EXHIBIT 4.4
AFC ENTERPRISES, INC.
CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as of May 21, 1997, and entered into by and
among AFC ENTERPRISES, INC., a Minnesota corporation ("COMPANY"), XXXXXXX
XXXXX CREDIT PARTNERS L.P. ("GSCP"), as arranging agent (in such capacity,
"ARRANGING AGENT") and as syndication agent (in such capacity, "SYNDICATION
AGENT"), CANADIAN IMPERIAL BANK OF COMMERCE, acting through its New York Agency
("CIBC") as administrative agent for Lenders (in such capacity,
"ADMINISTRATIVE AGENT") and THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE
PAGES HEREOF (each individually referred to herein as a "LENDER" and
collectively as "LENDERS").
R E C I T A L S
- - - - - - - -
WHEREAS, Company proposes to issue the Unsecured Subordinated Notes (this
and other terms used in these recitals without definition being used as defined
in subsection 1.1) to provide a portion of the financing necessary to consummate
the Refinancings;
WHEREAS, Company desires that Lenders extend certain credit facilities to
Company to provide the remainder of the financing necessary to consummate the
Refinancings and to provide financing for working capital, to finance Permitted
Acquisitions and for other general corporate purposes;
WHEREAS, Company desires to secure all of the Obligations hereunder and
under the other Loan Documents by granting to Administrative Agent, on behalf of
Lenders, a first priority Lien on substantially all of its real, personal and
mixed property of Company; and
WHEREAS, all of the Subsidiaries of Company have agreed to guarantee the
Obligations hereunder and under the other Loan Documents and to secure their
guaranties by granting to Administrative Agent, on behalf of Lenders, a first
priority Lien on substantially all of their respective real, personal and mixed
property.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Company, Lenders and Agents agree as
follows:
SECTION 1.
DEFINITIONS
1.1 CERTAIN DEFINED TERMS.
---------------------
The following terms used in this Agreement shall have the following
meanings:
1
"ACQUISITION FACILITY COMMITMENT" means the commitment of a Lender to
make Acquisition Loans to the Company pursuant to subsection 2.1A(i) and
"ACQUISITION FACILITY COMMITMENTS" means such commitments of all Lenders
in the aggregate.
"ACQUISITION LOAN EXPOSURE" means, with respect to any Lender as of
any date of determination (i) prior to the termination of the Acquisition
Facility Commitments, that Lender's Acquisition Facility Commitment and
(ii) after the termination of the Acquisition Facility Commitments, the sum
of the aggregate outstanding principal amount of the Acquisition Loans of
that Lender.
"ACQUISITION LOAN NOTES" means (i) the promissory notes of the
Company issued pursuant to subsection 2.1E(a) on the Closing Date and (ii)
any promissory notes issued by the Company pursuant to subsection 9.1B(i)
in connection with assignments of the Acquisition Facility Commitments or
Acquisition Loans, in each case substantially in the form of Exhibit IV-A
------------
annexed hereto, as they may be amended, restated, supplemented or otherwise
modified from time to time.
"ACQUISITION LOANS" means the Loans made by Lenders to the Company
pursuant to subsection 2.1A(i).
"ACQUISITION PROPERTIES" has the meaning assigned that term in
subsection 6.11.
"ADDITIONAL MORTGAGES" has the meaning assigned that term in
subsection 6.11.
"ADJUSTED EURODOLLAR RATE" means, for any Interest Rate
Determination Date with respect to an Interest Period for a Eurodollar Rate
Loan, the rate per annum obtained by dividing (i) the arithmetic mean of
--------
the offered rates for deposits in Dollars with a term comparable to such
Interest Period that appears on the Telerate British Bankers Assoc.
Interest Settlement Rates Page (as defined below) at approximately 11:00
A.M., London time, on the second full Business Day preceding the first day
of such Interest Period ("TELERATE BRITISH BANKERS ASSOC. INTEREST
SETTLEMENT RATES PAGE" shall mean the display designated as Page 3750 on
the Telerate System Incorporated Service (or such other page as may replace
such page on such service for the purpose of displaying the rates at which
Dollar deposits are offered by leading banks in the London interbank
deposit market)) by (ii) a percentage equal to 100% minus the stated
-- -----
maximum rate of all reserve requirements (including, without limitation,
any marginal, emergency, supplemental, special or other reserves)
applicable on such Interest Rate Determination Date to any member bank of
the Federal Reserve System in respect of "Eurocurrency liabilities" as
defined in Regulation D (or any successor category of liabilities under
Regulation D).
"ADMINISTRATIVE AGENT" means Canadian Imperial Bank of Commerce
(acting through its New York Agency) in its capacity as administrative
agent for Lenders and also means and includes any successor Administrative
Agent appointed pursuant to subsection 9.5A.
2
"AFFECTED LENDER" has the meaning assigned to that term in
subsection 2.6C.
"AFFILIATE", as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common control
with, that Person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling",
"controlled by" and "under common control with"), as applied to any
Person, means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of that
Person, whether through the ownership of voting securities or by contract
or otherwise.
"AGENT" means, individually, each of the Administrative Agent,
Arranging Agent, and Syndication Agent, and "AGENTS" means Administrative
Agent, Arranging Agent and Syndication Agent, collectively.
"AGREEMENT" means this Credit Agreement, dated as of May 21, 1997,
as it may be amended, supplemented or otherwise modified from time to time.
"APPLICABLE COMMITMENT FEE PERCENTAGE" means, (i) from the Closing
Date until the delivery of financial statements for the second fiscal
quarter of 1998 as required pursuant to subsection 6.1(ii), .50% per annum
and (ii) thereafter, a percentage per annum determined by reference to the
Leverage Ratio as set forth below:
==========================================
APPLICABLE
COMMITMENT
LEVERAGE RATIO FEE PERCENTAGE
==========================================
greater than 3.00:1.00 1/2%
------------------------------------------
less than or equal to
3.00:1.00 but greater 3/8%
than 2.50:1.00
------------------------------------------
less than or equal to 1/4%%
2.50:1.00
==========================================
The Commitment Fee Percentage shall be determined by reference to the
Leverage Ratio in effect from time to time; provided, however, that (x) no
-------- -------
change in the Applicable Commitment Fee Percentage shall be effective until
three Business Days after the date on which the Administrative Agent
receives the financial statements and a Compliance Certificate pursuant to
subsection 6.1(iv) calculating the Leverage Ratio, and (y) the Applicable
Commitment Fee Percentage shall be .50% per annum for so long as Company
has not submitted to the Administrative Agent the information described in
clause (x) of this proviso as and when required under subsection 6.1(ii).
3
"APPLICABLE MARGIN" means, (i) from the Closing Date until the
delivery of financial statements for the second fiscal quarter of 1998 as
required pursuant to subsection 6.1(ii), 1.25% per annum for Base Rate
Loans and 2.25% per annum for Eurodollar Rate Loans, and (ii) thereafter, a
percentage per annum determined by reference to the Leverage Ratio as set
forth below
==================================================================
APPLICABLE MARGIN APPLICABLE MARGIN
FOR BASE FOR EURODOLLAR
LEVERAGE RATIO RATE LOANS RATE LOANS
==================================================================
greater than 3.50:1.0 1-1/4% 2-1/4%
------------------------------------------------------------------
less than or equal to
3.50:1.00 but greater 7/8% 1-7/8%
than 3.00:1.00
------------------------------------------------------------------
less than or equal to
3.00:1.00 but greater 5/8% 1-5/8%
than 2.50:1.00
------------------------------------------------------------------
less than or equal to
2.50:1.00 but greater 3/8% 1-3/8%
than 2.00:1.00
------------------------------------------------------------------
less than or equal to 1/8% 1-1/8%
2.00:1.00
==================================================================
The Applicable Margin for each Base Rate Loan shall be determined by
reference to the Leverage Ratio in effect from time to time and the
Applicable Margin for each Eurodollar Rate Loan shall be determined by
reference to the ratio in effect on the first day of the Interest Period
for such Loan; provided, however, that (x) no change in the Applicable
-------- -------
Margin shall be effective until three Business Days after the date on which
the Administrative Agent receives the financial statements and a Compliance
Certificate pursuant to subsection 6.1(iv) calculating the Leverage Ratio,
and (y) the Applicable Margin shall be 1.25%, in the case of Base Rate
Loans, and 2.25%, in the case of Eurodollar Rate Loans, for so long as
Company has not submitted to the Administrative Agent the information
described in clause (x) of this proviso as and when required under
subsection 6.1(ii).
"ARRANGING AGENT" means GSCP in its capacity as arranging agent.
"ASSET SALE" means the sale by Company or any of its Subsidiaries to
any Person of (i) any of the stock of any of Company's Subsidiaries, (ii)
substantially all of the assets of any division or line of business of
Company or any of its Subsidiaries, or (iii) any other assets (whether
tangible or intangible) of Company or any of its Subsidiaries outside of
the ordinary course of business excluding tangible personal property that
---------
in the
4
reasonable judgment of Company, has become uneconomic, obsolete or worn out
and which is disposed of in the ordinary course of business; and (iii) any
other such assets to the extent that the aggregate amount of sales of such
assets during any fiscal year is equal to or less than $1,000,000.
"ASSIGNMENT AGREEMENT" means an Assignment Agreement in
substantially the form of Exhibit VIII annexed hereto.
------------
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"BASE RATE" means, at any time, the higher of (i) the Prime Rate or
(ii) the rate which is 1/2 of 1% in excess of the Federal Funds Effective
Rate.
"BASE RATE LOANS" means Loans bearing interest at rates determined
by reference to the Base Rate as provided in subsection 2.2A.
"BUSINESS DAY" means (i) for all purposes other than as covered by
clause (ii) below, any day excluding Saturday, Sunday and any day which is
a legal holiday under the laws of the States of Georgia or New York or is a
day on which banking institutions located in either such state are
authorized or required by law or other governmental action to close, and
(ii) with respect to all notices, determinations, fundings, issuances and
payments in connection with the Adjusted Eurodollar Rate or any Eurodollar
Rate Loans, any day that is a Business Day described in clause (i) above
and that is also (a) a day for trading by and between banks in Dollar
deposits in the London interbank market and (b) a day on which banking
institutions are open for business in London.
"CAPITAL LEASE", as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee that,
in conformity with GAAP, is accounted for as a capital lease on the balance
sheet of that Person.
"CASH" means money, currency or a credit balance in a Deposit
Account.
"CASH EQUIVALENTS" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed
as to interest and principal by the United States Government or (b) issued
by any agency of the United States the obligations of which are backed by
the full faith and credit of the United States, in each case maturing
within one year after such date; (ii) 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, in each case
maturing within one year after such date and having, at the time of the
acquisition thereof, the highest rating obtainable from either Standard &
Poor's Ratings Group ("S&P") or Xxxxx'x Investors Service, Inc.
("MOODY'S"); (iii) commercial paper maturing no more than one year from the
date of creation thereof and having, at the time of the acquisition
thereof, a rating of at least A-1 from S&P or at least P-1 from Moody's;
(iv) certificates of deposit or bankers'
5
acceptances maturing within one year after such date and issued or accepted
by any Lender or by any commercial bank organized under the laws of the
United States of America or any state thereof or the District of Columbia
or any foreign country that (a) is at least "adequately capitalized" (as
defined in the regulations of its primary Federal banking regulator) and
(b) has Tier 1 capital (as defined in such regulations) of not less than
$100,000,000 (a "CASH EQUIVALENT BANK"); (v) Eurodollar time deposits
having a maturity of less than one year purchased directly from any Lender
or Cash Equivalent Bank; and (vi) shares of any money market mutual fund
that (a) has at least 95% of its assets invested continuously in the types
of investments referred to in clauses (i) through (v) above, (b) has net
assets of not less than $500,000,000, and (c) has the highest rating
obtainable from either S&P or Moody's.
"CASH INTEREST COVERAGE RATIO" has the meaning assigned to that term
in subsection 7.6A.
"CASH PROCEEDS" means, with respect to any Asset Sale, Cash payments
(including any Cash received by way of deferred payment pursuant to, or
monetization of, a note receivable or otherwise, but only as and when so
received) received from such Asset Sale.
"CERTIFICATE RE NON-BANK STATUS" means a certificate substantially
in the form of Exhibit IX annexed hereto delivered by a Lender to
----------
Administrative Agent pursuant to subsection 2.7B(iii).
"CHESAPEAKE TRANSACTION" means the acquisition by the Company from
the American Bagel Company of all the intangible assets of the franchise
business of Chesapeake Bagel Bakery.
"CIBC" has the meaning assigned to that term in the introduction to
this Agreement.
"CLOSING DATE" means the date on or before June 30, 1997, on which
the conditions to the making of Initial Loans under subsection 4.1 are
satisfied.
"COLLATERAL" means, collectively, all real, personal and mixed
property collateral securing the Obligations pursuant to the Collateral
Documents.
"COLLATERAL ACCOUNT" has the meaning assigned to that term in the
Collateral Account Agreement.
"COLLATERAL ACCOUNT AGREEMENT" means the Collateral Account
Agreement executed by Company and Administrative Agent on the Closing Date,
substantially in the form of Exhibit X annexed hereto, pursuant to which
---------
Company may pledge cash to Administrative Agent to secure the obligations
of Company to reimburse Issuing Lender for payments made under one or more
Letters of Credit as provided in Section 8, as such
6
Collateral Account Agreement may hereafter be amended, supplemented or
otherwise modified from time to time.
"COLLATERAL DOCUMENTS" means the Company Pledge Agreement, the
Company Security Agreement, the Company Trademark Security Agreement, the
Company Patent and Copyright Security Agreement, the Collateral Account
Agreement, the Subsidiary Pledge Agreements, the Subsidiary Security
Agreements, the Subsidiary Trademark Security Agreements, the Mortgages and
all other instruments or documents delivered by any Loan Party pursuant to
this Agreement or any of the other Loan Documents in order to grant to
Administrative Agent, on behalf of Lenders, a Lien on any real, personal or
mixed property of that Loan Party as security for the Obligations.
"COMMITMENTS" means the commitments of Lenders to make Loans as set
forth in subsection 2.1A.
"COMPANY" has the meaning assigned to that term in the introduction
to this Agreement.
"COMPANY COMMON STOCK" means the common stock of Company, par value
$0.01 per share.
"COMPANY PATENT AND COPYRIGHT SECURITY AGREEMENT" means the Patent
Collateral and Security Agreement executed by Company and Administrative
Agent, substantially in the form of Exhibit XIV annexed hereto, as such
-----------
Patent Collateral and Security Agreement may hereafter be amended,
supplemented or otherwise modified from time to time.
"COMPANY PLEDGE AGREEMENT" means, collectively, the Pledge Agreement
executed by Company and Administrative Agent, substantially in the form of
Exhibit XI annexed hereto, relating to the pledge of the shares of capital
----------
stock of its Subsidiary(ies) as such Pledge Agreement may hereafter be
amended, supplemented or otherwise modified from time to time.
"COMPANY SECURITY AGREEMENT" means the Security Agreement executed
by Company and Administrative Agent, substantially in the form of Exhibit
-------
XII annexed hereto, as such Security Agreement may hereafter be amended,
---
supplemented or otherwise modified from time to time.
"COMPANY TRADEMARK SECURITY AGREEMENT" means the Trademark
Collateral Security Agreement executed by Company and Administrative Agent,
substantially in the form of Exhibit XIII annexed hereto, as such Trademark
------------
Collateral Security Agreement may hereafter be amended, supplemented or
otherwise modified from time to time.
7
"COMPLIANCE CERTIFICATE" means an Officer's Certificate
substantially in the form of Exhibit V annexed hereto delivered to
---------
Administrative Agent and Lenders by Company pursuant to subsection 6.1(iv).
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the sum
of (i) the aggregate of all expenditures (whether paid in cash or other
consideration or accrued as a liability and including that portion of
Capital Leases which is capitalized on the consolidated balance sheet of
Company and its Subsidiaries) by Company and its Subsidiaries during that
period that, in conformity with GAAP, are included in "additions to
property, plant or equipment" or comparable items reflected in the
consolidated statement of cash flows of Company and its Subsidiaries plus
----
(ii) to the extent not covered by clause (i) of this definition, the
aggregate of all expenditures by Company and its Subsidiaries during that
period to acquire (by purchase or otherwise) (a) the business, property or
fixed assets of any Person, or (b) stock or other evidence of beneficial
ownership of any Person to the extent the purchase price of such stock or
other evidence of beneficial ownership of such Person is appropriately
allocated to property, plant, or equipment in accordance with GAAP;
provided, however, Consolidated Capital Expenditures shall not include
-------- -------
expenditures made from the proceeds of any insurance or condemnation
payments (or payments made in lieu of condemnation) received by Company and
its Subsidiaries and used to repair or replace the damaged property with
respect to which such proceeds were received.
"CONSOLIDATED CASH INTEREST EXPENSE" means, for any period,
Consolidated Interest Expense for such period excluding, however, any
--------- -------
interest expense not payable in Cash (including amortization of discount
and amortization of debt issuance costs).
"CONSOLIDATED CURRENT ASSETS" means, as at any date of
determination, the total assets of Company and its Subsidiaries on a
consolidated basis which may properly be classified as current assets in
conformity with GAAP excluding Cash and Cash Equivalents.
"CONSOLIDATED CURRENT LIABILITIES" means, as at any date of
determination, the total liabilities of Company and its Subsidiaries on a
consolidated basis which may properly be classified as current liabilities
in conformity with GAAP excluding, however, the current portion of long-
term Indebtedness.
"CONSOLIDATED EBITDA" means, for any period, the sum of the amounts
for such period of (i) Consolidated Net Income, (ii) Consolidated Interest
Expense, (iii) provisions for taxes based on income, (iv) total
depreciation expense, (v) total amortization expense, (vi) other non-cash
items reducing Consolidated Net Income (excluding any such non-cash charge
to the extent that it represents an accrual of or reserve for cash
expenditures in any future period) and (vii) to the extent deducted in
determining Consolidated Net Income fees, expenses and similar transaction
costs paid in connection with Permitted Acquisitions less (viii) other non-
----
cash items increasing Consolidated Net Income, all of the foregoing
8
as determined on a consolidated basis for Company and its Subsidiaries in
conformity with GAAP.
"CONSOLIDATED EXCESS CASH FLOW" means, for any period, an amount (if
positive) equal to (i) the sum, without duplication, of the amounts for
such period of (a) Consolidated EBITDA and (b) the Consolidated Working
Capital Adjustment minus (ii) the sum, without duplication, of the amounts
-----
for such period of (a) voluntary, mandatory and scheduled repayments of
Consolidated Total Debt (excluding repayments of revolving loans except to
the extent the revolving loan commitments are permanently reduced in
connection with such repayments and mandatory repayments of the Loans
pursuant to subsection 2.4B.(iii)), (b) Consolidated Capital Expenditures
(net of any proceeds of any related financings with respect to such
expenditures or equity contributions applied to finance such expenditures),
(c) Consolidated Cash Interest Expense, (d) provisions for current taxes
based on income of Company and its Subsidiaries and payable in cash with
respect to such period, (e) to the extent not included in Consolidated
Capital Expenditures, payments made in connection with Permitted
Acquisitions (net of any proceeds of any related financing with respect to
such expenditures or equity contributions applied to finance such
expenditures) and (f) to the extent not otherwise deducted in calculating
Consolidated Net Income or included in Consolidated Capital Expenditures,
payments made under Permitted Earnout Agreements.
"CONSOLIDATED FIXED CHARGES" means, for any period, an amount equal
to the sum of the amounts for such period of (i) scheduled repayments of
principal of all Indebtedness (as reduced as a result of prepayments
pursuant to subsection 2.4B in the case of Indebtedness hereunder), (ii)
Consolidated Cash Interest Expense, (iii) Maintenance Capital Expenditures
(net of related financings) and (iv) the portion of taxes based on income
actually paid in cash (excluding taxes on extraordinary gains) all as
determined for Company and its Subsidiaries on a consolidated basis in
conformity with GAAP.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, (i) total
interest expense (including that portion attributable to Capital Leases in
accordance with GAAP) and capitalized interest including, without
limitation, all commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing and net
costs under Interest Rate Agreements, but excluding that portion
attributable to (a) amortization expense associated with the Transaction
Costs, (b) the write-off of unamortized deferred financing costs taken by
Company in connection with the refinancings of Company and its Subsidiaries
on a consolidated basis with respect to all outstanding Indebtedness of
Company and its Subsidiaries, and (c) any amounts referred to in subsection
2.3 payable to Arranging Agent, Syndication Agent, Administrative Agent or
Lenders on or before the Closing Date, minus (ii) total interest income of
-----
Company and its Subsidiaries on a consolidated basis.
"CONSOLIDATED MAINTENANCE CAPITAL EXPENDITURES" means, for any
period, the aggregate amount of all Consolidated Capital Expenditures
actually paid by Company and
9
its Subsidiaries during that period for repair or maintenance of property,
plant or equipment.
"CONSOLIDATED NET INCOME" means, for any period, the net income (or
loss) of Company and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in conformity with
GAAP; provided that there shall be excluded (i) the income (or loss) of any
--------
Person (other than a Subsidiary of Company) in which any other Person
(other than Company or any of its Subsidiaries) has an equity or similar
interest, except to the extent of the amount of dividends or other
distributions actually paid to Company or any of its Subsidiaries by such
Person during such period, (ii) the income (or loss) of any Person accrued
prior to the date it becomes a Subsidiary of Company or is merged into or
consolidated with Company or any of its Subsidiaries or that Person's
assets are acquired by Company or any of its Subsidiaries, (iii) the income
of any Subsidiary of Company to the extent that the declaration or payment
of dividends or similar distributions by that Subsidiary of that income is
not at the time permitted by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary (other than such
restriction contained in documents governing Indebtedness of such
Subsidiary permitted under this Agreement), (iv) any after-tax gains or
losses attributable to Asset Sales or returned surplus assets of any
Pension Plan, and (v) (to the extent not included in clauses (i) through
(iv) above) any net extraordinary gains or net non-cash extraordinary
losses.
"CONSOLIDATED TOTAL DEBT" means, as at any date of determination,
the aggregate stated balance sheet amount of all Indebtedness of Company
and its Subsidiaries, less an amount equal to the Cash balances of Company
----
and its Subsidiaries (net of any overdraft balances), determined on a
consolidated basis in accordance with GAAP.
"CONSOLIDATED WORKING CAPITAL" means, as at any date of
determination, the amount (which may be a negative number) obtained by
subtracting Consolidated Current Liabilities from Consolidated Current
Assets.
"CONSOLIDATED WORKING CAPITAL ADJUSTMENT" means, for any fiscal
year, the amount (which may be a negative number) obtained by subtracting
(i) Consolidated Working Capital as of the end of such fiscal year from
(ii) Consolidated Working Capital as of the beginning of such fiscal year.
"CONTINGENT OBLIGATION", as applied to any Person, means any direct
or indirect liability, contingent or otherwise, of that Person (i) with
respect to any Indebtedness, lease, dividend or other obligation of another
if the primary purpose, intent or result thereof by the Person incurring
the Contingent Obligation is to provide assurance to the obligee of such
obligation of another that such obligation of another will be paid or
discharged, or that any agreements relating thereto will be complied with,
or that the holders of such obligation will be protected (in whole or in
part) against loss in respect thereof, (ii) with respect to any letter of
credit issued for the account of that Person or as
10
to which that Person is otherwise liable for reimbursement of drawings, or
(iii) under Interest Rate Agreements and Currency Agreements. Contingent
Obligations shall include, without limitation, (a) the direct or indirect
guaranty, endorsement (otherwise than for collection or deposit in the
ordinary course of business), co-making, discounting with recourse or sale
with recourse by such Person of the obligation of another, (b) the
obligation to make take-or-pay or similar payments if required regardless
of non-performance by any other party or parties to an agreement, and (c)
any liability of such Person for the obligation of another through any
agreement (contingent or otherwise) (X) to purchase, repurchase or
otherwise acquire such obligation or any security therefor, or to provide
funds for the payment or discharge of such obligation (whether in the form
of loans, advances, stock purchases, capital contributions or otherwise) or
(Y) to maintain the solvency or any balance sheet item, level of income or
financial condi tion of another if, in the case of any agreement described
under subclauses (X) or (Y) of this sentence, the primary purpose or intent
thereof is as described in the preceding sentence. The amount of any
Contingent Obligation shall be equal to the amount of the obligation so
guaranteed or otherwise supported or, if less, the amount to which such
Contingent Obligation is specifically limited.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any
provision of any Security issued by that Person or of any material
indenture, mortgage, deed of trust, contract, undertaking, agreement or
other instrument to which that Person is a party or by which it or any of
its properties is bound or to which it or any of its properties is subject.
"CURRENCY AGREEMENT" means any foreign exchange contract, currency
swap agreement, futures contract, option contract, synthetic cap or other
similar agreement or arrangement designed to protect Company or any of its
Subsidiaries against fluctuations in currency values.
"CUT-OFF DATE" has the meaning assigned such term in subsection 6.9.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate
of deposit.
"DOLLARS" and the sign "$" mean the lawful money of the United
States of America.
"ELIGIBLE ASSIGNEE" means (i) (a) a commercial bank organized under
the laws of the United States or any state thereof; (b) a savings and loan
association or savings bank organized under the laws of the United States
or any state thereof; (c) a commercial bank organized under the laws of any
other country or a political subdivision thereof, provided that (1) such
--------
bank is acting through a branch or agency located in the United States or
(2) such bank is organized under the laws of a country that is a member of
the Organization for Economic Cooperation and Development or a political
subdivision of such country; and (d) any other entity which is an
"accredited investor" (as defined in
11
Regulation D under the Securities Act) or which extends credit or buys
loans as one of its businesses including, but not limited to, insurance
companies, mutual funds and lease financing companies, in each case (under
clauses (a) through (d) above) that is reasonably acceptable to
Administrative Agent; and (ii) any Lender and any Affiliate of any Lender;
provided that no Affiliate of Company shall be an Eligible Assignee.
--------
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as
defined in Section 3(3) of ERISA (i) currently maintained or contributed to
by Company or any of its ERISA Affiliates, (ii) which was at any time since
November 5, 1992 maintained or contributed to by Company or any of its
ERISA Affiliates or (iii) with respect to which there is any potential or
outstanding liability of Company.
"EMPLOYEE TAX LOAN NOTES" mean the promissory notes evidencing the
loans made to employees of the Company to cover their tax liabilities in
connection with grants made to such employees under the Company's 1996
Stock Bonus Plans.
"ENVIRONMENTAL CLAIM" means any written accusation, allegation,
notice of violation, claim, demand, abatement order or other order or
direction (conditional or otherwise) by any governmental authority or any
Person for any damage, including, without limitation, personal injury
(including sickness, disease or death), tangible or intangible property
damage, contribution, indemnity, indirect or consequential damages, damage
to the environment, nuisance, pollution, contamina tion or other adverse
effects on the environment, or for fines, penalties or restrictions, in
each case relating to, resulting from or in connection with Hazardous
Materials and relating to Company, any of its Subsidiaries, any of their
respective Affiliates or any Facility.
"ENVIRONMENTAL LAWS" means all statutes, ordinances, orders, rules,
regulations, or any published plans, policies or decrees and the like
relating to (i) environmental matters, including, without limitation, those
relating to fines, injunctions, penalties, damages, contribution, cost
recovery compensation, losses or injuries resulting from the Release or
threatened Release of Hazardous Materials, (ii) the generation, use,
storage, transportation or disposal of Hazardous Materials, or (iii)
occupational safety and health, industrial hygiene, land use or the
protection of human, plant or animal health or welfare, in any manner
applicable to Company or any of its Subsidiaries or any of their respective
properties, including, without limitation, the Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C. (S) 9601 et seq.), the
-- ---
Hazardous Materials Transportation Act (49 U.S.C. (S) 1801 et seq.), the
-- ---
Resource Conservation and Recovery Act (42 U.S.C. (S) 6901 et seq.), the
-- ---
Federal Water Pollution Control Act ( 33 U.S.C. (S) 1251 et seq.), the
-- ---
Clean Air Act (42 U.S.C. (S) 7401 et seq.), the Toxic Substances Control
-- ---
Act (15 U.S.C. (S) 2601 et seq.), the Federal Insecticide, Fungicide and
-- ---
Rodenticide Act (7 U.S.C. (S)136 et seq.), the Occupational Safety and
-- ---
Health Act (29 U.S.C. (S) 651 et seq.) and the Emergency Planning and
-- ---
Community Right-to-Know Act (42 U.S.C. (S) 11001 et seq.), each as amended
-- ---
or supplemented, and any future or present local, state and federal
statutes and regulations promulgated pursuant thereto.
12
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any successor statute.
"ERISA AFFILIATE", as applied to any Person, means (i) any
corporation which is a member of a controlled group of corporations within
the meaning of Sec tion 414(b) of the Internal Revenue Code of which that
Person is a member; (ii) any trade or business (whether or not
incorporated) which is a member of a group of trades or businesses under
common control within the meaning of Section 414(c) of the Internal Revenue
Code of which that Person is a member; and (iii) any member of an
affiliated service group within the meaning of Section 414(m) or (o) of the
Internal Revenue Code of which that Person, any corporation described in
clause (i) above or any trade or business described in clause (ii) above is
a member. Any former ERISA Affiliate of Company shall continue to be
considered an ERISA Affiliate within the meaning of this definition with
respect to the period such entity was an ERISA Affiliate of Company and
with respect to liabilities arising after such period for which Company
could be liable under the Internal Revenue Code or ERISA.
"ERISA EVENT" means (i) a "reportable event" within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect to
any Pension Plan (excluding those for which the provision for 30-day notice
to the PBGC has been waived by regulation); (ii) the failure to meet the
minimum funding standard of Section 412 of the Internal Revenue Code with
respect to any Pension Plan (whether or not waived in accordance with
Section 412(d) of the Internal Revenue Code) or the failure to make by its
due date a required installment under Section 412(m) of the Internal
Revenue Code with respect to any Pension Plan or the failure to make any
required contribution to a Multiemployer Plan; (iii) the provision by the
administrator of any Pension Plan pursuant to Section 4041(a)(2) of ERISA
of a notice of intent to terminate such plan in a distress termination
described in Section 4041(c) of ERISA; (iv) the withdrawal by Company or
any of its ERISA Affiliates from any Pension Plan with two or more
contributing sponsors or the termination of any such Pension Plan resulting
in liability pursuant to Section 4062(e) or 4063 of ERISA; (v) the
institution by the PBGC of proceedings to terminate any Pension Plan, or
the occurrence of any event or condition which might constitute grounds
under ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan; (vi) the imposition of liability on Company
or any of its ERISA Affiliates pursuant to Section 4064 or 4069 of ERISA or
by reason of the application of Section 4212(c) of ERISA; (vii) the
withdrawal by Company or any of its ERISA Affiliates in a complete or
partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA)
from any Multiemployer Plan if there is any potential liability therefor,
or the receipt by Company or any of its ERISA Affiliates of notice from any
Multiemployer Plan that it is in reorganization or insolvency pursuant to
Section 4241 or 4245 of ERISA, or that it intends to terminate or has
terminated under Section 4041A or 4042 of ERISA; (viii) the occurrence of
an act or omission which could give rise to the imposition on Company or
any of its ERISA Affiliates of fines, penalties, taxes or related charges
under Chapter 43 of the Internal Revenue Code or under Section 409 or
502(c), (i) or (l) or 4071 of ERISA in respect of any Employee Benefit
Plan; (ix) the assertion
13
of a material claim (other than routine claims for benefits or for a
qualified domestic relations order) against any Employee Benefit Plan other
than a Multiemployer Plan or the assets thereof, or against Company or any
of its ERISA Affiliates in connection with any such Employee Benefit Plan;
(x) receipt from the Internal Revenue Service of notice of a final
determination of the failure of any Pension Plan (or any other Employee
Benefit Plan intended to be qualified under Section 401(a) of the Internal
Revenue Code) to qualify under Section 401(a) of the Internal Revenue Code,
or the failure of any trust forming part of any Pension Plan to qualify for
exemption from taxation under Section 501(a) of the Internal Revenue Code;
or (xi) the imposition of a Lien pursuant to Section 401(a)(29) or 412(n)
of the Internal Revenue Code or pursuant to ERISA with respect to any
Pension Plan.
"EURODOLLAR RATE LOANS" means Loans bearing interest at rates
determined by reference to the Adjusted Eurodollar Rate as provided in
subsection 2.2A.
"EVENT OF DEFAULT" means each of the events set forth in Section 8.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.
"EXISTING FACILITY" means the loan agreement dated November 5, 1992
(as amended and restated) made between Company, the Lenders party to the
agreement and CIBC, as Agent.
"EXISTING LETTERS OF CREDIT" means letters of credit described in
Schedule 1.1B, issued under the Existing Facility and outstanding on the
-------------
Closing Date.
"EXISTING MORTGAGES" means any mortgage, deed of trust or deed to
secure debt securing the Specified Indebtedness including any amendments,
modifications, restatements or assignments thereof.
"FACILITIES" means any and all real property (including, without
limitation, all buildings, fixtures or other improvements located thereon)
now, hereafter or heretofore owned, leased or operated by Company or any of
its Subsidiaries or any of their respective predecessors or Affiliates.
"FAR WEST DIVISION" means the cooking and restaurant kitchen
equipment manufacturing division of the Company.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average
of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for
such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate is
not so published for any day which is a Business Day, the average of the
14
quotations for such day on such transactions received by Administrative
Agent from three Federal funds brokers of recognized standing selected by
Administrative Agent.
"FISCAL QUARTER" means the periods described in Schedule 1.1C.
-------------
"FISCAL YEAR" means the fiscal year of Company and its Subsidiaries
ending on the last Sunday of December of each calendar year.
"FUNDING AND PAYMENT OFFICE" means the office of the New York Agency
of CIBC located at (i) 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 as
long as CIBC is Administrative Agent and Swing Line Lender or (ii) the
address specified in a written notice to Company and Lenders by any
successor Administrative Agent and Swing Line Lender.
"FUNDING DATE" means the date of the funding of a Loan.
"GAAP" means, subject to the limitations on the application thereof
set forth in subsection 1.2, generally accepted accounting principles set
forth in opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment
of the accounting profession, in each case as the same are applicable to
the circumstances as of the date of determination.
"GOVERNMENTAL AUTHORIZATION" means any permit, license,
authorization, plan, directive, consent order or consent decree of or from
any federal, state or local governmental authority, agency or court.
"GSCP" has the meaning assigned to that term in the introduction to
this Agreement.
"HAZARDOUS MATERIALS" means (i) any chemical, material or substance
at any time defined as or included in the definition of "hazardous
substances", "hazardous wastes", "hazardous materials", "extremely
hazardous waste", "restricted hazardous waste", "infectious waste",
"toxic substances" or any other formulations intended to define, list or
classify substances by reason of deleterious properties such as
ignitability, corrosivity, reactivity, carcinogenicity, toxicity,
reproductive toxicity, "TCLP toxicity" or "EP toxicity" or words of
similar import under any applicable Environmental Laws pursuant thereto;
(ii) any oil, petroleum, petroleum fraction or petroleum derived substance;
(iii) any drilling fluids, produced waters and other wastes associated with
the exploration, development or production of crude oil, natural gas or
geothermal resources; (iv) any flammable substances or explosives; (v) any
radioactive materials; (vi) asbestos in any form; (vii) urea formaldehyde
foam insulation; (viii) polychlorinated biphenyls; (ix) pesticides; and (x)
any other chemical, material or substance, exposure to which is prohibited,
limited or regulated by any governmental authority or which may or could
15
pose a hazard to the health and safety of the owners, occupants or any
Persons in the vicinity of the Facilities.
"INDEBTEDNESS", as applied to any Person, means, without
duplication, (i) all indebtedness for borrowed money, (ii) that portion of
obligations with respect to Capital Leases that is properly classified as a
liability on a balance sheet in conformity with GAAP, (iii) notes payable
and drafts accepted representing extensions of credit whether or not
representing obligations for borrowed money, and (iv) any obligation owed
for all or any part of the deferred purchase price of property or services
(excluding any such obligations incurred under ERISA and obligations under
Permitted Earnout Agreements), which purchase price is (a) due more than
twelve months from the date of incurrence of the obligation in respect
thereof or (b) evidenced by a note or similar written instrument.
Obligations under Interest Rate Agreements and Currency Agreements
constitute Contingent Obligations and not Indebtedness.
"INDEMNIFIED ENVIRONMENTAL CLAIM" has the meaning assigned to that
term in subsection 6.9.
"INDEMNITEE" has the meaning assigned to that term in subsection
10.3.
"INITIAL PERIOD" means the earlier of (i) the 30th day following the
Closing Date or (ii) the Commitments date on which the Syndication Agent
(using its reasonable discretion) notifies Company that syndication of the
Loans has been completed.
"INTELLECTUAL PROPERTY" means all patents, trademarks, tradenames,
copyrights, technology, know-how and processes used in or necessary for the
conduct of the business of Company and its Subsidiaries as currently
conducted that are material to the condition (financial or otherwise),
business or operations of Company and its Subsidiaries, taken as a whole.
"INTEREST PAYMENT DATE" means (i) with respect to any Base Rate
Loan, each March 15, June 15, September 15 and December 15 of each year,
commencing on the first such date to occur after the Closing Date, and (ii)
with respect to any Eurodollar Rate Loan, the last day of each Interest
Period applicable to such Loan; provided that in the case of each Interest
--------
Period of six months "Interest Payment Date" shall also include the date
that is three months after the commencement of such Interest Period.
"INTEREST PERIOD" has the meaning assigned to that term in
subsection 2.2B.
"INTEREST RATE AGREEMENT" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other
similar agreement or arrangement designed to protect Company or any of its
Subsidiaries against fluc tuations in interest rates.
16
"INTEREST RATE DETERMINATION DATE" means, with respect to any
Interest Period, the second Business Day prior to the first day of such
Interest Period.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter.
"INVESTMENT" means (i) any direct or indirect purchase or other
acquisition by Company or any of its Subsidiaries of, or of a beneficial
interest in, any Securities of any other Person, (ii) any direct or
indirect redemption, retirement, purchase or other acquisition for value,
by any Subsidiary of Company from any Person other than Company or any of
its Subsidiaries, of any equity Securities of such Subsidiary, or (iii) any
direct or indirect loan, advance (other than advances to employees for
moving, entertainment and travel expenses, drawing accounts and similar
expendi tures in the ordinary course of business) or capital contribution
by Company or any of its Subsidiaries to any other Person, including all
indebtedness and accounts receivable from that other Person that are not
current assets or did not arise either from sales to that other Person in
the ordinary course of business or from obligations arising in connection
with development projects funded by customers of Company. The amount of any
Investment shall be the original cost of such Investment plus the cost of
all additions thereto, without any adjustments for increases or decreases
in value, or write-ups, write-downs or write-offs with respect to such
Investment.
"ISSUING LENDER" means, with respect to any Letter of Credit, the
Lender which agrees or is otherwise obligated to issue such Letter of
Credit, determined as provided in subsection 3.1B(ii).
"JOINT VENTURE" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form;
provided that in no event shall any corporate Subsidiary of any Person be
--------
considered to be a Joint Venture to which such Person is a party.
"LENDER" and "LENDERS" means the persons identified as "Lenders"
and listed on the signature pages of this Agreement, together with their
successors and permitted assigns pursuant to subsection 10.1 and the term
"Lenders" shall include the Swing Line Lender unless the context
otherwise requires; provided that the term "Lenders", when used in the
--------
context of a particular Commitment, shall mean Lenders having that
Commitment.
"LETTER OF CREDIT" or "LETTERS OF CREDIT" means letters of credit
issued or to be issued by Issuing Lender for the account of Company
pursuant to subsection 3.1.
"LETTER OF CREDIT USAGE" means, as at any date of determination, the
sum of (i) the maximum aggregate amount which is or at any time thereafter
may become available for drawing under all Letters of Credit then
outstanding plus (ii) the aggregate amount of all drawings under Letters of
----
Credit honored by Issuing Lender and not theretofore
17
reimbursed by Company (including any such reimbursement out of the proceeds
of Revolving Loans pursuant to subsection 3.3B).
"LEVERAGE RATIO" has the meaning assigned to that term in subsection
7.6B.
"LIEN" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale
or other title retention agreement, any lease in the nature thereof, any
Uniform Commercial Code financing statement and any agreement to give any
security interest) and any option, trust or other preferential arrangement
having the practical effect of any of the foregoing.
"LOAN" or "LOANS" means one or more of the Acquisition Loans, Term
Loans, Revolving Loans or Swing Line Loans or any combination thereof.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Letters of
Credit (and any applications for, or reimbursement agreements or other
documents or certificates executed by Company in favor of Issuing Lender
relating to, the Letters of Credit), the Collateral Documents, Currency
Agreements, or Interest Rate Agreements entered into between Company and a
Lender and/or its Affiliates and any document executed and delivered by
Company or a Subsidiary pursuant to subsection 6.10, 6.11 or 6.12.
"LOAN PARTY" means each of Company and any of Company's Subsidiaries
from time to time executing a Loan Document, and "LOAN PARTIES" means all
such Persons, collectively.
"MARGIN STOCK" has the meaning assigned to that term in Regulation U
of the Board of Governors of the Federal Reserve System as in effect from
time to time.
"MATERIAL ADVERSE EFFECT" means (i) a material adverse effect upon
the business, operations, properties, assets, condition (financial or
otherwise) or prospects of Company and its Subsidiaries, taken as a whole
or (ii) the impairment of the ability of Company to perform, or of
Administrative Agent or Lenders to enforce, the Obligations.
"MATERIAL SUBSIDIARY" shall mean a Subsidiary that, as of the end of
the most recent fiscal quarter accounted for 5% or more of the Company's
consolidated (i) total assets, (ii) shareholders' equity or (iii) operating
income (calculated for the four most recent fiscal quarters), determined in
each case in accordance with GAAP.
"MORTGAGE" means an instrument (whether designated as a deed of
trust, a trust deed or a mortgage or by any similar title) executed and
delivered by Company and Administrative Agent in substantially in the form
of Exhibit XV annexed hereto encumbering a fee or leasehold interest in
----------
Real Property Assets, as such instrument may be amended, supplemented or
otherwise modified from time to time, and "Mortgages" means all such
instruments, including the Closing Date Mortgages (as defined in subsection
4.1B) and any Additional Mortgages, collectively.
18
"MULTIEMPLOYER PLAN" means a "multiemployer plan", as defined in
Section 3(37) of ERISA, (i) to which Company or any of its ERISA Affiliates
is contributing or has an obligation to contribute, (ii) to which Company
or any of its then ERISA Affiliates or its current ERISA Affiliates has
contributed or had an obligation to contribute and with respect to which
Company or any of its current ERISA Affiliates has any potential or
outstanding liability, or (iii) to which neither Company nor any of its
ERISA Affiliates has directly contributed or had an obligation to
contribute, but with respect to which Company or any of its ERISA
Affiliates has any potential or outstanding liability solely as a result of
the application of Section 4001(b)(1) of ERISA and the regulations
thereunder.
"NET CASH PROCEEDS" means, with respect to any Asset Sale, Cash
Proceeds of such Asset Sale net of bona fide direct costs of sale including
(i) taxes reasonably estimated to be actually payable as a result of such
Asset Sale within two years of the date of such Asset Sale, (ii) payment of
the outstanding principal amount of, premium or penalty, if any, and
interest on any Indebtedness (other than the Loans) that is secured by a
Lien on the stock or assets in question and that is required to be repaid
under the terms thereof as a result of such Asset Sale, (iii) reasonable
reserves taken by Company in accordance with GAAP against any liabilities
(actual or contingent) associated with the assets subject to the Asset Sale
retained by Company as determined (in the case of any such reserves in
excess of $1,000,000) by the Board of Directors of Company in its
reasonable good faith judgment and evidenced by a resolution of the Board
of Directors, and (iv) reasonable employee termination costs payable in
connection with such Asset Sale; provided, that any reduction in such
--------
reserve will be treated for all purposes of this Agreement as a new Asset
Sale at the time of such reduction with Net Cash Proceeds equal to the
amount of such reduction.
"NET INSURANCE/CONDEMNATION PROCEEDS" means any Cash payments or
proceeds received by Company or any of its Subsidiaries (i) under any
business interruption or casualty insurance policy in respect of a covered
loss thereunder or (ii) as a result of the taking of any assets of Company
or any of its Subsidiaries by any Person pursuant to the power of eminent
domain, condemnation or otherwise, or pursuant to a sale of any such assets
to a purchaser with such power under threat of such a taking, in each case
net of any actual and reasonable documented costs incurred by Company or
any of its Subsidiaries in connection with the adjustment or settlement of
any claims of Company or such Subsidiary in respect thereof.
"NOTES" means one or more of the Acquisition Loan Notes, Term Loan
Notes, Revolving Notes or Swing Line Note or any combination thereof.
"NOTICE OF BORROWING" means a notice substantially in the form of
Exhibit I annexed hereto delivered by Company to Administrative Agent
---------
pursuant to subsection 2.1B with respect to a proposed borrowing.
19
"NOTICE OF CONVERSION/CONTINUATION" means a notice substantially in
the form of Exhibit II annexed hereto delivered by Company to
----------
Administrative Agent pursuant to subsection 2.2D with respect to a proposed
conversion or continuation of the applicable basis for determining the
interest rate with respect to the Loans specified therein.
"NOTICE OF ISSUANCE OF LETTER OF CREDIT" means a notice
substantially in the form of Exhibit III annexed hereto delivered by
-----------
Company to Administrative Agent pursuant to subsection 3.1B(i) with respect
to the proposed issuance of a Letter of Credit.
"OBLIGATIONS" means all obligations of every nature of Company or
any Subsidiary from time to time owed to Administrative Agent, Syndication
Agent, Arranging Agent or Lenders or any of them under the Loan Documents,
whether for principal, interest, reimbursement of amounts drawn under
Letters of Credit, fees, expenses, indemnification or otherwise.
"OFFICERS' CERTIFICATE" means, as applied to any corporation, a
certificate executed on behalf of such corporation by its chairman of the
board (if an officer) or its president or one of its vice presidents and by
its chief financial officer or its treasurer; provided that every Officers'
--------
Certificate with respect to the compliance with a condition precedent to
the making of any Loans hereunder shall include (i) a statement that the
officer or officers making or giving such Officers' Certificate have read
such condition and any definitions or other provisions contained in this
Agreement relating thereto, (ii) a statement that, in the opinion of the
signers, they have made or have caused to be made such examination or
investigation as is necessary to enable them to express an informed opinion
as to whether or not such condition has been complied with, and (iii) a
statement as to whether, in the opinion of the signers, such condition has
been complied with.
"OPERATING LEASE" means, as applied to any Person, any lease
(including, without limitation, leases that may be terminated by the lessee
at any time) of any property (whether real, personal or mixed) that is not
a Capital Lease other than any such lease under which that Person is the
lessor.
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor thereto).
"PENSION PLAN" means any Employee Benefit Plan, other than a Multi
employer Plan, which is subject to Section 412 of the Internal Revenue Code
or Section 302 of ERISA.
"PERMITTED ACQUISITIONS" means the acquisition (whether by means of
equity or asset purchase acquisition) by Company or its Subsidiaries, of a
business or a series of related businesses; provided that (i) the
--------
businesses acquired are suitable for franchising; (ii) with respect to any
such acquisition financed with the proceeds of Acquisition Loans after
giving effect to such acquisition, Company and its Subsidiar ies shall be
in compliance, on a Pro Forma Basis, with the financial covenants as
required under
20
subsection 7.6E of this Agreement; and (iii) concurrently with such
acquisition the Administrative Agent, on behalf of Lenders, shall be
granted a first priority security interest in the businesses and assets
acquired (to the extent available under applicable law).
"PERMITTED EARNOUT AGREEMENTS" shall mean (x) the agreements set
forth in Schedule 1.1D and (y) any other agreement by Company or one of its
-------------
Subsidiaries to pay the seller or sellers of any Person or assets acquired
in accordance with the provisions of subsection 7.7(vi) at any time
following the consummation of such acquisition by reference to the
financial performance of the assets acquired; provided that the aggregate
--------
amount of all such payments which may be owed under such agreements
contemplated by this clause (y) at any time shall not exceed $10,000,000.
"PERMITTED ENCUMBRANCES" means the following types of Liens or
defects in title (other than any such Lien imposed pursuant to Section
401(a)(29) or 412(n) of the Internal Revenue Code or by ERISA):
(i) Liens for taxes, assessments or governmental charges or
claims the payment of which is not, at the time, required by
subsection 6.3;
(ii) statutory Liens of landlords and Liens of carriers,
warehouse men, mechanics and materialmen and other Liens imposed by
law incurred in the ordinary course of business for sums not yet
delinquent or being contested in good faith, if such reserve or other
appropriate provision, if any, as shall be required by GAAP shall have
been made therefor;
(iii) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment
insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, surety, indemnity and
appeal bonds, bids, leases, government contracts, trade contracts,
performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money);
(iv) any attachment or judgment Lien not constituting an Event
of Default under subsection 8.8;
(v) leases or subleases granted to others not interfering in
any material respect with the ordinary conduct of the business of
Company or any of its Subsidiaries;
(vi) easements, rights-of-way, licenses, covenants, conditions,
restrictions, zoning requirements, minor defects, encroachments or
irregulari ties in title and other similar charges or encumbrances not
interfering in any material respect with the ordinary conduct of the
business of Company or any of its Subsidiaries at the Real Property
Assets subject to such Lien;
21
(vii) any (a) interest or title of a lessor or sublessor under
any lease, (b) restriction or encumbrance that the interest or title
of such lessor or sublessor may be subject to, or (c) subordination of
the interest of the lessee or sublessee under such lease to any
restriction or encumbrance referred to in the preceding clause (b);
(viii) Liens arising from filing UCC financing statements
relating solely to leases permitted by this Agreement;
(ix) Liens on goods held by suppliers arising in the ordinary
course of business for sums not yet delinquent or being contested in
good faith, if such reserve or other appropriate provision, if any, as
shall be required by GAAP shall have been made therefore and as long
as such Lien remains unperfected;
(x) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in connection
with the importation of goods;
(xi) rights of franchisees under franchise agreements in
keeping with the Company's historical practices;
(xii) with respect to any Real Property Asset in which the
Company owns a leasehold estate, any defect or encumbrance caused by
or arising out of the failure to record the lease or a memorandum
thereof in the applicable real property records in the county where
such Real Property Asset is located other than any defect or
encumbrance created or suffered by the Company; and
(xiii) the effect of any eminent domain or condemnation
proceedings.
"PERMITTED FOREIGN JOINT VENTURE INVESTMENT" means the Investment by
Company in the proposed Joint Venture in Asia; provided that, (i) the joint
--------
venture interest shall be at least 10%, (ii) the aggregate investment by
Company shall not exceed $30,000,000 and the Investment made by Company in
any Fiscal Year shall not exceed $10,000,000, and (iii) the businesses of
the Joint Venture shall consist of the development and operation of "quick
service restaurants" in Asia using Company's brands.
"PERSON" means and includes natural persons, corporations, limited
partner ships, general partnerships, joint stock companies, Joint Ventures,
associations, companies, trusts, banks, trust companies, land trusts,
business trusts or other organizations, whether or not legal entities, and
governments and agencies and political subdivisions thereof.
"PREFERRED STOCK" means all issued and outstanding shares of
cumulative exchangeable, redeemable 10% Preferred Stock of Company.
22
"POTENTIAL EVENT OF DEFAULT" means a condition or event that, after
notice or lapse of time or both, would constitute an Event of Default.
"PRIME RATE" means the rate that CIBC announces from time to time as
its prime lending rate, as in effect from time to time. The Prime Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. CIBC or any other Lender may make
commercial loans or other loans at rates of interest at, above or below the
Prime Rate.
"PRO FORMA BASIS" has the meaning assigned that term in subsection
7.6D.
"PRO RATA SHARE" means (i) with respect to all payments,
computations and other matters relating to the Acquisition Facility
Commitment or the Acquisition Loans of any Lender, the percentage obtained
by dividing (a) the Acquisition Loan Exposure of that Lender by (b) the
-------- --
aggregate Acquisition Loan Exposure of all Lenders, (ii) with respect to
all payments, computations and other matters relating to the Term Loan
Commitment or the Term Loan of any Lender, the percentage obtained by
dividing (a) the Term Loan Exposure of that Lender by (b) the aggregate
-------- --
Term Loan Exposure of all Lenders, (iii) with respect to all payments,
computations and other matters relating to the Revolving Loan Commitment or
the Revolving Loans of any Lender or any Letters of Credit issued or
participations therein purchased by any Lender, or any participations in
any Swing Line Loan purchased by any Lender, the percentage obtained by
dividing (a) the Revolving Loan Exposure of that Lender by (b) the
-------- --
aggregate Revolving Loan Exposure of all Lenders, and (iv) for all other
purposes with respect to each Lender, the percentage obtained by dividing
--------
(a) the sum of the Acquisition Loan Exposure of that Lender plus the Term
----
Loan Exposure of that Lender plus the Revolving Loan Exposure of that
----
Lender by (b) the sum of the aggregate Acquisition Loan Exposure of all
--
Lenders plus the aggregate Term Loan Exposure of all Lenders plus the
---- ----
aggregate Revolving Loan Exposure of all Lenders, in any such case as the
applicable percentage may be adjusted by assignments permitted pursuant to
subsection 10.1. The initial Pro Rata Share of each Lender for purposes of
each of clauses (i), (ii), (iii) and (iv) of the preceding sentence is set
forth opposite the name of that Lender in Schedule 2.1 annexed hereto.
------------
"REAL PROPERTY ASSETS" means interests in land, buildings,
improvements, and fixtures attached thereto or used in the operation
thereof, in each case owned or leased (as lessee) by Company or any of its
Subsidiaries.
"REFINANCINGS" means, collectively, (i) the purchase by Company of
all of the outstanding Preferred Stock for an aggregate purchase price not
to exceed $63,000,000 and (ii) the refinancing by Company of all Specified
Indebtedness.
"REFUNDED SWING LINE LOANS" has the meaning assigned to that term in
subsection 2.1A(iv).
"REGISTER" has the meaning assigned to that term in subsection 2.1D.
23
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"REGULATORY SHARES" means, with respect to any Person, shares of
such Person required to be issued as qualifying shares to directors or
persons similarly situated or shares issued to Persons other than Company
or a Wholly Owned Subsidiary of Company in response to regulatory
requirements of foreign jurisdictions pursuant to a resolution of the Board
of Directors of such Person, so long as such shares do not exceed one
percent of the total outstanding shares of equity such Person and any
owners of such shares irrevocably covenant with Company to remit to Company
or waive any dividends or distributions paid or payable in respect of such
shares.
"REIMBURSEMENT DATE" has the meaning assigned to that term in subsec
tion 3.3B.
"RELATED PLANT" means any plant or facility that is or is intended
to be used by Company or any of its Subsidiaries in connection with the
businesses permitted under subsection 7.14.
"RELEASE" means any release or any threatened release, spill,
emission, leaking, pumping, pouring, injection, escaping, deposit,
disposal, discharge, dispersal, dumping, leaching or migration of Hazardous
Materials into the indoor or outdoor environment (including, without
limitation, the abandonment or disposal of any barrels, containers or other
closed receptacles containing any Hazardous Materials), or into or out of
any Facility, including the movement of any Hazardous Material through the
air, soil, surface water, groundwater or property.
"REQUISITE LENDERS" means, at any time, (i) Lenders having or
holding not less than 51% of the sum of (x) the aggregate Acquisition Loan
Exposure plus (y) the aggregate Term Loan Exposure plus (z) the aggregate
---- ----
Revolving Loan Exposure.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
stock of Company now or hereafter outstanding, except a dividend payable
solely in shares of that class of stock to the holders of that class, (ii)
any redemption, retirement, sinking fund or similar payment, purchase or
other acquisition for value, direct or indirect, of any shares of any class
of stock of Company now or hereafter outstanding, (iii) any payment made to
retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire shares of any class of stock of Company now or
hereafter outstanding, and (iv) any payment or prepayment of principal of,
premium, if any, or interest on, or redemption, purchase, retirement,
defeasance (including in-substance or legal defeasance), sinking fund or
similar payment with respect to, the Unsecured Subordinated Notes.
24
"REVOLVING LOAN COMMITMENT" means the commitment of a Lender to make
Revolving Loans to Company pursuant to subsection 2.1A(iii), and
"REVOLVING LOAN COMMITMENTS" means such commitments of all Lenders in the
aggregate.
"REVOLVING LOAN COMMITMENT TERMINATION DATE" means June 30, 2002.
"REVOLVING LOAN EXPOSURE" means, with respect to any Lender as of
any date of determination (i) prior to the termination of the Revolving
Loan Commitments, that Lender's Revolving Loan Commitment and (ii) after
the termination of the Revolving Loan Commitments, the sum of (a) the
aggregate outstanding principal amount of the Revolving Loans of that
Lender plus (b) in the event that Lender is an Issuing Lender, the
----
aggregate Letter of Credit Usage in respect of all Letters of Credit issued
by that Lender (in each case net of any participations purchased by other
Lenders in such Letters of Credit or any unreimbursed drawings thereunder)
plus (c) the aggregate amount of all participations purchased by that
----
Lender in any outstanding Letters of Credit or any unreimbursed drawings
under any Letters of Credit plus (d) in the case of Swing Line Lender, the
----
aggregate outstanding principal amount of all Swing Line Loans (net of any
participations therein purchased by other Lenders) plus (e) the aggregate
----
amount of all participations purchased by that Lender in any outstanding
Swing Line Loans.
"REVOLVING LOANS" means the Loans made by Lenders to Company
pursuant to subsection 2.1A(iii).
"REVOLVING NOTES" means (i) the promissory notes of Company issued
pursuant to subsection 2.1E(c) on the Closing Date and (ii) any promissory
notes issued by Company pursuant to the last sentence of subsection
10.1B(i) in connection with assignments of the Revolving Loan Commitments
and Revolving Loans of any Lenders, in each case substantially in the form
of Exhibit IV-C annexed hereto, as they may be amended, supplemented or
------------
otherwise modified from time to time.
"SECURITIES" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds,
debentures, notes, or other evidences of indebtedness, secured or
unsecured, convertible, subordinated or otherwise, or in general any
instruments commonly known as "securities" or any certificates of inter
est, shares or participations in temporary or interim certificates for the
purchase or acquisition of, or any right to subscribe to, purchase or
acquire, any of the foregoing.
"SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time, and any successor statute.
"SOLVENT" means, with respect to any Person, that as of the date of
determina tion both (i) (a) the then fair saleable value of the property of
such Person is (1) greater than the total amount of liabilities (including
contingent liabilities) of such Person and (2) not less than the amount
that will be required to pay the probable liabilities on such Person's
25
then existing debts as they become absolute and matured considering all
financing alternatives and potential asset sales reasonably available to
such Person; (b) such Person's capital is not unreasonably small in
relation to its business or any contemplated or undertaken transaction; and
(c) such Person does not intend to incur, or believe (nor should it
reasonably believe) that it will incur, debts beyond its ability to pay
such debts as they become due; and (ii) such Person is "solvent" within the
meaning given that term and similar terms under applicable laws relating to
fraudulent transfers and conveyances. For purposes of this definition, the
amount of any contingent liability at any time shall be computed as the
amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become
an actual or matured liability.
"SPECIFIED ASSET SALES" means Asset Sales with respect to (i) sale-
leaseback transactions completed within one year following the acquisition
of the subject asset; (ii) sales, leases or transfers of restaurant
properties to franchisees pursuant to the Company's "turnkey" development
programs, (iii) sales, leases or transfers of franchises and related assets
and properties repossessed or reacquired by the Company from franchisees
and subsequently resold to new franchisees all in the ordinary course of
business, (iv) sales or dispositions of restaurant-related properties and
assets that are no longer in operation and are surplus to the Company's
needs in the ordinary course of business in an amount not in excess of
$5,000,000 in any twelve month period, (v) exchanges of properties or
assets for other properties or assets (other than cash or cash equivalents)
that (1) are useful in the business of the Company and its Subsidiaries as
then being conducted and (2) have a fair market value at least equal to the
fair market value of the assets or properties being exchanged (as evidenced
by a resolution of the directors of the Company in the case of transactions
having a fair market value in excess of $1,000,000) in the ordinary course
of business and (vi) the Far West Division and (vii) sales of restaurant
related properties in connection with a market relocation program.
"SPECIFIED INDEBTEDNESS" means (i) the Existing Facility and (ii)
other Indebtedness of Company and its Subsidiaries outstanding on the
Closing Date described in Schedule 1.1A.
-------------
"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, association, joint venture or other business entity of which
more than 50% of the total voting power of shares of stock or other
ownership interests entitled (without regard to the occurrence of any
contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar
functions) having the power to direct or cause the direction of the
management and policies thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof.
"SUBSIDIARY GUARANTOR" means any Subsidiary of Company that executes
and delivers a counterpart of the Subsidiary Guaranty on the Closing Date
or from time to time thereafter pursuant to subsection 6.10.
26
"SUBSIDIARY GUARANTY" means the Subsidiary Guaranty executed and
delivered by existing Subsidiaries of Company on the Closing Date and to be
executed and delivered by additional Subsidiaries of Company from time to
time thereafter in accordance with subsection 6.10, substantially in the
form of Exhibit XVIII annexed hereto, as such Subsidiary Guaranty may
-------------
hereafter be amended, supplemented or otherwise modified from time to time.
"SUBSIDIARY PLEDGE AGREEMENT" means each Subsidiary Pledge Agreement
executed and delivered by an existing Subsidiary Guarantor on the Closing
Date or executed and delivered by any additional Subsidiary Guarantor from
time to time thereafter in accordance with subsection 6.10, in each case
substantially in the form of Exhibit XIX annexed hereto, as such Subsidiary
-----------
Pledge Agreement may be amended, supplemented or otherwise modified from
time to time, and "SUBSIDIARY PLEDGE AGREEMENTS" means all such
Subsidiary Pledge Agreements, collectively.
"SUBSIDIARY SECURITY AGREEMENT" means each Subsidiary Security
Agreement executed and delivered by an existing Subsidiary Guarantor on the
Closing Date or executed and delivered by any additional Subsidiary
Guarantor from time to time thereafter in accordance with subsection 6.10,
in each case substantially in the form of Exhibit XX annexed hereto, as
----------
such Subsidiary Security Agreement may be amended, supplemented or
otherwise modified from time to time, and "SUBSIDIARY SECURITY
AGREEMENTS" means all such Subsidiary Security Agreements, collectively.
"SUBSIDIARY TRADEMARK SECURITY AGREEMENT" means each Subsidiary
Trademark Security Agreement executed and delivered by an existing
Subsidiary Guarantor on the Closing Date or executed and delivered by any
additional Subsidiary Guarantor from time to time thereafter in accordance
with subsec tion 6.10, in each case substantially in the form of Exhibit
-------
XVII annexed hereto, as such Subsidiary Trademark Security Agreement may be
----
amended, supplemented or otherwise modified from time to time, and
"SUBSIDIARY TRADEMARK SECURITY AGREEMENTS" means all such Subsidiary
Trademark Security Agreements, collectively.
"SWING LINE LENDER" means CIBC or any Person serving as a successor
Administrative Agent hereunder, in its capacity as Swing Line Lender
hereunder.
"SWING LINE LOAN COMMITMENT" means the commitment of Swing Line
Lender to make Swing Line Loans to Company pursuant to subsection 2.1A(iv).
"SWING LINE LOANS" means the Loans made by Swing Line Lender to
Company pursuant to subsection 2.1A(iv).
"SWING LINE NOTE" means any promissory note of Company issued
pursuant to subsection 2.1E to evidence the Swing Line Loans of Swing Line
Lender, substantially in the form of Exhibit IV-D annexed hereto, as it may
------------
be amended, supplemented or otherwise modified from time to time.
27
"SYNDICATION AGENT" means GSCP in its capacity as syndication agent.
"TAX" or "TAXES" means any present or future tax, levy, impost,
duty, charge, fee, deduction or withholding of any nature and whatever
called, by whomsoever, on whomsoever and wherever imposed, levied,
collected, withheld or assessed; provided that "TAX ON THE OVERALL NET
--------
INCOME" of a Person shall be construed as a reference to a tax imposed by
the jurisdiction in which that Person's principal office (and/or, in the
case of a Lender, its lending office) is located or in which that Person is
deemed to be doing business on all or part of the net income, profits or
gains of that Person (whether worldwide, or only insofar as such income,
profits or gains are considered to arise in or to relate to a particular
jurisdiction, or otherwise).
"TERM LOAN COMMITMENT" means the commitment of a Lender to make Term
Loans to the Company pursuant to subsection 2.1A(ii) and "TERM LOAN COMMIT
MENTS" means such commitments of all Lenders in the aggregate.
"TERM LOAN EXPOSURE" means, with respect to any Lender as of any
date of determination (i) prior to the termination of the Term Loan
Commitments, that Lender's Term Loan Commitment and (ii) after the
termination of the Term Loan Commitments, the sum of the aggregate
outstanding principal amount of the Term Loans of that Lender.
"TERM LOAN NOTES" means (i) the promissory notes of the Company
issued pursuant to subsection 2.1E(b) on the Closing Date and (ii) any
promissory notes issued by the Company pursuant to subsection 9.1B(i) in
connection with assignments of the Term Loan Commitments or Term Loans, in
each case substantially in the form of Exhibit IV-B annexed hereto, as they
------------
may be amended, restated, supplement ed or otherwise modified from time to
time.
"TERM LOANS" means the Loans made by Lenders to the Company pursuant
to subsection 2.1A(ii).
"TITLE COMPANY" means First American Title Insurance Company or such
other reputable title insurance company reasonably satisfactory to the
Administrative Agent.
"TOTAL UTILIZATION OF REVOLVING LOAN COMMITMENTS" means, as at any
date of determination, the sum of (i) the aggregate principal amount of all
outstanding Revolving Loans (other than Revolving Loans made for the
purpose of repaying any Refunded Swing Line Loans or reimbursing the
applicable Issuing Lender for any amount drawn under any Letter of Credit
but not yet so applied) plus (ii) the aggregate principal amount of all
----
outstanding Swing Line Loans plus (iii) the Letter of Credit Usage.
----
"TRANSACTION COSTS" means the call premiums, fees, costs and
expenses payable by Company pursuant hereto and other fees, costs and
expenses payable by Company in connection with (i) the Refinancings, (ii)
the issuance of the Unsecured Subordinated Notes and (iii) the execution
and delivery of this Agreement and related documents.
28
"UNSECURED SUBORDINATED NOTE INDENTURE" means the indenture pursuant
to which the Unsecured Subordinated Notes will be issued, in the form
delivered as of the Closing Date pursuant to subsection 4.1E, as such
indenture may be amended from time to time to the extent permitted under
subsection 7.15.
"UNSECURED SUBORDINATED NOTES" means the $175,000,000 aggregate
principal amount of Company's 10-1/4% senior subordinated notes due 2007 to
be issued pursuant to the Unsecured Subordinated Note Indenture.
"WHOLLY OWNED SUBSIDIARY" means, with respect to any Person, a
Subsidiary of such Person all of the outstanding capital stock or other
ownership interests of which (other than Regulatory Shares) shall at the
time be owned by such Person or by one or more Wholly Owned Subsidiaries of
such Person or by such Person and one or more Wholly Owned Subsidiaries of
such Person.
1.2 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF CALCULATIONS UNDER
------------------------------------------------------------------------
AGREEMENT.
---------
Except as otherwise expressly provided in this Agreement, all accounting
terms not otherwise defined herein shall have the meanings assigned to them in
conformity with GAAP. Financial statements and other information required to be
delivered by Company to Lenders pursuant to clauses (i), (ii), (iii) and (xiii)
of subsection 6.1 shall be prepared in accordance with GAAP as in effect at the
time of such preparation (and delivered together with the reconciliation
statements provided for in subsection 6.1(v)). Calculations in connection with
the definitions, covenants and other provisions of this Agreement shall utilize
accounting principles in conformity with those used to prepare the financial
statements referred to in subsection 5.3.
1.3 OTHER DEFINITIONAL PROVISIONS.
-----------------------------
References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided. Any of the terms defined in subsection 1.1 may, unless the context
otherwise requires, be used in the singular or the plural, depending on the
reference.
SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 COMMITMENTS; MAKING OF LOANS; THE REGISTER; NOTES.
-------------------------------------------------
A. COMMITMENTS. Subject to the terms and conditions of this Agreement and
in reliance upon the representations and warranties of Company herein set forth,
each Lender hereby severally agrees to make the Loans described in subsections
2.1A(i), 2.1A(ii) and 2.1A(iii) and Swing Line Lender hereby agrees to make the
Loans described in subsection 2.1A(iv).
29
(i) Acquisition Loans. Each Lender having an Acquisition Facility
-----------------
Commitment severally agrees to lend to Company from time to time during the
period from the Closing Date to the second anniversary of the Closing Date
an aggregate amount not exceeding its Pro Rata Share of the aggregate
amount of the Acquisition Facility Commitments to be used for the purposes
identified in subsec tion 2.5A. The amount of each Lender's Acquisition
Facility Commitment is set forth opposite its name on Schedule 2.1 annexed
------------
hereto and the aggregate amount of the Acquisition Facility Commitments is
$100,000,000; provided that the Acquisition Facility Commitments of Lenders
--------
shall be adjusted to give effect to any assignments of the Acquisition
Facility Commitments pursuant to subsection 10.1B; provided further that
-------- -------
the amount of the Acquisition Facility Commitment shall be reduced from
time to time by the amount of any reductions thereto made pursuant to
subsections 2.4B. Each Lender's Acquisition Facility Commitment shall
expire immediately and without further action on June 30, 1997 if the Term
Loans are not made on or before that date. Amounts borrowed under this
subsection 2.1A(i) may be repaid and reborrowed through the second
anniversary of the Closing Date.
(ii) Term Loans. Each Lender having a Term Loan Commitment severally
----------
agrees to lend to Company on the Closing Date an amount not exceeding its
Pro Rata Share of the aggregate amount of the Term Loan Commitments to be
used for the purposes identified in subsection 2.5B. The amount of each
Lender's Term Loan Commitment is set forth opposite its name on Schedule
--------
2.1 annexed hereto and the aggregate amount of the Term Loan Commitments is
---
$50,000,000; provided that the Commitments of Lenders shall be adjusted to
--------
give effect to any assignments of the Term Loan Commitments pursuant to
subsection 10.1B. Each Lender's Commit ment shall expire immediately and
without further action on June 30, 1997 if the Term Loans are not made on
or before that date. Company may make only one borrowing under the Term
Loan Commitment which must be in the full amount of the Term Loan
Commitment. Amounts borrowed under this subsection 2.1A(ii) and
subsequently repaid or prepaid may not be reborrowed.
(iii) Revolving Loans. Each Lender having a Revolving Loan Commitment
---------------
severally agrees, subject to the limitations set forth below with respect
to the maximum amount of Revolving Loans permitted to be outstanding from
time to time, to lend to Company from time to time during the period from
the Closing Date to but excluding June 30, 2002 an aggregate amount not
exceeding its Pro Rata Share of the aggregate amount of the Revolving Loan
Commitments to be used for the pur poses identified in subsection 2.5C. The
original amount of each Lender's Revolving Loan Commitment is set forth
opposite its name on Schedule 2.1 annexed hereto and the aggregate original
------------
amount of the Revolving Loan Commitments is $25,000,000; provided that the
--------
Revolving Loan Commitments of Lenders shall be adjusted to give effect to
any assignments of the Revolving Loan Commitments pursuant to subsection
10.1B; and provided, further that the amount of the Revolving Loan
-------- -------
Commitments shall be reduced from time to time by the amount of any
reductions thereto made pursuant to subsection 2.4B. Each Lender's
Revolving Loan Commitment shall expire on June 30, 2002 and all Revolving
Loans and
30
all other amounts owed hereunder with respect to the Revolving Loans and
the Revolving Loan Commitments shall be paid in full no later than that
date; provided that each Lender's Revolving Loan Commitment shall expire
--------
immediately and without further action on June 30, 1997 if the Term Loans
are not made on or before that date. Amounts borrowed under this subsection
2.1A(iii) may be repaid and reborrowed to but excluding June 30, 2002.
Anything contained in this Agreement to the contrary notwithstanding
in no event shall the Total Utilization of Revolving Loan Commitments at
any time exceed the Revolving Loan Commitments then in effect;
(iv) Swing Line Loans. Swing Line Lender hereby agrees, subject to
----------------
the limitations set forth below with respect to the maximum amount of Swing
Line Loans permitted to be outstanding from time to time, to make a portion
of the Revolving Loan Commitments available to Company from time to time
during the period from the Closing Date to but excluding June 30, 2002 by
making Swing Line Loans to Company in an aggregate amount not exceeding the
amount of the Swing Line Loan Commitment to be used for the purposes
identified in subsection 2.5C, notwithstanding the fact that such Swing
Line Loans, when aggregated with Swing Line Lender's outstanding Revolving
Loans and Swing Line Lender's Pro Rata Share of the Letter of Credit Usage
then in effect, may exceed Swing Line Lender's Revolving Loan Commitment.
The original amount of the Swing Line Loan Commitment is $5,000,000;
provided that any reduction of the Revolving Loan Commitments made pursuant
--------
to subsection 2.4A(iii), 2.4B(ii) or 2.4B(iii) which reduces the aggregate
Revolving Loan Commitments to an amount less than the then current amount
of the Swing Line Loan Commitment shall result in an automatic
corresponding reduction of the Swing Line Loan Commitment to the amount of
the Revolving Loan Commitments, as so reduced, without any further action
on the part of Company, Agent or Swing Line Lender. The Swing Line Loan
Commitment shall expire on June 30, 2002 and all Swing Line Loans and all
other amounts owed hereunder with respect to the Swing Line Loans shall be
paid in full no later than that date; provided that the Swing Line Loan
--------
Commitment shall expire immediately and without further action on June 30,
1997 if the Term Loans are not made on or before that date. Amounts
borrowed under this subsection 2.1A(iii) may be repaid and reborrowed to
but excluding June 30, 2002.
Anything contained in this Agreement to the contrary notwithstanding,
the Swing Line Loans and the Swing Line Loan Commitment shall be subject to
the limitation that in no event shall the Total Utilization of Revolving
Loan Commitments at any time exceed the Revolving Loan Commitments then in
effect.
With respect to any Swing Line Loans which have not been voluntarily
prepaid by Company pursuant to subsection 2.4B(i), Swing Line Lender may,
at any time in its sole and absolute discretion, deliver to Administrative
Agent (with a copy to Company), no later than 10:00 A.M. (New York time) on
the first Business Day in advance of the proposed Funding Date, a notice
(which shall be deemed to be a Notice of Borrowing
31
given by Company) requesting Lenders to make Revolving Loans that are Base
Rate Loans on such Funding Date in an amount equal to the amount of such
Swing Line Loans (the "REFUNDED SWING LINE LOANS") outstanding on the date
such notice is given which Swing Line Lender requests Lenders to prepay.
Anything contained in this Agreement to the contrary notwithstanding, (i)
the proceeds of such Revolving Loans made by Lenders other than Swing Line
Lender shall be immediately delivered by Administrative Agent to Swing Line
Lender (and not to Company) and applied to repay a corresponding portion of
the Refunded Swing Line Loans and (ii) on the day such Revolving Loans are
made, Swing Line Lender's Pro Rata Share of the Refunded Swing Line Loans
shall be deemed to be paid with the proceeds of a Revolving Loan made by
Swing Line Lender, and such portion of the Swing Line Loans deemed to be so
paid shall no longer be outstanding as Swing Line Loans and shall no longer
be due under the Swing Line Note, if any, of Swing Line Lender but shall
instead constitute part of Swing Line Lender's outstanding Revolving Loans
and shall be due under the Revolving Note, if any, of Swing Line Lender.
Company hereby authorizes Administrative Agent and Swing Line Lender to
charge Company's accounts with Administrative Agent and Swing Line Lender
(up to the amount available in each such account) in order to immediately
pay Swing Line Lender the amount of the Refunded Swing Line Loans to the
extent the proceeds of such Revolving Loans made by Lenders, including the
Revolving Loan deemed to be made by Swing Line Lender, are not sufficient
to repay in full the Refunded Swing Line Loans. If any portion of any such
amount paid (or deemed to be paid) to Swing Line Lender should be recovered
by or on behalf of Company from Swing Line Lender in bankruptcy, by
assignment for the benefit of creditors or otherwise, the loss of the
amount so recovered shall be ratably shared among all Lenders in the manner
contemplated by subsection 10.5.
If for any reason (a) Revolving Loans are not made upon the request of
Swing Line Lender as provided in the immediately preceding paragraph in an
amount sufficient to repay any amounts owed to Swing Line Lender in respect
of any outstanding Swing Line Loans or (b) the Revolving Loan Commitments
are terminated at a time when any Swing Line Loans are outstanding, each
Lender shall be deemed to, and hereby agrees to, have purchased a
participation in such outstanding Swing Line Loans in an amount equal to
its Pro Rata Share (calculated, in the case of the foregoing clause (b),
immediately prior to such termination of the Revolving Loan Commitments) of
the unpaid amount of such Swing Line Loans together with accrued interest
thereon. Upon one Business Day's notice from Swing Line Lender, each Lender
shall deliver to Swing Line Lender an amount equal to its respective
participation in same day funds at the Funding and Payment Office. In order
to further evidence such participation (and without prejudice to the
effective ness of the participation provisions set forth above), each
Lender agrees to enter into a separate participation agreement at the
request of Swing Line Lender in form and substance reasonably satisfactory
to Swing Line Lender. In the event any Lender fails to make available to
Swing Line Lender the amount of such Lender's participation as provided in
this paragraph, Swing Line Lender shall be entitled to recover such amount
on demand from such Lender together with interest thereon at the rate
customarily used by Swing Line Lender for the correction of errors among
banks for three Business Days
32
and thereafter at the Base Rate. In the event Swing Line Lender receives a
payment of any amount in which other Lenders have purchased participations
as provided in this paragraph, Swing Line Lender shall promptly distribute
to each such other Lender its Pro Rata Share of such payment.
Anything contained herein to the contrary notwithstanding, each
Lender's obligation to make Revolving Loans for the purpose of repaying any
Refunded Swing Line Loans pursuant to the second preceding paragraph and
each Lender's obligation to purchase a participation in any unpaid Swing
Line Loans pursuant to the immediately preceding paragraph shall be
absolute and unconditional and shall not be affected by any circumstance,
including (a) any set-off, counterclaim, recoupment, defense or other right
which such Lender may have against Swing Line Lender, Company or any other
Person for any reason whatsoever; (b) the occurrence or continuation of an
Event of Default or a Potential Event of Default; (c) any adverse change in
the business, operations, properties, assets, condition (financial or
otherwise) or prospects of Company or any of its Subsidiaries; (d) any
breach of this Agreement or any other Loan Document by any party thereto;
or (e) any other circumstance, happening or event whatsoever, whether or
not similar to any of the foregoing; provided that such obligations of each
--------
Lender are subject to the condition that (X) Swing Line Lender believed in
good faith that all conditions under Section 4 to the making of the
applicable Refunded Swing Line Loans or other unpaid Swing Line Loans, as
the case may be, were satisfied at the time such Refunded Swing Line Loans
or unpaid Swing Line Loans were made or (Y) the satisfaction of any such
condition not satisfied had been waived in accordance with subsection 10.6
prior to or at the time such Refunded Swing Line Loans or other unpaid
Swing Line Loans were made.
B. BORROWING MECHANICS. Loans made on any Funding Date (other than
Revolving Loans made pursuant to a request by Swing Line Lender pursuant to
subsection 2.1A(iv) for the purpose of repaying any Refunded Swing Line Loans or
Revolving Loans made pursuant to subsection 3.3B for the purpose of reimbursing
Issuing Lender for the amount of a drawing under a Letter of Credit issued by
it) shall be in an aggregate minimum amount of $5,000,000 and integral multiples
of $1,000,000 in excess of that amount. Swing Line Loans made on any Funding
Date shall be in an aggregate minimum amount of $500,000 and integral multiples
of $100,000 in excess of that amount. Whenever Company desires that Lenders make
Loans it shall deliver to Administrative Agent a Notice of Borrowing no later
than 12:00 Noon (New York time) at least three Business Days in advance of the
proposed Funding Date (in the case of a Eurodollar Rate Loan) or at least one
Business Day in advance of the proposed Funding Date (in the case of a Base Rate
Loan). Whenever Company desires that Swing Line Lender make a Swing Line Loan,
it shall deliver to Administrative Agent a Notice of Borrowing no later than
12:00 Noon (New York City time) on the proposed Funding Date. The Notice of
Borrowing shall specify (i) the proposed Funding Date (which shall be a Business
Day), (ii) the amount and type of Loans requested, (iii) in the case of Swing
Line Loans, that such Loans shall be Base Rate Loans, (iv) in the case of
Acquisition Loans, Term Loans and Revolving Loans, whether such Loans shall be
Base Rate Loans or Eurodollar Rate Loans, and (v) in the case of any Loans
requested to be made as Eurodollar Rate Loans, the initial Interest Period
requested therefor;
33
provided that in respect of any Loans made during the Initial Period, such Loans
--------
shall be Base Rate Loans. Loans may be continued as or converted into Base Rate
Loans and Eurodollar Rate Loans in the manner provided in subsection 2.2D. In
lieu of delivering the above-described Notice of Borrowing, Company may give
Administrative Agent telephonic notice by the required time of any proposed
borrowing under this subsection 2.1B; provided that such notice shall be
--------
promptly confirmed in writing by delivery of a Notice of Borrowing to
Administrative Agent on or before the applicable Funding Date.
Neither Administrative Agent nor any Lender shall incur any liability to
Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to borrow on behalf of Company or
for otherwise acting in good faith under this subsection 2.1B, and upon funding
of Loans by Lenders in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected Loans hereunder.
Company shall notify Administrative Agent prior to the funding of any Loans
in the event that any of the matters to which Company is required to certify in
the applicable Notice of Borrowing is no longer true and correct as of the
applicable Funding Date, and the acceptance by Company of the proceeds of any
Loans shall constitute a re-certification by Company, as of the applicable
Funding Date, as to the matters to which Company is required to certify in the
applicable Notice of Borrowing.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a Notice
of Borrowing for a Eurodollar Rate Loan (or telephonic notice in lieu thereof)
shall be irrevocable on and after the related Interest Rate Determination Date,
and Company shall be bound to make a borrowing in accordance therewith.
C. DISBURSEMENT OF FUNDS. All Acquisition Loans, Term Loans and
Revolving Loans under this Agreement shall be made by Lenders simultaneously and
proportionately to their respective Pro Rata Shares, it being understood that no
Lender shall be responsible for any default by any other Lender in that other
Lender's obligation to make a Loan requested hereunder nor shall the Commitment
of any Lender to make the particular type of Loan requested be increased or
decreased as a result of a default by any other Lender in that other Lender's
obligation to make a Loan requested hereunder. Promptly after receipt by
Administrative Agent of a Notice of Borrowing pursuant to subsection 2.1B (or
telephonic notice in lieu thereof), Administrative Agent shall notify each
Lender, or Swing Line Lender, as the case may be, of the proposed borrowing.
Each Lender shall make the amount of its Loan available to Administrative Agent
not later than 12:00 Noon (New York City time) on the applicable Funding Date,
and Swing Line Lender shall make the amount of its Swing Line Loan available to
Administrative Agent not later than 2:00 p.m. (New York time) on the applicable
Funding Date, in each case in same day funds in Dollars, at the Funding and
Payment Office. Except as provided in subsection 2.1A(v) or subsection 3.3B
with respect to Revolving Loans used to repay refunded Swing Line Loans or to
reimburse Issuing Lender for the amount of a drawing under a Letter of Credit
issued by it, upon satisfaction or waiver of the conditions precedent specified
in subsections 4.1 (in the case of Loans made on the Closing Date) and 4.2 (in
the case of all
34
Loans), Administrative Agent shall make the proceeds of such Loans available to
Company on the applicable Funding Date by causing an amount of same day funds in
Dollars equal to the proceeds of all such Loans received by Administrative Agent
from Lenders, or Swing Line Lender, as the case may be, to be credited to the
account of Company at the Funding and Payment Office.
Unless Administrative Agent shall have been notified by any Lender prior to
the Funding Date for any Loans that such Lender does not intend to make
available to Administrative Agent the amount of such Lender's Loan requested on
such Funding Date, Administrative Agent may assume that such Lender has made
such amount available to Administrative Agent on such Funding Date and
Administrative Agent may, in its sole discretion, but shall not be obligated to,
make available to Company a corresponding amount on such Funding Date. If such
corresponding amount is not in fact made available to Administrative Agent by
such Lender, Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest thereon,
for each day from such Funding Date until the date such amount is paid to
Administrative Agent, at the customary rate set by Administrative Agent for the
correction of errors among banks for three Business Days and thereafter at the
Base Rate. If such Lender does not pay such corresponding amount forthwith upon
Administrative Agent's demand therefor, Administrative Agent shall promptly
notify Company and Company shall immediately pay such corresponding amount to
Administrative Agent together with interest thereon, for each day from such
Funding Date until the date such amount is paid to Administrative Agent, at the
rate payable under this Agreement for Base Rate Loans. Nothing in this
subsection 2.1C shall be deemed to relieve any Lender from its obligation to
fulfill its Commitments hereunder or to prejudice any rights that Company may
have against any Lender as a result of any default by such Lender hereunder.
D. THE REGISTER.
(i) Administrative Agent shall maintain, at its address referred to
in subsection 10.8, a register for the recordation of the names and
addresses of Lenders and the Commitments and Loans of each Lender from time
to time (the "REGISTER"). The Register shall be available for inspection by
Company or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(ii) Administrative Agent shall record in the Register the
Commitments and Loans from time to time of each Lender, the Swing Line Loan
Commitment and the Swing Line Loans from time to time of Swing Line Lender,
and each repayment or prepayment in respect of the principal amount of the
Loans of each Lender or the Swing Line Loans of Swing Line Lender. Any such
recordation shall be conclusive and binding on Company and each Lender,
absent manifest error; provided that failure to make any such recordation,
--------
or any error in such recordation, shall not affect Company's Obligations in
respect of the applicable Loans.
(iii) Each Lender shall record on its internal records (including,
without limitation, any Notes held by such Lender) the amount of each Loan
made by it and each
35
payment in respect thereof. Any such recordation shall be conclusive and
binding on Company, absent manifest error; provided that failure to make
--------
any such recordation, or any error in such recordation, shall not affect
Company's Obligations in respect of the applicable Loans; and provided,
--------
further that in the event of any inconsistency between the Register and any
-------
Lender's records, the recordations in the Register shall govern.
(iv) Company, Administrative Agent and Lenders shall deem and treat
the Persons listed as Lenders in the Register as the holders and owners of
the corresponding Commitments and Loans listed therein for all purposes
hereof, and no assignment or transfer of any such Commitment or Loan shall
be effective, in each case unless and until an Assignment Agreement
effecting the assignment or transfer thereof shall have been accepted by
Administrative Agent and recorded in the Register as provided in subsection
10.1B(ii). Prior to such recordation, all amounts owed with respect to the
applicable Commitment or Loan shall be owed to the Lender listed in the
Register as the owner thereof, and any request, authority or consent of any
Person who, at the time of making such request or giving such authority or
consent, is listed in the Register as a Lender shall be conclusive and
binding on any subsequent holder, assignee or transferee of the
corresponding Commitments or Loans.
(v) Company hereby designates Administrative Agent to serve as
Company's agent solely for purposes of maintaining the Register as provided
in this subsection 2.1D, and Company hereby agrees that, to the extent
Administrative Agent serves in such capacity, Administrative Agent and its
officers, directors, employees, agents and affiliates shall constitute
Indemnitees for all purposes under subsection 10.3.
E. NOTES. Company shall on the Closing Date execute to each Lender (or
to Administrative Agent for that Lender):
(a) an Acquisition Facility Note substantially in the form of
Exhibit IV-A annexed hereto to evidence that Lender's Acquisition
------------
Loans, in the principal amount of that Lender's Acquisition Facility
Commitment and with other appropriate insertions;
(b) a Term Loan Note substantially in the form of Exhibit IV-B
------------
annexed hereto to evidence that Lender's Term Loan, in the principal
amount of that Lender's Term Loan Commitment and with other
appropriate inser tions;
(c) a Revolving Note substantially in the form of Exhibit IV-C
------------
annexed hereto to evidence that Lender's Revolving Loans, in the
principal amount of that Lender's Revolving Loan Commitment and with
other appropriate insertions; and
(d) a Swing Line Note substantially in the form of Exhibit IV-D
------------
annexed hereto to evidence Swing Line Lender's Swing Line Loans, in
the principal amount of the Swing Line Loan Commitment and with other
appropriate insertions.
36
Administrative Agent and Company may deem and treat the payee of any Note
as the owner thereof for all purposes hereof unless and until an Assignment
Agreement effecting the assignment or transfer thereof shall have been accepted
by Administrative Agent as provided in subsection 10.1B(ii). Any request,
authority or consent of any person or entity who, at the time of making such
request or giving such authority or consent, is the holder of any Note shall be
conclusive and binding on any subsequent holder, assignee or transferee of that
Note or of any Note or Notes issued in exchange therefor.
2.2 INTEREST ON THE LOANS.
---------------------
A. RATE OF INTEREST. Subject to the provisions of subsections 2:1B, 2.6
and 2.7, each Loan, except for Swing Line Loans, shall bear interest on the
unpaid principal amount thereof from the date made through maturity (whether by
acceleration or otherwise) at a rate determined by reference to the Base Rate or
the Adjusted Eurodollar Rate. Subject to the provisions of subsection 2.7, each
Swing Line Loan shall bear interest on the unpaid principal amount thereof from
the date made through maturity (whether by acceleration or otherwise) at a rate
determined by reference to the Base Rate. The applicable basis for determining
the rate of interest with respect to any Loan shall be selected by Company
initially at the time a Notice of Borrowing is given with respect to such Loan
pursuant to subsection 2.1B, and the basis for determining the interest rate
with respect to any Loan may be changed from time to time pursuant to subsection
2.2D. If on any day a Loan is outstanding with respect to which notice has not
been delivered to Administrative Agent in accordance with the terms of this
Agreement specifying the applicable basis for determining the rate of interest,
then for that day that Loan shall bear interest determined by reference to the
Base Rate.
Subject to the provisions of subsections 2.2E and 2.7, the Acquisition
Loans, the Term Loans and the Revolving Loans shall bear interest through
maturity as follows:
(i) if a Base Rate Loan, then at the sum of the Base Rate plus the
----
Applicable Margin; or
(ii) if a Eurodollar Rate Loan, then at the sum of the Adjusted
Eurodollar Rate plus the Applicable Margin.
----
Subject to the provisions of subsections 2.2E and 2.7, the Swing Line
Loans shall bear interest through maturity at the sum of the Base Rate plus
----
the Applicable Margin.
B. INTEREST PERIODS. In connection with each Eurodollar Rate Loan,
Company may, pursuant to the applicable Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, select an interest period (each an
"INTEREST PERIOD") to be applicable to such Loan, which Interest Period shall
be, at Company's option, either a one, two, three or six month period; provided
--------
that:
(i) the initial Interest Period for any Eurodollar Rate Loan shall
commence on the Funding Date in respect of such Loan, in the case of a Loan
initially made as a
37
Eurodollar Rate Loan, or on the date specified in the applicable Notice of
Conversion/Continuation, in the case of a Loan converted to a Eurodollar
Rate Loan;
(ii) in the case of immediately successive Interest Periods
applicable to a Eurodollar Rate Loan continued as such pursuant to a Notice
of Conversion/Continuation, each successive Interest Period shall commence
on the day on which the next preceding Interest Period expires;
(iii) if an Interest Period would otherwise expire on a day that is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided that, if any Interest Period would
--------
otherwise expire on a day that is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
(iv) any Interest Period that begins on the last 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,
subject to clause (v) of this subsection 2.2B, end on the last Business Day
of a calendar month;
(v) no Interest Period with respect to any portion of the Loans
shall extend beyond June 30, 2002;
(vi) no Interest Period with respect to any portion of the Loans
shall extend beyond a date on which Company is required to make a scheduled
payment of principal on such Loans unless the sum of (a) the aggregate
principal amount of such Loans that are Base Rate Loans plus (b) the
----
aggregate principal amount of such Loans that are Eurodollar Rate Loans
with Interest Periods expiring on or before such date equals or exceeds the
principal amount required to be paid on such Loan on such date;
(vii) there shall be no more than 10 Interest Periods outstanding at
any time; and
(viii) in the event Company fails to specify an Interest Period for
any Eurodollar Rate Loan in the applicable Notice of Borrowing or Notice of
Conver sion/Continuation, Company shall be deemed to have selected an
Interest Period of one month.
C. INTEREST PAYMENTS. Subject to the provisions of subsection 2.2E,
interest on each Loan shall be payable in arrears on and to each Interest
Payment Date applicable to that Loan, upon any prepayment of that Loan (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity); provided that in the event any Swing Line Loans or any Revolving
--------
Loans that are Base Rate Loans are prepaid pursuant to subsection 2.4B(i),
interest accrued on such Swing Line Loans or Revolving Loans through the date of
such prepayment shall be payable on the next succeeding Interest Payment Date
applicable to Base Rate Loans (or, if earlier, at final maturity).
38
D. CONVERSION OR CONTINUATION. Subject to the provisions of subsection
2.6, Company shall have the option (i) to convert at any time all or any part of
its outstanding Acquisition Loans or Term Loan or Revolving Loans equal to
$5,000,000 and integral multiples of $1,000,000 in excess of that amount from
Loans bearing interest at a rate determined by reference to one basis to Loans
bearing interest at a rate determined by reference to the alternative basis or
(ii) upon the expiration of any Interest Period applicable to a Eurodollar Rate
Loan, to continue all or any portion of such Loan equal to $5,000,000 and
integral multiples of $1,000,000 in excess of that amount as a Eurodollar Rate
Loan; provided, however, that (y) a Eurodollar Rate Loan may only be converted
--------- -------
into a Base Rate Loan on the expiration date of an Interest Period applicable
thereto and (z) no Loan may be converted from a Base Rate Loan to Eurodollar
Rate Loan during the Initial Period.
Company shall deliver a Notice of Conversion/Continuation to Administrative
Agent no later than 12:00 Noon (New York time) at least one Business Day in
advance of the proposed conversion date (in the case of a conversion to a Base
Rate Loan) and at least three Business Days in advance of the proposed
conversion/continuation date (in the case of a conversion to, or a continuation
of, a Eurodollar Rate Loan). A Notice of Conversion/Continuation shall specify
(i) the proposed conversion/continuation date (which shall be a Business Day),
(ii) the amount and type of the Loan to be converted/continued, (iii) the nature
of the proposed conversion/continuation, (iv) in the case of a conversion to, or
a continuation of, a Eurodollar Rate Loan, the requested Interest Period, and
(v) in the case of a conversion to, or a continuation of, a Eurodollar Rate
Loan, that no Potential Event of Default or Event of Default has occurred and is
continuing. In lieu of delivering the above-described Notice of
Conversion/Continuation, Company may give Administrative Agent telephonic notice
by the required time of any proposed conversion/continuation under this
subsection 2.2D; provided that such notice shall be promptly confirmed in
--------
writing by delivery of a Notice of Conversion/Continuation to Administrative
Agent on or before the proposed conversion/continuation date.
Neither Administrative Agent nor any Lender shall incur any liability to
Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to act on behalf of Company or for
otherwise acting in good faith under this subsection 2.2D, and upon conversion
or continuation of the applicable basis for determining the interest rate with
respect to any Loans in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected a conversion or continuation, as
the case may be, hereunder.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a Notice
of Conversion/Continuation for conversion to, or continuation of, a Eurodollar
Rate Loan (or telephonic notice in lieu thereof) shall be irrevocable on and
after the related Interest Rate Determination Date, and Company shall be bound
to effect a conversion or continuation in accordance therewith.
E. POST-MATURITY INTEREST. Any principal payments on the Loans not paid
when due and, to the extent permitted by applicable law, any interest payments
on the Loans or any fees or other amounts owed hereunder not paid when due, in
each case whether at stated maturity, by notice of prepayment, by acceleration
or otherwise, shall thereafter bear interest (including post-
39
petition interest in any proceeding under the Bankruptcy Code or other
applicable bankruptcy laws whether or not allowed as a claim against Company
under the Bankruptcy Code or other applicable bankruptcy laws) payable on demand
at a rate which is 2% per annum in excess of the interest rate otherwise payable
under this Agreement with respect to the applicable Loans (or, in the case of
any such fees and other amounts, at a rate which is 2% per annum in excess of
the interest rate otherwise payable under this Agreement for Base Rate Loans);
provided that, in the case of Eurodollar Rate Loans, upon the expiration of the
--------
Interest Period in effect at the time any such increase in interest rate is
effective such Eurodollar Rate Loans shall thereupon become Base Rate Loans and
shall thereafter bear interest payable upon demand at a rate which is 2% per
annum in excess of the interest rate otherwise payable under this Agreement for
Base Rate Loans. Payment or acceptance of the increased rates of interest
provided for in this subsection 2.2E is not a permitted alternative to timely
payment and shall not constitute a waiver of any Event of Default or otherwise
prejudice or limit any rights or remedies of Administrative Agent or any Lender.
F. COMPUTATION OF INTEREST. Interest on the Loans shall be computed on
the basis of a 360-day year, in each case for the actual number of days elapsed
in the period during which it accrues. In computing interest on any Loan, the
date of the making of such Loan or the first day of an Interest Period
applicable to such Loan or, with respect to a Base Rate Loan being converted
from a Eurodollar Rate Loan, the date of conversion of such Eurodollar Rate Loan
to such Base Rate Loan, as the case may be, shall be included, and the date of
payment of such Loan or the expiration date of an Interest Period applicable to
such Loan or, with respect to a Base Rate Loan being converted to a Eurodollar
Rate Loan, the date of conversion of such Base Rate Loan to such Eurodollar Rate
Loan, as the case may be, shall be excluded; provided that if a Loan is repaid
--------
on the same day on which it is made, one day's interest shall be paid on that
Loan.
2.3 FEES.
----
A. COMMITMENT FEES.
(i) Company agrees to pay to Administrative Agent, for distribution
to each Lender in proportion to that Lender's Pro Rata Share of the
Acquisition Facility Commitments, commitment fees for the period from and
including the Closing Date to and excluding the Second Anniversary of the
Closing Date equal to the average of the daily excess of the Acquisition
Facility Commitments, as then in effect, over the sum of the aggregate
principal amount of Acquisition Loans outstanding multiplied by the
-------------
Applicable Commitment Fee Percentage; and
(ii) Company agrees to pay to Administrative Agent, for distribution
to each Lender in proportion to that Lender's Pro Rata Share of the
Revolving Loan Commitments (other than Swing Line Loan Commitments),
commitment fees for the period from and including the Closing Date to and
excluding June 30, 2002 equal to the average of the daily excess of the
Revolving Loan Commitments over the aggregate principal amount
40
of Revolving Loans outstanding (but not any Swing Line Loans outstanding)
multiplied by the Applicable Commitment Fee Percentage.
-------------
Such commitment fees to be calculated on the basis of a 360-day year and
the actual number of days elapsed and to be payable quarterly in arrears on
March 15, June 15, September 15 and December 15 of each year, commencing on the
first such date to occur after the Closing Date and ending on June 30, 2002.
B. ADMINISTRATIVE AGENT FEE. Company agrees to pay to Administrative
Agent, an Administrative Agent's fee in the amount and at the times separately
agreed to by Administrative Agent and Company.
C. OTHER FEES. Company agrees to pay to Syndication Agent, Arranging
Agent and Administrative Agent such other fees in the amounts and at the times
separately agreed upon between Company, Syndication Agent, Arranging Agent and
Administrative Agent.
2.4 REPAYMENTS, PREPAYMENTS AND REDUCTIONS IN COMMITMENTS; GENERAL PROVISIONS
-------------------------------------------------------------------------
REGARDING PAYMENTS; APPLICATION OF PROCEEDS OF COLLATERAL AND PAYMENTS
----------------------------------------------------------------------
UNDER SUBSIDIARY GUARANTY.
-------------------------
A. SCHEDULED PAYMENTS OF ACQUISITION LOANS.
(i) Scheduled Payments of Acquisition Loans. Company shall make
---------------------------------------
principal payments on the Acquisition Loans in installments on the dates
and in amounts equal to the percentage of the aggregate amount of the
Acquisition Loans outstanding on the second anniversary of the Closing
Date, as set forth below:
======================================
SCHEDULED
REPAYMENTS
OF ACQUISITION
DATE LOANS
======================================
September 30, 1999 2.5%
--------------------------------------
December 31, 1999 2.5%
--------------------------------------
March 31, 2000 3.0%
--------------------------------------
June 30, 2000 3.0%
--------------------------------------
September 30, 2000 4.5%
--------------------------------------
December 31, 2000 4.5%
--------------------------------------
March 31, 2001 4.5%
--------------------------------------
June 30, 2001 4.5%
--------------------------------------
September 30, 2001 5.5%
--------------------------------------
December 31, 2001 5.5%
======================================
41
======================================
SCHEDULED
REPAYMENTS
OF ACQUISITION
DATE LOANS
======================================
March 31, 2002 15.0%
--------------------------------------
June 30, 2002 45.0%
======================================
; provided that the scheduled installments of principal of the Acquisition
--------
Loans provided for above shall be reduced in connection with any voluntary
or mandatory prepayments of the Acquisition Loans in accordance with
subsection 2.4B(iv); and provided further, that the Acquisition Loans and
-------- -------
all other amounts owed hereunder with respect to the Acquisition Loans
shall be paid in full no later than June 30, 2002 with respect thereto and
the final installment payable by Company in respect of the Acquisition
Loans on such date shall be in an amount, if such amount is different from
that provided for above, sufficient to repay all amounts owing by Company
under this Agreement with respect to the Acquisition Loans.
(ii) Scheduled Payments of Term Loan. Company shall make principal
-------------------------------
payments on the Term Loans in installments on the dates and in the amounts
set forth below:
====================================
SCHEDULED
REPAYMENT OF
DATE TERM LOAN
====================================
September 30, 1997 $1,000,000
------------------------------------
December 31, 1997 $1,000,000
------------------------------------
March 31, 1998 $1,250,000
------------------------------------
June 30, 1998 $1,250,000
------------------------------------
September 30, 1998 $1,250,000
------------------------------------
December 31, 1998 $1,250,000
------------------------------------
March 31, 1999 $2,000,000
------------------------------------
June 30, 1999 $2,000,000
------------------------------------
September 30, 1999 $2,000,000
------------------------------------
December 31, 1999 $2,000,000
------------------------------------
March 31, 2000 $2,500,000
====================================
42
====================================
SCHEDULED
REPAYMENT OF
DATE TERM LOAN
====================================
June 30, 2000 $2,500,000
------------------------------------
September 30, 2000 $2,500,000
------------------------------------
December 31, 2000 $2,500,000
------------------------------------
March 31, 2001 $2,500,000
------------------------------------
June 30, 2001 $2,500,000
------------------------------------
September 30, 2001 $2,500,000
------------------------------------
December 31, 2001 $2,500,000
------------------------------------
March 31, 2002 $7,500,000
------------------------------------
June 30, 2002 $7,500,000
====================================
; provided that the scheduled installments of principal of the Term Loans
--------
set forth above shall be reduced in connection with any voluntary or
mandatory prepayments of the Term Loans in accordance with subsection
2.4B(iv); and provided, further that the Term Loans and all other amounts
-------- -------
owed hereunder with respect to the Term Loans shall be paid in full no
later than June 30, 2002, and the final installment payable by Company in
respect of the Term Loans on such date shall be in an amount, if such
amount is different from that specified above, sufficient to repay all
amounts owing by Company under this Agreement with respect to the Term
Loan.
B. PREPAYMENTS AND REDUCTIONS IN COMMITMENTS.
(i) Voluntary Prepayments. Company may, upon written or telephonic
---------------------
notice to Administrative Agent on or prior to 12:00 Noon (New York time) on
the date of prepayment, which notice, if telephonic, shall be promptly
confirmed in writing, at any time and from time to time prepay any Swing
Line Loan on any Busi ness Day in whole or in part in an aggregate minimum
amount of $500,000 and integral multiples of $100,000 in excess of that
amount. Company may, upon not less than one Business Day's prior written
or telephonic notice, in the case of Base Rate Loans, and three Business
Days' prior written or telephonic notice, in the case of Eurodollar Rate
Loans, in each case given to Administrative Agent by 12:00 Noon (New York
time) on the date required and, if given by telephone, promptly confirmed
in writing to Administrative Agent (which original written or telephonic
notice Administrative Agent will promptly transmit by telefacsimile or
telephone to each Lender), at any time and from time to time prepay any
Acquisition Loans, Term Loans or Revolving Loans on any Business Day in
whole or in part in an aggregate minimum amount of $5,000,000 and integral
multiples of $1,000,000 in excess of that amount (or such lesser amount as
shall constitute the
43
aggregate amount of all outstanding Loans, as the case may be); provided,
--------
however, that with respect to any Eurodollar Rate Loan not prepaid on the
-------
expiration of the Interest Period applicable thereto, Company shall pay any
amount payable pursuant to subsection 2.6D. Notice of prepayment having
been given as aforesaid, the principal amount of the Loans specified in
such notice shall become due and payable on the prepayment date specified
therein.
(ii) Voluntary Reductions of Commitments. Company may, upon not less
-----------------------------------
than three Business Days' prior written or telephonic notice confirmed in
writing to Administrative Agent (which original written or telephonic
notice Administrative Agent will promptly transmit by telefacsimile or
telephone to each Lender), at any time and from time to time terminate in
whole or permanently reduce in part, without premium or penalty, the
Acquisition Loan Commitments, or the Revolving Loan Commitments in each
case in an amount up to the amount by which the Acquisition Facility
Commitments, or the Revolving Loan Commitments exceed the aggregate amount
of all outstanding Acquisition Loans, or aggregate Revolving Loan Exposure,
respectively, at the time of such proposed termination or reduction;
provided that any such partial reduction of the Commitments shall be in an
--------
aggregate minimum amount of $5,000,000 and integral multiples of $1,000,000
in excess of that amount. Company's notice to Administrative Agent shall
designate the date (which shall be a Business Day) of such termination or
reduction and the amount of any partial reduction, and such termination or
reduction of the Commitments shall be effective on the date specified in
Company's notice and shall reduce the applicable Commitment of each Lender
proportionately to its Pro Rata Share of such Commitments.
(iii) Mandatory Prepayments and Mandatory Reductions of Commitments.
-------------------------------------------------------------
(a) Prepayments and Reductions from Asset Sales. No later than
-------------------------------------------
the first Business Day following the date of receipt by Company or any
of its Subsidiaries of Net Cash Proceeds of any Asset Sale, Company
shall prepay in an amount equal to such Net Cash Proceeds first the
-----
Term Loans to the full extent thereof and second after the second
------
anniversary of the Closing Date the Acquisition Loans, and third the
-----
Revolving Loans. Notwithstanding the foregoing, the Net Cash Proceeds
of Specified Asset Sales shall not be required to prepay Loans as set
forth above to the extent that and so long as such Net Cash Proceeds
are (x) within 180 days of receipt of such proceeds, reinvested in the
business of the Company and the Subsidiaries or, (y) within 180 days
of receipt of such proceeds committed for reinvestment and reinvested
within 300 days of receipt of such proceeds in the business of the
Company and the Subsidiaries, and (z) the aggregate principal amount
of all such proceeds not so reinvested at any time does not exceed
$10,000,000; provided that any such funds in excess of $10,000,000 not
--------
so committed or reinvested shall be used to make prepayments as
required pursuant to this subsection 2.4B(iii)(a). Concurrently with
any prepayment of the Loans and/or reduction of the applicable
Commitments pursuant to this subsection 2.4B(iii)(a), Company shall
deliver to Administrative Agent an Officers' Certificate demonstrating
the derivation of the Net Cash Proceeds of the correlative Asset Sale
from the gross sales price thereof. In the event that Company shall,
at any time after receipt of Cash Proceeds of any Asset Sale requiring
a prepayment or a reduction of the applicable Commitments pursuant to
this subsection 2.4B(iii)(a), determine that the prepayments and/or
reductions of the applicable Commitments previously made in respect of
such Asset Sale were in an aggregate amount less than that required by
the terms of this subsection 2.4B(iii)(a), Company shall promptly make
an additional prepayment of the Loans (and, if applicable, the
applicable Commitments shall be permanently reduced), in the manner
described above in an amount equal to the amount of any such deficit,
and Company shall concurrently therewith deliver to Administrative
Agent an Officers' Certifi-
44
cate demonstrating the derivation of the additional Net Cash Proceeds
resulting in such deficit. Any mandatory prepayments pursuant to this
subsection 2.4B(iii)(a) shall be further applied as specified in
subsection 2.4B(iv).
(b) Prepayments and Reductions Due to Reversion of Surplus Assets
-------------------------------------------------------------
of Pension Plans. On the date of return to Company or any of its
----------------
Subsidiaries of any surplus assets of any pension plan of Company or
any of its Subsidiaries, Company shall prepay in an amount (the "NET
REVERSION AMOUNT") equal to 100% of such returned surplus assets, net
of transaction costs and expenses incurred in obtaining such return,
including incremental taxes payable as a result thereof, and Company
shall prepay in an amount equal thereto first the Term Loans to the
-----
full extent thereof, second after the second anniversary of the
------
Closing Date, the Acquisition Loans and third the Revolving Loans.
-----
Any such mandatory prepayments shall be further applied as specified
in subsection 2.4B(iv).
(c) Prepayments Due to Issuance of Equity Securities. No later
------------------------------------------------
than the first Business Day following the date of receipt by Company
or any of its Subsidiaries of the Cash proceeds (net of underwriting
discounts and commissions and other reasonable costs associated
therewith) from the issuance of any equity Securities of such Person
(including without limitation additional issuances of Company Common
Stock but excluding (x) issuances of Company Common Stock to officers
or employees of Company to the extent the proceeds from such issuances
do not exceed in the aggregate $1,000,000 during any fiscal year and
issuances of any Securities evidencing Indebtedness permitted to be
incurred pursuant to subsection 7.1 and (y) issuance of equity
Securities to the extent the proceeds of which are used to fund
Permitted Acquisitions), Company shall prepay in an amount equal to
the proceeds of such issuance first the Term Loans to the full extent
-----
thereof, second after the second anniversary of the Closing Date, the
------
Acquisition Loans and third the Revolving Loans; provided that on and
----- --------
after the date on which the Leverage Ratio (determined on a Pro Forma
Basis giving effect to the issuance and application of the equity
securities proceeds) is less than or equal to 2.50:1.0, 50% of the
proceeds otherwise required to be utilized to prepay Loans pursuant to
this subdivision (c) of subsection 2.4B(iii) may be applied to
45
repurchase or prepay the Unsecured Subordinated Notes. Any such
mandatory prepayments shall be further applied as specified in
subsection 2.4B(iv).
(d) Prepayments Due to Issuance of Debt. On or prior to the
-----------------------------------
first Business Day after receipt by Company or any of its Subsidiaries
of any proceeds of any Indebtedness (other than the Loans, and any
other Indebted ness permitted by this Agreement), Company shall prepay
in an amount equal to the amount of such proceeds to first the Term
-----
Loans to the full extent thereof, second after the second anniversary
------
of the Closing Date, the Acquisi tion Loans and third the Revolving
-----
Loans; provided that payment or acceptance of the amounts provided for
--------
in this subsection 2.4B(iii)(d) shall not constitute a waiver of any
Event of Default resulting from the incurrence of such Indebtedness or
otherwise prejudice any rights or remedies of Agents or Lenders. Any
such mandatory prepayments shall be further applied as specified in
subsection 2.4(B)(iv).
(e) Prepayments and Reductions from Net Insurance/Condemna tion
-----------------------------------------------------------
Proceeds. No later than the first Business Day following the date of
--------
receipt by Agents or by Company or any of its Subsidiaries of any Net
Insur ance/Condemnation Proceeds that are required to be applied to
prepay the Loans pursuant to the provisions of subsection 6.4B,
Company shall prepay in an amount equal to such Net
Insurance/Condemnation Proceeds first the Term Loans to the full
-----
extent thereof, second after the second anniversary of the Closing
------
Date, the Acquisition Loans and third the Revolving Loans.
-----
Concurrently with any prepayment of the Loans and/or reduction of the
Revolving Loan Commitments pursuant to this subsection 2.4B(iii)(e),
Company shall deliver to Administrative Agent an Officers' Certificate
demonstrating the calculation of the amount (the "NET PROCEEDS
AMOUNT") of the Net Insurance/Condemnation Proceeds, that gave rise
to such prepayment and/or reduction. In the event that Company shall
subsequently determine that the actual Net Proceeds Amount was greater
than the amount set forth in such Officers' Certificate, Company shall
promptly make an additional prepayment of the Loans (and, if
applicable, the Acquisition Loan Commitments and the Revolving Loan
Commitments shall be permanently reduced) in an amount equal to the
amount of such excess, and Company shall concurrently therewith
deliver to Administrative Agent an Officers' Certificate demonstrating
the derivation of the additional Net Proceeds Amount resulting in such
excess. Any such mandatory prepayments shall be applied as specified
in subsection 2.4B(iv).
(f) Prepayments and Reductions from Consolidated Excess Cash
--------------------------------------------------------
Flow. In the event that there shall be Consolidated Excess Cash Flow
for any fiscal year commencing on or after December 29, 1997, within
100 days after the last day of such fiscal year Company shall prepay
in an amount equal to 50% of such Consolidated Excess Cash Flow first
-----
the Term Loans to the full extent thereof, second after the second
------
anniversary of the Closing Date, the Acquisition Loans and third the
-----
Revolving Loans; provided that so long as the Leverage Ratio as of
46
the end of Fiscal Year immediately prior to the date of payment under
this subsection 2.4B(f) is less than or equal to 2.5:1.0 then only 25%
of such Consolidated Excess Cash Flow shall be required to be prepaid.
Any such mandatory prepayments shall be applied as specified in
subsection 2.4B(iv).
(g) Prepayments Due to Reductions or Restrictions of Revolving
----------------------------------------------------------
Loan Commitments. Company shall from time to time prepay first the
---------------- -----
Swing Line Loans and second the Revolving Loans to the extent
------
necessary so that the Total Utilization of Revolving Loan Commitments
shall not at any time exceed the Revolving Loan Commitments then in
effect.
(iv) Application of Prepayments.
--------------------------
(a) Application of Voluntary Prepayments by Type of Loans and
---------------------------------------------------------
Order of Maturity. Any voluntary prepayments pursuant to subsection
-----------------
2.4B(i) shall, with respect to the allocation of such prepayments
among Loans and scheduled amortization payments, if applicable, be
applied as specified by Company in the applicable notice of
prepayment; provided that in the event Company fails to specify the
--------
Loans to which any such prepayment shall be applied, such prepayment
shall be applied first to repay outstanding Term Loans to the full
-----
extent thereof, second to repay outstanding Acquisition Loans to the
------
full extent thereof, third to repay Swing Line Loans and fourth to
----- ------
repay outstanding Revolving Loans to the full extent thereof.
(b) Application of Mandatory Prepayments by Type of Loans and
---------------------------------------------------------
Order of Maturity. Any mandatory prepayments of the Loans pursuant to
-----------------
subsection 2.4B(iii) shall be applied first pro-rata to the scheduled
-----
install ments of principal of the applicable Loans set forth in
subsection 2.4A(i) and subsection 2.4A(ii), respectively, that are
unpaid at the time of such prepayment, second to prepay the Swing Line
------
Loans to the full extent thereof and third, to prepay the Revolving
-----
Loans to the full extent thereof.
(c) Application of Prepayments to Base Rate Loans and Eurodollar
------------------------------------------------------------
Rate Loans. Considering Acquisition Loans and Term Loan Loans being
----------
prepaid separately, any prepayment thereof shall be applied first to
Base Rate Loans to the full extent thereof before application to
Eurodollar Rate Loans, in each case in a manner which minimizes the
amount of any payments required to be made by Company pursuant to
subsection 2.6D.
C. GENERAL PROVISIONS REGARDING PAYMENTS.
(i) Manner and Time of Payment. All payments by Company of principal,
--------------------------
interest, fees and other Obligations hereunder and under the Notes shall be
made in Dollars in same day funds, without defense, setoff or counterclaim,
free of any restriction or condition, and delivered to Administrative Agent
not later than 12:00 Noon (New York
47
time) on the date due at the Funding and Payment Office for the account of
Lenders; funds received by Administrative Agent after that time on such due
date shall be deemed to have been paid by Company on the next succeeding
Business Day. Company hereby authorizes Administrative Agent to charge its
accounts with Administrative Agent in order to cause timely payment to be
made to Administrative Agent of all principal, interest, fees and expenses
due hereunder (subject to sufficient funds being available in its accounts
for that purpose).
(ii) Application of Payments to Principal and Interest. Subject to
-------------------------------------------------
subsection 2.2C of this Agreement, all payments in respect of the principal
amount of any Loan shall include payment of accrued interest on the
principal amount being repaid or prepaid, and all such payments shall be
applied to the payment of interest before application to principal.
(iii) Apportionment of Payments. Aggregate principal and interest
-------------------------
payments in respect of Acquisition Loans, Term Loans and Revolving Loans
shall be apportioned among all outstanding Loans to which such payments
relate, in each case proportionately to Lenders' respective Pro Rata
Shares. Administrative Agent shall promptly distribute to each Lender, at
its primary address set forth below its name on the appropriate signature
page hereof or at such other address as such Lender may request, its Pro
Rata Share of all such payments received by Administrative Agent and the
commitment fees of such Lender when received by Administrative Agent
pursuant to subsection 2.3. Notwithstanding the foregoing provisions of
this subsection 2.4C(iii), if, pursuant to the provisions of subsection
2.6C, any Notice of Conversion/Continuation is withdrawn as to any Affected
Lender or if any Affected Lender makes Base Rate Loans in lieu of its Pro
Rata Share of any Eurodollar Rate Loans, Administrative Agent shall give
effect thereto in apportioning payments received thereafter.
(iv) Payments on Business Days. Whenever any payment to be made
-------------------------
hereunder shall be stated to be due on a day that is not a Business Day,
such payment shall be made on the next succeeding Business Day and such
extension of time shall be included in the computation of the payment of
interest hereunder or of the commitment fees hereunder, as the case may be.
(v) Notation of Payment. Each Lender agrees that before disposing
-------------------
of any Note held by it, or any part thereof (other than by granting
participations therein), that Lender will make a notation thereon of all
Loans evidenced by that Note and all principal payments previously made
thereon and of the date to which interest thereon has been paid; provided
--------
that the failure to make (or any error in the making of) a notation of any
Loan made under such Note shall not limit or otherwise affect the
obligations of Company hereunder or under such Note with respect to any
Loan or any payments of principal or interest on such Note.
48
D. APPLICATION OF PROCEEDS OF COLLATERAL AND PAYMENTS UNDER SUBSIDIARY
GUARANTY.
(i) Application of Proceeds of Collateral. Except as provided in
-------------------------------------
subsection 2.4B(iii)(a) with respect to prepayments from Asset Sales, all
proceeds received by Administrative Agent in respect of any sale of,
collection from, or other realization upon all or any part of the
Collateral pursuant to the exercise of rights and remedies under any
Collateral Document shall be applied in full or in part by Agent against,
the applicable Secured Obligations (as defined in such Collateral Document)
in the following order of priority:
(a) To the payment of all costs and expenses of such sale,
collection or other realization, including reasonable compensation to
Agent and its agents and counsel, and all other expenses, liabilities
and advances made or incurred by Agent in connection therewith, and
all amounts for which Agent is entitled to indemnification under such
Collateral Document and all advances made by Agent thereunder for the
account of the applicable Loan Party, and to the payment of all costs
and expenses paid or incurred by Agent in connection with the exercise
of any right or remedy under such Collateral Document, all in
accordance with the terms of this Agreement and such Collateral
Document;
(b) thereafter, to the extent of any excess such proceeds, to the
payment of all other such Secured Obligations for the ratable benefit
of the holders thereof; and
(c) thereafter, to the extent of any excess such proceeds, to the
payment to or upon the order of such Loan Party or to whosoever may be
lawfully entitled to receive the same or as a court of competent
jurisdiction may direct.
(ii) Application of Payments Under Subsidiary Guaranty. All payments
-------------------------------------------------
received by Agent under the Subsidiary Guaranty shall be applied promptly
from time to time by Administrative Agent in the following order of
priority:
(a) To the payment of the costs and expenses of any collection or
other realization under the Subsidiary Guaranty, including reasonable
compensation to Administrative Agent and its agents and counsel, and
all expenses, liabilities and advances made or incurred by
Administrative Agent in connection therewith, all in accordance with
the terms of this Agreement and the Subsidiary Guaranty;
(b) thereafter, to the extent of any excess such payments, to the
payment of all other Guarantied Obligations (as defined in the
Subsidiary Guaranty) for the ratable benefit of the holders thereof;
and
49
(c) thereafter, to the extent of any excess such payments, to the
payment to the applicable Subsidiary Guarantor or to whosoever may be
lawfully entitled to receive the same or as a court of competent
jurisdiction may direct.
2.5 USE OF PROCEEDS.
---------------
A. ACQUISITION LOANS. The proceeds of the Acquisition Loans shall be
applied by Company to finance Permitted Acquisitions (which may include the
simultaneous repayment of debt assumed in connection with Permitted
Acquisitions) and to pay related costs and expenses.
B. TERM LOANS. The proceeds of the Term Loans shall be applied, together
with the proceeds from the issuance of the Unsecured Subordinated Notes, by
Company (i) to repurchase all of the outstanding Preferred Stock, (ii) to repay
outstanding principal and accrued interest and all other obligations with
respect to the Specified Indebtedness in accordance with Schedule 1.1A and (iii)
-------------
to pay Transaction Costs.
C. REVOLVING LOANS; SWING LINE LOANS. The proceeds of any Revolving
Loans and Swing Line Loans shall be applied by Company for working capital or
general corporate purposes.
D. MARGIN REGULATIONS. No portion of the proceeds of any borrowing under
this Agreement shall be used by Company or any of its Subsidiaries in any manner
that might cause the borrowing or the application of such proceeds to violate
Regulation G, Regulation U, Regulation T or Regulation X of the Board of
Governors of the Federal Reserve System or any other regulation of such Board or
to violate the Exchange Act, in each case as in effect on the date or dates of
such borrowing and such use of proceeds.
2.6 SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS.
--------------------------------------------------
Notwithstanding any other provision of this Agreement to the contrary, the
following provisions shall govern with respect to Eurodollar Rate Loans as to
the matters covered:
A. DETERMINATION OF APPLICABLE INTEREST RATE. As soon as practicable
after 10:00 A.M. (New York time) on each Interest Rate Determination Date,
Administrative Agent shall determine (which determination shall, absent manifest
error, be final, conclusive and binding upon all parties) the interest rate that
shall apply to the Eurodollar Rate Loans for which an interest rate is then
being determined for the applicable Interest Period and shall promptly give
notice thereof (in writing or by telephone confirmed in writing) to Company and
each Lender.
B. INABILITY TO DETERMINE APPLICABLE INTEREST RATE. In the event that
Administra tive Agent shall have determined (which determination shall be final
and conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any Eurodollar Rate Loans, that by reason of
circumstances affecting the interbank Eurodollar market adequate and fair means
do not exist for ascertaining the interest rate applicable to such Loans on the
basis provided for in the definition of Adjusted Eurodollar Rate, Administrative
Agent shall on such
50
date give notice (by telefacsimile or by telephone confirmed in writing) to
Company and each Lender of such determination, whereupon (i) no Loans may be
made as, or converted to, Eurodollar Rate Loans until such time as
Administrative Agent notifies Company and Lenders that the circumstances giving
rise to such notice no longer exist and (ii) any Notice of Borrowing or Notice
of Conversion/Continuation given by Company with respect to the Loans in respect
of which such determination was made shall be deemed to be rescinded by Company.
C. ILLEGALITY OR IMPRACTICABILITY OF EURODOLLAR RATE LOANS. In the event
that on any date any Lender shall have determined (which determination shall be
final and conclusive and binding upon all parties hereto but shall be made only
after consultation with Company and Administrative Agent) that the making,
maintaining or continuation of its Eurodollar Rate Loans (i) has become unlawful
as a result of compliance by such Lender in good faith with any law, treaty,
governmental rule, regulation, guideline or order (or would conflict with any
such treaty, governmental rule, regulation, guideline or order not having the
force of law even though the failure to comply therewith would not be unlawful)
or (ii) has become impracticable, or would cause such Lender material hardship,
as a result of contingencies occurring after the date of this Agreement which
materially and adversely affect the interbank Eurodollar market or the position
of such Lender in that market, then, and in any such event, such Lender shall be
an "AFFECTED LENDER" and it shall on that day give notice (by telefacsimile or
by telephone confirmed in writing) to Company and Administrative Agent of such
determination (which notice Administrative Agent shall promptly transmit to each
other Lender). Thereafter (a) the obligation of the Affected Lender to make
Loans as, or to convert Loans to, Eurodollar Rate Loans shall be suspended until
such notice shall be withdrawn by the Affected Lender, (b) to the extent such
determination by the Affected Lender relates to a Eurodollar Rate Loan then
being requested by Company pursuant to a Notice of Borrowing or a Notice of
Conversion/Continuation, the Affected Lender shall make such Loan as (or convert
such Loan to, as the case may be) a Base Rate Loan, (c) the Affected Lender's
obligation to maintain its outstanding Eurodollar Rate Loans (the "AFFECTED
LOANS") shall be terminated at the earlier to occur of the expiration of the
Interest Period then in effect with respect to the Affected Loans or when
required by law, and (d) the Affected Loans shall automatically convert into
Base Rate Loans on the date of such termination. Notwithstanding the foregoing,
to the extent a determination by an Affected Lender as described above relates
to a Eurodollar Rate Loan then being requested by Company pursuant to a Notice
of Borrowing or a Notice of Conversion/Continuation, Company shall have the
option, subject to the provisions of subsection 2.6D, to rescind such Notice of
Borrowing or Notice of Conversion/Continuation as to all Lenders by giving
notice (by telefacsimile or by telephone confirmed in writing) to Administrative
Agent of such rescission on the date on which the Affected Lender gives notice
of its determination as described above (which notice of rescission
Administrative Agent shall promptly transmit to each other Lender). Except as
provided in the immediately preceding sentence, nothing in this subsection 2.6C
shall affect the obligation of any Lender other than an Affected Lender to make
or maintain Loans as, or to convert Loans to, Eurodollar Rate Loans in
accordance with the terms of this Agreement.
D. COMPENSATION FOR BREAKAGE OR NON-COMMENCEMENT OF INTEREST PERIODS.
Company shall compensate each Lender, upon written request by that Lender (which
request shall set forth the basis for requesting such amounts), for all
reasonable losses, expenses and liabilities
51
(including, without limitation, any interest paid by that Lender to lenders of
funds borrowed by it to make or carry its Eurodollar Rate Loans and any loss,
expense or liability sustained by that Lender in connection with the liquidation
or re-employment of such funds) which that Lender may sustain: (i) if for any
reason (other than a default by that Lender) a borrowing of any Eurodollar Rate
Loan does not occur on a date specified therefor in a Notice of Borrowing or a
telephonic request for borrowing, or a conversion to or continuation of any
Eurodollar Rate Loan does not occur on a date specified therefor in a Notice of
Conversion/Continuation or a telephonic request for conversion or continuation,
(ii) if any prepayment or other principal payment or any conversion of any of
its Eurodollar Rate Loans occurs on a date prior to the last day of an Interest
Period applicable to that Loan, (iii) if any prepayment of any of its Eurodollar
Rate Loans is not made on any date specified in a notice of prepayment given by
Company, or (iv) as a consequence of any other default by Company in the
repayment of its Eurodollar Rate Loans when required by the terms of this
Agreement.
E. BOOKING OF EURODOLLAR RATE LOANS. Any Lender may make, carry or
transfer Eurodollar Rate Loans at, to, or for the account of any of its branch
offices or the office of an Affiliate of that Lender.
F. ASSUMPTIONS CONCERNING FUNDING OF EURODOLLAR RATE LOANS. Calculation
of all amounts payable to a Lender under this subsection 2.6 and under
subsection 2.7A shall be made as though that Lender had actually funded each of
its relevant Eurodollar Rate Loans through the purchase of a Eurodollar deposit
bearing interest at the rate obtained pursuant to clause (i) of the definition
of Adjusted Eurodollar Rate in an amount equal to the amount of such Eurodollar
Rate Loan and having a maturity comparable to the relevant Interest Period and
through the transfer of such Eurodollar deposit from an offshore office of that
Lender to a domestic office of that Lender in the United States of America;
provided, however, that each Lender may fund each of its Eurodollar Rate Loans
-------- -------
in any manner it sees fit and the foregoing assumptions shall be utilized only
for the purposes of calculating amounts payable under this subsection 2.6 and
under subsection 2.7A.
G. EURODOLLAR RATE LOANS AFTER DEFAULT. After the occurrence of and
during the continuation of a Potential Event of Default or an Event of Default,
(i) Company may not elect to have a Loan be made or maintained as, or converted
to, a Eurodollar Rate Loan after the expiration of any Interest Period then in
effect for that Loan and (ii) subject to the provisions of subsection 2.6D, any
Notice of Borrowing or Notice of Conversion/Continuation given by Company with
respect to a requested borrowing or conversion/continuation that has not yet
occurred shall be deemed to be rescinded by Company.
2.7 INCREASED COSTS; TAXES; CAPITAL ADEQUACY.
----------------------------------------
A. COMPENSATION FOR INCREASED COSTS AND TAXES. Subject to the provisions
of subsection 2.7B, in the event that any Lender shall determine (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) that any law, treaty or governmental rule, regulation
or order, or any change therein or in the interpretation, administration or
application thereof (including the introduction of any new law, treaty or
govern-
52
mental rule, regulation or order), or any determination of a court or
governmental authority, in each case that becomes effective after the date
hereof, or compliance by such Lender with any guideline, request or directive
issued or made after the date hereof by any central bank or other governmental
or quasi-governmental authority (whether or not having the force of law):
(i) subjects such Lender (or its applicable lending office) to any
additional Tax (other than any Tax on the overall net income of such
Lender) with respect to this Agreement or any of its obligations hereunder
or any payments to such Lender (or its applicable lending office) of
principal, interest, fees or any other amount payable hereunder;
(ii) imposes, modifies or holds applicable any reserve (including
without limitation any marginal, emergency, supplemental, special or other
reserve), special deposit, compulsory loan, FDIC insurance or similar
requirement against assets held by, or deposits or other liabilities in or
for the account of, or advances or loans by, or other credit extended by,
or any other acquisition of funds by, any office of such Lender (other than
any such reserve or other requirements with respect to Eurodollar Rate
Loans that are reflected in the definition of Adjusted Eurodollar Rate); or
(iii) imposes any other condition (other than with respect to a Tax
matter) on or affecting such Lender (or its applicable lending office) or
its obligations hereunder or the interbank Eurodollar market;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining Loans hereunder or to reduce any amount
received or receivable by such Lender (or its applicable lending office) with
respect thereto; then, in any such case, Company shall promptly pay to such
Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
reasonable discretion shall determine) as may be necessary to compensate such
Lender for any such increased cost or reduction in amounts received or
receivable hereunder. Such Lender shall deliver to Company (with a copy to
Administrative Agent) a written statement, setting forth in reasonable detail
the basis for calculating the additional amounts owed to such Lender under this
subsection 2.7A, which statement shall be conclusive and binding upon all
parties hereto absent manifest error.
B. WITHHOLDING OF TAXES.
(i) Payments to Be Free and Clear. All sums payable by Company under
-----------------------------
this Agreement and the other Loan Documents shall (except to the extent
required by law) be paid free and clear of, and without any deduction or
withholding on account of, any Tax (other than a Tax determined on the
basis of the overall net income of any Lender) imposed, levied, collected,
withheld or assessed by or within the United States of America or any
political subdivision in or of the United States of America or any other
jurisdiction from or to which a payment is made by or on behalf of Company
or by any federation
53
or organization of which the United States of America or any such
jurisdiction is a member at the time of payment.
(ii) Grossing-up of Payments. If Company or any other Person is
-----------------------
required by law to make any deduction or withholding on account of any such
Tax from any sum paid or payable by Company to Administrative Agent or any
Lender under any of the Loan Documents:
(a) Company shall notify Administrative Agent of any such
require ment or any change in any such requirement as soon as Company
becomes aware of it;
(b) Company shall pay any such Tax before the date on which
penalties attach thereto, such payment to be made (if the liability to
pay is imposed on Company) for its own account or (if that liability
is imposed on Administrative Agent or such Lender, as the case may be)
on behalf of and in the name of Administrative Agent or such Lender;
(c) the sum payable by Company in respect of which the relevant
deduction, withholding or payment is required shall be increased to
the extent necessary to ensure that, after the making of that
deduction, withholding or payment, Administrative Agent or such
Lender, as the case may be, receives on the due date a net sum equal
to what it would have received had no such deduction, withholding or
payment been required or made; and
(d) within 30 days after paying any sum from which it is
required by law to make any deduction or withholding, and within 30
days after the due date of payment of any Tax which it is required by
clause (b) above to pay, Company shall deliver to Administrative Agent
evidence satisfactory to the other affected parties of such deduction,
withholding or payment and of the remittance thereof to the relevant
taxing or other authority;
provided that no such additional amount shall be required to be paid to any
--------
Lender under clause (c) above except to the extent that any change after
the date hereof (in the case of each Lender listed on the signature pages
hereof) or after the date of the Assignment Agreement pursuant to which
such Lender became a Lender (in the case of each other Lender) in any such
requirement for a deduction, withholding or payment as is mentioned therein
shall result in an increase in the rate of such deduction, withholding or
payment from that in effect at the date of this Agreement or at the date of
such Assignment Agreement, as the case may be, in respect of payments to
such Lender.
(iii) Evidence of Exemption from U.S. Withholding Tax.
-----------------------------------------------
(a) Each Lender that is organized under the laws of any
jurisdiction other than the United States or any state or other
political subdivision thereof (for purposes of this subsection
2.7B(iii), a "NON-US LENDER") shall deliver to
54
Administrative Agent for transmission to Company, on or prior to the
Closing Date (in the case of each Lender listed on the signature pages
hereof) or on or prior to the date of the Assignment Agreement
pursuant to which it becomes a Lender (in the case of each other
Lender), and at such other times as may be necessary in the
determination of Company or Administrative Agent (each in the
reasonable exercise of its discretion), (1) two original copies of
Internal Revenue Service Form 1001 or 4224 (or any successor forms),
properly completed and duly executed by such Lender, together with any
other certificate or statement of exemption required under the
Internal Revenue Code or the regulations issued thereunder to
establish that such Lender is not subject to deduction or withholding
of United States federal income tax with respect to any payments to
such Lender of principal, interest, fees or other amounts payable
under any of the Loan Documents or (2) if such Lender is not a "bank"
or other Person described in Section 881(c)(3) of the Internal Revenue
Code and cannot deliver either Internal Revenue Service Form 1001 or
4224 pursuant to clause (1) above, a Certificate re Non-Bank Status
together with two original copies of Internal Revenue Service Form W-8
(or any successor form), properly completed and duly executed by such
Lender, together with any other certificate or statement of exemption
required under the Internal Revenue Code or the regulations issued
thereunder to establish that such Lender is not subject to deduction
or withholding of United States federal income tax with respect to any
payments to such Lender of interest payable under any of the Loan
Documents.
(b) Each Lender required to deliver any forms, certificates or
other evidence with respect to United States federal income tax
withholding matters pursuant to subsection 2.7B(iii)(a) hereby agrees,
from time to time after the initial delivery by such Lender of such
forms, certificates or other evidence, whenever a lapse in time or
change in circumstances renders such forms, certificates or other
evidence obsolete or inaccurate in any material respect, that such
Lender shall promptly (1) deliver to Administrative Agent for
transmission to Company two new original copies of Internal Revenue
Service Form 1001 or 4224, or a Certificate re Non-Bank Status and two
original copies of Internal Revenue Service Form W-8, as the case may
be, properly completed and duly executed by such Lender, together with
any other certificate or statement of exemption required in order to
confirm or establish that such Lender is not subject to deduction or
withholding of United States federal income tax with respect to
payments to such Lender under the Loan Documents or (2) notify
Administrative Agent and Company of its inability to deliver any such
forms, certificates or other evidence.
(c) Company shall not be required to pay any additional amount to any Non-
US Lender under clause (c) of subsection 2.7B(ii) if such Lender shall
have failed to satisfy the requirements of clause (a) or (b) of this
subsection 2.7B(iii); provided that if such Lender shall have
--------
satisfied the requirements of subsection 2.7B(iii)(a) on the Closing
Date (in the case of each Lender listed on the signature pages hereof)
or on the date of the Assignment Agreement pursuant to which it
55
became a Lender (in the case of each other Lender), nothing in this
subsection 2.7B(iii)(c) shall relieve Company of its obligation to pay
any additional amounts pursuant to clause (c) of subsection 2.7B(ii)
in the event that, as a result of any change in any applicable law,
treaty or governmental rule, regulation or order, or any change in the
interpretation, administration or application thereof, such Lender is
no longer properly entitled to deliver forms, certificates or other
evidence at a subsequent date establishing the fact that such Lender
is not subject to withholding as described in subsection 2.7B(iii)(a).
C. CAPITAL ADEQUACY ADJUSTMENT. If any Lender shall have determined that
the adoption, effectiveness, phase-in or applicability after the date hereof of
any law, rule or regulation (or any provision thereof) regarding capital
adequacy, or any change therein or in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any Lender
(or its applicable lending office) with any guideline, request or directive
regarding capital adequacy (whether or not having the force of law) of any such
governmental authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of, or with reference to,
such Lender's Loans or Commit ments or Letters of Credit or participations
therein or other obligations hereunder with respect to the Loans or the Letters
of Credit to a level below that which such Lender or such controlling
corporation could have achieved but for such adoption, effectiveness, phase-in,
applicability, change or compliance (taking into consideration the policies of
such Lender or such controlling corporation with regard to capital adequacy),
then from time to time, within five Business Days after receipt by Company from
such Lender of the statement referred to in the next sentence, Company shall pay
to such Lender such additional amount or amounts as will compensate such Lender
or such controlling corporation on an after-tax basis for such reduction. Such
Lender shall deliver to Company (with a copy to Administra tive Agent) a written
statement, setting forth in reasonable detail the basis of the calculation of
such additional amounts, which statement shall be conclusive and binding upon
all parties hereto absent manifest error.
2.8 OBLIGATION OF LENDERS AND ISSUING LENDER TO MITIGATE.
----------------------------------------------------
Each Lender and Issuing Lender agrees that, as promptly as practicable
after the officer of such Lender or Issuing Lender responsible for administering
the Loans or Letters of Credit of such Lender or Issuing Lender, as the case may
be, becomes aware of the occurrence of an event or the existence of a condition
that would cause such Lender to become an Affected Lender or that would entitle
such Lender or Issuing Lender to receive payments under subsection 2.7 or
subsection 3.6, it will, to the extent not inconsistent with the internal
policies of such Lender or Issuing Lender and any applicable legal or regulatory
restrictions, use reasonable efforts (i) to make, issue, fund or maintain the
Commitments of such Lender or the affected Loans or Letters of Credit of such
Lender or Issuing Lender through another lending or letter of credit office of
such Lender or Issuing Lender, or (ii) take such other measures as such Lender
or Issuing Lender may deem reasonable, if as a result thereof the circumstances
which would cause such Lender to be an Affected Lender would cease to exist or
the additional amounts which would otherwise
56
be required to be paid to such Lender or Issuing Lender pursuant to subsection
2.7 or subsection 3.6 would be reduced and if, as determined by such Lender or
Issuing Lender in its sole discretion, the making, issuing, funding or
maintaining of such Commitments or Loans or Letters of Credit through such other
lending or letter of credit office or in accordance with such other measures, as
the case may be, would not otherwise materially adversely affect such
Commitments or Loans or Letters of Credit or the interests of such Lender or
Issuing Lender; provided that such Lender or Issuing Lender will not be
--------
obligated to utilize such other lending or letter of credit office pursuant to
this subsection 2.8 unless Company agrees to pay all incremental expenses
incurred by such Lender or Issuing Lender as a result of utilizing such other
lending or letter of credit office as described in clause (i) above. A
certificate as to the amount of any such expenses payable by Company pursuant to
this subsection 2.8 (setting forth in reasonable detail the basis for requesting
such amount) submitted by such Lender or Issuing Lender to Company (with a copy
to Administrative Agent) shall be conclusive absent manifest error.
SECTION 3.
LETTERS OF CREDIT
3.1 ISSUANCE OF LETTERS OF CREDIT AND LENDERS' PURCHASE OF PARTICIPATIONS
---------------------------------------------------------------------
THEREIN.
-------
A. LETTERS OF CREDIT. In addition to Company requesting that Lenders
make Revolving Loans pursuant to subsection 2.1A(iii) and that Swing Line Lender
make Swing Line Loans pursuant to subsection 2.1A(iv), Company may request, in
accordance with the provisions of this subsection 3.1, from time to time during
the period from the Closing Date to but excluding June 30, 2002, that Issuing
Lender issue Letters of Credit for the account of Company for general corporate
purposes. Subject to the terms and conditions of this Agreement and in reliance
upon the representations and warranties of Company herein set forth, Issuing
Lender shall issue such Letters of Credit in accordance with the provisions of
this subsection 3.1; provided that Company shall not request that Issuing Lender
--------
issue (and Issuing Lender shall not issue):
(i) any Letter of Credit if, after giving effect to such issuance,
the Total Utilization of Revolving Loan Commitments would exceed the
Revolving Loan Commitments then in effect; or
(ii) any Letter of Credit having an expiration date later than the
earlier of (a) June 30, 2002 and (b) the date which is two years from the
date of issuance of such Letter of Credit; provided that the immediately
--------
preceding clause (b) shall not prevent Issuing Lender from agreeing that a
Letter of Credit will automatically be extended for one or more successive
periods not to exceed one year each upon 40 days prior written request of
Company and the beneficiary thereof, so long as Issuing Lender notifies
Company or such beneficiary, as the case may be, in writing not less than
20 days prior to the expiration date that it has agreed not to extend for
any such additional period; and provided, further that Issuing Lender shall
-------- -------
give notice that it will not extend such Letter of Credit if it has
knowledge that an Event of Default has occurred and is continuing (and
57
has not been waived in accordance with subsection 10.6) at the time Issuing
Lender must elect whether or not to allow such extension.
B. MECHANICS OF ISSUANCE.
(i) Notice of Issuance. Whenever Company desires the issuance of a
------------------
Letter of Credit, it shall deliver to Administrative Agent a Notice of
Issuance of Letter of Credit substantially in the form of Exhibit III
-----------
annexed hereto no later than 1:00 P.M. (New York time) at least five
Business Days or such shorter period as may be agreed to by Issuing Lender
in any particular instance, in advance of the proposed date of issuance.
The Notice of Issuance of Letter of Credit shall specify (a) the proposed
date of issuance (which shall be a Business Day), (b) the face amount of
the Letter of Credit, (c) the expiration date of the Letter of Credit, (d)
the name and address of the beneficiary, and (e) the verbatim text of the
proposed Letter of Credit or the proposed terms and conditions thereof,
including a precise description of any documents and the verbatim text of
any certificates to be presented by the beneficiary which, if presented by
the beneficiary prior to the expiration date of the Letter of Credit, would
require Issuing Lender to make payment under the Letter of Credit. Company
shall further execute and deliver any application and other customary form
documents required by Issuing Lender.
Company shall notify the applicable Issuing Lender (and Administrative
Agent, if Administrative Agent is not Issuing Lender) prior to the issuance
of any Letter of Credit in the event that any of the matters to which
Company is required to certify in the applicable Notice of Issuance of
Letter of Credit is no longer true and correct as of the proposed date of
issuance of such Letter of Credit, and upon the issuance of any Letter of
Credit Company shall be deemed to have re-certified, as of the date of such
issuance, as to the matters to which Company is required to certify in the
applicable Notice of Issuance of Letter of Credit.
(ii) Determination of Issuing Lender. Upon receipt by a proposed
-------------------------------
Issuing Lender of a Notice of Issuance of Letter of Credit pursuant to
subsection 3.1B(i) requesting the issuance of a Letter of Credit, (a) in
the event Administrative Agent is the proposed Issuing Lender,
Administrative Agent shall be the Issuing Lender with respect to such
Letter of Credit, notwithstanding the fact that the Letter of Credit Usage
with respect to such Letter of Credit and with respect to all other Letters
of Credit issued by Administrative Agent, when aggregated with Administra
tive Agent's outstanding Revolving Loans and Swing Line Loans, may exceed
Administrative Agent's Revolving Loan Commitment then in effect; and (b) in
the event any other Lender is the proposed Issuing Lender, such Lender
shall promptly notify Company and Administrative Agent whether or not, in
its sole discretion, it has elected to issue such Letter of Credit, and (1)
if such Lender so elects to issue such Letter of Credit it shall be the
Issuing Lender with respect thereto and (2) if such Lender fails to so
promptly notify Company and Administrative Agent or declines to be the
Issuing Lender with respect to such Letter of Credit in accordance with the
provisions of this subsection 3.1B Company may request Administrative Agent
or another Lender to (and in the case of the Administrative Agent,
58
Administrative Agent will) be the Issuing Lender with respect to such
Letter of Credit in accordance with the provisions of this subsection 3.1B.
(iii) Issuance of Letter of Credit. Upon satisfaction or waiver of
----------------------------
the conditions set forth in subsection 4.3, Issuing Lender shall issue the
requested Letter of Credit in accordance with Issuing Lender's standard
operating procedures.
(iv) Notification to Lenders. Upon the issuance of any Letter of
-----------------------
Credit, Issuing Lender shall promptly notify Administrative Agent (if
Issuing Lender is not Administrative Agent) and each other Lender of such
issuance. Promptly after receipt of such notice, Administrative Agent
shall notify each Lender of the amount of such Lender's respective
participation in such Letter of Credit, determined in accordance with
subsection 3.1C.
(v) Reports to Lenders. At the request of any Lender, Issuing
------------------
Lender shall deliver to each other Lender a report setting forth the
average for the immediately preceding calendar quarter of the daily maximum
amount available to be drawn under the Letters of Credit issued by Issuing
Lender that were outstanding during such calendar quarter, if any.
C. LENDERS' PURCHASE OF PARTICIPATIONS IN LETTERS OF CREDIT. Immediately
upon the issuance of each Letter of Credit, each Lender having a Revolving Loan
Commitment shall be deemed to, and hereby agrees to, have irrevocably purchased
from Issuing Lender a participation in such Letter of Credit and drawings
thereunder in an amount equal to such Lender's Pro Rata Share of the maximum
amount which is or at any time may become available to be drawn thereunder.
D. EXISTING LETTERS OF CREDIT. As of the Closing Date the Existing
Letters of Credit shall be deemed to have been issued under this Agreement and
from and after the Closing Date shall be deemed Letters of Credit for all
purposes hereunder.
3.2 LETTER OF CREDIT FEES.
---------------------
Company agrees to pay the following amounts to Issuing Lender with respect
to Letters of Credit issued by it:
(i) with respect to each Letter of Credit, a fronting fee equal to
.25% per annum of the daily maximum amount available to be drawn under such
Letter of Credit payable in arrears on and to (but excluding) each March
15, June 15, September 15 and December 15 of each year and computed on the
basis of a 360-day year for the actual number of days elapsed; provided
--------
that the fronting fee payable with respect to each Letter of Credit shall
not be less than $500 per annum; and
(ii) with respect to the issuance, amendment or transfer of each
Letter of Credit and each payment of a drawing made thereunder (without
duplication of the fees payable under clause (i) above), documentary and
processing charges in accordance with Issuing
59
Lender's standard schedule for such charges in effect at the time of such
issuance, amendment, transfer or payment, as the case may be.
Company further agrees to pay to Administrative Agent, for distribution to
each Lender in proportion to that Lender's Pro Rate Share of the Revolving Loan
Commitments, a letter of credit fee equal to the product of (y) a percentage
equal to the Applicable Margin with respect to Eurodollar Loans and (z) daily
maximum amount available to be drawn under each Letter of Credit, payable in
arrears on and to (but excluding) each March 15, June 15, September 15 and
December 15 of each year and computed on the basis of a 360-day year for the
actual number of days elapsed.
3.3 DRAWINGS AND REIMBURSEMENT OF AMOUNTS DRAWN UNDER LETTERS OF CREDIT.
-------------------------------------------------------------------
A. RESPONSIBILITY OF ISSUING LENDER WITH RESPECT TO DRAWINGS. In
determining whether to honor any drawing under any Letter of Credit by the
beneficiary thereof, the Issuing Lender shall be responsible only to examine the
documents delivered under such Letter of Credit with reasonable care so as to
ascertain whether they appear on their face to be in substantial compliance with
the terms and conditions of such Letter of Credit.
B. REIMBURSEMENT BY COMPANY OF AMOUNTS DRAWN UNDER LETTERS OF CREDIT. In
the event Issuing Lender has determined to honor a drawing under a Letter of
Credit issued by it, Issuing Lender shall immediately notify Company and
Administrative Agent, and Company shall reimburse Issuing Lender on or before
the Business Day immediately following the date on which such drawing is honored
(the "REIMBURSEMENT DATE") in an amount in Dollars and in same day funds equal
to the amount of such drawing; provided that, anything contained in this
--------
Agreement to the contrary notwithstanding, (i) unless Company shall have
notified Administrative Agent (if Issuing Lender is not Administrative Agent)
and Issuing Lender prior to 11:00 A.M. (New York time) on the date of such
drawing that Company intends to reimburse Issuing Lender for the amount of such
drawing with funds other than the proceeds of Revolving Loans, Company shall be
deemed to have given a timely Notice of Borrowing to Administrative Agent
requesting Lenders to make Revolving Loans that are Base Rate Loans on the
Reimbursement Date in an amount in Dollars equal to the amount of such drawing
and (ii) subject to satisfaction or waiver of the conditions specified in
subsection 4.2B, Lenders shall, on the Reimbursement Date, make Revolving Loans
that are Base Rate Loans in the amount of such drawing, the proceeds of which
shall be applied directly by Administrative Agent to reimburse Issuing Lender
for the amount of such drawing; and provided, further that if for any reason
-------- -------
proceeds of Revolving Loans are not received by Issuing Lender on the
Reimbursement Date in an amount equal to the amount of such drawing, Company
shall reimburse Issuing Lender, on demand, in an amount in same day funds equal
to the excess of the amount of such drawing over the aggregate amount of such
Revolving Loans, if any, which are so received. Nothing in this subsection 3.3B
shall be deemed to relieve any Lender from its obligation to make Revolving
Loans on the terms and conditions set forth in this Agreement, and Company shall
retain any and all rights it may have against any Lender resulting from the
failure of such Lender to make such Revolving Loans under this subsection 3.3B.
60
C. PAYMENT BY LENDERS OF UNREIMBURSED DRAWINGS UNDER LETTERS OF CREDIT.
(i) Payment by Lenders. In the event that Company shall fail for any
------------------
reason to reimburse Issuing Lender as provided in subsection 3.3B in an
amount equal to the amount of any drawing honored by Issuing Lender under a
Letter of Credit issued by it, Issuing Lender shall promptly notify each
other Lender having a Revolving Loan Commitment of the unreimbursed amount
of such drawing and of such other Lender's respective participation therein
based on such Lender's Pro Rata Share. Each Lender shall make available to
Issuing Lender an amount equal to its respective participation, in Dollars
and in same day funds, at the office of Issuing Lender specified in such
notice, not later than 1:00 P.M. (New York time) on the first business day
(under the laws of the jurisdiction in which such office of Issuing Lender
is located) after the date notified by Issuing Lender. In the event that
any Lender fails to make available to Issuing Lender on such business day
the amount of such Lender's participation in such Letter of Credit as
provided in this subsection 3.3C, Issuing Lender shall be entitled to
recover such amount on demand from such Lender together with interest
thereon at the rate customarily used by Issuing Lender for the correction
of errors among banks for three Business Days and thereafter at the Base
Rate. Nothing in this subsection 3.3C shall be deemed to prejudice the
right of any Lender to recover from Issuing Lender any amounts made
available by such Lender to Issuing Lender pursuant to this subsection 3.3C
in the event that it is determined by the final judgment of a court of
competent jurisdiction that the payment with respect to a Letter of Credit
by Issuing Lender in respect of which payment was made by such Lender
constituted gross negligence or willful misconduct on the part of Issuing
Lender.
(ii) Distribution to Lenders of Reimbursements Received From Company.
---------------------------------------------------------------
In the event Issuing Lender shall have been reimbursed by other Lenders
pursuant to subsection 3.3C(i) for all or any portion of any drawing
honored by Issuing Lender under a Letter of Credit issued by it, Issuing
Lender shall distribute to each other Lender which has paid all amounts
payable by it under subsection 3.3C(i) with respect to such drawing such
other Lender's Pro Rata Share of all payments subsequently received by
Issuing Lender from Company in reimbursement of such drawing when such
payments are received. Any such distribution shall be made to a Lender at
its primary address set forth below its name on the appropriate signature
page hereof or at such other address as such Lender may request.
D. INTEREST ON AMOUNTS DRAWN UNDER LETTERS OF CREDIT.
(i) Payment of Interest by Company. Company agrees to pay to Issuing
------------------------------
Lender, with respect to drawings made under any Letters of Credit issued by
it, interest on the amount paid by Issuing Lender in respect of each such
drawing from the date of such drawing to but excluding the date such amount
is reimbursed by Company (including any such reimbursement out of the
proceeds of Revolving Loans pursuant to subsection 3.3B) at a rate equal to
(a) for the period from the date of such drawing to but excluding the
Reimbursement Date, the rate then in effect under this Agreement with
respect to
61
Revolving Loans that are Base Rate Loans and (b) thereafter, a rate which
is 2% per annum in excess of the rate of interest otherwise payable under
this Agreement with respect to Revolving Loans that are Base Rate Loans.
Interest payable pursuant to this subsection 3.3D(i) shall be computed on
the basis of a 360-day year for the actual number of days elapsed in the
period during which it accrues and shall be payable on demand or, if no
demand is made, on the date on which the related drawing under a Letter of
Credit is reimbursed in full.
(ii) Distribution of Interest Payments by Issuing Lender. Promptly
---------------------------------------------------
upon receipt by Issuing Lender of any payment of interest pursuant to
subsection 3.3D(i) with respect to a drawing under a Letter of Credit
issued by it, (a) Issuing Lender shall distribute to each other Lender
having a Revolving Loan Commitment, out of the interest received by Issuing
Lender in respect of the period from the date of such drawing to but
excluding the date on which Issuing Lender is reimbursed for the amount of
such drawing (including any such reimbursement out of the proceeds of
Revolving Loans pursuant to subsection 3.3B), the amount that such other
Lender would have been entitled to receive in respect of the letter of
credit fee that would have been payable in respect of such Letter of Credit
for such period pursuant to subsection 3.2 if no drawing had been made
under such Letter of Credit, and (b) in the event Issuing Lender shall have
been reimbursed by other Lenders pursuant to subsection 3.3C(i) for all or
any portion of such drawing, Issuing Lender shall distribute to each other
Lender which has paid all amounts payable by it under subsection 3.3C(i)
with respect to such drawing such other Lender's Pro Rata Share of any
interest received by Issuing Lender in respect of that portion of such
drawing so reimbursed by other Lenders for the period from the date on
which Issuing Lender was so reimbursed by other Lenders to but excluding
the date on which such portion of such drawing is reimbursed by Company.
Any such distribution shall be made to a Lender at its primary address set
forth below its name on the appropriate signature page hereof or at such
other address as such Lender may request.
3.4 OBLIGATIONS ABSOLUTE.
--------------------
Subject to the provisions of subsection 3.3A, the obligation of Company to
reimburse Issuing Lender for drawings made under the Letters of Credit issued by
it and to repay any Revolving Loans made by Lenders pursuant to subsection 3.3B
and the obligations of Lenders under subsection 3.3C(i) shall be unconditional
and irrevocable and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances including, without limitation, the following
circumstances:
(i) any lack of validity or enforceability of any Letter of Credit;
(ii) the existence of any claim, set-off, defense or other right which
Company or any Lender may have at any time against a beneficiary or any
transferee of any Letter of Credit (or any Persons for whom any such
transferee may be acting), Issuing Lender or other Lender or any other
Person or, in the case of a Lender, against Company, whether in connection
with this Agreement, the transactions contemplated herein or any
62
unrelated transaction (including any underlying transaction between Company
or one of its Subsidiaries and the beneficiary for which any Letter of
Credit was procured);
(iii) any draft, demand, certificate or other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) payment by Issuing Lender under any Letter of Credit against
presentation of a demand, draft or certificate or other document which does
not comply with the terms of such Letter of Credit;
(v) any adverse change in the business, operations, properties,
assets, condition (financial or otherwise) or prospects of Company or any
of its Subsidiaries;
(vi) any breach of this Agreement or any other Loan Document by any
party thereto; or
(vii) the fact that an Event of Default or a Potential Event of
Default shall have occurred and be continuing;
provided, in each case, that payment by Issuing Lender under the applicable
--------
Letter of Credit shall not have constituted gross negligence or willful
misconduct of Issuing Lender under the circumstances in question (as determined
by a final judgment of a court of competent jurisdiction).
3.5 INDEMNIFICATION; NATURE OF ISSUING LENDER'S DUTIES.
--------------------------------------------------
A. INDEMNIFICATION. In addition to amounts payable as provided in
subsection 3.6, Company hereby agrees to protect, indemnify, pay and save
harmless Issuing Lender from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
fees, expenses and disbursements of counsel and allocated costs of internal
counsel) which Issuing Lender may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of any Letter of Credit by Issuing
Lender, other than as a result of (a) the gross negligence or willful misconduct
of Issuing Lender as determined by a final judgment of a court of competent
jurisdiction or (b) subject to the following clause (ii), the wrongful dishonor
by Issuing Lender of a proper demand for payment made under any Letter of Credit
issued by it or (ii) the failure of Issuing Lender to honor a drawing under any
such Letter of Credit as a result of any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government or
governmental authority (all such acts or omissions herein called "GOVERNMENTAL
ACTS").
B. NATURE OF ISSUING LENDER'S DUTIES. As between Company and Issuing
Lender, Company assumes all risks of the acts and omissions of, or misuse of the
Letters of Credit issued by Issuing Lender by, the respective beneficiaries of
such Letters of Credit. In furtherance and not in limitation of the foregoing,
Issuing Lender shall not be responsible for: (i) the form,
63
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
any such Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) failure of the beneficiary of
any such Letter of Credit to comply fully with any conditions required in order
to draw upon such Letter of Credit; (iv) errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any such
Letter of Credit or of the proceeds thereof; (vii) the misapplication by the
beneficiary of any such Letter of Credit of the proceeds of any drawing under
such Letter of Credit; or (viii) any consequences arising from causes beyond the
control of Issuing Lender, including without limitation any Governmental Acts,
and none of the above shall affect or impair, or prevent the vesting of, any of
Issuing Lender's rights or powers hereunder.
In furtherance and extension and not in limitation of the specific
provisions set forth in the first paragraph of this subsection 3.5B, any action
taken or omitted by Issuing Lender under or in connection with the Letters of
Credit issued by it or any documents and certificates delivered thereunder, if
taken or omitted in good faith, shall not put Issuing Lender under any resulting
liability to Company.
Notwithstanding anything to the contrary contained in this subsection 3.5
and without limiting the provisions of subsection 3.3A, Company shall retain any
and all rights it may have against Issuing Lender for any liability arising
solely out of the gross negligence or willful misconduct of Issuing Lender, as
determined by a final judgment of a court of competent jurisdiction.
3.6 INCREASED COSTS AND TAXES RELATING TO LETTERS OF CREDIT.
-------------------------------------------------------
In the event that Issuing Lender or any Lender shall determine (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) that any law, treaty or governmental rule, regulation
or order, or any change therein or in the interpretation, administration or
application thereof (including the introduction of any new law, treaty or
governmental rule, regulation or order), or any determination of a court or
governmental authority, in each case that becomes effective after the date
hereof, or compliance by Issuing Lender or any Lender with any guideline,
request or directive issued or made after the date hereof by any central bank or
other governmental or quasi-govern mental authority (whether or not having the
force of law):
(i) subjects Issuing Lender or any Lender (or its applicable lending
or letter of credit office) to any additional Tax (other than any Tax on
the overall net income of Issuing Lender or any Lender) with respect to the
issuing or maintaining of any Letters of Credit or the purchasing or
maintaining of any participations therein or any other
64
obligations under this Section 3, whether directly or by such being imposed
on or suffered by Issuing Lender;
(ii) imposes, modifies or holds applicable any reserve (including
without limitation any marginal, emergency, supplemental, special or other
reserve), special deposit, compulsory loan, FDIC insurance or similar
requirement in respect of any Letters of Credit issued by Issuing Lender or
participations therein purchased by any Lender; or
(iii) imposes any other condition (other than with respect to a Tax
matter) on or affecting Issuing Lender or any Lender (or its applicable
lending or letter of credit office) regarding this Section 3 or any Letter
of Credit or any participation therein;
and the result of any of the foregoing is to increase the cost to Issuing Lender
or any Lender of agreeing to issue, issuing or maintaining any Letter of Credit
or agreeing to purchase, purchasing or maintaining any participation therein or
to reduce any amount received or receivable by Issuing Lender or such Lender (or
its applicable lending or letter of credit office) with respect thereto; then,
in any case, Company shall promptly pay to Issuing Lender or such Lender, upon
receipt of the statement referred to in the next sentence, such additional
amount or amounts as may be necessary to compensate Issuing Lender or such
Lender for any such increased cost or reduction in amounts received or
receivable hereunder. Issuing Lender or such Lender shall deliver to Company a
written statement, setting forth in reasonable detail the basis for calculating
the additional amounts owed to Issuing Lender or such Lender under this
subsection 3.6, which statement shall be conclusive and binding upon all parties
hereto absent manifest error.
SECTION 4.
CONDITIONS TO LOANS AND LETTERS OF CREDIT
The obligations of Lenders to make Loans and the Issuing Lender to issue
Letters of Credit hereunder are subject to the satisfaction of the following
conditions.
4.1 CONDITIONS TO INITIAL LOANS.
---------------------------
A. COMPANY DOCUMENTS. Company shall deliver or cause to be delivered
to Lenders (or to Administrative Agent for Lenders with sufficient
originally executed copies, where appropriate, for each Lender and its
counsel) the following, each, unless otherwise noted, dated the Closing
Date:
(i) Certified copies of its Certificate of Incorporation,
together with a good standing certificate from the Secretary of State
of the State of Minnesota and each other state in which it is
qualified as a foreign corpora tion to do business and, to the extent
generally available, a certificate or other evidence of good standing
as to payment of any applicable franchise or similar taxes from the
appropriate taxing authority of each of such states, each dated a
recent date prior to the Closing Date;
65
(ii) Copies of its Bylaws, certified as of the Closing Date by
its corporate secretary or an assistant secretary;
(iii) Resolutions of its Board of Directors approving and
authorizing the execution, delivery and performance of this Agreement
and the other Loan Documents, certified as of the Closing Date by its
corporate secretary or an assistant secretary as being in full force
and effect without modification or amendment;
(iv) Signature and incumbency certificates of its officers
executing this Agreement and the other Loan Documents;
(v) Executed originals of this Agreement, the Acquisition Loan
Notes, the Term Loan Notes, the Revolving Notes and the Swing Line
Note (duly executed in accordance with subsection 2.1E, drawn to the
order of each Lender and the Swing Line Lender and with appropriate
insertions), the Collateral Account Agreement, the Company Security
Agreement, the Company Trademark Security Agreement, the Company
Pledge Agreement, the Company Patent and Copyright Security Agreement
and the other Loan Documents to which it is a party; and
(vi) Such other documents as Arranging Agent or Administrative
Agent may reasonably request.
B. DELIVERY OF CLOSING DATE MORTGAGES; CLOSING DATE MORTGAGE
POLICIES. Arranging Agent and Administrative Agent shall have received
from Company and each applicable Subsidiary Guarantor (i)(a) with respect
to each Real Property Asset set forth on Schedule 4.1B(i) hereto as being
----------------
not subject to an Existing Mortgage (collectively, the "NEW MORTGAGED
PROPERTIES"), which New Mortgaged Properties shall exclude those Real
Property Assets set forth on Schedule 4.1B(ii) attached hereto
-----------------
(collectively, the "EXCLUDED PROPERTIES"), a fully executed and notarized
mortgage, deed of trust or deed to secure debt in substantially the same
form as attached hereto as Exhibit XV (each a "CLOSING DATE MORTGAGE" and
----------
collectively, the "CLOSING DATE MORTGAGES") encumbering the fee or
leasehold interest of Company or applicable Subsidiary Guarantor in each
such New Mortgaged Property and (b) with respect to each Real Property
Asset presently subject to an Existing Mortgage as set forth on Schedule
4.1B(iii), a fully executed and notarized assignment and modification of
---------
such Existing Mortgage, which such assignment and modification shall be
substantially in the form attached hereto as Exhibit XVI (each Real
-----------
Property Asset to be encumbered by a Closing Date Mortgage or an Existing
Mortgage, as assigned and modified, a "CLOSING DATE MORTGAGED PROPERTY"
and collectively, the "CLOSING DATE MORTGAGED PROPERTIES"); and (ii) a
commitment to issue an ALTA mortgagee title insurance policy by Title
Company (the "CLOSING DATE MORTGAGE POLICIES"), with respect to those
Closing Date Mortgaged Properties (the "TITLE INSURANCE POLICY
PROPERTIES") and in the amounts designated in Schedule 4.1B(iv) annexed
-----------------
hereto, assuring Administrative Agent that each Closing Date
66
Mortgage with respect to a Title Insurance Property creates a valid and
enforceable first priority mortgage lien on the respective Title Insurance
Property, free and clear of all defects and encumbrances except Permitted
Encumbrances and subject to a standard survey exception.
C. SECURITY INTERESTS. To the extent not otherwise satisfied
pursuant to subsection 4.1B, Company and Subsidiary Guarantors shall have
taken or caused to be taken (and Arranging Agent and Administrative Agent
shall have received satisfactory evidence thereof) such actions (other than
the filing or recording of items described in clauses (ii), (iii) and (iv)
below) in such a manner so that Administrative Agent, for the benefit of
Lenders, will have, a valid first priority security interest (subject to
Liens permitted under subsection 7.2) in the entire Collateral (except to
the extent any such security interest cannot be granted under applicable
laws). Such actions shall include, without limitation, (i) certificates
(which certificates shall be registered in the name of Administrative Agent
or properly endorsed in blank for transfer or accompanied by irrevocable
undated stock powers duly endorsed in blank, all in form and substance
satisfactory to Administrative Agent) representing the capital stock
pledged pursuant to the Company Pledge Agreement and delivery to
Administrative Agent of all other instruments (duly endorsed where
appropriate) evidencing the Collateral, (ii) delivery to Administrative
Agent of Uniform Commercial Code financing statements and fixture filings
as to the Collateral for all jurisdictions as may be necessary or desirable
to perfect the security interests in the Collateral, (iii) delivery to
Administrative Agent of the Company Trademark Security Agreement and the
Company Copyright and Patent Security Agreement together with cover sheets
required for filing with the United States Patent and Trademark Office and
(iv) delivery to Administrative Agent of such other documents and
instruments that Arranging Agent or Administrative Agent reasonably deems
necessary or advisable to establish, preserve and perfect as of the Closing
Date the first priority Liens granted to Administrative Agent on behalf of
Lenders under the Collateral Documents.
D. UNSECURED SUBORDINATED DEBT. On or prior to the Closing Date,
Company shall have issued and sold the Unsecured Subordinated Notes, the
aggregate gross cash proceeds (before deduction of fees) of which shall be
not be less than $175,000,000.
E. TERMS OF UNSECURED SUBORDINATED NOTES. On or prior to the Closing
Date, Arranging Agent, Administrative Agent and Lenders shall have received
executed or conformed copies of the Unsecured Subordinated Note Indenture
in substantially the form delivered to Arranging Agent, Administrative
Agent and Lenders on or prior to the date of execution of this Agreement by
Lenders (which form of Unsecured Subordinated Note Indenture shall have
been satisfactory in form and substance to Arranging Agent, Administrative
Agent and Requisite Lenders), with such changes thereto, if any, that have
been approved by Arranging Agent, Administrative Agent and Requisite
Lenders.
67
F. REPAYMENT OF SPECIFIED INDEBTEDNESS. Except to the extent
otherwise indicated in Schedule 1.1.A, on the Closing Date, with the
proceeds of the Unsecured Subordinated Notes and a portion of the Term
Loans, Company shall have repaid all Specified Indebtedness, terminated all
commitments with respect thereto and have obtained a termination or
transfer to Administrative Agent of all Liens securing the Specified
Indebtedness, all in form and substance satisfactory to Arranging Agent and
Administrative Agent; provided, however, to the extent that all or a
-------- -------
portion of such Specified Indebtedness is secured by an Existing Mortgage,
such Specified Indebtedness shall be deemed to be assigned to
Administrative Agent and concurrently amended, restated and secured by a
Closing Date Mortgage to the extent set forth therein.
G. REPURCHASE OF PREFERRED STOCK. On the Closing Date with the
proceeds of the Unsecured Subordinated Notes and a portion of the Term
Loan, Company shall have repurchased (or dedicated to the repurchase of)
all of the outstanding Preferred Stock of Company, in each case pursuant to
arrangements, and in form and substance, satisfactory to Arranging Agent
and Administrative Agent.
H. ENVIRONMENTAL MATTERS. The Lenders have received, prior to the
date of execution of this Agreement, reports and other information
available to the Company with respect to environmental liabilities relevant
to the Company and its Subsidiaries and no material developments with
respect to such matters shall have occurred since the date of preparation
of such reports and other information.
I. SOLVENCY. On the Closing Date, Arranging Agent, Administrative
Agent and Lenders shall have received an opinion of Valuation Research
Corporation, and a certificate of the chief financial officer of Company
both in form and substance satisfactory to Arranging Agent, Administrative
Agent and Lenders, to the effect that, after giving effect to the
Refinancings and the contemplated borrowings of the full amounts which will
be available under the Commitments and the issuance of the Unsecured
Subordinated Notes, the Company will be Solvent, and Arranging Agent,
Administrative Agent and Lenders shall have received such other factual
information supporting the conclusions reached in such opinion
and/certificate as Arranging Agent, Administrative Agent or any Lender may
reasonably request, all in form and substance satisfactory to Arranging
Agent, Administrative Agent and Requisite Lenders.
J. OPINIONS OF COMPANY'S COUNSEL. Lenders and their respective
counsel shall have received (i) originally executed copies of one or more
favorable written opinions of Xxxxx Xxxxxxx Xxxxxx Xxxxxxx & Xxxxxxxxxx,
Xxxxxxx & XxXxxxxx, Xxxxxx & Xxxxxxx, and Xxxxxxxx & X'Xxxx, L.L.P.,
counsel for Company, in form and substance reasonably satisfactory to
Arranging Agent and its counsel and Administrative Agent, dated as of the
Closing Date and setting forth substantially the matters in the opinions
designated in Exhibit VI-A to VI-E annexed hereto and as to such other
------------ ----
matters as Arranging Agent and Administrative Agent acting on behalf of
Lenders may reasonably request, (ii) the opinions delivered by Xxxxx
Xxxxxxx Xxxxxx Xxxxxxx & Xxxxxxxxxx, Xxxxxxx & XxXxxxxx, Xxxxxx & Xxxxxxx,
and Xxxxxxxx & O'Neil, L.L.P., counsel for
68
Company, in connection with the issuance of the Unsecured Subordinated
Notes, (together with a reliance letter indicating that Lenders may rely on
such opinion), and (iii) evidence satisfactory to Arranging Agent and
Administrative Agent that Company has requested such counsel to deliver
such opinions to Lenders.
K. OPINIONS OF ARRANGING AGENT'S COUNSEL. Lenders shall have
received originally executed copies of one or more favorable written
opinions of O'Melveny & Xxxxx, counsel to Arranging Agent, dated as of the
Closing Date, substantially in the form of Exhibit VI-F annexed hereto and
------------
as to such other matters as Arranging Agent acting on behalf of Lenders may
reasonably request.
L. FEES. Company shall have paid to Syndication Agent, Arranging
Agent and Administrative Agent, the fees payable on the Closing Date
referred to in subsection 2.3.
M. NO MATERIAL ADVERSE EFFECT. Since December 29, 1996, no Material
Adverse Effect (in the reasonable opinion of Arranging Agent and
Administrative Agent) shall have occurred.
N. REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS.
Company shall have delivered to Arranging Agent and Administrative Agent an
Officers' Certificate, in form and substance satisfactory to Arranging
Agent and Administrative Agent, to the effect that the representations and
warranties in Section 5 hereof are true, correct and complete in all
material respects on and as of the Closing Date to the same extent as
though made on and as of that date and that Company shall have performed in
all material respects all agreements and satisfied all conditions which
this Agreement provides shall be performed or satisfied by it on or before
the Closing Date except as otherwise disclosed to and agreed to in writing
by Arranging Agent, Administrative Agent and Requisite Lenders.
O. COMPLETION OF PROCEEDINGS. All corporate and other proceedings
taken or to be taken in connection with the transactions contemplated
hereby and all documents incidental thereto not previously found acceptable
by Arranging Agent, acting on behalf of Lenders, and its counsel shall be
satisfactory in form and substance to Arranging Agent and such counsel, and
Arranging Agent and such counsel shall have received all such counterpart
originals or certified copies of such documents as Arranging Agent or
Administrative Agent may reasonably request.
P. INSURANCE APPRAISAL; EVIDENCE OF INSURANCE. Administrative Agent
and Arranging Agent shall have received (i) a copy of the insurance report
prepared by Xxxxxxxx Xxxxx with respect to Company and such report shall be
in form and substance satisfactory to Administrative Agent and Arranging
Agent, and (ii) satisfactory certificates of insurance with respect to each
of the insurance policies required pursuant to subsection 6.4, and
Administrative Agent and Arranging Agent shall be satisfied with the nature
and scope of these insurance policies.
69
For purposes of determining compliance with the conditions specified
in subsection 4.1, each Lender that has executed this Agreement or
subsequently becomes a party to this Agreement shall be deemed to have
consented to, approved or accepted or to be satisfied with each document or
other matter either sent or made available by Administrative Agent to such
Lender for consent, approval, acceptance or satisfaction, or required
hereunder to be consented to or approved by or acceptable or satisfactory
to the Lender or Administrative Agent, unless Administrative Agent shall
have received written notice from such Lender prior to the Closing Date
specifying its objection thereto and either such objection shall not have
been withdrawn by written notice to Administrative Agent to that effect on
or prior to the Closing Date or, if any borrowing on the Closing Date has
been requested, the Lender shall not have made available to Administrative
Agent on or prior to the Closing date the Lender's Pro Rata Share of such
borrowing.
4.2 CONDITIONS TO ALL LOANS.
The obligations of Lenders to make Loans on each Funding Date are subject
to the following conditions precedent:
A. Administrative Agent shall have received before that Funding
Date, in accordance with the provisions of subsection 2.1B, an originally
executed Notice of Borrowing, in each case signed by the president, chief
executive officer, the chief financial officer or the treasurer of Company
or by any executive officer of Company designated by any of the above-
described officers on behalf of Company in a writing delivered to
Administrative Agent.
B. As of that Funding Date:
(i) The representations and warranties contained herein and in
the other Loan Documents shall be true, correct and complete in all
material respects on and as of that Funding Date to the same extent as
though made on and as of that date, except to the extent such
representations and warranties specifically relate to an earlier date,
in which case such representa tions and warranties shall have been
true, correct and complete in all material respects on and as of such
earlier date;
(ii) No event shall have occurred and be continuing or would
result from the consummation of the borrowing contemplated by such
Notice of Borrowing that would constitute an Event of Default or a
Potential Event of Default;
(iii) Each Loan Party shall have performed in all material
respects all agreements and satisfied all conditions which this
Agreement provides shall be performed or satisfied by it on or before
that Funding Date;
70
(iv) No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain any Lender
from making the Loans to be made by it on that Funding Date;
(v) The making of the Loans requested on such Funding Date shall
not violate any law including, without limitation, Regulation G,
Regulation T, Regulation U or Regulation X of the Board of Governors
of the Federal Reserve System; and
(vi) There shall not be pending or, to the knowledge of Company,
threatened, any action, suit, proceeding, governmental investigation
or arbitration against or affecting Company or any of its Subsidiaries
or any property of Company or any of its Subsidiaries that has not
been disclosed by Company in writing pursuant to subsection 5.6 or
6.1(x) prior to the making of the last preceding Loans and there shall
have occurred no development not so disclosed in any such action,
suit, proceeding, governmental investigation or arbitration so
disclosed, that, in either event, in the opinion of Arranging Agent,
Administrative Agent or of Requisite Lenders, would be expected to
have a Material Adverse Effect; and no injunction or other restraining
order shall have been issued and no hearing to cause an injunction or
other restraining order to be issued shall be pending or noticed with
respect to any action, suit or proceeding seeking to enjoin or
otherwise prevent the consum mation of, or to recover any damages or
obtain relief as a result of, the transactions contemplated by this
Agreement or the making of Loans hereunder.
4.3 CONDITIONS TO ISSUANCE OF LETTERS OF CREDIT.
-------------------------------------------
The issuance of any Letter of Credit (other than the Existing Letters of
Credit) hereunder (whether or not Issuing Lender is obligated to issue such
Letter of Credit) is subject to the following conditions precedent:
A. On or before the date of issuance of such Letter of Credit,
Administra tive Agent shall have received, in accordance with the
provisions of subsection 3.1B(i), an originally executed Notice of
Issuance of Letter of Credit, in each case signed by the president, chief
executive officer, the chief financial officer or the treasurer of Company
or by any executive officer of Company designated by any of the above-
described officers on behalf of Company in a writing delivered to
Administrative Agent, together with all other information specified in
subsection 3.1B(i) and such other documents or information as Issuing
Lender may reasonably require in connection with the issuance of such
Letter of Credit.
B. On the date of issuance of such Letter of Credit, all conditions
precedent described in subsection 4.2B shall be satisfied to the same
extent as if the issuance of such Letter of Credit were the making of a
Loan and the date of issuance of such Letter of Credit were a Funding Date.
71
SECTION 5.
COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to make the
Loans, to induce Issuing Lender to issue Letters of Credit and to induce other
Lenders to purchase participations therein, Company represents and warrants to
each Lender, on the date of this Agreement, on each Funding Date and on the date
of issuance of each Letter of Credit, that the following statements are true,
correct and complete:
5.1 ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS AND
----------------------------------------------------------------
SUBSIDIARIES.
------------
A. ORGANIZATION AND POWERS. Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Minnesota.
Company has all requisite corporate power and authority to own and operate its
properties, to carry on its business as now conducted and as proposed to be
conducted, to enter into the Loan Documents and to carry out the transactions
contemplated thereby.
B. QUALIFICATION AND GOOD STANDING. Company is qualified to do business
and in good standing in every jurisdiction where its assets are located and
wherever necessary to carry out its business and operations, except in
jurisdictions where the failure to be so qualified or in good standing has not
had and will not have a Material Adverse Effect.
C. CONDUCT OF BUSINESS. Company and its Subsidiaries are engaged only in
the businesses permitted to be engaged in pursuant to subsection 7.14.
D. SUBSIDIARIES. All of the Subsidiaries of Company are identified in
Schedule 5.1 annexed hereto, as said Schedule 5.1 may be supplemented from time
------------ ------------
to time pursuant to the provisions of subsection 6.1(xvii). The capital stock
of each of the Subsidiaries of Company identified in Schedule 5.1 annexed hereto
------------
(as so supplemented) is duly authorized, validly issued, fully paid and
nonassessable and none of such capital stock constitutes Margin Stock. Each of
the Subsidiaries of Company identified in Schedule 5.1 annexed hereto (as so
------------
supplemented) is a corporation duly organized, validly existing and in good
standing under the laws of its respective jurisdiction of incorporation set
forth therein, has all requisite corporate power and authority to own and
operate its properties and to carry on its business as now conducted and as
proposed to be conducted, and is qualified to do business and in good standing
in every jurisdiction where its assets are located and wherever necessary to
carry out its business and operations, in each case except where failure to be
so qualified or in good standing or a lack of such corporate power and
authority, singly or in the aggregate, has not had and will not have a Material
Adverse Effect. Schedule 5.1 annexed hereto (as so supplemented) correctly sets
------------
forth the ownership interest of Company and each of its Subsidiaries in each of
the Subsidiaries of Company identified therein.
72
5.2 AUTHORIZATION OF BORROWING, ETC.
--------------------------------
A. AUTHORIZATION OF BORROWING. The execution, delivery and performance
of the Loan Documents have been duly authorized by all necessary corporate
action on the part of Company.
B. NO CONFLICT. The execution, delivery and performance by Company of
the Loan Documents and the consummation of the transactions contemplated by the
Loan Documents do not and will not (i) violate any provision of any law or any
governmental rule or regulation applicable to Company or any of its
Subsidiaries, the Certificate or Articles of Incorporation or Bylaws or any
other organizational documents of Company or any of its Subsidiaries or any
order, judgment or decree of any court or other agency of government binding on
Company or any of its Subsidiaries, (ii) conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any
Contractual Obligation of Company or any of its Subsidiaries, (iii) result in or
require the creation or imposition of any Lien upon any of the properties or
assets of Company or any of its Subsidiaries (other than any Liens created
under any of the Loan Documents in favor of Administrative Agent on behalf of
Lenders), or (iv) require any approval of stockholders or any approval or
consent of any Person under any Contractual Obligation of Company or any of its
Subsidiaries, except for such approvals or consents which will be obtained on or
before the Closing Date and disclosed in writing to Lenders and except as
disclosed on Schedule 5.2.
------------
C. GOVERNMENTAL CONSENTS. The execution, delivery and performance by
Company of the Loan Documents and the consummation of the transactions
contemplated by the Loan Documents do not and will not require any registration
with, consent or approval of, or notice to, or other action to, with or by, any
federal, state or other govern mental authority or regulatory body, other than
filings required in connection with the perfection of security interests granted
pursuant to the Collateral Documents.
D. BINDING OBLIGATION. This Agreement has, and each of the other Loan
Documents have been duly executed and delivered by Company and this Agreement
and each of the other Loan Documents is the legally valid and binding obligation
of Company, enforceable against Company in accordance with its respective terms,
except as may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws relating to or limiting creditors' rights generally or by
equitable principles relating to enforceability.
E. VALID ISSUANCE OF UNSECURED SUBORDINATED NOTES. Company has the
corporate power and authority to issue the Unsecured Subordinated Notes. The
Unsecured Subordinated Notes, when issued and paid for, will be the legally
valid and binding obligations of Company, enforceable against Company in
accordance with their respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or limiting
creditors' rights generally or by equitable principles relating to
enforceability. The subordination provisions of the Unsecured Subordinated
Notes will be enforceable against the holders thereof, and the Loans and all
other monetary Obligations hereunder are and will be within the definition of
"SENIOR DEBT" included in such provisions. The Unsecured Subordinated Notes,
when issued
73
and sold, will either (a) have been registered or qualified under applicable
federal and state securities laws or (b) be exempt therefrom.
F. COLLATERAL DOCUMENTS. Except as set forth in Schedule 5.2F, the
-------------
security interests to be created in favor of Administrative Agent under the
Collateral Documents (to the extent purported to be created thereunder) will at
all times from and after the Closing Date constitute, as security for the
obligations purported to be secured thereby, a legal, valid and enforceable
security interest in and Lien on all of the Collateral referred to therein in
favor of Administrative Agent for the benefit of the Lenders and, from and after
the date of filing of the documents delivered on the Closing Date pursuant to
subsection 4.1B and 4.1C, perfected and prior to the rights of all third persons
(other than Permitted Encumbrances) in accordance with the requirements of all
applicable Collateral Documents. Each Loan Party has title to its Collateral as
set forth in clauses (i), (ii) and (iii) of subsection 5.5, as the case may be,
and all such Collateral is free and clear of all Liens except for Liens
permitted by subsection 7.2. No consents, filings or recordings are required in
order to perfect (or maintain the perfection or priority of) the security
interests purported to be created by any of the Collateral Documents, other than
such as will have been obtained and which remain in full force and effect and
uniform commercial code financing statements to be filed, or delivered to
Administrative Agent for filing, on the Closing Date and periodic uniform
commercial code continuation filings or as is specifically otherwise permitted
by the terms of any applicable Collateral Document.
5.3 FINANCIAL CONDITION.
-------------------
Company has heretofore delivered to Lenders, at Lenders' request, the
following financial statements and information: (i) the audited consolidated
balance sheet of Company and its Subsidiaries as at fiscal years, 1994, 1995 and
1996, and the related consolidated statements of income, stockholders' equity
and cash flows of Company and its Subsidiaries for the fiscal year then ended
together with auditors letters provided to Company in respect of such balance
sheets, (ii) the unaudited consolidated balance sheet of Company and its
Subsidiaries for the Company's last fiscal quarter ending prior to the Closing
Date and the related unaudited consolidated statements of income, stockholders'
equity and cash flows of Company and its Subsidiaries for the period from
December 30, 1996 to the fiscal quarter then ended and (iii) a pro-forma balance
sheet for Company and its Subsidiaries as of the last day of Company's third
fiscal period giving effect to the transaction to be consummated on the Closing
Date together with an income statement for Company and its Subsidiaries for the
three fiscal periods ending on such date. All such statements were prepared in
conformity with GAAP and fairly present, in all material respects, the financial
position (on a consolidated basis) of the entities described in such financial
statements as at the respective dates thereof and the results of operations and
cash flows (on a consolidated basis) of the entities described therein for each
of the periods then ended, subject, in the case of any such unaudited financial
statements, to changes resulting from audit and normal year-end adjustments and
to the omission of footnotes. Company does not (and will not following the
funding of the initial Loans) have any Contingent Obligation, contingent
liability or liability for taxes, long-term lease or unusual forward or long-
term commitment that is not reflected in the foregoing financial statements or
the notes thereto or the most recent financial
74
statements delivered by Company pursuant to subsection 6.1 and which singly or
in the aggregate would reasonably be expected to have a Material Adverse Effect.
5.4 NO MATERIAL ADVERSE CHANGE; NO RESTRICTED JUNIOR PAYMENTS.
---------------------------------------------------------
Since December 31, 1996, no event or change has occurred that has caused or
evidences, either in any case or in the aggregate, a Material Adverse Effect.
Neither Company nor any of its Subsidiaries has directly or indirectly declared,
ordered, paid or made, or set apart any sum or property for, any Restricted
Junior Payment or agreed to do so except as permitted by subsection 7.5.
5.5 TITLE TO PROPERTIES; LIENS.
--------------------------
Company and its Subsidiaries have (i) good, sufficient and legal title to
(in the case of fee interests in real property), (ii) leasehold interests in (in
the case of leasehold interests in real or personal property), or (iii) good
title to (in the case of all other personal property), all of their respective
properties and assets reflected in the financial statements referred to in
subsection 5.3 or in the most recent financial statements delivered pursuant to
subsection 6.1, in each case except for assets disposed of since the date of
such financial statements in the ordinary course of business or as otherwise
permitted under subsection 7.7. Except as permitted by this Agreement or the
Collateral Documents, all such properties and assets are free and clear of
Liens.
5.6 LITIGATION; ADVERSE FACTS.
-------------------------
There are no actions, suits, proceedings, arbitrations or governmental
investigations (whether or not purportedly on behalf of Company or any of its
Subsidiaries) at law or in equity or before or by any federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, pending or, to the knowledge of Company,
threatened against or affecting Company or any of its Subsidiaries or any
property of Company or any of its Subsidiaries that, individually or in the
aggregate, would reasonably be expected to result in a Material Adverse Effect.
Neither Company nor any of its Subsidiaries is (i) in violation of any
applicable laws that, individually or in the aggregate, would reasonably be
expected to result in a Material Adverse Effect or (ii) subject to or in default
with respect to any final judgments, writs, injunctions, decrees, rules or
regulations of any court or any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, that, individually or in the aggregate, would reasonably be expected to
result in a Material Adverse Effect.
5.7 PAYMENT OF TAXES.
----------------
Except to the extent permitted by subsection 6.3, all tax returns and
reports of Company and its Subsidiaries required to be filed by any of them have
been timely filed, and all material taxes, assessments, fees and other
governmental charges upon Company and its Subsidiaries and upon their respective
properties, assets, income, businesses and franchises which would be delinquent
if unpaid have been paid. Company knows of no proposed material tax assessment
75
against Company or any of its Subsidiaries which is not being actively contested
by Company or such Subsidiary in good faith and by appropriate proceedings;
provided that such reserves or other appropriate provisions, if any, as shall be
--------
required in conformity with GAAP shall have been made or provided therefor.
5.8 PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS.
--------------------------------------------------------
A. Neither Company nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any of its Contractual Obligations, and no condition
exists that, with the giving of notice or the lapse of time or both, would
constitute such a default, except where the consequences, direct or indirect, of
such default or defaults, if any, would not have a Material Adverse Effect.
B. Neither Company nor any of its Subsidiaries is a party to or is
otherwise subject to any agreements or instruments or any charter or other
internal restrictions which, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect.
5.9 GOVERNMENTAL REGULATION.
-----------------------
Neither Company nor any of its Subsidiaries is subject to regulation under
the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act or the Investment Company Act of 1940 or under any other
federal or state statute or regulation which may limit its ability to incur
Indebtedness or which may otherwise render all or any portion of the Obligations
unenforceable.
5.10 SECURITIES ACTIVITIES.
---------------------
A. Neither Company nor any of its Subsidiaries is engaged principally, or
as one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying any Margin Stock.
B. Following application of the proceeds of each Loan, not more than 25%
of the value of the assets (either of Company only or of Company and its
Subsidiaries on a consolidated basis) subject to the provisions of subsection
7.2 or 7.7 or subject to any restriction contained in any agreement or
instrument, between Company and any Lender or any Affiliate of any Lender,
relating to Indebtedness and within the scope of subsection 8.2, will be Margin
Stock.
5.11 EMPLOYEE BENEFIT PLANS.
----------------------
A. Company and each of its ERISA Affiliates are in compliance in all
material respects with all applicable provisions and requirements of ERISA and
the regulations and published interpretations thereunder with respect to each
Employee Benefit Plan, and have performed all their obligations under each
Employee Benefit Plan in all material respects.
76
B. There has been no ERISA Event which is continuing or in respect of
which there is any outstanding liability of Company or any of its ERISA
Affiliates which would reasonably be expected to have a Material Adverse Effect.
No ERISA Event is reasonably expected to occur which would reasonably be
expected to have a Material Adverse Effect.
C. Except to the extent required under Section 4980B of the Internal
Revenue Code or conversion rights under applicable state law or except as set
forth in Schedule 5.11 annexed hereto, no Employee Benefit Plan provides health
-------------
or welfare benefits (through the purchase of insurance or otherwise) for any
retired or former employees of Company or any of its ERISA Affiliates.
D. As of the most recent valuation date for any Pension Plan, the excess
of the actuarial present value (determined on the basis of reasonable
assumptions employed by the independent actuary for such Pension Plan) of the
benefit liabilities (as defined in Section 4001(a)(16) of ERISA) over the fair
market value of the assets of such Pension Plan, individually or in the
aggregate for all Pension Plans (excluding for purposes of such computation any
Pension Plans with respect to which there is no such excess), does not exceed
$1,000,000.
E. As of the most recent valuation date for each Multiemployer Plan for
which the actuarial report is available, the potential liability of Company or
any of its ERISA Affiliates for a complete withdrawal from such Multiemployer
Plan (within the meaning of Section 4203 of ERISA), when aggregated with such
potential liability for a complete withdrawal for all Multiemployer Plans, based
on information available pursuant to Section 4221(e) of ERISA, does not exceed
$1,000,000.
5.12 CERTAIN FEES.
------------
No broker's or finder's fee or commission will be payable with respect to
this Agreement or any of the transactions contemplated hereby, and Company
hereby indemnifies Lenders against, and agrees that it will hold Lenders
harmless from, any claim, demand or liability for any such broker's or finder's
fees alleged to have been incurred in connection herewith or therewith and any
expenses (including reasonable fees, expenses and disbursements of counsel)
arising in connection with any such claim, demand or liability.
5.13 ENVIRONMENTAL PROTECTION.
------------------------
A. The operations of Company and each of its Subsidiaries (including,
without limitation, all operations and conditions at or in the Facilities)
comply in all material respects with all Environmental Laws except to the extent
a failure to so comply would not have a Material Adverse Effect;
B. None of the operations of Company or any of its Subsidiaries is
subject to any judicial or administrative proceeding alleging the violation of
or liability under any Environmental Laws which if adversely determined could
reasonably be expected to have a Material Adverse Effect;
77
C. Neither Company nor any of its Subsidiaries nor any of their
respective Facilities or operations are subject to any outstanding written order
or agreement with any governmental authority or private party relating to (a)
prior administrative or judicial proceedings relating to the violation by
Company or such Subsidiary of any Environmental Laws or (b) any Environmental
Claims; and
D. No Hazardous Materials exist on, under or about any Facility in a
manner that has a reasonable possibility of giving rise to an Environmental
Claim having a Material Adverse Effect, and neither Company nor any of its
Subsidiaries has filed any notice or report of a Release of any Hazardous
Materials that in any single case or in the aggregate has a reasonable
possibility of giving rise to an Environmental Claim having a Material Adverse
Effect.
5.14 EMPLOYEE MATTERS.
----------------
Neither Company nor any of its Subsidiaries as of the date hereof is party
to any collective bargaining agreement. Except as set forth on Schedule 5.14,
there is no strike, work stoppage, slow down, lock-out or other labor dispute
pending or, to the knowledge of Company, threatened involving Company or any of
its Subsidiaries that could reasonably be expected to have a Material Adverse
Effect.
5.15 SOLVENCY.
--------
Each of Company and each of its Subsidiaries, is and, upon the incurrence
of any Obligations by Company on any date on which this representation is made,
will be, Solvent except to the extent the failure of any such Subsidiaries to be
Solvent would not in the aggregate be reasonably expected to have a Material
Adverse Effect.
5.16 INTELLECTUAL PROPERTY.
---------------------
A. Company and its Subsidiaries own, or are licensed (to the extent
required to be so licensed) to use, the Intellectual Property and all such
Intellectual Property is, to the extent reasonably deemed necessary and
appropriate by Company for the conduct of its business, fully protected and duly
and properly registered, filed or issued in the appropriate office and
jurisdictions for such registrations, filing or issuances, and Company owns all
of the right, title and interest in and to the "Churchs Fried Chicken " and
"Popeyes Chicken and Biscuits" trademarks and the other Intellectual Property
listed on Schedule 5.16 under the applicable laws of the United States free and
-------------
clear of any Lien (other than Permitted Encumbrances and Liens created in favor
of Administrative Agent on behalf of Lenders pursuant to the Loan Documents).
B. Except as disclosed in Schedule 5.16, no material claim has been
-------------
asserted by any Person with respect to the use of any such Intellectual
Property, or challenging or questioning the validity or effectiveness of any
such Intellectual Property. Except as disclosed in Schedule 5.16, the use of
-------------
such Intellectual Property by Company or any of its Subsidiaries does not
infringe on the rights of any Person, subject to such claims and infringements
as do not, in the aggregate, give rise to any liabilities on the part of Company
or any of its Subsidiaries that are material to
78
Company or any of its Subsidiaries. The consummation of the transactions
contemplated by this Agreement or the Refinancings will not in any material
manner or to any material extent impair the ownership of (or the license to use,
as the case may be) any of such Intellectual Property by Company or any of its
Subsidiaries.
5.17 APPLICABLE LAW.
--------------
Company and each of its Subsidiaries is in compliance with the requirements
of all applicable laws, rules, regulations, orders, applications, reporting and
licensing requirements of all governmental authorities except for violations
thereof which in the aggregate could not reasonably be expected to have a
Material Adverse Effect.
5.18 REAL PROPERTY.
-------------
A. Neither Company nor any of its Subsidiaries owns any interest in real
property other than the Real Property Assets identified in Schedule 5.18A
--------------
annexed hereto (as supplemented from time to time pursuant to subsection
6.1(xvii)).
B. Except as set forth in Schedule 5.18B, with respect to each lease for
a Real Property Asset in which the Company or one of its Subsidiaries has a
leasehold interest, either (i) no consent is required from the lessor thereunder
in order for the Company or applicable Subsidiary to encumber its leasehold
interest or (ii) the Company or such Subsidiary has obtained from the lessor all
required consents to the Closing Date Mortgage or Existing Mortgage and
assignment and modification thereof, as applicable.
5.19 INSURANCE.
----------
Company and its Subsidiaries maintain, with financially sound and reputable
insurers, insurance with respect to its properties and business and the
properties and business of its Subsidiaries, against loss or damage of the kinds
customarily insured against by corporations of established reputation engaged in
the same or similar business of such types and in such amounts as are
customarily carried under similar circumstances by such other corporations, all
as determined by the officers of Company in their reasonable discretion.
5.20 DISCLOSURE.
----------
No representation or warranty of Company or any of its Subsidiaries
contained in any Loan Document or in any other document, certificate or written
statement furnished to Lenders by or on behalf of Company or any of its
Subsidiaries for use in connection with the transactions contemplated by this
Agreement (including, without limitation, the Confidential Information
Memorandum dated May 1, 1997, slides and other material distributed to Lenders
in syndication meetings and for due diligence purposes) contains as of its date
any untrue statement of a material fact or omits to state a material fact (known
to Company, in the case of any document not furnished by it) necessary in order
to make the statements contained herein or therein not misleading in light of
the circumstances in which the same were made. Any projections and pro
79
forma financial information contained in such materials are based upon good
faith estimates and assumptions believed by Company to be reasonable at the time
made, it being recognized by Lenders that such projections as to future events
are not to be viewed as facts and that actual results during the period or
periods covered by any such projections may differ from the projected results.
There are no facts known (or which should upon the reasonable exercise of
diligence be known) to Company (other than matters of a general economic nature)
that, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect and that have not been disclosed herein or in such
other documents, certificates and statements furnished to Lenders for use in
connection with the transactions contemplated hereby.
SECTION 6.
COMPANY'S AFFIRMATIVE COVENANTS
Company covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations and the cancellation or expiration of all Letters of
Credit, unless Requisite Lenders shall otherwise give prior written consent,
Company shall perform, and shall cause each of its Subsidiaries to perform, all
covenants in this Section 6.
6.1 FINANCIAL STATEMENTS AND OTHER REPORTS.
--------------------------------------
Company will maintain, and cause each of its Subsidiaries to maintain, a
system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in conformity
with GAAP. Company will deliver to Administrative Agent and Lenders:
(i) Four-week Financials: as soon as available and in any event
--------------------
within 30 days after the end of each four-week accounting period ending
after the Closing Date, a consolidated profit and loss statement for
Company and its Subsidiaries as at the end of such four-week period in the
form prepared for presentation to the Board of Directors of Company for
such period and for the period from the beginning of the then current
fiscal year to the end of such period;
(ii) Quarterly Financials: as soon as available and in any event
--------------------
within 45 days after the end of each of the first, second and third fiscal
quarter of each fiscal year, (a) the consolidated and consolidating balance
sheets of Company and its Subsidiaries as at the end of such fiscal quarter
and the related consolidated and consolidating statements of income,
stockholders' equity and cash flows of Company and its Subsidiaries for
such fiscal quarter and for the period from the beginning of the then
current fiscal year to the end of such fiscal quarter, setting forth in
each case in comparative form the corresponding figures for the
corresponding periods of the previous fiscal year and the corresponding
figures from the consolidated plan for the current fiscal year delivered
pursuant to subsection 6.1(xiii), all in reasonable detail and certified by
the chief financial officer of Company that they fairly present, in all
material respects, the financial condition of
80
Company and its Subsidiaries as at the dates indicated and the results
of their operations and their cash flows for the periods indicated, subject
to changes resulting from audit and normal year-end adjustments, and (b) a
narrative report describing the operations of Company and its Subsidiaries
in the form prepared for presentation to the Board of Directors of Company
for such fiscal quarter and for the period from the beginning of the then
current fiscal year to the end of such fiscal quarter;
(iii) Year-End Financials: as soon as available and in any event
-------------------
within 90 days after the end of each fiscal year, (a) the consolidated and
consolidating balance sheets of Company and its Subsidiaries as at the end
of such fiscal year and the related consolidated and consolidating
statements of income, stockholders' equity and cash flows of Company and
its Subsidiaries for such fiscal year, setting forth in each case in
comparative form the corresponding figures for the previous fiscal year and
the corresponding figures from the consolidated plan delivered pursuant to
subsection 6.1(xiii) for the fiscal year covered by such financial
statements, all in reasonable detail and certified by the chief financial
officer of Company that they fairly present, in all material respects, the
financial condition of Company and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for the
periods indicated, (b) a narrative report describing the operations of
Company and its Subsidiaries in the form prepared for presentation to the
Board of Directors of Company for such fiscal year, and (c) in the case of
such consolidated financial statements, a report thereon of Xxxxxx Xxxxxxxx
& Co. or other independent certi fied public accountants of recognized
national standing selected by Company and satisfactory to Administrative
Agent, which report shall be unqualified, shall express no doubts about the
ability of Company and its Subsidiaries to continue as a going concern, and
shall state that such consolidated financial statements fairly present, in
all material respects, the consolidated financial position of Company and
its Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated in conformity
with GAAP applied on a basis consistent with prior years (except as
otherwise disclosed in such financial state ments) and that the examination
by such accountants in connection with such consolidated financial
statements has been made in accordance with generally accepted auditing
standards;
(iv) Officers' and Compliance Certificates: (a) together with each
-------------------------------------
delivery of financial statements of Company and its Subsidiaries pursuant
to subdivisions (ii) and (iii) above, an Officers' Certificate of Company
stating that the signers have reviewed the terms of this Agreement and have
made, or caused to be made under their supervision, a review in reasonable
detail of the transactions and condition of Company and its Subsidiaries
during the accounting period covered by such financial statements and that
such review has not disclosed the existence during or at the end of such
accounting period, and that the signers do not have knowledge of the
existence as at the date of such Officers' Certificate, of any condition or
event that constitutes an Event of Default or Potential Event of Default,
or, if any such condition or event existed or exists, specifying the
nature and period of existence thereof and what action Company has taken,
is taking and proposes to take with respect thereto; and (b) together with
each delivery of financial statements of Company and its Subsidiaries
pursuant to subdivisions (ii) and (iii) above,
81
a Compliance Certificate demonstrating in reasonable detail compliance
during and at the end of the applicable accounting periods with the
restrictions contained in Section 7 and the provisions of 2.4B(iii);
(v) Reconciliation Statements: if, as a result of any change in
-------------------------
accounting principles from those used in the preparation of the audited
financial statements referred to in subsection 5.3, the consolidated
financial statements of Company and its Subsidiaries delivered pursuant to
subdivisions (i), (ii), (iii) or (xiii) of this subsection 6.1 will differ
in any material respect from the consolidated financial statements that
would have been delivered pursuant to such subdivisions had no such change
in accounting principles been made, then (a) together with the first
delivery of financial statements pursuant to subdivision (i), (ii), (iii)
or (xiii) of this subsection 6.1 following such change, consolidated
financial statements of Company and its Subsidiaries for (y) the current
fiscal year to the effective date of such change and (z) , if requested by
Administrative Agent, the one full fiscal year immediately preceding the
fiscal year in which such change is made, in each case prepared on a pro
forma basis as if such change had been in effect during such periods, and
(b) together with each delivery of financial statements pursuant to
subdivision (i), (ii), (iii) or (xiii) of this subsection 6.1 following
such change, a written statement of the chief accounting officer or chief
financial officer of Company setting forth the differences (including
without limitation any differences that would affect any calculations
relating to the financial covenants set forth in subsection 7.6) which
would have resulted if such financial statements had been prepared without
giving effect to such change;
(vi) Accountants' Certification: together with each delivery of
--------------------------
consolidated financial statements of Company and its Subsidiaries pursuant
to subdivision (iii) above, a written statement by the independent
certified public accountants giving the report thereon (a) stating that
their audit examination has included a review of the terms of this
Agreement and the other Loan Documents as they relate to accounting
matters, (b) stating whether, in connection with their audit examination,
any condi tion or event that constitutes an Event of Default or Potential
Event of Default has come to their attention and, if such a condition or
event has come to their attention, specifying the nature and period of
existence thereof; provided that such accountants shall not be liable by
--------
reason of any failure to obtain knowledge of any such Event of Default or
Potential Event of Default that would not be disclosed in the course of
their audit examination, and (c) stating that based on their audit
examination nothing has come to their attention that causes them to believe
either or both that the information contained in the certificates delivered
therewith pursuant to subdivision (iv) above is not correct or that the
matters set forth in the Compliance Certificates delivered therewith
pursuant to clause (b) of subdivision (iv) above for the applicable fiscal
year are not stated in accordance with the terms of this Agreement;
(vii) Accountants' Reports: promptly upon receipt thereof (unless
--------------------
restricted by applicable professional standards), copies of all reports
submitted to Company by independent certified public accountants in
connection with each annual, interim or special
82
audit of the financial statements of Company and its Subsidiaries made by
such accountants, including, without limitation, any comment letter
submitted by such accountants to management in connection with their annual
audit;
(viii) SEC Filings and Press Releases: promptly upon their becoming
------------------------------
available, copies of (a) all financial statements, reports, notices and
proxy statements sent or made available generally by Company to its
security holders or by any Subsidiary of Company to its security holders
other than Company or another Subsidiary of Company, (b) all regular and
periodic reports and all registration statements (other than on Form S-8 or
a similar form) and prospectuses, if any, filed by Company or any of its
Subsidiaries with any securities exchange or with the Securities and
Exchange Commission or any governmental or private regulatory authority,
and (c) all press releases and other statements made available generally by
Company through its corporate office to the public concerning material
developments in the business of Company or any of its Subsidiaries;
(ix) Events of Default, etc.: promptly upon any executive officer
-----------------------
of Company obtaining knowledge (a) of any condition or event that
constitutes an Event of Default or Potential Event of Default, or becoming
aware that any Lender has given any notice (other than to Administrative
Agent) or taken any other action with respect to a claimed Event of Default
or Potential Event of Default, (b) that any Person has given any notice to
Company or any of its Subsidiaries or taken any other action with respect
to a claimed default or event or condition of the type referred to in
subsection 8.2, (c) of any condition or event that would be required to be
disclosed in a current report filed by Company with the Securities and
Exchange Commission on Form 8-K (Items 1, 2, 4, 5 and 6 of such Form as in
effect on the date hereof) if Company were required to file such reports
under the Exchange Act, or (d) of the occurrence of any event or change
that has caused or evidences, either in any case or in the aggregate, a
Material Adverse Effect, an Officers' Certificate specifying the nature and
period of existence of such condition, event or change, or specifying the
notice given or action taken by any such Person and the nature of such
claimed Event of Default, Potential Event of Default, default, event or
condition, and what action Company has taken, is taking and proposes to
take with respect thereto;
(x) Litigation or Other Proceedings: promptly upon any executive
-------------------------------
officer of Company obtaining knowledge of (1) the institution of, or non-
frivolous threat of, any action, suit, proceeding (whether administrative,
judicial or otherwise), governmental investigation or arbitration against
or affecting Company or any of its Subsidiaries or any property of Company
or any of its Subsidiaries (collectively, "PROCEEDINGS") not previously
disclosed in writing by Company to Lenders or (2) any material development
in any Proceeding that, in any case:
(x) if adversely determined, has a reasonable possibility of
giving rise to a Material Adverse Effect; or
83
(y) seeks to enjoin or otherwise prevent the consummation of, or
to recover any damages or obtain relief as a result of, the
transactions contemplated hereby;
written notice thereof together with such other information as may be
reasonably available to Company to enable Lenders and their counsel to
evaluate such matters;
(xi) ERISA Events: promptly upon becoming aware of the occurrence
------------
of or forthcoming occurrence of any ERISA Event that could have a Material
Adverse Effect, a written notice specifying the nature thereof, what action
Company or any of its ERISA Affiliates has taken, is taking or proposes to
take with respect thereto and, when known, any action taken or threatened
by the Internal Revenue Service, the Department of Labor or the PBGC with
respect thereto;
(xii) ERISA Notices: with reasonable promptness, copies of (a) each
-------------
Schedule B (Actuarial Information) to the annual report (Form 5500 Series)
filed by Company or any of its ERISA Affiliates with the Internal Revenue
Service with respect to each Pension Plan; (b) all notices received by
Company or any of its ERISA Affiliates concerning an ERISA Event with
respect to a Multiemployer Plan that could have a Material Adverse Effect;
and (c) such other documents or governmental reports or filings relating to
any Employee Benefit Plan as Administra tive Agent shall reasonably
request;
(xiii) Financial Plans: as soon as practicable and in any event no
---------------
later than 75 days after the beginning of each fiscal year, (a) a
consolidated and consolidating plan and financial budget for such fiscal
year, including without limitation budgeted consolidated and consolidating
balance sheets and budgeted consolidated and consolidating statements of
income and cash flows of Company and its Subsidiaries for such fiscal year,
and an explanation of the assumptions on which such budgets are based, and
(b) to the extent otherwise prepared by Company, projected consolidated and
consolidating statements of income and cash flows of Company and its
Subsidiaries for the period remaining through June 30, 2002 together with
an explanation of the assumptions on which such long term projections are
based;
(xiv) Insurance: as soon as practicable and in any event by April 1
---------
of each fiscal year, a report in form and substance satisfactory to
Administrative Agent outlining all material deviations in insurance
coverage maintained as of the date of such report by Company and its
Subsidiaries from that maintained during the immediately preceding period;
(xv) Environmental Audits and Reports: as soon as practicable
--------------------------------
following receipt thereof, copies of all environmental audits and reports,
whether prepared by personnel of Company or any of its Subsidiaries or by
independent consultants, with respect to significant environmental matters
at any Facility or which relate to an Environmental Claim which would
reasonably be expected to result in a Material Adverse Effect;
84
(xvi) Board of Directors: with reasonable promptness, written
------------------
notice of any material change in the Board of Directors of Company or any
of its Subsidiaries;
(xvii) New Subsidiaries; New Real Property: (x) not less than ten
-----------------------------------
Business Days prior to any Person becoming a Subsidiary of Company, a
written notice setting forth with respect to such Person (a) the date on
which such Person will become a Subsidiary of Company and (b) all of the
data required to be set forth in Schedule 5.1 annexed hereto with respect
------------
to all Subsidiaries of Company (it being understood that such written
notice shall be deemed to supplement Schedule 5.1 annexed hereto for all
------------
purposes of this Agreement) and (y) no less than once during each six month
period, a list of real property acquired by Company and its Subsidiaries
since the date of the last list provided pursuant to this clause 6.1(xvii);
(xviii) Other Information: with reasonable promptness, such other
-----------------
informa tion and data with respect to Company or any of its Subsidiaries as
from time to time may be reasonably requested by any Lender through
Administrative Agent.
6.2 CORPORATE EXISTENCE, ETC.
-------------------------
Except as permitted under subsection 7.7, Company will, and will cause each
of its Subsidiaries to, at all times preserve and keep in full force and effect
its corporate existence and all rights and franchises material to its business.
6.3 PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION.
----------------------------------------------
A. Company will, and will cause each of its Subsidiaries to, pay all
taxes, assessments and other governmental charges imposed upon it or any of its
properties or assets or in respect of any of its income, businesses or
franchises before any penalty accrues thereon, and all claims (including,
without limitation, claims for labor, services, materials and supplies) for sums
that have become due and payable and that by law have or may become a Lien upon
any of its properties or assets, prior to the time when any penalty or fine
shall be incurred with respect thereto; provided that no such charge or claim
need be paid if being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted and if such reserve or other
appropriate provision, if any, as shall be required in conformity with GAAP
shall have been made therefor.
B. Company will not, nor will it permit any of its Subsidiaries to, file
or consent to the filing of any consolidated income tax return with any Person
(other than Company or any of its Subsidiaries).
6.4 MAINTENANCE OF PROPERTIES; INSURANCE.
------------------------------------
A. Company will, and will cause each of its Subsidiaries to, maintain or
cause to be maintained in good repair, working order and condition, ordinary
wear and tear excepted, all material properties used or useful in the business
of Company and its Subsidiaries (including,
85
without limitation, Intellectual Property) and from time to time will make or
cause to be made all appropriate repairs, renewals and replacements thereof.
Company will maintain or cause to be maintained, with financially sound and
reputable insurers, insurance with respect to its properties and business and
the properties and businesses of its Subsidiaries against loss or damage of the
kinds customarily carried or maintained under similar circumstances by
corporations of established reputation engaged in similar businesses. Each such
policy of insurance (other than general liability policies) shall name
Administrative Agent for the benefit of Lenders as the loss payee thereunder and
shall provide for at least 30 days prior written notice to Administrative Agent
of any modification or cancellation of such policy.
B. APPLICATION OF NET INSURANCE/CONDEMNATION PROCEEDS. Upon receipt by
--------------------------------------------------
Company or any of its Subsidiaries of any proceeds constituting Net
Insurance/Condemnation Proceeds so long as no Event of Default or Potential
Event of Default shall have occurred or be continuing, Company or such
Subsidiary may retain and apply such Net Insurance/Condemnation Proceeds (i) in
the case of business interruption insurance for working capital and general
corporate purposes and (ii) in the case of any other insurance proceeds to
promptly and diligently apply such Net Insurance/Condemnation Proceeds to pay or
reimburse the cost of repairing or restoring or replacing the assets in respect
of which such Net Insurance/Condemnation Proceeds were received within 300 days
of receipt thereof, provided that any such Net Insurance/Condemnation Proceeds
not so applied shall be used to prepay the Loans as provided in subsection
2.4B(iii)(e).
6.5 INSPECTION; LENDER MEETING.
--------------------------
Company shall, and shall cause each of its Subsidiaries to, permit any
authorized representatives designated by any Lender to visit and inspect any of
the properties of Company or any of its Subsidiaries, including its and their
financial and accounting records, and to make copies and take extracts
therefrom, and to discuss its and their affairs, finances and accounts with its
and their officers and independent public accountants (provided that Company
may, if it so chooses, be present at or participate in any such discussion), all
upon reasonable notice and at such reasonable times during normal business hours
and as often as may be reasonably requested and provided that Lenders shall make
reasonable efforts to coordinate their visits and inspections with each other to
minimize the number of such visits and inspections. Without in any way limiting
the foregoing, Company will, upon the request of Administrative Agent or
Requisite Lenders, participate in a meeting of Administrative Agent and Lenders
once during each calendar year to be held at Company's corporate offices (or
such other location as may be agreed to by Company and Administrative Agent) at
such time as may be agreed to by Company and Administrative Agent.
6.6 COMPLIANCE WITH LAWS, ETC.
--------------------------
Company shall, and shall cause each of its Subsidiaries to, comply with the
requirements of all applicable laws, rules, regulations and orders of any
governmental authority, noncompliance with which would reasonably be expected to
cause a Material Adverse Effect.
86
6.7 ENVIRONMENTAL DISCLOSURE AND INSPECTION.
---------------------------------------
A. Company shall, and shall cause each of its Subsidiaries to, exercise
all due diligence in order to comply and cause (i) all tenants under any leases
or occupancy agreements affecting any portion of the Facilities currently owned
and leased and (ii) all other Persons on or occupying such property, to comply
with all Environmental Laws noncompliance with which would individually or in
the aggregate reasonably be expected to have a Material Adverse Effect.
B. Company agrees that Administrative Agent may, from time to time, (i)
upon reasonable belief based upon information obtained after the Closing Date of
the existence of a past or present Release or threatened Release of any
Hazardous Materials into, onto, beneath or from any Facility or (ii) upon the
occurrence and during the continuance of an Event of Default, retain, at
Company's expense, an independent professional consultant to review any report
relating to Hazardous Materials prepared by or for Company and to conduct its
own investigation of any Facility owned, leased or operated by Company or any of
its Subsidiaries, and Company agrees to use its commercially reasonable efforts
to obtain permission for Administrative Agent's professional consultant to
conduct its own investigation of any Facility previously owned, leased or
operated by Company or any of its Subsidiaries. Company hereby, grants to the
extent no consent of a landlord is required or, if landlord consent is required,
to use its reasonable efforts to obtain a landlord consent to grant, to
Administrative Agent and its agents, employees, consultants and contractors the
right to enter into or on to the Facilities currently owned, leased, operated by
Company or any of its Subsidiaries to perform such tests on such property as are
reasonably necessary to conduct such a review and/or investigation. Any such
investigation of any Facility shall be conducted, unless otherwise agreed to by
Company and Administrative Agent, during normal business hours and, to the
extent reasonably practicable, shall be conducted so as not to interfere with
the ongoing operations at any such Facility or to cause any damage or loss to
any property at such Facility. Company and Administrative Agent hereby
acknowledge and agree that any report of any investigation conducted at the
request of Administrative Agent pursuant to this subsection 6.7B will be
obtained and shall be used by Administrative Agent and Lenders for the purposes
of Lenders' internal credit decisions, to monitor and police the Loans and to
protect Lenders' security interests, if any, created by the Loan Documents.
Administrative Agent agrees to deliver a copy of any such report to Company with
the understanding that Company acknowledges and agrees that (i) it will
indemnify and hold harmless Administrative Agent and each Lender from any costs,
losses or liabilities relating to Company's use of or reliance on such report,
(ii) neither Administrative Agent nor any Lender makes any representation or
warranty with respect to such report, and (iii) by delivering such report to
Company, neither Administrative Agent nor any Lender is requiring or
recommending the implementation of any suggestions or recommendations contained
in such report. Company acknowledges that Administrative Agent's exercise of its
rights under this subsection 6.7B shall not be deemed generation, treatment,
storage, transportation, disposal or arrangement for disposal of Hazardous
Materials.
C. Company shall promptly advise Lenders in writing and in reasonable
detail of (i) any Release of any Hazardous Materials required to be reported to
any federal, state or local governmental or regulatory agency under any
applicable Environmental Laws, (ii) any and all
87
written communications with respect to any Environmental Claims that have a
reasonable possibility of giving rise to a Material Adverse Effect or with
respect to any Release of Hazardous Materials required to be reported to any
federal, state or local governmental or regulatory agency, (iii) any remedial
action taken by Company or any other Person in response to (a) any Hazardous
Materials on, under or about any Facility, the existence of which has a
reasonable possibility of resulting in an Environmental Claim having a Material
Adverse Effect, or (b) any Environmental Claim that would reasonably be expected
to have a Material Adverse Effect, (iv) Company's discovery of any occurrence or
condition on any real property adjoining or in the vicinity of any Facility that
could cause such Facility or any part thereof to be subject to any restrictions
on the ownership, occupancy, transferability or use thereof under any
Environmental Laws, and (v) any request for information from any governmental
agency that suggests such agency is investigating whether Company or any of its
Subsidiaries may be potentially responsible for a Release of Hazardous
Materials.
D. Company shall promptly notify Lenders of (i) any proposed acquisition
of stock, assets, or property by Company or any of its Subsidiaries that could
reasonably be expected to expose Company or any of its Subsidiaries to, or
result in, Environmental Claims that would reasonably be expected to have a
Material Adverse Effect or that could reasonably be expected to have a material
adverse effect on any Governmental Authoriza tion then held by Company or any of
its Subsidiaries and (ii) any proposed action to be taken by Company or any of
its Subsidiaries to commence manufacturing, industrial or other operations that
would reasonably be expected to subject Company or any of its Subsidiaries to
additional laws, rules or regulations, including, without limitation, laws,
rules and regulations requiring additional environmental permits or licenses.
E. Company shall, at its own expense, provide copies of such documents or
information as Arranging Agent or Administrative Agent may reasonably request in
relation to any matters disclosed pursuant to this subsection 6.7.
6.8 COMPANY'S REMEDIAL ACTION REGARDING HAZARDOUS MATERIALS.
--------------------------------------------------------
Company shall promptly take, and shall cause each of its Subsidiaries
promptly to take, any and all necessary response action in connection with the
presence, storage, use, disposal, transportation or Release of any Hazardous
Materials on, under or about any Facility in order to comply with all applicable
Environmental Laws and Governmental Authorizations to the extent that the
failure to so comply could reasonably be expected to have a Material Adverse
Effect. In the event Company or any of its Subsidiaries undertakes any remedial
action with respect to any Hazardous Materials on, under or about any Facility,
Company or such Subsidiary shall conduct and complete such remedial action in
compliance in all material respects with all applicable Environmental Laws, and
in accordance in all material respects with the policies, orders and directives
of all federal, state and local governmental authorities except when, and only
to the extent that, Company's or such Subsidiary's liability for such presence,
storage, use, disposal, transportation or discharge of any Hazardous Materials
is being contested in good faith by Company or such Subsidiary.
88
6.9 ENVIRONMENTAL INDEMNITY.
-----------------------
Company shall fully and promptly pay, perform, discharge, defend (subject
to Indemnitee's reasonable approval of Company's selection of counsel),
indemnify and hold harmless each Indemnitee from and against any action, suit,
proceeding, claim or loss (an "INDEMNIFIED ENVIRONMENTAL CLAIM") suffered or
incurred by that Indemnitee under or on account of any Environmental Laws or any
Release of any Hazardous Materials relating to the Facilities or any Hazardous
Materials generated at or originating from the Facilities by or at the direction
of Company or its Subsidiaries) other than any liability to the extent that such
liability results solely from the gross negligence or willful misconduct of the
Indemnitee, all as evidenced by a final judgment of a court of competent
jurisdiction; provided, however, that if Indemnities acquire title to any
-------- -------
Facility and Company and its Subsidiaries are no longer in possession of the
Facility (the "CUT-OFF DATE") at the time of an Indemnified Environmental
Claim, such Indemnified Environmental Claim shall be covered by the indemnity
set forth in this subsection 6.9 only if it arises out of or as a result of:
(i) the occurrence, at any time prior to the Cut-off Date, of any use, storage,
holding, existence, or Release of any Hazardous Materials whether currently
known or unknown; (ii) any use, storage, holding, existence, or Release of any
Hazardous Materials that Company or any of its Subsidiaries caused or
contributed to directly or indirectly at any time whether currently known or
unknown; (iii) any violation, prior to the Cut-off Date, of any applicable
Environmental Laws relating to any Facility or to the ownership, use, occupancy
or operation thereof; (iv) any investigation, inquiry, order, hearing, action or
other proceeding by or before any governmental authority in connection with any
use, storage, holding, existence or Release of any Hazardous Materials prior to
the Cut-off Date whether currently known or unknown; or (v) the inaccuracy or
breach of any representation or warranty set forth in any Loan Document.
6.10 EXECUTION OF LOAN DOCUMENTS BY FUTURE SUBSIDIARIES.
--------------------------------------------------
In the event that any Person becomes a Subsidiary of Company which is
organized under the law of the United States or any state thereof after the date
hereof, Company will promptly notify Administrative Agent of that fact and cause
such Subsidiary to execute and deliver to Administrative Agent a counterpart of
the Subsidiary Guaranty and a Subsidiary Pledge Agreement, a Subsidiary Security
Agreement, a Subsidiary Trademark Security Agreement, and Additional Mortgages
on all fee interests and material leasehold interests as Administrative Agent or
Requisite Lenders may request and to take all such further action and execute
all such further documents and instruments as may be required to grant
creditors' rights and grant and perfect in favor of Administrative Agent, for
the benefit of Lenders, subject to a first-priority Lien in all of the Real
Property Assets and all of the personal property assets of such Subsidiary
Guarantor (provided that with respect to leased Real Property Assets, Company
--------
and its Subsidiaries shall not be required to grant any security interests
requested by Administrative Agent or Requisite Lenders which require a landlord
consent if Company has exercised commercially reasonable efforts to obtain such
consent and has been unable to do so), all in form and substance reasonably
satisfactory to Administrative Agent. Company shall deliver to Administrative
Agent, together with such Loan Documents, (i) certified copies of such
Subsidiary's Articles or Certificate of Incorporation or comparable
organizational documents, together with a good standing certificate
89
from the Secretary of State of the jurisdiction of its incorporation or
organization, each to be dated a recent date prior to their delivery to
Administrative Agent, (ii) a copy of such Subsidiary's Bylaws, certified by its
corporate secretary or an assistant corporate secretary as of a recent date
prior to their delivery to Administrative Agent, (iii) a certificate executed by
the secretary or an assistant secretary of such Subsidiary as to (a) the
incumbency and signatures of the officers of such Subsidiary executing the
guaranty and the Collateral Documents to which such Subsidiary is a party and
(b) the fact that the attached resolutions of the Board of Directors of such
Subsidiary authorizing the execution, delivery and performance of such Loan
Documents are in full force and effect and have not been modified or rescinded,
and (iv) a favorable opinion of counsel to such Subsidiary, in form and
substance reasonably satisfactory to Administrative Agent and its counsel, as to
(a) the due organization and good standing of such Subsidiary, (b) the due
authorization, execution and delivery by such Subsidiary of such Loan Documents,
(c) the enforceability of the such Loan Documents against such Subsidiary, and
(d) such other matters as Administrative Agent may reasonably request, all of
the foregoing to be reasonably satisfactory in form and substance to
Administrative Agent and its counsel.
6.11 COVENANTS REGARDING ACQUISITION PROPERTIES.
-------------------------------------------
A. With respect to each Real Property Asset to be acquired by Company or
any of its Subsidiaries on or after the Closing Date that (x) is financed with
the proceeds of Loans or (y) has a fair market value of $500,000 or more (each
an "ACQUISITION PROPERTY" and collectively, the "ACQUISITION PROPERTIES")
Company shall, and shall cause its Subsidiaries to, (i) not less than ten (10)
days prior to the acquisition thereof, notify Administrative Agent and Arranging
Agent in writing of such pending acquisition; (ii) not later than the date on
which such property is acquired, deliver to Administrative Agent and Arranging
Agent a mortgage, deed of trust or deed to secure debt (each an "ADDITIONAL
MORTGAGE" and collectively the "ADDITIONAL MORTGAGES") substantially in the
form attached hereto as Exhibit XV to be executed by Company or applicable
----------
Subsidiary, encumbering each such Acquisition Property, the form and content of
such Additional Mortgage to be subject to the approval of Administrative Agent
and Arranging Agent in their sole discretion; (iii) not later than the date on
which such property is acquired, have delivered to Administrative Agent and
Arranging Agent a title report in respect of any such Acquisition Property to be
owned by Company or one of its Subsidiaries in fee and, if reasonably required
by Administrative Agent, a title report in respect of any such Acquisition
Property to consist of material leasehold interests; (iv) if such Acquisition
Property is to be held by Company or one of its Subsidiaries as a leasehold
interest, exercise commercially reasonable efforts to obtain and deliver to
Administrative Agent and Arranging Agent (x) the consent of the lessor thereof
to the encumbering by Company or the applicable Subsidiary of its leasehold
interest and (y) upon the request of Administrative Agent, deliver to
Administrative Agent and Arranging Agent an estoppel letter from the landlord,
in form and substance reasonably satisfactory to Administrative Agent; and (v)
not less than ten (10) days prior to the acquisition thereof, in the case of any
such Acquisition Property to be owned in fee, deliver to Administrative Agent
and Arranging Agent environmental audits prepared by nationally recognized
professional consultants or other consultants mutually acceptable to Company and
Administrative Agent, in form, scope and substance satisfactory to
Administrative Agent in its reasonable discretion.
90
B. On or prior to the date on which any such Acquisition Property is
acquired by Company or one of its Subsidiaries, Company shall have, or have
caused such Subsidiary to have, with respect to each such Acquisition Property
(i) delivered to Administrative Agent fully executed counterparts of an
Additional Mortgage previously approved by Administrative Agent and Arranging
Agent, together with evidence that such Additional Mortgage has been recorded in
all places to the extent necessary or desirable, in the reasonable judgment of
Administrative Agent, so as to effectively create a valid and enforceable first
priority lien (or such other priority lien as may be specified in the applicable
Additional Mortgage), subject to Permitted Encumbrances, on such Acquisition
Property in favor of Administrative Agent (or such other trustee as may be
required or desired under local law) for the benefit of Lenders; (ii) if
required to order a title report pursuant to subsection 6.11(a)(iii) above,
deliver an ALTA mortgagee title insurance policy (each an "ADDITIONAL MORTGAGEE
POLICY" and collectively, the "ADDITIONAL MORTGAGEE POLICIES") issued by the
Title Company, in an amount reasonably satisfactory to Administrative Agent (but
not in excess of Agent's reasonable determination of the fair market value of
the Acquisition Property), assuring Administrative Agent that the Additional
Mortgage to be executed in connection with the acquisition thereof creates a
valid and enforceable first priority mortgage lien (or such other priority lien
as may be specified in the Additional Mortgage) on such Acquisition Property,
free and clear of all defects and encumbrances except Permitted Encumbrances,
and subject to a standard survey exception, and which Additional Mortgagee
Policy shall provide for affirmative insurance and such reinsurance as
Administrative Agent may reasonably request, all of the foregoing in form and
substance reasonably satisfactory to Administrative Agent; and (iii) if the
Acquisition Property is to be leased or subleased by the Company or applicable
Subsidiary to a non-Affiliate of Company a counterpart agreement of
subordination, non-disturbance and attornment substantially in the form attached
hereto as Exhibit VIII, subordinating the leasehold interest of such third party
------------
to the Additional Mortgage and the Lien created thereby, which agreement shall
be executed by Company or the applicable Subsidiary as lessor (or sublessor, as
the case may be) and the lessee (or sublessee, as the case may be).
Nothing stated in this Section 6.11 shall be interpreted so as to allow the
Company or any of its Subsidiaries to acquire fee or leasehold title to any Real
Property Asset on or after the Closing Date except in accordance with the terms
of Section 7.7 hereof.
6.12 FURTHER ASSURANCES.
------------------
A. At any time or from time to time upon the request of Administrative
Agent, the Company will, at its expense, promptly execute, acknowledge and
deliver such further documents and do such other acts and things as such
Administrative Agent may reasonably request in order to effect fully the
purposes of the Loan Documents and to provide for payment of the Obligations in
accordance with the terms of this Agreement, the Notes and the other Loan
Documents. In furtherance and not in limitation of the foregoing, the Company
shall take, and cause each of its Subsidiaries to take, such actions as
Administrative Agent may reasonably request from time to time (including,
without limitation, the execution and delivery of guaranties, security
agreements, pledge agreements, mortgages, deeds of trust, stock powers,
financing statements and other documents, the filing or recording of any of the
foregoing, and the delivery of stock certificates
91
and other collateral with respect to which perfection is obtained by possession)
to ensure that the Obligations are guarantied by Subsidiary Guarantors and are
secured by such of the assets of the Company and its Subsidiaries as is provided
in the Loan Documents.
B. The Company shall promptly record and file or cause to be recorded and
filed, as soon as practicable after the Closing Date, the Closing Date
Mortgages, Uniform Commercial Code Financing Statements and Fixture Filings and
all other necessary documents, certificates and affidavits in the appropriate
real and personal property records or filing office in each jurisdiction where
the Collateral is located. In connection therewith, the Company shall cooperate
with the Administrative Agent and with the Title Company and shall pay all
recording and filing fees, taxes (including mortgage recording taxes) and all
other costs and expenses incurred with respect thereto.
SECTION 7.
COMPANY'S NEGATIVE COVENANTS
Company covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations and the cancellation or expiration of all Letters of
Credit, unless Requisite Lenders shall otherwise give prior written consent,
Company shall perform, and shall cause each of its Subsidiaries to perform, all
covenants in this Section 7.
7.1 INDEBTEDNESS.
------------
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or guaranty, or otherwise become
or remain directly or indirectly liable with respect to, any Indebtedness,
except:
(i) Company may become and remain liable with respect to the
Obligations;
(ii) Company may become and remain liable with respect to the
Unsecured Subordinated Notes;
(iii) Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations permitted by subsection 7.4 and, upon any
matured obligations actually arising pursuant thereto, the Indebtedness
corresponding to the Contingent Obligations so extinguished;
(iv) Company and its Subsidiaries may become and remain liable with
respect to intercompany Indebtedness, provided that (a) all such
--------
intercompany Indebtedness shall be evidenced by intercompany notes; (b) the
obligations of each obligor on such Indebtedness shall be subordinated in
right of payment to the payment and performance of such obligor's
Obligations, if any, (whether as a borrower, guarantor or pledgor of
Collateral under the Loan Documents to which such obligor is a party)
pursuant to the
92
terms of the intercompany notes; (c) such intercompany Indebtedness shall
be reduced pro tanto by the amount of any payments made by such obligor in
--- -----
respect of its Obligations under any guarantee of the Obligations; and (d)
the Intercompany Notes evidencing such indebtedness shall be pledged to
Lenders;
(v) Company may remain liable with respect to Indebtedness
described in Schedule 7.1 annexed hereto and any renewals or refinancings
------------
thereof;
(vi) Company and its Subsidiaries may become and remain liable with
respect to Indebtedness under Capital Leases, to the extent permitted under
subsection 7.8;
(vii) Company and its Subsidiaries may become and remain liable with
respect to Indebtedness incurred in connection with the construction of
properties for its "turnkey" program in an aggregate principal amount not
to exceed $15,000,000 outstanding at any time; and
(viii) Company and its Subsidiaries may become and remain liable with
respect to other Indebtedness in an aggregate principal amount not to
exceed $20,000,000 at any time outstanding; provided that not more than
--------
$10,000,000 of such Indebtedness may be secured pursuant to the provisions
of subsection 7.2A(iii).
7.2 LIENS AND RELATED MATTERS.
-------------------------
A. PROHIBITION ON LIENS. Company shall not, and shall not permit any of
its Subsidiaries to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of Company or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the Uniform Commercial Code of any State or under any similar
recording or notice statute, except:
(i) Permitted Encumbrances;
(ii) Liens described in Schedule 7.2 annexed hereto and Liens
------------
securing the refinancing of the Indebtedness secured by such Liens to the
extent permitted by subsection 7.1; and
(iii) Other Liens securing Indebtedness outstanding pursuant to
clause (vii) of subsection 7.1, provided that Liens securing Indebtedness
--------
permitted under subsection 7.1(vii) and (viii) shall not encumber any
assets other than the assets (and proceeds thereof) purchased or financed
with the proceeds of such Indebtedness;
B. EQUITABLE LIEN IN FAVOR OF LENDERS. If Company or any of its
Subsidiaries shall create or assume any Lien upon any of its properties or
assets, whether now owned or hereafter
93
acquired, other than Liens excepted by the provisions of subsection 7.2A, it
shall make or cause to be made effective provision whereby the Obligations will
be secured by such Lien equally and ratably with any and all other Indebtedness
secured thereby as long as any such Indebtedness shall be so secured; provided
--------
that, notwithstanding the foregoing, this covenant shall not be construed as a
consent by Requisite Lenders to the creation or assumption of any such Lien not
permitted by the provisions of subsection 7.2A.
C. NO FURTHER NEGATIVE PLEDGES. Except (i) with respect to specific
property encumbered to secure payment of particular Indebtedness in accordance
with this subsection 7.2 or to be sold pursuant to an executed agreement with
respect to an Asset Sale, (ii) with respect to assets in connection with the
incurrence of Indebtedness permitted under subsection 7.1(vi) or 7.1(vii), or
(iii) pursuant to the terms of Unsecured Note Indenture, neither Company nor any
of its Subsidiaries shall enter into any agreement prohibiting the creation or
assumption of any Lien upon any of its properties or assets, whether now owned
or hereafter acquired.
D. NO RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS TO COMPANY OR OTHER
SUBSIDIARIES. Company will not, and will not permit any of its Subsidiaries to,
create or otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any such Subsidiary to
(i) pay dividends or make any other distributions on any of such Subsidiary's
capital stock owned by Company or any other Subsidiary of Company, (ii) repay or
prepay any Indebtedness owed by such Subsidiary to Company or any other
Subsidiary of Company, (iii) make loans or advances to Company or any other
Subsidiary of Company, or (iv) transfer any of its property or assets to Company
or any other Subsidiary of Company, except (a) customary nonassignment
provisions in contracts or leases entered into in the ordinary course of
business, (b) encumbrances or restrictions contained in agreements relating to
Indebtedness incurred by Company or a Subsidiary of Company; provided (1) such
--------
Indebtedness is permitted to be incurred pursuant to subsection 7.1, (2) the
encumbrances or restrictions relate solely to the property or assets of such
Subsidiary, (3) are customary for the type of Indebtedness being incurred and
(4) are no more restrictive in any material respect than the existing
restrictions.
7.3 INVESTMENTS; JOINT VENTURES.
---------------------------
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, make or own any Investment in any Person, including any
Joint Venture, except:
(i) Company and its Subsidiaries may make and own Investments in
Cash and Cash Equivalents;
(ii) Company may make and own Investments in Subsidiaries of Company;
(iii) Company and its Subsidiaries may continue to own the
Investments owned by them and described in Schedule 7.3 annexed hereto;
------------
94
(iv) Company may make and own Investments consisting of notes
received in connection with Asset Sales permitted under subsection 7.7;
(v) Company may make extensions of credit or otherwise provide
credit support to franchisees in respect of the deferral of royalty
payments, rental payments, taxes, equipment sales, financing of restaurant
properties, franchise agreements and development or territory agreements of
such franchisees, provided that the aggregate amount thereof created after
--------
the Closing Date shall at no time be outstanding in an amount greater than
$2,000,000 to any franchisee or $12,500,000 to all franchisees;
(vi) Company may make Investments in or loans to franchisees not
specified in subsection 7.4(vi) in an aggregate amount not to exceed
$1,500,000 at any one time outstanding;
(vii) Company may continue to own loans evidenced by the Employee Tax
Loan Notes in an aggregate principal amount not to exceed $5,000,000 at any
one time outstanding;
(viii) Company may make and own Investments consisting of notes
received from employees of Company and its Subsidiaries in connection with,
and in an amount not to exceed the purchase price of, their purchase of
Company Common Stock, provided such notes are secured by the Company Common
Stock being purchased with the proceeds thereof;
(ix) Company may make and own other Investments in an amount not to
exceed $5,000,000 in the aggregate;
(x) Company may make and own the Permitted Foreign Joint Venture
Investment; and
(xi) Company may make and own Investments permitted pursuant to
subsection 7.7.
7.4 CONTINGENT OBLIGATIONS.
----------------------
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create or become or remain liable with respect to any
Contingent Obligation, except:
(i) Subsidiaries of Company may become and remain liable with respect
to Contingent Obligations in respect of the Subsidiary Guaranty;
(ii) Company may become and remain liable with respect to Contingent
Obligations in respect of Letters of Credit;
95
(iii) Company may become and remain liable with respect to Contingent
Obligations under Interest Rate Agreements with respect to the Obligations;
(iv) Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations in respect of customary indemnification
and purchase price adjustment obligations incurred in connection with Asset
Sales or other sales of assets;
(v) Company and its Subsidiaries, as applicable, may remain liable
with respect to Contingent Obligations described in Schedule 7.4 annexed
------------
hereto;
(vi) Company and its Subsidiaries may become and remain liable with
respect to other Contingent Obligations; provided that the maximum
--------
aggregate liability, contingent or otherwise, of Company and its
Subsidiaries in respect of all such Contingent Obligations shall at no time
exceed $5,000,000;
(vii) Company may become and remain liable with respect to commodity
hedging arrangements entered into in the ordinary course of business;
(viii) Company may become and remain liable with respect to Permitted
Earnout Agreements;
(ix) To the extent constituting a Contingent Obligation, Company may
become and remain liable with respect to credit support obligations
relating to franchisees permitted under subsection 7.3(v) and 7.3(ix); and
(x) Guarantees of Unsecured Subordinated Notes to the extent
required under the terms of the Unsecured Subordinated Note Indenture.
7.5 RESTRICTED JUNIOR PAYMENTS.
--------------------------
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, declare, order, pay, make or set apart any sum for any
Restricted Junior Payment; provided that Company may (i) make regularly
--------
scheduled payments of principal and interest in respect of the Unsecured
Subordinated Notes in accordance with the terms of, and only to the extent
required by, and subject to the subordination provisions contained in, the
Unsecured Subordinated Note Indenture, as the Unsecured Subordinated Note
Indenture may be amended from time to time to the extent permitted under
subsection 7.15 and repurchases or redemptions of Unsecured Subordinated Notes
with the proceeds of equity securities as contemplated by subsection
2.4B(iii)(c), and (ii) make, so long as no Potential Event of Default or Event
of Default shall have occurred and be continuing, payments to purchase Company
Common Stock or options, warrants or rights to purchase or acquire Company
Common Stock to officers or employees or former officers or employees (or their
estates or estate beneficiaries) upon death, disability, retirement or
termination of employment from Company or its Subsidiaries not to exceed
$1,500,000 during any fiscal year, plus the amount of any Cash proceeds received
----
by Company from the sale of Company Common Stock to officers or employees of
Company or its
96
Subsidiaries within such fiscal year, (iii) other Restricted Junior Payments
described in Schedule 7.5.
------------
7.6 FINANCIAL COVENANTS.
-------------------
A. MINIMUM CASH INTEREST COVERAGE RATIO. Company shall not permit the
ratio (the "CASH INTEREST COVERAGE RATIO") of (i) Consolidated EBITDA to (ii)
Consolidated Cash Interest Expense for any four-fiscal quarter period ending as
of the dates set forth below to be less than the correlative ratio indicated:
==============================================
FISCAL MINIMUM
QUARTER CASH INTEREST
ENDING COVERAGE RATIO
==============================================
06/15/97 2.25:1.00
----------------------------------------------
09/07/97 2.25:1.00
----------------------------------------------
12/28/97 2.25:1.00
----------------------------------------------
03/22/98 2.25:1.00
----------------------------------------------
06/14/98 2.25:1.00
----------------------------------------------
09/06/98 2.25:1.00
----------------------------------------------
12/27/98 2.25:1.00
----------------------------------------------
03/21/99 2.50:1.00
----------------------------------------------
06/13/99 2.50:1.00
----------------------------------------------
09/05/99 2.50:1.00
----------------------------------------------
12/26/99 2.50:1.00
----------------------------------------------
03/19/00 2.75:1.00
----------------------------------------------
06/11/00 2.75:1.00
----------------------------------------------
09/03/00 2.75:1.00
----------------------------------------------
12/31/00 2.75:1.00
----------------------------------------------
03/25/01 3.00:1.00
----------------------------------------------
06/17/01 3.00:1.00
----------------------------------------------
09/09/01 3.00:1.00
----------------------------------------------
12/30/01 3.00:1.00
==============================================
97
==============================================
FISCAL MINIMUM
QUARTER CASH INTEREST
ENDING COVERAGE RATIO
==============================================
03/24/02 3.00:1.00
----------------------------------------------
06/16/02 3.00:1.00
==============================================
B. MAXIMUM LEVERAGE RATIO. Company shall not permit the ratio (the
"LEVERAGE RATIO") of (i) Consolidated Total Debt as of the dates set forth below
to (ii) Consolidated EBITDA for the four-fiscal quarter period ending on such
date to exceed the correlative ratio indicated:
==============================================
FISCAL MAXIMUM
QUARTER LEVERAGE
ENDING RATIO
==============================================
06/15/97 4.00:1.00
----------------------------------------------
09/07/97 4.00:1.00
----------------------------------------------
12/28/97 4.00:1.00
----------------------------------------------
03/22/98 4.00:1.00
----------------------------------------------
06/14/98 4.00:1.00
----------------------------------------------
09/06/98 4.00:1.00
----------------------------------------------
12/27/98 4.00:1.00
----------------------------------------------
03/21/99 3.75:1.00
----------------------------------------------
06/13/99 3.75:1.00
----------------------------------------------
09/05/99 3.75:1.00
----------------------------------------------
12/26/99 3.75:1.00
----------------------------------------------
03/19/00 3.75:1.00
----------------------------------------------
06/11/00 3.75:1.00
----------------------------------------------
09/03/00 3.75:1.00
----------------------------------------------
12/31/00 3.75:1.00
----------------------------------------------
03/25/01 3.50:1.00
----------------------------------------------
06/17/01 3.50:1.00
==============================================
98
==============================================
FISCAL MAXIMUM
QUARTER LEVERAGE
ENDING RATIO
==============================================
09/09/01 3.50:1.00
----------------------------------------------
12/30/01 3.50:1.00
----------------------------------------------
03/24/02 3.50:1.00
----------------------------------------------
06/16/02 3.50:1.00
==============================================
C. MINIMUM FIXED CHARGE COVERAGE RATIO. Company shall not permit the
ratio (the "FIXED CHARGE COVERAGE RATIO") of (i) Consolidated EBITDA to (ii)
Consolidated Fixed Charges for any four-fiscal quarter period ending on the
dates set forth below shall not be less than the correlative ratio indicated:
==============================================
FISCAL MINIMUM
QUARTER FIXED CHARGE
ENDING COVERAGE
==============================================
06/15/97 1.20:1.00
----------------------------------------------
09/07/97 1.20:1.00
----------------------------------------------
12/28/97 1.20:1.00
----------------------------------------------
03/22/98 1.25:1.00
----------------------------------------------
06/14/98 1.25:1.00
----------------------------------------------
09/06/98 1.25:1.00
----------------------------------------------
12/27/98 1.25:1.00
----------------------------------------------
03/21/99 1.30:1.00
----------------------------------------------
06/13/99 1.30:1.00
----------------------------------------------
09/05/99 1.30:1.00
----------------------------------------------
12/26/99 1.30:1.00
----------------------------------------------
03/19/00 1.35:1.00
----------------------------------------------
06/11/00 1.35:1.00
----------------------------------------------
09/03/00 1.35:1.00
----------------------------------------------
12/31/01 1.35:1.00
==============================================
99
==============================================
FISCAL MAXIMUM
QUARTER FIXED CHARGE
ENDING RATIO
==============================================
03/25/01 1.40:1.00
----------------------------------------------
06/17/01 1.40:1.00
----------------------------------------------
09/09/01 1.40:1.00
----------------------------------------------
12/30/01 1.40:1.00
----------------------------------------------
03/24/02 1.40:1.00
----------------------------------------------
06/16/02 1.40:1.00
==============================================
D. CERTAIN CALCULATIONS.
(i) With respect to any calculation of Consolidated Interest Expense
or Consolidated Cash Interest Expense for purposes of subsection 7.6 for a
four-fiscal quarter period including the initial Funding Date, Consolidated
Interest Expense and Consolidated Cash Interest Expense shall be calculated
on a pro forma basis assuming, in each case, that the initial Funding Date,
--- -----
and the Refinancings and the borrowings by the Company to fund the same
pursuant to this Agreement and the Unsecured Subordinated Notes, occurred
on the first day of the applicable four-fiscal quarter period and assuming
further, for purposes of calculation of the pro forma interest accrued on
--- -----
the Loans during such periods prior to the Closing Date that all Loans
outstanding were Eurodollar Loans and that the applicable reference
interest rates were the average effective Adjusted Eurodollar Rates plus
----
the Applicable Margin for Loans outstanding during the period from the
initial Funding Date through the date of determination.
(ii) With respect to any period during which a Permitted Acquisition
is made, for purposes of determining compliance with the financial
covenants set forth in this subsection 7.6, Consolidated EBITDA,
Consolidated Interest Expense and Consolidated Cash Interest Expense shall
be calculated with respect to such periods and such Permitted Acquisition
on a pro forma basis (a "PRO FORMA BASIS"), including any pro forma
expense and cost reductions calculated on a basis consistent with
Regulation S-X promulgated under the Securities Act), using the audited (if
available) historical financial statements of all entities or assets so
acquired or to be acquired and the consolidated financial statements of
Company and its Subsidiaries which shall be reformulated as if such
Permitted Acquisition, and any other Permitted Acquisitions which have been
consummated during such period, and any Indebtedness or other liabilities
incurred in connection therewith had been consummated or incurred at the
beginning of such period (and assuming that such Indebtedness bears
interest during any portion of the applicable measurement period prior to
the acquisition date at the average effective Adjusted Eurodollar Rates
plus the Applicable Margin applicable to outstanding Loans during such
----
100
period), (ii) otherwise in conformity with certain procedures to be agreed
upon between Administrative Agent and Company, all such calculations to be
in form and substance satisfactory to Administrative Agent.
E. PRO FORMA COMPLIANCE FOR PERMITTED ACQUISITIONS.
On or prior to the consummation of a Permitted Acquisition financed in
whole or in part with the proceeds of an Acquisition Loan, Company shall deliver
to Administrative Agent an Officer's Certificate, demonstrating compliance, (y)
on a Pro Forma Basis, with the financial covenants set forth in Schedule 7.6 as
of the fiscal quarter most recently ended, after giving effect to such Permitted
Acquisition and (z) projected compliance, on a Pro Forma Basis, with the
financial covenants set forth in this subsection 7.6 as of the last day of the
next succeeding fiscal quarter.
7.7 RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES AND ACQUISITIONS.
----------------------------------------------------------------
Company shall not, and shall not permit any of its Subsidiaries to, alter
the corporate, capital or legal structure of Company or any of its Subsidiaries,
or enter into any transaction of merger or consolidation, or liquidate, wind-up
or dissolve itself (or suffer any liquidation or dissolution), or convey, sell,
lease, sublease, transfer or otherwise dispose of, in one transaction or a
series of transactions, all or any part of its business, property or fixed
assets, whether now owned or hereafter acquired (other than in the ordinary
course of business), or acquire by purchase or otherwise any portion of the
business, property or fixed assets of, or stock or other evidence of beneficial
ownership of, any Person or any division or line of business of any Person
(other than in the ordinary course of business), except:
(i) any Subsidiary of Company may be merged with or into Company or
any other Subsidiary of Company, or be liquidated, wound up or dissolved,
or all or any part of its business, property or assets may be conveyed,
sold, leased, transferred or otherwise disposed of, in one transaction or a
series of transactions, to Company or any other wholly owned Subsidiary of
Company; provided that, in the case of such a merger, Company or such
--------
wholly owned Subsidiary shall be the continuing or surviving corporation;
(ii) Company and its Subsidiaries may sell or otherwise dispose of
assets in transactions that do not constitute Asset Sales; provided that
--------
the consideration received for such assets shall be in an amount at least
equal to the fair market value thereof;
(iii) Company and its Subsidiaries may lease stores owned or leased
by the Company or Subsidiaries to franchisees; provided that the rentals
--------
received under any such lease reflect the fair market value of such
property;
(iv) subject to subsection 7.13, Company and its Subsidiaries may
sell or dispose of (y) the Far West Division and (z) may make other Asset
Sales (other than Specified Asset Sales) having an aggregate fair market
value not in excess of $10,000,000; provided that (a) the consideration
--------
received for each such Asset Sale shall
101
be in an amount at least equal to the fair market value thereof; (b) the
consideration for each such Asset Sale (other than the Far West Division)
is at least 75% Cash, and the balance is promissory notes payable to
Company or its Subsidiaries; and (c) the proceeds of such Asset Sales
shall be applied as required by subsection 2.4B(iii)(a);
(v) Company and its Subsidiaries may make Investments permitted
pursuant to subsection 7.3;
(vi) Company and its Subsidiaries may make Permitted Acquisitions;
and
(vii) Company and its Subsidiaries may make Specified Asset Sales.
7.8 CAPITAL EXPENDITURES.
--------------------
A. CONSOLIDATED CAPITAL EXPENDITURES. Except as set forth in subdivision
B of this subsection 7.8, Company shall not, and shall not permit its
Subsidiaries to, make or incur Consolidated Capital Expenditures, in any fiscal
year or period indicated below, in an aggregate amount in excess of the
corresponding amount (the "MAXIMUM CONSOLIDATED CAPITAL EXPENDITURES AMOUNT")
set forth in the chart below opposite such fiscal year or period; provided that
--------
with respect to the Maximum Consolidated Capital Expenditure Amount for any
fiscal year or period, at Company's option such amount may be increased (a) by a
portion (not to exceed 20%) of the Maximum Consolidated Capital Expenditure
amount for the immediately preceding fiscal year which was not utilized during
such preceding fiscal year, and (b) a portion (not to exceed 15%) of the amount
of Maximum Consolidated Capital Expenditures Amount for the immediately
succeeding year (which, to the extent of such increase shall reduce the amount
of the Maximum Consolidated Capital Expenditure Amount for such succeeding
year), provided that in no event shall the aggregate amount of the increases to
--------
the Maximum Consolidated Capital Expenditures Amount pursuant to the foregoing
clauses (a) and (b) in any fiscal year or period exceed $10,000,000; provided
--------
further that the Maximum Consolidated Capital Expenditures Amount for each
-------
fiscal year set forth below shall be increased by the amount of Consolidated
Excess Cash flow for the immediately preceding fiscal year not required to be
used to prepay Loans pursuant to subsection 2.4B(iii)(f).
102
=============================================
MAXIMUM CONSOLIDATED
FISCAL CAPITAL EXPENDITURES
YEAR/PERIOD AMOUNT
=============================================
Closing Date to end
of fiscal year 1997 $40,000,000
---------------------------------------------
1998 $35,000,000
---------------------------------------------
1999 $35,000,000
---------------------------------------------
2000 $35,000,000
---------------------------------------------
2001 $35,000,000
---------------------------------------------
2002 $35,000,000
---------------------------------------------
; provided that each of the Maximum Consolidated Capital Expenditure Amounts
--------
provided for above shall be increased by an aggregate amount equal to 15% of the
purchase price paid by Company in connection with any Permitted Acquisition;
provided further that such aggregate amount shall be allocated pro rata among
-------- -------
the remaining periods set forth above after the consummation of the Permitted
Acquisition.
B. In addition to the foregoing, Company may make Consolidated Capital
Expenditures (i) in connection with Permitted Acquisitions, (ii) in connection
with the Chesapeake Transaction, (iii) with the proceeds of Specified Asset
Sales and (iv) committed to be made prior to the Closing Date but made after the
Closing Date, and such Consolidated Capital Expenditures made pursuant to this
subsection 7.8B shall not be included for the purposes of calculating the
Maximum Consolidated Capital Expenditures set forth in subsection 7.8A.
7.9 FISCAL YEAR
-----------
Company shall not change the fiscal year-end of Company and its
Subsidiaries from the last Sunday in December of each calendar year.
7.10 SALES AND LEASE-BACKS.
---------------------
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, become or remain liable as lessee or as a guarantor or
other surety with respect to any lease, whether an Operating Lease or a Capital
Lease, of any property (whether real, personal or mixed), whether now owned or
hereafter acquired, (i) which Company or any of its Subsidiaries has sold or
transferred or is to sell or transfer to any other Person (other than Company or
any of its Subsidiaries) or (ii) which Company or any of its Subsidiaries
intends to use for substantially the same purpose as any other property which
has been or is to be sold or transferred by Company or any of its Subsidiaries
to any Person (other than Company or any of its Subsidiaries) in connection with
such lease; provided that the foregoing shall not apply with respect to (i) any
--------
103
sale leaseback transaction consummated prior to the Closing Date and (ii) any
property acquired after the Closing Date; provided that (y) the sale of such
--------
property constitutes a Specified Asset Sale and (z) the aggregate sale price
paid to the Company with respect to all sales or transfers of such property
shall not exceed $15,000,000.
7.11 SALE OR DISCOUNT OF RECEIVABLES.
-------------------------------
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, sell with recourse, or discount or otherwise sell for
less than the face value thereof, any of its notes or accounts receivable.
7.12 TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES.
---------------------------------------------
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction
(including, without limitation, the purchase, sale, lease or exchange of any
property or the rendering of any service) with any holder of 5% or more of any
class of equity Securities of Company or with any Affiliate of Company or of any
such holder, on terms that are less favorable to Company or that Subsidiary, as
the case may be, than those that might be obtained at the time from Persons who
are not such a holder or Affiliate; provided that the foregoing restriction
--------
shall not apply to (i) any transaction between Company and any of its Wholly
Owned Subsidiaries or between any of its Wholly Owned Subsidiaries, (ii)
reasonable and customary compensation or employee benefit arrangements with any
officer or member of the Board of Directors of Company or any of its
Subsidiaries entered into in the ordinary course of business and consistent with
past practice or (iii) any transactions permitted pursuant to clause (ii) or
(iii) of subsection 7.5 or clauses (vii) and (viii) of subsection 7.3.
7.13 DISPOSAL OF SUBSIDIARY STOCK.
----------------------------
Except for any sale of any Regulatory Shares or 100% of the capital stock
or other equity Securities of any of its Subsidiaries in compliance with the
provisions of subsection 7.7(iv), Company shall not:
(i) directly or indirectly sell, assign, pledge or otherwise encumber
or dispose of any shares of capital stock or other equity Securities of
any of its Subsidiaries, except to qualify directors if required by
applicable law; or
(ii) permit any of its Subsidiaries directly or indirectly to sell,
assign, pledge or otherwise encumber or dispose of any shares of capital
stock or other equity Securities of any of its Subsidiaries (including
such Subsidiary), except to Company, another Subsidiary of Company, or to
qualify directors if required by applicable law.
7.14 CONDUCT OF BUSINESS.
-------------------
From and after the Closing Date, Company shall not, and shall not permit
any of its Subsidiaries to, engage in any business other than (i) the businesses
engaged in by Company and
104
its Subsidiaries on the Closing Date and similar or related businesses or
businesses acquired pursuant to a Permitted Acquisition or otherwise commenced
by Company or its Subsidiaries; provided that any such business other than the
--------
food service business shall be entered into after reasonable notice to the
Lenders and after consultation with the Administrative Agent and (ii) such other
lines of business as may be consented to by Requisite Lenders; provided,
--------
however, that Company will not permit its Subsidiary, AFC Properties, Inc., a
-------
Georgia corporation, to own, purchase, hold, acquire (including by lease or
sublease) any property other than such property it holds as at the Closing Date.
7.15 AMENDMENTS OF DOCUMENTS RELATING TO SUBORDINATED INDEBTEDNESS.
-------------------------------------------------------------
Company shall not, and shall not permit any of its Subsidiaries to, amend
or otherwise change the terms of the Unsecured Subordinated Note Indenture or
the Unsecured Subordinated Notes, or make any payment consistent with an
amendment thereof or change thereto, if the effect of such amendment or change
is to increase the interest rate on the Unsecured Subordinated Notes, change (to
earlier dates) any dates upon which payments of principal or interest are due
thereon, change any event of default or condition to an event of default (other
than to eliminate any such event of default), change the redemption, prepayment
or defeasance provisions thereof, change the subordination provisions thereof
(or of any guaranty thereof), or if the effect of such amendment or change,
together with all other amendments or changes made, is to increase materially
the obligations of the obligor thereunder or to confer any additional rights on
the holders of the Unsecured Subordinated Notes (or a trustee or other
representative on their behalf) which would be adverse to Company or Lenders.
Company shall not designate any Indebtedness as "Designated Senior Indebtedness"
under the terms of the Unsecured Subordinated Note Indenture without the prior
written consent of Administrative Agent and Requisite Lenders.
SECTION 8.
EVENTS OF DEFAULT
If any of the following conditions or events ("EVENTS OF DEFAULT") shall
occur:
8.1 FAILURE TO MAKE PAYMENTS WHEN DUE.
---------------------------------
Failure by Company to pay any installment of principal of any Loan when
due, whether at stated maturity, by acceleration, by notice of voluntary
prepayment, by mandatory prepayment or otherwise; failure by Company to pay when
due any amount payable to an Issuing Lender in reimbursement of any drawing
under a Letter of Credit; or failure by Company to pay any interest, any fee or
any other amount due under this Agreement within five days after the date due;
or
8.2 DEFAULT IN OTHER AGREEMENTS.
---------------------------
(i) Failure of Company or any of its Subsidiaries to pay when due any
principal of or interest on or other amounts (to the extent such other amounts
are in excess of $750,000) owing
105
in respect of on one or more items of Indebtedness (other than Indebtedness
referred to in subsection 8.1) or Contingent Obligations in an individual
principal amount of $750,000 or more or with an aggregate principal amount of
$3,000,000 or more, in each case beyond the end of any grace period provided
therefor; or (ii) breach or default by Company (which breach or default occurs
or continues after the Closing Date) or any of its Subsidiaries with respect to
any other material term of (a) one or more items of Indebtedness or Contingent
Obligations in the individual or aggregate principal amounts referred to in
clause (i) above or (b) any loan agreement, mortgage, indenture or other
agreement relating to such item(s) of Indebtedness or Contingent Obligation(s),
if the effect of such breach or default is to cause, or to permit the holder or
holders of that Indebtedness or Contingent Obligation(s) (or a trustee on behalf
of such holder or holders) to cause, that Indebtedness or Contingent
Obligation(s) to become or be declared due and payable prior to its stated
maturity or the stated maturity of any underlying obligation, as the case may be
(upon the giving or receiving of notice, lapse of time, both, or otherwise); or
8.3 BREACH OF CERTAIN COVENANTS.
---------------------------
Failure of Company to perform or comply with any term or condition
contained in subsection 2.4, 2.5 or 6.2 or Section 7 of this Agreement; or
8.4 BREACH OF WARRANTY.
------------------
Any representation, warranty, certification or other statement made by
Company or any of its Subsidiaries in any Loan Document or in any statement or
certificate at any time given by Company or any of its Subsidiaries in writing
pursuant hereto or thereto or in connection herewith or therewith shall be false
in any material respect on the date as of which made; or
8.5 OTHER DEFAULTS UNDER LOAN DOCUMENTS.
-----------------------------------
Company shall default in the performance of or compliance with any term
contained in this Agreement or any of the other Loan Documents, other than any
such term referred to in any other subsection of this Section 8, and such
default shall not have been remedied or waived within 30 days after the earlier
of (i) an officer of Company becoming aware of such default or (ii) receipt by
Company of notice from Administrative Agent or any Lender of such default; or
8.6 INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
-----------------------------------------------------
(i) A court having jurisdiction in the premises shall enter a decree or
order for relief in respect of Company or any of its Material Subsidiaries in an
involuntary case under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect, which decree
or order is not stayed; or any other similar relief shall be granted under any
applicable federal or state law; or (ii) an involuntary case shall be commenced
against Company or any of its Material Subsidiaries under the Bankruptcy Code or
under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect; or a decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator,
106
sequestrator, trustee, custodian or other officer having similar powers over
Company or any of its Material Subsidiaries, or over all or a substantial part
of its property, shall have been entered; or there shall have occurred the
involuntary appointment of an interim receiver, trustee or other custodian of
Company or any of its Material Subsidiaries for all or a substantial part of its
property; or a warrant of attachment, execution or similar process shall have
been issued against any substantial part of the property of Company or any of
its Material Subsidiaries, and any such event described in this clause (ii)
shall continue for 60 days unless dismissed, bonded or discharged; or
8.7 VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
---------------------------------------------------
(i) Company or any of its Material Subsidiaries shall have an order for
relief entered with respect to it or commence a voluntary case under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar
law now or hereafter in effect, or shall consent to the entry of an order for
relief in an involuntary case, or to the conversion of an involuntary case to a
voluntary case, under any such law, or shall consent to the appointment of or
taking possession by a receiver, trustee or other custodian for all or a
substantial part of its property; or Company or any of its Material Subsidiaries
shall make any assignment for the benefit of creditors; or (ii) Company or any
of its Material Subsidiaries shall be unable, or shall fail generally, or shall
admit in writing its inability, to pay its debts as such debts become due; or
the Board of Directors of Company or any of its Material Subsidiaries (or any
committee thereof) shall adopt any resolution or otherwise authorize any action
to approve any of the actions referred to in clause (i) above or this clause
(ii); or
8.8 JUDGMENTS AND ATTACHMENTS.
-------------------------
Any final money judgment, writ or warrant of attachment or similar process
involving (i) in any individual case an amount in excess of $750,000 or (ii) in
the aggregate at any time an amount in excess of $3,000,000 (in either case not
adequately covered by insurance as to which a solvent and unaffiliated insurance
company has acknowledged coverage) shall be entered or filed against Company or
any of its Subsidiaries or any of their respective assets and shall remain
undischarged, unvacated, unbonded or unstayed for a period of 60 days (or in any
event later than five days prior to the date of any proposed sale thereunder);
or
8.9 DISSOLUTION.
-----------
Any order, judgment or decree shall be entered against Company or any of
its Subsidiaries decreeing the dissolution or split up of Company or that
Subsidiary and such order shall remain undischarged or unstayed for a period in
excess of 30 days; or
8.10 EMPLOYEE BENEFIT PLANS.
----------------------
There shall occur one or more ERISA Events which individually or in the
aggregate results in liability of Company or any of its ERISA Affiliates in
excess of $1,000,000 during the term of this Agreement; or there exists, as of
any valuation date for a Pension Plan, an excess
107
of the actuarial present value (determined on the basis of reasonable
assumptions employed by the independent actuary for such Pension Plan) of
benefit liabilities (as defined in Section 4001(a)(16) of ERISA) over the fair
market value of the assets of such Pension Plan, individually or in the
aggregate for all Pension Plans (excluding for purposes of such computation any
Pension Plans with respect to which there is no such excess) which exceeds
$1,000,000; or
8.11 CHANGE IN CONTROL.
-----------------
There shall occur any of (i) (a) prior to an initial public offering of the
Company Common Stock, Xxxxxxx Xxxxxx & Co. Incorporated and its Affiliates,
XXXXXX Private Equity Fund L.P. and senior management of the Company shall cease
to beneficially own and control in the aggregate at least (1) a majority of the
issued and outstanding shares of capital stock of Company entitled (without
regard to the occurrence of any contingency) to vote for the election of members
of the Board of Directors of Company and (2) more than 50% of the economic
interest in all outstanding capital stock of Company or (b) prior to an initial
public offering of Company Common Stock, Xxxxxxx Xxxxxx & Co. Incorporated and
its Affiliates shall cease to own and control 40% of the economic interest in
all the outstanding capital stock of the Company, or (ii) following an initial
public offering of the Company Common Stock, (1) Xxxxxxx Xxxxxx & Co.
Incorporated and its Affiliates, XXXXXX Private Equity Fund L.P. and senior
management of Company, in the aggregate shall cease to beneficially own and
control at least 35% of the issued and outstanding shares of capital stock of
Company entitled (without regard to the occurrence of any contingency) to vote
for the election of members of the Board of Directors of Company and (2) any
other Person or Persons acting together that would constitute a group (for
purposes of Section 13(d) of the Security Exchange Act of 1934, or any successor
provision thereto), together with any Affiliates thereof, shall beneficially own
35% or more of the aggregate voting power of all classes of capital stock of
Company entitled to vote generally in the election of directors; or (iii) either
(a) any Person or Persons acting together that would constitute a group (for
purposes of Section 13(d) of the Security Exchange Act of 1934, or any successor
provision thereto), together with any Affiliates thereof, shall beneficially own
30% or more of the aggregate voting power of all classes of stock of Company
entitled to vote generally in the election of directors and Xxxxxxx Xxxxxx & Co.
Incorporated and its Affiliates, XXXXXX Private Equity Fund L.P. and senior
management of Company, in the aggregate at such time shall not own and control
more than 30% of the issued and outstanding shares of capital stock of Company
entitled (without regard to the incurrence of any contingency) to vote for the
election of members of the Board of Directors of Company or (b) prior to an
initial public offering, principals or employees of Xxxxxxx Xxxxxx & Co.
Incorporated or its Affiliates shall cease to comprise at least 40% of the Board
of Directors of Company; or (iv) the occurrence of any "Change of Control"
under the Unsecured Subordinated Note Indenture; or
8.12 FAILURE OF SECURITY.
-------------------
Upon or after execution and delivery thereof, any Collateral Document
shall, at any time, cease to be in full force and effect in any material respect
(other than by reason of a release of Collateral thereunder in accordance with
the terms hereof or thereof, the satisfaction in full of the Obligations or any
other termination of such Collateral Document in accordance with the
108
terms hereof or thereof) or shall be declared null and void, or the validity or
enforceability thereof shall be contested in writing by any Loan Party, or the
Administrative Agent shall not have or shall cease to have a valid and perfected
first priority security interest (subject to Permitted Encumbrances) in any
Collateral purported to be covered thereby (other than Collateral the aggregate
fair market value of which does not exceed $750,000), in each case for any
reason other than the failure of Administrative Agent or any Lender to take any
action within its control; or
8.13 INVALIDITY OF SUBSIDIARY GUARANTY.
---------------------------------
Any Subsidiary Guaranty of a Material Subsidiary for any reason other than
the satisfaction in full of all Obligations, ceases to be in full force and
effect or is declared to be null and void, or any Guarantor denies that it has
any further liability, including, without limitation, with respect to future
advances by Lenders, under any such Subsidiary Guaranty or other guarantee or
gives notice to such effect; or
8.14 SUBORDINATION PROVISIONS.
------------------------
Company shall fail to comply with the subordination provisions contained in
the Unsecured Subordinated Note Indenture or the subordination provisions
contained in the Unsecured Subordinated Note Indenture shall be declared null
and void;
THEN (i) upon the occurrence of any Event of Default described in subsection 8.6
or 8.7, each of (a) the unpaid principal amount of and accrued interest on the
Loans, (b) an amount equal to the maximum amount that may at any time be drawn
under all Letters of Credit then outstanding (whether or not any beneficiary
under any such Letter of Credit shall have presented, or shall be entitled at
such time to present, the drafts or other documents or certificates required to
draw under such Letter of Credit), and (c) all other Obligations shall
automatically become immediately due and payable, without presentment, demand,
protest or other requirements of any kind, all of which are hereby expressly
waived by Company, and the obligation of each Lender to make any Loan, the
obligation of Issuing Lender to issue any Letter of Credit shall thereupon
terminate, and (ii) upon the occurrence and during the continuation of any other
Event of Default, Administrative Agent shall, upon the written request or with
the written consent of Requisite Lenders, by written notice to Company, declare
all or any portion of the amounts described in clauses (a) through (c) above to
be, and the same shall forthwith become, immediately due and payable, and the
obligation of each Lender to make any Loan, the obligation of Issuing Lender to
issue any Letter of Credit shall thereupon terminate; provided that the
--------
foregoing shall not affect in any way the obligations of Lenders under
subsection 3.3C(i) or the obligations of Lenders to purchase participations in
any unpaid Swing Line Loans as provided in subsection 2.1A(iv).
Any amounts described in clause (b) above, when received by Administrative
Agent shall be delivered to Administrative Agent and shall be held by
Administrative Agent pursuant to the terms of the Collateral Account Agreement
and shall be applied as therein provided.
109
Notwithstanding anything contained in the second preceding paragraph, if at
any time within 60 days after an acceleration of the Loans pursuant to such
paragraph Company shall pay all arrears of interest and all payments on account
of principal which shall have become due otherwise than as a result of such
acceleration (with interest on principal and, to the extent permitted by law, on
overdue interest, at the rates specified in this Agreement) and all Events of
Default and Potential Events of Default (other than non-payment of the principal
of and accrued interest on the Loans, in each case which is due and payable
solely by virtue of acceleration) shall be remedied or waived pursuant to
subsection 10.6, then Requisite Lenders, by written notice to Company, may at
their option rescind and annul such acceleration and its consequences; but such
action shall not affect any subsequent Event of Default or Potential Event of
Default or impair any right consequent thereon. The provisions of this paragraph
are intended merely to bind Lenders to a decision which may be made at the
election of Requisite Lenders and are not intended to benefit Company and do not
grant Company the right to require Lenders to rescind or annul any acceleration
hereunder or preclude Lenders from exercising any of their rights and remedies
under the Loan Documents, even if the conditions set forth herein are met.
SECTION 9.
AGENTS
9.1 APPOINTMENT.
-----------
GSCP is hereby appointed Arranging Agent and Syndication Agent hereunder
and each Lender hereby authorizes Arranging Agent and Syndication Agent to act
as its agent in accordance with the terms of this Agreement and the other Loan
Documents. CIBC is hereby appointed Administrative Agent hereunder and under
the other Loan Documents and each Lender hereby authorizes Administrative Agent
to act as its agent in accordance with the terms of this Agreement and the other
Loan Documents and the Collateral Documents. Agents agree to act upon the
express conditions contained in this Agreement and the other Loan Documents, as
applicable. The provisions of this Section 9 are solely for the benefit of
Agents and Lenders and Company shall have no rights as a third party beneficiary
of any of the provisions thereof. In performing its functions and duties under
this Agreement, each Agent shall act solely as an agent of Lenders and does not
assume and shall not be deemed to have assumed any obligation towards or
relationship of agency or trust with or for Company or any of its Subsidiaries.
As of the Closing Date, all obligations of Syndication Agent and Arranging Agent
hereunder shall terminate.
9.2 POWERS AND DUTIES; GENERAL IMMUNITY.
-----------------------------------
X. XXXXXX; DUTIES SPECIFIED. Each Lender irrevocably authorizes each of
the Agents to take such action on such Lender's behalf and to exercise such
powers, rights and remedies hereunder and under the other Loan Documents as are
specifically delegated or granted to such Agent by the terms hereof and thereof,
together with such powers, rights and remedies as are reasonably incidental
thereto. Agents shall have only those duties and responsibilities that are
expressly specified in this Agreement and the other Loan Documents. Agents may
each exercise
110
such powers, rights and remedies and perform such duties by or through their
agents or employees. Agents shall not have, by reason of this Agreement or any
of the other Loan Documents, a fiduciary relationship in respect of any Lender;
and nothing in this Agreement or any of the other Loan Documents, expressed or
implied, is intended to or shall be so construed as to impose upon Agents any
obligations in respect of this Agreement or any of the other Loan Documents
except as expressly set forth herein or therein.
B. NO RESPONSIBILITY FOR CERTAIN MATTERS. Agents shall not be
responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectibility or sufficiency of this Agreement or any
other Loan Document or for any representations, warranties, recitals or
statements made herein or therein or made in any written or oral statements or
in any financial or other statements, instruments, reports or certificates or
any other documents furnished or made by Agents to Lenders or by or on behalf of
Company to Agents or any Lender in connection with the Loan Documents and the
transactions contemplated thereby or for the financial condition or business
affairs of Company or any other Person liable for the payment of any
Obligations, nor shall Agents be required to ascertain or inquire as to the
performance or observance of any of the terms, conditions, provisions, covenants
or agreements contained in any of the Loan Documents or as to the use of the
proceeds of the Loans or the use of the Letters of Credit or as to the existence
or possible existence of any Event of Default or Potential Event of Default.
Anything contained in this Agreement to the contrary notwithstanding,
Administrative Agent shall not have any liability arising from confirmations of
the amount of outstanding Loans or the Letter of Credit Usage or the component
amounts thereof.
C. EXCULPATORY PROVISIONS. None of Agents nor any of their respective
officers, directors, partners, employees or agents shall be liable to Lenders
for any action taken or omitted by Agents under or in connection with any of the
Loan Documents except to the extent caused by their respective gross negligence
or willful misconduct. If Agents shall request instructions from Lenders with
respect to any act or action (including the failure to take an action) in
connection with this Agreement or any of the other Loan Documents, Agents shall
be entitled to refrain from such act or taking such action unless and until
Agents shall have received instructions from Requisite Lenders. Without
prejudice to the generality of the foregoing, (i) shall be entitled to rely, and
shall be fully protected in relying, upon any communication, instrument or
document believed by it to be genuine and correct and to have been signed or
sent by the proper person or persons, and shall be entitled to rely and shall be
protected in relying on opinions and judgments of attorneys (who may be
attorneys for Company and its Subsidiaries), accountants, experts and other
professional advisors selected by it; and (ii) no Lender shall have any right of
action whatsoever against any Agent as a result of such Agent acting or (where
so instructed) refraining from acting under this Agreement or any of the other
Loan Documents in accordance with the instructions of Requisite Lenders. Each
Agent shall be entitled to refrain from exercising any power, discretion or
authority vested in it under this Agreement or any of the other Loan Documents
unless and until it has obtained the instructions of Requisite Lenders.
D. AGENTS ENTITLED TO ACT AS LENDERS. The agency hereby created shall in
no way impair or affect any of the rights and powers of, or impose any duties or
obligations upon, any Agent in its individual capacity as a Lender hereunder.
With respect to its participation in the
111
Loans and the Letters of Credit, each Agent shall have the same rights and
powers hereunder as any other Lender and may exercise the same as though it were
not performing the duties and functions delegated to it hereunder, and the term
"Lender" or "Lenders" or any similar term shall, unless the context clearly
otherwise indicates, include each Agent in its individual capacity. Each Agent
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of banking, trust, financial advisory or other business with Company
or any of its Affiliates as if it were not performing the duties specified
herein, and may accept fees and other consideration from Company for services in
connection with this Agreement and otherwise without having to account for the
same to Lenders.
9.3 REPRESENTATIONS AND WARRANTIES; NO RESPONSIBILITY FOR APPRAISAL OF
------------------------------------------------------------------
CREDITWORTHINESS.
----------------
Each Lender represents and warrants that it has made its own independent
investigation of the financial condition and affairs of Company and its
Subsidiaries in connection with the making of the Loans and the issuance of
Letters of Credit hereunder and that it has made and shall continue to make its
own appraisal of the creditworthiness of Company and its Subsidiaries. No Agent
shall have any duty or responsibility, either initially or on a continuing
basis, to make any such investigation or any such appraisal on behalf of Lenders
or to provide any Lender with any credit or other information with respect
thereto, whether coming into its possession before the making of the Loans or at
any time or times thereafter, and no Agent shall have any responsibility with
respect to the accuracy of or the completeness of any information provided to
Lenders.
9.4 RIGHT TO INDEMNITY.
------------------
Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify each Agent (and its respective affiliates and partners), to the extent
that such Agent shall not have been reimbursed by Company, for and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses (including, without limitation, counsel fees
and disbursements) or disbursements of any kind or nature whatsoever which may
be imposed on, incurred by or asserted against such Agent in exercising its
powers, rights and remedies or performing its duties hereunder or under the
other Loan Documents or otherwise in its capacity as Agent, in any way relating
to or arising out of this Agreement or the other Loan Documents; provided that
--------
no Lender shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from any Agent's gross negligence or willful misconduct.
If the amount of any indemnity furnished to any Agent for any purpose shall, in
the opinion of such Agent, be insufficient or become impaired, such Agent may
call for additional indemnity and cease, or not commence, to do the acts
indemnified against until such additional indemnity is furnished.
9.5 COLLATERAL DOCUMENTS.
--------------------
Without limiting the generality of subsection 9.1, each Lender hereby
further authorizes Administrative Agent to enter into the Collateral Documents
as secured party on behalf of and
112
for the benefit of Lenders and agrees to be bound by the terms of each of the
Collateral Documents and the Subsidiary Guaranty; provided that, except as
--------
otherwise provided below, Administrative Agent shall not enter into or consent
to any amendment, modification, termination or waiver of any provision contained
in any Collateral Document and the Subsidiary Guaranty without the prior consent
of Requisite Lenders. Anything contained in any of the Loan Documents to the
contrary notwithstanding, each Lender agrees that no Lender shall have any right
individually to realize upon any of the collateral under any Collateral Document
and the Subsidiary Guaranty, it being understood and agreed that all powers,
rights and remedies under the Collateral Documents and the Subsidiary Guaranty
may be exercised solely by Administrative Agent for the benefit of Lenders in
accordance with the terms thereof. Each Lender hereby authorizes Administrative
Agent (i) to release or subordinate Collateral as permitted or required under
this Agreement or the Collateral Documents and the Subsidiary Guaranty, and
agrees that a certificate executed by Administrative Agent evidencing such
release of Collateral shall be conclusive evidence of such release as to any
third party and (ii) to enter into any amendments of the Collateral Documents
and the Subsidiary Guaranty to cure any ambiguity, defect or inconsistency or to
amend provisions relating to ministerial or administrative matters which do not
materially adversely affect the rights of the Lenders thereunder. In the event
Company receives a notice regarding any Subject Lease (as such term is defined
in the Closing Date Mortgages) pursuant to clause (b) of item (i) of Schedule
--------
5.2F, Administrative Agent shall release the Subject Lease of record from the
----
offending Closing Date Mortgage; provided that the Administrative Agent shall be
--------
satisfied that such landlord or lessor claim specified in such notice is in good
faith.
9.6 SUCCESSOR ADMINISTRATIVE AGENT AND SWING LINE LENDER.
----------------------------------------------------
A. SUCCESSOR ADMINISTRATIVE AGENT. Administrative Agent may resign at
any time by giving 30 days' prior written notice thereof to Lenders and Company,
and Administrative Agent may be removed at any time with or without cause by an
instrument or concurrent instruments in writing delivered to Company and
Administrative Agent, and signed by Requisite Lenders. Upon any such notice of
resignation or any such removal, Requisite Lenders shall have the right, upon
consultation with Company, to appoint a successor Administrative Agent. Upon
the acceptance of any appointment Administrative Agent hereunder by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring or removed Administrative Agent and the retiring or removed
Administrative Agent shall be discharged from its duties and obligations under
this Agreement. After any retiring or removed Administrative Agent's
resignation or removal hereunder as Administrative Agent, the provisions of
this Section 9 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Administrative Agent under this Agreement.
B. SUCCESSOR SWING LINE LENDER. Any resignation or removal of
Administrative Agent pursuant to subsection 9.6A shall also constitute the
resignation or removal of CIBC or its successor as Swing Line Lender, and any
successor Agent appointed pursuant to subsection 9.6A shall, upon its acceptance
of such appointment, become the successor Swing Line Lender for all purposes
hereunder. In such event (i) Company shall prepay any outstanding Swing Line
113
Loans made by the retiring or removed Administrative Agent in its capacity as
Swing Line Lender, (ii) upon such prepayment, the retiring or removed
Administrative Agent and Swing Line Lender shall surrender the Swing Line Note
held by it to Company for cancellation, and (iii) Company shall issue a new
Swing Line Note to the successor Agent and Swing Line Lender substantially in
the form of Exhibit IV-D annexed hereto, in the principal amount of the Swing
------------
Line Loan Commitment then in effect and with other appropriate insertions.
9.7 AGENT AUTHORIZED TO RELEASE SECURITY INTERESTS.
----------------------------------------------
Each Lender hereby further authorizes Administrative Agent to enter into
each Collateral Document as secured party on behalf of and for the benefit of
Lenders and agrees to be bound by the terms of each Collateral Document;
provided that Administrative Agent shall not enter into or consent to any
--------
amendment, modification, termination or waiver of any provision contained in any
Collateral Document without the prior consent of Requisite Lenders; provided
--------
further, however, that, without further written consent or authorization from
------- -------
Requisite Lenders, Administrative Agent may execute any documents or instruments
necessary to effect the release of any asset constituting Collateral from the
Lien of the applicable Collateral Document in the event that such asset is sold
or otherwise disposed of in a transaction effected in accordance with subsection
7.7 (and shall, at the reasonable request of Company execute such documents and
instruments). Anything contained in any of the Loan Documents to the contrary
notwithstanding, each Lender agrees that no Lender shall have any right
individually to realize upon any of the Collateral under any Collateral Document
(including without limitation through the exercise of a right of set-off against
call deposits of such Lender in which any funds on deposit in the Collateral
Account may from time to time be invested), it being understood and agreed that
all rights and remedies under the Collateral Documents may be exercised solely
by Administrative Agent for the benefit of Lenders in accordance with the terms
thereof.
SECTION 10.
MISCELLANEOUS
10.1 ASSIGNMENTS AND PARTICIPATIONS IN LOANS AND LETTERS OF CREDIT.
-------------------------------------------------------------
A. GENERAL. Each Lender shall have the right at any time to (i) subject
to Section 10.1B, sell, assign or transfer to any Eligible Assignee, or (ii)
sell participations to any Person in, all or any part of its Commitments or any
Loan or Loans made by it or its Letters of Credit or participations therein or
any other interest herein or in any other Obligations owed to it; provided that
--------
no such sale, assignment, transfer or participation shall, without the consent
of Company, require Company to file a registration statement with the Securities
and Exchange Commission or apply to qualify such sale, assignment, transfer or
participation under the securities laws of any state; provided, further that no
-------- -------
such sale, assignment or transfer described in clause (i) above shall be
effective unless and until an Assignment Agreement effecting such sale,
assignment or transfer shall have been accepted by Administrative Agent and
recorded in the Register as provided in subsection 10.1B(ii); provided, further
-------- -------
that no such sale, assignment, transfer or participation of any Letter of Credit
or any participation therein may be made
114
separately from a sale, assignment, transfer or participation of a corresponding
interest in the Revolving Loan Commitment and the Revolving Loans of the Lender
effecting such sale, assignment, transfer or participation and provided, further
-------- -------
that, anything contained herein to the contrary notwithstanding, the Swing Line
Loan Commitment and the Swing Line Loans of Swing Line Lender may not be sold,
assigned or transferred as described in clause (i) above to any Person other
than a successor Agent and Swing Line Lender to the extent contemplated by
subsection 9.6. Except as otherwise provided in this subsection 10.1, no Lender
shall, as between Company and such Lender, be relieved of any of its obligations
hereunder as a result of any sale, assignment or transfer of, or any granting of
participations in, all or any part of its Commitments or the Loans, the Letters
of Credit or participations therein, or the other Obligations owed to such
Lender.
B. ASSIGNMENTS.
(i) Amounts and Terms of Assignments. Each Commitment, Loan, Letter
--------------------------------
of Credit or participation therein, or other Obligation may (a) be assigned
in any amount to another Lender, or to an Affiliate of the assigning Lender
(provided such Affiliate can reasonably be expected to be able to perform
its obligations hereunder) or another Lender, with the giving of notice to
Company and Administrative Agent or (b) be assigned in an aggregate amount
of not less than $5,000,000 (or such lesser amount as shall constitute the
aggregate amount of the Commitments, Loans, Letters of Credit and
participations therein, and other Obligations of the assigning Lender) to
any other Eligible Assignee with the giving of notice to Company and with
the consent of Company and Administrative Agent (which consent of Company
and Administrative Agent shall not be unreasonably withheld). To the
extent of any such assignment in accordance with either clause (a) or (b)
above, the assigning Lender shall be relieved of its obligations with
respect to its Commitments, Loans, Letters of Credit or participations
therein, or other Obligations or the portion thereof so assigned. The
parties to each such assignment shall execute and deliver to Administrative
Agent, for its acceptance and recording in the Register, an Assignment
Agreement, together with an assignment processing and recordation fee of
$3,000 and such forms, certificates or other evidence, if any, with respect
to United States federal income tax withholding matters as the assignee
under such Assignment Agreement may be required to deliver to
Administrative Agent pursuant to subsection 2.7B(iii)(a); provided,
--------
however, that such assignment processing and recordation fee shall not be
-------
required where the assignee is an Affiliate of the assignor. Upon such
execution, delivery, and acceptance and recordation, from and after the
effective date specified in such Assignment Agreement, (1) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment
Agreement, shall have the rights and obligations of a Lender hereunder and
(2) the assigning Lender thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment
Agreement, relinquish its rights and be released from its obligations under
this Agreement (and, in the case of an Assignment Agreement covering all or
the remaining portion of an assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto; provided
--------
that, anything contained in any of the Loan Documents to the contrary
115
notwithstanding, (x) the assigning Lender shall continue to be entitled to
the benefits of subsection 2.7, 3.5A, 3.6, 6.9 and 10.3 hereof subsequent
to the effectiveness of such assignment and (y) if such Lender is the
Issuing Lender with respect to any outstanding Letters of Credit such
Lender shall continue to have all rights and obligations of an Issuing
Lender with respect to such Letters of Credit until the cancellation or
expiration of such Letters of Credit and the reimbursement of any amounts
drawn thereunder). The Commitments hereunder shall be modified to reflect
the Commitment of such assignee and any remaining Commitment of such
assigning Lender and, if any such assignment occurs after the issuance of
the Notes hereunder, the assigning Lender shall, upon the effectiveness of
such assignment or as promptly thereafter as practicable, surrender its
applicable Notes to Administrative Agent for cancellation, and thereupon
new Notes shall be issued to the assignee and or to the assigning Lender,
substantially in the form of Exhibit IV-A, Exhibit IV-B or Exhibit IV-C
------------ ------------ ------------
annexed hereto, as the case may be, with appropriate insertions, to reflect
the new Commitments and/or outstanding Loans as the case may be, of the
assignee and/or the assigning Lender.
(ii) Acceptance by Administrative Agent; Recordation in Register.
-----------------------------------------------------------
Upon its receipt of an Assignment Agreement executed by an assigning Lender
and an assignee representing that it is an Eligible Assignee, together with
the assignment processing and recordation fee referred to in subsection
10.1B(i) and any forms, certificates or other evidence with respect to
United States federal income tax withholding matters that such assignee may
be required to deliver to Administrative Agent pursuant to subsection
2.7B(iii)(a), Administrative Agent shall, if Administrative Agent and
Company have consented to the assignment evidenced thereby (in each case to
the extent such consent is required pursuant to subsection 10.1B(i)), (a)
accept such Assignment Agreement by executing a counterpart thereof as
provided therein (which acceptance shall evidence any required consent of
Administrative Agent to such assignment), (b) record the information
contained therein in the Register, and (c) give prompt notice thereof to
Company. Administrative Agent shall maintain a copy of each Assignment
Agreement delivered to and accepted by it as provided in this subsection
10.1B(ii).
(iii) Representation of Lenders. Each Lender initially party to this
-------------------------
Agreement hereby represents, and each Person that becomes a Lender pursuant
to an assignment permitted by this subsection 10.1B upon its becoming a
Lender under this Agreement shall be deemed to represent, that it is a
commercial lender, other financial institution or other "accredited
investor" (as defined in Regulation D under the Securities Act) which
makes loans in the ordinary course of its business and is acquiring the
Loans without a view to distribution of the Loans within the meaning of the
federal securities laws, and that it will make or acquire Loans for its own
account in the ordinary course of such business; provided that, subject to
--------
the provisions of this subsection 10.1, the disposition of any promissory
notes or other evidences of or interests in Indebtedness held by such
Lender shall at all times be within its exclusive control.
C. PARTICIPATIONS. The holder of any participation, other than an
Affiliate of the Lender granting such participation, shall not be entitled to
require such Lender to take or omit
116
to take any action hereunder except action directly affecting (i) the extension
of the final maturity of the principal amount of any Loan or Commitment or
interest on any Loan allocated to such participation or (ii) a reduction of the
principal amount of or the rate of interest payable on any Loan allocated to
such participation or (iii) or the release of all or substantially all of the
Collateral other than in accordance with the terms of the Loan Documents, and
all amounts payable by Company hereunder (including without limitation amounts
payable to such Lender pursuant to subsections 2.6D, 2.7 and 3.6) shall be
determined as if such Lender had not sold such participation. Company and each
Lender hereby acknowledge and agree that, solely for purposes of subsections
10.4 and 10.5, (a) any participation will give rise to a direct obligation of
Company to the participant and (b) the participant shall be considered to be a
"Lender".
D. ASSIGNMENTS TO FEDERAL RESERVE BANKS. In addition to the assignments
and participations permitted under the foregoing provisions of this subsection
10.1, any Lender may assign and pledge all or any portion of its Loans, the
other Obligations owed to such Lender, and its Notes to any Federal Reserve Bank
as collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any operating circular issued by such Federal Reserve
Bank; provided that (i) no Lender shall, as between Company and such Lender, be
--------
relieved of any of its obligations hereunder as a result of any such assignment
and pledge and (ii) in no event shall such Federal Reserve Bank be considered to
be a "Lender" or be entitled to require the assigning Lender to take or omit
to take any action hereunder.
E. INFORMATION. Each Lender may furnish any information concerning
Company and its Subsidiaries in the possession of that Lender from time to time
to assignees and participants (including prospective assignees and
participants), subject to subsection 10.19.
10.2 EXPENSES.
--------
Whether or not the transactions contemplated hereby shall be consummated,
Company agrees to pay promptly (i) all the actual and reasonable costs and
expenses of preparation of the Loan Documents and any consents, amendments,
waivers or other modifications thereto; (ii) all the costs of furnishing all
opinions by counsel for Company (including without limitation any opinions
requested by Lenders as to any legal matters arising hereunder) and of Company's
performance of and compliance with all agreements and conditions on its part to
be performed or complied with under this Agreement and the other Loan Documents
including, without limitation, with respect to confirming compliance with
environmental and insurance requirements; (iii) the reasonable fees, expenses
and disbursements of counsel to Agents (including allocated costs of internal
counsel) in connection with the negotiation, preparation, execution and
administration of the Loan Documents and any consents, amendments, waivers or
other modifications thereto and any other documents or matters requested by
Company; (iv) all other actual and reasonable costs and expenses (including
reasonable fees and expenses of counsel) incurred by Syndication Agent and
Administrative Agent in connection with the syndication of the Commitments and
the negotiation, preparation and execution of the Loan Documents and any
consents, amendments, waivers or other modifications thereto and the
transactions contemplated thereby; (v) the reasonable costs of customary audits
conducted by Administrative Agent; and (vi) after the occurrence of an Event of
Default, all costs and expenses, including reasonable
117
attorneys' fees (including allocated costs of internal counsel) and costs of
settlement, incurred by Administrative Agent and Lenders in enforcing any
Obligations of or in collecting any payments due from Company hereunder or under
the other Loan Documents by reason of such Event of Default (including, without
limitation, in connection with the sale of, collection from, or other
realization upon any of the Collateral or the enforcement of the Subsidiary
Guaranty) or in connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement in the nature of a "work-out" or
pursuant to any insolvency or bankruptcy proceedings.
10.3 INDEMNITY.
---------
In addition to the payment of expenses pursuant to subsection 10.2, whether
or not the transactions contemplated hereby shall be consummated, Company agrees
to defend (subject to Indemnitee's selection of counsel), indemnify, pay and
hold harmless Syndication Agent, Arranging Agent, Administrative Agent and
Lenders, and the officers, directors, partners, employees, agents and affiliates
of Syndication Agent, Administrative Agent, Arranging Agent and Lenders
(collectively called the "INDEMNITEES") from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, expenses and disbursements of any kind or nature whatsoever
(including without limitation the reasonable fees and disbursements of counsel
for such Indemnitees in connection with any investigative, administrative or
judicial proceeding commenced or threatened by any Person, whether or not any
such Indemnitee shall be designated as a party or a potential party thereto),
whether direct, indirect or consequential and whether based on any federal,
state or foreign laws, statutes, rules or regulations (including without
limitation securities and commercial laws, statutes, rules or regulations and
Environmental Laws), on common law or equitable cause or on contract or
otherwise, that may be imposed on, incurred by, or asserted against any such
Indemnitee, in any manner relating to or arising out of this Agreement or the
other Loan Documents or the transactions contemplated hereby or thereby
(including without limitation Lenders' agreement to make the Loans hereunder or
the use or intended use of the proceeds of any of the Loans or the issuance of
Letters of Credit hereunder or the use or intended use of any of the Letters of
Credit hereunder or the use or intended use thereof, or any enforcement of any
of the Loan Documents (including any sale of, collection from, or other
realization upon any of the Collateral or the enforcement of the Subsidiary
Guaranty)) (collectively called the "INDEMNIFIED LIABILITIES"); provided that
--------
Company shall not have any obligation to any Indemnitee hereunder with respect
to any Indemnified Liabilities to the extent such Indemnified Liabilities arise
solely from the gross negligence or willful misconduct of that Indemnitee as
determined by a final judgment of a court of competent jurisdiction; and
provided, further, that if any Indemnified Environmental Claim arising after the
-------- -------
Cut-off Date shall be covered by the indemnity set forth in this subsection 10.3
only if it arises out of or as a result of: (i) the occurrence, at any time
prior to the Cut-off Date, of any use, storage, holding, existence, or Release
of any Hazardous Materials whether currently known or unknown; (ii) any use,
storage, holding, existence of Release of any Hazardous Materials that Company
or any of its Subsidiaries caused or contributed to directly or indirectly at
any time whether currently known or unknown; (iii) any violation, prior to the
Cut-off Date, of any applicable Environmental Laws relating to any Facility or
to the ownership, use, occupancy or operation thereof; (iv) any investigation,
inquiry, order, hearing, action or other
118
proceeding by or before any governmental authority in connection with any use,
storage, holding, existence, or Release of any Hazardous Materials prior to the
Cut-off Date whether currently known or unknown; or (v) the inaccuracy or breach
of any representation or warranty set forth in any loan document. To the extent
that the undertaking to defend, indemnify, pay and hold harmless set forth in
the preceding sentence may be unenforceable because it is violative of any law
or public policy, Company shall contribute the maximum portion that it is
permitted to pay and satisfy under applicable law to the payment and satis
faction of all Indemnified Liabilities incurred by the Indemnitees or any of
them.
10.4 SET-OFF; SECURITY INTEREST IN DEPOSIT ACCOUNTS.
----------------------------------------------
In addition to any rights now or hereafter granted under applicable law and
not by way of limitation of any such rights, upon the occurrence of any Event of
Default each Lender is hereby authorized by Company at any time or from time to
time subject to the consent of Administrative Agent, without notice to Company
or to any other Person (other than Administrative Agent), any such notice being
hereby expressly waived, to set off and to appropriate and to apply any and all
deposits (general or special, including, but not limited to, Indebtedness
evidenced by certificates of deposit, whether matured or unmatured, but not
including trust accounts) and any other Indebtedness at any time held or owing
by that Lender to or for the credit or the account of Company against and on
account of the obligations and liabilities of Company to that Lender under this
Agreement, the Letters of Credit and participations therein and the other Loan
Documents, including, but not limited to, all claims of any nature or
description arising out of or connected with this Agreement, the Letters of
Credit and participations therein or any other Loan Document, irrespective of
whether or not (i) that Lender shall have made any demand hereunder or (ii) the
principal of or the interest on the Loans or any amounts in respect of the
Letters of Credit or any other amounts due hereunder shall have become due and
payable pursuant to Section 8 and although said obligations and liabilities, or
any of them, may be contingent or unmatured. Company hereby further assigns,
pledges and grants to Administrative Agent and each Lender a security interest
in all deposits and accounts maintained with Administrative Agent or such Lender
as security for the Obligations.
10.5 RATABLE SHARING.
---------------
Lenders hereby agree among themselves that if any of them shall, whether by
voluntary payment (excluding voluntary payments made and applied in accordance
with this Agreement), by realization upon security, through the exercise of any
right of set-off or banker's lien, by counterclaim or cross action or by the
enforcement of any right under the Loan Documents or otherwise, or as adequate
protection of a deposit treated as cash collateral under the Bankruptcy Code,
receive payment or reduction of a proportion of the aggregate amount of
principal, interest, amounts payable in respect of Letters of Credit, fees and
other amounts then due and owing to that Lender hereunder or under the other
Loan Documents (collectively, the "AGGREGATE AMOUNTS DUE" to such Lender)
which is greater than the proportion received by any other Lender in respect of
the Aggregate Amounts Due to such other Lender, then the Lender receiving such
proportionately greater payment shall (i) notify Administrative Agent and each
other Lender of the receipt of such payment and (ii) apply a portion of such
payment to purchase participations
119
or other interests (which it shall be deemed to have purchased from each seller
of a participation or other interests simultaneously upon the receipt by such
seller of its portion of such payment) in the Aggregate Amounts Due to the other
Lenders so that all such recoveries of Aggregate Amounts Due shall be shared by
all Lenders in proportion to the Aggregate Amounts Due to them; provided that if
--------
all or part of such proportionately greater payment received by such purchasing
Lender is thereafter recovered from such Lender upon the bankruptcy or
reorganization of Company or otherwise, those purchases shall be rescinded and
the purchase prices paid for such participations or other interests shall be
returned to such purchasing Lender ratably to the extent of such recovery, but
without interest. Company expressly consents to the foregoing arrangement and
agrees that any holder of a participation or other interests so purchased may
exercise any and all rights of banker's lien, set-off or counterclaim with
respect to any and all monies owing by Company to that holder with respect
thereto as fully as if that holder were owed the amount of the participation or
other interests held by that holder.
10.6 AMENDMENTS AND WAIVERS.
----------------------
No amendment, modification, termination or waiver of any provision of this
Agreement, the Notes or the Collateral Documents, and no consent to any
departure by Company therefrom, shall in any event be effective without the
written concurrence of Requisite Lenders; provided that any such amendment,
--------
modification, termination, waiver or consent which: increases the amount of any
of the Commitments or reduces the principal amount of any of the Loans; changes
any Lender's Pro Rata Share; changes in any manner the definition of "Requisite
Lenders"; changes in any manner any provision of this Agreement which, by its
terms, expressly requires the approval or concurrence of all Lenders; postpones
the scheduled final maturity date of any of the Loans; postpones the date on
which any interest or any fees are payable; decreases the interest rate borne by
any of the Loans (other than any waiver of any increase in the interest rate
applicable to any of the Loans pursuant to subsection 2.2I) or the amount of any
fees payable hereunder; increases the maximum duration of Interest Periods
permitted hereunder; reduces the amount or postpones the due date of any amount
payable in respect of, or extends the required expiration date of, any Letter of
Credit; changes in any manner the obligations of Lenders relating to the
purchase of participations in Letters of Credit; releases the Liens granted in
favor of Administrative Agent with respect to any material portion of the
Collateral other than in accordance with the terms of the Loan Documents;
releases any guaranty of the Obligations; or changes in any manner the
provisions contained in subsection 8.1 or this subsection 10.6 shall be
effective only if evidenced by a writing signed by or on behalf of all Lenders.
In addition, (i) any amendment, modification, termination or waiver of any of
the provisions contained in Section 4 shall be effective only if evidenced by a
writing signed by or on behalf of Administrative Agent and Requisite Lenders,
(ii) no amendment, modification, termination or waiver of any provision of any
Note shall be effective without the written concurrence of the Lender which is
the holder of that Note, (iii) no amendment, modification, termination or waiver
of any provision of Section 3 shall be effective without the written concurrence
of Issuing Lender, (iv) no amendment, modification, termination or waiver of any
provision of subsection 2.1A (iv) or of any other provision of this Agreement
relating to the Swing Line Loan Commitment or the Swing Line Loans shall be
effective without the written concurrence of Swing Line Lender, and (v) no
amendment, modification, termination or waiver of any provision of Section 9 or
of any other
120
provision of this Agreement which, by its terms, expressly requires the approval
or concurrence of Arranging Agent or Administrative Agent shall be effective
without the written concurrence of Arranging Agent or Administrative Agent
respectively. Administrative Agent may, but shall have no obligation to, with
the concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of that Lender. Any waiver or consent shall be effective only
in the specific instance and for the specific purpose for which it was given. No
notice to or demand on Company in any case shall entitle Company to any other or
further notice or demand in similar or other circumstances. Any amendment,
modification, termination, waiver or consent effected in accordance with this
subsection 10.6 shall be binding upon each Lender at the time outstanding, each
future Lender and, if signed by Company, on Company.
10.7 INDEPENDENCE OF COVENANTS.
-------------------------
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is taken or condition
exists.
10.8 NOTICES.
-------
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telexed or sent by telefacsimile or United States mail
or courier service and shall be deemed to have been given when delivered in
person or by courier service, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage prepaid
and properly addressed; provided that notices to Administrative Agent shall not
--------
be effective until received. For the purposes hereof, the address of each party
hereto shall be as set forth under such party's name on the signature pages
hereof or (i) as to Company and Administrative Agent, such other address as
shall be designated by such Person in a written notice delivered to the other
parties hereto and (ii) as to each other party, such other address as shall be
designated by such party in a written notice delivered to Administrative Agent.
10.9 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
------------------------------------------------------
A. All representations, warranties and agreements made herein shall
survive the execution and delivery of this Agreement and the making of the Loans
and the issuance of the Letters of Credit hereunder.
B. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements of Company set forth in subsections 2.6D, 2.7, 3.5A,
3.6, 6.9, 10.2, 10.3 and 10.4 and the agreements of Lenders set forth in
subsections 9.2C, 9.4 and 10.5 shall survive the payment of the Loans, the
cancellation or expiration of the Letters of Credit and the reimbursement of any
amounts drawn thereunder, and the termination of this Agreement.
121
10.10 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
-----------------------------------------------------
No failure or delay on the part of Administrative Agent or any Lender in
the exercise of any power, right or privilege hereunder or under any other Loan
Document shall impair such power, right or privilege or be construed to be a
waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise available.
10.11 MARSHALLING; PAYMENTS SET ASIDE.
-------------------------------
Neither Administrative Agent nor any Lender shall be under any obligation
to marshal any assets in favor of Company or any other party or against or in
payment of any or all of the Obligations. To the extent that Company makes a
payment or payments to Administrative Agent or Lenders (or to Administrative
Agent for the benefit of Lenders), or Administrative Agent or Lenders enforce
any security interests or exercise their rights of setoff, and such payment or
payments or the proceeds of such enforcement or setoff or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, any other state or federal law, common law or any equitable
cause, then, to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied, and all Liens, rights and remedies therefor
or related thereto, shall be revived and continued in full force and effect as
if such payment or payments had not been made or such enforcement or setoff had
not occurred.
10.12 SEVERABILITY.
------------
In case any provision in or obligation under this Agreement or the Notes
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
10.13 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS.
----------------------------------------------------------
The obligations of Lenders hereunder are several and no Lender shall be
responsible for the obligations or Commitments of any other Lender hereunder.
Nothing contained herein or in any other Loan Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out of this Agreement and it shall not be necessary for any other
Lender to be joined as an additional party in any proceeding for such purpose.
122
10.14 HEADINGS.
--------
Section and subsection headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.
10.15 APPLICABLE LAW.
--------------
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
10.16 SUCCESSORS AND ASSIGNS.
----------------------
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of Lenders (it being understood that
Lenders' rights of assignment are subject to subsection 10.1). Neither
Company's rights or obligations hereunder nor any interest therein may be
assigned or delegated by Company without the prior written consent of all
Lenders.
10.17 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
----------------------------------------------
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST COMPANY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY OBLIGATION MAY BE BROUGHT IN
ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF NEW YORK,
AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT COMPANY ACCEPTS FOR ITSELF AND
IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED
THEREBY IN CONNECTION WITH THIS AGREEMENT, SUCH OTHER LOAN DOCUMENT OR SUCH
OBLIGATION. Company hereby agrees that service of all process in any such
proceeding in any such court may be made by registered or certified mail, return
receipt requested, to Company at its address provided in subsection 10.8, such
service being hereby acknowledged by Company to be sufficient for personal
jurisdiction in any action against Company in any such court and to be otherwise
effective and binding service in every respect. Nothing herein shall affect the
right to serve process in any other manner permitted by law or shall limit the
right of any Lender to bring proceedings against Company in the courts of any
other jurisdiction.
123
10.18 WAIVER OF JURY TRIAL.
--------------------
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS BETWEEN
THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/COMPANY RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this waiver
is intended to be all-encompassing of any and all disputes that may be filed in
any court and that relate to the subject matter of this transaction, including
without limitation contract claims, tort claims, breach of duty claims and all
other common law and statutory claims. Each party hereto acknowledges that this
waiver is a material inducement to enter into a business relationship, that each
has already relied on this waiver in entering into this Agreement, and that each
will continue to rely on this waiver in their related future dealings. Each
party hereto further warrants and represents that it has reviewed this waiver
with its legal counsel and that it knowingly and voluntarily waives its jury
trial rights following consultation with legal counsel. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING
(OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION
10.18 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY
TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR
AGREEMENTS RELATING TO THE LOANS MADE HEREUNDER. In the event of litigation,
this Agreement may be filed as a written consent to a trial by the court.
10.19 CONFIDENTIALITY.
---------------
Each Lender shall hold all non-public information obtained pursuant to the
requirements of this Agreement which has been identified as confidential by
Company in accordance with such Lender's customary procedures for handling
confidential information of this nature, it being understood and agreed by
Company that in any event a Lender may make disclosures to their examiners,
outside auditors, counsel and other professional advisors, Affiliates of such
Lender or, provided it agrees to the confidentiality obligations set forth
herein, disclosures reasonably required by any bona fide assignee, transferee or
participant in connection with the contemplated assignment or transfer by such
Lender of any Loans or any sale of participations therein or disclosures
required or requested by any governmental agency or representative thereof or
pursuant to legal process; provided that, unless specifically prohibited by
--------
applicable law or court order, each Lender shall notify Company of any request
by any governmental agency or representative thereof (other than any such
request in connection with any examination of the financial condition of such
Lender by such governmental agency) for disclosure of any such non-public
information prior to disclosure of such information; and provided, further that
-------- -------
in no event shall any Lender be obligated or required to return any materials
furnished by Company or any of its Subsidiaries.
124
10.20 MAXIMUM AMOUNT.
--------------
A. It is the intention of Company and Lenders to conform strictly to the
usury and similar laws relating to interest from time to time in force, and all
agreements between Company, Administrative Agent and Lenders, whether now
existing or hereafter arising and whether oral or written, are hereby expressly
limited so that in no contingency or event whatsoever, whether by acceleration
of maturity hereof or otherwise, shall the amount paid or agreed to be paid in
the aggregate to Lenders or to Administrative Agent on behalf of Lenders as
interest hereunder or under the other Loan Documents or in any other security
agreement given to secure the Obligations, or in any other document evidencing,
securing or pertaining to the indebtedness evidenced hereby or thereby, exceed
the maximum amount permissible under applicable usury or such other laws (the
"MAXIMUM AMOUNT"). If under any circumstances whatsoever fulfillment of any
provision hereof, or of any of the other Loan Documents, at the time performance
of such provision shall be due, shall involve exceeding the Maximum Amount,
then, ipso facto, the obligation to be fulfilled shall be reduced to the Maximum
---- -----
Amount. For the purposes of calculating the actual amount of interest paid
and/or payable hereunder in respect of laws pertaining to usury or such other
laws, all sums paid or agreed to be paid to the holder hereof for the use,
forbearance or detention of the indebtedness of Company evidenced hereby,
outstanding from time to time shall, to the extent permitted by applicable law,
be amortized, pro rated, allocated and spread from the date of disbursement of
the proceeds of the Loans until payment in full of all of such indebtedness, so
that the actual rate of interest on account of such indebtedness is uniform
throughout the term hereof. The terms and provisions of this subsection shall
control and supersede every other provision of all agreements between Company,
the Administrative Agent and the Lenders.
B. If under any circumstances Lenders shall receive an amount which would
exceed the Maximum Amount, such amount shall be deemed a payment in reduction of
the principal amount of the Loans and shall be treated as a voluntary prepayment
under subsection 2.4B(i), and shall be so applied in accordance with subsection
2.4B(iv) hereof, or if such amount exceeds the unpaid balance of the Loans and
any other indebtedness of Company in favor of Lenders, the excess shall be
deemed to have been a payment made by mistake and shall be refunded to Company.
10.21 COUNTERPARTS; EFFECTIVENESS.
---------------------------
This Agreement and any amendments, waivers, consents or supplements hereto
or in connection herewith may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This
125
Agreement shall become effective upon the execution of a counterpart hereof by
each of the parties hereto and receipt by Company and Administrative Agent of
written or telephonic notification of such execution and authorization of
delivery thereof.
[Remainder of page intentionally left blank]
126
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
COMPANY:
AFC ENTERPRISES, INC.
By: Xxxxxx Xxxxxxx
--------------------------------
Xxxxxx Xxxxxxx
Chief Financial Officer
Notice Address:
AFC Enterprises, Inc.
Suite 0000
Xxx Xxxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxxx Xxxxxxx
Chief Financial Officer
with copies to:
Xxxxxx X. Xxxxxxx, Esq.
General Counsel
AFC Enterprises, Inc.
Suite 0000
Xxx Xxxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx 00000
S-1
SYNDICATION AGENT: XXXXXXX XXXXX CREDIT PARTNERS L.P.,
individually as a Lender and as Syndication Agent
and Arranging Agent
By: /s/
______________________________________________
Authorized Signatory
Notice Address:
Xxxxxxx Sachs Credit Partners L.P.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxx
S-2
CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent
By: /s/ Xxxxxxxx Xxxx
---------------------------------
Xxxxxxxx Xxxx
Authorized Signatory
Notice Address:
Canadian Imperial Bank of Commerce
Agency Services
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxx
Tel: 000 000-0000
Fax: 000 000-0000
S-3
CIBC INC.
as a Lender
By: /s/ Xxxxxxxx Xxxx
_____________________________
Xxxxxxxx Xxxx
Authorized Signatory
Notice Address:
0000 Xxxxx Xxxxx Xxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxx
Director
