EXHIBIT 10.23
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Credit Agreement
Dated as of December 15, 2000
between
California Pizza Kitchen, Inc.
and
Bank of America, N.A.,
Bank of America [LOGO]
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TABLE OF CONTENTS
Section Page
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Section 1. DEFINITIONS AND ACCOUNTING TERMS.......................................................................1
1.01 Defined Terms...................................................................................1
1.02 Use of Certain Terms...........................................................................17
1.03 Accounting Terms...............................................................................17
1.04 Rounding.......................................................................................18
1.05 Exhibits and Schedules.........................................................................18
1.06 References to Agreements and Laws..............................................................18
Section 2. THE COMMITMENT AND EXTENSIONS OF CREDIT...............................................................18
2.01 Amount and Terms of Commitment.................................................................18
2.02 Borrowings, Conversions and Continuations of Loans.............................................18
2.03 Letters of Credit..............................................................................19
2.04 Prepayments....................................................................................22
2.05 Reduction or Termination of Commitment.........................................................23
2.06 Principal and Interest.........................................................................23
2.07 Commitment Fee.................................................................................23
2.08 Computation of Interest and Fees...............................................................24
2.09 Making Payments................................................................................24
2.10 Funding Sources................................................................................24
2.11 Master Subsidiary Guaranty.....................................................................24
Section 3. TAXES, YIELD PROTECTION AND ILLEGALITY................................................................24
3.01 Taxes..........................................................................................24
3.02 Illegality.....................................................................................25
3.03 Inability to Determine Rates...................................................................26
3.04 Increased Cost and Reduced Return; Capital Adequacy............................................26
3.05 Breakfunding Costs.............................................................................27
3.06 Matters Applicable to all Requests for Compensation............................................27
3.07 Survival.......................................................................................28
Section 4. CONDITIONS PRECEDENT TO EXTENSIONS OF CREDIT..........................................................28
4.01 Conditions of Initial Extension of Credit......................................................28
4.02 Conditions to all Extensions of Credit.........................................................29
Section 5. REPRESENTATIONS AND WARRANTIES........................................................................30
5.01 Existence and Qualification; Power; Compliance with Laws.......................................30
5.02 Power; Authorization; Enforceable Obligations..................................................30
5.03 No Legal Bar...................................................................................30
5.04 Financial Statements; No Material Adverse Effect...............................................31
5.05 Litigation.....................................................................................31
5.06 No Default.....................................................................................31
5.07 Ownership of Property; Liens...................................................................31
5.08 Taxes..........................................................................................31
5.09 Margin Regulations; Investment Company Act; Public Utility Holding Company Act.................32
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5.10 No ERISA Plans.................................................................................32
5.11 Intangible Assets..............................................................................32
5.12 Compliance With Laws...........................................................................32
5.13 Environmental Compliance.......................................................................32
5.14 Insurance......................................................................................32
5.15 Subsidiaries...................................................................................33
5.16 Disclosure.....................................................................................33
Section 6. AFFIRMATIVE COVENANTS.................................................................................33
6.01 Financial Statements...........................................................................33
6.02 Certificates, Notices and Other Information....................................................34
6.03 Payment of Taxes...............................................................................35
6.04 Preservation of Existence......................................................................35
6.05 Maintenance of Properties......................................................................35
6.06 Maintenance of Insurance.......................................................................35
6.07 Compliance With Laws...........................................................................35
6.08 Inspection Rights..............................................................................35
6.09 Keeping of Records and Books of Account........................................................36
6.10 Compliance With Agreements.....................................................................36
6.11 Use of Proceeds................................................................................36
6.12 Additional Guarantors..........................................................................36
Section 7. NEGATIVE COVENANTS....................................................................................37
7.01 Indebtedness...................................................................................37
7.02 Liens and Negative Pledges.....................................................................37
7.03 Fundamental Changes............................................................................38
7.04 Dispositions...................................................................................38
7.05 Investments....................................................................................38
7.06 Lease Obligations..............................................................................38
7.07 Restricted Payments............................................................................39
7.08 ERISA..........................................................................................39
7.09 Change in Nature of Business...................................................................39
7.10 Transactions with Affiliates...................................................................39
7.11 Financial Covenants............................................................................39
7.12 Change in Auditors.............................................................................39
Section 8. EVENTS OF DEFAULT AND REMEDIES........................................................................40
8.01 Events of Default..............................................................................40
8.02 Remedies Upon Event of Default.................................................................41
Section 9. MISCELLANEOUS.........................................................................................42
9.01 Amendments; Consents...........................................................................42
9.02 Transmission and Effectiveness of Communications and Signatures................................43
9.03 Attorney Costs, Expenses and Taxes.............................................................43
9.04 Successors and Assigns; Participations.........................................................44
9.05 Set-off........................................................................................45
9.06 No Waiver; Cumulative Remedies.................................................................45
9.07 Usury..........................................................................................45
9.08 Counterparts...................................................................................46
9.09 Integration....................................................................................46
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9.10 Nature of Lender's Obligations.................................................................46
9.11 Survival of Representations and Warranties.....................................................46
9.12 Indemnity by Borrower..........................................................................46
9.13 Nonliability of Lender.........................................................................47
9.14 No Third Parties Benefited.....................................................................47
9.15 Severability...................................................................................48
9.16 Confidentiality................................................................................48
9.17 Further Assurances.............................................................................48
9.18 Headings.......................................................................................49
9.19 Time of the Essence............................................................................49
9.20 Governing Law..................................................................................49
9.21 Waiver of Right to Trial by Jury...............................................................49
9.22 Entire Agreement...............................................................................49
EXHIBITS
Form of
A Request for Extension of Credit
B Compliance Certificate
C Note
D Master Subsidiary Guaranty
E Joinder Agreement
SCHEDULES
5.01 Good Standing Matters
5.05 Material Litigation
5.15 Subsidiaries
7.01 Existing Indebtedness, Liens and Negative Pledges
7.05 Permitted Investments
9.02 Lending Office, Addresses for Notices
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CREDIT AGREEMENT
This CREDIT AGREEMENT ("Agreement") is entered into as of December 15,
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2000 by and between CALIFORNIA PIZZA KITCHEN, INC., a California corporation
("Borrower"), and BANK OF AMERICA, N.A. ("Lender").
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RECITAL
Borrower has requested that Lender provide a revolving line of credit,
and Lender is willing to do so on the terms and conditions set forth herein.
In consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:
SECTION 1.
DEFINITIONS AND ACCOUNTING TERMS
1.01 Defined Terms. As used in this Agreement, the following terms
shall have the meanings set forth below:
"Affiliate" means any Person directly or indirectly controlling,
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controlled by, or under direct or indirect common control with, another Person.
A Person shall be deemed to be "controlled by" any other Person if such other
Person possesses, directly or indirectly, power (a) to vote 25% or more of the
securities (on a fully diluted basis) having ordinary voting power for the
election of directors or managing general partners; or (b) to direct or cause
the direction of the management and policies of such Person whether by contract
or otherwise.
"Agreement" means this Credit Agreement, as amended, restated,
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extended, supplemented or otherwise modified in writing from time to time.
"Applicable Payment Date" means, (a) as to any Offshore Rate Loan, the
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last day of the relevant Interest Period and any date that such Loan is prepaid
or converted in whole or in part and the Maturity Date; provided, however, that
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if any Interest Period for an Offshore Rate Loan exceeds three months, interest
shall also be paid on the date which falls every three months after the
beginning of such Interest Period, and (b) as to any other amount,, the last
Business Day of each calendar quarter and the Maturity Date; provided, further,
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that interest accruing at the Default Rate shall be payable from time to time
upon demand of Lender.
"Attorney Costs" means and includes all reasonable fees and
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disbursements of any law firm or other external counsel and the reasonable
allocated cost of internal legal services and all reasonable disbursements of
internal counsel.
"Audited Financial Statements" means the audited consolidated balance
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sheet of Borrower and its Subsidiaries for the fiscal year ended January 2, 2000
and the related consolidated statements of income and cash flows for such fiscal
year of Borrower.
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"Bank of America" means Bank of America, N.A.
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"Base Rate" means a fluctuating rate per annum equal to the higher of
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(a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect
for such day as publicly announced from time to time by Lender as its "prime
rate." Such rate is a rate set by Lender based upon various factors including
Lender's costs and desired return, general economic conditions and other
factors, and is used as a reference point for pricing some loans, which may be
priced at, above, or below such announced rate. Any change in such rate
announced by Lender shall take effect at the opening of business on the day
specified in the public announcement of such change.
"Base Rate Loan" means a Loan which bears interest based on the Base
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Rate.
"Borrower" has the meaning set forth in the introductory paragraph
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hereto.
"Borrower Party" means Borrower or any Person other than Lender and any
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Affiliate of Lender from time to time party to a Loan Document.
"Business Day" means any day other than a Saturday, Sunday, or other
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day on which commercial banks are authorized to close under the Laws of, or are
in fact closed in, the state where Lender's Lending Office is located and, if
such day relates to any Offshore Rate Loan, means any such day on which dealings
in Dollar deposits are conducted by and between banks in the offshore Dollar
interbank market.
"Change in Control" means the acquisition, including through merger,
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consolidation or otherwise, in a transaction or series of related transactions
not approved by then existing board of directors of Borrower, by any Person or
any Persons acting together which would constitute a "group" (a "Group") for
purposes of Section 13(d) of the Exchange Act, together with all affiliates and
associates (as defined in Rule 12b-2 under the Exchange Act) thereof, of direct
or indirect beneficial ownership (as defined in Rule 13d-3 under the Exchange
Act) of 51% or more of the total voting power of all classes of capital stock of
Borrower entitled to vote generally in the election of directors.
"Closing Date" means the date all the conditions precedent in Section
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4.01 are satisfied or waived by Lender.
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"Code" means the Internal Revenue Code of 1986, as amended from time to
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time.
"Commitment" means $20,000,000, as such amount may be reduced from time
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to time in accordance with this Agreement.
"Compliance Certificate" means a certificate substantially in the form
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of Exhibit B, properly completed and signed by a Responsible Officer of
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Borrower.
"Consolidated EBITDA" means, for any period, for Borrower and its
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Subsidiaries on a consolidated basis, an amount equal to the sum of (a)
Consolidated Net Income, (b) Consolidated
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Interest Charges, (c) the amount of taxes, based on or measured by income, used
or included in the determination of such Consolidated Net Income, (d) the amount
of depreciation and non-cash amortization expense deducted in determining such
Consolidated Net Income, and (e) non-cash charges which will not result in a
cash expense, including, without limitation, such charges resulting from
compliance with FASB 121, compensation expense relating to variable plan
accounting and write-offs of unamortized cost relating the Existing Credit
Facility.
"Consolidated Funded Indebtedness" means, as of any date of
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determination, for Borrower and its Subsidiaries on a consolidated basis, the
sum of (a) the outstanding principal amount of all obligations and liabilities,
whether current or long-term, for borrowed money (including Obligations
hereunder), (b) that portion of obligations with respect to capital leases that
are capitalized in the consolidated balance sheet of Borrower and its
Subsidiaries, and (c) without duplication, all Guaranty Obligations with respect
to Indebtedness of the type specified in subsections (a) and (b) above of
Persons other than Borrower or any of its Subsidiaries.
"Consolidated Interest Charges" means, for any period, for Borrower and
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its Subsidiaries on a consolidated basis, the sum of (a) all interest, premium
payments, fees, charges and related expenses payable by Borrower and its
Subsidiaries in connection with borrowed money (including capitalized interest)
or in connection with the deferred purchase price of assets, in each case to the
extent treated as interest in accordance with GAAP, and (b) the portion of rent
payable by Borrower and its Subsidiaries with respect to such period under
capital leases that is treated as interest in accordance with GAAP.
"Consolidated Net Income" means, for any period, for Borrower and its
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Subsidiaries on a consolidated basis, the net income of Borrower and its
Subsidiaries from continuing operations for that period excluding extraordinary
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items, gains or losses from Dispositions of assets and non-cash gains.
"Consolidated Net Worth" means, as of any date of determination, for
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Borrower and its Subsidiaries on a consolidated basis, Shareholders' Equity of
Borrower and its Subsidiaries on that date.
"Continuation" and "Continue" mean, with respect to any Offshore Rate
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Loan, the continuation of such Offshore Rate Loan as an Offshore Rate Loan on
the last day of the Interest Period for such Loan.
"Contractual Obligation" means, as to any Person, any provision of any
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security issued by such Person or of any agreement, instrument or undertaking to
which such Person is a party or by which it or any of its property is bound.
"Conversion" and "Convert" mean, with respect to any Loan, the
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conversion of such Loan from or into another type of Loan.
"Debtor Relief Laws" means the Bankruptcy Code of the United States of
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America, and all other liquidation, conservatorship, bankruptcy, assignment for
the benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief
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Laws of the United States of America or other applicable jurisdictions from time
to time in effect affecting the rights of creditors generally.
"Default" means any event that, with the giving of any notice, the
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passage of time, or both, would be an Event of Default.
"Default Rate" means an interest rate equal to the Base Rate plus
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1-1/2% per annum, to the fullest extent permitted by applicable Laws; provided,
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however, that with respect to an Offshore Rate Loan, the Default Rate shall be
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an interest rate equal to the interest rate otherwise applicable to such Loan
plus 2% per annum.
"Designated Deposit Account" means a deposit account maintained by
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Borrower with Bank of America, as from time to time designated by Borrower to
Lender.
"Disposition" or "Dispose" means the sale, transfer, license or other
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disposition (including any sale and leaseback transaction) of any property by
any Person, including any sale, assignment, transfer or other disposal with or
without recourse of any notes or accounts receivable or any rights and claims
associated therewith.
"Dollar" and "$" means lawful money of the United States of America.
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"Domestic Subsidiary" means a Subsidiary of Borrower which is
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incorporated under the laws of any State of the United States, other than such a
Subsidiary which is a Subsidiary of a Foreign Subsidiary (collectively, the
"Domestic Subsidiaries").
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"Environmental Laws" means all Laws relating to environmental, health,
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safety and land use matters applicable to any property.
"ERISA" means the Employee Retirement Income Security Act of 1974 and
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any regulations issued pursuant thereto, as amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
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incorporated) under common control with Borrower within the meaning of Sections
414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes
of provisions relating to Section 412 of the Code).
"Event of Default" means any of the events specified in Section 8.
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"Existing Credit Facility" means that certain Credit Agreement dated as
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of October 29, 1999 among Borrower, the lenders from time to time party thereto,
Bank of America, N.A., as administrative agent, swing line lender and issuing
lender and Bankers Trust Company, as documentation agent.
"Existing Letters of Credit" means any letters of credit issued,
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outstanding and undrawn under the Existing Credit Facility on the Closing Date.
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"Extension of Credit" means (a) the borrowing, Conversion or
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Continuation of any Loans, or (b) a Letter of Credit Action which has the effect
of increasing the amount of a Letter of Credit, extending the maturity of a
Letter of Credit or making any material modification to a Letter of Credit or
the reimbursement of drawings under a Letter of Credit (collectively, the
"Extensions of Credit").
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"Federal Funds Rate" means, for any day, the rate per annum (rounded
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upwards to the nearest 1/100 of 1%) equal to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as published by the
Federal Reserve Bank on the Business Day next succeeding such day; provided that
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(a) if such day is not a Business Day, the Federal Funds Rate for such day shall
be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (b) if no such rate is so
published on such next succeeding Business Day, the Federal Funds Rate for such
day shall be the average rate charged to Lender on such day on such transactions
as determined by Lender.
"Fixed Charge Coverage Ratio" means, as of any date of determination,
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for Borrower and its Subsidiaries on a consolidated basis, the ratio of (a) (i)
Consolidated EBITDA for the period of the four prior fiscal quarters ending on
such date plus (ii) operating rents during such period less (iii) maintenance
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capital expenditures made during such period in an amount not less than $20,000
per store that has been open at least 12 months less (iv) cash taxes paid during
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such period to (b) the sum of (i) Consolidated Interest Charges for such period
plus (ii) the current portion of long-term Indebtedness including capital leases
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(unless renewable or extendible at the option of the obligor more than 12 months
beyond the date of determination plus (iii) operating rents during such period.
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"Foreign Subsidiary" means a Subsidiary of Borrower which is not a
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Domestic Subsidiary (collectively, the "Foreign Subsidiaries").
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"GAAP" means generally accepted accounting principles set forth in the
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opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or such other principles as may be
approved by a significant segment of the accounting profession, that are
applicable to the circumstances as of the date of determination, consistently
applied. If at any time any change in GAAP would affect the computation of any
financial ratio or requirement set forth in any Loan Document, and either
Borrower or Lender shall so request, Lender and Borrower shall negotiate in good
faith to amend such ratio or requirement to preserve the original intent thereof
in light of such change in GAAP, provided that, until so amended, (i) such ratio
or requirement shall continue to be computed in accordance with GAAP prior to
such change therein and (ii) Borrower shall provide to Lender financial
statements and other documents required under this Agreement or as reasonably
requested hereunder setting forth a reconciliation between calculations of such
ratio or requirement made before and after giving effect to such change in GAAP.
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"Governmental Authority" means (a) any international, foreign, federal,
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state, county or municipal government, or political subdivision thereof, (b) any
governmental or quasi-governmental agency, authority, board, bureau, commission,
department, instrumentality, central bank or public body, or (c) any court,
administrative tribunal or public utility.
"Government Securities" means readily marketable (a) direct full faith
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and credit obligations of the United States of America or obligations guaranteed
by the full faith and credit of the United States of America and (b) obligations
of an agency or instrumentality of, or corporation owned, controlled or
sponsored by, the United States of America that are generally considered in the
securities industry to be implicit obligations of the United States of America.
"Guarantor" means each Person from time to time a guarantor under the
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Master Subsidiary Guaranty (collectively, the "Guarantors").
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"Guaranty Obligation" means, as to any Person, any (a) guaranty by that
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Person of Indebtedness of, or other obligation payable or performable by, any
other Person or (b) assurance, agreement, letter of responsibility, letter of
awareness, undertaking or arrangement given by that Person to an obligee of any
other Person with respect to the payment or performance of an obligation by, or
the financial condition of, such other Person, whether direct, indirect or
contingent, including any purchase or repurchase agreement covering such
obligation or any collateral security therefor, any agreement to provide funds
(by means of loans, capital contributions or otherwise) to such other Person,
any agreement to support the solvency or level of any balance sheet item of such
other Person or any "keep-well" or other arrangement of whatever nature given
for the purpose of assuring or holding harmless such obligee against loss with
respect to any obligation of such other Person; provided, however, that the term
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Guaranty Obligation shall not include endorsements of instruments for deposit or
collection in the ordinary course of business. The amount of any Guaranty
Obligation shall be deemed to be an amount equal to the stated or determinable
amount of the related primary obligation, or portion thereof, covered by such
Guaranty Obligation or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof as determined by the Person in good
faith.
"Indebtedness" means as to any Person at a particular time, all items
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which would, in conformity with GAAP, be classified as liabilities on a balance
sheet of such Person as at such time (excluding trade and other accounts payable
in the ordinary course of business in accordance with customary trade terms and
which are not overdue for a period of more than 60 days and excluding deferred
taxes), but in any event including, without duplication:
(a) all obligations of such Person for borrowed money and
all obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments;
(b) any direct or contingent obligations of such Person
arising under letters of credit (including standby and commercial),
banker's acceptances, bank guaranties, surety bonds and similar
instruments;
(c) net obligations under any Swap Contract in an amount
equal to (i) if such Swap Contract has been closed out, the termination
value thereof, or (ii) if such Swap
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Contract has not been closed out, the xxxx-to-market value thereof
determined on the basis of readily available quotations provided by any
recognized dealer in such Swap Contract;
(d) whether or not so included as liabilities in
accordance with GAAP, all obligations of such Person to pay the
deferred purchase price of property or services, and indebtedness
(excluding prepaid interest thereon) secured by a Lien on property
owned or being purchased by such Person (including indebtedness arising
under conditional sales or other title retention agreements), whether
or not such indebtedness shall have been assumed by such Person or is
limited in recourse;
(e) lease payment obligations under capital leases or
Synthetic Lease Obligations; and
(f) all Guaranty Obligations of such Person in respect of
any of the foregoing;
provided, however, that Indebtedness shall not include redeemable preferred
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stock.
For all purposes of this Agreement, the Indebtedness of any Person
shall include the Indebtedness of any partnership or joint venture in which such
Person is a general partner or a joint venturer, unless such Indebtedness is
expressly made non-recourse to such Person except for customary exceptions
acceptable to Lender.
"Indemnified Liabilities" has the meaning set forth in Section 9.12.
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"Interest Period" means, for each Offshore Rate Loan as requested by
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Borrower, (a) initially, the period commencing on the date such Offshore Rate
Loan is disbursed, Continued as, or Converted into, an Offshore Rate Loan and
(b) thereafter, the period commencing on the last day of the preceding Interest
Period, and ending, in each case, on the earlier of (x) the scheduled Maturity
Date, or (y) one, two, three or six months thereafter (or such other period
consented to by Lender); provided that:
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(i) any Interest Period that would otherwise end on a day
that is not a Business Day shall be extended to the next succeeding
Business Day unless such Business Day falls in another calendar month,
in which case such Interest Period shall end on the next preceding
Business Day;
(ii) any Interest Period which 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 end on the last Business Day of the calendar month at the
end of such Interest Period; and
(iii) unless Lender otherwise consents, there may not be
more than six Interest Periods for Offshore Rate Loans in effect at any
time.
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"Interim Financial Statements" means the company-prepared consolidated
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balance sheet of Borrower and its Subsidiaries for the 39-weeks ended October 1,
2000, and the related consolidated statements of income and cash flows for such
fiscal year of Borrower.
"Investment" means, as to any Person, any acquisition or any investment
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by such Person, whether by means of the purchase or other acquisition of stock
or other securities of any other Person or by means of a loan, creating a debt,
capital contribution, guaranty or other debt or equity participation or interest
in any other Person, including any partnership and joint venture interests in
such other Person. For purposes of covenant compliance, the amount of any
Investment shall be the amount actually invested, without adjustment for
subsequent increases or decreases in the value of such Investment.
"IRS" means the Internal Revenue Service.
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"Joinder Agreement" means a Joinder Agreement substantially in the form
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of Exhibit E, either as originally executed or as it may from time to time be
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supplemented, modified, amended, extended or supplanted.
"Laws" or "Law" means all international, foreign, federal, state and
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local statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.
"Lending Office" means the office or offices of Lender described as
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such on Schedule 9.02, or such other office or offices as Lender may from time
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to time notify Borrower.
"Letter of Credit" means any standby letter of credit issued or
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outstanding hereunder.
"Letter of Credit Action" means the issuance, supplement, amendment,
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renewal, extension, modification or other action relating to a Letter of Credit
hereunder.
"Letter of Credit Application" means an application for a Letter of
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Credit Action as from time to time in use by Lender.
"Letter of Credit Cash Collateral Account" means a blocked deposit
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account at Lender with respect to which Borrower hereby grants a security
interest in such account to Lender as security for Letter of Credit Usage and
with respect to which Borrower agrees to execute and deliver from time to time
such documentation as Lender may reasonably request to further assure and
confirm such security interest.
"Letter of Credit Sublimit" means an amount equal to the lesser of the
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Commitment and $5,000,000. The Letter of Credit Sublimit is part of the
Commitment and is not in addition to the Commitment.
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"Letter of Credit Usage" means, as at any date of determination, the
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aggregate undrawn face amount of outstanding Letters of Credit plus the
aggregate amount of all drawings under the Letters of Credit not reimbursed to
Lender by Borrower or converted into Loans.
"Leverage Ratio" means, as of any date of determination, for Borrower
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and its Subsidiaries on a consolidated basis, the ratio of (a) Consolidated
Funded Indebtedness as of such date to (b) Consolidated EBITDA for the period of
the four fiscal quarters ending on that date.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
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arrangement (in the nature of compensating balances, cash collateral accounts or
security interests), encumbrance, lien (statutory or other), charge, or
preference, priority or other security interest or preferential arrangement of
any kind or nature whatsoever (including any conditional sale or other title
retention agreement, any financing lease having substantially the same economic
effect as any of the foregoing, and the filing of any financing statement under
the Uniform Commercial Code or comparable Laws of any jurisdiction), including
the interest of a purchaser of accounts receivable.
"Loan" means any advance made by Lender to Borrower as provided in
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Section 2 (collectively, the "Loans").
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"Loan Documents" means this Agreement, the Master Subsidiary Guaranty,
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any Letter of Credit Application, any Request for Extension of Credit and any
Note, certificate, any fee letter, and other instrument, document or agreement
from time to time delivered in connection with this Agreement.
"Master Subsidiary Guaranty" means the Master Subsidiary Guaranty
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substantially in the form of Exhibit D hereto, either as originally executed or
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as it may from time to time be supplemented, modified, amended, extended or
supplanted.
"Material Adverse Effect" means any set of circumstances or events
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which (a) has or would reasonably be expected to have any material adverse
effect whatsoever upon the validity or enforceability of any Principal Loan
Document, (b) is or would reasonably be expected to be material and adverse to
the condition (financial or otherwise), business, assets, operations or
prospects of Borrower and its Subsidiaries, taken as a whole, or (c) materially
impairs or would reasonably be expected to materially impair the ability of any
Borrower Party to perform a material portion of the Obligations, in each case as
reasonably determined by Lender.
"Maturity Date" means June 30, 2004, as such date may be earlier
-------------
terminated or extended in accordance with the terms hereof.
"Minimum Amount" means, with respect to each of the following actions,
--------------
the minimum amount and any multiples in excess thereof set forth opposite such
action:
-9-
Minimum Multiples in
Type of Action Amount excess thereof
-------------------------------------------------------------------------------------
Borrowing or prepayment of, or Conversion $100,000 $100,000
into, a Base Rate Loan
Borrowing, prepayment or Continuation of, $500,000 $100,000
or Conversion into, an Offshore Rate Loan
Letter of Credit Action $25,000 None
Reduction in Commitment $1,000,000 $500,000
"Multiemployer Plan" means any employee benefit plan of the type
------------------
described in Section 4001(a)(3) of ERISA.
"Negative Pledge" means a Contractual Obligation that restricts Liens
---------------
on a material portion of property.
"Net Cash Proceeds" means the gross proceeds received by Borrower and
-----------------
its Subsidiaries from any applicable transaction in Cash, net of brokerage
commissions, legal expenses and other transactional costs payable by Borrower
and its Subsidiaries in connection therewith and net of an amount determined in
good faith by Borrower to be the estimated amount of income, sales and uses
taxes payable by Borrower attributable to such transaction.
"Note" means a promissory note made by Borrower in favor of Lender
----
evidencing Loans made by Lender, substantially in the form of Exhibit C.
---------
"Obligations" means all advances to, and debts, liabilities,
-----------
obligations, covenants and duties of, any Borrower Party arising under any Loan
Document, whether direct or indirect (including those acquired by assignment),
absolute or contingent, due or to become due, now existing or hereafter arising
and including interest that accrues after the commencement of any proceeding
under any Debtor Relief Laws by or against any Borrower Party or any Subsidiary
or Affiliate of any Borrower Party.
"Offshore Base Rate" has the meaning set forth in the definition of
------------------
Offshore Rate.
"Offshore Rate" means for any Interest Period with respect to any
-------------
Offshore Rate Loan, a rate per annum determined by Lender pursuant to the
following formula:
Offshore Rate = Offshore Base Rate
------------------------------------
1.00 - Eurodollar Reserve Percentage
-10-
Where,
"Offshore Base Rate" means, for such Interest Period:
------------------
(a) the rate per annum equal to the rate determined by Lender to be
the offered rate that appears on the page of the Telerate Screen that
displays an average British Bankers Association Interest Settlement Rate
for deposits in Dollars (for delivery on the first day of such Interest
Period) with a term equivalent to such Interest Period, determined as of
approximately 11:00 a.m. (London time) two Business Days prior to the first
day of such Interest Period, or
(b) in the event the rate referenced in the preceding subsection (a)
does not appear on such page or service or such page or service shall cease
to be available, the rate per annum equal to the rate determined by Lender
to be the offered rate on such other page or other service that displays an
average British Bankers Association Interest Settlement Rate for deposits
in Dollars (for delivery on the first day of such Interest Period) with a
term equivalent to such Interest Period, determined as of approximately
11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period, or
(c) in the event the rates referenced in the preceding subsections
(a) and (b) are not available, the rate per annum determined by Lender as
the rate of interest (rounded up to the nearest 1/100% of 1%) at which
Dollar deposits (for delivery on the first day of such Interest Period) in
same day funds in the approximate amount of the applicable Offshore Rate
Loan and with a term equivalent to such Interest Period would be offered by
its London Branch to major banks in the offshore Dollar market at their
request at approximately 11:00 a.m. (London time) two Business Days prior
to the first day of such Interest Period.
"Eurodollar Reserve Percentage" means, for any day during any Interest
-----------------------------
Period, the reserve percentage (expressed as a decimal, rounded upward to
the next 1/100th of 1%) in effect on such day, whether or not applicable to
Lender, under regulations issued from time to time by the Board of
Governors of the Federal Reserve System for determining the maximum reserve
requirement (including any emergency, supplemental or other marginal
reserve requirement) with respect to Eurocurrency funding (currently
referred to as "Eurocurrency liabilities"). The Offshore Rate for each
outstanding Offshore Rate Loan shall be adjusted automatically as of the
effective date of any change in the Eurodollar Reserve Percentage.
"Offshore Rate Loan" means a Loan bearing interest based on the Offshore
------------------
Rate.
"Ordinary Course Dispositions" means:
----------------------------
(a) Dispositions of obsolete or worn out property, whether now owned
or hereafter acquired, in the ordinary course of business;
-11-
(b) Dispositions of cash, cash equivalents, inventory and other
property in the ordinary course of business;
(c) Dispositions of property to the extent that such property is
exchanged for credit against the purchase price of similar replacement
property, or the proceeds of such sale are reasonably promptly applied to
the purchase price of such replacement property or where Borrower or its
Subsidiary determine in good faith that the failure to replace such
property will not be detrimental to the business of Borrower or such
Subsidiary provided, further, that no such Disposition shall be for less
-------- -------
than the fair market value of the property being disposed of;
(d) Dispositions of assets or property by any Subsidiary of Borrower
to Borrower or another wholly-owned Subsidiary of Borrower; provided,
--------
however, that if the transferor Subsidiary is a Guarantor, the transferee
-------
Subsidiary shall also be a Guarantor , and in each such case Borrower shall
promptly notify Lender of such Disposition; and
(e) the grant of licenses to use Borrower's intellectual property in
the ordinary course of business.
"Ordinary Course Indebtedness" means:
----------------------------
(a) Indebtedness under the Loan Documents;
(b) intercompany Guaranty Obligations of Borrower or any of its
Subsidiaries guarantying Indebtedness otherwise permitted hereunder of
Borrower or any wholly-owned Subsidiary of Borrower;
(c) Indebtedness arising from the honoring of a check, draft or
similar instrument against insufficient funds; and
(d) Ordinary Course Swap Obligations.
"Ordinary Course Investments" means Investments consisting of:
---------------------------
(a) cash and Investments set forth on Schedule 7.05;
-------------
(b) advances to officers, directors and employees of Borrower and its
Subsidiaries for travel, entertainment, relocation and analogous ordinary
business purposes;
(c) other advances to officers, directors and employees of Borrower
and its Subsidiaries not exceeding $1,000,000 in the aggregate outstanding
at any time;
(d) Investments of Borrower in any of its Subsidiaries and
Investments of any Subsidiary of Borrower in Borrower or another Subsidiary
of Borrower;
-12-
(e) extensions of credit to customers or suppliers of Borrower and
its Subsidiaries in the ordinary course of business and any Investments
received in satisfaction or partial satisfaction thereof; and
(f) Guaranty Obligations permitted by Section 7.01;
------------
provided, however, that for purposes of this definition, Subsidiaries
-------- -------
shall not include CPK Beverage, Inc., CPK I, Limited Partnership or CPK
Water Tower Limited Partnership.
"Ordinary Course Liens" means:
---------------------
(a) Liens pursuant to any Loan Document;
(b) Liens for taxes not yet due or which are being contested in good
faith and by appropriate proceedings, if adequate reserves with respect
thereto are maintained on the books of the applicable Person in accordance
with GAAP;
(c) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business which are
not overdue for a period of more than 30 days or which are being contested
in good faith and by appropriate proceedings, if adequate reserves with
respect thereto are maintained on the books of the applicable Person;
(d) pledges or deposits in connection with worker's compensation,
unemployment insurance and other social security legislation;
(e) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(f) easements, rights-of-way, restrictions and other similar
encumbrances affecting real property which, in the aggregate, are not
substantial in amount, and which do not in any case materially detract from
the value of the property subject thereto or materially interfere with the
ordinary conduct of the business of any Person; and
(g) attachment, judgment or other similar Liens arising in connection
with litigation or other legal proceedings (and not otherwise a Default
hereunder) in the ordinary course of business that is currently being
contested in good faith by appropriate proceedings, adequate reserves have
been set aside and no material property is subject to a material risk of
loss or forfeiture and the claims in respect of such Liens are fully
covered by insurance (subject to ordinary and customary deductibles).
"Ordinary Course Swap Obligations" means all obligations (contingent
--------------------------------
or otherwise) of Borrower or any Subsidiary existing or arising under any
Swap Contract, provided that each of the following criteria is satisfied:
--------
(a) such obligations are (or were) entered into by such Person
-13-
in the ordinary course of business for the purpose of directly mitigating
risks associated with liabilities, commitments or property held or
reasonably anticipated by such Person, or changes in the value of
securities issued by such Person in conjunction with a securities
repurchase program not otherwise prohibited hereunder, and not for purposes
of speculation or taking a "market view;" and (b) such Swap Contracts do
not contain (i) any provision ("walk-away" provision) exonerating the non-
defaulting party from its obligation to make payments on outstanding
transactions to the defaulting party, or (ii) any provision creating or
permitting the declaration of an event of default, termination event or
similar event upon the occurrence of an Event of Default hereunder (other
than an Event of Default referred to in Section 8.01(f)(ii)).
--------------------
"Organization Documents" means, (a) with respect to any corporation,
----------------------
the certificate or articles of incorporation and the bylaws; (b) with
respect to any limited liability company, the articles of formation and
operating agreement; and (c) with respect to any partnership, joint
venture, trust or other form of business entity, the partnership or joint
venture agreement and any agreement, instrument, filing or notice with
respect thereto filed in connection with its formation with the secretary
of state or other department in the state of its formation, in each case as
amended from time to time.
"Outstanding Obligations" means, as of any date, and giving effect to
-----------------------
making any Extensions of Credit requested on such date and all payments,
repayments and prepayments made on such date, the sum of (a) the aggregate
outstanding principal amount of all Loans, and (b) all Letter of Credit
Usage.
"Person" means any individual, trustee, corporation, general
------
partnership, limited partnership, limited liability company, joint stock
company, trust, unincorporated organization, bank, business association,
firm, joint venture, Governmental Authority, or otherwise.
"Principal Loan Documents" means this Agreement, the Master Subsidiary
------------------------
Guaranty, any Note, and any other principal agreement delivered from time
to time in connection with this Agreement.
"Request for Extension of Credit" means a written request
-------------------------------
substantially in the form of Exhibit A duly completed and signed by a
---------
Responsible Officer of Borrower and delivered by Requisite Notice. In the
case of a Letter of Credit Action, the Letter of Credit Application shall
be deemed to be the Request for Extension of Credit.
"Requisite Notice" means, unless otherwise provided herein, (a)
----------------
irrevocable written notice to the intended recipient or (b) except with
respect to Letter of Credit Actions (which must be in writing), irrevocable
telephonic notice to the intended recipient, promptly followed by a written
notice to such recipient. Such notices shall be (i) delivered to such
recipient at the address or telephone number specified on Schedule 9.02 or
-------------
as otherwise designated by such recipient by Requisite Notice to Lender,
and (ii) if made by any Borrower Party, given or made by a Responsible
Officer of such Borrower Party. Any written notice delivered in connection
with any Loan Document shall be in the form, if any, prescribed herein or
therein and may be delivered as provided in Section 9.02. Any notice sent
-------------
by other than hardcopy shall be promptly
-14-
confirmed by a telephone call to the recipient and, if requested by Lender,
by a manually-signed hardcopy thereof.
"Requisite Time" means, with respect to any of the actions listed
--------------
below, not later than the time and date set forth below opposite such
action (all times are California time):
Type of Action Time Date of Action
---------------------------------------------------------------------------------------------------------------------------
Delivery of Request for Extension of
Credit for, or notice for:
. Borrowing or prepayment of, or 8:30 a.m. Same date as such borrowing,
Conversion into, Base Rate Loan prepayment or Conversion
. Borrowing, prepayment or 10:00 a.m. 3 Business Days prior to such
Continuation of, or Conversion into, borrowing, prepayment,
Offshore Rate Loan Continuation, or Conversion
2 Business Days prior to such
. Letter of Credit Action 10:00 a.m. action (or such lesser time which is
acceptable to Lender)
. Voluntary reduction in or
termination of Commitments 2 Business Days prior to such
10:00 a.m. reduction or termination
Payments by Lender or Borrower 11:00 a.m. On date payment is due
"Responsible Officer" means the president, chief financial officer or
-------------------
controller of a Borrower Party. Any document or certificate hereunder that
is signed by a Responsible Officer of a Borrower Party shall be
conclusively presumed to have been authorized by all necessary corporate,
partnership and/or other action on the part of such Borrower Party and such
Responsible Officer shall be conclusively presumed to have acted on behalf
of such Borrower Party.
"Restricted Payment" means:
------------------
(a) the declaration or payment of any dividend or distribution
by Borrower or any of its Subsidiaries, either in cash or property, on
any shares of the capital stock of any class of Borrower or any of its
Subsidiaries (except dividends or other distributions payable solely in
shares of capital stock of Borrower or any of its Subsidiaries or
payable by a Subsidiary to Borrower or another wholly-owned Subsidiary
of Borrower);
(b) the purchase, redemption or retirement by Borrower or any of
its Subsidiaries of any shares of its capital stock of any class or any
warrants, rights or options to purchase or acquire any shares of its
capital stock, whether directly or indirectly;
(c) any other payment or distribution by Borrower or any of its
Subsidiaries in respect of its capital stock, either directly or
indirectly;
-15-
(d) any Investment other than an Investment otherwise permitted
under any Loan Document; and
(e) the payment or prepayments of any principal (including
sinking fund payments) or any other amount (other than scheduled
interest payments) with respect to any Indebtedness (including the
payment of cash in connection with such a conversion thereof), or the
purchase or redemption of (or offer to purchase or redeem) any
Indebtedness, or the deposit of any monies, securities or other
property with any trustee or other Person to provide assurance that the
principal or any portion thereof of any Indebtedness will be paid when
due or any other provision for the defeasance of any Indebtedness.
"Shareholders' Equity" means, as of any date of determination for
--------------------
Borrower and its Subsidiaries on a consolidated basis, shareholders' equity,
including redeemable preferred stock, as of that date determined in accordance
with GAAP.
"Subsidiary" means a corporation, partnership, joint venture, limited
----------
liability company or other business entity of which a majority of the shares of
securities or other interests having ordinary voting power for the election of
directors or other governing body (other than securities or interests having
such power only by reason of the happening of a contingency) are at the time
beneficially owned, or the management of which is otherwise controlled,
directly, or indirectly through one or more intermediaries, or both, by
Borrower.
"Swap Contract" means (a) any and all rate swap transactions, basis
-------------
swaps, forward rate transactions, commodity swaps, commodity options, forward
commodity contracts, equity or equity index swaps or options, bond or bond price
or bond index swaps or options or forward bond or forward bond price or forward
bond index transactions, interest rate options, forward foreign exchange
transactions, cap transactions, floor transactions, collar transactions,
currency swap transactions, cross-currency rate swap transactions, currency
options, or any other similar transactions or any combination of any of the
foregoing (including any options to enter into any of the foregoing), whether or
not any such transaction is governed by or subject to any master agreement, and
(b) any and all transactions of any kind, and the related confirmations, which
are subject to the terms and conditions of, or governed by, any form of master
agreement published by the International Swaps and Derivatives Association,
Inc., or any other master agreement (any such master agreement, together with
any related schedules, as amended, restated, extended, supplemented or otherwise
modified in writing from time to time, a "Master Agreement"), including any such
----------------
obligations or liabilities under any Master Agreement.
"Swap Termination Value" means, in respect of any one or more Swap
----------------------
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a) the amount(s) determined as the
xxxx-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or
-16-
other readily available quotations provided by any recognized dealer in such
Swap Contracts (which may include Lender).
"Synthetic Lease Obligations" means all monetary obligations of a
---------------------------
Person under (a) a so-called synthetic, off-balance sheet or tax retention
lease, or (b) an agreement for the use or possession of property creating
obligations which do not appear on the balance sheet of such Person but which,
upon the insolvency or bankruptcy of such Person, would be characterized as the
Indebtedness of such Person (without regard to accounting treatment).
"to the best knowledge of" means, when modifying a representation,
------------------------
warranty or other statement of any Person, that the fact or situation described
therein is known by such Person (or, in the case of a Person other than a
natural Person, known by a Responsible Officer of such Person) making the
representation, warranty or other statement, or with the exercise of reasonable
due diligence under the circumstances (in accordance with the standard of what a
reasonable Person in similar circumstances would have done) would have been
known by such Person (or, in the case of a Person other than a natural Person,
would have been known by a Responsible Officer of such Person).
"type" of Loan means (a) a Base Rate Loan, or (b) an Offshore Rate
----
Loan.
1.02 Use of Certain Terms.
(a) All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant hereto
or thereto, unless otherwise defined therein.
(b) As used herein, unless the context requires otherwise, the
masculine, feminine and neuter genders and the singular and plural include one
another.
(c) The words "herein" and "hereunder" and words of similar import when
------ ---------
used in any Loan Document shall refer to the Loan Documents as a whole and not
to any particular provision thereof. The term "including" is by way of example
---------
and not limitation. References herein to a Section, subsection or clause shall,
unless the context otherwise requires, refer to the appropriate Section,
subsection or clause in this Agreement.
(d) The term "or" is disjunctive; the term "and" is conjunctive. The
-- ---
term "shall" is mandatory; the term "may" is permissive. Masculine terms also
----- ---
apply to females; feminine terms also apply to males.
1.03 Accounting Terms. All accounting terms not specifically or
completely defined in this Agreement shall be construed in conformity with, and
all financial data required to be submitted by this Agreement shall be prepared
in conformity with, GAAP applied on a consistent basis, as in effect from time
to time, applied in a manner consistent with that used in preparing the Audited
Financial Statements, except as otherwise specifically prescribed herein.
------
-17-
1.04 Rounding. Any financial ratios required to be maintained by Borrower
pursuant to this Agreement shall be calculated by dividing the appropriate
component by the other component, carrying the result to one place more than the
number of places by which such ratio is expressed in this Agreement and rounding
the result up or down to the nearest number (with a round-up if there is no
nearest number) to the number of places by which such ratio is expressed in this
Agreement.
1.05 Exhibits and Schedules. All exhibits and schedules to this Agreement,
either as originally existing or as the same may from time to time be
supplemented, modified or amended, are incorporated herein by this reference. A
matter disclosed on any Schedule shall be deemed disclosed on all Schedules.
1.06 References to Agreements and Laws. Unless otherwise expressly provided
herein, (a) references to agreements (including the Loan Documents) and other
contractual instruments shall include all amendments, restatements, extensions,
supplements and other modifications thereto (unless prohibited by any Loan
Document), and (b) references to any Law shall include all statutory and
regulatory provisions consolidating, amending, replacing, supplementing or
interpreting such Law.
SECTION 2.
THE COMMITMENT AND EXTENSIONS OF CREDIT
2.01 Amount and Terms of Commitment.
(a) Subject to the terms and conditions set forth in this Agreement,
Lender agrees until the Maturity Date to make, Convert and Continue revolving
loans (each such loan, a "Loan") as Borrower may from time to time request;
----
provided, however, that the Outstanding Obligations shall not exceed the
-------- -------
Commitment at any time.. Subject to the foregoing and the other terms and
conditions hereof, Borrower may borrow, Convert, Continue, prepay and reborrow
Loans as set forth herein without premium or penalty.
(b) Loans made by Lender shall be evidenced by one or more loan accounts
or records maintained by Lender in the ordinary course of business. Upon the
request of Lender, the Loans may be evidenced by one or more Notes, instead of
or in addition to loan accounts. Lender may attach schedules to its Note(s) and
endorse thereon the date, amount and maturity of its Loans and payments with
respect thereto. Such loan accounts, records or Notes shall be conclusive absent
manifest error of the amount of such Loans and payments thereon. Any failure so
to record or any error in doing so shall not, however, limit or otherwise affect
the obligation of Borrower to pay any amount owing with respect to the Loans.
2.02 Borrowings, Conversions and Continuations of Loans.
(a) Borrower may irrevocably request a borrowing, Conversion or
Continuation of Loans in a Minimum Amount therefor by delivering a Request for
Extension of Credit therefor by Requisite Notice to Lender not later than the
Requisite Time therefor. All borrowings,
-18-
Conversions and Continuations shall constitute Base Rate Loans unless properly
and timely otherwise designated as set forth in the prior sentence.
(b) Upon satisfaction of the applicable conditions set forth in Section
-------
4.02 (and, in the case of the initial Extension of Credit hereunder, Section
---- -------
4.01), 4, all funds shall be credited in immediately available funds to
----
Borrower.
(c) Except as otherwise provided herein, an Offshore Rate Loan may be
Continued or Converted only on the last day of the Interest Period for such
Offshore Rate Loan. During the existence of a Default or Event of Default, no
Loans may be requested as, Converted into or Continued as Offshore Rate Loans if
so determined by Lender, and Lender may demand that any or all of the then
outstanding Offshore Rate Loans be Converted immediately into Base Rate Loans.
Such Conversion shall be effective upon notice to Borrower and shall continue so
long as such Default or Event of Default continues to exist.
(d) If a Loan is to be made on the same date that another Loan is due and
payable, Borrower or Lender, as the case may be, shall, unless Lender otherwise
requests, make available the net amount of funds giving effect to both such
Loans and the effect for purposes of this Agreement shall be the same as if
separate transfers of funds had been made with respect to each such Loan.
2.03 Letters of Credit.
(a) The Letter of Credit Sublimit. Subject to the terms and conditions
set forth in this Agreement, until the Maturity Date, Lender shall take such
Letter of Credit Actions under the Commitment as Borrower may from time to time
request; provided, however, that (i) the aggregate outstanding Letter of Credit
-------- -------
Usage shall not exceed the Letter of Credit Sublimit at any time and (ii) the
Outstanding Obligations of Lender shall not exceed Lender's Commitment at any
time. Each Letter of Credit Action shall be in a form acceptable to Lender.
Unless consented to by Lender, no Letter of Credit may expire more than 12
months after the date of its issuance or last renewal; provided, however, that
-------- -------
no Letter of Credit shall expire after the Maturity Date. If any Letter of
Credit Usage remains outstanding after the Maturity Date, Borrower shall deposit
cash in an amount equal to such Letter of Credit Usage in a Letter of Credit
Cash Collateral Account not later than the Maturity Date. All Existing Letters
of Credit shall be deemed continuing and outstanding hereunder as Letters of
Credit.
(b) Requesting Letter of Credit Actions. Borrower may irrevocably request
a Letter of Credit Action in a Minimum Amount therefor by delivering a Letter of
Credit Application therefor to Lender by Requisite Notice not later than the
Requisite Time therefor. Unless Lender has determined that such Letter of Credit
Action is not permitted hereunder or is contrary to any Laws or policies of
Lender, Lender shall, upon satisfaction of the applicable conditions set forth
in Section 4.02 with respect to any Letter of Credit Action constituting an
------------
Extension of Credit, effect such Letter of Credit Action. This Agreement shall
control in the event of any conflict with any Letter of Credit Application.
-19-
(c) Reimbursement of Payments Under Letters of Credit. Borrower shall
reimburse Lender for any payment that Lender makes under a Letter of Credit on
or before the date of such payment; provided, however, that if the conditions
-------- -------
precedent set forth in Section 4.02 can be satisfied, Borrower may request a
------------
Loan to reimburse Lender for such payment pursuant to Section 2.02, or, failing
------------
to make such request, Borrower shall be deemed to have requested a Base Rate
Loan on such payment date pursuant to subsection (d) below.
(d) Failure to Reimburse Lender. If Borrower fails to timely make the
payment required pursuant to subsection (c) above, and if the conditions
precedent set forth in Section 4.02 cannot be satisfied on the date Borrower is
------------
obligated to make, but fails to make, a reimbursement of a payment under a
Letter of Credit, such unreimbursed drawing shall be payable by Borrower upon
demand of Lender and shall bear interest at the Default Rate payable on demand.
(e) Special Provisions Relating to Evergreen Letters of Credit. Borrower
may request Letters of Credit that have automatic extension or renewal
provisions ("evergreen" Letters of Credit) so long as Lender has the right not
to permit any such extension or renewal at least annually within a notice period
to be agreed upon at the time each such Letter of Credit is issued. If the
conditions set forth in Section 4.02 could be satisfied within such notice
------------
period, an evergreen Letter of Credit shall be permitted to automatically extend
or renew in accordance with its terms for the period(s) specified therein (but
not to a date later than the Maturity Date). If the conditions set forth in
Section 4.02 could not be satisfied within such notice period, Lender shall
------------
notify Borrower of such fact. Unless Lender consents (given in its sole and
absolute discretion) decide to allow such Letter of Credit to nonetheless
automatically extend or renew, Lender shall notify the beneficiary of such non-
extension or nonrenewal.
(f) Obligations Absolute. The obligation of Borrower to pay to Lender the
amount of any payment made by Lender under any Letter of Credit shall be
absolute, unconditional, and irrevocable. Without limiting the foregoing or
limiting Borrower's rights to pursue such rights and remedies as it may have
against Lender or beneficiaries of a Letter of Credit, Borrower's obligation
shall not be affected by any of the following circumstances:
(i) any lack of validity or enforceability of the Letter of Credit,
this Agreement, or any other agreement or instrument relating thereto;
(ii) any amendment or waiver of or any consent to departure by
Borrower from the Letter of Credit, this Agreement, or any other agreement
or instrument relating hereto or thereto;
(iii) the existence of any claim, setoff, defense, or other rights
which Borrower may have at any time against Lender, any beneficiary of the
Letter of Credit (or any persons or entities for whom any such beneficiary
may be acting) or any other Person, whether in connection with the Letter
of Credit, this Agreement, or any other agreement or instrument relating
thereto, or any unrelated transactions;
-20-
(iv) any demand, statement, or any other document presented under
the 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 whatsoever so long as any such document appeared
to comply with the terms of the Letter of Credit;
(v) payment by Lender in good faith under the Letter of Credit
against presentation of a draft or any accompanying document which does not
strictly comply with the terms of the Letter of Credit; or any payment made
by Lender under any Letter of Credit to any Person purporting to be a
trustee in bankruptcy, debtor-in-possession, assignee for the benefit of
creditors, liquidator, receiver or other representative of or successor to
any beneficiary or any transferee of any Letter of Credit, including any
arising in connection with any proceeding under any Debtor Relief Laws;
(vi) the existence, character, quality, quantity, condition,
packing, value or delivery of any property purported to be represented by
documents presented in connection with any Letter of Credit or for any
difference between any such property and the character, quality, quantity,
condition, or value of such property as described in such documents;
(vii) the time, place, manner, order or contents of shipments or
deliveries of property as described in documents presented in connection
with any Letter of Credit or the existence, nature and extent of any
insurance relative thereto;
(viii) the solvency or financial responsibility of any party issuing
any documents in connection with a Letter of Credit;
(ix) any failure or delay in notice of shipments or arrival of any
property;
(x) any error in the transmission of any message relating to a
Letter of Credit not caused by Lender, or any delay or interruption in any
such message;
(xi) any error, neglect or default of any correspondent of Lender in
connection with a Letter of Credit;
(xii) any consequence arising from acts of God, wars, insurrections,
civil unrest, disturbances, labor disputes, emergency conditions or other
causes beyond the control of Lender;
(xiii) so long as Lender in good faith determines that the document
appears to comply with the terms of the Letter of Credit, the form,
accuracy, genuineness or legal effect of any contract or document referred
to in any document submitted to Lender in connection with a Letter of
Credit; and
(xiv) where Lender has acted in good faith under any other
circumstances whatsoever.
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In addition, Lender shall deliver the form of any proposed Letter of Credit
or amendment thereto to Borrower prior to issuing the same to any beneficiary.
Upon Borrower affirmatively notifying Lender that the same is acceptable, Lender
shall thereupon issue it to the beneficiary thereof. After giving any such
notice of acceptance, Borrower shall be conclusively deemed to have waived any
claim of noncompliance with Borrower's instructions or other irregularity in the
Letter of Credit against Lender and its correspondents with respect to such
Letter of Credit or amendment.
(g) Role of Lender. Each Borrower Party agrees that, in paying any drawing
under a Letter of Credit, Lender shall not have any responsibility to obtain any
document (other than any sight draft, certificates and documents expressly
required by the Letter of Credit) or to ascertain or inquire as to the validity
or accuracy of any such document or the authority of the Person executing or
delivering any such document. Borrower hereby assumes all risks of the acts or
omissions of any beneficiary or transferee with respect to its use of any Letter
of Credit; provided, however, that this assumption is not intended to, and shall
-------- -------
not, preclude Borrower's pursuing such rights and remedies as it may have
against the beneficiary or transferee at law or under any other agreement.
Neither Lender nor any of the respective correspondents, participants or
assignees of Lender, shall be liable or responsible for any of the matters
described in subsection (f) above. In furtherance and not in limitation of the
foregoing, Lender may accept documents that appear on their face to be in order,
without responsibility for further investigation, regardless of any notice or
information to the contrary, and Lender shall not be responsible for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason.
(i) Applicability of ISP98. Unless otherwise expressly agreed by the
Lender and Borrower when a Letter of Credit is issued, performance under Letters
of Credit by Lender, its correspondents, and beneficiaries will be governed by
the rules of the "International Standby Practices 1998" (ISP98) or such later
revision as may be published by the International Chamber of Commerce (the
"ICC").
---
(j) Letter of Credit Fee. On each Applicable Payment Date, Borrower shall
pay to Lender a Letter of Credit fee in a per annum amount equal to 1% times the
actual daily maximum amount available to be drawn under each Letter of Credit
since the later of the Closing Date and the previous Applicable Payment Date.
The minimum fee for any single Letter of Credit shall be $150 per annum.
(k) Issuance Fee and Documentary and Processing Charges Payable to Lender.
Borrower shall pay to Lender, upon demand, its customary issuance, documentary
and processing charges in accordance with its standard schedule, as from time to
time in effect, for any Letter of Credit Action or other occurrence relating to
a Letter of Credit for which such charges are customarily made. Such fees and
charges are nonrefundable.
2.04 Prepayments.
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(a) Optional Prepayments. Upon Requisite Notice to Lender not later than
the Requisite Time therefor, Borrower may from time to time voluntarily prepay
Loans in part in the Minimum Amount therefor or in full without premium or
penalty. All voluntary prepayments shall be subject to subsection (c) below.
(b) Outstandings in Excess of Commitments. If for any reason the
Outstanding Obligations exceed the Commitment as in effect or as reduced or
because of any limitation set forth in this Agreement or otherwise, Borrower
shall immediately prepay Loans and/or deposit cash in a Letter of Credit Cash
Collateral Account in an aggregate amount equal to such excess. Such prepayments
shall be subject to subsection (c) below.
(c) Provisions Applicable to all Prepayments. Any prepayment of Offshore
Rate Loans shall be accompanied by all accrued interest thereon, together with
the costs set forth in Section 3.05.
------------
2.05 Reduction or Termination of Commitment. Upon Requisite Notice to
Lender not later than the Requisite Time therefor, Borrower may from time to
time, without premium or penalty, permanently and irrevocably reduce the
Commitment in a Minimum Amount therefor to an amount not less than the
Outstanding Obligations at such time or terminate the Commitment. Any such
reduction or termination of the Commitment shall be accompanied by payment of
all accrued and unpaid commitment fees with respect to the portion of the
Commitment being reduced or terminated.
2.06 Principal and Interest.
(a) Principal. If not sooner paid, Borrower agrees to pay the outstanding
principal amount of each Loan on the Maturity Date.
(b) Interest. Subject to subsection (c) below, Borrower shall pay interest
on the unpaid principal amount of each Loan (before and after default, before
and after maturity, before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Laws) from the date
borrowed until paid in full (whether by acceleration or otherwise) on each
Applicable Payment Date at a rate per annum equal to (i) the Base Rate less
----
0.75% per annum for Base Rate Loans and (ii) the Offshore Rate plus 1% per annum
----
for Offshore Rate Loans.
(c) Default Rate. If any amount payable by any Borrower Party under any
Loan Document is not paid when due (after giving effect to any applicable grace
periods), it shall thereafter bear interest (after as well as before entry of
judgment thereon to the extent permitted by law) at a fluctuating interest rate
per annum at all times equal to the Default Rate to the fullest extent permitted
by applicable Law. Accrued and unpaid interest on past due amounts (including
interest on past due interest) shall be payable upon demand.
2.07 Commitment Fee. Borrower shall pay to Lender a Commitment fee equal to
20 basis points per annum times the actual daily amount by which the Commitment
-----
exceeds the Outstanding Obligations. The commitment fee shall accrue at all
times from the Closing Date
-23-
until the Maturity Date and shall be payable quarterly in arrears on each
Applicable Payment Date. The commitment fee shall be calculated quarterly in
arrears. The commitment fee shall accrue at all times, including at any time
during which one or more conditions in Section 4 are not met.
---------
2.08 Computation of Interest and Fees. Computation of interest on Base Rate
Loans when the Base Rate is determined by Lender's "prime rate" shall be
calculated on the basis of a year of 365 or 366 days, as the case may be, and
the actual number of days elapsed. Computation of all other types of interest
and all fees shall be calculated on the basis of a year of 360 days and the
actual number of days elapsed, which results in a higher yield to Lender than a
method based on a year of 365 or 366 days. Interest shall accrue on each Loan
for the day on which the Loan is made, and shall not accrue on a Loan, or any
portion thereof, for the day on which the Loan or such portion is paid, provided
--------
that any Loan that is repaid on the same day on which it is made shall bear
interest for one day.
2.09 Making Payments.
(a) Except as otherwise provided herein, all payments by Borrower shall be
made to Lender at its Lending Office, and all payments by Lender shall be made
to Borrower in the deposit account from time to time designated by Borrower to
Lender, in each case not later than the Requisite Time for such type of payment.
All payments received after such Requisite Time shall be deemed received on the
next succeeding Business Day. All payments shall be made in immediately
available funds in lawful money of the United States of America. All payments by
Borrower shall be made without condition or deduction for any counterclaim,
defense, recoupment or setoff.
(b) Subject to the definition of "Interest Period," if any payment to be
made by any Borrower Party shall come due on a day other than a Business Day,
payment shall instead be considered due on the next succeeding Business Day, and
such extension of time shall be reflected in computing interest and fees.
2.10 Funding Sources. Nothing in this Agreement shall be deemed to obligate
Lender to obtain the funds for any Loan in any particular place or manner or to
constitute a representation by Lender that it has obtained or will obtain the
funds for any Loan in any particular place or manner.
2.11 Master Subsidiary Guaranty. The Obligations shall be guarantied under
the Master Subsidiary Guaranty.
SECTION 3.
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 Taxes. (a) Any and all payments by Borrower to or for the account of
Lender under any Loan Document shall be made free and clear of and without
deduction for any and all present or future taxes, duties, levies, imposts,
deductions, assessments, fees, withholdings or
-24-
similar charges, and all liabilities with respect thereto, excluding taxes
---------
imposed on or measured by its net income, and franchise taxes imposed on it (in
lieu of net income taxes), by the jurisdiction (or any political subdivision
thereof) under the Laws of which Lender (or its lending office), as the case may
be, is organized (all such non-excluded taxes, duties, levies, imposts,
deductions, assessments, fees, withholdings or similar charges, and liabilities
being hereinafter referred to as "Taxes"). If Borrower shall be required by any
-----
Laws to deduct any Taxes from or in respect of any sum payable under any Loan
Document to Lender, (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section), Lender receives an amount equal to
the sum it would have received had no such deductions been made, (ii) Borrower
shall make such deductions, (iii) Borrower shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance with applicable
Laws, and (iv) within 30 days after the date of such payment, Borrower shall
furnish to Lender the original or a certified copy of a receipt evidencing
payment thereof.
(b) In addition, Borrower agrees to pay any and all present or future
stamp, court or documentary taxes and any other excise or property taxes or
charges or similar levies which arise from any payment made under any Loan
Document or from the execution, delivery, performance, enforcement or
registration of, or otherwise with respect to, any Loan Document (hereinafter
referred to as "Other Taxes").
-----------
(c) If Borrower shall be required by the Laws of any jurisdiction outside
the United States to deduct any Taxes from or in respect of any sum payable
under any Loan Document to Lender, Borrower shall also pay to Lender, at the
time interest is paid, such additional amount that Lender specifies as necessary
to preserve the after-tax yield (after factoring in United States (federal and
state) taxes imposed on or measured by net income) the Lender would have
received if such deductions (including deductions applicable to additional sums
payable under this Section) had not been made.
(d) Borrower agrees to indemnify Lender for the full amount of Taxes and
Other Taxes (including any Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this Section) paid by Lender and any
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto (provided that Lender shall have notified Borrower as soon as
--------
practicable after having made any such payment).
3.02 Illegality. If Lender determines that any Laws have made it unlawful,
or that any Governmental Authority has asserted that it is unlawful, for Lender
or its applicable Lending Office to make, maintain or fund Offshore Rate Loans,
or materially restricts the authority of Lender to purchase or sell, or to take
deposits of, Dollars in the applicable offshore Dollar market, or to determine
or charge interest rates based upon the Offshore Rate, then, on notice thereof
by Lender to Borrower, any obligation of Lender to make Offshore Rate Loans
shall be suspended until Lender notifies Borrower that the circumstances giving
rise to such determination no longer exist. Upon receipt of such notice,
Borrower shall, upon demand from Lender, prepay or Convert all Offshore Rate
Loans, either on the last day of the Interest Period thereof, if Lender may
lawfully continue to maintain such Offshore Rate Loans to such day, or
-25-
immediately, if Lender may not lawfully continue to maintain such Offshore Rate
Loans. Lender agrees to designate a different Lending Office if such designation
will avoid the need for such notice and will not, in the good faith judgment of
Lender, otherwise be disadvantageous to Lender.
3.03 Inability to Determine Rates. If, in connection with any Request for
Extension of Credit involving any Offshore Rate Loan, Lender determines that (a)
Dollar deposits are not being offered to banks in the applicable offshore Dollar
market for the applicable amount and Interest Period of the requested Offshore
Rate Loan, (b) adequate and reasonable means do not exist for determining the
underlying interest rate for such Offshore Rate Loan, or (c) such underlying
interest rate does not adequately and fairly reflect the cost to Lender of
funding such Offshore Rate Loan, Lender shall promptly notify Borrower.
Thereafter, the obligation of Lender to make or maintain such Offshore Rate Loan
shall be suspended until Lender revokes such notice. Upon receipt of such
notice, Borrower may revoke any pending request for an Offshore Rate Loan or,
failing that, be deemed to have converted such request into a request for a Base
Rate Loan in the amount specified therein.
3.04 Increased Cost and Reduced Return; Capital Adequacy.
(a) If Lender determines that any Laws:
(i) subject Lender to any Tax, duty, or other charge with respect
to any Offshore Rate Loans or its obligation to make Offshore Rate Loans,
or change the basis on which taxes are imposed on any amounts payable to
Lender under this Agreement in respect of any Offshore Rate Loans;
(ii) shall impose or modify any reserve, special deposit, or similar
requirement (other than the reserve requirement utilized in the
determination of the Offshore Rate) relating to any extensions of credit or
other assets of, or any deposits with or other liabilities or commitments
of, Lender (including the Commitment); or
(iii) shall impose on Lender or on the offshore Dollar interbank
market any other condition affecting this Agreement or any of such
extensions of credit or liabilities or commitments;
and the result of any of the foregoing is to increase the cost to Lender of
making, Converting into, Continuing, or maintaining any Offshore Rate Loans or
to reduce any sum received or receivable by Lender under this Agreement with
respect to any Offshore Rate Loans, then from time to time upon demand of
Lender, Borrower shall pay to Lender such additional amounts as will compensate
Lender for such increased cost or reduction.
(b) If after the date hereof, Lender determines that any change in or the
interpretation of any Laws of general application relating to capital adequacy
requirements have the effect of reducing the rate of return on the capital of
Lender or compliance by Lender (or its Lending Office) or any corporation
controlling Lender as a consequence of Lender's obligations hereunder (taking
into consideration its policies with respect to capital adequacy and Lender's
-26-
desired return on capital), then from time to time upon demand of Lender,
Borrower shall pay to Lender such additional amounts as will compensate Lender
for such reduction. Borrower shall not have any obligation under this Section
3.04(b) to the extent any reduction in the rate of return on capital of Lender
or any increased requirements regarding capital adequacy applicable to Lender
are directly or indirectly attributable to any willful misconduct of Lender or
any alleged unsafe, unsound or illegal practice engaged in by Lender.
3.05 Breakfunding Costs. Upon demand of Lender from time to time, Borrower
shall promptly compensate Lender for and hold Lender harmless from any loss,
cost or expense incurred by it as a result of:
(a) any Continuation, Conversion, payment or prepayment of any Loan other
than a Base Rate Loan on a day other than the last day of the Interest Period
for such Loan (whether voluntary, mandatory, automatic, by reason of
acceleration, or otherwise); or
(b) any failure by Borrower (for a reason other than the failure of Lender
to make a Loan) to prepay, borrow, Continue or Convert any Loan other than a
Base Rate Loan on the date or in the amount notified by Borrower;
including any loss of anticipated profits and any loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were obtained.
Borrower shall also pay any customary administrative fees charged by Lender in
connection with the foregoing.
3.06 Matters Applicable to all Requests for Compensation.
(a) If Lender claims compensation under this Section 3, it shall furnish
to Borrower a statement setting forth (with an explanation in reasonable detail)
the additional amount or amounts to be paid to it hereunder which shall be
conclusive in the absence of manifest error. In determining such amount, Lender
may use any reasonable averaging and attribution methods. Lender shall give
Borrower as much advance notice as is reasonably practical of its intention to
make a claim for payment under this Section 3 (with a demand for such additional
costs to be sent to Borrower as soon as reasonably practical thereafter), and
Lender shall not be entitled to compensation for any such additional amounts
relating to a period more than 90 days prior to the giving of such notice by
Lender (except to the extent that such additional costs were retroactively
applied against Lender beyond a period of 90 days) . For purposes of this
Section 3, Lender shall be deemed to have funded each Offshore Rate Loan at the
---------
Offshore Base Rate used in determining the Offshore Rate for such Loan by a
matching deposit or other borrowing in the applicable offshore Dollar interbank
market, whether or not such Offshore Rate Loan was in fact so funded.
-27-
3.07 Survival. All of Borrower's obligations under this Section 3 shall
survive termination of the Commitments and payment in full of all Obligations.
SECTION 4.
CONDITIONS PRECEDENT TO EXTENSIONS OF CREDIT
4.01 Conditions of Initial Extension of Credit. The obligation of Lender to
make the initial Extension of Credit is subject to satisfaction of the following
conditions precedent:
(a) Unless waived by Lender, Lender's receipt of the following, each of
which shall be originals or facsimiles (followed promptly by originals) unless
otherwise specified, each properly executed by a Responsible Officer of the
signing Borrower Party, each dated on, or in the case of third-party
certificates, recently before the Closing Date and each in form and substance
satisfactory to Lender and its legal counsel:
(i) executed counterparts of this Agreement, sufficient in number
for distribution to Lender and Borrower;
(ii) if requested by Lender, a Note executed by Borrower in favor of
Lender, in a principal amount equal to the Commitment;
(iii) such certificates of resolutions or other action, incumbency
certificates and/or other certificates of Responsible Officers of each
Borrower Party as Lender may require to establish the identities of and
verify the authority and capacity of each Responsible Officer thereof
authorized to act as a Responsible Officer thereof;
(iv) the articles or certificate of incorporation or organization of
Borrower and CPK Management Company as in effect on the Closing Date,
certified by the Secretary of State of California as of a recent date and
the bylaws of Borrower and CPK Management Company, Inc as in effect on the
Closing Date, certified by the Secretary or Assistant Secretary of Borrower
and CPK Management Company, Inc, respectively, as of the Closing Date;
provided, however, that such articles and bylaws need not be delivered
-------- -------
hereunder to the extent not different from those previously delivered to
Lender in connection with the Existing Credit Facility,
(v) a good standing certificate for Borrower and CPK Management
Company, Inc from the Secretary of State of California as of a recent date;
(vi) a certificate signed by a Responsible Officer of Borrower
certifying that the conditions specified in Sections 4.01(c) and 4.01(d)
--------------- ------
have been satisfied;
(vii) an opinion of counsel to Borrower in form and substance
satisfactory to Lender;
(viii) the Master Subsidiary Guaranty executed by each Domestic
Subsidiary;
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(ix) evidence that the Existing Credit Facility and all loan documents
related thereto are being terminated as of the Closing Date, all collateral
will be released thereunder and all accrued and outstanding fees, interest
and other amounts owing under the Existing Credit Facility are being paid
in full; and
(x) such other assurances, certificates, documents, consents or
opinions as Lender reasonably may require.
(b) Any fees required to be paid on or before the Closing Date shall have
been paid.
(c) The representations and warranties made by Borrower herein, or
which are contained in any certificate, document or financial or other statement
furnished at any time under or in connection herewith or therewith, shall be
correct in all material respects on and as of the Closing Date.
(d) Each Borrower Party shall be in compliance with all the terms and
provisions of the Loan Documents to which it is a party, and no Default or Event
of Default shall have occurred and be continuing.
(e) Other than litigation described on Schedule 5.05 hereto, the absence
-------------
of any action, suit, investigation or proceeding pending or threatened in any
court or before any arbitrator or governmental authority that purports (i) to
materially and adversely affect Borrower or its Subsidiaries, or (ii) to affect
any transaction contemplated hereby or the ability of Borrower and its
Subsidiaries under the Loan Documents to perform their respective obligations
thereunder.
(f) Unless waived by Lender, Borrower shall have paid all Attorney Costs
of Lender to the extent invoiced prior to or on the Closing Date, plus such
additional amounts of Attorney Costs as shall constitute its reasonable estimate
of Attorney Costs incurred or to be incurred by it through the closing
proceedings (provided that such estimate shall not thereafter preclude final
settling of accounts between Borrower and Lender).
4.02 Conditions to all Extensions of Credit. In addition to any applicable
conditions precedent set forth elsewhere in this Section 4 or in Section 2, the
--------- ---------
obligation of Lender to honor any Request for Extension of Credit is subject to
the following conditions precedent:
(a) the representations and warranties of Borrower contained in Section 5,
---------
or which are contained in any certificate, document or financial or other
statement furnished at any time under or in connection herewith or therewith,
shall be correct on and as of the date of such Extension of Credit, except to
the extent that such representations and warranties specifically refer to an
earlier date.
(b) no Default or Event of Default exists, or would result from such
proposed Extension of Credit.
(c) Lender shall have timely received a Request for Extension of Credit
by Requisite Notice by the Requisite Time therefor.
-29-
(d) Lender shall have received, in form and substance satisfactory to it,
such other assurances, certificates, documents or consents related to the
foregoing as Lender reasonably may require.
Each Request for Extension of Credit by Borrower shall be deemed to be a
representation and warranty that the conditions specified in Sections 4.02(a)
---------------
and (b) have been satisfied and on and as of the date of such Extension of
-
Credit.
Section 5.
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lender that:
5.01 Existence and Qualification; Power; Compliance with Laws. Except as
described on Schedule 5.01 hereto, each Borrower Party is a corporation or
-------------
partnership duly organized or formed, validly existing and in good standing
under the Laws of the state of its incorporation or organization, has the power
and authority and the legal right to own and operate its properties, to lease
the properties it operates and to conduct its business, is duly qualified and in
good standing under the Laws of each jurisdiction where its ownership, lease or
operation of properties or the conduct of its business requires such
qualification, and is in compliance with all Laws except to the extent that
noncompliance does not have a Material Adverse Effect.
5.02 Power; Authorization; Enforceable Obligations. Each Borrower Party has
the power and authority and the legal right to make, deliver and perform each
Loan Document to which it is a party and Borrower has power and authority to
borrow hereunder and has taken all necessary action to authorize the borrowings
on the terms and conditions of this Agreement and to authorize the execution,
delivery and performance of this Agreement and the other Loan Documents to which
it is a party. No consent or authorization of, filing with, or other act by or
in respect of any Governmental Authority, is required in connection with the
borrowings hereunder or with the execution, delivery, performance, validity or
enforceability of this Agreement or any of the other Loan Documents. The Loan
Documents have been duly executed and delivered by each Borrower Party, and
constitute a legal, valid and binding obligation of each Borrower Party,
enforceable against each Borrower Party in accordance with their respective
terms, except as enforceability may be limited by applicable Debtor Relief Laws
affecting the enforcement of creditors' rights generally or by equitable
principles relating to enforceability.
5.03 No Legal Bar. The execution, delivery, and performance by each
Borrower Party of the Loan Documents to which it is a party and compliance with
the provisions thereof have been duly authorized by all requisite action on the
part of such Borrower Party and do not and will not (a) violate or conflict
with, or result in a breach of, or require any consent, except where such
violation, conflict, breach or failure to obtain consent would not have a
Material Adverse Effect, under (i) any Organization Documents of such Borrower
Party or any of its Subsidiaries, (ii) any applicable Laws, rules, or
regulations or any order, writ, injunction, or decree of any Governmental
Authority or arbitrator, or (iii) any Contractual Obligation of such Borrower
Party
-30-
or any of its Subsidiaries or by which any of them or any of their property is
bound or subject, (b) constitute a default under any such agreement or
instrument, except where such default would not have a Material Adverse Effect,
or (c) result in, or require, the creation or imposition of any Lien on any
material portion of the properties of such Borrower Party or any of its
Subsidiaries.
5.04 Financial Statements; No Material Adverse Effect.
(a) The Audited Financial Statements and the Interim Financial Statements
(i) were prepared in accordance with GAAP (excluding, in the case of the Interim
Financial Statements, footnotes) consistently applied throughout the period
covered thereby, except as otherwise expressly noted therein; (ii) fairly
present the financial condition of Borrower and its Subsidiaries as of the date
thereof and their results of operations for the period covered thereby in
accordance with GAAP consistently applied throughout the period covered thereby,
except as otherwise expressly noted therein (and, in the case of the Interim
Financial Statements, year-end audit adjustments); and (iii) show all material
indebtedness and other liabilities, direct or contingent, of Borrower and its
Subsidiaries as of the date thereof, including liabilities for taxes, material
commitments and Indebtedness in accordance with GAAP consistently applied
throughout the period covered thereby.
(b) Since the date of the Audited Financial Statements, there has been no
event or circumstance which has a Material Adverse Effect.
5.05 Litigation. Except as described on Schedule 5.05 hereto, no
-------------
litigation, investigation or proceeding of or before an arbitrator or
Governmental Authority is pending or, to the best knowledge of Borrower,
threatened by or against any Borrower Party or any of its Subsidiaries or
against any of their properties or revenues which, if determined adversely,
could have a Material Adverse Effect.
5.06 No Default. Neither any Borrower Party nor any of its Subsidiaries
are in default under or with respect to any Contractual Obligation which could
have a Material Adverse Effect, and no Default or Event of Default has occurred
and is continuing or will result from the consummation of this Agreement or any
of the other Loan Documents, or the making of the Extensions of Credit
hereunder.
5.07 Ownership of Property; Liens. Each Borrower Party and its
Subsidiaries have valid fee or leasehold interests in all real property which
they use in their respective businesses, and each Borrower Party and their
respective Subsidiaries have good and marketable title to all their other
material property, and none of such property is subject to any Lien, except as
------
permitted in Section 7.02.
------------
5.08 Taxes. Each Borrower Party and its Subsidiaries have filed all tax
returns which are required to be filed, and have paid, or made provision for the
payment of, all taxes with respect to the periods, property or transactions
covered by said returns, or pursuant to any assessment received by such Borrower
Party or its respective Subsidiaries, except (a) such taxes, if any, as are
------
being contested in good faith by appropriate proceedings and as to which
adequate reserves have been established and maintained, and (b) immaterial
taxes; provided, however, that
-------- -------
-31-
in each case no material item or portion of property of any Borrower Party or
any of its Subsidiaries is in jeopardy of being seized, levied upon or
forfeited.
5.09 Margin Regulations; Investment Company Act; Public Utility Holding
Company Act.
(a) No Borrower Party is engaged or will engage, principally or as one of
its important activities, in the business of extending credit for the purpose of
"purchasing" or "carrying" "margin stock" within the respective meanings of each
of the quoted terms under Regulation U of the Board of Governors of the Federal
Reserve System as now and from time to time hereafter in effect. No part of the
proceeds of any Extensions of Credit hereunder will be used for "purchasing" or
"carrying" "margin stock" as so defined or for any purpose which violates, or
which would be inconsistent with, the provisions of Regulations U or X of such
Board of Governors.
(b) No Borrower Party or any of its Subsidiaries (i) is a "holding
company," or a "subsidiary company" of a "holding company," or an "affiliate" of
a "holding company" or of a "subsidiary company" of a "holding company," within
the meaning of the Public Utility Holding Company Act of 1935, or (ii) is or is
required to be registered as an "investment company" under the Investment
Company Act of 1940.
5.10 No ERISA Plans. No Borrower Party or any ERISA Affiliate of any
Borrower Party sponsors or maintains or contributes (or has an obligation to
contribute) to any employee pension benefit plan or employee benefit plan (both
as defined in ERISA) insured by the Pension Benefit Guaranty Corporation or
subject to Title IV of ERISA, or in the case of a multiple employer plan (as
described in Section 4064(a) of ERISA) has made contributions at any time during
the immediately preceding five plan years.
5.11 Intangible Assets. Each Borrower Party and its Subsidiaries own, or
possess the right to use, all trademarks, trade names, servicemarks, franchises,
licenses and other intangible assets that are used in the conduct of their
respective businesses as now operated, and none of such items, to the best
knowledge of Borrower, conflicts with the valid trademark, trade name or
intangible asset of any other Person to the extent that such conflict has a
Material Adverse Effect.
5.12 Compliance With Laws. Each Borrower Party and its Subsidiaries are in
compliance with all Laws that are applicable to it except for such noncompliance
which would not have a Material Adverse Effect.
5.13 Environmental Compliance. To the best knowledge of Borrower, there
are no violations of Environmental Laws or claims alleging potential liability
or responsibility for violation of any Environmental Law which, individually or
in the aggregate, would have a Material Adverse Effect.
5.14 Insurance. The properties of each Borrower Party and its Subsidiaries
are insured with financially sound and reputable insurance companies not
Affiliates of Borrower, in such amounts, with such deductibles and covering such
risks as are customarily carried by
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companies engaged in similar businesses and owning similar properties in
localities where Borrower or such Subsidiary operates.
5.15 Subsidiaries. Schedule 5.15 correctly sets forth for each direct or
-------------
indirect Subsidiary of Borrower, as of the Closing Date, its name, jurisdiction
of formation, type of legal entity and the amount, type and ownership of all
issued and outstanding equity interests and specifies which Subsidiaries are, as
of the Closing Date, Domestic Subsidiaries and Foreign Subsidiaries. Except as
described in Schedule 5.15, Borrower does not, as of the Closing Date, own
-------------
directly or indirectly any capital stock, partnership or other equity interest
or debt security which is convertible, or exchangeable, for capital stock or
partnership or other equity interests in any Person which, if fully or partially
exercised by any party, would be a Subsidiary. Unless otherwise indicated on in
Schedule 5.15, all outstanding equity interests in each Subsidiary as of the
-------------
Closing Date are owned of record and beneficially by Person specified thereon,
there are no outstanding options, warrants or other rights to purchase capital
stock of any such Subsidiary, and all such equity interests so owned are duly
authorized, validly issued, fully paid and non-assessable, and were issued in
compliance with all applicable state and federal securities and other Laws, and
are free and clear of all Liens except for Ordinary Course Liens.
5.16 Disclosure. No statement, information, report, representation, or
warranty made by any Borrower Party in any Loan Document or furnished to Lender
from time to time in connection with any Loan Document contains any untrue
statement of a material fact or omits to state any material fact necessary to
make the statements herein or therein not misleading on and as of the date so
made or furnished.
SECTION 6.
AFFIRMATIVE COVENANTS
So long as any Obligation remains unpaid or unperformed, or any portion of
the Commitment remains outstanding, Borrower shall, and shall (except in the
case of Borrower's reporting covenants), cause each of its Subsidiaries, to:
6.01 Financial Statements. Deliver to Lender in form and detail
satisfactory to Lender:
(a) as soon as available, but in any event within 120 days after the end
of each fiscal year of Borrower, a consolidated balance sheet of Borrower and
its Subsidiaries as at the end of such fiscal year, and the related consolidated
statements of income and cash flows for such fiscal year, setting forth in each
case in comparative form the figures for the previous fiscal year, all in
reasonable detail, audited and accompanied by a report and opinion of Ernst &
Young or another of the "big five" nationally recognized independent certified
public accountants, which report and opinion shall be prepared in accordance
with GAAP and shall not be subject to any qualifications or exceptions as to the
scope of the audit nor to any qualifications and exceptions not reasonably
acceptable to Lender; and
-33-
(b) as soon as available, but in any event within 45 days after the end
of each of the first three fiscal quarters of each fiscal year of Borrower, a
consolidated balance sheet of Borrower and its Subsidiaries as at the end of
such fiscal quarter, and the related consolidated statements of income and cash
flows for such fiscal quarter and for the portion of Borrower's fiscal year then
ended, setting forth in each case in comparative form the figures for the
corresponding fiscal quarter of the previous fiscal year and the corresponding
portion of the previous fiscal year, all in reasonable detail and certified by a
Responsible Officer of Borrower as fairly presenting the financial condition,
results of operations and cash flows of Borrower and its Subsidiaries in
accordance with GAAP, subject only to normal year-end audit adjustments and the
absence of footnotes.
6.02 Certificates, Notices and Other Information. Deliver to Lender in
form and detail satisfactory to Lender:
(a) concurrently with the delivery of the financial statements referred
to in Section 6.01(a), a certificate of its independent certified public
---------------
accountants certifying such financial statement and stating that in making the
examination necessary therefor no knowledge was obtained of any Default or Event
of Default hereunder or, if any such Default or Event of Default shall exist,
stating the nature and status of such event;
(b) concurrently with the delivery of the financial statements referred
to in Sections 6.01(a) and (b), a duly completed Compliance Certificate signed
---------------- ---
by a Responsible Officer of Borrower;
(c) if requested by Lender, (i) a report signed by a Responsible Officer
of Borrower in a format satisfactory to Lender detailing the revenue and the
portion of Consolidated EBITDA attributable to each store and (ii) a quarterly
store comparison report in the form previously delivered to Lender;
(d) as soon as practicable, and in any event within 90 days after the end
of each fiscal year of Borrower, an operating budget by fiscal quarter for the
next fiscal year, including projected statements of operations and schedule of
capital expenditures, all in reasonable detail and in a format acceptable to
Lender, signed by a Responsible Officer of Borrower;
(e) promptly after request by Lender, copies of any detailed audit
reports, management letters or recommendations submitted to the board of
directors (or the audit committee of the board of directors) of Borrower by
independent accountants in connection with the accounts or books of Borrower or
any of its Subsidiaries, or any audit of any of them;
(f) promptly after the same are available, copies of each annual report,
proxy or financial statement or other report or communication, if any, sent to
the stockholders of Borrower, and copies of all annual, regular, periodic and
special reports and registration statements, if any, which Borrower may file or
be required to file with the Securities and Exchange Commission under Section 13
or 15(d) of the Securities Exchange Act of 1934, as amended, and not otherwise
required to be delivered to Lender pursuant hereto;
-34-
(g) promptly after the occurrence thereof, notice of any Default or Event
of Default;
(h) notice of any material change in accounting policies or financial
reporting practices by Borrower or any of its Subsidiaries;
(i) promptly after the commencement thereof, notice of any litigation,
investigation, proceeding or judgment affecting any Borrower Party where the
amount involved exceeds $2,000,000, or in which injunctive relief or similar
relief is sought, which relief, if granted, would have a Material Adverse
Effect; and
(j) promptly, such other data and information as from time to time may be
reasonably requested by Lender.
Each notice pursuant to this Section shall be accompanied by a statement of
a Responsible Officer of Borrower setting forth details of the occurrence
referred to therein and stating what action Borrower has taken and proposes to
take with respect thereto.
6.03 Payment of Taxes. Pay and discharge when due all taxes, assessments,
and governmental charges, Ordinary Course Liens or levies imposed on any
Borrower Party or its Subsidiaries or on its income or profits or any of its
property, except for any such tax, assessment, charge, or levy which is an
Ordinary Course Lien under subsection (b) of the definition of such term.
6.04 Preservation of Existence. Preserve and maintain its existence,
licenses, permits, rights, franchises and privileges necessary or desirable in
the normal conduct of its business, except where failure to do so does not have
a Material Adverse Effect.
6.05 Maintenance of Properties. Except as permitted by section 7.04,
------------
maintain, preserve and protect all of its material properties and equipment
necessary in the operation of its business in good order and condition, subject
to wear and tear in the ordinary course of business, and not permit any waste of
its properties.
6.06 Maintenance of Insurance. Maintain liability and casualty insurance
with financially sound and reputable insurance companies in such amounts with
such deductibles and against such risks as is customary for similarly situated
businesses.
6.07 Compliance With Laws.
(a) Comply with the requirements of all applicable Laws and orders of any
Governmental Authority, noncompliance with which has a Material Adverse Effect.
(b) Conduct its operations and keep and maintain its property in material
compliance with all Environmental Laws.
6.08 Inspection Rights. Not more than once each fiscal quarter (or, during
the existence of a Default or Event of Default, as often as requested) and upon
reasonable notice and during regular business hours, permit Lender, or any
employee, agent or representative thereof,
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to examine, audit and make copies and abstracts from the Borrower Parties'
records and books of account and to visit and inspect their properties and to
discuss their affairs, finances and accounts with any of their officers and key
employees, and, upon request, furnish promptly to Lender true copies of all
financial information made available to their senior management.
6.09 Keeping of Records and Books of Account. Keep adequate records and
books of account reflecting all financial transactions in conformity with GAAP,
consistently applied, and in material conformity with all applicable
requirements of any Governmental Authority having regulatory jurisdiction over
Borrower or any of its Subsidiaries.
6.10 Compliance With Agreements. Promptly and fully comply with all
Contractual Obligations to which any one or more of them is a party, except for
------
any such Contractual Obligations (a) where nonperformance would not cause a
Default or Event of Default, (b) then being contested by any of them in good
faith by appropriate proceedings, or (c) where the failure to comply therewith
does not have a Material Adverse Effect.
6.11 Use of Proceeds. Use the proceeds of Extensions of Credit to finance
tenant improvements, to finance the acquisition of furniture, fixtures and
equipment, to refinance existing bank debt, to make Investments and for working
capital, in each case not otherwise in contravention of this Agreement.
6.12 Additional Guarantors. Upon any Person becoming a direct or indirect
Domestic Subsidiary of Borrower (excluding existing inactive Subsidiaries),
Borrower shall, within 60 days of such Person becoming a Subsidiary, do the
following, each in form and substance satisfactory to Lender:
(a) cause such Subsidiary to become a Guarantor under the Master
Subsidiary Guaranty by executing and delivering a Joinder Agreement with respect
thereto;
(b) cause such Subsidiary, to the extent not previously delivered to
Lender, to deliver documents of the type specified in Section 4.01(a)(iii) and,
--------------------
with respect to a Subsidiary representing more than 10% of Shareholder's Equity,
in Section 4.01(a)(iv); and
-------------------
(c) deliver an officer's certificate signed by a Responsible Officer of
Borrower certifying to the effect that, among other things, (i) such
Subsidiary's obligations under the Loan Documents to which it is a party are
legal, valid, binding and enforceable against such Subsidiary, (ii) the
execution, delivery and performance of the Loan Documents by such Subsidiary
will not violate any law, decree or judgment to which such Subsidiary is a party
or by which its assets are bound and (iii) no government approvals, consents,
registrations or filings, are required by such Subsidiary; and
(d) such other assurances, certificates, documents, consents or opinions
as Lender reasonably may require.
Notwithstanding this Section 6.12, CPK I, Limited Partnership, an Illinois
------------
limited partnership and CPK Water Tower Limited Partnership, an Illinois limited
partnership, shall not
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be required to execute or deliver any Loan Documents or otherwise comply with
this Section 6.12.
------------
SECTION 7.
NEGATIVE COVENANT
So long as any Obligations remain unpaid or unperformed, or any portion of
the Commitment remains outstanding, Borrower shall not, nor shall it permit any
of its Subsidiaries to, directly or indirectly:
7.01 Indebtedness. Create, incur, assume or suffer to exist any
Indebtedness, except:
------
(a) Indebtedness outstanding on the date hereof and listed on Schedule
--------
7.01 and any refinancings, refundings, renewals or extensions thereof, provided
---- --------
that the amount of such Indebtedness is not increased at the time of such
refinancing, refunding, renewal or extension except by an amount equal to the
premium or other amount paid, and fees and expenses incurred, in connection with
such refinancing and by an amount equal to any utilized commitments thereunder;
(b) Ordinary Course Indebtedness;
(c) secured purchase money Indebtedness, including Capitalized Lease
Obligations, relating to the acquisition of personal property, provided that
--------
such Indebtedness (i) does not exceed $4,000,000 in the aggregate at any time,
(ii) does not exceed the cost to Borrower or its Subsidiary of the personal
property acquired with the proceeds of such Indebtedness and (iii) is incurred
within 12 months following the date of the acquisition of such personal
property; and
(d) other unsecured Indebtedness so long as no Default or Event of
Default exists or would result therefrom.
7.02 Liens and Negative Pledges. Incur, assume or suffer to exist, any
Lien or Negative Pledge upon any of its property, assets or revenues, whether
now owned or hereafter acquired, except:
------
(a) Liens and Negative Pledges existing on the date hereof and listed on
Schedule 7.01 and any renewals or extensions thereof, provided that the property
------------- --------
covered thereby is not increased and any renewal or extension of the obligations
secured or benefited thereby is permitted by Section 7.01(a);
---------------
(b) Ordinary Course Liens; and
(c) Liens on assets securing Indebtedness permitted under Section
7.01(c), including any interest or title of a lessor under any Capitalized
Lease, provided that any such Lien does not encumber any property other than
assets constructed or acquired with the proceeds of such Indebtedness.
-37-
7.03 Fundamental Changes. Merge or consolidate with or into any Person or
liquidate, wind-up or dissolve itself, or permit or suffer any liquidation or
dissolution or sell all or substantially all of its assets, except, that so long
------
as no Default or Event of Default exists or would result therefrom:
(a) any Subsidiary of Borrower may merge (i) with Borrower provided that
Borrower shall be the continuing or surviving corporation, (ii) with any one or
more Subsidiaries of Borrower, and (iii) with any joint ventures, partnerships
and other Persons, so long as such joint ventures, partnerships and other
Persons will, as a result of making such merger and all other contemporaneous
related transactions, become a Subsidiary of Borrower; provided that when any
--------
wholly-owned Subsidiary of Borrower is merging into another Subsidiary of
Borrower, the wholly-owned Subsidiary of Borrower shall be the continuing or
surviving Person;
(b) any Subsidiary of Borrower may sell all or substantially all of its
assets (upon voluntary liquidation or otherwise), to Borrower or any of its
Subsidiaries; provided that when any wholly-owned Subsidiary of Borrower is
--------
selling all or substantially all of its assets to another Subsidiary of
Borrower, the Subsidiary acquiring such assets shall be a wholly-owned
Subsidiary of Borrower; and
(c) to the extent permitted by Section 7.05(d), Borrower may liquidate
---------------
two limited partnerships of which it is the general partner, as disclosed to
Lender prior to the Closing Date.
7.04 Dispositions. Make any Dispositions, except:
------
(a) Ordinary Course Dispositions;
(b) Dispositions permitted by Section 7.03; and
------------
(c) Other Dispositions so long as no Default or Event of Default exists
or would result therefrom and Borrower complies with Section 2.05(b) to the
---------------
extent applicable.
7.05 Investments. Make any Investments, except:
------
(a) Investments existing on the date hereof;
(b) Ordinary Course Investments;
(c) Investments permitted by Section 7.03(a) and (b); and
--------------- ---
(d) additional Investments after the Closing Date which, together with
the costs incurred in liquidating the limited partnerships permitted by Section
-------
7.03(c), do not exceed $4,000,000 in the aggregate.
-------
7.06 Lease Obligations. Create or suffer to exist any obligations for the
payment of rent for any property under lease or agreement to lease, except:
------
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(a) leases in existence on the date hereof and any renewal, extension or
refinancing thereof; and
(b) leases (other than Capitalized Lease Obligations permitted by
Section 7.01(c)) entered into or assumed by Borrower or any of its Subsidiaries
---------------
after the date hereof in the ordinary course of business;
7.07 Restricted Payments. Make any Restricted Payments, except purchases
------
by Borrower of capital stock owned by employees upon their termination.
7.08 ERISA. Together with any ERISA Affiliate of any Borrower Party,
sponsor or maintain or contribute (or have or incur any obligation to
contribute) to any employee pension benefit plan or employee benefit plan (both
as defined in ERISA) insured by the Pension Benefit Guaranty Corporation or
subject to Title IV of ERISA, or in the case of a multiple employer plan (as
described in Section 4064(a) of ERISA) have made contributions at any time
during the immediately preceding five plan years.
7.09 Change in Nature of Business. Make any fundamental change in the
nature of the business of any Borrower Party as conducted and as proposed to be
conducted as of the date hereof.
7.10 Transactions with Affiliates. Enter into any transaction of any kind
with any Affiliate of Borrower which is not a Guarantor other than arm's-length
transactions which are otherwise permitted hereunder.
7.11 Financial Covenants.
(a) Consolidated Net Worth. Permit Consolidated Net Worth at any time to
be less than the sum of (a) $71,419,200, (b) an amount equal to 50% of the Net
Income earned in each fiscal quarter ending after October 1, 2000 (with no
deduction for a net loss in any such fiscal quarter) and (c) an amount equal to
(i) 100% of the aggregate increases in Shareholders' Equity of Borrower and its
Subsidiaries after the date hereof by reason of the issuance and sale of capital
stock of Borrower (excluding up to an aggregate of $500,000 received by Borrower
---------
upon the exercise of stock options by employees, directors and consultants).
(b) Fixed Charge Coverage Ratio. Permit the Fixed Charge Coverage Ratio
as of the end of any fiscal quarter of Borrower to be less than 1.65 to 1 at any
time.
(c) Leverage Ratio. Permit the Leverage Ratio as of the end of any fiscal
quarter of Borrower to be greater than 1.00 to 1 at any time.
7.12 Change in Auditors. Change the certified public accountants auditing
the books of Borrower except to another of the "big five" nationally recognized
independent certified public accountants.
-39-
SECTION 8.
EVENTS OF DEFAULT AND REMEDIES
8.01 Events of Default. Any one or more of the following events shall
constitute an Event of Default:
(a) Borrower fails to pay any principal on any Outstanding Obligation
(other than fees) as and on the date when due; or
(b) Borrower fails to pay any interest on any Outstanding Obligation, or
any commitment fees due hereunder within three days after the date when due; or
fails to pay any other fees or amount payable to Lender under any Loan Document
within five days after the date due; or
(c) Any default occurs in the observance or performance of any agreement
contained in Sections 6.01, 6.02, 6.08 or 7; provided, however, that with
------------- ---- ---- - -------- -------
respect to a default under Section 7.02 which is capable of being cured, such
------------
default remains uncured after 60 days; or
(d) The occurrence of an Event of Default (as such term is or may
hereafter be specifically defined in any other Loan Document) under any other
Loan Document; or any Borrower Party fails to perform or observe any other
covenant or agreement (not specified in subsections (a), (b) or (c) above)
contained in any Loan Document on its part to be performed or observed and such
failure continues for 30 days; or
(e) Any representation or warranty in any Loan Document or in any
certificate, agreement, instrument or other document made or delivered by any
Borrower Party pursuant to or in connection with any Loan Document proves to
have been incorrect in any material respect when made or deemed made; or
(f) (i) (x) any Borrower Party defaults in any payment when due of
principal of or interest on any Indebtedness (other than Indebtedness
hereunder), (y) any Borrower Party defaults in the observance or performance of
any other agreement or condition relating to any Indebtedness (other than
Indebtedness hereunder) or contained in any instrument or agreement evidencing,
securing or relating thereto, or (z) any other event shall occur, in each case,
the effect of which default or other event is to cause, or to permit the holder
or holders of such Indebtedness (or a trustee or agent on behalf of such holder
or holders or beneficiary or beneficiaries) to cause, with the giving of notice
if required, Indebtedness having an aggregate principal amount in excess of
$3,500,000 to be demanded or become due (automatically or otherwise) prior to
its stated maturity, or any Guaranty Obligation in such amount to become payable
or cash collateral in respect thereof to be demanded, or any Borrower Party is
unable or admits in writing its inability to pay its debts as they mature; or
(ii) the occurrence under any Swap Contract of an Early Termination Date (as
defined in such Swap Contract) resulting from (x) any event of default under
such Swap Contract as to which Borrower or any Subsidiary is the Defaulting
Party (as defined in such Swap Contract) or (y) any Termination Event occurs
under any Swap Contract (as defined therein) as to which Borrower or any
Subsidiary is an Affected
-40-
Party (as so defined), which, in either event, the Swap Termination Value owed
by Borrower or such Subsidiary as a result thereof is greater than $3,500,000;
or
(g) Any Principal Loan Document, at any time after its execution and
delivery and for any reason other than the agreement of Lender or satisfaction
in full of all the Obligations, ceases to be in full force and effect or is
declared by a court of competent jurisdiction to be null and void, invalid or
unenforceable in any material respect; or any Borrower Party denies that it has
any or further liability or obligation under any Principal Loan Document, or
purports to revoke, terminate or rescind any Principal Loan Document; or
(h) Any final judgments or arbitration awards are entered against
Borrower or any of its Subsidiaries, or Borrower or any of its Subsidiaries
enters into any settlement agreements with respect to any litigation or
arbitration, in an aggregate amount of $3,500,000 or more in excess of any
insurance coverage, provided that the insurer has issued a letter of
responsibility for payment up to the amount of insurance coverage; or
(i) A final judgment against any Borrower Party is entered for the
payment of money in excess of $3,500,000, or any non-monetary final judgment is
entered against any Borrower Party which has a Material Adverse Effect and, in
each case if such judgment remains unsatisfied without procurement of a stay of
execution within 30 calendar days after the date of entry of judgment or, if
earlier, five days prior to the date of any proposed sale, or any writ or
warrant of attachment or execution or similar process is issued or levied
against all or any material part of the property of any such Person and is not
released, vacated or fully bonded within 30 calendar days after its issue or
levy; or
(j) Any Borrower Party or any of its Subsidiaries institutes or
consents to the institution of any proceeding under Debtor Relief Laws, or makes
an assignment for the benefit of creditors; or applies for or consents to the
appointment of any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer for it or for all or any material part of its
property; or any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer is appointed without the application or consent
of that Person and the appointment continues undischarged or unstayed for 60
calendar days; or any proceeding under Debtor Relief Laws relating to any such
Person or to all or any part of its property is instituted without the consent
of that Person and continues undismissed or unstayed for 60 calendar days, or an
order for relief is entered in any such proceeding; or
(l) Any event occurs which has a Material Adverse Effect; or
(m) the occurrence of a Change in Control.
8.02 Remedies Upon Event of Default. Without limiting any other
rights or remedies of Lender provided for elsewhere in this Agreement, the Loan
Documents, or by applicable Law, or in equity, or otherwise:
(a) Upon the occurrence of any Event of Default other than an Event
----- ----
of Default described in Section 8.01(j), Lender may terminate the Commitment
---------------
and/or declare all or any
-41-
part of the unpaid principal of all Loans, all interest accrued and unpaid
thereon and all other amounts payable under the Loan Documents to be immediately
due and payable, whereupon the same shall become and be immediately due and
payable, without protest, presentment, notice of dishonor, demand or notice of
any kind, all of which are expressly waived by Borrower. Upon the occurrence,
and during the continuance, of any such Event of Default, Lender may demand
immediate payment by Borrower of an amount equal to the aggregate amount of all
outstanding Letters of Credit to be held in a Letter of Credit Cash Collateral
Account.
(b) Upon the occurrence of any Event of Default described in Section
-------
8.01(j), the Commitment and all other obligations of Lender under the Loan
------
Documents shall automatically terminate without notice to or demand upon
Borrower, which are expressly waived by Borrower, and the unpaid principal of
all Loans, all interest accrued and unpaid thereon and all other amounts payable
under the Loan Documents shall be immediately due and payable, without protest,
presentment, notice of dishonor, demand or notice of any kind, all of which are
expressly waived by Borrower. In addition, an amount equal to the aggregate
amount of all outstanding Letters of Credit shall be immediately due and payable
to Lender without notice to or demand upon Borrower, which are expressly waived
by Borrower, to be held in a Letter of Credit Cash Collateral Account.
(c) Upon the occurrence of any Event of Default, Lender, without
notice to (except as expressly provided for in any Loan Document) or demand upon
Borrower, which are expressly waived by Borrower (except as to notices and
demands expressly provided for in any Loan Document), may proceed to protect,
exercise and enforce its rights and remedies under the Loan Documents against
any Borrower Party and such other rights and remedies as are provided by Law or
equity.
(d) The order and manner in which Lender's rights and remedies are to
be exercised shall be determined by Lender in its sole and absolute discretion.
Regardless of how Lender may treat payments for the purpose of its own
accounting, for the purpose of computing the Obligations hereunder, payments
shall be applied first, to costs and expenses (including Attorney Costs)
incurred by Lender, second, to the payment of accrued and unpaid interest on the
Loans to and including the date of such application, third, to the payment of
the unpaid principal of the Loans, and fourth, to the payment of all other
amounts (including fees) then owing to Lender under the Loan Documents. No
application of payments will cure any Event of Default, or prevent acceleration,
or continued acceleration, of amounts payable under the Loan Documents, or
prevent the exercise, or continued exercise, of rights or remedies of Lender
hereunder or thereunder or at Law or in equity.
SECTION 9.
MISCELLANEOUS
9.01 Amendments; Consents. No amendment, modification, supplement,
extension, termination or waiver of any provision of this Agreement or any other
Loan Document, no approval or consent thereunder, and no consent to any
departure by any Borrower Party therefrom shall be effective unless in writing
signed by Lender and any Borrower Parties party
-42-
thereto, and each such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
9.02 Transmission and Effectiveness of Communications and Signatures.
(a) Modes of Delivery. Except as otherwise provided in any Loan
Document, notices, requests, demands, directions, agreements and documents
delivered in connection with the Loan Documents (collectively, "communications")
--------------
shall be transmitted by Requisite Notice to the number and address set forth on
Schedule 9.02, may be delivered by the following modes of delivery, and shall be
-------------
effective as follows:
Mode of Delivery Effective on earlier of actual receipt and:
--------------------------------------------------------------------------------
Courier Scheduled delivery date
Facsimile When transmission in legible form complete
Fourth Business Day after deposit in U.S.
Mail mail first class postage pre-paid
Personal delivery When received
Telephone When conversation completed
provided, however, that communications delivered to Lender pursuant to Section 2
-------- ------- ---------
shall not be effective until actually received by Lender; provided, further,
-------- -------
that any notice received on other than a Business Day shall not be effective
until the next succeeding Business Day.
(b) Reliance by Lender. Lender shall be entitled to rely and act in
good faith on any communications purportedly given by or on behalf of any
Borrower Party even if such communications (i) were not made in a manner
specified herein, (ii) were incomplete, or (iii) were not preceded or followed
by any other notice specified herein. Borrower shall indemnify Lender from any
loss, cost, expense or liability as a result of relying on any communications
permitted herein.
(c) Effectiveness of Facsimile Documents and Signatures. Documents
and signatures on communications may be transmitted by facsimile unless Lender
in its sole and absolute discretion otherwise notifies the sending party. The
effectiveness of any such signatures accepted by Lender shall, subject to
applicable Law, have the same force and effect as manual signatures and shall be
binding on all Borrower Parties and Lender. Lender may also require that any
such signature be confirmed by a manually-signed hardcopy thereof; provided,
--------
however, that the failure to deliver or request any such manually-signed
-------
hardcopy confirmation shall not affect the effectiveness of any facsimile
signatures.
9.03 Attorney Costs, Expenses and Taxes. Borrower agrees (a) to pay or
reimburse Lender for all reasonable costs and expenses incurred in connection
with the development, preparation, negotiation and execution of the Loan
Documents, and the development, preparation, negotiation and execution of any
amendment, waiver, consent, supplement or modification to, any Loan Documents,
and any other documents prepared in connection herewith
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or therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, including all Attorney Costs, and (b) to pay or
reimburse Lender for all reasonable costs and expenses incurred in connection
with any refinancing, restructuring, reorganization (including a bankruptcy
reorganization) and enforcement or attempted enforcement, or preservation of any
rights under any Loan Documents, and any other documents prepared in connection
herewith or therewith, or in connection with any refinancing, or restructuring
of any such documents in the nature of a "workout" or of any insolvency or
bankruptcy proceeding, including Attorney Costs. Following the occurrence and
during the continuance of any Default or Event of Default, the foregoing costs
and expenses shall include all search, filing, recording and appraisal charges
and fees and taxes related thereto, and other out-of-pocket expenses incurred by
Lender and the cost of independent public accountants and other outside experts
retained by Lender. Such costs and expenses shall also include out of pocket
costs of Lender reasonably attributable to the administration of the Loan
Documents. Any amount payable by Borrower under this Section shall bear interest
from the 30/th/ day following the date of demand for payment at the Default
Rate, unless waived by Lender. The agreements in this Section shall survive
repayment of all Obligations.
9.04 Successors and Assigns; Participations.
(a) This Agreement and the other Loan Documents to which Borrower is
a party will be binding upon and inure to the benefit of Borrower and Lender and
their respective successors and assigns, except that Borrower may not assign its
rights hereunder or thereunder or any interest herein or therein without the
prior written consent of Lender and any such attempted assignment shall be void.
Lender in its sole and absolute discretion may at any time, and from time to
time, sell, assign (with, except in the case of an assignment to an Affiliate of
the Lender, the consent of Borrower, other than during the existence of a
Default or an Event of Default, which consent shall not be unreasonably
withheld) or grant participations in all or any portion of the Commitment and/or
the Obligations outstanding under this Agreement or any Loan Document. Borrower
hereby acknowledges and agrees that any such assignment or participation will
give rise to a direct obligation of Borrower to the assignee or participant upon
written notice from Lender to Borrower. Borrower agrees to execute, and cause
each other Borrower Party to execute, any documents reasonably requested by
Lender in connection with any such assignment. All information provided by or on
behalf of Borrower to Lender or its Affiliates may be furnished by Lender to its
Affiliates and to any actual or proposed assignee or participant.
(b) Lender may, at its sole cost and expense, from time to time grant
participations to one or more other Persons (including another Lender) all or
any portion of its Commitment and/or Extensions of Credit; provided, however,
-------- -------
that (i) Lender's obligations under this Agreement shall remain unchanged, (ii)
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) the participating banks or other
financial institutions shall not be a Lender hereunder for any purpose except,
if the participation agreement so provides, for the purposes of Section 3 (but
---------
only to the extent that the cost of such benefits to Borrower does not exceed
the cost which Borrower would have incurred in respect of Lender absent the
participation) and subject to Section 9.05, (iv) Borrower shall continue to deal
------------
solely and directly with Lender in connection with Lender's rights and
obligations under this
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Agreement, (v) the participation shall not restrict an increase in the
Commitment, so long as the amount of the participation interest is not affected
thereby, and (vi) the consent of the holder of such participation interest shall
not be required for amendments or waivers of provisions of the Loan Documents;
provided, however, that Lender may, in any agreement with a participant, give
-------- -------
such participant the right to consent to any matter which (A) extends the
Maturity Date as to such participant or any other date upon which any payment of
money is due to such participant, (B) reduces the rate of interest, any fee or
any other monetary amount owing to such participant, or (C) reduces the amount
of any installment of principal owing to such participant.
9.05 Set-off. In addition to any rights and remedies of Lender or any
assignee or participant of Lender or any Affiliates thereof (each, a "Proceeding
----------
Party") provided by law, upon the occurrence and during the continuance of any
-----
Event of Default under Section 8.01(j) or following acceleration of the
---------------
Obligations, each Proceeding Party is authorized from time to time, without
prior notice to Borrower, any such notice being waived by Borrower to the
fullest extent permitted by law, to proceed directly, by right of set-off,
banker's lien, or otherwise, against any assets of the Borrower Parties which
may be in the hands of such Proceeding Party (including all general or special,
time or demand, provisional or other deposits and other indebtedness owing by
such Proceeding Party to or for the credit or the account of Borrower) and apply
such assets against the Obligations, irrespective of whether such Proceeding
Party shall have made any demand therefor and although such Obligations may be
unmatured. Lender agrees promptly to notify Borrower after any such set-off and
application made by Lender; provided, however, that the failure to give such
notice shall not affect the validity of such set-off and application.
9.06 No Waiver; Cumulative Remedies.
(a) No failure by Lender to exercise, and no delay by Lender in
exercising, any right, remedy, power or privilege hereunder, shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege under any Loan Document preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
(b) The rights, remedies, powers and privileges herein or therein
provided are cumulative and not exclusive of any rights, remedies, powers and
privileges provided by Law. Any decision by Lender not to require payment of any
interest (including Default Interest), fee, cost or other amount payable under
any Loan Document or to calculate any amount payable by a particular method on
any occasion shall in no way limit or be deemed a waiver of Lender's right to
require full payment thereof, or to calculate an amount payable by another
method that is not inconsistent with this Agreement, on any other or subsequent
occasion.
9.07 Usury. Notwithstanding anything to the contrary contained in any
Loan Document, the interest and fees paid or agreed to be paid under the Loan
Documents shall not exceed the maximum rate of non-usurious interest permitted
by applicable Law (the "Maximum Rate"). If Lender shall receive interest or a
------------
fee in an amount that exceeds the Maximum Rate, the excessive interest or fee
shall be applied to the principal of the Outstanding Obligations or, if it
exceeds the unpaid principal, refunded to Borrower. In determining whether the
interest or a fee contracted for, charged, or received by Lender exceeds the
Maximum Rate, such Person may,
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to the extent permitted by applicable Law, (a) characterize any payment that is
not principal as an expense, fee, or premium rather than interest, (b) exclude
voluntary prepayments and the effects thereof, and (c) amortize, prorate,
allocate, and spread in equal or unequal parts the total amount of interest
throughout the contemplated term of the Obligations.
9.08 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9.09 Integration. This Agreement, together with the other Loan
Documents and any letter agreements referred to herein, comprises the complete
and integrated agreement of the parties on the subject matter hereof and
supersedes all prior agreements, written or oral, on the subject matter hereof.
In the event of any conflict between the provisions of this Agreement and those
of any other Loan Document, the provisions of this Agreement shall control and
govern; provided that the inclusion of supplemental rights or remedies in favor
--------
of Lender in any other Loan Document shall not be deemed a conflict with this
Agreement. Each Loan Document was drafted with the joint participation of the
respective parties thereto and shall be construed neither against nor in favor
of any party, but rather in accordance with the fair meaning thereof.
9.10 Nature of Lender's Obligations. Nothing contained in this
Agreement or any other Loan Document and no action taken by Lender pursuant
hereto or thereto may, or may be deemed to, make Lender a partnership, an
association, a joint venture or other entity with Borrower or any Affiliate of
Borrower.
9.11 Survival of Representations and Warranties. All representations
and warranties made hereunder and in any Loan Document, certificate or statement
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery thereof but shall terminate the later
of (a) when the Commitment is terminated and (b) when no Obligations remain
outstanding under any Loan Document. Such representations and warranties have
been or will be relied upon by Lender, notwithstanding any investigation made by
Lender or on its behalf.
9.12 Indemnity by Borrower. Borrower agrees to indemnify, save and
hold harmless Lender, its Affiliates and their respective Affiliates, directors,
officers, agents, attorneys and employees (collectively the "Indemnitees") from
-----------
and against: (a) any and all claims, demands, actions or causes of action that
are asserted against any Indemnitee by any Person (other than Lender) relating
directly or indirectly to a claim, demand, action or cause of action that such
Person asserts or may assert against any Borrower Party, any of their Affiliates
or any of their officers or directors; (b) any and all claims, demands, actions
or causes of action arising out of or relating to, the Loan Documents, any
predecessor loan documents, the Commitment, the use or contemplated use of the
proceeds of any Loan, or the relationship of any Borrower Party and Lender under
this Agreement; (c) any administrative or investigative proceeding by any
Governmental Authority arising out of or related to a claim, demand, action or
cause of action described in subsection (a) or (b) above; and (d) any and all
liabilities, losses, costs or expenses (including Attorney Costs) that any
Indemnitee suffers or incurs as a result of the assertion of any
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foregoing claim, demand, action, cause of action or proceeding, or as a result
of the preparation of any defense in connection with any foregoing claim,
demand, action, cause of action or proceeding, in all cases, whether or not an
Indemnitee is a party to such claim, demand, action, cause of action or
proceeding, including those liabilities caused by an Indemnitee's own negligence
(all the foregoing, collectively, the "Indemnified Liabilities") net, in each
-----------------------
case, of insurance proceeds received by such Indemnitee; provided that no
--------
Indemnitee shall be entitled to indemnification for any loss caused by its own
gross negligence or willful misconduct or for any loss or claim asserted against
it by another Indemnitee.
9.13 Nonliability of Lender.
Borrower acknowledges and agrees that:
(a) Any inspections of any property of Borrower made by or through
Lender are for purposes of administration of the Loan Documents only, and
Borrower is not entitled to rely upon the same (whether or not such inspections
are at the expense of Borrower);
(b) By accepting or approving anything required to be observed,
performed, fulfilled or given to Lender pursuant to the Loan Documents, Lender
shall not be deemed to have warranted or represented the sufficiency, legality,
effectiveness or legal effect of the same, or of any term, provision or
condition thereof, and such acceptance or approval thereof shall not constitute
a warranty or representation to anyone with respect thereto by Lender;
(c) The relationship between Borrower and Lender is, and shall at all
times remain, solely that of borrower and lender; Lender shall not under any
circumstance be deemed to be in a relationship of confidence or trust or a
fiduciary relationship with Borrower or its Affiliates, or to owe any fiduciary
duty to Borrower or its Affiliates; Lender does not undertake or assume any
responsibility or duty to Borrower or its Affiliates to select, review, inspect,
supervise, pass judgment upon or inform Borrower or its Affiliates of any matter
in connection with their property or the operations of Borrower or its
Affiliates; Borrower and its Affiliates shall rely entirely upon their own
judgment with respect to such matters; and any review, inspection, supervision,
exercise of judgment or supply of information undertaken or assumed by Lender in
connection with such matters is solely for the protection of Lender and neither
Borrower nor any other Person is entitled to rely thereon; and
(d) Lender shall not be responsible or liable to any Person for any
loss, damage, liability or claim of any kind relating to injury or death to
Persons or damage to property caused by the actions, inaction or negligence of
Borrower and/or its Affiliates, and Borrower hereby indemnifies and holds Lender
harmless from any such loss, damage, liability or claim to the extent not caused
by the gross negligence or willful misconduct of the Person seeking
indemnification.
9.14 No Third Parties Benefited. This Agreement is made for the
purpose of defining and setting forth certain obligations, rights and duties of
Borrower and Lender in connection with the Loans and is made for the sole
benefit of Borrower and Lender, and Lender's
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successors and assigns. Except as provided in Sections 9.04 and 9.12, no other
------------- ----
Person shall have any rights of any nature hereunder or by reason hereof.
9.15 Severability. Any provision of the Loan Documents that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
9.16 Confidentiality. Lender and each participant shall use any
confidential non-public information concerning the Borrower Parties and their
Subsidiaries that is furnished to it by or on behalf of the Borrower Parties and
their Subsidiaries in connection with the Loan Documents (collectively,
"Confidential Information") solely for the purpose of evaluating and providing
------------------------
products and services to them and administering and enforcing the Loan
Documents, and it will hold the Confidential Information in confidence.
Notwithstanding the foregoing, Lender may disclose Confidential Information (a)
to its affiliates or any of its or its affiliates' directors, officers,
employees, advisors, or representatives (collectively, the "Representatives")
---------------
whom it determines need to know such information for the purposes set forth in
this Section; (b) to any bank or financial institution or other entity to which
Lender has assigned or desires to assign an interest or participation in the
Loan Documents or the Obligations, provided that any such foregoing recipient of
--------
such Confidential Information agrees to keep such Confidential Information
confidential as specified herein; (c) to any governmental agency or regulatory
body having or claiming to have authority to regulate or oversee any aspect of
Lender's business or that of its Representatives in connection with the exercise
of such authority or claimed authority; (d) to the extent necessary or
appropriate to effect or preserve Lender's or any of its Affiliates' security
(if any) for any Obligation or to enforce any right or remedy or in connection
with any claims asserted by or against Lender or any of its Representatives; and
(e) pursuant to any subpoena or any similar legal process. For purposes hereof,
the term "Confidential Information" shall not include information that (x) is in
Lender's possession prior to its being provided by or on behalf of the Borrower
Parties, provided that such information is not known by Lender to be subject to
--------
another confidentiality agreement with, or other legal or contractual obligation
of confidentiality to, a Borrower Party, (y) is or becomes publicly available
(other than through a breach hereof by Lender), or (z) becomes available to
Lender on a nonconfidential basis, provided that the source of such information
--------
was not known by Lender to be bound by a confidentiality agreement or other
legal or contractual obligation of confidentiality with respect to such
information.
9.17 Further Assurances. Borrower and its Subsidiaries shall, at their
expense and without expense to Lender, do, execute and deliver such further acts
and documents as Lender from time to time reasonably requires for the assuring
and confirming unto Lender of the rights hereby created or intended now or
hereafter so to be, or for carrying out the intention or facilitating the
performance of the terms of any Loan Document.
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9.18 Headings. Section headings in this Agreement and the other Loan
Documents are included for convenience of reference only and are not part of
this Agreement or the other Loan Documents for any other purpose.
9.19 Time of the Essence. Time is of the essence of the Loan
Documents.
9.20 Governing Law.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF CALIFORNIA APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT LENDER SHALL RETAIN ALL
RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF CALIFORNIA
OR OF THE UNITED STATES FOR THE CENTRAL DISTRICT OF CALIFORNIA, AND BY EXECUTION
AND DELIVERY OF THIS AGREEMENT, EACH BORROWER PARTY, AND LENDER CONSENTS, FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF
THOSE COURTS. EACH BORROWER PARTY, AND LENDER IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION
OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER
DOCUMENT RELATED HERETO. EACH BORROWER PARTY AND LENDER WAIVES PERSONAL SERVICE
OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY THE LAW OF CALIFORNIA.
9.21 Waiver of Right to Trial by Jury. EACH PARTY TO THIS AGREEMENT
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM
WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT
OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
9.22 Entire Agreement. This Agreement and the other Loan Documents
represent the final agreement between the parties and may not be contradicted by
evidence of prior,
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contemporaneous, or subsequent oral agreements of the parties. There are no
unwritten oral agreements between the parties.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
CALIFORNIA PIZZA KITCHEN, INC.
By /s/ Xxxxxxx X. Xxxxx
----------------------------------------
Xxxxxxx X. Xxxxx
Vice President and Assistant Secretary
BANK OF AMERICA, N.A.
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Xxxxx X. Xxxxxxx
Vice President
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