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Exhibit 10(c)
CREDIT AGREEMENT
among
CEC ENTERTAINMENT, INC.,
as the Borrower,
BANK ONE, TEXAS, NATIONAL ASSOCIATION,
as the administrative agent (the "Agent"),
SUNTRUST BANK,
as the syndication agent,
and
the Lenders party hereto
dated as of
July 14, 2000
BANC ONE CAPITAL MARKETS, INC.
Lead Arranger and Sole Book Manager
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TABLE OF CONTENTS
ARTICLE 1 - Definitions 1
Section 1.1 Definitions 1
Section 1.2 Other Interpretive Provisions 16
Section 1.3 Accounting Terms and Determinations 17
Section 1.4 Time of Day 18
ARTICLE 2 - Credit Facility 18
Section 2.1 Commitments 18
Section 2.2 Notes 18
Section 2.3 Repayment of Loan 19
Section 2.4 Use of Proceeds 19
Section 2.5 Termination or Reduction of Commitments 19
Section 2.6 Letters of Credit 19
Section 2.7 Extension of Maturity Date 22
ARTICLE 3 - Interest and Fees
23
Section 3.1 Interest Rate
Section 3.2 Determinations of Margins and Commitment
Fee Rate 23
Section 3.3 Payment Dates 24
Section 3.4 Default Interest 24
Section 3.5 Conversions and Continuations of Balances 24
Section 3.6 Commitment Fee 24
Section 3.7 Letter of Credit Fees 24
Section 3.8 Administrative Fee 25
Section 3.9 Computations 25
ARTICLE 4 - Administrative Matters 25
Section 4.1 Borrowing Procedure 25
Section 4.2 Minimum Amounts 25
Section 4.3 Certain Notices 26
Section 4.4 Prepayments 27
Section 4.5 Method of Payment 28
Section 4.6 Pro Rata Treatment 28
Section 4.7 Sharing of Payments 29
Section 4.8 Non Receipt of Funds by the Agent. 29
Section 4.9 Participation Obligations Absolute;
Failure to Fund Participation 30
ARTICLE 5 - Change in Circumstances 30
Section 5.1 Increased Cost and Reduced Return 30
Section 5.2 Limitation on LIBOR Balances 32
Section 5.3 Illegality 32
Section 5.4 Treatment of Affected Balances 32
Section 5.5 Compensation 33
Section 5.6 Taxes 34
Section 5.7 Withholding Tax Exemption 35
Section 5.8 Replacement of Lender 35
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ARTICLE 6 - Guaranties 36
Section 6.1 Guaranties 36
Section 6.2 New Guarantors 36
ARTICLE 7 - Conditions Precedent 37
Section 7.1 Initial Loans and Letters of Credit 37
Section 7.2 All Advances and Letters of Credit 39
ARTICLE 8 - Representations and Warranties 40
Section 8.1 Existence, Power, and Authority 40
Section 8.2 Financial Condition 41
Section 8.3 Corporate and Similar Action; No Breach 41
Section 8.4 Operation of Business 41
Section 8.5 Litigation and Judgments 41
Section 8.6 Rights in Properties; Liens 42
Section 8.7 Enforceability 42
Section 8.8 Approvals 42
Section 8.9 Debt 42
Section 8.10 Taxes 42
Section 8.11 Margin Securities 42
Section 8.12 ERISA 43
Section 8.13 Disclosure 43
Section 8.14 Subsidiaries; Capitalization 43
Section 8.15 Agreements 44
Section 8.16 Compliance with Laws 44
Section 8.17 Investment Company Act 44
Section 8.18 Public Utility Holding Company Act 44
Section 8.19 Environmental Matters 44
Section 8.20 Broker's Fees 45
Section 8.21 Employee Matters 45
Section 8.22 Solvency 45
ARTICLE 9 - Affirmative Covenants 46
Section 9.1 Reporting Requirements 46
Section 9.2 Maintenance of Existence; Conduct of Business 48
Section 9.3 Maintenance of Properties 48
Section 9.4 Taxes and Claims 48
Section 9.5 Insurance 49
Section 9.6 Inspection Rights 50
Section 9.7 Keeping Books and Records 50
Section 9.8 Compliance with Laws 50
Section 9.9 Compliance with Agreements 51
Section 9.10 Further Assurances 51
Section 9.11 ERISA 51
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ARTICLE 10 - Negative Covenants 51
Section 10.1 Debt 51
Section 10.2 Limitation on Liens and Restrictions on
Subsidiaries 52
Section 10.3 Mergers, Etc 53
Section 10.4 Restricted Payments 54
Section 10.5 Investments 55
Section 10.6 Limitation on Issuance of Capital Stock of
Subsidiaries 56
Section 10.7 Transactions With Affiliates 56
Section 10.8 Disposition of Assets 56
Section 10.9 Lines of Business 57
Section 10.10 Limitations on Restrictions Affecting the
Borrower and its Subsidiaries 57
Section 10.11 Environmental Protection 57
Section 10.12 ERISA 57
ARTICLE 11 - Financial Covenants 58
Section 11.1 Leverage Ratio 58
Section 11.2 Fixed Charge Coverage Ratio 58
Section 11.3 Minimum Net Worth 58
Section 11.4 Capital Expenditures 58
ARTICLE 12 - Default 58
Section 12.1 Events of Default 58
Section 12.2 Remedies 61
Section 12.3 Cash Collateral 61
Section 12.4 Performance by the Agent 62
Section 12.5 Set-off 62
Section 12.6 Continuance of Default 62
ARTICLE 13 - Agent 62
Section 13.1 Appointment and Authorization 62
Section 13.2 Delegation of Duties 63
Section 13.3 Liability of the Agent 63
Section 13.4 Reliance By the Agent 64
Section 13.5 Notice of Default 64
Section 13.6 Rights as Lender 64
Section 13.7 Credit Decision 65
Section 13.8 Indemnification 65
Section 13.9 Successor Agent 66
Section 13.10 Withholding Tax 67
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ARTICLE 14 - Miscellaneous 68
Section 14.1 Expenses 68
Section 14.2 Indemnification 69
Section 14.3 Limitation of Liability 70
Section 14.4 No Duty 70
Section 14.5 No Fiduciary Relationship 70
Section 14.6 Equitable Relief 70
Section 14.7 No Waiver; Cumulative Remedies 70
Section 14.8 Successors and Assigns 71
Section 14.9 Survival 73
Section 14.10 Entire Agreement 73
Section 14.11 Amendments and Waivers 73
Section 14.12 Maximum Interest Rate 74
Section 14.13 Notices 75
Section 14.14 Governing Law; Venue; Service of Process 76
Section 14.15 Counterparts 76
Section 14.16 Severability 76
Section 14.17 Headings 76
Section 14.18 Non-Application of Chapter 15 of
Texas Credit Code 76
Section 14.19 Construction 76
Section 14.20 Independence of Covenants 77
Section 14.21 Waiver of Jury Trial 77
Section 14.22 Confidentiality 77
Section 14.23 Nonreliance on Margin Stock 77
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INDEX TO EXHIBITS
EXHIBIT A Form of Note
EXHIBIT B Form of Assignment and Acceptance
EXHIBIT C Form of Compliance Certificate
EXHIBIT D Form of Subsidiary Guaranty
EXHIBIT E Form of Notice of Borrowings, Conversions,
Continuations, or Prepayments
EXHIBIT F Form of Joinder Agreement
EXHIBIT G Current Form of Letter of Credit Agreement
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INDEX TO SCHEDULES
SCHEDULE 8.4 Operation of Business
SCHEDULE 8.5 Litigation and Judgments
SCHEDULE 8.6 Locations
SCHEDULE 8.9 Debt
SCHEDULE 8.10 Taxes
SCHEDULE 8.12 ERISA Matters
SCHEDULE 8.14 Subsidiaries; Capitalization
SCHEDULE 8.15 Material Agreements
SCHEDULE 8.19 Environmental Matters
SCHEDULE 8.20 Broker's Fees
SCHEDULE 8.21 Employee Matters
SCHEDULE 10.2 Permitted Liens
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT ("Agreement"), dated as of July 14, 2000, is among
CEC ENTERTAINMENT, INC., a corporation duly organized and validly existing under
the laws of the State of Kansas (the "Borrower"), each of the banks or other
lending institutions which is (or which may from time to time become) a party
hereto or any successor or assignee thereof pursuant to Section 14.8(b)
(individually, a "Lender" and, collectively, the "Lenders"), and BANK ONE,TEXAS,
NATIONAL ASSOCIATION, a national banking association, as the Fronting Bank (as
defined below) and as administrative agent for the Lenders (in its capacity as
administrative agent, together with its successors in such capacity, the
"Agent").
R E C I T A L S:
A. The Borrower has requested that the Lenders extend a $75,000,000
unsecured credit facility to the Borrower in the form of a revolving credit
facility for the purpose of financing capital expenditures, repurchases of the
Borrower's capital stock, and other general corporate purposes and working
capital.
B. The Lenders are willing to extend such credit to the Borrower upon
the terms and conditions set forth in this Agreement and the other Loan
Documents.
NOW THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE 1
Definitions
Section 1.1 Definitions. Wherever used in this Agreement, the
following terms have the following meanings:
"Adjusted LIBOR Rate" means, for any LIBOR Balance for any Interest
Period therefor, the rate per annum (expressed as a decimal) determined by the
Agent to be equal to the quotient obtained by dividing (a) the LIBOR Rate for
such LIBOR Balance for such Interest Period by (b) one (1) minus the Reserve
Requirement for such LIBOR Balance for such Interest Period.
"Affected Balances" has the meaning specified in Section 5.4.
"Affected LIBOR Balances" has the meaning specified in Section 5.5.
"Affiliate" means, with respect to any Person, any other Person (a) that
directly or indirectly, through one or more intermediaries, controls or is
controlled by, or is under common control with, such Person; (b) that directly
or indirectly beneficially owns or holds ten percent (10%) or more of any
class of Capital Stock of such Person; or (c) ten percent (10%) or more of the
Capital Stock of which is directly or indirectly beneficially owned or held by
the Person in question. As used in this definition, the term "control" means
the possession, directly or indirectly, of the power to direct or cause
direction of the management and policies of a Person, whether through the
ownership of Capital Stock, by contract, or otherwise; provided, however, in
no event shall the Agent, the Fronting Bank, or any Lender be deemed an
Affiliate of the Borrower or any Subsidiary of the Borrower.
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"Agent" has the meaning specified in the introductory paragraph of this
Agreement.
"Agent-Related Persons" means the Agent, each of the Agent's Affiliates
(including, without limitation, Banc One Capital Markets, Inc.), and each of
their respective officers, directors, employees, and agents.
"Agent's Letter" means the certain letter agreement dated as of the
Closing Date between the Borrower and the Agent.
"Agreement" has the meaning specified in the introductory paragraph of
this Agreement, as the same may be amended, restated, or otherwise modified.
"Applicable Lending Office" means, for each Lender and for each Type of
Balance, the "Lending Office" of such Lender (or of an Affiliate of such
Lender) designated for such Type of Balance on the signature pages hereof (or,
with respect to a Lender that becomes a party to this Agreement pursuant to an
assignment made in accordance with Section 14.8, in the Assignment and
Acceptance executed by it) or such other office of such Lender (or an
Affiliate of such Lender) as such Lender may from time to time specify to the
Agent and the Borrower by written notice in accordance with the terms hereof
as the office by which advances of such Type of Balance are to be made and
maintained.
"Applicable Rate" has the meaning specified in Section 3.1.
"Asset Disposition" means, with respect to any Person, the disposition,
whether a sale (including, without limitation, any sale/lease-back
arrangement), lease, assignment, transfer, or other voluntary disposition of
any asset of such Person (including, without limitation, the sale or other
disposition of any Capital Stock of any Subsidiary of such Person but excludes
any such transaction among any of the Borrower and its Subsidiaries) other
than sales of inventory in the ordinary course of business.
"Assignment and Acceptance" means an assignment and acceptance, in
substantially the form of Exhibit B, entered into by a Lender and an Eligible
Assignee pursuant to Section 14.8(b) and accepted by the Borrower (if
required) and the Agent.
"Attorney Costs" means, with respect to any Person, all reasonable fees,
expenses, and disbursements of any outside law firm or other outside counsel
engaged by such Person.
"Balance" means either the Prime Rate Balance or a LIBOR Balance.
"Bank One" means Bank One, Texas, National Association, and its
successors and assigns.
"Bankruptcy Code" has the meaning specified in Section 12.1(e).
"Borrower" has the meaning specified in the introductory paragraph of
this Agreement.
"Business Day" means (a) any day excluding Saturday, Sunday, and any day
on which any branch of the Federal Reserve System is closed, and (b), with
respect to all borrowings, payments, Conversions, Continuations, Interest
Periods, and notices in connection with any LIBOR Balance, any day which is a
Business Day described in clause (a) above and which is also a day on which
dealings in Dollar deposits are carried out in the London interbank market.
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"Capital Expenditures" means, for any period, all expenditures of the
Borrower and its Subsidiaries which are classified as capital expenditures in
accordance with GAAP (excluding specifically any such expenditures which
constitute Permitted Acquisitions), including, without limitation, the
aggregate amount of all such expenditures incurred during such period which
constitute Capital Lease Obligations.
"Capital Lease Obligations" means, as to any Person, the obligations of
such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real and/or personal Property, which obligations
are classified and accounted for as a capital lease on a balance sheet of such
Person in accordance with GAAP. For purposes of this Agreement, the amount of
such Capital Lease Obligations shall be the capitalized amount thereof,
determined in accordance with GAAP.
"Capital Stock" means corporate stock and any and all shares, partnership
interests, limited liability company interests, membership interests, equity
interests, participations, rights, securities, or other equivalent evidences
(however designated) of ownership, or any options, warrants, voting trust
certificates, or other instruments evidencing an ownership interest or a right
to acquire an ownership interest in a Person (however designated) issued by
any entity (whether a corporation, partnership, limited liability company, or
other type of entity).
"Change of Control" means the acquisition by any Person or by two or more
Persons acting as a group (as defined in Section 13d-3 of the Securities
Exchange Act of 1934) of beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities Exchange
Act of 1934) of 25.0% or more of the outstanding shares of Voting Stock of the
Borrower.
"Closing Date" means the date of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended, and the
regulations promulgated and rulings issued thereunder.
"Commitment" means, as to each Lender, the obligation of such Lender to
make advances of funds and purchase participation interests in (or with
respect to the Fronting Bank as a Lender,hold other interests in) Letters of
Credit in an aggregate principal amount at any one time outstanding up to but
not exceeding the amount set forth opposite the name of such Lender on the
signature pages hereto (or if applicable, the most recent Assignment and
Acceptance executed by such Lender) under the heading "Commitment", as the
same may be reduced or terminated pursuant to Section 2.5 or Section 12.2.
The aggregate amount of the Commitments as of the Closing Date equals
seventy-five million Dollars ($75,000,000).
"Commitment Fee Rate" has the meaning specified in Section 3.2.
"Commitment Percentage" means, with respect to each Lender, the
percentage equivalent (carried to eight (8) decimal places) of a fraction, the
numerator of which is the aggregate amount of the Commitment of such Lender
(or if such Commitment has terminated or expired, the outstanding principal
amount of the Loan (and, if applicable, Letter of Credit Liabilities) of such
Lender with respect thereto), and the denominator of which is the aggregate
amount of the Commitments of all of the Lenders (or if such Commitments have
terminated or expired, the outstanding principal amount of the Loans (and, if
applicable, Letter of Credit Liabilities) of all of the Lenders with respect
thereto).
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"Compliance Certificate" means a certificate in substantially the form of
Exhibit C, properly completed and executed by the chief executive officer or
chief financial officer of the Borrower.
"Continue", "Continuation", and "Continued" shall refer to the
continuation pursuant to Section 3.5 of a LIBOR Balance from one Interest
Period to the next Interest Period.
"Contract Rate" has the meaning specified in Section 14.12(a).
"Convert", "Conversion", and "Converted" shall refer to a conversion
pursuant to Section 3.5 or Article 5 of one Type of Balance into another Type
of Balance.
"Debt" means, with respect to any Person at any time (without
duplication): (a) all obligations of such Person for borrowed money; (b) all
obligations of such Person evidenced by bonds, notes, debentures, or other
similar instruments; (c) all obligations of such Person to pay the deferred
purchase price of property or services, except trade accounts payable of such
Person arising in the ordinary course of business that are not past due by
more than ninety (90) days or that are being contested in good faith by
appropriate proceedings diligently pursued and for which adequate reserves
have been established in accordance with GAAP; (d) all Capital Lease
Obligations of such Person; (e) Guarantees by such Person; (f) all
indebtedness, liabilities, and obligations of the types described in the
foregoing clauses (a) through (e) secured by a Lien existing on Property owned
by such Person, whether or not the indebtedness, liabilities, and obligations
secured thereby have been assumed by such Person or are non-recourse to such
Person; provided, however, that the amount of such Debt of any Person
described in this clause (f) shall, for purposes of this Agreement, be deemed
to be equal to the lesser of (i) the aggregate unpaid amount of such Debt or
(ii) the fair market value of the Property encumbered; (g) all reimbursement
obligations of such Person (whether contingent or otherwise) in respect of
letters of credit, bankers' acceptances, surety or other bonds, and similar
instruments (including, without limitation, those outstanding with respect to
Letters of Credit, but excluding letters of credit or bonds relating to
obligations arising in the ordinary course of business which otherwise
constitute Debt); (h) all liabilities of such Person in respect of unfunded
vested benefits under any Plan (excluding obligations to deliver stock in
respect of stock options or stock ownership plans); (i) all vested obligations
of such Person for the payment of money under any earn-out, non-compete,
consulting, or similar arrangements providing for the deferred payment of the
purchase price for any property to the extent that any such obligations are,
according to GAAP, reflected as a capitalized liability on a balance sheet of
such Person; (j) all obligations of such Person to redeem or retire shares of
Capital Stock of such Person; (k) all indebtedness, liabilities, and
obligations of such Person under any Hedge Agreement; and (l) the principal
balance outstanding under any synthetic lease, tax retention operating lease,
off balance sheet loan, or similar off balance sheet financing product to
which such Person is a party, where such transaction is considered borrowed
money indebtedness for tax purposes but is classified as an operating lease in
accordance with GAAP. The Debt of any Person shall include the Debt of any
partnership or joint venture in which such Person is a general partner or a
joint venturer, but only to the extent to which there is recourse to such
Person for payment of such Debt.
"Default" means an Event of Default or the occurrence of an event or
condition which with notice or lapse of time or both will become an Event of
Default.
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"Default Rate" means, in respect of any principal of any Loan, any
Reimbursement Obligation, or any other amount payable by the Borrower under
any Loan Document, a rate per annum equal to the sum of two percent (2.00%),
plus the Applicable Rate for the Prime Rate Balance as in effect from time to
time (provided, that for amounts outstanding as LIBOR Balances, the "Default
Rate" for such principal shall be two percent (2.00%), plus the Applicable
Rate for each LIBOR Balance for the remainder of the applicable Interest
Period as provided in Section 3.1, and, thereafter, the rate provided for
above in this definition).
"Dollars" and "$" mean lawful money of the U.S.
"EBITDA" means, for any period, the total of the following calculated for
the Borrower, without duplication, on a consolidated basis for such period:
(a) Net Income; plus (b) any provision for (or less any benefit from) income
or franchise taxes to the extent included in the determination of Net Income;
plus (c) Interest Expense to the extent included in the determination of Net
Income; plus (d) amortization and depreciation expense to the extent included
in the determination of Net Income; plus (e) other non-cash, non-recurring
charges to the extent included in the determination of Net Income; minus (f)
other non-recurring gains to the extent included in the determination of Net
Income.
"EBITDAR" means, for any period, the total of the following calculated
for the Borrower, without duplication, on a consolidated basis for such
period: (a) EBITDA; plus (b) all lease and rent expense for any real or
personal Property to the extent included in the determination of Net Income.
"Eligible Assignee" has the meaning specified in Section 14.8(b)(i).
"Environmental Laws" means any and all federal, state, and local laws,
regulations, and requirements regulating health, safety, or the environment,
as such laws, regulations, and requirements may be amended or supplemented
from time to time.
"Environmental Liabilities" means, as to any Person, all indebtedness,
liabilities, obligations, responsibilities, Remedial Actions, losses, damages,
punitive damages, consequential damages, treble damages, costs, and expenses
(including, without limitation, all reasonable fees, disbursements, and
expenses of counsel, expert and consulting fees, and costs of investigation
and feasibility studies), fines, penalties, sanctions, and interest incurred
as a result of any claim or demand, by any Person, whether based in contract,
tort, implied or express warranty, strict liability, or criminal or civil
statute, including, without limitation, any Environmental Law, Permit, order,
or agreement with any Governmental Authority or other Person, arising from
environmental, health, or safety conditions, or the Release or threatened
Release of a Hazardous Material into the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations and published interpretations
thereunder.
"ERISA Affiliate" means any corporation or trade or business which is a
member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as the Borrower or any Subsidiary of the Borrower
or is under common control (within the meaning of Section 414(c) of the Code)
with the Borrower or any Subsidiary of the Borrower.
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"Event of Default" has the meaning specified in Section 12.1.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1.00%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers on such day, as
published for such day (or, if such day is not a Business Day, for the
immediately preceding 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 at approximately 10:00 a.m. (Dallas, Texas time) on
such day on such transactions received by the Agent from three (3) Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.
"Fiscal Period" means one of the three fiscal periods in a Fiscal Quarter
each of which is approximately one calendar month in duration. There are
twelve (12) Fiscal Periods in a Fiscal Year.
"Fiscal Quarters" means one of four thirteen (13) week or, if applicable,
fourteen (14) week quarters in a Fiscal Year, with the first of such quarters
beginning on the first day of a Fiscal Year and ending on the Sunday of the
thirteenth(or fourteenth, if applicable) week in such quarter.
"Fiscal Year" means the Borrower's fiscal year for financial accounting
purposes beginning on the Monday following the Sunday nearest December 31 of
each year and ending on the Sunday nearest December 31 of the following year.
The current Fiscal Year of the Borrower will end on December 31, 2000 and the
two following Fiscal Years will end on December 30, 2001 and December 29,
2002, respectively.
"Fixed Charge Coverage Ratio" means, for any period and determined on a
consolidated basis for the Borrower and its Subsidiaries, the ratio of (a)
EBITDAR for such period minus the sum of (i) Maintenance Capital Expenditures,
to (b) the sum of (i) current maturities on long term Debt (including Capital
Leases), plus, (ii) income and franchise taxes actually paid during such
period, plus (iii) Interest Expense for such period, plus (iv) dividends (to
the extent actually paid during such period, plus (v) all lease and rent
expense to the extent included in the determination of EBITDAR.
"Fronting Bank" means Bank One or such other Lender which is a commercial
bank as Borrower and Bank One may mutually designate from time to time which
agrees to be the issuer of a Letter of Credit.
"Funded Debt" means Debt described in clauses (a), (b), (c), (d), (e),
(f), (g), (j), and (l) of the definition of Debt.
"GAAP" means generally accepted accounting principles, applied on a
"consistent basis" (as such phrase is interpreted in accordance with Section
1.3), as set forth in Opinions of the Accounting Principles Board of the
American Institute of Certified Public Accountants and/or in statements of the
Financial Accounting Standards Board and/or their respective successors and
which are applicable in the circumstances as of the date in question.
"Governmental Authority" means any nation or government, any federal,
state, county, municipal, parish, provincial, township, or other political
subdivision thereof, and any department, commission, board, court, agency, or
other instrumentality or entity exercising executive, legislative, judicial,
regulatory, or administrative functions of or pertaining to government.
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"Guarantee" means any indebtedness, liability, or obligation, contingent
or otherwise, of any Person directly or indirectly guaranteeing any Debt or
other obligation of any other Person or indemnifying such other Person for any
Debt or other obligation and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of
such Person (a) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Debt or other obligation (whether arising by
virtue of partnership arrangements, by agreement to keep-well, to purchase
assets, goods, securities or services, to take-or-pay, or to maintain
financial statement conditions or otherwise) or (b) entered into for the
purpose of assuring in any other manner the obligee of such Debt or other
obligation of the payment thereof or to protect the obligee against loss in
respect thereof (in whole or in part), provided that the term Guarantee shall
not include endorsements for collection or deposit in the ordinary course of
business. The amount of any Guarantee shall be deemed to be equal to the
lesser of (y) an amount equal to the stated or determinable amount of the
primary obligation in respect of which such Guarantee is made or (z) the
maximum amount for which such guaranteeing Person may be liable pursuant to
the terms of the instrument embodying such Guarantee, 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 shall be such guaranteeing Person's maximum reasonably anticipated
liability in respect thereof as mutually determined by the Borrower and the
Agent in good faith. The term "Guarantee" used as a verb has a corresponding
meaning.
"Guarantor" means any Person who is or becomes a party to any Guaranty of
the Obligations or any part thereof.
"Guaranty" means the Subsidiary Guaranty or any other guaranty agreement
executed and delivered by a Person in favor of the Agent, for the benefit of
the Agent and the Lenders, and any and all amendments, restatements, or other
modifications thereof, and "Guaranties" means all of such agreements,
collectively.
"Hazardous Material" means any substance, product, waste, pollutant,
chemical, contaminant, insecticide, pesticide, constituent, or material which
is or becomes listed, regulated, or addressed under any Environmental Law as a
result of its hazardous or toxic nature.
"Hedge Agreement" means any agreement, device, or arrangement designed to
protect a Person from the fluctuations of interest rates, exchange rates, or
forward rates applicable to its assets, liabilities, or exchange transactions,
including, but not limited to, dollar-denominated or cross-currency interest
rate exchange agreements, forward currency exchange agreements, interest rate
cap, swap, or collar protection agreements, and forward rate currency or
interest rate options, as the same may be amended or modified and in effect
from time to time, and any cancellation, buy-back, reversal, termination, or
assignment of any of the foregoing.
"Intellectual Property" means any U.S. or foreign patents, patent
applications, trademarks, trade names, service marks, brand names, logos and
other trade designations (including, without limitation, unregistered names
and marks), trademark and service mark registrations and applications,
copyrights and copyright registrations and applications, inventions, invention
disclosures, protected formulae, formulations, processes, methods, trade
secrets, computer software, computer programs and source codes, manufacturing
research and similar technical information, engineering know-how, customer and
supplier information, assembly and test data drawings, or royalty rights.
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"Interest Expense" means, for any period and for any Person, the sum of
(a) interest expense of such Person calculated without duplication on a
consolidated basis for such period in accordance with GAAP, plus (b) interest
expenses paid under Hedge Agreements during such period, minus (c) interest
payments received under Hedge Agreements during such period.
"Interest Period" means with respect to any LIBOR Balance, each period
commencing on the date such Balance is established or Continued, or Converted
from the Prime Rate Balance to a LIBOR Balance, or the last day of the next
preceding Interest Period with respect to such LIBOR Balance, and ending on
the numerically corresponding day in the first, second, third, or sixth
calendar month thereafter, as the Borrower may select as provided in Section
3.5 or Section 4.3, except that each such Interest Period which commences on
the last Business Day of a calendar month (or on any day for which there is no
numerically corresponding day in the appropriate subsequent calendar month)
shall end on the last Business Day of the appropriate subsequent calendar
month. Notwithstanding the foregoing: (a) each Interest Period which would
otherwise end on a day which is not a Business Day shall end on the next
succeeding Business Day (or if such succeeding Business Day falls in the next
succeeding calendar month, on the next preceding Business Day); (b) any
Interest Period which would otherwise extend beyond the Maturity Date shall
end on the Maturity Date; (c) no more than five (5) Interest Periods shall be
in effect at the same time; and (d) no Interest Period for any LIBOR Balance
shall have a duration of less than one (1) month and, if the Interest Period
would otherwise be a shorter period, the related LIBOR Balance shall not be
available hereunder.
"Investments" has the meaning specified in Section 10.5.
"Joinder Agreement" means an agreement to be executed by a Subsidiary
pursuant to the terms of Section 6.2, in substantially the form of Exhibit F.
"Lender" has the meaning specified in the introductory paragraph of this
Agreement.
"Letter of Credit" has the meaning specified in Section 2.6(a).
"Letter of Credit Agreement" means, with respect to each Letter of Credit
to be issued by the Fronting Bank, the letter of credit application and
reimbursement agreement which the Fronting Bank requires to be executed by the
Borrower in connection with the issuance of such Letter of Credit.
"Letter of Credit Liabilities" means, at any time, the sum of (a) the
aggregate undrawn face amount of all outstanding Letters of Credit, plus (b)
all un-reimbursed drawings under Letters of Credit.
"Leverage Ratio" means, as of any period end and determined on a
consolidated basis for the Borrower and its Subsidiaries, the ratio of (a)
Total Adjusted Funded Debt to (b) EBITDAR.
"LIBOR Balance" means any portion of the Loan that bears interest at a
rate based upon the Adjusted LIBOR Rate.
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"LIBOR Rate" means, with respect to any LIBOR Balance for the relevant
Interest Period, the applicable British Bankers' Association Interest
Settlement Rate for deposits in Dollars appearing on Reuters Screen FRBD as of
11:00 a.m. (London time) two (2) Business Days prior to the first day of such
Interest Period, and having a maturity equal to such Interest Period, provided
that (a) if Reuters Screen FRBD is not available to the Agent for any reason,
the applicable LIBOR Rate for the relevant Interest Period shall instead be
the applicable British Bankers' Association Interest Settlement Rate for
deposits in Dollars as reported by any other generally recognized financial
information service as of 11:00 a.m. (London time) two (2) Business Days prior
to the first day of such Interest Period, and having a maturity equal to such
Interest Period, and (b) if no such British Bankers' Association Interest
Settlement Rate is available to the Agent, the applicable Eurodollar Base Rate
for the relevant Interest Period shall instead be the rate determined by the
Agent to be the rate at which Bank One or one of its Affiliate banks offers to
place deposits in Dollars with first-class banks in the London interbank
market at approximately 11:00 a.m. (London time) two (2) Business Days prior
to the first day of such Interest Period, in the approximate amount of Bank
One's relevant LIBOR Balance and having a maturity equal to such Interest
Period.
"LIBOR Rate Margin" has the meaning specified in Section 3.2.
"Lien" means any lien, mortgage, security interest, tax lien, pledge,
charge, hypothecation, assignment, preference, priority, or other encumbrance
of any kind or nature whatsoever (including, without limitation, any
conditional sale or title retention agreement), whether arising by contract,
operation of law, or otherwise.
"Loan" means, as to any Lender, the advances made by such Lender pursuant
to Section 2.1,and, as to all Lenders, all such advances made or held by the
Lenders pursuant to Section 2.1.
"Loan Documents" means this Agreement, the Notes, the Letter of Credit
Agreements, any Joinder Agreement, any Hedge Agreement between the Borrower
and any Lender with respect to the Loan, and all other agreements, documents,
and instruments now or hereafter executed and/or delivered pursuant to or in
connection with any of the foregoing, and any and all amendments,
modifications, supplements, renewals, extensions, or restatements thereof
(excluding any commitment letter, term sheet, or other agreement entered into
prior to the Closing Date).
"Maintenance Capital Expenditures" means, for any Fiscal Year of the
Borrower, an amount equal to $20,000 for each restaurant location of the
Borrower and its Subsidiaries, and, with respect to any calculation for any
period of time less than a full Fiscal Year (a "measurement period"), means an
amount equal to $20,000 for each restaurant location of the Borrower and its
Subsidiaries annualized for the number of Fiscal Periods included in such
measurement period.
"Margin Adjustment Date" has the meaning specified in Section 3.2.
"Material Adverse Effect" means any material adverse effect, or the
occurrence of any event or the existence of any condition that could have a
material adverse effect, on (a) the business or financial condition,
performance, or operations of the Borrower individually or the Borrower and
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its Subsidiaries taken as a whole, (b) the ability of the Borrower
individually or the Borrower and its Subsidiaries taken as a whole to pay and
perform the obligations for it or they, as applicable, are responsible when
due, or (c) the validity or enforceability of (i) any of the Loan Documents or
(ii) the rights and remedies of the Agent or the Lenders under any of the Loan
Documents.
"Maturity Date" means July 11, 2003 or such later date to which the
expiration of the Loan may be extended in accordance with the terms of this
Agreement.
"Maximum Rate" means, at any time and with respect to any Lender, the
maximum rate of non-usurious interest under applicable law that such Lender
may charge the Borrower. The Maximum Rate shall be calculated in a manner
that takes into account any and all fees, payments, and other charges
contracted for, charged, or received in connection with the Loan Documents
that constitute interest under applicable law. Each change in any interest
rate provided for herein based upon the Maximum Rate resulting from a change
in the Maximum Rate shall take effect without notice to the Borrower at the
time of such change in the Maximum Rate. For purposes of determining the
Maximum Rate under Texas law to the extent applicable, if at all, the
applicable rate ceiling shall be the applicable rate ceiling described in, and
computed in accordance with, the Texas Finance Code.
"Multiemployer Plan" means a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been made by the Borrower
or any ERISA Affiliate at any time within the six (6) year period preceding
the date hereof or hereafter and which is covered by Title IV of ERISA.
"Net Income" means, for any period and any Person, such Person's
consolidated net income (or loss) determined in accordance with GAAP, but
excluding the income of any other Person (other than Subsidiaries) in which
such Person or any Subsidiary of such Person has an ownership interest, unless
received by such Person or a Subsidiary of such Person in a cash distribution.
"Net Proceeds" means (i) in connection with any disposition of Property
of the Borrower or any of its Subsidiaries, the cash proceeds received by such
Person from such disposition (including, without limitation, payments under
notes or other debt Securities received in connection with any such
disposition, but only as and when received) net of (a) the costs of such
disposition (including reasonable, out-of-pocket professional fees and
expenses, investment banking fees, financial advisory fees, taxes, notarial
fees, survey costs, title insurance premiums, required escrow deposits, and
purchase price adjustments and other customary fees and expenses, in each case
attributable to and actually paid in connection with such disposition), and
(b) amounts applied to repayment of Debt (other than the Obligations) secured
by a Lien on the Property disposed of and (ii) in connection with issuance of
any Securities, the cash proceeds received from such issuance, net of all
costs of such issuance (including, without limitation, reasonable,
out-of-pocket professional fees and expenses, notarial fees, underwriting
discounts and commissions, placement, underwriting, or arrangement fees, and
other customary fees and expenses) actually paid.
"Net Worth" means the Borrower's shareholder's equity (including, without
limitation, Capital Stock, additional paid-in capital, and retained earnings
as determined in accordance with GAAP.
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"Notes" means the promissory notes provided for by Section 2.2 and all
amendments, restatements, or other modifications thereof.
"Obligations" means any and all (a) obligations, indebtedness, and
liabilities of the Borrowerto the Agent and the Lenders, or any of them,
arising pursuant to this Agreement or any other Loan Document, whether now
existing or hereafter arising, whether direct, indirect, fixed, contingent,
liquidated, unliquidated, joint, several, or joint and several, including,
without limitation, the obligation of the Borrower to repay the Loan, the
Reimbursement Obligations, interest on the Loan and Reimbursement Obligations,
and all fees, costs, and expenses (including, without limitation, Attorney
Costs) provided for in the Loan Documents, and (b) indebtedness, liabilities,
and obligations of the Borrower under any Hedge Agreement that the Borrower
may enter into with the Agent, any Lender, or any of their respective
Affiliates if and to the extent that such Hedge Agreement is permitted in
accordance with Section 10.1(h).
"Offering Memorandum" means the certain Confidential Offering Memorandum
dated May 2000, prepared and distributed by Banc One Capital Markets, Inc.
with respect to the syndication of the Commitments and the Loan evidenced by
this Agreement.
"Other Taxes" has the meaning specified in Section 5.6(b).
"Outstanding Credit" means, at any time of determination, the sum of (a)
the aggregate amount of the Loan then outstanding; plus (b) the aggregate
amount of Letter of Credit Liabilities (or when calculated with respect to any
Lender, such Lender's pro rata share of the Loan then outstanding and
participation or other interest in such Letter of Credit Liabilities).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to all or any of its functions under ERISA.
"Permit" means any permit, certificate, approval, order, license, or
other authorization.
"Permitted Acquisition" means any acquisition of the Capital Stock of a
Person or any acquisition of Property which constitutes a significant or
material portion of an existing business of a Person, in each case, in a
transaction that satisfies each of the following requirements:
(a) No Default. Both before and after considering the effect of
such acquisition and any advance of the Loan requested to be made in
connection therewith, no Default exists at the time thereof or will exist or
would result therefrom;
(b) Consideration. The purchase price to be paid by the Borrower
or its applicable Subsidiary, including all cash consideration paid (whether
classified as purchase price, non-compete payments, or otherwise and without
regard to whether such amount is paid at closing or paid over time and the
Dollar value of all other assets, including Capital Stock of the Borrower, to
be transferred by the purchaser in connection with such acquisition to the
seller or sellers, all valued in accordance with the applicable agreement
entered into between the Target and/or the seller and the purchaser, and
including (without duplication) the amount of any Debt incurred, assumed, or
acquired by the Borrower or a Subsidiary of the Borrower in connection with
such acquisition shall not exceed $20,000,000 in connection with any such
single acquisition and shall not exceed $25,000,000 for any combination of
such acquisitions in any Fiscal Year of the Borrower.
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(c) Diligence. The Borrower has completed due diligence to its
satisfaction on the Target and the Property to be acquired;
(d) Structure. If the proposed acquisition is an acquisition of
the Capital Stock of a Target, the acquisition will be structured so that the
Target will become a Subsidiary of the Borrower; and, if the proposed
acquisition is an acquisition of assets, the acquisition will be structured so
that the Borrower or a Subsidiary of the Borrower shall acquire such assets;
and
(e) Material Adverse Effect. Neither the Borrower nor any of its
Subsidiaries shall, as a result of or in connection with any such
acquisition, assume or incur any contingent liabilities (whether relating to
environmental, tax, litigation or other matters) that, as of the date of such
acquisition, could result in a Material Adverse Effect.
"Permitted Liens" means the Liens permitted by Section 10.2.
"Person" means any individual, corporation, limited liability company,
business trust, association, company, partnership, joint venture, Governmental
Authority, or other entity.
"Plan" means any employee benefit plan established or maintained by the
Borrower or any ERISA Affiliate and which is subject to Title IV of ERISA.
"Prime Rate" means a rate per annum equal to the higher of (a) the
Federal Funds Rate plus one-half percent (0.50%), changing when and as the
Federal Funds Rate changes, or (b) the prime rate of interest announced from
time to time by Bank One or its parent (which is not necessarily the lowest
rate charged to any customer), changing when and as such prime rate changes.
"Prime Rate Balance" means the portion of the Loans that bear interest at
a rate based upon the Prime Rate.
"Prime Rate Margin" has the meaning specified in Section 3.2.
"Principal Office" means the office of the Agent, located at 1717 Main
Street, 3rd Floor, Dallas, Texas 75201.
"Prohibited Transaction" means any transaction described in Section 406
or 407 of ERISA or Section 4975(c)(1) of the Code for which no statutory or
administrative exemption applies.
"Projections" means the Borrower's forecasted consolidated (a) balance
sheets, (b) profit and loss statements, (c) cash flow statements, and (d)
capitalization statements, all materially consistent with the Borrower's
historical financial statements, together with appropriate supporting details
and a statement of underlying assumptions.
"Property" means, for any Person, property or assets of all kinds, real,
personal, or mixed,tangible or intangible (including, without limitation, all
rights relating thereto), whether owned or acquired on or after the Closing
Date.
"Quarterly Payment Date" means, subject to the last sentence of Section
4.5, the last day of each March, June, September, and December of each year.
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"Register" has the meaning specified in Section 14.8(d).
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as the same may be amended, modified, or supplemented
from time to time or any successor regulation therefor.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as the same may be amended, modified, or supplemented
from time to time or any successor regulation therefor.
"Regulatory Change" means, with respect to any Lender, any change after
the date of this Agreement (other than with respect to taxes excluded by the
first sentence of Section 5.6(a)) in U.S. federal, state, or foreign laws or
regulations (including, without limitation, Regulation D) or the adoption or
making after such date of any interpretations, directives, or requests (other
than with respect to taxes excluded by the first sentence of Section 5.6(a))
applying to a class of lenders including such Lender of or under any U.S.
federal or state, or any foreign, laws or regulations (whether or not having
the force of law) by any Governmental Authority or monetary authority charged
with the interpretation or administration thereof.
"Reimbursement Obligations" means all indebtedness, liabilities, and
obligations of the Borrower to reimburse the Agent or the Fronting Bank in
accordance with Section 2.6(e) for any demand for payment or drawing under a
Letter of Credit.
"Release" means, as to any Person, any release, spill, emission, leaking,
pumping, injection, deposit, disposal, disbursement, leaching, or migration of
Hazardous Materials into the indoor or outdoor environment or into or from
Property owned or leased by such Person, including, without limitation, the
migration of Hazardous Materials through or in the air, soil, surface water,
ground water, or property, in violation of Environmental Laws.
"Remedial Action" means all actions required under applicable
Environmental Laws to (a) cleanup, remove, treat, or otherwise address
Hazardous Materials in the indoor or outdoor environment, (b) prevent the
Release or minimize the threat of Release or the further Release of
Hazardous Materials, or (c) perform pre-remedial studies and investigations
and post-remedial monitoring and care; provided that "Remedial Action" shall
not include such actions taken in the normal course of business and in
material compliance with Environmental Laws.
"Required Lenders" means any combination of Lenders having more than
sixty-seven percent(67.0%) of the sum of the Commitments or, if the
Commitments have terminated, the outstanding principal amount of the Loan and
participations in the Letters of Credit.
"Reportable Event" means any of the events set forth in Section 4043 of
ERISA for which the 30-day notice requirement has not been waived by the PBGC.
"Reserve Requirement" means, at any time, the maximum rate at which
reserves (including, without limitation, any marginal, special, supplemental,
or emergency reserves) are required to be maintained under regulations issued
from time to time by the Board of Governors of the Federal Reserve System (or
any successor) by member banks of the Federal Reserve System against, in the
case of LIBOR Balances, "Eurocurrency liabilities" (as such term is used in
Regulation D). Without limiting the effect of the foregoing, the Reserve
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Requirement shall reflect any other reserves required to be maintained by such
member banks with respect to (a) any category of liabilities which includes
deposits by reference to which the Adjusted LIBOR Rate is to be determined, or
(b) any category of extensions of credit or other assets which include LIBOR
Balances. The Adjusted LIBOR Rate shall be adjusted automatically on and as
of the effective date of any change in the Reserve Requirement.
"Securities" means any stock, shares, options, warrants, voting trust
certificates, or other instruments evidencing an ownership interest or a right
to acquire an ownership interest in a Person or any bonds, debentures, notes,
or other evidences of indebtedness for borrowed money, secured or unsecured.
"Solvent" means, with respect to any Person as of the date of any
determination, that on such date (a) the fair value of the Property of such
Person (both at fair valuation and at present fair saleable value) is greater
than the total liabilities, including, without limitation, contingent
liabilities, of such Person, (b) the present fair saleable value of the assets
of such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person is able to realize upon its assets and pay its debts
and other liabilities, contingent obligations, and other commitments as they
mature in the normal course of business, (d) such Person does not intend to,
and does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature, and (e) such
Person is not engaged in business or a transaction, and is not about to engage
in business or a transaction, for which such Person's property would
constitute unreasonably small capital after giving due consideration to
current and anticipated future capital requirements and current and
anticipated future business conduct and the prevailing practice in the
industry in which such Person is engaged. In computing the amount of
contingent liabilities at any time, such liabilities shall be computed at the
amount which, in light of the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.
"Subsidiary" means, (a) when used to determine the relationship of a
Person (the "parent")to another Person, a Person (the "subsidiary") of which
an aggregate of more than fifty percent (50.0%) or more of the Capital Stock
is owned of record or beneficially by the parent, or by one or more
Subsidiaries of the parent, or by the parent and one or more Subsidiaries of
the parent, (i) if the holders of such Capital Stock (A) are ordinarily, in
the absence of contingencies, entitled to vote for the election of a majority
of the directors (or other individuals performing similar functions) of the
subsidiary, even though the right so to vote has been suspended by the
happening of such a contingency, or (B) are entitled, as such holders, to vote
for the election of a majority of the directors (or individuals performing
similar functions) of the subsidiary, whether or not the right so to vote
exists by reason of the happening of a contingency, or (ii) in the case of
Capital Stock which is not issued by a corporation, if such ownership
interests constitute a majority voting interest, and (b) when used with
respect to a Plan, ERISA, or a provision of the Code pertaining to employee
benefit plans, means, with respect to the parent, any corporation, trade, or
business (whether or not incorporated) which is under common control with the
parent and is treated as a single employer with the parent under Section
414(b) or Section 414(c) of the Code and the regulations thereunder.
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"Subsidiary Guaranty" means a guaranty agreement executed and delivered
by a Subsidiary of the Borrower in favor of the Agent, for the benefit of the
Agent and the Lenders, in substantially the form of Exhibit D, as such
Guaranty may be amended, restated, or otherwise modified from time to time.
"Target" means the Person who is to be acquired or whose assets are to be
acquired by the Borrower or a Wholly-Owned Subsidiary of the Borrower in
connection with a Permitted Acquisition.
"Taxes" has the meaning specified in Section 5.6.
"Termination Event" means (a) a Reportable Event, or (b) the filing of a
notice of intent to terminate a Plan or the treatment of a Plan amendment as a
termination under Section 4041 of ERISA, or (c) the institution of proceedings
to terminate a Plan by the PBGC under Section 4042 of ERISA, or the
appointment of a trustee to administer any Plan.
"Total Adjusted Funded Debt" means, as of any date of determination, with
respect to the Borrower and its Subsidiaries, (a) all Debt of such Persons,
plus (b) the pro forma minimum contractual lease obligations of such Persons
(excluding liability for contingent rent expense) for the following four (4)
Fiscal Quarters multiplied by eight(8).
"Type" means either type of Balance (i.e., the Prime Rate Balance or a
LIBOR Balance).
"UCC" means the Uniform Commercial Code as in effect in the State of
Texas.
"Unfunded Vested Accrued Benefits" means with respect to any Plan at any
time, the amount (if any) by which (a) the present value of all vested
nonforfeitable benefits under such Plan exceeds, (b) the fair market value of
all Plan assets allocable to such benefits; all determined as of the then most
recent valuation date for such Plan.
"U.S." means the United States of America.
"Voting Stock" means Capital Stock of a Person having by the terms
thereof under ordinary circumstances the voting power to elect a majority of
the board of directors (or similar governing body) of such Person
(irrespective of whether or not at the time Capital Stock of any other class
or classes of such Person shall have or might have voting power by reason of
the happening of any contingency).
"Wholly-Owned Subsidiary" means any Subsidiary of the Borrower that is
owned 100% by the Borrower and/or a Subsidiary of the Borrower.
Section 1.2 Other Interpretive Provisions.
(a) The meanings of defined terms are equally applicable to the
singular and plural forms of the defined terms.
(b) The words "hereof", "herein", "hereunder" and words of similar
import referring to this Agreement refer to this Agreement as a whole and not
to any particular provision of this Agreement. Unless otherwise specified, all
Article, Exhibit, Section, and Schedule references pertain to Articles,
Exhibits, Sections, and Schedules of this Agreement.
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(c) (i) The term "including" is not limiting and means "including
without limitation."
(ii) In the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and including";
the words "to" and "until" each mean "to but excluding", and the word
"through" means "to and including."
(iii) The phrases "could have a Material Adverse Effect" and
"could not have a Material Adverse Effect", and other similar phrases,
whenever used herein with regard to the Borrower or any Subsidiary of the
Borrower shall be interpreted considering solely the Borrower's or such
Subsidiary's reasonable expectation of the likelihood of the actual existence
or occurrence (as the case may be) of an event or circumstance constituting a
Material Adverse Effect.
(d) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments shall
be deemed to include all subsequent amendments and other modifications
thereto, but only to the extent such amendments and other modifications are
not prohibited by the terms of any Loan Document, and (ii) references to any
statute or regulation are to be construed as including all statutory and
regulatory provisions consolidating, amending, replacing, supplementing, or
interpreting the statute or regulation.
(e) This Agreement and other Loan Documents may use several
different limitations, tests, or measurements to regulate the same or similar
matters. All such limitations, tests, and measurements are cumulative and
shall each be performed in accordance with their terms. Unless otherwise
expressly provided, any reference to any action of the Agent or any Lender by
way of consent, approval, or waiver shall be deemed modified by the phrase "in
its/their sole discretion."
(f) Terms used herein that are defined in the UCC, unless otherwise
defined herein, shall have the meanings specified in the UCC.
Section 1.3 Accounting Terms and Determinations. Except as otherwise
expressly provided herein, all accounting terms used herein shall be
interpreted, and all financial statements and certificates and reports as to
financial matters required to be delivered to the Agent and the Lenders
hereunder shall be prepared, in accordance with GAAP, on a "consistent basis"
with those used in the preparation of the financial statements referred to in
Section 8.2. All calculations made for the purposes of determining compliance
with the provisions of this Agreement shall be made by application of GAAP, on
a "consistent basis" with those used in the preparation of the financial
statements referred to in Section 8.2. Accounting principles are applied on a
"consistent basis" when the accounting principles applied in a current period
are comparable in all material respects to those accounting principles applied
in a preceding period. Changes in the application of accounting principles
which do not have a material impact on calculating the financial covenants
herein shall be deemed comparable in all material respects to accounting
principles applied in a preceding period.
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To enable the ready and consistent determination of compliance by the Borrower
with its obligations under this Agreement, the Borrower will not, nor will it
permit any of its Subsidiaries to, change the manner in which either the last
day of its Fiscal Year or the last day of each of the first three Fiscal
Quarters of its Fiscal Year is determined without the prior written consent of
the Required Lenders. In the event any changes in accounting principles
required by GAAP, recommended by the Borrower's or any of its Subsidiaries's
certified public accountants, or requested by the Borrower (or that the
Borrower otherwise requests and the Agent and the Required Lenders agree to
accept, such agreement not unreasonably to be denied) and implemented by the
Borrower or any of its Subsidiaries occur and such changes result in a change
in the method of the calculation of financial covenants under this Agreement,
then the Borrower, the Agent, and the Required Lenders shall enter into an
agreement (reasonably acceptable to the Borrower, the Agent, and the Required
Lenders) amending such provisions of this Agreement so as to equitably reflect
such changes with the desired result that the criteria for evaluating such
covenants shall be the same after such changes as if such changes had not been
made. Until such time as such an amendment shall have been executed and
delivered by the Borrower, the Agent, and the Required Lenders, the financial
statements required to be prepared and delivered by the Borrower shall comply
in all respects to GAAP and all financial covenants, standards, and terms in
this Agreement shall continue to be calculated or construed as if such changes
had not occurred. No changes in accounting principles required in accordance
with GAAP and implemented by the Borrower pursuant to this Section 1.3 shall
constitute a Default hereunder.
Section 1.4 Time of Day. Unless otherwise indicated, all references
in this Agreement to times of day shall be references to Dallas, Texas time.
ARTICLE 2
Credit Facility
Section 2.1 Commitments. Subject to the terms and conditions of this
Agreement, each Lender severally agrees to make advances to the Borrower from
time to time, subject to the provisions of Section 2.4, from and including the
Closing Date to but excluding the Maturity Date in an aggregate principal
amount at any time outstanding up to but not exceeding the amount of such
Lender's Commitment as then in effect; provided, however, (a) the Outstanding
Credit applicable to a Lender shall not at any time exceed such Lender's
Commitment, and (b) the Outstanding Credit of all of the Lenders shall not at
any time exceed the aggregate Commitments. Subject to the foregoing
limitations, and the other terms and provisions of this Agreement, the
Borrower may borrow, prepay, and reborrow hereunder the amount of the
Commitments and may establish a Prime Rate Balance and LIBOR Balances
thereunder and, until the Maturity Date, the Borrower may Continue LIBOR
Balances established under the Loan or Convert Balances established under the
Loan of one Type into Balances the other Type. Each Type of Balance under the
Loan advanced by each Lender shall be established and maintained at such
Lender's Applicable Lending Office for such Type of Balance.
Section 2.2 Notes. The Loan made by a Lender shall be evidenced by a
single promissory note of the Borrower, in substantially the form of Exhibit
A, payable to the order of such Lender, in the maximum principal amount equal
to such Lender's Commitment as originally in effect (or,if greater, its
Commitment as thereafter increased) and otherwise duly completed.
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Section 2.3 Repayment of Loan. The Borrower shall pay to the Agent,
for the account of the Lenders, (a) the prepayments of the Loan required
pursuant to Section 4.4(a) and (b) the outstanding principal amount of the
Loan on the Maturity Date.
Section 2.4 Use of Proceeds. Subject to the terms of this Agreement,
the proceeds of the Loan shall be used by the Borrower (a) to repay the
Borrower's existing indebtedness due to Bank One under that certain Loan
Agreement dated June 27, 1995, as amended, between the Borrower and Bank One,
(b) for payment of the Reimbursement Obligations, (c) to finance Capital
Expenditures by the Borrower, (d) subject to Section 8.11 and Section 10.4(d),
to finance repurchases of the Borrower's Capital Stock, and (e) for general
corporate purposes, including, without limitation, Permitted Acquisitions,
Restricted Payments to the extent permitted under this Agreement, and to
finance working capital requirements of the Borrower and its Subsidiaries,
arising in the ordinary course of business; provided that notwithstanding any
other provision of this Agreement or any other Loan Document to the contrary,
the aggregate amount of the Loan made to the Borrower at any time (including,
without limitation, on the Closing Date) shall at all times be in compliance
with Regulation U.
Section 2.5 Termination or Reduction of Commitments. The Borrower
shall have the right to terminate fully or to reduce in part the unused
portion of the Commitments at any time and from time to time, provided that:
(a) the Borrower shall not have the right to terminate or reduce in part any
unused portion of the Commitments that could or may be required to be advanced
by the Lenders to repay Reimbursement Obligations then outstanding; (b) the
Borrower shall give the Agent at least three (3) Business Days notice of each
such termination or reduction as provided in Section 4.3; and (c) each partial
reduction shall be in an aggregate amount at least equal to $3,000,000 or any
multiple $100,000 in excess thereof. The Commitments may not be reinstated
after they have been terminated or reduced.
Section 2.6 Letters of Credit.
(a) Commitment to Issue. The Borrower may utilize the Commitments
by requesting that the Fronting Bank issue, and the Fronting Bank, subject to
the terms and conditions of this Agreement, shall issue, standby letters of
credit for the Borrower's account (such letters of credit being referred to
herein as the "Letters of Credit"); provided that (i) the aggregate amount of
outstanding Letter of Credit Liabilities shall not at any time exceed
$2,000,000, (ii) the Outstanding Credit shall not at any time exceed the
maximum amount prescribed by Section 2.1, and (iii) the Outstanding Credit
applicable to any Lender shall not at any time exceed the maximum amount for
such Lender prescribed by Section 2.1. Upon the date of issue of a Letter of
Credit, the Fronting Bank shall be deemed, without further action by any party
hereto, to have sold to each Lender who holds a Commitment, and each such
Lender shall be deemed, without further action by any party hereto, to have
purchased from the Fronting Bank, a participation to the extent of such
Lender's Commitment Percentage (calculated with respect to the Commitments) in
such Letter of Credit and the related Letter of Credit Liabilities. Upon
termination of the Commitments, any Letter of Credit then outstanding which
has been fully cash collateralized to the satisfaction of the Agent and the
Fronting Bank shall no longer be considered a "Letter of Credit" as provided
by the terms of this Agreement and any participating interest heretofore
granted by the Fronting Bank to the Lenders holding Commitments in such Letter
of Credit shall be deemed terminated but the letter of credit fees payable
hereunder shall continue to accrue to the Fronting Bank with respect to such
Letter of Credit until the expiry thereof.
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(b) Letter of Credit Request Procedure. The Borrower shall give
the Agent not less than three (3) Business Days prior notice (effective upon
receipt) specifying the date of each Letter of Credit and the nature of the
transactions to be supported thereby. Upon receipt of such notice the Agent
shall notify the Fronting Bank and each Lender who holds a Commitment of the
contents thereof and of such Lender's Commitment Percentage of the amount of
the proposed Letter of Credit. Each Letter of Credit (i) shall have an
expiration date that does not extend beyond a date which is the lesser of (A)
one (1) year from the date of issuance or (B) thirty (30) days prior to the
Maturity Date, (ii) shall be payable in Dollars,(iii) must support a
transaction or Capital Expenditure entered into or obligation arising in
the ordinary course of business of the Borrower, (iv) must be satisfactory in
form and substance to the Agent and the Fronting Bank, and (v) shall be issued
pursuant to such documentation as the Agent and the Fronting Bank may require,
including, without limitation, the Fronting Bank's standard form Letter of
Credit Agreement (a current draft of which is attached hereto as Exhibit G,
provided that attachment of such form shall not be a requirement that the
Fronting Bank use such form in connection with issuance of any Letter of
Credit or that any future form of Letter of Credit Agreement be in form or
substance similar to such form); provided that in the event of any conflict
between the terms of such agreement and the other Loan Documents, the terms of
the other Loan Documents shall control.
(c) Funding of Drawings. Upon receipt from the beneficiary of any
Letter of Credit of any demand for payment or other drawing under such Letter
of Credit, the Fronting Bank shall so notify the Agent and the Agent shall so
notify the Borrower and each Lender as to the amount to be paid as a result of
such demand or drawing and the respective payment date. Not later than 1:00
p.m. (Dallas, Texas time) on the applicable payment date if the Borrower has
not reimbursed the Fronting Bank for the amount paid as a result of such
demand or drawing, each Lender will make available to the Agent, at the
Principal Office,in immediately available funds, an amount equal to such
Lender's Commitment Percentage of the amount to be paid as a result of such
demand or drawing which has not been reimbursed even if the conditions to an
advance of the Loan under Article 7 have not been satisfied and the Agent
shall promptly pay such amounts to the Fronting Bank.
(d) Reimbursements. The Borrower shall be irrevocably and
unconditionally obligated to immediately reimburse the Fronting Bank (through
the Agent) for any amounts paid by the Fronting Bank upon any demand for
payment or drawing under any Letter of Credit, without presentment, demand,
protest, or other formalities of any kind. All payments on the Reimbursement
Obligations shall be made to the Agent not later than 1:00 p.m.(Dallas, Texas
time) on the date of the corresponding payment under the Letter of Credit by
the Fronting Bank; provided that the Agent has provided notice to the Borrower
prior to11:00 a.m. (Dallas, Texas time) on such day that such payment is due.
In the event such notice is received after 11:00 a.m. (Dallas, Texas time) on
a Business Day, such payment shall be due not later than 1:00 p.m. (Dallas,
Texas time) on the next succeeding Business Day. Subject to the other terms
and conditions of this Agreement, such reimbursement may be made by the
Borrower requesting an advance of the Loan in accordance with Section 4.1,
the proceeds of which shall be credited against the Borrower's Reimbursement
Obligations.
The Agent will pay to each Lender participating in a Letter of Credit
such Lender's Commitment Percentage of all amounts received from the Borrower
for application in payment, in whole or in part, to the Reimbursement
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Obligation in respect of any Letter of Credit, but only to the extent such
Lender has made payment to the Agent in respect of such Letter of Credit
pursuant to clause (c) of this Section 2.6.(e) Reimbursement Obligations
Absolute. The Reimbursement Obligations of the Borrower under this Agreement
shall be absolute, unconditional, and irrevocable, and shall be performed
strictly in accordance with the terms of the Loan Documents under all
circumstances whatsoever and the Borrower hereby waives any defense to the
payment of the Reimbursement Obligations based on any circumstance
whatsoever, including, without limitation, in either case, the following
circumstances: (i) any lack of validity or enforceability of any Letter of
Credit or any other Loan Document; (ii) the existence of any claim, set-off,
counterclaim, defense, or other rights which the Borrower or any other Person
may have at any time against any beneficiary of any Letter of Credit, the
Fronting Bank, the Agent, any Lender, or any other Person, whether in
connection with any Loan Document or any unrelated transaction; (iii) any
statement, draft, or other documentation presented under any Letter of Credit
proving to be forged, fraudulent, invalid, or insufficient in any respect or
any statement therein being untrue or inaccurate in any respect whatsoever;
(iv) payment by the Fronting Bank under any Letter of Credit against
presentation of a draft or other document that does not comply with the terms
of such Letter of Credit; or (v) any other circumstance whatsoever, whether or
not similar to any of the foregoing.
(f) Assumption of Risk by the Borrower. As among the Borrower and
the Lenders, the Borrower assumes all risks of the acts and omissions of, or
misuse of any of the Letters of Credit by, the respective beneficiaries of
such Letters of Credit. In furtherance and not in limitation of the
foregoing, subject to the provisions of the applications for the issuance of
Letters of Credit, the Lenders, the Fronting Bank, and the Agent shall not be
responsible for:
(i) the form, validity, sufficiency, accuracy, genuineness, or
legal effect of any document submitted by any Person in connection with the
application for and issuance of and presentation of drafts with respect to any
of the Letters of Credit, even if it should prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent, or forged;
(ii) the validity or sufficiency of any instrument transferring
or assigning, or purporting to transfer or assign, any Letter of Credit or the
rights or benefits thereunder or proceeds thereof, in whole or in part, which
may prove to be invalid or ineffective for any reason;
(iii) the failure of the beneficiary of any Letter of Credit to
comply duly with conditions required in order to draw upon such Letter of
Credit;
(iv) errors, omissions, interruptions, or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex,
or otherwise, whether or not they be in cipher;
(v) errors in interpretation of technical terms;
(vi) any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any Letter of Credit or of
the proceeds thereof;
(vii) the misapplication by the beneficiary of any Letter of
Credit of the proceeds of any drawing under such Letter of Credit; or
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(viii) any consequences arising from causes beyond the control
of any Lender or the Fronting Bank, including, without limitation, any act of
any Governmental Authority. None of the foregoing shall affect, impair, or
prevent the vesting of any of the Lenders', the Fronting Bank's, or the
Agent's rights or powers under this Section 2.6. The Borrower shall have a
claim against the Fronting Bank, and the Fronting Bank shall be liable to the
Borrower, to the extent of any direct (but not indirect, consequential, or
punitive) damages suffered by the Borrower which the Borrower proves in a
final nonappealable judgment were caused by (A) the Fronting Bank's willful
misconduct or gross negligence in determining whether documents presented
under any Letter of Credit complied with the terms thereof, (B) the Fronting
Bank's willful failure to pay under any Letter of Credit after presentation to
it of documentation strictly complying with the terms and conditions of such
Letter of Credit, or (C) the Fronting Bank's acceptance of documents that do
not appear on their face to be in order; provided that the Fronting Bank may
accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary.
Section 2.7 Extension of Maturity Date. The term of this Agreement
shall end on the Maturity Date unless extended as provided in this Section.
Upon the Borrower's written request to the Agent and the Lenders after the
first anniversary date of the Closing Date, and if all of the Lenders consent
to such request in writing, the Maturity Date will be extended by a term of
one (1) year. In the event that the Borrower requests an extension of the
Maturity Date as set forth in the preceding sentence and all of the Lenders
approve such extension, this Agreement and all of the other Loan Documents
shall be deemed to have been amended to reflect the effect of such extension
without any additional approval, writing, or agreement being required.
ARTICLE 3
Interest and Fees
Section 3.1 Interest Rate. The Borrower shall pay to the Agent, for
the account of each Lender, interest on the unpaid principal amount of the
Loan made by such Lender for the period commencing on the date of the initial
advance under the Loan to but excluding the date the Loan is due, at a
fluctuating rate per annum equal to the Applicable Rate. The term "Applicable
Rate" means:
(a) during the period that the Loan or any portion thereof is
outstanding as a Prime Rate Balance, the Prime Rate, plus the Prime Rate
Margin; and
(b) during the period that the Loan or any portion thereof is
outstanding as a LIBOR Balance or as LIBOR Balances, the Adjusted LIBOR Rate,
plus the LIBOR Rate Margin.
Section 3.2 Determinations of Margins and Commitment Fee Rate. From
the Closing Date until the first Margin Adjustment Date, the margins
identified in Section 3.1 shall be as follows: (a) the margin of interest
payable with respect to the Prime Rate Balance (the "Prime Rate Margin") shall
be zero percent (0.00%); and (b) the margin of interest payable with respect
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to the LIBOR Balance (the "LIBOR Rate Margin") shall be one and one-eighth
percent (1.125%). From the Closing Date until the first Margin Adjustment
Date, the percentage used to determine fees payable under Section 3.6 (the
"Commitment Fee Rate") shall be one-quarter percent (0.25%). Upon delivery of
the certificate required pursuant to Section 9.1(c) after the end of each
Fiscal Quarter commencing with such certificate delivered for the Fiscal
Quarter ending July 2, 2000, the Commitment Fee Rate, the Prime Rate Margin,
and the LIBOR Rate Margin shall automatically be adjusted to the fee or rate,
as applicable, corresponding to the Leverage Ratio of the Borrower set forth
in the following table, such automatic adjustment to take effect retroactively
as of the first day of the then existing Fiscal Quarter during which such
certificate is delivered (the "Margin Adjustment Date").
LEVERAGE RATIO
PRIME RATE MARGIN
LIBOR RATE MARGIN
COMMITMENT FEE RATE
Greater than or equal to 3.00 to 1.00
0.00%
1.75%
0.375%
Greater than or equal to 2.75
to 1.00 but less than 3.00 to
1.00
0.00%
1.50%
0.375%
Greater than or equal to 2.25
to 1.00 but less than 2.75 to
1.00
0.00%
1.125%
0.25%
Less than 2.25 to 1.00
0.00%
1.00%
0.25%
If the Borrower fails to deliver such certificate with respect to any Fiscal
Quarter which sets forth the Leverage Ratio within the period of time required
by Section 9.1(c): (y) the LIBOR Rate Margin (for Interest Periods commencing
after the applicable Adjustment Date) shall automatically be adjusted to one
and three-quarters percent (1.75%) per annum and (z) the Commitment Fee Rate
shall automatically be adjusted to three-eighths percent (0.375%) per annum.
The automatic adjustments provided for in the preceding sentence shall take
effect retroactively as of the first day of the then existing Fiscal Quarter
and shall remain in effect until subsequently adjusted prospectively in
accordance herewith upon the delivery of the required certificate.
Section 3.3 Payment Dates. Accrued interest on the Loan shall be due
and payable as follows: (a) in the case of the Prime Rate Balance, on the
first day of each month and on the Maturity Date; and (b) in the case of each
LIBOR Balance, on (i) the last day of the Interest Period with respect
thereto, (ii) in the case of an Interest Period greater than three months, at
three-month intervals after the first day of such Interest Period, and (iii)
on the Maturity Date.
Section 3.4 Default Interest. Notwithstanding anything to the
contrary contained in this Agreement, during the existence of an Event of
Default, Borrower will pay to the Agent for the account of each Lender
interest at the applicable Default Rate on any principal of the Loan made by
such Lender, any Reimbursement Obligation, and (to the fullest extent
permitted by law) any other amount payable by the Borrower under any Loan
Document to or for the account of the Agent or such Lender.
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Section 3.5 Conversions and Continuations of Balances. Subject to
Section 4.2, the Borrower shall have the right from time to time to Convert
all or part of the Prime Rate Balance into a LIBOR Balance or to continue
LIBOR Balances in existence as LIBOR Balances, provided that: (a) the Borrower
shall give the Agent notice of each such Conversion or Continuation as
provided in Section 4.3; (b) subject to Article 5, a LIBOR Balance may only be
Converted on the last day of the Interest Period therefor; and (c) except for
Conversions into the Prime Rate Balance, no Conversions or Continuations shall
be made without the consent of the Agent and the Required Lenders at any time
during the existence of a Default.
Section 3.6 Commitment Fee. The Borrower agrees to pay to the Agent
for the account of each Lender a commitment fee (determined according to the
provisions of Section 3.2) on the daily average unused amount of such Lender's
Commitment for the period from and including the Closing Date to and including
the Maturity Date, at the Commitment Fee Rate as set forth in Section 3.2,
provided that for purposes of calculating such fee the amount of outstanding
Letters of Credit shall constitute use of the Commitment. Accrued Commitment
Fees under this Section shall be payable in arrears on each Quarterly Payment
Date and on the Maturity Date.
Section 3.7 Letter of Credit Fees. The Borrower will pay to the
Agent, for the account of each Lender, a fee on such Lender's Commitment
Percentage of the aggregate stated amount of each Letter of Credit, such fee
(a) to be paid in arrears on the first Quarterly Payment Date occurring after
the date of the issuance of the first Letter of Credit and on each Quarterly
Payment Date thereafter until the date of expiration or termination of all
Letters of Credit and (b) to be calculated on each Quarterly Payment Date at a
rate per annum equal to the LIBOR Rate margin applicable to the Loan. After
receiving any payment of any fees under this Section, the Agent will promptly
pay to each Lender the fees then due such Lender. The Borrower will also pay
to the Fronting Bank, for its account only, a fee on the aggregate stated
amount of each Letter of Credit, such fee (y) to be paid in arrears on the
first Quarterly Payment Date occurring after the date of the issuance of the
first Letter of Credit and on each Quarterly Payment Date thereafter until the
date of expiration or termination of all Letters of Credit and (z) to be
calculated at a rate per annum equal to one-eighth of one percent (0.125%).
The Borrower will also pay to the Fronting Bank, for its account only, all
customary fees for issuance, negotiation, amendment, or processing of the
Letters of Credit.
Section 3.8 Administrative Fee. The Borrower agrees to pay to the
Agent on the Closing Date and on each anniversary thereof the administrative
fee described in the Agent's Letter.
Section 3.9 Computations. Interest and fees payable by the Borrower
hereunder and under the other Loan Documents shall be computed on the basis of
a year of 360 days for the actual number of days elapsed (including the first
day but excluding the last day) in the period for which interest is payable
unless such calculation would result in a rate that exceeds the Maximum Rate,
in which case interest shall be calculated on the basis of a year of 365 or
366 days, as the case may be. Notwithstanding anything to the contrary
contained in this Section, interest payable by the Borrower hereunder and
under the other Loan Documents with respect to the Prime Rate Balance shall be
computed on the basis of a year of 365 or 366 days, as the case may be, for
the actual number of days elapsed (including the first day but excluding the
last day) in the period for which interest is payable. Each determination of
an interest rate by the Agent shall be conclusive and binding on the Borrower
and the Lenders in the absence of manifest error. The Agent will, at the
request of the Borrower or any Lender, deliver to the Borrower or such Lender,
as the case may be, a statement showing the quotations used by the Agent in
determining any interest rate and the resulting interest rate.
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ARTICLE 4
Administrative Matters
Section 4.1 Borrowing Procedure. The Borrower shall give the Agent,
and the Agent will give the Lenders, notice of each borrowing under the
Commitments in accordance with Section 4.3. Not later than 1:00 p.m. (Dallas,
Texas time) on the date specified for each borrowing under the Commitment,
each Lender will make available the amount of the Loan to be advanced by it on
such date to the Agent, at the Principal Office, in immediately available
funds, for the account of the Borrower. The amounts received by the Agent
shall, subject to the terms and conditions of this Agreement, be made
available to the Borrower by 3:00 p.m. at the Borrower's direction by
transferring the same, in immediately available funds by wire transfer,
automated clearinghouse debit, or interbank transfer to (a) a bank account of
the Borrower designated by the Borrower in writing or (b) a Person or Persons
designated by the Borrower in writing.
Section 4.2 Minimum Amounts. Each borrowing under the Commitment
shall be in an amount at least equal to $1,000,000 or an integral multiple of
$100,000 in excess thereof. Except for Conversions and prepayments pursuant
to Section 4.4(a) and Article 5, each Conversion and prepayment of principal
of the Loan shall be in an amount at least equal to$1,000,000 or an integral
multiple of $100,000 in excess thereof. Notwithstanding the foregoing, each
borrowing or Continuation under the Commitments as a LIBOR Balance and each
Conversion of amounts outstanding as all or a portion the Prime Rate Balance
to a LIBOR Balance shall be in an amount at least equal to $1,000,000 or an
integral multiple of $100,000 in excess thereof.
Section 4.3 Certain Notices.
(a) Notices by the Borrower to the Agent of terminations or
reductions of Commitments, of borrowings, Conversions, Continuations, and
prepayments of the Loan, and of the duration of Interest Periods shall be
irrevocable and shall be effective only if received by the Agent not later
than 10:00 a.m. (Dallas, Texas time) on the Business Day prior to the date of
the relevant termination, reduction, borrowing, Conversion, Continuation, or
prepayment as specified below:
Number of Business
Days Prior Notice
------------------
Borrowing of Loans as all or a portion of the
Prime Rate Balance 0
Borrowing of Loans as LIBOR Balances 3
Conversions or Continuations of Loans and termination
or reduction of Commitments 3
Prepayment of Loans which are all or a portion of the
Prime Rate Balance 0
Prepayment of Loans which are LIBOR Balances 3
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Any notices of the type described in this Section which are received by
the Agent after the applicable time set forth above on a Business Day shall be
deemed to be received and shall be effective on the next Business Day. Each
such notice of termination or reduction shall specify the amount of the
Commitments to be terminated or reduced. Subject to Section 4.3(b), each such
notice of borrowing, Conversion, Continuation, or prepayment shall be in the
form of Exhibit E, appropriately completed by an authorized representative of
the Borrower, and shall specify (i) the amount of the Loan to be borrowed or
prepaid or the Balances to be Converted or Continued; (ii) the amount (subject
to this Section 5.2) to be borrowed, Converted, Continued, or prepaid; (iii)
in the case of a Conversion, the Type of Balance to result from such
Conversion; (iv) in the case of a borrowing, the Type of Balance or Balances
to be applicable to such borrowing and the amounts thereof; (v) in the event a
LIBOR Balance is selected, the duration of the Interest Period therefor; and
(vi) the date of borrowing, Conversion, Continuation, or repayment (which
shall be a Business Day).
(b) Any notices by the Borrower of the type described in this
Section may be made orally or in writing and, if made orally, must be
confirmed immediately in writing (which may be by facsimile transmission,
provided that such facsimile transmission is promptly followed by delivery of
an original signed notice) on the same Business Day on which such oral notice
is given; provided that any such oral notice shall be deemed to be controlling
and proper notice in the event of a discrepancy with or failure to receive a
confirming written notice. The Agent shall notify the Lenders of the contents
of each such notice on the date of its receipt of the same or, if received
ater the applicable time set forth above on a Business Day, on the next
Business Day. In the event the Borrower fails to select the Type of Balance
applicable to a borrowing of the Loan, or the duration of any Interest Period
for any LIBOR Balance, within the time period and otherwise as provided in
this Section, such Balance (if outstanding as a LIBOR Balance) will be
automatically Converted into the Prime Rate Balance on the last day of the
Interest Period for such LIBOR Balance or (if outstanding as a portion of the
Prime Rate Balance) will remain as, or (if not then outstanding) will be made
as, a portion of the Prime Rate Balance. The Borrower may not borrow under
the Loan as a LIBOR Balance, Convert any portion of the Prime Rate Balance
into LIBOR Balances, or Continue any LIBOR Balance as a LIBOR Balance if the
Applicable Rate for such LIBOR Balance would exceed the Maximum Rate.
Section 4.4 Prepayments.
(a) Mandatory.
(i) Overadvance. If at any time the Outstanding Credit
exceeds the aggregate Commitments, the Borrower shall, within one (1)
Business Day after the occurrence thereof, prepay the Loan by the amount of
such excess.
(ii) Prepayments from Asset Dispositions. Immediately upon
receipt by the Borrower or any of its Subsidiaries of the Net Proceeds of any
Asset Disposition, the Borrower shall make a prepayment in respect of the
Obligations equal to the amount of such Net Proceeds of such Asset
Disposition.
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(iii) Prepayments from Debt Offerings. In the event that the
Borrower or any Subsidiary of the Borrower incurs any Funded Debt (other than
Debt permitted by Section 10.1) no later than the third Business Day
following the incurrence of such Debt, the Borrower shall make a prepayment in
respect of the Obligations equal to the amount of the Net Proceeds of such
Debt.
(iv) Prepayments from Equity Offerings. In the event that the
Borrower or any Subsidiary of the Borrower issues Capital Stock in any public
offering or private placement other than such issuance or placement made
exclusively in payment of or funding for a Permitted Acquisition, or receives
an additional capital contribution in respect of existing Capital Stock or
other Securities (including, without limitation, Debt Securities), other than
such issuance or placement made exclusively in payment of, or funding for, a
Permitted Acquisition, pursuant to the Borrower's 1988 Non-Statutory Stock
Option Plan, the Borrower's 1997 Non- Statutory Stock Option Plan, the
Borrower's Non-Employee Director's Stock Option Plan, and the Borrower's
Rights Agreement dated November 19, 1997 (or any capital contribution in
respect of any similar future plans) or issued in exchange for outstanding
Debt or equity Securities, no later than the third Business Day following the
date of receipt of the proceeds from such issuance, the Borrower shall make a
prepayment in respect of the Obligations equal to the net proceeds of such
issuance.
(b) Optional. Subject to Section 4.2 and the provisions of this
clause (b), the Borrower may, at any time and from time to time without
premium or penalty upon prior notice to the Agent as specified in Section 4.3,
prepay or repay the Loan in full or in part. LIBOR Balances may be prepaid or
repaid only on the last day of the Interest Period applicable thereto unless
the Borrower pays to the Agent, for the account of the applicable. Lenders,
any amounts due under Section 5.5 as a result of such prepayment or repayment.
Section 4.5 Method of Payment. Except as otherwise expressly provided
herein, all payments of principal, interest, and other amounts to be made by
the Borrower under the Loan Documents shall be made to the Agent at the
Principal Office for the account of each Lender's Applicable Lending Office in
Dollars and in immediately available funds, without set-off, deduction,
counterclaim, not later than 1:00 p.m. (Dallas, Texas time) on the date on
which such payment shall become due (each such payment made after such time on
such due date to be deemed to have been made on the next succeeding Business
Day). The Borrower shall, at the time of making each such payment, specify to
the Agent the sums payable under the Loan Documents to which such payment is
to be applied (and in the event that the Borrower fails to so specify, or if
an Event of Default is in existence, the Agent may apply such payment to the
Obligations in such order and manner as it may elect in its sole discretion,
subject to Section 4.6 and provided that when applying any such amounts to any
Balances, the portion of the Loan outstanding as the Prime Rate Balance shall
be prepaid in full prior to any application to portion of the Loan outstanding
as a LIBOR Balance). Each payment received by the Agent under any Loan
Document for the account of a Lender shall be paid to such Lender by 3:00 p.m.
(Dallas, Texas time) on the date the payment is deemed made to the Agent in
immediately available funds, for the account of such Lender's Applicable
Lending Office. Whenever any payment under any Loan Document shall be stated
to be due on a day that is not a Business Day, such payment may be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of the payment of interest and commitment fee, as
the case may be.
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Section 4.6 Pro Rata Treatment. Except to the extent otherwise
provided herein: (a) each advance of the Loan shall be made by the Lenders,
each payment of commitment fees under Section 3.6 and letter of credit fees
under Section 3.7, and each termination or reduction of the Commitments shall
be made, paid, or applied (as applicable) pro rata according to the Lenders'
respective Commitment Percentages; (b) the making, Conversion, and
Continuation of Balances of a particular Type (other than Conversions provided
for by Section 5.4) shall be made pro rata among the Lenders holding Balances
of such Type according to their respective Commitment Percentages; (c) each
payment and prepayment of principal of or interest on the Loan or
Reimbursement Obligations by the Borrower shall be made to the Agent for the
account of the Lenders pro rata in accordance with the respective unpaid
principal amounts of the Loan or participation interests held by each Lender;
provided that as long as no default in the payment of interest exists,
payments of interest made when Lenders are holding different types of Balances
applicable to the Loan as a result of the application of Section 5.4, shall be
made to the Lenders in accordance with the amount of interest owed to each;
and (d) the Lenders shall purchase from the Fronting Bank participations in
the Letters of Credit to the extent of their respective Commitment
Percentages. If at any time payment, in whole or in part, of any amount
distributed by the Agent hereunder is rescinded or must otherwise be restored
or returned by the Agent as a preference, fraudulent conveyance, or otherwise
under any bankruptcy, insolvency, or similar law, then each Person receiving
any portion of such amount agrees, upon demand, to return the portion of such
amount it has received to the Agent.
Section 4.7 Sharing of Payments. If a Lender shall obtain payment of
any principal of or interest on any of the Obligations due to such Lender
hereunder directly (and not through the Agent) through the exercise of any
right of set-off, banker's lien, counterclaim, or similar right, or otherwise,
it shall promptly purchase from the other Lenders participations in the
Obligations held by the other Lenders in such amounts, and make such other
adjustments from time to time as shall be equitable to the end that all the
Lenders shall share the benefit of such payment pro rata in accordance with
the unpaid principal of and interest on the Obligations then due to each of
them. To such end, all of the Lenders shall make appropriate adjustments
among themselves (by the resale of participations sold or otherwise) if all or
any portion of such excess payment is thereafter rescinded or must otherwise
be restored. The Borrower agrees, to the fullest extent it may effectively do
so under applicable law, that any Lender so purchasing a participation in the
Obligations held by the other Lenders may exercise all rights of set-off,
banker's lien, counterclaim, or similar rights with respect to such
participation as fully as if such Lender were a direct holder of Obligations
in the amount of such participation. Nothing contained herein shall require
any Lender to exercise any such right or shall affect the right of any Lender
to exercise, and retain the benefits of exercising, any such right with
respect to any other indebtedness, liability, or obligation of the Borrower.
Section 4.8 Non Receipt of Funds by the Agent.
(a) Unless the Agent shall have been notified by a Lender or the
Borrower (the "Payor") prior to the date on which such Lender is to make
payment to the Agent hereunder or the Borrower is to make a payment to the
Agent, for the account of one or more of the Agent or the Lenders, as the case
may be (such payment being herein called the "Required Payment"), which notice
shall be effective upon receipt, that the Payor does not intend to make the
Required Payment to the Agent, the Agent may assume that the Required Payment
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has been made and may, in reliance upon such assumption (but shall not be
required to), make the amount thereof available to the intended recipient on
such date and, if the Payor has not in fact made the Required Payment to the
Agent, (i) the recipient of such payment shall, on demand, pay to the Agent
the amount made available to it together with interest thereon in respect of
the period commencing on the date such amount was so made available by the
Agent until the date the Agent recovers such amount at a rate per annum equal
to the Federal Funds Rate for such period, and (ii) the Agent shall be
entitled to offset against any and all sums to be paid to such recipient, the
amount calculated in accordance with the foregoing clause (a).
(b) The Commitments and other obligations of the Lenders under any
Loan Document are several. The default by any Lender in making an advance
under the Loan in accordance with its Commitment shall not relieve the other
Lenders of their obligations under any Loan Document. In the event of any
default by any Lender in making any advance under the Loan, each non-
defaulting Lender shall be obligated to make its advance under the Loan but
shall not be obligated to advance the amount which the defaulting Lender as
required to advance hereunder. No Lender shall be responsible for any act or
omission of any other Lender.
Section 4.9 Participation Obligations Absolute; Failure to Fund
Participation. The obligations of a Lender to fund its participation in the
Letters of Credit in accordance with the terms hereof shall be absolute,
unconditional, and irrevocable and shall be performed strictly in accordance
with the terms of the Loan Documents under all circumstances whatsoever,
including, without limitation, the following circumstances: (a) any lack of
validity of any Loan Document; (b) the occurrence of any Default; (c) the
existence of any claim, set-off, counterclaim, defense, or other right which
such Lender, the Borrower, or any other Person may have; (d) the occurrence of
any event that has or could reasonably be expected to have a Material Adverse
Effect on the Borrower; (e) the failure of any condition to an advance under
the Loan under Article 7 to be satisfied; (f) the fact that after giving
effect to the funding of the participation the Outstanding Credit may exceed
the aggregate Commitments; or (g) any other circumstance whatsoever, whether
or not similar to any of the foregoing. If a Lender fails to fund its
participation in a Letter of Credit as required hereby, such Lender shall,
subject to the foregoing proviso, remain obligated to pay to the Agent the
amount it failed to fund on demand together with interest thereon in respect
of the period commencing on the date such amount should have been funded until
the date the amount was actually funded to the Agent at a rate per annum equal
to the Federal Funds Rate for such period and the Agent shall be entitled to
offset against any and all sums to be paid to such Lender hereunder the amount
due the Agent under this sentence.
ARTICLE 5
Change in Circumstances
Section 5.1 Increased Cost and Reduced Return.
(a) Increased Cost. If, after the Closing Date, any Regulatory
Change or compliance by any Lender (or its Applicable Lending Office) with
any request or directive (whether or not having the force of law) of any
Governmental Authority, central bank, or comparable agency:
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(i) shall subject such Lender (or its Applicable Lending
Office) to any tax, duty, or other charge with respect to any LIBOR Balances,
its Note, or its obligation to make LIBOR Balances available to the Borrower,
or change the basis of taxation of any amounts payable to such Lender (or its
Applicable Lending Office) under this Agreement or its Note in respect of any
LIBOR Balances (other than franchise taxes or taxes imposed on or measured by
the net income of such Lender by the jurisdiction in which such Lender is
organized, has its principal office or such Applicable Lending Office, or is
doing business);
(ii) shall impose, modify, or deem applicable any reserve,
special deposit, assessment, or similar requirement (other than the Reserve
Requirement utilized in the determination of the Adjusted LIBOR Rate) relating
to any extensions of credit or other assets of, or any deposits with or other
liabilities or commitments of, such Lender (or its Applicable Lending Office),
including the Commitment of such Lender hereunder; or
(iii) shall impose on such Lender (or its Applicable Lending
Office) or the London interbank market any other condition affecting this
Agreement or its Note or any of such extensions of credit or liabilities or
commitments; and the result of any of the foregoing is to increase the cost
actually incurred by such Lender (or its Applicable Lending Office) of making,
Converting into, Continuing, or maintaining any LIBOR Balances or to reduce
any sum received or receivable by such Lender (or its Applicable Lending
Office) under this Agreement or its Note with respect to any LIBOR Balances,
then the Borrower shall pay to such Lender on the Quarterly Payment Date
following such Lender's request such amount or amounts as will compensate such
Lender for such increased cost or reduction. If any Lender requests
compensation by the Borrower under this Section 5.1(a), the Borrower may, by
notice to such Lender (with a copy to the Agent), suspend the obligation of
such Lender to make or maintain LIBOR Balances, or to Convert any portion of
the Prime Rate Balances into LIBOR Balances, until the event or condition
giving rise to such request ceases to be in effect (in which case the
provisions of Section 5.4 shall be applicable); provided that such suspension
shall not affect the right of such Lender to receive the compensation so
requested.
(b) Capital Adequacy. If, after the date hereof, any Lender shall
have determined that any Regulatory Change has the effect of reducing the rate
of return on the capital of such Lender or any corporation controlling such
Lender as a consequence of such Lender's obligations hereunder to a level
below that which such Lender or such corporation could have achieved but for
such adoption, change, request, or directive (taking into consideration
its policies with respect to capital adequacy) by an amount deemed by such
Lender to be material, then from time to time upon demand, the Borrower shall
pay to such Lender such additional amount or amounts as will compensate such
Lender for such reduction.
(c) Claims Under this Section 5.1. Each Lender shall promptly
notify the Borrower and the Agent of any event of which it has knowledge,
occurring after the date hereof, which will entitle such Lender to
compensation pursuant to this Section 5.1 and will designate a different
Applicable Lending Office if such designation will avoid the need for, or
reduce the amount of, such compensation and will not, in the judgment of such
Lender, be otherwise disadvantageous to it. Any Lender claiming compensation
under this Section 5.1 shall furnish to the Borrower and the Agent a statement
setting forth the additional amount or amounts to be paid to it hereunder
which shall be conclusive in the absence of manifest error. In determining
such amount, such Lender may use any reasonable averaging and attribution
methods.
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Section 5.2 Limitation on LIBOR Balances. If on or prior to the first
day of any Interest Period for any LIBOR Balance the Agent determines (which
determination shall be conclusive) that by reason of circumstances affecting
the relevant market, adequate and reasonable means do not exist for
ascertaining the LIBOR Rate for such Interest Period or that the Adjusted
LIBOR Rate will not adequately and fairly reflect the cost to the Lenders of
funding LIBOR Balances for such Interest Period, then the Agent shall give the
Borrower prompt notice thereof specifying the amounts or periods, and so long
as such condition remains in effect, the Lenders shall be under no obligation
to make additional LIBOR Balances available to the Borrower, Continue LIBOR
Balances, or to Convert any portion of the Prime Rate Balance into LIBOR
Balances and the Borrower shall, on the last day(s) of the then current
Interest Period(s) for the outstanding LIBOR Balances, either prepay such
LIBOR Balances or Convert such LIBOR Balances into the Prime Rate Balance in
accordance with the terms of this Agreement; provided that upon the expiration
of such circumstances, the Agent shall promptly inform the Borrower (provided
that the Borrower agrees that the failure or omission of the Agent to inform
the Borrower of such change in circumstances shall not give rise to any
additional liability of the Agent for such failure or omission) or of the
change in such circumstances, and the Borrower shall be permitted to borrow,
Continue, and Convert LIBOR Balances as otherwise permitted by, and in
accordance with, the terms of this Agreement.
Section 5.3 Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to make, maintain, or fund LIBOR Balances hereunder,
then such Lender shall promptly notify the Borrower and the Agent thereof and
such Lender's obligation to make or Continue LIBOR Balances and to Convert any
portion of the Prime Rate Balance into LIBOR Balances shall be suspended until
such time as such Lender may again make, maintain, and fund LIBOR Balances (in
which case the provisions of Section 5.4 shall be applicable).
Section 5.4 Treatment of Affected Balances. If the obligation of any
Lender to make a particular LIBOR Balance available to the Borrower or to
Continue, or to Convert any portion of the Prime Rate Balance into, LIBOR
Balances shall be suspended pursuant to Section 5.1 or Section 5.3 (Balances
of such Type being herein called "Affected Balances"), such Lender's Affected
Balances shall be automatically Converted into the Prime Rate Balances on the
last day(s) of the then current Interest Period(s) for the Affected Balances
(or, in the case of a Conversion required by Section 5.3, on such earlier date
as such Lender may specify to the Borrower with a copy to the Agent) and,
unless and until such Lender gives notice as provided below that the
circumstances specified in Section 5.1 or Section 5.3 that gave rise to such
Conversion no longer exist:
(a) to the extent that such Lender's Affected Balances have been so
Converted, all payments and prepayments of principal that would otherwise be
applied to such Lender's Affected Balances shall be applied instead to its
Prime Rate Balance; and
(b) all advances under the Loan that would otherwise be made or
Continued by such Lender as LIBOR Balances shall be made or Continued instead
as part of the Prime Rate Balance, and all portions of the Prime Rate Balance
of such Lender that would otherwise be Converted into LIBOR Balances shall
remain as all or a portion of the Prime Rate Balance.
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If such Lender gives notice to the Borrower (with a copy to the Agent) that
the circumstances specified in Section 5.1 or Section 5.3 that gave rise to
the Conversion of such Lender's Affected Balances no longer exist (which such
Lender agrees to do promptly upon such circumstances ceasing to exist) at a
time when LIBOR Balances made by other Lenders are outstanding, such Lender's
Prime Rate Balance shall be automatically Converted, on the first day(s) of
the next succeeding Interest Period(s) for such outstanding LIBOR Balances, to
the extent necessary so that, after giving effect thereto, all Balances held
by the Lenders holding LIBOR Balances and by such Lender are held pro rata (as
to principal amounts, Types, and Interest Periods) in accordance with their
respective Commitment Percentages.
Section 5.5 Compensation. Upon the request of any Lender, the
Borrower shall pay to such Lender such amount or amounts as shall be
sufficient to compensate it for any loss, cost, or expense (including, without
limitation, loss of anticipated profits and any such amounts incurred in
connection with syndication of the Loans) incurred by it as a result of:
(a) any payment, prepayment, or Conversion by the Borrower of a
LIBOR Balance for any reason (including, without limitation, the acceleration
of the Loan pursuant to Section 12.2) on a date other than the last day of the
Interest Period for such LIBOR Balance; or
(b) any failure by the Borrower for any reason (including, without
limitation, the failure of any condition precedent specified in Article 7 to
be satisfied) to borrow, Convert, Continue, or prepay a LIBOR Balance on the
date for such borrowing, Conversion, Continuation, or prepayment specified in
the relevant notice of borrowing, prepayment, Continuation, or Conversion
under this Agreement.
Notwithstanding the foregoing provisions of this Section 5.5, if at any time
the mandatory prepayment of the Loan pursuant to Section 4.4(a) would result
in the Borrower incurring breakage costs under this Section 5.5 as a result of
LIBOR Balances being prepaid other than on the last day of an Interest Period
applicable thereto (the "Affected LIBOR Balances"), then the Borrower may in
its sole discretion initially deposit a portion (up to 100%) of the amounts
that otherwise would have been paid in respect of the Affected LIBOR Balances
with the Agent (which deposit, after giving effect to interest to be earned on
such deposit prior to the last day of the relevant Interest Periods, must be
equal in amount to the amount of Affected LIBOR Balances not immediately
prepaid) to be held as security for the obligations of the Borrower hereunder
pursuant to a cash collateral agreement to be entered into in form and
substance satisfactory to the Agent, with such cash collateral to be directly
applied upon the first occurrence (or occurrences) thereafter of the last day
of an Interest Period applicable to the Affected LIBOR Balances (or such
earlier date or dates as shall be requested by the Borrower), to repay an
aggregate principal amount of the Loan equal to the Affected LIBOR Balances
not initially repaid pursuant to this sentence.
Section 5.6 Taxes.
(a) Withholding Taxes. Except as otherwise provided in this
Agreement, any and all payments by the Borrower or any Guarantor to or for the
account of any Lender, the Agent, or the Fronting Bank hereunder or under any
other Loan Document shall be made free and clear of and without deduction for
any and all present or future taxes, duties, levies, imposts, deductions,
charges, or withholdings, and all liabilities with respect thereto,
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excluding, in the case of each Lender, the Agent, or the Fronting Bank (as
applicable), taxes imposed on or measured by its income, and franchise taxes
imposed on it, by the jurisdiction under the laws of which such Lender (or its
Applicable Lending Office), the Agent, or the Fronting Bank (as the case may
be) is organized, located, or doing business or any political subdivision
thereof (all such non-excluded taxes, duties, levies, imposts, deductions,
charges, withholdings, and liabilities to the extent paid are hereinafter
referred to as "Taxes"). If the Borrower or any Guarantor shall be required
by law to deduct any Taxes from or in respect of any sum payable under any
Loan Document to any Lender, the Agent, or the Fronting Bank (as applicable),
(i) the sum payable shall be increased as necessary so that after making
all required deductions (including, without limitation, deductions applicable to
additional sums payable under this Section 5.6) such Lender, the Agent, or the
Fronting Bank (as applicable) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower or any Guarantor,
as applicable, shall make such deductions, (iii) the Borrower or any Guarantor,
as applicable, shall pay the full amount deducted to the relevant taxing
authority or other authority in accordance with applicable law, and (iv) the
Borrower or any Guarantor, as applicable, shall furnish to the Agent the
original or a certified copy of a receipt evidencing payment thereof.
(b) Stamp Taxes, Etc. In addition, the Borrower agrees to pay any
and all present or future stamp or documentary taxes and any other excise or
property taxes or charges or similar levies which arise from, and are paid as
a result of, any payment made under this Agreement or any other Loan Document
or from the execution or delivery of, or otherwise with respect to, this
Agreement or any other Loan Document ("Other Taxes").
(c) Tax Indemnification. THE BORROWER AGREES TO INDEMNIFY EACH
LENDER, THE AGENT-RELATED PERSONS, AND THE FRONTING BANK FOR THE FULL AMOUNT OF
TAXES AND OTHER TAXES (INCLUDING, WITHOUT LIMITATION, ANY "TAXES" OR "OTHER
TAXES" IMPOSED OR ASSERTED BY ANY JURISDICTION ON AMOUNTS PAYABLE UNDER THIS
SECTION 5.6) PAID BY SUCH LENDER, ANY AGENT-RELATED PERSON, OR THE FRONTING BANK
(AS THE CASE MAY BE) AND ANY LIABILITY (INCLUDING, WITHOUT LIMITATION,
PENALTIES, INTEREST, AND EXPENSES) ARISING THEREFROM OR WITH RESPECT THERETO,
OTHER THAN PENALTIES, ADDITIONS TO TAX, INTEREST, AND EXPENSES ARISING AS A
RESULT OF GROSS NEGLIGENCE OR WILLFUL MISCONDUCT ON THE PART OF SUCH LENDER OR
AGENT-RELATED PERSON.
Section 5.7 Withholding Tax Exemption. Each Lender organized under
the laws of a jurisdiction outside the U.S., on or prior to the date of its
execution and delivery of this Agreement in the case of each Lender listed on
the signature pages hereof and on or prior to the date on which it becomes a
Lender in the case of each other Lender, and from time to time thereafter if
requested in writing by the Borrower or the Agent (but only so long as such
Lender remains lawfully able to do so), shall provide the Borrower and the
Agent with (a) if such Lender is a "bank" within the meaning of Section
881(c)(3)(A) of the Code, (i) Internal Revenue Service Form 1001 or 4224, as
appropriate, or any successor form prescribed by the Internal Revenue Service,
certifying that such Lender is entitled to benefits under an income tax treaty
to which the U.S. is a party which reduces to zero the rate of withholding tax
on payments of interest or certifying that the income receivable pursuant to
this Agreement is effectively connected with the conduct of a trade or
business in the U.S., (ii) Internal Revenue Service Form W-8 or W-9, as
appropriate, or any successor form prescribed by the Internal Revenue Service,
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and (iii) any other form or certificate required by any taxing authority
(including, without limitation, any certificate required by Sections 871(h)
and 881(c) of the Code), certifying that such Lender is entitled to a complete
exemption from tax on payments pursuant to any of the Loan Documents or (b) if
such Lender is not a "bank" within the meaning of Section 881(c)(3)(A) of the
Code, a Form W-8, o r any subsequent versions thereof or successors thereto
(and, if such non-U.S. Lender delivers a Form W-8, a certificate (including,
without limitation, any certificate required by Section 871(h) and Section
881(c) of the Code) representing that such non-U.S. Lender is not a bank for
purposes of Section 881(c) of the Code, is not a 10-percent shareholder
(within the meaning of Section 871(h)(3)(B) of the Code) of the Borrower and
is not a controlled foreign corporation related to the Borrower (within the
meaning of Section 864(d)(4) of the Code)), properly completed and duly
executed by such non-U.S. Lender claiming complete exemption from U.S. federal
withholding tax on payments of interest by the Borrower under this Agreement
and the other Loan Documents. For any period with respect to which a Lender
has failed to provide the Borrower and the Agent with the appropriate form
pursuant to this Section and thereby to establish complete exemption from U.S.
withholding tax (unless such failure to establish complete exemption from U.S.
withholding tax is due to a change in treaty, law, or regulation occurring
subsequent to the date on which a form originally was required to be
provided), (A) the Borrower or Guarantor, as applicable, shall deduct all
required Taxes from any amounts payable to such Lender under any Loan
Document, (B) the Borrower or Guarantor, as applicable, shall pay the full
amount allocated to the relevant taxing authority or other authority in
accordance with applicable law, (C) the Borrower or Guarantor, as applicable,
shall furnish to the Agent the original or a certified copy of a receipt
evidencing payment thereof, and (D) such Lender shall not be entitled to an
indemnification or increases in the sum payable under Section 5.6 or Section
14.2 with respect to Taxes imposed by the U.S.; provided, however, that should
a Lender, which is otherwise exempt from or subject to a reduced rate of
withholding tax, become subject to Taxes because of its failure to deliver a
form required hereunder, the Borrower shall take such steps as such Lender
shall reasonably request to assist such Lender to recover such Taxes.
Section 5.8 Replacement of Lender. Within thirty (30) days after
receipt by the Borrowers of written notice and demand from any Lender under
the terms of Section 5.1 or Section 5.3 then, subject to this Section 5.8, the
Borrower may, at its option, notify the Agent and such Lender (the "Affected
Lender") of the Borrower's intention to obtain, at the Borrower's sole
expense, a replacement Lender ("Replacement Lender") to purchase the Affected
Lender's Loan and its obligations under the Loan Documents. Subject to this
Section 5.8, the Borrower shall, within thirty (30) days following the
delivery of such notice from the Borrower, cause the Replacement Lender to
purchase (and the Affected Lender hereby agrees to sell and convey to such
Replacement Lender) the outstanding Loan and other obligations of the Affected
Lender and assume the Affected Lender's Commitment and obligations hereunder
in accordance with the terms of an Assignment and Acceptance for cash in an
aggregate amount equal to the aggregate unpaid principal of the Loan and other
Obligations held by such Affected Lender, all unpaid interest and fees accrued
thereon or with respect thereto, and all other Obligations owed to such
Affected Lender, including amounts owed under Section 5.1 and/or Section 5.3.
Notwithstanding the foregoing (a) the Borrower shall continue to be obligated
to pay to the Affected Lender in full, without duplication of any payments
previously made by the Borrower, all amounts then demanded and due under
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Section 5.1 and/or Section 5.3 in accordance with the terms of this Agreement,
(b) neither the Agent nor any Lender shall have any obligation to find a
Replacement Lender, (c) the Replacement Lender must be acceptable to the Agent
in its reasonable discretion (such approval to be deemed given if notice of
the Agent's objection to the Replacement Lender is not delivered to the
Borrower within five (5) Business Days after the Agent's receipt of the
Borrower's request to add the Replacement Lender), and (d) Bank One or any
other Lender which is the Agent hereunder may not be replaced as a Lender
under this Section 5.8 without its consent. If the Borrower elects to replace
any Affected Lender, the Borrower must replace all Affected Lenders as set
forth in this Section, each such replacement to occur within a reasonable
period of time not to exceed sixty (60) days from the date such Affected
Lender requested any payment under Section 5.1 and/or Section 5.3.
ARTICLE 6
Guaranties
Section 6.1 Guaranties. Each of 3557944 Canada Inc., ShowBiz
Merchandise, Inc., and Smintheus Incorporated shall Guarantee payment and
performance of the Obligations pursuant to the Subsidiary Guaranty.
Additionally, the Borrower shall cause one or more of its other Subsidiaries
to Guarantee payment and performance of the Obligations pursuant to the
Subsidiary Guaranty as set forth in this Section 6.1. The Borrower's
Subsidiaries which are not Guarantors shall not, in the aggregate, at any time
have assets with a net book value in excess of $8,000,000 or gross revenue for
the most recently completed four (4) Fiscal Quarters, beginning with the four
(4) Fiscal Quarters ending October 1, 2000, in excess of $8,000,000. In the
event that the Borrower's Subsidiaries which are not Guarantors have assets or
gross revenue in excess of $8,000,000 as set forth in the preceding sentence,
the Borrower will cause one or more of its Subsidiaries to become a Guarantor
as prescribed in Section 6.2 with the effect that the assets and gross revenue
of the remaining Subsidiaries which are not Guarantors, as required by this
Section 6.1, do not exceed $8,000,000 as of such date.
Section 6.2 New Guarantors. Contemporaneously with the delivery of
the financial statements as required by Section 9.1(a) and Section 9.1(b), if
a Subsidiary of the Borrower is required to become a Guarantor pursuant to
Section 6.1, the Borrower shall cause such Subsidiary to Guarantee the payment
and performance of the Obligations by executing and delivering to the Agent a
Joinder Agreement pursuant to which such Subsidiary of the Borrower becomes a
Guarantor under this Agreement.
ARTICLE 7
Conditions Precedent
Section 7.1 Initial Loans and Letters of Credit. The obligation of
each Lender to make its initial advance of the Loan is subject to the
following conditions precedent:
(a) Deliveries. The Agent shall have received on or before the
Closing Date and on or before the day of such advance all of the following,
each dated (unless otherwise indicated) the Closing Date, in form and
substance satisfactory to the Agent and the Lenders:
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(i) Resolutions; Authority. For each of the Borrower and the
Guarantors, resolutions of its board of directors (or similar governing body)
certified by its Secretary or an Assistant Secretary which authorize its
execution, delivery, and performance of the Loan Documents to which it is or
is to be a party;
(ii) Incumbency Certificate. For each of the Borrower and the
Guarantors, a certificate of incumbency certified by the Secretary
or an Assistant Secretary certifying the names of its officers (A) who are
authorized to sign the Loan Documents to which it is or is to be a party
(including, without limitation, the certificates contemplated herein) together
with specimen signatures of each such officer and (B) who will, until replaced
by other officers duly authorized for that purpose, act as its representatives
for the purposes of signing documentation and giving notices and other
communications in connection with this Agreement and the transactions
contemplated hereby;
(iii) Organizational Documents. For each of the Borrower
and the Guarantors, the certificate of incorporation, certificate of
formation, certificate of limited partnership, or other similar document
certified by the Secretary of State of the state of its incorporation,
formation, or organization and dated no more than thirty(30) days prior to the
Closing Date;
(iv) Bylaws. For each of the Borrower and the Guarantors, the
bylaws, operating agreement, partnership agreement, or similar agreement
certified by its Secretary or an Assistant Secretary;
(v) Governmental Certificates. For each of the Borrower and
the Guarantors, certificates of the appropriate Governmental Authorities of
the state of incorporation, formation, or organization as to its existence
and, to the extent applicable good standing, and certificates of the
appropriate Governmental Authorities of each state in which such Person
conducts business, other than the state of incorporation of such Person, as to
such Person's qualification to do business and good standing in such state,
all dated no more than thirty (30) days prior to the Closing Date;
(vi) Credit Agreement. This Agreement, together with all
Schedules, Exhibits, and other attachments (if any), duly executed by the
Borrower, the Agent, and the Lenders;
(vii) Notes. The Notes executed by the Borrower dated the date
hereof;
(viii) Subsidiary Guaranty. The Subsidiary Guaranty executed
by each of the Guarantors;
(ix) Lien Search Reports.
(A) UCC, tax, and judgment Lien search reports listing
all documentation on file against the Borrower and each Guarantor in each
jurisdiction in which such Person maintains any personal property;
(B) Federal tax Lien search reports with respect to the
Borrower and each Guarantor;
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(x) Termination or Assignment of Liens. Duly executed UCC-3
termination statements, mortgage releases, and such other documentation as shall
be necessary to terminate or release all Liens other than those permitted by
Section 10.2;
(xi) Consents. Copies of all material consents or waivers
necessary for the execution, delivery, and performance by each the Borrower
and each Guarantor of the Loan Documents to which it is a party, as the Agent
may require, which consents shall be certified by an authorized representative
of the Borrower or such Guarantor,as applicable, as true and correct copies of
such consents as of the Closing Date;
(xii) Opinions of Counsel. Satisfactory opinions of legal
counsel to the Borrower and the Guarantors as to such matters as the Agent may
request;
(xiii) Fees. Payment of the fees set forth in the Agent's
Letter; and
(xiv) Letter of Direction. A letter of direction from the
Borrower addressed to the Agent with respect to the disbursement of the
proceeds of the initial advance under the Loan;
(b) Attorney Costs. The Attorney Costs referred to in Section 14.1
for which statements have been presented shall have been paid in full (or
shall be paid with the proceeds of the initial advance under the Loan made on
the Closing Date);
(c) Compliance with Laws. As of the Closing Date, each Person that
is a party to this Agreement or any of the other Loan Documents shall have
complied with all requirements of any Governmental Authority necessary to
consummate the transactions contemplated by this Agreement and the other Loan
Documents;
(d) No Prohibitions. No requirement of any Governmental Authority
shall prohibit the consummation of the transactions contemplated by this
Agreement or any other Loan Document, and no order, judgment, ruling,
injunction, or decree of any Governmental Authority or arbitrator shall, and
no litigation or other proceeding shall be pending or threatened which would,
enjoin, prohibit, restrain, or otherwise adversely affect in any material
manner the consummation of the transactions contemplated by this Agreement or
the other Loan Documents or could have a Material Adverse Effect;
(e) No Material Adverse Change. As of the Closing Date, no
material adverse change shall have occurred with respect to the business,
assets, liabilities (actual or contingent), operations, financial condition,
or prospects of the Borrower (individually) or the Borrower and its
Subsidiaries (taken as a whole) since April 2, 2000;
(f) No Material Litigation. Except as set forth in Schedule 8.5,
as of the Closing Date, no action, suit, investigation, or proceeding shall be
pending or threatened before any Governmental Authority that purports to
affect the Borrower or any of its Subsidiaries that could have a Material
Adverse Effect;
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(g) Compliance With Financial and Other Obligations. As of the
Closing Date, the Borrower and each of its Subsidiaries shall be in compliance
with all of its respective existing financial obligations, and no default or
event of default shall be in existence (either before or after giving effect
to this Agreement) under any Capital Stock or Debt of the Borrower or any
Subsidiary of the Borrower;
(h) Capital Structure. The corporate capital and ownership
structure (including, without limitation, articles of incorporation and
by-laws), shareholders agreements, and management structure of the Borrower
and its Subsidiaries shall be satisfactory to the Agent as of the date of this
Agreement;
(i) No Material Market Changes. The absence of any material
disruption of or material adverse change in conditions in the financial,
banking, or capital markets which the Agent and Banc One Capital Markets, Inc.
in their sole discretion, deem material in connection with the syndication of
the Commitment and the Loan provided to the Borrower pursuant to the terms of
this Agreement; and
(j) Additional Documentation. The Agent and the Lenders shall have
received such additional approvals and opinions as the Agent or any Lender may
reasonably request.
Section 7.2 All Advances and Letters of Credit. The obligation of
each Lender to make any advance under the Loan (including, without limitation,
the initial advance) and the obligation of the Fronting Bank to issue any
Letter of Credit are subject to the following additional conditions
precedent:
(a) No Default. No Default shall have occurred and be continuing,
or would result from such Loan or Letter of Credit;
(b) Representations and Warranties. All of the representations and
warranties contained in Article 8 and in the other Loan Documents shall be
true and correct in all material respects on and as of the date of such Loan
or Letter of Credit with the same force and effect as if such representations
and warranties had been made on and as of such date except to the extent that
such representations and warranties relate specifically to another date;
(c) Governmental Restrictions. There shall be no governmental
inquiries, injunctions, or restraining orders instituted or pending, or any
statute or rule enacted, promulgated, entered, or enforced which could have a
Material Adverse Effect; and
(d) No Material Adverse Effect. No Material Adverse Effect shall
have occurred.
Each notice of borrowing by the Borrower hereunder, and each request for the
issuance of a Letter of Credit, shall constitute a representation and warranty
by the Borrower that the conditions precedent set forth in this Section 7.2
have been satisfied (both as of the date of such notice and, unless the
Borrower otherwise notifies the Agent prior to the date of such borrowing or
Letter of Credit, as of the date of such borrowing or Letter of Credit).
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ARTICLE 8
Representations and Warranties
To induce the Agent and the Lenders to enter into this Agreement, the
Borrower represents and warrants that the following statements are and, after
giving effect to the transactions contemplated hereby will be, true, correct,
and complete:
Section 8.1 Existence, Power, and Authority.
(a) The Borrower and each of the Guarantors is (i) a corporation,
duly organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation; (ii) has all requisite power and authority
to own its assets and carry on its business as now being or as proposed to be
conducted; and (iii) is qualified to do business in all jurisdictions in which
the nature of its business makes such qualification necessary and where
failure to so qualify could have a Material Adverse Effect;
(b) The Borrower and each of the Guarantors has the power and
authority to execute, deliver, and perform its respective obligations under
the Loan Documents to which it is or may become a party.
Section 8.2 Financial Condition.
(a) Financial Statements. The Borrower has delivered to the Agent
and each Lender the audited financial statements of the Borrower and its
Subsidiaries as of and for the
(i) Fiscal Year ended January 2, 2000, and (ii) the Fiscal Quarter ended
April 2, 2000. Such financial statements have been prepared in accordance
with GAAP, and present fairly, the financial condition of the Borrower and its
Subsidiaries as of the respective dates indicated therein and the results of
operations for the respective periods indicated therein. Neither the
Borrower nor any of its Subsidiaries has any material contingent liabilities,
liabilities for taxes, unusual forward or long-term commitments, or unrealized
or anticipated losses from any unfavorable commitments except as referred to
or reflected in the financial statements referred to in clause (ii) preceding.
Since the date of the financial statements referred to in clause (ii)
preceding, no material adverse change has occurred with respect to the
business, assets, liabilities (actual or contingent), operations, condition
(financial or otherwise), or prospects of the Borrower (individually) or of
the Borrower and its Subsidiaries (taken as a whole).
(b) Projections. The Projections delivered by the Borrower to the
Agent and included in the Offering Memorandum have been prepared by the
Borrower in light of the past operation of the business of the Borrower and
its Subsidiaries. Such Projections represent, as of the date thereof, a good
faith estimate by the Borrower and its senior management of the financial
conditions and performance of the Borrower and its Subsidiaries based on
assumptions believed to be reasonable at the time made.
Section 8.3 Corporate and Similar Action; No Breach. The execution,
delivery, and performance by the Borrower and each of the Guarantors of the
Loan Documents to which it is or may become a party and compliance with the
terms and provisions thereof have been duly authorized by all requisite action
on the part of the Borrower and each of the Guarantors, respectively, and do
not and will not (a) violate or conflict with, or result in a breach of, or
require any consent under (i) the articles of incorporation or bylaws of such
Person, (ii) any applicable law, rule, or regulation or any order, writ,
injunction, or decree of any Governmental Authority or arbitrator, or (iii)
any agreement or instrument to which such Person is a party or by which any of
them or any of their property is bound or subject, or (b) constitute a default
under any such agreement or instrument, or result in the creation or
imposition of any Lien upon any of the revenues or assets of such Person.
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Section 8.4 Operation of Business. Each of the Borrower and the
Guarantors possesses all material licenses, Permits, franchises, patents,
copyrights, trademarks, and tradenames, or rights thereto, necessary to
conduct its business substantially as now conducted and as presently proposed
to be conducted, and neither the Borrower nor any of the Guarantors is in
violation of any valid rights of others with respect to any of the foregoing
where such violation could have a Material Adverse Effect. Except as set
forth in Schedule 8.4, since March 31, 2000, the Borrower and its Subsidiaries
have conducted their respective businesses only in the ordinary and usual
course.
Section 8.5 Litigation and Judgments. Except as set forth in Schedule
8.5, there is no action, suit, investigation, or proceeding before or by any
Governmental Authority or arbitrator pending or threatened against or
affecting the Borrower or any of the Guarantors which could have a Material
Adverse Effect. As of the Closing Date, except as set forth in Schedule 8.5,
there are no outstanding judgments against the Borrower or any of the
Guarantors.
Section 8.6 Rights in Properties; Liens. The Borrower and each of the
Guarantors has good title to or valid leasehold interests in its respective
Properties, real and personal, including, as of the Closing Date, the
Properties and leasehold interests reflected in the financial statements
described in Section 8.2, and none of such Properties or leasehold interests
of the Borrower or any of the Guarantors is subject to any Lien, except as
permitted by Section 10.2. As of the Closing Date, Schedule 8.6 sets forth
the locations of all of the offices and other places of business of the
Borrower and the Guarantors and the locations of all of the Properties of the
Borrower and the Guarantors.
Section 8.7 Enforceability. The Loan Documents to which the Borrower
or any Guarantor is a party, when delivered, shall constitute the legal,
valid, and binding obligations of the Borrower or such Guarantor, as
applicable, enforceable against such Person in accordance with their
respective terms, except as limited by bankruptcy, insolvency, or other laws
of general application relating to the enforcement of creditors' rights and
general principles of equity.
Section 8.8 Approvals. No authorization, approval, or consent of, and
no filing or registration with, any Governmental Authority or other third
party is or will be necessary for the execution, delivery, or performance by
the Borrower or any Guarantor of the Loan Documents to which it is or may
become a party or for the validity or enforceability thereof.
Section 8.9 Debt. Except as set forth in Schedule 8.9, neither the
Borrower nor any of its Subsidiaries has any Debt, except as permitted by
Section 10.1.
Section 8.10 Taxes. Except as set forth in Schedule 8.10 or, after the
Closing Date, matters which do not violate Section 9.4, the Borrower and each
Subsidiary of the Borrower have filed all tax returns (federal, state, and
local) required to be filed, including all income, franchise,
employment, property, and sales tax returns, and have paid all of their
respective liabilities for taxes, assessments, governmental charges, and other
levies that are due and payable other than those being contested in good faith
by appropriate proceedings diligently pursued for which adequate reserves have
been established in accordance with GAAP. Except as set forth in Schedule
8.10 or, after the Closing Date, matters which do not violate Section 9.4, the
Borrower does not have knowledge of any pending investigation of the Borrower
or any Subsidiary of the Borrower by any taxing authority with respect to any
liability for tax or of any pending but unassessed tax liability of the
Borrower or any Subsidiary of the Borrower.
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Section 8.11 Margin Securities. Neither the Borrower nor any of its
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of buying or carrying margin
stock (within the meaning of Regulations T, U, or X of the Board of Governors
of the Federal Reserve System), and no part of the proceeds of the Loan will
be used to buy or carry any margin stock or to extend credit to others for the
purpose of buying or carrying margin stock; provided that, proceeds of the
Loan may be used to acquire shares of the Borrower's common stock in
accordance with the provisions of Section 2.4.
Section 8.12 ERISA. With respect to each Plan, the Borrower and each
Subsidiary of the Borrower is in compliance with all applicable provisions of
ERISA. Neither a Reportable Event nor a Prohibited Transaction has occurred
and is continuing with respect to any Plan. No notice of intent to terminate a
Plan has been filed, nor has any Plan been terminated. As of the Closing
Date, no circumstances exist which constitute grounds entitling the PBGC to
institute proceedings to terminate, or appoint a trustee to administer, a
Plan, nor has the PBGC instituted any such proceedings. Neither the Borrower
nor any of its Subsidiaries nor any ERISA Affiliate has completely or
partially withdrawn from a Multiemployer Plan. The Borrower each Subsidiary
of the Borrower, and each ERISA Affiliate have met their minimum funding
requirements under ERISA with respect to each Plan. Except as set forth in
Schedule 8.12, the present value of all vested benefits under each Plan do not
exceed the fair market value of all Plan assets allocable to such benefits, as
determined on the most recent valuation date of the Plan and in accordance
with ERISA. Neither the Borrower, any of its Subsidiaries, nor any ERISA
Affiliate has any outstanding liability to the PBGC under ERISA (other than
liability for the payment of PBGC premiums in the ordinary course of
business).
Section 8.13 Disclosure. All factual information furnished by or on
behalf of the Borrower or any Subsidiary of the Borrower to the Agent or any
Lender for purposes of or in connection with this Agreement, the other Loan
Documents, or any transaction contemplated herein or therein is, and all other
such factual information hereafter furnished by or on behalf of the Borrower
or any Subsidiary of the Borrower to the Agent or any Lender, will be true and
accurate in all material respects on the date as of which such information is
dated or certified and not incomplete by omitting to state any fact necessary
to make such information not misleading in any material respect at such time
in light of the circumstances under which such information was provided.
Section 8.14 Subsidiaries; Capitalization. As of the Closing Date, the
Borrower has no Subsidiaries other than those listed in Schedule 8.14 and,
excluding 3557944 Canada Inc., ShowBiz Merchandise, Inc., and Smintheus
Incorporated, the aggregate value of all assets of the Borrower's Subsidiaries
does not equal or exceed $8,000,000 and the aggregate revenues of such
Subsidiaries during the twelve (12) month period ended July 2, 2000 does not
equal or exceed $8,000,000. As of the Closing Date, Schedule 8.14 sets forth
the jurisdiction of incorporation or organization of the Borrower and its
Subsidiaries, the percentage of the Borrower's ownership of the outstanding
Voting Stock of each Subsidiary of the Borrower, and the authorized, issued,
and outstanding Capital Stock of the Borrower and each Subsidiary of the
Borrower. All of the outstanding Capital Stock of the Borrower and its
Subsidiaries has been validly issued, is fully paid, is nonassessable, and has
not been issued in violation of any preemptive or similar rights. Except as
disclosed in Schedule 8.14, there are (a) no outstanding subscriptions,
options, warrants, calls, or rights (including, without limitation, preemptive
rights) to acquire, and no outstanding securities or instruments convertible
into, Capital Stock of the Borrower or any of its Subsidiaries, and (b) no
shareholder agreements, voting trusts, or similar agreements in effect and
binding on any shareholder of the Borrower or any of its Subsidiaries or the
Capital Stock of the Borrower or any of its Subsidiaries. All shares of
Capital Stock of the Borrower and its Subsidiaries were issued in compliance
with all applicable state and federal securities laws.
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Section 8.15 Agreements. Except as set forth in Schedule 8.15, neither
the Borrower nor any of its Subsidiaries is a party to any indenture, loan, or
credit agreement, or to any lease or other agreement or instrument, or subject
to any charter or corporate restriction that could have a Material Adverse
Effect. Neither the Borrower nor any of its Subsidiaries is in default, or
has knowledge of facts or circumstances that with the giving of notice or
passage of time or both could be expected to result in a default, in any
respect in the performance, observance, or fulfillment of any of the
obligations, covenants, or conditions contained in any agreement or instrument
(including, without limitation, any indenture, loan, or credit agreement, or
any lease or other similar agreement or instrument) to which it is a party
where such default could have a Material Adverse Effect.
Section 8.16 Compliance with Laws. Neither the Borrower nor any of its
Subsidiaries is in violation of any law, rule, regulation, order, or decree of
any Governmental Authority or arbitrator except for minor violations which
could not have a Material Adverse Effect.
Section 8.17 Investment Company Act. Neither the Borrower nor any of
its Subsidiaries is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
Section 8.18 Public Utility Holding Company Act. Neither the Borrower
nor any of its Subsidiaries is a "holding company" or a "subsidiary company"
of a "holding company" or an "affiliate" of a "holding company" or a "public
utility" within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
Section 8.19 Environmental Matters.
Except as disclosed on Schedule 8.19:
(a) the Borrower, each Subsidiary of the Borrower, and all of their
respective properties, assets, and operations are in compliance with all
Environmental Laws. Neither the Borrower nor any of its Subsidiaries is aware
of, nor has the Borrower or any Subsidiary of the Borrower received notice of,
any past, present, or future conditions, events, activities, practices, or
incidents which interfere with or prevent the compliance or continued
compliance of the Borrower or its Subsidiaries with all Environmental Laws;
(b) the Borrower and its Subsidiaries have obtained and maintained,
and are in material compliance with, all material Permits, licenses, and
authorizations that are required under applicable Environmental Laws;
(c) except in compliance in all material respects with applicable
Environmental Laws, during the course of the Borrower's or any of its
Subsidiaries' ownership of or operations on any real Property, there has been
no generation, treatment, recycling, storage,or disposal of hazardous waste,
as that term is defined in 40 CFR Part 261 or any state equivalent, use of
underground storage tanks or surface impoundments, use of asbestos
containing materials, or use of polychlorinated biphenyls (PCB) used in
hydraulic oils,electrical transformers, or other equipment, and the use which
the Borrower and its Subsidiaries make and intend to make of their respective
properties and assets will not result in the use, generation, storage,
transportation, accumulation, disposal, or Release of any Hazardous Material
on, in, or from any of their properties or assets (other than lubricants,
cleaning solutions, and similar materials used for maintenance in the ordinary
course of business);
(d) neither the Borrower, any of its Subsidiaries, nor any of their
respective currently or previously owned or leased Properties or operations is
subject to any outstanding or threatened order from or agreement with any
Governmental Authority or other Person or subject to any judicial or
administrative proceeding with respect to (i) failure to comply with
Environmental Laws, (ii) Remedial Action, or (iii) any Environmental
Liabilities arising from a Release or threatened Release;
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(e) there are no conditions or circumstances associated with the
currently or previously owned or leased Properties or operations of the
Borrower or any Subsidiary of the Borrower that could reasonably be expected
to result in any Environmental Liabilities;
(f) neither the Borrower nor any of its Subsidiaries is or operates
a treatment,storage, or disposal facility requiring a permit under the
Resource Conservation and Recovery Act, 42 U.S.C. 6901 et seq., the
regulations thereunder, or any comparable provision of state law. Except as
could not have a Material Adverse Effect, the Borrower and each Subsidiary of
the Borrower is in compliance with all applicable financial responsibility
requirements of all applicable Environmental Laws;
(g) neither the Borrower nor any of its Subsidiaries has filed or
failed to file any notice required under applicable Environmental Law
reporting an unauthorized Release; and
(h) no Lien arising under any Environmental Law has attached to any
property or revenues of the Borrower or any Subsidiary of the Borrower.
Section 8.20 Broker's Fees. Except as disclosed on Schedule 8.20, no
broker's or finder's fee, commission, or similar compensation will be payable
by the Borrower or any Subsidiary of the Borrower with respect to the Borrower
entering into and performing under this Agreement.
Section 8.21 Employee Matters. Except as set forth on Schedule 8.21,
as of the Closing Date (a) neither the Borrower nor any of its Subsidiaries,
nor any of their respective employees, is subject to any collective bargaining
agreement, (b) no petition for certification or union election is pending with
respect to the employees of the Borrower or any Subsidiary of the Borrower and
no union or collective bargaining unit has sought such certification or
recognition with respect to the employees of the Borrower or any Subsidiary of
the Borrower, and (c) there are no strikes, slowdowns, work stoppages, or
controversies pending or, to the best knowledge of the Borrower and the
Subsidiaries of the Borrower after due inquiry, threatened between the
Borrower or any Subsidiary of the Borrower and its respective employees.
Section 8.22 Solvency. As of the Closing Date, each of the Borrower
and the Guarantors, individually and on a consolidated basis, is Solvent. On
the date of each borrowing of any Balance under this Agreement, the Borrower,
individually, and the Borrower and the Guarantors, on a consolidated basis,
will be solvent.
ARTICLE 9
Affirmative Covenants
The Borrower covenants and agrees that, as long as the Obligations or any
part thereof are outstanding, any Lender has any Commitment hereunder or any
Letter of Credit remains outstanding, it will perform and observe the
following covenants:
Section 9.1 Reporting Requirements. The Borrower will furnish to the
Agent and each Lender:
(a) Annual Financial Statements. As soon as available, and in any
event within ninety (90) days after the end of each Fiscal Year of the
Borrower, beginning with the Fiscal Year ending December 31, 2000, (i) a copy
of the annual audit report of the Borrower for such Fiscal Year containing, on
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a consolidated basis, a balance sheet and statements of income, retained
earnings, and cash flow as at the end of such Fiscal Year and for the Fiscal
Year then ended, in each case setting forth in comparative form the figures
for the preceding Fiscal Year, all in reasonable detail and audited and
certified on an unqualified basis by a "Big Five" firm of independent
certified public accountants or other independent certified public accountants
of recognized standing selected by the Borrower and reasonably acceptable to
the Agent, to the effect that such report has been prepared in accordance with
GAAP; and (ii) a copy of the annual unaudited report of the Borrower and its
Subsidiaries for such Fiscal Year containing, on a consolidating basis balance
sheets and statements of income, retained earnings, and cash flow as at the
end of such Fiscal Year and for the Fiscal Year then ended, in each case
setting forth in comparative form the figures for the preceding Fiscal Year,
and in reasonable detail certified by the chief executive officer or chief
financial officer of the Borrower to have been prepared in accordance with
GAAP and to fairly present the financial condition and results of operation of
the Borrower and its Subsidiaries, on a consolidating basis at the date and
for the Fiscal Year then ended;
(b) Quarterly Financial Statements. As soon as available, and in
any event within forty-five (45) days after the end of each of the first three
Fiscal Quarters beginning with the Fiscal Quarter ending July 2, 2000, a copy
of an unaudited financial report of the Borrower and its Subsidiaries as of
the end of such period and for the portion of the Fiscal Year then ended
containing, on a consolidated basis, a balance sheet and statements of income,
retained earnings, and cash flow, in each case setting forth in comparative
form the figures for the corresponding period of the preceding Fiscal Year,
all in reasonable detail certified by the chief executive officer or chief
financial officer of the Borrower to have been prepared in accordance with
GAAP and to fairly present the financial condition and results of operations
of the Borrower and its Subsidiaries on a consolidated basis, at the date and
for the periods indicated therein, subject to year-end audit adjustments;
(c) Compliance Certificate. As soon as available, and in any event
accompanying the financial statements delivered in accordance with Section
9.1(a) and Section 9.1(b), a Compliance Certificate, together with schedules
setting forth the calculations supporting the computations therein;
(d) Applicable Rate Certificate. Concurrently with the delivery of
each of the financial statements referred to in Section 9.1(b) and within
ninety (90) days after the end of each Fiscal Year of the Borrower, a
certificate of the chief financial officer of the Borrower showing in
reasonable detail the calculation required for the Agent to determine
the Applicable Rate;
(e) Notice of Litigation, Etc. Promptly after receipt by the
Borrower or any Subsidiary of the Borrower of notice of the commencement
thereof, notice of all actions, suits, and proceedings before any Governmental
Authority or arbitrator affecting the Borrower or any Subsidiary of the
Borrower which, if determined adversely to the Borrower or such Subsidiary of
the Borrower, could have a Material Adverse Effect;
(f) Notice of Default. As soon as possible and in any event within
two (2) Business Days after the chief executive officer, president, chief
financial officer, any vice president, secretary, assistant secretary,
treasurer, or any assistant treasurer of the Borrower has knowledge of the
occurrence of a Default, a written notice setting forth the details of such
Default and the action that the Borrower has taken and proposes to take with
respect thereto;
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(g) ERISA. As soon as possible and in any event within thirty (30)
days after the Borrower or any Subsidiary of the Borrower knows, or has reason
to know, that(i) any Termination Event with respect to a Plan has occurred or
will occur,(ii) the aggregate present value of the Unfunded Vested Accrued
Benefits under all Plans is equal to an amount in excess of $0, or (iii)the
Borrower or any Subsidiary of the Borrower is in "default" (as defined in
Section 4219(c)(5) of ERISA) with respect to payments to a Multiemployer Plan
required by reason of the Borrower's or any of its Subsidiaries' complete or
partial withdrawal (as described in Section 4203 or 4205 of ERISA)from such
Multiemployer Plan, the Borrower will provide the Agent and the Lenders with a
certificate of its president or its chief financial officer setting forth the
details of such event and the action which is proposed to be taken with
respect thereto, together with any notice or filing which may be required by
the PBGC or any other Governmental Authority with respect to such event;
(h) Notice of Material Adverse Effect. As soon as possible and in
any event within two (2) Business Days of the discovery of any event or
condition that could have a Material Adverse Effect;
(i) Proxy Statements, Periodic Reporting, Etc. As soon as
available, one copy of each financial statement, report, notice, or proxy
statement sent by the Borrower or any Subsidiary of the Borrower to its
stockholders generally and one copy of each regular, periodic, or special
report, registration statement, or prospectus filed by the Borrower or any
Subsidiary of the Borrower with any securities exchange or the Securities and
Exchange Commission or any successor agency;
(j) Intercompany Contracts. With each certificate delivered
pursuant to Section 9.1(c), a listing of each tax sharing, cost allocation,
overhead attribution, or other similar contract or arrangement between the
Borrower and any of its Affiliates entered into during the Fiscal Quarter for
which such certificate is being delivered, and any other agreement or contract
entered into between the Borrower and any Affiliate of the Borrower or between
any Subsidiary of the Borrower and any Affiliate of the Borrower as permitted
by Section 10.7 during such Fiscal Quarter, where the aggregate amount of any
such contract agreement, or arrangement exceeds $1,000,000 in any Fiscal Year,
and upon the Agent's request, copies of all such contracts, agreements, and
arrangements which have not previously been delivered pursuant to Section
9.1(i); and
(k) General Information. Promptly, such other information
concerning the Borrower or any Subsidiary of the Borrower as the Agent or any
Lender may from time to time reasonably request.
Section 9.2 Maintenance of Existence; Conduct of Business. Except as
permitted by Section 10.3, the Borrower will, and will cause each Guarantor
to, preserve and maintain (a)its corporate existence and (b) all of its
leases, privileges, Permits, franchises, qualifications, and rights that are
necessary in the ordinary conduct of its business. The Borrower will, and
will cause each Guarantor to, conduct its business in an orderly and efficient
manner in accordance with good business practices.
Section 9.3 Maintenance of Properties. Except as permitted by Section
10.3, the Borrower will, and will cause each Guarantor to, maintain, keep, and
preserve all of its material Properties necessary in the conduct of the
Borrower's or such Guarantor's business in good working order and condition,
ordinary wear and tear excepted.
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Section 9.4 Taxes and Claims. The Borrower will, and will cause each
Subsidiary of the Borrower to, pay or discharge at or before maturity or
before becoming delinquent (a) all taxes, levies, assessments, and
governmental charges imposed on it or its income or profits or any of its
property, and (b) all lawful claims for labor, material, and supplies, which,
if unpaid, might become a Lien upon any of its property; provided that neither
the Borrower nor any Subsidiary of the Borrower shall be required to pay or
discharge any tax, levy, assessment, or governmental charge or charge for
labor, material, and supplies (i) which is being contested in good faith by
appropriate proceedings diligently pursued, and for which adequate reserves in
accordance with GAAP have been established and (ii) if the failure to pay the
same would not result in a Lien on the Property of the Borrower or a
Subsidiary of the Borrower.
Section 9.5 Insurance.
(a) The Borrower will, and will cause each of its Subsidiaries to,
keep insured by financially sound and reputable insurers all Property of a
character usually insured by responsible businesses engaged in the same or a
similar business similarly situated against loss or damage of the kinds and in
the amounts (including reasonable self-insured retention amounts) customarily
insured against by such corporations or entities and carry such other
insurance as is usually carried by such businesses, provided that in any event
the Borrower and each of its Subsidiaries (as appropriate) will maintain:
(i) Property Insurance. Insurance against loss or damage
covering substantially all of the tangible real and personal Property and
improvements of the Borrower and each of its Subsidiaries by reason of any
Peril (as defined below) in such amounts (subject to any deductibles as shall
be reasonably satisfactory to the Agent) as shall be reasonable and customary
and sufficient to avoid the insured named therein from becoming a co-insurer
of any loss under such policy;
(ii) Automobile Liability Insurance for Bodily Injury and
Property Damage. Insurance in respect of all vehicles (whether owned, hired,
or rented by the Borrower or any of its Subsidiaries) at any time located at,
or used in connection with, their respective Properties or operations against
liabilities for bodily injury and Property damage in such amounts as are then
customary for vehicles used in connection with similar Properties and
businesses, but in any event to the extent required by applicable law;
(iii) Comprehensive General Liability Insurance. Insurance
against claims for bodily injury, death, or Property damage occurring on, in
or about the Property (and adjoining streets, sidewalks, and waterways) of the
Borrower or any of its Subsidiaries, in such amounts as are then customary for
Property similar in use in the jurisdictions where such Properties are
located; and
(iv) Worker's Compensation Insurance. Worker's compensation
insurance (including, without limitation, employers' liability insurance) to the
extent required by applicable law, which may be self-insurance to the extent
permitted by applicable law.
Such insurance shall be written by financially responsible companies
selected by the applicable Person and having an A.M. Best Rating of "A-" or
better and being in a financial size category of "VI" or larger, or by other
companies reasonably acceptable to the Agent.
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For purposes hereof, the term "Peril" shall mean, collectively, fire,
lightning, flood (to the extent required by applicable law), windstorm, hail,
explosion, riot and civil commotion, vandalism and malicious mischief, damage
from aircraft, vehicles and smoke, and other perils covered by the "all-risk"
endorsement then in use in the jurisdictions where the Properties of the
Borrower and its Subsidiaries are located.
(b) If a Default shall have occurred and be continuing, the
Borrower will, and will cause each of its Subsidiaries to, cause all proceeds
(net of any amount which the Borrower or any such Subsidiary is contractually
obligated to deliver to a third party) of insurance paid on account of the
loss of or damage to any Property of the Borrower or any of its Subsidiaries
and all awards of compensation (net of any amount which the Borrower or any
such Subsidiary is contractually obligated to deliver to a third party) for
any Property of the Borrower or any of its Subsidiaries taken by condemnation
or eminent domain to be paid directly to the Agent to be applied against the
Obligations.
Section 9.6 Inspection Rights. The Borrower will, and will cause each
of its Subsidiaries, permit representatives and agents of the Agent and each
Lender, during normal business hours and upon reasonable notice to the
Borrower, to examine, copy, and make extracts from the Borrower's or any of
such Subsidiaries' books and records, to visit and inspect the Borrower's or
any of such Subsidiaries' Properties and to discuss the Borrower's or any of
such Subsidiaries's business, operations, and financial condition with its
officers and independent certified public accountants. The Borrower will, and
will cause each of its Subsidiaries to, authorize its accountants in writing
(with a copy to the Agent) to comply with this Section. The Agent or its
representatives may, during normal business hours and upon reasonable notice
to the Borrower, at any time and from time to time at the Borrower's expense,
conduct field exams for such purposes as the Agent or the Required Lenders may
reasonably request; provided that so long as no Default is in existence no
more than two (2) such field exams shall be conducted during any calendar
year. The Borrower may designate such officers, employees, agents, or other
representatives as it deems necessary to be present during any such
examination, visit, inspection, or field exam performed pursuant to this
Section; provided that the unavailability or intentional interference of any
such Persons during such examination, visit, inspection, or field exam shall
not unreasonably delay or otherwise impede the Agent or its representatives in
the conduct thereof.
Section 9.7 Keeping Books and Records. The Borrower will, and will
cause each of its Subsidiaries to, maintain proper books of record and account
in which full, true, and correct entries in conformity with GAAP shall be made
of all dealings and transactions in relation to its business and activities.
Section 9.8 Compliance with Laws. The Borrower will, and will cause
each of its Subsidiaries to, comply in all material respects with all
applicable laws (including, without limitation, all Environmental Laws, ERISA,
the Code and Regulations T, U, and X of the Board of Governors of the Federal
Reserve System), rules, regulations, orders, and decrees of a material
nature of any Governmental Authority or arbitrator other than any such laws,
rules, regulations, orders, and decrees contested by appropriate actions or
proceedings diligently pursued, if adequate reserves in conformity with GAAP
and satisfactory to the Agent are established with respect thereto and except
for minor violations which could not have a Material Adverse Effect.
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Section 9.9 Compliance with Agreements. The Borrower will, and will
cause each of its Subsidiaries to, comply with all agreements, contracts, and
instruments binding on it or affecting its properties or business other than
such noncompliance which could not have a Material Adverse Effect.
Section 9.10 Further Assurances.
(a) Further Assurance. The Borrower will, and will cause each of
its Subsidiaries to, execute and/or deliver pursuant to this clause (a) such
further documentation and take such further action as may be reasonably
requested by the Required Lenders to carry out the provisions and purposes of
the Loan Documents.
(b) Subsidiary Joinder. Within ten (10) days after the end of each
Fiscal Quarter, the Borrower shall, and shall cause each Subsidiary created or
acquired during the Fiscal Quarter then ending to, execute and deliver to the
Agent such documentation, including, without limitation a Joinder Agreement,
as the Agent may require to cause each such Subsidiary to become a party to
the Subsidiary Guaranty.
Section 9.11 ERISA. With respect to each Plan, the Borrower will, and
will cause each of its Subsidiaries to, comply with all minimum funding
requirements and all other material requirements of ERISA so as not to give
rise to any liability in excess of $1,000,000.
ARTICLE 10
Negative Covenants
The Borrower covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or any Lender has any Commitment hereunder or any
Letter of Credit remains outstanding, the Borrower will perform and observe
the following covenants:
Section 10.1 Debt. The Borrower will not, nor will it permit any
Subsidiary of the Borrower to, incur, create, assume, or permit to exist any
Debt, except:
(a) Debt to the Lenders pursuant to the Loan Documents;
(b) Debt described on Schedule 8.9, and any extensions, renewals,
or refinancings of such existing Debt so long as (i) the principal amount of
such Debt after such renewal, extension, or refinancing shall not exceed the
principal amount of such Debt which was outstanding immediately prior to such
renewal, extension, or refinancing and (ii) such Debt shall not be secured by
any assets other than assets securing such Debt, if any, prior to such
renewal, extension, or refinancing;
(c) Debt of a Subsidiary of the Borrower owed to the Borrower or
another Subsidiary of the Borrower; provided that such Debt must according to
its terms be fully subordinate in all respects to any of such Subsidiary's
indebtedness, liabilities, or obligations to the Agent and the Lenders
pursuant to any Loan Document;
(d) Guaranties and other Debt incurred in the ordinary course of
business with respect to surety and appeal bonds, performance and
return-of-money bonds, letters of credit, banker's acceptances, and other
similar obligations including those of the type otherwise described in Section
10.2(f);
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(e) Debt of the Borrower or any Subsidiary of the Borrower
constituting purchase money Debt (including, without limitation, Capital Lease
Obligations) incurred after the Closing Date in connection with Capital
Expenditures (such amount to specifically exclude any amounts paid in
connection with a Permitted Acquisition) not to exceed $2,000,000 in the
aggregate at any time outstanding secured by purchase money Liens permitted by
Section 10.2(g);
(f) Debt constituting obligations to reimburse worker's
compensation insurance companies for claims paid by such companies on behalf
of the Borrower or any Subsidiary of the Borrower in accordance with the
policies issued to the Borrower or any such Subsidiary;
(g) Debt secured by the Liens permitted by Section 10.2(d) and
Section 10.2(e);
(h) unsecured Debt arising under, created by, and consisting of
Hedge Agreements; provided, (i) such Hedge Agreements shall have been entered
into for the purpose of hedging actual risk and not for speculative purposes
and (ii) that each counterparty to such Hedge Agreement shall be a Lender or
shall be rated in one of the two highest rating categories of Standard and
Poor's Corporation or Moody's Investors Service,Inc.; and
(i) Debt arising from endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary course of
business of the Borrower or a Subsidiary of the Borrower.
Section 10.2 Limitation on Liens and Restrictions on Subsidiaries. The
Borrower will not, nor will it permit any Subsidiary of the Borrower to,
incur, create, assume, or permit to exist any Lien upon any of its property
(excluding treasury stock of the Borrower repurchased by the Borrower after
the Closing Date), assets, or revenues, whether now owned or hereafter
acquired, except the following:
(a) existing Liens described on Schedule 10.2 hereto, and any
extensions, renewals, or refinancings of the Debt secured by such Liens as
permitted under Section 10.1(b); provided that (i) no such Lien is expanded to
cover any additional Property (other than after acquired title in or on such
Property and proceeds of the existing collateral) after the Closing Date and
(ii) no such Lien is spread to secure any additional Debt after the Closing
Date;
(b) Liens in favor of the Agent, for the benefit of the Agent and
the Lenders;
(c) encumbrances consisting of easements, zoning restrictions, or
other restrictions on the use of real Property that do not (individually or in
the aggregate)materially detract from the value of the real Property
encumbered thereby or materially impair the ability of the Borrower or such
Subsidiary to use such real Property in its business;
(d) Liens for taxes, assessments, or other governmental charges
(but excluding Environmental Liens or Liens under ERISA) that are not
delinquent or which are being contested in good faith and for which adequate
reserves have been established in accordance with GAAP;
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(e) contractual or statutory Liens of mechanics, materialmen,
warehousemen, carriers, landlords, or other similar Liens securing obligations
that are not overdue or are being contested in good faith by appropriate
proceedings diligently pursued and for which adequate reserves have been
established in accordance with GAAP and are incurred in the ordinary course of
business;
(f) Liens resulting from deposits to secure payments of worker's
compensation, unemployment insurance, or other social security programs or to
secure the performance of tenders, statutory obligations, leases, insurance
contracts, surety and appeal bonds, bids, and other contracts incurred in the
ordinary course of business (other than for payment of Debt);
(g) Liens for purchase money obligations and Liens securing Capital
Lease Obligations; provided that (i) the Debt secured by any such Lien is
permitted under Section 10.1(e) and (ii) any such Lien encumbers only the
Property so purchased or leased;
(h) any attachment or judgment Lien not constituting an Event of
Default;
(i) any interest or title of a licensor, lessor, or sublessor under
any license or lease and any interest or title of a licensee, lessee, or
sublessee under any license, cross-license,or lease in any event entered into
in the ordinary course of business and not otherwise prohibited by the terms
of this Agreement;
(j) Liens against equipment arising from precautionary UCC
financing statement filings regarding operating leases entered into by such
Person in the ordinary course of business; and
(k) nonconsensual Liens in favor of banking institutions arising as
a matter of law and encumbering the deposits (including the right of set-off)
held by such banking institutions in the ordinary course of business.
Section 10.3 Mergers, Etc. The Borrower will not, nor will it permit
any Guarantor to, become a party to a merger or consolidation or purchase or
otherwise acquire all or a substantial part of the business or Property of any
Person or all or a substantial part of the business or Property of a division
or branch of a Person or a majority interest in the Capital Stock of any
Person, or wind-up, dissolve, or liquidate itself; provided that
notwithstanding the foregoing or any other provision of this Agreement as long
as no Default exists or would result therefrom and provided the Borrower gives
the Agent and the Lenders prior written notice:
(a) a Guarantor may wind-up, dissolve, or liquidate if its Property
is transferred to the Borrower or a Wholly-Owned Subsidiary of the Borrower
which becomes a Guarantor pursuant to the terms of this Agreement;
(b) a Guarantor, may merge or consolidate with the Borrower
(provided the Borrower is the surviving entity) or with a Wholly-Owned
Subsidiary of the Borrower(provided the Wholly-Owned Subsidiary is the
surviving entity and becomes a Guarantor pursuant to the terms of this
Agreement);
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(c) the Borrower may make Permitted Acquisitions; and
(d) to the extent the Required Lenders agree in writing, the
Borrower may make additional acquisitions not included in Permitted
Acquisitions.
Section 10.4 Restricted Payments. The Borrower will not, nor will it
permit any Subsidiary of the Borrower to, (a) make any prepayment of any Debt
other than (i) the Obligations, (ii) any Debt owed to the Borrower or a
Subsidiary of the Borrower, or (iii) so long as no Default is in existence,
the Debt described in that certain Note Purchase Agreement dated June 15, 1995
(a true and correct copy of which has been delivered to the Lenders on the
Closing Date) up to an amount not in excess of $13,000,000, or (b) directly or
indirectly declare, order, pay, make, or set apart any sum for (i) any
dividend or other distribution, direct or indirect, on account of any shares
of any class of Capital Stock of such Person now or hereafter outstanding,
(ii) any redemption, conversion, exchange, retirement, sinking fund, or
similar payment, purchase, or other acquisition for value, direct or indirect,
of any shares of any class of Capital Stock of any such Person now or
hereafter outstanding, or (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options, or other rights to acquire
shares of any class of Capital Stock of any such Person now or hereafter
outstanding except:
(a) Subsidiaries of the Borrower may make, declare, and pay
dividends and make other distributions with respect to their Capital Stock to
the Borrower or Wholly-Owned Subsidiaries of the Borrower;
(b) the Borrower may declare and pay dividends on any class of its
Capital Stock(i) payable solely in shares of Capital Stock of the Borrower or
(ii) in an amount which when added to all such dividends for the immediately
preceding four (4) Fiscal Quarters does not exceed twenty-five percent (25.0%)
if the Borrower's Net Income for such immediately preceding four (4) Fiscal
Quarters; provided that any such dividend payable in cash shall be paid within
forth-five (45) days of the end of the Borrower's Fiscal Quarter applicable
thereto;
(c) the Borrower may acquire or redeem Capital Stock of the
Borrower held by any former officer, director, or employee of the Borrower or
beneficiaries of any such Person's estate or trusts created by or for the
benefit of any such Person or their beneficiaries; and
(d) the Borrower may repurchase or redeem any of its Capital Stock
in an amount not greater than (i) $25,000,000 during the period from the
Closing Date through and including January 14, 2002 and (ii) $50,000,000
during the term of this Agreement.
Notwithstanding the foregoing, upon any repurchase or redemption of Capital
Stock of the Borrower as permitted by this Section, the Borrower will
immediately upon completion of such repurchase or redemption cancel such
shares of its Capital Stock.
Section 10.5 Investments. The Borrower will not, nor will it permit
any Subsidiary of the Borrower to, make or permit to remain outstanding any
advance, loan, extension of credit, or capital contribution to or investment
in any Person, or purchase or own any stocks, bonds, notes, debentures, or
other Securities of any Person, or be or become a joint venturer with or
partner of any Person (all the foregoing, herein "Investments"), except:
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(a) Permitted Acquisitions;
(b) the Borrower may, up to an aggregate amount at any time
outstanding of not more than $20,000,000, make equity investments in and may
make loans or advances to(i) any consolidated Subsidiary of the Borrower (in
the case of loans, as permitted by Section 10.1) and may acquire Investments
in consolidated Subsidiaries, including existing and new consolidated
Subsidiaries (subject to the requirements of Section 10.3) and (ii)
International Association of CEC Entertainment, Inc.; provided that such
Investments which constitute advances, loans, extensions of credit, bonds,
notes, or debentures owed to the Borrower by any consolidated Subsidiary of
the Borrower or International Association of CEC Entertainment, Inc. shall at
all times be subordinate in all respects to the Obligations or any
indebtedness, liability, or obligation of such Person to the Agent and the
Lenders under any Loan Document and must otherwise be in compliance with
Section 10.1 and Section 10.3;
(c) the Borrower may, up to an aggregate amount at any time
outstanding of not more than $5,000,000, make equity investments in
Affiliates, excluding consolidated Subsidiaries of the Borrower and
International Association of CEC Entertainment, Inc., and make loans and
advances to such Affiliates and to officers, directors, and employees for
business expenses incurred in the ordinary course of business;
(d) readily marketable direct obligations of the U.S. or any agency
thereof with maturities of one year or less from the date of acquisition;
(e) fully insured certificates of deposit with maturities of one
year or less from the date of acquisition issued by any commercial bank
operating in the U.S. having capital and surplus in excess of $250,000,000;
(f) commercial paper of a domestic issuer and equity or debt
Securities of a domestic issuer if at the time of purchase such paper or debt
Securities of such issuer is rated in one of the two highest rating categories
of Standard and Poor's Corporation or Moody's Investors Service, Inc. or any
successor thereto and shares of any mutual fund company substantially all the
assets of which consist of cash and the Investments of the type described in
clause (d), clause (e), and this clause (f);
(g) Investments received in connection with the settlement of
delinquent obligations of, and disputes with, customers and suppliers, and
other trade debtors arising in the ordinary course of business; and
(h) extensions of trade credit in the ordinary course of business.
Section 10.6 Limitation on Issuance of Capital Stock of Subsidiaries.
The Borrower will not permit any Subsidiary of the Borrower to, at any time
issue, sell, assign, or otherwise dispose of, except to the Borrower, (a) any
Capital Stock of a Subsidiary of the Borrower, (b) any securities exchangeable
for or convertible into or carrying any rights to acquire any Capital Stock of
a Subsidiary of the Borrower, or (c) any option, warrant, or other right to
acquire any Capital Stock of a Subsidiary of the Borrower.
Section 10.7 Transactions With Affiliates. The Borrower will not, nor
will it permit any Subsidiary of the sale, or exchange of property or the
rendering of any service, with any Affiliate (as used in this Section 10.7 the
term "Affiliate" shall exclude any Subsidiary of the Borrower) of the Borrower
or such Subsidiary of the Borrower, except in the ordinary course of and
pursuant to the reasonable requirements of the Borrower's or such Subsidiary's
business and upon fair and reasonable terms no less favorable to the Borrower
or such Subsidiary than would be obtained in a comparable arms-length
transaction with a Person not an Affiliate of the Borrower or such Subsidiary;
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provided that notwithstanding the foregoing, the Borrower may enter into tax
sharing, cost allocation, overhead attribution, and similar contracts or
arrangements (which contracts are specifically excluded from the provisions of
Section 10.5) with International Association of CEC Entertainment, Inc.
pursuant to which the Borrower's expense, liability, or obligations do not
exceed $2,000,000 in any instance or $5,000,000 in the aggregate outstanding
at any time.
Section 10.8 Disposition of Assets. The Borrower will not, nor will it
permit any Subsidiary of the Borrower to, sell, lease, assign, transfer, or
otherwise voluntarily dispose of any of its Property other than (a) any Asset
Disposition of the remaining assets of The Discovery Zone owned by the
Borrower, (b) real Property with a fair market value of less than $10,000,000
in the aggregate which is acquired by the Borrower after the Closing Date in
anticipation of, and in connection with, a sale and leaseback transaction for
a new restaurant location or operation for a restaurant utilizing the "Chuck
E. Cheese" restaurant theme or another restaurant theme concept developed or
utilized by the Borrower or its Subsidiaries, and (c) Asset Dispositions not
included in clause (a) or clause (b) preceding not in excess of $10,000,000 in
any Fiscal Year.
Section 10.9 Lines of Business. The Borrower will not, nor will it
permit any Subsidiary of the Borrower to, engage in any line or lines of
business activity other than the business activities in which they are engaged
on the Closing Date, similar business activities, and business reasonably
related thereto.
Section 10.10 Limitations on Restrictions Affecting the Borrower and its
Subsidiaries. Neither the Borrower nor any Subsidiary of the Borrower shall
enter into or assume any agreement (other than the Loan Documents) prohibiting
the creation or assumption of any Lien upon its Properties, whether now owned
or hereafter acquired, other than pursuant to non-assignment provisions of a
Permitted Lien and which are restricted solely to the Property which is the
subject of such Permitted Lien and which does not prohibit the Borrower or any
Subsidiary of the Borrower from granting Liens to the Agent or any Lender as
collateral for the Obligations. Except as provided herein, the Borrower will
not, nor will it permit any Subsidiary of the Borrower to, directly or
indirectly create or otherwise cause or suffer to exist or become effective
any consensual encumbrance or restriction of any kind on the ability of the
Borrower or any Subsidiary of the Borrower to (a) pay dividends or make any
other distribution on any of its Capital Stock, (b) pay any Debt owed to the
Borrower or any Subsidiary of the Borrower, (c) make loans or advances to the
Borrower or any Subsidiary of the Borrower, (d) transfer any Property of the
Borrower or any Subsidiary of the Borrower to any other Person, except
pursuant to non-assignment provisions of Permitted Liens entered into in the
ordinary course of business, or (e) make any prepayment of any of the
Obligations.
Section 10.11 Environmental Protection. The Borrower will not, nor will
it permit any Subsidiary of the Borrower to, (a) use (or permit any tenant to
use) any of its Properties for the handling, processing, storage,
transportation, or disposal of any Hazardous Material except in compliance
with applicable Environmental Laws, (b) generate any Hazardous Material except
in compliance with applicable Environmental Laws, (c) conduct any activity
that is likely to cause a Release or threatened Release of any Hazardous
Material in violation of any Environmental Law, or (d) otherwise conduct any
activity or use any of its Properties in any manner, that in any material
respect violates or is likely to violate any Environmental Law or create any
Environmental Liabilities for which the Borrower or any Subsidiary of the
Borrower would be responsible that could have a Material Adverse Effect.
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Section 10.12 ERISA. The Borrower will not, nor will it permit any
Subsidiary of the Borrower to:
(a) allow, or take (or permit any ERISA Affiliate to take) any
action which would cause, any unfunded or unreserved liability for benefits
under any Plan (exclusive of any Multiemployer Plan) in excess of $1,000,000
to exist or to be created; or
(b) with respect to any Multi-employer Plan, allow or take (or
permit any ERISA Affiliate to take) any action which would cause any unfunded
or unreserved liability for benefits under any Multi-employer Plan in excess
of $1,000,000 to exist or to be created, either individually as to any such
Plan or in the aggregate as to all such Plans.
ARTICLE 11
Financial Covenants
The Borrower covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or any Lender has any Commitment hereunder or any
Letter of Credit remains outstanding, it will perform and observe the
following financial covenants:
Section 11.1 Leverage Ratio. As of the end of each Fiscal Quarter, the
Borrower shall not permit the Leverage Ratio, calculated as of the Fiscal
Quarter ending July 2, 2000, and as of the end of each Fiscal Quarter
thereafter, for the preceding four (4) Fiscal Quarter period then ending, to
exceed 3.25 to 1.00.
Section 11.2 Fixed Charge Coverage Ratio. As of the end of each Fiscal
Quarter, the Borrower shall not permit the Fixed Charge Coverage Ratio,
calculated as of the Fiscal Quarter ending July 2, 2000, and as of the end of
each Fiscal Quarter thereafter, for the preceding four (4) Fiscal Quarter
period then ending, to be less than 1.50 to 1.00.
Section 11.3 Minimum Net Worth. At all times from and after the
Closing Date, the Borrower shall not permit its Net Worth to be less than (a)
$210,000,000, plus (b) seventy-five percent (75.0%) of the Borrower's positive
Net Income for each Fiscal Quarter completed after April 2, 2000, plus (d) one
hundred percent (100%) of any increase in Net Worth attributable to issuance
of equity Securities of the Borrower or any Subsidiary of the Borrower after
April 2, 2000.
Section 11.4 Capital Expenditures. As of the end of each Fiscal
Quarter, the Borrower shall not permit the aggregate amount of all Capital
Expenditures of the Borrower and its Subsidiaries made during the immediately
preceding four (4) Fiscal Quarter period to exceed eighty-five percent (85.0%)
of the Borrower's EBITDA for such period.
ARTICLE 12
Default
Section 12.1 Events of Default. Each of the following shall be deemed
an "Event of Default":
(a) the Borrower shall fail to pay (i) when due any principal owing
with respect to the Loan or any Reimbursement Obligation payable under any
Loan Document or any part thereof, or (ii) within one (1) Business Day of the
date due any interest or fees payable under the Loan Documents or any part
thereof;
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(b) any representation, warranty, or certification made or deemed
made by the Borrower or any Subsidiary of the Borrower (or any of their
respective officers) in any Loan Document or in any certificate, report,
notice, or financial statement furnished at any time in connection with any
Loan Document shall be false, misleading, or erroneous in any material respect
when made;
(c) the Borrower or any Subsidiary of the Borrower shall fail to
perform, observe, or comply with any covenant, agreement, or term contained in
Section 2.4, Section 9.1,Section 9.2, Section 9.6, Section 9.10, Article 10
(other than related to non-consensual Liens under Section 10.3), or Article
11;
(d) the Borrower or any Subsidiary of the Borrower shall fail to
perform, observe, or comply with any other agreement or term contained in any
Loan Document (other than covenants described in Section 12.1(a), Section
12.1(b), or Section 12.1(c)) and (i) such failure shall continue for a period
of thirty (30) days after the date the Borrower should have notified the Agent
thereof in accordance with Section 9.1(f) or (ii) as otherwise specifically
provided by any other Loan Document;
(e) the Borrower or any Subsidiary of the Borrower shall (i) apply
for or consent to the appointment of, or the taking of possession by, a
receiver, custodian, trustee, examiner, liquidator, or the like of itself or
of all or a substantial part of its Property, (ii) make a general assignment
for the benefit of its creditors, (iii) commence a voluntary case under the
United States Bankruptcy Code (as now or hereafter in effect, the "Bankruptcy
Code"), (iv) institute any proceeding or file a petition seeking to take
advantage of any other law relating to bankruptcy, insolvency, reorganization,
liquidation, dissolution, winding-up, or composition or readjustment of debts,
(v) fail to controvert in a timely and appropriate manner, or acquiesce in
writing to, any petition filed against it in an involuntary case under the
Bankruptcy Code, (vi) admit in writing its inability to, or be generally
unable to pay its debts as such debts become due, or (vii) take any corporate
action for the purpose of effecting any of the foregoing;
(f) (i) a proceeding or case shall be commenced, without the
application, approval, or consent of the Borrower or any Subsidiary of the
Borrower in any court of competent jurisdiction, seeking (A) its
reorganization, liquidation, dissolution, arrangement, or winding-up, or the
composition or readjustment of its debts, (B) the appointment of a receiver,
custodian, trustee, examiner, liquidator, or the like of the Borrower or such
Subsidiary or of all or any substantial part of its Property, or (C) similar
relief in respect of the Borrower or such Subsidiary under any law relating to
bankruptcy, insolvency, reorganization, winding-up, or composition or
readjustment of debts, and such proceeding or case shall continue undismissed,
or an order, judgment, or decree approving or ordering any of the foregoing
shall be entered and continue unstayed and in effect, for a period of sixty
(60) or more days or (ii) an order for relief against the Borrower or any
Subsidiary shall be entered in an involuntary case under the Bankruptcy Code;
(g) the Borrower or any Subsidiary of the Borrower shall fail
within a period of thirty (30) days after the commencement thereof to
discharge or obtain a stay of any attachment, sequestration, forfeiture, or
similar proceeding or proceedings involving an aggregate amount in excess of
$250,000 against any of its assets or properties;
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(h) A final judgment or judgments for the payment of money in
excess of $500,000 in the aggregate (to the extent not paid or fully covered
by insurance) shall be rendered by a court or courts against the Borrower or
any Subsidiary of the Borrower and the same shall not be satisfied,
discharged, or dismissed (or provision shall not be made for such
satisfaction, discharge, or dismissal), or a stay of execution or other stay
of enforcement thereof shall not be procured, within thirty (30) days from the
date of entry thereof and the Borrower or any Subsidiary of the Borrower, as
applicable, shall not, within said period of thirty (30) days, or such longer
period during which execution of the same shall have been stayed, appeal
therefrom and cause the execution thereof to be stayed during such appeal;
(i) (i) the Borrower or any Subsidiary of the Borrower shall fail
to pay when due any principal of or interest on any Debt (other than the
Obligations) beyond the period of grace (if any) if the aggregate principal
amount of the affected Debt equals or exceeds $100,000, or the maturity of any
such Debt shall have been accelerated or shall have been required to be
prepaid prior to the stated maturity thereof or (ii) any event shall have
occurred with respect to any Debt in the aggregate principal amount equal to
or in excess of $100,000 that permits the holder or holders of such Debt or
any Person acting on behalf of such holder or holders to accelerate the
maturity thereof or require any prepayment thereof;
(j) this Agreement or any Security Document shall cease to be in
full force and effect or shall be declared null and void or the validity or
enforceability thereof shall be contested or challenged by the Borrower or any
Subsidiary, or the Borrower or any Subsidiary (other than a Subsidiary
released in writing from the terms and conditions of the Loan Documents) shall
deny that it has any further liability or obligation under any of the Loan
Documents;
(k) Any of the following events shall occur or exist with respect
to the Borrower, any Subsidiary of the Borrower, or any ERISA Affiliate and in
each case, such event or condition, together with all other such events or
conditions, if any, have subjected or could in the reasonable opinion of the
Agent or the Required Lenders subject the Borrower or any Subsidiary of the
Borrower (or any combination thereof) to any tax, penalty, or other liability
to a Plan, a Multiemployer Plan, the PBGC, or otherwise (or any combination
thereof) which in the aggregate could reasonably be expected to exceed
$1,000,000: (i) any Prohibited Transaction involving any Plan; (ii) any
Reportable Event with respect to any Plan; (iii) the filing under Section 4041
of ERISA of a notice of intent to terminate any Plan or the termination of any
Plan; (iv) any event or circumstance that could reasonably be expected to
constitute grounds entitling the PBGC to institute proceedings under Section
4042 of ERISA for the termination of, or for the appointment of a trustee to
administer, any Plan, or the institution by the PBGC of any such proceedings;
or (v) complete or partial withdrawal under Section 4201 or 4204 of ERISA from
a Multiemployer Plan or the reorganization,insolvency, or termination of any
Multiemployer Plan;
(l) The occurrence of any event or condition which constitutes a
Material Adverse Effect and thirty (30) days shall have passed since written
notification thereof to the Borrower by the Agent (therein identifying such
event or condition) without such event or condition having been remedied,
cured, or waived; or
(m) The occurrence of a Change of Control.
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Section 12.2 Remedies. If any Event of Default shall occur and be
continuing, the Agent may (and if directed by the Required Lenders, shall) do
any one or more of the following:
(a) Acceleration. By notice to the Borrower, declare all
outstanding principal of and accrued and unpaid interest on the Notes and all
other amounts payable by the Borrower under the Loan Documents immediately due
and payable, and the same shall thereupon become immediately due and payable,
without further notice, demand, presentment, notice of dishonor, notice of
acceleration, notice of intent to accelerate, protest, or other formalities
of any kind, all of which are hereby expressly waived by the Borrower except
as where required by the specific terms of this Agreement or the other Loan
Documents;
(b) Termination of Commitments. Terminate the Commitments,
including, without limitation, the obligation of the Fronting Bank to issue
Letters of Credit, without notice to the Borrower or any other Person;
(c) Judgment. Reduce any claim to judgment; and
(d) Rights. Exercise any and all rights and remedies afforded by
the laws of the State of Texas, or any other jurisdiction governing any of the
Loan Documents, by equity, or otherwise; provided, however, that, upon the
occurrence of an Event of Default under Section 12.1(e) or Section 12.1(f),
the Commitments of all of the Lenders, and the obligation of the Fronting Bank
to issue Letters of Credit, shall automatically terminate and the outstanding
principal of and accrued and unpaid interest on the Notes and all other
amounts payable by the Borrower or any other party under the Loan Documents
shall thereupon become immediately due and payable without notice, demand,
presentment, notice of dishonor, notice of acceleration, notice of intent to
accelerate, protest, or other formalities of any kind, all of which are hereby
expressly waived by the Borrower.
Section 12.3 Cash Collateral. If an Event of Default shall have
occurred and be continuing, the Borrower shall, if requested by the Agent or
the Required Lenders, pledge to the Agent as security for the Obligations,
pursuant to agreements in form and substance satisfactory to the Agent, an
amount in immediately available funds equal to the then outstanding Letter of
Credit Liabilities, such funds to be held in a cash collateral account by the
Agent without any right of withdrawal by the Borrower. If such Event of
Default is subsequently cured, then the balance of such cash collateral
account shall be released to the Borrower.
Section 12.4 Performance by the Agent. Upon the occurrence of a
Default, if the Borrower or any Guarantor shall fail to perform any agreement
in accordance with the terms of the Loan Documents, the Agent may, and at the
direction of the Required Lenders shall, perform or attempt to perform such
agreement on behalf of the Borrower or such Guarantor, as applicable. In such
event, at the request of the Agent, the Borrower shall promptly pay any amount
expended by the Agent or the Lenders in connection with such performance or
attempted performance, to the Agent at the Principal Office together with
interest thereon at the Default Rate applicable to the Prime Rate Balance from
and including the date of such expenditure to but excluding the date such
expenditure is paid in full. Notwithstanding the foregoing, it is expressly
agreed that neither the Agent, Banc One Capital Markets, Inc., nor any Lender
shall have any liability or responsibility for the performance of any
obligation of the Borrower or any Guarantor under any Loan Document.
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Section 12.5 Set-off. If an Event of Default shall have occurred and
be continuing, each Lender is hereby authorized at any time and from time to
time, without notice to the Borrower or any other Person (any such notice
being hereby expressly waived), to set-off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held
and other indebtedness at any time owing by such Lender to or for the credit
or the account of the Borrower against any and all of the Obligations now or
hereafter existing under any Loan Document, irrespective of whether or not the
Agent or such Lender shall have made any demand under such Loan Documents and
although the Obligations may be unmatured. Each Lender agrees promptly to
notify the Borrower (with a copy to the Agent) upon any such set-off and
application, provided that the failure to give such notice shall not affect
the validity of such set-off and application. The rights and remedies of each
Lender hereunder are in addition to other rights and remedies (including,
without limitation, other rights of set-off) which such Lender may have.
Section 12.6 Continuance of Default. For purposes of all Loan
Documents, a Default shall be deemed to have continued and exist until the
Agent shall have actually received evidence satisfactory to the Agent that
such Default shall have been remedied.
ARTICLE 13
Agent
Section 13.1 Appointment and Authorization.
(a) Each Lender hereby irrevocably (subject to Section 13.9)
appoints, designates,and authorizes the Agent to take such action on its
behalf under the provisions of this Agreement and each other Loan Document and
to exercise such powers and discretion, and perform such duties as are
specifically delegated to the Agent by the terms of this Agreement or any
other Loan Document, together with such powers as are reasonably incidental
thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, the Agent shall not have any duties
or responsibilities, except those expressly set forth herein, nor shall the
Agent have or be deemed to have 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 the Agent. Without limiting the generality of the
foregoing sentence, the use of the term "agent" in this Agreement with reference
to the Agent is not intended to connote any fiduciary or other implied (or
express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties.
(b) The Fronting Bank shall act on behalf of the Lenders with
respect to any Letters of Credit issued by the Fronting Bank and the documents
associated therewith until such time and except for so long as the Agent may
agree at the request of the Required Lenders to act for such Fronting Bank
with respect thereto; provided, however, that the Fronting Bank shall have all
of the benefits and immunities (i) provided to the Agent in this Article 13
with respect to any acts taken or omissions suffered by the Fronting Bank in
connection with Letters of Credit issued by it or proposed to be issued by it
and the Letter of Credit Agreements pertaining to the Letters of Credit as
fully as if the term "Agent", as used in this Article 13, included the
Fronting Bank with respect to such acts or omissions, and (ii) as additionally
provided in this Agreement with respect to the Fronting Bank.
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Section 13.2 Delegation of Duties. The Agent may execute any of its
duties under this Agreement or any other Loan Document by or through agents,
employees, or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agent or attorney-in-fact
that it selects with reasonable care.
Section 13.3 Liability of the Agent. No Agent-Related Person shall (a)
be liable for any action taken or omitted to be taken by it under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for such Person's own gross negligence or willful
misconduct), or (b) be responsible in any manner to any of the Lenders for any
recital, statement, representation, or warranty made by the Borrower or any
Subsidiary or Affiliate of the Borrower, or any officer thereof, contained in
this Agreement or in any other Loan Document, or in any certificate, report,
statement, or other document referred to or provided for in, or received by
the Agent under or in connection with, this Agreement or any other Loan
Document, or the validity, effectiveness, genuineness, enforceability, or
sufficiency of this Agreement or any other Loan Document, or for any failure
of the Borrower or any Subsidiary or Affiliate of the Borrower party to any
Loan Document to perform its obligations hereunder or thereunder. No
Agent-Related Person shall be under any obligation to any Lender to ascertain
or to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Loan Document, or
to inspect the properties, books, or records of the Borrower or any of the
Borrower's Subsidiaries or Affiliates.
Section 13.4 Reliance By the Agent.
(a) Agent shall be entitled to rely, and shall be fully protected
in relying, upon any writing, resolution, notice, consent, certificate,
affidavit, letter, telegram, facsimile, telex, or telephone message,
statement, or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by or on behalf of the proper
Person or Persons, and upon advice and statements of legal counsel (including,
without limitation, counsel to the Borrower and its Subsidiaries), independent
accountants, and other experts selected by the Agent. The 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 as it deems appropriate and, if the Agent
so requests, it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by the Agent
by reason of taking or continuing to take any such action. The Agent shall in
all cases be fully protected in acting, or in refraining from acting, under
this Agreement or any other Loan Document in accordance with a request or
consent of the Required Lenders and such request and any action taken or
failure to act pursuant thereto shall be binding upon all of the Lenders.
(b) For purposes of determining compliance with the conditions
specified in Section 7.1 and Section 7.2, each Lender that has executed this
Agreement shall be deemed to have consented to, approved or accepted, or to be
satisfied with, each document or other matter either sent by the Agent to such
Lender for consent, approval, acceptance, or satisfaction, or required
thereunder to be consented to or approved by or acceptable or satisfactory to
the Lender.
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Section 13.5 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default,
except with respect to defaults in the payment of principal, interest, and
fees required to be paid to the Agent for the account of the Lenders, unless
the Agent shall have received written notice from a Lender, the Borrower, or
any Subsidiary of the Borrower referring to this Agreement, describing such
Default or Event of Default, and stating that such notice is a "notice of
default". The Agent will notify the Lenders of its receipt of any such
notice. The Agent shall take such action with respect to such Default or
Event of Default as may be requested by the Required Lenders in accordance
with Article 12; provided, however, that unless and until the Agent has
received any such request, the Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default
or Event of Default as it shall deem advisable or in the best interest of the
Lenders.
Section 13.6 Rights as Lender. With respect to its Commitment and the
Loan made by it, Bank One (and any successor acting as the Agent) in its
capacity as a Lender hereunder shall have the same rights and powers hereunder
as any other Lender and may exercise the same as though it were not acting as
the Agent, and the term "Lender" or "Lenders" shall, unless the context
otherwise indicates, include the Agent in its individual capacity. Bank One
(and any successor acting as the Agent) and its Affiliates may (without having
to account therefor to any Lender) accept deposits from, lend money to, make
investments in, provide services to, and generally engage in any kind of
lending, trust, or other business with the Borrower or any Guarantor or any of
their respective Affiliates as if it were not acting as the Agent, and Bank
One (and any successor acting as the Agent) and its Affiliates may accept fees
and other consideration from the Borrower or any Guarantor or any of their
respective Affiliates for services in connection with this Agreement or
otherwise without having to account for the same to the Lenders. The Lendes
acknowledge that, pursuant to such activities, Bank One or its Affiliates may
receive information regarding the Borrower, its Subsidiaries, or its
Affiliates (including, without limitation, information that may be subject to
confidentiality obligations in favor of the Borrower or such Subsidiary or
Affiliate) and acknowledge that the Agent shall be under no obligation to
provide such information to the Lenders.
Section 13.7 Credit Decision. Each Lender acknowledges that none of
the Agent-Related Persons has made any representation or warranty to such
Lender, and that no act by the Agent hereinafter taken, including, without
limitation, any review of the affairs of the Borrower and its Subsidiaries,
shall be deemed to constitute any representation or warranty by any
Agent-Related Person to any Lender. Each Lender represents to the Agent that
it has, independently and without reliance upon any Agent-Related Person and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, prospects, operations,
property, financial and other condition, and creditworthiness of the Borrower
and its Subsidiaries, and all applicable bank regulatory laws relating to the
transactions contemplated hereby, and made its own decision to enter into this
Agreement and to extend credit to the Borrower hereunder. Each Lender also
represents that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as such
Lender 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 investigations as it
deems necessary to inform itself as to the business, prospects, operations,
property, financial, and other condition and creditworthiness of the Borrower
and its Subsidiaries. Except for notices, reports, and other documents
expressly herein required to be furnished to the Lenders by the Agent, the
Agent shall not have any duty or responsibility to provide any Lender with any
credit or other information concerning the business, prospects, operations,
property, financial and other condition, or creditworthiness of the Borrower
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or any of its Subsidiaries which may come into the possession of any of the
Agent-Related Persons. For purposes of determining compliance with Section
7.1, each Lender that has executed this Agreement shall be deemed to have
consented to, approved, or accepted or to be satisfied with, each document or
other matter either sent by the Agent to such Lender for consent, approval,
acceptance, or satisfaction, or required thereunder to be consented to or
approved by or acceptable or satisfactory to such Lender.
Section 13.8 Indemnification. THE LENDERS AGREE TO INDEMNIFY EACH
AGENT-RELATED PERSON (TO THE EXTENT NOT REIMBURSED UNDER SECTION 14.1 OR
SECTION 14.2, BUT WITHOUT LIMITING THE OBLIGATIONS OF THE BORROWER UNDER SUCH
SECTIONS) RATABLY IN ACCORDANCE WITH THEIR RESPECTIVE COMMITMENT PERCENTAGES,
FOR ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS,
JUDGMENTS, SUITS, COSTS, EXPENSES (INCLUDING, WITHOUT LIMITATION, ATTORNEY
COSTS), OR DISBURSEMENTS OF ANY KIND AND NATURE WHATSOEVER THAT MAY BE IMPOSED
ON, INCURRED BY OR ASSERTED AGAINST ANY AGENT-RELATED PERSON (INCLUDING,
WITHOUT LIMITATION, BY ANY LENDER) IN ANY WAY RELATING TO OR ARISING OUT OF
ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY OR ANY ACTION TAKEN
OR OMITTED BY ANY AGENT-RELATED PERSON UNDER ANY LOAN DOCUMENT; PROVIDED THAT
NO LENDER SHALL BE LIABLE FOR ANY OF THE FOREGOING TO THE EXTENT THEY ARE
FOUND IN A FINAL, NON-APPEALABLE JUDGMENT RENDERED BY A COURT OF COMPETENT
JURISDICTION TO HAVE ARISEN FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT
OF, THE PERSON TO BE INDEMNIFIED. WITHOUT LIMITING ANY PROVISION OF ANY LOAN
DOCUMENT, IT IS THE EXPRESS INTENTION OF THE PARTIES HERETO THAT EACH PERSON
TO BE INDEMNIFIED UNDER THIS SECTION SHALL BE INDEMNIFIED FROM AND HELD
HARMLESS AGAINST ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES,
JUDGMENTS, DISBURSEMENTS, COSTS, AND EXPENSES (INCLUDING, WITHOUT LIMITATION,
ATTORNEY COSTS) ARISING OUT OF OR RESULTING FROM THE SOLE OR CONTRIBUTORY
NEGLIGENCE OF SUCH PERSON. WITHOUT LIMITATION OF THE FOREGOING, EACH LENDER
AGREES TO REIMBURSE THE APPLICABLE AGENT-RELATED PERSON PROMPTLY UPON DEMAND
FOR ITS RATABLE SHARE (CALCULATED BASED ON THE COMMITMENT PERCENTAGES) OF ANY
COSTS OR EXPENSES PAYABLE BY THE BORROWER UNDER SECTION 14.1 TO THE EXTENT
THAT SUCH AGENT-RELATED PERSON IS NOT PROMPTLY REIMBURSED FOR SUCH COSTS AND
EXPENSES BY THE BORROWER. IN THE CASE OF AN INVESTIGATION, LITIGATION, OR
OTHER PROCEEDING TO WHICH THE INDEMNITY IN THIS SECTION APPLIES, SUCH
INDEMNITY SHALL BE EFFECTIVE WHETHER OR NOT SUCH INVESTIGATION, LITIGATION OR
PROCEEDING IS BROUGHT BY THE BORROWER, ITS DIRECTORS, SHAREHOLDERS, OR
CREDITORS OR ANY PARTY ENTITLED TO INDEMNIFICATION HEREUNDER OR ANY OTHER
PERSON AND WHETHER OR NOT THE TRANSACTIONS CONTEMPLATED HEREBY ARE
CONSUMMATED.
Section 13.9 Successor Agent. The Agent may resign at any time by
giving notice thereof to the Lenders and the Borrower. Upon any such
resignation, the Required Lenders shall have the right to appoint a successor
as administrative agent (whereupon such successor shall become the Agent),
which successor shall be subject to the approval of the Borrower (which
approval shall not be unreasonably withheld, conditioned, or delayed) if and
so long as no Event of Default is in existence. If no successor
administrative agent shall have been so appointed by the Required Lenders and
shall have accepted such appointment within thirty (30) days after the
retiring Agent's giving of notice of its resignation, then the retiring Agent
may, on behalf of the Lenders, appoint a successor administrative agent
(whereupon such successor shall become the Agent) which shall be a commercial
bank organized under the laws of the U.S. having combined capital and surplus
of at least $250,000,000, which successor administrative agent shall be
subject to the approval of the Borrower (which approval shall not be
unreasonably withheld, conditioned, or delayed). Upon the acceptance of its
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appointment as administrative agent hereunder by a successor, such successor
administrative agent shall thereupon succeed to and become vested with all the
rights, powers, discretion, privileges, and duties of the retiring Agent, and
the retiring Agent shall be discharged from its duties and obligations
hereunder and the term "Agent" shall mean such successor agent, and the
retiring Agent's appointment, powers, and duties as Agent shall be terminated.
After any retiring Agent's resignation hereunder as the Agent, the provisions
of this Article 13 and Section 14.1 and Section 14.2 shall inure to and
continue in effect for, its benefit in respect of any actions taken or omitted
to be taken by it while it was acting as Agent. If no successor
administrative agent has accepted appointment as the Agent by the date which
is thirty (30) days following a retiring Agent's notice of resignation, the
retiring Agent's resignation shall nevertheless thereupon become effective and
the Lenders shall perform all of the duties of the Agent hereunder until such
time, if any, as the Required Lenders appoint a successor administrative agent
as provided for above. Notwithstanding the foregoing, if the Agent is also
acting as the Fronting Bank, simultaneously with appointment of a successor
administrative agent as provided herein such successor administrative agent
shall assume all of the duties and obligations of the retiring Agent as the
Fronting Bank pursuant to documentation in form and substance satisfactory to
the retiring Agent.
Section 13.10 Withholding Tax.
(a) If any Lender is a "foreign corporation, partnership or trust"
within the meaning of the Code and such Lender claims exemption from, or a
reduction of, U.S. withholding tax under Section 1441 or Section 1442 of the
Code, such Lender agrees with and in favor of the Agent, to deliver to the
Agent:
(i) if such Lender claims an exemption from, or a reduction
of, withholding tax under a U.S. tax treaty, two properly completed and
executed copies of IRS Form 1001 before the payment of any interest in the
first calendar year and before the payment of any interest in each third
succeeding calendar year during which interest may be paid under this
Agreement;
(ii) if such Lender claims that interest paid under this
Agreement is exempt from U.S. withholding tax because it is effectively
connected with a U.S.trade or business of such Lender, two properly completed
and executed copies of IRS Form 4224 before the payment of any interest is due
in the first taxable year of such Lender and in each succeeding taxable year
of such Lender during which interest may be paid under this Agreement; and
(iii) such other form or forms as may be required under the
Code or other laws of the U.S. as a condition to exemption from, or reduction
of, U.S. withholding tax.
Such Lender agrees to promptly notify the Agent of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction.
(b) If any Lender claims exemption from, or reduction of,
withholding tax under a U.S. tax treaty by providing IRS Form 1001 and such
Lender sells, assigns, grants a participation in, or otherwise transfers all
or part of the Obligations to another Lender, such assigning Lender agrees to
notify the Agent of the percentage amount in which it is no longer the
beneficial owner of the Obligations. To the extent of such percentage amount,
the Agent will treat such assigning Lender's IRS Form 1001 as no longer valid.
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(c) If any Lender claiming exemption from U.S. withholding tax by
filing IRS Form 4224 with the Agent sells, assigns, grants a participation in,
or otherwise transfers all or part of the Obligations to another Lender, the
assigning Lender agrees to undertake sole responsibility for complying with
the withholding tax requirements imposed by Sections 1441 and 1442 of the
Code.
(d) If any Lender is entitled to a reduction in the applicable
withholding tax, the Agent may withhold from any interest payment to such
Lender an amount equivalent to the applicable withholding tax after taking
into account such reduction. However, if the forms or other documentation
required by Section 13.10(a) are not delivered to the Agent, then the Agent
may withhold from any interest payment to such Lender not providing such forms
or other documentation an amount equivalent to the applicable withholding tax
imposed by Section 1441 and Section 1442 of the Code, without reduction.
(e) If the IRS or any other Governmental Authority of the U.S. or
other jurisdiction asserts a claim that the Agent did not properly withhold
tax from amounts paid to or for the account of any Lender (because the
appropriate form was not delivered or was not properly executed, or because
such Lender failed to notify the Agent of a change in circumstances which
rendered the exemption from, or reduction of, withholding tax ineffective, or
for any other reason) such Lender shall indemnify the Agent fully for all
amounts paid, directly or indirectly, by the Agent as tax or otherwise,
including, without limitation, penalties and interest and any taxes imposed by
any jurisdiction on the amounts payable to the Agent under this Section 13.10,
together with all costs and expenses (including, without limitation, Attorney
Costs). The obligation of the Lenders under this clause (e) shall survive the
payment of the Obligations and the resignation or replacement of the Agent.
ARTICLE 14
Miscellaneous
Section 14.1 Expenses. The Borrower hereby agrees to pay promptly
after presentation of supporting documentation, without duplication: (a) all
reasonable costs and expenses of the Agent paid in connection with the
preparation, negotiation, execution, delivery, syndication, and administration
of the Loan Documents and all amendments, waivers, or other modifications to
the Loan Documents, including, without limitation, Attorney Costs of the
Agent; (b) all reasonable fees, costs, and expenses of the Agent or the
Fronting Bank arising in connection with any Letter of Credit, including,
without limitation, the Fronting Bank's customary fees for amendments,
transfers, and drawings on Letters of Credit; (c) all costs and expenses of
the Agent in connection with any Default and the enforcement of any Loan
Document or collection of the Obligations, including, without limitation,
Attorney Costs of the Agent; (d) all fees, costs, and expenses of any Lender
arising in connection with an Event of Default and the enforcement of any Loan
Document or collection of the Obligations during the existence of an Event of
Default; (e) all undisputed transfer ,stamp, documentary, or other similar
taxes, assessments, or charges (including, without limitation, the Taxes and
any penalties or interest) levied by any Governmental Authority in respect of
any Loan Document or the transactions contemplated thereby; (f) all reasonable
costs, expenses, assessments, and other charges incurred in connection with
any filing, registration, recording, or perfection of any security interest or
other Lien contemplated by any Loan Document; and (g) all other reasonable
costs and expenses incurred by the Agent in connection with any Loan Document.
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The Attorney Costs of the Agent that the Borrower has agreed to pay hereunder
include, without limitation, the Attorney Costs of the Agent arising in
connection with advice given to the Agent as to its rights and
responsibilities hereunder.
Section 14.2 Indemnification. THE BORROWER SHALL INDEMNIFY THE
AGENT-RELATED PERSONS AND EACH LENDER AND EACH AFFILIATE THEREOF AND THEIR
RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS, AND AGENTS FROM, AND
HOLD EACH OF THEM HARMLESS AGAINST, ANY AND ALL LOSSES, LIABILITIES, CLAIMS,
DAMAGES, PENALTIES, JUDGMENTS, SETTLEMENT COSTS, DISBURSEMENTS, COSTS, AND
EXPENSES (INCLUDING, WITHOUT LIMITATION, ATTORNEY COSTS), UNDISPUTED BY SUCH
AGENT-RELATED PERSON, LENDER, AFFILIATE THEREOF AND THEIR RESPECTIVE OFFICERS,
DIRECTORS, EMPLOYEES, ATTORNEYS, AND AGENTS, TO WHICH ANY OF THEM MAY BECOME
SUBJECT WHICH DIRECTLY OR INDIRECTLY ARISE FROM OR RELATE TO (a) ANY BREACH BY
THE BORROWER OF ANY REPRESENTATION, WARRANTY, COVENANT, OR OTHER AGREEMENT
CONTAINED IN ANY OF THE LOAN DOCUMENTS, (b) THE PRESENCE, RELEASE, THREATENED
RELEASE, DISPOSAL, REMOVAL, OR CLEANUP OF ANY HAZARDOUS MATERIAL LOCATED ON,
ABOUT, WITHIN, OR AFFECTING ANY OF THE ASSETS OF THE BORROWER, (c) THE USE OR
PROPOSED USE OF ANY LETTER OF CREDIT OR ANY PAYMENT OR FAILURE TO PAY WITH
RESPECT TO ANY LETTER OF CREDIT, (d) ANY AND ALL STAMP, FILING, OR SIMILAR
TAXES (INCLUDING, WITHOUT LIMITATION, THE "TAXES" AND ANY INTEREST OR PENALTY)
LEVIES, DEDUCTIONS, AND CHARGES IMPOSED ON ANY AGENT-RELATED PERSON OR ANY
LENDER IN RESPECT OF ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
THEREBY, OR (e) ANY INVESTIGATION, LITIGATION, OR OTHER INCLUDING, WITHOUT
LIMITATION, ANY THREATENED INVESTIGATION, LITIGATION, OR OTHER PROCEEDING
RELATING TO ANY OF THE FOREGOING, THE LOAN DOCUMENTS, OR THE TRANSACTIONS
CONTEMPLATED THEREBY; PROVIDED THAT THE PERSON ENTITLED TO BE INDEMNIFIED
UNDER THIS SECTION SHALL NOT BE INDEMNIFIED FROM OR HELD HARMLESS AGAINST ANY
LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS,
COSTS, OR EXPENSES (INCLUDING, WITHOUT LIMITATION, ATTORNEY COSTS) FOUND IN A
FINAL, NON-APPEALABLE JUDGMENT RENDERED BY A COURT OF COMPETENT JURISDICTION
TO HAVE ARISEN OUT OF OR RESULTED FROM ITS GROSS NEGLIGENCE OR ITS WILLFUL
MISCONDUCT. WITHOUT LIMITING ANY PROVISION OF ANY LOAN DOCUMENT, IT IS THE
EXPRESS INTENTION OF THE PARTIES HERETO THAT EACH PERSON TO BE INDEMNIFIED
UNDER THIS SECTION SHALL BE INDEMNIFIED FROM AND HELD HARMLESS AGAINST ANY AND
ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS,
DISBURSEMENTS, COSTS, AND EXPENSES (INCLUDING, WITHOUT LIMITATION,
ATTORNEY COSTS), UNDISPUTED BY THE PERSON TO BE INDEMNIFIED UNDER THIS
SECTION, ARISING OUT OF OR RESULTING FROM THE SOLE OR CONTRIBUTORY NEGLIGENCE
OF SUCH PERSON. IN THE CASE OF AN INVESTIGATION, LITIGATION, OR OTHER
PROCEEDING TO WHICH THE INDEMNITY IN THIS SECTION APPLIES, SUCH INDEMNITY
SHALL BE EFFECTIVE WHETHER OR NOT SUCH INVESTIGATION, LITIGATION, OR
PROCEEDING IS BROUGHT BY THE BORROWER, ITS DIRECTORS, SHAREHOLDERS, OR
CREDITORS OR ANY PARTY ENTITLED TO INDEMNIFICATION HEREUNDER OR ANY OTHER
PERSON AND WHETHER OR NOT THE TRANSACTIONS CONTEMPLATED HEREBY ARE
CONSUMMATED.
Section 14.3 Limitation of Liability. No Agent-Related Person, Lender,
or any Affiliate, officer, director, employee, attorney, or agent thereof
shall have any liability with respect to the Borrower for and, by the
execution of the Loan Documents to which it is a party, each other party to
any Loan Document, hereby waives, releases, and agrees not to sue any of them
upon, any claim for, any special, indirect, incidental, consequential, or
punitive damages suffered or incurred by any such Person in connection with,
arising out of, or in any way related to any of the Loan Documents, or any of
the transactions contemplated by any of the Loan Documents.
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Section 14.4 No Duty. All attorneys, accountants, appraisers, and
other professional Persons and consultants retained by any of the Agent, Banc
One Capital Markets, Inc., or any Lender shall have the right to act
exclusively in the interest of Agent, Banc One Capital Markets, Inc., and the
Lenders and shall have no duty of disclosure, duty of loyalty, duty of care,
or other duty or obligation of any type or nature whatsoever to the Borrower
or any Guarantor, any shareholders of the Borrower or any Guarantor, or any
other Person.
Section 14.5 No Fiduciary Relationship. The relationship between the
Borrower and the Guarantors on the one hand and the Agent, Banc One Capital
Markets, Inc., and the Lenders on the other is solely that of debtor and
creditor, and neither any of the Agent, Banc One Capital Markets, Inc., nor
any Lender has any fiduciary or other special relationship with the Borrower
or any Guarantor, and no term or condition of any of the Loan Documents shall
be construed so as to deem the relationship between the Borrower and the
Guarantors on the one hand and any of the Agent, Banc One Capital Markets,
Inc., and each Lender on the other to be other than that of debtor and
creditor.
Section 14.6 Equitable Relief. The Borrower recognizes that in the
event the Borrower or any Guarantor fails to pay, perform, observe, or
discharge any or all of the Obligations under the Loan Documents, any remedy
at law may prove to be inadequate relief to the Agent and the Lenders. The
Borrower therefore agrees that the Agent and the Lenders, if the Agent or the
Required Lenders so request, shall be entitled to temporary and permanent
injunctive relief in any such case without the necessity of proving actual
damages.
Section 14.7 No Waiver; Cumulative Remedies. No failure on the part of
Agent or any Lender to exercise and no delay in exercising, and no course of
dealing with respect to, any right, power, or privilege under any Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power, or privilege under any Loan Document preclude
any other or further exercise thereof or the exercise of any other right,
power, or privilege. The rights and remedies provided for in the Loan
Documents are cumulative and not exclusive of any rights and remedies provided
by law.
Section 14.8 Successors and Assigns.
(a) Binding Effect. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns. The Borrower may not assign or transfer any of its rights or
obligations hereunder or under any other Loan Document without the prior
written consent of the Agent and all of the Lenders.
(b) Assignment. Each Lender may assign to one or more Persons all
or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Loan, its Note, and its
Commitment); provided, however, that
(i) each such assignment shall be to an Eligible Assignee (as
used herein,"Eligible Assignee" means (A) a Lender; (B) an Affiliate of a
Lender or, with respect to any Lender that is a fund that invests in bank
loans, any other fund that invests in bank loans and is managed by the same
investment advisor as such Lender (herein a "Related Fund"); and (C) any other
Person approved by the Agent and, unless an Event of Default has occurred and
is continuing at the time any assignment is effected in accordance with this
Section 14.8, the Borrower (such approval not to be unreasonably withheld,
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conditioned, or delayed), such approval to be deemed given by the Borrower if
no objection is received by the assigning Lender and the Agent from the
Borrower within five (5) Business Days after notice of such proposed
assignment has been provided by the assigning Lender to the Agent and the
Borrower; provided, however, that neither the Borrower nor an Affiliate of the
Borrower shall qualify as an Eligible Assignee); provided, further, that in
the event that a Lender intends to make an assignment to an Eligible Assignee
pursuant to clause (C) preceding, the assigning Lender shall provide the Agent
and the Borrower with prior written notice of such intent not less than two
(2) Business Days prior to contacting Persons with respect to such proposed
assignment;
(ii) except in the case of an assignment to another Lender or
an assignment of all of a Lender's rights and obligations under this Agreement
or an assignment by a Lender to one of its Related Funds, any such partial
assignment shall be in an amount at least equal to $5,000,000 and any partial
assignment to a Related Fund shall be in an amount at least equal to
$5,000,000;
(iii) the parties to any such assignment shall execute and
deliver to the Agent for its acceptance an Assignment and Acceptance, together
with the Note subject to such assignment and a processing fee of $3,500.
Upon execution, delivery, and acceptance of such Assignment and
Acceptance, the assignee thereunder shall be a party hereto and, to the extent
of such assignment, have the obligations, rights, and benefits of a Lender
hereunder and the assigning Lender shall, to the extent of such assignment,
relinquish its rights and be released from its obligations under this
Agreement. Upon the consummation of any assignment pursuant to this Section
14.8, the assigning Lender, the Agent, and the Borrower shall upon return of
the assigning Lender's Note make appropriate arrangements so that a new Note
is issued to the assigning Lender (if applicable) and to the assignee. The
original Note of the assigning Lender shall be marked "Canceled" and returned
to the Borrower. If the assignee is not incorporated under the laws of the
U.S. or a state thereof, it shall deliver to the Borrower and the Agent
certification as to exemption from deduction or withholding of Taxes in
accordance with Section 13.10.(c) Amendment of Commitments. Upon execution,
delivery, and acceptance of an Assignment and Acceptance, the signature pages
of the Lenders shall be deemed to be automatically amended to reflect the
resulting Commitments of the Lenders after giving effect to such Assignment
and Acceptance; provided that the Commitments of the Lenders not a party to
such Assignment and Acceptance shall not be affected as a result of such
amendment.
(d) Register. The Agent shall maintain at the Principal Office a
copy of each Assignment and Acceptance delivered to and accepted by it and a
register for the recordation of the names and addresses of the Lenders and the
Commitment of, and principal amount of the Loan owing to, each Lender from
time to time (the "Register"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Agent, and the Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower or any
Lender at any reasonable time and from time to time upon reasonable prior
notice. Upon its receipt of an Assignment and Acceptance executed by the parties
thereto, together with any Note or Notes subject to such assignment and payment
of the processing fee, the Agent shall, if such Assignment and Acceptance has
been completed, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register, and (iii) give prompt notice
thereof to the parties thereto.
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(e) Participations. Each Lender may sell participations to one or
more Persons in all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Commitment
and its Loan); provided, however, that (i) such Lender's obligations under
this Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) the participant shall be entitled to the benefit of the yield protection
provisions contained in Article 5 (to the extent that the Lender selling such
participation would have been entitled thereto) and the right of set-off
contained in Section 12.5, and (iv) the Borrower shall continue to deal solely
and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement, and such Lender shall retain the sole right to
enforce the obligations of the Borrower relating to the Loan and to approve any
amendment, modification, waiver, or consent of any provision of any Loan
Document (other than amendments, modifications, waivers, or consents of the
types relating to the Loan or the Commitment participated in under Section
14.11(a) and Section 14.11(b)).
(f) Pledge to Federal Reserve. Notwithstanding any other provision
set forth in this Agreement, any Lender may at any time assign and pledge all
or any portion of its Loan to any Federal Reserve Bank as collateral security
pursuant to Regulation A of the Board of Governors of the Federal Reserve
System (as the same may be amended, modified, or supplemented from time to
time or any successor regulation therefor) and any Operating Circular issued
by such Federal Reserve Bank. No such assignment shall release the assigning
Lender from its obligations hereunder.
(g) Delivery of Information. Any Lender may furnish any
information concerning the Borrower or any Guarantor in the possession of such
Lender from time to time to assignees and participants (including, without
limitation, prospective assignees and participants) subject to such Persons
agreeing to being bound by the provisions of Section 14.22.
Section 14.9 Survival. All representations and warranties made by the
Borrower or any Guarantor in any Loan Document or in any document, statement,
or certificate furnished in connection with any Loan Document shall survive
the execution and delivery of the Loan Documents and no investigation by the
Agent or any Lender or any closing shall affect the representations and
warranties or the right of the Agent and the Lenders to rely upon them.
Without prejudice to the survival of any other obligation of the Borrower
hereunder, the obligations under Article 5, Section 13.8, Section 14.1, and
Section 14.2 shall survive repayment of the Notes and termination of the
Commitments and the Letters of Credit.
Section 14.10 Entire Agreement. THIS AGREEMENT, THE NOTES, AND THE
OTHER LOAN DOCUMENTS REFERRED TO HEREIN EMBODY THE FINAL, ENTIRE AGREEMENT
AMONG THE PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS,
AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL,
RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR
DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS
AMONG THE PARTIES HERETO.
Section 14.11 Amendments and Waivers. Any provision of any Loan
Document may be amended or waived and any consent to any departure by the
Borrower therefrom may be granted if, but only if, such amendment, waiver, or
consent is in writing and is signed by the Borrower, and the Required Lenders
(and, if Article 13 or the rights or duties of the Agent are affected thereby,
by the Agent); provided that no such amendment, waiver, or consent applicable
to:
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(a) a Loan, Letter of Credit, or Commitment which has the effect
of:
(i) increasing such Commitment,
(ii) reducing the principal of or rate of interest on such Loan
or any Reimbursement Obligation relating to such Letter of Credit or any fees
or other amounts payable hereunder with respect to such Loan, Letter of
Credit, or Commitment,
(iii) postponing any date fixed for the payment of any
principal of or interest on such Loan or any Reimbursement Obligation relating
to such Letter of Credit or any fees or other amounts payable hereunder with
respect to such Loan, Letter of Credit, or Commitment or changing any optional
or mandatory prepayment provision applicable to such Loan or Letter of Credit,
or
(iv) postponing any date fixed for termination of such
Commitment,shall be effective unless also signed by each Lender holding (with
respect to Letters of Credit either directly or through a participation under
Section 2.6(a)) the Loan, Letter of Credit, or Commitment of the type being
modified; (b) any change (including a waiver):
(i) in the definition of Required Lenders or the provisions of
this Section 14.11;
(ii) in the conditions specified in Article 7,
(iii) which has the effect of releasing the Borrower, any
Subsidiary of the Borrower, or any Guarantor in a transaction which is not
otherwise permitted hereby; or
(iv) which releases any Guaranty of the Obligations; shall not
be effective unless signed by all Lenders; and (c) any change (including a
waiver of) Section 11.1 or Section 11.4 shall not be effective unless signed
by Lenders holding at least seventy-five percent (75.0%) of the Commitments
or, if the Commitments have terminated, the outstanding principal amount of
the Loan and participations in the Letters of Credit. Section 14.12 Maximum
Interest Rate.
(a) No interest rate specified in any Loan Document (the "Contract
Rate") shall at any time exceed the Maximum Rate. If at any time the Contract
Rate for any Obligation shall exceed the Maximum Rate, thereby causing the
interest accruing on such Obligation to be limited to the Maximum Rate, then
any subsequent reduction in the Contract Rate for such Obligation shall not
reduce the rate of interest on such Obligation below the Maximum Rate until
the aggregate amount of interest accrued on such Obligation equals the
aggregate amount of interest which would have accrued on such Obligation if
the Contract Rate for such Obligation had at all times been in effect.
(b) No provision of any Loan Document shall require the payment or
the collection of interest in excess of the Maximum Rate. If any excess of
interest in such respect is hereby provided for, or shall be adjudicated to be
so provided, in any Loan Document or otherwise in connection with this loan
transaction, the provisions of this Section 14.12 shall govern and prevail and
neither the Borrower nor the sureties, guarantors, successors, or assigns of
the Borrower shall be obligated to pay the excess amount of such interest or
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any other excess sum paid for the use, forbearance, or detention of sums
loaned pursuant hereto. In the event any Lender ever receives, collects, or
applies as interest any such sum, such amount which would be in excess of the
Maximum Rate shall be applied as a payment and reduction of the principal of
the Obligations, and, if the principal of the Obligations has been paid in
full, any remaining excess shall forthwith be paid to the Borrower. In
determining whether or not the interest paid or payable exceeds the Maximum
Rate, the Borrower and each Lender shall, to the extent permitted by
applicable law, (a) characterize any non-principal payment as an expense, fee,
or premium rather than as interest, (b) exclude voluntary prepayments and the
effects thereof, and (c) amortize, prorate, allocate, and spread in equal or
unequal parts the total amount of interest throughout the entire contemplated
term of the Obligations so that interest for the entire term does not exceed
the Maximum Rate.
Section 14.13 Notices. All notices and other communications provided
for in any Loan Document to which the Borrower is a party shall be given or
made in writing (except as otherwise permitted by Section 4.3) and telecopied,
mailed by certified mail return receipt requested, or delivered to the
intended recipient at the "Address for Notices" specified below its name on
the signature pages hereof, or with respect to a Lender not a party to this
Agreement on the Closing Date, in its Assignment and Acceptance, or, as to any
party at such other address as shall be designated by such party in a notice
to each other party given in accordance with this Section. Except as otherwise
provided in any Loan Document, all such communications shall be deemed to have
been duly given when transmitted by telecopy, subject to telephone
confirmation of receipt, or when personally delivered or, in the case of a
mailed notice, three (3) Business Days after being duly deposited in the
mails, in each case given or addressed as aforesaid; provided, however,
notices to the Agent pursuant to Section 2.6 or Section 4.3 shall not be
effective until received by the Agent. Any agreement of the Agent and the
Lenders herein to receive certain notices by telephone or telecopy is solely
for the convenience and at the request of the Borrower. The Agent, the
Lenders, and the Fronting Bank shall be entitled to rely on the authority of
any Person purporting to be a Person authorized by the Borrower to give such
notice and neither the Agent, any Lender, nor the Fronting Bank shall have any
liability to the Borrower or any other Person on account of any action taken
or not taken by the Agent, any Lender, or the Fronting Bank in reliance upon
such telephonic or telecopy notice. The obligation of the Borrower to repay
the Loan and pay the Reimbursement Obligations shall not be affected in any
way or to any extent by any failure of the Agent, any Lender, or the Fronting
Bank to receive written confirmation of any telephonic or telecopy notice or
the receipt by the Agent, any Lender, or the Fronting Bank of a confirmation
which is at variance with the terms understood by the Agent, such Lender, or
the Fronting Bank to be contained in such telephonic or telecopy notice.
Section 14.14 Governing Law; Venue; Service of Process. THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS (WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES) AND THE APPLICABLE LAWS
OF THE U.S. ANY ACTION OR PROCEEDING AGAINST THE BORROWER UNDER OR IN CONNECTION
WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN ANY TEXAS STATE
COURT LOCATED IN DALLAS COUNTY, TEXAS OR FEDERAL COURT IN THE NORTHERN DISTRICT
OF TEXAS. THE BORROWER IRREVOCABLY (a) SUBMITS TO THE NONEXCLUSIVE JURISDICTION
OF SUCH COURTS, AND (b) WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO
THE VENUE OF ANY SUCH ACTION OR PROCEEDING BROUGHT IN SUCH COURT OR THAT SUCH
COURT IS AN INCONVENIENT FORUM. THE BORROWER AGREES THAT SERVICE OF PROCESS UPON
IT MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, AT ITS
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ADDRESS SPECIFIED OR DETERMINED IN ACCORDANCE WITH THE PROVISIONS OF SECTION
14.13. NOTHING IN THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL AFFECT THE
RIGHT OF THE AGENT OR ANY LENDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED
BY LAW OR SHALL LIMIT THE RIGHT OF THE AGENT OR ANY LENDER TO BRING ANY ACTION
OR PROCEEDING AGAINST THE BORROWER OR WITH RESPECT TO ANY OF ITS PROPERTY IN
COURTS IN OTHER JURISDICTIONS. ANY ACTION OR PROCEEDING BY THE BORROWER AGAINST
ANY OF THE AGENT, BANC ONE CAPITAL MARKETS, INC., OR ANY LENDER SHALL BE BROUGHT
ONLY IN A COURT LOCATED IN DALLAS COUNTY, TEXAS.
Section 14.15 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
Section 14.16 Severability. Any provision of any Loan Document held by
a court of competent jurisdiction to be invalid or unenforceable shall not
impair or invalidate the remainder of such Loan Document and the effect
thereof shall be confined to the provision held to be invalid or illegal.
Section 14.17 Headings. The headings, captions, and arrangements used
in this Agreement are for convenience of reference only and shall not affect
the interpretation of this Agreement.
Section 14.18 Non-Application of Chapter 15 of Texas Credit Code. The
provisions of Chapter 15 of the Texas Credit Code (relating to certain
revolving credit facilities) are specifically declared by the parties hereto
not to be applicable to any Loan Documents or to the transactions contemplated
thereby.
Section 14.19 Construction. The Borrower, each Guarantor (by its
execution of the Loan Documents to which it is a party), the Agent and each
Lender acknowledges that each of them has had the benefit of legal counsel of
its own choice and has been afforded an opportunity to review the Loan
Documents with its legal counsel and that the Loan Documents shall be
construed as if jointly drafted by the parties thereto.
Section 14.20 Independence of Covenants. All covenants under the Loan
Documents shall be given independent effect so that if a particular action or
condition is not permitted by any of such covenants, the fact that it would be
permitted by an exception to, or be otherwise within the limitations of,
another covenant shall not avoid the occurrence of a Default if such action is
taken or such condition exists.
Section 14.21 Waiver of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND
EXPRESSLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR
COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF
OR RELATING TO ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
THEREBY OR THE ACTIONS OF THE AGENT OR ANY LENDER IN THE NEGOTIATION,
ADMINISTRATION, OR ENFORCEMENT THEREOF.
Section 14.22 Confidentiality. The Agent and each Lender agrees to keep
confidential any information obtained by it from the Borrower or its agents or
representatives pursuant hereto and the other Loan Documents identified as
confidential in writing at the time of delivery in accordance with such
Lender's customary practices and agrees that it will only use such information
in connection with the transactions contemplated by this Agreement and not
disclose any of such information other than (a) to the Agent's or such
Lender's officers, directors, employees, representatives, attorneys, agents,
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or Affiliates who are advised of the confidential nature of such information,
(b) to the extent such information presently is or hereafter becomes available
to the Agent or such Lender on a non-confidential basis from any source or as
such information that is in the public domain at the time of disclosure, (c)
to the extent disclosure is required by law, regulation, subpoena, or judicial
order or process (provided that notice of such requirement or order shall be
promptly furnished to the Borrower unless such notice is legally prohibited)
or requested or required by bank regulators or auditors or any administrative
body, commission, or other Governmental Authority to whose jurisdiction the
Agent or such Lender may be subject, (d) to assignees or participants or
potential assignees or participants (e) to professional advisors or direct or
indirect contractual counterparties in Hedge Agreements, (f) to the extent
required in connection with any litigation to which the Agent or any Lender is
a party, (g) to rating agencies, their employees, representatives, attorneys,
agents, or affiliates if requested or required by such agencies in connection
with a rating relating to the Loan, (h) to any Lender or its Affiliates, and
(i) with the Borrower's prior written consent.
Section 14.23 Nonreliance on Margin Stock. Each Lender hereby
represents that it is not relying on or looking to any margin stock (as
defined in Regulation U of the Board of Governors of the Federal Reserve
System), directly or indirectly, for the repayment of the Loan.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
BORROWER:
CEC ENTERTAINMENT, INC.
By:
----------------------------------------
Richard M. Frank
Chief Executive Officer
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Address for Notices:
4414 West Airport Freeway
Irving, Texas 75062
Attn: Chief Financial Officer
Fax No.: 972-258-5594
With a copy to:
4414 West Airport Freeway
Irving, Texas 75062
Attn: Legal Department
Fax No.: 972-258-5527
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AGENT and FRONTING BANK:
BANK ONE, TEXAS, NATIONAL
ASSOCIATION, as the Agent and the
Fronting Bank
By:
--------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
Address for Notices:
1717 Main Street, 3rd Floor
Dallas, Texas 75201
Attn: Paul Koch
Fax No.: 214-290-2683
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LENDERS:
BANK ONE, TEXAS, N.A.
Commitment: $30,000,000
By:
--------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
Address for Notices:
1717 Main Street, 3rd Floor
Dallas, Texas 75201
Attn: Paul Koch
Fax No.: 214-290-2683
Applicable Lending Office for LIBOR
Balances and Prime Rate Balance:
1717 Main Street, 3rd Floor
Dallas, Texas 75201
Attn: Lisa P. Cook
Fax No.: 214-290-5226
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SUNTRUST BANK
Commitment: $20,000,000
By:
--------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
Address for Notices:
201 4th Avenue North, 3rd Floor
Nashville, Tennessee 37219
Attn: William D. Priester
Fax No.: 615-748-5269
Applicable Lending Office for LIBOR
Balances and Prime Rate Balance:
201 4th Avenue North
Nashville, Tennessee 37219
Attn: Leigh Ann Gregory
Fax No.: 615-748-4611
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FIRSTAR BANK, N.A.
Commitment: $8,500,000
By:
--------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
Address for Notices:
One Firstar Plaza, 12th Floor
St. Louis, Missouri 63101
Attn: Greg Dryden
Fax No.: 314-418-3859
Applicable Lending Office for LIBOR
Balances and Prime Rate Balance:
1850 Osborne Ave.
Oshkosh, Wisconsin 54901
Attn: Connie Sweeney
Fax No.: 920-426-7954
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THE FROST NATIONAL BANK
Commitment: $8,500,000
By:
--------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
Address for Notices:
2727 N. Harwood, 10th Floor
Dallas, Texas 75201
Attn: Chris W. Holder
Fax No.: 214-515-4955
Applicable Lending Office for LIBOR
Balances and Prime Rate Balance:
100 W. Houston Street, RB-2
San Antonio, Texas 78205
Attn: Janice Hill
Fax No.: 210-220-4389
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BANK HAPOALIM B.M., CHICAGO BRANCH
Commitment: $8,000,000
By:
--------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
Address for Notices:
225 North Michigan Avenue, Suite 900
Chicago, Illinois 60601
Attn: Lawrence K. Rocca
Fax No.: 312-228-6490
Applicable Lending Office for LIBOR
Balances and Prime Rate Balance:
225 North Michigan Avenue, Suite 900
Chicago, Illinois 60601
Attn: Karen M. Adams
Fax No.: 312-228-6490
78
<PAGE>
Form of Note
EXHIBIT B Form of Assignment and Acceptance
EXHIBIT C Form of Compliance Certificate
EXHIBIT D Form of Subsidiary Guaranty
EXHIBIT E Form of Notice of Borrowings, Conversions,
Continuations, or Prepayments
EXHIBIT F Form of Joinder Agreement
EXHIBIT G Current Form of Letter of Credit Agreement
79
<PAGE>
Schedule 8.4
to
CEC Entertainment, Inc.
Credit Agreement
Operation of Business
None.
80
<PAGE>
Schedule 8.5
to
CEC Entertainment, Inc.
Credit Agreement
Litigation and Judgments
None.
81
<PAGE>
Schedule 8.6
to
CEC Entertainment, Inc.
Credit Agreement
Locations
No. St Street Address Leased/Owned S. F. Type
330 AL 500 Old Town Rd.
Birmingham, AL 35216 Owned 10,200 Restaurant
372 AL 9323 Parkway East
Birmingham, AL 35215 Leased 12,500 Restaurant
560 AL 710 Downtowner Loop W
Mobile, AL 36609 Leased 10,200 Restaurant
608 AL 2940 E. South Blvd.
Montgomery, AL 36116 Leased 10,200 Restaurant
705 AL 1220 Jordon Lane NW
Huntsville, AL 35805 Leased 13,329 Restaurant
301 AR 148 Central Shopping Mall
1200 Waldron
Ft. Smith, AR 72903 Leased 10,345 Restaurant
302 AR 1330 N. College
Fayetteville, AR 72703 Leased 10,444 Restaurant
303 AR 10901 Rodney Parham
Little Rock, AR 72212 Leased 13,521 Restaurant
304 AR 4120 Landers Road
N. Little Rock, AR 72117 Leased _____ Restaurant
041 CA 3760 Ming Ave.
Bakersfield, CA 93309 Leased 10,200 Restaurant
042 CA Times Sq. S/C
3117 W. Shaw, Ste. 107
Fresno, CA 93711 Leased 12,000 Restaurant
043 CA 4345 W. Mineral King Hwy.
Visalia, CA 93277 Leased 10,200 Restaurant
044 CA 624 W. Mission
Escondido, CA 92025 Leased 13,700 Restaurant
045 CA 2481 Vista Way
Oceanside, CA 92054 Leased 9,900 Restaurant
049 CA 44650 Valley Central Way
Lancaster, CA 93536 Leased 7,618 Restaurant
095 CA 5250 Philadelphia
Suite K, Chino, CA 91710 Leased 11,221 Restaurant
108 CA 2541-43 El Camino Real
Redwood City, CA 94063 Leased 12,119 Restaurant
109 CA 930 N. San Fernando
Burbank, CA 91504 Leased 12,150 Restaurant
318 CA 1447 North Davis Rd.
Salinas, CA 93907 Leased 10,600 Restaurant
320 CA 130 W. Hillcrest Dr.
Thousand Oaks, CA 91361 Leased 10,532 Restaurant
321 CA 39839 Mowry School Rd.
Newark, CA 94560 Leased 12,000 Restaurant
322 CA 7448 Amador Valley Blvd.
Dublin, CA 94568 Leased 10,000 Restaurant
324 CA 3737 E. Foothill
Pasadena, CA 91103 Leased 11,494 Restaurant
325 CA 1134 S. Harbor Blvd.
Fullerton, CA 92632-3029 Leased 14,240 Restaurant
329 CA 6251 Sunrise Blvd.
Citrus Heights, CA 95610 Leased 14,980 Restaurant
353 CA 72513 Hwy 111, Ste. B
Palm Desert, CA 92260 Leased 12,000 Restaurant
355 CA 25955 The Old Road
Valencia, CA 91381 Leased 10,920 Restaurant
356 CA 12790 Armargas Rd.
Victorville, CA 92392 Leased 10,600 Restaurant
357 CA 5151 Lakewood Blvd.
Lakewood, CA 90712 Leased 10,185 Restaurant
358 CA 2821 Pacific Coast Hwy.
Torrance, CA 90505 Leased 10,333 Restaurant
399 CA 601 Rohnert Park Expr.
Rohnert Park, CA 94928 Leased 9,000 Restaurant
82
<PAGE>
No. St Street Address Leased/Owned S. F. Type
404 CA 1371 Kooser Rd.
San Jose, CA 95118 Leased 20,272 Restaurant
405 CA 5500 Grossmont Ctr. Dr.
Ste. J-34
La Mesa, CA 91942 Leased 10,624 Restaurant
406 CA 15511 Edwards St.
Huntington Bch, CA 92647 Leased 16,416 Restaurant
407 CA 191 N. McKinley
Corona, CA 91719 Leased 8,500 Restaurant
408 CA 20 El Cerrito Plaza
El Cerrito, CA 94530
(Closing July 31, 2000.) Leased 8,370 Restaurant
409 CA 1900 S. Brea Canyon Rd.
Diamond Bar, CA 91765 Leased 8,900 Restaurant
410 CA 1690-96 Arden Way
Sacramento, CA 95815 Leased 13,300 Restaurant
411 CA 71 Tierra Rejada, Ste. B
Simi Valley, CA 93065 Leased 9,100 Restaurant
413 CA 601 Azusa Ave.
Covina, CA 91722 Leased 9,600 Restaurant
414 CA 25110 Hancock Ave
Suites 101-106
Murrieta, CA 92562-5975 Leased 6,395 Restaurant
415 CA 955 South "E" St., Ste. G
San Bernardino, CA 92408 Leased 10,000 Restaurant
418 CA 8375 Laurel Canyon Blvd.
Sun Valley, CA 91352 Leased 12,124 Restaurant
419 CA 9339 Foothill Blvd., Ste. E
R. Cucamonga, CA 91730 Leased 10,000 Restaurant
421 CA 2300 Harbor Blvd., Bldg. 25
Costa Mesa, CA 92626 Leased 10,000 Restaurant
422 CA 13101 Harbor Blvd.
Garden Grove, CA 92645 Leased 16,100 Restaurant
423 CA 10949 Firestone
Norwalk, CA 90651 Leased 9,095 Restaurant
428 CA 4567 Peck Road
El Monte, CA 91734 Leased 11,175 Restaurant
429 CA 16269 San Fernando Miss.
Granada Hills, CA 91344 Leased 10,000 Restaurant
439 CA 1143 Highland Ave.
National City, CA 92050 Leased 12,000 Restaurant
440 CA 6005 Rosemead Blvd.
Pico Rivera, CA 90660 Leased 9,975 Restaurant
441 CA 3146 Sports Arena Blvd.
San Diego, CA 92110 Leased 11,523 Restaurant
442 CA 2300 N. Rose Dr.
Placentia, CA 92670 Leased 9,616 Restaurant
443 CA 9840 Hibert St.
San Diego, CA 92131 Leased 10,500 Restaurant
444 CA 1270-1272 El Camino Real
San Bruno, CA 94066 Leased 9,000 Restaurant
445 CA 17069 Valley Blvd., Ste. D
Fontana, CA 92335 Leased 12,240 Restaurant
446 CA 5089 E. Florence Ave.
Bell CA 90201 Leased 16,550 Restaurant
447 CA 15100 Rosecrans
La Mirada, CA 90638 Leased 10,000 Restaurant
451 CA 8425 Reseda Blvd.
Northridge, CA 91324 Leased 10,180 Restaurant
453 CA 4714 Telephone Rd.
Ventura, CA 93003 Leased 13,000 Restaurant
461 CA 22940 Van Owen St.
West Hills, CA 91307 Leased 9,000 Restaurant
462 CA Carson Mall
20700 Avalon Blvd #130
Carson, CA 90745 Leased 13,040 Restaurant
465 CA 16920 Prairie Ave.
Torrance, CA 90504 Leased 14,116 Restaurant
115 CO 7510 Parkway Drive
Littleton, CO 80124 Owned 12,518 Restaurant
558 CO 5156 N. Academy Blvd.
Colorado Springs, CO 80907 Leased 10,826 Restaurant
710 CO 14005 E. Exposition
Aurora, CO 80012 Leased 15,000 Restaurant
83
<PAGE>
No. St Street Address Leased/Owned S. F. Type
717 CO 9301 Ralston Rd.
Arvada, CO 80003 Leased 11,095 Restaurant
721 CO 1001 W. Hampden Ave.
Englewood, CO 80110 Owned 9,440 Restaurant
865 CO 105 W. Prospect Rd.
Ft. Collins, CO 80525 Leased 13,000 Restaurant
463 CT 650 Wolcott
Waterbury, CT 06705 Leased 9,512 Restaurant
467 CT 82 Buckland St.
Manchester, CT 06040 Leased 9,000 Restaurant
468 CT 82 Boston Post Rd.
Orange, CT 06477 Leased 10,410 Restaurant
470 CT 3075 Berlin Turnpike
Newington, CT 06111 Leased 9,260 Restaurant
650 CT 389 N. Frontage Rd.
New London, CT 06320 Leased 8,000 Restaurant
954 DE 3601 Silverside Rd.
Wilmington, DE 19810 Leased 12,555 Restaurant
062 FL 9820 Atlantic Blvd.
Jacksonville, FL 32211 Leased 10,000 Restaurant
065 FL 7350 Plantation Rd.
Pensacola, FL 32504 Owned 10,217 Restaurant
066 FL 6065 Youngerman Circle
Jacksonville, FL 32244 Owned 10,200 Restaurant
420 FL 1540 W. Brandon Blvd.
Brandon, FL 33511 Leased 18,500 Restaurant
424 FL 3805 W 20th St., Ste. 135
Hialeah, Fl 33012 Leased 12,000 Restaurant
426 FL 3558 US Hwy 98 North
Lakeland, FL 33809 Leased 7,000 Restaurant
430 FL 14308 Dale Mabry Hwy
Tampa, FL 33618-2051 Leased 9,845 Restaurant
432 FL 4646 Okeechobee Blvd.
W. Palm Beach, FL 33417 Leased 8,000 Restaurant
433 FL 8515 Pines Blvd.
Pembroke Pines, FL 33024 Leased 9,000 Restaurant
434 FL 8099 W Oakland Park Blvd
Sunrise, FL 33351 Leased 9,000 Restaurant
435 FL 20335 Biscayne Blvd.
Suuite L-1
N. Miami, FL 33180 Leased 10,250 Restaurant
436 FL Cypress Point S/C
25921 US Hwy 19
Clearwater, FL 34623 Leased 10,860 Restaurant
460 FL 1024 58th St. North
St. Petersburg, FL 33710 Leased 20,000 Restaurant
681 FL 541 W. Hwy 436
Altamonte Sp., FL 32701 Leased 8,061 Restaurant
690 FL 2400 NW Federal Hwy
Stuart, FL 34994 Leased 9,409 Restaurant
718 FL 7419 International Drive
Orlando, FL 32809 Leased 10,200 Restaurant
719 FL 7456 W. Colonial Drive
Orlando, FL 32818 Leased 11,316 Restaurant
720 FL 905 44th Ave. West
Bradenton, FL 34207 Leased 13,565 Restaurant
722 FL 449 N. Alafaya Trail
Orlando, FL 32828 Leased 11,121 Restaurant
117 GA 824 Earnest W. Barrett Pk.
Kennesaw, GA 30144 Owned 12,518 Restaurant
601 GA 335 Upper Riverdale Rd.
Jonesboro, GA 30236 Leased 10,100 Restaurant
605 GA 6700 Abercorn
Savannah, GA 31405 Leased 10,200 Restaurant
607 GA 4340 Roswell Road
NE, Marietta, GA 30062 Leased 10,200 Restaurant
611 GA 5019 Jimmy Carter Blvd.
Norcross, GA 30093 Leased 10,200 Restaurant
612 GA 3654-I Atlanta Highway
Athens, GA 30606 Leased 10,321 Restaurant
729 GA 2998 Hargrove Rd.
Smyrna, GA 30339 Owned 10,200 Restaurant
869 GA 3201 Macon Rd.
Columbus, GA 31906 Leased 11,478 Restaurant
939 GA 3435 Wrightsboro Rd.
Augusta, GA 30909 Leased 9,800 Restaurant
84
<PAGE>
No. St Street Address Leased/Owned S. F. Type
955 IA 2915 McClain Dr.
Cedar Falls, IA 50613 Leased 10,679 Restaurant
956 IA 170 Collins Rd., N.E.
Cedar Rapids, IA 52402 Leased 20,000 Restaurant
957 IA 903 E. Kimberly Rd.
Davenport, IA 52807 Leased 12,000 Restaurant
958 IA 1431 22nd St.
W. Des Moines, IA 50265 Leased 10,000 Restaurant
959 ID 6255 Fairview Ave.
Boise, ID 83704 Owned 12,032 Restaurant
034 IL 4031 W. 95th
Oaklawn, IL 60453 Leased 12,828 Restaurant
047 IL 2369 McArthur Ave
Springfield, IL 62704 Leased 11,431 Restaurant
054 IL 1315 North Ave.
Melrose Park, IL 60160 Owned 9,200 Restaurant
058 IL 16090 S. Harlem Ave.
Tinley Park, IL 60477 Leased 9,040 Restaurant
059 IL 990 S. Barrington Rd.
Streamwood, IL 60107 Leased 9,040 Restaurant
063 IL 5030 S. Kedzie
Chicago, IL 60632 Leased 13,856 Restaurant
073 IL 106 Towncenter
Matteson, IL 60443 Leased 12,024 Restaurant
094 IL 1965 W. Jefferson
Joliet, IL 60435 Leased 12,950 Restaurant
097 IL 1154 E. Ogden
Naperville, IL 60540 Leased 10,200 Restaurant
349 IL 511 N. Randall Road
Batavia, IL 60510 Owned 11,300 Restaurant
360 IL 2601 W. Lake
Peoria, IL 60601 Leased 12,240 Restaurant
456 IL 7142 Carpenter
Skokie, IL 60077 Leased 10,361 Restaurant
619 IL 10850 Lincoln Trail
Fairview Heights, Il 62208 Leased 7,314 Restaurant
685 IL 7409 Cass St.
Darien, IL 60559 Leased 11,520 Restaurant
687 IL 1730 W. Fullerton Ave.
Chicago, IL 60614 Leased 9,460 Restaurant
688 IL 955 W. Dundee Rd
Arlington Heights, IL 60004 Leased 8,061 Restaurant
960 IL 3600 E. State St.
Rockford, IL 61108 Leased 11,385 Restaurant
060 IN 559 N. Green River Rd.
Evansville, IN 47715 Leased 10,500 Restaurant
096 IN 5501 E. 82nd St.
Indianapolis, IN 46250 Leased 10,200 Restaurant
346 IN 8804 US 31 South
Indianapolis, IN 46227 Leased 10,200 Restaurant
348 IN 2893 E. 80th Ave.
Merrillville, IN 46410 Leased 11,300 Restaurant
606 IN 4910 W. 38th St.
Indianapolis, IN 46254 Leased 10,200 Restaurant
714 IN 8109 E. Washington
Indianapolis, IN 46219 Leased 12,215 Restaurant
931 IN 822 W. McKinley
Mishawaka, IN 46545 Leased 10,200 Restaurant
946 IN 711 Coliseum Blvd.
Ft. Wayne, IN 46808 Owned 10,200 Restaurant
___ KS Bldg. 2704, Unit D-1
Topeka, KS 66619 Leased 28,000 Warehouse
067 KS 10510 Metcalf Lane
Overland Park, KS 66206 Owned 9,970 Restaurant
961 KS 2215 SW Wanamaker Rd.
Topeka, KS 66614 Leased 9,775 Restaurant
962 KS 3223 N. Rock Rd.
Wichita, KS 67226 Leased 9,462 Restaurant
111 KY 2030 S. Hurstbourne Pkwy.
Louisville, KY 40220 Leased 14,616 Restaurant
963 KY 1555 New Circle Rd.
Lexington, KY 40509 Leased 10,200 Restaurant
048 LA 1725 Metro Dr.
Alexandria, LA 71301 Owned 8,000 Restaurant
85
<PAGE>
No. St Street Address Leased/Owned S. F. Type
609 LA 11324 Boardwalk
Baton Rouge, LA 70816 Leased 8,061 Restaurant
684 LA 3701 General DeGaulle
New Orleans, LA 70114 Leased 11,136 Restaurant
715 LA 3555 Ambassador Caffery
Lafayette, LA 70503 Leased 18,580 Restaurant
716 LA 7000 Veterans Blvd.
Metairie, LA 70003 Leased 11,920 Restaurant
457 MA 209 Plain St.
Lowell, MA 01852 Leased 9,000 Restaurant
459 MA 50 Southwest Cutoff
Worcester, MA 01604 Leased 10,950 Restaurant
464 MA 287 Washington St. So.
Attleboro Ma 02703 Leased 8,500 Restaurant
473 MA 200 Westgate Dr., Suite 93
Brockton, MA 02401 Leased 8,850 Restaurant
476 MA 1716 Boston Rd.
Springfield, MA 01129 Leased 10,180 Restaurant
477 MA 1665 VFW Parkway
Boston, MA 02132 Leased 10,650 Restaurant
478 MA 139 Endicott
Danvers, MA 01923 Leased 12,000 Restaurant
479 MA 801 Worcester
Natick, MA 01760 Leased 10,351 Restaurant
488 MA Ten Wall St. (Hwy. 95/3A)
Burlington, MA 01803 Leased 10,595 Restaurant
751 MA 412-418 St. Rd. 6
N. Dartmouth, MA 02747 Leased 7,500 Restaurant
050 MD 2333-A Forest Dr.
Annapolis, MD 21401 Leased 8,704 Restaurant
079 MD 809 Goucher Blvd.
Towson, MD 21286 Leased 9,200 Restaurant
087 MD 936 Fairlawn Ave.
Laurel, MD 20707 Leased 11,878 Restaurant
092 MD 2928 Festival Way
Waldorf, MD 20601 Leased 8,741 Restaurant
401 MD 516 N. Frederick
Gaithersburg, MD 20878 Leased 11,128 Restaurant
402 MD 13807 Outlet Drive
Silver Spring, MD 20904 Leased 10,500 Restaurant
403 MD 8354 Eastern Ave.
Baltimore, MD 21224 Leased 8,892 Restaurant
412 MD 5912 Baltimore Nat. Pike
Baltimore, MD 21228 Leased 9,000 Restaurant
474 MD 6637 Gov. Ritchie Hwy.
Glen Burnie, MD 21061 Leased 11,129 Restaurant
502 MD 5 Bel Air South Parkway
Ste. N-1447
Bel Air, MD 21014 Leased 6,450 Restaurant
080 MI 42001 Ford Rd.
Canton, MI 48187 Leased 9,094 Restaurant
085 MI 201 Auburn
Rochester Hills, MI 48307 Leased 10,465 Restaurant
103 MI 13745 Lakeside Circle
Sterling Heights, MI 48313 Leased 12,518 Restaurant
323 MI 3489 Miller Rd.
Flint, MI 48507 Leased 10,300 Restaurant
326 MI 5451 "L" W. Saginaw Hwy.
Lansing, MI 48917 Leased 8,400 Restaurant
328 MI 3175 Alpine
Walker, MI 49504 Leased 12,700 Restaurant
335 MI 3655 28th St. SE
Grand Rapids, MI 49508 Leased 10,060 Restaurant
336 MI 5105 Bay Rd.
Saginaw, MI 48604 Leased 10,200 Restaurant
337 MI Oakland Point S/C
390 N. Telegraph Rd
Pontiac, MI 48341 Leased 9,619 Restaurant
359 MI 24399 Michigan
Dearborn, MI 48124 Leased 12,656 Restaurant
475 MI 31920 Gratiot
Roseville, MI 48066 Leased 10,500 Restaurant
713 MI 15300 Toledo Rd.
Southgate, MI 48195 Leased 15,635 Restaurant
793 MN 1025 Burnsville Center
Burnsville, MN 55306 Leased 12,018 Restaurant
86
<PAGE>
No. St Street Address Leased/Owned S. F. Type
794 MN 12945 Elm Creek
Maple Grove, MN 55369 Leased 14,850 Restaurant
795 MN 8943 University Ave.
Blaine, MN 55434 Leased 10,424 Restaurant
796 MN 1422 South Roberts
West St. Paul, MN 55118 Leased 10,000 Restaurant
797 MN 7505 France Ave. South
Edina, MN 55435 Leased 14,590 Restaurant
077 MO 2726 NE Vivion Rd.
Kansas City, MO 64119 Leased 15,000 Restaurant
082 MO 4039 S. Noland Rd.
Independence, MO 64055 Leased 8,045 Restaurant
741 MO 2805 Target Dr.
St. Louis, MO 63136 Leased 10,200 Restaurant
742 MO 3500K S. Glenstone Ave.
Springfield, MO 65804 Leased 7,520 Restaurant
855 MO 720 S. County Centerway
St Louis, MO 63219 Leased 11,868 Restaurant
947 MO 15913 Manchester Rd.
Ellisville, MO 63011 Leased 9,500 Restaurant
948 MO 2669 Bogey Rd.
St. Charles, MO 63301 Leased 13,117 Restaurant
562 MS 15082 Crossroads Pkwy
Gulfport, MS 39503 Leased 11,300 Restaurant
064 NC 7701 Pineville-Mthws Rd.
Charlotte, NC 28226 Leased 12,000 Restaurant
121 NC 620 Hanes Mall Blvd.
Winston-Salem, NC 27103 Leased 9,665 Restaurant
380 NC Beacon Ridge Plaza
3724 Mayfair St.
Durham, NC 27707 Owned 7,500 Restaurant
639 NC 5612 Albemarle Rd.
Ste. 100
Charlotte, NC 28212 Leased 9,947 Restaurant
568 NE 221 N. 66th
Lincoln, NE 68505 Leased 10,200 Restaurant
733 NE 225 N. 76th
Omaha, NE 68114 Leased 10,250 Restaurant
471 NH 30 Fox Run Rd.
Newington, NH 03801 Leased 14,000 Restaurant
472 NH 1525 S. Willow
Manchester, NH 03103 Leased 12,000 Restaurant
480 NJ 1107 Route 35
Middletown, NJ 07748 Leased 9,000 Restaurant
481 NJ 1500 Almonesson Rd.
Deptford, NJ 08096 Leased 9,000 Restaurant
485 NJ 8101 Tonelle Ave.
N. Bergen, NJ 07047 Leased 12,000 Restaurant
487 NJ 1120 Rte 1 North
Edison, NJ 08817 Leased 8,500 Restaurant
489 NJ 1639 Rt. 23 South
Wayne, NJ 07470 Leased 9,562 Restaurant
498 NJ 2100 Rt. 38
Cherry Hill, NJ 08002 Leased 9,000 Restaurant
500 NJ 28 Brick Plaza
Bricktown, NJ 08723 Leased 8,900 Restaurant
501 NJ Bergen Mall Space 920
221 South Mall
Paramus, N.J. 07652 Leased 11,059 Restaurant
512 NJ 600 Promenade Blvd.
Bridgewater, NJ 08807 Leased 10,600 Restaurant
525 NJ 145 Rt 10
East Hanover, NJ 07936 Leased 10,000 Restaurant
332 NM 4418 Wyoming Blvd. NE
Albuquerque, NM 87111 Leased 10,000 Restaurant
314 NV 1521 W. Sunset Road
Henderson, NV 89015 Leased 11,300 Restaurant
315 NV 7381 W. Lake Mead
Las Vegas, NV 89128 Leased 11,300 Restaurant
316 NV 5000 Smithridge Dr.
Reno, NV 89502 Leased 10,000 Restaurant
494 NY 1775-P South Ave.
Staten Island, NY 10314 Leased 11,213 Restaurant
87
<PAGE>
No. St Street Address Leased/Owned S. F. Type
496 NY 121 Sunrise Hwy.
Patchogue, NY 11772 Leased 15,000 Restaurant
499 NY Delco Plaza
11-15 Hanover Place
Hicksville, NY 11801 Leased 9,450 Restaurant
504 NY 2115 Jericho Turnpike
Commack, NY 11725 Leased 9,000 Restaurant
505 NY South Hills Mall
838 South Rd
Poughkeepsie, NY 12601 Leased 8,783 Restaurant
511 NY 155 Sunrise Hwy.
West Islip, NY 11795 Leased 14,025 Restaurant
513 NY 3419 48th Street
L. I. City, NY 11101 Leased 14,699 Restaurant
516 NY 4408 Milestrip Road
Buffalo, NY 14219 Leased 13,582 Restaurant
517 NY 1000 Hylan Drive
Rochester, NY 14623 Leased 12,000 Restaurant
520 NY 607 Troy Schenectady Rd.
Latham, NY 12110 Leased 11,350 Restaurant
840 NY 4994 Harlem Road
Amherst, NY 14226 Leased 15,117 Restaurant
101 OH 7601 W. Ridgewood Rd.
Parma, OH 44129 Leased 13,500 Restaurant
552 OH 521 Boardman Poland Rd.
Youngstown, OH 44512 Leased 12,000 Restaurant
553 OH 2779 Market Place St.
Akron, OH 44333 Leased 10,000 Restaurant
554 OH 5455 Airport Hwy Ste 9-I
Toledo, OH 43615 Leased 9,000 Restaurant
555 OH 30 Prestige Place
Miamisburg, OH 45342 Owned 10,364 Restaurant
556 OH Franklin Park Place
5077 Monroe
Toledo, OH 43623 Leased 9,000 Restaurant
557 OH 3631 Soldano Blvd.
Columbus, OH 43228 Leased 7,825 Restaurant
559 OH 26104 Great N. Shopp. Ctr.
North Olmsted, OH 44070 Leased 9,374 Restaurant
561 OH 8801 Colerain
Cincinnati, OH 45239 Leased 10,200 Restaurant
736 OH 2711 Martin Rd
Dublin, OH 43016 Leased 8,000 Restaurant
737 OH 4284 Macsway
Columbus, OH 43232 Leased 10,200 Restaurant
738 OH 1429 E. Kemper Rd.
Sharonville, OH 45246 Owned 10,200 Restaurant
740 OH 6370 Strip Ave., N.W.
North Canton, OH 44720 Leased 9,900 Restaurant
743 OH 8000 Plaza Blvd.
Mentor, OH 44060 Leased 9,294 Restaurant
938 OH 2345 Valley Loop Rd.
Springfield, OH 45504 Leased 10,200 Restaurant
388 OK 7505 S. Walker
Oklahoma City, OK 73139 Leased 11,348 Restaurant
389 OK 6817 NW Expressway
Okalhoma City, OK 73132 Leased 10,200 Restaurant
391 OK 7108 S. Memorial Dr.
Tulsa, OK 74133 Leased 10,885 Restaurant
437 PA 9175 Roosevelt #2
Philadelphia, PA 19114 Leased 12,000 Restaurant
448 PA 1000 Lehigh Valley Mall
Whitehall, PA 18052 Leased 12,000 Restaurant
450 PA 9 Snyder Ave.
Philadelphia, PA 19148 Leased 8,800 Restaurant
452 PA 1283 E. Lincoln Hwy.
Levittown, PA 19056 Leased 9,520 Restaurant
455 PA 1210 Bethlehem Pike
North Wales, PA 19454 Leased 9,390 Restaurant
483 PA 381 Baltimore Pke
Springfield, PA 19064 Leased 11,000 Restaurant
540 PA 2020 Fruitville Pike
Lancaster, PA 17601 Leased 9,000 Restaurant
88
<PAGE>
No. St Street Address Leased/Owned S. F. Type
541 PA 1003 Commerce Blvd.
Dickson City, PA 18519 Leased 11,300 Restaurant
964 PA 3883 Union Deposit Rd.
Harrisburg, PA 17109 Leased 10,332 Restaurant
965 PA 2801 E. Market St.
York, PA 17402 Leased 10,031 Restaurant
645 RI 650 Bald Hill Rd.
Suite 100-B
Warwick, RI 02886 Leased 11,300 Restaurant
383 SC 660 Spartan Blvd., #250
Spartanburg, SC 29301 Leased 9,300 Restaurant
966 SC 1610 Sam Rittenburg Blvd.
Charleston, SC 29407 Leased 14,937 Restaurant
967 SC 1775 Burning Tree
Columbia, SC 29210 Leased 9,996 Restaurant
968 SC 253 Congaree Rd.
Greenville, SC 29607 Leased 10,282 Restaurant
055 TN 8225 Kingston Pike
Knoxville, TN 37919 Leased 10,600 Restaurant
068 TN 2070 Gallatin Rd. North
Madison, TN 37072 Leased 9,600 Restaurant
074 TN 5312 Hickory Hollow Lane
Antioch, TN 37013 Leased 13,000 Restaurant
969 TN 22 Northgate Park
Chattanooga, TN 37415 Leased 10,500 Restaurant
970 TN 3649 Hichory Hill Rd.
Memphis, TN 38115 Leased 9,450 Restaurant
971 TN 3268 Austin Peay Hwy.
Memphis, TN 38128 Leased 12,301 Restaurant
032 TX 2220 FM 1960 West
Houston, TX 77090 Leased 10,839 Restaurant
033 TX 6787 Hwy. 6 North
Houston, TX 77084 Leased 11,300 Restaurant
035 TX 2402 S. Stemmons
Lewisville, TX 75067 Leased 8,500 Restaurant
046 TX 13125 Montfort
Dallas, TX 75240 Leased 15,900 Restaurant
081 TX 3903 W. Airport Frwy.
Irving, TX 75062 Leased 12,312 Restaurant
090 TX 750 Scott St.
White Settlement, TX 76108 Leased 10,290 Restaurant
098 TX 6874 Ingram Dr.
San Antonio, TX 78238 Owned 10,200 Restaurant
105 TX 124 E. FM 1960 Bypass
Humble, TX 77338 Leased 18,700 Restaurant
309 TX 2935 SW Parkway
Wichita Falls, TX 76308 Leased 10,200 Restaurant
416 TX 2216 S. Fielder Rd.
Arlington, TX 76013 Leased 15,100 Restaurant
417 TX 238 SW Military Dr.
San Antonio, TX 78221 Leased 18,000 Restaurant
454 TX 5118 S. Staples
Corpus Christi, TX 78411 Leased 10,948 Restaurant
466 TX 8220 Windsor Cross
Windcrest, TX 78239 Leased 12,700 Restaurant
571 TX 11920 Southwest Frwy.
Stafford, TX 77477 Leased 9,024 Restaurant
575 TX 5535 Weslayan
Houston, TX 77005 Leased 10,000 Restaurant
579 TX 7935 Grapevine Hwy.
N. Richland Hills, Tx 76180 Leased 10,200 Restaurant
592 TX 1541 West Bay Area Blvd.
Webster, TX 77598 Leased 10,000 Restaurant
594 TX 1235 E. Beltline
Richardson, TX 75081 Leased 10,200 Restaurant
676 TX 4441 W. Airport Frwy.
Irving, TX 75062 Leased 76,556 Corporate
691 TX 154 Fairmont Parkway
Pasadena, TX 77504 Leased 10,200 Restaurant
731 TX 14637 Memorial Dr.
Houston, TX 77079 Leased 10,200 Restaurant
734 TX 6760 Antoine
Houston, TX 77091 Leased 11,200 Restaurant
850 TX 710 Sunland Park
El Paso, Tx 79912 Leased 7,500 Restaurant
89
<PAGE>
No. St Street Address Leased/Owned S. F. Type
859 TX 3200 Justiss Dr.
Arlington, TX 76011 Leased 10,200 Restaurant
933 TX 5612 West Loop 289
Lubbock, TX 79401 Leased 11,300 Restaurant
935 TX 502 W. Ben White Blvd.
Austin, TX 78704 Leased 11,650 Restaurant
936 TX 8038 Burnett Rd.
Austin, TX 78758 Leased 11,650 Restaurant
937 TX 2500 S. Coulter St.
Suite 124
Amarillo, TX 79109 Leased 8,500 Restaurant
942 TX 1340 W. Centerville
Garland, TX 75041 Leased 10,200 Restaurant
949 TX 7110 S. Westmoreland
Dallas, TX 75237 Owned 10,200 Restaurant
950 TX 1604 Preston Road
Plano, TX 75093 Leased 11,300 Restaurant
052 VA 10430 Midlothian Trnpk
Richmond, VA 23235 Leased 10,000 Restaurant
056 VA 9030 Broad Street
Richmond, VA 23294 Leased 10,125 Restaurant
071 VA 14085 Shoppers Best Way
Dale City, VA 22193 Leased 8,500 Restaurant
072 VA 6303 Richmond Hwy.
Alexandria, VA 22306 Leased 12,000 Restaurant
084 VA 9404 Main St
Fairfax, VA 22031 Leased 12,250 Restaurant
099 VA 2465 Centreville, Ste. J9
Herndon, VA 22071 Leased 9,658 Restaurant
118 VA 7730 Streamwalk Lane
Manassas, VA 22110 Leased 12,000 Restaurant
545 VA 1280 Central Park Blvd.
Fredricksburg, VA 22401 Leased 10,600 Restaurant
972 VA 4059 Electric Rd.
Roanoke, VA 24015 Leased 10,200 Restaurant
319 WI 1273 Lombardi Access
Greenbay, WI 54304 Leased 10,200 Restaurant
603 WI 4671 Michael's Drive
Grand Chute, WI 54915 Leased 9,600 Restaurant
604 WI 438 Grand Canyon Dr.
Madison, WI 53719 Leased 10,200 Restaurant
724 WI 4444 Highway 16
LaCrosse, WI 54601 Leased 11,140 Restaurant
844 ON 4141 Dixie Road
Mississauga, ONT L4W1V5 Leased 12,000 Restaurant
845 ON 2450 Shepperd Ave. East
Ste. 202
Willowdale, ONT M2J1X1 Leased 15,639 Restaurant
90
<PAGE>
Schedule 8.9
to
CEC Entertainment, Inc.
Credit Agreement
Debt
None.
91
<PAGE>
Schedule 8.10
to
CEC Entertainment, Inc.
Credit Agreement
Taxes
None.
92
<PAGE>
Schedule 8.12
to
CEC Entertainment, Inc.
Credit Agreement
ERISA Matters
None.
93
<PAGE>
Schedule 8.14
to
CEC Entertainment, Inc.
Credit Agreement
Subsidiaries; Capitalization
<TABLE>
<CAPTION>
State Borr. Shrs Shrs Shares
Subsidiary Inc. Owns Auth. Issued Outst.
<S> <C> <C> <C> <C> <C>
BHC Acquisition Corporation TX 100% 1M 2,000 Com 2,000 Com
ShowBiz of Laurel, Inc. MD 73% 100 100 Com 100 Com
Chuck E. Cheese of Waldorf, Inc. MD 100% 5,000 500 Com 500 Com
Chuck E. Cheese of Gaithersburg, Inc. MD 80% 100 100 Com 100 Com
Chuck E. Cheese of Glen Burnie, Inc. MD 97% 5,000 500 Com 500 Com
Chuck E. Cheese of Diamond Point, Inc. MD 97% 5,000 490 Com 490 Com
Chuck E. Cheese of Westview, Inc. MD 98% 5,000 500 Com 500 Com
Hospitality Distribution Incorporated TX 0%* 1,000 1,000 Com 1,000 Com
Chuck E. Cheese of Silver Springs, Inc. MD 0%** 100 100 Com 100 Com
SB Hospitality Corporation TX 49% 1M 10,000 Com 10,000 Com
ShowBiz of Arkansas, Inc. AR 50% 2,000 300 Com 300 Com
ShowBiz Merchandising, Inc. NV 100% 1,000 1,000 Com 1,000 Com
Smintheus Incorporated TX 100% 1M 1,000 Com 1,000 Com
</TABLE>
* 100% owned by BHC Acquisition Corporation.
** 80% owned by Hospitality Distribution, Inc.
94
<PAGE>
Schedule 8.15
to
CEC Entertainment, Inc.
Credit Agreement
Agreements
None.
95
<PAGE>
Schedule 8.19
to
CEC Entertainment, Inc.
Credit Agreement Environmental Matters
Borrower is currently negotiating with DDRC Gateway LLC ("DDRC") for the lease
of its property at Gateway Shopping Center, Everett, Massachusetts. This
property is what is commonly referred to as a "Brownfield" and has been the
subject of significant remediation by Monsanto pursuant to the requirements of
the Massachusetts Contingency Plan (the "Plan"). Pursuant to the terms of the
Plan, during the 40 year period following the transfer of title to DDRC,
Monsanto will indemnify, defend and hold harmless DDRC, its successors and
assigns, arising from Monsanto's failure to comply with the remediation plan
proscribed by the Plan. Furthermore, DDRC has the benefit of a covenant not
to sue from the Commonwealth of Massachusetts, which protects DDRC from
lawsuits by the state with respect to environmental conditions existing as of
its purchase of the property.
96
<PAGE>
Schedule 8.20
to
CEC Entertainment, Inc.
Credit Agreement
Broker's Fees
None.
97
<PAGE>
Schedule 8.21
to
CEC Entertainment, Inc.
Credit Agreement
Employee Matters
None.
98
<PAGE>
Schedule 10.2
to
CEC Entertainment, Inc.
Credit Agreement
Permitted Liens
1. Deed of Trust, Security Agreement and Assignment of Rents and Leases
dated January 18, 1996 signed by ShowBiz Pizza Time, Inc. filed at Volume
96043, Page 2030, Deed of Trust Records, Dallas County, Texas. *[Note: This
Agreement will be released by Bank One upon Closing.]
2. Real Estate Mortgage, Security Agreement, Assignment of Leases and Rents
and Fixture Filing dated January 18, 1996 by and between ShowBiz Pizza Time,
Inc., Debtor and Bank One, Texas, National Association filed under Document
No. 960011290, Real Estate Records of Allen County, Indiana. *[Note: This
Agreement will be released by Bank One upon Closing.]
3. Mortgage and Security Agreement dated January 18, 1996 by and between
ShowBiz Pizza Time, Inc. and Bank One, Texas, National Association filed at
Volume _______, Page ____, Real Estate Records of Duval County, Florida.
*[Note: This Agreement will be released by Bank One upon Closing.]
4. Mortgage and Security Agreement dated January 18, 1996 by and between
ShowBiz Pizza Time, Inc. and Bank One, Texas, National Association filed at
Volume _______, Page ____, Real Estate Records of Escambia County, Florida.
*[Note: This Agreement will be released by Bank One upon Closing.]
5. Security Agreement date January 18, 1996 by and between ShowBiz Pizza
Time, Inc. and Bank One, Texas, National Association. *[Note: This Agreement
will be released by Bank One upon Closing.]
6. Uniform Commercial Code - Financing Statement - Form UCC-1 signed by
ShowBiz Pizza Time, Inc. as Debtor and Bank One, Texas, N.A. as Secured Party
filed at Volume 96043, Page 2070, Real Estate Records of Dallas County, Texas.
*[Note: This Financing Statement will be released by Bank One upon Closing.]
7. Uniform Commercial Code - Financing Statement - Form UCC-1 signed by
ShowBiz Pizza Time, Inc. as Debtor and Bank One, Texas, N.A. as Secured Party
filed in the Office of the Secretary of State of Texas on March 4, 1996 as
Document No. 041662. *[Note: This Financing Statement will be released by
Bank One upon Closing.]
8. Uniform Commercial Code - Financing Statement - Form UCC-1 signed by
ShowBiz Pizza Time, Inc. as Debtor and Bank One, Texas, N.A. as Secured Party
filed in the Office of the Secretary of State of Florida on ____________ as
Document No. _______. *[Note: This Financing Statement will be released by
Bank One upon Closing.]
9. Uniform Commercial Code - Financing Statement - Form UCC-1 signed by
ShowBiz Pizza Time, Inc. as Debtor and Bank One, Texas, N.A. as Secured Party
filed at Book 8327, Page 488-490, Real Estate Records of Escambia County,
Florida as Document No. 96080275. *[Note: This Financing Statement will be
released by Bank One upon Closing.]
99
<PAGE>
10. Uniform Commercial Code - Financing Statement - Form UCC-1 signed by
ShowBiz Pizza Time, Inc. as Debtor and Bank One, Texas, N.A. as Secured Party
filed at Book _______, Page ______, Real Estate Records of Duval County,
Florida. *[Note: This Financing Statement will be released by Bank One upon
Closing.]
11. Uniform Commercial Code - Financing Statement - Form UCC-1 signed by
ShowBiz Pizza Time, Inc. as Debtor and Bank One, Texas, N.A. as Secured Party
filed in the Office of the Secretary of State of Indiana as Document No.
_______. *[Note: This Financing Statement will be released by Bank One upon
Closing.]
12. Uniform Commercial Code - Real Estate Financing Statement - Form UCC-2
signed by ShowBiz Pizza Time, Inc. as Debtor and Bank One, Texas, N.A. as
Secured Party filed with the Recorder of Allen County in the State of Indiana
as Document No. 960000778. *[Note:This Financing Statement will be released
by Bank One upon Closing.]
13. Uniform Commercial Code - Financing Statement - Form UCC-1 signed by CEC
Entertainment, Inc. as Debtor and El Camino Resources, Ltd. as Secured
Party filed with the Recorder of Secretary of State of the State of Texas as
Document No. 98-221875. *[Note: This Financing Statement secures an interest
in computer equipment leased from El Camino.]
14. Uniform Commercial Code - Assignment of Financing Statement - Form UCC-3
signed by CEC Entertainment, Inc. as Debtor and El Camino Resources, Ltd. as
Secured Party filed with the Recorder of Secretary of State of the State of
Texas as Document No. 99-627694. *[Note: This Financing Statement secures an
interest in computer equipment leased from El Camino.]
100
<PAGE>
REVOLVING NOTE
$30,000,000 July 14, 2000
FOR VALUE RECEIVED, the undersigned, CEC ENTERTAINMENT, INC., a
corporation duly organized and validly existing under the laws of the State of
Kansas (the "Borrower"), hereby promises to pay to the order of BANK ONE,
TEXAS, NATIONAL ASSOCIATION (the "Lender"), at the Principal Office of the
Agent, in lawful money of the United States of America and in immediately
available funds, the principal amount of THIRTY MILLION DOLLARS ($30,000,000)
or such lesser amount as shall equal the aggregate unpaid principal amount of
the Loan made by the Lender to the Borrower under the Credit Agreement (as
defined below), on the dates and in the principal amounts provided in the
Credit Agreement, and to pay interest on the unpaid principal amount of the
Loan, at such office, in like money and funds, for the period commencing on
the date of the initial advance of the Loan until the Loan shall be paid in
full, at the rates per annum and on the dates provided in the Credit
Agreement.
The Borrower hereby authorizes the Lender to record in its records the
amount outstanding under the Loan and Type of Balances established under this
Revolving Note ("Note") and all borrowings, Continuations, Conversions, and
payments of principal in respect thereof, which records shall, in the absence
of manifest error, constitute prima facie evidence of the accuracy thereof;
provided that the failure to make such notation with respect to any such
borrowing, Continuation, Conversion, Balances, or payments shall not limit or
otherwise affect the obligations of the Borrower under the Credit Agreement or
this Note.
This Note is one of the "Notes" referred to in the certain Credit
Agreement dated as of July 14, 2000, among the Borrower, the Lender, the other
lenders party thereto (collectively with Lender, the "Lenders"), and Bank One,
Texas, National Association, as administrative agent for the Lenders (the
"Agent"; such Credit Agreement, as the same may be amended, restated, or
otherwise modified from time to time, is referred to herein as the "Credit
Agreement"), and evidences advances under the Loan made by the Lender
thereunder. The Credit Agreement, among other things, contains provisions for
acceleration of the maturity of this Note upon the happening of certain stated
events and for prepayments of the Loan prior to the maturity of this Note upon
the terms and conditions specified in the Credit Agreement. Capitalized terms
used in this Note have the respective meanings assigned to them in the Credit
Agreement.
This Note is a Loan Document and is subject to the terms of the Credit
Agreement (including, without limitation, the confidentiality provisions set
forth in Section 14.22 thereof), and the holder of this Note shall be entitled
to, without limitation, the benefits provided in the Credit Agreement, as set
forth therein.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF TEXAS (WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES) AND THE APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
Except for any notice expressly required by the Loan Documents, the
Borrower and each surety, guarantor, endorser, and other party ever liable for
payment of any sums of money payable on this Note jointly and severally waive
notice, presentment, demand for payment, protest, notice of protest and
non-payment or dishonor, notice of acceleration, notice of intent to
accelerate, notice of intent to demand, diligence in collecting, grace, and
101
<PAGE>
all other formalities of any kind, and consent to all extensions without
notice for any period or periods of time and partial payments, before or after
maturity, and any impairment of any collateral securing this Note (if any),
all without prejudice to the holder. The holder shall similarly have the
right to deal in any way, at any time, with one or more of the foregoing
parties without notice to any other party, and to grant any such party any
extensions of time for payment of any of said indebtedness, or to release any
such party or to release or substitute part or all of the collateral securing
this Note, or to grant any other indulgences or forbearances whatsoever,
without notice to any other party and without in any way affecting the
personal liability of any party hereunder.
CEC ENTERTAINMENT, INC.
By:
----------------------------------------
Richard M. Frank
Chief Executive Officer
102
