<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 3
('FINAL AMENDMENT')
TO
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO
SECTION 14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
------------------------
POLLO TROPICAL, INC.
(NAME OF SUBJECT COMPANY)
CARROLS CORPORATION
CARROLS HOLDINGS CORPORATION
(BIDDERS)
COMMON STOCK, PAR VALUE $.01 PER SHARE
(AND ASSIGNEE INTERESTS THEREIN)
(TITLE OF CLASS OF SECURITIES)
731513 10 7
(CUSIP NUMBER OF CLASS OF SECURITIES)
ALAN VITULI
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
CARROLS CORPORATION
CARROLS HOLDINGS CORPORATION
968 JAMES STREET
SYRACUSE, NEW YORK 13203
(315) 424-0513
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON
AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDERS)
Copy To:
HOWARD S. JACOBS, ESQ.
WAYNE A. WALD, ESQ.
ROSENMAN & COLIN LLP
575 MADISON AVENUE
NEW YORK, NEW YORK 10022-2585
(212) 940-8800
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<PAGE>
TENDER OFFER
This Amendment No. 3 amends and supplements the Tender Offer Statement on
Schedule 14D-1 originally filed with the Securities and Exchange Commission on
June 10, 1998 and as amended and supplemented by Amendment No. 1 to Schedule
14D-1 on June 26, 1998 and Amendment No. 2 to Schedule 14D-1 on June 30, 1998
(as amended, the 'Statement') relating to the offer by Carrols Corporation, a
Delaware corporation (the 'Purchaser'), to purchase all of the outstanding
shares (the 'Shares') of common stock, par value $.01 per share (the 'Common
Stock') of Pollo Tropical, Inc., a Florida corporation (the 'Company'), at
$11.00 per Share, net to the seller in cash, upon the terms and subject to the
conditions set forth in the Offer to Purchase dated June 10, 1998 (the 'Offer to
Purchase'), a copy of which was attached as Exhibit (a)(1) to the Statement, and
in the related Letter of Transmittal, a copy of which was attached as Exhibit
(a)(2) to the Statement (which, together with any amendments or supplements
thereto, collectively constitute the 'Offer'). The purpose of this Amendment No.
3 is to amend and supplement the Cover Page and Items 6 and 11 of the Statement
as set forth below.
Capitalized terms not otherwise defined herein shall have the meanings set
forth in the Statement. This Amendment No. 3 constitutes the final amendment to
the Statement.
Pursuant to General Instruction F of Schedule 14D-1, this final amendment
also constitutes a filing satisfying the reporting requirement of Section 13(d)
of the Securities Exchange Act of 1934, as amended, with respect to the Shares
acquired by the Purchaser pursuant to the Offer.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY
Item 6 is hereby amended by adding the following information at the end
thereof:
(b) The Offer expired at midnight, New York City Time, on Wednesday, July
8, 1998. Pursuant to the Offer, the Purchaser accepted for payment, at a per
Share price of $11.00 (net to the seller without interest), approximately
7,890,203 Shares (approximately 95.6% of all outstanding Shares (87.2% on a
fully diluted basis)).
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS
<TABLE>
<S> <C>
(a)(1) Offer to Purchase, dated June 10, 1998.*
(a)(2) Letter of Transmittal.*
(a)(3) Letter to Brokers, Dealers, Banks, Trust Companies and Nominees.*
(a)(4) Letter for use by Brokers, Dealers, Banks, Trust Companies and Nominees to their Clients.*
(a)(5) Notice of Guaranteed Delivery.*
(a)(6) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.*
(a)(7) Press Release jointly issued by the Purchaser and the Company, dated June 4, 1998.*
(a)(8) Press Release jointly issued by the Purchaser and the Company, dated June 10, 1998.*
(a)(9) Form of Summary Advertisement, dated June 10, 1998.*
(b) Commitment Letter, dated June 1, 1998, from Chase Bank of Texas, National Association and Chase
Securities Inc. to the Purchaser.*
(b)(1) Loan Agreement, dated as of May 12, 1997, by and among the Purchaser, Texas Commerce Bank National
Association, Heller Financial, Inc., First Union National Bank of North Carolina and the Other
Lenders now or thereafter parties thereto.
(b)(2) [Amendment to Loan Agreement]
(c)(1) Agreement and Plan of Merger, dated as of June 3, 1998, by and among the Purchaser and the Company.*
(c)(2) Tender Agreement.*
(c)(3) Non-Competition Agreement.*
(d) None.
(e) Not applicable.
(f) None.
</TABLE>
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* Previously filed as an exhibit to the Statement.
2
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Date: July 9, 1998
CARROLS CORPORATION
By: /s/ JOSEPH A. ZIRKMAN
-----------------------------------
Name: Joseph A. Zirkman
Title: Vice President and General
Counsel
CARROLS HOLDINGS CORPORATION
By: /s/ JOSEPH A. ZIRKMAN
-----------------------------------
Name: Joseph A. Zirkman
Title: Vice President and General
Counsel
3
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. EXHIBIT PAGE
- -------- ---------------------------------------------------------------------------------------------------- ----
<S> <C> <C> <C>
(a)(1) -- Offer to Purchase, dated June 10, 1998*.
(a)(2) -- Letter of Transmittal.*
(a)(3) -- Letter to Brokers, Dealers, Banks, Trust Companies and Nominees*.
(a)(4) -- Letter for use by Brokers, Dealers, Banks, Trust Companies and Nominees to their Clients*.
(a)(5) -- Notice of Guaranteed Delivery.*
(a)(6) -- Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.*
(a)(7) -- Press Release jointly issued by the Purchaser and the Company, dated June 4, 1998.*
(a)(8) -- Press Release jointly issued by the Purchaser and the Company, dated June 10, 1998.*
(a)(9) -- Form of Summary Advertisement, dated June 10, 1998.*
(b) -- Commitment Letter, dated June 1, 1998, from Chase Bank of Texas, National Association and
Chase Securities Inc. to the Purchaser.*
(b)(1) -- Loan Agreement, dated as of May 12, 1997, by and among the Purchaser, Texas Commerce Bank
National Association, Heller Financial, Inc., First Union National Bank of North Carolina and
the Other Lenders now or thereafter parties thereto.
(b)(2) -- [Amendment to Loan Agreement]
(c)(1) -- Agreement and Plan of Merger, dated as of June 3, 1998, by and among the Purchaser and the
Company.*
(c)(2) -- Tender Agreement.*
(c)(3) -- Non-Competition Agreement.*
(d) -- None.
(e) -- Not applicable.
(f) -- None.
</TABLE>
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* Previously filed as an exhibit to the Statement.
4
<PAGE>
LOAN AGREEMENT
($127,000,000 ADVANCE LOAN FACILITY
AND
$25,000,000 REVOLVING LOAN FACILITY)
DATED AS OF MAY 12, 1997
AMONG
CARROLS CORPORATION,
AS BORROWER,
TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
AS AGENT AND AS A LENDER,
HELLER FINANCIAL, INC.,
AS DOCUMENTATION AGENT AND AS A LENDER,
FIRST UNION NATIONAL BANK OF NORTH CAROLINA,
AS CO-AGENT AND AS A LENDER,
AND
THE OTHER LENDERS NOW OR HEREAFTER
PARTIES HERETO
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
1. Definitions........................................................... 1
-----------
1.1 Certain Defined Terms...................................... 1
---------------------
1.2 Miscellaneous.............................................. 22
-------------
2. Commitments and Loans................................................. 22
---------------------
2.1 Loans...................................................... 22
-----
2.2 Letters of Credit.......................................... 23
-----------------
2.3 Terminations or Reductions of Commitments................. 26
------------------------------------------
2.4 Commitment Fees............................................ 27
---------------
2.5 Several Obligations........................................ 28
-------------------
2.6 Notes...................................................... 28
-----
2.7 Use of Proceeds............................................ 29
---------------
3. Borrowings, Payments, Prepayments and Interest Options................ 29
------------------------------------------------------
3.1 Borrowings................................................. 29
----------
3.2 Prepayments................................................ 29
-----------
3.3 Interest Options........................................... 32
----------------
4. Payments; Pro Rata Treatment; Computations, Etc....................... 36
------------------------------------------------
4.1 Payments................................................... 36
--------
4.2 Pro Rata Treatment......................................... 38
------------------
4.3 Certain Actions, Notices, Etc.............................. 39
------------------------------
4.4 Non-Receipt of Funds by Agent.............................. 40
-----------------------------
4.5 Sharing of Payments, Etc................................... 40
-------------------------
5. Conditions Precedent.................................................. 40
--------------------
5.1 Initial Loans and Letters of Credit........................ 40
-----------------------------------
5.2 Advance Loans.............................................. 43
-------------
5.3 All Loans and Letters of Credit............................ 44
-------------------------------
6. Representations and Warranties........................................ 45
------------------------------
6.1 Organization............................................... 45
------------
6.2 Financial Statements....................................... 45
--------------------
6.3 Enforceable Obligations; Authorization..................... 45
--------------------------------------
6.4 Other Debt................................................. 46
----------
6.5 Litigation................................................. 46
----------
6.6 Title...................................................... 46
-----
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6.7 Taxes...................................................... 46
-----
6.8 Regulations G, U and X..................................... 46
----------------------
6.9 Subsidiaries............................................... 46
------------
6.10 No Untrue or Misleading Statements......................... 47
----------------------------------
6.11 ERISA...................................................... 47
-----
6.12 Investment Company Act..................................... 47
----------------------
6.13 Public Utility Holding Company Act......................... 47
----------------------------------
6.14 Solvency................................................... 47
--------
6.15 Fiscal Year................................................ 47
-----------
6.16 Compliance................................................. 47
----------
6.17 Environmental Matters...................................... 48
---------------------
6.18 Certificate of Title Property.............................. 48
-----------------------------
6.19 Mortgaged Properties and Other Collateral;
------------------------------------------
Subsidiary Property........................................ 48
-------------------
7 Affirmative Covenants................................................. 49
---------------------
7.1 Taxes, Existence, Regulations, Property, Etc............... 49
---------------------------------------------
7.2 Financial Statements and Information....................... 49
------------------------------------
7.3 Financial Tests............................................ 50
---------------
7.4 Inspection................................................. 50
----------
7.5 Further Assurances......................................... 50
------------------
7.6 Books and Records.......................................... 51
-----------------
7.7 Insurance.................................................. 51
---------
7.8 Notice of Certain Matters.................................. 51
-------------------------
7.9 Interest Rate Risk......................................... 52
------------------
7.10 Capital Adequacy........................................... 52
----------------
7.11 ERISA Information and Compliance........................... 52
--------------------------------
7.12 Additional Security Documents.............................. 53
-----------------------------
7.13 Guaranties; Pledge of Subsidiary Stock..................... 54
--------------------------------------
8 Negative Covenants.................................................... 54
------------------
8.1 Borrowed Money Indebtedness................................ 54
---------------------------
8.2 Liens...................................................... 55
-----
8.3 Contingent Liabilities..................................... 55
----------------------
8.4 Mergers, Consolidations and Dispositions of Assets......... 55
--------------------------------------------------
8.5 Redemption, Dividends and Distributions.................... 56
---------------------------------------
8.6 Nature of Business......................................... 56
------------------
8.7 Transactions with Related Parties.......................... 56
---------------------------------
8.8 Loans and Investments...................................... 57
---------------------
8.9 Subsidiaries............................................... 57
------------
8.10 Key Agreements............................................. 57
--------------
8.11 Organizational Documents.................................. 57
------------------------
ii
<PAGE>
8.12 Certificate of Title Property.......................... 57
-----------------------------
8.13 Unfunded Liabilities................................... 57
--------------------
8.14 Acquisitions of Assets................................. 57
----------------------
8.15 Prepayment of Heller Financial......................... 58
------------------------------
9. Defaults.......................................................... 59
--------
9.1 Events of Default...................................... 59
-----------------
9.2 Right of Setoff........................................ 62
---------------
9.3 Collateral Account..................................... 62
------------------
9.4 Preservation of Security for Unmatured
--------------------------------------
Reimbursement Obligations.............................. 63
-------------------------
9.5 Remedies Cumulative.................................... 63
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10. Agent............................................................. 63
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10.1 Appointment, Powers and Immunities..................... 63
----------------------------------
10.2 Reliance............................................... 64
--------
10.3 Defaults............................................... 65
--------
10.4 Material Written Notices............................... 65
------------------------
10.5 Rights as a Lender..................................... 65
------------------
10.6 Indemnification........................................ 66
---------------
10.7 Non-Reliance on Agent and Other Lenders................ 66
---------------------------------------
10.8 Failure to Act......................................... 67
--------------
10.9 Resignation or Removal of Agent........................ 67
-------------------------------
10.10 No Partnership......................................... 67
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11. Miscellaneous..................................................... 68
-------------
11.1 Waiver................................................. 68
------
11.2 Notices................................................ 68
-------
11.3 Expenses, Etc.......................................... 68
--------------
11.4 Indemnification........................................ 69
---------------
11.5 Amendments, Etc........................................ 69
----------------
11.6 Successors and Assigns................................. 70
----------------------
11.7 Limitation of Interest................................. 73
----------------------
11.8 Survival............................................... 74
--------
11.9 Captions............................................... 74
--------
11.10 Counterparts........................................... 74
------------
11.11 Governing Law.......................................... 74
-------------
11.12 Severability........................................... 74
------------
11.13 Tax Forms.............................................. 74
---------
11.14 Conflicts Between This Agreement and the Other
----------------------------------------------
Loan Documents......................................... 75
--------------
11.15 Jury Waiver............................................ 75
-----------
11.16 Limitation on Charges; Substitute Lenders;
------------------------------------------
Non-Discrimination..................................... 75
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iii
<PAGE>
11.17 Amendment and Restatement; Renewal Notes............... 76
----------------------------------------
EXHIBITS
- --------
A -- Request for Extension of Credit
B -- Fee Simple Sites
C -- Rate Designation Notice
D -- Advance Note
E -- Revolving Note
F -- Assignment and Acceptance
G -- Compliance Certificate
H -- Lease Agreements
I -- Franchise Agreements
J -- Excluded Assets
K -- Certain Fee Sites (Financing on Sale/Leaseback Not Available)
iv
<PAGE>
LOAN AGREEMENT
--------------
THIS LOAN AGREEMENT is made and entered into as of May 12, 1997 (the
"Effective Date"), by and among CARROLS CORPORATION, a Delaware corporation
(together with its permitted successors, herein called the "Borrower"); each of
the lenders which is or may from time to time become a party hereto
(individually, a "Lender" and, collectively, the "Lenders"), HELLER FINANCIAL,
INC., as Documentation Agent, FIRST UNION NATIONAL BANK OF NORTH CAROLINA, as
Co-Agent, and TEXAS COMMERCE BANK NATIONAL ASSOCIATION ("TCB"), a national
banking association, as agent for the Lenders (in such capacity, together with
its successors in such capacity, the "Agent").
The parties hereto agree as follows:
1. Definitions.
------------
1.1 Certain Defined Terms.
----------------------
Unless a particular term, word or phrase is otherwise defined or the
context otherwise requires, capitalized terms, words and phrases used herein or
in the Loan Documents (as hereinafter defined) have the following meanings (all
definitions that are defined in this Agreement in the singular have the same
meanings when used in the plural and vice versa):
Accounts, Equipment, General Intangibles and Inventory shall have the
respective meanings assigned to them in the Uniform Commercial Code enacted in
the State of New York in force on the Effective Date.
Acquisition Package shall have the meaning ascribed to such term in
Section 5.2 hereof.
Additional Interest means the aggregate of all amounts accrued or paid
pursuant to the Notes or any of the other Loan Documents (other than interest on
the Notes at the Stated Rate) which, under applicable laws, are or may be deemed
to constitute interest on the indebtedness evidenced by the Notes.
Additional Collateral shall have the meaning ascribed to such term in
Section 7.8 hereof.
Additional Collateral Event shall have the meaning ascribed to such
term in Section 7.8 hereof.
Adjusted LIBOR means, with respect to each Interest Period applicable
to a LIBOR Borrowing, a rate per annum equal to the quotient, expressed as a
percentage, of (a) LIBOR with
<PAGE>
respect to such Interest Period divided by (b) 1.0000 minus the Eurodollar
Reserve Requirement in effect on the first day of such Interest Period.
Advance Loan means a Loan made pursuant to Section 2.1(a) hereof.
Advance Loan Availability Period means, for each Advance Loan Lender,
the period from and including the Effective Date to (but not including) the
Advance Loan Termination Date.
Advance Loan Commitment means, as to any Lender, the obligation, if
any, of such Lender to make Advance Loans in an aggregate principal amount at
any one time outstanding up to (but not exceeding) the amount, if any, set forth
opposite such Lender's name on the signature pages hereof under the caption
"Advance Loan Commitment", or otherwise provided for in an Assignment and
Acceptance Agreement (as the same may be reduced from time to time pursuant to
Section 2.3 hereof).
Advance Loan Commitment Percentage means, as to any Advance Loan
Lender, the percentage equivalent of a fraction the numerator of which is the
amount of such Lender's Advance Loan Commitment and the denominator of which is
the aggregate amount of the Advance Loan Commitments of all Lenders.
Advance Loan Lender means each Lender with (i) prior to the Advance
Loan Termination Date, an Advance Loan Commitment and (ii) on and after the
Advance Loan Termination Date, any outstanding Advance Loans.
Advance Loan Maturity Date means June 30, 2003.
Advance Loan Termination Date means the earlier of (a) December 31,
1999 or (b) the date specified by Agent in accordance with Section 9.1 hereof.
Advance Loan Tranche shall have the meaning ascribed to such term in
Section 2.1(a) hereof.
Advance Notes means the Notes of Borrower evidencing the Advance Loans,
in the form of Exhibit D hereto.
Affiliate means any Person controlling, controlled by or under common
control with any other Person. For purposes of this definition, "control"
(including "controlled by" and "under common control with") means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities or otherwise.
2
<PAGE>
Agreement means this Loan Agreement, as it may from time to time be
amended, modified, restated or supplemented.
Annual Audited Financial Statements means the annual financial
statements of a Person, including all notes thereto, which statements shall
include a balance sheet as of the end of such fiscal year and an income
statement and a statement of cash flows for such fiscal year, all setting forth
in comparative form the corresponding figures from the previous fiscal year, all
prepared in conformity with GAAP in all material respects, and accompanied by
the opinion of independent certified public accountants of recognized national
standing, which shall state that such financial statements present fairly in all
material respects the financial position of such Person and, if such Person has
any Subsidiaries (other than Non-Recourse Subsidiaries), its consolidated
Subsidiaries (other than Non-Recourse Subsidiaries) as of the date thereof and
the results of its operations for the period covered thereby in conformity with
GAAP. Such statements of Borrower shall be accompanied by a certificate of such
accountants that in making the appropriate audit and/or investigation in
connection with such report and opinion, such accountants did not become aware
of any Default relating to the financial tests set forth in Section 7.3 hereof
or, if in the opinion of such accountants any such Default exists, a description
of the nature and status thereof.
Applications means all applications and agreements for Letters of
Credit, or similar instruments or agreements, in Proper Form, now or hereafter
executed by any Person in connection with any Letter of Credit now or hereafter
issued or to be issued under the terms hereof at the request of any Person.
Assignment and Acceptance shall have the meaning ascribed to such term
in Section 11.6 hereof.
Bankruptcy Code means the United States Bankruptcy Code, as amended,
and any successor statute.
Base Rate means for any day a rate per annum equal to the lesser of (a)
the applicable Margin Percentage from time to time in effect plus the greater of
(1) the Prime Rate for that day and (2) the Federal Funds Rate for that day plus
1/2 of 1% or (b) the Ceiling Rate. If for any reason Agent shall have determined
(which determination shall be conclusive and binding, absent manifest error)
that it is unable to ascertain the Federal Funds Rate for any reason, including,
without limitation, the inability or failure of Agent to obtain sufficient
quotations in accordance with the terms hereof, the Base Rate shall, until the
circumstances giving rise to such inability no longer exist, be the lesser of
(a) the Prime Rate plus the applicable Margin Percentage from time to time in
effect or (b) the Ceiling Rate.
Base Rate Borrowing means that portion of the principal balance of the
Loans at any time bearing interest at the Base Rate.
3
<PAGE>
BKC means Burger King Corporation, a Florida corporation.
BKC Consents means, collectively, (i) the Intercreditor Agreement dated
concurrently herewith executed by and among BKC, Borrower, Carrols Holdings and
Agent and (ii) all other Intercreditor Agreements now or hereafter executed by
BKC relating to any of the Mortgaged Properties or Excluded Assets, as the same
may from time to time be amended, modified, supplemented or restated.
Borrowed Money Indebtedness means, with respect to any Person, without
duplication, (i) all obligations of such Person for borrowed money, (ii) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, (iii) all obligations of such Person under conditional sale or
other title retention agreements relating to Property purchased by such Person,
(iv) all obligations of such Person issued or assumed as the deferred purchase
price of property or services (excluding obligations of such Person to creditors
for raw materials, inventory, services and supplies and deferred payments for
services to employees and former employees incurred in the ordinary course of
such Person's business), (v) all capital lease obligations of such Person, (vi)
all obligations of others secured by any lien on property or assets owned or
acquired by such Person, whether or not the obligations secured thereby have
been assumed, (vii) Interest Rate Risk Indebtedness of such Person, (viii) all
obligations of such Person in respect of outstanding letters of credit issued
for the account of such Person and (ix) all guarantees of such Person.
Business Day means any day other than a day on which commercial banks
are authorized or required to close in New York City, New York or Houston,
Texas.
Capital Expenditures means, with respect to any Person for any period,
expenditures in respect of fixed or capital assets by such Person, including
capital lease obligations incurred during such period (to the extent not already
included), which would be reflected as additions to Property, plant or equipment
on a balance sheet of such Person and its consolidated Subsidiaries (other than
Non-Recourse Subsidiaries), if any, prepared in accordance with GAAP; but
excluding expenditures during such period for the repair or replacement of any
fixed or capital asset which was destroyed or damaged, in whole or in part, to
the extent financed by the proceeds of an insurance policy maintained by such
Person.
Carrols Holdings means Carrols Holdings Corporation, a Delaware
corporation.
Ceiling Rate means, on any day, the maximum nonusurious rate of
interest permitted for that day by whichever of applicable federal or New York
(or any jurisdiction whose usury laws are deemed to apply to the Notes or any
other Loan Documents despite the intention and desire of the parties to apply
the usury laws of the State of New York) laws permits the higher interest rate,
stated as a rate per annum. On each day, if any, that Chapter One establishes
the Ceiling Rate, the Ceiling Rate shall be the "indicated rate ceiling" (as
defined in Chapter One) for that
4
<PAGE>
day. Agent may from time to time, as to current and future balances, implement
any other ceiling under Chapter One by notice to Borrower, if and to the extent
permitted by Chapter One. Without notice to Borrower or any other person or
entity, the Ceiling Rate shall automatically fluctuate upward and downward as
and in the amount by which such maximum nonusurious rate of interest permitted
by applicable law fluctuates.
Chapter One means Chapter One of Title 79, Texas Revised Civil
Statutes, 1925, as amended.
Code means the Internal Revenue Code of 1986, as amended, as now or
hereafter in effect, together with all regulations, rulings and interpretations
thereof or thereunder by the Internal Revenue Service.
Collateral means all Property, tangible or intangible, real, personal
or mixed, now or hereafter subject to the Security Documents.
Compliance Certificate shall have the meaning given to it in Section
7.2 hereof.
Controlled Group means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with Borrower, are treated as a single employer
under Section 414 of the Code.
Corporation means any corporation, limited liability company,
partnership, joint venture, joint stock association, business trust and other
business entity.
Cover for Letter of Credit Liabilities shall be effected by paying to
Agent immediately available funds, to be held by Agent in a collateral account
maintained by Agent at its Principal Office and collaterally assigned as
security for the financial accommodations extended pursuant to this Agreement
using documentation reasonably satisfactory to Agent, in the amount required by
any applicable provision hereof. Such amount shall be retained by Agent in such
collateral account until such time as in the case of the Cover being provided
pursuant to Sections 2.2(a) or 9.3 hereof, the applicable Letter of Credit shall
have expired and the Reimbursement Obligations, if any, with respect thereto
shall have been fully satisfied; provided, however, that at such time if a
Default or Event of Default has occurred and is continuing, Agent shall not be
required to release such amount in such collateral account until such Default or
Event of Default shall have been cured or waived.
Debt means, with respect to any Person, the sum, without duplication,
of (i) all borrowings under the Notes, (ii) any obligation for Borrowed Money
Indebtedness which under GAAP would be shown on the balance sheet of such Person
as a liability (including, without limitation, capitalized lease obligations but
excluding reserves for deferred income taxes, deferred pension liability and
other deferred expenses and reserves), (iii) Indebtedness secured by any Lien
existing
5
<PAGE>
on Property owned by such Person, whether or not the Indebtedness secured
thereby shall have been assumed, (iv) guarantees by such Person of Borrowed
Money Indebtedness and endorsements (other than endorsements of negotiable
instruments for collection in the ordinary course of business) and (v) Letters
of Credit and other letters of credit (whether drawn or undrawn) for the account
of such Person.
Debt Service means, with respect to any Person for any period, the sum
of (i) Interest Expense for such period and (ii) scheduled principal payments on
obligations included within Debt for such period.
Debt Service Coverage Ratio means, as of any day, the ratio of (a)
EBITDA for the 12 months ending on such date plus rent expense of Borrower and
its consolidated Subsidiaries (other than Non-Recourse Subsidiaries) for such
12-month period to (b) Debt Service of Borrower and its consolidated
Subsidiaries (other than Non-Recourse Subsidiaries) for such 12-month period
plus rent expense of Borrower and its consolidated Subsidiaries (other than
Non-Recourse Subsidiaries) for such 12-month period.
Debt to EBITDA Ratio means, as of any day, the ratio of (a) Debt of
Borrower and its consolidated Subsidiaries (other than Non-Recourse
Subsidiaries) as of such date to (b) EBITDA for the 12 months ending on such
date; provided however, that for purposes of this ratio only, so long as
Borrower shall have delivered to Agent financial information in Proper Form
regarding the Property acquired which disclose the prior operating results of
such Property, the pro forma effect of any acquisition by Borrower or any of its
consolidated Subsidiaries (other than Non-Recourse Subsidiaries) of any Burger
King Restaurant during such 12-month period shall be included in EBITDA as if
such acquisition occurred on the first day of such period.
Default means an Event of Default or an event which with notice or
lapse of time or both would, unless cured or waived, become an Event of Default.
Dollars and $ means lawful money of the United States of America.
EBITDA means, without duplication, for any period the consolidated net
earnings (excluding any extraordinary gains or losses) of Borrower and its
consolidated Subsidiaries (other than Non-Recourse Subsidiaries) plus, to the
extent deducted in calculating consolidated net income, depreciation,
amortization, other non-cash items, Interest Expense, and federal and state
income tax expense.
Environmental Claim means any third party (including Governmental
Authorities and employees) action, lawsuit, claim or proceeding (including
claims or proceedings at common law or under the Occupational Safety and Health
Act or similar laws relating to safety of employees) which seeks to impose
liability for (i) noise; (ii) pollution or contamination of the air, surface
water, ground water or land or the clean-up of such pollution or contamination;
(iii) solid, gaseous
6
<PAGE>
or liquid waste generation, handling, treatment, storage, disposal or
transportation; (iv) exposure to Hazardous Substances; (v) the safety or health
of employees or (vi) the manufacture, processing, distribution in commerce or
use of Hazardous Substances. An "Environmental Claim" includes, but is not
limited to, a common law action, as well as a proceeding to issue, modify or
terminate an Environmental Permit, or to adopt or amend a regulation to the
extent that such a proceeding attempts to redress violations of an applicable
permit, license, or regulation as alleged by any Governmental Authority.
Environmental Liabilities includes all liabilities arising from any
Environmental Claim, Environmental Permit or Requirement of Environmental Law
under any theory of recovery, at law or in equity, and whether based on
negligence, strict liability or otherwise, including but not limited to:
remedial, removal, response, abatement, investigative, monitoring, personal
injury and damage to property or injuries to persons, and any other related
costs, expenses, losses, damages, penalties, fines, liabilities and obligations,
and all costs and expenses necessary to cause the issuance, reissuance or
renewal of any Environmental Permit including reasonable attorneys' fees and
court costs.
Environmental Permit means any permit, license, approval or other
authorization under any applicable Legal Requirement relating to pollution or
protection of health or the environment, including laws, regulations or other
requirements relating to emissions, discharges, releases or threatened releases
of pollutants, contaminants or hazardous substances or toxic materials or wastes
into ambient air, surface water, ground water or land, or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants or Hazardous Substances.
ERISA means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and all rules, regulations, rulings and
interpretations adopted by the Internal Revenue Service or the U.S. Department
of Labor thereunder.
Eurodollar Rate means for any day during an Interest Period for a LIBOR
Borrowing a rate per annum equal to the lesser of (a) the sum of (1) the
Adjusted LIBOR in effect on the first day of such Interest Period plus (2) the
applicable Margin Percentage in effect on the first day of such Interest Period
and (b) the Ceiling Rate. Each Eurodollar Rate is subject to adjustments for
reserves, insurance assessments and other matters as provided for in Section 3.3
hereof.
Eurodollar Reserve Requirement means, on any day, that percentage
(expressed as a decimal fraction and rounded, if necessary, to the next highest
one ten thousandth [.0001]) which is in effect on such day for determining all
reserve requirements (including, without limitation, basic, supplemental,
marginal and emergency reserves) applicable to "Eurocurrency liabilities," as
currently defined in Regulation D. Each determination of the Eurodollar Reserve
Requirement by Agent shall be conclusive and binding, absent manifest error, and
may be computed using any reasonable averaging and attribution method.
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Event of Default shall have the meaning assigned to it in Section 9
hereof.
Excess Cash Flow means, without duplication, for any period, (i) EBITDA
for such period less (ii) the sum of all Debt Service (other than mandatory
prepayments calculated on the basis of Excess Cash Flow), voluntary prepayments,
federal and state income taxes actually paid, Investments of the nature
described in clause (f) of the definition of "Permitted Investments" made by
Borrower and its consolidated Subsidiaries (other than Non-Recourse
Subsidiaries) during such period and unfinanced Capital Expenditures (including
the unfinanced portion of Properties acquired), in each case for Borrower and
its consolidated Subsidiaries (other than Non-Recourse Subsidiaries) for such
period.
Excluded Assets means leasehold estates with respect to which BKC is
the lessor and the sites described on Exhibit J hereto.
Federal Funds Rate means, for any day, a fluctuating interest rate per
annum equal for such day to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any such day which is a
Business Day, the average of the quotations for such day on such transactions
received by Agent from three Federal funds brokers of recognized standing
selected by Agent in its sole and absolute discretion.
Fee Simple Sites means the sites described on Exhibit B hereto.
Financing Statements means all such Uniform Commercial Code financing
statements as Agent shall reasonably require, in Proper Form, duly executed by
Borrower (or any other applicable Obligor) to give notice of and to perfect or
continue perfection of Agent's Liens in any applicable Collateral, as any of the
foregoing may from time to time be amended, modified, supplemented or restated.
Fixed Charge Coverage Ratio means, as of any day, the ratio of (a)
EBITDA for the 12 months ending on such day less the current portion of
federal and state income taxes actually paid during such 12-month period and
less Maintenance Capital Expenditures for such 12-month period to (b) the sum
of Debt Service of Borrower and its consolidated Subsidiaries (other than
Non-Recourse Subsidiaries) plus Permitted Dividends by Borrower for such
12-month period.
Franchise Agreements means the franchise agreements described on
Exhibit I attached hereto, as any of the same may from time to time be amended,
modified, supplemented or restated.
Funding Loss means, with respect to (a) Borrower's payment of principal
of a LIBOR Borrowing on a day other than the last day of the applicable Interest
Period; (b) Borrower's failure
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to borrow a LIBOR Borrowing on the date specified by Borrower; (c) Borrower's
failure to make any prepayment of the Loans (other than Base Rate Borrowings) on
the date specified by Borrower, or (d) any cessation of a Eurodollar Rate to
apply to the Loans or any part thereof pursuant to Section 3.3, in each case
whether voluntary or involuntary, any loss, expense, penalty, premium or
liability actually incurred by any Lender (including but not limited to any loss
or expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by any Lender to fund or maintain a Loan).
GAAP means, as to a particular Person, such accounting practice as, in
the opinion of independent certified public accountants of recognized national
standing regularly retained by such Person, conforms at the time to generally
accepted accounting principles, consistently applied for all periods after the
Effective Date so as to present fairly the financial condition, and results of
operations and cash flows, of such Person. If any change in any accounting
principle or practice is required by the Financial Accounting Standards Board,
all reports and financial statements required hereunder may be prepared in
accordance with such change so long as Borrower provides to Agent such
disclosures of the impact of such change as Agent may reasonably require. No
such change in any accounting principle or practice shall, in itself, cause a
Default or Event of Default hereunder (but Borrower, Agent and Lenders shall
negotiate in good faith to replace any financial covenants hereunder to the
extent such financial covenants are affected by such change in accounting
principle or practice).
Governmental Authority means any foreign governmental authority, the
United States of America, any State of the United States, and any political
subdivision of any of the foregoing, and any central bank, agency, department,
commission, board, bureau, court or other tribunal having jurisdiction over
Agent, any Lender, any Obligor or their respective Property.
Guaranties means, collectively, any and all other guaranties hereafter
executed in favor of Agent, for the benefit of Lenders, relating to the
Obligations, as any of them may from time to time be amended, modified, restated
or supplemented.
Hazardous Substance means petroleum products, and any hazardous or
toxic waste or substance defined or regulated as such from time to time by any
law, rule, regulation or order described in the definition of "Requirements of
Environmental Law".
Indebtedness means, without duplication, (a) all items which in
accordance with GAAP would be included in the liability section of a balance
sheet (other than trade accounts payable and accrued expenses (other than
Interest Expense) arising in the ordinary course of business) on the date as of
which Indebtedness is to be determined (excluding, to the extent applicable,
capital stock, surplus, surplus reserves and deferred credits); (b) all
guaranties, letter of credit contingent reimbursement obligations and other
contingent obligations in respect of, or any obligations to purchase or
otherwise acquire, Indebtedness of others, and (c) all Indebtedness secured by
any Lien existing on any interest of the Person with respect to which
Indebtedness is being determined
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<PAGE>
in Property owned subject to such Lien whether or not the Indebtedness secured
thereby shall have been assumed; provided, that the term "Indebtedness" shall
not mean or include any Indebtedness in respect of which monies sufficient to
pay and discharge the same in full (either on the expressed date of maturity
thereof or on such earlier date as such Indebtedness may be duly called for
redemption and payment) shall be deposited with a depository, agency or trustee
reasonably acceptable to Agent in trust for the payment thereof.
Interest Expense means, for any period, total interest expense
(including, without limitation, interest expense attributable to capitalized
leases and net costs under interest rate swap, collar, cap or similar agreements
providing interest rate protection), determined in accordance with GAAP.
Interest Options means the Base Rate and each Eurodollar Rate, and
"Interest Option" means any of them.
Interest Payment Dates means (a) for Base Rate Borrowings, June 30,
1997 and the last day of each March, June, September and December thereafter
prior to the Revolving Loan Maturity Date or the Advance Loan Maturity Date, as
the case may be, and the Revolving Loan Maturity Date or the Advance Loan
Maturity Date, as the case may be; and (b) for LIBOR Borrowings, the end of the
applicable Interest Period (and if such Interest Period exceeds three months'
duration, quarterly, commencing on the first quarterly anniversary of the first
day of such Interest Period) and the Revolving Loan Maturity Date or the Advance
Loan Maturity Date, as the case may be.
Interest Period means, for each LIBOR Borrowing, a period commencing on
the date such LIBOR Borrowing began and ending on the numerically corresponding
day which is, subject to availability as set forth in Section 3.3(c)(iii), 1, 2,
3 or 6 months thereafter, as Borrower shall elect in accordance herewith;
provided, (1) unless Agent shall otherwise consent, no Interest Period with
respect to a LIBOR Borrowing shall commence on a date earlier than five (5)
Business Days after this Agreement shall have been fully executed; (2) any
Interest Period with respect to a LIBOR Borrowing which would otherwise end on a
day which is not a LIBOR Business Day shall be extended to the next succeeding
LIBOR Business Day, unless such LIBOR Business Day falls in another calendar
month, in which case such Interest Period shall end on the next preceding LIBOR
Business Day; (3) any Interest Period with respect to a LIBOR Borrowing which
begins on the last LIBOR Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at the end of
such Interest Period) shall end on the last LIBOR Business Day of the
appropriate calendar month; (4) no Interest Period for a Revolving Loan shall
ever extend beyond the Revolving Loan Maturity Date and no Interest Period for
an Advance Loan shall ever extend beyond the Advance Loan Maturity Date, and (5)
Interest Periods shall be selected by Borrower in such a manner that the
Interest Period with respect to any portion of the Loans which shall become due
shall not extend beyond such due date.
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Interest Rate Risk Agreement means an interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or similar
arrangement entered into by Borrower for the purpose of reducing Borrower's
exposure to interest rate fluctuations and not for speculative purposes,
approved in writing by Agent (such approval not to be unreasonably withheld), as
it may from time to time be amended, modified, restated or supplemented.
Interest Rate Risk Indebtedness means all obligations and Indebtedness
of Borrower with respect to the program for the hedging of interest rate risk
provided for in any Interest Rate Risk Agreement.
Investment means the purchase or other acquisition of any securities or
Indebtedness of, or the making of any loan, advance, transfer of Property (other
than transfers in the ordinary course of business) or capital contribution to,
or the incurring of any liability (other than trade accounts payable arising in
the ordinary course of business), contingently or otherwise, in respect of the
Indebtedness of, any Person.
Issuer means the issuer (or, where applicable, each issuer) of a Letter
of Credit under this Agreement.
Key Agreements means the Franchise Agreements, the Lease Agreements,
the Senior Notes Documentation, the Underlying Lease Agreements, the Purchase
Agreements and the Material Title Documents.
Lease Agreements means the lease and sublease agreements described on
Exhibit H attached hereto, as any of the same may from time to time be amended,
modified, supplemented or restated. Except for the Excluded Assets and except
for Properties acquired after March 15, 1997 (which remain subject to the
provisions of Section 8.14(c) hereof), the leasehold estates created under the
Lease Agreements constitute a part of the real Property comprising the Mortgaged
Properties.
Legal Requirement means any law, statute, ordinance, decree,
requirement, order, judgment, rule, or regulation (or interpretation of any of
the foregoing) of, and the terms of any license or permit issued by, any
Governmental Authority, whether presently existing or arising in the future.
Lessor and Lender Estoppel Agreements means agreements executed by each
landlord and lessor under any of the Lease Agreements or any of the Underlying
Lease Agreements and by each lender under any of the Material Title Documents,
each in Proper Form, containing such consents, representations and agreements as
Agent may reasonably require, as the same may from time to time be amended,
modified, supplemented or restated.
Letter of Credit shall have the meaning assigned to such term in
Section 2.2 hereof.
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Letter of Credit Liabilities means, at any time and in respect of any
Letter of Credit, the sum of (i) the amount available for drawings under such
Letter of Credit plus (ii) the aggregate unpaid amount of all Reimbursement
Obligations at the time due and payable in respect of previous drawings made
under such Letter of Credit. For the purpose of determining at any time the
amount described in clause (i), in the case of any Letter of Credit payable in a
currency other than Dollars, such amount shall be converted by Agent to Dollars
by any reasonable method, and such converted amount shall be conclusive and
binding, absent manifest error.
LIBOR means, for each Interest Period for any LIBOR Borrowing, the rate
per annum (rounded upwards, if necessary, to the nearest 1/16th of 1%) equal to
the average of the offered quotations appearing on Telerate Page 3750 (or if
such Telerate Page shall not be available, any successor or similar service as
may be selected by Agent and Borrower) as of 10:00 a.m., Houston, Texas time (or
as soon thereafter as practicable) on the day two LIBOR Business Days prior to
the first day of such Interest Period for deposits in United States dollars
having a term comparable to such Interest Period and in an amount comparable to
the principal amount of the LIBOR Borrowing to which such Interest Period
relates. If none of such Telerate Page 3750 nor any successor or similar service
is available, then "LIBOR" shall mean, with respect to any Interest Period for
any applicable LIBOR Borrowing, the rate of interest per annum, rounded upwards,
if necessary, to the nearest 1/16th of 1%, quoted by Agent at or before 10:00
a.m., Houston, Texas time (or as soon thereafter as practicable), on the date
two LIBOR Business Days before the first day of such Interest Period, to be the
arithmetic average of the prevailing rates per annum at the time of
determination and in accordance with the then existing practice in the
applicable market, for the offering to Agent by one or more prime banks selected
by Agent in its sole discretion, in the London interbank market, of deposits in
United States dollars for delivery on the first day of such Interest Period and
having a maturity equal to the length of such Interest Period and in an amount
equal (or as nearly equal as may be) to the LIBOR Borrowing to which such
Interest Period relates. Each determination by Agent of LIBOR shall be
conclusive and binding, absent manifest error, and may be computed using any
reasonable averaging and attribution method.
LIBOR Borrowing means each portion of the principal balance of the
Loans at any time bearing interest at a Eurodollar Rate.
LIBOR Business Day means a Business Day on which transactions in United
States dollar deposits between lenders may be carried on in the London interbank
market.
Lien means any mortgage, pledge, charge, encumbrance, security
interest, collateral assignment or other lien or restriction of any kind,
whether based on common law, constitutional provision, statute or contract, and
shall include reservations, exceptions, encroachments, easements, rights of way,
covenants, conditions, restrictions and other title exceptions.
Loans means the loans provided for by Section 2.1 hereof.
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<PAGE>
Loan Documents means, collectively, this Agreement, the Notes, the
Guaranties, all Applications, the Security Documents, the BKC Consents, the
Lessor and Lender Estoppel Agreements, the Notice of Entire Agreement, all
instruments, certificates and agreements now or hereafter executed or delivered
by any Obligor to Agent or any Lender pursuant to any of the foregoing or in
connection with the Obligations or any commitment regarding the Obligations, and
all amendments, modifications, renewals, extensions, increases and
rearrangements of, and substitutions for, any of the foregoing.
Maintenance Capital Expenditures means, for any period, $20,000
multiplied by the number of restaurants which, as of the first day of such
period, had been operated by the Borrower (or the other applicable Obligor) for
a period in excess of one year.
Majority Lenders means, at any time while no Loans are outstanding,
Lenders having greater than 66-2/3% of the aggregate amount of Revolving Loan
Commitments and Advance Loan Commitments, and at any time while Loans are
outstanding, Lenders having greater than 66- 2/3% of the aggregate amount of
Advance Loans outstanding plus Revolving Loan Commitments and Advance Loan
Commitments outstanding.
Margin Percentage means (i) on any day prior to July 1, 1997, 0.75%
with respect to Base Rate Borrowings and 2.25% with respect to LIBOR Borrowings
and (ii) on and after July 1, 1997, the applicable per annum percentage set
forth at the appropriate intersection in the table shown below, based on the
Debt to EBITDA Ratio as of the last day of the most recently ended fiscal
quarter of Borrower calculated by Agent as soon as practicable after receipt by
Agent of all financial reports required under this Agreement with respect to
such fiscal quarter (including a Compliance Certificate) (provided, however,
that if the Margin Percentage is increased as a result of the reported Debt to
EBITDA Ratio, such increase shall be retroactive to the date that Borrower was
obligated to deliver such financial reports to Agent pursuant to the terms of
this Agreement and provided further, however, that if the Margin Percentage is
decreased as a result of the reported Debt to EBITDA Ratio, and such financial
reports are delivered to Agent not more than ten (10) calendar days after the
date required to be delivered pursuant to the terms of this Agreement, such
decrease shall be retroactive to the date that Borrower was obligated to deliver
such financial reports to Agent pursuant to the terms of this Agreement):
Debt to LIBOR Borrowings Base Rate Borrowings
EBITDA Ratio Margin Percentage Margin Percentage
- ------------ ----------------- -----------------
Greater than or equal to
4.00 2.50 1.00
Greater than or equal to
3.50 but less than 4.00 2.25 0.75
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Greater than or equal to
3.00 but less than 3.50 2.00 0.50
Greater than or equal to
2.50 but less than 3.00 1.75 0.25
Less than 2.50 1.50 0.00
Material Title Documents means the documents and instruments under or
pursuant to which any Lien is created or evidenced which covers all or any part
of the Mortgaged Property and which secures Borrowed Money Indebtedness or is
otherwise of a material nature or character and outside of the ordinary course
of business, as any of the same may from time to time be amended, modified,
restated or supplemented.
Maximum Advance Loan Available Amount means, at any date, an amount
equal to the aggregate of the Advance Loan Commitments.
Maximum Revolving Loan Available Amount means, at any date, an amount
equal to the aggregate of the Revolving Loan Commitments.
Mortgage means each deed of trust, mortgage or other applicable
security instrument, each in Proper Form, executed or to be executed by Borrower
(or any other applicable Obligor) in favor of Agent, covering and affecting the
Fee Simple Sites and the leasehold estates created under the Lease Agreements
(except for the Excluded Assets), and all improvements, appurtenances and
personal Property related thereto, together with additional or supplemental
security documents covering and affecting the real Property comprising the
Additional Collateral, as the same may from time to time be amended, modified,
restated or supplemented.
Mortgaged Properties means all Property of any Person, whether now
existing or hereafter acquired, which is subject to the Lien of a Mortgage or,
with the prior written consent of Agent, a Collateral Assignment of Lease.
Non-Recourse Debt means Debt or that portion of Debt of a Subsidiary of
Borrower as to which (i) neither Borrower nor any Subsidiary of Borrower (other
than a Non-Recourse Subsidiary) provides credit support or is directly or
indirectly liable and (ii) no default with respect to such Debt (including any
rights which the holders thereof may have to take enforcement action against
such Subsidiary) would permit (upon notice, lapse of time or both) any holder of
any other Debt of Borrower or any other Subsidiary of Borrower to declare a
default on such other Debt or cause the payment thereof to be accelerated or
payable prior to its stated maturity.
Non-Recourse Subsidiary means a Subsidiary of Borrower which (i) has no
Borrowed Money Indebtedness other than Non-
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Recourse Debt and (ii) has been designated as a Non-Recourse Subsidiary by the
Board of Directors of Borrower and (iii) is engaged in the business of providing
food services and (iv) is not an Obligor. Concurrently with the financial
statements required under Subsections 7.2(a) and (b) hereof, Borrower shall
identify all then current Non-Recourse Subsidiaries in a written notice to
Agent.
Notes shall have the meaning assigned to such term in Section 2.6
hereof.
Notice of Entire Agreement means a notice of entire agreement, in
Proper Form, executed by Borrower, each other Obligor and Agent, as the same may
from time to time be amended, modified, supplemented or restated.
Obligations means, as at any date of determination thereof, the sum of
the following: (i) the aggregate principal amount of Loans outstanding hereunder
on such date, plus (ii) the aggregate amount of the outstanding Letter of Credit
Liabilities hereunder on such date, plus (iii) all other outstanding
liabilities, obligations and indebtedness of any Obligor under any Loan Document
on such date.
Obligors means Borrower, Carrols Holdings and each Subsidiary of
Borrower other than Subsidiaries which are not parties to any Security Agreement
or Mortgage.
Organizational Documents means, with respect to a corporation, the
certificate of incorporation, articles of incorporation and bylaws of such
corporation; with respect to a partnership, the partnership agreement
establishing such partnership and with respect to a trust, the instrument
establishing such trust; in each case including any and all modifications
thereof as of the date of the Loan Document referring to such Organizational
Document and any and all future modifications thereof.
Past Due Rate means, on any day, a rate per annum equal to the lesser
of (i) the Ceiling Rate for that day or (ii) the Base Rate plus three percent
(3%).
PBGC means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
Permitted Dividends means (i) dividends or distributions by a
Subsidiary of Borrower to Borrower and (ii) so long as no Default or Event of
Default shall have occurred and be continuing (or would result therefrom), (a)
dividends and scheduled redemptions payable in respect of preferred stock of
Carrols Holdings under the present terms of that certain Certificate of
Amendment of Restated Certificate of Incorporation of Carrols Holdings
Corporation dated as of February 20, 1997, without amendment except as
approved by the Majority Lenders and (b) in any fiscal year, after the
calculation and payment of the required prepayment provided for in Section
3.2(b)(2), based on the preceding fiscal year's Excess Cash Flow, an amount
not exceeding 50% of such preceding fiscal year's Excess Cash Flow which may
be distributed to
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Carrols Holdings for the payment of voluntary redemptions of preferred stock
under the present terms of that certain Certificate of Amendment of Restated
Certificate of Incorporation of Carrols Holdings Corporation dated as of
February 20, 1997, without amendment except as approved by the Majority Lenders.
Permitted Investments means: (a) readily marketable securities issued
or fully guaranteed by the United States of America with maturities of not more
than one year; (b) commercial paper rated "Prime 1" by Moody's Investors
Service, Inc. or "A-1" by Standard and Poor's Ratings Services with maturities
of not more than 180 days; (c) certificates of deposit or repurchase obligations
issued by any U.S. domestic bank having capital surplus of at least $100,000,000
or by any other financial institution acceptable to Agent, all of the foregoing
not having a maturity of more than one year from the date of issuance thereof;
(d) repurchases of the stock of retiring or terminated employees (excluding Alan
Vituli) in an aggregate amount not to exceed, for the period from the date
hereof through December 31, 1997 or for any subsequent fiscal year, the lesser
of (x) $1,500,000 or (y) the sum of $500,000 plus any prior unused capacity from
prior years for permitted repurchases of stock pursuant to this clause (d), (e)
open market purchases by Borrower of Senior Notes in an aggregate amount not to
exceed $3,000,000 and (f) Investments in Non-Recourse Subsidiaries or in
entities in which Borrower's ownership interest is less than 50% and which are
engaged in the food services business so long as such Investments do not exceed,
in the aggregate after the first day of the fiscal quarter which begins
subsequent to the Effective Date to the end of the most recent fiscal quarter
ending prior to the relevant date of determination, the lesser of (x)
$15,000,000 or (y) 50% of the cumulative net income of Borrower and its
Subsidiaries (other than Non-Recourse Subsidiaries) for such period, on a
consolidated basis and determined in accordance with GAAP.
Permitted Liens means each of the following: (a) artisans' or
mechanics' Liens arising in the ordinary course of business, and Liens for
taxes, but only to the extent that payment thereof shall not at the time be due
or if due, the payment thereof is being diligently contested in good faith and
adequate reserves computed in accordance with GAAP have been set aside therefor;
(b) Liens in effect on the Effective Date and disclosed to the Lenders in the
financial statements delivered on or prior to the Effective Date pursuant to
Section 6.2 hereof, in a schedule hereto or in a Title Insurance Policy,
provided that neither the Borrowed Money Indebtedness secured thereby nor the
Property covered thereby shall increase after the Effective Date without the
prior written consent of the Majority Lenders; (c) normal encumbrances and
restrictions on title which do not secure Borrowed Money Indebtedness and which
do not have a material adverse effect on the value or utility of the applicable
Property; (d) Liens in favor of Agent or any Lender under the Loan Documents,
including, without limitation, Liens securing Interest Rate Risk Indebtedness
owed to one or more of the Lenders (but not to any Person which is not, at such
time, a Lender); (e) Liens incurred or deposits made in the ordinary course of
business (1) in connection with workmen's compensation, unemployment insurance,
social security and other like laws, or (2) to secure insurance in the ordinary
course of business, the performance of bids, tenders, contracts, leases,
licenses, statutory obligations, surety, appeal and performance bonds and other
similar
16
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obligations incurred in the ordinary course of business, not, in any of the
cases specified in this clause (2), incurred in connection with the borrowing of
money, the obtaining of advances or the payment of the deferred purchase price
of Property; (f) attachments, judgments and other similar Liens arising in
connection with court proceedings, provided that the execution and enforcement
of such Liens are effectively stayed and the claims secured thereby are being
actively contested in good faith with adequate reserves made therefor in
accordance with GAAP; (g) Liens imposed by law, such as carriers',
warehousemen's, mechanics', materialmen's and vendors' liens, incurred in good
faith in the ordinary course of business and securing obligations which are not
yet due or which are being contested in good faith by appropriate proceedings if
adequate reserves with respect thereto are maintained in accordance with GAAP;
(h) zoning restrictions, easements, licenses, reservations, provisions,
covenants, conditions, waivers, and restrictions on the use of Property, and
which do not in any case singly or in the aggregate materially impair the
present use or value of the Property subject to any such restriction or
materially interfere with the ordinary conduct of the business of any Obligor;
(i) Liens disclosed in the Title Insurance Policies delivered pursuant to
Section 5.1(l) hereof; (j) Liens securing purchase money Indebtedness permitted
under Section 8.1 hereof and covering the Property so purchased; (k) capital
leases and sale/leaseback transactions permitted under the other provisions of
this Agreement, and (l) extensions, renewals and replacements of Liens referred
to in clauses (a) through (k) of this definition; provided that any such
extension, renewal or replacement Lien shall be limited to the Property or
assets covered by the Lien extended, renewed or replaced and that the Borrowed
Money Indebtedness secured by any such extension, renewal or replacement Lien
shall be in an amount not greater than the amount of the Indebtedness secured by
the Lien extended, renewed or replaced.
Person means any individual, Corporation, trust, unincorporated
organization, Governmental Authority or any other form of entity.
Plan means an employee pension benefit plan which is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of the
Code and is either (a) maintained by Borrower or any member of the Controlled
Group for employees of Borrower or any member of the Controlled Group or (b)
maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and to which
Borrower or any member of the Controlled Group is then making or accruing an
obligation to make contributions or has within the preceding five plan years
made contributions.
Prime Rate means, on any day, the prime rate for that day as determined
from time to time by TCB. The Prime Rate is a reference rate and does not
necessarily represent the lowest or best rate or a favored rate, and TCB, Agent
and each Lender disclaims any statement, representation or warranty to the
contrary. TCB, Agent or any Lender may make commercial loans or other loans at
rates of interest at, above or below the Prime Rate.
Principal Office means the principal office of Agent, presently located
at 712 Main Street, Houston, Harris County, Texas 77002.
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Proper Form means in form and substance reasonably satisfactory to
Agent.
Property means any interest in any kind of property or asset, whether
real, personal or mixed, tangible or intangible.
Purchase Agreements means, collectively, each purchase agreement
heretofore or hereafter entered into by Borrower or any other Obligor providing
for the acquisition of Burger King restaurants, as any of the same may from time
to time be amended, modified, restated or supplemented.
Quarterly Dates means the last day of each March, June, September and
December, provided that if any such date is not a Business Day, then the
relevant Quarterly Date shall be the next succeeding Business Day.
Quarterly Financial Statements means the quarterly financial statements
of a Person, which statements shall include a balance sheet as of the end of
such fiscal quarter and an income statement and a statement of cash flows for
such fiscal quarter and for the fiscal year to date, subject to normal year-end
adjustments, all setting forth in comparative form the corresponding figures as
of the end of and for the corresponding fiscal quarter of the preceding year,
prepared in accordance with GAAP in all material respects except that such
statements are condensed and exclude detailed footnote disclosures and certified
by the chief financial officer or other authorized officer of such Person as
fairly presenting, in all material respects, the financial condition of such
person as of such date.
Rate Designation Date means that Business Day which is (a) in the case
of Base Rate Borrowings, 10:00 a.m., Houston, Texas time, on the date one
Business Day preceding the date of such borrowing and (b) in the case of LIBOR
Borrowings, 10:00 a.m., Houston, Texas time, on the date three LIBOR Business
Days preceding the first day of any proposed Interest Period.
Rate Designation Notice means a written notice substantially in the
form of Exhibit C.
Regulation D means Regulation D of the Board of Governors of the
Federal Reserve System from time to time in effect and includes any successor or
other regulation relating to reserve requirements applicable to member banks of
the Federal Reserve System.
Regulatory Change means with respect to any Lender, any change on or
after the date of this Agreement in any Legal Requirement (including, without
limitation, Regulation D) or the adoption or making on or after such date of any
interpretation, directive or request applying to a class of lenders including
such Lender under any Legal Requirements (whether or not having the force of
law) by any Governmental Authority.
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Reimbursement Obligations means, as at any date, the obligations of
Borrower then outstanding, or which may thereafter arise, in respect of Letters
of Credit under this Agreement, to reimburse the applicable Issuers for the
amount paid by such Issuers in respect of any drawing under such Letters of
Credit, which obligations shall at all times be payable in Dollars
notwithstanding any such Letter of Credit being payable in a currency other than
Dollars.
Request for Extension of Credit means a request for extension of credit
duly executed by the chief executive officer, chief financial officer or
treasurer of Borrower, appropriately completed and substantially in the form of
Exhibit A attached hereto.
Requirements of Environmental Law means all requirements imposed by any
law (including for example and without limitation The Resource Conservation and
Recovery Act and The Comprehensive Environmental Response, Compensation, and
Liability Act), rule, regulation, or order of any federal, state or local
executive, legislative, judicial, regulatory or administrative agency, board or
authority in effect at the applicable time which relate to (i) noise; (ii)
pollution, protection or clean-up of the air, surface water, ground water or
land; (iii) solid, gaseous or liquid waste generation, treatment, storage,
disposal or transportation; (iv) exposure to Hazardous Substances; (v) the
safety or health of employees or (vi) regulation of the manufacture, processing,
distribution in commerce, use, discharge or storage of Hazardous Substances.
Revolving Loan means a Loan made pursuant to Section 2.1(b) hereof.
Revolving Loan Availability Period means, for each Revolving Loan
Lender, the period from and including the Effective Date to (but not including)
the Revolving Loan Termination Date.
Revolving Loan Lender means each Lender with (i) prior to the Revolving
Loan Termination Date, a Revolving Loan Commitment and (ii) on and after the
Revolving Loan Termination Date, any outstanding Revolving Loan Obligations.
Revolving Loan Commitment means, as to any Lender, the obligation, if
any, of such Lender to make Revolving Loans and incur or participate in Letter
of Credit Liabilities in an aggregate principal amount at any one time
outstanding up to (but not exceeding) the amount, if any, set forth opposite
such Lender's name on the signature pages hereof under the caption "Revolving
Loan Commitment", or otherwise provided for in an Assignment and Acceptance
Agreement (as the same may be reduced from time to time pursuant to Section 2.3
hereof).
Revolving Loan Commitment Percentage means, as to any Revolving Loan
Lender, the percentage equivalent of a fraction the numerator of which is the
amount of such Lender's Revolving Loan Commitment and the denominator of which
is the aggregate amount of the Revolving Loan Commitments of all Lenders.
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Revolving Loan Maturity Date means the maturity of the Revolving Notes,
December 31, 2001. Upon written request from Borrower at any time after July 31,
2001 but prior to September 30, 2001, Agent shall make request on the Lenders
for approval to a one (1) year extension of the Revolving Loan Maturity Date;
provided, however, that no such extension shall be effective without the
unanimous written consent of the Lenders, which may be given or denied in their
sole discretion, with or without cause.
Revolving Loan Obligations means, as at any date of determination
thereof, the sum of the following (determined without duplication): (i) the
aggregate principal amount of Revolving Loans outstanding hereunder plus (ii)
the aggregate amount of the Letter of Credit Liabilities hereunder.
Revolving Loan Termination Date means the earlier of (a) the Revolving
Loan Maturity Date or (b) the date specified by Agent in accordance with Section
9.1 hereof.
Revolving Notes means the Notes of Borrower evidencing the Revolving
Loans, in the form of Exhibit E hereto.
Secretary's Certificate means a certificate, in Proper Form, of the
Secretary or an Assistant Secretary of a corporation as to (a) the resolutions
of the Board of Directors of such corporation authorizing the execution,
delivery and performance of the documents to be executed by such corporation;
(b) the incumbency and signature of the officer of such corporation executing
such documents on behalf of such corporation, and (c) the Organizational
Documents of such corporation.
Security Agreements means security agreements, each in Proper Form,
executed or to be executed by Borrower (or any other applicable Obligor) in
favor of Agent, as the same may from time to time be amended, modified, restated
or supplemented.
Security Documents means, collectively, the Mortgages, the Security
Agreements and any and all other security documents now or hereafter executed
and delivered by any Obligor to secure all or any part of the Obligations, as
any of them may from time to time be amended, modified, restated or
supplemented.
Senior Notes means those certain 11-1/2% Senior Notes Due 2003 dated
August 17, 1993 issued in the aggregate principal amount of $110,000,000,
together with all renewals, extensions, modifications and replacements thereof
and substitutions therefor.
Senior Notes Documentation means the Senior Notes and the Indenture
pursuant to which the Senior Notes are issued together with all documents and
instruments now or hereafter executed in connection with the Senior Notes, as
any of them may from time to time be amended, modified, restated or
supplemented.
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Stated Rate means the effective weighted per annum rate of interest
applicable to the Loans; provided, that if on any day such rate shall exceed the
Ceiling Rate for that day, the Stated Rate shall be fixed at the Ceiling Rate on
that day and on each day thereafter until the total amount of interest accrued
at the Stated Rate on the unpaid principal balances of the Notes plus the
Additional Interest equals the total amount of interest which would have accrued
if there had been no Ceiling Rate. If the Notes mature (or are prepaid) before
such equality is achieved, then, in addition to the unpaid principal and accrued
interest then owing pursuant to the other provisions of the Loan Documents,
Borrower promises to pay on demand to the order of the holder of each Note
interest in an amount equal to the excess (if any) of (a) the lesser of (i) the
total interest which would have accrued on such Note if the Stated Rate had been
defined as equal to the Ceiling Rate from time to time in effect and (ii) the
total interest which would have accrued on such Note if the Stated Rate were not
so prohibited from exceeding the Ceiling Rate, over (b) the total interest
actually accrued on such Note to such maturity (or prepayment) date. Without
notice to Borrower or any other Person, the Stated Rate shall automatically
fluctuate upward and downward in accordance with the provisions of this
definition.
Subsidiary means, as to a particular parent Corporation, any
Corporation of which more than 50% of the indicia of equity rights (whether
outstanding capital stock or otherwise) is at the time directly or indirectly
owned by, such parent Corporation.
Taxes shall have the meaning ascribed to it in Section 4.1(d).
Texas Credit Code means Title 79, Texas Revised Civil Statutes, 1925,
as amended.
270 Day Period means any period of 270 days designated by Agent which
includes the closing date for the acquisition of the applicable Property by
Borrower or any other Obligor.
Title Insurance Policies means, collectively, the policies of title
insurance, in Proper Form, in face amounts satisfactory to Agent, issued in
favor of Agent by a title insurance company satisfactory to Agent and insuring
that title to the Mortgaged Properties is vested in Borrower, free and clear of
any Lien other than Permitted Liens and that each Mortgage creates a valid first
and prior lien on all the Mortgaged Properties affected by such Mortgage,
subject only to such exceptions as may be approved by Agent, together with any
endorsements thereto reasonably requested by Agent. Each of said policies shall
contain a complete and accurate description of the applicable Mortgages, shall
specify the recording and filing information applicable to it and shall describe
the Mortgaged Properties identically to the description thereof in such
Mortgage.
Underlying Lease Agreements means any and all lease agreements (other
than the Lease Agreements) now or hereafter affecting any of the Property
covered by any of the Lease Agreements and which is superior to the applicable
Lease Agreement, as any of the same may from time to time be amended, modified,
supplemented or restated.
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Unfunded Liabilities means, with respect to any Plan, at any time, the
amount (if any) by which (a) the present value of all benefits under such Plan
exceeds (b) the fair market value of all Plan assets allocable to such benefits,
all determined as of the then most recent actuarial valuation report for such
Plan, but only to the extent that such excess represents a potential liability
of any member of the Controlled Group to the PBGC or a Plan under Title IV of
ERISA. With respect to multi-employer Plans, the term "Unfunded Liabilities"
shall also include contingent liability for withdrawal liability under Section
4201 of ERISA to all multi-employer Plans to which Borrower or any member of a
Controlled Group for employees of Borrower contributes in the event of complete
withdrawal from such plans.
1.2 Miscellaneous. The words "hereof," "herein," and "hereunder"
and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not any particular provision of this Agreement. The
term "annualized" as used herein shall mean the multiplication of the applicable
amount for any given period by a fraction, the numerator of which is 365 and the
denominator of which is the number of days elapsed in such period.
2. Commitments and Loans.
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2.1 Loans. Each Lender severally agrees, subject to all of the
terms and conditions of this Agreement (including, without limitation, Sections
5.1, 5.2 and 5.3 hereof), to make Loans as follows:
(a) Advance Loans. From time to time on or after the Effective
Date and during the applicable Advance Loan Availability Period, each Advance
Loan Lender shall make loans under this Section 2.1(a) to Borrower in an
aggregate principal amount at any one time outstanding up to but not exceeding
such Lender's Advance Loan Commitment Percentage of the Maximum Advance Loan
Available Amount. Advance Loans shall be made in separate groupings or tranches
(each an "Advance Loan Tranche"), each of which shall (unless the Majority
Lenders shall otherwise consent in writing to a lower amount) be in an amount
not less than the lesser of (i) $10,000,000 or (ii) the aggregate unused Advance
Loan Commitments. Unless the Majority Lenders shall otherwise consent in
writing, there shall be no more than ten (10) Advance Loan Tranches made during
the term of this Agreement.
(b) Revolving Loans. From time to time on or after the Effective
Date and during the applicable Revolving Loan Availability Period, each
Revolving Loan Lender shall make loans under this Section 2.1(b) to Borrower in
an aggregate principal amount at any one time outstanding (including its
Revolving Loan Commitment Percentage of all Letter of Credit Liabilities at such
time) up to but not exceeding such Lender's Revolving Loan Commitment Percentage
of the Maximum Revolving Loan Available Amount. Subject to the conditions in
this Agreement, any such Revolving Loan repaid prior to the Revolving Loan
Termination Date may be reborrowed pursuant to the terms of this Agreement;
provided, that any and all such Revolving Loans shall be due and payable in full
at the end of the Revolving Loan Availability Period. Borrower, Agent
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and the Lenders agree that Chapter 15 of the Texas Credit Code shall not apply
to this Agreement, the Revolving Notes or any Revolving Loan Obligation. The
aggregate of all Revolving Loans to be made by the Lenders in connection with a
particular borrowing shall be equal to an integral multiple of $100,000.
2.2 Letters of Credit.
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(a) Letters of Credit. Subject to the terms and conditions of this
Agreement, and on the condition that aggregate Letter of Credit Liabilities
shall never exceed $5,000,000, (i) Borrower shall have the right to, in addition
to Loans provided for in Section 2.1 hereof, utilize the Revolving Loan
Commitments from time to time during the Revolving Loan Availability Period by
obtaining the issuance of standby letters of credit for the account of Borrower
if Borrower shall so request in the notice referred to in Section 2.2(b)(i)
hereof (such standby letters of credit as any of them may be amended,
supplemented, extended or confirmed from time to time, being herein collectively
called the "Letters of Credit)" and (ii) TCB agrees to issue such Letters of
Credit. Upon the date of the issuance of a Letter of Credit, the applicable
Issuer shall be deemed, without further action by any party hereto, to have sold
to each Revolving Loan Lender, and each such Lender shall be deemed, without
further action by any party hereto, to have purchased from the applicable
Issuer, a participation, to the extent of such Lender's Revolving Loan
Commitment Percentage, in such Letter of Credit and the related Letter of Credit
Liabilities, which participation shall terminate on the earlier of the
expiration date of such Letter of Credit or the applicable Termination Date. No
Letter of Credit shall have an expiration date later than one year from date of
issuance. Any Letter of Credit that shall have an expiration date after the end
of the Revolving Loan Availability Period shall be subject to Cover or backed by
a standby letter of credit in form and substance, and issued by a Person,
acceptable to Agent in its sole discretion. TCB or, with the prior approval of
Borrower and Agent, another Lender shall be the Issuer of each Letter of Credit.
(b) Additional Provisions. The following additional provisions
shall apply to each Letter of Credit:
(i) Borrower shall give Agent notice requesting each
issuance of a Letter of Credit hereunder as provided in Section 4.3
hereof and shall furnish such additional information regarding such
transaction as Agent may reasonably request. Upon receipt of such
notice, Agent shall promptly notify each Revolving Loan Lender of the
contents thereof and of such Lender's Revolving Loan Commitment
Percentage of the amount of such proposed Letter of Credit.
(ii) No Letter of Credit may be issued if after giving
effect thereto the sum of (A) the aggregate outstanding principal
amount of Revolving Loans plus (B) the aggregate Letter of Credit
Liabilities would exceed the Maximum Revolving Loan Available Amount.
On each day during the period commencing with the issuance of any
Letter of
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Credit and until such Letter of Credit shall have expired or been
terminated, the Revolving Loan Commitment of each Revolving Loan Lender
shall be deemed to be utilized for all purposes hereof in an amount
equal to such Lender's Revolving Loan Commitment Percentage of the
amount then available for drawings under such Letter of Credit (or any
unreimbursed drawings under such Letter of Credit).
(iii) Upon receipt from the beneficiary of any Letter of
Credit of any demand for payment thereunder, Agent shall promptly
notify Borrower and each Lender as to the amount to be paid as a result
of such demand and the payment date therefor. If at any time prior to
the earlier of the expiration date of a Letter of Credit or the
applicable Termination Date any Issuer shall have made a payment to a
beneficiary of a Letter of Credit in respect of a drawing under such
Letter of Credit, each Revolving Loan Lender will pay to Agent
immediately upon demand by such Issuer at any time during the period
commencing after such payment until reimbursement thereof in full by
Borrower, an amount equal to such Lender's Revolving Loan Commitment
Percentage of such payment, together with interest on such amount for
each day from the date of demand for such payment (or, if such demand
is made after 11:00 a.m. Houston time on such date, from the next
succeeding Business Day) to the date of payment by such Lender of such
amount at a rate of interest per annum equal to the Federal Funds Rate
for such period. To the extent that it is ultimately determined that
the Borrower is relieved of its obligation to reimburse the applicable
Issuer because of such Issuer's gross negligence or willful misconduct
in determining that documents received under any applicable Letter of
Credit comply with the terms thereof, the applicable Issuer shall be
obligated to refund to the paying Lenders all amounts paid to such
Issuer to reimburse Issuer for the applicable drawing under such Letter
of Credit.
(iv) Borrower shall be irrevocably and unconditionally
obligated forthwith to reimburse Agent, on the date on which the Agent
notifies Borrower of the date and amount of any payment by the Issuer
of any drawing under a Letter of Credit, for the amount paid by any
Issuer upon such drawing, without presentment, demand, protest or other
formalities of any kind, all of which are hereby waived. Such
reimbursement may, subject to satisfaction of the conditions in
Sections 5.1 and 5.2 hereof and to the Maximum Revolving Loan Available
Amount (after adjustment in the same to reflect the elimination of the
corresponding Letter of Credit Liability), be made by the borrowing of
Revolving Loans. Agent will pay to each Revolving Loan Lender such
Lender's Revolving Loan Commitment Percentage of all amounts received
from Borrower for application in payment, in whole or in part, of the
Reimbursement Obligation in respect of any Letter of Credit, but only
to the extent such Lender has made payment to Agent in respect of such
Letter of Credit pursuant to clause (iii) above.
(v) Borrower will pay to Agent at the Principal Office for
the account of each Revolving Loan Lender a letter of credit fee with
respect to each Letter of Credit equal to
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the greater of (x) $500 or (y) an amount equal to the Margin Percentage
applicable from time to time with respect to LIBOR Borrowings
multiplied by the daily average amount available for drawings under
each Letter of Credit (and computed on the basis of the actual number
of days elapsed in a year composed of 360 days), in each case for the
period from and including the date of issuance of such Letter of Credit
to and including the date of expiration or termination thereof, such
fee to be due and payable in advance on the date of the issuance
thereof. Agent will pay to each Revolving Loan Lender, promptly after
receiving any payment in respect of letter of credit fees referred to
in this clause (v), an amount equal to the product of such Lender's
Revolving Loan Commitment Percentage times the amount of such fees.
(vi) The issuance by the applicable Issuer of each Letter of
Credit shall, in addition to the conditions precedent set forth in
Section 5 hereof, be subject to the conditions precedent (A) that such
Letter of Credit shall be in such form and contain such terms as shall
be reasonably satisfactory to Agent, and (B) that Borrower shall have
executed and delivered such Applications and other instruments and
agreements relating to such Letter of Credit as Agent shall have
reasonably requested and are not inconsistent with the terms of this
Agreement. In the event of a conflict between the terms of this
Agreement and the terms of any Application, the terms hereof shall
control.
(vii) Issuer will send to the Borrower and each Lender,
immediately upon issuance of any Letter of Credit issued by Issuer or
any amendment thereto, a true and correct copy of such Letter of Credit
or amendment.
(c) Indemnification; Release. Borrower hereby indemnifies and
holds harmless Agent, each Revolving Loan Lender and each Issuer from and
against any and all claims and damages, losses, liabilities, costs or expenses
which Agent, such Lender or such Issuer may incur (or which may be claimed
against Agent, such Lender or such Issuer by any Person whatsoever), REGARDLESS
OF WHETHER CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE OF ANY OF THE
INDEMNIFIED PARTIES, in connection with the execution and delivery of any Letter
of Credit or transfer of or payment or failure to pay under any Letter of
Credit; provided that Borrower shall not be required to indemnify any party
seeking indemnification for any claims, damages, losses, liabilities, costs or
expenses to the extent, but only to the extent, caused by (i) the willful
misconduct or gross negligence of the party seeking indemnification, or (ii) the
failure by the party seeking indemnification to pay under any Letter of Credit
after the presentation to it of a request required to be paid under applicable
law. Borrower hereby releases, waives and discharges Agent, each Revolving Loan
Lender and each Issuer from any claims, causes of action, damages, losses,
liabilities, reasonable costs or expenses which may now exist or may hereafter
arise, REGARDLESS OF WHETHER CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE OF ANY
OF THE INDEMNIFIED PARTIES, by reason of or in connection with the failure of
any other Revolving Loan Lender to fulfill or comply with its obligations to
Agent, such Lender or such Issuer, as the case may be,
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hereunder (but nothing herein contained shall affect any rights Borrower may
have against such defaulting Lender). Nothing in this Section 2.2(c) is intended
to limit the obligations of Borrower under any other provision of this
Agreement.
(d) Additional Costs in Respect of Letters of Credit. If as a
result of any Regulatory Change there shall be imposed, modified or deemed
applicable any tax (other than any tax based on or measured by net income),
reserve, special deposit or similar requirement against or with respect to or
measured by reference to Letters of Credit issued or to be issued hereunder or
participations in such Letters of Credit, and the result shall be to increase
the cost to any Revolving Loan Lender of issuing or maintaining any Letter of
Credit or any participation therein, or materially reduce any amount receivable
by any Revolving Loan Lender hereunder in respect of any Letter of Credit or any
participation therein (which increase in cost, or reduction in amount
receivable, shall be the result of such Lender's reasonable allocation of the
aggregate of such increases or reductions resulting from such event), then such
Lender shall notify Borrower through Agent (which notice shall be accompanied by
a statement setting forth in reasonable detail the basis for the determination
of the amount due), and within 15 Business Days after demand therefor by such
Lender through Agent, Borrower shall pay to such Lender, from time to time as
specified by such Lender, such additional amounts as shall be sufficient to
compensate such Lender for such increased costs or reductions in amount. Such
statement as to such increased costs or reductions in amount incurred by such
Lender, submitted by such Lender to Borrower, shall be conclusive as to the
amount thereof, absent manifest error, and may be computed using any reasonable
averaging and attribution method. Each Lender will notify Borrower through Agent
of any event occurring after the date of this Agreement which will entitle such
Lender to compensation pursuant to this Section as promptly as practicable after
any executive officer of such Lender obtains knowledge thereof and determines to
request such compensation, and (if so requested by Borrower through Agent) will
designate a different lending office of such Lender for the issuance or
maintenance of Letters of Credit by such Lender or will take such other action
as Borrower may reasonably request if such designation or action is consistent
with the internal policy of such Lender and legal and regulatory restrictions,
can be undertaken at no additional cost, will avoid the need for, or reduce the
amount of, such compensation and will not, in the sole opinion of such Lender,
be disadvantageous to such Lender (provided that such Lender shall have no
obligation so to designate a different lending office which is not located in
the United States of America).
2.3 Terminations or Reductions of Commitments.
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(a) Mandatory. On the Revolving Loan Termination Date, all
Revolving Loan Commitments shall be terminated in their entirety. The Advance
Loan Commitments shall be automatically reduced by the amount of any Advance
Loans made and on the Advance Loan Termination Date, all Advance Loan
Commitments shall be terminated in their entirety.
(b) Optional. Borrower shall have the right to terminate or reduce
the unused portion of the Revolving Loan Commitments or Advance Loan Commitments
at any time or from time to
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time, provided that (i) Borrower shall give notice of each such termination or
reduction to Agent as provided in Section 4.3 hereof and (ii) each such partial
reduction shall be in an integral multiple of $250,000.
(c) No Reinstatement. No termination or reduction of the Revolving
Loan Commitments or the Advance Loan Commitments may be reinstated without the
written approval of Agent and the Lenders.
2.4 Commitment Fees.
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(a) Borrower shall pay to Agent for the account of each Revolving
Loan Lender revolving loan commitment fees for the period from May 20, 1997 to
and including the Revolving Loan Termination Date at a rate per annum equal to
0.375%. Such revolving loan commitment fees shall be computed (on the basis of
the actual number of days elapsed in a year composed of 360 days) on each day
and shall be based on the excess of (x) the aggregate amount of each Revolving
Loan Lender's Revolving Loan Commitment for such day over (y) the sum of (i) the
aggregate unpaid principal balance of such Lender's Revolving Note on such day
plus (ii) the aggregate Letter of Credit Liabilities as to such Lender for such
day. Accrued revolving loan commitment fees shall be payable in arrears on the
Quarterly Dates prior to the Revolving Loan Termination Date and on the
Revolving Loan Termination Date.
(b) Borrower shall pay to Agent for the account of each Advance
Loan Lender advance loan commitment fees for the period from May 20, 1997 to and
including the Advance Loan Termination Date at a rate per annum equal to 0.25%.
Such advance loan commitment fees shall be computed (on the basis of the actual
number of days elapsed in a year composed of 360 days) on each day and shall be
based on the excess of (x) the aggregate amount of each Advance Loan Lender's
Advance Loan Commitment for such day over (y) the aggregate unpaid principal
balance of such Lender's Advance Notes on such day. Accrued advance loan
commitment fees shall be payable in arrears on the Quarterly Dates prior to the
Advance Loan Termination Date and on the Advance Loan Termination Date.
(c) Concurrently with each Advance Loan made prior to November 20,
1997, Borrower shall pay to Agent for the account of each Advance Loan Lender an
additional advance loan fee in an amount equal to the Advance Loan made by such
Advance Loan Lender times 0.125% per annum calculated for a period equal to the
number of days from May 20, 1997 through the date of such Advance Loan.
Concurrently with each Advance Loan made on or after November 20, 1997, Borrower
shall pay to Agent for the account of each Advance Loan Lender an additional
advance loan fee in an amount equal to the Advance Loan made by such Advance
Loan Lender times 0.0625%.
(d) All past due fees payable under this Section shall bear
interest at the Past Due Rate.
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2.5 Several Obligations. The failure of any Lender to make any
Loan to be made by it on the date specified therefor shall not relieve any other
Lender of its obligation to make its Loan on such date, but neither Agent nor
any Lender shall be responsible or liable for the failure of any other Lender to
make a Loan to be made by such other Lender or to participate in, or co-issue,
any Letter of Credit. Notwithstanding anything contained herein to the contrary,
(a) no Lender shall be required to make or maintain Revolving Loans or Advance
Loans, as the case may be, at any time outstanding if as a result the total
Revolving Loan Obligations to or the aggregate unpaid principal balance of the
Advance Loans held by, as the case may be, such Lender shall exceed the lesser
of (1) such Lender's Revolving Loan Commitment Percentage or Advance Loan
Commitment Percentage, as the case may be, of all Revolving Loan Obligations or
Advance Loans, as the case may be, and (2) such Lender's Revolving Loan
Commitment Percentage or Advance Loan Commitment Percentage, as the case may be,
of the Maximum Revolving Loan Available Amount or Maximum Advance Loan Available
Amount, as the case may be, (b) if a Revolving Loan Lender fails to make a
Revolving Loan as and when required hereunder, then upon each subsequent event
which would otherwise result in funds being paid to the defaulting Lender, the
amount which would have been paid to the defaulting Lender shall be divided
among the non-defaulting Lenders ratably according to their respective shares of
the outstanding Revolving Loan Commitment Percentages until the Revolving Loan
Obligations of each Revolving Loan Lender (including the defaulting Lender) are
equal to such Lender's Revolving Loan Commitment Percentage of the total
Revolving Loan Obligations and (c) if an Advance Loan Lender fails to make an
Advance Loan as and when required hereunder, then upon each subsequent event
which would otherwise result in funds being paid to the defaulting Lender, the
amount which would have been paid to the defaulting Lender shall be divided
among the non-defaulting Lenders ratably according to their respective shares of
the outstanding Advance Loan Commitment Percentages until the aggregate unpaid
principal balance of the Advance Loans held by each Advance Loan Lender
(including the defaulting Lender) are equal to such Lender's Advance Loan
Commitment Percentage of the aggregate amount of all Advance Loans outstanding.
2.6 Notes. The Revolving Loans made by each Lender shall be
evidenced by a single Revolving Note of Borrower in substantially the form of
Exhibit E hereto payable to the order of such Lender in a principal amount equal
to the Revolving Loan Commitment of such Lender, and otherwise duly completed.
The Advance Loans made by each Lender shall be evidenced by separate Advance
Notes (one for each Advance Loan Tranche) in substantially the form of Exhibit D
hereto each payable to the order of such Lender in a principal amount equal to
the principal amount of the applicable Advance Loan of such Lender. The
promissory notes described in this Section are each, together with all renewals,
extensions, modifications and replacements thereof and substitutions therefor,
called a "Note" and collectively called the "Notes". Each Lender is hereby
authorized by Borrower to endorse on the schedule (or a continuation thereof)
that may be attached to each Note of such Lender, to the extent applicable, the
date, amount, type of and the applicable period of interest for each Loan made
by such Lender to Borrower hereunder, and the amount of each payment or
prepayment of principal of such Loan received by such Lender,
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provided, that any failure by such Lender to make any such endorsement shall not
affect the obligations of Borrower under such Note or hereunder in respect of
such Loan.
2.7 Use of Proceeds. The proceeds of the Advance Loans shall be
used to finance up to 75% of the purchase costs incurred in connection with
permitted acquisitions by Borrower closing on or after the Effective Date
(provided, however, that an Advance Loan Tranche of up to $5,000,000 may,
subject to the terms and conditions of this Agreement, be used to refinance an
existing term loan with Heller Financial, Inc. and an Advance Loan Tranche of up
to $7,700,000 may, subject to the terms and conditions of this Agreement, be
used to refinance an existing term loan with Texas Commerce Bank National
Association) and to repurchase up to $25,000,000 of the Senior Notes if the
holders of the Senior Notes exercise a put option due to a Change of Control (as
defined in the Senior Notes Documentation) event. The proceeds of the Revolving
Loans shall be used to refinance existing Indebtedness of Borrower, to finance
permitted acquisitions by Borrower and new store development by Borrower, and
for other working capital and general corporate purposes. Neither Agent nor any
Lender shall have any responsibility as to the use of any proceeds of the Loans.
3. Borrowings, Payments, Prepayments and Interest Options.
-------------------------------------------------------
3.1 Borrowings. Borrower shall give Agent notice of each borrowing
to be made hereunder as provided in Section 4.3 hereof and Agent shall promptly
notify each Lender of such request. Not later than 11:00 a.m. Houston time on
the date specified for each such borrowing hereunder, each Lender shall make
available the amount of the Loan, if any, to be made by it on such date to Agent
at its Principal Office, in immediately available funds, for the account of
Borrower. Such amounts received by Agent will be held in an account maintained
by Borrower with Agent. The amounts so received by Agent shall, subject to the
terms and conditions of this Agreement, be made available to Borrower by wiring
or otherwise transferring, in immediately available funds, such amount to an
account designated by Borrower and approved by Agent.
3.2 Prepayments.
------------
(a) Optional Prepayments. Except as provided in Section 3.3
hereof, Borrower shall have the right to prepay, on any Business Day, in whole
or in part, without the payment of any penalty or fee, any Loans at any time or
from time to time, provided that Borrower shall give Agent notice of each such
prepayment as provided in Section 4.3 hereof. Each optional prepayment on a Loan
shall be in an amount equal to an integral multiple of $250,000. Such optional
prepayments of Advance Loans shall be applied ratably (based on outstanding
principal balances) to all Advance Notes and shall be applied to scheduled
principal installments in inverse order of their maturities.
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(b) Mandatory Prepayments and Cover. Except, in each case, as
provided in Section 3.3 hereof,
(1) Insurance Proceeds and Condemnation Awards.
-------------------------------------------
(i) Promptly following the receipt thereof by any
Obligor, Borrower shall deposit or cause to be deposited with
Agent in an interest bearing account (but without any
obligation to maximize such interest) all of the net cash
proceeds of any payment or award in excess of $250,000 made to
any Obligor under any policy of Property insurance with
respect to any of the Collateral or pursuant to any
condemnation award with respect to any of the Collateral
provided such amounts have not theretofore been reasonably
expended for the restoration or replacement of the asset in
respect of which such payment or award was made. Such amounts
shall be collaterally assigned to Agent as security for the
same portion of the Obligations as the applicable Collateral
secured in a manner reasonably acceptable to Agent. Upon
delivery to Agent of written certification by Borrower that
the applicable Obligor has reasonably expended amounts or
committed in writing to expend amounts for the restoration or
replacement of the asset in respect of which such payment or
award was made, specifying the amount expended or committed,
so long as no Default or Event of Default shall have occurred
and be continuing any such amount deposited with Agent shall
be released by Agent to Borrower; provided, however, that, in
the event that within 180 days of receipt of such payment or
award by Borrower, to the extent Borrower shall not have
certified to Agent its intention to expend an equivalent
amount for the restoration or replacement of the asset in
respect of which such payment or award was made, Borrower
shall make a prepayment on the Advance Loans (using any funds
deposited with Agent pursuant to this Section 3.2(b)(1) or
other funds) in the amount of the excess of the amount of such
payment or award over the amount of such expenditures and/or
commitment on such 180th day. Such prepayment shall be applied
to the Advance Notes secured by the applicable Collateral and
shall be applied to scheduled principal installments in
inverse order of their maturities.
(ii) In cases where the amount of the net cash
proceeds of any payment or award is equal to or less than
$250,000 and no Default or Event of Default has occurred and
is continuing, such proceeds may be paid to any Obligor, and
if received by Agent shall be paid by Agent to Borrower, for
use in paying for replacements or repairs of or substitutes
for the damaged, destroyed or taken assets.
(2) Excess Cash Flow. Within fifteen (15) Business Days after the
delivery of the Annual Audited Financial Statements pursuant to Section 7.2
hereof with respect to each fiscal year of Borrower (commencing with the fiscal
year ending on December 31,
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1997), Borrower shall make a prepayment on the Loans in an amount equal
to (i) Excess Cash Flow for such fiscal year times 50% less (ii)
optional prepayments made on the Advance Loans during such fiscal year.
The calculation of Excess Cash Flow for any fiscal year based upon the
applicable Annual Audited Financial Statements shall be conclusive,
absent manifest error. Such prepayment shall be applied first to the
unpaid principal balance of the Revolving Loans and the balance to the
Advance Notes (applied ratably (based on outstanding principal
balances) to all Advance Notes and applied to scheduled principal
installments ratably over the remaining payments).
(c) Advance Loan Amortization. The principal of each Advance Note
shall be due and payable in quarterly installments, each due on a Quarterly
Date, beginning on the second Quarterly Date following the date of the
applicable Advance Note, equal to the face amount of the applicable Advance Note
times the percentage set forth in the following table opposite the applicable
payment (to the extent such payment becomes due prior to the Advance Loan
Maturity Date):
Payment Payment Percentage
------- ------------------
first through fourth 1.50%
fifth through eighth 2.00%
ninth through twelfth 2.50%
thirteenth through sixteenth 3.00%
seventeenth through twentieth 3.50%
twenty-first through twenty-fourth 4.00%
On the Advance Loan Maturity Date, the entire unpaid principal balance of each
Advance Note and all accrued and unpaid interest on the unpaid principal balance
of each Advance Note shall be finally due and payable.
(d) Interest Payments. Accrued and unpaid interest on the unpaid
principal balance of the Loans shall be due and payable on the Interest Payment
Dates.
(e) Payments and Interest on Reimbursement Obligations. Borrower
will pay to Agent for the account of each Lender the amount of each
Reimbursement Obligation on the date on which the Agent notifies Borrower of the
date and amount of the applicable payment by the Issuer of any drawing under a
Letter of Credit. The amount of any Reimbursement Obligation may, if the
applicable conditions precedent specified in Sections 5.1 and 5.2 hereof have
been satisfied, be paid with the proceeds of Revolving Loans. Subject to Section
11.7 hereof, Borrower will pay to Agent for the account of each Lender interest
at the applicable Past Due Rate on any Reimbursement Obligation and on any other
amount payable by Borrower hereunder to or for the account of such Lender (but,
if such amount is interest, only to the extent legally allowed), which shall not
be paid in full within five (5) days after the date due (whether at stated
maturity, by
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acceleration or otherwise), for the period commencing on the expiration of such
five (5) day period until the same is paid in full.
3.3 Interest Options
----------------
(a) Options Available. The outstanding principal balance of the
Notes shall bear interest at the Base Rate; provided, that (1) all past due
amounts, both principal and accrued interest, shall bear interest at the Past
Due Rate, and (2) subject to the provisions hereof, Borrower shall have the
option of having all or any portion of the principal balances of the Notes from
time to time outstanding bear interest at a Eurodollar Rate. The records of
Agent and each of the Lenders with respect to Interest Options, Interest Periods
and the amounts of Loans to which they are applicable shall be binding and
conclusive, absent manifest error. Interest on the Loans shall be calculated at
the Base Rate except where it is expressly provided pursuant to this Agreement
that a Eurodollar Rate is to apply. Interest on the amount of each advance
against the Notes shall be computed on the amount of that advance and from the
date it is made. Notwithstanding anything in this Agreement to the contrary, for
the full term of the Notes the interest rate produced by the aggregate of all
sums paid or agreed to be paid to the holders of the Notes for the use,
forbearance or detention of the debt evidenced thereby (including all interest
on the Notes at the Stated Rate plus the Additional Interest) shall not exceed
the Ceiling Rate.
(b) Designation and Conversion. Borrower shall have the right to
designate or convert its Interest Options in accordance with the provisions
hereof. Provided no Event of Default has occurred and is continuing and subject
to the last sentence of Section 3.3(a) and the provisions of Section 3.3(c),
Borrower may elect to have a Eurodollar Rate apply or continue to apply to all
or any portion of the principal balance of the Notes. Each change in Interest
Options shall be a conversion of the rate of interest applicable to the
specified portion of the Loans, but such conversion shall not change the
respective outstanding principal balances of the Notes. The Interest Options
shall be designated or converted in the manner provided below:
(i) Borrower shall give Agent telephonic notice, promptly
confirmed by a Rate Designation Notice (and Agent shall
promptly inform each Lender thereof). Each such telephonic and
written notice shall specify the amount of the Loan and type
(i.e. Revolving Loan or Advance Loan) which is the subject of
the designation, if any; the amount of borrowings into which
such borrowings are to be converted or for which an Interest
Option is designated; the proposed date for the designation or
conversion and the Interest Period or Periods, if any,
selected by Borrower. Such telephonic notice shall be
irrevocable and shall be given to Agent no later than the
applicable Rate Designation Date.
(ii) No more than three (3) LIBOR Borrowings shall be in effect
with respect to the Revolving Loans at any time. No more than
one (1) LIBOR Borrowing shall be in effect with respect to any
Advance Loan Tranche at any time.
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(iii) Each designation or conversion of a LIBOR Borrowing shall
occur on a LIBOR Business Day.
(iv) Except as provided in Section 3.3(c) hereof, no LIBOR
Borrowing shall be converted to a Base Rate Borrowing or
another LIBOR Borrowing on any day other than the last day of
the applicable Interest Period.
(v) Each request for a LIBOR Borrowing shall be in the amount
equal to $250,000 or a multiple of $100,000 in excess thereof.
(vi) Each designation of an Interest Option with respect to the
Revolving Notes shall apply to all of the Revolving Notes
ratably in accordance with their respective outstanding
principal balances. Each designation of an Interest Option
with respect to any Advance Loan Tranche shall apply to all of
the Advance Notes executed in connection with such Advance
Loan Tranche ratably in accordance with their respective
outstanding principal balances. If any Lender assigns an
interest in any of its Notes when any LIBOR Borrowing is
outstanding with respect thereto, then such assignee shall
have its ratable interest in such LIBOR Borrowing.
(c) Special Provisions Applicable to LIBOR Borrowings.
(i) Options Unlawful. If the adoption of any applicable Legal
Requirement after the Effective Date or any change after the Effective Date in
any applicable Legal Requirement or in the interpretation or administration
thereof by any Governmental Authority or compliance by any Lender with any
request or directive (whether or not having the force of law) issued after the
Effective Date by any central bank or other Governmental Authority shall at any
time make it unlawful or impossible for any Lender to permit the establishment
of or to maintain any LIBOR Borrowing, the commitment of such Lender to
establish or maintain such LIBOR Borrowing shall forthwith be canceled and
Borrower shall forthwith, upon demand by Agent to Borrower, (1) convert the
LIBOR Borrowing of such Lender with respect to which such demand was made to a
Base Rate Borrowing; (2) pay all accrued and unpaid interest to date on the
amount so converted; and (3) pay any amounts required to compensate each Lender
for any additional cost or expense which any Lender may incur as a result of
such adoption of or change in such Legal Requirement or in the interpretation or
administration thereof and any Funding Loss which any Lender may incur as a
result of such conversion. If, when Agent so notifies Borrower, Borrower has
given a Rate Designation Notice specifying a LIBOR Borrowing but the selected
Interest Period has not yet begun, as to the applicable Lender such Rate
Designation Notice shall be deemed to be of no force and effect, as if never
made, and the balance of the Loans made by such Lender specified in such Rate
Designation Notice shall bear interest at the Base Rate until a different
available Interest Option shall be designated in accordance herewith.
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<PAGE>
(ii) Increased Cost of Borrowings. If the adoption after the
Effective Date of any applicable Legal Requirement or any change after the
Effective Date in any applicable Legal Requirement or in the interpretation or
administration thereof by any Governmental Authority or compliance by any Lender
with any request or directive (whether or not having the force of law) issued
after the Effective Date by any central bank or Governmental Authority shall at
any time as a result of any portion of the principal balances of the Notes being
maintained on the basis of a Eurodollar Rate:
(1) subject any Lender to any Taxes, or any deduction or
withholding for any Taxes, on or from any payment due
under any LIBOR Borrowing or other amount due
hereunder, other than income and franchise taxes of the
United States or its political subdivisions or such
other jurisdiction in which the applicable Lender has
its principal office or applicable lending office; or
(2) change the basis of taxation of payments due from
Borrower to any Lender under any LIBOR Borrowing
(otherwise than by a change in the rate of taxation of
the overall net income of such Lender); or
(3) impose, modify, increase or deem applicable any reserve
requirement (excluding that portion of any reserve
requirement included in the calculation of the
applicable Eurodollar Rate), special deposit
requirement or similar requirement (including, but not
limited to, state law requirements and Regulation D)
against assets of any Lender, or against deposits with
any Lender, or against loans made by any Lender, or
against any other funds, obligations or other property
owned or held by any Lender; or
(4) impose on any Lender any other condition regarding any
LIBOR Borrowing;
and the result of any of the foregoing is to increase the cost to any Lender of
agreeing to make or of making, renewing or maintaining such LIBOR Borrowing, or
reduce the amount of principal or interest received by any Lender, then, within
15 Business Days after demand by Agent (accompanied by a statement setting forth
in reasonable detail the applicable Lender's basis therefor), Borrower shall pay
to Agent additional amounts which shall compensate each Lender for such
increased cost or reduced amount. The determination by any Lender of the amount
of any such increased cost, increased reserve requirement or reduced amount
shall be conclusive and binding, absent manifest error. Borrower shall have the
right, if it receives from Agent any notice referred to in this paragraph, upon
three Business Days' notice to Agent (which shall notify each affected Lender),
either (i) to repay in full (but not in part) any borrowing with respect to
which such notice was given, together with any accrued interest thereon, or (ii)
to convert the LIBOR Borrowing which is the subject of the notice to a Base Rate
Borrowing; provided, that any such repayment or conversion shall be accompanied
by payment of (x) the amount required to
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<PAGE>
compensate each Lender for the increased cost or reduced amount referred to in
the preceding paragraph; (y) all accrued and unpaid interest to date on the
amount so repaid or converted, and (z) any Funding Loss which any Lender may
incur as a result of such repayment or conversion. Each Lender will notify
Borrower through Agent of any event occurring after the date of this Agreement
which will entitle such Lender to compensation pursuant to this Section as
promptly as practicable after it obtains knowledge thereof and determines to
request such compensation, and (if so requested by Borrower through Agent)
will designate a different lending office of such Lender for the applicable
LIBOR Borrowing or will take such other action as Borrower may reasonable
request if such designation or action is consistent with the internal policy
of such Lender and legal and regulatory restrictions, will avoid the need for,
or reduce the amount of, such compensation and will not, in the sole opinion
of such Lender, be disadvantageous to such Lender (provided that such Lender
shall have no obligation so to designate a different lending office which is
located in the United States of America).
(iii) Inadequacy of Pricing and Rate Determination. If, for any
reason with respect to any Interest Period, Agent (or, in the case of clause 3
below, the applicable Lender) shall have determined (which determination shall
be conclusive and binding upon Borrower, absent manifest error) that:
(1) Agent is unable through its customary general practices
to determine any applicable Eurodollar Rate, or
(2) by reason of circumstances affecting the applicable
market, generally, Agent is not being offered deposits
in United States dollars in such market, for the
applicable Interest Period and in an amount equal to
the amount of any applicable LIBOR Borrowing requested
by Borrower, or
(3) any applicable Eurodollar Rate will not adequately and
fairly reflect the cost to any Lender of making and
maintaining such LIBOR Borrowing hereunder for any
proposed Interest Period,
then Agent shall give Borrower notice thereof and thereupon, (A) any Rate
Designation Notice previously given by Borrower designating the applicable LIBOR
Borrowing which has not commenced as of the date of such notice from Agent shall
be deemed for all purposes hereof to be of no force and effect, as if never
given, and (B) until Agent shall notify Borrower that the circumstances giving
rise to such notice from Agent no longer exist, each Rate Designation Notice
requesting the applicable Eurodollar Rate shall be deemed a request for a Base
Rate Borrowing, and any applicable LIBOR Borrowing then outstanding shall be
converted, without any notice to or from Borrower, upon the termination of the
Interest Period then in effect with respect to it, to a Base Rate Borrowing.
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(iv) Funding Losses. Borrower shall indemnify each Lender against
and hold each Lender harmless from any Funding Loss. This indemnity shall
survive the payment of the Notes. A certificate of such Lender (explaining in
reasonable detail the amount and calculation of the amount claimed) as to any
additional amounts payable pursuant to this paragraph submitted to Borrower
shall be conclusive and binding upon Borrower, absent manifest error.
(d) Funding Offices; Adjustments Automatic; Calculation Year. Any
Lender may, if it so elects, fulfill its obligation as to any LIBOR Borrowing by
causing a branch or affiliate of such Lender to make such Loan and may transfer
and carry such Loan at, to or for the account of any branch office or affiliate
of such Lender; provided, that in such event for the purposes of this Agreement
such Loan shall be deemed to have been made by such Lender and the obligation of
Borrower to repay such Loan shall nevertheless be to such Lender and shall be
deemed held by it for the account of such branch or affiliate. Without notice to
Borrower or any other Person, each rate required to be calculated or determined
under this Agreement shall automatically fluctuate upward and downward in
accordance with the provisions of this Agreement. Interest at the Prime Rate
shall be computed on the basis of the actual number of days elapsed in a year
consisting of 365 or 366 days, as the case may be. All other interest required
to be calculated or determined under this Agreement shall be computed on the
basis of the actual number of days elapsed in a year consisting of 360 days,
unless the Ceiling Rate would thereby be exceeded, in which event, to the extent
necessary to avoid exceeding the Ceiling Rate, the applicable interest shall be
computed on the basis of the actual number of days elapsed in the applicable
calendar year in which accrued.
(e) Funding Sources. Notwithstanding any provision of this
Agreement to the contrary, each Lender shall be entitled to fund and maintain
its funding of all or any part of the Loans in any manner it sees fit, it being
understood, however, that for the purposes of this Agreement all determinations
hereunder shall be made as if each Lender had actually funded and maintained
each LIBOR Borrowing during each Interest Period through the purchase of
deposits having a maturity corresponding to such Interest Period and bearing an
interest rate equal to the Eurodollar Rate for such Interest Period.
4. Payments; Pro Rata Treatment; Computations, Etc.
------------------------------------------------
4.1 Payments.
---------
(a) Except to the extent otherwise provided herein, all payments
of principal, interest, Reimbursement Obligations and other amounts to be made
by Borrower hereunder, under the Notes and under the other Loan Documents shall
be made in Dollars, in immediately available funds, to Agent at the Principal
Office (or in the case of a successor Agent, at the principal office of such
successor Agent in the United States), not later than 10:00 a.m. Houston time on
the date on which such payment shall become due (each such payment made after
such time on such due date to be deemed to have been made on the next succeeding
Business Day). Agent, or any
36
<PAGE>
Lender for whose account any such payment is made, may (but shall not be
obligated to) debit the amount of any such payment which is not made by such
time to any ordinary deposit account of Borrower with Agent or such Lender, as
the case may be.
(b) Borrower shall, at the time of making each payment hereunder,
under any Note or under any other Loan Document, specify to Agent the Loans or
other amounts payable by Borrower hereunder or thereunder to which such payment
is to be applied. Each payment received by Agent hereunder, under any Note or
under any other Loan Document for the account of a Lender shall be paid promptly
to such Lender, in immediately available funds. If Agent fails to send to any
Lender the applicable amount by the close of business on the date any such
payment is received by Agent if such payment is received prior to 10:00 a.m.
Houston time (or on the next succeeding Business Day with respect to payments
which are received after 10:00 a.m. Houston time), Agent shall pay to the
applicable Lender interest on such amount from such date at the Federal Funds
Rate. Borrower, the Lenders and Agent acknowledge and agree that this provision
and each other provision of this Agreement or any of the other Loan Documents
relating to the application of amounts in payment of the Obligations shall be
subject to the provisions of Section 4.2(d) regarding pro rata application of
amounts after an Event of Default shall have occurred and be continuing.
(c) If the due date of any payment hereunder or under any Note
falls on a day which is not a Business Day, the due date for such payments
(except as otherwise provided in Section 3.3 hereof) shall be extended to the
next succeeding Business Day and interest shall be payable for any principal so
extended for the period of such extension.
(d) All payments by the Borrower hereunder or under any other Loan
Document shall be made free and clear of and without deduction for or on account
of any present or future income, stamp, or other taxes, fees, duties,
withholding or other charges of any nature whatsoever imposed by any taxing
authority excluding in the case of each Lender taxes imposed on or measured by
its net income or franchise taxes imposed by the jurisdiction in which it is
organized or through which it acts for purposes of this Agreement (such
non-excluded items being hereinafter referred to as "Taxes"). If as a result of
any change in law (or the interpretation thereof) after the date that the
applicable Lender became a "Lender" under this Agreement any withholding or
deduction from any payment to be made to, or for the account of, a Lender by the
Borrower hereunder or under any other Loan Document is required in respect of
any Taxes pursuant to any applicable law, rule, or regulation, then the Borrower
will (i) pay to the relevant authority the full amount required to be so
withheld or deducted; (ii) to the extent available, promptly forward to the
Agent an official receipt or other documentation reasonably satisfactory to the
Agent evidencing such payment to such authority; and (iii) pay to the Agent, for
the account of each affected Lender, such additional amount or amounts as are
necessary to ensure that the net amount actually received by such Lender will
equal the full amount such Lender would have received had no such withholding or
deduction been required. Each Lender shall determine such additional amount or
amounts payable to it (which determination shall, in the absence of manifest
error, be conclusive and binding on the
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<PAGE>
Borrower). If a Lender becomes aware that any such withholding or deduction from
any payment to be made by the Borrower hereunder or under any other Loan
Document is required, then such Lender shall promptly notify the Agent and the
Borrower thereof stating the reasons therefor and the additional amount required
to be paid under this Section. Each Lender shall execute and deliver to the
Agent and Borrower such forms as it may be required to execute and deliver
pursuant to Section 11.13 hereof. To the extent that any such withholding or
deduction results from the failure of a Lender to provide a form required by
Section 11.13 hereof (unless such failure is due to some prohibition under
applicable Legal Requirements), the Borrower shall have no obligation to pay the
additional amount required by clause (iii) above. Anything in this Section
notwithstanding, if any Lender elects to require payment by the Borrower of any
material amount under this Section, the Borrower may, within 60 days after the
date of receiving notice thereof and so long as no Default shall have occurred
and be continuing, elect to terminate such Lender as a party to this Agreement;
provided that, concurrently with such termination the Borrower shall (i) if the
Agent and each of the other Lenders shall consent, pay that Lender all
principal, interest and fees and other amounts owed to such Lender through such
date of termination or (ii) have arranged for another financial institution
approved by the Agent (such approval not to be unreasonably withheld) as of such
date, to become a substitute Lender for all purposes under this Agreement in the
manner provided in Section 11.6; provided further that, prior to substitution
for any Lender, the Borrower shall have given written notice to the Agent of
such intention and the Lenders shall have the option, but no obligation, for a
period of 60 days after receipt of such notice, to increase their Commitments in
order to replace the affected Lender in lieu of such substitution.
4.2 Pro Rata Treatment. Except to the extent otherwise provided
herein: (a) each borrowing from the Lenders under Section 2.1 hereof shall be
made (x) in the case of Advance Loans, ratably from the Advance Loan Lenders in
accordance with their respective Advance Loan Commitments and (y) in the case of
Revolving Loans, ratably from the Revolving Loan Lenders in accordance with
their respective Revolving Loan Commitments; (b) each payment of revolving loan
commitment fees shall be made for the account of the Revolving Loan Lenders, and
each termination or reduction of the Revolving Loan Commitments of the Revolving
Loan Lenders under Section 2.3 hereof shall be applied, pro rata, according to
the Revolving Loan Lenders' respective Revolving Loan Commitments; (c) each
payment of advance loan commitment fees shall be made for the account of the
Advance Loan Lenders, and each termination or reduction of the Advance Loan
Commitments of the Advance Loan Lenders under Section 2.3 hereof shall be
applied, pro rata, according to the Advance Loan Lenders' respective Advance
Loan Commitments; (d) each payment by Borrower of principal of or interest on
the Advance Loans or Revolving Loans, as the case may be, prior to the
occurrence of an Event of Default (or after the applicable Event of Default
shall have been fully cured) shall be made to Agent for the account of the
Lenders pro rata in accordance with the respective unpaid principal amounts of
such Advance Loans or Revolving Loans, as the case may be, held by the Lenders;
(e) each payment by Borrower of principal of or interest on the Advance Loans or
Revolving Loans, as the case may be, after an Event of Default shall have
occurred and be continuing shall be made to Agent for the account of the Lenders
pro rata in accordance with the respective unpaid principal amounts of the
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<PAGE>
Obligations held by the Lenders (i.e. such payments shall be shared by all of
the Lenders and not restricted to the holders of Revolving Notes or Advance
Notes, regardless of any attempted contrary designation by Borrower), and (f)
the Revolving Loan Lenders (other than the applicable Issuer) shall purchase
from the applicable Issuer participations in each Letter of Credit to the extent
of their respective Revolving Loan Commitment Percentages.
4.3 Certain Actions, Notices, Etc. Notices to Agent of any
termination or reduction of Revolving Loan Commitments or Advance Loan
Commitments and of borrowings and optional prepayments of Loans and requests for
issuances of Letters of Credit shall be irrevocable and shall be effective only
if received by Agent not later than 10:00 a.m. Houston time on the number of
Business Days prior to the date of the relevant termination, reduction,
borrowing and/or prepayment specified below:
Number of Business Days
Prior Notice
Termination or Reduction of
Revolving Loan Commitments and 5
Advance Loan Commitments
Revolving Loan repayment 1
Borrowing at the Base Rate 1
Letter of Credit issuance 5
Prepayments required pursuant to
Section 3.2(b) same day
- --------------
Optional prepayment of
Advance Loan 5
Each such notice of termination or reduction shall specify the amount of the
applicable Revolving Loan Commitment or Advance Loan Commitment to be terminated
or reduced. Each such notice of borrowing or prepayment shall specify the amount
of the Loans to be borrowed or prepaid and the date of borrowing or prepayment
(which shall be a Business Day). Agent shall promptly notify the affected
Lenders of the contents of each such notice. Any selection of a Eurodollar Rate
with respect to a Loan shall be subject to the advance notice requirements set
forth in Section 3.3 hereof.
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4.4 Non-Receipt of Funds by Agent. Unless Agent shall have been
notified by a Lender or Borrower (the "Payor") prior to the date on which such
Lender is to make payment to Agent of the proceeds of a Loan (or funding of a
drawing under a Letter of Credit or reimbursement with respect to any drawing
under a Letter of Credit) to be made by it hereunder or Borrower is to make a
payment to Agent for the account of one or more of the Lenders, as the case may
be (such payment being herein called the "Required Payment"), which notice shall
be effective upon receipt, that the Payor does not intend to make the Required
Payment to Agent, Agent may assume that the Required Payment has been made and
may, in reliance upon such assumption (but shall not be required to), make the
amount thereof available to the intended recipient on such date and, if the
Payor has not in fact made the Required Payment to Agent, the recipient of such
payment (or, if such recipient is the beneficiary of a Letter of Credit,
Borrower and, if Borrower fails to pay the amount thereof to Agent forthwith
upon demand, the Lenders ratably in proportion to their respective Revolving
Loan Commitment Percentages) shall, on demand, pay to Agent the amount made
available by Agent, together with interest thereon in respect of the period
commencing on the date such amount was so made available by Agent until the date
Agent recovers such amount at a rate per annum equal to the Federal Funds Rate
for such period.
4.5 Sharing of Payments, Etc. If a Lender shall obtain payment of
any principal of or interest on any Loan made by it under this Agreement, on any
Reimbursement Obligation or on any other Obligation then due to such Lender
hereunder, through the exercise of any right of set-off (including, without
limitation, any right of setoff or lien granted under Section 9.2 hereof),
banker's lien, counterclaim or similar right, or otherwise, it shall promptly
purchase from the other Lenders participations in the Loans made, or
Reimbursement Obligations or other Obligations held, by the other Lenders in
such amounts, and make such other adjustments from time to time as shall be
equitable to the end that all the Lenders shall share the benefit of such
payment (net of any expenses which may be incurred by such Lender in obtaining
or preserving such benefit) pro rata in accordance with the unpaid Obligations
then due to each of them. To such end all the Lenders shall make appropriate
adjustments among themselves (by the resale of participations sold or otherwise)
if such payment is rescinded or must otherwise be restored. Borrower agrees, to
the fullest extent it may effectively do so under applicable law, that any
Lender so purchasing a participation in the Loans made, or Reimbursement
Obligations or other Obligations held, by other Lenders may exercise all rights
of set-off, bankers' lien, counterclaim or similar rights with respect to such
participation as fully as if such Lender were a direct holder of Loans, or
Reimbursement Obligations or other Obligations in the amount of such
participation. Nothing contained herein shall require any Lender to exercise any
such right or shall affect the right of any Lender to exercise, and retain the
benefits of exercising, any such right with respect to any other indebtedness or
obligation of Borrower.
5. Conditions Precedent.
---------------------
5.1 Initial Loans and Letters of Credit. The obligation of each
Lender or each Issuer to make its initial Loans or issue or participate in a
Letter of Credit (if such Letter of Credit is
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issued prior to the funding of the initial Loans) hereunder is subject to the
following conditions precedent, each of which shall have been fulfilled or
waived to the satisfaction of the Majority Lenders:
(a) Authorization and Status. Agent shall have received from the
appropriate Governmental Authorities certified copies of the Organizational
Documents (other than by-laws) of each Obligor, and evidence satisfactory to
Agent of all action taken by each Obligor authorizing the execution, delivery
and performance of the Loan Documents and all other documents related to this
Agreement to which it is a party (including, without limitation, a certificate
of the secretary of each such party which is a corporation setting forth the
resolutions of its Board of Directors authorizing the transactions contemplated
thereby and attaching a copy of its bylaws), together with such certificates as
may be appropriate to demonstrate the qualification and good standing of and
payment of taxes by each Obligor in the jurisdiction of its organization and in
each other jurisdiction where the failure in which to qualify would have a
material adverse effect on the business, condition (financial or otherwise),
operations or Properties of any Obligor.
(b) Incumbency. Each Obligor shall have delivered to Agent a
certificate in respect of the name and signature of each of the officers (i) who
is authorized to sign on its behalf the applicable Loan Documents related to any
Loan or the issuance of any Letter of Credit and (ii) who will, until replaced
by another officer or officers duly authorized for that purpose, act as its
representative for the purposes of signing documents and giving notices and
other communications in connection with any Loan or the issuance of any Letter
of Credit. Agent and each Lender may conclusively rely on such certificates
until they receive notice in writing from the applicable Obligor to the
contrary.
(c) Notes. Agent shall have received the appropriate Notes of
Borrower for each Lender, duly completed and executed.
(d) Loan Documents. Each Obligor shall have duly executed and
delivered the Loan Documents to which it is a party (in such number of copies as
Agent shall have requested). Each such Loan Document shall be in substantially
the form furnished to the Lenders prior to their execution of this Agreement,
together with such changes therein as Agent may approve.
(e) Security Matters. All such action as Agent shall have
requested to perfect the Liens created pursuant to the Security Documents shall
have been taken, including, without limitation, where applicable, the filing and
recording of the Security Documents with the appropriate Governmental
Authorities (except for those Properties in respect of which the Majority
Lenders have given their written consent to deferral of recordation of the
applicable Mortgage so long as no Event of Default has occurred which is
continuing). Agent shall also have received evidence satisfactory to it that the
Liens created by the Security Documents constitute first priority Liens, except
for the exceptions expressly provided for herein, including, without limitation,
Uniform Commercial Code search reports, satisfactory title evidence in form and
substance acceptable to
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Agent, and executed releases of any prior Liens (except as permitted by Section
8.2). Agent shall be granted a first priority Lien securing all of the Revolving
Loan Obligations upon all of the issued and outstanding equity interests in and
to Borrower, pursuant to Loan Documentation in Proper Form, as a condition
precedent to any Loan.
(f) Fees and Expenses. Borrower shall have paid to Agent all
unpaid fees in the amounts previously agreed upon in writing among Borrower and
Agent; and shall have in addition paid to Agent all amounts payable under
Section 11.3 hereof, on or before the date of this Agreement, except for amounts
which Agent, in its sole discretion, agrees may be paid at a later date.
(g) Insurance. Borrower shall have delivered to Agent certificates
of insurance satisfactory to Agent evidencing the existence of all insurance
required to be maintained by each Obligor by this Agreement and the Security
Documents.
(h) Opinions of Counsel. Agent shall have received such opinions
of counsel to Obligors as the Majority Lenders shall reasonably request with
respect to Obligors and the Loan Documents.
(i) Consents. Agent shall have received evidence satisfactory to
the Lenders that (i) BKC shall have consented in writing to the transactions
contemplated in the applicable Purchase Agreements and in this Agreement without
conditions except as approved by the Majority Lenders and (ii) all material
consents of each Governmental Authority and of each other Person, if any,
reasonably required in connection with (a) the Loans and the Letters of Credit
and (b) the execution, delivery and performance of this Agreement and the other
Loan Documents have been satisfactorily obtained.
(j) Key Agreements. Agent shall have received copies of the Key
Agreements, in Proper Form, and, where applicable, shall have received evidence
satisfactory to Agent that the transactions contemplated therein have been
consummated, subject only to the requested funding of Loans. Upon request of
Agent or the Majority Lenders, the copies of any designated Key Agreements shall
be certified as true, correct and complete by Borrower.
(k) Environmental Reports. Agent shall have received environmental
reports satisfactory to the Lenders with respect to the Property of Borrower and
the other Obligors prepared by an environmental consultant or environmental
consultants satisfactory to the Lenders.
(l) Title Insurance Policies. To the extent requested by Agent or
the Majority Lenders, Agent shall have received the Title Insurance Policies and
legible copies of any matters referred to therein, together with a survey or
surveys of the Mortgaged Property, in Proper Form.
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(m) Equity. Borrower shall have received (through equity
contributions by Carrols Holdings to Borrower) not less than $31,200,000 in
proceeds (prior to deducting for expenses incurred in connection with such
transaction not to exceed $1,000,000 deducted from the equity contributed
concurrently with the execution hereof) from the sale of equity interests in
Carrols Holdings.
(n) Assignment of Liens Securing Existing Indebtedness. All
existing Indebtedness owing to Heller Financial, Inc. shall have been paid in
full (in consideration of the assignment of such Indebtedness to Agent and
Lenders) and all Liens securing such Indebtedness shall have been reviewed and
approved by Agent and shall have been assigned to Agent in such a manner as
shall permit (i) the Revolving Loans to be secured by all Liens presently
securing the existing revolving credit facility provided by Heller Financial,
Inc. and (ii) an Advance Loan Tranche in an amount not exceeding $5,000,000 to
be secured by all Liens presently securing the existing term loans owing to
Heller Financial, Inc.
(o) Compliance with Commitment Letter. Borrower shall have
complied with the terms and provisions of that certain Commitment Letter dated
January 8, 1997 regarding the transactions contemplated herein.
(p) Other Documents. Agent shall have received such other
documents consistent with the terms of this Agreement and relating to the
transactions contemplated hereby as Agent or the Majority Lenders may reasonably
request.
5.2 Advance Loans. The obligation of each Advance Loan Lender to
make any Advance Loan to be made by it under Section 2.1(b) hereof is further
subject to the following:
(a) The Advance Loans shall be requested for the purpose of paying
a portion (not to exceed 75%) of the purchase costs related to real Property or
material personal Property purchased within a particular 270 Day Period which
shall be equal to or greater than the lesser of $13,333,334 or 1.33 times the
Advance Loan Commitments remaining unused. The Property so acquired is herein
collectively called an "Acquisition Package".
(b) The execution and delivery of a Purchase Agreement, in Proper
Form, providing for the acquisition by an Obligor of the applicable Acquisition
Package, including the rights of the franchisees under the Franchise Agreements
relating to restaurants included in such Acquisition Package, and the closing of
the transactions provided therein (subject only to funding of the applicable
Advance Loans under Section 2.1(b)).
(c) Copies, in Proper Form and certified as true, correct and
complete, of financial information regarding such properties as of a recent
date, together with pro forma financial statements for the Borrower assuming the
closing of the applicable Acquisition Package.
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(d) Agent shall have received an environmental report satisfactory
to the Majority Lenders with respect to the applicable Acquisition Package
prepared by an environmental consultant or environmental consultants
satisfactory to Agent.
(e) Agent shall have received evidence satisfactory to the
Majority Lenders that BKC shall have consented in writing to such purchase
without conditions except as approved by the Majority Lenders in writing and the
Agent shall have received an amendment to the BKC Consent (or an additional BKC
Consent), in Proper Form, incorporating the applicable Acquisition Package.
(f) Agent shall have received Mortgages and other Security
Documents providing for a Lien upon the applicable Acquisition Package (other
than Excluded Assets) securing the applicable Advance Loan Tranche, together
with Advance Notes evidencing the applicable Advance Loan Tranche and such other
documentation as Agent or the Majority Lenders may reasonably request in
connection therewith.
(g) Compliance with the provisions of Section 7.12 hereof, to the
extent applicable, and with Section 8.14 hereof.
(h) The making of such Advance Loan and the execution and delivery
of the Security Documents relating thereto shall not cause a default under the
Senior Notes Documentation.
5.3 All Loans and Letters of Credit. The obligation of each Lender
to make any Loan to be made by it hereunder or to issue or participate in any
Letter of Credit is subject to (a) the accuracy, in all material respects, on
the date of such Loan or such issuance of all representations and warranties of
each Obligor contained in this Agreement and the other Loan Documents; (b) Agent
shall have received the following, all of which shall be duly executed and in
Proper Form: (1) a Request for Extension of Credit as to the Loan or the Letter
of Credit, as the case may be, no later than 10:00 a.m. Houston time on the
Business Day on which such Request for Extension of Credit must be given under
Section 4.3 hereof, (2) in the case of a Letter of Credit, an Application, and
(3) such other documents as Agent or the Majority Lenders may reasonably
require; (c) prior to the making of such Loan or the issuance of such Letter of
Credit, there shall have occurred no material adverse change in the assets,
liabilities, financial condition, business or affairs of the Borrower and the
Obligors, on a consolidated basis; (d) no Default or Event of Default shall have
occurred and be continuing; (e) the making of such Loan or the issuance of such
Letter of Credit shall not be illegal or prohibited by any Legal Requirement,
and (f) Borrower shall have paid all fees and expenses of the type described in
Section 11.3 hereof and all other fees owed to Agent or any Lender under the
Loan Documents which are due and payable, in each case, prior to or on the date
of such Loan or such issuance. The submission by the Borrower of a Request for
Extension of Credit shall be deemed to be a representation and warranty that the
conditions precedent to the applicable Loan or Letter of Credit have been
satisfied.
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6. Representations and Warranties.
-------------------------------
To induce the Lenders to enter into this Agreement and to make the
Loans and issue or participate in the Letters of Credit, Borrower represents and
warrants (such representations and warranties to survive any investigation and
the making of the Loans and the issuance of any Letters of Credit) to the
Lenders and Agent as follows:
6.1 Organization. Each Obligor (a) is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization; (b) has all necessary power and authority to conduct its business
as presently conducted, and (c) is duly qualified to do business and in good
standing in the jurisdiction of its organization and in all jurisdictions in
which the failure to so qualify would reasonably be expected to have a material
adverse effect on the business, condition (financial or otherwise), operations
or Properties of any Obligor.
6.2 Financial Statements. Borrower has furnished to Agent audited
financial statements (including a balance sheet) as to Borrower which fairly
present in all material respects, in accordance with GAAP, the financial
condition and the results of operations of Borrower as at the end of Borrower's
1995 fiscal year and unaudited financial statements (including a balance sheet)
as to Borrower which fairly present in all material respects, in accordance with
GAAP, the financial condition and the results of operations of Borrower as at
the end of the third quarter of Borrower's 1996 fiscal year. No events,
conditions or circumstances have occurred from the date that the financial
statements were delivered to Agent through the Effective Date which would cause
said financial statements to be misleading in any material respect. There are no
material instruments or liabilities which should be reflected in such financial
statements provided to Agent which are not so reflected.
6.3 Enforceable Obligations; Authorization. The Loan Documents are
legal, valid and binding obligations of each applicable Obligor, enforceable in
accordance with their respective terms, except as may be limited by bankruptcy,
insolvency and other similar laws and judicial decisions affecting creditors'
rights generally and by general equitable principles. The execution, delivery
and performance of the Loan Documents (a) have all been duly authorized by all
necessary action; (b) are within the power and authority of each applicable
Obligor; (c) do not and will not contravene or violate any Legal Requirement
applicable to any applicable Obligor or the Organizational Documents of any
applicable Obligor, the contravention or violation of which would reasonably be
expected to have a material adverse effect on the business, condition (financial
or otherwise), operations or Properties of any Obligor; (d) do not and will not
result in the breach of, or constitute a default under, any material agreement
or instrument by which any Obligor or any of its Property may be bound, and (e)
do not and will not result in the creation of any Lien upon any Property of any
Obligor, except in favor of Agent or as expressly contemplated therein. All
necessary permits, registrations and consents for such making and performance
have been obtained. Except as otherwise expressly stated in the Security
Documents, the Liens of the Security Documents, will constitute valid and
perfected first and prior Liens on the Property
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described therein (except for those Properties in respect of which the Majority
Lenders have given their written consent to deferral of recordation of the
applicable Mortgage so long as no Event of Default has occurred which is
continuing), subject to no other Liens whatsoever except Permitted Liens.
6.4 Other Debt. No Obligor is in default in the payment of any
other Indebtedness or under any agreement, mortgage, deed of trust, security
agreement or lease to which it is a party and which default would reasonably be
expected to have a material adverse effect on the business, condition (financial
or otherwise), operations or Properties of any Obligor or on the ability of any
Obligor to perform its respective obligations under any Loan Document to which
it is a party.
6.5 Litigation. There is no litigation or administrative
proceeding, to the knowledge of any executive officer of any Obligor, pending or
threatened against, nor any outstanding judgment, order or decree against, any
Obligor before or by any Governmental Authority which does or would reasonably
be expected to have a material adverse effect on the business, condition
(financial or otherwise), operations or Properties of any Obligor or on the
ability of any Obligor to perform its respective obligations under any Loan
Document to which it is a party. No Obligor is in default with respect to any
judgment, order or decree of any Governmental Authority where such default would
have a material adverse effect on the business, condition (financial or
otherwise), operations or Properties of any Obligor.
6.6 Title. Each Obligor has good and marketable title to the
Collateral pledged (or purported to be pledged) thereby pursuant to the Security
Documents, free and clear of all Liens except Permitted Liens.
6.7 Taxes. Each Obligor has filed all tax returns required to have
been filed and paid all taxes shown thereon to be due, except those for which
extensions have been obtained and those which are being contested in good faith.
6.8 Regulations G, U and X. None of the proceeds of any Loan will
be used for the purpose of purchasing or carrying directly or indirectly any
margin stock or for any other purpose would constitute this transaction a
"purpose credit" within the meaning of Regulations G, U and X of the Board of
Governors of the Federal Reserve System, as any of them may be amended from time
to time.
6.9 Subsidiaries. As of the Effective Date, Borrower has no
Subsidiaries other than Carrols Realty Holdings Corp., a Delaware corporation,
Carrols Realty I Corp., a Delaware corporation, Carrols Realty II Corp., a
Delaware corporation, Carrols J.G. Corp., a Delaware corporation, CDC Theatre
Properties, a Delaware corporation, HNS Leasing and Equipment Services, Inc., a
New York corporation, Quanta Advertising Corp., a New York corporation, Jo-Ann
Enterprises, Inc., a New Jersey corporation, and Confectionary Square Corp., a
New Jersey corporation.
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6.10 No Untrue or Misleading Statements. No representation or
warranty made by Borrower in any Loan Document or in any document, instrument or
other writing furnished to the Lenders by or on behalf of any Obligor in
connection with the transactions contemplated in any Loan Document does or will
contain any untrue material statement of fact or will omit to state any such
fact (of which any executive officer of any Obligor has knowledge) necessary to
make the representations, warranties and other statements contained herein or in
such other document, instrument or writing not misleading in any material
respect.
6.11 ERISA. With respect to each Plan, Borrower and each member of
the Controlled Group have fulfilled their obligations, including obligations
under the minimum funding standards of ERISA and the Code and are in compliance
in all material respects with the provisions of ERISA and the Code. No event has
occurred which could result in a liability of Borrower or any member of the
Controlled Group to the PBGC or a Plan (other than to make contributions in the
ordinary course) would reasonably be expected to have a material adverse effect
on the Properties, liabilities, condition (financial or otherwise), business or
operations of any Obligor. There have not been any nor are there now existing
any events or conditions that would cause the Lien provided under Section 4068
of ERISA to attach to any Property of Borrower or any member of the Controlled
Group. Unfunded Liabilities as of the date hereof do not exceed $500,000. No
"prohibited transaction" has occurred with respect to any Plan.
6.12 Investment Company Act. No Obligor is an investment company
within the meaning of the Investment Company Act of 1940, as amended, or,
directly or indirectly, controlled by or acting on behalf of any Person which is
an investment company, within the meaning of said Act.
6.13 Public Utility Holding Company Act. No Obligor is an
"affiliate" or a "subsidiary company" of a "public utility company," or a
"holding company," or an "affiliate" or a "subsidiary company" of a "holding
company," as such terms are defined in the Public Utility Holding Company Act of
1935, as amended.
6.14 Solvency. After giving effect to the equity contributions
required under the provisions of Section 5.1(m), none of Borrower, any Obligor,
or Borrower and its Subsidiaries (other than Non-Recourse Subsidiaries), on a
consolidated basis, is "insolvent," as such term is used and defined in (i) the
Bankruptcy Code and (ii) the fraudulent conveyance statutes of the States of New
York or Texas or of any jurisdiction in which any of the Collateral may be
located.
6.15 Fiscal Year. The fiscal year of each Obligor ends on the
Sunday nearest December 31.
6.16 Compliance. Each Obligor is in compliance with all Legal
Requirements applicable to it, except to the extent that the failure to comply
therewith would not reasonably be expected to have a material adverse effect on
the business, condition (financial or otherwise), operations or
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Properties of any Obligor or the ability of any Obligor to perform its
obligations under this Agreement or the Loan Documents to which it is a party.
6.17 Environmental Matters. Each Obligor has, to the best knowledge
of their respective executive officers, obtained and maintained in effect all
Environmental Permits (or the applicable Person has initiated the necessary
steps to transfer the Environmental Permits into its name or obtain such
permits), the failure to obtain which would reasonably be expected to have a
material adverse effect on the Properties, liabilities, condition (financial or
otherwise), business or operations of any Obligor. Each Obligor and its
Properties, business and operations have been and are, to the best knowledge of
their respective executive officers, in compliance with all applicable
Requirements of Environmental Law and Environmental Permits the failure to
comply with which would reasonably be expected to have a material adverse effect
on the Properties, liabilities, condition (financial or otherwise), business or
operations of any Obligor. Each Obligor and its Properties, business and
operations are not subject to any (A) Environmental Claims or (B), to the best
knowledge of their respective executive officers (after making reasonable
inquiry of the personnel and records of their respective Corporations),
Environmental Liabilities, in either case direct or contingent, arising from or
based upon any act, omission, event, condition or circumstance occurring or
existing on or prior to the date hereof which would reasonably be expected to
have a material adverse effect on the Properties, liabilities, condition
(financial or otherwise), business or operations of any Obligor. None of the
officers of any Obligor has received any notice of any violation or alleged
violation of any Requirements of Environmental Law or Environmental Permit or
any Environmental Claim in connection with its Properties, liabilities,
condition (financial or otherwise), business or operations which would
reasonably be expected to have a material adverse effect on the Properties,
liabilities, condition (financial or otherwise), business or operations of any
Obligor. Borrower does not know of any event or condition with respect to
currently enacted Requirements of Environmental Laws presently scheduled to
become effective in the future with respect to any of the Properties of any
Obligor which would reasonably be expected to have a material adverse effect on
the Properties, liabilities, condition (financial or otherwise), business or
operations of any Obligor, for which the applicable Obligor has not made good
faith provisions in its business plan and projections of financial performance.
6.18 Certificate of Title Property. The aggregate value (based on
the greater of book or market value) of the Collateral which is subject to
certificate of title laws is equal to or less than $250,000 on the date hereof.
6.19 Mortgaged Properties and Other Collateral; Subsidiary
Property. As of the Effective Date, the Mortgaged Properties and the other
Collateral covered by the Security Documents constitute the only real Property
and all material personal Property owned by any Obligor, other than the Excluded
Assets and other than Properties acquired after March 15, 1997 (which remain
subject to the provisions of Section 8.14(c) hereof). As of the Effective Date,
the Subsidiaries of Borrower do not own any real Property or material personal
Property which is not
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covered by the Security Documents, other than the Excluded Assets and other than
Properties acquired after March 15, 1997 (which remain subject to the provisions
of Section 8.14(c) hereof).
7. Affirmative Covenants.
----------------------
Borrower covenants and agrees with Agent and the Lenders that prior to
the termination of this Agreement it will do, and cause each other Obligor to
do, and if necessary cause to be done, each and all of the following:
7.1 Taxes, Existence, Regulations, Property, Etc. At all times (a)
pay when due all taxes and governmental charges of every kind upon it or against
its income, profits or Property, unless and only to the extent that the same
shall be contested diligently in good faith and adequate reserves in accordance
with GAAP have been established therefor; (b) do all things necessary to
preserve its existence, qualifications, rights and franchises in all
jurisdictions where such failure to qualify would reasonably be expected to have
a material adverse effect on the business, condition (financial or otherwise),
operations or Properties of any Obligor; (c) comply with all applicable Legal
Requirements (including without limitation Requirements of Environmental Law) in
respect of the conduct of its business and the ownership of its Property, the
noncompliance with which would reasonably be expected to have a material adverse
effect on the business, condition (financial or otherwise), operations or
Properties of any Obligor or on the ability of any Obligor to perform its
respective obligations under any Loan Document to which it is a party; and (d)
cause its Property to be protected, maintained and kept in good repair and make
all replacements and additions to such Property as may be reasonably necessary
to conduct its business properly and efficiently.
7.2 Financial Statements and Information. Furnish to Agent and
each Lender each of the following: (a) as soon as available and in any event
within 120 days after the end of each applicable fiscal year, beginning with the
fiscal year ending on December 31, 1997, Annual Audited Financial Statements of
Borrower and Carrols Holdings; (b) as soon as available and in any event within
45 days after the end of each fiscal quarter (other than the last fiscal
quarter) of each applicable fiscal year, Quarterly Financial Statements of
Borrower and Carrols Holdings; (c) concurrently with the financial statements
provided for in Subsections 7.2(a) and (b) hereof, such schedules, computations
and other information, in reasonable detail, as may be required by Agent to
demonstrate compliance with the covenants set forth herein or reflecting any
non-compliance therewith as of the applicable date, all certified and signed by
the president or chief financial officer of Borrower (or other authorized
officer approved by Agent) as true and correct in all material respects to the
best knowledge of such officer and, commencing with the quarterly financial
statement prepared as of June 30, 1997, a compliance certificate ("Compliance
Certificate") in the form of Exhibit G hereto, duly executed by such authorized
officer; (d) by December 31 of each fiscal year, Borrower's annual business plan
for the next fiscal year (including its balance sheet and income and cash flow
projections for such fiscal year); (e) promptly upon their becoming publicly
available, each financial statement, report, notice or
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definitive proxy statements sent by any Obligor to shareholders generally and
each regular or periodic report and each registration statement, prospectus or
written communication (other than transmittal letters) in respect thereof filed
by any Obligor with, or received by any Obligor in connection therewith from,
any securities exchange or the Securities and Exchange Commission or any
successor agency, and (f) such other information relating to the condition
(financial or otherwise), operations, prospects or business of any Obligor as
from time to time may be reasonably requested by Agent. Financial Statements for
Borrower and Carrols Holding shall be prepared on a consolidated basis, and
shall provide comparison to the corresponding period of the previous fiscal
year. Each delivery of a financial statement pursuant to this Section 7.2 shall
constitute a restatement of the representations contained in the last two
sentences of Section 6.2.
7.3 Financial Tests. Borrower will have and maintain:
(a) Debt Service Coverage Ratio - a Debt Service Coverage
Ratio of not less than 1.30 to 1.00 at all times.
(b) Debt to EBITDA Ratio - a Debt to EBITDA Ratio of not
greater than (1) 4.50 to 1.00 at all times during the period commencing
on the date hereof through and including June 30, 1998; (2) 4.00 to
1.00 at all times during the period commencing on July 1, 1998 through
and including June 30, 2000; (3) 3.50 to 1.00 at all times during the
period commencing on July 1, 2000 through and including June 30, 2002,
and (4) 3.00 to 1.00 at all times thereafter.
(c) Fixed Charge Coverage Ratio - a Fixed Charge Coverage
Ratio of not less than 1.10 to 1.00 at all times.
7.4 Inspection. Permit Agent and each Lender upon 3 days' prior
notice (unless a Default or an Event of Default has occurred which is
continuing, in which case no prior notice is required) to inspect its Property,
to examine its files, books and records, except privileged communication with
legal counsel and classified governmental material, and make and take away
copies thereof, and to discuss its affairs with its officers and accountants,
all during normal business hours and at such intervals and to such extent as
Agent may reasonably desire.
7.5 Further Assurances. Promptly execute and deliver, at
Borrower's expense, any and all other and further instruments which may be
reasonably requested by Agent to cure any defect in the execution and delivery
of any Loan Document in order to effectuate the transactions contemplated by the
Loan Documents, and in order to grant, preserve protect and perfect the validity
and priority of the security interests created by the Security Documents (except
for those Properties in respect of which the Majority Lenders have given their
written consent to deferral of recordation of the applicable Mortgage so long as
no Event of Default has occurred which is continuing).
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7.6 Books and Records. Maintain books of record and account which
permit financial statements to be prepared in accordance with GAAP.
7.7 Insurance. Borrower will (and will cause each other Obligor
to) maintain insurance with such insurers, on such of its Property, with
responsible companies in such amounts, with such deductibles and against such
risks as are usually carried by owners of similar businesses and properties in
the same general areas in which the applicable Obligor operates or as Agent may
otherwise reasonably require, and furnish Agent satisfactory evidence thereof
promptly upon request. These insurance provisions are cumulative of the
insurance provisions of the Security Documents. Agent shall be provided with
copies of the policies of insurance and a certificate of the insurer that the
insurance required by this Section may not be canceled, reduced or affected in
any material manner without thirty (30) days' prior written notice to Agent.
Wherever applicable, such insurance shall name Agent as loss payee and/or
mortgagee insured.
7.8 Notice of Certain Matters. Give Agent written notice of the
following promptly after any executive officer (vice president or more senior)
of Borrower shall become aware of the same:
(a) the issuance by any court or governmental agency or authority
of any injunction, order or other restraint prohibiting, or having the effect of
prohibiting, the performance of this Agreement, any other Loan Document, or the
making of the Loans or the initiation of any litigation, or any claim or
controversy which would reasonably be expected to result in the initiation of
any litigation, seeking any such injunction, order or other restraint;
(b) the filing or commencement of any action, suit or proceeding,
whether at law or in equity or by or before any court or any Governmental
Authority involving claims in excess of $500,000 or which may reasonably be
expected to result in a Default hereunder; and
(c) any Event of Default or Default, specifying the nature and
extent thereof and the action (if any) which is proposed to be taken with the
respect thereto.
Borrower will also notify Agent in writing at least 30 days prior to the date
that any Obligor changes its name or the location of its chief executive office
or principal place of business or the place where it keeps its books and
records. After the Effective Date, Borrower will notify Agent in writing at
least 45 days prior to any Obligor's acquisition of any real Property or any
material personal Property (other than Accounts, Inventory and Equipment),
wherever located, other than the Mortgaged Properties and the other Collateral
covered by the Security Documents and other than the Excluded Assets (such
acquisition or ownership being herein called an "Additional Collateral Event"
and the Property so acquired or owned being herein called "Additional
Collateral"). Any such acquisition shall be subject to the provisions of Section
8.14 hereof. In addition to the foregoing, after the Effective Date, Borrower
will notify Agent in writing at least 10 days prior to any prepayment of any
part of the term loan Indebtedness currently owing to
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Heller Financial, Inc. or the refinancing of the revolving loan facility
currently owing to Heller Financial, Inc. and such prepayment or refinancing
shall constitute an "Additional Collateral Event" and concurrently with such
prepayment or refinancing all Property currently securing the applicable
Indebtedness owing to Heller Financial, Inc. shall constitute "Additional
Collateral".
7.9 Interest Rate Risk. Borrower shall comply with and shall
maintain in full force and effect a program for the hedging of interest rate
risk (which may include one or more Interest Rate Risk Agreements) upon terms
and in a manner acceptable to Agent providing for a notional amount equal to the
excess amount of (i) the aggregate unpaid principal balance of Borrowed Money
Indebtedness of Borrower (on a consolidated basis) bearing interest at a
variable rate over (ii) 50% of the aggregate unpaid principal balance of the
Borrowed Money Indebtedness of Borrower (on a consolidated basis).
7.10 Capital Adequacy. If any Lender shall have determined that the
adoption after the Effective Date or effectiveness after the Effective Date
(whether or not previously announced) of any applicable law, rule, regulation or
treaty regarding capital adequacy, or any change therein after the Effective
Date, or any change in the interpretation or administration thereof after the
Effective Date by any Governmental Authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by any
Lender with any request or directive after the Effective Date regarding capital
adequacy (whether or not having the force of law) of any such Governmental
Authority, central bank or comparable agency has or would have the effect of
reducing the rate of return on such Lender's capital as a consequence of its
obligations hereunder, under the Letters of Credit, the Notes or other
Obligations held by it to a level below that which such Lender could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's policies with respect to capital adequacy) by an amount deemed by
such Lender to be material, then from time to time, upon satisfaction of the
conditions precedent set forth in this Section 7.10, after demand by such Lender
(with a copy to Agent) as provided below, pay (subject to Section 11.7 hereof)
to such Lender such additional amount or amounts as will compensate such Lender
for such reduction. The certificate of any Lender setting forth such amount or
amounts as shall be necessary to compensate it and the basis thereof and reasons
therefor shall be delivered as soon as practicable to Borrower and shall be
conclusive and binding, absent manifest error. Borrower shall pay the amount
shown as due on any such certificate within five (5) Business Days after the
delivery of such certificate. In preparing such certificate, a Lender may employ
such assumptions and allocations of costs and expenses as it shall in good faith
deem reasonable and may use any reasonable averaging and attribution method.
7.11 ERISA Information and Compliance. Promptly furnish to Agent
(i) immediately upon receipt, a copy of any notice of complete or partial
withdrawal liability under Title IV of ERISA and any notice from the PBGC under
Title IV of ERISA of an intent to terminate or appoint a trustee to administer
any Plan, (ii) if requested by Agent, promptly after the filing thereof with the
United States Secretary of Labor or the PBGC or the Internal Revenue Service,
copies of each annual and other report with respect to each Plan or any trust
created thereunder,
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(iii) immediately upon becoming aware of the occurrence of any "reportable
event," as such term is defined in Section 4043 of ERISA, for which the
disclosure requirements of Regulation Section 2615.3 promulgated by the PBGC
have not been waived, or of any "prohibited transaction," as such term is
defined in Section 4975 of the Code, in connection with any Plan or any trust
created thereunder, a written notice signed by the President or the principal
financial officer of Borrower or the applicable member of the Controlled Group
specifying the nature thereof, what action Borrower or the applicable member of
the Controlled Group is taking or proposes to take with respect thereto, and,
when known, any action taken by the PBGC, the Internal Revenue Service or the
Department of Labor with respect thereto, (iv) promptly after the filing or
receiving thereof by Borrower or any member of the Controlled Group of any
notice of the institution of any proceedings or other actions which may result
in the termination of any Plan, and (v) each request for waiver of the funding
standards or extension of the amortization periods required by Sections 303 and
304 of ERISA or Section 412 of the Code promptly after the request is submitted
by Borrower or any member of the Controlled Group to the Secretary of the
Treasury, the Department of Labor or the Internal Revenue Service, as the case
may be. To the extent required under applicable statutory funding requirements,
Borrower will fund, or will cause the applicable member of the Controlled Group
to fund, all current service pension liabilities as they are incurred under the
provisions of all Plans from time to time in effect, and comply with all
applicable provisions of ERISA, in each case, except to the extent that failure
to do the same would not reasonably be expected to have a material adverse
effect on the business, condition (financial or otherwise), operations or
Properties of any Obligor. Borrower covenants that it shall and shall cause each
member of the Controlled Group to (1) make contributions to each Plan in a
timely manner and in an amount sufficient to comply with the contribution
obligations under such Plan and the minimum funding standards requirements of
ERISA; (2) prepare and file in a timely manner all notices and reports required
under the terms of ERISA including but not limited to annual reports; and (3)
pay in a timely manner all required PBGC premiums, in each case, except to the
extent that failure to do the same would not reasonably be expected to have a
material adverse effect on the business, condition (financial or otherwise),
operations or Properties of any Obligor.
7.12 Additional Security Documents. As soon as practicable and in
any event within three (3) calendar months after an Additional Collateral Event
(except in the case of the payment in full of the Indebtedness currently owing
to Heller Financial, Inc., in which event these requirements must be satisfied
concurrently with such Additional Collateral Event), Borrower shall (a) execute
and deliver or cause to be executed and delivered a Mortgage and/or other
applicable Security Documents, in Proper Form and in an amount reasonably
satisfactory to the Majority Lenders, in favor of Agent and duly executed by the
applicable Obligor, granting a first-priority Lien upon the applicable
Additional Collateral (other than Excluded Assets) securing all of the
Obligations (except as the Majority Lenders may otherwise agree in order to
limit recording taxes or similar charges based upon the amount secured), and
such other documents (including, without limitation, all items required in
connection with the applicable Security Documents previously executed hereunder,
such as surveys, environmental assessments, certificates, legal opinions, all
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in Proper Form) as may be required by Agent or the Majority Lenders in
connection with the execution and delivery of such Security Documents; (b) where
applicable, deliver to Agent Franchise Agreements covering the Additional
Collateral and all such amendments to the BKC Consent, in Proper Form, as Agent
or the Majority Lenders may require to incorporate the Additional Collateral;
(c) where applicable, cause a title insurance underwriter satisfactory to Agent
to issue to Agent a Title Insurance Policy, in Proper Form, insuring the
first-priority Lien of each applicable Mortgage in such amount as is
satisfactory to the Majority Lenders; (d) deliver or cause to be delivered such
other documents or certificates consistent with the terms of this Agreement and
relating to the transactions contemplated hereby as Agent or the Majority
Lenders may reasonably request, and (e) pay in full all documentary stamps,
filing and recording fees, taxes and other fees and charges payable in
connection with the filing and recording of any Mortgage and/or any other
Security Document. The provisions of this Section are subject to the limitations
imposed upon Borrower and the other Obligors under the current Senior Notes
Documentation (without amendment except as agreed to in writing by Agent). To
the full extent permitted under the provisions of the Senior Notes
Documentation, Borrower shall (and shall cause each other Obligor to) execute
and deliver to Agent any Security Documents requested by Agent or the Majority
Lenders covering any Property of Borrower or any other Obligor (other than the
Excluded Assets), whether or not the Lien created by such Security Document is
otherwise provided for in this Agreement or other Credit Documents. It is the
stated objective of Borrower, each other Obligor, Agent and the Lenders to
maximize the extent to which Liens may be taken upon Property of Borrower and
the other Obligors without causing a default under the Senior Notes
Documentation and, to the extent reasonably requested by Agent or the Majority
Lenders, Borrower shall (and shall cause each Obligor to) cooperate in a timely
fashion to accomplish such objective.
7.13 Guaranties; Pledge of Subsidiary Stock. To the full extent
permitted under the provisions of the Senior Notes Documentation, and in any
event concurrently with any refinancing of the Senior Notes, Borrower shall (i)
cause Carrols Holdings and each of the Subsidiaries (other than Non-Recourse
Subsidiaries) of Borrower to execute and deliver to Agent a guaranty, in Proper
Form, whereby payment of all of the Obligations is guaranteed and (ii) pledge or
cause to be pledged all of the issued and outstanding equity interests in and to
Borrower and all of Borrower's interest in and to each of its Subsidiaries to
Agent as security for the Obligations pursuant to Loan Documents, in Proper
Form.
8. Negative Covenants.
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Borrower covenants and agrees with Agent and the Lenders that prior to
the termination of this Agreement it will not, and will not suffer or permit any
other Obligor (other than Carrols Holdings) to, do any of the following:
8.1 Borrowed Money Indebtedness. Create, incur, suffer or permit
to exist, or assume or guarantee, directly or indirectly, or become or remain
liable with respect to any Borrowed
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Money Indebtedness, whether direct, indirect, absolute, contingent or otherwise,
except the following: (a) Indebtedness under this Agreement and the other Loan
Documents and Indebtedness secured by Liens permitted by Section 8.2 hereof; (b)
the liabilities existing on the date of this Agreement and disclosed in the
financial statements delivered on or prior to the Effective Date pursuant to
Section 6.2 hereof, and subject to Section 8.10 hereof, all renewals, extensions
and replacements (but not increases) of any of the foregoing; (c) the Interest
Rate Risk Indebtedness, and (d) capitalized lease obligations to the extent
allowed by the other provisions of this Agreement.
8.2 Liens. Create or suffer to exist any Lien upon any of its
Property now owned or hereafter acquired, or acquire any Property upon any
conditional sale or other title retention device or arrangement or any purchase
money security agreement; or in any manner directly or indirectly sell, assign,
pledge or otherwise transfer any of its Accounts or General Intangibles;
provided, however, that any Obligor may create or suffer to exist Permitted
Liens.
8.3 Contingent Liabilities. Directly or indirectly guarantee the
performance or payment of, or purchase or agree to purchase, or assume or
contingently agree to become or be secondarily liable in respect of, any
obligation or liability of any other Person except for (a) the endorsement of
checks or other negotiable instruments in the ordinary course of business; (b)
obligations disclosed to Agent in the financial statements delivered on or prior
to the Effective Date pursuant to Section 6.2 hereof (but not increases of such
obligations after the Effective Date), and (c) those liabilities permitted under
Section 8.1 hereof.
8.4 Mergers, Consolidations and Dispositions of Assets. In any
single transaction or series of transactions, directly or indirectly: (a)
liquidate or dissolve (provided that Subsidiaries of Borrower which are not
parties to any Security Agreement or Mortgage may be liquidated or dissolved);
(b) be a party to any merger or consolidation unless and so long as (i) no
Default or Event of Default has occurred that is then continuing, (ii)
immediately thereafter and giving effect thereto, no event will occur and be
continuing which constitutes a Default, (iii) an Obligor is the surviving
Person; (iv) the surviving Person ratifies and assumes each Loan Document to
which any party to such merger was a party, and (v) Agent is given at least 30
days' prior notice of such merger or consolidation; (c) sell, convey or lease
all or any substantial part of its assets, except for sales of Property in the
ordinary course of business and except for sales not exceeding, for the period
from the date hereof through December 31, 1997 or for any subsequent fiscal
year, $15,000,000; provided, however, that, unless the Majority Lenders shall
have otherwise consented in writing, the net proceeds realized from assets sales
permitted under this exception (other than sales of Property in the ordinary
course of business) must (x) if the assets sold secure Advance Loans, be
immediately applied to the payment of such Advance Loans (with such payments to
be credited pro rata to all of the installments required to be paid on such
Advance Loans) and (y) if the assets sold do not secure any Advance Loans or if
the assets sold secure the Revolving Loans, within two hundred seventy (270)
days after the applicable sale, either (I) be used to make a prepayment on all
of the Advance Loans pro rata based on their outstanding principal balances
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(with such payments to be credited pro rata to all of the installments required
to be paid on such Advance Loans) or (II) be applied to a portion of the closing
costs in respect of an acquisition permitted under the terms hereof (provided,
however, that no assets securing the Revolving Loans may be sold if, after
giving effect to such sale, less than 100 restaurants shall remain as Collateral
for the Revolving Loans and provided further, however, that at least 60 of such
remaining units must be located outside the State of New York); (d) enter into
any sale/leaseback transaction unless (x) such sale/leaseback transaction does
not violate the Senior Notes Documentation and (y) the Majority Lenders shall
otherwise consent in writing and except for sale/leaseback transactions with
respect to the sites described on Exhibit K hereto (so long as, after giving
effect to such sale/leaseback, at least 100 restaurants shall remain as
Collateral for the Revolving Loans), the Agent, for the benefit of the Lenders,
shall be granted a lien (concurrently with the applicable sale/leaseback
transaction unless the Majority Lenders shall otherwise consent in writing) on
the resulting leasehold interests through the inclusion of such leasehold
interests in an Acquisition Package (with the acquisition costs of the
underlying fee title to be used in calculating the amount of the applicable
Advance Loan Tranche); provided, however, that, unless the Majority Lenders
shall have otherwise consented in writing, the net proceeds realized from asset
sales permitted under this exception must be applied or used in the same manner
as provided in Section 8.4(c), or (e) except for Liens in favor of Agent,
pledge, transfer or otherwise dispose of any equity interest in any Obligor or
any Indebtedness of any Obligor or issue or permit any other Obligor (other than
Carrols Holdings) to issue any additional equity interest. Nothing in this
Agreement or any of the other Loan Documents shall prohibit any Obligor from
selling obsolete equipment or from replacing used equipment in the ordinary
course of business.
8.5 Redemption, Dividends and Distributions. At any time: (a)
redeem, retire or otherwise acquire, directly or indirectly, any equity interest
in any Obligor or (b) make any distributions of any Property or cash to the
owner of any of the equity interests in any Obligor other than Permitted
Dividends.
8.6 Nature of Business. Change the nature of its business or enter
into any business which is substantially different from the business in which it
is presently engaged. The primary business of each Obligor (other than Carrols
Holdings) shall at all times be the direct or indirect ownership and operation
of restaurants under Burger King franchises.
8.7 Transactions with Related Parties. Enter into any transaction
or agreement with any officer, director or holder of any equity interest in any
Obligor (or any Affiliate of any such Person) unless the same is upon terms
substantially similar to those obtainable from wholly unrelated sources (to the
best knowledge of the executive officers of the applicable Obligor or Affiliate,
after making reasonable inquiry of the personnel and records of the applicable
Obligor or Affiliate). Performance under the present terms of the Senior Notes
Documentation, the Purchase Agreements and the Lease Agreements (without
amendment except as agreed to in writing by Agent) shall not cause a Default
hereunder.
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8.8 Loans and Investments. Make any loan, advance, extension of
credit or capital contribution to, or make or have any Investment in, any
Person, or make any commitment to make any such extension of credit or
Investment, except (a) Permitted Investments and (b) normal and reasonable
advances in the ordinary course of business to officers and employees.
8.9 Subsidiaries. Form, create or acquire any Subsidiary except
for Non-Recourse Subsidiaries and other Subsidiaries approved by the Majority
Lenders in writing.
8.10 Key Agreements. Terminate or agree to the termination of any
Key Agreement or amend, modify or obtain or grant a waiver of any provision of
any of the Key Agreements if such action would reasonably be expected to have a
material adverse effect on the Properties, liabilities, condition (financial or
otherwise), business or operations of any Obligor. Borrower will not accept or
permit any assignment to any Obligor of the leasehold interest under any of the
Underlying Lease Agreements without the express prior written consent of Agent.
Any refinancing of the Senior Notes shall require the prior written consent of
Agent and the Majority Lenders, which consent will not be withheld so long as
(i) the refinancing shall be upon terms no less favorable to the Obligors and to
the Lenders than those set forth in the existing terms of the Senior Notes
Documentation (without amendment except as agreed to in writing by Agent), (ii)
no Default or Event of Default shall have occurred and be continuing (or would
result from such refinancing) and (iii) such refinancing shall permit all of the
Obligations to be secured by all of the real Property and material personal
Property owned by each Obligor (other than Carrols Holdings), other than the
Excluded Assets and by all of the issued and outstanding equity interests in and
to Borrower and shall permit Carrols Holdings and each Subsidiary of Borrower to
execute and deliver to Agent a guaranty, in Proper Form, whereby payment of all
of the Obligations is guaranteed.
8.11 Organizational Documents. Amend, modify, restate or supplement
any of its Organizational Documents if such action would reasonably be expected
to materially and adversely affect any Collateral, Loan or Obligation or the
abilities of Borrower to perform its Obligations under any Loan Document, unless
such action shall be consented to in writing by Agent.
8.12 Certificate of Title Property. Borrower will not permit the
aggregate value (determined on the greater of book or market value) of Property
owned by any Obligor (other than Carrols Holdings) which is subject to
certificate of title laws to exceed $250,000 unless the Majority Lenders shall
have otherwise consented in writing.
8.13 Unfunded Liabilities. Incur any Unfunded Liabilities after the
Effective Date or allow any Unfunded Liabilities in excess of $500,000, in the
aggregate, to arise or exist.
8.14 Acquisitions of Assets. Acquire any real Property or any
material personal Property after the Effective Date unless the following
conditions precedent shall have been satisfied:
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(a) No Default or Event of Default shall have occurred
and be continuing (or would result from the closing of the applicable
acquisition, and Agent shall have received adequate information
relating to the applicable acquisition to provide confirmation of this
condition.
(b) If the aggregate purchase price of the applicable
acquisition equals $40,000,000 or more, all of the acquisitions
comprising such acquisition shall require the prior written approval of
the Majority Lenders (Lenders agree that they shall respond to any
request for such approval within thirty (30) days after receipt of such
request in writing accompanied by adequate information relating to all
such acquisitions in order to evaluate their projected impact. If any
Lender shall fail to respond to such a request within such thirty (30)
day period, the applicable Lender shall be deemed to have given its
consent to all of such acquisitions).
(c) If Borrower or any other Obligor (other than Carrols
Holdings) shall have acquired any real Property or material personal
Property without having obtained any Advance Loans to finance the
purchase thereof, Borrower shall give written notice to Agent
concurrently with such acquisition. Such written notice shall indicate
the acquisition date of the applicable Property. At any time after 225
days after such acquisition date but prior to the expiration of the 270
Day Period commencing on such acquisition date, the Majority Lenders
may, by written notice to Borrower, require that Borrower borrow
Advance Loans in connection with such acquisition and satisfy all
conditions precedent to such Advance Loans prior to the expiration of
such 270 Day Period. The amount of the applicable Advance Loan Tranche
shall be (i) if the aggregate costs related to such acquisition are
less than $13,333,334, the lesser of 75% of such aggregate costs and
the Advance Loan Commitments remaining unused or (ii) if the aggregate
costs related to such acquisition are $13,333,334 or more, (A) the
lesser of $10,000,000 and the Advance Loan Commitments remaining unused
or (B) such greater amount as Borrower may specify (not to exceed the
lesser of 75% of such aggregate costs and the Advance Loan Commitments
remaining unused). The sites identified on Exhibit K hereto under the
heading "October 29, 1996 Purchase of Real Estate" shall be subject to
the provisions of Section 8.4(d) hereof and this Section 8.14(c).
(d) Unless the Majority Lenders shall have given their
prior written consent, no Obligor other than Borrower and other than
Carrols Holdings (whose acquisitions are not restricted by this
Section) may acquire any real Property or any material personal
Property pursuant to this Section.
8.15 Prepayment of Heller Financial. Borrower may not prepay any of
the term loan Indebtedness currently owing to Heller Financial, Inc. or
refinance the revolving loan facility currently owing to Heller Financial, Inc.
unless all such Indebtedness is paid in full (in
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consideration of the assignment of such Indebtedness to Agent and Lenders) and
the Liens securing such Indebtedness shall have been assigned to Agent.
9. Defaults.
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9.1 Events of Default. If any one or more of the following events
(herein called "Events of Default") shall occur, then Agent shall, at the
direction of the Majority Lenders, do any or all of the following: (1) without
notice to Borrower or any other Person, declare the Revolving Loan Commitments
and Advance Loan Commitments terminated (whereupon the Revolving Loan
Commitments and Advance Loan Commitments shall be terminated) and/or accelerate
the Revolving Loan Termination Date and/or the Advance Loan Termination Date to
a date as early as the date of termination of the Revolving Loan Commitments or
the Advance Loan Commitments, as the case may be; (2) terminate any Letter of
Credit allowing for such termination, by sending a notice of termination as
provided therein and require Borrower to provide Cover for outstanding Letters
of Credit; (3) declare the principal amount then outstanding of and the unpaid
accrued interest on the Loans and Reimbursement Obligations and all fees and all
other amounts payable hereunder, under the Notes and under the other Loan
Documents to be forthwith due and payable, whereupon such amounts shall be and
become immediately due and payable, without notice (including, without
limitation, notice of acceleration and notice of intent to accelerate),
presentment, demand, protest or other formalities of any kind, all of which are
hereby expressly waived by Borrower; provided that in the case of the occurrence
of an Event of Default with respect to any Obligor referred to in clause (f),
(g) or (h) of this Section 9.1, the Revolving Loan Commitments and Advance Loan
Commitments shall be automatically terminated and the principal amount then
outstanding of and unpaid accrued interest on the Loans and the Reimbursement
Obligations and all fees and all other amounts payable hereunder, under the
Notes and under the other Loan Documents shall be and become automatically and
immediately due and payable, without notice (including, without limitation,
notice of acceleration and notice of intent to accelerate), presentment, demand,
protest or other formalities of any kind, all of which are hereby expressly
waived by Borrower, and (4) exercise any or all other rights and remedies
available to Agent or any of the Lenders under the Loan Documents, at law or in
equity:
(a) Payments - (i) any Obligor shall fail to make any
payment or required prepayment of any installment of principal on the
Loans or any Reimbursement Obligation payable under the Notes, this
Agreement or the other Loan Documents when due or (ii) any Obligor
fails to make any payment or required prepayment of interest with
respect to the Loans, any Reimbursement Obligation or any other fee or
amount under the Notes, this Agreement or the other Loan Documents when
due and such failure to pay continues unremedied for a period of five
days; or
(b) Other Obligations - any Obligor shall default in the
payment when due of any principal of or interest on any Indebtedness
having an outstanding principal amount of at least $1,000,000 (other
than the Loans and Reimbursement Obligations) and such
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default shall continue beyond any applicable period of grace; or any
event or condition shall occur which results in the acceleration of the
maturity of any such Indebtedness or enables (or, with the giving of
notice or lapse of time or both, would enable) the holder of any such
Indebtedness or any Person acting on such holder's behalf to accelerate
the maturity thereof and such event or condition shall not be cured
within any applicable period of grace; or
(c) Representations and Warranties - any representation
or warranty made or deemed made by or on behalf of any Obligor in this
Agreement or any other Loan Document or in any certificate furnished or
made by any Obligor to Agent or the Lenders in connection herewith or
therewith shall prove to have been incorrect, false or misleading in
any material respect as of the date thereof or as of the date as of
which the facts therein set forth were stated or certified or deemed
stated or certified; or
(d) Affirmative Covenants - (i) default shall be made in
the due observance or performance of any of the covenants or agreements
contained in Section 7.3 hereof, (ii) default shall be made in the due
observance or performance of any of the covenants or agreements
contained in Sections 7.2, 7.4, 7.7 or 7.8 hereof and, in each case,
such default continues unremedied for a period of 20 days after (x)
notice thereof is given by Agent to Borrower or (y) such default
otherwise becomes known to any executive officer of Borrower, whichever
is earlier, or (iii) default is made in the due observance or
performance of any of the other covenants and agreements contained in
Section 7 hereof or any other affirmative covenant of any Obligor
contained in this Agreement or any other Loan Document and such default
continues unremedied for a period of 30 days after (x) notice thereof
is given by Agent to Borrower or (y) such default otherwise becomes
known to any executive officer of Borrower, whichever is earlier; or
(e) Negative Covenants - default is made in the due
observance or performance by Borrower of any of the other covenants or
agreements contained in Section 8 of this Agreement or of any other
negative covenant of any Obligor contained in this Agreement or any
other Loan Document; or
(f) Involuntary Bankruptcy or Receivership Proceedings -
a receiver, conservator, liquidator or trustee of any Obligor or of any
of its Property is appointed by the order or decree of any court or
agency or supervisory authority having jurisdiction, and such decree or
order remains in effect for more than 60 days; or any Obligor is
adjudicated bankrupt or insolvent; or any of such Person's Property is
sequestered by court order and such order remains in effect for more
than 60 days; or a petition is filed against any Obligor under any
state or federal bankruptcy, reorganization, arrangement, insolvency,
readjustment or debt, dissolution, liquidation or receivership law or
any jurisdiction, whether now or hereafter in effect, and is not
dismissed within 60 days after such filing; or
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(g) Voluntary Petitions or Consents - any Obligor
commences a voluntary case or other proceeding or order seeking
liquidation, reorganization, arrangement, insolvency, readjustment of
debt, dissolution, liquidation or other relief with respect to itself
or its debts or other liabilities under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the appointment
of a trustee, receiver, liquidator, custodian or other similar official
of it or any substantial part of its Property, or consents to any such
relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against
it, or fails generally to, or cannot, pay its debts generally as they
become due or takes any corporate action to authorize or effect any of
the foregoing; or
(h) Assignments for Benefit of Creditors or Admissions of
Insolvency - any Obligor makes an assignment for the benefit of its
creditors, or admits in writing its inability to pay its debts
generally as they become due, or consents to the appointment of a
receiver, trustee, or liquidator of such Obligor or of all or any
substantial part of its Property; or
(i) Undischarged Judgments - a final non-appealable
judgment or judgments for the payment of money exceeding, in the
aggregate, $1,000,000 (exclusive of amounts covered by insurance) is
rendered by any court or other governmental body against any Obligor
and such Obligor does not discharge the same or provide for its
discharge in accordance with its terms, or procure a stay of execution
thereof within 30 days from the date of entry thereof; or
(j) Security Documents - any Security Document for any
reason ceases to create a valid and perfected Lien of the first
priority (subject to the Permitted Liens), required thereby on any of
the Collateral purported to be covered thereby and securing that
portion of the Obligations which is therein designated as being
secured, or any Obligor (or any other Person who may have granted or
purported to grant such Lien) will so state in writing or, after the
creation thereof as herein provided, Agent shall cease to have a first
priority Lien upon all of the equity interests of Borrower securing all
of the Revolving Loan Obligations (and such other Obligations as may be
required by this Agreement); or
(k) Concealment - any Obligor shall have concealed,
removed, or permitted to be concealed or removed, any part of its
Property, with intent to hinder, delay or defraud its creditors or any
of them, or shall have made any transfer of its Property to or for the
benefit of a creditor at a time when other creditors similarly situated
have not been paid; or
(l) Ownership Change or Encumbrance - any Person other
than Carrols Holdings shall own any equity interest in Borrower or any
Person other than Agent or Heller Financial, Inc. shall acquire any
Lien on any of the equity interests in Borrower;
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the executive management (vice president or more senior) of Borrower,
Atlantic Restaurants, Inc., Madison Dearborn Capital Partners, L.P. and
Madison Dearborn Capital Partners II, L.P., and/or one or more of their
Affiliates, shall cease to own (and control the voting rights in
respect of), in the aggregate, at least 67% of the equity interests in
Carrols Holdings at all times prior to the closing of any initial
public offering by Borrower and 51% at all times thereafter; or any
Person other than Borrower shall own any equity interest in any
Subsidiary of Borrower (other than a Non-Recourse Subsidiary or to the
extent otherwise expressly permitted in writing by the Majority
Lenders) or any Person shall acquire any Lien on Borrower's interest in
and to the equity interest in any Subsidiary of Borrower (other than a
Non-Recourse Subsidiary or to the extent otherwise expressly permitted
in writing by the Majority Lenders); or
(m) Uninsured Loss - any Obligor shall be the subject of
any uninsured or unindemnified casualty losses exceeding, in the
aggregate, $500,000 in any fiscal year.
(n) Failure to Effect Refinancing - Borrower shall fail
to refinance the term and revolving loan Indebtedness currently owing
to Heller Financial, Inc. by May 15, 1997.
9.2 Right of Setoff. Upon the occurrence and during the
continuance of any Event of Default, each Lenders is hereby authorized at any
time and from time to time, without notice to any Obligor (any such notice being
expressly waived by Borrower and the other Obligors), to setoff and apply any
and all deposits (general or special, time or demand, provisional or final (but
excluding the funds held in accounts clearly designated as escrow or trust
accounts held by Borrower or any other Obligor for the benefit of Persons which
are not Affiliates of any Obligor, whether or not such setoff results in any
loss of interest or other penalty, and including without limitation all
certificates of deposit) at any time held, and any other funds or Property at
any time held, and other Indebtedness at any time owing by such Lender to or for
the credit or the account of Borrower or any other Obligor against any and all
of the Obligations irrespective of whether or not such Lender or Agent will have
made any demand under this Agreement, the Notes or any other Loan Document.
Should the right of any Lender to realize funds in any manner set forth
hereinabove be challenged and any application of such funds be reversed, whether
by court order or otherwise, the Lenders shall make restitution or refund to
Borrower pro rata in accordance with their Revolving Loan Commitments. Each
Lender agrees to promptly notify Borrower and Agent after any such setoff and
application, provided that the failure to give such notice will not affect the
validity of such setoff and application. The rights of Agent and the Lenders
under this Section are in addition to other rights and remedies (including
without limitation other rights of setoff) which Agent or the Lenders may have.
This Section is subject to the terms and provisions of Sections 4.5 and 11.7
hereof.
9.3 Collateral Account. Borrower hereby agrees, in addition to the
provisions of Section 9.1 hereof, that upon the occurrence and during the
continuance of any Event of Default, it shall, if requested by Agent or the
Majority Lenders (through Agent), pay to Agent an amount
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in immediately available funds equal to the then aggregate amount available for
drawings under all Letters of Credit issued for the account of Borrower, which
funds shall be held by Agent as Cover.
9.4 Preservation of Security for Unmatured Reimbursement
Obligations. In the event that, following (i) the occurrence of an Event of
Default and the exercise of any rights available to Agent or any Lender under
the Loan Documents, and (ii) payment in full of the principal amount then
outstanding of and the accrued interest on the Loans and Reimbursement
Obligations and fees and all other amounts payable hereunder and under the Notes
and all other amounts secured by the Security Documents, any Letters of Credit
shall remain outstanding and undrawn upon, Agent shall be entitled to hold (and
Borrower and each other Obligor hereby grants and conveys to Agent a security
interest in and to) all cash or other Property ("Proceeds of Remedies") realized
or arising out of the exercise of any rights available under the Loan Documents,
at law or in equity, including, without limitation, the proceeds of any
foreclosure, as collateral for the payment of any amounts due or to become due
under or in respect of such Letters of Credit. Such Proceeds of Remedies shall
be held for the ratable benefit of the Lenders. The rights, titles, benefits,
privileges, duties and obligations of Agent with respect thereto shall be
governed by the terms and provisions of this Agreement and, to the extent not
inconsistent with this Agreement, the applicable Security Documents. Agent may,
but shall have no obligation to, invest any such Proceeds of Remedies in such
manner as Agent, in the exercise of its sole discretion, deems appropriate. Such
Proceeds of Remedies shall be applied to Reimbursement Obligations arising in
respect of any such Letters of Credit and/or the payment of any Lender's
obligations under any such Letter of Credit when such Letter of Credit is drawn
upon. Nothing in this Section shall cause or permit an increase in the maximum
amount of the Revolving Loan Obligations permitted to be outstanding from time
to time under this Agreement.
9.5 Remedies Cumulative. No remedy, right or power conferred upon
Agent or any Lender is intended to be exclusive of any other remedy, right or
power given hereunder or now or hereafter existing at law, in equity, or
otherwise, and all such remedies, rights and powers shall be cumulative.
10. Agent.
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10.1 Appointment, Powers and Immunities. Each Lender hereby
irrevocably appoints and authorizes Agent to act as its agent hereunder, under
the Letters of Credit and under the other Loan Documents with such powers as are
specifically delegated to Agent by the terms hereof and thereof, together with
such other powers as are reasonably incidental thereto. Any Loan Documents
executed in favor of Agent shall be held by Agent for the ratable benefit of the
Lenders. Agent ("Agent" as used in this Section 10 shall include reference to
its Affiliates and its own and its Affiliates' respective officers,
shareholders, directors, employees and agents) (a) shall not have any duties or
responsibilities except those expressly set forth in this Agreement, the Letters
of Credit, and the other Loan Documents, and shall not by reason of this
Agreement or
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any other Loan Document be a trustee or fiduciary for any Lender; (b) shall not
be responsible to any Lender for any recitals, statements, representations or
warranties contained in this Agreement, the Letters of Credit or any other Loan
Document, or in any certificate or other document referred to or provided for
in, or received by any of them under, this Agreement, the Letters of Credit or
any other Loan Document, or for the value, validity, effectiveness, genuineness,
enforceability, execution, filing, registration, collectibility, recording,
perfection, existence or sufficiency of this Agreement, the Letters of Credit,
or any other Loan Document or any other document referred to or provided for
herein or therein or any Property covered thereby or for any failure by any
Obligor or any other Person to perform any of its obligations hereunder or
thereunder, and shall not have any duty to inquire into or pass upon any of the
foregoing matters; (c) shall not be required to initiate or conduct any
litigation or collection proceedings hereunder or under the Letters of Credit or
any other Loan Document except to the extent requested by the Majority Lenders;
(d) shall not be responsible for any mistake of law or fact or any action taken
or omitted to be taken by it hereunder or under the Letters or Credit or any
other Loan Document or any other document or instrument referred to or provided
for herein or therein or in connection herewith or therewith, including, without
limitation, pursuant to its own negligence, except for its own gross negligence
or willful misconduct; (e) shall not be bound by or obliged to recognize any
agreement among or between Borrower and any Lender to which Agent is not a
party, regardless of whether Agent has knowledge of the existence of any such
agreement or the terms and provisions thereof; (f) shall not be charged with
notice or knowledge of any fact or information not herein set out or provided to
Agent in accordance with the terms of this Agreement or any other Loan Document;
(g) shall not be responsible for any delay, error, omission or default of any
mail, telegraph, cable or wireless agency or operator, and (h) shall not be
responsible for the acts or edicts of any Governmental Authority. Agent may
employ agents and attorneys-in-fact and shall not be responsible for the
negligence or misconduct of any such agents or attorneys-in-fact selected by it
with reasonable care. Without in any way limiting any of the foregoing, each
Lender acknowledges that Agent shall have no greater responsibility in the
operation of the Letters of Credit than is specified in the Uniform Customs and
Practice for Documentary Credits (1993 Revision, International Chamber of
Commerce Publication No. 500). In any foreclosure proceeding concerning any
Collateral, each holder of an Obligation if bidding for its own account or for
its own account and the accounts of other Lenders is prohibited from including
in the amount of its bid an amount to be applied as a credit against the
Obligations held by it or the Obligations held by the other Lenders; instead,
such holder must bid in cash only. However, in any such foreclosure proceeding,
Agent may (but shall not be obligated to) submit a bid for all Lenders
(including itself) in the form of a credit against the Obligations, and Agent or
its designee may (but shall not be obligated to) accept title to such collateral
for and on behalf of all Lenders.
10.2 Reliance. Agent shall be entitled to rely upon any
certification, notice or other communication (including any thereof by
telephone, telex, telegram or cable) believed by it to be genuine and correct
and to have been signed or sent by or on behalf of the proper Person or Persons,
and upon advice and statements of legal counsel (which may be counsel for
Borrower),
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independent accountants and other experts selected by Agent. Agent shall not be
required in any way to determine the identity or authority of any Person
delivering or executing the same. As to any matters not expressly provided for
by this Agreement, the Letters of Credit, or any other Loan Document, Agent
shall in all cases be fully protected in acting, or in refraining from acting,
hereunder and thereunder in accordance with instructions of the Majority
Lenders, and any action taken or failure to act pursuant thereto shall be
binding on all of the Lenders. Pursuant to instructions of the Majority Lenders,
Agent shall have the authority to execute releases of the Security Documents on
behalf of the Lenders without the joinder of any Lender. If any order, writ,
judgment or decree shall be made or entered by any court affecting the rights,
duties and obligations of Agent under this Agreement or any other Loan Document,
then and in any of such events Agent is authorized, in its sole discretion, to
rely upon and comply with such order, writ, judgment or decree which it is
advised by legal counsel of its own choosing is binding upon it under the terms
of this Agreement, the relevant Loan Document or otherwise; and if Agent
complies with any such order, writ, judgment or decree, then it shall not be
liable to any Lender or to any other Person by reason of such compliance even
though such order, writ, judgment or decree may be subsequently reversed,
modified, annulled, set aside or vacated.
10.3 Defaults. Agent shall not be deemed to have knowledge of the
occurrence of a Default (other than the non-payment of principal of or interest
on Loans or Reimbursement Obligations) unless Agent has received notice from a
Lender or Borrower specifying such Default and stating that such notice is a
"Notice of Default." In the event that Agent receives such a Notice of Default,
Agent shall give prompt notice thereof to the Lenders (and shall give each
Lender prompt notice of each such non-payment). Agent shall (subject to Section
10.7 hereof) take such action with respect to such Notice of Default as shall be
directed by the Majority Lenders and within its rights under the Loan Documents
and at law or in equity, provided that, unless and until Agent shall have
received such directions, Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, permitted hereby with respect to
such Notice of Default as it shall deem advisable in the best interests of the
Lenders and within its rights under the Loan Documents, at law or in equity.
10.4 Material Written Notices. In the event that Agent receives any
written notice of a material nature from the Borrower or any Obligor under the
Loan Documents, Agent shall promptly inform each of the Lenders thereof.
10.5 Rights as a Lender. With respect to its Revolving Loan
Commitments and Advance Loan Commitments and the Loans made and Letter of Credit
Liabilities, TCB in its capacity as a Lender hereunder shall have the same
rights and powers hereunder as any other Lender and may exercise the same as
though it were not acting in its agency capacity, and the term "Lender" or
"Lenders" shall, unless the context otherwise indicates, include Agent in its
individual capacity. Agent may (without having to account therefor to any
Lender) accept deposits from, lend money to and generally engage in any kind of
banking, trust, letter of credit, agency or other business with Borrower (and
any of its Affiliates) as if it were not acting as Agent, and Agent may accept
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fees and other consideration from Borrower (in addition to the fees heretofore
agreed to between Borrower and Agent) for services in connection with this
Agreement or otherwise without having to account for the same to the Lenders.
10.6 Indemnification. The Lenders agree to indemnify Agent (to the
extent not reimbursed under Section 2.2(c), Section 11.3 or Section 11.4 hereof,
but without limiting the obligations of Borrower under said Sections 2.2(c),
11.3 and 11.4), ratably in accordance with the sum of the Lenders' respective
Revolving Loan Commitments, Advance Loan Commitments and Advance Loans, for any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind and nature
whatsoever, REGARDLESS OF WHETHER CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE
OF ANY INDEMNIFIED PARTIES, which may be imposed on, incurred by or asserted
against Agent in any way relating to or arising out of this Agreement, the
Letters of Credit or any other Loan Document or any other documents contemplated
by or referred to herein or therein or the transactions contemplated hereby or
thereby (including, without limitation, the costs and expenses which Borrower is
obligated to pay under Sections 2.2(c), 11.3 and 11.4 hereof, interest,
penalties, attorneys' fees and amounts paid in settlement, but excluding, unless
a Default has occurred and is continuing, normal administrative costs and
expenses incident to the performance of its agency duties hereunder) or the
enforcement of any of the terms hereof or thereof or of any such other
documents; provided that no Lender shall be liable for any of the foregoing to
the extent they arise from the gross negligence or willful misconduct of the
party to be indemnified. The obligations of the Lenders under this Section 10.6
shall survive the termination of this Agreement and the repayment of the
Obligations.
10.7 Non-Reliance on Agent and Other Lenders. Each Lender agrees
that it has received current financial information with respect to Borrower and
each other Obligor that it has, independently and without reliance on Agent or
any other Lender and based on such documents and information as it has deemed
appropriate, made its own credit analysis of Borrower and each other Obligor and
decision to enter into this Agreement and that it will, independently and
without reliance upon Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under this Agreement or
any of the other Loan Documents. Agent shall not be required to keep itself
informed as to the performance or observance by any Obligor of this Agreement,
the Letters of Credit or any of the other Loan Documents or any other document
referred to or provided for herein or therein or to inspect the properties or
books of any Obligor. Except for notices, reports and other documents and
information expressly required to be furnished to the Lenders by Agent
hereunder, under the Letters of Credit or the other Loan Documents, Agent shall
not have any duty or responsibility to provide any Lender with any credit or
other information concerning the affairs, financial condition or business of any
Obligor (or any of their affiliates) which may come into the possession of
Agent.
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10.8 Failure to Act. Except for action expressly required of Agent
hereunder, under the Letters of Credit or under the other Loan Documents, Agent
shall in all cases be fully justified in failing or refusing to act hereunder
and thereunder unless it shall receive further assurances to its satisfaction by
the Lenders of their indemnification obligations under Section 10.6 hereof
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action.
10.9 Resignation or Removal of Agent. Subject to the appointment
and acceptance of a successor Agent as provided below, Agent may resign at any
time by giving notice thereof to the Lenders and Borrower, and Agent may be
removed at any time with or without cause by the Majority Lenders; provided,
that Agent shall continue as Agent until such time as any successor shall have
accepted appointment as Agent hereunder. Upon any such resignation or removal,
(i) the Majority Lenders without the consent of Borrower shall have the right to
appoint a successor Agent so long as such successor Agent is also a Lender at
the time of such appointment and (ii) the Majority Lenders shall have the right
to appoint a successor Agent that is not a Lender at the time of such
appointment so long as Borrower consents to such appointment (which consent
shall not be unreasonably withheld). If no successor Agent shall have been so
appointed by the Majority Lenders and accepted such appointment within 30 days
after the retiring Agent's giving of notice of resignation or the Majority
Lenders' removal of the retiring Agent, then the retiring Agent may, on behalf
of the Lenders, appoint a successor Agent. Any successor Agent shall be a bank
which has an office in the United States and a combined capital and surplus of
at least $250,000,000. Upon the acceptance of any appointment as Agent hereunder
by a successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent
and the retiring Agent shall be discharged from its duties and obligations
hereunder and under any other Loan Documents. Such successor Agent shall
promptly specify by notice to Borrower its Principal Office referred to in
Section 3.1 and Section 4 hereof. After any retiring Agent's resignation or
removal hereunder as Agent, the provisions of this Section 10 shall continue in
effect for its benefit in respect of any actions taken or omitted to be taken by
it while it was acting as Agent.
10.10 No Partnership. Neither the execution and delivery of this
Agreement nor any of the other Loan Documents nor any interest the Lenders,
Agent or any of them may now or hereafter have in all or any part of the
Obligations shall create or be construed as creating a partnership, joint
venture or other joint enterprise between the Lenders or among the Lenders and
Agent. The relationship between the Lenders, on the one hand, and Agent, on the
other, is and shall be that of principals and agent only, and nothing in this
Agreement or any of the other Loan Documents shall be construed to constitute
Agent as trustee or other fiduciary for any Lender or to impose on Agent any
duty, responsibility or obligation other than those expressly provided for
herein and therein.
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11. Miscellaneous.
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11.1 Waiver. No waiver of any Default or Event of Default shall be
a waiver of any other Default or Event of Default. No failure on the part of
Agent or any Lender to exercise and no delay in exercising, and no course of
dealing with respect to, any right, power or privilege under any Loan Document
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power or privilege thereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The remedies
provided in the Loan Documents are cumulative and not exclusive of any remedies
provided by law or in equity.
11.2 Notices. All notices and other communications provided for
herein (including, without limitation, any modifications of, or waivers or
consents under, this Agreement) shall be given or made by telex, telegraph,
telecopy (confirmed by mail), cable or other writing and telexed, telecopied,
telegraphed, cabled, mailed or delivered to the intended recipient at the
"Address for Notices" specified below its name on the signature pages hereof (or
provided for in an Assignment and Acceptance); or, as to any party hereto, at
such other address as shall be designated by such party in a notice (given in
accordance with this Section) (i) as to Borrower, to Agent, (ii) as to Agent, to
Borrower and to each Lender, and (iii) as to any Lender, to Borrower and Agent.
Except as otherwise provided in this Agreement, all such notices or
communications shall be deemed to have been duly given when (i) transmitted by
telex or telecopier or delivered to the telegraph or cable office, (ii)
personally delivered (iii) one Business Day after deposit with an overnight mail
or delivery service, postage prepaid or (iv) three Business Days' after deposit
in a receptacle maintained by the United States Postal Service, postage prepaid,
registered or certified mail, return receipt requested, in each case given or
addressed as aforesaid.
11.3 Expenses, Etc. Whether or not any Loan is ever made or any
Letter of Credit ever issued, Borrower shall pay or reimburse within 10 days
after written demand (a) Agent for paying the reasonable fees and expenses of
legal counsel to Agent, together with the reasonable fees and expenses of each
local counsel to Agent, in connection with the preparation, negotiation,
execution and delivery of this Agreement (including the exhibits and schedules
hereto), the Security Documents and the other Loan Documents and the making of
the Loans and the issuance of Letters of Credit hereunder, and any modification,
supplement or waiver of any of the terms of this Agreement, the Letters of
Credit or any other Loan Document; (b) Agent for any lien search fees,
collateral audit fees, appraisal fees, survey fees, environmental study fees,
and title insurance costs and premiums; (c) Agent for reasonable out-of-pocket
expenses incurred in connection with the preparation, documentation,
administration and syndication (with reimbursable syndication expenses not to
exceed $10,000) of the Loans or any of the Loan Documents (including, without
limitation, the advertising, marketing, printing, publicity, duplicating,
mailing and similar expenses) of the Loans and Letter of Credit Liabilities; (d)
Agent for paying all transfer, stamp, documentary or other similar taxes,
assessments or charges levied by any governmental or revenue authority in
respect of this Agreement, any Letter of Credit or any other Loan Document or
any other document referred to herein or therein; (e) Agent for paying all
costs, expenses, taxes,
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assessments and other charges incurred in connection with any filing,
registration, recording or perfection of any security interest contemplated by
this Agreement, the Title Insurance Policies, any Security Document or any
document referred to herein or therein, and (f) following the occurrence and
during the continuation of an Event of Default, any Lender or Agent for paying
all amounts reasonably expended, advanced or incurred by such Lender or Agent to
satisfy any obligation of any Obligor under this Agreement or any other Loan
Document, to protect the Collateral, to collect the Obligations or to enforce,
protect, preserve or defend the rights of the Lenders or Agent under this
Agreement or any other Loan Document, including, without limitation, fees and
expenses incurred in connection with such Lender's or Agent's participation as a
member of a creditor's committee in a case commenced under the Bankruptcy Code
or other similar law, fees and expenses incurred in connection with lifting the
automatic stay prescribed in ss. 362 of the Bankruptcy Code and fees and
expenses incurred in connection with any action pursuant to ss. 1129 of the
Bankruptcy Code and all other customary out-of-pocket expenses incurred by such
Lender or Agent in connection with such matters, together with interest thereon
at the Past Due Rate on each such amount until the date of reimbursement to such
Lender or Agent.
11.4 Indemnification. Borrower shall indemnify each of Agent, the
Lenders, and each affiliate thereof and their respective directors, officers,
employees and agents from, and hold each of them harmless against, any and all
losses, liabilities, claims or damages to which any of them may become subject,
REGARDLESS OF WHETHER CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE OF ANY
INDEMNIFIED PARTIES, insofar as such losses, liabilities, claims or damages
arise out of or result from any (i) actual or proposed use by Borrower of the
proceeds of any extension of credit (whether a Loan or a Letter of Credit) by
any Lender hereunder; (ii) breach by any Obligor of this Agreement or any other
Loan Document; (iii) violation by any Obligor of any Legal Requirement; (iv)
investigation, litigation or other proceeding relating to any of the foregoing,
and Borrower shall reimburse Agent, each Lender, and each Affiliate thereof and
their respective directors, officers, employees and agents, upon demand for any
reasonable expenses (including reasonable legal fees) incurred in connection
with any such investigation or proceeding, or (v) taxes (excluding income taxes
and franchise taxes) payable or ruled payable by any Governmental Authority in
respect of the Obligations or any Loan Document, together with interest and
penalties, if any; provided, however, that Borrower shall not have any
obligations pursuant to this Section with respect to any losses, liabilities,
claims, damages or expenses incurred by the Person seeking indemnification by
reason of the gross negligence or willful misconduct of that Person or with
respect to any disputes between or among any and all of Agent, Lenders and
Issuers. Nothing in this Section is intended to limit the obligations of
Borrower under any other provision of this Agreement. Agent and each Lender,
respectively, shall indemnify Borrower and hold Borrower harmless from and
against the gross negligence or willful misconduct of Agent or such Lender, as
the case may be.
11.5 Amendments, Etc. No amendment or modification of this
Agreement, the Notes or any other Loan Document shall in any event be effective
against Borrower unless the same shall
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be agreed or consented to in writing by Borrower. No amendment, modification or
waiver of any provision of this Agreement, the Notes or any other Loan Document,
nor any consent to any departure by Borrower therefrom, shall in any event be
effective against the Lenders unless the same shall be agreed or consented to in
writing by the Majority Lenders, and each such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, that no amendment, modification, waiver or consent shall,
unless in writing and signed by each Lender affected thereby, do any of the
following: (a) increase any Revolving Loan Commitment or Advance Loan Commitment
of any of the Lenders (or reinstate any termination or reduction of the
Revolving Loan Commitments or Advance Loan Commitments) or subject any of the
Lenders to any additional obligations; (b) reduce the principal of, or interest
on, any Loan, Reimbursement Obligation or fee hereunder; (c) postpone or extend
the Revolving Loan Maturity Date, the Advance Loan Maturity Date, the Revolving
Loan Termination Date, the Advance Loan Termination Date, the Revolving Loan
Availability Period, the Advance Loan Availability Period or any scheduled date
fixed for any payment of principal of, or interest on, any Loan, Reimbursement
Obligation, fee or other sum to be paid hereunder or waive any Event of Default
described in Section 9.1(a) hereof; (d) change the percentage of any of the
Revolving Loan Commitments or Advance Loan Commitments or of the aggregate
unpaid principal amount of any of the Loans and Letter of Credit Liabilities, or
the percentage of Lenders, which shall be required for the Lenders or any of
them to take any action under this Agreement; (e) change any provision contained
in Sections 2.2(c), 3.2(b)(2), 7.10, 11.3 or 11.4 hereof or this Section 11.5;
(f) release any Person from liability under a Guaranty or release all or
substantially all of the security for the Obligations or release Collateral
(exclusive of Collateral with respect to which Agent is obligated to provide a
release pursuant to this Agreement or any of the other Loan Documents or by law)
in any one (1) calendar year ascribed an aggregate value on the most recent
financial statements of Borrower delivered to Agent in excess of $1,000,000, or
(g) modify the provisions of Sections 4.1(b) or 4.2 hereof regarding pro rata
application of amounts after an Event of Default shall have occurred and be
continuing. Notwithstanding anything in this Section 11.5 to the contrary, no
amendment, modification, waiver or consent shall be made with respect to Section
10 without the consent of Agent to the extent it affects Agent, as Agent.
11.6 Successors and Assigns.
-----------------------
(a) This Agreement shall be binding upon and inure to the benefit
of Borrower, Agent and the Lenders and their respective successors and assigns;
provided, however, that Borrower may not assign or transfer any of its rights or
obligations hereunder without the prior written con sent of all of the Lenders,
and any such assignment or transfer without such consent shall be null and void.
Each Lender may sell participations to any Person in all or part of any Loan, or
all or part of its Notes, Revolving Loan Commitments, Advance Loan Commitments
or interests in Letters of Credit, in which event, without limiting the
foregoing, the provisions of the Loan Documents shall inure to the benefit of
each purchaser of a participation; provided, however, the pro rata treatment of
payments, as described in Section 4.2 hereof, shall be determined as if such
Lender had not sold such participation. Any Lender that sells one or more
participations to any
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Person shall not be relieved by virtue of such participation from any of its
obligations to Borrower under this Agreement relating to the Loans. In the event
any Lender shall sell any participation, such Lender shall retain the sole right
and responsibility to enforce the obligations of Borrower relating to the Loans,
including, without limitation, the right to approve any amendment, modification
or waiver of any provision of this Agreement other than amendments,
modifications or waivers with respect to (i) any fees payable hereunder to the
Lenders, (ii) the amount of principal or the rate of interest payable on, or the
dates fixed for the scheduled repayment of principal of, the Loans and (iii) the
release of the Liens on all or substantially all of the Collateral.
(b) Each Lender may assign to one or more Lenders or any other
Person all or a portion of its interests, rights and obligations under this
Agreement; provided, however, that (i) the aggregate amount of the Revolving
Loan Commitments, the Advance Loan Commitments and the Advance Loans of the
assigning Lender subject to each such assignment shall in no event be less than
$5,000,000; (ii) other than in the case of an assignment to another Lender (that
is, at the time of the assignment, a party hereto) or to an Affiliate of such
Lender or to a Federal Reserve Bank, Agent and, so long as no Event of Default
shall have occurred and be continuing, Borrower must each give its prior written
consent, which consents shall not be unreasonably withheld, and (iii) the
parties to each such assignment shall execute and deliver to Agent, for its
acceptance an Assignment and Acceptance in the form of Exhibit F hereto (each an
"Assignment and Acceptance") with blanks appropriately completed, together with
any Note or Notes subject to such assignment and a processing and recording fee
of $3,000 paid by the assignee (for which Borrower will have no liability). Upon
such execution, delivery and acceptance, from and after the effective date
specified in each Assignment and Acceptance, (A) the assignee thereunder shall
be a party hereto and, to the extent provided in such Assignment and Acceptance,
have the rights and obligations of a Lender hereunder and (B) the Lender
thereunder shall, to the extent provided in such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto except in respect of provisions of this Agreement which
survive payment of the Obligations and termination of the Commitments).
Notwithstanding anything contained in this Agreement to the contrary, any Lender
may at any time assign all or any portion of its rights under this Agreement and
the Notes issued to it as collateral to a Federal Reserve Bank; provided that no
such assignment shall release such Lender from any of its obligations hereunder.
(c) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than the
representation and warranty that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim, such Lender
assignor makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement or any of the other Loan Documents or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of this Agreement or any of the other Loan Documents or any other
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instrument or document furnished pursuant thereto; (ii) such Lender assignor
makes no representation or warranty and assumes no responsibility with respect
to the financial condition of Borrower or the performance or observance by
Borrower of any of its obligations under this Agreement or any of the other Loan
Documents or any other instrument or document furnished pursuant hereto; (iii)
such assignee confirms that it has received a copy of this Agreement, together
with copies of the financial statements referred to in Section 6.2 hereof and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and Acceptance;
(iv) such assignee will, independently and without reliance upon Agent, such
Lender assignor or any other Lender and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement and the other Loan
Documents; (v) such assignee appoints and authorizes Agent to take such action
as agent on its behalf and to exercise such powers under this Agreement and the
other Loan Documents as are delegated to Agent by the terms hereof, together
with such powers as are reasonably incidental thereto; and (vi) such assignee
agrees that it will perform in accordance with their terms all obligations that
by the terms of this Agreement and the other Loan Documents are required to be
performed by it as a Lender.
(d) The entries in the records of Agent as to each Assignment and
Acceptance delivered to it and the names and addresses of the Lenders and the
Revolving Loan Commitments and Advance Loan Commitments of, and principal amount
of the Loans owing to, each Lender from time to time shall be conclusive, in the
absence of manifest error, and Borrower, Agent and the Lenders may treat each
Person the name of which is recorded in the books and records of Agent as a
Lender hereunder for all purposes of this Agreement and the other Loan
Documents.
(e) Upon Agent's receipt of an Assignment and Acceptance executed
by an assigning Lender and the assignee thereunder, together with any Note or
Notes subject to such assignment and the written consent to such assignment (to
the extent consent is required), Agent shall, if such Assignment and Acceptance
has been completed with blanks appropriately filled, (i) accept such Assignment
and Acceptance, (ii) record the information contained therein in its records and
(iii) give prompt notice thereof to Borrower. Within five Business Days after
receipt of notice, Borrower, at its own expense, shall execute and deliver to
Agent in exchange for the surrendered Notes new Notes to the order of such
assignee in an amount equal to the Revolving Loan Commitments and the Advance
Loans (or any of them) assumed by it pursuant to such Assignment and Acceptance
and, if the assigning Lender has retained Revolving Loan Commitments and Advance
Loans (or any of them) hereunder, new Notes to the order of the assigning Lender
in an amount equal to the Revolving Loan Commitment and the Advance Loans (or
any of them) retained by it hereunder. Such new Notes shall be in an aggregate
principal amount equal to the aggregate principal amount of such surrendered
Notes, shall be dated the effective date of such Assignment and Acceptance and
shall otherwise be in substantially the form of the respective Note. Thereafter,
such surrendered Notes shall be marked renewed and substituted and the
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originals thereof delivered to Borrower (with copies, certified by Borrower as
true, correct and complete, to be retained by Agent).
(f) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
11.6, disclose to the assignee or participant or proposed assignee or
participant, any information relating to Borrower furnished to such Lender by or
on behalf of Borrower.
11.7 Limitation of Interest. Borrower and the Lenders intend to
strictly comply with all applicable federal and New York laws, including
applicable usury laws (or the usury laws of any jurisdiction whose usury laws
are deemed to apply to the Notes or any other Loan Documents despite the
intention and desire of the parties to apply the usury laws of the State of New
York). Accordingly, the provisions of this Section 11.7 shall govern and control
over every other provision of this Agreement or any other Loan Document which
conflicts or is inconsistent with this Section, even if such provision declares
that it controls. As used in this Section, the term "interest" includes the
aggregate of all charges, fees, benefits or other compensation which constitute
interest under applicable law, provided that, to the maximum extent permitted by
applicable law, (a) any non-principal payment shall be characterized as an
expense or as compensation for something other than the use, forbearance or
detention of money and not as interest, and (b) all interest at any time
contracted for, reserved, charged or received shall be amortized, prorated,
allocated and spread, in equal parts during the full term of the Obligations. In
no event shall Borrower or any other Person be obligated to pay, or any Lender
have any right or privilege to reserve, receive or retain, (a) any interest in
excess of the maximum amount of nonusurious interest permitted under the laws of
the State of New York or the applicable laws (if any) of the United States or of
any other jurisdiction, or (b) total interest in excess of the amount which such
Lender could lawfully have contracted for, reserved, received, retained or
charged had the interest been calculated for the full term of the Obligations at
the Ceiling Rate. The daily interest rates to be used in calculating interest at
the Ceiling Rate shall be determined by dividing the applicable Ceiling Rate per
annum by the number of days in the calendar year for which such calculation is
being made. None of the terms and provisions contained in this Agreement or in
any other Loan Document (including, without limitation, Section 9.1 hereof)
which directly or indirectly relate to interest shall ever be construed without
reference to this Section 11.7, or be construed to create a contract to pay for
the use, forbearance or detention of money at an interest rate in excess of the
Ceiling Rate. If the term of any Obligation is shortened by reason of
acceleration of maturity as a result of any Default or by any other cause, or by
reason of any required or permitted prepayment, and if for that (or any other)
reason any Lender at any time, including but not limited to, the stated
maturity, is owed or receives (and/or has received) interest in excess of
interest calculated at the Ceiling Rate, then and in any such event all of any
such excess interest shall be canceled automatically as of the date of such
acceleration, prepayment or other event which produces the excess, and, if such
excess interest has been paid to such Lender, it shall be credited pro tanto
against the then-outstanding principal balance of Borrower's obligations to such
Lender, effective as of the date or dates when the event occurs which causes
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it to be excess interest, until such excess is exhausted or all of such
principal has been fully paid and satisfied, whichever occurs first, and any
remaining balance of such excess shall be promptly refunded to its payor.
11.8 Survival. The obligations of Borrower under Sections 2.2(c),
2.2(d), 7.10, 11.3 and 11.4 hereof and all other obligations of Borrower in any
other Loan Document (to the extent stated therein), the obligations of each
Issuer under the last sentence of Section 2.2(b)(iii) and the obligations of the
Lenders under Section 10.5 and 11.7 hereof, shall, notwithstanding anything
herein to the contrary, survive the repayment of the Loans and Reimbursement
Obligations and the termination of the Revolving Loan Commitments, the Advance
Loan Commitments and the Letters of Credit.
11.9 Captions. Captions and section headings appearing herein are
included solely for convenience of reference and are not intended to affect the
interpretation of any provision of this Agreement.
11.10 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
agreement and any of the parties hereto may execute this Agreement by signing
any such counterpart.
11.11 Governing Law. THIS AGREEMENT AND (EXCEPT AS THEREIN PROVIDED)
THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE APPLICABLE LAWS OF THE STATE OF NEW YORK AND THE UNITED STATES OF AMERICA
FROM TIME TO TIME IN EFFECT.
11.12 Severability. Whenever possible, each provision of the Loan
Documents shall be interpreted in such manner as to be effective and valid under
applicable law. If any provision of any Loan Document shall be invalid, illegal
or unenforceable in any respect under any applicable law, the validity, legality
and enforceability of the remaining provisions of such Loan Document shall not
be affected or impaired thereby.
11.13 Tax Forms. Each Lender which is organized under the laws of a
jurisdiction outside the United States shall, on the day of the initial
borrowing from each such Lender hereunder and from time to time thereafter if
requested by Borrower or Agent, provide Agent and Borrower with the forms
prescribed by the Internal Revenue Service of the United States certifying as to
such Lender's status for purposes of determining exemption from United States
withholding taxes with respect to all payments to be made to such Lender
hereunder or other documents satisfactory to such Lender, Borrower and Agent
indicating that all payments to be made to such Lender hereunder are not subject
to United States withholding tax or are subject to such tax at a rate reduced by
an applicable tax treaty. Unless Borrower and Agent shall have received such
forms or such documents indicating that payments hereunder are not subject to
United States
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withholding tax or are subject to such tax at a rate reduced by an applicable
tax treaty, Borrower or Agent shall withhold taxes from such payments at the
applicable statutory rate.
11.14 Conflicts Between This Agreement and the Other Loan Documents.
In the event of any conflict between the terms of this Agreement and the terms
of any of the other Loan Documents, the terms of this Agreement shall control.
11.15 Jury Waiver. BORROWER, AGENT AND LENDERS EACH WAIVE ANY RIGHT
TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS. INSTEAD, ANY DISPUTES RESOLVED IN COURT
WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
11.16 Limitation on Charges; Substitute Lenders; Non-Discrimination.
Anything in Sections 3.3(c) or 7.10 notwithstanding:
(1) Borrower shall not be required to pay to any Lender
reimbursement with regard to any costs or expenses described in such
Sections, unless such Lender notifies Borrower of such costs or
expenses within 90 days after the date paid or incurred;
(2) none of the Lenders shall be permitted to pass
through to Borrower charges and costs under such Sections on a
discriminatory basis (i.e., which are not also passed through by such
Lender to other customers of such Lender similarly situated where such
customer is subject to documents providing for such pass through); and
(3) if any Lender elects to pass through to Borrower any
material charge or cost under such Sections or elects to terminate the
availability of LIBOR Borrowings for any material period of time,
Borrower may, within 60 days after the date of such event and so long
as no Default shall have occurred and be continuing, elect to terminate
such Lender as a party to this Agreement; provided that, concurrently
with such termination Borrower shall (i) if Agent and each of the other
Lenders shall consent, pay that Lender all principal, interest and fees
and other amounts owed to such Lender through such date of termination
or (ii) have arranged for another financial institution approved by
Agent (such approval not to be unreasonably withheld) as of such date,
to become a substitute Lender for all purposes under this Agreement in
the manner provided in Section 11.6; provided further that, prior to
substitution for any Lender, Borrower shall have given written notice
to Agent of such intention and the Lenders shall have the option, but
no obligation, for a period of 60 days after receipt of such notice, to
increase their Revolving Loan Commitments and Advance Loan Commitments
in order to replace the affected Lender in lieu of such substitution.
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11.17 Amendment and Restatement; Renewal Notes. This Agreement
amends and restates in its entirety that certain Loan Agreement dated as of
March 27, 1997 executed by and among Borrower, Texas Commerce Bank National
Association, as Agent, and certain financial institutions therein set forth. The
Revolving Notes have been given in renewal, extension and modification of the
revolving credit facility previously provided to Borrower by Heller Financial,
Inc., the Advance Loan Notes evidencing the $5,000,000 Advance Loan Tranche made
concurrently herewith have been given in renewal, extension and modification of
a term loan previously made to Borrower by Heller Financial, Inc. and the
Advance Loan Notes evidencing the $7,700,000 Advance Loan Tranche made
concurrently herewith have been given in renewal, extension and modification of
a term loan previously made to Borrower by Texas Commerce Bank National
Association.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the Effective Date.
CARROLS CORPORATION,
a Delaware corporation
By: /s/ Joseph A. Zirkman
-----------------------------------
Name: Joseph A. Zirkman
---------------------------------
Title: Vice Pres. & Sec'y
--------------------------------
Address for Notices:
968 James Street
Syracuse, New York 13203
Attention: Alan Vituli
Telecopy No.: (315) 425-8874
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TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, as Agent and as a Lender
By: /s/ Michael J. Costello
----------------------------------------
Michael J. Costello, Vice President
Address for Notices:
Revolving Loan Commitment: 712 Main Street
Houston, Texas 77002
$4,440,789.48 Attention: Manager, Franchise and Trademark
Finance Division
Telecopy No.: (713) 216-6710
Advance Loan Commitment:
$22,559,210.53
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<PAGE>
HELLER FINANCIAL, INC.,
as Documentation Agent and as a Lender
By: /s/ K. Craig Gallehugh
----------------------------
Name: K. Craig Gallehugh
--------------------------
Title: Vice President
-------------------------
Address for Notices:
Revolving Loan Commitment: 500 W. Monroe Street
Chicago, Illinois 60661
$4,111,842.11 Attention: Portfolio Manager
Telecopy No.: (312) 441-7367
Advance Loan Commitment:
$20,888,157.89
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FIRST UNION NATIONAL BANK OF NORTH
CAROLINA, as Co-Agent and as a Lender
By: /s/ Jorge Gonzales
------------------------
Name: Jorge Gonzales
----------------------
Title: Senior Vice President
---------------------
Address for Notices:
Revolving Loan Commitment: 301 South College St.
Floor DC-5
$4,111,842.11 Charlotte, North Carolina 28288-0737
Attention: Bragg Comer
Telecopy No.: (704) 374-3300
Advance Loan Commitment:
$20,888,157.89
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<PAGE>
SUNTRUST BANK, ATLANTA
By: /s/ Kristina L. Anderson
-----------------------------
Name: Kristina. L. Anderson
---------------------------
Title: Vice President
--------------------------
By: /s/ Candace J. Cole
-----------------------------
Name: Candace J. Cole
---------------------------
Title: Banking Officer
--------------------------
Address for Notices:
Revolving Loan Commitment: 25 Park Place, N.E, Mail Code 124
Atlanta, Georgia 30303
$3,289,473.68 Attention: Ms. Candace Cole
Telecopy No.: (404) 588-8505
Advance Loan Commitment:
$16,710,526.32
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THE NORTHERN TRUST COMPANY
By: /s/ Arthur J. Fogel
-----------------------------
Name: Arthur J. Fogel
---------------------------
Title: Vice President
--------------------------
Address for Notices:
Revolving Loan Commitment: 50 S. LaSalle Street B-2
Chicago, Illinois 60675
$2,467,105.26 Attention: Art Fogel
Telecopy No.: (312) 444-7028
Advance Loan Commitment:
$12,532,894.74
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COMERICA BANK
By: /s/ Chris Georvassilis
----------------------------
Name: Chris Georvassilis
--------------------------
Title: Vice President
-------------------------
Address for Notices:
Revolving Loan Commitment: 500 Woodward Ave., 9th Fl., MS 3281
Detroit, Michigan 48226
$2,467,105.26 Attention: Chris Georvassilis
Telecopy No.: (313) 222-3330
Advance Loan Commitment:
$12,532,894.74
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BANK OF SCOTLAND
By: /s/ Annie Chin Tat
----------------------------
Name: Annie Chin Tat
--------------------------
Title: Assistant Vice President
-------------------------
Address for Notices:
Revolving Loan Commitment: 565 Fifth Avenue, 5th Floor
New York, New York 10017
$2,467,105.26 Attention: Ms. Annie Chin Tat
Telecopy No.: (212) 557-9460
Advance Loan Commitment: with a copy to:
$12,532,894.74 Ms. Janna Blanter
1200 Smith Street
1750 Citicorp Center
Houston, Texas 77002
Telecopy No.: (713) 651-9714
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PNC BANK, NATIONAL ASSOCIATION
By: /s/ Thomas Colwell
------------------------------
Name: Thomas Colwell
----------------------------
Title: Vice President
---------------------------
Address for Notices:
Revolving Loan Commitment: 345 Park Ave., 29th Floor
New York, New York 10154
$1,644,736.84 Attention: Tom Colwell
Telecopy No.: (212) 409-3737
Advance Loan Commitment:
$8,355,263.16
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AMENDMENT TO LOAN AGREEMENT
THIS AMENDMENT TO LOAN AGREEMENT (this "Amendment") is made and entered
into as of July 8, 1998 by and among CARROLS CORPORATION, a Delaware
corporation (the "Borrower"); each of the Lenders which is or may from time
to time become a party to the Loan Agreement (as defined below)
(individually, a "Lender" and, collectively, the "Lenders"), HELLER
FINANCIAL, INC., as Documentation Agent, NATIONSBANK, as Co-Agent, and CHASE
BANK OF TEXAS, NATIONAL ASSOCIATION, a national banking association, acting
as agent for the Lenders (in such capacity, together with its successors in
such capacity, the "Agent").
RECITALS
--------
A. The Borrower, the Lenders and the Agent executed and delivered that
certain Loan Agreement dated as of May 12, 1997. Said Loan Agreement, as
amended, supplemented and restated, is herein called the "Loan Agreement."
Any capitalized term used in this Amendment and not otherwise defined shall
have the meaning ascribed to it in the Loan Agreement.
B. The Borrower, the Lenders and the Agent desire to amend the Loan
Agreement in certain respects.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements, representations and warranties herein set forth, and further good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Borrower, the Lenders and the Agent do hereby agree as
follows:
SECTION 1. Amendment to Loan Agreement.
(a) New definitions of "Pollo Tropical" and "Tender Offer" are hereby
added to Section 1.1 of the Loan Agreement, such new definitions to read in
their entirety as follows:
"Pollo Tropical" means Pollo Tropical, Inc., a Florida corporation.
"Tender Offer" means that certain Tender Offer Statement on
Schedule 14D-1 dated June 10, 1998 filed by Borrower with the Securities
and Exchange Commission, together with the exhibits thereto.
(b) Section 7.3(b) of the Loan Agreement is hereby amended to read in
its entirety as follows:
<PAGE>
(b) Debt to EBITDA Ratio - a Debt to EBITDA Ratio of not greater
than (1) 4.85 to 1.00 at all times during the period commencing on ,
1998 through and including September 30, 1998; (2) 4.75 to 1.00 at all
times during the period commencing on October 1, 1998 through and
including December 31, 1998; (3) 4.65 to 1.00 at all times during the
period commencing on January 1, 1999 through and including June 30,
1999; (4) 4.50 to 1.00 at all times during the period commencing on July
1, 1999 through and including December 31, 1999; (5) 4.25 to 1.00 at all
times during the period commencing on January 1, 2000 through and
including December 31, 2000; (6) 3.75 to 1.00 at all times during the
period commencing on January 1, 2001 through and including December 31,
2001, and (7) 3.00 to 1.00 at all times thereafter.
(c) The Loan Agreement is hereby amended to add the following
Section 7.14 which shall read in its entirety as follows:
7.14 Borrower will cause Pollo Tropical to distribute its
available cash flow to its shareholders (and will cause each Subsidiary
of Pollo Tropical to distribute its available cash flow to its
shareholders), ratably in accordance with their respective interests, on
a quarterly basis beginning on December 31, 1998 (but subject to the
provisions of Section 1(e) above), to the maximum extent legally
permissible.
(d) Section 9.1(l) of the Loan Agreement is hereby amended to read in
its entirety as follows:
(l) Ownership Change or Encumbrance - any Person other than
Carrols Holdings shall own any equity interest in Borrower or any Person
other than Agent or Heller Financial, Inc. shall acquire any Lien on any
of the equity interests in Borrower; the executive management (vice
president or more senior) of Borrower, Atlantic Restaurants, Inc.,
Madison Dearborn Capital Partners, L.P. and Madison Dearborn Capital
Partners II, L.P., and/or one or more of their Affiliates, shall cease
to own (and control the voting rights in respect of), in the aggregate,
at least 67% of the equity interests in Carrols Holdings at all times
prior to the closing of any initial public offering by Borrower and 51%
at all times thereafter; or any Person other than Borrower shall own any
equity interest in any Subsidiary of Borrower (other than a Non-Recourse
Subsidiary, Pollo Tropical or to the extent otherwise expressly
permitted in writing by the Majority Lenders) or any Person shall
acquire any Lien on Borrower's interest in and to the equity interest in
any Subsidiary of Borrower (other than a Non-Recourse Subsidiary, Pollo
Tropical or to the extent otherwise expressly permitted in writing by
the Majority Lenders); or
(e) The Loan Agreement is hereby amended to add the following Section
9.1(o) which shall read in its entirety as follows:
(l) Pollo Tropical Assets and Merger - the Borrower shall fail to
acquire all of the issued and outstanding equity interests of Pollo
Tropical (and to cause the
2
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merger of Pollo Tropical and each Subsidiary of Pollo Tropical into
Borrower) by December 31, 1998 or the Borrower shall fail to create
valid, perfected Liens upon the assets owned by Pollo Tropical and its
Subsidiaries as of the date of such merger in favor of Agent securing
the Obligations (to the maximum extent permissible under the present
terms of the Senior Notes Documentation) by December 31, 1998.
SECTION 2. Certain Consents and Agreements Regarding Pollo Tropical.
(a) Lenders hereby consent, for the purposes of Sections 8.6, 8.8, 8.9
and 8.14 of the Loan Agreement, to the consummation of the acquisition
contemplated in the Tender Offer and the subsequent merger of Pollo Tropical
and each of its Subsidiaries into Borrower (provided, however, that Borrower
agrees that at least 75% of the restaurants owned and operated by Borrower,
directly or indirectly through Subsidiaries, will continue to be under Burger
King franchises). Subject to the provisions of Section 1(e) above, until such
time as Pollo Tropical and each of its Subsidiaries shall have been merged
into Borrower, it shall not be necessary to grant Liens to Agent covering any
of the issued and outstanding equity interests of Pollo Tropical or its
Subsidiaries or any of the assets of Pollo Tropical or its Subsidiaries
(notwithstanding the contrary provisions of Sections 7.12, 7.13 and 8.14 of
the Loan Agreement).
(b) The Borrower acknowledges that the terms and provisions of the Loan
Agreement prohibit any Borrowed Money Indebtedness of Pollo Tropical and its
Subsidiaries and the Borrower represents and warrants that all facilities to
which Pollo Tropical or its Subsidiaries is a party providing for such
Borrowed Money Indebtedness have been terminated and all Borrowed Money
Indebtedness thereunder has been paid in full.
(c) Notwithstanding the provisions of Section 8.4 of the Loan Agreement,
but subject to the provisions of Section 1(e) above, Borrower may sell any of
the issued and outstanding equity interests of Pollo Tropical which are
acquired by Borrower pursuant to the Tender Offer at a price that is
determined to be at fair market value by the Board of Directors of Borrower
so long as the proceeds of any such sale are invested in Permitted
Investments of the types described in clauses (a) through (d) of the
definition of "Permitted Investments" set forth in Section 1.1 hereof.
SECTION 3. Advance Loan Commitments Increased. The present Advance Loan
Commitments of the Lenders are hereby increased to the aggregate amount of
$125,000,000, allocated among the Lenders as set forth on Exhibit A hereto.
SECTION 4. Ratification. Except as expressly amended by this Amendment,
the Loan Agreement and the other Loan Documents shall remain in full force
and effect. None of the rights, title and interests existing and to exist
under the Loan Agreement are hereby released, diminished
3
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or impaired, and the Borrower hereby reaffirms all covenants, representations
and warranties in the Loan Agreement.
SECTION 5. Expenses. The Borrower shall pay to the Agent all reasonable
fees and expenses of its respective legal counsel (pursuant to Section 11.3
of the Loan Agreement) incurred in connection with the execution of this
Amendment.
SECTION 6. Certifications. The Borrower hereby certifies that (a) no
material adverse change in the assets, liabilities, financial condition,
business or affairs of the Borrower has occurred and (b) no Default or Event
of Default has occurred and is continuing or will occur as a result of this
Amendment.
SECTION 7. Miscellaneous. This Amendment (a) shall be binding upon and
inure to the benefit of the Borrower, the Lenders and the Agent and their
respective successors, assigns, receivers and trustees; (b) may be modified
or amended only by a writing signed by the required parties; (c) shall be
governed by and construed in accordance with the laws of the State of New
York and the United States of America; (d) may be executed in several
counterparts by the parties hereto on separate counterparts, and each
counterpart, when so executed and delivered, shall constitute an original
agreement, and all such separate counterparts shall constitute but one and
the same agreement and (e) together with the other Loan Documents, embodies
the entire agreement and understanding between the parties with respect to
the subject matter hereof and supersedes all prior agreements, consents and
understandings relating to such subject matter. The headings herein shall be
accorded no significance in interpreting this Amendment.
NOTICE PURSUANT TO TEX. BUS. & COMM. CODE SS.26.02
THE LOAN AGREEMENT, AS AMENDED BY THIS AMENDMENT, AND ALL OTHER LOAN
DOCUMENTS EXECUTED BY ANY OF THE PARTIES PRIOR HERETO OR SUBSTANTIALLY
CONCURRENTLY HEREWITH CONSTITUTE A WRITTEN LOAN AGREEMENT WHICH REPRESENTS
THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
REMAINDER OF PAGE LEFT BLANK INTENTIONALLY
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<PAGE>
IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent have caused
this Amendment to be signed by their respective duly authorized officers,
effective as of the date first above written.
CARROLS CORPORATION,
a Delaware corporation
By: /s/ Joseph A. Zirkman
-------------------------------
Name: Joseph A. Zirkman
-----------------------------
Title: Vice President and General Counsel
----------------------------------
5
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CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, as Agent and as a Lender
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
6
<PAGE>
HELLER FINANCIAL, INC.,
as Documentation Agent and as a Lender
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
7
<PAGE>
NATIONSBANK,
as Co-Agent and as a Lender
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
8
<PAGE>
SUNTRUST BANK, ATLANTA
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
9
<PAGE>
THE NORTHERN TRUST COMPANY
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
10
<PAGE>
COMERICA BANK
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
11
<PAGE>
BANK OF SCOTLAND
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
12
<PAGE>
PNC BANK, NATIONAL ASSOCIATION
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
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<PAGE>
The undersigned hereby join in this Amendment to evidence their consent
to execution by Borrower of this Amendment, to confirm that each Loan
Document now or previously executed by the undersigned applies and shall
continue to apply to the Loan Agreement, as amended hereby, to acknowledge
that without such consent and confirmation, Lender would not execute this
Amendment and to join in the notice pursuant to Tex. Bus. & Comm. Code
ss.26.02 set forth above.
CARROLS REALTY HOLDINGS CORP.,
a Delaware corporation
By: /s/ Joseph A. Zirkman
-------------------------------------
Name: Joseph A. Zirkman
-----------------------------------
Title: Vice President
----------------------------------
CARROLS HOLDINGS CORPORATION,
a Delaware corporation
By: /s/ Joseph A. Zirkman
-------------------------------------
Name: Joseph A. Zirkman
-----------------------------------
Title: Vice President and General Counsel
----------------------------------
CARROLS REALTY HOLDINGS CORP.,
a Delaware corporation
By: /s/ Joseph A. Zirkman
-------------------------------------
Name: Joseph A. Zirkman
-----------------------------------
Title: Vice President
----------------------------------
CARROLS REALTY I CORP.,
a Delaware corporation
By: /s/ Joseph A. Zirkman
-------------------------------------
Name: Joseph A. Zirkman
-----------------------------------
Title: Vice President
----------------------------------
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<PAGE>
ALLOCATION OF ADVANCE LOAN COMMITMENTS
--------------------------------------
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION $22,203,947.37
HELLER FINANCIAL, INC. $20,559,210.53
NATIONSBANK $20,559,210.53
SUNTRUST BANK, ATLANTA $16,447,368.42
THE NORTHERN TRUST COMPANY $12,335,526.32
COMERICA BANK $12,335,526.32
BANK OF SCOTLAND $12,335,526.32
PNC BANK, NATIONAL ASSOCIATION $8,223,684.21
EXHIBIT A
