO RATE" shall mean, with respect to any Eurodollar
Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to the product of (a) the LIBO Rate
in effect for such Interest Period and (b) Statutory Reserves.
2
"ADMINISTRATIVE AGENT FEES" shall have the meaning assigned to such
term in Section 2.05(b).
"ADMINISTRATIVE QUESTIONNAIRE" shall mean an Administrative
Questionnaire in the form of Exhibit A.
"AFFILIATE" shall mean, when used with respect to a specified person,
another person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the person
specified.
"ALTERNATE BASE RATE" shall mean, for any day, a rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greatest of
(a) the Prime Rate in effect on such day, (b) the Base CD Rate in effect on such
day plus 1% and (c) the Federal Funds Effective Rate in effect on such day plus
1/2 of 1%. If for any reason the Administrative Agent shall have determined
(which determination shall be conclusive absent manifest error) that it is
unable to ascertain the Base CD Rate or the Federal Funds Effective Rate or both
for any reason, including the inability or failure of the Administrative Agent
to obtain sufficient quotations in accordance with the terms of the definition
thereof, the Alternate Base Rate shall be determined without regard to clause
(b) or (c), or both, of the preceding sentence, as appropriate, until the
circumstances giving rise to such inability no longer exist. Any change in the
Alternate Base Rate due to a change in the Prime Rate, the Base CD Rate or the
Federal Funds Effective Rate shall be effective on the effective date of such
change in the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate,
respectively. The term "PRIME RATE" shall mean the rate of interest per annum
publicly announced from time to time by the Administrative Agent as its prime
rate in effect at its principal office in New York City; each change in the
Prime Rate shall be effective on the date such change is publicly announced as
being effective. The term "BASE CD RATE" shall mean the sum of (a) the product
of (i) the Three-Month Secondary CD Rate and (ii) Statutory Reserves and (b) the
Assessment Rate. The term "FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any
day, 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 on the next succeeding Business Day by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day that is a Business Day,
the average of the quotations for the day for such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by it.
"APPLICABLE PERCENTAGE" shall mean, with respect to any Revolving
Lender, the percentage of the total Revolving Commitments represented by such
Lender's Revolving Commitment. If the Revolving Commitments have terminated or
expired, the Applicable Percentages shall be determined based upon the Revolving
Commitments most recently in effect, giving effect to any assignments.
"APPROVED FUND" shall mean, with respect to any Lender that is a fund
that invests in bank loans in the ordinary course of its business, any other
fund or trust or entity (a) that invests in bank loans in the ordinary course of
its business and (b) with respect to which the same investment advisor as that
of such Lender (or an Affiliate of such investment advisor) acts as the sole
investment advisor or manager.
"ASSESSMENT RATE" shall mean for any date the annual rate (rounded
upwards, if necessary, to the next 1/100 of 1%) most recently estimated by the
Administrative Agent as the then current net annual assessment rate that will be
employed in determining amounts payable by the Administrative Agent to the
Federal Deposit Insurance Corporation (or any successor thereto) for insurance
by such Corporation (or such successor) of time deposits made in dollars at the
Administrative Agent's domestic offices.
"ASSET SALE" shall mean any sale, lease, transfer, assignment, loss,
damage or destruction (in the case of loss, damage or destruction, to the extent
covered by insurance) or other disposition (by merger or otherwise) of assets
(including trademarks and other intangibles), business units, individual
business assets or property of FRD, any Borrower or any other Subsidiary,
including the sale, transfer or disposition of any capital stock or real
property, to any person other than FRD, any Borrower or any other Subsidiary;
PROVIDED, HOWEVER, that none of the following shall be deemed to be an Asset
Sale: (a) the sale of inventory in the ordinary course of business or (b) the
sale in the ordinary course of business of damaged, worn out or obsolete
assets that are no longer necessary for the proper conduct of FRD's or the
applicable Borrower's or other Subsidiary's business.
3
"ASSIGNMENT AND ACCEPTANCE" shall mean an assignment and acceptance
entered into by a Lender and an assignee, and accepted by the Administrative
Agent, in the form of Exhibit B or such other form as shall be approved by the
Administrative Agent.
"BOARD" shall mean the Board of Governors of the Federal Reserve System
of the United States of America.
"BORROWING" shall mean a group of Loans of the same Class and Type made
by the Lenders on a single date to one or more Borrowers and as to which a
single Interest Period is in effect.
"BORROWING REQUEST" shall mean a request by one or more Borrowers in
accordance with the terms of Section 2.03 and substantially in the form of
Exhibit C.
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or day
on which banks in New York City are authorized or required by law to close;
PROVIDED, HOWEVER, that when used in connection with a Eurodollar Loan, the term
"BUSINESS DAY" shall also exclude any day on which banks are not open for
dealings in dollar deposits in the London interbank market.
"CAPEX FINANCING" shall mean, with respect to any Consolidated Capital
Expenditure, the incurrence by FRD, any Borrower or any other Subsidiary of any
Indebtedness secured (whether such security is limited to principal or
otherwise) by a mortgage or other Lien, including any Lien under a Capital Lease
Obligation, on the asset that is the subject of such Consolidated Capital
Expenditure, to the extent that the Net Cash Proceeds of such Indebtedness do
not exceed the amount of such Consolidated Capital Expenditure.
"CAPITAL LEASE OBLIGATIONS" of any person shall mean the obligations of
such person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"CASUALTY" shall have the meaning set forth in the Mortgages.
"CASUALTY PROCEEDS" shall have the meaning set forth in the Mortgages.
"CHANGE IN CONTROL" shall mean (a) any person or group (within the
meaning of Rule 13d-5 of the Securities Exchange Act of 1934 as in effect on the
date hereof) shall own, directly or indirectly, beneficially or of record,
shares representing more than 25% of the aggregate ordinary voting power
represented by the issued and outstanding capital stock of Parent, PROVIDED that
Xxxxxx Xxxxxx Company, Inc., Magten Asset Management Corporation, and Xxxxx
Capital Management, Inc. may each own, directly or indirectly, beneficially or
of record, shares representing up to 35% of the aggregate ordinary voting power
represented by the issued and outstanding capital stock of Parent without
causing a Change of Control; (b) (i) any person (other than Parent) shall own,
directly or indirectly, beneficially or of record, any shares of capital stock
of FRD or (ii) any person (other than (x) FRD or any wholly owned Subsidiary or
(y) solely with respect to its beneficial ownership of shares of capital stock
of any Borrower or other Subsidiary through FRD, Parent) shall own, directly or
indirectly, beneficially or of record, any shares of capital stock of (A) any
Borrower or (B) any other Subsidiary that owns, directly or indirectly,
beneficially or of record, any shares of capital stock of any Borrower; (c) a
majority of the seats (other than vacant seats) on the board of directors of
Parent shall at any time be occupied by persons who were neither (i) nominated
by the board of directors of Parent, nor (ii) appointed by directors so
nominated; (d) any change in control (or similar event, however denominated)
with respect to Parent or FRD shall occur under, and as defined in, any
indenture or agreement in respect of Indebtedness to which Parent or FRD is a
party; or (e) any person or group shall otherwise directly or indirectly Control
Parent or (except for Parent) FRD.
"CLASS", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans,
Term Loans or Swingline Loans and, when used
4
in reference to any Commitment, refers to whether such Commitment is a
Revolving Commitment or Term Commitment.
"CLOSING DATE" shall mean the date of the first Credit Event.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"COLLATERAL" shall mean all the "Collateral" as defined in any Security
Document and shall also include the Mortgaged Property.
"COMMITMENT" shall mean a Revolving Commitment, a Term Commitment or
any combination thereof (as the context requires).
"COMMITMENT FEE" shall have the meaning assigned to such term in
Section 2.05(a).
"CONCENTRATION ACCOUNT" shall have the meaning set forth in the
Security Agreement.
"CONDEMNATION" shall have the meaning set forth in the Mortgages.
"CONDEMNATION PROCEEDS" shall have the meaning set forth in the
Mortgages.
"CONFIDENTIAL INFORMATION MEMORANDUM" shall mean the Confidential
Information Memorandum of the Borrowers dated April, 1999, including all
attachments, exhibits and appendixes thereto.
"CONSOLIDATED CAPITAL EXPENDITURES" shall mean, for any period, without
duplication, the sum of the aggregate of all expenditures (whether paid in cash
or other consideration or accrued as a liability) by FRD, the Borrowers and the
other Subsidiaries during such period that, in conformity with GAAP, would be
included in "additions to property, plant or equipment" or comparable items
reflected in the consolidated statement of cash flows of FRD, the Borrowers and
the other Subsidiaries for such period, including (a) Capital Lease Obligations
and (b) expenditures for equipment that is purchased simultaneously with the
trade-in of existing equipment owned by any Borrower or any of the other
Subsidiaries to the extent of the gross amount of the purchase price less the
book value of the equipment being traded in at such time, but excluding (c)
interest capitalized during construction and (d) expenditures made in connection
with the replacement or restoration of assets, to the extent reimbursed or
financed from insurance proceeds paid on account of the loss of or the damage to
the assets being replaced or restored, or from awards of compensation arising
from the taking by condemnation or eminent domain of such assets being replaced,
and net of cash amounts received by the Borrowers and the other Subsidiaries
from other persons during that period in reimbursement of Consolidated Capital
Expenditures made by the Borrowers and the other Subsidiaries.
"CONSOLIDATED CASH INTEREST EXPENSE" shall mean, for any period,
Consolidated Interest Expense MINUS interest not paid in cash (including
amortization of (a) discount and deferred debt expenses and (b) fees with
respect to Interest Rate Protection Agreements) payable in connection with the
incurrence of Indebtedness to the extent included in interest expense in
accordance with GAAP (including fees and expenses in connection with the
Transactions).
"CONSOLIDATED EBITDA" shall mean with respect to FRD, the Borrowers and
the other Subsidiaries for any period, all as determined in accordance with GAAP
on a consolidated basis after eliminating intercompany items and any gain or
loss resulting from any Asset Sales (other than Asset Sales permitted by Section
6.05(a) or (b)), the net income (or net loss) for such period, PLUS (a) to the
extent deducted in computing such net income (or net loss) the sum of (i)
depreciation expense, (ii) amortization expense, (iii) other non-cash charges
(including to the extent reflected as an expense in determining net income (or
net loss) accrued but unpaid (A) Permitted Management Fees in an amount not to
exceed $10,000,000 in any fiscal year, (B) Permitted Franchise Fees and (C)
amounts owed by FRD or the Subsidiaries under the Tax Allocation Agreement),
(iv) provisions for LIFO adjustment for inventory valuation, (v) net total
Federal, state and local income tax expense, (vi) Consolidated Interest Expense,
(vii) extraordinary losses, (viii) any non-recurring charge or restructuring
charge that in accordance with GAAP is excluded from operating
5
income and (ix) the cumulative effect of any change in accounting principles as
shown on FRD's consolidated statement of income for such period MINUS (b)
extraordinary gains MINUS (c) the amount of cash expended in such period in
respect of (i) any amount that, under clause (a)(viii) above, was taken into
account in determining Consolidated EBITDA for such or any prior period or (ii)
any previously accrued but unpaid (A) Permitted Management Fees, (B) Permitted
Franchise Fees or (C) amounts owed by FRD or the Subsidiaries under the Tax
Allocation Agreement.
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO" shall mean, for any period,
the ratio of (a) the sum of (i) Consolidated EBITDA for such period and (ii)
Consolidated Lease Expense for such period to (b) the sum of (i) Consolidated
Cash Interest Expense for such period and (ii) Consolidated Lease Expense for
such period.
"CONSOLIDATED INTEREST COVERAGE RATIO" shall mean, for any period, the
ratio of (a) Consolidated EBITDA for such period to (b) Consolidated Cash
Interest Expense for such period.
"CONSOLIDATED INTEREST EXPENSE" shall mean, for any period, all
interest expense (including the interest component in respect of Capital Lease
Obligations), net of interest income, accrued or paid by FRD, the Borrowers and
the other Subsidiaries during such period in respect of Indebtedness of FRD, the
Borrowers and the other Subsidiaries, including (a) any amortization of initial
debt discount or any fees (including fees with respect to Interest Rate
Protection Agreements) payable in connection with the incurrence of Indebtedness
to the extent included in interest expense in accordance with GAAP (including
fees and expenses in connection with the Transactions), (b) any commitment fees,
agent's and other regularly scheduled fees and charges in respect of such
Indebtedness, (c) commissions and other fees and charges payable in connection
with letters of credit, (d) the net payment, if any, payable in connection with
all interest rate protection contracts and (e) interest capitalized during
construction, all determined on a consolidated basis in accordance with GAAP
after eliminating all intercompany items.
"CONSOLIDATED LEASE EXPENSE" shall mean, for any period, all payment
obligations of FRD, the Borrowers and the other Subsidiaries during such period
under Operating Leases, as determined on a consolidated basis for FRD, the
Borrowers and the other Subsidiaries in accordance with GAAP.
"CONSOLIDATED SENIOR SECURED DEBT" shall mean, at any date and without
duplication, Consolidated Total Debt at such date MINUS (a) the aggregate
principal amount of Senior Notes outstanding on such date and (b) to the extent
included in computing such Consolidated Total Debt, the aggregate amount of
other unsecured Indebtedness of FRD, the Borrowers and the other Subsidiaries at
such date on a consolidated basis in accordance with GAAP.
"CONSOLIDATED SENIOR SECURED DEBT RATIO" shall mean, for any period,
the ratio of (a) Consolidated Senior Secured Debt on the last day of such period
to (b) Consolidated EBITDA for such period.
"CONSOLIDATED TOTAL DEBT" shall mean, at any date and without
duplication, the aggregate amount of all Indebtedness of FRD, the Borrowers and
the other Subsidiaries at such date on a consolidated basis in accordance with
GAAP (other than (a) the undrawn amount of outstanding letters of credit, (b)(i)
Indebtedness of the type described in clause (g) of the definition of the term
"Indebtedness" or (ii) Indebtedness of the type referred to in clause (h) or (i)
or the final sentence of such definition to the extent that the Indebtedness of
the other person referred to in such clause (h) or (i) or such final sentence is
Indebtedness of the type referred to in clause (a) or (b)(i) above and (c)
accrued but unpaid (i) Permitted Management Fees accruing in an amount not to
exceed $10,000,000 in any fiscal year, (ii) Permitted Franchise Fees and (iii)
amounts owed by FRD or the Subsidiaries under the Tax Allocation Agreement).
"CONSOLIDATED TOTAL DEBT RATIO" shall mean, for any period, the ratio
of (a) Consolidated Total Debt on the last day of such period to (b)
Consolidated EBITDA for such period.
"CONTROL" shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
person, whether through the ownership of voting securities, by contract or
otherwise, and the terms "CONTROLLING" and "CONTROLLED" shall have meanings
correlative thereto.
6
"CREDIT EVENT" shall have the meaning assigned to such term in Section
4.01.
"DEFAULT" shall mean any event or condition which upon notice, lapse of
time or both would constitute an Event of Default.
"DISBURSEMENT ACCOUNT" shall mean the account established at an office
of the Administrative Agent located in New York City, in the name of the
Borrowers.
"DOLLARS" or "$" shall mean lawful money of the United States of
America.
"DOMESTIC SUBSIDIARIES" shall mean all Subsidiaries incorporated or
organized under the laws of the United States of America, any State thereof or
the District of Columbia.
"ELIGIBLE ASSIGNEE" shall mean (a) a commercial bank having total
assets in excess of $500,000,000; (b) a finance company, insurance company or
other financial institution or fund, in each case acceptable to the
Administrative Agent, that in the ordinary course of business extends credit of
the type represented by the Loans and has total assets in excess of $200,000,000
and whose becoming an assignee would not constitute a prohibited transaction
under Section 4975 of ERISA; (c) an Approved Fund; and (d) any other financial
institution reasonably satisfactory to FRD and the Administrative Agent.
"ENVIRONMENT" shall mean ambient air, surface water and groundwater
(including potable water, navigable water and wetlands), the land surface or
subsurface strata, the workplace or as otherwise defined in any Environmental
Law.
"ENVIRONMENTAL CLAIM" shall mean any written accusation, allegation,
notice of violation, claim, demand, order, directive, cost recovery action or
other cause of action by, or on behalf of, any Governmental Authority or any
other person not a party to this Agreement for damages, injunctive or equitable
relief, personal injury (including sickness, disease or death), Remedial Action
costs, tangible or intangible property damage, natural resource damages,
nuisance, pollution, any adverse effect on the environment caused by any
Hazardous Material, or for fines, penalties or restrictions, resulting from or
based upon (a) the existence, or the continuation of the existence, of a Release
(including sudden or non-sudden, accidental or non-accidental Releases), (b)
exposure to any Hazardous Material, (c) the presence, use, handling,
transportation, storage, treatment or disposal of any Hazardous Material or (d)
the violation or alleged violation of any Environmental Law or Environmental
Permit.
"ENVIRONMENTAL LAW" shall mean any and all applicable present and
future treaties, laws, rules, regulations, codes, ordinances, orders, decrees,
judgments, injunctions, notices or binding agreements issued, promulgated or
entered into by any Governmental Authority, relating in any way to the
environment, preservation or reclamation of natural resources, the management,
Release or threatened Release of any Hazardous Material.
"ENVIRONMENTAL PERMIT" shall mean any permit, approval, authorization,
certificate, license, variance, filing or permission required by or from any
Governmental Authority pursuant to any Environmental Law.
"EQUITY INTERESTS" shall mean shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a person.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as the same may be amended from time to time.
"ERISA AFFILIATE" shall mean any trade or business (whether or not
incorporated) that, together with Parent, FRD or any Borrower, is treated as a
single employer under Section 414(b) or (c) of the Code, or solely for purposes
of Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
7
"ERISA EVENT" shall mean (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder, with respect to a
Plan (other than events the reporting of which has been waived by the PBGC); (b)
the adoption of any amendment to a Plan that would require the provision of
security pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA; (c)
the existence with respect to any Plan of an "accumulated funding deficiency"
(as defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (d) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (e) the incurrence of any liability under Title IV of ERISA
with respect to the termination of any Plan or the withdrawal or partial
withdrawal of Parent, FRD or any Borrower or any of its ERISA Affiliates from
any Plan or Multiemployer Plan; (f) the receipt by any Borrower or any ERISA
Affiliate from the PBGC or a plan administrator of any notice relating to the
intention to terminate any Plan or Plans or to appoint a trustee to administer
any Plan; (g) the receipt by any Borrower or any ERISA Affiliate of any notice
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA; (h) the occurrence of a "PROHIBITED
TRANSACTION" with respect to which Parent, FRD, any Borrower or any of their
respective subsidiaries is a "disqualified person" (within the meaning of
Section 4975 of the Code) or with respect to which Parent, FRD, any Borrower or
any such subsidiary could otherwise be liable; and (i) any other event or
condition with respect to a Plan or Multiemployer Plan that could reasonably be
expected to result in liability of Parent, FRD, or any Borrower.
"EURODOLLAR BORROWING" shall mean a Borrowing comprised of Eurodollar
Loans.
"EURODOLLAR LOAN" shall mean any Loan bearing interest at a rate
determined by reference to the Adjusted LIBO Rate in accordance with the
provisions of Article II.
"EVENT OF DEFAULT" shall have the meaning assigned to such term in
Article VII.
"EXISTING CREDIT AGREEMENT" shall mean the Credit Agreement dated as of
May 23, 1996, as amended prior to the date hereof, among FRD, as guarantor,
FRI-M, as borrower, the lenders named therein, Bankers Trust Company, The Chase
Manhattan Bank (formerly known as Chemical Bank) and Citicorp USA, Inc., as co-
syndication agents, and Credit Lyonnais New York Branch, as administrative
agent.
"EXISTING LETTERS OF CREDIT" shall mean each letter of credit that (a)
was issued under the Existing Credit Agreement for the account of FRI-M, (b) is
outstanding on the Closing Date and (c) is listed on Schedule 1.01(a).
"EXCESS CASH FLOW" shall mean, for any period, an amount (if positive)
equal to:
(a) the sum, without duplication, of the amounts for such
period of (i) Consolidated EBITDA, adjusted to exclude any gains or
losses attributable to Prepayment Events and (ii) the amount (which may
be a negative number) representing the difference between Net Working
Capital as of the beginning of such period and Net Working Capital as
of the end of such period; MINUS
(b) the sum, without duplication, of the amounts for such
period of:
(i) the aggregate principal amount of Indebtedness
repaid or prepaid by FRD and the Subsidiaries during such
period (excluding (A) Indebtedness in respect of Revolving
Loans, Swingline Loans and drawn and unreimbursed Letters of
Credit, (B) Term Loans prepaid pursuant to Section 2.12(a),
2.12(c) through (e), (C) repayments or prepayments of
Indebtedness financed by incurring other Indebtedness, to the
extent that mandatory principal payments in respect of such
other Indebtedness would pursuant to this clause (b)(i) be
deducted in determining Excess Cash Flow when made and (D)
Indebtedness referred to in clauses (v), (vi) and (vii)(B) of
Section 6.01(a));
(ii) Consolidated Capital Expenditures for such
period, except to the extent that (A) such Consolidated
Capital Expenditures are financed with Indebtedness and
8
(B) mandatory principal payments in respect of such
Indebtedness would, pursuant to clause (b)(i) above, be
deducted in determining Excess Cash Flow when made;
(iii) Consolidated Cash Interest Expense for such
period; and
(iv) current taxes paid or payable in cash with
respect to such period based on income of FRD and the
Subsidiaries for such period.
"FAIR MARKET VALUE" shall mean, with respect to any asset, the value of
the consideration obtainable in a sale of such asset in the open market at a
specific date assuming a sale by a willing seller to a willing purchaser dealing
at arm's length and arranged in an orderly manner over a reasonable period of
time having regard to the nature and characteristics of such asset, which value
shall, for any asset with a Fair Market Value in excess of $2,000,000, be either
(a) the value of such asset as determined in good faith by the Board of
Directors of FRD or (b) if such asset shall have been the subject of an
appraisal done reasonably contemporaneously by any independent third party
appraiser and the basic assumptions underlying such appraisal are reasonable,
the value of such asset as stated in such appraisal.
"FEE LETTER" shall mean the Fee Letter dated March 30, 1999, among the
Borrowers, Chase and the Administrative Agent relating to the credit facilities
being made available to the Borrowers under this Agreement.
"FEES" shall mean the Commitment Fees, the Administrative Agent's Fees,
the L/C Participation Fees and the Issuing Bank Fees.
"FINANCIAL OFFICER" of any corporation shall mean the chief financial
officer, principal accounting officer, Treasurer, Assistant Treasurer, or
Controller of such corporation.
"FOREIGN SUBSIDIARY" shall mean any Subsidiary that is not a Domestic
Subsidiary.
"FRD GUARANTEE AGREEMENT" shall mean the FRD Guarantee Agreement,
substantially in the Form of Exhibit G, made by FRD and FRI-M in favor of the
Administrative Agent for the benefit of the Secured Parties.
"GAAP" shall mean generally accepted accounting principles applied on a
consistent basis.
"GOVERNMENTAL AUTHORITY" shall mean any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or regulatory
body.
"GUARANTEE" of or by any person shall mean any obligation, contingent
or otherwise, of such person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other person (the "PRIMARY OBLIGOR") in any
manner, whether directly or indirectly, and including any obligation of such
person, direct or indirect, (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or to purchase (or to advance
or supply funds for the purchase of) any security for the payment of such
Indebtedness, (b) to purchase or lease property, securities or services for the
purpose of assuring the owner of such Indebtedness of the payment of such
Indebtedness or (c) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness; PROVIDED, HOWEVER, that the
term "Guarantee" shall not include endorsements for collection or deposit in the
ordinary course of business.
"GUARANTEE AGREEMENTS" shall mean the Parent Guarantee Agreement, the
FRD Guarantee Agreement and the Subsidiary Guarantee Agreement.
"GUARANTORS" shall mean Parent, FRD, the Borrowers and the Subsidiary
Guarantors.
"HAZARDOUS MATERIALS" shall mean all explosive or radioactive
substances or wastes, hazardous or toxic substances or wastes, pollutants or
contaminants, including petroleum or petroleum distillates, asbestos
9
or asbestos containing materials, polychlorinated biphenyls ("PCBS"),
PCB-containing materials or equipment, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"INDEBTEDNESS" of any person shall mean, without duplication, (a) all
indebtedness of such person for borrowed money; (b) all indebtedness of such
person for the deferred purchase price of property or services (other than
property, including inventory, and services purchased, and expense accruals and
deferred compensation items arising, in the ordinary course of business); (c)
all obligations of such person evidenced by notes, bonds, debentures or other
similar instruments (other than performance, surety and appeal bonds arising in
the ordinary course of business); (d) all indebtedness of such person created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such person (even though the rights and remedies
of the seller or lender under such agreement in the event of default are limited
to repossession or sale of such property); (e) all Capital Lease Obligations of
such person; (f) all reimbursement, payment or similar obligations of such
person, contingent or otherwise, under acceptance, letter of credit or similar
facilities; (g) all obligations of such person in respect of (i) currency swap
agreements, currency future or option contracts and other similar agreements
designed to hedge against fluctuations in foreign interest rates and (ii)
interest rate swap, cap or collar agreements, interest rate future or option
contracts and other similar agreements designed to hedge against fluctuations in
interest rates; (h) all Guarantees by such person of Indebtedness referred to in
clauses (a) through (g) above; and (i) all Indebtedness referred to in clauses
(a) through (h) above secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien upon
or in property (including accounts and contract rights) owned by such person,
even though such person has not assumed or become liable for the payment of such
Indebtedness. The Indebtedness of any person shall include the Indebtedness of
any partnership in which such person is a general partner. Notwithstanding the
foregoing, the amount of Indebtedness of FRD and the Subsidiaries (or any of
them) shall exclude, for all purposes in this Agreement, the fair market value
write-up of indebtedness relating to the fresh-start accounting treatment (in
accordance with GAAP) of FRD's consolidated financial statements resulting from
Parent's Chapter 11 bankruptcy case commenced in 1997 and its emergence
therefrom.
"INDEMNITY, SUBROGATION AND CONTRIBUTION AGREEMENT" shall mean the
Indemnity, Subrogation and Contribution Agreement, substantially in the form of
Exhibit D, among the Borrowers, the Subsidiary Guarantors and the Collateral
Agent.
"INTEREST PAYMENT DATE" shall mean, with respect to any Loan, the last
day of the Interest Period applicable to the Borrowing of which such Loan is a
part and, in the case of a Eurodollar Borrowing with an Interest Period of more
than three months' duration, each day that would have been an Interest Payment
Date had successive Interest Periods of three months' duration been applicable
to such Borrowing, and, in addition, the date of any prepayment of such
Borrowing (other than an ABR Borrowing that is a Revolving Borrowing or a
Swingline Loan) or refinancing of such Borrowing (other than an ABR Borrowing
that is a Revolving Borrowing or a Swingline Loan) with a Borrowing of a
different Type.
"INTEREST PERIOD" shall mean (a) as to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day (or, if there is no numerically corresponding day, on the last
day) in the calendar month that is 1, 2, 3 or 6 months thereafter, as the
Borrower may elect, and (b) as to any ABR Borrowing, the period commencing on
the date of such Borrowing and ending on the earliest of (i) the next succeeding
March 31, June 30, September 30 or December 31, (ii) the Maturity Date and (iii)
in the case of any ABR Borrowing that is a Term Borrowing, the date such
Borrowing is repaid or prepaid in accordance with Section 2.11 or 2.12;
PROVIDED, HOWEVER, that if any Interest Period would end on a day other than a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless, in the case of a Eurodollar Borrowing only, such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day. Interest
shall accrue from and including the first day of an Interest Period to but
excluding the last day of such Interest Period.
"INTEREST RATE PROTECTION AGREEMENT" shall mean, (i) any currency swap
agreement, currency future or option contract or other similar agreement or
arrangement designed to protect any Loan Party against
10
fluctuations in foreign interest rates and (ii) any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement, interest
rate future or option contract or other similar agreement or arrangement
designed to protect any Loan Party against fluctuations in interest rates, and,
in each case, not entered into for speculation.
"ISSUING BANK" shall mean CL, any Affiliate of CL, Chase, any Affiliate
of Chase or one or more other issuing banks satisfactory to the Administrative
Agent.
"ISSUING BANK FEES" shall have the meaning assigned to such term in
Section 2.05(c).
"L/C COMMITMENT" shall mean the commitment of the Issuing Banks to
issue Letters of Credit pursuant to Section 2.21.
"L/C DISBURSEMENT" shall mean a payment or disbursement made by the
applicable Issuing Bank pursuant to a Letter of Credit.
"L/C EXPOSURE" shall mean at any time the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time PLUS (b) the
aggregate principal amount of all L/C Disbursements that have not yet been
reimbursed at such time. The L/C Exposure of any Revolving Lender at any time
shall mean its Applicable Percentage of the aggregate L/C Exposure at such time.
"L/C PARTICIPATION FEE" shall have the meaning assigned to such term in
Section 2.05(c).
"LENDERS" shall mean (a) the financial institutions listed on Schedule
2.01(a) or 2.01(b) (in each case, other than any such financial institution that
has ceased to be a party hereto pursuant to an Assignment and Acceptance) and
(b) any financial institution that has become a party hereto pursuant to an
Assignment and Acceptance. Unless the context otherwise requires, the term
"LENDERS" shall include the Swingline Lender.
"LETTER OF CREDIT" shall mean any letter of credit issued pursuant to
Section 2.21.
"LIBO RATE" shall mean, with respect to any Eurodollar Borrowing for
any Interest Period, the rate appearing on Page 3750 of the Telerate Service (or
on any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO RATE" with respect to such
Eurodollar Borrowing for such Interest Period shall be the rate (rounded
upwards, if necessary, to the next 1/16 of 1%) at which dollar deposits
approximately equal in principal amount to such Eurodollar Borrowing and for a
maturity comparable to such Interest Period are offered to the principal London
office of the Administrative Agent in immediately available funds in the London
interbank market at approximately 11:00 a.m., London time, two Business Days
prior to the commencement of such Interest Period.
"LIEN" shall mean, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, encumbrance, charge or security interest in or on such
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.
"LIQUOR LICENSE AFFILIATES" shall mean each Affiliate of FRD or any
Borrower or any other Subsidiary that may be organized from time to time and the
business of which will be limited to the holding of a liquor license for any
business maintained by FRD or any Borrower or any other Subsidiary in any
jurisdiction where FRD, such Borrower or such other Subsidiary are prohibited
from holding a liquor license or where the holding by FRD, such Borrower or any
such other Subsidiary of a liquor license would in the best judgment of FRD be
impracticable.
11
"LOAN DOCUMENTS" shall mean this Agreement, the Letters of Credit, the
Guarantee Agreements, the Security Documents and the Indemnity, Subrogation and
Contribution Agreement.
"LOAN PARTIES" shall mean the Borrowers and the Guarantors.
"LOANS" shall mean the Revolving Loans, the Term Loans and the
Swingline Loans.
"MANAGEMENT SERVICES AGREEMENT" shall mean the Management Services
Agreement dated as of May 23, 1996, between Parent and FRD, as amended by the
First Amendment thereto dated as of May 14, 1999, as such agreement may be
amended from time to time; PROVIDED that the amended terms of such agreement are
no less favorable to FRD than those available to entities unrelated to Parent
and PROVIDED further that (A) no effect shall be given to any amendment to the
Management Services Agreement for purposes of this Agreement unless it shall
have been approved in writing by the Required Lenders and (B) that no amendment
shall be made to Section 4(c) of the Management Services Agreement unless it
shall have been approved in writing by the Required Lenders.
"MARGIN STOCK" shall have the meaning assigned to such term in
Regulation U.
"MATERIAL ADVERSE EFFECT" shall mean (a) a materially adverse effect on
or change in the business, assets, operations, properties, condition (financial
or otherwise) contingent liabilities (including but not limited to potential
environmental and employee health and safety liabilities), prospects or material
agreements of (i) Parent and its subsidiaries, taken as a whole, or (ii) FRD,
the Borrowers and the other Subsidiaries, taken as a whole, (b) material
impairment of the ability of any Borrower or any other Loan Party to perform any
of its obligations under any Loan Document to which it is or will be a party or
(c) material impairment of the rights of or benefits available to the Lenders
under any Loan Document.
"MATURITY DATE" shall mean the fourth anniversary of the Closing Date.
"MORTGAGED PROPERTY" shall mean each parcel of owned real property
specified on Schedule 1.01(b).
"MORTGAGES" shall mean the mortgages, deeds of trust, leasehold
mortgages, assignments of leases and rents, modifications and other security
documents delivered pursuant to clause (i) of Section 4.02(j) or pursuant to
Section 5.11, each substantially in the form of Exhibit E.
"MULTIEMPLOYER PLAN" shall mean a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"NET CASH PROCEEDS" shall mean, with respect to any Asset Sale, Capex
Financing or the sale, issuance or other disposition of any Indebtedness or
Equity Interests by (or capital contributions to) FRD, any Borrower or any other
Subsidiary, the aggregate amount of cash received from time to time by or on
behalf of such person in connection with such transaction (including in the case
of a Capex Financing any amount of cash received pursuant to such Capex
Financing paid to acquire the asset that is the subject of such Capex Financing)
after deducting therefrom only (a) reasonable and customary brokerage
commissions, underwriting fees and discounts, legal fees, finder's fees and
other similar fees and commissions, (b) the amount of taxes and other
governmental fees and charges, if any, payable in connection with or as a result
of such transaction, (c) in the case of any Asset Sale only, the amount of any
Indebtedness secured by a Lien on the asset that is the subject of such Asset
Sale that, by the terms of such transaction, is required to be repaid upon such
disposition, in each case to the extent, but only to the extent, that the
amounts so deducted are, at the time of receipt of such cash, properly
attributable to such transaction or to the asset that is the subject of such
Asset Sale and are actually paid by such person to a person that is not an
Affiliate and (d) in the case of Asset Sales only, an amount of such proceeds
equal to the amount of liabilities associated with such asset (including accrued
tax liabilities) incurred or retained by the person disposing of such asset as
part of such transaction to the extent, and for the period, such liabilities are
reserved against in accordance with GAAP or actually paid by such person to a
person that is not an Affiliate, PROVIDED that such proceeds shall be deemed
received by such person as and when such reserves are no longer maintained and
such liabilities are not actually so paid by such person.
12
"NET WORKING CAPITAL" means, at any date, (a) the consolidated current
assets of FRD and the Subsidiaries as of such date (excluding cash and Permitted
Investments) minus (b) the consolidated current liabilities of FRD and the
Subsidiaries as of such date (excluding current liabilities in respect of
Indebtedness). Net Working Capital at any date may be a positive or negative
number. Net Working Capital increases when it becomes more positive or less
negative and decreases when it becomes less positive or more negative.
"OBLIGATIONS" shall mean all obligations defined as "Obligations" in
the Guarantee Agreements and the Security Documents.
"OPERATING LEASES" shall mean, as applied to any person, any lease
(including leases that may be terminated by the lessee at any time) by such
person of any property (whether real, personal or mixed) that is not required to
be classified and accounted for as a capital lease on such person's balance
sheet in accordance with GAAP, other than any such lease under which such person
is the lessor.
"PARENT" shall mean Advantica Restaurant Group, Inc., a Delaware
corporation.
"PARENT CREDIT AGREEMENT" shall mean the Credit Agreement dated as of
January 7, 1998, as amended from time to time heretofore or hereafter, among
Parent, certain subsidiaries of Parent, the lenders named therein and Chase, as
swingline lender, issuing bank, administrative agent and collateral agent, and
shall include any refinancing credit agreement or other credit agreement to
which Parent becomes a party hereafter relating to any senior bank financing
with respect to Parent or its wholly owned subsidiaries (other than FRD, the
Borrowers or the other Subsidiaries) and under which Parent is either a borrower
or a guarantor.
"PARENT GUARANTEE AGREEMENT" shall mean the Parent Guarantee Agreement,
substantially in the form of Exhibit F, made by Parent in favor of the
Administrative Agent for the benefit of the Secured Parties.
"PARENT INDENTURE" shall have the meaning assigned to such term in
Section 4.02(z).
"PARENT NOTES" shall have the meaning assigned to such term in Section
4.02(z).
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to
and defined in ERISA.
"PERFECTION CERTIFICATE" shall mean the Perfection Certificate
substantially in the form of Annex 2 to the Security Agreement.
"PERMITTED ADVERTISING FEES" shall mean those advertising fees payable
by FRD or any Subsidiary in any fiscal quarter with respect to any of its
restaurants pursuant to a Permitted Franchise Agreement, PROVIDED that the
amount of such fees does not exceed 3% of such restaurant's net revenue for the
immediately preceding fiscal quarter.
"PERMITTED AMENDMENTS" means (a) any amendment or supplement to the
Senior Notes Documents that does not require a waiver or consent of the holders
of the Indebtedness evidenced thereby, other than an amendment or supplement
that (i) adds, directly or indirectly, any new provision commonly characterized
as an affirmative, negative or financial covenant or any new event of default,
collateral requirements or repayment requirement (including any put requirement)
that relates to any date prior to 91 days after the Maturity Date, (ii) modifies
in any manner adverse to FRD any existing provision commonly characterized as an
affirmative, negative or financial covenant or any existing event of default,
collateral requirement or repayment requirement (including any shortening of any
amortization requirement) that relates to any date prior to 91 days after the
Maturity Date or (iii) increases the interest rate thereon or modifies in any
manner adverse to FRD the time or manner of payment of such interest (including
any option or right to pay such interest in kind) or (b) any amendment or
supplement (i) to the Senior Notes Documents that is prohibited under clause (a)
above (other than any amendment or supplement prohibited by subclauses (i), (ii)
or (iii) of clause (a) above) or (ii) to any other indenture, instrument or
agreement pursuant to which any
13
Indebtedness or preferred stock is outstanding that, in each case, is not
materially adverse to the interests of the Lenders.
"PERMITTED FRANCHISE AGREEMENT" shall mean one or more franchise
agreements between FRD and Parent or any of Parent's subsidiaries pursuant to
which FRD franchises the Denny's or El Pollo Loco concept from Parent or such
subsidiary, as such agreement may be amended from time to time; PROVIDED that
(i) the amended terms of such agreement are no less favorable to FRD than those
available to franchisees unrelated to Parent, (ii) all up-front and similar fees
are waived, (iii) the advertising fees payable by FRD and the Subsidiaries
thereunder constitute Permitted Advertising Fees and (iv) no other royalties or
fees are payable by FRD or any of the Subsidiaries thereunder except Permitted
Royalties and PROVIDED further that no effect shall be given to any amendment to
the Permitted Franchise Agreement for purposes of this Agreement unless it shall
have been approved in writing by the Required Lenders.
"PERMITTED FRANCHISE FEES" shall mean the Permitted Advertising Fees
and the Permitted Royalties.
"PERMITTED INVESTMENTS" shall mean:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
of America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America),
in each case maturing within one year from the date of acquisition
thereof;
(b) without limiting the provisions of paragraph (d) below,
investments in commercial paper maturing within 180 days from the date
of acquisition thereof and having, at such date of acquisition, a
rating of at least "A-1" or the equivalent thereof from Standard &
Poor's Ratings Service or of at least "P-1" or the equivalent thereof
from Xxxxx'x Investors Service, Inc. or investments in other corporate
debt securities maturing within one year from the date of the
acquisition thereof and having, at such date of acquisition, a rating
of at least "A" or the equivalent thereof from Standard & Poor's Rating
Service or of at least "A2" or the equivalent thereof from Xxxxx'x
Investors Service, Inc.;
(c) investments in certificates of deposit, banker's
acceptances and time deposits (including Eurodollar time deposits)
maturing within 180 days from the date of acquisition thereof issued or
guaranteed by or placed with (i) any U.S. office of the Administrative
Agent or any domestic office of Chase or the bank with which the
Borrowers and the Subsidiaries maintain their cash management system,
provided that if such bank is not a Lender hereunder, such bank shall
have entered into an agreement with the Administrative Agent pursuant
to which such bank shall have waived all rights of setoff and confirmed
that such bank does not have, nor shall it claim, a security interest
therein or (ii) any domestic office of any other commercial bank of
recognized standing organized under the laws of the United States of
America or any State thereof that has a combined capital and surplus
and undivided profits of not less than $500,000,000 and is the
principal banking subsidiary of a bank holding company having a
long-term unsecured debt rating of at least "A" or the equivalent
thereof from Standard & Poor's Ratings Service or at least "A2" or the
equivalent thereof from Xxxxx'x Investors Service, Inc.;
(d) investments in commercial paper maturing within 180 days
from the date of acquisition thereof and issued by (i) the holding
company of Chase or (ii) the holding company of any other commercial
bank of recognized standing organized under the laws of the United
States of America or any State thereof that has (A) a combined capital
and surplus in excess of $500,000,000 and (B) commercial paper rated at
least "A-1" or the equivalent thereof from Standard & Poor's Ratings
Service or of at least "P-1" or the equivalent thereof from Xxxxx'x
Investors Service, Inc.;
(e) investments in repurchase obligations with a term of not
more than seven days for underlying securities of the types described
in clause (a) above entered into with any office of a bank or trust
company meeting the qualifications specified in clause (c) above; and
14
(f) investments in money market funds substantially all the
assets of which are comprised of securities of the types described in
clauses (a) through (e) above.
"PERMITTED LIENS" shall mean (a) Liens imposed by law (other than
Environmental Laws and any Lien imposed under ERISA) for taxes, assessments or
charges of any Governmental Authority for claims not yet due or which are being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves or other appropriate provisions are being maintained in
accordance with GAAP; (b) statutory and other Liens of landlords, Liens of
tenants arising from occupancy rights and statutory Liens of carriers,
warehousemen, mechanics, materialmen and other Liens imposed by law (other than
Environmental Laws and any Lien imposed under ERISA) created in the ordinary
course of business for amounts not yet due or which are being contested in good
faith by appropriate proceedings and with respect to which adequate reserves or
other appropriate provisions are being maintained in accordance with GAAP; (c)
Liens (other than any Lien imposed under ERISA) incurred or deposits made in the
ordinary course of business (including surety bonds and appeal bonds) in
connection with workers' compensation, unemployment insurance and other types of
social security benefits or to secure the performance of tenders, bids, leases,
contracts (other than for the repayment of Indebtedness), statutory obligations
and other similar obligations or arising as a result of progress payments under
government contracts; (d) easements (including reciprocal easement agreements
and utility agreements), rights-of-way, covenants, consents, reservations,
encroachments, variations and zoning and other restrictions, charges or
encumbrances (whether or not recorded), which do not interfere materially with
the ordinary conduct of the business of any Borrower or any Guarantor, as the
case may be, and which do not materially detract from the value of the property
to which they attach or materially impair the use thereof to any Borrower or any
Guarantor, as the case may be; (e) purchase money Liens upon or in any property
acquired or held in the ordinary course of business to secure the purchase price
of such property or to secure Indebtedness permitted by Section 6.01(a)(iii) or
6.01(a)(iv), PROVIDED that any such Liens shall be placed on such property (and
the Indebtedness secured by such Liens shall be created) within 180 days
following the acquisition of such property, such Liens do not apply to any other
property or assets of FRD, any Borrower or any Subsidiary and the Indebtedness
secured by such Liens does not exceed 100% of the lesser of the cost or Fair
Market Value of such property at the time of acquisition; and (f) extensions,
renewals or replacements of any Lien referred to in paragraphs (a) through (e)
above, PROVIDED that the principal amount of the obligation secured thereby is
not increased and that any such extension, renewal or replacement is limited to
the property originally encumbered thereby.
"PERMITTED MANAGEMENT FEE" shall mean a management fee payable to the
Parent or any of its subsidiaries (other than FRD and the Subsidiaries) pursuant
to the Management Services Agreement in any fiscal quarter in an amount not to
exceed (a) 1.0% of net revenues of FRD and the Subsidiaries during the
immediately preceding fiscal quarter plus (b) the actual allocated share of the
cost of shared administrative services provided by Parent or its subsidiaries
(other than FRD or any Subsidiary) to FRD and the Subsidiaries during such
quarter (which shall be calculated on a reasonable and consistent basis and
shall be certified quarterly by a certificate of the Chief Financial Officer of
Parent delivered to the Administrative Agent).
"PERMITTED ROYALTY" shall mean a royalty payable by FRD or any
Subsidiary in any fiscal quarter with respect to any of its restaurants pursuant
to a Permitted Franchise Agreement, PROVIDED that the amount of such royalty
does not to exceed 4.0% of such restaurant's net revenue for the immediately
preceding fiscal quarter.
"PERSON" shall mean any natural person, corporation, business trust,
joint venture, association, company, limited liability company, partnership or
government, or any agency or political subdivision thereof.
"PLAN" shall mean any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 307 of ERISA, and in respect of which Parent, FRD,
any Borrower or any ERISA Affiliate is (or, if such plan were terminated, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in Section
3(5) of ERISA.
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"PLEDGE AGREEMENT" shall mean the Pledge Agreement, substantially in
the form of Exhibit H, among the Borrowers, FRD, the Subsidiary Guarantors party
thereto and the Collateral Agent for the benefit of the Secured Parties.
"PREPAYMENT EVENT" shall mean any event referred to in Section 2.12(c)
through (e) that requires the Borrowers to prepay any Borrowing.
"REGISTER" shall have the meaning given such term in Section 9.04(d).
"REGULATION T" shall mean Regulation T of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"REGULATION U" shall mean Regulation U of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"REGULATION X" shall mean Regulation X of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"RELATED PARTIES" shall mean, with respect to any person, such person's
Affiliates and the respective directors, officers, employees, agents and
advisors of such person or such person's Affiliates.
"RELEASE" shall mean any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing,
depositing, emanating or migrating of any Hazardous Material in, into, onto or
through the environment.
"REMEDIAL ACTION" shall mean (a) "remedial action" as such term is
defined in CERCLA, 42 U.S.C. Section 9601(24), and (b) all other actions
required by any Governmental Authority to: (i) cleanup, remove, treat, xxxxx or
in any other way address any Hazardous Material in the environment; (ii) prevent
the Release or threat of Release, or minimize the further Release, of any
Hazardous Material so it does not migrate or endanger or threaten to endanger
public health, welfare or the environment; or (iii) perform studies and
investigations in connection with, or as a precondition to, (i) or (ii) above.
"REQUIRED LENDERS" shall mean, at any time, Lenders having Revolving
Exposures, Term Loans and unused Commitments representing more than 50% of the
sum of the total Revolving Exposures outstanding, Term Loans outstanding and
unused Commitments at such time.
"RESPONSIBLE OFFICER" of any corporation shall mean any executive
officer or Financial Officer of such corporation and any other officer or
similar official thereof responsible for the administration of the obligations
of such corporation in respect of this Agreement.
"REVOLVING BORROWING" shall mean any Borrowing consisting solely of
Revolving Loans.
"REVOLVING COMMITMENT" shall mean, with respect to each Lender, the
commitment, if any, of such Lender to make Revolving Loans and to acquire
participations in Letters of Credit and Swingline Loans hereunder, expressed as
an amount representing the maximum aggregate amount of such Lender's Revolving
Exposure hereunder, as such commitment may be (a) reduced from time to time
pursuant to Section 2.09 and (b) reduced or increased from time to time pursuant
to assignments by or to such Lender pursuant to Section 9.04. The initial amount
of each Lender's Revolving Commitment is set forth on Schedule 2.01(a), or in
the Assignment and Acceptance pursuant to which such Lender shall have assumed
its Revolving Commitment, as applicable. The aggregate amount of the Lenders'
Revolving Commitments is $40,000,000.
"REVOLVING EXPOSURE" shall mean, with respect to any Lender at any
time, the sum of the outstanding principal amount of such Lender's Revolving
Loans and its L/C Exposure and Swingline Exposure at such time.
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"REVOLVING LENDER" shall mean a Lender with a Revolving Commitment or,
if the Revolving Commitments have terminated or expired, a Lender with Revolving
Exposure.
"REVOLVING LOAN" shall mean a loan made by the Lenders to the Borrowers
pursuant to clause (b) of Section 2.01. Each Revolving Loan shall be a
Eurodollar Loan or an ABR Loan.
"SECURED PARTIES" shall have the meaning assigned to such term in the
Security Agreement.
"SECURITY AGREEMENT" shall mean the Security Agreement, substantially
in the form of Exhibit I, among FRD, the Borrowers, the Subsidiary Guarantors
party thereto and the Collateral Agent for the benefit of the Secured Parties.
"SECURITY DOCUMENTS" shall mean the Mortgages, the Security Agreement,
the Pledge Agreement and each of the security agreements, mortgages and other
instruments and documents executed and delivered pursuant to any of the
foregoing or pursuant to Section 5.11.
"SENIOR NOTES" shall mean FRD's 12 1/2% Senior Notes due 2004.
"SENIOR NOTES DOCUMENTS" shall mean the Senior Notes, the Senior Notes
Indenture and all material agreements, documents and instruments related
thereto, in each case as amended, supplemented or otherwise modified from time
to time in accordance with the terms hereof and thereof.
"SENIOR NOTES INDENTURE" shall mean the Indenture dated May 23, 1996,
between FRD and the Bank of New York, as trustee, as amended by Supplemental
Indenture between the parties thereto dated August 23, 1996, and as further
amended, supplemented or otherwise modified from time to time in accordance with
the terms hereof and thereof.
"STATUTORY RESERVES" shall mean a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board and any other banking authority, domestic or foreign,
to which the Administrative Agent, Chase or any Lender (including any branch,
Affiliate or other fronting office making or holding a Loan) is subject (a) with
respect to the Base CD Rate, for new negotiable nonpersonal time deposits in
dollars of over $100,000 with maturities approximately equal to three months,
and (b) with respect to the Adjusted LIBO Rate, for Eurocurrency Liabilities (as
defined in Regulation D of the Board). Such reserve percentages shall include
those imposed pursuant to such Regulation D. Eurodollar Loans shall be deemed to
constitute Eurocurrency Liabilities and to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or offsets
that may be available from time to time to any Lender under such Regulation D.
Statutory Reserves shall be adjusted automatically on and as of the effective
date of any change in any reserve percentage.
"SUBSIDIARY" shall mean, with respect to any person (herein referred to
as the "PARENT"), any corporation, partnership, association or other business
entity of which securities or other ownership interests representing more than
50% of the equity or more than 50% of the ordinary voting power or more than 50%
of the general partnership interests are, at the time any determination is being
made, owned, controlled or held by the parent or one or more subsidiaries of the
parent or by the parent and one or more subsidiaries of the parent.
"SUBSIDIARY" shall mean any subsidiary of FRD.
"SUBSIDIARY GUARANTEE AGREEMENT" shall mean the Subsidiary Guarantee
Agreement, substantially in the form of Exhibit J, made by the Subsidiary
Guarantors in favor of the Administrative Agent for the benefit of the Secured
Parties.
"SUBSIDIARY GUARANTOR" shall mean each Subsidiary listed on Schedule
1.01(c), and each other Subsidiary that is or becomes a party to a Subsidiary
Guarantee Agreement.
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"SWINGLINE COMMITMENT" shall mean the commitment of the Swingline
Lender to make loans pursuant to Section 2.22, as the same may be reduced from
time to time pursuant to Section 2.09.
"SWINGLINE EXPOSURE" shall mean at any time the aggregate principal
amount at such time of all outstanding Swingline Loans. The Swingline Exposure
of any Lender at any time shall be its Applicable Percentage of the aggregate
Swingline Exposure at such time.
"SWINGLINE LOAN" shall mean any loan made by the Swingline Lender
pursuant to Section 2.22(a).
"TAX ALLOCATION AGREEMENT" means the Tax Sharing and Allocation
Agreement among Parent, FRD and the Subsidiaries, as in effect on the date
hereof and as such agreement may be amended from time to time; PROVIDED that no
effect shall be given to any amendment to the Tax Allocation Agreement for
purposes of this Agreement unless it shall have been approved in writing by the
Required Lenders.
"TERM BORROWING" shall mean any Borrowing consisting solely of Term
Loans.
"TERM COMMITMENT" shall mean, with respect to each Lender, the
commitment, if any, of such Lender to make a Term Loan hereunder on the Closing
Date, expressed as an amount representing the maximum principal amount of the
Term Loan to be made by such Lender hereunder, as such commitment may be (a)
reduced from time to time pursuant to Section 2.09 and (b) reduced or increased
from time to time pursuant to assignments by or to such Lender pursuant to
Section 9.04. The initial amount of each Lender's Term Commitment is set forth
on Schedule 2.01(b), or in the Assignment and Acceptance pursuant to which such
Lender shall have assumed its Term Commitment, as applicable. The aggregate
amount of the Lenders' Term Commitments is $30,000,000.
"TERM LENDER" shall mean a Lender with a Term Commitment or an
outstanding Term Loan.
"TERM LOAN" shall mean a Loan made pursuant to clause (a) of Section
2.01. Each Term Loan shall be a Eurodollar Loan or an ABR Loan.
"THREE-MONTH SECONDARY CD RATE" shall mean, for any day, the secondary
market rate for three-month certificates of deposit reported as being in effect
on such day (or, if such day shall not be a Business Day, the next preceding
Business Day) by the Board through the public information telephone line of the
Federal Reserve Bank of New York (which rate will, under the current practices
of the Board, be published in Federal Reserve Statistical Release H.15(519)
during the week following such day), or, if such rate shall not be so reported
on such day or such next preceding Business Day, the average of the secondary
market quotations for three-month certificates of deposit of major money center
banks in New York City received at approximately 10:00 a.m., New York City time,
on such day (or, if such day shall not be a Business Day, on the next preceding
Business Day) by the Administrative Agent from three New York City negotiable
certificate of deposit dealers of recognized standing selected by it.
"TRANSACTIONS" shall have the meaning assigned to such term in Section
3.02.
"TYPE", when used in respect of any Loan or Borrowing, shall refer to
the Rate by reference to which interest on such Loan or on the Loans comprising
such Borrowing is determined. For purposes hereof, the term "RATE" shall consist
of the Adjusted LIBO Rate and the Alternate Base Rate.
"WHOLLY OWNED SUBSIDIARY" of any person shall mean a subsidiary of such
person of which securities (except for directors' qualifying shares) or other
ownership interests representing 100% of the equity and 100% of the ordinary
voting power (and, in the case of a partnership, 100% of the general partnership
interests) are, at the time any determination is being made, owned, controlled
or held by such person or one or more wholly owned subsidiaries of such person
or by such person and one or more wholly owned subsidiaries of such person.
18
"WITHDRAWAL LIABILITY" shall mean liability to a Multiemployer Plan as
a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. TERMS GENERALLY. The definitions in Section 1.01 shall
apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
All references herein to Articles, Sections, Exhibits and Schedules shall be
deemed references to Articles and Sections of, and Exhibits and Schedules to,
this Agreement unless the context shall otherwise require. Except as otherwise
expressly provided herein, (a) any reference in this Agreement to any Loan
Document shall mean such document as amended, restated, supplemented or
otherwise modified from time to time and (b) all terms of an accounting or
financial nature shall be construed in accordance with GAAP, as in effect from
time to time; PROVIDED, HOWEVER, that for purposes of determining compliance
with the covenants contained in Article VI, all accounting terms herein shall be
interpreted and all accounting determinations hereunder shall be made in
accordance with GAAP as in effect on the date of this Agreement and applied on a
basis consistent with the application used in the financial statements referred
to in Section 3.05.
ARTICLE II
THE CREDITS
SECTION 2.01. COMMITMENTS. Subject to the terms and conditions and
relying upon the representations and warranties herein set forth, each Lender
(such Lenders initially providing Commitments hereunder as and to the extent set
forth on Schedules 2.01(a) and 2.01(b) hereto) agrees, severally and not
jointly, (a) to make Term Loans to any Borrower on the Closing Date in a
principal amount that will not result in the aggregate principal amount of such
Lender's Term Loans exceeding such Lender's Term Commitment and (b) to make
Revolving Loans to any Borrower, at any time and from time to time on or after
the date hereof, and until the earlier of the Maturity Date and the termination
of the Revolving Commitment of such Lender in accordance with the terms hereof,
in an aggregate principal amount at any time outstanding that will not result in
such Lender's Revolving Exposure exceeding such Lender's Revolving Commitment.
Within the limits set forth in the preceding sentence and subject to the terms,
conditions and limitations set forth herein, each Borrower may borrow, pay or
prepay and reborrow Revolving Loans. Amounts repaid in respect of any Term Loan
may not be reborrowed.
SECTION 2.02. LOANS. (a) Each Loan (other than Swingline Loans) shall
be made as part of a Borrowing consisting of Loans of the same Class and Type
made by the Lenders ratably in accordance with their respective Commitments of
the applicable Class; PROVIDED, HOWEVER, that the failure of any Lender to make
any Loan shall not in itself relieve any other Lender of its obligation to lend
hereunder (it being understood, however, that no Lender shall be responsible for
the failure of any other Lender to make any Loan required to be made by such
other Lender). The Loans (other than Swingline Loans) comprising any Borrowing
shall be in an aggregate principal amount that is (i) (A) in the case of
Eurodollar Borrowings, an integral multiple of $500,000 and not less than
$1,000,000 and (B) in the case of ABR Borrowings, an integral multiple of
$100,000 and not less than $500,000 or (ii) in the case of Revolving Loans,
equal to the remaining available balance of the total Revolving Commitments,
PROVIDED that (X) an ABR Borrowing may be made in an aggregate amount that is
required to finance the reimbursement of an L/C Disbursement as contemplated by
Section 2.21(e) and (Y) for the purposes of clauses (i) and (ii) above, the
aggregate principal amount of any Borrowing shall equal the aggregate principal
amount of all Loans made pursuant to such Borrowing, whether or not such Loans
are requested by the same Borrower.
(b) Subject to Sections 2.08, 2.14 and 2.22(d), each Borrowing shall be
comprised entirely of ABR Loans or Eurodollar Loans as the applicable Borrower
may request pursuant to Section 2.03. Each Lender may at its option make any
Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such
Lender to make such Loan, PROVIDED that any exercise of such option shall not
affect the obligation of such
19
Borrower to repay such Loan in accordance with the terms of this Agreement.
Borrowings of more than one Type and Class may be outstanding at the same time;
PROVIDED, HOWEVER, that no Borrower shall be entitled to request any Borrowing
that, if made, would result in more than five Eurodollar Borrowings outstanding
hereunder at any time. For purposes of the foregoing, Borrowings having
different Interest Periods, regardless of whether they commence on the same
date, shall be considered separate Borrowings.
(c) Each Lender shall make each Loan to be made by it hereunder on the
proposed date thereof by wire transfer of immediately available funds to such
account in New York City as the Administrative Agent may designate not later
than 12:00 noon, New York City time, PROVIDED that Swingline Loans shall be made
as provided in Section 2.22. The Administrative Agent shall use reasonable
efforts to credit by 2:00 p.m., New York City time, the amounts so received to
the Disbursement Account (PROVIDED that ABR Loans made to finance the
reimbursement of an L/C Disbursement as provided in Section 2.21(e) shall be
remitted by the Administrative Agent to the Issuing Bank) or, if a Borrowing
shall not occur on such date because any condition precedent herein specified
shall not have been met, return the amounts so received to the respective
Lenders.
(d) Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender's portion of such Borrowing,
the Administrative Agent may assume that such Lender has made such portion
available to the Administrative Agent on the date of such Borrowing in
accordance with paragraph (c) above and the Administrative Agent may, in
reliance upon such assumption, make available to the applicable Borrower on such
date a corresponding amount. If the Administrative Agent shall have so made
funds available then, to the extent that such Lender shall not have made such
portion available to the Administrative Agent, such Lender and the applicable
Borrower (without prejudice to any claims of such Borrower against such Lender
with respect to such Borrowing) severally agree to repay to the Administrative
Agent forthwith on demand such corresponding amount together with interest
thereon, for each day from the date such amount is made available to such
Borrower until the date such amount is repaid to the Administrative Agent at (i)
in the case of any Borrower, the interest rate applicable at the time to the
Loans comprising such Borrowing and (ii) in the case of such Lender, a rate
determined by the Administrative Agent to represent its cost of overnight or
short-term funds (which determination shall be conclusive absent manifest
error). If such Lender shall repay to the Administrative Agent such
corresponding amount, such amount shall constitute such Lender's Loan as part of
such Borrowing for purposes of this Agreement.
(e) Notwithstanding any other provision of this Agreement, no Borrower
shall be entitled to request any Borrowing if the Interest Period requested with
respect thereto would end after the Maturity Date.
(f) Any Borrower may refinance all or any part of a Revolving Borrowing
with another Revolving Borrowing, subject to the conditions and limitations set
forth in this Agreement. Any Revolving Borrowing or part thereof so refinanced
shall be deemed to be repaid or prepaid in accordance with the applicable
provisions of this Agreement with the proceeds of the new Revolving Borrowing,
and the proceeds of such new Revolving Borrowing, to the extent they do not
exceed the principal amount of the Revolving Borrowing being refinanced, shall
not be paid by the Lenders to the Administrative Agent or by the Administrative
Agent to such Borrower pursuant to paragraph (c) above; PROVIDED, HOWEVER, that
(i) if the principal amount extended by a Lender in a refinancing is greater
than the principal amount extended by such Lender in the Revolving Borrowing
being refinanced then such Lender shall pay such difference to the
Administrative Agent for distribution to the Lenders described in clause (ii)
below, (ii) if the principal amount extended by a Lender in the Revolving
Borrowing being refinanced is greater than the principal amount being extended
by such Lender in the refinancing, the Administrative Agent shall return the
difference to such Lender out of amounts received pursuant to clause (i) above,
and (iii) to the extent any Lender fails to pay the Administrative Agent amounts
due from it pursuant to clause (i) above, any Revolving Loan or portion thereof
being refinanced shall not be deemed repaid in accordance with Section 2.04 and
shall be payable by the applicable Borrower (without prejudice to any claims of
such Borrower against such Lender with respect to such Revolving Borrowing).
(g) If the Borrowers fail to make any payment required by Section
2.21(e) when due, the Administrative Agent shall notify each Revolving Lender of
the applicable L/C Disbursement, the payment
20
then due from the Borrowers in respect thereof and such Lender's Applicable
Percentage thereof. Promptly following receipt of such notice, each Revolving
Lender shall pay to the Administrative Agent its Applicable Percentage of the
payment then due from the Borrowers, in the same manner as provided in Section
2.02 with respect to Revolving Loans made by such Lender (and Section 2.02 shall
apply, MUTATIS MUTANDIS, to the payment obligations of the Revolving Lenders),
and the Administrative Agent shall promptly pay to the Issuing Bank the amounts
so received by it from the Revolving Lenders. Promptly following receipt by the
Administrative Agent of any payment from any Borrower pursuant to Section
2.21(e), the Administrative Agent shall distribute such payment to the
applicable Issuing Bank or, to the extent that Revolving Lenders have made
payments pursuant to this paragraph to reimburse the applicable Issuing Bank,
then to such Lenders and the applicable Issuing Bank as their interests may
appear. Any payment made by a Revolving Lender pursuant to this paragraph to
reimburse the applicable Issuing Bank for any L/C Disbursement (other than the
funding of ABR Loans or a Swingline Loan as contemplated by Section 2.21(e))
shall not constitute a Loan and shall not relieve the Borrowers of their
obligation to reimburse such L/C Disbursement. If the Issuing Bank shall make
any L/C Disbursement, then, unless the Borrowers shall reimburse such L/C
Disbursement in full on the date such L/C Disbursement is made, the unpaid
amount thereof shall bear interest, for each day from and including the date
such L/C Disbursement is made to but excluding the date that the Borrowers
reimburse such L/C Disbursement, at the rate per annum then applicable to ABR
Loans, PROVIDED that, if the Borrower fails to reimburse such L/C Disbursement
when due pursuant to paragraph (e) of Section 2.21, then Section 2.07 shall
apply. Interest accrued pursuant to this paragraph shall be for the account of
the applicable Issuing Bank, except that interest accrued on and after the date
of payment by any Revolving Lender pursuant to this paragraph (g) to reimburse
the applicable Issuing Bank shall be for the account of such Lender to the
extent of such payment.
SECTION 2.03. BORROWING PROCEDURE. In order to request a Borrowing
(other than a Swingline Loan, as to which this Section 2.03 shall not apply),
the applicable Borrower shall hand-deliver or telecopy to the Administrative
Agent a duly completed Borrowing Request (a) in the case of a Eurodollar
Borrowing, not later than 12:00 noon, New York City time, three Business Days
before a proposed Borrowing, and (b) in the case of an ABR Borrowing, not later
than 11:30 a.m., New York City time, on the date of the proposed Borrowing. Each
Borrowing Request shall be irrevocable, shall be signed by or on behalf of the
applicable Borrower and shall specify the following information: (i) whether the
Borrowing then being requested is to be a Eurodollar Borrowing or an ABR
Borrowing; (ii) the date of such Borrowing (which shall be a Business Day);
(iii) the number and location of the account to which funds are to be disbursed
(which shall be an account that complies with the requirements of Section
2.02(c)); (iv) the amount of such Borrowing; and (v) if such Borrowing is to be
a Eurodollar Borrowing, the Interest Period with respect thereto; PROVIDED,
HOWEVER, that, notwithstanding any contrary specification in any Borrowing
Request, each requested Borrowing shall comply with the requirements set forth
in Section 2.02. If no election as to the Type of Borrowing is specified in any
such notice, then the requested Borrowing shall be an ABR Borrowing. If no
Interest Period with respect to any Eurodollar Borrowing is specified in any
such notice, then such Borrower(s) shall be deemed to have selected an Interest
Period of one month's duration. The Administrative Agent shall promptly advise
the Lenders of any notice given pursuant to this Section 2.03 (and the contents
thereof), and of each Lender's portion of the requested Borrowing.
If any Borrower shall not have delivered a Borrowing Request in
accordance with this Section 2.03 prior to the end of the Interest Period then
in effect for any Borrowing requesting that such Borrowing be refinanced, then
such Borrower shall (unless such Borrower has notified the Administrative Agent,
not less than three Business Days prior to the end of such Interest Period, that
such Borrowing is to be repaid at the end of such Interest Period) be deemed to
have delivered a Borrowing Request requesting that such Borrowing be refinanced
with a new Borrowing of equivalent amount, and such new Borrowing shall be an
ABR Borrowing.
SECTION 2.04. EVIDENCE OF DEBT; REPAYMENT OF LOANS. (a) Each Borrower
hereby unconditionally promises, jointly and severally, to pay (i) to the
Administrative Agent for the account of each Lender, the then unpaid principal
amount of each Revolving Loan of such Lender on the Maturity Date, (ii) to
the Administrative Agent for the account of each Lender, the then unpaid
principal amount of each Term Loan of such Lender pursuant to Section 2.11 and
(iii) to the Swingline Lender, the then unpaid principal amount of each
Swingline Loan on the earlier of the Maturity Date and the first date after such
Swingline Loan is
21
made that is the 15th or last day of a calender month and is at least five
Business Days after such Swingline Loan is made (or on such earlier date on
which such Loan shall become due and payable hereunder, pursuant to Article VII
or otherwise), PROVIDED that on each date that the Borrowing of a Revolving Loan
is made, the Borrower shall repay all Swingline Loans then outstanding.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrowers to such Lender
resulting from each Loan made by such Lender from time to time, including the
amounts of principal and interest payable and paid such Lender from time to time
under this Agreement.
(c) The Administrative Agent shall maintain accounts in which it will
record (i) the amount of each Loan made hereunder, the Class and Type thereof
and the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrowers to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder from any Borrower or any Guarantor and each Lender's share
thereof.
(d) The entries made in the accounts maintained pursuant to paragraphs
(b) and (c) above shall be prima facie evidence of the existence and amounts of
the obligations therein recorded; PROVIDED, HOWEVER, that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligations of the Borrowers to repay
the Loans in accordance with their terms.
(e) Notwithstanding any other provision of this Agreement, in the event
any Lender shall request and receive a promissory note payable to such Lender
and its registered assigns, the interests represented by such note shall at all
times (including after any assignment of all or part of such interests pursuant
to Section 9.04) be represented by one or more promissory notes payable to the
payee named therein or its registered assigns.
SECTION 2.05. FEES. (a) The Borrowers agree, jointly and severally, to
pay to each Revolving Lender, through the Administrative Agent, on the last day
of March, June, September and December in each year and on each date on which
the Revolving Commitment of such Lender shall expire or be terminated as
provided herein, a commitment fee (a "COMMITMENT FEE") of 0.75% per annum on the
average daily unused amount of the Revolving Commitment (other than the
Swingline Commitment) of such Lender during the preceding quarter (or other
period commencing with the date hereof or ending with the Maturity Date or the
date on which the Revolving Commitments of such Lender shall expire or be
terminated). All Commitment Fees shall be computed on the basis of a year of 360
days and shall be payable for the actual number of days elapsed (including the
first day but excluding the last day). The Commitment Fee due to each Revolving
Lender shall commence to accrue on the date hereof and shall cease to accrue on
the date on which the Revolving Commitment of such Lender shall expire or be
terminated as provided herein. For purposes of calculating Commitment Fees only,
no portion of the Revolving Commitments shall be deemed utilized under Section
2.16 as a result of outstanding Swingline Loans.
(b) The Borrowers agree, jointly and severally, to pay to the
Administrative Agent, for its own account, the administrative fees set forth in
the Fee Letter at the times and in the amounts specified therein (the
"ADMINISTRATIVE AGENT FEES").
(c) The Borrowers agree, jointly and severally, to pay (i) to each
Lender, through the Administrative Agent, on the last day of March, June,
September and December of each year and on the date on which the Revolving
Commitment of such Lender shall be terminated as provided herein, a fee (an "L/C
PARTICIPATION FEE") calculated on such Lender's Applicable Percentage of the
average daily aggregate L/C Exposure (excluding the portion thereof attributable
to unreimbursed L/C Disbursements) during the preceding quarter (or shorter
period commencing with the date hereof or ending with the Maturity Date or the
date on which all Letters of Credit have been canceled or have expired and the
Revolving Commitments of all Revolving Lenders shall have been terminated) at a
rate per annum equal to 3.00%, and (ii) to the applicable Issuing Bank a
fronting fee, which shall accrue at the rate of 0.25% per annum on the average
daily aggregate L/C Exposure (excluding the portion thereof attributable to
unreimbursed L/C Disbursements) during the
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preceding quarter (or shorter period commencing with the date hereof or ending
with the Maturity Date or that date on which all Letters of Credit have
been canceled or have expired and the Revolving Commitments of all Revolving
Lenders shall have been terminated), as well as the standard issuance and
drawing fees specified from time to time by the applicable Issuing Bank (the
"ISSUING BANK FEES"). All L/C Participation Fees and Issuing Bank Fees shall be
computed on the basis of a year of 360 days and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day).
All Fees shall be paid on the dates due, in immediately available
funds, to the Administrative Agent for distribution, if and as appropriate,
among the Lenders, except that the Issuing Bank Fees shall be paid directly to
the applicable Issuing Bank. Once paid, none of the Fees shall be refundable
under any circumstances.
SECTION 2.06. INTEREST ON LOANS. (a) Subject to the provisions of
Section 2.07, the Loans comprising each ABR Borrowing, including each Swingline
Loan, shall bear interest (computed on the basis of the actual number of days
elapsed over a year of 365 or 366 days, as the case may be, when the Alternate
Base Rate is determined by reference to the Prime Rate and over a year of 360
days at all other times) at a rate per annum equal to the Alternate Base Rate
plus 2.00%.
(b) Subject to the provisions of Section 2.07, the Loans comprising
each Eurodollar Borrowing shall bear interest (computed on the basis of the
actual number of days elapsed over a year of 360 days) at a rate per annum equal
to the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing
plus 3.00%.
Interest on each Loan shall be payable on the Interest Payment Dates
applicable to such Loan except as otherwise provided in this Agreement. The
applicable Alternate Base Rate or Adjusted LIBO Rate for each Interest Period or
day within an Interest Period, as the case may be, shall be determined by the
Administrative Agent, and such determination shall be conclusive absent manifest
error.
SECTION 2.07. DEFAULT INTEREST. If any Borrower shall default in the
payment of the principal of or interest on any Loan or any other amount becoming
due hereunder, by acceleration or otherwise, or under any other Loan Document,
such Borrower shall on demand from time to time pay interest, to the extent
permitted by law, on such defaulted amount to but excluding the date of actual
payment (after as well as before judgment) (a) in the case of overdue principal
of any Loan, at the rate otherwise applicable to such Loan pursuant to Section
2.06 plus 2.00% per annum and (b) in all other cases, at a rate per annum
(computed on the basis of the actual number of days elapsed over a year of 365
or 366 days, as the case may be, when determined by reference to the Prime Rate
and over a year of 360 days at all other times) equal to the sum of the
Alternate Base Rate plus 4.00%.
SECTION 2.08. ALTERNATE RATE OF INTEREST. In the event, and on each
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for a Eurodollar Borrowing the Administrative Agent shall have
determined that dollar deposits in the principal amounts of the Loans comprising
such Borrowing are not generally available in the London interbank market, or
that the rates at which such dollar deposits are being offered will not
adequately and fairly reflect the cost to any Lender of making or maintaining
its Eurodollar Loan during such Interest Period, or that reasonable means do not
exist for ascertaining the Adjusted LIBO Rate, the Administrative Agent shall,
as soon as practicable thereafter, give written or telecopy notice of such
determination to the Borrowers and the Lenders. In the event of any such
determination, until the Administrative Agent shall have advised the Borrowers
and the Lenders that the circumstances giving rise to such notice no longer
exist, any request by a Borrower for a Eurodollar Borrowing pursuant to Section
2.03 shall be deemed to be a request for an ABR Borrowing. Each determination by
the Administrative Agent hereunder shall be conclusive absent manifest error.
SECTION 2.09. TERMINATION AND REDUCTION OF COMMITMENTS. (a) Unless
previously terminated, (i) the Term Commitments shall automatically terminate at
5:00 p.m., New York City time, on the Closing Date and (ii) the Revolving
Commitments, the Swingline Commitment and the L/C Commitment shall automatically
terminate on the Maturity Date. Notwithstanding the foregoing, all the
Commitments shall automatically terminate at 5:00 p.m., New York City time, on
May 31, 1999, if the initial Credit Event shall not have occurred by such time.
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(b) Upon at least three Business Days' prior irrevocable written or
telecopy notice to the Administrative Agent, the Borrowers may at any time in
whole permanently terminate, or from time to time in part permanently
reduce, the Commitments of any Class; PROVIDED, HOWEVER, that (i) each partial
reduction of the Commitments of any Class shall be in an integral multiple of
$500,000 and in a minimum amount of $1,000,000 and (ii) the Borrowers shall not
terminate or reduce the Revolving Commitments if, after giving effect to any
concurrent prepayment of the Revolving Loans in accordance with Section 2.12,
the sum of the Revolving Exposures would exceed the total Revolving Commitments.
(c) Each reduction in the Commitments of any Class hereunder shall be
made ratably among the Lenders in accordance with their respective Commitments
of such Class. The Borrowers shall pay to the Administrative Agent for the
account of the applicable Lenders, on the date of each termination or reduction,
the Commitment Fees on the amount of the Revolving Commitments so terminated or
reduced accrued to but excluding the date of such termination or reduction.
SECTION 2.10. CONVERSION AND CONTINUATION OF BORROWINGS. Each Borrower
shall have the right at any time upon prior irrevocable notice to the
Administrative Agent (a) not later than 12:00 noon, New York City time, three
Business Days prior to conversion, to convert any Eurodollar Borrowing into an
ABR Borrowing, (b) not later than 12:00 noon, New York City time, three Business
Days prior to conversion or continuation, to convert any ABR Borrowing into a
Eurodollar Borrowing or to continue any Eurodollar Borrowing as a Eurodollar
Borrowing for an additional Interest Period, and (c) not later than 12:00 noon,
New York City time, three Business Days prior to conversion, to convert the
Interest Period with respect to any Eurodollar Borrowing to another permissible
Interest Period, subject in each case to the following:
(i) each conversion or continuation shall be made pro rata
among the Lenders in accordance with the respective principal amounts
of the Loans comprising the converted or continued Borrowing;
(ii) if less than all the outstanding principal amount of any
Borrowing shall be converted or continued, then each resulting
Borrowing shall satisfy the limitations specified in Sections 2.02(a)
and 2.02(b) regarding the principal amount and maximum number of
Borrowings of the relevant Type;
(iii) each conversion shall be effected by each Lender and the
Administrative Agent by recording for the account of such Lender the
new Loan of such Lender resulting from such conversion and reducing the
Loan (or portion thereof) of such Lender being converted by an
equivalent principal amount; accrued interest on any Eurodollar Loan
(or portion thereof) being converted shall be paid by the Borrower at
the time of conversion;
(iv) if any Eurodollar Borrowing is converted at a time other
than the end of the Interest Period applicable thereto, the Borrower
shall pay, upon demand, any amounts due to the Lenders pursuant to
Section 2.15;
(v) any portion of a Borrowing maturing or required to be
repaid in less than one month may not be converted into or continued as
a Eurodollar Borrowing;
(vi) any portion of a Eurodollar Borrowing that cannot be
converted into or continued as a Eurodollar Borrowing by reason of the
immediately preceding clause shall be automatically converted at the
end of the Interest Period in effect for such Borrowing into an ABR
Borrowing; and
(vii) upon notice to the Borrowers from the Administrative
Agent given at the request of the Required Lenders, after the
occurrence and during the continuance of a Default or Event of Default,
no outstanding Loan may be converted into, or continued as, a
Eurodollar Loan.
Each notice pursuant to this Section 2.10 shall be irrevocable and
shall refer to this Agreement and specify (i) the identity and amount of the
Borrowing that any Borrower requests be converted or continued, (ii) whether
such Borrowing is to be converted to or continued as a Eurodollar Borrowing or
an
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ABR Borrowing, (iii) if such notice requests a conversion, the date of such
conversion (which shall be a Business Day) and (iv) if such Borrowing is to be
converted to or continued as a Eurodollar Borrowing, the Interest Period with
respect thereto. If no Interest Period is specified in any such notice with
respect to any conversion to or continuation as a Eurodollar Borrowing, the
applicable Borrower shall be deemed to have selected an Interest Period of one
month's duration. The Administrative Agent shall advise the Lenders of any
notice given pursuant to this Section 2.10 and of each Lender's portion of any
converted or continued Borrowing. If the applicable Borrower shall not have
given notice in accordance with this Section 2.10 to continue any Borrowing
into a subsequent Interest Period (and shall not otherwise have given notice in
accordance with this Section 2.10 to convert such Borrowing), such Borrowing
shall, at the end of the Interest Period applicable thereto (unless repaid
pursuant to the terms hereof), automatically be continued into a new Interest
Period as an ABR Borrowing. This Section will not apply to Swingline Loans,
which may not be converted or continued.
SECTION 2.11. AMORTIZATION OF TERM LOANS. (a) Subject to adjustment
pursuant to paragraph (c) of this Section, the Borrowers shall repay the Term
Borrowings on each date set forth below in the aggregate principal amount set
forth opposite such date:
DATE AMOUNT
---- ------
June 30, 2001 $2,000,000
September 30, 2001 $2,000,000
December 31, 2001 $2,000,000
March 31, 2002 $3,000,000
June 30, 2002 $3,000,000
September 30, 2002 $3,000,000
December 31, 2002 $3,000,000
March 31, 2003 $6,000,000
May 14, 2003 $6,000,000
(b) To the extent not previously paid, all Term Loans shall be due and
payable on the Maturity Date.
(c) If the initial aggregate amount of the Lenders' Term Commitments
exceeds the aggregate principal amount of Term Loans that are made on the
Closing Date, then the scheduled repayments of Term Loans to be made pursuant to
this Section shall be reduced ratably by an aggregate amount equal to such
excess. Any prepayment of a Term Borrowing shall be applied to reduce the
subsequent scheduled repayments of the Term Borrowings to be made pursuant to
this Section ratably.
(d) Prior to any repayment of any Term Borrowings hereunder, the
Borrowers shall select the Borrowing or Borrowings to be repaid and shall notify
the Administrative Agent by telephone (confirmed by telecopy) of such selection
not later than 12:00 noon, New York City time, three Business Days before the
scheduled date of such repayment. Each repayment of a Term Borrowing shall be
applied ratably to the Loans included in the repaid Term Borrowing. Repayments
of Term Borrowings shall be accompanied by accrued interest on the amount
repaid.
SECTION 2.12. PREPAYMENT. (a) Each Borrower shall have the right at
any time and from time to time to prepay any Borrowing, in whole or in part,
subject to the requirements of this Section 2.12.
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(b) In the event of any termination of all the Revolving Commitments,
the Borrowers shall prepay all outstanding Revolving Borrowings and replace or
cash collateralize all outstanding Letters of Credit on the date of such
termination. In the event of any partial reduction of the Revolving Commitments,
then (i) at or prior to the effective date of such reduction, the Administrative
Agent shall notify the Borrowers and the Lenders of the total Revolving
Exposures after giving effect thereto and (ii) if the total Revolving Exposures
would exceed the total Revolving Commitments after giving effect to such
reduction, then the Borrowers shall, on the date of such reduction and in an
amount sufficient to eliminate such excess, first, prepay the then outstanding
Revolving Loans (if any) and Swingline Loans (if any) and second, to the extent
of any remaining excess (after the prepayment of Revolving Loans and Swingline
Loans), replace outstanding Letters of Credit or deposit an amount in cash in a
cash collateral account established with the Collateral Agent for the benefit of
the Secured Parties.
(c) Following the end of each fiscal year of the Borrowers, commencing
with the fiscal year ending 1999, the Borrowers shall prepay Term Borrowings
(and, to the extent all Term Borrowings have been or, after giving effect to
such prepayment, will have been prepaid or repaid, Revolving Borrowings) in an
aggregate amount equal to (i) 75% of Excess Cash Flow for such fiscal year MINUS
(ii) any prepayments pursuant to Section 2.12(a) of (A) Term Borrowings or (B)
to the extent that the Revolving Commitments are permanently reduced in
connection therewith, Revolving Borrowings; PROVIDED, HOWEVER, that if the
Consolidated Total Debt Ratio for the period of four fiscal quarters most
recently ended prior to the date of determination of Excess Cash Flow shall be
less than to 3.00 to 1.00, then the Borrowers shall only be required to prepay
with respect to such fiscal year an aggregate amount equal to (i) 50% of Excess
Cash Flow for such fiscal year MINUS (ii) any prepayments pursuant to Section
2.12(a) of (A) Term Borrowings or (B) to the extent that the Revolving
Commitments are permanently reduced in connection therewith, Revolving
Borrowings. Each prepayment pursuant to this paragraph shall be made on or
before the date on which financial statements are delivered pursuant to Section
5.04(a)(ii) with respect to the fiscal year for which Excess Cash Flow is being
calculated (and in any event within 90 days after the end of such fiscal year).
(d) In the event that and on each occasion on which any Net Cash
Proceeds are received by or on behalf of FRD, the Borrowers or any other
Subsidiary with respect to any Asset Sale (other than the Asset Sales permitted
by Section 6.05(a), (b), (c), (d) or (e)), the Borrowers shall, within four
Business Days after such Net Cash Proceeds are received, prepay Term Borrowings
(and, to the extent all Term Borrowings have been or, after giving effect to
such prepayment, will have been prepaid or repaid, Revolving Borrowings) in an
aggregate amount equal to the amount of such Net Cash Proceeds.
(e) In the event that and on each occasion on which any Net Cash
Proceeds are received by or on behalf of FRD, the Borrowers or any other
Subsidiary with respect to (i) any issuance or other disposition of Indebtedness
for money borrowed of FRD, the Borrowers or any other Subsidiary (other than in
connection with Indebtedness for money borrowed permitted pursuant to Section
6.01(a)) or (ii) any issuance or other disposition of Equity Interests in, or
capital contributions to, FRD, the Borrowers or any other Subsidiary (other than
any Asset Sale or any such issuance of Equity Interests to, or capital
contributions by, FRD or any Subsidiary), the Borrowers shall, within three
Business Days after such Net Cash Proceeds are received, prepay Term Borrowings
(and, to the extent all Term Borrowings have been or, after giving effect to
such prepayment, will have been prepaid or repaid, Revolving Borrowings) in an
aggregate amount equal to the amount of such Net Cash Proceeds.
(f) Prior to any optional or mandatory prepayment of Borrowings
hereunder, the Borrowers shall select (subject to and in accordance with the
limitations set forth in Sections 2.12(c), (d) and (e)) the Borrowing to be
prepaid and shall specify such selection in the notice of such prepayment
delivered in accordance with the immediately succeeding sentence. The Borrowers
shall notify the Administrative Agent (and, in the case of prepayment of a
Swingline Loan, the Swingline Lender) by telephone (confirmed by telecopy) of
any prepayment hereunder (i) with respect to Eurodollar Borrowings, by 12:00
noon, New York City time, at least three Business Days prior to the date of
prepayment or (ii) with respect to ABR Borrowings and Swingline Loans, on or
prior to the date of prepayment before 12:00 noon, New York City time on such
date of prepayment. Promptly following receipt of any such notice (other than a
notice relating solely to Swingline Loans), the Administrative Agent shall
advise the Lenders of the contents thereof.
26
(g) Each notice of prepayment shall specify the prepayment date and the
principal amount of each Borrowing (or portion thereof) to be prepaid. Each
notice of an optional prepayment shall be irrevocable and shall commit the
applicable Borrower to prepay such Borrowing by the amount stated therein on the
date stated therein. Each partial prepayment of any Borrowing shall be in
integral multiples of $500,000 (or, in the case of ABR Borrowings or Swingline
Loans, $100,000) and in a minimum amount of $500,000 (or, in the case of
Swingline Loans, $100,000), except as necessary to apply fully the required
amount of a mandatory prepayment. Each prepayment of a Borrowing shall be
applied ratably to the Loans included in the prepaid Borrowing. All prepayments
under this Section 2.12 shall be subject to Section 2.15 but otherwise without
premium or penalty. All prepayments under this Section 2.12 (other than
prepayments of an ABR Borrowing that is a Revolving Borrowing or a Swingline
Loan) shall be accompanied by accrued interest on the principal amount being
prepaid to the date of payment.
(h) Prepayments of the Term Loans shall result in the permanent
reduction of the Term Commitments, but prepayments of Revolving Loans pursuant
to this Section 2.12 (other than Section 2.12(b)) shall not result in the
termination or permanent reduction of the Revolving Commitments and, subject to
Section 2.01(b), may be reborrowed.
SECTION 2.13. RESERVE REQUIREMENTS; CHANGE IN CIRCUMSTANCES. (a)
Notwithstanding any other provision of this Agreement, if after the date of this
Agreement any change in applicable law or regulation or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof (whether or not having the force of
law) shall change the basis of taxation of payments to any Lender or the
applicable Issuing Bank of the principal of or interest on any Eurodollar Loan
made by such Lender or any Fees or other amounts payable hereunder (other than
changes in respect of taxes imposed on the overall net income of such Lender or
Issuing Bank by the jurisdiction in which such Lender or Issuing Bank has its
principal office or by any political subdivision or taxing authority therein),
or shall impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of or
credit extended by any Lender or the applicable Issuing Bank (except any such
reserve requirement which is reflected in the Adjusted LIBO Rate) or shall
impose on such Lender or Issuing Bank or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans made by such Lender or
any Letter of Credit or participation therein, and the result of any of the
foregoing shall be to increase the cost to such Lender or Issuing Bank of making
or maintaining any Eurodollar Loan or increase the cost to any Lender of issuing
or maintaining any Letter of Credit or purchasing or maintaining a participation
therein or to reduce the amount of any sum received or receivable by such Lender
or Issuing Bank hereunder (whether of principal, interest or otherwise) by an
amount deemed by such Lender or Issuing Bank to be material, then the Borrowers
will pay to such Lender or Issuing Bank, as the case may be, upon demand such
additional amount or amounts as will compensate such Lender or Issuing Bank, as
the case may be, for such additional costs incurred or reduction suffered.
(b) If any Lender or the applicable Issuing Bank shall have determined
that the adoption after the date hereof of any law, rule, regulation, agreement
or guideline regarding capital adequacy, or any change after the date hereof in
any such law, rule, regulation, agreement or guideline (whether such law, rule,
regulation, agreement or guideline has been adopted) or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof, or compliance by any Lender (or any
lending office of such Lender) or the applicable Issuing Bank or any Lender's or
the applicable Issuing Bank's holding company with any request or directive
regarding capital adequacy (whether or not having the force of law) of any
Governmental Authority has or would have the effect of reducing the rate of
return on such Lender's or Issuing Bank's capital or on the capital of such
Lender's or Issuing Bank's holding company, if any, as a consequence of this
Agreement or the Loans made or participations in Letters of Credit purchased by
such Lender pursuant hereto or the Letters of Credit issued by the applicable
Issuing Bank pursuant hereto to a level below that which such Lender or Issuing
Bank or such Lender's or Issuing Bank's holding company could have achieved but
for such applicability, adoption, change or compliance (taking into
consideration such Lender's or Issuing Bank's policies and the policies of such
Lender's or Issuing Bank's holding company with respect to capital adequacy) by
an amount deemed by such Lender or Issuing Bank to be material, then from time
to time the Borrowers shall pay to such Lender or Issuing Bank, as the case may
be, such additional amount or amounts as will compensate such Lender or Issuing
Bank or such Lender's or Issuing Bank's holding company for any such reduction
suffered.
27
(c) A certificate of a Lender or the applicable Issuing Bank setting
forth the amount or amounts necessary to compensate such Lender or Issuing Bank
or its holding company, as applicable, as specified in paragraph (a) or (b)
above shall be delivered to the applicable Borrower and shall be conclusive
absent manifest error. The Borrowers shall pay such Lender or Issuing Bank the
amount shown as due on any such certificate delivered by it within 10 days after
the receipt of the same.
(d) Failure or delay on the part of any Lender or the applicable
Issuing Bank to demand compensation for any increased costs or reduction in
amounts received or receivable or reduction in return on capital shall not
constitute a waiver of such Lender's or Issuing Bank's right to demand such
compensation. The protection of this Section 2.13 shall be available to each
Lender and Issuing Bank regardless of any possible contention of the invalidity
or inapplicability of the law, rule, regulation, agreement, guideline or other
change or condition that shall have occurred or been imposed.
SECTION 2.14. CHANGE IN LEGALITY. (a) Notwithstanding any other
provision of this Agreement, if, after the date hereof, any change in any law or
regulation or in the interpretation thereof by any Governmental Authority
charged with the administration or interpretation thereof shall make it unlawful
for any Lender to make or maintain any Eurodollar Loan or to give effect to its
obligations as contemplated hereby with respect to any Eurodollar Loan, then, by
written notice to the Borrowers and to the Administrative Agent:
(i) such Lender may declare that Eurodollar Loans will not
thereafter (for the duration of such unlawfulness) be made by such
Lender hereunder, whereupon any request for a Eurodollar Borrowing
shall, as to such Lender only, be deemed a request for an ABR Loan,
unless such declaration shall be subsequently withdrawn; and
(ii) such Lender may require that all outstanding Eurodollar
Loans made by it be converted to ABR Loans, in which event all such
Eurodollar Loans, as to such Lender only, shall be automatically
converted to ABR Loans as of the effective date of such notice as
provided in paragraph (b) below.
In the event any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal that would otherwise have been applied to
repay the Eurodollar Loans that would have been made by such Lender or the
converted Eurodollar Loans of such Lender shall instead be applied to repay the
ABR Loans made by such Lender in lieu of, or resulting from the conversion of,
such Eurodollar Loans.
(b) For purposes of this Section 2.14, a notice to the Borrowers by any
Lender shall be effective as to each Eurodollar Loan made by such Lender, if
lawful, on the last day of the Interest Period currently applicable to such
Eurodollar Loan; in all other cases such notice shall be effective on the date
of receipt by the Borrowers.
SECTION 2.15. INDEMNITY. The Borrowers shall, jointly and severally,
indemnify each Lender against any loss or expense that such Lender may sustain
or incur as a consequence of (a) any event, other than a default by such Lender
in the performance of its obligations hereunder, which results in (i) such
Lender receiving or being deemed to receive any amount on account of the
principal of any Eurodollar Loan prior to the end of the Interest Period in
effect therefor or (ii) any Eurodollar Loan to be made by such Lender not being
made after notice of such Loan shall have been given by any Borrower hereunder
(any of the events referred to in this clause (a) being called a "BREAKAGE
EVENT") or (b) any default in the making of any payment or prepayment required
to be made hereunder. In the case of any Breakage Event, such loss shall include
an amount equal to the excess, as reasonably determined by such Lender, of (i)
the actual cost of obtaining funds for the Eurodollar Loan that is the subject
of such Breakage Event for the period from the date of such Breakage Event to
the last day of the Interest Period in effect (or that would have been in
effect) for such Loan over (ii) the amount of interest likely to be realized by
such Lender in redeploying the funds released or not utilized by reason of such
Breakage Event for such period. A certificate of any Lender setting forth any
amount or amounts which such Lender is entitled to receive pursuant to this
Section 2.15 shall be delivered to the applicable Borrower and shall be
conclusive absent manifest error.
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SECTION 2.16. PRO RATA TREATMENT. Except as provided below in this
Section 2.16 with respect to the Swingline Loans and as required under Section
2.14, (a) each Borrowing, each payment or prepayment of principal of any
Borrowing and each payment of interest on the Loans shall be allocated pro rata
among the Lenders in accordance with their respective applicable Commitments
(or, if such Commitments have expired or been terminated in whole or in part, in
accordance with the sum of the respective principal amounts of their outstanding
Loans and their respective unused Commitments that have not expired or been
terminated) and (b) each payment of the Commitment Fees and each reduction of
the Revolving Commitments shall be allocated pro rata among the Lenders in
accordance with their respective Revolving Commitments (or, if such Revolving
Commitments shall have expired or been terminated, in accordance with the
respective principal amounts of their outstanding Revolving Loans). For purposes
of determining the available Revolving Commitments of the Lenders at any time,
each outstanding Swingline Loan shall be deemed to have utilized the Revolving
Commitments of the Lenders (including those Lenders which shall not have made
Swingline Loans) pro rata in accordance with the Lenders' respective Revolving
Commitments. Each Lender agrees that in computing such Lender's portion of any
Borrowing to be made hereunder, the Administrative Agent may, in its discretion,
round each Lender's percentage of such Borrowing to the next higher or lower
whole dollar amount.
SECTION 2.17. SHARING OF SETOFFS. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, setoff or counterclaim against
any Borrower or any other Loan Party, or pursuant to a secured claim under
Section 506 of Title 11 of the United States Code or other security or interest
arising from, or in lieu of, such secured claim, received by such Lender under
any applicable bankruptcy, insolvency or other similar law or otherwise, or by
any other means, obtain payment (voluntary or involuntary) in respect of any
Revolving Loan, Term Loan, L/C Disbursement or Swingline Loans as a result of
which the unpaid principal portion of its Revolving Loans and Term Loans and
participations in L/C Disbursements and Swingline Loans shall be proportionately
less than the unpaid principal portion of the Revolving Loans and Term Loans and
participations in L/C Disbursements and Swingline Loans of any other Lender, it
shall be deemed simultaneously to have purchased from such other Lender at face
value, and shall promptly pay to such other Lender the purchase price for, a
participation in the Revolving Loans, Term Loans, L/C Exposure and Swingline
Exposure of such other Lender, so that the aggregate unpaid principal amount of
the Revolving Loans, Term Loans, L/C Exposure and Swingline Exposure and
participations in Revolving Loans, Term Loans, L/C Exposure and Swingline
Exposure held by each Lender shall be in the same proportion to the aggregate
unpaid principal amount of all Revolving Loans, Term Loans, L/C Exposure and
Swingline Exposure then outstanding as the principal amount of its Revolving
Loans, Term Loans, L/C Exposure and Swingline Exposure prior to such exercise of
banker's lien, setoff or counterclaim or other event was to the principal amount
of all Revolving Loans, Term Loans, L/C Exposure and Swingline Exposure
outstanding prior to such exercise of banker's lien, setoff or counterclaim or
other event; PROVIDED, HOWEVER, that if any such purchase or purchases or
adjustments shall be made pursuant to this Section 2.17 and the payment giving
rise thereto shall thereafter be recovered, such purchase or purchases or
adjustments shall be rescinded to the extent of such recovery and the purchase
price or prices or adjustment restored without interest. Each Borrower and FRD
expressly consent to the foregoing arrangements and agree that any Lender
holding a participation in a Revolving Loan, Term Loan, L/C Disbursement or
Swingline Loan deemed to have been so purchased may exercise any and all rights
of banker's lien, setoff or counterclaim with respect to any and all moneys
owing by such Borrower and FRD to such Lender by reason thereof as fully as if
such Lender had made a Loan directly to such Borrower in the amount of such
participation.
SECTION 2.18. PAYMENTS. (a) Each Loan Party shall make each payment
(including principal of or interest on any Borrowing or any L/C Disbursement or
any Fees or other amounts) hereunder and under any other Loan Document not later
than 12:00 noon, New York City time, on the date when due in immediately
available dollars, without setoff, defense or counterclaim. Each such payment
(other than (i) Issuing Bank Fees, which shall be paid directly to the
applicable Issuing Bank, and (ii) principal of and interest on Swingline Loans,
which shall be paid directly to the Swingline Lender except as otherwise
directed in Section 2.22(e)) shall be made to the Administrative Agent at its
offices at 1301 Avenue of the Americas, 12th Floor, New York, New York.
(b) Whenever any payment (including principal of or interest on any
Borrowing or any Fees or other amounts) hereunder or under any other Loan
Document shall become due, or otherwise would occur, on a
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day that is not a Business Day, such payment may be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of interest or Fees, if applicable.
SECTION 2.19. TAXES. (a) Any and all payments by or on behalf of the
Loan Parties hereunder and under any other Loan Document shall be made, in
accordance with Section 2.18, free and clear of and without deduction for any
and all current or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, EXCLUDING (i) income
taxes imposed on the net income of the Administrative Agent, any Lender or any
Issuing Bank (or any transferee or assignee thereof, including a participation
holder (any such entity a "TRANSFEREE")) and (ii) franchise taxes imposed on the
net income of the Administrative Agent, any Lender or any Issuing Bank (or
Transferee), in each case by the jurisdiction under the laws of which the
Administrative Agent, such Lender or such Issuing Bank (or Transferee) is
organized or any political subdivision thereof (all such nonexcluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities, collectively
or individually, being called "TAXES"). If any Loan Party shall be required to
deduct any Taxes from or in respect of any sum payable hereunder or under any
other Loan Document to the Administrative Agent, any Lender or any Issuing Bank
(or any Transferee), then (i) the sum payable shall be increased by the amount
(an "ADDITIONAL AMOUNT") necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
2.19) the Administrative Agent, such Lender or such Issuing Bank (or
Transferee), as the case may be, shall receive an amount equal to the sum it
would have received had no such deductions been made, (ii) such Loan Party shall
make such deductions and (iii) such Loan Party shall pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable
law.
(b) In addition, each Loan Party agrees to pay to the relevant
Governmental Authority in accordance with applicable law any current or future
recording, stamp, documentary, excise, transfer, sales, property taxes, charges
or similar levies (including mortgage recording taxes and similar fees) that
arise from any payment made hereunder or under any other Loan Document or from
the execution, delivery or enforcement of, or otherwise with respect to, this
Agreement or any other Loan Document ("OTHER TAXES").
(c) The Borrowers will, jointly and severally, indemnify the
Administrative Agent, each Lender and each Issuing Bank (or Transferee) for the
full amount of Taxes and Other Taxes paid by the Administrative Agent, such
Lender or such Issuing Bank (or Transferee), as the case may be, and any
liability (including penalties, interest and reasonable expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability prepared by the
Administrative Agent, a Lender or the applicable Issuing Bank (or Transferee),
or the Administrative Agent on its behalf, absent manifest error, shall be
final, conclusive and binding for all purposes. Such indemnification shall be
made within 30 days after the date the Administrative Agent, any Lender or any
Issuing Bank (or Transferee), as the case may be, makes written demand therefor.
(d) As soon as practicable after the date of any payment of Taxes or
Other Taxes by any Borrower or any other Loan Party to the relevant Governmental
Authority, such Borrower or such other Loan Party will deliver to the
Administrative Agent, at its address referred to in Section 9.01, the original
or a certified copy of a receipt issued by such Governmental Authority
evidencing payment thereof.
(e) Each Lender (or Transferee) that is organized under the laws of a
jurisdiction other than the United States, any State thereof or the District of
Columbia (a "NON-U.S. LENDER") shall deliver to the Borrowers and the
Administrative Agent two copies of either United States Internal Revenue Service
Form 1001 or Form 4224, or, in the case of a Non-U.S. Lender claiming exemption
from U.S. Federal withholding tax under Section 871(h) or 881(c) of the Code
with respect to payments of "portfolio interest", a Form W-8, or any subsequent
versions thereof or successors thereto (and, if such Non-U.S. Lender delivers a
Form W-8, a certificate representing that such Non-U.S. Lender is not a bank for
purposes of Section 881(c) of the Code, is not a 10-percent shareholder (within
the meaning of Section 871(h)(3)(B) of the Code) of any Borrower and is not a
controlled foreign corporation related to any Borrower (within the meaning of
Section 864(d)(4) of the Code)), properly completed and duly executed by such
Non-U.S. Lender claiming complete exemption from, or reduced rate of, U.S.
Federal withholding tax on payments by the Borrowers under this Agreement and
the other Loan Documents. Such forms shall be delivered by each
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Non-U.S. Lender on or before the date it becomes a party to this Agreement (or,
in the case of a Transferee that is a participation holder, on or before the
date such participation holder becomes a Transferee hereunder) and on or
before the date, if any, such Non-U.S. Lender changes its applicable lending
office by designating a different lending office (a "NEW LENDING OFFICE"). In
addition, each Non-U.S. Lender shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such Non-U.S.
Lender. Notwithstanding any other provision of this Section 2.19(e), a Non-U.S.
Lender shall not be required to deliver any form pursuant to this Section
2.19(e) that such Non-U.S. Lender is not legally able to deliver.
(f) The Borrowers shall not be required to indemnify any Non-U.S.
Lender or to pay any additional amounts to any Non-U.S. Lender, in respect of
United States Federal withholding tax pursuant to paragraph (a) or (c) above to
the extent that:
(i) the obligation to withhold amounts with respect to United States
Federal withholding tax existed on the date such Non-U.S. Lender became
a party to this Agreement (or, in the case of a Transferee that is a
participation holder, on the date such participation holder became a
Transferee hereunder) or, with respect to payments to a New Lending
Office, the date such Non-U.S. Lender designated such New Lending
Office with respect to a Loan; PROVIDED, HOWEVER, that this paragraph
(f) shall not apply (x) to any Transferee or New Lending Office that
becomes a Transferee or New Lending Office as a result of an
assignment, participation, transfer or designation made at the request
of the Borrowers and (y) to the extent the indemnity payment or
additional amounts any Transferee, or any Lender (or Transferee),
acting through a New Lending Office, would be entitled to receive
(without regard to this paragraph (f)) do not exceed the indemnity
payment or additional amounts that the person making the assignment,
participation or transfer to such Transferee, or Lender (or Transferee)
making the designation of such New Lending Office, would have been
entitled to receive in the absence of such assignment, participation,
transfer or designation; or
(ii) the obligation to pay such additional amounts would not have
arisen but for a failure by such Non-U.S. Lender to comply with the
provisions of paragraph (e) above.
(g) Nothing contained in this Section 2.19 shall require any Lender or
Issuing Bank (or any Transferee) or the Administrative Agent to make available
any of its tax returns (or any other information that it deems to be
confidential or proprietary).
SECTION 2.20. ASSIGNMENT OF COMMITMENTS UNDER CERTAIN CIRCUMSTANCES;
DUTY TO MITIGATE. (a) In the event (i) any Lender or Issuing Bank delivers a
certificate requesting compensation pursuant to Section 2.13, (ii) any Lender or
Issuing Bank delivers a notice described in Section 2.14 or (iii) any Borrower
is required to pay any additional amount to any Lender or Issuing Bank or any
Governmental Authority on account of any Lender or Issuing Bank pursuant to
Section 2.19, any Borrower may, at its sole expense and effort (including with
respect to the processing and recordation fee referred to in Section 9.04(b)),
upon notice to such Lender or Issuing Bank and the Administrative Agent, require
such Lender or Issuing Bank to transfer and assign, without recourse (in
accordance with and subject to the restrictions contained in Section 9.04), all
of its interests, rights and obligations under this Agreement to an assignee
that shall assume such assigned obligations (which assignee may be another
Lender, if a Lender accepts such assignment); PROVIDED that (x) such assignment
shall not conflict with any law, rule or regulation or order of any court or
other Governmental Authority having jurisdiction, (y) the Borrowers shall have
received the prior written consent of the Administrative Agent (and, if a
Revolving Commitment is being assigned, of the Issuing Banks, and the Swingline
Lender), which consent shall not unreasonably be withheld, and (z) the
Borrowers or such assignee shall have paid to the affected Lender or Issuing
Bank in immediately available funds an amount equal to the sum of the principal
of and interest accrued to the date of such payment on the outstanding Loans or
L/C Disbursements of such Lender or Issuing Bank, respectively, plus all Fees
and other amounts accrued for the account of such Lender or Issuing Bank
hereunder (including any amounts under Section 2.13 and Section 2.15); PROVIDED
FURTHER that, if prior to any such transfer and assignment the circumstances or
event that resulted in such Lender's or Issuing Bank's claim for compensation
under Section 2.13 or notice under Section 2.14 or the amounts paid pursuant to
Section 2.19, as the case may be, cease to cause such Lender or Issuing Bank to
suffer increased costs or reductions in amounts received or
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receivable or reduction in return on capital, or cease to have the consequences
specified in Section 2.14, or cease to result in amounts being payable
under Section 2.19, as the case may be (including as a result of any action
taken by such Lender or Issuing Bank pursuant to paragraph (b) below), or if
such Lender or Issuing Bank shall waive its right to claim further compensation
under Section 2.13 in respect of such circumstances or event or shall withdraw
its notice under Section 2.14 or shall waive its right to further payments under
Section 2.19 in respect of such circumstances or event, as the case may be, then
such Lender or Issuing Bank shall not thereafter be required to make any such
transfer and assignment hereunder.
(b) If (i) any Lender or Issuing Bank shall request compensation under
Section 2.13, (ii) any Lender or Issuing Bank delivers a notice described in
Section 2.14 or (iii) any Borrower is required to pay any additional amount to
any Lender or Issuing Bank or any Governmental Authority on account of any
Lender or Issuing Bank, pursuant to Section 2.19, then such Lender or Issuing
Bank shall use reasonable efforts (which shall not require such Lender or
Issuing Bank to incur an unreimbursed loss or unreimbursed cost or expense or
otherwise take any action inconsistent with its internal policies or legal or
regulatory restrictions or suffer any disadvantage or burden deemed by it to be
significant) (x) to file any certificate or document reasonably requested in
writing by the Borrowers or (y) to assign its rights and delegate and transfer
its obligations hereunder to another of its offices, branches or affiliates, if
such filing or assignment would reduce its claims for compensation under Section
2.13 or enable it to withdraw its notice pursuant to Section 2.14 or would
reduce amounts payable pursuant to Section 2.19, as the case may be, in the
future. The Borrowers hereby agree, jointly and severally, to pay all reasonable
costs and expenses incurred by any Lender or Issuing Bank in connection with any
such filing or assignment, delegation and transfer.
SECTION 2.21. LETTERS OF CREDIT. (a) GENERAL. Subject to the terms and
conditions set forth herein, (i) each of the Existing Letters of Credit shall,
upon the Closing Date and without further action on the part of any Issuing Bank
or any other person, be deemed for all purposes to be a Letter of Credit
hereunder and (ii) any Borrower may request the issuance of a Letter of Credit
for its own account, in a form reasonably acceptable to the Administrative Agent
and the applicable Issuing Bank, at any time and from time to time while the
Revolving Commitments remain in effect. This Section shall not be construed to
impose an obligation upon any Issuing Bank to issue any Letter of Credit that is
inconsistent with the terms and conditions of this Agreement.
(b) NOTICE OF ISSUANCE, AMENDMENT, RENEWAL, EXTENSION; CERTAIN
CONDITIONS. In order to request the issuance of a Letter of Credit (or to amend,
renew or extend an existing Letter of Credit), any Borrower shall hand deliver
or telecopy to the applicable Issuing Bank and the Administrative Agent
(reasonably in advance of the requested date of issuance, amendment, renewal or
extension) a notice requesting the issuance of a Letter of Credit, or
identifying the Letter of Credit to be amended, renewed or extended, the date of
issuance, amendment, renewal or extension, the date on which such Letter of
Credit is to expire (which shall comply with paragraph (c) below), the amount of
such Letter of Credit, the name and address of the beneficiary thereof and such
other information as shall be necessary to prepare such Letter of Credit. A
Letter of Credit shall be issued, amended, renewed or extended only if, and upon
issuance, amendment, renewal or extension of each Letter of Credit the Borrowers
shall be deemed to represent and warrant that, after giving effect to such
issuance, amendment, renewal or extension, (i) the L/C Exposure shall not exceed
$20,000,000 and (ii) the aggregate Revolving Exposures shall not exceed the
total Revolving Commitments.
(c) EXPIRATION DATE. Each Letter of Credit shall expire at the close of
business on the earlier of (i) the date one year after the date of the issuance
of such Letter of Credit and (ii) the date that is five Business Days prior to
the Maturity Date, unless such Letter of Credit expires by its terms on an
earlier date; PROVIDED, HOWEVER, that (A) clause (i) above shall not prevent the
applicable Issuing Bank from agreeing that a Letter of Credit will automatically
be extended for one or more successive periods not to exceed one year from the
date of such extension each unless such Issuing Bank elects not to extend such
Letter of Credit for any such additional period (PROVIDED that such Issuing Bank
shall elect not to extend such Letter of Credit (x) if it has notice that an
Event of Default has occurred and is continuing at the time such Issuing Bank
must elect whether or not to allow such extension or (y) if the period of such
extension would result in such Letter of Credit expiring after the date that is
five Business Days prior to the Maturity Date (except in accordance with, and
subject to the limitations set forth in, clause (B) below)) and (B) any Letter
of Credit that complies with clause (i) above may, at the sole discretion of the
Issuing Bank that issues, renews or extends such
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Letter of Credit, expire after the Maturity Date, but not more than 91 days
after the Maturity Date, PROVIDED that the applicable Borrower deposits in a
cash collateral account established with the Administrative Agent, on or prior
to five Business Days prior to the Maturity Date, an amount in cash equal to
105% of the face amount of such Letter of Credit.
(d) PARTICIPATIONS. By the issuance of a Letter of Credit and without
any further action on the part of the applicable Issuing Bank or the Lenders,
the applicable Issuing Bank hereby grants to each Lender, and each such Lender
hereby acquires from the applicable Issuing Bank, a participation in such Letter
of Credit equal to such Lender's Applicable Percentage of the aggregate amount
available to be drawn under such Letter of Credit, effective upon the issuance
of such Letter of Credit. In consideration and in furtherance of the foregoing,
each Lender hereby absolutely and unconditionally agrees to pay to the
Administrative Agent, for the account of the applicable Issuing Bank, such
Lender's Applicable Percentage of each L/C Disbursement made by the applicable
Issuing Bank and not reimbursed by the applicable Borrower (or, if applicable,
another party pursuant to its obligations under any other Loan Document)
forthwith on the date due as provided in Section 2.21(e). Each Lender
acknowledges and agrees that its obligation to acquire participations pursuant
to this paragraph in respect of Letters of Credit is absolute and unconditional
and shall not be affected by any circumstance whatsoever, including the
occurrence and continuance of a Default or an Event of Default, and that each
such payment shall be made without any offset, abatement, withholding or
reduction whatsoever.
(e) REIMBURSEMENT. If the applicable Issuing Bank shall make any L/C
Disbursement in respect of a Letter of Credit, the Borrowers shall reimburse
such L/C Disbursement by paying to the Administrative Agent an amount equal to
such L/C Disbursement not later than 12:00 noon, New York City time, on the date
that such L/C Disbursement is made, if the Borrowers shall have received notice
of such L/C Disbursement prior to 10:00 a.m., New York City time, on such date,
or, if such notice has not been received by the Borrowers prior to such time on
such date, then not later than 12:00 noon, New York City time, on (i) the
Business Day that the Borrower receives such notice, if such notice is
received prior to 10:00 a.m., New York City time, on the day of receipt, or (ii)
the Business Day immediately following the day that the Borrowers receive such
notice, if such notice is not received prior to such time on the day of receipt,
PROVIDED that if such L/C Disbursement is not less than $500,000, the Borrowers
may, subject to the conditions to borrowing set forth herein, request in
accordance with Section 2.03 that such payment be financed with an ABR Borrowing
or Swingline Loan in an equivalent amount and, to the extent so financed, the
Borrowers' obligation to make such payment shall be discharged and replaced by
the resulting ABR Borrowing or Swingline Loan.
(f) OBLIGATIONS ABSOLUTE. Each Borrower's obligation to reimburse L/C
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the applicable Issuing Bank under a
Letter of Credit against presentation of a draft or other document that does not
comply with the terms of such Letter of Credit, or (iv) any other event or
circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section, constitute a legal or equitable
discharge of, or provide a right of setoff against, any Borrower's obligations
hereunder. Neither the Administrative Agent, the Lenders nor the applicable
Issuing Bank, nor any of their Related Parties, shall have any liability or
responsibility by reason of or in connection with the issuance or transfer of
any Letter of Credit or any payment or failure to make any payment thereunder
(irrespective of any of the circumstances referred to in the preceding
sentence), or any error, omission, interruption, loss or delay in transmission
or delivery of any draft, notice or other communication under or relating to any
Letter of Credit (including any document required to make a drawing thereunder),
any error in interpretation of technical terms or any consequence arising from
causes beyond the control of the applicable Issuing Bank, PROVIDED that the
foregoing shall not be construed to excuse the applicable Issuing Bank from
liability to any Borrower to the extent of any direct damages (as opposed to
consequential damages, claims in respect of which are hereby waived by each
Borrower to the extent permitted by applicable law) suffered by such Borrower
that are caused by the applicable Issuing Bank's failure to
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exercise care when determining whether drafts and other documents presented
under a Letter of Credit comply with the terms thereof. The parties hereto
expressly agree that, in the absence of gross negligence or wilful misconduct on
the part of the applicable Issuing Bank (as finally determined by a court of
competent jurisdiction), the applicable Issuing Bank shall be deemed to have
exercised care in each such determination. In furtherance of the foregoing and
without limiting the generality thereof, the parties agree that, with respect to
documents presented which appear on their face to be in substantial compliance
with the terms of a Letter of Credit, the applicable Issuing Bank may, in its
sole discretion, either accept and make payment upon such documents without
responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.
(g) DISBURSEMENT PROCEDURES. The applicable Issuing Bank shall,
promptly following its receipt thereof, examine all documents purporting to
represent a demand for payment under a Letter of Credit. The applicable Issuing
Bank shall as promptly as possible give telephonic notification, confirmed by
telecopy, to the Administrative Agent and the applicable Borrower of such demand
for payment and whether the applicable Issuing Bank has made or will make an L/C
Disbursement thereunder; PROVIDED that any failure to give or delay in giving
such notice shall not relieve (i) such Borrower of its obligation to reimburse
the applicable Issuing Bank and the Lenders with respect to any such L/C
Disbursement or (ii) any Lender of its obligations to acquire participations in,
and make payments to the applicable Issuing Bank with respect to, the Letter of
Credit to which such L/C Disbursement relates. The Administrative Agent shall
promptly give each Lender notice thereof.
(h) INTERIM INTEREST. If the applicable Issuing Bank shall make any L/C
Disbursement in respect of a Letter of Credit, then, unless the applicable
Borrower shall reimburse such L/C Disbursement in full on such date, the unpaid
amount thereof shall bear interest for the account of the applicable Issuing
Bank, for each day from and including the date of such L/C Disbursement, to but
excluding the earlier of the date of payment or the date on which interest shall
commence to accrue thereon as provided in Section 2.02(g), at the rate per annum
that would apply to such amount if such amount were an ABR Loan.
(i) RESIGNATION OR REMOVAL OF THE ISSUING BANK. Any Issuing Bank may
resign at any time by giving 180 days' prior written notice to the
Administrative Agent, the Lenders and the Borrowers, and may be removed at any
time by the Borrowers by notice to such Issuing Bank, the Administrative Agent
and the Lenders. Subject to the next succeeding paragraph, upon the acceptance
of any appointment as an Issuing Bank hereunder by a Lender that shall agree to
serve as a successor Issuing Bank, such successor shall succeed to and become
vested with all the interests, rights and obligations of such retiring Issuing
Bank and such retiring Issuing Bank shall be discharged from its obligations to
issue additional Letters of Credit hereunder. At the time such removal or
resignation shall become effective, the Borrowers shall pay all accrued and
unpaid fees pursuant to Section 2.05(c)(ii). The acceptance of any appointment
as an Issuing Bank hereunder by a successor Lender shall be evidenced by an
agreement entered into by such successor, in a form satisfactory to the
Borrowers and the Administrative Agent, and, from and after the effective date
of such agreement, (i) such successor Lender shall have all the rights and
obligations of such previous Issuing Bank under this Agreement and the other
Loan Documents and (ii) references herein and in the other Loan Documents to the
term "Issuing Bank" shall be deemed to refer, without limitation, to such
successor or to any previous Issuing Bank, or to such successor and all previous
Issuing Banks, as the context shall require. After the resignation or removal of
any Issuing Bank hereunder, such retiring Issuing Bank shall remain a party
hereto and shall continue to have all the rights and obligations of an Issuing
Bank under this Agreement and the other Loan Documents with respect to Letters
of Credit issued by it prior to such resignation or removal, but shall not be
required to issue additional Letters of Credit.
(j) CASH COLLATERALIZATION. If any Event of Default shall occur and be
continuing, the Borrowers shall, on the Business Day any Borrower receives
notice from the Administrative Agent or the Required Lenders thereof and of the
amount to be deposited, deposit in an account with the Collateral Agent, for the
benefit of the Lenders, an amount in cash equal to 105% of the L/C Exposure as
of such date. Such deposit shall be held by the Collateral Agent as collateral
for the payment and performance of the Obligations. The Collateral Agent shall
have exclusive dominion and control, including the exclusive right of
withdrawal, over such account. Other than any interest earned on the investment
of such deposits in Permitted Investments,
34
which investments shall be made at the option and sole discretion of the
Collateral Agent, such deposits shall not bear interest. Interest or profits, if
any, on such investments shall accumulate in such account. Moneys in such
account shall (i) automatically be applied by the Administrative Agent to
reimburse the Issuing Banks for L/C Disbursements for which they have not been
reimbursed (pro rata in accordance with the aggregate amount of L/C
Disbursements for which each Issuing Bank has not been reimbursed), (ii) be held
for the satisfaction of the reimbursement obligations of the Borrowers for the
L/C Exposure at such time and (iii) if the maturity of the Loans has been
accelerated, be applied to satisfy the Obligations. If the Borrowers are
required to provide an amount of cash collateral hereunder as a result of the
occurrence of an Event of Default, such amount (to the extent not applied as
aforesaid) shall be returned to the Borrowers within three Business Days after
all Events of Default have been cured or waived.
SECTION 2.22. SWINGLINE LOANS. (a) SWINGLINE COMMITMENT. Subject to the
terms and conditions and relying upon the representations and warranties herein
set forth, the Swingline Lender agrees to make loans to the Borrowers at any
time and from time to time on and after the Closing Date and until the earlier
of the Maturity Date and the termination of the Revolving Commitments in
accordance with the terms hereof, in an aggregate principal amount at any time
outstanding that will not result in (i) the aggregate principal amount of all
Swingline Loans exceeding $5,000,000 or (ii) the aggregate Revolving Exposures,
after giving effect to any Swingline Loan, exceeding the total Revolving
Commitments. Each Swingline Loan shall be in a principal amount that is an
integral multiple of $100,000 and not less than $100,000. The Swingline
Commitment may be terminated or reduced from time to time as provided herein.
Within the foregoing limits, the Borrowers may borrow, pay or prepay and
reborrow Swingline Loans hereunder, subject to the terms, conditions and
limitations set forth herein.
(b) SWINGLINE LOANS. The applicable Borrower shall notify the
Administrative Agent in writing or by telecopy (or by telephone promptly
confirmed in writing or by telecopy), not later than 12:00 noon, New York City
time, on the day of a proposed Swingline Loan. Such notice shall be delivered on
a Business Day, shall be irrevocable and shall refer to this Agreement and shall
specify the requested date (which shall be a Business Day) and amount of such
Swingline Loan. The Administrative Agent will promptly advise the Swingline
Lender of any notice received from such Borrower pursuant to this paragraph (b).
The Swingline Lender shall make each Swingline Loan available to the applicable
Borrower by means of a credit to the Disbursement Account by 3:00 p.m. on the
date such Swingline Loan is so requested.
(c) PREPAYMENT. Each Borrower shall have the right at any time and from
time to time to prepay any Swingline Loan, in whole or in part, upon giving
written or telecopy notice (or telephonic notice promptly confirmed by written
or telecopy notice) to the Swingline Lender and to the Administrative Agent
before 12:00 noon, New York City time, on the date of prepayment at the
Swingline Lender's address for notices specified on Schedule 2.01(a), PROVIDED
that all or any portion of a Swingline Loan borrowed and prepaid on the same
date shall be deemed to have been outstanding for one day.
(d) INTEREST. Each Swingline Loan shall be an ABR Loan and, subject to
the provisions of Section 2.07, shall bear interest as provided in Section
2.06(a).
(e) PARTICIPATIONS. The Swingline Lender may by written notice given to
the Administrative Agent not later than 10:00 a.m., New York City time, on any
Business Day require the Lenders to acquire participations on such Business Day
in all or a portion of the Swingline Loans outstanding. Such notice shall
specify the aggregate amount of Swingline Loans in which Lenders will
participate. The Administrative Agent will, promptly upon receipt of such
notice, give notice to each Lender, specifying in such notice such Lender's
Applicable Percentage of such Swingline Loans. In furtherance of the foregoing,
each Lender hereby absolutely and unconditionally agrees, upon receipt of notice
as provided above, to pay to the Administrative Agent, for the account of the
Swingline Lender, such Lender's Applicable Percentage of such Swingline Loans.
Each Lender acknowledges and agrees that its obligation to acquire
participations in Swingline Loans pursuant to this paragraph is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or an Event of Default,
and that each such payment shall be made without any offset, abatement,
withholding or reduction whatsoever. Each Lender shall comply with its
obligation under this paragraph by wire transfer of immediately available funds,
in the same manner as provided in Section 2.02(c) with respect to Loans made by
such Lender (and
35
Section 2.02(c) shall apply, MUTATIS MUTANDIS, to the payment obligations of
the Lenders) and the Administrative Agent shall promptly pay to the Swingline
Lender the amounts so received by it from the Lenders. The Administrative Agent
shall notify the applicable Borrower of any participations in any Swingline Loan
acquired pursuant to this paragraph and thereafter payments in respect of such
Swingline Loan shall be made to the Administrative Agent and not to the
Swingline Lender. Any amounts received by the Swingline Lender from any Borrower
(or other party on behalf of any Borrower) in respect of a Swingline Loan after
receipt by the Swingline Lender of the proceeds of a sale of participations
therein shall be promptly remitted to the Administrative Agent; any such amounts
received by the Administrative Agent shall be promptly remitted by the
Administrative Agent to the Lenders that shall have made their payments pursuant
to this paragraph and to the Swingline Lender, as their interests may appear.
The purchase of participations in a Swingline Loan pursuant to this paragraph
shall not relieve the Borrowers (or other party liable for obligations of the
Borrowers) of any default in the payment thereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each of FRD, FRI-M and the Borrowers represents and warrants to the
Administrative Agent, the Collateral Agent, the Documentation Agent, the
Syndication Agent, the Issuing Banks and each of the Lenders that:
SECTION 3.01. ORGANIZATION; POWERS. Each of Parent, FRD, the Borrowers
and each of the other Subsidiaries (a) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, (b) has all requisite power and authority to own its property and
assets and to carry on its business as now conducted and as proposed to be
conducted, (c) is qualified to do business in, and is in good standing in, every
jurisdiction where such qualification is required, except where the failure so
to qualify could not reasonably be expected to result in a Material Adverse
Effect, and (d) has the corporate power and authority to execute, deliver and
perform its obligations under each of the Loan Documents and each other
agreement or instrument contemplated hereby to which it is or will be a party
and, in the case of the Borrowers, to borrow hereunder.
SECTION 3.02. AUTHORIZATION. The execution, delivery and performance by
each Loan Party of each of the Loan Documents and the borrowings hereunder
(collectively, the "TRANSACTIONS") (a) have been duly authorized by all
requisite corporate and, if required, stockholder action and (b) will not (i)
violate (A) any provision of law, statute, rule or regulation, or the
certificate or articles of incorporation or other constitutive documents or
by-laws of any Loan Party, (B) any order of any Governmental Authority or (C)
any provision of any indenture, agreement or other instrument to which any Loan
Party is a party or by which any of them or any of their property is or may be
bound, (ii) be in conflict with, result in a breach of or constitute (alone or
with notice or lapse of time or both) a default under, or give rise to any right
to accelerate or to require the prepayment, repurchase or redemption of any
obligation under any such indenture, agreement or other instrument or (iii)
result in the creation or imposition of any Lien upon or with respect to any
property or assets now owned or hereafter acquired by any Loan Party (other than
any Lien created hereunder or under the Security Documents).
SECTION 3.03. ENFORCEABILITY. This Agreement has been duly executed and
delivered by FRD, FRI-M and each Borrower and constitutes, and each other Loan
Document when executed and delivered by each Loan Party thereto will constitute,
a legal, valid and binding obligation of such Loan Party enforceable against
such Loan Party in accordance with its terms.
SECTION 3.04. GOVERNMENTAL APPROVALS. No action, consent or approval
of, registration or filing with or any other action by any Governmental
Authority is or will be required in connection with the Transactions, except for
(a) the filing of Uniform Commercial Code financing statements and filings with
the United States Patent and Trademark Office and the United States Copyright
Office, (b) recordation of the Mortgages and (c) such as have been made or
obtained and are in full force and effect.
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SECTION 3.05. FINANCIAL STATEMENTS. Each of Parent and FRD has
heretofore furnished to the Lenders its consolidated balance sheets and
statements of income and changes in financial condition as of and for the fiscal
year ended December 30, 1998, which consolidated statements are audited by and
accompanied by the opinion of Deloitte & Touche, LLP, independent public
accountants. Such financial statements present fairly the financial condition
and results of operations and cash flows of Parent and its consolidated
subsidiaries and FRD and its consolidated subsidiaries, respectively, as of such
dates and for such periods. Such balance sheets and the notes thereto disclose,
as and to the extent required by GAAP, all material liabilities, direct or
contingent, of Parent and its consolidated subsidiaries and FRD and its
consolidated subsidiaries, respectively, as of the dates thereof and, as of such
dates, there were no other material liabilities, direct or contingent, of Parent
or its subsidiaries, including FRD, the Borrowers and the other Subsidiaries,
except as disclosed in the Confidential Information Memorandum. The financial
statements referred to in this Section 3.05(a) were prepared in accordance with
GAAP applied on a consistent basis.
SECTION 3.06. NO MATERIAL ADVERSE CHANGE. Since December 31, 1998,
there has been no material adverse change in the business, assets, operations,
properties, condition (financial or otherwise), contingent liabilities
(including but not limited to potential environmental and employee health and
safety liabilities), prospects or material agreements of (i) Parent and its
subsidiaries, taken as a whole, or (ii) FRD, the Borrowers and the other
Subsidiaries, taken as a whole.
SECTION 3.07. TITLE TO PROPERTIES; POSSESSION UNDER LEASES. (a) Each of
FRD, the Borrowers and the other Subsidiaries has good and marketable title to,
or valid leasehold interests in, all its material properties and assets
(including the Mortgaged Property), except for minor defects in title that do
not interfere with its ability to conduct its business as currently conducted or
to utilize such properties and assets for their intended purposes. All such
material properties and assets are free and clear of Liens, other than Liens
expressly permitted by Section 6.02.
(b) Each of FRD, the Borrowers and the other Subsidiaries has complied
with all obligations under all material leases to which it is a party and all
such leases are in full force and effect. Each of FRD, the Borrowers and the
other Subsidiaries enjoys peaceful and undisturbed possession under all such
material leases.
(c) None of the Loan Parties has received any notice of, or has any
knowledge of, any pending or contemplated condemnation proceeding affecting any
Mortgaged Property or any sale or disposition thereof in lieu of condemnation.
(d) No Loan Party is obligated under any right of first refusal, option
or other contractual right to sell, assign or otherwise dispose of any Mortgaged
Property or any interest therein.
SECTION 3.08. SUBSIDIARIES. Schedule 3.08 sets forth as of the Closing
Date a list of all Subsidiaries and the percentage ownership interest of FRD,
any Borrower or any other Subsidiary therein. The shares of capital stock or
other ownership interests so indicated on Schedule 3.08 are fully paid and
non-assessable and are owned by FRD, a Borrower or a Subsidiary free and clear
of all Liens, except for Liens created under the Existing Credit Agreement to be
released in connection with the first Credit Event hereunder.
SECTION 3.09. LITIGATION; COMPLIANCE WITH LAWS. (a) Except as set forth
on Schedule 3.09, there are not any actions, suits or proceedings at law or in
equity by or before any Governmental Authority now pending or, to the knowledge
of FRD, FRI-M or any Borrower, threatened against or affecting FRD, any Borrower
or any other Subsidiary or any business, property or rights of any such person
(i) that involve any Loan Document or the Transactions or (ii) that have had or
are reasonably likely to have, either individually or in the aggregate, a
Material Adverse Effect.
(b) None of FRD, the Borrowers or any of the other Subsidiaries or any
of their respective material properties or assets is in violation of, nor will
the continued operation of their material properties and assets as currently
conducted violate, any law, rule or regulation (including any zoning, building,
Environmental Law, ordinance, code or approval or any building permits) or any
restrictions of record or agreements
37
affecting any Mortgaged Property, or is in default with respect to any judgment,
writ, injunction, decree or order of any Governmental Authority, where such
violation or default could reasonably be expected to result in a Material
Adverse Effect.
(c) Certificates of occupancy and permits are in effect for each
Mortgaged Property as currently constructed.
SECTION 3.10. AGREEMENTS. (a) None of Parent, FRD, the Borrowers or
any of the other Subsidiaries is a party to any agreement or instrument or
subject to any corporate restriction that has resulted or could reasonably be
expected to result in a Material Adverse Effect.
(b) None of Parent, FRD, the Borrowers or any of the other Subsidiaries
is in default in any manner under any provision of any credit agreement,
indenture or other agreement or instrument evidencing Indebtedness, or any other
material agreement or instrument to which it is a party or by which it or any of
its properties or assets are or may be bound, where such default could
reasonably be expected to result in a Material Adverse Effect.
SECTION 3.11. FEDERAL RESERVE REGULATIONS. (a) None of Parent, FRD,
the Borrowers or any of the other Subsidiaries is engaged principally, or as one
of its important activities, in the business of extending credit for the
purpose of buying or carrying Margin Stock.
(b) No part of the proceeds of any Loan or any Letter of Credit will be
used, whether directly or indirectly, and whether immediately, incidentally or
ultimately, for any purpose that entails a violation of, or that is inconsistent
with, the provisions of the Regulations of the Board, including Regulation T, U
or X.
SECTION 3.12. INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY
ACT. None of Parent, FRD, the Borrowers or any other Subsidiary is (a) an
"investment company" as defined in, or subject to regulation under, the
Investment Company Act of 1940 or (b) a "holding company" as defined in, or
subject to regulation under, the Public Utility Holding Company Act of 1935.
SECTION 3.13. USE OF PROCEEDS. The Borrowers will use the proceeds of
the Loans and will request the issuance of Letters of Credit only for the
purposes specified in the preamble to this Agreement.
SECTION 3.14. TAX RETURNS. Each of Parent, FRD, the Borrowers and the
other Subsidiaries has timely filed or caused to be filed all Federal, state,
local and foreign tax returns or materials required to have been filed by it
(except for any non-material state, local or foreign returns) and has paid or
caused to be paid all taxes due and payable by it and all assessments received
by it, except taxes that are being contested in good faith by appropriate
proceedings and for which Parent, FRD, the Borrowers or such Subsidiary, as
applicable, shall have set aside on its books adequate reserves.
SECTION 3.15. NO MATERIAL MISSTATEMENTS. Neither the Confidential
Information Memorandum, taken as a whole, nor any other information, report,
financial statement, exhibit or schedule furnished by or on behalf of Parent,
FRD or the Borrowers to the Administrative Agent or any Lender in connection
with the negotiation of any Loan Document or included therein or delivered
pursuant thereto, taken as a whole together with any other information
(including the Confidential Information Memorandum) so furnished, contained,
contains or will contain any material misstatement of fact or omitted, omits or
will omit to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were, are or will be made,
not misleading, PROVIDED that to the extent that such information was
subsequently replaced, prior to the date of this Agreement, by other information
expressly correcting such earlier information (and the Administrative Agent and
Lenders were expressly informed by or on behalf of FRD or the Borrowers that
such other information was correcting such earlier information), the foregoing
representation does not apply to such earlier information.
SECTION 3.16. EMPLOYEE BENEFIT PLANS. Each of FRD, FRI-M, the Borrowers
and their ERISA Affiliates is in compliance in all material respects with the
applicable provisions of ERISA and the Code and the regulations and published
interpretations thereunder. No ERISA Event has occurred or is reasonably
38
expected to occur that, when taken together with all other such ERISA Events,
could reasonably be expected to result in material liability of FRD, FRI-M, the
Borrowers or any of their ERISA Affiliates. The present value of all benefit
liabilities under each Plan maintained, or contributed to, exclusively by one or
more of FRD, FRI-M, the Borrowers or the other Subsidiaries (based on those
assumptions used to fund such Plan) did not, as of the last annual valuation
date applicable thereto, exceed by more than $2,000,000 the fair market value of
the assets of such Plan (assuming the accrual of contributions for the current
or immediately preceding Plan year not yet due), and the present value of all
benefit liabilities of all underfunded Plans maintained, or contributed to,
exclusively by one or more of FRD, FRI-M, the Borrowers or the other
Subsidiaries (based on those assumptions used to fund each such Plan) did not,
as of the last annual valuation dates applicable thereto, exceed by more than
$2,000,000 the fair market value of the assets (assuming the accrual of
contributions for the current or immediately preceding Plan year not yet due) of
all such underfunded Plans and the present value of all benefit liabilities
under each other Plan (based on those assumptions used to fund such other Plan)
did not, as of the last annual valuation date applicable thereto, exceed by more
than $5,000,000 the fair market value of the assets of such other Plan (assuming
the accrual of contributions for the current or immediately preceding Plan year
not yet due), and the present value of all benefit liabilities of all
underfunded Plans (based on those assumptions used to fund each such Plan) did
not, as of the last annual valuation dates applicable thereto, exceed by more
than $5,000,000 the fair market value of the assets (assuming the accrual of
contributions for the current or immediately preceding Plan year not yet due) of
all such underfunded Plans.
SECTION 3.17. ENVIRONMENTAL MATTERS. Except as set forth in Schedule
3.17:
(a) The properties owned or operated by FRD, the Borrowers and the
other Subsidiaries (the "PROPERTIES") do not contain any Hazardous Materials in
amounts or concentrations which (i) constitute, or constituted a violation of,
(ii) require Remedial Action under, or (iii) could otherwise give rise to
liability under, Environmental Laws, which violations, Remedial Actions and
liabilities, in the aggregate, could reasonably be expected to result in a
Material Adverse Effect;
(b) The Properties and all operations of FRD, the Borrowers and the
other Subsidiaries are in compliance, and in the last five years have been in
compliance, with all Environmental Laws, and all necessary Environmental Permits
have been obtained and are in effect, except to the extent that such
non-compliance or failure to obtain any necessary permits, in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect;
(c) There have been no Releases or threatened Releases at, from, under
or proximate to the Properties or otherwise in connection with the operations of
FRD, the Borrowers or the other Subsidiaries, which Releases or threatened
Releases, in the aggregate, could reasonably be expected to result in a Material
Adverse Effect;
(d) None of FRD, the Borrowers or any of the other Subsidiaries has
received any notice of an Environmental Claim in connection with the Properties
or the operations of FRD, the Borrowers or the other Subsidiaries or with regard
to any person whose liabilities for environmental matters FRD, the Borrowers or
the other Subsidiaries has retained or assumed, in whole or in part,
contractually, by operation of law or otherwise, which, in the aggregate, could
reasonably be expected to result in a Material Adverse Effect, nor do FRD, the
Borrowers or the Subsidiaries have reason to believe that any such notice will
be received or is being threatened; and
(e) Hazardous Materials have not been transported from the Properties,
nor have Hazardous Materials been generated, treated, stored or disposed of at,
on or under any of the Properties in a manner that could give rise to liability
under any Environmental Law, nor have FRD, the Borrowers or the other
Subsidiaries retained or assumed any liability, contractually, by operation of
law or otherwise, with respect to the generation, treatment, storage or disposal
of Hazardous Materials, which transportation, generation, treatment, storage or
disposal, or retained or assumed liabilities, in the aggregate, could reasonably
be expected to result in a Material Adverse Effect.
39
SECTION 3.18. INSURANCE. Schedule 3.18 sets forth a true, complete and
correct description of all insurance maintained by Parent, FRD, or any Borrower
or by Parent, FRD, or any Borrower for the Subsidiaries as of the date hereof
and the Closing Date. As of each such date, such insurance is in full force and
effect and all premiums have been duly paid. Parent, FRD, the Borrowers and the
Subsidiaries have insurance in such amounts and covering such risks and
liabilities as are in accordance with normal industry practice.
SECTION 3.19. SECURITY DOCUMENTS. (a) The Pledge Agreement is effective
to create in favor of the Collateral Agent, for the ratable benefit of the
Secured Parties, a legal, valid and enforceable security interest in the
Collateral (as defined in the Pledge Agreement) and, when the Collateral is
delivered to the Collateral Agent, the Pledge Agreement shall constitute a fully
perfected first priority Lien on, and security interest in, all right, title and
interest of the pledgors thereunder in such Collateral, in each case prior and
superior in right to any other person.
(b) The Security Agreement is effective to create in favor of the
Collateral Agent, for the ratable benefit of the Secured Parties, a legal, valid
and enforceable security interest in the Collateral (as defined in the Security
Agreement) and, when financing statements in appropriate form are filed in the
offices specified on Schedule 6 to the Perfection Certificate, the Security
Agreement shall constitute a fully perfected Lien on, and security interest in,
all right, title and interest of the grantors thereunder in such Collateral
(other than the Intellectual Property, as defined in the Security Agreement) as
to which perfection is effected through the filing of such financing statements,
in each case prior and superior in right to any other person, other than with
respect to Liens expressly permitted by Section 6.02.
(c) When the Security Agreement is filed in the United States Patent
and Trademark Office and the United States Copyright Office, the Security
Agreement shall constitute a fully perfected Lien on, and security interest in,
all right, title and interest of the grantors thereunder in the Intellectual
Property (as defined in the Security Agreement), in each case prior and superior
in right to any other person (it being understood that subsequent recordings in
the United States Patent and Trademark Office and the United States Copyright
Office may be necessary to perfect a lien on registered trademarks, trademark
applications and copyrights acquired by the grantors after the date hereof).
(d) The Mortgages are effective to create in favor of the Collateral
Agent, for the ratable benefit of the Secured Parties, a legal, valid and
enforceable Lien on all of the right, title and interest in and to each
Mortgaged Property thereunder and the proceeds thereof, and when the Mortgages
are filed in the applicable office specified on Schedule 3.19(d), the Mortgages
shall constitute a fully perfected Lien on, and security interest in, all right,
title and interest of the Borrowers and the other Subsidiaries in the Mortgaged
Property and the proceeds thereof, in each case prior and superior in right to
any other person, other than with respect to the rights of persons pursuant to
Liens expressly permitted by Section 6.02.
SECTION 3.20. LABOR MATTERS. As of the date hereof and the Closing
Date, there are no strikes, lockouts or slowdowns against FRD, any Borrower or
any other Subsidiary pending or, to the knowledge of FRD, FRI-M or any Borrower,
threatened. The hours worked by and payments made to employees of FRD, each
Borrower and each other Subsidiary have not been in violation of the Fair Labor
Standards Act or any other applicable Federal, state, local or foreign law
dealing with such matters (except for any violations that, individually or in
the aggregate, would not be material). All payments due from FRD, any
Borrower or any other Subsidiary, or for which any claim may be made against
FRD, any Borrower or such other Subsidiary, on account of wages and employee
health and welfare insurance and other benefits (except for any payments or
claims that, individually or in the aggregate, if not paid, would not be
material), have been paid or accrued as a liability on the books of FRD, any
Borrower or such other Subsidiary. The consummation of the Transactions will not
give rise to any right of termination or right of renegotiation on the part of
any union under any collective bargaining agreement to which FRD, any Borrower
or any other Subsidiary is bound.
SECTION 3.21. SOLVENCY. Immediately after the consummation of the
Transactions to occur on the Closing Date, and immediately following the making
of each Loan made on the Closing Date, and after giving effect to the
application of the proceeds of such Loans, (a) the fair value of the assets of
each Loan
40
Party, at a fair valuation, will exceed its debts and liabilities, subordinated,
contingent or otherwise; (b) the present fair saleable value of the property of
each Loan Party will be greater than the amount that will be required to pay the
probable liability of its debts and other liabilities, subordinated, contingent
or otherwise, as such debts and other liabilities become absolute and matured;
(c) each Loan Party will be able to pay its debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become absolute and
matured; and (d) each Loan Party will not have unreasonably small capital with
which to conduct the business in which it is engaged as such business is now
conducted and is proposed to be conducted following the Closing Date.
SECTION 3.22. YEAR 2000. Any reprogramming required to permit the
proper functioning, in and following the year 2000, of (a) the computer systems
of FRD, the Borrowers and the other Subsidiaries and (b) equipment containing
embedded microchips (including systems and equipment supplied by others or with
which FRD's, the Borrowers' or the other Subsidiaries' systems interface) and
the testing of all such systems and equipment, as so reprogrammed, will be
completed by September 30, 1999. The cost to FRD, the Borrowers and the other
Subsidiaries of such reprogramming and testing and of the reasonably foreseeable
consequences of year 2000 to FRD, the Borrowers and the other Subsidiaries
(including reprogramming errors and the failure of others' systems or equipment)
will not result in a Default or a Material Adverse Effect. Except for such
reprogramming referred to in the preceding sentence as may be necessary, the
computer and management information systems of FRD, the Borrowers and the other
Subsidiaries are and, with ordinary course upgrading and maintenance, will
continue for the term of this Agreement to be, sufficient to permit FRD, the
Borrowers and the other Subsidiaries to conduct their businesses without the
occurrence of a Default or a Material Adverse Effect.
ARTICLE IV
CONDITIONS OF LENDING
The obligations of the Lenders to make Loans and of the Issuing Banks
to issue Letters of Credit hereunder are subject to the satisfaction of the
following conditions:
SECTION 4.01. ALL CREDIT EVENTS. On the date of each Borrowing,
including each Borrowing in which Loans are refinanced with new Loans as
contemplated by Section 2.02(f), and on the date of each issuance of a Letter of
Credit (each such event being called a "CREDIT EVENT"):
(a) The Administrative Agent shall have received a notice of such
Borrowing as required by Section 2.03 (or such notice shall have been deemed
given in accordance with Section 2.03) or, in the case of the issuance of a
Letter of Credit, the applicable Issuing Bank and the Administrative Agent shall
have received a notice requesting the issuance of such Letter of Credit as
required by Section 2.21(b), or, in the case of the Borrowing of a Swingline
Loan, the Swingline Lender and the Administrative Agent shall have received a
notice requesting such Swingline Loan as required by Section 2.22(b).
(b) The representations and warranties set forth in Article III that
are qualified as to materiality (except, in the case of a refinancing that does
not increase the aggregate principal amount of Loans outstanding, the
representations set forth in Sections 3.06 and 3.09) shall be true and correct
in all respects and the representations and warranties set forth in Article III
that are not so qualified (except, in the case of a refinancing that does not
increase the aggregate principal amount of Loans outstanding, the
representations set forth in Sections 3.06 and 3.09) shall be true and correct
in all material respects, in each case, on and as of the date of such Credit
Event with the same effect as though made on and as of such date, except to the
extent such representations and warranties expressly relate to an earlier date,
in which case the representations and warranties that are qualified as to
materiality and that expressly relate to an earlier date shall have been true
and correct in all respects as of such earlier date and the representations and
warranties that are not so qualified and that expressly relate to an earlier
date shall have been true and correct in all material respects as of such
earlier date.
41
(c) The Borrowers and each other Loan Party shall be in compliance with
all the terms and provisions set forth herein and in each other Loan Document on
its part to be observed or performed, and at the time of and immediately after
such Credit Event, no Event of Default or Default shall have occurred and be
continuing.
Each Credit Event shall be deemed to constitute a representation and
warranty by FRD and each Borrower on the date of such Credit Event as to the
matters specified in paragraphs (b) and (c) of this Section 4.01.
SECTION 4.02. FIRST CREDIT EVENT. On the Closing Date:
(a) The Administrative Agent and the Documentation Agent shall
have received, on behalf of themselves, the Lenders and the Issuing
Bank, a favorable written opinion of (i) Parker, Poe, Xxxxx & Xxxxxxxxx
L.L.P., counsel for Parent, FRD and the Borrowers, substantially to the
effect set forth in Exhibit K and (ii) Xxx Xxxxxx, Esq., acting as
local counsel for Parent, FRD and the Borrowers, substantially to the
effect set forth in Exhibit L, in each case, (A) dated the Closing
Date, (B) addressed to the Issuing Banks, the Administrative Agent, the
Collateral Agent, the Documentation Agent and the Lenders and (C)
covering such other matters relating to the Loan Documents and the
Transactions as the Administrative Agent and the Documentation Agent
shall reasonably request, and FRD and the Borrowers hereby request such
counsel to deliver such opinions.
(b) All legal matters incident to this Agreement, the
Borrowings and extensions of credit hereunder and the other Loan
Documents shall be satisfactory to the Lenders, to the Issuing Banks,
to the Administrative Agent, to the Documentation Agent and to Cravath,
Swaine & Xxxxx, counsel for the Documentation Agent.
(c) The Administrative Agent shall have received (i) a copy of
the certificate or articles of incorporation, including all amendments
thereto, of each Loan Party, certified as of a recent date by the
Secretary of State of the state of its organization, and a certificate
as to the good standing of each Loan Party as of a recent date, from
such Secretary of State; (ii) a certificate of the Secretary or
Assistant Secretary of each Loan Party dated the Closing Date and
certifying (A) that attached thereto is a true and complete copy of the
by-laws of such Loan Party as in effect on the Closing Date and at all
times since a date prior to the date of the resolutions described in
clause (B) below, (B) that attached thereto is a true and complete copy
of all resolutions duly adopted by the Board of Directors of such Loan
Party authorizing the execution, delivery and performance of the Loan
Documents to which such person is a party and, in the case of the
Borrowers, the borrowings hereunder, and that such resolutions have not
been modified, rescinded or amended and are in full force and effect,
(C) that the certificate or articles of incorporation of such Loan
Party have not been amended since the date of the last amendment
thereto shown on the certificate of good standing furnished pursuant to
clause (i) above, and (D) as to the incumbency and specimen signature
of each officer executing any Loan Document or any other document
delivered in connection herewith on behalf of such Loan Party; (iii) a
certificate of another officer as to the incumbency and specimen
signature of the Secretary or Assistant Secretary executing the
certificate pursuant to (ii) above; and (iv) such other documents as
the Lenders, the Issuing Banks or Cravath, Swaine & Xxxxx, counsel for
the Documentation Agent, may reasonably request.
(d) The Administrative Agent shall have received a
certificate, dated the Closing Date and signed by a Financial Officer
of FRD, confirming compliance with the conditions precedent set forth
in paragraphs (b) and (c) of Section 4.01.
(e) The Administrative Agent and the Lenders shall have
received all Fees and other amounts due and payable on or prior to the
Closing Date, including, to the extent invoiced, reimbursement or
payment of all out-of-pocket expenses required to be reimbursed or paid
by the Borrowers hereunder, under the Fee Letter, under any other Loan
Document or as otherwise agreed in writing.
42
(f) The Pledge Agreement shall have been duly executed by the
parties thereto and delivered to the Collateral Agent and shall be in
full force and effect, and all the outstanding capital stock of the
Borrowers and the other Subsidiaries shall have been duly and validly
pledged thereunder to the Collateral Agent for the ratable benefit of
the Secured Parties and certificates representing such shares,
accompanied by instruments of transfer and stock powers endorsed in
blank, shall be in the actual possession of the Collateral Agent;
PROVIDED that to the extent to do so would cause adverse tax
consequences to FRD or any Borrower, (A) none of FRD, the Borrowers or
any Domestic Subsidiary shall be required to pledge more than 65% of
the capital stock of any Foreign Subsidiary and (B) no Foreign
Subsidiary shall be required to pledge the capital stock of any of its
subsidiaries.
(g) The Security Agreement shall have been duly executed by
the Loan Parties party thereto and shall have been delivered to the
Collateral Agent and shall be in full force and effect on such date and
each document (including each Uniform Commercial Code financing
statement) required by law or reasonably requested by the
Administrative Agent or the Documentation Agent to be filed, registered
or recorded in order to create in favor of the Collateral Agent for the
benefit of the Secured Parties a valid, legal and perfected
first-priority security interest in and lien on the Collateral (subject
to any Lien expressly permitted by Section 6.02) described in such
agreement shall have been delivered to the Collateral Agent.
(h) The Collateral Agent shall have received the results of a
search of the Uniform Commercial Code filings (or equivalent filings)
made with respect to the Loan Parties in the states (or other
jurisdictions) in which the chief executive office of each such person
is located, any offices of such persons in which records have been kept
relating to accounts and the other jurisdictions in which Uniform
Commercial Code filings (or equivalent filings) are to be made pursuant
to the preceding paragraph, together with copies of the financing
statements (or similar documents) disclosed by such search, and
accompanied by evidence satisfactory to the Collateral Agent that the
Liens indicated in any such financing statement (or similar document)
would be permitted under Section 6.02 or have been released (or will be
released pursuant to UCC termination statements which have been
received by, and are satisfactory to, the Collateral Agent).
(i) The Collateral Agent shall have received a Perfection
Certificate with respect to the Loan Parties dated the Closing Date and
duly executed by a Responsible Officer of FRD.
(j)(i) Each of the Security Documents, in form and substance
satisfactory to the Lenders, relating to each Mortgaged Property shall
have been duly executed by the parties thereto and delivered to the
Collateral Agent and shall be in full force and effect, (ii) each such
Mortgaged Property shall not be subject to any Lien other than those
permitted under Section 6.02, (iii) each of such Security Documents
shall have been filed and recorded in the recording office as specified
on Schedule 3.19(d) and, in connection therewith, the Collateral Agent
and the Documentation Agent shall have received evidence satisfactory
to them of each such filing and recordation (or a lender's title
insurance policy, in form and substance acceptable to the Collateral
Agent and the Documentation Agent, insuring such Security Document as a
first lien on each such Mortgaged Property (subject to any Lien
permitted by Section 6.02) shall have been received by the Collateral
Agent and the Documentation Agent) and (iv) the Collateral Agent shall
have received such other documents, including a policy or policies of
title insurance issued by a nationally recognized title insurance
company, together with such endorsements, coinsurance and reinsurance
as may be reasonably requested by the Collateral Agent, the
Documentation Agent or the Lenders, insuring the Mortgages as valid
first liens on the Mortgaged Properties, free of Liens other than those
permitted under Section 6.02, together with such surveys, abstracts,
evidence of zoning and other legal compliance, certificates of
occupancy and other permits (including such endorsements as the
Administrative Agent may require), and legal opinions required to be
furnished pursuant to the terms of the Mortgages or as reasonably
requested by the Collateral Agent, the Documentation Agent or the
Lenders.
43
(k) Each of the Parent Guarantee Agreement, the FRD Guarantee
Agreement and the Subsidiary Guarantee Agreement shall have been duly
executed by the parties thereto, shall have been delivered to the
Collateral Agent and shall be in full force and effect.
(l) The Indemnity, Subrogation and Contribution Agreement
shall have been duly executed by the parties thereto, shall have been
delivered to the Collateral Agent and shall be in full force and
effect.
(m) The Administrative Agent shall have received a copy of, or
a certificate as to coverage under, the insurance policies required by
Section 5.02 and the applicable provisions of the Security Documents,
each of which shall be endorsed or otherwise amended to include a
"standard" or "New York" lender's loss payable endorsement and to name
the Collateral Agent as additional insured, in form and substance
satisfactory to the Administrative Agent and counsel for the
Documentation Agent.
(n) The Administrative Agent and the Documentation Agent shall
be reasonably satisfied with all of Parent's, FRD's, the Borrowers' and
the other Subsidiaries' material agreements and other arrangements with
their suppliers (including the terms of sale and any financing
arrangements with such suppliers), service providers, franchisees and
franchisors (it being understood that such agreements and arrangements
shall, to the extent described to the Administrative Agent and the
Documentation Agent heretofore, be deemed satisfactory to the
Administrative Agent and the Documentation Agent).
(o) The Administrative Agent shall have received a Borrowing
Request pursuant to Section 2.03.
(p) After giving effect to the repayment of all amounts
outstanding under the Existing Credit Agreement and the other
transactions contemplated hereby, FRD, the Borrowers and the other
Subsidiaries shall have no outstanding Indebtedness or preferred stock
other than (i) Indebtedness listed on Schedule 6.01, (ii) its
Obligations hereunder, (iii) the Senior Notes and (iv) other
Indebtedness permitted under Section 6.01(a).
(q) The amounts, terms and conditions of all Indebtedness
(including the Senior Notes) and Capital Lease Obligations to remain
outstanding after the Closing Date (including terms and conditions
relating to the interest rate, fees, amortization, maturity, prepayment
requirements, mandatory call or redemption features, sinking funds,
security, subordination (if any), covenants, events of default and
remedies) shall be satisfactory in all respects to the Lenders.
(r) Prior to or substantially simultaneously with the first
Credit Event, (i) the principal, interest, fees and other amounts due
under the Existing Credit Agreement shall have been repaid in full,
(ii) all commitments to lend under the Existing Credit Agreement shall
have been permanently terminated, (iii) all obligations under or
relating to the Existing Credit Agreement and all security interests
and guarantees related thereto shall have been discharged and (iv) the
Administrative Agent and the Documentation Agent shall have received
satisfactory evidence of such repayment, termination and discharge.
(s) The Administrative Agent and the Documentation Agent shall
be satisfied with the capitalization, structure and equity ownership of
Parent and its subsidiaries and FRD and the Subsidiaries after giving
effect to the repayment of all amounts outstanding under the Existing
Credit Agreement and the other transactions contemplated hereby (it
being understood that the capitalization and structure of Parent and
its subsidiaries and FRD and the Subsidiaries that are described in the
Confidential Information Memorandum shall, to the extent specifically
described in the Confidential Information Memorandum, be deemed
satisfactory to the Administrative Agent and the Documentation Agent).
44
(t) The Lenders shall have received audited consolidated
balance sheets and related statements of income, stockholders' equity
and cash flows for Parent, FRD and (to the extent available) the
Borrowers for the three fiscal years ended prior to the Closing Date,
which financial statements shall not be materially inconsistent with
the financial statements or forecasts previously provided to the
Lenders.
(u) The Administrative Agent and the Documentation Agent shall
be reasonably satisfied as to the amount and nature of Consolidated
Capital Expenditures (i) made in, or budgeted for, the current fiscal
year or (ii) projected for the fiscal years 2000 to 2003 (it being
understood that the amount and nature of such Consolidated Capital
Expenditures, to the extent specifically described in the Confidential
Information Memorandum, shall be deemed satisfactory to the
Administrative Agent and the Documentation Agent).
(v) The Lenders shall be reasonably satisfied as to the amount
and nature of any contingent liabilities (including but not limited to
environmental and employee health and safety exposures) to which
Parent, FRD, the Borrowers and the other Subsidiaries may be subject
and with the plans of Parent, FRD, the Borrowers and the other
Subsidiaries with respect thereto, and the Administrative Agent and the
Documentation Agent shall have received the Phase I environmental
assessments with respect to the Mortgaged Properties prepared at the
time of their acquisition by FRD.
(w) There shall be no litigation, arbitration or
administrative proceeding or consent decree that would reasonably be
expected to have a material adverse effect on (i) on the business,
assets, operations, properties, condition (financial or otherwise),
contingent liabilities (including but not limited to potential
environmental and employee health and safety liabilities), prospects or
material agreements of (A) Parent and its subsidiaries, taken as a
whole, or (B) FRD, the Borrowers and the other Subsidiaries, taken as a
whole or (ii) the ability of Parent, FRD, FRI-M or the Borrowers to
consummate the transactions contemplated hereby.
(x) The Lenders shall have received the written certification
of a Financial Officer of FRD that Consolidated EBITDA for the quarter
ended March 31, 1999, and for each fiscal month after March 31, 1999
ended prior to the Closing Date, is not materially inconsistent with
the projections and other disclosure set forth in the Confidential
Information Memorandum.
(y) The Lenders shall have received financial projections for
(i) Parent and its subsidiaries and (ii) FRD and the Subsidiaries for
fiscal years 1999 through 2003, in each case in form and substance
satisfactory to the Administrative Agent and the Documentation Agent.
(z) The Board of Directors of Parent shall have designated FRD
and its subsidiaries as "Subsidiaries" for purposes of the indenture
(the "PARENT INDENTURE") with respect to the 11 1/4% Senior Notes due
2008 of Parent (the "PARENT NOTES") in accordance with the terms
thereof, and the Administrative Agent and the Documentation Agent shall
have received a copy of the resolutions of the Board of Directors of
Parent authorizing such designation together with (A) a reasonably
detailed calculation of the Fixed Charge Coverage Ratio (as defined in
the Parent Indenture) for the four fiscal quarters last preceding such
designation, determined in accordance with the terms of the Parent
Indenture and showing a Fixed Charge Coverage Ratio (as defined in the
Parent Indenture) for such period on such a pro forma basis of at least
2:1, and (B) a certificate of the chief financial officer of Parent as
to the accuracy and basis of such calculations, in form and substance
reasonably satisfactory to the Administrative Agent and the
Documentation Agent.
(aa) A majority of the disinterested members of the Board of
Directors of FRD shall have made a determination that the Parent
Guarantee Agreement is on "Fair Terms" (as defined in the Senior Notes
Indenture) and the Administrative Agent and the Documentation Agent
shall have received a copy of the resolutions of the Board of Directors
of FRD reflecting such determination.
45
(bb) The repayment of all amounts outstanding under the
Existing Credit Agreement and the other transactions contemplated
hereby shall not (i) violate any applicable law, statute, consent
decree, rule or regulation or (ii) conflict with, or result in a
default or event of default under, or a termination or interruption of,
any material agreement of Parent or any of its subsidiaries.
ARTICLE V
AFFIRMATIVE COVENANTS
Each of FRD, FRI-M and the Borrowers covenants and agrees with each
Lender that so long as this Agreement shall remain in effect and until the
Commitments have been terminated and the principal of and interest on each Loan,
all Fees and all other expenses or amounts payable under any Loan Document shall
have been paid in full and all Letters of Credit have been canceled or have
expired and all amounts drawn thereunder have been reimbursed in full, unless
the Required Lenders shall otherwise consent in writing, each of FRD, FRI-M and
the Borrowers will, and will cause each of the other Subsidiaries to:
SECTION 5.01. EXISTENCE; BUSINESSES AND PROPERTIES. (a) Do or cause to
be done all things necessary to preserve, renew and keep in full force and
effect its legal existence, except as otherwise expressly permitted under
Section 6.05.
(b) Do or cause to be done all things necessary to obtain, preserve,
renew, extend and keep in full force and effect the rights, licenses, permits,
franchises, authorizations, patents, copyrights, trademarks and trade names
material to the conduct of its business; maintain and operate such business in
substantially the manner in which it is presently conducted and operated; comply
in all material respects with all applicable laws, rules, regulations (including
any zoning, building, Environmental Law, ordinance, code or approval or any
building permits or any restrictions of record or agreements affecting the
Mortgaged Property) and decrees and orders of any Governmental Authority,
whether now in effect or hereafter enacted; and at all times maintain and
preserve all property material to the conduct of such business and keep such
property in good repair, working order and condition and from time to time make,
or cause to be made, all needful and proper repairs, renewals, additions,
improvements and replacements thereto necessary in order that the business
carried on in connection therewith may be properly conducted at all times.
SECTION 5.02. INSURANCE. Maintain with responsible and reputable
insurance companies or associations insurance in such amounts and covering such
risks as is consistent with prudent business practice for comparable companies
in the industry and such additional insurance as is required by applicable law;
PROVIDED, HOWEVER, that FRD, the Borrowers and the other Subsidiaries may
self-insure, pursuant to policies adopted by the Board of Directors of FRD and
reviewed at least once annually, to the extent determined in good faith by
senior management of FRD to be consistent with prudent business practice, in the
best interest of FRD, the Borrowers and the other Subsidiaries and not
materially adverse to the rights and interests of the Lenders under this
Agreement and the other Loan Documents.
SECTION 5.03. OBLIGATIONS AND TAXES. Pay its Indebtedness and other
obligations promptly and in accordance with their terms and pay and discharge
promptly when due all taxes, assessments and governmental charges or levies
(other than any tax, assessment or governmental charge or levy in an amount less
than $250,000, PROVIDED that the failure to pay or discharge the same,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect) imposed upon it or upon its income or profits or in
respect of its property, before the same shall become delinquent or in default,
as well as all lawful claims for labor, materials and supplies or otherwise
(other than any claim for an amount less than $250,000, PROVIDED that the
failure to pay or discharge the same, individually or in the aggregate, could
not reasonably be expected to result in a Material Adverse Effect) that, if
unpaid, might give rise to a Lien upon such properties or any part thereof;
PROVIDED, HOWEVER, that such payment and discharge shall not be required with
respect to any such tax, assessment, charge, levy or claim so long as the
validity or amount thereof shall be contested in good faith by appropriate
proceedings and FRD, such Borrower or such other Subsidiary, as applicable,
shall have set aside on its books adequate reserves with respect thereto in
accordance with GAAP
46
and such contest operates to suspend collection of the contested obligation,
tax, assessment or charge and enforcement of a Lien and, in the case of the
Mortgaged Property, there is no risk of forfeiture of such property.
SECTION 5.04. FINANCIAL STATEMENTS, REPORTS, ETC. In the case of FRD,
furnish to the Administrative Agent:
(a) within 90 days after the end of each fiscal year, (i)
Parent's consolidated balance sheets and related statements of
operations, stockholders' equity and cash flows showing the financial
condition of Parent and its consolidated subsidiaries as of the close
of such fiscal year and the results of its operations and the
operations of such subsidiaries during such year, all audited by
Deloitte & Touche LLP or other independent public accountants of
recognized national standing acceptable to the Administrative Agent and
accompanied by an opinion of such accountants (which shall not be
qualified in any material respect) to the effect that such consolidated
financial statements fairly present the financial condition and results
of operations of Parent and its consolidated subsidiaries on a
consolidated basis in accordance with GAAP consistently applied and
(ii) FRD's consolidated balance sheets and related statements of
operations, stockholders' equity and cash flows showing the financial
condition of FRD and the consolidated Subsidiaries as of the close of
such fiscal year and the results of its operations and the operations
of such Subsidiaries during such year, all audited by Deloitte & Touche
LLP or other independent public accountants of recognized national
standing acceptable to the Administrative Agent and accompanied by an
opinion of such accountants (which shall not be qualified in any
material respect) to the effect that such consolidated financial
statements fairly present the financial condition and results of
operations of FRD and the consolidated Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied;
(b) within 45 days after the end of each of the first three
fiscal quarters of each fiscal year, (i) Parent's consolidated balance
sheets and related statements of operations, stockholders' equity and
cash flows showing the financial condition of Parent and its
consolidated subsidiaries as of the close of such fiscal quarter and
the results of its operations and the operations of such subsidiaries
during such fiscal quarter and the then elapsed portion of the fiscal
year, all certified by one of its Financial Officers as fairly
presenting the financial condition and results of operations of Parent
and its consolidated subsidiaries on a consolidated basis in accordance
with GAAP consistently applied, subject to normal year-end audit
adjustments and (ii) FRD's consolidated balance sheets and related
statements of operations, stockholders' equity and cash flows showing
the financial condition of FRD and the consolidated Subsidiaries as of
the close of such fiscal quarter and the results of its operations and
the operations of such Subsidiaries during such fiscal quarter and the
then elapsed portion of the fiscal year, all certified by one of its
Financial Officers as fairly presenting the financial condition and
results of operations of FRD and the consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied,
subject to normal year-end audit adjustments;
(c) within 60 days after the end of the last fiscal month of
each fiscal year, 45 days after the end of the third, sixth and ninth
fiscal months of each fiscal year, and 35 days after the end of each
other fiscal month, FRD's consolidated balance sheets and related
statements of operations and stockholders' equity and consolidated cash
flows showing the financial condition of FRD and the consolidated
Subsidiaries as of the close of such month and the results of its
operations and the operations of such Subsidiaries during such month
and the then elapsed portion of the fiscal year (together with
comparative information for the same month and elapsed portion of the
prior fiscal year to the extent available) and the monthly management
reports and other financial information with respect to the Borrowers
that have been provided historically by FRD with such financial
statements, all certified by one of its Financial Officers as fairly
presenting the financial condition and results of operations of FRD and
the consolidated Subsidiaries on a consolidated basis in accordance
with GAAP consistently applied, subject to normal year-end audit
adjustments;
(d) concurrently with any delivery of financial statements
under sub-paragraph (a)(ii) or (b)(ii) above, a certificate of the
accounting firm or Financial Officer (i) opining on or certifying
47
such statements (which certificate, when furnished by an accounting
firm, may be limited to accounting matters and disclaim responsibility
for legal interpretations) certifying that no Event of Default or
Default has occurred or, if such an Event of Default or Default has
occurred, specifying the nature and extent thereof and any corrective
action taken or proposed to be taken with respect thereto and (ii)
setting forth reasonably detailed calculations demonstrating compliance
with Sections 6.10, 6.11, 6.12, 6.13 and 6.14;
(e) as soon as available and in any event no later than 45
days after the end of each fiscal year of Parent, provide to the
Administrative Agent (i) the annual business plan of Parent and its
subsidiaries and FRD and the Subsidiaries, (ii) projections prepared by
management of Parent and FRD of (A) statements concerning selected
financial data (consisting of net sales, earnings before interest and
taxes, working capital items, capital expenditures and depreciation) on
a quarterly basis for the first year following such fiscal year, and
(B) balance sheets, income statements and cash flow statements, on a
quarterly basis for the first year following such fiscal year and on an
annual basis for each year thereafter during the term of this
Agreement, and (iii) a statement in reasonable detail of the
assumptions used in preparing such projections, all in form and
substance reasonably satisfactory to the Administrative Agent.
(f) promptly after the same become publicly available, copies
of all periodic and other reports, proxy statements and other materials
filed by Parent, FRD or any Subsidiary with the Securities and Exchange
Commission, or any Governmental Authority succeeding to any or all of
the functions of such Commission, or with any national securities
exchange or national quotation system, or distributed to its
shareholders, as the case may be; and
(g) promptly, from time to time, such other information
regarding the operations, business affairs and financial condition of
Parent, FRD, any Borrower or any Subsidiary, or compliance with the
terms of any Loan Document, as the Administrative Agent or any Lender
may reasonably request.
SECTION 5.05. LITIGATION AND OTHER NOTICES. Furnish to the
Administrative Agent, each Issuing Bank and each Lender prompt written notice of
the following:
(a) any Event of Default or Default, specifying the nature and
extent thereof and the corrective action (if any) taken or proposed to
be taken with respect thereto;
(b) the filing or commencement of, or any threat or notice of
intention of any person to file or commence, any action, suit or
proceeding, whether at law or in equity or by or before any
Governmental Authority, against Parent, FRD, any Borrower or any other
Subsidiary that could reasonably be expected to result in a Material
Adverse Effect; and
(c) any development that has resulted in, or could reasonably
be expected to result in, a Material Adverse Effect.
SECTION 5.06. EMPLOYEE BENEFITS. (a) Comply in all material respects
with the applicable provisions of ERISA and the Code and (b) furnish to the
Administrative Agent as soon as possible after, and in any event within 30 days
after any Responsible Officer of FRD or any Borrower or any ERISA Affiliate
knows or has reason to know that, (i) any ERISA Event with respect to any Plan
maintained, or contributed to, exclusively by one or more of FRD, any Borrower
or any other Subsidiary has occurred that, alone or together with any other such
ERISA Event, could reasonably be expected to result in liability of FRD and the
Subsidiaries in an aggregate amount exceeding $2,000,000 or (ii) any other ERISA
Event has occurred that, alone or together with any other ERISA Event, could
reasonably be expected to result in liability of Parent and its ERISA Affiliates
(including FRD, each Borrower and each other Subsidiary) in an aggregate amount
exceeding $5,000,000, a statement of a Financial Officer of FRD setting forth
details as to such ERISA Event and the action, if any, that FRD proposes to take
with respect thereto.
48
SECTION 5.07. MAINTAINING RECORDS; ACCESS TO PROPERTIES AND
INSPECTIONS. Keep proper books of record and account in which full, true and
correct entries in conformity with GAAP and all requirements of law are made of
all dealings and transactions in relation to its business and activities. Each
Loan Party will, and will cause each of its subsidiaries to, permit any
representatives designated by the Administrative Agent or any Lender to visit
and inspect the financial records and the properties of Parent, FRD, any
Borrower or any other Subsidiary at reasonable times and as often as reasonably
requested and to make extracts from and copies of such financial records, and
permit any representatives designated by the Administrative Agent or any Lender
to discuss the affairs, finances and condition of Parent, FRD, any Borrower or
any other Subsidiary with the officers thereof and independent accountants
therefor.
SECTION 5.08. USE OF PROCEEDS. Use the proceeds of the Loans and
request the issuance of Letters of Credit only for the purposes set forth in the
preamble to this Agreement.
SECTION 5.09. COMPLIANCE WITH ENVIRONMENTAL LAWS. Comply, and cause all
lessees and other persons occupying its Properties to comply, in all material
respects with all Environmental Laws and Environmental Permits applicable to its
operations and Properties; obtain and renew all material Environmental Permits
necessary for its operations and Properties; and conduct any Remedial Action in
accordance with Environmental Laws; PROVIDED, HOWEVER, that none of Parent, FRD,
the Borrowers or any of the other Subsidiaries shall be required to undertake
any Remedial Action to the extent that its obligation to do so is being
contested in good faith and by proper proceedings and appropriate reserves are
being maintained with respect to such circumstances.
SECTION 5.10. PREPARATION OF ENVIRONMENTAL REPORTS. If a Default caused
by reason of a breach of Section 3.17 or 5.09 shall have occurred and be
continuing, at the request of the Required Lenders through the Administrative
Agent, provide to the Lenders within 60 days after such request, at the expense
of the Borrowers, an environmental site assessment report for the Properties
which are the subject of such Default prepared by an environmental consulting
firm acceptable to the Administrative Agent and indicating the presence or
absence of Hazardous Materials and the estimated cost of any compliance or
Remedial Action in connection with such Properties.
SECTION 5.11. FURTHER ASSURANCES. Execute any and all further
documents, financing statements, agreements and instruments, and take all
further action (including filing Uniform Commercial Code and other financing
statements, mortgages and deeds of trust) that may be required under applicable
law, or that the Required Lenders, the Administrative Agent or the Collateral
Agent may reasonably request, in order to effectuate the transactions
contemplated by the Loan Documents and in order to grant, preserve, protect and
perfect the validity and first priority of the security interests created or
intended to be created by the Security Documents. FRD, FRI-M and the Borrowers
will cause any subsequently acquired or organized Domestic Subsidiary to execute
a Subsidiary Guarantee Agreement and an Indemnity, Subrogation and Contribution
Agreement in favor of the Administrative Agent and to execute each applicable
Security Document in favor of the Collateral Agent. In addition, from time to
time, FRD, the Borrowers and the other Subsidiaries will, at their cost and
expense, subject to any applicable covenant limitations under the Parent
Indenture or the Senior Notes Indenture (in each case, as in effect on the date
hereof), promptly secure the Obligations by pledging or creating, or causing to
be pledged or created, perfected security interests with respect to such of its
assets and properties as the Administrative Agent or the Required Lenders shall
designate (it being understood that, subject to any applicable covenant
limitations under the Parent Indenture or the Senior Notes Indenture (in each
case, as in effect on the date hereof), it is the intent of the parties that the
Obligations shall be secured by, among other things, substantially all the
assets of FRD, the Borrowers and the other Subsidiaries (including real and
other properties acquired subsequent to the Closing Date)). Such security
interests and Liens will be created under the Security Documents and other
security agreements, mortgages, deeds of trust and other instruments and
documents in form and substance satisfactory to the Collateral Agent, and the
Borrowers shall deliver or cause to be delivered to the Lenders all such
instruments and documents (including legal opinions, title insurance policies
and lien searches) as the Collateral Agent shall reasonably request to evidence
compliance with this Section. The Borrowers agree to provide such evidence as
the Collateral Agent shall reasonably request as to the perfection and priority
status of each such security interest and Lien.
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SECTION 5.12. CONCENTRATION ACCOUNTS. Maintain, and cause the Borrowers
to maintain, concentration accounts with Chase and, to that end, (a) in the case
of FRI-M, maintain the Concentration Account, (b) pay or cause to be paid, at or
prior to the end of each Business Day, to Chase for deposit in the Concentration
Account all cash of FRD, FRI-M or any Borrower (including all proceeds of
collateral in which FRD, FRI-M or any Borrower is granting a security interest
under the Security Documents) in excess of the amount determined by FRD, FRI-M
or such Borrower, in the exercise of its prudent business judgment, to be
required by FRD, FRI-M or such Borrower for the conduct of its business
operations in the ordinary course; and (c) cause each of the Subsidiaries to pay
or cause to be paid, at or prior to the end of each Business Day, to Chase for
deposit in the Concentration Account all cash of such Subsidiary (including all
proceeds of Collateral in which such Subsidiary is granting a security interest
under the Security Documents) in excess of the amount determined by such
Subsidiary, in the exercise of its prudent business judgment, to be required by
such Subsidiary for the conduct of its business operations in the ordinary
course, in each case as and to the extent required under the terms of the
Security Documents to which such Subsidiary is a party.
ARTICLE VI
NEGATIVE COVENANTS
Each of FRD, FRI-M and the Borrowers covenants and agrees with each
Lender that, so long as this Agreement shall remain in effect and until the
Commitments have been terminated and the principal of and interest on each Loan,
all Fees and all other expenses or amounts payable under any Loan Document have
been paid in full and all Letters of Credit have been canceled or have expired
and all amounts drawn thereunder have been reimbursed in full, unless the
Required Lenders shall otherwise consent in writing, neither FRD, nor FRI-M nor
the Borrowers will, nor will they cause or permit any of the other Subsidiaries
to:
SECTION 6.01. INDEBTEDNESS; CERTAIN EQUITY INTERESTS. (a) Incur,
create, assume or permit to exist any Indebtedness, except:
(i) Indebtedness existing on the date hereof and set forth
in Schedule 6.01;
(ii) Indebtedness arising hereunder or evidenced by (A) the
Loan Documents and (B) the Senior Notes Documents;
(iii) Indebtedness incurred by any Borrower or any other
Subsidiary subsequent to the Closing Date secured by purchase money
Liens (exclusive of Capex Financings) in an aggregate amount not to
exceed $1,000,000 at any one time outstanding;
(iv) subject to Section 6.10, Capex Financings;
(v) Indebtedness arising from investments among FRD, any
Borrower and any other Subsidiary that are permitted hereunder;
(vi) Indebtedness owed to the Administrative Agent or Chase or
any of their respective banking Affiliates in respect of any overdrafts
and related liabilities arising from treasury, depository and cash
management services or in connection with any automated clearing house
transfers of funds, in each case incurred in the ordinary course of
business;
(vii) in the case of any Borrower or any Subsidiary Guarantor:
(A) all interest, fees, reimbursement and
indemnification amounts, and all other accruals and
obligations under the Indebtedness described in Section
6.01(a)(i) and renewals, extensions, modifications or
refinancings of such Indebtedness, PROVIDED that such
50
renewals, extensions, modifications and refinancings (1) do
not increase the outstanding principal amount of the
Indebtedness being renewed, extended, modified or refinanced,
or shorten the maturity thereof to a date earlier than one
year after the Maturity Date, and (2) are otherwise on terms
consistent with prudent business practice and then prevailing
market practices and prices in the applicable geographic area;
(B) additional unsecured Indebtedness not otherwise
permitted by this Section 6.01(a) aggregating not more than
$2,000,000 in principal amount at any one time outstanding;
(C) obligations under performance or surety bonds
that constitute Indebtedness (if any) incurred in the ordinary
course of business, PROVIDED that the aggregate maximum amount
available to be paid or drawn under such performance or surety
bonds that are not supported by Letters of Credit shall not
exceed $2,000,000 at any time outstanding;
(D) Indebtedness incurred or assumed in any
transaction permitted under Section 6.04(j) and Section 6.10;
(viii) Indebtedness in respect of Interest Rate Protection
Agreements entered into with a counterparty that is a Lender (or an
Affiliate thereof) as of the date such Interest Rate Protection
Agreement is entered into, PROVIDED that the aggregate notional amount
thereof shall not exceed $40,000,000; and
(ix) Indebtedness in respect of (A) accrued but unpaid
Permitted Management Fees in an amount not to exceed $10,000,000 in any
fiscal year, (B) Permitted Franchise Fees and (C) obligations under the
Tax Allocation Agreement.
(b) Neither FRD nor FRI-M nor any Borrower will, nor will they
permit any other Subsidiary to, issue any preferred stock or other
preferred Equity Interests.
SECTION 6.02. LIENS. Create, incur, assume or permit to exist any Lien
on any property or assets (including stock or other securities of any person,
including any Subsidiary) now owned or hereafter acquired by it or on any income
or revenues or rights in respect of any thereof, except:
(a) Liens on property or assets of the Borrowers and the other
Subsidiaries existing on the date hereof and set forth in Schedule
6.02, PROVIDED that such Liens shall secure only those obligations
which they secure on the date hereof, and with respect to Liens
existing on the property of the Borrowers or Subsidiary Guarantors,
extensions, renewals, refinancings or replacements thereof; PROVIDED,
HOWEVER, that no such extensions, renewals refinancings or replacements
will extend to or cover any property not theretofore subject to the
Lien being extended, renewed, refinanced or replaced; and PROVIDED
FURTHER that the Borrowers and Subsidiary Guarantors may substitute for
the property subject to any such Lien other property with substantially
the same Fair Market Value and not otherwise subject to the Lien of a
Loan Document, so long as the property for which such substitution is
made is fully and effectively released from such Lien;
(b) any Lien created pursuant to any Indebtedness arising
hereunder or evidenced by the Loan Documents.
(c) any Lien existing on any property or asset prior to the
acquisition thereof by any Borrower or any other Subsidiary, PROVIDED
that (i) such Lien is not created in contemplation of or in connection
with such acquisition, (ii) such Lien does not apply to any other
property or assets of FRD, any Borrower or any other Subsidiary and
(iii) such Lien does not (A) materially interfere with the use,
occupancy and operation of any Mortgaged Property, (B) materially
reduce the fair market value of any Mortgaged Property but for such
Lien or (C) result in any material increase in the cost of operating,
occupying or owning or leasing the Mortgaged Properties;
51
(d) Permitted Liens;
(e) Liens in favor of the Administrative Agent and the
Lenders;
(f) unperfected Liens on property of the Borrowers or
Subsidiary Guarantors in favor of other Borrowers or Subsidiary
Guarantors arising in connection with intercompany transactions among
Borrowers or Subsidiary Guarantors; and
(g) Liens upon or on any other assets of the Borrowers or
Subsidiary Guarantors securing obligations in an aggregate amount not
to exceed $1,000,000 at any time outstanding.
SECTION 6.03. SALE AND LEASE-BACK TRANSACTIONS. Enter into any
arrangement, directly or indirectly, with any person whereby it shall sell or
transfer (other than pursuant to Section 6.05(c)) any property, real or
personal, used or useful in its business, whether now owned or hereafter
acquired, and thereafter rent or lease such property or other property which it
intends to use for substantially the same purpose or purposes as the property
being sold or transferred; PROVIDED, HOWEVER, that any Borrower or any other
Subsidiary may enter into such a transaction provided that the Fair Market Value
of all property sold or transferred pursuant to such transactions shall not
exceed in the aggregate $2,000,000.
SECTION 6.04. INVESTMENTS, LOANS AND ADVANCES. Purchase, hold or
acquire any capital stock, evidences of indebtedness or other securities of,
make or permit to exist any loans or advances to, or make or permit to exist any
investment or any other interest in, any other person, except:
(a) investments by FRD, the Borrowers or the other
Subsidiaries existing on the date hereof in the capital stock of their
respective subsidiaries;
(b) Permitted Investments;
(c) advances and loans made by any Subsidiary to, and
investments made by any Subsidiary in, any other Subsidiary that is a
Borrower or a Subsidiary Guarantor in the ordinary course of business;
(d) advances and loans made by FRD to, and investments made by
FRD in, any Borrower in the ordinary course of business so long as no
Default or Event of Default shall have occurred and be continuing;
(e) investments by any Borrower or any Subsidiary made
pursuant to joint venture or franchise arrangements entered into in
accordance with prudent business practice and in an aggregate amount of
not more than $2,000,000 at any one time outstanding;
(f) non-cash consideration received from any sale, lease,
transfer or other disposition of assets permitted under Section 6.05;
(g) loans or advances to employees made in the ordinary course
of business consistent with prudent business practice and in an
aggregate amount not to exceed $750,000 at any one time outstanding;
(h) loans or advances to or investments in Liquor License
Affiliates to the extent necessary to enable Liquor License Affiliates
to pay taxes, fees and other expenses as and when required to maintain
the liquor licenses held by them in an aggregate amount not to exceed
$100,000;
(i) additional investments not otherwise permitted by this
Section 6.04, in an aggregate amount not to exceed $2,000,000; and
(j) subject to Section 6.10, acquisitions of restaurant
properties and related assets by means of investments in new
operations, properties or franchises through the purchase or other
acquisition
52
of assets of any person or stock of new Domestic Subsidiaries where
FRD, any Borrower or any Subsidiary making such purchase or acquisition
determines in its prudent business judgment that such purchase or
acquisition would be beneficial in lieu of making Consolidated Capital
Expenditures.
SECTION 6.05. MERGERS, CONSOLIDATIONS, SALES OF ASSETS AND
ACQUISITIONS. Merge into or consolidate with any other person, or permit any
other person to merge into or consolidate with it, or sell, transfer, lease or
otherwise dispose of (in one transaction or in a series of transactions) all or
any substantial part of its assets (whether now owned or hereafter acquired) or
any capital stock of any Subsidiary, or purchase, lease or otherwise acquire (in
one transaction or a series of transactions) all or any substantial part of the
assets of any other person, except that:
(a) any Borrower or any other Subsidiary may purchase and sell
inventory, fixtures and equipment in the ordinary course of business;
(b) any Borrower or any other Subsidiary may sell or otherwise
dispose of obsolete or worn out property, in each case in the ordinary
course of business and consistent with past practice, PROVIDED that the
aggregate Fair Market Value of all such assets disposed of pursuant to
this clause (b) in any fiscal year shall not exceed $1,000,000;
(c) any Borrower or any other Subsidiary may exchange real
property, fixtures and improvements for other real property, fixtures
and improvements, PROVIDED that any consideration (other than real
property, fixtures and improvements) received by any Loan Party in
connection with such exchanges is received by such Loan Party in cash;
(d) any Borrower or any other Subsidiary may sell, transfer or
otherwise dispose of any of its assets to any Subsidiary Guarantor;
(e) any Borrower or any other Subsidiary may consummate the
dispositions of restaurant assets as generally contemplated by the
Confidential Information Memorandum for a consideration equal to the
Fair Market Value of the assets sold, transferred or otherwise disposed
of, PROVIDED that the aggregate Fair Market Value of all dispositions
consummated pursuant to this clause (e) shall not exceed $7,500,000;
(f) any Subsidiary Guarantor may (i) merge or consolidate with
or transfer all or substantially all of its assets to any other
Subsidiary Guarantor and (ii) acquire by merger the assets of any
person to the extent permitted by Section 6.04(j), PROVIDED that no
such merger, consolidation, transfer or acquisition involving a
Subsidiary Guarantor results in any loss of ownership by FRD of such
Subsidiary Guarantor; and
(g) FRD, any Borrower or any other Subsidiary may effect any
investment, loan or advance that it is expressly permitted to effect
under Section 6.04;
PROVIDED, HOWEVER, that any sale, transfer, exchange or other disposition of
assets permitted by clauses (b), or (c) above shall not be permitted unless such
disposition is for Fair Market Value; and PROVIDED FURTHER that any transaction
permitted by clause (c), (e) or (f) above shall not be permitted unless at the
time thereof and immediately after giving effect thereto no Event of Default or
Default shall have occurred and be continuing.
SECTION 6.06. DIVIDENDS AND DISTRIBUTIONS; RESTRICTIONS ON ABILITY OF
SUBSIDIARIES TO PAY DIVIDENDS. (a) Declare or pay, directly or indirectly, any
dividend or make any other distribution (by reduction of capital or otherwise),
whether in cash, property, securities or a combination thereof (other than, with
respect to FRD and FRI-M, a dividend payable solely in shares of a class of
stock to holders of that class of stock only), with respect to any shares of its
capital stock or directly or indirectly redeem, purchase, retire or otherwise
acquire for value (or permit any Subsidiary to purchase or acquire) any shares
of any class of its capital stock or set aside any amount for any such purpose;
PROVIDED, HOWEVER, that (i) any Subsidiary
53
may declare and pay dividends or make other distributions to FRI-M, to the
Borrowers or to the Subsidiary Guarantors and (ii) so long as no Default or
Event of Default has occurred and is continuing or would be caused thereby,
FRI-M may declare and pay dividends or make other distributions to FRD (A) at
such times and in such amounts as may be necessary to make payments of interest
due under the Senior Notes Documents or to discharge FRD's liabilities under the
Loan Documents or imposed by law, including tax liabilities, (B) in an aggregate
amount not to exceed $250,000 in any fiscal year, to the extent necessary to
permit FRD to pay general administrative costs and expenses, (C) to the extent
necessary to permit FRD to discharge its obligations to Parent under the Tax
Allocation Agreement, (D) to the extent necessary for FRD to pay Permitted
Franchise Fees and (E) in an aggregate amount not to exceed $10,000,000 in any
fiscal year, to the extent necessary for FRD to pay Permitted Management Fees,
in each case for clauses (B), (C), (D) and (E), so long as FRD is not prohibited
from making such payment under the Senior Notes Indenture as in effect on the
date hereof.
(b) Permit any Subsidiary to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any encumbrance or
restriction on the ability of any such Subsidiary to (i) pay any dividends or
make any other distributions on its capital stock or any other interest or (ii)
make or repay any loans or advances to FRD, any Borrower, any other Subsidiary
(subclauses (i) and (ii) above are collectively referred to as an "UPSTREAM
PAYMENT") except for such encumbrances or restrictions existing under or by
reason of (A) applicable law, (B) this Agreement, any other Loan Document or any
other agreement entered into hereunder or thereunder or as contemplated hereby
or thereby, (C) the Senior Notes Documents, (D) customary provisions restricting
(1) subletting or assignment of any lease governing a leasehold interest of FRD
or any of the Subsidiaries, (2) the transfer of intellectual property rights
held by FRD or any of the Subsidiaries through license agreements with the
owners of such rights and (3) the assignment of supply contracts, (E) any
instrument governing Indebtedness, which is permitted by Section 6.01(a), of a
person acquired by FRD or any of the Subsidiaries after the date hereof,
PROVIDED that (1) such instrument was in existence at the time of such
acquisition and was not created in contemplation of or in connection with such
acquisition, (2) the officers of FRD reasonably believe at the time of such
acquisition that the terms of such instrument will not encumber or restrict the
ability of such acquired person to make an Upstream Payment and (3) such
instrument contains no express encumbrances or restrictions on the ability of
such acquired person to make an Upstream Payment and (F) Indebtedness and other
contractual obligations of FRD or any of the Subsidiaries existing on the
Closing Date and set forth on Schedule 6.06 and any amendment, modification,
renewal, extension, replacement, refinancing or refunding thereof permitted
under the terms of this Agreement, PROVIDED that the encumbrances and
restrictions contained in any such amendment, modification, renewal, extension,
replacement, refinancing or refunding are in the aggregate no less favorable in
all material respects to the Lenders.
SECTION 6.07. TRANSACTIONS WITH AFFILIATES. Sell or transfer any
property or assets to, or purchase or acquire any property or assets from, or
otherwise engage in any other transactions with, any of its Affiliates, except
(a) for any reimbursement obligation of the Borrowers arising under the Parent
Guarantee Agreement and (b) that (i) FRD, any Borrower or any other Subsidiary
may engage in any of the foregoing transactions in the ordinary course of
business at prices and on terms and conditions not less favorable to FRD, such
Borrower or such other Subsidiary than could be obtained on an arm's-length
basis from unrelated third parties, (ii) so long as no Default or Event of
Default has occurred and is continuing or would be caused thereby, FRD may (A)
perform, and make payments to discharge, its obligations under the Tax
Allocation Agreement, (B) enter into and perform its obligations under Permitted
Franchise Agreements and pay Permitted Franchise Fees thereunder and (C) perform
its obligations under the Management Services Agreement and pay, in an aggregate
amount not to exceed $10,000,000 in any fiscal year, Permitted Management Fees,
in each case for clauses (A), (B) and (C), so long as FRD is not prohibited from
making such payment under the Senior Notes Indenture as in effect on the date
hereof, (iii) so long as no Default or Event of Default has occurred and is
continuing or would be caused thereby, FRI-M may make payments, and perform its
obligations, with respect to the Management Services Agreement, the Permitted
Franchise Agreements and the Tax Allocation Agreement and declare and pay
dividends or make other distributions, in each case to the extent expressly
permitted by Section 6.06(a)(ii), and (iv) so long as no Default or Event of
Default has occurred and is continuing or would be caused thereby, the other
Subsidiaries may make payments, and perform their obligations, with respect to
the Tax Allocation Agreement, so long as such payments or performance is not
prohibited under the Senior Notes Indenture as in effect on the date hereof.
54
SECTION 6.08. OTHER INDEBTEDNESS AND AGREEMENTS. (a) Make any voluntary
or optional payments, prepayments or redemptions of principal or premium with
respect to, or voluntarily repurchase, acquire or retire for value prior to the
stated maturity thereof, Indebtedness (other than Indebtedness arising under the
Loan Documents), PROVIDED that such payments shall be permitted to retire
Indebtedness to the extent required under a "due on sale" clause applicable to
any disposition of assets permitted under Section 6.05.
(b) Except for Permitted Amendments, permit any waiver, supplement,
modification, amendment, termination or release of the Senior Notes Documents or
any indenture, instrument or agreement pursuant to which any Indebtedness or
preferred stock is outstanding. Without limiting the generality of the
foregoing, FRD shall not waive, supplement, modify or amend Section 4(c) of the
Management Services Agreement without the written consent of the Required
Lenders.
(c) In the case of FRD, if, as a result of the receipt of any cash
proceeds by FRD or any Subsidiary in connection with an Asset Sale, FRD would be
required by the terms of the Senior Notes Indenture to make an offer to
repurchase Senior Notes prior to the maturity date of the Senior Notes, then FRD
shall or shall cause one or more of the Subsidiaries to invest such cash
proceeds in assets or businesses of FRD or the Subsidiaries in a manner that is
permitted by the other provisions of this Agreement and that will eliminate any
requirement under the Senior Notes Indenture to offer to repurchase Senior
Notes. Any such investment shall be made prior to the first day on which FRD
would be required to commence a tender offer to repurchase with such cash
proceeds Senior Notes under the Senior Notes Indenture.
SECTION 6.09. OPERATING LEASES. Permit the aggregate amount of payments
under Operating Leases of FRD, any Borrower or any other Subsidiary to be in
excess of the fair rental value of the properties subject to such Operating
Leases.
SECTION 6.10. CAPITAL EXPENDITURES. Incur Consolidated Capital
Expenditures (the amount of which shall be deemed to include, for purposes of
this Section 6.10, the amount of any investments made or any Indebtedness
incurred or assumed pursuant to Sections 6.04(j) and 6.01(a)(vii)(D)) in excess
of, for any fiscal year ending on or about any date set forth below, the amount
set forth below opposite such date:
Fiscal Year Ending Maximum Consolidated
on or about December 31, Capital Expenditures
------------------------ --------------------
1999 $34,000,000
2000 $54,000,000
2001 $14,000,000
2002 $20,000,000
2003 $20,000,000
PROVIDED, HOWEVER, that the amount of Consolidated Capital Expenditures in any
fiscal year permitted to be incurred pursuant to this Section 6.10 shall be
increased by an amount equal to the amount of unused Consolidated Capital
Expenditures permitted to be incurred pursuant to this Section 6.10 for the
immediately preceding fiscal year (minus the amount of permitted Consolidated
Capital Expenditures carried forward to such preceding fiscal year pursuant to
this proviso).
SECTION 6.11. CONSOLIDATED TOTAL DEBT RATIO. Permit the Consolidated
Total Debt Ratio for any period of four consecutive fiscal quarters ending on or
about any date set forth below to be greater than the ratio set forth below
opposite such date:
55
DATE RATIO
June 30, 1999 4.70 to 1.00
September 30, 1999 4.70 to 1.00
December 31, 1999 4.70 to 1.00
March 31, 2000 4.70 to 1.00
June 30, 2000 4.70 to 1.00
September 30, 2000 4.70 to 1.00
December 31, 2000 4.70 to 1.00
March 31, 2001 4.50 to 1.00
June 30, 2001 4.30 to 1.00
September 30, 2001 4.20 to 1.00
December 31, 2001 3.75 to 1.00
March 31, 2002 3.75 to 1.00
June 30, 2002 3.50 to 1.00
September 30, 2002 3.50 to 1.00
December 31, 2002 3.50 to 1.00
March 31, 2003, and thereafter 3.25 to 1.00
SECTION 6.12. CONSOLIDATED SENIOR SECURED DEBT RATIO. Permit the
Consolidated Senior Secured Debt Ratio for any period of four consecutive fiscal
quarters ending on or about any date set forth below to be greater than the
ratio set forth below opposite such date:
DATE RATIO
June 30, 1999 1.35 to 1.00
September 30, 1999 1.35 to 1.00
December 31, 1999 1.35 to 1.00
March 31, 2000 1.35 to 1.00
June 30, 2000 1.35 to 1.00
September 30, 2000 1.40 to 1.00
December 31, 2000 1.35 to 1.00
March 31, 2001 1.30 to 1.00
June 30, 2001 1.30 to 1.00
September 30, 2001 1.25 to 1.00
December 31, 2001 1.25 to 1.00
56
DATE RATIO
March 31, 2002 1.00 to 1.00
June 30, 2002 1.00 to 1.00
September 30, 2002 1.00 to 1.00
December 31, 2002 1.00 to 1.00
March 31, 2003, and thereafter 1.00 to 1.00
SECTION 6.13. CONSOLIDATED INTEREST COVERAGE RATIO. Permit the
Consolidated Interest Coverage Ratio for any period of four consecutive fiscal
quarters ending on or about any date set forth below to be less than the ratio
set forth below opposite such date:
DATE RATIO
June 30, 1999 1.70 to 1.00
September 30, 1999 1.70 to 1.00
December 31, 1999 1.70 to 1.00
March 31, 2000 1.70 to 1.00
June 30, 2000 1.70 to 1.00
September 30, 2000 1.75 to 1.00
December 31, 2000 1.75 to 1.00
March 31, 2001 1.80 to 1.00
June 30, 2001 1.90 to 1.00
September 30, 2001 1.90 to 1.00
December 31, 2001 1.90 to 1.00
March 31, 2002 2.10 to 1.00
June 30, 2002 2.10 to 1.00
September 30, 2002 2.10 to 1.00
December 31, 2002 2.10 to 1.00
March 31, 2003, and thereafter 2.10 to 1.00
SECTION 6.14. CONSOLIDATED FIXED CHARGE COVERAGE RATIO. Permit the
Consolidated Fixed Charge Coverage Ratio for any period of four consecutive
fiscal quarters ending on or about any date set forth below to be less than the
ratio set forth opposite such date:
57
DATE RATIO
June 30, 1999 1.35 to 1.00
September 30, 1999 1.35 to 1.00
December 31, 1999 1.35 to 1.00
March 31, 2000 1.35 to 1.00
June 30, 2000 1.35 to 1.00
September 30, 2000 1.35 to 1.00
December 31, 2000 1.35 to 1.00
March 31, 2001 1.35 to 1.00
June 30, 2001 1.35 to 1.00
September 30, 2001 1.45 to 1.00
December 31, 2001 1.45 to 1.00
March 31, 2002 1.50 to 1.00
June 30, 2002 1.50 to 1.00
September 30, 2002 1.50 to 1.00
December 31, 2002 1.50 to 1.00
March 31, 2003, and thereafter 1.50 to 1.00
SECTION 6.15. BUSINESS OF FRD, THE BORROWERS AND THE SUBSIDIARIES. (a)
In the case of FRD and FRI-M, conduct any business or enter into any transaction
inconsistent with its status as a holding company, or, in the case of FRD,
permit FRI-M to conduct any business or enter into any transaction inconsistent
with such status, or (b) engage at any time in any business or business activity
other than the conduct of restaurant operations and other business currently
conducted by it and business activities reasonably incidental thereto. Without
limiting the generality of the foregoing, (a) FRD shall not (i) hold any assets
(other than shares of capital stock of FRI-M, cash and Permitted Investments,
PROVIDED that the amount of such cash, together with the Fair Market Value of
such Permitted Investments, shall not at any time exceed $500,000 other than on
any day on which a payment is due in respect of the Senior Notes or in respect
of obligations contemplated by Section 6.07(b)(ii), in which event FRD may
during such day hold additional cash in the Concentration Account in an amount
up to the aggregate amount of such payment obligations) or (ii) incur any
liabilities (other than (A) liabilities under the Loan Documents and the Senior
Notes Documents, (B) liabilities imposed by law, including tax liabilities, and
(C) other liabilities incidental to its existence and permitted business and
activities) and (b) FRI-M shall not (i) own or acquire any assets (other than
shares of capital stock of other Subsidiaries, cash and Permitted Investments)
or (ii) incur any liabilities (other than (A) liabilities under the Loan
Documents, (B) liabilities imposed by law, including tax liabilities, and (C)
other liabilities incidental to its existence and permitted business
activities).
SECTION 6.16. FISCAL YEAR. Change the end of its fiscal year from the
last Wednesday before December 31 in each year to any other date.
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ARTICLE VII
EVENTS OF DEFAULT
In case of the happening of any of the following events ("EVENTS OF
DEFAULT"):
(a) any material representation or warranty made or deemed
made in connection with any Loan Document or the borrowings or
issuances of Letters of Credit hereunder, or any material
representation, warranty, statement or information contained in any
report, certificate, financial statement or other instrument furnished
in connection with or pursuant to any Loan Document, shall prove to
have been false or misleading in any material respect when so made,
deemed made or furnished;
(b) default shall be made in the payment of any principal of
any Loan or the reimbursement with respect to any L/C Disbursement when
and as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or by acceleration
thereof or otherwise;
(c) default shall be made in the payment of any interest on
any Loan or any Fee or L/C Disbursement or any other amount (other than
an amount referred to in (b) above) due under any Loan Document, when
and as the same shall become due and payable, and such default shall
continue unremedied for a period of three Business Days;
(d) default shall be made in the due observance or performance
by FRD, any Borrower or any other Subsidiary of any covenant, condition
or agreement contained in Section 5.01(a), 5.05 or 5.08 or in Article
VI;
(e) default shall be made in the due observance or performance
by FRD, any Borrower or any other Subsidiary of any covenant, condition
or agreement contained in any Loan Document (other than those specified
in (b), (c) or (d) above) and such default shall continue unremedied
for a period of more than 10 days;
(f) Parent or any of its subsidiaries, including FRD, any
Borrower or any other Subsidiary, shall (i) fail to pay any principal
or interest, regardless of amount, due in respect of any Indebtedness
in a principal amount in excess of (A) $10,000,000 in the case of
Parent or any of its subsidiaries, other than FRD, the Borrowers or the
other Subsidiaries, and (B) $2,000,000 in the case of FRD, any Borrower
or any other Subsidiary, in each case, when and as the same shall
become due and payable, (ii) fail to observe or perform any other term,
covenant, condition or agreement contained in any agreement or
instrument evidencing or governing any such Indebtedness if the effect
of any failure referred to in this clause (ii) is to cause, or to
permit the holder or holders of such Indebtedness or a trustee on its
or their behalf (with or without the giving of notice, the lapse of
time or both) to cause, such Indebtedness to become due prior to its
stated maturity or (iii) at any time that the Parent Credit Agreement
shall have expired or otherwise been terminated (without being
refinanced or replaced by a new Parent Credit Agreement), fail to
observe or perform any affirmative or negative covenant or other
agreement set forth therein (as in effect on the date of such
termination or expiration and without giving effect to such termination
or expiration) if the effect of any failure referred to in this clause
(iii) (assuming that the Parent Credit Agreement had not expired or
been terminated) would have been to cause, or to permit the lenders
under the Parent Credit Agreement or the administrative agent
thereunder on their behalf (with or without the giving of notice
but subject to the lapse of any time period specified in the Parent
Credit Agreement) to cause, any Indebtedness under the Parent Credit
Agreement to become due prior to its stated maturity;
(g) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent
jurisdiction seeking (i) relief in respect of Parent or any of its
subsidiaries, including FRD, any Borrower and any other Subsidiary,
or of a substantial part of the property or assets of Parent or any of
its subsidiaries, including FRD, any Borrower and any other Subsidiary,
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under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other Federal, state or foreign bankruptcy,
insolvency, receivership or similar law, (ii) the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar
official for Parent or any of its subsidiaries, including FRD, any
Borrower and any other Subsidiary, or for a substantial part of the
property or assets of Parent or any of its subsidiaries, including FRD,
any Borrower and any other Subsidiary, or (iii) the winding-up or
liquidation of Parent or any of its subsidiaries, including FRD, any
Borrower and any other Subsidiary, and such proceeding or petition
shall continue undismissed for 30 days or an order or decree approving
or ordering any of the foregoing shall be entered;
(h) Parent or any of its subsidiaries, including FRD, any
Borrower and any other Subsidiary, shall (i) voluntarily commence any
proceeding or file any petition seeking relief under Title 11 of the
United States Code, as now constituted or hereafter amended, or any
other Federal, state or foreign bankruptcy, insolvency, receivership or
similar law, (ii) consent to the institution of, or fail to contest in
a timely and appropriate manner, any proceeding or the filing of any
petition described in (g) above, (iii) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for Parent or any of its subsidiaries,
including FRD, any Borrower and any other Subsidiary, or for a
substantial part of the property or assets of Parent or any of its
subsidiaries, including FRD, any Borrower and any other Subsidiary,
(iv) file an answer admitting the material allegations of a petition
filed against it in any such proceeding, (v) make a general assignment
for the benefit of creditors, (vi) become unable, admit in writing its
inability or fail generally to pay its debts as they become due or
(vii) take any action for the purpose of effecting any of the
foregoing;
(i) one or more judgments for the payment of money in an
aggregate amount in excess of (A) $5,000,000 shall be rendered against
Parent or any of its subsidiaries (other than FRD, any Borrower and any
other Subsidiary) or any combination thereof or (B) $2,000,000 in the
case of FRD, any Borrower or any other Subsidiary, or any combination
thereof and, in each case, the same shall remain undischarged for a
period of 30 consecutive days during which execution shall not be
effectively stayed, or any action shall be legally taken by a judgment
creditor to levy upon assets or properties of Parent or any of its
subsidiaries, including FRD, any Borrower and any other Subsidiary, to
enforce any such judgment;
(j) any non-monetary judgment or order shall be rendered
against Parent or any of its subsidiaries, including FRD, any Borrower
and any other Subsidiary, that is reasonably likely to have a Material
Adverse Effect and either (x) enforcement proceedings shall have been
commenced by any person upon such judgment or order and a stay of such
enforcement proceedings shall not be in effect or (y) there shall be
any period of 20 consecutive days during which a stay of enforcement of
such judgment or order, by reason of a pending appeal or otherwise,
shall not be in effect;
(k) (i) an ERISA Event with respect to any Plan maintained, or
contributed to, exclusively by one or more of FRD, any Borrower or any
other Subsidiary, shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other such ERISA Events,
could reasonably be expected to result in liability of FRD, any
Borrower and the other Subsidiaries in an aggregate amount exceeding
$2,000,000 or (ii) any other ERISA Event shall have occurred that, in
the opinion of the Required Lenders, when taken together with all other
ERISA Events (including ERISA Events with respect to any Plan
maintained, or contributed to, exclusively by one or more of FRD, any
Borrower or any other Subsidiary), could reasonably be expected to
result in liability of Parent and the ERISA Affiliates (including FRD,
each Borrower and each other Subsidiary) in an aggregate amount
exceeding $5,000,000;
(l) any security interest purported to be created by any
Security Document shall cease to be, or shall be asserted by any Loan
Party not to be, a valid, perfected, first priority (except as
otherwise expressly provided in this Agreement or such Security
Document) security interest in the securities, assets or properties
covered thereby, except to the extent that any such loss of perfection
or priority results from the failure of the Collateral Agent to
maintain possession of certificates representing
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securities pledged under the Pledge Agreement or any other action or
inaction of the Collateral Agent with respect to any of its obligations
or duties under this Agreement or any other Loan Document and except to
the extent that such loss is covered by a lender's title insurance
policy and the related insurer promptly after such loss shall have
acknowledged in writing that such loss is covered by such title
insurance policy;
(m) there shall have occurred a Change in Control; or
(n) Parent shall merge into or consolidate with any other
person, or permit any other person to merge into or consolidate with
it, or consummate any recapitalization or other fundamental transaction
or sell, transfer, lease or otherwise dispose of (directly or
indirectly and in one transaction or in a series of transactions) all
or any substantial part of its assets (on a consolidated basis and
whether now owned or hereafter acquired) or any capital stock of any of
its subsidiaries, or purchase, lease or otherwise acquire (directly or
indirectly and in one transaction or a series of transactions) all or
any substantial part of the capital stock or assets of any other person
in each case to the extent that any such transaction, either
individually or in the aggregate, could reasonably be expected to
result in a material deterioration in the financial condition of Parent
and its subsidiaries, taken as a whole;
then, and in every such event (other than an event with respect to Parent, FRD
or any Borrower described in paragraph (g) or (h) above), and at any time
thereafter during the continuance of such event, the Administrative Agent may,
and at the request of the Required Lenders shall, by notice to the Borrowers,
take either or both of the following actions, at the same or different times:
(i) terminate forthwith the Commitments and (ii) declare the Loans then
outstanding to be forthwith due and payable in whole or in part, whereupon the
principal of the Loans so declared to be due and payable, together with accrued
interest thereon and any unpaid accrued Fees and all other liabilities of FRD or
any Borrower accrued hereunder and under any other Loan Document, shall become
forthwith due and payable, without presentment, demand, protest or any other
notice of any kind, all of which are hereby expressly waived by FRD and the
Borrowers, anything contained herein or in any other Loan Document to the
contrary notwithstanding; and in the case of any event with respect to Parent,
FRD or any Borrower described in paragraph (g) or (h) above, the Commitments
shall automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and any unpaid accrued Fees and all other
liabilities of FRD or any Borrower accrued hereunder and under any other Loan
Document, shall automatically become due and payable, without presentment,
demand, protest or any other notice of any kind, all of which are hereby
expressly waived by FRD and the Borrowers, anything contained herein or in any
other Loan Document to the contrary notwithstanding.
ARTICLE VIII
THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT
In order to expedite the transactions contemplated by this Agreement,
Credit Lyonnais New York Branch is hereby appointed to act as Administrative
Agent and Collateral Agent on behalf of the Lenders and each Issuing Bank (for
purposes of this Article VIII, the Administrative Agent and the Collateral Agent
are referred to collectively as the "AGENTS"). Each of the Lenders and each
assignee of any such Lender, hereby irrevocably authorizes the Agents to take
such actions on behalf of such Lender or assignee or the applicable Issuing Bank
and to exercise such powers as are specifically delegated to the Agents by the
terms and provisions hereof and of the other Loan Documents, together with such
actions and powers as are reasonably incidental thereto. The Administrative
Agent is hereby expressly authorized by the Lenders and each Issuing Bank,
without hereby limiting any implied authority, (a) to receive on behalf of the
Lenders and the applicable Issuing Bank all payments of principal of and
interest on the Loans, all payments in respect of L/C Disbursements and all
other amounts due to the Lenders hereunder, and promptly to distribute to each
Lender or the applicable Issuing Bank its proper share of each payment so
received; (b) to give notice on behalf of each of the Lenders to the Borrowers
of any Event of Default specified in this Agreement of which the Administrative
Agent has actual knowledge acquired in connection with its agency hereunder; and
(c) to
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distribute to each Lender copies of all notices, financial statements and
other materials delivered by FRD or the Borrowers or any other Loan Party
pursuant to this Agreement or the other Loan Documents as received by the
Administrative Agent. Without limiting the generality of the foregoing, the
Agents are hereby expressly authorized to execute any and all documents
(including releases) with respect to the Collateral and the rights of the
Secured Parties with respect thereto, as contemplated by and in accordance with
the provisions of this Agreement and the Security Documents.
Neither the Agents nor any of their respective directors, officers,
employees or agents shall be liable as such for any action taken or omitted by
any of them except for its or his own gross negligence or wilful misconduct, or
be responsible for any statement, warranty or representation herein or the
contents of any document delivered in connection herewith, or be required to
ascertain or to make any inquiry concerning the performance or observance by FRD
or the Borrowers or any other Loan Party of any of the terms, conditions,
covenants or agreements contained in any Loan Document. The Agents shall not be
responsible to the Lenders for the due execution, genuineness, validity,
enforceability or effectiveness of this Agreement or any other Loan Documents,
instruments or agreements. The Agents shall in all cases be fully protected in
acting, or refraining from acting, in accordance with written instructions
signed by the Required Lenders and, except as otherwise specifically provided
herein, such instructions and any action or inaction pursuant thereto shall be
binding on all the Lenders. Each Agent shall, in the absence of knowledge to the
contrary, be entitled to rely on any instrument or document believed by it in
good faith to be genuine and correct and to have been signed or sent by the
proper person or persons. Neither the Agents nor any of their respective
directors, officers, employees or agents shall have any responsibility to the
Borrowers or any other Loan Party on account of the failure of or delay in
performance or breach by any Lender or any Issuing Bank of any of its
obligations hereunder or to any Lender or any Issuing Bank on account of the
failure of or delay in performance or breach by any other Lender or any Issuing
Bank or the Borrowers or any other Loan Party of any of their respective
obligations hereunder or under any other Loan Document or in connection herewith
or therewith. Each of the Agents may execute any and all duties hereunder by or
through agents or employees and shall be entitled to rely upon the advice of
legal counsel selected by it with respect to all matters arising hereunder and
shall not be liable for any action taken or suffered in good faith by it in
accordance with the advice of such counsel.
The Lenders hereby acknowledge that neither Agent shall be under any
duty to take any discretionary action permitted to be taken by it pursuant to
the provisions of this Agreement unless it shall be requested in writing to do
so by the Required Lenders.
Subject to the appointment and acceptance of a successor Agent as
provided below, either Agent may resign at any time by notifying the Lenders and
the Borrowers. Upon any such resignation, the Required Lenders shall have the
right to appoint a successor. If no successor shall have been so appointed by
the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Agent gives notice of its resignation, then the retiring
Agent may, on behalf of the Lenders, appoint a successor Agent which shall be a
bank with an office in New York, New York, having a combined capital and surplus
of at least $500,000,000 or an Affiliate of any such bank. Upon the acceptance
of any appointment as Agent hereunder by a successor bank, such successor shall
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Agent and the retiring Agent shall be discharged from its duties
and obligations hereunder. After the Agent's resignation hereunder, the
provisions of this Article and Section 9.05 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Agent.
With respect to the Loans made by it hereunder, each Agent in its
individual capacity and not as Agent shall have the same rights and powers as
any other Lender and may exercise the same as though it were not an Agent, and
the Agents and their Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with Parent or its subsidiaries,
including FRD, any Borrower and any other Subsidiary, or other Affiliate thereof
as if it were not an Agent.
Each Lender agrees (a) to reimburse the Agents, on demand, in the
amount of its pro rata share (based on its Commitments hereunder or, if such
Commitments have expired or been terminated in whole or in part, in accordance
with the sum of the respective principal amounts of their outstanding Loans and
62
their respective unused Commitments that have not expired or been terminated) of
any expenses incurred for the benefit of the Lenders by the Agents, including
counsel fees and compensation of agents and employees paid for services rendered
on behalf of the Lenders, that shall not have been reimbursed by the Borrowers
or any other Loan Party and (b) to indemnify and hold harmless each Agent and
any of its directors, officers, employees or agents, on demand, in the amount of
such pro rata share, from and against any and all liabilities, taxes,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever that may be imposed
on, incurred by or asserted against it in its capacity as Agent or any of them
in any way relating to or arising out of this Agreement or any other Loan
Document or any action taken or omitted by it or any of them under this
Agreement or any other Loan Document, to the extent the same shall not have been
reimbursed by the Borrowers or any other Loan Party, PROVIDED that no Lender
shall be liable to an Agent or any such other indemnified person for any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence or wilful misconduct of such Agent or any of its directors,
officers, employees or agents. Each Lender agrees to reimburse each Issuing Bank
and its directors, employees and agents, in each case, to the same extent and
subject to the same limitations as provided above for the Agents.
Each Lender acknowledges that it has, independently and without
reliance upon the Agents or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Agents or any other Lender and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement or any other Loan Document, any related
agreement or any document furnished hereunder or thereunder.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. NOTICES. Notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail or sent by telecopy, as follows:
(a) if to any Borrower or FRD, to it at 000 Xxxx Xxxx Xxxxxx,
Xxxxxxxxxxx XX 00000, Attention of Treasurer (Telecopy No. (864)
597-8216);
(b) if to the Administrative Agent or CL or any of its
Affiliates as the Issuing Bank, to Credit Lyonnais New York Branch,
1301 Avenue of the Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention of Xxxxxxx Xxxxx (Telecopy No. (000) 000-0000)
(c) if to Chase or any of its Affiliates as the Issuing Bank,
to The Chase Manhattan Bank, Loan and Agency Services Group, One Chase
Xxxxxxxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention of
Xxxxxxxxxx Xxxxxx (Telecopy No. (000) 000-0000), with a copy to The
Chase Manhattan Bank, at 000 Xxxx Xxxxxx, Xxx Xxxx 00000, Attention of
Xxxxxxxx Xxxxxxx (Telecopy No. (000) 000-0000); and
(d) if to a Lender, to it at its address (or telecopy number)
set forth on Schedule 2.01(a) or 2.01(b) or in the Assignment and
Acceptance pursuant to which such Lender shall have become a party
hereto.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by
telecopy or on the date five Business Days after dispatch by certified or
registered mail if mailed, in each case delivered, sent or mailed (properly
addressed) to such party as provided in this
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Section 9.01 or in accordance with the latest unrevoked direction from such
party given in accordance with this Section 9.01.
SECTION 9.02. SURVIVAL OF AGREEMENT. All covenants, agreements,
representations and warranties made by FRD, FRI-M or the Borrowers herein and in
the certificates or other instruments prepared or delivered in connection with
or pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Lenders and each Issuing Bank and shall survive the
making by the Lenders of the Loans and the issuance of Letters of Credit by any
Issuing Bank, regardless of any investigation made by the Lenders or any Issuing
Bank or on their or its behalf, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or any Fee or any
other amount payable under this Agreement or any other Loan Document is
outstanding and unpaid or any Letter of Credit is outstanding and so long as the
Commitments have not been terminated. The provisions of Sections 2.13, 2.15,
2.19 and 9.05 shall remain operative and in full force and effect regardless of
the expiration of the term of this Agreement, the consummation of the
transactions contemplated hereby, the repayment of any of the Loans, the
expiration of the Commitments, the expiration of any Letter of Credit, the
invalidity or unenforceability of any term or provision of this Agreement or any
other Loan Document, or any investigation made by or on behalf of the
Administrative Agent, the Collateral Agent, the Documentation Agent, the
Syndication Agent, any Lender or any Issuing Bank.
SECTION 9.03. BINDING EFFECT. This Agreement shall become effective
when it shall have been executed by the Borrowers, FRD, the Administrative Agent
and the Documentation Agent and when the Administrative Agent shall have
received counterparts hereof which, when taken together, bear the signatures of
each of the other parties hereto, and thereafter shall be binding upon and inure
to the benefit of the parties hereto and their respective permitted successors
and assigns.
SECTION 9.04. SUCCESSORS AND ASSIGNS. (a) Whenever in this Agreement
any of the parties hereto is referred to, such reference shall be deemed to
include the permitted successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of the Borrowers, FRD, the
Administrative Agent, the Issuing Banks, or the Lenders that are contained in
this Agreement shall bind and inure to the benefit of their respective
successors and assigns.
(b) Each Lender may assign to one or more Lenders or any of their
respective Affiliates or any Eligible Assignee all or a portion of its
interests, rights and obligations under this Agreement (including all or a
portion of its Commitments and the Loans at the time owing to it); PROVIDED,
HOWEVER, that (i) except in the case of an assignment to a Lender, an Affiliate
of such Lender or an Approved Fund, (x) the Administrative Agent (and, in the
case of any assignment of a Revolving Commitment, the Issuing Bank and the
Swingline Lender) must give their prior written consent to such assignment
(which consent shall not be unreasonably withheld) and (y) the amount of the
Commitment or Loan of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Administrative Agent) shall not be less than
$5,000,000 (provided that all Loans and Commitments assigned by any Lender
pursuant to a single assignment shall be aggregated for purposes of calculating
such amount), or, if less, the entire remaining amount of such Lender's
Commitment or Loan, (ii) the parties to each such assignment shall execute and
deliver to the Administrative Agent an Assignment and Acceptance, together with
a processing and recordation fee of $5,000 and (iii) the assignee, if it shall
not be a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire. Upon acceptance and recording pursuant to paragraph (e) of this
Section 9.04, from and after the effective date specified in each Assignment and
Acceptance, which effective date shall be at least five Business Days after the
execution thereof, (A) the assignee thereunder shall be a party hereto and, to
the extent of the interest assigned by such Assignment and Acceptance, have the
rights and obligations of a Lender under this Agreement and (B) the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations under this Agreement,
such Lender shall cease to be a party hereto but shall continue to be entitled
to the benefits of Sections 2.13, 2.15, 2.19 and 9.05, as well as to any Fees
accrued for its account and not yet paid).
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(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Lender warrants that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim and that
its Commitments, and the outstanding balance of its Loans, in each case without
giving effect to assignments thereof which have not become effective, are as set
forth in such Assignment and Acceptance; (ii) except as set forth in (i) above,
such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement, or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement,
any other Loan Document or any other instrument or document furnished pursuant
hereto, or the financial condition of Parent and its subsidiaries, including
FRD, any Borrower or any other Subsidiary, or the performance or observance by
FRD, FRI-M or any Borrower of any of its obligations under this Agreement, or
the performance or observance by Parent, FRD, any Borrower or any other
Subsidiary of any of its obligations under any other Loan Document to which it
is a party or any other instrument or document furnished pursuant hereto; (iii)
such assignee represents and warrants that it is legally authorized to enter
into such Assignment and Acceptance; (iv) such assignee confirms that it has
received a copy of this Agreement, together with copies of the most recent
financial statements referred to in Section 3.05 or delivered pursuant to
Section 5.04 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (v) such assignee will independently and without
reliance upon the Administrative Agent, the Collateral Agent, such assigning
Lender or any other Lender 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 this Agreement; (vi) such assignee appoints
and authorizes the Administrative Agent and the Collateral Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
as are delegated to the Administrative Agent and the Collateral Agent,
respectively, by the terms hereof, together with such powers as are reasonably
incidental thereto; and (vii) such assignee agrees that it will perform in
accordance with their terms all the obligations which by the terms of this
Agreement are required to be performed by it as a Lender.
(d) The Administrative Agent, acting for this purpose as an agent of
the Borrowers, shall maintain at one of its offices in The City of New York a
copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amount of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the "REGISTER"). The entries in the Register shall be
conclusive and FRD, any Borrower, the Administrative Agent, the Issuing Banks,
the Collateral Agent and the Lenders may treat each person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by FRD, any Borrower, the Issuing
Banks, the Collateral Agent and any Lender, at any reasonable time and from time
to time upon reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, an Administrative Questionnaire
completed in respect of the assignee (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph
(b) above and, if required, the written consent of the applicable Issuing Bank,
the Swingline Lender and the Administrative Agent to such assignment, the
Administrative Agent shall (i) accept such Assignment and Acceptance, (ii)
record the information contained therein in the Register and (iii) give prompt
notice thereof to the Lenders, the Swingline Lender, the Issuing Banks and FRD.
No assignment shall be effective unless it has been recorded in the Register as
provided in this paragraph (e).
(f) Each Lender may without the consent of the Borrowers, the Issuing
Banks, the Swingline Lender 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 Commitments
and the Loans owing to it); PROVIDED, HOWEVER, that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such Lender 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 Sections
2.13, 2.15 and 2.19 to the same extent as if they were Lenders
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and (iv) FRD, the Borrowers, the Administrative Agent, the Issuing Banks and the
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement, and
such Lender shall retain the sole right to enforce the obligations of FRD and
the Borrowers relating to the Loans or L/C Disbursements and to approve any
amendment, modification or waiver of any provision of this Agreement (other than
amendments, modifications or waivers decreasing any fees payable hereunder or
the amount of principal of or the rate at which interest is payable on the
Loans, extending any scheduled principal payment date or date fixed for the
payment of interest on the Loans, increasing or extending the Commitments or
releasing Parent from the Parent Guarantee Agreement or all or substantially all
of the Collateral (other than in connection with the sale of Collateral
permitted under this Agreement)).
(g) Any Lender or participant may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
9.04, disclose to the assignee or participant or proposed assignee or
participant any information relating to the Borrowers furnished to such Lender
by or on behalf of FRD or the Borrowers; PROVIDED that, prior to any such
disclosure of information designated by FRD or the Borrowers as confidential,
each such assignee or participant or proposed assignee or participant shall
execute an agreement whereby such assignee or participant shall agree (subject
to customary exceptions) to preserve the confidentiality of such confidential
information.
(h) Any Lender may at any time assign all or any portion of its rights
under this Agreement to a Federal Reserve Bank to secure extensions of credit by
such Federal Reserve Bank to such Lender; PROVIDED that no such assignment shall
release a Lender from any of its obligations hereunder or substitute any such
Federal Reserve Bank for such Lender as a party hereto. In order to facilitate
such an assignment to a Federal Reserve Bank, each Borrower shall, at the
request of the assigning Lender, duly execute and deliver to the assigning
Lender a promissory note or notes evidencing the Loans made to such Borrower by
the assigning Lender hereunder.
(i) Neither FRD, nor FRI-M nor any Borrower shall assign or delegate
any of its rights or duties hereunder without the prior written consent of the
Administrative Agent, the Issuing Banks and each Lender, and any attempted
assignment without such consent shall be null and void.
(j) In the event that Standard & Poor's Ratings Group, Xxxxx'x
Investors Service, Inc., and Xxxxxxxx'x BankWatch (or Insurance Watch Ratings
Service, in the case of Lenders that are insurance companies (or Best's
Insurance Reports, if such insurance company is not rated by Insurance Watch
Ratings Service)) shall, after the date that any Lender becomes a Lender,
downgrade the long-term credit ratings of such Lender, and the resulting ratings
shall be below BBB-, Baa3 and C (or BB, in the case of a Lender that is an
insurance company (or B, in the case of an insurance company not rated by
Insurance Watch Ratings Service)), then the applicable Issuing Bank shall have
the right, but not the obligation, at its own expense, upon notice to such
Lender and the Administrative Agent, to replace (or to request the Borrowers to
use their reasonable efforts to replace) such Lender with an assignee (in
accordance with and subject to the restrictions contained in paragraph (b)
above), and such Lender hereby agrees to transfer and assign without recourse
(in accordance with and subject to the restrictions contained in paragraph (b)
above) all its interests, rights and obligations in respect of its Commitments
and any outstanding Loans to such assignee; PROVIDED, HOWEVER, that (i) no such
assignment shall conflict with any law, rule and regulation or order of any
Governmental Authority and (ii) the applicable Issuing Bank or such assignee, as
the case may be, shall pay to such Lender in immediately available funds on the
date of such assignment the principal of and interest accrued to the date of
payment on the Loans made by such Lender hereunder and all other amounts accrued
for such Lender's account or owed to it hereunder.
SECTION 9.05. EXPENSES; INDEMNITY. (a) The Borrowers, FRD and FRI-M
agree, jointly and severally, to pay all reasonable out-of-pocket expenses
incurred by the Administrative Agent, the Collateral Agent, the Documentation
Agent, the Syndication Agent, the Issuing Banks and the Swingline Lender in
connection with the syndication of the credit facilities provided for herein and
the preparation and administration of this Agreement and the other Loan
Documents or in connection with any amendments, modifications or waivers of the
provisions hereof or thereof (whether or not the transactions hereby or thereby
contemplated shall be consummated) or incurred by the Administrative Agent, the
Collateral Agent
66
or any Lender in connection with the enforcement or protection of its rights in
connection with this Agreement and the other Loan Documents or in connection
with the Loans made or Letters of Credit issued hereunder, including the
reasonable fees, charges and disbursements of Cravath, Swaine & Xxxxx, counsel
for the Documentation Agent and the Syndication Agent, the reasonable fees,
charges and disbursements of any counsel for the Administrative Agent and the
Collateral Agent and, in connection with any such enforcement or protection, the
reasonable, fees, charges and disbursements of any counsel for any Lender.
(b) The Borrowers, FRD and FRI-M agree, jointly and severally, to
indemnify the Administrative Agent, the Collateral Agent, the Documentation
Agent, the Syndication Agent, each Lender, each Issuing Bank, each Affiliate of
any of the foregoing persons and each of their respective directors, officers,
employees and agents (each such person being called an "INDEMNITEE") against,
and to hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including reasonable counsel fees, charges and
disbursements, incurred by or asserted against any Indemnitee arising out of, in
any way connected with, or as a result of (i) the execution or delivery of this
Agreement or any other Loan Document or any agreement or instrument contemplated
thereby, the performance by the parties thereto of their respective obligations
thereunder or the consummation of the Transactions and the other transactions
contemplated thereby, (ii) the use of the proceeds of the Loans or issuance of
Letters of Credit, (iii) any claim, litigation, investigation or proceeding
relating to any of the foregoing, whether or not any Indemnitee is a party
thereto, or (iv) any actual or alleged presence or Release of Hazardous
Materials on any property owned or operated by FRD, any Borrower or any of the
Subsidiaries, or any Environmental Claim related in any way to FRD, the
Borrowers or the Subsidiaries; PROVIDED that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or wilful misconduct of such Indemnitee.
(c) The provisions of this Section 9.05 shall remain operative and in
full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the expiration of the Commitments, the expiration
of any Letter of Credit, the invalidity or unenforceability of any term or
provision of this Agreement or any other Loan Document, or any investigation
made by or on behalf of the Administrative Agent, the Collateral Agent, the
Documentation Agent, the Syndication Agent, any Lender or Issuing Bank. All
amounts due under this Section 9.05 shall be payable on written demand therefor.
SECTION 9.06. RIGHT OF SETOFF. If an Event of Default shall have
occurred and be continuing, each Lender is hereby authorized at any time and
from time to time, except to the extent prohibited by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender to or
for the credit or the account of any Borrower or FRD against any of and all the
obligations of any Borrower or FRD now or hereafter existing under this
Agreement and other Loan Documents held by such Lender, irrespective of whether
or not such Lender shall have made any demand under this Agreement or such other
Loan Document and although such obligations may be unmatured. The rights of each
Lender under this Section 9.06 are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.
SECTION 9.07. APPLICABLE LAW. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS (OTHER THAN LETTERS OF CREDIT AND AS EXPRESSLY SET FORTH IN OTHER LOAN
DOCUMENTS) SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK. EACH LETTER OF CREDIT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES DESIGNATED IN SUCH LETTER OF
CREDIT, OR IF NO SUCH LAWS OR RULES ARE DESIGNATED, THE UNIFORM CUSTOMS AND
PRACTICE FOR DOCUMENTARY CREDITS (1993 REVISION), INTERNATIONAL CHAMBER OF
COMMERCE, PUBLICATION NO. 500 (THE "UNIFORM CUSTOMS") AND, AS TO MATTERS NOT
GOVERNED BY THE UNIFORM CUSTOMS, THE LAWS OF THE STATE OF NEW YORK.
67
SECTION 9.08. WAIVERS; AMENDMENT. (a) No failure or delay of the
Administrative Agent, the Collateral Agent, the Documentation Agent, the
Syndication Agent, any Lender or any Issuing Bank in exercising any power or
right hereunder or under any other Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent, the
Collateral Agent, the Documentation Agent, the Syndication Agent, the Issuing
Banks and the Lenders hereunder and under the other Loan Documents are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of this Agreement or any other Loan
Document or consent to any departure by FRD, any Borrower or any other Loan
Party therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) below, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
notice or demand on any Borrower or FRD in any case shall entitle any Borrower
or FRD to any other or further notice or demand in similar or other
circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Borrowers, FRD and the Required Lenders; PROVIDED, HOWEVER,
that no such agreement shall (i) decrease the principal amount of, or extend the
maturity of or any scheduled principal payment date or date for the payment of
any interest on any Loan or any date for reimbursement of an L/C Disbursement,
or waive or excuse any such payment or any part thereof, or decrease the rate of
interest on any Loan or L/C Disbursement or decrease any Fee payable hereunder
or waive, excuse or extend the date for the payment thereof, without the prior
written consent of each Lender affected thereby, (ii) change or extend the
Commitment, or decrease or extend the date for payment of the Commitment Fees,
of any Lender without the prior written consent of such Lender, (iii) change the
allocation between the Term Borrowings and Revolving Borrowings required by
Sections 2.12(c), (d) and (e) without the written consent of Lenders having Term
Loans representing at least 75% of the total Term Loans outstanding or (iv)
amend or modify the provisions of Section 2.16 or 9.04(i), the provisions of
this Section or the definition of the term "REQUIRED LENDERS" or release Parent
from the Parent Guarantee Agreement or all or substantially all of the
Collateral (other than in connection with any sale of Collateral permitted under
this Agreement), without the prior written consent of each Lender; PROVIDED
FURTHER that no such agreement shall amend, modify or otherwise affect the
rights or duties of the Administrative Agent, the Collateral Agent, the
Documentation Agent, the Syndication Agent, the Issuing Banks or the Swingline
Lender hereunder or under any other Loan Document without the prior written
consent of the Administrative Agent, the Collateral Agent, the Documentation
Agent, the Syndication Agent, the Issuing Banks or the Swingline Lender,
respectively.
SECTION 9.09. INTEREST RATE LIMITATION. Notwithstanding anything herein
to the contrary, if at any time the interest rate applicable to any Loan or
participation in any L/C Disbursement, together with all fees, charges and other
amounts which are treated as interest on such Loan or participation in such L/C
Disbursement under applicable law (collectively the "CHARGES"), shall exceed the
maximum lawful rate (the "MAXIMUM RATE") which may be contracted for, charged,
taken, received or reserved by the Lender holding such Loan or participation in
accordance with applicable law, the rate of interest payable in respect of such
Loan or participation hereunder, together with all Charges payable in respect
thereof, shall be limited to the Maximum Rate and, to the extent lawful, the
interest and Charges that would have been payable in respect of such Loan or
participation but were not payable as a result of the operation of this Section
9.09 shall be cumulated and the interest and Charges payable to such Lender in
respect of other Loans or participations or periods shall be increased (but not
above the Maximum Rate therefor) until such cumulated amount, together with
interest thereon at the Federal Funds Effective Rate to the date of repayment,
shall have been received by such Lender.
SECTION 9.10. ENTIRE AGREEMENT. This Agreement, the Fee Letter and the
other Loan Documents constitute the entire contract between the parties relative
to the subject matter hereof. Any other previous agreement among the parties
with respect to the subject matter hereof is superseded by this Agreement and
the other Loan Documents except to the extent expressly provided therein.
Nothing in this Agreement, the Fee Letter or the other Loan Documents, expressed
or implied, is intended to confer upon any party other
68
than the parties hereto and thereto any rights, remedies, obligations or
liabilities under or by reason of this Agreement, the Fee Letter or the other
Loan Documents.
SECTION 9.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS.
EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.11.
SECTION 9.12. SEVERABILITY. In the event any one or more of the
provisions contained in this Agreement or in any other Loan Document should be
held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired thereby (it being understood that
the invalidity of a particular provision in a particular jurisdiction shall not
in and of itself affect the validity of such provision in any other
jurisdiction). The parties shall endeavor in good faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
SECTION 9.13. COUNTERPARTS. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original but all of which when taken together shall
constitute a single contract, and shall become effective as provided in Section
9.03. Delivery of an executed signature page to this Agreement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Agreement.
SECTION 9.14. HEADINGS. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
SECTION 9.15. JURISDICTION; CONSENT TO SERVICE OF PROCESS. (a) Each of
the parties to this Agreement hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of any New York
State court or Federal court of the United States of America sitting in New York
City, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement or the other Loan Documents, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State or,
to the extent permitted by law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that any party hereto or to any of the other Loan Documents may otherwise
have to bring any action or proceeding relating to this Agreement or the other
Loan Documents against any of the other parties hereto or thereto or their
respective properties in the courts of any jurisdiction.
(b) Each of FRD, FRI-M and the Borrowers hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
the other Loan Documents in any New York State or Federal court. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
69
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
COCO'S RESTAURANTS, INC.,
by
/S/ XXXXXXX X. XXXXX
----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President and Treasurer
CARROWS RESTAURANTS, INC.,
by
/S/ XXXXXXX X. XXXXX
---------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President and Treasurer
JOJOS RESTAURANTS, INC.,
by
/S/ XXXXXXX X. XXXXX
----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President and Treasurer
FRD ACQUISITION CO.,
by
/S/ XXXXXXX X. XXXXX
----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President and Treasurer
FRI-M CORPORATION,
by
/S/ XXXXXXX X. XXXXX
----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President and Treasurer
70
CREDIT LYONNAIS NEW YORK BRANCH,
individually and as Administrative Agent,
Collateral Agent, Swingline Lender and an
Issuing Bank,
by
/S/ XXXX XXXXXXX
----------------------------------
Name: Xxxx Xxxxxxx
Title: Vice President
THE CHASE MANHATTAN BANK,
individually and as an Issuing Bank,
Documentation Agent and Syndication Agent,
by
/S/ XXXXXXXX XXXXXXX, XX.
----------------------------------
Name: Xxxxxxxx Xxxxxxx, Xx.
Title: Vice President
THE PROVIDENT BANK,
by
/S/ XXXXXX X. XXX
----------------------------------
Name: Xxxxxx X. Xxx
Title: Vice President
FINOVA CAPITAL,
by
/S/ XXXXXXX X. XXXX
----------------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President Contract
Administration
TRANSAMERICA BUSINESS CREDIT
CORPORATION,
by
/S/ XXXXXXX X. XXXXX
----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
XXXXXX FINANCIAL, INC.
by
/S/ XXXXXX X. XXXXXX
----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
