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EXECUTION COPY
EXHIBIT 99(B)(6)
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$340,000,000
CREDIT AGREEMENT
AMONG
BUFFETS HOLDINGS, INC.,
BUFFETS, INC.,
AS BORROWER,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO,
LEHMAN BROTHERS INC.
AND
FLEETBOSTON ROBERTSON STEPHENS INC.,
AS CO-LEAD ARRANGERS AND JOINT BOOK-RUNNING MANAGERS,
LEHMAN COMMERCIAL PAPER INC.,
AS ADMINISTRATIVE AGENT,
FLEET NATIONAL BANK,
AS SYNDICATION AGENT
AND
FIRST UNION NATIONAL BANK,
AS DOCUMENTATION AGENT
DATED AS OF SEPTEMBER 29, 2000
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TABLE OF CONTENTS
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SECTION 1. DEFINITIONS............................................................................................1
1.1 Defined Terms...................................................................................1
1.2 Other Definitional Provisions..................................................................29
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS.......................................................................29
2.1 Term Loan Commitments..........................................................................29
2.2 Procedure for Term Loan Borrowing..............................................................30
2.3 Repayment of Term Loans........................................................................30
2.4 Revolving Credit Commitments...................................................................31
2.5 Procedure for Revolving Credit Borrowing.......................................................32
2.6 Swing Line Commitment..........................................................................32
2.7 Procedure for Swing Line Borrowing; Refunding of Swing Line Loans..............................33
2.8 Repayment of Loans; Evidence of Indebtedness...................................................34
2.9 Commitment Fees, etc...........................................................................35
2.10 Termination or Reduction of Revolving Credit Commitments.......................................35
2.11 Optional Prepayments...........................................................................35
2.12 Mandatory Prepayments and Commitment Reductions................................................36
2.13 Conversion and Continuation Options............................................................37
2.14 Minimum Amounts and Maximum Number of Eurodollar Tranches......................................38
2.15 Interest Rates and Payment Dates...............................................................38
2.16 Computation of Interest and Fees...............................................................39
2.17 Inability to Determine Interest Rate...........................................................39
2.18 Pro Rata Treatment and Payments................................................................40
2.19 Requirements of Law............................................................................43
2.20 Taxes..........................................................................................44
2.21 Indemnity......................................................................................45
2.22 Illegality.....................................................................................46
2.23 Change of Lending Office.......................................................................46
2.24 Assignment of Commitments under Certain Circumstances..........................................46
SECTION 3. LETTERS OF CREDIT.....................................................................................47
3.1 L/C Commitment.................................................................................47
3.2 Procedure for Issuance of Letter of Credit.....................................................47
3.3 Fees and Other Charges.........................................................................48
3.4 L/C Participations.............................................................................48
3.5 Reimbursement Obligation of the Borrower.......................................................49
3.6 Obligations Absolute...........................................................................49
3.7 Letter of Credit Payments......................................................................50
3.8 Applications...................................................................................50
SECTION 4. REPRESENTATIONS AND WARRANTIES........................................................................50
4.1 Financial Condition............................................................................50
4.2 No Change......................................................................................51
4.3 Corporate Existence; Compliance with Law.......................................................51
4.4 Corporate Power; Authorization; Enforceable Obligations........................................51
4.5 No Legal Bar...................................................................................52
4.6 No Material Litigation.........................................................................52
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4.7 No Default.....................................................................................52
4.8 Ownership of Property; Liens...................................................................52
4.9 Intellectual Property..........................................................................53
4.10 Taxes..........................................................................................53
4.11 Federal Regulations............................................................................53
4.12 Labor Matters..................................................................................53
4.13 ERISA..........................................................................................54
4.14 Investment Company Act; Other Regulations......................................................54
4.15 Subsidiaries...................................................................................54
4.16 Use of Proceeds................................................................................55
4.17 Environmental Matters..........................................................................55
4.18 Accuracy of Information, etc...................................................................56
4.19 Security Documents.............................................................................56
4.20 Solvency.......................................................................................57
4.21 Senior Indebtedness............................................................................57
4.22 Regulation H...................................................................................58
4.23 Insurance......................................................................................58
4.24 Acquisition Documentation......................................................................58
4.25 Real Estate....................................................................................58
4.26 Permits........................................................................................60
4.27 Leases.........................................................................................61
4.28 Immaterial Subsidiaries........................................................................61
4.29 Supply Contracts...............................................................................61
SECTION 5. CONDITIONS PRECEDENT..................................................................................61
5.1 Conditions to Initial Extension of Credit......................................................61
5.2 Conditions to Each Extension of Credit.........................................................68
SECTION 6. AFFIRMATIVE COVENANTS.................................................................................69
6.1 Financial Statements...........................................................................69
6.2 Certificates; Other Information................................................................70
6.3 Payment of Obligations.........................................................................72
6.4 Conduct of Business and Maintenance of Existence, etc..........................................72
6.5 Maintenance of Property; Insurance.............................................................72
6.6 Inspection of Property; Books and Records; Discussions.........................................73
6.7 Notices........................................................................................74
6.8 Environmental Laws.............................................................................75
6.9 Interest Rate Protection.......................................................................75
6.10 Additional Collateral, etc.....................................................................75
6.11 Use of Proceeds................................................................................78
6.12 ERISA Documents................................................................................78
6.13 Further Assurances.............................................................................78
6.14 Immaterial Subsidiaries........................................................................79
6.15 Post-Closing Matters...........................................................................79
SECTION 7. NEGATIVE COVENANTS....................................................................................79
7.1 Financial Condition Covenants..................................................................79
7.2 Limitation on Indebtedness.....................................................................82
7.3 Limitation on Liens............................................................................84
7.4 Limitation on Fundamental Changes..............................................................85
7.5 Limitation on Disposition of Property..........................................................85
7.6 Limitation on Restricted Payments..............................................................86
7.7 Limitation on Capital Expenditures.............................................................87
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7.8 Limitation on Investments......................................................................88
7.9 Limitation on Optional Payments and Modifications of Indebtedness..............................89
7.10 Limitation on Transactions with Affiliates.....................................................90
7.11 Limitation on Sales and Leasebacks.............................................................91
7.12 Limitation on Changes in Fiscal Periods........................................................91
7.13 Limitation on Negative Pledge Clauses..........................................................91
7.14 Limitation on Restrictions on Subsidiary Distributions, etc....................................91
7.15 Limitation on Lines of Business................................................................91
7.16 Limitation on Amendments to Acquisition Documentation..........................................92
7.17 Limitation on Activities of Holdings...........................................................92
7.18 Limitation on Hedge Agreements.................................................................92
7.19 New Restaurants................................................................................92
SECTION 8. EVENTS OF DEFAULT.....................................................................................92
SECTION 9. THE AGENTS; THE ARRANGERS.............................................................................97
9.1 Appointment....................................................................................97
9.2 Delegation of Duties...........................................................................97
9.3 Exculpatory Provisions.........................................................................97
9.4 Reliance by Agents.............................................................................98
9.5 Notice of Default..............................................................................98
9.6 Non-Reliance on Agents and Other Lenders.......................................................98
9.7 Indemnification................................................................................99
9.8 Arrangers and Agents in Their Individual Capacities............................................99
9.9 Successor Agents..............................................................................100
9.10 Authorization to Release Liens................................................................100
9.11 The Arrangers and the Documentation Agent.....................................................100
9.12 Enforcement of Remedies.......................................................................100
SECTION 10. MISCELLANEOUS.......................................................................................101
10.1 Amendments and Waivers........................................................................101
10.2 Notices.......................................................................................102
10.3 No Waiver; Cumulative Remedies................................................................105
10.4 Survival of Representations and Warranties....................................................105
10.5 Payment of Expenses...........................................................................105
10.6 Successors and Assigns; Participations and Assignments........................................106
10.7 Adjustments; Set-off..........................................................................109
10.8 Counterparts..................................................................................109
10.9 Severability..................................................................................110
10.10 Integration...................................................................................110
10.11 GOVERNING LAW.................................................................................110
10.12 Submission To Jurisdiction; Waivers...........................................................110
10.13 Suretyship Waivers............................................................................111
10.14 Acknowledgments...............................................................................111
10.15 Confidentiality...............................................................................111
10.16 Release of Collateral and Guarantee Obligations...............................................112
10.17 Accounting Changes............................................................................112
10.18 Delivery of Lender Addenda....................................................................113
10.19 Construction..................................................................................113
10.20 WAIVERS OF JURY TRIAL.........................................................................113
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CREDIT AGREEMENT, dated as of September 29, 2000, among
BUFFETS HOLDINGS, INC., a Delaware corporation ("Holdings"), BUFFETS, INC., a
Minnesota corporation (the "Borrower"), the several banks and other financial
institutions or entities from time to time parties to this Agreement (the
"Lenders"), LEHMAN BROTHERS INC. and FLEETBOSTON ROBERTSON STEPHENS INC., as
co-lead arrangers and joint book-running managers (in such capacity, the
"Arrangers"), LEHMAN COMMERCIAL PAPER INC., as administrative agent (in such
capacity, the "Administrative Agent"), FLEET NATIONAL BANK, as syndication agent
(in such capacity, the "Syndication Agent") and FIRST UNION NATIONAL BANK, as
Documentation Agent (in such capacity, the "Documentation Agent").
W I T N E S S E T H:
WHEREAS, Buffets Merger Corporation has been formed for the
purposes of effecting the transactions contemplated by the Acquisition Agreement
(each as defined below);
WHEREAS, pursuant to the Acquisition Agreement (as defined
below), Buffets Merger Corporation, a Minnesota corporation, ("MergerCo") will
acquire all of the issued and outstanding common stock of the Borrower through a
merger of the Borrower and MergerCo, with the Borrower as the surviving
corporation;
WHEREAS, MergerCo is a Wholly Owned Subsidiary of Holdings, an
entity formed by the Sponsor and certain Other Equity Investors and Management
Investors;
WHEREAS, the Borrower has requested that the Lenders make
credit facilities available to the Borrower in order to finance the foregoing
transactions and for the other purposes set forth herein;
WHEREAS, the Lenders are willing to make such credit
facilities available upon and subject to the terms and conditions hereinafter
set forth;
NOW, THEREFORE, in consideration of the premises and the
agreements hereinafter set forth, the parties hereto hereby agree as follows:
Section 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms
listed in this Section 1.1 shall have the respective meanings set forth in this
Section 1.1.
"Accepting Lender": as defined in Section 2.18(d).
"Acknowledgement and Consent": the Acknowledgement and Consent
of each Issuer (as defined in the Guarantee and Collateral Agreement)
that is not also a Grantor (as defined in the Guarantee and Collateral
Agreement), substantially in the form of Exhibit A to the Guarantee and
Collateral Agreement.
"Acquisition": the acquisition pursuant to the Acquisition
Agreement, by Holdings of the issued and outstanding common stock of
the Borrower through a merger of MergerCo with and into the Borrower.
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"Acquisition Agreement": the Agreement and Plan of Merger,
dated as of June 4, 2000, among the Borrower, Holdings, and MergerCo,
as amended, supplemented, replaced or otherwise modified from time to
time in accordance with this Agreement.
"Acquisition Documentation": collectively, the Acquisition
Agreement and all schedules, exhibits, annexes and amendments thereto
and all side letters and agreements affecting the terms thereof or
entered into in connection therewith, in each case, as amended,
supplemented, replaced or otherwise modified from time to time.
"Adjustment Date": as defined in the Pricing Grid.
"Administrative Agent": as defined in the preamble hereto.
"Advisory Services Agreement": collectively, the two letter
agreements regarding the advisory services between Holdings, the
Borrower, Roe Hatlen and Dennis Scott as in effect on the date hereof.
"Affiliate": as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under
common control with, such Person. For purposes of this definition,
"control" of a Person means the power, directly or indirectly, to (a)
vote 10% or more of the securities having ordinary voting power for the
election of directors (or persons performing similar functions) of such
Person or (b) direct or cause the direction of the management and
policies of such Person, whether by contract or otherwise.
"Agents": the collective reference to the Administrative
Agent, the Syndication Agent and the Documentation Agent.
"Aggregate Exposure": with respect to any Lender at any time,
an amount equal to (a) until the Closing Date, the aggregate amount of
such Lender's Commitments at such time and (b) thereafter, the sum of
(i) the aggregate then unpaid principal amount of such Lender's Term
Loans and (ii) the amount of such Lender's Revolving Credit Commitment
then in effect or, if the Revolving Credit Commitments have been
terminated, the amount of such Lender's Revolving Extensions of Credit
then outstanding.
"Aggregate Exposure Percentage" with respect to any Lender at
any time, the ratio (expressed as a percentage) of such Lender's
Aggregate Exposure at such time to the Aggregate Exposure of all
Lenders at such time.
"Agreement": this Credit Agreement, as amended, supplemented,
replaced or otherwise modified from time to time in accordance with
this Agreement.
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"Applicable Margin": for each Type of Loan, the rate per
annum set forth under the relevant column heading below:
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Base Rate Eurodollar
Loans Loans
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Revolving Credit Loans 2.25% 3.25%
Swing Line Loans 2.25% N/A
Tranche A Term Loans 2.25% 3.25%
Tranche B Term Loans 2.75% 3.75%
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provided, that on and after the first Adjustment Date occurring after
the completion of two full fiscal quarters of the Borrower after the
Closing Date, the Applicable Margin with respect to Revolving Credit
Loans, Swing Line Loans and Tranche A Term Loans will be determined
pursuant to the Pricing Grid.
"Application": an application, in such form as the Issuing
Lender may specify from time to time, requesting the Issuing Lender to
open a Letter of Credit.
"Arrangers": as defined in the preamble hereto.
"Asset Sale": any Disposition of Property or series of related
Dispositions of Property (excluding any such Disposition permitted by
clause (a), (b), (c) or (d) of Section 7.5) which yields gross proceeds
to Holdings, the Borrower or any of its Subsidiaries (valued at the
initial principal amount thereof in the case of non-cash proceeds
consisting of notes or other debt securities and valued at fair market
value as determined by the Administrative Agent in the case of other
non-cash proceeds) in excess of $250,000.
"Assignee": as defined in Section 10.6(c).
"Assignment and Acceptance": as defined in Section 10.6(c).
"Assignor": as defined in Section 10.6(c).
"Available Revolving Credit Commitment": as to any Revolving
Credit Lender at any time, an amount equal to the excess, if any, of
(a) such Revolving Credit Lender's Revolving Credit Commitment then in
effect over (b) such Revolving Credit Lender's Revolving Extensions of
Credit then outstanding; provided, that in calculating any Lender's
Revolving Extensions of Credit for the purpose of determining such
Lender's (other than the Swing Line Lender) Available Revolving Credit
Commitment pursuant to Section 2.9(a), the aggregate principal amount
of Swing Line Loans then outstanding shall be deemed to be zero.
"Base Rate": for any day, a rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to the greatest of (a) the
Prime Rate in effect on such day and (b) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1%. For purposes hereof: "Prime
Rate" shall mean the rate of interest per annum publicly announced from
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time to time by the Reference Lender as its prime or base rate in
effect at its principal office in New York City (the Prime Rate not
being intended to be the lowest rate of interest charged by the
Reference Lender in connection with extensions of credit to debtors).
Any change in the Base Rate due to a change in the Prime Rate or the
Federal Funds Effective Rate shall be effective as of the opening of
business on the effective day of such change in the Prime Rate or the
Federal Funds Effective Rate, respectively.
"Base Rate Loans": Loans for which the applicable rate of
interest is based upon the Base Rate.
"Benefited Lender": as defined in Section 10.7.
"Board": the Board of Governors of the Federal Reserve System
of the United States (or any successor).
"Borrower": as defined in the preamble hereto.
"Borrowing Date": any Business Day specified by the Borrower
as a date on which the Borrower requests the relevant Lender(s) to make
Loans hereunder.
"Borrower Subordinated Debt Documentation": the Borrower
Subordinated Note Purchase Agreement and the Warrant Agreement,
together with any other instruments and agreements entered into from
time to time in accordance herewith by the Borrower or its Subsidiaries
in connection therewith, as the same may be amended, supplemented,
replaced or otherwise modified from time to time in accordance with
this Agreement.
"Borrower Subordinated Note Purchase Agreement": the Note
Purchase Agreements, dated as of September 29, 2000, entered into by
the Borrower and certain of its Subsidiaries in connection with the
issuance of the Borrower Subordinated Notes, as the same may be
amended, supplemented, replaced or otherwise modified from time to time
in accordance with this Agreement.
"Borrower Subordinated Notes": the subordinated notes of the
Borrower due 2008 issued on the Closing Date pursuant to the Borrower
Subordinated Note Purchase Agreement, as the same may be amended,
supplemented, replaced or otherwise modified from time to time in
accordance with this Agreement.
"Business Day": (i) for all purposes other than as covered by
clause (ii) below, a day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by
law to close and (ii) with respect to all notices and determinations in
connection with, and payments of principal and interest on, Eurodollar
Loans, any day which is a Business Day described in clause (i) and
which is also a day for trading by and between banks in Dollar deposits
in the interbank eurodollar market.
"Capital Expenditures": for any period, with respect to any
Person, the aggregate of all expenditures by such Person and its
Subsidiaries for the acquisition or leasing (pursuant to a capital
lease) of fixed or capital assets (including by way of the acquisition
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of the Capital Stock of a business unit) or additions to equipment
(including replacements, capitalized repairs and improvements during
such period) which are defined as capital assets under GAAP.
"Capital Lease Obligations": as to any Person, the obligations
of such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal
property, or a combination thereof, which obligations are required to
be classified and accounted for as capital leases on a balance sheet of
such Person under GAAP, and, for the purposes of this Agreement, the
amount of such obligations at any time shall be the capitalized amount
thereof at such time determined in accordance with GAAP.
"Capital Stock": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person
(other than a corporation) and any and all warrants, rights or options
to purchase any of the foregoing.
"Cash Equivalents": (a) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States Government or
issued by any agency thereof and backed by the full faith and credit of
the United States, in each case maturing within one year from the date
of acquisition; (b) certificates of deposit, time deposits, eurodollar
time deposits or overnight bank deposits having maturities of six
months or less from the date of acquisition issued by any Lender or by
any commercial bank organized under the laws of the United States of
America or any state thereof having combined capital and surplus of not
less than $500,000,000; (c) commercial paper of an issuer rated at
least A-1 by S&P or P-1 by Moody's, or carrying an equivalent rating by
a nationally recognized rating agency, if both of the two named rating
agencies cease publishing ratings of commercial paper issuers
generally, and maturing within six months from the date of acquisition;
(d) repurchase obligations of any Lender or of any commercial bank
satisfying the requirements of clause (b) of this definition, having a
term of not more than 30 days with respect to securities issued or
fully guaranteed or insured by the United States government; (e)
securities with maturities of one year or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or
territory of the United States, by any political subdivision or taxing
authority of any such state, commonwealth or territory or by any
foreign government, the securities of which state, commonwealth,
territory, political subdivision, taxing authority or foreign
government (as the case may be) are rated at least A by S&P or A by
Moody's; (f) securities with maturities of six months or less from the
date of acquisition backed by standby letters of credit issued by any
Lender or any commercial bank satisfying the requirements of clause (b)
of this definition; or (g) shares of money market mutual or similar
funds which invest exclusively in assets satisfying the requirements of
clauses (a) through (f) of this definition.
"Certificate of Designation": the Certificate of Preferences
and Rights of the Senior Preferred Stock, par value $0.01 per share, as
adopted by the board of directors of
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Holdings on September 27, 2000, as amended from time to time in
accordance with the terms hereof.
"Closing Date": the date on which the conditions precedent set
forth in Section 5.1 shall have been satisfied, which date shall be not
later than September 30, 2000.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral": all Property of the Loan Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by any
Security Document, including, without limitation, the Intellectual
Property Collateral.
"Commitment": as to any Lender, the sum of the Tranche A Term
Loan Commitment, the Tranche B Term Loan Commitment and the Revolving
Credit Commitment of such Lender.
"Commitment Fee Rate": 1/2 of 1% per annum; provided, that on
and after the first Adjustment Date occurring after the completion of
two full fiscal quarters of the Borrower after the Closing Date, the
Commitment Fee Rate will be determined pursuant to the Pricing Grid.
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Borrower within
the meaning of Section 4001 of ERISA or is part of a group that
includes the Borrower and that is treated as a single employer under
Section 414 of the Code or of which the Borrower is a general partner.
"Compliance Certificate": a certificate duly executed by a
Responsible Officer substantially in the form of Exhibit B.
"Confidential Information Memorandum": the Confidential
Information Memorandum dated July 2000 and furnished to the initial
Lenders.
"Consolidated EBITDA": of any Person for any period,
Consolidated Net Income of such Person and its Subsidiaries for such
period plus, without duplication and to the extent reflected as a
charge in the statement of such Consolidated Net Income for such
period, the sum of (a) income tax expense, (b) Consolidated Interest
Expense of such Person and its Subsidiaries, amortization or write-off
of debt discount and debt issuance costs and commissions, discounts and
other fees and charges associated with Indebtedness (including, in the
case of the Borrower, the Loans and Letters of Credit), (c)
depreciation and amortization expense, (d) amortization of intangibles
(including, but not limited to, goodwill) and organization costs, (e)
any extraordinary, unusual or non-recurring expenses or losses
determined in accordance with GAAP (including, whether or not otherwise
includable as a separate item in the statement of such Consolidated Net
Income for such period, losses on sales of assets outside of the
ordinary course of business) and (f) any other non-cash charges and (g)
management fees, and minus, without duplication, to the extent included
in the statement of such Consolidated Net Income for such period, the
sum of (a) any extraordinary, unusual or non-recurring
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income or gains (including, whether or not otherwise includable as a
separate item in the statement of such Consolidated Net Income for such
period, gains on the sales of assets outside of the ordinary course of
business) and (b) any other non-cash income, all as determined on a
consolidated basis. For purposes of this Credit Agreement, Consolidated
EBITDA shall be (i) determined in accordance with Section 7.1(d) and
(ii) increased by $7,200,000 for FQ4, 2000, $4,300,000 for FQ1, 2001
and $2,200,000 for FQ2, 2001.
"Consolidated Fixed Charge Coverage Ratio": for any period,
the ratio of (a) Consolidated EBITDA of the Borrower and its
Subsidiaries for such period plus Rent payments made or required to be
made during such period minus Maintenance Capital Expenditures for such
period to (b) Consolidated Fixed Charges for such period.
"Consolidated Fixed Charges": for any period, the sum (without
duplication) of (a) Consolidated Interest Expense of the Borrower and
its Subsidiaries for such period, (b) cash income taxes actually paid
by the Borrower or any of its Subsidiaries on a consolidated basis in
respect of such period (excluding taxes on extraordinary gains), (c)
scheduled payments made during such period on account of principal of
Indebtedness of the Borrower or any of its Subsidiaries (including
scheduled principal payments in respect of the Term Loans, (d) Rent
payments made or required to be made during such period by the Borrower
or any of its Subsidiaries and (e) Restricted Payments to the extent
paid to Holdings to service cash interest on the Holdings Senior
Unsecured Notes pursuant to Section 7.6(b).
"Consolidated Interest Coverage Ratio": for any period, the
ratio of (a) Consolidated EBITDA of the Borrower and its Subsidiaries
for such period to (b) Consolidated Interest Expense of the Borrower
and its Subsidiaries for such period, provided that for the purposes of
determining the Consolidated Interest Coverage Ratio (i) for the period
of four consecutive fiscal quarters of Holdings ending January 2, 2001,
Consolidated Interest Expense shall be deemed to be equal to
Consolidated Interest Expense for the fiscal quarter ending January 2,
2001, multiplied by four, (ii) for the period of four consecutive
fiscal quarters of Holdings ending April 19, 2001 Consolidated Interest
Expense shall be deemed to be equal to Consolidated Interest Expense
for the period of two consecutive fiscal quarters ending April 19,
2001, multiplied by two and (iii) for the period of four consecutive
fiscal quarters of Holdings ending July 12, 2001, Consolidated Interest
Expense shall be deemed to be equal to Consolidated Interest Expense
for the period of three consecutive fiscal quarters ending July 12,
2001, multiplied by 4/3.
"Consolidated Interest Expense": of any Person for any period,
total cash interest expense (including that attributable to Capital
Lease Obligations) of such Person and its Subsidiaries for such period
with respect to all outstanding Indebtedness of such Person and its
Subsidiaries (including, without limitation, all commissions, discounts
and other fees and charges owed by such Person with respect to letters
of credit and bankers' acceptance financing and net cash costs of such
Person under Hedge Agreements in respect of interest rates to the
extent such net costs are allocable to such period in accordance with
GAAP), net of interest income for such period.
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"Consolidated Leverage Ratio": as at the last day of any
period of four consecutive fiscal quarters, the ratio of
(a) Consolidated Total Debt on such day to (b) Consolidated EBITDA of
the Borrower and its Subsidiaries for such period.
"Consolidated Net Income": of any Person for any period, the
consolidated net income (or loss) before cumulative effect of change in
accounting of such Person and its Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP; provided,
that in calculating Consolidated Net Income of the Borrower and its
consolidated Subsidiaries for any Period, there shall be excluded
(a) the income (or deficit) of any Person accrued prior to the date it
becomes a Subsidiary of the Borrower or is merged into or consolidated
with the Borrower or any of its Subsidiaries, (b) the income (or
deficit) of any Person (other than a Subsidiary of the Borrower) in
which the Borrower or any of its Subsidiaries has an ownership
interest, except to the extent that any such income is actually
received by the Borrower or such Subsidiary in the form of dividends or
similar distributions and (c) the undistributed earnings of any
Subsidiary of the Borrower to the extent that the declaration or
payment of dividends or similar distributions by such Subsidiary is not
at the time permitted by the terms of any Contractual Obligation (other
than under any Loan Document) or Requirement of Law applicable to such
Subsidiary.
"Consolidated Senior Leverage Ratio": as at the last day of
any period of four consecutive fiscal quarters, the ratio of
(a) Consolidated Total Debt on such day minus all unsecured
subordinated Indebtedness of the Borrower and its Subsidiaries on such
day to (b) Consolidated EBITDA of the Borrower and its Subsidiaries for
such period, it being understood that for purposes of Section 5.1(m),
Consolidated EBITDA of the Borrower and its Subsidiaries shall be
calculated on a pro forma basis in accordance with the procedures used
in preparing the Confidential Information Memorandum.
"Consolidated Total Debt": at any date, the aggregate
principal amount of all Funded Debt of the Borrower and its
Subsidiaries at such date, determined on a consolidated basis in
accordance with GAAP.
"Continuing Directors": as to any Person, the directors of
such Person on the Closing Date, after giving effect to the Acquisition
and the other transactions contemplated hereby, and each other
director, if, in each case, such other director's nomination for
election to the board of directors of such Person is recommended by the
Sponsor or at least 66-2/3% of the then Continuing Directors or such
other director receives the vote of each of the shareholders of such
Person on the Closing Date in his or her election by the shareholders
of such Person.
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any material agreement,
instrument or other undertaking to which such Person is a party or by
which it or any of its Property is bound.
"Control Agreement": each Control Agreement to be executed and
delivered by each Loan Party party thereto, substantially in the form
of Exhibit D, Exhibit E or Exhibit F, as the case may be, to the
Guarantee and Collateral Agreement, as the same
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may be amended, supplemented, replaced or otherwise modified from time
to time in accordance with this Agreement.
"Control Investment Affiliate": as to any Person, any other
Person that (a) directly or indirectly, is in control of, is controlled
by, or is under common control with, such Person and (b) is organized
by such Person primarily for the purpose of making equity or debt
investments in one or more companies. For purposes of this definition,
"control" of a Person means the power, directly or indirectly, to
direct or cause the direction of the management and policies of such
Person whether by contract or otherwise.
"Core Concept Restaurants": restaurants with the following
concepts: HomeTown Buffet, Granny's Buffet, Old Country Buffet, Country
Buffet (in Colorado and Wyoming) and other value-based, family dining,
scatter bar buffet concepts reasonably acceptable to the Administrative
Agent.
"Default": any of the events specified in Section 8, whether
or not any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
"Derivatives Counterparty": as defined in Section 7.6.
"Disposition": with respect to any Property, any sale, lease,
sale and leaseback, assignment, conveyance, transfer or other
disposition thereof; and the terms "Dispose" and "Disposed of" shall
have correlative meanings.
"Disqualified Stock": any Capital Stock or other ownership or
profit interest of any Loan Party that any Loan Party is or, upon the
passage of time or the occurrence of any event, may, at any time prior
to six months after the final scheduled maturity of the Tranche B Term
Loans, become obligated to redeem, purchase, retire, defease or
otherwise make any payment in respect of in consideration other than
Capital Stock (other than Disqualified Stock).
"Documentation Agent": as defined in the preamble hereto.
"Dollars" and "$": dollars in lawful currency of the United
States of America.
"Domestic Subsidiary": any Subsidiary of the Borrower
organized under the laws of any jurisdiction within the United States
of America.
"ECF Percentage": with respect to any fiscal year of the
Borrower, 75.0%; provided, that, with respect to any fiscal year of the
Borrower ending on or after December 31, 2001, the ECF Percentage shall
be 50.0% if the Consolidated Leverage Ratio as of the last day of such
fiscal year is not greater than 2.0 to 1.0.
"Environmental Laws": any and all laws, rules, orders,
regulations, statutes, ordinances, guidelines, codes, decrees, or other
legally enforceable requirements (including, without limitation, common
law) of any international authority, foreign
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<PAGE> 14
government, the United States, or any state, local, municipal or other
Governmental Authority, regulating, relating to or imposing liability
or standards of conduct concerning protection of the environment or of
human health, or employee health and safety (to the extent related to
employee exposure to hazardous or toxic substances), as has been, is
now, or may at any time hereafter be, in effect.
"Environmental Permits": any and all permits, licenses,
approvals, registrations, notifications, exemptions and any other
authorization required under any Environmental Law.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to
a Eurodollar Loan, the aggregate (without duplication) of the maximum
rates (expressed as a decimal fraction) of reserve requirements in
effect on such day (including, without limitation, basic, supplemental,
marginal and emergency reserves under any regulations of the Board or
other Governmental Authority having jurisdiction with respect thereto)
dealing with reserve requirements prescribed for eurocurrency funding
(currently referred to as "Eurocurrency Liabilities" in Regulation D)
maintained by a member bank of the Federal Reserve System. Eurodollar
Loans shall be deemed to constitute Eurocurrency Liabilities and to be
subject to such reserve requirements without benefit or credit for
proration, exceptions or offsets which may be available from time to
time to any Lender under Regulation D.
"Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum
determined on the basis of the rate for deposits in Dollars for a
period equal to such Interest Period commencing on the first day of
such Interest Period appearing on Page 3750 of the Dow Jones Telerate
screen as of 11:00 A.M., London time, two Business Days prior to the
beginning of such Interest Period. In the event that such rate does not
appear on Page 3750 of the Dow Jones Telerate screen (or otherwise on
such screen), the "Eurodollar Base Rate" for purposes of this
definition shall be determined by reference to such other comparable
publicly available service for displaying eurodollar rates as may be
selected by the Administrative Agent.
"Eurodollar Loans": Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum
determined for such day in accordance with the following formula
(rounded upward to the nearest 1/16th of 1%):
Eurodollar Base Rate
------------------------------------
1.00 - Eurocurrency Reserve Requirements
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"Eurodollar Tranche": the collective reference to Eurodollar
Loans the then current Interest Periods with respect to all of which
begin on the same date and end on the same later date (whether or not
such Loans shall originally have been made on the same day).
"Event of Default": any of the events specified in Section 8,
provided that any requirement for the giving of notice, the lapse of
time, or both, has been satisfied.
"Excess Cash Flow": for any fiscal year of the Borrower, the
excess, if any, of (a) the sum, without duplication, of
(i) Consolidated Net Income of Holdings, the Borrower and its
Subsidiaries for such fiscal year, (ii) an amount equal to the amount
of all non-cash charges (including depreciation and amortization)
deducted in arriving at such Consolidated Net Income, (iii) an amount
equal to the aggregate net non-cash loss on the Disposition of Property
by the Borrower and its Subsidiaries during such fiscal year (other
than sales of inventory in the ordinary course of business), to the
extent deducted in arriving at such Consolidated Net Income and (iv)
the net increase during such fiscal year (if any) in deferred tax
accounts of Holdings and its Subsidiaries over (b) the sum, without
duplication, of (i) an amount equal to the amount of all non-cash
credits included in arriving at such Consolidated Net Income, (ii) the
aggregate amount actually paid by the Borrower and its Subsidiaries in
cash during such fiscal year on account of Capital Expenditures and
Permitted Acquisitions (excluding the principal amount of Indebtedness
incurred in connection with such expenditures and acquisitions and any
such expenditures financed with the proceeds of any Reinvestment
Deferred Amount), (iii) the aggregate amount of all permanent optional
reductions of the Revolving Credit Commitments and all optional
prepayments of the Term Loans during such fiscal year, (iv) the
aggregate amount of all regularly scheduled principal payments of
Funded Debt (including, without limitation, the Term Loans) of the
Borrower and its Subsidiaries made during such fiscal year (other than
in respect of any revolving credit facility to the extent there is not
an equivalent permanent reduction in commitments thereunder such that
after giving effect to such commitment reduction the Borrower or the
applicable Subsidiary, as the case may be, would not be able to
reborrow all or any of the amount so prepaid), (v) an amount equal to
the aggregate net non-cash gain on the Disposition of Property by the
Borrower and its Subsidiaries during such fiscal year (other than sales
of inventory in the ordinary course of business), to the extent
included in arriving at such Consolidated Net Income, (vi) the net
decrease during such fiscal year (if any) in deferred tax accounts of
Holdings and its Subsidiaries, (vii) the aggregate amount of Net Cash
Proceeds received with respect to any Asset Sale or Recovery Event to
the extent such amount is included in arriving at Consolidated Net
Income for such fiscal year and (viii) Restricted Payments to the
extent paid to Holdings during such fiscal year to service cash
interest on the Holdings Senior Unsecured Notes pursuant to Section
7.6(b).
"Excess Cash Flow Application Date": as defined in Section
2.12(c).
"Excluded Foreign Subsidiary": any Foreign Subsidiary in
respect of which either (i) the pledge of all of the Capital Stock of
such Subsidiary as Collateral or (ii) the
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guaranteeing by such Subsidiary of the Obligations, would, in the good
faith judgment of the Borrower, (x) result in material adverse tax
consequences to the Loan Parties, taken as a whole or (y) be prohibited
by the laws of the jurisdiction in which such Foreign Subsidiary is
organized; provided, however, that a Foreign Subsidiary that is treated
as a pass-through entity for United States federal income tax purposes
shall not be an Excluded Foreign Subsidiary while so treated.
"Existing Notes": the 7% Convertible Subordinated Notes of
HomeTown Buffet, Inc. due 2002.
"Existing Credit Facilities" : the $50,000,000 revolving
credit facility agented by US BancCorp under a credit agreement dated
April 30, 1996, as amended or otherwise modified prior to the date
hereof.
"Facility": each of (a) the Tranche A Term Loan Commitments
and the Tranche A Term Loans made thereunder (the "Tranche A Term Loan
Facility"), (b) the Tranche B Term Loan Commitments and the Tranche B
Term Loans made thereunder (the "Tranche B Term Loan Facility") and (c)
the Revolving Credit Commitments and the extensions of credit made
thereunder (the "Revolving Credit Facility").
"Federal Funds Effective Rate": for any day, 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 on the next succeeding Business Day by the
Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for
the day of such transactions received by the Reference Lender from
three federal funds brokers of recognized standing selected by it.
"Fee Letter": the Fee Letter, dated June 2, 2000, among the
Sponsor, the Borrower, the Agents and the Arrangers, as the same may be
amended, supplemented, replaced or otherwise modified from time to time
in accordance with this Agreement.
"Fleet Entity" : any of Fleet National Bank or any of its
affiliates.
"Foreign Subsidiary": any Subsidiary of the Borrower that is
not a Domestic Subsidiary.
"FQ1", "FQ2", "FQ3", and "FQ4": when used with a numerical
year designation, the first, second, third or fourth fiscal quarters,
respectively, of such fiscal year of the Borrower (e.g., FQ1 2001 means
the first fiscal quarter of the Borrower's 2001 fiscal year, which
fiscal year ends January 3, 2002).
"Funded Debt": as to any Person, all Indebtedness of such
Person of the types described in clauses (a) through (e) of the
definition of "Indebtedness" in this Section, net of cash and Cash
Equivalents; provided that the amount of cash and Cash Equivalents
included in this calculation cannot exceed $30,000,000.
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"Funding Office": the office specified from time to time by
the Administrative Agent as its funding office by notice to the
Borrower and the Lenders.
"GAAP": generally accepted accounting principles in the United
States of America as in effect from time to time, except that for
purposes of Section 7.1, GAAP shall be determined on the basis of such
principles in effect on the date hereof and consistent with those used
in the preparation of the most recent audited financial statements
delivered pursuant to Section 4.1(b).
"Governing Documents": collectively, as to any Person, the
articles or certificate of incorporation and bylaws, any shareholders
agreement, certificate of formation, limited liability company
agreement, partnership agreement or other formation or constituent
documents of such Person.
"Governmental Authority": any nation or government, any state
or other political subdivision thereof, any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, any securities exchange and
any self regulatory organization including, without limitation, the
National Association of Insurance Commissioners.
"Guarantee and Collateral Agreement": the Guarantee and
Collateral Agreement to be executed and delivered by Holdings, the
Borrower and each Subsidiary Guarantor, substantially in the form of
Exhibit A, as the same may be amended, supplemented, replaced or
otherwise modified from time to time in accordance with this Agreement.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another
Person (including, without limitation, any bank under any letter of
credit) to induce the creation of which the guaranteeing person has
issued a reimbursement, counterindemnity or similar obligation, in
either case guaranteeing or in effect guaranteeing any Indebtedness,
leases, dividends or other obligations (the "primary obligations") of
any other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation
of the guaranteeing person, whether or not contingent, (i) to purchase
any such primary obligation or any Property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for the
purchase or payment of any such primary obligation or (2) to maintain
working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to
purchase Property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation or (iv)
otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the
term Guarantee Obligation shall not include endorsements of instruments
for deposit or collection in the ordinary course of business. The
amount of any Guarantee Obligation of any guaranteeing person shall be
deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Guarantee Obligation is made and (b) the maximum amount for which such
guaranteeing person
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may be liable pursuant to the terms of the instrument embodying such
Guarantee Obligation, unless such primary obligation and the maximum
amount for which such guaranteeing person may be liable are not stated
or determinable, in which case the amount of such Guarantee Obligation
shall be such guaranteeing person's maximum reasonably anticipated
liability in respect thereof as determined by the Borrower in good
faith.
"Guarantors": the collective reference to Holdings and the
Subsidiary Guarantors.
"Headquarters Sale-Leaseback": the sale and leaseback by the
Borrower of its headquarters in Eagan, Minnesota, on the Closing Date
pursuant to documentation reasonably satisfactory to the Lenders.
"Hedge Agreements": all interest rate swaps, caps or collar
agreements or similar arrangements entered into by the Borrower,
Holdings or any of its Subsidiaries providing for protection against
fluctuations in interest rates or currency exchange rates or the
exchange of nominal interest obligations, either generally or under
specific contingencies.
"Holdings": as defined in the preamble hereto.
"Holdings Senior Unsecured Debt Documentation": the Holdings
Senior Unsecured Note Purchase Agreement and the Warrant Agreement,
together with any other instruments and agreements entered into by
Holdings or its Subsidiaries in connection therewith, as the same may
be amended, supplemented, replaced or otherwise modified from time to
time in accordance with this Agreement.
"Holdings Senior Unsecured Note Purchase Agreement": the Note
Purchase Agreements, dated as of September 29, 2000, entered into by
Holdings in connection with the issuance of the Holdings Senior
Unsecured Notes, as the same may be amended, supplemented, replaced or
otherwise modified from time to time in accordance with this Agreement.
"Holdings Senior Unsecured Notes": the notes of Holdings due
2008 issued on the Closing Date pursuant to the Holdings Senior
Unsecured Note Purchase Agreement.
"Hometown": Hometown Buffets, Inc., a Delaware corporation.
"Immaterial Subsidiary": Restaurant Innovations, Inc., a
Minnesota corporation and Pizza Play.
"Indebtedness": of any Person at any date, without
duplication, (a) all indebtedness of such Person for borrowed money,
(b) all obligations of such Person for the deferred purchase price of
Property or services (other than trade payables incurred in the
ordinary course of such Person's business), (c) all obligations of such
Person evidenced by notes, bonds, debentures or other similar
instruments, (d) all indebtedness created or arising under any
conditional sale or other title retention agreement with
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respect to Property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of
default are limited to repossession or sale of such Property), (e) all
Capital Lease Obligations or Synthetic Lease Obligations of such
Person, (f) all obligations of such Person, contingent or otherwise, as
an account party under acceptance, letter of credit or similar
facilities, (g) all obligations of such Person, contingent or
otherwise, to purchase, redeem, retire or otherwise acquire for value
any Capital Stock of such Person at any time prior to six months after
the final scheduled maturity of the Tranche B Term Loans, (h) all
Guarantee Obligations of such Person in respect of obligations of the
kind referred to in clauses (a) through (g) above; (i) all obligations
of the kind referred to in clauses (a) through (h) above secured by (or
for which the holder of such obligation has an existing right,
contingent or otherwise, to be secured by) any Lien on Property
(including, without limitation, accounts and contract rights) owned by
such Person, whether or not such Person has assumed or become liable
for the payment of such obligation, (j) for the purposes of Section
8(e) only, all obligations of such Person in respect of Hedge
Agreements and (k) the liquidation value of any mandatorily redeemable
preferred Capital Stock of such Person or its Subsidiaries held by any
Person other than such Person and its Wholly Owned Subsidiaries.
"Indemnified Liabilities": as defined in Section 10.5.
"Indemnitee": as defined in Section 10.5.
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section
4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Insurance Requirements": all material terms of any insurance
policy required pursuant to this Agreement or any Security Document and
all material regulations and then current standards applicable to or
affecting any Mortgaged Property or any part thereof or any use or
condition thereof, which may, at any time, be recommended by the Board
of Fire Underwriters, if any, having jurisdiction over any Mortgaged
Property, or any other body exercising similar functions.
"Intellectual Property": the collective reference to all
rights, priorities and privileges relating to intellectual property,
whether arising under United States, state, multinational or foreign
laws or otherwise, including, without limitation, copyrights, patents,
trademarks, service-marks, technology, know-how and processes, recipes,
formulas, trade secrets, or licenses (under which the applicable Person
is licensor or licensee) relating to any of the foregoing and all
rights to sue at law or in equity for any infringement or other
impairment thereof, including the right to receive all proceeds and
damages therefrom.
"Intellectual Property Collateral": all Intellectual Property
of the Loan Parties, now owned or hereafter acquired, upon which a Lien
is purported to be created by the Intellectual Property Security
Agreements or the Guarantee and Collateral Agreement.
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"Intellectual Property Security Agreements": the Intellectual
Property Security Agreements to be executed and delivered by certain
Loan Parties, substantially in the form of Exhibit C to the Guarantee
and Collateral Agreement, as the same may be amended, supplemented,
replaced or otherwise modified from time to time in accordance with
this Agreement.
"Interest Payment Date" (a) as to any Base Rate Loan, the last
day of each March, June, September and December to occur while such
Loan is outstanding and the final maturity date of such Loan, (b) as to
any Eurodollar Loan having an Interest Period of three months or less,
the last day of such Interest Period, (c) as to any Eurodollar Loan
having an Interest Period longer than three months, each day which is
three months, or a whole multiple thereof, after the first day of such
Interest Period and the last day of such Interest Period and (d) as to
any Loan (other than any Revolving Credit Loan that is a Base Rate Loan
(unless all Revolving Credit Loans are being repaid in full in
immediately available funds and the Revolving Credit Commitments
terminated) and any Swing Line Loan), the date of any repayment or
prepayment made in respect thereof.
"Interest Period": as to any Eurodollar Loan, (a) initially,
the period commencing on the borrowing or conversion date, as the case
may be, with respect to such Eurodollar Loan and ending one, two, three
or six months thereafter, as selected by the Borrower in its Notice of
Borrowing or notice of conversion, as the case may be, given with
respect thereto; and (b) thereafter, each period commencing on the last
day of the next preceding Interest Period applicable to such Eurodollar
Loan and ending one, two, three or six months thereafter, as selected
by the Borrower by irrevocable notice to the Administrative Agent not
less than three Business Days prior to the last day of the then current
Interest Period with respect thereto; provided that, all of the
foregoing provisions relating to Interest Periods are subject to the
following:
(i) if any Interest Period would otherwise end on a
day that is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless the result
of such extension would be to carry such Interest Period into
another calendar month in which event such Interest Period
shall end on the immediately preceding Business Day;
(ii) any Interest Period that would otherwise extend
beyond the Revolving Credit Termination Date or beyond the
date final payment is due on the Tranche A Term Loans or the
Tranche B Term Loans, as the case may be, shall end on the
Revolving Credit Termination Date or such due date, as
applicable;
(iii) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last
Business Day of a calendar month; and
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(iv) the Borrower shall select Interest Periods so
as not to require a payment or prepayment of any Eurodollar
Loan during an Interest Period for such Loan.
"Investments": as defined in Section 7.8.
"Issuing Lender": Fleet National Bank and U.S. Bank, in their
respective capacities as issuers of Letters of Credit, and any other
Revolving Credit Lender selected by the Administrative Agent and the
Borrower.
"L/C Commitment": $10,000,000.
"L/C Fee Payment Date": the last day of each March, June,
September and December and the last day of the Revolving Credit
Commitment Period.
"L/C Obligations": at any time, an amount equal to the sum of
(a) the aggregate then undrawn and unexpired amount of the then
outstanding Letters of Credit and (b) the aggregate amount of drawings
under Letters of Credit that have not then been reimbursed pursuant to
Section 3.5.
"L/C Participants": the collective reference to all the
Revolving Credit Lenders other than the applicable Issuing Lender.
"Lehman Entity": any of Lehman Commercial Paper Inc. or any of
its affiliates (including, without limitation, Syndicated Loan Funding
Trust).
"Lender Addendum": with respect to any initial Lender, a
Lender Addendum, substantially in the form of Exhibit J, to be executed
and delivered by such Lender on the date hereof as provided in Section
10.18.
"Lenders": as defined in the preamble hereto and includes the
Issuing Lenders.
"Letters of Credit": as defined in Section 3.1(a).
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or
other security interest or any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title
retention agreement and any capital lease having substantially the same
economic effect as any of the foregoing).
"Loan": any loan made by any Lender pursuant to this
Agreement.
"Loan Documents": this Agreement, the Security Documents, the
Fee Letter, the Applications and the Notes.
"Loan Parties": Holdings, the Borrower and each Subsidiary of
the Borrower which is a party to a Loan Document (including pursuant to
Section 6.10).
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"Maintenance Capital Expenditures": for any period, actual
Capital Expenditures during such period for maintenance, repair, upkeep
and renovation.
"Majority Facility Lenders": with respect to any Facility, the
holders of more than 50% of the aggregate unpaid principal amount of
the Term Loans or the Total Revolving Extensions of Credit, as the case
may be, outstanding under such Facility (or, in the case of the
Revolving Credit Facility, prior to any termination of the Revolving
Credit Commitments, the holders of more than 50% of the Total Revolving
Credit Commitments).
"Majority Revolving Credit Facility Lenders": the Majority
Facility Lenders in respect of the Revolving Credit Facility.
"Management Investors": collectively, Roe Hatlen, Kerry Kramp
and Dennis Scott.
"Material Adverse Effect": a material adverse effect on (a)
the Acquisition, or (b) the business, assets, liabilities, property,
condition (financial or otherwise) or results of operations of the Loan
Parties taken as a whole or (c) the validity or enforceability of this
Agreement or any of the other Loan Documents, or (d) the validity,
enforceability or priority of the Liens purported to be created by the
Security Documents, or (e) the rights or remedies of any Secured Party
hereunder or under any of the other Loan Documents.
"Materials of Environmental Concern": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products, polychlorinated biphenyls, urea-formaldehyde insulation,
asbestos, pollutants, contaminants, radioactive substances, and any
other substances or forces of any kind, whether or not any such
substance or force is defined as hazardous or toxic under any
Environmental Law, that is regulated pursuant to or could give rise to
liability under any Environmental Law.
"Material Subsidiary": any Subsidiary of the Borrower other
than an Immaterial Subsidiary.
"MergerCo": as defined in the preamble hereto.
"Moody's": Moody's Investor Services, Inc.
"Mortgaged Properties": the real properties and leasehold
estates listed on Schedule 1.1, as to which the Administrative Agent
for the benefit of the Secured Parties shall be granted a Lien pursuant
to the Mortgages.
"Mortgages": each of the (i) mortgages and deeds of trust and
(ii) leasehold mortgages and deeds of trust made by any Loan Party in
favor of, or for the benefit of, the Administrative Agent for the
benefit of the Secured Parties, substantially in the form of
Exhibits D-1, D-2 and D-3, as applicable (with such changes thereto as
shall be advisable under the law of the jurisdiction in which such
mortgage or deed of trust is to
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be recorded), as the same may be amended, supplemented, replaced or
otherwise modified from time to time in accordance with this Agreement.
"Multiemployer Plan": a Plan that is a multiemployer plan as
defined in Section 3(37) or 4001(a)(3) of ERISA.
"Net Cash Proceeds": (a) in connection with any Asset Sale or
any Recovery Event, the proceeds thereof in the form of cash and Cash
Equivalents (including any such proceeds received by way of deferred
payment of principal pursuant to a note or installment receivable or
purchase price adjustment receivable or otherwise, but only as and when
received but excluding rent received from any sublessee in connection
with a sublease by a Loan Party of any leasehold interest) of such
Asset Sale or Recovery Event, net of reasonable attorneys' fees,
accountants' fees, investment banking fees, amounts required to be
applied to the repayment of Indebtedness secured by a Lien expressly
permitted hereunder on any asset which is the subject of such Asset
Sale or Recovery Event (other than any Lien pursuant to a Security
Document) and other reasonable and customary fees and expenses, in each
case, to the extent actually incurred in connection therewith and net
of (i) taxes paid or reasonably estimated to be payable as a result
thereof (after taking into account any tax sharing arrangements) and
(ii) amounts provided as a reserve, in accordance with GAAP, against
any liabilities under any indemnification obligations or purchase price
adjustment associated with such Asset Sale (provided that to the extent
and at the time any such amounts are released from such reserve (other
than for the purpose so reserved), such amounts shall constitute Net
Cash Proceeds) and (b) in connection with any issuance or sale of
equity securities or debt securities or instruments or the incurrence
of loans, the cash proceeds received from such issuance or incurrence,
net of reasonable and customary attorneys' fees, investment banking
fees, accountants' fees, underwriting discounts and commissions and
other reasonable and customary fees and expenses, in each case, to the
extent actually incurred in connection therewith.
"Non-Core Concept Restaurants": any restaurants with the
concepts Soup and Salad, Pizza Play, Tahoe Joe's, The Original
Roadhouse Grill or any other restaurant other than a Core Concept
Restaurant.
"Non-Excluded Taxes": as defined in Section 2.20(a).
"Non-U.S. Lender": as defined in Section 2.20(f).
"Notes": the collective reference to the Revolving Credit
Notes, the Term Notes and the Swing Line Notes, if any, evidencing
Loans.
"Notice of Borrowing": a certificate duly executed by a
Responsible Officer of the Borrower substantially in the form of
Exhibit M.
"Obligations": the unpaid principal of and interest on
(including, without limitation, interest accruing after the maturity of
the Loans and Reimbursement Obligations and interest accruing after the
filing of any petition in bankruptcy, or the
19
<PAGE> 24
commencement of any insolvency, reorganization or like proceeding,
relating to any Loan Party, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) the Loans and all
other obligations and liabilities of the Loan Parties to the Arrangers,
to any Agent or to any Lender (or, in the case of Specified Hedge
Agreements, any affiliate of any Lender), whether direct or indirect,
absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection
with, this Agreement, any other Loan Document, the Letters of Credit,
any Specified Hedge Agreement or any other document made, delivered or
given in connection herewith or therewith, whether on account of
principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses (including, without limitation, all fees, charges and
disbursements of counsel to the Arrangers, to any Agent or to any
Lender that are required to be paid by any Loan Party pursuant hereto
or to any other Loan Document) or otherwise; provided, that (i)
Obligations of Holdings, the Borrower or any other Loan Party under any
Specified Hedge Agreement shall be secured and guaranteed pursuant to
the Security Documents only to the extent that, and for so long as, the
other Obligations are so secured and guaranteed and (ii) any release of
Collateral or Guarantors effected in the manner permitted by this
Agreement shall not require the consent of holders of obligations under
Specified Hedge Agreements.
"Other Equity Investors": Sentinel Capital Partners and other
investors selected by the Sponsor and reasonably acceptable to the
Administrative Agent.
"Other Taxes": any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or
similar levies arising from any payment made hereunder or from the
execution, delivery or enforcement of, or otherwise with respect to,
this Agreement or any other Loan Document.
"Participant": as defined in Section 10.6(b).
"Paying Agent": American Stock Transfer & Trust Company.
"Payment Amount": as defined in Section 3.5.
"Payment Office": the office of the Administrative Agent
specified in Section 10.2 or as otherwise specified from time to time
by the Administrative Agent as its payment office by notice to the
Borrower and the Lenders.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor).
"Permits": the collective reference to (i) Environmental
Permits, and (ii) any and all other franchises, licenses, leases,
permits, approvals, notifications, certifications, registrations,
authorizations, exemptions, qualifications, easements, rights of way,
Liens and other rights, privileges and approvals required under any
Requirement of Law.
"Permitted Acquisitions": as defined in Section 7.8(i).
20
<PAGE> 25
"Permitted Investors": the collective reference to the
Sponsor, the Other Equity Investors, and their respective Control
Investment Affiliates.
"Permitted Liens": the collective reference to (i) in the case
of Collateral other than Pledged Stock, Liens permitted by Section 7.3
and (ii) in the case of Collateral consisting of Pledged Stock,
non-consensual Liens permitted by Section 7.3 to the extent arising by
operation of law.
"Person": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or
other entity of whatever nature.
"Pizza Play": Dinertainment, Inc. (d/b/a Pizza Play), a
Delaware corporation.
"Plan": at a particular time, any employee benefit plan as
defined in Section 3(3) of ERISA and which the Borrower or any Commonly
Controlled Entity maintains, administers, contributes to or is required
to contribute to or under which the Borrower or any Commonly Controlled
Entity could incur any liability.
"Pledged Stock": as defined in the Guarantee and Collateral
Agreement.
"Prepayment Option Notice": a notice executed by a Responsible
Officer of the Borrower substantially in the form of Exhibit H.
"Pricing Grid": the pricing grid attached hereto as Annex A.
"Pro Forma Balance Sheet": as defined in Section 4.1(a).
"Projections": as defined in Section 6.2(c).
"Property": any right or interest in or to property of any
kind whatsoever, whether real, personal or mixed and whether tangible
or intangible, including, without limitation, Capital Stock.
"Proxy": the proxy statement of Buffets, Inc., dated August
28, 2000, and first mailed to shareholders of Buffets, Inc., on or
about August 29, 2000.
"Real Estate": all real property used by the Borrower or any
Subsidiary, which the Borrower or such Subsidiary owns in fee or in
which it has a leasehold interest.
"Recovery Event": any settlement of or payment in respect of
any property or casualty insurance claim or any condemnation proceeding
relating to any asset of Holdings, the Borrower or any of its
Subsidiaries.
"Reference Lender": Deutsche Bank AG New York Branch (or any
successor).
"Refunded Swing Line Loans": as defined in Section 2.7(b).
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<PAGE> 26
"Refunding Date": as defined in Section 2.7(c).
"Register": as defined in Section 10.6(d).
"Regulation D": Regulation D of the Board as in effect from
time to time (and any successor to all or a portion thereof).
"Regulation H": Regulation H of the Board as in effect from
time to time (and any successor to all or a portion thereof).
"Regulation T": Regulation T of the Board as in effect from
time to time (and any successor to all or a portion thereof).
"Regulation U": Regulation U of the Board as in effect from
time to time (and any successor to all or a portion thereof).
"Regulation X": Regulation X of the Board as in effect from
time to time (and any successor to all or a portion thereof).
"Reimbursement Obligation": the obligation of the Borrower to
reimburse the Issuing Lender pursuant to Section 3.5 for amounts drawn
under Letters of Credit.
"Reinvestment Deferred Amount": with respect to any
Reinvestment Event, the aggregate Net Cash Proceeds received by
Holdings, the Borrower or any of its Subsidiaries in connection
therewith that are not applied to prepay the Term Loans or reduce the
Revolving Credit Commitments pursuant to Section 2.12(b) as a result of
the delivery of a Reinvestment Notice.
"Reinvestment Event": any Asset Sale or Recovery Event in
respect of which the Borrower has delivered a Reinvestment Notice.
"Reinvestment Notice": a written notice executed by a
Responsible Officer of the Borrower stating that no Default or Event of
Default has occurred and is continuing and that the Borrower (directly
or indirectly through a Wholly Owned Subsidiary to the extent otherwise
permitted hereunder) intends and expects to use all or a specified
portion of the Net Cash Proceeds of an Asset Sale or Recovery Event to
acquire assets (including by way of an acquisition permitted under
Section 7.8) useful in its or such Subsidiary's business.
"Reinvestment Prepayment Amount": with respect to any
Reinvestment Event, the Reinvestment Deferred Amount relating thereto
less any reasonable amount expended prior to the relevant Reinvestment
Prepayment Date to acquire assets useful in the Borrower's business.
"Reinvestment Prepayment Date": with respect to any
Reinvestment Event, the earlier of (a) the date occurring 360 days (or
270 days with respect to any Reinvestment Prepayment Amount that the
Borrower has not, prior to the end of such 270-day period,
22
<PAGE> 27
irrevocably committed to expend on assets useful in the Borrower's
business within 360 days of such Reinvestment Event) after such
Reinvestment Event and (b) the date on which the Borrower shall have
determined not to, or shall have otherwise ceased to, acquire assets
useful in the Borrower's or the applicable Subsidiary's business with
all or any portion of the relevant Reinvestment Deferred Amount.
"Rent": for any period, the aggregate amount of fixed and
contingent rentals (including percentage rents) payable by the Borrower
and its Subsidiaries, determined on a consolidated basis in accordance
with the GAAP, for such period with respect to leases of real property
and fixtures; provided that payments in respect of Capital Lease
Obligations shall not constitute Rent.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty day
notice period is waived under subsections .27, .28, .29, .30, .31, .32,
.34 or .35 of PBGC Reg. Section 4043.
"Required Lenders": at any time, the holders of more than 50%
of (a) until the Closing Date, the Commitments and (b) thereafter, the
sum of (i) the aggregate unpaid principal amount of the Term Loans then
outstanding and (ii) the Total Revolving Credit Commitments then in
effect or, if the Revolving Credit Commitments have been terminated,
the Total Revolving Extensions of Credit then outstanding.
"Required Prepayment Lenders": the Majority Facility Lenders
in respect of each Facility.
"Requirement of Law": as to any Person, the Governing
Documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or
any of its Property or to which such Person or any of its Property is
subject.
"Responsible Officer": as to any Person, the chief executive
officer, president or Chief Financial Officer of such Person, but in
any event, with respect to financial matters, the Chief Financial
Officer of such Person. Unless otherwise qualified, all references to a
"Responsible Officer" shall refer to a Responsible Officer of the
Borrower.
"Restricted Payments": as defined in Section 7.6.
"Revolving Credit Commitment": as to any Lender, the
obligation of such Lender, if any, to make Revolving Credit Loans
and/or participate in Swing Line Loans and Letters of Credit, in an
aggregate principal and/or face amount not to exceed the amount set
forth under the heading "Revolving Credit Commitment" opposite such
Lender's name on Schedule 1 to the Lender Addendum delivered by such
Lender, or, as the case may be, in the Assignment and Acceptance
pursuant to which such Lender
23
<PAGE> 28
became a party hereto, as the same may be changed from time to time
pursuant to the terms hereof.
"Revolving Credit Commitment Period": the period from and
including the Closing Date to the Revolving Credit Termination Date.
"Revolving Credit Lender": each Lender that has a Revolving
Credit Commitment or that is the holder of Revolving Credit Loans.
"Revolving Credit Loans": as defined in Section 2.4.
"Revolving Credit Notes": as defined in Section 2.8(e).
"Revolving Credit Percentage": as to any Revolving Credit
Lender at any time, the percentage which such Lender's Revolving Credit
Commitment then constitutes of the Total Revolving Credit Commitments
(or, at any time after the Revolving Credit Commitments shall have
expired or terminated, the percentage which the aggregate principal
and/or face amount of such Lender's Revolving Extensions of Credit then
outstanding constitutes of the aggregate principal and/or face amount
of the Total Revolving Extensions of Credit then outstanding).
"Revolving Credit Termination Date": September 29, 2005.
"Revolving Extensions of Credit": as to any Revolving Credit
Lender at any time, an amount equal to the sum of (a) the aggregate
principal amount of all Revolving Credit Loans made by such Lender then
outstanding, (b) such Lender's Revolving Credit Percentage of the L/C
Obligations then outstanding and (c) such Lender's Revolving Credit
Percentage of the aggregate principal amount of Swing Line Loans then
outstanding.
"Roadhouse": Distinctive Dining, Inc. (d/b/a Original
Roadhouse Grill), a Delaware corporation.
"S&P": Standard & Poor's Rating Services.
"SEC": the Securities and Exchange Commission (or successors
thereto or an analogous Governmental Authority).
"Secured Parties": collectively, the Arrangers, the Agents,
the Lenders and, with respect to any Specified Hedge Agreement, any
affiliate of any Lender party thereto that has agreed to be bound by
the provisions of Section 7.2 of the Guarantee and Collateral Agreement
as if it were a Lender party hereto and by the provisions of Section 9
hereof as if it were a Lender party hereto.
"Security Documents": the collective reference to the
Guarantee and Collateral Agreement, the Intellectual Property Security
Agreements, the Control Agreements, the Mortgages and all other pledge
and security documents hereafter delivered to the
24
<PAGE> 29
Administrative Agent granting a Lien on any Property of any Person to
secure the obligations and liabilities of any Loan Party under any Loan
Document.
"Seller Notes": as defined in Section 7.2(i).
"Single Employer Plan": any Plan that is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Solvency Certificate": the Solvency Certificate to be
executed and delivered by the Chief Financial Officer of Holdings and
each other Loan Party, substantially in the form of Exhibit K, as the
same may be amended, supplemented or otherwise modified from time to
time in accordance with this Agreement.
"Solvent": when used with respect to any Person, as of any
date of determination, (a) the amount of the "present fair saleable
value" of the assets of such Person will, as of such date, exceed the
amount of all "liabilities of such Person, contingent or otherwise", as
of such date, as such quoted terms are determined in accordance with
applicable federal and state laws governing determinations of the
insolvency of debtors, (b) the present fair saleable value of the
assets of such Person will, as of such date, be greater than the amount
that will be required to pay the liability of such Person on its debts
as such debts become absolute and matured, (c) such Person will not
have, as of such date, an unreasonably small amount of capital with
which to conduct its business, (d) such Person will be able to pay its
debts as they mature, and (e) such Person is not insolvent within the
meaning of any applicable Requirements of Law. For purposes of this
definition, (i) "debt" means liability on a "claim", and (ii) "claim"
means any (x) right to payment, whether or not such a right is reduced
to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured
or (y) right to an equitable remedy for breach of performance if such
breach gives rise to a right to payment, whether or not such right to
an equitable remedy is reduced to judgment, fixed, contingent, matured
or unmatured, disputed, undisputed, secured or unsecured.
"Specified Change of Control": a "change of control" or
similar event (howsoever defined) as defined in the Borrower
Subordinated Note Purchase Agreement, the Holdings Senior Unsecured
Note Purchase Agreement or the Certificate of Designation.
"Specified Hedge Agreement": any Hedge Agreement (a) entered
into by (i) Holdings, Borrower or any of its Subsidiaries and (ii) any
Lender or any affiliate thereof, as counterparty and (b) which has been
designated by such Lender and the Borrower, by notice to the
Administrative Agent and the Syndication Agent not later than 90 days
after the execution and delivery thereof by Holdings, the Borrower or
such Subsidiary, as a Specified Hedge Agreement; provided that the
designation of any Hedge Agreement as a Specified Hedge Agreement shall
not create in favor of any Lender or affiliate thereof that is a party
thereto any rights in connection with the management or release of any
Collateral or of the obligations of any Guarantor under the Guarantee
and Collateral Agreement.
25
<PAGE> 30
"Sponsor": Caxton-Iseman Capital, Inc.
"Stockholders' Agreement": the Stockholders' Agreement among
Holdings, Caxton-Iseman Investments, L.P. and the other investors party
thereto, dated as of September 29, 2000 amended from time to time in
accordance with the provisions hereof.
"Subordinated Debt Documentation": the Borrower Subordinated
Debt Documentation and the Holdings Senior Unsecured Debt
Documentation.
"Subordinated Intercompany Note": the Subordinated
Intercompany Note to be executed and delivered by Holdings, the
Borrower and each of its Subsidiaries, substantially in the form of
Exhibit L, as the same may be amended, supplemented, replaced or
otherwise modified from time to time in accordance with this Agreement.
"Subordinated Note Purchase Agreements": the Borrower
Subordinated Note Purchase Agreement and Holdings Senior Unsecured Note
Purchase Agreement.
"Subordinated Notes": the Borrower Subordinated Notes and the
Holdings Senior Unsecured Notes.
"Subsidiary": as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or
other ownership interests having ordinary voting power (other than
stock or such other ownership interests having such power only by
reason of the happening of a contingency) to elect a majority of the
board of directors or other managers of such corporation, partnership
or other entity are at the time owned, directly or indirectly through
one or more intermediaries, or both, by such Person. Unless otherwise
qualified, all references to a "Subsidiary" or to "Subsidiaries" in
this Agreement shall refer to a Subsidiary or Subsidiaries of the
Borrower.
"Subsidiary Guarantor": each Subsidiary of the Borrower other
than any Excluded Foreign Subsidiary.
"Swing Line Commitment": the obligation of the Swing Line
Lender to make Swing Line Loans pursuant to Section 2.6 in an aggregate
principal amount at any one time outstanding not to exceed $2,500,000.
"Swing Line Lender": The Administrative Agent, in its capacity
as the lender of Swing Line Loans.
"Swing Line Loans": as defined in Section 2.6.
"Swing Line Notes": as defined in Section 2.8(e).
"Swing Line Participation Amount": as defined in Section
2.7(c).
"Syndication Agent": as defined in the preamble hereto.
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<PAGE> 31
"Synthetic Lease Obligations": all monetary obligations of a
Person under (a) a so-called synthetic, off-balance sheet or tax
retention lease, or (b) an agreement for the use or possession of
property creating obligations which do not appear on the balance sheet
of such Person but which, upon the insolvency or bankruptcy of such
Person, would be characterized as the Indebtedness of such Person
(without regard to accounting treatment).
"Tahoe Joe's": Tahoe Joe's Inc., a Delaware corporation.
"Taking": a taking or voluntary conveyance during the term of
this Agreement of all or part of any Mortgaged Property, or any
interest therein or right accruing thereto or use thereof, as the
result of, or in settlement of, any condemnation or other eminent
domain proceeding by any Governmental Authority affecting a Mortgaged
Property or any portion thereof, whether or not the same shall have
actually been commenced.
"Term Loan Facilities": the collective reference to the
Tranche A Term Loan Facility and the Tranche B Term Loan Facility.
"Term Loan Lenders": the collective reference to the Tranche A
Term Loan Lenders and the Tranche B Term Loan Lenders.
"Term Loans": the collective reference to the Tranche A Term
Loans and the Tranche B Term Loans.
"Term Notes": as defined in Section 2.8(e).
"Title Insurance Company": as defined in Section 5.1(r).
"Total Revolving Credit Commitments": at any time, the
aggregate amount of the Revolving Credit Commitments then in effect;
provided that the amount of the Total Revolving Credit Commitments on
the Closing Date shall be $30,000,000.
"Total Revolving Extensions of Credit": at any time, the
aggregate amount of the Revolving Extensions of Credit of the Revolving
Credit Lenders outstanding at such time.
"Tranche A Term Loan": as defined in Section 2.1.
"Tranche A Term Loan Commitment": as to any Tranche A Term
Loan Lender, the obligation of such Lender, if any, to make a Tranche A
Term Loan to the Borrower hereunder in a principal amount not to exceed
the amount set forth under the heading "Tranche A Term Loan Commitment"
opposite such Lender's name on Schedule 1 to the Lender Addendum
delivered by such Lender, or, as the case may be, in the Assignment and
Acceptance pursuant to which such Lender became a party hereto, as the
same may be changed from time to time pursuant to the terms hereof;
provided that the original aggregate amount of the Tranche A Term Loan
Commitments is $160,000,000.
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<PAGE> 32
"Tranche A Term Loan Lender": each Lender that has a Tranche A
Term Loan Commitment or is the holder of a Tranche A Term Loan.
"Tranche A Term Loan Percentage": as to any Tranche A Term
Loan Lender at any time, the percentage which such Lender's Tranche A
Term Loan Commitment then constitutes of the aggregate Tranche A Term
Loan Commitments (or, at any time after the Closing Date, the
percentage which the aggregate principal amount of such Lender's
Tranche A Term Loans then outstanding constitutes of the aggregate
principal amount of the Tranche A Term Loans then outstanding).
"Tranche B Term Loan": as defined in Section 2.1.
"Tranche B Term Loan Commitment": as to any Tranche B Term
Loan Lender, the obligation of such Lender, if any, to make a Tranche B
Term Loan to the Borrower hereunder in a principal amount not to exceed
the amount set forth under the heading "Tranche B Term Loan Commitment"
opposite such Lender's name on Schedule 1 to the Lender Addendum
delivered by such Lender, or, as the case may be, in the Assignment and
Acceptance pursuant to which such Lender became a party hereto, as the
same may be changed from time to time pursuant to the terms hereof;
provided that the original aggregate amount of the Tranche B Term Loan
Commitments is $150,000,000.
"Tranche B Term Loan Lender": each Lender that has a Tranche B
Term Loan Commitment or which is the holder of a Tranche B Term Loan.
"Tranche B Term Loan Percentage": as to any Tranche B Term
Loan Lender at any time, the percentage which such Lender's Tranche B
Term Loan Commitment then constitutes of the aggregate Tranche B Term
Loan Commitments (or, at any time after the Closing Date, the
percentage which the aggregate principal amount of such Lender's
Tranche B Term Loans then outstanding constitutes of the aggregate
principal amount of the Tranche B Term Loans then outstanding);
provided, that solely for purposes of calculating the amount of each
installment of Tranche B Term Loans (other than the last installment)
payable to a Term Loan Lender pursuant to Section 2.3(b), such Term
Loan Lender's Tranche B Term Loan Percentage shall be calculated
without giving effect to any portion of any prior mandatory prepayment
attributable to such Term Loan Lender's Tranche B Term Loans which
shall have been declined by such Term Loan Lender (or, in the case of
any Term Loan Lender which shall have acquired its Tranche B Term Loans
by assignment from another Person, by such other Person).
"Transactions": as defined in Section 5.1(b).
"Transferee": as defined in Section 10.15.
"Type": as to any Loan, its nature as a Base Rate Loan or a
Eurodollar Loan.
"Warrant Agreement": the Warrant Agreement among Holdings and
the warrant holders party thereto, dated as of September 29, 2000, as
amended from time to time in accordance with the provisions hereof.
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<PAGE> 33
"Wholly Owned Subsidiary": as to any Person, any other Person
all of the Capital Stock of which (other than directors' qualifying
shares required by law) is owned by such Person directly and/or through
other Wholly Owned Subsidiaries.
"Wisconsin Facility": the Borrower's manufacturing facility
located in Marshfield, Wisconsin.
1.2 Other Definitional Provisions. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in the other Loan Documents or any certificate or other
document made or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms relating to Holdings, the Borrower and its Subsidiaries not
defined in Section 1.1 and accounting terms partly defined in Section 1.1, to
the extent not defined, shall have the respective meanings given to them under
GAAP.
(c) 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 to any particular provision of this Agreement, and Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
(e) The expressions "payment in full," "paid in full" and any
other similar terms or phrases when used herein with respect to the Obligations
shall mean the payment in full, in immediately available funds, of all of the
Obligations.
(f) The words "including" and "includes" and words of similar
import when used in this Agreement shall not be limiting and shall mean
"including without limitation" or "includes without limitation", as the case may
be.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Term Loan Commitments. Subject to the terms and conditions
hereof, (a) each Tranche A Term Loan Lender severally agrees to make a term loan
(a "Tranche A Term Loan") to the Borrower on the Closing Date in an amount not
to exceed the amount of the Tranche A Term Loan Commitment of such Lender and
(b) each Tranche B Term Loan Lender severally agrees to make a term loan (a
"Tranche B Term Loan") to the Borrower on the Closing Date in an amount not to
exceed the amount of the Tranche B Term Loan Commitment of such Lender. The Term
Loans may from time to time be Eurodollar Loans or Base Rate Loans, as
determined by the Borrower and notified to the Administrative Agent in
accordance with Sections 2.2 and 2.13.
2.2 Procedure for Term Loan Borrowing. The Borrower shall give
the Administrative Agent irrevocable notice (which notice must be received by
the Administrative
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<PAGE> 34
Agent prior to 10:00 A.M., New York City time, one Business Day prior to the
anticipated Closing Date) requesting that the Term Loan Lenders make the Term
Loans on the Closing Date and specifying the amount to be borrowed. The Term
Loans made on the Closing Date shall initially be Base Rate Loans, and no Term
Loan may be converted into or continued as a Eurodollar Loan having an Interest
Period in excess of one month prior to the date which is 30 days after the
Closing Date. Upon receipt of such notice the Administrative Agent shall
promptly notify each Term Loan Lender thereof. Not later than 12:00 Noon, New
York City time, on the Closing Date each Term Loan Lender shall make available
to the Administrative Agent at the Funding Office an amount in immediately
available funds equal to the Term Loan or Term Loans to be made by such Lender.
The Administrative Agent shall make available to the Borrower the aggregate of
the amounts made available to the Administrative Agent by the Term Loan Lenders
in like funds.
2.3 Repayment of Term Loans. (a) The Tranche A Term Loan of
each Tranche A Term Loan Lender shall mature in 19 consecutive quarterly
installments, commencing on March 31, 2001, each of which shall be in an amount
equal to such Lender's Tranche A Term Loan Percentage multiplied by the amount
set forth below opposite such installment:
<TABLE>
<CAPTION>
Installment Principal Amount
----------- ----------------
<S> <C>
March 31, 2001 $4,000,000
June 30, 2001 $4,000,000
September 30, 2001 $4,000,000
December 31, 2001 $6,000,000
March 31, 2002 $6,000,000
June 30, 2002 $6,000,000
September 30, 2002 $6,000,000
December 31, 2002 $8,000,000
March 31, 2003 $8,000,000
June 30, 2003 $8,000,000
September 30, 2003 $8,000,000
December 31, 2003 $10,000,000
March 31, 2004 $10,000,000
June 30, 2004 $10,000,000
September 30, 2004 $10,000,000
December 31, 2004 $13,000,000
March 31, 2005 $13,000,000
June 30, 2005 $13,000,000
September 30, 2005 $13,000,000
</TABLE>
(b) The Tranche B Term Loan of each Tranche B Term Loan Lender
shall mature in 27 consecutive quarterly installments, commencing on March 31,
2001, each of which shall be in an amount equal to such Lender's Tranche B Term
Loan Percentage multiplied by the amount set forth below opposite such
installment:
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<PAGE> 35
<TABLE>
<CAPTION>
Installment Principal Amount
----------- ----------------
<S> <C>
March 31, 2001 $500,000
June 30, 2001 $500,000
September 30, 2001 $500,000
December 31, 2001 $375,000
March 31, 2002 $375,000
June 30, 2002 $375,000
September 30, 2002 $375,000
December 31, 2002 $375,000
March 31, 2003 $375,000
June 30, 2003 $375,000
September 30, 2003 $375,000
December 31, 2003 $375,000
March 31, 2004 $375,000
June 30, 2004 $375,000
September 30, 2004 $375,000
December 31, 2004 $375,000
March 31, 2005 $375,000
June 30, 2005 $375,000
September 30, 2005 $375,000
December 31, 2005 $22,500,000
March 31, 2006 $22,500,000
June 30, 2006 $22,500,000
September 30, 2006 $22,500,000
December 31, 2006 $26,250,000
March 31, 2007 $26,250,000
</TABLE>
2.4 Revolving Credit Commitments. (a) Subject to the terms and
conditions hereof, each Revolving Credit Lender severally agrees to make
revolving credit loans ("Revolving Credit Loans") to the Borrower from time to
time during the Revolving Credit Commitment Period in an aggregate principal
amount at any one time outstanding which, when added to such Lender's Revolving
Credit Percentage of the sum of (i) the L/C Obligations then outstanding and
(ii) the aggregate principal amount of the Swing Line Loans then outstanding,
does not exceed the amount of such Lender's Revolving Credit Commitment. During
the Revolving Credit Commitment Period the Borrower may use the Revolving Credit
Commitments by borrowing, prepaying the Revolving Credit Loans in whole or in
part, and reborrowing, all in accordance with the terms and conditions hereof.
The Revolving Credit Loans may from time to time be Eurodollar Loans or Base
Rate Loans, as determined by the Borrower and notified to the Administrative
Agent in accordance with Sections 2.5 and 2.13, provided that no Revolving
Credit Loan shall be made as a Eurodollar Loan after the day that is one month
prior to the Revolving Credit Termination Date.
(b) The Borrower shall repay all outstanding Revolving Credit
Loans on the Revolving Credit Termination Date.
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2.5 Procedure for Revolving Credit Borrowing. The Borrower may
borrow under the Revolving Credit Commitments during the Revolving Credit
Commitment Period on any Business Day, provided that the Borrower shall give the
Administrative Agent irrevocable notice in a Notice of Borrowing (which Notice
of Borrowing must be received by the Administrative Agent prior to 12:00 Noon,
New York City time, (a) three Business Days prior to the requested Borrowing
Date, in the case of Eurodollar Loans, or (b) one Business Day prior to the
requested Borrowing Date, in the case of Base Rate Loans), specifying (i) the
amount and Type of Revolving Credit Loans to be borrowed, (ii) the requested
Borrowing Date and (iii) in the case of Eurodollar Loans, the length of the
initial Interest Period therefor. Any Revolving Credit Loans made on the Closing
Date shall initially be Base Rate Loans, and no Revolving Credit Loan may be
made as, converted into or continued as a Eurodollar Loan having an Interest
Period in excess of one month prior to the date which is 60 days after the
Closing Date. Each borrowing under the Revolving Credit Commitments shall be in
an amount equal to (x) in the case of Base Rate Loans, $1,000,000 or a $500,000
multiple in excess thereof (or, if the then aggregate Available Revolving Credit
Commitments are less than $1,000,000, such lesser amount) and (y) in the case of
Eurodollar Loans, $2,000,000 or a $500,000 multiple in excess thereof; provided,
that the Swing Line Lender may request, on behalf of the Borrower, borrowings
under the Revolving Credit Commitments which are Base Rate Loans in other
amounts pursuant to Section 2.7. Upon receipt of any such Notice of Borrowing
from the Borrower, the Administrative Agent shall promptly notify each Revolving
Credit Lender thereof. Each Revolving Credit Lender will make the amount of its
pro rata share of each borrowing available to the Administrative Agent for the
account of the Borrower at the Funding Office prior to 12:00 Noon, New York City
time, on the Borrowing Date requested by the Borrower in funds immediately
available to the Administrative Agent. Such borrowing will then be made
available to the Borrower by the Administrative Agent in like funds as received
by the Administrative Agent.
2.6 Swing Line Commitment. (a) Subject to the terms and
conditions hereof, the Swing Line Lender agrees to make a portion of the credit
otherwise available to the Borrower under the Revolving Credit Commitments from
time to time during the Revolving Credit Commitment Period by making swing line
loans ("Swing Line Loans") to the Borrower; provided that (i) the aggregate
principal amount of Swing Line Loans outstanding at any time shall not exceed
the Swing Line Commitment then in effect (notwithstanding that the Swing Line
Loans outstanding at any time, when aggregated with the Swing Line Lender's
other outstanding Revolving Credit Loans hereunder, may exceed the Swing Line
Commitment then in effect) and (ii) the Borrower shall not request, and the
Swing Line Lender shall not make, any Swing Line Loan if, after giving effect to
the making of such Swing Line Loan, the aggregate amount of the Available
Revolving Credit Commitments would be less than zero. During the Revolving
Credit Commitment Period, the Borrower may use the Swing Line Commitment by
borrowing, repaying and reborrowing, all in accordance with the terms and
conditions hereof. Swing Line Loans shall be Base Rate Loans only.
(b) The Borrower shall repay all outstanding Swing Line Loans
on the Revolving Credit Termination Date.
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2.7 Procedure for Swing Line Borrowing; Refunding of Swing
Line Loans. (a) Whenever the Borrower desires that the Swing Line Lender make
Swing Line Loans it shall give the Swing Line Lender irrevocable telephonic
notice confirmed promptly in writing (which telephonic notice must be received
by the Swing Line Lender not later than 1:00 P.M., New York City time, on the
proposed Borrowing Date), specifying (i) the amount to be borrowed and (ii) the
requested Borrowing Date (which shall be a Business Day during the Revolving
Credit Commitment Period). Each borrowing under the Swing Line Commitment shall
be in an amount equal to $500,000 or a $100,000 multiple in excess thereof. Not
later than 3:00 P.M., New York City time, on the Borrowing Date specified in a
notice in respect of Swing Line Loans, the Swing Line Lender shall make
available to the Administrative Agent at the Funding Office an amount in
immediately available funds equal to the amount of the Swing Line Loan to be
made by the Swing Line Lender. The Administrative Agent shall make the proceeds
of such Swing Line Loan available to the Borrower on such Borrowing Date in
immediately available funds.
(b) The Swing Line Lender, at any time and from time to time
in its sole and absolute discretion may, on behalf of the Borrower (which hereby
irrevocably directs the Swing Line Lender to act on its behalf), on one Business
Day's notice given by the Swing Line Lender no later than 12:00 Noon, New York
City time, request each Revolving Credit Lender to make, and each Revolving
Credit Lender hereby agrees to make, a Revolving Credit Loan, in an amount equal
to such Revolving Credit Lender's Revolving Credit Percentage of the aggregate
amount of the Swing Line Loans (the "Refunded Swing Line Loans") outstanding on
the date of such notice, to repay the Swing Line Lender. Each Revolving Credit
Lender shall make the amount of such Revolving Credit Loan available to the
Administrative Agent at the Funding Office in immediately available funds, not
later than 10:00 A.M., New York City time, one Business Day after the date of
such notice. The proceeds of such Revolving Credit Loans shall be immediately
made available by the Administrative Agent to the Swing Line Lender for
application by the Swing Line Lender to the repayment of the Refunded Swing Line
Loans. The Borrower irrevocably authorizes the Swing Line Lender to charge the
Borrower's accounts with the Administrative Agent (up to the amount available in
each such account) in order to immediately pay the amount of such Refunded Swing
Line Loans to the extent amounts received from the Revolving Credit Lenders are
not sufficient to repay in full such Refunded Swing Line Loans.
(c) If prior to the time a Revolving Credit Loan would have
otherwise been made pursuant to Section 2.7(b), one of the events described in
Section 8(f) shall have occurred and be continuing with respect to the Borrower
or if for any other reason, as determined by the Swing Line Lender in its sole
discretion, Revolving Credit Loans may not be made as contemplated by Section
2.7(b), each Revolving Credit Lender shall, on the date such Revolving Credit
Loan was to have been made pursuant to the notice referred to in Section 2.7(b)
(the "Refunding Date"), purchase for cash an undivided participating interest in
the then outstanding Swing Line Loans by paying to the Swing Line Lender an
amount (the "Swing Line Participation Amount") equal to (i) such Revolving
Credit Lender's Revolving Credit Percentage times (ii) the sum of the aggregate
principal amount of Swing Line Loans then outstanding which were to have been
repaid with such Revolving Credit Loans.
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(d) Whenever, at any time after the Swing Line Lender has
received from any Revolving Credit Lender such Lender's Swing Line Participation
Amount, the Swing Line Lender receives any payment on account of the Swing Line
Loans, the Swing Line Lender will distribute to such Revolving Credit Lender its
Swing Line Participation Amount (appropriately adjusted, in the case of interest
payments, to reflect the period of time during which such Revolving Credit
Lender's participating interest was outstanding and funded and, in the case of
principal and interest payments, to reflect such Revolving Credit Lender's pro
rata portion of such payment if such payment is not sufficient to pay the
principal of and interest on all Swing Line Loans then due); provided, however,
that in the event that such payment received by the Swing Line Lender is
required to be returned, such Revolving Credit Lender will return to the Swing
Line Lender any portion thereof previously distributed to it by the Swing Line
Lender.
(e) Each Revolving Credit Lender's obligation to make the
Loans referred to in Section 2.7(b) and to purchase participating interests
pursuant to Section 2.7(c) shall be absolute and unconditional and shall not be
affected by any circumstance, including, without limitation, (i) any setoff,
counterclaim, recoupment, defense or other right which such Revolving Credit
Lender or the Borrower may have against the Swing Line Lender, the Borrower or
any other Person for any reason whatsoever; (ii) the occurrence or continuance
of a Default or an Event of Default or the failure to satisfy any of the other
conditions specified in Section 5; (iii) any adverse change in the condition
(financial or otherwise) of the Borrower; (iv) any breach of this Agreement or
any other Loan Document by the Borrower, any other Loan Party or any other
Revolving Credit Lender; or (v) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.
2.8 Repayment of Loans; Evidence of Indebtedness. (a) The
Borrower hereby unconditionally promises to pay to the Administrative Agent for
the account of the appropriate Revolving Credit Lender or Term Loan Lender, as
the case may be, (i) the then unpaid principal amount of each Revolving Credit
Loan of such Revolving Credit Lender on the Revolving Credit Termination Date
(or such earlier date on which the Loans become due and payable pursuant to
Section 8), (ii) the then unpaid principal amount of each Swing Line Loan of
such Swing Line Lender on the Revolving Credit Termination Date (or such earlier
date on which the Loans become due and payable pursuant to Section 8) and (iii)
the principal amount of each Term Loan of such Term Loan Lender in installments
according to the amortization schedule set forth in Section 2.3 (or on such
earlier date on which the Loans become due and payable pursuant to Section 8).
The Borrower hereby further agrees to pay interest on the unpaid principal
amount of the Loans from time to time outstanding from the date hereof until
payment in full thereof at the rates per annum, and on the dates, set forth in
Section 2.15.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of the Borrower to such
Lender resulting from each Loan of such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Agreement.
(c) The Administrative Agent, on behalf of the Borrower, shall
maintain the Register pursuant to Section 10.6(d), and a subaccount therein for
each Lender, in which shall be recorded (i) the amount of each Loan made
hereunder and any Note evidencing such Loan, the
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Type thereof and each Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) both the amount of any sum received
by the Administrative Agent hereunder from the Borrower and each Lender's share
thereof.
(d) The entries made in the Register and the accounts of each
Lender maintained pursuant to Section 2.8(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loans made to
such Borrower by such Lender in accordance with the terms of this Agreement.
(e) The Borrower agrees that, upon the request to the
Administrative Agent by any Lender, the Borrower will execute and deliver to
such Lender a promissory note of the Borrower evidencing any Term Loans,
Revolving Credit Loans or Swing Line Loans, as the case may be, of such Lender,
substantially in the forms of Exhibit G-1, G-2 or G-3, respectively, with
appropriate insertions as to date and principal amount (such notes,
respectively, "Term Notes", "Revolving Credit Notes" and "Swing Line Notes").
2.9 Commitment Fees, etc. (a) The Borrower agrees to pay to
the Administrative Agent for the account of each Revolving Credit Lender a
commitment fee for the period from and including the Closing Date to the last
day of the Revolving Credit Commitment Period, computed at the Commitment Fee
Rate on the average daily amount of the Available Revolving Credit Commitment of
such Lender during the period for which payment is made, payable quarterly in
arrears on the last day of each March, June, September and December and on the
Revolving Credit Termination Date, commencing on the first of such dates to
occur after the date hereof.
(b) The Borrower agrees to pay to the Administrative Agent the
fees in the amounts and on the dates from time to time agreed to in writing by
the Borrower and the Administrative Agent including, without limitation,
pursuant to the Fee Letter.
2.10 Termination or Reduction of Revolving Credit Commitments.
The Borrower shall have the right, upon not less than three Business Days'
notice to the Administrative Agent, to terminate the Revolving Credit
Commitments or, from time to time, to reduce the amount of the Revolving Credit
Commitments; provided that no such termination or reduction of Revolving Credit
Commitments shall be permitted if, after giving effect thereto and to any
prepayments of the Revolving Credit Loans and Swing Line Loans made on the
effective date thereof, the Total Revolving Extensions of Credit would exceed
the Total Revolving Credit Commitments. Any such reduction shall be in an amount
equal to $1,000,000, or a multiple thereof, and shall reduce permanently the
Revolving Credit Commitments then in effect.
2.11 Optional Prepayments. The Borrower may at any time and
from time to time prepay the Loans, in whole or in part, without premium or
penalty, upon irrevocable notice delivered to the Administrative Agent at least
three Business Days prior thereto in the case of Eurodollar Loans and at least
one Business Day prior thereto in the case of Base Rate Loans,
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which notice shall (i) designate whether the Borrower is prepaying Revolving
Credit Loans, Tranche A Term Loans or Tranche B Term Loans and (ii) specify the
date and amount of prepayment and whether the prepayment is of Eurodollar Loans
or Base Rate Loans; provided, that if a Eurodollar Loan is prepaid on any day
other than the last day of the Interest Period applicable thereto, the Borrower
shall also pay any amounts owing pursuant to Section 2.21. Upon receipt of any
such notice the Administrative Agent shall promptly notify each relevant Lender
thereof. If any such notice is given, the amount specified in such notice shall
be due and payable on the date specified therein, together with (except in the
case of Revolving Credit Loans (unless all Revolving Credit Loans are being
repaid and the Revolving Credit Commitments terminated) that are Base Rate Loans
and Swing Line Loans) accrued interest to such date on the amount prepaid.
Partial prepayments of Term Loans and Revolving Credit Loans shall be in an
aggregate principal amount of $1,000,000 or a $500,000 multiple in excess
thereof. Partial prepayments of Swing Line Loans shall be in an aggregate
principal amount of $100,000 or a multiple thereof.
2.12 Mandatory Prepayments and Commitment Reductions.
(a) Unless the Required Prepayment Lenders shall otherwise
agree, subject to Section 2.18(d), if any Capital Stock shall be issued (other
than to the Permitted Investors) or any Funded Debt (excluding Funded Debt
incurred in accordance with Section 7.2 as in effect on the date of this
Agreement) shall be incurred, in either case by Holdings, the Borrower or any of
its Subsidiaries, an amount equal to 100% of the Net Cash Proceeds thereof shall
be applied on the date of such issuance or incurrence toward the prepayment of
the Term Loans and the reduction of the Revolving Credit Commitments as set
forth in Section 2.12(d).
(b) Unless the Required Prepayment Lenders shall otherwise
agree, subject to Section 2.18(d), if on any date Holdings, the Borrower or any
of its Subsidiaries shall receive Net Cash Proceeds from any Asset Sale (other
than the Headquarters Sale-Leaseback) or Recovery Event then, unless a
Reinvestment Notice shall be delivered in respect thereof, such Net Cash
Proceeds shall be applied on such date toward the prepayment of the Term Loans
and the reduction of the Revolving Credit Commitments as set forth in Section
2.12(d); provided, that, notwithstanding the foregoing, (i) the aggregate Net
Cash Proceeds of Asset Sales that may be excluded from the foregoing requirement
pursuant to a Reinvestment Notice shall not exceed $10,000,000 in any fiscal
year plus, in the fiscal year that any such Asset Sale occurs as permitted under
Section 7.5, the Net Cash Proceeds from any Asset Sale of Pizza Play, Roadhouse,
the Wisconsin Facility or Tahoe Joe's and (ii) on each Reinvestment Prepayment
Date, an amount equal to the Reinvestment Prepayment Amount with respect to the
relevant Reinvestment Event shall be applied toward the prepayment of the Term
Loans and the reduction of the Revolving Credit Commitments as set forth in
Section 2.12(d).
(c) Unless the Required Prepayment Lenders shall otherwise
agree, subject to Section 2.18(d), if, for any fiscal year of the Borrower
commencing with the fiscal year ending on or about December 31, 2001, there
shall be Excess Cash Flow, the Borrower shall or shall cause the applicable
Subsidiary to, on the relevant Excess Cash Flow Application Date, apply the ECF
Percentage of such Excess Cash Flow toward the prepayment of the Term Loans and
the reduction of the Revolving Credit Commitments as set forth in Section
2.12(d). Each such
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prepayment and commitment reduction shall be made on a date (an "Excess Cash
Flow Application Date") no later than five days after the earlier of (i) the
date on which the financial statements of the Borrower referred to in Section
6.1(a), for the fiscal year with respect to which such prepayment is made, are
required to be delivered to the Lenders and (ii) the date such financial
statements are actually delivered.
(d) Subject to Section 2.18, amounts to be applied in
connection with prepayments and Revolving Credit Commitment reductions made
pursuant to this Section 2.12 shall be applied, first, to the prepayment of the
Term Loans, second, to reduce permanently the Revolving Credit Commitments and,
third, to the Borrower or such other Person as shall be lawfully entitled
thereto. Any such reduction of the Revolving Credit Commitments shall be
accompanied by prepayment of the Revolving Credit Loans and/or Swing Line Loans
to the extent, if any, that the Total Revolving Extensions of Credit exceed the
amount of the Total Revolving Credit Commitments as so reduced, provided that if
the aggregate principal amount of Revolving Credit Loans and Swing Line Loans
then outstanding is less than the amount of the Total Revolving Credit
Commitments as so reduced (because L/C Obligations constitute a portion
thereof), the Borrower shall, to the extent of the balance of such excess,
replace outstanding Letters of Credit and/or deposit an amount in immediately
available funds in a cash collateral account established with the Administrative
Agent for the benefit of the Secured Parties on terms and conditions
satisfactory to the Administrative Agent (and each of Holdings and the Borrower
hereby grants to the Administrative Agent, for the ratable benefit of the
Secured Parties, a continuing security interest in all amounts at any time on
deposit in such cash collateral account to secure all L/C Obligations from time
to time outstanding and all other Obligations). If at any time the
Administrative Agent determines that any funds held in such cash collateral
account are subject to any right or claim of any Person other than the
Administrative Agent and the Secured Parties or that the total amount of such
funds is less than the amount of such excess, the Borrower shall, forthwith upon
demand by the Administrative Agent, pay to the Administrative Agent, as
additional funds to be deposited and held in such cash collateral account, an
amount equal to the excess of (a) the amount of such excess over (b) the total
amount of funds, if any, then held in such cash collateral account that the
Administrative Agent determines to be free and clear of any such right and
claim. The application of any prepayment pursuant to Section 2.11 and this
Section 2.12 shall be made, first, to Base Rate Loans and, second, to Eurodollar
Loans. Each prepayment of the Loans under Section 2.11 and this Section 2.12
(except in the case of Revolving Credit Loans (unless the Revolving Credit Loans
are being repaid in full and the Revolving Credit Commitments terminated) that
are Base Rate Loans and Swing Line Loans) shall be accompanied by accrued
interest to the date of such prepayment to the applicable Lender on the amount
prepaid.
2.13 Conversion and Continuation Options. (a) The Borrower may
elect from time to time to convert Eurodollar Loans to Base Rate Loans by giving
the Administrative Agent at least one Business Day's prior irrevocable notice of
such election, provided that any such conversion of Eurodollar Loans may only be
made on the last day of an Interest Period with respect thereto unless otherwise
consented to by the Administrative Agent (it being understood that any such
consent shall not reduce or otherwise modify the Loan Parties' obligations under
Section 2.21 or any other Section of this Agreement). The Borrower may elect
from time to time to convert Base Rate Loans to Eurodollar Loans by giving the
Administrative Agent at least
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three Business Days' prior irrevocable notice of such election (which notice
shall specify the length of the initial Interest Period therefor), provided that
no Base Rate Loan under a particular Facility may be converted into a Eurodollar
Loan (i) when any Event of Default has occurred and is continuing and the
Administrative Agent or the Majority Facility Lenders in respect of such
Facility have determined in its or their sole discretion not to permit such
conversions or (ii) after the date that is one month prior to the final
scheduled termination or maturity date of such Facility. Upon receipt of any
such notice the Administrative Agent shall promptly notify each relevant Lender
thereof.
(b) Any Eurodollar Loan may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Borrower giving irrevocable notice to the Administrative Agent, in accordance
with the applicable provisions of the term "Interest Period" set forth in
Section 1.1, of the length of the next Interest Period to be applicable to such
Loans, provided that no Eurodollar Loan under a particular Facility may be
continued as such (i) when any Event of Default has occurred and is continuing
and the Administrative Agent has or the Majority Facility Lenders in respect of
such Facility have determined in its or their sole discretion not to permit such
continuations or (ii) after the date that is one month prior to the final
scheduled termination or maturity date of such Facility, and provided, further,
that if the Borrower shall fail to give any required notice as described above
in this paragraph or if such continuation is not permitted pursuant to the
preceding proviso such Loans shall be automatically converted to Base Rate Loans
on the last day of such then expiring Interest Period. Upon receipt of any such
notice the Administrative Agent shall promptly notify each relevant Lender
thereof.
2.14 Minimum Amounts and Maximum Number of Eurodollar
Tranches. Notwithstanding anything to the contrary in this Agreement, all
borrowings, conversions, continuations and optional prepayments of Eurodollar
Loans hereunder and all selections of Interest Periods hereunder shall be in
such amounts and be made pursuant to such elections so that, (a) after giving
effect thereto, the aggregate principal amount of the Eurodollar Loans
comprising each Eurodollar Tranche shall be equal to $2,000,000 or a whole
multiple of $500,000 in excess thereof and (b) no more than ten Eurodollar
Tranches shall be outstanding at any one time.
2.15 Interest Rates and Payment Dates. (a) Each Eurodollar
Loan shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such day
plus the Applicable Margin.
(b) Each Base Rate Loan shall bear interest at a rate per
annum equal to the Base Rate plus the Applicable Margin.
(c) (i) If all or a portion of the principal amount of any
Loan or Reimbursement Obligation shall not be paid when due (whether at the
stated maturity, by acceleration or otherwise), such overdue Loans and
Reimbursement Obligations shall bear interest at a rate per annum that is equal
to (x) in the case of the Loans, the rate that would otherwise be applicable
thereto pursuant to the foregoing provisions of this Section plus 2.0% or (y) in
the case of Reimbursement Obligations, the rate applicable to Base Rate Loans
under the Revolving Credit Facility plus 2.0%, and (ii) if all or a portion of
any interest payable on any
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Loan or Reimbursement Obligation or any commitment fee or other amount payable
hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest at a rate
per annum equal to the rate then applicable to Base Rate Loans under the
relevant Facility plus 2.0% (or, in the case of any such other amounts that do
not relate to a particular Facility, the rate then applicable to Base Rate Loans
under the Revolving Credit Facility plus 2.0%), in each case, with respect to
clauses (i) and (ii) above, from the date of such non-payment until but
excluding the date that such amount is paid in full (after as well as before
judgment).
(d) Interest shall be payable in arrears on each Interest
Payment Date, provided that interest accruing pursuant to paragraph (c) of this
Section shall be payable from time to time on demand.
2.16 Computation of Interest and Fees. (a) Interest, fees and
commissions payable pursuant hereto shall be calculated on the basis of a
360-day year for the actual days elapsed, except that, with respect to Base Rate
Loans the rate of interest on which is calculated on the basis of the Prime
Rate, the interest thereon shall be calculated on the basis of a 365-day year
for the actual days elapsed. The Administrative Agent shall as soon as
practicable notify the Borrower and the relevant Lenders of each determination
of a Eurodollar Rate. Any change in the interest rate on a Loan resulting from a
change in the Base Rate or the Eurocurrency Reserve Requirements shall become
effective as of the opening of business on the day on which such change becomes
effective. The Administrative Agent shall as soon as practicable notify the
Borrower and the relevant Lenders of the effective date and the amount of each
such change in interest rate.
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrower and the Lenders in the absence of
manifest error. The Administrative Agent shall, at the request of the Borrower,
deliver to the Borrower a statement showing the quotations used by the
Administrative Agent in determining any interest rate pursuant to Section
2.15(a).
2.17 Inability to Determine Interest Rate. If prior to the
first day of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that,
by reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for
such Interest Period, or
(b) the Administrative Agent shall have received notice from
the Majority Facility Lenders in respect of the relevant Facility that
the Eurodollar Rate determined or to be determined for such Interest
Period will not adequately and fairly reflect the cost to such Lenders
(as conclusively certified by such Lenders) of making or maintaining
their affected Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar
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Loans under the relevant Facility requested to be made on the first day of such
Interest Period shall be made as Base Rate Loans, (y) any Loans under the
relevant Facility that were to have been converted on the first day of such
Interest Period to Eurodollar Loans shall be continued as Base Rate Loans and
(z) any outstanding Eurodollar Loans under the relevant Facility shall be
converted, on the last day of the then current Interest Period with respect
thereto, to Base Rate Loans. Until such notice has been withdrawn by the
Administrative Agent (as to (a) above, which such notice shall be withdrawn as
soon as practicable after the Administrative Agent has determined that the
circumstances giving rise to the original notice no longer exist and as for (b)
above, which such notice shall be withdrawn as soon as practicable after the
Administrative Agent shall have received notice from the Majority Facility
Lenders in respect of the relevant Facility that the circumstances giving rise
to the original notice no longer exist), no further Eurodollar Loans under the
relevant Facility shall be made or continued as such, nor shall the Borrower
have the right to convert Loans under the relevant Facility to Eurodollar Loans.
2.18 Pro Rata Treatment and Payments. (a) Each borrowing by
the Borrower from the Lenders hereunder, each payment by the Borrower on account
of any commitment fee and any reduction of the Commitments of the Lenders shall
be made pro rata according to the respective Tranche A Term Loan Percentages,
Tranche B Term Loan Percentages or Revolving Credit Percentages, as the case may
be, of the relevant Lenders. Subject to Section 2.18(c), each payment (other
than prepayments and payments with respect to increased costs/taxes) in respect
of principal or interest in respect of the Loans, and each payment in respect of
fees or expenses payable hereunder shall be applied to the amounts of such
obligations owing to the Lenders pro rata according to the respective amounts
then due and owing to the Lenders. The application of any prepayment pursuant to
this Section 2.18 shall be made, first, to Base Rate Loans and, second, to
Eurodollar Loans.
(b) Each mandatory prepayment required by Section 2.12 to be
applied to Term Loans shall be allocated among the Term Loan Facilities pro rata
according to the respective outstanding principal amounts of Term Loans under
such Facilities. Each optional prepayment in respect of the Term Loans shall be
allocated among the Term Loan Facilities pro rata according to the respective
outstanding principal amounts of Term Loans under such Facilities. Each payment
(including each prepayment) of the Term Loans outstanding under any Term Loan
Facility shall be allocated among the Term Loan Lenders holding such Term Loans
pro rata based on the principal amount of such Term Loans held by such Term Loan
Lenders, and shall be applied to the installments of such Term Loans pro rata
based on the remaining outstanding principal amount of such installments.
Amounts prepaid on account of the Term Loans may not be reborrowed.
(c) Each payment (including each prepayment) by the Borrower
on account of principal of and interest on the Revolving Credit Loans shall be
made pro rata according to the respective outstanding principal amounts of the
Revolving Credit Loans then held by the Revolving Credit Lenders. Each payment
in respect of Reimbursement Obligations in connection with any Letter of Credit
shall be made to the applicable Issuing Lender.
(d) Notwithstanding anything to the contrary in Section 2.12
or this Section 2.18, so long as any Tranche A Term Loans are outstanding, each
Tranche B Term Loan
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Lender may, at its option, decline up to 100% of the portion of any mandatory
payment applicable to the Tranche B Term Loans of such Lender; accordingly, with
respect to the amount of any mandatory prepayment described in Section 2.12 that
is allocated to Tranche B Term Loans (such amounts, the "Tranche B Prepayment
Amount"), at any time when Tranche A Term Loans remain outstanding, the Borrower
will, in the case of any mandatory prepayment required to be made pursuant to
Section 2.12, in lieu of applying such amount to the prepayment of Tranche B
Term Loans as provided in Sections 2.12(d) and 2.18(b), on or up to 10 Business
Days prior to the date specified in Section 2.12 for such prepayment, give the
Administrative Agent telephonic notice (promptly confirmed in writing)
requesting that the Administrative Agent prepare and provide to each Tranche B
Term Loan Lender a Prepayment Option Notice as described below and, on the date
specified in Section 2.12 for such prepayment, deposit such amount in a cash
collateral account opened by the Administrative Agent pending application of
such amount in accordance with this Section 2.18(d). As promptly as practicable
after receiving such notice from the Borrower, the Administrative Agent will
send to each Tranche B Term Loan Lender a Prepayment Option Notice, which shall
include an offer by the Borrower to prepay on the date (each a "Prepayment
Date") that is 10 Business Days after the date of the Prepayment Option Notice,
the relevant Tranche B Term Loans of such Lender by an amount equal to the
portion of the Prepayment Amount indicated in such Lender's Prepayment Option
Notice as being applicable to such Lender's Tranche B Term Loans. Any Tranche B
Term Loan Lender which desires to decline the prepayment of a portion of its
Tranche B Term Loans shall so notify the Administrative Agent no later than
11:00 A.M. (New York City time) on or prior to the fifth Business Day prior to
the Prepayment Date and any Tranche B Term Loan Lender who does not so respond
shall be deemed to have accepted the applicable prepayment. On the Prepayment
Date, (i) the Administrative Agent shall apply from the amount deposited in the
cash collateral account pursuant to this Section 2.18(d) the aggregate amount
necessary to prepay that portion of the outstanding relevant Term Loans in
respect of which the Tranche B Term Loan Lenders have accepted prepayment as
described above (each such accepting Tranche B Term Loan Lender, an "Accepting
Lender"), and such amount shall be applied to reduce the Tranche B Prepayment
Amount with respect to each Accepting Lender, (ii) the Administrative Agent
shall apply from the amount deposited in the cash collateral account pursuant to
this Section 2.18(d) an amount equal to 50% of the portion of the Tranche B
Prepayment Amount not accepted by the Tranche B Term Loan Lenders, and such
amount shall be applied to the prepayment of the Tranche A Term Loans, and (iii)
the Administrative Agent shall pay to the Borrower from the amount deposited in
such cash collateral account the remaining 50% of the portion of the Tranche B
Prepayment Amount not accepted by the Tranche B Term Loan Lenders; provided that
if the amount held in such cash collateral account is less than the total amount
required to be paid pursuant to clauses (i) and (ii) of this sentence, the
Borrower shall pay to the Administrative Agent, on the Prepayment Date, in
immediately available funds an amount equal to the difference between such
amounts. Each of Holdings and the Borrower hereby grants to the Administrative
Agent, for the ratable benefit of the Secured Parties, a continuing security
interest in all amounts at any time on deposit in such cash collateral account
to secure all Obligations from time to time outstanding.
(e) All payments (including prepayments) to be made by the
Borrower hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without setoff or counterclaim and shall be made prior
to 12:00 Noon, New York City time, on the due
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date thereof to the Administrative Agent, for the account of the Lenders, at the
Payment Office, in Dollars and in immediately available funds. The
Administrative Agent shall distribute such payments to the Lenders promptly upon
receipt in like funds as received. If any payment hereunder (other than payments
on the Eurodollar Loans) becomes due and payable on a day other than a Business
Day, such payment shall be extended to the next succeeding Business Day. If any
payment on a Eurodollar Loan becomes due and payable on a day other than a
Business Day, the maturity thereof shall be extended to the next succeeding
Business Day unless the result of such extension would be to extend such payment
into another calendar month, in which event such payment shall be made on the
immediately preceding Business Day. In the case of any extension of any payment
of principal pursuant to the preceding two sentences, interest thereon shall be
payable at the then applicable rate during such extension.
(f) Unless the Administrative Agent shall have been notified
in writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not made available to the Administrative
Agent by the required time on the Borrowing Date therefor, such Lender shall pay
to the Administrative Agent, on demand, such amount with interest thereon at a
rate equal to the daily average Federal Funds Effective Rate for the period
until such Lender makes such amount immediately available to the Administrative
Agent. A certificate of the Administrative Agent submitted to any Lender with
respect to any amounts owing under this paragraph shall be conclusive in the
absence of manifest error. If such Lender's share of such borrowing is not made
available to the Administrative Agent by such Lender within three Business Days
of such Borrowing Date, the Administrative Agent shall also be entitled to
recover such amount with interest thereon at the rate per annum applicable to
Base Rate Loans under the relevant Facility, on demand, from the Borrower.
(g) Subject to Section 2.18(d), unless the Administrative
Agent shall have been notified in writing by the Borrower prior to the date of
any payment being made hereunder that the Borrower will not make such payment to
the Administrative Agent, the Administrative Agent may assume that the Borrower
is making such payment, and the Administrative Agent may, but shall not be
required to, in reliance upon such assumption, make available to the Lenders
their respective pro rata shares of a corresponding amount. If such payment is
not made to the Administrative Agent by the Borrower within three Business Days
of such required date, the Administrative Agent shall be entitled to recover, on
demand, from each Lender to which any amount which was made available pursuant
to the preceding sentence, such amount with interest thereon at the rate per
annum equal to the daily average Federal Funds Effective Rate. Nothing herein
shall be deemed to limit the rights of the Administrative Agent or any Lender
against the Borrower.
(h) Each prepayment (other than, with respect to proceeds
received with respect to a Recovery Event (as contemplated by Section 2.12(b))
or pursuant to Section 2.12(c)) in respect of the Tranche B Term Loans shall be
accompanied by a prepayment premium equal to (i) if such prepayment is made on
or prior to the first anniversary of the Closing Date, 102% of
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the principal amount of such prepayment and (ii) if such prepayment is made
after the first anniversary of the Closing Date and through the second
anniversary to the Closing Date, 101% of the principal amount of such
prepayment.
2.19 Requirements of Law. (a) If the adoption of or any change
in any Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement, any Letter of Credit, any
Application or any Eurodollar Loan made by it, or change the basis of
taxation of payments to such Lender in respect thereof (except for
Non-Excluded Taxes covered by Section 2.20 and changes in the rate of
tax on the overall net income of such Lender);
(ii) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement
against assets held by, deposits or other liabilities in or for the
account of, advances, loans or other extensions of credit by, or any
other acquisition of funds by, any office of such Lender that is not
otherwise included in the determination of the Eurodollar Rate
hereunder; or
(iii) shall impose on such Lender any other
condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay such Lender,
upon its demand, any additional amounts set forth in a certificate complying
with Section 2.19(c) necessary to compensate such Lender on an after-tax basis
for such increased cost or reduced amount receivable. If any Lender becomes
entitled to claim any additional amounts pursuant to this Section, it shall
promptly notify the Borrower (with a copy to the Administrative Agent) of the
event by reason of which it has become so entitled.
(b) If any Lender shall have determined that the adoption of
or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under or in respect of any Letter of
Credit to a level below that which such Lender or such corporation could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's or such corporation's policies with respect to capital adequacy)
by an amount deemed by such Lender to be material, then from time to time, after
submission by such Lender to the Borrower (with a copy to the Administrative
Agent) of a written request therefor set forth in a certificate complying with
Section 2.19(c), the Borrower shall pay to such Lender such additional amount or
amounts as will compensate such Lender on an after-tax basis for such reduction.
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(c) A certificate as to any additional amounts payable
pursuant to this Section setting forth the calculation of such amounts in
reasonable detail and submitted by any Lender to the Borrower (with a copy to
the Administrative Agent) shall be conclusive in the absence of manifest error.
The obligations of the Borrower pursuant to this Section shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
2.20 Taxes. (a) All payments made by the Borrower under this
Agreement or any other Loan Document shall be made free and clear of, and
without deduction or withholding for or on account of, any present or future
income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions
or withholdings, now or hereafter imposed, levied, collected, withheld or
assessed by any Governmental Authority, excluding net income taxes and franchise
taxes (imposed in lieu of net income taxes) imposed on any Arranger, any Agent
or any Lender as a result of a present or former connection between such
Arranger, such Agent or such Lender and the jurisdiction of the Governmental
Authority imposing such tax or any political subdivision or taxing authority
thereof or therein (other than any such connection arising solely from such
Arranger's, such Agent's or such Lender's having executed, delivered or
performed its obligations or received a payment under, or enforced, this
Agreement or any other Loan Document). If any such non-excluded taxes, levies,
imposts, duties, charges, fees, deductions or withholdings ("Non-Excluded
Taxes") are required to be withheld from any amounts payable to any Arranger,
any Agent or any Lender hereunder, the amounts so payable to any Arranger, such
Agent or such Lender shall be increased to the extent necessary to yield to any
Arranger, such Agent or such Lender (after payment of all Non-Excluded Taxes)
interest or any such other amounts that would have been received hereunder had
such withholding not been required; provided, however, that the Borrower or a
Guarantor shall not be required to increase any such amounts payable to any
Arranger, any Agent or any Lender with respect to any Non-Excluded Taxes (i)
that are attributable to such Arranger's, such Agent's or such Lender's failure
to comply with the requirements of paragraph (f) of this Section, or (ii) that
are United States withholding taxes imposed (or branch profits taxes imposed in
lieu thereof) on amounts payable to such Arranger, such Agent or such Lender at
the time such Arranger, such Agent or such Lender becomes a party to this
Agreement, except to the extent that (A) the imposition of such withholding
taxes was due to a change in the United States tax law or interpretation thereof
that became effective after the date of this Agreement or (B) such Arranger's,
such Agent's or such Lender's assignor (if any) was entitled, at the time of
assignment, to receive additional amounts from the Borrower or a Guarantor with
respect to such Non-Excluded Taxes pursuant to this Section 2.20(a). The
Borrower or the applicable Guarantor shall make any required withholding and pay
the full amount withheld to the relevant tax authority or other Governmental
Authority in accordance with applicable Requirements of Law.
(b) The Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable Requirements of Law.
(c) The Borrower shall indemnify each Arranger, each Agent and
any Lender, within ten days after written demand therefor, for the full amount
of Non-Excluded Taxes or Other Taxes arising in connection with payments made
under this Agreement (including, without limitation, any Non-Excluded Taxes or
Other Taxes imposed by any jurisdiction on amounts
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payable under this Section 2.20) paid by such Arranger, such Agent or Lender or
any of their respective Affiliates together with penalties, additions to tax
interest and reasonable expenses arising therefrom or with respect thereto.
(d) Whenever any Non-Excluded Taxes or Other Taxes are payable
by the Borrower, as promptly as possible thereafter the Borrower shall send to
the Administrative Agent for the account of the relevant Arranger or the
relevant Agent or Lender, as the case may be, a certified copy of an original
official receipt received by the Borrower showing payment thereof.
(e) The agreements in this Section 2.20 shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
(f) Each Lender (or Transferee) that is not a citizen or
resident of the United States of America, a corporation, partnership or other
entity created or organized in or under the laws of the United States of America
(or any jurisdiction thereof), or any estate or trust that is subject to federal
income taxation regardless of the source of its income (a "Non-U.S. Lender")
shall, to the extent legally able to do so, deliver to the Borrower and the
Administrative Agent (and, in the case of a Participant, to the Lender from
which the related participation shall have been purchased) two copies of either
U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI, or, in the case of a
Non-U.S. Lender claiming exemption from U.S. federal withholding tax under
Section 871(h) or 881(c) of the Code with respect to payments of "portfolio
interest," a statement substantially in the form of Exhibit I to the effect that
such Lender is eligible for a complete exemption from withholding of U.S. taxes
under Section 871(h) or 881(c) of the Code and a Form W-8BEN, or any subsequent
versions thereof or successors thereto properly completed and duly executed by
such Non-U.S. Lender claiming complete exemption from, or a reduced rate of,
U.S. federal withholding tax on all payments by the Borrower under this
Agreement and the other Loan Documents. Such forms shall be delivered by each
Non-U.S. Lender on or before the date it becomes a party to this Agreement (or,
in the case of any Participant, on or before the date such Participant purchases
the related participation). In addition, each Non-U.S. Lender shall deliver such
forms promptly upon the obsolescence or invalidity of any form previously
delivered by such Non-U.S. Lender. Each Non-U.S. Lender shall promptly notify
the Borrower at any time it determines that it is no longer in a position to
provide any previously delivered certificate (or a successor certificate) to the
Borrower. Notwithstanding any other provision of this paragraph, a Non-U.S.
Lender shall not be required to deliver any form pursuant to this paragraph that
such Non-U.S. Lender is not legally able to deliver.
2.21 Indemnity. The Borrower agrees to indemnify each Lender
and to hold each Lender harmless from any loss or expense that such Lender may
sustain or incur as a consequence of (a) default by the Borrower in making a
borrowing of, conversion into or continuation of Eurodollar Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Borrower in making any
prepayment after the Borrower has given a notice thereof in accordance with the
provisions of this Agreement or (c) the making of a prepayment or conversion of
Eurodollar Loans on a day that is not the last day of an Interest Period with
respect thereto. Such indemnification may include an amount equal to the excess,
if any, of (i) the amount of interest that would have
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accrued on the amount so prepaid, or not so borrowed, converted or continued,
for the period from the date of such prepayment or of such failure to borrow,
convert or continue to the last day of such Interest Period (or, in the case of
a failure to borrow, convert or continue, the Interest Period that would have
commenced on the date of such failure) in each case at the applicable rate of
interest for such Loans provided for herein (excluding, however, the Applicable
Margin included therein, if any) over (ii) the amount of interest (as reasonably
determined by such Lender) that would have accrued to such Lender on such amount
by placing such amount on deposit for a comparable period with leading banks in
the interbank eurodollar market. A certificate as to any amounts payable
pursuant to this Section submitted to the Borrower by any Lender shall be
conclusive in the absence of manifest error. This covenant shall survive the
termination of this Agreement and the payment of the Loans and Letters of Credit
and all other amounts payable hereunder.
2.22 Illegality. Notwithstanding any other provision herein,
if the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful for any Lender to
make or maintain Eurodollar Loans as contemplated by this Agreement, and until
the Administrative Agent receives notice from such Lender that such
circumstances no longer exist, (a) the commitment of such Lender hereunder to
make Eurodollar Loans, continue Eurodollar Loans as such and convert Base Rate
Loans to Eurodollar Loans shall forthwith be canceled and (b) such Lender's
Loans then outstanding as Eurodollar Loans, if any, shall be converted
automatically to Base Rate Loans on the respective last days of the then current
Interest Periods with respect to such Loans or within such earlier period as
required by law. If any such conversion of a Eurodollar Loan occurs on a day
which is not the last day of the then current Interest Period with respect
thereto, the Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to Section 2.21.
2.23 Change of Lending Office. Each Lender agrees that, upon
the occurrence of any event giving rise to the operation of Section 2.19,
2.20(a) or 2.22 with respect to such Lender, it will, if requested by the
Borrower, use reasonable efforts (subject to overall policy considerations of
such Lender) to designate another lending office for any Loans affected by such
event with the object of avoiding the consequences of such event; provided, that
such designation is made on terms that, in the sole judgment of such Lender,
cause such Lender and its lending office(s) to suffer no economic, legal or
regulatory disadvantage, and provided, further, that nothing in this Section
shall affect or postpone any of the obligations of any Borrower or the rights of
any Lender pursuant to Section 2.19, 2.20(a) or 2.22.
2.24 Assignment of Commitments under Certain Circumstances.
The Borrower shall be permitted to replace any Lender that (a) requests
reimbursement for amounts owing pursuant to Section 2.19, 2.20(a) or 2.22 or (b)
withholds its consent to any amendment, waiver or other modification of any Loan
Document requested by the Borrower that requires the consent of all of the
Lenders (or that specific Lender), and such amendment, waiver or other
modification of any Loan Document is consented to by the Required Lenders;
provided that (i) such replacement does not conflict with any Requirement of
Law, (ii) no Event of Default shall have occurred and be continuing at the time
of such replacement, (iii) with respect to clause (a) above only, prior to any
such replacement, such Lender shall have taken no action under Section 2.23 so
as to eliminate the continued need for payment of amounts owing pursuant to
Section
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2.19, 2.20(a) or 2.22 or shall not have waived its right to receive same, (iv)
no Agent, Arranger or Lender shall be obligated to purchase the Loans of the
Lender to be replaced or to find a replacement Lender therefor, (v) the
replacement financial institution shall purchase, at par, all Loans and other
amounts owing to such replaced Lender on or prior to the date of replacement,
(vi) the Borrower shall be liable to such replaced Lender under Section 2.21 (as
though Section 2.21 were applicable) if any Eurodollar Loan owing to such
replaced Lender shall be purchased other than on the last day of the Interest
Period relating thereto, (vii) the replacement financial institution, if not
already a Lender, shall be reasonably satisfactory to the Administrative Agent,
(viii) the replacement of such Lender shall be accomplished in accordance with
the provisions of Section 10.6 (provided that the Borrower shall be obligated to
pay the registration and processing fee referred to therein), (ix) until such
time as such replacement shall be consummated, the Borrower shall pay all
additional amounts (if any) required pursuant to Section 2.19, 2.20(a) or 2.22,
as the case may be, and (x) any such replacement shall not eliminate or reduce
the Borrower's obligations to the replaced Lender under Section 10.5 and all
amounts then due and owing to such replaced Lender under Section 10.5 shall have
been paid in full.
SECTION 3. LETTERS OF CREDIT
3.1 L/C Commitment. (a) Subject to the terms and conditions
hereof, each Issuing Lender, in reliance on the agreements of the other
Revolving Credit Lenders set forth in Section 3.4(a), severally agrees to issue
letters of credit for the account of the Borrower ("Letters of Credit") on any
Business Day during the Revolving Credit Commitment Period in such form as may
be approved from time to time by such Issuing Lender; provided that no Issuing
Lender shall have any obligation to issue any Letter of Credit if, after giving
effect to such issuance, (i) the L/C Obligations would exceed the L/C Commitment
or (ii) the aggregate amount of the Available Revolving Credit Commitments would
be less than zero and provided further that the letters of credit issued by U.S.
Bank and existing under the Existing Credit Facilities as set forth on Schedule
7.2(d) shall be deemed issued by U.S. Bank under this Agreement on the Closing
Date. Each Letter of Credit shall (i) be denominated in Dollars and (ii) expire
no later than the earlier of (x) the first anniversary of its date of issuance
and (y) the date which is five Business Days prior to the Revolving Credit
Termination Date, provided that any Letter of Credit with a one-year term may
provide for the renewal thereof for additional one-year periods (which shall in
no event extend beyond the date referred to in clause (y) above).
(b) No Issuing Lender shall at any time be obligated to issue
any Letter of Credit hereunder if such issuance would conflict with, or cause
such Issuing Lender or any L/C Participant to exceed any limits imposed by, any
applicable Requirement of Law.
3.2 Procedure for Issuance of Letter of Credit. The Borrower
may from time to time request that an Issuing Lender issue a Letter of Credit by
delivering to such Issuing Lender at its address for notices specified herein an
Application therefor, completed to the satisfaction of such Issuing Lender, and
such other certificates, documents and other papers and information as such
Issuing Lender may reasonably request. Upon receipt of any Application, such
Issuing Lender will process such Application and the certificates, documents and
other papers and information delivered to it in connection therewith in
accordance with its customary procedures and shall promptly issue the Letter of
Credit requested thereby (but in no event shall
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such Issuing Lender be required to issue any Letter of Credit earlier than three
Business Days after its receipt of the Application therefor and all such other
certificates, documents and other papers and information relating thereto) by
issuing the original of such Letter of Credit to the beneficiary thereof or as
otherwise may be agreed to by such Issuing Lender and the Borrower. Such Issuing
Lender shall furnish a copy of such Letter of Credit to the Borrower promptly
following the issuance thereof. Each Issuing Lender shall promptly furnish to
the Administrative Agent, which shall in turn promptly furnish to the Lenders,
notice of the issuance by it of any Letter of Credit (including the amount
thereof).
3.3 Fees and Other Charges. (a) The Borrower will pay a fee on
the aggregate drawable amount of each outstanding Letter of Credit at a per
annum rate equal to the Applicable Margin then in effect with respect to
Eurodollar Loans under the Revolving Credit Facility, shared ratably among the
Revolving Credit Lenders and payable quarterly in arrears on each L/C Fee
Payment Date after the issuance date of such Letter of Credit. In addition, the
Borrower shall pay to the applicable Issuing Lender for its own account a
fronting fee on the aggregate drawable amount of each outstanding Letter of
Credit issued by it of 1/4 of 1% per annum, payable quarterly in arrears on each
L/C Fee Payment Date after the issuance date of such Letter of Credit.
(b) In addition to the foregoing fees, the Borrower shall pay
or reimburse each Issuing Lender for such normal and customary costs and
expenses as are incurred or charged by such Issuing Lender in issuing,
negotiating, effecting payment under, amending or otherwise administering any
Letter of Credit.
3.4 L/C Participations. (a) Each Issuing Lender irrevocably
agrees to grant and hereby grants to each L/C Participant, and, to induce each
Issuing Lender to issue Letters of Credit hereunder, each L/C Participant
irrevocably agrees to accept and purchase and hereby accepts and purchases from
the Issuing Lender, on the terms and conditions hereinafter stated, for such L/C
Participant's own account and risk an undivided interest equal to such L/C
Participant's Revolving Credit Percentage in such Issuing Lender's obligations
and rights under each Letter of Credit issued by it hereunder and the amount of
each draft paid by such Issuing Lender thereunder. Each L/C Participant
unconditionally and irrevocably agrees each Issuing Lender that, if a draft is
paid under any Letter of Credit for which such Issuing Lender is not reimbursed
in full by the Borrower in accordance with the terms of this Agreement, such L/C
Participant shall pay to such Issuing Lender, regardless of the occurrence or
continuance of a Default or an Event of Default or the failure to satisfy any of
the other conditions specified in Section 5, upon demand, at such Issuing
Lender's address for notices specified herein an amount equal to such L/C
Participant's Revolving Credit Percentage of the amount of such draft, or any
part thereof, that is not so reimbursed.
(b) If any amount required to be paid by any L/C Participant
to an Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed
portion of any payment made by such Issuing Lender under any Letter of Credit is
paid to such Issuing Lender within three Business Days after the date such
payment is due, such L/C Participant shall pay to such Issuing Lender on demand
an amount equal to the product of (i) such amount, times (ii) the daily average
Federal Funds Effective Rate during the period from and including the date such
payment is
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required to the date on which such payment is immediately available to such
Issuing Lender, times (iii) a fraction the numerator of which is the number of
days that elapse during such period and the denominator of which is 360. If any
such amount required to be paid by any L/C Participant pursuant to Section
3.4(a) is not made available to the applicable Issuing Lender by such L/C
Participant within three Business Days after the date such payment is due, such
Issuing Lender shall be entitled to recover from such L/C Participant, on
demand, such amount with interest thereon calculated from such due date at the
rate per annum applicable to Base Rate Loans under the Revolving Credit
Facility. A certificate of the applicable Issuing Lender submitted to any L/C
Participant with respect to any amounts owing under this Section shall be
conclusive in the absence of manifest error.
(c) Whenever, at any time after an Issuing Lender has made
payment under any Letter of Credit and has received from any L/C Participant its
pro rata share of such payment in accordance with Section 3.4(a), such Issuing
Lender receives any payment related to such Letter of Credit (whether directly
from the Borrower or otherwise, including proceeds of collateral applied thereto
by such Issuing Lender), or any payment of interest on account thereof, such
Issuing Lender will distribute to such L/C Participant its pro rata share
thereof; provided, however, that in the event that any such payment received by
such Issuing Lender shall be required to be returned by such Issuing Lender,
such L/C Participant shall return to such Issuing Lender the portion thereof
previously distributed by such Issuing Lender to it.
3.5 Reimbursement Obligation of the Borrower. The Borrower
agrees to reimburse each Issuing Lender on each date on which such Issuing
Lender notifies the Borrower of the date and amount of a draft presented under
any Letter of Credit and paid by such Issuing Lender for the amount of (a) such
draft so paid and (b) any taxes, fees, charges or other costs or expenses
incurred by such Issuing Lender in connection with such payment (the amounts
described in the foregoing clauses (a) and (b) in respect of any drawing,
collectively, the "Payment Amount"). Each such payment shall be made to such
Issuing Lender at its address for notices specified herein in lawful money of
the United States of America and in immediately available funds. Interest shall
be payable on each Payment Amount from the date of the applicable drawing until
payment in full at the rate set forth in (i) until the second Business Day
following the date of the applicable drawing, Section 2.15(b) and (ii)
thereafter, Section 2.15(c). Each drawing under any Letter of Credit shall
(unless an event of the type described in clause (i) or (ii) of Section 8(f)
shall have occurred and be continuing with respect to the Borrower, in which
case the procedures specified in Section 3.4 for funding by L/C Participants
shall apply) constitute a request by the Borrower to the Administrative Agent
for a borrowing pursuant to Section 2.5 of Base Rate Loans (or, at the option of
the Administrative Agent and the Swing Line Lender in their sole discretion, a
borrowing pursuant to Section 2.7 of Swing Line Loans) in the amount of such
drawing. The Borrowing Date with respect to such borrowing shall be the first
date on which a borrowing of Revolving Credit Loans (or, if applicable, Swing
Line Loans) could be made, pursuant to Section 2.5 (or, if applicable, Section
2.7), if the Administrative Agent had received a notice of such borrowing at the
time of such drawing under such Letter of Credit.
3.6 Obligations Absolute. The Borrower's obligations under
this Section 3 shall be absolute and unconditional under any and all
circumstances and irrespective of any
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setoff, counterclaim or defense to payment that the Borrower may have or have
had against any Issuing Lender, any beneficiary of a Letter of Credit or any
other Person. The Borrower also agrees with each Issuing Lender that such
Issuing Lender shall not be responsible for, and the Borrower's Reimbursement
Obligations under Section 3.5 shall not be affected by, among other things, the
validity or genuineness of documents or of any endorsements thereon, even though
such documents shall in fact prove to be invalid, fraudulent or forged, or any
dispute between or among the Borrower and any beneficiary of any Letter of
Credit or any other party to which such Letter of Credit may be transferred or
any claims whatsoever of the Borrower against any beneficiary of such Letter of
Credit or any such transferee. No Issuing Lender shall be liable for any error,
omission, interruption or delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in connection with any Letter of Credit.
The Borrower agrees that any action taken or omitted by an Issuing Lender under
or in connection with any Letter of Credit or the related drafts or documents,
if done in accordance with the standards or care specified in the Uniform
Commercial Code of the State of New York, shall be binding on the Borrower and
shall not result in any liability of such Issuing Lender to the Borrower.
3.7 Letter of Credit Payments. If any draft shall be presented
for payment under any Letter of Credit, the applicable Issuing Lender shall
promptly notify the Borrower of the date and amount thereof. The responsibility
of an Issuing Lender to the Borrower in connection with any draft presented for
payment under any Letter of Credit shall, in addition to any payment obligation
expressly provided for in such Letter of Credit, be limited to determining that
the documents (including each draft) delivered under such Letter of Credit in
connection with such presentment are substantially in conformity with such
Letter of Credit.
3.8 Applications. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 3, the provisions of this Section 3 shall apply.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Arrangers, the Agents and the Lenders to enter
into this Agreement and to make the Loans and issue or participate in the
Letters of Credit, Holdings and the Borrower hereby jointly and severally
represent and warrant to the Arrangers, each Agent and each Lender that:
4.1 Financial Condition. (a) The unaudited pro forma
consolidated balance sheet of Holdings and its consolidated Subsidiaries as at
July 12, 2000 (including the notes thereto) (the "Pro Forma Balance Sheet"),
copies of which have heretofore been furnished to each Lender, has been prepared
giving effect (as if such events had occurred on such date) to (i) the
consummation of the Acquisition, (ii) the Loans to be made and the Borrower
Subordinated Notes and Holdings Senior Unsecured Notes to be issued on the
Closing Date and the use of proceeds thereof and (iii) the payment of fees and
expenses in connection with the foregoing. The Pro Forma Balance Sheet has been
prepared based on the best information available to the Borrower as of the date
of delivery thereof, and presents fairly on a pro forma basis the estimated
financial position of Holdings and its consolidated Subsidiaries as at July 12,
2000, assuming that the events specified in the preceding sentence had actually
occurred at such date.
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(b) The audited consolidated balance sheets of the Borrower
and its Subsidiaries as at December 29, 1999, December 30, 1998 and December 31,
1997, and the related consolidated statements of income and of cash flows for
the fiscal years ended on such dates, reported on by and accompanied by an
unqualified report from Deloitte and Touche LLP, present fairly the consolidated
financial condition of the Borrower and its Subsidiaries as at such date, and
the consolidated results of its operations and its consolidated cash flows for
the respective fiscal years then ended. The unaudited consolidated balance sheet
of the Borrower and its Subsidiaries as at July 12, 2000, and the related
unaudited consolidated statements of income and cash flows for the six-month
period ended on such date, present fairly the consolidated financial condition
of the Borrower and its Subsidiaries as at such date, and the consolidated
results of its operations and its consolidated cash flows for the six-month
period then ended (subject to normal year-end audit adjustments). All such
financial statements, including the related schedules and notes thereto, have
been prepared in accordance with GAAP applied consistently throughout the
periods involved (except as approved by the aforementioned firm of accountants
and disclosed therein). As of the Closing Date and except as contemplated hereby
in connection with the Transactions, Holdings, the Borrower and its Subsidiaries
do not have any material Guarantee Obligations, contingent liabilities and
liabilities for taxes, or any long-term leases or unusual forward or long-term
commitments, including, without limitation, any interest rate or foreign
currency swap or exchange transaction or other obligation in respect of
derivatives, that are not reflected in the most recent financial statements
referred to in this paragraph. During the period from December 29, 1999, to and
including the Closing Date, there has been no Disposition by the Borrower and
its Subsidiaries of any material part of its business or Property other than the
disposition of no more than 15 restaurants in the ordinary course of business.
4.2 No Change. Since December 29, 1999, there has been no
development or event that has had or could reasonably be expected to have a
Material Adverse Effect.
4.3 Corporate Existence; Compliance with Law. Each of
Holdings, the Borrower and its Subsidiaries (a) is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, (b) has the corporate power and authority, and the legal right, to
own and operate its Property, to lease the Property it operates as lessee and to
conduct the business in which it is currently engaged, (c) is duly qualified as
a foreign corporation and in good standing under the laws of each jurisdiction
where its ownership, lease or operation of Property or the conduct of its
business requires such qualification, except to the extent that the failure to
so qualify could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect and (d) is in compliance with all Requirements of Law,
except to the extent that the failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
4.4 Corporate Power; Authorization; Enforceable Obligations.
Each Loan Party has the corporate power and authority, and the legal right, to
make, deliver and perform the Loan Documents and Acquisition Documentation to
which it is a party and, in the case of the Borrower, to borrow hereunder. Each
Loan Party has taken all necessary corporate action to authorize the execution,
delivery and performance of the Loan Documents and Acquisition Documentation to
which it is a party and, in the case of the Borrower, to authorize the
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borrowings on the terms and conditions of this Agreement. No consent or
authorization of, filing with, notice to or other act by or in respect of, any
Governmental Authority or any other Person is required in connection with the
Acquisition and the borrowings hereunder or with the execution, delivery,
performance, validity or enforceability of this Agreement, any of the Loan
Documents or any Acquisition Documentation, except (i) consents, authorizations,
filings and notices described in Schedule 4.4, which consents, authorizations,
filings and notices have been obtained or made and are in full force and effect
and (ii) the filings referred to in Section 4.19. Each Loan Document and
Acquisition Documentation has been duly executed and delivered on behalf of each
Loan Party party thereto. This Agreement constitutes, and each other Loan
Document and Acquisition Documentation upon execution will constitute, a legal,
valid and binding obligation of each Loan Party party thereto, enforceable
against each such Loan Party in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
4.5 No Legal Bar. The execution, delivery and performance of
this Agreement, the other Loan Documents, the Subordinated Debt Documentation
and the Acquisition Documentation, the issuance of Letters of Credit, the
borrowings hereunder and the use of the proceeds thereof will not violate any
Requirement of Law or any Contractual Obligation of Holdings, the Borrower or
any of its Subsidiaries and will not result in, or require, the creation or
imposition of any Lien on any of their respective properties or revenues
pursuant to any Requirement of Law or any such Contractual Obligation (other
than the Liens created by the Security Documents). No Requirement of Law or
Contractual Obligation applicable to Holdings, the Borrower or any of its
Subsidiaries could reasonably be expected to have a Material Adverse Effect.
4.6 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of Holdings or the Borrower, threatened by or against Holdings,
the Borrower or any of its Subsidiaries or against any of their respective
properties or revenues (a) (i) which enjoins, prohibits or otherwise restricts
(or purports to do so) the consummation of the Acquisition or any of the other
transactions contemplated hereby, (ii) with respect to any of the Loan Documents
or the Acquisition Documentation or (iii) any of the transactions contemplated
hereby or thereby (except in the case of (ii) and (iii) above, for those matters
set forth on Schedule 4.6, none of which could reasonably be expected to have a
Material Adverse Effect), or (b) that could reasonably be expected to have a
Material Adverse Effect.
4.7 No Default. Neither Holdings, the Borrower nor any of its
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect that could reasonably be expected to have a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.
4.8 Ownership of Property; Liens. Each of Holdings, the
Borrower and its Subsidiaries is the sole owner of, legally and beneficially,
and has good title in fee simple to, or a valid leasehold interest in, all its
real property, and good title to, or a valid leasehold interest in,
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all its other material Property, and none of such Property is subject to any
claims, liabilities, obligations, charges or restrictions of any kind, nature or
description, or to any Lien, except for any Permitted Lien. None of the Pledged
Stock is subject to any Lien except for Permitted Liens.
4.9 Intellectual Property. Holdings, the Borrower and each of
its Subsidiaries owns, or is licensed to use, all Intellectual Property
necessary for the conduct of its business as currently conducted. No material
claim has been asserted or is pending by any Person challenging or questioning
the use of any Intellectual Property or the validity or effectiveness of any
Intellectual Property, nor does Holdings or the Borrower know of any valid basis
for any such claim. The use of Intellectual Property by Holdings, the Borrower
and its Subsidiaries does not infringe on the rights of any Person in any
material respect.
4.10 Taxes. Each of Holdings, the Borrower and each of its
Subsidiaries has filed or has caused to be filed all federal, state and other
material tax returns that are required to be filed by it and has paid all taxes
shown to be due and payable on said returns or on any assessments made against
it or any of its Property and all other taxes, fees or other charges imposed on
it or any of its Property by any Governmental Authority (other than any taxes,
fees or other charges the amount or validity of which are currently being
contested in good faith by appropriate proceedings and with respect to which
reserves in conformity with GAAP have been provided on the books of Holdings,
the Borrower or its Subsidiaries, as the case may be) the contents of all such
material tax returns are correct and complete in all material respects, no tax
Lien has been filed, and, to the knowledge of Holdings and the Borrower, no
claim is being asserted, with respect to any such tax, fee or other charge.
4.11 Federal Regulations. (a) On the initial Borrowing Date,
no part of the proceeds of the Loans or Letters of Credit will be used for
purchasing or carrying any "margin stock" (within the meaning of Regulation U)
in violation of Regulation U and thereafter no part of the proceeds of the Loans
or Letters of Credit will be used for purchasing or carrying any "margin stock"
(within the meaning of Regulation U) and (b), no part of the proceeds of the
Loans or Letters of Credit will be used for the purpose of purchasing, carrying
or trading in any securities under such circumstances as to involve the Borrower
in a violation of Regulation X or to involve any broker or dealer in a violation
of Regulation T. No indebtedness being reduced or retired out of the proceeds of
the Loans or Letters of Credit was or will be incurred for the purpose of
purchasing or carrying any "margin stock" (within the meaning of Regulation U).
Following application of the proceeds of the Loans and Letters of Credit,
"margin stock" (within the meaning of Regulation U) does not constitute more
than 25% of the value of the assets of Holdings, the Borrower and its
Subsidiaries. None of the transactions contemplated by this Agreement
(including, without limitation, the direct and indirect use of proceeds of the
Loans and Letters of Credit) will violate or result in a violation of Regulation
T, Regulation U or Regulation X. If requested by any Lender or the
Administrative Agent, the Borrower will furnish to the Administrative Agent and
each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form G-3 or FR Form U-1 referred to in Regulation U.
4.12 Labor Matters. There are no strikes, stoppages, slowdowns
or other labor disputes against Holdings, the Borrower or any of its
Subsidiaries pending or, to the knowledge
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of Holdings or the Borrower, threatened that (individually or in the aggregate)
could reasonably be expected to have a Material Adverse Effect. Hours worked by
and payment made to employees of Holdings, the Borrower and its Subsidiaries
have not been in violation of the Fair Labor Standards Act or any other
applicable Requirement of Law dealing with such matters that (individually or in
the aggregate) could reasonably be expected to have a Material Adverse Effect.
All payments due from Holdings, the Borrower or any of its Subsidiaries on
account of employee health and welfare insurance that (individually or in the
aggregate) could reasonably be expected to have a Material Adverse Effect if not
paid have been paid or accrued as a liability on the books of Holdings, the
Borrower or the relevant Subsidiary.
4.13 ERISA. Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Plan, and
each Plan has complied in all material respects with all applicable provisions
of ERISA and the Code. No termination of a Single Employer Plan has occurred,
and no Lien in favor of the PBGC or a Plan has arisen, during such five-year
period. The present value of all accrued benefits under each Single Employer
Plan (based on those assumptions used to fund such Plans) did not, as of the
last annual valuation date prior to the date on which this representation is
made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits by a material amount. Neither the Borrower nor any
Commonly Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan that has resulted or could reasonably be expected to result
in a material liability under ERISA, and neither the Borrower nor any Commonly
Controlled Entity would become subject to any material liability under ERISA if
the Borrower or any such Commonly Controlled Entity were to withdraw completely
from all Multiemployer Plans as of the valuation date most closely preceding the
date on which this representation is made or deemed made. No such Multiemployer
Plan is in Reorganization or Insolvent.
4.14 Investment Company Act; Other Regulations. No Loan Party
is an "investment company" as defined in, or subject to regulation under, the
Investment Company Act of 1940, as amended. No Loan Party is subject to
regulation under any Requirement of Law (other than Regulation X) which limits
or conditions its ability to incur Indebtedness.
4.15 Subsidiaries. (a) The Subsidiaries listed on Schedule
4.15 constitute all the Subsidiaries of the Borrower as of the Closing Date
after giving effect to the Acquisition. Schedule 4.15 sets forth as of the
Closing Date and after giving effect to the Acquisition, the name and
jurisdiction of incorporation of each Subsidiary of Holdings and, as to each
such Subsidiary, the percentage and number of each class of Capital Stock owned
by Holdings, the Borrower and its Subsidiaries.
(b) There are no outstanding subscriptions, options, warrants,
calls, rights or other agreements or commitments (other than stock options
granted to employees or directors and directors' qualifying shares) of any
nature relating to any Capital Stock of the Borrower or any Subsidiary, except
as disclosed on Schedule 4.15. None of Holdings, the Borrower or any of its
Subsidiaries has issued, or authorized the issuance of, any Disqualified Stock.
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(c) The maximum amount of shares of common and preferred stock
of Holdings that can be issued under the Warrant Agreement does not exceed 5.95%
of the outstanding shares of common and preferred stock of Holdings (in the same
ratio as the ratio of common to preferred stock of Holdings held by the Sponsor
on the Closing Date) on a fully diluted basis on the Closing Date.
4.16 Use of Proceeds. The proceeds of the Term Loans shall be
used to finance a portion of the Acquisition and to pay related fees and
expenses. The proceeds of the Revolving Credit Loans and the Swing Line Loans,
and the Letters of Credit, shall be used for general corporate purposes of the
Borrower and its Subsidiaries as permitted under this Agreement.
4.17 Environmental Matters. Other than exceptions to any of
the following that could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect:
(a) Holdings, the Borrower and its Subsidiaries: (i) are, and
have been, in compliance with all applicable Environmental Laws; and
(ii) reasonably believe that compliance with all applicable
Environmental Law that is or is expected to become applicable to any of
them will be timely attained and maintained, without material expense.
(b) Materials of Environmental Concern are not present at, on,
under, in, or about any real property now or formerly owned, leased,
operated or otherwise occupied by Holdings, the Borrower or any of its
Subsidiaries, or at any other location (including, without limitation,
any location to which Materials of Environmental Concern have been sent
for re-use, recycling, treatment, storage, or disposal) which could
reasonably be expected to (i) give rise to liability of Holdings, the
Borrower or any of its Subsidiaries under any applicable Environmental
Law or otherwise result in costs to Holdings, the Borrower or any of
its Subsidiaries, or (ii) interfere with Holdings', the Borrower's or
any of its Subsidiaries' continued operations, or (iii) impair the fair
saleable value of any real property owned or leased by Holdings, the
Borrower or any of its Subsidiaries.
(c) There is no judicial, administrative, or arbitral
proceeding (including any notice of violation or alleged violation)
under or relating to any Environmental Law to which Holdings, the
Borrower or any of its Subsidiaries is, or to the knowledge of Holdings
or the Borrower will be, named as a party that is pending or, to the
knowledge of Holdings or the Borrower, threatened.
(d) Neither Holdings, the Borrower nor any of its Subsidiaries
has received any written request for information, or been notified that
it is a potentially responsible party under or relating to the federal
Comprehensive Environmental Response, Compensation, and Liability Act
or any similar Environmental Law, or with respect to any Materials of
Environmental Concern.
(e) Neither Holdings, the Borrower nor any of its Subsidiaries
has entered into or agreed to any consent decree, order, or settlement
or other agreement, or is subject to any judgment, decree, or order or
other agreement, in any judicial, administrative,
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arbitral, or other forum for dispute resolution, relating to compliance
with or liability under any Environmental Law.
(f) Neither Holdings, the Borrower nor any of its Subsidiaries
has assumed or retained, by contract or operation of law, any
liabilities of any kind, fixed or contingent, known or unknown, under
any Environmental Law or with respect to any Material of Environmental
Concern.
(g) True and correct copies of all environmental site
assessment reports and any other written analyses, summaries or
explanations describing the environmental conditions in, on or about
any Real Estate now or formerly owned, leased, operated or otherwise
occupied by Holdings, the Borrower or any of its Subsidiaries have been
provided to the Administrative Agent to the extent such reports or
other documentation is in the possession and control of Holdings, the
Borrower, or any of its Subsidiaries.
4.18 Accuracy of Information, etc. No statement or information
contained in this Agreement, any other Loan Document, the Confidential
Information Memorandum or any other document, certificate or statement furnished
to the Arrangers, the Administrative Agent, the Syndication Agent, the
Documentation Agent or the Lenders or any of them by or on behalf of Holdings,
the Borrower or any of its Subsidiaries for use in connection with the
transactions contemplated by this Agreement or the other Loan Documents, taken
as a whole, contained as of the date such statement, information, document or
certificate was so furnished (or, in the case of the Confidential Information
Memorandum, as of the date of this Agreement), any untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements contained herein or therein not misleading. The projections and pro
forma financial information contained in the materials referenced above are
based upon good faith estimates and assumptions believed by management of
Holdings and the Borrower to be reasonable at the time made, it being recognized
by the Lenders that such financial information as it relates to future events is
not to be viewed as fact and that actual results during the period or periods
covered by such financial information may differ from the projected results set
forth therein by a material amount. As of the Closing Date, the representations
and warranties contained in the Acquisition Documentation are true and correct
in all material respects. There is no fact known to Holdings or any of its
Subsidiaries that could reasonably be expected to have a Material Adverse Effect
that has not been expressly disclosed herein, in the other Loan Documents, in
the Confidential Information Memorandum or in any other documents, certificates
and written statements furnished to the Arrangers, the Agents and the Lenders
for use in connection with the transactions contemplated hereby and by the other
Loan Documents.
4.19 Security Documents. (a) The Guarantee and Collateral
Agreement is effective to create in favor of the Administrative Agent, for the
benefit of the Secured Parties, a legal, valid, binding and enforceable security
interest in the Collateral described therein and proceeds thereof. In the case
of the Pledged Stock, when any stock certificates representing such Pledged
Stock are delivered to the Administrative Agent, and in the case of the other
Collateral described in the Guarantee and Collateral Agreement, when financing
statements in appropriate form are filed in the offices specified on Schedule
4.19(a)-1 (which financing statements have been duly completed and executed and
delivered to the Administrative Agent) and such other
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filings as are specified on Schedule 3 to the Guarantee and Collateral Agreement
are made (all of which filings have been duly completed and executed and
delivered to the Administrative Agent), the Guarantee and Collateral Agreement
shall constitute a fully perfected Lien on, and security interest in, all right,
title and interest of the Loan Parties in such Collateral which can be perfected
by such filings and the proceeds and products thereof, as security for the
Obligations (as defined in the Guarantee and Collateral Agreement), in each case
prior and superior in right to any other Person (except Permitted Liens).
Schedule 4.19(a)-2 lists each UCC Financing Statement that (i) names any Loan
Party as debtor and (ii) will remain on file after the Closing Date. Schedule
4.19(a)-3 lists each UCC Financing Statement that (i) names any Loan Party as
debtor and (ii) will be terminated on or prior to the Closing Date; and on or
prior to the Closing Date, the Borrower will have delivered to the
Administrative Agent, or caused to be filed, duly completed UCC termination
statements, signed by the relevant secured party, in respect of each such UCC
Financing Statement.
(b) Each of the Mortgages is effective to create in favor of
the Administrative Agent, for the benefit of the Secured Parties, a legal,
valid, binding and enforceable Lien on, and security interest in, the Mortgaged
Properties described, and as defined, therein and proceeds and products thereof,
and when the Mortgages are filed in the offices specified on Schedule 4.19(b),
each such Mortgage shall constitute a Lien on, and security interest in, all of
the Mortgaged Properties and the proceeds and products thereof, as security for
the Obligations, in each case prior and superior in right to any other Person
other than Permitted Liens.
(c) The Intellectual Property Security Agreements are
effective to create in favor of the Administrative Agent, for the benefit of the
Secured Parties, a legal, valid and enforceable security interest in the
Intellectual Property Collateral described therein and proceeds and products
thereof. Upon the filing of (i) the Intellectual Property Security Agreements in
the appropriate indexes of the United States Patent and Trademark Office
relative to patents and trademarks (within three (3) months after the Closing
Date), and the United States Copyright Office relative to copyrights (within
thirty (30) days after the Closing Date), together with provision for payment of
all requisite fees, and (ii) financing statements in appropriate form for filing
in the offices specified on Schedule 4.19(c) (which financing statements have
been duly completed and executed and delivered to the Administrative Agent ) the
Intellectual Property Security Agreements shall constitute a fully perfected
Lien on, and security interest in, all right, title and interest of the Loan
Parties in the Intellectual Property Collateral and the proceeds and products
thereof, as security for the Obligations (as defined in the Guarantee and
Collateral Agreement), in each case prior and superior in right to any other
Person (except Permitted Liens).
4.20 Solvency. Each Loan Party is, and after giving effect to
the Acquisition and the incurrence of all Indebtedness and obligations being
incurred in connection with the Loan Documents and the Acquisition will be and
will continue to be, Solvent.
4.21 Senior Indebtedness. The Obligations (including, without
limitation, the guarantee obligations of each Guarantor under the Guarantee and
Collateral Agreement) constitute "Senior Indebtedness" under and as defined in
the Borrower Subordinated Note Purchase Agreement. The Liens of the
Administrative Agent for the benefit of the Secured
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Parties on the Collateral are not prohibited under the terms of the Subordinated
Debt Documentation.
4.22 Regulation H. Except as shown on the surveys for the
owned properties, no Mortgage for owned property encumbers improved real
property which is located in an area that has been identified by the Secretary
of Housing and Urban Development as an area having special flood hazards and in
which flood insurance has been made available under the National Flood Insurance
Act of 1968.
4.23 Insurance. Each of Holdings, the Borrower and its
Subsidiaries is insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as are prudent and customary
in the businesses in which it is engaged; and none of Holdings, the Borrower or
any of its Subsidiaries has any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers at a cost that could not
reasonably be expected to have a Material Adverse Effect.
4.24 Acquisition Documentation. On the Closing Date, the
Acquisition Documentation listed on Schedule 4.24 attached hereto constitute all
of the material agreements, instruments and undertakings to which Holdings, the
Borrower or any of its Subsidiaries is bound or by which such Person or any of
its property or assets is bound or affected relating to, or arising out of, the
Acquisition (including, without limitation, any agreements, instruments or
undertakings assumed pursuant to the Acquisition Agreement). None of such
material agreements, instruments or undertakings have been amended, supplemented
or otherwise modified in any material respect, and as of the Closing Date all
such material agreements, instruments and undertakings are in full force and
effect. No party to any Acquisition Documentation is currently in default
thereunder and no party thereto, or any other Person, has the right to terminate
any Acquisition Documentation.
4.25 Real Estate. (a) Schedule 4.25(a) sets forth a true,
complete and correct list of all Real Estate used or occupied by the Borrower or
any Subsidiary as of the date hereof, including a brief description thereof,
including, in the case of leases, the street address, landlord name, rent
amount, lease date and lease expiration date. The Borrower has delivered to the
Administrative Agent true, complete and correct copies of all such leases.
(b) Each parcel of Real Estate and the current use thereof
complies with all applicable Requirements of Law (including building and zoning
ordinances and codes) and with all Insurance Requirements and the Borrower is
not a non-conforming user of such Real Estate, except where noncompliance could
not reasonably be expected to have a Material Adverse Effect.
(c) Except as indicated on Schedule 4.25(c), no Taking has
been commenced or, to the best of Holdings' or the Borrower's knowledge, is
contemplated with respect to all or any material portion of the Real Estate or
for the relocation of roadways providing access to such Real Estate.
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(d) There are no pending or, to the best knowledge of Holdings
or the Borrower, proposed special or other assessments for public improvements
or otherwise affecting any material portion of the owned Real Estate, nor are
there any contemplated improvements to such owned Real Estate that may result in
such special or other assessments.
(e) None of Holdings, the Borrower or any of its Subsidiaries
has suffered, permitted or initiated the joint assessment of any owned Mortgaged
Property with any other real property constituting a separate tax lot. Each
owned Mortgaged Property is comprised of one or more parcels, each of which
constitutes a separate tax lot and none of which constitutes a portion of any
other tax lot.
(f) Each of Holdings, the Borrower and its Subsidiaries has
obtained all permits, licenses, variances and certificates required by
Requirements of Law to be obtained by such Person and necessary to the use and
operation of each parcel of Real Estate, except where the failure to have such
permit, license, certificate or variance would not prohibit the use of such
parcel of Real Estate as it is currently being used. The use being made of each
parcel of Real Estate is in conformity with the certificate of occupancy and/or
such other permits, licenses, variances and certificates for such Real Estate
and any other restrictions, covenants or conditions affecting such Real Estate,
except for any such nonconformity that could not reasonably be expected to have
a Material Adverse Effect.
(g) Except as set forth on Schedule 4.25(g), to the best
knowledge of the Borrower, each parcel of Real Estate is free from material
structural defects and all building systems contained therein are in good
working order and condition, ordinary wear and tear excepted, suitable for the
purposes for which they are currently being used.
(h) Except as specifically disclosed in the financial
statements described in Section 4.1 or on Schedule 4.25(h), none of the Real
Estate is subject to any lease, sublease, license or other agreement granting to
any Person any right to the use, occupancy, possession or enjoyment of the Real
Estate or any portion thereof. Except as disclosed on Schedule 4.25(h), there
are no outstanding options to purchase or rights of first refusal or
restrictions on transferability affecting any owned Real Estate.
(i) Other than exceptions that, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect,
(a) each parcel of Real Estate has adequate rights of access to public ways to
permit the Real Estate to be used for its intended purpose, and is served by
installed, operating and adequate water, electric, gas, telephone, sewer,
sanitary sewer and storm drain facilities; (b) all public utilities necessary to
the continued use and enjoyment of each parcel of Real Estate as used and
enjoyed on the Closing Date are located in the public right-of-way abutting the
premises, and all such utilities are connected so as to serve such Real Estate
without passing over other Property except for land of the utility company
providing such utility service or, in the case of leased Real Estate, contiguous
land owned by the lessor of such leased Real Estate; (c) all roads necessary for
the full utilization of each parcel of Real Estate for its current purpose have
been completed and dedicated to public use and accepted by all Governmental
Authorities or are the subject of access easements for the benefit of such Real
Estate; and (d) except for public streets and sidewalks, none of Holdings, the
Borrower or
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any of its Subsidiaries uses or occupies any real property other than such Real
Estate in connection with the use and operation of any Real Estate.
(j) Other than exceptions that, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect,
(a) no building or structure constituting Real Estate or any appurtenance
thereto or equipment thereon, or the use, operation or maintenance thereof,
violates any restrictive covenant or encroaches on any easement or on any
property owned by others, which violation or encroachment interferes with the
use or could materially adversely affect the value of such building, structure
or appurtenance or which encroachment is necessary for the operation of the
business at any Real Estate, and (b) all buildings, structures, appurtenances
and equipment necessary for the use of each parcel of Real Estate for the
purpose for which it is currently being used are located on the real property
encumbered by such Mortgage.
(k) Each parcel of Real Estate, including each leased parcel,
has adequate available parking to meet legal and operating requirements.
(l) No portion of the Real Estate has suffered any material
damage by fire or other casualty loss that has not heretofore been completely
repaired and restored to its original condition.
(m) The Mortgaged Property includes every parcel of Real
Estate owned by Holdings, the Borrower or any Subsidiary, as well as every
interest in Real Estate consisting of a lease with a rent in excess of $125,000
per annum that expressly permits the tenant to mortgage its leasehold estate.
4.26 Permits. (a) Other than exceptions to any of the
following that could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect, both before and after consummation
of the Acquisition: (i) each of Holdings, the Borrower and its Subsidiaries has
obtained and holds all Permits required for all Real Estate and any other
Property owned, leased, operated or otherwise occupied by or on behalf of, or
for the benefit of, such Person and for the operation of each of its businesses
as presently conducted and as proposed to be conducted, (ii) all such Permits
are in full force and effect and not subject to appeal, and each of Holdings,
the Borrower and its Subsidiaries is in full compliance with all requirements of
such Permits, (iii) no event has occurred which allows or results in, or after
notice or lapse of time would allow or result in, non-renewal, revocation or
termination by the issuer thereof or in any other impairment of the rights of
the holder of any such Permit, (iv) no such Permits contain any restrictions,
either individually or in the aggregate, that are materially burdensome to
Holdings, the Borrower or any of its Subsidiaries, or to the operation of any of
its businesses or any property owned, leased or otherwise operated by such
Person, (v) each of Holdings, the Borrower and its Subsidiaries reasonably
believes that each of its Permits will be timely renewed and complied with,
without material expense, and that any additional Permits that may be required
of such Person will be timely obtained and complied with, without material
expense, and (vi) neither Holdings nor the Borrower has any knowledge or reason
to believe that any Governmental Authority is considering limiting, suspending,
revoking or renewing on materially burdensome terms any such Permit.
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(b) Both before and after giving effect to the Acquisition, no
consent or authorization of, filing with, Permit from, or other act by or in
respect of, any Governmental Authority is required in connection with the
execution, delivery, performance, validity or enforceability of, or enforcement
of remedies (including, without limitation, foreclosure on the Collateral)
pursuant to, this Agreement and the other Loan Documents, other than consents
and approvals of, and Permits (other than Environmental Permits) issued by,
Governmental Authorities required in connection with any foreclosure on the
Collateral pursuant to the Security Documents.
4.27 Leases. (a) Both before and after giving effect to the
Acquisition, each of Holdings, the Borrower and its Subsidiaries has paid all
payments required to be made by it under leases of real property where any of
the Collateral is or may be located from time to time (other than any the amount
or validity of which are currently being contested in good faith by appropriate
proceedings and with respect to which reserves in conformity with GAAP have been
provided on the books of Holdings, the Borrower or such Subsidiary, as the case
may be); no landlord Lien has been filed, and, to the knowledge of Holdings and
the Borrower, no claim is being asserted, with respect to any such payments.
(b) Each of the leases listed on Schedule 4.25 is in full
force and effect and is legal, valid, binding and enforceable in accordance with
its terms. There is not under any such lease any existing breach, default or
event of default by the Borrower or its relevant Subsidiary or, to the best of
the Borrower's knowledge, by any other party to such lease.
(c) No party to any lease has given the Borrower or its
relevant Subsidiary notice of or made a claim with respect to any breach or
default that has not now been cured.
(d) With respect to those leases that were assigned or
subleased to the Borrower by a third party, required consents to such
assignments or subleases have been obtained; the Borrower has obtained any third
party lease consents required on account of the consummation of the transactions
contemplated by the Acquisition Agreement.
4.28 Immaterial Subsidiaries. No Immaterial Subsidiary owns
any material assets, conducts any material business or is the obligor under any
other material Indebtedness (other than guarantees of the Borrower Subordinated
Notes as permitted under Section 7.2(f)(ii)).
4.29 Supply Contracts. Neither Holdings, the Borrower nor any
of its Subsidiaries is party to any contract for the provision of goods or
services, the termination or expiration of which, without equivalent
replacement, is reasonably foreseeable, which, upon such termination or
expiration without equivalent replacement could reasonably be expected to have a
Material Adverse Effect.
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions to Initial Extension of Credit. The agreement
of each Lender to make the initial extension of credit requested to be made by
it is subject to the satisfaction,
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prior to or concurrently with the making of such extension of credit on the
Closing Date, of the following conditions precedent:
(a) Loan Documents. The Administrative Agent shall have
received (i) this Agreement, executed and delivered by a duly
authorized officer of Holdings and the Borrower, (ii) the Guarantee and
Collateral Agreement, executed and delivered by a duly authorized
officer of Holdings, the Borrower and each Subsidiary Guarantor, (iii)
the Intellectual Property Security Agreements, each executed and
delivered by a duly authorized officer of the Loan Party party thereto,
(iv) each Acknowledgment and Consent, executed and delivered by a duly
authorized officer of the Issuer (each as defined in the Guarantee and
Collateral Agreement) party thereto, (v) a Mortgage covering each of
the Mortgaged Properties, executed and delivered by a duly authorized
officer of each Loan Party party thereto, (vi) the Subordinated
Intercompany Note, executed and delivered by a duly authorized officer
of Holdings, the Borrower and each of its Subsidiaries, and (vii) if
requested by any Lender, for the account of such Lender, Notes
conforming to the requirements hereof and executed and delivered by a
duly authorized officer of the Borrower.
(b) Acquisition, etc. The following transactions (collectively
the "Transactions") shall have been consummated, in each case on terms
and conditions reasonably satisfactory to the Lenders:
(i) the Acquisition shall have been consummated for
an aggregate purchase price not exceeding $668,200,000 (including fees
and expenses not exceeding $25,000,000 in the aggregate) pursuant to,
and in strict compliance with the Acquisition Agreement and the other
Acquisition Documentation, which other Acquisition Documentation shall
be satisfactory to the Lenders and no material provision of any
Acquisition Documentation shall have been waived, amended, supplemented
or otherwise modified without the consent of the Administrative Agent;
(ii) Holdings shall have received at least
$130,000,000 from the issuance of its Capital Stock (other than
Disqualified Stock) to the Permitted Investors and the Other Equity
Investors (including at least $7,500,000 from the proceeds of the
issuance of its Capital Stock (other than Disqualified Stock) to
certain members of management of the Borrower), and all such proceeds
shall have been contributed to the Borrower;
(iii) Holdings shall have received at least
$15,000,000 in gross cash proceeds from the issuance of the Holdings
Senior Unsecured Notes;
(iv) the Borrower shall have received at least
$80,000,000 in gross cash proceeds from the issuance of the Borrower
Subordinated Notes;
(vi) the Borrower shall have received at least
$20,000,000 in gross cash proceeds from the Headquarters Sale-Leaseback
and shall have at least $110,000,000 in cash on its balance sheet; and
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(vii) the capital structure of Holdings, the Borrower
and each other Loan Party immediately after the Acquisition shall be as
described in Schedule 4.15.
(c) Pro Forma Balance Sheet; Financial Statements. The Lenders
shall have received (i) the Pro Forma Balance Sheet, (ii) audited
consolidated financial statements of the Borrower and its Subsidiaries
for the 1997, 1998 and 1999 fiscal years and (iii) unaudited interim
consolidated financial statements of the Borrower and its Subsidiaries
for each four week period ended subsequent to the date of the latest
applicable financial statements delivered pursuant to clause (ii) of
this paragraph as to which such financial statements are available, and
such financial statements shall not, in the reasonable judgment of the
Lenders, reflect any material adverse change in the consolidated
financial condition of the Borrower and its Subsidiaries, since
December 29, 1999.
(d) Approvals. All governmental and third party approvals
(including landlords' and other consents) necessary or, in the
discretion of the Administrative Agent, advisable in connection with
the Acquisition, the continuing operations of Holdings, the Borrower
and its Subsidiaries and the transactions contemplated hereby and by
the Acquisition Documentation shall have been obtained and be in full
force and effect, and all applicable waiting periods shall have expired
without any action being taken or threatened by any competent authority
which would restrain, prevent or otherwise impose adverse conditions on
the Acquisition or the financing contemplated hereby or by the
Subordinated Debt Documentation.
(e) Related Agreements. (i) The Administrative Agent shall
have received (in a form and substance reasonably satisfactory to the
Administrative Agent), true and correct copies, certified as to
authenticity by the Borrower, of the Acquisition Documentation and the
Subordinated Debt Documentation and such other documents or instruments
as may be reasonably requested by the Administrative Agent, and (ii)
the Administrative Agent shall have received (in form and substance
satisfactory to each of the Lenders) copies of all other documentation
evidencing or relating to the Transactions and any other debt
instrument, security agreement or other material contract to which any
Loan Party may be a party.
(f) Termination of Existing Credit Facilities. The
Administrative Agent shall have received evidence satisfactory to the
Administrative Agent that the Existing Credit Facilities shall be
simultaneously terminated, all amounts outstanding thereunder shall be
simultaneously paid in full and arrangements satisfactory to the
Administrative Agent shall have been made for the termination of Liens
and security interests granted in connection therewith including,
without limitation, receipt by the Administrative Agent of satisfactory
notices of relinquishment of security interest or the like with respect
to Intellectual Property.
(g) Fees. The Lenders, the Arrangers and the Agents shall have
received all fees required to be paid, and all expenses for which
invoices have been presented (including, without limitation, the
reasonable fees, disbursements and other charges of counsel to the
Agents), on or before the Closing Date. All such amounts will be paid
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with proceeds of Loans made on the Closing Date and will be reflected
in the funding instructions given by the Borrower to the Administrative
Agent on or before the Closing Date.
(h) Solvency. The Lenders shall have received a Solvency
Certificate executed by the Chief Financial Officer of Holdings and
each other Loan Party which shall document the solvency of Holdings and
its Subsidiaries after giving effect to the transactions contemplated
hereby.
(i) Lien Searches. The Administrative Agent shall have
received the results of a recent lien, tax lien, judgment and
litigation search in each of the jurisdictions or offices (including,
without limitation, in the United States Patent and Trademark Office
and the United States Copyright Office in which Uniform Commercial Code
financing statements or other filings or recordations should be made to
evidence or perfect (with the priority required under the Loan
Documents) security interests in all Property of the Loan Parties, and
such search shall reveal no Liens on any of the assets of the Borrower
or its Subsidiaries except for Permitted Liens or Liens set forth in
Schedule 4.19(a)-3.
(j) Environmental Matters. The Administrative Agent shall have
received a written environmental assessment regarding all owned real
property Collateral, prepared by Environ International Corporation,
dated July 2000, together with a letter from Environ International
Corporation permitting the Agents, the Lenders and their
representatives to rely on the environmental assessment as if addressed
to and prepared for each of them.
(k) Expenses. The Administrative Agent shall have received
satisfactory evidence that the fees and expenses to be incurred in
connection with the Acquisition and the financing thereof shall not
exceed $25,000,000 in the aggregate.
(l) Closing Certificate. The Administrative Agent shall have
received a certificate of each Loan Party, dated as of the Closing
Date, substantially in the form of Exhibit C, with appropriate
insertions and attachments.
(m) Senior Leverage Ratio Certificate. The Administrative
Agent shall have received a certificate of the Chief Financial Officer
of the Borrower and its Subsidiaries stating that the Consolidated
Senior Leverage Ratio of the Borrower and its Subsidiaries as of the
Closing Date, pro forma for the Acquisition does not exceed 2.5:1.00.
(n) Other Certifications. The Administrative Agent shall have
received the following:
(i) a copy of the Governing Documents of each Loan
Party, and each amendment thereto certified (as of a date reasonably
near the date of the initial extension of credit) as being a true and
correct copy thereof by the Secretary of State or other applicable
Governmental Authority of the jurisdiction in which each such Loan
Party is organized;
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(ii) a copy of a certificate of the Secretary of
State or other applicable Governmental Authority of the jurisdiction in
which each Loan Party is organized, dated reasonably near the date of
the initial extension of credit listing the charter of such Loan Party
and each amendment thereto on file in such office and certifying that
(A) such amendments are the only amendments to such Person's charter on
file in such office, (B) such Person has paid all franchise taxes to
the date of such certificate and (C) such Person is duly organized and
in good standing under the laws of such jurisdiction;
(iii) a telephonic confirmation from the Secretary of
State or other applicable Governmental Authority of each jurisdiction
in which each of Holdings, the Borrower and each of its Material
Subsidiaries is organized certifying that Holdings, the Borrower and
each such Material Subsidiary is duly organized and in good standing
under the laws of such jurisdiction on the date of the initial
extension of credit, together with a written confirmatory report in
respect thereof prepared by, or on behalf of, a filing service
acceptable to the Administrative Agent; and
(iv) a copy of a certificate of the Secretary of
State or other applicable Governmental Authority of each jurisdiction
in which Holdings, the Borrower and each of its Material Subsidiaries
is required to be qualified as a foreign corporation or entity, except
where the failure to be so qualified would not have a Material Adverse
Effect, dated reasonably near the date of the initial extension of
credit, stating that Holdings, the Borrower and each of its Material
Subsidiaries is duly qualified and in good standing as a foreign
corporation or entity in each such jurisdiction and has filed all
annual reports required to be filed to the date of such certificate;
and telephonic confirmation from the Secretary of State or other
applicable Governmental Authority of each state listed on Schedule
5.1(n) on the date of the initial extension of credit as to the due
qualification and continued good standing of each such Person listed on
Schedule 5.1(n) as a foreign corporation or entity in each such
jurisdiction on or about such date, together with a written
confirmatory report in respect thereof prepared by, or on behalf of, a
filing service acceptable to the Administrative Agent.
(o) Legal Opinions. The Administrative Agent shall have
received the following executed legal opinions:
(ii) the legal opinion of Paul, Weiss, Rifkind,
Wharton & Garrison, counsel to the Borrower and its Subsidiaries,
substantially in the form of Exhibit F-1;
(iii) the legal opinion of Maslon, Edelman, Borman &
Brand, Minnesota counsel to the Borrower and its Subsidiaries,
substantially in the form of Exhibit F-2;
(iv) each legal opinion, if any, delivered in
connection with the Acquisition Agreement, accompanied by a reliance
letter in favor of the Lenders; and
(iv) the legal opinion of local counsel in each of
the states of Arizona, California, Connecticut, Illinois, Kentucky,
Ohio, Oklahoma and Wisconsin and of such other special and local
counsel as may be required by the Administrative Agent.
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Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent
may reasonably require.
(p) Pledged Stock; Stock Power; Pledged Notes. The
Administrative Agent shall have received (i) the certificates
representing the shares of Capital Stock pledged pursuant to the
Guarantee and Collateral Agreement, together with an undated stock
power for each such certificate executed in blank by a duly authorized
officer of the pledgor thereof and (ii) each promissory note (including
the Subordinated Intercompany Note) pledged to the Administrative Agent
pursuant to the Guarantee and Collateral Agreement endorsed (without
recourse) in blank (or accompanied by an executed transfer form in
blank satisfactory to the Administrative Agent) by the pledgor thereof.
(q) Filings, Registrations and Recordings. Each document
(including, without limitation, any Uniform Commercial Code financing
statement) required by the Security Documents or under law or
reasonably requested by the Administrative Agent to be filed,
registered or recorded in order to create in favor of the
Administrative Agent, for the benefit of the Secured Parties, a
perfected Lien on, and security interest in, the Collateral described
therein, prior and superior in right to any other Person (other than
Permitted Liens), shall have been delivered to the Administrative Agent
in form to be duly filed, registered or recorded, as applicable.
(r) Surveys. The Administrative Agent shall have received, and
the title insurance company issuing the policy referred to in Section
5.1(s) below (the "Title Insurance Company") shall have received, maps
or plans of an as-built survey of the sites of the owned Mortgaged
Properties certified to the Administrative Agent and the Title
Insurance Company in a manner satisfactory to them, dated not more than
60 days prior to the Closing Date by an independent professional
licensed land surveyor satisfactory to the Administrative Agent and the
Title Insurance Company, which maps or plats and the surveys on which
they are based shall be made in accordance with the Minimum Standard
Detail Requirements for Land Title Surveys jointly established and
adopted by the American Land Title Association and the American
Congress on Surveying and Mapping in 1997 or 1999 and meeting the
accuracy requirements as defined therein, and, without limiting the
generality of the foregoing, there shall be surveyed and shown on such
maps, plats or surveys the following: Each Survey shall (a) be a
current "as-built" survey showing the location of any adjoining streets
(including their widths and any pavement or other improvements),
easements (including the recorded information with respect to all
recorded instruments), the mean high water base line or other legal
boundary lines of any adjoining bodies of water, fences, zoning or
restriction setback lines, rights-of-way, utility lines to the points
of connection and any encroachments; (b) locate all means of ingress
and egress, certifying the amount of acreage and square footage,
indicate the address of the property, contain the legal description of
the property, and also contain a location sketch of the property; (c)
show the location of all improvements as constructed on the property,
all of which shall be within the boundary lines of the property and
conform to all applicable zoning ordinances, set-back lines and
restrictions; (d) indicate the location of any improvements on the
property with the dimensions in relations to the lot and building
lines; (e) show measured distances from
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the improvements to be set back and specified distances from street or
property lines in the event that deed restrictions, recorded plats or
zoning ordinances require same; (f) designate all courses and distances
referred to in the legal description, and indicate the names of all
adjoining owners on all sides of the property, to the extent available;
and (g) indicate the flood zone designation, if any, in which the
property is located. The legal description of the applicable property
shall be shown on the face of each survey or affixed thereto, and the
same shall conform to the legal description contained in the title
policy described below.
(s) Title Insurance; Flood Insurance.
(i) The Administrative Agent shall have received in
respect of each Mortgaged Property a mortgagee's title insurance policy
(or policies) or marked up unconditional binder for such insurance.
Each such policy shall (A) be in an amount satisfactory to the
Administrative Agent; (B) be issued at ordinary rates; (C) insure that
the Mortgage insured thereby creates a valid first Lien on, and
security interest in, such Mortgaged Property free and clear of all
defects and encumbrances, except as disclosed therein; (D) name the
Administrative Agent for the benefit of the Secured Parties as the
insured thereunder; (E) be in the form of ALTA Loan Policy - 1970 Form
B (Amended 10/17/70 and 10/17/84) (or equivalent policies), if
available; (F) contain such endorsements and affirmative coverage as
the Administrative Agent may reasonably request in form and substance
acceptable to the Administrative Agent, including, without limitation
(to the extent applicable with respect to such Mortgaged Property and
available in the jurisdiction in which such Mortgaged Property is
located), the following: variable rate endorsement; survey endorsement;
comprehensive endorsement; zoning (ALTA 3.1 with parking added)
endorsement; first loss, last dollar and tie-in endorsement; access
coverage; separate tax parcel coverage; usury; doing business;
subdivision; environmental protection lien; CLTA 119.2 and CLTA 119.3
(for leased Real Estate, only); contiguity coverage; and such other
endorsements as the Administrative Agent shall reasonably require in
order to provide insurance against specific risks identified by the
Administrative Agent in connection with such Mortgaged Property, and
(G) be issued by title companies satisfactory to the Administrative
Agent (including any such title companies acting as co-insurers or
reinsurers, at the option of the Administrative Agent). The
Administrative Agent shall have received evidence satisfactory to it
that all premiums in respect of each such policy, all charges for
mortgage recording tax, and all related expenses, if any, have been
paid.
(ii) If requested by the Administrative Agent, the
Administrative Agent shall have received (A) a policy of flood
insurance that (1) covers any parcel of improved real property that is
encumbered by any Mortgage and is located in a flood zone (2) is
written in an amount not less than the outstanding principal amount of
the indebtedness secured by such Mortgage that is reasonably allocable
to such real property or the maximum limit of coverage made available
with respect to the particular type of property under the National
Flood Insurance Act of 1968, whichever is less, and (3) has a term
ending not later than the maturity of the Indebtedness secured by such
Mortgage and
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(B) confirmation that the Borrower has received the notice required
pursuant to Section 208(e)(3) of Regulation H of the Board.
(iii) The Administrative Agent shall have received a
copy of all recorded documents referred to, or listed as exceptions to
title in, the title policy or policies referred to in clause (ii) above
and a copy of all other material documents affecting the Mortgaged
Properties.
(t) Insurance Certificates. The Administrative Agent shall
have received insurance certificates or policies (a) satisfying the
requirements of Section 4.23 and of Section 5.3 of the Guarantee and
Collateral Agreement and (b) as requested by the Administrative Agent
with respect to certain contingent liabilities affecting Holdings, the
Borrower or any other Loan Party.
(u) Contingent Liabilities. The Arrangers shall be satisfied
as of the Closing Date with the status (including any contingency plans
with respect thereto) of all contingent liabilities affecting Holdings,
the Borrower and the other Loan Parties.
(v) Notice of Borrowing. The Administrative Agent shall have
received, at least one Business Day prior to the Closing Date, a duly
completed and executed Notice of Borrowing with respect to any Loans to
be made to the Borrower on the Closing Date.
(w) Existing Notes. Any Existing Notes not converted into cash
in connection with the Acquisition as described in the Proxy shall have
been called for redemption by the Borrower and the proceeds necessary
therefor shall have been placed in a segregated account with the Paying
Agent pursuant to an agreement reasonably satisfactory to the Agents.
(x) Miscellaneous. The Administrative Agent shall have
received such other documents, agreements, certificates and information
as it shall reasonably request.
5.2 Conditions to Each Extension of Credit. The agreement of
each Lender to make any extension of credit requested to be made by it on any
date (including, without limitation, its initial extension of credit) is subject
to the satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by any Loan Party in or pursuant to
the Loan Documents shall be true and correct in all material respects
on and as of such date as if made on and as of such date, except for
representations and warranties expressly stated to relate to a specific
earlier date, in which case such representations and warranties shall
be true and correct in all material respects as of such earlier date.
(b) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
extensions of credit requested to be made on such date.
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Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by Holdings and the
Borrower as of the date of such extension of credit that the conditions
contained in this Section 5.2 have been satisfied.
SECTION 6. AFFIRMATIVE COVENANTS
Holdings and the Borrower hereby jointly and severally agree
that, so long as the Commitments remain in effect, any Letter of Credit remains
outstanding or any Loan or other amount is owing to any Lender, the Arrangers or
any Agent hereunder, each of Holdings and the Borrower shall and shall cause
each of its Subsidiaries to:
6.1 Financial Statements. Furnish to each Agent and each
Lender:
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of the Borrower, a copy of the
audited consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such year and the related audited
consolidated statements of income and of cash flows for such year,
setting forth in each case in comparative form the figures for the
previous year, reported on without a "going concern" or like
qualification or exception, or qualification arising out of the scope
of the audit, by Deloitte and Touche LLP or other independent certified
public accountants of nationally recognized standing;
(b) as soon as available, but in any event not later than 45
days after the end of each of the first three quarterly periods of each
fiscal year of the Borrower, the unaudited consolidated balance sheet
of the Borrower and its consolidated Subsidiaries as at the end of such
quarter and the related unaudited consolidated statements of income and
of cash flows for such quarter and the portion of the fiscal year
through the end of such quarter, setting forth in each case in
comparative form the figures for the previous year, certified by a
Responsible Officer as being fairly stated in all material respects
(subject to normal year-end audit adjustments); and
(c) as soon as available, but in any event not later than 45
days after the end of each month occurring during each fiscal year of
the Borrower (other than the third, sixth, ninth and twelfth such
month), the unaudited consolidated balance sheets of the Borrower and
its Subsidiaries as at the end of such month and the related unaudited
consolidated statements of income and of cash flows for such month and
the portion of the fiscal year through the end of such month, setting
forth in each case in comparative form the figures for the previous
year, certified by a Responsible Officer as being fairly stated in all
material respects (subject to normal year-end audit adjustments);
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein and except that monthly and quarterly financial statements
need not have notes unless such notes are prepared for the board of directors of
the Borrower or Holdings).
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6.2 Certificates; Other Information. Furnish to each Agent and
each Lender, or, in the case of clause (i), to the relevant Lender:
(a) concurrently with the delivery of the financial statements
referred to in Section 6.1(a), a certificate of the independent
certified public accountants reporting on such financial statements
stating that in making the examination necessary therefor no knowledge
was obtained of any Default or Event of Default, except as specified in
such certificate;
(b) concurrently with the delivery of any financial statements
pursuant to Section 6.1, (i) a certificate of a Responsible Officer
stating that, to the best of each such Responsible Officer's knowledge,
each Loan Party during such period has observed or performed all of its
covenants and other agreements, and satisfied every condition,
contained in this Agreement and the other Loan Documents to which it is
a party to be observed, performed or satisfied by it, and that such
Responsible Officer has obtained no knowledge of any Default or Event
of Default except as specified in such certificate and (ii) in the case
of quarterly or annual financial statements, (x) a Compliance
Certificate containing all information and calculations necessary for
determining compliance by Holdings, the Borrower and its Subsidiaries
with the provisions of this Agreement referred to therein as of the
last day of the fiscal quarter or fiscal year of the Borrower, as the
case may be, and (y) to the extent not previously disclosed to the
Administrative Agent in writing, a listing of any county, state,
territory, province, region or any other jurisdiction, or any political
subdivision thereof, whether of the United States or otherwise, where
any Loan Party keeps inventory or equipment (other than mobile goods)
and of any Intellectual Property acquired by any Loan Party since the
date of the most recent list delivered pursuant to this clause (y) (or,
in the case of the first such list so delivered, since the Closing
Date);
(c) as soon as available, and in any event no later than 45
days after the end of each fiscal year of the Borrower, a detailed
consolidated budget for the following fiscal year (including a
projected consolidated balance sheet of Holdings, the Borrower and its
Subsidiaries as of the end of the following fiscal year, and the
related consolidated statements of projected cash flow, projected
changes in financial position and projected income), and, as soon as
available, significant revisions, if any, of such budget and
projections with respect to such fiscal year (collectively, the
"Projections"), which Projections shall in each case be accompanied by
a certificate of a Responsible Officer stating that such Projections
are based on reasonable estimates, information and assumptions and that
such Responsible Officer has no reason to believe that such Projections
are incorrect or misleading in any material respect;
(d) within 45 days after the end of each fiscal quarter of the
Borrower, a narrative discussion and analysis of the financial
condition and results of operations of Holdings, the Borrower and its
Subsidiaries for such fiscal quarter and for the period from the
beginning of the then current fiscal year to the end of such fiscal
quarter, as compared to the portion of the Projections covering such
periods and to the comparable periods of the previous year;
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(e) no later than 10 Business Days prior to the effectiveness
thereof, copies of substantially final drafts of any proposed
amendment, supplement, waiver or other modification with respect to the
Acquisition Documentation, the Borrower Subordinated Debt
Documentation, the Holdings Senior Unsecured Debt Documentation, the
Governing Documents of Holdings, the Borrower or any of its
Subsidiaries;
(f) within five days after the same are sent, copies of all
financial statements, reports and notices that Holdings, the Borrower
or any of its Subsidiaries sends to the holders of any class of its
debt securities or public equity securities and, within five days after
the same are filed, copies of all financial statements and reports that
Holdings, the Borrower or any of its Subsidiaries may make to, or file
with, the SEC;
(g) as soon as possible and in any event within five days of
obtaining knowledge thereof: (i) notice of any development, event, or
condition that, individually or in the aggregate with other
developments, events or conditions, could reasonably be expected to
have a Material Adverse Effect; and (ii) any notice that any
Governmental Authority may deny issuance of any Environmental Permit or
any other material Permit held or applied for by Holdings, the Borrower
or any of its Subsidiaries, condition approval or renewal of, or any
application for, any such permit on terms and conditions that are
materially burdensome to Holdings, the Borrower or any of its
Subsidiaries, or to the operation of any of its businesses (both before
and after giving effect to the Acquisition) or any property owned,
leased, operated or otherwise occupied by such Person;
(h) as soon as available, and in any event within 90 days
after the end of each fiscal year of the Borrower, a certificate
containing all information and calculations necessary for determining
the Consolidated Leverage Ratio as of the end of such fiscal year;
(i) on the date of the occurrence thereof, notice that (i) any
or all of the obligations under the Borrower Subordinated Note Purchase
Agreement have been accelerated or (ii) trustee or the required holders
of the Borrower Subordinated Note Purchase Agreement has given notice
that any or all such obligations are to be accelerated;
(j) on the date of the occurrence thereof, notice that (i) any
or all of the obligations under the Holdings Senior Unsecured Note
Purchase Agreement have been accelerated or (ii) trustee or the
required holders of the Holdings Senior Unsecured Note Purchase
Agreement has given notice that any or all such obligations are to be
accelerated;
(k) to the extent not included in clauses (a) through (g)
above, no later than the date the same are required to be delivered
thereunder, copies of all agreements, documents or other instruments
(including, without limitation, (i) audited and unaudited, pro forma
and other financial statements, reports, forecasts, and projections,
together with any required certifications thereon by independent public
auditors or officers of Holdings, the Borrower or any of its
Subsidiaries or otherwise, (ii) press releases, (iii) statements or
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reports furnished to any other holder of the securities of Holdings,
the Borrower or any of its Subsidiaries, and (iv) regular, periodic and
special securities reports) that Holdings, the Borrower or any of its
Subsidiaries is required to provide pursuant to the terms of the
Subordinated Debt Documentation; and
(l) promptly, such additional financial and other information
as any Lender may from time to time reasonably request.
6.3 Payment of Obligations. Except as set forth in Sections
7.6 and 7.9, pay, discharge or otherwise satisfy at or before maturity or before
they become delinquent, as the case may be, all its material obligations of
whatever nature, except where the amount or validity thereof is currently being
contested in good faith by appropriate proceedings and reserves in conformity
with GAAP with respect thereto have been provided on the books of Holdings, the
Borrower or its Subsidiaries, as the case may be.
6.5 Conduct of Business and Maintenance of Existence, etc. (a)
(i) Preserve, renew and keep in full force and effect its corporate existence
and (ii) take all reasonable action to maintain all rights, privileges,
franchises, Permits and licenses necessary or desirable in the normal conduct of
its business, except, in each case, as otherwise permitted by Section 7.4 and
except, in the case of clause (ii) above, to the extent that failure to do so
could not reasonably be expected to have a Material Adverse Effect; and (b) to
the extent not in conflict with this Agreement or the other Loan Documents,
comply with all Contractual Obligations and Requirements of Law except to the
extent that failure to comply therewith could not, in the aggregate, reasonably
be expected to have a Material Adverse Effect.
6.5 Maintenance of Property; Insurance. (a) Keep all Property
and systems useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted.
(b) Maintain all material rights of way, easements, grants,
privileges, licenses, certificates, and permits necessary or advisable for the
use of any Real Estate and will not, without the prior written consent of the
Administrative Agent, consent to any public or private restriction as to the use
of any Real Estate.
(c) Maintain with financially sound and reputable insurance
companies insurance on all its Property (including, without limitation, all
inventory, equipment and vehicles) in at least such amounts and against at least
such risks as are usually insured against in the same general area by companies
engaged in the same or a similar business; and furnish to the Administrative
Agent with copies for each Secured Party, upon written request, full information
as to the insurance carried; provided that in any event each of Holdings, the
Borrower and its Subsidiaries will maintain (i) property and casualty insurance
on all Property on an all risks basis (including the perils of flood and quake,
loss by fire, explosion and theft and such other risks and hazards as are
covered by a standard extended coverage insurance policy), covering the repair
or replacement cost of all such Property and consequential loss coverage for
business interruption and extra expense (which shall include construction
expenses and such other business interruption expenses as are otherwise
generally available to similar businesses), (ii) public liability insurance, and
(iii) building law and ordinance coverage in such amount as to address to
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the reasonable satisfaction of the Administrative Agent any increased cost of
construction, debris removal and/or demolition expenses incurred as a result of
the application of any building law and/or ordinance. All such insurance with
respect to each of Holdings, the Borrower and its Subsidiaries shall be provided
by insurers or reinsurers which (x) in the case of United States insurers and
reinsurers, have an A.M. Best policyholders rating of not less than A- with
respect to primary insurance and B+ with respect to excess insurance and (y) in
the case of non-United States insurers or reinsurers, the providers of at least
80% of such insurance have either an ISI policyholders rating of not less than
A, an A.M. Best policyholders rating of not less than A- or a surplus of not
less than $500,000,000 with respect to primary insurance, and an ISI
policyholders rating of not less than BBB with respect to excess insurance, or,
if the relevant insurance is not available from such insurers, such other
insurers as the Administrative Agent may approve in writing. All insurance shall
(i) provide that no cancellation, material reduction in amount or material
change in coverage thereof shall be effective until at least 30 days after
receipt by the Administrative Agent of written notice thereof, (ii) if
reasonably requested by the Administrative Agent, include a breach of warranty
clause, (iii) contain a "Replacement Cost Endorsement" with a waiver of
depreciation and a waiver of subrogation against any Secured Party, (iv) contain
a standard noncontributory mortgagee clause naming the Administrative Agent
(and/or such other party as may be designated by the Administrative Agent) as
the party to which all payments made by such insurance company shall be paid,
(v) if requested by the Administrative Agent, contain endorsements providing
that none of Holdings, the Borrower or any of its Subsidiaries, any Secured
Party or any other Person shall be a co-insurer under such insurance policies,
and (vi) be reasonably satisfactory in all other respects to the Administrative
Agent. Each Secured Party shall be named as an additional insured on all
liability insurance policies of each of Holdings, the Borrower and its
Subsidiaries and the Administrative Agent shall be named as loss payee on all
property and casualty insurance policies of each such Person.
(d) Deliver to the Administrative Agent on behalf of the
Secured Parties, (i) on the Closing Date, a certificate dated such date showing
the amount and types of insurance coverage as of such date, (ii) upon request of
any Secured Party from time to time, full information as to the insurance
carried, (iii) promptly following receipt of notice from any insurer, a copy of
any notice of cancellation or material change in coverage from that existing on
the Closing Date, (iv) forthwith, notice of any cancellation or nonrenewal of
coverage by any of Holdings, the Borrower or any of its Subsidiaries, and (v)
promptly after such information is available to any of Holdings, the Borrower or
any of its Subsidiaries, full information as to any claim for an amount in
excess of $2,500,000 with respect to any property and casualty insurance policy
maintained by any of Holdings, the Borrower or its Subsidiaries.
(e) Preserve and protect the Lien status of each respective
Mortgage and, if any Lien (other than unrecorded Liens permitted under Section
7.3 that arise by operation of law and other Liens permitted under Section
7.3(e)) is asserted against a Mortgaged Property, promptly and at its expense,
give the Administrative Agent a detailed written notice of such Lien and pay the
underlying claim in full or take such other action so as to cause it to be
released or bonded over in a manner satisfactory to the Administrative Agent.
6.6 Inspection of Property; Books and Records; Discussions.
(a) Keep proper books of records and account in which full, true and correct
entries in conformity with GAAP
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and all Requirements of Law shall be made of all dealings and transactions in
relation to its business and activities and (b) permit representatives of the
Administrative Agent and the Lenders to visit and inspect any of its properties
and examine and, at the Borrower's expense, make abstracts from any of its books
and records at any reasonable time and as often as may reasonably be desired by
the Administrative Agent or such Lenders (except, in the case of the Lenders, no
more than 4 times per year while no Default or Event of Default is continuing),
and to discuss the business, operations, properties and financial and other
condition of Holdings, the Borrower and its Subsidiaries with officers and
employees of Holdings, the Borrower and its Subsidiaries and with their
respective independent certified public accountants (in the presence of an
officer of the Borrower or the Sponsor if so desired by the Borrower or the
Sponsor).
6.7 Notices. Promptly give notice to the Administrative Agent
and each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of Holdings, the Borrower or any of its Subsidiaries or (ii)
litigation, investigation or proceeding which may exist at any time
between Holdings, the Borrower or any of its Subsidiaries and any
Governmental Authority, that in either case, if not cured or if
adversely determined, as the case may be, could reasonably be expected
to have a Material Adverse Effect;
(c) any litigation or proceeding affecting Holdings, the
Borrower or any of its Subsidiaries in which the amount involved is
$1,000,000 or more and not covered by insurance or in which injunctive
or similar relief is sought;
(d) the following events, as soon as possible and in any event
within 30 days after Holdings, the Borrower or any of its Subsidiaries
knows or has reason to know thereof: (i) the occurrence of any
Reportable Event with respect to any Plan, a failure to make any
required contribution to a Plan, the creation of any Lien in favor of
the PBGC or a Plan or any withdrawal from, or the termination,
Reorganization or Insolvency of, any Multiemployer Plan or (ii) the
institution of proceedings or the taking of any other action by the
PBGC or the Borrower or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the
termination, Reorganization or Insolvency of, any Plan;
(e) any development or event that has had or could reasonably
be expected to have a Material Adverse Effect; and
(f) any notice of default given to the Borrower or any of its
Subsidiaries from a landlord in connection with any leased property
where inventory of the Borrower or its Subsidiaries is located.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action Holdings, the Borrower or the relevant Subsidiary
proposes to take with respect thereto.
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6.8 Environmental Laws (a) Comply in all material respects
with, and ensure compliance in all material respects by all tenants and
subtenants, if any, with, all applicable Environmental Laws and Environmental
Permits, and obtain, maintain and comply in all material respects, and ensure
that all tenants and subtenants obtain, maintain and comply in all material
respects, with any and all licenses, approvals, notifications, registrations or
permits required by applicable Environmental Laws.
(b) Conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws.
(c) At least 30 days prior to the purchase of any real
property that will be mortgaged to the Administrative Agent as provided
hereunder, provide the Lenders with copies of a written environmental assessment
conforming to the standards of the ASTM "Standard Practice for Environmental
Site Assessments: Phase I Environmental Site Assessment Process" (ASTM 1527)
regarding the property to be acquired, and such other documentation, in form and
substance reasonably satisfactory to the Administrative Agent, as is necessary
to establish that the acquisition of such real property will not cause a
Material Adverse Effect. Subject to the approval of the Administrative Agent, an
environmental assessment conforming to the standards of the ASTM "Standard
Practice for Environmental Site Assessments: Transaction Screen Process" (ASTM
1528) may be substituted for the environmental assessment required by the
preceding sentence.
(d) At least 30 days prior to the leasing of any real property
that will be mortgaged to the Administrative Agent as provided hereunder,
provide the Lenders with documentation, in form and substance reasonably
satisfactory to the Administrative Agent, as is necessary to establish that the
leasing of such real property will not cause a Material Adverse Effect.
6.9 Interest Rate Protection. In the case of the Borrower,
within 60 days after the Closing Date, enter into Hedge Agreements to the extent
necessary to provide that at least $125,000,000 of the Term Loans is subject to
either a fixed interest rate or interest rate protection for a period of not
less than two years, which Hedge Agreements shall have terms and conditions
reasonably satisfactory to the Administrative Agent.
6.10 Additional Collateral, etc.(a) With respect to any
Property acquired after the Closing Date or, in the case of inventory or
equipment, any Property moved after the Closing Date by Holdings, the Borrower
or any of its Subsidiaries (other than (x) any Property described in paragraphs
(b), (d) or (e) of this Section, and (y) Property acquired by an Excluded
Foreign Subsidiary) as to which the Administrative Agent, for the benefit of the
Secured Parties, does not have a perfected security interest, promptly (and, in
any event, within 30 days following the date of such acquisition) (i) execute
and deliver to the Administrative Agent such amendments to the Guarantee and
Collateral Agreement or such other documents as the Administrative Agent deems
necessary or advisable to grant to the Administrative Agent, for the benefit of
the Secured Parties, a security interest in such Property; provided that, with
respect to Property subject to a Lien expressly permitted by Section 7.3(g) or
(k), the grant of a security interest shall only be required if such grant is
permitted by the terms of the Indebtedness pursuant to which such permitted Lien
was granted and (ii) take all actions necessary or advisable to grant to the
Administrative Agent, for the benefit of the Secured Parties, a perfected first
priority security interest in such Property (or with respect to Property subject
to a
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Lien expressly permitted by Section 7.3 (g) or (k), if permitted, a perfected
second priority security interest in such Property), including, without
limitation, the filing of Uniform Commercial Code financing statements in such
jurisdictions as may be required by the Guarantee and Collateral Agreement or by
law or as may be requested by the Administrative Agent. Notwithstanding the
foregoing, after the Closing Date the Borrower shall not be required to pledge
to the Administrative Agent any interest in any newly leased Real Estate with an
annual rent (base and contingent) of less than $125,000.
(b) With respect to any fee interest in any Real Estate having
a value (together with improvements thereof) of at least $1,000,000 (as
reasonably determined by the Administrative Agent) acquired after the Closing
Date by Holdings, the Borrower or any of its Subsidiaries (other than any such
Real Estate owned by an Excluded Foreign Subsidiary, promptly (and, in any
event, within 60 days following the date of such acquisition) (i) execute and
deliver a first priority Mortgage in favor of the Administrative Agent, for the
benefit of the Secured Parties, covering such Real Estate (or with respect to
Real Estate subject to a Lien expressly permitted by Section 7.3 (g) or (k), if
permitted, a perfected second priority security interest in such Real Estate),
(ii) if requested by the Administrative Agent, provide the Secured Parties with
(x) extended coverage title insurance covering such Real Estate in an amount at
least equal to the purchase price of such Real Estate (or such other amount as
shall be reasonably specified by the Administrative Agent) as well as a current
ALTA survey thereof, together with a surveyor's certificate and (y) any consents
or estoppels reasonably deemed necessary or advisable by the Administrative
Agent in connection with such Mortgage, each of the foregoing in form and
substance reasonably satisfactory to the Administrative Agent and (iii) if
requested by the Administrative Agent, deliver to the Administrative Agent legal
opinions relating to the matters described above, which opinions shall be in
form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.
(c) Notwithstanding the provisions of any leasehold Mortgage
to the contrary, with respect to any leasehold interest that is a Mortgaged
Property subject to a Mortgage in favor of Administrative Agent, the Borrower
may elect not to renew such lease, but to allow it to expire under its terms if
the Borrower shall have, at the time of such expiration:
(i) executed and delivered a first priority
substitute Mortgage in favor of the Administrative Agent, for the
benefit of the Secured Parties, encumbering other leasehold Real Estate
not now a Mortgaged Property, which leasehold(s) shall have an
aggregate minimum annual rent no less than the rent of the expired
lease at the time of its expiration and which leasehold(s) shall be of
a duration (including renewal terms) not less than the unexercised
renewal term(s) of such expired lease and shall grant to the
Administrative Agent lender protections not materially less than those
contained in the expired lease, as determined by the Administrative
Agent in its reasonable discretion;
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(ii) if requested by the Administrative Agent,
provided the Secured Parties with (x) extended coverage title insurance
covering such Real Estate in an amount at least equal to 125% of the
cumulative rent of such Real Estate through the anticipated date of
payment in full of the Obligations and the termination or expiration of
all Commitments and (y) any consents or estoppels reasonably deemed
necessary or advisable by the Administrative Agent in connection with
such Mortgage, each of the foregoing in form and substance reasonably
satisfactory to the Administrative Agent; and
(iii) if requested by the Administrative Agent,
delivered to the Administrative Agent legal opinions relating to the
matters described above, which opinions shall be in form and substance,
and from counsel, reasonably satisfactory to the Administrative Agent.
(d) With respect to any new Subsidiary (other than an Excluded
Foreign Subsidiary) created or acquired after the Closing Date (which, for the
purposes of this paragraph, shall include any existing Subsidiary that ceases to
be an Excluded Foreign Subsidiary) by Holdings, the Borrower or any of its
Subsidiaries, promptly (and, in any event, within 30 days following such
creation or the date of such ACQUISITION) (i) execute and deliver to the
Administrative Agent such amendments to the Guarantee and Collateral Agreement
as the Administrative Agent deems necessary or advisable to grant to the
Administrative Agent, for the benefit of the Secured Parties, a perfected first
priority security interest in the Capital Stock of such new Subsidiary that is
owned by Holdings, the Borrower or any of its Subsidiaries, (ii) deliver to the
Administrative Agent the certificates representing such Capital Stock, together
with undated stock powers, in blank, executed and delivered by a duly authorized
officer of Holdings, the Borrower or such Subsidiary, as the case may be, (iii)
cause such new Subsidiary (A) to become a party to the Guarantee and Collateral
Agreement, the Intellectual Property Security Agreements, and the Subordinated
Intercompany Note and (B) to take such actions necessary or advisable to grant
to the Administrative Agent for the benefit of the Secured Parties a perfected
first priority security interest in the Collateral described in the Guarantee
and Collateral Agreement and the Intellectual Property Security Agreements with
respect to such new Subsidiary, including, without limitation, the recording of
instruments in the United States Patent and Trademark Office and the United
States Copyright Office, the execution and delivery by all necessary Persons of
Control Agreements and the filing of Uniform Commercial Code financing
statements in such jurisdictions as may be required by the Guarantee and
Collateral Agreement, the Intellectual Property Security Agreements or by law or
as may be requested by the Administrative Agent, and (iv) if reasonably
requested by the Administrative Agent, deliver to the Administrative Agent legal
opinions relating to the matters described above, which opinions shall be in
form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.
(e) With respect to any new Excluded Foreign Subsidiary
created or acquired after the Closing Date by Holdings, the Borrower or any of
its Domestic Subsidiaries, promptly (and, in any event, within 30 days following
such creation or the date of such acquisition) (i) execute and deliver to the
Administrative Agent such amendments to the Guarantee and Collateral Agreement
as the Administrative Agent deems necessary or advisable in order to grant to
the Administrative Agent, for the benefit of the Secured Parties, a perfected
first priority
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security interest in the Capital Stock of such new Subsidiary that is owned by
Holdings, the Borrower or any of its Domestic Subsidiaries (provided that in no
event shall more than 65% of the total outstanding Capital Stock of any such new
Subsidiary be required to be so pledged), (ii) deliver to the Administrative
Agent the certificates representing such Capital Stock, together with undated
stock powers, in blank, executed and delivered by a duly authorized officer of
Holdings, the Borrower or such Domestic Subsidiary, as the case may be, and take
such other action as may be necessary or, in the opinion of the Administrative
Agent, desirable to perfect the security interest of the Administrative Agent
thereon, (iii) cause such new Subsidiary to become a party to the Subordinated
Intercompany Note, and (iv) if reasonably requested by the Administrative Agent,
deliver to the Administrative Agent legal opinions relating to the matters
described above, which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to the Administrative Agent.
(f) Notwithstanding anything to the contrary in this Section
6.10, paragraphs (a), (b), (c), (d) and (e) of this Section 6.10 shall not apply
to any Property, new Subsidiary or new Excluded Foreign Subsidiary created or
acquired after the Closing Date, as applicable, as to which the Administrative
Agent has determined in its sole discretion that the collateral value thereof is
insufficient to justify the difficulty, time and/or expense of obtaining a
perfected security interest therein.
6.11 Use of Proceeds. Use the proceeds of the Loans only for
the purposes specified in Section 4.16.
6.12 ERISA Documents. The Borrower will cause to be delivered
to the Administrative Agent, promptly upon the Administrative Agent's request,
any or all of the following: (i) a copy of each Plan (or, where any such Plan is
not in writing, a complete description thereof) and, if applicable, related
trust agreements or other funding instruments and all amendments thereto, and
all written interpretations thereof and written descriptions thereof that have
been distributed to employees or former employees of the Borrower or any of its
Subsidiaries; (ii) the most recent determination letter issued by the Internal
Revenue Service with respect to each Plan; (iii) for the three most recent plan
years preceding the Administrative Agent's request, Annual Reports on Form 5500
Series required to be filed with any governmental agency for each Plan; (iv) a
listing of all Multiemployer Plans, with the aggregate amount of the most recent
annual contributions required to be made by the Borrower or any Commonly
Controlled Entity to each such Plan and copies of the collective bargaining
agreements requiring such contributions; (v) any information that has been
provided to the Borrower or any Commonly Controlled Entity regarding withdrawal
liability under any Multiemployer Plan; (vi) the aggregate amount of payments
made under any employee welfare benefit plan (as defined in Section 3(1) of
ERISA) to any retired employees of the Borrower or any of its Subsidiaries (or
any dependents thereof) during the most recently completed fiscal year; and
(vii) documents reflecting any agreements between the PBGC and the Borrower or
any Commonly Controlled Entity with respect to any Plan.
6.13 Further Assurances. From time to time execute and
deliver, or cause to be executed and delivered, such additional instruments,
certificates or documents, and take all such actions, as the Administrative
Agent may reasonably request, for the purposes of implementing
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or effectuating the provisions of this Agreement and the other Loan Documents,
or of more fully perfecting or renewing the rights of the Administrative Agent
and the Lenders with respect to the Collateral (or with respect to any additions
thereto or replacements or proceeds or products thereof or with respect to any
other property or assets hereafter acquired by Holdings, the Borrower or any
Subsidiary which may be deemed to be part of the Collateral) pursuant hereto or
thereto, including, without limitation, security interests in after-acquired
property. Upon the exercise by the Administrative Agent or any Lender of any
power, right, privilege or remedy pursuant to this Agreement or the other Loan
Documents which requires any consent, approval, recording, qualification or
authorization of any Governmental Authority, the Borrower will execute and
deliver, or will cause the execution and delivery of, all applications,
certifications, instruments and other documents and papers that the
Administrative Agent or such Lender may be required to obtain from the Borrower
or any of its Subsidiaries for such governmental consent, approval, recording,
qualification or authorization.
6.14 Immaterial Subsidiaries. Ensure that none of the
Immaterial Subsidiaries acquires any material assets, conducts any material
business or incurs any material Indebtedness or other liabilities (other than
unsecured guarantees of the Borrower Subordinated Notes as permitted under
Section 7.2(f)(ii)).
6.15 Post-Closing Matters (a) Deliver to the Administrative
Agent prior to January 12, 2001, duly executed consents to assignment, in form
and substance reasonably satisfactory to the Administrative Agent, with respect
to the "HomeTown" trademark license and the "Country Harvest Buffet" trademark
license unless, prior to such date the Borrower (or any Subsidiary thereof)
grants the Administrative Agent for the benefit of the Secured Parties, a
perfected first priority security interest in such trademarks pursuant to
Section 6.10.
(b) Comply with all of the obligations set forth on Schedule
6.15.
SECTION 7. NEGATIVE COVENANTS
Holdings and the Borrower hereby jointly and severally agree
that, so long as the Commitments remain in effect, any Letter of Credit remains
outstanding or any Loan or other amount is owing to any Lender, the Arrangers or
any Agent hereunder, each of Holdings and the Borrower shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly:
7.1 Financial Condition Covenants.
(a) Consolidated Leverage Ratio. Permit the Consolidated
Leverage Ratio as at the last day of any period of four consecutive fiscal
quarters (or, if less, the number of full fiscal quarters subsequent to the
Closing Date) of the Borrower ending with any fiscal quarter set forth below to
exceed the ratio set forth below opposite such fiscal quarter:
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<PAGE> 84
<TABLE>
<CAPTION>
Consolidated
Fiscal Quarter Leverage Ratio
-------------- --------------
<S> <C>
FQ4, 2000 3.35:1.00
FQ1, 2001 3.35:1.00
FQ2, 2001 3.35:1.00
FQ3, 2001 3.30:1.00
FQ4, 2001 3.30:1.00
FQ1, 2002 3.00:1.00
FQ2 2002 3.00:1.00
FQ3, 2002 3.00:1.00
FQ4, 2002 2.85:1.00
FQ1, 2003 2.75:1.00
FQ2, 2003 2.75:1.00
FQ3, 2003 2.75:1.00
FQ4, 2003 2.65:1.00
FQ1, 2004 2.50:1.00
FQ2, 2004 2.50:1.00
FQ3, 2004 2.50:1.00
FQ4, 2004 2.50:1.00
FQ1, 2005 2.50:1.00
FQ2, 2005 2.50:1.00
FQ3, 2005 2.50:1.00
FQ4, 2005 2.50:1.00
FQ1, 2006 2.50:1.00
FQ2, 2006 2.50:1.00
FQ3, 2006 2.50:1.00
FQ4, 2006 2.50:1.00
FQ1, 2007 2.50:1.00
</TABLE>
(b) Consolidated Interest Coverage Ratio. Permit the
Consolidated Interest Coverage Ratio for any period of four consecutive fiscal
quarters of the Borrower (or, if less, the number of full fiscal quarters
subsequent to the Closing Date) ending with the last day of any fiscal quarter
set forth below to be less than the ratio set forth below opposite such fiscal
quarter:
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<PAGE> 85
<TABLE>
<CAPTION>
Consolidated Interest
Fiscal Quarter Coverage Ratio
-------------- --------------
<S> <C>
FQ4, 2000 2.40:1.00
FQ1, 2001 2.50:1.00
FQ2, 2001 2.50:1.00
FQ3, 2001 2.50:1.00
FQ4, 2001 2.50:1.00
FQ1, 2002 2.75:1.00
FQ2 2002 2.75:1.00
FQ3, 2002 2.75:1.00
FQ4, 2002 2.75:1.00
FQ1, 2003 3.00:1.00
FQ2, 2003 3.00:1.00
FQ3, 2003 3.00:1.00
FQ4, 2003 3.00:1.00
FQ1, 2004 3.25:1.00
FQ2, 2004 3.25:1.00
FQ3, 2004 3.25:1.00
FQ4, 2004 3.25:1.00
FQ1, 2005 3.25:1.00
FQ2, 2005 3.25:1.00
FQ3, 2005 3.25:1.00
FQ4, 2005 3.25:1.00
FQ1, 2006 3.50:1.00
FQ2, 2006 3.50:1.00
FQ3, 2006 3.50:1.00
FQ4, 2006 3.50:1.00
FQ1, 2007 3.50:1.00
</TABLE>
(c) Consolidated Fixed Charge Coverage Ratio. Permit the
Consolidated Fixed Charge Coverage Ratio for any period of four consecutive
fiscal quarters of the Borrower (or, if less, the number of full fiscal quarters
subsequent to the Closing Date) ending with the last day of any fiscal quarter
set forth below to be less than the ratio set forth below opposite such fiscal
quarter:
<TABLE>
<CAPTION>
Consolidated Fixed
Fiscal Quarter Charge Coverage Ratio
-------------- ---------------------
<S> <C>
FQ4, 2000 1.15:1.00
FQ1, 2001 1.15:1.00
FQ2, 2001 1.15:1.00
FQ3, 2001 1.15:1.00
FQ4, 2001 1.10:1.00
FQ1, 2002 1.10:1.00
FQ2 2002 1.10:1.00
</TABLE>
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<PAGE> 86
<TABLE>
<S> <C>
FQ3, 2002 1.10:1.00
FQ4, 2002 1.10:1.00
FQ1, 2003 1.10:1.00
FQ2, 2003 1.10:1.00
FQ3, 2003 1.10:1.00
FQ4, 2003 1.10:1.00
FQ1, 2004 1.10:1.00
FQ2, 2004 1.10:1.00
FQ3, 2004 1.10:1.00
FQ4, 2004 1.10:1.00
FQ1, 2005 1.10:1.00
FQ2, 2005 1.10:1.00
FQ3, 2005 1.10:1.00
FQ4, 2005 1.05:1.00
FQ1, 2006 1.05:1.00
FQ2, 2006 1.05:1.00
FQ3, 2006 1.05:1.00
FQ4, 2006 1.05:1.00
FQ1, 2007 1.05:1.00
</TABLE>
(d) Certain Calculations. With respect to any period during
which a Permitted Acquisition or Asset Sale occurs, for purposes of determining
compliance with the covenants set forth in Section 7.1, and for purposes of
calculating the financial ratios used in Sections 7.7, 7.8(i) and Annex A,
Consolidated EBITDA and the components of Consolidated Fixed Charges shall be
calculated with respect to such period on a pro forma basis including pro forma
adjustments arising out of events which are directly attributable to a specific
transaction, are factually supportable and are expected to have a continuing
impact, in each case determined on a basis consistent with Article 11 of
Regulation S-X promulgated under the Securities Act of 1933, as amended, and as
interpreted by the staff of the SEC, which would include cost savings resulting
from head count reductions, closure of facilities and similar restructuring
charges, (which pro forma adjustments shall be certified by the Chief Financial
Officer of the Borrower), using the historical financial statements of the
Person or business acquired or sold or to be acquired or sold and the
consolidated financial statements of the Borrower and its Subsidiaries which
shall be reformulated as if such Permitted Acquisition or Asset Sale, and any
Indebtedness or other liabilities incurred in connection with any such
acquisition or sale had been consummated or incurred at the beginning of such
period (and assuming that such Indebtedness bears interest during any portion of
the applicable measurement period prior to the relevant Permitted Acquisition or
Asset Sale, at the weighted average of the interest rates applicable to
outstanding Loans during such period), all such calculations to be in form and
substance reasonably satisfactory to the Administrative Agent.
7.2 Limitation on Indebtedness. Create, incur, assume or
suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party created under any Loan
Document;
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<PAGE> 87
(b) Unsecured Indebtedness of the Borrower to any Solvent
Material Subsidiary and of any Subsidiary Guarantor to the Borrower or
any other Solvent Subsidiary; provided that such Indebtedness is
evidenced by, and subject to the terms and conditions of, the
Subordinated Intercompany Note and is otherwise subordinated in right
of payment to the Obligations under the Loan Documents on terms and
conditions satisfactory to the Administrative Agent;
(c) Indebtedness of the Borrower and its Material Subsidiaries
(including, without limitation, Capital Lease Obligations) secured by
Liens permitted by Section 7.3(g) in an aggregate principal amount not
to exceed $20,000,000 at any one time outstanding;
(d) Indebtedness (other than the Indebtedness referred to in
Sections 7.2(f) and (g)) of Holdings, the Borrower and its Subsidiaries
outstanding on the date hereof and listed on Schedule 7.2(d) and any
refinancings, refundings, renewals or extensions thereof (without any
increase in the principal amount thereof or any shortening of the
maturity of any principal amount thereof);
(e) Unsecured Guarantee Obligations made in the ordinary
course of business by the Borrower or any of its Material Subsidiaries
of obligations of the Borrower or any Subsidiary Guarantor;
(f) Unsecured Indebtedness of the Borrower created under the
Borrower Subordinated Note Purchase Agreement in respect of the
Borrower Subordinated Notes in an aggregate principal amount not to
exceed $80,000,000 and (ii) Guarantee Obligations of any Subsidiary
Guarantor in respect of such Indebtedness; provided that such Guarantee
Obligations are subordinated to the obligations of such Subsidiary
Guarantor under the Guarantee and Collateral Agreement to the same
extent as the obligations of the Borrower in respect of the Borrower
Subordinated Notes are subordinated to the Obligations;
(g) Unsecured Indebtedness of Holdings created under the
Holdings Senior Unsecured Note Purchase Agreement in respect of the
Holdings Senior Unsecured Notes in an aggregate principal amount not to
exceed $15,000,000 (plus capitalized interest as set forth therein);
(h) Indebtedness of the Borrower or any Material Subsidiary
not in excess of $10,000,000 in the aggregate assumed in connection
with any Permitted Acquisition under Section 7.8(i); provided that such
Indebtedness was not incurred (i) to provide all or a portion of the
funds utilized to consummate the transaction or series of related
transactions constituting such Permitted Acquisition or (ii) otherwise
in connection with, or in contemplation of, such Permitted
Acquisition); and
(i) unsecured subordinated Indebtedness of the Borrower
("Seller Notes") issued to the seller in connection with any Permitted
Acquisition under Section 7.8(i); provided that (i) such Indebtedness
provides for cash interest payments in an amount not greater than 14%
per annum and requires no cash payments of principal prior to the date
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<PAGE> 88
that is one year after the final maturity of the Loans, (ii) such
Indebtedness does not impose any financial or other "maintenance"
covenants on Holdings, the Borrower or any of its Subsidiaries, (iii)
such Indebtedness is subordinated to the Obligations on terms no less
favorable to the Secured Parties than those governing the Borrower
Subordinated Notes and (iv) the aggregate principal amount of any such
Seller Notes does not exceed $20,000,000 at any one time outstanding.
7.3 Limitation on Liens. Create, incur, assume or suffer to
exist any Lien upon any of its Property, whether now owned or hereafter
acquired, except for:
(a) Liens for taxes not yet due or which are being contested
in good faith by appropriate proceedings, provided that adequate
reserves with respect thereto are maintained on the books of the
applicable Loan Party, as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 30 days or
that are being contested in good faith by appropriate proceedings,
provided that adequate reserves with respect thereto are maintained on
the books of the applicable Loan Party, as the case may be, in
conformity with GAAP;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation;
(d) deposits by or on behalf of the Borrower or any of its
Subsidiaries to secure the performance of bids, trade contracts (other
than for borrowed money), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business that, in the
aggregate, are not substantial in amount and which do not in any case
materially detract from the value of the Property subject thereto or
materially interfere with the ordinary conduct of the business of the
Borrower or any of its Subsidiaries;
(f) Liens in existence on the date hereof listed on Schedule
7.3(f), securing Indebtedness permitted by Section 7.2(d), provided
that no such Lien is spread to cover any additional Property after the
Closing Date and that the amount of Indebtedness secured thereby is not
increased;
(g) Liens securing Indebtedness of the Borrower or any of its
Material Subsidiaries incurred pursuant to Section 7.2(c) to finance
the acquisition of fixed or capital assets, provided that (i) such
Liens shall be created substantially simultaneously with the
acquisition of such fixed or capital assets, (ii) such Liens do not at
any time encumber any Property other than the Property financed by such
Indebtedness and (iii) the amount of Indebtedness secured thereby is
not increased;
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<PAGE> 89
(h) Liens created pursuant to the Security Documents;
(i) any interest or title of a lessor under any lease entered
into by the Borrower or any of its Subsidiaries in the ordinary course
of its business and covering only the assets so leased;
(j) Liens and other matters listed as exceptions to insurance
in the title insurance policies issued to the Administrative Agent on
the Closing Date;
(k) Liens on the property or assets of a Person which becomes
a Subsidiary of Holdings after the date hereof securing Indebtedness
permitted by Section 7.2(h); provided that (i) such Liens existed at
the time such Person became a Subsidiary of Holdings and were not
created in anticipation thereof, (ii) any such Lien is not expanded to
cover any property or assets of such Person after the time such Person
becomes a Subsidiary of Holdings (other than after acquired title in or
on such property or proceeds of the existing collateral in accordance
with the instrument creating such Lien), and (iii) the amount of
Indebtedness secured thereby is not increased; and
(l) those items indicated on Schedule 4.25(h).
7.4 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or Dispose of all or substantially all
of its Property or business, except that:
(a) any Solvent Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower (provided that the Borrower
shall be the continuing or surviving corporation) or with or into any
Subsidiary Guarantor (provided that the Subsidiary Guarantor shall be
the continuing or surviving corporation), subject to at least 30 days
prior written notice to the Administrative Agent; and
(b) any Subsidiary of the Borrower may Dispose of any or all
of its assets (upon voluntary liquidation or otherwise) to the Borrower
or any Subsidiary Guarantor.
7.5 Limitation on Disposition of Property. Dispose of any of
its Property (including, without limitation, receivables and leasehold
interests), whether now owned or hereafter acquired, or, in the case of any
Subsidiary of Holdings, issue or sell any shares of such Subsidiary's Capital
Stock to any Person, except:
(a) the Disposition of surplus, obsolete or worn out property
in the ordinary course of business;
(b) the sale of inventory in the ordinary course of business;
(c) Dispositions permitted by Section 7.4(b);
(d) the sale or issuance of (i) any Subsidiary's Capital Stock
(other than Disqualified Stock) to the Borrower or any Subsidiary
Guarantor (subject to the prior
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<PAGE> 90
completion of all actions necessary to continue uninterrupted the
Administrative Agent's Lien on the Collateral) or (ii) the Borrower's
Capital Stock (other than Disqualified Stock) to Holdings;
(e) the Disposition by the Borrower or any of its Subsidiaries
of other assets having a fair market value not to exceed $10,000,000 in
the aggregate for any fiscal year of the Borrower;
(f) any Recovery Event, provided that the requirements of
Section 2.12(b) are complied with in connection therewith;
(g) the sale of Pizza Play, Tahoe Joe's, Roadhouse and the
Wisconsin Facility; provided that the provisions of Section 2.12(b) are
complied with in connection therewith; provided, further, that the
Administrative Agent receives an officer's certificate signed by a
Responsible Officer of the Borrower with appropriate supporting
attachments stating that any such sale is at fair market value as
determined in good faith by the board of directors of the Borrower;
(h) the sale of up to 40 of the Loan Parties' restaurants
during the term of this Agreement, provided that the provisions of
Section 2.12(b) are complied with in connection therewith; and
(i) sales of capital equipment; provided that substantially
concurrently with any such sale, the Borrower enters into a financing
arrangement for such capital equipment as permitted under Section
7.2(c) and Section 7.3(g).
7.6 Limitation on Restricted Payments. Declare or pay any
dividend (other than dividends payable solely in common stock (excluding
Disqualified Stock) of the Person making such dividend) on, or make any payment
on account of, or set apart assets for a sinking or other analogous fund for,
the purchase, redemption, defeasance, retirement or other acquisition of, any
Capital Stock of Holdings, the Borrower or any of its Subsidiaries, whether now
or hereafter outstanding, or make any other distribution in respect thereof,
either directly or indirectly, whether in cash or property or in obligations of
Holdings, the Borrower or any of its Subsidiaries, or enter into any derivatives
or other transaction with any financial institution, commodities or stock
exchange or clearinghouse (a "Derivatives Counterparty") obligating Holdings,
the Borrower or any of its Subsidiaries to make payments to such Derivatives
Counterparty as a result of any change in market value of any such Capital Stock
(collectively, "Restricted Payments"), except that:
(a) any Subsidiary may make Restricted Payments to the
Borrower or any Subsidiary Guarantor and any ratable payment to any
other equity owner;
(b) so long as no Default or Event of Default shall have
occurred and be continuing, the Borrower may pay dividends to Holdings
to permit Holdings to (i) to the extent required by the Stockholders'
Agreement purchase Holdings' common stock or common stock options from
present or former officers or employees of Holdings, the Borrower or
any Subsidiary upon the death, disability or termination of employment
of
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<PAGE> 91
such officer or employee, provided, that the aggregate amount of
payments under this clause (i) subsequent to the date hereof (net of
any proceeds received by Holdings and contributed to the Borrower
subsequent to the date hereof in connection with resales of any common
stock or common stock options so purchased) shall not exceed $8,000,000
in any fiscal year of which not more than $4,000,000 may be used for
payments to any one such officer or employee (or his or her estate),
(ii) pay management fees to the Sponsor and its Control Investment
Affiliates expressly permitted by Section 7.10, (iii) pay customary
fees to members of its Board of Directors and (iv) pay cash interest
then due and owing on the Holdings Senior Unsecured Notes, provided
that, in the case of (ii) and (iii), such payments are used by Holdings
within 30 days of receipt to make such payments;
(c) the Borrower may pay dividends to Holdings to permit
Holdings to (i) pay corporate overhead expenses incurred in the
ordinary course of business not to exceed $250,000 in any fiscal year
and (ii) pay any taxes which are due and payable by Holdings and the
Borrower as part of a consolidated group, provided that, in each case,
such payments are used by Holdings within 30 days of receipt to make
such payments;
(d) the Borrower may purchase Capital Stock of Pizza Play if
and as required pursuant to the terms of the Pre-Incorporation
Agreement dated March 7, 1997 by and between the Borrower, David L.
Dierberger and Leslie W. Storhaug as in effect on the date hereof; and
(e) Hometown and the Borrower may purchase the Capital Stock
of Tahoe Joe's if and as required pursuant to the terms of the
Stockholders' Agreement dated April 8, 1999 by and among the Borrower,
Hometown, David P. Fansler, Jr. and Tahoe Joe's as in effect on the
date hereof.
Notwithstanding the foregoing, during the 14 days immediately following the
Closing Date, Holdings may exchange any warrants issued pursuant to the Warrant
Agreement on the Closing Date for a warrant or warrants with identical terms
(and collectively for the same number of shares of Capital Stock of Holdings as
the warrant so exchanged) in connection with any syndication of the Borrower
Subordinated Notes and the Holdings Senior Unsecured Notes conducted by the
initial purchaser thereof.
7.7 Limitation on Capital Expenditures. Subject to Section
7.19, make or commit to make any Capital Expenditure, except (a) Capital
Expenditures of the Borrower and its Material Subsidiaries in the ordinary
course of business not exceeding in any fiscal year of the Borrower (i)
$40,000,000 plus (ii) an amount equal to the portion of Consolidated EBITDA of
the Borrower and its Subsidiaries for the immediately preceding fiscal year in
excess of $118,000,000 multiplied by, in the case of this clause (ii), 0.60 (or
0.55 if the Consolidated Leverage Ratio as of the last day of the immediately
preceding fiscal quarter was greater than 2.00:1.00); provided, that (A) up to
50% of any such amount referred to above, if not so expended in the fiscal year
for which it is permitted, may be carried over for expenditure in the next
succeeding fiscal year and (B) Capital Expenditures made pursuant to this clause
(a) during any fiscal year shall be deemed made, first, in respect of amounts
permitted for such fiscal year
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<PAGE> 92
as provided above and second, in respect of amounts carried over from the prior
fiscal year pursuant to subclause (A) above, (b) Capital Expenditures of the
Borrower or its Material Subsidiaries made with the proceeds of any Reinvestment
Deferred Amount, (c) Capital Expenditures of the Borrower or its Material
Subsidiaries constituting Permitted Acquisitions under Section 7.8(i), (d)
Capital Expenditures not exceeding $7,000,000 in the aggregate in connection
with the purchase and installation of the Borrower's new management information
system and (e) Capital Expenditures made with the proceeds of Excess Cash Flow
remaining after giving effect to any mandatory prepayments required by Section
2.12(c).
7.8 Limitation on Investments. Make any advance, loan,
extension of credit (by way of guaranty or otherwise) or capital contribution
to, or purchase any Capital Stock, bonds, notes, debentures or other debt
securities of, or any assets constituting an ongoing business from, or make any
other investment in, any other Person (all of the foregoing, "Investments"),
except:
(a) extensions of trade credit in the ordinary course of
business;
(b) Investments in Cash Equivalents;
(c) Investments arising in connection with the incurrence of
Indebtedness permitted by Section 7.2(b) and
(d); loans and advances to employees of the Borrower or any
Subsidiaries of the Borrower in the ordinary course of business
(including, without limitation, for travel, entertainment and
relocation expenses) in an aggregate amount for Holdings, the Borrower
and Subsidiaries of the Borrower not to exceed $5,000,000 at any one
time outstanding;
(e) the Acquisition;
(f) Investments in assets useful in the Borrower's or the
applicable Material Subsidiary's business made by the Borrower or any
of its Material Subsidiaries with the proceeds of any Reinvestment
Deferred Amount;
(g) Investments (other than those relating to the incurrence
of Indebtedness permitted by Section 7.8(c)) by Holdings, the Borrower
or any of its Material Subsidiaries in the Borrower or any Person that,
prior to such Investment, is a Subsidiary Guarantor and a Material
Subsidiary;
(h) Investments constituting Capital Expenditures, to the
extent permitted under Section 7.7;
(i) in addition to Investments otherwise expressly permitted
by this Section, Investments by the Borrower or any of its Material
Subsidiaries constituting acquisitions of Persons or ongoing businesses
("Permitted Acquisitions"); provided that:
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(i) immediately prior to and after giving affect to
any such Permitted Acquisition, no Default or Event of Default
shall have occurred and be continuing and the Borrower shall
have certified same to the Administrative Agent in writing;
(ii) if such Permitted Acquisition is structured as a
stock acquisition, then either (A) the Person so acquired
becomes a Wholly-Owned Subsidiary of the Borrower or (B) such
Person is merged with and into either the Borrower or a
Wholly-Owned Subsidiary of the Borrower (with the Borrower or
such Wholly-Owned Subsidiary being the surviving corporation
in such merger)
(iii) all of the provisions of Section 6.10 have been
or will be complied with in respect of such Permitted
Acquisition;
(iv) the only consideration paid in connection with
such Permitted Acquisition shall consist of cash, Capital
Stock (other than Disqualified Stock) of Holdings, or Seller
Notes;
(v) after giving pro forma effect to the proposed
Permitted Acquisition in accordance with Section 7.1(d), the
Borrower shall be in compliance with the financial covenants
set forth in Section 7.1;
(vi) the individual amount of any such Permitted
Acquisition does not exceed $45,000,000;
(vii) notwithstanding the foregoing, no Permitted
Acquisitions may be made during the first twelve months
following the Closing Date, except as set forth in Schedule
7.8(i); and
(viii) the aggregate amount of Revolving Lender
Commitments less the Revolving Extensions of Credit (in each
case, as of the date on which such Permitted Acquisition is
consummated and after giving effect thereto) shall be greater
than $10,000,000; and
(j) in addition to Investments otherwise expressly permitted
by this Section, Investments by the Borrower or any of its Material Subsidiaries
in an amount (valued at cost) not to exceed $2,500,000 in the aggregate during
the term of this Agreement.
7.9 Limitation on Optional Payments and Modifications of
indebtedness. (a) Make or offer to make any optional or voluntary payment,
prepayment, repurchase or redemption of, or otherwise voluntarily or optionally
defease, the Borrower Subordinated Notes, the Holdings Senior Unsecured Notes or
any other subordinated Indebtedness (excluding the Indebtedness created
hereunder), or segregate funds for any such payment, prepayment, repurchase,
redemption or defeasance, or enter into any derivative or other transaction with
any Derivatives Counterparty obligating Holdings, the Borrower or any of its
Subsidiaries to make payments to such Derivatives Counterparty as a result of
any change in market value of such Indebtedness, other than the prepayment of
Indebtedness incurred hereunder, (b) make or offer to
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make any payment, repayment, purchase, repurchase or redemption of any of the
Borrower Subordinated Notes or Holdings Senior Unsecured Notes upon or on
account of a "Change of Control" (or similar event) or "Increased Leverage
Event" (or similar event), each under and as defined in the Borrower
Subordinated Note Purchase Agreement or the Holdings Senior Unsecured Note
Purchase Agreement, (c) amend, modify or otherwise change, or consent or agree
to any amendment, modification, waiver or other change to any of the
subordination provisions of the Borrower Subordinated Debt Documentation,
including the defined terms used therein (including, without limitation,
Articles 13 and 15 of the Borrower Subordinated Note Purchase Agreement), or any
of the events of default, remedies or standstill provisions of the Borrower
Subordinated Debt Documentation or Holdings Senior Unsecured Debt Documentation,
including, in each case, the defined terms used therein (including, without
limitation, Section 10.12, Article 11 and Section 12.5 of the Borrower
Subordinated Note Purchase Agreement and Section 10.12 and Article 11 of the
Holdings Senior Unsecured Note Purchase Agreement), (d) amend, modify or
otherwise change, or consent or agree to any amendment, modification, waiver or
other change to any terms of the Borrower Subordinated Debt Documentation or the
Holdings Senior Unsecured Debt Documentation or any other Indebtedness
(excluding the Indebtedness created hereunder) not specified in clause (c) above
(i) in a manner adverse to the Lenders or (ii) if the effect of such amendment,
modification, waiver or other change, together with all other amendments or
changes made, is to increase materially the obligations of the obligor
thereunder or to confer any additional rights on the holders of the Borrower
Subordinated Notes, the Holdings Senior Unsecured Notes or such Indebtedness
which could reasonably be expected to be materially adverse to any Loan Party or
any Secured Party, (e) designate any Indebtedness (other than the Obligations)
as "Designated Senior Indebtedness" for the purposes of the Borrower
Subordinated Notes or the Holdings Senior Unsecured Notes or (f) amend or permit
the amendment of its Governing Documents in any manner determined by the
Administrative Agent to be adverse to the Lenders.
7.10 Limitation on Transactions with Affiliates. Enter into
any transaction, including, without limitation, any purchase, sale, lease or
exchange of Property, the rendering of any service or the payment of any
management, advisory or similar fees, with any Affiliate or any director,
officer or stockholder (other than Holdings, the Borrower or any Subsidiary
Guarantor) unless such transaction is (a) otherwise permitted under this
Agreement, (b) in the ordinary course of business of Holdings, the Borrower or
such Subsidiary, as the case may be, or otherwise expressly permitted under this
Agreement and (c) upon fair and reasonable terms no less favorable to Holdings,
the Borrower or such Subsidiary, as the case may be, than it would obtain in a
comparable arm's length transaction with a Person that is not an Affiliate,
director, officer or stockholder, as applicable. Notwithstanding the foregoing,
the Borrower and its Subsidiaries may (i) in any fiscal year of the Borrower,
pay to the Sponsor and its Control Investment Affiliates fees and expenses
pursuant to a management agreement approved by the board of directors of the
Borrower in an aggregate amount not to exceed 2% of Consolidated EBITDA of the
Borrower for such fiscal year (reduced ratably for fiscal year 2000 for that
portion of such fiscal year remaining after the Closing Date) and (ii) pay to
Roe Hatlen and Dennis Scott fees pursuant to the Advisory Services Agreement.
The limitations in the first sentence of this Section 7.10 shall not apply to
transactions with Affiliates pursuant to Section 7.8(d).
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7.11 Limitation on Sales and Leasebacks. Enter into any
arrangement with any Person providing for the leasing by Holdings, the Borrower
or any of its Subsidiaries of Property which has been or is to be sold or
transferred by Holdings, the Borrower or such Subsidiary to such Person or to
any other Person to whom funds have been or are to be advanced by such Person on
the security of such Property or rental obligations of Holdings, the Borrower or
such Subsidiary, except for the Headquarters Sale-Leaseback; provided that the
Borrower and its Subsidiaries may enter into such a sale and leaseback
arrangement if, substantially concurrently with the consummation thereof, the
Borrower or such Subsidiary, as applicable, enters into a financing arrangement
for such Property as permitted under Section 7.2(c) and Section 7.3(g).
7.12 Limitation on Changes in Fiscal Periods. Permit the
fiscal year of Holdings, the Borrower or any of its Subsidiaries to end on a day
other than the Wednesday closest to December 31 or change Holdings', the
Borrower's or any of its Subsidiaries' method of determining fiscal quarters, in
each case, without the prior written consent of the Administrative Agent.
7.13 Limitation on Negative Pledge Clauses. Enter into or
suffer to exist or become effective any agreement that prohibits or limits the
ability of Holdings, the Borrower or any of its Subsidiaries to create, incur,
assume or suffer to exist any Lien upon any of its Property or revenues, whether
now owned or hereafter acquired, to secure the Obligations or, in the case of
any Guarantor, its obligations under the Guarantee and Collateral Agreement,
other than (a) this Agreement and the other Loan Documents and (b) any
agreements governing any purchase money Liens, Capital Lease Obligations or
Indebtedness incurred pursuant to Section 7.2(c) or (h) otherwise permitted
hereby (in which case, any prohibition or limitation permitted under this clause
(b) shall only be effective against the assets financed thereby).
7.14 Limitation on Restrictions on Subsidiary Distributions,
etc. Enter into or suffer to exist or become effective any consensual
encumbrance or restriction on the ability of Holdings, the Borrower or any of
its Subsidiaries (or, in the case of clause (a) only, any Subsidiary of the
Borrower) to (a) make Restricted Payments in respect of any Capital Stock of
such Subsidiary held by, or pay or subordinate any Indebtedness owed to,
Holdings, the Borrower or any other Subsidiary, (b) make Investments in
Holdings, the Borrower or any other Subsidiary or (c) transfer any of its assets
to Holdings, the Borrower or any other Subsidiary, except for such encumbrances
or restrictions existing under or by reason of (i) any restrictions existing
under the Loan Documents, (ii) any restrictions under Section 10.3 of the
Borrower Subordinated Note Purchase Agreement and Section 10.3 of the Holdings
Senior Unsecured Note Purchase Agreement, each as in effect on the date hereof
and (iii) any restrictions with respect to a Subsidiary imposed pursuant to an
agreement that has been entered into in connection with the Disposition of all
or substantially all of the Capital Stock or assets of such Subsidiary to the
extent not otherwise prohibited.
7.15 Limitation on Lines of Business. Enter into any business,
either directly or through any Subsidiary, except for those businesses in which
the Borrower and its Subsidiaries are engaged on the date of this Agreement
(after giving effect to the Acquisition) or that are reasonably related thereto.
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7.16 Limitation on Amendments to Acquisition Documentation.
Amend, supplement, replace or otherwise modify (whether pursuant to a waiver
granted by or to such Person or otherwise) or fail to enforce strictly the terms
and conditions of any of the Acquisition Documentation, except to the extent
that any such amendment, supplement, modification or failure to enforce could
not reasonably be expected, in the Administrative Agent's reasonable judgment,
to adversely affect the interests of the Arrangers or any Agent or Lender.
7.17 Limitation on Activities of Holdings. In the case of
Holdings, notwithstanding anything to the contrary in this Agreement or any
other Loan Document, (a) conduct, transact or otherwise engage in, or commit to
conduct, transact or otherwise engage in, any business or operations other than
those incidental to its ownership of the Capital Stock of the Borrower, (b)
incur, create, assume or suffer to exist any Indebtedness or other liabilities
or financial obligations, except (i) nonconsensual obligations imposed by
operation of law, (ii) pursuant to the Loan Documents to which it is a party,
(iii) obligations with respect to its Capital Stock and (iv) the Holdings Senior
Unsecured Notes, or (c) own, lease, manage or otherwise operate any properties
or assets (including cash (other than cash received in connection with dividends
made by the Borrower in accordance with Section 7.6 pending application in the
manner contemplated by said Section) and Cash Equivalents) other than the
ownership of shares of Capital Stock of the Borrower.
7.18 Limitation on Hedge Agreements. Enter into any Hedge
Agreement other than Specified Hedge Agreements entered into in the ordinary
course of business, and not for speculative purposes, to protect against changes
in interest rates or foreign exchange rates.
7.19 New Restaurants. After the Closing Date, open or acquire
or commit to open or acquire new Non-Core Concept Restaurants (i) in each of the
fiscal years ending December 27, 2000 and December 26, 2001, if, at the time of
such opening, acquisition or commitment, the total number of Non-Core Concept
Restaurants owned and/or operated by Holdings, the Borrower or any of its
Subsidiaries would exceed 7% of the total number of opened and operating
individual restaurants (both Core Concept Restaurants and Non-Core Concept
Restaurants) owned and/or operated by Holdings, the Borrower or any of its
Subsidiaries or (ii) in each of the fiscal years ending December 25, 2002 and
thereafter, if, at the time of such opening, acquisition or commitment, the
total number of Non-Core Concept Restaurants owned and/or operated by Holdings,
the Borrower or any of its Subsidiaries would exceed 10% of the total number of
open and operating individual restaurants (both Core Concept Restaurants and
Non-Core Concept Restaurants) owned and/or operated by Holdings, the Borrower or
any of its Subsidiaries.
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan
or Reimbursement Obligation when due in accordance with the terms
hereof; or the Borrower shall fail to pay any interest on any Loan or
Reimbursement Obligation within three days after such interest is due
in accordance with the terms hereof; or any Loan
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Party shall fail to pay any other amount payable hereunder or under any
other Loan Document, within five days after any such other amount
becomes due in accordance with the terms hereof; or
(b) Any representation or warranty made or deemed made by any
Loan Party herein or in any other Loan Document or that is contained in
any certificate, document or financial or other statement furnished by
it at any time under or in connection with this Agreement or any such
other Loan Document shall prove to have been inaccurate in any material
respect on or as of the date made or deemed made; or
(c) (i) Any Loan Party shall default in the observance or
performance of any agreement contained in clause (i) or (ii) of Section
6.4(a) (with respect to Holdings and the Borrower only), Section
6.7(a), Section 7 or Section 5 of the Guarantee and Collateral
Agreement or (ii) an "Event of Default" under and as defined in any
Mortgage shall have occurred and be continuing; or
(d) Any Loan Party shall default in the observance or
performance of any other covenant or agreement contained in this
Agreement or any other Loan Document (other than as provided in
paragraphs (a) through (c) of this Section), and such default shall
continue unremedied for a period of 30 days; or
(e) Holdings, the Borrower or any of its Subsidiaries shall
(i) default in making any payment of any principal of any Indebtedness
(including, without limitation, any Guarantee Obligation, but excluding
the Loans) on the scheduled or original due date with respect thereto
and beyond any applicable period of grace; or (ii) default in making
any payment of any interest on any such Indebtedness beyond the period
of grace, if any, provided in the instrument or agreement under which
such Indebtedness was created; or (iii) default in the observance or
performance of any other agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or beneficiary of such
Indebtedness (or a trustee or agent on behalf of such holder or
beneficiary) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or (in the case
of any such Indebtedness constituting a Guarantee Obligation) to become
payable; provided, that a default, event or condition described in
clause (i), (ii) or (iii) of this paragraph (e) shall not at any time
constitute an Event of Default unless, at such time, one or more
defaults, events or conditions of the type described in clauses (i),
(ii) and (iii) of this paragraph (e) shall have occurred and be
continuing with respect to Indebtedness the outstanding principal
amount of which exceeds in the aggregate $5,000,000; or
(f) (i) Holdings, the Borrower or any of its Subsidiaries
shall commence any case, proceeding or other action (A) under any
existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to
it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment,
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winding-up, liquidation, dissolution, composition or other relief with
respect to it or its debts, or (B) seeking appointment of a receiver,
trustee, custodian, conservator or other similar official for it or for
all or any substantial part of its assets, or Holdings, the Borrower or
any of its Subsidiaries shall make a general assignment for the benefit
of its creditors; or (ii) there shall be commenced against Holdings,
the Borrower or any of its Subsidiaries any case, proceeding or other
action of a nature referred to in clause (i) above that (A) results in
the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or unbonded for a
period of 60 days; or (iii) there shall be commenced against Holdings,
the Borrower or any of its Subsidiaries any case, proceeding or other
action seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial part of its
assets that results in the entry of an order for any such relief that
shall not have been vacated, discharged, or stayed or bonded pending
appeal within 60 days from the entry thereof; or (iv) Holdings, the
Borrower or any of its Subsidiaries shall take any action in
furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or
(iii) above; or (v) Holdings, the Borrower or any of its Subsidiaries
shall generally not, or shall be unable to, or shall admit in writing
its inability to, pay its debts as they become due; or
(g) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code) involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist
with respect to any Plan or any Lien in favor of the PBGC or a Plan
shall arise on the assets of the Borrower or any Commonly Controlled
Entity, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee
shall be appointed, to administer or to terminate, any Single Employer
Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is, in the reasonable opinion of the Required
Lenders, likely to result in the termination of such Plan for purposes
of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for
purposes of Title IV of ERISA, (v) the Borrower or any Commonly
Controlled Entity shall, or in the reasonable opinion of the Required
Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan, (vi) the Borrower, any of its Subsidiaries or any
Commonly Controlled Entity shall be required to make during any fiscal
year of the Borrower payments pursuant to any employee welfare benefit
plan (as defined in Section 3(1) of ERISA) that provides benefits to
retired employees (or their dependents) that, in the aggregate, exceed
the amount set forth on Schedule 8(g)(i) with respect to such fiscal
year, (vii) the Borrower, any of its Subsidiaries or any Commonly
Controlled Entity shall be required to make during any fiscal year of
the Borrower contributions to any defined benefit pension plan subject
to Title IV of ERISA (including any Multiemployer Plan) that, in the
aggregate, exceed the amount set forth on Schedule 8(g)(ii) with
respect to such fiscal year or (viii) any other similar event or
condition shall occur or exist with respect to a Plan; and in each case
in clauses (i) through (viii) above, such event or condition, together
with all other such events or conditions, if any, could, in the sole
judgment of the Required Lenders, reasonably be expected to have a
Material Adverse Effect; or
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(h) One or more judgments or decrees shall be entered against
Holdings, the Borrower or any of its Subsidiaries involving for
Holdings, the Borrower and its Subsidiaries taken as a whole a
liability (not paid or fully covered by insurance as to which the
relevant insurance company has acknowledged coverage) of $5,000,000 or
more, and all such judgments or decrees shall not have been vacated,
discharged, stayed or bonded pending appeal within 30 days from the
entry thereof; or
(i) Any of the Security Documents shall cease, for any reason
(other than pursuant to the terms thereof), to be in full force and
effect, or any Loan Party or any Affiliate of any Loan Party shall so
assert, or any Lien created by any of the Security Documents shall
cease to be enforceable and of the same effect and priority purported
to be created thereby; or
(j) At any time, the Loan Parties shall, collectively, be in
default under more than ten percent (10%) of the total number of their
restaurant leases such that the landlords under such leases would be
entitled to terminate such leases; or
(k) The guarantee contained in Section 2 of the Guarantee and
Collateral Agreement shall cease, for any reason (other than pursuant
to the terms thereof), to be in full force and effect or any Loan Party
or any Affiliate of any Loan Party shall so assert; or
(l) Any Loan Party or any Affiliate of any Loan Party shall
assert that any provision of any Loan Document is not in full force and
effect; or
(m) (i) The Permitted Investors shall cease to have the power
to vote or direct the voting of securities having a majority of the
ordinary voting power for the election of directors of Holdings
(determined on a fully diluted basis); (ii) the Sponsor and its Control
Investment Affiliates shall cease to own of record and beneficially an
amount of common stock of Holdings equal to at least 51% of the amount
of common stock of Holdings; (iii) the Permitted Investors and the
Management Investors, collectively, shall cease to own of record and
beneficially an amount of common stock of Holdings equal to at least
80% of the amount of common stock of Holdings owned collectively by the
Permitted Investors and the Management Investors of record and
beneficially as of the Closing Date, (iv) any "person" or "group" (as
such terms are used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")), excluding the
Permitted Investors and the Management Investors, shall become, or
obtain rights (whether by means or warrants, options or otherwise) to
become, the "beneficial owner" (as defined in Rules 13(d)-3 and 13(d)-5
under the Exchange Act), directly or indirectly, of more than 35% of
the outstanding common stock of Holdings; (v) the board of directors of
Holdings shall cease to consist of a majority of Continuing Directors;
(vi) Holdings shall cease to own and control, of record and
beneficially, directly, 100% of each class of outstanding Capital Stock
of the Borrower free and clear of all Liens (except Liens created by
the Guarantee and Collateral Agreement); or (vii) a Specified Change of
Control shall occur; or
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(n) The Indebtedness under the Subordinated Notes or any
guarantees thereof shall cease, for any reason, to be validly
subordinated to the Obligations or the obligations of the Guarantors
under the Guarantee and Collateral Agreement, as the case may be, as
provided in the Subordinated Debt Documentation, or any Loan Party or
any Affiliate of any Loan Party shall so assert;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents (including, without limitation, all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) shall immediately become due and payable, and (B) if such event is
any other Event of Default, either or both of the following actions may be
taken: (i) with the consent of the Majority Revolving Credit Facility Lenders,
the Administrative Agent may, or upon the request of the Majority Revolving
Credit Facility Lenders, the Administrative Agent shall, by notice to the
Borrower declare the Revolving Credit Commitments to be terminated forthwith,
whereupon the Revolving Credit Commitments shall immediately terminate; and (ii)
with the consent of the Required Lenders, the Administrative Agent may, or upon
the request of the Required Lenders, the Administrative Agent shall, by notice
to the Borrower, declare the Loans hereunder (with accrued interest thereon) and
all other amounts owing under this Agreement and the other Loan Documents
(including, without limitation, all amounts of L/C Obligations, whether or not
the beneficiaries of the then outstanding Letters of Credit shall have presented
the documents required thereunder) to be due and payable forthwith, whereupon
the same shall immediately become due and payable. Upon the occurrence and
during the continuation of an Event of Default, the Administrative Agent and the
Lenders shall be entitled to exercise any and all remedies available under the
Security Documents, including, without limitation, the Guarantee and Collateral
Agreement and the Mortgages, or otherwise available under applicable law or
otherwise. With respect to all Letters of Credit with respect to which
presentment for honor shall not have occurred at the time of an acceleration
pursuant to this paragraph, the Borrower shall at such time deposit in a cash
collateral account opened by the Administrative Agent an amount in immediately
available funds equal to the aggregate then undrawn and unexpired amount of such
Letters of Credit (and the Borrower hereby grants to the Administrative Agent,
for the ratable benefit of the Secured Parties, a continuing security interest
in all amounts at any time on deposit in such cash collateral account to secure
the undrawn and unexpired amount of such Letters of Credit and all other
Obligations). If at any time the Administrative Agent determines that any funds
held in such cash collateral account are subject to any right or claim of any
Person other than the Administrative Agent and the Secured Parties or that the
total amount of such funds is less than the aggregate undrawn and unexpired
amount of outstanding Letters of Credit, the Borrower shall, forthwith upon
demand by the Administrative Agent, pay to the Administrative Agent, as
additional funds to be deposited and held in such cash collateral account, an
amount equal to the excess of (a) such aggregate undrawn and unexpired amount
over (b) the total amount of funds, if any, then held in such cash collateral
account that the Administrative Agent determines to be free and clear of any
such right and claim. Amounts held in such cash collateral account shall be
applied by the Administrative Agent to the payment of drafts drawn under such
Letters of Credit, and the unused portion thereof after all such Letters of
Credit shall have
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expired or been fully drawn upon, if any, shall be applied to repay other
Obligations of the Loan Parties hereunder and under the other Loan Documents.
After all such Letters of Credit shall have expired or been fully drawn upon,
all Reimbursement Obligations shall have been satisfied and all other
obligations of the Loan Parties outstanding hereunder and under the other Loan
Documents shall have been paid in full (excluding Obligations with respect of
any unmatured contingent reimbursement and indemnification obligations), the
balance, if any, in such cash collateral account shall be returned to the Loan
Parties (or such other Person as may be lawfully entitled thereto).
SECTION 9. THE AGENTS; THE ARRANGERS
9.1 Appointment. Each Lender hereby irrevocably designates and
appoints the Agents as the agents of such Lender under this Agreement and the
other Loan Documents, and each such Lender irrevocably authorizes each Agent, in
such capacity, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to such Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, no Agent shall have any duties or responsibilities,
except those expressly set forth herein and in the Loan Documents, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against any Agent.
9.2 Delegation of Duties. Each Agent may execute any of its
duties under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. No Agent shall be responsible for the
negligence or misconduct of any agents or attorneys in-fact selected by it with
reasonable care.
9.3 Exculpatory Provisions. Neither any Arranger, nor any
Agent nor any of their respective officers, directors, partners, employees,
agents, attorneys and other advisors, attorneys-in-fact or affiliates shall be
(i) liable for any action lawfully taken or omitted to be taken by it or such
Person under or in connection with this Agreement or any other Loan Document
(except to the extent that any of the foregoing are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
solely and proximately from its or such Person's own gross negligence or willful
misconduct in breach of a duty owed to the party asserting liability) or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by any Loan Party or any officer thereof
contained in this Agreement or any other Loan Document or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Arrangers or the Agents under or in connection with, this Agreement or
any other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of any Loan Party party thereto to perform its obligations
hereunder or thereunder. The Agents shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained
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in, or conditions of, this Agreement or any other Loan Document, or to inspect
the properties, books or records of any Loan Party.
9.4 Reliance by Agents. Each Agent shall be entitled to rely,
and shall be fully protected in relying, upon any instrument, writing,
resolution, notice, consent, certificate, affidavit, letter, telecopy, telex or
teletype message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to Holdings or the other Loan Parties), independent
accountants and other experts selected by such Agent. The Agents may deem and
treat the payee of any Note as the owner thereof for all purposes unless a
written notice of assignment, negotiation or transfer thereof shall have been
filed with the Administrative Agent. Each Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Required Lenders or the requisite Lenders required under Section 10.1 to
authorize or require such action (or, if so specified by this Agreement, all
Lenders) as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense that may
be incurred by it by reason of taking or continuing to take any such action.
Each Agent shall in all cases be fully protected in acting, or in refraining
from acting, under this Agreement and the other Loan Documents in accordance
with a request of the Required Lenders or the requisite Lenders under Section
10.1 to authorize or require such action (or, if so specified by this Agreement,
all Lenders), and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future holders of the
Loans and Letters of Credit.
9.5 Notice of Default. No Agent shall be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless such Agent has received notice from a Lender, Holdings or the
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event that
the Administrative Agent receives such a notice, the Administrative Agent shall
give notice thereof to the Lenders. The Administrative Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the requisite Lenders (or, if so specified by this Agreement, all
Lenders); provided that unless and until the Administrative Agent shall have
received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders.
9.6 Non-Reliance on Agents and Other Lenders. Each Lender
expressly acknowledges that neither the Arrangers, the Agents nor any of their
respective officers, directors, employees, agents, attorneys and other advisors,
partners, attorneys-in-fact or affiliates have made any representations or
warranties to it and that no act by any Arranger or any Agent hereinafter taken,
including any review of the affairs of a Loan Party or any affiliate of a Loan
Party, shall be deemed to constitute any representation or warranty by any
Arranger or any Agent to any Lender. Each Lender represents to the Arrangers and
the Agents that it has, independently and without reliance upon any Arranger or
any Agent or any other Lender, and based on such documents and information as it
has deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition, prospects and
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creditworthiness of the Loan Parties and their affiliates and made its own
decision to make its Loans (and in the case of the Issuing Lender, its Letters
of Credit) hereunder and enter into this Agreement. Each Lender also represents
that it will, independently and without reliance upon any Arranger or any 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 credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigation as it deems necessary
to inform itself as to the business, operations, property, financial and other
condition, prospects and creditworthiness of the Loan Parties and their
affiliates. Except for notices, reports and other documents expressly required
to be furnished to the Lenders by the Administrative Agent hereunder, neither
any Arranger nor any Agent shall have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness of
any Loan Party or any affiliate of a Loan Party that may come into the
possession of such Arranger or such Agent or any of its officers, directors,
employees, agents, attorneys and other advisors, partners, attorneys-in-fact or
affiliates.
9.7 Indemnification. The Lenders agree to indemnify each
Arranger and each Agent in its capacity as such (to the extent not reimbursed by
Holdings or the Borrower and without limiting the obligation of Holdings or the
Borrower to do so), ratably according to their respective Aggregate Exposure
Percentages in effect on the date on which indemnification is sought under this
Section (or, if indemnification is sought after the date upon which the
Commitments shall have terminated and the Loans shall have been paid in full,
ratably in accordance with such Aggregate Exposure Percentages immediately prior
to such date), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever that may at any time (including, without limitation, at
any time following the payment of the Loans) be imposed on, incurred by or
asserted against such Arranger or such Agent in any way relating to or arising
out of, the Commitments, this Agreement, any of the other Loan Documents, the
Acquisition Documentation or any documents contemplated by or referred to herein
or therein or the transactions contemplated hereby or thereby or any action
taken or omitted by such Arranger or such Agent under or in connection with any
of the foregoing; provided that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements that are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
solely and proximately from such Arranger's or such Agent's gross negligence or
willful misconduct in breach of a duty owed to such Lender. The agreements in
this Section 9.7 shall survive the payment of the Loans and Letters of Credit
and all other amounts payable hereunder.
9.8 Arrangers and Agents in Their Individual Capacities. Each
Arranger and each Agent and their respective affiliates may make loans to,
accept deposits from and generally engage in any kind of business with any Loan
Party as though such Arranger was not an Arranger and such Agent was not an
Agent. With respect to its Loans made or renewed by it and with respect to any
Letter of Credit issued or participated in by it, each Arranger and each Agent
shall have the same rights and powers under this Agreement and the other Loan
Documents as any Lender and may exercise the same as though it were not an
Arranger or an Agent, as the case
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may be, and the terms "Lender" and "Lenders" shall include each Arranger and
each Agent in their respective individual capacities.
9.9 Successor Agents. The Administrative Agent may resign as
Administrative Agent upon 15 days' notice to the Lenders and the Borrower. If
the Administrative Agent shall resign as Administrative Agent under this
Agreement and the other Loan Documents, then the Required Lenders shall appoint
from among the Lenders a successor agent for the Lenders, which successor agent
shall (unless an Event of Default under Section 8(a) or Section 8(f) with
respect to the Borrower shall have occurred and be continuing) be subject to
approval by the Borrower (which approval shall not be unreasonably withheld or
delayed), whereupon such successor agent shall succeed to the rights, powers and
duties of the Administrative Agent, and the term "Administrative Agent" shall
mean such successor agent effective upon such appointment and approval, and the
former Administrative Agent's rights, powers and duties as Administrative Agent
shall be terminated, without any other or further act or deed on the part of
such former Administrative Agent or any of the parties to this Agreement or any
holders of the Loans or Letters of Credit. If no successor agent has accepted
appointment as Administrative Agent by the date that is 15 days following a
retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become
effective, and the Lenders shall assume and perform all of the duties of the
Administrative Agent hereunder until such time, if any, as the Required Lenders
appoint a successor agent as provided for above. Each of the Syndication Agent
and the Documentation Agent may, at any time, by notice to the Lenders and the
Administrative Agent, resign as Syndication Agent or Documentation Agent, as
applicable, hereunder, whereupon the duties, rights, obligations and
responsibilities of such Agent hereunder shall automatically be assumed by, and
inure to the benefit of, the Administrative Agent, without any further act by
any Arranger, any Agent or any Lender. After any retiring Agent's resignation as
Agent, the provisions of this Section 9 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement and the other Loan Documents.
9.10 Authorization to Release Liens. The Administrative Agent
is hereby irrevocably authorized by each of the Lenders to release any Lien
covering any Property of the Borrower or any of its Subsidiaries that is the
subject of a Disposition which is permitted by this Agreement or which has been
consented to in accordance with Section 10.1.
9.11 The Arrangers and the Documentation Agent. The Arrangers
and the Documentation Agent, in their respective capacities as such, shall have
no duties or responsibilities, and shall incur no liability, under this
Agreement and the other Loan Documents.
9.12 Enforcement of Remedies. With respect to any action by
the Administrative Agent to enforce the rights and remedies of the
Administrative Agent and the Lenders under this Agreement and the other Loan
Documents with respect to Collateral located in the State of Illinois, each
Lender hereby consents to the jurisdiction of the court in which such action is
maintained (it being understood that such consent shall be limited to the extent
necessary to enforce the rights and remedies of the Administrative Agent for the
benefit of the Lenders under the applicable Loan Documents), and agrees to
deliver its Notes to the
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Administrative Agent to the extent necessary to enforce the rights and remedies
of the Administrative Agent for the benefit of the Lenders under the applicable
Loan Documents in accordance with the provisions hereof.
SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers. Neither this Agreement nor any
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
Section 10.1. The Required Lenders and each Loan Party party to the relevant
Loan Document may, or (with the written consent of the Required Lenders) the
Administrative Agent and each Loan Party party to the relevant Loan Document
may, from time to time, (a) enter into written amendments, supplements or
modifications hereto and to the other Loan Documents (including amendments and
restatements hereof or thereof) for the purpose of adding any provisions to this
Agreement or the other Loan Documents or changing in any manner the rights of
the Lenders or of the Loan Parties hereunder or thereunder or (b) waive, on such
terms and conditions as may be specified in the instrument of waiver, any of the
requirements of this Agreement or the other Loan Documents or any Default or
Event of Default and its consequences; provided, however, that no such waiver
and no such amendment, supplement or modification shall (i) forgive the
principal amount or extend the final scheduled date of maturity of any Loan or
Reimbursement Obligation, extend the scheduled date of any amortization payment
in respect of any Term Loan, reduce the stated rate of any interest or fee
payable hereunder or extend the scheduled date of any payment thereof, or
increase the amount or extend the expiration date of any Commitment of any
Lender, in each case without the consent of each Lender directly affected
thereby; (ii) amend, modify or waive any provision of this Section or reduce any
percentage specified in the definition of Required Lenders or Required
Prepayment Lenders, consent to the assignment or transfer by any Loan Party of
any of its rights and obligations under this Agreement and the other Loan
Documents, release all or substantially all of the Collateral or release all or
substantially all of the Subsidiary Guarantors from their guarantee obligations
under the Guarantee and Collateral Agreement, in each case without the consent
of all Lenders; (iii) amend, modify or waive any condition precedent to any
extension of credit under the Revolving Credit Facility set forth in Section 5.2
(including, without limitation, the waiver of an existing Default or Event of
Default required to be waived in order for such extension of credit to be made)
without the consent of the Majority Revolving Credit Facility Lenders; (iv)
reduce the percentage specified in the definition of Majority Facility Lenders
with respect to any Facility without the written consent of all Lenders under
such Facility; (v) amend, modify or waive any provision of Section 9 without the
consent of any Arranger or any Agent directly affected thereby; (vi) amend,
modify or waive any provision of Section 2.6 or Section 2.7 without the written
consent of the Swing Line Lender; (vii) amend, modify or waive any provision of
Section 2.12 or Section 2.18 without the consent of each Lender directly
affected thereby; or (viii) amend, modify or waive any provision of Section 3
without the consent of each Issuing Lender. Any such waiver and any such
amendment, supplement or modification shall apply equally to each of the Lenders
and shall be binding upon the Loan Parties, the Lenders, the Agents, the
Arrangers and all future holders of the Loans and Letters of Credit. In the case
of any waiver, the Loan Parties, the Lenders, the Arrangers and the Agents shall
be restored to their former position and rights hereunder and under the other
Loan Documents, and any Default or Event of Default waived shall be deemed to be
cured and not continuing; but no such waiver
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shall extend to any subsequent or other Default or Event of Default, or impair
any right consequent thereon. Any such waiver, amendment, supplement or
modification shall be effected by a written instrument signed by the parties
required to sign pursuant to the foregoing provisions of this Section; provided,
that delivery of an executed signature page of any such instrument by facsimile
transmission shall be effective as delivery of a manually executed counterpart
thereof. For the avoidance of doubt, this Agreement may be amended (or amended
and restated) with the written consent of the Required Lenders, the Arrangers,
the Administrative Agent, the Syndication Agent, Holdings and the Borrower (x)
to add one or more additional credit facilities to this Agreement and to permit
the extensions of credit from time to time outstanding thereunder and the
accrued interest and fees in respect thereof (collectively, the "Additional
Extensions of Credit") to share ratably in the benefits of this Agreement and
the other Loan Documents with the Term Loans and Revolving Extensions of Credit
and the accrued interest and fees in respect thereof and (y) to include
appropriately the Lenders holding such credit facilities in any determination of
the Required Lenders, Required Prepayment Lenders and Majority Revolving
Facility Lenders; provided, however, that no such amendment shall permit the
Additional Extensions of Credit to share ratably with or with preference to the
Term Loans in the application of mandatory prepayments without the consent of
the Required Prepayment Lenders or otherwise to share ratably with or with
preference to the Revolving Extensions of Credit without the consent of the
Majority Revolving Facility Lenders.
Notwithstanding anything to the contrary in this Section 10.1,
the parties to the Fee Letter may, (a) enter into written amendments,
supplements or modifications to the Fee Letter (including amendments and
restatements thereof) for the purpose of adding any provisions thereto or
changing in any manner the rights thereunder of the parties thereto or (b)
waive, on such terms and conditions as may be specified in the instrument of
waiver, (i) any of the requirements of the Fee Letter or (ii) any Default or
Event of Default to the extent (and only to the extent) relating to the Fee
Letter, it being understood that the waiver of any Default or Event of Default
(or portion thereof) relating to any of the other Loan Documents may be
accomplished only as set forth in the immediately preceding paragraph.
10.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed (a) in the case of Holdings, the Borrower, the Arrangers and
the Agents, as follows and (b) in the case of the Lenders, as set forth on
Schedule I to the Lender Addendum to which such Lender is a party or, in the
case of a Lender which becomes a party to this Agreement pursuant to an
Assignment and Acceptance, in such Assignment and Acceptance, or (c) in the case
of any party, to such other address as such party may hereafter notify to the
other parties hereto:
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Holdings: Buffets Holdings, Inc.
1460 Buffet Way
Eagan, Minnesota 55121
Attention: H. Thomas Mitchell
Telecopy: (651) 365-2356
Telephone: (651) 994-8608
The Borrower: Buffets, Inc.
1460 Buffet Way
Eagan, Minnesota 55121
Attention: H. Thomas Mitchell
Telecopy: (651) 365-2356
Telephone: (651) 994-8608
with a copy to: Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019
Attention: Eric S. Goodison
and
Caxton-Iseman Capital, Inc.
677 Madison Avenue
New York, New York 10019
Attention: Fred Iseman
The Administrative Agent: Lehman Commercial Paper Inc.
3 World Financial Center
New York, New York 10285
Attention: Andrew Keith
Telecopy: (212) 526-0242
Telephone: (212) 526-4059
with a copy to: Latham & Watkins
885 Third Avenue, Suite 1000
New York, New York 10022
Attention: Christopher R. Plaut
Telecopy: (212) 751-4864
Telephone: (212) 906-1200
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The Syndication Agent Fleet National Bank
100 Federal Street
Boston, Massachusetts 02110
Attention: J. Nicholas Cole
Telecopy: (617) 434-0637
Telephone: (617) 434-2174
with a copy to: Latham & Watkins
885 Third Avenue, Suite 1000
New York, New York 10022
Attention: Christopher R. Plaut
Telecopy: (212) 751-4864
Telephone: (212) 906-1200
The Arrangers: Lehman Brothers Inc.
3 World Financial Center
New York, New York 10285
Attention: Andrew Keith
Telecopy: (212) 526-0242
Telephone: (212) 526-4059
FleetBoston Robertson Stephens Inc.
100 Federal Street
Boston, Massachusetts 02110
Attention: J. Nicholas Cole
Telecopy: (617) 434-0637
Telephone: (617) 434-2174
with a copy to: Latham & Watkins
885 Third Avenue, Suite 1000
New York, New York 10022
Attention: Christopher R. Plaut
Telecopy: (212) 751-4864
Telephone: (212) 906-1200
The Documentation Agent First Union National Bank
301 South College Street
One First Union Center, DC-5
Charlotte, North Carolina 28288-0608
Attention: Jamie Johnson
Telecopy: (704) 383-0202
Telephone: (704) 715-1359
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Issuing Lender: As notified by the Issuing Lender to the
Administrative Agent and the Borrower
provided that any notice, request or demand to or upon any Agent or any Lender
shall not be effective until received.
10.3 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of any Arranger, any Agent or any
Lender, any right, remedy, power or privilege hereunder or under the other Loan
Documents shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
10.4 Survival of Representations and Warranties. All
representations and warranties made hereunder, in the other Loan Documents and
in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Loans and other extensions of credit hereunder.
10.5 Payment of Expenses. The Borrower agrees (a) to pay or
reimburse the Arrangers, the Administrative Agent and the Syndication Agent for
all their reasonable out-of-pocket costs and expenses incurred in connection
with the syndication of the Facilities (other than fees payable to syndicate
members) and the development, preparation and execution of, and any amendment,
supplement or modification to, this Agreement and the other Loan Documents and
any other documents prepared in connection herewith or therewith, and the
consummation and administration of the transactions contemplated hereby and
thereby, including, without limitation, the reasonable fees and disbursements
and other charges of counsel to each of the Arrangers, the Administrative Agent
and the Syndication Agent, (b) to pay or reimburse each Lender, each Arranger
and each Agent for all its costs and expenses incurred in connection with the
enforcement or preservation of any rights under this Agreement, the other Loan
Documents and any such other documents, including, without limitation, the fees
and disbursements of counsel (including the allocated fees and disbursements and
other charges of in-house counsel) to each Lender and of counsel to each
Arranger and each Agent, (c) to pay, indemnify, and hold each Lender, the
Arrangers and the Agents harmless from, any and all recording and filing fees
and any and all liabilities with respect to, or resulting from any delay in
paying, stamp, excise and other taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated by, or
any amendment, supplement or modification of, or any waiver or consent under or
in respect of, this Agreement, the other Loan Documents and any such other
documents, and (d) to pay, indemnify, and hold each Lender, each Arranger, each
Agent, their respective affiliates, and their respective officers, directors,
partners, trustees, employees, affiliates, shareholders, attorneys and other
advisors, agents, attorneys-in-fact and controlling persons (each, an
"Indemnitee") harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to or
arising out of the execution, delivery, enforcement, performance and
administration of this Agreement, the other Loan
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Documents and any such other documents, including, without limitation, any of
the foregoing relating to the use of proceeds of the Loans or Letters of Credit
or the violation of, noncompliance with or liability under, any Environmental
Law applicable to the operations of any Loan Party or any of the Properties and
the fees and disbursements and other charges of legal counsel in connection with
claims, actions or proceedings by any Indemnitee against the Borrower hereunder
(all the foregoing in this clause (d), collectively, the "Indemnified
Liabilities"), provided, that the Borrower shall have no obligation hereunder to
any Indemnitee with respect to Indemnified Liabilities to the extent such
Indemnified Liabilities are found by a final and nonappealable decision of a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of such Indemnitee in breach of a duty owed to the Borrower.
Without limiting the foregoing, and to the extent permitted by applicable law,
the Borrower agrees not to assert and to cause its Subsidiaries not to assert,
and hereby waives and agrees to cause its Subsidiaries so to waive, all rights
for contribution or any other rights of recovery with respect to all claims,
demands, penalties, fines, liabilities, settlements, damages, costs and expenses
of whatever kind or nature, under or related to Environmental Laws, that any of
them might have by statute or otherwise against any Indemnitee. All amounts due
under this Section shall be payable not later than five days after written
demand therefor. Statements payable by the Borrower pursuant to this Section
shall be submitted to the Borrower in accordance with Section 10.2, or to such
other Person or address as may be hereafter designated by the Borrower in a
written notice to the Administrative Agent. The agreements in this Section shall
survive repayment of the Loans and Letters of Credit and all other amounts
payable hereunder.
10.6 Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of Holdings,
the Borrower, the Lenders, the Arrangers, the Agents, all future holders of the
Loans and Letters of Credit and their respective successors and assigns, except
that neither Holdings nor the Borrower may assign or transfer any of their
respective rights or obligations under this Agreement without the prior written
consent of the Arrangers, the Administrative Agent, the Syndication Agent and
each Lender.
(b) Any Lender may, without the consent of the Borrower or any
other Person, in accordance with applicable law, at any time sell to one or more
banks, financial institutions or other entities (each, a "Participant")
participating interests in any Loan owing to such Lender, any Commitment of such
Lender or any other interest of such Lender hereunder and under the other Loan
Documents. In the event of any such sale by a Lender of a participating interest
to a Participant, such Lender's obligations under this Agreement to the other
parties to this Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender shall remain the
holder of any such Loan for all purposes under this Agreement and the other Loan
Documents, and the Borrower, the Arrangers and the Agents shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. In no event shall
any Participant under any such participation have any right to approve any
amendment or waiver of any provision of any Loan Document, or any consent to any
departure by any Loan Party therefrom, except to the extent that such amendment,
waiver or consent would reduce the principal of, or interest on, the Loans or
any fees payable hereunder, or
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postpone the date of the final maturity of the Loans, in each case to the extent
subject to such participation. The Borrower agrees that if amounts outstanding
under this Agreement and the Loans are due or unpaid, or shall have been
declared or shall have become due and payable upon the occurrence of an Event of
Default, each Participant shall, to the maximum extent permitted by applicable
law, be deemed to have the right of setoff in respect of its participating
interest in amounts owing under this Agreement to the same extent as if the
amount of its participating interest were owing directly to it as a Lender under
this Agreement, provided that, in purchasing such participating interest, such
Participant shall be deemed to have agreed to share with the Lenders the
proceeds thereof as provided in Section 10.7(a) as fully as if it were a Lender
hereunder. The Borrower also agrees that each Participant shall be entitled to
the benefits of Sections 2.19, 2.20 and 2.21 with respect to its participation
in the Commitments and the Loans outstanding from time to time as if it was a
Lender; provided that, in the case of Section 2.20, such Participant shall have
complied with the requirements of said Section and provided, further, that no
Participant shall be entitled to receive any greater amount pursuant to any such
Section than the transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred by such transferor Lender
to such Participant had no such transfer occurred.
(c) Any Lender (an "Assignor") may, in accordance with
applicable law and upon written notice to the Administrative Agent, at any time
and from time to time assign to any Lender or any Affiliate or Control
Investment Affiliate thereof or, with the consent of the Borrower (not to be
unreasonably withheld or delayed), the Administrative Agent and the Syndication
Agent and, in the case of any assignment of Revolving Credit Commitments, the
written consent of each Issuing Lender and the Swing Line Lender (which, in each
case, shall not be unreasonably withheld or delayed) (provided that no such
consent need be obtained by a Lehman Entity or Fleet Entity for a period of 120
days following the Closing Date), to an additional bank, financial institution
or other entity (an "Assignee") all or any part of its rights and obligations
under this Agreement pursuant to an Assignment and Acceptance, substantially in
the form of Exhibit E (an "Assignment and Acceptance"), executed by such
Assignee and such Assignor (and, where the consent of the Borrower, the
Administrative Agent, the Syndication Agent or an Issuing Lender or the Swing
Line Lender is required pursuant to the foregoing provisions, by the Borrower
and such other Persons) and delivered to the Administrative Agent for its
acceptance and recording in the Register; provided that no such assignment to an
Assignee (other than any Lender or any affiliate thereof) shall be in an
aggregate principal amount of less than $3,000,000 for Revolving Credit Loans
and Tranche A Term Loans and $1,000,000 for Tranche B Term Loans, or, after
giving effect thereto, result in such assigning Lender having a Commitment
and/or outstanding Loans in an aggregate amount of less than $3,000,000 for
Revolving Credit Loans and Tranche A Term Loans and $1,000,000 for Tranche B
Term Loans (other than in the case of an assignment of all of a Lender's
interests under this Agreement), unless otherwise agreed by the Borrower and the
Administrative Agent. Any such assignment need not be ratable as among the
Facilities. Upon such execution, delivery, acceptance and recording, from and
after the effective date determined pursuant to such Assignment and Acceptance,
(x) 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 with a Commitment and/or Loans as set forth therein, and (y) the
Assignor thereunder shall, to the extent provided in such Assignment and
Acceptance, be released from its obligations
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under this Agreement (and, in the case of an Assignment and Acceptance covering
all of an Assignor's rights and obligations under this Agreement, such Assignor
shall cease to be a party hereto). Notwithstanding any provision of this
Section, the consent of the Borrower shall not be required for any assignment
that occurs at any time when any Event of Default shall have occurred and be
continuing.
(d) The Administrative Agent shall, on behalf of the Borrower,
maintain at its address referred to in Section 10.2 a copy of each Assignment
and Acceptance delivered to it and a register (the "Register") for the
recordation of the names and addresses of the Lenders and the Commitment of, and
principal amount of the Loans owing to, each Lender from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, the Administrative Agent and the Lenders shall treat each
Person whose name is recorded in the Register as the owner of the Loans and any
Notes evidencing such Loans recorded therein for all purposes of this Agreement.
Any assignment of any Loan, whether or not evidenced by a Note, shall be
effective only upon appropriate entries with respect thereto being made in the
Register (and each Note shall expressly so provide). Any assignment or transfer
of all or part of a Loan evidenced by a Note shall be registered on the Register
only upon surrender for registration of assignment or transfer of the Note
evidencing such Loan, accompanied by a duly executed Assignment and Acceptance;
thereupon one or more new Notes in the same aggregate principal amount shall be
issued to the designated Assignee, and the old Notes shall be returned by the
Administrative Agent to the Borrower marked "canceled". The Register shall be
available for inspection by the Borrower or any Lender (with respect to any
entry relating to such Lender's Loans) at any reasonable time and from time to
time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an Assignor and an Assignee (and, in any case where the consent of any other
Person is required by Section 10.6(c), by each such other Person) together with
payment to the Administrative Agent of a registration and processing fee of
$3,500 (except that no such registration and processing fee shall be payable (y)
in connection with an assignment by or to a Lehman Entity or a Fleet Entity or
(z) in the case of an Assignee which is already a Lender or is an affiliate of a
Lender or a Person under common management with a Lender), the Administrative
Agent shall (i) promptly accept such Assignment and Acceptance and (ii) on the
effective date determined pursuant thereto record the information contained
therein in the Register and give notice of such acceptance and recordation to
the Borrower. On or prior to such effective date, the Borrower, at its own
expense, upon request, shall execute and deliver to the Administrative Agent (in
exchange for the Revolving Credit Note and/or applicable Term Notes, as the case
may be, of the assigning Lender) a new Revolving Credit Note and/or applicable
Term Notes, as the case may be, to such Assignee or its registered assigns in an
amount equal to the Revolving Credit Commitment and/or applicable Term Loans, as
the case may be, assumed or acquired by it pursuant to such Assignment and
Acceptance and, if the Assignor has retained a Revolving Credit Commitment
and/or Term Loans, as the case may be, upon request, a new Revolving Credit Note
and/or Term Notes, as the case may be, to the Assignor or its registered assigns
in an amount equal to the Revolving Credit Commitment and/or applicable Term
Loans, as the case may be, retained by it hereunder. Such new Note or Notes
shall be dated the Closing Date and shall otherwise be in the form of the Note
or Notes replaced thereby.
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(f) Notwithstanding anything to the contrary set forth above,
(i) any Lender may (without requesting the consent of the Borrower or the
Administrative Agent) pledge its Loans to a Federal Reserve Bank in support of
borrowings made by such Lender from such Federal Reserve Bank and (ii) any
Lender that is a fund that invests in bank loans may (without the consent of the
Borrower or the Administrative Agent) pledge all or a portion of its rights in
connection with this Agreement to the trustee for holders of obligations owed,
or securities issued, by such fund as security for such obligations or
securities; provided, that in each case, foreclosure or other exercise of
remedies by such Federal Reserve Bank or trustee shall be subject to the
provisions of this Section 10.6 regarding assignments in all respects. No pledge
described in the immediately proceeding clauses (i) and (ii) shall release such
Lender from its obligations hereunder.
10.7 Adjustments; Set-off. (a) Except to the extent that this
Agreement provides for payments to be allocated to a particular Lender or to the
Lenders under a particular Facility, if any Lender (a "Benefited Lender") shall
at any time receive any payment of all or part of the Obligations owing to it,
or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 8(f), or otherwise), in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in respect
of such other Lender's Obligations, such Benefited Lender shall purchase for
cash from the other Lenders a participating interest in such portion of each
such other Lender's Obligations, or shall provide such other Lenders with the
benefits of any such collateral, as shall be necessary to cause such Benefited
Lender to share the excess payment or benefits of such collateral ratably with
each of the Lenders; provided, however, that if all or any portion of such
excess payment or benefits is thereafter recovered from such Benefited Lender,
such purchase shall be rescinded, and the purchase price and benefits returned,
to the extent of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to
Holdings or the Borrower, any such notice being expressly waived by Holdings and
the Borrower to the extent permitted by applicable law, upon any amount becoming
due and payable by Holdings or the Borrower hereunder (whether at the stated
maturity, by acceleration or otherwise), to set off and appropriate and apply
against such amount any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such Lender or
any branch or agency thereof to or for the credit or the account of Holdings or
the Borrower, as the case may be. Each Lender agrees to notify promptly the
Borrower and the Administrative Agent after any such setoff and application made
by such Lender, provided that the failure to give such notice shall not affect
the validity of such setoff and application.
10.8 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts,
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument. Delivery of an executed signature page of this
Agreement by facsimile transmission shall be effective as
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delivery of a manually executed counterpart hereof. A set of the copies of this
Agreement signed by all the parties shall be lodged with the Borrower and the
Administrative Agent.
10.9 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.10 Integration. This Agreement and the other Loan Documents
represent the agreement of Holdings, the Borrower, the Agents, the Arrangers and
the Lenders with respect to the subject matter hereof (other than with respect
to certain syndication matters which may be agreed to among Holdings, the
Borrower and any of the Arrangers, the Administrative Agent, the Syndication
Agent and the Documentation Agent), and there are no promises, undertakings,
representations or warranties by any Arranger, any Agent or any Lender relative
to the subject matter hereof not expressly set forth or referred to herein or in
the other Loan Documents.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
10.12 Submission To Jurisdiction; Waivers. Each of Holdings
and the Borrower hereby irrevocably and unconditionally:
(a) submits for itself and its Property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the courts of
the State of New York, the courts of the United States of America for the
Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter have
to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient court and agrees
not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to Holdings or the Borrower, as the case may be, at its address
set forth in Section 10.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to sue in any other jurisdiction; and
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(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this Section any special, exemplary, punitive or
consequential damages.
10.13 Suretyship Waivers. Each of Holdings and the Borrower
hereby waives any and all defenses applicable or available to guarantors or
sureties whether arising as a result of the joint and several nature of the
obligations of Holdings and the Borrower hereunder or otherwise. Without
limiting the generality of the foregoing, the waivers of the Guarantors (as
defined in the Guarantee and Collateral Agreement) set forth in Section 2.5 of
the Guarantee and Collateral Agreement are hereby incorporated herein by this
reference mutatis mutandis and such waivers shall be deemed to be made by
Holdings and the Borrower hereunder as if such waivers had been expressly set
forth herein.
10.14 Acknowledgments. Each of Holdings and the Borrower
hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
(b) neither any Arranger, any Agent nor any Lender has any
fiduciary relationship with or duty to Holdings or the Borrower arising out
of or in connection with this Agreement or any of the other Loan Documents,
and the relationship between the Arrangers, the Agents and Lenders, on one
hand, and Holdings and the Borrower, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Arrangers, the Agents and the Lenders or among Holdings,
the Borrower and the Lenders.
10.15 Confidentiality. Each of the Arrangers, the Agents and
the Lenders agrees to keep confidential all non-public information provided to
it by any Loan Party pursuant to this Agreement; provided that nothing herein
shall prevent any Arranger, any Agent or any Lender from disclosing any such
information (a) to any Arranger, any Agent, any other Lender or any affiliate of
any thereof, (b) to any Participant or Assignee (each, a "Transferee") or
prospective Transferee that agrees to comply with the provisions of this
Section, (c) to any of its employees, directors, agents, attorneys, accountants
and other professional advisors, (d) to any financial institution that is a
direct or indirect contractual counterparty in swap agreements or such
contractual counterparty's professional advisor (so long as such contractual
counterparty or professional advisor to such contractual counterparty agrees to
be bound by the provisions of this Section), (e) upon the request or demand of
any Governmental Authority having jurisdiction over it, (f) in response to any
order of any court or other Governmental Authority or as may otherwise be
required pursuant to any Requirement of Law, (g) if requested or required to do
so in connection with any litigation or similar proceeding, (h) that has been
publicly disclosed other than in breach of this Section, (i) to the National
Association of Insurance Commissioners or any similar organization or any
nationally recognized rating agency that requires access to information about a
Lender's investment portfolio in connection with ratings issued with respect
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to such Lender or (j) in connection with the exercise of any remedy hereunder or
under any other Loan Document.
10.16 Release of Collateral and Guarantee Obligations. (a)
Notwithstanding anything to the contrary contained herein or in any other Loan
Document, upon request of the Borrower in connection with any Disposition of
Property permitted by the Loan Documents, the Administrative Agent shall
(without notice to or vote or consent of any Lender, or any affiliate of any
Lender that is a party to any Specified Hedge Agreement) take such actions as
shall be required to release its security interest in any Collateral being
Disposed of in such Disposition, and to release any guarantee obligations of any
Person being Disposed of in such Disposition, to the extent necessary to permit
consummation of such Disposition in accordance with the Loan Documents provided
that the Borrower shall have delivered to the Administrative Agent, at least ten
Business Days prior to the date of the proposed release, a written request for
release identifying the relevant Collateral being Disposed of in such
Disposition and the terms of such Disposition in reasonable detail, including
the date thereof, the price thereof and any expenses in connection therewith,
together with a certification by the Borrower stating that such transaction is
in compliance with this Agreement and the other Loan Documents and that the
proceeds of such Disposition will be applied in accordance with this Agreement
and the other Loan Documents.
(b) Notwithstanding anything to the contrary contained herein
or any other Loan Document, when all outstanding Obligations (other than
Obligations in respect of any Specified Hedge Agreement) have been paid in full
(excluding Obligations in respect of unmatured contingent reimbursement and
indemnification obligations), all Commitments have terminated or expired and no
Letter of Credit shall be outstanding (or arrangements satisfactory to the
Issuing Lender shall have been made), upon request of the Borrower, the
Administrative Agent shall (without notice to or vote or consent of any Lender,
or any affiliate of any Lender that is a party to any Specified Hedge Agreement)
take such actions (including such actions reasonably necessary to terminate
Uniform Commercial Code and other filings) as shall be required to release its
security interest in all Collateral, and to release all guarantee obligations
provided for in any Loan Document, whether or not on the date of such release
there may be outstanding Obligations in respect of any Specified Hedge
Agreement, all at the expense of the Borrower.
10.17 Accounting Changes. In the event that any "Accounting
Change" (as defined below) shall occur and such change results in a change in
the method of calculation of financial covenants, standards or terms in this
Agreement, then Holdings, the Borrower and the Administrative Agent agree to
enter into negotiations in order to amend such provisions of this Agreement so
as to equitably reflect such Accounting Changes with the desired result that the
criteria for evaluating Holdings' and the Borrower's financial condition shall
be the same after such Accounting Changes as if such Accounting Changes had not
been made. Until such time as such an amendment shall have been executed and
delivered by Holdings, the Borrower, the Administrative Agent and the Required
Lenders, all financial covenants, standards and terms in this Agreement shall
continue to be calculated or construed as if such Accounting Changes had not
occurred. "Accounting Changes" refers to changes in accounting principles
required or permitted by the promulgation of any rule, regulation, pronouncement
or opinion by the
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Financial Accounting Standards Board of the American Institute of Certified
Public Accountants or, if applicable, the SEC.
10.18 Delivery of Lender Addenda. Each initial Lender shall
become a party to this Agreement by delivering to the Administrative Agent and
the Syndication Agent a Lender Addendum duly executed by such Lender, Holdings,
the Borrower and each Agent.
10.19 Construction. Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision herein refers to action
to be taken by any Person, or which such Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such Person.
10.20 WAIVERS OF JURY TRIAL. HOLDINGS, THE BORROWER, THE
ARRANGERS, THE AGENTS AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
BUFFETS HOLDINGS, INC.
By:
s/ R. Michael Andrews
-----------------------------
Name: R. Michael Andrews
Title: Chief Financial Officer
BUFFETS, INC.,
as Borrower
By:
s/ R. Michael Andrews
-----------------------------
Name: R. Michael Andrews
Title: Chief Financial Officer
LEHMAN BROTHERS INC.,
as Co-Arranger
By:
s/ G. Andrew Keith
-----------------------------
Name: G. Andrew Keith
Title: Senior Vice President
FLEETBOSTON ROBERTSON STEPHENS, INC.,
as Co-Arranger
By:
s/ Cristin M. O'Hara
-----------------------------
Name: Cristin M. O'Hara
Title: Vice President
<PAGE> 119
LEHMAN COMMERCIAL PAPER INC., as
Administrative Agent
By:
s/ G. Andrew Keith
-----------------------------
Name: G. Andrew Keith
Title: Senior Vice President
FLEET NATIONAL BANK, as
Syndication Agent
By:
s/ J. Nicholas Cole
-----------------------------
Name: J. Nicholas Cole
Title: Director
FIRST UNION NATIONAL BANK, as
Documentation Agent
By:
s/ Christopher Holtz
-----------------------------
Name: Christopher Holtz
Title: Authorized Signatory
