EXHIBIT 10.22
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REVOLVING CREDIT AND TERM
LOAN AGREEMENT
Dated as of June 29, 2001
BETWEEN
MEXICAN RESTAURANTS, INC.
AND
FLEET NATIONAL BANK
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TABLE OF CONTENTS
ARTICLE 1. DEFINITIONS..............................................................................1
ARTICLE 2. THE CREDIT FACILITIES...................................................................11
2.1 Revolving Loans.................................................................................11
2.2 Term Loan.......................................................................................12
2.3 Payment and Prepayment of Loans.................................................................12
2.4 Lender's Records of Loan Activity...............................................................14
2.5 Interest........................................................................................14
2.6 Applicable Interest Rate Margins................................................................16
2.7 Default Interest................................................................................17
2.8 Letters of Credit...............................................................................17
2.9 Changed Circumstances...........................................................................18
2.10 Fees and Charges...............................................................................19
ARTICLE 3. REPRESENTATIONS AND WARRANTIES..........................................................20
3.1 Organization and Qualification..................................................................20
3.2 Corporate Authority; Non-Contravention..........................................................21
3.3 Valid Obligations; Approvals and Consents.......................................................21
3.4 Title to Properties; Absence of Liens...........................................................22
3.5 Compliance......................................................................................22
3.6 Financial Statements............................................................................22
3.7 Events of Default; Solvency.....................................................................23
3.8 Taxes...........................................................................................23
3.9 Labor Relations; Litigation.....................................................................23
3.10 Dormant Subsidiaries...........................................................................24
3.11 Contracts with Affiliates, Etc.................................................................24
3.12 Disclosure.....................................................................................24
3.13 Collateral.....................................................................................24
3.14 Subsidiaries...................................................................................24
ARTICLE 4. CONDITIONS OF LOANS.....................................................................24
4.1 Conditions to Initial Revolving Loan, the Term Loan and the Initial Letter(s) of Credit.........24
4.2 Conditions to all Loans.........................................................................25
ARTICLE 5. COVENANTS...............................................................................26
5.1 Financial Statements and Other Reporting Requirements...........................................26
5.2 Conduct of Business.............................................................................28
5.3 Maintenance and Insurance.......................................................................28
5.4 Taxes...........................................................................................29
5.5 Limitation of Indebtedness......................................................................29
5.6 Restrictions on Liens...........................................................................30
5.7 Mergers, Acquisitions and Purchases and Sales of Assets.........................................30
5.8 Investments and Loans...........................................................................30
5.9 Restricted Payments.............................................................................31
5.10 ERISA Compliance...............................................................................31
5.11 Inspection by Lender; Books and Records; Accounts..............................................32
5.12 Use of Proceeds................................................................................32
5.13 Transactions with Affiliates...................................................................32
5.14 No Amendments to Certain Documents.............................................................32
5.15 Subsidiaries...................................................................................32
5.16 Financial Covenants............................................................................33
5.17 Limitation on Commitments to Develop New Restaurant Units......................................34
5.18 Environmental Indemnification..................................................................34
5.19 Leases.........................................................................................34
5.20 Further Assurances.............................................................................34
ARTICLE 6. EVENTS OF DEFAULT; LENDER'S RIGHTS......................................................35
6.1 Events of Default...............................................................................35
6.2 Lender's Rights.................................................................................38
ARTICLE 7. SET OFF; PARTICIPATIONS.................................................................39
7.1. Right of Set Off...............................................................................39
7.2 Rights of Participants..........................................................................39
ARTICLE 8. MISCELLANEOUS PROVISIONS................................................................39
8.1 Written Notices.................................................................................39
8.2 No Waivers......................................................................................40
8.3 GOVERNING LAW...................................................................................40
8.4 Expenses, Taxes and Indemnification.............................................................40
8.5 Amendments, Waivers, Etc........................................................................41
8.6 Binding Effect of Agreement.....................................................................41
8.7 Computation of Interest and Fees, Etc...........................................................42
8.8 Entire Agreement................................................................................43
8.9 Headings........................................................................................43
8.10 Multiple Counterparts..........................................................................43
8.11 Severability...................................................................................43
8.12 WAIVER OF JURY TRIAL...........................................................................43
8.13 WAIVER OF SPECIAL DAMAGES......................................................................43
8.14. Usury.........................................................................................44
8.15 Replacement of Notes and Other Loan Documents..................................................44
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REVOLVING CREDIT AND
TERM LOAN AGREEMENT
THIS LOAN AGREEMENT is made as of June 29, 2001, among MEXICAN
RESTAURANTS, INC. (the "BORROWER"), having its chief executive office at 0000
Xxxxxxxxx, Xxxxxxx, Xxxxx 00000-0000 and FLEET NATIONAL BANK (the "LENDER"), a
national bank having its head office at 000 Xxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000.
ARTICLE 1. DEFINITIONS. As used herein, the following terms shall have the
following meanings:
1.1 "ACCOUNT" or "ACCOUNT RECEIVABLE" means individually and collectively,
all rights to payment for goods sold or leased or for services rendered
(including, without limitation, all accounts receivable, notes, bills, drafts,
acceptances, instruments, documents, chattel paper and all other debts,
obligations and liabilities in whatever form owing to any person for goods sold
by it or for services rendered by it), all sums of money or other proceeds due
or becoming due thereon, all guaranties and security therefor, and all right,
title and interest of such person in the goods or services giving rise thereto
and the rights pertaining to such goods, including rights of reclamation and
stoppage in transit, and all related insurance, whether any of the foregoing be
now existing or hereafter arising, now or hereafter received by or owing or
belonging to such person, and, upon the effectiveness of New Article 9 in any
applicable jurisdiction, shall include all accounts as defined under New Article
9.
1.2 "AFFILIATE" means, with reference to any Person, (i) any director or
officer of that person, (ii) any other person controlling, controlled by or
under direct or indirect common control of that person, (iii) any other person
directly or indirectly holding 5% or more of any class of the capital stock or
other equity interests (including options, warrants, convertible securities and
similar rights) of that person, (iv) any other person holding 5% or more of any
class of whose capital stock or other equity interests (including options,
warrants, convertible securities and similar rights) is held directly or
indirectly by that person, and (v) any other person that possesses, directly or
indirectly, power to direct or cause the direction of management or policies
(whether through ownership of securities or partnership or other ownership
interests, by contract or otherwise) of that person. For purposes of Section
5.1(g) and 5.10 hereof, "Affiliate" means, within the meaning of Section 414 of
the Code, (i) any member of a controlled group of corporations which includes
the Borrower, (ii) any trade or business, whether or not incorporated, under
common control with the Borrower, (iii) any member of an affiliated service
group which includes the Borrower, and (iv) any member of a group treated as a
single employer by regulation.
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1.3 "AGREEMENT" means this Loan Agreement, including the exhibits hereto,
as originally executed, or if this Agreement is amended, varied or supplemented
from time to time, as so amended, varied or supplemented.
1.4 "APPLICABLE LIBOR MARGIN" means, for any day, with respect to any Loan
payable hereunder, the applicable rate per annum as provided in Section 2.6.
1.5 "APPLICABLE PRIME RATE MARGIN" means, for any day, with respect to any
Loan payable hereunder, the applicable rate per annum as provided in Section
2.6.
1.6 "ASSIGNEE" shall have the meaning set forth in Section 8.6.
1.7 "AVERAGE UNUSED COMMITMENT" for any period of time means the daily
average difference between the Revolving Credit Maximum Amount applicable to
such period and the sum of the principal amount of the Revolving Loans
(including the Stated Amount of, and all unreimbursed draws under, all Letters
of Credit) actually outstanding hereunder.
1.8 "BORROWER" shall have the meaning set forth in the Preamble.
1.9 "BORROWER AFFILIATED GROUP" means, collectively, the Borrower and each
of the Subsidiaries of the Borrower.
1.10 "BUSINESS DAY" means (i) for all purposes other than as covered by
clause (ii) below, any day other than a Saturday, Sunday or legal holiday on
which banks in Boston, Massachusetts are open for the conduct of a substantial
part of their commercial banking business; and (ii) with respect to all notices
and determinations in connection with, and payments of principal and interest
on, Loans bearing interest by reference to LIBOR, any day that is a Business Day
described in clause (i) and that is also a day for trading by and between banks
in United States dollar deposits in the London interbank market.
1.11 "CFO REPORT" shall have the meaning set forth in Section 5.1(e).
1.12 "CLOSING DATE" means June 29, 2001.
1.13 "CODE" means the Internal Revenue Code of 1986 and the rules and
regulations promulgated thereunder, as amended.
1.14 "COLLATERAL" means any and all real and personal property of the
Borrower Affiliated Group, whether tangible or intangible, in which the Lender
now has, is granted by any Security Document or otherwise, or hereafter acquires
a security interest or any other lien, including, without limitation, by way of
mortgage or assignment, to secure the Obligations.
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1.15 "CONSOLIDATED and CONSOLIDATING" shall have the respective meanings
ascribed to such terms under GAAP.
1.16 "CONSOLIDATED CAPITAL EXPENDITURE" means on a Consolidated basis, to
the extent capitalized in accordance with GAAP, any expenditure for fixed assets
(both tangible and intangible) including assets being constructed (whether or
not completed), leasehold improvements, capital leases under GAAP, installment
purchases of machinery and equipment, acquisitions of real estate and other
similar expenditures including (i) in the case of a purchase, the entire
purchase price, whether or not paid during the fiscal period in question, (ii)
in the case of a capital lease, the capitalized amount thereof (determined in
accordance with GAAP), (iii) without duplication, expenditures in or from any
construction-in-progress account of any member of the Borrower Affiliated Group,
and (iv) pre-opening expenses for the applicable period.
1.17 "CONSOLIDATED CASH FLOW" means, in relation to the Borrower Affiliated
Group on a Consolidated basis for any period, Consolidated EBITDA for such
period minus (a) cash Taxes paid during such period and (b) Consolidated Capital
Expenditures during such period.
1.18 "CONSOLIDATED EBITDA" means, in relation to the Borrower Affiliated
Group on a Consolidated basis for any period, an amount equal to the
Consolidated net income (or net loss), determined in accordance with GAAP, of
the Borrower Affiliated Group for such period (without giving effect to any
extraordinary gains or losses), after deduction of all Taxes for such period,
minus any non-cash credits for such period, plus the following to the extent
deducted in computing such Consolidated net income for such period: (i) Interest
Charges for such period, (ii) Taxes on income for such period, (iii)
depreciation for such period, (iv) amortization for such period, (v) other
non-cash charges for such period, (vi) pre-opening expenses for such period, and
(vii) the items listed and described on Schedule 1.18 attached hereto for the
periods specified in such Schedule, in an aggregate amount not exceeding
$200,000.
1.19 "CONSOLIDATED EBITDAR" means, in relation to the Borrower Affiliated
Group on a Consolidated basis for any period, an amount equal to the
Consolidated EBITDA of the Borrower Affiliated Group for such period, plus the
aggregate rental expense of the Borrower Affiliated Group for such period
(including all, if any, percentage rent and other monetary obligations under
each real property Lease to which any member of the Borrower Affiliated Group is
a party).
1.20 "CONSOLIDATED FINANCIAL OBLIGATIONS" means, in relation to the Borrower
Affiliated Group on a Consolidated basis, for any period, without duplication,
(i) Interest Charges paid or required to be paid by the Borrower Affiliated
Group in such period, plus (ii) the aggregate amount of scheduled principal
payments required to be made by the Borrower Affiliated Group during such period
with respect to any Indebtedness for borrowed money or capital lease
obligations, plus (iii) any fees, including letter of credit fees and commitment
fees, required to be paid by the Borrower Affiliated Group in
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connection with any Indebtedness for borrowed money or capital lease
obligations, plus (iv) all Restricted Payments made pursuant to Section 5.9 in
connection with share repurchases during such period, if any, minus (v) fees and
other transaction expenses paid by any member of the Borrower Affiliated Group
on the Closing Date in respect of the credit facilities that are the subject of
this Agreement, minus (vi) fees not exceeding an amount equal to $75,000 being
written off by the Borrower in connection with its prior credit facility with
Bank of America.
1.21 "CONSOLIDATED FUNDED INDEBTEDNESS" means at any date of determination,
on a Consolidated basis for the Borrower Affiliated Group, the sum of, without
duplication, (i) the aggregate principal amount of the Loans outstanding on such
date, plus (ii) the Stated Amount of Letters of Credit outstanding on such date
plus, (iii) the aggregate principal amount of unreimbursed draws under the
outstanding Letters of Credit, plus, (iv) all principal obligations arising
under capital leases in effect on such date required to capitalized in
accordance with GAAP, plus (v) the aggregate principal amount of all other
guarantees and Indebtedness for borrowed money of the Borrower Affiliated Group
outstanding on such date, plus (vi) the aggregate principal amount of all
Indebtedness of the Borrower Affiliated Group evidenced by a bond, debenture,
note or other similar obligation to pay.
1.22 "DEFAULT" means an event or condition that, but for the requirement
that time elapse or notice be given, or both, would constitute an Event of
Default.
1.24 "DORMANT SUBSIDIARIES" means, collectively, each of Casa Ole Private
Club #1, Casa Ole Private Club #2, Casa Ole Private Club #29, Casa Ole Private
Club #51, 000 Xxxxx Xxxxx Club (#516), 0000 Xxxx Xxxxxxxxx Xxxx (#507), 000
Xxxxxx Xxxxxx Club (#555), 1712 Xxxxxx Loop Club (#557), Casa Ole Club #37, Casa
Ole Private Club #56, La Senorita Development Co., La Senorita-Sault Ste. Xxxxx
General (MC-P) and La Senorita-Sault Ste. Xxxxx Limited Partnership (MLP).
1.24 "ENCUMBRANCES" shall have the meaning set forth in Section 5.6.
1.25 "ENVIRONMENTAL COMPLIANCE AND INDEMNITY AGREEMENT" means that certain
Environmental Compliance and Indemnity Agreement executed and delivered by each
of Monterey, the Borrower and MP1 to the Lender on the Closing Date.
1.26 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations thereunder.
1.27 "FEDERAL FUNDS RATE" means for any day, a fluctuating interest rate per
annum equal to the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers, as published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day that is a Business Day, the
average of the quotations for such day on such transactions
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received by the Lender from 3 federal funds brokers of recognized standing
selected by the Lender.
1.28 "FEE MORTGAGES" means collectively, the separate Mortgage and Security
Agreements executed and delivered by each of Monterey, the Borrower and MP1 to
the Lender on the Closing Date.
1.29 "GAAP" means generally accepted accounting principles consistently
applied.
1.30 "GUARANTEE AND SECURITY AGREEMENT" means the Guaranty and Security
Agreement executed and delivered by each member of the Borrower Affiliated Group
to Lender on the Closing Date.
1.31 "INDEBTEDNESS" with respect to any person means and includes, without
duplication, (i) all items which, in accordance with GAAP, would be included as
a liability on the balance sheet of such person, (ii) the face amount of all
letters of credit issued by any bank for the account of such person and all
drafts drawn thereunder, (iii) the total amount of all indebtedness secured by
any Encumbrance to which any property or asset of such person is subject,
whether or not the indebtedness secured thereby shall have been assumed, and
(iv) the total amount of all indebtedness and obligations of others which such
person has directly or indirectly guaranteed, endorsed (otherwise than for
collection or deposit in the ordinary course of business), discounted with
recourse or agreed (contingently or otherwise) to purchase or repurchase or
otherwise acquire, including, without limitation, any agreement (a) to advance
or supply funds to such other person to maintain working capital, equity
capital, net worth or solvency, or (b) otherwise to assure or hold harmless such
other person against loss in respect of its obligations.
1.32 "INITIAL FINANCIAL STATEMENT" shall have the meaning set forth in
Section 3.6.
1.33 "INSOLVENT" or "INSOLVENCY" means that there shall have occurred one or
more of the following events with respect to a Person: death; dissolution
(except the dissolution of La Buena Agency Inc. so long as any and all assets of
La Buena Agency Inc. have been transferred to a member of the Borrower
Affiliated Group prior to such dissolution); liquidation; termination of
existence; "insolvent" or "insolvency" within the meaning of the United States
Bankruptcy Code or other applicable statute; such Person's inability to pay its
debts as they come due or failure to have adequate capital to conduct its
business; such Person's failure to have assets having a fair saleable value net
of any cost to dispose of such assets in excess of the amount required to pay
the probable liability on its then existing debts (including unmatured,
unliquidated and contingent debts); appointment of a receiver of any part of the
property of, execution of a trust mortgage or an assignment for the benefit of
creditors by, or the filing of a petition in bankruptcy or the commencement of
any proceedings under any bankruptcy or insolvency laws or any laws relating to
the relief of debtors, readjustment of indebtedness or reorganization of debtors
by or against such person, or the offering of a plan to creditors or such Person
for composition or extension, except for an involuntary proceeding commenced
against such
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Person which is dismissed within 45 days after the commencement thereof without
the entry of an order for relief or the appointment of a trustee.
1.34 "INTEREST CHARGES" means, for any period, without duplication, all
interest and all amortization of debt discount and expense (including commitment
fees and similar expenses, but excluding fees and other transaction expenses
paid by any member of the Borrower Affiliated Group on the Closing Date in
respect of the credit facilities that are the subject of this Agreement) on any
particular Indebtedness for which such calculations are being made, all as
determined in accordance with GAAP. Computations of Interest Charges on a pro
forma basis for Indebtedness having a variable interest rate shall be calculated
at the rate in effect on the date of any determination.
1.35 "INTEREST PERIOD" means, as to any LIBOR Amount, the period, the
commencement and duration of which shall be determined in accordance with
Subsection 2.5.2, provided that if any such Interest Period would otherwise end
on a day which is not a Business Day, such Interest Period shall end on the
Business Day next preceding or next succeeding such day as determined by the
Lender in accordance with its usual practices and notified to the Borrower at
the beginning of such Interest Period.
1.36 "INVENTORY" means all goods, merchandise and other personal property,
now owned or hereafter acquired by each member of the Borrower Affiliated Group,
which are held for sale or lease or are furnished or to be furnished under
contracts of service, or are finished goods, work in process, raw materials,
materials used or consumed or to be used or consumed in its business and, upon
the effectiveness of New Article 9 in any applicable jurisdiction, shall include
all inventory as defined under New Article 9.
1.37 "LANDLORD WAIVERS" means one or more Landlord Waivers from time to time
delivered to the Lender, each in form and substance satisfactory to the Lender,
by the landlord under any Lease with respect to the Real Properties leased by
any member of the Borrower Affiliated Group.
1.38 "LEASE or LEASES" means any agreement, whether written or oral,
granting a person the right to occupy space in a structure or real estate for
any period of time or any capital lease or other lease of or agreement to use
personal property.
1.39 "LETTERS OF CREDIT" means letters of credit in the form customarily
issued by the Lender as standby letters of credit, issued by the Lender at the
request and for the account of the Borrower.
1.40 "LIBOR" means, with respect to any Interest Period, as applicable to
any LIBOR Amount, the rate per annum (rounded upward, if necessary, to the
nearest 1/32 of one percent) as determined on the basis of the offered rates for
deposits in U.S. dollars, for a period of time comparable to such Interest
Period which appears on the Telerate page 3750 as of 11:00 a.m. (London time) on
the day that is two London Banking Days preceding the first day of such Interest
Period; provided, however, if the rate described
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above does not appear on the Telerate System on any applicable interest
determination date, LIBOR shall be the rate (rounded upwards as described above,
if necessary) for deposits in dollars for a period substantially equal to the
Interest Period on the Reuters Page "LIBO" (or such other page as may replace
the LIBO Page on that service for the purpose of displaying such rates), as of
11:00 a.m. (London time), on the day that is two London Banking Days prior to
the beginning of such Interest Period. "BANKING DAY" shall mean, in respect of
any city, any date on which commercial banks are open for business in that city.
If both the Telerate and Reuters systems are unavailable, then LIBOR
for that date will be determined on the basis of the offered rates for deposits
in U.S. dollars for a period of time comparable to such Interest Period which
are offered by 4 major banks in the London interbank market (chosen by the
Lender in its sole discretion) at approximately 11:00 a.m. (London time), on the
day that is two London Banking Days preceding that first day of such Interest
Period as selected by the Lender. The principal London office of each of the
four major London banks will be requested to provide a quotation of its U.S.
dollar deposit offered rate. If at least two such quotations are provided, LIBOR
for that date will be the arithmetic mean of the quotations. If fewer than two
quotations are provided, LIBOR for that date will be determined on the basis of
the rates quoted for loans in U.S. dollars to leading European banks for a
period of time comparable to such Interest Period offered by major banks in New
York City (chosen by the Lender in its sole discretion) at approximately 11:00
a.m. (New York City time), on the day that is two London Banking Days preceding
the first day of such Interest Period. In the event that the Lender is unable to
obtain any such quotation as provided above, it will be deemed that LIBOR for
the requested Interest Period cannot be determined.
1.41 "LIBOR AMOUNT" means, in relation to any Interest Period, any portions
of the principal amount of any Loans as to which the Borrower elects pursuant to
Subsection 2.5.2 to pay interest at a rate determined by reference to LIBOR.
1.42 "LOAN" means a loan made to the Borrower by the Lender pursuant to
Article 2 hereof, and "LOANS" means all of such loans, collectively.
1.43 "LOAN ACCOUNT" means the account on the books of the Lender in which
will be recorded Loans made by the Lender to the Borrower pursuant to this
Agreement, payments made on such Loans and other appropriate debits and credits
as provided by this Agreement.
1.44 "LOAN COMMITMENT" means either the Revolving Loan Commitment or the
Term Loan Commitment, as the context may require.
1.45 "LOAN DOCUMENTS" means, collectively, this Agreement (including,
without limitation, the agreements and other instruments listed or described in
the Closing Agenda attached hereto as Exhibit G), the Notes, the Guarantee and
Security Agreement, the Environmental Compliance and Indemnity Agreement, the
Stock Pledge Agreement,
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the Fee Mortgages, the Solvency Certificates, the Patent and Trademark Security
Agreement, the Landlord Waivers, the Letters of Credit and all applications
relating thereto, and any other agreements, instruments or documents referred to
herein or therein and/or delivered in connection herewith or therewith, and all
schedules, exhibits and annexes thereto.
1.46 "MONTEREY" means Monterey's Acquisition Corp., a Delaware corporation.
1.47 "MP1" means Casa Ole MP1, Inc., a Delaware corporation.
1.48 "NEW ARTICLE 9" means revised Article 9 of the Uniform Commercial Code
in the form or substantially in the form approved by the American Law Institute
and the National Conference of Commissioners on Uniform State Law and contained
in the 2000 Official Text of the Uniform Commercial Code.
1.49 "NOTES" means, collectively, the Revolving Credit Note and the Term
Note.
1.50 "NOTE SCHEDULES" shall have the meaning set forth in Subsection 2.4.2.
1.51 "OBLIGATIONS" means any and all obligations of any member of the
Borrower Affiliated Group to the Lender of every kind and description, direct or
indirect, absolute or contingent, primary or secondary, due or to become due,
now existing or hereafter arising, regardless of how they arise or by what
agreement or instrument they may be evidenced or whether evidenced by any
agreement or instrument, and includes obligations to perform acts and to refrain
from acting as well as obligations to pay money.
1.52 "PARTICIPANT" shall have the meaning set forth in Section 7.2.
1.53 "PATENT AND TRADEMARK SECURITY AGREEMENT" means that certain Patent and
Trademark Security Agreement executed and delivered by one or more members of
the Borrower Affiliated Group to the Lender on the Closing Date.
1.54 "PERSON" or "PERSON" means any natural person, corporation, limited
liability company, partnership, limited liability partnership, trust, joint
venture association, unincorporated association, trade, business and
governmental agency and instrumentality, or other form of legal entity.
1.55 "PLANS" means, collectively, each "employee pension benefit plan" and
each "employee welfare benefit Plan" (each as defined in ERISA) maintained by
any member of the Borrower Affiliated Group.
1.56 "PRIME RATE" means the greater of (i) variable per annum rate of
interest so designated from time to time by the Lender as its prime rate and
(ii) the Federal Funds Rate plus 0.5%. The Prime Rate is a reference rate and
does not necessarily represent the lowest or best rate being charged to any
customer.
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1.57 "REAL PROPERTY" or "REAL PROPERTIES" means, collectively, (i) all
parcels of land together with the improvements now or hereafter located thereon,
which are now or hereafter owned by any member of the Borrower Affiliated Group,
as more fully set forth, in the case of those owned as of the Closing Date, on
Exhibit B hereto, and (ii) all parcels of land together with the improvements
now or hereafter located thereon, which are now or hereafter leased by any
member of the Borrower Affiliated Group pursuant to a Real Property Lease, as
more fully set forth, in the case of those leased as of the Closing Date, on
Exhibit B hereto.
1.58 "RESERVE CHARGE" means, for each day on which any LIBOR Amount is
outstanding, a reserve charge in an amount equal to the product of:
(i) the outstanding principal amount of the LIBOR Amount,
multiplied by
(ii) (a) LIBOR (expressed as a decimal) divided by one minus the
Reserve Rate, minus (b) LIBOR (expressed as a decimal),
multiplied by
(iii) 1/360.
1.59 "RESERVE RATE" means the rate in effect from time to time, expressed
as a decimal, at which the Lender would be required to maintain reserves under
Regulation D of the Board of Governors of the Federal Reserve System (or any
successor or similar regulation relating to such reserve requirements) against
"Eurocurrency Liabilities" (as such term is used in such Regulation D) if such
liabilities were outstanding.
1.60 "RESTRICTED PAYMENTS" means (i) any cash or property dividend,
distribution, or other payment, direct or indirect, to any Person who now or in
the future holds an equity interest in any member of the Borrower Affiliated
Group, whether evidenced by a security or not, except any dividend by any member
of the Borrower Affiliated Group paid in its own stock; and (ii) any payment on
account of the purchase, redemption, retirement or other acquisition of any
capital stock of any member of the Borrower Affiliated Group, or any other
payment or distribution made in respect thereof, either directly or indirectly.
1.61 "REVOLVING CREDIT MATURITY DATE" means June 30, 2004; provided,
however, that the Revolving Credit Maturity Date may be extended by the mutual
agreement of the Borrower and Lender, in writing and executed by an authorized
representative of both the Borrower and the Lender.
1.62 "REVOLVING CREDIT MAXIMUM AMOUNT" means Five Million Dollars
($5,000,000.00).
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1.63 "REVOLVING CREDIT NOTE" shall have the meaning set forth in Subsection
2.1.1.
1.64 "REVOLVING LOAN COMMITMENT" means, subject to the limitations set forth
in this Agreement, Five Million Dollars ($5,000,000.00).
1.65 "REVOLVING LOANS" shall have the meaning set forth in Subsection 2.1.1.
1.66 "SALE PROPERTIES" shall have the meaning set forth in Section 2.3.
1.67 "SECURITY DOCUMENTS means, collectively, (i) the Loan Documents and
(ii) all other agreements, instruments or contracts (a) to which, at the
relevant time of reference to the term "Security Documents", any member of the
Borrower Affiliated Group or any property or assets of any such member shall be
bound or affected thereby, and (b) by which any of the Obligations shall be
evidenced or under or in respect of which the Lender or any of its agents or
representatives shall have, at such time, any rights or interests as security
for the payment or performance of all or any part of the Obligations.
1.68 "SOLVENCY CERTIFICATES" means, collectively, the separate Solvency
Certificates executed and delivered by each member of the Borrower Affiliated
Group to the Lender on the Closing Date.
1.69 "STATED AMOUNT" means, with respect to each Letter of Credit
outstanding at any given time, the maximum amount then available to be drawn
thereunder (without regard to whether any conditions to drawing could then be
met).
1.70 "STOCK PLEDGE AGREEMENT" means the Stock Pledge Agreement executed and
delivered by each member of the Borrower Affiliated Group having a Subsidiary to
the Lender on the Closing Date.
1.71 "SUBSIDIARY" means, as to any member of the Borrower Affiliated Group,
any Person of which 50% or more of the ordinary voting power for the election of
a majority of the members of the board of directors or other governing body of
such entity is held or controlled by such member of the Borrower Affiliated
Group; or any other such Person the management of which is directly or
indirectly controlled by such member of the Borrower Affiliated Group through
the exercise of voting power or otherwise; or any joint venture, whether
incorporated or not, in which such member of the Borrower Affiliated Group has a
50% ownership interest or any other Person which would be consolidated with any
member of the Borrower Affiliated Group in presenting financial statements in
accordance with GAAP.
1.72 "TAXES" means, on a Consolidated basis, any and all taxes (including,
without limitation, income, receipts, franchise, ad valorem or excise taxes,
transfer or gains taxes or fees, use taxes, withholding, payroll or minimum
taxes, and any interest, penalties or additions to tax with respect to any such
taxes) paid or payable to any governmental
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authority, federal, state or otherwise and imposed on, or otherwise payable by,
or for which responsibility for payment, withholding or collection lies with,
any member of the Borrower Affiliated Group, including any taxes imposed on any
Affiliate for which any member of the Borrower Affiliated Group may be liable
under applicable law or under any agreement to which any member of the Borrower
Affiliated Group is a party or by which it is bound, and including, but not
limited to, any interest, penalties or additions to tax with respect thereto.
1.73 "TERM LOAN" shall have the meaning set forth in Section 2.2.
1.74 "TERM LOAN COMMITMENT" means, subject to the limitations set forth in
this Agreement, Five Million Dollars ($5,000,000.00).
1.75 "TERM LOAN MATURITY DATE" means June 30, 2006.
1.76 "TERM NOTE" shall have the meaning set forth in Section 2.2.
ARTICLE 2. THE CREDIT FACILITIES.
2.1 Revolving Loans.
2.1.1 Advances. Upon the terms and subject to the conditions of this
Agreement, and in reliance upon the representations, warranties and covenants of
the Borrower made herein, the Lender agrees to make loans (each, a "REVOLVING
LOAN" and collectively, the "REVOLVING LOANS") to the Borrower at the Borrower's
request from time to time, from and after the date hereof and prior to the
Revolving Credit Maturity Date, provided that the aggregate principal amount of
Revolving Loans outstanding at any time (after giving effect to all amounts
requested), plus the aggregate principal Stated Amount of Letters of Credit
outstanding at such time, plus the aggregate amount of any unreimbursed draws
under outstanding Letters of Credit at such time, shall not exceed the Revolving
Credit Maximum Amount, and provided, further, that at the time the Borrower
requests a Revolving Loan, and after giving effect to the making thereof, no
Default or Event of Default has occurred and is continuing. The Revolving Credit
Loans shall be evidenced by a promissory note of the Borrower in favor of the
Lender in or substantially in the form of Exhibit A-1 hereto (the "REVOLVING
CREDIT NOTE"), with appropriate insertions. All requests for Revolving Loans
shall be in the form attached hereto as Exhibit D and shall be made in such
manner as shall be agreed between the Borrower and the Lender, except that each
Revolving Loan shall be in a minimum amount of $100,000 and shall be in an
integral multiple of $100,000, or, if less, the remaining unused Revolving
Credit Maximum Amount.
2.1.2 Overadvances. The Borrower agrees that it shall be an Event of
Default hereunder if at any time the aggregate amount of Revolving Loans
outstanding (after giving effect to all amounts requested), plus the aggregate
Stated Amount of Letters of
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Credit outstanding at such time, plus the aggregate amount of any unreimbursed
draws under outstanding Letters of Credit at such time, shall exceed the
Revolving Credit Maximum Amount then in effect, unless the Borrower, upon notice
of such excess from the Lender, immediately, and in any event within one (1)
Business Day, pays cash to the Lender to be credited to the Loan Account in such
amount as shall be necessary to eliminate the excess.
2.1.3 Increase to Revolving Loan Maximum Amount. Following the
Lender's receipt of the audited Consolidated financial statements of the
Borrower Affiliated Group for the fiscal year ending December 31, 2002 required
under Section 5.1(a), the Borrower may request an increase in the Revolving Loan
Commitment. The Lender may grant or deny such request in the Lender's sole
discretion. In the event that the Lender elects not to provide the Borrower with
an increase in the Revolving Loan Commitment, the Lender will attempt in good
faith to add a new lender hereunder willing to commit to such increase in the
Revolving Loan Commitment.
2.2 Term Loan. Subject to the terms and conditions set forth in this
Agreement, the Lender agrees to lend to the Borrower on the Closing Date, and
the Borrower agrees to borrow on such date and repay in accordance with Section
2.3, an amount equal to the Term Loan Commitment (the "TERM LOAN"). No amounts
prepaid on the Term Loan may be reborrowed. The Term Loan shall be evidenced by
separate promissory note of the Borrower in favor of the Lender in or
substantially in the form of Exhibit A-2 hereto (the "TERM NOTE"), with
appropriate insertions.
2.3 Payment and Prepayment of Loans.
2.3.1 Payment of Revolving Loans. Interest on the Revolving Loans
shall be payable as provided in Section 2.5. On the Revolving Credit Maturity
Date, all outstanding principal of the Revolving Loans, together with all
accrued and unpaid interest thereon, and all fees, charges and expenses relating
thereto, shall be absolutely and unconditionally due and payable in full by the
Borrower to the Lender.
2.3.2 Payment of Term Loan. Interest on the Term Loan shall be
payable as provided in Section 2.5. The outstanding principal of the Term Loan
shall be amortized in 20 equal installments of $250,000.00 payable on the last
day of each consecutive fiscal quarter of the Borrower commencing with the
fiscal quarter of the Borrower ending nearest to September 30, 2001. If not
sooner paid, on the Term Loan Maturity Date all outstanding principal of the
Term Loan, together with all accrued and unpaid interest thereon, and all fees,
charges and expenses relating thereto, shall be absolutely and unconditionally
due and payable in full by the Borrower to the Lender.
2.3.3 Method of Payment. All payments and prepayments of principal
and all payments of interest and other amounts shall be made by the Borrower to
the Lender at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, in immediately
available funds, on or before 11:00 a.m. (Boston, Massachusetts time) on the due
date thereof, free and clear of,
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and without any deduction or withholding for, any Taxes (excluding any taxes
imposed on the net income of the Lender) or other payments.
2.3.4 Voluntary Prepayment. Subject to the provisions of Subsection
2.5.2(d), the Borrower may prepay outstanding Loans, or reduce the amount of any
Loan Commitment, in whole or in part at any time without premium or penalty upon
five Business Days' prior written notice to the Lender, provided, however, that
prepayments of the Revolving Loan that do not involve a permanent reduction of
the Revolving Loan Commitment shall not require prior written notice. Amounts so
paid in respect of Revolving Loans (without a reduction in the Revolving Loan
Commitment) may be borrowed and re-borrowed from time to time as provided in
Subsection 2.1.1. Any prepayment of the Term Loan shall constitute a permanent
reduction of the Term Loan and may not be re-borrowed. With respect to the Term
Loan, provided that the Borrower's Maximum Consolidated Leverage Ratio (see
Subsection 5.16(a)) is greater than 1.50 to 1.0 as of the end of the Borrower's
fiscal quarter immediately preceding such prepayment, such voluntary prepayments
of principal shall be applied to installments of principal due in inverse order
of maturity. In all other cases, prepayments will be applied pro rata to reduce
all remaining principal installments of the Term Loan. All reductions of Loan
Commitments, and all prepayments of any Loan, shall be in a minimum amount equal
to $50,000 and in additional increments of $50,000.
2.3.5 Mandatory Prepayment. To the extent that they exceed the sum
of $500,000 in the aggregate during the term of this Agreement, all proceeds
from (w) the sale of assets by any member of the Borrower Affiliated Group, (x)
the sale of equity interests by any member of the Borrower Affiliated Group
(except to an Affiliate of the Borrower or to another member of the Borrower
Affiliated Group), (y) the issuance of any Indebtedness by any member of the
Borrower Affiliated Group (any such Indebtedness only to be issued in compliance
with Section 5.5), and (z) any insurance proceeds due to any member of the
Borrower Affiliated Group shall be paid to the Lender as permanent reductions of
the principal of the Term Loan. Notwithstanding the foregoing, at any time
during which an Event of Default has occurred and is continuing, all such
proceeds shall be so paid to the Lender as permanent reductions of the principal
of the Term Loan whether or not the aggregate amount of all such proceeds
received during the term of this Agreement exceeds $500,000. Provided that the
Borrower's Maximum Consolidated Leverage Ratio (see Subsection 5.16(a)) is
greater than 1.50 to 1.0 as of the end of the Borrower's fiscal quarter
immediately preceding such prepayment, such mandatory prepayments of principal
shall be applied to installments of principal due in inverse order of maturity.
In all other cases, such mandatory prepayments of principal will be applied pro
rata to reduce all remaining principal installments of the Term Loan.
Notwithstanding anything to the contrary stated herein, the Borrower shall not
be required to pay to the Lender under this Subsection 2.3.5 any proceeds
resulting from (i) the sale of the two parcels of real property identified with
reference to this Section 2.3 in Exhibit B (the "SALE PROPERTIES"), provided
that all proceeds of such sales which exceed $2,500,000 in the aggregate shall
be paid to the Lender for application to the Term Loan in the same manner as
proceeds of other asset sales, (ii) insurance settlements resulting from damage
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or destruction to restaurant units, provided that the Borrower provides to the
Lender evidence (in form and substance satisfactory to the Lender in its sole
discretion) that such proceeds have been reinvested in the same or replacement
restaurant units within 270 days of the receipt thereof by the applicable member
of the Borrower Affiliated Group, and (iii) the issuance of equity interests in
members of the Borrower Affiliated Group as part of customary employee option
transactions or similar compensation-related transactions, provided that such
issuances are made in the ordinary course of business and consistent with prior
practice.
2.4 Lender's Records of Loan Activity.
2.4.1 Loan Account. The Lender shall, in its discretion, enter Loans
and advances made by the Lender to the Borrower pursuant to this Agreement
(including, without limitation, on account of Letters of Credit) as debits in
the Loan Account. The Lender shall also record in the Loan Account all payments
made by the Borrower on account of the Loans and may also record therein, in
accordance with customary accounting practices, other debits and credits,
including customary banking charges and all interest, fees, charges and expenses
chargeable to the Borrower under this Agreement. The debit balance of the Loan
Account shall reflect the amount of the Borrower's Obligations hereunder and
shall be considered correct absent manifest error. The Borrower authorizes the
Lender to charge to the Loan Account or to any deposit account which the
Borrower may maintain with the Lender the principal, interest, fees, charges,
taxes and expenses provided for in this Agreement or any other document executed
or delivered in connection herewith.
2.4.2 Note Schedules. The Lender may, instead of or in addition to
maintaining a Loan Account, and is hereby irrevocably authorized by the Borrower
to, enter on the schedule forming a part of its Notes or otherwise in its
records, appropriate notations (collectively, the "NOTE SCHEDULES") evidencing
the date and the amount of each Loan, as applicable, the interest rate
applicable thereto and the date and amount of each payment of principal made by
the Borrower with respect thereto; and such notations shall be considered
correct absent manifest error. The Lender is hereby irrevocably authorized by
the Borrower to attach to and make a part of its Notes a continuation of any
such schedule as and when required. No failure on the part of the Lender to make
any notation as provided in this Subsection 2.4.3 shall in any way affect any
Loan or the rights of the Lender or the Obligations of the Borrower with respect
thereto.
2.5 Interest.
2.5.1 Prime Rate Plus Applicable Prime Rate Margin. Subject to the
provisions of Subsection 2.5.2 and Section 2.7, Revolving Loans and the Term
Loan shall each bear interest at a rate per annum equal to the Prime Rate in
effect from time to time, plus the Applicable Prime Rate Margin in effect at
such time. Interest on Revolving Loans and the Term Loan (not at the time
overdue) bearing interest with reference to the Prime Rate shall be payable
monthly in arrears on the last Business Day of each month. Any change
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in the Prime Rate shall result in a change on the same day in the rate of
interest to accrue from and after such day on the unpaid balance of principal of
Revolving Loans and Term Loan.
2.5.2 LIBOR Plus Applicable LIBOR Margin.
(a) At the option of the Borrower, so long as no Default or Event
of Default has occurred and is then continuing, the Borrower may elect from time
to time prior to the Revolving Credit Maturity Date or the Term Loan Maturity
Date, as applicable, to have all or a portion of the unpaid principal amount of
any Loan bear interest during any particular Interest Period by reference to
LIBOR; provided, that any such portion of any Loan shall be in an amount not
less than $250,000 or some greater integral multiple of $250,000 with respect to
any single Interest Period, and provided further, that there shall not be more
than five (5) Loans (or portions thereof) outstanding at any time the interest
on which is determined by reference to LIBOR. Any election by the Borrower to
have interest calculated by reference to LIBOR shall be made by notice (which
shall be irrevocable) to Lender at least three Business Days prior to the first
day of the proposed Interest Period, specifying the LIBOR Amount and the
duration of the proposed Interest Period (which must be for one, two or three
months). Any such election of a LIBOR shall lapse at the end of the expiring
Interest Period unless extended by a further election notice as hereinbefore
provided and, in the event of such lapse, the applicable Loans shall bear
interest with reference to the Prime Rate in accordance with Section 2.5.1.
Except as otherwise provided herein, each LIBOR Amount shall bear interest
during each Interest Period relating thereto at a per annum rate equal to LIBOR
plus the Applicable LIBOR Margin then in effect. Interest on each LIBOR Amount
shall be payable on the last day of each Interest Period relating thereto.
Notwithstanding the foregoing, Borrower may not select an Interest Period which
extends beyond the Revolving Credit Maturity Date for Revolving Loans or the
Term Loan Maturity Date for the Term Loan.
(b) The Lender shall forthwith upon determining LIBOR provide
notice thereof to the Borrower. Each such notice shall be conclusive and binding
upon the Borrower. If, with respect to any Interest Period, the Lender is unable
to determine LIBOR relating thereto, or adverse or unusual conditions in or
changes in applicable law relating to the applicable London interbank market
make it illegal or, in the reasonable judgment of the Lender, impracticable, to
fund therein the LIBOR Amount or make the projected LIBOR unreflective of the
actual costs of funds therefor to the Lender, or if it shall become unlawful for
the Lender to charge interest on the Loans on a LIBOR basis, then in any of the
foregoing events the Lender shall so notify the Borrower and interest will be
calculated and payable in respect of such projected Interest Period (and
thereafter for so long as the conditions referred to in this sentence shall
continue) by reference to the Prime Rate in accordance with Subsection 2.5.1.
(c) If any Interest Period would otherwise end on a day which is
not a Business Day for LIBOR purposes, that Interest Period shall end on the
Business Day next
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preceding or next succeeding such day as determined by the Lender in accordance
with its usual practices and notified to the Borrower at the beginning of such
Interest Period.
(d) If for any reason any payment or prepayment of principal of a
LIBOR Amount is made on any day other than the last day of an Interest Period,
then the Borrower shall reimburse the Lender for the loss, if any, computed
pursuant to the following formula:
L = (R-T) x P x D
------------- + RC
360
L = amount of loss to be reimbursed to Lender.
R = LIBOR plus the Applicable LIBOR Margin at the
time of the payment.
T = effective interest rate in which United
States Treasury bills maturing on the last
day of the then current Interest Period and
in the same amount as the unpaid principal
amount of the Loan can be purchased by
Lender on the day of such payment of
principal.
D = the number of days remaining in the Interest
Period as of the date of such payment.
P = the amount of principal paid.
RC = the Reserve Charge due through the date of such
payment.
The Borrower shall pay to the Lender the amount of loss, computed in accordance
with the foregoing formula, upon presentation by the Lender of a statement
setting forth the Lender's calculation of the amount of such loss, which notice
shall be conclusive and binding upon the Borrower in the absence of manifest
error.
2.6 Applicable Interest Rate Margins. The "APPLICABLE PRIME RATE MARGIN"
and the "APPLICABLE LIBOR MARGIN" shall, at any given point in time, be
determined in accordance with Table 1 below; provided, however, that from the
Closing Date through the date upon which the Lender first receives the
Consolidated balance sheet and statement of income, retained earnings and cash
flow of the Borrower Affiliated Group for the fiscal quarter ending nearest to
September 30, 2001, together with the CFO Report relating thereto, the level
used to determine the Applicable Prime Rate Margin and the Applicable LIBOR
Margin shall be Level IV.
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TABLE 1
APPLICABLE INTEREST RATE MARGINS
-----------------------------------------------------------------------------------------------------
Level I Level II Level III Level IV
------- -------- --------- --------
-----------------------------------------------------------------------------------------------------
Maximum Consolidated <1.0 to 1.0 >1.0 to 1.0 but >1.5 to 1.0 to >1.75
Leverage Ratio: - <1.5 to 1.0 <1.75 to 1.0
- -
AND AND AND AND/OR
Minimum Trailing Four
Quarters EBITDA: >$5,000,000 >$5,000,000 >$5,000,000 <$5,000,000
- - -
-----------------------------------------------------------------------------------------------------
Applicable Prime Rate 0.50% 1.00% 1.50% 2.00%
Margin
-----------------------------------------------------------------------------------------------------
Applicable LIBOR 2.50% 3.00% 3.50% 4.00%
Margin
-----------------------------------------------------------------------------------------------------
For purposes of determining the Applicable Prime Rate Margin and the
Applicable LIBOR Margin, the Maximum Consolidated Leverage Ratio and the Minimum
Trailing Four Quarters EBITDA will be tested quarterly, commencing with the
fiscal quarter of the Borrower ending nearest to September 30, 2001, based on
the annual or quarterly financial statements required to be delivered pursuant
to Section 5.1(a) or 5.1(b), respectively. For purposes of determining the
interest rate for any Interest Rate Period hereunder, any interest rate change
shall be effective three Business Days after the date on which the financial
statements required to be delivered pursuant to Section 5.1(a) or Section 5.1(b)
are delivered to the Lender, together with the applicable CFO Report and a
notice to the Lender specifying any change in the Applicable Prime Rate Margin
and the Applicable LIBOR Margin. If the Borrower has failed to deliver the
financial statements required to be delivered by it pursuant to Section 5.1(a)
or Section 5.1(b), the Applicable Prime Rate Margin and the Applicable LIBOR
Margin that are then in effect shall automatically be increased to Level IV
until such financial statements are delivered.
2.7 Default Interest. Notwithstanding anything to the contrary stated
herein, upon the occurrence and during the continuance of an Event of Default,
at the option of the Lender, to the extent permitted by applicable law, the
unpaid balance of all Loans shall bear interest at a rate equal to (i) in the
case of a non-monetary Event of Default, a rate equal to the Prime Rate plus 2%
and (ii) in the case of a monetary Event of Default, a rate equal to the Prime
Rate plus 3%, in either case compounded monthly until such Event of Default is
cured or waived.
2.8 Letters of Credit. Issuance. Upon the terms and subject to the
conditions of this Agreement, and in reliance upon the representations,
warranties and covenants of the Borrower made herein, the Lender agrees to issue
upon the application of the Borrower, to the extent permitted by law and the
Uniform Customs and Practice of the International Chamber of Commerce governing
Letters of Credit (Publication No. 500 or any successor thereto), Letters of
Credit during the period from the date hereof to the 30th day prior to
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the Revolving Credit Maturity Date; provided that (i) the aggregate Stated
Amount of Letters of Credit outstanding at any time, plus the aggregate amount
of all unreimbursed draws under such outstanding Letters of Credit shall not at
any time exceed $2,000,000, and (ii) the aggregate principal amount of Revolving
Loans outstanding at such time plus the aggregate principal amount of all
Letters of Credit outstanding at such time, plus the aggregate principal amount
of all unreimbursed draws under outstanding Letters of Credit, shall not exceed
the Revolving Credit Maximum Amount at any time; and provided, further, that at
the time Borrower requests the issuance of a Letter of Credit, and after giving
effect to the issuance thereof, no Default or Event of Default shall have
occurred or be continuing. All Letters of Credit shall have a stated expiration
date not to exceed one (1) year and shall, in any event, expire not later than
the 15th day prior to the Revolving Credit Maturity Date. Amounts drawn under
the Letters of Credit shall become immediately due and payable by the Borrower
to the Lender and, if there is availability under the Revolving Credit Maximum
Amount and no Default or Event of Default exists or would be caused thereby,
upon the request of the Borrower, the Lender shall add the amounts drawn to the
Loan Account as Revolving Loans. In order to evidence such Letters of Credit,
the Borrower shall enter into with the Lender such agreements and execute such
instruments and documents as the Lender customarily requires in like
transactions.
2.9 Changed Circumstances.
2.9.1 Changed Capital Requirements. If, after the date hereof, the
Lender shall have determined that the adoption of any applicable law, rule,
regulation, guideline, directive or request (whether or not having the force of
law) regarding capital requirements for banks or bank holding companies, or any
change therein, or any change in the interpretation or administration thereof by
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by the Lender with any
of the foregoing imposes or increases a requirement by the Lender to allocate
capital resources to the Lender's commitment to make Loans which has or would
have the effect of reducing the return on the Lender's capital to a level below
that which the Lender could have achieved (taking into consideration the
Lender's then existing policies with respect to capital adequacy and assuming
full utilization of the Lender's capital) but for such adoption, change or
compliance by any amount deemed by the Lender to be material, then: (i) the
Lender shall promptly after its determination of such occurrence give notice
thereof to the Borrower; and (ii) to the extent that the costs of such increased
capital requirements are not reflected in the then interest rate applicable to
the Loans, the Borrower and the Lender shall thereafter attempt to negotiate in
good faith, within 30 days following the date the Borrower receives such notice,
an adjustment payable hereunder that will adequately compensate the Lender in
light of the circumstances. If the Lender and the Borrower are unable to agree
to such adjustment within 30 days following the date upon which the Borrower
receives such notice, then commencing on the date of such notice (but no earlier
than the effective date of any such increased capital requirement), the fees
payable hereunder shall increase by an amount that will, in the Lender's
reasonable determination, provide adequate compensation. The
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provisions of this Section 2.9.1 shall be applied to the Borrower so as not to
discriminate against Borrower vis-a-vis other similarly situated customers of
the Lender.
2.9.2 Other Changes Adverse to Lender. Notwithstanding anything to
the contrary stated herein, if any present or future applicable law (which
expression, as used in this Agreement, includes statutes and rules and
regulations thereunder and interpretations thereof by any competent court or by
any governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time heretofore or
hereafter made upon or otherwise issued to the Lender by any central bank or
other fiscal, monetary or other authority, whether or not having the force of
law) shall (i) subject the Lender to any tax, levy, impost, duty, charge, fee,
deduction or withholding of any nature with respect to this Agreement, the
maximum amount of the Loans or the payment to the Lender of any amounts due to
it hereunder, or (ii) materially change the basis of taxation of payments to the
Lender of the principal or the interest on or any other amounts payable to the
Lender hereunder, or (iii) impose or increase or render applicable any special
or supplemental special deposit or reserve or similar requirements or assessment
against assets held by, or deposits in or for the account of, or any liabilities
of, or loans by an office of the Lender in respect of the transactions
contemplated herein, or (iv) impose on the Lender any other conditions or
requirements with respect to this Agreement, the Revolving Credit Maximum
Amount, any Revolving Loan, the Term Loan Maximum Amount or the Term Loan and
the result of any of the foregoing is (A) to increase the cost to the Lender of
making, funding or maintaining all or any part of the Loans, or (B) to reduce
the amount of principal, interest or other amount payable to the Lender
hereunder, or (C) to require the Lender to make any payment or to forego any
interest or other sum payable hereunder, the amount of which payment or
foregoing interest or other sum is calculated by reference to the gross amount
of any sum receivable or deemed received by the Lender from the Borrower
hereunder, then, and in each such case not otherwise provided for hereunder, the
Borrower will, upon demand made by the Lender accompanied by calculations
thereof in reasonable detail, pay to the Lender such additional amounts as will
be sufficient to compensate the Lender for such additional cost, reduction,
payment or foregoing interest or other sum, provided that the foregoing
provisions of this sentence shall not apply in the case of any additional cost,
reduction, payment or foregoing interest or other sum resulting from any taxes
charged upon or by reference to the overall net income, profits or gains of the
Lender.
2.10 Fees and Charges.
2.10.1 Unused Commitment Fee. The Borrower shall pay to the Lender a
commitment fee, payable quarterly in arrears on the last Business Day of each
fiscal quarter (or portion thereof) of the Borrower, equal to one-half of one
percent (0.50%) per annum of the Average Unused Commitment during such quarter.
In addition, for any quarterly period during which the Averaged Unused
Commitment exceeds 75% of the total available facility, a surcharge equal to an
additional one-quarter of one percent
-19-
(.25%) per annum of the Average Unused Commitment shall be payable by the
Borrower to the Lender.
2.10.2 Reserve Charge. The Borrower shall pay to the Lender the
Reserve Charge, if any, with respect to LIBOR Amounts of the Loans outstanding
from time to time on the dates interest is payable on such LIBOR Amounts.
2.10.3 Letter of Credit Fee. A Letter of Credit fee shall be payable
quarterly on each outstanding standby Letter of Credit at a rate per annum equal
to the Applicable LIBOR Margin applicable to Revolving Loans then in effect
multiplied by the Stated Amount of such Letter of Credit, along with such
issuance, documentary processing and other fees as are customarily charged by
Lender on standby letters of credit. In the event that additional lenders are
added to the credit facility, the Borrower shall, in addition to and not in lieu
of any other fees payable hereunder, pay to the Lender, as the issuing bank, a
fronting fee equal to one-eighth of one percent (0.125%) multiplied by the
Stated Amount of each standby Letter of Credit. Fees assessed under this
Subsection 2.10.3 shall be payable by the Borrower on the last Business Day of
each fiscal quarter of the Borrower during which any Letter of Credit is
outstanding.
2.10.4 Closing Fee. The Borrower shall pay to the Lender a closing
fee equal to one and one-quarter percent (1.25%) multiplied by the sum of (i)
the Revolving Loan Commitment and (ii) the Term Loan Commitment. The closing fee
shall be earned and payable in full to the Lender on the Closing Date.
2.10.5 Agent's Fee. From and after the date, if any, on which an
additional lender is first added to the credit facilities made available
hereunder, the Borrower shall pay to the Lender, for the Lender's account in its
capacity as agent hereunder, an Agent's Fee of $7,500 per annum for each
additional lender. The Agent's Fee shall be payable quarterly in advance on the
last Business Day of each fiscal quarter of the Borrower.
2.10.6 Other Customary Charges. The Borrower shall pay to the Lender
any and all reasonable charges customarily made by the Lender against borrowers
generally.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES. In order to induce Lender to enter
into this Agreement and the other Loan Documents to which it is a party, and
make the Loans hereunder and issue the Letters of Credit, the Borrower hereby
represents, warrants and covenants to the Lender as follows:
3.1 Organization and Qualification. The Borrower and each other member of
the Borrower Affiliated Group (i) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation as indicated on Exhibit B hereto; (ii) has all requisite corporate
power and authority to own its property and conduct its business as now
conducted and as presently contemplated; and (iii) is duly qualified and in good
standing in the jurisdictions indicated on Exhibit B hereto and
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each other jurisdiction where the nature of its properties or its business
(present or proposed) requires such qualification, except where the failure to
so qualify could not reasonably be expected to have a material adverse effect on
the assets, liabilities, properties, income, financial condition, business or
prospects of the Borrower Affiliated Group taken as a whole. Since the date of
the Initial Financial Statement, the Borrower and each other member of the
Borrower Affiliated Group has continued to engage in substantially the same
business as that in which it was then engaged and is engaged in no unrelated
business.
3.2 Corporate Authority; Non-Contravention. The execution, delivery and
performance of the Loan Documents and the transactions and other documents
contemplated hereby and thereby are within the corporate power and authority of
the Borrower and each other member of the Borrower Affiliated Group, and have
been authorized by all necessary corporate proceedings. Said execution, delivery
and performance do not and will not (a) contravene any provision of the
organizational or charter documents or by-laws of the Borrower or any other
member of the Borrower Affiliated Group, or any law, rule or regulation
applicable to the Borrower or any other member of the Borrower Affiliated Group,
or (b) contravene any provisions of or a default or event of default under any
other agreement, instrument, judgment, order, decree, permit, license or
undertaking binding upon or applicable to the Borrower or such other member of
the Borrower Affiliated Group (except to the extent that a waiver, consent or
approval has been obtained and remains in effect with respect to such terms and
provisions and has been delivered to the Lender), or constitute a Default or
Event of Default hereunder or (c) result in the creation, other than in favor of
the Lender, of any mortgage, pledge, security interest, lien, encumbrance or
charge upon any of the properties or assets of the Borrower or any other member
of the Borrower Affiliated Group. The only material contracts of any member of
the Borrower Affiliated Group are the Leases and contracts evidencing sale
leaseback transactions, and the execution, delivery and performance of the Loan
Documents do not require any consent under or contravene any provision of any of
such Leases or contracts.
3.3 Valid Obligations; Approvals and Consents. This Agreement has been duly
executed and delivered to the Lender by the Borrower. Each of the Loan Documents
to which the Borrower or any other member of the Borrower Affiliated Group is or
is to become a party, when executed and delivered by the Borrower or such other
member of the Borrower Affiliated Group shall constitute a legal, valid and
binding obligation of the Borrower and such other members of the Borrower
Affiliated Group enforceable in accordance with its terms, except as such
enforceability may be limited by (i) applicable bankruptcy, insolvency or
similar laws of general application relating to enforcement of creditors' rights
generally, and (ii) general principles of equity, whether applied in a
proceeding in equity or at law. The execution, delivery and performance of the
Loan Documents and other documents contemplated hereby and thereby, and the
consummation of the transactions contemplated by such Loan Documents and such
other documents, do not require any approval or consent of, or filing or
registration with, any person or entity except the recordation of the Fee
Mortgages, and filings under the
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Uniform Commercial Code and with the Patent and Trademark Office, in connection
with the Collateral.
3.4 Title to Properties; Absence of Liens. The Borrower and each other
member of the Borrower Affiliated Group has good and marketable title to all of
its properties, assets and rights of every name and nature now purported to be
owned by it, which properties, assets and rights include all those necessary to
permit the Borrower and each other member of the Borrower Affiliated Group to
conduct its business as such business was conducted on the date of the Initial
Financial Statement, free from all liens, charges and encumbrances whatsoever
except for insubstantial and immaterial defects in title in connection with any
owned Real Property and except for liens, charges or encumbrances permitted
under Section 5.6.
3.5 Compliance. The Borrower and each other member of the Borrower
Affiliated Group (i) has all necessary permits, approvals, authorizations,
consents, licenses, franchises, registrations and other rights and privileges
(including without limitation patents, trademarks, trade names and copyrights)
to allow it to own its properties material to its business and operate its
business without any material violation of law or the rights of others, (ii) is
duly authorized, qualified and licensed under and in compliance with all
applicable laws, regulations, authorizations and orders of public authorities
which are material to its business (including, without limitation, such laws
relating to hazardous materials, hazardous waste, oil, and protection of the
environment and laws relating to ERISA or to employee benefit plans generally),
and (iii) has performed all obligations required to be performed by it under,
and is not in default under or in violation of, its charter or by-laws, or any
material agreement, lease, mortgage, note, bond, indenture, license or other
instrument or undertaking to which it is a party or by which any of it or any of
its properties are bound. Neither the Borrower nor any other member of the
Borrower Affiliated Group has received any notice by any governmental authority
or third party with respect to the generation, storage, or disposal or release
or threat of release of hazardous substances, hazardous materials, or oil, or
with respect to any violation of any federal, state or local environmental,
health or safety statute or regulation.
3.6 Financial Statements. The Borrower has furnished to the Lender the
Consolidated and Consolidating balance sheet of the Borrower Affiliated Group as
of December 31, 2000 and the related Consolidated and Consolidating statements
of earnings and retained earnings and cash flows for the fiscal year then ended
(the "Annual Financials"), which were prepared in accordance with GAAP, and
audited and certified by KPMG, LLP and such financial statements fairly present
the Consolidated and Consolidating financial position of the Borrower Affiliated
Group as at the close of business on such date and the results of its operations
for the fiscal year then ended. The Borrower has also furnished to the Lender
the Consolidated and Consolidating unaudited balance sheet and statement of
income for the Borrower Affiliated Group as at March 31, 2000 and for the fiscal
quarter then ended (together with the Annual Financials, the "INITIAL FINANCIAL
STATEMENT"), which was prepared in accordance with GAAP and certified by the
chief financial officer of the Borrower and such financial statements fairly
present the financial position of the
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Borrower Affiliated Group as at the close of business on such date and the
results of its operations for the fiscal quarter then ended, subject only to
normal year-end audit adjustments, none of which will be materially adverse. The
Borrower has also furnished to the Lender the most recent management letter
provided to the Borrower by its accountants. In addition, the Borrower has
furnished to the Lender pro forma projections for the Borrower Affiliated Group
for each calendar year ending December, 2001 through and including December,
2005, all prepared in accordance with GAAP on a basis consistent with the
financial statements required by Section 5.1. Such projections were made in good
faith and based on assumptions which the Borrower and each member of the
Borrower Affiliated Group believes were reasonable when made. On the date
hereof, neither the Borrower nor any member of the Borrower Affiliated Group has
any Indebtedness or other liabilities (other than trade indebtedness incurred in
the ordinary course of business consistent with past practices), whether
accrued, absolute, contingent or otherwise, and whether due or to become due,
that are not set forth on Exhibit B hereto. Since the date of the Initial
Financial Statement, there have been no material adverse changes, individually
or in the aggregate, in the assets, liabilities, properties, income, financial
condition, business or prospects of any member of the Borrower Affiliated Group,
except as set forth on Exhibit B hereto.
3.7 Events of Default; Solvency. As of the date of this Agreement, no
Default or Event of Default exists and neither the Borrower nor any other member
of the Borrower Affiliated Group is, or immediately after giving effect to the
consummation of the Loans will be, Insolvent.
3.8 Taxes. The Borrower and each other member of the Borrower Affiliated
Group has filed all federal, state and other tax returns required to be filed
for all Taxes, and has paid (or has established adequate reserves in accordance
with GAAP for the payment of) all Taxes, assessments and other such governmental
charges due from Borrower or such other member of the Borrower Affiliated Group.
Neither Borrower nor any other member of the Borrower Affiliated Group has
executed any waiver that would have the effect of extending the applicable
statute of limitations in respect of any Tax.
3.9 Labor Relations; Litigation. Neither Borrower nor any other member of
the Borrower Affiliated Group is engaged in any unfair labor practice and,
except as set forth on Exhibit B attached hereto, there is no litigation,
proceeding, governmental investigation (administrative or judicial) or labor
dispute, pending or, to the best knowledge of Borrower and each other member of
the Borrower Affiliated Group, threatened against Borrower or any other member
of the Borrower Group, which, if adversely determined, could have a material
adverse effect on the assets, liabilities, properties, income, financial
condition, business or prospects of the Borrower Affiliated Group taken as a
whole, or on the ability of the Borrower Affiliated Group taken as a whole to
perform its obligations under the Security Documents or under any other
agreement or document contemplated hereby or thereby, nor is any substantial
basis for any such litigation or labor dispute known to exist.
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3.10 Dormant Subsidiaries. Each of the Dormant Subsidiaries conducts no
business operations and has no assets or liabilities, except as are specifically
disclosed on Exhibit B attached hereto.
3.11 Contracts with Affiliates, Etc. Except as disclosed on Exhibit B
attached hereto, and except for agreements or transactions (in each case) in the
ordinary course of business and on an arm's-length basis, no member of the
Borrower Affiliated Group is a party to or otherwise bound by any agreements,
instruments or contracts (whether written or oral) with any Affiliate, except
for any such agreement, instrument or contract (other than an agreement,
instrument or contract with respect to Indebtedness for borrowed money) as would
not materially and adversely affect the assets, liabilities, properties, income,
financial condition, business or prospects of such member of the Borrower
Affiliated Group.
3.12 Disclosure. No representation or warranty made by the Borrower in this
Agreement, any other Loan Document or in any other agreement, instrument,
document, certificate, statement or letter furnished to the Lender by or on
behalf of the Borrower or any other member of the Borrower Affiliated Group, and
no other factual information heretofore or contemporaneously furnished by or on
behalf of the Borrower or any other member of the Borrower Affiliated Group to
the Lender in connection with any of the transactions contemplated by any of the
Loan Documents contains (as of the date given) any materially untrue statement
of fact or omits to state a fact necessary in order to make the statements
contained therein not misleading in any material respect in light of the
circumstances in which they are made. Except as disclosed herein or in the other
Loan Documents, there is no fact known to any member of the Borrower Affiliated
Group which materially and adversely affects, or which would in the future could
materially adversely affect, the assets, liabilities, properties, income,
financial condition, business or prospects of such member of the Borrower
Affiliated Group.
3.13 Collateral. All of the Obligations of the Borrower and each member of
the Borrower Affiliated Group to the Lender under or in respect of the Loan
Documents will, at all times from and after the execution and delivery of each
of the Security Documents, be entitled to the benefits of and be secured by each
of such Security Documents to the extent provided therein.
3.14 Subsidiaries. As of the date hereof, no member of the Borrower
Affiliated Group has any Subsidiaries or business divisions except as set forth
on Exhibit B hereto with respect to each such member of the Borrower Affiliated
Group.
ARTICLE 4. CONDITIONS OF LOANS.
4.1 Conditions to Initial Revolving Loan, the Term Loan and the Initial
Letter(s) of Credit. The obligation of the Lender to make the initial Revolving
Loan and the Term
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Loan, and to issue the initial Letter of Credit, is subject to the fulfillment
to the satisfaction of the Lender on the date hereof of the following conditions
precedent:
4.1.1 The Lender shall have received all of the agreements,
documents, instruments, certificates and opinions listed or described on the
Closing Agenda attached hereto as Exhibit G, in form and substance satisfactory
to the Lender, and duly executed and delivered by the parties thereto, along
with such additional instruments, certificates, opinions and other documents as
the Lender shall reasonably request, and all necessary actions shall have been
taken by the Borrower and each other member of the Borrower Affiliated Group to
grant the Lender a perfected, first-priority security interest in the
Collateral, including, without limitation, the filing of UCC-1 financing
statements in the appropriate jurisdictions.
4.1.2 Each of the representations and warranties made by or on
behalf of the Borrower and each other member of the Borrower Affiliated Group
herein shall be true and accurate on and as of the date made and as of the date
that any such Loan or Letter of Credit is to be made or issued (except for those
representations and warranties that expressly relate only to a particular point
in time, in which case such representations and warranties shall have been
accurate at such time), the Borrower shall have performed and complied with all
covenants and conditions required herein to be performed or complied with by it
prior to the making of the Initial Revolving Loan or the Term Loan, or the
issuance of the Initial Letter(s) of Credit, and no Default or Event of Default
shall have occurred and be continuing, or would result from the making of the
Initial Revolving Loan or the Term Loan, or the issuance of the Initial
Letter(s) of Credit, or the transactions contemplated hereby.
4.2 Conditions to all Loans. The obligation of the Lender to make any
Revolving Loan or the Term Loan, or issue any Letter of Credit, is subject to
the fulfillment to the satisfaction of the Lender immediately prior to or
contemporaneously with each such Loan of each of the following conditions: (i)
the representations and warranties contained herein or otherwise made in writing
by or on behalf of the Borrower and each member of the Borrower Affiliated Group
pursuant hereto or in connection with the transactions contemplated hereby shall
be true and correct in all material respects at the time of each such Loan
(except for those representations and warranties that expressly relate only to a
particular point, in which case such representations and warranties shall have
been accurate at such time) with and without giving effect to the Loan to be
made, or the Letter of Credit to be issued, at such time and the application of
the proceeds thereof, (ii) no Default or Event of Default shall be continuing or
result from the making of such Loan or the issuance of such Letter of Credit,
(iii) no material adverse change in the assets, liabilities, properties, income,
financial condition, business or prospects of any member of the Borrower
Affiliated Group shall have occurred since the date of the Initial Financial
Statement, and (iv) no change in applicable law or regulation shall have
occurred as a consequence of which it shall have become and continue to be
unlawful for the Lender or the Borrower or any other member of the Borrower
Affiliated Group to
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perform any of its respective agreements or obligations under any Security
Document to which it is a party or otherwise adversely affecting the Lender or
the Borrower.
ARTICLE 5. COVENANTS. During the term of this Agreement and so long as any
Obligation of the Borrower remains outstanding, the Borrower, and to the extent
referred to therein (including to the extent the Borrower has agreed to cause
the members of the Borrower Affiliated Group to comply) each other member of the
Borrower Affiliated Group, hereby jointly and severally covenants to the Lender
that:
5.1 Financial Statements and Other Reporting Requirements. The Borrower
shall furnish to Lender:
(a) as soon as available, but in any event within 90 days after
the end of each fiscal year of the Borrower Affiliated Group, a Consolidated and
Consolidating balance sheet of the Borrower Affiliated Group as at the end of,
and related Consolidated and Consolidating statement of income, retained
earnings and cash flow for, such fiscal year prepared in accordance with GAAP
and, in the case of such Consolidated financial statements only, certified by
independent certified public accountants satisfactory to Lender that such
statements present fairly the financial position of the members of the Borrower
Affiliated Group prepared in accordance with GAAP applied in a manner consistent
with past practices; and concurrently with such financial statements, a written
statement by such independent certified public accountants that, in the making
of the audit necessary for their report and opinion upon such Consolidated and
Consolidating financial statements, they have obtained no knowledge of any
Default or Event of Default under Sections 5.9, 5.10 or 5.16 hereof, or, if in
the opinion of such accountant such Default or Event of Default exists, they
shall disclose in such written statement the nature and status thereof;
(b) a soon as available, but in any event within 45 days after the
end of each fiscal quarter of each fiscal year of the Borrower Affiliated Group,
the Consolidated and Consolidating balance sheet of the Borrower Affiliated
Group as at the end of, and related Consolidated and Consolidating statements of
income, retained earnings and cash flow for, the portion of the year then ended
and for the fiscal quarter then ended, prepared in accordance with GAAP applied
in a manner consistent with the audited financial statements required by Section
5.1(a) above (subject to normal year-end audit adjustments, none of which shall
be materially adverse) and certified pursuant to the report to be delivered to
Lender under Section 5.1(e) below;
(c) a soon as available, but in any event within 30 days after the
end of each fiscal month of each fiscal year of the Borrower Affiliated Group,
the Consolidated and Consolidating balance sheet of the Borrower Affiliated
Group as at the end of, and related Consolidated and Consolidating statements of
income, retained earnings and cash flow for, the portion of the year then ended
and for the fiscal month then ended, prepared in accordance with GAAP applied in
a manner consistent with the audited financial
-26-
statements required by Section 5.1(a) above (subject to normal year-end audit
adjustments, none of which shall be materially adverse);
(d) promptly as they become available, a copy of each report
(including any so-called management letters) submitted to any member of the
Borrower Affiliated Group by independent certified public accountants in
connection with each Consolidated and Consolidating annual audit of the books of
any member of the Borrower Affiliated Group, or to all or any combination of
such members of the Borrower Affiliated Group, by such accountants or in
connection with any interim audit thereof pertaining to any phase of the
business of all or any members of the Borrower Affiliated Group;
(e) concurrently with each delivery of each Consolidated and
Consolidating financial statements pursuant to Subsection 5.1(a) and Subsection
5.1(b) of this Section 5.1, a report signed on behalf of the chief financial
officer of the Borrower in substantially the form of Exhibit E hereto (each, a
"CFO REPORT"), and including, without limitation, computations in reasonable
detail evidencing compliance with the covenants contained in Subsections 5.16(a)
through 5.16(e), inclusive;
(f) on or before the 30th day prior to the commencement of each
fiscal year of the Borrower Affiliated Group, a Consolidated and Consolidating
pro forma forecast and business plan for the Borrower Affiliated Group for such
fiscal year (including, without limitation, a Consolidated and Consolidating pro
forma balance sheet and related Consolidated and Consolidating statements of
income, retained earnings and cash flow, along with any material reforecasts or
amended business plan prepared at any time during such fiscal year);
(g) promptly after obtaining knowledge of the existence thereof,
notice of (i) the occurrence of any event which constitutes a Default or Event
of Default, together with the nature and duration thereof and the action
proposed to be taken with respect thereto, (ii) the occurrence of any condition
or event with respect to the Borrower or any member of the Borrower Affiliated
Group or any Affiliate which could be expected to constitute a material adverse
change in or to have a material adverse effect on the business, properties or
condition (financial or otherwise) of the Borrower Affiliated Group taken as a
whole, together with a description of the nature and duration thereof and the
action proposed to be taken with respect thereto, (iii) any litigation or any
investigative proceedings of a governmental agency or authority commenced or
threatened against the Borrower or any member of the Borrower Affiliated Group,
any Affiliate or any Plan which could be expected to have a material adverse
effect on the business, properties or condition (financial or otherwise) of the
Borrower Affiliated Group taken as a whole, or the issuance of any judgment,
award, decree, order or other determination in or relating to any such
litigation or proceedings, (iv) the occurrence of a reportable event (as defined
in ERISA) or any communications to, or receipt of communications from, the PBGC,
the United States Department of Labor or the IRS by the Borrower or any member
of the Borrower Affiliated Group or any Affiliate relating to any Plan, along
with copies of all such communications relating to any matter which, if
adversely determined, could
-27-
reasonably be expected to have a material adverse effect on the business,
properties or condition (financial or otherwise) of the Borrower Affiliated
Group taken as a whole, (v) the adoption by the Borrower or any member of the
Borrower Affiliated Group of any stock option or executive compensation plan,
whether or not subject to ERISA, and any Plan subject to ERISA, or the
substantial modification of any such plan, along with the vesting and funding
schedules and other principal provisions thereof, and (vi) any communications
given or received by the Borrower or any member of the Borrower Affiliated Group
in any way relating to compliance with, any violation or potential violation of,
or any potential liability under, any environmental law or regulation (including
those relating to pollution control, hazardous materials and hazardous wastes),
along with copies of all such communications to the extent such communication
relates to any matter which, if adversely determined, could reasonably be
expected to have a material adverse effect on the business, properties or
condition (financial or otherwise) of the Borrower Affiliated Group taken as a
whole; and
(h) from time to time, such other financial data and other
information or documents (financial or non-financial) relating to the Borrower
Affiliated Group as the Lender may reasonably request.
5.2 Conduct of Business. The Borrower will, and will cause each other
member of the Borrower Affiliated Group to, maintain its corporate existence,
continue to have a fiscal year ending December 31 of each year (unless otherwise
agreed to by the Lender) and remain or engage in substantially the same business
as that in which it is now engaged, and will, and will cause each member of the
Borrower Affiliated Group to, duly observe and comply in all material respects
with all applicable laws and all requirements of any governmental authorities
relative to it, its assets or to the conduct of its business, including laws
relating to the environment, pollution control, hazardous materials and
hazardous waste and will, and will cause each member of the Borrower Affiliated
Group to, maintain and keep in full force and effect all licenses and permits
necessary in any material respect to the proper conduct of its business.
Notwithstanding any other provision of this Agreement or any other Loan
Document, the Borrower will not permit, and will not permit any member of the
Borrower Affiliated Group to permit, any of the Dormant Subsidiaries to conduct
any business operations or to own, lease or hold any assets or properties, and
the Borrower will not, and will not permit any other member of the Borrower
Affiliated Group to, make any investments in, loan to or Restricted Payment to
any Dormant Subsidiary.
5.3 Maintenance and Insurance. The Borrower will, and will cause each
member of the Borrower Affiliated Group to, maintain and keep its properties in
good repair, working order and condition (normal wear and tear excepted) so that
its business may be properly and advantageously conducted at all times, and will
comply with the provisions of all material Leases to which it is a party or
under which it occupies property so as to prevent any material loss or
forfeiture thereof or thereunder. The Borrower at all times will maintain, and
will cause each member of the Borrower Affiliated Group to maintain, insurance
with such insurance companies, in such amounts against such hazards and
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liabilities and for such purposes as is customary in the industry for companies
of established reputation engaged in the same or similar businesses and owning
or operating similar properties. The Lender shall be named as loss payee,
additional insured and mortgagee under each member of the Borrower Affiliated
Group's insurance and shall be given 30 days' advance written notice of any
cancellation thereof. If the Borrower or any other member of the Borrower
Affiliated Group fails to provide such insurance, the Lender, in its sole
discretion, may provide such insurance and charge the cost (plus applicable
interest) to the Loan Account or to the deposit accounts of the Borrower
Affiliated Group with Lender, it being agreed that so long as no Default or
Event of Default has occurred and is continuing, the Lender will provide one (1)
Business Day's prior notice (orally or in writing) thereof to the Borrower. Upon
request of Lender from time to time, the Borrower shall furnish, and shall cause
each member of the Borrower Affiliated Group to furnish, to the Lender
certificates or other evidence satisfactory to Lender of compliance with the
foregoing insurance provisions.
5.4 Taxes. The Borrower will pay or cause to be paid, and will cause each
member of the Borrower Affiliated Group to pay or cause to be paid, all Taxes,
assessments or governmental charges on or against it or its properties prior to
such taxes becoming delinquent, except for any tax, assessment or charge which
is being contested in good faith by proper legal proceedings and with respect to
which adequate reserves have been established and are being maintained, provided
that no enforcement action to enforce a lien has been commenced against the
Borrower or any other member of the Borrower Affiliated Group with respect to
any such tax, assessment or charge.
5.5 Limitation of Indebtedness. The Borrower will not create, incur, assume
or suffer to exist, or in any manner become or be liable directly or indirectly,
and will not permit any member of the Borrower Affiliated Group to create,
incur, assume, suffer to exist, or in any manner become or be liable directly or
indirectly with respect to, any Indebtedness except: (i) the Obligations; (ii)
Indebtedness for borrowed money existing on the date of this Agreement and
described on Exhibit C hereto; (iii) Indebtedness for the purchase price of
capital assets (including Indebtedness under operating leases for machinery and
equipment) incurred in the ordinary course of business in an aggregate amount
not to exceed $100,000 in any fiscal year, or for Taxes or other charges, in
each case subject to the limitations set forth in Sections 5.4 and 5.6,
respectively; (iv) Indebtedness incurred under any capital lease, as determined
by GAAP, in an aggregate amount not to exceed $500,000, and in any event subject
to the limitations set forth in Section 5.6, and (v) Indebtedness on open
account for the purchase price of services, materials and supplies incurred by
the Borrower or any other member of the Borrower Affiliated Group in the
ordinary course of business (not as a result of borrowing), so long as all of
such open account Indebtedness shall be promptly paid and discharged when due or
in conformity with customary trade terms and practices, except for any such open
account Indebtedness which is being contested in good faith by the Borrower or
by such other member of the Borrower Affiliated Group, and as to which adequate
reserves as required by GAAP have been established and are being maintained.
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5.6 Restrictions on Liens. The Borrower will not, and will not permit any
member of the Borrower Affiliated Group to, create, incur, assume or suffer to
exist any mortgage, pledge, security interest, lien or other charge or
encumbrance, including the lien or retained security title of a conditional
vendor, ("ENCUMBRANCES") upon or with respect to its property or assets, real or
personal, or assign or otherwise convey any right to receive income, except: (i)
Encumbrances existing on the date of this Agreement and set forth on Exhibit C
hereto; (ii) Encumbrances in favor of the Lender; (iii) Encumbrances securing
Indebtedness for the purchase price of capital assets to the extent such
Indebtedness is permitted by Section 5.5 (iii) or (iv), provided that (a) each
Encumbrance is given solely to secure the purchase price of such property, does
not extend to any other property and is given at the time of acquisition of the
property, and (b) the Indebtedness secured thereby does not exceed the lesser of
the cost of such property or its fair market value at the time of acquisition;
(iv) liens for Taxes, fees, assessments and other governmental charges to the
extent that payment of the same is not required in accordance with the
provisions of Section 5.4; (v) liens incurred or deposits made by a member of
the Borrower Affiliated Group in the ordinary course of the business of such
member in connection with workers' compensation, unemployment insurance, social
security and other similar laws, or liens of mechanics, laborers, materialmen,
carriers and warehousemen arising by operation of law to secure payment for
labor, materials, supplies or services incurred in the ordinary course of its
business, but only if the payment thereof is not at the time required and such
liens do not, individually or in the aggregate, materially detract from the
value or limit the use of any property subject thereto; (vi) encumbrances
consisting of minor easements, zoning restrictions or other similar restrictions
on the use of real property that do not and could not reasonably be expected to
(individually or in the aggregate) materially affect the value of the assets
encumbered thereby or materially impair the ability of the respective members of
the Borrower Affiliated Group to use such assets in their respective businesses,
and none of which is violated in any material respect by existing or proposed
structures or land use; and (vii) statutory liens of any landlord under the
Leases to the extent such liens have not been waived by such landlord.
5.7 Mergers, Acquisitions and Purchases and Sales of Assets. The Borrower
will not, and will not permit any member of the Borrower Affiliated Group to,
consolidate or merge with or into any other Person, acquire the assets or stock,
or a division, of any Person or sell, lease, transfer or otherwise dispose of or
discount any portion of its assets (including any note, instrument or account),
other than (i) the sale of finished goods, (ii) the disposition of scrap, waste
and obsolete items in the ordinary course of business, and (iii) the disposition
of the Sale Properties, and the merger of a member of the Borrower Affiliated
Group into (x) the Borrower if no Default or Event of Default has occurred and
is continuing or would result from such merger and if the Borrower is the
surviving entity, or (y) any other member of the Borrower Affiliated Group.
5.8 Investments and Loans. The Borrower will not, and will not permit any
other member of the Borrower Affiliated Group to, make or have outstanding at
any time any investments in or loans to any other Person (other than the
existing ownership of equity interests in other members of the Borrower
Affiliated Group), whether by way of
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advance, guaranty, extension of credit, capital contribution, purchase of
stocks, notes, bonds or other securities or evidences of Indebtedness, or
acquisition of limited or general partnership interests or interests in any
limited liability company, or any similar matter, other than: (i) in direct
obligations of the United States of America, maturing within one year of their
issuance; (ii) in time certificates of deposit or repurchase agreements,
maturing within one year of their issuance, from banks or other financial
institutions in the United States having capital, surplus and undivided profits
in excess of $200,000,000; (iii) in short-term commercial paper carrying the
highest rating by Moody's or Standard and Poor's rating services and issued by
corporations headquartered in the United States, in currency of the United
States; (iv) in shares of money-market mutual funds having assets in excess of
$100,000,000 and substantially all of the assets of which consist of investments
referred to in clauses (i) through (iii), inclusive, above; and (v) advances to
employees for business related expenses to be incurred in the ordinary course of
business and consistent with past practices in an amount not to exceed $250,000
in the aggregate outstanding at any one time, provided that no such advances to
any single employee shall exceed $50,000 in the aggregate. The Borrower will
not, and will not permit any other member of the Borrower Affiliated Group to,
make any investment in or loan to any Dormant Subsidiary.
5.9 Restricted Payments. The Borrower will not, and will not permit any
other member of the Borrower Affiliated Group to, directly or indirectly
(through any Affiliate or otherwise), declare, pay or make any Restricted
Payment other than (i) regular compensation (including reasonable bonuses) paid
to its employees in the ordinary course of business and consistent with past
practices, (ii) distribution by any member of the Borrower Affiliated Group
(other than the Borrower) to the Borrower or to any other member of the Borrower
Affiliated Group, and (iii) commencing with the fiscal year of the Borrower
ending December [31], 2002, the Borrower may from time to time make repurchases
of its common stock in an aggregate amount not to exceed $500,000 in any fiscal
year, provided that at the time any such repurchase is proposed to be made, and
after giving effect thereto, (x) no Default or Event of Default shall be
continuing on or as of such date or shall occur by reason of the making of such
repurchase on such date, and (y) the Lender has received from the Borrower a
certificate, certified by its chief financial officer, showing in reasonable
detail that the Consolidated Leverage Ratio is less than 1.0 to 1.0 (both before
and after giving effect to such repurchase).
5.10 ERISA Compliance. None of the Borrower, any other member of the
Borrower Affiliated Group, any of their respective Affiliates, any Plan and any
fiduciary thereof shall (i) engage in any "prohibited transaction" or incur,
whether or not waived, any "accumulated funding deficiency" (both as defined in
ERISA and the Code, (ii) fail to satisfy any additional funding requirements set
forth in Section 412 of the Code and Section 302 of ERISA, or (iii) terminate or
withdraw from participation in any Plan in a manner which could result in the
imposition of a lien on any property of, or impose a substantial withdrawal
liability on, the Borrower. The Borrower and each Plan shall comply in all
material respects with ERISA.
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5.11 Inspection by Lender; Books and Records; Accounts. The Borrower will
permit, and will cause each other member of the Borrower Affiliated Group to
permit, the Lender or its designees, at any reasonable time and from time to
time, to visit and inspect the properties of the Borrower and such other members
of the Borrower Affiliated Group, and to (i) conduct field audits, provided that
prior to the occurrence of a Default or Event of Default, the Lender will not
conduct more than two (2) such audits in any year, (ii) examine and make copies
of the books and records of the Borrower and such other members of the Borrower
Affiliated Group and (iii) discuss the affairs, finances and accounts of the
Borrower and such other members of the Borrower Affiliated Group with
appropriate officers. The Borrower will keep and shall cause other members of
the Borrower Affiliated Group to keep, adequate books and records of account in
which true and complete entries will be made reflecting all of its business and
financial transactions, and such entries will be made in accordance with GAAP
and applicable law. The Borrower will maintain an operating account with the
Lender.
5.12 Use of Proceeds. The proceeds of the Term Loan will be used by the
Borrower solely for the purpose of refinancing the Borrower's existing
Indebtedness to Bank of America in the amount of approximately $8,000,000 (as
specified in a payoff letter from Bank of America as of the Closing Date) and to
pay fees and closing costs relating thereto. The proceeds of Revolving Loans
will be used by Borrower solely for (i) ongoing working capital, (ii) issuance
of Letters of Credit (subject to the limitations set forth in Section 2.8),
(iii) maintenance of existing restaurant units, (iv) development and conversion
of new restaurant units, (v) share repurchases (subject to the limitations set
forth in Section 5.9), and (vi) for other general corporate purposes. No portion
of any Loans shall be used for the purpose of purchasing or carrying any "margin
security" or "margin stock" as such terms are used in Regulations U or X of the
Board of Governors of the Federal Reserve System.
5.13 Transactions with Affiliates. The Borrower will not, and will not
permit any other member of the Borrower Affiliated Group to, directly or
indirectly, enter into any transaction with any Affiliate except in the ordinary
course of business on terms that are no less favorable to the Borrower or such
member of the Borrower Affiliated Group than those which might be obtained at
the time in a comparable arm's-length transaction with any person who is not an
Affiliate.
5.14 No Amendments to Certain Documents. The Borrower will not, and will not
permit any other member of the Borrower Affiliated Group to, at any time cause
or permit any of the charter documents or other organizational documents of the
Borrower or any other member of the Borrower Affiliated Group to be modified,
amended or supplemented in any respect whatever without the express prior
written agreement, consent or approval of the Lender, except for immaterial
changes which could not reasonably be expected to adversely affect the Lender or
its rights hereunder.
5.15 Subsidiaries. The Borrower will, and will cause each other member of
the Borrowed Affiliated Group to, provide the Lender 30 days' prior written
notice of the
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formation after the date hereof of any Subsidiary. The Borrower will, and will
cause each other member of the Borrowed Affiliated Group to, cause any such
Subsidiary to engage in the business of conducting branches or divisions of the
business now conducted by the member of the Borrower Affiliated Group that is
its parent. The Borrower will and shall cause each other member of the Borrower
Affiliated Group to, at the direction of the Lender, cause each such Subsidiary
to become a party to such of the Security Documents as the Lender shall require.
5.16 Financial Covenants.
5.16(a) Maximum Consolidated Leverage Ratio. The Borrower shall not
permit the ratio of Consolidated Funded Indebtedness to Consolidated EBITDA to
exceed: (i) 2.0 to 1.00 as of the last day of each of the fiscal quarters ending
on June 30, September 30 and December 31, 2001 (as determined at the end of each
such fiscal quarter for the four consecutive quarters then ending); and (ii) 1.5
to 1.00 as of the last day of each fiscal quarter ending on or after March 31,
2002 (as determined at the end of each such fiscal quarter for the four quarters
then ending).
5.16(b) Minimum Quarterly EBITDA; Minimum Trailing Four Quarters
EBITDA. Commencing with the fiscal quarter of the Borrower Affiliated Group
ending on June 30, 2001 and as measured on a quarterly basis thereafter, the
Borrower shall not permit Consolidated EBITDA (i) to be less than $900,000 for
any single fiscal quarter, (ii) to be less than $4,400,000 for the four
consecutive fiscal quarters ending on each of June 30, 2001 and September 30,
2001, and (iii) to be less than $4,500,000 for any four consecutive fiscal
quarters thereafter.
5.16(c) Minimum Consolidated Cash Flow Coverage. The Borrower shall
not permit as at the end of any fiscal quarter, for the four consecutive fiscal
quarters then ending, the ratio of (i) Consolidated Cash Flow for such period to
(ii) Consolidated Financial Obligations for such period to be less than 1.50 to
1.0.
5.16(d) Consolidated EBITDAR/Consolidated Financial Obligations Plus
Rental Expense. Commencing with the fiscal quarter of the Borrower Affiliated
Group ending on June 30, 2001, the Borrower shall not permit the ratio of (a)
Consolidated EBITDAR for any period of four consecutive fiscal quarters to (b)
Consolidated Financial Obligations plus rental expense (including all, if any,
percentage rent and other monetary obligations under each real property Lease to
which any member of the Borrower Affiliated Group is a party) for such
four-quarter period to be less than 1.40 to 1.00.
5.16(e) Maximum Consolidated Capital Expenditures. The Borrower shall
not permit the amount of Consolidated Capital Expenditures in any period to
exceed the lesser of (a) the amount specified opposite such period in the table
set forth below and (b) an amount, to be recalculated by the Borrower quarterly,
which, when added to current Consolidated Funded Indebtedness, would result in a
Consolidated Leverage Ratio less than or equal to the maximum ratio permitted
under Subsection 5.16(a);
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provided, however, that with respect to the maximum amounts reflected in the
table set forth below, in any given fiscal year up to 25% of the unused portion
of such amount may be carried over to the next fiscal year, subject in all cases
to the restriction set forth in clause (b) above.
----------------------------------------------------
PERIOD MAXIMUM AMOUNT
----------------------------------------------------
Fiscal Year 2001 $1,750,000
----------------------------------------------------
Fiscal Year 2002 $1,750,000
----------------------------------------------------
Fiscal Year 2003 $2,000,000
----------------------------------------------------
Fiscal Year 2004 and Thereafter $2,000,000
----------------------------------------------------
5.17 Limitation on Commitments to Develop New Restaurant Units.
Notwithstanding anything to the contrary stated in this Agreement, the Borrower
shall refrain, and shall cause each other member of the Borrower Affiliated
Group to refrain, from making capital expenditures for, or from any entering
into any legal commitment to, develop any new restaurant unit at any time when
either or both of the following conditions shall exist: (a) more than 10% of the
operating restaurant units then open for a period of 120 days or more have
trailing four-quarter negative cash flow (or, with respect to any such unit open
for at least 120 days but less than four complete fiscal quarters, has negative
cash flow as measured from the date of opening), or (b) the Consolidated
Leverage Ratio calculated most recently pursuant to Subsection 5.16(a) above is
equal to or greater than 1.75 to 1.0.
5.18 Environmental Indemnification. The Borrower covenants and agrees that
it will, and will cause each other member of the Borrower Affiliated Group to,
indemnify and hold the Lender harmless from and against any and all claims,
expense, damage, loss or liability incurred by the Lender in connection with
environmental matters with respect to the Real Properties, except those arising
from the gross negligence or willful misconduct of Lender. It is expressly
acknowledged by the Borrower that the foregoing indemnification shall survive
any foreclosure or any modification, release or discharge of any or all of the
Security Documents or the payment of the Loans or the Letters of Credit, and
shall inure to the benefit of the Lender and its respective successors and
assigns. The obligations under this Section 5.18 shall constitute "Obligations"
for all purposes of the Security Documents.
5.19. Leases. The Borrower shall, and shall cause each other member of the
Borrower Affiliated Group to, use its best efforts to cause the landlord of any
Real Property leased by the Borrower or such other member of the Borrower
Affiliated Group which contains books and records of the Borrower or any other
member of the Borrower Affiliated Group, or any Collateral having an aggregate
value in excess of $50,000, to deliver to the Lender, at the option of the
Lender, a Landlord Waiver simultaneously with the execution of any Lease of such
Real Property.
5.20 Further Assurances. The Borrower shall, and shall cause each other
member of the Borrower Affiliated Group to, do, make, execute and deliver all
such additional and further acts, things, assurances, and instruments as the
Lender may reasonably require
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more completely to vest in and assure to the Lender its rights hereunder and
under the other Security Documents, in the Collateral and to carry into effect
the provisions and intent of this Agreement and the other Security Documents
ARTICLE 6. EVENTS OF DEFAULT; LENDER'S RIGHTS.
6.1 Events of Default. The following shall constitute events of default
(individually, an "EVENT OF DEFAULT"):
(a) the Borrower shall fail to pay (i) any amount of principal of
any Loans when due or (ii) any amount of interest thereon or any fees or
expenses payable hereunder or under any Note or any other Security Document
within 3 days after the due date therefor; or
(b) the Borrower or any other member of the Borrower Affiliated
Group shall fail to perform, comply with or observe or shall otherwise breach
any one or more of the terms, obligations, covenants or agreements contained in
Sections 5.1, 5.2, 5.3 (with respect to maintenance of insurance only), 5.5
through 5.9, inclusive, 5.11 through 5.20, inclusive or Section 8.4; or
(c) the Borrower or any other member of the Borrower Affiliated
Group shall fail to perform, comply with or observe or shall otherwise breach
any one or more of the terms, covenants, obligations or agreements (other than
in respect of subsections 6.1(a) and (b) hereof) contained in this Agreement or
in any other Security Document and such failure shall continue for 30 days; or
(d) any representation or warranty of the Borrower or any other
member of the Borrower Affiliated Group made in any Security Document or any
other documents or agreements executed in connection with the transactions
contemplated by this Agreement or in any certificate delivered hereunder shall
prove to have been false in any material respect upon the date when made or
deemed to have been made; or
(e) the Borrower or any other member of the Borrower Affiliated
Group shall fail to pay at maturity, or within any applicable period of grace
(not to exceed 30 days), any obligations for borrowed monies or advances (other
than advances deemed to be made from trade creditors in the ordinary course of
business) in excess of $100,000, or fail to observe or perform any term,
covenant or agreement evidencing or securing such obligations for borrowed
monies or advances (other than advances deemed to be made from trade creditors
in the ordinary course of business) in excess of $100,000, the result of which
failure is to permit the holder or holders of such Indebtedness to cause such
Indebtedness to become due prior to its stated maturity upon delivery of
required notice, if any, or to permit any party to any agreement evidencing such
obligations to terminate or cancel such agreement; or
(f) the Borrower or any other member of the Borrower Affiliated
Group shall (i) apply for or consent to the appointment of, or the taking of
possession by, a receiver,
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custodian, trustee, liquidator or similar official of itself or of all or a
substantial part of its property, (ii) be generally not paying its debts as such
debts become due or be deemed unable to pay its debts as they fall due or admit
its inability to pay its debts as they fall due or a moratorium shall be
declared in respect of its indebtedness, (iii) make a general assignment for the
benefit of its creditors or composition or arrangement with its creditors
generally, (iv) commence a voluntary case under the Federal Bankruptcy Code (as
now or hereafter in effect), (v) take any action or commence any case or
proceeding under any law relating to bankruptcy, insolvency, reorganization,
winding-up or composition or adjustment of debts, or any other law providing for
the relief of debtors, (vi) fail to contest in a timely or appropriate manner,
or acquiesce in writing to, any petition filed against it in an involuntary case
under the Federal Bankruptcy Code (as now or hereafter in effect) or other law,
(vii) take any action under the laws of its jurisdiction of incorporation or
organization similar to any of the foregoing, (viii) be Insolvent, or (ix) pass
any board resolution or take any corporate action for the purpose of effecting
any of the foregoing; or
(g) a proceeding or case shall be commenced, without the
application or consent of the Borrower or other member of the Borrower
Affiliated Group in any court of competent jurisdiction, or a petition shall be
presented or meeting convened or application or order made or meeting convened
to pass a resolution or a resolution is passed seeking or regarding (i) the
liquidation, reorganization, dissolution (except the dissolution of La Buena
Agency Inc. so long as any and all assets of La Buena Agency Inc. have been
transferred to a member of the Borrower Affiliated Group prior to such
dissolution), winding up, or composition or readjustment of its debts, (ii) the
appointment of a trustee, receiver, custodian, liquidator, administrator,
administrative receiver or the like of it or of all or any substantial part of
its assets or the making of an administration order, or (iii) similar relief in
respect of it, under any law relating to bankruptcy, insolvency, reorganization,
winding-up or composition or adjustment of debts or any other law providing for
the relief of debtors, and shall continue undismissed, or unstayed and in
effect, for a period of 60 days; or an order for relief shall be entered in an
involuntary case under the Federal Bankruptcy Code (as now or hereafter in
effect), against the Borrower or any other member of the Borrower Affiliated
Group; or action under the laws of the jurisdiction of incorporation or
organization of the Borrower or any other member of the Borrower Affiliated
Group similar to any of the foregoing shall be taken with respect to the
Borrower or any such member of the Borrower Affiliated Group and shall continue
unstayed and in effect for any period of 60 days; or
(h) judgments or orders for the payment of money shall be entered
against the Borrower or any other member of the Borrower Affiliated Group by any
court, or a warrant of attachment or execution or similar process shall be
issued or levied against property of the Borrower or any other member of the
Borrower Affiliated Group, that in the aggregate exceed $100,000 in value
(except to the extent fully covered by insurance and the insurance carrier has
not reserved the right to disallow such claim) and such judgments, orders,
warrants or process shall continue undischarged or unstayed for 30 days; or
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(i) the Borrower, any other member of the Borrower Affiliated
Group shall fail to pay when due an aggregate amount in excess of $100,000 which
it shall have become liable to pay to the PBGC or to a Plan under Title IV of
ERISA; or notice of intent to terminate a Plan or Plans shall be filed under
Title IV of ERISA by the Borrower or any other member of the Borrower Affiliated
Group, any plan administrator or any combination of the foregoing; or the PBGC
shall institute proceedings under Title IV of ERISA to terminate or to cause a
trustee to be appointed to administer any such Plan or Plans or a proceeding
shall be instituted by a fiduciary of any such Plan or Plans against the
Borrower or any other member of the Borrower Affiliated Group and such
proceedings shall not have been dismissed within 30 days thereafter; or a
condition shall exist by reason of which the PBGC would be entitled to obtain a
decree adjudicating that any such Plan or Plans must be terminated; or
(j) the Borrower or any other member of the Borrower Affiliated
Group shall be enjoined, restrained or in any way prevented by the order of any
court or any administrative or regulatory agency from conducting any material
part of its business and such order shall continue in effect for more than 30
days, or the Borrower or any other member of the Borrower Affiliated Group shall
be indicted for a state or federal crime, or any criminal action shall otherwise
have been brought against the Borrower or any other member of the Borrower
Affiliated Group, a punishment for which in any such case could reasonably be
expected to include forfeiture of any assets of the Borrower Affiliated Group
having a fair market value in excess of $100,000; or
(k) there shall occur any material damage to, or loss, theft or
destruction of, any Collateral which is not insured, or any strike, lockout,
labor dispute, embargo, condemnation, act of God or public enemy, or other
casualty, which in any such case causes, for more than 45 consecutive days, the
cessation or substantial curtailment of revenue producing activities at any
facility of the Borrower or any other member of the Borrower Affiliated Group if
such event or circumstance is not covered by business interruption insurance and
could reasonably be expected to have a material adverse effect on the business,
condition (financial or otherwise), assets, operations or prospects of the
Borrower Affiliated Group taken as a whole; or
(l) there shall occur the loss, suspension or revocation of, or
failure to renew, any license or permit now held or hereafter acquired if such
loss, suspension, revocation or failure to renew could reasonably be expected to
have a material adverse effect on the business, financial condition, assets,
operations or prospects of the Borrower Affiliated Group taken as a whole; or
(m) any covenant, agreement or obligation of the Borrower or any
other member of the Borrower Affiliated Group contained in or evidenced by any
Security Document to which the Borrower or such member of the Borrower
Affiliated Group is a party shall, prior to the date on which such document
shall terminate with the express prior written agreement, consent or approval of
the Lender, cease in any material respect to be legal, valid, binding or
enforceable in accordance with the terms thereof; or
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(n) any Security Document shall be canceled, terminated, revoked
or rescinded (or any notice of such cancellation, termination, revocation or
rescission given) otherwise than with the express prior written agreement,
consent or approval of the Lender; or any action at law, suit in equity or other
legal proceeding to cancel, revoke, or rescind any Security Document shall be
commenced by or on behalf of the Borrower or any other member of the Borrower
Affiliated Group, or by any court or any other governmental or regulatory
authority or agency of competent jurisdiction; or any court or any other
governmental or regulatory authority or agency of competent jurisdiction shall
make a determination that, or shall issue a judgment, order, decree or ruling to
the effect that, any one or more of the Security Documents or any one or more of
the obligations of the Borrower or any other member of the Borrower Affiliated
Group under any one or more of the Security Documents are illegal, invalid or
unenforceable in accordance with the terms thereof; or
(o) (i) any Person or "group" (within the meaning of Section 13(d)
of the Securities Exchange Act of 1934, as amended) of Persons acting in concert
as a partnership or other group shall, as a result of a tender or exchange
offer, open market purchases, privately negotiated purchases or otherwise, have
become, after the date hereof, the "beneficial owner" (within the meaning of
such term under Rule 13d-3 under the Exchange Act) of securities of the Borrower
representing 30% or more of the combined voting power of the then outstanding
securities of the Borrower ordinarily (and apart from rights accruing under
special circumstances) having the right to vote in the election of directors;
(ii) the board of directors of the Borrower shall cease to consist of a majority
of the individuals who constituted the board of directors as of the date hereof
or who shall have become a member thereof subsequent to the date hereof after
having been nominated, or otherwise approved in writing, by at least a majority
of individuals who constituted the board of directors of the Borrower as of the
date hereof; or (iii) any change in equity ownership of any member of the
Borrower Affiliated Group other than the Borrower, except as may be expressly
permitted by Section 5.7.
6.2 Lender's Rights. If an Event of Default shall occur and be continuing,
the Lender may, at its option, (i) declare any or all of the Obligations of the
Borrower to the Lender to be immediately due and payable without further notice
or demand, whereupon the same shall become immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower, (ii) limit, suspend or terminate the Borrower's
right to borrow hereunder, and (iii) exercise any rights and remedies under the
Security Documents and law; provided that in the event of any Event of Default
specified in Subsections 6.1(f) or 6.1(g), all Obligations shall become
immediately due and payable automatically and without any requirement of notice
from the Lender or action by the Lender.
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ARTICLE 7. SET OFF; PARTICIPATIONS.
7.1. Right of Set Off. If an Event of Default shall have occurred, and while
it is continuing, any deposits or other sums at any time credited by or due from
the Lender or any entity under the control of Fleet Financial Group, Inc. to the
Borrower may, without demand or notice (any such demand or notice being
expressly waived hereby) and to the fullest extent permitted by law and without
regard to any source of payment whatsoever, at any time be applied to or set off
against Obligations on which the Borrower is primarily liable and may at or
after the maturity thereof be applied to or set off against Obligations on which
the Borrower is secondarily liable, and advice thereof shall thereafter be given
to the Borrower's chief financial officer.
7.2 Rights of Participants. For so long as any Obligation remains
outstanding, the Borrower offers to any financing institution which may consider
investing or participating in the Loans (each such financing institution being
referred to in this subsection as a "PARTICIPANT") the right to rely upon all of
the representations, warranties, covenants and other provisions of this
Agreement, the Notes and the other agreements, instruments and documents
referred to herein or contemplated hereby in making such investment or
participation. The Borrower agrees the decision of any Participant to invest or
participate in the Loans shall constitute an acceptance of such offer and shall
make the Participant a creditor of the Borrower and each other member of the
Borrower Affiliated Group. Any Participant may exercise the rights of set-off
granted to the Lender in this Article 7 with respect to any outstanding
indebtedness of the Borrower or any other member of the Borrower Affiliated
Group to such Participant hereunder in accordance with Lender's customary
practice.
ARTICLE 8. MISCELLANEOUS PROVISIONS.
8.1 Written Notices. Except as otherwise provided herein or in any other Loan
Document with respect to oral notice, any notices to any party hereto shall be
deemed to have been given when delivered by hand, when sent by telecopier, when
delivered to any overnight delivery service freight pre-paid or when sent by
certified or registered mail and receipt thereof has been acknowledged (or
rejected), and addressed to such party at its address set forth below.
If to the Borrower, to with a copy to:
Mexican Restaurants, Inc. Xxxxx Xxxxxx & Xxxx XXX
0000 Xxxxxxxxx 0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000-0000 Xxxxxx, XX 00000-0000
Attn: Xxxxxx Xxxxxxx Attn: Xxxx Xxxxxxx, Esq.
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If to the Lender, to with a copy to:
Fleet National Bank Goulston & Storrs, P.C.
000 Xxxxxxx Xxxxxx 000 Xxxxxxxx Xxxxxx
Mail Stop: MA DE 10008H Xxxxxx, XX 00000-0000
Xxxxxx, XX 00000 Attn: Xxxxxx X. Xxxxxx, Esq.
Attn: Xxxxxxxxx X. Xxxxx
Any notice, unless otherwise specified, must be given in writing. Any party may
change its address for such notices to such other address in the United States
as the addressee shall have specified by written notice given as set forth
above. All periods of notice shall be measured from the deemed date of delivery.
8.2 No Waivers. No failure or delay by the Lender in exercising any right,
power or privilege hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided are cumulative and not exclusive of any rights or
remedies otherwise provided by law.
8.3 GOVERNING LAW. THIS AGREEMENT AND THE OTHER SECURITY DOCUMENTS SHALL BE
DEEMED TO BE CONTRACTS MADE UNDER SEAL AND SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS (WITHOUT REGARD TO
CONFLICTS OF LAWS RULES). ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OBLIGATION MAY BE INSTITUTED IN THE COURTS OF
THE COMMONWEALTH OF MASSACHUSETTS OR OF THE UNITED STATES OF AMERICA FOR THE
DISTRICT OF MASSACHUSETTS, AND THE BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF EACH SUCH COURT IN ANY SUCH ACTION OR PROCEEDING; PROVIDED,
HOWEVER, THAT THE FOREGOING SHALL NOT LIMIT THE LENDER'S RIGHTS TO BRING ANY
LEGAL ACTION OR PROCEEDING IN ANY OTHER APPROPRIATE JURISDICTION.
8.4 EXPENSES, TAXES AND INDEMNIFICATION.
8.4.1 THE BORROWER SHALL PAY ON DEMAND AND INDEMNIFY AND HOLD THE
LENDER HARMLESS AGAINST ALL TAXES (OTHER THAN TAXES ON THE INCOME OF THE
LENDER), CHARGES AND EXPENSES OF EVERY KIND OR DESCRIPTION, INCLUDING WITHOUT
LIMITATION REASONABLE ATTORNEYS' FEES AND EXPENSES AND THE COSTS AND EXPENSES OF
FIELD AUDITS AND COMMERCIAL FINANCE EXAMS (WHICH SUCH AUDITS AND COMMERCIAL
FINANCE EXAMS SHALL, PRIOR TO THE OCCURRENCE OF A DEFAULT OR EVENT OF DEFAULT,
BE LIMITED TO TWICE A YEAR),
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REASONABLY INCURRED OR EXPENDED BY THE LENDER IN CONNECTION WITH OR IN ANY WAY
RELATED TO THE LENDER'S RELATIONSHIP WITH THE BORROWER OR ANY OTHER MEMBER OF
THE BORROWER AFFILIATED GROUP, WHETHER HEREUNDER OR OTHERWISE, INCLUDING,
WITHOUT LIMITATION, THOSE INCURRED OR EXPENDED IN CONNECTION WITH THE
PREPARATION, EXECUTION, DELIVERY, INTERPRETATION OR AMENDMENT OF THIS AGREEMENT,
THE SECURITY DOCUMENTS AND ANY RELATED AGREEMENT, INSTRUMENT OR DOCUMENT, THE
MAKING OF THE LOANS, THE SUPERVISION, PROTECTION AND COLLECTION OF AND
REALIZATION UPON ANY COLLATERAL, AND THE PROTECTION OR ENFORCEMENT OF THE
LENDER'S RIGHTS HEREUNDER AND UNDER THE OTHER SECURITY DOCUMENTS.
8.4.2 THE BORROWER SHALL ABSOLUTELY AND UNCONDITIONALLY INDEMNIFY
AND HOLD THE LENDER HARMLESS AGAINST ANY AND ALL CLAIMS, DEMANDS, SUITS,
ACTIONS, CAUSES OF ACTION, DAMAGES, LOSSES, SETTLEMENT PAYMENTS, OBLIGATIONS,
COSTS, EXPENSES AND ALL OTHER LIABILITIES WHATSOEVER WHICH SHALL AT ANY TIME OR
TIMES BE INCURRED OR SUSTAINED BY THE LENDER OR BY ANY OF ITS SHAREHOLDERS,
DIRECTORS, OFFICERS, EMPLOYEES, SUBSIDIARIES, AFFILIATES OR AGENTS (EXCEPT ANY
OF THE FOREGOING INCURRED OR SUSTAINED AS A RESULT OF THE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF THE LENDER) ON ACCOUNT OF, OR IN RELATION TO, OR IN ANY
WAY IN CONNECTION WITH, ASSOCIATED WITH OR ANCILLARY TO THIS AGREEMENT, THE
SECURITY DOCUMENTS AND THE OTHER DOCUMENTS EXECUTED OR DELIVERED IN CONNECTION
HEREWITH, AND THE ARRANGEMENTS OR TRANSACTIONS CONTEMPLATED THEREIN, WHETHER OR
NOT ALL OR ANY OF THE TRANSACTIONS CONTEMPLATED BY, ASSOCIATED WITH OR ANCILLARY
TO THIS AGREEMENT OR ANY OF SUCH DOCUMENTS ARE ULTIMATELY CONSUMMATED. WITHOUT
PREJUDICE TO THE SURVIVAL OF ANY OTHER COVENANT OF THE BORROWER HEREUNDER, THE
COVENANTS OF THIS SUBSECTION 8.4.2 SHALL SURVIVE THE TERMINATION OF THIS
AGREEMENT AND THE PAYMENT OR SATISFACTION OF PAYMENT OF AMOUNTS OWING WITH
RESPECT TO THE NOTES OR ANY OTHER SECURITY DOCUMENT.
8.5 Amendments, Waivers, Etc. This Agreement, the Notes and the Security
Documents, and any provision hereof or thereof may be waived, discharged or
terminated only by an instrument in writing signed by the Lender and may be
amended only by an instrument in writing signed by both the Borrower and the
Lender.
8.6 Binding Effect of Agreement. This Agreement shall be binding upon and
inure to the benefit of the Borrower and the Lender and their respective
successors and assigns. The Lender shall have the unrestricted right at any time
or from time to time, and without the Borrower's consent, to assign (or
participate) all or any portion of its rights and
-41-
obligations hereunder to one or more banks or other financial institutions
(each, an "ASSIGNEE"), and the Borrower agrees that it shall execute, or cause
to be executed, such documents, including without limitation, amendments to this
Agreement and to any other documents, instruments and agreements executed in
connection herewith as the Lender shall deem necessary to effect the foregoing,
provided that (i) so long as no Default or Event of Default has occurred and is
continuing, the Lender will make any such assignment or participation in a
minimum amount of $1,000,000 and will get the Borrower's consent thereto, such
consent not to be unreasonably withheld or delayed (it being agreed that no such
consent shall be required in connection with a pledge of all or any portion of
its rights under the Loan Documents to any of the 12 Federal Reserve Banks
organized under ss.4 of the Federal Reserve Act, 12 U.S.C. Section 341, no such
pledge or the enforcement thereof to release the Lender from its obligations
under any of the Loan Documents), and (ii) with respect to any such
participation, the Borrower shall be permitted to make payments to and otherwise
deal solely with the Lender (it being acknowledged that the participant may have
certain voting rights pursuant to the particular participation arrangement). In
addition, at the request of the Lender and any such Assignee, the Borrower shall
issue one or more new promissory notes, as applicable, to any such Assignee and,
if the Lender has retained any of its rights and obligations hereunder following
such assignment, to the Lender, which new promissory notices shall be issued in
replacement of, but not in discharge of, the liability evidenced by the
promissory note held by the Lender prior to such assignment and shall reflect
the amount of the respective commitments and loans held by such Assignee and the
Lender after giving effect to such assignment. Upon the execution and delivery
of appropriate assignment documentation, amendments and any other documentation
required by the Lender in connection with such assignment, and the payment by
the Assignee of the purchase price agreed to by the Lender and such Assignee,
such Assignee shall be a party to this Agreement and shall have all of the
rights and obligations of a Lender hereunder (and under any and all other
documents, instruments and agreements executed in connection herewith) to the
extent that such rights and obligations have been assigned by the Lender
pursuant to the assignment documentation between the Lender and such Assignee,
and the Lender shall be released from its obligations hereunder and thereunder
to a corresponding extent. Without limitation of the foregoing, the Lender may
at any time pledge all or any portion of its rights under the Security Documents
including any portion of either Note to any of the 12 Federal Reserve Banks
organized under Section 4 of the Federal Reserve Act, 12 U.S.C. Section 341. No
such pledge or enforcement thereof shall release the Lender from its obligations
under any of the Security Documents. The Borrower may not assign or transfer its
rights or obligations hereunder.
8.7 Computation of Interest and Fees, Etc. Interest, fees and charges shall
be computed daily on the basis of a year of 360 days and paid for the actual
number of days for which due. If the due date for any payment of principal is
extended by operation of law, interest shall be payable for such extended time.
If any payment required by this Agreement becomes due on a day on which banks in
Boston, Massachusetts are required or permitted by law or an appropriate
authority to remain closed, such payment may be made on the next succeeding day
on which such banks are open, and such extension shall be included
-42-
in computing interest in connection with such payment. All payments required of
the Borrower hereunder or under the Notes shall be made in lawful money of the
United States of America in federal or other funds immediately available to the
recipient thereof at the prescribed place of payment.
8.8 Entire Agreement. This Agreement, including the exhibits hereto, sets
forth the entire agreement and understanding of the parties hereto in respect of
the subject matter contained herein, and supersedes all prior agreements,
promises, covenants, arrangements, communications, representations, warranties,
whether oral or written, by any officer, employee or representative of any party
hereto.
8.9 Headings. The headings for the sections of this Agreement are for ease
of reference only and are not an integral part of this Agreement. Accordingly,
such headings shall have no relevance to the interpretation of this Agreement.
8.10 Multiple Counterparts. This Agreement may be signed in any number of
counterparts with the same effect as if the signatures hereto and thereto were
upon the same instrument. All such counterparts shall together constitute one
and the same agreement.
8.11 Severability. The provisions of this Agreement are severable, and if
any of these provisions shall be held by any court of competent jurisdiction to
be unenforceable, such holdings shall not affect or impair any other provision
hereof.
8.12 WAIVER OF JURY TRIAL. EACH OF THE BORROWER AND THE LENDER HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN
RESPECT OF ANY CLAIM BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENTS CONTEMPLATED TO BE EXECUTED IN
CONNECTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO. THIS WAIVER
CONSTITUTES A MATERIAL INDUCEMENT FOR LENDER TO EXECUTE THIS AGREEMENT AND MAKE
THE LOANS.
8.13. WAIVER OF SPECIAL DAMAGES. EXCEPT AS PROHIBITED BY LAW, THE BORROWER
HEREBY WAIVES ANY RIGHTS WHICH IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION
WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION
WITH THE SECURITY DOCUMENTS, INCLUDING WITHOUT LIMITATION THIS AGREEMENT, THE
NOTE AND THE OTHER SECURITY DOCUMENTS AND ANY AMENDMENTS THEREOF, ANY SPECIAL
EXEMPLARY OR PUNITIVE DAMAGES. THE BORROWER (A) CERTIFIES THAT NEITHER THE
LENDER NOR ANY REPRESENTATIVE, AGENT OR ATTORNEY THEREOF HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT THE LENDER WOULD
-43-
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (B)
ACKNOWLEDGES THAT, IN ENTERING INTO THIS AGREEMENT, THE LENDER IS RELYING UPON,
AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION
8.13.
8.14. Usury. All agreements between the Borrower and the Lender are hereby
expressly limited so that in no contingency or event whatsoever, whether by
reason of acceleration of maturity of the indebtedness evidenced hereby or
otherwise, shall the amount paid or agreed to be paid to the Lender for the use
or the forbearance of the indebtedness evidenced hereby exceed the maximum
permissible under applicable law. As used herein, the term "applicable law"
shall mean the law in effect as of the date hereof provided, however, that in
the event there is a change in the law which results in a higher permissible
rate of interest then the Revolving Credit Note and the Term Note shall be
governed by such new law as of its effective date. In this regard, it is
expressly agreed that it is the intent of the Borrower and the Lender in the
execution, delivery and acceptance of the Revolving Credit Note and the Term
Note to contract in strict compliance with the laws of the Commonwealth of
Massachusetts from time to time in effect. If, under or from any circumstances
whatsoever, fulfillment of any provision hereof or of any of the Loan Documents
at the time of performance of such provision shall be due, shall involve
transcending the limit of such validity prescribed by applicable law, then the
obligation to be fulfilled shall automatically be reduced to the limits of such
validity, and if under or from circumstances whatsoever the Lender should ever
receive as interest an amount which would exceed the highest lawful rate, such
amount which would be excessive interest shall be applied to the reduction of
the principal balance evidenced hereby and not to the payment of interest. This
provision shall control every other provision of all agreements between the
Borrower and the Lender.
8.15 Replacement of Notes and Other Loan Documents. Upon receipt of an
affidavit of an officer of the Lender as to the loss, theft, destruction or
mutilation of the Revolving Credit Note, the Term Note, or any other Security
Document which is not of public record, and, in the case of any such loss,
theft, destruction or mutilation, upon cancellation of such Revolving Credit
Note, Term Note or other Security Document, and execution and delivery of an
appropriate indemnification agreement by the Bank in favor of the Borrower
relating thereto, the Borrower will issue, in lieu thereof, a replacement
Revolving Credit Not, Term Note or other Security Document in the same principal
amount thereof and otherwise of like tenor.
[Remainder of Page Intentionally Left Blank]
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WITNESS the execution hereof under seal on the day and year first above
written.
BORROWER: LENDER:
MEXICAN RESTAURANTS, INC. FLEET NATIONAL BANK
By: By:
------------------------------- ----------------------------------
Name: Name:
Title: Title:
-00-
X-0-0
XXXXXXX X-0
FORM OF REVOLVING CREDIT NOTE
[To be inserted]
X-0-0
XXXXXXX X-0
XXXX XX XXXX NOTE
[To be inserted]
A-2-1
EXHIBIT B
DISCLOSURE
[To be prepared by Borrower]
B-1
EXHIBIT C
EXISTING INDEBTEDNESS
[To be prepared by Borrower]
C-1
EXHIBIT D
FORM OF NOTICE OF BORROWING
D-1
EXHIBIT E
FORM OF CERTIFICATE OF CHIEF FINANCIAL OFFICER
MEXICAN RESTAURANTS, INC. ("BORROWER") HEREBY CERTIFIES THAT:
This Certificate is furnished pursuant to Section 5.1(e) of the Loan
Agreement dated as of June 30, 2001 between Borrower and Fleet National Bank
(the "AGREEMENT"). Unless otherwise defined herein, the terms used in this
Certificate and Schedule 1 attached hereto have the meanings described in the
Agreement.
As required by Section 5.1(a) or (b) of the Agreement, Consolidated
financial statements of Borrower Affiliated Group for the (year) (quarter)
ended_________, 20_ (the "FINANCIAL STATEMENTS") prepared in accordance with
GAAP (subject, in the case of quarterly statements, to normal year-end audit
adjustments, none of which are materially adverse) accompany this Certificate.
The Financial Statements present fairly the financial position of Borrower
Affiliated Group as at the date thereof and the results of operations of
Borrower Affiliated Group for the period covered thereby.
Schedule 1 attached hereto sets forth financial data and computations
evidencing compliance with the covenants of the Agreement set forth in Section
5.16, all of which data and computations, to the best of the knowledge and
belief of the chief financial officer ("CHIEF FINANCIAL OFFICER") executing and
delivering this Certificate on behalf of Borrower, are true, complete and
correct.
The activities of Borrower Affiliated Group during the period covered
by the Financial Statements have been reviewed by the Chief Financial Officer
and by employees or agents under his immediate supervision. Based on such
review, to the best knowledge and belief of the Chief Financial Officer, during
the period covered by the Financial Statements, and as of the date of this
Certificate, (a) Borrower has, or has caused to have, kept, observed, performed
and fulfilled each and every covenant and condition of the Agreement (except to
the extent waived by the Lender and noted on Schedule 1 attached hereto) and the
Notes, and (b) no Default or Event of Default has occurred or is continuing.
Witness my hand this _____ day of __________, 2001.
MEXICAN RESTAURANTS, INC.
By:
---------------------------------
Title:
E-1
SCHEDULE 1
to
CERTIFICATE OF CHIEF FINANCIAL OFFICER
E-2
EXHIBIT F
FORM OF LEGAL OPINION OF
BORROWER'S COUNSEL
[To be inserted]
F-1
EXHIBIT G
CLOSING AGENDA
[To be inserted]
G-1
