FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 26, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ________ to ___________
Commission file number: 000-28590
Fine Host Corporation
Delaware 06 - 1156070
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3 Greenwich Office Park
Greenwich, CT 06831
(203) 629 - 4320
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes _____ No X
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes ____ No ____
The Registrant had 6,209,100 shares of common stock, $.01 par value, outstanding
as of August 9, 1996.
<PAGE>
TABLE OF CONTENTS
Part I - Financial Information
Page No.
Item 1 - Financial Statements (unaudited)
* Consolidated Balance Sheets - June 26, 1996
and December 27, 1995 3
* Consolidated Statements of Income- Three and
Six Months Ended June 26, 1996
and June 28, 1995 4
* Consolidated Statement of Stockholders'
Equity - Six Months Ended June 26, 1996 5
* Consolidated Statement of Cash Flows - Six
Months Ended June 26, 1996 and
June 28, 1995 6
* Notes to Financial Statements 7 - 10
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 11 - 14
Part II - Other Information
Item 1 - Legal Proceedings 15
Item 6 - Exhibits and Reports on Form 8-K 15
Signature 16
2
<PAGE>
Part I. Financial Information
Item 1. Financial Statements
FINE HOST CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
June 26,1996 December 27, 1995
(unaudited)
ASSETS
Current assets:
Cash $ 812 $ 634
Accounts receivable 9,624 7,548
Notes receivable 554 520
Inventories 2,631 2,099
Prepaid expenses and other current assets 1,580 1,893
------- -----
Total current assets 15,201 12,694
Contract rights, net 18,349 12,866
Fixtures and equipment, net 17,366 15,829
Notes receivable 1,723 1,391
Excess of cost over fair value of
net assets acquired, net 17,250 13,406
Other assets 6,427 4,395
------- -------
Total assets $76,316 $60,581
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $16,096 $12,467
Current portion of long-term debt - 2,981
Current portion of subordinated debt 1,208 1,745
--------- ---------
Total current liabilities 17,304 17,193
Deferred income taxes 7,820 6,421
Long-term debt 5,484 15,326
Subordinated debt 3,705 8,879
--------- --------
Total liabilities 34,313 47,819
Commitments and contingencies
Stock warrants -- 1,380
Stockholders' equity:
Convertible Preferred Stock,
$.01 par value, 1,000,000 shares
authorized, 134,171 issued and
outstanding at December 27, 1995 -- 1
Common Stock, $.01 par value, 25,000,000
shares authorized,6,034,600 and 2,048,200
issued and outstanding at June 26, 1996
and December 27, 1995, respectively 61 20
Additional paid-in capital 40,305 8,933
Retained earnings 1,826 2,617
Receivables from stockholders
for purchase of Common Stock (189) (189)
------- -------
Total stockholders' equity 42,003 11,382
------ -------
Total liabilities and
stockholders' equity $ 76,316 $ 60,581
========= ==========
See accompanying notes to unaudited consolidated
financial statements.
3
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FINE HOST CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
(unaudited)
Three Months Ended Six Months Ended
June 26, June 28, June 26, June 28,
1996 1995 1996 1995
------------ ------------ ------------ ----------
Net sales $25,804 $20,090 $49,964 $43,519
Cost of sales 23,390 18,422 45,020 39,717
-------- ------- ------- ------
Gross profit 2,414 1,668 4,944 3,802
General and
administrative expenses 1,241 923 2,577 2,013
----- ------- ------- -------
Income from operations 1,173 745 2,367 1,789
Interest expense, net 755 633 1,522 1,329
------ ------- ------ ------
Income before tax provision 418 112 845 460
Tax provision 167 38 336 178
------ ------ ------ ------
Net income 251 74 509 282
Accretion to redemption
value of warrants (260) (2) (1300) (74)
----- ------ ------- ------
Net income (loss) available
to Common Stockholders $ (9) $ 72 $ (791) $ 208
===== ====== ======= =======
Earnings (loss) per share
of Common Stock $ - $ .02 $ (.22) $ .07
====== ======== ======= ======
Average number of shares
of Common Stock outstanding 3,687 3,312 3,535 3,217
====== ======= ======= ======
Earnings (loss) per share
assuming full dilution $ - $ .02 $(.22) $ .06
====== ======= ======= =======
Average number of shares of
Common Stock outstanding
assuming full dilution 3,713 3,330 3,575 3,245
======= ======= ======= =======
See accompanying notes to unaudited consolidated financial statements.
4
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<TABLE>
FINE HOST CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(in thousands, except share data)
(unaudited)
<CAPTION>
Receivables
from
Stockholders
for
Convertible Additional Purchase of
Preferred Stock Common Stock Paid-In Retained Common Stockholders'
Shares Amount Shares Amount Capital Earnings Stock Equity
------ ------ ------ ------ ----------- -------- -----------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, December 27, 1995 134,171 $1 2,048,200 $20 $ 8,933 $2,617 $(189) $11,382
Stock warrant accretion (1,300) (1,300)
Shares issued in connection
with Sun West acquisition 25,900 1 369 370
Shares issued in connection
with initial public offering 2,890,218 29 30,513 30,542
Conversion of Preferred Stock (134,171) (1) 939,197 9 (8) -
Warrants exercised 123,585 1 608 609
Warrants redeemed (200) (200)
Stock issued to non-employee
directors 7,500 1 90 91
Net income _______ __ ________ ___ _______ 509 _____ 509
-------- ----------
Balance, June 26, 1996 - $ - 6,034,600 $61 $40,305 $1,826 $(189) $42,003
======== ==== ========= === ======= ====== ===== =======
See accompanying notes to unaudited consolidated financial statements.
</TABLE>
5
<PAGE>
FINE HOST CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Six Months Ended
June 26, June 28,
1996 1995
-------- -------
Cash flows from operating activities:
Net income $ 509 $ 282
Adjustments to reconcile net income to net cash
provided by (used in)operating activities:
Depreciation and amortization 2,041 1,677
Deferred income tax provision 335 175
Changes in operating assets and liabilities:
Accounts receivable (128) (396)
Inventories (189) 67
Prepaid expenses and other current assets 109 (979)
Accounts payable and accrued expenses 565 (2,454)
Increase in other assets (3,187) (2,129)
------- -------
Net cash provided by (used in)operating activities 55 (3,757)
Cash flows from investing activities:
Increase in contract rights (3,053) 38
Purchases of fixtures and equipment (1,856) (1,264)
Sale of fixtures and equipment 64 -
Acquisition of business, net of cash acquired (3,215) -
Collection of notes receivable 396 951
------- -------
Net cash used in investing activities (7,664) (275)
------- -------
Cash flows provided by financing activities:
Borrowings under long-term debt agreement 6,945 5,806
Proceeds from issuance of preferred stock - 1,500
Proceeds from issuance of common stock 30,542 -
Payment of long-term debt (19,768) (759)
Payment of subordinated debt (7,661) (3,053)
Redemption of warrants (2,880) -
Proceeds from exercise of warrants 609 -
------- -------
Net cash provided by financing activities 7,787 3,494
------- -------
Net increase (decrease) in cash 178 (538)
Cash, beginning of period 634 1,532
------- -------
Cash, end of period $ 812 $ 994
======= ======
See accompanying notes to unaudited consolidated financial statements.
6
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FINE HOST CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data)
(unaudited)
1. Summary of Significant Accounting Policies
Basis of Presentation--The unaudited consolidated financial statements
include the accounts of the Company and its wholly-owned subsidiaries. All
significant intercompany transactions and accounts have been eliminated.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted. The unaudited financial statements include all
adjustments, all of which are of a normal recurring nature, which, in the
opinion of management, are necessary for a fair presentation of the results of
operations for the three and six months ended June 26, 1996 and June 28, 1995.
The accompanying unaudited consolidated financial statements should be read in
conjunction with the consolidated financial statements of the Company and notes
thereto for the fiscal year ended December 27, 1995 included in the Company's
Registration Statement on Form S-1 declared effective by the Securities and
Exchange Commission on June 19, 1996.
Earnings (Loss) Per Share--Earnings (loss) per share of Common Stock is
computed based on the weighted average number of common and common equivalent
shares outstanding during each period. Earnings (loss) per share assuming full
dilution gives effect to the assumed exercise of all dilutive stock options and
the assumed conversion of dilutive convertible securities (warrants) except when
their effect is antidilutive. In calculating earnings (loss) per share, net
income has been reduced for the accretion to the redemption value of warrants by
$260, $2, $1,300 and $74 for the three and six months ended June 26, 1996 and
June 28, 1995, respectively.
2. Acquisitions
On July 31, 1996, the Company acquired 100% of the outstanding stock of
Ideal Management Services, Inc. ("Ideal"). Ideal provides contract food services
to public school districts in New York State. The purchase price was
approximately $3,600, consisting of cash, convertible subordinated notes with
interest at 7 1/4%, and a seven year covenant not to compete. At the option of
the note holders, the outstanding principal balance of the notes is convertible
into Common Stock at a conversion price of $15 per share.
On March 25, 1996, the Company acquired 100% of the outstanding stock of
Sun West Services, Inc. ("Sun West"). Sun West provides contract food and
beverage services primarily in the education market as well as to other
institutional clients. The purchase price was approximately $5,200, consisting
of cash, five-year subordinated notes to the sellers with interest at 7% and
25,900 shares of Common Stock.
In July 1995, the Company acquired 100% of the outstanding stock of
Northwest Food Service, Inc. ("Northwest"). Northwest provides contract food and
beverage services, primarily in the education and corporate dining markets. The
purchase price was approximately $2,500 consisting of subordinated notes to the
seller and cash.
The aforementioned acquisitions have been accounted for under the purchase
method of accounting and, accordingly, the accompanying unaudited consolidated
financial statements reflect the fair values of the assets acquired and
liabilities
7
<PAGE>
FINE HOST CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(in thousands,except share and per share data)
(unaudited)
assumed or incurred as of the effective date of the acquisitions. The results of
operations of the acquired companies are included in the accompanying unaudited
consolidated financial statements since their respective dates of acquisition.
The following table summarizes pro forma information as follows: (i) with
respect to the income statement data for the six months ended June 28, 1995, as
if the acquisitions of Sun West and Northwest had been completed as of the
beginning of such period; and (ii) with respect to the income statement data for
the six months ended June 26, 1996, as if the acquisition of Sun West had been
completed as of the beginning of such period:
Six Months Ended
June 26, June 28,
1996 1995
------- -------
Summary statement of income
Net sales $ 54,005 $ 57,538
Income from operations $ 2,263 $ 1,710
Net loss $ (1,079) $ (154)
Net loss per share assuming full dilution $ (.30) $ (.05)
======== ========
3. Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses consists of the following:
June 26, December 27,
1996 1995
-------- -----------
Accounts payable $ 5,158 $ 5,197
Accrued wages and benefits 4,086 1,607
Accrued rent to clients 2,908 2,576
Accrued other 3,944 3,087
------- -------
Total $16,096 $12,467
======= =======
4. Long-Term Debt
Long-term debt consists of the following:
June 26 December 27,
1996 1995
--------- -----------
Term Loan $ - $ 9,100
Working Capital Line 5,484 6,000
Guidance Line - 3,207
------- -------
5,484 18,307
Less: current portion - 2,981
------- -------
Total $ 5,484 $15,326
======= =======
8
<PAGE>
FINE HOST CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(in thousands, except share and per share data)
(unaudited)
The Company's bank agreement was amended and restated on June 19, 1996 in
connection with the initial public offering (the "Restated Bank Agreement") and
provides for (i) a working capital revolving credit line (the "Working Capital
Line") for general obligations and letters of credit of the Company, in the
maximum amount of $20,000 and (ii) a line of credit to provide for future
expansion by the Company (the "Guidance Line") in the maximum amount of $55,000.
The maximum borrowing under the Restated Bank Agreement was $75,000 as of June
19, 1996. The Restated Bank Agreement terminates on April 30, 1999.
The Company's obligations under the Restated Bank Agreement are
collateralized by a pledge of shares of the common stock or other equity
interests of the Company's subsidiaries, as well as by certain fixtures and
equipment, notes receivable and other assets, as well as the receipt, if any, of
certain funds paid to the Company with respect to the termination of client
contracts prior to their expiration.
The Restated Bank Agreement contains various financial and other
restrictions, including, but not limited to, restrictions on indebtedness,
capital expenditures and commitments. Additional obligations require maintenance
of certain financial ratios, including the ratio of total debt to operating cash
flow, operating cash flow to cash interest expense, and minimum net worth and
operating cash flow. The Restated Bank Agreement also contains prohibitions on
the payment of dividends.
5. Subordinated Debt
In March 1996, as part of the acquisition of Sun West (see Note 2), the
Company issued to the stockholders of Sun West the following: (1) a subordinated
promissory note with a face value of $1,350 at 7% interest per annum, payable in
four annual installments beginning in 1998; and (2) a subordinated promissory
note with a face value of $638 at 7% interest per annum, payable in three annual
installments beginning in 1997. The notes were discounted to present value using
a market rate of 10%. The respective balances at June 26, 1996 were $1,206 and
$594, of which $1,236 and $322 were classified as long term.
In July 1995, as part of the purchase price of Northwest (see Note 2), the
Company issued a $1,350 note to the seller at a 6% interest per annum payable in
six equal annual installments. The note was discounted to present value using a
market rate of 12.5% and had a balance at June 26, 1996 of $1,221, of which $957
was classified as long-term.
6. Stockholders' Equity
On July 19, 1996, pursuant to the terms of the over-allotment options
issued to the underwriters of the Company's initial public offering, the Company
sold 174,500 shares of common stock at the initial public offering price of
$12.00 per share, generating net proceeds of approximately $1,500, after
deducting the underwriting discount and certain transaction expenses. The net
proceeds have been invested in short term investments in accordance with the
Company's investment policy.
On June 19, 1996, the effective date of the initial public offering, the
Company sold 2,890,218 shares at a price of $12.00 per share, generating net
proceeds (including the net proceeds received by the Company upon the exercise
of certain warrants) of approximately $31,100, after deducting the underwriting
discount and offering expenses paid by the Company. The net proceeds were used
to repay obligations under the Company's credit facility in effect prior to the
public offering and subordinated notes, as well as the amount required to
repurchase certain warrants. In addition, all of the then outstanding Series A
Convertible Preferred Stock was converted into 939,197 shares of Common Stock.
9
<PAGE>
FINE HOST CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(in thousands, except share and per share data)
(unaudited)
On March 29, 1996, the Board of Directors authorized the filing of a
registration statement with the Securities and Exchange Commission for the sale
by the Company of 2,890,218 shares of Common Stock to the public. In connection
therewith, the Company's Board of Directors declared a 7-for-1 stock split in
the form of a stock dividend which was effected prior to the offering. Current
and prior year information has been restated to reflect this stock split.
7. Income Taxes
The income tax provision consists of the following:
Three Months Ended Six Months Ended
June 26, June 28, June 26, June 28,
1996 1995 1996 1995
Current:
Federal $ - $ - $ - $ -
State and local - - 1 3
------ -------- ------ -----
Total current - - 1 3
------ -------- ------ -----
Deferred:
Federal 152 30 276 143
State and local 15 8 59 32
----- ------- ------ -----
Total deferred 167 38 335 175
---- ------ ----- ----
Total $167 $ 38 $ 336 $ 178
==== ====== ===== =====
At June 26, 1996, the Company had, for Federal income tax reporting, an
estimated net operating loss carryforward of approximately $2,900 that will
begin to expire in 2008. Certain costs of acquisitions were charged to excess of
cost over fair market value of assets acquired, which are deductible for tax
purposes. The net estimated tax effect of these costs ($679 for financial
statement reporting) was recorded as a reduction of excess of cost over fair
market value of assets acquired.
8. Major Client
During the six months ended June 26, 1996 one client represented 10.6% and
for the six months ended June 28, 1995 another represented 14.8% of net sales,
respectively.
9. Subsequent Events
On July 31, 1996, the Company acquired 100% of the outstanding stock of
Ideal Management Services, Inc. ("Ideal"). Ideal presently provides contract
food services to public school districts in New York State, (see Note 2).
On July 16, 1996, the Company signed a non-binding Letter of Intent to
purchase all of the issued and outstanding capital stock of a contract food
service provider operating primarily at Education facilities. The estimated
annual revenues are $10,000. The proposed purchase price is estimated to be $3.5
million consisting of both cash and common stock of the Company.
10
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operation
The Company was formed in 1985 and has grown to become a leading provider of
food and beverage concession and catering services to more than 190 facilities
in 31 states. The Company targets four distinct markets within the contract food
service industry: the recreation and leisure market ("Recreation and Leisure"),
serving arenas, stadiums, amphitheaters, civic centers and other recreational
facilities; the convention center market ("Convention Centers"); the educational
facilities market ("Education"), which the Company entered in 1994, serving
colleges, universities and public and private schools; and the corporate dining
market ("Corporate Dining"), which the Company entered in 1994, serving
corporate cafeterias, office complexes and manufacturing plants.
The matters discussed in this Form 10-Q contain forward looking statements
that involve risks and uncertainties including risks associated with the food
service industry and other risks detailed from time to time in the Company's
filings with the Securities and Exchange Commission.
Results of Operations
The following table sets forth, for the periods indicated, certain
financial data as a percentage of the Company's net sales:
Three Months Ended Six Months Ended
June 26, June 28, June 26, June 28,
1996 1995 1996 1995
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of sales 90.6 91.7 90.1 91.3
----- ----- ----- -----
Gross profit 9.4 8.3 9.9 8.7
General and administrative expenses 4.9 4.6 5.2 4.6
------ ------ ---- ----
Income from operations 4.5 3.7 4.7 4.1
Interest expense, net 2.9 3.1 3.0 3.0
------ ------ ------ -----
Income before tax provision 1.6 0.6 1.7 1.1
Tax provision 0.6 0.2 0.7 0.4
------ ----- ------ -----
Net income 1.0% 0.4% 1.0% 0.7%
====== ===== ====== =====
<TABLE>
<CAPTION>
The following table sets forth net sales attributable to the Company's
principal operating markets, expressed in dollars (in thousands) and as a
percentage of total net sales:
Three Months Ended Six Months Ended
June 26, June 28, June 26, June 28,
1996 1995 1996 1995
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Recreation and Leisure $ 7,571 29.3% $ 8,622 42.9% $14,469 29.0% $18,183 41.8%
Convention Centers 8,533 33.1 8,210 40.9 20,368 40.8 17,839 41.0
Education 5,049 19.6 1,285 6.4 8,117 16.2 3,138 7.2
Corporate Dining 2,139 8.3 1,973 9.8 4,498 9.0 4,359 10.0
Other 2,512 9.7 - - 2,512 5.0 - -
------ ------ ------- ------ ------ ----- ------ -----
Total $25,804 100.0% $20,090 100.0% $49,964 100.0% $43,519 100.0%
======= ===== ======= ====== ====== ===== ====== =====
</TABLE>
11
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<TABLE>
<CAPTION>
The following table sets forth the net sales and gross profit attributable to
the Company's principal types of contracts (in thousands):
Three Months Ended Six Months Ended
June 26, June 28, June 26, June 28,
1996 1995 1996 1995
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Summary By Net Gross Net Gross Net Gross Net Gross
Contract Type Sales Profit Sales Profit Sales Profit Sales Profit
- ------------- ----- ------ ----- ------ ----- ------ ------ ------
P&L $14,621 $ 1,570 $ 9,915 $ 782 $30,183 $3,282 $22,578 $2,194
Profit sharing 8,380 315 9,359 447 16,234 743 19,340 951
Management fee 2,803 529 816 439 3,547 919 1,601 657
-------- -------- --------------- ----------------- -----------------
$25,804 $ 2,414 $20,090 $1,668 $49,964 $4,944 $43,519 $3,802
======= ======= ======= ====== ======= ====== ======= ======
</TABLE>
Three Months Ended June 26, 1996 Compared to Three Months Ended June 28, 1995
Net Sales. The Company's net sales increased 28%, to $25.8 million for the
three months ended June 26, 1996 from $20.1 million for the three months ended
June 28, 1995. Net sales increased in all market areas, except Recreation and
Leisure. Recreation and Leisure net sales decreased 12%, primarily because of a
decrease in attendance at the Florida Marlins major league baseball games and
the decision by a private tenant of one of the Company's clients to build a new
facility and self- operate its food service. Net sales from Convention Centers
increased 4% primarily as a result of increased sales from existing contracts
and the impact of new contracts. Net sales in Education and Corporate Dining
increased 120%, primarily as a result of the impact of the acquisition of
Northwest in June 1995 and Sun West in March 1996.
Gross Profit. Gross profit as a percentage of net sales increased to 9.4%
for the three months ended June 26, 1996 from the 8.3% achieved for the
comparable 1995 period. The increase was primarily from purchasing efficiencies
realized from an expanded base of business.
General and Administrative Expenses. General and administrative expenses
increased to $1.2 million (or 4.9% of net sales) for the three months ended June
26, 1996 from $923,000 (or 4.6% of net sales) for the three months ended June
28, 1995. The increase was attributable primarily to the continued investment in
regional staff and training to support the Company's growing base of business.
Operating Income. Operating income increased 57% to $1.2 million for the
three months ended June 26, 1996 from $745,000 for the three months ended June
28, 1995, primarily as a result of the factors discussed above.
Interest Expense. Interest expense increased approximately $122,000 for the
three months ended June 26, 1996, due primarily to increased debt levels
incurred to finance investments in both new accounts and acquisitions.
Six Months Ended June 26, 1996 Compared to Six Months Ended June 28, 1995
Net Sales. The Company's net sales increased 14.8% to $50.0 million for the
six months ended June 26, 1996 from $43.6 million for the six months ended June
28, 1995. Net sales increased in all market areas, except Recreation and
Leisure. Recreation and Leisure net sales decreased 20%, primarily for the
reasons mentioned above. Net sales from Convention Centers increased 14%
primarily as a result of increased sales from existing contracts and the impact
of new contracts. Net sales in Education and Corporate Dining increased 68%,
resulting from the impact of the acquisition of Northwest in June 1995 and Sun
West in March 1996.
12
<PAGE>
Gross Profit. Gross profit as a percentage of net sales increased to 9.9%
for the six months ended June 26, 1996 from the 8.7% achieved for the comparable
1995 period. The increase was primarily from purchasing efficiencies realized
from an expanded base of business.
General and Administrative Expenses. General and administrative expenses
increased to $2.6 million (or 5.2% of net sales) for the six months ended June
26, 1996 from $2.0 million (or 4.6% of net sales) for the six months ended June
28, 1995. The increase was attributable primarily to the continued investment in
regional staff and training to support the Company's growing base of business.
Operating Income. Operating income increased 32% to $2.4 million for the six
months ended June 26, 1996 from $1.8 million for the six months ended June 28,
1995, primarily as a result of the factors discussed above.
Interest Expense. Interest expense increased approximately $193,000 for the
six months ended June 26, 1996, due primarily to increased debt levels incurred
to finance investments in both new accounts and acquisitions.
Liquidity and Capital Resources
The Company has funded its capital requirements from a combination of
operating cash flow and debt and equity financing. Cash flow from operating
activities improved to a source of funds of approximately $55,000 for the six
months ended June 26, 1996 from a use of funds of approximately $3.8 million for
the six months ended June 28, 1995. This resulted from an increase in trade
payables and an improvement in operating profits.
EBITDA was $4.5 million and $3.7 million for the six months ended June 26,
1996 and June 28, 1995, respectively. EBITDA represents earnings before interest
expense, income tax expense and depreciation and amortization. EBITDA is not a
measurement in accordance with GAAP and should not be considered an alternative
to, or more meaningful than, income from operations, net income or cash flows as
defined by GAAP or as a measure of the Company's profitability or liquidity.
Cash flows used in investing activities was approximately $7.7 million and
$275,000 for the six months ended June 26, 1996 and June 28, 1995, respectively.
In fiscal 1996, $3.2 million was used in connection with the Sun West
acquisition and $4.9 million was used for contract investments, including $1.9
million for additions to fixed assets.
On June 19, 1996, the Company sold 2,890,218 shares of its Common Stock in
an initial public offering at a price of $12.00 per share, resulting in net
proceeds of approximately $31.1 million after deducting underwriting discounts
and expenses related to the offering. The Company used the net proceeds to repay
obligations under the Company's credit facility and certain subordinated notes.
On July 19, 1996, pursuant to the terms of the over-allotment option issued to
the underwriters of the Company's initial public offering, the Company sold an
additional 174,500 shares of the Company's common stock at the initial public
offering price of $12.00 per share, resulting in net proceeds of approximately
$1.5 million after deducting underwriting discounts and expenses related to the
offering.
In connection with the Company's offering, the Company's credit facility was
amended and restated on June 19, 1996 ( the "Restated Bank Agreement"). The
Restated Bank Agreement provides for (i) a working capital revolving credit line
for general obligations and letters of credit, in the maximum aggregate amount
of $20.0 million (the "Working Capital Line") and (ii) a line of credit to
provide for future expansion by the Company, in the maximum amount of $55.0
million. The maximum aggregate allowable borrowings under the Restated Bank
Agreement is $75.0 million. The Restated Bank Agreement terminates on April 30,
1999.
The Company believes that the proceeds of the offering, internally generated
funds and amounts available under the Restated Bank Agreement are sufficient to
satisfy the Company's presently anticipated capital requirements.
13
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At June 26, 1996 and December 27, 1995 the Company's current liabilities
exceeded its current assets, resulting in a working capital deficit of $2.1
million and $4.5 million, respectively. The Company believes that negative
working capital is typical of operators in the food service business. The
Working Capital Line provides funds for liquidity, seasonal borrowing needs and
other general corporate purposes.
On July 16, 1996, the Company signed a non-binding Letter of Intent to
purchase all of the issued and outstanding common stock of a contract food
service provider operating primarily at Education facilities. The estimated
annual revenues are $10.0 million. The proposed purchase price is estimated to
be $3.5 million consisting of both cash and common stock of the Company.
14
<PAGE>
Part II. Other Information
Item 1. Legal Proceedings
On May 31, 1996, one of the Company's customers filed in the United States
Bankruptcy Court for the Southern District of Indiana for protection from its
creditors under Chapter 11 of the United States Bankruptcy Code. The client had
previously executed mortgages on its facility in favor of the Company to secure
repayment of the unamortized amount of the Company's loans to the facility,
which was approximately $1.0 million as of June 26, 1996.
Reference is made to the discussion of legal proceedings found in the
Company's Registration Statement on Form S-1 declared effective by the
Securities and Exchange Commission on June 19, 1996. There have been no material
changes on the status of the proceedings referenced therein.
The Company is involved in certain legal proceedings incidental to the
normal conduct of its business. The Company does not believe that any
liabilities relating to such legal proceedings to which it is a party are likely
to be, individually or in the aggregate, material to its consolidated financial
position or results of operations.
Item 6. Exhibits and Reports on Form 8-K
A) Exhibits:
*2 Stock Purchase Agreement, dated as of March 25, 1996, by and
among the Company, William C. Smitherman, Jo Ann McBride
Smitherman, James E. McBride and Edward G. Enos.
*3.1 Restated Certificate of Incorporation
*3.2 Restated By-Laws
*4 Specimen of Registrant's Common Stock certificate
10 Third Amended and Restated Loan Agreement dated as of June 19,
1996 among Fine Host Corporation and its subsidiaries and US
Trust as Lender and Agent for the banks.
11 Computations of Per Share Earnings
27 Financial Data Schedule
* Filed as exhibits to the Company's Registration Statement on Form S-1,
declared effective by the Securities and Exchange Commission on June 19, 1996,
and hereby incorporated by reference.
B) Reports on Form 8-K - None
- ------------------------------------------------------------------------------
Omitted from this Part II are items which are inapplicable or to which the
answer is negative for the period presented.
15
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Fine Host Corporation
By: /s/ Nelson A. Barber
Nelson A. Barber
Senior Vice President and Chief Financial Officer
(Duly Authorized Officer and Principal Financial
and Accounting Officer)
Date: August 12, 1996
16
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EXHIBIT INDEX
Exhibit No. Description
*2 Stock Purchase Agreement, dated as of March 25, 1996,
by and among the Company, William C. Smitherman, Jo
Ann McBride Smitherman, James E. McBride and
Edward G. Enos.
*3.1 Restated Certificate of Incorporation
*3.2 Restated By-Laws
*4 Specimen of Registrant's Common Stock certificate
10 Third Amended and Restated Loan Agreement dated as of
June 19,1996 among Fine Host Corporation and its
subsidiaries and US Trust as lender and agent for
the banks.
11 Computations of Per Share Earnings
27 Financial Data Schedule
* Filed as exhibits to the Company's Registration Statement on Form S-1,
declared effective by the Securities and Exchange Commission on June 19, 1996,
and hereby incorporated by reference.
<PAGE>
THIRD AMENDED AND RESTATED LOAN AGREEMENT
Dated as of June 19, 1996
Among
FINE HOST CORPORATION (the "Borrower"),
FINE HOST SERVICES CORPORATION ("Fine Host Services"),
FINE HOST INTERNATIONAL CORPORATION ("Fine Host International"),
FINE HOST OF VERMONT, INC. ("Fine Host of Vermont"),
FANFARE, INC. ("Fanfare"),
GLOBAL FANFARE, INC. ("Global Fanfare"),
CREATIVE FOOD MANAGEMENT, INC. ("CFM"),
NORTHWEST FOOD SERVICE, INC. ("Northwest"),
TARRANT COUNTY CONCESSIONS, L.L.C. ("Tarrant County"),
SUN WEST SERVICES, INC. ("SWSI"),
USTRUST AS LENDER ("UST") AND AGENT FOR THE BANKS,
THE SUMITOMO BANK, LIMITED ("Sumitomo"),
STATE STREET BANK AND TRUST COMPANY ("SSB"),
BANK OF BOSTON CONNECTICUT ("BBC"),
MELLON BANK, N.A. ("Mellon") and
THE BANK OF NEW YORK ("BNY")
(UST, SUMITOMO, SSB, BBC, MELLON AND BNY ARE COLLECTIVELY
REFERRED TO AS THE "BANKS")
<PAGE>
TABLE OF CONTENTS
Item Page No.
1. DEFINITIONS
1.1 General Terms.....................................................3
1.2 Accounting Terms.................................................20
1.3 Other Terms Defined in Uniform Commercial Code...................20
1.4 Construction.....................................................20
2. LOANS
2.1 Working Capital Loans............................................20
2.2 Guidance Loans...................................................22
2.3 Letters of Credit Under Working Capital Line.....................24
2.4 Borrower's Loan Account..........................................26
2.5 Statements.......................................................27
2.6 Fees.............................................................27
2.7 Method of Making Payments........................................27
2.8 Termination Date; Cancellation Fee...............................28
2.9 Limitation on Charges............................................28
2.10 Capital Adequacy Provisions......................................29
2.11 Additional Collateral Following Termination......................29
3. SECURITY FOR THE LIABILITIES; GUARANTIES
3.1 Security.........................................................29
3.2 Chattel Paper Instruments........................................30
3.3 Vehicles.........................................................30
3.4 Equipment........................................................31
3.5 Equipment Records................................................31
3.6 Safekeeping of Equipment.........................................31
3.7 Maintenance of Properties........................................31
4. CONDITIONS OF ADVANCES
4.1 Borrower's Request...............................................32
4.2 Financial Condition..............................................32
4.3 No Event of Default..............................................32
4.4 Representations and Warranties...................................32
4.5 Additional Conditions for Approval of Guidance Loan..............32
4.6 Additional Conditions for Approval of Working Capital Loans......34
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4.7 Other Requirements...............................................34
4.8 Additional Conditions for Making Loans...........................34
5. REPRESENTATIONS AND WARRANTIES
5.1 Corporate Existence..............................................35
5.2 Corporate Authority..............................................36
5.3 Binding Effect...................................................36
5.4 Financial Data...................................................36
5.5 Tangible Assets..................................................37
5.6 Title to Collateral..............................................37
5.7 Real Property; Leases............................................38
5.8 Solvency.........................................................38
5.9 Principal Place of Business......................................39
5.10 Other Corporate Names............................................39
5.11 Tax Liabilities..................................................39
5.12 Loans............................................................39
5.13 Margin Securities................................................39
5.14 Subsidiaries; Divisions..........................................40
5.15 Litigation and Proceedings.......................................40
5.16 Registration Statement...........................................40
5.17 Material Agreements..............................................41
5.18 Largest Customers................................................41
5.19 Employee Controversies and Employment and Labor Agreements.......41
5.20 Compliance with Laws and Regulations.............................42
5.21 Intellectual Property Rights.....................................43
5.22 Pension Related Matters..........................................43
5.23 Environmental Matters............................................44
5.24 Broker's Fee.....................................................45
5.25 Securities Matters...............................................45
5.26 Equity Beneficial Ownership......................................45
5.27 Disclosure.......................................................45
5.28 Capitalization...................................................45
5.29 Corporate Structure..............................................48
5.30 Facility Agreements with Change in Stock Ownership Restrictions..48
6. AFFIRMATIVE COVENANTS
6.1 Financial Covenants..............................................49
6.1.1 Debt to Operating Cash Flow Ratio.......................49
6.1.2 Operating Cash Flow to Fixed Charge-Ratio...............49
6.1.3 Operating Cash Flow to Cash Interest Expense Ratio......49
6.1.4 Minimum Net Worth.......................................49
6.1.5 Minimum Operating Cash Flow.............................50
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6.1.6 Minimum Tangible Capital Base...........................50
6.2 Financial Statements.............................................50
6.3 Inspection.......................................................53
6.4 Conduct of Business..............................................54
6.5 Claims and Taxes.................................................54
6.6 The Agent's and the Banks' Costs and
Expenses as Additional Liabilities......................55
6.7 Borrower's Liability Insurance...................................55
6.8 Borrower's Insurance.............................................55
6.9 Pension Plans....................................................57
6.10 Notice of Suit...................................................58
6.11 Supervening Changes in Law.......................................58
6.12 Environmental Notices............................................58
6.13 Use of the Proceeds..............................................58
6.14 Depository Accounts..............................................59
6.15 Collateral Assignments of Licenses and
Management Agreements...................................59
6.16 Application of Net Contract Proceeds.............................59
6.17 Covenants in Subordinated Debt Documents.........................59
7. NEGATIVE COVENANTS
7.1 Encumbrances.....................................................60
7.2 Indebtedness.....................................................60
7.3 Mergers and Consolidations.......................................61
7.4 Acquisitions.....................................................61
7.5 Disposal of Property.............................................62
7.6 Investment or Loans..............................................62
7.7 Guaranties.......................................................63
7.8 Capital Expenditure Limitations..................................64
7.9 Distributions....................................................64
7.10 Compensation.....................................................65
7.11 Transactions with Affiliates.....................................65
7.12 Prepayment of Other Liabilities..................................65
7.13 Modification of Indebtedness.....................................65
7.14 Amendment of Certificate or Articles of Incorporation or By-Laws.65
7.15 ERISA Termination Event..........................................66
7.16 Subordinated Debt Documents......................................66
7.17 CFM Notes........................................................66
8. DEFAULT, RIGHTS AND REMEDIES OF THE AGENT
8.1 Event of Default.................................................66
8.2 Termination of Obligation to Make Loans and Acceleration.........69
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8.3 Rights and Remedies Generally....................................69
8.4 Entry Upon Premises and Access to Information....................69
8.5 Sale or Other Disposition of Collateral by the Agent.............70
8.6 Waiver of Demand.................................................70
8.7 Waiver of Notice.................................................70
8.8 Advice of Counsel................................................70
9. THE AGENT
9.1 Appointment of the Agent.........................................71
9.2 Administration of the Loans/Letters of Credit....................71
9.3 Agent's Duty of Care.............................................75
9.4 Reliance by Agent................................................75
9.5 Notice of Default................................................76
9.6 Non-Reliance on Agent and Other Banks............................76
9.7 Indemnification..................................................77
9.8 Successor Agent..................................................77
9.9 Rescission of Loan Payments......................................77
9.10 Sharing of Payments..............................................78
9.11 Representations and Warranties of the Other Banks
and of the Agent........................................78
9.12 Notices..........................................................78
10. MISCELLANEOUS
10.1 Waiver...........................................................78
10.2 Attorneys' Fees and Expenses.....................................79
10.3 Expenditures by the Agent........................................79
10.4 Custody and Preservation by Collateral...........................79
10.5 Reliance by the Banks............................................80
10.6 Successors and Assignees.........................................80
10.7 Applicable Law; Severability.....................................80
10.8 Submission to Jurisdiction; Jury Trial Waiver; Waiver of Bond....80
10.9 Application of Payments..........................................81
10.10 Marshalling; Payments Set Aside..................................81
10.11 Section Titles...................................................81
10.12 Continuing Effect................................................81
10.13 Notices..........................................................81
10.14 Equitable Relief.................................................82
10.15 Entire Agreement; Amendments.....................................82
10.16 Participations and Assignments...................................82
10.17 Changes in Accounting Principles.................................84
10.18 Indemnity........................................................85
10.19 Representations and Warranties, etc..............................85
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10.20 Treatment of Certain Information.................................85
10.21 Independence of Covenants........................................85
10.22 Time of the Essence..............................................86
10.23 Closing Date.....................................................86
Exhibit A Form of Commercial Promissory Note (Working Capital Loan)
Exhibit B Form of Commercial Promissory Note (Guidance Line of
Credit)
Exhibit C Form of Application for Commercial Letter of Credit and
Agreement, with Addendum
Exhibit D Form of First Amended and Restated Unlimited Guaranty
Exhibit E Form of First Amended and Restated Security Agreement -
All Assets for Borrower and Unlimited Guarantors
Exhibit F Form of First Amended and Restated Assignment of
Receivables and Proceeds for Borrower and Unlimited
Guarantors
Exhibit G Form of First Amended and Restated Limited Guaranty
Exhibit H Form of First Amended and Restated Security Agreement -
All Assets for Limited Guarantors
Exhibit I Form of First Amended and Restated Assignment of
Receivables and Proceeds for Limited Guarantors Exhibit J
Form of First Amended and Restated Stock Pledge Agreement Exhibit K
Form of First Amended and Restated LLC Pledge Agreement Exhibit L
Form of First Amended and Restated Joint Venture Pledge
Agreement
Exhibit M Form of Assignment and Assumption
Schedule 3.4 Equipment
Schedule 5.1 Corporate Existence
Schedule 5.4 Financial Data
Schedule 5.5 Tangible Assets
Schedule 5.6 Title to Collateral
Schedule 5.7 Real Property; Leases
Schedule 5.10 Other Corporate Names
Schedule 5.12 Loans
Schedule 5.14 Subsidiaries
Schedule 5.15 Litigation and Proceedings
Schedule 5.17 Material Agreements
Schedule 5.18 Largest Customers
Schedule 5.19 Employment Controversies and Employment
and Labor Agreements
Schedule 5.20(b) Material Licenses
Schedule 5.20(c) License Violations
Schedule 5.23 Environmental Matters
Schedule 5.24 Broker's Fees
Schedule 5.26 Capital Stock
Schedule 5.29 Interest in Other Entities
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Schedule 5.30 Facility Agreements
Schedule 7.1 Permitted Liens
Schedule 7.2 Permitted Indebtedness
Schedule 7.6 Ongoing Investments
Schedule 7.7 Guaranties
Schedule 7.10 Compensation to Affiliates
Schedule 7.11 Transactions with Affiliates
<PAGE>
This THIRD AMENDED AND RESTATED LOAN AGREEMENT (this "Agreement") is
executed and effective (subject to all of the conditions contained herein) on
June 19, 1996, but is dated as of the Closing Date (as defined below), by and
among (a) FINE HOST CORPORATION, a Delaware corporation, with its principal
place of business and chief executive office at 3 Greenwich Office Park,
Greenwich, Connecticut 06831 ("Borrower" or the "Borrower"), (b) FINE HOST
SERVICES CORPORATION, a Delaware corporation, which is a wholly-owned subsidiary
of the Borrower, and whose principal place of business is at 3 Greenwich Office
Park, Greenwich, Connecticut 06831 ("Fine Host Services"), (c) FINE HOST OF
VERMONT, INC., a Vermont corporation, which is a wholly-owned subsidiary of the
Borrower, and whose principal place of business is at 255 Maple Street, Stowe,
Vermont 05672 ("Fine Host of Vermont"), (d) FANFARE, INC., a Massachusetts
corporation, which is a wholly-owned subsidiary of the Borrower, and whose
principal place of business is at 797 Turnpike Street, North Andover,
Massachusetts 01845 ("Fanfare"), (e) GLOBAL FANFARE, INC., an Indiana
corporation, which is a wholly-owned subsidiary of the Borrower, and whose
principal place of business is at 4000 Parnell Avenue, Fort Wayne, Indiana 46805
("Global Fanfare"), (f) FINE HOST INTERNATIONAL CORPORATION, a Delaware
corporation, which is a wholly-owned subsidiary of the Borrower, and whose
principal place of business is at 3 Greenwich Office Park, Greenwich,
Connecticut 06831 ("Fine Host International"), (g) CREATIVE FOOD MANAGEMENT,
INC., an Ohio corporation (formerly known as VGE Acquisition Corp.), which is a
wholly-owned subsidiary of the Borrower, and whose principal place of business
is at 6061 Telegraph Road, Suite MM, Toledo, Ohio 43612 ("CFM"), (h) NORTHWEST
FOOD SERVICE, INC., an Idaho corporation which is a wholly-owned subsidiary of
the Borrower, and whose principal place of business is at 305 East 37th Street,
Boise, Idaho 83714 ("Northwest"), (i) TARRANT COUNTY CONCESSIONS, L.L.C., a
Texas limited liability company, with its principal place of business located at
100 Congress Avenue, Suite 1100, Austin, Texas 78746 ("Tarrant County"), (j) SUN
WEST SERVICES, INC., a New Mexico corporation, which is a wholly-owned
subsidiary of the Borrower, and whose principal place of business is at 19 West
Alameda Drive, Suite No. 101, Tempe, Arizona 85282 ("SWSI"), (k) USTRUST, a
Massachusetts trust company, having an office at 30 Court Street, Boston,
Massachusetts 02108 (acting for itself, "UST"), (l) USTRUST, a Massachusetts
trust company, having an office at 30 Court Street, Boston, Massachusetts 02108
(acting as agent for the Banks, including itself, the "Agent"), (m) THE SUMITOMO
BANK, LIMITED, a Japanese bank, having an office at 233 South Wacker Drive,
Chicago, Illinois 60606 ("Sumitomo"), (n) STATE STREET BANK AND TRUST COMPANY, a
Massachusetts trust company, having an office at 225 Franklin Street, Boston,
Massachusetts 02110 ("SSB"), (o) BANK OF BOSTON CONNECTICUT, a Connecticut bank,
having an office at One Landmark Square, Suite 2002, Stamford, Connecticut 06901
("BBC"), (p) MELLON BANK, N.A., a national banking association, having an office
at 1735 Market Street, P.O. Box 7899, Philadelphia, Pennsylvania 19101
("Mellon") and (q) THE BANK OF NEW YORK, a New York bank, having an office at
530 Fifth Avenue, New York, New York 10036 ("BNY"). (UST for itself, Sumitomo,
SSB, BBC, Mellon and BNY are hereinafter sometimes referred to collectively as
the "Banks" and singly as a "Bank").
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<PAGE>
PRELIMINARY STATEMENTS
UST, Sumitomo, SSB, BBC, BNY, the Borrower and its Subsidiaries have
entered into certain loan arrangements which are evidenced by, among other
documents, a certain Second Amended and Restated Loan Agreement dated April 24,
1995 among UST, Sumitomo, SSB, BBC, BNY, the Borrower and its Subsidiaries, as
subsequently amended, pursuant to which UST, Sumitomo, SSB, BBC and BNY have
made certain loans to the Borrower as more particularly described therein (as so
amended, the "Existing Loan Agreement").
UST, Sumitomo, SSB, BBC, BNY and Mellon have agreed to increase
certain of such loan arrangements such that the total aggregate principal amount
of all such loan arrangements is increased to up to Seventy-Five Million and
00/100 Dollars ($75,000,000.00), as more particularly described in this
Agreement. The aggregate commitment of UST hereunder is no greater than Fifteen
Million and 00/100 Dollars ($15,000,000.00), the aggregate commitment of
Sumitomo hereunder is no greater than Fifteen Million and 00/100 Dollars
($15,000,000.00), the aggregate commitment of SSB hereunder is no greater than
Fifteen Million and 00/100 Dollars ($15,000,000.00), the aggregate commitment of
BBC hereunder is no greater than Ten Million and 00/100 Dollars
($10,000,000.00), the aggregate commitment of Mellon hereunder is no greater
than Ten Million and 00/100 Dollars ($10,000,000.00), and the aggregate
commitment of BNY hereunder is no greater than Ten Million and 00/100 Dollars
($10,000,000.00). Notwithstanding anything contained herein to the contrary, all
obligations of the Banks hereunder with respect to such loan arrangements are
several, and not joint, obligations of the Banks.
The Banks have agreed to designate UST as the "Agent" for the loan
arrangements described in this Agreement and, notwithstanding anything contained
herein to the contrary, the Agent shall act for all of the Banks in all matters
arising hereunder relating to the Banks as contemplated by Section 9.
The Banks, the Borrower and its Subsidiaries have agreed to amend and
restate the Existing Loan Agreement in its entirety, and all of the parties to
this Agreement acknowledge and agree that, upon execution and delivery of this
Agreement, this Agreement, from and after this date, shall govern the
relationship of the parties hereto.
AGREEMENTS
NOW, THEREFORE, in consideration of the terms and conditions contained
herein, and of any loans or extensions of credit now or hereafter made to or for
the benefit of the Borrower by the Banks, the parties hereto hereby agree as
follows:
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1. DEFINITIONS
1.1 General Terms. When used herein, the following
capitalized terms shall have the following meanings:
"Acceptable Supplement" shall have the meaning given to that term in
subsection 5.6.
"Accumulated Funding Deficiency" shall mean a funding deficiency
described in Section 302 of ERISA.
"Affiliate" shall mean, as applied to any Person, any other Person
(other than the Borrower or any Subsidiary of Borrower) (a) that directly or
indirectly, through one or more intermediaries, controls or is controlled by, or
is under common control with, the Borrower, (b) that directly or beneficially
owns or holds ten percent (10%) or more of any class of the voting stock (or in
the case of a Person which is not a corporation, ten percent (10%) or more of
the equity interest) of the Borrower or (c) ten percent (10%) or more of whose
voting stock (or in the case of a Person which is not a corporation, ten percent
(10%) or more of the equity interest) is owned directly or beneficially or held
by the Borrower.
"Agent" shall mean UST, acting as agent for the Banks under this
Agreement.
"Agreement" shall mean this Third Amended and Restated Loan Agreement,
together with all exhibits and schedules hereto, as amended, modified,
supplemented, restated or extended from time to time.
"Alternate Base Rate" shall mean, for any day, a rate per annum equal
to the higher of either: (a) the Base Lending Rate, or (b) the Federal Funds
Rate in effect on such day.
"Approval" shall mean each approval, consent, filing or registration by
or with any Federal, state or other regulatory authority necessary to authorize
or permit the execution, delivery or performance of this Agreement or the Loan
Documents or for the validity or enforceability hereof or thereof by the
Borrower and its Affiliates.
"Assignee" shall have the meaning set forth in subsection 10.16.2.
"Assignments of Receivables and Proceeds" shall mean the First Amended
and Restated Assignments of Receivables and Proceeds, dated as of the Closing
Date, by and between the Borrower or the applicable Subsidiary and the Agent,
which are to be executed and delivered in accordance with the provisions of
subsection 4.8 below, as the same may be further amended, reaffirmed, modified,
supplemented, restated or extended from time to time, and any and all other
assignments of receivables and proceeds which may in the future be required to
be executed and delivered by the Borrower or any Subsidiary in favor of the
Agent, in compliance with the provisions of subsection 3.1(b) below.
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"Banks" or "the Banks" shall mean UST, Sumitomo, SSB, BBC, Mellon, BNY
and their respective successors and assigns.
"Basel Accord" shall have the meaning set forth in subsection 2.10.
"Base Lending Rate" shall mean the variable rate of interest, per
annum, most recently announced by UST at its headquarters in Boston,
Massachusetts, as its "base lending rate," with the understanding that UST's
"base lending rate" is one of its interest rates and serves as a basis upon
which effective rates of interest are calculated for loans making reference
thereto and may not be the lowest of UST's interest rates. Any change in the
Base Lending Rate shall be effective as of the effective date stated in the
announcement by UST of such change.
"Borrower" or "the Borrower" shall mean Fine Host Corporation, a
Delaware corporation, and all its successors and assigns.
"Business Day" shall mean except as provided in the LIBOR provisions of
the Notes, any day other than a Saturday, Sunday, public holiday under the laws
of the Commonwealth of Massachusetts, the Commonwealth of Pennsylvania, the
State of Connecticut or the State of New York or other day on which banking
institutions are authorized or are required to be closed in Boston,
Massachusetts, New York, New York, Pittsburgh, Pennsylvania, or Hartford,
Connecticut.
"Cancellation Fee" shall have the meaning given to that term in
subsection 2.8.
"Capital Base" shall mean, at any date as of which determination is
made, the sum of the consolidated Net Worth of the Borrower and its
Subsidiaries, taken as a whole, plus any Subordinated Debt.
"Capital Expenditure" shall mean, for any period, the sum of (a) the
aggregate amount of all expenditures of the Borrower and its Subsidiaries for
fixed or capital assets made during such period which, in accordance with GAAP,
would be classified as capital expenditures, and (b) the aggregate amount of all
Capitalized Lease Obligations during such period.
"Capitalization Period" shall have the meaning given to that term in
subsection 4.5(b).
"Capitalized Lease Obligations" shall mean, for any period, all of the
Borrower's and any Subsidiary's obligations under any lease of property (real,
personal or mixed) or other periodic payment arrangement which have been or
should be capitalized on the Borrower's and Subsidiaries' consolidated balance
sheet in accordance with GAAP, in each case taken at the amount thereof
accounted for as indebtedness, net of interest expense, determined in accordance
with GAAP, the stated maturity of which shall be the date of the last payment of
any amount thereunder prior to the first date upon which such arrangement may be
terminated by the Borrower or its Subsidiaries without payment of any penalty.
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"Cash Equivalent Investment" shall mean, at any time: (i) securities
issued or directly and fully guaranteed or insured by the United States of
America or any agency or instrumentality thereof (provided that the full faith
and credit of the United States of America is pledged in support thereof) having
maturities of not more than one year from the date of acquisition, (ii) time
deposits and certificates of deposit with maturities of not more than 90 days
from the date of acquisition, of (x) any commercial banking institution that is
a member of the Federal Reserve System having capital and surplus in excess of
$500,000,000, whose debt has a rating at the time of any such investment of at
least "A-2" or the equivalent thereof by Standard & Poor's or at least "P-2" or
the equivalent thereof by Moody's or (y) any Bank, (iii) fully secured
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clause (i) entered into with UST, and (iv)
commercial paper issued by (x) the parent corporation of any commercial banking
institution that is a member of the Federal Reserve System having capital and
surplus in excess of $500,000,000 and commercial paper or master notes of
issuers, rated at the time of any such investment at least "A-2" or the
equivalent thereof by Standard & Poor's or at least "P-2" or the equivalent
thereof by Moody's or (y) any Bank, and in each case maturing within 270 days
after the date of acquisition.
"Cash Interest Expense" shall mean, with respect to any Person for any
period, the interest expense of such Person for such period, less all non-cash
items constituting interest expense during such period (including, without
limitation, amortization of debt discounts and payments of interest on
Indebtedness through the issuance of Indebtedness).
"CFM Notes" shall mean the following: (a) a certain Subordinated
Promissory Note, dated as of November 15, 1995, from the Borrower, made payable
to the order of James E. Kern, in the original principal amount of One Million
Four Hundred Forty Thousand and 00/100 Dollars ($1,440,000.00); (b) a certain
Subordinated Promissory Note, dated as of December 8, 1994, from the Borrower,
made payable to the order of James E. Kern, in the original principal amount of
Eighty Thousand and 00/100 Dollars ($80,000.00); (c) a certain Subordinated
Promissory Note, dated as of November 13, 1995, from the Borrower, made payable
to the order of John F. Kusner, in the original principal amount of Seven
Hundred Fifty-Six Thousand and 00/100 Dollars ($756,000.00); and (d) a certain
Subordinated Promissory Note, dated as of December 8, 1994, from the Borrower,
made payable to the order of John F. Kusner, in the original principal amount of
Three Hundred Fifty-Four Thousand and 00/100 Dollars ($354,000.00).
"Change in Control" means a majority of the members of the Board of
Directors of the Borrower are not Continuing Directors.
"Closing" or "Closing Date" shall meaning to that term in subsection
10.23.
"Code" shall mean the Uniform Commercial Code of the Commonwealth of
Massachusetts (or with respect to Collateral in which a Lien may only be
perfected pursuant to the laws of any other state or the District of Columbia,
the Uniform Commercial Code of
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such state or of the District of Columbia), as amended, and any successor
statute of similar import as in effect from time to time.
"Collateral" shall mean all of Borrower's or its Subsidiaries' right,
title, and interest in and to the Collateral, as defined in the applicable
Security Agreement, in or upon which a Lien has been or is granted to the Agent,
as security for the Liabilities, whether under this Agreement, the other Loan
Documents, at law or in equity, or under any other documents, instruments,
agreements or writings delivered to the Agent or any Bank which were executed by
the Borrower, its Subsidiaries, any Affiliate of the Borrower, or any such other
Person.
"Commitments" means the Working Capital Commitment and the Guidance
Line of Credit Commitment.
"Common Shares" means the shares of common stock, $.01 par value per
share, of the Borrower, of which 25,000,000 shares are authorized pursuant to
the certificate of incorporation of the Borrower, as amended through the date
hereof.
"Continuing Director" shall mean and include a member of the Board of
Directors of the Borrower who was (i) a member of the Board of Directors on the
date hereof or (ii) nominated for election or elected to the Board of the
Directors with the affirmative vote of at least two-thirds of (x) members
described in clause (i) or (y) members who were in turn so nominated or so
elected by members described in clause (i) or clause (ii)(x).
"Contract Extension" shall have the meaning given to that term in
subsection 4.5(a).
"Converted Guidance Amount" shall have the meaning given to that term
in subsection 2.2(d).
"Converted Guidance Loan" means any Guidance Loan which has been
converted pursuant to the provisions of the first sentence of subsection 2.2(d).
"Debt" shall mean the total of, without duplication (a) Liabilities
(less the stated undrawn amount of the Letters of Credit issued by UST under
subsection 2.3 or subsection 2.1(a)); (b) all Indebtedness allowed pursuant to
subsection 7.2(c) and (g); (c) any draws under any letter of credit issued by
any Person for the benefit of Borrower or any of its Subsidiaries as account
party; and (d) any such letter of credit which becomes a banker's acceptance.
"Default" shall mean an event which through the passage of time or the
service of notice or both would (assuming no action is taken by the Borrower to
cure the same) mature into an Event of Default.
"Designated Banks" shall have the meaning given such phrase in
subsection 9.2(h).
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"Dollar", "Dollars" and "$" shall mean lawful money of the United
States of America.
"Employment and Labor Agreements" shall have the meaning given to that
term in subsection 5.19(b).
"Environmental Laws" shall mean all Laws relating to health, safety and
environmental matters, including without limitation all Laws relating to the
release, disposal, handling, storage, production, removal, processing or
transporting of Hazardous Substances. Such Laws include but are not limited to
the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. ss.6901 et seq as
amended; the Comprehensive Environmental Response, Compensation and Liability
Act ("CERCLA"), 42 U.S.C. ss.9601 et seq, as amended; the Toxic Substance Act,
15 U.S.C. ss.2601 et seq , as amended, the Clean Water Act, 33 U.S.C. ss.466 et
seq, as amended; the Clear Air Act, 42 U.S.C. ss.7401 et seq, as amended; state
and federal superlien and environmental laws and regulations, including cleanup
programs; and United States Department of Transportation regulations.
"Environmental Notice" shall mean any summons, citation, directive,
information request, notice of potential responsibility, notice of violation or
deficiency, order, claim, complaint, investigation, proceeding, judgment, letter
or other communication, written or oral, actual or threatened, from the United
States Environmental Protection Agency or other federal, state or local agency
or authority, or any other entity or individual, public or private, concerning
(i) any intentional or unintentional act or omission which involves Management
of Hazardous Substances either on or off any property owned or leased by the
Borrower or any Subsidiary of the Borrower; (ii) the imposition of any Lien on
such property, including but not limited to Liens asserted by government
entities in connection with Responses to the presence or Release of Hazardous
Substances; and (iii) any alleged violation of or responsibility under
Environmental Laws.
"Equipment" shall mean all of the Borrower's or its Subsidiaries'
right, title, and interest in and to equipment (as defined in the Code),
including without limitation machinery, furniture, Vehicles and fixtures and
other tangible personal property other than Inventory, whether located on
premises owned, leased or occupied by the Borrower or located elsewhere,
together with any and all accessions, parts and appurtenances thereto, whether
now owned or hereafter acquired and owned by the Borrower, including all right,
title, and interest of Borrower and its Subsidiaries to any Equipment used in
connection with or under a Facility Agreement.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended, and any successor statute of similar import, and regulations and
rulings thereunder, in each case as in effect from time to time. References to
sections of ERISA shall be construed to refer to any successor sections.
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"ERISA Affiliate" shall mean each trade or business, including the
Borrower, whether incorporated or not, which together with the Borrower would be
treated as a single employer under Section 4001 of ERISA.
"ERISA Termination Event" shall mean (a) the occurrence of a Reportable
Event or a Prohibited Transaction, (b) the complete or partial withdrawal (as
defined in Sections 4203 and 4205 of ERISA) by the Borrower or any ERISA
Affiliate from a Multiemployer Plan, or the receipt by the Borrower or any ERISA
Affiliate of a demand from any Multiemployer Plan for withdrawal liability, (c)
the filing of a notice of intent to terminate any Plan or the treatment of a
plan amendment as a termination of any such Plan under Section 4041 of ERISA,
(d) as soon as the Borrower or any ERISA Affiliate has knowledge thereof, any
action causing termination under Section 4041A of ERISA of any Multiemployer
Plan, (e) as soon as the Borrower or any ERISA Affiliate has knowledge thereof,
the institution of proceedings to terminate any Plan or Multiemployer Plan by
the PBGC under Section 4042 of ERISA, or (f) the occurrence of any other event
or condition which might constitute grounds under Sections 4041A or 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any
Plan.
"Event of Default" shall have the meaning given to that term in
subsection 8.1 hereof.
"Existing Loan Agreement" shall have the meaning given that term in the
first paragraph of Preliminary Statements of this Agreement.
"Facility Agreements" shall mean all concession, license or management
agreements to which the Borrower or any of its Subsidiaries is currently or
hereafter becomes a party, and pursuant to which the Borrower or any such
Subsidiary has agreed (a) to provide food and beverage services at certain
facilities described therein, (b) to operate and otherwise use food, beverage
and liquor licenses at such facilities, or (c) to manage certain concession and
food service areas at such facilities whether such facilities or locations are
owned by the Borrower, any Affiliate of the Borrower, or any other Person.
"Federal Funds Rate" shall mean, for any day, the weighted average of
the rates on overnight Federal funds transactions with the members of the
Federal Reserve System arranged by Federal funds brokers, as published for such
day (or if such day is not a Business Day, for the immediately preceding
Business Day) by the Federal Reserve Bank of Boston, or if such rate is not so
published for any day which is a Business Day, the average of quotations for
such day on such transactions received by the Agent from three Federal funds
brokers of recognized standing selected by the Agent.
"Financials" shall have the meaning set forth in subsection 5.4 hereof.
"Fixed Charges" shall mean, for any period, the sum of (i) all
regularly scheduled payments of principal on Indebtedness of the Borrower and
its Subsidiaries made or required to be made in such period, (ii) payments under
Capitalized Lease Obligations made or
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required to be made in such period, and (iii) Cash Interest Expense of Borrower
and its Subsidiaries.
"GAAP" shall mean generally accepted accounting principles, as
promulgated by the Financial Accounting Standards Board or other successor
governing body, as in effect from time to time, consistently applied.
"Guaranties" shall mean the Unlimited Guaranties and the Limited
Guaranties.
"Guarantor" shall mean any guarantor of all or any part of the
Liabilities, including without limitation, the Subsidiaries and the Limited
Guarantors.
"Guidance Line Conversion Dates" means and includes any and all of the
following dates: September 30, 1997, December 31, 1998, April 30, 1999, and any
date on which the aggregate outstanding principal amount of all Unconverted
Guidance Loans is Twenty Million and 00/100 Dollars ($20,000,000.00) or more.
"Guidance Line of Credit" shall have the meaning given to such term
under subsection 2.2.
"Guidance Line of Credit Commitment" shall have the meaning set forth
in subsection 2.2(a).
"Guidance Loans" shall have the meaning given that term in subsection
2.2.
"Guidance Notes" shall mean the Commercial Promissory Notes evidencing
the Guidance Loans, which are to be executed and delivered by the Borrower
pursuant to the provisions of subsection 2.2 below, as the same may be amended,
modified, supplemented, restated or extended from time to time.
"Hazardous Substances" shall mean hazardous substances, hazardous
wastes, hazardous waste constituents, hazardous materials, pesticides, oil and
other petroleum products, and toxic substances, including asbestos and PCBS, as
those terms are defined pursuant to Environmental Laws.
"Impermissible Qualification" means, relative to the opinion or
certification of any independent public accountant as to any financial statement
of the Borrower, any qualification or exception to such opinion or certification
(a) which is of a "going concern" or similar nature;
(b) which relates to the limited scope of examination of matters
relevant to such financial statement; or
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(c) which relates to the treatment or classification of any item in
such financial statement and which, as a condition to its removal, would require
an adjustment to such item the effect of which would be to cause the Borrower to
be in default of any of its obligations under subsection 6.1 below.
"Indebtedness" shall mean without duplication, with respect to any Person:
(a) all obligations of such Person for borrowed money (including all
notes payable and drafts accepted representing extensions of credit) and all
obligations evidenced by bonds, debentures, notes or other similar
instruments on which interest charges are customarily paid;
(b) all obligations, contingent or otherwise, relative to the face
amount of all letters of credit, whether or not drawn, and banker's
acceptances issued for the account of such Person;
(c) all other items
(i) which, in accordance with GAAP, would be included as
liabilities on the liability side of the balance sheet of such
Person (including any leasing or similar arrangement which is
classified as a capitalized lease) as of the date at which
Indebtedness is to be determined, and
(ii) which are incurred as a financing, whether or not in
the ordinary course of business;
(d) whether or not so included as liabilities in accordance with
GAAP,
(i) all obligations of such Person to pay the deferred
purchase price of property or services and indebtedness (excluding prepaid
interest thereon) secured by a Lien on property owned or being purchased by
such Person (including indebtedness arising under conditional sales or other
title retention agreements), whether or not such indebtedness shall have been
assumed by such Person or is limited in recourse; provided, however, that,
for purposes of determining the amount of any Indebtedness of the type
described in this clause, if recourse with respect to such Indebtedness is
limited to such property, the amount of such Indebtedness shall be limited to
the fair market value of such property; and
(ii) all guaranties made by such Person; and
(e) net obligations under interest rate swap, exchange or cap
agreements.
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"Insolvent" or "Insolvency" shall mean, with respect to any Person,
when any of the following events shall have occurred in respect of such Person:
admission in writing of its inability, or its general inability, to pay its
debts as they become due, dissolution, termination of existence, cessation of
normal business operations (other than a temporary cessation due to fire or
other casualty, acts of God, strike or other event not within the control of
such Person), insolvency, appointment of a receiver for any material part of the
property of, legal or equitable assignment, conveyance or transfer of, all or
substantially all of the property for the benefit of creditors by, or a
commencement of any proceedings under any bankruptcy or insolvency Laws or any
Laws relating to the relief of debtors, readjustment of Indebtedness,
reorganization, composition or extension by or against such Person, but shall
not include transactions permitted under subsection 7.3 .
"Inventory" shall mean all of the right, title, and interest of the
Borrower or any of its Subsidiaries in and to any and all inventory (as defined
in the Code), including without limitation, goods in transit, wheresoever
located, whether now owned or hereafter acquired and owned by the Borrower or
its Subsidiaries, which are held for sale or lease, furnished under any contract
of service or held as raw materials, work-in-process or supplies, and all
materials used or consumed in the Borrower's or such Subsidiary's business, and
shall include such property the sale or other disposition of which has given
rise to accounts receivable and which has been returned to, or repossessed or
stopped in transit by, the Borrower or any such Subsidiary.
"Investment" shall mean relative to any Person,
(a) any loan or advance made by such Person to any other
Person (excluding commission, travel and similar advances to officers
and employees made in the ordinary course of business);
(b) any payment made with respect to a Facility Agreement that
is required to be capitalized or is otherwise capitalized as a contract
right pursuant to GAAP;
(c) any guaranty of such Person; and
(d) any ownership or similar interest held by such Person in
any other Person.
The amount of any Investment shall be the original principal or capital amount
thereof less all returns of principal or equity thereon (and without adjustment
by reason of the financial condition of such other Person) and shall, if made by
the transfer or exchange of property other than cash, be deemed to have been
made in an original principal or capital amount equal to the fair market value
of such property.
"Issuing Bank" shall mean UST, as the issuer of Letters of Credit under
Section 2.3 hereof, together with its successors and assigns in such capacity.
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"Joint Venture Interests" shall mean any interests in any joint
venture, partnership or trust which are, at the time, either directly or
indirectly, owned by the Borrower or any of its Subsidiaries, and which are more
than fifty percent (50%) of all of the outstanding interests of such joint
venture, partnership or trust.
"Joint Venture Pledge Agreements" shall mean the First Amended and
Restated Joint Venture Pledge Agreements, each dated as of the Closing Date, by
and between the Borrower and the Agent, which are to be executed and delivered
in accordance with the provisions of subsection 4.8 below, as the same may be
further amended, reaffirmed, modified, supplemented, restated or extended from
time to time, and any and all other pledge agreements which may in the future be
required to be executed and delivered by the Borrower or any Subsidiary in favor
of the Agent, in compliance with the provisions of subsection 3.1(f) below.
"Law" shall mean any law (including common law), constitution, statute,
treaty, regulation, rule, ordinance, order, injunction, writ, decree, judgment
or award of any governmental body (including, without limitation, any court or
any administrative or regulatory agency).
"Letter of Credit Liability" shall mean, without duplication, at any
time and in respect of any Letter of Credit, the sum of (a) the undrawn face
amount of such Letter of Credit plus (b) the aggregate unpaid principal amount
of all Reimbursement Obligations of the Borrower at such time due and payable in
respect of all drawings made under such Letter of Credit.
"Letter of Credit" or "Letters of Credit" shall mean any one or more of
the letters of credit to be issued by the Agent under subsection 2.1(a) or
subsection 2.3, which shall be acceptable to the proposed beneficiary, and
reference herein to "principal amount" of such letters of credit shall mean the
initial principal amount thereof, whether drawn or undrawn.
"Letter of Credit Line" shall mean the credit facility which the Banks
extend to the Borrower under subsection 2.3.
"Letter of Credit Loan" shall have the meaning given to that term in
subsection 2.3.
"Liabilities" shall mean all of the Borrower's and its Subsidiaries'
liabilities, obligations, and indebtedness to the Banks or the Banks'
Affiliates, of any and every kind and nature, whether heretofore, now or
hereafter owing, arising, due or payable and howsoever evidenced, created,
incurred, or acquired, whether primary, secondary, direct or indirect, absolute
or contingent, fixed or otherwise (including obligations of performance under
and the requirement to reimburse draws on Letters of Credit) and whether arising
or existing under written agreement or by operation of Law as a result of the
Borrower's and its Subsidiaries' Indebtedness and obligations to the Banks under
this Agreement or any of the other Loan Documents, as they may be amended,
modified, supplemented, restated or extended from time to time.
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"LIBOR" shall have the meaning given that term in the Notes.
"License or Licenses" shall have the meaning given to that term in
subsection 5.20(b).
"Lien" shall mean any mortgage, deed of trust, pledge, lien, security
interest, charge or encumbrance or security arrangement of any nature
whatsoever, whether arising by written or oral agreement or by operation of Law,
including but not limited to any conditional sale or title retention
arrangement, and any assignment, deposit arrangement or lease intended as, or
having the effect of, security.
"Limited Guaranties" shall mean the First Amended and Restated Limited
Guaranties, each dated as of the Closing, from each of the Orange County Joint
Venture and the Oregon Joint Venture, in favor of the Banks, which are to be
executed and delivered in accordance with the provisions of subsection 4.8
below, as the same may be further reaffirmed, amended, modified, supplemented,
restated or extended from time to time and any and all other limited guaranties
which may in the future be executed and delivered by any Person in favor of the
Banks.
"Limited Guarantors" shall mean each of the Orange County Joint Venture
and the Oregon Joint Venture, and any and all other Persons who may in the
future execute and deliver, Limited Guaranties in favor of the Banks.
"LLC Pledge Agreements" shall mean the First Amended and Restated LLC
Pledge Agreement, dated as of the Closing Date, by and between the Borrower and
Agent, which is to be executed and delivered in accordance with the provisions
of subsection 4.8 below, as the same may be further amended, reaffirmed,
modified, supplemented, restated or extended from time to time, and any and all
other pledge agreements which may in the future be required to be executed and
delivered by the Borrower or any Subsidiary in favor of the Agent, in compliance
with the provisions of subsection 3.1(g) below.
"Loan Account" shall mean the account on the books of the Agent in
which will be recorded Loans and advances made to the Borrower, issued by the
Agent to, or for the benefit of, the Borrower pursuant to this Agreement or any
of the other Loan Documents, payments made on such Loans and other appropriate
debits and credits as provided by this Agreement or any of the other Loan
Documents.
"Loan" or "Loans" shall mean one or more advances made to the Borrower
pursuant to Section 2 and the issuance of Letters of Credit (whether drawn or
undrawn) pursuant to Section 2.
"Loan Documents" shall mean this Agreement, the Notes, the Letters of
Credit, and all agreements, instruments and documents referenced in Section 3
hereof and any related subordination agreements, intercreditor agreements,
powers of attorney, consents, security agreements or financing statements,
whether heretofore, now, or hereafter executed by or on
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behalf of the Borrower, any Subsidiary of the Borrower, any Affiliate of the
Borrower, any Guarantor or any other Person and delivered to the Agent or any
Bank in connection with the Loans, all as may be amended, modified,
supplemented, restated or extended from time to time.
"Loan Participants" shall have the meaning set forth in subsection
10.16.1.
"Manage" or "Management" shall mean to generate, handle, manufacture,
process, treat, store, use, re-use, refine, recycle, reclaim, blend or burn for
energy recovery, incinerate, accumulate speculatively, transport, transfer,
dispose of, Release, threaten to Release or abandon Hazardous Substances.
"Material Adverse Effect" or "Material Adverse Change" shall mean, with
respect to any Person, an effect, resulting from any occurrence of whatever
nature (including, without limitation, any adverse determination in litigation,
arbitration or governmental investigation or proceeding), materially adverse to
the business, financial condition, operations or prospects of such Person and
its Subsidiaries, taken as a whole.
"Membership Interests" shall mean any membership interests in any
limited liability company which are, at the time, either directly or indirectly,
owned by the Borrower or any of its Subsidiaries, and which are more than fifty
percent (50%) of all of the outstanding membership interests of such limited
liability company.
"Moody's" shall mean Moody's Investors Service, Inc. or any other
entity succeeding to any or all of its functions.
"Multiemployer Plan" shall mean any "multiemployer plan" within the
meaning of Section 3(37) of ERISA and to which the Borrower or any ERISA
Affiliate has or had any obligation to contribute.
"NASD" shall mean the National Association of Securities Dealers, Inc.
or any other entity succeeding to any or all of its functions.
"Net Contract Proceeds" shall mean, with respect to the sale,
cancellation, termination or other discontinuation of any Facility Agreement
with any Person at any time, the sum of (a) (i) the gross cash proceeds received
by the Borrower or any of its Subsidiaries from or on account of such Person as
a result thereof and, without duplication, (ii) all payments received by the
Borrower or any of its Subsidiaries on account of Indebtedness owing to any of
them from such Person (including payments on Notes Receivable) less (b) (i) all
reasonable legal, accounting and other professional fees, costs and expenses
incurred in connection therewith, (ii) all taxes actually paid or estimated by
the Borrower (in good faith) to be payable in connection therewith and (iii) all
payments made at such time (and not at any earlier time) by the Borrower or any
of its Subsidiaries to such Person in order to repay or otherwise retire
Indebtedness incurred in connection with such Facility Agreement.
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"Net Income" or "Net Loss" for any fiscal period of the Borrower shall
mean income or loss of the Borrower and its Subsidiaries, taken as a whole,
after deduction of all expenses, taxes and other proper charges, as would be set
forth on a consolidated income statement of the Borrower and its Subsidiaries
for such fiscal period, prepared in accordance with GAAP.
"Net Worth" shall mean, at any time, the excess by which the value of
all of the assets of Borrower and its Subsidiaries, taken as a whole, exceeds
the total of all the liabilities of the Borrower and its Subsidiaries, taken as
a whole, as determined on a consolidated basis, in accordance with GAAP.
"New Project" shall have the meaning given to that term in subsection
4.5(a).
"Northwest Acquisition Indebtedness" means the Indebtedness of the
Borrower to Robert F. Barney in the original principal amount of One Million
Three Hundred Fifty Thousand and 00/100 Dollars ($1,350,000.00).
"Notes" shall mean the Working Capital Notes and the Guidance Notes.
"Notes Receivable" shall mean any promissory note (or related bond or
letter of credit), or similar agreement or arrangement by any Person to pay
money to the Borrower or any of its Subsidiaries under the terms of or in
connection with a Facility Agreement.
"Offshore Subsidiary" means a Subsidiary of the Borrower which is
established, organized or otherwise formed outside the United States of America.
"Ongoing Investments" shall have the meaning given to that term in
subsection 7.6.
"Operating Cash Flow" shall mean, for the Borrower and its consolidated
Subsidiaries, determined in accordance with GAAP, earnings before interest
expense, depreciation and amortization (net of all applicable cash taxes), less
the following (net of all applicable cash taxes): (i) any reversal of any
contingency reserve (other than as allowed by GAAP), (ii) all extraordinary
gains and losses, (iii) all gains and losses from acquisitions, sales, exchanges
and dispositions of property not in the ordinary course of business, (iv) any
gain or loss arising from the collection of the proceeds of any insurance
policy, (v) any gain or loss resulting from the write-up of any property and
(vi) any non-recurring credit or charge items.
"Orange County Joint Venture" means Fine Host/R&N/A Cup Above Joint
Venture, a joint venture organized pursuant to a certain Joint Venture
Agreement, dated 1994, by and among (a) the Borrower, (b) Ronald O. Rogers and
Tyrone W. Nabbie d/b/a R&N Management Services and (c) Ellen Korbin d/b/a A Cup
Above.
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"Oregon Joint Venture" means Fine Host/S. Brooks & Associates Joint Venture
, a joint venture organized pursuant to a certain Joint Venture Agreement, dated
May, 1995, by and between the Borrower and S. Brooks & Associates, Inc. an
Oregon corporation.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
under Title IV of ERISA or any other governmental agency, department or
instrumentality succeeding to the functions of said corporation.
"Person" shall mean any individual, sole proprietorship, partnership,
limited liability company, joint venture, trust, unincorporated organization,
association, corporation, institution, entity, party, or government (whether
national, federal, state, provincial, county, city, municipal or otherwise,
including without limitation any instrumentality, division, agency, body or
department thereof).
"Plan" shall mean any employee pension or benefit plan (other than a
Multiemployer Plan) to which Section 4021(a) of ERISA applies and (a) which is
maintained for employees of the Borrower or any of its ERISA Affiliates; or (b)
to which the Borrower or any of its ERISA Affiliates made, or was required to
make, contributions at any time within the preceding five years.
"Pledge Agreements" shall mean the Stock Pledge Agreements, the Joint
Venture Pledge Agreements and the LLC Pledge Agreements.
"Prohibited Transaction" shall mean with respect to any Plan any
transaction described in Section 406 of ERISA which is not exempt by reason of
Section 408 of ERISA or the transitional rules set forth in Section 414(c) of
ERISA and any transaction described in Section 4975(c)(1) of the Tax Code which
is not exempt by reason of Section 4975(c)(2) or Section 4975(d) of the Tax
Code, or the transitional rules of Section 2003(c) of ERISA.
"Project Costs" shall mean, with respect to any New Project or Contract
Extension (as defined in subsection 4.5), the sum of the following items, to the
extent required by the Facility Agreement associated with the New Project or
Contract Extension: (a) Capital Expenditures, in accordance with GAAP, (b) costs
capitalized as contract rights pursuant to GAAP, and (c) Notes Receivable.
"Register" shall have the meaning set forth in subsection 10.16.3.
"Registration Statement" shall have the meaning set forth in subsection
5.16.
"Regulatory Change" shall mean, with respect to any Bank, any change
after the date of this Agreement in Federal, state or foreign law or regulations
(including, without limitation, Regulation D of the Federal Reserve Board) or
the adoption or making after such date of any interpretation, directive or
request applying to a class of banks including such Bank of or under any
Federal, state or foreign law or regulations (whether or not having the
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force of law and whether or not failure to comply therewith would be unlawful)
by any court or governmental or monetary authority charged with the
interpretation or administration thereof.
"Reimbursement Obligations" shall mean, at any time, the obligations of
the Borrower then outstanding, or that may thereafter arise in respect of all
Letters of Credit then outstanding, to reimburse amounts paid by the Issuing
Bank in respect of any drawings under a Letter of Credit.
"Release" shall mean any actual or threatened spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injection, escaping,
leaching, dumping or disposing of Hazardous Substances into the environment, as
the term 'environment' is defined in CERCLA.
"Reportable Event" shall mean (a) a reportable event described in
Section 4043 of ERISA and regulations thereunder, for which the obligation to
give notice to the PBGC has not been waived by the PBGC in accordance with
applicable regulations, (b) a withdrawal by a substantial employer from a
single-employer plan which is a Plan and which has two or more contributing
sponsors at least two of which are not under common control, as referred to in
Section 4063(b) of ERISA, or (c) a cessation of operations at a facility causing
more than twenty percent of plan participants to be separated from employment,
as referred to in Section 4068(f) of ERISA.
"Respond" or "Response" shall mean any action taken pursuant to
Environmental Laws to correct, remove, remediate, clean up, prevent, mitigate,
monitor, evaluate, investigate or assess the Release of a Hazardous Substance.
"SEC" shall mean the United States Securities and Exchange Commission
or any other federal governmental agency which may hereafter perform its
functions.
"Securities Laws" shall have the meaning given to that term in
subsection 5.25.
"Security Agreements" shall mean the First Amended and Restated
Security Agreements - All Property, each dated as of the Closing Date, by and
between the Borrower or the applicable Subsidiary and the Agent, which are to be
executed and delivered in accordance with the provisions of subsection 4.8
below, as the same may be further amended, reaffirmed, modified, supplemented,
restated or extended from time to time, and any and all other security
agreements which may in the future be required to be executed and delivered by
the Borrower or any Subsidiary in favor of the Agent, in compliance with the
provisions of subsection 3.1(a) below.
"Special Events" shall have the meaning given to that term in
subsection 4.5(c).
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"Special Texas Corporations" shall mean (a) Convention Beverages, Inc.,
a Texas corporation, (b) Fine Host of Texas, Inc., a Texas corporation, and (c)
each other company incorporated under the laws of the State of Texas in which
the Borrower enters into an arrangement, on terms reasonably satisfactory to the
Agent, for substantially the same purpose that it has entered into Texas
Management Agreements with the corporations referred to in clauses (a) and (b)
of this definition.
"Standard & Poor's" means Standard & Poor's Corporation or any other
entity succeeding to any or all of its functions.
"Stock" shall mean the capital stock of the Borrower and warrants,
options, or other rights to purchase or acquire the capital stock of the
Borrower.
"Stock Pledge Agreements" shall mean , the First Amended and Restated
Stock Pledge Agreement, dated as of the Closing Date, by and between the
Borrower and the Agent, which is to be executed and delivered in accordance with
the provisions of subsection 4.8 below, as the same may be further amended,
reaffirmed, modified, supplemented, restated or extended from time to time, and
any and all other stock pledge agreements which may in the future be required to
be executed and delivered by the Borrower or any Subsidiary in favor of the
Agent, in compliance with the provisions of subsection 3.1(e) below.
"Subordinated Debt" shall mean liabilities, if any, of the Borrower or
any of its Subsidiaries which are subordinated to the Liabilities upon such
terms and conditions as are satisfactory to the Designated Banks in their sole
discretion, including but not limited to the Indebtedness under the CFM Notes,
the Northwest Acquisition Indebtedness and the SWSI Acquisition Indebtedness,
which the Banks hereby acknowledge are upon terms and conditions satisfactory to
the Banks.
"Subordinated Debt Documents" shall mean all documents evidencing,
securing, or related to the Subordinated Debt.
"Subsidiary" shall mean, at any time, any corporation of which at least
50 percent of the issued and outstanding capital stock having ordinary voting
power to elect a majority of the board of directors or other governing body of
such corporation (irrespective of whether at the time stock of any other class
or classes of such corporation shall have or might have voting power by reason
of the happening of any contingency) is at the time, directly or indirectly,
owned by the Borrower or any of its Subsidiaries, or any partnership or joint
venture of which more than fifty percent (50%) of the outstanding equity
interests is at the time, directly or indirectly, owned by the Borrower or any
of its Subsidiaries, including without limitation, each of the Orange County
Joint Venture and the Oregon Joint Venture.
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"Subsidiary Stock" shall mean the capital stock of each of the
Subsidiaries and warrants, options, or other rights to purchase or acquire the
capital stock of each of the Subsidiaries.
"SWSI Acquisition Indebtedness" means (i) the Indebtedness of the
Borrower to William S. Smitherman and Joann McBride Smitherman in the original
principal amount of One Million Three Hundred Fifty Thousand and 00/100 Dollars
($1,350,000.00), and (ii) the Indebtedness of the Borrower to Edward G. Enos in
the original principal amount of Six Hundred Thirty-Seven Thousand Five Hundred
and 00/100 Dollars ($637,500.00).
"Tangible Capital Base" shall mean Net Worth, plus Subordinated Debt,
less intangibles (including without limitation, all contract rights other than
those contract rights which any of the clients or customers of the Borrower or
its Subsidiaries are obligated to repurchase upon the terms and conditions of
any applicable Facility Agreements) calculated in accordance with GAAP.
"Tax Code" shall mean the Internal Revenue Code of 1986, as amended,
and any successor statute of similar import, and rules and regulations
thereunder, in each case as in effect from time to time. References to sections
of the Tax Code shall be construed to refer to any successor sections as well.
"Termination Date" shall have the meaning set forth in subsection 2.8
hereof.
"Texas Management Agreements" shall mean, collectively, the Management
Services Agreement, dated May 20, 1992, between Convention Beverages, Inc. and
the Borrower and the Management Services Agreement, dated January 31, 1991,
between Fine Host of Texas, Inc. and the Borrower, and each other management
services agreement, reasonably satisfactory to the Designated Banks, entered
into with any corporation referred to in clause (c) of the definition of Special
Texas Corporations, as each of such agreements may be amended, modified,
supplemented, restated or extended from time to time.
"Unconverted Guidance Loan" means any Guidance Loan which is not a
Converted Guidance Loan.
"Unlimited Guaranties" shall mean the First Amended and Restated
Unlimited Guaranties, each dated as of the Closing Date, from each of the
Subsidiaries (other than the Orange County Joint Venture and the Oregon Joint
Venture) in favor of the Banks, which are to be executed and delivered in
accordance with the provisions of subsection 4.8 below, as the same may be
further amended, reaffirmed, modified, supplemented, restated or extended from
time to time, and any and all other unlimited guaranties which may in the future
be required to be executed and delivered by any Subsidiary (other than the
Orange County Joint Venture and the Oregon Joint Venture) in favor of the Banks,
in compliance with the provisions of subsection 3.1(c) below.
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"Vehicles" shall mean any of the Borrower's rolling stock, motor
vehicles or other movable goods required by applicable Law in any jurisdiction
where the Borrower does business to be registered or titled.
"Working Capital Commitment" shall have the meaning set forth in subsection
2.1(a).
"Working Capital Line" shall mean the credit facility which the Banks
extend to the Borrower under subsection 2.1.
"Working Capital Loans" shall mean at any time, the aggregate principal
amount, at such time, of the outstanding advances of the Banks to the Borrower
under subsection 2.1.
"Working Capital Notes" shall mean the Commercial Promissory Notes
evidencing the Working Capital Loans, which are to be executed and delivered by
the Borrower pursuant to the provisions of subsection 2.1 below, as the same may
be amended, modified, supplemented, restated or extended from time to time.
1.2 Accounting Terms. Any accounting terms used in this Agreement which are
not specifically defined herein shall have the meanings customarily given to
such terms in accordance with GAAP.
1.3 Other Terms Defined in the Uniform Commercial Code. All terms
contained in this Agreement (and which are not otherwise specifically defined
herein) shall have the meanings provided by the Code to the extent the same are
used or defined therein.
1.4 Construction. Unless the context of this Agreement otherwise
clearly requires, references to the plural include the singular, references to
the singular include the plural, the term "including" is not limiting, and the
term "or" has the inclusive meaning represented by the phrase "and/or". The
terms "hereof," "herein," "hereunder" and similar terms in this Agreement refer
to this Agreement as a whole and not to any particular provision of this
Agreement. Section, subsection, clause, exhibit and schedule references are to
this Agreement unless otherwise specified.
2. LOANS.
2.1 Working Capital Loans.
(a) Subject to the terms and conditions hereof and in reliance upon the
representations and warranties of the Borrower and its Subsidiaries to the
Banks, the Banks hereby establish a line of credit facility in favor of the
Borrower in the maximum principal amount of Twenty Million and 00/100 Dollars
($20,000,000.00) (the "Working Capital Line"). Each Loan made under the Working
Capital Line (other than use of such line for one or more Letters of Credit as
provided herein) shall be referred to as a "Working Capital
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Loan". Prior to the Termination Date, upon the Borrower's request made in the
manner set forth in subsection 4.1 and subject to the terms and conditions of
Section 4, the Banks will make Working Capital Loans to the Borrower in such
amounts as may be requested by the Borrower, up to a total outstanding principal
indebtedness under such Working Capital Loans (and any Letters of Credit issued
pursuant to this subsection 2.1(a)) at any time of Twenty Million and 00/100
Dollars ($20,000,000.00); provided that in no event shall the aggregate
principal amount of Working Capital Loans, together with the aggregate principal
amount of all Letter of Credit Liabilities, made by each Bank exceed the
principal amount of such Bank's Working Capital Note(s) as set forth in Section
2.1(c) below. In addition, provided (i) there is no Default or Event of Default
hereunder, (ii) the amount outstanding under the Working Capital Line is less
than Twenty Million Dollars ($20,000,000.00)(the "Working Capital Commitment"),
and (iii) the Borrower is in compliance with the requirements of Section 4 (and,
with respect to the requested Letter of Credit, subsection 2.3), then the
Borrower may request and UST shall issue one or more Letters of Credit in
compliance with subsection 2.3 and Section 4, in an aggregate amount for all
such Letters of Credit not to exceed at any time the lesser of (x) Five Million
and 00/100 Dollars ($5,000,000.00) and (y) the difference between the
outstanding principal indebtedness under the Working Capital Loans and Twenty
Million and 00/100 Dollars ($20,000,000.00).
(b) Prior to the Termination Date, the Borrower may pay or prepay
without penalty or premium all or any portion of the Working Capital Loans made
from time to time hereunder, and subject to the terms and conditions herein
provided, may reborrow the amounts so paid or prepaid as provided in subsection
2.1(a). The Borrower agrees that if at any time the sum of the outstanding
principal amount of all Working Capital Loans and Letters of Credit Liabilities
issued pursuant to subsection 2.1(a) shall exceed at any time the Working
Capital Commitment, the Borrower shall immediately pay the Agent for the benefit
of the Banks such amount as is necessary to eliminate such excess.
(c) The Working Capital Loans made to the Borrower by the Banks shall
be evidenced by six (6) Working Capital Notes (substantially in the form
attached hereto as Exhibit A), three of which are each in the principal amount
of Four Million and 00/100 Dollars ($4,000,000.00) and made payable to UST,
Sumitomo and SSB, respectively and three of which are each in the principal
amount of Two Million Six Hundred Sixty-Six Thousand Six Hundred Sixty-Six and
66/100 Dollars ($2,666,666.66) and made payable to BBC, Mellon and BNY,
respectively. The outstanding principal, and all accrued and unpaid interest and
other charges thereon or incurred in respect thereof, shall be due and payable
upon the Termination Date. Each Working Capital Note shall bear interest
(computed on the basis of the actual number of days elapsed over a 360-day year)
on the unpaid principal amount thereof at a rate selected by the Borrower and
equal (i) to LIBOR for 30, 90 or 180 days plus two percent (2.00%) or (ii) to
the Alternate Base Rate, all as specified in each Working Capital Note. Subject
to the terms and conditions contained in the Working Capital Notes, the Borrower
shall designate, from time to time, the portions of outstanding principal of the
Working Capital Loans which will accrue interest at LIBOR, and all other
principal
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under the Working Capital Loans not so designated shall accrue interest at
the Alternate Base Rate. Interest on all Working Capital Loans evidenced by the
Working Capital Notes shall be payable in arrears, as provided in the Working
Capital Notes.
(d) The Agent may, at its sole discretion, directly charge the Working
Capital Line for any fees owed to the Banks pursuant to this Agreement, or any
past due interest payments (after any applicable grace periods) owed to the
Banks pursuant to this Agreement, with notice to the Borrower at the time of
such charge. Provided there then exists no Event of Default, prior to directly
charging the Working Capital Line, the Agent shall give the Borrower not less
than fifteen (15) days prior notice of any fees due to the Banks and payable by
the Borrower as a result of services of any Person other than the Banks or their
direct employees.
(e) The proceeds of the Working Capital Loans shall be used solely for
the general corporate purposes of the Borrower and its Subsidiaries in the
ordinary course of their business (which shall include the reimbursement of any
Letter of Credit Loan) and for Letters of Credit issued pursuant to subsection
2.1(a), but in no event shall such proceeds be used for the payment of any of
the following:
(i) The payment of principal on any loan (other than a Letter of Credit
Loan hereunder), whether to the Banks or any other Person;
(ii) For ProjectCosts funded by the proceeds of a Guidance Loan; or
(iii) Distributions or payments which are prohibited or restricted
(including payments which require the Banks to authorize such payments and which
have not been authorized) under the terms of this Agreement.
2.2 Guidance Loans.
(a) Subject to the terms and conditions hereof and in reliance upon the
representations and warranties of the Borrower and its Subsidiaries to the
Banks, the Banks hereby establish a guidance line of credit facility (the
"Guidance Line of Credit") in favor of the Borrower in the maximum principal
amount of Fifty-Five Million and 00/100 Dollars ($55,000,000.00)(as the same may
be reduced from time to time pursuant to the provisions of subsection 2.2(d)
below, the "Guidance Line of Credit Commitment"). Each Loan made under the
Guidance Line of Credit shall be referred to as a "Guidance Loan". Prior to the
Termination Date, upon the Borrower's request made in the manner set forth in
subsection 4.5 and subject to the terms and conditions of Section 4, the Banks
will make Guidance Loans to the Borrower in such amounts as may be requested by
the Borrower, up to a total outstanding principal indebtedness under such
Guidance Loans at any time of not more than the Guidance Line of Credit
Commitment.
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(b) Prior to the Termination Date, the Borrower may pay or prepay
without penalty or premium all or any portion of the Guidance Loans made from
time to time hereunder, and subject to the terms and conditions herein provided,
may reborrow the amounts so paid or prepaid. The Borrower agrees that if at any
time the sum of the outstanding principal amount of all the Guidance Loans shall
exceed at any time the Guidance Line of Credit Commitment, the Borrower shall
immediately pay the Agent for the benefit of the Banks such amount as is
necessary to eliminate such excess. In addition, Guidance Loans shall be prepaid
in accordance with the terms of subsections 6.8 and 6.16 of this Agreement.
(c) The Guidance Loans made to the Borrower by the Banks shall be
evidenced by six (6) Guidance Notes (substantially in the form attached hereto
as Exhibit B), three of which are each in the principal amount of Eleven Million
and 00/100 Dollars ($11,000,000.00) and made payable to UST, Sumitomo and SSB,
respectively and three of which are each in the principal amount of Seven
Million Three Hundred Thirty-Three Thousand Three Hundred Thirty-Three and
33/100 Dollars ($7,333,333.33) and made payable to BBC, Mellon and BNY,
respectively. Up to a Guidance Line Conversion Date, interest on the Unconverted
Guidance Loans (computed on the basis of the actual number of days elapsed over
a 360-day year) shall accrue on the unpaid principal amount thereof at a rate
equal to the Alternate Base Rate in effect from time to time plus one-half
percent (0.5%). Until a Guidance Line Conversion Date, no principal shall be due
and payable on Unconverted Guidance Loans; Interest accruing on the Unconverted
Guidance Loans shall be due and payable monthly, in arrears, as provided in each
Guidance Note.
(d) Except as otherwise agreed to by all of the Banks, on each and
every Guidance Line Conversion Date, the aggregate principal amount of all
Unconverted Guidance Loans outstanding on any such date shall be converted into
a Loan having a fixed repayment schedule as provided below (each a "Converted
Guidance Amount"), and may no longer be reborrowed under the Guidance Line of
Credit and the Guidance Line of Credit Commitment shall thereupon be reduced by
such Converted Guidance Amount. From and after any such date, the then
outstanding principal amount of each of the Guidance Notes evdencing such
Converted Guidance Amount shall be payable in equal monthly installments
commencing on the last date of each month succeeding any such date based on a
loan with a term of sixty (60) months; together with interest (computed on the
basis of the actual number of days elapsed over a 360-day year) on the unpaid
principal amount thereof at a rate selected by the Borrower equal to either (i)
the Alternate Base Rate in effect from time to time plus one-half percent (0.5%)
or (ii) LIBOR for 30, 90 or 180 days plus two and one-half percent (2.5%) all as
provided in each Guidance Note. All unpaid principal of each Guidance Note,
together with all accrued and unpaid interest thereon and all other charges
thereon or incurred in respect thereof shall be due and payable upon the
maturity date provided in such Guidance Note; provided however that the entire
principal balance of each Guidance Note, together with all accrued and unpaid
interest thereon and all other charges thereon and in respect thereof will be
due and payable on such earlier date, if any, upon which the Liabilities are
accelerated as provided in subsection 8.2.
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(e) The proceeds of any Guidance Loan shall be used solely for the
payment of Project Costs required by a New Project or Contract Extension (as
such terms are defined in subsection 4.5 below), and which Project Costs shall
be presented and shown on the proposal given to the Agent in accordance with
subsection 4.5, but in no event shall such Proceeds be used for the payment of
any of the following:
(i) The payment of principal, interest, or charges on any loan, whether to
the Banks or any other Person;
(ii) For payment of Working Capital Loans or Letter of Credit Loans; or
(iii) Distributions or payments which are prohibited or restricted
(including payments which require the Banks to authorize such payments and which
have not been authorized) under the terms of this Agreement.
2.3 Letters of Credit Under Working Capital Line.
(a) Subject to the terms and conditions hereof (including without
limitation the terms and conditions of subsection 2.1(a)) and in reliance upon
the representations and warranties of the Borrower and its Subsidiaries to the
Banks, the Issuing Bank has agreed, as part of the Working Capital Line, to
issue either performance standby Letters of Credit or financial standby Letters
of Credit, in the maximum aggregate amount of Five Million Dollars
($5,000,000.00) (the "Letter of Credit Line"). Each Letter of Credit issued
under the Letter of Credit Line pursuant to subsection 2.1(a) shall be referred
to as a "Letter of Credit", and the issuance of any such Letter of Credit shall
be a "Letter of Credit Loan". Prior to the Termination Date, upon the request of
the Borrower (and if applicable, any Subsidiary) made in the manner set forth
in, and subject to the terms and conditions of, Section 4, the Issuing Bank, on
behalf of the Banks, will issue its Letters of Credit on behalf of the Borrower
as account party for Persons named by the Borrower, in such amounts as may be
requested by the Borrower, so long as the aggregate amount of all Letter of
Credit Liabilities is equal to or less than the maximum limit specified in the
fourth sentence of subsection 2.1(a).
(b) The amount of any draw on any Letter of Credit shall be due and
payable by Borrower to the Agent one Business Day after the Agent gives
telephonic or written notice of such draw to Borrower, and shall bear interest
from the date of such draw until the date which is one Business Day after the
date of such notice at the rate then selected by the Borrower as provided in the
Working Capital Notes, and thereafter at the default rate as set forth in the
Working Capital Notes.
(c) Any Letter of Credit issued by Issuing Bank shall contain such
terms and conditions for draws thereon as Issuing Bank, in its reasonable
discretion, determines are required given the circumstances and agreements
associated with and related to the issuance of such Letter of Credit, including
without limitation the terms and conditions contained in
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Issuing Bank's standard Application for Commercial Letter of Credit and
Agreement, in the form attached hereto as Exhibit C or in any form adopted by
Issuing Bank in replacement or modification thereof subsequent to the date
hereof.
(d) In the event that the Issuing Bank makes any payment under any
Letter of Credit and the Borrower shall not have reimbursed such amount in full
to the Issuing Bank pursuant to subsection 2.3(b) of this Agreement, the Issuing
Bank shall promptly notify the Banks of such failure, and each Bank shall
promptly and unconditionally pay to the Issuing Bank the amount of its pro rata
share of such unreimbursed payment in immediately available funds. If and to the
extent any Bank shall not have so made its pro rata share of the amount of such
payment available to the Issuing Bank, such Bank agrees to pay to the Issuing
Bank, forthwith on demand, such amount, together with interest thereon, for each
day from such date until the date such amount is paid to the Issuing Bank, at
the overnight Federal funds rate.
(e) The Borrower shall pay to the Issuing Bank, on the date of issuance
of any Letter of Credit, and on each annual anniversary of such issuance date if
such Letter of Credit is outstanding on such anniversary date, a fee of one and
one-half of one percent (1.5%) per annum multiplied by the stated outstanding
amount of the Letter of Credit (for the period outstanding) if such Letter of
Credit is issued as a performance standby Letter of Credit, or a fee of two and
one-quarter of one percent (2.25%) per annum multiplied by the stated amount
outstanding of the Letter of Credit (for the period outstanding) if such Letter
of Credit is issued as a financial standby Letter of Credit, as determined in
accordance with applicable banking regulations and based upon a 360-day year.
Each such fee shall be distributed by the Issuing Bank one-eighth of one percent
(.125%) to the Issuing Bank, with the balance of such fee to be distributed pro
rata to the Banks (including Issuing Bank). The fees required under this
subsection 2.3(d) shall be in addition to the any other fees required under this
Agreement or any of the other Loan Documents.
(f) Upon the making of each payment by a Bank to the Issuing Bank
pursuant to clause (d) above, in respect of any Letter of Credit, such Bank
shall, automatically and without any further action on the part of the Agent,
the Issuing Bank or such Bank, acquire (i) a participation in an amount equal to
such payment in the Reimbusement Obligation owing to the Issuing Bank by the
Borrower hereunder, under the letter of credit documents relating to such Letter
of Credit and (ii) a participation in a percentage equal to its pro rata share
of the aggregate amount of the Working Capital Line in any interest or other
amounts payable by the Borrower hereunder and under such letter of credit
documents in respect of such Reimbursement Obligations.
(g) Each Letter of Credit shall specify a termination date, which date
shall be no later than April 30, 1999. The parties hereto acknowledge and agree
that Issuing Bank has already issued the following Letters of Credit under the
Letter of Credit Line:
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(i) a certain irrevocable Letter of Credit No. 5151 originally
dated as of April 29, 1993 for the account of the Borrower, for the
benefit of Barnett Bank of South Florida, N.A, which was subsequently
reissued by Issuing Bank on February 15, 1996, and which is currently
outstanding in the amount of Five Hundred Thousand and 00/100 Dollars
($500,000.00), and has an expiry date of February 15, 1997; and
(ii) a certain irrevocable Letter of Credit No. 5527 dated as
of March 1, 1996, for the account of the Borrower, for the benefit of
United States Fidelity and Guaranty, and which is currently outstanding
in the amount of One Million and 00/100 Dollars ($1,000,000.00), and
has an expiry date of June 17, 1997.
(h) The proceeds of draws on any Letter of Credit shall not be
used, directly or indirectly, for any of the following purposes:
(i) The payment of principal, interest, or charges on
any loan, whether to the Banks or any other Person;
(ii) For payment of the Working Capital Loans or the
Guidance Loans; or
(iii) Distributions or payments which are prohibited or
restricted (including payments which require the Banks to authorize
such payments) under the terms of this Agreement.
(i) If required by a proposed beneficiary of a Letter of Credit, the
Issuing Bank shall provide security arrangements reasonably satisfactory to such
proposed beneficiary to support such Letter of Credit.
2.4 Borrower's Loan Account. The Agent shall maintain a Loan Account
for the Borrower on its books in which shall be recorded (a) all Loans made by
the Agent to or for the Borrower pursuant to this Agreement or any of the other
Loan Documents, (b) all payments made by the Borrower on all such Loans and (c)
all other appropriate debits and credits as provided in this Agreement or any of
the other Loan Documents, including without limitation, all fees, charges,
expenses and interest. At the discretion of the Agent, the Borrower's Loan
Account may be segregated and accounted for on the basis of each Note, each
Loan, or in aggregate for all Loans. All entries in the Borrower's Loan Account
shall be made in accordance with the Agent's customary accounting practices as
in effect from time to time, and the debit balance reflected in the Loan Account
shall be rebuttably presumptive evidence of the amount owed to the Banks by the
Borrower. The Borrower promises to pay all of its obligations hereunder as such
amounts become due or are declared due pursuant to the terms of this Agreement.
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2.5 Statements. All Loans made to the Borrower, and all other debits
and credits provided for in this Agreement, shall be evidenced by entries made
by the Agent in its internal data control systems showing the date, amount and
reason for each such debit or credit. Until such time as the Agent shall have
rendered to the Borrower written statements of account as provided herein, the
balance in the Borrower's Loan Account, as set forth on the Agent's most recent
printout, shall be rebuttably presumptive evidence of the amounts due and owing
to the Banks by the Borrower. The Agent shall render to the Borrower a monthly
statement setting forth the balance of the Borrower's Loan Account, including
principal, interest, expenses and fees. Each such statement shall be subject to
subsequent adjustment by the Agent but shall, absent manifest errors or
omissions, be presumed correct and binding upon the Borrower.
2.6 Fees. The Borrower shall pay to the Agent at Closing a Facility Fee
in the amount of Three Hundred Seventy Five Thousand and 00/100 Dollars
($375,000.00), to be distributed by the Agent pro rata to the Banks. Within
thirty (30) calendar days of the last day of each calendar quarter commencing
June 30, 1996 to and including the Termination Date, the Agent shall charge the
Borrower an unused commitment fee computed at the annual rate of one-quarter of
one percent (0.25%) of the monthly weighted average of the then available and
unborrowed Working Capital Line and of the then available and unborrowed
Guidance Line of Credit in such calendar quarter.
2.7 Method of Making Payments.
(a) Unless otherwise agreed in writing from time to time
hereafter, all payments which the Borrower is required to make to the
Agent under this Agreement or under any of the other Loan Documents
shall be made in immediately available Dollars not later than 12:00
p.m. local time in Boston, Massachusetts on the date of payment at the
Agent's office at 30 Court Street, Boston, Massachusetts 02108, or at
such other place as the Agent directs from time to time, or, in Agent's
sole and absolute discretion, by appropriate debits to the Loan
Account. Payments received by the Agent after 12:00 p.m. (Boston time)
shall be deemed to have been made on the next succeeding Business Day.
(b) All payments made by the Borrower in connection with this
Agreement or any of the other Loan Documents shall be made free and
clear of, and without reduction for or on account of, any present or
future stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, together with any interest, penalties, or
additions thereto, now or hereafter imposed, levied, collected,
withheld, or assessed by any governmental entity. If, however, any such
items are required by Law to be deducted or withheld from any such
payments to the Banks, the amount of such payments shall be increased
to the extent necessary in order that the amount of such payment to the
Banks (after payment of the applicable item) shall equal the amount
which would have been received by the Banks in the absence of such
item, or any such other amounts payable.
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2.8 Termination Date; Cancellation Fee. The Commitments hereunder shall
commence on the Closing Date and continue through the earliest of (a) April 30,
1999, (b) the date of acceleration of any of the Liabilities under subsection
8.2, or (c) the date on which Borrower gives notice to the Banks of its desire
to terminate the obligations of the Banks to make Loans and of UST to issue
Letters of Credit under this Agreement (which notice shall only be effective if
all Liabilities have been paid in full, there are no outstanding Letters of
Credit) and, in the event that such termination occurs as a result of the sale
of the Borrower's business or a refinancing of the Loans from outside sources of
funding (the earliest of such dates is hereinafter referred to as the
"Termination Date"), each Bank shall have received its pro rata share of a
cancellation fee (the "Cancellation Fee"), which Cancellation Fee shall be equal
to, for the applicable period set forth below, that percentage set forth below
of the sum of Seventy-Five Million and 00/100 Dollars ($75,000,000.00), minus
the total amount of principal paid (but not prepaid) under the Converted
Guidance Loans as of the Termination Date:
Period Elapsed
from the Date hereof Percentage on which
to Termination Date Cancellation Fee is based
less than 12 months 3.5%
12 to 24 months 2.5%
more than 24 months 0.5%;
provided that all of the Agent's and the Banks' rights and remedies under this
Agreement and under any of the other Loan Documents (including all security
interests and guaranties created thereunder), shall survive the Termination Date
until all of the Liabilities have been paid in full. From and after the
Termination Date until all of the Liabilities shall have been fully paid and
satisfied, the Agent shall be entitled to retain its security interests in and
to all existing and future Collateral. Any provision of this Agreement to the
contrary notwithstanding, this Agreement shall continue to be effective or be
reinstated, as the case may be, if at any time any amount received by the Agent
or any Bank in respect of the Loans is rescinded or must otherwise be restored
or returned by the Agent or by any Bank upon the Insolvency of the Borrower or
any of its Subsidiaries, all as though such payments had not been made.
2.9 Limitation on Charges. It being the intent of the parties that the
rate of interest and all other charges to the Borrower be lawful, if for any
reason the payment of a portion of the interest or other charges otherwise
required to be paid under this Agreement would exceed the limit which the Banks
may lawfully charge the Borrower, then the obligation to pay interest or other
charges by the Borrower shall automatically be reduced to such limit, and if any
amounts in excess of such limit shall have been paid, then such amounts shall be
applied to the outstanding Loans as a principal reduction, first to the Working
Capital Loans (including the Letter of Credit Loans) and, then to the Guidance
Loans, so that under no circumstances shall the interest or other charges
required to be paid by the Borrower hereunder exceed the maximum rate allowed by
Law.
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2.10 Capital Adequacy Provisions. The Borrower shall pay directly to
each Bank from time to time on request such amounts as such Bank may reasonably
determine to be necessary to compensate such Bank (or, without duplication, the
bank holding company of which such Bank is a subsidiary) for any costs that it
reasonably determines are attributable to the maintenance by such Bank (or any
such bank holding company), pursuant to any law or regulation or any
interpretation, directive or request (whether or not having the force of law and
whether or not failure to comply therewith would be unlawful) of any court or
governmental or monetary authority ((i) following any Regulatory Change or (ii)
implementing any risk-based capital guideline or other requirement (whether or
not having the force of law and whether or not the failure to comply therewith
would be unlawful) heretofore or hereafter issued by any government or
governmental or supervisory authority implementing at the national level the
Basel Accord (including, without limitation, the Final Risk-Based Capital
Guidelines of the Board of Governors of the Federal Reserve System (12 C.F.R.
Part 208, Appendix A; 12 C.F.R. Part 225, Appendix A), and the Final Risk-Based
Capital Guidelines of the Office of the Comptroller of the Currency (12 C.F.R.
Part 3, Appendix A)), of capital in respect of its commitments or loans (such
compensation to include, without limitation, an amount equal to any reduction of
the rate of return on assets or equity of such Bank (or any such bank holding
company) to a level below that which such Bank (or any such bank holding
company) could have achieved but for such law, regulation, interpretation,
directive or request). For purposes of this subsection 2.10 and Exhibit C,
"Basel Accord" shall mean the proposals for risk-based capital framework
described by the Basel Committee on Banking Regulations and Supervisory
Practices in its paper entitled "International Convergence of Capital
Measurement and Capital Standards" dated July 1988, as amended, modified and
supplemented and in effect from time to time, or any replacement thereof.
2.11 Additional Collateral Following Termination. At any time that the
Working Capital Line is terminated pursuant to subsection 8.2 or otherwise, the
Borrower shall furnish the Agent, for deposit in a cash collateral account
maintained at the Agent for the ratable benefit of the Banks, adequate cash
reserves for the benefit of the Banks on the Termination Date in the amount of
any Letters of Credit then outstanding which have an expiration date which
extends beyond the Termination Date, or the Borrower must otherwise provide for
a financial institution acceptable to the Banks to (x) issue a letter of credit
in form and substance satisfactory to the Banks, naming the Banks as
"beneficiary" therein, or, at the option of the Banks, (y) otherwise indemnify
the Banks against loss in connection with outstanding Letters of Credit,
pursuant to indemnification documentation in form and substance satisfactory to
the Banks.
3. SECURITY FOR THE LIABILITIES; GUARANTIES.
3.1 Security. The Notes, the Liabilities and any other obligations of
the Borrower to the Banks hereunder or under any of the Loan Documents shall be
secured by and entitled to the benefits of the following:
(a) a first priority security interest in all of the right,
title, and interest of the Borrower and its Subsidiaries in all
tangible and intangible personal property and fixtures of the Borrower
and its Subsidiaries pursuant to the Security Agreements signed by each
of them.
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(b) an Assignment of Receivables and Proceeds from the
Borrower and each of its Subsidiaries, assigning to the Agent as
Collateral all right, title, and interest of the Borrower and its
Subsidiaries in and to the proceeds from certain agreements relating to
its business (including but not limited to all rights for payment and
collection of moneys, both in the normal and ordinary course and as a
result of breach or termination of any Facility Agreement) except that
the Assignment shall be an absolute and unconditional assignment to the
Agent (and not for security purposes only) of all prepayments made on
Notes Receivable and Net Contract Proceeds financed by Guidance Loans
(up to the total outstanding principal amount of such Guidance Loans);
(c) an Unlimited Guaranty of payment and performance by
each of the Subsidiaries (other than the Orange County Joint Venture
and the Oregon Joint Venture);
(d) a Limited Guaranty of each of the Limited Guarantors
(including without limitation, the Orange County Joint Venture and
the Oregon Joint Venture);
(e) a Stock Pledge Agreement from the Borrower (and any
Subsidiary that owns any Subsidiary Stock) pledging all of the
Subsidiary Stock;
(f) a Joint Venture Pledge Agreement from the Borrower (and
any Subsidiary that owns any Joint Venture Interest) pledging all of
the Joint Venture Interests; and
(g) a LLC Pledge Agreement from the Borrower (and any
Subsidiary that owns any Membership Interest) pledging all of the
Membership Interests.
Subject to the terms of the applicable Loan Document with respect to
the rights granted thereunder as to specific Collateral, the Borrower agrees to
take such actions as may be necessary from time to time to cause the Agent, on
behalf of the Banks, to be secured by and entitled to the benefits of the Loan
Documents described in this subsection, including without limitation, obtaining
consents of any third parties. Each of the Loan Documents described in this
subsection shall be satisfactory in form and substance to the Banks and their
respective counsel.
3.2 Chattel Paper Instruments. Promptly after receipt thereof by the
Borrower, the Borrower shall deliver or cause to be delivered to the Agent with
appropriate endorsement and assignment to the Agent, with full recourse to the
Borrower, and possession in the Agent for security purposes only, all chattel
paper and instruments which the Borrower now owns or may at any time or times
hereafter acquire.
3.3 Vehicles. Upon the request of the Agent or the Designated Banks,
the Borrower will promptly deliver to the Agent the original title certificates
for all titled or registered motor vehicles or rolling stock now owned or
hereafter acquired by the Borrower. The Borrower agrees to take all steps
necessary to keep all of its vehicles and rolling stock titled and adequately
insured in its state of registration. The Borrower will promptly notify the
Agent of any additions
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to its vehicles or rolling stock. Upon the request of the Agent, the Borrower
will execute such agreements and documents as are necessary to reflect the
Agent's Liens on such vehicles and rolling stock.
3.4 Equipment. With respect to all Equipment of the Borrower, the
Borrower and each Subsidiary warrants that (a) except as disclosed on Schedule
3.4, as supplemented from time to time by an Acceptable Supplement, it is owned
by the Borrower or a Subsidiary, is located on one of the premises listed on
Schedule 3.4, as so supplemented, or, in the case of any vehicles or rolling
stock, is based at one of the premises listed on Schedule 3.4, as so
supplemented, and that the Borrower or such Subsidiary has the right to subject
the same to a Lien in favor of the Agent; (b) it is not subject to any Lien
except that of the Agent hereunder and except as specifically permitted
hereunder; and (c) as of the date of execution hereof, it is in good condition
and repair and is currently used or usable in the Borrower's or such
Subsidiary's business, and thereafter, if and to the extent not in good
condition and repair, shall be repaired, replaced, or sold (consistent with the
terms of this Agreement) as required under the applicable Facility Agreements.
3.5 Equipment Records. The Borrower and each Subsidiary shall at all
times hereafter keep correct and accurate records itemizing and describing the
kind, type, age and condition of all Equipment, the Borrower's or such
Subsidiary's cost therefor and accumulated depreciation thereon; and
retirements, sales, or other dispositions thereof, all of which records shall be
available during the Borrower's usual business hours at the request of the
Agent.
3.6 Safekeeping of Equipment. Except as required by the Code, the Agent
and the Banks shall not be responsible for: (a) the safekeeping of the
Equipment; (b) any loss or damage to such Equipment; (c) any diminution in the
value of such Equipment; or (d) any act or default of any repairmen, bailee or
any other Person with respect to such Equipment. All risk of loss, damage,
destruction or diminution in value of such Equipment shall be borne by the
Borrower and its Subsidiaries.
3.7 Maintenance of Properties. The Borrower and its Subsidiaries shall
maintain or cause to be maintained in good repair, working order and condition,
ordinary wear and tear excepted, the properties now or hereafter owned, leased,
or otherwise possessed by it and shall make or cause to be made all needful and
proper repairs, renewals, replacements and improvements thereto, except to the
extent that the failure to maintain such properties could not have a Material
Adverse Effect on the Borrower and its Subsidiaries.
4. CONDITIONS TO ADVANCES
Any other provisions contained in this Agreement notwithstanding, the
making of any Loan provided for in this Agreement (which shall include the
issuance of any Letter of Credit) shall be conditioned upon the following:
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4.1 Borrower's Request. The Agent shall have received, by at least
eleven o'clock (11:00 a.m.) (New York City time) in Boston, Massachusetts, on
the Business Day on which an advance is requested to be made hereunder in the
case of a Working Capital Loan (except as otherwise provided in the applicable
LIBOR provisions, if any, contained in the Notes) or the issuance of a Letter of
Credit, and three Business Days prior to the day on which an advance is
requested to be made hereunder in the case of a Guidance Loan (except as
otherwise provided in the applicable LIBOR provisions, if any, contained in the
Notes), (a) a telephonic request or written request from any Person authorized
by the Borrower pursuant to a written list provided to the Agent, for an advance
in a specific amount, and (b) all documents not previously delivered and
required to be delivered to the Agent, at or prior to the time of such advance,
under this Agreement or any of the other Loan Documents. The Agent shall not be
liable to the Borrower or any other Person as the result of acting on any
telephonic request which the Agent believes in good faith to have been made by
any Person authorized by the Borrower pursuant to such written list.
4.2 Financial Condition. No Material Adverse Change in the
Borrower and its Subsidiaries shall have occurred at any time or times
subsequent to the most recent Financial Statements provided pursuant to this
Agreement.
4.3 No Event of Default. After giving effect to the requested
Loan or the issuance of the requested Letter of Credit, neither a Default nor
an Event of Default shall have occurred and be continuing.
4.4 Representations and Warranties. The representations and warranties
contained herein and in each of the other Loan Documents shall be true and
correct as if made on and as of the date of such Loan, as modified by any
supplemental Schedules filed by Borrower or any of its Subsidiaries from time to
time, provided that any Financial Statements shall relate only to the date or
dates as of which information is presented therein and, with respect to other
information, if and to the extent it relates to an earlier date, then it shall
be true and correct as of that earlier date.
4.5 Additional Conditions for Approval of Guidance Loan.
(a) With respect to requests for a Guidance Loan, the Borrower
shall have submitted to the Agent (and with respect to a Guidance Loan
for which the Banks' prior approval is required pursuant to subsection
4.5(e), the Banks shall have approved in writing in their discretion) a
proposal for the financing of a Facility Agreement for: (i) (A) a
facility not theretofore serviced by the Borrower or any of its
Subsidiaries, (B) a one-time-only special event at any facility which
shall not be included within the scope of a Facility Agreement existing
as of the date of this Agreement, (C) a material expansion of size of a
facility or scope of service under a Facility Agreement, or (D) the
acquisition of concession, license, management or other food and
beverage service agreements from a Person, directly, or indirectly,
through the purchase of stock or assets of a Person (each of (A)-(D)
above is hereinafter sometimes referred to as a "New
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Project"), or (ii) the extension of any Facility Agreement then being
serviced by the Borrower or any of its Subsidiaries (a "Contract
Extension"). Any existing Facility Agreement which is put out for bid
by the other parties thereto and on which the Borrower, its
Subsidiaries, and any other Persons may bid at the end of its term
shall be considered a New Project rather than a Contract Extension.
(b) Each such proposal for a New Project or a Contract
Extension shall consist of the following: (i) a copy of the Facility
Agreement if it exists, otherwise the proposed form of the Facility
Agreement which will be in effect upon the commencement of the term
thereof, if it exists; (ii) a detailed itemization of the Project Costs
of such New Project or Contract Extension, including a separate
itemization of the use of all the proceeds of such Guidance Loan; (iii)
copies of all market studies, pro forma financial statements, and
business plans and studies prepared in connection with such New Project
or Contract Extension, as the case may be; (iv) a separate itemization
of Project Costs, prepared by the Borrower and certified as accurate by
Borrower's president or chief financial officer, identifying the
capitalization period for such Project Costs (the "Capitalization
Period"); and (v) such other information as the Agent in its reasonable
discretion may request.
(c) With respect to a New Project: (i) the aggregate principal
amount of the requested Guidance Loan shall (subject to subsection
4.5(e)) not exceed eighty percent (80%) of Project Costs; and (ii)
during the immediately preceding six-month period, the Borrower and its
Subsidiaries, taken as a whole, cannot have entered into more than
thirty (30) agreements for New Projects (not including New Projects
involving a one-time only special events, which shall be referred to
herein as "Special Events", or acquisitions described in subsection
4.5(a)(i)(D)) or Contract Extensions without the consent of the
Designated Banks; all references to permitted numbers of New Projects
in this paragraph (c) shall be increased by the number of facilities as
to which a Facility Agreement has terminated during the applicable
period;
(d) With respect to any Guidance Loan, the Borrower shall be
in compliance with the financial covenants set forth in subsection 6.1
after giving effect to the requested Guidance Loan.
(e) The Designated Banks may, in their sole discretion,
approve or disapprove any requested Guidance Loan which would require
the Banks to fund an aggregate of Two Million Five Hundred Thousand and
00/100 Dollars ($2,500,000.00) or more for Project Costs for any New
Project or Contract Extension. Notwithstanding the preceding sentence
and subsection 4.5(c)(i), the aggregate principal amount of the
requested Guidance Loan shall not exceed ninety percent (90%) of
Project Costs and the approval of the Designated Banks shall only be
required to fund an aggregate of Three Million Five Hundred Thousand
and 00/100 Dollars ($3,500,000.00) or more for Project Costs for any
New Project or Contract Extension if (i) the total outstanding amount
on the Guidance Line of Credit (both Unconverted Guidance Loans and
Converted Guidance
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Loans) is less than Twenty Million and 00/100 Dollars ($20,000,000.00)
and (ii) the ratio of total Debt to total Operating Cash Flow
(including the amount of the requested Guidance Loan) for the twelve
(12) month period prior to the month ending not more than sixty (60)
calendar days before the time the Guidance Loan is to be funded is less
than 2.00 to 1.00. If the requirements of only one of clauses (i) and
(ii) of the preceding sentence are met, then the requested principal
amount of the requested Guidance Loan shall not exceed eighty-five
percent (85%) of Project Costs and such approval of the Designated
Banks shall be required for any requested Guidance Loan which would
require the Banks to fund an aggregate of Three Million and 00/100
Dollars ($3,000,000.00).
4.6 Additional Conditions for Approval of Working Capital Loans. With
respect to any Working Capital Loan, including the issuance of any Letter of
Credit pursuant to subsection 2.1(a), the Borrower shall be in compliance with
the financial covenants set forth in subsection 6.1 after giving effect to the
requested Loan.
4.7 Other Requirements. The Agent shall have received, in form and
substance reasonably satisfactory to the Agent and its counsel, all
certificates, orders, authorities, consents, affidavits, schedules, instruments,
security agreements, financing statements, mortgages and other documents which
are provided for hereunder or under any of the other Loan Documents, and all
other information relating to the transaction reasonably requested by the Agent.
4.8 Additional Conditions for Making Loans. In addition to the
foregoing, the following shall be preconditions for the making of any Loan or
the issuance of any Letter of Credit under this Agreement:
(a) The Liabilities shall be senior indebtedness of
Borrower and its Subsidiaries for all purposes;
(b) The Borrower shall have paid all costs of the Banks in
connection with the making and closing of the Loans and the issuance of
the Letters of Credit, including but not limited to the fees and
expenses of the Banks' counsel and as set forth in subsection 6.6;
(c) The Borrower and each of its Subsidiaries shall have
received all Approvals and the same shall continue to be in full force
and effect as of the Closing Date;
(d) On or before the Closing Date, the Borrower and each of
its Subsidiaries (other than the Orange County Joint Venture and the
Oregon Joint Venture) shall have executed and delivered to the Agent
the following:
(i) First Amended and Restated Unlimited
Guaranty, substantially in the form attached hereto as Exhibit D;
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(ii) First Amendment and Restated Security
Agreement - All Assets substantially in the form attached hereto as
Exhibit E; and
(iii) First Amended and Restated Assignment of
Receivables and Proceeds, substantially in the form attached hereto as
Exhibit F;
(e) On or before the Closing Date, each of the Orange County
Joint Venture and the Oregon Joint Venture shall have executed and
delivered to the Agent the following:
(i) a First Amended and Restated Limited
Guaranty, substantially in the form attached hereto as Exhibit G;
(ii) First Amendment and Restated Security
Agreement - All Assets,substantially in the form attached hereto as
Exhibit H; and
(iii) First Amended and Restated Assignment of
Receivables and Proceeds, substantially in the form attached hereto as
Exhibit I;
(f) On or before the Closing Date, the Borrower shall
have executed and delivered to the Agent the following:
(i) First Amended and Restated Stock Pledge
Agreement, substantially in the form attached hereto as Exhibit J;
(ii) First Amended and Restated LLC Pledge
Agreement, substantially in the form attached hereto as Exhibit K; and
(iii) First Amended and Restated Joint Venture Pledge
Agreement, substantially in the form attached hereto as
Exhibit L.
5. REPRESENTATIONS AND WARRANTIES
In order to induce the Banks to enter into this Agreement and to make
the Loans and in order to induce UST to issue the Letters of Credit, the
Borrower, and its Subsidiaries, hereby jointly and severally represent and
warrant that as of the date of this Agreement, and continuing so long as any
Liabilities remain outstanding, and so long as this Agreement remains in effect:
5.1 Corporate Existence. Each of the Borrower and its Subsidiaries is a
corporation duly organized and in good standing under the laws of its state of
incorporation and is duly qualified and licensed as a foreign corporation and in
good standing in all other states except where the failure to qualify and remain
in good standing would not have a Material Adverse Effect on the Borrower. All
such states of qualification as of the date hereof are listed on
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Schedule 5.1, which shall be supplemented in writing by the Borrower and its
Subsidiaries from time to time as may be necessary to maintain the accuracy and
completeness of the information required to be disclosed therein.
5.2 Corporate Authority.
(a) Each of the Borrower and its Subsidiaries has all
requisite corporate power and authority, as applicable, to own and
operate each of their respective properties and to carry on each of
their respective businesses as now conducted and proposed to be
conducted.
(b) The execution and delivery by each of the Borrower and its
Subsidiaries, as applicable, of this Agreement and all of the other
Loan Documents and the performance of each such entity's obligations
hereunder and thereunder: (i) are within each such entity's powers;
(ii) are duly authorized by each of their respective Boards of
Directors and, if necessary, by each of their respective shareholders;
(iii) are not in contravention of the terms of each of their
Certificates of Incorporation or Articles of Organization, or By-Laws,
or any indenture, agreement or undertaking to which the Borrower or any
of its Subsidiaries is a party or by which such entity or any of its
property is bound; (iv) do not require any governmental consent,
registration or Approval or the giving of any notice to, or the
granting of any exemption by, any governmental authority except as
contemplated by the Loan Documents; (v) do not contravene any Law or
contractual or governmental restriction binding upon such corporation;
(vi) will not, except as contemplated herein, result in the imposition
of any Lien upon any property of such entity under any Law or any
existing indenture, mortgage, deed of trust, loan or credit agreement
or other material agreement or instrument to which each such entity is
a party or by which it or any of its property may be bound or affected;
and (vii) will not result in the cancellation, modification, revocation
or suspension of any Licenses, as defined in subsection 5.20(b) which
are material to the operation of the business of the Borrower and its
Subsidiaries, taken as a whole. Copies of the Certificate or Articles
of Incorporation and By-laws of each of the Borrower and its
Subsidiaries, with all amendments thereto to the date hereof, have been
furnished to the Agent, and such copies are accurate and complete as of
the date hereof.
5.3 Binding Effect. This Agreement and the other Loan Documents are the
legal, valid and binding obligations of each of the Borrower and its
Subsidiaries which is a party hereto or thereto, and are enforceable against
each of the Borrower and its Subsidiaries, as applicable, in accordance with
their respective terms.
5.4 Financial Data.
(a) The Borrower has furnished to the Agent its audited
consolidated financial statements, dated December 27, 1995, including
the report and opinion of Deloitte & Touche LLP, relating thereto
(collectively, the "Financials"), and its unaudited monthly
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schedules showing income and expenses (excluding income taxes), for the
four months ended April 24, 1996, copies of which are attached hereto
as Schedule 5.4. All of the material liabilities (actual and
contingent) of each of the Borrower and its Subsidiaries, are fully,
accurately and completely disclosed in the Financials.
(b) All financial statements furnished herewith have been and
all financial statements to be furnished in accordance with subsection
6.1 will be prepared in accordance with the books and records of the
Borrower and its Subsidiaries and fairly present or will fairly
present, as applicable, the financial condition of the Borrower and its
Subsidiaries, taken as a whole, at the dates thereof and the results of
operations for the periods indicated (subject, in the case of unaudited
financial statements, to normal year-end adjustments, none of which are
expected to be material). All of the Financials have been and all of
the financial statements to be provided hereunder will be prepared in
conformity with GAAP.
(c) All information, reports and other papers and data
furnished or to be furnished to the Agent by the Borrower or any
Subsidiary have been and will be, at the time the same are so furnished
to the Agent, accurate and correct in all material respects and
complete insofar as completeness may be necessary to give the Agent a
true and accurate knowledge of the subject matter thereof. Since the
date of the Financials, there has been no Material Adverse Change with
respect to the Borrower and its Subsidiaries.
5.5 Tangible Assets. Attached as Schedule 5.5 hereto is a list of all
of the Borrower's and its Subsidiaries' right, title, and interest in and to
tangible assets, by location and category, as of December 27, 1995, to be
supplemented with each Financial Statement required under subsection 6.2(a) by
an Acceptable Supplement (as defined in subsection 5.6) with respect to items
not previously listed, with an individual book value or estimated fair market
value of Twenty-Five Thousand and 00/100 Dollars ($25,000.00) or more.
5.6 Title to Collateral. Except as disclosed on Schedule 5.6 and except
as contemplated in subsection 7.1, all of the Collateral is free and clear of
all Liens. Each of the Borrower and its Subsidiaries has good and valid title to
all of the assets reflected on its respective books and records as being owned
by it. All Collateral is and shall be kept only at the locations specified on
Schedule 5.6, as such Schedule may be supplemented, in writing by the Borrower
or its Subsidiaries from time to time as may be necessary to maintain the
accuracy and completeness of the information required to be disclosed therein,
which supplement shall be acceptable to the Agent unless the supplement reflects
a Material Adverse Change of the Borrower (any such supplement not indicating a
Material Adverse Change of the Borrower or which is otherwise acceptable to the
Agent being referred to as an "Acceptable Supplement"). The Agent's security
interests in, pledge of and mortgages in the Collateral covered by the Loan
Documents have been duly perfected and, as necessary, recorded and no security
interests, pledges or mortgages shall exist at the Closing with respect to such
Collateral, other than the security interests, pledges and mortgages granted to
the Agent under the Loan Documents or Liens permitted by this Agreement.
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5.7 Real Property; Leases. All real property owned, leased, or occupied
by the Borrower or any of its Subsidiaries, and all leases with respect thereto,
are disclosed on Schedule 5.7 attached hereto, as such Schedule may be
supplemented in writing by an Acceptable Supplement. Except as set forth in
Schedule 5.7 or an Acceptable Supplement, each of the Borrower and its
Subsidiaries enjoys peaceful and undisturbed possession of such property subject
to all leases, licenses for occupancy, or occupancy or use agreements of real
property, and all such leases, licenses for occupancy, or occupancy or use
agreements are valid and subsisting, in full force and effect; to the best
knowledge of Borrower and its Subsidiaries, no material default exists
thereunder; and all leases, licenses for use, or agreements for use of personal
property are valid and subsisting, in full force and effect, and no material
default exists thereunder.
5.8 Solvency. The Borrower and its Subsidiaries, taken as a whole,
and (ii) the Borrower, when examined separately:
(1) will be able to pay its Indebtedness as the same becomes
due, including without limitation, all of the Liabilities;
(2) will have funds and capital sufficient to carry on its
business as now conducted or as contemplated to be conducted;
(3) owns property having a value both at fair valuation and at
present fair saleable value greater than the amount required to pay its
debts as they become due, including without limitation, all of the
Liabilities; and
(4) is not Insolvent and will not be rendered Insolvent as
determined by the Uniform Fraudulent Conveyance Act, as adopted and in
effect in the Commonwealth of Massachusetts in Massachusetts General
Laws, Chapter 109A, Section 1, or any other applicable law.
When examined as a whole, neither the Borrower nor the Borrower and its
Subsidiaries, taken as a whole:
(1) (A) is Insolvent on the date hereof; or
(B) is engaged in business or a transaction,
or is about to engage in business or a transaction,
for which, taking into account any property remaining
with the Borrower and its Subsidiaries, they would,
taken as a whole, have an unreasonably small capital;
or
(C) intends to incur, or believes that the
Borrower and its Subsidiaries would incur,
Indebtedness that would be beyond the ability of the
Borrower and its Subsidiaries, taken as a whole, to
pay as such Indebtedness matures; or
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(2) is transferring an interest in the Borrower or any of its
Subsidiaries, or incurring an obligation which, under Section 548 of
the Bankruptcy Code (Title 11 of the United States Code), may be
avoided.
Neither the Borrower nor any of its Subsidiaries (a) is considering the filing
of a petition by it under any Insolvency Laws, or the liquidation of all or a
major portion of its respective properties; and (b) has any knowledge of any
Person contemplating the filing against any of them of any such petition.
5.9 Principal Place of Business. The principal places of business and
chief executive office of the Borrower and each of its Subsidiaries are the
addresses first set forth above in this Agreement. The Borrower shall notify the
Agent of any change thereof prior to such change. The books and records of the
Borrower and each of its Subsidiaries are located at the principal place of
business and chief executive office of the Borrower. The Borrower shall promptly
notify the Agent of any change thereof prior to such change.
5.10 Other Corporate Names. Neither the Borrower nor any of its
Subsidiaries has used any corporate or fictitious name (including any tradename,
tradestyle, assumed name, division name or any similar name), other than the
corporate name shown on such corporation's Certificate of Incorporation or
Articles of Organization or as listed on Schedule 5.10 or disclosed in an
Acceptable Supplement.
5.11 Tax Liabilities. The Borrower and each of its Subsidiaries has
filed all federal, state and local tax reports and returns required by any Law
to be filed thereby except for extensions duly obtained, and has paid all taxes,
assessments and other governmental charges levied upon each of their respective
properties, assets, income or franchises, other than those not yet delinquent
and those, not substantial in aggregate amount, reserved against, or those being
contested as permitted by subsection 6.5. The charges, accruals and reserves on
the books of each of the Borrower and its Subsidiaries in respect of each of
their respective taxes are adequate in the opinion of the Borrower, and each of
the Borrower and its Subsidiaries is not subject to any unpaid assessments for
additional taxes (other than any such assessments for amounts which would not
have a Material Adverse Effect on the Borrower) and do not know of any basis
therefor.
5.12 Loans. Except as disclosed on and set forth in the Financials or
on Schedule 5.12 and except for trade payables and accrued expenses arising in
the ordinary course of the Borrower's and its Subsidiaries' business since the
date of the latest Financials provided pursuant to subsection 5.4, neither the
Borrower nor any Subsidiary is obligated on any loans or other Indebtedness for
borrowed money as of the Closing Date (other than as permitted under subsection
7.2).
5.13. Margin Securities. Neither the Borrower nor any Subsidiary owns any
margin securities and none of the Loans advanced hereunder will be used for the
purpose of purchasing or carrying any margin securities or for the purpose of
reducing or retiring any
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Indebtedness which was originally incurred to purchase any margin securities or
for any other purpose not permitted by Regulation G or U of the Board of
Governors of the Federal Reserve System. If requested by the Agent, the Borrower
and its Subsidiaries will furnish the Agent with a statement in conformity with
the requirements of Federal Reserve Form G-1 or U-1 referred to in said
Regulation. No part of the proceeds of the Loans to be made hereunder will be
used by the Borrower or any of its Subsidiaries for any purpose which violates,
or which is inconsistent with, the provisions of Regulation X of said Board of
Governors.
5.14 Subsidiaries. Except as disclosed on Schedule 5.14, as the same
may be supplemented in writing from time to time, the Borrower has no
Subsidiaries (including without limitation, no Offshore Subsidiaries) and is not
engaged in any joint venture or partnership with any other Person. Neither the
Borrower nor any of its Subsidiaries owns or holds, directly or indirectly, any
capital stock or equity security of, or any equity interest in, any Person other
than as disclosed on Schedule 5.14, as so supplemented.
5.15 Litigation and Proceedings. Except as disclosed on Schedule 5.15,
no judgments are outstanding against the Borrower or any of its Subsidiaries nor
is there now pending or, to the knowledge of the Borrower or any Subsidiary,
threatened, any litigation, contested claim, or federal, state or municipal
governmental proceeding by or against the Borrower or any of its Subsidiaries
or, to the best of each of their knowledge after due inquiry, any basis
therefor, which litigation, claim or proceeding could reasonably be expected to
result in a Material Adverse Effect. The Borrower and its Subsidiaries shall
supplement such schedule with an Acceptable Supplement from time to time which
schedule shall be deemed an Acceptable Supplement if all material threatened or
pending litigation and proceedings (including but not limited to all material
threatened or pending litigation and proceedings between the Borrower or a
Subsidiary and another party to a Facility Agreement) are accurately described
therein.
5.16 Registration Statement.
(a) The Borrower's Registration Statement (No. 333-2906) on
Form S-1 filed with the SEC on March 29, 1996, as amended (the
"Registration Statement"), and the final Prospectus included therein,
do not contain any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(b) No representation or warranty made by the Borrower herein
or in any other certificate furnished from time to time in connection
herewith, contains or will contain any misrepresentation of a material
fact or omits or will omit to state any material fact necessary to make
the statements herein or therein (taken as a whole in conjunction with
all such documents) not misleading when made. To the best of the
Borrower's knowledge, there is no condition specific to the business of
the Borrower which adversely affects, or which would in the future
adversely affect, the business,
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operations, property or financial condition of the Borrower in a manner
which would materially adversely affect the Collateral or the
Borrower's ability to perform its obligations under this Agreement or
any of the other Loan Documents.
5.17 Material Agreements. Attached as Schedule 5.17 hereto is a true,
complete and accurate list of all material agreements as of the Closing Date
(including all amendments thereto), oral or written, involving the payment or
expenditure of One Hundred Thousand and 00/100 Dollars ($100,000.00) or more
(other than sales or purchase orders entered into in the ordinary course of
business of the Borrower or any of its Subsidiaries) (i) to which the Borrower
or any of its Subsidiaries is a party, (ii) by which any assets of the Borrower
or any of its Subsidiaries are bound, or (iii) to which any director, officer,
shareholder or Affiliate of any of the foregoing is a party or which any agent
of any of the foregoing has entered into, in any such case, on behalf of the
Borrower or any Subsidiary, including without limitation, all leases and
management maintenance, brokerage, supply and service contracts and any
contract, agreement or other arrangement providing for the employment of,
furnishing of services to or by, the Borrower or any of its Subsidiaries, any
director, officer or shareholder thereof, or any Affiliate of any of the
foregoing. A true, correct and complete copy of all of the agreements (including
all amendments thereto) as set forth on Schedule 5.17 has previously been
furnished to the Agent. As of the Closing Date, neither the Borrower or any of
its Subsidiaries nor any officer, director, shareholder or Affiliate of the
Borrower or any of its Subsidiaries is in default under any such material
agreement which could reasonably be expected to have a Materially Adverse Effect
on the Borrower or which could reasonably be expected to have a Materially
Adverse Effect on the ability of the Borrower to perform its obligations under
any of the Loan Documents to which it is a party. The execution and delivery of
the Loan Documents was not and is not a default under of any of the agreements
listed on Schedule 5.17. As of the date hereof, the Borrower knows of no dispute
regarding any contract, lease, or commitment which would have a Material Adverse
Effect on the Borrower and its Subsidiaries or, to the best of its knowledge,
after due inquiry, any basis therefor.
5.18 Largest Customers. Except as set forth on Schedule 5.18, as of the
Closing Date, the Borrower has no reason to believe that any of its ten largest
customers intends significantly to alter its sales or purchases so as to have a
Material Adverse Effect on the Borrower and its Subsidiaries.
5.19 Employee Controversies and Employment and Labor Agreements.
(a) There are no controversies pending or, to the best of the
Borrower's knowledge after due inquiry, threatened, between the
Borrower or any of its Subsidiaries and any of its employees, other
than employee grievances arising in the ordinary course of business
which are not, in the aggregate, material to the financial condition,
results of operation or business of the Borrower and its Subsidiaries,
taken as a whole. Each of the Borrower and its Subsidiaries is in
compliance with all federal and state laws respecting employment and
employment terms, conditions and
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practices the failure to comply with which could have a Material
Adverse Effect on the Borrower and its Subsidiaries. Neither the
Borrower nor any of its Subsidiaries has union representation
questions, grievances, discrimination or unfair labor practice
complaints pending or threatened against it before any state or federal
board or agency respecting employment and employment terms, conditions
and practices the failure to comply with which could have a Material
Adverse Effect on the Borrower and its Subsidiaries or, to the best of
its knowledge, after due inquiry, any basis therefor, except as set
forth on Schedule 5.19 or on an Acceptable Supplement.
(b) Except as set forth in Schedule 5.19: (i) neither the
Borrower nor any of its Subsidiaries is a party as of the Closing Date
to any outstanding employment agreements or contracts with officers or
employees that are not terminable at will, or that provide for the
payment of any bonus or commission; (ii) as of the Closing Date,
neither the Borrower nor any of its Subsidiaries is a party to any
agreement, policy or practice that requires it to pay termination or
severance pay to salaried, non-exempt or hourly employees (other than
as required by law); (iii) neither the Borrower nor any of its
Subsidiaries is a party to any collective bargaining agreement or other
labor union contract applicable to persons employed by the Borrower or
any of its Subsidiaries nor do the Borrower or any of its Subsidiaries
know of any activities or proceedings of any labor union to organize
any such employees, except in any such case as may be set forth on an
Acceptable Supplement. Each of the Borrower and its Subsidiaries has
furnished to the Agent complete and correct copies of all such
agreements ("Employment and Labor Agreements"). Neither the Borrower
nor any of its Subsidiaries has breached or otherwise failed to comply
in any material respect with any provisions of any Employment and Labor
Agreement, and there are no material grievances outstanding thereunder,
except in any such case as may be set forth on an Acceptable
Supplement.
5.20 Compliance with Laws and Regulations.
(a) Each of the Borrower and its Subsidiaries is in compliance
with all Laws and with each of their respective Certificate of
Incorporation or Articles of Organization, the failure to comply with
which could have, individually or in the aggregate, a Material Adverse
Effect on the Borrower and its Subsidiaries.
(b) Schedule 5.20(b) attached hereto sets forth, as of the
Closing Date, a true and complete list of all material licenses
(excluding motor vehicle registrations and including, but not limited
to, any license relating to alcoholic beverages, beer, wine or liquor),
permits, franchises, authorizations and approvals issued or granted to
each of the Borrower and its Subsidiaries by the United States, any
state or local government, any foreign national or local government, or
any department, agency, board, commission, bureau of instrumentality of
any of the foregoing (each a "License", and, collectively, the
"Licenses"), and all pending applications therefor. Such list contains
a summary description of each such item and, where applicable,
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specifies the date issued, granted or applied for, the expiration date
and the current status thereof. Except as set forth in Schedule 5.20(b)
attached hereto, each License has been issued to, and duly obtained and
fully paid for by, the holder thereof and is valid, in full force and
effect, and not subject to any pending or threatened administrative or
judicial proceeding to suspend, revoke, cancel or declare such License
invalid in any respect. Borrower shall supplement Schedule 5.20(b) with
an Acceptable Supplement provided with each Financial Statement
required under subsection 6.2(a), which Acceptable Supplement shall
list all liquor licenses and all other material licenses not
theretofore listed.
(c) Each of the Borrower and its Subsidiaries has all Licenses
required, and such Licenses are sufficient and adequate in all
respects, to permit the continued lawful conduct of each of the
Borrower's and its Subsidiaries' respective businesses in the manner
now conducted and the ownership, occupancy and operation of their real
property for their present uses. Except as set forth in Schedule
5.20(c), attached hereto or as may be set forth in an Acceptable
Supplement: (i) neither the Borrower nor any of its Subsidiaries is in
violation of any of the Licenses; (ii) none of the operations of the
Borrower or any of its Subsidiaries is being conducted in a manner that
violates any of the terms or conditions under which any License was
granted; (iii) none of the Licenses of the Borrower or any of its
Subsidiaries' relating to alcoholic beverages, beer, wine or liquor has
ever been suspended, revoked or otherwise terminated, or subject to
judicial or administrative review, for any reason other than the
renewal or expiration thereof nor has any application by the Borrower
or its Subsidiaries of any of such Licenses ever been denied; and (iv)
no License will in any way be affected by, or terminate or lapse by
reason of, the transactions contemplated by the Loan Documents or the
Subordinated Debt Documents.
5.21 Intellectual Property Rights. Each of the Borrower and its
Subsidiaries, as applicable, possesses and will possess adequate assets,
licenses, patents, patent applications, copyrights, service marks, trademarks,
trademark applications, tradestyles and tradenames to continue to conduct its
business as heretofore conducted by it. Neither the Borrower nor any of its
Subsidiaries has been charged or, to each of their knowledge, has been
threatened to be charged with, any infringement of, nor has any of them
infringed on, any unexpired trademark, trademark registration, tradename,
patent, copyright, copyright registration, or other proprietary right of any
other Person, which infringement could have a Material Adverse Effect on the
Borrower and its Subsidiaries.
5.22 Pension Related Matters. Each Plan maintained by the Borrower or
any ERISA Affiliate complies, and has been administered in accordance with its
terms and all material applicable requirements of ERISA and of the Tax Code and
with all material applicable rulings and regulations issued under the provisions
of ERISA and the Tax Code setting forth those requirements. No Reportable Event,
Prohibited Transaction or withdrawal from a Multiemployer Plan has occurred and
no Accumulated Funding Deficiencies exist with respect to any Plan or
Multiemployer Plan which could have a Material Adverse Effect on
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the Borrower or any ERISA Affiliate. The Borrower and each ERISA Affiliate has
satisfied all of the funding standards applicable to such Plans and
Multiemployer Plans under Section 302 of ERISA and Section 412 of the Tax Code
and the PBGC has not instituted any proceedings, and there exists no event or
condition which would constitute grounds for the institution of proceedings by
the PBGC, to terminate any Plan or Multiemployer Plan under Section 4042 of
ERISA which could have a Material Adverse Effect on the Borrower or any ERISA
Affiliate. Neither the Borrower nor any ERISA Affiliate has taken any steps to
terminate any Plan, which termination could have a Material Adverse Effect on
the Borrower or any ERISA Affiliate. Neither the Borrower nor any ERISA
Affiliate has taken any steps to terminate its participation in any
Multiemployer Plan or withdraw from any Multiemployer Plan. Each of the Borrower
and each ERISA Affiliate has made all contributions to each Plan and each
Multiemployer Plan to which it has become obligated to contribute as to which
the failure to make contributions could have a Material Adverse Effect on the
Borrower or any ERISA Affiliate. The Borrower is not aware of any assessments or
assertions of withdrawal liability against it or any ERISA Affiliate with
respect to any Plan or Multiemployer Plan. The aggregate potential withdrawal
liability under all Multiemployer Plans to which each of the Borrower and each
ERISA Affiliate is obligated to contribute is less than an amount which, if all
such liabilities were incurred, could have a Material Adverse Effect on the
Borrower, its Subsidiaries, and any ERISA Affiliate, taken as a whole.
5.23 Environmental Matters. Except as disclosed on Schedule 5.23, as
supplemented by any Acceptable Supplement: (a) each of the Borrower and its
Subsidiaries has complied in all material respects with Environmental Laws
regarding transfer, construction on and operation of the business and property,
including but not limited to notifying authorities, observing restrictions on
use, transferring, modifying or obtaining permits, licenses, approvals and
registrations, making required notices, certifications and submissions,
complying with financial liability requirements, Managing Hazardous Substances,
and Responding to the presence or Release of Hazardous Substances connected with
operation of its business or property; (b) neither the Borrower nor any of its
Subsidiaries has any material contingent liability with respect to the
Management of any Hazardous Substance; (c) during the term of this Agreement,
neither the Borrower nor any of its Subsidiaries shall, nor shall it permit
others to, manage, whether on or off the property of the Borrower or such
Subsidiary, Hazardous Substances except in full compliance with Environmental
Laws; (d) each of the Borrower and its Subsidiaries shall take prompt action in
full compliance with Environmental Laws to Respond to the on-site or off-site
Release of Hazardous Substances connected with operation of its business or
property; (e) neither the Borrower nor any Subsidiary has received any
Environmental Notice; and (f) to the best of the knowledge of the Borrower and
its Subsidiaries, no conditions exist on property owned or leased, or previously
owned or leased, by Borrower or any of its Subsidiaries which would result in
issuance of an Environmental Notice to Borrower or any of its Subsidiaries. Any
supplemental Schedule 5.23 filed shall be deemed to be an Acceptable Supplement
with respect to Environmental Notices if it reflects all Environmental Notices
which would result in a Material Adverse Effect and any Environmental Notice
from any governmental agency or authority.
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5.24 Broker's Fee. Except as set forth on Schedule 5.24, neither the
Borrower nor any of its Subsidiaries is in any way obligated to any Person in
respect of any finder's or broker's fee or similar commission in connection with
the transactions contemplated by this Agreement. Each of the Borrower and its
Subsidiaries agrees to indemnify the Agent and the Banks and hold the Agent and
the Banks harmless from and against any claims for any such fee or commission by
any such Persons.
5.25 Securities Matters. The making of the Loans hereunder, the
application of the proceeds and repayment thereof by the Borrower and the
consummation of the transactions contemplated by this Agreement have not and
will not violate any provision of any federal or state securities statutes,
rules or regulations, or any order issued by the Securities and Exchange
Commission (collectively, "Securities Laws"). Neither the Borrower nor any of
its Subsidiaries has issued any securities in violation of any Securities Law.
Promptly upon the filing thereof, the Borrower shall deliver to the Agent a true
and complete copy of each statement, document and report, periodic or otherwise,
filed pursuant to any Securities Law. The Borrower agrees to indemnify the Agent
and the Banks and hold the Agent and the Banks harmless from and against the
claims of any Persons in connection with the violation or alleged violation by
Borrower or any Subsidiary of any Securities Laws.
5.26 Equity Beneficial Ownership. Schedule 5.26 sets forth the number
of shares of each class of capital stock authorized for the Borrower and the
number of shares of each such class of stock outstanding. The outstanding
capital stock of the Borrower is duly authorized, validly issued, fully paid and
non-assessable. The Borrower shall supplement Schedule 5.26 from time to time as
required by an Acceptable Supplement.
5.27 Disclosure. No written information provided or statements made by
the Borrower, its Subsidiaries, or any other Affiliate of the Borrower in
connection with this transaction, or any of the representations and warranties
to the Banks herein or in any of the Loan Documents contains any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading. The Borrower has disclosed to the Agent in writing, every
fact of which it is aware (other than those relating to general economic matters
or matters of public knowledge) which, insofar as the Borrower can reasonably
foresee, might materially and adversely affect the business prospects,
operations or financial condition of the Borrower and its Subsidiaries or the
ability of each of the Borrower and its Subsidiaries to perform their respective
obligations hereunder or under any other Loan Documents.
5.28 Capitalization.
(a) As of the date hereof there are no treasury shares held by
the Borrower, and there are no outstanding options, warrant agreements,
conversion rights, preemptive rights or other rights to subscribe for,
purchase or otherwise acquire any unissued or treasury shares of
capital stock of the Borrower except as described in the Registration
Statement.
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(b) The total authorized capital stock of Fine Host Services
consists of One Thousand Five Hundred (1,500) shares of common stock,
without par value, of which One Hundred (100) shares are validly issued
and outstanding as of the Closing Date, all of which are owned by the
Borrower. There are no treasury shares held by Fine Host Services.
There are no outstanding options, warrant agreements, conversion
rights, preemptive rights or other rights to subscribe for, purchase or
otherwise acquire any unissued or treasury shares of capital stock of
Fine Host Services.
(c) The total authorized capital stock of Fine Host of Vermont
consists of One Hundred (100) shares of common stock, without par
value, of which One Hundred (100) shares are validly issued and
outstanding as of the Closing Date, all of which are owned by the
Borrower. There are no treasury shares held by Fine Host of Vermont.
There are no outstanding options, warrant agreements, conversion
rights, preemptive rights or other rights to subscribe for, purchase or
otherwise acquire any unissued or treasury shares of capital stock of
Fine Host of Vermont.
(d) The total authorized capital stock of Fanfare consists of
Fifteen Thousand (15,000) shares of common stock, without par value, of
which Two Thousand (2,000) shares are validly issued and outstanding as
of the Closing Date, all of which are owned by the Borrower. There are
no treasury shares held by Fanfare. There are no outstanding options,
warrant agreements, conversion rights, preemptive rights or other
rights to subscribe for, purchase or otherwise acquire any unissued or
treasury shares of capital stock of Fanfare.
(e) The total authorized capital stock of Global Fanfare
consists of One Thousand (1,000) shares of common stock, without par
value, of which Four Hundred (400) shares are validly issued and
outstanding as of the Closing Date, all of which are owned by the
Borrower. There are no treasury shares held by Global Fanfare. There
are no outstanding options, warrant agreements, conversion rights,
preemptive rights or other rights to subscribe for, purchase or
otherwise acquire any unissued or treasury shares of capital stock of
Global Fanfare.
(f) The total authorized capital stock of Fine Host
International consists of One Thousand (1,000) shares of common stock,
without par value, of which One Hundred (100) shares are validly issued
and outstanding as of the Closing Date, all of which are owned by the
Borrower. There are no treasury shares held by Fine Host International.
There are no outstanding options, warrant agreements, conversion
rights, preemptive rights or other rights to subscribe for, purchase or
otherwise acquire any unissued or treasury shares of capital stock of
Fine Host International.
(g) The total authorized capital stock of each of the Special
Texas Corporations in existence as of the Closing Date consists of One
Thousand (1,000) shares of common stock, with One and 00/100 Dollar
($1.00) par value per share, of which One Thousand (1,000) shares are
validly issued and outstanding for Convention
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Beverages, Inc., and One Thousand (1,000) shares of common stock, with
$.01 par value per share, of which One Thousand (1,000) shares are
validly issued and outstanding for Fine Host of Texas, Inc., and all of
which are owned as shown on Schedule 5.26. There are no treasury shares
held by any Special Texas Corporation. There are no outstanding
options, warrant agreements, conversion rights, preemptive rights or
other rights to subscribe for, purchase or otherwise acquire any
unissued or treasury shares of capital stock of the Special Texas
Corporations. The Agent has been provided with true and copies of the
Texas Management Agreements and the articles of incorporation and
bylaws of the Special Texas Corporations.
(h) The total authorized capital stock of CFM in existence as
of the Closing Date consists of One Hundred (100) shares of common
stock, with no par value per share, of which Seventy-Five (75) shares
are validly issued and outstanding as of the Closing Date, all of which
are owed by the Borrower. There are no treasury shares held by CFM.
There are no outstanding options, warrant agreements, conversion
rights, preemptive rights or other rights to subscribe for, purchase or
otherwise acquire any unissued or treasury shares of capital stock of
CFM.
(i) The total authorized capital stock of Northwest in
existence as of the Closing Date consists of Ten Thousand (10,000)
shares of common stock, with no par value per share, of which Eight
Hundred Twenty (820) shares are validly issued and outstanding as of
the Closing Date, all of which are owned by the Borrower. There are no
treasury shares held by Northwest. There are no outstanding options,
warrant agreements, conversion rights, preemptive rights or other
rights to subscribe for, purchase or otherwise acquire any unissued or
treasury shares of capital stock of Northwest.
(j) The total authorized capital stock of SWSI in existence as
of the Closing Date consists of (i) One Million (1,000,000) shares of
class A common stock, with $.01 par value per share, of which
Twenty-Five Thousand (25,000) shares are validly issued and outstanding
as of the Closing Date, all of which are owned by the Borrower, and
(ii) Two Hundred Thousand (200,000) shares of class B common stock,
with $.01 par value per share, of which no shares are issued and
outstanding. There are no treasury shares held by SWSI. There are no
outstanding options, warrant agreements, conversion rights, preemptive
rights or other rights to subscribe for, purchase or otherwise acquire
any unissued or treasury shares of capital stock of Northwest.
(k) The Borrower is the present owner and holder of
Seventy-Eight Percent (78%) of all of the membership interests of
Tarrant County. There are no outstanding options, warrant agreements,
conversion rights, preemptive rights or other rights to subscribe for,
purchase or otherwise acquire any membership interests of Tarrant
County.
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(l) The Borrower is the present owner and holder of
Seventy-Six Percent (76%) of all of the joint venture interests of the
Orange County Joint Venture. There are no outstanding options, warrant
agreements, conversion rights, preemptive rights or other rights to
subscribe for, purchase or otherwise acquire any joint venture
interests of the Orange County Joint Venture.
(m) The Borrower is the present owner and holder of
Eighty-Five Percent (85%) of all of the joint venture interests of the
Oregon Joint Venture. There are no outstanding options, warrant
agreements, conversion rights, preemptive rights or other rights to
subscribe for, purchase or otherwise acquire any joint venture
interests of the Oregon Joint Venture.
5.29 Corporate Structure. Schedule 5.29 attached hereto sets forth (a)
the name of each corporation, partnership, joint venture or other entity engaged
in the recreation food and beverage business or concession or food service
business of which the Borrower or any of its Subsidiaries owns (or has the right
to acquire), directly or indirectly, (i) in the case of corporations or other
entities with voting securities, shares of capital stock having in the aggregate
Ten Percent (10%) or more of the total combined voting power of the issued and
outstanding shares of capital stock entitled to vote generally in the election
of directors of such corporation and (ii) in the case of partnerships or other
entities without voting securities, any general partnership interest or a
limited partnership interest entitling the Borrower or any of its Subsidiaries
to Ten Percent (10%) or more of the profits or assets upon liquidation and (b)
in the case of each corporation described in clause (a) above, (i) the
jurisdiction of incorporation, (ii) the states where such corporation is
qualified to do business as a foreign corporation, (iii) the principal place of
business, (iv) the capitalization thereof and the percentage of each class of
capital voting stock owned by the Borrower and each of its Subsidiaries, as
applicable, and (v) a brief description of the nature of the business; and (c)
in the case of each unincorporated entity described in clause (a) above,
information substantially equivalent to that provided pursuant to clause (b)
above with regard to corporate entities.
5.30 Facility Agreements with Change in Stock Ownership Restrictions.
Neither the Borrower nor any of its Subsidiaries has entered into any Facility
Agreement which contains provisions which restrict or penalize a change in stock
ownership of the Borrower or any of its Subsidiaries except as set forth in
Schedule 5.30 attached hereto.
6. AFFIRMATIVE COVENANTS.
Each of the Borrower and its Subsidiaries hereby covenants and agrees
that so long as any Liabilities remain outstanding, and (even if there shall be
no Liabilities outstanding) so long as this Agreement remains in effect:
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6.1 Financial Covenants. The Borrower shall:
6.1.1 Debt To Operating Cash Flow Ratio. Maintain at all times
(to be tested as of the last day of each fiscal quarter for the twelve
(12) month period ending on such date) a maximum ratio of its Debt to
Operating Cash Flow of 3.50 to 1.00.
6.1.2 Operating Cash Flow to Fixed Charge-Ratio. Maintain at
all times (to be tested as of the last day of each fiscal quarter of
the Borrower for the twelve (12) month period ending on that date),
commencing with the fiscal quarter of the Borrower ending June 26,
1996, a ratio of its Operating Cash Flow to its Fixed Charges of
greater than or equal to the ratio set forth below opposite the
applicable period.
Quarters Ending in the
Periods Ratio
June 26, 1996 through 1.85 to 1.00
September 25, 1996
December 25, 1996 2.00 to 1.00
and thereafter
6.1.3 Operating Cash Flow to Cash Interest Expense Ratio.
Maintain at all times (to be tested as of the last day of each fiscal
quarter of the Borrower for the twelve (12) month period ending on that
date), commencing with the fiscal quarter of the Borrower ending June
26, 1996, a ratio of Operating Cash Flow to its Cash Interest Expenses
of greater than or equal to 4.00 to 1.00.
6.1.4 Minimum Net Worth. Maintain at all times (to be tested
as of the last day of each fiscal quarter of the Borrower) during the
periods set forth below, for each fiscal quarter of the Borrower, a
minimum Net Worth as set forth below.
Quarters Ending Net Worth
June 26, 1996 $42,000,000
September 25, 1996 $43,750,000
December 25, 1996 $44,995,000
March 26, 1997 $45,700,000
June 25, 1997 $46,400,000
September 24, 1997 $48,950,000
December 31, 1997 $50,500,000
April 1, 1998 $51,400,000
July 1, 1998 $52,300,000
September 30, 1998 $55,550,000
December 30, 1998 $57,300,000
March 31, 1999 $58,400,000
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6.1.5 Minimum Operating Cash Flow. Maintain at all times (to
be tested as of the last day of each fiscal quarter of the Borrower
commencing with the fiscal quarter ending June 26, 1996), a minimum
Operating Cash Flow of at least:
$2,150,000 for the quarter ending June 26, 1996; $2,750,000
for the quarters ending September 25, 1996 through June 25,
1997; $3,250,000 for the quarters ending September 24, 1997
through July 1, 1998; and $4,000,000 for each subsequent
quarter.
6.1.6 Minimum Tangible Capital Base. Maintain at all times (to
be tested as of the last day of each fiscal quarter of the Borrower
commencing with the fiscal quarter ending June 26, 1996), a minimum
Tangible Capital Base of at least Five Million and 00/100 Dollars
($5,000,000.00).
6.2 Financial Statements. The Borrower shall keep proper books of
record and account in which full and true entries will be made of all dealings
or transactions of or in relation to the business and affairs of the Borrower,
in accordance with GAAP, and the Borrower shall cause to be furnished to the
Agent, in accordance with the notice provisions of subsection 10.13:
(a) as soon as they become available and are filed with the
SEC, but in any event within forty-five 45 days after the close of each
fiscal quarter (other than the last fiscal quarter) of the Borrower,
consolidated balance sheets at the close of such fiscal quarter, and
consolidated statements of income, stockholders' equity and cash flows
for such fiscal quarter and for the period commencing at the close of
the previous fiscal year and ending with the close of such fiscal
quarter of the Borrower and its Subsidiaries (with comparable
information at the close of and for the corresponding fiscal quarter of
the prior fiscal year and for the corresponding portion of such prior
fiscal year), certified by the principal accounting or financial
officer of the Borrower (provided that the requirements of this clause
(a) for any fiscal quarter may be satisfied by delivery of a copy of
the Borrower's Quarterly Report on Form 10-Q for such quarter);
(b) as soon as they become available and are filed with the
SEC, but in any event within ninety (90) days after the close of each
fiscal year of the Borrower, consolidated balance sheets at the close
of such fiscal year, and consolidated statements of income,
stockholders' equity and cash flows for such fiscal year (with
comparable information for the prior fiscal year), in each case as
audited (without any Impermissible Qualification) by a firm of
independent public accountants of nationally recognized standing
acceptable to the Agent (provided that the requirements of the
foregoing provisions of this clause (b) for any fiscal year may be
satisfied by delivery of a copy of the Borrower's Annual Report on Form
10-K for such year), together with a certificate from such accountants
to the effect that, in making the examination necessary for the signing
of such annual report by such accountants, they have not
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become aware of any Default or Event of Default that has occurred and
is continuing, or, if they have become aware of such Default or Event
of Default, describing such Default or Event of Default;
(c) as soon as it becomes available, but in any event within
thirty (30) days after the close of each fiscal month of the Borrower,
an Operating Results and Comparison Schedule as to contract and venue
performance for such fiscal month, in substantially the form delivered
by the Borrower to UST prior to the Closing Date;
(d) as soon as it becomes available, but in any event within
forty-five (45) days after the close of each fiscal year of the
Borrower, a budget for the next succeeding fiscal year of the Borrower
and its Subsidiaries, which budget shall be prepared on a fiscal month
basis and shall contain a projected consolidated balance sheet and
statements of earnings and cash flows of the Borrower and its
Subsidiaries for such succeeding fiscal year, certified by the
principal accounting or financial officer of the Borrower;
(e) promptly, but in any event within five (5) days after the
Borrower or any of its Subsidiaries obtains knowledge of any of the
following, a statement of the chief executive, financial or accounting
officer of the Borrower setting forth in reasonable detail the nature
thereof and the action which the Borrower has taken and proposes to
take with respect thereto:
(i) the occurrence of any litigation, arbitration or
governmental investigation or proceeding not previously
disclosed by the Borrower pursuant hereto which has been
instituted or, to the knowledge of the Borrower or any of its
Subsidiaries, is threatened against, the Borrower or any of
its Subsidiaries or to which any of its properties, assets or
revenues is subject which, if adversely determined, might have
a Material Adverse Effect on the Borrower and its
Subsidiaries;
(ii) the occurrence of any circumstance which has a
reasonable likelihood of having a Material Adverse Effect on
the Borrower and its Subsidiaries;
(iii) any material adverse development which shall
occur in any litigation, arbitration or governmental
investigation or proceeding previously disclosed by the
Borrower;
(iv) the occurrence of any Default; and
(v) the occurrence of a Reportable Event (as defined
in ERISA) under, or the institution of steps by the Borrower
or any of its Subsidiaries to withdraw from, or the
institution by the PBGC or otherwise of any steps to
terminate, any employee benefit plan covered by Title IV of
such Act;
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(f) promptly upon the receipt thereof and in any event within
Five (5) Business Days, copies of all detailed financial and management
reports submitted to the Borrower by its independent public
accountants;
(g) as soon as it becomes available, but in any event within
ten (10) days of delivery to the Borrower, a copy of any management or
other letter issued by a public accounting firm or other management
consultants with respect to the Borrower's and the Subsidiaries'
financial or accounting systems or controls;
(h) the Borrower's and the Subsidiaries' responses to any of
the matters referenced in any letter issued by a public accounting firm
or other management consultants with respect to the Borrower's and the
Subsidiaries' financial or accounting systems or controls at such time
as the Borrower or the Subsidiaries deliver such response to such firm
or consultants, and upon receipt by the Borrower or the Subsidiaries of
any response thereto, a copy thereof to the Agent;
(i) as soon as they become available, but in any event, within
ten (10) days after the issuance thereof, the Borrower shall furnish to
the Agent copies of such other financial statements, proxy material and
reports as the Borrower shall send or make available to its
stockholders, and promptly upon the filing thereof, copies of all
reports and materials which the Borrower or any Subsidiary files with
any governmental commission (including without limitation, the SEC),
department or agency or with any domestic or foreign stock exchange or
with the NASD, including without limitation, copies of (i) any
registration statements, prospectuses and any amendments and
supplements thereto, and any regular and periodic reports (including
without limitation, reports on Form 10-K, Form 10-Q and Form 8-K) filed
by the Borrower or any Subsidiary with the SEC or any domestic or
foreign stock exchange or with the NASD; and (ii) any letters of
comment or correspondence with respect to filings or compliance matters
sent to the Borrower or any Subsidiary by any such governmental
commission (including without limitation, the SEC), department or
agency or any such domestic or foreign stock exchange or the NASD;
provided that the foregoing provisions shall not apply to reports,
materials, letters or correspondence (other than those filed with or
received from the SEC) filed or received by the Borrower or its
Subsidiaries in the ordinary course of business or which otherwise do
not involve matters that could result in a Material Adverse Effect; and
(j) such other information with respect to the financial
condition, business, property, assets, revenues and operations of the
Borrower or any of its Subsidiaries as the Agent may from time to time
reasonably request.
All financial statements delivered to the Agent pursuant to the
requirements of this subsection 6.2 (except where otherwise expressly indicated)
shall be prepared in accordance with GAAP on a consolidated basis. Together with
each delivery of financial statements required by clause (a) or (b) above, the
Borrower (and if requested by the Agent, any or all of
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its Subsidiaries) shall deliver to the Agent an officer's certificate, stating
that there exists no Default or Event of Default (or if any Event of Default or
Default exists, specifying in reasonable detail the nature thereof, the period
of existence thereof and what action the Borrower has taken or proposes to take
with respect thereto) and setting forth the computations for determining the
Borrower's compliance with the financial covenants contained in subsection 6.1
above. The Agent and the Banks acknowledge that, from and after the Closing
Date, the Borrower will be a reporting company under the Securities Exchange Act
of 1934, as amended, and that its Common Shares will be publicly traded, and
agree to keep all information acquired pursuant to this subsection 6.2 or under
any other provision of the Loan Documents, or as a result of any inspection
conducted in accordance with subsection 6.3 below, confidential; provided that
the Banks may, in their sole discretion, communicate such information (t) to any
holder of Subordinated Debt, (u) with the prior consent of the Borrower (not to
be unreasonably withheld), to any other Person in accordance with its customary
practices relating to routine trade inquiries, (v) to any court or regulatory
authority having jurisdiction over the Banks or any of them or as required by
law or legal process, (w) to any other Person in connection with the Banks' sale
of any interests or participations in the Liabilities, (x) any other Person in
connection with any litigation involving the Borrower and any Bank, (y) to
counsel, auditors or other professional advisors and to affiliates of any of the
Banks or (z) to any other Person in connection with the exercise of the Agent's
or the Banks' rights hereunder or under any of the other Loan Documents, it
being the intent of this sentence not to create rights in and to such documents
to any Person other than the Agent and the Banks; provided that the foregoing
restrictions shall not apply to any information that the Borrower has made
publicly available. The Borrower and each of the Subsidiaries authorize the
Agent to discuss the financial condition of the Borrower and its Subsidiaries
with the Borrower's independent certified public accountants and agree that such
discussion or communication shall be without liability to the Agent or the
Banks. Upon the Agent's review of any management or other letter issued by a
public accounting firm or other management consultants, the Borrower and its
Subsidiaries agree to address, in a manner reasonably satisfactory to the Agent,
any matter addressed therein or explain, to the Agent's reasonable satisfaction,
the positions of the Borrower with respect thereto why such matter will not be
addressed.
6.3 Inspection. The Agent and/or the Banks shall have the right, from
time to time hereafter upon reasonable notice, to call at the Borrower's or any
of its Subsidiaries' place of business (or any other place where the Collateral
or any information relating thereto is kept or located) during ordinary business
hours, and, without hindrance or delay (except to the extent that the rights of
third parties would be violated or unless an order from a competent court is
issued allowing enforcement of the Agent's rights despite the alleged violation
of the rights of such third parties), (a) to inspect, audit, check and make
copies of and extracts from the Borrower's or any of its Subsidiaries' books,
records, journals, orders, receipts and any correspondence and other data
relating to the Borrower's business or to any transactions between the parties
hereto, (b) to make such verification concerning the Collateral as the
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Agent may consider reasonable under the circumstances, and (c) to discuss the
affairs, finances and business of the Borrower with any officers, employees or
directors of the Borrower.
6.4 Conduct of Business. Except as provided herein, each of the
Borrower and its Subsidiaries shall maintain its legal existence, shall maintain
in full force and effect all licenses, permits, authorizations, bonds,
franchises, leases, patents, contracts, and other rights necessary or desirable
to the profitable conduct of its respective business, shall continue in, and
shall limit its operations to, the same general lines of business as those
currently conducted (which is providing catering or concession services at
recreational and leisure facilities, convention centers, schools and
institutions) except that CFM may engage in vending and manual dining services,
and comply with all applicable Laws, except for such Laws the violation of which
would not, in the aggregate, have a Material Adverse Effect on the Borrower's
financial condition, results of operations or businesses. The Borrower shall not
permit any default by the Borrower to occur under any mortgage or other Lien
that encumbers any real property leased by the Borrower or any Subsidiary. Each
of the Borrower and its Subsidiaries shall maintain, preserve and protect all
trade names, trade marks, copyrights and patents and all other property
necessary to the conduct of each of its businesses and keep all tangible
property in good repair, working order and condition, ordinary wear and tear
excepted.
6.5 Claims and Taxes. Each of the Borrower and its Subsidiaries agrees
to indemnify and hold the Agent and the Banks harmless from and against any and
all claims, demands, liabilities, losses, damages, penalties, costs, and
expenses (including reasonable attorneys' and other professionals' fees and
disbursements) relating to or in any way arising out of the possession, use,
operation or control of the assets of each of the Borrower and its Subsidiaries
(other than any such claims, demands, liabilities, losses, damages, penalties,
costs or expenses attributable to the gross negligence or wilful misconduct of
the Agent or the Banks or any of their respective officers, directors, employees
or agents). Each of the Borrower and its Subsidiaries shall pay or cause to be
paid all license fees, bonding premiums and related taxes and charges, and pay
or cause to be paid all of the real and personal property taxes of each of the
Borrower and its Subsidiaries, all assessments and charges of each of the
Borrower and its Subsidiaries, and all franchise, income, unemployment, use,
excise, old age benefit, withholding, sales and other taxes and other
governmental charges assessed against the Borrower or any of its Subsidiaries,
or payable by the Borrower or any of its Subsidiaries, at such times and in such
manner as to prevent any penalty from accruing or any Lien from attaching to its
property; provided however that the Borrower and its Subsidiaries shall have the
right to contest in good faith, by an appropriate proceeding promptly initiated
and diligently conducted, the validity, amount or imposition of any such tax,
assessment or charge, and upon such good faith contest, to delay or refuse
payment thereof, if (a) the Borrower or the applicable Subsidiary establishes
adequate reserves, in accordance with GAAP, to cover such contested taxes,
assessments or charges, and (b) such contest does not have a Material Adverse
Effect on the financial condition of the Borrower
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and its Subsidiaries, taken as a whole, the ability of the Borrower and its
Subsidiaries, taken as a whole, to pay any of the Liabilities, or the priority
or value of the Agent's Lien on the Collateral.
6.6 The Agent's and the Banks' Costs and Expenses as Additional
Liabilities. The Borrower shall reimburse each of the Banks and the Agent for
all expenses and fees paid or incurred by the Agent and the Banks in connection
with (a) the documentation, negotiation and closing of the Loans and other
transactions described herein and in the other Loan Documents, (b) any
amendment, waiver or consent executed in connection with this Agreement or any
of the other Loan Documents, and (c) the enforcement or preservation of the
Agent's or any Bank's rights under this Agreement and any of the other Loan
Documents, including without limitation appraisal, stamp, document, transfer
filing and recording fees and the reasonable fees and expenses of the Agent's
and the Banks' auditors, attorneys and paralegals, whether such expenses and
fees are incurred prior to or after the date hereof. All such costs and expenses
incurred by the Agent and the Banks with respect to the documentation,
negotiation, enforcement, collection and protection of the Agent's interests in
the Collateral, including without limitation the cost of such equipment and real
estate appraisals and environmental update inspections as may hereafter be
reasonably required by the Agent, shall be additional Liabilities of the
Borrower to the Banks, payable on demand or otherwise repaid as provided herein,
and secured by the Collateral.
6.7 Borrower's Liability Insurance. Each of the Borrower and its
Subsidiaries shall, at its expense, keep and maintain such public liability and
third party property damage insurance in such amounts and with such deductibles
as is reasonably acceptable to the Agent, and shall deliver to the Agent the
original (or a certified copy) of each policy of insurance and evidence of the
payment of all premiums therefor. Such policies of insurance shall contain an
endorsement providing that the insurance company will give the Agent at least
thirty (30) days prior written notice before any such policy or policies of
insurance shall be altered or cancelled.
6.8 Borrower's Insurance. Each of the Borrower and its Subsidiaries
shall, at its expense, keep and maintain its assets insured against loss or
damage by fire, theft, explosion, spoilage and all other hazards and risks
ordinarily insured against by other owners or users of such properties in
similar businesses in an amount at least equal to the full insurable value of
all such property which coverages shall include, without limitation, liquor
liability coverages. All such policies of insurance shall be in form and
substance reasonably satisfactory to the Agent and issued by an insurance
company reasonably satisfactory to the Agent, and shall have deductibles not
exceeding Twenty-Five Thousand and 00/100 Dollars ($25,000.00). Each of the
Borrower and its Subsidiaries shall deliver to the Agent the original (or a
certified copy) of each policy of insurance and evidence of payment of all
premiums therefor. All of the policies of insurance pertaining to the Borrower's
or any such Subsidiary's assets shall contain an endorsement, in form and
substance reasonably satisfactory to the Agent, showing all losses payable to
the Agent as provided below in this subsection 6.8; provided, that such policies
may show loss payees in addition to the Agent in connection with the lease or
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purchase money financing of equipment or real estate by the Borrower or a
Subsidiary, if such other loss payees are reasonably acceptable to the Agent
(and the Agent has approved same in writing) and if such other loss payees have
no interest in the proceeds of any loss relating to the Collateral, other than
the specific assets that are the subject of such lease or purchase money
financing. Such endorsement, or an independent instrument furnished to the
Agent, shall provide that such insurance company will give the Agent at least
thirty (30) days prior written notice before any such policy or policies of
insurance shall be altered or cancelled and that no act or default of the
Borrower or any of its Subsidiaries shall affect the right of the Agent to
recover under such policy or policies of insurance in case of loss or damage.
All insurance policies referred to in this subsection 6.8 shall name the Agent
as an additional loss payee with respect to all claims relating to the
Collateral resulting in payments of One Hundred Thousand and 00/100
($100,000.00) or less, and as additional insured and sole loss payee in respect
of each claim relating to the Collateral resulting in a payment under any such
insurance policy exceeding One Hundred Thousand and 00/100 Dollars
($100,000.00). Provided that no Default or Event of Default then exists, the
Agent agrees promptly upon its receipt thereof, to pay over to the Borrower the
proceeds of such payment to enable the Borrower to repair, restore, or replace
the Collateral subject to such claim. To the extent that the Borrower elects not
to repair, restore or replace such Collateral, any such proceeds in excess of
One Hundred Thousand and 00/100 ($100,000.00) shall be deposited with the Agent,
which deposit shall be invested by the Agent in Cash Equivalent Investments and
shall be held by the Agent as additional Collateral for the Liabilities. If the
Borrower certifies to the Agent, on or prior to thirty (30) days after receipt
by the Borrower or any of its Subsidiaries of such insurance proceeds that it
intends to use such insurance proceeds to construct replacement property or
repair the damaged property within three hundred sixty (360) days of the receipt
of such insurance proceeds, the Agent shall, if no Default has occurred and is
then continuing, release to the Borrower that part of the insurance proceeds to
be used for the aforementioned purposes. To the extent that the Borrower does
not provide such certification, all of such insurance proceeds shall be applied
to the prepayment of the Liabilities as set forth below. In addition, if any of
the insurance proceeds previously released are not in fact applied in the manner
specified in such certification, the Borrower shall pay to the Agent, on which
the date which is three hundred sixty-one (361) days after the receipt of such
insurance proceeds by the Borrower or any of its Subsidiaries, an amount equal
to the insurance proceeds released by the Agent to the Borrower pursuant to this
subsection 6.8 (less amounts actually spent for the purposes specified in such
certification) and such amount shall be applied to the prepayment of the
Liabilities. All such proceeds at any time on deposit with the Agent shall be
fully drawn down under this subsection 6.8 before the Banks shall be required to
make any new Guidance Loan. In addition, such proceeds may also be used, in the
Agent's sole discretion, to meet the Borrower's obligation to reimburse the
Banks as a result of any draw under any Letter of Credit. The Agent shall apply
any such proceeds not so used first to amounts due under the Guidance Loans, and
if any proceeds should remain thereafter, to the reduction of the Liabilities in
such manner as the Agent shall determine. If a Default or an Event of Default
exists, the Agent shall (a) hold the proceeds of such payment as Collateral for
the Loans until such Default or Event of Default shall no longer exist and then,
subject to the foregoing provisions of this subsection 6.8, pay over the
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same to the Borrower for the repair, restoration, or replacement of the
Collateral subject to such claim. The Borrower hereby directs all insurers under
such policies of insurance to pay all proceeds of insurance policies directly to
the Agent as and to the extent set forth above. The Borrower irrevocably makes,
constitutes and appoints the Agent (and all officers, employees or agents
designated by the Agent) as the Borrower's true and lawful attorney-in-fact for
the purpose, after and during the continuance of an Event of Default, of making,
settling and adjusting claims under all such policies of insurance, endorsing
the name of the Borrower or any of its Subsidiaries on any check, draft,
instrument or other item of payment received by the Borrower, or the Agent
pursuant to any such policies of insurance and making all determinations and
decisions with respect to such policies of insurance. If the Borrower or any of
its Subsidiaries, at any time or times hereafter, shall fail to obtain or
maintain any of the policies of insurance required above or to pay any premium
in whole or in part relating thereto, then the Agent, without waiving or
releasing any obligation or default by the Borrower hereunder, may at any time
or times thereafter (but shall be under no obligation to do so) obtain and
maintain such policies of insurance and pay such premiums and take any other
action with respect thereto which the Agent deems advisable, and the amount so
expended, together with interest thereon at the rate applicable to the Guidance
Loans, shall be part of the Liabilities, payable on demand or otherwise repaid
as provided herein and secured by the Collateral. Notwithstanding anything in
the subsection 6.8 to the contrary, in the event insurance proceeds result from
a casualty to property used in connection with a Facility Agreement, and such
Facility Agreement is no longer in force as of the date of payment of insurance
proceeds by the insurer or before such proceeds are used to repair, replace or
restore such property, then the full amount of such proceeds (up to the
outstanding amount of any Guidance Loan related to such Facility Agreement),
shall be paid to the Agent to retire such Guidance Loan, before the application
of the other provisions of this subsection 6.8.
6.9 Pension Plans. The Borrower shall, and shall (to the extent within
the control of the Borrower) cause each ERISA Affiliate to, (a) make
contributions to all of the Plans (including any Multiemployer Plans) in a
timely manner and in a sufficient amount to comply with the requirements of
ERISA; (b) comply with all material requirements of ERISA and the Tax Code which
relate to such Plans and Multiemployer Plans, the failure to comply with which
would if applicable to the Borrower or any ERISA Affiliate, have a Material
Adverse Effect on the Borrower; (c) notify the Agent immediately upon receipt by
the Borrower of any notice of the institution of any proceeding or other action
which may result in the termination of any Plans or Multiemployer Plans; and (d)
immediately notify the Agent of the occurrence of an ERISA Termination Event.
Neither the Borrower nor any of its Subsidiaries shall fail to make any payments
to any Multiemployer Plan that the Borrower or any ERISA Affiliate of the
Borrower or any of its Subsidiaries under ERISA may be required to make under
any agreement relating to any Multiemployer Plan or any Law pertaining thereto
except any payments being contested in good faith with respect to which the
Borrower has established adequate reserves.
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6.10 Notice of Suit. The Borrower shall, as soon as possible, and in
any event within five (5) Business Days after the Borrower learns of the
following, give written notice to the Agent of any proceeding(s) being
instituted or threatened to be instituted by or against the Borrower or, any of
its Subsidiaries in any federal, state, local or foreign court or before any
arbitration or mediation panel, commission or other regulatory body (federal,
state, local or foreign); provided, that the Borrower shall not be required to
notify the Agent of any such proceeding instituted or threatened to be
instituted unless such proceeding could, individually, or when aggregated with
other outstanding proceedings, if adversely determined, have a Material Adverse
Effect on the Borrower and its Subsidiaries.
6.11 Supervening Changes in Law. If, at any time or times hereafter,
there shall become effective any amendment to, deletion from or revision,
modification or other change in any Law, or the application or enforcement
thereof, materially and negatively affecting the Banks' extension of credit
described in this Agreement or the selling of interests or participations
therein or increasing the Banks' costs associated with the transactions
contemplated by this Agreement and the other Loan Documents, (a) if and to the
extent clause (b) of this subsection 6.11 is not applicable, then the Borrower
shall indemnify and hold the Agent and the Banks harmless from and against any
and all obligations, fees, liabilities, losses, penalties, costs, expenses and
damages, of every kind and nature, imposed upon or incurred by the Agent or the
Banks by reason of such amendment, deletion, revision, modification, or other
change, and (b), to the extent such amendment to, deletion from or revision,
modification or other change in Law, or the application or enforcement thereof,
requires that the Banks no longer carry or hold the Loans, Letters of Credit, or
any portion thereof, then the Borrower shall immediately pay to the Banks the
then outstanding balance of the Liabilities, and hold the Agent and the Banks
harmless from and against any and all obligations, fees, liabilities, losses,
penalties, costs, expenses and damages, of every kind and nature, imposed upon
or incurred by the Borrower by reason of the Banks' failure or inability to
comply with the terms of this Agreement or any of the other Loan Documents. The
Borrower's obligations under this subsection 6.11 shall survive repayment of the
Liabilities and termination of this Agreement and the other Loan Documents.
6.12 Environmental Notices. The Borrower and the Subsidiaries shall
promptly notify and furnish the Agent with a copy of any and all Environmental
Notices which would result in a Material Adverse Effect and any Environmental
Notice from any governmental agency or authority which are received by the
Borrower or any Subsidiary. The Borrower shall take prompt and appropriate
action in response to any and all such Environmental Notices and shall promptly
furnish the Agent with a description of the Borrower's response thereto.
6.13 Use of the Proceeds. Proceeds of the Loans shall be used solely
for the business purposes of the Borrower, consistent with the terms and
provisions of this Agreement and the other Loan Documents.
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6.14 Depository Accounts. Except to the extent otherwise
permitted by the Agent in writing, the Borrower shall maintain its primary
depository and operating accounts with UST.
6.15 Collateral Assignments of Licenses and Management Agreements. The
Borrower shall notify the Agent promptly upon the execution of any Facility
Agreement and shall provide such information in respect thereof as the Agent
shall reasonably request.
6.16 Application of Net Contract Proceeds. If, in any calendar year,
after giving effect to the provision contained in the last sentence of this
subsection 6.16, the Borrower or any Subsidiary receives Net Contract Proceeds
and such Net Contract Proceeds are in the amount of One Million and 00/100
Dollars ($1,000,000.00) or more, the Borrower or such Subsidiary shall apply the
amount of Net Contract Proceeds toward the acquisition or payment of Project
Costs required by a New Project or Contract Extension (as such terms are defined
in subsection 4.5 above). Pending such application, the Borrower or such
Subsidiary shall immediately deposit the full amount of such Net Contract
Proceeds with the Agent, which deposit shall be invested by the Agent in Cash
Equivalent Investments and shall be held by the Agent as additional Collateral
for the Liabilities. The Borrower shall have the right to draw down all or part
of such Net Contract Proceeds for the same purposes and subject to the same
terms and conditions as are applicable to Guidance Loans under subsection 2.2.
All Net Contract Proceeds at any time on deposit with the Agent shall be fully
drawn down under this subsection 6.16 before the Borrower shall make any request
for any Guidance Loan. In addition, such proceeds may also be used, in the
Agent's sole discretion, to meet the Borrower's obligations to reimburse the
Banks as a result of any draw under any Letter of Credit. If any such Net
Contract Proceeds are not drawn down prior to the earlier of the first
anniversary of the date on which they were deposited with the Agent or the
Termination Date, the Agent shall apply such Net Contract Proceeds first to
prepayment of Converted Guidance Loans, second to prepayment of Unconverted
Guidance Loans, and third, to the prepayment of Working Capital Loans. If any
proceeds should remain after application of the two previous sentences, such
proceeds shall be used to reduce the Liabilities in such manner as the Agent
determines in its sole discretion. The Borrower or any Subsidiary shall be
entitled to retain and utilize in its discretion Net Contract Proceeds less than
One Million and 00/100 Dollars ($1,000,000.00) in any calendar year which may be
received at any time by such Person.
6.17 Covenants in Subordinated Debt Documents. The Borrower and each of
its Subsidiaries hereby covenant to perform, comply with and be bound by for the
benefit of the Banks at all times all of its agreements, covenants, and
obligations in the Subordinated Debt Documents.
7. NEGATIVE COVENANTS.
Each of the Borrower and its Subsidiaries hereby covenants and agrees
that so long as any Liabilities remain outstanding, and (even if there shall be
no Liabilities outstanding) so long as this Agreement remains in effect:
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7.1 Encumbrances. The Borrower will not create, incur, assume or suffer
to exist or permit any of its Subsidiaries to create, incur, assume or suffer to
exist any Lien or other encumbrance of any nature whatsoever on any of its
assets, including without limitation the Collateral, other than: (a) Liens
securing the payment of taxes, either not yet due or the validity of which is
being contested in good faith by appropriate proceedings, and as to which the
Borrower or the applicable Subsidiary shall, if appropriate under GAAP, have set
aside on its books and records adequate reserves; provided that such contest
does not have a Material Adverse Effect on the ability of the Borrower to pay
any of the Liabilities or the priority or value of the Agent's Lien on the
Collateral; (b) deposits under worker's compensation, unemployment insurance,
social security and other similar Laws, or to secure the performance of bids,
tenders or contracts (other than for the repayment of borrowed money) or to
secure indemnity, performance or other similar bonds for the performance of
bids, tenders or contracts (other than for the repayment of borrowed money) or
to secure statutory obligations or surety or appeal bonds, or to secure
indemnity, performance or other similar bonds in the ordinary course of
business, and Liens securing judgments that have not resulted in an Event of
Default under clause (d) of subsection 8.1 hereof; (c) statutory Liens of
landlords, carriers, warehousemen, mechanics, materialmen or suppliers incurred
in the ordinary course of business for sums not yet delinquent; (d) Liens in
favor of the Agent and the Banks; (e) purchase money security interests arising
in connection with Equipment or real estate purchases or lease financings made
as permitted by this Agreement, not to exceed an aggregate of One Million and
00/100 Dollars ($1,000,000.00); (f) Liens described on Schedule 7.1; (g)
judgment Liens in existence less than thirty (30) days after the entry thereof
or with respect to which execution has been stayed or the payment of which is
covered in full (subject to a customary deductible) by insurance; and (h) Liens
other than those permitted in subsections 7.1(a)-(g) securing obligations in an
aggregate outstanding amount of no more than Two Hundred Fifty Thousand and
00/100 Dollars ($250,000.00).
7.2 Indebtedness. The Borrower shall not, and shall not permit any
Subsidiary to, incur, create, assume, become or be liable in any manner with
respect to, or permit to exist, any Indebtedness, except: (a) the Liabilities;
(b) trade obligations and normal accruals in the ordinary course of business not
yet due and payable, or with respect to which the Borrower or the applicable
Subsidiary is contesting in good faith the amount or validity thereof by
appropriate proceedings, and then only to the extent that the Borrower or the
applicable Subsidiary has set aside on its books adequate reserves therefor, in
accordance with GAAP; (c) purchase money Indebtedness incurred to finance the
purchase or lease of Equipment, subject to an aggregate limit on such
Indebtedness outstanding of One Million and 00/100 Dollars ($1,000,000.00); (d)
Indebtedness of the Borrower to any Subsidiary or of any Subsidiary to the
Borrower or any other Subsidiary; (e) unsecured guaranties of the Borrower of
the Indebtedness for borrowed money incurred by either Special Texas Corporation
for the purpose of obtaining or maintaining any concessions or food services
management agreement or other recreational food and beverage services contract
to be performed entirely within the State of Texas, provided the Borrower
continues to act as manager under the Texas Management Agreement and the total
amount of such guaranties shall not exceed Two Hundred Thousand and 00/100
Dollars ($200,000.00) in the aggregate; (f) Indebtedness of the
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Borrower or a Subsidiary in respect of performance, bid or similar bonds related
to Facility Agreements, in a principal amount not to exceed Ten Million and
00/100 Dollars ($10,000,000.00) in the aggregate at any time; (g) other
Indebtedness incurred after the Closing Date in an aggregate principal amount
outstanding at any time not to exceed One Million and 00/100 Dollars
($1,000,000.00); and (h) Indebtedness existing on the Closing Date and reflected
on Schedule 7.2.
7.3 Mergers and Consolidations. Except as allowed under subsection 7.4,
each of the Borrower and its Subsidiaries shall not enter into any transaction
of merger or consolidation, or liquidate, wind up or dissolve (or suffer any
liquidation or dissolution), or convey, sell, lease, transfer or otherwise
dispose of, in one transaction or a series of transactions, all or substantially
all of its business, property or tangible or intangible assets, whether now
owned or hereafter acquired, except that any Subsidiary may merge or consolidate
with, or convey, sell, lease, transfer or dispose of assets to, the Borrower or
another Subsidiary and thereafter dissolve (provided that in the case of a
merger or consolidation involving the Borrower, the Borrower is the surviving
corporation); and except that any Subsidiary of the Borrower may merge or
consolidate with any other Person with which the Borrower is permitted to merge
or consolidate (provided that the Subsidiary is the surviving corporation).
7.4 Acquisitions. Neither the Borrower nor any of its Subsidiaries
shall acquire any stock of any corporation or ownership interest in any other
entity, or acquire all or substantially all of the assets of, or such of the
assets as would permit the transferee to continue any one or more integral
business operations of, any Person. Notwithstanding the preceding sentence to
the contrary, (i) the Borrower or a Subsidiary may acquire stock of a
corporation which, as a result of such acquisition, becomes a Subsidiary (or if
any applicable, an Offshore Subsidiary) provided (a) that such Subsidiary (or if
any applicable, such Offshore Subsidiary) becomes a Guarantor of all of the
Liabilities; (b) such corporation is sufficiently capitalized and (c) if the
total valuation of such corporation (based on stock price and face amount of
issued and assumed debt) is Four Million and 00/100 Dollars ($4,000,000.00) or
more, the approval of the Designated Banks is obtained, and (ii) the Borrower or
a Subsidiary may acquire assets of any Person, as referred to above, provided
that if the total value of the assets so acquired (based on purchase price and
face amount of issued and assumed debt) is Four Million and 00/100 Dollars
($4,000,000.00) or more, the approval of the Designated Banks is obtained.
The parties hereto acknowledge and agree that (a) Fine Host
International is a party to an agreement with F&B International Company Limited,
pursuant to which, among other things, Fine Host International may acquire an
interest in Fine Host Asia, a joint venture that may be organized in accordance
with the laws of Thailand (Queen Sirikit National Convention Center)(said joint
venture is hereinafter referred to as "Fine Host Asia"), and (b) Fine Host Asia
shall not, at any time, become a Subsidiary unless and until the Borrower has
caused Fine Host Asia to comply with all of the applicable provisions contained
herein, including without limitations, the provisions of subsection 3.1 above.
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7.5 Disposal of Property. Neither the Borrower nor any of its
Subsidiaries shall sell, lease, transfer or otherwise dispose of any of its
properties, assets and rights to any Person (other than the Borrower or a
Subsidiary) except: (a) sales of Inventory in the ordinary course of business;
(b) sales of property being replaced in the ordinary course of business by other
property with a fair market value equal to or greater than the property being so
replaced; (c) sales or disposal of obsolete or unused Equipment having a value
of less than Twenty-Five Thousand and 00/100 Dollars ($25,000.00) per fiscal
year of the Borrower; (d) subject to subsection 6.16, sales or transfers
pursuant to the termination of a Facility Agreement which will not result in any
extraordinary gains or losses pursuant to GAAP (including the prepayment of any
Note Receivable or receipt of any Net Contract Proceeds, subject to the terms of
the Assignment of Notes Receivable and Net Contract Proceeds executed and
delivered to the Agent); or (e) sales or disposal of Equipment having a net book
value as of such sale or disposition aggregating not more than Five Hundred
Thousand and 00/100 ($500,000.00) since the Closing Date. If any of the
Equipment is sold, transferred or otherwise disposed of as herein provided, and
such sale, transfer or disposition is made in connection with the purchase by
the Borrower of replacement Equipment, the Borrower shall use the proceeds of
such sale, transfer or disposition solely to finance the purchase by the
Borrower of such replacement Equipment and shall deliver to the Agent written
evidence of the use of the proceeds for such purchase. All replacement Equipment
purchased by the Borrower or any of its Subsidiaries shall be free and clear of
all Liens, except for those of the Agent and except for purchase money security
interests arising out of such purchases to the extent permitted under subsection
7.1.
7.6 Investments or Loans. The Borrower will not, and will not permit
any of its Subsidiaries to, make, incur, assume or suffer to exist any
Investment in any other Person, except:
(a) Investments existing on the Closing Date and
identified in Schedule 7.6 ("Ongoing Investments");
(b) Cash Equivalent Investments;
(c) Without duplication, Investments permitted as
Indebtedness pursuant to subsection 7.2;
(d) in the ordinary course of business, Investments by
the Borrower in any of its Subsidiaries, or by any such Subsidiary in
any of its Subsidiaries, by way of contributions to capital or loans
or advances; and
(e) other Investments made or committed to be made in any
fiscal year of the Borrower pursuant to or necessary (in the reasonable
opinion of the Borrower) in connection with any Facility Agreement
which do not aggregate in excess of the amount of Nineteen Million and
00/100 Dollars ($19,000,000.00) for the fiscal year ending December 25,
1996 and for each fiscal year thereafter;
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provided, however, that
(i) to the extent Investments are made or committed to be made in any
fiscal year of the Borrower in an aggregate amount less than the maximum amount
permitted for such fiscal year as provided above in this clause (e), the
Investments which the Borrower or its Subsidiaries may make or commit to make in
the next following fiscal year of the Borrower shall be increased by Fifty
Percent (50%) of the amount of the permitted Investments not so made or
committed to be made in such immediately preceding fiscal year (it being agreed
that such Investments may not be carried forward to any further succeeding
fiscal years of the Borrower).
(ii) no portion of any Investments so carried forward in any fiscal
year of the Borrower shall be used until the entire amount of Investments
permitted to be made or committed to be made in such fiscal year as provided
above in this clause (e) shall have been used;
(iii) any Capital Expenditures made pursuant to subsection 7.8 shall
reduce, dollar-for-dollar, any Investments permitted to be made pursuant to this
clause (e) (it being agreed that such reduction shall be applied first against
the Investments permitted to be made or committed to be made as provided above
in this clause (e) before reducing any carry-forward amount); and
(iv) the amount of Investments permitted to be made as provided above
in this clause (e) shall not be reduced by the amount of any Net Contract
Proceeds which the Borrower has notified the Agent in writing prior to the
application thereof, are being applied pursuant to this clause (e); and
provided further, however, that no Investment otherwise permitted by clause (d)
or (e) shall be permitted to be made if, immediately before or after giving
effect thereto, any Default shall have occurred and be continuing.
7.7 Guaranties. Neither the Borrower nor any of its Subsidiaries shall
guarantee, endorse or otherwise in any way become or be responsible for
obligations of any other Person (including without limitation any officer,
director, employee or stockholder of the Borrower or such Subsidiary, but
excluding the Borrower and its Subsidiaries), whether by agreement to purchase
the Indebtedness of any other Person or through the purchase of goods, supplies
or services, or maintenance of working capital or other balance sheet covenants
or conditions, or by way of stock purchase, capital contribution, advance or
loan for the purpose of paying or discharging any Indebtedness or obligation of
such other Person or otherwise, except (a) endorsements of negotiable
instruments for collection in the ordinary course of business, (b) performance
bonds given in connection with the entry by the Borrower or a Subsidiary into a
Facility Agreement, bonds necessary to submit bids for a Facility Agreement, or
similar bonds or agreements, and (c) guaranties or bonds by the Borrower or any
of its Subsidiaries required by any Person other than the Borrower or any
Affiliate in connection with obtaining or
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maintaining a License necessary for a Facility Agreement. All bonds and
agreements encompassed under clauses (b) and (c) of the preceding sentence as of
the date hereof are listed on Schedule 7.7. Nothing in this subsection 7.7 is
intended to limit the exceptions to Indebtedness, Investments, or Loans which
are permitted under subsections 7.2 and 7.6.
7.8 Capital Expenditure Limitations. The Borrower will not, and will
not permit any of its Subsidiaries to, make, or commit to make, Capital
Expenditures in any fiscal year of the Borrower, except in connection with
Guidance Loans and except for Capital Expenditures which do not aggregate in
excess of the amount of Nineteen Million and 00/100 Dollars ($19,000,000.00) for
the fiscal year ending December 25, 1996 and for each fiscal year thereafter;
provided, however, that
(i) to the extent Capital Expenditures are made or committed
to be made in any fiscal year of the Borrower in an aggregate amount
less than the maximum amount permitted for such fiscal year as provided
above, the Capital Expenditures which the Borrower or its Subsidiaries
may make or commit to make in the next following fiscal year of the
Borrower shall be increased by Fifty Percent (50%) of the amount of the
permitted Capital Expenditures not so made or committed to be made in
such immediately preceding fiscal year (it being agreed that such
Capital Expenditures may not be carried forward to any further
succeeding fiscal years of the Borrower);
(ii) no portion of any Capital Expenditures so carried forward
in any fiscal year of the Borrower shall be used until the entire
amount of Capital Expenditures permitted to be made or committed to be
made in such fiscal year as provided above shall have been used; and
(iii) any Investments made pursuant to clause (e) of
subsection 7.6 shall reduce, dollar-for-dollar, any Capital
Expenditures permitted to be made pursuant to this subsection 7.8 (it
being agreed that such reduction shall be applied first against the
Capital Expenditures permitted to be made or committed to be made as
provided above before reducing any carry-forward amount); and
(iv) the amount of Capital Expenditures permitted to be made
as provided above shall not be reduced by the amount of any Net
Contract Proceeds which the Borrower has notified the Agent in writing,
prior to the application thereof, are being applied pursuant to this
subsection 7.8.
7.9 Distributions. Neither the Borrower nor any of its Subsidiaries
shall pay any dividends (other than stock dividends, provided that stock
dividends paid with respect to Stock which is subject to Pledge Agreements to
the Agent shall be subject to the terms of such Pledge Agreement) or
distributions, either in cash or in kind, on any class of its capital stock,
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nor make any distribution on account of its stock, nor redeem, purchase or
otherwise acquire, directly or indirectly, any of its stock; provided, however,
any Subsidiary shall be permitted to make distributions or pay dividends to the
Borrower or to its immediate parent.
7.10 Compensation. None of the Borrower or any of its Subsidiaries
shall pay compensation, directly or indirectly, whether in cash or in property
(including fringe benefits, and whether in respect of stock ownership,
consulting or other services or for any other reason whatsoever), to any
Affiliate of the Borrower except as set forth in Schedule 7.10 or as disclosed
in the Registration Statement and except that the provisions of this subsection
7.10 shall not apply to reasonable payments or employee benefits made to
employees or officers of the Borrower or any Subsidiary, as determined in good
faith by the Board of Directors of the Borrower or, in the case of directors, to
reasonable and customary directors' fees, in each case in the ordinary course of
business.
7.11 Transactions with Affiliates. Other than as set forth on Schedule
7.11, and except as permitted by subsection 7.10 or as disclosed in the
Registration Statement neither the Borrower nor any of its Subsidiaries shall
loan, contribute or otherwise transfer any cash or property to any Affiliate of
the Borrower or any of its Subsidiaries or enter into any transaction, including
without limitation the purchase, sale or exchange of property or the rendering
of any service to any Affiliate of the Borrower, or any Affiliate of such
Subsidiary, except that transactions with Affiliates of the Borrower which are
at arm's length, are for fair value and are in the ordinary course of the
Borrower's and such Affiliate's business shall be permitted.
7.12 Prepayment of Other Liabilities. The Borrower shall not directly
or indirectly prepay, purchase, redeem, retire, defease or otherwise acquire, or
make any optional payment on account of any principal of or any interest on or
premium payable in connection with the optional repayment, redemption or
retirement of, any of its Indebtedness (including but not limited to
Subordinated Debt) except for (i) the Liabilities; (ii) any obligations related
to a Facility Agreement which results in the prepayment in full of the
corresponding and related Guidance Loan; and (iii) mandatory prepayments and
other scheduled payments required under any Indebtedness that is permitted under
this Agreement.
7.13 Modification of Indebtedness. The Borrower will not permit the
modification or waiver of or any change in any provisions of any agreement
relating to Indebtedness for borrowed money of the Borrower, including, without
the consent of the Banks, the negotiation or renegotiation of any provisions of
any agreement with the holders of the Subordinated Debt, if in any such case,
such modification or waiver or change (taken as a whole) would be adverse to the
Borrower's interests or the rights and interests of the Agent and the Banks.
7.14 Amendment of Certificate or Articles of Incorporation or By-Laws.
Neither the Borrower nor any of its Subsidiaries shall amend its Certificate or
Articles of Incorporation or organization, or By-Laws, change its fiscal
year-end, or adopt or alter any preferred stock terms or preferences if such
amendment, adoption, or alteration would (i) adversely affect the
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ability of the Borrower and its Subsidiaries, taken as a whole, to repay the
Liabilities; (ii) result in a Material Adverse Change to the value of the
Collateral or the Banks' ability to enforce its rights and remedies under this
Agreement or any other Loan Document; or (iii) result in a Material Adverse
Change to the Borrower.
7.15 ERISA Termination Event. The Borrower shall not permit any ERISA
Termination Event to occur, or suffer any ERISA Termination Event to exist, if,
in either case, such ERISA Termination Event could have a Material Adverse
Effect on the Borrower.
7.16 Subordinated Debt Documents. Neither the Borrower nor any of
its Subsidiaries shall violate or permit violation of any covenant in the
Subordinated Debt Documents.
7.17 CFM Notes. Neither the Borrower nor any of its Subsidiaries will
consent under Section 9 of the CFM Notes to the sale, assignment, pledge,
hypothecation, encumbrance or other transfer or disposition of all or any
portion of the CFM Notes by the holders thereof.
8. DEFAULT, RIGHTS AND REMEDIES OF THE AGENT.
8.1 "Event of Default" shall mean the occurrence or existence of
any one or more of the following events:
(a) the Borrower fails to pay any of the Liabilities when such
Liabilities are due or are declared due, whether at stated maturity, by
acceleration or otherwise, within five (5) days of the date due;
(b) the Borrower, any of its Subsidiaries or any Guarantor
fails or neglects to perform, keep or observe any of the covenants,
conditions, promises or agreements contained in this Agreement or in
any of the other Loan Documents within ten (10) days after the date of
notice by the Agent of the failure to perform, keep, or observe such
covenant, condition, promise, or agreement (provided that there shall
be no such ten (10) day grace period for failure to comply with any
covenant in Section 7 hereof), or any of the Loan Documents are
unenforceable in whole or in part in accordance with their terms;
(c) any warranty or representation now or hereafter made by
the Borrower, any of its Subsidiaries, or any Guarantor pursuant to
this Agreement or any of the other Loan Documents is untrue, incorrect
or incomplete in any material respect, or any schedule, certificate,
statement, report, financial data, notice, or writing furnished at any
time by the Borrower, any of its Subsidiaries, or any Guarantor to any
Bank pursuant to or in connection with the Loans is untrue, incorrect
or incomplete in any material respect, on the date as of which the
facts set forth therein are stated or certified or restated or
recertified;
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(d) judgments or orders requiring aggregate payments in excess
of Five Hundred Thousand and 00/100 Dollars ($500,000.00) shall be
rendered against the Borrower or any of its Subsidiaries, and such
judgments or orders shall remain unsatisfied or undischarged and in
effect for thirty (30) consecutive days without a stay of enforcement
or execution, provided that this clause (d) shall not apply to the
extent that any judgment for which the Borrower or such Subsidiary, as
applicable, is insured and to the extent to which the insurer has
admitted, in writing, liability for the amount thereof;
(e) a notice of Lien, levy or assessment is filed or recorded
with respect to all or a material part of the Collateral by the United
States, or any department, agency or instrumentality thereof, or by any
state, county, municipality or other governmental agency, or any taxes
or debts owing at any time or times hereafter to any one or more of
them become a Lien, upon all or a material part of the Collateral,
provided that this clause (e) shall not apply to any Liens, levies, or
assessments which are being contested in good faith (provided the
Borrower has complied with the provisions of clauses (a) and (b) of
subsection 6.5);
(f) all or any material part of the Collateral is attached,
seized, subjected to a writ or distress warrant, or is levied upon, or
comes within the possession of any judgment creditor, receiver,
trustee, custodian or assignee for the benefit of creditors;
(g) a proceeding under any Insolvency Law is filed against the
Borrower or any of its Subsidiaries and such proceeding is not
dismissed within sixty (60) days of the date of its filing, or a
proceeding under any Law is filed by the Borrower or any of its
Subsidiaries, or the Borrower or any of its Subsidiaries files an
answer admitting the material allegations of a petition filed against
it, or the Borrower or any of its Subsidiaries makes an assignment for
the benefit of creditors, or the Borrower or any of its Subsidiaries
takes any corporate or other action to authorize any of the foregoing;
(h) the Borrower or any of its Subsidiaries voluntarily
or involuntarily dissolves or is dissolved except as permitted by
subsection 7.3, or terminates or is terminated;
(i) the Borrower or any of its Subsidiaries becomes
Insolvent, or admits in writing its inability, or fails generally, to
pay its debts as they become due;
(j) the Borrower or any of its Subsidiaries is enjoined,
restrained, or in any way prevented from conducting all or any material
part of its business affairs;
(k) a material default by the Borrower or any of its
Subsidiaries, shall occur (and any applicable cure period shall have
expired) under any Facility Agreement or related agreement, document or
instrument, whether heretofore, now or hereafter existing between the
Borrower, such Subsidiary or any other Person unless, within five
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(5) Business Days of such default, the Borrower provides to the Agent a
certificate (together with any other documents reasonably required by
the Agent) from the chief financial officer or president of the
Borrower that the Borrower and its Subsidiaries, taken as a whole,
notwithstanding termination of such Facility Agreement or related
agreement, document, or instrument, shall continue to meet, and shall
in the foreseeable future continue to meet, the financial covenants in
subsection 6.1;
(l) the Borrower or any of its Subsidiaries shall default in
making any payment when due, whether at stated maturity, by
acceleration or otherwise, on any obligation for borrowed money in an
aggregate amount in excess of Five Hundred Thousand and 00/100 Dollars
($500,000.00) or the holder of any such obligation shall become
entitled to cause such obligation to become due prior to its stated
date of maturity;
(m) there shall be a Change in Control of the Borrower;
(n) there shall occur a Material Adverse Change affecting the
Borrower, which could reasonably be expected to have a Material and
Adverse Effect on the value of the Collateral or the ability of the
Borrower to repay the Liabilities;
(o) there shall occur any loss, theft, substantial damage or
destruction of any item or items of Collateral ("Loss") if (x) the
amount of such Loss with respect to which an insurer has not admitted,
in writing, liability within a reasonable time (as reasonably
determined by the Agent) after the occurrence of such Loss, exceeds One
Million and 00/100 Dollars ($1,000,000.00) in the aggregate, (y) any
such Loss results in a material interruption of the business of the
Borrower and its Subsidiaries, or (z) the aggregate of deductibles for
Losses exceeds One Million and 00/100 Dollars ($1,000,000.00);
(p) the Borrower or any of its Subsidiaries shall be convicted
of any crime for which forfeiture of a material amount of its property,
or payment of a material penalty, will be required, or for which a
license may be revoked, terminated, or suspended, and such revocation,
termination, or suspension would result in a Material Adverse Effect on
the Borrower;
(q) any Guaranty shall at any time after its execution
and delivery and for any reason cease to be in full force and effect or
shall be declared null and void;
(r) any Security Agreement shall at any time after its
execution and delivery and for any reason cease: (A) to create a valid
and perfected first priority security interest in and to a material
portion of the Collateral covered by such Security Agreement; or (B) to
be in full force and effect or shall be declared null and void; or
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(s) any Pledge Agreement shall at any time after its execution
and delivery and for any reason cease: (A) to create a valid and
perfected first priority security interest in and to the property
purported to be subject to such Pledge Agreement; or (B) to be in full
force and effect or shall be declared null and void.
8.2 Termination of Obligation to Make Loans and Acceleration. Upon the
occurrence of an Event of Default referred to in subsection 8.1(g), all of the
Liabilities shall automatically, without notice of any kind, be immediately due
and payable and the Agent shall have no further obligation to make Loans
hereunder. Upon the occurrence of any other Event of Default, the Banks shall
have no further obligation to make Loans hereunder and any or all of the
Liabilities may, at the option of the Agent, acting in accordance with the
provisions of subsection 9.2(h), and without presentment, demand, protest or
notice of any kind, be declared, and thereupon shall become, immediately due and
payable, provided that the Agent shall give notice of such acceleration to the
Borrower.
8.3 Rights and Remedies Generally. Upon the occurrence of an Event of
Default, the Agent shall have, in addition to any other rights and remedies
contained in this Agreement or in any of the other Loan Documents, all of the
rights and remedies of a secured party under the Code or other applicable Laws,
all of which rights and remedies shall be cumulative and non-exclusive, to the
extent permitted by Law. The Agent shall further have as a matter of right and
without notice to the Borrower or any of its Subsidiaries, unless otherwise
required by applicable law, and without regard to the adequacy or inadequacy of
any Collateral as security for the Liabilities or the interest of the Borrower
or any of its Subsidiaries therein, the right to apply to any court of competent
jurisdiction to appoint a receiver or receivers of the Borrower or any of its
Subsidiaries of all or any portion of the property of the Borrower or any of its
Subsidiaries comprising the Collateral and to have such receiver or receivers
appointed, and each of the Borrower and its Subsidiaries hereby irrevocably
consents to such appointment and waives notice of any application therefor
(except as may be required by law). Any such receiver or receivers shall have
all the usual powers and duties of receivers in like or similar cases and all
the powers and duties of the Agent provided in this Agreement and the other Loan
Documents including, without limitation and to the extent permitted by law, and
by such documents, the right to operate under existing licenses, franchises and
permits granted or issued to the Borrower or any of its Subsidiaries and the
right to enter into licenses, sublicenses, leases and subleases of all or any
part of the Collateral to the extent the Borrower or any of its Subsidiaries
possessed such rights, and shall continue as such and exercise all such powers
until the date of confirmation of sale of the Collateral unless such
receivership is sooner terminated.
8.4 Entry Upon Premises and Access to Information. Upon the occurrence
and during the continuance of an Event of Default, the Agent shall have the
right, to the extent permitted by Law, to enter upon the premises of each of the
Borrower and its Subsidiaries where the Collateral is located (or is believed to
be located) without any obligation to pay rent to the Borrower or any of its
Subsidiaries, or, except to the extent that the rights of third parties would be
violated, until an appropriate order from a competent court is issued, any
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other place or places where the Collateral is believed to be located and kept,
and remove the Collateral therefrom to the premises of the Agent, for such time
as the Agent may desire, in order effectively to collect or liquidate the
Collateral, or the Agent may require the Borrower or any of its Subsidiaries to
assemble the Collateral and make it available to the Agent at a place or places
to be designated by the Agent. Upon the occurrence and during the continuance of
an Event of Default, the Agent shall have the right to obtain access to the data
processing equipment, computer hardware and software of the Borrower or any of
its Subsidiaries relating to the Collateral and to use all of the foregoing and
the information contained therein in any manner the Agent deems appropriate for
the purposes of protecting the rights of the Agent hereunder and its rights to
the Collateral; and the Agent shall have the right to notify post office
authorities to change the address for delivery of the mail of the Borrower and
each Subsidiary to an address designated by the Agent and to receive, open and
process all mail addressed to the Borrower and each such Subsidiary.
8.5 Sale or Other Disposition of Collateral by the Agent. The net
proceeds realized by the Agent upon any such sale or other disposition, after
deduction for the expense of retaking, holding, preparing for sale, selling or
the like and the reasonable attorneys' and paralegals' fees and legal expenses
incurred by the Agent in connection therewith, shall be applied as provided
herein toward satisfaction of the Liabilities. The Agent shall account to each
of the Borrower and its Subsidiaries for any surplus realized upon such sale or
other disposition, and each of the Borrower and its Subsidiaries shall remain
liable for any deficiency. The commencement of any action, legal or equitable,
or the rendering of any judgment or decree for any deficiency, shall not affect
the Agent's security interest in the Collateral until the Liabilities are fully
paid. Each of the Borrower and its Subsidiaries agrees that the Agent has no
obligation to preserve rights to the Collateral against any other parties.
8.6 Waiver of Demand. Demand, presentment, protest and notice of
nonpayment are hereby waived by each of the Borrower and its Subsidiaries. To
the extent permitted by Law the Borrower and its Subsidiaries also waive the
benefit of all valuation, appraisal and exemption laws.
8.7 Waiver of Notice. UPON THE OCCURRENCE AND CONTINUANCE OF A DEFAULT,
EACH OF THE BORROWER AND ITS SUBSIDIARIES HEREBY WAIVES ALL RIGHTS TO NOTICE AND
HEARING OF ANY KIND PRIOR TO THE EXERCISE BY THE AGENT OR THE BANKS OF ITS OR
THEIR RIGHTS TO REPOSSESS THE COLLATERAL WITHOUT JUDICIAL PROCESS OR TO REPLEVY,
ATTACH OR LEVY UPON THE COLLATERAL WITHOUT PRIOR NOTICE OR HEARING, TO THE
EXTENT PERMITTED IN THE JURISDICTION IN WHICH SUCH COLLATERAL IS LOCATED.
8.8 Advice of Counsel. Each of the Borrower and its Subsidiaries hereby
acknowledges that each of them has received advice from its counsel with respect
to this transaction and this Agreement, including without limitation any waivers
contained herein.
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9. THE AGENT
9.1 Appointment of the Agent.
(a) Each Bank hereby irrevocably appoints and authorizes UST as the
Agent of such Bank under the Loan Documents and each such Bank hereby
irrevocably authorizes UST, as the Agent for such Bank, subject to the terms and
provisions hereof, to take such action on its behalf, and to the extent of its
interest therein, under the provisions of the Loan Documents and to exercise
such powers and perform such duties as are exercisable and performable by the
Agent by the terms of the Loan Documents, together with such other powers as are
reasonably incidental thereto. Such powers shall include, without limitation, to
advance, administer, collect, enforce foreclosure on security for, and otherwise
service the Loans and the Letters of Credit, including, without limitation,
subject to the provisions of the Loan Documents, the protection, perfection and
enforcement of the Agent's rights as secured creditor under this Agreement and
the other Loan Documents, and, subject to the express terms and conditions
hereof and under the Loan Documents, to take such action and exercise such
powers and discretion on the Banks' behalf under this Agreement and the other
Loan Documents as shall be reasonably necessary or advisable for such purposes.
As to any matter not provided for herein, the Agent shall be fully protected in
exercising any discretion or taking any action upon the written instructions of
the Banks. Notwithstanding any provision to the contrary elsewhere in this
Agreement or in any of the other Loan Documents, the Agent shall act solely as
agent of the Banks and the Agent shall not have any duties or responsibilities,
except those expressly set forth herein or in the other Loan Documents, nor any
fiduciary relationship with any of the Banks; no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or the other Loan Documents or otherwise shall exist against the Agent
and the Agent shall not be required to take any action in its capacity as agent
of the Banks hereunder that exposes it to personal liability or that is contrary
to applicable law.
(b) The Agent hereby accepts such appointment and agrees to act as the
agent of the Banks in accordance with this Agreement. In the performance of its
function under this Agreement, the Agent shall act solely as agent of the Banks,
and the Agent shall not assume, nor shall it be deemed to have assumed, any
obligation or relationship of agency or trust with or for the Borrower or any of
its Subsidiaries.
9.2 Administration of the Loans/Letters of Credit.
(a) The Agent shall hold the original Loan Documents, with the
exception of the Notes delivered to Sumitomo, SSB, BBC, Mellon and BNY in
accordance with this Agreement (of which the Agent will hold only a copy), and
administer the Loan Documents in the name of the Banks for the pro rata benefit
of the Banks, subject to the terms of this Section 9.
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(b) Each Loan under the Working Capital Line and the Guidance Line of
Credit shall be made by the Agent on the Banks' behalf in accordance with the
terms hereof and in accordance with this Agreement, and all requests for Loans
or Letters of Credit and other documents to be provided by the Borrower or any
of its Subsidiaries in connection with requests for Loans or Letters of Credit
shall be received by the Agent on the Banks' behalf before 11:00 a.m. (New York
City time) on the date each Loan is required to be made to the Borrower, except
as otherwise provided in the applicable LIBOR provisions, if any, contained in
the Notes. Upon receipt of a request for a Loan under the Working Capital Line
or the Guidance Line of Credit, the Agent shall notify the Banks by 1:00 p.m. on
such date of such request and of each Bank's pro rata share of the requested
Loan. Not later than 2:30 p.m. (New York City time) on the date each Loan is
required to be made to the Borrower, each Bank shall make available its pro rata
share of such Loan, in Federal or other funds immediately available in Boston,
to the Agent at its address stated in subsection 10.13. Unless the Agent
determines that any applicable condition precedent specified in this Agreement
for such Loan has not been satisfied, and additionally in the case of each
Guidance Loan, subject to the approval of the Designated Banks, to the extent
that approval of the Designated Banks is required by subsection 4.5 of this
Agreement, the Agent will make the funds so received from the Banks available to
the Borrower at the Agent's aforesaid address.
(c) Unless the Agent shall have received notice from any Bank prior to
the date of any Loan that any Bank will not make available to the Agent its
share of such Loan, the Agent may assume that each Bank will make its pro rata
share available to the Agent on the date of such Loan in accordance with
subsection 9.2(b) above and the Agent may, in reliance upon such assumption,
make available to the Borrower on such date a corresponding amount on behalf of
the Banks. If and to the extent that any Bank shall not have so made such share
available to the Agent, and the Agent, relying on such assumption, shall have
made available to the Borrower any such Bank's pro rata share of such Loan, from
funds of the Agent, each such Bank agrees to repay to the Agent forthwith on
demand such corresponding amount, together with interest thereon, for each day
from the date such amount is made available by the Agent to the Borrower until
the date such amount is repaid to the Agent by each such Bank, at the overnight
Federal funds rate. If any such Bank shall repay to the Agent such corresponding
amount, such amount so repaid shall constitute such Bank's pro rata share of any
such Loan for purposes of this Agreement. Nothing herein shall be deemed to
relieve each Bank from its obligation to fulfill its commitments under this
Agreement or to prejudice any rights which the Borrower may have against any of
the Banks as a result of any default by any of the Banks hereunder; provided
however, that no Bank shall be responsible for the failure of any other Bank to
make available to the Agent such Bank's pro rata share of any such Loan; and
provided further, however, that a default by one Bank in providing its pro rata
share of any Loan shall not by itself relieve any other Bank of its obligation
to make its pro rata share of such Loan.
(d) Intentionally omitted.
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(e) The Agent shall collect and receive all amounts paid in connection
with the Loans and the Letters of Credit, whether as principal, interest, fees,
late charges, reimbursement of draws under the Letters of Credit, proceeds of or
recoveries under insurance policies, amounts realized as the result of enforcing
the Loan Documents, income from the sale of any collateral or proceeds of any
refinancing of the Loans, or otherwise, in trust for the benefit of the Banks in
proportion to their respective interests therein and shall credit all such
amounts to the Loan Account to the extent provided for in this Agreement and in
the other Loan Documents. The Agent will render to the Banks on a monthly basis
a written statement of the Loan Account. Amounts so received as payments on
Notes held by Sumitomo, SSB, BBC, Mellon and BNY shall be deemed payments by the
Borrower on account of such Notes, notwithstanding any contrary provision
contained in such Notes regarding place or manner of payment.
(f) After any funds received in connection with the Loans or
reimbursement of draws under Letters of Credit have been credited to the Loan
Account as collected funds, the Agent shall remit to each Bank its respective
pro rata shares of such amounts. Subject to the next two sentences, such
remittances to the Banks shall be made by wire transfer of Federal funds,
pursuant to instructions provided by the Banks, on the same day as the Agent
shall have received such collected funds. If any Bank then owes funds to the
Agent in connection with the Loans, the Letters of Credit or this Agreement, the
Agent may apply such sums to the payments due to the Agent. Notwithstanding the
foregoing, if any payment from the Borrower is returned after the Agent has made
a pro rata distribution to the Banks, at the Agent's option, (i) each Bank shall
repay the Agent promptly upon notice of its pro rata distribution or (ii) the
Agent may offset each Bank's pro rata share of the amount of such returned or
uncollected payment against any future payment due to the Banks.
(g) The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder unless the Agent has
received notice from a Bank, the Borrower or any Subsidiary referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default." In the event that the Agent receives such a
notice, the Agent shall give notice thereof to the Banks. The Agent shall take
such action with respect to such default or Event of Default as shall be
reasonably directed by the Designated Banks; provided that unless and until the
Agent shall have received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Banks. The Banks shall each cooperate with the Agent if and to
the extent that the Agent determines that the Banks' direct involvement is
required in any enforcement action, and shall take such action, at the Banks'
pro rata expense.
(h) Except as set forth below, (i) the Agent shall have full discretion
in connection with the administration and collection of the Loans and amounts
funded under the Letters of Credit, including the right to make all decisions
regarding exercise, protection, perfection or enforcement of the rights, powers
and remedies of the Agent and the Banks hereunder or under the other Loan
Documents, and the right to make all other determinations or requests
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that the Loan Documents provide are to be made by "the Banks", (ii) the Agent
may take such action, at the Banks' pro rata expense, as the Agent deems
reasonably necessary or advisable to exercise, protect, perfect or enforce all
rights, powers and remedies of the Agent and the Banks under this Agreement or
the other Loan Documents, without the consent or approval of the Banks, and
(iii) the Agent shall, for the pro rata benefit of the Banks, receive, collect,
hold and dispose of, in accordance with the provisions of this Agreement and the
other Loan Documents, the Collateral and any other properties or assets
delivered or paid over to "the Banks" in accordance with the provisions of this
Agreement and the other Loan Documents. The Agent shall not, however, without
the prior written consent of those Banks holding no less than Sixty-Five Percent
(65%) of the Loans (the "Designated Banks"), (A) consent to the making of any
Guidance Loan for which consent is required under subsection 4.5, (B) alter or
amend the Loan Documents or waive compliance with any provision thereof, (C)
release any Collateral above the levels permitted under subsection 7.5, so long
as the value of such Collateral so released does not exceed One Hundred Thousand
and 00/100 Dollars ($100,000.00) per occasion of such release and does not
represent a total release of Collateral having a value of Five Hundred Thousand
and 00/100 Dollars ($500,000.00) per fiscal year of the Borrower, (D) declare an
acceleration of the Loans upon the occurrence of an Event of Default, (E)
commence collateral enforcement or foreclosure proceedings, or (F) consent to
the assignment or transfer by the Borrower or any of Borrower's or any of its
Subsidiaries' rights and obligations under any Loan Document. The Agent shall
not, without the prior written consent of all of the Banks, (u) release any
Collateral above the levels permitted under subsection 7.5, and which also
exceed the levels permitted to be released by the Designated Banks under
subsection 9.2(h)(C), (v) release any Guarantor which is a Subsidiary, (w)
extend the amortization schedule of repayment of any Loan, or change the rates
or the fees payable on the Loans, or extend the time of payment of interest
accruing on the Loans or extend the time or waive any requirement for the
reduction or termination of the commitment of the Banks, (x) extend the final
scheduled maturity date, or reduce the principal amount, of any Loan or Note,
(y) increase the commitment of the Banks with respect to the total amount of the
Loans or (z) amend this subsection 9.2(h).
(i) If the Agent, acting in good faith and in a commercially reasonable
manner pursuant to the terms of this Agreement or the other Loan Documents,
shall foreclose or enforce the security interests of the Agent in the
Collateral, upon the authority of the Designated Banks, the Agent shall be
authorized to bid, itself or through its nominee, on behalf of the Banks at any
foreclosure sale up to the then outstanding balance of the Loans, including
principal, interest, costs and attorneys' fees, and in the event that the Agent
is the successful bidder at such sale, title to the property foreclosed shall be
held by the Agent for the pro rata benefit of the Banks. The Banks shall share
all costs and expenses incurred in the holding and management of any such
property on a pro rata basis.
(j) The Agent shall deliver to the Banks copies of all financial
statements and other related information and all material notices and documents
received by the Agent from the Borrower or its Subsidiaries.
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(k) All books and records concerning the Loans and the Letters of
Credit which are maintained by the Agent shall be available for inspection by
any Bank during the Agent's normal business hours upon reasonable prior request.
9.3 Agent's Duty of Care.
The Agent agrees that, in acting as agent of the Banks hereunder, it
will exercise the same degree of care in advancing, administering, collecting
and enforcing the Loans, including, without limitation, the management,
protection and perfection of the Collateral for the Loans, that it exercises in
the ordinary course of its day-to-day business in advancing, administering,
collecting and enforcing other loans for its own account. Neither the Agent nor
its officers, directors, agents, attorneys or employees shall be liable to the
Banks for any acts or omissions in making, administering, collecting or
enforcing the Loans unless such acts or omissions constitute gross negligence or
wilful misconduct. Neither the Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates shall be responsible in any
manner to any Bank for any recitals, statements, representations or warranties
made by any party to the Loan Documents or in any certificate, report, statement
or other document referred to or provided for in, or received by the Agent under
or in connection with, this Agreement or in the other Loan Documents or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or any of the other Loan Documents or for any failure of any
party to this Agreement or to the other Loan Documents or any other Person to
perform its obligations thereunder. The Agent shall not be under any obligation
to any Bank to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement or the
other Loan Documents, or to inspect the properties, books or records of any
party to this Agreement or to the other Loan Documents. The Agent shall not be
under any liability or responsibility whatsoever, to any party to this Agreement
or to the other Loan Documents or any other Person as a consequence of any
failure or delay in performance, or any breach, by any Bank of any of its
obligations under any of the Loan Documents. Without limiting the generality of
the foregoing, the Agent (i) may consult with legal counsel, including, without
limitation, counsel for the Borrower, independent public accountants and other
experts elected by it, and shall not be liable for any action taken or omitted
to be taken by it in good faith in accordance with the advice of such counsel,
accountants or experts, and (ii) shall incur no liability by acting or omitting
to act upon any writing or other communication believed by it to be genuine and
signed or sent by the proper party.
9.4. Reliance by Agent.
The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any writing, resolution, notice, consent, certificate, affidavit,
opinion, letter, cablegram, telegram, telecopy, telex, telefax or teletype
message, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to any party to the Loan Documents), independent accountants
and
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other experts selected by the Agent. The Agent shall not be under any duty to
examine or pass upon the validity, effectiveness or genuineness of the Loan
Documents or any instrument, document or communication furnished pursuant
thereto or in connection therewith, and the Agent shall be entitled to assume
that the same are valid, effective and genuine, have been signed or sent by the
proper parties and are what they purport to be. The Agent shall be fully
justified in failing or refusing to take any action under the Loan Documents
unless it shall first receive such advice or concurrence of the Banks as it
deems appropriate. The Agent shall in all cases be fully protected in acting, or
in refraining from acting, under the Loan Documents in accordance with a request
of the Banks, and such request and any action taken or failure to act pursuant
thereto shall be binding upon the Banks.
9.5 Notice of Default.
The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default unless the Agent has received
written notice thereof from a Bank, the Borrower or its Subsidiaries. In the
event that the Agent receives such a notice, the Agent shall promptly give
notice thereof to the Banks. The Agent shall take such action with respect to
such Default or Event of Default as it is instructed so to do in accordance with
this Section 9.
9.6 Non-Reliance on Agent and Other Banks.
Each Bank expressly acknowledges that neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates has made
any representations or warranties to it and that no act by the Agent
hereinafter, including any review of the affairs of any party to the Loan
Documents, shall be deemed to constitute any representation or warranty by the
Agent to any Bank. Each Bank represents to the Agent that it has, independently
and without reliance upon the Agent or any other Bank, and based on such
documents and information as it has deemed appropriate, made its own evaluation
of and investigation into the business, operations, property, financial and
other condition and creditworthiness of the Borrower and its Subsidiaries and
made its own decision to enter into this Agreement. Each Bank also represents
that it will, independently and without reliance upon the Agent or any other
Bank and based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit analysis, evaluations and decisions in
taking or not taking action under this Agreement or under any other Loan
Document, and to make such investigation as it deems necessary to inform itself
as to the business, operations, property, financial and other condition and
creditworthiness of the Borrower and its Subsidiaries. Except for notices,
reports and other documents expressly required to be furnished to the Banks
hereunder by the Agent, the Agent shall not have any duty or responsibility to
provide any Bank with any credit or other information concerning the business,
operations, property, financial and other condition or creditworthiness of the
Borrower and its Subsidiaries which may come into the possession of the Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.
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9.7 Indemnification.
(a) To the extent the Agent is not reimbursed and indemnified by the
Borrower, its Subsidiaries or the Limited Guarantors, the Banks will reimburse
and indemnify the Agent, in proportion to their respective pro rata shares in
the Loans, from and against any and all expenses, losses, claims, damages or
liabilities that are incurred by the Agent, including, but not limited to,
reasonable attorneys' fees and expenses, caused by, or in any way resulting from
or relating to, any action taken or omitted to be taken by the Agent in any way
relating to or arising out of the performance of the agency contemplated by this
Section 9; provided however, that the Banks shall not by liable to the Agent for
payment of any portion of such expenses, losses, claims, damages or liabilities
resulting solely from the gross negligence or willful misconduct of the Agent.
(b) Without limiting the foregoing, each Bank agrees to reimburse the
Agent promptly upon demand for its pro rata share of any out-of-pocket expenses,
including, without limitation, reasonable counsel fees, incurred by the Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement of, or legal advice in respect of rights
or responsibilities under, this Agreement and the other Loan Documents, to the
extent that the Agent is not reimbursed for each Bank's pro rata share of such
expenses by the Borrower.
9.8 Successor Agent. The Agent may resign the agency constituted hereby
only with the prior written consent of the Designated Banks and the Borrower,
but may not assign its agency without the consent of the other Banks. Upon any
such resignation, the Banks shall determine which of them shall become the
successor agent hereunder. Any successor agent shall act as Agent for the Banks,
and shall have the same rights, powers, privileges and duties with respect to
the Banks as the Agent has hereunder, and the Agent shall be discharged from its
duties and obligation hereunder as the Agent of the Banks with respect to all
periods after the successor agent shall have accepted such appointment by the
Banks. In the event that the Agent or its assets are taken over by any state or
federal agency having jurisdiction over the Agent or its assets, the Banks
holding more than a majority of the outstanding balance of the Loans may appoint
another Bank as successor to the Agent.
9.9 Rescission of Loan Payments. The Banks agree that this Section 9
shall continue to be effective or be reinstated, as the case may be, if at any
time payment of all or any part of the Loans or reimbursement of all or part of
draws under Letter of Credit, in any case received while the parties hereto were
parties to this Agreement, is rescinded or otherwise must be restored to the
Borrower, any of its Subsidiaries, or their respective creditors or
representatives, upon the insolvency, bankruptcy or reorganization of the
Borrower or any of its Subsidiaries, or otherwise, all as though such payments
had not been made.
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9.10 Sharing of Payments. If any Bank shall obtain any payment of any
sums due under the Loans or any reimbursement of draws on Letters of Credit,
whether such payment is voluntary of involuntary, or received through the
exercise of any right of setoff or banker's lien, by realization upon security
or enforcement of any right under the Loan Documents or otherwise, in excess of
its respective pro rata share thereof, the other Banks shall forthwith purchase
for cash, without recourse or warranty from the other such interests in the
Loans as shall be necessary to cause the Banks to share the excess payment
ratably with each other, but if any excess payment is afterward recovered from
such purchaser, the additional interest shall be rescinded and the amount paid
restored, without interest, to the extent of such recovery. If any Bank or the
Agent fails to make any payment required hereunder to any Bank or the Agent,
then such Bank or the Agent shall pay interest at the Federal Funds rate to the
paying party.
9.11 Representations and Warranties of the Other Banks and of the
Agent. Sumitomo, SSB, BBC, Mellon and BNY, each as to itself only, hereby
represents and warrants to the Agent that (i) it is a sophisticated buyer with
respect to the Loans, has adequate information concerning the business and
financial condition of the Borrower and its Subsidiaries to make an informed
decision regarding its participation in the Loans hereunder, and has
independently and without reliance upon the Agent, and based on such information
as it has deemed appropriate, made its own analysis and decision to enter into
this Agreement and (ii) it has received copies of all of the Loan Documents it
has requested. The Agent represents and warrants to Sumitomo, SSB, BBC, Mellon
and BNY that, to the best of its knowledge, it has sent to such Banks all of the
Loan Documents, including material waivers and amendments thereto, in its
possession.
9.12. Notices. All communications between the Agent and the Banks or
notices in connection herewith shall be addressed to the Agent or to the
appropriate Bank at its address set forth on page one of this Agreement. All
such communications and notices shall be sent in the manner provided in
subsection 10.13 of this Agreement, and shall be effective in the time frames
provided in subsection 10.13, except that notice by telecopy shall be permitted
and shall be deemed received on the same Business Day when sent.
10. MISCELLANEOUS.
10.1 Waiver. The Agent's failure, at any time or times hereafter, to
require strict performance by each of the Borrower and its Subsidiaries of any
of the provisions of this Agreement shall not waive, affect or diminish any
right of the Agent thereafter to demand strict compliance and performance
therewith. Any suspension or waiver by the Agent of a Default or an Event of
Default by the Borrower or any of its Subsidiaries under this Agreement shall
not waive, affect or diminish any right of the Agent thereafter to demand strict
compliance and performance therewith. Any suspension or waiver by the Agent of a
Default or an Event of Default by the Borrower or any of its Subsidiaries under
this Agreement or a default under any of the other Loan Documents shall not
suspend, waive or affect any other Default or Event of Default by the Borrower
or any of its Subsidiaries under
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this Agreement or default under any of the other Loan Documents whether the same
is prior or subsequent thereto and whether of the same or of a different kind or
character. None of the undertakings, agreements, warranties, covenants and
representations of the Borrower or any of its Subsidiaries contained in this
Agreement or any of the other Loan Documents and no Default or Event of Default
by the Borrower or any of its Subsidiaries under this Agreement or default under
any of the other Loan Documents shall be deemed to have been suspended or waived
by the Agent unless such suspension or waiver is in writing signed by an officer
of the Agent, and directed to the Borrower or any of its Subsidiaries specifying
such suspension or waiver. The Agent shall not be deemed to have waived any of
its rights upon or under this Agreement or any of the other Loan Documents
unless such waiver is in writing and signed by an officer of the Agent. No delay
or omission on the part of the Agent in exercising any other right shall operate
as a waiver of such right or any other right. A waiver on any one occasion shall
not be construed as a bar to or waiver of the assertion of any right on any
future occasion.
10.2 Attorneys' Fees and Expenses. If at any time or times hereafter
the Agent employs counsel in connection with protecting or perfecting the
Agent's security interest in the Collateral or in connection with any matters
contemplated by or arising out of this Agreement, whether (a) to commence,
defend, or intervene in any litigation or to file a petition, complaint, answer,
motion or other pleadings, (b) to take any other action in or with respect to
any suit or proceeding (Insolvency or otherwise), (c) to consult with officers
of the Agent to advise the Agent, (d) to protect, collect, lease, sell, take
possession of, or liquidate any of the Collateral, or (e) to attempt to enforce
or to enforce any Lien on any of the Collateral or to attempt to enforce or to
enforce any rights of the Agent to collect any of the Liabilities, then in any
of such events, all of the attorneys' and paralegals' reasonable fees arising
from such services, and any reasonable expenses, costs and charges relating
thereto, together with interest at the rate prescribed herein for the Guidance
Loans, shall be part of the Liabilities, payable on demand and secured by the
Collateral.
10.3 Expenditures by the Agent. Except as permitted herein, in the
event the Borrower or any of its Subsidiaries shall fail to pay taxes,
insurance, assessments, costs or expenses which the Borrower or any of its
Subsidiaries is, under any of the terms hereof or of any of the other Loan
Documents, required to pay, or fails to keep the Collateral free from Liens, or
fails to perform under any agreement related to or for which a Letter of Credit
has been issued or a Guidance Loan has been made, the Agent may, in its sole and
absolute discretion, make expenditures for any or all of such purposes, and the
amount so expended, together with interest thereon at the rate prescribed herein
for the Guidance Loans, shall be part of the Liabilities, payable on demand and
secured by the Collateral.
10.4 Custody and Preservation of Collateral. The Agent and each Bank
shall be deemed to have exercised reasonable care in the custody and
preservation of any of the Collateral in its possession if it takes such action
for that purpose as the Agent or such Bank would with respect to similar
property held in such Bank's name.
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10.5 Reliance by the Banks. Each of the Borrower and its Subsidiaries
hereby acknowledges that the Banks, in entering into this Agreement and
agreeing, to the extent provided herein, to make Loans and otherwise extend
credit to the Borrower or its Subsidiaries hereunder, have relied upon the
accuracy of the covenants, agreements, representations and warranties made
herein by each of the Borrower and its Subsidiaries and the information
delivered by each of the Borrower and its Subsidiaries to the Banks in
connection herewith (including without limitation the Financials).
10.6 Successors and Assignees. This Agreement shall be binding upon and
inure to the benefit of the Borrower, its Subsidiaries, the Banks, the Agent and
their respective successors and assigns, except that neither the Borrower nor
any of its Subsidiaries may assign or transfer any of its rights or obligations
under this Agreement and any assignment or transfer by any Bank of its rights or
obligations under this Agreement or any Loan Document must be made in compliance
with subsection 10.16 (and any purported assignment in violation of subsection
10.16 shall be null and void).
10.7 Applicable Law; Severability. THIS AGREEMENT SHALL BE CONSTRUED IN
ALL RESPECTS IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS AND DECISIONS OF THE
COMMONWEALTH OF MASSACHUSETTS, WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES.
Whenever possible, each provision of this Agreement shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Agreement shall be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provisions or the
remaining provisions of this Agreement.
10.8 Submission to Jurisdiction; Jury Trial Waiver; Waiver of Bond.
EACH OF THE BORROWER AND ITS SUBSIDIARIES HEREBY CONSENTS TO THE JURISDICTION OF
ANY LOCAL, STATE OR FEDERAL COURT LOCATED WITHIN SUFFOLK COUNTY, MASSACHUSETTS
AND WAIVES ANY OBJECTION WHICH THE BORROWER MAY HAVE BASED ON IMPROPER VENUE OR
FORUM NON CONVENIENS TO THE CONDUCT OF ANY PROCEEDING IN ANY SUCH COURT AND EACH
OF THE BORROWER AND ITS SUBSIDIARIES CONSENTS THAT ALL SERVICE OF PROCESS UPON
IT BE MADE BY REGISTERED MAIL OR MESSENGER DIRECTED TO IT AT THE ADDRESS SET
FORTH IN SUBSECTION 10.13 AND THAT SERVICE SO MADE SHALL BE DEEMED TO BE
COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT OR THREE (3) DAYS AFTER THE SAME
SHALL HAVE BEEN POSTED TO THE BORROWER'S OR SUCH SUBSIDIARY'S ADDRESS. EACH OF
THE BORROWER AND ITS SUBSIDIARIES HEREBY WAIVES, TO THE EXTENT PERMITTED BY LAW,
TRIAL BY JURY, IN ANY LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
AGREEMENT, ANY OF THE OTHER LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREIN OR THEREIN AND WAIVES ANY BOND OR SURETY OR SECURITY UPON
SUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF THE AGENT, THE
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BANKS OR ANY OF THEM, AND LIKEWISE WAIVES, TO THE EXTENT PERMITTED BY LAW, ANY
BOND OR SURETY WHICH MIGHT BE REQUIRED OF THE AGENT, THE BANKS OR ANY OF THEM IN
ANY LEGAL PROCEEDING. NOTHING CONTAINED IN THIS SUBSECTION 10.8 SHALL AFFECT THE
RIGHT OF EACH BANK TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW
OR AFFECT THE RIGHT OF EACH BANK TO BRING ANY ACTION OR PROCEEDING AGAINST THE
BORROWER OR ITS PROPERTY IN THE COURTS OF ANY OTHER PROPER JURISDICTION.
10.9 Application of Payments. After the occurrence and during the
continuance of an Event of Default, any contrary provision contained in this
Agreement or the other Loan Documents notwithstanding, the Agent shall have the
continuing exclusive right to apply and reapply any and all payments received at
any time or times hereafter, whether with respect to the Collateral or
otherwise, against the Liabilities in such manner as the Agent may deem
advisable, any entry by the Agent upon its books and records notwithstanding,
and each of the Borrower and its Subsidiaries hereby irrevocably waives the
right to direct the application of any and all payments at any time or times
hereafter received by the Agent from the Borrower or any of its Subsidiaries or
with respect to any of the Collateral in such circumstances.
10.10 Marshalling; Payments Set Aside. No Bank shall be under any
obligation to marshall any assets in favor of the Borrower or any of its
Subsidiaries or any other Person or against or in payment of any or all of the
Liabilities. To the extent that the Borrower or any of its Subsidiaries makes a
payment or payments to the Agent or any Bank or the Agent or any Bank enforces
the Liens or exercises its rights of setoff, and such payment or payments or the
proceeds of such enforcement or setoff or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid to a trustee, receiver or any other party under any bankruptcy or
other law, then to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied shall be revived and continued in full force
and effect as if such payment had not been made or such enforcement or setoff
had not occurred.
10.11 Section Titles. The section and subsection titles contained in
this Agreement are for reference purposes only and shall be without substantive
meaning or content of any kind whatsoever and are not a part of the agreement
between the parties.
10.12 Continuing Effect. This Agreement, the Agent's Liens on the
Collateral, and all of the other Loan Documents shall continue in full force and
effect so long as any Liabilities shall be owed to the Banks, and (even if there
shall be no Liabilities outstanding) so long as this Agreement has not been
terminated as provided herein.
10.13 Notices. Except as otherwise expressly provided herein, any
notice required or desired to be served, given or delivered hereunder shall be
in writing, and shall be deemed to have been validly served, given or delivered
upon the earlier of (a) personal delivery to the address set forth below, (b) in
the case of mailed notice, three (3) days after deposit in the
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United States mails, with proper postage for certified mail, return receipt
requested, prepaid, or (c) in the case of notice by Federal Express or other
reputable overnight courier service, one (1) Business Day after delivery to such
courier service, addressed to the party to be notified as follows:
(i) If to the Agent, at:
USTrust
30 Court Street
Boston, Massachusetts 02108
Attention: Michael D. O'Neill, Vice President
(ii) If to the Borrower and/or its Subsidiaries, at:
Fine Host Corporation
3 Greenwich Office Park
Greenwich, CT 06831
Attention: Richard E. Kerley, President
or to such other Person or address as each party designates to the other in the
manner herein prescribed. Notices sent by or to the Borrower shall be deemed to
include its Subsidiaries for all purposes under this Agreement.
10.14 Equitable Relief. Each of the Borrower and its Subsidiaries
recognizes that, in the event the Borrower and its Subsidiaries fails to
perform, observe or discharge any of the Liabilities under this Agreement, any
remedy at law may prove to be inadequate relief to the Banks. Therefore, the
Borrower agrees that the Banks, if the Banks so request, shall be entitled to
temporary and permanent injunctive relief in any such case without the necessity
of proving actual damages.
10.15 Entire Agreement; Amendments. This Agreement, together with the
Loan Documents executed in connection herewith, and all exhibits and schedules
attached hereto or thereto, constitutes the entire Agreement among the parties
with respect to the subject matter hereof, and supersedes all prior written oral
understandings with respect thereto. This Agreement may be amended only by a
written instrument signed by the Borrower and the Designated Banks, except that
any amendment that would (i) make any change or permit any action specified in
the last sentence of subsection 9.2(h) or (ii) amend this subsection 10.15,
shall be signed by the Borrower and all of the Banks.
10.16 Participations and Assignments.
10.16.1 Participations. Any Bank may, at any time, sell to one
or more financial institutions or other entities ("Loan Participants")
participating interests in any Loan owing to such Bank, any commitment
of such Bank or any other interest of
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such Bank hereunder and under the other Loan Documents; provided,
however, that such Bank obtains the prior written consent of the Agent,
which consent shall not be unreasonably withheld or delayed. In the
event of any such sale by a Bank of a participating interest to a Loan
Participant, (i) such Bank's obligations under this Agreement to the
other parties to this Agreement shall remain unchanged, (ii) such Bank
shall remain solely responsible for the performance thereof, (iii) such
Bank shall remain the holder of any such Loan for all purposes under
this Agreement and the other Loan Documents, (iv) the Borrower 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
and the other Loan Documents, and (v) no Loan Participant under any
participation shall have any right to approve any amendment or waiver
of any provision of any Loan Document.
10.16.2 Assignments. Any Bank may, at any time, with the
written consent of the Borrower and the Agent (which in each case shall
not be unreasonably withheld or delayed) to any other Bank or any
affiliate thereof or to an additional bank or financial institution
(including without limitation, (an "Assignee") all or any part of its
rights and obligations under this Agreement and the other Loan
Documents pursuant to an Assignment and Assumption, substantially in
the form of Exhibit M, executed by such Assignee and such assigning
Bank (and in the case of an Assignee that is not then a Bank or an
affiliate thereof, by the Borrower and the Agent) and delivered to the
Agent for its acceptance and recording in the Register; provided that
in the case of any such assignment to an additional bank or financial
institution, if such assignment is of less than all of the rights and
obligations of the assigning Bank, then the sum of the aggregate
principal amount of the Loans and the aggregate amount of the unused
Commitments remaining with the assigning Bank must not be less than
Five Million and 00/100 Dollars ($5,000,000.00)(or such lesser amount
as may be agreed to by the Borrower and the Agent). Upon such
execution, delivery, acceptance and recording, from and after the
effective date determined pursuant to such Assignment and Assumption,
(i) the Assignee thereunder shall be a party hereto and, to the extent
provided in such Assignment and Assumption, have the rights and
obligations of a Bank hereunder with a Commitment as set forth therein,
and (ii) the assigning Bank thereunder shall, to the extent provided in
such Assignment and Assumption, be released from its obligations under
this Agreement (and, in the case of an Assignment and Assumption
covering all or the remaining portion of an assigning Bank's rights and
obligations under this Agreement, such assigning Bank shall cease to be
a party hereto). In addition to the assignments permitted under this
subsection 10.16.2, any Bank may assign and pledge all or any portion
of its pro rata share in the Loans to any Federal Reserve Bank as
collateral security pursuant to Regulation A of the Board of Governors
of the Federal Reserve System and any Operating Circular issued by such
Federal Reserve Bank. No such assignment shall release the assigning
Bank from its obligations hereunder.
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10.16.3 The Agent shall maintain a copy of each Assignment and
Assumption delivered to it and a register (the "Register") for the
recordation of the names and addresses of the Banks and the Commitments
of, and principal amounts of the Loans owing to, each Bank from time to
time. The entries in the Register shall be conclusive, in the absence
of manifest error, and the Borrower, the Agent and the Banks shall
treat each Person whose name is recorded in the Register as the owner
of a Loan or other obligation hereunder as the owner thereof for all
purposes of this Agreement and the other Loan Documents,
notwithstanding any notice to the contrary. Any assignment of any Loan
or other obligation hereunder (whether or not evidenced by a Note)
shall be effective only upon appropriate entries with respect thereto
being made in the Register. The Register shall be available for
inspection by the Borrower or any Bank at any reasonable time and from
time to time upon reasonable prior notice.
10.16.4 Processing Fee. Upon its receipt of an Assignment and
Assumption executed by an assigning Bank and an Assignee (and, in the
case of an Assignee that is not then a Bank or an affiliate thereof, by
the Borrower and the Agent), together with, in the case of an Assignee
that is not then a Bank or an affiliate thereof, payment to the Agent
of a processing fee of Two Thousand Five Hundred and 00/100 Dollars
($2,500.00), the Agent shall (i) promptly accept such Assignment and
Assumption and (ii) on the effective date determined pursuant thereto
record the information contained therein in the Register and give
notice of such acceptance and recordation to the Banks and the
Borrower.
10.17 Changes in Accounting Principles. (a) If any changes in
accounting principles from those used in the preparation of the Financials are
hereafter occasioned by the promulgation of rules, regulations, pronouncements,
or opinions of, or required by, the Financial Accounting Standards Board or the
American Institute of Certified Public Accountants (or successors thereto or
agencies with similar functions), or there shall occur any change in the
Borrower's or any Subsidiary's fiscal or tax years and, as a result of any such
changes, there shall result a change in the method of calculating any of the
financial covenants, negative covenants, standards, or other terms or conditions
found in this Agreement or any of the other Loan Documents, or (b) if the
Borrower, for reasonable business purposes, shall desire to change such
accounting principles or the application thereof (which change shall be
consistent with accounting principles then in effect pursuant to rules,
regulations, pronouncements, or opinions of the Financial Accounting Standards
Board or the American Institute of Certified Public Accountants) and such
desired change would result in a change in the method of calculating any of the
financial covenants, negative covenants or other terms and conditions found in
this Agreement or any of the other Loan Documents, then the parties hereto agree
to enter into negotiations in order to amend such provisions and the definition
of GAAP, set forth in subsection 1.1 so as to reflect equitably such changes
with the desired result that the criteria for evaluating the financial condition
and performance of the Borrower and the Subsidiaries shall be the same after
such changes as if such changes had not been made.
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<PAGE>
10.18 Indemnity. Each of the Borrower and its Subsidiaries agrees to
indemnify and hold the Agent and each Bank and the officers, directors,
employees and Affiliates of the Agent and such Bank harmless from and against
any claims, demands, losses, damages, penalties, costs and expenses to which the
Agent, such Bank, its subsidiaries or any such Persons or Affiliates may become
subject, insofar as such claims, demands, losses, damages, penalties, costs and
expenses arise out of or by reason of any investigation, litigation or other
proceedings related to the transactions contemplated by this Agreement, any of
the other Loan Documents, and to reimburse the Agent, each Bank and each such
Person and Affiliate, upon demand, for any legal or other expenses incurred in
connection with investigating or defending any such claims, demands, losses,
damages, penalties, costs and expenses; provided, however, that each of the
Borrower and its Subsidiaries shall not be liable for any such claims, demands,
losses, damages, penalties, costs and expenses arising out of any such action
taken by the Agent or by the Banks or any such Person or Affiliate to the extent
that the same shall be determined by a court of competent jurisdiction to have
constituted gross negligence or willful misconduct of the party to be
indemnified. Without limiting the foregoing, the Borrower and each of its
Subsidiaries shall indemnify and hold harmless the Agent's and each Bank's audit
officers, directors, employees and Affiliates from and against any claims,
demands, penalties, costs and expenses associated with Environmental Laws,
Hazardous Substances, and any covenants, representations and warranties relating
thereto contained in this Agreement, no matter how arising, and all matters
listed in Schedule 5.23. The obligations of each of the Borrower and its
Subsidiaries under this subsection 10.18 shall survive repayment of the
Liabilities and the other Loan Documents.
10.19 Representations and Warranties, etc. Anything to the contrary
contained herein notwithstanding, (i) each representation and warranty contained
in this Agreement or any of the other Loan Documents shall survive the execution
and delivery of this Agreement and the other Loan Documents and the making of
the Loans and the repayment of the Liabilities hereunder, (ii) each
representation and warranty contained in this Agreement and, except as otherwise
provided herein, each other Loan Document shall be remade on the date of each
Loan made hereunder, and (iii) each representation and warranty and other
covenant or obligation of Borrower or any Subsidiary contained in this Agreement
or any other Loan Document is made jointly and severally by the Borrower and
each of its Subsidiaries.
10.20 Treatment of Certain Information. The Borrower (a) acknowledges
that services may be offered or provided to it (in connection with this
Agreement or otherwise) by each Bank or by one or more of their respective
subsidiaries or affiliates and (b) acknowledges that information delivered to
each Bank by the Borrower may be provided to each such subsidiary and affiliate.
10.21 Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or be otherwise within the limitations of, another covenant shall not avoid
the occurrence of a Default or Event of Default if such action is taken or
condition exists.
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<PAGE>
10.22 Time of the Essence. Time and punctuality shall be of the essence
with respect to this Agreement, but no delay or failure of the Agent or any Bank
to enforce any of the provisions herein contained and no conduct or statement of
the Agent or any Bank shall waive or affect any of the Agent's or any Bank's
rights hereunder.
10.23 Closing Date. The Closing (the "Closing") under this Agreement
shall occur (subject to all of the conditions contained herein) as of the date
on which the Borrower has completed the underwritten public offering of its
common stock pursuant to the Registration Statement, resulting in net proceeds
to the Borrower sufficient for the Borrower's Net Worth to be at least Forty-Two
Million and 00/100 Dollars ($42,000,000.00) as of such date (said date is
hereinafter referred to as the "Closing Date"). Notwithstanding the preceding
sentence to the contrary, this Agreement and all of the transactions
contemplated herein shall automatically terminate and be null and void, and
shall have no further force or effect, if the Closing Date does not occur on or
prior to July 11, 1996.
The parties hereto acknowledge and agree that all references contained
in (i) the Notes, (ii) all of the Security Agreements, the Assignments of
Receivables and Proceeds, the Joint Venture Pledge Agreements, the LLC Pledge
Agreement, the Unlimited Guaranties, and the Limited Guaranties referred to in
clauses (d), (e) and (f) of subsection 4.8 and (iii) all other agreements,
assignments, certificates, filings, instruments and other documents executed in
connection with the transactions contemplated herein to the words "dated of even
date herewith" shall mean and refer to the Closing Date.
[THE REMAINDER OF THIS PAGE IS LEFT INTENTIONALLY BLANK]
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<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed as an
instrument under seal by the duly authorized representative of each party
hereto, as of the day and year first above written.
USTRUST AS AGENT
By: /s/ Michael D. O'Neill
Title: Vice President
USTRUST
By: /s/ Michael D. O'Neill
Title: Vice President
THE SUMITOMO BANK, LIMITED
By: /S/ William N. Paty
Title: William N.Paty, Vice President & Manager
By: /S/ Brian M. Smith
Title: Brian M. Smith, Senior Vice President and
Regional Manager (East)
STATE STREET BANK AND TRUST
COMPANY
By: /s/ William Zola
Title: Vice President
BANK OF BOSTON CONNECTICUT
By: /s/ W. Lincoln Schoff Jr.
Title: Director
MELLON BANK, N.A.
By: David W. Kaiser
Title: Vice President
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THE BANK OF NEW YORK
By: /S/ David M. Duffy
Title: David M. Duffy, Vice President
FINE HOST CORPORATION
By: /S/ Randy B. Spector
Title: Randy B. Spector, Executive Vice President
and Secretary
FINE HOST SERVICES CORPORATION
By: /S/ Randy B. Spector
Title: Randy B. Spector, Vice President
and Secretary
FINE HOST OF VERMONT, INC.
By: /S/ Randy B. Spector
Title: Randy B. Spector, President and Treasurer
FANFARE, INC.
By: /S/ Randy B. Spector
Title: Randy B. Spector, Clerk
GLOBAL FANFARE, INC.
By: /S/ Randy B. Spector
Title: Randy B. Spector, Vice President and
Secretary
FINE HOST INTERNATIONAL CORPORATION
By: /S/ Randy B. Spector
Title: Randy B. Spector, Vice President and
Secretary
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CREATIVE FOOD MANAGEMENT, INC.
By: /S/ Randy B. Spector
Title: Randy B. Spector, Executive Vice President
NORTHWEST FOOD SERVICE, INC.
By: /S/ Randy B. Spector
Title: Randy B. Spector, Secretary
TARRANT COUNTY CONCESSIONS, L.L.C.
By: /S/ Todd Avila
Title: Todd Avila, Executive Manager
SUN WEST SERVICES, INC.
By: /S/ Randy B. Spector
Title: Randy B. Spector, Executive Vice President
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<PAGE>
Exhibit A
FORM OF
COMMERCIAL PROMISSORY NOTE NO. __
(Working Capital Line of Credit)
$__________________ June __, 1996
FOR VALUE RECEIVED, the undersigned, FINE HOST CORPORATION, a Delaware
corporation with its principal place of business at 3 Greenwich Office Park,
Greenwich, Connecticut 06831 (together with its successors and assigns, the
"Borrower") UNCONDITIONALLY PROMISES TO PAY TO THE ORDER OF
________________________, a ________________________, having its main office at
___________________________________________________ (together with its
successors, assigns and any subsequent holder hereof, the "Bank"), at the Bank's
main office or such other place as the Bank or the holder hereof may specify in
writing, the principal sum of ________________________ DOLLARS
($_____________________________), or such lesser amount as shall be from time to
time outstanding hereunder, together with interest on the unpaid balance thereof
from the date hereof until paid at the rate and in the manner herein provided in
lawful money of the United States of America.
1. Loan Agreement. This Note is issued pursuant to, and is subject to
all of the terms and provisions of the Loan Agreement. As used herein, the term
"Loan Agreement" means that certain Third Amended and Restated Loan Agreement,
dated of even date herewith, by and among (a) the Borrower, (b) certain
Subsidiaries of the Borrower, (c) USTrust (hereinafter referred to as the "UST"
when acting for itself), as Lender and Agent thereunder (hereinafter referred to
as the "Agent" when acting as Agent for the Banks (as defined below)), (d) The
Sumitomo Bank, Limited ("Sumitomo"), (e) State Street Bank and Trust Company
("SSB"), (f) Bank of Boston Connecticut ("BBC"), (g) Mellon Bank, N.A.
("Mellon") and (h) The Bank of New York ("BNY")(UST, Sumitomo, SSB, BBC, Mellon
and BNY, together with their successors and assigns, are hereinafter sometimes
referred to collectively as the "Banks"), as the same may be hereafter further
amended, modified, supplemented, extended or restated from time to time. All
capitalized terms not defined herein but defined in the Loan Agreement shall
have the meanings ascribed to such terms in the Loan Agreement.
2. Revolving Loans. Subject to the provisions contained herein and in
the Loan Agreement, the Borrower agrees to repay, as provided herein, the
principal sum stated above, or, if less, the aggregate unpaid balance of all
loans and advances made on a revolving credit basis under the Working Capital
Line to or for the benefit of the Borrower by the Bank. Prior to the Termination
Date (as defined in the Loan Agreement), the Borrower may borrow, repay (without
premium or penalty) and reborrow, from time to time, principal hereunder;
provided, however, that notwithstanding any other provision contained herein or
in the Loan Agreement to the contrary, the aggregate amount of all principal
outstanding hereunder shall not, at any time, exceed
_________________________________ Dollars ($______________).
3. Interest Rate. Interest on the entire unpaid principal balance
outstanding, from time to time, hereunder shall accrue at either of the
following rates: (a) the Alternate Base Rate (as defined in the Loan Agreement);
or (b) the LIBOR, as defined and determined in accordance with the provisions of
Schedule 1 attached hereto and incorporated herein by reference. Subject to the
terms and conditions of Schedule 1, the Borrower shall designate, from time to
time, the portions
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of outstanding principal which will accrue interest at the LIBOR (said portions
of unpaid principal are hereinafter referred to collectively as "LIBOR Loans"),
and all other principal not so designated shall accrue interest at the Alternate
Base Rate (said portions of unpaid principal are hereinafter sometimes referred
to collectively as "Alternate Base Rate Loans").
Interest per annum shall be calculated on the basis of actual number of
days elapsed and an assumed 360-day year. Therefore, each dollar of principal
outstanding hereunder for any day shall accrue interest equal to 1/360th of the
per annum interest accruing hereunder on each such dollar. Any sums due on a
non-banking day shall be due on the following banking day with interest
calculated in accordance with this section. Interest shall accrue on each day or
part thereof that any principal is outstanding including Sundays, holidays and
all days which the Bank is not open for the conduct of business, but excluding a
day on which a payment of principal is made in accordance with Section 2.7(a) of
the Loan Agreement.
4. Payments of Principal and Interest.
4.1 Principal Payments. Subject to the provisions of
Section 8 below, no principal shall be due and owing under
this Note until the Termination Date.
4.2 Interest Payments. Subject to the provisions of
Section 8 below, and the provisions contained in Schedule 1
attached hereto, interest shall be due and payable as
follows:
(a) with respect to any portion of unpaid principal
hereunder consisting of an Alternate Base Rate Loan, interest
accruing thereon shall be due and payable monthly, in arrears,
commencing on June 30, 1996 and continuing on the same day of
each month thereafter until the Termination Date; and
(b) with respect to any portion of unpaid principal
consisting of a LIBOR Loan, interest accruing thereon shall be
due and payable on the last day of the LIBOR Period applicable
thereto, except in the case of a LIBOR Period in excess of
three (3) months, then in which case on each date occurring at
three (3) month intervals after the first day of such LIBOR
Period until the Termination Date.
4.3 Prepayments. This Note may be prepaid, as provided
in the Loan Agreement.
5. Late Fees; Default Rate of Interest.
5.1 Late Fees. The Borrower and any Guarantor shall pay to the
Bank an administrative late fee of the greater of twenty-five ($25.00)
dollars or five percent (5%) of any periodic payment under this Note
not received by the Bank within five (5) days after the periodic
payment is due. Neither the inclusion of this provision nor the
Borrower's or any Guarantor's payment of such an administrative late
fee shall excuse the Borrower and any Guarantor from timely making
those payments otherwise required to be made under this Note, or waive
or limit any rights which the Bank has under this Note. The obligation
of the Borrower and any Guarantor to pay such administrative late fees
is in addition to all other payment obligations of the Borrower and any
Guarantor under this Note and the Loan Agreement.
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<PAGE>
5.2 Default Rate of Interest. Any principal of and, to the
extent permitted by law, interest on this Note that is not paid when
due shall bear interest from and after the due date until the date paid
at a rate per annum ("Default Rate") equal to the aggregate of two
percent (2%), plus the rate provided in this Note. The Default Rate is
separate and in addition to the administrative late fee set forth
herein for any principal and/or interest installment under this Note
not received by the Bank within five (5) days after the installment is
due.
6. Use of Proceeds. The Borrower and any Guarantor hereby certify,
represent and covenant to the Bank that the proceeds and basis of the loan
evidenced by this Note are for business and commercial purposes only, and that
the proceeds of this Note have not been and/or will not be used for personal
(non-business), family, household or agricultural purposes, and this has been
relied on by the Bank.
7. Termination Date. Notwithstanding any other provision contained in
this Note or in the other Loan Documents to the contrary, all of the remaining
indebtedness under this Note, (including but not limited to, all unpaid
principal, all accrued but unpaid interest, and all due but unpaid fees,
charges, costs and expenses) shall be due and payable IN FULL on the Termination
Date.
8. Events of Default. The entire unpaid principal balance under this
Note, all accrued unpaid interest thereon and any and all fees, costs and
expenses hereunder may automatically or may be declared to be immediately due
and payable, upon the occurrence of the earlier of either (a) the Termination
Date or (b) one or more Events of Default (as defined in the Loan Agreement).
9. Waivers. The Borrower and any Guarantor respectively waive
presentment, demand, notice, and protest, and also waive any delay on the part
of the holder hereof. Each assents to any extension or other indulgence
(including, without limitation, the release or substitution of collateral)
permitted the Borrower and any Guarantor by the Bank with respect to this Note
and/or any collateral given to secure this Note or any extension or other
indulgence, as described above, with respect to any other liability or any
collateral given to secure any other liability of the Borrower and any Guarantor
to the Bank. All monies due under this Note and/or Loan Documents shall be
without setoff or counterclaim on the part of the Borrower and any Guarantor.
10. Security and Setoff. Any and all now existing and/or hereafter
arising deposits, or other sums at any time credited by, or due to, the Borrower
and/or any Guarantor from the Bank, any Affiliate (as defined below) and/or any
Participant (as defined below), including without limitation, a participant
under this Note, if at all, and any now existing and/or hereafter arising
monies, securities, instruments, certificates, repurchase agreements, and/or
other property of the Borrower and any Guarantor in the possession of the Bank,
any Affiliate and/or any Participant, regardless of the reason the Bank or such
Affiliate or Participant had received same (all the foregoing collectively
called "Deposits") shall at all times constitute security for the Liabilities
including this Note, and/or for any endorsement of this Note and/or guaranty by
any Guarantor (said endorsement of this Note and/or guaranty by any Guarantor
hereinafter called "Guaranty Obligation"), and may be held, applied and/or set
off by the Bank, any Affiliate and/or any Participant against the Liabilities
and/or Guaranty Obligations at any time when due, whether or not other
collateral is held by or otherwise available to the Bank, any Affiliate or any
Participant whether such collateral be security in full or in part. Without
limitation, and in addition to the foregoing, in the event the Bank, any
Affiliate or any Participant at any time or times hereafter is served with
trustee process of any kind which attaches or orders any payment from any goods,
effects and/or
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<PAGE>
credits of the Borrower and any Guarantor in the hands or possession of the
Bank, any Affiliate or any Participant, then the Bank, any Affiliate and/or any
Participant without notice or demand to the Borrower and any Guarantor may deem
the dollar amount set forth in the trustee process as becoming immediately due
and payable under this Note, any endorsement, and/or guaranty by any Guarantor,
and/or any other loan arrangement with the Borrower, and set off said amount
against any Deposits being held by the Bank, any Affiliate and/or any
Participant, and any such payment made by said set off shall be applied as the
Bank, any Affiliate or any Participant shall in its sole discretion determine,
and when applied to any outstanding principal, may be applied in inverse order
of maturity. The Borrower and any Guarantor hereby grant to the Bank, any
Affiliate and/or any Participant a security interest in the Deposits to secure
all obligations of the Borrower and any Guarantor, or any one or more persons or
entities comprising the Borrower and any Guarantor, to the Bank, any Affiliate
and/or any Participant under the Liabilities and/or the Guaranty Obligations.
The Borrower and any Guarantor hereby authorize the Bank, any Affiliate and/or
any Participant to charge the Deposits which the Borrower and any Guarantor may
at any time maintain with the Bank, the Affiliate and/or any Participant for any
payment due on account of the Liabilities and/or the Guaranty Obligations. The
Borrower and any Guarantor agree that the rights to setoff against Deposits and
to charge Deposits granted herein by the Borrower and any Guarantor to the Bank,
any Affiliate or any Participant (a) are irrespective of the source or
contributor(s) of funds or other property which comprise the Deposits, whether
or not the Deposits, Liabilities and/or Guaranty Obligations are (i) individual
and/or joint of the Borrower and any Guarantor, or any one or more persons or
entities comprising the Borrower and any Guarantor, and/or (ii) in the name of
or by the Borrower and any Guarantor, or any one or more persons or entities
comprising the Borrower and any Guarantor, with another or others; and (b) are
at the option of the Bank, any Affiliate or any Participant, and in no event is
the Bank, any Affiliate or any Participant under a duty to exercise setoff
against Deposits or to charge Deposits. As used herein, the term "Affiliate"
shall mean any parent company of the Bank, and all subsidiaries and/or
affiliates of the Bank and/or said parent company, now existing and/or hereafter
arising, and each of them. As used herein, the term "Participant" means any bank
or other lender acting as a participant under any loan arrangement with the
Borrower or any Guarantor, now existing and/or hereafter arising, in which the
Bank or any Affiliate is a participant, including without limitation this Note
if applicable.
11. Participation Arrangements. The Borrower and any Guarantor agree
that the Bank and any Affiliate shall have the right at any time, and from time
to time, with or without notice to the Borrower and any Guarantor to enter into
any participation agreement(s) with other(s) which grants participation
interests to the Bank and other(s) (a) in this Note and any loan evidenced by
this Note and the Loan Documents and (b) in any other loan or loans, including
promissory notes and all loan documents applicable thereto, now existing and/or
hereafter arising, by the Borrower and/or any Guarantor with the Bank and/or any
Affiliate. In addition, the Borrower and any Guarantor agree that the Bank, any
Affiliate and/or Participant and/or any other holder of this Note shall have the
right to sell or otherwise transfer this Note and/or any Loan Documents at any
time.
12. Borrower Claim. In the event at any time the Borrower and any
Guarantor has a claim, cause of action, setoff, defense, counterclaim or third
party (collectively "Borrower Claim") against the Bank and/or any Affiliate, the
Borrower and any Guarantor agree to commence a lawsuit and/or other proceeding
on the Borrower Claim against the Bank only in Boston, Massachusetts or such
other place where the Bank has its principal place of business and only within a
period of one year from the time the Borrower Claim first arises, or such other
minimum period permitted by law in the event the court finds the one-year period
insufficient.
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13. Contribution and Subrogation. The Borrower agrees not to seek or
accept contribution, reimbursement, indemnity, subrogation or enforcement of any
rights from anyone also obligated under this Note, as maker, guarantor, endorser
or otherwise, if at all; and any Guarantor agrees not to seek or accept
contribution, reimbursement, indemnity, subrogation or enforcement of any rights
from the Borrower, and any other guarantor or endorser hereof, or anyone
otherwise obligated under this Note, until all obligations under this Note are
paid in full and no claim whatsoever exists and/or may exist against the Bank,
any Affiliate, and/or Participant for repayment, a preference payment in
bankruptcy, or otherwise in connection with the Borrower and any Guarantor.
14. Indemnification. The Borrower and any Guarantor agree to indemnify,
defend and hold harmless the Bank, any Affiliate, and/or any officer, director
and/or employee of the Bank and/or any Affiliate of and from any claim or claims
now existing, hereafter arising and/or hereafter brought and/or threatened by
the Borrower and any Guarantor or by any other person or entity, in connection
therewith, on account of or relating to any relationship and/or dealings with
the Borrower and any Guarantor, including without limitation any person or
entity contesting the validity or priority of any mortgage(s) and/or other
collateral granted to the Bank, provided that the foregoing obligations of the
Borrower and any Guarantor shall not apply to any matter attributable to the
gross negligence or willful misconduct of the Bank, any Affiliate or any such
officer, director or employee.
15. Bank Fees, Costs and Expenses. The Borrower and any Guarantor agree
to promptly pay to the Bank and any Affiliate for all legal services hereafter
rendered to the Bank and/or any Affiliate including all reasonable time, legal
fees and expenses, in connection with the review, drafting, preparation for
enforcement, negotiation, enforcement, amendment, extension, substitution and/or
modification of this Note, any endorsement and/or guaranty thereof, any
endorsement and/or guaranty of the obligations of the Borrower to the Bank, any
Loan Documents, any other instruments securing or otherwise relating to this
Note, any other matters relating to the collection of the loan proceeds and/or
realization on any collateral given to the Bank, any bankruptcy and/or
foreclosure proceedings, procedures and expenses which relate to the Borrower
and any Guarantor and/or any mortgage(s) and/or other collateral given by the
Borrower and any Guarantor, and all rights and remedies of the Bank, whether now
existing and/or hereafter arising against the Borrower any Guarantor and/or any
collateral given by the Borrower and any Guarantor to the Bank, whether or not
court proceedings are brought. The responsibility set forth anywhere in this
Note of Borrower and any Guarantor to pay for the attorneys' time, legal fees
and expenses of the Bank and/or any Affiliate shall include both outside counsel
engaged by the Bank, and any in-house counsel employed by the Bank and/or any
Affiliate at the same rate as comparable outside counsel.
16. Damages. IN ANY CASE, CONTROVERSY OR MATTER WHICH ARISES OUT OF, OR
IS IN RESPECT OF, THIS NOTE AND/OR LOAN EVIDENCED THEREBY, ANY LOAN DOCUMENTS,
ANY COLLATERAL SECURING THIS NOTE, ANY OTHER INSTRUMENT IN CONNECTION WITH THIS
NOTE, AND/OR ANY OTHER BUSINESS RELATIONSHIP OR TRANSACTION BETWEEN THE BANK
AND/OR ANY AFFILIATE WITH THE BORROWER AND ANY GUARANTOR, WHETHER NOW EXISTING
OR HEREAFTER ARISING, THE BORROWER AND ANY GUARANTOR KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY: (A) WAIVE ANY RIGHT TO AND AGREE NOT TO BRING, COMMENCE, OR
OTHERWISE TAKE ANY ACTION TO TRANSFER, ANY PROCEEDING INCLUDING WITHOUT
LIMITATION COURT ACTION, ARBITRATION, MEDIATION, ADMINISTRATIVE PROCEEDING OR
OTHERWISE AGAINST THE BANK AND/OR AFFILIATE, OTHER THAN IN THE COMMONWEALTH OF
MASSACHUSETTS; (B) WAIVE ANY NOW EXISTING AND/OR HEREAFTER ARISING RIGHT TO
TRIAL BY JURY; AND (C) WAIVE ANY NOW EXISTING AND/OR
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HEREAFTER ARISING RIGHT TO ANY CONSEQUENTIAL, PUNITIVE, SPECIAL, EXEMPLARY
AND/OR INCIDENTAL DAMAGES.
17. Right of Entry to Premises. At all times when the security for this
Note and/or any endorsement and/or guaranty by any Guarantor includes real
estate, the Borrower and any Guarantor agree that the Bank and any Affiliate and
representatives shall have the right at any time hereafter to enter the
mortgaged premises (a) for purposes of inspecting and testing for hazardous
materials and oils to determine whether or not the premises violate any
provisions of M.G.L. ch. 21E and regulations relating thereto, and/or (b) for
purposes of appraising the mortgaged premises.
18. Cross-Default and Cross-Collateralized. Any default under this Note
shall be a default by the Borrower and any Guarantor under any other promissory
note and/or other instrument by the Borrower and any Guarantor to the Bank, any
Affiliate and/or any Participant, now existing or hereafter arising. Any default
by the Borrower under any other promissory note and/or other instrument by the
Borrower and any Guarantor to the Bank, any Affiliate and/or any Participant now
existing or hereafter arising, shall be a default under this Note and Loan
Documents. All mortgages and/or other collateral from the Borrower to the Bank
and/or any Affiliate, if any, now existing or hereafter arising, shall also
secure the obligations of the Borrower under this Note. All mortgages and/or
other collateral, if any, which secure this Note shall also secure all
promissory notes and other obligations of the Borrower to the Bank, now existing
or hereafter arising, whereof individual and/or joint of the Borrower, or any
one or more persons or entities comprising the Borrower.
19. No Obligation to Refinance. AT THE DUE DATE OF THIS NOTE, THE BANK
MAY DEMAND PAYMENT OF THIS NOTE, MAY REWRITE THIS NOTE BY AGREEMENT AMONG THE
BANK, THE BORROWER AND ITS SUBSIDIARIES AT A GREATER OR LESSER RATE OF INTEREST,
OR MAY, BY SUCH AGREEMENT, ALLOW PAYMENTS TO BE MADE ON THIS NOTE AT THE SAME,
OR A LESSER OR A GREATER RATE OF INTEREST, IF AT ALL. THE LOAN IS PAYABLE IN
FULL AT MATURITY OR UPON EARLIER ACCELERATION. THE BORROWER MUST REPAY THE
ENTIRE PRINCIPAL BALANCE OF THE LOAN AND UNPAID INTEREST WHEN DUE. THE BANK IS
UNDER NO OBLIGATION TO REFINANCE THE LOAN AT THAT TIME. THE BORROWER WILL,
THEREFORE, BE REQUIRED TO MAKE PAYMENT OUT OF OTHER ASSETS THE BORROWER MAY OWN,
OR WILL HAVE TO FIND ANOTHER BANK OR LENDER WILLING TO LEND THE BORROWER THE
MONEY AT PREVAILING MARKET RATES, WHICH MAY BE CONSIDERABLY HIGHER THAN THE
INTEREST RATE ON THE LOAN.
20. Acknowledgement of Principal and Interest. Within ten (10) days
after requested by the Bank by notice to the Borrower, the Borrower and any
Guarantor agree to execute and deliver to the Bank a written statement addressed
to the Bank, any Affiliate, any Participant and/or any proposed Participant, and
signed by the Borrower and any Guarantor under the penalties of perjury, and
duly notarized, acknowledging the principal and interest balances then due under
this Note, and further acknowledging that this Note is in full force and effect
and unmodified that the Borrower and any Guarantor have no defenses, offsets or
counterclaims to the payment and/or performance of the obligations of the
Borrower and any Guarantor under this Note, and have no claims or causes of
action of any kind whatsoever then existing against the Bank, any Affiliate
and/or Participant, and a statement that the Bank is not in default under this
Note or any loan or other agreement relating to this Note or any obligations
evidenced thereby, except as may otherwise exist in which event the Borrower
shall specify what otherwise exists, and a statement regarding such other
matters which the Bank may require.
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21. Legal Representation. The Borrower and any Guarantor acknowledge that
the Bank has notified and does hereby notify the Borrower and any Guarantor as
follows:
(a) THE RESPONSIBILITY OF THE ATTORNEY FOR THE BANK IS TO
PROTECT THE INTEREST OF THE BANK;
(b) THE BORROWER AND ANY GUARANTOR MAY, AT BORROWER'S OR
GUARANTOR'S OWN EXPENSE, ENGAGE AN ATTORNEY OF THEIR OWN SELECTION TO
REPRESENT THE BORROWER'S OR GUARANTOR'S OWN INTERESTS IN THE
TRANSACTION.
22. Modifications/Substitutions. No delay or omission by the Bank in
exercising or enforcing any of the Bank's powers, rights, privileges, remedies,
or discretions hereunder shall operate as a waiver thereof on that occasion nor
on any other occasion. No waiver of any default hereunder shall operate as a
waiver of any other default hereunder, or as a continuing waiver. This Note
shall be binding upon the Borrower and each endorser and guarantor hereof and
upon their respective heirs, successors, assigns, and representatives (limited,
however, in the case of heirs, successors, assigns and representatives of the
Limited Guarantors (as defined in the Loan Agreement), to their interest in the
collateral pledged by such Limited Guarantors), and shall inure to the benefit
of the Bank and its successors, endorsees, and assigns. The Borrower and any
Guarantor each authorizes the Bank to complete this Note if delivered incomplete
in any respect by the Borrower and any Guarantor. This Note as delivered to the
Bank at one of its offices in Massachusetts, shall be governed by the laws of
the Commonwealth of Massachusetts, and shall take effect as a sealed instrument.
The Borrower and any Guarantor of this Note each submits to the jurisdiction of
the courts of the Commonwealth of Massachusetts for all purposes with respect to
this Note, any collateral given to secure their respective liabilities,
obligations and indebtedness to the Bank, and their respective relationships
with the Bank. The Borrower and any Guarantor agree that all assets in which the
Borrower and any Guarantor have previously granted or hereafter granted or
hereafter grant to the Bank or any Affiliate a security, mortgage or collateral
interest shall secure the Liabilities and Obligations. This Note includes all
future amendments, decreases, extensions, increases, modifications,
renegotiations, renewals, replacements, revisions, rewritings and/or
substitutions thereof, in whole or in part ("Modifications/Substitutions"). The
Borrower and any Guarantor agree that any mortgages and/or other collateral, if
any, which may secure this Note, secure all Modifications/Substitutions of this
Note, if any, now existing and/or hereafter arising, and include all future
Modifications/Substitutions of such mortgages and/or other collateral, if any
now existing and/or hereafter arising. Time of all payments and the performance
of all of the provisions hereof is of strict essence (taking into account any
applicable grace period). In the event more than one person or entity comprises
the Borrower, all provisions herein of the Borrower are joint and several
obligations. The Borrower and any Guarantor acknowledge and agree, and say under
the penalties of perjury, that (a) each is executing this Note as the free act
and deed of each, (b) each is not acting under any duress or undue influence,
and (c) the Bank and/or any Affiliate have made no agreements warranties,
representations or promises in connection with this Note and/or any loan
agreements or other agreements relating to this Note, except as set forth herein
or in a written instrument executed and delivered by the Bank. The provisions of
this Note are hereby declared to be severable, and the invalidity of any
provision or application thereof shall not effect any other provisions or any
other application thereof. Interest on principal under this Note shall accrue
only on the amount of principal from time to time actually outstanding under
this Note. The Bank records, including without limitation, computer printouts of
the Bank showing an account of the Borrower, shall be admissible as evidence in
any action or proceeding in connection with this Note. This Note
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<PAGE>
may not be modified orally, but may only be modified by written instrument
signed by the holderhereof
23. Conflicting Provisions. To the extent and only to the extent that any
provision contained in this Note is directly inconsistent and conflicts with any
corresponding provision contained in the Loan Agreement, then the corresponding
provision contained in the Loan Agreement shall govern.
24. Limited Guarantors. Notwithstanding any other provision contained
in this Note to the contrary (including, without limitation, those relating to
indemnifications or costs and expenses), the Bank's sole recourse against the
Limited Guarantors (as defined in the Loan Agreement) with respect of any
liabilities evidenced by this Note shall be limited as set forth in the Limited
Guaranties, the Security Agreements and the Assignments of Receivables and
Proceeds executed and delivered to the Bank by such Limited Guarantors;
provided, however, that notwithstanding any of the foregoing, such limitation on
the liabilities of the Limited Guarantors shall in no way be deemed to limit or
otherwise affect any or all of the rights and remedies of the Bank against the
Borrower, any of its Subsidiaries or any other guarantors under any of the Loan
Documents or at law or in equity.
25. Receipt. The Borrower has read all of the terms and conditions of this
Note and acknowledges receipt of an exact copy of it.
IN WITNESS WHEREOF, the undersigned has executed this Note under its
seal as of the date first written above.
WITNESS: FINE HOST CORPORATION
______________________ By:______________________
Name: Name:
Title:
Its duly authorized officer
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SCHEDULE 1
LIBOR PROVISIONS
$----------------
COMMERCIAL PROMISSORY NOTE (the "Note")
OF
FINE HOST CORPORATION (the "Borrower")
TO
___________________ (the "Bank")
The principal outstanding from time to time under the Note shall accrue
interest at the Alternate Base Rate (as defined in the Loan Agreement) or the
LIBOR (as defined below). The terms set forth in these LIBOR Provisions are
incorporated in the Note and shall govern: (a) the manner by which the Borrower
may designate application of the LIBOR to portions of principal outstanding,
from time to time, under the Note; and (b) the application of the LIBOR.
1. Certain Definitions. As used herein, in addition to the terms defined in
the Note, the following terms shall have the respective meanings ascribed to
them below:
1.1 "Business Day" shall mean any day other than: (a) a
Saturday or a Sunday, (b) a day that banks are lawfully closed for
business in Boston, Massachusetts or New York City, New York, or (c) a
day that transactions cannot be carried out by and between banks in the
London interbank market.
1.2 "Legal Requirement" shall mean any requirement imposed on
Bank by any treaty or law of the United States of America, or of any
jurisdiction affecting the LIBOR Market, or by any regulation, order,
interpretation, ruling or official directive or guideline of the
Federal Reserve System or of any other board or governmental or
administrative agency of the United States of America, any jurisdiction
affecting the LIBOR Market or any political subdivision of any of the
foregoing, and any requirement imposed by any such regulation, order,
ruling or official directive or guideline not having the force of law
shall be deemed to be a Legal Requirement if Bank reasonably believes
that compliance therewith is necessary or prudent for the Bank's
business, even though such regulation, order, ruling or official
directive does not have the force of law.
1.3 "LIBOR" shall mean for each LIBOR Period the rate of
interest per annum (rounded up to the nearest 0.005%) obtained by
dividing the LIBOR Base by the number one (1), minus the LIBOR Reserve
Requirement, i.e.:
LIBOR = LIBOR Base
1 - LIBOR Reserve Requirement
1.4 "LIBOR Amount" shall mean an amount of principal
outstanding under the Note and designated by the Borrower in the applicable
LIBOR Election in U.S.Dollars that is a minimum of U.S. $1,000,000.00 and
integral multiples of U.S.$500,000.00 thereafter.
1.5 "LIBOR Base" shall mean Two and 00/100 Percent (2.00%)
per annum plus the average rate of interest per annum at which the Bank is
offered deposits inU.S. Dollars,
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in same day funds ("LIBOR Deposits") by prime banks in the London
interbank market ("LIBOR Market"), as of twelve o'clock in London,
England time, on the third Business Day prior to the commencement of
the LIBOR Period for which a LIBOR Election is being made, in an amount
of U.S. dollars similar to the LIBOR Amount, and for a deposit period
comparable to the LIBOR Period for which the LIBOR Election is being
made.
1.6 "LIBOR Election" shall mean telephonic notice from the
Borrower to the Bank, followed by a written election delivered by the
Borrower to the Bank, specifying a LIBOR Amount and a LIBOR Period for
which the Borrower wishes to designate application of the LIBOR.
1.7 "LIBOR Period" shall mean a period of thirty (30) days,
ninety (90) days or one hundred eighty (180) days, whichever period is
chosen by the Borrower in the LIBOR Election.
1.8 "LIBOR Reserve Requirement" shall mean the effective rate
per annum, in effect at the start of the applicable LIBOR Period or
otherwise affecting the applicable LIBOR Amount, expressed as a decimal
to the 4th digit, of any reserve (including, without limitation, any
basic, supplemental, marginal or emergency reserve), reserve asset,
special deposit, fee, charge, insurance premium or assessment required
by any Legal Requirement or otherwise in the LIBOR Market to be
maintained or paid by Bank on or with respect to (i) any LIBOR Deposits
purchased in the LIBOR Market which was used to fund any LIBOR Amount,
(ii) the principal amount of or interest on any LIBOR Amount or (iii)
funds transferred from a non-United States office or an international
banking facility of Bank to a United States office of Bank in order to
fund any LIBOR Amount.
1.9 "Tax" shall mean any tax, levy, impost, duty, deduction,
withholding or other charge of whatever nature at any time required by
any Legal Requirement (x) to be paid by Bank or (y) to be withheld or
deducted from any payment otherwise required hereby to be made by
Borrower to Bank, in each case on or with respect to (i) any LIBOR
Deposit purchased in the LIBOR Market which was used to fund any LIBOR
Amount, (ii) any portion of a LIBOR Amount funded with the proceeds of
any such deposit, (iii) the principal amount of or interest on any
LIBOR Amount, or (iv) funds transferred from a non-United States office
or an international banking facility of Bank to a United States office
of Bank in order to fund any LIBOR Amount, provided that "Tax" shall
not include (A) taxes imposed upon or measured by the net income of
Bank, (B) taxes which would have been imposed even if there had been no
provision for LIBOR Rate options or (C) amounts required to be withheld
by Bank from payments of interest to parties from whom LIBOR Deposits
were purchased by Bank.
2. LIBOR Elections. Each designation by the Borrower for application of
the LIBOR shall be made by delivering a LIBOR Election to the Bank, which must
be received by the Bank by 12:00 Noon on the third business day prior to the
commencement of the applicable LIBOR Period designated therein. Each LIBOR
Election shall be irrevocable once acted upon by the Bank. A LIBOR Election may
be made with respect to LIBOR Amounts which are: (a) new advances of principal
under the Note; (b) principal outstanding under the Note which is then subject
to the Alternate Base Rate; or (c) principal outstanding under the Note which is
currently subject to a LIBOR for which the applicable LIBOR Period will expire
not more than five (5) Business Days from the date of the LIBOR Election. The
Borrower may not select any LIBOR Period that will extend beyond the Termination
Date, as such date may be extended by Bank, from time to time, in its sole
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<PAGE>
and absolute discretion. No LIBOR Election may be made by the Borrower on or
after the occurrence of an Event of Default (or the occurrence of any event
which, with the passage of time or giving of notice or both would result in the
occurrence of an Event of Default).
3. Early Termination of LIBOR Period. To the extent that the Bank is
required to arrange for early termination of any LIBOR Period to permit the
Borrower to make a repayment or prepayment of principal under the Note (whether
or not required by the Bank or requested by the Borrower), the Borrower shall:
(a) reimburse the Bank for expenses and lost profits incurred by it as a
result of any such early termination; or
(b) if any such early termination cannot be effected by the Bank, continue
to pay to the Bank, in U.S. dollars, interest at the applicable LIBOR during the
LIBOR Period on the LIBOR Amount.
4. Limitations on Availability or Applicability of LIBOR. If at any
time when the LIBOR is to be determined, LIBOR Deposits are not being offered to
the Bank in the LIBOR Market, in an amount approximately equal to the designated
LIBOR Amount for a period approximately equal to the designated LIBOR Period, or
if, for any other reason, the Bank, acting reasonably, is unable to determine
the applicable LIBOR, then, failing agreement between the Bank and the Borrower
as to a substitute LIBOR (if available or determinable) for such amount, the
Alternate Base Rate shall be the effective interest rate with respect to such
amount commencing on the date which would have been the first day of such LIBOR
Period. The Borrower acknowledges that the ability of the Bank to charge
interest based on the LIBOR on the basis provided hereunder or to obtain
offsetting LIBOR Deposits in the LIBOR Market will be subject to any law,
regulation, order, rule or directive applicable to the Bank and to other similar
financial institutions (collectively, a "Restraint") which may prohibit or
restrict the charging of the LIBOR, or making or maintaining of loans based
thereon, and the Borrower agrees that the Bank shall have the right to comply
with any such Restraint and, at the option of the Bank, to convert any LIBOR
interest to the Alternate Base Rate. In all events, on and after the occurrence
of an Event of Default, and to the maximum extent permitted by applicable law,
interest on all principal outstanding under the Note shall accrue, at the Bank's
option, at the Alternate Base Rate, and, if and when due, at the Alternate Base
Rate plus two percent (2.0%) from the applicable due date until paid.
5. Increased Costs from Changes in Legal Requirements or Taxes. If, at
any time hereafter, there shall be any change in Legal Requirements or Taxes
which results in any increased costs to the Bank of making, funding, creating or
maintaining a LIBOR option; then, upon notification in writing to the Borrower
by the Bank, the Borrower shall immediately pay to the Bank such amount as shall
fully compensate the Bank for all such increased costs which accrue up to and
including the date of such notice, and, thereafter, the Borrower shall continue
to pay to the Bank such additional amounts as shall fully compensate the Bank
for such increased costs. The determination by Bank of the amount of any such
increased costs incurred by it, if done in good faith, and the allocation, if
any, of such costs among Borrower and other customers which have arrangements,
directly or indirectly, with Bank similar to the LIBOR option, if made on an
equitable basis, in the absence of manifest error, shall be conclusive.
6. End of Month Provisions. Whenever any payment to be made hereunder
shall be stated to be due, or whenever the last day of any LIBOR Period
would otherwise occur, on a day that is not a Business Day, such payment
shall be made, and the last day of such LIBOR Period shall
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<PAGE>
occur, on the next succeeding Business Day; provided, however, if such extension
would cause such payment to be made or the last day of such LIBOR Period to
occur in a new calendar month, such payment shall be made and the last day of
such LIBOR Period shall occur on the next preceding Business Day; and in either
event such extension of time or such shortening of time shall in such case be
included (or reflected, as the case may be) in the computation of payment of
interest.
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<PAGE>
Exhibit B
FORM OF
COMMERCIAL PROMISSORY NOTE NO. ____
(Guidance Line of Credit)
$______________ June __, 1996
FOR VALUE RECEIVED, the undersigned, FINE HOST CORPORATION, a Delaware
corporation with its principal place of business at 3 Greenwich Office Park,
Greenwich, Connecticut 06831 (together with its successors and assigns, the
"Borrower") UNCONDITIONALLY PROMISES TO PAY TO THE ORDER OF ___________________,
a ___________________, having its main office at
_______________________________________ (together with its successors, assigns
and any subsequent holder hereof, the "Bank"), at the Bank's main office or such
other place as the Bank or the holder hereof may specify in writing, the
principal sum of ___________________ DOLLARS ($__________________), or such
lesser amount as shall be from time to time outstanding hereunder, together with
interest on the unpaid balance thereof from the date hereof until paid at the
rate and in the manner herein provided in lawful money of the United States of
America.
1. Loan Agreement. This Note is issued pursuant to, and is subject to
all of the terms and provisions of the Loan Agreement. As used herein, the term
"Loan Agreement" means that certain Third Amended and Restated Loan Agreement,
dated of even date herewith, by and among (a) the Borrower, (b) certain
Subsidiaries of the Borrower, (c) USTrust (hereinafter referred to as the "UST"
when acting for itself), as Lender and Agent thereunder (hereinafter referred to
as the "Agent" when acting as Agent for the Banks (as defined below)), (d) The
Sumitomo Bank, Limited ("Sumitomo"), (e) State Street Bank and Trust Company
("SSB"), (f) Bank of Boston Connecticut ("BBC"), (g) Mellon Bank, N.A.
("Mellon") and (h) The Bank of New York ("BNY")(UST, Sumitomo, SSB, BBC, Mellon
and BNY, together with their successors and assigns, are hereinafter sometimes
referred to collectively as the "Banks"), as the same may be hereafter further
amended, modified, supplemented, extended or restated from time to time. All
capitalized terms not defined herein but defined in the Loan Agreement shall
have the meanings ascribed to such terms in the Loan Agreement.
2. Unconverted Loans; Guidance Line Conversion Dates. Subject to the
provisions contained herein and in the Loan Agreement, the Borrower agrees to
repay, as provided herein, the principal sum stated above, or, if less, the
aggregate unpaid balance of all loans and advances made on a revolving credit
basis under the Guidance Line of Credit to or for the benefit of the Borrower by
the Bank. Prior to the Termination Date (as defined in the Loan Agreement), the
Borrower may borrow, repay (without premium or penalty) and reborrow, from time
to time, principal hereunder (said principal hereinafter referred to
collectively as the "Unconverted Principal"); provided, however, that
notwithstanding any other provision contained herein or in the Loan Agreement to
the contrary, the aggregate amount of all principal outstanding hereunder shall
not, at any time, exceed ____________________ Dollars ($________________), as
the same may be reduced on the Guidance Line Conversion Dates pursuant to the
provisions set forth below in this Section 2 (the "Maximum Unconverted Principal
Amount"). On each Guidance Line Conversion Date, the aggregate amount of all
Unconverted Principal outstanding hereunder on such date may not be thereafter
reborrowed hereunder (such aggregate principal amount on any Guidance Line
Conversion Date is hereinafter referred to as the "Converted Principal") and the
Maximum Unconverted Principal Amount shall, on each Guidance Line Conversion
Date, be reduced by the aggregate, original amount of the Converted Principal.
On and after each Guidance Line Conversion Date (other than the Termination
Date), and subject to the provisions contained herein and in the Loan Agreement,
the Borrower may
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continue, until the Termination Date, to borrow, repay (without premium or
penalty) and reborrow, from time to time, any and all principal hereunder that
is not Converted Principal.
3. Interest Rate.
3.1 Interest Rate for Unconverted Principal. Prior to the
Termination Date, the unpaid Unconverted Principal under this Note
shall bear interest at a variable rate (the "Variable Rate") equal to
the sum of the Alternate Base Rate (as defined in the Loan Agreement)
plus one half of one percent (0.5%) per annum.
3.2 Interest Rate for Converted Principal. On and after any
Guidance Line Conversion Date, interest on the unpaid Converted
Principal outstanding hereunder shall accrue at either: (a) the
Variable Rate; or (b) the LIBOR, as defined and determined in
accordance with the provisions of Schedule 1 attached hereto and
incorporated herein by reference. Subject to the terms and conditions
of Schedule 1, the Borrower shall designate, from time to time, the
portions of outstanding principal which will accrue interest at the
LIBOR (said portions of unpaid Converted Principal are hereinafter
referred to collectively as "LIBOR Loans"), and all other principal not
so designated shall accrue interest at the Variable Rate (said portions
of unpaid Converted Principal are hereinafter sometimes referred to
collectively as "Variable Rate Loans").
3.3 Daily Interest Calculation and Accrual. Interest per annum
shall be calculated on the basis of actual number of days elapsed and
an assumed 360-day year. Therefore, each dollar of principal
outstanding hereunder for any day shall accrue interest equal to
1/360th of the per annum interest accruing hereunder on each such
dollar. Any sums due on a non-banking day shall be due on the following
banking day with interest calculated in accordance with this section.
Interest shall accrue on each day or part thereof that any principal is
outstanding including Sundays, holidays and all days which the Bank is
not open for the conduct of business, but excluding a day on which a
payment of principal is made in accordance with Section 2.7(a) of the
Loan Agreement.
4. Payments of Principal and Interest.
4.1 Payments of Unconverted Principal and Interest. No unpaid
Unconverted Principal shall be due and payable under this Note until
the Termination Date. Subject to the provisions of Schedule 1 attached
hereto, all unpaid interest which has accrued on Unconverted Principal
shall be due and payable monthly, in arrears, commencing on June 30,
1996 and continuing on the same day of each month thereafter, such
payments of interest to continue until the Termination Date. On the
Termination Date, all unpaid Unconverted Principal under this Note,
together with all accrued but unpaid interest thereon, shall be due and
payable IN FULL.
4.2 Payments of Converted Principal and Interest.
4.2.1 Converted Principal. Commencing on the last day
of the first month following each Guidance Line Conversion
Date and continuing on the last day of each month thereafter,
all of the unpaid Converted Principal outstanding on such
Guidance Line Conversion Date shall be due and payable in
sixty (60) equal monthly installments, such payments of
Converted Principal to continue until the fifth anniversary of
such Guidance Line Conversion Date, at which time, the entire
remaining unpaid balance of such Converted Principal, together
with any and all
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remaining accrued but unpaid interest thereon and all other
unpaid fees, charges, costs and expenses hereunder shall
become immediately due and payable IN FULL.
4.2.2 Interest on Converted Principal. All interest which has accrued on
unpaid Converted Principal shall be due and payable as follows:
(a) with respect to any portion of unpaid
Converted Principal consisting of a Variable Rate
Loan, interest shall be due and payable monthly, in
arrears, commencing on the last day of the first
month following the applicable Guidance Line
Conversion Date for such portion of Converted
Principal and continuing on the same day of each
month thereafter; and
(b) with respect to any portion of unpaid
Converted Principal consisting of a LIBOR Loan,
interest shall be due and payable, in arrears, on the
last day of each LIBOR Period applicable thereto,
except in the case of a LIBOR Period in excess of
three (3) months, then in which case on each date
occurring at three (3) month intervals after the
first day of such LIBOR Period.
4.3 Prepayment. This Note may be prepaid, as provided in the Loan
Agreement.
5. Late Fees; Default Rate of Interest.
5.1 Late Fees. The Borrower and any Guarantor shall pay to the
Bank an administrative late fee of the greater of twenty-five ($25.00)
dollars or five (5%) percent of any periodic payment under this Note
not received by the Bank within five (5) days after the periodic
payment is due. Neither the inclusion of this provision nor the
Borrower's or any Guarantor's payment of such an administrative late
fee shall excuse the Borrower and any Guarantor from timely making
those payments otherwise required to be made under this Note, or waive
or limit any rights which the Bank has under this Note. The obligation
of the Borrower and any Guarantor to pay such administrative late fees
is in addition to all other payment obligations of the Borrower and any
Guarantor under this Note and the Loan Agreement.
5.2 Default Rate. Any principal of and, to the extent
permitted by law, interest on this Note that is not paid when due shall
bear interest from and after the due date until the date paid at a rate
per annum ("Default Rate") equal to the aggregate of two percent (2%),
plus the rate provided in this Note. The Default Rate is separate and
in addition to the administrative late fee set forth herein for any
principal and/or interest installment under this Note not received by
the Bank within five (5) days after the installment is due. Any
payments received by the Bank on account of this Note after
acceleration shall be applied in such manner as the Bank may determine
in the Bank's sole discretion.
6. Use of Proceeds. The Borrower and any Guarantor hereby certify,
represent and covenant to the Bank that the proceeds and basis of the loan
evidenced by this Note are for business and commercial purposes only, and that
the proceeds of this Note have not been and/or will not be used for personal
(non-business), family, household or agricultural purposes, and this has been
relied on by the Bank.
7. Events of Default. Notwithstanding any provision contained herein
or in the Loan Agreement to the contrary, the entire unpaid principal balance
under this Note, all accrued unpaid interest thereon and any and all fees,
costs and expenses hereunder may automatically or may be
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declared to be immediately due and payable, upon the occurrence of one or more
Events of Default (as defined in the Loan Agreement).
8. Waivers. The Borrower and any Guarantor respectively waive
presentment, demand, notice, and protest, and also waive any delay on the part
of the holder hereof. Each assents to any extension or other indulgence
(including, without limitation, the release or substitution of collateral)
permitted the Borrower and any Guarantor by the Bank with respect to this Note
and/or any collateral given to secure this Note or any extension or other
indulgence, as described above, with respect to any other liability or any
collateral given to secure any other liability of the Borrower and any Guarantor
to the Bank. All monies due under this Note and/or Loan Documents shall be
without setoff or counterclaim on the part of the Borrower and any Guarantor.
9. Security and Setoff. Any and all now existing and/or hereafter
arising deposits, or other sums at any time credited by, or due to, the Borrower
and/or any Guarantor from the Bank, any Affiliate (as defined below) and/or any
Participant (as defined below), including without limitation, a participant
under this Note, if at all, and any now existing and/or hereafter arising
monies, securities, instruments, certificates, repurchase agreements, and/or
other property of the Borrower and any Guarantor in the possession of the Bank,
any Affiliate and/or any Participant, regardless of the reason the Bank or such
Affiliate or Participant had received same (all the foregoing collectively
called "Deposits") shall at all times constitute security for the Liabilities
including this Note, and/or for any endorsement of this Note and/or guaranty by
any Guarantor (said endorsement of this Note and/or guaranty by any Guarantor
hereinafter called "Guaranty Obligation"), and may be held, applied and/or set
off by the Bank, any Affiliate and/or any Participant against the Liabilities
and/or Guaranty Obligations at any time when due, whether or not other
collateral is held by or otherwise available to the Bank, any Affiliate or any
Participant whether such collateral be security in full or in part. Without
limitation, and in addition to the foregoing, in the event the Bank, any
Affiliate or any Participant at any time or times hereafter is served with
trustee process of any kind which attaches or orders any payment from any goods,
effects and/or credits of the Borrower and any Guarantor in the hands or
possession of the Bank, any Affiliate or any Participant, then the Bank, any
Affiliate and/or any Participant without notice or demand to the Borrower and
any Guarantor may deem the dollar amount set forth in the trustee process as
becoming immediately due and payable under this Note, any endorsement, and/or
guaranty by any Guarantor, and/or any other loan arrangement with the Borrower,
and set off said amount against any Deposits being held by the Bank, any
Affiliate and/or any Participant, and any such payment made by said set off
shall be applied as the Bank, any Affiliate or any Participant shall in its sole
discretion determine, and when applied to any outstanding principal, may be
applied in inverse order of maturity. The Borrower and any Guarantor hereby
grant to the Bank, any Affiliate and/or any Participant a security interest in
the Deposits to secure all obligations of the Borrower and any Guarantor, or any
one or more persons or entities comprising the Borrower and any Guarantor, to
the Bank, any Affiliate and/or any Participant under the Liabilities and/or the
Guaranty Obligations. The Borrower and any Guarantor hereby authorize the Bank,
any Affiliate and/or any Participant to charge the Deposits which the Borrower
and any Guarantor may at any time maintain with the Bank, the Affiliate and/or
any Participant for any payment due on account of the Liabilities and/or the
Guaranty Obligations. The Borrower and any Guarantor agree that the rights to
setoff against Deposits and to charge Deposits granted herein by the Borrower
and any Guarantor to the Bank, any Affiliate or any Participant (a) are
irrespective of the source or contributor(s) of funds or other property which
comprise the Deposits, whether or not the Deposits, Liabilities and/or Guaranty
Obligations are (i) individual and/or joint of the Borrower and any Guarantor,
or any one or more persons or entities comprising the Borrower and any
Guarantor, and/or (ii) in the name of or by the Borrower and any Guarantor, or
any one or more persons or entities comprising the Borrower and any Guarantor,
with another or others; and (b) are at the option of the Bank, any Affiliate or
any Participant, and in no event is the Bank, any Affiliate or any Participant
under a duty to exercise
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setoff against Deposits or to charge Deposits. As used herein, the term
"Affiliate" shall mean any parent company of the Bank, and all subsidiaries
and/or affiliates of the Bank and/or said parent company, now existing and/or
hereafter arising, and each of them. As used herein, the term "Participant"
means any bank or other lender acting as a participant under any loan
arrangement with the Borrower or any Guarantor, now existing and/or hereafter
arising, in which the Bank or any Affiliate is a participant, including without
limitation this Note if applicable.
10. Participation Arrangements. The Borrower and any Guarantor agree
that the Bank and any Affiliate shall have the right at any time, and from time
to time, with or without notice to the Borrower and any Guarantor to enter into
any participation agreement(s) with other(s) which grants participation
interests to the Bank and other(s) (a) in this Note and any loan evidenced by
this Note and the Loan Documents and (b) in any other loan or loans, including
promissory notes and all loan documents applicable thereto, now existing and/or
hereafter arising, by the Borrower and/or any Guarantor with the Bank and/or any
Affiliate. In addition, the Borrower and any Guarantor agree that the Bank, any
Affiliate and/or Participant and/or any other holder of this Note shall have the
right to sell or otherwise transfer this Note and/or any Loan Documents at any
time.
11. Borrower Claim. In the event at any time the Borrower and any
Guarantor has a claim, cause of action, setoff, defense, counterclaim or third
party (collectively "Borrower Claim") against the Bank and/or any Affiliate, the
Borrower and any Guarantor agree to commence a lawsuit and/or other proceeding
on the Borrower Claim against the Bank only in Boston, Massachusetts or such
other place where the Bank has its principal place of business and only within a
period of one year from the time the Borrower Claim first arises, or such other
minimum period permitted by law in the event the court finds the one-year period
insufficient.
12. Contribution and Subrogation. The Borrower agrees not to seek or
accept contribution, reimbursement, indemnity, subrogation or enforcement of any
rights from anyone also obligated under this Note, as maker, guarantor, endorser
or otherwise, if at all; and any Guarantor agrees not to seek or accept
contribution, reimbursement, indemnity, subrogation or enforcement of any rights
from the Borrower, and any other guarantor or endorser hereof, or anyone
otherwise obligated under this Note, until all obligations under this Note are
paid in full and no claim whatsoever exists and/or may exist against the Bank,
any Affiliate, and/or Participant for repayment, a preference payment in
bankruptcy, or otherwise in connection with the Borrower and any Guarantor.
13. Indemnification. The Borrower and any Guarantor agree to indemnify,
defend and hold harmless the Bank, any Affiliate, and/or any officer, director
and/or employee of the Bank and/or any Affiliate of and from any claim or claims
now existing, hereafter arising and/or hereafter brought and/or threatened by
the Borrower and any Guarantor or by any other person or entity, in connection
therewith, on account of or relating to any relationship and/or dealings with
the Borrower and any Guarantor, including without limitation any person or
entity contesting the validity or priority of any mortgage(s) and/or other
collateral granted to the Bank, provided that the foregoing obligations of the
Borrower and any Guarantor shall not apply to any matter attributable to the
gross negligence or willful misconduct of the Bank, any Affiliate or any such
officer, director or employee.
14. Bank Fees, Costs and Expenses. The Borrower and any Guarantor agree
to promptly pay to the Bank and any Affiliate for all legal services hereafter
rendered to the Bank and/or any Affiliate including all reasonable time, legal
fees and expenses, in connection with the review, drafting, preparation for
enforcement, negotiation, enforcement, amendment, extension, substitution and/or
modification of this Note, any endorsement and/or guaranty thereof, any
endorsement and/or guaranty of the obligations of the Borrower to the Bank, any
Loan Documents, any other
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instruments securing or otherwise relating to this Note, any other matters
relating to the collection of the loan proceeds and/or realization on any
collateral given to the Bank, any bankruptcy and/or foreclosure proceedings,
procedures and expenses which relate to the Borrower and any Guarantor and/or
any mortgage(s) and/or other collateral given by the Borrower and any Guarantor,
and all rights and remedies of the Bank, whether now existing and/or hereafter
arising against the Borrower any Guarantor and/or any collateral given by the
Borrower and any Guarantor to the Bank, whether or not court proceedings are
brought. The responsibility set forth anywhere in this Note of Borrower and any
Guarantor to pay for the attorneys' time, legal fees and expenses of the Bank
and/or any Affiliate shall include both outside counsel engaged by the Bank, and
any in-house counsel employed by the Bank and/or any Affiliate at the same rate
as comparable outside counsel.
15. Damages. IN ANY CASE, CONTROVERSY OR MATTER WHICH ARISES OUT OF, OR
IS IN RESPECT OF, THIS NOTE AND/OR LOAN EVIDENCED THEREBY, ANY LOAN DOCUMENTS,
ANY COLLATERAL SECURING THIS NOTE, ANY OTHER INSTRUMENT IN CONNECTION WITH THIS
NOTE, AND/OR ANY OTHER BUSINESS RELATIONSHIP OR TRANSACTION BETWEEN THE BANK
AND/OR ANY AFFILIATE WITH THE BORROWER AND ANY GUARANTOR, WHETHER NOW EXISTING
OR HEREAFTER ARISING, THE BORROWER AND ANY GUARANTOR KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY: (A) WAIVE ANY RIGHT TO AND AGREE NOT TO BRING, COMMENCE, OR
OTHERWISE TAKE ANY ACTION TO TRANSFER, ANY PROCEEDING INCLUDING WITHOUT
LIMITATION COURT ACTION, ARBITRATION, MEDIATION, ADMINISTRATIVE PROCEEDING OR
OTHERWISE AGAINST THE BANK AND/OR AFFILIATE, OTHER THAN IN THE COMMONWEALTH OF
MASSACHUSETTS; (B) WAIVE ANY NOW EXISTING AND/OR HEREAFTER ARISING RIGHT TO
TRIAL BY JURY; AND (C) WAIVE ANY NOW EXISTING AND/OR HEREAFTER ARISING RIGHT TO
ANY CONSEQUENTIAL, PUNITIVE, SPECIAL, EXEMPLARY AND/OR INCIDENTAL DAMAGES.
16. Right of Entry to Premises. At all times when the security
for this Note and/or any endorsement and/or guaranty by any Guarantor includes
real estate, the Borrower and any Guarantor agree that the Bank and any
Affiliate and representatives shall have the right at any time hereafter to
enter the mortgaged premises (a) for purposes of inspecting and testing for
hazardous materials and oils to determine whether or not the premises violate
any provisions of M.G.L. ch. 21E and regulations relating thereto, and/or
(b) for purposes of appraising the mortgaged premises.
17. Cross-Default and Cross-Collateralized. Any default under this Note
shall be a default by the Borrower and any Guarantor under any other promissory
note and/or other instrument by the Borrower and any Guarantor to the Bank, any
Affiliate and/or any Participant, now existing or hereafter arising. Any default
by the Borrower under any other promissory note and/or other instrument by the
Borrower and any Guarantor to the Bank, any Affiliate and/or any Participant now
existing or hereafter arising, shall be a default under this Note and Loan
Documents. All mortgages and/or other collateral from the Borrower to the Bank
and/or any Affiliate, if any, now existing or hereafter arising, shall also
secure the obligations of the Borrower under this Note. All mortgages and/or
other collateral, if any, which secure this Note shall also secure all
promissory notes and other obligations of the Borrower to the Bank, now existing
or hereafter arising, whereof individual and/or joint of the Borrower, or any
one or more persons or entities comprising the Borrower.
18. No Obligation to Refinance. AT THE DUE DATE OF THIS NOTE, THE BANK
MAY DEMAND PAYMENT OF THIS NOTE, MAY REWRITE THIS NOTE BY AGREEMENT AMONG THE
BANK, THE BORROWER AND ITS SUBSIDIARIES AT A GREATER OR LESSER RATE OF
INTEREST,OR MAY, BY SUCH AGREEMENT, ALLOW PAYMENTS TO BE MADE ON THIS NOTE AT
THE SAME, OR A LESSER OR A GREATER RATE OF INTEREST, IF AT ALL. THE LOAN IS
PAYABLE IN FULL AT MATURITY OR UPON EARLIER ACCELERATION. THE BORROWER MUST
REPAY THE ENTIRE PRINCIPAL BALANCE OF THE LOAN AND UNPAID INTEREST WHEN DUE.
THE BANK IS
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UNDER NO OBLIGATION TO REFINANCE THE LOAN AT THAT TIME. THE BORROWER WILL,
THEREFORE, BE REQUIRED TO MAKE PAYMENT OUT OF OTHER ASSETS THE BORROWER MAY OWN,
OR WILL HAVE TO FIND ANOTHER BANK OR LENDER WILLING TO LEND THE BORROWER THE
MONEY AT PREVAILING MARKET RATES, WHICH MAY BE CONSIDERABLY HIGHER THAN THE
INTEREST RATE ON THE LOAN.
19. Acknowledgement of Principal and Interest. Within ten (10) days
after requested by the Bank by notice to the Borrower, the Borrower and any
Guarantor agree to execute and deliver to the Bank a written statement addressed
to the Bank, any Affiliate, any Participant and/or any proposed Participant, and
signed by the Borrower and any Guarantor under the penalties of perjury, and
duly notarized, acknowledging the principal and interest balances then due under
this Note, and further acknowledging that this Note is in full force and effect
and unmodified that the Borrower and any Guarantor have no defenses, offsets or
counterclaims to the payment and/or performance of the obligations of the
Borrower and any Guarantor under this Note, and have no claims or causes of
action of any kind whatsoever then existing against the Bank, any Affiliate
and/or Participant, and a statement that the Bank is not in default under this
Note or any loan or other agreement relating to this Note or any obligations
evidenced thereby, except as may otherwise exist in which event the Borrower
shall specify what otherwise exists, and a statement regarding such other
matters which the Bank may require.
20. Legal Representation. The Borrower and any Guarantor
acknowledge that the Bank has notified and does hereby notify the Borrower and
any Guarantor as follows:
(a) THE RESPONSIBILITY OF THE ATTORNEY FOR THE BANK IS
TO PROTECT THE INTEREST OF THE BANK;
(b) THE BORROWER AND ANY GUARANTOR MAY, AT BORROWER'S OR
GUARANTOR'S OWN EXPENSE, ENGAGE AN ATTORNEY OF THEIR OWN SELECTION TO
REPRESENT THE BORROWER'S OR GUARANTOR'S OWN INTERESTS IN THE
TRANSACTION.
21. Modifications/Substitutions. No delay or omission by the Bank in
exercising or enforcing any of the Bank's powers, rights, privileges, remedies,
or discretions hereunder shall operate as a waiver thereof on that occasion nor
on any other occasion. No waiver of any default hereunder shall operate as a
waiver of any other default hereunder, or as a continuing waiver. This Note
shall be binding upon the Borrower and each endorser and guarantor hereof and
upon their respective heirs, successors, assigns, and representatives (limited,
however, in the case of heirs, successors, assigns and representatives of the
Limited Guarantors (as defined in the Loan Agreement), to their interest in the
collateral pledged by such Limited Guarantors), and shall inure to the benefit
of the Bank and its successors, endorsees, and assigns. The Borrower and any
Guarantor each authorizes the Bank to complete this Note if delivered incomplete
in any respect by the Borrower and any Guarantor. This Note as delivered to the
Bank at one of its offices in Massachusetts, shall be governed by the laws of
the Commonwealth of Massachusetts, and shall take effect as a sealed instrument.
The Borrower and any Guarantor of this Note each submits to the jurisdiction of
the courts of the Commonwealth of Massachusetts for all purposes with respect to
this Note, any collateral given to secure their respective liabilities,
obligations and indebtedness to the Bank, and their respective relationships
with the Bank. The Borrower and any Guarantor agree that all assets in which the
Borrower and any Guarantor have previously granted or hereafter granted or
hereafter grant to the Bank or any Affiliate a security, mortgage or collateral
interest shall secure the Liabilities and Obligations. This Note includes all
future amendments, decreases, extensions, increases, modifications,
renegotiations, renewals, replacements, revisions, rewritings and/or
substitutions thereof, in whole or in part ("Modifications/Substitutions"). The
Borrower and
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any Guarantor agree that any mortgages and/or other collateral, if any, which
may secure this Note, secure all Modifications/Substitutions of this Note, if
any, now existing and/or hereafter arising, and include all future
Modifications/Substitutions of such mortgages and/or other collateral, if any
now existing and/or hereafter arising. Time of all payments and the performance
of all of the provisions hereof is of strict essence (taking into account any
applicable grace period). In the event more than one person or entity comprises
the Borrower, all provisions herein of the Borrower are joint and several
obligations. The Borrower and any Guarantor acknowledge and agree, and say under
the penalties of perjury, that (a) each is executing this Note as the free act
and deed of each, (b) each is not acting under any duress or undue influence,
and (c) the Bank and/or any Affiliate have made no agreements warranties,
representations or promises in connection with this Note and/or any loan
agreements or other agreements relating to this Note, except as set forth herein
or in a written instrument executed and delivered by the Bank. The provisions of
this Note are hereby declared to be severable, and the invalidity of any
provision or application thereof shall not effect any other provisions or any
other application thereof. Interest on principal under this Note shall accrue
only on the amount of principal from time to time actually outstanding under
this Note. The Bank records, including without limitation, computer printouts of
the Bank showing an account of the Borrower, shall be admissible as evidence in
any action or proceeding in connection with this Note. This Note may not be
modified orally, but may only be modified by written instrument signed by the
holder hereof
22. Conflicting Provisions. To the extent and only to the extent
that any provision contained in this Note is directly inconsistent and
conflicts with any corresponding provision contained in the Loan Agreement,
then the corresponding provision contained in the Loan Agreement shall govern.
23. Limited Guarantors. Notwithstanding any other provision contained
in this Note to the contrary (including, without limitation, those relating to
indemnifications or costs and expenses), the Bank's sole recourse against the
Limited Guarantors (as defined in the Loan Agreement) with respect of any
liabilities evidenced by this Note shall be limited as set forth in the Limited
Guaranties, the Security Agreements and the Assignments of Receivables and
Proceeds executed and delivered to the Bank by such Limited Guarantors;
provided, however, that notwithstanding any of the foregoing, such limitation on
the liabilities of the Limited Guarantors shall in no way be deemed to limit or
otherwise affect any or all of the rights and remedies of the Bank against the
Borrower, any of its Subsidiaries or any other guarantors under any of the Loan
Documents or at law or in equity.
24. Receipt. The Borrower has read all of the terms and
conditions of this Note and acknowledges receipt of an exact copy of it.
IN WITNESS WHEREOF, the undersigned has executed this Note under its
seal as of the date first written above.
WITNESS: FINE HOST CORPORATION
______________________ By:______________________
Name: Name:
Title:
Its duly authorized officer
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SCHEDULE 1
LIBOR PROVISIONS
$-----------------
COMMERCIAL PROMISSORY NOTE (the "Note")
OF
FINE HOST CORPORATION (the "Borrower")
TO
________________ (the "Bank")
The principal outstanding from time to time under the Note shall accrue
interest at the Variable Rate (as defined in the Note) or the LIBOR (as defined
below). The terms set forth in these LIBOR Provisions are incorporated in the
Note and shall govern: (a) the manner by which the Borrower may designate
application of the LIBOR to portions of principal outstanding, from time to
time, under the Note; and (b) the application of the LIBOR.
1. Certain Definitions. As used herein, in addition to the terms defined in
the Note, the following terms shall have the respective meanings ascribed to
them below:
1.1 "Business Day" shall mean any day other than: (a) a
Saturday or a Sunday, (b) a day that banks are lawfully closed for
business in Boston, Massachusetts or New York City, New York, or (c) a
day that transactions cannot be carried out by and between banks in the
London interbank market.
1.2 "Legal Requirement" shall mean any requirement imposed on
Bank by any treaty or law of the United States of America, or of any
jurisdiction affecting the LIBOR Market, or by any regulation, order,
interpretation, ruling or official directive or guideline of the
Federal Reserve System or of any other board or governmental or
administrative agency of the United States of America, any jurisdiction
affecting the LIBOR Market or any political subdivision of any of the
foregoing, and any requirement imposed by any such regulation, order,
ruling or official directive or guideline not having the force of law
shall be deemed to be a Legal Requirement if Bank reasonably believes
that compliance therewith is necessary or prudent for the Bank's
business, even though such regulation, order, ruling or official
directive does not have the force of law.
1.3 "LIBOR" shall mean for each LIBOR Period the rate of
interest per annum (rounded up to the nearest 0.005%) obtained by
dividing the LIBOR Base by the number one (1), minus the LIBOR Reserve
Requirement, i.e.:
LIBOR = LIBOR Base
1 - LIBOR Reserve Requirement
1.4 "LIBOR Amount" shall mean an amount of principal
outstanding under the Note and designated by the Borrower in the
applicable LIBOR Election in U.S. Dollars that is a minimum of U.S.
$1,000,000.00 and integral multiples of U.S. $500,000.00 thereafter.
1.5 "LIBOR Base" shall mean Two and 50/100 Percent (2.50%) per
annum plus the average rate of interest per annum at which the Bank is
offered deposits in U.S. Dollars, in same day funds ("LIBOR Deposits")
by prime banks in the London interbank market ("LIBOR Market"), as of
twelve o'clock in London, England time, on the third Business Day
9
<PAGE>
prior to the commencement of the LIBOR Period for which a LIBOR
Election is being made, in an amount of U.S. dollars similar to the
LIBOR Amount, and for a deposit period comparable to the LIBOR Period
for which the LIBOR Election is being made.
1.6 "LIBOR Election" shall mean telephonic notice from the
Borrower to the Bank, followed by a written election delivered by the
Borrower to the Bank, specifying a LIBOR Amount and a LIBOR Period for
which the Borrower wishes to designate application of the LIBOR.
1.7 "LIBOR Period" shall mean a period of thirty (30) days,
ninety (90) days or one hundred eighty (180) days, whichever period is
chosen by the Borrower in the LIBOR Election.
1.8 "LIBOR Reserve Requirement" shall mean the effective rate
per annum, in effect at the start of the applicable LIBOR Period or
otherwise affecting the applicable LIBOR Amount, expressed as a decimal
to the 4th digit, of any reserve (including, without limitation, any
basic, supplemental, marginal or emergency reserve), reserve asset,
special deposit, fee, charge, insurance premium or assessment required
by any Legal Requirement or otherwise in the LIBOR Market to be
maintained or paid by Bank on or with respect to (i) any LIBOR Deposits
purchased in the LIBOR Market which was used to fund any LIBOR Amount,
(ii) the principal amount of or interest on any LIBOR Amount or (iii)
funds transferred from a non-United States office or an international
banking facility of Bank to a United States office of Bank in order to
fund any LIBOR Amount.
1.9 "Tax" shall mean any tax, levy, impost, duty, deduction,
withholding or other charge of whatever nature at any time required by
any Legal Requirement (x) to be paid by Bank or (y) to be withheld or
deducted from any payment otherwise required hereby to be made by
Borrower to Bank, in each case on or with respect to (i) any LIBOR
Deposit purchased in the LIBOR Market which was used to fund any LIBOR
Amount, (ii) any portion of a LIBOR Amount funded with the proceeds of
any such deposit, (iii) the principal amount of or interest on any
LIBOR Amount, or (iv) funds transferred from a non-United States office
or an international banking facility of Bank to a United States office
of Bank in order to fund any LIBOR Amount, provided that "Tax" shall
not include (A) taxes imposed upon or measured by the net income of
Bank, (B) taxes which would have been imposed even if there had been no
provision for LIBOR Rate options or (C) amounts required to be withheld
by Bank from payments of interest to parties from whom LIBOR Deposits
were purchased by Bank.
2. LIBOR Elections. Each designation by the Borrower for application of
the LIBOR shall be made by delivering a LIBOR Election to the Bank, which must
be received by the Bank by 12:00 Noon on the third business day prior to the
commencement of the applicable LIBOR Period designated therein. Each LIBOR
Election shall be irrevocable once acted upon by the Bank. A LIBOR Election may
be made with respect to LIBOR Amounts which are: (a) new advances of principal
under the Note; (b) principal outstanding under the Note which is then subject
to the Variable Rate; or (c) principal outstanding under the Note which is
currently subject to a LIBOR for which the applicable LIBOR Period will expire
not more than five (5) Business Days from the date of the LIBOR Election. The
Borrower may not select for any portion of Converted Principal any LIBOR Period
that will extend beyond the fifth anniversary of the Guidance Line Conversion
Date applicable to such Converted Principal. No LIBOR Election may be made by
the Borrower on or after the occurrence of an Event of Default (or the
occurrence of any event which, with the passage of time or giving of notice or
both would result in the occurrence of an Event of Default).
10
<PAGE>
3. Early Termination of LIBOR Period. To the extent that the Bank is
required to arrange for early termination of any LIBOR Period to permit the
Borrower to make a repayment or prepayment of principal under the Note (whether
or not required by the Bank or requested by the Borrower), the Borrower shall:
(a) reimburse the Bank for expenses and lost profits incurred
by it as a result of a such early termination; or
(b) if any such early termination cannot be effected by the
Bank, continue to pay to the Bank, in U.S. dollars, interest at the
applicable LIBOR during the LIBOR Period on the LIBOR Amount.
4. Limitations on Availability or Applicability of LIBOR. If at any
time when the LIBOR is to be determined, LIBOR Deposits are not being offered to
the Bank in the LIBOR Market, in an amount approximately equal to the designated
LIBOR Amount for a period approximately equal to the designated LIBOR Period, or
if, for any other reason, the Bank, acting reasonably, is unable to determine
the applicable LIBOR, then, failing agreement between the Bank and the Borrower
as to a substitute LIBOR (if available or determinable) for such amount, the
Variable Rate shall be the effective interest rate with respect to such amount
commencing on the date which would have been the first day of such LIBOR Period.
The Borrower acknowledges that the ability of the Bank to charge interest based
on the LIBOR on the basis provided hereunder or to obtain offsetting LIBOR
Deposits in the LIBOR Market will be subject to any law, regulation, order, rule
or directive applicable to the Bank and to other similar financial institutions
(collectively, a "Restraint") which may prohibit or restrict the charging of the
LIBOR, or making or maintaining of loans based thereon, and the Borrower agrees
that the Bank shall have the right to comply with any such Restraint and, at the
option of the Bank, to convert any LIBOR interest to the Variable Rate. In all
events, on and after the occurrence of an Event of Default, and to the maximum
extent permitted by applicable law, interest on all principal outstanding under
the Note shall accrue, at the Bank's option, at the Variable Rate, and, if and
when due, at the Variable Rate plus two percent (2.0%) from the applicable due
date until paid.
5. Increased Costs from Changes in Legal Requirements or Taxes. If, at
any time hereafter, there shall be any change in Legal Requirements or Taxes
which results in any increased costs to the Bank of making, funding, creating or
maintaining a LIBOR option; then, upon notification in writing to the Borrower
by the Bank, the Borrower shall immediately pay to the Bank such amount as shall
fully compensate the Bank for all such increased costs which accrue up to and
including the date of such notice, and, thereafter, the Borrower shall continue
to pay to the Bank such additional amounts as shall fully compensate the Bank
for such increased costs. The determination by Bank of the amount of any such
increased costs incurred by it, if done in good faith, and the allocation, if
any, of such costs among Borrower and other customers which have arrangements,
directly or indirectly, with Bank similar to the LIBOR option, if made on an
equitable basis, in the absence of manifest error, shall be conclusive.
6. End of Month Provisions. Whenever any payment to be made hereunder
shall be stated to be due, or whenever the last day of any LIBOR Period would
otherwise occur, on a day that is not a Business Day, such payment shall be
made, and the last day of such LIBOR Period shall occur, on the next succeeding
Business Day; provided, however, if such extension would cause such payment to
be made or the last day of such LIBOR Period to occur in a new calendar month,
11
<PAGE>
such payment shall be made and the last day of such LIBOR Period shall occur on
the next preceding Business Day; and in either event such extension of time or
such shortening of time shall in such case be included (or reflected, as the
case may be) in the computation of payment of interest.
12
ADDENDUM TO UST APPLICATION FOR
COMMERCIAL LETTER OF CREDIT AND AGREEMENT
Without limiting the obligations of the Account Party hereunder (but
without duplication), if as a result of any Regulatory Change (as defined in the
Loan Agreement) or any risk-based capital guideline or other requirement
heretofore or hereafter issued by any government or governmental or supervisory
authority implementing at the national level the Basel Accord, there shall be
imposed, modified or deemed applicable any tax, reserve, special deposit,
capital adequacy or similar requirement against or with respect to or measured
by reference to Letters of Credit issued or to be issued hereunder and the
result shall be to increase the cost to any of the Banks (as defined in the Loan
Agreement) of issuing (or purchasing participations in) or maintaining its
obligation under the Loan Agreement to issue (or purchase participations in) any
Letter of Credit or reduce any amount receivable by any Bank hereunder in
respect of any Letter of Credit (which increases in cost, or reductions in
amount receivable, shall be the result of such Bank's or Banks' reasonable
allocation of the aggregate of such increases or reductions resulting from such
event), then, upon demand by UST as Agent, the Account Party shall pay
immediately to UST as Agent for the account of such Bank or Banks, from time to
time as specified by such Bank or Banks (through UST as Agent), such additional
amounts as shall be sufficient to compensate such Bank or Banks (through UST as
Agent) for such increased costs or reductions in amount. A statement as to such
increased costs or reductions in amount incurred by any such Bank or Banks,
submitted by such Bank or Banks to the Account Party shall be conclusive in the
absence of manifest error as to the amount thereof.
As used herein, the term "Loan Agreement" means that certain Third
Amended and Restated Loan Agreement, dated of even date herewith, by and among
the Account Party, certain Subsidiaries of the Account Party, UST (hereinafter
referred to as the "UST" when acting for itself), as Lender and Agent thereunder
(hereinafter referred to as the "Agent" when acting as Agent for the Banks (as
defined below)), The Sumitomo Bank, Limited ("Sumitomo"), State Street Bank and
Trust Company ("SSB"), Bank of Boston Connecticut ("BBC"), (g) Mellon Bank, N.A.
("Mellon") and The Bank of New York ("BNY")(UST Sumitomo, SSB, BBC, Mellon and
BNY, together with their successors and assigns, are hereinafter sometimes
referred to collectively as the "Banks"), as the same may be hereafter further
amended, modified, supplemented, extended or restated from time to time. All
capitalized terms not defined herein but defined in the Loan Agreement shall
have the meanings ascribed to such terms in the Loan Agreement.
<PAGE>
1. Loan Agreement. This Unlimited Guaranty is subject to all of the
terms and provisions contained in the Loan Agreement. As used herein, the term
"Loan Agreement" means that certain Third Amended and Restated Loan Agreement,
dated of even date herewith, by and among Fine Host Corporation, a Delaware
corporation (the "Borrower"), certain Subsidiaries of the Borrower (including
the Undersigned), USTrust (hereinafter referred to as "USTrust" when acting for
itself), as Lender and Agent thereunder (hereinafter referred to as the "Agent"
when acting as Agent for the Banks (as defined below), The Sumitomo Bank,
Limited ("Sumitomo"), State Street Bank and Trust Company ("SSB"), Bank of
Boston Connecticut ("BBC"), Mellon Bank, N.A. ("Mellon") and The Bank of New
York ("BNY") (USTrust, Sumitomo, SSB, BBC, Mellon and BNY, together with their
successors and assigns, are hereinafter sometimes referred to collectively as
the "Banks" and singly as a "Bank"), as the same may be hereafter further
amended, modified, supplemented, extended or restated, from time to time. All
capitalized terms not defined herein but defined in the Loan Agreement shall
have the meanings ascribed to them in the Loan Agreement.
2. Consideration. The Undersigned is a wholly-owned Subsidiary of the
Borrower. As a condition to continuing to make the Loans and granting other
financial accommodations to and for the benefit of the Borrower and all of its
Subsidiaries (including without limitation, the Undersigned), all as described
in the Loan Agreement, the Banks have requested that the Undersigned enter into
this Unlimited Guaranty. The Undersigned hereby acknowledges and agrees that, by
entering into this Unlimited Guaranty, the proceeds from the Loans will directly
benefit both the Borrower and each of its Subsidiaries, including but not
limited to, the Undersigned.
3. Security. All of the obligations and liabilities of the
Undersigned under this Unlimited Guaranty are secured by the following:
(a) a certain First Amended and Restated Security Agreement,
dated of even date herewith, by and between the Undersigned and the
Agent, pursuant to which, among other thing, the Undersigned has
granted to the Banks a security interest in the assets of the
Undersigned, as more particularly described therein, and
(b) a certain First Amended and Restated Assignment of
Receivables and Proceeds, dated of even date herewith, by and between
the Undersigned and the Agent, pursuant to which, among other things,
the Undersigned has assigned to the Agent all of the rights, title and
interests of the Undersigned in certain proceeds and receivables
resulting from certain agreements, contracts, permits, licenses and
other arrangements to which the Undersigned is or may become a party;
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<PAGE>
and may be further secured hereinafter, from time to time, by one or more other
security agreements, mortgages, pledges, assignments or other instruments,
documents or agreements (collectively, the "Security"), whether or not such
Security is specifically referred to in this Unlimited Guaranty.
4. Waiver of Claims of the Undersigned. Any claim, set-off or
recoupment against the Borrower to which the Undersigned may be or become
entitled (including without limitation, claims of reimbursement, subrogation or
for contribution or otherwise) by reason of any payment or performance by the
Undersigned in satisfaction and discharge in whole or in part of its obligations
under this Unlimited Guaranty shall be and hereby are irrevocably and forever
waived by the Undersigned. The Undersigned will not demand, sue for, or
otherwise attempt to collect any such indebtedness, and any amounts which are
collected, enforced and received by the Undersigned shall be held by the
Undersigned as trustee for the Bank and shall be paid over to the Bank on
account of the Liabilities without affecting in any manner the liability of the
Undersigned under any other provision hereof.
5. Representations and Acknowledgements of the Undersigned. In order to
induce the Banks to enter into the documents evidencing certain of the
Liabilities, the Undersigned hereby represents and warrants that this Unlimited
Guaranty and all other agreements and instruments executed and delivered by the
Undersigned to the Banks in connection with this Unlimited Guaranty represent,
and are and will be, the valid and legally binding obligations of the
Undersigned, enforceable in accordance with their respective terms.
6. Reinstatement. This Unlimited Guaranty shall continue to be
effective, or be reinstated, as the case may be, if at any time any amount
received by the Banks in respect of the Liabilities is rescinded or must
otherwise be restored or returned by the Banks upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of the Borrower or the Undersigned or
upon the appointment of an intervenor or conservator of, or trustee or similar
official of the Borrower or the Undersigned or any substantial part of any of
its respective properties, or otherwise, all as though said payments had not
been made.
7. Survival of Unlimited Guaranty. This Unlimited Guaranty incorporates
all discussions and negotiations between the Undersigned and the Banks
concerning this Unlimited Guaranty. No such discussions or negotiations shall
limit, modify or otherwise affect the provisions hereof. No provision hereof may
be altered, amended, waived, cancelled or modified, except by a written
instrument executed and acknowledged by a duly authorized officer of the Bank,
and except in the case of a waiver, by the Undersigned. This Unlimited Guaranty
shall inure to the benefit of and be binding upon the parties hereto and their
respective successors and assigns, including any subsequent holder or holders of
any Liabilities, and the term "Bank" shall refer to each of the following
entities as well as all of the following entities: USTrust, Sumitomo, SSB, BBC,
Mellon and BNY, together with their successors and assigns. If a court of
competent jurisdiction shall hold any provisions of this Unlimited Guaranty to
be invalid, illegal or unenforceable, the validity, legality and
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<PAGE>
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
8. No Conflicts. To the extent and only to the extent that any
provision contained in this Unlimited Guaranty is directly inconsistent and
conflicts with any corresponding provision contained in the Loan Agreement, then
the corresponding provision contained in the Loan Agreement shall govern. To the
extent and only to the extent that any provision contained in this Unlimited
Guaranty is directly inconsistent and conflicts with any corresponding provision
contained in any of the Loan Documents other than the Loan Agreement, then the
provisions contained in this Unlimited Guaranty shall govern. To the extent
possible, however, the provisions contained in this Unlimited Guaranty and the
other Loan Documents shall be interpreted to complement and supplement each
other and the absence of any provision or portion thereof in any such document
shall not be deemed to be an inconsistency with any other such documents which
contains such provision or portion thereof.
9. Amendment and Restatement. This Unlimited Guaranty amends, restates
and replaces in its entirety a certain Unlimited Guaranty, dated as of April 29,
1993, from the Undersigned, in favor of the Banks, as subsequently amended and
reaffirmed from time to time (as so amended and reaffirmed, the "Original
Guaranty"). Upon the execution and delivery of this Unlimited Guaranty, this
Unlimited Guaranty shall replace the Original Guaranty, and all references to
the Original Guaranty shall now and hereafter mean and refer to this Unlimited
Guaranty.
IN WITNESS WHEREOF, the Undersigned has executed this instrument under
seal as of this ___ day of ______, 1996.
WITNESS: GUARANTOR:
[NAME OF UNLIMITED GUARANTOR]
____________________________ By:_____________________________
Name: Name:
Title:
Its duly authorized officer
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<PAGE>
EXHIBIT E
FORM OF
FIRST AMENDED AND RESTATED SECURITY AGREEMENT
(for [Unlimited Guarantor])
This FIRST AMENDED AND RESTATED SECURITY AGREEMENT (the "Agreement") is
entered into as of this ___ day of ______, 1996, by and between (a)
________________________, a _________________ corporation, with its principal
place of business at _______________________________________________ (together
with its successors and assigns, the "Debtor") and (b) USTRUST, a Massachusetts
trust company (hereinafter referred to as "USTrust" when acting for itself), as
Lender and Agent (hereinafter referred to as the "Secured Party" when acting as
Agent for the Banks (as defined below)) for each of (i) USTrust, (ii) The
Sumitomo Bank, Limited ("Sumitomo"), (iii) State Street Bank and Trust Company
("SSB"), (iv) Bank of Boston Connecticut ("BBC"), (v) Mellon Bank, N.A.
("Mellon") and (vi) The Bank of New York ("BNY") (USTrust, Sumitomo, SSB, BBC,
Mellon and BNY, together with their successors and assigns, are hereinafter
referred to collectively as the "Banks").
All capitalized terms not defined herein but defined in the Loan
Agreement shall have the meanings ascribed to them in the Loan Agreement. As
used herein, the term "Loan Agreement" means that certain Third Amended and
Restated Loan Agreement, dated of even date herewith, by and among Fine Host
Corporation, a Delaware corporation ("Fine Host Corporation"), certain
Subsidiaries of Fine Host Corporation, the Banks and the Secured Party, as the
same may be hereafter further amended, modified, supplemented, extended or
restated from time to time.
WITNESSETH:
WHEREAS, in connection with the Existing Loan Agreement (as defined in
the Loan Agreement), the Debtor entered into the following:
(a) a certain Unlimited Guaranty, dated ___________, 199_,
from the Debtor, as subsequently amended and reaffirmed from time to
time (as so amended and reaffirmed, the "Existing Unlimited Guaranty"),
pursuant to which, among other things, the Debtor guaranteed all of the
obligations and liabilities of Fine Host Corporation to USTrust,
Sumitomo, NBD Bank and SSB (hereinafter sometimes referred to
collectively as the "Existing Banks");
(b) a certain Security Agreement, dated as of __________,
199_, by and between the Debtor and the Secured Party, as subsequently
amended from time to time (as so amended, the "Existing Security
Agreement"), pursuant to which, among other thing, the Debtor granted
to the Secured Party a security interest in the assets of the Debtor,
as more particularly described therein and herein, to secure all of the
obligations and liabilities of the Debtor to the Banks; and
<PAGE>
(c) a certain Assignment of Receivables and Proceeds, dated as
of ____________, 199_, by and between the Debtor and the Secured Party,
as subsequently amended from time to time (as so amended, the "Existing
Assignment of Receivables and Proceeds"), pursuant to which, among
other things, the Debtor has assigned to the Secured Party as
additional security all of its rights, title and interests in certain
proceeds and receivables resulting from certain agreements, contracts,
permits, licenses and other arrangements to which the Debtor is or may
become a party; and
WHEREAS, Fine Host Corporation and each of its Subsidiaries (including
without limitation, the Debtor) have requested that the Banks enter into the
Loan Agreement in order to amend, restate and replace in its entirety the
Existing Loan Agreement; and
WHEREAS, as a condition precedent to entering into the Loan Agreement
and making the Loans thereunder, the Banks have requested, among other things,
that the Debtor enter into the following:
(a) a certain First Amended and Restated Unlimited Guaranty,
dated of even date herewith, from the Debtor, in favor of the Banks,
which amends, restates and replaces in its entirety the Existing
Unlimited Guaranty (as the same may be hereafter further amended,
modified, substituted, restated or reaffirmed, from time to time, the
"Unlimited Guaranty");
(b) this Agreement in order to amend, restate and replace in
its entirety the Existing Security Agreement; and
(c) a certain First Amended and Restated Assignment of
Receivables and Proceeds, dated of even date herewith, by and between
the Debtor and the Secured Party, which amends, restates and replaces
in its entirety the Existing Assignment of Receivables and Proceeds (as
the same may be hereafter further amended, modified, substituted, or
restated, from time to time, the "Assignment of Receivables and
Proceeds"); and
WHEREAS, in response to the foregoing request of the Banks, the Debtor
agrees to enter into, effective as of the date hereof, the Unlimited Guaranty,
this Agreement and the Assignment of Receivables and Proceeds;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Debtor and the Secured Party,
for the ratable benefit of the Banks, hereby amend, restate and replace the
Existing Security Agreement to read in its entirety as follows:
Article I. Grant of Security Interest.
1.1 To secure the prompt, punctual, and faithful performance by
the Debtor of all of its Liabilities (as defined in the Loan Agreement),
including without limitation, all of the
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<PAGE>
obligations and liabilities of the Debtor to the Banks under the Unlimited
Guaranty, the Debtor hereby grants to the Secured Party, for the ratable benefit
of the Banks, a continuing security interest in and to, and assigns to the
Secured Party, all of the rights, title and interests of the Debtor in and to,
the following, and each item thereof, whether now owned or now due, or in which
the Debtor has an interest, or hereafter at any time in the future, acquired,
arising, or to become due, or in which the Debtor obtains an interest, and all
products, proceeds, substitutions, and accessions of or to any of the following
(all of which, together with any other property in which the Secured Party may
in the future be granted a security interest pursuant hereto, is referred to
hereinafter as the "Collateral"): (a) All Accounts and Accounts Receivable; (b)
All Inventory; (c) All Contract Rights; (d) All General Intangibles; (e) All
Equipment; (f) All Farm Products; (g) All Goods; (h) All Chattel Paper, Note
Receivables and Receivables (including but not limited to, all License
Agreements, all Management Agreements, all Concession Agreements, all Food
Service Operation Agreements, and all Facilities Agreements); (i) All Fixtures;
(j) All books, records, and information relating to the Collateral and/or to the
operation of the Debtor's business, and all rights of access to such books,
records, and information, and all property in which such books, records, and
information are stored, recorded, and maintained, subject, in the case of rights
of access to premises not owned by the Debtor, to rights of third parties; (k)
All Instruments, Documents of Title, Documents, policies and certificates of
insurance, Securities, deposits, deposit accounts, money, cash, or other
property; (l) All federal, state, and local tax refunds and/or abatements to
which the Debtor is, or becomes entitled, no matter how or when arising,
including, but not limited to any loss carryback tax refunds; (m) All insurance
proceeds, refunds, and premium rebates, including, without limitation, proceeds
of fire and credit insurance, whether any of such proceeds, refunds, and premium
rebates, arise out of the foregoing (a through l), or otherwise; (n) All liens,
guaranties, rights, remedies, and privileges pertaining to any of the foregoing
(a through m) including the right of stoppage in transit; and (o) All licenses
and permits (including but not limited to, all liquor licenses).
1.2 The foregoing grant of a security interest is in addition to, and
supplemental of, any security interest previously granted by the Debtor to the
Secured Party and shall continue in full force and effect applicable to all
Liabilities and to any future advances made by the Secured Party to or on behalf
of the Debtor until this Agreement is specifically terminated in writing by a
duly authorized officer of the Secured Party.
1.3 "Proceeds" include, without limitation, "Proceeds" as defined in
the Uniform Commercial Code as adopted in Massachusetts (hereinafter, the "UCC")
and also, insurance proceeds, and each type of property described in Sections
1-1(a) through and including 1- 1(o).
Article II. Definitions.
As herein used, the following terms have the following meanings:
2.1 "Liabilities" has the meaning given to that term in the Loan
Agreement.
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<PAGE>
2.2 "Costs of Collection" includes, without limitation, all attorneys'
reasonable fees, and out-of-pocket expenses incurred by the Secured Party's
attorneys, and all costs incurred by the Secured Party in the administration of
the Liabilities, this Agreement, and all other instruments and agreements
executed in connection with or relating to the Liabilities including, without
limitation, costs and expenses associated with travel on behalf of the Secured
Party. Costs of Collection also includes, without limitation, all attorneys'
reasonable fees, out-of-pocket expenses incurred by the Secured Party's
attorneys, and all costs and expenses incurred by the Secured Party, including,
without limitation, costs and expenses associated with travel on behalf of the
Secured Party, which costs and expenses are directly or indirectly related to or
in respect of the Secured Party's efforts to preserve, protect, collect, or
enforce the Collateral, the Liabilities and/or the Secured Party's Rights and
Remedies or any of the Secured Party's rights and remedies against or in respect
of any guarantor or other person liable in respect of the Liabilities (whether
or not suit is instituted in connection with such efforts). The Costs of
Collection shall be added to the Liabilities of the Debtor to the Secured Party,
as if such had been lent, advanced, and credited by the Secured Party to, or for
the benefit of, the Debtor.
2.3 "Accounts" and "Accounts Receivable" include, without limitation,
"accounts" as defined in the UCC, and also all accounts, accounts receivable,
notes, drafts, acceptances, and other forms of obligations and receivables and
rights to payment for credit extended and for goods sold or leased, or services
rendered, whether or not yet earned by performance; all Inventory which gave
rise thereto, and all rights associated with such Inventory, including the right
of stoppage in transit, all reclaimed, returned, rejected or repossessed
Inventory (if any) the sale of which gave rise to any Account.
2.4 "Inventory" includes, without limitation, "inventory" as defined in
the UCC and also all goods, wares, merchandise, raw materials, work in process,
finished goods, and all packaging, advertising, shipping material, and documents
related to any of the foregoing, and all labels, and other devices, names, or
marks affixed or to be affixed thereto for identifying or selling the same, and
other personal property of every description held for sale or lease or furnished
or to be furnished under a contract or contracts of sale or service by the
Debtor, or used or consumed or to be used or consumed in the Debtor's business,
and all goods of said description which are in transit, and all returned,
repossessed and rejected goods of said description, and all such goods of said
description which are detained from or rejected for entry into the United
States, and all documents (whether or not negotiable) which represent any of the
foregoing.
2.5 "Contract Rights" includes, without limitation, "contract rights"
as now or formerly defined in the UCC and also any right to payment under a
contract not yet earned by performance and not evidenced by an instrument or
Chattel Paper.
2.6 "General Intangibles" includes, without limitation, "general
intangibles" as defined in the UCC; and also all: rights to payment for credit
extended; deposits; amounts due to the Debtor; credit memoranda in favor of the
Debtor; warranty claims; all means and vehicles of investment or hedging,
including, without limitation, options, warrants, and futures contracts;
records; customer lists; goodwill; causes of action; judgments; payments under
any settlement or other agreement; literary rights; rights to performance;
royalties;
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license fees; franchise fees; rights of admission; licenses; franchises;
permits; certificates of convenience and necessity, and similar rights granted
by any governmental authority; copyrights; trademarks, trade names, service
marks, patents, patent applications, patents pending, and other intellectual
property; developmental ideas and concepts; proprietary processes; blueprints;
drawings; designs; diagrams; plans; reports; charts; catalogs; manuals;
technical data; computer programs, computer records, computer software, rights
of access to computer record service bureaus, service bureau computer contracts,
and computer data; proposals; costs estimates, and other reproductions on paper,
or otherwise, of any and all concepts or ideas, and any matter related to, or
connected with, the design, development, manufacture, sale, marketing, leasing,
or use of any or all property produced, sold, or leased, by the Debtor or credit
extended or services performed, by the Debtor, whether intended for an
individual customer or the general business of the Debtor, or used or useful in
connection with research by the Debtor.
2.7 "Equipment" includes, without limitation, "equipment" as defined in
the UCC, and also all motor vehicles, rolling stock, machinery, office
equipment, plant equipment, tools, dies, molds, store fixtures, furniture, and
other goods, property, and assets which are used and/or were purchased for use
in the operation or furtherance of the Debtor's business.
2.8 "Farm Products", "Goods", "Chattel Paper", "Instruments",
"Documents of Title", "Documents", "Securities", "Fixtures" and "Account
Debtors" each has the same meaning respectively given that term in the UCC.
2.9 "Obligations" shall mean the obligations, covenants,
representations and warranties of Fine Host Corporation or any of the
Subsidiaries (including without limitation, the Debtor) to the Banks under the
Loan Documents.
2.10 "Receivables Collateral" refers to that portion of the Collateral
which consists of the Debtor's Accounts, Accounts Receivable, Contract Rights,
General Intangibles, Chattel Paper, Instruments, Documents of Title, Documents,
Securities, letters of credit and bankers' acceptances, and any rights to
payment now held or in which the Debtor has an interest, or hereafter acquired,
or in which the Debtor obtains an interest.
Article III. Representations, Warranties and Covenants.
3.1 The Debtor shall pay when due (or on demand if so payable) the
Liabilities and promptly, punctually, and faithfully shall perform the
Obligations.
3.2 The Debtor presently is and shall hereafter remain in good standing
as a corporation in that State indicated in the Preamble of this Agreement and
is and shall hereafter remain duly qualified and in good standing in every other
State in which, by reason of the nature or location of the Debtor's assets or
operation of the Debtor's business, such qualification may be necessary, except
those States in which the failure to qualify and remain in good standing would
not have a Material Adverse Effect (as defined in the Loan Agreement) on the
Debtor. The execution and delivery of this Agreement and of any other
instruments or documents executed in connection herewith constitute
representations by the
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Debtor that such execution and delivery have received all corporate
authorization as may be necessary to permit such execution and delivery to, and
that they do, bind the Debtor.
3.3 Exhibit A attached hereto and incorporated herein by reference
constitutes a listing of:
(i) all trade names and trade styles under which the
Debtor presently conducts or ever conducted their respective
businesses; and
(ii) all legal names and legal statuses (such as a corporation
or partnership) under which the Debtor ever conducted business.
3.4 The Debtor is, and shall hereafter remain, the owner of the
Collateral free and clear of all liens, encumbrances, attachments, security
interests, purchase money security interests, mortgages, and charges with the
exceptions of (a) the security interest created herein, and (b) the security
interests and other encumbrances (if any) listed on Exhibit B attached hereto
and incorporated herein by reference or as otherwise permitted in the Loan
Agreement. The Debtor does not presently, and shall not hereafter have
possession of any property on consignment. The Debtor shall timely pay all of
the Debtor's encumbrances which are secured by security interests which may be
superior to that granted the Secured Party herein.
3.5 The Debtor's principal place of business, chief executive office
and mailing address is set forth at the beginning of this Agreement; set forth
on Exhibit C are the locations of all Debtor's other places of business or at
which the Collateral may be kept or located. Except to accomplish sales of
Inventory in the ordinary course of business and to utilize such of the
Collateral as is removed from such locations in the ordinary course of business
(such as motor vehicles), the Collateral will be kept at all times at the
Debtor's principal place of business and chief executive office as set forth at
the beginning of this Agreement or at the locations of the Debtor's other places
of business as set forth on Exhibit C. All the information contained in the
Exhibits to this Agreement is true, accurate and complete, and the Debtor hereby
agrees to furnish the Secured Party written notice within ten (10) days of any
changes therein, or any additional information necessary to insure that the
information contained in the Exhibits remains true, accurate and complete.
3.6 The Debtor shall provide the Secured Party with such information
concerning the Debtor, the Collateral, the operation of the Debtor's business,
and the Debtor's financial condition as the Secured Party may reasonably request
from time to time. All financial information so provided the Secured Party by
the Debtor shall be prepared in accordance with generally accepted accounting
principles applied consistently in the preparation thereof and with prior
periods and shall fairly reflect the matters described therein.
3.7 All covenants, representations, and warranties made by the Debtor
pursuant to the terms of the Loan Agreement are hereby incorporated herein by
reference, and all provisions of the Loan Agreement granting the Secured Party
rights, privileges, or remedies are likewise also incorporated herein by
reference.
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3.8 The Debtor shall not sell, offer to sell, lease, or otherwise
transfer or dispose of the Collateral or any part thereof or any interest
therein, except as permitted under the Loan Agreement.
3.9 The Debtor shall execute and deliver to the Secured Party such
instruments and shall do all such things from time to time hereafter as the
Secured Party may reasonably request to carry into effect the provisions and
intent of this Agreement, to protect and perfect the Secured Party's security
interest in and to the Collateral, and to comply with all applicable statutes
and laws, and to facilitate the collection and/or enforcement of Receivables
Collateral. Contemporaneous with the execution of this Agreement, the Debtor
shall execute all such instruments as may be reasonably required by the Secured
Party with respect to the perfection of the security interests granted herein,
including without limitation, financing statements in such form and to be filed
in accordance with the provisions of the Uniform Commercial Code in such State
or States as the Secured Party may determine, and applications for notations of
the Secured Party as lien holder, mortgagee, or the like, on such certificates
or similar instruments as may have been issued with respect to the Debtor's
ownership of one or more items of the Collateral. A carbon, photographic, or
other reproduction of this Agreement or of any financing statement or other
instrument executed pursuant to this Section shall be sufficient for filing to
perfect the security interests granted herein.
3.10 The Debtor shall:
(a) keep the Collateral in good order and repair;
(b) not waste or destroy or suffer the waste or
destruction of the Collateral of any part thereof; and
(c) not use any of the Collateral in violation of any
policy of insurance thereon.
3.11 The Debtor shall not indirectly do or cause to be done any act
which, if done directly by the Debtor, would breach any covenant contained
herein or in any other agreement between the Debtor and the Secured Party.
3.12 The within representations, covenants, and warranties are in
addition to any others, previously, presently, or hereafter made by the Debtor
to or with the Secured Party in any other instrument.
Article IV. Collection of Accounts, Accounts Receivable, Contract Rights
and Other Collateral.
4.1 At any time after one or more Events of Default (as defined
in the Loan Agreement) has occurred:
(a) The Secured Party may notify any of the Debtor's
account or contract debtors, either in the name of the Secured Party or the
Debtor, to make payment
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directly to the Secured Party or such other address as may be specified
by the Secured Party, and may advise any person of the Secured Party's
security interest in and to the Collateral, and may collect directly
from the obligors thereon, all amounts due on account of the
Collateral; and
(b) At the Secured Party's request, the Debtor will provide
written notifications to any or all of the Debtor's account or contract
debtors concerning the Secured Party's security interest in the
Collateral and will request that such account or contract debtors
forward payment thereof directly to the Secured Party.
4.2 At any time after one or more Events of Default (as defined in the
Loan Agreement) has occurred, and after notification to the Debtor from the
Secured Party, the Debtor:
(a) shall hold any proceeds and collections of any of the
Collateral in trust for Secured Party, and shall not commingle such
proceeds or collections with any other funds of the Debtor; and
(b) shall deliver each of the following duly endorsed,
assigned or otherwise made payable to the Secured Party; (i) all such
proceeds to the Secured Party immediately upon the receipt thereof by
the Debtor in the identical form received, and (ii) all security or
collateral for, guaranties of, letters of credit, trade and bankers'
acceptances, and similar letters and instruments in respect of any of
the Collateral.
4.3 The Debtor hereby irrevocably constitutes and appoints the Secured
Party as the Debtor's true and lawful attorney, upon the occurrence of an Event
of Default (as defined in the Loan Agreement), with full power of substitution,
to convert the Collateral into cash at the sole risk, cost, and expense of the
Debtor, but for the sole benefit of the Secured Party. The rights and powers
granted the Secured Party by the within appointment include but are not limited
to the right and power to:
(a) prosecute, defend, compromise, or release any action relating to the
Collateral;
(b) sign change of address forms to change the address to
which the Debtor's mail is to be sent as the Secured Party shall
designate; receive and open the Debtor's mail; remove any Collateral
therefrom and turn over such mail (other than such Collateral), either
to the Debtor, or to any trustee in bankruptcy, receiver, assignee for
the benefit of creditors of the Debtor, or other legal representative
of the Debtor whom the Secured Party determines to be the appropriate
person to whom to so turn over such mail;
(c) endorse the name of the Debtor in favor of the Secured
Party upon any and all checks, drafts, notes, acceptances, or other
items or instruments; sign and endorse the name of the Debtor on, and
receive as secured party, any of the Collateral, any invoices,
schedules of Collateral, freight or express receipts, or bills of
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lading, storage receipts, warehouse receipts, or other documents of
title of a same or different nature relating to the Collateral;
(d) sign the name of the Debtor on any notice to the Debtor's
Account Debtors or verification of the Receivables Collateral; sign the
Debtor's name on any proof of claim in bankruptcy against Account
Debtors, notices of lien, claims of mechanics liens, or assignments or
releases of mechanics' lien securing the Accounts;
(e) take all such action as may be necessary to obtain
the payment of any letter of credit of which the Debtor is a
beneficiary;
(f) repair, manufacture, assemble, complete, package, deliver,
alter or supply goods, if any, necessary to fulfill in whole or in part
the purchase order of any customer of the Debtor;
(g) use, license, or transfer any or all General
Intangibles of the Debtor or;
(h) sign and file or record any financing or other statement
in order to perfect or protect the Secured Party's security interest in
the Collateral.
4.4 In connection with all powers of attorney included in this
Agreement, the Debtor hereby grants unto the Secured Party full power to do any
and all things necessary or appropriate, in connection with the exercise of such
powers as fully and effectually as the Debtor might or could do, and hereby
ratifying all that said attorney shall do or cause to be done by virtue of this
Agreement.
4.5 The Secured Party shall not be obligated to do any of the acts or
to exercise any of the powers authorized herein, but if the Secured Party elects
to do any such act or to exercise any such powers, it shall not be accountable
for more than it actually receives as a result of such exercise of power, and
shall not be responsible to the Debtor except for the Secured Party's actual
willful misconduct and bad faith.
4.6 All powers conferred upon the Secured Party by this Agreement,
being coupled with an interest, shall be irrevocable until this Agreement is
terminated by a written instrument executed by a duly authorized officer of the
Secured Party or until all Liabilities are paid in full.
Article V. Events of Default.
Upon the occurrence of any one or more Events of Default (as defined in
the Loan Agreement), any and all Liabilities of the Debtor to the Secured Party
shall become immediately due and payable, as provided in the Loan Agreement. The
occurrence of any such Event of Default shall also constitute, without notice or
demand, a default under all other agreements between the Secured Party and the
Debtor and instruments, documents, and papers given to the Secured Party by the
Debtor, whether such agreements, instruments, or papers now exist or hereafter
arise.
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Article VI. Rights And Remedies Upon Default.
In addition to all of the rights, remedies, powers, privileges, and
discretions which the Secured Party is provided prior to the occurrence of an
Event of Default (as defined in the Loan Agreement), the Secured Party shall
have the following Rights and Remedies ("Rights and Remedies") upon the
occurrence of any Event of Default.
6.1 Upon the occurrence of any Event of Default (as defined in the Loan
Agreement), and at any time thereafter, the Secured Party shall have all of the
Rights and Remedies of a secured party upon default under the UCC, in addition
to which the Secured Party shall have all of the following Rights and Remedies:
(a) To collect the Receivables Collateral with or without
the taking of possession of any of the Collateral; and/or
(b) To take possession of all or any portion of the
Collateral; and/or
(c) To sell, lease, or otherwise dispose of any or all of the
Collateral, in its then condition or following such preparation or
processing as the Secured Party deems advisable and with or without the
taking of possession of any of the Collateral.
(d) To apply the Receivables Collateral or the proceeds
of the Collateral towards (but not necessarily in complete
satisfaction of) the Liabilities.
6.2 Any sale or other disposition of the Collateral may be at public or
private sale upon such terms and in such manner as the Secured Party deems
advisable, having due regard to compliance with any statute or regulation which
might affect, limit, or apply to the Secured Party's disposition of the
Collateral. The Secured Party may conduct any such sale or other disposition of
the Collateral upon the Debtor's premises. Unless the Collateral is perishable
or threatens to decline speedily in value, or is of a type customarily sold on a
recognized market (in which event the Secured Party shall provide the Debtor
with such notice as may be practicable under the circumstances), the Secured
Party shall give the Debtor at least the greater of the minimum notice required
by law or seven (7) days prior written notice of the date, time, and place of
any proposed public sale, and of the date after which any private sale or other
disposition of the Collateral may be made. The Secured Party may purchase the
Collateral, or any portion of it at any sale held under this Article.
6.3 In connection with the Secured Party's exercise of the Secured
Party's rights under this Article, the Secured Party may enter upon, occupy, and
use any premises owned or occupied by the Debtor, and may exclude the Debtor
from such premises or portion thereof as may have been so entered upon,
occupied, or used by the Secured Party, subject in any such case to the
requirements of applicable law and to the rights of third parties. The Secured
Party shall not be required to remove any of the Collateral from any such
premises upon the Secured Party's taking possession thereof, and may render any
Collateral unusable to the Debtor. In no event shall the Secured Party be liable
to the Debtor for use of occupancy by the Secured Party of any premises pursuant
to this Article, nor for any charge
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(such as wages for the Debtor's employees and utilities) incurred in connection
with the Secured Party's exercise of the Secured Party's Rights and Remedies.
6.4 The Debtor hereby grants to the Secured Party a nonexclusive
irrevocable license to use, apply, and affix any trademark, tradename, logo, or
the like in which the Debtor now or hereafter has rights, such license being
with respect to the Secured Party's exercise of the rights hereunder including,
without limitation, in connection with any completion of the manufacture of
Inventory or sale or other disposition of Inventory.
6.5 Upon the occurrence of any Event of Default (as defined in the Loan
Agreement), the Secured Party may require the Debtor to assemble the Collateral
and make it available to the Secured Party at the Debtor's sole risk and expense
at a place or places which are reasonably convenient to both the Secured Party
and the Debtor.
6.6 The rights, remedies, powers, privileges, and discretions of the
Secured Party hereunder (the "Secured Party's Rights and Remedies") shall be
cumulative and not exclusive of any rights or remedies which it would otherwise
have. No delay or omission by the Secured Party in exercising or enforcing any
of the Secured Party's Right and Remedies shall operate as, or constitute, a
waiver thereof. No waiver by the Secured Party of any Event of Default or of any
default under any other agreement shall operate as a waiver of any other default
hereunder or under any other agreement. No single or partial exercise of any of
the Secured Party's Rights or Remedies, and no other agreement shall operate as
a waiver of any other default hereunder or under any other agreement or
transaction, of whatever nature entered into between the Secured Party and the
Debtor at any time, either express or implied, shall preclude any other or
further exercise of the Secured Party's Rights and Remedies. No waiver by the
Secured Party of any of the Secured Party's Rights or Remedies on any one
occasion shall be deemed a waiver on any subsequent occasion, nor shall it be
deemed a continuing waiver. All of the Secured Party's Right and Remedies and
all of the Secured Party's rights, remedies, powers, privileges, and discretions
under any other agreement or transaction are cumulative, and not alternative or
exclusive, and may be exercised by the Secured Party at such time or times and
in such order of preference as the Secured Party in its sole discretion may
determine.
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Article VII. General.
7.1 Any and all deposits or other sums at any time credited by or due
to the Debtor from the Secured Party or any of its Secured Partying or lending
affiliates or any bank acting as a participant under any loan arrangement
between the Secured Party and the Debtor, and any cash, securities, instruments,
or other property of the Debtor in the possession of the Secured Party, or any
of its banking or lending affiliates, and any bank acting as a participant under
any loan arrangement between the Secured Party and the Debtor, whether for
safekeeping, or otherwise, or in transit to or from the Secured Party or any of
its banking or lending affiliates or any such participant, or in the possession
of any third party acting on the Secured Party's behalf (regardless of the
reason the Secured Party had received same or whether the Secured Party has
conditionally released the same) shall at all times constitute security for any
and all Liabilities, and may be applied or set off against such Liabilities at
any time after an Event of Default (as defined in the Loan Agreement).
7.2 (a) The Debtor WAIVES notice of non-payment, demand, presentment,
protest, and all forms of demand and notice, both with respect to the
Liabilities and the Collateral.
(b) The Debtor, if entitled to it, WAIVES the right to notice
and/or hearing prior to the exercise of the Secured Party's rights upon
default.
7.3 The Secured Party shall have no duty as to the collection or
protection of the Collateral beyond the safe custody of such of the Collateral
as may come in possession of the Secured Party and shall have no duty as to the
preservation of rights against prior parties or any other rights pertaining
thereto. The Secured Party's Rights and Remedies may be exercised without resort
or regard to any other source of satisfaction of the Liabilities.
7.4 All notices and other correspondence to the Debtor by the Secured
Party in connection with this Agreement shall be deemed effective upon mailing
to the Debtor's address found at the beginning of this Agreement, which address
may be changed on seven (7) days written notice given the Secured Party by the
Debtor. All notices and other correspondence to the Secured Party by the Debtor
in connection with this Agreement shall be to the Secured Party's principal
office, or as the Secured Party may otherwise specify from time to time, and
shall be sent by certified mail, return receipt requested.
7.5 This Agreement shall be binding upon the Debtor and the Debtor's
successors, and assigns and shall inure to the benefit of the Secured Party and
the Secured Party's successors and assigns. In the event that the Secured Party
assigns or transfers its rights under this Agreement, the assignee shall
thereupon succeed to and become vested with all rights, powers, privileges, and
duties of the Secured Party hereunder and the Secured Party shall thereupon be
discharged and relieved from its duties and obligations hereunder.
7.6 Any determination that any provision of this Agreement or any
application thereof is invalid, illegal, or unenforceable in any respect in any
instance shall not affect the validity, legality, and enforceability of such
provision in any other instance, or the validity, legality, or enforceability of
any other provision of this Agreement.
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7.7 This Agreement and all other instruments executed in connection
herewith incorporates all discussions and negotiations between the Debtor and
the Secured Party, either express or implied, concerning the matters included
herein and in such other instruments, any custom or usage to the contrary
notwithstanding. No such discussions or negotiations shall limit, modify, or
otherwise affect the provisions hereof. No modification, amendment, or waiver of
any provision of this Agreement or of any provision of any other agreement
between the Debtor and the Secured Party is effective unless executed in writing
by the party to be charged with such modification, amendment and waiver, and if
such party be the Secured Party, then by a duly authorized officer thereof.
7.8 The proceeds of any collection, sale, or disposition of the
Collateral, or of any other payments received hereunder, shall be applied toward
the Liabilities in such order and manner as the Secured Party determines in its
sole discretion, any statute, custom, or usage to the contrary notwithstanding.
The Debtor shall remain liable to the Secured Party for any deficiency remaining
following such application.
7.9 The Debtor shall pay on demand all Costs of Collection and all
expenses of the Secured Party in connection with the preparation, execution, and
delivery of this Agreement and of any other documents and agreements between the
Debtor and the Secured Party, whether now existing or hereafter arising, and all
other expenses which may be incurred by the Secured Party in preparing or
amending this Agreement and all other agreements, instruments, and documents
related thereto, or otherwise with respect to the Liabilities. The Debtor
authorizes the Secured Party to pay all such expenses and to charge the same to
any account of the Debtor with the Secured Party.
7.10 All amounts which the Secured Party may advance under this
Agreement shall be included in the Liabilities, shall be repayable to the
Secured Party with interest at the highest pre-default rate charged the Debtor
by the Secured Party under the Loan Agreement, on demand (and if not paid within
five (5) days of notice to Debtor, at the default rate set forth in the Working
Capital Notes, as defined in the Loan Agreement), and may be charged by the
Secured Party to any account which the Debtor maintains with the Secured Party.
7.11 This Agreement and all other instruments, documents, and papers
which relate thereto which have been or may be hereinafter furnished the Secured
Party may be reproduced by the Secured Party by any photographic, photostatic,
microfilm, micro-card, miniature photographic, xerographic, or similar process,
and the Secured Party may destroy the original from which any document was so
reproduced. Any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding (whether or not the
original is in existence and whether or not such reproduction was made in the
regular course of business).
7.12 This Agreement and all rights and obligations hereunder, including
matters of construction, validity and performance, shall be governed by the laws
of The Commonwealth of Massachusetts. The Debtor submits itself to the
jurisdiction of the Courts of said Commonwealth for all purposes with respect to
this Agreement and the Debtor's relationship with the Secured Party.
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7.13 The Debtor shall indemnify, defend, and hold each of the Secured
Party and the Banks harmless of and from any claim brought or threatened against
the Secured Party or any of the Banks by the Debtor, any guarantor or endorser
of the Liabilities, or any other person (as well as from attorneys' reasonable
fees and expenses in connection therewith) on account of the Secured Party's or
any of the Banks' relationship with the Debtor or any other guarantor or
endorser of the Liabilities (each of which may be defended, compromised,
settled, or pursued by the Secured Party, for the benefit of the Banks, with
counsel of the Secured Party's selection, but at the expense of the Debtor).
Notwithstanding any other provision of this Agreement, the within
indemnification shall survive payment of the Liabilities and/or any termination,
release, or discharge executed by the Secured Party or any of the Banks in favor
of the Debtor.
7.14 This Agreement shall remain in full force and effect until
specifically terminated in writing by a duly authorized officer of the Secured
Party, or (subject to Section 7.13) until all Liabilities are paid in full.
7.15 The failure by the Debtor to perform all and singular the Debtor's
obligations hereunder will result in irreparable harm to the Secured Party for
which the Secured Party will have no adequate remedy at law. Consequently, such
obligations are specifically enforceable by the Secured Party.
7.16 It is intended that:
(a) this Agreement take effect as a sealed instrument;
(b) the security interests created by this Agreement attach to
all of the Debtor's assets now owned or hereafter acquired which are
capable of being subject to a security interest;
(c) the security interests created by this agreement
secure all Liabilities of the Debtor to the Secured Party, whether
now existing or hereafter arising;
(d) all costs and expenses incurred by the Secured Party
in connection with the Secured Party's relationship(s) with the
Debtor shall be borne by the Debtor;
(e) the Secured Party's consent to any action of the Debtor
which is prohibited unless such consent is given may be given or
refused by the Secured Party in its sole discretion; and
(f) the Secured Party's Rights and Remedies provided
herein are subject to requirements of applicable law.
7.17 The Debtor acknowledges having received a copy of the within
Agreement.
7.18 Any provision contained herein to the contrary notwithstanding:
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(i) subject to the subsection (iii) below, the Collateral
hereunder shall not include any contract, agreement or instrument to
the extent that the assignment contemplated hereunder would require the
consent or approval of any third party, or would adversely affect the
enforceability of any such contract, agreement or instrument or the
requirement that the Debtor be paid, repaid or reimbursed in the event
of termination of such contract, agreement or instrument or would
constitute a breach or default under any such contract, agreement or
instrument, unless and until such consent or approval has been
obtained;
(ii) subject to subsection (iii) below, the Collateral
hereunder shall not include any liquor license or any other license the
assignment of which would require the consent or approval of any
governmental authority or agency or other third party unless and until
such consent or approval has been obtained; and
(iii) unless an Event of Default has occurred and the
Liabilities of the Debtor have been accelerated pursuant to Section 8.2
of the Loan Agreement, the Debtor shall not be required to obtain or
seek to obtain any consent or approval referred to above.
To the extent that any of the Collateral is further assigned to the
Secured Party pursuant to a collateral assignment or other instrument delivered
by the Debtor to the Secured Party, then in the event of any inconsistency with
respect to matters relating to such Collateral between the provisions of such
assignment or instrument and the provisions of this Agreement, the provisions of
such Assignment or instrument shall control.
IN WITNESS WHEREOF, the undersigned have executed this Agreement under
seal on the date first written above.
DEBTOR:
WITNESS: [NAME]
By:
Name Name:
Title:
Its duly authorized officer
SECURED PARTY:
WITNESS: USTRUST, as Lender and Agent
By:
Name Michael D. O'Neill, Vice President
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EXHIBIT A
Trade Names: legal status; etc. (ss.3-3)
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EXHIBIT B
Other Encumbrances and Liens (ss.3-4)
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EXHIBIT C
Locations (ss.3-5)
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EXHIBIT F
FORM OF
FIRST AMENDED AND RESTATED
ASSIGNMENT OF RECEIVABLES AND PROCEEDS
(for [Unlimited Guarantor])
This FIRST AMENDED AND RESTATED ASSIGNMENT OF RECEIVABLES AND PROCEEDS
(the "Assignment") is entered into as of this __ day of ______, 1996, by and
between (a) _________________________, a ____________________, with its
principal place of business at __________________________________ (together with
its successors and assigns, the "Assignor"), and (b) USTRUST, a Massachusetts
trust company (hereinafter referred to as "USTrust" when acting for itself), as
Lender and Agent (hereinafter referred to as the "Assignee" when acting as Agent
for the Banks (as defined below)) for each of (i) USTrust, (ii) The Sumitomo
Bank, Limited ("Sumitomo"), (iii) State Street Bank and Trust Company ("SSB"),
(iv) Bank of Boston Connecticut ("BBC"), (v) Mellon Bank, N.A. ("Mellon") and
(vi) The Bank of New York ("BNY") (USTrust, Sumitomo, SSB, BBC, Mellon and BNY,
together with their successors and assigns, are hereinafter referred to
collectively as the "Banks").
All capitalized terms not defined herein but defined in the Loan
Agreement shall have the meanings ascribed to them in the Loan Agreement. As
used herein, the term "Loan Agreement" means that certain Third Amended and
Restated Loan Agreement, dated of even date herewith, by and among Fine Host
Corporation, a Delaware corporation ("Fine Host Corporation"), certain
Subsidiaries of Fine Host Corporation, the Banks and the Assignee, as the same
may be hereafter further amended, modified, supplemented, extended or restated
from time to time.
WITNESSETH:
WHEREAS, in connection with the Existing Loan Agreement (as defined in
the Loan Agreement), the Assignor entered into the following:
(a) a certain Unlimited Guaranty, dated ___________, 199_,
from the Assignor, as subsequently amended and reaffirmed from time to
time (as so amended and reaffirmed, the "Existing Unlimited Guaranty"),
pursuant to which, among other things, the Assignor guaranteed all of
the obligations and liabilities of Fine Host Corporation to USTrust,
Sumitomo, NBD Bank and SSB (hereinafter sometimes referred to
collectively as the "Existing Banks");
(b) a certain Security Agreement, dated as of ___________,
199_, by and between the Assignor and the Assignee, as subsequently
amended from time to time (as so amended, the "Existing Security
Agreement"), pursuant to which, among other thing, the Assignor granted
to the Assignee a security interest in the assets of the Assignor to
secure all of the obligations and liabilities of the Assignor to the
Banks; and
<PAGE>
(c) a certain Assignment of Receivables and Proceeds, dated as
of _______, 199_, by and between the Assignor and the Assignee, as
subsequently amended from time to time (as so amended, the "Existing
Assignment of Receivables and Proceeds"), pursuant to which, among
other things, the Assignor has assigned to the Assignee as additional
security all of its rights, title and interests in certain proceeds and
receivables resulting from certain agreements, contracts, permits,
licenses and other arrangements to which the Assignor is or may become
a party; and
WHEREAS, Fine Host Corporation and each of its Subsidiaries (including
without limitation, the Assignor) have requested that the Banks enter into the
Loan Agreement in order to amend, restate and replace in its entirety the
Existing Loan Agreement; and
WHEREAS, as a condition precedent to entering into the Loan Agreement
and making the Loans thereunder, the Banks have requested, among other things,
that the Assignor enter into the following:
(a) a certain First Amended and Restated Unlimited Guaranty,
dated of even date herewith, from the Assignor, in favor of the Banks,
which amends, restates and replaces in its entirety the Existing
Unlimited Guaranty (as the same may be hereafter further amended,
modified, substituted, restated or reaffirmed, from time to time, the
"Unlimited Guaranty");
(b) a certain First Amended and Restated Security Agreement,
dated of even date herewith, by and between the Assignor and the
Assignee, which amends, restates and replaces in its entirety the
Existing Security Agreement (as the same may be hereafter further
amended, modified, substituted, or restated, from time to time, the
"Security Agreement"); and
(c) this Assignment in order to amend, restate and replace
in its entirety the Existing Assignment of Receivables and Proceeds; and
WHEREAS, in response to the foregoing request of the Banks, the
Assignor agrees to enter into, effective as of the date hereof, the Unlimited
Guaranty, the Security Agreement and this Assignment;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Assignor and the Assignee, for
the ratable benefit of the Banks, hereby amend, restate and replace the Existing
Assignment of Receivables and Proceeds to read in its entirety as follows:
1. To secure the prompt, punctual, and faithful performance by the
Assignor of all of its Liabilities (as defined in the Loan Agreement), including
without limitation, all of the obligations and liabilities of the Assignor to
the Banks under the Unlimited Guaranty, the Assignor hereby grants, assigns and
transfers to the Assignee, for the ratable benefit of the
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<PAGE>
Banks, and creates in the Assignee, for the ratable benefit of the Banks, a
security interest in all of the rights, title, and interests of the Assignor in,
to and under the following:
1.1 all proceeds, including but not limited to, Net Contract
Proceeds, as defined in the Loan Documents)(collectively, the
"Proceeds") resulting from all agreements, contracts, and permits,
licenses, and other arrangements to which the Assignor is currently or
hereafter becomes a party, and pursuant to which, among other things,
the Assignor has agreed (a) to provide food and beverage services at
certain facilities described therein, (b) to operate and otherwise use
food, beverage and liquor licenses at such facilities, or (c) to manage
certain concession and food service areas at such facilities (including
but not limited to, the Facility Agreements, (as defined in the Loan
Documents)), and all related agreements, contracts, and permits,
licenses, and other arrangements (collectively, the "Agreements"),
including but not limited to the Agreements listed and described on
Schedule A attached hereto, which Schedule A includes all of the
material Agreements as of the date of this Assignment, all as the same
may hereafter be modified, amended, reaffirmed, restated, or extended;
and
1.2 all of those certain promissory notes listed on Schedule B
attached hereto and incorporated herein by reference, all as the same
may hereafter be modified, amended, reaffirmed, restated, or extended
and any rights under any Agreement, or promissory notes, bonds, letters
of credit, other agreements and arrangements executed hereafter, in
each case, including but not limited to, the rights of the Assignor to
receive payment in connection or associated with Assignor incurring
Project Costs (as defined in the Loan Agreement) pursuant to a Facility
Agreement, (collectively, the "Receivables" and individually a
"Receivable"),
subject to Section 5 below, as security only, to have and to hold unto the
Assignee, its successors and assigns, to its and their own use and benefit,
until such time as the Loans (and all other obligations of the Assignor to the
Assignee) shall have been paid and performed in full.
2. The Assignor shall deliver to the Assignee contemporaneously
herewith the originals of all promissory notes which evidence any Receivables,
and each such promissory note shall be endorsed by a duly authorized officer or
agent of the Assignor, in favor of the Assignee, with full recourse.
3. The Assignor hereby appoints the Assignee as its agent and attorney
with full power of substitution in its name and on its behalf, upon the
occurrence of an Event of Default, to sign, seal, indorse, complete indorsement,
execute and deliver, all such further instruments of transfer and agreements,
supplemental, confirmatory or otherwise, as may be required for the purpose of
more effectively vesting in the Assignee all of the rights, title, and interests
of the Assignor in, to and under the Receivables; such power of attorney, being
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<PAGE>
coupled with an interest, shall not be revoked for any reason until all
obligations under the Loan Agreement shall have been paid and performed in full.
4. The Assignor hereby represents, warrants, covenants and agrees
at all times during the term of this Assignment as follows:
a. That the Assignor will perform and observe faithfully
and punctually all obligations, terms, covenants, and conditions set forth in
the Loan Documents;
b. That, as of the date hereof, the amount listed on Schedule
C as "Principal Outstanding," "Interest Accrued," and "Total" for each
Receivable is correct, and there are no offsets or claims by any payor
or indorser under any Receivable which would affect such amounts or the
enforceability of any of the Receivables against any payor, indorser,
or guarantor;
c. That the Assignor is the sole owner of and has not
and will not sell,assign, transfer, mortgage, encumber or pledge all
or any portion of its interest in any of the Proceeds or the
Receivables to any person or entity other than the Assignee;
d. That the Assignor will not cancel, amend, alter, modify,
renew, extend, renegotiate, or terminate any of the Receivables or
Agreements without the prior written consent of the Assignee, so as to
materially and adversely affect the Proceeds; provided, however, that,
prior to the occurrence of a default under any of the Loan Documents,
the Assignor may, without such consent, make or agree to any amendment
or modification that the Assignor reasonably believes is in the best
interest of the Assignor and does not materially affect its ability to
make payments required to be made to the Assignee under the Loan
Documents;
e. That the Assignor will take no action associated with the
cancellation, modification, amendment, alteration, renewal, extension,
renegotiation, or termination of any other contract or renegotiation,
or termination of any other contract or agreement of any nature which
would, directly or indirectly, affect the payment terms, amount due, or
enforceability of any Receivables or the Proceeds; provided, however,
that, prior to the occurrence of a default under any of the Loan
Documents, the Assignor may, without such consent, make or agree to any
amendment or modification that the Assignor reasonably believes is in
the best interest of the Assignor and does not materially affect its
ability to make payments required to be made to the Assignee under the
Loan Documents;
f. That neither the Assignor nor, to the knowledge of the
Assignor, any other party is in default under or in violation of any of
the terms, covenants, or conditions of any other contract or agreement
of any nature which would, directly or indirectly, materially affect
the payment terms, amount due, or enforceability of any Receivable or
the Proceeds;
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<PAGE>
g. That the Assignor will promptly upon written request by the
Assignee, execute and deliver and cause to be executed and delivered
all such instruments of pledge or assignment, and such other
instruments or documents as the Assignee may reasonably request at any
time for the purpose of securing or otherwise affecting its rights
hereunder; and
h. That the Assignor, upon the occurrence of a Default or an
Event of Default under the Loan Documents, shall use its best efforts
to promptly cooperate with the Assignee's requests and directions
relating to collection of the Receivables or the Proceeds.
5. Except as provided herein with respect to the Financed Receivables
(as defined below), so long as no "Event of Default" or "Default" (as defined in
the Loan Documents, subject to any applicable grace periods contained therein)
shall exist, the Assignor shall have the right to exercise all rights and shall
be entitled to receive all payments under the Receivables.
6. Notwithstanding the foregoing Section 5 or anything else herein to
the contrary, the Assignor hereby unconditionally and absolutely assigns to the
Assignee (and not as security only), for the ratable benefit of the Banks, all
of the Assignor's rights, title and interests as payee to receive payment of all
partial or full prepayments, whenever made, of any and all of the Financed
Receivables (collectively, the "Financed Receivables" and individually a
"Financed Receivable"), which Financed Receivables are listed on Schedule C
attached hereto and incorporated herein by reference (provided, however, that
any amounts received from a Financed Receivable related to the Guidance Loans
shall be paid to the Assignee only up to the full unpaid amount of such Guidance
Loans, and promptly distributed, pro rata, to the Banks, to be applied to the
unpaid amount of such Guidance Loans), such assignment being a present
assignment and not an assignment for security only. Any such prepayments
received by Assignor, whether directly or indirectly (including, without
limitation, offsets against amounts owed by Assignor to such payor under any
other contract or agreement), shall be held in trust by Assignor for Assignee,
and shall be paid immediately to Assignee, without any requirement for Assignee
to make demand therefor. It is the intent of Assignor and Assignee that this is
a present, unconditional assignment for value, and is not intended as a
conditional assignment for security or otherwise.
7. Notwithstanding the foregoing Section 5 or anything else herein to
the contrary, the Assignor hereby unconditionally and absolutely assigns to
Assignee (and not as security only), for the ratable benefit of the Banks, the
right to receive payment of all Net Contract Proceeds (as defined in the Loan
Agreement), whenever made by any person, to the extent required by Section 6.16
of the Loan Agreement, such assignment being a present assignment and not an
assignment for security only; provided, however, that the amount so assigned
shall be applied as provided in said Section 6.16 of the Loan Agreement, unless
a default has occurred under any of the Loan Documents. Any such payments
received by Assignor, whether directly or indirectly (including, without
limitation, offsets against amounts
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<PAGE>
owed by Assignor to such person under any other contract or agreement), shall be
held in trust for Assignee, and shall be paid immediately to Assignee, without
any requirement for Assignee to make demand therefor. It is the intent of
Assignor and Assignee that, except as set forth above in this Section, this is a
present, unconditional assignment, for value, and is not intended as a
conditional assignment for security or otherwise.
8. Immediately upon the occurrence of any Event of Default hereunder or
under the Loan Documents, Assignor shall be deemed to hold in trust for Assignee
any payments received by Assignor, whether directly or indirectly (including,
without limitation, offsets against amounts owed by Assignor to such payor under
any other contract or agreement), under any Receivable, and all such amounts
received by Assignor shall be paid immediately to Assignee, without any
requirement for Assignee to make demand therefor. In addition, and also
immediately upon the occurrence of any Event of Default hereunder or under the
Loan Documents, the Assignee may, at its option, exercisable at any time and
from time to time, without in any way waiving such Event of Default, either in
person or by agent, with or without bringing any action or proceeding, exercise
and enforce any and all rights as holder of the Receivables, including, without
limitation, the right to complete the indorsement. In addition to and not in
limitation of the foregoing, the Assignee shall have all the rights and remedies
of a secured party under the Uniform Commercial Code, as adopted in the
Commonwealth of Massachusetts in Massachusetts General Laws, Chapter 106,
Section 1-101, et seq. ("UCC") with respect to the Notes Receivable. Whenever
notice is required to be given of any public or private sale, such notice shall
be deemed to be reasonable if given at least seven (7) days prior to the date
any public sale shall be held.
9. The Assignee shall not be liable for any loss, claim, damage,
liability or expense which may be sustained or incurred in connection with any
actions or failure to act by the Assignee hereunder, except losses resulting
solely from the gross negligence or willful misconduct of the Assignee. The
Assignor does hereby indemnify, save and hold the Assignee harmless from and
against any and all liability, loss, claim, damage and expense which may be
incurred under or in connection with the Receivables, or otherwise caused by the
negligence or willful misconduct of the Assignor, its agents, officers,
directors, or employees, including, without limitation, any actions taken or
omitted to be taken by the Assignee, except losses resulting solely from the
gross negligence or willful misconduct of the Assignee. The amount of any such
liability, loss, claim, damage or expense indemnified against shall be deemed to
include reasonable attorneys' fees and other costs of defense, and shall be
secured hereby and by the Loan Documents and be payable by the Assignor to the
Assignee immediately upon demand, or, at the option of the Assignee, the
Assignee may reimburse itself therefor from any moneys collected by the Assignee
hereunder, under the Receivables, the Proceeds, or under any of the Loan
Documents. The Assignee shall be required to exercise the same standard of care
in dealing with, storing, and safeguarding the Receivables as the Assignee
exercises with similar documents under which Assignee is the payee, and Assignor
hereby waives any claims or rights of action against Assignee with respect
thereto (except with respect to such standard of care), it being further agreed
that Assignee's liability with respect to any loss or destruction of any
Receivable shall (except in
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<PAGE>
the case of a breach of such standard of care) be limited to the Assignee
issuing a lost note affidavit with respect to such Receivable.
10. Failure of the Assignee to avail itself of any of the terms,
covenants and conditions of this Assignment or any act done or omitted to be
done pursuant to the Assignee's powers and rights granted hereunder shall not be
construed or deemed to be a waiver of its rights and remedies hereunder or under
any of the Loan Documents. The rights and remedies of the Assignee under this
Assignment are cumulative and are not in lieu of but are in addition to any
other rights and remedies which the Assignee shall have under or by virtue of
any of the Loan Documents. The rights and remedies of the Assignee under this
Assignment may be exercised from time to time, as often as their exercise is
deemed expedient by the Assignee and either prior to, simultaneously with or
subsequent to any other action taken by the Assignee, if any, under any of the
Loan Documents. The Assignee may release any party or apply any other security
held by it to the satisfaction of the obligations hereunder and under any of the
Loan Documents without prejudice to any of its rights under this Assignment.
11. The Assignor hereby agrees to execute and deliver to the Assignee
all such further instruments and documents as from time to time during the term
of this Assignment the Assignee may reasonably require or deem appropriate in
order to more adequately secure the rights hereunder, including but not limited
to, UCC financing statements. The Assignee may file with the appropriate
governmental bodies, as a financing statement, a carbon, photographic or other
reproduction of this Assignment.
12. If any term or provision of this Assignment or the application
thereof to any person or circumstance shall, to any extent, be invalid or
unenforceable, the remainder of this Assignment or the application of such term
or provision of this Assignment to persons and circumstances other than those as
to which it is held invalid or unenforceable, shall not be affected thereby, and
each such term and provision of this Assignment shall be valid and enforced to
the fullest extent permitted by law.
13. Any notice, demand, request or other communication given hereunder
or in connection herewith shall be in writing and shall be in writing and shall
be either delivered by hand or mailed by certified mail, return receipt
requested, addressed to the party to receive such notice at the following
address:
If to the Assignor:
[Name]
[Address]
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<PAGE>
With a copy to:
Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, NY 10022
Attention: Cornelius T. Finnegan III, Esq.
To the Assignee:
USTrust
30 Court Street
Boston, MA 02108
Attention: Michael D. O'Neill, Vice President
With a copy to:
Peabody & Arnold
50 Rowes Wharf
Boston, MA 02110
Attention: Anil Khosla, Esq.
All such notices and communications, when mailed or hand delivered as
set forth above, shall be effective upon receipt if hand delivered or three (3)
days after deposit in the U.S. mails if sent by certified mail. Either party may
change such address by giving notice in the like fashion to the other party.
14. No change, amendment, modification, cancellation or discharge
hereof or any part hereof shall be valid unless the Assignor and the Assignee
shall have consented thereto in writing. The Assignor and Assignee may, from
time to time, amend any of the Schedules hereto by an amendment referring to
this Assignment and substituting or adding to such Schedule. To the extent that
any provision in this Assignment is inconsistent with any provision of the Loan
Documents, then the Assignor shall be bound by the more restrictive provision,
except in the case of Section 16 hereof. To the extent possible, however, the
provisions of this Assignment and the Loan Documents shall be interpreted to
complement and supplement each other and the absence of any provision or portion
thereof in one such document shall not be deemed to be inconsistent with the
other such documents which contains such provision or portion thereof.
15. The terms, covenants, and conditions contained herein shall inure
to the benefit of, and bind the Assignor and the Assignee and their respective
successors and assigns. This Assignment shall be construed and enforced in
accordance with and governed by the laws of the Commonwealth of Massachusetts.
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<PAGE>
16. (a) Any provision contained herein to the contrary notwithstanding,
if the execution, delivery or performance of this Assignment requires the
consent or approval of any third party, or adversely affects the enforceability
of any Receivable or the requirement that Assignor be paid, repaid, or
reimbursed in the event of termination of an Agreement, according to its terms,
or constitutes a breach or default under an Agreement, and such consent or
approval has not yet been obtained, then the provisions of this Assignment shall
be deemed to be ineffective and the delivery hereof by the Assignor to the
Assignee shall be made in escrow until such necessary consent or approval has
been obtained, at which time all terms and conditions hereof shall be and shall
be deemed to be in full force and effect, and Assignee agrees, in such event and
with respect to any such Receivable or Agreement which could give rise to
Proceeds, that the Assignor shall have no obligation to procure any such consent
or approval prior to an Event of Default under the Loan Documents and an
acceleration of the Loans. The limitations of this paragraph shall not apply to
the extent any Receivable or any Agreement allows the assignment for security
purposes.
(b) Any provision contained herein to the contrary
(i) subject to subsection (ii) below, the Agreements
shall not include any liquor license or any other license the
assignment of which would require the consent or approval of
any governmental authority or agency or other third party
unless and until such consent or approval has been obtained;
and
(ii) unless an Event of Default has occurred and the
Liabilities have been accelerated pursuant to Section 8.2 of
the Loan Agreement, the Assignor shall not be required to
obtain or seek to obtain any consent or approval referred to
above.
[THE REMAINDER OF THIS PAGE IS LEFT INTENTIONALLY BLANK]
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Assignment as
an instrument under seal on the date and year first written above.
ASSIGNOR:
[Name]
By: _________________________________
Name:
Title:
Its duly authorized officer
ASSIGNEE:
USTRUST, as Lender and Agent
By: _________________________________
Michael D. O'Neill, Vice President
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<PAGE>
Schedule A
List of Contracts and Agreements
- 11 -
<PAGE>
Schedule B
List of Receivables
- 12 -
<PAGE>
Schedule C
List of Financed Receivables
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EXHIBIT G
FORM OF
FIRST AMENDED AND RESTATED
LIMITED GUARANTY OF
FINE HOST CORPORATION
-------------------------------------------------
For good and valuable consideration, the receipt and sufficiency of
which are acknowledged, the undersigned (jointly and severally if more than one)
unconditionally guaranties, in accordance with the terms hereof and without any
prior written notice, the payment and performance of all of the Labilities (as
defined herein) of Fine Host Corporation, a Delaware corporation, with its
principal place of business at 3 Greenwich Office Park, Greenwich, CT 06831 (the
"Borrower"), to the Bank (hereinafter the "Bank"). As used herein, the term
"Bank" means each of and all of the following entities, together with their
respective successors and assigns: USTrust, the Sumitomo Bank, Limited, State
Street Bank and Trust Company, Bank of Boston Connecticut, Mellon and, N.A. and
The Bank of New York. Notwithstanding any other provision of this Instrument to
the contrary, all of the Liabilities (as defined below) of the undersigned are
limited to the extent provided in Exhibit A attached hereto and incorporated
herein by reference.
The liability of the undersigned hereunder is limited to the aggregate of
(a) the lesser of (i) the Liabilities (as hereinafter defined) or (ii)plus (b)
interest as hereinafter provided, plus (c) all Reimbursable Expenses (as
hereinafter defined).
"Liability" and "Liabilities" include, without limitation, and any and
all liabilities, debts, and obligations of the Borrower to the Bank and any and
all liabilities, debts, and obligations of every endorser, guarantor, and surety
of the Borrower to the Bank, each of every kind, nature, and description, now
existing or hereafter arising. "Liabilities" also includes, without limitation,
each obligation to repay all loans, advances, indebtedness, notes, obligations,
overdrafts, and amounts now or hereafter at any time owing by the Borrower to
the Bank (including all future advances or the like whether or not given
pursuant to a commitment by the Bank), whether or not any of such are
liquidated, unliquidated, primary, secondary, secured, unsecured, direct,
indirect, absolute, contingent, or of any other type, nature, or description, or
by reason of any cause of action which the Bank may hold against the Borrower.
"Liabilities" also includes, without limitation, all notes and other obligations
of the Borrower now or hereafter assigned to or held by the Bank, each of every
kind, nature and description. "Liabilities" also includes, without limitation,
all interest and other amounts which may be charged to the Borrower and/or which
may be due from the Borrower to the Bank from time to time; all fees and charges
in connection with any account maintained by the Borrower with the Bank or any
service rendered by the Bank; and all costs and expenses incurred or paid by the
Bank in respect of any agreement between the Borrower and the Bank or instrument
furnished by the Borrower to the Bank (including, without limitation, Costs of
Collection, attorneys' reasonable fees, and all court and litigation costs and
expenses). "Liabilities" also includes, without limitation, any and all
obligations of the Borrower to act or to refrain from acting in accordance with
the terms, provisions, and covenants of any agreement between the Borrower and
the Bank or instrument furnished by the Borrower to the Bank. As used herein,
the term "indirect" includes without limitation, all obligations and liabilities
which the Bank may incur or become liable for, on account of, or as a result of
any transactions between the Bank and the Borrower including, without
limitation, any which may arise out of any Letter of Credit or acceptance, or
similar instrument issued or obligation incurred by the Bank for the account of
the Borrower; any which may arise out of any action brought or threatened
against the Bank by the Borrower, any guarantor or endorser of the Liabilities
of the Borrower, or by any other person in connection with the Liabilities; and
any obligation of the Borrower which may arise as endorser or guarantor of any
third party, or as obligor to any third party which obligation has been
endorsed, participated, or assigned to the Bank. The term "indirect" also refers
to any direct or contingent liability of the Borrower to make payment towards
any obligation held by the Bank (including, without limitation, on account of
any industrial revenue bond) to the extent so held by the Bank. The Bank's books
and records shall be prima facie evidence of the Borrower's indebtedness to the
Bank.
<PAGE>
"Costs of Collection" includes, without limitation, all attorneys'
reasonable fees, and out-of-pocket expenses incurred by the Bank's attorneys,
and all costs incurred by the Bank in the administration of the Liabilities,
this Guaranty, and all other instruments and agreements executed in connection
with or relating to the Liabilities including, without limitation, costs and
expenses associated with travel on behalf of the Bank. Costs of Collection also
includes, without limitation, all attorneys' reasonable fees, out-of-pocket
expenses incurred by the Bank's attorneys, and all costs and expenses incurred
by the Bank, including, without limitation, costs and expenses associated with
travel on behalf of the Bank, which costs and expenses are directly or
indirectly related to or in respect of the Bank's efforts to preserve, protect,
collect, or enforce the Liabilities and/or the Bank's Rights and Remedies or any
of the Bank's rights and remedies against or in respect of the Borrower, any
other guarantor or other person liable in respect of the Liabilities or any
collateral granted to the Bank by the Borrower, such guarantor, or other person
(whether or not suit is instituted in connection with such efforts). The Costs
of Collection shall be added to the Liabilities of the Borrower to the Bank, as
if such had been lent, advanced, and credited by the Bank to, or for the benefit
of, the Borrower.
For said good and valuable consideration, the undersigned also shall
indemnify, defend, and hold the Bank harmless of and from any claim brought or
threatened against the Bank by the Borrower, the undersigned, any other
guarantor or endorser of the Liabilities or any other person (as well as form
attorneys' reasonable fees and expenses in connection therewith) on account of
the Bank's relationship with the Borrower, the undersigned, or any other
guarantor or endorser of the Liabilities (each of which pay be defended,
compromised, settled, or pursued by the Bank with counsel of the Bank's
selection, but at the expense of the undersigned) provided that the foregoing
obligations of the undersigned shall not apply in respect of matters
attributable to the gross negligence or willful misconduct of the Bank.
The undersigned will pay on demand interest on all amounts due to the
Bank under this Guaranty, or arising under any documents, instruments, or
agreements relative to any collateral securing this Guaranty at a rate equal to
the highest rate chargeable to the Borrower after the earlier of (i) demand or
(ii) the occurrence of any event of default.
The obligations of the undersigned hereunder shall not be affected by
any fraudulent, illegal, or improper act by the Borrower, nor by any release,
discharge, or invalidation, by operation of law or otherwise, of the
Liabilities, or by the legal incapacity of the Borrower, the undersigned, or any
other person liable or obligated to the Bank for or on the Liabilities, Interest
and Costs of Collection shall continue to accrue and shall continue to be deemed
Liabilities guarantied hereby notwithstanding any stay to the enforcement
thereof against the Borrower or disallowance of any claim therefor against the
Borrower.
The within instrument incorporates all discussions and negotiations
between the undersigned and the Bank concerning the guaranty and indemnification
provided by the undersigned hereby. No such discussions or negotiations shall
limit, modify or otherwise affect the provisions hereof. No provision hereof may
be altered, amended, waived, canceled or modified except by written instrument
executed, sealed and acknowledged by a duly authorized officer of the Bank and,
except in the case of a waiver, by the undersigned.
The undersigned waives presentment, demand, notice and protest with
respect to the liabilities Guaranty and further waives any delay on the part of
the Bank, and further waives any right to acquire the Bank to pursue or to
proceed against the borrower or any collateral which the Bank might have been
granted to secure the Liabilities or to secure the Liabilities or to secure the
obligations of the undersigned hereunder and further waives notice of acceptance
of this guaranty.
The books and records of the Bank showing the account between the Bank
and the Borrower shall be admissible in any action or proceeding constitute
prima facie evidence and proof of the items contained therein.
The obligations of the undersigned hereunder are primary. The
undersigned assents to any indulgence or waiver which the Bank may grant or give
the Borrower and/or any other person liable or obligated to the Bank for or on
the Liabilities, without notice to, or consent from, the undersigned. No
compromise, settlement or release by the Bank of the Liabilities or of the
obligations of any such other person (whether or not jointly liable with the
<PAGE>
undersigned) and no release of any collateral securing the Liabilities or
securing the obligations of any such other person shall affect the obligations
of the undersigned hereunder. No action by the Bank which has been assented to
herein shall affect the obligations of the undersigned to the Bank hereunder.
The undersigned will pay on demand all attorneys' reasonable fees,
out-of-pocket expenses incurred by the Bank's attorneys, and all costs incurred
by the Bank, in the administration of the Liabilities, this Guaranty and all
other instruments, documents, and agreements executed in connection with or
relating to the Liabilities, including, without limitation, costs and expenses
associated with travel on behalf of the Bank. The undersigned will also pay on
demand, without limitation, all attorneys' reasonable fees, out-of-pocket
expenses incurred by the Bank's attorneys and all costs incurred by the Bank,
including, without limitation, costs and expenses associated with travel on
behalf of the Bank, which costs and expenses are directly or indirectly related
to or in respect of the Bank's efforts to collect and/or to enforce any of the
obligations of the undersigned hereunder and/or to enforce any of the Bank's
rights, remedies, or powers against or in respect of the undersigned (whether or
not suit is instituted by or against the Bank) (herein, the foregoing being
referred to as the "Reimbursable Expenses").
This instrument shall inure to the benefit of the Bank, its successors
and assigns, shall be binding upon the heirs, successors, representatives, and
assigns of the undersigned (limited, however, in the case of heirs, successors
and assigns of the undersigned, to their interest in the Collateral, the
Receivables, the Financed Receivables, the Proceeds and the Net Proceeds) and
shall apply to all Liabilities of the Borrower and any successor to the
Borrower, including any successor by operation of law.
the rights, remedies, powers, privileges, and discretions of the bank
hereunder (hereinafter, the "Bank's Rights and Remedies) shall be cumulative and
not exclusive of any rights or remedies which it would otherwise have. No delay
or omission by the Bank in exercising or enforcing any of the Bank's Rights and
Remedies shall operate as, or constitute, a waiver thereof. No waiver by the
Bank of any of the bank's Rights and Remedies or of any default or remedies
under any other agreement with the undersigned, or of any default under any
agreement with the Borrower, or any other person liable or obligated for or on
the Liabilities, shall operate as a waiver of any other of the Bank's Rights and
Remedies or of any default or remedy hereunder or thereunder. No exercise of any
of the Bank's Rights and Remedies and no other agreement or transaction of
whatever nature entered into between the Bank and the undersigned, the Bank and
the Borrower, and/or the Bank and any such other person at any time shall
preclude any other exercise of the bank's Rights and Remedies. No waiver by the
Bank of any of the Bank's Rights and Remedies on any one occasion shall be
deemed a waiver on any subsequent occasion, nor shall it be deemed a continuing
waiver. All of the Bank's Rights and Remedies and all of the Bank's rights,
remedies, powers, privileges, and discretions under any other agreement or
transaction with the undersigned, the Borrower, or any such other person shall
be cumulative and not alternative or exclusive, and may be exercised by the Bank
at such time or times and in such order of preference as the Bank in its sole
discretion may determine.
This instrument and all documents which have been or may be hereinafter
furnished by the undersigned to the Bank may be reproduced by the Bank by any
photographic, photostatic, microfilm, microcard, miniature photographic,
xerographic, or similar process, and the Bank may destroy the original from
which such document was so reproduced. Any such reproduction shall be admissible
in evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not such
reproduction was made in the regular bourse of business).
This instrument shall be governed, construed, and interpreted in
accordance with the laws of The Commonwealth of Massachusetts. The undersigned
submits to the jurisdiction of the courts of The Commonwealth of Massachusetts
for all matters in connection herewith.
Any determination that any provision herein is invalid, illegal, nor
unenforceable in any respect in any instance shall not affect the validity,
legality or enforceability of such provision in any other instance and shall not
affect the validity, legality, or enforceability of any other provision
contained herein.
The obligations of the undersigned hereunder shall remain in full force
and effect and as to all Liabilities, without regard to any reduction of the
Liabilities thereof other than by the undersigned pursuant to this Guaranty,
<PAGE>
until the earlier of (a) ten (10) days following the actual receipt by the Bank
as its main office (presently 30/40 Court St., Boston, MA 02108) of written
notice signed by the undersigned of the termination thereof, or (b) the delivery
of written notice of termination dated and signed by a duly authorized officer
of the Bank, which notice of termination includes specific reference to this
provision. No termination hereof shall affect any Liability in existence of
outstanding ten (10) days following the date of such actual receipt or delivery
(including, without limitation, those which are contingent or not then due and
those which arise out of any check, draft, item, or paper which was made,
executed, or drawn prior to the expiration of such ten (10) days, even if
received by the Bank thereafter) nor any obligation of the undersigned
hereunder, including, without limitation, any which by its terms includes any of
the Liabilities of a contingent nature (including, without limitation, the
indemnification provided for herein).
The undersigned certifies that the undersigned read this Guaranty prior
to its execution.
It is intended that this Guaranty take effect as a sealed instrument as of this
day
of , 1996.
GUARANTOR:
.
By:
Name:
Title:
Its duly authorized officer
<PAGE>
FORM OF.
FIRST AMENDED AND RESTATED LIMITED GUARNTY
OF
[NAME OF LIMITED GUARANTOR]
EXHIBIT A
1. Loan Agreement. This Limited Guaranty is subject to all of the terms
and provisions contained in the Loan Agreement. As used herein, the term "Loan
Agreement" means that certain Third Amended and Restated Loan Agreement, dated
of even date herewith, by and among Fine Host Corporation, a Delaware
corporation (the "Borrower"), certain Subsidiaries of the Borrower, USTrust
(hereinafter referred to as "USTrust" when acting for itself), as Lender and
Agent thereunder (hereinafter referred to as the "Agent" when acting as Agent
for the Banks (as defined below)), The Sumitomo Bank Limited ("Sumitomo"), State
Street Bank and Trust Company ("SSB"), Bank of Boston Connecticut ("BBC"),
Mellon Bank N.A. ("Mellon") and The Bank of New York ("BOY ') (USTrust,
Sumitomo, SSB, BBC, Mellon and BNY, together with their successors and assigns,
are hereinafter sometimes referred to collectively as the "Banks" and singly as
a "Bank"), as the same may be hereafter further amended, modified, supplemented,
extended or restated, from time to time. All capitalized terms not defined
herein but defined in-the Loan Agreement shall have the meanings ascribed to
them in the Loan Agreement.
2. Consideration. The Borrower is the present owner and holder of
Percent :(degree)/0) of all of the joint venture interests of the Undersigned,
and under the provisions of the Loan Agreement, the Undersigned is, by
definition, a Subsidiary of the Borrower. In order to induce the Banks to
continue to extend the Loans, all to or for the benefit of the Borrower and each
of its Subsidiaries (including without limitation, the Undersigned), the Banks
have requested, and the Undersigned has agreed to enter into, among other
things, this Limited Guaranty.
3. Security. All of the obligations and liabilities of the Undersigned
under this Limited Guaranty are secured by the following (collectively, the
"Security Documents"):
(a) a certain First Amended and Restated Security Agreement (as the
same may be hereafter further amended, modified, supplemented, extended or
restated from time to time, the "Security Agreement"), dated of even date
herewith, by and between the Undersigned and the Agent, pursuant to which, among
other thing, the Undersigned has granted to the Agent a security interest in the
assets of the Undersigned, as more particularly described therein, and
(b) a certain First Amended and Restated Assignment of Receivables and
Proceeds (as the same may be hereafter further amended, modified, supplemented,
extended or restated from time to time, the "Assignment of Receivables and
Proceeds"), dated of even date herewith, by and between the Undersigned and the
Agent, pursuant to which, among other things, the Undersigned has assigned to
the Agent all of the rights, title and interests of the Undersigned in certain
proceeds and
<PAGE>
receivables resulting from certain agreements, contracts, permits, licenses and
other arrangements to which the Undersigned is or may become a party;
and may be further secured hereinafter, from time to time, by one or more other
security agreements, mortgages, pledges, assignments or other instruments,
documents or agreements.
4. Limitation on Liabilities. (a) Notwithstanding any term or provision
contained in this Limited Guaranty to the contrary (including, without
limitation, those relating to indemnification, costs and expenses), Bank's sole
recourse against the Undersigned under this Limited Guaranty and the Security
Documents for payment of the Liabilities and for all other payments due
hereunder or thereunder shall be against (i) the Collateral (as defined in the
Security Agreement), (ii) the Receivables (as defined in the Assignment of
Receivables and Proceeds), (iii) the Financed Receivables (as defined in the
Assignment of Receivables and Proceeds), (iv) the Proceeds (as defined in the
Assignment of Receivables and Proceeds), and (v) the Net Proceeds (as defined in
the Assignment of Receivables and Proceeds), and the Undersigned shall not be
liable for any unpaid Liability or for any such other amount to the extent that
the proceeds of the sale or other disposition of the Collateral, the
Receivables, Financed Receivables, the Proceeds and the Net Proceeds are
insufficient to pay such amounts; provided, however, that notwithstanding the
foregoing to the contrary, the Undersigned shall be liable in its individual
capacity to the Bank for any loss, expense, claim or damage suffered by the Bank
as a result of the breach by the Undersigned of any of its representations,
warranties or covenants contained herein, or in the Security Documents; provided
further, however, that notwithstanding the foregoing to the contrary, such
limitation on liability shall in no way be deemed to affect the Bank's rights or
interests in and to the Collateral, the Receivables, the Financed Receivables,
the Proceeds or the Net Proceeds, or any part thereof or any other rights or
remedies of the Bank under this Limited Guaranty or the Security Documents with
respect to the Collateral, the Receivables, the Financed Receivables, the
Proceeds and the Net Proceeds, or under any other document, agreement or
instrument securing this Limited Guaranty.
(b) Notwithstanding any term or provision contained in this Limited
Guaranty or in any of the other Loan Documents to the contrary (including,
without limitation, those relating to indemnification, costs and expenses), the
Bank's sole recourse under this Limited Guaranty and the Security Documents for
payment of the Liabilities and for all other payments due hereunder or
thereunder shall be against the assets of the Undersigned (being the joint
venture entity and referred to herein as the "Joint Venture") as and to the
extent provided in the preceding subsection (a), and the Bank shall have no
other recourse for any such payment against any of the joint venturers of the
Joint Venture (each a "Joint Venturer") or any of their assets, notwithstanding
that any Joint Venturer might otherwise be liable for obligations of the Joint
Venture under applicable law, the organizational documents of the Joint Venture
or otherwise; provided, however, that the foregoing provisions of this
subsection (a) shall in no way be deemed to affect (i) the Bank's rights or
interests in and to the Collateral, the Receivables, the Financed Receivables,
the Proceeds or the Net Proceeds, or any part thereof or any other rights or
remedies of the Bank under this Limited Guaranty or the Security Documents with
respect to the Collateral, the Receivables, the Financed Receivables, the
Proceeds and the Net Proceeds or
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<PAGE>
under any other document, agreement or instrument scouring this Limited Guaranty
or (ii) the liabilities and obligations of the Borrower under any of the Loan
Documents. In the event of any inconsistency between the provisions of this
subsection (a) and the provisions of any of the other Loan Documents (including,
without limitations, provisions relating to joint and several liability or
liability on the part of any Person comprising part of another Person), the
provisions of this subsection (a) shall control.
5. Event of Default. Bag any term or provision of this Limited Guaranty to
the contrary, the Bank shall not make any demand for payment by the Undersigned
of any Liability unless an Event of Default has occurred and is continuing.
6. Waiver of Claims of the Undersigned. Any claim, set-off or
recoupment against the Borrower to which the Undersigned may be or become
entitled (including without limitation, claims of reimbursement, subrogation or
for contribution or otherwise) by reason of any payment or performance by the
Undersigned in satisfaction and discharge, in whole or in part of the
Undersigned's obligations under this Limited Guaranty shall be and hereby are
irrevocably and forever waived by the Undersigned. The Undersigned will not
demand, sue for, or otherwise attempt to collect any such indebtedness, and any
amounts which are collected, enforced and received by the Undersigned shall be
held by the Undersigned as trustee for the Bank and shall be paid over to the
Bank on account of the Liabilities without affecting in any manner the liability
of the Undersigned under any other provision hereof.
7. Representations and Acknowledgements of the Undersigned. In order to
induce the Lender to enter into the documents evidencing certain of the
Liabilities, the Undersigned hereby represents and warrants that this Limited
Guaranty and all other agreements and instruments executed and delivered by the
Undersigned to the Banks in connection with this Limited Guaranty represent, and
are and will be, the valid and legally binding obligations of the Undersigned,
enforceable in accordance with their respective terms.
8. Notices. Any notice, demand, request or other communication given
hereunder or in connection herewith shall be in writing and shall be in writing
and shall be either delivered by hand or mailed by certified mail, return
receipt requested, addressed to the party to receive such notice at the
following address:
If to the Undersigned:
[Name]
[Address]
With a copy to:
Willie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
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<PAGE>
New York, NY 10022
Attention: Cornelius T. Finnegan III, Esq.
If to the Bank:
With a copy to:
Distrust
30 Court Street
Boston, MA 02108
Attention: Michael D. O'Neill, Vice President
Peabody & Arnold 50 Rowes Wharf Boston, MA 02110 Attention: Anil Khosla, Esq.
All such notices and communications, when mailed or hand delivered as
set forth above, shall be effective upon receipt if hand delivered or three (3)
days after deposit in the U.S. mails if sent by certified mail. Either party may
change such address by- giving notice in the like fashion to the other party.
9. Reinstatement. This Limited Guaranty shall continue to be effective,
or be reinstated, as the case may be, if at any time any amount received by the
Banks in respect of the Liabilities is rescinded or must otherwise be restored
or returned by the Banks upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Borrower or the Undersigned or upon the
appointment of an intervener or conservator of, or trustee or similar official
of the Borrower or the Undersigned or any substantial part of any of its
respective properties, or otherwise, all as though said payments had not been
made.
10. Swival of Limited Guaranty. This Limited Guaranty incorporates all
discussions and negotiations between the Undersigned and the Banks concerning
this Limited Guaranty. No such discussions or negotiations shall limit, modify
or otherwise affect the provisions hereof. No provision hereof may be altered,
amended, waived, cancelled or modified, except by a written instrument executed
and acknowledged by a duly authorized officer of the Bank and except in the case
of a waiver, by the Undersigned. This Limited Guaranty shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and assigns (limited, however, in the case of successors and assigns
ofthe Undersigned, to its interest in the Collateral, the Receivables, the
Financed Receivables, the Proceeds and the Net Proceeds), including any
subsequent holder or holders of any liabilities, and the term "Bank" shall refer
to each of the following entities as well as all ofthe following entities:
USTrust, Sumitomo, SSB, BBC, Mellon and BNY, together with their successors and
assigns. If a court of competent jurisdiction shall hold any provision of this
Limited Guaranty to be invalid, illegal or unenforceable, the validity,
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<PAGE>
legality and enforceability of the remaining provisions shall not in any
way be affected or impaired Hereby.
11. Amendment and Restatement. This Limited Guaranty amends, restates
and replaces in its entirety a certain Limited Guaranty, dated as of August 24,
1995, from the Undersigned, in favor of the Banks, as subsequently reaffirmed
from time to time (as so reaffirmed, the "Original Limited Guaranty"). Upon the
execution and delivery of this Limited Guaranty, this Limited Guaranty shall
replace the Original Limited Guaranty, and all references to the Original
Limited Guaranty shall now and hereafter mean and refer to this Limited
Guaranty.
IN WITNESS WHEREOF, the Undersigned has executed this instrument under seal as
of the day of , 1996.
GUARANANTOR
By: Name: Title:
Its duly authorized officer
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<PAGE>
EXHIBIT H
FORM OF
FIRST AMENDED AND RESTATED SECURITY AGREEMENT
(for [Name of Limited Guarantor])
This FIRST AMENDED AND RESTATED SECURITY AGREEMENT (the "Agreement") is
entered into as of this __ day of June, 1996, by and between (a)
________________________________, a ______________ (together with its successors
and assigns, the "Debtor") which is organized pursuant to a certain Joint
Venture Agreement (the "Joint Venture Agreement"), dated _________, by and among
(i) Fine Host Corporation, a Delaware corporation ("Fine Host Corporation"),
(ii) _______________________________ and (iii) ___________________________, and
whose principal place of business is at
_________________________________________ and (b) USTRUST, a Massachusetts trust
company (hereinafter referred to as "USTrust" when acting for itself), as Lender
and Agent (hereinafter referred to as the "Secured Party" when acting as Agent
for the Banks (as defined below)) for each of (i) USTrust, (ii) The Sumitomo
Bank, Limited ("Sumitomo"), (iii) State Street Bank and Trust Company ("SSB"),
(iv) Bank of Boston Connecticut ("BBC"), (v) Mellon Bank, N.A. ("Mellon") and
(vi) The Bank of New York ("BNY") (USTrust, Sumitomo, SSB, BBC, Mellon and BNY,
together with their successors and assigns, are hereinafter referred to
collectively as the "Banks").
All capitalized terms not defined herein but defined in the Loan
Agreement shall have the meanings ascribed to them in the Loan Agreement. As
used herein, the term "Loan Agreement" means that certain Third Amended and
Restated Loan Agreement, dated of even date herewith, by and among Fine Host
Corporation, a Delaware corporation ("Fine Host Corporation"), certain
Subsidiaries of Fine Host Corporation, the Banks and the Secured Party, as the
same may be hereafter further amended, modified, supplemented, extended or
restated from time to time.
WITNESSETH:
WHEREAS, in connection with the Existing Loan Agreement (as defined in
the Loan Agreement), the Debtor entered into the following:
(a) a certain Limited Guaranty, dated as of ____________,
199_, from the Debtor, as subsequently amended and reaffirmed from time
to time (as so amended and reaffirmed, the "Existing Limited
Guaranty"), pursuant to which, among other things, the Debtor
guaranteed all of the obligations and liabilities of Fine Host
Corporation to USTrust, Sumitomo, NBD Bank and SSB (hereinafter
sometimes referred to collectively as the "Existing Banks"), subject to
certain limitations contained therein;
(b) a certain Security Agreement, dated as of___________,
199_, by and between the Debtor and the Secured Party, as subsequently
amended from time to time (as so amended, the "Existing Security
Agreement"), pursuant to which, among other thing, the Debtor granted
to the Secured Party a security interest in the assets of
<PAGE>
the Debtor, as more particularly described therein and herein, to secure
all of the obligations and liabilities of the Debtor to the Banks; and
(c) a certain Assignment of Receivables and Proceeds, dated as
of __________, 199_, by and between the Debtor and the Secured Party,
as subsequently amended from time to time (as so amended, the "Existing
Assignment of Receivables and Proceeds"), pursuant to which, among
other things, the Debtor has assigned to the Secured Party as
additional security all of its rights, title and interests in certain
proceeds and receivables resulting from certain agreements, contracts,
permits, licenses and other arrangements to which the Debtor is or may
become a party; and
WHEREAS, Fine Corporation and each of its Subsidiaries (including
without limitation, the Debtor) have requested that the Banks enter into the
Loan Agreement in order to amend, restate and replace in its entirety the
Existing Loan Agreement; and
WHEREAS, as a condition precedent to entering into the Loan Agreement
and making the Loans thereunder, the Banks have requested, among other things,
that the Debtor enter into the following:
(a) a certain First Amended and Restated Limited Guaranty,
dated of even date herewith, from the Debtor, in favor of the Banks,
which amends, restates and replaces in its entirety the Existing
Limited Guaranty (as the same may be hereafter further amended,
modified, substituted, restated or reaffirmed, from time to time, the
"Limited Guaranty");
(b) this Agreement in order to amend, restate and replace in its entirety
the Existing Security Agreement; and
(c) a certain First Amended and Restated Assignment of
Receivables and Proceeds, dated of even date herewith, by and between
the Debtor and the Secured Party, which amends, restates and replaces
in its entirety the Existing Assignment of Receivables and Proceeds (as
the same may be hereafter further amended, modified, substituted, or
restated, from time to time, the "Assignment of Receivables and
Proceeds"); and
WHEREAS, in response to the foregoing request of the Banks, the Debtor
agrees to enter into, effective as of the date hereof, the Limited Guaranty,
this Agreement and the Assignment of Receivables and Proceeds;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Debtor and the Secured Party,
for the ratable benefit of the Banks, hereby amend, restate and replace the
Existing Security Agreement to read in its entirety as follows:
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<PAGE>
Article I. Grant of Security Interest.
1.1 To secure the prompt, punctual, and faithful performance by the
Debtor of all of its Liabilities (as defined in the Loan Agreement), including
without limitation, all of the obligations and liabilities of the Debtor to the
Banks under the Limited Guaranty, the Debtor hereby grants to the Secured Party,
for the ratable benefit of the Banks, a continuing security interest in and to,
and assigns to the Secured Party, all of the rights, title and interests of the
Debtor in and to, the following, and each item thereof, whether now owned or now
due, or in which the Debtor has an interest, or hereafter at any time in the
future, acquired, arising, or to become due, or in which the Debtor obtains an
interest, and all products, proceeds, substitutions, and accessions of or to any
of the following (all of which, together with any other property in which the
Secured Party may in the future be granted a security interest pursuant hereto,
is referred to hereinafter as the "Collateral"): (a) All Accounts and Accounts
Receivable; (b) All Inventory; (c) All Contract Rights; (d) All General
Intangibles; (e) All Equipment; (f) All Farm Products; (g) All Goods; (h) All
Chattel Paper, Note Receivables and Receivables (including but not limited to,
all License Agreements, all Management Agreements, all Concession Agreements,
all Food Service Operation Agreements, and all Facilities Agreements); (i) All
Fixtures; (j) All books, records, and information relating to the Collateral
and/or to the operation of the Debtor's business, and all rights of access to
such books, records, and information, and all property in which such books,
records, and information are stored, recorded, and maintained, subject, in the
case of rights of access to premises not owned by the Debtor, to rights of third
parties; (k) All Instruments, Documents of Title, Documents, policies and
certificates of insurance, Securities, deposits, deposit accounts, money, cash,
or other property; (l) All federal, state, and local tax refunds and/or
abatements to which the Debtor is, or becomes entitled, no matter how or when
arising, including, but not limited to any loss carryback tax refunds; (m) All
insurance proceeds, refunds, and premium rebates, including, without limitation,
proceeds of fire and credit insurance, whether any of such proceeds, refunds,
and premium rebates, arise out of the foregoing (a through l), or otherwise; (n)
All liens, guaranties, rights, remedies, and privileges pertaining to any of the
foregoing (a through m) including the right of stoppage in transit; and (o) All
licenses and permits (including but not limited to, all liquor licenses).
1.2 The foregoing grant of a security interest is in addition to, and
supplemental of, any security interest previously granted by the Debtor to the
Secured Party and shall continue in full force and effect applicable to all
Liabilities and to any future advances made by the Secured Party to or on behalf
of the Debtor until this Agreement is specifically terminated in writing by a
duly authorized officer of the Secured Party.
1.3 "Proceeds" include, without limitation, "Proceeds" as defined in the
Uniform Commercial Code as adopted in Massachusetts (hereinafter, the "UCC") and
also, insurance
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<PAGE>
proceeds, and each type of property described in Sections 1-1(a) through and
including 1- 1(o).
Article II. Definitions.
As herein used, the following terms have the following meanings:
2.1 "Liabilities" has the meaning given to that term in the Loan Agreement.
2.2 "Costs of Collection" includes, without limitation, all attorneys'
reasonable fees, and out-of-pocket expenses incurred by the Secured Party's
attorneys, and all costs incurred by the Secured Party in the administration of
the Liabilities, this Agreement, and all other instruments and agreements
executed in connection with or relating to the Liabilities including, without
limitation, costs and expenses associated with travel on behalf of the Secured
Party. Costs of Collection also includes, without limitation, all attorneys'
reasonable fees, out-of-pocket expenses incurred by the Secured Party's
attorneys, and all costs and expenses incurred by the Secured Party, including,
without limitation, costs and expenses associated with travel on behalf of the
Secured Party, which costs and expenses are directly or indirectly related to or
in respect of the Secured Party's efforts to preserve, protect, collect, or
enforce the Collateral, the Liabilities and/or the Secured Party's Rights and
Remedies or any of the Secured Party's rights and remedies against or in respect
of any guarantor or other person liable in respect of the Liabilities (whether
or not suit is instituted in connection with such efforts). The Costs of
Collection shall be added to the Liabilities of the Debtor to the Secured Party,
as if such had been lent, advanced, and credited by the Secured Party to, or for
the benefit of, the Debtor.
2.3 "Accounts" and "Accounts Receivable" include, without limitation,
"accounts" as defined in the UCC, and also all accounts, accounts receivable,
notes, drafts, acceptances, and other forms of obligations and receivables and
rights to payment for credit extended and for goods sold or leased, or services
rendered, whether or not yet earned by performance; all Inventory which gave
rise thereto, and all rights associated with such Inventory, including the right
of stoppage in transit, all reclaimed, returned, rejected or repossessed
Inventory (if any) the sale of which gave rise to any Account.
2.4 "Inventory" includes, without limitation, "inventory" as defined in
the UCC and also all goods, wares, merchandise, raw materials, work in process,
finished goods, and all packaging, advertising, shipping material, and documents
related to any of the foregoing, and all labels, and other devices, names, or
marks affixed or to be affixed thereto for identifying or selling the same, and
other personal property of every description held for sale or lease or furnished
or to be furnished under a contract or contracts of sale or service by the
Debtor, or used or consumed or to be used or consumed in the Debtor's business,
and all goods of said description which are in transit, and all returned,
repossessed and rejected goods of said description, and all such goods of said
description which are detained from or rejected for entry into the United
States, and all documents (whether or not negotiable) which represent any of the
foregoing.
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2.5 "Contract Rights" includes, without limitation, "contract rights"
as now or formerly defined in the UCC and also any right to payment under a
contract not yet earned by performance and not evidenced by an instrument or
Chattel Paper.
2.6 "General Intangibles" includes, without limitation, "general
intangibles" as defined in the UCC; and also all: rights to payment for credit
extended; deposits; amounts due to the Debtor; credit memoranda in favor of the
Debtor; warranty claims; all means and vehicles of investment or hedging,
including, without limitation, options, warrants, and futures contracts;
records; customer lists; goodwill; causes of action; judgments; payments under
any settlement or other agreement; literary rights; rights to performance;
royalties; license fees; franchise fees; rights of admission; licenses;
franchises; permits; certificates of convenience and necessity, and similar
rights granted by any governmental authority; copyrights; trademarks, trade
names, service marks, patents, patent applications, patents pending, and other
intellectual property; developmental ideas and concepts; proprietary processes;
blueprints; drawings; designs; diagrams; plans; reports; charts; catalogs;
manuals; technical data; computer programs, computer records, computer software,
rights of access to computer record service bureaus, service bureau computer
contracts, and computer data; proposals; costs estimates, and other
reproductions on paper, or otherwise, of any and all concepts or ideas, and any
matter related to, or connected with, the design, development, manufacture,
sale, marketing, leasing, or use of any or all property produced, sold, or
leased, by the Debtor or credit extended or services performed, by the Debtor,
whether intended for an individual customer or the general business of the
Debtor, or used or useful in connection with research by the Debtor.
2.7 "Equipment" includes, without limitation, "equipment" as defined in
the UCC, and also all motor vehicles, rolling stock, machinery, office
equipment, plant equipment, tools, dies, molds, store fixtures, furniture, and
other goods, property, and assets which are used and/or were purchased for use
in the operation or furtherance of the Debtor's business.
2.8 "Farm Products", "Goods", "Chattel Paper", "Instruments", "Documents of
Title", "Documents", "Securities", "Fixtures" and "Account Debtors" each has the
same meaning respectively given that term in the UCC.
2.9 "Obligations" shall mean the obligations, covenants,
representations and warranties of Fine Host Corporation or any of the
Subsidiaries (including without limitation, the Debtor) of Fine Host Corporation
under the Loan Documents.
2.10 "Receivables Collateral" refers to that portion of the Collateral
which consists of the Debtor's Accounts, Accounts Receivable, Contract Rights,
General Intangibles, Chattel Paper, Instruments, Documents of Title, Documents,
Securities, letters of credit and bankers' acceptances, and any rights to
payment now held or in which the Debtor has an interest, or hereafter acquired,
or in which the Debtor obtains an interest.
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Article III. Representations, Warranties and Covenants.
3.1 Subject to the limitations set forth in Section 7.19 below, the
Debtor shall pay when due (or on demand if so payable) the Liabilities and
promptly, punctually, and faithfully shall perform the Obligations.
3.2 The execution and delivery of this Agreement and of any other
instruments or documents executed in connection herewith constitute
representations by the Debtor that such execution and delivery have received all
authorization as may be necessary to permit such execution and delivery to, and
that they do, bind the Debtor.
3.3 Exhibit A attached hereto and incorporated herein by reference
constitutes a listing of:
(i) all trade names and trade styles under which the Debtor presently
conducts or ever conducted their respective businesses; and
(ii) all legal names and legal statuses (such as a corporation
or partnership) under which the Debtor ever conducted business.
3.4 The Debtor is, and shall hereafter remain, the owner of the
Collateral free and clear of all liens, encumbrances, attachments, security
interests, purchase money security interests, mortgages, and charges with the
exceptions of (a) the security interest created herein, and (b) the security
interests and other encumbrances (if any) listed on Exhibit B attached hereto
and incorporated herein by reference or as otherwise permitted in the Loan
Agreement. The Debtor does not presently, and shall not hereafter have
possession of any property on consignment. The Debtor shall timely pay all of
the Debtor's encumbrances which are secured by security interests which may be
superior to that granted the Secured Party herein.
3.5 The Debtor's principal place of business, chief executive office
and mailing address is set forth at the beginning of this Agreement; set forth
on Exhibit C are the locations of all Debtor's other places of business or at
which the Collateral may be kept or located. Except to accomplish sales of
Inventory in the ordinary course of business and to utilize such of the
Collateral as is removed from such locations in the ordinary course of business
(such as motor vehicles), the Collateral will be kept at all times at the
Debtor's principal place of business and chief executive office as set forth at
the beginning of this Agreement or at the locations of the Debtor's other places
of business as set forth on Exhibit C. All the information contained in the
Exhibits to this Agreement is true, accurate and complete, and the Debtor hereby
agrees to furnish the Secured Party written notice within ten (10) days of any
changes therein, or any additional information necessary to insure that the
information contained in the Exhibits remains true, accurate and complete.
3.6 The Debtor shall provide the Secured Party with such information
concerning the Debtor, the Collateral, the operation of the Debtor's business,
and the Debtor's financial condition as the Secured Party may reasonably request
from time to time. All financial information so provided the Secured Party by
the Debtor shall be prepared in accordance
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<PAGE>
with generally accepted accounting principles applied consistently in the
preparation thereof and with prior periods and shall fairly reflect the matters
described therein.
3.7 The Debtor shall not sell, offer to sell, lease, or otherwise
transfer or dispose of the Collateral or any part thereof or any interest
therein, except as permitted under the Loan Agreement.
3.8 The Debtor shall execute and deliver to the Secured Party such
instruments and shall do all such things from time to time hereafter as the
Secured Party may reasonably request to carry into effect the provisions and
intent of this Agreement, to protect and perfect the Secured Party's security
interest in and to the Collateral, and to comply with all applicable statutes
and laws, and to facilitate the collection and/or enforcement of Receivables
Collateral. Contemporaneous with the execution of this Agreement, the Debtor
shall execute all such instruments as may be reasonably required by the Secured
Party with respect to the perfection of the security interests granted herein,
including without limitation, financing statements in such form and to be filed
in accordance with the provisions of the Uniform Commercial Code in such State
or States as the Secured Party may determine, and applications for notations of
the Secured Party as lien holder, mortgagee, or the like, on such certificates
or similar instruments as may have been issued with respect to the Debtor's
ownership of one or more items of the Collateral. A carbon, photographic, or
other reproduction of this Agreement or of any financing statement or other
instrument executed pursuant to this Section shall be sufficient for filing to
perfect the security interests granted herein.
3.9 The Debtor shall:
(a) keep the Collateral in good order and repair;
(b) not waste or destroy or suffer the waste or destruction of the
Collateral of any part thereof; and
(c) not use any of the Collateral in violation of any policy of insurance
thereon.
3.10 The Debtor shall not indirectly do or cause to be done any act
which, if done directly by the Debtor, would breach any covenant contained
herein or in any other agreement between the Debtor and the Secured Party.
3.11 The within representations, covenants, and warranties are in
addition to any others, previously, presently, or hereafter made by the Debtor
to or with the Secured Party in any other instrument.
Article IV. Collection of Accounts, Accounts Receivable, Contract Rights
and Other Collateral.
4.1 At any time after one or more Events of Default (as defined in the Loan
Agreement) has occurred:
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(a) The Secured Party may notify any of the Debtor's account
or contract debtors, either in the name of the Secured Party or the
Debtor, to make payment directly to the Secured Party or such other
address as may be specified by the Secured Party, and may advise any
person of the Secured Party's security interest in and to the
Collateral, and may collect directly from the obligors thereon, all
amounts due on account of the Collateral; and
(b) At the Secured Party's request, the Debtor will provide
written notifications to any or all of the Debtor's account or contract
debtors concerning the Secured Party's security interest in the
Collateral and will request that such account or contract debtors
forward payment thereof directly to the Secured Party.
4.2 At any time after one or more Events of Default (as defined in the
Loan Agreement) has occurred, and after notification to the Debtor from the
Secured Party, the Debtor:
(a) shall hold any proceeds and collections of any of the
Collateral in trust for Secured Party, and shall not commingle such
proceeds or collections with any other funds of the Debtor; and
(b) shall deliver each of the following duly endorsed,
assigned or otherwise made payable to the Secured Party; (i) all such
proceeds to the Secured Party immediately upon the receipt thereof by
the Debtor in the identical form received, and (ii) all security or
collateral for, guaranties of, letters of credit, trade and bankers'
acceptances, and similar letters and instruments in respect of any of
the Collateral.
4.3 The Debtor hereby irrevocably constitutes and appoints the Secured
Party as the Debtor's true and lawful attorney, upon the occurrence of an Event
of Default (as defined in the Loan Agreement), with full power of substitution,
to convert the Collateral into cash at the sole risk, cost, and expense of the
Debtor, but for the sole benefit of the Secured Party. The rights and powers
granted the Secured Party by the within appointment include but are not limited
to the right and power to:
(a) prosecute, defend, compromise, or release any action relating to the
Collateral;
(b) sign change of address forms to change the address to
which the Debtor's mail is to be sent as the Secured Party shall
designate; receive and open the Debtor's mail; remove any Collateral
therefrom and turn over such mail (other than such Collateral), either
to the Debtor, or to any trustee in bankruptcy, receiver, assignee for
the benefit of creditors of the Debtor, or other legal representative
of the Debtor whom the Secured Party determines to be the appropriate
person to whom to so turn over such mail;
(c) endorse the name of the Debtor in favor of the Secured
Party upon any and all checks, drafts, notes, acceptances, or other
items or instruments; sign and endorse the name of the Debtor on, and
receive as secured party, any of the
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<PAGE>
Collateral, any invoices, schedules of Collateral, freight or express
receipts, or bills of lading, storage receipts, warehouse receipts, or
other documents of title of a same or different nature relating to the
Collateral;
(d) sign the name of the Debtor on any notice to the Debtor's
Account Debtors or verification of the Receivables Collateral; sign the
Debtor's name on any proof of claim in bankruptcy against Account
Debtors, notices of lien, claims of mechanics liens, or assignments or
releases of mechanics' lien securing the Accounts;
(e) take all such action as may be necessary to obtain the payment of any
letter of credit of which the Debtor is a beneficiary;
(f) repair, manufacture, assemble, complete, package, deliver,
alter or supply goods, if any, necessary to fulfill in whole or in part
the purchase order of any customer of the Debtor;
(g) use, license, or transfer any or all General Intangibles of the Debtor;
or
(h) sign and file or record any financing or other statement
in order to perfect or protect the Secured Party's security interest in
the Collateral.
4.4 In connection with all powers of attorney included in this
Agreement, the Debtor hereby grants unto the Secured Party full power to do any
and all things necessary or appropriate, in connection with the exercise of such
powers as fully and effectually as the Debtor might or could do, and hereby
ratifying all that said attorney shall do or cause to be done by virtue of this
Agreement.
4.5 The Secured Party shall not be obligated to do any of the acts or
to exercise any of the powers authorized herein, but if the Secured Party elects
to do any such act or to exercise any such powers, it shall not be accountable
for more than it actually receives as a result of such exercise of power, and
shall not be responsible to the Debtor except for the Secured Party's actual
willful misconduct and bad faith.
4.6 All powers conferred upon the Secured Party by this Agreement,
being coupled with an interest, shall be irrevocable until this Agreement is
terminated by a written instrument executed by a duly authorized officer of the
Secured Party or until all Liabilities are paid in full.
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<PAGE>
Article V. Events of Default.
Upon the occurrence of any one or more Events of Default (as defined in
the Loan Agreement), any and all Liabilities of the Debtor to the Secured Party
shall become immediately due and payable, as provided in the Loan Agreement. The
occurrence of any such Event of Default shall also constitute, without notice or
demand, a default under all other agreements between the Secured Party and the
Debtor and instruments, documents, and papers given to the Secured Party by the
Debtor, whether such agreements, instruments, or papers now exist or hereafter
arise.
Article VI. Rights And Remedies Upon Default.
In addition to all of the rights, remedies, powers, privileges, and
discretions which the Secured Party is provided prior to the occurrence of an
Event of Default (as defined in the Loan Agreement), the Secured Party shall
have the following Rights and Remedies ("Rights and Remedies") upon the
occurrence of any Event of Default.
6.1 Upon the occurrence of any Event of Default (as defined in the Loan
Agreement), and at any time thereafter, the Secured Party shall have all of the
Rights and Remedies of a secured party upon default under the UCC, in addition
to which the Secured Party shall have all of the following Rights and Remedies:
(a) To collect the Receivables Collateral with or without the taking of
possession of any of the Collateral; and/or
(b) To take possession of all or any portion of the Collateral; and/or
(c) To sell, lease, or otherwise dispose of any or all of the
Collateral, in its then condition or following such preparation or
processing as the Secured Party deems advisable and with or without the
taking of possession of any of the Collateral.
(d) To apply the Receivables Collateral or the proceeds of the Collateral
towards (but not necessarily in complete satisfaction of) the Liabilities.
6.2 Any sale or other disposition of the Collateral may be at public or
private sale upon such terms and in such manner as the Secured Party deems
advisable, having due regard to compliance with any statute or regulation which
might affect, limit, or apply to the Secured Party's disposition of the
Collateral. The Secured Party may conduct any such sale or other disposition of
the Collateral upon the Debtor's premises. Unless the Collateral is perishable
or threatens to decline speedily in value, or is of a type customarily sold on a
recognized market (in which event the Secured Party shall provide the Debtor
with such notice as may be practicable under the circumstances), the Secured
Party shall give the Debtor at least the greater of the minimum notice required
by law or seven (7) days prior written notice of the date, time, and place of
any proposed public sale, and of the date after which any private sale or other
disposition of the Collateral may be made. The Secured Party may purchase the
Collateral, or any portion of it at any sale held under this Article.
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<PAGE>
6.3 In connection with the Secured Party's exercise of the Secured
Party's rights under this Article, the Secured Party may enter upon, occupy, and
use any premises owned or occupied by the Debtor, and may exclude the Debtor
from such premises or portion thereof as may have been so entered upon,
occupied, or used by the Secured Party, subject in any such case to the
requirements of applicable law and to the rights of third parties. The Secured
Party shall not be required to remove any of the Collateral from any such
premises upon the Secured Party's taking possession thereof, and may render any
Collateral unusable to the Debtor. In no event shall the Secured Party be liable
to the Debtor for use of occupancy by the Secured Party of any premises pursuant
to this Article, nor for any charge (such as wages for the Debtor's employees
and utilities) incurred in connection with the Secured Party's exercise of the
Secured Party's Rights and Remedies.
6.4 The Debtor hereby grants to the Secured Party a nonexclusive
irrevocable license to use, apply, and affix any trademark, tradename, logo, or
the like in which the Debtor now or hereafter has rights, such license being
with respect to the Secured Party's exercise of the rights hereunder including,
without limitation, in connection with any completion of the manufacture of
Inventory or sale or other disposition of Inventory.
6.5 Upon the occurrence of any Event of Default (as defined in the Loan
Agreement), the Secured Party may require the Debtor to assemble the Collateral
and make it available to the Secured Party at the Debtor's sole risk and expense
at a place or places which are reasonably convenient to both the Secured Party
and the Debtor.
6.6 The rights, remedies, powers, privileges, and discretions of the
Secured Party hereunder (the "Secured Party's Rights and Remedies") shall be
cumulative and not exclusive of any rights or remedies which it would otherwise
have. No delay or omission by the Secured Party in exercising or enforcing any
of the Secured Party's Right and Remedies shall operate as, or constitute, a
waiver thereof. No waiver by the Secured Party of any Event of Default or of any
default under any other agreement shall operate as a waiver of any other default
hereunder or under any other agreement. No single or partial exercise of any of
the Secured Party's Rights or Remedies, and no other agreement shall operate as
a waiver of any other default hereunder or under any other agreement or
transaction, of whatever nature entered into between the Secured Party and the
Debtor at any time, either express or implied, shall preclude any other or
further exercise of the Secured Party's Rights and Remedies. No waiver by the
Secured Party of any of the Secured Party's Rights or Remedies on any one
occasion shall be deemed a waiver on any subsequent occasion, nor shall it be
deemed a continuing waiver. All of the Secured Party's Right and Remedies and
all of the Secured Party's rights, remedies, powers, privileges, and discretions
under any other agreement or transaction are cumulative, and not alternative or
exclusive, and may be exercised by the Secured Party at such time or times and
in such order of preference as the Secured Party in its sole discretion may
determine.
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Article VII. General.
7.1 Any and all deposits or other sums at any time credited by or due
to the Debtor from the Secured Party or any of its Secured Partying or lending
affiliates or any bank acting as a participant under any loan arrangement
between the Secured Party and the Debtor, and any cash, securities, instruments,
or other property of the Debtor in the possession of the Secured Party, or any
of its banking or lending affiliates, and any bank acting as a participant under
any loan arrangement between the Secured Party and the Debtor, whether for
safekeeping, or otherwise, or in transit to or from the Secured Party or any of
its banking or lending affiliates or any such participant, or in the possession
of any third party acting on the Secured Party's behalf (regardless of the
reason the Secured Party had received same or whether the Secured Party has
conditionally released the same) shall at all times constitute security for any
and all Liabilities, and may be applied or set off against such Liabilities at
any time after an Event of Default (as defined in the Loan Agreement).
7.2 (a) The Debtor WAIVES notice of non-payment, demand, presentment,
protest, and all forms of demand and notice, both with respect to the
Liabilities and the Collateral.
(b) The Debtor, if entitled to it, WAIVES the right to notice
and/or hearing prior to the exercise of the Secured Party's rights upon
default.
7.3 The Secured Party shall have no duty as to the collection or
protection of the Collateral beyond the safe custody of such of the Collateral
as may come in possession of the Secured Party and shall have no duty as to the
preservation of rights against prior parties or any other rights pertaining
thereto. The Secured Party's Rights and Remedies may be exercised without resort
or regard to any other source of satisfaction of the Liabilities.
7.4 All notices and other correspondence to the Debtor by the Secured
Party in connection with this Agreement shall be deemed effective upon mailing
to the Debtor's address found at the beginning of this Agreement, which address
may be changed on seven (7) days written notice given the Secured Party by the
Debtor. All notices and other correspondence to the Secured Party by the Debtor
in connection with this Agreement shall be to the Secured Party's principal
office, or as the Secured Party may otherwise specify from time to time, and
shall be sent by certified mail, return receipt requested.
7.5 This Agreement shall be binding upon the Debtor and the Debtor's
successors, and assigns and shall inure to the benefit of the Secured Party and
the Secured Party's successors and assigns. In the event that the Secured Party
assigns or transfers its rights under this Agreement, the assignee shall
thereupon succeed to and become vested with all rights, powers, privileges, and
duties of the Secured Party hereunder and the Secured Party shall thereupon be
discharged and relieved from its duties and obligations hereunder.
7.6 Any determination that any provision of this Agreement or any
application thereof is invalid, illegal, or unenforceable in any respect in any
instance shall not affect the validity, legality, and enforceability of such
provision in any other instance, or the validity, legality, or enforceability of
any other provision of this Agreement.
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7.7 This Agreement and all other instruments executed in connection
herewith incorporates all discussions and negotiations between the Debtor and
the Secured Party, either express or implied, concerning the matters included
herein and in such other instruments, any custom or usage to the contrary
notwithstanding. No such discussions or negotiations shall limit, modify, or
otherwise affect the provisions hereof. No modification, amendment, or waiver of
any provision of this Agreement or of any provision of any other agreement
between the Debtor and the Secured Party is effective unless executed in writing
by the party to be charged with such modification, amendment and waiver, and if
such party be the Secured Party, then by a duly authorized officer thereof.
7.8 The proceeds of any collection, sale, or disposition of the
Collateral, or of any other payments received hereunder, shall be applied toward
the Liabilities in such order and manner as the Secured Party determines in its
sole discretion, any statute, custom, or usage to the contrary notwithstanding.
The Debtor shall remain liable to the Secured Party for any deficiency remaining
following such application.
7.9 The Debtor shall pay on demand all Costs of Collection and all
expenses of the Secured Party in connection with the preparation, execution, and
delivery of this Agreement and of any other documents and agreements between the
Debtor and the Secured Party, whether now existing or hereafter arising, and all
other expenses which may be incurred by the Secured Party in preparing or
amending this Agreement and all other agreements, instruments, and documents
related thereto, or otherwise with respect to the Liabilities. The Debtor
authorizes the Secured Party to pay all such expenses and to charge the same to
any account of the Debtor with the Secured Party.
7.10 All amounts which the Secured Party may advance under this
Agreement shall be included in the Liabilities, shall be repayable to the
Secured Party with interest at the highest pre-default rate charged the Debtor
by the Secured Party under the Loan Agreement, on demand (and if not paid within
five (5) days of notice to Debtor, at the default rate set forth in the Working
Capital Notes, as defined in the Loan Agreement), and may be charged by the
Secured Party to any account which the Debtor maintains with the Secured Party.
7.11 This Agreement and all other instruments, documents, and papers
which relate thereto which have been or may be hereinafter furnished the Secured
Party may be reproduced by the Secured Party by any photographic, photostatic,
microfilm, micro-card, miniature photographic, xerographic, or similar process,
and the Secured Party may destroy the original from which any document was so
reproduced. Any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding (whether or not the
original is in existence and whether or not such reproduction was made in the
regular course of business).
7.12 This Agreement and all rights and obligations hereunder, including
matters of construction, validity and performance, shall be governed by the laws
of The Commonwealth of Massachusetts. The Debtor submits itself to the
jurisdiction of the Courts of said Commonwealth for all purposes with respect to
this Agreement and the Debtor's relationship with the Secured Party.
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7.13 The Debtor shall indemnify, defend, and hold each of the Secured
Party and the Banks harmless of and from any claim brought or threatened against
the Secured Party or any of the Banks by the Debtor, any guarantor or endorser
of the Liabilities, or any other person (as well as from attorneys' reasonable
fees and expenses in connection therewith) on account of the Secured Party's or
any of the Banks' relationship with the Debtor or any other guarantor or
endorser of the Liabilities (each of which may be defended, compromised,
settled, or pursued by the Secured Party, for the benefit of the Banks, with
counsel of the Secured Party's selection, but at the expense of the Debtor).
Notwithstanding any other provision of this Agreement, the within
indemnification shall survive payment of the Liabilities and/or any termination,
release, or discharge executed by the Secured Party or any of the Banks in favor
of the Debtor.
7.14 This Agreement shall remain in full force and effect until
specifically terminated in writing by a duly authorized officer of the Secured
Party, or (subject to Section 7.13) until all Liabilities are paid in full.
7.15 The failure by the Debtor to perform all and singular the Debtor's
obligations hereunder will result in irreparable harm to the Secured Party for
which the Secured Party will have no adequate remedy at law. Consequently, such
obligations are specifically enforceable by the Secured Party.
7.16 It is intended that:
(a) this Agreement take effect as a sealed instrument;
(b) the security interests created by this Agreement attach to
all of the Debtor's assets now owned or hereafter acquired which are
capable of being subject to a security interest;
(c) the security interests created by this agreement secure all Liabilities
of the Debtor to the Secured Party, whether now existing or hereafter arising;
(d) all costs and expenses incurred by the Secured Party in connection with
the Secured Party's relationship(s) with the Debtor shall be borne by the
Debtor;
(e) the Secured Party's consent to any action of the Debtor which is
prohibited unless such consent is given may be given or refused by the Secured
Party in its sole discretion; and
(f) the Secured Party's Rights and Remedies provided herein are subject to
requirements of applicable law.
7.17 The Debtor acknowledges having received a copy of the within
Agreement.
7.18 Any provision contained herein to the contrary notwithstanding:
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(i) subject to subsection (iii) below, the Collateral
hereunder shall not include any contract, agreement or instrument to
the extent that the assignment contemplated hereunder would require the
consent or approval of any third party, or would adversely affect the
enforceability of any such contract, agreement or instrument or the
requirement that the Debtor be paid, repaid or reimbursed in the event
of termination of such contract, agreement or instrument or would
constitute a breach or default under any such contract, agreement or
instrument, unless and until such consent or approval has been
obtained;
(ii) subject to subsection (iii) below, the Collateral
hereunder shall not include any liquor license or any other license the
assignment of which would require the consent or approval of any
governmental authority or agency or other third party unless and until
such consent or approval has been obtained; and
(iii) unless an Event of Default has occurred and the
Liabilities of the Debtor have been accelerated pursuant to Section 8.2
of the Loan Agreement, the Debtor shall not be required to obtain or
seek to obtain any consent or approval referred to above.
To the extent that any of the Collateral is further assigned to the
Secured Party pursuant to a collateral assignment or other instrument delivered
by the Debtor to the Secured Party, then in the event of any inconsistency with
respect to matters relating to such Collateral between the provisions of such
assignment or instrument and the provisions of this Agreement, the provisions of
such Assignment or instrument shall control.
7.19 (a) Notwithstanding any other provision of this Agreement to the
contrary (including, without limitation, those relating to indemnification,
costs and expenses), the Secured Party's sole recourse against the Debtor under
this Agreement for payment of the Liabilities and for all other payments due
hereunder and under the Assignment of Receivables and Proceeds shall be against
(i) the Collateral, (ii) the Receivables (as defined in the Assignment of
Receivables and Proceeds), (iii) the Financed Receivables (as defined in the
Assignment of Receivables and Proceeds), (iv) the Proceeds (as defined in the
Assignment of Receivables and Proceeds), and (v) the Net Proceeds (as defined in
the Assignment of Receivables and Proceeds), and the Debtor shall not be liable
for any unpaid Liabilities or for any such other amount to the extent that the
proceeds of the sale or other disposition of the Collateral, the Receivables,
the Financed Receivables, the Proceeds and the Net Proceeds are insufficient to
pay such amounts; provided, however, that notwithstanding the foregoing to the
contrary, the Debtor shall be liable in its individual capacity to the Secured
Party for any loss, expense, claim or damage suffered by the Secured Party as a
result of the breach by the Debtor of any of its representations, warranties or
covenants contained herein, or in the Assignment of Receivables and Proceeds or
the Limited Guaranty; provided further, however, that notwithstanding the
foregoing to the contrary, such limitation on liability shall in no way be
deemed to affect the Secured Party's rights or interests in and to the
Collateral, the Receivables, the Financed Receivables, the Proceeds or the Net
Proceeds, or any part thereof or any other rights or remedies of the Secured
Party under this Agreement or the Assignment of Receivables and Proceeds with
respect to the Collateral, the Receivables, the
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Financed Receivables, the Proceeds and the Net Proceeds, or under any other
document, agreement or instrument securing the Limited Guaranty.
(b) Notwithstanding any term or provision contained herein or in any of
the other Loan Documents to the contrary (including, without limitation, those
relating to indemnification, costs and expenses), the Secured Party's sole
recourse hereunder and under the Assignment of Receivables and Proceeds for
payment of the Liabilities and for all other payments due hereunder or
thereunder shall be against the assets of the Debtor (being the joint venture
entity and referred to herein as the "Joint Venture") as and to the extent
provided in the preceding subsection (a), and the Secured Party shall have no
other recourse for any such payment against any of the joint venturers of the
Joint Venture (each a "Joint Venturer") or any of their assets, notwithstanding
that any Joint Venturer might otherwise be liable for obligations of the Joint
Venture under applicable law, the organizational documents of the Joint Venture
or otherwise; provided, however, that the foregoing provisions of this
subsection (b) shall in no way be deemed to affect (i) the Secured Party's
rights or interests in and to the Collateral, the Receivables, the Financed
Receivables, the Proceeds or the Net Proceeds, or any part thereof or any other
rights or remedies of the Secured Party hereunder or under the Assignment of
Receivables and Proceeds with respect to the Collateral, the Receivables, the
Financed Receivables, the Proceeds and the Net Proceeds or under any other
document, agreement or instrument securing the Limited Guaranty or (ii) the
liabilities and obligations of the Borrower under any of the Loan Documents. In
the event of any inconsistency between the provisions of this subsection (b) and
the provisions of any of the other Loan Documents (including, without
limitations, provisions relating to joint and several liability or liability on
the part of any Person comprising part of another Person), the provisions of
this subsection (b) shall control.
[THE REMAINDER OF THIS PAGE IS LEFT INTENTIONALLY BLANK]
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<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Agreement under
seal on the date first written above.
DEBTOR:
[NAME OF DEBTOR]
By: ______________________
Name:
Title:
Its duly authorized officer
SECURED PARTY:
USTRUST, as Lender and Agent
By:
Michael D. O'Neill, Vice President
- 17 -
<PAGE>
EXHIBIT A
Trade Names: legal status; etc. (ss.3-3)
- 18 -
<PAGE>
EXHIBIT B
Other Encumbrances and Liens (ss.3-4)
None
- 19 -
<PAGE>
EXHIBIT C
Locations (ss.3-5)
- 20 -
EXHIBIT I
FORM OF
FIRST AMENDED AND RESTATED
ASSIGNMENT OF RECEIVABLES AND PROCEEDS
(for [Name of Limited Guarantor])
This FIRST AMENDED AND RESTATED ASSIGNMENT OF RECEIVABLES AND PROCEEDS
(the "Assignment") is entered into as of this __ day of _____, 1996, by and
between (a) ____________________________, a ____________ (together with its
successors and assigns, the "Assignor") which is organized pursuant to a certain
Joint Venture Agreement (the "Joint Venture Agreement"), dated _______, by and
among (i) Fine Host Corporation, a Delaware corporation (the "Borrower"), (ii)
_____________________ and (iii) ___________________________, and whose principal
place of business is at ___________________________________ and (b) USTRUST, a
Massachusetts trust company (hereinafter referred to as "USTrust" when acting
for itself), as Lender and Agent (hereinafter referred to as the "Assignee" when
acting as Agent for the Banks (as defined below)) for each of (i) USTrust, (ii)
The Sumitomo Bank, Limited ("Sumitomo"), (iii) State Street Bank and Trust
Company ("SSB"), (iv) Bank of Boston Connecticut ("BBC"), (v) Mellon Bank, N.A.
("Mellon") and (vi) The Bank of New York ("BNY") (USTrust, Sumitomo, SSB, BBC,
Mellon and BNY, together with their successors and assigns, are hereinafter
referred to collectively as the "Banks").
All capitalized terms not defined herein but defined in the Loan
Agreement shall have the meanings ascribed to them in the Loan Agreement. As
used herein, the term "Loan Agreement" means that certain Third Amended and
Restated Loan Agreement, dated of even date herewith, by and among Fine Host
Corporation, a Delaware corporation ("Fine Host Corporation"), certain
Subsidiaries of Fine Host Corporation, the Banks and the Assignee, as the same
may be hereafter further amended, modified, supplemented, extended or restated
from time to time.
WITNESSETH:
WHEREAS, in connection with the Existing Loan Agreement (as defined in
the Loan Agreement), the Assignor entered into the following:
(a) a certain Limited Guaranty, dated as of _________, 199_,
from the Assignor, as subsequently amended and reaffirmed from time to
time (as so amended and reaffirmed, the "Existing Limited Guaranty"),
pursuant to which, among other things, the Assignor guaranteed all of
the obligations and liabilities of Fine Host Corporation to USTrust,
Sumitomo, NBD Bank and SSB (hereinafter sometimes referred to
collectively as the "Existing Banks");
(b) a certain Security Agreement, dated as of __________,
199_, by and between the Assignor and the Assignee, as subsequently
amended from time to time (as so amended, the "Existing Security
Agreement"), pursuant to which, among other thing, the Assignor granted
to the Assignee a security interest in the assets of the
<PAGE>
Assignor to secure all of the obligations and liabilities of the Assignor
to the Banks; and
(c) a certain Assignment of Receivables and Proceeds, dated as
of __________, 199_, by and between the Assignor and the Assignee, as
subsequently amended from time to time (as so amended, the "Existing
Assignment of Receivables and Proceeds"), pursuant to which, among
other things, the Assignor has assigned to the Assignee as additional
security all of its rights, title and interests in certain proceeds and
receivables resulting from certain agreements, contracts, permits,
licenses and other arrangements to which the Assignor is or may become
a party; and
WHEREAS, Fine Corporation and each of its Subsidiaries (including
without limitation, the Assignor) have requested that the Banks enter into the
Loan Agreement in order to amend, restate and replace in its entirety the
Existing Loan Agreement; and
WHEREAS, as a condition precedent to entering into the Loan Agreement
and making the Loans thereunder, the Banks have requested, among other things,
that the Assignor enter into the following:
(a) a certain First Amended and Restated Limited Guaranty,
dated of even date herewith, from the Assignor, in favor of the Banks,
which amends, restates and replaces in its entirety the Existing
Limited Guaranty (as the same may be hereafter further amended,
modified, substituted, restated or reaffirmed, from time to time, the
"Limited Guaranty");
(b) a certain First Amended and Restated Security Agreement,
dated of even date herewith, by and between the Assignor and the
Assignee, which amends, restates and replaces in its entirety the
Existing Security Agreement (as the same may be hereafter further
amended, modified, substituted, or restated, from time to time, the
"Security Agreement"); and
(c) this Assignment in order to amend, restate and replace in its entirety
the Existing Assignment of Receivables and Proceeds; and
WHEREAS, in response to the foregoing request of the Banks, the
Assignor agrees to enter into, effective as of the date hereof, the Limited
Guaranty, the Security Agreement and this Assignment;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Assignor and the Assignee, for
the ratable benefit of the Banks, hereby amend, restate and replace the Existing
Assignment of Receivables and Proceeds to read in its entirety as follows:
1. To secure the prompt, punctual, and faithful performance by the Assignor
of all of its Liabilities (as defined in the Loan Agreement), including without
limitation, all of
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<PAGE>
the obligations and liabilities of the Assignor to the Banks under the Limited
Guaranty, the Assignor hereby grants, assigns and transfers to the Assignee and
creates in the Assignee, for the ratable benefit of the Banks, a security
interest in all of the rights, title, and interests of the Assignor in, to and
under the following:
1.1 all proceeds, including but not limited to, Net Contract
Proceeds, as defined in the Loan Documents)(collectively, the
"Proceeds") resulting from all agreements, contracts, and permits,
licenses, and other arrangements to which the Assignor is currently or
hereafter becomes a party, and pursuant to which, among other things,
the Assignor has agreed (a) to provide food and beverage services at
certain facilities described therein, (b) to operate and otherwise use
food, beverage and liquor licenses at such facilities, or (c) to manage
certain concession and food service areas at such facilities (including
but not limited to, the Facility Agreements, (as defined in the Loan
Documents)), and all related agreements, contracts, and permits,
licenses, and other arrangements (collectively, the "Agreements"),
including but not limited to the Agreements listed and described on
Schedule A attached hereto, which Schedule A includes all of the
material Agreements as of the date of this Assignment, all as the same
may hereafter be modified, amended, reaffirmed, restated, or extended;
and
1.2 all of those certain promissory notes listed on Schedule B
attached hereto and incorporated herein by reference, all as the same
may hereafter be modified, amended, reaffirmed, restated, or extended
and any rights under any Agreement, or promissory notes, bonds, letters
of credit, other agreements and arrangements executed hereafter, in
each case, including but not limited to, the rights of the Assignor to
receive payment in connection or associated with Assignor incurring
Project Costs (as defined in the Loan Agreement) pursuant to a Facility
Agreement, (collectively, the "Receivables" and individually a
"Receivable"),
subject to Section 5 below, as security only, to have and to hold unto the
Assignee, its successors and assigns, to its and their own use and benefit,
until such time as the Loans (and all other obligations of the Assignor to the
Assignee) shall have been paid and performed in full.
2. The Assignor shall deliver to the Assignee contemporaneously
herewith the originals of all promissory notes which evidence any Receivables,
and each such promissory note shall be endorsed by a duly authorized officer or
agent of the Assignor, in favor of the Assignee, with full recourse.
3. The Assignor hereby appoints the Assignee as its agent and attorney
with full power of substitution in its name and on its behalf, upon the
occurrence of an Event of Default, to sign, seal, indorse, complete indorsement,
execute and deliver, all such further instruments of transfer and agreements,
supplemental, confirmatory or otherwise, as may be
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<PAGE>
required for the purpose of more effectively vesting in the Assignee all of the
rights, title, and interests of the Assignor in, to and under the Receivables;
such power of attorney, being coupled with an interest, shall not be revoked for
any reason until all obligations under the Loan Agreement shall have been paid
and performed in full.
4. The Assignor hereby represents, warrants, covenants and agrees at all
times during the term of this Assignment as follows:
a. That the Assignor will perform and observe faithfully and punctually all
obligations, terms, covenants, and conditions set forth in the Loan Documents;
b. That, as of the date hereof, the amount listed on Schedule
C as "Principal Outstanding," "Interest Accrued," and "Total" for each
Receivable is correct, and there are no offsets or claims by any payor
or indorser under any Receivable which would affect such amounts or the
enforceability of any of the Receivables against any payor, indorser,
or guarantor;
c. That the Assignor is the sole owner of and has not and will not sell,
assign, transfer, mortgage, encumber or pledge all or any portion of its
interest in any of the Proceeds or the Receivables to any person or entity other
than the Assignee;
d. That the Assignor will not cancel, amend, alter, modify,
renew, extend, renegotiate, or terminate any of the Receivables or
Agreements without the prior written consent of the Assignee, so as to
materially and adversely affect the Proceeds; provided, however, that,
prior to the occurrence of a default under any of the Loan Documents,
the Assignor may, without such consent, make or agree to any amendment
or modification that the Assignor reasonably believes is in the best
interest of the Assignor and does not materially affect its ability to
make payments required to be made to the Assignee under the Loan
Documents;
e. That the Assignor will take no action associated with the
cancellation, modification, amendment, alteration, renewal, extension,
renegotiation, or termination of any other contract or renegotiation,
or termination of any other contract or agreement of any nature which
would, directly or indirectly, affect the payment terms, amount due, or
enforceability of any Receivables or the Proceeds; provided, however,
that, prior to the occurrence of a default under any of the Loan
Documents, the Assignor may, without such consent, make or agree to any
amendment or modification that the Assignor reasonably believes is in
the best interest of the Assignor and does not materially affect its
ability to make payments required to be made to the Assignee under the
Loan Documents;
f. That neither the Assignor nor, to the knowledge of the Assignor, any
other party is in default under or in violation of any of the terms, covenants,
or
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<PAGE>
conditions of any other contract or agreement of any nature which
would, directly or indirectly, materially affect the payment terms,
amount due, or enforceability of any Receivable or the Proceeds;
g. That the Assignor will promptly upon written request by the
Assignee, execute and deliver and cause to be executed and delivered
all such instruments of pledge or assignment, and such other
instruments or documents as the Assignee may reasonably request at any
time for the purpose of securing or otherwise affecting its rights
hereunder; and
h. That the Assignor, upon the occurrence of a Default or an
Event of Default under the Loan Documents, shall use its best efforts
to promptly cooperate with the Assignee's requests and directions
relating to collection of the Receivables or the Proceeds.
5. Except as provided herein with respect to the Financed Receivables,
so long as no "Event of Default" or "Default" (as defined in the Loan Documents,
subject to any applicable grace periods contained therein) shall exist, the
Assignor shall have the right to exercise all rights and shall be entitled to
receive all payments under the Receivables.
6. Notwithstanding the foregoing Section 5 or anything else herein to
the contrary, the Assignor hereby unconditionally and absolutely assigns to the
Assignee (and not as security only), for the ratable benefit of the Banks, all
of the Assignor's rights, title and interests as payee to receive payment of all
partial or full prepayments, whenever made, of any and all of the Financed
Receivables (collectively, the "Financed Receivables" and individually a
"Financed Receivable"), which Financed Receivables are listed on Schedule C
attached hereto and incorporated herein by reference (provided, however, that
any amounts received from a Financed Receivable related to the Guidance Loans
shall be paid to the Assignee only up to the full unpaid amount of such Guidance
Loans, and promptly distributed, pro rata, to the Banks, to be applied to the
unpaid amount of such Guidance Loans), such assignment being a present
assignment and not an assignment for security only. Any such prepayments
received by Assignor, whether directly or indirectly (including, without
limitation, offsets against amounts owed by Assignor to such payor under any
other contract or agreement), shall be held in trust by Assignor for Assignee,
and shall be paid immediately to Assignee, without any requirement for Assignee
to make demand therefor. It is the intent of Assignor and Assignee that this is
a present, unconditional assignment for value, and is not intended as a
conditional assignment for security or otherwise.
7. Notwithstanding the foregoing Section 5 or anything else herein to
the contrary, the Assignor hereby unconditionally and absolutely assigns to
Assignee (and not as security only), for the ratable benefit of the Banks, the
right to receive payment of all Net Contract Proceeds (as defined in the Loan
Agreement), whenever made by any person, to the extent required by Section 6.16
of the Loan Agreement, such assignment being a present
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<PAGE>
assignment and not an assignment for security only; provided, however, that the
amount so assigned shall be applied as provided in said Section 6.16 of the Loan
Agreement, unless a default has occurred under any of the Loan Documents. Any
such payments received by Assignor, whether directly or indirectly (including,
without limitation, offsets against amounts owed by Assignor to such person
under any other contract or agreement), shall be held in trust for Assignee, and
shall be paid immediately to Assignee, without any requirement for Assignee to
make demand therefor. It is the intent of Assignor and Assignee that, except as
set forth above in this Section, this is a present, unconditional assignment,
for value, and is not intended as a conditional assignment for security or
otherwise.
8. Immediately upon the occurrence of any Event of Default hereunder or
under the Loan Documents, Assignor shall be deemed to hold in trust for Assignee
any payments received by Assignor, whether directly or indirectly (including,
without limitation, offsets against amounts owed by Assignor to such payor under
any other contract or agreement), under any Receivable, and all such amounts
received by Assignor shall be paid immediately to Assignee, without any
requirement for Assignee to make demand therefor. In addition, and also
immediately upon the occurrence of any Event of Default hereunder or under the
Loan Documents, the Assignee may, at its option, exercisable at any time and
from time to time, without in any way waiving such Event of Default, either in
person or by agent, with or without bringing any action or proceeding, exercise
and enforce any and all rights as holder of the Receivables, including, without
limitation, the right to complete the indorsement. In addition to and not in
limitation of the foregoing, the Assignee shall have all the rights and remedies
of a secured party under the Uniform Commercial Code, as adopted in the
Commonwealth of Massachusetts in Massachusetts General Laws, Chapter 106,
Section 1-101, et seq. ("UCC") with respect to the Notes Receivable. Whenever
notice is required to be given of any public or private sale, such notice shall
be deemed to be reasonable if given at least seven (7) days prior to the date
any public sale shall be held.
9. The Assignee shall not be liable for any loss, claim, damage,
liability or expense which may be sustained or incurred in connection with any
actions or failure to act by the Assignee hereunder, except losses resulting
solely from the gross negligence or willful misconduct of the Assignee. The
Assignor does hereby indemnify, save and hold the Assignee harmless from and
against any and all liability, loss, claim, damage and expense which may be
incurred under or in connection with the Receivables, or otherwise caused by the
negligence or willful misconduct of the Assignor, its agents, officers,
directors, or employees, including, without limitation, any actions taken or
omitted to be taken by the Assignee, except losses resulting solely from the
gross negligence or willful misconduct of the Assignee. The amount of any such
liability, loss, claim, damage or expense indemnified against shall be deemed to
include reasonable attorneys' fees and other costs of defense, and shall be
secured hereby and by the Loan Documents and be payable by the Assignor to the
Assignee immediately upon demand, or, at the option of the Assignee, the
Assignee may reimburse itself therefor from any moneys collected by the Assignee
hereunder, under the Receivables, the Proceeds, or under any of the Loan
Documents. The Assignee shall be
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<PAGE>
required to exercise the same standard of care in dealing with, storing, and
safeguarding the Receivables as the Assignee exercises with similar documents
under which Assignee is the payee, and Assignor hereby waives any claims or
rights of action against Assignee with respect thereto (except with respect to
such standard of care), it being further agreed that Assignee's liability with
respect to any loss or destruction of any Receivable shall (except in the case
of a breach of such standard of care) be limited to the Assignee issuing a lost
note affidavit with respect to such Receivable.
10. Failure of the Assignee to avail itself of any of the terms,
covenants and conditions of this Assignment or any act done or omitted to be
done pursuant to the Assignee's powers and rights granted hereunder shall not be
construed or deemed to be a waiver of its rights and remedies hereunder or under
any of the Loan Documents. The rights and remedies of the Assignee under this
Assignment are cumulative and are not in lieu of but are in addition to any
other rights and remedies which the Assignee shall have under or by virtue of
any of the Loan Documents. The rights and remedies of the Assignee under this
Assignment may be exercised from time to time, as often as their exercise is
deemed expedient by the Assignee and either prior to, simultaneously with or
subsequent to any other action taken by the Assignee, if any, under any of the
Loan Documents. The Assignee may release any party or apply any other security
held by it to the satisfaction of the obligations hereunder and under any of the
Loan Documents without prejudice to any of its rights under this Assignment.
11. The Assignor hereby agrees to execute and deliver to the Assignee
all such further instruments and documents as from time to time during the term
of this Assignment the Assignee may reasonably require or deem appropriate in
order to more adequately secure the rights hereunder, including but not limited
to, UCC financing statements. The Assignee may file with the appropriate
governmental bodies, as a financing statement, a carbon, photographic or other
reproduction of this Assignment.
12. If any term or provision of this Assignment or the application
thereof to any person or circumstance shall, to any extent, be invalid or
unenforceable, the remainder of this Assignment or the application of such term
or provision of this Assignment to persons and circumstances other than those as
to which it is held invalid or unenforceable, shall not be affected thereby, and
each such term and provision of this Assignment shall be valid and enforced to
the fullest extent permitted by law.
13. Any notice, demand, request or other communication given hereunder
or in connection herewith shall be in writing and shall be in writing and shall
be either delivered by hand or mailed by certified mail, return receipt
requested, addressed to the party to receive such notice at the following
address:
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<PAGE>
If to the Assignor:
[Name]
[Address]
With a copy to:
Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, NY 10022
Attention: Cornelius T. Finnegan III, Esq.
If to the Assignee:
USTrust
30 Court Street
Boston, MA 02108
Attention: Michael D. O'Neill, Vice President
With a copy to:
Peabody & Arnold
50 Rowes Wharf
Boston, MA 02110
Attention: Anil Khosla, Esq.
All such notices and communications, when mailed or hand delivered as
set forth above, shall be effective upon receipt if hand delivered or three (3)
days after deposit in the U.S. mails if sent by certified mail. Either party may
change such address by giving notice in the like fashion to the other party.
14. No change, amendment, modification, cancellation or discharge
hereof or any part hereof shall be valid unless the Assignor and the Assignee
shall have consented thereto in writing. The Assignor and Assignee may, from
time to time, amend any of the Schedules hereto by an amendment referring to
this Assignment and substituting or adding to such Schedule. To the extent that
any provision in this Assignment is inconsistent with any provision of the Loan
Documents, then the Assignor shall be bound by the more restrictive provision,
except in the case of Section 16 hereof. To the extent possible, however, the
provisions of this Assignment and the Loan Documents shall be interpreted to
complement and supplement each other and the absence of any provision or portion
thereof in one such document shall not be deemed to be inconsistent with the
other such documents which contains such provision or portion thereof.
15. The terms, covenants, and conditions contained herein shall inure to
the benefit of, and bind the Assignor and the Assignee and their respective
successors and assigns. This
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<PAGE>
Assignment shall be construed and enforced in accordance with and governed by
the laws of the Commonwealth of Massachusetts.
16. (a) Any provision contained herein to the contrary notwithstanding,
if the execution, delivery or performance of this Assignment requires the
consent or approval of any third party, or adversely affects the enforceability
of any Receivable or the requirement that Assignor be paid, repaid, or
reimbursed in the event of termination of an Agreement, according to its terms,
or constitutes a breach or default under an Agreement, and such consent or
approval has not yet been obtained, then the provisions of this Assignment shall
be deemed to be ineffective and the delivery hereof by the Assignor to the
Assignee shall be made in escrow until such necessary consent or approval has
been obtained, at which time all terms and conditions hereof shall be and shall
be deemed to be in full force and effect, and Assignee agrees, in such event and
with respect to any such Receivable or Agreement which could give rise to
Proceeds, that the Assignor shall have no obligation to procure any such consent
or approval prior to an Event of Default under the Loan Documents and an
acceleration of the Loans. The limitations of this paragraph shall not apply to
the extent any Receivable or any Agreement allows the assignment for security
purposes. The parties acknowledge that the limitations of this paragraph are
applicable to the Concession Management Agreement, dated July 25, 1988, as
amended, between the Assignor and Orange County, Florida.
(b) Any provision contained herein to the contrary
(i) subject to subsection (ii) below, the Agreements
shall not include any liquor license or any other license the
assignment of which would require the consent or approval of
any governmental authority or agency or other third party
unless and until such consent or approval has been obtained;
and
(ii) unless an Event of Default has occurred and the
Liabilities have been accelerated pursuant to Section 8.2 of
the Loan Agreement, the Assignor shall not be required to
obtain or seek to obtain any consent or approval referred to
above.
17. (a) Notwithstanding any other provision of this Assignment to the
contrary (including, without limitation, those relating to indemnification,
costs and expenses), the Assignee's sole recourse against the Assignor under
this Assignment for payment of the Liabilities and for all other payments due
hereunder and under the Security Agreement shall be against the Collateral (as
defined in the Security Agreement), the Receivables, the Financed Receivables,
the Proceeds and the Net Proceeds, and the Assignor shall not be liable for any
unpaid Liabilities or any such other amount to the extent that the proceeds of
the sale or other disposition of the Collateral, the Receivables, the Financed
Receivables, the Proceeds and the Net Proceeds are insufficient to pay such
amounts; provided, however, that notwithstanding the foregoing to the contrary,
the Assignor shall be liable to the Assignee in
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<PAGE>
its individual capacity for any loss, expense, claim or damage suffered by the
Assignee as a result of the breach by the Assignor of any of its
representations, warranties or covenants contained herein, or in the Security
Agreement or the Limited Guaranty; provided further, however, that
notwithstanding the foregoing to the contrary, such limitation on liability
shall in no way be deemed to affect the Assignee's rights or interests in and to
the Collateral, the Receivables, the Financed Receivables, the Proceeds or the
Net Proceeds, or any part thereof or any other rights or remedies of the
Assignee under this Assignment or the Security Agreement with respect to the
Collateral, the Receivables, the Financed Receivables, the Proceeds and the Net
Proceeds, or under any other document, agreement or instrument securing the
Limited Guaranty.
(b) Notwithstanding any term or provision contained herein or in any of
the other Loan Documents to the contrary (including, without limitation, those
relating to indemnification, costs and expenses), the Assignee's sole recourse
hereunder and under the Security Agreement for payment of the Liabilities and
for all other payments due hereunder or thereunder shall be against the assets
of the Assignor (being the joint venture entity and referred to herein as the
"Joint Venture") as and to the extent provided in the preceding subsection (a),
and the Assignee shall have no other recourse for any such payment against any
of the joint venturers of the Joint Venture (each a "Joint Venturer") or any of
their assets, notwithstanding that any Joint Venturer might otherwise be liable
for obligations of the Joint Venture under applicable law, the organizational
documents of the Joint Venture or otherwise; provided, however, that the
foregoing provisions of this subsection (b) shall in no way be deemed to affect
(i) the Assignee's rights or interests in and to the Collateral, the
Receivables, the Financed Receivables, the Proceeds or the Net Proceeds, or any
part thereof or any other rights or remedies of the Assignee hereunder or under
the Security Agreement with respect to the Collateral, the Receivables, the
Financed Receivables, the Proceeds and the Net Proceeds or under any other
document, agreement or instrument securing the Limited Guaranty or (ii) the
liabilities and obligations of the Borrower under any of the Loan Documents. In
the event of any inconsistency between the provisions of this subsection (b) and
the provisions of any of the other Loan Documents (including, without
limitations, provisions relating to joint and several liability or liability on
the part of any Person comprising part of another Person), the provisions of
this subsection (b) shall control.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Assignment as
an instrument under seal on the date and year first written above.
ASSIGNOR:
[NAME OF ASSIGNOR]
By: ______________________
Name:
Title:
Its duly authorized officer
SECURED PARTY:
USTRUST, as Lender and Agent
By:
Michael D. O'Neill, Vice President
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<PAGE>
Schedule A
List of Contracts and Agreements
- 12 -
<PAGE>
Schedule B
List of Receivables
- 13 -
<PAGE>
Schedule C
List of Financed Receivables
- 14 -
<PAGE>
EXHIBIT J
FORM OF
FIRST AMENDED AND RESTATED
STOCK PLEDGE AGREEMENT
This FIRST AMENDED AND RESTATED PLEDGE AGREEMENT (the "Agreement") is
entered into as of this _ day of June, 1996, by and between (a) FINE HOST
CORPORATION, a Delaware corporation with its principal office at 3 Greenwich
Office Park, Greenwich, Connecticut 06831 (the "Pledgor"), and (b) USTRUST, a
Massachusetts trust company (hereinafter referred to as "USTrust" when acting
for itself), as Lender and Agent (hereinafter referred to as the "Pledgee" when
acting as Agent for the Banks (as defined below)) for each of (i) USTrust, (ii)
The Sumitomo Bank, Limited ("Sumitomo"), (iii) State Street Bank and Trust
Company ("SSB"), (iv) Bank of Boston Connecticut ("BBC"), (v) Mellon Bank, N.A.
("Mellon") and (vi) The Bank of New York ("BNY") (USTrust, Sumitomo, SSB, BBC,
Mellon and BNY, together with their successors and assigns, are hereinafter
referred to collectively as the "Banks").
All capitalized terms not defined herein but defined in the Loan
Agreement shall have the meanings ascribed to them in the Loan Agreement. As
used herein, the term "Loan Agreement" means that certain Third Amended and
Restated Loan Agreement, dated of even date herewith, by and among the Pledgor,
certain Subsidiaries of the Pledgor, the Banks and the Pledgee, as the same may
be hereafter further amended, modified, supplemented, extended or restated from
time to time.
WITNESSETH:
WHEREAS, the Pledgor has entered into the following pledge agreements
(collectively, the "Existing Pledge Agreements"):
(a) a certain Pledge Agreement, dated as of April 29, 1993, by and
between the Pledgor and Pledgee, as amended, pursuant to which, among other
things, the Pledgor pledged in favor of Pledgee all of the shares of capital
stock of Fine Host Services Corporation, a Delaware corporation ("Fine Host
Services"), Fine Host of Vermont, Inc., a Vermont corporation ("Fine Host of
Vermont"), Fine Host International Corporation, a Delaware corporation ("Fine
Host International"), Fanfare, Inc., a Massachusetts corporation ("Fanfare") and
Global Fanfare, Inc., an Indiana corporation ("Global Fanfare") owned by the
Pledgor;
(b) a certain Pledge Agreement, dated as of September 9, 1994 by and
between the Pledgor and the Pledgee, as amended, pursuant to which, among other
things, the Pledgor pledged in favor of the Pledgee all of the shares of capital
stock of Creative Food Management, Inc., an Ohio corporation (formerly known as
VGE Acquisition Corp.)("CFM") owned by the Pledgor;
(c) a certain Pledge Agreement, dated as of August 1, 1995, by and
between the Pledgor and the Pledgee, pursuant to which, among other things, the
<PAGE>
Pledgor pledged in favor of USTrust all of the shares of capital stock of
Northwest Food Service, Inc., an Idaho corporation ("Northwest") owned by the
Pledgor; and
(d) a certain Pledge Agreement, dated as of March 22, 1996, by and
between the Pledgor and the Pledgee, pursuant to which, among other things, the
Pledgor pledged in favor of USTrust all of the shares of capital stock of
Southwest Food Service, Inc., a New Mexico corporation ("SWSI")(Fine Host
Services, Fine Host of Vermont, Fine Host International, Fanfare, Global
Fanfare, CFM, Northwest and SWSI are hereinafter sometimes referred to
collectively as the "Corporate Subsidiaries") owned by the Pledgor; and
WHEREAS, the Pledgor and each of its Subsidiaries (including all of
the Corporate Subsidiaries) have requested that the Banks enter into the Loan
Agreement in order to amend, restate and replace in its entirety the Existing
Loan Agreement; and
WHEREAS, as a condition precedent to entering into the Loan Agreement
and making the Loans thereunder, the Banks have requested, among other things,
that the Pledgor enter into this Agreement in order to amend, restate and
replace in their entirety the Existing Pledge Agreements;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Pledgor and the Pledgee, for
the ratable benefit of the Banks, hereby amend, restate and replace all of the
Existing Pledge Agreements to read in their entirety as follows:
1. Pledgee that:
The Collateral. The Pledgor hereby represents, warrants and covenants to the
1.1 The Pledgor is the record and legal owner of all of the issued and
outstanding shares (collectively, the "Shares") of capital stock of each of the
Corporate Subsidiaries;
1.2 The Shares are free and clear of all pledges, liens, claims,
charges, encumbrances and restrictions other than the security interest from the
Pledgor to the Pledgee granted hereunder; and
1.3 The Pledgor has and will have power, authority and legal right to
pledge and grant a security interest in and to the Collateral (as defined
below).
The Pledgor hereby agrees to defend the Pledgee's rights and security
interest in the Collateral. The Shares, together with any rights thereunder and
all proceeds therefrom,
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including without limitation, dividends (cash or stock), income, interest,
earnings, profits and other distributions thereunder, are hereinafter referred
to collectively as the "Collateral."
2. Pledge and Security Interest. The Pledgor hereby pledges and grants
to the Pledgee, for the ratable benefit of the Banks, a continuing security
interest in all of the now owned or hereafter acquired Collateral, as security
for payment and performance of all of the Liabilities (as defined in the Loan
Agreement) of the Pledgor to the Pledgee, whether now owed or hereafter
incurred. In case the Pledgor shall hereafter acquire (i) any additional shares
of the capital stock of any of the Corporate Subsidiaries or any corporation
which may the successor of any of the Corporate Subsidiaries, (ii) any warrants
or options for the purchase of shares of such capital stock of any class of any
of the Corporate Subsidiaries or (ii) any securities exchangeable for or
convertible into shares of such capital stock of any class of any of the
Corporate Subsidiaries, by purchase or otherwise, then the Pledgor shall
forthwith deliver to and pledge such shares or other securities to the Pledgee
under this Agreement.
3. Custody of Collateral. The Pledgor has delivered herewith to the
Pledgee all of the certificates and instruments evidencing the Shares. The
Pledgor acknowledges that the Pledgee holds the Shares hereunder, for the
ratable benefit of the Banks, and as designee of the Pledgor, to hold the Shares
for the purpose of perfecting the Pledgee's security interest in the Shares.
4. Dividends, Voting. etc.. While No Default or Event of Default. So
long as no Default or Event of Default (as defined in the Loan Agreement) has
occurred and is continuing (or if continuing has been effectively waived by the
Pledgee in writing), the Pledgor, as to the Shares, shall be entitled (subject
specifically to the provisions and restrictions contained in the Loan Agreement
and the rights of the Pledgee under the Loan Documents): to (a) receive all cash
dividends paid in respect of the Shares (all stock dividends shall be promptly
and directly delivered to the Pledgee); (b) vote the Shares (to the extent
otherwise entitled thereto); and (c) give consents, waivers and ratifications in
respect of the Shares; provided, however, that no vote shall be cast or consent,
waiver or ratification given or action taken which would be inconsistent with or
violate any provision of the Loan Agreement or the Loan Documents. All such
rights of the Pledgor to vote and give consents, waivers and ratification with
respect to the Shares shall, at the Pledgee's option as evidenced by the
Pledgee's notifying the Pledgor of such election, cease in case a Default or an
Event of Default shall have occurred and be continuing.
5. Remedies Following Default or Event of Default. If a Default or an Event
of Default shall occur and be continuing, the Pledgee shall thereafter have the
following rights and remedies (to the extent permitted by applicable law) in
addition to the rights and remedies of a secured party under the Uniform
Commercial Code, as adopted and in effect in the Commonwealth of Massachusetts
in Massachusetts General Laws, Chapter 106, Section 1-101, et beg,. ("UCC"), all
such rights. and remedies being cumulative, not exclusive, and 3
<PAGE>
.
enforceable alternately, successively or concurrently, at such time or times as
the Pledgee deems expedient:
(a) if the Pledgee so elects and gives notice of such election to the
Pledgor, the Pledgee may vote any or all Shares (whether or not the same shall
have been transferred into its name or the name of its nominee or nominees) and
give all consents, waivers and ratification in respect of the stock and
otherwise act with respect thereto as though it was the outright owner thereof
(the Pledgor hereby irrevocably appoints the Pledgee the proxy and
attorney-in-fact of the Pledgor, with full power of substitution, to do so);
(b) the Pledgee may demand, sue for, collect or make any compromises or
settlement which it deems suitable in respect of the Collateral;
(c) the Pledgee may sell, resell, assign and deliver or otherwise
dispose of any or all of the Collateral, for cash or credit or both and upon
such terms, at such place or places and at such time or times and to such
persons as the Pledgee deems expedient, all without demand for performance by
the Pledgor or any notice or advertisement whatsoever except such as may be
required by law; and
(d) the Pledgee may cause all or any part of the Collateral held by it
to be transferred into its name or the name of its nominee or nominees.
The Pledgor recognizes that the Pledgee may be unable to effect a
public sale of the Shares by reason of certain prohibitions contained in the
Securities Act of 1933, as amended, or any applicable state securities laws, but
may be compelled to resort to one or more private sales thereof to a restricted
group of purchasers who will be obliged to agree, among other things, to acquire
such securities for their own account, for investment and not with a view to the
distribution or resale thereof. The Pledgor agrees that any such private sales
may be at prices and on other reasonable terms less favorable to the seller than
if sold at public sales and that such private sales shall be deemed to have been
made in a commercially reasonable manner. The Pledgee shall be under no
obligation to delay a sale of any of the Shares for the period of time necessary
to permit the issuer of such securities to register such securities for public
sale under the Securities Act of 1933, as amended, even if the issuer would
agree to do so.
The Pledgor hereby agrees that the sending of ten (10) days' notice by
certified mail return receipt requested, postage prepaid, to the Pledgor's
address set forth at the head of this Agreement of the place and time of any
public sale or of the time after which any private sale or other intended
disposition is to be made, shall be deemed reasonable notice thereof. To the
extent permitted by law, the Pledgee may enforce its rights hereunder without
any other notice and without compliance with any other condition precedent now
or hereafter imposed by statute, rule of law or otherwise (all of which are
hereby expressly waived by the
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<PAGE>
Pledgor). If any of the Collateral is sold by the Pledgee upon credit or for
future delivery, the Pledgee shall not be liable for the failure of the
purchaser to pay for the same and in such event the Pledgee may resell such
Collateral. The Pledgee may buy any part or all of the Collateral at any public
sale and if any part or all of the Collateral is of a type customarily sold in a
recognized market or is of the type which is the subject of widely-distributed
standard price quotations, the Pledgee may buy at private sale and may make
payments thereof by any means. The Pledgee may apply the cash proceeds actually
received from any sale or other disposition to the reasonable expenses of
retaking, holding, preparing for sale, selling and the like, to reasonable
attorneys' fees and all legal expenses, travel and other expenses which may be
incurred by the Pledgee in attempting to collect the Liabilities, or any of
them, or to enforce this Agreement or in the prosecution or defense of any
action or proceeding related to the subject matter of this Agreement; and then
to the Liabilities in such order as to principal or interest remaining unpaid,
including legal interest thereon, and the balance of any expenses unpaid, as the
Pledge in it sole discretion may reasonably determine, and any surplus shall be
paid to the Pledgor.
The Pledgee understands that certain state liquor laws that now or may
in the future be applicable to the Pledgor may require that certain approvals be
obtained, or certain filings be made or notices given, prior to the time at
which (i) the Shares may be transferred into the name of the Pledgee or its
nominee or (ii) the Pledgee may exercise control with respect to the Shares if
related liquor licenses are to remain in effect.
6. Marshalling. The Pledgee shall not be required to marshal! any
present or future security for (including but not limited to this Agreement and
the Collateral) the Liabilities or any of them or to resort to such security in
any particular order; and all of its rights hereunder and in respect of such
security shall be cumulative and in addition to all other rights, however
existing or arising. To the extent that it lawfully may, the Pledgor hereby
agrees that it will not invoke any law which might cause delay in or impede the
enforcement of the Pledgee's rights under this Agreement or under any other
instrument evidencing any of the Liabilities or under which any of the
Liabilities is outstanding or by which any of the Liabilities is secured or
guaranteed, and the Pledgor hereby irrevocably waives the benefits of all such
laws.
7. Pled~or's Liabilities Not Affected. The Liabilities of the Pledgor
hereunder shall remain in full force and effect without regard to, and shall not
be impaired by, (a) any exercise or nonexercise, or any waiver, by the Pledgee
of any right, remedy, power or privilege under or in respect of any of the
Liabilities or any security therefor (including this Agreement); (b) any
amendment or waiver of any of the terms of the Liabilities of the Pledgor to the
Pledgee and the security therefor; (c) any amendment or waiver of any of the
terms of any instrument (other than this Agreement) providing security for any
of the Liabilities; or (d) the taking of additional security for any guaranty of
any of the Liabilities or the release or discharge or termination of any
security or guaranty for any of the Liabilities; whether or not the Pledgor
shall have notice or knowledge of any of the foregoing.
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<PAGE>
8. Transfer, etc., By Pledgor. Without the prior written consent of the
Pledgee, the Pledgor will not pledge or grant any security interest in or
otherwise encumber any of the Collateral other than the security interest in
favor of the Pledgee.
9. Further Assurances. The Pledgor will do all such acts, and will
furnish to the Pledgee all such financing statements, certificates, opinions and
other documents and will do or cause to be done all such other things as the
Pledgee may reasonably request from time to time in order to give full effect to
this Agreement and to secure the rights of the Pledgee hereunder.
10. Pledgee's Exoneration. Under no circumstances shall the Pledgee be
deemed to assume any responsibility for or obligation or duty (except for safe
custody) with respect to any part or all of the Collateral delivered hereunder,
of any nature or kind or any matter or proceedings arising out of or relating
thereto, but the same shall be at the Pledgor's sole risk at all times,
excepting only Pledgee's gross negligence or wilful misconduct. The Pledgee
shall not be required to take any action of any kind to collect, preserve or
protect its or the Pledgor's rights in the Collateral against any parties
thereto. The Pledgor hereby releases the Pledgee from any claims, causes of
action and demands at any time arising out of or with respect to this Agreement,
the Liabilities, the use of the Collateral and/or any actions reasonably taken
or omitted to be taken by the Pledgee with respect thereto, and the Pledgor
hereby agrees to hold the Pledgee harmless from and with respect to any and all
such claims, causes of action and demands, excepting only those claims, causes
of action and demands attributable to the Pledgee's gross negligence or wilful
misconduct.
11. No Waiver. Etc. No act, failure or delay by the Pledgee shall
constitute a waiver of its rights and remedies hereunder or otherwise. No single
or partial waiver by the Pledgee of any default or right or remedy which it may
have shall operate as a waiver of any other default, right or remedy or of the
same default, right or remedy on a future occasion. The Pledgor hereby waives
presentment, notice of dishonor and protest of all instruments included in or
evidencing any of the Liabilities or the Collateral, and any and all other
notices and demand whatsoever.
12. Notices, Etc. All notices, requests and other communications hereunder
shall be given in the manner provided for in the Loan Agreement.
13. Miscellaneous Provisions. Neither this Agreement nor any term
hereof may be changed, waived, discharged or terminated except by a written
instrument expressly referring to this Agreement and to the provisions so
modified or limited, and executed by the party to be charged. This Agreement and
all obligations of the Pledgor hereunder shall be binding upon the successors in
title and assigns of the Pledgor, and shall, together with the rights and
remedies of the Pledgee hereunder, inure to the benefit of the Pledgee, its
successors in title and assigns. This Agreement and obligations of the Pledgor
hereunder shall be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts. The descriptive section headings have been
inserted for convenience of reference only and do not
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<PAGE>
define or limit the provisions hereof. If any term of this Agreement shall be
held to be invalid, illegal or unenforceable the validity of all other terms
hereof shall be in no way affected hereby and this Agreement shall be construed
and be enforceable as if such invalid, illegal or unenforceable term had not
been included herein.
IN WITNESS WHEREOF, the Pledgee and the Pledgor have caused this
Agreement to be duly executed and delivered under seal as of the date first
above written.
WITNESS: PLEDGOR:
FINE HOST CORPORATION
By:_
Name: Name:
Title:
Its duly suthorized officer
WITNESS: PLEDGEE:
Name: USTRUST, as Lender and Agent
By:
Michael D. O'Neill, Vice President
<PAGE>
EXHIBIT K
FORM OF
FIRST AMENDED AND RESTATED LLC PLEDGE AGREEMENT
(for Membership Interest in Tarrant County Concessions, L.L.C.)
This FIRST AMENDED AND RESTATED LLC PLEDGE AGREEMENT (the "Agreement")
is entered into as of this __ day of ______, 1996, by and between (a) FINE HOST
CORPORATION, a Delaware corporation with a principal office at 3 Greenwich
Office Park, Greenwich, Connecticut 06831 (the "Pledgor"), and (b) USTRUST, a
Massachusetts trust company (hereinafter referred to as "USTrust" when acting
for itself), as Lender and Agent (hereinafter referred to as the "Pledgee" when
acting as Agent for the Banks (as defined below)) for each of (i) USTrust, (ii)
The Sumitomo Bank, Limited ("Sumitomo"), (iii) State Street Bank and Trust
Company ("SSB"), (iv) Bank of Boston Connecticut ("BBC"), (v) Mellon Bank, N.A.
("Mellon") and (vi) The Bank of New York ("BNY") (USTrust, Sumitomo, SSB, BBC,
Mellon and BNY, together with their successors and assigns, are hereinafter
referred to collectively as the "Banks").
All capitalized terms not defined herein but defined in the Loan
Agreement shall have the meanings ascribed to them in the Loan Agreement. As
used herein, the term "Loan Agreement" means that certain Third Amended and
Restated Loan Agreement, dated of even date herewith, by and among the Pledgor,
certain Subsidiaries of the Pledgor, the Banks and the Pledgee, as the same may
be hereafter further amended, modified, supplemented, extended or restated from
time to time.
WITNESSETH:
WHEREAS, the Pledgor has entered into a certain Pledge Agreement (the
"Existing Pledge Agreement"), dated as of August 24, 1995, by and between the
Pledgor and Pledgee, pursuant to which, among other things, the Pledgor granted
in favor of the Pledgee a security interest in, among other things, all of the
rights, title and interests of the Pledgor's membership interest ("Membership
Interest") in Tarrant County Concessions, L.L.C., a Texas limited liability
company (the "Limited Liability Company"); and
WHEREAS, the Pledgor and each of its Subsidiaries have requested that
the Banks enter into the Loan Agreement in order to amend, restate and replace
in its entirety the Existing Loan Agreement; and
WHEREAS, as a condition precedent to entering into the Loan Agreement
and making the Loans thereunder, the Banks have requested, among other things,
that the Pledgor enter into this Agreement in order to amend, restate and
replace in its entirety the Existing Pledge Agreement;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Pledgor and the Pledgee, for
the ratable benefit of the Banks, hereby amend, restate and replace the Existing
Pledge Agreement to read in its entirety as follows:
1. Definitions. Terms used herein and not defined in the Loan Agreement
or otherwise defined herein which are defined in the Uniform Commercial Code, as
in effect, from time to time, in The Commonwealth of Massachusetts (the "UCC")
have the respective meanings given to such terms in the UCC.
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2. Pledge And Grant of Security Interest in Collateral. To secure all
of the Liabilities of the Pledgor to the Pledgee under the Loan Agreement and
the other Loan Documents, the Pledgor hereby pledges, assigns, grants to the
Pledgee, for the ratable benefit of the Banks, a continuing first priority
security interest in the following, in each case whether now owned or hereafter
acquired, issued or arising (collectively, the "Collateral"):
(a) all of the Pledgor's Membership Interest in the Limited
Liability Company, whether now existing or hereafter arising
(hereinafter referred to as the "Membership Interest");
(b) all payments, earnings, dividends (whether cash or in
kind, including any dividends of additional Membership Interest) and
other distributions (including but not limited to, all distribution of
assets or property of the Limited Liability Company in the event of a
liquidation or winding up of the Limited Liability Company or
otherwise) received by the Limited Liability Company with respect to
the Membership Interest;
(c) all rights, interests, and remedies available to the
Pledgor pursuant to any of the foregoing, including but not limited to
any voting or other rights arising from the Membership Interest, and
under applicable law; and
(d) all proceeds, substitutions, accessions, and replacements
(including any securities or other property in exchange therefore) of
any of the foregoing.
2. UCC-1 Financing Statements; Certificates.
2.1 UCC-1 Financing Statements. The Pledgor shall execute and
deliver contemporaneously herewith to the Pledgee certain UCC-1
Financing Statements, in form satisfactory to the Pledgee, and will pay
all costs associated with filing the same in all public offices
wherever filing is deemed by the Pledgee to be necessary, desirable or
otherwise appropriate.
2.2 Certificates. If, at any time, the Membership Interest
shall be represented by one or more membership interest certificates or
other certificates of ownership or any other documents, the Pledgor
shall promptly deliver such certificates, or other documents to the
Pledgee, accompanied by transfer powers endorsed in blank respecting
such certificates or documents, duly executed, with signatures
guaranteed if requested by the Pledgee.
3. Representations, Warranties and Covenants. The Pledgor hereby
represents, warrants and covenants to the Pledgee the following:
3.1 Locations; Supplemental Information Regarding Pledgor. The
Pledgor's principal place of business, chief executive office and
mailing address is located at the address set forth at the beginning of
this Agreement, and the Pledgor does not and will not conduct any
business under any trade name or trade style other than Pledgor's legal
name or such other names or styles as may be set forth in the Loan
Agreement or any of the other Loan Documents.
3.2 Title To Collateral. The Pledgor has good and marketable
title to the Membership Interest, subject to no pledges, liens,
security interests, charges, options, restrictions or other
encumbrances except the pledge and security interest created by this
Agreement.
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3.3 Authority. The Pledgor has full power, authority and legal
right to execute, deliver and perform its obligations under this
Agreement and to pledge and grant a security interest in all of the
Collateral pursuant to this Agreement, and the execution, delivery and
performance hereof and the pledge of and granting of a security
interest in the Collateral hereunder do not contravene any law, rule or
regulation or any judgment, decree or order of any tribunal or of any
agreement or instrument to which the Pledgor is a party or by which the
Pledgor or the Pledgor's property is bound or affected or constitute a
default thereunder. The Pledgor covenants that the Pledgor will defend
the Pledgee's rights and security interest in the Membership Interest
against the claims and demands of all persons whomsoever.
3.4 Transfer by Pledgor. The Pledgor will not sell, assign,
transfer or otherwise dispose of, grant any option with respect to, or
pledge or grant any security interest in or otherwise encumber or
restrict any of the Collateral or any interest therein, except as
provided for in this Agreement.
4. No Liability As Member. The foregoing pledge and security interest
is for collateral purposes only and, to the fullest extent permitted by law, the
Pledgee shall not, either by virtue hereof or by its receipt of distributions
from or by virtue of the exercise of any of its rights hereunder, be deemed to
be a member of the Limited Liability Company or to have any liability for the
debts, obligations or liabilities of the Limited Liability Company, the Pledgor
or any other participant in the Limited Liability Company, or to have any
obligation to make capital contributions to, perform any services for, or
discharge any duties of a member of the Limited Liability Company.
5. Liquidation, Recapitalization, Etc.
5.1 Any sums or other property paid or distributed upon or
with respect to the Membership Interest, whether by dividend or
redemption or upon the liquidation or dissolution of the Limited
Liability Company, shall, except to the limited extent provided in
Section 6, be paid over and delivered to the Pledgee to be held by the
Pledgee as security for the payment and performance in full of all of
the Liabilities. In case, pursuant to the recapitalization or
reclassification of the Limited Liability Company or pursuant to the
reorganization thereof, any distribution of capital shall be made on or
in respect of any of the Membership Interest or any property shall be
distributed upon or with respect to any of the Membership Interest, the
property so distributed shall be delivered to the Pledgee to be held by
it as security for the Liabilities. Except to the limited extent
provided in Section 6, all sums of money and property paid or
distributed in respect of the Membership Interest, whether as a
dividend or upon such a liquidation, dissolution, recapitalization or
reclassification or otherwise, that are received by the Pledgor shall,
until paid or delivered to the Pledgee, be held in trust for the
Pledgee as security for the payment and performance in full of all of
the Liabilities.
5.2 All sums of money that are delivered to the Pledgee
pursuant to this Section 5 shall be deposited into an interest bearing
account in the name of the Pledgee (the "Cash Collateral Account").
Some or all of the funds from time to time in the Cash Collateral
Account may be invested in time deposits, certificates of deposit
issued by a bank, or U.S. government obligations (such time deposits,
certificates of deposit or U.S. Government obligations being
hereinafter referred to, collectively, as "Cash Amounts"), that are
satisfactory to both the Pledgee and the Pledgor. Interest earned on
the Cash Collateral Account and on the Cash Amounts shall be deposited
in the Cash Collateral Account. The Cash Collateral Account, all sums
from time to time standing to the credit of the Cash
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Collateral Account, any and all Cash Amounts, any and all instruments
or other writings evidencing Cash Amounts and any and all proceeds or
any thereof are hereinafter referred to as the "Cash Collateral."
5.3 The Pledgor shall have no right to withdraw sums from the
Cash Collateral Account, to receive any of the Cash Collateral or to
require the Pledgee to part with the Pledgee's possession of any
instruments or other writings evidencing any Cash Amounts.
6. Distributions, Voting, Etc., Prior to Event of Default. So long as
no Event of Default shall have occurred and be continuing, the Pledgor shall be
entitled to receive all cash dividends and distributions paid in respect of the
Membership Interest, to vote the Membership Interest and to give consents,
waivers and ratifications in respect of the Membership Interest; provided,
however, that no vote shall be cast or consent, waiver or ratification given by
the Pledgor if the effect thereof would or be inconsistent with or result in any
violation of any of the provisions of the Loan Agreement or this Agreement. All
such rights of the Pledgor to receive cash dividends and distributions shall
cease in case an Event of Default shall have occurred and be continuing. All
such rights of the Pledgor to vote and give consents, waivers and ratifications
with respect to the Membership Interest shall, at the Pledgee's option, as
evidenced by the Pledgee's notifying the Pledgor of such election, cease in case
an Event of Default shall have occurred and be continuing.
7. Remedies.
Following Default or Event of Default. If a Default or an Event of
Default shall occur and be continuing, the Pledgee shall thereafter have the
following rights and remedies (to the extent permitted by applicable law) in
addition to the rights and remedies of a secured party under the Uniform
Commercial Code, as adopted and in effect in the Commonwealth of Massachusetts
in Massachusetts General Laws, Chapter 106, Section 1-101, et seq. ("UCC"), all
such rights and remedies being cumulative, not exclusive, and enforceable
alternately, successively or concurrently, at such time or times as the Pledgee
deems expedient:
(a) if the Pledgee so elects and gives notice of such election
to the Pledgor, the Pledgee may vote any or all of the Membership
Interest (whether or not the same shall have been transferred into its
name or the name of its nominee or nominees) and give all consents,
waivers and ratification in respect of the Membership Interest and
otherwise act with respect thereto as though it was the outright owner
thereof (the Pledgor hereby irrevocably appoints the Pledgee the proxy
and attorney-in-fact of the Pledgor, with full power of substitution,
to do so);
(b) the Pledgee may demand, sue for, collect or make any compromises or
settlement which it deems suitable in respect of the Collateral;
(c) the Pledgee may sell, resell, assign and deliver or
otherwise dispose of any or all of the Collateral, for cash or credit
or both and upon such terms, at such place or places and at such time
or times and to such persons as the Pledgee deems expedient, all
without demand for performance by the Pledgor or any notice or
advertisement whatsoever except such as may be required by law; and
(d) the Pledgee may cause all or any part of the Collateral held by it to
be transferred into its name or the name of its nominee or nominees.
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The Pledgor recognizes that the Pledgee may be unable to effect a
public sale of the Membership Interest by reason of certain prohibitions
contained in the Securities Act of 1933, as amended, or any applicable state
securities laws, but may be compelled to resort to one or more private sales
thereof to a restricted group of purchasers who will be obliged to agree, among
other things, to acquire such securities for their own account, for investment
and not with a view to the distribution or resale thereof. The Pledgor agrees
that any such private sales may be at prices and on other reasonable terms less
favorable to the seller than if sold at public sales and that such private sales
shall be deemed to have been made in a commercially reasonable manner. The
Pledgee shall be under no obligation to delay a sale of any of the Membership
Interest for the period of time necessary to permit the issuer of such
securities to register such securities for public sale under the Securities Act
of 1933, as amended, even if the issuer would agree to do so.
The Pledgor hereby agrees that the sending of ten (10) days' notice by
certified mail return receipt requested, postage prepaid, to the Pledgor's
address set forth at the head of this Agreement of the place and time of any
public sale or of the time after which any private sale or other intended
disposition is to be made, shall be deemed reasonable notice thereof. To the
extent permitted by law, the Pledgee may enforce its rights hereunder without
any other notice and without compliance with any other condition precedent now
or hereafter imposed by statute, rule of law or otherwise (all of which are
hereby expressly waived by the Pledgor). If any of the Collateral is sold by the
Pledgee upon credit or for future delivery, the Pledgee shall not be liable for
the failure of the purchaser to pay for the same and in such event the Pledgee
may resell such Collateral. The Pledgee may buy any part or all of the
Collateral at any public sale and if any part or all of the Collateral is of a
type customarily sold in a recognized market or is of the type which is the
subject of widely-distributed standard price quotations, the Pledgee may buy at
private sale and may make payments thereof by any means. The Pledgee may apply
the cash proceeds actually received from any sale or other disposition to the
reasonable expenses of retaking, holding, preparing for sale, selling and the
like, to reasonable attorneys' fees and all legal expenses, travel and other
expenses which may be incurred by the Pledgee in attempting to collect the
Liabilities, or any of them, or to enforce this Agreement or in the prosecution
or defense of any action or proceeding related to the subject matter of this
Agreement; and then to the Liabilities in such order as to principal or interest
remaining unpaid, including legal interest thereon, and the balance of any
expenses unpaid, as the Pledge in it sole discretion may reasonably determine,
and any surplus shall be paid to the Pledgor.
The Pledgee understands that certain state liquor laws that now or may
in the future be applicable to the Pledgor may require that certain approvals be
obtained, or certain filings be made or notices given, prior to the time at
which (i) the Membership Interest may be transferred into the name of the
Pledgee or its nominee or (ii) the Pledgee may exercise control with respect to
the Membership Interest if related liquor licenses are to remain in effect.
8. Costs; Legal Fees. The Pledgor agrees to pay, or to reimburse the
Pledgee, as the case may be on demand, for all fees, costs and expenses
(including attorneys' reasonable fees and expenses) incurred or paid by the
Pledgee in connection with: (a) collection of the Liabilities or the enforcement
of the Pledgee's rights and remedies under this Agreement; (b) the
administration, supervision, protection of or realization on any of the
Collateral held as security for any of the Liabilities; or (c) the defense of
any action against the Pledgee with respect to the Pledgee's rights or remedies
in respect to the Collateral; and all of the foregoing fees, costs, and expenses
shall be part of the Liabilities secured by this Agreement, and may be paid by
the Pledgee, acting in its sole discretion, and added to the Liabilities, in
each case, whether or not any suit or other legal proceedings are commenced or
pending.
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9. Marshalling. The Pledgee shall not be required to marshal any
present or future security for (including but not limited to this Agreement and
the Collateral), or other assurances of payment of, the Liabilities or any of
them, or to resort to such security or other assurances of payment in any
particular order. All of the Pledgee's rights hereunder and in respect of such
security and other assurances of payment shall be cumulative and in addition to
all other rights, however existing or arising. To the extent that the Pledgor
lawfully may, the Pledgor hereby agrees that the Pledgor will not invoke any law
relating to the marshalling of collateral that might cause delay in or impede
the enforcement of the Pledgee's rights under this Agreement or under any other
instrument evidencing any of the Liabilities or under which any of the
Liabilities is outstanding or by which any of the Liabilities is secured or
payment thereof is otherwise assured, and to the extent that the Pledgor
lawfully may the Pledgor hereby irrevocably waives the benefits of all such
laws.
10. Pledgor's Liabilities Not Affected. The obligations of the Pledgor
hereunder shall remain in full force and effect without regard to, and shall not
be impaired by (a) any exercise or nonexercise, or any waiver, by the Pledgee of
any right, remedy, power or privilege under or in respect of any of the
Liabilities or any security thereof (including this Agreement); (b) any
amendment to or modification of the Loan Agreement or any of the Liabilities;
(c) any amendment to or modification of any instrument (other than this
Agreement) securing any of the Liabilities; or (d) the taking of additional
security for, or any other assurances of payment of, any of the Liabilities or
the release or discharge or termination of any security or other assurances of
payment or performance for any of the Liabilities; whether or not the Pledgor
shall have notice or knowledge of any of the foregoing.
11. Further Assurances. The Pledgor will do all such acts, and will
furnish to the Pledgee all such financing statements, certificates, legal
opinions and other documents and will obtain all such governmental consents and
corporate approvals and will do or cause to be done all such other things as the
Pledgee may reasonably request from time to time in order to give full effect to
this Agreement and to secure the rights of the Pledgee hereunder. If the Pledgee
so elects, a photocopy of this Agreement may at any time and from time to time
be filed by the Pledgee as a financing statement in any recording office in any
jurisdiction.
12. Pledgee's Exoneration. Under no circumstances shall the Pledgee be
deemed to assume any responsibility for or obligation or duty with respect to
any part or all of the Collateral of any nature or kind or any matter or
proceedings arising out of or relating thereto, other than after an Event of
Default shall have occurred and be continuing, to act in a commercially
reasonable manner. The Pledgee shall not be required to take any action of any
kind to collect, preserve or protect the Pledgor or the Pledgor's rights in the
Collateral or against other parties thereto.
13. No Waiver, Etc. Neither this Agreement nor any term hereof may be
changed, waived, discharged or terminated except by a written instrument
expressly referring to this Agreement and to the provisions so modified or
limited, and executed by the party to be charged. No act, failure or delay by
the Pledgee shall constitute a waiver of the Pledgee's rights and remedies
hereunder or otherwise. No single or partial waiver by the Pledgee of any
default or right of remedy that the Pledgor may have shall operate a waiver of
any other default, right or remedy on a future occasion. The Pledgor hereby
waives presentment, notice of dishonor and protest of all instruments, included
in or evidencing any of the Liabilities or the Collateral, and any and all other
notices and demands whatsoever (except as expressly provided herein or in the
Loan Agreement).
14. Governing Law. THIS AGREEMENT IS INTENDED TO TAKE EFFECT AS A SEALED
INSTRUMENT AND SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE COMMONWEALTH OF MASSACHUSETTS.
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<PAGE>
15. Miscellaneous. The headings of each section of this Agreement are
for convenience only and shall not define or limit the provisions thereof. This
Agreement and all rights and obligations hereunder shall be binding upon the
Pledgor and the Pledgor's respective heirs, successors and assigns, and shall
inure to the benefit of the Pledgee and the Pledgee's successors and assigns. If
any term of this Agreement shall be held to be invalid, illegal or
unenforceable, the validity of all other terms hereof shall be in no way
affected thereby, and this Agreement shall be construed and be enforceable as if
such invalid, illegal or unenforceable term had not been included herein.
16. Conflicting Provisions. In the event of any conflict between the
provisions of this Agreement and those of the Loan Agreement, the Loan Agreement
shall govern.
IN WITNESS WHEREOF, the undersigned has executed under seal this
Agreement as of the date first above written.
WITNESS: PLEDGOR:
FINE HOST CORPORATION
_________________________ By:____________________________________
Name: Name:
Title:
Its duly authorized officer
PLEDGEE:
WITNESS: USTRUST, as Lender and Agent
__________________________ By: ___________________________________
Name Michael D. O'Neill, Vice President
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EXHIBIT L
FORM OF
FIRST AMENDED AND RESTATED JOINT VENTURE PLEDGE AGREEMENT
(for )
This FIRST AMENDED AND RESTATED JOINT VENTURE PLEDGE AGREEMENT (the
"Agreement") is entered into as of this _ day of , 1996, by and between (a) FINE
HOST CORPORATION, a Delaware corporation with a principal office at 3 Greenwich
Office Park, Greenwich, Connecticut 06831 (the "Pledgor"), and (b) USTRUST, a
Massachusetts trust company (hereinafter referred to as "USTrust" when acting
for itself), as Lender and Agent (hereinafter referred to as the "Pledgee" when
acting as Agent for the Banks (as defined below)) for each of (i) USTrust, (ii)
The Sumitomo Bank, Limited ("Sumitomo"), (iii) State Street Bank and Trust
Company ("SSB"), (iv) Bank of Boston Connecticut ("BBC"), (v) Mellon Bank, N.A.
("Mellon") and (vi) The Bank of New York ("BNY") (USTrust, Sumitomo, SSB, BBC,
Mellon and BNY, together with their successors and assigns, are hereinafter
referred to collectively as the "Banks").
All capitalized terms not defined herein but defined in the Loan
Agreement shall have the meanings ascribed to them in the Loan Agreement. As
used herein, the term "Loan Agreement" means that certain Third Amended and
Restated Loan Agreement, dated of even date herewith, by and among the Pledgor,
certain Subsidiaries of the Pledgor, the Banks and the Pledgee, as the same may
be hereafter further amended, modified, supplemented, extended or restated from
time to time.
WITNESSETH:
WHEREAS, the Pledgor has entered into a certain Pledge Agreement (the
"Existing Pledge Agreement"), dated as of , 199_, by and between the Pledgor and
Pledgee, pursuant to which, among other things, the Pledgor granted in favor of
the Pledgee a security interest in, among other things, all of the rights, title
and interests of the Pledgor in Joint Venture (the "Joint Venture"), a joint
venture organized pursuant to a certain Joint Venture Agreement (the "Joint
Venture Agreement"), dated , by and among (i) the Pledgor, (ii) and (iii)_ ; and
WHEREAS, the Pledgor and each of its Subsidiaries have requested that
the Banks enter into the Loan Agreement in order to amend, restate and replace
in its entirety the Existing Loan Agreement; and
WHEREAS, as a condition precedent to entering into the Loan Agreement
and making the Loans thereunder, the Banks have requested, among other things,
that the Pledgor enter into this Agreement in order to amend, restate and
replace in its entirety the Existing Pledge Agreement;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Pledgor and the Pledgee, for
the ratable benefit of the Banks, hereby amend, restate and replace the Existing
Pledge Agreement to read in its entirety as follows:
1. Definitions. Terms used herein and not defined in the Loan Agreement
or otherwise defined herein which are defined in the Uniform Commercial Code, as
in effect, from time to time, in The Commonwealth of Massachusetts (the "UCC")
have the respective meanings given to such terms in the UCC.
2. Pledge And Grant of Security Interest in Collateral. To secure all of
the Liabilities of the Pledgor to the Pledgee under the Loan Agreement and the
other Loan Documents, the Pledgor
<PAGE>
hereby pledges, assigns, grants to the Pledgee, for the ratable benefit of the
Banks, a continuing first priority security interest in the following, in each
case whether now owned or hereafter acquired, issued or arising (collectively,
the "Collateral"):
(a) all of the joint venture interests of the Pledgor in the Joint
Venture, whether now existing or hereafter acquired (hereinafter referred to as
the "Joint Venture Interests");
(b) all payments, dividends (whether cash or in kind, including any
dividends of additional Joint Venture Interests) and other distributions
(including but not limited to, all distribution of assets or property of the
Joint Venture in the event of a liquidation or winding up of the Joint Venture
or otherwise) received by the Joint Venture with respect to the Joint Venture
Interests, but excluding payments constituting payment for or reimbursement of
costs and expenses as provided in the Joint Venture Agreement, such payments
being referred to herein as "Cost Payments";
(c) all rights, interests, and remedies available to the Pledgor
pursuant to any of the foregoing, including but not limited to any voting or
other rights arising from the Joint Venture Interests, and under the Joint
Venture Agreement or applicable law; and
(d) all proceeds, substitutions, accessions, and replacements
(including any securities or other property in exchange therefore) of any of the
foregoing.
2.
WCC-1 Financing Statements: Certificates.
2.1 WCC-1 Financing Statements. The Pledgor shall execute and deliver
contemporaneously herewith to the Pledgee certain WCC-1 Financing Statements, in
form satisfactory to the Pledgee, and will pay all costs associated with filing
the same in all public offices wherever filing is deemed by the Pledgee to be
necessary, desirable or otherwise appropriate.
2.2 Certificates. If, at any time, the Joint Venture Interests shall be
represented by one or more joint venture certificates or other certificates of
ownership or any other similar documents, the Pledgor shall promptly deliver
such certificates, or other documents to the Pledgee, accompanied by transfer
powers endorsed in blank respecting such certificates or documents, duly
executed, with signatures guaranteed if requested by the Pledgee.
3. Representations. Warranties and Covenants. The Pledgor hereby
represents, warrants and covenants to the Pledgee the following:
3.1 Locations: Supplemental Information Regarding Pledgor. The
Pledgor's principal place of business, chief executive office and mailing
address is located at the address set forth at the beginning of this Agreement,
and the Pledgor does not and will not conduct any business under any trade name
or trade style other than Pledgor's legal name or such other names or styles as
may be set forth in the Loan Agreement or any of the other Loan Documents.
3.2 Title To Collateral. The Pledgor has good and marketable title to
the Joint Venture Interests, subject to no pledges, liens, security interests,
charges, options, restrictions or other encumbrances except the pledge and
security interest created by this Agreement and restrictions set forth in the
Joint Venture Agreement.
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<PAGE>
3.3 Authority. The Pledgor has full power, authority and legal right to
execute, deliver and perform its obligations under this Agreement and to pledge
and grant a security interest in all of the Collateral pursuant to this
Agreement, and the execution, delivery and performance hereof and the pledge of
and granting of a security interest in the Collateral hereunder do not
contravene any law, rule or regulation or any judgment, decree or order of any
tribunal or of any agreement or instrument to which the Pledgor is a party or by
which the Pledgor or the Pledgor's property is bound or affected or constitute a
default thereunder. The Pledgor covenants that the Pledgor will defend the
Pledgee's rights and security interest in the Joint Venture Interests against
the claims and demands of all persons whomsoever.
3.4 Transfer by Pledgor. The Pledgor will not sell, assign, transfer or
otherwise dispose of, grant any option with respect to, or pledge or grant any
security interest in or otherwise encumber or restrict any of the Collateral or
any interest therein, except as provided for in this Agreement.
3.5 Joint Venture Agreement. Attached hereto as Exhibit A is a true,
complete and correct copy of the Joint Venture Agreement, and the Joint Venture
Agreement has not been amended, modified, or rescinded and is in full force and
effect as of the date hereof. The Pledgor will not amend, modify, restate,
assign, pledge or otherwise alter any of the terms, conditions and provisions of
the Joint Venture Agreement, without the prior written consent of the Pledgee;
provided, however, that, prior to the occurrence of a default under any of the
Loan Documents, the Pledgor may, without such consent, make or agree to any such
amendment, modification or alternation that the Pledgor reasonably believes is
in the best interest of the Pledgor and does not materially affect either the
security interest granted by the Pledgor to the Pledgee hereunder or the ability
of the Pledgor to make payments required to be made to the Pledgee under the
Loan Documents.
4. No Joint Venture Liability. The foregoing pledge and security
interest is for collateral purposes only and, to the fullest extent permitted by
law, the Piedgee shall not, either by virtue hereof or by its receipt of
distributions from or by virtue of the exercise of any of its rights hereunder,
be deemed to be a joint venturer of the Joint Venture or to have any liability
for the debts, obligations or liabilities of the Joint Venture, the Pledgor or
any other participant in the Joint Venture, or to have any obligation to make
capital contributions to, perform any services for, or discharge any duties of a
joint venturer of the Joint Venture.
5. Liquidation. Recapitalization. Etc.
5.1 Any sums or other property paid or distributed upon or with respect
to the Joint Venture Interests, whether by dividend or redemption or upon the
liquidation or dissolution of the Joint Venture (but excluding Cost Payments),
shall, except to the limited extent provided in Section 6, be paid over and
delivered to the Pledgee to be held by the Pledgee as security for the payment
and performance in full of all of the Liabilities. In case, pursuant to the
recapitalization or reclassification of the Joint Venture or pursuant to the
reorganization thereof, any distribution of capital shall be made on or in
respect of any of the Joint Venture Interests or any property shall be
distributed upon or with respect to any of the Joint Venture Interests, the
property so distributed shall be delivered to the Pledgee to be held by it as
security for the Liabilities. Except to the limited extent provided in Section
6, all sums of money and property paid or distributed in respect of the Joint
Venture Interests, whether as a dividend or upon such a liquidation,
dissolution, recapitalization or reclassification or otherwise (but excluding
Cost Payments), that are received by the Pledgor
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<PAGE>
shall, until paid or delivered to the Pledgee, be held in trust for the Pledgee
as security for the payment and performance in full of all of the Liabilities.
5.2 All sums of money that are delivered to the Pledgee pursuant to
this Section 5 shall be deposited into an interest bearing account in the name
of the Pledgee (the "Cash Collateral Account"). Some or all of the funds from
time to time in the Cash Collateral Account may be invested in time deposits,
certificates of deposit issued by a bank, or U.S. government obligations (such
time deposits, certificates of deposit or U.S. Government obligations being
hereinafter referred to, collectively, as "Cash Amounts"), that are satisfactory
to both the Pledgee and the Pledgor. Interest earned on the Cash Collateral
Account and on the Cash Amounts shall be deposited in the Cash Collateral
Account. The Cash Collateral Account, all sums from time to time standing to the
credit of the Cash Collateral Account, any and all Cash Amounts, any and all
instruments or other writings evidencing Cash Amounts and any and all proceeds
or any thereof are hereinafter referred to as the "Cash Collateral."
5.3 The Pledgor shall have no right to withdraw sums from the Cash
Collateral Account, to receive any of the Cash Collateral or to require the
Pledgee to part with the Pledgee's possession of any instruments or other
writings evidencing any Cash Amounts.
6. Distributions. Voting. Etc.. Prior to Event of Default. So long as
no Event of Default shall have occurred and be continuing, the Pledgor shall be
entitled to receive all cash dividends and distributions paid in respect of the
Joint Venture Interests, to vote the Joint Venture Interests and to give
consents, waivers and ratifications in respect of the Joint Venture Interests;
provided, however, that no vote shall be cast or consent, waiver or ratification
given by the Pledgor if the effect thereof would or be inconsistent with or
result in any violation of any of the provisions of the Loan Agreement or this
Agreement. All such rights of the Pledgor to receive cash dividends and
distributions shall cease in case an Event of Default shall have occurred and be
continuing. All such rights of the Pledgor to vote and give consents, waivers
and ratifications with respect to the Joint Venture Interests shall, at the
Pledgee's option, as evidenced by the Pledgee's notifying the Pledgor of such
election, cease in case an Event of Default shall have occurred and be
continuing.
7. Remedies Following Default or Event of Default. If a Default or an
Event of Default shall occur and be continuing, the Pledgee shall thereafter
have the following rights and remedies (to the extent permitted by applicable
law) in addition to the rights and remedies of a secured party under the Uniform
Commercial Code, as adopted and in effect in the Commonwealth of Massachusetts
in Massachusetts General Laws, Chapter 106, Section 1-101, ~ seq. ("UCC"), all
such rights and remedies being cumulative, not exclusive, and enforceable
alternately, successively or concurrently, at such time or times as the Pledgee
deems expedient:
(a) if the Pledgee so elects and gives notice of such election to the
Pledgor, the Pledgee may vote any or all of the Joint Venture Interests (whether
or not the same shall have been transferred into its name or the name of its
nominee or nominees) and give all consents, waivers and ratification in respect
of the Joint Venture Interests and otherwise act with respect thereto as though
it was the outright owner thereof (the Pledgor hereby irrevocably appoints the
Pledgee the proxy and attorney-in-fact of the Pledgor, with full power of
substitution, to do so);
(b) the Pledgee may demand, sue for, collect or make any compromises or
settlement which it deems suitable in respect of the Collateral;
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<PAGE>
(c) the Pledgee may sell, resell, assign and deliver or otherwise
dispose of any or all of the Collateral, for cash or credit or both and upon
such terms, at such place or places and at such time or times and to such
persons as the Pledgee deems expedient, all without demand for performance by
the Pledgor or any notice or advertisement whatsoever except such as may be
required by law; and
(d) the Pledgee may cause all or any part of the Collateral held by it
to be transferred into its name or the name of its nominee or nominees.
The Pledgor recognizes that the Pledgee may be unable to effect a
public sale of the Joint Venture Interests by reason of certain prohibitions
contained in the Securities Act of 1933, as amended, or any applicable state
securities laws, but may be compelled to resort to one or more private sales
thereof to a restricted group of purchasers who will be obliged to agree, among
other things, to acquire such securities for their own account, for investment
and not with a view to the distribution or resale thereof. The Pledgor agrees
that any such private sales may be at prices and on other reasonable terms less
favorable to the seller than if sold at public sales and that such private sales
shall be deemed to have been made in a commercially reasonable manner. The
Pledgee shall be under no obligation to delay a sale of any of the Joint Venture
Interests for the period of time necessary to permit the issuer of such
securities to register such securities for public sale under the Securities Act
of 1933, as amended, even if the issuer would agree to do so.
The Pledgor hereby agrees that the sending of ten (10) days' notice by
certified mail return receipt requested, postage prepaid, to the Pledgor's
address set forth at the head of this Agreement of the place and time of any
public sale or of the time after which any private sale or other intended
disposition is to be made, shall be deemed reasonable notice thereof. To the
extent permitted by law, the Pledgee may enforce its rights hereunder without
any other notice and without compliance with any other condition precedent now
or hereafter imposed by statute, rule of law or otherwise (all of which are
hereby expressly waived by the Pledgor). If any of the Collateral is sold by the
Pledgee upon credit or for future delivery, the Pledgee shall not be liable for
the failure of the purchaser to pay for the same and in such event the Pledgee
may resell such Collateral. The Pledgee may buy any part or all of the
Collateral at any public sale and if any part or all of the Collateral is of a
type customarily sold in a recognized market or is of the type which is the
subject of widely-distributed standard price quotations, the Pledgee may buy at
private sale and may make payments thereof by any means. The Pledgee may apply
the cash proceeds actually received from any sale or other disposition to the
reasonable expenses of retaking, holding, preparing for sale, selling and the
like, to reasonable attorneys' fees and all legal expenses, travel and other
expenses which may be incurred by the Pledgee in attempting to collect the
Liabilities, or any of them, or to enforce this Agreement or in the prosecution
or defense of any action or proceeding related to the subject matter of this
Agreement; and then to the Liabilities in such order as to principal or interest
remaining unpaid, including legal interest thereon, and the balance of any
expenses unpaid, as the Pledge in it sole discretion may reasonably determine,
and any surplus shall be paid to the Pledgor.
The Pledgee understands that certain state liquor laws that now or may
in the future be applicable to the Pledgor may require that certain approvals be
obtained, or certain filings be made or notices given, prior to the time at
which (i) the Joint Venture Interests may be transferred into the name of the
Pledgee or its nominee or (ii) the Pledgee may exercise control with respect to
the Joint Venture Interests if related liquor licenses are to remain in effect.
8. Costs: Legal Fees. The Pledgor agrees to pay, or to reimburse the
Pledgee, as the case may be on demand, for all fees, costs and expenses
(including attorneys' reasonable fees and expenses) incurred or paid by the
Pledgee in connection with: (a) collection of the Liabilities or the
- -- 5 --
<PAGE>
enforcement of the Pledgee's rights and remedies under this Agreement; (b) the
administration, supervision, protection of or realization on any of the
Collateral held as security for any of the Liabilities; or (c) the defense of
any action against the Pledgee with respect to the Pledgee's rights or remedies
in respect to the Collateral; and all of the foregoing fees, costs, and expenses
shall be part of the Liabilities secured by this Agreement, and may be paid by
the Pledgee, acting in its sole discretion, and added to the Liabilities, in
each case, whether or not any suit or other legal proceedings are commenced or
pending.
9. Marshalling. The Pledgee shall not be required to marshal any
present or future security for (including but not limited to this Agreement and
the Collateral), or other assurances of payment of, the Liabilities or any of
them, or to resort to such security or other assurances of payment in any
particular order. All of the Pledgee's rights hereunder and in respect of such
security and other assurances of payment shall be cumulative and in addition to
all other rights, however existing or arising. To the extent that the Pledgor
lawfully may, the Pledgor hereby agrees that the Pledgor will not invoke any law
relating to the marshalling of collateral that might cause delay in or impede
the enforcement of the Pledgee's rights under this Agreement or under any other
instrument evidencing any of the Liabilities or under which any of the
Liabilities is outstanding or by which any of the Liabilities is secured or
payment thereof is otherwise assured, and to the extent that the Pledgor
lawfully may the Pledgor hereby irrevocably waives the benefits of all such
laws.
10. Pledgor's Liabilities Not Affected. The obligations of the Pledgor
hereunder shall remain in full force and effect without regard to, and shall not
be impaired by (a) any exercise or nonexercise, or any waiver, by the Pledgee of
any right, remedy, power or privilege under or in respect of any of the
Liabilities or any security thereof (including this Agreement); (b) any
amendment to or modification of the Loan Agreement or any of the Liabilities;
(c) any amendment to or modification of any instrument (other than this
Agreement) securing any of the Liabilities; or (d) the taking of additional
security for, or any other assurances of payment of, any of the Liabilities or
the release or discharge or termination of any security or other assurances of
payment or performance for any of the Liabilities; whether or not the Pledgor
shall have notice or knowledge of any of the foregoing.
11. Further Assurances. The Pledgor will do all such acts, and will
furnish to the Pledgee all such financing statements, certificates, legal
opinions and other documents and will obtain all such governmental consents and
corporate approvals and will do or cause to be done all such other things as the
Pledgee may reasonably request from time to time in order to give full effect to
this Agreement and to secure the rights of the Pledgee hereunder. If the Pledgee
so elects, a photocopy of this Agreement may at any time and from time to time
be filed by the Pledgee as a financing statement in any recording office in any
jurisdiction.
12. Pledgee's Exoneration. Under no circumstances shall the Pledgee be
deemed to assume any responsibility for or obligation or duty with respect to
any part or all of the Collateral of any nature or kind or any matter or
proceedings arising out of or relating thereto, other than after an Event of
Default shall have occurred and be continuing, to act in a commercially
reasonable manner. The Pledgee shall not be required to take any action of any
kind to collect, preserve or protect the Pledgor or the Pledgor's rights in the
Collateral or against other parties thereto.
13. No Waiver. Etc. Neither this Agreement nor any term hereof may be
changed, waived, discharged or terminated except by a written instrument
expressly referring to this Agreement and to the provisions so modified or
limited, and executed by the party to be charged. No act, failure or delay by
the Pledgee shall constitute a waiver of the Pledgee's rights and remedies
hereunder or otherwise. No single or partial waiver by the Pledgee of any
default or right of remedy
- 6 -
<PAGE>
that the Pledgor may have shall operate a waiver of any other default, right or
remedy on a future occasion. The Pledgor hereby waives presentment, notice of
dishonor and protest of all instruments, included in or evidencing any of the
Liabilities or the Collateral, and any and all other notices and demands
whatsoever (except as expressly provided herein or in the Loan Agreement).
14. Governing Law. THIS AGREEMENT IS INTENDED TO TAKE EFFECT AS A SEALED
INSTRUMENT AND SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE COMMONWEALTH OF MASSACHUSETTS.
15. Miscellaneous. The headings of each section of this Agreement are
for convenience only and shall not define or limit the provisions thereof. This
Agreement and all rights and obligations hereunder shall be binding upon the
Pledgor and the Pledgor's respective heirs, successors and assigns, and shall
inure to the benefit of the Pledgee and the Pledgee's successors and assigns. If
any term of this Agreement shall be held to be invalid, illegal or
unenforceable, the validity of all other terms hereof shall be in no way
affected thereby, and this Agreement shall be construed and be enforceable as if
such invalid, illegal or unenforceable term had not been included herein.
16. Conflicting Provisions. In the event of any conflict between the
provisions of this Agreement and those of the Loan Agreement, the Loan Agreement
shall govern.
IN WITNESS WHEREOF, the undersigned has executed under seal this
Agreement as of the date first above written.
WITNESS: PLEDGOR:
Name: FINE HOST CORPORATION
By:
Name:
Title:
Its duly authorized officer
WITNESS: PLEDGEE:
USTRUST, as Lender and Agent
Name: By:
Michael D. O'Neill, Vice President
<PAGE>
Exhibit M
FORM OF ASSIGNMENT AND ASSUMPTION
Reference is made to that certain Third Amended and Restated Loan
Agreement (as the same may be hereafter further amended, modified, supplemented,
extended or restated from time to time, the "Loan Agreement") dated as of June
__, 1996, by and among (a) Fine Host Corporation, a Delaware corporation (the
"Borrower"), (b) certain Subsidiaries of the Borrower, (c) the Bank (hereinafter
referred to as the "Bank" when acting for itself), as Lender and Agent
thereunder (hereinafter referred to as the "Agent" when acting as Agent for the
Banks (as defined below)), (d) The Sumitomo Bank, Limited ("Sumitomo"), (e)
State Street Bank and Trust Company ("SSB"), (f) Bank of Boston Connecticut
("BBC"), (g) Mellon Bank, N.A. ("Mellon") and (h) The Bank of New York
("BNY")(the Bank, Sumitomo, SSB, BBC, Mellon and BNY, together with their
successors and assigns, are hereinafter sometimes referred to collectively as
the "Banks"). Unless otherwise defined herein, terms defined in the Loan
Agreement and used herein shall have the meanings given to them in the Loan
Agreement.
______________________ (the "Assignor") and ________________ (the
"Assignee") agree as follows:
1. The Assignor hereby irrevocably sells and assigns to the Assignee,
without recourse, to the Assignor, and the Assignee hereby irrevocably purchases
and assumes from the Assignor, without recourse, to the Assignor, as of the
Effective Date (as defined below) (but not prior to the registration of the
information contained herein in the Register pursuant to subsection 10.16 of the
Loan Agreement), a __% interest (the "Assigned Interest") in and to the
Assignor's rights and obligations under the Loan Agreement with respect to those
credit facilities contained in the Loan Agreement as are set forth on Schedule 1
(individually, an "Assigned Facility"; collectively, the "Assigned Facilities"),
in a principal amount for each Assigned Facility as set forth on Schedule 1.
2. The Assignor (a) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Loan Agreement or with respect to the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Loan Agreement, any other Loan Document or any other instrument or
document furnished pursuant thereto, other than that the Assignor has not
created any adverse claim upon the interest being assigned by it hereunder and
that such interest is free and clear of any such adverse claim; (b) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower, any of its Subsidiaries or any other
obligor or the performance or observance by the Borrower, any of its
Subsidiaries or any other obligor of any of their respective obligations under
the Loan Agreement or any other Loan Document or any other instrument or
document furnished pursuant thereto or hereto; and (c)(i) requests that the
Agent, upon request by the Assignee, exchange any attached Notes for a new Note
or Notes payable to the Assignee and (ii) if the Assignor has retained any
interest in the Assigned Facility and the Assignor holds any Notes, requests
that the Agent exchange the attached Notes for a new
<PAGE>
Note or Notes payable to the Assignor, in each case in amounts which reflect the
assignment being made hereby (and after giving effect to any other assignments
which have become effective on the Effective Date).
3. The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (b) confirms that it
has received a copy of the Loan Agreement, together with copies of the financial
statements delivered pursuant to subsection 6.1 thereof and such other documents
and information as it has deem appropriate to make its own credit analysis and
decision to enter into this Assignment and acceptance; (c) agrees that it will,
independently and without reliance upon the Assignor, the Agent or any other
Bank and based on such documents and information as it shall deemed appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under the Loan Agreement, the other Loan Documents or any other
instrument or document furnished pursuant thereto or thereto; (d) appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Loan Agreement, the other Loan Documents or
any other instrument or document furnished pursuant hereto or thereto as are
delegated to the Agent by the terms thereof, together with such powers as are
incidental thereto; and (e) agrees that it will be a party to and bound by the
provisions of the Loan Agreement and will perform in accordance with its terms
all the obligations which by the terms of the Loan Agreement are required to be
performed by it as a Bank.
4. The effective date of this Assignment and Assumption shall be
_________, 19__ (the "Effective Date"). Following the execution of this
Assignment and Assumption, it will be delivered to the Agent for acceptance by
it and recording by the Agent pursuant to the Loan Agreement, effective as of
the Effective Date (which shall not, unless otherwise agreed to by the Agent, be
earlier than five Business Days after the date of such acceptance and recording
by the Agent).
5. Upon such acceptance and recording, from and after the Effective
Date, the Agent shall make all payments in respect of the Assigned Interest
(including payments of principal, interest, fees and other amounts) to the
Assignee whether such amounts have accrued prior to the Effective Date or accrue
subsequent to the Effective Date. The Assignor and the Assignee shall make all
appropriate adjustments in payments by the Agent for periods prior to the
Effective Date or with respect to the making of this assignment directly between
themselves.
6. From and after the Effective Date, (a) the Assignee shall be a party
to the Loan Agreement and, to the extent provided in this Assignment and
Assumption, have the rights and obligations of a Bank thereunder and under the
other Loan Documents and shall be bound by the provisions thereof and (b) the
Assignor shall, to the extent provided in this Assignment and Assumption,
relinquish its rights and be released from its obligations under the Loan
Agreement.
- 2 -
<PAGE>
7. This Assignment and Assumption shall be governed by and construed in
accordance with the laws of The Commonwealth of Massachusetts.
8. This Agreement may be executed by one or more of the parties to this
Agreement on any number of separate counterparts (including by facsimile
transmission), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Assumption to be executed by their respective duly authorized officers.
[NAME OF ASSIGNEE] [NAME OF ASSIGNOR]
By:_____________________________ By:______________________________
Name: Name:
Title: Title:
Its duly authorized officer Its duly authorized officer
ACCEPTED: CONSENTED TO:
USTRUST, AS AGENT FINE HOST CORPORATION
By:_____________________________ By:________________________________
Name: Name:
Title: Title:
Its duly authorized officer Its duly authorized officer
<TABLE>
<CAPTION>
EXHIBIT 11
FINE HOST CORPORATION
Computation of Per Share Earnings
Three Months Ended Six Months Ended
June 26, June 28, June 26, June 28,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Income applicable to Common Stock $ 251 $ 74 $ 509 $ 282
Stock warrant accretion (260) (2) (1,300) (74)
--------- ---------- --------- --------
Net income (loss) available to Common
Stockholders $ (9) $ 72 $ (791) $ 208
========== ========== =========== ========
Weighted average number of common shares
outstanding 2,306,096 2,048,200 2,177,148 2,048,200
Average convertible Preferred shares
outstanding 939,197 890,713 939,197 805,437
Assumed conversion of:
$4.93 Warrants 391,708 211,016 387,260 211,016
$.01 Warrants - 166,956 - 166,956
$4.93 Options 17,347 7,655 16,463 7,655
$6.43 Options 53,066 5,567 48,737 5,567
$7.14 Options 4,734 - 4,253 -
$12.00 Options - - 2,370 -
--------- --------- --------- ---------
Average number of shares of Common Stock
outstanding assuming full dilution 3,712,148 3,330,107 3,575,428 3,244,831
========= ========= ========= =========
Net earnings(loss) per share assuming full dilution $ - $ .02 $ (.22) $ .06
========= ========= ========= =========
</TABLE>
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> This schedule contains Summary Financial Information extracted
from the Balance Sheet and Income Statement for the six months
ended June 26, 1996 for Fine Host Corporation, and is qualified
in its entirety by reference to such Financial Statements
</LEGEND>
<CIK> 0001011584
<NAME> FINE HOST CORP.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-25-1996
<PERIOD-START> DEC-28-1995
<PERIOD-END> JUN-26-1996
<CASH> 812
<SECURITIES> 0
<RECEIVABLES> 9,624
<ALLOWANCES> 0
<INVENTORY> 2,631
<CURRENT-ASSETS> 15,201
<PP&E> 22,808
<DEPRECIATION> 5,442
<TOTAL-ASSETS> 76,316
<CURRENT-LIABILITIES> 17,304
<BONDS> 0
0
0
<COMMON> 61
<OTHER-SE> 41,942
<TOTAL-LIABILITY-AND-EQUITY> 76,316
<SALES> 49,964
<TOTAL-REVENUES> 49,964
<CGS> 45,020
<TOTAL-COSTS> 45,020
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,522
<INCOME-PRETAX> 845
<INCOME-TAX> 336
<INCOME-CONTINUING> 509
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (791)
<EPS-PRIMARY> (0.22)
<EPS-DILUTED> (0.22)
</TABLE>
