EXHIBIT 10.55
EXECUTION COPY
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FOURTH AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
dated as of December 24, 1998
among
NATIONAL RESTAURANT ENTERPRISES, INC.,
AMERIKING, INC.
and
BANKBOSTON, N.A.
and those other lending institutions listed on Schedule 1 hereto
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and
BANKBOSTON, N.A., as Agent
with
BANCBOSTON XXXXXXXXX XXXXXXXX INC.,
acting as Arranger
TABLE OF CONTENTS
1. DEFINITIONS AND RULES OF INTERPRETATION....................................... 1
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1.1. Definitions....................................................... 1
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1.2. Rules of Interpretation........................................... 24
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2. THE REVOLVING CREDIT FACILITY................................................. 24
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2.1. Commitment to Lend................................................ 24
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2.2. Commitment Fee.................................................... 25
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2.3. Reduction of Total Commitment..................................... 25
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2.4. The Revolving Credit Notes........................................ 26
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2.5. Interest on Revolving Credit Loans................................ 26
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2.6. Requests for Revolving Credit Loans............................... 26
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2.7. Conversion Options................................................ 27
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2.7.1. Conversion to Different Type of Revolving Credit Loan..... 27
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2.7.2. Continuation of Type of Revolving Credit Loan............. 28
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2.7.3. Eurodollar Rate Loans..................................... 28
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2.8. Funds for Revolving Credit Loan................................... 28
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2.8.1. Funding Procedures........................................ 28
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2.8.2. Advances by Agent......................................... 29
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3. REPAYMENT OF THE REVOLVING CREDIT LOANS....................................... 29
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3.1. Maturity.......................................................... 29
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3.2. Mandatory Repayments of Revolving Credit Loans.................... 29
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3.3. Optional Repayments of Revolving Credit Loans..................... 30
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4. LETTERS OF CREDIT............................................................. 30
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4.1. Letter of Credit Commitments...................................... 30
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4.1.1. Commitment to Issue Letters of Credit..................... 30
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4.1.2. Letter of Credit Applications............................. 31
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4.1.3. Terms of Letters of Credit................................ 31
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4.1.4. Reimbursement Obligations of Banks........................ 31
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4.1.5. Participations of Banks................................... 31
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4.2. Reimbursement Obligation of the Borrower.......................... 31
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4.3. Letter of Credit Payments......................................... 32
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4.4. Obligations Absolute.............................................. 33
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4.5. Reliance by Issuer................................................ 33
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4.6. Letter of Credit Fee.............................................. 33
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5. CERTAIN GENERAL PROVISIONS.................................................... 34
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5.1. Closing Fee....................................................... 34
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5.2. Agent's Fee....................................................... 34
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5.3. Funds for Payments................................................ 34
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5.3.1. Payments to Agent......................................... 34
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5.3.2. No Offset, etc............................................ 34
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5.4. Computations....................................................... 35
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5.5. Inability to Determine Eurodollar Rate............................. 35
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5.6. Illegality......................................................... 35
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5.7. Additional Costs, etc.............................................. 35
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5.8. Capital Adequacy................................................... 38
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5.9. Certificate........................................................ 38
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5.10. Indemnity.......................................................... 38
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5.11. Interest on Overdue Amounts........................................ 39
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5.12. Replacement Banks.................................................. 39
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6. COLLATERAL SECURITY AND GUARANTEES............................................. 39
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6.1. Security of Borrower and Subsidiaries; Guaranty of Subsidiaries.... 39
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6.2. Guaranties and Security of Holdings................................ 40
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7. REPRESENTATIONS AND WARRANTIES................................................. 40
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7.1. Corporate Authority................................................ 40
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7.1.1. Incorporation; Good Standing............................... 40
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7.1.2. Authorization.............................................. 41
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7.1.3. Enforceability............................................. 41
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7.2. Governmental Approvals............................................. 41
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7.3. Title to Properties; Leases........................................ 41
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7.4. Financial Statements and Projections............................... 42
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7.4.1. Financial Statements....................................... 42
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7.4.2. Projections................................................ 42
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7.5. No Material Changes, etc........................................... 42
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7.6. Franchises, Patents, Copyrights, etc............................... 43
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7.7. Litigation......................................................... 43
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7.8. No Materially Adverse Contracts, etc............................... 43
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7.9. Compliance with Other Instruments, Laws, etc....................... 43
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7.10. Tax Status......................................................... 43
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7.11. No Event of Default................................................ 44
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7.12. Holding Company and Investment Company Acts........................ 44
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7.13. Absence of Financing Statements, etc............................... 44
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7.14. Perfection of Security Interest.................................... 44
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7.15. Certain Transactions............................................... 44
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7.16. Employee Benefit Plans............................................. 44
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7.16.1. In General................................................. 44
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7.16.2. Terminability of Welfare Plans............................. 45
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7.16.3. Guaranteed Pension Plans................................... 45
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7.16.4. Multiemployer Plans........................................ 45
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7.17. Regulations G, U and X............................................. 45
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7.18. Environmental Compliance........................................... 46
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7.19. Subsidiaries, etc.................................................. 47
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7.20. Chief Executive Offices............................................ 48
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7.21. Fiscal Year........................................................ 48
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7.22. No Amendments to Certain Documents................................. 48
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7.23. Disclosure......................................................... 48
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7.24. Insurance.......................................................... 48
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7.25. Year 2000 Issue.................................................... 48
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8. AFFIRMATIVE COVENANTS.......................................................... 49
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8.1. Punctual Payment................................................... 49
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8.2. Maintenance of Office.............................................. 49
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8.3. Records and Accounts............................................... 49
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8.4. Financial Statements, Certificates and Information................. 49
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8.5. Notices............................................................ 51
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8.5.1. Defaults................................................... 51
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8.5.2. Environmental Events....................................... 52
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8.5.3. Notification of Claim against Collateral................... 52
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8.5.4. Notice of Litigation and Judgments......................... 52
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8.6. Corporate Existence; Maintenance of Properties..................... 52
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8.7. Insurance.......................................................... 53
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8.8. Taxes.............................................................. 53
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8.9. Inspection of Properties and Books, etc............................ 53
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8.9.1. General.................................................... 53
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8.9.2. Communications with Accountants............................ 54
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8.9.3. Environmental Assessments.................................. 54
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8.10. Compliance with Laws, Contracts, Licenses, and Permits............. 55
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8.11. Employee Benefit Plans............................................. 55
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8.12. Use of Proceeds.................................................... 55
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8.13. Fair Labor Standards Act........................................... 56
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8.14. Further Assurances................................................. 56
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8.15. Mortgaged Property................................................. 56
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8.16. Class of Stock..................................................... 57
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8.17. Guarantees of AmeriKing Tennessee and AmeriKing Colorado........... 57
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8.18. Mortgage Amendment................................................. 57
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8.19. Title Insurance.................................................... 57
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9. CERTAIN NEGATIVE COVENANTS..................................................... 57
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9.1. Restrictions on Indebtedness....................................... 57
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9.2. Restrictions on Liens.............................................. 59
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9.3. Restrictions on Investments........................................ 61
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9.4. Distributions...................................................... 62
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9.5. Merger, Consolidation and Disposition of Assets.................... 63
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9.5.1. Mergers and Acquisitions................................... 63
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9.5.2. Disposition of Assets...................................... 64
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9.6. Sale and Leaseback................................................. 65
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9.7. Compliance with Environmental Laws................................. 65
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9.8. Subordinated Debt and Preferred Stock.............................. 66
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9.9. Employee Benefit Plans.................................................... 66
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9.10. Change in Terms of Capital Stock.......................................... 67
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9.11. Fiscal Year............................................................... 67
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9.12. Business Activities....................................................... 67
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9.13. Modification of Documents................................................. 67
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9.14. Negative Pledges.......................................................... 68
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9.15. Transactions with Affiliates.............................................. 68
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9.16. Upstream Limitations...................................................... 68
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9.17. Inconsistent Agreements................................................... 68
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9.18. Acquisition and Development Restrictions.................................. 68
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10. FINANCIAL COVENANTS.................................................................. 69
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10.1. Debt Service Coverage Ratio............................................... 69
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10.2. Interest Coverage Ratio................................................... 69
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10.3. Leverage Ratio............................................................ 69
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11. CLOSING CONDITIONS................................................................... 69
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11.1. Loan Documents etc........................................................ 70
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11.1.1. Loan Documents.................................................. 70
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11.1.2. Acquisition Documents........................................... 70
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11.2. Certified Copies of Charter Documents..................................... 70
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11.3. Corporate Action......................................................... 70
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11.4. Incumbency Certificate................................................... 70
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11.5. Validity of Liens........................................................ 70
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11.6. Perfection Certificates and UCC Search Results........................... 71
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11.7. Certificates of Insurance................................................ 71
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11.8. Solvency Certificate..................................................... 71
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11.9. Opinion of Counsel....................................................... 71
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11.10. Payment of Fees and other Arrangements................................... 71
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11.11. Disbursement Instructions................................................ 71
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11.12. Satisfaction of Conditions of Acquisition Documents...................... 71
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11.13. Completion of Acquisition................................................ 71
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11.14. Completion of Successful Financial Inquiry............................... 71
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11.15. Consents and Approvals................................................... 72
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11.16. Allocation Adjustments................................................... 72
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12. CONDITIONS TO ALL BORROWINGS......................................................... 72
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12.1. Representations True; No Event of Default................................ 72
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12.2. No Legal Impediment...................................................... 72
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12.3. Governmental Regulation.................................................. 72
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12.4. Proceedings and Documents................................................ 72
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12.5. Conditions to Advances of Revolving Credit Loans for Acquisitions........ 73
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12.5.1. Acquisition Documents........................................... 73
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12.5.2. Pro Forma Compliance............................................ 73
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12.5.3. Use of Proceeds................................................. 73
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13. EVENTS OF DEFAULT; ACCELERATION; ETC........................................... 73
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13.1. Events of Default and Acceleration................................. 73
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13.2. Termination of Commitments......................................... 77
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13.3. Remedies........................................................... 77
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13.4. Distribution of Collateral Proceeds................................ 77
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14. SETOFF......................................................................... 78
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15. THE AGENT...................................................................... 79
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15.1. Authorization...................................................... 79
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15.2. Employees and Agents............................................... 79
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15.3. No Liability....................................................... 79
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15.4. No Representations................................................. 79
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15.5. Payments........................................................... 80
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15.5.1. Payments to Agent....................................... 80
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15.5.2. Distribution by Agent................................. 80
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15.5.3. Delinquent Banks...................................... 80
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15.6. Holders of Revolving Credit Notes.................................. 81
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15.7. Indemnity.......................................................... 81
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15.8. Agent as Bank...................................................... 81
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15.9. Resignation........................................................ 81
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15.10. Notification of Defaults and Events of Default..................... 82
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15.11. Duties in the Case of Enforcement.................................. 82
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16. EXPENSES....................................................................... 82
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17. INDEMNIFICATION................................................................ 83
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18. SURVIVAL OF COVENANTS, ETC..................................................... 83
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19. ASSIGNMENT AND PARTICIPATION................................................... 83
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19.1. Conditions to Assignment by Banks.................................. 83
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19.2. Certain Representations and Warranties; Limitations; Covenants..... 84
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19.3. Register........................................................... 85
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19.4. New Revolving Credit Notes......................................... 86
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19.5. Participations..................................................... 86
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19.6. Disclosure......................................................... 86
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19.7. Assignee or Participant Affiliated with the Borrower............... 87
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19.8. Miscellaneous Assignment Provisions................................ 87
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19.9. Assignment by Borrower............................................. 87
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20. NOTICES, ETC................................................................... 87
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21. GOVERNING LAW.................................................................. 88
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22. HEADINGS....................................................................... 88
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23. COUNTERPARTS................................................................... 89
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24. ENTIRE AGREEMENT, ETC.......................................................... 89
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25. WAIVER OF JURY TRIAL........................................................... 89
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26. CONSENTS, AMENDMENTS, WAIVERS, ETC............................................. 89
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27. SEVERABILITY................................................................... 90
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28. TRANSITIONAL ARRANGEMENTS...................................................... 90
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28.1. Original Credit Agreement Superseded............................... 90
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28.2. Return and Cancellation of Revolving Credit Notes.................. 90
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28.3. Interest and Fees Under Superseded Agreement....................... 90
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EXHIBITS
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Exhibit A Form of Revolving Credit Note
Exhibit B Form of Revolving Credit Loan Request
Exhibit C Form of Compliance Certificate
Exhibit D Form of Assignment and Acceptance
Exhibit E Exemption Certificate
SCHEDULES
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Schedule 1 Commitments
Schedule 1A Mortgaged Properties
Schedule 7.3 Title to Properties; Leases
Schedule 7.7 Litigation
Schedule 7.15 Transactions with Affiliates
Schedule 7.18 Environmental Matters
Schedule 7.19 Joint Ventures/Partnerships
Schedule 7.20 Chief Executive Offices of Subsidiaries
Schedule 7.21 Fiscal Years
Schedule 7.24 Insurance
Schedule 9.1 Permitted Indebtedness
Schedule 9.2 Permitted Liens
Schedule 9.3 Permitted Investments
Schedule 9.6 Sale and Leaseback Transactions
Schedule 9.7 Environmental Compliance
FOURTH AMENDED AND RESTATED
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REVOLVING CREDIT AGREEMENT
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This FOURTH AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT is made as of
December 24, 1998, by and among AMERIKING, INC. ("Holdings"), a Delaware
corporation, NATIONAL RESTAURANT ENTERPRISES, INC. (the "Borrower"), a Delaware
corporation having its principal place of business at 0000 Xxxxxxxxxx Xxxxx,
Xxxxx 0000, Xxxxxxxxxxx, Xxxxxxxx 00000 and BANKBOSTON, N.A., a national banking
association and the other lending institutions listed on Schedule 1 and
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BANKBOSTON, N.A. as agent for itself and such other lending institutions.
WHEREAS, pursuant to a Third Amended and Restated Revolving Credit dated as
of June 17, 1997 (as amended from time to time, the "Original Credit
Agreement"), by and among Holdings, the Borrower, certain of the Banks (as
hereinafter defined) and the Agent (as hereinafter defined), the Banks party
thereto made available revolving credit loans to finance certain acquisitions
and for general corporate and working capital purposes; and
WHEREAS, the Borrower has requested, among other things, to amend and
restate the Original Credit Agreement and to provide additional financing, to
refinance certain Indebtedness (as hereinafter defined), to finance acquisitions
and development of BKC Restaurants (as hereinafter defined) in the future, and
for working capital and general corporate purposes, and the Banks are willing to
amend and restate the Original Credit Agreement and to provide such additional
financing on the terms and conditions set forth herein;
WHEREAS, the Borrower has requested that the Banks provide additional
financing solely to finance acquisitions and development of BKC Restaurants and
the Banks are willing to provide such financing on the terms and conditions set
forth in the Acquisition Revolving Credit Agreement executed simultaneously
herewith among Holdings, the Borrower, the Banks and the Agent (as may be
amended and in effect from time to time, the "Acquisition Credit Agreement")
NOW, THEREFORE, Holdings, the Borrower, the Banks and the Agent agree that
on the Closing Date the Original Credit Agreement is hereby amended and restated
in its entirety and shall remain in full force and effect only as set forth
herein.
1. DEFINITIONS AND RULES OF INTERPRETATION.
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1.1. Definitions. The following terms shall have the meanings set forth in
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this (S)1 or elsewhere in the provisions of this Credit Agreement referred to
below:
Acquisition Credit Agreement. As defined in the preamble hereto.
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Acquisition Loan Documents. The "Acquisition Loan Documents" as defined in
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the Acquisition Credit Agreement.
Acquisition Revolving Credit Loans. "Revolving Credit Loans" as defined in
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the Acquisition Credit Agreement.
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Acquisition Total Commitment. The "Total Commitment" as defined in the
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Acquisition Credit Agreement.
Adjustment Date. The first day of the month immediately following the
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month in which a Compliance Certificate is to be delivered by the Borrower
pursuant to (S)8.4(d).
Affected Bank. See (S)5.12 hereof.
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Affiliate. Any Person that would be considered to be an affiliate of the
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Borrower under Rule 144(a) of the Rules and Regulations of the Securities and
Exchange Commission, as in effect on the date hereof, if the Borrower was
issuing securities; provided, however, that the term "Affiliate" as it applies
to Holdings and its Subsidiaries shall not include JZEP.
Agent's Head Office. The Agent's head office located at 100 Federal
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Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, or at such other location as the Agent may
designate from time to time.
Agent. BankBoston, N.A. acting as agent for the Banks.
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Agent's Fee. See (S)5.2 hereof.
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Agent's Special Counsel. Xxxxxxx Xxxx LLP or such other counsel as may be
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approved by the Agent.
AmeriKing Cincinnati. AmeriKing Cincinnati Corporation I, formerly a
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Delaware corporation and wholly-owned Subsidiary of the Borrower which has been
merged into the Borrower.
AmeriKing Colorado. AmeriKing Colorado Corporation I, a Delaware
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corporation and wholly-owned Subsidiary of the Borrower.
AmeriKing/Xxxx Asset Purchase Agreement. The Asset Purchase Agreement
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dated as of November 28, 1998 between the Borrower and Xxxx, Inc., an Ohio
corporation.
AmeriKing/Xxxx Acquisition. The transaction in which the Borrower
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purchased certain of the assets of Xxxx, Inc. consisting of at least 12
restaurants pursuant to the AmeriKing/Xxxx Purchase Agreements on the
AmeriKing/Xxxx Acquisition Closing Date.
AmeriKing/Xxxx Acquisition Closing Date. The first date in which the
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conditions set forth in the AmeriKing/Xxxx Asset Purchase Agreement have been
satisfied.
AmeriKing/Xxxx Acquisition Documents. Collectively, the AmeriKing/Xxxx
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Asset Purchase Agreements and related bills of sale, instruments of assignment,
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leases, Franchise Agreements, and other documents, instruments and certificates
delivered in connection with any of the foregoing.
AmeriKing/Hamburgers Asset Purchase Agreements. The Asset Purchase
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Agreement dated as of November 20, 1998 between the Borrower and Hamburgers,
Inc., an Illinois corporation.
AmeriKing/Hamburgers Acquisition. The transaction in which the Borrower
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purchased certain of the assets of Hamburgers, Inc. consisting of 5 restaurants
pursuant to the AmeriKing/Hamburgers Purchase Agreement on the
AmeriKing/Hamburgers Acquisition Closing Date.
AmeriKing/Hamburgers Acquisition Closing Date. The first date in which the
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conditions set forth in the AmeriKing/Hamburgers Asset Purchase Agreement have
been satisfied.
AmeriKing/Hamburgers Acquisition Documents. Collectively, the
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AmeriKing/Hamburgers Asset Purchase Agreement and related Real Estate Purchase
Agreements, bills of sale, instruments of assignment, leases, Franchise
Agreements, and other documents, instruments and certificates delivered in
connection with any of the foregoing.
AmeriKing Illinois. AmeriKing Illinois Corporation I, formerly a Delaware
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corporation and wholly-owned Subsidiary of the Borrower which has been merged
into the Borrower.
AmeriKing NC. AmeriKing Carolina Corporation I, a Delaware corporation
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and, prior to its dissolution, a wholly-owned Subsidiary of the Borrower.
AmeriKing Tennessee. AmeriKing Tennessee Corporation I, a Delaware
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corporation and wholly-owned Subsidiary of the Borrower.
AmeriKing Virginia. AmeriKing Virginia Corporation I, formerly a Delaware
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Corporation and wholly-owned Subsidiary of the Borrower which has been merged
into the Borrower.
Applicable Margin. For each period commencing on an Adjustment Date
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through the date immediately preceding the next Adjustment Date (each a "Rate
Adjustment Period"), the Applicable Margin shall be the applicable margin set
forth below with respect to Holdings' Leverage Ratio, as determined for the
fiscal period of the Borrower and its Subsidiaries ending immediately prior to
the applicable Rate Adjustment Period.
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Letter
Base Rate Eurodollar Rate Commitment of Credit
Leverage Ratio Loans Loans Fees Fees
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Greater than 5.00:1.00 1.25% 2.75% 0.500% 2.75%
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Less than or equal to 5.00:1.00, 1.00% 2.50% 0.500% 2.50%
but greater than 4.50:1.00
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Less than or equal to 4.50:1.00 0.750% 2.25% 0.375% 2.25%
but greater than or equal to
3.50:100
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Less than 3.50:1.00 0.500% 2.00% 0.250% 2.00%
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Notwithstanding the foregoing, (a) the Applicable Margin for Revolving
Credit Loans outstanding, the Letter of Credit Fees and the commitment fee
payable during the period commencing on the Closing Date through the date
immediately preceding the first Adjustment Date to occur after the fiscal
quarter ending June 30, 1999 shall be the highest Applicable Margin set forth
above, and (b) if the Borrower fails to deliver any Compliance Certificate
pursuant to (S)8.4(d) hereof then, for the period commencing on the next
Adjustment Date to occur subsequent to such failure through the date immediately
following the date on which such Compliance Certificate is delivered, the
Applicable Margin shall be the highest Applicable Margin set forth above.
Assignment and Acceptance. See (S)19.1 hereof.
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Balance Sheet Date. September 30, 1998.
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Banks. BKB and the other lending institutions listed on Schedule 1 hereto
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and any other Person who becomes an assignee of any rights and obligations of a
Bank pursuant to (S)19.
Base Rate. The annual rate of interest announced from time to time by BKB
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at its head office in Boston, Massachusetts, as its "base rate".
Base Rate Loans. Revolving Credit Loans bearing interest calculated by
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reference to the Base Rate.
BBI. BancBoston Investments Inc., a Massachusetts corporation.
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BKB. BankBoston, N.A., a national banking association, in its individual
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capacity.
BKC. Burger King Corporation, a Florida corporation.
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BKC Restaurant. A quick service restaurant franchised by BKC that is
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located in the United States, its territories, or Canada.
BNB. BNB Land Venture, Inc., an Illinois corporation.
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Borrower. As defined in the preamble hereto.
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Borrower Stock Pledge Agreement. The Amended and Restated Stock Pledge
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Agreement, dated as of the date hereof, between the Borrower and the Agent, as
the same may be amended, restated, supplemented or modified and in effect from
time to time.
Business Day. Any day (other than Saturdays or Sundays) on which banking
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institutions in Boston, Massachusetts and Chicago, Illinois are open for the
transaction of banking business and, in the case of Eurodollar Rate Loans, also
a day which is a Eurodollar Business Day.
Capital Assets. Fixed assets, both tangible (such as land, buildings,
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fixtures, machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises and good will); provided that Capital Assets shall not
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include any item customarily charged directly to expense or depreciated over a
useful life of twelve (12) months or less in accordance with generally accepted
accounting principles.
Capital Expenditures. Amounts paid or indebtedness incurred by Holdings,
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the Borrower or any of their Subsidiaries in connection with the purchase or
lease by Holdings, the Borrower or any of their Subsidiaries of Capital Assets
that would be required to be capitalized and shown on the balance sheet of such
Person in accordance with generally accepted accounting principles, provided,
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however amounts paid or indebtedness incurred by the Borrower in connection with
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Permitted Acquisitions, including without limitation, in connection with the
development of BKC Restaurants, shall not be included as Capital Expenditures.
Capitalized Leases. Leases under which Holdings, the Borrower or any of
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their Subsidiaries is the lessee or obligor, the discounted future rental
payment obligations under which are required to be capitalized on the balance
sheet of the lessee or obligor in accordance with generally accepted accounting
principles, provided, however, for purposes of this Credit Agreement all real
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estate leases (including the FFCA Leases) of BKC restaurants shall be considered
operating leases.
Capitalization Documents. The Subordination Documents, the Management
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Subscription Agreement, the Investor Subscription Agreement, the Executive
Subscription Agreement, the Stockholders Agreement, the Certificate of
Designation and the certificates of incorporation of Holdings, the Borrower and
their Subsidiaries.
Carolina Sellers. Collectively, F&P Enterprises, Inc. and certain
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shareholders of F&P Enterprises, Inc.
Cash Equivalents. Collectively, (a) marketable direct obligations issued
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or unconditionally guaranteed by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof, (b)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of
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acquisition, having the highest rating obtainable from either Standard & Poor's
Rating Group, a division of XxXxxx-Xxxx, Inc., a New York corporation ("S&P") or
Xxxxx'x Investors Service, Inc. ("Moody's"), (or, if at any time neither such
rating service shall be rating such obligations, then from such other nationally
recognized rating services acceptable to the Majority Banks), (c) commercial
paper maturing in no more than one year from the date of creation thereof and,
at the time of acquisition, having the highest rating obtainable from either S&P
or Moody's (or, if at any time neither such rating service shall be rating such
obligations, then from such other nationally recognized rating service
acceptable to the Majority Banks), (d) certificates of deposit (domestic or
eurodollar), bankers' acceptances, or time deposits maturing within one year
from the date of acquisition thereof issued by commercial banks organized under
the laws of the United States of America or any state thereof or the District of
Columbia, each having combined capital and surplus of not less than $500,000,000
("Qualifying Banks"), (e) repurchase agreements and reverse repurchase
agreements with Qualifying Banks, provided that the terms of such agreements
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comply with the guidelines set forth in the Federal Financial Institutions
Examination Council Supervisory Policy -- Repurchase Agreements of Depository
Institutions with Securities Dealers and Others as adopted by the Comptroller of
the Currency on October 31, 1985 (the "Supervisory Policy"), and provided
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further that possession or control of the underlying securities is established
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as provided in the Supervisory Policy, (f) investments in money market funds or
money market deposit accounts that invest solely in Cash Equivalents described
in clauses (a) through (e) above and (g) any other Investment permitted under
Section 9.3(a), (b), (c) or (d) of this Credit Agreement (as in effect on the
date hereof).
CERCLA. See (S)7.18 hereof.
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Certificate of Designation. The Certificate of Designation of Holdings
--------------------------
dated as of December 3, 1996 and in form and substance satisfactory to the Agent
and the Banks.
Closing Date. The first date on which the conditions set forth in (S)11
------------
have been satisfied, the conditions set forth in (S)11 of the Acquisition Credit
Agreement have been satisfied, the Original Credit Agreement shall be amended
and restated as set forth herein, the existing Revolving Credit Loans and
Letters of Credit under the Original Credit Agreement are converted to Revolving
Credit Loans or Letters of Credit hereunder, as the case may be, and any
Revolving Credit Loans are to be made or any Letter of Credit is to be issued
hereunder.
Code. The Internal Revenue Code of 1986.
----
Collateral. All of the property, rights and interests of Holdings, the
----------
Borrower and their Subsidiaries that are or are intended to be subject to the
security interests created by the Security Documents.
Commitment. With respect to each Bank, the amount set forth on Schedule 1
---------- -------- -
hereto as the amount of such Bank's commitment to make Revolving Credit Loans
to, and to participate in the issuance, extension and renewal of Letters of
Credit for the account of, the Borrower, as the same may be reduced
-7-
from time to time; or if such commitment is terminated pursuant to the
provisions hereof, zero.
Commitment Fee Rate. The applicable rate per annum set forth in the chart
-------------------
contained in the definition of Applicable Margin under the heading "Commitment
Fee".
Commitment Percentage. With respect to each Bank, the percentage set forth
---------------------
on Schedule 1 hereto as such Bank's percentage of the aggregate Commitments of
----------
all of the Banks.
Compliance Certificate. See (S)8.4(d) hereof.
----------------------
Consolidated or consolidated. With reference to any term defined herein,
----------------------------
shall mean that term as applied to the accounts of Holdings and its Subsidiaries
or the Borrower and its Subsidiaries, as applicable, consolidated in accordance
with generally accepted accounting principles.
Consolidated Cash Flow. With respect to any fiscal period, an amount equal
----------------------
to the sum of (a) Consolidated Net Income for such fiscal period, plus (b) in
----
each case, to the extent deducted in the calculation of such Person's
Consolidated Net Income and without duplication, (i) depreciation and
amortization for such period, plus (ii) other noncash charges made in
----
calculating Consolidated Net Income for such period, plus (iii) tax expense for
----
such period, plus (iv) Consolidated Total Interest Expense paid or accrued
----
during such period, plus (v) non-cash expenses relating to Financial Accounting
----
Standards Board Statements Nos. 106, 109 and 121 deducted in the calculation of
Consolidated Net Income for such period, plus (vi) the aggregate amount of non-
----
capitalized transaction costs incurred in connection with financings and
acquisitions, (including, but not limited to, financing and refinancing fees),
minus (c) Capital Expenditures made in such period, minus (d) cash taxes paid in
----- -----
such period, all as determined on a consolidated basis in accordance with
generally accepted accounting principles.
Consolidated Net Income. For any period, the consolidated net income (or
-----------------------
net deficit) of any Person and its Subsidiaries, after deduction of all
expenses, taxes, and other proper charges, determined in accordance with
generally accepted accounting principles, after excluding therefrom (a)
dividends paid or payable to the extent deducted from Consolidated Net Income;
(b) without duplication, all nonrecurring nonoperating income or expenses,
including but not limited to gains or losses realized upon the termination of
pension plans, upon the sale of assets (other than in the ordinary course of
business) or the satisfaction of Indebtedness; and (c) nonrecurring cash
consolidation expenses of the Borrower and its Subsidiaries pertaining to
Permitted Acquisitions to the extent such cash expenses (i) which, in the case
of the Permitted Acquisitions are greater than $250,000 but less than $500,000
in any fiscal year, are approved by the Agent and (ii) which in the case of the
Permitted Acquisitions are greater than $500,000 in any fiscal year, are
approved by the Majority Banks.
Consolidated Total Interest Expense. With respect to any Person, for any
-----------------------------------
fiscal period, the aggregate amount of interest expense in respect of all
-8-
Indebtedness (other than Indebtedness relating to Franchise Agreements,
licenses, leases or other agreements with BKC) of such Person and its
Subsidiaries for such period, on a consolidated basis, determined in accordance
with generally accepted accounting principles (including all non-cash interest
payments, the interest portion of any deferred payment obligation and the
interest component of Capitalized Leases, but excluding amortization of deferred
financing fees if such amortization would otherwise be included in interest
expense).
Conversion Request. A notice given by the Borrower to the Agent of the
------------------
Borrower's election to convert or continue a Revolving Credit Loan in accordance
with (S)2.7.
Credit Agreement. This Fourth Amended and Restated Revolving Credit
----------------
Agreement, including the Schedules and Exhibits hereto.
Debt Service Coverage Ratio. As at any date of determination and with
---------------------------
respect to Holdings and its Subsidiaries, the ratio of (a) the Consolidated Cash
Flow of Holdings and its Subsidiaries for the Reference Period then ended to (b)
the Total Debt Service of Holdings and its Subsidiaries for such Reference
Period.
Default. See (S)13.1 hereof.
-------
Delinquent Bank. See (S)15.5.3 hereof.
---------------
Distribution. The declaration or payment of any dividend on or in respect
------------
of any shares of any class of capital stock of a Person, other than dividends
payable solely in shares of common stock or Preferred Stock of such Person; the
purchase, redemption, or other retirement of any shares of any class of capital
stock of a Person, directly or indirectly through a Subsidiary of such Person or
otherwise; the return of capital by a Person to its shareholders as such; or any
other distribution on or in respect of any shares of any class of capital stock
of a Person.
Dollars or $. Dollars in lawful currency of the United States of America.
------- -
Domestic Lending Office. Initially, the office of each Bank designated as
-----------------------
such in Schedule 1 hereto; thereafter, such other office of such Bank, if any,
----------
located within the United States that will be making or maintaining Base Rate
Loans.
Drawdown Date. The date on which any Revolving Credit Loan is made or is
-------------
to be made, and the date on which any Revolving Credit Loan is converted or
continued in accordance with (S)2.7.
Dual-Use Establishment. A single location at which more than one business
-------- -------------
activity is conducted, but as to which the primary business is the conduct of a
BKC Restaurant.
EBITDA. With respect to any fiscal period, an amount equal to the sum of
------
(a) Consolidated Net Income for such fiscal period, plus (b) in each case to the
----
extent deducted in the calculation of such Person's Consolidated Net Income and
without duplication (i) depreciation and amortization for such period, plus (ii)
----
other
-9-
noncash charges made in calculating Consolidated Net Income for such period plus
----
(iii) tax expense for such period, plus (iv) Consolidated Total Interest Expense
----
paid or accrued during such period, plus (v) non-cash expenses relating to
----
Financial Accounting Standards Board Statements Nos. 106, 109 and 121 deducted
in the calculation of Consolidated Net Income for such period, plus (vi) the
----
aggregate amount of non-capitalized transaction costs incurred in connection
with financings and acquisitions, (including, but not limited to, financing and
refinancing fees), plus (vii) fees paid under the TJC Management Agreement or
----
the Intercompany Management Agreement, to the extent permitted under (S)9.4(d),
plus (viii) amortization of start up costs of new restaurants developed by the
----
Borrower and its Restricted Subsidiaries, all as determined in accordance with
generally accepted accounting principles.
Eligible Assignee. Any of (a) a commercial bank or finance company
-----------------
organized under the laws of the United States, or any State thereof or the
District of Columbia, and having total assets in excess of $1,000,000,000; (b) a
savings and loan association or savings bank organized under the laws of the
United States, or any State thereof or the District of Columbia, and having a
net worth of at least $100,000,000, calculated in accordance with generally
accepted accounting principles; (c) a commercial bank organized under the laws
of any other country which is a member of the Organization for Economic
Cooperation and Development (the "OECD"), or a political subdivision of any such
country, and having total assets in excess of $1,000,000,000, provided that such
--------
bank is acting through a branch or agency located in the country in which it is
organized or another country which is also a member of the OECD; (d) the central
bank of any country which is a member of the OECD; (e) any investment company,
investment fund, financial institution or other institutional lender (other than
any financial institution which but for the amount of its total assets or net
worth would have been an Eligible Assignee under clauses (a) through (d) above)
having total assets in excess of $100,000,000 and (f) if, but only if, any Event
of Default has occurred and is continuing, any other bank, insurance company,
commercial finance company or other financial institution or other Person
approved by the Agent, such approval not to be unreasonably withheld.
Employee Benefit Plan. Any employee benefit plan within the meaning of
---------------------
(S)3(3) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate, other than a Multiemployer Plan.
Environmental Laws. See (S)7.18(a) hereof.
------------------
ERISA. The Employee Retirement Income Security Act of 1974.
-----
ERISA Affiliate. Any Person which is treated as a single employer with the
---------------
Borrower under (S)414 of the Code.
ERISA Reportable Event. A reportable event with respect to a Guaranteed
----------------------
Pension Plan within the meaning of (S)4043 of ERISA and the regulations
promulgated thereunder as to which the requirement of notice has not been
waived.
-10-
Eurocurrency Reserve Rate. For any day with respect to a Eurodollar Rate
-------------------------
Loan, the maximum rate (expressed as a decimal) at which any lender subject
thereto would be required to maintain reserves under Regulation D of the Board
of Governors of the Federal Reserve System (or any successor or similar
regulations relating to such reserve requirements) against "Eurocurrency
Liabilities" (as that term is used in Regulation D), if such liabilities were
outstanding. The Eurocurrency Reserve Rate shall be adjusted automatically on
and as of the effective date of any change in the Eurocurrency Reserve Rate.
Eurodollar Business Day. Any day on which commercial banks are open for
-----------------------
international business (including dealings in Dollar deposits) in London or such
other eurodollar interbank market as may be selected by the Agent in its sole
discretion acting in good faith.
Eurodollar Lending Office. Initially, the office of each Bank designated
-------------------------
as such in Schedule 1 hereto; thereafter, such other office of such Bank, if
----------
any, that shall be making or maintaining Eurodollar Rate Loans.
Eurodollar Rate. For any Interest Period with respect to a Eurodollar Rate
---------------
Loan, the rate of interest equal to (a) the rate per annum (rounded upwards to
the nearest 1/16 of one percent) at which the Reference Bank's Eurodollar
Lending Office is offered Dollar deposits two (2) Eurodollar Business Days prior
to the beginning of such Interest Period in the interbank eurodollar market
where the eurodollar and foreign currency and exchange operations of such
Eurodollar Lending Office are customarily conducted, for delivery on the first
day of such Interest Period for the number of days comprised therein and in an
amount comparable to the amount of the Eurodollar Rate Loan of such Reference
Bank to which such Interest Period applies, divided by (b) a number equal to
1.00 minus the Eurocurrency Reserve Rate, if applicable.
Eurodollar Rate Loans. Revolving Credit Loans bearing interest calculated
---------------------
by reference to the Eurodollar Rate.
Event of Default. See (S)13.1 hereof.
----------------
Exchange Debenture. The 13% Subordinated Exchange Debenture due 2008 which
------------------
may be issued by Holdings pursuant to the Exchange Debenture Indenture.
Exchange Debenture Indenture. The Exchange Debenture Indenture dated as of
----------------------------
December 3, 1996 between Holdings and Fleet National Bank, as trustee, in form
and substance satisfactory to the Agent and the Banks.
Executive Subscription Agreement. The Executive and Advisor Subscription
--------------------------------
Agreement, dated as of September 1, 1994, between Holdings and the parties
listed on the signature pages thereto.
Fee Letter. The fee letter dated or to be dated on or prior to the Closing
----------
Date between the Borrower and the Agent, in form and substance satisfactory to
the Agent and the Banks.
-11-
FFCA. FFCA Acquisition Corporation, a Delaware corporation.
----
FFCA Leases. Those certain lease agreements by and between FFCA, as
-----------
lessor, and the Borrower (as successor to AmeriKing Virginia), as lessee, for
each of the premises for which the "Lessee" on Exhibit A thereto is listed as
AmeriKing Virginia, and by and between FFCA, as lessor, and AmeriKing Tennessee,
as lessee, for each of the premises for which the "Lessee" on Exhibit A thereto
is AmeriKing Tennessee, each in form and substance satisfactory to the Agent.
FFCA NC Leases. Those certain lease agreements by and between FFCA, as
--------------
lessor, and the Borrower, as lessee, for each of the premises for which the
"Lessee" on Exhibit A thereto is the Borrower, each in form and substance
satisfactory to the Agent.
Franchise Agreements. The several Franchise Agreements (a) dated on or
--------------------
prior to the Closing Date between the Borrower, AmeriKing Colorado, AmeriKing
Tennessee, AmeriKing Cincinnati, Indiana Holdings or Indiana LP, as the case may
be, and BKC, each in form and substance satisfactory to the Agent, (b) dated
after the Closing Date between the Borrower and BKC, each in form and substance
substantially similar to those Franchise Agreements entered into between such
parties on or prior to the Closing Date, (c) dated after the Closing Date
between any Restricted Subsidiary and BKC, each in form and substance
substantially similar to those Franchise Agreements entered into between any
other Restricted Subsidiary and BKC on or prior to the Closing Date, and (d)
dated after the Closing Date between any Unrestricted Subsidiary and BKC, each
in form and substance substantially similar to those Franchise Agreements
entered into between any other Unrestricted Subsidiary and BKC on or prior to
the Closing Date.
Generally accepted accounting principles. (a) When used in (S)10, whether
----------------------------------------
directly or indirectly through reference to a capitalized term used therein,
means (i) principles that are consistent with the principles promulgated or
adopted by the Financial Accounting Standards Board and its predecessors, in
effect on January 1, 1996, and (ii) to the extent consistent with such
principles, the accounting practice of the Borrower reflected in its financial
statements for the year ended on January 1, 1996, and (b) when used in general,
other than as provided above, means principles that are (i) consistent with the
principles promulgated or adopted by the Financial Accounting Standards Board
and its predecessors, as in effect from time to time, and (ii) consistently
applied with past financial statements of the Borrower adopting the same
principles, provided that in each case referred to in this definition of
"generally accepted accounting principles" a certified public accountant would,
insofar as the use of such accounting principles is pertinent, be in a position
to deliver an unqualified opinion (other than a qualification regarding changes
in generally accepted accounting principles) as to financial statements in which
such principles have been properly applied.
Guaranteed Pension Plan. Any employee pension benefit plan within the
-----------------------
meaning of (S)3(2) of ERISA maintained or contributed to by the Borrower or any
ERISA Affiliate the benefits of which are guaranteed on termination in full or
in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.
-12-
Guarantees. Collectively, (a) the Guaranty, dated as of the date hereof,
----------
made by Holdings in favor of the Banks and the Agent pursuant to which Holdings
guaranties to the Banks and the Agent the payment and performance of the
Obligations, as the same may be amended, restated, supplemented or modified from
time to time (the "Parent Guaranty"); (b) the Guaranty dated as of the date
hereof, made by Indiana Holdings in favor of the Banks and the Agent, pursuant
to which Indiana Holdings guaranties to the Banks and the Agent the payment and
performance of the Obligations, as the same may be amended, restated,
supplemented or modified from time to time; and (c) the Guaranty dated as of the
date hereof, made by Indiana LP in favor of the Banks and the Agent, pursuant to
which Indiana LP guaranties to the Banks and the Agent the payment and
performance of the Obligations, as the same may be amended, restated,
supplemented or modified from time to time.
Hazardous Substances. See (S)7.18(b) hereof.
--------------------
Holdings. As defined in the preamble hereto.
--------
Indebtedness. All obligations, contingent and otherwise, that in
------------
accordance with generally accepted accounting principles should be classified
upon the obligor's balance sheet as liabilities, or to which reference should be
made by footnotes thereto, including in any event and whether or not so
classified: (a) all debt and similar monetary obligations, whether direct or
indirect; (b) all liabilities secured by any mortgage, pledge, security
interest, lien, charge or other encumbrance existing on property owned or
acquired subject thereto, whether or not the liability secured thereby shall
have been assumed; and (c) all guarantees, endorsements and other contingent
obligations whether direct or indirect in respect of indebtedness of others,
including any obligation to supply funds to or in any manner to invest in,
directly or indirectly, the debtor, to purchase indebtedness, or to assure the
owner of indebtedness against loss, through an agreement to purchase goods,
supplies, or services for the purpose of enabling the debtor to make payment of
the indebtedness held by such owner or otherwise, and the obligations to
reimburse the issuer in respect of any letters of credit.
Indiana Holdings. AmeriKing Indiana Holdings, Inc., a Delaware corporation
----------------
and wholly owned Subsidiary of the Borrower.
Indiana LP. AmeriKing Indiana, L.P., a Delaware limited partnership.
----------
Initial Acquisition. The transaction in which the Borrower purchased (a)
-------------------
certain of the assets of BKC consisting of sixty-eight (68) restaurants, (b)
certain of the assets and business of Xxxxxxxx Xxxx and/or his affiliates
consisting of eleven (11) restaurants and (c) certain of the assets and business
of Xxxxxxx X. Xxxxxx and/or his affiliates consisting of three (3) restaurants
pursuant to the Initial Asset Purchase Agreements on September 1, 1994.
Initial Asset Purchase Agreements. The several Asset Purchase Agreements
---------------------------------
dated as of September 1, 1994 by and between (a) BKC and the Borrower, (b)
Xxxxxxxx Xxxx and/or his affiliates and the Borrower, and (c) Xxxxxxx X. Xxxxxx
and/or his affiliates and the Borrower.
-13-
Intercompany Management Agreement. The Intercompany Management Consulting
---------------------------------
Agreement dated as of September 1, 1994 by and between the Borrower and
Holdings.
Intercreditor Agreement. Collectively, (a) the Intercreditor Agreement
-----------------------
dated as of September 1, 1994 (as amended pursuant to a First Amendment to
Intercreditor Agreement dated as of December 30, 1994, a Second Amendment to
Intercreditor Agreement dated as of June 17, 1997 and a Third Amendment to
Intercreditor Agreement dated as of the Closing Date), among BKC, the Borrower,
and the Agent, as the same may be amended, restated, supplemented or modified
from time to time; and (b) the Intercreditor Agreement dated as of February 7,
1996 (as amended pursuant to a First Amendment to Intercreditor Agreement dated
as of June 17, 1997 and a Second Amendment to Intercreditor Agreement dated as
of the Closing Date), among BKC, the Borrower, the Restricted Subsidiaries and
the Agent, as the same may be amended, restated, supplemented or modified from
time to time.
Interest Coverage Ratio. As at any date of determination and with respect
-----------------------
to Holdings, the ratio of (a) the sum of the EBITDA of Holdings and its
Subsidiaries for the Reference Period ending on such date to (b) Consolidated
Total Interest Expense of Holdings and its Subsidiaries for such Reference
Period.
Interest Payment Date. (a) As to any Base Rate Loan, the last day of the
---------------------
calendar quarter which includes the Drawdown Date thereof; and (b) as to any
Eurodollar Rate Loan in respect of which the Interest Period is (i) 3 months or
less, the last day of such Interest Period and (ii) more than 3 months, the date
that is 3 months from the first day of such Interest Period and, in addition,
the last day of such Interest Period.
Interest Period. With respect to each Revolving Credit Loan (a) initially,
---------------
the period commencing on the Drawdown Date of such Revolving Credit Loan and
ending on the last day of one of the periods set forth below, as selected by the
Borrower in a Loan Request (i) for any Base Rate Loan, the last day of the
calendar quarter; and (ii) for any Eurodollar Rate Loan, 1, 2, 3, or 6 months;
and (b) thereafter, each period commencing on the last day of the next preceding
Interest Period applicable to such Revolving Credit Loan and ending on the last
day of one of the periods set forth above, as selected by the Borrower in a
Conversion Request; provided that all of the foregoing provisions relating to
--------
Interest Periods are subject to the following:
(i) if any Interest Period with respect to a Eurodollar Rate Loan
would otherwise end on a day that is not a Eurodollar Business Day, that
Interest Period shall be extended to the next succeeding Eurodollar
Business Day unless the result of such extension would be to carry such
Interest Period into another calendar month, in which event such Interest
Period shall end on the immediately preceding Eurodollar Business Day;
(ii) if any Interest Period with respect to a Base Rate Loan would
end on a day that is not a Business Day, that Interest Period shall end on
the next succeeding Business Day;
-14-
(iii) if the Borrower shall fail to give notice as provided in (S)2.7,
the Borrower shall be deemed to have requested a conversion of the affected
Eurodollar Rate Loan to a Base Rate Loan and the continuance of all Base
Rate Loans as Base Rate Loans on the last day of the then current Interest
Period with respect thereto;
(iv) any Interest Period relating to any Eurodollar Rate Loan that
begins on the last Eurodollar Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall end on the last Eurodollar
Business Day of a calendar month; and
(v) any Interest Period relating to any Eurodollar Rate Loan that
would otherwise extend beyond the Revolving Credit Loan Maturity Date shall
end on the Revolving Credit Loan Maturity Date.
Investments. All expenditures made (other than Capital Expenditures not
-----------
incurred or made in connection with the acquisition and/or development of
restaurants) and all liabilities incurred (contingently or otherwise) for the
acquisition of stock or Indebtedness of, or for loans, advances, capital
contributions or transfers of property to, or in respect of any guaranties (or
other commitments as described under Indebtedness), or obligations of, any
Person. In determining the aggregate amount of Investments outstanding at any
particular time: (a) the amount of any Investment represented by a guaranty
shall be taken at not less than the principal amount of the obligations
guaranteed and still outstanding; (b) there shall be included as an Investment
all interest accrued with respect to Indebtedness constituting an Investment
unless and until such interest is paid; (c) there shall be deducted in respect
of each such Investment any amount received as a return of capital in cash (but
only by repurchase, redemption, retirement, repayment, liquidating dividend or
liquidating distribution); (d) there shall not be deducted in respect of any
Investment any amounts received as earnings on such Investment, whether as
dividends, interest or otherwise, except that accrued interest included as
provided in the foregoing clause (b) may be deducted when paid; and (e) there
shall not be deducted from or added to, as the case may be, the aggregate amount
of Investments any decrease or increase, as the case may be, in the value
thereof.
Investors. JZEP, the Jordan Investors (as defined in the Stockholders
---------
Agreement), the Management Stockholders (as defined in the Stockholders
Agreement) and the Executive and Advisors Stockholders (as defined in the
Stockholders Agreement).
Investor Subscription Agreement. The Jordan Investor Subscription
-------------------------------
Agreement, dated as of September 1, 1994, by and among Holdings and the
Stockholders (as defined therein).
Jordan Affiliates. Leucadia Investors, Inc., Xxxx X. Xxxxxx XX, Xxxxx X.
-----------------
Xxxxxxxxx, Xxxxxxxx X. Xxxxxxx, Xxxx X. Xxxxxx, Xxxx X. Max, A. Xxxxxxx Xxxxxx,
Xx., Xxxx X. Xxxx, Xxxxxx/Xxxxxxxxx Capital Company, Xxxx X. Xxxx Profit Sharing
Plan, Xxxxx X. Xxxxxx, Xx. Profit Sharing Plan and Trust, Xxxx X.
-15-
Jordan Revocable Trust and Xxxx Rodzevick Profit Sharing Plan and Trust, Xxxx X.
Rodzevick, Xxxxx X. Xxxxxx, Xxxxxx X. Xxxxx and JII Partners, Inc.
Jordan Principal. Collectively, (a) each partner, executive or employee of
----------------
TJC, (b) any wholly-owned Subsidiary of any one (or jointly of more than one of
any) Person specified in clause (a), and (c) the spouse or any immediate family
member of any Person specified in clause (a) or any trust solely for the benefit
of any such Person where the spouse or any immediate family member of such
Person.
JZEP. JZ Equity Partners PLC (f/k/a MCIT PLC), a public limited liability
----
company incorporated in England and Wales.
Leases. The several leases (a) dated on or prior to the Closing Date
------
between (i) the Borrower, AmeriKing Colorado, AmeriKing Tennessee, or Indiana
LP, as the case may be, and BKC, (ii) the Borrower and the current landlords of
the restaurants acquired pursuant to the Asset Purchase Agreement dated as of
September 1, 1994 between the Borrower and Xxxxxxxx Xxxx and/or his affiliates,
(iii) the Borrower and the current landlords of the restaurants acquired
pursuant to the Asset Purchase Agreement dated as of September 1, 1994 between
the Borrower and Xxxxxxx X. and/or his affiliates, (iv) the Borrower and the
current landlords of the restaurants acquired from BNB if such real property is
not owned by BNB, (v) the Borrower and BNB as to those restaurants acquired from
BNB for which BNB and/or an affiliate of BNB is the owner of the real property,
or such successor in interest to BNB, (vi) AmeriKing Colorado and the current
landlords of the restaurants acquired pursuant to the Asset Purchase Agreement
by and among DMW, Inc., Xxxxxx X. Xxxxx and AmeriKing Colorado and the Asset
Purchase Agreement by and among WSG, Inc., Xxxxxx X. Xxxxx, Xxxxx X. Xxxxxxx,
Xxxxxx Xxxxxx, Xx. and AmeriKing Colorado, each dated as of July 5, 1995, (vii)
AmeriKing Tennessee and the current landlords of the restaurants acquired by
AmeriKing Tennessee on November 21, 1995, (viii) the Borrower (as successor by
merger with AmeriKing Cincinnati) and the current landlords of the restaurants
acquired by AmeriKing Cincinnati on February 7, 1996, (ix) the Borrower (as
successor by merger with AmeriKing Virginia) and the current landlords of the
restaurants acquired by AmeriKing Virginia on February 7, 1996, (x) the Borrower
(as successor by merger with AmeriKing Virginia) and AmeriKing Tennessee and
FFCA, all in form and substance acceptable to the Agent (xi) the Borrower (as
successor by merger with AmeriKing Virginia) and certain of the Xxxxxxxx Xxxxxxx
of the restaurants acquired on February 7, 1996, (xii) the Borrower and the
current landlords or owners of the restaurants acquired by the Borrower on June
16, 1997, and (xiii) the Borrower and the current landlords or owners of the
restaurants to be acquired pursuant to The AmeriKing/Xxxx Acquisition and the
AmeriKing/Hamburgers Acquisition; (b) dated after the Closing Date between the
Borrower and the owner of the real property which is the subject of such lease,
so long as the terms and conditions of such leases are in form and substance
substantially similar to those leases entered into by the Borrower on or prior
to the Closing Date; (c) dated after the Closing Date between any Restricted
Subsidiary and the owner of the real property which is the subject of such
lease, so long as the terms and conditions of such leases are in form and
substance substantially similar to those leases entered into by any other
Restricted Subsidiary on or prior
-16-
to the Closing Date; and (d) dated after the Closing Date between any
Unrestricted Subsidiary and the owner of the real property which is the subject
of such lease, so long as the terms and conditions of such leases are in form
and substance substantially similar to those leases entered into by any other
Unrestricted Subsidiary on or prior to the Closing Date.
Letter of Credit. See (S)4.1.1 hereof.
----------------
Letter of Credit Application. See (S)4.1.1 hereof.
----------------------------
Letter of Credit Fee. See (S)4.6 hereof.
---------------------
Letter of Credit Participation. See (S)4.1.4 hereof.
------------------------------
Leverage Ratio. As at any date of determination, the ratio of (a) Total
--------------
Funded Indebtedness of Holdings and its Subsidiaries outstanding on such date
less cash and Cash Equivalents of Holdings and its Subsidiaries on such date to
(b) the EBITDA of Holdings and its Subsidiaries for any period of four
consecutive fiscal quarters (treated as a single accounting period) ended on
such date, or most recently ended fiscal quarter, as applicable, provided, the
--------
calculation of the Leverage Ratio shall be made on a Pro Forma Basis.
Loan Documents. The Revolver Loan Documents and the Acquisition Loan
---- ---------
Documents.
Loan Request. See (S)2.6 hereof.
------------
Majority Banks. As of any date, (i) if there are three (3) or more Banks,
--------------
any two or more Banks holding, in the aggregate, at least fifty one percent
(51%) of the outstanding principal amount of the Revolving Credit Notes and the
unfunded portion of the Commitments on such date, and if no such principal is
outstanding, any two or more Banks whose aggregate Commitments constitute at
least fifty one percent (51%) of the Total Commitment, and (ii) if there are
less than three (3) Banks, all the Banks.
Management Agreement. The Management Agreement as of September 1, 1994, by
--------------------
and among TJC Management Corp., Holdings and the Borrower, as amended by
Amendment No. 1 to Management Agreement dated February 7, 1996.
Management Subscription Agreement. The Management Subscription Agreement,
---------------------------------
dated as of September 1, 1994, as amended by Amendment No. 1 to Management
Subscription Agreement dated as of December 3, 1996, between Holdings and the
Stockholders (as defined therein).
Maximum Drawing Amount. The maximum aggregate amount that the
----------------------
beneficiaries may at any time draw under outstanding Letters of Credit, as such
aggregate amount may be reduced from time to time pursuant to the terms of the
Letters of Credit.
Mortgage Amendment. Collectively, (a) the First Amendment to Leasehold
------------------
Mortgage, dated as of June 17, 1997, between the Borrower (as successor by
-17-
merger with AmeriKing Virginia) and the Agent, and (b) the Second Amendment to
Leasehold Mortgage, to be executed pursuant to Section 8.18 hereof, between the
Borrower and the Agent, and in form and substance satisfactory to the Agent.
Mortgaged Property. Any Real Estate which is subject to any Mortgage. The
------------------
Mortgaged Properties on the Closing Date shall include those properties listed
on Schedule 1A attached hereto.
-----------
Mortgages. The several mortgages and deeds of trust, (a) dated on or prior
---------
to the Closing Date, as amended by the Mortgage Amendment; or (b) entered into
after the Closing Date pursuant to (S)8.15, from the Borrower and its Restricted
Subsidiaries to the Agent with respect to the leasehold interests of the
Borrower and its Restricted Subsidiaries in the Real Estate, in form and
substance satisfactory to the Agent.
Multiemployer Plan. Any multiemployer plan within the meaning of (S)3(37)
------------------
of ERISA maintained or contributed to by the Borrower or any ERISA Affiliate.
Net Sale Proceeds. The net proceeds received by Holdings or any of its
-----------------
Subsidiaries in respect of any asset sale or disposition, less all reasonable
out of pocket fees, commissions, taxes paid as a result of such sale or
disposition and other expenses incurred in connection with such asset sale or
disposition.
Nominally Financed Acquisition. A Permitted Financed Acquisition in which
------------------------------
(a) the total amount of Revolving Credit Loans requested by the Borrower for
such acquisition or a series of related acquisitions does not exceed, in the
aggregate, $5,000,000 and (b) the amount of the Revolving Credit Loan requested,
when taken together with all other Revolving Credit Loans made at any time after
the Closing Date to provide funds for Nominally Financed Acquisitions does not
exceed, in the aggregate, $10,000,000.
Non-Affected Bank(s). As at any date of determination, those Banks which
--------------------
are not Affected Banks.
Obligations. All indebtedness, obligations and liabilities of any of
-----------
Holdings, the Borrower and their Subsidiaries to any of the Banks and the Agent,
individually or collectively, existing on the date of this Credit Agreement or
arising thereafter, direct or indirect, joint or several, absolute or
contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise, arising or
incurred under this Credit Agreement, the Acquisition Credit Agreement or any of
the other Loan Documents or in respect of any of the Revolving Credit Loans or
Acquisition Revolving Credit Loans made or Reimbursement Obligations incurred or
any of the Revolving Credit Notes, Letter of Credit Application, Letter of
Credit, or arising or incurred in connection with any interest rate protection
arrangements contemplated by (S)8.15 or any documents, agreements or instruments
executed in connection therewith, or other instruments at any time evidencing
any thereof.
-18-
Offering. The public offering by Holdings of the Senior Notes and the
--------
Units pursuant to a registration statement on Form S-1 (File No. 333-04261) (the
"Registration Statement").
Offering Documents. Collectively, the Exchange Debentures, the Exchange
------------------
Debenture Indenture, the Senior Notes, the Senior Notes Indenture, the
Certificate of Designation and the Restated Certificate of Incorporation, and
all documents, instruments and agreements executed in connection with any of the
foregoing.
Outstanding. With respect to the Revolving Credit Loans, the aggregate
-----------
unpaid principal thereof as of any date of determination.
Parent Guaranty. As defined in the definition for Guarantees.
---------------
Partnership Pledges. Collectively, (a) the Collateral Assignment of
-------------------
Partnership Interest executed by Holdings, and (b) the Collateral Assignment of
Partnership Interest executed by Indiana Holdings, each dated as of the date
hereof in favor of the Agent for the benefit of the Agent, and each as may be
amended and in effect from time to time.
PBGC. The Pension Benefit Guaranty Corporation created by (S)4002 of ERISA
----
and any successor entity or entities having similar responsibilities.
Perfection Certificate. Each Perfection Certificate, as defined in each of
----------------------
the Security Agreements.
Permitted Acquisitions. See (S)9.5.1 hereof.
----------------------
Permitted Acquisition Documents. Collectively, each Permitted Acquisition
-------------------------------
Purchase Agreement and all documents, instruments and agreements executed in
connection therewith.
Permitted Acquisition Purchase Agreement. Any of the asset and/or stock
----------------------------------------
purchase agreements relating to a Permitted Financed Acquisition (other than a
Nominally Financed Acquisition) dated on or prior to the Revolving Credit Loan
Maturity Date between the Borrower or any of its Restricted Subsidiaries and the
sellers of such assets and/or stock, each such agreement to be in form and
substance satisfactory to the Agent.
Permitted Financed Acquisition. The acquisition(s) by the Borrower or any
------------------------------
of its Restricted Subsidiaries of certain of the assets and/or stock of a
Person, which assets being acquired consist of, among other items, BKC
Restaurants, pursuant to the terms of a Permitted Acquisition Purchase Agreement
and which acquisition is (a) financed in whole or in part by a Revolving Credit
Loan and (b) which is a Permitted Acquisition.
Permitted Liens. Liens, security interests and other encumbrances
---------------
permitted by (S)9.2.
-19-
Person. Any individual, corporation, partnership, trust, unincorporated
------
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.
Preferred Stock. As applied to the capital stock of any Person, means the
---------------
capital stock of any class or classes (however designated) that is preferred as
to the payment of dividends, or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of such corporation, over
shares of capital stock of any other class of such Person.
Pro Forma Basis. For any Reference Period which includes an acquisition by
---------------
Holdings or any of its Subsidiaries of the assets and businesses of BKC
Restaurants or other quick service restaurants, the Total Funded Indebtedness
(or, in the case of Consolidated Total Interest Expenses, all Indebtedness) and
EBITDA for the fiscal quarter in which such acquisition occurred, each full
fiscal quarter thereafter to the end of the Reference Period, and each full
fiscal quarter from the beginning of the Reference Period to the date of such
acquisition with reference to the audited historical financial results of the
Person so acquired and Holdings and its Subsidiaries for the applicable
Reference Period after giving effect on a pro forma basis to such acquisition
and assuming that such acquisition had been consummated at the beginning of such
Reference Period in the manner described in (i), (ii) and (iii) below:
(i) all Indebtedness (whether under this Credit Agreement the
Acquisition Credit Agreement or otherwise) and any other balance sheet
adjustments incurred or made in connection with such acquisition shall be
deemed to have been incurred or made on the first day of the Reference
Period, and all Indebtedness of the Person acquired or to be acquired in
such acquisition which was or will have been repaid in connection with the
consummation of such acquisition shall be deemed to have been repaid
concurrently with the incurrence of the Indebtedness incurred in connection
with such acquisition;
(ii) all Indebtedness assumed to have been incurred pursuant to the
preceding clause (i) shall be deemed to have borne interest at the sum of
(a) the arithmetic mean of (x) the Eurodollar Rate for Eurodollar Rate
Loans having an Interest Period of one month in effect on the first day of
the Reference Period and (y) the Eurodollar Rate for Eurodollar Rate Loans
having an Interest Period of one month in effect on the last day of the
Reference Period plus (b) the Applicable Margin for Revolving Credit Loans
----
then in effect (after giving effect to such acquisition on a pro forma
basis); and
(iii) other reasonable cost savings, expenses and other income
statement or operating statement adjustments which are attributable to the
change in ownership and/or management resulting from such acquisition as
may be approved by the Agent in writing (which approval shall not be
unreasonably withheld) shall be deemed to have been realized on the first
day of the Test Period.;
-20-
provided, that, to the extent that the number of restaurants acquired
-------- ----
in such acquisition does not exceed a number equal to 10% of the
restaurants owned by Holdings and Subsidiaries immediately prior to such
acquisition, Pro Forma Basis may be determined with reference to unaudited
financial statements of the Person so acquired if audited financial
statements are unavailable.
Rate Adjustment Period. See the definition of Applicable Margin.
----------------------
Real Estate. All real property at any time owned or leased (as lessee or
-----------
sublessee) by the Borrower or any of its Subsidiaries.
Record. The grid attached to a Revolving Credit Note, or the continuation
------
of such grid, or any other similar record, including computer records,
maintained by any Bank with respect to any Revolving Credit Loan referred to in
such Revolving Credit Note.
Reference Bank. BKB.
--------------
Reference Period. A period of four (4) consecutive fiscal quarters.
----------------
Reimbursement Obligation. The Borrower's obligation to reimburse the Agent
------------------------
and the Banks on account of any drawing under any Letter of Credit as provided
in (S)4.2.
Restated Certificate of Incorporation. The Amended and Restated
-------------------------------------
Certificate of Incorporation of Holdings, dated as of December 3, 1996 and in
form and substance satisfactory to the Agent and the Banks.
Restaurant Cash Flow. For each restaurant, the EBITDA of such restaurant
--------------------
for the period of the immediately preceding twelve (12) months plus, to the
----
extent deducted in calculating EBITDA, the aggregate amount of allocated general
and administrative expenses not directly associated with such restaurant during
such period in accordance with past practices of the Borrower.
Restricted Payment. In relation to the Borrower and its Subsidiaries, (a)
------------------
any Distribution or (b) any payment or transfer of property by the Borrower or
its Subsidiaries to Holdings or to any other Affiliate of the Borrower or
Holdings.
Restricted Subsidiary. Any Subsidiary of the Borrower which is not an
---------------------
Unrestricted Subsidiary.
Revolver Loan Documents. This Credit Agreement, the Revolving Credit
-----------------------
Notes, the Letter of Credit Applications, the Letters of Credit, the Fee Letter,
the Intercreditor Agreement and the Security Documents.
Revolving Credit Loan Maturity Date. June 30, 2002.
-----------------------------------
Revolving Credit Loans. Revolving credit loans made or to be made by the
----------------------
Banks to the Borrower pursuant to (S)2.
Revolving Credit Notes. See (S)2.4 hereof.
----------------------
Securities Purchase Agreement. That certain Securities Purchase Agreement
-----------------------------
dated as of November 30, 1994, between Holdings and BBI pursuant to which (a)
certain junior subordinated notes in an original aggregate principal amount of
$600,000 were issued by Holdings and (b) BBI purchased $1,900,000 of preferred
stock of Holdings, as amended by Amendment No. 1 to the Securities Purchase
Agreement dated as of February 7, 1996 between Holdings and BBI, and as the same
may be further amended and in effect from time to time in accordance with the
terms of this Credit Agreement and the other Loan Documents.
Security Agreements. Collectively, (a) the Amended and Restated Security
-------------------
Agreement between the Borrower and the Agent, (b) the Security Agreement between
Indiana LP and the Agent, (c) the Security Agreement between Indiana Holdings
and the Agent, and (d) the Security Agreement between Holdings and the Agent,
each dated as of the date hereof and each as may be amended, restated,
supplemented or modified from time to time.
Security Documents. The Guarantees, the Security Agreements, the Borrower
------------------
Stock Pledge Agreement, the Partnership Pledges, the Mortgages and the Stock
Pledge Agreement.
Senior Exchange Preferred Stock. The Senior Exchangeable Preferred Stock
-------------------------------
due 2008 of Holdings issued pursuant to the Offering.
Senior Notes. The 10.75% Senior Notes due 2006 issued by Holdings in the
------------
aggregate principal amount of $100,000,000 pursuant to the Senior Notes
Indenture.
Senior Notes Indenture. The Indenture dated as of December 3, 1996 between
----------------------
Holdings and Fleet National Bank, as trustee, and in form and substance
satisfactory to the Agent and the Banks.
Stock Pledge Agreement. The Amended and Restated Stock Pledge Agreement,
----------------------
dated as the date hereof, between Holdings and the Agent, as the same may be
amended, restated, supplemented or modified from time to time.
Stockholders Agreement. The Amended and Restated Stockholders Agreement
----------------------
dated as of December 3, 1996, among the Borrower, BBI, the Investors and
Holdings, in form and substance satisfactory to the Agent and the Banks.
Subordinated Agreement. That certain Amended and Restated Purchase
----------------------
Agreement, dated as of February 6, 1996, in form and substance satisfactory to
the Agent, and as such agreement may be amended and in effect from time to time
in accordance with the terms of this Credit Agreement and the other Loan
Documents.
Subordinated Debt. Indebtedness of Holdings, the Borrower or any of their
-----------------
Subsidiaries evidenced by the Subordination Documents, that is expressly
subordinated and made junior to the payment and performance in full of the
Obligations, and other Indebtedness incurred under the Subordinated Agreement.
-22-
Subordinated Notes. Any Non-Negotiable Three Year Junior Subordinated
------------------
Notes issued pursuant to the Management Subscription Agreement.
Subordination Documents. The Subordinated Notes and that portion of the
-----------------------
Securities Purchase Agreement which governs the subordinated notes issued to
BBI.
Subsidiary. Any corporation, association, trust, or other business entity
----------
of which the designated parent shall at any time own directly or indirectly
through a Subsidiary or Subsidiaries at least a majority (by number of votes) of
the outstanding Voting Stock.
Survey. In relation to each Mortgaged Property, an instrument survey of
------
such Mortgaged Property which shall show the location of all buildings,
structures, easements and utility lines on such Mortgaged Property, shall be
sufficient to remove the survey exception from the Title Policy, shall show that
all buildings and structures are within the lot lines of such Mortgaged
Property, shall not show any material encroachments by others, shall show the
zoning district or districts in which such Mortgaged Property is located in a
flood hazard district as established by the Federal Emergency Management Agency
or any successor agency or is located in any flood plain, flood hazard or
wetland protection district established under federal, state or local law.
Surveyor Certificate. In relation to each Mortgaged Property for which a
--------------------
Survey has been conducted, a certificate executed by the surveyor who prepared
such Survey dated as of a recent date and containing such information relating
to such Mortgaged Property as the Agent or the Title Insurance Company may
require, such certificate to be reasonably satisfactory to the Agent in form and
substance.
Tax Sharing Agreement. The Amended and Restated Tax Sharing Agreement,
---------------------
dated on or prior to the Closing Date, by and among Holdings, the Borrower and
their Subsidiaries, which shall be in form and substance satisfactory to the
Agent.
Title Insurance Company. Lawyers Title Insurance Company.
-----------------------
Title Policy. In relation to each Mortgaged Property, an ALTA standard
------------
form title insurance policy issued by the Title Insurance Company (with such
reinsurance or co-insurance as the Agent may reasonably require, any such
reinsurance to be with direct access endorsements) in such amount as may be
reasonably determined by the Agent insuring the priority of the Mortgage of such
Mortgaged Property and that the Borrower or one of its Subsidiaries holds
marketable leasehold title to such Mortgaged Property, subject only to the
encumbrances permitted by such Mortgage and which shall not contain exceptions
for mechanics liens or persons in occupancy, shall not insure over any matter
except to the extent that any such affirmative insurance is acceptable to the
Agent in its reasonable discretion, and shall contain such endorsements and
affirmative insurance as the Agent in its discretion may reasonably require, if
available in the applicable jurisdiction, including but not limited to (a)
comprehensive
-23-
endorsement, (b) variable rate of interest endorsement, (c) usury endorsement,
(d) revolving credit endorsement, (e) tie-in endorsement, (f) doing business
endorsement and (g) ALTA form 3.1 zoning endorsement.
TJC. The Jordan Company LLC, a New York limited liability company.
---
Total Commitment. The sum of the Commitments of the Banks, as in effect
----------------
from time to time.
Total Debt Service. For any period with respect to the Borrower and its
------------------
Subsidiaries, all scheduled mandatory payments of principal on Indebtedness of
the Borrower and its Subsidiaries (other than Indebtedness relating to Franchise
Agreements, leases, licenses and other agreements with BKC) made or required to
be made in that period plus the Consolidated Total Interest Expense of the
----
Borrower and its Subsidiaries for that period.
Total Funded Indebtedness. All Indebtedness of the Borrower and its
-------------------------
Subsidiaries for borrowed money, purchase money Indebtedness and with respect to
Capitalized Leases, determined on a consolidated basis in accordance with
generally accepted accounting principles.
Type. As to any Revolving Credit Loan, its nature as a Base Rate Loan or a
----
Eurodollar Rate Loan.
Uniform Customs. With respect to any Letter of Credit, the Uniform Customs
---------------
and Practice for Documentary Credits (1993 Revision), International Chamber of
Commerce Publication No. 500 or any successor version thereto adopted by the
Agent in the ordinary course of its business as a letter of credit issuer and in
effect at the time of issuance of such Letter of Credit.
Units. The $30,000,000 aggregate amount of Units (as such term is defined
-----
in the Registration Statement) consisting of 30,000 shares of Senior Exchange
Preferred Stock and 30,000 shares of Common Stock of Holdings.
Unpaid Reimbursement Obligation. Any Reimbursement Obligation for which
-------------------------------
the Borrower does not reimburse the Agent and the Banks on the date specified
in, and in accordance with, (S)4.2.
Unrestricted Subsidiary. Each Subsidiary of the Borrower as to which (a)
-----------------------
the Board of Directors of the Borrower has designated such Subsidiary as an
Unrestricted Subsidiary at or prior to the time such Subsidiary is formed or
acquired by the Borrower, as the case may be, and the Borrower has provided
written notice to the Agent in reasonable detail of such designation within five
(5) Business Days after designation thereof; (b) the Borrower owns not less than
eighty percent (80%) of the capital stock of such Subsidiary and eighty percent
(80%) of the Voting Stock of such Subsidiary; (c) such Subsidiary has become a
party to the Tax Sharing Agreement; (d) all of such Subsidiary's liabilities are
non-recourse as to Holdings, the Borrower or any Restricted Subsidiary; and (e)
no Jordan Principal owns capital stock of such Subsidiary (except indirectly
through Holdings).
-24-
Xxxxxxxx Xxxxxxx. C&N Dining, Inc. and certain of its affiliates.
----------------
Voting Stock. Stock or similar equity interest of a Person pursuant to
------------
which the holders thereof have, at the time of determination, the general voting
power under ordinary circumstances to vote for the election of directors (or
persons performing similar functions), managers, trustees or general partners of
such Person (irrespective of whether or not at the time any other class or
classes will have or might have voting power by reason of the happening of any
contingency).
Warrants. The warrants issued to BBI by Holdings.
--------
1.2. Rules of Interpretation.
-----------------------
(a) A reference to any document or agreement shall include such
document or agreement as amended, modified or supplemented from time to
time in accordance with its terms and the terms of this Credit Agreement.
(b) The singular includes the plural and the plural includes the
singular.
(c) A reference to any law includes any amendment or modification to
such law.
(d) A reference to any Person includes its permitted successors and
permitted assigns.
(e) Accounting terms not otherwise defined herein have the meanings
assigned to them by generally accepted accounting principles applied on a
consistent basis by the accounting entity to which they refer.
(f) The words "include", "includes" and "including" are not limiting.
(g) All terms not specifically defined herein or by generally
accepted accounting principles, which terms are defined in the Uniform
Commercial Code as in effect in the Commonwealth of Massachusetts, have the
meanings assigned to them therein, with the term "instrument" being that
defined under Article 9 of the Uniform Commercial Code.
(h) Reference to a particular "(S)" refers to that section of this
Credit Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of like
import shall refer to this Credit Agreement as a whole and not to any
particular section or subdivision of this Credit Agreement.
2. THE REVOLVING CREDIT FACILITY.
-----------------------------
2.1. Commitment to Lend. Subject to the terms and conditions set forth in
------------------
this Credit Agreement (including, but not limited to those requirements set
forth
-25-
in (S)2.6 below), each of the Banks severally agrees to lend to the Borrower and
the Borrower may borrow, repay, and reborrow from time to time between the
Closing Date and the Revolving Credit Loan Maturity Date upon notice by the
Borrower to the Agent given in accordance with (S)2.6, such sums as are
requested by the Borrower up to a maximum aggregate amount outstanding (after
giving effect to all amounts requested) at any one time equal to such Bank's
Commitment minus such Bank's Commitment Percentage of the sum of the Maximum
Drawing Amount and all Unpaid Reimbursement Obligations, provided that the sum
of the outstanding amount of the Revolving Credit Loans (after giving effect to
all amounts requested) plus the Maximum Drawing Amount and all Unpaid
Reimbursement Obligations shall not at any time exceed the Total Commitment. The
Revolving Credit Loans shall be made pro rata in accordance with each Bank's
Commitment Percentage. Each request for a Revolving Credit Loan hereunder shall
constitute a representation and warranty by the Borrower that the conditions set
forth in (S)11 and (S)12, in the case of the initial Revolving Credit Loans to
be made on the Closing Date, and (S)12, in the case of all other Revolving
Credit Loans, have been satisfied on the date of such request. Notwithstanding
anything to the contrary contained herein, the Borrower shall not be permitted
to borrow Revolving Credit Loans after June 17, 2000 to finance any portion of a
Permitted Acquisition.
2.2. Commitment Fee. The Borrower agrees to pay to the Agent for the
--------------
accounts of the Banks in accordance with their respective Commitment Percentages
a commitment fee calculated at the rate of the Commitment Fee Rate per annum on
the average daily amount during each calendar quarter or portion thereof from
the Closing Date to the Revolving Credit Loan Maturity Date by which the Total
Commitment minus the sum of the Maximum Drawing Amount and all Unpaid
-----
Reimbursement Obligations exceeds the outstanding amount of Revolving Credit
Loans during such calendar quarter. The commitment fee shall be payable
quarterly in arrears on the first day of each calendar quarter for the
immediately preceding calendar quarter commencing on the first such date
following the date hereof, with a final payment on the Revolving Credit Maturity
Date or any earlier date on which the Commitments shall terminate.
2.3. Reduction of Total Commitment.
-----------------------------
At any time after the Acquisition Total Commitment has been reduced to
zero, the Borrower shall have the right from time to time upon seven (7)
Business Days prior written notice to the Agent to reduce by $5,000,000 or an
integral multiple of $1,000,000 in excess thereof the unborrowed portion of the
Total Commitment or terminate entirely the Total Commitment, whereupon the
Commitments of the Banks shall be reduced pro rata in accordance with their
--- ----
respective Commitment Percentages of the amount specified in such notice or, as
the case may be, terminated. Promptly after receiving any notice of the
Borrower delivered pursuant to this (S)2.3, the Agent will notify the Banks of
the substance thereof. Upon the effective date of any such reduction or
termination, the Borrower shall pay to the Agent for the respective accounts of
the Banks the full amount of any commitment fee then accrued on the amount of
the reduction. No reduction or termination of the Commitments may be
reinstated.
-26-
2.4. The Revolving Credit Notes. The Revolving Credit Loans shall be
--------------------------
evidenced by separate amended and restated promissory notes of the Borrower in
substantially the form of Exhibit A hereto (each a "Revolving Credit Note"),
---------
dated as of the Closing Date and completed with appropriate insertions. One
Revolving Credit Note shall be payable to the order of each Bank in a principal
amount equal to such Bank's Commitment or, if less, the outstanding amount of
all Revolving Credit Loans made by such Bank, plus interest accrued thereon, as
set forth below. The Borrower irrevocably authorizes each Bank to make or cause
to be made, at or about the time of the Drawdown Date of any Revolving Credit
Loan or at the time of receipt of any payment of principal on such Bank's
Revolving Credit Note, an appropriate notation on such Bank's Record reflecting
the making of such Revolving Credit Loan or (as the case may be) the receipt of
such payment. The outstanding amount of the Revolving Credit Loans set forth on
such Bank's Record shall be prima facie evidence of the principal amount thereof
----- -----
owing and unpaid to such Bank, but the failure to record, or any error in so
recording, any such amount on such Bank's Record shall not limit or otherwise
affect the obligations of the Borrower hereunder or under any Revolving Credit
Note to make payments of principal of or interest on any Revolving Credit Note
when due.
2.5. Interest on Revolving Credit Loans. Except as otherwise provided in
----------------------------------
(S)5.11,
(a) each Base Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of the
Interest Period with respect thereto at the rate per annum equal to the
Base Rate plus the Applicable Margin.
----
(b) Each Eurodollar Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of the
Interest Period with respect thereto at the rate per annum equal to the
Eurodollar Rate for such Interest Period plus the Applicable Margin.
----
(c) The Borrower promises to pay interest on each Revolving Credit
Loan in arrears on each Interest Payment Date with respect thereto.
2.6. Requests for Revolving Credit Loans. The Borrower shall give to the
-----------------------------------
Agent written notice in the form of Exhibit B hereto (or telephonic notice
---------
confirmed in a writing in the form of Exhibit B hereto) of each Revolving Credit
---------
Loan requested hereunder (a "Loan Request") no less than 1:00 p.m. (Boston time)
(a) one (1) Business Day prior to the proposed Drawdown Date of any Base Rate
Loan and (b) three (3) Eurodollar Business Days prior to the proposed Drawdown
Date of any Eurodollar Rate Loan, provided, however, the Borrower shall not
-------- -------
request any Eurodollar Rate Loans with an Interest Period of more than one month
until the date which is the earlier to occur of (i) sixty (60) Business Days
following the Closing Date and (ii) the date on which the Revolving Credit Loans
hereunder have been syndicated to the satisfaction of the Agent. Each such
notice shall specify (i) the principal amount of the Revolving Credit Loan
requested, (ii) the proposed Drawdown Date of such Revolving Credit Loan, (iii)
the Interest Period for such Revolving Credit Loan, (iv) the Type of such
Revolving Credit Loan and (v) whether the proceeds of such Revolving Credit Loan
shall be used to finance all or any part
-27-
of a Permitted Acquisition. Promptly upon receipt of any such notice, the Agent
shall notify each of the Banks thereof. Each Loan Request shall be irrevocable
and binding on the Borrower and shall obligate the Borrower to accept the
Revolving Credit Loan requested from the Banks on the proposed Drawdown Date.
Each Loan Request shall be in a minimum aggregate amount of $500,000 or a larger
integral multiple of $100,000. In addition, if all or any portion of the
proceeds of the Revolving Credit Loan being requested is being used to finance
all or any portion of a Permitted Acquisition, except in the case of a Nominally
Financed Acquisition, the Borrower shall deliver to the Agent not less than five
(5) days prior to the proposed Drawdown Date of such Revolving Credit Loan a
written notification describing the relevant Permitted Financed Acquisition to
be consummated, copies of all material documents, agreements and instruments to
be entered into by the Borrower in connection with such Permitted Financed
Acquisition, and the purchase price for such Permitted Financed Acquisition
(which purchase price plus all transaction costs related thereto shall not be
less than the amount of the Revolving Credit Loan so requested). Subject to the
foregoing, and subject to the satisfaction of the conditions set forth in (S)12,
so long as no Default or Event of Default shall have occurred and be continuing,
and all of the applicable conditions set forth in this Credit Agreement shall
have been met, including, but not limited to the Borrower having taken all
action necessary and required pursuant to the terms of this Credit Agreement and
the other Loan Documents to perfect the Agent's first priority security interest
in the assets being acquired (or, in the event any Subsidiary is formed as a
result of or in connection with such acquisition, such Subsidiary shall be a
Restricted Subsidiary, and the Loan Documents shall be amended and/or
supplemented as necessary to make the terms and conditions of the Loan Documents
applicable to such Restricted Subsidiary), and the Agent being satisfied with
the terms of the proposed Permitted Financed Acquisition, each Bank shall lend
to the Borrower such Bank's Commitment Percentage of the Revolving Credit Loan
so requested in immediately available funds not later than the close of business
on such Drawdown Date.
2.7. Conversion Options.
------------------
2.7.1. Conversion to Different Type of Revolving Credit Loan. The
-----------------------------------------------------
Borrower may elect from time to time to convert any outstanding Revolving
Credit Loan to a Revolving Credit Loan of another Type, provided that (a)
--------
with respect to any such conversion of a Revolving Credit Loan to a Base
Rate Loan, the Borrower shall give the Agent at least one (1) Business
Day's prior written notice of such election; (b) with respect to any such
conversion of a Base Rate Loan to a Eurodollar Rate Loan, the Borrower
shall give the Agent at least three (3) Eurodollar Business Days prior
written notice of such election; (c) with respect to any such conversion of
a Eurodollar Rate Loan into a Base Rate Loan, such conversion shall only be
made on the last day of the Interest Period with respect thereto; (d) no
Revolving Credit Loan may be converted into a Eurodollar Rate Loan when any
Default or Event of Default has occurred and is continuing; (e) no
Revolving Credit Loan may be converted into a Eurodollar Rate Loan with an
Interest Period of more than thirty (30) days until the date which is the
earlier to occur of (i) sixty (60) Business Days following the Closing Date
and (ii) the date on which the Revolving Credit Loans hereunder have been
-28-
syndicated to the satisfaction of the Agent; and (f) no more than five (5)
Eurodollar Rate Loans (including "Eurodollar Rate Loans" as defined in and
advanced pursuant to the Acquisition Credit Agreement) having different
Interest Periods may be outstanding at any time. On the date on which such
conversion is being made each Bank shall take such action as is necessary
to transfer its Commitment Percentage of such Revolving Credit Loans to its
Domestic Lending Office or its Eurodollar Lending Office, as the case may
be. All or any part of outstanding Revolving Credit Loans of any Type may
be converted into a Revolving Credit Loan of another Type as provided
herein, provided that any partial conversion shall be in an aggregate
--------
principal amount of $500,000 or a larger integral multiple of $100,000 in
excess thereof. Each Conversion Request relating to the conversion of a
Base Rate Loan to a Eurodollar Rate Loan shall be irrevocable by the
Borrower.
2.7.2. Continuation of Type of Revolving Credit Loan. Any Revolving
---------------------------------------------
Credit Loan of any Type may be continued as a Revolving Credit Loan of the
same Type upon the expiration of an Interest Period with respect thereto by
compliance by the Borrower with the notice provisions contained in
(S)2.7.1; provided that no Eurodollar Rate Loan may be continued as such
--------
when any Default or Event of Default has occurred and is continuing, but
shall be automatically converted to a Base Rate Loan on the last day of the
first Interest Period relating thereto ending during the continuance of any
Default or Event of Default of which officers of the Agent active upon the
Borrower's account have actual knowledge. In the event that the Borrower
fails to provide any such notice with respect to the continuation of any
Eurodollar Rate Loan as such, then such Eurodollar Rate Loan shall be
automatically converted to a Base Rate Loan on the last day of the first
Interest Period relating thereto. The Agent shall notify the Banks promptly
when any such automatic conversion contemplated by this (S)2.7 is scheduled
to occur.
2.7.3. Eurodollar Rate Loans. Any conversion to or from Eurodollar
---------------------
Rate Loans shall be in such amounts and be made pursuant to such elections
so that, after giving effect thereto, the aggregate principal amount of all
Eurodollar Rate Loans having the same Interest Period shall not be less
than $500,000 or a larger integral multiple of $100,000 in excess thereof.
2.8. Funds for Revolving Credit Loan.
-------------------------------
2.8.1. Funding Procedures. Not later than 1:00 p.m. (Boston time) on
------------------
the proposed Drawdown Date of any Revolving Credit Loans, each of the Banks
will make available to the Agent, at the Agent's Head Office, in
immediately available funds, the amount of such Bank's Commitment
Percentage of the amount of the requested Revolving Credit Loans. Upon
receipt from each Bank of such amount, and upon receipt of the documents
required by (S)(S)11 and 12 and the satisfaction of the other conditions
set forth therein, to the extent applicable, the Agent will make available
to the Borrower the aggregate amount of such Revolving Credit Loans made
-29-
available to the Agent by the Banks. The failure or refusal of any Bank to
make available to the Agent at the aforesaid time and place on any Drawdown
Date the amount of its Commitment Percentage of the requested Revolving
Credit Loans shall not relieve any other Bank from its several obligation
hereunder to make available to the Agent the amount of such other Bank's
Commitment Percentage of any requested Revolving Credit Loans.
2.8.2. Advances by Agent. The Agent may, unless notified to the
-----------------
contrary by any Bank prior to a Drawdown Date, assume that such Bank has
made available to the Agent on such Drawdown Date the amount of such Bank's
Commitment Percentage of the Revolving Credit Loans to be made on such
Drawdown Date, and the Agent may (but it shall not be required to), in
reliance upon such assumption, make available to the Borrower a
corresponding amount. If any Bank makes available to the Agent such amount
on a date after such Drawdown Date, such Bank shall pay to the Agent on
demand an amount equal to the product of (a) the average computed for the
period referred to in clause (c) below, of the weighted average interest
rate paid by the Agent for federal funds acquired by the Agent during each
day included in such period, times (b) the amount of such Bank's Commitment
-----
Percentage of such Revolving Credit Loans, times (c) a fraction, the
-----
numerator of which is the number of days that elapse from and including
such Drawdown Date to the date on which the amount of such Bank's
Commitment Percentage of such Revolving Credit Loans shall become
immediately available to the Agent, and the denominator of which is 365. A
statement of the Agent submitted to such Bank with respect to any amounts
owing under this paragraph shall be prima facie evidence of the amount due
----- -----
and owing to the Agent by such Bank. If the amount of such Bank's
Commitment Percentage of such Revolving Credit Loans is not made available
to the Agent by such Bank within three (3) Business Days following such
Drawdown Date, the Agent shall be entitled to recover such amount from the
Borrower on demand, with interest thereon at the rate per annum applicable
to the Revolving Credit Loans made on such Drawdown Date.
3. REPAYMENT OF THE REVOLVING CREDIT LOANS.
---------------------------------------
3.1. Maturity. The Borrower promises to pay on the Revolving Credit Loan
--------
Maturity Date, and there shall become absolutely due and payable on the
Revolving Credit Loan Maturity Date, all of the Revolving Credit Loans
outstanding on such date, together with any and all accrued and unpaid interest
thereon.
3.2. Mandatory Repayments of Revolving Credit Loans. If at any time the
----------------------------------------------
sum of the outstanding amount of the Revolving Credit Loans, the Maximum Drawing
Amount and all Unpaid Reimbursement Obligations exceeds the Total Commitment
then the Borrower shall immediately pay the amount of such excess to the Agent
for the respective accounts of the Banks for application: first, to any Unpaid
Reimbursement Obligations; second, to the Revolving Credit Loans; and third, to
provide to the Agent cash collateral for Reimbursement Obligations as
contemplated by (S)4.2(b) and (c). Each payment of any Unpaid Reimbursement
Obligations or prepayment of Revolving Credit Loans shall be allocated among the
-30-
Banks, in proportion, as nearly as practicable, to each Reimbursement Obligation
or (as the case may be) the respective unpaid principal amount of each Bank's
Revolving Credit Note, with adjustments to the extent practicable to equalize
any prior payments or repayments not exactly in proportion. In addition, in the
event Holdings or any of its Subsidiaries receives any cash proceeds from (a)
the sale or other disposition of assets permitted by (S)9.5 which cash proceeds
are required by (S)9.5 to be repaid to the Agent hereunder; or (b) the sale of
any of the capital stock of the Borrower or any of its Subsidiaries or any other
equity issuance by the Borrower or any of its Subsidiaries, such amounts shall
be paid to the Agent for the pro rata accounts of the Banks to be applied first,
--- ---- -----
to the outstanding Acquisition Revolving Credit Loans and the Acquisition Total
Commitment concurrently shall be permanently reduced by such applied amount, and
second, (if the Acquisition Total Commitment has been reduced to zero) to the
outstanding Revolving Credit Loans and the Total Commitment concurrently shall
be permanently reduced by such applied amount.
3.3. Optional Repayments of Revolving Credit Loans. The Borrower shall
---------------------------------------------
have the right, at its election, to repay the outstanding amount of the
Revolving Credit Loans, as a whole or in part, at any time without penalty or
premium, provided that any full or partial prepayment of the outstanding amount
--------
of any Eurodollar Rate Loans pursuant to this (S)3.3 may be made only on the
last day of the Interest Period relating thereto, or, if such prepayment is made
prior to the last day of the Interest Period relating thereto, the Borrower pays
any costs associated with such prepayment as more fully described in (S)5.10.
The Borrower shall give the Agent, no later than 11:00 a.m. (Boston time), at
least one (1) Business Day prior written notice of any proposed prepayment
pursuant to this (S)3.3 of Base Rate Loans, and three (3) Eurodollar Business
Days notice of any proposed prepayment pursuant to this (S)3.3 of Eurodollar
Rate Loans, in each case specifying the proposed date of prepayment of Revolving
Credit Loans and the principal amount to be prepaid. Each such partial
prepayment of the Revolving Credit Loans shall be in an integral multiple of
$100,000, shall be accompanied by the payment of accrued interest on the
principal prepaid to the date of prepayment and shall be applied, in the absence
of instruction by the Borrower, first to the principal of Base Rate Loans and
then to the principal of Eurodollar Rate Loans. Each partial prepayment shall be
allocated among the Banks, in proportion, as nearly as practicable, to the
respective unpaid principal amount of each Bank's Revolving Credit Note, with
adjustments to the extent practicable to equalize any prior repayments not
exactly in proportion.
4. LETTERS OF CREDIT.
-----------------
4.1. Letter of Credit Commitments.
----------------------------
4.1.1. Commitment to Issue Letters of Credit. Subject to the terms
-------------------------------------
and conditions hereof and the execution and delivery by the Borrower of a
letter of credit application on the Agent's customary form (a "Letter of
Credit Application"), the Agent on behalf of the Banks and in reliance upon
the agreement of the Banks set forth in (S)4.1.4 and upon the
representations and warranties of the Borrower contained herein, agrees, in
its individual capacity, to issue, extend and renew for the account of the
Borrower one or
-31-
more standby or documentary letters of credit (individually, a "Letter of
Credit"), in such form as may be requested from time to time by the
Borrower and agreed to by the Agent; provided, however, that, after giving
-------- -------
effect to such request, (a) the sum of the Maximum Drawing Amount and all
Unpaid Reimbursement Obligations shall not exceed $10,000,000 at any one
time, and (b) the sum of (i) the Maximum Drawing Amount on all Letters of
Credit, (ii) all Unpaid Reimbursement Obligations, and (iii) the amount of
all Revolving Credit Loans outstanding shall not exceed the Total
Commitment
4.1.2. Letter of Credit Applications. Each Letter of Credit
-----------------------------
Application shall be completed to the satisfaction of the Agent. In the
event that any provision of any Letter of Credit Application shall be
inconsistent with any provision of this Credit Agreement, then the
provisions of this Credit Agreement shall, to the extent of any such
inconsistency, govern.
4.1.3. Terms of Letters of Credit. Each Letter of Credit issued,
--------------------------
extended or renewed hereunder shall, among other things, (a) provide for
the payment of sight drafts for honor thereunder when presented in
accordance with the terms thereof and when accompanied by the documents
described therein, and (b) have an expiry date no later than the date which
is fourteen (14) days (or, if the Letter of Credit is confirmed by a
confirming bank or otherwise provides for one or more nominated persons,
forty-five (45) days) prior to the Revolving Credit Loan Maturity Date.
Each Letter of Credit so issued, extended or renewed shall be subject to
the Uniform Customs.
4.1.4. Reimbursement Obligations of Banks. Each Bank severally agrees
----------------------------------
that it shall be absolutely liable, without regard to the occurrence of any
Default or Event of Default or any other condition precedent whatsoever, to
the extent of such Bank's Commitment Percentage, to reimburse the Agent on
demand for the amount of each draft paid by the Agent under each Letter of
Credit to the extent that such amount is not reimbursed by the Borrower
pursuant to (S)4.2 (such agreement for a Bank being called herein the
"Letter of Credit Participation" of such Bank).
4.1.5. Participations of Banks. Each such payment made by a Bank
-----------------------
shall be treated as the purchase by such Bank of a participating interest
in the Borrower's Reimbursement Obligation under (S)4.2 in an amount equal
to such payment. Each Bank shall share in accordance with its participating
interest in any interest which accrues pursuant to (S)4.2.
4.2. Reimbursement Obligation of the Borrower. In order to induce the
----------------------------------------
Agent to issue, extend and renew each Letter of Credit and the Banks to
participate therein, the Borrower hereby agrees to reimburse or pay to the
Agent, for the account of the Agent or (as the case may be) the Banks, with
respect to each Letter of Credit issued, extended or renewed by the Agent
hereunder,
(a) except as otherwise expressly provided in (S)4.2(b) and (c), on
each date that any draft presented under such Letter of Credit is honored
by the Agent, or the Agent otherwise makes a payment with respect thereto,
(i) the amount paid by the Agent under or with respect to such Letter of
Credit, and
-32-
(ii) the amount of any taxes, fees, charges or other costs and expenses
whatsoever incurred by the Agent or any Bank in connection with any payment
made by the Agent or any Bank under, or with respect to, such Letter of
Credit,
(b) upon the reduction (but not termination) of the Total Commitment
to an amount less than the Maximum Drawing Amount, an amount equal to such
difference, which amount shall be held by the Agent for the benefit of the
Banks and the Agent as cash collateral for all Reimbursement Obligations,
and
(c) upon the termination of the Total Commitment, or the acceleration
of the Reimbursement Obligations with respect to all Letters of Credit in
accordance with (S)13, an amount equal to the then Maximum Drawing Amount
on all Letters of Credit, which amount shall be held by the Agent for the
benefit of the Banks and the Agent as cash collateral for all Reimbursement
Obligations.
Each such payment shall be made to the Agent at the Agent's Head Office in
immediately available funds. Interest on any and all amounts remaining unpaid
by the Borrower under this (S)4.2 at any time from the date such amounts become
due and payable (whether as stated in this (S)4.2, by acceleration or otherwise)
until payment in full (whether before or after judgment) shall be payable to the
Agent on demand at the rate specified in (S)5.11 for overdue principal on the
Revolving Credit Loans.
4.3. Letter of Credit Payments. If any draft shall be presented or other
-------------------------
demand for payment shall be made under any Letter of Credit, the Agent shall
notify the Borrower of the date and amount of the draft presented or demand for
payment and of the date and time when it expects to pay such draft or honor such
demand for payment. If the Borrower fails to reimburse the Agent as provided in
(S)4.2 on or before the date that such draft is paid or other payment is made by
the Agent, the Agent may at any time thereafter notify the Banks of the amount
of any such Unpaid Reimbursement Obligation. No later than 3:00 p.m. (Boston
time) on the Business Day next following the receipt of such notice, each Bank
shall make available to the Agent, at the Agent's Head Office, in immediately
available funds, such Bank's Commitment Percentage of such Unpaid Reimbursement
Obligation, together with an amount equal to the product of (a) the average,
computed for the period referred to in clause (c) below, of the weighted average
interest rate paid by the Agent for federal funds acquired by the Agent during
each day included in such period, times (b) the amount equal to such Bank's
-----
Commitment Percentage of such Unpaid Reimbursement Obligation, times (c) a
-----
fraction, the numerator of which is the number of days that elapse from and
including the date the Agent paid the draft presented for honor or otherwise
made payment to the date on which such Bank's Commitment Percentage of such
Unpaid Reimbursement obligation shall become immediately available to the Agent,
and the denominator of which is 360. The responsibility of the Agent to the
Borrower and the Banks shall be only to determine that the documents (including
each draft) delivered under each Letter of Credit in connection with such
presentment shall be in conformity in all material respects with such Letter of
Credit.
-33-
4.4. Obligations Absolute. The Borrower's obligations under this (S)4
--------------------
shall be absolute and unconditional under any and all circumstances and
irrespective of the occurrence of any Default or Event of Default or any
condition precedent whatsoever or any setoff, counterclaim or defense to payment
which the Borrower may have or have had against the Agent, any Bank or any
beneficiary of a Letter of Credit. The Borrower further agrees with the Agent
and the Banks that the Agent and the Banks shall not be responsible for, and the
Borrower's Reimbursement Obligations under (S)4.2 shall not be affected by,
among other things, the validity or genuineness of documents or of any
endorsements thereon, even if such documents should in fact prove to be in any
or all respects invalid, fraudulent or forged, or any dispute between or among
the Borrower, the beneficiary of any Letter of Credit or any financing
institution or other party to which any Letter of Credit may be transferred or
any claims or defenses whatsoever of the Borrower against the beneficiary of any
Letter of Credit or any such transferee. The Agent and the Banks shall not be
liable for any error, omission, interruption or delay in transmission, dispatch
or delivery of any message or advice, however transmitted, in connection with
any Letter of Credit. The Borrower agrees that any action taken or omitted by
the Agent or any Bank under or in connection with each Letter of Credit and the
related drafts and documents, if done in good faith, shall be binding upon the
Borrower and shall not result in any liability on the part of the Agent or any
Bank to the Borrower.
4.5. Reliance by Issuer. To the extent not inconsistent with (S)4.4, the
------------------
Agent shall be entitled to rely, and shall be fully protected in relying upon,
any Letter of Credit, draft, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document believed by it to be genuine and correct and
to have been signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel, independent accountants and other
experts selected by the Agent. The Agent shall be fully justified in failing or
refusing to take any action under this Agreement unless it shall first have
received such advice or concurrence of the Majority Banks as it reasonably deems
appropriate or it shall first be indemnified to its reasonable satisfaction by
the Banks against any and all liability and expense which may be incurred by it
by reason of taking or continuing to take any such action. The Agent shall in
all cases be fully protected in acting, or in refraining from acting, under this
Agreement in accordance with a request of the Majority Banks, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
the Banks and all future holders of the Revolving Credit Notes or of a Letter of
Credit Participation.
4.6. Letter of Credit Fee. The Borrower shall pay to the Agent a fee (in
--------------------
each case, a "Letter of Credit Fee") (a) in respect of each standby Letter of
Credit issued pursuant to this Credit Agreement, calculated at the rate of the
Applicable Margin per annum on the face amount of each such Letter of Credit,
and the Agent shall, in turn, remit to each Bank its pro rata share of a portion
--- ----
of such Letter of Credit Fee calculated at a rate of the Applicable Margin minus
-----
1/4% per annum on the face amount of each such Letter of Credit, and (b) in
respect of each documentary Letter of Credit issued pursuant to this Credit
Agreement, calculated at the rate of the Applicable Margin minus 1/2% per annum
-----
on the face amount of such Letter of Credit, and the Agent shall, in turn, remit
to each Bank its pro rata
--- ----
-34-
share of a portion of such Letter of Credit Fee calculated at a rate of the
Applicable Margin minus 3/4% per annum on the face amount of each such Letter of
-----
Credit. The Letter of Credit Fee for each Letter of Credit shall be payable
annually in advance, on the date of issuance of such Letter of Credit, and on
each anniversary thereof until such Letter of Credit expires or is canceled. In
addition, the Borrower shall pay to the Agent, for its own account, the Agent's
standard issuance, processing, negotiation, amendment and administrative fees,
determined in accordance with customary fees and charges for similar facilities.
5. CERTAIN GENERAL PROVISIONS.
--------------------------
5.1. Closing Fee. The Borrower agrees to pay to the Agent a closing fee
-----------
and an amendment fee in the amounts and at the times as set forth in the Fee
Letter.
5.2. Agent's Fee. The Borrower shall pay to the Agent, an Agent's fee (the
-----------
"Agent's Fee") as provided in the Fee Letter.
5.3. Funds for Payments.
------------------
5.3.1. Payments to Agent. All payments of principal, interest,
-----------------
Reimbursement Obligations, commitment fees, Letter of Credit Fees and any
other amounts due hereunder or under any of the other Loan Documents shall
be made to the Agent, for the respective accounts of the Banks and the
Agent, at the Agent's Head Office or at such other location in the Boston,
Massachusetts, area that the Agent may from time to time designate, in each
case in immediately available funds.
5.3.2. No Offset, etc. Except as otherwise provided in (S)5.7, all
---------------
payments by the Borrower hereunder and under any of the other Loan
Documents shall be made without setoff or counterclaim and free and clear
of and without deduction for any taxes, levies, imposts, duties, charges,
fees, deductions, withholdings, compulsory loans, restrictions or
conditions of any nature now or hereafter imposed or levied by any
jurisdiction or any political subdivision thereof or taxing or other
authority therein unless the Borrower is compelled by law to make such
deduction or withholding. Except as otherwise provided in (S)5.7, if any
such obligation is imposed upon the Borrower with respect to any amount
payable by it hereunder or under any of the other Loan Documents, the
Borrower will pay to the Agent, for the account of the Banks or (as the
case may be) the Agent, on the date on which such amount is due and payable
hereunder or under such other Loan Document, such additional amount in
Dollars as shall be necessary to enable the Banks or the Agent to receive
the same net amount which the Banks or the Agent would have received on
such due date had no such obligation been imposed upon the Borrower. The
Borrower will deliver promptly to the Agent certificates or other valid
vouchers for all taxes or other charges deducted from or paid with respect
to payments made by the Borrower hereunder or under such other Loan
Document.
-35-
5.4. Computations. All computations of interest on the Revolving Credit
------------
Loans and of commitment fees, Letter of Credit Fees or other fees shall be based
on a 360-day year and paid for the actual number of days elapsed. Except as
otherwise provided in the definition of the term "Interest Period" with respect
to Eurodollar Rate Loans, whenever a payment hereunder or under any of the other
Loan Documents becomes due on a day that is not a Business Day, the due date for
such payment shall be extended to the next succeeding Business Day, and interest
shall accrue during such extension. The outstanding amount of the Revolving
Credit Loans as reflected on the Records from time to time shall be considered
correct and binding on the Borrower unless within five (5) Business Days after
receipt of any notice by the Agent or any of the Banks of such outstanding
amount, the Agent or such Bank shall notify the Borrower to the contrary.
5.5. Inability to Determine Eurodollar Rate. In the event, prior to the
--------------------------------------
commencement of any Interest Period relating to any Eurodollar Rate Loan, the
Agent shall determine or be notified by the Majority Banks that adequate and
reasonable methods do not exist for ascertaining the Eurodollar Rate that would
otherwise determine the rate of interest to be applicable to any Eurodollar Rate
Loan during any Interest Period, the Agent shall forthwith give notice of such
determination (which shall be conclusive and binding on the Borrower and the
Banks) to the Borrower and the Banks. In such event (a) any Loan Request or
Conversion Request with respect to Eurodollar Rate Loans shall be automatically
withdrawn and shall be deemed a request for Base Rate Loans, (b) each Eurodollar
Rate Loan will automatically, on the last day of the then current Interest
Period relating thereto, become a Base Rate Loan, and (c) the obligations of the
Banks to make Eurodollar Rate Loans shall be suspended until the Agent or the
Majority Banks determines that the circumstances giving rise to such suspension
no longer exist, whereupon the Agent or, as the case may be, the Agent upon the
instruction of the Majority Banks, shall so notify the Borrower and the Banks.
5.6. Illegality. Notwithstanding any other provisions herein, if any
----------
present or future law, regulation, treaty or directive or the interpretation or
application thereof shall make it unlawful for any Bank to make or maintain
Eurodollar Rate Loans, such Bank shall forthwith give notice of such
circumstances to the Borrower and the other Banks and thereupon (a) the
commitment of such Bank to make Eurodollar Rate Loans or convert Revolving
Credit Loans of another Type to Eurodollar Rate Loans shall forthwith be
suspended and (b) such Bank's Revolving Credit Loans then outstanding as
Eurodollar Rate Loans, if any, shall be converted automatically to Base Rate
Loans on the last day of each Interest Period applicable to such Eurodollar Rate
Loans or within such earlier period as may be required by law. The Borrower
hereby agrees promptly to pay the Agent for the account of such Bank, upon
demand by such Bank, any additional amounts necessary to compensate such Bank
for any costs incurred by such Bank in making any conversion in accordance with
this (S)5.6, including any interest or fees payable by such Bank to lenders of
funds obtained by it in order to make or maintain its Eurodollar Loans
hereunder.
5.7. Additional Costs, etc. If any present or future applicable law, which
---------------------
expression, as used herein, includes statutes, rules and regulations thereunder
-36-
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 hereafter made upon or otherwise issued to any Bank or
the Agent by any central bank or other fiscal, monetary or other authority
(whether or not having the force of law), shall:
(a) subject any Bank or the Agent to any tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature with respect to this
Credit Agreement, the other Loan Documents, any Letters of Credit, such
Bank's Commitment or the Revolving Credit Loans (other than taxes based
upon or measured by the income or profits of such Bank or the Agent), or
(b) materially change the basis of taxation (except for changes in
taxes on income or profits) of payments to any Bank of the principal of or
the interest on any Revolving Credit Loans or any other amounts payable to
any Bank or the Agent under this Credit Agreement or any of the other Loan
Documents, or
(c) impose or increase or render applicable (other than to the extent
specifically provided for elsewhere in this Credit Agreement) any special
deposit, reserve, assessment, liquidity, capital adequacy or other similar
requirements (whether or not having the force of law) against assets held
by, or deposits in or for the account of, or loans by, or letters of credit
issued by, or commitments of an office of any Bank, or
(d) impose on any Bank or the Agent any other conditions or
requirements with respect to this Credit Agreement, the other Loan
Documents, any Letters of Credit, the Revolving Credit Loans, such Bank's
Commitment, or any class of loans, letters of credit or commitments of
which any of the Revolving Credit Loans or such Bank's Commitment forms a
part,
and the result of any of the foregoing is:
(i) to increase the cost to any Bank of making, funding,
issuing, renewing, extending or maintaining any of the Revolving
Credit Loans or such Bank's Commitment or any Letter of Credit, or
(ii) to reduce the amount of principal, interest,
Reimbursement Obligation or other amount payable to such Bank or the
Agent hereunder on account of such Bank's Commitment, any Letter of
Credit or any of the Revolving Credit Loans, or
(iii) to require such Bank or the Agent to make any payment or
to forego any interest or Reimbursement Obligation or other sum
payable hereunder, the amount of which payment or foregone interest or
Reimbursement Obligation or other sum is calculated by reference to
the gross amount of any sum receivable or deemed received by such Bank
or the Agent from the Borrower hereunder,
-37-
then, and in each such case, the Borrower will, upon demand made by such Bank or
(as the case may be) the Agent at any time and from time to time and as often as
the occasion therefor may arise, pay to such Bank or the Agent such additional
amounts as will be sufficient to compensate such Bank or the Agent for such
additional cost, reduction, payment or foregone interest or Reimbursement
Obligation or other sum. On or before the date it becomes a party to this Credit
Agreement and from time to time thereafter upon any change in status rendering
any certificate or document previously delivered pursuant to this (S)5.7 invalid
or inaccurate, each Bank that is organized under the laws of a jurisdiction
outside the United States shall (but, with respect to any renewal or change in
status, if legally able to do so) deliver to the Borrower, (x) if such Bank is a
"bank" within the meaning of Section 881(c)(3)(A) of the Code, Internal Revenue
Service Form 1001 or Form 4224 and any other certificate or statement of
exemption required by Treasury Regulation Section 1.1441-1, 1.1441-4 or 1.1441-
6(c) or any subsequent version thereof or subsequent revision thereto, properly
completed and duly executed by such Bank establishing that such payment is (a)
not subject to United States Federal withholding tax under the Code because such
payment is effectively connected with conduct by such Bank of a trade or
business in the United States or (b) totally exempt from United States Federal
withholding tax, or (other than in the case of such Bank on the date such Bank
became a party to this Credit Agreement); or (y) if such Bank is not a "bank"
within the meaning of Section 881(c)(3)(A) of the Code and cannot deliver either
Internal Revenue Service Form 1001 or 4224, such Bank shall deliver (a) a
certificate substantially in the form of Exhibit E hereto and (b) two completed
signed copies of Internal Revenue Service Form W-8 (or successor form)
certifying to such Bank's entitlement to an exemption for United States
withholding tax with respect to payments of interest to be made under this
Credit Agreement or under any Revolving Credit Note. The Borrower shall not be
required to pay any additional amounts to any Bank pursuant to (S)5.3 or this
(S)5.7 to the extent that the obligation to pay such additional amounts would
not have arisen but for a failure by such Bank to comply with the provisions of
the preceding sentence.
Any Bank claiming any additional amounts payable pursuant to (S)5.3 or this
(S)5.7 shall use reasonable efforts (consistent with legal and regulatory
restrictions) to file any certificate or document reasonably requested in
writing by the Borrower or to change the jurisdiction of its applicable lending
office if the making of such a filing or change would avoid the need for or
substantially reduce the amount of any such additional amounts which may
thereafter accrue and would not, in the sole and absolute determination of such
Bank be otherwise disadvantageous to such Bank, which determination by such Bank
shall be conclusive.
If a Bank or the Agent shall become aware that it is entitled to receive a
refund in respect of taxes as to which it has been indemnified by the Borrower
pursuant to (S)5.3 or this (S)5.7, it shall promptly notify the Borrower of the
availability of such refund and shall, within thirty (30) days after receipt of
a request by the Borrower, apply for such refund at the Borrower's expense. If
any Bank or the Agent, as applicable, receives a refund in respect of any taxes
to which it has been indemnified by the Borrower pursuant to (S)5.3 or this
(S)5.7, it shall promptly repay such refund to the Borrower (to the extent of
amounts that have
-38-
been paid by the Borrower under (S)5.3 or this (S)5.7 with respect to such
refund), net of all out-of-pocket expenses (including taxes imposed with respect
to such refund) of such Bank or the Agent, as applicable, and without interest;
provided, however, that the Borrower, upon the request of such Bank or the
-------- -------
Agent, as applicable, agrees to return such refund (plus penalties, interest or
other charges) to such Bank or the Agent in the event such Bank or the Agent is
required to repay such refund.
5.8. Capital Adequacy. If after the date hereof any Bank or the Agent
----------------
determines that (a) the adoption of or change after the Closing Date in any law,
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law) regarding capital requirements for banks or bank
holding companies or any change in the interpretation or application thereof by
a court or governmental authority with appropriate jurisdiction, or (b)
compliance by such Bank or the Agent or any corporation controlling such Bank or
the Agent with any law, governmental rule, regulation, policy, guideline or
directive (whether or not having the force of law) of any such entity regarding
capital adequacy, has the effect of reducing the return on such Bank's or the
Agent's Commitment with respect to any Revolving Credit Loans or the Revolving
Credit Loans to a level below that which such Bank or the Agent could have
achieved but for such adoption, change or compliance (taking into consideration
such Bank's or the Agent's then existing policies with respect to capital
adequacy and assuming full utilization of such entity's capital) by any amount
deemed by such Bank or (as the case may be) the Agent to be material, then such
Bank or the Agent may notify the Borrower of such fact. To the extent that the
amount of such reduction in the return on capital is not reflected in the Base
Rate, the Borrower and such Bank shall thereafter attempt to negotiate in good
faith, within thirty (30) days of the day on which the Borrower receives such
notice, an adjustment payable hereunder that will adequately compensate such
Bank in light of these circumstances. If the Borrower and such Bank are unable
to agree to such adjustment within thirty (30) days of the date on which the
Borrower receives such notice, then commencing on the date of such notice (but
not earlier than the effective date of any such increased capital requirement),
the fees payable hereunder shall increase by an amount that will, in such Bank's
reasonable determination, provide adequate compensation. Each Bank shall
allocate such cost increases among its customers in good faith and on an
equitable basis.
5.9. Certificate. A certificate setting forth any additional amounts
-----------
payable pursuant to (S)(S)5.7 or 5.8 and a brief explanation of such amounts
which are due, submitted by any Bank or the Agent to the Borrower, shall be
conclusive, absent manifest error, that such amounts are due and owing.
5.10. Indemnity. The Borrower agrees to indemnify each Bank and to hold
---------
each Bank harmless from and against any loss, cost or expense (including loss of
anticipated profits) that such Bank may sustain or incur as a consequence of (a)
default by the Borrower in payment of the principal amount of or any interest on
any Eurodollar Rate Loans as and when due and payable, including any such loss
or expense arising from interest or fees payable by such Bank to lenders of
funds obtained by it in order to maintain its Eurodollar Rate Loans, (b) default
by the Borrower in making a borrowing or conversion after the Borrower has given
(or is
-39-
deemed to have given) a Loan Request or a Conversion Request relating thereto in
accordance with (S)2.6 or (S)2.7 or (c) the making of any payment of a
Eurodollar Rate Loan or the making of any conversion of any such Revolving
Credit Loan to a Base Rate Loan on a day that is not the last day of the
applicable Interest Period with respect thereto, including interest or fees
payable by such Bank to lenders of funds obtained by it in order to maintain any
such Revolving Credit Loans.
5.11. Interest on Overdue Amounts. Overdue principal and (to the extent
---------------------------
permitted by applicable law) interest on the Revolving Credit Loans and all
other overdue amounts payable hereunder or under any of the other Loan Documents
shall bear interest compounded monthly and payable on demand at a rate per annum
equal to two percent (2%) above the Base Rate until such amount shall be paid in
full (after as well as before judgment).
5.12. Replacement Banks. Within thirty (30) days after (a) any Bank has
-----------------
demanded compensation from the Borrower pursuant to (S)(S)5.7 or 5.8 hereof, or
(b) there shall have occurred a change in law with respect to any Bank as a
consequence of which it shall have become unlawful for such Bank to make a
Eurodollar Rate Loan on any Drawdown Date, as described in (S)5.6 hereof (any
such Bank described in the foregoing clauses (a) or (b) is hereinafter referred
to as an "Affected Bank"), the Borrower may request that the Non-Affected Banks
-------- ----
acquire all, but not less than all, of the Affected Bank's outstanding Revolving
Credit Loans and assume all, but not less than all, of the Affected Bank's
Commitment. If the Borrower so requests, the Non-Affected Banks may elect to
acquire all or any portion of the Affected Bank's outstanding Revolving Credit
Loans and to assume all or any portion of the Affected Bank's Commitment. If the
Non-Affected Banks do not elect to acquire and assume all of the Affected Bank's
outstanding Revolving Credit Loans and Commitment, the Borrower may designate a
replacement bank or banks, which must be satisfactory to the Agent, to acquire
and assume that portion of the outstanding Revolving Credit Loans and Commitment
of the Affected Bank not being acquired and assumed by the Non-Affected Banks.
The provisions of (S)19 hereof shall apply to all reallocations pursuant to this
(S)5.12, and the Affected Bank and any Non-Affected Banks and/or replacement
banks which are to acquire the Revolving Credit Loans and Commitment of the
Affected Bank shall execute and deliver to the Agent, in accordance with the
provisions of (S)19 hereof, such Assignments and Acceptances and other
instruments, including, without limitation, Revolving Credit Notes, as are
required pursuant to (S)19 hereof to give effect to such reallocations. Any Non-
Affected Banks and/or replacement banks which are to acquire the Revolving
Credit Loans and Commitment of the Affected Bank shall be deemed to be Eligible
Assignees for all purposes of (S)19 hereof. On the effective date of the
applicable Assignments and Acceptances, the Borrower shall pay to the Affected
Bank all interest accrued on its Revolving Credit Loans up to but excluding such
date, along with any fees payable to such Affected Bank hereunder up to but
excluding such date.
6. COLLATERAL SECURITY AND GUARANTEES.
----------------------------------
6.1. Security of Borrower and Subsidiaries; Guaranty of Subsidiaries. The
---------------------------------------------------------------
Obligations shall be secured by a perfected first priority
-40-
security interest in certain of the assets of the Borrower (including a pledge
of the non-voting capital stock of each of the Borrower's Subsidiaries,
including, without limitation, the Unrestricted Subsidiaries, provided, however,
-------- -------
in the event such Unrestricted Subsidiary has incurred Indebtedness permitted by
(S)9.1(p) hereof and the lender of such Indebtedness has requested a pledge of
the non-voting capital stock of such Unrestricted Subsidiary by the Borrower,
the Borrower shall only be required to grant to the Agent for the benefit of the
Banks a second priority security interest in such non-voting capital stock until
such Indebtedness has been repaid in full) and its Restricted Subsidiaries
(other than AmeriKing Tennessee and AmeriKing Colorado until such time as such
Person is required to become a Guarantor hereunder pursuant to (S)8.17 hereof),
whether now owned or hereafter acquired, pursuant to the terms of the Security
Documents to which the Borrower and such Restricted Subsidiaries are parties.
The Obligations shall also be secured by a pledge of the non-voting capital
stock of each Unrestricted Subsidiary's Subsidiaries, provided, however, in the
-------- -------
event such Unrestricted Subsidiary has incurred Indebtedness permitted by
(S)9.1(p) hereof and the lender of such Indebtedness has requested a pledge of
the non-voting capital stock of such Unrestricted Subsidiary's Subsidiaries,
such Unrestricted Subsidiary shall only be required to grant to the Agent for
the benefit of the Banks a second priority security interest in such non-voting
capital stock until such Indebtedness has been repaid in full. In addition, the
Obligations shall also be guaranteed by each of the Borrower's Restricted
Subsidiaries other than AmeriKing Tennessee and AmeriKing Colorado (until such
time as such Person is required to become a Guarantor hereunder pursuant to
(S)8.17 hereof) pursuant to the terms of the Guaranty of such Restricted
Subsidiaries, and the Restricted Subsidiaries' obligations under such Guaranty
shall be secured by a perfected first priority security interest in certain of
the assets of such Restricted Subsidiary (including a pledge of the non-voting
capital stock of each of the Restricted Subsidiaries' Subsidiaries), whether now
owned or hereafter acquired, pursuant to the terms of the Security Documents to
which such Restricted Subsidiaries are parties.
6.2. Guaranties and Security of Holdings. Certain of the Obligations shall
-----------------------------------
also be guaranteed by Holdings pursuant to the terms of the Parent Guaranty. The
Obligations shall be secured by a perfected first priority security interest in
certain of the stock owned by Holdings, pursuant to the terms of the Stock
Pledge Agreement to which Holdings is a party.
7. REPRESENTATIONS AND WARRANTIES.
------------------------------
Each of the Borrower and, to the extent expressly set forth in this (S)7,
Holdings, represents and warrants to the Banks and the Agent as follows:
7.1. Corporate Authority.
-------------------
7.1.1. Incorporation; Good Standing. Each of Holdings, the Borrower
----------------------------
and each of their respective Subsidiaries (a) is a corporation duly
organized, validly existing and in good standing under the laws of its
state of incorporation, (b) has all requisite corporate power to own its
property and conduct its business as now conducted and as presently
contemplated, and (c) is in good standing as a foreign corporation and is
duly authorized to do
-41-
business in each jurisdiction where such qualification is necessary except
where a failure to be so qualified could not reasonably be expected to have
a materially adverse effect on the business, assets or financial condition
of the Borrower or such Subsidiary.
7.1.2. Authorization. The execution, delivery and performance of
-------------
this Credit Agreement and the other Loan Documents to which Holdings, the
Borrower or any of their Subsidiaries is or is to become a party and the
transactions contemplated hereby and thereby (a) are within the corporate
authority of such Person, (b) have been duly authorized by all necessary
corporate proceedings, (c) do not conflict with or result in any breach or
contravention of any provision of law, statute, rule or regulation to which
Holdings, the Borrower or any of their Subsidiaries is subject or any
judgment, order, writ, injunction, license or permit applicable to
Holdings, the Borrower or any of their Subsidiaries, the violation of which
would have a materially adverse effect on the business, assets or financial
condition of Holdings, the Borrower or such Subsidiary and (d) do not
conflict with any provision of the corporate charter or bylaws of, or any
agreement or other instrument binding upon, Holdings, the Borrower or any
of their Subsidiaries.
7.1.3. Enforceability. The execution and delivery of this Credit
--------------
Agreement and the other Loan Documents to which Holdings, the Borrower or
any of their Subsidiaries is or is to become a party will result in valid
and legally binding obligations of such Person enforceable against it in
accordance with the respective terms and provisions hereof and thereof,
except as enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting generally
the enforcement of creditors' rights and except to the extent that
availability of the remedy of specific performance or injunctive relief is
subject to the discretion of the court before which any proceeding therefor
may be brought.
7.2. Governmental Approvals. The execution, delivery and performance by
----------------------
Holdings, the Borrower and any of their Subsidiaries of this Credit Agreement
and the other Loan Documents, the Permitted Acquisition Documents, if any, and
the Capitalization Documents to which Holdings, the Borrower or any of their
Subsidiaries is or is to become a party and the transactions contemplated hereby
and thereby do not require the approval or consent of, or filing with, any
governmental agency or authority other than those already obtained and are not
in violation of any municipal or other local law, ordinance or governmental rule
or regulation relating to the occupancy or operation of any of the BKC
restaurants, which violation would have a material adverse effect on the
business, assets or financial condition of Holdings, the Borrower and their
Subsidiaries, taken as a whole
7.3. Title to Properties; Leases. Except as indicated on Schedule 7.3
--------------------------- ------------
hereto, Holdings, the Borrower and their Subsidiaries own or lease all of the
assets reflected in the pro forma consolidated balance sheet of Holdings, the
--- -----
Borrower and their Subsidiaries as at the Balance Sheet Date or acquired since
that date (except property and assets sold or otherwise disposed of in the
ordinary course of
-42-
business since that date), subject to no rights of others, including any
mortgages, leases, conditional sales agreements, title retention agreements,
liens or other encumbrances except Permitted Liens.
7.4. Financial Statements and Projections.
------------------------------------
7.4.1. Financial Statements. There has been furnished to each of the
--------------------
Banks a pro forma consolidated balance sheet of Holdings, the Borrower and
--- -----
their Subsidiaries as at the Closing Date, which properly gives effect to
the transactions contemplated hereby. Such balance sheet fairly presents
the financial condition of the Borrower and its Subsidiaries as at the
close of business on the date thereof. There are no contingent liabilities
of Holdings, the Borrower or any of their Subsidiaries as of such date
involving material amounts, which were not disclosed in such balance sheet
and the notes related thereto or in this Credit Agreement.
7.4.2. Projections. The projections of the annual operating budgets
-----------
of Holdings, the Borrower and their Subsidiaries on a consolidated basis,
including balance sheets and cash flow statements for the 1999 through 2002
fiscal years, copies of which have been delivered to each Bank, disclose
all assumptions made with respect to general economic, financial and market
conditions used in formulating such projections. To the knowledge of
Holdings, the Borrower or any of their Subsidiaries, no facts exist that
(individually or in the aggregate) would result in any material change in
any of such projections. The projections are based upon reasonable
estimates and assumptions, have been prepared on the basis of the
assumptions stated therein and reflect the reasonable estimates of
Holdings, the Borrower and their Subsidiaries of the results of operations
and other information projected therein.
7.5. No Material Changes, etc. (a) Since the Balance Sheet Date there has
------------------------
occurred no materially adverse change in the assets, financial condition or
business of Holdings, the Borrower and their Subsidiaries as shown on or
reflected in the consolidated balance sheet of Holdings, the Borrower and their
Subsidiaries as at the Balance Sheet Date other than changes in the ordinary
course of business that have not had any materially adverse effect either
individually or in the aggregate on the assets, business or financial condition
of Holdings, the Borrower or any of their Subsidiaries.
(b) Each of Holdings, the Borrower and each of its Subsidiaries (before
and after giving effect to the transactions contemplated by this Credit
Agreement, the Acquisition Credit Agreement and the other Loan Documents) (i) is
solvent, (ii) has assets having a fair value in excess of its liabilities, (iii)
has assets having a fair value in excess of the amount required to pay its
liabilities on existing debts as such debts become absolute and matured, and
(iv) has, and expects to continue to have, access to adequate capital for the
conduct of its business and the ability to pay its debts from time to time
incurred in connection with the operation of its business as such debts mature.
-43-
7.6. Franchises, Patents, Copyrights, etc. Each of the Borrower and its
------------------------------------
Subsidiaries possesses all franchises, patents, copyrights, trademarks, trade
names, licenses and permits, and rights in respect of the foregoing, adequate
for the conduct of its business substantially as now conducted without known
conflict with any rights of others.
7.7. Litigation. Except as set forth in Schedule 7.7 hereto, there are no
---------- ------------
actions, suits, proceedings or investigations of any kind pending or threatened
against Holdings, the Borrower or any of their Subsidiaries before any court,
tribunal or administrative agency or board that, if adversely determined, might,
either in any case or in the aggregate, materially adversely affect the
properties, assets, financial condition or business of Holdings, the Borrower
and their Subsidiaries or materially impair the right of Holdings, the Borrower
and their Subsidiaries, considered as a whole, to carry on business
substantially as now conducted by them, or result in any substantial liability
not adequately covered by insurance, or for which adequate reserves are not
maintained on the consolidated balance sheet of Holdings, the Borrower and their
Subsidiaries, or which question the validity of this Credit Agreement or any of
the other Loan Documents, or any action taken or to be taken pursuant hereto or
thereto.
7.8. No Materially Adverse Contracts, etc. None of Holdings, the Borrower
------------------------------------
nor any of their Subsidiaries is subject to any charter, corporate or other
legal restriction, or any judgment, decree, order, rule or regulation that has
or is expected in the future to have a materially adverse effect on the
business, assets or financial condition of Holdings, the Borrower or any of
their Subsidiaries. None of Holdings, the Borrower nor any of their Subsidiaries
is a party to any contract or agreement that has or is expected, in the judgment
of the Borrower's officers, to have any materially adverse effect on the
business of Holdings, the Borrower or any of their Subsidiaries considered as a
whole.
7.9. Compliance with Other Instruments, Laws, etc. None of Holdings, the
--------------------------------------------
Borrower nor any of their Subsidiaries is in violation of any provision of its
charter documents, bylaws, or any agreement or instrument to which it may be
subject or by which it or any of its properties may be bound or any decree,
order, judgment, statute, license, rule or regulation, in any of the foregoing
cases in a manner that could result in the imposition of substantial penalties
or materially and adversely affect the financial condition, properties or
business of Holdings, the Borrower or any of their Subsidiaries considered as a
whole.
7.10. Tax Status. Each of Holdings, the Borrower and their Subsidiaries
----------
(a) have made or filed all federal and state income and all other tax returns,
reports and declarations required by any jurisdiction to which any of them is
subject, (b) have paid all taxes and other governmental assessments and charges
shown or determined to be due on such returns, reports and declarations, except
those being contested in good faith and by appropriate proceedings and (c) have
set aside on their books provisions reasonably adequate for the payment of all
taxes for periods subsequent to the periods to which such returns, reports or
declarations apply. There are no unpaid taxes in any material amount claimed to
be due by the taxing authority of any jurisdiction, and the officers of the
Borrower know of no basis for any such claim.
-44-
7.11. No Event of Default. No Default or Event of Default has occurred and
-------------------
is continuing.
7.12. Holding Company and Investment Company Acts. None of Holdings, the
-------------------------------------------
Borrower nor any of their Subsidiaries is a "holding company", or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding company", as
such terms are defined in the Public Utility Holding Company Act of 1935; nor is
it an "investment company", or an "affiliated company" or a "principal
underwriter" of an "investment company", as such terms are defined in the
Investment Company Act of 1940.
7.13. Absence of Financing Statements, etc. Except with respect to
------------------------------------
Permitted Liens or as permitted by this Credit Agreement or the Security
Documents, there is no financing statement, security agreement, chattel
mortgage, real estate mortgage or other document filed or recorded with any
filing records, registry or other public office, that purports to cover, affect
or give notice of any present or possible future lien on, or security interest
in, any assets or property of Holdings, the Borrower or any of their
Subsidiaries or any rights relating thereto.
7.14. Perfection of Security Interest. All filings, assignments, pledges
-------------------------------
and deposits of documents or instruments have been made and all other actions
have been taken that are necessary or advisable, under applicable law, to
establish and perfect the Agent's security interest in the Collateral. The
Collateral and the Agent's rights with respect to the Collateral are not subject
to any setoff, claims, withholdings or other defenses. The Borrower, its
Subsidiaries or Holdings, as the case may be, is the owner of the Collateral
free from any lien, security interest, encumbrance and any other claim or
demand, except for Permitted Liens.
7.15. Certain Transactions. Except as set forth on Schedule 7.15 hereto,
-------------------- -------------
and for arm's length transactions pursuant to which Holdings, the Borrower or
any of their Subsidiaries makes payments in the ordinary course of business upon
terms no less favorable than Holdings, the Borrower or such Subsidiary could
obtain from third parties, none of the officers, directors, or employees of
Holdings, the Borrower or any of their Subsidiaries is presently a party to any
transaction with Holdings, the Borrower or any of their Subsidiaries (other than
for services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Borrower, any corporation, partnership, trust or other entity
in which any officer, director, or any such employee has a substantial interest
or is an officer, director, trustee or partner.
7.16. Employee Benefit Plans.
----------------------
7.16.1. In General. Each Employee Benefit Plan has been maintained
----------
and operated in compliance in all material respects with the provisions of
ERISA and, to the extent applicable, the Code, including but not limited to
the provisions thereunder respecting prohibited transactions.
-45-
7.16.2. Terminability of Welfare Plans. Under each Employee Benefit
------------------------------
Plan which is an employee welfare benefit plan within the meaning of
(S)3(1) or (S)3(2)(B) of ERISA, no benefits are due unless the event giving
rise to the benefit entitlement occurs prior to plan termination (except as
required by Title I, Part 6 of ERISA). The Borrower or an ERISA Affiliate,
as appropriate, may terminate each such Plan at any time (or at any time
subsequent to the expiration of any applicable bargaining agreement) in the
discretion of the Borrower or such ERISA Affiliate without liability to any
Person.
7.16.3. Guaranteed Pension Plans. Each contribution required to be
------------------------
made to a Guaranteed Pension Plan, whether required to be made to avoid the
incurrence of an accumulated funding deficiency, the notice or lien
provisions of (S)302(f) of ERISA, or otherwise, has been timely made. No
waiver of an accumulated funding deficiency or extension of amortization
periods has been received with respect to any Guaranteed Pension Plan. No
liability to the PBGC (other than required insurance premiums, all of which
have been paid) has been incurred by the Borrower or any ERISA Affiliate
with respect to any Guaranteed Pension Plan and there has not been any
ERISA Reportable Event, or any other event or condition which presents a
material risk of termination of any Guaranteed Pension Plan by the PBGC.
Based on the latest valuation of each Guaranteed Pension Plan (which in
each case occurred within twelve months of the date of this
representation), and on the actuarial methods and assumptions employed for
that valuation, the aggregate benefit liabilities of all such Guaranteed
Pension Plans within the meaning of (S)4001 of ERISA did not exceed the
aggregate value of the assets of all such Guaranteed Pension Plans,
disregarding for this purpose the benefit liabilities and assets of any
Guaranteed Pension Plan with assets in excess of benefit liabilities.
7.16.4. Multiemployer Plans. Neither the Borrower nor any ERISA
-------------------
Affiliate has incurred any material liability (including secondary
liability) to any Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan under (S)4201 of ERISA or as a
result of a sale of assets described in (S)4204 of ERISA. Neither the
Borrower nor any ERISA Affiliate has been notified that any Multiemployer
Plan is in reorganization or insolvent under and within the meaning of
(S)4241 or (S)4245 of ERISA or that any Multiemployer Plan intends to
terminate or has been terminated under (S)4041A of ERISA.
7.17. Regulations G, U and X. The proceeds of the Revolving Credit Loans
----------------------
shall be used (a) to convert existing Indebtedness to the Banks under the
Original Credit Agreement to Revolving Credit Loans and Letters of Credit, as
the case may be, hereunder, (b) to finance all or any portion of the Permitted
Financed Acquisitions and (c) for working capital and general corporate
purposes. The Borrower will obtain Letters of Credit solely for working capital
and general corporate purposes. No portion of any Revolving Credit Loan is to be
used, and no portion of any Letter of Credit is to be obtained, for the purpose
of purchasing or carrying any "margin security" or "margin stock" as such terms
are used in
-46-
Regulations G, U and X of the Board of Governors of the Federal Reserve System,
12 C.F.R. Parts 221 and 224.
7.18. Environmental Compliance. To the best of the Borrower's knowledge,
------------------------
except as disclosed on Schedule 7.18 attached hereto:
-------------
(a) none of the Borrower, its Subsidiaries or any operator of the
Real Estate or any operations thereon is in violation, nor has the Borrower
or any of its Subsidiaries received notice that it, or any operator of the
Real Estate is in alleged violation, of any judgment, decree, order, law,
license, rule or regulation pertaining to environmental matters, including
without limitation, those arising under the Resource Conservation and
Recovery Act ("RCRA"), the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 as amended ("CERCLA"), the Superfund
Amendments and Reauthorization Act of 1986 ("XXXX"), the Federal Clean
Water Act, the Federal Clean Air Act, the Toxic Substances Control Act, or
any state or local statute, regulation, ordinance, order or decree relating
to health, safety or the environment (hereinafter "Environmental Laws"),
which violation would have a material adverse effect on the environment or
the business, assets or financial condition of the Borrower and its
Subsidiaries considered as a whole;
(b) neither the Borrower nor any of its Subsidiaries has received
notice from any third party including, without limitation: any federal,
state or local governmental authority: (i) that any one of them has been
identified by the United States Environmental Protection Agency ("EPA") as
a potentially responsible party under CERCLA with respect to a site listed
on the National Priorities List, 40 C.F.R. Part 000 Xxxxxxxx X (1986); (ii)
that any hazardous waste, as defined by 42 U.S.C. (S)6903(5), any hazardous
substances as defined by 42 U.S.C. (S)9601(14), any pollutant or
contaminant as defined by 42 U.S.C. (S)9601(33) and any toxic substances,
oil or hazardous materials or other chemicals or substances regulated by
any Environmental Laws ("Hazardous Substances") which any one of them has
generated, transported or disposed of has been found at any site at which a
federal, state or local agency or other third party has conducted or has
ordered that the Borrower or any of its Subsidiaries conduct a remedial
investigation, removal or other response action pursuant to any
Environmental Law; or (iii) except to the extent that the following would
not have a material adverse effect on the business, assets of financial
condition of the Borrower and its Subsidiaries, taken as a whole, that it
is or shall be a named party to any claim, action, cause of action,
complaint, or legal or administrative proceeding (in each case, contingent
or otherwise) arising out of any third party's incurrence of costs,
expenses, losses or damages of any kind whatsoever in connection with the
release of Hazardous Substances;
(c) (i) no portion of the Real Estate has been used for the
handling, processing, storage or disposal of Hazardous Substances other
than in accordance with applicable Environmental Laws the noncompliance
with which would have a material adverse effect on the business, assets or
financial condition of the Borrower and its Subsidiaries, taken as a whole;
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and no underground tank or other underground storage receptacle for
Hazardous Substances is located on any portion of the Real Estate in
violation of any applicable Environmental Law the noncompliance with which
would have a material adverse effect on the business, assets or financial
condition of the Borrower and its Subsidiaries, taken as a whole; (ii) in
the course of any activities conducted by the Borrower, its Subsidiaries or
operators of such Person's properties, no Hazardous Substances have been
generated or are being used on the Real Estate except in accordance (in all
material respects) with applicable Environmental Laws the noncompliance
with which would have a material adverse effect on the business, assets or
financial condition of the Borrower and its Subsidiaries, taken as a whole;
(iii) there have been no releases (i.e. any past or present releasing,
spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, disposing or dumping) or threatened releases of
Hazardous Substances on, upon, into or from the properties of the Borrower
or its Subsidiaries, which releases would have a material adverse effect on
the value of any of the business, assets or financial condition of the
Borrower and its Subsidiaries, taken as a whole; (iv) there have been no
releases on, upon, from or into any real property in the vicinity of any of
the Real Estate which, through soil or groundwater contamination, may have
come to be located on any of the Real Estate, and which would have a
material adverse effect on the business, assets or financial condition of
the Borrower and its Subsidiaries, taken as a whole and (v) in addition,
except to the extent that the following would not have a materially adverse
effect on the business, assets, or financial conditions of the Borrower and
its Subsidiaries, taken as a whole any Hazardous Substances that have been
generated on any of the Real Estate have been transported offsite only by
carriers having an identification number issued by the EPA, treated or
disposed of only by treatment or disposal facilities maintaining valid
permits as required under applicable Environmental Laws, which transporters
and facilities have been and are operating in compliance with such permits
and applicable Environmental Laws; and
(d) none of the Borrower and its Subsidiaries, or any of the Real
Estate is subject to any applicable environmental law requiring the
performance of Hazardous Substances site assessments, or the removal or
remediation of Hazardous Substances, or the giving of notice to any
governmental agency or the recording or delivery to other Persons of an
environmental disclosure document or statement by virtue of the
transactions set forth herein and contemplated hereby.
7.19. Subsidiaries, etc. As of the Closing Date, the Borrower's
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Subsidiaries are AmeriKing Colorado, AmeriKing Tennessee and Indiana Holdings,
each of which is a wholly-owned Subsidiary of the Borrower and AmeriKing Indiana
L.P., a Delaware limited partnership of which the Borrower is general partner
and Indiana Holdings is limited partner. None of the Subsidiaries are
Unrestricted Subsidiaries. Holdings is the record and beneficial owner of 100%
of the outstanding capital stock of the Borrower. Except as set forth on
Schedule 7.19 hereto, neither the Borrower nor any Subsidiary of the Borrower is
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engaged in any joint venture or partnership with any other Person.
