Revolving Credit Agreement - Foodmaker Inc., Credit Lyonnais and Union Bank
REVOLVING CREDIT AGREEMENT
dated as of July 26, 1994
among
FOODMAKER, INC.
THE BANKS NAMED HEREIN
AND
CREDIT LYONNAIS NEW YORK BRANCH,
as Agent, Collateral Agent and Swing Line Bank
AND
UNION BANK
as Issuing Bank<PAGE>
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
THE REVOLVING CREDIT LOANS
Section 2.01. The Loans. . . . . . . . . . . . . . . . . . . . . . 19
Section 2.02. Procedure for Loans. . . . . . . . . . . . . . . . . 19
Section 2.03. Notes. . . . . . . . . . . . . . . . . . . . . . . . 20
Section 2.04. Commitment Fee . . . . . . . . . . . . . . . . . . . 21
Section 2.05. Cancellation or Reduction of
Commitment . . . . . . . . . . . . . . . . . . . . . 21
Section 2.06. Optional Prepayment. . . . . . . . . . . . . . . . . 21
Section 2.07. Mandatory Reduction of the
Commitment; Mandatory Prepayment . . . . . . . . . . 22
Section 2.08. Swing Line Advances. . . . . . . . . . . . . . . . . 24
Section 2.09. Clean-Up Periods . . . . . . . . . . . . . . . . . . 26
ARTICLE III
SYNDICATED LETTERS OF CREDIT
Section 3.01. Syndicated Letters of Credit . . . . . . . . . . . . 26
ARTICLE IV
INTEREST, METHOD OF PAYMENT, CONVERSION, ETC.
Section 4.01. Procedure for Interest Rate
Determination. . . . . . . . . . . . . . . . . . . . 31
Section 4.02. Interest on ABR Loans. . . . . . . . . . . . . . . . 31
Section 4.03. Interest on Eurodollar Loans.. . . . . . . . . . . . 31
Section 4.04. Conversion . . . . . . . . . . . . . . . . . . . . . 32
Section 4.05. Post Default Interest. . . . . . . . . . . . . . . . 33
Section 4.06. Maximum Interest Rate. . . . . . . . . . . . . . . . 33
-i-
<PAGE>
<PAGE>
Page
----
ARTICLE V
DISBURSEMENT AND PAYMENT
Section 5.01. Pro Rata Treatment . . . . . . . . . . . . . . . . . 34
Section 5.02. Method of Payment. . . . . . . . . . . . . . . . . . 34
Section 5.03. Compensation for Losses. . . . . . . . . . . . . . . 34
Section 5.04. Withholding, Reserves and
Additional Costs . . . . . . . . . . . . . . . . . . 35
Section 5.05. Unavailability . . . . . . . . . . . . . . . . . . . 38
Section 5.06. Additional Costs in Respect of
Letters of Credit. . . . . . . . . . . . . . . . . . 39
Section 5.07. Commercial Practices in
Respect of Letters of Credit . . . . . . . . . . . . 40
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Section 6.01. Representations and Warranties . . . . . . . . . . . 41
ARTICLE VII
CONDITIONS OF LENDING
Section 7.01. Conditions to the Initial Loan . . . . . . . . . . . 48
Section 7.02. Conditions to All Loans. . . . . . . . . . . . . . . 51
Section 7.03. Satisfactions of Conditions
Precedent. . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE VIII
COVENANTS
Section 8.01. Affirmative Covenants. . . . . . . . . . . . . . . . 52
Section 8.02. Negative Covenants . . . . . . . . . . . . . . . . . 57
Section 8.03. Financial Covenants. . . . . . . . . . . . . . . . . 60
ARTICLE IX
EVENTS OF DEFAULT
Section 9.01. Events of Default. . . . . . . . . . . . . . . . . . 64
-ii-
<PAGE>
<PAGE>
Page
____
ARTICLE X
THE AGENT AND THE BANKS
Section 10.01. The Agency. . . . . . . . . . . . . . . . . . . . . 68
Section 10.02. The Agent's Duties. . . . . . . . . . . . . . . . . 68
Section 10.03. Sharing of Payment and Expenses . . . . . . . . . . 69
Section 10.04. The Agent's Liabilities . . . . . . . . . . . . . . 70
Section 10.05. The Agent as a Bank . . . . . . . . . . . . . . . . 70
Section 10.06. Bank Credit Decision. . . . . . . . . . . . . . . . 70
Section 10.07. Indemnification . . . . . . . . . . . . . . . . . . 71
Section 10.08. Successor Agent . . . . . . . . . . . . . . . . . . 71
ARTICLE XI
MISCELLANEOUS
Section 11.01. APPLICABLE LAW. . . . . . . . . . . . . . . . . . . 72
Section 11.02. Set-off . . . . . . . . . . . . . . . . . . . . . . 72
Section 11.03. Expenses. . . . . . . . . . . . . . . . . . . . . . 72
Section 11.04. Amendments. . . . . . . . . . . . . . . . . . . . . 73
Section 11.05. Cumulative Rights and No Waiver . . . . . . . . . . 73
Section 11.06. Notices . . . . . . . . . . . . . . . . . . . . . . 74
Section 11.07. Separability. . . . . . . . . . . . . . . . . . . . 74
Section 11.08. Assignments and Participations. . . . . . . . . . . 75
Section 11.09. WAIVER OF JURY; CONSENT
TO JURISDICTION . . . . . . . . . . . . . . . . . . 76
Section 11.10. Confidentiality . . . . . . . . . . . . . . . . . . 77
Section 11.11. Extension of Termination Date . . . . . . . . . . . 78
Section 11.12. Indemnity . . . . . . . . . . . . . . . . . . . . . 78
Section 11.13. Execution in Counterparts . . . . . . . . . . . . . 79
-iii-
<PAGE>
<PAGE>
EXHIBITS AND SCHEDULES
Exhibits
Exhibit A Form of Conversion Request
Exhibit B Form of Loan Request
Exhibit C Form of Mortgage
Exhibit D Form of Notes
Exhibit E Form of Security Agreement
Exhibit F Form of Swing Line Advance Request
Exhibit G Form of Letter of Credit Notice
Exhibit H Form of Opinion of Company Counsel
Exhibit I Form of Accountants' Letter
Exhibit J Solvency Certificate
Exhibit K Form of Assignment Agreement
Schedules
Schedule 1.01(c) Potential Divestment Properties
Schedule 6.01(a) List of Subsidiaires
Schedule 6.01(f) Description of Litigation
Schedule 6.01(s) Environmental Matters
Schedule 6.01(v) Intellectual Property
Schedule 7.01(b)-1 List of Mortgages/Deeds of Trust
Schedule 8.02(b) Specified Existing Indebtedness
-iv-
<PAGE>
<PAGE>
REVOLVING CREDIT AGREEMENT
REVOLVING CREDIT AGREEMENT, dated as of July 26, 1994, among
Foodmaker, Inc., a Delaware corporation (the "Company"), each of the banks
identified on the signature pages hereof (each, a "Bank" and, collectively,
the "Banks"), Credit Lyonnais New York Branch, as Agent for the Banks (the
"Agent"), as Collateral Agent for the Banks ("Collateral Agent") and as the
Swing Line Bank with respect to Swing Line Advances (as defined below) and
Union Bank, as the Issuing Bank with respect to Syndicated Letters of Credit
(as defined below).
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company has requested the Banks to lend up to
$52,500,000 to the Company, including letters of credit for the account of
the Company in an aggregate amount of up to $25,000,000, on a revolving
basis, to enable the Company to redeem its 12.75% Senior Notes, its 13.5%
Secured Note to Prudential and between $12,000,000 and $13,000,000 in
principal amount of its 14.25% Senior Subordinated Notes and for general
corporate purposes, including working capital and capital expenditures; and
WHEREAS, the Company is willing to secure all of its obligations
hereunder by pledging to the Banks the collateral described in a Pledge and
Security Agreement (the "Security Agreement"), between the Company and Credit
Lyonnais New York Branch, as Collateral Agent;
NOW, THEREFORE, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.
(a) Terms Generally. The definitions ascribed to terms in this
Section 1.01 and elsewhere in this Agreement shall apply equally to both the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words "include", "includes" and "including" shall be
deemed to be followed by the phrase "without limitation". The words
"hereby", "herein", "hereof", "hereunder" and words of similar import refer
to
<PAGE>
<PAGE>
this Agreement as a whole (including any exhibits and schedules hereto) and
not merely to the specific section, paragraph or clause in which such word
appears. All references herein to Articles, Sections, Exhibits and Schedules
shall be deemed references to Articles and Sections of, and Exhibits and
Schedules to, this Agreement unless the context shall otherwise require.
Except as otherwise expressly provided herein, all references to "dollars" or
"$" shall be deemed references to the lawful money of the United States of
America.
(b) Accounting Terms. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided, however,
that, for purposes of determining compliance with any covenant set forth in
Article VIII, such terms shall be construed in accordance with GAAP as in
effect on the date of this Agreement applied on a basis consistent with the
construction thereof applied in preparing the Company's audited financial
statements referred to in Section 6.01(h). In the event there shall occur a
change in GAAP which but for the foregoing proviso would affect the
computation used to determine compliance with any covenant set forth in
Article VIII, the Company and the Banks agree to negotiate in good faith in
an effort to agree upon an amendment to this Agreement that will permit
compliance with such covenant to be determined by reference to GAAP as so
changed while affording the Banks the protection afforded by such covenant
prior to such change (it being understood, however, that such covenant shall
remain in full force and effect in accordance with its existing terms pending
the execution by the Company and the Banks of any such amendment).
(c) Other Terms. The following terms shall have the meanings
ascribed to them below or in the Sections of this Agreement indicated below:
"ABR Loans" shall mean Loans which bear interest at the rate and in
the manner set forth in Section 4.02.
"Adverse Environmental Condition" shall mean the presence or
release of any substance presently or hereafter regulated, defined or listed,
as appropriate, as hazardous, toxic or radioactive under any Environmental
Law, in violation of, or which could reasonably be expected to result in
liability under, applicable Environmental Law.
"Agent" shall have the meaning ascribed to such term in the
preamble hereto.
-2-
<PAGE>
<PAGE>
"Applicable Margin" shall mean with respect to ABR Loans 1.5% per
annum and with respect to Eurodollar Loans 2.5% per annum.
"Available Commitment" shall mean (a) on any date prior to the
Termination Date, an amount equal to the remainder of (i) the Total
Commitment on such date minus (ii) the sum of (A) the aggregate outstanding
principal amount of Loans on such date, plus (B) the aggregate outstanding
principal amount of Swing Line Advances on such date, plus (C) the aggregate
Face Amount of Syndicated Letters of Credit outstanding on such date and (b)
on and after the Termination Date, $0.
"Bank" shall have the meaning ascribed to such term in the preamble
hereto.
"Base LIBOR" shall mean, with respect to any Interest Period for a
Eurodollar Loan, the rate per annum determined by the Agent to be the
arithmetic mean (rounded to the nearest 1/16 of 1% or, if there is no nearest
1/16 of 1%, to the next higher 1/16 of 1%) of the respective rates of
interest communicated by the Reference Banks to the Agent as the rate at
which U.S. dollar deposits are offered to the Reference Banks by leading
banks in the London interbank deposits market at approximately 11:00 A.M.,
London time, on the second full Business Day preceding the first day of such
Interest Period in an amount substantially equal to the respective Reference
Amounts for a term equal to such Interest Period.
"Base Rate" shall mean a fluctuating interest rate per annum as
shall be in effect from time to time, which rate per annum shall on any day
be equal to the higher of:
(a) the rate of interest publicly announced by the Agent from time
to time as its reference rate for short-term commercial loans in U.S.
Dollars to U.S. domestic corporate borrowers (or, if the Agent has no
such publicly announced rate of interest, the arithmetic mean of the
rates of interest publicly announced by major banks in New York City
selected by the Agent as their reference rate for short-term commercial
loans in U.S. Dollars to U.S. domestic corporate borrowers); and
(b) the sum (adjusted to the nearest 1/4 of 1% or, if there is no
nearest 1/4 of 1%, to the next higher 1/4 of 1%) of (i) 1/2 of 1% per
annum and (ii) the Federal Funds Rate.
-3-
<PAGE>
<PAGE>
"Borrowing Date" shall mean the date set forth in each Loan Request
as the date upon which the Company desires to borrow Loans pursuant to the
terms of this Agreement.
"Business Day" shall mean (i) with respect to any ABR Loan or any
payment of the Commitment Fee or other amounts hereunder, any day except a
Saturday, Sunday or other day on which commercial banks in New York City, Los
Angeles or Portland, Oregon are authorized by law to close and (ii) with
respect to any Eurodollar Loan, any day on which commercial banks are open
for domestic and international business (including dealings in U.S. dollar
deposits) in London and New York City.
"Capital Lease" shall mean, with respect to any Person, any
obligation of such Person to pay rent or other amounts under a lease with
respect to any property (whether real, personal or mixed) acquired or leased
by such Person that is required to be accounted for as a liability on a
balance sheet of such Person in accordance with GAAP.
"Capital Lease Obligations" shall mean the obligation of any Person
to pay rent or other amounts under a Capital Lease.
"Change of Control" shall mean that either of the following shall
have occurred: (i) any Person or Group becomes beneficial owner of 50% or
more of the equity interests of the Company, on a fully diluted basis, or
(ii) any Person or Group acquires the voting power necessary to elect a
majority of the board of directors of the Company.
"Clean-Up Period" shall mean, commencing with the date of the
Initial Loan, any period of 30 consecutive days during each period of twelve
consecutive calendar months, specified by the Company in a notice delivered
to the Agent identified as a "Notice of Clean-Up Period" no later than two
Business Days prior to the commencement of such period, or if no such notice
shall be delivered for any such period, the last 30 days of such twelve month
period.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Collateral" shall have the meaning ascribed to such term in the
Security Agreement and shall include "Mortgaged Property" as defined in each
of the Mortgages.
"Collateral Agent" shall have the meaning ascribed to such term in
the preamble hereto.
-4-
<PAGE>
<PAGE>
"Commitment" of each Bank shall mean the amount set forth opposite
such Bank's name under the heading "Commitment" on the signature pages
hereof, as such amount may be reduced from time to time pursuant to Sections
2.05, 2.07 and 11.08.
"Commitment Fee" shall have the meaning ascribed to such term in
Section 2.04 hereof.
"Company" shall have the meaning ascribed to such term in the
preamble hereto.
"Consolidated Capital Expenditures" shall mean, for any period, the
aggregate of all expenditures (whether paid in cash or accrued as liabilities
and including that portion of Capital Leases which is capitalized on the
consolidated balance sheet of the Company and its Subsidiaries) by the
Company and its Subsidiaries during such period that in conformity with GAAP
would be classified as capital expenditures.
"Consolidated Covenant Indebtedness" of the Company shall mean, at
the end of any four quarter period, all Indebtedness of the Company and its
Subsidiaries less amounts outstanding at the end of the four quarter period
then ending, by the Company and its Subsidiaries pursuant to (i) Capital
Leases entered into in connection with the acquisition of new restaurant
properties and (ii) equipment financings which are accounted for on the
balance sheet of such person in accordance with GAAP.
"Consolidated Depreciation and Amortization Expense" shall mean,
for any period, "Depreciation and amortization" or the similar item, plus
"Deferred finance cost amortization" or the similar item, both determined on
a consolidated basis for the Company and its Subsidiaries, as shown on the
consolidated statements of cash flow for the Company and its Subsidiaries for
such period.
"Consolidated EBITDA" shall mean, for any period, the sum, without
duplication, of the amounts for such period of (i) Consolidated Operating
Income and (ii) Consolidated Depreciation and Amortization Expense, to the
extent deducted from gross income in determining Consolidated Operating
Income for such period and (iii) Consolidated Interest Expense, to the extent
deducted from gross income in determining Consolidated Operating Income for
such period.
"Consolidated Fixed Charges" shall mean, for any period, the sum,
without duplication, of (i) Consolidated
-5-
<PAGE>
<PAGE>
Interest Expense for such period, (ii) principal amounts of all Indebtedness
of the Company and its Subsidiaries scheduled to be paid during such period
and (iii) Consolidated Capital Expenditures, excluding Consolidated Capital
Expenditures made with the proceeds from sale leaseback transactions, made
during such period.
"Consolidated Interest Expense" shall mean, for any period, total
interest expense (including that attributable to Capital Leases in accordance
with GAAP), whether paid or accrued, of the Company and its Subsidiaries,
determined on a consolidated basis, with respect to all outstanding
Indebtedness of the Company and its Subsidiaries, including all commissions,
discounts and other fees and charges owed with respect to letter of credit
and bankers' acceptance financing and net costs under Interest Rate
Protection Agreements.
"Consolidated Net Worth" shall mean the excess of Consolidated
Total Assets over Consolidated Total Liabilities; provided, that there shall
be excluded from Consolidated Total Assets (i) cash set apart and held in a
sinking or other analogous fund established for the purpose of redemption or
other retirement of capital stock and (ii) any revaluation or other write-up
in book value of assets subsequent to October 3, 1993.
"Consolidated Operating Income" shall mean, for any period,
"Earnings (loss) before income taxes, extraordinary items and cumulative
effect of changes in accounting principles" or the similar item, determined
on a consolidated basis for the Company and its Subsidiaries, as shown on the
consolidated statements of operations for the Company and its Subsidiaries
for such period.
"Consolidated Total Assets" shall mean, at any date of
determination, total assets or the similar item, determined on a consolidated
basis for the Company and its Subsidiaries, as shown on the most recent
consolidated balance sheet for the Company and its Subsidiaries which has
been delivered to the Agent pursuant to Section 8.01(a).
"Consolidated Total Liabilities" shall mean, at any date of
determination, total liabilities or the similar item, determined on a
consolidated basis for the Company and its Subsidiaries, as shown on the most
recent consolidated balance sheet for the Company and its Subsidiaries which
has been delivered to the Agent pursuant to Section 8.01(a).
-6-
<PAGE>
<PAGE>
"Conversion Date" shall mean the date on which a conversion of
interest rates on outstanding Loans, pursuant to a Conversion Request, shall
take effect.
"Conversion Request" shall mean a request by the Company to convert
the interest rate on all or portions of outstanding Loans pursuant to the
terms hereof, which shall be substantially in the form of Exhibit A and shall
specify, with respect to such outstanding Loans, (i) the requested Conversion
Date, which shall be not less than three Business Days after the date of such
Conversion Request, (ii) the aggregate amount of the Loans, from and after
the Conversion Date, which are to bear interest as ABR Loans or Eurodollar
Loans and (iii) the term of the Interest Periods therefor, if any.
"Credit Documents" shall mean this Agreement, the Security
Documents, the Notes, and the Syndicated Letters of Credit, as each such
agreement may hereafter be amended, supplemented or otherwise modified from
time to time.
"Default" shall mean any event or circumstance which, with the
giving of notice or the passage of time, or both, would become an Event of
Default.
"Environmental Claim" shall mean any written notice, request for
information pursuant to applicable clean-up or remedial Environmental Laws,
action, claim, order, proceedings, demand or direction (conditional or
otherwise) based on, relating to or arising out of (i) any violation of any
Environmental Law by the Company, its Subsidiaries or any person acting on
behalf of the Company or any of its Subsidiaries, or (ii) any liabilities
under any Environmental Law including those arising out of any Adverse
Environmental Condition, including without limitation liabilities relating to
the release of Hazardous Substances (whether on-site or off-site), any claim
by any third party, fines, penalties or restrictions, or the transportation,
storage, treatment or disposal of any Hazardous Substances.
"Environmental Laws" shall mean the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. 9601, et seq., the
Resource Conservation and Recovery Act, 42 U.S.C. 6901, et seq., the Clean
Air Act, 42 U.S.C. 7401, et seq., the Clean Water Act, 33 U.S.C. 1251, et
seq., the Toxic Substances Control Act, 15 U.S.C. 2601, et seq., the
environmental provisions of the Occupational Safety and Health Act, 29 U.S.C.
651, et seq., and all other federal, state and local laws, ordinances,
regulations, rules,
-7-
<PAGE>
<PAGE>
orders, permits, and the like, which are directed at the protection of human
health or the environment.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA Affiliate" shall mean a corporation, partnership or other
entity which is considered one employer with the Company under Section 4001
of ERISA or Section 414 of the Code.
"Eurodollar Loans" shall mean Loans which bear interest at a rate
based on LIBOR and in the manner set forth in Section 4.03.
"Eurodollar Reserve Percentage" shall mean for any day, that
percentage, expressed as a decimal, which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement (including any
marginal, supplemental or emergency reserve requirements) for a United States
branch or agency of a foreign bank in New York City with deposits exceeding
one billion dollars in respect of eurocurrency funding liabilities. LIBOR
shall be adjusted automatically on and as of the effective date of any change
in the Eurodollar Reserve Percentage.
"Event of Default" shall mean any of the events described in
Section 9.01.
"Excluded Asset Sale" shall mean (i) the sale of goods in the
ordinary course of business; (ii) sales of assets to franchisees in the
ordinary course of business consistent with past practice; (iii) the sale of
any property or assets acquired after the date hereof by the Company or its
Subsidiaries in connection with any sale- leaseback of assets; (iv) the sale,
lease, transfer or disposal of any asset or assets by the Company or a
Subsidiary of the Company to any of the Company or any Subsidiary of the
Company; (v) the sale or other disposition of obsolete or worn out equipment
or other assets in the ordinary course of business; (vi) the sale, lease,
transfer or disposal of properties listed on Schedule 1.01(c); or (vii) the
sale, lease, transfer or disposal of assets (other than goods and services)
having a fair value consideration not exceeding $5,000,000 in the aggregate
for all of the Company and its Subsidiaries in any fiscal year; provided,
however, that for purposes of clause (vii) no sale, lease, transfer or
disposal of assets having a fair value consideration of less than $100,000
shall be included in any aggregation of sales, leases, transfers and
disposals.
-8-
<PAGE>
<PAGE>
"Extension Fee" shall have the meaning ascribed to such term in
Section 11.11 hereof.
"Face Amount" of any Syndicated Letter of Credit means, at any
time, the maximum amount available to be drawn under such Syndicated Letter
of Credit at such time (assuming compliance at such time with all conditions
to drawing).
"Federal Funds Rate" for any day shall mean the rate (rounded to
the nearest 1/16 of 1% or, if there is no nearest 1/16 of 1%, to the next
higher 1/16 of 1%) on such day for Federal Funds as published in H.15(519),
or any successor publication, under the heading "Federal Funds (Effective)".
In the event that such rate or such publication is not published with respect
to such day the Federal Funds Rate on such day shall be the "Federal
Funds/Effective Rate" as posted by the Federal Reserve Bank of New York for
that day in its publication "Composite Closing Quotations for U.S. Government
Securities". The Federal Funds Rate for Saturdays, Sundays and any other day
on which the Federal Reserve Bank of New York is closed shall be the Federal
Funds Rate as in effect for the next preceding day for which such rates are
published or posted, as the case may be.
"GAAP" shall mean generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entities as may be approved by a significant segment
of the accounting profession, which are applicable to the circumstances as of
the date of determination.
"Governmental Authority" shall mean any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of
or pertaining to government.
"Group" shall have the meaning ascribed to such term in
Section 13(d)(3) of the Securities Exchange Act of 1934 and the rules and
regulations promulgated thereunder as in effect on the date hereof.
"Guarantee" by any Person shall mean any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other Person (the "primary obligor") in
any manner, whether directly or indirectly, and including any
-9-
<PAGE>
<PAGE>
obligation of such Person, (i) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or to purchase (or to
advance or supply funds for the purchase of) any security for the payment of
such Indebtedness, (ii) to purchase property, securities or services for the
purpose of assuring the holder of such Indebtedness of the payment of such
Indebtedness, or (iii) to maintain working capital, equity capital or other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness. "Guaranteed",
"Guaranteeing" and "Guarantor" shall have meanings correlative to the fore-
going.
"Hazardous Substance" means any substance presently or hereafter
regulated, defined or listed, as appropriate, as hazardous, toxic or
radioactive under any Environmental Law, whether by type or by quantity,
including any material containing any such substance as a component.
Hazardous Substance includes, without limitation, any toxic waste, pollutant,
contaminant, hazardous substance, toxic substance, hazardous waste, special
waste (each as regulated, defined or listed, as appropriate, under applicable
Environmental Laws), or petroleum or any derivative or by-product thereof,
radon, radioactive material, asbestos, asbestos containing material, urea
formaldehyde foam insulation, lead and polychlorinated biphenyl.
"Indebtedness" of any Person shall mean, without duplication, (a)
all indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services (including all obligations, contingent
or otherwise, of such Person in connection with letter of credit facilities,
bankers' acceptance facilities, Interest Rate Protection Agreements or other
similar facilities including currency swaps) other than indebtedness to trade
creditors and service providers incurred in the ordinary course of business,
(b) all obligations of such Person evidenced by bonds, notes, debentures or
other similar instruments, (c) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to reposses-
sion or sale of such property), (d) all Capital Lease Obligations of such
Person, (e) all Indebtedness referred to in clauses (a), (b), (c) or (d)
above secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien upon or
in property (including accounts and contract rights) owned by such Person,
even though such Person has not assumed or become
-10-
<PAGE>
<PAGE>
liable for the payment of such Indebtedness, (f) all preferred stock issued
by such Person which is redeemable, prior to the full satisfaction of the
Company's obligations under the Credit Documents (including repayment in full
of the Loans and all interest accrued thereon), other than at the option of
such Person, valued at the greater of its voluntary or involuntary
liquidation preference plus accrued and unpaid dividends and (g) all
Indebtedness of others Guaranteed by such Person.
"Initial Loan" shall mean the first Loan which is made pursuant to
the terms hereof.
"Intellectual Property" shall have the meaning ascribed to such
term in the Security Agreement.
"Interest Period" shall mean each one, two, three or six-month
period, in the case of Eurodollar Loans, such period being the one selected
by the Company pursuant to Section 2.02 hereof and commencing on the date the
relevant loan is made or the last day of the current Interest Period, as the
case may be.
"Interest Rate Protection Agreements" shall mean any interest rate
swap agreement, interest rate cap agreement or similar arrangement used by a
Person to fix or cap a floating rate of interest on Indebtedness to a
negotiated maximum rate or amount.
"Issuing Bank" shall mean Union Bank, or any successor to the
duties, obligations and rights of Union Bank, in its capacity as issuer of
Syndicated Letters of Credit hereunder.
"Issuing Fee" shall have the meaning ascribed to such term in
Section 3.01(j) hereof.
"Letter of Credit Fee" shall have the meaning ascribed to such term
in Section 3.01(i) hereof.
"Letter of Credit Notice" shall have the meaning ascribed to such
term in Section 3.01(c) hereof.
"Lien" shall mean, with respect to any asset, (a) any mortgage,
deed of trust, lien, pledge, encumbrance, charge or security interest in or
on such asset, (b) the interest of a vendor or lessor under any conditional
sale agreement, capital lease or title retention agreement relating to such
asset, and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.
-11-
<PAGE>
<PAGE>
"LIBOR" shall mean with respect to any Interest Period the rate per
annum (rounded to the nearest 1/16 of 1% or, if there is no nearest 1/16 of
1%, to the next higher 1/16 of 1%) determined pursuant to the following
formula:
Base LIBOR
----------------------------------
LIBOR = (1 - Eurodollar Reserve Percentage)
"Loans" shall mean, collectively, the ABR Loans and Eurodollar
Loans, but shall not include Swing Line Advances.
"Loan Request" shall mean a request by the Company to borrow Loans
pursuant to the terms hereof, which shall be substantially in the form of
Exhibit B and shall specify, with respect to such requested Loans, (i) the
requested Borrowing Date, (ii) the aggregate amount of Loans which the
Borrower desires to borrow on such date, (iii) whether such requested Loans
are to bear interest as ABR Loans or Eurodollar Loans, and (iv) if the
requested Loans are to bear interest as Eurodollar Loans, the requested term
of the Interest Period therefor.
"Material Adverse Effect" shall mean (i) any material adverse
effect on the business, properties, condition (financial or otherwise) or
operations, present or prospective, of the Company and its Subsidiaries taken
as a whole, since any stated reference date or from and after the date of
determination, as the case may be, (ii) any material adverse effect on the
ability of the Company and its Subsidiaries taken as a whole to perform their
respective obligations hereunder and under the Credit Documents, (iii) any
adverse effect on the legality, validity, binding effect or enforceability of
this Agreement or any Credit Document, (iv) any adverse effect on the
perfection or priority of the Agent's and the Banks' Liens upon the
Collateral under the Security Documents or any material adverse effect on the
value of such Collateral except for such changes as may be contemplated or
permitted by this Agreement and the Security Documents.
"Material Subsidiary" of any Person means a Subsidiary of such
Person, which as of the end of the fiscal year immediately preceding the date
of determination, had greater than five percent (5%) of the consolidated
total assets of such Person or which contributed more than five percent (5%)
of the consolidated EBITDA of such Person during such fiscal year.
-12-
<PAGE>
<PAGE>
"Monthly Statements" shall mean consolidated and divisional
financial statements of the Company for each four week period.
"Mortgages" shall mean the mortgages and deeds of trust made by the
Company in favor of Credit Lyonnais New York Branch, as Collateral Agent, for
the benefit of the Agent, the Issuing Bank, the Swing Line Bank and the
Banks, in respect of the properties of the Company listed on Schedule
7.01(b)-1 hereto, securing the Notes, the Swing Line Advances and the
Syndicated Letters of Credit to the extent provided therein, in each case, in
substantially the form attached as Exhibit C hereto, with such modifications
as are mutually acceptable to the Banks, the Collateral Agent and the
Company.
"Net Cash Proceeds" shall mean (i) when used in respect of any sale
of assets of the Company or any Subsidiary, the gross cash proceeds received
by the Company, or the relevant Subsidiary from such sale or disposition less
the costs of sale, including payment of the outstanding principal amount of,
premium or penalty, if any, and interest on any Indebtedness which is paid or
required to be paid as a result of such sale, all legal, accounting, title
and recording tax expenses, commissions and other fees and expenses paid or
to be paid in cash solely as a result of such sale, and all other federal,
state, local and foreign taxes paid or payable, in connection therewith,
(ii) when used with respect to any loss, casualty, fire damage, theft,
destruction or condemnation of any capital asset of the Company or any
Subsidiary, the gross cash proceeds received by the Company or the relevant
Subsidiary under any insurance policy or any award or compensation received,
as the case may be, in each case as a result of any such loss, casualty, fire
damage, theft, destruction or condemnation, net of all legal, accounting and
other fees and expenses paid or to be paid in cash as a result of such loss,
casualty, fire damage, theft, destruction or condemnation, and all other
federal, state, local and foreign taxes paid or payable in connection
therewith and (iii) when used in respect of the issuance, assumption or
incurrence of Specified Additional Indebtedness by the Company or any of its
Subsidiaries, the gross cash proceeds received by the Company or the relevant
Subsidiary from such issuance, assumption or incurrence less the costs of
issuance, assumption or incurrence. Net Cash Proceeds shall equal if it
would otherwise be a negative number hereunder.
"Notes" shall mean, collectively, the promissory notes of the
Company, each substantially in the form of Exhibit D.
-13-
<PAGE>
<PAGE>
"NRS Rate" shall mean, for any day the rate of interest per annum
equal to Credit Lyonnais Nassau Branch bid rate on overnight offshore
deposits in amounts comparable to the deposit with respect to which interest
at the NRS Rate is payable pursuant to Section 3.01(p) hereof quoted daily by
Credit Lyonnais Nassau Branch at or about 5:00 p.m. (New York time).
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
successor thereto.
"Permitted Encumbrances" shall mean (i) Liens for taxes,
assessments or governmental charges or claims which are not delinquent or
which are being contested in good faith and by appropriate proceedings and
for which adequate reserves (in accordance with GAAP) are being maintained,
(ii) Liens, deposits or pledges to secure obligations under workers'
compensation, social security or similar laws, or under unemployment
insurance, (iii) Liens, deposits or pledges to secure bids, tenders,
contracts (other than contracts for the payment of money), leases, statutory
obligations, surety and appeal bonds and other obligations of like nature
arising in the ordinary course of business, (iv) mechanics', workers',
warehousemen's, carriers', materialmen's and other like Liens arising in the
ordinary course of business with respect to obligations which are not more
than 30 days overdue or which are being contested in good faith, (v) minor
imperfections of title on real estate, provided such imperfections do not
render title unmarketable, (vi) attachment or judgment Liens not giving rise
to a Default or an Event of Default, (vii) leases or subleases granted to
others not interfering with the ordinary conduct of business of the Company
or any of its subsidiaries, (viii) Liens in favor of a trustee in an
indenture relating to the Company's outstanding public debt to the extent
such Liens secure compensation and reimbursement obligations of such trustee
under such indenture, (ix) Liens arising in connection with Capital Lease
Obligations, (x) Liens pursuant to sale and leaseback transactions otherwise
permitted hereunder, (xi) any mortgage, encumbrance or other Lien upon, or
security interest in, any property hereafter acquired by the Company or its
Subsidiaries, created contemporaneously with such acquisition to secure or
provide for the payment or financing of any part of the purchase price
thereof, or the assumption of any Lien upon, or security interest in, any
such property hereafter acquired existing at the time of such acquisition, or
the acquisition of any such property subject to any Lien without the
assumption thereof (or any Permitted Refinancing thereof); provided, that (A)
the Indebtedness secured by any such Lien shall not exceed
-14-
<PAGE>
<PAGE>
$5,000,000 and (B) each such Lien shall attach only to the property so
acquired and fixed improvements thereon, (xii) Liens granted to the Agent and
the Banks pursuant to the Security Agreement and the Mortgages,
(xiii) existing mortgages disclosed in the financial statements (or the notes
thereto) referred to in Section 6.01(h) (or any Permitted Refinancing
thereof) and (xiv) Liens in favor of Prudential granted in connection with
its 13.5% Note (which shall be removed before the Initial Loan).
"Permitted Refinancing" shall mean any refinancing of existing
Indebtedness in which (i) the principal amount of Indebtedness resulting from
such refinancing does not exceed the sum of (a) the principal amount of
Indebtedness so refinanced plus (b) customary fees and expenses incurred in
connection with such refinancing, (ii) the interest borne by the Indebtedness
resulting from such refinancing does not exceed the rate of interest borne by
the Indebtedness so refinanced, (iii) the maturity of the Indebtedness
resulting from such refinancing does not occur sooner than the maturity on
the Indebtedness so refinanced and (iv)(A) Indebtedness ranking subordinate
to the Loans, Swing Line Advances and Syndicated Letters of Credit in right
of payment is replaced with other subordinated Indebtedness, (B) Indebtedness
ranking pari passu with the Loans, Swing Line Advances and Syndicated Letters
of Credit is replaced with either subordinated or pari passu Indebtedness and
(C) Indebtedness secured by a Permitted Encumbrance is replaced by
Indebtedness with no greater security than the Indebtedness being replaced.
"Person" shall mean any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization, association,
corporation, institution, public benefit corporation, entity or government
(whether Federal, state, county, city, municipal or otherwise, including any
instrumentality, division, agency, body or department thereof).
"Plan" shall mean an employee pension benefit plan as defined in
Section 3(2) of ERISA (including a plan which is a multiemployer plan) which
is maintained by the Company or an ERISA Affiliate.
"Prescribed Forms" shall mean such duly executed form(s) or
statement(s), and in such number of copies, which may, from time to time, be
prescribed by law and which, pursuant to applicable provisions of (a) an
income tax treaty between the United States and the country of residence of
the Bank providing the form(s) or statement(s), (b) the Code, or (c) any
applicable rule or regulation under
-15-
<PAGE>
<PAGE>
the Code, permit the Company to make payments hereunder for the account of
such Bank free of deduction or withholding for income or similar taxes.
"Pro Rata Share" shall mean, with respect to any Bank, the
proportion of such Bank's Commitment to the Total Commitment of all the Banks
or, if the Total Commitment shall have been cancelled or reduced to $0 or
expired, the proportion of such Bank's then outstanding Loans to the
aggregate amount of Loans then outstanding.
"Prudential" shall mean The Prudential Insurance Company of
America.
"Reference Amount", with respect to any Reference Bank and Interest
Period, shall mean (a) if that Reference Bank is a Bank, the amount of that
Bank's Eurodollar Loan scheduled to be outstanding during that Interest
Period, or (b) if that Reference Bank is not a Bank, the amount scheduled to
be outstanding during that Interest Period of Eurodollar Loan of the office
or affiliate of that Reference Bank that is a Bank, in each case, (i) without
taking into account any reduction in the amount of any Bank's Loan through
any assignment or transfer and (ii) rounded up to the nearest integral
multiple of $1,000,000.
"Reference Bank" shall mean Credit Lyonnais New York Branch.
"Reimbursement Obligations" shall mean, collectively, the
obligations of the Company then outstanding or that may thereafter arise in
respect of Syndicated Letters of Credit then outstanding under
Section 3.01(g) to reimburse the Issuing Bank in respect of any drawing under
a Syndicated Letter of Credit.
"Required Banks" shall mean (a) as long as the Total Commitment has
not been cancelled or terminated, (i) at any date that the Commitment of only
one Bank equals 100% of the Total Commitment, that Bank, (ii) at any date
that the Commitment of only one Bank equals at least 51% but less than 100%
of the Total Commitment, that Bank and at least one other Bank and (iii) at
any date that the Commitment of each Bank is less than 51% of the Total
Commitment, Banks having 51% or more of the Total Commitment and (b) if the
Total Commitment has been cancelled or terminated, (i) at any date that any
one Bank holds Notes evidencing 100% of the aggregate unpaid principal amount
of the Loans, that Bank, (ii) at any date that any one Bank holds Notes
evidencing at least 51% but less than 100% of the aggregate unpaid principal
amount of the Loans, that
-16-
<PAGE>
<PAGE>
Bank and at least one other Bank, (iii) at any date that no single Bank holds
Notes evidencing at least 51% of the aggregate unpaid principal amount of the
Loans, Banks holding Notes evidencing at least 51% of the aggregate unpaid
principal amount of the Loans.
"Security Agreement" shall have the meaning ascribed to such term
in the Recitals hereto, and shall be in substantially the form attached as
Exhibit E hereto, with such modifications as are mutually acceptable to the
Banks, the Collateral Agent and the Company.
"Security Documents" shall mean (i) the Security Agreement,
(ii) the Mortgages, (iii) all notices of security interests in deposit
accounts requested by the Agent pursuant to the Security Agreement,
(iv) Form UCC-1 Financing Statements and amendments thereto and (v) any other
document encumbering the Collateral or evidencing or perfecting a security
interest therein for the benefit of the Banks.
"Solvent" shall mean, when used with respect to any Person, that:
(a) at the date of determination, the present fair salable value of
such Person's assets is in excess of the total amount of such Person's
liabilities;
(b) at the date of determination, such Person is able to pay its
debts as they become due; and
(c) such Person does not have unreasonably small capital to carry
on such Person's business as theretofore operated and all businesses in
which such Person then is about to engage.
"Specified Additional Indebtedness" of any Person shall mean
Indebtedness which is not outstanding as of the date hereof, excluding
(i) Indebtedness to the Agent, the Swing Bank, the Issuing Bank or the Banks
hereunder and under the other Credit Documents, (ii) Indebtedness incurred
pursuant to sale-leaseback transactions, entered into pursuant to the
acquisition of new restaurant properties, not exceeding (A) $45,000,000 in
any fiscal year, including any period during which this Agreement is extended
pursuant to Section 11.11, or (B) $115,000,000 during the period from the
date hereof to the third anniversary of the date hereof, (iii) Capital
Leases, entered into in connection with the acquisition of new restaurant
properties, not exceeding $15,000,000, (iv) Indebtedness incurred pursuant to
equipment financing transactions not exceeding $15,000,000,
-17-
<PAGE>
<PAGE>
(v) purchase money obligations, (vi) indebtedness incurred pursuant to a
Permitted Refinancing, (vii) Interest Rate Protection Agreements which are
subordinate to the rights of the Banks hereunder in a manner that is
acceptable to the Agent and (viii) other Indebtedness not exceeding
$3,000,000.
"Subsidiary" shall mean any corporation the majority of the voting
shares of which at the time are owned directly or indirectly by the Company
and/or by one or more Subsidiaries of the Company.
"Swing Line Advance" means an advance made by the Swing Line Bank
pursuant to Section 2.08.
"Swing Line Advance Request" shall have the meaning ascribed to
such term in Section 2.08(c) hereof.
"Swing Line Bank" means Credit Lyonnais New York Branch, or any
successor to the duties, obligations and rights of Credit Lyonnais New York
Branch, in its capacity as the bank making Swing Line Advances hereunder.
"Swing Line Borrowing" means a borrowing consisting of a Swing Line
Advance made by the Swing Line Bank.
"Swing Line Facility" shall have the meaning ascribed to such term
in Section 2.08 hereof.
"Syndicated Letters of Credit" shall have the meaning ascribed to
such term in Section 3.01 hereof.
"Syndicated Letters of Credit Commitment" shall have the meaning
ascribed to such term in Section 3.01(a) hereof.
"Taxes" shall have the meaning ascribed to such term in Section
5.04(a).
"Termination Date" shall mean the earlier to occur of (i) the third
anniversary of the date of this Agreement or such later date as may be agreed
to pursuant to Section 11.11 or (ii) the date, if any, on which the Total
Commitment is cancelled or reduced to $0 pursuant to Section 2.05 or
Section 2.07.
"Total Commitment" shall mean the aggregate Commitment of all the
Banks.
-18-
<PAGE>
<PAGE>
"UCP" shall mean the Uniform Customs and Practice for Documentary
Credits, 1993 revision, International Chamber of Commerce Publication
No. 500, as the same may be amended and in effect from time to time.
"Wholly owned Subsidiary" shall mean any Subsidiary all the shares
of stock of all classes of which (other than directors' qualifying shares) at
the time are owned directly or indirectly by the Company and/or one or more
Wholly owned Subsidiaries of the Company.
ARTICLE II
THE REVOLVING CREDIT LOANS
Section 2.01. The Loans. Prior to the Termination Date, and
subject to the terms and conditions of this Agreement, upon the request of
the Company, and upon the satisfaction by the Company or the waiver by each
of the Banks of each of the conditions precedent contained in Article VII
applicable thereto, each of the Banks, severally and not jointly with the
other Banks, agrees to make one or more Loans to the Company from time to
time in an aggregate principal amount at any one time outstanding not to
exceed its Commitment; provided, however, that the sum of (i) aggregate
outstanding Loans, plus (ii) the aggregate outstanding Swing Line Advances,
plus (iii) the aggregate Face Amount of Syndicated Letters of Credit
outstanding at any time may not exceed the Total Commitment.
Section 2.02. Procedure for Loans.
(a) The Company may borrow Loans by delivering a written Loan
Request to the Agent by 2:00 p.m., New York time, on the Business Day that is
not less than one Business Day prior to the requested Borrowing Date
therefor, in the case of ABR Loans, or three Business Days prior to the
requested Borrowing Date therefor, in the case of Eurodollar Loans. ABR
Loans shall be in the minimum aggregate amount of $1,000,000 or in integral
multiples of $1,000,000 in excess thereof. Eurodollar Loans shall be in the
minimum aggregate amount of $5,000,000 or in integral multiples of $1,000,000
in excess thereof. There shall not be outstanding at any one time more than
five separate Eurodollar Loans.
(b) Upon receipt of any Loan Request from the Company, the Agent
shall forthwith give notice to each Bank of the substance thereof. Not later
than 10:00 A.M. New York time, on the Borrowing Date specified in such Loan
-19-
<PAGE>
<PAGE>
Request, each Bank shall make available to the Agent in immediately available
funds at the office of the Agent at its address set forth on the signature
pages hereof, such Bank's Pro Rata Share of the requested Loans.
(c) Upon receipt by the Agent of all such funds and upon the
satisfaction by the Company or waiver by each of the Banks of each of the
conditions precedent contained in Article VII applicable thereto, the Agent
shall disburse to the Company on the requested Borrowing Date the Loans
requested in such Loan Request. The Agent may, but shall not be required to,
advance on behalf of any Bank such Bank's Pro Rata Share of the Loans on a
Borrowing Date unless such Bank shall have notified the Agent prior to such
Borrowing Date that it does not intend to make available its Pro Rata Share
of such Loans on such date. If the Agent makes such advance, the Agent shall
be entitled to recover such amount on demand from the Bank on whose behalf
such advance was made, and if such Bank does not pay the Agent the amount of
such advance on demand, the Company shall promptly repay such amount to the
Agent. Until such amount is repaid to the Agent by such Bank or the Company,
such advance shall be deemed for all purposes to be a Loan made by the Agent.
The Agent shall be entitled to recover from the Bank or the Company, as the
case may be, interest on the amount advanced by it for each day from the
Borrowing Date therefor until repaid to the Agent, at a rate per annum equal
to the applicable rate on the Loans made on the Borrowing Date.
(d) In lieu of delivering the written notice described above, the
Company may give the Agent telephonic notice of any request for borrowing by
the time required under this Section 2.02; provided, that such telephonic
notice shall be confirmed by delivery of a written notice to the Agent by no
later than 2:00 P.M., New York time, on the date of such telephonic notice.
Section 2.03. Notes. The Company's obligation to repay the Loans
shall be evidenced by Notes, one such payable to the order of each Bank. The
Note of each Bank shall (i) be in the principal amount of such Bank's
Commitment, (ii) be dated the date of the Initial Loan and (iii) be stated to
mature on the Termination Date and bear interest from its date until maturity
on the principal balance (from time to time outstanding thereunder) payable
at the rates and in the manner provided herein. Each Bank is authorized to
indicate upon the grid attached to its Note all Loans made by it pursuant to
this Agreement, interest elections and payments of principal and interest
thereon. Such notations shall be presumptive as to the aggregate
-20-
<PAGE>
<PAGE>
unpaid principal amount of all Loans made by such Bank, and interest due
thereon, but the failure by any Bank to make such notations or the inaccuracy
or incompleteness of any such notations shall not affect the obligations of
the Company hereunder or under the Notes.
Section 2.04. Commitment Fee. The Company shall pay to the Agent
for the account of the Banks a fee (the "Commitment Fee") equal to one-half
of one percent (1/2 of 1%) per annum (on the basis of a 365-day year for the
actual number of days elapsed) on the daily average Available Commitment from
the date hereof to the Termination Date. Such fee shall be payable in
arrears on the last day of each calendar quarter, commencing on the first
such date after the date hereof, and on the Termination Date.
Section 2.05. Cancellation or Reduction of Commitment. The
Company shall have the right, upon not less than three Business Days' written
notice to the Agent and upon payment of the Commitment Fee accrued through
the date of such cancellation or reduction, to cancel the Total Commitment in
full or to reduce the amount thereof; provided, however, that the Total
Commitment may not be fully canceled so long as any Loan, Swing Line Advance
or Syndicated Letter of Credit remains outstanding; and provided, further,
that the amount of any partial reduction in the Total Commitment shall not
exceed the Available Commitment. Partial reductions of the Total Commitment
shall be in the amount of $5,000,000 or in integral multiples of $1,000,000
in excess thereof (or, if the aggregate outstanding amount of Loans is less
than $5,000,000 or $1,000,000, as the case may be, then all of such lesser
amount). All such cancellations or reductions shall be permanent.
Section 2.06. Optional Prepayment. The Company shall have the
right, on not less than three Business Days' written notice to the Agent, to
prepay Loans bearing interest on the same basis and having the same Interest
Periods, if any, in whole or in part, without premium or penalty, in the
aggregate principal amount of $1,000,000 or in integral multiples of
$1,000,000 in excess thereof, in the case of ABR Loans, or in the aggregate
principal amount of $3,000,000 or in integral multiples of $1,000,000 in
excess thereof, in the case of Eurodollar Loans (or, if the outstanding
aggregate amount of such Loan is less than $3,000,000 or $1,000,000, as the
case may be, then all of such lesser amount), together with accrued interest
on the principal being prepaid to the date of prepayment and, in the case of
Eurodollar Loans, the amounts required by
-21-
<PAGE>
<PAGE>
Section 5.03. Subject to the terms and conditions hereof, prepaid Loans may
be reborrowed.
Section 2.07. Mandatory Reduction of the Commitment; Mandatory
Prepayment.
(a) If (i) the Company or any Subsidiary shall sell, lease,
assign, transfer or otherwise dispose of any of its assets, other than
pursuant to an Excluded Asset Sale, (ii) any of Company's or Subsidiary's
capital assets shall be subject to loss, casualty, fire damage, theft or
other destruction or condemnation or (iii) the Company or a Subsidiary
issues, assumes or incurs Specified Additional Indebtedness, the Commitment
of each Bank shall be reduced as provided below by an amount equal to such
Bank's Pro Rata Share of the Net Cash Proceeds from any such sale, lease,
assignment, transfer, disposition, loss, casualty, fire damage, theft,
destruction, condemnation, issuance, assumption or incurrence. In the case
of reductions due to the issuance, assumption or incurrence of Specified
Additional Indebtedness, each Bank's Commitment shall be reduced upon receipt
by the Company or any Subsidiary, as the case may be, of the Net Cash
Proceeds, and the Company or its Subsidiary, as the case may be, shall
promptly deliver to the Agent notice of the mandatory reduction. In the case
of reductions due to a sale, lease, assignment, transfer, disposition, loss,
casualty, fire damage, theft, destruction or condemnation such reduction
shall be effective on the date that is six months after the date of receipt
of such Net Cash Proceeds, unless the Company or any such Subsidiary
(i) reinvests an amount equal to such Net Cash Proceeds in a Capital
Investment permitted hereunder within six months of receipt thereof or
(ii)(A) commits, within six months of receipt thereof, to reinvest an amount
equal to such Net Cash Proceeds in a Capital Investment permitted hereunder,
(B) delivers notice and evidence reasonably satisfactory to the Agent of such
commitment and (C) applies such amount to such Capital Investment within six
months of the date of delivery of such notice. In the event that Net Cash
Proceeds are received by the Company or any Subsidiary, the Commitment of
each Bank shall be reduced by an amount equal to such Bank's Pro Rata Share
in any such proceeds not reinvested pursuant to (i) above, or committed to be
reinvested pursuant to (ii) above, except that if any such proceeds committed
to be reinvested pursuant to (ii) above are not applied to such committed
Capital Investment within six months of the date of delivery of the required
notice, the provisions of clause (ii) above shall not apply and the
Commitment of each Bank shall be reduced as provided in the first sentence of
this Section 2.07(a), effective on
-22-
<PAGE>
<PAGE>
the date that is six months from the date of delivery of the required notice.
(b) Reductions Permanent. Once effective, any reduction of the
Commitments pursuant to this Section 2.07 shall be permanent and may not be
reinstated.
(c) Mandatory Prepayment. In order that the sum of (i) the
aggregate outstanding Loans, plus (ii) the aggregate outstanding Swing Line
Advances, plus (iii) the aggregate Face Amount of Syndicated Letters of
Credit outstanding will not at any time exceed the Total Commitment, the
Company shall to the extent of any such excess (A) prepay Loans and/or Swing
Line Advances, (B) cause Syndicated Letters of Credit to be returned to the
Issuing Bank for cancellation or (C) deposit with the Issuing Bank an amount
of cash with respect to Syndicated Letters of Credit (and upon such deposit
of cash the Company shall designate which Syndicated Letter of Credit such
cash relates to). With respect to cash deposited with the Issuing Bank
pursuant to the preceding sentence, the Issuing Bank shall (i) hold such cash
for the ratable benefit of the Banks against the obligation to pay such
Syndicated Letter of Credit in the event of any draw with respect thereto,
(ii) pay interest thereon to the Company at the NRS Rate at the end of each
month, and (iii) return to the Company all cash deposited with it pursuant to
the preceding sentence, together with any accrued but unpaid interest
thereon, promptly upon the expiration or cancellation of each Syndicated
Letter of Credit with respect to which such funds were deposited.
(d) Application of Prepayments. All prepayments required to be
made pursuant to this Section 2.07 shall be applied in the following order:
first, to compensate the Banks for any amounts required by Section 5.03, in
the case that such prepayment shall apply to any Eurodollar Loans, second, to
accrued interest on the principal amount being prepaid and third, to the
principal of the Loans and/or Swing Line Advances, as applicable, then
outstanding, if any.
(e) Officer's Certificate. Promptly upon receipt of any Net Cash
Proceeds, other than pursuant to any Excluded Asset Sale, the Company shall
deliver to the Agent a certificate signed by the chief financial officer of
the Company setting forth the amount of the gross cash proceeds received and
the items deducted therefrom in reasonable detail in order to confirm the
amount of such Net Cash Proceeds.
-23-
<PAGE>
<PAGE>
Section 2.08. Swing Line Advances.
(a) Prior to the Termination Date, and subject to the terms and
conditions of this Agreement, the Swing Line Bank shall make, on the terms
and conditions hereinafter set forth, Swing Line Advances to the Company from
time to time on any Business Day in an aggregate amount not to exceed at any
time outstanding $5,000,000 (the "Swing Line Facility"); provided, however,
that the sum of (i) the aggregate outstanding Loans, plus (ii) the aggregate
outstanding Swing Line Advances, plus (iii) the aggregate Face Amount of
Syndicated Letters of Credit outstanding at any time may not exceed the Total
Commitment; provided further, however, that the Swing Line Bank may, if in
its sole discretion it elects to do so, also make, on the terms and
conditions hereinafter set forth, Swing Line Advances to the Company from
time to time on any Business Day in an amount such that the aggregate Swing
Line Advances do not exceed at any time $5,000,000 outstanding. No Swing
Line Advance shall be used for the purpose of funding the payment of
principal of any other Swing Line Advance. Each Swing Line Borrowing shall
be in an amount of not less than $500,000 or an integral multiple of $100,000
in excess thereof.
(b) Interest. Each Swing Line Advance shall bear interest at a
rate based upon the Base Rate and in the manner set forth in Section 4.02, as
if such Swing Line Advance were an ABR Loan.
(c) Procedure. Each Swing Line Borrowing shall be made on notice,
given not later than 11:00 A.M., New York time on the date of the proposed
Swing Line Borrowing, by the Company to the Swing Line Bank and the Agent.
Each such notice of a proposed Swing Line Borrowing (a "Swing Line Advance
Request") shall be by telephone, telex, cable or telecopier (and if by telex,
telecopier or cable, in the form of Exhibit F hereto), and, if by telephone,
confirmed immediately in writing, specifying therein the requested (i) date
of such borrowing, (ii) amount of such borrowing and (iii) maturity of such
borrowing (which maturity shall be no later than the seventh day after the
requested date of such borrowing). To the extent it is required or elects to
do so pursuant to Section 2.08(a) above, the Swing Line Bank will make the
amount of the requested Swing Line Advance available to the Agent in
immediately available funds, at the office of the Agent at its address set
forth on the signature pages hereof. After the Agent's receipt of such funds
and upon satisfaction by the Company, or waiver by the Agent of each of the
conditions precedent contained in Article VII applicable thereto, the Agent
will disburse such funds to the Company. Upon written demand by the Swing
Line
-24-
<PAGE>
<PAGE>
Bank, with a copy of such demand to the Agent, each other Bank shall purchase
from the Swing Line Bank, and the Swing Line Bank shall sell and assign to
each such other Bank, such other Bank's Pro Rata Share of such outstanding
Swing Line Advance as of the date of such demand, by making available to the
Agent for the account of the Swing Line Bank, in immediately available funds,
an amount equal to the portion of the outstanding principal amount of such
Swing Line Advance to be purchased by such Bank. The Company hereby agrees
to each such sale and assignment. Each Bank agrees to purchase its Pro Rata
Share of an outstanding Swing Line Advance on (i) the Business Day on which
demand therefor is made by the Swing Line Bank, provided that notice of such
demand is given not later than 11:00 A.M., New York time, on such Business
Day or (ii) the first Business Day next succeeding such demand if notice of
such demand is given after such time. Upon any such assignment by the Swing
Line Bank to any other Bank of a portion of a Swing Line Advance, the Swing
Line Bank represents and warrants to such other Bank that the Swing Line Bank
is the legal and beneficial owner of such interest being assigned by it, but
makes no other representation or warranty and assumes no responsibility with
respect to such Swing Line Advance, the Credit Documents or the Company. If
and to the extent that any Bank shall not have so made the amount of such
Swing Line Advance available to the Agent, such Bank agrees to pay to the
Agent forthwith on demand such amount together with interest thereon, for
each day from the date of demand by the Swing Line Bank until the date such
amount is paid to the Agent, at a rate per annum equal to the rate of
interest then applicable to ABR Loans, changing as and when said rate
changes. If such Bank shall pay to the Agent such amount for the account of
the Swing Line Bank on any Business Day, such amount so paid in respect of
principal shall constitute a Swing Line Advance made by such Bank on such
Business Day for purposes of this Agreement, and the outstanding principal
amount of the Swing Line Advance made by the Swing Line Bank shall be reduced
by such amount on such Business Day.
(d) Repayment. The Company shall repay to the Agent for the
account of the Swing Line Bank and each other Bank which has made a Swing
Line Advance the outstanding principal amount of each Swing Line Advance made
to the Company by each of them on the earlier of the maturity date specified
in the applicable Swing Line Advance Request (which maturity shall be no
later than the seventh day after the requested date of such borrowing) and
the Termination Date.
-25-
<PAGE>
<PAGE>
Section 2.09. Clean-Up Periods. The Company shall, to the extent
necessary, repay outstanding Loans and Swing Line Advances and cash
collateralize, or cause to be returned for cancellation, Syndicated Letters
of Credit so that during each Clean-Up Period to occur following the date of
the Initial Loan the aggregate outstanding amount of Loans plus Swing Line
Advances plus the Face Amount of Syndicated Letters of Credit is less than
$35,000,000. Such repaid Loans and Swing Line Advances and cash
collateralized or returned Syndicated Letters of Credit may not be reborrowed
until after such Clean-Up Period has ended. No Clean-Up Period shall begin
earlier than thirty days after the completion of the immediately preceding
Clean-Up Period.
ARTICLE III
SYNDICATED LETTERS OF CREDIT
Section 3.01. Syndicated Letters of Credit. Subject to the terms
and conditions hereof, the Issuing Bank shall issue letters of credit (the
"Syndicated Letters of Credit") for the account of the Company.
(a) The Syndicated Letters of Credit Commitment at any time shall
be equal to the lesser of (x) $25,000,000 and (y) the Available Commitment.
(b) The Syndicated Letters of Credit (A) shall have an aggregate
Face Amount not in excess of the Syndicated Letter of Credit Commitment,
(B) may, at the sole option of the Issuing Bank, be renewable if so requested
by the Company using the form for such request then in general use by the
Issuing Bank, and (C) shall have an expiration date no later than the earlier
of (i) 365 days after the date of issuance thereof and (ii) the Termination
Date. There shall not be outstanding at any one time more than ten (10)
separate Syndicated Letters of Credit.
(c) The Company shall give the Agent at least three Business Days'
prior written notice substantially in the form of Exhibit G (effective upon
receipt) (a "Letter of Credit Notice") specifying the date on which each
Syndicated Letter of Credit is to be issued, the requested expiration date
thereof and the stated amount thereof, and attaching a proposed form of such
letter of credit accompanied by a completed form of application for issuance
of a letter of credit, using such standard form as shall then be in general
use by the Issuing Bank. Upon receipt of such notice, the Agent shall notify
each Bank of the contents thereof.
-26-
<PAGE>
<PAGE>
(d) Upon the date of issuance of each Syndicated Letter of Credit,
the Issuing Bank shall be deemed, without further action by any party hereto,
to have sold to each Bank, and each Bank hereby irrevocably agrees to
purchase and each Bank shall be deemed, without further action by any party
hereto, to have purchased from the Issuing Bank, an undivided and continuing
participation in such Syndicated Letter of Credit, in accordance with such
Bank's Pro Rata Share.
(e) Upon receipt from the beneficiary of any Syndicated Letter of
Credit of any demand for payment under such Letter of Credit, the Issuing
Bank shall promptly notify the Company as to the amount paid or to be paid as
a result of such demand and the respective payment date.
(f) Each Bank shall promptly, upon request by the Issuing Bank,
remit to the Issuing Bank, through the Agent, such Bank's share (as
determined in accordance with Section 3.01(d) above) of the payment made by
the Issuing Bank together with interest thereon for each day from the day of
demand through the day of payment at a rate equal to the rate of interest
then applicable to ABR Loans, changing as and when said rate shall change.
(g) The Company shall not later than noon, New York time, on the
date of payment of each drawing, reimburse the Issuing Bank, through the
Agent, for any amounts paid by the Issuing Bank under any Syndicated Letter
of Credit. The Issuing Bank shall promptly remit to each Bank, through the
Agent, such Bank's share (as determined in accordance with Section 3.01(d)
above) of any payment received by the Issuing Bank to the extent that such
Bank has reimbursed the Issuing Bank in accordance with clause (f) of this
Section 3.01. To the extent that the Company does not reimburse the Issuing
Bank, by means of payment pursuant to this paragraph (g) or by means of Loans
issued pursuant to paragraph (h) of this Section 3.01, for any payment by the
Issuing Bank under any Syndicated Letter of Credit on the date of such
payment, such amounts not reimbursed shall accrue interest, payable on
demand, at the rate per annum (on the basis of a 365-day year for the actual
number of days involved) equal to the sum of (i) 2% per annum and (ii) the
rate of interest then applicable to ABR Loans, changing as and when said rate
shall change.
(h) The Company may request each Bank to make a Loan in order to
pay its Reimbursement Obligation in respect of any payment of each drawing
under any Syndicated Letter of Credit. To the extent that the Company has
not otherwise paid such Reimbursement Obligation on the date of any such
-27-
<PAGE>
<PAGE>
drawing, the Company shall be deemed to have given a timely notice of request
for Loans to be made on such day as ABR Loans in an aggregate amount of such
Reimbursement Obligation. On the day that Loans are to be made in order to
pay such Reimbursement Obligation, each Bank shall, subject to and in
accordance with the terms and conditions of this Agreement (including
satisfaction of the conditions set forth in Article VII hereof), make a Loan,
the proceeds of which shall be applied to such Reimbursement Obligation;
provided, however, that such Loan may be in amounts less than the minimum
aggregate principal amount or in amounts other than in multiples of
$1,000,000 in excess thereof as required by Section 2.02(a); and provided
further that, with respect to such Loan, such Bank shall be required to make
available to the Issuing Bank under Section 2.02(b) only an amount equal to
the difference, if any, between the amount of such Loan and the amount
remitted through the Agent to the Issuing Bank pursuant to Section 3.01(f).
Nothing in this paragraph (h) shall limit each Bank's irrevocable obligations
with respect to participations in each Syndicated Letter of Credit pursuant
to this Section 3.01.
(i) The Company shall pay to the Agent for the account of each
Bank a letter of credit fee (the "Letter of Credit Fee") on such Bank's share
(as determined in accordance with Section 3.01(d) above) of each Syndicated
Letter of Credit in the daily average undrawn face amount of such Syndicated
Letter of Credit for the period from and including the date of issuance
thereof to and including the date of expiration or termination thereof at a
rate per annum equal to 2.5%, such fee to be paid quarterly in arrears on the
last day of each March, June, September and December, and on the date of
expiration of such Syndicated Letter of Credit; provided that if any such day
is not a Business Day, such fee shall be payable on the next preceding
Business Day.
(j) The Company shall pay to the Issuing Bank for the sole account
of the Issuing Bank an issuing fee (the "Issuing Fee") equal to 1/4 of 1% per
annum of the aggregate daily average undrawn face amount of Syndicated
Letters of Credit outstanding from time to time, such fee to be paid
quarterly in arrears on the last day of each March, June, September and
December; provided that if any such day is not a Business Day, such fee shall
be payable on the next preceding Business Day. The Company shall also pay
such other fees with respect to issuance, amendment, advising and like
services by the Issuing Bank as are generally charged to its customers by the
Issuing Bank for such services at the time such service is performed.
-28-
<PAGE>
<PAGE>
(k) The obligations of the Company under this Section 3.01 shall
be unconditional and irrevocable and shall be paid strictly in accordance
with the terms of this Agreement under all circumstances, including
circumstances such as: (a) any lack of validity or enforceability of this
Agreement, any Syndicated Letter of Credit or any other Credit Document; (b)
the existence of any claim, set-off, defense or other right that the Company
or any other Person may have at any time against any beneficiary or
transferee of any Syndicated Letter of Credit (or any Persons from whom any
such beneficiary or transferee may be acting), the Issuing Bank, any Bank or
any other Person, whether in connection with this Agreement, the transactions
contemplated hereby or any unrelated transaction; (c) any draft, certificate,
statement or other document presented under any Syndicated 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; (d) payment
by the Issuing Bank under any Syndicated Letter of Credit against
presentation of a draft or certificate that does not comply with the terms of
such Syndicated Letter of Credit, or payment by the Issuing Bank under the
Syndicated Letter of Credit in any other circumstances in which conditions to
payment are not met, except any such payment resulting solely from the gross
negligence or willful misconduct of such Issuing Bank; or (e) any other
event, condition or circumstance whatever, whether or not similar to any of
the foregoing. The Company bears the risk of, and neither the Issuing Bank,
any of its directors, officers, employees or agents, nor any Bank, shall be
liable or responsible for any of the foregoing matters, the use that may be
made of any Syndicated Letter of Credit or acts or omissions of the
beneficiary or any transferee in connection therewith.
(l) On each day during the period commencing with the issuance by
the Issuing Bank of any Syndicated Letter of Credit and until such Syndicated
Letter of Credit shall have expired or been terminated, the Commitment of
each Bank shall be deemed to be utilized for all purposes hereof (including
Section 2.04) in an amount equal to such Bank's share (as determined in
accordance with Section 3.01(d) above) of the then undrawn face amount of
such Letter of Credit; provided, however, that for the purpose of determining
whether any requested Loan or Syndicated Letter of Credit would exceed the
Total Commitment if made, on each day during the period commencing with the
giving of notice by the Company to the Issuing Bank of a requested Syndicated
Letter of Credit pursuant to Section 3.01(c), the Commitment of each Bank
shall be deemed to be utilized in an amount
-29-
<PAGE>
<PAGE>
equal to such Bank's Commitment with respect to the then undrawn face amount
of such Syndicated Letter of Credit.
(m) The issuance by the Issuing Bank of each Syndicated Letter of
Credit shall, in addition to the conditions precedent set forth in
Article VII, be subject to the conditions precedent that such Syndicated
Letter of Credit shall be in such form as shall be satisfactory to the
Issuing Bank in its reasonable discretion and that the Company shall have
executed and delivered such other instruments and agreements relating to such
Syndicated Letter of Credit as the Issuing Bank shall have reasonably
requested.
(n) If, at any time, after the Issuing Bank has made payment on a
demand under a Syndicated Letter of Credit and has received from any Bank
such Bank's share of such payment, and the Issuing Bank receives any payment
or makes any application of funds on account of the Company's Reimbursement
Obligations under such Syndicated Letter of Credit arising from such payment,
the Issuing Bank will pay to the Agent, for the account of such Bank, such
Bank's share (as determined in accordance with Section 3.01(d) above) of such
payment.
(o) If any amount received by the Issuing Bank on account of any
Syndicated Letter of Credit Reimbursement Obligation shall be avoided,
rescinded or otherwise returned or paid over by the Issuing Bank for any
reason at any time, whether before or after the termination of this Agreement
(or the Issuing Bank believes in good faith that such avoidance, rescission,
return or payment is required, whether or not such matter has been
adjudicated), each Bank shall, promptly upon notice from the Issuing Bank,
pay over to the Agent for the account of the Issuing Bank its share (as
determined in accordance with Section 3.01(d) above) of such amount, together
with its Pro Rata Share of any interest or penalties payable with respect
thereto.
(p) In the event that the Commitment terminates by acceleration
upon the occurrence of a default or otherwise, prior to the Termination Date,
upon such termination, the Company shall either (i) cause all Syndicated
Letters of Credit to be returned to the Issuing Bank for cancellation or
(ii) deposit with the Issuing Bank an amount of cash equal to the Face Amount
of all Syndicated Letters of Credit not so returned to the Issuing Bank upon
such termination. The Issuing Bank shall hold funds so deposited for the
ratable benefit of the Banks as collateral against the obligation of the
Banks to pay such Syndicated Letters of Credit in the event of any draw with
respect
-30-
<PAGE>
<PAGE>
thereto and shall pay interest thereon to the Company at the NRS Rate at the
end of each month. The Issuing Bank shall return to the Company any amounts
deposited with it pursuant to this Section 3.01(p) promptly upon the
expiration or cancellation of each Syndicated Letter of Credit with respect
to which such funds were deposited.
(q) Notwithstanding any other provision hereof, each Bank hereby
agrees that its obligation to participate in each Syndicated Letter of Credit
issued in accordance herewith, its obligation to make the payments specified
in this Section 3.01, and the right of the Issuing Bank to receive such
payments in the manner specified therein, are each absolute, irrevocable and
unconditional and shall not be affected by any event, condition or
circumstance whatsoever. The failure of any Bank to make any such payment
shall not relieve any other Bank of its funding obligation hereunder on the
date due, but no Bank shall be responsible for the failure of any other Bank
to meet its funding obligations hereunder.
ARTICLE IV
INTEREST, METHOD OF PAYMENT, CONVERSION, ETC.
Section 4.01. Procedure for Interest Rate Determination. Unless
the Company shall request in a Loan Request or in a Conversion Request that
the Loans (or portions thereof) bear interest as Eurodollar Loans, the Loans
shall bear interest as ABR Loans.
Section 4.02. Interest on ABR Loans. Each ABR Loan shall bear
interest from the date of such ABR Loan until maturity, or the beginning of
any relevant Interest Period, as the case may be, payable in arrears on the
last day of each month of each year, commencing with the first such date
after the date hereof, and on the date such ABR Loan is repaid, at a rate per
annum (on the basis of a 365- or 366-day year for the actual number of days
involved) equal to the sum of (i) the Applicable Margin with respect to ABR
Loans and (ii) the Base Rate in effect from time to time, which rate shall
change as and when said Base Rate shall change.
Section 4.03. Interest on Eurodollar Loans.
(a) Each Eurodollar Loan shall bear interest from the date of such
Loan until maturity, payable in arrears, with respect to Interest Periods of
three months or less, on the last day of such Interest Period, and with
respect to
-31-
<PAGE>
<PAGE>
Interest Periods longer than three months, on the day which is three months
after the commencement of such Interest Period and on the last day of such
Interest Period, at a rate per annum (on the basis of a 360-day year for the
actual number of days involved), determined by the Agent with respect to each
Interest Period with respect to Eurodollar Loans, equal to the sum of (i) the
Applicable Margin and (ii) LIBOR.
(b) The Interest Period for each Eurodollar Loan shall be selected
by the Company at least three Business Days prior to the beginning of such
Interest Period. If the Company fails to notify the Agent of the Interest
Period for a subsequent Eurodollar Loan at least three Business Days prior to
the last day of the then current Interest Period of an outstanding Eurodollar
Loan, then such outstanding Eurodollar Loan shall become an ABR Loan at the
end of such current Interest Period.
(c) Notwithstanding the foregoing: (i) if any Interest Period for
a Eurodollar Loan would otherwise end on a day which is not a Business Day,
such Interest Period shall be extended to the next succeeding Business Day
unless the result of such extension would be to carry such Interest Period
into another calendar month, in which event such Interest Period shall end on
the immediately preceding Business Day; (ii) any Interest Period that begins
on the last Business Day of a calendar month (or on a day for which there is
no numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of a calendar month; and
(iii) no Interest Period for a Eurodollar Loan may extend beyond the
Termination Date.
(d) Eurodollar Loans shall be made by each Bank from its branch or
affiliate identified as its Eurodollar Lending Office on the signature page
hereto, or such other branch or affiliate as it may hereafter designate to
the Company and the Agent as its Eurodollar Lending Office.
Section 4.04. Conversion.
(a) The Company may request, by delivery to the Agent of a
written Conversion Request not less than three Business Days prior to a
requested Conversion Date, that all or portions of the outstanding Loans, in
the aggregate amount of $1,000,000 or in integral multiples of $1,000,000 in
excess thereof (or, if the aggregate amount of outstanding Loans is less than
$1,000,000, then all such lesser amount) to bear interest from and after the
Conversion Date as either ABR Loans or Eurodollar Loans.
-32-
<PAGE>
<PAGE>
(b) Upon receipt of any such Conversion Request from the Company,
the Agent shall forthwith give notice to each Bank of the substance thereof.
Effective on such Conversion Date and upon payment by the Company of the
amounts, if any, required by Section 5.03, the Loans or portions thereof as
to which the Conversion Request was made shall commence to accrue interest as
set forth in this Article IV for the interest rate selected by the Company.
(c) In lieu of delivering the above described notice, the Company
may give the Agent telephonic notice hereunder by the required time under
this Section 4.04; provided, that such telephonic notice shall be confirmed
by delivery of a written notice to the Agent by no later than 2:00 P.M., New
York City time, the date of such telephonic notice.
Section 4.05. Post Default Interest. Upon the occurrence and
during the continuation of an Event of Default, the Agent or the Required
Banks may, at their option, by notice to the Company (which notice may be
revoked at the option of the Required Banks notwithstanding any provision of
Section 11.04 requiring unanimous consent of the Banks to changes in interest
rate), declare that all Loans, Swing Line Advances and any unpaid installment
of interest shall bear interest at a rate per annum (on the basis of a 365-
day year (with respect to ABR Loans and Swing Line Advances) or a 360-day
year (with respect to Eurodollar Loans) for the actual number of days
involved) equal to the sum of (i) 2% and (ii) (A) with respect to ABR Loans
and Swing Line Advances, the rate of interest then applicable to ABR Loans,
changing as and when said rate shall change, and (B) with respect to
Eurodollar Loans, the rate of interest applicable to each such Eurodollar
Loan. Interest payable pursuant to this Section 4.05 shall be payable on
demand.
Section 4.06. Maximum Interest Rate.
(a) Nothing in this Agreement or the Notes shall require the
Company to pay interest at a rate exceeding the maximum rate permitted by
applicable law. Neither this Section nor Section 11.01 is intended to limit
the rate of interest payable for the account of any Bank to the maximum rate
permitted by the laws of the State of New York (or any other applicable law)
if a higher rate is permitted with respect to such Bank by supervening
provisions of U.S. Federal law.
(b) If the amount of interest payable for the account of any Bank
on any interest payment date in respect of the immediately preceding interest
computation period,
-33-
<PAGE>
<PAGE>
computed pursuant to this Article IV, would exceed the maximum amount
permitted by applicable law to be charged by such Bank, the amount of
interest payable for its account on such interest payment date shall
automatically be reduced to such maximum permissible amount.
(c) If the amount of interest payable for the account of any Bank
in respect of any interest computation period is reduced pursuant to clause
(b) of this Section 4.06 and the amount of interest payable for its account
in respect of any subsequent interest computation period would be less than
the maximum amount permitted by law to be charged by such Bank, then the
amount of interest payable for its account in respect of such subsequent
interest computation period automatically shall be increased to such maximum
permissible amount; provided that at no time shall the aggregate amount by
which interest paid for the account of any Bank has been increased pursuant
to this clause (c) exceed the aggregate amount by which interest paid for its
account has theretofore been reduced pursuant to clause (b) of this
Section 4.06.
ARTICLE V
DISBURSEMENT AND PAYMENT
Section 5.01. Pro Rata Treatment. Each payment of the Commitment
Fee and each reduction of the Total Commitment shall be apportioned among the
Banks in proportion to each Bank's Pro Rata Share. Except as provided in
Section 5.04 or 5.05, the Notes or portions thereof as to which a Conversion
Request has been made pursuant to Section 4.04 hereof shall at all times bear
interest on the same basis (as ABR Loans and Eurodollar Loans) and the
Interest Periods applicable thereto, if any, shall be of the same duration.
Section 5.02. Method of Payment. All payments by the Company
hereunder and under the Notes shall be made without setoff or counterclaim to
the Agent, for its account or for the account of the Bank or Banks entitled
thereto, as the case may be, in lawful money of the United States and in
immediately available funds at the office of the Agent on the date when due.
Section 5.03. Compensation for Losses.
Compensation. In the event that the Company makes a
prepayment of Eurodollar Loans under Section 2.06 or 2.07 or in the event a
Conversion Date with respect to a
-34-
<PAGE>
<PAGE>
Eurodollar Loan selected pursuant to Section 4.04 falls on a day other than
the last day of the Interest Period for the amount so prepaid or as to which
a conversion is made, or in the event the Company revokes any notice given
under Section 2.02 with respect to a Eurodollar Loan, or in the event the
Loans or portions thereof are converted into ABR Loans pursuant to
Section 5.05, or Eurodollar Loans shall be declared to be due and payable
prior to the scheduled maturity thereof pursuant to Section 9.01, the Company
shall pay to each Bank promptly after its demand an amount which will compen-
sate such Bank for any out-of-pocket loss or premium or penalty incurred by
such Bank as a result of such prepayment, conversion, declaration or
revocation of notice in respect of funds obtained for the purpose of making
or maintaining such Bank's Loans, or any part thereof. Such compensation
shall include an amount equal to the excess, if any, of (i) the amount of
interest which would have accrued on the amount so paid or prepaid, or not
borrowed or converted, for the period from the date of such payment or
prepayment or conversion or failure to borrow to the last day of such
Interest Period (or, in the case of a failure to borrow, the Interest Period
that would have commenced on the date of such failure to borrow) in each case
at the applicable rate of interest for such Loan provided for herein
(excluding, however, the Applicable Margin included therein) over (ii) the
amount of interest (as reasonably determined by such Bank) which would have
accrued to such Bank on such amount by placing such amount on deposit for a
comparable period with leading banks in the London interbank market or in the
New York certificate of deposit market.
(b) Certificate, Etc. Each Bank shall promptly notify the
Company, with a copy to the Agent, upon becoming aware that the Company may
be required to make any payment pursuant to this Section 5.03. When
requesting payment pursuant to this Section 5.03, each Bank shall provide to
the Company, with a copy to the Agent, a certificate, signed by an officer of
such Bank, setting forth the amount required to be paid by the Company to
such Bank and the computations made by such Bank to determine such amount.
In the absence of manifest error, such certificate shall be conclusive and
binding on the Company as to the amount so required to be paid by the Company
to such Bank.
Section 5.04. Withholding, Reserves and Additional Costs.
(a) Withholding. To the extent permitted by law, all payments
under this Agreement and under the Notes (including payments of principal and
interest) shall be payable to each Bank free and clear of any and all present
-35-
<PAGE>
<PAGE>
and future taxes, levies, imposts, duties, deductions, withholdings, fees,
liabilities and similar charges (collectively, the "Taxes"); provided, that
"Taxes" shall not include taxes imposed on or measured by the overall net
income of any Bank by the United States of America or any political
subdivision or taxing authority thereof or therein, or taxes on or measured
by the overall net income of any foreign office, branch or subsidiary of such
Bank by any foreign country or subdivision thereof in which such office,
branch or subsidiary is doing business. If any Taxes are required to be
withheld or deducted from any amount payable under this Agreement or any
Note, then the amount payable under this Agreement or such Note shall be
increased to the amount which, after deduction from such increased amount of
all Taxes required to be withheld or deducted therefrom, will yield to such
Bank the amount stated to be payable under this Agreement or such Note. The
Company shall execute and deliver to any Bank upon its request such further
instruments as may be necessary or desirable to give full force and effect to
any such increase, including a new Note of the Company to be issued in
exchange for any Note theretofore issued. The Company shall also hold each
Bank harmless and indemnify it for any stamp or other taxes with respect to
the preparation, execution, delivery, recording, performance or enforcement
of the Credit Documents (all of which shall be included within "Taxes"). If
any of the Taxes specified in this Section 5.04(a) are paid by any Bank, the
Company shall, upon demand of such Bank, promptly reimburse such Bank for
such payments, together with any interest, penalties and expenses incurred in
connection therewith, plus interest thereon at a rate per annum (based on a
365-day year for the actual number of days involved) equal to the sum of 2%
and the interest rate then applicable to ABR Loans, changing as and when such
rate shall change, from the date such payment or payments are made by such
Bank to the date of reimbursement by the Company. The Company shall deliver
to the Agent certificates or other valid vouchers for all Taxes or other
charges deducted from or paid with respect to payments made by the Company
hereunder. Notwithstanding the foregoing, the Company shall be entitled, to
the extent it is required to do so by law, to deduct or withhold (and shall
not be required to make payments as otherwise required in this Section on
account of such deductions or withholdings) income or other similar taxes
imposed by the United States of America from interest, fees or other amounts
payable hereunder for the account of any Bank other than a Bank (i) who is a
U.S. Person for U.S. Federal income tax purposes or (ii) who has the
Prescribed Forms on file with the Company for the applicable year; provided,
that if the Company shall so deduct or withhold any such taxes, it shall
-36-
<PAGE>
<PAGE>
provide a statement to the Agent and such Bank, setting forth the amount of
such taxes so deducted or withheld, the applicable rate and any other
information or documentation which such Bank may reasonably request for
assisting such Bank to obtain any allowable credits or deductions for the
taxes so deducted or withheld in the jurisdiction or jurisdictions in which
such Bank is subject to tax.
(ii) Each Bank agrees that (x) it will take all reasonable actions
by all usual means to maintain all exemptions, if any, available to it from
United States withholding taxes (whether available by treaty or existing
administrative waiver) and (y) otherwise cooperate with the Company to
minimize any amounts payable by the Company under this Section 5.04(a).
(b) Additional Costs. (i) If after the date hereof, any change
in any law or regulation or in the interpretation thereof by any court or
administrative or governmental authority charged with the administration
thereof or the enactment of any law or regulation shall either (1) impose,
modify or deem applicable any reserve, special deposit or similar requirement
against the Banks' Commitments or the Loans or Swing Line Advances or
(2) impose on any Bank any other condition regarding this Agreement, its
Commitment or the Loans or Swing Line Advances and the result of any event
referred to in clause (1) or (2) of this clause (b) shall be to increase the
cost to any Bank of maintaining its Commitment or the Loans or Swing Line
Advances (which increase in cost shall be calculated in accordance with each
Bank's reasonable averaging and attribution methods) by an amount which any
such Bank deems to be material, then, upon written demand by such Bank, the
Company shall pay to such Bank within 15 days of such written demand an
amount equal to such increase in cost; provided, that in respect of any Loan
or Swing Line Advance, no such compensation shall be payable to the extent
that, in the reasonable opinion of such Bank, the interest rate on the Loans
or Swing Line Advances has been adjusted to account for such increased cost.
Such amount shall bear interest, after receipt by the Company of such demand
until payment in full thereof, at a rate per annum (based on a 365-day year,
for the actual number of days involved) equal to the sum of 2% and the
interest rate then applicable to ABR Loans, changing as and when such rate
shall change.
(ii) If any Bank shall have determined that the adoption of any
applicable law, rule, regulation or guideline regarding capital adequacy, or
any change therein, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable
-37-
<PAGE>
<PAGE>
agency charged with the interpretation or administration thereof, (including
any such adoption or change made prior to the date hereof but not effective
until after the date hereof) or compliance by any Bank with any request or
directive regarding capital adequacy (whether or not having the force of law)
of any such authority, central bank or comparable agency, has or would have
the effect of reducing the rate of return on capital for any such Bank or any
corporation controlling such Bank as a consequence of its obligations under
this Agreement to a level below that which such Bank or such corporation
could have achieved but for such adoption, change or compliance (taking into
consideration such Bank's or such corporation's policies with respect to
capital adequacy), then from time to time, upon demand by such Bank, the
Company shall pay to such Bank such additional amount or amounts as will
compensate such Bank for such reduction, plus interest thereon at a rate per
annum (based on a 365-day year, for the actual number of days involved) equal
to the sum of 2% and the interest rate then applicable to ABR Loans, changing
as and when such rate shall change, from the date of such demand by such Bank
to the date of payment by the Company.
(c) Lending Office Designations. Before giving any notice to the
Company pursuant to this Section 5.04, each Bank shall, if possible,
designate a different lending office if such designation will avoid the need
for giving such notice and will not, in the judgment of such Bank, be
otherwise disadvantageous to such Bank.
(d) Certificate, Etc. Each Bank shall promptly notify the
Company, with a copy to the Agent, upon becoming aware that the Company may
be required to make any payment pursuant to this Section 5.04. When
requesting payment pursuant to this Section 5.04, each Bank shall provide to
the Company, with a copy to the Agent, a certificate, signed by an officer of
such Bank, setting forth the amount required to be paid by the Company to
such Bank and the computations made by such Bank to determine such amount.
Determinations and allocations by such Bank for purposes of this Section 5.04
shall be conclusive, provided that such determinations and allocations are
made on a reasonable basis and are mathematically accurate. In the absence
of manifest error, such certificate shall be conclusive and binding on the
Company as to the amount so required to be paid by the Company to such Bank.
Section 5.05. Unavailability. If at any time any Bank shall have
determined in good faith (which determination shall be conclusive) that the
making or maintenance of all or any part of such Bank's Eurodollar Loans has
been
-38-
<PAGE>
<PAGE>
made impracticable or unlawful because of compliance by such Bank in good
faith with any law or guideline or interpretation or administration thereof
by any official body charged with the interpretation or administration
thereof or with any request or directive of such body (whether or not having
the effect of law), because U.S. dollar deposits in the amount and requested
maturity of such Eurodollar Loans are not available to the Bank in the London
Eurodollar interbank market or because of any other reason, then the Agent,
upon notification to it of such determination by such Bank, shall forthwith
advise the other Banks and the Company thereof. Upon such date as shall be
specified in such notice and until such time as the Agent, upon notification
to it by such Bank, shall notify the Company and the other Banks that the
circumstances specified by it in such notice no longer apply,
(i) notwithstanding any other provision of this Agreement, such Bank's
Eurodollar Loans shall automatically and without requirement of notice by the
Company be converted to ABR Loans and (ii) the obligation of only such Bank
to allow borrowing, elections and renewals of Eurodollar Loans shall be sus-
pended, and, if the Company shall request in a Borrowing Request or
Conversion Request that such Bank make a Eurodollar Loan, the loan requested
to be made by such Bank shall instead be made as an ABR Loan.
Section 5.06. Additional Costs in Respect of Letters of Credit.
(a) Except in the case of increased cost attributable to the
imposition of taxes as to which the Company's liability is governed by
Section 5.04(a), if as a result of any change after the date hereof in
applicable law or regulation or in the interpretation thereof by any
Governmental Authority there shall be imposed, modified or deemed applicable
any reserve, special deposit, capital adequacy requirement or other
requirements against or with respect to or measured by reference to
Syndicated Letters of Credit issued or to be issued by the Issuing Bank
hereunder and the result shall be to increase the cost to the Issuing Bank of
issuing or maintaining any Syndicated Letter of Credit hereunder, or reduce
any amount receivable by the Issuing Bank hereunder in respect of any
Syndicated Letter of Credit (which increase in cost, or reduction in amount
receivable, shall be the result of the Issuing Bank's reasonable allocation
of the aggregate of such increases or reductions resulting from such event),
the Company shall, upon demand by the Issuing Bank, promptly pay to the
Issuing Bank such additional amounts as the Issuing Bank from time to time
specifies as necessary to compensate the Issuing Bank for such increased
costs or reductions in amounts receivable.
-39-
<PAGE>
<PAGE>
(b) Certificate, Etc. The Issuing Bank shall promptly notify the
Company, with a copy to the Agent, upon becoming aware that the Company may
be required to make any payment pursuant to this Section 5.06. When
requesting payment pursuant to this Section 5.06, the Issuing Bank shall
provide to the Company, with a copy to the Agent, a certificate, signed by an
officer of the Issuing Bank, setting forth the amount required to be paid by
the Company to the Issuing Bank and the computations made by the Issuing Bank
to determine such amount. Determinations and allocations by the Issuing Bank
for purposes of this Section 5.06 shall be conclusive, provided that such
determinations and allocations are made on a reasonable basis and are
mathematically accurate. In the absence of manifest error, such certificate
shall be conclusive and binding on the Company as to the amount so required
to be paid by the Company to the Issuing Bank. Notwithstanding anything to
the contrary contained herein, the Company shall not be required to make any
payment to the Issuing Bank pursuant to this Section 5.06 with respect to
costs, reductions or other amounts relating to any time which is greater than
30 days prior to the Issuing Bank's request therefor.
Section 5.07. Commercial Practices in Respect of Letters of
Credit. Without affecting any rights the Banks may have under applicable law
(including under the UCP), the Company agrees that none of the Banks, the
Issuing Bank or the Agent nor any of their respective officers or directors
shall be liable or responsible for, and the obligations of the Company to the
Banks, the Issuing Bank, and the Agent hereunder shall not in any manner be
affected by: (i) the use that may be made of any Syndicated Letter of Credit
or the proceeds thereof by the beneficiary thereof or any other Person;
(ii) the validity, sufficiency or genuineness of documents other than the
Issuing Bank Syndicated Letters of Credit, or of any endorsement(s) thereon,
even if such documents should, in fact, prove to be in any or all respects
invalid, insufficient, fraudulent or forged; or (iii) any other circumstances
whatsoever in making or failing to make payment under any Syndicated Letter
of Credit; provided that the foregoing shall not operate to bar a claim
against a Bank or the Issuing Bank to the extent, but only to the extent, of
any direct, as opposed to consequential, damages suffered by the Company that
are caused by such Bank's or Issuing Bank's willful misconduct or gross
negligence in determining whether documents presented under any Syndicated
Letter of Credit complied with the terms of such Syndicated Letter of Credit
or such Bank's or Issuing Bank's failure to pay under such Syndicated Letter
of Credit after the presentation to it of
-40-
<PAGE>
<PAGE>
documents strictly complying with the terms and conditions of such Syndicated
Letter of Credit. In furtherance and not in limitation of the foregoing, any
Bank or the Issuing Bank may accept documents that appear on their face to be
in order without responsibility for further investigation.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Section 6.01. Representations and Warranties. The Company
represents and warrants to the Banks that:
(a) Subsidiaries. At the date hereof, the Company has no
Subsidiaries other than as listed on Schedule 6.01(a).
(b) Good Standing and Power. The Company and each of its
Subsidiaries are corporations, each duly organized and validly existing,
under the laws of the jurisdiction of its incorporation, and each has the
corporate power to own its property and to carry on its business as now being
conducted and is duly qualified to do business and is in good standing in
each jurisdiction in which the character of the properties owned or leased by
it therein or in which the transaction of its business makes such qualifica-
tion necessary, except where any such failure could not individually or
together with all other such failures to be so qualified reasonably be
expected to have a Material Adverse Effect.
(c) Corporate Authority. The Company has full corporate power and
authority to execute, deliver and perform each of the Credit Documents to
which it is a party, to grant to the Collateral Agent the security interests
and liens described therein, to make the borrowings contemplated hereby, and
to execute and deliver the Notes and to incur the obligations provided for
herein and therein, all of which have been duly authorized by all proper and
necessary corporate action. No consent or approval of stockholders of the
Company is required as a condition to the validity or performance or the
exercise by the Agent or the Banks of any of their rights or remedies under
any of the Credit Documents.
(d) Authorizations. All authorizations, consents, approvals,
registrations, notices, exemptions and licenses with or from Governmental
Authorities and other Persons which are necessary for the borrowing
hereunder, the grant of the security interests in and liens on the Collat-
-41-
<PAGE>
<PAGE>
eral, the execution and delivery of the Credit Documents, the performance by
the Company of its obligations hereunder and thereunder and the exercise by
the Agent and the Banks of their remedies hereunder and thereunder have been
effected or obtained and are in full force and effect, except for those that
may be necessary in connection with the perfection or protection of liens
granted pursuant to the Security Documents.
(e) Binding Agreements. This Agreement and each of the other
Credit Documents (other than the Notes) constitutes, and the Notes, when
executed and delivered pursuant hereto for value received will constitute,
the valid and legally binding obligations of the Company enforceable in
accordance with their terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles.
(f) Litigation. Except as described in Schedule 6.01(f) hereto,
there are no proceedings or investigations pending or threatened before any
court or arbitrator or before or by any Governmental Authority which, in any
one case or in the aggregate, could reasonably be expected to have a Material
Adverse Effect or relate to any Credit Document or the transactions
contemplated hereby and thereby.
(g) No Conflicts. There is no statute, regulation, rule, order or
judgment, and no provision of any material agreement or instrument binding on
the Company or any of its Subsidiaries, or affecting their respective
properties and no provision of the certificate of incorporation or by-laws of
the Company or any of its Subsidiaries, which would prohibit, conflict with
or in any way prevent the execution, delivery, or performance of the terms of
the Credit Documents or the incurrence of the obligations provided for herein
and therein, or result in or require the creation or imposition of any Lien
on any of the Company's or its Subsidiaries' properties as a consequence of
the execution, delivery and performance of any Credit Document or the
transactions contemplated hereby and thereby, other than as contemplated in
the Security Documents.
(h) Financial Condition. (i) The consolidated balance sheet of
the Company and its Subsidiaries as of October 3, 1993, together with
consolidated statements of income, retained earnings, paid-in capital and
surplus and cash flows for the fiscal year then ended, all certified by
-42-
<PAGE>
<PAGE>
KPMG Peat Marwick, and the consolidated balance sheet of the Company and its
Subsidiaries as of April 17, 1994, together with consolidated statements of
income and cash flows for the six months then ended, all certified by the
chief financial officer of the Company, heretofore delivered to the Agent,
fairly present the consolidated financial condition of the Company and its
Subsidiaries and the results of their operations and transactions in their
surplus accounts as of the dates and for the periods referred to and have
been prepared in accordance with GAAP consistently applied throughout the
periods involved (subject to normal year-end adjustments in the case of the
April 17, 1994 financial statements). There are no material liabilities,
direct or indirect, fixed or contingent, of the Company or any of its
Subsidiaries as of the dates of such balance sheets which are not reflected
therein or in the notes thereto. All projections contained in the "Foodmaker
Preliminary Management Plan," dated June 24, 1994, heretofore delivered to
the Agent by the Company have been prepared by the Company in good faith and,
as of the date hereof, there is no reason to believe that the estimates and
assumptions used to prepare such projections are not reasonable.
(ii) Excluding the sale of Chi'Chi's, Inc. on January 27, 1994, the
financing lease arrangements described in Note 3 to the Company's January 23,
1994 unaudited consolidated financial statements and a $3.5 million charge
against earnings taken during the Company's second fiscal quarter in
connection with closing seven restaurants, there has been no material adverse
change in the business, properties, condition (financial or otherwise) or
operations, present or prospective, of the Company or any of its Subsidiaries
since the date of the balance sheet dated October 3, 1993 delivered to the
Agent.
(iii) Since April 17, 1994, there has not occurred any fact, event
or condition which could reasonably be expected to have a Material Adverse
Effect.
(i) Taxes. As of the date hereof, the Company and each of its
Subsidiaries has filed or caused to be filed all tax returns which are
required to be filed and has paid all taxes required to be shown to be due
and payable on said returns or on any assessment made against it or any of
its property and all other taxes, assessments, fees, liabilities, penalties
or other charges imposed on it or any of its property by any Governmental
Authority, except for any taxes, assessments, fees, liabilities, penalties or
other charges which are being contested in good faith and for which adequate
reserves (in accordance with GAAP) have
-43-
<PAGE>
<PAGE>
been established and except for such taxes, assessments, fees, liabilities
and other charges which are not material in amount.
(j) Use of Proceeds. The proceeds of the Loans, the Swing Line
Advances and the Syndicated Letters of Credit will be used by the Company for
the purposes described in the first recital hereto.
(k) Margin Regulations. No part of the proceeds of any Loan will
be used to purchase or carry, or to reduce or retire or refinance any credit
incurred to purchase or carry, or extend credit to others for the purpose of
purchasing or carrying, any "margin stock" as defined in Regulation G or
Regulation U of the Board of Governors of the Federal Reserve System. The
making of the Loans hereunder, the use of the proceeds thereof as
contemplated hereby and the security arrangements contemplated by the Credit
Documents will not violate or be inconsistent with any of the provisions of
Regulation U, G, T or X of the Board of Governors of the Federal Reserve
System.
(l) Accuracy of Information. All written information relating to
the Company or any of its Subsidiaries heretofore delivered to the Agent in
connection with the Credit Documents by or on behalf of the Company is true
and correct in all material respects as of the date given.
(m) Title to Properties; Possession Under Leases. The Company and
its Subsidiaries each have good and marketable title to, or valid leasehold
interests in, all of their respective material properties and assets except
for minor defects in title that do not interfere with the ability of the
Company or any such Subsidiaries to conduct its business as now conducted.
All such assets and properties are free and clear of all Liens, except
Permitted Encumbrances.
(n) Conduct of Business. At the date hereof, the Company and its
Subsidiaries have valid fee or leasehold interests in all real property where
they maintain offices or operate their businesses and hold all
authorizations, consents, approvals, registrations, franchises, licenses and
permits, with or from Governmental Authorities and other Persons as are
required or necessary for them to own their properties and conduct their
business as now conducted, except where the failure to hold any such
authorization, consent, approval, registration, franchise, license or permit
is not, in any one case or in the aggregate,
-44-
<PAGE>
<PAGE>
reasonably expected to have a material impact on the Company or materially
impair the value of the Collateral.
(o) Compliance with Laws and Charter Documents. As of the date
hereof, neither the Company nor any Subsidiary thereof is in violation of
(i) any law, statute, rule, regulation or order of any Governmental Authority
(including Environmental Laws) applicable to it or its properties or assets,
except, in each case, where any such violation could not be material to the
operations, properties or assets or (ii) its certificate of incorporation or
any similar document.
(p) ERISA. (i) Neither the Company nor any of its Subsidiaries
has engaged in a transaction with respect to any Plan which, assuming the
taxable period of such transaction expired as of the date hereof, could
subject the Company or any of its Subsidiaries to a tax or penalty imposed by
either Section 4975 of the Code or Section 502(i) of ERISA in an amount that
could reasonably be expected to have a Material Adverse Effect.
(ii) No Plan which is a single employee plan had an accumulated
funding deficiency, whether or not waived, as of the last day of the most
recent fiscal year of such Plan ended prior to the date hereof. Neither the
Company nor any of its Subsidiaries is (A) required to give security to any
Plan which is a single employer plan pursuant to Section 401(a)(29) of the
Code or Section 307 of ERISA, or (B) subject to a lien in favor of such a
Plan under Section 302(f) of ERISA.
(iii) No liability under Sections 4062, 4063, 4064 or 4069 of ERISA
has been or is reasonably expected by the Company to be incurred by the
Company or any of its Subsidiaries with respect to any Plan which is a single
employer plan in an amount that could reasonably be expected to have a
Material Adverse Effect. Neither the Company nor any of its Subsidiaries has
incurred or expects to incur any withdrawal liability with respect to any
Plan which is a multiemployer plan in an amount which could reasonably be
expected to have a Material Adverse Effect.
(iv) Under each Plan which is a single employer plan, as of the
last day of the most recent plan year ended prior to the date hereof, the
actuarially determined present value of all benefit liabilities (as
determined on the basis of the actuarial assumptions contained in the Plan's
most recent actuarial valuation) did not exceed the fair market value of the
assets of such Plan by more than $5,000,000, and there has been no material
adverse change in the
-45-
<PAGE>
<PAGE>
financial condition of the Plan since the last day of the most recent plan
year.
(v) Insofar as the representations and warranties of the Company
and its Subsidiaries contained in clauses (i) and (ii) above relate to any
Plan which is a multiemployer plan, such representations and warranties are
made to the best knowledge of the Company and its Subsidiaries. As used in
this Section, Section 8.01(k) or Section 9.01(i), (A) "accumulated funding
deficiency" shall have the meaning assigned to such term in Section 412 of
the Code and Section 302 of ERISA; (B) "multiemployer plan" and "plan year"
shall have the respective meanings assigned to such terms in Section 3 of
ERISA; (C) "affected party" and "single employer plan" shall have the
respective meanings assigned to such terms in Section 4001 of ERISA;
(D) "taxable period" shall have the meaning assigned to such term in Section
4975 of the Code; and (E) "withdrawal liability" shall have the meaning
assigned to such term in Part 1 of Subtitle E of Title IV of ERISA.
(q) Not an Investment Company. Neither the Company nor any of its
Subsidiaries is or, after giving effect to the transactions contemplated
hereby will be, (i) an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of
1940, as amended or (ii) subject to regulation under the Public Utility
Holding Company Act of 1935, the Federal Power Act or any foreign, federal,
state or local statute or regulation limiting its ability to incur
indebtedness for money borrowed as contemplated hereby.
(r) The Security Documents. The provisions of the Security
Documents will be effective to create in favor of the Banks a valid, binding
and enforceable security interest in all right, title and interest of the
Company in the Collateral described therein, and upon making all appropriate
filings and notifications will constitute a fully perfected first and prior
security interest, lien or mortgage, in all right, title and interest of the
Company in such Collateral which may be perfected by the making of
appropriate filings or notifications, superior in right to any Liens, except
for Permitted Encumbrances, existing or future (except, with respect to
future liens, as otherwise provided in the applicable Uniform Commercial
Code), which the Company or any third Person may have against such Collateral
or interests therein.
(s) Environmental Protection. To the Company's knowledge, except
as set forth on Schedule 6.01(s) or as could not reasonably be expected to
materially impact the
-46-
<PAGE>
<PAGE>
Company and its Subsidiaries taken as a whole or materially impair the value
of the Collateral: (i) all real property owned or leased by the Company or
any of the Company's Subsidiaries is free of contamination from any Hazardous
Substance; (ii) neither the Company nor any of the Company's Subsidiaries has
caused or suffered to occur any release of any Hazardous Substance into the
environment or any other conditions that could result in the incurrence of
liabilities or any violations of any Environmental Laws; (iii) neither the
Company nor any of the Company's Subsidiaries has caused or suffered to occur
any condition on any of the Company's or such Subsidiary's property that
could give rise to the imposition of any lien under the Environmental Laws;
(iv) neither Company nor any of the Company's Subsidiaries is engaged in any
manufacturing or any other operations, other than the use of petroleum
products for vehicles, that require the use, handling, transportation,
storage or disposal of any Hazardous Substance, where such operations require
permits or are otherwise regulated pursuant to the Environmental Laws.
(t) Solvency. On the date of each Loan and Swing Line Advance
hereunder, and after the payment of all estimated legal, accounting and other
fees related hereto, the Company and each of its Subsidiaries will be
Solvent.
(u) Insurance. As of the date hereof, all of the properties and
operations of the Company and its Subsidiaries of a character usually insured
by companies of established reputation engaged in the same or a similar
business similarly situated are adequately insured, by financially sound and
reputable insurers, against loss or damage of the kinds and in amounts
customarily insured against by such Persons, and the Company and its
Subsidiaries carry, with such insurers in customary amounts, such other
insurance, including larceny, embezzlement or other criminal misappropriation
insurance and business interruption insurance, as is usually carried by
companies of established reputation engaged in the same or a similar business
similarly situated.
(v) Intellectual Property. The Company and each of its Subsidiary
owns, or is licensed to use, all trademarks, trade names, patents and
copyrights (the "Intellectual Property") necessary for the conduct of its
business as currently conducted, including, without limitation, the
Intellectual Property listed on Schedule 6.01(v) hereto except where the
failure to own or license any such Intellectual Property could not have a
Material Adverse Effect. To the knowledge of the Company, no claim which
could reasonably be expected to have a Material
-47-
<PAGE>
<PAGE>
Adverse Effect has been asserted or is pending by any Person challenging or
questioning the use by the Company or any Subsidiary of any such Intellectual
Property or the validity or effectiveness of any such Intellectual Property,
nor does the Company know of any valid basis for any such claim. To the
knowledge of the Company, the use of such Intellectual Property by the
Company and its Subsidiaries does not infringe on the rights of any Person,
except for such claims and infringements that, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect, nor, to the
knowledge of the Company, are there any uses by other Persons of such
Intellectual Property which infringe on the rights of the Company and its
Subsidiaries, except for such infringements that, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
(w) Labor Matters. To the knowledge of the Company, there are no
strikes, lockouts or work stoppages or slowdowns, jurisdictional disputes,
organizing activity or labor disputes occurring or threatened with respect to
the business operations of the Company or its Subsidiaries which could
reasonably be expected to have a Material Adverse Effect.
ARTICLE VII
CONDITIONS OF LENDING
Section 7.01. Conditions to the Initial Loan. The obligations of
the Banks, the Issuing Bank or the Swing Line Bank, as the case may be, in
connection with the first to occur of (i) the Initial Loan, (ii) the making
of the first Swing Line Advance or (iii) the issuance of the first Syndicated
Letter of Credit are subject to the conditions precedent that, on the date of
such Initial Loan, such Swing Line Advance or issuance of such Syndicated
Letter of Credit and after giving effect thereto, each of the following
conditions precedent shall have been satisfied or waived in writing by each
Bank:
(a) Credit Agreement. The Agent shall have received this
Agreement duly executed and delivered by each of the Banks and the Company.
(b) Security Documents. The Agent shall have received duly
executed copies of (i) the Security Agreement and (ii) the mortgages and
deeds of trust with respect to each of the properties of the Company and its
Subsidiaries set forth on Schedule 7.01(b)-1 hereof, granting to Credit
Lyonnais New York Branch, as Collateral Agent, for the
-48-
<PAGE>
<PAGE>
benefit of the Agent, the Issuing Bank, the Swing Line Bank and each of the
Banks, a security interest in the Collateral described therein together with
(A) copies of Financing Statements (Form UCC-1) to be filed under the Uniform
Commercial Code, and other financing and assignment documents as provided in
the Security Agreement and (B) evidence satisfactory to the Agent and the
Banks with respect to the priority of the Collateral Agent's security
interest in the Collateral (which may include certified copies of Requests
for Information or equivalent reports, listing all financing statements which
name the Company as debtor and which are filed in all relevant jurisdictions
as provided in the Security Agreement).
(c) Evidence of Corporate Action. The Agent shall have received
certified copies of all corporate action taken by the Company to authorize
this Agreement and each of the other Credit Documents.
(d) Fees and Expenses. The Agent, the Collateral Agent and each
Bank, as the case may be, shall have received all fees and expenses which are
due and payable as of the date hereof.
(e) Operating Budget. The Agent shall have received from the
Company a copy of its operating budget for the current fiscal year.
(f) Opinions of Counsel. (i) The Agent shall have received a
favorable written opinion of Gibson, Dunn & Crutcher, counsel for the
Company, addressed to the Agent, the Collateral Agent and the Banks and dated
the date of the first to occur of (A) the Initial Loan, (B) the making of the
first Swing Line Advance or (C) the issuance of the first Syndicated Letter
of Credit in substantially the form of Exhibit H.
(g) Note Redemption. The Agent shall have received irrevocable
notice of the redemption of the Company's 12.75% Senior Notes. The Agent
also shall have received evidence satisfactory to the Agent that the
Company's 13.5% secured note to Prudential has been redeemed.
(h) Financial Statements. The Agent shall have received the
financial statements referenced in Section 6.01(h), and such financial
statements shall not be materially less favorable, as determined by the
Agent, than the financial information previously provided to the Agent.
-49-
<PAGE>
<PAGE>
(i) Insurance. The Company shall have delivered to the Agent,
consistent with the requirements of Section 8.01(c), evidence satisfactory to
it that the Collateral is adequately insured.
(j) Accountant's Review Report. The Agent shall have received a
copy of a review report prepared by KPMG Peat Marwick, with respect to the
financial information of the Company relating to the six months ended April
17, 1994, in substantially the form of Exhibit I.
(k) No Material Adverse Change. In the reasonable judgment of the
Agent there shall have occurred no material adverse change in the condition
(financial or otherwise), business, results of operations, performance,
properties or prospects of the Company or any Subsidiary, individually or
taken as a whole, since April 17, 1994.
(l) Solvency Opinion. The Agent shall have received (with a copy
for each Bank) a certificate of the chief financial officer of the Company
regarding the solvency of the Company. Such certificate shall be in the form
of Exhibit J hereto.
(m) Litigation. There shall not be pending or threatened any
action or proceeding before any court or administrative agency which could
reasonably be expected to materially impair the ability of the Company to
perform its obligations hereunder or under the Credit Documents.
(n) Authorizations. All authorizations, consents, approvals,
registrations, notices, exemptions and licenses with or from Governmental
Authorities and other Persons which are required to be obtained on or prior
to the date of the Initial Loan, the first Swing Line Advance or the issuance
of the first Syndicated Letter of Credit for the transactions contemplated by
this Agreement and the other Credit Documents, the grant of the security
interests in and liens on the Collateral, the execution and delivery of the
Credit Documents, the performance by the Company of its obligations hereunder
and thereunder, other than those that may be necessary in connection with the
perfection or protection of liens granted pursuant to the Security Documents,
shall have been effected or obtained (without the imposition of any
conditions that are not reasonably acceptable to the Agent) and shall remain
in full force and effect, with only such exceptions as could not reasonably
be expected to have a Material Adverse Effect; all applicable waiting periods
with respect to any such authorizations, consents, approvals, registrations,
notices, exemptions and licenses shall have expired without the taking by any
-50-
<PAGE>
<PAGE>
Governmental Authority of any action, and no law, statute, rule, regulation,
order or other action of any Governmental Authority shall be applicable, that
restrains, prevents or imposes any conditions on the transactions
contemplated hereby.
(o) Title Policies and Surveys. The Agent shall have received a
schedule of existing title policies and surveys.
(p) Other Documents. The Agent shall have received such other
certificates and documents as the Agent and the Banks reasonably may require.
Section 7.02. Conditions to All Loans. (i) The obligations of
each Bank in connection with each Loan (including the Initial Loan), (ii) the
obligations of the Swing Line Bank in connection with each Swing Line
Advance, and (iii) the obligations of the Issuing Bank in connection with
each Syndicated Letter of Credit are subject to the conditions precedent
that, on the date of each such Loan, Swing Line Advance and issuance of a
Syndicated Letter of Credit and after giving effect thereto, each of the
following conditions precedent shall have been satisfied or waived in writing
by each Bank:
(a) Execution of Notes. The Agent on behalf of the Banks shall
have received the relevant Notes for such Loan, duly executed and delivered
by the Company.
(b) Requests. For each Loan, the Agent shall have received a Loan
Request, for each Swing Line Advance, the Agent and the Swing Line Bank shall
have received a Swing Line Advance Request and for each Syndicated Letter of
Credit, the Agent and the Issuing Bank shall have received a Letter of Credit
Notice, in the form and manner set forth herein for such requests.
(c) Use of Proceeds. The Agent shall have received from the
Company a certificate signed by an authorized officer of the Company
certifying that the proceeds of such Loan, Swing Line Advance or Syndicated
Letter of Credit will be used in accordance with the provisions of Section
6.01(j).
(d) No Default. No Default or Event of Default shall have
occurred and be continuing.
(e) Representations and Warranties; Covenants. The
representations and warranties contained in Article VI shall have been true
when made and shall be true and correct
-51-
<PAGE>
<PAGE>
in all material respects with the same effect as though such representations
and warranties had been made at the time of such Loan, Syndicated Letter of
Credit or Swing Line Advance.
(f) Other Documents. The Agent shall have received such other
certificates and documents as the Agent and the Banks reasonably may require.
Section 7.03. Satisfactions of Conditions Precedent. Delivery by
the Company of a Loan Request, Swing Line Advance Request or Letter of Credit
Notice, as the case may be, pursuant to Section 7.02(b) shall be deemed to
constitute a certification of the Company that each of the foregoing
conditions precedent in this Article VII has been satisfied or waived in
writing by each Bank.
ARTICLE VIII
COVENANTS
Section 8.01. Affirmative Covenants. Except when an alternative
time period is specifically noted, until the Termination Date, and thereafter
until payment in full of the Notes, Swing Line Advances and Reimbursement
Obligations, expiration or cancellation of all outstanding Syndicated Letters
of Credit and performance of all other obligations of the Company hereunder,
the Company will:
(a) Financial Statements; Compliance Certificates. Furnish to the
Agent a copy for the Agent and a copy for each Bank,
(i) until the Consolidated EBITDA for the immediately proceeding
twelve month period exceeds $100,000,000, within 28 days after the end
of each monthly reporting period, Monthly Statements.
(ii) as soon as available, but in no event more than 45 days
following the end of each of the first three fiscal quarters of each
fiscal year, all quarterly consolidated and divisional balance sheets,
income statements and statements of cash flow and reports of the Company
and its Subsidiaries, prepared in a format and in scope consistent with
the April 27, 1994 financial statements and reports of the Borrower
referenced in Section 6.01(h);
(iii) as soon as available, but in no event more than 90 days
following the end of each fiscal year,
-52-
<PAGE>
<PAGE>
unaudited annual divisional financial reports of the Company and its
Subsidiaries and the annual consolidated audit report and consolidated
financial statements relating to the Company and the Subsidiaries,
certified by an independent certified public accountant reasonably
satisfactory to the Agent, prepared in a format and in scope consistent
with the October 3, 1993 financial statements and reports of the Company
referenced in Section 6.01(h);
(iv) as soon as available, but in no event later than 60 days
following the end of each fiscal year, the business plan, budget and
forecast of the Company and its Subsidiaries, on a consolidated basis
and for each operating division for the then-current fiscal year,
prepared in a manner, form and detail satisfactory to the Agent (it
being agreed that the budget shall include projected income statements
and cash flow statements for each four-week period and a projected year
end balance sheet);
(v) together with each of the financial statements delivered
pursuant to clauses (ii) and (iii) of this Section 8.01(a), a
certificate of the Chief Financial Officer of the Company stating
whether to such officer's knowledge as of the last date of such finan-
cial statements any event or circumstance exists which constitutes a
Default or Event of Default and, if so, stating the facts with respect
thereto, and whether to such officer's knowledge the Company (and where
applicable, each of the Subsidiaries) is in compliance with each of the
covenants set forth in Article VIII hereof, together with calculations,
where applicable, which establish the Company's (and where applicable,
each of the Subsidiaries') compliance therewith;
(vi) promptly upon receipt thereof, copies of any reports and
management letters submitted to the Company or any of its Subsidiaries
or their accountants in connection with any annual or interim audit of
the books of the Company or the Subsidiaries, together with the
responses thereto, if any; and
(vii) such additional information, reports or statements as the
Agent and the Banks from time to time may reasonably request.
(b) Taxes. Pay and discharge, and cause each of its Subsidiaries
to pay and discharge, all taxes, assessments and governmental charges upon
it, its income and its properties prior to the date on which penalties are
attached
-53-
<PAGE>
<PAGE>
thereto, unless and to the extent only that (A) (i) such taxes, assessments
and governmental charges shall be contested in good faith and by appropriate
proceedings by the Company or such Subsidiary, as the case may be and
(ii) adequate reserves (in accordance with GAAP) are maintained by the
Company or such Subsidiary, as the case may be, with respect thereto, or
(B) any failure to pay and discharge such taxes, assessments and governmental
charges could not reasonably be expected to have a Material Adverse Effect.
(c) Insurance. Maintain, and cause each of its Subsidiaries to
maintain, insurance with responsible insurance companies against such risks,
on such properties and in such amounts as is customarily maintained by
companies of established reputation engaged in the same or similar busi-
nesses; provide evidence that, to the extent required by the Agent and the
Banks, the Collateral Agent, for its benefit and the benefit of the Banks,
has been named as loss payee by endorsement to the policies for such
insurance; and file and cause each of its Subsidiaries to file with the
Collateral Agent upon its request or the request of any Bank a detailed list
of the insurance companies, the amounts and rates of insurance, the dates of
the expiration thereof and the properties and risks covered thereby.
(d) Corporate Existence. Except as permitted by Section 8.02(d),
maintain, and cause each of its Material Subsidiaries to maintain, its
corporate existence in good standing and qualify and remain qualified to do
business as a foreign corporation in each jurisdiction in which the character
of the properties owned or leased by it therein or in which the transaction
of its business is such that the failure to qualify could reasonably be
expected to have a Material Adverse Effect; provided, however, that no
Material Subsidiary shall be required to maintain any such corporate
existence or qualification, if the Board of Directors of the Company shall
determine that the maintenance thereof is no longer desirable in the conduct
of the businesses of the Company and the Subsidiaries taken as a whole.
(e) Authorizations. Obtain, make and keep in full force and
effect all authorizations from and registrations with Governmental
Authorities that are required for the validity or enforceability of this
Agreement and the other Credit Documents.
(f) Maintenance of Records. For the Company and each of its
Subsidiaries (i) keep proper books of record and account in which full, true
and correct entries will be made of all dealings or transactions of or in
relation to its
-54-
<PAGE>
<PAGE>
business and affairs; and (ii) set up on its books reserves with respect to
all taxes, assessments, charges, levies and claims. All determinations pur-
suant to this Section 8.01(f) shall be made in accordance with, or as
required by, GAAP consistently applied in the opinion of such independent
public accountants as shall then be regularly engaged the Company.
(g) Inspection. Permit and cause each of its Subsidiaries to
permit, the Agent and the Banks to have one or more of their officers and
employees, or any other Person designated by the Agent or the Banks, visit
and inspect any of the properties of the Company and its Subsidiaries and to
examine the minute books, books of account and other records of the Company
and its Subsidiaries and make copies thereof or extracts therefrom, and
discuss its affairs, finances and accounts with its officers and, at the
request of the Agent or the Banks, with the Company's independent
accountants, during normal business hours and at such other reasonable times
and as often as the Agent or the Banks reasonably may desire.
(h) Maintenance of Property, Etc. (i) Maintain, keep and preserve
and cause each of its Subsidiaries to maintain, keep and preserve all of its
properties in good repair, working order and condition in all material
respects and from time to time make all necessary and proper repairs,
renewals, replacements, and improvements thereto, and (ii) maintain, preserve
and protect and cause each of its Subsidiaries to maintain, preserve and
protect all franchises, licenses, copyrights, patents and trademarks material
to its business; provided, however, that nothing in this Section 8.01(h)
shall prevent the Company from discontinuing the operation or maintenance of
any of its properties if such discontinuance is desirable in the conduct of
the business of the Company and its Subsidiaries taken as a whole and not
materially disadvantageous to the Banks.
(i) Conduct of Business. (i) Preserve, renew and keep in full
force and effect each of its material contracts except contracts which are no
longer desirable in the conduct of the business of the Company, (ii)
preserve, renew, replace and maintain in full force and effect all material
franchises and licenses necessary or desirable in the normal conduct of its
business as now conducted, and (iii) comply in all material respects with all
rules and regulations of all Governmental Authorities, the loss of or
noncompliance with which could reasonably be expected to materially impair
the operations, finances or prospects of the Company and its Subsidiaries,
taken as a whole.
-55-
<PAGE>
<PAGE>
(j) Notification of Defaults and Adverse Developments. Promptly
notify the Agent upon the discovery by any officer of the Company of the
occurrence of (i) any Default or Event of Default; (ii) any event,
development or circumstance whereby the financial statements most recently
furnished to the Agent fail in any material respect to present fairly, in
accordance with GAAP, the financial condition and operating results of the
Company and its Subsidiaries as of the date of such financial statements;
(iii) any material litigation or proceedings that are instituted or
threatened (to the knowledge of the Company) against the Company or its
Subsidiaries or any of their respective assets; and (iv) any other
development in the business or affairs of the Company or its Subsidiaries if
the effect thereof could reasonably be expected to have a Material Adverse
Effect; in each case describing the nature thereof and the action the Company
proposes to take with respect thereto. Upon receipt of any such notice of
default or adverse development, the Agent shall forthwith give notice to each
Bank of the details thereof.
(k) Notice of ERISA Events. Within 10 Business Days after the
Company or any of its Subsidiaries knows that any of the events described in
the succeeding two sentences have occurred, the Company shall furnish to the
Agent a statement signed by a senior officer of the Company describing such
event in reasonable detail and the action, if any, proposed to be taken with
respect thereto. The events referred to in the preceding sentence are, with
respect to any Plan: (i) any reportable event described in Section 4043 of
ERISA, other than a reportable event for which the 30-day notice requirement
has been waived by the PBGC; (ii) the filing with any affected party of a
notice of intent to terminate a Plan; (iii) the adoption of an amendment to a
Plan if, after giving effect to such amendment, the Plan is a plan described
in Section 4021(b) of ERISA; (iv) receipt of notice of an application by the
PBGC to institute proceedings to terminate a Plan pursuant to Section 4042 of
ERISA; (v) withdrawal from or termination of a Plan during a plan year for
which the Company or any of its Subsidiaries is or could be subject to
liability under Sections 4063 or 4064 of ERISA; and (vi) receipt of notice of
withdrawal liability pursuant to Section 4202 of ERISA. Such events shall
also include the receipt of a claim, notice or inquiry with respect to the
liability or potential liability of the Company or any of its Subsidiaries
under Sections 4062, 4063 or 4064 of ERISA with respect to a single employer
plan other than a Plan.
(l) Environmental Matters. (i) Comply, and cause its Subsidiaries
to comply, in all material respects with
-56-
<PAGE>
<PAGE>
all applicable Environmental Laws, (ii) notify the Agent promptly after
becoming aware of any Adverse Environmental Condition, Environmental Claim or
any other violation of any Environmental Law in connection with the Company's
or any Subsidiaries' properties or facilities which could reasonably be
expected to have a material impact on the Company or materially impair the
value of the Collateral, and (iii) promptly forward to Agent a copy of any
order, notice, permit, application, or any other communication or report
received by the Company or any of its Subsidiaries pursuant to which the
Company or any of its Subsidiaries becomes aware of any actual or potential
Adverse Environmental Condition, Environmental Claim or any other violation
of any Environmental Law which could reasonably be expected to have a
material impact on the Company or materially impair the value of the
Collateral.
(m) Note Redemption. Within six months of the date hereof, the
Agent shall have received evidence satisfactory to the Agent that between
$12,000,000 and $13,000,000 principal amount of the Company's 14.25% Senior
Subordinated Notes due 1998 have been redeemed.
(n) Further Assurances. From time to time at and subsequent to
the date hereof, at the reasonable request of the Agent and without further
consideration, execute and deliver such other instruments of security,
conveyance, assignment and transfer and take such other actions as the Agent
may reasonably request in order more effectively to grant, convey, assign,
and transfer to the Agent and the Banks or their designees the security
interest in the Collateral.
Section 8.02. Negative Covenants. Until the Termination Date, and
thereafter until payment in full of the Notes, Swing Line Advances and all
Reimbursement Obligations, expiration or cancellation of all outstanding
Syndicated Letters of Credit and performance of all other obligations of the
Company hereunder, the Company will not:
(a) Transactions with Affiliates. Enter into, or permit any of
its Subsidiaries to enter into any transaction or series of related
transactions with any Affiliate, other than transactions in the ordinary
course of business which are on terms and conditions substantially as
favorable to the Company or such Subsidiary as would be obtainable by the
Company or such Subsidiary in an arms-length transaction with a Person other
than an Affiliate except (i) payments for management advisory work not in
excess of $375,000, and (ii) the sale of any of the Common Stock of the
Company to any officers or employees of the Company or any of its
-57-
<PAGE>
<PAGE>
Subsidiaries or the issuance of options to purchase Common Stock of the
Company.
(b) Indebtedness. Create, incur, assume or suffer to exist any
Indebtedness, or permit any Subsidiary so to do, except (i) Specified
Additional Indebtedness, (ii) Indebtedness of the Company and any Subsidiary
secured by mortgages, encumbrances or liens specifically permitted by Section
8.02(c), (iii) contingent liabilities permitted by Section 8.02(f) and
(iv) Indebtedness existing as of the date hereof and specified on
Schedule 8.02(b) hereto.
(c) Mortgages and Pledges. Create, incur, assume or suffer to
exist, or permit any of its Subsidiaries to create, incur, assume or suffer
to exist, any Lien of any kind upon or in any of its property or assets,
whether now owned or hereafter acquired, except Permitted Encumbrances.
(d) Merger, Acquisition or Sales of Assets. Enter into any merger
or consolidation or acquire assets of any Person, or sell, lease, or
otherwise dispose of any of its assets, except pursuant to an Excluded Asset
Sale, or permit any Subsidiary so to do, except that a Wholly owned
Subsidiary may be merged or consolidated with one or more other Wholly owned
Subsidiaries or into the Company.
(e) Business. Engage, or permit any Subsidiary to engage, in any
business other than its principal business of owning, operating and
franchising restaurants, licensing intellectual property or any business
incidental thereto.
(f) Contingent Liabilities. Assume, guarantee, endorse,
contingently agree to purchase or otherwise become liable upon the obligation
of any other Person, or permit any Subsidiary so to do, except:
(i) in connection with a merger permitted by Section 8.02(d),
(ii) by the endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business,
(iii) Interest Rate Protection Agreements in respect of other
permitted Indebtedness, which are subordinate to the rights of the Banks
hereunder in a manner that is acceptable to the Agent, and
(iv) Guarantees by the Company of contractual obligations (other
than for the payment of Indebtedness) of any Wholly owned Subsidiary.
-58-
<PAGE>
<PAGE>
(g) Loans and Investments. Purchase or acquire the obligations or
stock of, or any other interest in, or make loans, advances or capital
contributions to, or form any joint ventures or partnerships with, any
Person, or permit any Subsidiary so to do, except (i) direct obligations of,
or obligations the principal of and interest on which are unconditionally
guaranteed by, the United States of America with a maturity not exceeding one
year, (ii) certificates of deposit, time deposits, banker's acceptances or
other instruments of a bank having a combined capital and surplus of not less
than $500,000,000 with a maturity not exceeding one year, and
(iii) commercial paper rated at least A-1 or P-1 maturing within one year
after the date of acquisition thereof; and (iv) money market accounts
maintained at a bank having combined capital and surplus of not less than
$500,000,000 or at another financial institution satisfactory to the Agent.
Notwithstanding the foregoing, the Company may:
(A) Make loans and advances to officers and employees of the
Company or any of its Subsidiaries in the ordinary course of
business in an aggregate amount at any one time outstanding not to
exceed $2,000,000.
(B) Make advances in connection with purchases in the ordinary
course of business, required deposits in connection with leases and
otherwise in the ordinary course of business and Consolidated
Capital Expenditures permitted hereunder.
(C) Make investments in joint ventures in an aggregate amount at
any one time outstanding not to exceed $4,000,000.
(D) Make loans and advances to Jack In The Box franchisees in an
aggregate amount at any one time outstanding not to exceed
$3,000,000.
(E) Generate accounts receivable in the ordinary course of
business.
(h) Corporate Organization. (i) Create any Subsidiaries not in
existence as of the date hereof; (ii) amend its certificate of incorporation
in any material respect without the written consent of the Agent; or
(iii) change its corporate structure.
(i) Dividends and Purchase of Stock. Declare any dividends (other
than dividends payable in capital stock of the Company) on any shares of any
class of its capital
-59-
<PAGE>
<PAGE>
stock, or apply any of its property or assets to the purchase, redemption or
other retirement of, or set apart any sum for the payment of any dividends
on, or for the purchase, redemption or other retirement of, or make any other
distribution by reduction of capital or otherwise in respect of, any shares
of any class of capital stock of the Company, or permit any Subsidiary which
is not a Wholly owned Subsidiary so to do, or permit any Subsidiary to
purchase or acquire any shares of any class of capital stock of the Company.
(j) Stock of Subsidiaries. Issue, sell or otherwise dispose of
any shares of capital stock of any Subsidiary (except in connection with a
merger or consolidation of a Wholly owned Subsidiary permitted by Section
8.02(d) or with the dissolution of any Subsidiary) or permit any Subsidiary
to issue any additional shares of its capital stock except pro rata to its
stockholders.
(k) Family Restaurants, Inc. Warrants. Exercise the warrants for
the capital stock of Family Restaurants, Inc.
(l) Terms of Indebtedness. Amend or modify, or permit to be
amended or modified the terms of any Company or Subsidiary Indebtedness for
borrowed money exceeding $5,000,000 or any documents relating thereto in a
manner which would (i) increase the principal amount of such Indebtedness,
(ii) increase the interest borne by such Indebtedness, (iii) shorten the
maturity of such Indebtedness or (iv) elevate, in relation to the Loans,
Swing Line Advances and Syndicated Letters of Credit, the ranking in terms of
payment of such Indebtedness, without prior written consent from the Agent.
(m) Prepayment of Debt. Excluding the partial redemption of the
Company's 14.25% Senior Subordinated Notes due 1998 contemplated in
Section 8.01(m), prepay, redeem, defease (whether actually or in substance)
or purchase in any manner (or deposit or set aside funds or securities for
the purpose of the foregoing) any of the Company's (i) 9.25% Senior Notes due
1999, (ii) 9.75% Senior Subordinated Notes due 2002 or (iii) 14.25% Senior
Notes due 1998, or cause or permit any Subsidiary to do any of the foregoing.
Section 8.03. Financial Covenants. Until the Termination Date,
and thereafter until payment in full of the Notes and all Reimbursement
Obligations, expiration or cancellation of all outstanding Syndicated Letters
of Credit and performance of all other obligations of the Company hereunder,
the Company will
-60-
<PAGE>
<PAGE>
(a) Minimum Consolidated EBITDA. Maintain Consolidated EBITDA of
not less than the amounts specified for each of the following periods:
For the Fiscal
Quarter Ending Amount (in
millions)
--------------------- -----------------
01/95 $15.0
For the Two Fiscal
Quarters Ending Amount (in
millions)
--------------------- -----------------
04/95 $33.0
For the Three Fiscal Amount (in
Quarters Ending millions)
--------------------- -----------------
07/95 $55.0
For the Four Fiscal Amount (in
Quarters Ending millions)
--------------------- -----------------
10/95 $79.0
01/96 85.0
04/96 92.0
07/96 98.0
09/96 105.0
01/97 111.0
04/97 117.0
07/94 125.0
and thereafter
(b) Capital Expenditures. Not make or permit its Subsidiaries to
make, during the four quarter period ending at the date specified, aggregate
Consolidated Capital Expenditures other than Consolidated Capital
Expenditures made from the proceeds of sale-leaseback transactions, in an
amount in excess of (i) the amount specified for such period plus (ii) the
lesser of (A) $10,000,000 and (B) the excess, in the immediately preceding
period, of (I) the amount set forth for such period, over (II) actual Capital
Investments, other than those made from the proceeds of sale-leaseback
transactions:
For the Fiscal 12 Month Amount (in
Period Ending millions)
--------------------- -----------------
10/95 $42.0
-61-
<PAGE>
<PAGE>
For the Fiscal 12 Month Amount (in
Period Ending millions)
--------------------- -----------------
09/96 $58.0
09/97 $62.0
and thereafter
(c) Minimum Interest Coverage Ratio. Maintain a ratio of
Consolidated EBITDA to Consolidated Interest Expense of not less than the
ratio specified for each of the following periods:
For the Fiscal
Quarter Ending Ratio
--------------------- -----------------
01/95 1.40:1
For the Two Fiscal
Quarters Ending Ratio
--------------------- -----------------
04/95 1.50:1
For the Three Fiscal
Quarters Ending Ratio
--------------------- -----------------
07/95 1.70:1
For the Four Fiscal
Quarters Ending Ratio
--------------------- -----------------
10/95 1.80:1
01/96 1.90:1
04/96 2.10:1
07/96 2.20:1
09/96 2.30:1
01/97 2.50:1
04/97 2.60:1
07/97 2.80:1
and thereafter
-62-
<PAGE>
<PAGE>
(d) Fixed Charge Coverage Ratio. Maintain a ratio of Consolidated
EBITDA to Consolidated Fixed Charges of not less than the ratio specified for
each of the following periods:
For the Fiscal
Quarter Ending Ratio
--------------------- -----------------
01/95 0.70:1
For the Two Fiscal
Quarters Ending Ratio
--------------------- -----------------
04/95 0.70:1
For the Three Fiscal
Quarters Ending Ratio
--------------------- -----------------
07/95 0.80:1
For the Four Fiscal
Quarters Ending Ratio
--------------------- -----------------
10/95 0.80:1
For the Four Fiscal
Quarters Ending Ratio
--------------------- -----------------
10/95 0.80:1
01/96 0.90:1
04/96 0.90:1
07/96 0.90:1
09/96 0.90:1
01/97 1.00:1
04/97 1.10:1
07/97 1.10:1
and thereafter
-63-
<PAGE>
<PAGE>
(e) Minimum Net Worth. Have at the end of each of the following
periods Consolidated Net Worth of not less than the amount specified for such
period:
For the Fiscal
Quarter Ending Amount (in millions)
--------------------- -------------------
01/95 $115.0
04/95 $115.0
07/95 $118.0
10/95 $120.0
01/96 $123.0
04/96 $125.0
07/96 $128.0
09/96 $130.0
01/97 $136.0
04/97 $141.0
07/97 $146.0
and thereafter
(f) Maximum Leverage. Maintain a ratio of Consolidated Covenant
Indebtedness at the date specified to Consolidated EDITDA for the four
quarters ending at the date specified not in excess of the ratio set forth
below for the applicable period:
For the Period Ending Ratio
---------------------- -------------
10/95 5.70:1
01/96 5.30:1
04/96 4.90:1
07/96 4.60:1
09/96 4.30:1
01/97 4.10:1
04/97 3.80:1
07/97 3.60:1
and thereafter
ARTICLE IX
EVENTS OF DEFAULT
Section 9.01. Events of Default. If one or more of the following
events (each, an "Event of Default") shall occur:
-64-
<PAGE>
<PAGE>
(a) Default shall be made in the payment of any installment of
principal of any Note, Swing Line Advance or Reimbursement Obligation
when due and payable, whether at maturity, upon mandatory prepayment or
otherwise; default shall be made in the payment of any installment of
interest upon any Note or upon any Swing Line Advance, when due and
payable, and, such default shall have continued for three days; or
(b) Default shall be made in the payment of the Commitment Fee or
any other fee or amount payable hereunder when due and payable and such
Default shall have continued for three days; or
(c) Default shall be made in the due observance or performance of
any other term, covenant or agreement contained in this Agreement or any
other Credit Document, and such default shall have continued unremedied
for a period of 30 days after any officer of the Company becomes aware,
or should have become aware, of such default; or
(d) Any representation or warranty made or deemed made by the
Company or any of its Subsidiaries herein or in any Credit Document or
any statement or representation made in any certificate, report or
opinion delivered by or on behalf of the Company in connection herewith
or in connection with any other Credit Document shall prove to have been
false or misleading in any material respect when made; or
(e) Default in the payment when due of any principal of, interest
on or fees incurred in connection with, any Indebtedness of the Company
or its Subsidiaries in excess of $5,000,000, or default in the
performance or observance of any other obligation or condition with
respect to any such Indebtedness, or the occurrence of any other event,
if the effect of such default or event is to accelerate, or permit the
acceleration of, the maturity of such Indebtedness;
(f) An involuntary case or other proceeding shall be commenced
against the Company or any material Subsidiary seeking liquidation,
reorganization or other relief with respect to it or its debts under any
applicable Federal or State bankruptcy, insolvency, reorganization or
similar law now or hereafter in effect or seeking the appointment of a
custodian, receiver, liquidator, assignee, trustee, sequestrator or
similar official of it or any substantial part of its property, and such
involuntary case or other
-65-
<PAGE>
<PAGE>
proceeding shall remain undismissed and unstayed, or an order or decree
approving or ordering any of the foregoing shall be entered and
continued unstayed and in effect, in any such event, for a period of 60
days; or
(g) The commencement by the Company or any material Subsidiaries
of a voluntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or of any
other case or proceeding to be adjudicated a bankrupt or insolvent or
the consent by any of them to the entry of a decree or order for relief
in respect of the Company or any of its Subsidiaries in an involuntary
case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or to the commencement
of any bankruptcy or insolvency case or proceeding against any of them,
or the filing by any of them of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or State law, or
the consent by any of them to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or similar official of the
Company or any of its Subsidiaries or any substantial part of their
respective property, or the making by any of them of an assignment for
the benefit of creditors, or the admission by any of them in writing of
inability to pay their debts generally as they become due, or the taking
of corporate action by the Company or any of its Subsidiaries in
furtherance of any such action; or
(h) One or more judgments against the Company or any of its
Subsidiaries or attachment against its property, which in the aggregate
exceed $5,000,000, or the operation or result of which could be to
interfere materially and adversely with the conduct of the business of
the Company or any of its Subsidiaries, remain unpaid, unstayed on
appeal, undischarged, unbonded, or undismissed for a period of 60 days;
or
(i) With respect to any Plan which is a single employer plan, any
of the following shall occur: (A) the filing with any affected party as
such term is defined in Section 4001 of ERISA of a notice of intent to
terminate the Plan under Section 4041 of ERISA, the adoption of an
amendment to the Plan if, after giving effect thereto, the Plan is a
plan described in Section 4021(b) of ERISA, or receipt of notice of an
application by the PBGC to institute proceedings to
-66-
<PAGE>
<PAGE>
terminate the Plan pursuant to Section 4042 of ERISA; in each case, if
the amount of unfunded benefit liabilities, as such term is defined in
Section 4001(a)(18) of ERISA, of the Plan as of the date such event
occurs is more than $1,000,000, (B) the Company or any of its
Subsidiaries incurs liability under Sections 4062(e), 4063 or 4064 of
ERISA in an amount in excess of $1,000,000, (C) an amendment is adopted
to the Plan which would require security to be given to the Plan
pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA in an
amount in excess of $1,000,000, or (D) the Company fails to make a
payment to the Plan which would give rise to a lien in favor of the Plan
under Section 302(f) of ERISA in an amount in excess of $1,000,000; or
(j) Any Credit Document shall for any reason cease to be, or be
asserted in writing by the Company or any of its Subsidiaries not to be,
in full force and effect and enforceable in accordance with its terms,
or any security interest purported to be created in any Collateral by or
under any Security Document shall, after the making of all appropriate
filings or notifications necessary to perfect valid and perfected first
priority Liens thereunder, cease to be a valid and perfected first
priority Lien in such Collateral, except as expressly contemplated
herein or by such Security Document;
(k) There shall occur a Change of Control;
(l) There shall exist on the date hereof, on the date of any Loan
(including the Initial Loan), on the date of any Swing Line Advance or
on the date of issuance of any Syndicated Letter of Credit, any
Environmental Claim Adverse Environmental Condition or any other
violation of any Environmental Law, which, if it had been known, could
reasonably have been expected to have a Material Adverse Effect; or
(m) At September 30, 1994, the Company shall not have retired the
Company's 13.5% secured note to Prudential.
then (i) upon the happening and during the continuation of any of the
foregoing Events of Default, the obligation of the Banks to make any further
Loans, the obligation of the Swing Line Bank and the other Banks to make any
further Swing Line Advances and of the Issuing Bank to issue any further
Syndicated Letters of Credit shall terminate upon declaration to that effect
delivered by the Agent or the
-67-
<PAGE>
<PAGE>
Required Banks to the Company and (ii) upon the happening of any of the
foregoing Events of Default which shall be continuing, all Notes, Swing Line
Advances and all Reimbursement Obligations shall become and be immediately
due and payable upon declaration to that effect delivered by the Agent or the
Required Banks to the Company; provided, that upon the happening of any event
specified in Section 9.01(f) or (g), the Notes, Swing Line Advances and the
Reimbursement Obligations shall become immediately due and payable and the
obligation of the Banks to make any further Loans, the obligation of the
Swing Line Bank and the other Banks to make any further Swing Line Advances
and of the Issuing Bank to issue any further Syndicated Letters of Credit
hereunder shall terminate without declaration or other notice to the Company.
The Company expressly waives any presentment, demand, protest or other notice
of any kind.
ARTICLE X
THE AGENT AND THE BANKS
Section 10.01. The Agency. Each Bank appoints Credit Lyonnais New
York Branch as its Agent and as its Collateral Agent under the Security
Agreement and irrevocably authorizes the Agent, which for purposes of this
Article X shall refer to the Agent and/or Collateral Agent, as appropriate,
to take such action on its behalf and to exercise such powers hereunder and
thereunder as are specifically delegated to the Agent by the terms hereof and
thereof, together with such powers as are reasonably incidental hereto and
thereto, including the execution and delivery by the Agent on behalf of such
Bank of the Security Agreement and any documents related thereto and the
exercise by the Agent of powers delegated to the Agent and the Banks thereby,
and the Agent hereby accepts such appointment subject to the terms hereof.
The relationship between the Agent and the Banks shall be that of agent and
principal only and nothing herein or therein shall be construed to constitute
the Agent a trustee for any Bank nor to impose on the Agent duties or
obligations other than those expressly provided for herein.
Section 10.02. The Agent's Duties. The Agent shall promptly
forward to each Bank copies, or notify each Bank as to the contents, of all
notices and other communications received from the Company pursuant to the
terms of this Agreement and the other Credit Documents and, in the event that
the Company fails to pay when due the principal of or interest on any Loan,
Swing Line Advance or
-68-
<PAGE>
<PAGE>
any Reimbursement Obligation, the Agent shall promptly give notice thereof to
the Banks. As to any other matter not expressly provided for herein or
therein, the Agent shall have no duty to act or refrain from acting with
respect to the Company, except upon the instructions of the Required Banks.
The Agent shall not be bound by any waiver, amendment, supplement, or modifi-
cation of this Agreement or the other Credit Documents which affects its
duties hereunder and thereunder, unless it shall have given its prior written
consent thereto. The Agent shall have no duty to ascertain or inquire as to
the performance or observance of any of the terms, conditions, covenants or
agreements binding on the Company pursuant to this Agreement or any other
Credit Document nor shall it be deemed to have knowledge of the occurrence of
any Default or Event of Default (other than a failure of the Company to pay
when due the principal or interest on any Loan), unless it shall have
received written notice from the Company or a Bank specifying such Default or
Event of Default and stating that such notice is a "Notice of Default".
Section 10.03. Sharing of Payment and Expenses. All funds for the
account of the Banks received by the Agent in respect of payments made by the
Company pursuant to, or from any Person on account of, this Agreement or any
other Credit Document shall be distributed forthwith by the Agent among the
Banks, in like currency and funds as received, ratably in proportion to their
respective interests therein. In the event that any Bank shall receive from
the Company or any other source any payment of, on account of, or for or
under this Agreement or any other Credit Document (whether received pursuant
to the exercise of any right of set-off, banker's lien, realization upon any
security held for or appropriated to such obligation or otherwise as
permitted by law) other than in proportion to its Pro Rata Share, then such
Bank shall purchase from each other Bank so much of its interest in
obligations of the Company as shall be necessary in order that each Bank
shall share such payment with each of the other Banks in proportion to each
Bank's Pro Rata Share; provided, that no Bank shall purchase any interest of
any Bank that does not, to the extent that it may lawfully do so, set-off
against the balance of any deposit accounts maintained with it the
obligations due to it under this Agreement; and provided, further, that
nothing herein contained shall obligate any Bank to apply any set-off or
banker's lien or collateral security permitted hereby first to the
obligations of the Company hereunder if the Company is obligated to such Bank
pursuant to other loans or notes, but any such application of proceeds shall
be in proportion to the total obligations of the Company to such Bank. In
the event that any purchasing Bank shall be required
-69-
<PAGE>
<PAGE>
to return any excess payment received by it, the purchase shall be rescinded
and the purchase price restored to the extent of such return, but without
interest.
Section 10.04. The Agent's Liabilities. Each of the Banks and the
Company agrees that (i) neither the Agent in such capacity nor any of its
officers or employees shall be liable for any action taken or omitted to be
taken by any of them hereunder except for its or their own gross negligence
or wilful misconduct (provided that the Agent is not thereby exonerated from
its contractual obligations under the Credit Documents), (ii) neither the
Agent in such capacity nor any of its officers or employees shall be liable
for any action taken or omitted to be taken by any of them in good faith in
reliance upon the advice of counsel, independent public accountants or other
experts selected by the Agent (provided that the Agent is not thereby
exonerated from its contractual obligations under the Credit Documents), and
(iii) the Agent in such capacity shall be entitled to rely upon any notice,
consent, certificate, statement or other document (including any telegram,
cable, telex, facsimile or telephone transmission) believed by it to be
genuine and correct and to have been signed and/or sent by the proper
Persons.
Section 10.05. The Agent as a Bank. The Agent shall have the same
rights and powers hereunder as any other Bank and may exercise the same as
though it were not the Agent, and the terms "Bank" or "Banks", unless the
context otherwise indicated, include the Agent in its individual capacity.
The Agent may, without any liability to account, maintain deposits or credit
balances for, invest in, lend money to and generally engage in any kind of
banking business with the Company or any Subsidiary or affiliate of the
Company as if it were any other Bank and without any duty to account therefor
to the other Banks.
Section 10.06. Bank Credit Decision. Neither the Agent nor any of
its officers or employees has any responsibility for, gives any guaranty in
respect of, nor makes any representation to the Banks as to, (i) the
condition, financial or otherwise, of the Company or any Subsidiary thereof
or the truth of any representation or warranty given or made herein or in any
other Credit Document, or in connection herewith or therewith or (ii) the
validity, execution, sufficiency, effectiveness, construction, adequacy,
enforceability or value of this Agreement or any other Credit Document or any
other document or instrument related hereto or thereto. Except as
specifically provided herein and in the other Credit Documents to which the
Agent is a party, the Agent shall have no duty or responsibility, either
-70-
<PAGE>
<PAGE>
initially or on a continuing basis, to provide any Bank with any credit or
other information with respect to the operations, business, property,
condition or creditworthiness of the Company or any of its Subsidiaries,
whether such information comes into the Agent's possession on or before the
date hereof or at any time thereafter. Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank, based on
such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and to authorize
the Agent to execute on its behalf the Security Agreement. Each Bank also
acknowledges that it will independently and without reliance upon the Agent
or any other Bank, based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking
or not taking action under this Agreement or any other Credit Document.
Section 10.07. Indemnification. Each Bank agrees (which agreement
shall survive payment of the Loans and the Notes) to indemnify the Agent, to
the extent not reimbursed by the Company, ratably in accordance with their
respective Commitments or after the Termination Date, their respective Loans
(as of the time of the incurrence of the liability being indemnified
against), from and against any and all liabilities, obligations, losses,
claims, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by, or asserted against the Agent in any way relating to or arising
out of this Agreement or any other Credit Document, or any action taken or
omitted to be taken by the Agent hereunder or thereunder; provided, that no
Bank shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the gross negligence or wilful misconduct of the
Agent or any of its officers or employees. Without limiting the foregoing,
each Bank agrees to reimburse the Agent promptly upon demand for its ratable
share of any out-of-pocket expenses (including counsel fees) incurred by the
Agent in such capacity in connection with the preparation, execution or
enforcement of, or legal advice in respect of rights or responsibilities
under, this Agreement or any other Credit Document or any amendments or
supplements hereto or thereto, to the extent that the Agent is not reimbursed
for such expenses by the Company.
Section 10.08. Successor Agent. The Agent may resign at any time
by giving written notice thereof to the Banks and the Company, and the Agent
may be removed at any time by the Required Banks by giving written notice
thereof
-71-
<PAGE>
<PAGE>
to the Agent, the other Banks and the Company at least 10 Business Days'
prior to the effective date of such removal. Upon any such resignation or
removal, the Required Banks shall have the right to appoint a successor
Agent. If no successor Agent shall have been so appointed by the Required
Banks and shall have accepted such appointment within 30 days after the
resigning Agent's giving of notice of resignation, or the Required Banks'
giving notice of removal, as the case may be, the resigning or removed Agent
may, on behalf of the Banks, appoint a successor Agent, which shall be a
commercial bank organized under the laws of the United States of America or
of any State thereof and having a combined capital and surplus of at least
$250,000,000. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the resigned or
removed Agent, and the resigned or removed Agent shall be discharged from its
duties and obligations under this Agreement. After any Agent's resignation
or removal hereunder as Agent, the provisions of this Article X shall inure
to its benefit as to any actions taken or omitted to be taken by it while it
was Agent under this Agreement.
ARTICLE XI
MISCELLANEOUS
Section 11.01. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW
YORK, UNITED STATES OF AMERICA.
Section 11.02. Set-off. As security for its obligations
hereunder, the Company hereby grants to the Agent, the Collateral Agent, the
Issuing Bank, the Swing Line Bank and each Bank a security interest in, lien
upon, and right of set-off against any amounts standing to the credit of the
Company on the books of the Agent, the Collateral Agent, the Issuing Bank,
the Swing Line Bank or such Bank in any deposit or other account maintained
with any branch of the Agent, the Collateral Agent, the Issuing Bank, the
Swing Line Bank or such Bank.
Section 11.03. Expenses. The Company agrees to pay (i) all
out-of-pocket expenses of the Agent and Collateral Agent (including the
reasonable fees and expenses of Sullivan & Cromwell, as counsel to the Agent
and Collateral Agent) in connection with the preparation of this Agreement
and the other Credit Documents and any amendments
-72-
<PAGE>
<PAGE>
or supplements hereto or thereto and (ii) all reasonable out-of-pocket
expenses incurred by the Agent, the Collateral Agent, the Issuing Bank, the
Swing Line Bank and any Bank and without duplication, reasonable fees and
disbursements of one counsel representing the Agent, the Collateral Agent,
the Issuing Bank, the Swing Line Bank and the Banks in connection with the
administration and enforcement of any provisions of this Agreement, the other
Credit Documents or any amendment or supplement hereto or thereto. The
Company shall indemnify each Bank against any transfer taxes, documentary
taxes, assessments or charges made by any Governmental Authority by reason of
the execution and delivery of this Agreement or the Credit Documents.
Section 11.04. Amendments. Any provision of this Agreement, the
Notes or the other Credit Documents may be amended or waived if, but only if,
such amendment or waiver is in writing and is signed by the Company and the
Required Banks (and, if the rights or duties of the Agent, the Collateral
Agent, the Issuing Bank or the Swing Line Bank are affected thereby, by the
Agent, the Collateral Agent, the Issuing Bank or the Swing Line Bank,
respectively); provided, that no such amendment, waiver or modification
shall, unless signed by all the Banks, (i) increase or decrease the
Commitment of any Bank or subject any Bank to any additional obligation,
(ii) reduce the principal of or rate of interest on any Loan or any fees
hereunder, (iii) postpone the date fixed for any payment of principal of or
interest on any Loan or any fees hereunder or for any reduction or
termination of any Commitment, (iv) change the percentage of any of the
Commitments or of the aggregate unpaid principal amount of the Notes or Swing
Line Advances or the number of Banks, which shall be required for the Banks
or any of them to take any action under this Section or any other provision
of this Agreement, (v) release all or substantially all of the Collateral or
(vi) amend or waive the provisions of this Section 11.04.
Section 11.05. Cumulative Rights and No Waiver. Each and every
right granted to the Agent, the Collateral Agent, the Issuing Bank, the Swing
Line Bank and the Banks hereunder or under any other document delivered
hereunder or in connection herewith, or allowed them by law or equity, shall
be cumulative and may be exercised from time to time. No failure on the part
of the Agent, the Collateral Agent, the Issuing Bank, the Swing Line Bank or
any Bank to exercise, and no delay in exercising, any right will operate as a
waiver thereof, nor will any single or partial exercise by the Agent, the
Collateral Agent, the Issuing Bank, the Swing Line Bank or any Bank of any
right preclude any other
-73-
<PAGE>
<PAGE>
or future exercise thereof or the exercise of any other right.
Section 11.06. Notices. Any communication, demand or notice to be
given in writing hereunder or with respect to the Notes will be duly given
when delivered in writing or by telecopy to a party at its address as
indicated below, except that notices from the Company pursuant to Sec-
tion 2.02, 2.07 or 3.01(c) will not be effective until received by the Agent.
A communication, demand or notice given pursuant to this Sec-
tion 11.06 shall be addressed:
If to the Company, at
Foodmaker, Inc.
9330 Balboa Avenue
San Diego, California 92123
Telecopy: (619) 571-2101
Attention: Chief Financial Officer
With copies to:
Gibson, Dunn & Crutcher
750 "B" Street
Suite 3300
San Diego, California 92101
Telecopy: (619) 544-8190
Attention: Rhonda S. Wagner
If to the Agent, the Collateral Agent, the Issuing Bank, the Swing
Line Bank or any Bank, at its address as indicated on the signature pages
hereof, with a copy to:
Sullivan & Cromwell
444 South Flower Street
Los Angeles, California 90071
Telecopy: (213) 683-0457
Attention: Alison S. Ressler
Unless otherwise provided to the contrary herein, any notice which
is required to be given in writing pursuant to the terms of this Agreement
may be given by telex, telecopy or facsimile transmission.
Section 11.07. Separability. In case any one or more of the
provisions contained in this Agreement shall be invalid, illegal or
unenforceable in any respect under any law, the validity, legality and
enforceability of the
-74-
<PAGE>
<PAGE>
remaining provisions contained herein shall not in any way be affected or
impaired thereby.
Section 11.08. Assignments and Participations.
(a) This Agreement shall be binding upon and inure to the benefit
of the Company, the Agent, the Collateral Agent, the Issuing Bank, the Swing
Line Bank and the Banks and their respective successors and assigns, except
that the Company may not assign any of its rights hereunder without the prior
written consent of the Banks.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its Commitment
or any or all of its Loans or participation interests in Syndicated Letters
of Credit and drawings thereunder. In the event of any such grant by a Bank
of a participating interest to a Participant, whether or not upon notice to
the Company and the Agent, such Bank shall remain responsible for the
performance of its obligations hereunder, and the Company and the Agent shall
continue to deal solely and directly with such Bank in connection with such
Bank's rights and obligations under this Agreement. Any agreement pursuant
to which any Bank may grant such a participating interest shall provide that
such Bank shall retain the sole right and responsibility to enforce the
obligations of the Company hereunder including the right to approve any
amendment, modification or waiver of any provision of this Agreement;
provided, that such participation agreement may provide that such Bank will
not agree to any modification, amendment or waiver of this Agreement
described in clauses (i) through (vi), inclusive, of Section 11.04 without
the consent of the Participant. The Company agrees that each Participant
shall be entitled to the benefits of Sections 5.03, 5.04 and 11.04 with
respect to its participating interest; provided, that with respect to a
participating interest hereunder, no Participant shall be entitled to receive
any amount pursuant to Section 5.03 or Section 5.04 in excess of the amount
which would have been received with respect to such participating interest by
the Bank from whom such Participant purchased such participating interest
from had such Bank not sold such participating interest to such Participant.
An assignment or other transfer which is not permitted by clause (c) below
shall be given effect for purposes of this Agreement only to the extent of a
participating interest granted in accordance with this clause (b).
(c) Any Bank may at any time assign to one or more banks or other
institutions (each an "Assignee") all,
-75-
<PAGE>
<PAGE>
or a proportionate part of all, of its rights and obligations under this
Agreement, and such Assignee shall assume such rights and obligations,
pursuant to an agreement ("Assignment Agreement") executed by such Assignee
and such transferor Bank in substantially the form of the Assignment
Agreement attached as Exhibit K hereto, with (and subject to) the consent of
the Company and the Agent (which consent shall not be unreasonably withheld);
provided, however, that any assignment of less than $5,000,000 must either
(1) be to another Bank or (2) represent a complete divestiture of the Bank's
interest in the Facility; provided, that the foregoing consent requirement
shall not be applicable in the case of, and this subsection (c) shall not
restrict, an assignment or other transfer by any Bank to a Federal Reserve
Bank. Upon (i) execution and delivery of an Assignment Agreement,
(ii) payment by such Assignee to such transferor Bank of an amount equal to
the purchase price agreed between such transferor Bank and such Assignee and
(iii) payment to the Agent of an administrative fee of $3,500, such Assignee
shall be a Bank party to this Agreement and shall have all the rights and
obligations of a Bank with a Commitment as set forth in such instrument of
assumption, and the transferor Bank shall be released from its obligations
hereunder to a corresponding extent, and no further consent or action by any
party shall be required. Upon the consummation of any assignment pursuant to
this subsection (c), the transferor Bank, the Agent and the Company shall
make appropriate arrangements so that, if required, new Notes are issued to
the Assignee.
(d) No Assignee, Participant or other transferee of any Bank's
rights shall be entitled to receive any greater payment under Section 5.03 or
5.04 than such Bank would have been entitled to receive with respect to the
rights transferred, unless such Assignee became a party to this Agreement
with the Company's prior written consent or by reason of the provisions of
Section 5.04 requiring such Bank to designate a different lending office
under certain circumstances or at a time when the circumstances giving rise
to such payment did not exist.
Section 11.09. WAIVER OF JURY; CONSENT TO JURISDICTION.
(a) THE COMPANY, THE AGENT, THE COLLATERAL AGENT, THE ISSUING BANK
AND EACH OF THE BANKS HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT,
CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED
WITH THIS AGREEMENT, THE NOTES, THE SYNDICATED
-76-
<PAGE>
<PAGE>
LETTERS OF CREDIT, THE SECURITY DOCUMENTS OR THE RELATIONSHIPS ESTABLISHED
HEREUNDER.
(b) Each of the Company, the Agent and each of the Banks hereby
irrevocably submits to the non-exclusive jurisdiction of any state or federal
court in the Borough of Manhattan, The City of New York for the purpose of
any suit, action, proceeding or judgment relating to or arising out of this
Agreement and each other Credit Document. The Company hereby appoints CT
Corporation System, 1633 Broadway, New York, New York 10019 and the Agent and
each Bank hereby also appoints CT Corporation System, 1633 Broadway, New
York, New York 10019 as their respective authorized agent on whom process may
be served in any action which may be instituted against any of them in any
state or federal court in the Borough of Manhattan, The City of New York,
arising out of or relating to any Loan or this Agreement and each other
Credit Document. Service of process upon such authorized agent and written
notice of such service to the Company or the Agent and each Bank, as the case
may be, shall be deemed in every respect effective service of process upon
the Company, the Agent or any Bank as the case may be, and the Company, the
Agent and each of the Banks hereby irrevocably consents to the jurisdiction
of any such court in any such action and to the laying of venue in the
Borough of Manhattan, The City of New York. The Company, the Agent and each
Bank hereby irrevocably waives any objection to the laying of the venue of
any such suit, action or proceeding brought in the aforesaid courts and
hereby irrevocably waives any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum.
Notwithstanding the foregoing, nothing herein shall in any way affect the
right of the parties hereto to bring any action arising out of or relating to
the Loans or this Agreement and each other Credit Document in any competent
court elsewhere having jurisdiction.
Section 11.10. Confidentiality. Except as may be required to
enforce the rights and duties established hereunder (including establishing
and maintaining the Agent's and the Banks' perfected security interest in the
Collateral), the parties hereto shall preserve in a confidential manner all
information received from the other pursuant to this Agreement, the Credit
Documents and the transactions contemplated hereunder and thereunder, and
shall not disclose such information except to those persons with which a
confidential relationship is maintained (including regulators, legal counsel,
accountants, or designated agents), or where required by law.
-77-
<PAGE>
<PAGE>
Section 11.11. Extension of Termination Date. If for the four
quarter period ending six months prior to the third anniversary of the date
of this Agreement the Company has a Consolidated EBITDA of not less than
$140,000,000, the Company may extend the Termination Date to the fourth
anniversary of the date of this Agreement by (i) giving written notice on or
before the date five months prior to the third anniversary of the date of
this Agreement of its election to so extend the Termination Date and
(ii) paying, on or before the third anniversary of the date of this
Agreement, an extension fee equal to 0.25% of each Bank's Commitment (the
"Extension Fee") to the Agent for the account of each Bank.
Section 11.12. Indemnity. The Company agrees to indemnify the
Agent, the Collateral Agent, the Issuing Bank, the Swing Line Bank and each
of the Banks and each of their respective Affiliates and their respective
directors, officers, employees and agents (each such person being called an
"Indemnitee") against, and to hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses, including counsel
fees and expenses, incurred by or asserted against any Indemnitee arising out
of, in any way connected with, or as a result of (i) the execution or
delivery of this Agreement or any other Credit Document or any agreement or
instrument contemplated hereby or thereby, the performance by the parties
thereto of their respective obligations hereunder or thereunder or the
consummation of the transactions and the other transactions contemplated
hereby or thereby, (ii) the use of the proceeds of the Loans or (iii) any
claim, litigation, investigation or proceeding relating to any of the fore-
going, whether or not any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that
such losses, claims, damages, liabilities or related expenses are determined
by a court of competent jurisdiction by final and nonappealable judgment to
have resulted from the gross negligence or wilful misconduct of any
Indemnitee. In case any proceeding should be instituted involving any
Indemnitee, such Indemnitee shall promptly notify any Indemnitor in writing
thereof, provided that the failure to provide such notice shall not relieve
the Indemnitor from any liability to the Indemnitee unless such failure shall
materially prejudice the Indemnitor. The Indemnitor shall not be liable for
any settlement of any proceeding effected without its written consent, which
consent shall not be unreasonably withheld.
The provisions of this Section 11.12 shall remain operative and in
full force and effect regardless of the expiration of the term of this
Agreement, the consummation
-78-
<PAGE>
<PAGE>
of the transactions contemplated hereby, the repayment of any of the Loans,
the reduction or cancellation of the Commitment, the invalidity or
unenforceability of any term or provision of this Agreement or any other
Credit Document, or any investigation made by or on behalf of the Banks. All
amounts due under this Section 11.12 shall be payable in immediately
available funds upon written demand therefor.
Section 11.13. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by the different parties hereto on
separate counterparts, each of which when so executed and delivered shall be
an original, but all the counterparts shall together constitute one and the
same instrument.
-79-
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the date first above written.
FOODMAKER, INC.
By: CHARLES DUDDLES
---------------------------
Name: Charles Duddles
Title: Chief Financial Officer
CREDIT LYONNAIS, NEW YORK BRANCH,
as Agent for the Banks
By: FREDERICK HADDAD
---------------------------
Name: Frederick Haddad
Title: Senior Vice President
Address for Notices:
1301 Avenue of the Americas
New York, New York 10016
Attn: Mark Koneval
Fax: (212) 459-3176
With copies to:
Credit Lyonnais Los Angeles Branch
515 South Flower Street
Los Angeles, California 90071
Attn: David Miller
Fax: (213) 623-3437
Sullivan & Cromwell
444 South Flower Street
Suite 1200
Los Angeles, California 90071
Attn: Alison S. Ressler
Fax: (213) 683-0457
-80-
<PAGE>
<PAGE>
Commitment: $35,000,000 CREDIT LYONNAIS NEW YORK BRANCH
Signing as a Bank, Swing Line Bank
and Collateral Agent
By: FREDERICK HADDAD
---------------------------
Name: Frederick Haddad
Title: Senior Vice President
Address for Notices:
1301 Avenue of the Americas
New York, New York 10016
Attn: Mark Koneval
Fax: (212) 459-3176
With copies to:
Credit Lyonnais Los Angeles Branch
515 South Flower Street
Los Angeles, California 90071
Attn: David Miller
Fax: (213) 623-3437
Sullivan & Cromwell
444 South Flower Street
Suite 1200
Los Angeles, California 90071
Attn: Alison S. Ressler
Fax: (213) 683-0457
-81-
<PAGE>
<PAGE>
Commitment: $10,000,000 UNITED STATES NATIONAL BANK
OF OREGON
By: JANET E. JORDAN
---------------------------
Name: Janet E. Jordan
Title: Vice President
Address for Notices:
111 S.W. Fifth Avenue, T-29
Portland, Oregon 97204
Attn: Janet E. Jordan
Fax: (503) 275-5428
Eurodollar Lending Office:
111 S.W. Fifth Avenue, T-29
Portland, Oregon 97204
Attn: Janet E. Jordan
Fax: (503) 275-5428
-82-
<PAGE>
<PAGE>
Commitment: $7,500,000 UNION BANK as a Bank and as the
Issuing Bank
By: ALI PASHA MOGHADDAM
---------------------------
Name: Ali Pasha Moghaddam
Title: Vice President
Address for Notices:
445 South Figueroa Street
15th Floor
Los Angeles, California 90071
Attn: Wendy Frear
Fax: (213) 236-6701
Eurodollar Lending Office:
445 South Figueroa Street
15th Floor
Los Angeles, California 90071
Attn: Wendy Frear
Fax: (213) 236-6701