SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
January 31, 1995
TPI ENTERPRISES, INC.
(Exact name of registrant as specified in its Charter)
NEW JERSEY 0-7961 22-1899681
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
777 South Flagler Drive
Phillips Point, East Tower, Suite 909
West Palm Beach, Florida 33401
(Address of principal executive officers) (Zip Code)
(407) 835-8888
(Registrant's telephone number, including area code)
ITEM 5. OTHER EVENTS.
Amendment to Credit Agreement. On January 31,
1995 TPI Enterprises, Inc. (the "Company") and its wholly
owned subsidiary TPI Restaurants, Inc. ("Restaurants")
entered into the following agreements: (i) the Second
Amended and Restated Credit Agreement (the "Credit
Agreement") by and among Restaurants, the banks party
thereto (the "Banks"), The Bank of New York as
Administrative Agent and NationsBank of North Carolina,
N.A., as Collateral Agent (the "Collateral Agent"), (ii)
Amendment No. 2 (the "Guaranty Amendment") to the Amended
and Restated Guaranty, Security and Subordination
Agreement, dated as of June 3, 1993, as amended by
Amendment No. 1, dated as of February 18, 1994 made by
the Company and Restaurants to the Collateral Agent and
(iii) the Amended and Restated Security Agreement (the
"Security Agreement"), made by Restaurants to the
Collateral Agent. Pursuant to these agreements, the
parties thereto agreed to reduce the revolving credit
loan commitment to Restaurants to $40 million from $50
million and revised certain financial covenants,
arrangements regarding collateral and certain other
provisions in the Credit Agreement, the Guaranty
Amendment and the Security Agreement, each of which are
attached hereto as Exhibit 10.1, Exhibit 10.2 and Exhibit
10.3, respectively. The foregoing description is
qualified in its entirety by reference to the Credit
Agreement, the Guaranty Amendment and the Security
Agreement.
Retirement of Chairman. Effective January 31,
1995, Stephen R. Cohen retired from his position as
Chairman of the Board of the Company. Mr. Cohen
continues to be a director and officer of Maxcell Telecom
Plus, Inc., a wholly owned subsidiary of the Company.
The Termination Agreement, Receipt and Release, dated as
of January 26, 1995 between the Company and Mr. Cohen is
attached as Exhibit 10.4 hereto.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(C) Exhibits
Exhibit No.
10.1 The Second Amended and Restated Credit
Agreement, dated as of January 31, 1995, by and
among the banks party thereto, The Bank of New
York, as Administrative Agent, and NationsBank
of North Carolina, N.A., as Collateral Agent.
10.2 Amendment No. 2, dated as of January 31, 1995
to the Amended and Restated Guaranty, Security
and Subordination Agreement, dated as of
June 3, 1993, as amended by Amendment No. 1,
dated as of February 18, 1994 made by the
Company and Restaurants to the Collateral
Agent.
10.3 The Amended and Restated Security Agreement,
dated as of January 31, 1995, made by
Restaurants to the Collateral Agent.
10.4 Termination Agreement, Receipt and Release,
dated January 26, 1995 among the Company,
Stephen R. Cohen and, with respect to certain
provisions therein, Maxcell Telecom Plus, Inc.
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
TPI Enterprises, Inc.
By: /s/ Frederick W. Burford
Frederick W. Burford
Executive Vice President and
Chief Financial Officer
Date: February 7, 1995
EXHIBIT INDEX
Exhibit Sequential
No. Description Page No.
10.1 Second Amended and Restated
Credit Agreement, dated as of
January 31, 1995, by and
among Restaurants, the banks
party thereto, The Bank of
New York, as Administrative
Agent, and NationsBank of
North Carolina, N.A., as
Collateral Agent.
10.2 Amendment No. 2, dated as of
January 31, 1995 to the
Amended and Restated
Guaranty, Security and
Subordination Agreement,
dated as of June 3, 1993, as
amended by Amendment No. 1,
dated as of February 18,
1994, made by the Company and
Restaurants to the Collateral
Agent.
10.3 The Amended and Restated
Security Agreement, dated as
of January 31, 1995 made by
Restaurants to the Collateral
Agent.
10.4 Termination Agreement,
Receipt and Release dated
January 26, 1995, among the
Company, Stephen R. Cohen
and, with respect to certain
provisions therein, Maxcell
Telecom Plus, Inc.
Exhibit 10.1
==================================================================
==================================================================
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
by and among
TPI RESTAURANTS, INC.
THE BANKS PARTY HERETO,
THE BANK OF NEW YORK, AS ADMINISTRATIVE AGENT
AND
NATIONSBANK OF NORTH CAROLINA, N.A., AS COLLATERAL AGENT
________________
$40,000,000
________________
Dated as of January 31, 1995
==================================================================
==================================================================
TABLE OF CONTENTS
1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.1. Defined Terms . . . . . . . . . . . . . . . . . . . 3
1.2. Other Definitional Provisions . . . . . . . . . . 24
2. AMOUNT AND TERMS OF REVOLVING CREDIT LOANS AND LETTERS OF
CREDIT . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.1. Revolving Credit Loans . . . . . . . . . . . . . . 24
2.2. Revolving Credit Notes . . . . . . . . . . . . . . 25
2.3. Procedure for Borrowing . . . . . . . . . . . . . 25
2.4. Reduction of Revolving Credit Commitments . . . . 27
2.5. Prepayments of the Revolving Credit Loans . . . . 27
2.6. Conversions . . . . . . . . . . . . . . . . . . . 29
2.7. Interest Rate and Payment Dates . . . . . . . . . 30
2.8. Letter of Credit Sub-Facility . . . . . . . . . . 31
2.9. Letter of Credit Participation and Funding
Commitments . . . . . . . . . . . . . . . . . . . 33
2.10. Absolute Obligation with respect to Letter of
Credit Payments . . . . . . . . . . . . . . . . . 35
2.11. Increased Costs Based on Letters of Credit . . . . 35
2.12. Substituted Interest Rate . . . . . . . . . . . . 36
2.13. Taxes; Net Payments . . . . . . . . . . . . . . . 37
2.14. Illegality . . . . . . . . . . . . . . . . . . . . 38
2.15. Increased Costs . . . . . . . . . . . . . . . . . 38
2.16. Indemnification for Loss . . . . . . . . . . . . . 40
2.17. Option to Fund . . . . . . . . . . . . . . . . . . 41
2.18. Use of Proceeds . . . . . . . . . . . . . . . . . 41
2.19. Capital Adequacy . . . . . . . . . . . . . . . . . 41
2.20. Extension of Revolving Credit Termination Date . . 42
2.21. Transaction Record . . . . . . . . . . . . . . . . 43
3. FEES; PAYMENTS . . . . . . . . . . . . . . . . . . . . . . 43
3.1. Revolving Credit Commitment Fee . . . . . . . . . 43
3.2. Letter of Credit Commissions . . . . . . . . . . . 43
3.3. Amendment Fee . . . . . . . . . . . . . . . . . . 44
3.4. Other Fees . . . . . . . . . . . . . . . . . . . . 44
3.5. Pro Rata Treatment and Application of Principal
Payments . . . . . . . . . . . . . . . . . . . . . 44
4. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . 45
4.1. Subsidiaries . . . . . . . . . . . . . . . . . . . 45
4.2. Corporate Existence and Power . . . . . . . . . . 46
4.3. Corporate Authority . . . . . . . . . . . . . . . 46
4.4. Governmental Authority Approvals . . . . . . . . . 46
4.5. Binding Agreement . . . . . . . . . . . . . . . . 46
4.6. Litigation . . . . . . . . . . . . . . . . . . . . 47
4.7. No Conflicting Agreements . . . . . . . . . . . . . 47
4.8. Taxes . . . . . . . . . . . . . . . . . . . . . . . 48
4.9. Compliance with Applicable Laws . . . . . . . . . 48
4.10. Governmental Regulations . . . . . . . . . . . . . 48
4.11. Property . . . . . . . . . . . . . . . . . . . . . 49
4.12. Federal Reserve Regulations; Use of Loan Proceeds . 49
4.13. Franchise Agreements . . . . . . . . . . . . . . . 49
4.14. No Misrepresentation . . . . . . . . . . . . . . . 50
4.15. Plans; Multiemployer Plans . . . . . . . . . . . . 50
4.16. Burdensome Obligations . . . . . . . . . . . . . . 50
4.17. Financial Statements . . . . . . . . . . . . . . . 51
4.18. Concerning the Leases . . . . . . . . . . . . . . 51
4.19. Environmental Matters . . . . . . . . . . . . . . . 52
4.20. Security Interests . . . . . . . . . . . . . . . . 52
4.21. Status as Senior Indebtedness . . . . . . . . . . 53
5. CONDITIONS TO EFFECTIVENESS AND TO REVOLVING CREDIT LOANS
MADE OR LETTERS OF CREDIT ISSUED ON THE RESTATEMENT
EFFECTIVE DATE . . . . . . . . . . . . . . . . . . . . . . 53
5.1. Evidence of Corporate Action . . . . . . . . . . . 54
5.2. Amendment No. 2 to the Enterprises Guaranty . 54
5.3. Security Amendment . . . . . . . . . . . . . . . . 55
5.4. Approvals . . . . . . . . . . . . . . . . . . . . 55
5.5. Litigation . . . . . . . . . . . . . . . . . . . . 55
5.6. Compliance . . . . . . . . . . . . . . . . . . . . 55
5.7. Opinions of Counsel to the Company and Enterprises 56
5.8. Opinion of Special Counsel to the Agents . . . . . 56
5.9. Amendment Fee . . . . . . . . . . . . . . . . . . 56
5.10. Fees and Expenses of Special Counsel . . . . . . . 56
5.11. Other Documents . . . . . . . . . . . . . . . . . 56
6. CONDITIONS OF LENDING - ALL LOANS AND LETTERS OF CREDIT . . 56
6.1. Compliance . . . . . . . . . . . . . . . . . . . . 56
6.2. Loan Closings . . . . . . . . . . . . . . . . . . 57
6.3. Borrowing Request . . . . . . . . . . . . . . . . 57
6.4. Letter of Credit Request . . . . . . . . . . . . . 57
6.5. Required Acts and Conditions . . . . . . . . . . . 57
6.6. Other Documents . . . . . . . . . . . . . . . . . 57
7. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . 58
7.1. Financial Statements . . . . . . . . . . . . . . . 58
7.2. Certificates; Other Information . . . . . . . . . 59
7.3. Legal Existence . . . . . . . . . . . . . . . . . 62
7.4. Taxes . . . . . . . . . . . . . . . . . . . . . . 62
7.5. Insurance . . . . . . . . . . . . . . . . . . . . 62
7.6. Performance of Obligations . . . . . . . . . . . . 63
7.7. Condition of Property . . . . . . . . . . . . . . 63
7.8. Observance of Legal Requirements . . . . . . . . . 64
7.9. Inspection of Property; Books and Records;
Discussions . . . . . . . . . . . . . . . . . . . 64
7.10. Licenses, Franchise Agreements, Etc. . . . . . . 64
7.11. Interest Coverage Ration . . . . . . . . . . . . . 65
7.12. Senior Debt Service Coverage Ratio . . . . . . . . 65
7.13. Intentionally Omitted . . . . . . . . . . . . . . 65
7.14. Minimum Consolidated Tangible Net Worth . . . . . . 65
7.15. Intentionally Omitted . . . . . . . . . . . . . . 66
7.16. Additional Security . . . . . . . . . . . . . . . 66
7.17 Compliance with Leases . . . . . . . . . . . . . . 68
7.18. Franchisor Waiver . . . . . . . . . . . . . . . . 68
8. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . 68
8.1 Borrowing . . . . . . . . . . . . . . . . . . . . 69
8.2. Liens . . . . . . . . . . . . . . . . . . . . . . 70
8.3. Merger and Acquisition or Sale of Property . . . . 71
8.4. Contingent Obligations . . . . . . . . . . . . . . 71
8.5. Dividends and Purchase of Stock . . . . . . . . . 72
8.6. Investments, Loans, Etc. . . . . . . . . . . . . . 72
8.7. Business Changes . . . . . . . . . . . . . . . . . 74
8.8. Sale of Property; Mortgage Financings . . . . . . 74
8.9. Subsidiaries . . . . . . . . . . . . . . . . . . . 76
8.10. Compliance with ERISA . . . . . . . . . . . . . . 76
8.11. Capital Expenditures . . . . . . . . . . . . . . . 77
8.12. Leverage Ratio . . . . . . . . . . . . . . . . . . 77
8.13. Certificate of Incorporation and By-laws . . . . . 77
8.14. Prepayments of Indebtedness . . . . . . . . . . . 77
8.15. Subordinated Debt . . . . . . . . . . . . . . . . 78
8.16. Issuance of Additional Capital Stock . . . . . . . 78
8.17. Sale and Leaseback . . . . . . . . . . . . . . . . 78
8.18. Payment of Management Fees and Other Amounts . . . 79
8.19. Transactions with Affiliates . . . . . . . . . . . 79
8.20. Amendments, Etc. of Certain Agreements . . . . . . 79
8.21. Designated Senior Indebtedness . . . . . . . . . . 79
9. DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . 80
9.1. Events of Default . . . . . . . . . . . . . . . . 80
9.2. Purchase of Notes by the Franchisor . . . . . . . 83
10. THE AGENTS; THE ISSUING BANK . . . . . . . . . . . . . . 84
10.1. Appointment . . . . . . . . . . . . . . . . . . . 84
10.2. Delegation of Duties . . . . . . . . . . . . . . . 85
10.3. Exculpatory Provisions . . . . . . . . . . . . . . 85
10.4. Reliance by Agents . . . . . . . . . . . . . . . . 86
10.5. Notice of Default . . . . . . . . . . . . . . . . 87
10.6. Non-Reliance on Agents, Issuing Banks and Other
Banks . . . . . . . . . . . . . . . . . . . . . . 87
10.7. Indemnification . . . . . . . . . . . . . . . . . 88
10.8. Agents in Their Individual Capacities . . . . . . 89
10.9. Successor Agents; Issuing Bank . . . . . . . . . . 89
10.10.Release of Collateral . . . . . . . . . . . . . . . 92
11. OTHER PROVISIONS . . . . . . . . . . . . . . . . . . . . 92
11.1. Amendments and Waivers . . . . . . . . . . . . . . 92
11.2. Notices . . . . . . . . . . . . . . . . . . . . . 93
11.3. No Waiver; Cumulative Remedies . . . . . . . . . . 95
11.4. Survival of Representations and Warranties . . . . 96
11.5. Payment of Expenses and Taxes . . . . . . . . . . 96
11.6. Lending Offices . . . . . . . . . . . . . . . . . 97
11.7. Successors and Assigns . . . . . . . . . . . . . . 97
11.8. Counterparts . . . . . . . . . . . . . . . . . . . 99
11.9. Adjustments; Set-off . . . . . . . . . . . . . . . 100
11.10.Indemnity . . . . . . . . . . . . . . . . . . . . . 101
11.11.Governing Law . . . . . . . . . . . . . . . . . . . 102
11.12.Headings, Plurals . . . . . . . . . . . . . . . . . 102
11.13.Severability . . . . . . . . . . . . . . . . . . . 102
11.14.Integration . . . . . . . . . . . . . . . . . . . . 102
11.15.Consent to Jurisdiction . . . . . . . . . . . . . . 102
11.16.Service of Process . . . . . . . . . . . . . . . . 103
11.17.No Limitation on Service or Suit . . . . . . . . . 103
11.18.WAIVER OF TRIAL BY JURY . . . . . . . . . . . . . . 103
11.19.Status as Senior Indebtedness . . . . . . . . . . . 103
11.20.Concerning Schedule 8.2 . . . . . . . . . . . . . . 104
EXHIBITS
Exhibit A Commitments
Exhibit B Form of Revolving Credit Note
Exhibit C Form of Borrowing Request
Exhibit D Form of Amendment No. 2 to the Enterprises Guaranty
Exhibit E Form of Letter of Credit Request
Exhibit F Form of Compliance Certificate
Exhibit G-1 Form of Opinion of Skadden, Arps, Slate, Meagher & Flom
Exhibit G-2 Form of Opinion of Shanley & Fisher, P.C.
Exhibit G-3 Form of Opinion of Glankler Brown
Exhibit H Form of Opinion of Special Counsel
Exhibit I Form of Assignment and Acceptance Agreement
Exhibit J Form of Open-End Mortgage
Exhibit K Form of Environmental Questionnaire
Exhibit L Form of Amended and Restated Security Agreement
SCHEDULES
Schedule 1.1 List of Lending Offices
Schedule 4.1 List of Subsidiaries
Schedule 4.2 Exceptions to Paragraph 4.2 (Good Standing)
Schedule 4.11 List of Real Property and Leases
Schedule 4.13 List of Franchise Agreements
Schedule 4.15 List of Plans
Schedule 7.16 List of Properties to be Mortgaged
Schedule 8.1 List of Existing Indebtedness and Existing Enter-
prises Intercompany Loans
Schedule 8.2 List of Existing Liens
Schedule 8.4 List of Existing Contingent Obligations
Schedule 8.6 List of Existing Investments
SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of
January 31, 1995, by and among TPI RESTAURANTS, INC., a Tennessee
corporation (the "Company"), the banks party hereto (each a "Bank"
and, collectively, the "Banks"), THE BANK OF NEW YORK, as adminis-
trative agent for the Banks hereunder (in such capacity, the
"Administrative Agent") and NATIONSBANK OF NORTH CAROLINA, N.A., as
Collateral Agent for the Banks hereunder (in such capacity, the
"Collateral Agent").
RECITALS
A. The Company, the Banks and the Agents entered into a
Credit Agreement dated as of July 29, 1992 (as amended by Amendment
No. 1, dated as of December 10, 1992, and Amendment No. 2, dated as
of March 19, 1993, the "Original Credit Agreement").
B. The Original Credit Agreement was amended and restated in
its entirety by the First Amended and Restated Credit Agreement,
dated as of June 13, 1993 (as amended by Amendment No. 1, dated as
of February 18, 1994, Amendment No. 2 and Waiver No. 4, dated as of
March 18, 1994, and Amendment No. 3 and Waiver No. 5, dated as of
December 23, 1994, the "First Restated Agreement").
C. Pursuant to the First Restated Agreement, the Banks
agreed to make Revolving Credit Loans to the Company in an aggre-
gate principal amount of $50,000,000.
D. In connection with the execution and delivery of this
Agreement, the Company, the Banks and the Agents desire to amend
the First Restated Agreement to, among other things, reduce the
Aggregate Revolving Credit Commitments from $50,000,000 to
$40,000,000 and revise certain covenants contained in the First
Restated Agreement, by amending and restating the First Restated
Agreement in its entirety as hereinafter set forth.
E. For convenience, this Agreement is dated as of January
31, 1995 (the "Second Restatement Effective Date"), and references
to certain matters related to the period prior hereto have been
deleted.
In consideration of the foregoing and for other good and
valuable consideration the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. DEFINITIONS
1.1. Defined Terms.
As used in this Agreement, terms defined in the preamble
have the meanings therein indicated, and the following terms have
the following meanings:
"Accountants": Deloitte & Touche (or any successor
thereto), any other "Big Six" firm of certified public accountants
or such other firm of certified public accountants of recognized
national standing selected by the Company and satisfactory to the
Required Banks.
"Additional Enterprises Intercompany Loans": Enterprises
Intercompany Loans other than Existing Enterprises Intercompany
Loans.
"Adjusted Capital Contribution": those portions of the
equity contributions made by Enterprises to the Company in connec-
tion with the issuance of the Enterprises Subordinated Debentures
and the Senior Subordinated Debentures representing the proceeds
thereof (less, in the case of the Enterprises Subordinated Deben-
tures, the underwriting discount paid by Enterprises prior to the
receipt of the proceeds thereof), to the extent that such portions
are, for accounting purposes, treated as debt.
"Adjusted Operating Cash Flow": for any period, the sum
of (i) Operating Cash Flow for such period and (ii) Consolidated
Working Capital Changes during such period.
"Adjusted Total Senior Debt": at any date of determina-
tion, the sum of (i) the difference between (x) Total Senior Debt
minus (y) the amount of the Aggregate Revolving Credit Commitments
plus (ii) the aggregate principal amount of Revolving Credit Loans
outstanding on such date.
"Affected Loan": as defined in paragraph 2.12.
"Affected Principal Amount": in the event that (i) the
Company shall fail for any reason to borrow or convert after it
shall have notified the Administrative Agent of its intent to do so
in any instance which it shall have requested a Eurodollar Loan
pursuant to paragraph 2.3 or 2.6, an amount equal to the principal
amount of such Eurodollar Loan; (ii) a Eurodollar Loan shall
terminate for any reason prior to the last day of the Interest
Period applicable thereto, an amount equal to the principal amount
of such Eurodollar Loan; and (iii) the Company shall prepay or
repay all or any part of the principal amount of a Eurodollar Loan
prior to the last day of the Interest Period applicable thereto, an
amount equal to the principal amount of such Eurodollar Loan so
prepaid or repaid.
"Affiliate": as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is
under common control with, such Person. For purposes of this
definition, control of a Person shall mean the power, direct or
indirect, (i) to vote 5% or more of the securities having ordinary
voting power for the election of directors of such Person or (ii)
to direct or cause the direction of the management and policies of
such Person whether by contract or otherwise.
"Agents": collectively, the Administrative Agent and the
Collateral Agent.
"Aggregate Revolving Credit Commitments": the sum of the
Revolving Credit Commitments of all of the Banks as set forth in
Exhibit A, as the same may be reduced pursuant to paragraph 2.4.
"Agreement": this Second Amended and Restated Credit
Agreement, as the same may be amended, supplemented or otherwise
modified from time to time.
"Alternate Base Rate": on any date, a rate of interest
per annum equal to the higher of (i) the Federal Funds Rate in
effect on such date plus 1/2 of 1% or (ii) the BNY Rate in effect
on such date.
"Alternate Base Rate Loans": the Revolving Credit Loans
(or any portions thereof) at such time as they (or such portions)
are made or are being maintained at a rate of interest based upon
the Alternate Base Rate.
"Amendment Fee": as defined in paragraph 3.3.
"Applicable Margin": (i) with respect to the unpaid
principal amount of Alternate Base Rate Loans, the applicable
percentage set forth below next to the words "Alternate Base Rate"
and (ii) with respect to the unpaid principal amount of Eurodollar
Loans, the applicable percentage set forth below next to the words
"Eurodollar Rate":
Applicable
Period Rate Margin
when the Leverage Ratio
shall be greater than Alternate Base Rate 1.50%
or equal to 0.70:1.00 Eurodollar Rate 2.50%
when the Leverage Ratio
shall be less than 0.70:1.00
but greater than or equal to
0.50:1.00 Alternate Base Rate 1.00%
Eurodollar Rate 2.00%
when the Leverage Ratio
shall be less than 0.50:1.00
but greater than or equal to
0.40:1.00 Alternate Base Rate 0.50%
Eurodollar Rate 1.50%
when the Leverage Ratio
shall be less than 0.40:1.00
Alternate Base Rate 0.25%
Eurodollar Rate 1.25%
Changes in the Applicable Margin resulting from a change in
the Leverage Ratio, as set forth in a Compliance Certificate
delivered pursuant to paragraph 7.1(c) evidencing such a change,
shall become effective upon the 5th day following the delivery by
the Company to the Administrative Agent of a new Compliance Certif-
icate pursuant to paragraph 7.1(c) evidencing a change in the
Leverage Ratio. If the Company shall fail to deliver a Compliance
Certificate within 45 days after the end of each of the first three
fiscal quarters (or 90 days after the end of the last fiscal
quarter) as required by paragraph 7.1(c), the Applicable Margin
from and including the 46th day (the 91st day in the case of the
last quarter) after the end of such fiscal quarter to the fifth day
following the delivery by the Company to the Administrative Agent
of a Compliance Certificate shall be 1.50% with respect to Alter-
nate Base Rate Loans and 2.50% with respect to Eurodollar Loans.
"Asset Sale": any sale, transfer or other disposition by
the Company or any of its Subsidiaries to any Person other than the
Company or any of its Subsidiaries of any Property (including,
without limitation, any stores, franchises or any capital Stock or
other securities of another Person) of the Company or any of its
Subsidiaries and any sale and leaseback transaction to the extent
permitted by paragraph 8.17.
"Assignment and Acceptance Agreement": an assignment and
acceptance agreement executed by an assignor and an assignee
pursuant to which such assignor assigns all or any portion of such
assignor's Revolving Credit Note and Revolving Credit Commitment to
such assignee, substantially in the form of Exhibit I.
"Assignment Fee": as defined in paragraph 11.7(b).
"Authorized Signatory": the chairman of the board, the
president, any vice president, the chief financial officer, the
treasurer or any other officer of the Company or Enterprises
(acceptable to the Agents) duly authorized by the board of direc-
tors of the Company or Enterprises, as the case may be.
"Available Revolving Credit Commitment": at any date of
determination, the Aggregate Revolving Credit Commitments minus the
sum of (i) the outstanding principal balance of the Revolving
Credit Loans plus (ii) the Letter of Credit Exposure.
"BNY": The Bank of New York.
"BNY Rate": a rate of interest per annum equal to the
rate of interest publicly announced in New York City by BNY from
time to time as its prime commercial lending rate, such rate to be
adjusted automatically (without notice) on the effective date of
any change in such publicly announced rate.
"Benefited Bank": as defined in paragraph 11.9.
"Borrowing Date": any date specified in a Borrowing
Request delivered pursuant to paragraph 2.3 as a date on which the
Company requests the Banks to make Revolving Credit Loans or the
Issuing Bank to issue a Letter of Credit.
"Borrowing Request": a request in the form of Exhibit C.
"Building Lease": a lease by the Company or any Material
Subsidiary of land and buildings.
"Business Day": for all purposes other than as set forth
in clause (ii) below, (i) any day other than a Saturday, a Sunday
or a day on which commercial banks located in New York City or
Charlotte, North Carolina are authorized or required by law or
other governmental action to close and (ii) with respect to all
notices and determinations in connection with, and payments of
principal and interest on, Eurodollar Loans, any day which is a
Business Day described in clause (i) above and which is also a day
on which dealings in foreign currency and exchange and Eurodollar
funding between banks may be carried on in London, England.
"Capitalized Leases": all leases which are required to be
capitalized on a balance sheet in accordance with GAAP.
"Cash Collateral": the cash collateral from time to time
pledged to the Collateral Agent pursuant to the Security Agreement.
"Cash Proceeds": with respect to any Asset Sale or
Mortgage Financing, the aggregate cash payments (including any cash
received by way of deferred payment pursuant to a note receivable
issued in connection with such Asset Sale, but only as and when so
received under such note receivable) received by the Company or any
of its Subsidiaries from such Asset Sale or Mortgage Financing.
"CERCLA": the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, 42 U.S.C. Section 9601
et seq.
"Change in Control": as to Enterprises or the Company,
(a) any Person (other than one or more Permitted Holders), together
with its Affiliates or Associates, is or becomes the Beneficial
Owner, directly or indirectly, through a purchase, merger or other
acquisition transaction, of shares of capital Stock of Enterprises
or the Company, as the case may be, entitling such Person to
exercise 50% or more of the total voting power of all shares of
capital Stock of Enterprises or the Company, as the case may be,
entitled to vote in the election of directors or (b) a majority of
the board of directors of Enterprises or the Company, as the case
may be, are not Continuing Directors; provided, however, that a
Change in Control will not be deemed to have occurred if a Change
in Control is not deemed to have occurred in accordance with both
the Enterprises Subordinated Indenture and the Debenture Purchase
Agreement. For purposes of this definition, (i) "Beneficial Owner"
shall be determined in accordance with Rule 13d-3, promulgated by
the SEC under the Exchange Act as in effect on the date of the
Enterprises Subordinated Indenture, (ii) "Permitted Holder" shall
mean either the individual who is Chairman of the board of direc-
tors of Enterprises or the Company, as the case may be, on the date
of the Enterprises Subordinated Indenture with respect to Enter-
prises or the date of the Debenture Purchase Agreement with respect
to the Company, or any other group of Persons of which such indi-
vidual is a member, provided that such individual has control over
the voting and dispositive power of the shares of common Stock
beneficially owned by such group, (iii) "Continuing Director"
means, at any date, a member of the board of directors of Enter-
prises or the Company, as the case may be, who (A) was a member of
such board for the period of 24 months prior to such date or (B)
was nominated for election or elected to such board with the
affirmative vote of at least two-thirds of the Continuing Directors
and (iv) an "Associate" of, or a Person "associated with", any
Person, means (x) any trust or other estate in which such Person
has a substantial beneficial interest or as to which such Person
serves as trustee or other fiduciary capacity and (y) any relative
or spouse of such Person, or any relative of such spouse, who has
the same home as such Person.
"Code": the Internal Revenue Code of 1986, as the same
may be amended from time to time, or any successor thereto, and the
rules and regulations issued thereunder, as from time to time in
effect.
"Collateral": the Pledged Collateral, the Cash Collateral
and all other collateral under and as defined in the Collateral
Documents.
"Collateral Agent": NationsBank.
"Collateral Documents": the Enterprises Guaranty, the
Environmental Indemnity Agreement, each Mortgage granted on or
before the Second Restatement Effective Date and, upon execution
and delivery of a Mortgage pursuant to paragraph 7.16 after the
Second Restatement Effective Date, each such Mortgage and the
Security Agreement.
"Commitment Percentage": as to any Bank, the percentage
set forth opposite the name of such Bank in Exhibit A under the
heading "Commitment Percentage".
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Company within
the meaning of Sections 414(b) or 414(c) of the Code.
"Compliance Certificate": a certificate in the form of
Exhibit F.
"Consolidated": the Company and its Subsidiaries taken
together.
"Consolidated Capital Expenditures": for any period,
capital expenditures made by the Company and its Subsidiaries
during such period, determined on a Consolidated basis in accor-
dance with GAAP.
"Consolidated Interest Expense": for any period, the sum
of (i) the result obtained by subtracting (x) interest expense of
the Company attributable solely to the Adjusted Capital Contribu-
tion and the capital contribution by Enterprises to the Company of
the proceeds of the Senior Subordinated Debentures from (y) inter-
est expense of the Company and its Subsidiaries on a Consolidated
basis determined in accordance with GAAP (adjusted to give effect
to all interest rate swap, cap or other interest rate hedging
arrangements and fees and expenses in connection therewith, all as
determined in accordance with GAAP) plus (ii) interest expense of
Enterprises during such period in respect of the Enterprises
Subordinated Debentures and the Senior Subordinated Debentures, in
each case to the extent paid or payable in cash during such period.
"Consolidated Net Income": for any period, net income of
the Company and its Subsidiaries on a Consolidated basis determined
in accordance with GAAP for such period.
"Consolidated Net Worth": at any date of determination,
the sum of all amounts which would be included under shareholders'
equity on a Consolidated balance sheet of the Company and its
Subsidiaries determined in accordance with GAAP as at such date.
"Consolidated Tangible Net Worth": at any date of deter-
mination, Consolidated Net Worth less all assets of the Company and
its Subsidiaries, determined on a Consolidated basis at such date
that would be classified as intangible assets in accordance with
GAAP, including, without limitation, unamortized debt discount and
expenses, unamortized organization and reorganization expense,
patents, trade or servicemarks, franchises, trade names and good-
will. The calculation of Consolidated Tangible Net Worth shall be
made without regard to the one time restructuring charge taken for
the fourth fiscal quarter of the 1993 fiscal year in the amount of
$40,704,000.
"Consolidated Working Capital": at any time of determina-
tion, the difference between (i) current assets of the Company and
its Subsidiaries determined on a Consolidated basis in accordance
with GAAP minus cash and cash equivalents and (ii) current liabili-
ties of the Company and its Subsidiaries determined on a Consoli-
dated basis less the current portion of long term debt.
"Consolidated Working Capital Changes": for any period,
the result obtained by subtracting Consolidated Working Capital at
the close of business on the last day of such period from Consoli-
dated Working Capital at the opening of business on the first day
of such period.
"Consolidating": the Company and its Subsidiaries taken
separately.
"Contingent Obligation": as to any Person, any obligation
of such Person guaranteeing or in effect guaranteeing any Indebted-
ness, leases, dividends or other obligations ("primary obliga-
tions") of any other Person (the "primary obligor") in any manner,
whether directly or indirectly, including, without limitation, any
obligation of such Person, whether or not contingent, (i) to
purchase any such primary obligation or any Property constituting
direct or indirect security therefor, (ii) to advance or supply
funds (a) for the purchase or payment of any such primary obliga-
tion or (b) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency
of the primary obligor, (iii) to purchase Property, securities or
services primarily for the purpose of assuring the beneficiary of
any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (iv) otherwise to
assure or hold harmless the beneficiary of such primary obligation
against loss in respect thereof; provided, however, that the term
Contingent Obligation shall not include the indorsement of instru-
ments for deposit or collection in the ordinary course of business.
The term Contingent Obligation shall also include the liability of
a general partner in respect of the liabilities of the partnership
in which it is a general partner. The amount of any Contingent
Obligation of a Person shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect
of which such Contingent Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in
respect thereof as determined by such Person in good faith.
"Conversion Date": the date on which a Eurodollar Loan is
converted to an Alternate Base Rate Loan, or the date on which an
Alternate Base Rate Loan is converted to a Eurodollar Loan, or the
date on which a Eurodollar Loan is converted to a new Eurodollar
Loan, all in accordance with paragraph 2.6.
"Debenture Purchase Agreement": the Debenture Purchase
Agreement, dated as of March 19, 1993, among Enterprises, the
Company and the purchasers of the Senior Subordinated Debentures
named therein, pursuant to which the Senior Subordinated Debentures
are issued, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with paragraph 8.20.
"Debt": as to any Person, at a particular time, all items
which constitute, without duplication, (i) the principal portion of
indebtedness for borrowed money or the deferred purchase price of
Property (other than trade payables incurred in the ordinary course
of business), (ii) the principal portion of indebtedness evidenced
by notes, bonds, debentures or similar instruments, (iii) the
principal portion of obligations with respect to any conditional
sale agreement or title retention agreement, (iv) the principal
portion of indebtedness arising under acceptance facilities and the
amount available to be drawn under all letters of credit issued for
the account of such Person (other than, in the case of the Company,
the Letters of Credit) and, without duplication, all drafts drawn
thereunder to the extent such Person shall not have reimbursed the
issuer in respect of the issuer's payment of such drafts, (v) the
principal portion of all liabilities secured by any Lien on any
Property owned by such Person even though such Person has not
assumed or otherwise become liable for the payment thereof (other
than carriers', warehousemen's, mechanics', repairmen's or other
like non-consensual Liens arising in the ordinary course of busi-
ness), (vi) the principal of all obligations under Capitalized
Leases, (vii) the principal portion of ERISA Liabilities, and
(viii) the principal portion of all Contingent Obligations.
"Default": any of the events specified in paragraph 9,
whether any requirement for the giving of notice, the lapse of
time, or both, or any other condition, has been satisfied.
"Dollars" and "$": lawful currency of the United States
of America.
"Domestic Lending Office": in respect of any Bank,
initially, the office or offices of such Bank designated as such on
Schedule 1.1; thereafter, such other office or offices of such
Bank, if any, which shall be making or maintaining Alternate Base
Rate Loans, as reported by such Bank to the Administrative Agent.
"EBIT": for any period, Consolidated Net Income for such
period, plus the sum, without duplication, of (i) Taxes paid by the
Company and its Subsidiaries during such period and (ii) Consoli-
dated Interest Expense paid during such period, in each case to the
extent deducted in determining such Consolidated Net Income (or
loss) for such period.
"Enterprises": TPI Enterprises, Inc., a New Jersey
corporation.
"Enterprises Guaranty": the Amended and Restated Guaran-
ty, Security and Subordination Agreement, dated as of June 3, 1993,
as amended by Amendment No. 1, dated as of February 18, 1994, and
Amendment No. 2, dated as of January 31, 1995, made by Enterprises
and the Company to the Collateral Agent, as the same may be amend-
ed, modified or otherwise supplemented from time to time.
"Enterprises Intercompany Loans": loans or other advances
from time to time made by Enterprises to the Company to the extent
permitted by paragraph 8.1(vi).
"Enterprises Subordinated Debentures": the 81/4% Convert-
ible Subordinated Debentures, due 2002, issued by Enterprises
pursuant to the Enterprises Subordinated Indenture, as the same may
be amended, supplemented or otherwise modified from time to time in
accordance with paragraph 8.20.
"Enterprises Subordinated Indenture": the Indenture,
dated as of July 15, 1992, among Enterprises, the Company and
NationsBank of Tennessee, as trustee, pursuant to which the Enter-
prises Subordinated Debentures were issued, as the same may be
amended, supplemented or otherwise modified from time to time in
accordance with paragraph 8.20.
"Environmental Indemnity Agreement": the Environmental
Indemnity Agreement, dated July 29, 1992, made by the Company to
the Collateral Agent, as the same may be amended, supplemented or
otherwise modified from time to time.
"Environmental Questionnaire": an Environmental Question-
naire substantially in the form of Exhibit K.
"ERISA": the Employee Retirement Income Security Act of
1974, as amended from time to time, and the rules and regulations
issued thereunder, as from time to time in effect.
"ERISA Liabilities": at any time of determination and
without duplication, the aggregate of all unfunded vested benefits
under all Plans and all potential withdrawal liabilities that would
be imposed on the Company or any Commonly Controlled Entity under
all Multiemployer Plans if the Company or any Commonly Controlled
Entity withdrew or was deemed to withdraw from any such Plan under
Part 1 of Subtitle E of Title IV of ERISA.
"Eurodollar Lending Office": in respect of any Bank,
initially, the office of such Bank designated as such on Schedule
1.1 (or, if no such office is specified, its Domestic Lending
Office); thereafter, such other office, if any, of such Bank which
shall be making or maintaining Eurodollar Loans, as reported by
such Bank to the Administrative Agent.
"Eurodollar Loans": collectively, the Revolving Credit
Loans (or any portions thereof) at such time as they (or such
portions) are made or are being maintained at a rate of interest
based upon the Eurodollar Rate. Each Eurodollar Loan shall mature
on the last day of the Interest Period applicable thereto.
"Eurodollar Rate": with respect to any Interest Period
applicable to any Eurodollar Loan, the rate of interest per annum,
as determined by the Administrative Agent, obtained by dividing
(and then rounding to the nearest 1/100 of 1% or, if there is no
nearest 1/100 of 1%, then to the next higher 1/100 of 1%):
(a) the rate, as reported by BNY to the Adminis-
trative Agent, quoted by BNY to leading banks in the interbank
eurodollar market as the rate at which BNY is offering Dollar
deposits in an amount equal approximately to the Eurodollar Loan of
BNY to which such Interest Period shall apply for a period equal to
such Interest Period, as quoted at approximately 11:00 a.m. (New
York City time) two Business Days prior to the first day of such
Interest Period, by
(b) a number equal to 1.00 minus the aggregate of
the then stated maximum rates during such Interest Period of all
reserve requirements (including, without limitation, marginal,
emergency, supplemental and special reserves), expressed as a
decimal, established by the Board of Governors of the Federal
Reserve System and any other banking authority to which BNY and
other major United States money center banks are subject, in
respect of eurocurrency funding (currently referred to as
"Eurocurrency liabilities" in Regulation D of the Board of Gover-
nors of the Federal Reserve System). Such reserve requirements
shall include, without limitation, those imposed under such Regula-
tion D. Eurodollar Loans shall be deemed to constitute
Eurocurrency liabilities and as such shall be deemed to be subject
to such reserve requirements without benefit of credits for prora-
tion, exceptions or offsets which may be available from time to
time to any Bank under such Regulation D. The Eurodollar Rate shall
be adjusted automatically on and as of the effective date of any
change in any such reserve requirement.
"Evaluated Value": as to any Property included in the
Evaluation, the value of such Property as determined by the Evalua-
tor and as set forth therein.
"Evaluation": as defined in paragraph 7.16(b).
"Evaluator": such real estate, machinery and equipment
evaluator engaged by the Agents at the direction of the Required
Banks which shall be reasonably acceptable to the Company.
"Event of Default": any of the events specified in
paragraph 9, provided that any requirement for the giving of
notice, the lapse of time, or both, or any other condition has been
satisfied.
"Exchange Act": the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Existing Enterprises Intercompany Loans": Enterprises
Intercompany Loans which are outstanding on the Second Restatement
Effective Date as set forth on Schedule 8.1.
"Extension Request": as defined in paragraph 2.20.
"Federal Funds Rate": for any day, the rate per annum
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 by the
Federal Reserve Bank of New York on the Business Day next succeed-
ing such day, provided that (i) if the day for which such rate is
to be determined is not a Business Day, the Federal Funds Rate for
such day shall be such rate on such transactions on the next
preceding Business Day as so published on the next succeeding
Business Day, and (ii) if such rate is not so published for any
day, the Federal Funds Rate for such day shall be the average of
the quotations for such day on such transactions received by BNY
from three Federal funds brokers of recognized standing selected by
BNY on such day on such transactions as determined by BNY and
reported to the Administrative Agent.
"Fee Letter": the letter, dated June 10, 1992, from the
Agents to the Company, as amended on July 15, 1992.
"Financial Statements": as defined in paragraph 4.17.
"First Restated Agreement": as defined in the Recitals.
"Franchise Agreements": collectively, the franchise
agreements, license agreements, reserved area agreements and market
development agreements to which the Company or any Subsidiary is a
party relating to franchises of Shoney's, Captain D's restaurants,
as the same may be amended, supplemented or otherwise modified from
time to time in accordance with paragraph 8.20.
"Franchisor": Shoney's, Inc., a Tennessee corporation.
"GAAP": generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Princi-
ples Board and the American Institute of Certified Public Accoun-
tants and statements and pronouncements of the Financial Accounting
Standards Board, consistently applied.
"Governmental Authority": any nation or government, any
state or other political subdivision thereof, any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government and any court or arbitra-
tor.
"Ground Lease": a lease by the Company or any Material
Subsidiary of land on which the buildings are owned by the Company
or such Material Subsidiary.
"Hartford Letter of Credit": Letter of Credit No. 38711,
dated July 22, 1992, as amended on August 27, 1992 and August 17,
1993, issued by the Issuing Bank for the benefit of Hartford Fire
Insurance Company in the face amount of $10,000,000, initially for
the account of the Company.
"Hazardous Material": a substance, including, without
limitation, asbestos or any substance containing asbestos and
deemed hazardous under any Hazardous Material Law, the group of
organic compounds known as polychlorinated biphenyls, flammable
explosives, radioactive materials, chemicals known to cause cancer
or reproductive toxicity, pollutants, effluents, contaminants,
emissions or related materials and any items included in the
definition of hazardous or toxic waste, materials or substances
under any Hazardous Material Law.
"Hazardous Material Law": all federal and state laws
relating to environmental conditions and industrial hygiene,
including, without limitation, CERCLA, the Resource Conservation
and Recovery Act of 1976, as amended (42 U.S.C. SECTION6901 et seq.), the
Hazardous Materials Transportation Act, as amended (49 U.S.C. SECTION1801
et seq.), the Federal Water Pollution Control Act, as amended (33
U.S.C. SECTION1251 et seq.), the Clean Air Act, as amended (42 U.S.C.
SECTION741 et seq.), the Clean Water Act, as amended (33 U.S.C. SECTION7401
et seq.), the Toxic Substances Control Act, as amended (15 U.S.C.
SECTIONSECTION2601-2629), the Safe Water Drinking Act, as amended
(42 U.S.C. SECTIONSECTION300f-300j), and all other similar federal, state
and local environmental statutes, ordinances and the regulations, orders
decrees now or hereafter promulgated thereunder.
"Highest Lawful Rate": the maximum rate of interest, if
any, that at any time or from time to time may be contracted for,
taken, charged or received on the Revolving Credit Notes or which
may be owing to any Bank pursuant to this Agreement under the laws
applicable to such Bank and this transaction.
"Indebtedness": as to any Person, at a particular time,
all items which constitute, without duplication, (i) indebtedness
for borrowed money or the deferred purchase price of Property
(other than trade payables incurred in the ordinary course of
business), (ii) indebtedness evidenced by notes, bonds, debentures
or similar instruments, (iii) obligations with respect to any
conditional sale agreement or title retention agreement, (iv)
indebtedness arising under acceptance facilities and the amount
available to be drawn under all letters of credit issued for the
account of such Person and, without duplication, all drafts drawn
thereunder to the extent such Person shall not have reimbursed the
issuer in respect of the issuer's payment of such drafts, (v) all
liabilities secured by any Lien on any Property owned by such
Person even though such Person has not assumed or otherwise become
liable for the payment thereof (other than carriers',
warehousemen's, mechanics', repairmen's or other like
non-consensual Liens arising in the ordinary course of business),
(vi) the principal of all obligations under Capitalized Leases,
(vii) ERISA Liabilities, and (viii) all Contingent Obligations.
"Indemnified Person": as defined in paragraph 11.10.
"Intercompany Loans": loans or other advances from time
to time made by the Company to either TPI Commissary or TPI Trans-
portation to the extent permitted by paragraph 8.6(i).
"Interest Coverage Ratio": at any date of determination,
the ratio of EBIT to Consolidated Interest Expense, in each case
for the immediately preceding four fiscal quarters of the Company.
"Interest Payment Date": (i) as to any Alternate Base
Rate Loan, the last day of each March, June, September and December
commencing on the first of such days to occur after such Alternate
Base Rate Loan is made or any Eurodollar Loan is converted to an
Alternate Base Rate Loan, (ii) as to any Eurodollar Loan in respect
of which the Company has selected an Interest Period of one, two or
three months, the last day of such Interest Period, and (iii) as to
any Eurodollar Loan in respect of which the Company has selected an
Interest Period of six months, the day which is three months after
the first day of such Interest Period and the last day of such
Interest Period.
"Interest Period": with respect to any Eurodollar Loan,
initially, the period commencing on, as the case may be, the
Borrowing Date or Conversion Date with respect to such Eurodollar
Loan and ending one, two, three or six months thereafter, as
selected by the Company in its irrevocable notice of borrowing as
provided in paragraph 2.3 or its irrevocable notice of conversion
as provided in paragraph 2.6, provided, however, that all of the
foregoing provisions relating to Interest Periods are subject to
the following:
(i) if any Interest Period would otherwise end
on a day which is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless the result of
such extension would be to carry such Interest Period into another
calendar month, in which event such Interest Period shall end on
the immediately preceding Business Day;
(ii) if, with respect to any borrowing or the
conversion of any borrowing, the Company shall fail to give due
notice as provided in paragraph 2.3 or 2.6, as the case may be, the
Company shall be deemed to have selected an Alternate Base Rate
Loan for such borrowing or the borrowing shall be automatically
converted to an Alternate Base Rate Loan upon the expiration of the
Interest Period with respect thereto;
(iii) any Interest Period that begins on the
last Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at the
end of such Interest Period) shall end on the last Business Day of
a calendar month;
(iv) no Interest Period shall end after the
stated maturity of the Revolving Credit Notes; and
(v) the Company shall select Interest Periods
so as not to have more than five different Interest Periods out-
standing at any one time.
"Issuing Bank": NationsBank or any successor pursuant to
paragraph 10.9.
"Issuing Bank Local Time": the time in effect in the city
in which the principal office of the Issuing Bank is located.
"Investments": as defined in paragraph 8.6.
"Leases": collectively, the Building Leases and the
Ground Leases.
"Letter of Credit": as defined in paragraph 2.8.
"Letter of Credit Commissions": as defined in paragraph 3.2.
"Letter of Credit Commitment": the commitment of the
Issuing Bank to issue Letters of Credit having an aggregate out-
standing face amount not exceeding $20,000,000, and the commitment
of the other Banks to participate in the Letter of Credit Exposure
as set forth in paragraph 2.9.
"Letter of Credit Exposure": at a particular date, the
sum of (a) the undrawn face amounts of the outstanding Letters of
Credit at such date and (b) the aggregate unpaid reimbursement
obligations in respect of the outstanding Letters of Credit at such
date (after giving effect to any Revolving Credit Loans made on
such date to pay any such reimbursement obligations).
"Letter of Credit Request": a request in the form of
Exhibit E.
"Leverage Ratio": at any date of determination, the ratio
of (a) Total Debt to (b) the sum of (i) Consolidated Net Worth plus
Total Subordinated Debt. For purposes of calculating the Leverage
Ratio, Consolidated Net Worth shall be calculated without regard to
the one time restructuring charge taken for the fourth fiscal
quarter of the 1993 fiscal year in the amount of $40,704,000.
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), or
other security agreement or security interest of any kind or nature
whatsoever, including, without limitation, any conditional sale or
other title retention agreement and any financing lease having
substantially the same economic effect as any of the foregoing.
"Loan Documents": collectively, this Agreement, the
Revolving Credit Notes, the Fee Letter, the Collateral Documents
and the Subsidiary Guaranty.
"Loan" and "Loans": as defined in paragraph 2.1.
"Management Agreement": the Management Services Agree-
ment, dated as of October 5, 1988, between the Company and Enter-
prises, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with paragraph 8.20.
"Margin Stock": any "margin stock", as said term is
defined in Regulation U of the Board of Governors of the Federal
Reserve System, as the same may be amended or supplemented from
time to time.
"Material Adverse Change": as to (i) the Company, a
material adverse change in the financial condition, operations,
business, prospects or Property of (x) the Company or (y) the
Company and its Material Subsidiaries taken as a whole, and (ii)
Enterprises, a material adverse change in the financial condition,
operations, business, prospects or Property of Enterprises.
"Material Adverse Effect on the Company": a material
adverse effect on the financial condition, operations, business,
prospects or Property of (i) the Company or (ii) the Company and
its Material Subsidiaries taken as a whole.
"Material Adverse Effect on Enterprises": material
adverse effect on the financial condition, operations, business,
prospects or Property of Enterprises and its Subsidiaries taken as
a whole.
"Material Subsidiary": collectively, TPI Commissary, TPI
Transportation and each other Subsidiary of the Company or any
Material Subsidiary, in each case, once and for so long as it has
total assets exceeding $5,000,000.
"Mortgage Financings": any Indebtedness incurred by the
Company and/or its Material Subsidiaries (whether in the form of
borrowings, Contingent Obligations, obligations under Capitalized
Leases or otherwise and including Indebtedness assumed in connec-
tion with an acquisition permitted by paragraph 8.11), and secured
by mortgages on real Property, Building Leases or Ground Leases.
"Mortgages": collectively, (i) each of the Mortgage,
Leasehold Mortgage, Open-End Mortgage, Open-End Leasehold Mortgage,
Deed of Trust, Leasehold Deed of Trust, Deed to Secure Debt,
Assignment, Assignment of Rents, Fixture Filing, Security Agreement
and Financing Statement granted by the Company to the Collateral
Agent on or before the Second Restatement Effective Date with
respect to certain Ground Leases and (ii) each Mortgage, Leasehold
Mortgage, Open-End Mortgage, Open-End Leasehold Mortgage, Deed of
Trust, Leasehold Deed of Trust, Deed to Secure Debt, Assignment,
Assignment of Rents, Fixture Filing, Security Agreement and Financ-
ing Statement, substantially in the form of Exhibit J, from time to
time granted to the Collateral Agent after the Second Restatement
Effective Date pursuant to paragraph 7.16 with respect to other
real Property, as each may be amended, supplemented or modified
from time to time.
"Multiemployer Plan": a Plan which is a multiemployer
plan as defined in Section 4001(a)(3) of ERISA.
"NationsBank": NationsBank of North Carolina, N.A.
"Net Cash Proceeds": with respect to any Asset Sale or
Mortgage Financing, the Cash Proceeds resulting therefrom net of
cash expenses (including brokerage fees and reasonable attorneys'
fees) and payment of principal, premium and interest or Indebted-
ness (other than the Revolving Credit Loans) required to be repaid
as a result of such Asset Sale.
"1988 Agreement": the Agreement, dated August 2, 1988,
between the Company and the Franchisor, as the same may be amended,
supplemented or otherwise modified in accordance with paragraph
8.20.
"Notes" and "Revolving Credit Notes": collectively, the
promissory notes of the Company made to each Bank, each dated June
3, 1993, and (ii) the promissory notes from time to time issued by
the Company, substantially in the form of Exhibit B, pursuant to
paragraph 11.7, as each may be indorsed or modified from time to
time, including all replacements thereof and substitutions there-
for; each a "Note" or a "Revolving Credit Note".
"Operating Cash Flow": for any period, Consolidated Net
Income (or loss) for such period, less, without duplication, (i)
all extraordinary gains and losses, (ii) all gains and losses from
acquisitions, sales, exchanges and dispositions of Property not in
the ordinary course of business, provided that there shall also be
excluded any related charges for taxes thereon, (iii) any net gain
arising from the collection of the proceeds of any insurance
policy, (iv) any write-up of any Property, (v) non-recurring items
and (vi) investment income (other than interest income and income
on short-term investments), but plus the sum of, without duplica-
tion, depreciation, amortization and other non-cash charges for
such period, to the extent included in determining such Consolidat-
ed Net Income (or loss) and all determined in accordance with GAAP.
"Original Credit Agreement": as defined in the Recitals.
"Original Effective Date": July 29, 1992.
"PBGC": the Pension Benefit Guaranty Corporation estab-
lished pursuant to Subtitle A of Title IV of ERISA, or any Govern-
mental Authority succeeding to the functions thereof.
"Permitted Liens": Liens permitted to exist pursuant to
paragraph 8.2.
"Person": an individual, a partnership, a corporation, a
business trust, a joint stock company, a trust, an unincorporated
association, a joint venture, a Governmental Authority or any other
entity of whatever nature.
"Plan": any employee benefit plan which is covered by
Title IV of ERISA or which is otherwise subject to the minimum
funding standards of Section 412 of the Code and which is main-
tained by or to which contributions are made by the Company, a
Subsidiary or a Commonly Controlled Entity or in respect of which
the Company, a Subsidiary or a Commonly Controlled Entity has or
may have any liability.
"Pledged Collateral": the collateral (other than the Cash
Collateral) pledged to the Collateral Agent pursuant to the Enter-
prises Guaranty and the Security Agreement.
"Property": all types of real, personal, tangible,
intangible or mixed property, including, without limitation, Stock.
"Registration Statement": the Registration Statement on
Form S-2 filed by Enterprises and the Company with the SEC on May
20, 1992, as amended by Amendment No. 1 filed by Enterprises and
the Company with the SEC on June 26, 1992, Amendment No. 2 filed by
Enterprises and the Company with the SEC on July 16, 1992 and
Amendment No. 3 filed by Enterprises and the Company with the SEC
on July 22, 1992, with respect to the issuance and sale of the
Enterprises Subordinated Debentures and the subordinated guaranty
of the Company thereof, as such statement may hereafter be amended,
modified or otherwise supplemented from time to time.
"Reimbursement Amount": as defined in paragraph 2.13(c).
"Remaining Interest Period": (i) in the event that the
Company shall fail for any reason to borrow or convert a Eurodollar
Loan after it shall have notified the Administrative Agent of its
intent to do so pursuant to paragraph 2.3 or 2.6, a period equal to
the Interest Period that the Company elected in respect of such
Eurodollar Loan; or (ii) in the event that a Eurodollar Loan shall
terminate for any reason prior to the last day of the Interest
Period applicable thereto, a period equal to the remaining portion
of such Interest Period if such Interest Period had not been so
terminated; and (iii) in the event that the Company shall prepay or
repay all or any part of the principal amount of a Eurodollar Loan
prior to the last day of the Interest Period applicable thereto, a
period equal to the period from and including the date of such
prepayment or repayment to but excluding the last day of such
Interest Period.
"Reportable Event": any event described in Section
4043(b) of ERISA, other than an event (excluding an event described
in Section 4043(b)(1) relating to tax disqualification) with
respect to which the 30-day notice requirement has been waived.
"Required Banks": at any time when no Revolving Credit
Loans or Letters of Credit are outstanding, Banks having Revolving
Credit Commitments equal to at least 51% of the Aggregate Revolving
Credit Commitments, and at any time when Revolving Credit Loans or
Letters of Credit are outstanding, Banks holding Revolving Credit
Notes having an unpaid principal balance equal to at least 51% of
the aggregate Revolving Credit Loans outstanding and Letters of
Credit Exposure.
"Restaurants Guaranty": collectively, (i) the subordinat-
ed guaranty of the Company of the Enterprises Subordinated Deben-
tures pursuant to the provisions of the Enterprises Subordinated
Indenture and (ii) the subordinated guaranty of the Company of the
Senior Subordinated Debentures pursuant to the provisions of the
Debenture Purchase Agreement.
"Revolving Credit Commitment": as to any Bank, the amount
set forth next to the name of such Bank in Exhibit A under the
heading "Revolving Credit Commitment", as such Revolving Credit
Commitment may be reduced from time to time pursuant to paragraph
2.4.
"Revolving Credit Commitment Fee": as defined in para-
graph 3.1.
"Revolving Credit Commitment Period": the period from the
Second Restatement Effective Date to, but excluding, the Revolving
Credit Termination Date.
"Revolving Credit Loan" and "Revolving Credit Loans": as
defined in paragraph 2.1.
"Revolving Credit Termination Date": June 3, 1996, or any
date subsequent thereto resulting from an extension of the Revolv-
ing Credit Termination Date pursuant to paragraph 2.20, or such
earlier date on which the Revolving Credit Notes shall become due
and payable, whether by acceleration or otherwise.
"SEC": the Securities and Exchange Commission, or any
Governmental Authority succeeding to the functions thereof.
"Second Restatement Effective Date": as defined in the
Recitals.
"Securities Act": the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Security Agreement": the Amended and Restated Security
Agreement, made by the Company to the Collateral Agent, substan-
tially in the form of Exhibit L, as the same may be amended,
modified or otherwise supplemented from time to time.
"Senior Debt Service Coverage Ratio": at any date of
determination, the ratio of (a) Adjusted Operating Cash Flow for
the immediately preceding four fiscal quarters of the Company to
(b) Adjusted Total Senior Debt.
"Senior Subordinated Debentures": the 5% Convertible
Senior Subordinated Debentures, due March 31, 2003, issued by
Enterprises pursuant to the Debenture Purchase Agreement, as the
same may be amended, supplemented or otherwise modified from time
to time in accordance with paragraph 8.20.
"Single Employer Plan": any Plan which is not a
Multiemployer Plan.
"Special Counsel": Emmet, Marvin & Martin, LLP.
"Stock": any and all shares, rights, interests,
participations, warrants or other equivalents (however designated)
of corporate stock.
"Subsidiary": any corporation, association, partnership,
joint venture or other business entity of which the Company and/or
any Subsidiary of the Company, directly or indirectly, either (i)
in respect of a corporation, owns or controls more than 50% of the
outstanding Stock having ordinary voting power to elect a majority
of the board of directors or similar managing body, irrespective of
whether a class or classes shall or might have voting power by
reason of the happening of any contingency, or (ii) in respect of
an association, partnership, joint venture or other business
entity, is entitled to share in more than 50% of the profits and
losses, however determined.
"Subsidiary Guarantors": collectively, TPI Commissary and
TPI Transportation.
"Subsidiary Guaranty": the Guaranty and Subordination
Agreement, dated as of March 18, 1994, made by the Subsidiary
Guarantors and the Company to the Administrative Agent, as the same
may be amended, supplemented or otherwise modified from time to
time.
"Subsidiary Sale": an Asset Sale by the Company or any of
its Subsidiaries of (i) all or any portion of the capital Stock of
any of its respective Subsidiaries or (ii) all or substantially all
of the assets of any of its respective Subsidiaries or any division
or business thereof.
"Tax Sharing Agreement": the Tax Sharing and Paying
Agreement, dated as of April 22, 1988, between the Company, certain
of its Subsidiaries and Enterprises, as the same may be amended,
supplemented or otherwise modified from time to time in accordance
with paragraph 8.20.
"Taxes": any present or future income, stamp or other
taxes, levies, imposts, duties, fees, assessments, deductions,
withholding, or other charges of whatever nature, now or hereafter
imposed, levied, collected, withheld, or assessed by any jurisdic-
tion or by any department, agency, state or other political subdi-
vision thereof or therein.
"Tennessee Bank": a Bank which maintains an office in the
State of Tennessee.
"Tennessee Tax" as defined in paragraph 2.13(c).
"Total Debt": at any date of determination, the sum of
Total Senior Debt and Total Subordinated Debt.
"Total Senior Debt": at any date of determination, the
sum of, without duplication, (i) the aggregate outstanding princi-
pal balance of all Debt of the Company and its Subsidiaries on a
Consolidated basis (other than Total Subordinated Debt) and (ii)
the amount of the Aggregate Revolving Credit Commitments less the
aggregate principal amount of Revolving Credit Loans outstanding on
such date.
"Total Subordinated Debt": at any date of determination,
the sum of the aggregate outstanding principal balance of (i) the
Enterprises Subordinated Debentures and (ii) the Senior Subordinat-
ed Debentures.
"TPI Commissary": TPI Commissary, Inc., a Tennessee
corporation and a wholly-owned Subsidiary of the Company.
"TPI Insurance": TPI Insurance, Inc., a Hawaii corpora-
tion and a wholly-owned Subsidiary of Enterprises.
"TPI Transportation": TPI Transportation, Inc., a Tennes-
see corporation and a wholly-owned Subsidiary of the Company.
"Transaction Documents": collectively, this Agreement,
Amendment No. 2, dated as of January 31, 1995, to the Enterprises
Guaranty and the Security Agreement.
"Transaction Record": as defined in paragraph 2.21.
1.2. Other Definitional Provisions.
(a) All terms defined in this Agreement shall have the
meanings given such terms herein when used in the Loan Documents or
any certificate or other document made or delivered pursuant hereto
or thereto, unless otherwise defined therein.
(b) As used herein, in the other Loan Documents and in
any certificate or other document made or delivered pursuant hereto
or thereto, accounting terms not defined in paragraph 1.1, and
accounting terms partly defined in paragraph 1.1, to the extent not
defined, shall have the respective meanings given to them under
GAAP.
(c) The words "hereof", "herein", "hereto" and "hereun-
der" and similar words when used in this Agreement shall refer to
this Agreement as a whole and not to any particular provision of
this Agreement, and paragraph, schedule and exhibit references
contained herein shall refer to paragraphs hereof or schedules or
exhibits hereto unless otherwise expressly provided herein.
(d) The word "or" shall not be exclusive; "may not" is
prohibitive and not permissive; and the singular includes the
plural.
2. AMOUNT AND TERMS OF REVOLVING CREDIT LOANS AND LETTERS OF CREDIT.
2.1. Revolving Credit Loans.
Subject to the terms and conditions of this Agreement,
each Bank severally agrees to make revolving credit loans (each, a
"Revolving Credit Loan" or a "Loan" and, collectively with its
other Revolving Credit Loans and the Revolving Credit Loans of the
other Banks, the "Revolving Credit Loans" or "Loans") to the
Company from time to time during the Revolving Credit Commitment
Period in an aggregate principal amount at any one time outstanding
not to exceed such Bank's Commitment Percentage of the Available
Revolving Credit Commitment. At no time shall the sum of (i) the
aggregate outstanding principal balance of all of the Revolving
Credit Loans and (ii) the Letter of Credit Exposure exceed the
Aggregate Revolving Credit Commitments. During the Revolving
Credit Commitment Period, the Company may borrow, prepay in whole
or in part and reborrow under such Revolving Credit Commitments,
all in accordance with the terms and conditions hereof. Subject to
the provisions of paragraphs 2.3 and 2.6, Revolving Credit Loans
may be (i) Alternate Base Rate Loans, (ii) Eurodollar Loans or
(iii) any combination thereof.
2.2. Revolving Credit Notes.
The Revolving Credit Loans made by each Bank shall be
evidenced by such Bank's Revolving Credit Note, representing the
obligation of the Company to pay the lesser of (i) the Revolving
Credit Commitment of such Bank and (ii) the aggregate unpaid
principal balance of all Revolving Credit Loans made by such Bank,
with interest thereon as prescribed in paragraph 2.7. The (i) date
and amount of each Revolving Credit Loan made by a Bank, (ii) its
character as an Alternate Base Rate Loan, a Eurodollar Loan or a
combination thereof, (iii) the interest rate and Interest Period
(if any) applicable to Eurodollar Loans, and (iv) each payment and
prepayment of the principal thereof, shall be recorded by such Bank
on its books and, prior to any transfer of its Revolving Credit
Note, indorsed by such Bank on the schedule attached thereto or any
continuation thereof, provided that the failure of such Bank to
make any such recordation or indorsement shall not affect the
obligations of the Company to make payment when due of any amount
owing under the Loan Documents. Interest on each Revolving Credit
Note shall be payable on the principal balance thereof from time to
time outstanding at the applicable interest rate or rates per annum
and at the times specified in paragraph 2.7.
2.3. Procedure for Borrowing.
(a) The Company may borrow Revolving Credit Loans on any
Business Day during the Revolving Credit Commitment Period, provid-
ed, however, that the Company shall notify the Administrative Agent
(by telephone, to be promptly confirmed in writing, or telecopy) no
later than 1:00 P.M., New York City time, three Business Days prior
to the requested Borrowing Date, in the case of Eurodollar Loans,
and no later than 1:00 P.M., New York City time, one Business Day
prior to the requested Borrowing Date, in the case of Alternate
Base Rate Loans, specifying (i) the amount to be borrowed, (ii) the
requested Borrowing Date, (iii) whether the borrowing is to be a
Eurodollar Loan, an Alternate Base Rate Loan, or a combination
thereof, and the amount of each thereof, and (iv) if the borrowing
is to be of Eurodollar Loans, the length of the initial Interest
Period for such Loans. Each borrowing shall be in an aggregate
principal amount equal to $1,000,000 or such amount plus an inte-
gral multiple of $100,000 in excess thereof or, if less, the unused
amount of the Aggregate Revolving Credit Commitments. Upon receipt
of each notice of borrowing from the Company, the Administrative
Agent shall promptly notify each Bank thereof. Subject to its
receipt of the notice referred to in the preceding sentence, each
Bank will make the amount of its applicable Commitment Percentage
of each borrowing available to the Administrative Agent for the
account of the Company at the office of the Administrative Agent
set forth in paragraph 11.2 not later than 12:00 Noon, New York
City time, on the Borrowing Date requested by the Company, in funds
immediately available to the Administrative Agent at such office.
The amounts so made available to the Administrative Agent on a
Borrowing Date will then, subject to the satisfaction of the terms
and conditions of this Agreement as determined by the Administra-
tive Agent, be made available on such date to the Company by the
Administrative Agent at the office of the Administrative Agent
specified in paragraph 11.2 by crediting the account of the Company
on the books of such office with the aggregate of said amounts
received by the Administrative Agent.
(b) Unless the Administrative Agent shall have received
prior notice from a Bank (by telephone or otherwise, such notice to
be confirmed by telecopy or other writing) that such Bank will not
make available to the Administrative Agent such Bank's pro rata
share of the Revolving Credit Loans requested by the Company, the
Administrative Agent may assume that such Bank has made such share
available to the Administrative Agent on such Borrowing Date in
accordance with this paragraph, provided that such Bank received
notice of the proposed borrowing from the Administrative Agent, and
the Administrative Agent may, in reliance upon such assumption,
make available to the Company on such Borrowing Date a correspond-
ing amount. If and to the extent such Bank shall not have so made
such pro rata share available to the Administrative Agent, such
Bank and the Company severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount (to the extent
not previously paid by the other), together with interest thereon
for each day from the date such amount is made available to the
Company until the date such amount is paid to the Administrative
Agent, at a rate per annum equal to, in the case of the Company,
the applicable interest rate set forth in paragraph 2.7, and, in
the case of such Bank, the Federal Funds Rate in effect on such
date (as determined by the Administrative Agent). Such payment by
the Company, however, shall be without prejudice to its rights
against such Bank. If such Bank shall pay to the Administrative
Agent such corresponding amount, such amount so paid shall consti-
tute such Bank's Revolving Credit Loan as part of such Revolving
Credit Loans for purposes of this Agreement, which Revolving Credit
Loan shall be deemed to have been made by such Bank on the Borrow-
ing Date applicable to such Revolving Credit Loans.
2.4. Reduction of Revolving Credit Commitments.
(a) Voluntary Reductions. The Company shall have the
right, upon at least three Business Days' prior written notice to
the Administrative Agent, to reduce permanently the Aggregate
Revolving Credit Commitments in whole at any time, or in part from
time to time, without premium or penalty, by an amount not in
excess of the Available Revolving Credit Commitment (after giving
effect to any contemporaneous prepayment of Revolving Credit
Loans), provided that each partial reduction of the Aggregate
Revolving Credit Commitments shall be in an amount equal to
$1,000,000 or such amount plus a whole multiple of $100,000.
(b) Mandatory Reductions of Aggregate Revolving Credit
Commitments Relating to Mortgage Financings and Asset Sales. The
Aggregate Revolving Credit Commitments shall be permanently reduced
at the times and in the amounts of each required prepayment of the
Revolving Credit Loans pursuant to paragraph 2.5(b)(ii).
(c) In General. Reductions of the Aggregate Revolving
Credit Commitments shall be applied pro rata according to the
Revolving Credit Commitment of each Bank. Simultaneously with each
reduction of the Aggregate Revolving Credit Commitments under this
paragraph, the Company shall pay the Revolving Credit Commitment
Fee accrued on the amount by which the Aggregate Revolving Credit
Commitments have been reduced.
2.5. Prepayments of the Revolving Credit Loans.
(a) Voluntary Prepayments. The Company may, at its
option, prepay the Revolving Credit Loans, in whole or in part,
without premium or penalty, at any time and from time to time, by
notifying the Administrative Agent at least three Business Days
prior to the proposed prepayment date in the case of any prepayment
of Eurodollar Loans and at least one Business Day prior to the
proposed prepayment date in the case of any prepayment of Alternate
Base Rate Loans. Each such notice shall be in writing and shall
specify the amount to be prepaid and the date of prepayment. Upon
receipt of such notice, the Administrative Agent shall promptly
notify each Bank thereof. If any such notice of the Company is
given pursuant to this paragraph, such notice shall be irrevocable
and the payment amount specified in such notice shall be due and
payable on the date specified, together with accrued interest to
the date of such payment on the amount prepaid. Partial prepay-
ments shall be in an aggregate principal amount of $1,000,000 or
such amount plus an integral multiple of $100,000 in excess thereof
or, if less, the outstanding principal balance of the Revolving
Credit Loans. After giving effect to any partial prepayment with
respect to Eurodollar Loans made on the same date (whether as the
result of a borrowing or a conversion) and which had the same
Interest Period, the outstanding principal amount of such Eurodol-
lar Loans made (whether as the result of a borrowing or a conver-
sion) shall exceed (subject to paragraph 2.6) $1,000,000 or such
Eurodollar Loans shall be converted to Alternate Base Rate Loans.
No prepayment of a Eurodollar Loan shall be made except on the last
day of the Interest Period applicable thereto.
(b) Mandatory Prepayments of Loans Relating to Reduc-
tions of the Aggregate Revolving Credit Commitments.
(i) In General. Simultaneously with each reduction
of the Aggregate Revolving Credit Commitments under paragraph 2.4,
the Company shall prepay the Revolving Credit Loans by the amount,
if any, by which the aggregate unpaid principal balance of the
Revolving Credit Loans exceeds the amount of the Aggregate Revolv-
ing Credit Commitments as so reduced. In the event that at the
time of a reduction of the Aggregate Revolving Credit Commitments,
the Letter of Credit Exposure exceeds Available Revolving Credit
Commitment, the Company shall forthwith deposit Cash Collateral in
an amount equal to such excess with, and under the exclusive
control of, the Collateral Agent to be held pursuant to the terms
of the Security Agreement.
(ii) Asset Sales and Mortgage Financings. All Net
Cash Proceeds of Asset Sales and Mortgage Financings delivered to
the Administrative Agent in accordance with paragraphs 8.8(c) or
8.8(d) shall be applied immediately to the prepayment of the
Revolving Credit Loans, provided, however, that to the extent that
the amount of such Net Cash Proceeds exceeds the then outstanding
principal balance of the Revolving Credit Loans (after giving
effect to any additional required prepayment pursuant to clause (i)
above), such excess shall be (x) delivered by the Administrative
Agent to the Collateral Agent to the extent that the Company is
obligated to deliver Cash Collateral pursuant to clause (i) above
to be held by the Collateral Agent as Cash Collateral pursuant to
the Security Agreement and (y) any remaining portion of such excess
shall be paid to the Company.
(c) In General. If any prepayment is made under this
paragraph with respect to any Eurodollar Loans, in whole or in
part, prior to the last day of the applicable Interest Period, the
Company agrees to indemnify the Banks in accordance with paragraph
2.16.
2.6. Conversions.
(a) The Company may elect from time to time to convert
Eurodollar Loans to Alternate Base Rate Loans by giving the Admin-
istrative Agent at least one Business Day's prior irrevocable
notice of such election, specifying the amount to be so converted,
provided, that any such conversion shall only be made on the last
day of the Interest Period applicable thereto. In addition, the
Company may elect from time to time to convert Alternate Base Rate
Loans to Eurodollar Loans or to convert Eurodollar Loans to new
Eurodollar Loans by giving the Administrative Agent at least three
Business Days' prior irrevocable notice of such election, in the
case of a conversion to Eurodollar Loans, specifying the amount to
be so converted and the initial Interest Period relating thereto,
provided that any such conversion of Alternate Base Rate Loans to
Eurodollar Loans shall only be made on a Business Day and any such
conversion of Eurodollar Loans to new Eurodollar Loans shall only
be made on the last day of the Interest Period applicable to the
Eurodollar Loans which are to be converted to such new Eurodollar
Loans. The Administrative Agent shall promptly provide the Banks
with notice of any such election. Alternate Base Rate and Eurodol-
lar Loans may be converted pursuant to this paragraph in whole or
in part, provided that conversions of Alternate Base Rate Loans to
Eurodollar Loans, or Eurodollar Loans to new Eurodollar Loans,
shall be in an aggregate principal amount of (subject to this
paragraph) $1,000,000 or such amount plus a whole multiple of
$100,000.
(b) Notwithstanding anything in this paragraph to the
contrary, no Alternate Base Rate Loan may be converted to a Euro-
dollar Loan, and no Eurodollar Loan may be converted to a new
Eurodollar Loan, if a Default or Event of Default has occurred and
is continuing at the time the Company shall notify the Administra-
tive Agent of its election to convert any such Alternate Base Rate
Loan to a Eurodollar Loan or to convert any Eurodollar Loan to a
new Eurodollar Loan and the Agent shall have knowledge thereof. In
such event, such Alternate Base Rate Loan shall be automatically
continued as an Alternate Base Rate Loan or such Eurodollar Loan
shall be automatically converted to an Alternate Base Rate Loan on
the last day of the Interest Period applicable to such Eurodollar
Loan. If a Default or an Event of Default shall have occurred and
be continuing, the Administrative Agent shall, at the request of
the Required Banks, notify the Company (by telephone or otherwise)
that all, or such lesser amount as the Administrative Agent and the
Required Banks shall designate, of the outstanding Eurodollar Loans
shall be automatically converted to Alternate Base Rate Loans, in
which event such Eurodollar Loans shall be automatically converted
to Alternate Base Rate Loans on the date such notice is given and
shall bear interest from and after such date at the Alternate Base
Rate plus the Applicable Margin. In the event that Eurodollar
Loans are converted to Alternate Base Rate Loans at the request of
the Required Banks pursuant to the preceding sentence, no Bank
shall be entitled to an indemnity described in paragraph 2.16 with
respect to the Eurodollar Loans so converted.
(c) Each conversion shall be effected by each Bank by
applying the proceeds of the new Alternate Base Rate Loan, or
Eurodollar Loan, as the case may be, to the Loan (or portion
thereof) being converted (it being understood that such conversion
shall not constitute a borrowing for purposes of paragraphs 4, 5 or
6).
2.7. Interest Rate and Payment Dates.
(a) Revolving Credit Loans Prior to Maturity. Except as
otherwise provided in paragraph 2.7(c), prior to maturity, the
outstanding principal balance of the Revolving Credit Loans shall
bear interest on the unpaid principal balance thereof at the
applicable interest rate or rates per annum set forth below:
LOANS RATE
Each Alternate Base Rate Alternate Base Rate plus the
Loan Applicable Margin.
Each Eurodollar Loan Eurodollar Rate for the appli-
cable Interest Period plus the
Applicable Margin.
(b) Late Charges. If all or any portion of the principal
balance of or interest payable on any of the Revolving Credit
Loans, the amount of any drawing under a Letter of Credit or any
other amount payable by the Company to the Bank under the Loan
Documents shall not be paid when due (whether at the stated maturi-
ty date thereof, by acceleration or otherwise), (i) such overdue
principal shall bear interest at a rate per annum equal to 2% plus
the rate which would otherwise be applicable pursuant to paragraph
2.7(a), (ii) such unreimbursed drawing under a Letter of Credit
shall bear interest at a rate per annum equal to (x) if the reim-
bursement of such drawing is made on the Business Day immediately
succeeding the date on which such reimbursement is due, the Alter-
nate Base Rate plus the Applicable Margin and (y) if such reim-
bursement is not made on such immediately succeeding Business Day,
the Alternate Base Rate plus 31/2% for the period from the date on
which such payment was due until payment thereof, and (iii) such
overdue interest or other amount shall bear interest at a rate per
annum equal to the Alternate Base Rate plus the Applicable Margin
plus 2%, in each case from the date of such nonpayment until paid
in full, whether before or after judgment. Interest payable under
this paragraph 2.7(b) shall be payable on demand.
(c) General. Interest shall be calculated on the basis
of a 360 day year for the actual number of days elapsed. Interest
shall be payable in arrears on each Interest Payment Date and upon
payment (including prepayment) of the Revolving Credit Loans. Any
change in the interest rate on the Revolving Credit Loans resulting
from a change in the Alternate Base Rate or any reserve requirement
shall become effective as of the opening of business on the day on
which such change shall become effective. The Administrative Agent
shall, as soon as practicable, notify the Company and the Banks of
the effective date and the amount of each such change in the
Alternate Base Rate or any reserve requirement, but failure to so
notify shall not in any manner affect the obligation of the Company
to pay interest on the Revolving Credit Loans in the amounts and on
the dates required. Each determination of the Alternate Base Rate
by the Administrative Agent pursuant to this Agreement shall be
conclusive and binding on the Company and the Banks absent manifest
error. At no time shall the interest rate payable on the Revolving
Credit Loans, together with the Revolving Credit Commitment Fee,
the Letter of Credit Commissions and all other fees and other
amounts payable hereunder, to the extent the same are construed to
constitute interest, exceed the Highest Lawful Rate. If interest
payable on any date would exceed the maximum amount permitted by
the Highest Lawful Rate, such interest payment shall automatically
be reduced to such maximum permitted amount, and interest for any
subsequent period, to the extent less than the maximum amount
permitted for such period by the Highest Lawful Rate, shall be
increased by the unpaid amount of such reduction. Any interest
actually received for any period in excess of such maximum allow-
able amount for such period shall be deemed to have been applied as
a prepayment of the Revolving Credit Loans. The Company acknowl-
edges that to the extent interest payable on the Revolving Credit
Loans is based on the Alternate Base Rate, such Rate is only one of
the bases for computing interest on loans made by the Banks, and by
basing interest payable on the Alternate Base Rate Loans on the
Alternate Base Rate, the Banks have not committed to charge, and
the Company has not in any way bargained for, interest based on a
lower or the lowest rate at which the Banks may now or in the
future make loans to other borrowers.
2.8. Letter of Credit Sub-Facility.
(a) Subject to the terms and conditions of this
Agreement, the Issuing Bank agrees, in reliance on the agreement of
the other Banks set forth in paragraph 2.9, to issue standby and
documentary trade letters of credit (together with the Letters of
Credit issued by the Issuing Bank on and after the Original Effec-
tive Date and before the Second Restatement Effective Date, the
"Letters of Credit"; each, individually, a "Letter of Credit") for
the account of the Company, or, for the joint account of the
Company and TPI Insurance solely in respect of the Hartford Letter
of Credit. The sum of the aggregate face amount of the Letters of
Credit at any one time outstanding shall not exceed the lesser of
(i) the Letter of Credit Commitment and (ii) the Available Revolv-
ing Credit Commitment. Each Letter of Credit shall have an expira-
tion date which shall not be (i) more than one year from the date
of its issuance or (ii) later than one Business Day prior to the
Revolving Credit Termination Date. No Letter of Credit shall be
issued if the Administrative Agent shall have determined that the
conditions set forth in paragraph 6 have not been satisfied.
(b) Each Letter of Credit shall be issued for the
account of the Company in support of the Company's workers' compen-
sation, general liability and other obligations arising in the
ordinary course of business and which do not involve obligations
for the borrowing of money or Contingent Obligations with respect
thereto. The Company shall give the Issuing Bank (with a copy to
the Administrative Agent) a Letter of Credit Request for the
issuance of each Letter of Credit by 10:00 A.M., Issuing Bank Local
Time, three Business Days prior to the requested date of issuance.
Such Letter of Credit Request shall specify (i) the beneficiary of
such Letter of Credit and the address at which the Letter of Credit
is to be delivered to such beneficiary, (ii) the Company's proposal
as to the conditions under which a drawing may be made under such
Letter of Credit and the documentation, if any, to be required in
respect thereof, (iii) the maximum amount to be available under
such Letter of Credit, and (iv) the requested date of issuance and
the expiration date. The Company agrees to provide to the Issuing
Bank prior to the issuance of a Letter of Credit, such other
information as the Issuing Bank may reasonably request in connec-
tion with the issuance of such Letter of Credit. Upon receipt of
such Letter of Credit Request from the Company, the Issuing Bank
shall promptly notify the Administrative Agent which, in turn, will
promptly notify each Bank thereof. The Issuing Bank shall, on the
proposed date of issuance and subject to the other terms and
conditions of this Agreement, issue the requested Letter of Credit
on behalf of the Banks. Each Letter of Credit shall be in form and
substance reasonably satisfactory to the Issuing Bank, with such
provisions with respect to the conditions under which a drawing may
be made thereunder and the documentation required in respect of
such drawing as the Issuing Bank shall reasonably require. The
Issuing Bank shall deliver a copy of each Letter of Credit to the
Administrative Agent for distribution to the Company and each Bank
within a reasonable time after the issuance thereof.
(c) Each payment by the Issuing Bank of a draft
drawn under a Letter of Credit shall give rise to an obligation on
the part of the Company to reimburse the Issuing Bank immediately
by wire transfer for the amount thereof. If the Company shall have
failed to reimburse the Issuing Bank in full on or before 11:00
A.M., Issuing Bank Local Time, on the date the Issuing Bank shall
make payment on a draft drawn under a Letter of Credit, the Issuing
Bank shall notify the Administrative Agent thereof by telephone
(promptly confirmed in writing) not later than 11:30 A.M., Issuing
Bank Local Time, on such date and the Company's obligations to make
such reimbursement shall be satisfied by the automatic making of a
Revolving Credit Loan by each Bank under its Revolving Credit Note
(without regard to the occurrence of any Default or Event of
Default or the compliance by the Company with any of its obliga-
tions under the Loan Documents) in the principal amount equal to
its Commitment Percentage of the amount of such draft paid by the
Issuing Bank. The Company shall be deemed to have elected that
each such Revolving Credit Loan be made initially as an Alternate
Base Rate Loan. The Administrative Agent agrees to notify each
Bank (in accordance with paragraph 2.3(b)) and the Company of the
making of such Revolving Credit Loan.
2.9. Letter of Credit Participation and Funding Commitments.
(a) Each Bank hereby unconditionally, irrevocably, and
severally for itself only hereby takes, without any notice to or
the taking of any action by such Bank, an undivided participating
interest in the obligations of the Issuing Bank under and in
connection with each Letter of Credit in an amount equal to such
Bank's Commitment Percentage of the amount of such Letter of
Credit. Each Bank shall be liable to the Issuing Bank for its
Commitment Percentage of the unreimbursed amount of any draft drawn
and honored under each Letter of Credit. The failure of any Bank to
honor its obligations hereunder shall not relieve any other Bank of
its duty to honor its obligations hereunder. Each Bank shall also
be liable for an amount equal to the product of its Commitment
Percentage and any amounts paid by the Company pursuant to para-
graph 2.8 that are subsequently rescinded or avoided, or must
otherwise be restored or returned. Such liabilities shall be
unconditional and without regard to the occurrence of any Default
or Event of Default or the compliance by the Company with any of
its obligations under the Loan Documents. Each payment by a Bank of
such Commitment Percentage of the amount of such Letter of Credit
or of any amounts so rescinded, avoided, restored or returned shall
be treated as the making by such Bank of an automatic Revolving
Credit Loan.
(b) The Issuing Bank will promptly notify the Adminis-
trative Agent and each Bank (which notice shall be promptly con-
firmed in writing) of the date and the amount of any draft present-
ed under any Letter of Credit with respect to which full reimburse-
ment of payment is not made by the Company as provided in paragraph
2.8, and forthwith upon receipt of such notice, such Bank (other
than the Issuing Bank) shall make available to the Administrative
Agent for the account of the Issuing Bank its Commitment Percentage
of the amount of such unreimbursed draft (which shall constitute
such Bank's automatic Revolving Credit Loan) at the office of the
Administrative Agent specified in paragraph 11.2, in lawful money
of the United States and in immediately available funds, before
4:00 P.M., Issuing Bank Local Time, on the day such notice is given
by the Issuing Bank, if the relevant notice is given by the Issuing
Bank at or prior to 1:00 P.M., Issuing Bank Local Time, on such
day, and before 12:00 Noon, New York City time, on the next Busi-
ness Day, if the relevant notice is given by the Issuing Bank after
1:00 P.M., Issuing Bank Local Time, on such day. The Administra-
tive Agent shall distribute the payments made by each Bank (other
than the Issuing Bank) pursuant to the immediately preceding
sentence to the Issuing Bank promptly upon receipt thereof in like
funds as received. If and to the extent that a Bank does not make
available to the Administrative Agent when due such Bank's Commit-
ment Percentage of any unreimbursed payment made by the Issuing
Bank under a Letter of Credit (other than payments made by the
Issuing Bank by reason of its failure to materially comply with the
terms of such Letter of Credit), and the Administrative Agent has
not made, in its sole discretion, such payment on behalf of such
Bank pursuant to paragraph 2.3(b), such Bank and the Company
severally agree upon demand by the Issuing Bank to pay to the
Administrative Agent for the account of the Issuing Bank such
amount (to the extent not paid by the other), together with inter-
est thereon for each day from the date on which such payment was
due from such Bank until the date such amount is paid to the
Administrative Agent on behalf of the Issuing Bank, at a rate per
annum equal to, in the case of the Company, the applicable interest
rate set forth in paragraph 2.7, and in the case of such Bank, the
Federal Funds Rate in effect on such date (as determined by the
Administrative Agent). The Administrative Agent shall promptly
distribute such interest payments to the Issuing Bank upon receipt
thereof in like funds as received. If the Administrative Agent
receives a Bank's Commitment Percentage of any unreimbursed payment
under a Letter of Credit after the date when due and the Adminis-
trative Agent receives interest on any late payment from such Bank
in accordance with the provisions of the preceding sentence, such
Bank's automatic Revolving Credit Loan shall be deemed to have been
made to the Company on the date the Issuing Bank made payment under
such Letter of Credit.
(c) Whenever the Administrative Agent is reimbursed by
the Company, for the account of the Issuing Bank, for any payment
under a Letter of Credit and such payment relates to an amount
previously paid by a Bank in respect of its Commitment Percentage
of the amount of such payment under such Letter of Credit, the
Administrative Agent will pay over such payment to such Bank (i)
before 4:00 P.M., New York City time on the day such payment from
the Company is received, if such payment is received at or prior to
1:00 P.M., New York City time, on such day, or (ii) before 12:00
Noon, New York City time, on the next succeeding Business Day, if
such payment from the Company is received after 1:00 P.M., New York
City time, on such day.
2.10. Absolute Obligation with respect to Letter of Credit Payments.
The Company's obligation to reimburse the Administrative
Agent for the account of the Issuing Bank in respect of a Letter of
Credit for each payment under or in respect of such Letter of
Credit shall be absolute and unconditional under any and all
circumstances and irrespective of any set-off, counterclaim or
defense (other than payment by the Company) to payment which the
Company may have or have had against the beneficiary of such Letter
of Credit, the Administrative Agent, the Issuing Bank, any Bank or
any other Person, including, without limitation, any defense based
on the failure of any drawing to conform to the terms of such
Letter of Credit, any drawing document proving to be forged,
fraudulent or invalid, or the legality, validity, regularity or
enforceability of such Letter of Credit. The foregoing shall not
impose any limitation on any right the Company may have to proceed
against the Issuing Bank for the Issuing Bank's gross negligence or
willful misconduct.
2.11. Increased Costs Based on Letters of Credit.
Without limiting the provisions of paragraph 2.15, in
the event that after the Original Effective Date, the implementa-
tion of, or any change in, any law or regulation or any change in
the interpretation or application thereof by any Governmental
Authority charged with the administration thereof shall either (a)
impose, modify or make applicable any reserve, special deposit,
assessment or similar requirement against letters of credit issued
(or any commitment to issue letters of credit) by, or participated
(or any commitment to participate in letters of credit) by any
Bank, or (b) impose on the Issuing Bank or such Bank any other
condition regarding the Letters of Credit (except for the imposi-
tion of, or changes in the rate of, tax on the overall net income
of the Issuing Bank or such Bank) and the result of any event
referred to in clause (a) or (b) above shall be to increase the
cost to the Issuing Bank of issuing or maintaining the Letters of
Credit or the cost to any Bank of making or maintaining any Revolv-
ing Credit Loan pursuant to paragraph 2.8 or its obligations
pursuant to paragraph 2.9, or the cost to the Administrative Agent
of performing its functions hereunder with respect to the Letters
of Credit, in any case by an amount which the Administrative Agent,
the Issuing Bank, or any Bank, as the case may be, deems material,
then, within ten days after demand by the Administrative Agent, the
Issuing Bank or such Bank, as the case may be, accompanied by a
statement of the type referred to in the next sentence, the Company
shall immediately pay to the Administrative Agent, the Issuing Bank
or such Bank, as the case may be, from time to time as specified by
the Administrative Agent, the Issuing Bank or such Bank, additional
amounts which shall be sufficient to compensate the Administrative
Agent, the Issuing Bank or such Bank, as the case may be, for such
increased cost. A statement in reasonable detail as to such in-
creased cost incurred by the Administrative Agent, the Issuing Bank
or such Bank, as the case may be, as a result of any event men-
tioned in clauses (a) or (b) above, submitted to the Company shall
be conclusive, absent manifest error, as to the amount thereof.
2.12. Substituted Interest Rate.
In the event that (i) the Administrative Agent shall
have determined (which determination shall be conclusive and
binding upon the Company) that by reason of circumstances affecting
the interbank eurodollar market either adequate and reasonable
means do not exist for ascertaining the Eurodollar Rate applicable
pursuant to paragraph 2.7 or quotations of rates for relevant
deposits referred to in the definition of Eurodollar Rates are not
being provided in the relevant amounts or for the relevant maturi-
ties or (ii) the Required Banks shall have notified the Administra-
tive Agent that they have determined (which determination shall be
conclusive and binding on the Company) that the applicable Eurodol-
lar Rate will not adequately and fairly reflect the cost to such
Banks of maintaining or funding loans bearing interest based on
such Eurodollar Rate, with respect to proposed Loans that the
Company has requested be made as Eurodollar Loans or Eurodollar
Loans that will result from the requested conversion of any Loans
into Eurodollar Loans (each Loan being herein called an "Affected
Loan"), the Administrative Agent shall promptly notify the Company
and the Banks (by telephone or otherwise, to be confirmed in
writing) of such determination, on or prior to the requested
Borrowing Date for such Affected Loans or the requested Conversion
Date of such Loans. If the Administrative Agent shall give such
notice, (a) any requested Affected Loan shall be made as an Alter-
nate Base Rate Loan, (b) any Loan that was to have been converted
to an Affected Loan shall be converted to or continued as an
Alternate Base Rate Loan and (c) any outstanding Affected Loan
shall be converted, on the last day of the then current Interest
Period with respect thereto, to an Alternate Base Rate Loan. Until
any such notice under clauses (i) or (ii), as the case may be, of
this paragraph has been withdrawn by the Administrative Agent (by
notice to the Company promptly upon either (x) the Administrative
Agent having determined that such circumstances affecting the
interbank eurodollar market no longer exist and that adequate and
reasonable means do exist for determining the Eurodollar Rate
pursuant to paragraph 2.7 or (y) the Administrative Agent's having
been notified by the Required Banks that circumstances no longer
render any Loan an Affected Loan) no further Eurodollar Loans shall
be required to be made by the Banks nor shall the Company have the
right to convert any Loans to Eurodollar Loans.
2.13. Taxes; Net Payments.
(a) All payments made by the Company under the Loan
Documents shall be made free and clear of, and without reduction
for or on account of, any Taxes required by law to be withheld from
any amounts payable under the Loan Documents. A statement setting
forth the calculations of any amounts payable pursuant to this
paragraph submitted by a Bank to the Company shall be conclusive
absent manifest error.
(b) Each Bank (and any holder of a participation inter-
est from such Bank) shall deliver to the Company such certificates,
documents, or other evidence as the Company may require from time
to time as are necessary to establish that such Bank (or partici-
pant) is not subject to withholding under Section 1441 or 1442 of
the Code or as may be necessary to establish, under any law impos-
ing upon the Company, whether existing now or hereafter, an obliga-
tion to withhold any portion of the payments made by the Company
under the Loan Documents, that payments to the Administrative Agent
on behalf of such Bank (or participant) are not subject to with-
holding. Notwithstanding any provision herein to the contrary, the
Company shall have no obligation to pay to any Bank (or partici-
pant) any amount which the Company is liable to withhold due to the
failure of such Bank (or participant) to file any statement of
exemption required by the Code.
(c) In the event that a Bank (other than a Tennessee
Bank) pays a tax or any interest, penalties or additions with
respect to such tax to the State of Tennessee (or any political
subdivision thereof), which tax is computed (1) with respect to
such Bank's earnings, income or similar items, (2) with respect to
issued stock, outstanding stock, surplus, undivided profits,
retained earnings of such Bank or any combination thereof and/or
(3) with respect to the value of Property owned or used in the
State of Tennessee (each, a "Tennessee Tax"):
(i) The Company shall pay to the Bank the allocable
share (determined in accordance with clause (ii) below) of an
amount (the "Reimbursement Amount") equal to the amount of the
Tennessee Tax paid by such Bank which is attributable to (x)
payments made by the Company to such Bank under the Loan Documents
(including payments required by this provision), (y) the Revolving
Credit Loans and other extensions of credit made by such Bank under
the Loan Documents and/or (z) the presence of any Collateral in
Tennessee.
(ii) The calculation of the Reimbursement Amount
shall be made on an after-tax basis so that any reduction in the
amount of such Bank's federal income tax or the tax paid by such
Bank to any other state from what it would otherwise have paid but
for the payment of the Tennessee Tax shall reduce the Reimbursement
Amount on a dollar-for-dollar basis. The allocable share of the
Reimbursement Amount shall be determined by multiplying the Reim-
bursement Amount by a fraction, the numerator of which is the
average amount of the Commitment, Loans and other extensions of
credit during the tax year in question of such Bank to the Company
and the denominator of which is the average amount of the Commit-
ment, Loans and other extensions of credit during the tax year in
question of such Bank to all borrowers in Tennessee. In the event
that such Bank receives a refund of any Tennessee Tax for which the
Bank has received payment from the Company, the Bank will pay such
refund to the Company to the extent of such payment.
(iii) Any Bank which seeks a reimbursement hereunder
shall deliver to the Company a statement setting forth the calcula-
tions of any Reimbursement Amount. Payment thereof shall be made
by the Company within ten Business Days of such Bank's request
therefor.
2.14. Illegality.
Notwithstanding any other provisions herein, if any law,
regulation, treaty or directive, or any change therein or in the
interpretation or application thereof, shall make it unlawful for
any Bank to make or maintain its Eurodollar Loans as contemplated
by this Agreement, (i) the commitment of such Bank to make Eurodol-
lar Loans or convert Alternate Base Rate Loans to Eurodollar Loans,
as the case may be, shall forthwith be suspended and (ii) such
Bank's Loans then outstanding as Eurodollar Loans affected hereby,
if any, shall be converted automatically to Alternate Base Rate
Loans on the last day of the then current Interest Period applica-
ble thereto or within such earlier period as required by law. If
the commitment of any Bank with respect to Eurodollar Loans is
suspended pursuant to this paragraph and such Bank shall notify the
Administrative Agent and the Company that it is once again legal
for such Bank to make or maintain Eurodollar Loans, such Bank's
commitment to make or maintain Eurodollar Loans, shall be reinstat-
ed.
2.15. Increased Costs.
In the event that any law, regulation, treaty or direc-
tive hereafter enacted, promulgated, approved or issued or any
change hereafter enacted, promulgated, approved or issued in any
presently existing law, regulation, treaty or directive or in the
interpretation or application thereof by any Governmental Authority
charged with the administration thereof or compliance by any Bank
(or any corporation directly or indirectly owning or controlling
such Bank) with any request or directive from any central bank or
other Governmental Authority, agency or instrumentality hereafter
enacted, promulgated, approved or issued:
(a) does or shall subject any Bank to any Taxes of any
kind whatsoever with respect to any Eurodollar Loans or its obliga-
tions under this Agreement to make Eurodollar Loans, or change the
basis of taxation of payments to any Bank of principal, interest or
any other amount payable hereunder in respect of its Eurodollar
Loans, including any Taxes required to be withheld from any amounts
payable under the Loan Documents (except for imposition of, or
change in the rate of, tax on the overall net income of such Bank,
other than a tax imposed solely or primarily on United States
branches or subsidiaries of foreign corporations); or
(b) does or shall impose, modify or make applicable any
reserve, special deposit, compulsory loan, assessment, increased
cost or similar requirement against assets held by, or deposits of,
or advances or loans by, or other credit extended by, or any other
acquisition of funds by, any office of such Bank in respect of its
Eurodollar Loans which is not otherwise included in the determina-
tion of the Eurodollar Rate;
and the result of any of the foregoing is to increase the cost to
such Bank of making, renewing, converting or maintaining its
Eurodollar Loans or its commitment to make such Loans, or to reduce
any amount receivable in respect of its Eurodollar Loans, then, in
any such case, the Company shall pay such Bank, within ten days
after demand (which demand shall be accompanied by a statement of
the type referred to in the last sentence of this paragraph), any
additional amounts necessary to compensate such Bank for such
additional cost or reduction in such amount receivable which such
Bank deems to be material as determined by such Bank; provided,
however, that nothing in this paragraph shall require the Company
to indemnify the Banks (or any participant) with respect to with-
holding Taxes for which the Company has no obligation under para-
graph 2.13. No failure by any Bank to demand compensation for any
increased cost during any Interest Period shall constitute a waiver
of such Bank's right to demand such compensation at any time,
provided that such Bank shall use reasonable efforts to notify the
Company of any such increased cost within 90 days after the officer
of such Bank having primary responsibility for this Agreement has
obtained knowledge of such increased cost. A statement setting
forth the calculations of any additional amounts payable pursuant
to the foregoing sentence submitted by a Bank to the Company shall
be conclusive absent manifest error.
2.16. Indemnification for Loss.
Notwithstanding anything contained herein to the con-
trary, if the Company shall fail to borrow or convert on a Borrow-
ing Date or Conversion Date after it shall have given notice to do
so in which it shall have requested a Eurodollar Loan pursuant to
paragraph 2.3 or 2.6, or if a Eurodollar Loan shall be terminated
for any reason prior to the last day of the Interest Period appli-
cable thereto, or if, while a Eurodollar Loan is outstanding, any
repayment or prepayment of such Eurodollar Loan is made for any
reason (including, without limitation, as a result of acceleration
or illegality) on a date which is prior to the last day of the
Interest Period applicable thereto, the Company agrees to indemnify
each Bank against, and to pay on demand directly to such Bank, any
loss or expense suffered by such Bank as a result of such failure
to borrow, termination or repayment, including without limitation,
an amount, if greater than zero, equal to:
A x (B-C) x D
360
where:
"A" equals such Bank's pro rata share of the Affected Principal
Amount;
"B" equals the Eurodollar Rate (expressed as a decimal), as the
case may be, applicable to such Loan;
"C" equals the applicable Eurodollar Rate (expressed as a decimal),
as the case may be, in effect on or about the first day of the
applicable Remaining Interest Period, based on the applicable rates
offered or bid, as the case may be, on or about such date, for
deposits in an amount equal approximately to such Bank's pro rata
share of the Affected Principal Amount with an Interest Period
equal approximately to the applicable Remaining Interest Period, as
determined by such Bank;
"D" equals the number of days from and including the first day of
the applicable Remaining Interest Period to but excluding the last
day of such Remaining Interest Period;
and any other out-of-pocket loss or expense (including any internal
processing charge customarily charged by such Bank) suffered by
such Bank in liquidating deposits prior to maturity in amounts
which correspond to such Bank's pro rata share of such proposed
borrowing, conversion, terminated Eurodollar Loan or repayment.
The obligations of the Company under paragraphs 2.12 through 2.16
shall survive the termination of the Commitments and the payment of
the Revolving Credit Notes, the reimbursement obligations in
respect of drawing under Letters of Credit and all other amounts
payable hereunder.
2.17. Option to Fund.
Each Bank has indicated that, if the Company elects to
borrow or convert to a Eurodollar Loan, such Bank may wish to
purchase one or more deposits in order to fund or maintain its
funding of such Eurodollar Loans during the Interest Period in
question; it being understood that the provisions of this Agreement
relating to such funding are included only for the purpose of
determining the rate of interest to be paid under such Eurodollar
Loan and any amounts owing under paragraphs 2.12 through 2.16.
Subject to paragraph 11.6, each Bank shall be entitled to fund and
maintain its funding of all or any part of each Eurodollar Loan
made by it in any manner it sees fit, but all determinations under
paragraphs 2.12 through 2.16 shall be made as if such Bank had
actually funded and maintained such Eurodollar Loan during the
applicable Interest Period through the purchase of deposits in an
amount equal to such Eurodollar Loan and having a maturity corre-
sponding to such Interest Period.
2.18. Use of Proceeds.
(a) Revolving Credit Loans. The proceeds of the Revolv-
ing Credit Loans may be used for general corporate purposes of the
Company, including, without limitation, for working capital, to
make Intercompany Loans to either TPI Commissary or TPI Transporta-
tion to the extent permitted by paragraph 8.6(i), to reimburse the
Issuing Bank in respect of drawings under Letters of Credit (and
the Banks in respect of payments made to the Issuing Bank in
respect thereof) and to pay the expenses of the transactions
contemplated hereby.
(b) Letters of Credit. Letters of Credit shall be used
to support the Company's workers' compensation, general liability
and other obligations incurred in the ordinary course of business
which do not involve the borrowing of money or Contingent Obliga-
tions with respect thereto.
(c) In General. All Loans and the use to which the
proceeds thereof are put shall conform with the provisions of
paragraph 4.12.
2.19. Capital Adequacy.
If (i) the introduction after the Original Effective
Date, or any change or phasing in after the date hereof of, any law
or regulation or in the interpretation thereof by any United States
or foreign Governmental Authority charged with the administration
thereof or (ii) compliance with any directive, guideline or request
from any central bank or United States or foreign Governmental
Authority (whether or not having the force of law) promulgated or
made after the date hereof affects or would affect the amount of
capital required or expected to be maintained by a Bank (or any
lending office of such Bank) or any corporation directly or indi-
rectly owning or controlling such Bank, and such Bank shall have
determined that such introduction, change or compliance has or
would have the effect of reducing the rate of return on such Bank's
or such corporation's capital or the asset value to such Bank or
such corporation of any Revolving Credit Loan made by, or Letter of
Credit issued or participated in by, such Bank as a consequence,
directly or indirectly, of its obligations to make and maintain the
funding of Loans and issue and participate in Letters of Credit to
a level below that which such Bank could have achieved but for such
introduction, change or compliance (after taking into account such
Bank's or such corporation's policies regarding capital adequacy)
by an amount deemed by such Bank to be material to such Bank or
corporation, then, within ten days after demand by such Bank
(accompanied by a statement of the type referred to in the last
sentence of this paragraph), the Company shall pay to such Bank
such additional amount or amounts as shall be sufficient to compen-
sate such Bank for any such reduction. A certificate as to such
amounts submitted to the Company and the Administrative Agent
setting forth the determination of such amounts that will compen-
sate such Bank for such reduction shall be presumed correct absent
manifest error.
2.20. Extension of Revolving Credit Termination Date.
Provided that no Default or Event of Default exists
during the periods set forth below, the Company may request that
the Revolving Credit Termination Date be extended for additional
periods of one year each by giving written notice of such request
(each, an "Extension Request") to the Agent not more than 60 days
but not less than 30 days prior to an anniversary of the Restate-
ment Effective Date and, upon the receipt of such notice, the Agent
shall promptly notify each Lender of such request. If all of the
Lenders, each in its sole and absolute discretion, consent to an
Extension Request during the period beginning on the date of the
receipt by the Agent of the Extension Request and ending 30 days
thereafter by giving written notice thereof to the Company and the
Agent, then, the then current Revolving Credit Termination Date
shall be extended by one year from and including the then current
Revolving Credit Termination Date, provided, however, that if the
last day of such extension falls on a Saturday, Sunday or public
holiday under the laws of the State of New York, such Revolving
Credit Termination Date shall be the Business Day preceding such
Saturday, Sunday or holiday. Each Lender will use its best efforts
to respond during such period to any request for an extension of
the Revolving Credit Termination Date, provided that no Lender's
failure to so respond shall create any claim against it or have the
effect of extending the Revolving Credit Termination Date or such
Lender's Revolving Credit Commitment beyond the Revolving Credit
Termination Date.
2.21. Transaction Record.
The Administrative Agent shall establish a transaction
record (the "Transaction Record") with respect to this Agreement.
The Transaction Record shall set forth each Bank's Alternate Base
Rate Loans, each Bank's Eurodollar Loans, the amount of each Bank's
participation in each Letter of Credit, each payment by the Company
of principal and interest on the Revolving Credit Loans, repayment
of amounts drawn under the Letters of Credit and certain additional
information. The Transaction Record shall be presumptively correct
absent manifest error as to the amount of each Bank's Loans hereun-
der, as to the Letter of Credit Exposure and as to the amount of
principal and interest paid by the Company in respect of such Loans
and as to the other information relating to the Revolving Credit
Loans, the Letters of Credit and amounts paid and payable by the
Company hereunder and under the Revolving Credit Notes set forth in
the Transaction Record.
3. FEES; PAYMENTS
3.1. Revolving Credit Commitment Fee.
The Company agrees to pay to the Administrative Agent,
for the pro rata account of the Banks in accordance with each
Bank's Revolving Credit Commitment, a fee (the "Revolving Credit
Commitment Fee"), for the period from and including the Original
Effective Date to and including the expiration or other termination
of the Revolving Credit Commitments, equal to 1/2 of 1% per annum
on the average daily Available Revolving Credit Commitments. The
Revolving Credit Commitment Fee shall be payable quarterly in
arrears on the last day of each March, June, September and December
of each year, and on the date that the Aggregate Revolving Credit
Commitments shall expire or otherwise terminate. The Revolving
Credit Commitment Fee shall be calculated on the basis of a 360 day
year for the actual number of days elapsed.
3.2. Letter of Credit Commissions.
The Company agrees to pay the Administrative Agent, for
the pro rata account of the Banks in accordance with each Bank's
Revolving Credit Commitment, commissions (the "Letter of Credit
Commissions") with respect to each Letter of Credit for the period
from and including the date of issuance thereof to and including
the expiration date thereof, at a rate per annum equal to the
Applicable Margin in respect of Eurodollar Loans from time to time
in effect on the average daily amount available to be drawn under
such Letter of Credit. The Letter of Credit Commissions shall be
(i) calculated on the basis of a 360 day year for the actual number
of days elapsed, (ii) payable quarterly in arrears on the last day
of each March, June, September and December of each year and on the
date that the Aggregate Revolving Credit Commitments shall expire
and (iii) nonrefundable. In addition to the foregoing Letter of
Credit Commissions, the Company agrees to pay to the Issuing Bank,
for its own account, the fees set forth in the Fee Letter and its
standard fees and charges customarily charged to customers similar
to the Company with respect to any Letter of Credit.
3.3. Amendment Fee.
The Company agrees to pay to the Administrative Agent,
for the account of each Bank which executes this Agreement, a fee
(the "Amendment Fee"), in an amount equal to 0.20% of such Bank's
Revolving Credit Commitment. The Amendment Fee shall be payable on
the Second Restatement Effective Date.
3.4. Other Fees.
The Company agrees to pay to the Agents such other fees,
in such amounts and at such times as set forth in the Fee Letter.
3.5. Pro Rata Treatment and Application of Principal Payments.
With respect to the Revolving Credit Loans, each borrow-
ing by the Company from the Banks, any conversion of Revolving
Credit Loans from one interest rate basis to another, and any
reduction of the Aggregate Revolving Credit Commitments, shall be
made pro rata according to the Revolving Credit Commitments of each
Bank. All payments (including prepayments) made by the Company (or
deemed to be made pursuant to paragraph 11.9) to the Administrative
Agent on account of principal of or interest on the Revolving
Credit Loans or the Letters of Credit shall be made pro rata
according to the outstanding principal balance of each Bank's
Revolving Credit Loans, except that any payments of reimbursement
obligations made by the Company or a Bank in respect of a Letter of
Credit for which the Issuing Bank has not theretofore been reim-
bursed shall be for the account of the Issuing Bank. All payments
made by the Company to the Administrative Agent on account of
Revolving Credit Commitment Fees and the Letter of Credit Commis-
sions shall be made pro rata according to each Bank's Revolving
Credit Commitment. All payments made by the Company to the Admin-
istrative Agent on account of the Amendment Fee shall be made in
accordance with paragraph 3.3. All other payments made by the
Company in respect of fees, including, without limitation, the fees
described in the last sentence of paragraph 3.2, shall, except as
otherwise provided above, be payable to the Agents and the Issuing
Bank in accordance with the Fee Letter. All payments by the
Company shall be made without set-off or counterclaim and shall be
made prior to 1:00 P.M. (New York City time) on the date such
payment is due, to the Administrative Agent for the account of the
Banks at the Administrative Agent's office specified in paragraph
11.2, in each case in lawful money of the United States of America
and in immediately available funds, and, as between the Company and
the Banks, any payment by the Company to the Administrative Agent
for the account of the Banks shall be deemed to be payment by the
Company to the Banks. The failure of the Company to make any such
payment by 1:00 P.M. (New York City time) on such due date shall
not constitute a Default or Event of Default, provided that such
payment is made on such due date, but any such payment received by
the Administrative Agent on any Business Day after 1:00 P.M. (New
York City time) shall be deemed to have been received on the
immediately succeeding Business Day for the purpose of calculating
any interest payable in respect thereof. The Administrative Agent
agrees promptly to notify the Company if it shall not receive any
such payment by 1:00 P.M. (New York City time) on the due date
hereof, provided that the failure of the Administrative Agent to
give such prompt notice shall in no way affect the Company's
obligation to make any payment hereunder on the date such payment
is due. The Administrative Agent shall distribute such payments to
the Banks promptly upon receipt in like funds as received. If any
payment hereunder or on any Revolving Credit Note or in respect of
any Letter of Credit becomes due and payable on a day other than a
Business Day, the maturity thereof shall be extended to the next
succeeding Business Day (unless, in the case of Eurodollar Loans,
the result of such extension would be to extend such payment into
another calendar month, in which event such payment shall be made
on the immediately preceding Business Day) and, with respect to
payments of principal, interest thereon shall be payable at the
then applicable rate or rates during such extension.
4. REPRESENTATIONS AND WARRANTIES
In order to induce the Agents and the Banks to enter into this
Agreement and to make the Revolving Credit Loans, and the Issuing
Bank to issue Letters of Credit and the other Banks to participate
therein, the Company hereby makes the following representations and
warranties to the Agents and to each Bank:
4.1. Subsidiaries.
The Company has only the Subsidiaries and Material
Subsidiaries set forth on Schedule 4.1 (as such Schedule shall be
supplemented from time to time by the Company). The shares of each
such corporate Subsidiary (including any Material Subsidiary) owned
by the Company are duly authorized, validly issued, fully paid and
nonassessable and are owned free and clear of any Liens, except
Permitted Liens.
4.2. Corporate Existence and Power.
The Company and each Material Subsidiary is duly orga-
nized, validly existing and, except as set forth on Schedule 4.2,
in good standing under the laws of the jurisdiction of its incorpo-
ration or formation, has all requisite corporate power and authori-
ty to own its Property and to carry on its business as now conduct-
ed, and is in good standing and authorized to do business in each
jurisdiction in which the failure to be so authorized could reason-
ably be expected to have a Material Adverse Effect on the Company.
4.3. Corporate Authority.
The Company has full corporate power and authority to
enter into, execute, deliver and carry out the terms of the Loan
Documents to which it is a party and the transactions contemplated
hereby, to make the borrowings contemplated hereby, to execute,
deliver and carry out the terms of the Revolving Credit Notes and
to incur the obligations provided for herein and therein, all of
which have been duly authorized by all proper and necessary corpo-
rate action and do not conflict with its certificate of incorpora-
tion or by-laws.
4.4. Governmental Authority Approvals.
No consent, authorization or approval of, filing with,
notice to, or exemption by, the stockholders of the Company, any
Governmental Authority or any other Person (except for those which
have been obtained, made or given on or before the Second Restate-
ment Effective Date) is required to authorize, or is required in
connection with the execution, delivery and performance of the Loan
Documents or is required as a condition to the validity or enforce-
ability of the Loan Documents. No provision of any applicable
statute, law (including, without limitation, any applicable usury
or similar law), rule or regulation of any Governmental Authority
prevents the execution, delivery or performance of, or adversely
affects the validity of, the Loan Documents.
4.5. Binding Agreement.
The Loan Documents to which the Company is a party (other
than the Revolving Credit Notes) constitute, and the Revolving
Credit Notes, when issued and delivered pursuant hereto for value
received, will constitute, the valid and legally binding obliga-
tions of the Company enforceable against the Company in accordance
with their respective terms, except as such enforceability may be
limited by (i) applicable bankruptcy, insolvency, reorganization or
other similar laws affecting the enforcement of creditors' rights
generally and (ii) equitable principles.
4.6. Litigation.
Except as set forth in the Form 10-K filed by Enterprises
with the SEC with respect to its fiscal year ended December 26,
1993, there are no actions, suits, arbitration proceedings or
claims (whether or not purportedly on behalf of the Company, any
Material Subsidiary or Enterprises) pending or, to the knowledge of
the Company, threatened against the Company, any Material Subsid-
iary or Enterprises, or maintained by the Company, any Material
Subsidiary or Enterprises, at law or in equity, before any Govern-
mental Authority which could reasonably be expected to have a
Material Adverse Effect on the Company. Except as set forth in the
Form 10-K referred to above, there are no proceedings pending or,
to the knowledge of the Company, threatened against the Company,
any Material Subsidiary or Enterprises, which (i) call into ques-
tion the validity or enforceability of any of the Loan Documents,
(ii) have been brought or are threatened to be brought by the
Franchisor and which seek (or are expected to seek) to rescind,
terminate, revoke, cancel, withdraw, suspend or modify or withhold
any Franchise Agreement between the Company or a Material Subsid-
iary and the Franchisor, or any right of the Company or any Materi-
al Subsidiary thereunder or (iii) have been brought or are threat-
ened to be brought by any Person (other than the Franchisor) with
respect to any Franchise Agreement between the Company or a Materi-
al Subsidiary and the Franchisor or any right of the Company or any
Material Subsidiary thereunder which could reasonably be expected
to have a Material Adverse Effect on the Company.
4.7. No Conflicting Agreements.
Neither the Company nor any Material Subsidiary is in
default under any mortgage, indenture, contract, lease, Ground
Lease, agreement, judgment, decree or order to which it is a party
or by which it or any of its Property is bound, including, without
limitation, any Franchise Agreement, which defaults, taken as a
whole, could reasonably be expected to have a Material Adverse
Effect on the Company. The execution, delivery or performance of
the terms of the Loan Documents will not constitute a default
under, conflict with, require consent under, or result in the
creation and/or imposition of, or obligation to create, any Lien
upon the Property of the Company or any Material Subsidiary pursu-
ant to the terms of any such mortgage, indenture, contract, lease,
Ground Lease, agreement, judgment, decree or order, which defaults,
conflicts and consents, if not obtained, taken as a whole, could
reasonably be expected to have a Material Adverse Effect on the
Company.
4.8. Taxes.
The Company and each Material Subsidiary has filed or
caused to be filed all tax returns required to be filed and has
paid, or has made adequate provision for the payment of, all taxes
shown to be due and payable on said returns or in any assessments
made against it (other than those being contested in good faith
pursuant to paragraph 7.4) which would be material to the Company
or to the Company and its Material Subsidiaries taken as a whole,
and no tax Liens (other than any such constituting Permitted Liens)
have been filed. The charges, accruals and reserves on the books
of the Company and each Material Subsidiary with respect to all
federal, state, local and other taxes are, to the best knowledge of
the Company, adequate for the payment of all such taxes, and the
Company knows of no unpaid assessment which is due and payable
against it or any Material Subsidiary or any claims being asserted
which could reasonably be expected to have a Material Adverse
Effect on the Company, except such thereof as are being contested
in good faith and by appropriate proceedings diligently conducted,
and for which adequate reserves have been set aside in accordance
with GAAP.
4.9. Compliance with Applicable Laws.
Neither the Company nor any Material Subsidiary is in
default with respect to any judgment, order, writ, injunction,
decree or decision of any Governmental Authority which default
could reasonably be expected to have a Material Adverse Effect on
the Company. The Company and each Material Subsidiary is complying
in all material respects with all statutes and regulations applica-
ble to Company or such Material Subsidiary, including ERISA, of all
Governmental Authorities, a violation of which could reasonably be
expected to have a Material Adverse Effect on the Company.
4.10. Governmental Regulations.
Neither the Company nor any Material Subsidiary is
subject to regulation under the Public Utility Holding Company Act
of 1935, the Federal Power Act or the Investment Company Act of
1940, and neither the Company nor any Material Subsidiary is
subject to any statute or regulation which prohibits or restricts
the incurrence of Indebtedness under this Agreement or the Revolv-
ing Credit Notes, including, without limitation, statutes or
regulations relative to common or contract carriers or to the sale
of electricity, gas, steam, water, telephone, telegraph or other
public utility services.
4.11. Property.
Each of the Company and each of its Material Subsidiar-
ies has good and marketable title to, or a valid license or lease-
hold interest in, all Property which is material to the Company or
the Company and its Material Subsidiaries taken as a whole, subject
to no Liens, except Permitted Liens, and in respect of such lease-
holds the Company or such Material Subsidiary is in quiet and
undisturbed possession, and, to the best of the Company's knowl-
edge, no Property material (i) to the Company or (ii) the Company
and its Material Subsidiaries taken as a whole is being condemned,
expropriated or otherwise taken by any Governmental Authority, with
or without compensation therefor, and, to the best of the Company's
knowledge, no such condemnation, expropriation or taking has been
proposed. As of the date of this Agreement, the Company owns only
the real Property described on Part A of Schedule 4.11 and has a
valid leasehold interest in only the real Property covered by the
Leases as set forth on Part B of Schedule 4.11.
4.12. Federal Reserve Regulations; Use of Loan Proceeds.
Neither the Company nor any Material Subsidiary is
engaged principally, or as one of its important activities, in the
business of extending credit for the purpose of purchasing or
carrying any Margin Stock. No part of the proceeds of the Revolv-
ing Credit Loans or any Letter of Credit will be used, directly or
indirectly, for a purpose which violates any law, rule or regula-
tion of any Governmental Authority, including, without limitation,
the provisions of Regulations G, U or X of the Board of Governors
of the Federal Reserve System, as amended. Margin Stock consti-
tutes less than 25% of the assets (as determined by any reasonable
method) of the Company and/or any of its Material Subsidiaries.
4.13. Franchise Agreements.
The Franchise Agreements listed on Schedule 4.13 (as
such Schedule shall be supplemented from time to time by the
Company) are all of the Franchise Agreements to which the Company
or any Subsidiary is a party, each such Franchise Agreement is in
full force and effect and neither the Company nor any Subsidiary
has breached or is or may be in default, whether after notice, the
lapse of time or both, of any condition or obligation of any such
Franchise Agreements other than in respect of immaterial breaches
or defaults which the Company is using its best efforts to remedy
as soon as practicable after the occurrence thereof. The Company
has obtained waivers of, or has budgeted for compliance with, all
obligations to develop properties, open stores or similar obliga-
tions during the Company's 1995 fiscal year under those Franchise
Agreements which impose the same.
4.14. No Misrepresentation.
No representation or warranty contained herein and no
certificate or report furnished or to be furnished by the Company
in connection with the transactions contemplated hereby, contains
or will contain a misstatement of material fact, or, to the best
knowledge of the Company, omits or will omit to state a material
fact required to be stated in order to make the statements herein
or therein contained not misleading in the light of the circum-
stances under which made.
4.15. Plans; Multiemployer Plans.
The Company and each Material Subsidiary have only the
Plans listed on Schedule 4.15 (as such Schedule may be supplemented
from time to time to reflect the adoption of Plans permitted to be
adopted pursuant to paragraph 8.10). Each Single Employer Plan
and, to the best knowledge of the Company, each Multiemployer Plan
is in compliance in all material respects with the applicable
provisions of ERISA and the Code, and the Company and each Material
Subsidiary have complied in all material respects with ERISA and
the Code with respect to each such Plan. The Company and each
Material Subsidiary have met all material requirements imposed by
ERISA and the Code with respect to the funding of all Plans, and,
to the best of the knowledge of the Company, Multiemployer Plans.
Since the effective date of ERISA, there have not been, nor are
there now existing, any events or conditions which would permit any
Single Employer Plan or, to the best knowledge of the Company,
Multiemployer Plan to be terminated under circumstances which would
cause the Lien provided under Section 4068 of ERISA to attach to
the Property of the Company or any Material Subsidiary. No Report-
able Event which could reasonably be expected to constitute grounds
for the termination of any Single Employer Plan or, to the best
knowledge of the Company, Multiemployer Plan under Title IV of
ERISA has occurred.
4.16. Burdensome Obligations.
Neither the Company nor any Material Subsidiary is a
party to or bound by any franchise, agreement, deed, lease or other
instrument (other than the Franchise Agreements and the Leases), or
subject to any corporate restriction which has or may have, in the
context of the Company's or such Material Subsidiary's business, a
Material Adverse Effect on the Company or materially and adversely
affect or impair the revenue of the Company or any Material Subsid-
iary or the ability of the Company to perform its obligations under
the Loan Documents.
4.17. Financial Statements.
The Company or Enterprises, as the case may be, has
heretofore delivered to the Agents and the Banks (i) copies of
Enterprises' Form 10-K for the fiscal year of Enterprises ending
December 26, 1993, containing the audited consolidated Balance
Sheet of Enterprises and its Subsidiaries as of December 26, 1993
and December 31, 1992, and the related consolidated Statements of
Operations, Cash Flows and Shareholder's Equity for the periods
then ended, (ii) Enterprises' Form 10-Q for the thirteen week
period ended October 2, 1994, containing the unaudited consolidated
Balance Sheet of Enterprises and its Subsidiaries for such thirteen
week period, together with the related Statements of Earnings and
Cash Flows for the thirteen week period then ended, (iii) copies of
the unaudited Consolidated Balance Sheet of the Company and its
Subsidiaries as of December 26, 1993 and December 27, 1992, and the
related unaudited Consolidated Statements of Operations, Cash Flows
and Shareholder's Equity for the periods then ended and (iv) copies
of the unaudited Consolidated Balance Sheet of the Company and its
Subsidiaries for the thirteen week period ended October 2, 1994,
containing the unaudited Consolidated Balance Sheet of the Company
and its Subsidiaries for such thirteen week period, together with
the related Statements of Earnings and Cash Flows for the thirteen
week period then ended (with the related notes and schedules, the
"Financial Statements"). The Financial Statements fairly present
the Consolidated financial condition and results of the operations
of Enterprises and its Subsidiaries or the Company and its Subsid-
iaries, as the case may be, as of the dates and for the periods
indicated therein and have been prepared in conformity with GAAP.
Except as reflected in the Financial Statements or in the footnotes
thereto, neither the Enterprises nor any of its Subsidiaries has
any obligation or liability of any kind (whether fixed, accrued,
contingent, unmatured or otherwise) which, in accordance with GAAP,
should have been shown in the Financial Statements and was not.
Since December 26, 1993, (i) Enterprises and each of its Subsidiar-
ies and (ii) the Company and each of its Subsidiaries has conducted
its respective business only in the ordinary course and there has
been no Material Adverse Change other than as disclosed in those
filings by Enterprises with the SEC prior to the Second Restatement
Effective Date pursuant to the Exchange Act, copies of which
filings were delivered prior to such date to the Agents and the
Banks.
4.18. Concerning the Leases.
The Leases are valid and subsisting leases of the real
Property described therein and purported to be demised thereunder
for the terms therein set forth and are in full force and effect in
accordance with the terms, conditions and provisions thereof, and,
except as indicated on Schedule 4.11, have not been modified or
amended in any way whatsoever. There are no existing defaults or
events, which with the passing of time or the provisions of notice,
or both, would constitute a default or an event of default on the
part of the Company under any Lease which could reasonably be
expected to result in the termination of such Lease. The Company
and, as set forth on Schedule 4.11, the Material Subsidiaries are
the owners and holders of the Leases and of the leasehold estates
created thereby.
4.19. Environmental Matters.
Neither the Company nor any Material Subsidiary (i) has
received notice or otherwise learned of any claim, demand, action,
event, condition, report or investigation indicating or concerning
any potential or actual liability which individually or in the
aggregate could reasonably be expected to have a Material Adverse
Effect on the Company arising in connection with: (a) any non-
compliance with or violation of the requirements of any applicable
Hazardous Material Law or other federal, state and local environ-
mental health and safety statutes and regulations or (b) the
release or threatened release of any Hazardous Material into the
environment, (ii) to the best knowledge of the Company, has any
threatened or actual liability in connection with the release or
threatened release of any Hazardous Material into the environment
which individually or in the aggregate could reasonably be expected
to have a Material Adverse Effect on the Company, (iii) has re-
ceived notice of any federal or state investigation evaluating
whether any remedial action is needed to respond to a release or
threatened release of any Hazardous Material into the environment
for which the Company or any Material Subsidiary is or may be
liable which liability, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect on the
Company, or (iv) has received notice that the Company or any
Material Subsidiary is or may be liable to any Person under any
Hazardous Material Law. The Company and each Material Subsidiary
is in compliance in all material respects with the financial
responsibility requirements of federal and state environmental laws
to the extent applicable thereto, including, without limitation,
all Hazardous Material Laws and those contained in 40 C.F.R., parts
264 and 265, subpart H, and any analogous state law.
4.20. Security Interests.
(a) With respect to Ground Leases and Building Leases in
which the Collateral Agent was granted a security interest prior to
the Second Restatement Effective Date, the security interests
granted under the Mortgages with respect thereto constitute valid,
binding and continuing duly perfected first priority Liens in and
to such Ground Leases or Building Leases, as the case may be,
except for Permitted Liens.
(b) With respect to the Pledged Collateral, assuming the
continuing possession by the Collateral Agent of such Collateral,
the security interests granted under the Enterprises Guaranty and
the Security Agreement constitute valid, binding and continuing
duly perfected first priority Liens in and to the Pledged Collater-
al, except for Permitted Liens.
(c) Assuming the continued dominion and control by the
Collateral Agent of the account in which the Cash Collateral is
held, the security interest granted under the Security Agreement in
the Cash Collateral will constitute valid, binding and continuing
duly perfected security interests in and to the Cash Collateral.
(d) Intentionally Omitted.
(e) With respect to real Property owned by the Company,
in which the Collateral Agent was granted a security interest prior
to the Second Restatement Effective Date, the security interests
granted under the Mortgages with respect thereto constitute valid,
binding and continuing duly perfected first priority Liens in and
to such real Property, except for Permitted Liens.
(f) With respect to real Property owned by the Company,
in which security interests are granted in accordance with the
provisions of paragraph 7.16, subject to the recording of Mortgages
with respect thereto and the filing, if applicable, of UCC-1
Financing Statements, in the appropriate governmental offices, such
security interests will constitute valid, binding and continuing
duly perfected first priority Liens therein, except for Permitted
Liens.
4.21. Status as Senior Indebtedness.
The Indebtedness of the Company under the Loan Documents
constitutes (i) "Senior Indebtedness of the Guarantor" as defined
in the Enterprises Subordinated Indenture and (ii) Senior Debt as
defined in the Debenture Purchase Agreement. The Indebtedness of
Enterprises under the Enterprises Guaranty constitutes (i) "Senior
Indebtedness of the Company" as defined in the Enterprises Subordi-
nated Indenture and (ii) "Senior Debt" as defined in the Debenture
Purchase Agreement.
5. CONDITIONS TO EFFECTIVENESS AND TO REVOLVING CREDIT LOANS
OR LETTERS OF CREDIT ISSUED ON THE RESTATEMENT EFFECTIVE DATE.
In addition to the conditions precedent set forth in
paragraph 6, the effectiveness of this Agreement, the obligation of
each Bank to make any Revolving Credit Loan or the Issuing Bank to
issue a Letter of Credit on the Second Restatement Effective Date
and the Banks to participate therein shall be subject to the
fulfillment of the following conditions precedent:
5.1. Evidence of Corporate Action.
(a) The Company. The Agents shall have received a
certificate, dated the Second Restatement Effective Date, of the
Secretary or Assistant Secretary of the Company (i) attaching a
true and complete copy of the resolutions of its Board of Directors
and of all documents evidencing other necessary corporate action
(in form and substance satisfactory to the Agents and to Special
Counsel) taken by it to authorize the Transaction Documents to
which it is a party and the transactions contemplated thereby, (ii)
certifying that there have been no amendments to its certificate of
incorporation and by-laws since June 3, 1993 or, if so, setting
forth the same, (iii) setting forth the incumbency of its officer
or officers who may sign the Transaction Documents to which it is a
party, including therein a signature specimen of such officer or
officers and (iv) attaching a certificate of good standing of the
Secretary of State of the State of Tennessee and of each other
state in which it is qualified to do business, together with such
other documents as the Agents or Special Counsel shall reasonably
require.
(b) Enterprises. The Agents shall have received a
certificate, dated the Second Restatement Effective Date, of the
Secretary or Assistant Secretary of Enterprises (i) attaching a
true and complete copy of the resolutions of its Board of Directors
and of all documents evidencing other necessary corporate action
(in form and substance satisfactory to the Agents and to Special
Counsel) taken by it to authorize the Transaction Documents to
which it is a party and the transactions contemplated thereby, (ii)
certifying that there have been no amendments to its certificate of
incorporation and by-laws since June 3, 1993 or, if so, setting
forth the same, (iii) setting forth the incumbency of its officer
or officers who may sign the Transaction Documents to which it is a
party, including therein a signature specimen of such officer or
officers and (iv) attaching a certificate of good standing of the
Secretary of State of the State of New Jersey and of each other
jurisdiction in which it is qualified to do business, together with
such other documents as the Agents or Special Counsel shall reason-
ably require.
5.2. Amendment No. 2 to the Enterprises Guaranty.
The Agents shall have received Amendment No. 2 to the
Enterprises Guaranty, substantially in the form of Exhibit D, duly
executed by an Authorized Signatory of Enterprises.
5.3. Security Amendment.
The Agents shall have received the Security Agreement,
duly executed by an Authorized Signatory of the Company.
5.4. Approvals.
The Agents shall have a certificate of an Authorized
Signatory of each of the Company and Enterprises to the effect that
all approvals and consents of all Persons required to be obtained
in connection with the consummation of the transactions contemplat-
ed by the Loan Documents have been given and all required waiting
periods have expired.
5.5. Litigation.
There shall be no injunction, writ, preliminary restrain-
ing order or other order of any nature issued by any Governmental
Authority in any respect affecting the transactions contemplated by
the Loan Documents, and no action or proceeding by or before any
Governmental Authority shall have been commenced and be pending or,
to the knowledge of the Company, threatened, seeking to prevent or
delay the transactions contemplated by the Loan Documents, or
challenging any other terms or provisions thereof or seeking any
damages in connection therewith which, in the reasonable judgment
of the Banks, is reasonably likely to have a Material Adverse
Effect on the Company or a Material Adverse Effect on Enterprises,
and the Agents shall have received a certificate of an Authorized
Signatory of each of the Company and Enterprises to the foregoing
effects.
5.6. Compliance.
The Agents shall have received certificates of an Autho-
rized Signatory of each of the Company and Enterprises to the
effect that (i) each of the Company and Enterprises is in compli-
ance with all of the terms, covenants and conditions of the Loan
Documents to which it is a party, (ii) except with respect to the
Defaults waived under Amendment No. 3 and Waiver No. 5, dated as of
December 23, 1994, to the First Restated Agreement, there exists no
Default or Event of Default and (iii) since December 26, 1993,
there shall have occurred no Material Adverse Change with respect
to the Company or Enterprises other than as disclosed in those
filings by Enterprises with the SEC prior to the Second Restatement
Effective Date pursuant to the Exchange Act, copies of which
filings were delivered prior to such date to the Agents and the
Banks.
5.7. Opinions of Counsel to the Company and Enterprises.
The Agents shall have received opinions of (i) Skadden,
Arps, Slate, Meagher & Flom, special counsel to the Company and
Enterprises, substantially in the form of Exhibit G-1, (ii) Shanley
& Fisher, P.C., special New Jersey counsel to Enterprises, substan-
tially in the form of Exhibit G-2 and (iii) Glankler Brown, special
Tennessee counsel to the Company, substantially in the form of
Exhibit G-3, in each case addressed to the Agents and the Banks and
dated the Second Restatement Effective Date.
5.8. Opinion of Special Counsel to the Agents.
The Agents shall have received an opinion of Special
Counsel substantially in the form of Exhibit H, addressed to the
Agents and the Banks and dated the Second Restatement Effective
Date.
5.9. Amendment Fee.
The Amendment Fee shall have been paid.
5.10. Fees and Expenses of Special Counsel.
The reasonable fees and expenses of Special Counsel
shall have been paid.
5.11. Other Documents.
The Agents shall have received such other documents and
assurances as the Agents shall reasonably require.
6. CONDITIONS OF LENDING - ALL LOANS AND LETTERS OF CREDIT.
The obligation of each Bank to make any Revolving Credit Loan
or the Issuing Bank to issue any Letter of Credit on a Borrowing
Date and the Banks to participate therein shall be subject to the
satisfaction of the following conditions precedent as of the date
of such Revolving Credit Loan or the date of the issuance of such
Letter of Credit, as the case may be:
6.1. Compliance.
On each Borrowing Date and after giving effect to the
Revolving Credit Loans to be made or the Letter of Credit to be
issued thereon, (a) there shall exist no Default or Event of
Default, (b) the representations and warranties of the Company and
Enterprises contained in the Loan Documents and in any certificate,
report, or other information furnished in connection with the
transactions contemplated hereby (other than the Environmental
Questionnaires, the Leases, and the Franchise Agreements), shall be
true and correct in all material respects with the same effect as
though such representations and warranties had been made on such
Borrowing Date, and (c) after giving effect to the transactions
contemplated by the Loan Documents, there shall have occurred no
Material Adverse Change with respect to the Company since December
26, 1993 other than as disclosed in those filings by Enterprises
with the SEC prior to the Second Restatement Effective Date pursu-
ant to the Exchange Act, copies of which filings were delivered
prior to such date to the Agents and the Banks. Each borrowing by
the Company and each request by the Company for the issuance of a
Letter of Credit shall constitute a certification by the Company as
of the date of such borrowing that each of the foregoing matters is
true and correct in all respects.
6.2. Loan Closings.
All documents required by the provisions of this Agree-
ment to be executed or delivered to the Agents on or before the
applicable Borrowing Date shall have been executed and shall have
been delivered at the office of the Administrative Agent set forth
in paragraph 11.2 on or before such Borrowing Date.
6.3. Borrowing Request.
With respect to the borrowing of each Loan, the Adminis-
trative Agent shall have received a Borrowing Request duly executed
by an Authorized Signatory of the Company.
6.4. Letter of Credit Request.
With respect to the issuance of each Letter of Credit,
the Issuing Bank shall have received a Letter of Credit Request
duly executed by an Authorized Signatory of the Company.
6.5. Required Acts and Conditions.
All acts, conditions and things (including, without
limitation, the obtaining of any necessary regulatory approvals and
the making of any required filings, recordings or registrations)
required to be done, performed and to have happened prior to such
Borrowing Date and which are necessary for the continued effective-
ness of the Loan Documents, shall have been done and performed and
shall have happened in due compliance with all applicable laws.
6.6. Other Documents.
The Agents shall have received such other documents,
certificates of the Company, any Governmental Authority or any
other Person and opinions as the Agents, on behalf of any Bank,
shall reasonably request, including, without limitation, favorable
supplementary opinions of counsel to the Company or Enterprises,
addressed to the Agents and the Banks, covering such matters
incident to the transactions contemplated herein.
7. AFFIRMATIVE COVENANTS.
The Company hereby agrees that, so long as this Agreement
is in effect, any Revolving Credit Loan or reimbursement obligation
(contingent or otherwise) in respect of any Letter of Credit
remains outstanding and unpaid, or any other amount is owing under
any Loan Document, the Company shall:
7.1. Financial Statements.
Maintain, and cause each Material Subsidiary to maintain,
a standard system of accounting in accordance with GAAP, and
furnish or cause to be furnished to the Agents and each Bank:
(a) As soon as available, but in any event within 90
days after the end of each fiscal year of the Company, a copy of
(i) the Consolidated Balance Sheet of the Company and its Subsid-
iaries as at the end of such fiscal year and (ii) the Consolidated
Statements of Operations, Shareholders' Equity and Cash Flows of
the Company and its Subsidiaries as of and through the end of such
fiscal year, setting forth in each case in comparative form the
figures for the preceding fiscal year. Such Consolidated financial
statements shall be certified by a senior financial officer or
senior accounting officer of the Company (or such other officer as
shall be acceptable to the Agents) as (i) having been prepared in
accordance with GAAP on a consistent basis with the previous fiscal
year, (ii) being complete and correct in all material respects and
(iii) presenting fairly the Consolidated financial condition and
results of operations of the Company and its Subsidiaries. In
addition, during any fiscal year of the Company in which a Material
Subsidiary exists, the Company shall deliver Consolidating Balance
Sheets of the Company and each Material Subsidiary as at the end of
such fiscal year and the Consolidating Statements of Operations,
Shareholders' Equity and Cash Flows of the Company and each Materi-
al Subsidiary as of and through the end of such fiscal year,
setting forth in each case in comparative form the figures for the
preceding fiscal year.
(b) As soon as available, but in no event later than 45
days after the end of each of the first three quarterly accounting
periods in each fiscal year of the Company a copy of (i) the
unaudited Consolidated Balance Sheet of the Company and its Subsid-
iaries as at the end of each such quarterly period and (ii) the
unaudited Consolidated Statements of Operations, Shareholders'
Equity and Cash Flows for such period and for the elapsed portion
of the fiscal year through such date, setting forth in each case in
comparative form the figures for the corresponding periods of the
preceding fiscal year, subject to year end audit adjustments,
certified by a senior financial officer or senior accounting
officer of the Company (or such other officer acceptable to the
Agents) as being complete and correct in all material respects and
as presenting fairly the financial condition and results of opera-
tions and cash flows of the Company and its Subsidiaries on a
Consolidated basis. In addition, during any fiscal year of the
Company in which a Material Subsidiary exists, the Company shall
deliver Consolidating Balance Sheets of the Company and each
Material Subsidiary as at the end of such quarter and the Consoli-
dating Statements of Operations, Shareholders' Equity and Cash
Flows of the Company and each Material Subsidiary for such period
and for the elapsed portion of the fiscal year through such date,
setting forth in each case in comparative form the figures for the
corresponding periods of the preceding fiscal year, subject to year
end audit adjustments.
(c) Within 45 days after the end of the first three
fiscal quarters of the Company, (90 days after the end of the
fourth fiscal quarter), a Compliance Certificate, each certified by
the Chief Financial Officer of the Company (or such other officer
as shall be acceptable to the Agents).
(d) As soon as available, but in no event later than 21
days after the end of each four week period, copies of management
reports for such period describing sales, profits and cash flows at
the store, region, division and Company levels, such report to be
in a form reasonably acceptable to the Agents and Required Banks.
7.2. Certificates; Other Information.
Furnish to the Agents and each Bank:
(a) Prompt written notice if: (i) any Indebtedness of
the Company or any Material Subsidiary in an aggregate Consolidated
amount in excess of $500,000 is declared or shall become due and
payable prior to its stated maturity, or is called and not paid
when due, (ii) a default shall have occurred under any note or
other evidence of Indebtedness of the Company or any Material
Subsidiary (other than the Revolving Credit Notes) in an aggregate
Consolidated amount in excess of $500,000, or the holder of any
such note or other evidence of Indebtedness or any obligee with
respect to such Indebtedness has the right to declare any such
Indebtedness due and payable prior to its stated maturity as a
result of such default, or (iii) there shall occur and be continu-
ing a Default or an Event of Default;
(b) Prompt written notice of: (i) any citation, summons,
subpoena, order to show cause or other order naming the Company or
any Material Subsidiary a party to any proceeding before any
Governmental Authority which could reasonably be expected to have a
Material Adverse Effect on the Company or a Material Adverse Effect
on Enterprises or which calls into question the validity or en-
forceability of any of the Loan Documents or the Registration
Statement, and include with such notice a copy of such citation,
summons, subpoena, order to show cause or other order, (ii) any
lapse or other termination (other than in accordance with its
terms) of any license, permit, franchise or other authorization
issued to the Company or any Material Subsidiary by any Governmen-
tal Authority, which lapse or termination could reasonably be
expected to have a Material Adverse Effect on the Company or a
Material Adverse Effect on Enterprises, (iii) any refusal by any
Governmental Authority to renew or extend any such license, permit,
franchise or other authorization, which refusal could reasonably be
expected to have a Material Adverse Effect on the Company or a
Material Adverse Effect on Enterprises, (iv) any lapse or other
termination (other than in accordance with its terms) of any
Franchise Agreement to which the Company or any Material Subsidiary
is a party and (v) any dispute between the Company or any Material
Subsidiary and any Governmental Authority, which dispute could
reasonably be expected to have a Material Adverse Effect on the
Company or a Material Adverse Effect on Enterprises;
(c) Promptly upon becoming available, copies of all
financial statements, reports, proxy statements, registration
statements and prospectuses which the Company or any Material
Subsidiary may from time to time be required to file with or
deliver to the SEC or any national securities exchange;
(d) Prompt written notice in the event that (i) the
Company or any Material Subsidiary shall receive notice from the
Internal Revenue Service or the Department of Labor that the
Company or such Material Subsidiary shall have failed to meet the
minimum funding requirements of Section 412 of the Code with
respect to a Plan or a Multiemployer Plan, if applicable, and
include therewith a copy of such notice, or (ii) the Company or any
Material Subsidiary gives or is required to give notice to the PBGC
of any Reportable Event with respect to a Plan, or knows that the
plan administrator of a Plan or a Multiemployer Plan has given or
is required to give notice of any such Reportable Event;
(e) With respect to a Single Employer Plan, copies of
any request for a waiver of the funding standards or any extension
of the amortization periods required by Sections 303 and 304 of
ERISA or Section 412 of the Code promptly after any such request is
submitted to the Department of Labor or the Internal Revenue
Service, as the case may be;
(f) Prompt written notice if a Subsidiary becomes a
Material Subsidiary;
(g) Prompt written notice if a Change in Control occurs,
including, without limitation, copies of all notices related
thereto given to the Trustee of the Enterprises Subordinated
Indenture and/or to the Designated Debenture Holder under the
Debenture Purchase Agreement with respect thereto;
(h) Prompt written notice of the occurrence of a default
or event of default under and as defined in the Enterprises Subor-
dinated Indenture or the Debenture Purchase Agreement, together
with all notices with respect thereto sent by the Company to, or
received by the Company from, the Trustee or any holder of Enter-
prises Subordinated Debentures or the Designated Debenture Holder
under the Debenture Purchase Agreement;
(i) Written notice within ten days after receipt of any
notice of any default or event of default given by any lessor or
landlord, as the case may be, under any Lease together with the
original or photostatic copy of such notice and (x) if such default
shall have been cured by such time, reasonable proof of the cure
thereof and (y) if such default shall not have been cured by such
time, (A) an explanation of the action which the Company or such
Material Subsidiary proposes to take to cure such default and (B)
when such default has been cured, reasonable proof thereof;
(j) Prompt written notice of (i) any governmental or
regulatory actions instituted or threatened under any Hazardous
Material Law affecting any real Property owned or leased by the
Company or any Material Subsidiary of which the Company becomes
aware or the matters for which the Company indemnifies the Agents
and the Banks under the Environmental Indemnity Agreement, includ-
ing, without limitation, any notice of inspection, abatement or
noncompliance, (ii) all claims made or threatened by any third
party against the Company or such Property of which the Company
becomes aware relating to damage, contribution, cost recovery,
compensation, loss or injury resulting from any Hazardous Material,
(iii) the Company's discovery of any occurrence or conditions on
any real Property adjoining or in the vicinity of such Property
which could reasonably be expected to cause such Property to be
classified in a manner which may support a claim under any Hazard-
ous Material Law, and (iv) the Company's discovery of any occur-
rence or condition on such Property or any real property adjoining
or in the vicinity of such Property which could reasonably be
expected to subject the Company, a Material Subsidiary or such
Property to any restrictions on ownership, occupancy, transferabil-
ity or use of such Property under any Hazardous Material Law;
(k) Promptly, (i) such documentation, records or other
information as the Agents may reasonably request in connection with
all notices, inquiries and communications received in respect of
matters described in clause (j) above and (ii) information concern-
ing subsequent developments on any matter disclosed to the Agents
pursuant to clause (j) above; and
(l) Promptly, such other information as the Agents or
any Bank may reasonably request.
7.3. Legal Existence.
Maintain, and cause each Material Subsidiary to maintain,
its corporate existence, and maintain its good standing in the
jurisdiction of its incorporation or organization and in each other
jurisdiction in which the failure so to do could reasonably be
expected to have a Material Adverse Effect on the Company or a
Material Adverse Effect on Enterprises.
7.4. Taxes.
Pay and discharge when due, and cause each Material
Subsidiary so to do, all taxes, assessments and governmental
charges, license fees and levies upon or with respect to the
Company or such Material Subsidiary and upon the income, profits
and Property of the Company and its Material Subsidiaries, which if
unpaid, could reasonably be expected to have a Material Adverse
Effect on the Company or a Material Adverse Effect on Enterprises
or become a Lien on the Property of the Company or such Material
Subsidiary other than a Permitted Lien, unless and to the extent
that such taxes, assessments, charges, license fees and levies
shall be contested in good faith and by appropriate proceedings
diligently conducted by the Company or such Material Subsidiary and
provided that any such contested tax, assessment, charge, license,
fee or levy shall not constitute, or create, a Lien on any Property
of the Company or such Material Subsidiary other than a Permitted
Lien, and further provided that the Company shall give the Adminis-
trative Agent prompt notice of any such contest and that such
reserve or other appropriate provision if any, as shall be required
by the Accountants, in accordance with GAAP shall have been made
therefor.
7.5. Insurance.
Maintain, and cause each Material Subsidiary to maintain,
insurance on its Property against such risks and in such amounts as
is customarily maintained by similar businesses, and as it relates
to the Ground Leases and Building Leases, not less than the amounts
required for insurance under the Ground Leases and Building Leases
including, without limitation, public liability and workers'
compensation insurance, and file with the Administrative Agent
within five days after request therefor a detailed list of such
insurance then in effect, stating the names of the carriers there-
of, the policy numbers, the insureds thereunder, the amounts of
insurance, dates of expiration thereof, and the Property and risks
covered thereby, and stating that no notice of cancellation with
respect thereto has been received.
7.6. Performance of Obligations.
Pay and discharge, and cause each Material Subsidiary to
pay and discharge, when due all lawful obligations and claims for
labor, materials and supplies or otherwise which, if unpaid, could
reasonably be expected to (i) have a Material Adverse Effect on the
Company or a Material Adverse Effect on Enterprises or (ii) become
a Lien upon Property of the Company or such Material Subsidiary
other than a Permitted Lien, unless and to the extent that the
validity of such obligation or claim shall be contested in good
faith and by appropriate proceedings diligently conducted by the
Company or such Material Subsidiary, and further provided that the
Company shall give the Agents and the Banks prompt notice of any
such contest which involves a Lien on any Property and that such
reserve or other appropriate provision as shall be required by the
Accountants, if any, in accordance with GAAP shall have been made
therefor.
7.7. Condition of Property.
At all times, maintain, protect and keep in good repair,
working order and condition (ordinary wear and tear excepted), and
cause each Material Subsidiary so to do, all Property necessary to
the operation of the Company's, or such Material Subsidiary's,
business, except that the Company need not so maintain, protect and
keep in good repair, working order and condition any restaurants
being closed or relocated, so long as the failure to so maintain,
protect and keep in good repair, working order and condition in
connection with any such restaurants (i) could not reasonably be
expected to have a Material Adverse Effect on the Company or a
Material Adverse Effect on Enterprises or (ii) will not result in
the rescission, termination, revocation, cancellation, withdrawal,
suspension, modification or withholding of any Franchise Agreement
between the Company or a Material Subsidiary and the Franchisor or
any right of the Company or any Material Subsidiary thereunder
(other than the Franchise Agreement for a restaurant being closed
and not relocated).
7.8. Observance of Legal Requirements.
Observe and comply in all respects, and cause each
Material Subsidiary so to do, with all laws (including without
limitation, ERISA and environmental laws and health and sanitary
laws), ordinances, orders, judgments, rules, regulations, certifi-
cations, franchises, permits, licenses, directions and requirements
of all Governmental Authorities, which now or at any time hereafter
may be applicable to the Company or such Material Subsidiary, a
violation of which could reasonably be expected to have a Material
Adverse Effect on the Company or a Material Adverse Effect on
Enterprises, except such thereof as shall be contested in good
faith and by appropriate proceedings diligently conducted by the
Company or such Material Subsidiary, provided that the Company
shall give the Agents and the Banks prompt notice of such contest
and that such reserve or other appropriate provision, if any, as
shall be required by the Accountants in accordance with GAAP shall
have been made therefor.
7.9. Inspection of Property; Books and Records; Discussions.
Keep proper books of record and account in which full,
true and correct entries in conformity with GAAP and all require-
ments of law shall be made of all dealings and transactions in
relation to its business and activities; and permit representatives
of the Agents and any Bank to visit the offices of the Company and
its Material Subsidiaries, to inspect any of its Property and
examine and make copies or abstracts from any of its books and
records at any reasonable time and as often as may reasonably be
desired, and to discuss the business, operations, prospects,
licenses, Property and financial condition of the Company and its
Material Subsidiaries with the officers thereof and with the
Accountants; provided, however that the expenses of any such visit,
inspection and copying after the occurrence and during the continu-
ance of a Default or Event of Default shall be paid by the Company.
7.10. Licenses, Franchise Agreements, Etc.
Maintain and cause each Material Subsidiary to maintain,
in full force and effect, all licenses, Franchise Agreements,
copyrights, trade marks, tradenames, patents, permits, applica-
tions, reports, authorizations and other rights and intellectual
property, including, without limitation, the Franchise Agreements,
as are necessary for the conduct of its business, the loss of
which, individually or in the aggregate, would have a Material
Adverse Effect on the Company or a Material Adverse Effect on
Enterprises.
7.11. Interest Coverage Ratio.
Maintain as of the last day of each fiscal quarter of the
Company during the fiscal years of the Company set forth below, an
Interest Coverage Ratio of not less than the following:
Fiscal Quarter/Year Ratio
Fourth quarter, 1994 1.50:1.00
First quarter, 1995 1.40:1.00
Second quarter, 1995 1.30:1.00
Third quarter, 1995 1.35:1.00
Fourth quarter, 1995
and thereafter 1.50:1.00.
7.12. Senior Debt Service Coverage Ratio.
Maintain as of the last day of each fiscal quarter of the
Company during the fiscal years of the Company set forth below, a
Senior Debt Service Coverage Ratio of not less than the following:
Fiscal Quarter/Year Ratio
Fourth quarter, 1994 0.20:1.00
First quarter, 1995 0.20:1.00
Second quarter, 1995 0.15:1.00
Third quarter, 1995 0.15:1.00
Fourth quarter, 1995
and thereafter 0.20:1.00.
7.13. Intentionally Omitted.
7.14. Minimum Consolidated Tangible Net Worth.
Maintain as of the last day of each fiscal quarter of
the Company during the fiscal years of the Company set forth below,
Consolidated Tangible Net Worth of not less than the amounts set
forth below:
Fiscal Quarter/Year Amount
Fourth quarter, 1994 $26,000,000
First quarter, 1995 $28,000,000
Second quarter, 1995 $27,500,000
Third quarter, 1995 $26,500,000
Fourth quarter, 1995
and thereafter $26,000,000.
7.15. Intentionally Omitted.
7.16. Additional Security.
(a) Deliver with respect to each parcel of real Property
owned by the Company and listed on Schedule 7.16, (i) a Mortgage,
duly executed by an Authorized Signatory of the Company, as soon as
practicable after the Second Restatement Effective Date and no
later than seven Business Days after receipt of an execution copy
thereof and (ii) as soon as practicable after the Second Restate-
ment Effective Date but in no event later than May 31, 1995, with
respect to each such Mortgage a title insurance policy, title
searches, opinions of counsel, surveys, a completed Environmental
Questionnaire, UCC-1 Financing Statements and other documents, in
each case as may be reasonably requested by the Collateral Agent at
the direction of Required Banks and which shall be in form and
substance satisfactory to the Agents. Notwithstanding the forego-
ing, in the event that after a review of an Environmental Question-
naire, a Phase I audit, title report or other information required
to be delivered hereunder with respect to a parcel of Property, the
Agents and Required Banks decide not to take a Mortgage on such
parcel, the Collateral Agent shall, as directed by Required Banks,
designate another parcel of Property of roughly equivalent value as
a substitute parcel and the Company shall deliver a Mortgage and
the other documents referred to in the first sentence of this
subparagraph with respect to such substitute parcel of Property.
In the event that the Collateral Agent wishes to substitute a
parcel of Property for a parcel on which a Mortgage has already
been recorded, such Mortgage shall be released at the time of the
recording of the Mortgage on the substitute parcel. Substitute
parcels shall be selected in accordance with paragraph 7.16(d).
(b) As soon as practicable after the Second Restatement
Effective Date, the Evaluator engaged by the Agents will prepare
and deliver to the Agents, the Banks and the Company, at the
Company's expense, an evaluation of the value of each parcel of
real Property listed on Schedule 7.16 and the machinery and equip-
ment located thereon (the "Evaluation"). If the Evaluator deter-
mines that the aggregate Evaluation Value of all such Property is
less than $53,333,334, the Agents shall designate such other
parcels of real Property owned by the Company as directed by
Required Banks (together with the machinery and equipment located
thereon) as additional collateral so that the aggregate value of
(i) all parcels of real Property and the machinery and equipment
located thereon referred to in subparagraph (a) and (ii) all
parcels of real Property and the machinery and equipment located
thereon designated in this subparagraph (b) will not be less than
$53,333,334. Additional parcels shall be selected in accordance
with paragraph 7.16(d).
(c) With respect to each parcel of real Property desig-
nated pursuant to subparagraph (a) as a substitute parcel and each
parcel of real Property designated pursuant to subparagraph (b) as
an additional parcel, (i) as soon practicable after the designation
of such parcel as additional or substitute Collateral and the
delivery of the execution copy of a Mortgage with respect thereto,
but in no event later than ten Business Days thereafter, deliver to
the Collateral Agent such Mortgage, duly executed by an Authorized
Signatory of the Company, and (ii) as soon practicable thereafter,
deliver to the Collateral Agent a title insurance policy, title
searches, opinions of counsel, surveys, a completed Environmental
Questionnaire, UCC-1 Financing Statements and other documents, in
each case as may be requested by the Collateral Agent at the
direction of Required Banks and which shall be in form and sub-
stance satisfactory to the Agents.
(d) Substitute parcels of real Property designated
pursuant to paragraph 7.16(a) shall be located in states in which
there is no recording tax; provided, however, that if there are no
parcels in such states of comparable value, the parcels may be
selected in states with a recording tax as long as the Agents
select parcels first in states with the lower recording tax.
Additional parcels of real Property designated pursuant to para-
graph 7.16(b) shall be located in states in which there is no
recording tax; provided, however, that if the value of the parcels
in such states is insufficient to increase the aggregate value of
the real Property collateral to $53,333,334, the parcels may be
selected in states with a recording tax as long as the Agents
select parcels first in states with the lower recording tax.
(e) Cooperate with the Agents and the Banks in connec-
tion with the foregoing and the Agents and the Banks agree that
they will cooperate in attempting to minimize the cost of the
Company's compliance with the foregoing, provided that nothing
herein shall limit the right of the Agents and the Banks to receive
the first priority security interests provided for herein. In
connection with the foregoing, with respect to each parcel of
Property set forth on Schedule 7.16, the Company shall deliver to
Special Counsel as soon as practicable and in no event later than
February 15, 1995 (i) a copy of the legal description of such
parcel and (ii) either (x) a copy of the deed evidencing the
transfer of title to such parcel to the Company or (y) copies of
all existing title insurance policies with respect thereto. Prompt-
ly thereafter, the Company shall deliver whatever items have not as
yet been delivered pursuant to clause (ii) together with copies of
any existing surveys with respect thereto which the Company was
able to locate after a review of its records.
(f) The Collateral Agent will release, at the Company's
expense, any Mortgage with respect to a Ground Lease or real
Property owned by the Company in order to facilitate Mortgage
Financings and Asset Sales permitted by paragraph 8.8, provided
that the provisions of paragraph 8.8(d) are satisfied. At the
Company's request and at its expense, in lieu of releasing such
Collateral under such circumstances set forth in the preceding
sentence, the Agents and the Banks will take reasonable steps to
assist the Company in assigning such Mortgages to the new lender
providing such Mortgage Financing, provided, however, that any such
assignment shall be without recourse, representation or warranty by
either Agent or any Bank except with respect to the outstanding
principal balance of the Loans and accrued interest thereon.
7.17. Compliance with Leases.
At all times:
(a) pay or cause to be paid, not later than the
date upon which same becomes due and payable by the Company pursu-
ant to the provisions of each Lease, rent, additional rent and
other payments required to be paid by the tenant under such Lease
according to the terms, conditions and provisions thereof unless
and to the extent that any such payment shall be contested in good
faith and by appropriate proceedings conducted by the Company,
provided that such contest is not reasonably expected to result in
the termination of any such Lease; and
(b) except for those referred to in clause (a)
above, duly and punctually perform all covenants, duties, obliga-
tions and agreements of the Company under each Lease if the failure
to comply therewith could reasonably be expected to result in the
termination of such Lease.
7.18. Franchisor Waiver.
No later than 30 days after the Second Restatement
Effective Date, deliver to the Agents and each Bank a waiver and/or
letter from the Franchisor, in form and substance satisfactory to
the Agents and the Banks, (i) confirming that the Company is not in
default of any payment obligation or performance obligation under
any Franchise Agreement, including, without limitation, all obliga-
tions to develop properties or stores or similar obligations during
the Company's 1995 fiscal year under those Franchise Agreements
which impose the same or (ii) waiving all such defaults.
8. NEGATIVE COVENANTS.
The Company hereby agrees that, so long as this Agreement is
in effect, any Revolving Credit Loan or reimbursement obligation
(contingent or otherwise) in respect of any Letter of Credit
remains outstanding and unpaid, or any other amount is owing under
any Loan Document, the Company shall not, directly or indirectly:
8.1. Borrowing.
Create, incur, assume or suffer to exist any liability
for Indebtedness, or permit any Material Subsidiary so to do,
except (i) Indebtedness under the Loan Documents and in respect of
the Letters of Credit, (ii) Mortgage Financings, provided that (x)
the terms and conditions thereof are comparable to the terms and
conditions generally available for similar financings in similar
amounts, for similar purposes, by similar borrowers and for similar
terms and (y) the provisions of paragraph 8.8 are satisfied, (iii)
Indebtedness of the Company and its Material Subsidiaries (whether
in the form of borrowings, Contingent Obligations, obligations
under Capitalized Leases or otherwise and including Indebtedness
assumed in connection with an acquisition permitted by paragraph
8.11), not in excess of an aggregate of $25,000,000 principal
amount at any one time outstanding, provided that (x) an amount
equal to the proceeds thereof shall have been expended by the
Company and its Material Subsidiaries on capital expenditures no
later than the end of the fiscal year in which such proceeds are
received, (y) such amount so expended does not, together with other
amounts expended during such fiscal year on capital expenditures,
exceed the amount permitted by paragraph 8.11 and (z) the terms and
conditions thereof shall be comparable to the terms and conditions
generally available for Indebtedness or Capitalized Leases in
similar amounts, for similar purposes, by similar borrowers and for
similar terms; (iv) purchase money indebtedness incurred in connec-
tion with the purchase, after the date hereof, of any Property, in
an aggregate principal amount not to exceed $1,000,000 at any one
time outstanding, (v) Indebtedness in respect of overdrafts not in
excess of $1,000,000 outstanding at any time, (vi) Enterprises
Intercompany Loans, provided that each such Enterprises Intercompa-
ny Loan shall be (x) evidenced by a note to be pledged to the
Collateral Agent pursuant to the Enterprises Guaranty and (y)
subordinated to the obligations of the Company to the Agents and
the Banks on the terms set forth in the Enterprises Guaranty,
provided, however, that notwithstanding anything in any Loan
Document to the contrary, so long as no Default or Event of Default
would exist before and after giving effect thereto, the Company
shall be permitted to repay Additional Enterprises Intercompany
Loans (but not Existing Enterprises Intercompany Loans), (viii)
Indebtedness consisting of Contingent Obligations permitted by
paragraph 8.4, (ix) Indebtedness in the aggregate not in excess of
$2,000,000 principal amount at any one time outstanding which is
subordinated to the obligations of the Company to the Agents and
the Banks under the Loan Documents on subordination terms no more
favorable to the lender than as set forth in the Enterprises
Subordinated Indenture provided that the other terms thereof are
otherwise satisfactory to the Agents and Required Banks, (x) Loans
to Subsidiaries in the aggregate not in excess of $250,000 princi-
pal amount at any one time outstanding (xi) ERISA Liabilities
permitted to be incurred under paragraph 8.10, (xii) Indebtedness
of the Company and its Material Subsidiaries existing on the Second
Restatement Effective Date as set forth on Schedule 8.1 including,
except as set forth in the proviso below, refinancings thereof but
not increases in the amount of any thereof, provided that
refinancings of such existing Indebtedness shall not be permitted
unless (A) the interest rate on any such refinanced Indebtedness is
not in excess of the rate available for similar borrowings by
similar borrowers at the time of the refinancing, (B) the final
maturity of such refinanced Indebtedness is not earlier than the
Revolving Credit Termination Date and (C) the average weighted life
to maturity of such refinanced Indebtedness shall not be less than
the original average weighted life to maturity of such Indebtedness
being refinanced and (xiii) Intercompany Loans to the extent
permitted by paragraph 8.6(i).
8.2. Liens.
Create, incur, assume or suffer to exist any Lien upon
any of its Property, whether now owned or hereafter acquired, or
permit any Material Subsidiary so to do, except (i) Liens for
taxes, assessments or similar charges incurred in the ordinary
course of business which are not delinquent or which are being
contested in accordance with paragraph 7.4, provided that enforce-
ment of such Liens is stayed pending such contest, (ii) Liens in
connection with workers' compensation, unemployment insurance or
other social security obligations (but not ERISA), (iii) deposits
or pledges to secure bids, tenders, contracts (other than contracts
for the payment of money), leases, statutory obligations, surety
and appeal bonds and other obligations of like nature arising in
the ordinary course of business, (iv) zoning ordinances, easements,
rights of way, minor defects, irregularities, and other similar
restrictions affecting real property which do not adversely affect
the value of such real property or the financial condition of the
Company or such Material Subsidiary or impair its use for the
operation of the business of the Company or such Material Subsid-
iary, (v) statutory Liens arising by operation of law such as
mechanics', materialmen's, carriers', warehousemen's liens incurred
in the ordinary course of business which are not delinquent or
which are being contested in accordance with paragraph 7.4, provid-
ed that enforcement of such Liens is stayed pending such contest,
(vi) Liens arising out of judgments or decrees which are being
contested in accordance with paragraph 7.4, provided that enforce-
ment of such Liens is stayed pending such contest, (vii) landlord's
liens under leases; (viii) security interests in Property of the
Company (other than Collateral and other than on Property listed on
Schedule 7.16) to secure Mortgage Financings to the extent permit-
ted by paragraph 8.1(iii); (ix) Liens securing obligations of the
Company not in excess of $250,000 in the aggregate at any time
outstanding, that do not arise from borrowings by the Company; (x)
purchase money Liens in Property of the Company acquired after the
date hereof to secure Indebtedness of the Company permitted by
paragraph 8.1(iv), incurred in connection with the acquisition of
such Property, provided that each such Lien is limited to such
Property so acquired, (xi) leases and subleases, (xii) Liens in
favor of the Collateral Agent and the Banks under the Loan Docu-
ments, (xiii) Liens on Property of the Company and its Material
Subsidiaries existing on the Second Restatement Effective Date as
set forth on Schedule 8.2 as renewed from time to time, but not any
increases in the amounts secured thereby and (xiv) Liens on Proper-
ty acquired in connection with an acquisition permitted by para-
graph 8.11, provided that each such Lien is limited to the Property
so acquired and fixed improvements thereon.
8.3. Merger and Acquisition or Sale of Property.
Consolidate with, be acquired by, or merge into or with
any Person, or, except to the extent permitted by paragraph 8.11,
acquire all or substantially all of the Stock or Property of any
Person, or sell, lease or otherwise dispose of all or substantially
all of its Property or any of its Stock (except as permitted by
paragraph 8.8), or acquire restaurants or equipment (except to the
extent permitted by paragraph 8.11), or acquire any other assets
other than in the ordinary course of business, or permit any
Material Subsidiary to do any of the foregoing, except that a
wholly-owned Subsidiary of the Company may merge with and into
another wholly-owned Subsidiary of the Company.
8.4. Contingent Obligations.
Assume, guarantee, indorse, contingently agree to pur-
chase or perform, or otherwise become liable upon any Contingent
Obligation, or permit any Material Subsidiary so to do, except (i)
Contingent Obligations in respect of the Letters of Credit, (ii)
Contingent Obligations in respect of the Restaurants Guaranty;
(iii) Contingent Obligations permitted by paragraph 8.1(iii), (iv)
Contingent Obligations existing on the Second Restatement Effective
Date as set forth on Schedule 8.4 including, except as set forth in
the proviso below, refinancings and renewals thereof but not
increases in the amount of any thereof, provided that such
refinancings shall not be permitted unless (A) the interest rate on
the primary obligation of the primary obligor is not in excess of
the rate for similar obligations of similar obligors at the time of
such refinancing, (B) the final maturity of such refinanced primary
obligation is not earlier than the Revolving Credit Termination
Date and (C) the average weighted life to maturity of such refi-
nanced primary obligation shall not be less than the original
average weighted life to maturity of such primary obligation being
refinanced and (v) Contingent Obligations of TPI Commissary and TPI
Transportation under the Subsidiary Guaranty.
8.5. Dividends and Purchase of Stock.
Declare or pay any dividends payable in cash or otherwise
or apply any of its Property to the purchase, redemption or other
retirement of, or set apart any sum for the payment of any divi-
dends on, or make any other distribution by reduction of capital or
otherwise in respect of, any shares of its capital Stock or other
similar equity interest or warrants or other rights issued in
respect thereof, or permit any Subsidiary so to do, except that (i)
any Subsidiary may declare and pay dividends to the Company and
(ii) provided that no Default or Event of Default exists immediate-
ly before and after giving effect thereto, (A) not earlier than one
Business Day prior to the date that Enterprises is required to
deposit amounts with the Trustee under Enterprises Subordinated
Indenture for the payment by such Trustee of any payment required
to be made with respect to Enterprises Subordinated Debenture, the
Company may declare and pay a dividend to Enterprises in an amount
not in excess of the amount of such required payment and (B) not
earlier than one Business Day prior to the date Enterprises is
required to make a payment of interest (but not of principal,
whether regularly scheduled, due to a voluntary or mandatory
redemption or otherwise, or any other amount) on or with respect to
the Senior Subordinated Debentures, the Company may declare and pay
a dividend to Enterprises in an amount not in excess of such
interest payment.
8.6. Investments, Loans, Etc.
At any time, purchase or otherwise acquire, hold or
invest in the Stock of, or any other interest in, any Person, or
make any loan or advance to, or enter into any arrangement for the
purpose of providing funds or credit to, or make any other invest-
ment, whether by way of capital contribution or otherwise, in or
with any Subsidiary or any other Person (all of which are sometimes
referred to herein as "Investments"), or permit any Subsidiary so
to do, except:
(a) Investments in short-term certificates of deposit
and eurodollar time deposits issued by, and overnight deposits
with, any Bank, or any other commercial bank, trust company or
national banking association incorporated under the laws of the
United States or any State thereof and having undivided capital,
surplus and retained earnings exceeding $500,000,000;
(b) Investments in short-term direct obligations of the
United States of America or agencies thereof which obligations are
guaranteed by the United States of America;
(c) Investments existing on the Second Restatement
Effective Date as set forth on Schedule 8.6 and any renewals
thereof;
(d) commercial paper or short term finance company paper
which is rated not less than P-1, or A-1 or their equivalents by
Moody's Investors Service, Inc. or Standard & Poor's Corporation or
their successors;
(e) money market mutual funds;
(f) stock acquired in acquisitions permitted by para-
graph 8.11 and any Investment acquired in connection with any such
acquisition and any renewals thereof;
(g) loans to employees in accordance with the business
practices of the Company in effect on the Original Effective Date
in an aggregate amount outstanding at any time not in excess of
$400,000;
(h) loans to Subsidiaries permitted by paragraph 8.1(x);
and
(i) Intercompany Loans to TPI Commissary and TPI Trans-
portation each in an aggregate amount outstanding at any one time
not in excess of $1,500,000, provided, however (A) no such Inter-
company Loan may be made after the occurrence and during the
continuance of a Default or Event of Default, (B) the obligation of
each of TPI Commissary and TPI Transportation to repay to the
Company the amount of each Intercompany Loan made to it shall be
evidenced by a demand promissory note payable to the order of the
Company with appropriate insertions on the schedule attached
thereto as to the date and principal amount of each such Intercom-
pany Loan, which note shall be pledged to the Collateral Agent
under the Security Agreement, (C) the Company shall record the date
and amount of each such Intercompany Loan, the date and amount of
each payment thereof, on the schedule (and any continuations
thereof) annexed to and constituting a part of such promissory note
and (D) the Company shall maintain accurate records of all such
Intercompany Loans and, not later than 5 Business Days after the
end of each month, update the schedule attached to each promissory
note to reflect all such Intercompany Loans and repayments thereof
which were made during the preceding month.
8.7. Business Changes.
Materially change the nature of its business as conducted
on the date hereof (including, without limitation, the operation of
stores other than Shoney's or Captain D's stores), or alter or
modify its corporate name, structure or status (including, without
limitation, its tax status), or change its fiscal year end, or
alter its accounting principles, treatment or recording practices,
except as required by GAAP, or permit any Material Subsidiary so to
do.
8.8. Sale of Property; Mortgage Financings.
Sell, convey, mortgage, assign, encumber, exchange,
lease, transfer or otherwise dispose of all or any part of its
Property, or enter into any sale-leaseback transaction, or permit
any of its Subsidiaries so to do, except:
(a) Sales or other dispositions of inventory in the
ordinary course of business;
(b) sales of obsolete or otherwise unnecessary
machinery, equipment and fixtures;
(c) Asset Sales and Mortgage Financings of Property
which is not Collateral, the Net Cash Proceeds of which exceed
$25,000 for any one transaction or $250,000 for all such transac-
tions after the Second Restatement Effective Date, as to which the
following conditions have been satisfied:
(i) in the case of a Mortgage Financing, the
provisions of paragraph 8.1(iii) are satisfied and in the case of
an Asset Sale which is a sale and leaseback transaction, the
provisions of paragraph 8.17 are satisfied,
(ii) in the case of an Asset Sale, such sale
shall be made to a bona-fide purchaser for a total cash consider-
ation of not less than the fair market value thereof as reasonably
determined by the Company or such Subsidiary making such sale,
(iii) no Default or Event of Default shall
exist immediately before or after giving effect thereto unless such
default shall have been waived by Required Banks,
(iv) the Company shall cause 50% of the Net
Cash Proceeds thereof in excess of the first $5,000,000 of aggre-
gate Net Cash Proceeds received after the Second Restatement
Effective Date to be delivered as soon as practicable but in no
event later than one Business Day after the receipt thereof to the
Administrative Agent to be applied to (x) the prepayment of Revolv-
ing Credit Loans pursuant to paragraph 2.5 (and the resulting
reduction of the Aggregate Revolving Credit Commitments pursuant to
paragraph 2.4) and (y) the cash collateralization of Letters of
Credit to the extent required by paragraph 2.5, provided, however,
that 50% of the Net Cash Proceeds from any Subsidiary Sale for a
total cash consideration of greater than $1,000,000 shall be fully
applied to the prepayment of Revolving Credit Loans (and the
resulting reduction of the Aggregate Revolving Credit Commitments)
and the collateralization of the Letters of Credit as aforesaid
whether or not the Company or any Subsidiary has received all or
any portion of the first $5,000,000 of Net Cash Proceeds received
after the Second Restatement Effective Date.
(v) at least 15 Business Days prior to each
such Asset Sale or Mortgage Financing, the Agents and the Banks
shall have received a certificate in respect thereto signed by an
Authorized Signatory of the Company (x) identifying the Property to
be sold, mortgaged or otherwise disposed of, (y) certifying that
the conditions of this paragraph 8.8(c) which are required to be
satisfied as of such date have been satisfied, (z) setting forth
the total consideration to be paid in respect of such Asset Sale or
Mortgage Financing together with estimates of items to be deducted
therefrom in arriving at the Net Cash Proceeds thereof;
(d) Asset Sales and Mortgage Financings of Property
which constitutes Collateral as to which the following conditions
have been satisfied:
(i) the conditions in subparagraphs (c)(i) and
(c)(iii) are satisfied, and
(ii) the total cash consideration to be
received in respect thereof shall not be less than (x) in the case
of Property included in the Evaluation, 75% of the Evaluated Value
of such Property and (y) in the case of all other Property, the
fair market value thereof as reasonably determined by the Company
or such Subsidiary making such Asset Sale or Mortgage Financing,
(iii) the Company shall cause 100% of the Net
Cash Proceeds thereof to be delivered either prior to or contempo-
raneously with the consummation of such Asset Sale or Mortgage
Financing directly to the Administrative Agent to be applied to (x)
the prepayment of Revolving Credit Loans pursuant to paragraph 2.5
(and the resulting reduction of the Aggregate Revolving Credit
Commitments pursuant to paragraph 2.4) and (y) the cash
collateralization of Letters of Credit to the extent required by
paragraph 2.5, and
(iv) at least 15 Business Days prior to each
such Asset Sale or Mortgage Financing, the Agents and the Banks
shall have received a certificate in respect thereto signed by an
Authorized Signatory of the Company (x) identifying the Property to
be sold, mortgaged or otherwise disposed of, (y) stating that the
cash consideration received or to be received by the Company or
such Subsidiary for such Property (or the proceeds of such Mortgage
Financing) is not less than less than 75% of the Evaluated Value of
such Property if such Property is included in the Evaluation or the
fair market value of such Property as determined by the Company in
the case of other Property, and (z) the total consideration to be
paid in respect of such Asset Sale or Mortgage Financing together
with estimates of items to be deducted therefrom in arriving at the
Net Cash Proceeds thereof.
8.9. Subsidiaries.
Create or acquire any Subsidiary, or permit any Subsid-
iary so to do, in each case except as permitted pursuant to para-
graph 8.11.
8.10. Compliance with ERISA.
Adopt any Plan or Multiemployer Plan not listed on
Schedule 4.15 (as such Schedule exists prior to such adoption), or
permit any Subsidiary so to do, or engage in any "prohibited
transaction", as such term is defined in Section 4975 of the Code
or Section 406 of ERISA, with respect to any Plan which is reason-
ably expected to result in the imposition on the Company or any
Subsidiary or any Commonly Controlled Entity of a tax, penalty or
other liability, individually or in the aggregate, in excess of
$500,000, or incur any "accumulated funding deficiency", as such
term is defined in Section 412 of the Code or Section 302 of ERISA,
in excess of $500,000, or terminate, or permit any Subsidiary or
Commonly Controlled Entity to terminate, any Plan which would
result in a liability to the Company, any Subsidiary or any Common-
ly Controlled Entity to the PBGC in an aggregate Consolidated
amount in excess of $500,000, or permit the occurrence of any
Reportable Event or any other event or condition which presents a
risk of such a termination by the PBGC of any Plan which could
result in a liability of the Company, any Subsidiary or any Common-
ly Controlled Entity in excess of $500,000, or withdraw or effect a
partial withdrawal from a Multiemployer Plan, or permit any Subsid-
iary or any Commonly Controlled Entity which is an employer under
such a Multiemployer Plan so to do which would result in a liabili-
ty to the Company, any Subsidiary or any Commonly Controlled Entity
to the PBGC in an aggregate Consolidated amount in excess of
$500,000.
8.11. Capital Expenditures.
During any fiscal year, make any capital expenditures or
fixed asset acquisitions, or incur any obligation so to do, or
permit any Material Subsidiary so to do, in an aggregate Consoli-
dated amount in excess of $14,000,000 in respect of the Company's
1995 fiscal year and $7,500,000 in respect of each fiscal year
thereafter. The cost of any Stock or other ownership interest of
any stores (Shoney's or otherwise) plus any other consideration
given in connection therewith, including, without limitation,
Indebtedness assumed by the Company or any Subsidiary, in any
fiscal year shall constitute a capital expenditure. In the event
that the Company finances a capital expenditure by a Capitalized
Lease, the principal amount thereof shall be deemed, without
duplication, to be the capital expenditure. Capital expenditures
and fixed asset acquisitions shall be calculated on a
non-cumulative basis so that amounts not expended in any fiscal
year may not be carried over and expended in subsequent fiscal
years except that amounts not in excess of $5,000,000 not expended
in the 1995 fiscal year of the Company may be carried over to, and
expended in, the 1996 fiscal year.
8.12. Leverage Ratio.
Permit as of the last day of the fourth fiscal quarter
in the 1994 fiscal year of the Company and the last day of each
fiscal quarter thereafter, the Leverage Ratio to exceed 1.00:1.00.
8.13. Certificate of Incorporation and By-laws.
Amend or otherwise modify its certificate of incorpora-
tion or by-laws, or permit any Material Subsidiary so to do, in any
way which would adversely affect the interests of the Banks under
any of the Loan Documents or the obligations of the Company under
the Loan Documents.
8.14. Prepayments of Indebtedness.
Prepay, purchase or redeem, or obligate itself to
prepay, purchase or redeem, in whole or in part, any Indebtedness
(except the Revolving Credit Notes), or permit any Material Subsid-
iary so to do, except (i) payments made in connection with purchas-
es and redemptions of subordinated debt permitted by paragraphs
8.1(vi)(y) or 8.15 and (ii) prepayments in connection with the
refinancing of any such Indebtedness, provided (x) the interest
rate on any such refinanced Indebtedness is not in excess of the
rate available for similar borrowings by similar borrowers at the
time of the refinancing, (y) the maturity of such refinanced
Indebtedness is not earlier than the Revolving Credit Termination
Date and (z) the average weighted life to maturity of such refi-
nanced Indebtedness shall not be less than the original average
weighted life to maturity of such Indebtedness being refinanced.
8.15. Subordinated Debt.
Make any payment in respect of principal of, or premium
or interest on, or purchase, voluntarily redeem or otherwise
retire, or make any payment in respect of all or any part of the
Indebtedness under the Enterprises Subordinated Indenture, the
Restaurants Guaranty, the Senior Subordinated Indenture, the
Debenture Purchase Agreement, any loan made at any time by Enter-
prises to the Company, or any other subordinated Indebtedness, or
permit any Subsidiary so to do, except (i) subject to the subordi-
nation provisions of the Enterprises Subordinated Indenture (as in
effect on the Original Effective Date), payments (including the
Repurchase Price as defined in the Enterprises Subordinated Inden-
ture as in effect on the Original Effective Date) required to be
made with respect to the Enterprises Subordinated Debentures, (ii)
subject to the subordination provisions of the Debenture Purchase
Agreement (as in effect on March 19, 1993), payments of interest
required to be made with respect to the Senior Subordinated Deben-
tures and (iii) the repayment of Additional Enterprises Intercompa-
ny Loans to the extent permitted by the subordination provisions
applicable thereto.
8.16. Issuance of Additional Capital Stock.
Issue, directly or indirectly, any additional Stock or
other equity interest of the Company or permit any Subsidiary to
issue any additional Stock or other equity interest of such Subsid-
iary, except (i) the Company may issue Stock which is concurrently
delivered (together with stock powers duly executed in blank) and
pledged to the Collateral Agent on behalf of the Banks pursuant to
the Enterprises Guaranty and (ii) a Subsidiary may issue Stock to
the Company or to another wholly-owned Subsidiary.
8.17. Sale and Leaseback.
Enter into any arrangement with any Person, or permit
any Material Subsidiary so to do, providing for the leasing by the
Company (or such Material Subsidiary) of Property which has been or
is to be sold or transferred by the Company (or such Material
Subsidiary) to such Person or to any other Person to whom funds
have been or are to be advanced by such Person on the security of
such Property or rental obligations of the Company (or such Materi-
al Subsidiary), except that the Company may enter into
sale-leaseback transactions, at fair market value, provided that
(i) the resulting leases are Capitalized Leases, (ii) the obliga-
tions under such Capitalized Leases are permitted by paragraph
8.1(iii) and (iii) the provisions of paragraph 8.8 are satisfied.
8.18. Payment of Management Fees and Other Amounts.
Pay any management fees or any other amounts to Enter-
prises or any Affiliate, or permit any Subsidiary so to do, except
that (i) the Company may make the payments permitted by paragraph
8.5, (ii) the Company may make the payments required under the Tax
Sharing Agreement and (iii) provided that no Default or Event of
Default exists immediately before and after giving effect thereto,
the Company may pay to Enterprises, an amount not in excess of
$2,500,000 in the aggregate in each fiscal year of the Company in
respect of management fees and administrative expenses.
8.19. Transactions with Affiliates.
Except for the Restaurants Guaranty, the Management
Agreement and the Tax Sharing Agreement, become, or permit any
Subsidiary to become, a party to any transaction with an Affiliate
of the Company or any Subsidiary unless the terms and conditions
relating to such transaction are at least as favorable to the
Company or such Subsidiary as those which would be obtainable at
that time in a comparable arms-length transaction with a Person
other than an Affiliate.
8.20. Amendments, Etc. of Certain Agreements.
Enter into or agree to any amendment, modification or
waiver of any term or condition of (i) any Lease other than in the
ordinary course of business or (ii) the Enterprises Subordinated
Indenture, the Enterprises Debentures, the Debenture Purchase
Agreement, the Senior Subordinated Debentures, the Restaurant
Guaranty, the 1988 Agreement, any subordinated note made by the
Company to the order of or held by Enterprises or any Affiliate
thereof, the Management Agreement, any Franchise Agreement or the
Tax Sharing Agreement, except that (i) the Company may agree to a
waiver under the Debenture Purchase Agreement or the Senior Subor-
dinated Debentures so long as no consideration is given therefor by
the Company or Enterprises and (ii) the Company and Enterprises may
amend the Management Agreement to reduce the management fee or to
delay any payments otherwise due thereunder.
8.21. Designated Senior Indebtedness.
Designate any Indebtedness other than the Indebtedness
under the Loan Documents as (i) "Designated Senior Indebtedness of
the Guarantor" as defined in the Enterprises Subordinated Indenture
or (ii) "Designated Senior Debt" as defined in the Debenture
Purchase Agreement.
9. DEFAULT.
9.1. Events of Default.
The following shall each constitute an "Event of Default"
hereunder:
(a) The failure of the Company to pay any installment of
principal on any Revolving Credit Note or reimbursement obligation
in respect of any Letter of Credit on the date when due and pay-
able; or
(b) The failure of the Company to pay any installment of
interest or any fees or expenses payable hereunder or under any
other Loan Documents when due and payable and such failure shall
continue for a period of five days; or
(c) The use by the Company of the proceeds of any
Revolving Credit Loan in a manner inconsistent with or in violation
of paragraph 2.18; or
(d) The failure of the Company to observe or perform any
covenant or agreement contained in paragraphs 7.3, 7.11, 7.12,
7.14, 7.18 or paragraph 8; or
(e) The failure of the Company to observe or perform any
other term, covenant, or agreement contained in this Agreement and
such failure shall have continued unremedied for a period of 30
days after the Company shall have obtained knowledge thereof; or
(f) Any representation or warranty of the Company (or of
any officer of the Company on its behalf) made in this Agreement or
in any certificate, report, opinion (other than an opinion of
counsel) or other document (other than the Environmental Question-
naires, the Leases and the Franchise Agreements) delivered or to be
delivered pursuant to this Agreement, shall prove to have been
incorrect or misleading (whether because of misstatement or omis-
sion) in any respect when made; or
(g) Obligations of the Company (other than its obliga-
tions under the Revolving Credit Notes) Enterprises or any Material
Subsidiary, whether as principal, guarantor, surety or other
obligor, for the payment of Indebtedness in excess of $1,000,000
principal amount individually or in the aggregate (i) shall become
or shall be declared to be due and payable prior to the expressed
maturity or expiration thereof, or (ii) shall not be paid when due
or within any grace period for the payment thereof, or (iii) the
holder of any thereof shall have the right to declare the same due
and payable prior to the expressed maturity thereof; or
(h) The Company, Enterprises or any Material Subsidiary
shall (i) suspend or discontinue its business, or (ii) make an
assignment for the benefit of creditors, or (iii) generally not be
paying its debts as such debts become due, or (iv) admit in writing
its inability to pay its debts as they become due, or (v) file a
voluntary petition in bankruptcy, or (vi) file any petition or
answer seeking for itself any reorganization, arrangement, composi-
tion, readjustment of debt, liquidation or dissolution or similar
relief under any present or future statute, law or regulation of
any jurisdiction, or (vii) petition or apply to any tribunal for
any receiver, custodian or any trustee for any substantial part of
its Property, or (viii) file any answer admitting or not contesting
the material allegations of any such petition filed against it or
any order, judgment or decree approving such petition in any such
proceeding, or (ix) seek, approve, consent to, or acquiesce in any
such proceeding, or in the appointment of any trustee, receiver,
custodian, liquidator, or fiscal agent for it, or any substantial
part of its Property, or an order is entered appointing any such
trustee, receiver, custodian, liquidator or fiscal agent and such
order remains in effect for 45 days, or (x) take any formal action
for the purpose of effecting any of the foregoing or looking to the
liquidation or dissolution of the Company, Enterprises or such
Material Subsidiary; or
(i) An order for relief is entered under the United
States bankruptcy laws or any other decree or order is entered by a
court having jurisdiction (i) adjudging the Company, Enterprises or
any Material Subsidiary a bankrupt or insolvent, or (ii) approving
as properly filed a petition seeking reorganization, liquidation,
arrangement, adjustment or composition of or in respect of the
Company, Enterprises or any Material Subsidiary under the United
States bankruptcy laws or any other applicable Federal or state
law, or (iii) appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator (or other similar official) of the Company,
Enterprises or any Material Subsidiary or of any substantial part
of the Property thereof, or (iv) ordering the winding up or liqui-
dation of the affairs of the Company, Enterprises or any Material
Subsidiary, and any such decree or order continues unstayed and in
effect for a period of 45 days; or
(j) Judgments or decrees against the Company, Enterpris-
es or any Material Subsidiary in excess of $1,000,000 in the
aggregate shall remain unpaid, unstayed on appeal, undischarged,
unbonded or undismissed for a period of 30 days; or
(k) The occurrence and continuance of an Event of
Default under and as defined in (i) any Collateral Document or
Enterprises shall disavow its obligations under the Enterprises
Guaranty or (ii) the Subsidiary Guaranty or either Subsidiary
Guarantor shall disavow its obligations thereunder; or
(l) Any of the Loan Documents shall cease, for any
reason, to be in full force and effect, or the Company, Enterprises
or any Material Subsidiary shall so assert in writing; or
(m) Any material business license, permit or agreement,
including, without limitation, any Franchise Agreement, of the
Company, Enterprises or any Material Subsidiary is cancelled,
terminated or otherwise lost (other than by its terms, in connec-
tion with the closing of a restaurant or with the mutual consent of
the parties thereto); or
(n) Enterprises shall not own 100% of the issued and
outstanding Stock of the Company; or
(o) The occurrence of an Event of Default under and as
defined in the Enterprises Subordinated Indenture or the Debenture
Purchase Agreement; or
(p) The occurrence of a Change in Control.
Upon the occurrence of an Event of Default or at any time
thereafter during the continuance thereof, (a) if such event is an
Event of Default with respect to the Company specified in clauses
(h) or (i) above, the Aggregate Revolving Credit Commitments and
the Letter of Credit Commitment shall immediately and automatically
terminate and the Revolving Credit Loans, all accrued and unpaid
interest thereon, any reimbursement obligations owing or contin-
gently owing in respect of all outstanding Letters of Credit, and
all other amounts owing under the Loan Documents shall immediately
become due and payable without declaration or notice to the Compa-
ny, and the Company shall forthwith deposit Cash Collateral in an
amount equal to the Letter of Credit Exposure in a cash collateral
account with and under the exclusive control of the Collateral
Agent, and the Agents may, and upon the direction of the Required
Banks shall, exercise any and all remedies and other rights provid-
ed pursuant to the Loan Documents, and (b) if such event is any
other Event of Default, any or all of the following actions may be
taken: (i) with the consent of the Required Banks, the Agents may,
and upon the direction of the Required Banks shall, by notice to
the Company, declare the Aggregate Revolving Credit Commitments and
the Letter of Credit Commitment to be terminated, forthwith,
whereupon the Aggregate Revolving Credit Commitments and the Letter
of Credit Commitment shall immediately terminate, and (ii) with the
consent of the Required Banks, the Agents may, and upon the direc-
tion of the Required Banks shall, by notice of default to the
Company, declare the Revolving Credit Loans, all accrued and unpaid
interest thereon, any reimbursement obligations owing or contin-
gently owing in respect of all outstanding Letters of Credit, and
all other amounts owing under the Loan Documents to be due and
payable on demand or forthwith, whereupon the same shall immediate-
ly become so due and payable, and the Company shall forthwith
deposit Cash Collateral in an amount equal to the Letter of Credit
Exposure in a cash collateral account with and under the exclusive
control of the Collateral Agent, and the Agents may, and upon the
direction of the Required Banks shall, exercise any and all reme-
dies and other rights provided pursuant to the Loan Documents.
Except as otherwise provided in this paragraph 9.1, presentment,
demand, protest and all other notices of any kind are hereby
expressly waived.
In the event that the Aggregate Revolving Credit Commitments
and the Letter of Credit Commitment shall have been terminated or
the Revolving Credit Notes shall have been declared due and payable
pursuant to the provisions of this paragraph 9.1, any funds re-
ceived by the Agents and the Banks from or on behalf of the Company
shall be applied by the Agents and the Banks in liquidation of the
Revolving Credit Loans and the obligations of the Company hereunder
and under the Letters of Credit and the Revolving Credit Notes in
the following manner and order: (i) first, to reimburse the Agents
and the Banks for any expenses due from the Company pursuant to the
provisions of paragraph 11.5; (ii) second, to the payment of
accrued and unpaid Revolving Credit Commitment Fees, Letter of
Credit Commissions and all other fees, expenses and amounts due
hereunder and under the Loan Documents (other than principal and
interest on the Revolving Credit Notes); (iii) third, to the
payment of interest due on the Revolving Credit Notes; (iv) fourth,
to the payment of principal outstanding on the Revolving Credit
Notes and the Letter of Credit Exposure; and (v) fifth, to the
payment of any other amounts owing to the Agents and the Banks
under any of the Loan Documents.
9.2. Purchase of Notes by the Franchisor.
(a) After the occurrence and at any time during the
continuance of an Event of Default and prior to exercising any
remedies under the Loan Documents with respect to the Collateral,
the Administrative Agent will notify the Franchisor of the occur-
rence of such Event of Default. During the period of 10 Business
Days after such notice is given, the Franchisor shall have the
right to purchase the Notes of all (but not less than all) of the
Banks, without recourse, for an amount equal to the unpaid princi-
pal balance thereof together with accrued and unpaid interest, fees
and all other amounts due under the Loan Documents. In the event
that the Franchisor notifies the Administrative Agent that it
agrees to so purchase the Notes, payment therefor shall be made in
Dollars in immediately available funds within 10 Business Days
after such notice. In such event, the Franchisor shall succeed to
all of the rights of the Agents and the Banks under the Loan
Documents. In the event that the Franchisor fails to give timely
notice of its agreement to so purchase the Notes, or if the Fran-
chisor notifies the Administrative Agent that it does not agree to
purchase the Notes, the Collateral Agent shall be free to exercise
all of the remedies with respect to the Collateral under the Loan
Documents.
(b) Notices to the Franchisor under this paragraph 9.2
shall be in writing and shall be mailed or sent by telegram,
telecopy or telex (with a copy to the Company at its address set
forth in paragraph 11.2), as follows:
Shoney's, Inc.
1727 Elm Hill Pike
Nashville, Tennessee 37210
Attention: Secretary
with a copies to:
Tuke, Yopp & Sweeney
Third National Financial Center
201 Fourth Avenue, N., 17th Floor
Nashville, Tennessee 37219
Attention: Gary M. Brown, Esq.
TPI Restaurants, Inc.
2158 Union Avenue
Memphis, Tennessee 38104
Attention: Frederick W. Burford,
Vice President and Chief
Financial Officer
and
Skadden, Arps, Slate, Meagher & Flom
1440 New York Avenue, N.W.
Washington, D.C. 20005
Attention: Ronald Barusch, Esq.
10. THE AGENTS; THE ISSUING BANK.
10.1. Appointment.
Each Bank hereby irrevocably designates and appoints BNY
as the Administrative Agent and NationsBank as the Collateral Agent
of such Bank under the Loan Documents and each such Bank hereby
irrevocably authorizes BNY and NationsBank, as the Administrative
Agent and the Collateral Agent, respectively, for such Bank, to
take such action on its behalf under the provisions of the Loan
Documents and to exercise such powers and perform such duties as
are expressly delegated to the Administrative Agent and the Collat-
eral Agent by the terms of the Loan Documents, together with such
other powers as are reasonably incidental thereto. Notwithstanding
any provision to the contrary elsewhere in this Agreement or any of
the other Loan Documents, neither the Administrative Agent nor the
Collateral Agent shall have any duties or responsibilities, except
those expressly set forth herein or therein, or any fiduciary
relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read
into the Loan Documents or otherwise exist against the Administra-
tive Agent or the Collateral Agent.
10.2. Delegation of Duties.
The Agents may execute any duties under the Loan Docu-
ments by or through agents or attorneys-in-fact and shall be
entitled to rely upon the advice of counsel concerning all matters
pertaining to such duties.
10.3. Exculpatory Provisions.
(a) Neither of the Agents, the Issuing Bank in its
capacity as such, nor any of their respective officers, directors,
employees, agents, attorneys-in-fact or affiliates shall be (i)
liable for any action lawfully taken or omitted to be taken by it
or such Person under or in connection with the Loan Documents
(except for its own gross negligence or willful misconduct or, in
the case of the Issuing Bank, its failure to materially comply with
the terms of the Letters of Credit), or (ii) responsible in any
manner to any of the Banks for any recitals, statements, represen-
tations or warranties made by the Company or any officer thereof
contained in the Loan Documents or in any certificate, report,
statement or other document referred to or provided for in, or
received under or in connection with, the Loan Documents or for the
value, validity, effectiveness, genuineness, enforceability or
sufficiency of any of the Loan Documents or for any failure of the
Company or any other Person to perform its obligations hereunder or
thereunder. Neither of the Agents nor the Issuing Bank shall be
under any obligation to any Bank to ascertain or to inquire as to
the observance or performance of any of the agreements contained
in, or conditions of, the Loan Documents, or to inspect the proper-
ties, books or records of the Company. Neither of the Agents shall
be under any liability or responsibility whatsoever, as Administra-
tive Agent or Collateral Agent, as the case may be, to the Company
or any other Person as a consequence of any failure or delay in
performance, or any breach, by any Bank of any of its obligations
under any of the Loan Documents.
(b) As to the Issuing Bank only, the Company assumes all
risks of the acts or omissions of any beneficiary or transferee of
any Letter of Credit with respect to its use of the Letter of
Credit. Neither the Issuing Bank, the Agents, the Banks nor any
of their respective officers or directors shall be liable or
responsible for: (i) the use which may be made of any Letter of
Credit or any acts or omissions of any beneficiary or transferee in
connection therewith, (ii) the validity, sufficiency or genuineness
of documents, or of any endorsement thereon, even if such documents
should prove to be in any or all respects invalid, insufficient,
fraudulent or forged; (iii) payment by the Issuing Bank against
presentation of documents which do not comply with the terms of a
Letter of Credit, including failure of any documents to bear any
reference or adequate reference to a Letter of Credit; (iv) errors,
omissions, interruptions or delays in transmission or delivery of
any messages, by mail, telecopier, telex or otherwise, (v) any loss
or delay in the transmission or otherwise of any document or draft
required in order to make a drawing under a Letter of Credit; or
(vi) any other circumstances whatsoever in making or failing to
make a payment under a Letter of Credit, except that the Company
shall have a claim against the Issuing Bank, and the Issuing Bank
shall be liable to the Company, to the extent of any direct, as
opposed to consequential, damages suffered by the Company which the
Company proves were caused by the Issuing Bank's gross negligence
in making or willful failure to make lawful payment under a Letter
of Credit after the presentation to it of a draft and other docu-
mentation, if any, strictly complying with the terms and conditions
of the Letter of Credit. In furtherance and not in limitation of
the foregoing, the Issuing 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.
10.4. Reliance by Agents.
Each Agent and the Issuing Bank shall be entitled to
rely, and shall be fully protected in relying, upon any writing,
resolution, notice, consent, certificate, affidavit, opinion,
letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it
to be genuine and correct and to have been signed, sent or made by
the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to the
Company), independent accountants and other experts selected by
such Agent or the Issuing Bank. Each Agent may treat each Bank, or
the Person designated in the last notice filed with it under this
paragraph, as the holder of all of the interests of such Bank in
its Loans and in its Revolving Credit Note until written notice of
transfer, signed by such Bank (or the Person designated in the last
notice filed with the Agents) and by the Person designated in such
written notice of transfer, in form and substance satisfactory to
the Agents, shall have been filed with the Agents. Neither of the
Agents shall be under any duty to examine or pass upon the validi-
ty, effectiveness or genuineness of the Loan Documents or any
instrument, document or communication furnished pursuant thereto or
in connection therewith, and the Agents shall be entitled to assume
that the same are valid, effective and genuine, have been signed or
sent by the proper parties and are what they purport to be. Each
Agent shall be fully justified in failing or refusing to take any
action under the Loan Documents unless it shall first receive such
advice or concurrence of the Required Banks as it deems appropri-
ate. The Agents shall in all cases be fully protected in acting,
or in refraining from acting, under the Loan Documents in accor-
dance with a request of the Required Banks, and such request and
any action taken or failure to act pursuant thereto shall be
binding upon all the Banks and all future holders of the Revolving
Credit Notes.
10.5. Notice of Default.
Neither Agent shall be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default unless
such Agent has received written notice thereof from a Bank or the
Company. In the event that an Agent receives such a notice, such
Agent shall promptly give notice thereof to the Banks. The Agents
shall take such action with respect to such Default or Event of
Default as shall be reasonably directed by the Required Banks,
provided, however, that unless and until the Agents shall have
received such directions, the Agents may (but shall not be obligat-
ed to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem to be
in the best interests of the Banks.
10.6. Non-Reliance on Agents, Issuing Banks and Other Banks.
Each Bank expressly acknowledges that neither of the
Agents, the Issuing Bank nor any of their respective officers,
directors, employees, agents, attorneys-in-fact or affiliates has
made any representations or warranties to it and that no act by the
Agents or the Issuing Bank, hereafter, including any review of the
affairs of the Company or its Material Subsidiaries, shall be
deemed to constitute any representation or warranty by the Agents
or the Issuing Bank to any Bank. Each Bank represents to the
Agents, and the Issuing Bank that it has, independently and without
reliance upon the Agents, the Issuing Bank or any other Bank, and
based on such documents and information as it has deemed appropri-
ate, made its own evaluation of and investigation into the busi-
ness, operations, Property, financial and other condition and
creditworthiness of the Company and its Material Subsidiaries and
Enterprises and made its own decision to enter into this Agreement.
Each Bank also represents that it will, independently and without
reliance upon the Agents, the Issuing Bank or any other Bank, and
based on such documents and information as it shall deem appropri-
ate at the time, continue to make its own credit analysis, evalua-
tions and decisions in taking or not taking action under this
Agreement or any of the Loan Documents, and to make such investiga-
tion as it deems necessary to inform itself as to the business,
operations, Property, financial and other condition and
creditworthiness of the Company and its Material Subsidiaries and
Enterprises. Except for notices, reports and other documents
expressly required to be furnished to the Banks by the Agents or
the Issuing Bank hereunder, neither the Agents nor the Issuing Bank
shall have any duty or responsibility to provide any Bank with any
credit or other information concerning the business, operations,
Property, financial and other condition or creditworthiness of the
Company or its Material Subsidiaries which may come into the
possession of the Agents or any of their respective officers,
directors, employees, agents, attorneys-in-fact or affiliates.
10.7. Indemnification.
(a) Each Bank agrees to indemnify each of the Adminis-
trative Agent and the Collateral Agent in their respective capaci-
ties as such (to the extent not promptly reimbursed by the Company
and without limiting or creating the obligation of the Company to
do so), pro rata according to its Commitments, from and against any
and all liabilities, obligations, claims, losses, damages, penal-
ties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever including, without limitation, any amounts
paid to the Banks (through the Agents) by the Company pursuant to
the terms hereof, that are subsequently rescinded or avoided, or
must otherwise be restored or returned) which may at any time
(including, without limitation, at any time following the payment
of the Revolving Credit Notes) be imposed on, incurred by or
asserted against the Agents or either of them in any way relating
to or arising out of this Agreement, the other Loan Documents or
any other documents contemplated by or referred to herein or the
transactions contemplated hereby or any action taken or omitted to
be taken by the Agents or either of them under or in connection
with any of the foregoing; provided, however, that no Bank shall be
liable for the payment of any portion of such liabilities, obliga-
tions, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements to the extent resulting solely
from the gross negligence or willful misconduct of the Administra-
tive Agent or the Collateral Agent, as the case may be. The agree-
ments in this paragraph shall survive the payment of the Revolving
Credit Notes and all other amounts payable under the Loan Docu-
ments.
(b) Each Bank agrees to indemnify the Issuing Bank in
its capacity as such (to the extent not promptly reimbursed by the
Company and without limiting or creating the obligation of the
Company to do so), pro rata according to its Commitments, from and
against any and all liabilities, obligations, claims, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever (other than those relating to
claims against a Bank for failure to comply with its obligations
under paragraph 2.9 in which case such indemnity is given solely by
such Bank), including, without limitation, any amounts paid to the
Banks (through the Agents) by the Company pursuant to the terms
hereof, that are subsequently rescinded or avoided, or must other-
wise be restored or returned) which may at any time (including,
without limitation, at any time following the payment of the
Revolving Credit Notes) be imposed on, incurred by or asserted
against the Issuing Bank in any way relating to or arising out of
its obligations with respect to Letters of Credit; provided,
however, that no Bank shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penal-
ties, actions, judgments, suits, costs, expenses or disbursements
to the extent resulting from the failure of the Issuing Bank to
materially comply with the provisions of the Letters of Credit. The
agreements in this paragraph shall survive the payment of the
Revolving Credit Notes and all other amounts payable under the Loan
Documents.
10.8. Agents in Their Individual Capacities.
BNY and NationsBank and their respective affiliates may
make loans to, accept deposits from, issue letters of credit for
the account of and generally engage in any kind of business with,
the Company and its Material Subsidiaries and Enterprises as though
BNY was not Administrative Agent and NationsBank was not Collateral
Agent hereunder. With respect to the Commitment made or renewed by
BNY or NationsBank, as the case may be, and the Revolving Credit
Note issued to BNY or NationsBank, as the case may be, BNY or
NationsBank, as the case may be, shall have the same rights and
powers under this Agreement as any Bank and may exercise the same
as though it was not the Administrative Agent or Collateral Agent,
as the case may be, and the terms "Bank" and "Banks" shall in each
case include BNY and NationsBank in their respective individual
capacities.
10.9. Successor Agents; Issuing Bank.
(a) Administrative Agent. If at any time the Administra-
tive Agent deems it advisable, in its sole discretion, it may
submit to each of the Banks a written notification of its resigna-
tion as Administrative Agent under this Agreement, such resignation
to be effective on the thirtieth day after the date of such notice.
Upon any such resignation, if NationsBank is the then acting
Collateral Agent, NationsBank shall have the right to become the
Administrative Agent. If NationsBank is not the then acting
Collateral Agent or if NationsBank declines to act as Administra-
tive Agent in a writing delivered to the then acting Administrative
Agent and the Banks within thirty days after the resignation of the
Administrative Agent, the Required Banks shall have the right to
appoint from among the Banks a successor Administrative Agent,
which successor Administrative Agent shall be reasonably acceptable
to the Company, provided, however, that in the event that a Default
or an Event of Default has occurred and is then continuing, such
successor Administrative Agent need not be acceptable to the
Company. If no successor Administrative Agent shall have been so
appointed by the Required Banks and accepted such appointment
within 30 days after the retiring Administrative Agent's giving of
notice of resignation, then the retiring Administrative Agent may,
on behalf of the Banks, appoint a successor Administrative Agent,
which successor Administrative Agent shall be a commercial bank
organized under the laws of the United States of America or of any
State thereof and having a combined capital and surplus of at least
$100,000,000 and which successor Administrative Agent shall be
reasonably acceptable to the Company, provided, however, that in
the event that a Default or an Event of Default has occurred and is
then continuing, such successor Administrative Agent need not be
acceptable to the Company. Upon the acceptance of any appointment
as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed
to and become vested with all the rights, powers, privileges and
duties of the retiring Administrative Agent, and the retiring
Administrative Agent's rights, powers, privileges and duties as
Administrative Agent under this Agreement shall be terminated. The
Company and the Banks shall execute such documents as shall be
necessary to effect such appointment. After any retiring Adminis-
trative Agent's resignation or removal hereunder as Administrative
Agent, the provisions of this paragraph 10.9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent under this Agreement. If at any time
hereunder there shall not be a duly appointed and acting Adminis-
trative Agent, the Company agrees to make each payment due hereun-
der and under its Revolving Credit Note directly to the Banks
entitled thereto during such time.
(b) Collateral Agent. If at any time the Collateral
Agent deems it advisable, in its sole discretion, it may submit to
each of the Banks a written notification of its resignation as
Collateral Agent under this Agreement, such resignation to be
effective on the thirtieth day after the date of such notice. Upon
any such resignation, if BNY is the then acting Administrative
Agent, BNY shall have the right to become the Collateral Agent. If
BNY is not the then acting Administrative Agent or if BNY declines
to act as Collateral Agent in a writing delivered to the then
acting Collateral Agent and the Banks within thirty days after the
resignation of the Collateral Agent, the Required Banks shall have
the right to appoint from among the Banks a successor Collateral
Agent, which successor Collateral Agent shall be reasonably accept-
able to the Company, provided, however, that in the event that a
Default or an Event of Default has occurred and is then continuing,
such successor Administrative Agent need not be acceptable to the
Company. If no successor Collateral Agent shall have been so
appointed by the Required Banks and accepted such appointment
within 30 days after the retiring Collateral Agent's giving of
notice of resignation, then the retiring Collateral Agent may, on
behalf of the Banks, appoint a successor Collateral Agent, which
successor Collateral Agent shall be a commercial bank organized
under the laws of the United States of America or of any State
thereof and having a combined capital and surplus of at least
$100,000,000 and which successor Collateral Agent shall be reason-
ably acceptable to the Company, provided, however, that in the
event that a Default or an Event of Default has occurred and is
then continuing, such successor Administrative Agent need not be
acceptable to the Company. Upon the acceptance of any appointment
as Collateral Agent hereunder by a successor Collateral Agent, such
successor Collateral Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the
retiring Collateral Agent, and the retiring Collateral Agent's
rights, powers, privileges and duties as Collateral Agent under
this Agreement shall be terminated. The Company and the Banks
shall execute such documents as shall be necessary to effect such
appointment and the retiring Collateral Agent shall deliver all
Pledged Collateral to the successor Collateral Agent. After any
retiring Collateral Agent's resignation or removal hereunder as
Collateral Agent, the provisions of this paragraph 10.9 shall inure
to its benefit as to any actions taken or omitted to be taken by it
while it was Collateral Agent under this Agreement.
(c) Issuing Bank. If at any time the Issuing Bank deems
it advisable, in its sole discretion, it may submit to each of the
Banks a written notification of its resignation as Issuing Bank
under this Agreement, such resignation to be effective only upon
the agreement of another Bank to act as the successor Issuing Bank.
Upon any such resignation, if BNY is the then acting Administrative
Agent, BNY shall have the right to become the Issuing Bank. If BNY
is not the then acting Administrative Agent or if BNY declines to
act as Issuing Bank in a writing delivered to the resigning Issuing
Bank and the Banks within thirty days after the resignation of the
Issuing Bank, the Required Banks shall have the right to appoint
from among the Banks a successor Issuing Bank, which successor
Issuing Bank shall be reasonably acceptable to the Company, provid-
ed, however, that in the event that a Default or an Event of
Default has occurred and is then continuing, such successor Issuing
Bank need not be acceptable to the Company. If no successor
Issuing Bank shall have been so appointed by the Required Banks and
accepted such appointment within 30 days after the retiring Issuing
Bank's giving of notice of resignation, then the retiring Issuing
Bank may, on behalf of the Banks, appoint a successor Issuing Bank,
which successor Issuing Bank shall be a commercial bank organized
under the laws of the United States of America or of any State
thereof and having a combined capital and surplus of at least
$100,000,000 and which successor Issuing Bank shall be reasonably
acceptable to the Company, provided, however, that in the event
that a Default or an Event of Default has occurred and is then
continuing, such successor Issuing Bank need not be acceptable to
the Company. Upon the acceptance of any appointment as Issuing
Bank hereunder by a successor Issuing Bank, such successor Issuing
Bank shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Issuing Bank,
and the retiring Issuing Bank's rights, powers, privileges and
duties as Issuing Bank under this Agreement shall be terminated.
The Company, the Issuing Bank and the Banks shall execute such
documents as shall be necessary to effect such appointment and will
take such action as may be reasonable under the circumstances to
cause Letters of Credit issued by the successor Issuing Bank to be
substituted for outstanding Letters of Credit issued by the retir-
ing Issuing Bank.
10.10. Release of Collateral.
Each Bank hereby authorizes the Collateral Agent,
without obtaining any further consent or approval from the Banks,
to execute releases of Liens of any Property subject to a Mortgage
in connection with any release of Lien authorized or required under
paragraph 7.16.
11. OTHER PROVISIONS.
11.1. Amendments and Waivers.
With the written consent of the Required Banks, the
Administrative Agent and the appropriate parties to the Loan
Documents may, from time to time, enter into written amendments,
supplements or modifications thereof and, with the consent of the
Required Banks, the Administrative Agent on behalf of the Banks may
execute and deliver to any such parties a written instrument
waiving, on such terms and conditions as the Administrative Agent
may specify in such instrument, any of the requirements of the Loan
Documents or any Default or Event of Default and its consequences;
provided, however, that no such amendment, supplement, modification
or waiver shall (i) change the Commitments of any Bank, (ii) extend
the maturity date of any Revolving Credit Note or extend the
Revolving Credit Termination Date (except as provided in paragraph
2.20), (iii) decrease the rate, or extend the time of payment, of
interest of, or change or forgive the principal amount of, or
change the pro rata allocation of payments under, any Revolving
Credit Note, (iv) decrease the Revolving Credit Commitment Fees or
the Letter of Credit Commissions, or extend the time of payment
thereof, (v) release or discharge any guarantor from its obliga-
tions under a guarantee, (vi) release all or any part of the
Collateral except to the extent (x) that the Collateral Agent shall
be required or permitted to do so under the terms and provisions of
the Loan Documents, (y) such Collateral is permitted to be sold or
otherwise disposed of under this Agreement or (z) a security
interest in such Collateral is permitted to be granted to another
Person under this Agreement (vii) waive or consent to any amendment
of the subordination provisions of the Enterprises Subordinated
Indenture or the Debenture Purchase Agreement or (viii) change the
provisions of paragraphs 2.15, 2.16, 2.17, 2.19, 8.15, 10.7, 11.1
or 11.11 without the consent of all of the Banks; and provided
further that no such amendment, supplement, modification or waiver
shall amend, modify or waive any provision of paragraph 10 or
otherwise change any of the rights or obligations of either Agent
hereunder or under the Loan Documents without the written consent
of such Agents and the Issuing Bank, and provided further that no
such amendment, supplement, modification or waiver shall amend,
modify or waive any provision of paragraphs 2.8, 2.9, 2.10 or 2.11
or otherwise change any of the rights or obligations of the Issuing
Bank hereunder or under the Loan Documents without the written
consent of the Issuing Bank. Any such amendment, supplement,
modification or waiver shall apply equally to each of the Banks and
shall be binding upon the parties to the applicable agreement, the
Banks, the Administrative Agent and all future holders of the
Revolving Credit Notes. In the case of any waiver, the parties to
the applicable agreement, the Banks and the Agents shall be re-
stored to their former position and rights hereunder and under the
Revolving Credit Notes and the other Loan Documents, and any
Default or Event of Default waived shall not extend to any subse-
quent or other Default or Event of Default, or impair any right
consequent thereon. Notwithstanding the foregoing, the provisions
of paragraph 9.2 of this Agreement may not be amended, modified or
waived without the prior written consent of the Bank and the
Franchisor.
11.2. Notices.
All notices, requests and demands to or upon the respec-
tive parties hereto to be effective shall be in writing and, unless
otherwise expressly provided herein, shall be deemed to have been
duly given or made when delivered by hand, or when deposited in the
mail, first-class postage prepaid, or, in the case of telecopier
notice, when sent (and confirmed by telephone), addressed as
follows in the case of the Company and the Agents, and as set forth
on Schedule 1.1 in the case of each of the Banks, or to such other
addresses as to which the Agents may be hereafter notified by the
respective parties hereto or any future holders of the Revolving
Credit Notes:
if to the Company, at:
TPI Restaurants, Inc.
2158 Union Avenue
Memphis, Tennessee 38104
Attention: Frederick W. Burford,
Vice President and
Chief Financial Officer
Telephone: (901) 725-6400
Telecopy: (901) 725-6418
with copies to:
TPI Enterprises, Inc.
777 South Flagler Drive
Phillips Point Plaza-East Tower
Suite 909
West Palm Beach, Florida 33401
Attention: President
Telephone: (407) 835-8888
Telecopy: (407) 835-4982
and
Skadden, Arps, Slate, Meagher & Flom
1440 New York Avenue, N.W.
Washington, D.C. 20005
Attention: Ronald Barusch, Esq.
Telephone: (202) 371-7990
Telecopy: (202) 393-5760,
if to the Administrative Agent, at:
The Bank of New York
One Wall Street
Agency Function Administration
18th Floor
New York, New York 10286
Attention: Kalyani Bose
Telephone: (212) 635-4693
Fax: (212) 635-6365 or 6366 or 6367
with a copy to:
The Bank of New York
One Wall Street
22nd Floor
New York, New York 10286
Attention: Gregory L. Batson,
Assistant Vice President
Telephone: (212) 635-6898
Fax: (212) 635-6434,
and if to the Collateral Agent, at:
NationsBank of North Carolina, N.A.
One NationsBank Plaza
Charlotte, North Carolina 28255
Attention: Elizabeth S. Garver,
Corporate Lending Support
Telephone: (704) 386-8382
Telecopy: (704) 386-8694
with a copy to:
NationsBank Corporation
One NationsBank Plaza
Location Code: M-5
Nashville, Tennessee 37239-1967
Attention: Steven L. Dalton,
Vice President
Telephone: (615) 749-4151
Telecopy: (615) 749-4640,
except that any notice, request or demand by the Company pursuant
to paragraphs 2.3, 2.4, 2.5 or 2.6 shall not be effective until
received.
11.3. No Waiver; Cumulative Remedies.
No failure to exercise and no delay in exercising, on
the part of the Agents or any Bank, any right, remedy, power or
privilege under any Revolving Credit Loan Document shall operate as
a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege under any Loan Document preclude
any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers
and privileges under the Loan Documents are cumulative and not
exclusive of any rights, remedies, powers and privileges provided
by law.
11.4. Survival of Representations and Warranties.
All representations and warranties made hereunder and in
any document, certificate or statement delivered pursuant hereto or
in connection herewith shall survive the execution and delivery of
this Agreement, the Revolving Credit Notes and the other Loan
Documents.
11.5. Payment of Expenses and Taxes.
The Company agrees, promptly upon presentation of a
statement or invoice therefor, and whether any Revolving Credit
Loan is made, (i) to immediately pay or reimburse the Agents and
the Issuing Bank for all their reasonable out-of-pocket costs and
expenses reasonably incurred in connection with the preparation and
execution of, and any amendment, consent, waiver, supplement or
modification to, the Loan Documents (whether or not consummated),
the granting of the Mortgages (and any release thereof) pursuant to
paragraph 7.16, any documents prepared in connection with any of
the foregoing and the consummation of the transactions contemplated
thereby, including, without limitation, the reasonable fees and
disbursements of Special Counsel and the Evaluator, (ii) to pay or
reimburse the Agents, the Issuing Bank and each of the Banks for
all of their respective costs and expenses incurred in connection
with the enforcement or preservation of any rights under the Loan
Documents and any such documents, including, without limitation,
reasonable fees and disbursements of counsel, (iii) to pay, indem-
nify, and hold each Bank, the Agents and the Issuing Bank harmless
from, any and all recording and filing fees and any and all liabil-
ities with respect to, or resulting from any delay in paying,
stamp, excise and other similar taxes, if any, which may be payable
or determined to be payable in connection with the execution and
delivery of, or consummation of any of the transactions contemplat-
ed by, or any amendment, supplement or modification of, or any
waiver or consent under or in respect of, the Loan Documents and
any such other documents, and (iv) to pay, indemnify and hold each
Bank and the Agents, the Issuing Bank and each of their respective
officers, directors and employees harmless from and against any and
all other liabilities, obligations, claims, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disburse-
ments of any kind or nature whatsoever (including, without limita-
tion, reasonable counsel fees and disbursements) with respect to
the execution, delivery, enforcement and performance of the Loan
Documents or the use of the proceeds of the Revolving Credit Loans
(all the foregoing, collectively, the "indemnified liabilities")
and, if and to the extent that the foregoing indemnity may be
unenforceable for any reason, the Company agrees to make the
maximum payment permitted under applicable law; provided, however,
that the Company shall have no obligation hereunder to pay indemni-
fied liabilities to either Agent, the Issuing Bank or any Bank
arising from the gross negligence or willful misconduct of such
Agent or such Bank or claims between one indemnified party and
another indemnified party. The agreements in this paragraph shall
survive the termination of the Commitments and the payment of the
Revolving Credit Notes, and all other amounts payable hereunder.
11.6. Lending Offices.
Each Bank shall have the right at any time and from time
to time to transfer any Revolving Credit Loan to a different
office, provided that (i) such Bank shall promptly notify the
Administrative Agent and the Company of any such change of office
and (ii) such Bank shall not transfer such Loan to such office if
such transfer will increase the costs to the Company under para-
graphs 2.11, 2.13 or 2.15, unless such Bank and its lending office
will suffer economic, legal or regulatory disadvantage if it does
not so transfer such Loan. Such office shall thereupon become such
Bank's Domestic Lending Office or Eurodollar Lending Office, as the
case may be. Each Bank agrees that, upon the occurrence of any
event giving to any increased cost indemnity under paragraphs 2.11,
2.13 or 2.15 with respect to such Bank, it will, if requested by
the Company, use reasonable efforts (subject to overall policy
considerations of such Bank) to designate another lending office
for any Revolving Credit Loans affected by such event, provided
that such designation is made on such terms that such Bank and its
lending office suffer no economic, legal or regulatory disadvan-
tage, with the object of avoiding the consequence of the event
giving rise to the operation of any such paragraph. Nothing in
this paragraph 11.6 shall affect or postpone any of the obligations
of the Company or the right of any Bank provided in paragraphs 2.11
and 2.15.
11.7. Successors and Assigns.
(a) The Loan Documents to which the Company is a party
shall be binding upon and inure to the benefit of the Company, the
Banks, the Agents, all future holders of the Revolving Credit Notes
and their respective successors and assigns, except that the
Company may not assign, delegate or transfer any of its rights or
obligations under any Loan Document without the prior written
consent of the Agents and each Bank.
(b) Each Bank shall have the right at any time, upon
written notice to the Administrative Agent of its intent to do so,
to sell, assign, transfer or negotiate all or any part of such
Bank's rights with respect to its Revolving Credit Loans, its
Revolving Credit Commitment, and its Revolving Credit Note to one
or more of its Affiliates, to one or more of the other Banks (or to
Affiliates of such Bank or such other Banks) or, with the prior
written consent of the Company (which consent shall not be unrea-
sonably withheld and shall not be required upon the occurrence and
during the continuance of an Event of Default), to sell, assign,
transfer or negotiate all or any part of such Bank's rights and
obligations with respect to its Revolving Credit Loans, its Revolv-
ing Credit Commitment and its Revolving Credit Note to any other
bank, insurance company, pension fund, mutual fund or other finan-
cial institution, provided that (i) each such sale, assignment,
transfer or negotiation (other than sales, assignments, transfers
or negotiations (x) to Affiliates of such Bank or (y) of a Bank's
entire interest) shall be in a minimum amount of $5,000,000 and
(ii) there shall be paid to the Administrative Agent by the assign-
ing Bank a fee (the "Assignment Fee") of $2,000; provided, however,
that nothing herein shall affect the right of the Banks to sell
their Revolving Credit Loans, Revolving Credit Commitment and
Revolving Credit Note to the Franchisor without the consent of the
Company pursuant to paragraph 9.2. For each assignment, the
parties to such assignment shall execute and deliver to the Admin-
istrative Agent for its acceptance and recording an Assignment and
Acceptance Agreement. Upon execution, delivery, acceptance and
recording by the Administrative Agent, from and after the effective
date specified in such Assignment and Acceptance Agreement and
agreed to by the Agents, the assignee thereunder shall be a party
hereto and, to the extent provided in such Assignment and Accep-
tance Agreement, the assignor Bank thereunder shall be released
from its obligations under this Agreement. The Company agrees upon
written request of the Administrative Agent to execute and deliver
(1) to such assignee, a Revolving Credit Note, dated the effective
date of such Assignment and Acceptance Agreement, in an aggregate
principal amount equal to the Revolving Credit Loans assigned to,
and Revolving Credit Commitment assumed by, such assignee and (2)
to such assignor Bank, a Revolving Credit Note, dated the effective
date of such Assignment and Acceptance Agreement, in an aggregate
principal amount equal to the balance of such assignor Bank's
Revolving Credit Loans and Revolving Credit Commitment, if any, and
each assignor Bank shall cancel and return to the Company its
existing Revolving Credit Note. Upon any such sale, assignment or
other transfer, the Revolving Credit Commitments and Commitment
Percentages set forth in Exhibit A shall be adjusted accordingly.
(c) Each Bank may grant participations in all or any
part of its Revolving Credit Loans, its Revolving Credit Note and
its Revolving Credit Commitments to the parent, any Affiliate,
Subsidiary or branch of such Bank or to one or more banks, insur-
ance companies, pension funds, mutual funds or other financial
institutions, provided that (i) such Bank's obligations under this
Agreement shall remain unchanged, (ii) such Bank shall remain
solely responsible to the other parties hereto for the performance
of such obligations, (iii) the Company, the Agents and the other
Banks shall continue to deal directly with such Bank in connection
with such Bank's rights and obligations under the Loan Documents
and (iv) the rights of any holder of any such participation shall
be limited to the right to consent to any action taken or omitted
to be taken by such Bank under this Agreement which would (1)
increase the Aggregate Revolving Credit Commitments, (2) reduce the
Revolving Credit Commitment Fees or Letter of Credit Commissions or
the interest rate payable on, or increase or forgive the principal
amount of the Revolving Credit Notes or (3) extend the maturity
date of the Revolving Credit Notes or extend the Revolving Credit
Termination Date, or postpone the payment or scheduled due dates
for payments of principal, interest, Revolving Credit Commitment
Fees or Letter of Credit Commissions. The Company acknowledges and
agrees that any such participant shall for purposes of paragraphs
2.11, 2.12, 2.13, 2.14, 2.15, 2.16 and 2.19 be deemed to be a
"Bank", provided that in no event shall the Company be liable for
any amounts under said paragraphs in excess of the amounts for
which it would be liable but for such participation.
(d) Notwithstanding anything herein to the contrary, any
Bank may at any time assign all or any portion of its rights under
the Loan Documents to a Federal Reserve Bank. No such assignment
shall release such Bank from its obligations thereunder.
(e) No Bank shall, as between and among the Company, the
Agents, and such Bank, be relieved of any of its obligations under
the Loan Documents as a result of any sale, assignment, transfer or
negotiation of, or granting of participations in, all or any part
of its Revolving Credit Loans, its Revolving Credit Commitment or
its Revolving Credit Note, except that a Bank shall be relieved of
its obligations to the extent of any sale, assignment, transfer, or
negotiation of all or any part of its Revolving Credit Loans, its
Revolving Credit Commitment or its Revolving Credit Note pursuant
to paragraph (b) above.
11.8. Counterparts.
The Loan Documents may be executed by one or more of the
parties to this Agreement on any number of separate counterparts
and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. Each such counterpart
shall become effective when counterparts have been executed by all
parties hereto. It shall not be necessary in making proof of any
Loan Document or of any document required to be executed and
delivered in connection herewith or therewith to produce or account
for more than one counterpart signed by the party to be charged. A
set of the copies of the Loan Documents signed by all the parties
shall be deposited with each of the Company and the Agents.
11.9. Adjustments; Set-off.
(a) If any Bank (a "Benefited Bank") shall at any time
receive any payment of all or any part of its Loans, or interest
thereon, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, pursuant to events or
proceedings of the nature referred to in paragraph 9.1 (h) or (i),
or otherwise) in a greater proportion than any such payment to and
collateral received by any other Bank in respect of such other
Bank's Loans, or interest thereon, such Benefited Bank shall
purchase for cash from the other Banks such portion of each such
other Bank's Loans, or shall provide such other Banks with the
benefits of any such collateral, or the proceeds thereof, as shall
be necessary to cause such Benefited Bank to share the excess
payment or benefits of such collateral or proceeds ratably with
each of the Banks; provided, however, that if all or any portion of
such excess payment or benefits is thereafter recovered from such
Benefited Bank, such purchase shall be rescinded, and the purchase
price and benefits returned, to the extent of such recovery, but
without interest. The Company agrees that each Bank so purchasing
a portion of another Bank's Loans may exercise all rights of
payment (including, without limitation, rights of set-off, to the
extent permitted by law) with respect to such portion as fully as
if such Bank were the direct holder of such portion.
(b) In addition to any rights and remedies of the Banks
provided by law, upon the occurrence and during the continuance of
an Event of Default and the acceleration of the obligations owing
in connection with this Agreement, or at any time upon the occur-
rence and during the continuance of an Event of Default under
paragraph 9.1(a) or 9.1(b), each Bank shall have the right, without
prior notice to the Company, any such notice being expressly waived
by the Company to the extent not prohibited by applicable law, to
set-off and apply against any indebtedness, whether matured or
unmatured, of the Company to such Bank, any amount owing from such
Bank to the Company, at, or at any time after, the happening of any
of the above-mentioned events. To the extent not prohibited by
applicable law, the aforesaid right of set-off may be exercised by
such Bank against the Company or against any trustee in bankruptcy,
custodian, debtor in possession, assignee for the benefit of
creditors, receiver, or execution, judgment or attachment creditor
of the Company, or against anyone else claiming through or against
the Company or such trustee in bankruptcy, custodian, debtor in
possession, assignee for the benefit of creditors, receivers, or
execution, judgment or attachment creditor, notwithstanding the
fact that such right of set-off shall not have been exercised by
such Bank prior to the making, filing or issuance, or service upon
such Bank of, or of notice of, any such petition, assignment for
the benefit of creditors, appointment or application for the
appointment of a receiver, or issuance of execution, subpoena,
order or warrant. Each Bank agrees promptly to notify the Company
and the Administrative Agent after any such set-off and application
made by such Bank, provided that the failure to give such notice
shall not affect the validity of such set-off and application.
11.10. Indemnity.
The Company agrees to indemnify and hold harmless the
Agents and each Bank and their respective affiliates, directors,
officers, employees, attorneys and agents (each an "Indemnified
Person") from and against any loss, cost, liability, damage or
expense (including the reasonable fees and out-of-pocket expenses
of counsel of such Indemnified Person, including all local counsel
hired by any such counsel) incurred by such Indemnified Person in
investigating, preparing for, defending against, or providing
evidence, producing documents or taking any other action in respect
of, any commenced or threatened litigation, administrative proceed-
ing or investigation under any federal securities law or any other
statute of any jurisdiction, or any regulation, or at common law or
otherwise, which is alleged to arise out of or is based upon (i)
any untrue statement or alleged untrue statement of any material
fact by the Company in any document or schedule executed or filed
with the SEC or any other Governmental Authority by or on behalf of
the Company; (ii) any omission or alleged omission to state any
material fact required to be stated in such document or schedule,
or necessary to make the statements made therein, in light of the
circumstances under which made, not misleading; (iii) any acts,
practices or omissions or alleged acts, practices or omissions of
the Company or its agents relating to the use of the proceeds of
any or all borrowings made by the Company which are alleged to be
in violation of paragraph 2.18, or in violation of any federal
securities law or of any other statute, regulation or other law of
any jurisdiction applicable thereto; (iv) all actions taken to
obtain security interests in Collateral and (v) after the occur-
rence and during the continuance of an Event of Default, all
actions taken to realize on the Collateral. The indemnity set
forth herein shall be in addition to any other obligations or
liabilities of the Company to each Indemnified Person hereunder or
at common law or otherwise, and shall survive any termination of
this Agreement, the expiration of the Aggregate Revolving Credit
Commitments and the payment of all indebtedness of the Company
under the Loan Documents, provided that the Company shall have no
obligation under this paragraph to an Indemnified Person with
respect to any of the foregoing to the extent found in a final
judgment of a court to have resulted from the gross negligence or
wilful misconduct of such Indemnified Person or arising solely from
claims between one such Indemnified Person and another such Indem-
nified Person.
11.11. Governing Law.
Except as otherwise expressly provided to the contrary
in any provision thereof, the Loan Documents and the rights and
obligations of the parties thereunder shall be governed by, and
construed and interpreted in accordance with, the internal laws of
the State of New York, without regard to principles of conflict of
laws (other than Section 5-1401 of the New York General Obligations
Law).
11.12. Headings, Plurals.
Paragraph headings have been inserted in the Loan
Documents for convenience only and shall not be construed to be a
part hereof or thereof. Unless the context otherwise requires,
words in the singular number include the plural, and words in the
plural include the singular.
11.13. Severability.
Every provision of the Loan Documents is intended to be
severable, and if any term or provision hereof or thereof shall be
invalid, illegal or unenforceable for any reason, the validity,
legality and enforceability of the remaining provisions hereof or
thereof shall not be affected or impaired thereby, and any invalid-
ity, illegality or unenforceability in any jurisdiction shall not
affect the validity, legality or enforceability of any such term or
provision in any other jurisdiction.
11.14. Integration.
All exhibits to the Loan Documents shall be deemed to
be a part thereof. The Loan Documents and the Fee Letter embody
the entire agreement and understanding among the Company, the
Agents and the Banks with respect to the subject matter thereof and
supersede all prior agreements and understandings among the Compa-
ny, the Agents and the Banks with respect to the subject matter
hereof and thereof.
11.15. Consent to Jurisdiction.
The Company and the Banks hereby irrevocably submits to
the jurisdiction of any New York State or Federal Court sitting in
the City and County of New York (Borough of Manhattan) over any
suit, action or proceeding arising out of or relating to the Loan
Documents. The Company hereby irrevocably waives, to the fullest
extent permitted by law, any objection which it may now or hereaf-
ter have to the laying of the venue of any such suit, action or
proceeding brought in such a court and any claim that any such
suit, action or proceeding brought in such a court has been brought
in an inconvenient forum. The Company hereby agrees that a final
judgment in any such suit, action or proceeding brought in such a
court, after all appropriate appeals, shall be conclusive and
binding upon it.
11.16. Service of Process.
Process may be served in any suit, action, counterclaim
or proceeding of the nature referred to in paragraph 11.16 by
mailing copies thereof by registered or certified mail, postage
prepaid, return receipt requested, to the address of the Company
set forth in paragraph 11.2 or to any other address of which the
Company shall have given written notice to the Agents. The Company
hereby agrees that such service (i) shall be deemed in every
respect effective service of process upon it in any such suit,
action, counterclaim or proceeding, and (ii) shall to the fullest
extent enforceable by law, be taken and held to be valid personal
service upon and personal delivery to it.
11.17. No Limitation on Service or Suit.
Nothing in the Loan Documents or any modification,
waiver, or amendment thereto shall affect the right of the Agents
or any Bank to serve process in any manner permitted by law or
limit the right of the Agents or any Bank to bring proceedings
against the Company in the courts of any jurisdiction or jurisdic-
tions.
11.18. WAIVER OF TRIAL BY JURY.
THE AGENTS, THE BANKS, AND THE COMPANY EACH HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING OUT
OF, UNDER OR IN CONNECTION WITH THE LOAN DOCUMENTS OR THE TRANSAC-
TIONS CONTEMPLATED THEREIN. FURTHER, THE COMPANY HEREBY CERTIFIES
THAT NO REPRESENTATIVE OR AGENT OF THE AGENTS OR THE BANKS, OR
COUNSEL TO THE AGENTS, OR THE BANKS, HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT THE AGENTS, OR THE BANKS WOULD NOT, IN THE EVENT OF
SUCH LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL
PROVISION. THE COMPANY ACKNOWLEDGES THAT THE AGENTS, AND THE BANKS
HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, INTER ALIA, THE
PROVISIONS OF THIS PARAGRAPH.
11.19. Status as Senior Indebtedness.
The Indebtedness of the Company hereunder and under the
Loan Documents constitutes (i) "Senior Indebtedness of the Guaran-
tor" as defined in the Enterprises Subordinated Indenture and (ii)
"Senior Debt" as defined in the Debenture Purchase Agreement.
11.20. Concerning Schedule 8.2.
The Company represents that to the best of its knowl-
edge, Schedule 8.2 delivered on the Second Restatement Effective
Date accurately reflects the Liens existing on such date. The
Company has ordered UCC searches to confirm the contents of such
Schedule but such searches will not be available on or prior to the
Second Restatement Effective Date. Accordingly, the Company shall
be permitted to update such Schedule on receipt of the UCC search
reports (and the Agents shall be authorized to substitute such
updated Schedule for the Schedule included on the Second Restate-
ment Effective Date), provided, however, that such updated Schedule
shall not contain any Liens which were otherwise not Permitted
Liens on or before the Second Restatement Effective Date.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and
duly authorized officers as of the day and year first above writ-
ten.
TPI RESTAURANTS, INC.
By: /s/ Frederick W. Burford
Name: Frederick W. Burford,
Title: Vice President, Chief
Financial Officer and
Treasurer
THE BANK OF NEW YORK,
Individually and as
Administrative Agent
By: /s/ Gregory L. Batson
Name: Gregory L. Batson
Title: Assistant Vice President
NATIONSBANK OF NORTH CAROLINA, N.A.,
Individually and as
Collateral Agent
By: /s/ Steve L. Dalton
Name: Steve L. Dalton
Title: Vice President
FIRST TENNESSEE BANK NATIONAL
ASSOCIATION
By: /s/ William J. Harter
Name: William J. Harter
Title: Vice President
FIRST AMERICAN NATIONAL BANK
By: /s/ P. D. Houston, III
Name: P. D. Houston, III
Title: Executive Vice President
The undersigned hereby consents to the foregoing Second
Amended and Restated Credit Agreement.
TPI ENTERPRISES, INC.
By: /s/ Frederick W. Burford
Name: Frederick W. Burford,
Title: Executive Vice President
and Chief Financial
Officer
TPI COMMISSARY, INC.
TPI TRANSPORTATION, INC.
AS TO EACH OF THE FOREGOING
By: /s/ Frederick W. Burford
Name: Frederick W. Burford,
Title: Vice President and
Treasurer
Exhibit 10.2
AMENDMENT NO. 2 TO THE ENTERPRISES GUARANTY
AMENDMENT NO. 2 (this "Amendment"), dated as of January
31, 1995, to the AMENDED AND RESTATED GUARANTY, SECURITY AND
SUBORDINATION AGREEMENT, as amended by Amendment No. 1 and
Waiver No. 3, dated as of February 18, 1994 (the "Enterprises
Guaranty"), dated as of June 3, 1993, made by TPI
ENTERPRISES, INC., a New Jersey corporation ("Enterprises")
and TPI RESTAURANTS, INC., a Tennessee corporation (the
"Company"), to NATIONSBANK OF NORTH CAROLINA, N.A., as
Collateral Agent (in such capacity, the "Collateral Agent")
under the Second Amended and Restated Credit Agreement, dated
as of January 31, 1995, among the Company, the signatory
Banks thereto, The Bank of New York, as Administrative Agent
(in such capacity, the "Administrative Agent") and the
Collateral Agent (as the same may be amended, extended,
increased, modified, refunded or refinanced from time to
time, the "Credit Agreement").
RECITALS
A. Capitalized terms used herein which are not defined
herein and which are defined in the Credit Agreement shall
have the same meanings as therein defined.
B. Simultaneously with the execution and delivery
hereof, the Company, the Banks party thereto and the Agents
are, with Enterprises' consent, entering into the Credit
Agreement, which amends and restates the First Amended and
Restated Credit Agreement, dated as of June 3, 1993.
C. In connection with the execution and delivery of
the Credit Agreement, the Company, Enterprises, the Agents
and the Required Banks desire to amend the Enterprises
Guaranty in the manner and to the extent hereinafter set
forth.
D. A condition precedent to the effectiveness of the
Credit Agreement is the execution and delivery by Enterprises
of this Amendment.
In consideration of the foregoing and for other good and
valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:
1. Paragraph 6(f) is amended in its entirety to read
as follows:
(f) Litigation. Except as set
forth in the Form 10-K filed by
Enterprises with the SEC with respect to
its fiscal year ended December 26, 1993,
there are no actions, suits, arbitration
proceedings or claims (whether or not
purportedly on behalf of the Company,
any Material Subsidiary or Enterprises)
pending or, to the knowledge of the
Enterprises, threatened against the
Company, any Material Subsidiary or
Enterprises, or maintained by the
Company, any Material Subsidiary or
Enterprises, at law or in equity, before
any Governmental Authority which could
reasonably be expected to have a
Material Adverse Effect on Enterprises.
Except as set forth in the Form 10-K
referred to above, there are no
proceedings pending or, to the knowledge
of Enterprises, threatened against the
Company, any Material Subsidiary of the
Company or Enterprises, which (i) call
into question the validity or
enforceability of any of the Loan
Documents, (ii) have been brought or are
threatened to be brought by the
Franchisor and which seek (or are
expected to seek) to rescind, terminate,
revoke, cancel, withdraw, suspend or
modify or withhold any Franchise
Agreement between the Company or a
Material Subsidiary and the Franchisor,
or any right of the Company or any
Material Subsidiary thereunder or (iii)
have been brought or are threatened to
be brought by any Person (other than the
Franchisor) with respect to any
Franchise Agreement between the Company
or a Material Subsidiary and the
Franchisor or any right of the Company
or any Material Subsidiary thereunder
which could reasonably be expected to
have a Material Adverse Effect on
Enterprises.
2. Paragraph 6(m) is amended in its entirety to read
as follows:
(m) Financial Statements.
Enterprises has heretofore delivered to
the Banks (i) copies of Form 10-K for
the fiscal year of Enterprises ending
December 26, 1993, containing the
audited Consolidated Balance Sheet of
Enterprises and its Subsidiaries as of
December 26, 1993 and December 31, 1992,
and the related Consolidated Statements
of Operations, Cash Flows and
Shareholder's Equity for the periods
then ended and (ii) copies of its Form
10-Q for the thirteen week period ended
October 2, 1994, containing the
unaudited Consolidated Balance Sheet of
Enterprises and its Subsidiaries as of
October 2, 1994, and the related
unaudited Consolidated Statements of
Operations and Cash Flows for such
thirteen week period (collectively, with
the related notes and schedules, the
"Enterprises Financial Statements").
The Enterprises Financial Statements
fairly present the Consolidated
financial condition and results of the
operations of Enterprises and its
Subsidiaries as of the dates and for the
periods indicated therein and have been
prepared in conformity with GAAP.
Except as reflected in the Financial
Statements or in the footnotes thereto,
neither Enterprises nor any of its
Subsidiaries has any obligation or
liability of any kind (whether fixed,
accrued, contingent, unmatured or
otherwise) which, in accordance with
GAAP, should have been shown on the
Financial Statements and was not. Since
December 26, 1993, Enterprises and its
Subsidiaries has conducted their
respective businesses only in the
ordinary course and there has been no
Material Adverse Change other than as
disclosed in those filings by
Enterprises with the SEC prior to the
Second Restatement Effective Date
pursuant to the Exchange Act, copies of
which filings were delivered prior to
such date to the Agents and the Banks.
3. Paragraph 6(r) is amended in its entirety to read
as follows:
(r) Status as Senior Indebtedness.
The Indebtedness of the Company under
the Loan Documents constitutes (i)
"Senior Indebtedness of the Guarantor"
as defined in the Enterprises
Subordinated Indenture and (ii) Senior
Debt as defined in the Debenture
Purchase Agreement. The Indebtedness of
Enterprises under the Enterprises
Guaranty constitutes (i) "Senior
Indebtedness of the Company" as defined
in the Enterprises Subordinated
Indenture and (ii) "Senior Debt" as
defined in the Debenture Purchase
Agreement.
4. Paragraph 7(b)(v) is amended in its entirety to
read as follows:
(v) Prompt written notice of the
occurrence of a default or event of
default under and as defined in the
Enterprises Subordinated Indenture or
the Debenture Purchase Agreement,
together with all notices with respect
thereto sent by Enterprises to, or
received by Enterprises from, the
Trustee or any holder of Enterprises
Subordinated Debentures or the
Designated Debenture Holder under the
Debenture Purchase Agreement;
5. Paragraph 7 of the Enterprises Guaranty is amended
by adding the following new subparagraph (k) to the end
thereof:
(k) Liquidity. Maintain at all
times the sum of (i) cash and cash
equivalents of the type described in
paragraph 8.6(a), (b), (d) and (e) of
the Credit Agreement and (ii) the
Additional Enterprises Intercompany
Loans, of not less than $10,000,000.
6. Paragraph 8(e) of the Enterprises Guaranty is
amended in its entirety to read as follows:
(e) Dividends and Purchase of
Stock. Declare or pay any dividends
payable in cash or otherwise (other than
in the common Stock of Enterprises) or
apply any of its Property to the
purchase, redemption or other retirement
of, or set apart any sum for the payment
of any dividends on, or make any other
distribution by reduction of capital or
otherwise in respect of, any shares of
its capital Stock or other similar
equity interest or warrants or other
rights issued in respect thereof except
(i) the Company and any Subsidiary (as
defined in the Credit Agreement) of the
Company may make such payments as are
permitted by paragraph 8.5 of the Credit
Agreement, (ii) Enterprises may purchase
the stock or stock options held by an
employee of Enterprises whose employment
Enterprises terminates, provided, that
the amounts paid by Enterprises under
this clause (ii) shall not exceed
$500,000 in the aggregate, and provided
further that no Default or Event of
Default would exist immediately before
and after giving effect thereto and
(iii) Enterprises may make all payments
required to be made by it after the date
hereof with respect to 325,000 Stock
Appreciation Rights outstanding on the
Original Effective Date, provided, that
the amounts paid by Enterprises under
this clause (iii) shall not exceed
$1,000,000 in cash in the aggregate but
this clause (iii) shall not be deemed to
limit Enterprises' ability to use its
common Stock to satisfy Stock
Appreciation Rights.
7. Paragraph 8(f) of the Enterprises Guaranty is
amended by adding the following sentence to the end thereof.
Notwithstanding anything in this
Agreement to the contrary, Enterprises
may forgive $5,000,000 of Existing
Enterprises Intercompany Loans and treat
such forgiveness as a contribution to
the capital of the Company, provided
that no additional Stock is issued
therefore unless such Stock is delivered
and pledged to the Collateral Agent as
additional Collateral under this
Agreement.
8. Paragraph 12(a) of the Enterprises Guaranty is
amended in its entirety to read as follows:
(a) Enterprises shall fail to
observe or perform any term, covenant or
agreement contained in paragraphs 2,
7(c), 7(k), 8, 10(g) or 15(i) of this
Agreement; or
9. Paragraph 15(a) of the Enterprises Guaranty is
amended in its entirety to read as follows:
(a) No payment of any nature
whatsoever due in respect of the
Subordinated Debt and no Restricted
Payment payable to Enterprises shall be
made unless and until the Senior
Obligations have been first indefeasibly
paid in full in cash, except (i)
payments expressly permitted by
paragraphs 8.5 or 8.18(iii) of the
Credit Agreement and (ii) provided that
no Default or Event of Default shall
exist immediately before or after giving
effect thereto, (x) regularly scheduled
payments of interest on Pledged Debt and
(y) payments of principal and interest
on the Additional Enterprises
Intercompany Loans.
10. Schedules 6(a) 8(a), 8(b), 8(d), and 8(f) in the
form annexed hereto are substituted for such Schedules in the
Enterprises Guaranty.
11. Enterprises hereby (a) reaffirms and admits the
validity and enforceability of the Loan Documents and all of
its obligations thereunder, (b) agrees and admits that it has
no defenses to or offsets against any of its obligations to
either Agent or any Bank thereunder, (c) represents and
warrants that there exists no Default or Event of Default,
and (d) represents and warrants that the representations and
warranties made by it in the Enterprises Guaranty are true
and correct in all material respects on and as of the date
hereof.
12. This Amendment may be executed in any number of
counterparts, each of which shall be an original and all of
which shall constitute one amendment. It shall not be
necessary in making proof of this Amendment to produce or
account for more than one counterpart signed by the party to
be charged.
13. This Amendment is being delivered in and is
intended to be performed in the State of New York and shall
be governed by, and construed and interpreted in accordance
with, the internal laws of the State of New York, without
regard to principles of conflict of laws (other than Section
5-1401 of the New York General Obligations Law).
14. Except as amended hereby, the Credit Agreement and
the Enterprises Guaranty shall in all other respects remain
in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the date first above
written.
TPI ENTERPRISES, INC.
By: /s/ Frederick W. Burford
Name: Frederick W. Burford,
Title: Executive Vice President
and Chief Financial Officer
TPI RESTAURANTS, INC.
By: /s/ Frederick W. Burford
Name: Frederick W. Burford,
Title: Vice President and
Chief Financial Officer
NATIONSBANK OF NORTH CAROLINA,
N.A., Individually and as
Collateral Agent
By: /s/ Steve L. Dalton
Name: Steve L. Dalton
Title: Vice President
Exhibit 10.3
AMENDED AND RESTATED SECURITY AGREEMENT
AMENDED AND RESTATED SECURITY AGREEMENT (this
"Agreement"), dated as of January 31, 1995, made by TPI
RESTAURANTS, INC., a Tennessee corporation (the "Company"),
to NATIONSBANK OF NORTH CAROLINA, N.A., as Collateral Agent
(the "Collateral Agent") under the Second Amended and
Restated Credit Agreement described below.
A. The Company, the Agents and the Banks have entered
into a Second Amended and Restated Credit Agreement (the
"Credit Agreement"), dated as of January 31, 1995, among the
Company, the signatory Banks thereto, The Bank of New York,
as Administrative Agent, and the Collateral Agent.
Capitalized terms used herein that are not defined herein and
are defined in the Credit Agreement shall have the meanings
defined therein.
B. A condition precedent to the effectiveness of such
Credit Agreement is the execution and delivery by the Company
of this Agreement.
In consideration of the premises and agreements herein
contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
Company covenants and hereby agrees as follows:
1. Grant of Security Interest.
To secure the prompt and complete payment,
observance and performance of all of the obligations of the
Company now or hereafter existing under the Loan Documents
(as the same may be amended, increased, modified, renewed,
refinanced, refunded or extended from time to time,
collectively, the "Obligations"), the Company hereby assigns
and pledges to the Collateral Agent, for its benefit and for
the ratable benefit of the Banks, and hereby grants to the
Collateral Agent, for its benefit and for the ratable benefit
of the Banks, a security interest in all of the Company's
right, title and interest in and to the following, whether
now owned or existing or hereafter arising or acquired and
wherever located (collectively, the "Collateral"):
PLEDGED SHARES: All shares of Stock now owned or
hereafter acquired in TPI Commissary and TPI Transportation
together with all additions thereto, and all substitutions,
exchanges and replacements therefor, and all Proceeds thereof
(collectively, the "Pledged Shares");
PLEDGED DEBT: All notes and other instruments evidencing
Indebtedness of TPI Commissary and TPI Transportation to the
Company, whether now existing or hereafter created or
acquired, and all payments thereunder and instruments and
other Property from time to time delivered in respect thereof
or in exchange therefor, and all additions and accessions
thereto, substitutions and replacements therefor, and the
products and Proceeds thereof (collectively, the "Pledged
Debt" and, together with the Pledged Shares, the "Pledged
Collateral"); and
CASH COLLATERAL: All cash from time to time deposited
with the Collateral Agent as additional Collateral (the "Cash
Collateral").
As used herein, the term "Proceeds" shall have the
meaning assigned to it under Article 9 of the Uniform
Commercial Code, as the same may from time to time be in
effect in the State of New York (the "UCC") and, to the
extent not otherwise included, shall include, but not be
limited to, (i) any and all causes and rights of action or
settlements thereof, escrowed amounts or Property, judicial
and arbitration judgments and awards, payable to the Company
from time to time with respect to the Collateral, (ii) all
claims of the Company for losses or damages arising out of or
relating to or for any breach of any agreements, covenants,
representations or warranties or any default with respect to
or under any of the Collateral (without limiting any direct
or independent rights of the Collateral Agent with respect to
the Collateral); and (iii) any and all other amounts from
time to time paid or payable under or in connection with the
Collateral, including, without limitation, any dividends,
interest or other distributions thereon.
2. Representations.
The Company hereby makes the following
representations to the Collateral Agent:
(a) Security Interest. This Agreement creates
a valid security interest in the Collateral, securing the
payment of the Obligations. The delivery and pledge of the
Pledged Collateral pursuant to this Agreement, and assuming
the continued possession thereof by the Collateral Agent,
and all other filings and other actions taken by the Company
to perfect such security interest on or prior to the date
hereof, create a valid and perfected first priority security
interest in the Pledged Collateral securing the payment of
the Obligations. Assuming the delivery of, and continued
control and dominion over, the Cash Collateral by the
Collateral Agent, the delivery and pledge of the Cash
Collateral pursuant to this Agreement and all other actions
taken by the Company to perfect such security interest on or
prior to the date hereof, create a valid and perfected
security interest in the Collateral securing the payment of
the Obligations.
(b) Capitalization; Ownership. The authorized
capital Stock of TPI Commissary consists of 100 shares of
Common Stock, $.01 par value, 100 shares of which are issued
and outstanding. The authorized capital Stock of TPI
Transportation consists of 100 shares of Common Stock, $.01
par value, 100 shares of which are issued and outstanding.
All such Stock is and will continue to be certificated, is
duly authorized and validly issued, is fully paid and
nonassessable and is held of record and beneficially owned by
the Company. Neither TPI Commissary nor TPI Transportation
has issued nor is obligated to issue any securities
convertible into Stock of TPI Commissary or TPI
Transportation, respectively, and there are no outstanding
options or warrants to purchase Stock of TPI Commissary or
TPI Transportation of any class or kind. Neither TPI
Commissary, TPI Transportation nor the Company is a party to
any agreement voting trust or understanding (i) with respect
to the Stock of TPI Commissary or TPI Transportation or (ii)
affecting in any manner the sale, pledge, assignment or other
disposition of the Stock of TPI Commissary or TPI
Transportation, including, without limitation, any right of
first refusal, option, redemption, call or other rights with
respect thereto, whether similar or dissimilar to any of the
foregoing.
3. Delivery of Collateral.
(a) Pledged Collateral. All certificates, notes
and other instruments, if any, representing or evidencing the
Pledged Collateral at any time owned or acquired by the
Company shall be delivered to and held by or on behalf of the
Collateral Agent pursuant hereto and shall be in suitable
form for transfer by delivery, or shall be accompanied by
duly executed instruments of transfer or assignments in
blank, all in form and substance satisfactory to the
Collateral Agent. Upon the occurrence and during the
continuance of an Event of Default, the Collateral Agent
shall have the right, at any time in its discretion and
without notice to the Company or any other Person, to
transfer to or to register in the name of the Collateral
Agent or any of its nominees any or all of the Pledged
Collateral. In addition, upon the occurrence and during the
continuance of an Event of Default, the Collateral Agent
shall have the right at any time to exchange certificates or
instruments representing or evidencing Pledged Collateral for
certificates or instruments of smaller or larger
denominations.
(b) Cash Collateral. The Company shall from time
to time deposit Cash Collateral with the Collateral Agent at
the times and in the amounts required by Sections 2.5(b) and
9.1 of the Credit Agreement. Notwithstanding anything in
this Agreement to the contrary, all Cash Collateral deposited
hereunder by the Company with the Collateral Agent shall be
credited to an account maintained under the exclusive
dominion and control and in the name of the Collateral Agent,
and the Company shall have no right to draw checks thereon or
make withdrawals therefrom. The Collateral Agent shall
invest Cash Collateral in short term investments as described
in paragraph 8.6(a), (b), (d) and (e) of the Credit Agreement
as directed by the Company. Interest earned on such
investments shall be for the account of the Company.
4. As to the Pledged Collateral.
(a) So long as no Event of Default shall have
occurred and be continuing:
(i) Subject to the provisions of paragraph
4(g), the Company shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Pledged
Collateral or any part thereof, provided, however, that the
Company agrees to take or refrain from taking all actions as
are required in order to prevent the occurrence of an Event
of Default under this Agreement.
(ii) The Company shall be entitled to receive
and retain any and all dividends, principal and interest
payments and other distributions paid in respect of the
Pledged Collateral, provided, however, that any and all
dividends, principal and interest payments and other
distributions, paid or payable other than in cash in respect
of, and instruments and other Property received, receivable
or otherwise distributed in respect of, or in exchange for,
Pledged Collateral, shall forthwith be delivered to the
Collateral Agent to hold as Pledged Collateral and shall, if
received by the Company, be received in trust for the benefit
of the Collateral Agent, be segregated from the other
Property of the Company, and be forthwith delivered to the
Collateral Agent, as Pledged Collateral in the same form as
so received (with any necessary indorsement).
(iii) The Collateral Agent shall execute and
deliver (or cause to be executed and delivered) to the
Company all such proxies and other instruments as the Company
may reasonably request for the purpose of enabling the
Company to exercise the voting and other rights which it is
entitled to exercise pursuant to clause (i) above and to
receive the dividends, principal and interest payments and
other distributions which it is authorized to receive and
retain pursuant to clause (ii) above.
(b) Upon the occurrence and during the continuance
of an Event of Default, at the Collateral Agent's option,
following written notice by the Collateral Agent to the
Company:
(i) All rights of the Company to exercise the
voting and other consensual rights which it would otherwise
be entitled to exercise pursuant to paragraph 4(a)(i) and to
receive the dividends, principal and interest payments and
other distributions which it would otherwise be authorized to
receive and retain pursuant to paragraph 4(a)(ii) shall
cease, and all such rights shall thereupon become vested in
the Collateral Agent, who shall thereupon have the right to
exercise such voting and other consensual rights and the sole
right to receive and hold as Pledged Collateral such
dividends, principal and interest payments and other
distributions.
(ii) All dividends, principal and interest
payments and other distributions which are received by the
Company contrary to the provisions of paragraph 4(b)(i) shall
be received in trust for the benefit of the Collateral Agent,
shall be segregated from other funds of the Company and shall
be forthwith paid over to the Collateral Agent as Pledged
Collateral in the same form as so received (with any
necessary indorsement).
(c) In the event that all or any part of the
securities or instruments constituting the Pledged Collateral
are lost, destroyed or wrongfully taken while such securities
or instruments are in the possession of the Collateral Agent,
the Company agrees that it will cause the delivery of new
securities or instruments in place of the lost, destroyed or
wrongfully taken securities or instruments upon request
therefor by the Collateral Agent without the necessity of any
indemnity bond or other security other than the Collateral
Agent's agreement or indemnity therefor customary for
security agreements similar to this Agreement.
(d) The Collateral Agent shall have no duty of
care with respect to the Pledged Collateral, except that it
shall exercise reasonable care with respect to the Pledged
Collateral in its custody, and shall be deemed to have
exercised such reasonable care if such Property is accorded
treatment similar to that which the Collateral Agent accords
its own Property, or if the Collateral Agent acts or fails to
act with respect to the Pledged Collateral in accordance with
the written request of the Company. No failure by the
Collateral Agent to comply with any such request shall, in
and of itself, be deemed to be a failure to exercise
reasonable care, nor shall the Collateral Agent's failure to
take any steps to preserve rights against any Person or
Property be deemed a failure to have exercised reasonable
care with respect to the Pledged Collateral in its custody.
(e) The Company covenants and agrees to execute
and deliver, upon request at any time from time to time, any
notice, financing statement, continuation statement,
registration of pledge, instrument, document, agreement or
other papers and perform any other act reasonably requested
by the Collateral Agent which may be necessary to create,
perfect, preserve, validate or otherwise protect any security
interest granted herein or to enable the Collateral Agent to
exercise and enforce all rights hereunder or with respect to
such security interest. At any time and from time to time,
upon the reasonable request of the Collateral Agent, and at
the sole expense of the Company, the Company will promptly
execute and deliver any and all such further instruments and
documents and will take such further action as may be
reasonably deemed necessary or desirable in the reasonable
judgment of the Collateral Agent to obtain, maintain and
perfect the security interest granted herein, including,
without limitation, the filing of any financing or
continuation statements with respect to the security
interests granted hereby. In connection herewith, the
Collateral Agent is hereby irrevocably authorized and
empowered, as the Company's attorney-in-fact, at the
Collateral Agent's option, solely to file financing
statements or amendments thereto and to make all other
filings and to give all other notices as it shall deem
necessary with respect to any of the Pledged Collateral, all
of which may be done with or without the signature of the
Company. The Company agrees that the foregoing power
constitutes a power coupled with an interest which shall
survive until all of the Obligations are indefeasibly paid in
full in cash. The Company agrees to reimburse the Collateral
Agent on demand for any actual reasonable out-of-pocket
expenses incurred by it in connection with such matters and,
until such reimbursement, such expenses shall be a part of
the Obligations.
(f) With respect to the Pledged Collateral,
neither of the Agents nor any Bank shall be under any duty to
send notices, perform services, exercise any rights of
collection, enforcement, conversion or exchange, vote,
approve of accountings or other financial or other matters,
pay for insurance, taxes or other charges, or take any action
of any kind in connection with the management thereof, and
its only duty with respect thereto shall be to use reasonable
care in the custody and preservation of the Pledged
Collateral while the Pledged Collateral is in the Collateral
Agent's actual possession, which shall not include any steps
necessary to preserve rights against prior or third parties.
(g) The Company shall not, without the prior
written consent of the Collateral Agent, sell, hypothecate,
pledge, encumber, transfer, assign (by operation of law or
otherwise) or otherwise dispose of any of the Pledged
Collateral or create or suffer to exist any Lien upon or with
respect to any of the Pledged Collateral, except for the
security interest created by this Agreement.
(h) The Company will defend the Pledged Collateral
against all claims and demands of all Persons at any time
claiming the same or any interest therein adverse to the
interests of the Collateral Agent and the Banks.
(i) Without notice to or the consent of the
Company, the Collateral Agent may (i) release any indorser or
guarantor or any collateral given to secure any of the
Obligations (or any guaranty given in connection therewith),
and (ii) at any time, and from time to time, increase the
amount of, extend the time of payment of or renew in whole or
in part any of the Obligations for such time or times as the
Collateral Agent or the Banks may determine and all of the
provisions and authorizations contained herein shall apply to
all such renewals and extensions.
5. Additional Shares.
The Company agrees that it will not issue or permit
the issuance to the Company of any Stock or other securities
in addition to or in substitution for the Pledged Collateral,
unless immediately upon its acquisition (directly or
indirectly) thereof, any and all additional shares of Stock
or other securities of each such issuer are pledged to and
delivered by the Company to the Collateral Agent hereunder.
6. Events of Default. Each of the following shall
constitute an "Event of Default" hereunder:
(a) The Company shall fail to observe or perform
any term, covenant or agreement contained in paragraphs 4(g)
or 5 of this Agreement; or
(b) The Company shall fail to perform or observe
any other covenant or agreement on its part to be performed
or observed pursuant to this Agreement and such failure shall
have continued unremedied for a period of 30 days after the
Company shall become aware of such failure; or
(c) Any representation of the Company contained
herein or in any certificate, report or notice delivered or
to be delivered by the Company pursuant hereto shall prove to
have been incorrect or misleading in any material respect
when made; or
(d) The occurrence and continuance of an Event of
Default under the Credit Agreement.
7. Rights and Powers of the Collateral Agent on
Default.
(a) In General. After the occurrence and during
the continuance of an Event of Default, the Collateral Agent
may proceed to enforce the rights of the Collateral Agent and
the Banks hereunder by suit in equity, action at law and/or
other appropriate proceedings, whether for payment or for
specific performance of any covenant or agreement contained
in this Agreement. Without limiting the foregoing, at any
time after the occurrence and during the continuance of an
Event of Default, the Collateral Agent may:
(i) indorse as the Company's agent any
instruments, securities or chattel paper in or pertaining to
the Collateral;
(ii) take control of Proceeds, including Stock
received as dividends or by reason of Stock splits, and use
cash Proceeds to reduce any part of the Obligations;
(iii) take any action the Company is required
to take or any other necessary action to obtain, preserve and
enforce this Agreement, and maintain and preserve the
Collateral, without notice to the Company, and add the costs
of the same to the Obligations (but the Collateral Agent is
under no duty to take any such action);
(iv) release Collateral in its possession to
the Company, temporarily or otherwise;
(v) vote any Stock which is part of the
Collateral and exercise all other rights which an owner of
such Collateral may exercise; and
(vi) transfer any of the Collateral or
evidence thereof into its own name or that of its nominee(s)
and receive the Proceeds therefrom and hold the same as
security for the Obligations, or apply the same thereon.
After the occurrence and during the continuance of
an Event of Default, the Collateral Agent may, but shall be
under no duty to, demand, collect, receipt for, settle,
compromise, adjust, sue for, foreclose, or otherwise realize
upon the Collateral, in its own name or in the name of the
Company, as the Collateral Agent may determine. The
Collateral Agent shall not be liable for the failure to
enforce any contract right or instrument or for any act or
omission in connection with the enforcement of any contract
right or instrument, on the part of the Collateral Agent or
any of its officers, agents, or employees, except to the
extent determined in a final judgment, after all available
appeals, to have arisen directly and primarily out of the
gross negligence or willful misconduct of the Collateral
Agent. After the occurrence and during the continuance of an
Event of Default, the Collateral Agent shall have the right
to notify persons obligated on any instruments, securities or
contracts which are part of the Collateral to make payment
thereof directly to the Collateral Agent, and the Collateral
Agent may take control of all Proceeds of the Collateral.
The cost of such collection and enforcement, including
reasonable attorneys' fees and expenses, shall be borne by
the Company and the Company agrees promptly to pay same. The
foregoing rights and powers of the Collateral Agent shall be
in addition to, and not a limitation upon, any rights and
powers the Collateral Agent may be given by law, custom,
elsewhere by this Agreement or otherwise.
(b) Power of Sale; Enforcement. In case an Event
of Default shall have occurred and be continuing, the
Collateral Agent:
(i) may, to the extent permitted by law,
grant options to purchase, sell at one or more sales, as an
entirety or in parcels, all or any part of the Collateral,
such sale or other disposition to be made at the discretion
of the Collateral Agent at one or more private sales at such
place or places, at such time or times, and upon such terms,
including credit, as the Collateral Agent may fix and briefly
specify in the notice of sale or other disposition, to be
given as herein provided or as may be required by law;
(ii) may proceed to protect and enforce the
rights of the Collateral Agent under this Agreement by suit,
whether for specific performance of any covenant herein
contained, or in aid of the execution of any power herein
granted, or for the foreclosure of or other realization upon
the security interest provided in this Agreement and the sale
of the Collateral under the judgment or decree of a court of
competent jurisdiction, or for the enforcement of any other
right, as the Collateral Agent, in its discretion, shall
determine; and
(iii) may exercise any and all of the rights
and remedies provided by the UCC, as well as all other rights
and remedies possessed by the Collateral Agent under this
Agreement, at law, in equity or otherwise.
(c) Notice of Sale or other Disposition. If notice
of any sale or other disposition of all or any part of the
Collateral is required by law to be given, the Company agrees
that a notice sent to it at least ten days before the time of
any public sale or other disposition or the time after which
any private sale or other disposition of the Collateral is to
be made, shall be reasonable notice of such sale or other
disposition.
(d) Delivery to Purchaser. Upon the completion of
any sale or other disposition of all or any part of the
Collateral under this paragraph 7, full title and right of
possession to such Collateral shall pass to such purchaser or
purchasers forthwith upon the completion of such sale.
Nevertheless, if so requested by the Collateral Agent or by
any purchaser of such Collateral, the Company shall confirm
any such sale or disposition by executing and delivering to
such purchaser all proper instruments of conveyance and
transfer and releases as may be designated in any such
request. To the extent permitted by applicable law, every
such sale or other disposition shall operate to divest all
right, title, interest, claim and demand whatsoever of the
Company of, in and to the Collateral so sold or disposed of
and shall be a perpetual bar, both at law and in equity,
against the Company, all persons claiming the Collateral sold
or disposed of, or any part thereof, through the Company, and
its successors and assigns.
(e) Application of Proceeds. The proceeds of any
sale of the Collateral or any part thereof under this
paragraph 7, together with any other sums then held by the
Collateral Agent as part of the Collateral, shall be applied
against the Obligations in accordance with paragraph 9.1 of
the Credit Agreement.
(f) Agents May Purchase; Purchaser May Apply
Obligations Toward Purchase. At any sale or other disposition
hereunder, either of the Agents may bid for and purchase the
Collateral offered for sale, and, upon compliance with the
terms of sale or other disposition, may hold, retain and
dispose of such Collateral without further accountability
therefor. Any such purchaser at any sale or other
disposition hereunder shall be entitled, for the purpose of
making payment for the Collateral purchased, to apply any
part of the Obligations due and payable to it as a credit
against the purchase price of such Collateral.
(g) Waiver of Appraisement, etc., Laws. The
Company agrees, to the fullest extent that it may lawfully so
agree, that neither it nor anyone claiming from, through or
under it, will claim, seek or take advantage of any
appraisement, valuation, stay, extension or redemption law
now or hereafter in force in order to prevent, hinder or
delay the enforcement or foreclosure of this Agreement, or
the absolute sale or other disposition of the Collateral or
any part thereof, or the final and absolute taking of
possession thereof, immediately after such sale or other
disposition, by the purchaser thereof. The Company and all
who may at any time claim from, through or under it, hereby
waives, to the fullest extent that it may lawfully do so, the
benefit of all such laws, and any and all right to have any
of the property comprising the Collateral marshalled upon any
such sale, and agrees that the Collateral Agent or any court
having jurisdiction to foreclose the security interest
granted herein may sell the Collateral as an entirety or in
such parcels as the Collateral Agent may determine.
(h) Registration. Upon the occurrence and during
the continuance of an Event of Default, any or all of the
Pledged Shares may be registered in the name of the
Collateral Agent or its nominee(s), as the Collateral Agent
shall, in its discretion, decide. The Collateral Agent or
its nominee(s) may thereafter, without notice, exercise all
voting and other shareholder rights at any meetings thereof,
and exercise any and all rights of conversion, exchange,
subscription or any other rights, privileges or options
pertaining to any Pledged Shares as if the Collateral Agent
or such nominee(s) were the absolute owner(s) thereof,
including, without limitation, the right to exchange, at the
Collateral Agent's or such nominee's discretion, any and all
of the Pledged Shares upon the merger, consolidation,
reorganization, recapitalization or other readjustment of, or
involving, the Company or upon the exercise by the Company or
the Collateral Agent of any right, privilege or option
pertaining to any Pledged Shares. In connection therewith,
the Collateral Agent or its nominee(s) may deposit and
deliver any or all of the Pledged Shares with any committee,
depositary, transfer agent, registrar or other designated
agency upon such terms and conditions as the Collateral Agent
or its nominee(s) may determine, all without liability,
except to account for property actually received by them, but
the Collateral Agent or its nominee(s) shall have no duty to
exercise any of the aforesaid rights, privileges or options,
and shall not be responsible for any failure to do so or
delay in so doing.
(i) Specific Performance. Notwithstanding any
provisions of this Agreement to the contrary, the Company
agrees that, due to the unique nature of the Collateral, the
Collateral Agent shall have the right to demand the remedy of
specific performance in enforcing this Agreement.
8. Sale of Pledged Shares.
The Company recognizes that the Collateral Agent
may be unable to effect a public sale of all or part of the
Pledged Shares by reason of certain prohibitions and
restrictions contained in the Securities Act of 1933, as
amended, and may be compelled to resort to one or more
private sales to a restricted group of purchasers who will be
obliged to agree, among other things, to acquire such Pledged
Shares for their own accounts, for investment, and not with a
view to the distribution or resale thereof. The Company
agrees that private sales so made may be at prices and other
terms less favorable to the seller than if the Pledged Shares
were sold at public sale and that the Collateral Agent shall
have no obligation to delay sale of any such Pledged Shares
for the period of time necessary to permit the Company, even
if the Company would agree, to register such Pledged Shares
for public sale under the Securities Act of 1933, as amended.
The Company agrees that private sales made under the
foregoing circumstances shall be deemed to have been
conducted in a commercially reasonable manner. If at any
time it is necessary, in the opinion of counsel to the
Collateral Agent, that a sale of any or all of the Pledged
Shares be registered under the Securities Act of 1933, as
amended, the Company shall cooperate fully with the
Collateral Agent in connection with the taking of all steps
necessary to so register the Pledged Shares and to continue
such registration as long as deemed appropriate by the
Collateral Agent.
9. Notices.
All notices and other communications provided for
hereunder shall be given in the manner and to the addresses
set forth in Section 11.2 of the Credit Agreement.
10. Expenses.
The Company will upon demand pay to the Agents or
either of them any and all reasonable sums, costs and
expenses which the Collateral Agent may pay or incur pursuant
to the provisions of this Agreement or in negotiating,
executing or enforcing this Agreement or in enforcing payment
of the Obligations, including, but not limited to court
costs, reasonable collection charges, reasonable travel
expenses, and reasonable attorneys' fees, all of which,
together with interest at the highest rate then payable on
any of the Obligations, shall be part of the Obligations.
11. No Segregation of Moneys; No Interest.
No moneys or any other Property received by the
Collateral Agent hereunder need be segregated in any manner
except to the extent required by law, and any such moneys or
other Property may be deposited under such general conditions
as may be prescribed by law applicable to the Collateral
Agent and the Collateral Agent shall not be liable for any
interest thereon.
12. Continuance.
This is a continuing agreement and shall remain in
full force and effect so long as (i) any of the Obligations
remains outstanding or (ii) any Loan Document is in effect.
13. Successors and Assigns.
This Agreement shall be binding upon the Company
and its successors and assigns, and shall inure to the
benefit of the Collateral Agent and its successors and
assigns, provided that the Company shall not assign or
otherwise transfer any of its obligations under this
Agreement to any other person without the prior written
consent of the Collateral Agent.
14. Amendments.
With the written consent of the Required Banks, the
Collateral Agent and the Company may, from time to time,
enter into written amendments, supplements or modifications
of this Agreement and, with the consent of the Required
Banks, the Collateral Agent on behalf of the Banks may
execute and deliver to any such parties a written instrument
waiving, on such terms and conditions as the Collateral Agent
may specify in such instrument, any of the requirements
hereof or any Default or Event of Default and its
consequences; provided, however, that no such amendment,
supplement, modification or waiver shall (i) release all or
any part of the Collateral except to the extent that the
Collateral Agent shall be required or permitted to do so
under the terms and provisions hereof or of the Credit
Agreement or (ii) change the provisions of paragraph 7(a) or
14, and provided further that no such amendment, supplement,
modification or waiver shall change any of the rights or
obligations of Collateral Agent hereunder without the written
consent of the Collateral Agent. In the case of any waiver,
the parties to this Agreement, the Banks and the Collateral
Agent shall be restored to their former position and rights
hereunder, and any Default or Event of Default waived shall
not extend to any subsequent or other Default or Event of
Default, or impair any right consequent thereon.
15. Release of Collateral.
If at any time when the Collateral Agent holds Cash
Collateral, the Available Revolving Credit Commitment exceeds
$0, then, at the request of the Company and provided that no
Default or Event of Default would exist immediately before
and after giving effect thereto, the Collateral Agent shall
release such portion of the Cash Collateral then held by the
Collateral Agent (together with interest thereon) in an
amount equal to such excess.
16. Miscellaneous.
(a) No failure by the Collateral Agent to
exercise, and no delay by the Collateral Agent in exercising,
any right or remedy hereunder shall operate as a waiver
thereof.
(b) Each and every right, remedy and power granted
to the Collateral Agent hereunder or allowed at law, in
equity or by other agreement shall be cumulative and not
exclusive, and may be exercised by the Collateral Agent from
time to time.
(c) This Agreement is being delivered in, is
intended to be performed in, shall be construed and
enforceable in accordance with and be governed by the
internal laws of, the State of New York without regard to
principles of conflict of laws (other than Section 5-1401 of
the New York General Obligations Law).
(d) Every provision of this Agreement is intended
to be severable, and if any term or provision hereof shall be
invalid, illegal or unenforceable for any reason, the
validity, legality and enforceability of the remaining
provisions hereof shall not be affected or impaired thereby,
and any invalidity, illegality or unenforceability in any
jurisdiction shall not affect the validity, legality or
enforceability of any such term or provision in any other
jurisdiction.
(e) All covenants, agreements and representations
made herein and in all certificates or other documents
delivered in connection with this Agreement by or on behalf
of the Company shall survive the execution and delivery
hereof and thereof, and all such covenants, agreements and
representations shall inure to the benefit of the respective
successors and assigns of the Collateral Agent whether or not
so expressed. This Agreement may be assigned by the
Collateral Agent at any time.
(f) This Agreement may be executed in any number
of counterparts, each of which shall be an original and all
of which shall constitute one Agreement. It shall not be
necessary in making proof of this Agreement or of any
document required to be executed and delivered in connection
herewith or therewith to produce or account for more than one
counterpart signed by the party to be charged.
(g) Paragraph headings have been inserted herein
for convenience only and shall not be construed to be a part
hereof. Unless the context otherwise requires, words in the
singular number include the plural, and words in the plural
include the singular.
(h) This Agreement is the "Security Agreement"
referred to in the Credit Agreement. The Company and the
Collateral Agent acknowledge that certain provisions of the
Credit Agreement, including, without limitation, paragraphs
11.14 (Integration), 11.15 (Consent to Jurisdiction), 11.16
(Service of Process), 11.17 (No Limitation of Service or
Suit) and 11.18 (WAIVER OF TRIAL BY JURY) thereof, are made
applicable to this Agreement and all such provisions are
incorporated by reference herein as if fully set forth
herein.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date hereof.
TPI RESTAURANTS, INC.
By: /s/ Frederick W. Burford
Name: Frederick W. Burford,
Title: Vice President and
Chief Financial Officer
Accepted:
NATIONSBANK OF NORTH CAROLINA, N.A.,
AS COLLATERAL AGENT
By: /s/ Steve L. Dalton
Name: Steve L. Dalton
Title: Vice President
Exhibit 10.4
TERMINATION AGREEMENT, RECEIPT AND RELEASE
This Agreement is entered into between
Stephen R. Cohen ("Executive"), an individual residing in
Palm Beach, Florida, and TPI Enterprises, Inc., a New
Jersey corporation ("Employer") with its headquarters in
West Palm Beach, Florida. Maxcell Telecom Plus, Inc., a
Delaware corporation ("Maxcell"), joins herein for the
purposes hereinafter set forth.
WITNESSETH:
WHEREAS, Employer and Executive have mutually
agreed that Executive shall terminate his employment with
Employer effective on January 31, 1995 (the "Termination
Date"); and
WHEREAS, Employer and Executive desire to set
forth the terms and conditions of such termination.
NOW, THEREFORE, in consideration of the
payments to be made by Employer to Executive hereunder
and the mutual covenants set forth herein, the parties
hereto hereby agree as follows:
1. Executive's employment with Employer hereby is
terminated effective as of the Termination Date. That
certain Employment Agreement dated as of January 13,
1987, between Executive and Employer, as amended, and
that certain letter dated January 5, 1984, from Employer
to Executive respecting termination following a change of
control, together with any and all other documents
evidencing the terms of Executive's employment with
Employer (all of the foregoing hereinafter collectively
referred to as the "Employment Documents") hereby are
terminated and are of no further force and effect.
2. Executive waives any right to receive a bonus
for services to Employer during 1994 and 1995 and
similarly waives any right to receive pay for accrued and
unpaid vacation as of the Termination Date.
3. Employer shall tender to Executive the lump sum
of $1,150,000 in full satisfaction of all amounts due and
owing under the Employment Documents.
4. Maxcell is a party to the Maxcell Telecom Plus,
Inc. and TPI Enterprises, Inc. v. McCaw Cellular
Communications, Inc. et al. litigation (the
"Litigation"), currently pending in the Circuit Court for
the Fifteenth Judicial Circuit of Florida, in and for
Palm Beach County, Civil Division. Maxcell hereby
covenants that (i) upon the full or partial settlement of
the Litigation, in addition to the amount set forth in
Section 3, Maxcell shall pay to Executive an aggregate of
5% of the gross proceeds (without deduction of expenses
including, without limitation, legal fees) received by
Maxcell upon such full or partial settlement of the
Litigation, or (ii) upon the final, non-appealable
judgment in the Litigation, Maxcell shall pay to
Executive an aggregate of 3% of the gross proceeds
(without deduction of expenses including, without
limitation, legal fees) received by Maxcell upon
disposition of the Litigation. Maxcell agrees to make
the payments called for by this Section 4 within 10 days
of its receipt of funds as above set forth. Employer
agrees to cause Maxcell to make the payments set forth in
this Section 4. In the event neither of (i) or (ii)
occurs, Maxcell shall not be obligated to pay any
additional amounts to Executive pursuant to this Section
4. In any event, to the extent Employer or Maxcell
requests the assistance of Executive in connection with
the Litigation after the date hereof, Employer and
Maxcell agree to reimburse the reasonable expenses
incurred by Executive in connection therewith.
5. Effective as of the Termination Date Executive
hereby resigns as Chairman of the Board of Employer, as a
member of the Board of Directors of Employer and as a
member of the Executive Committee to Employer's Board of
Directors as well as all other Board committees and other
positions of authority with Employer. Executive agrees
to continue to serve as Chairman of the Board and as a
member of the Board of Directors of Maxcell until
Employer notifies Executive that it no longer desires
that Executive occupy such positions.
6. For a period beginning on the Termination Date,
and ending on the later of (i) nine months or (ii) a
final nonappealable disposition of the Litigation
(however, in no case after January 31, 1998), Employer
will continue to provide Executive at Employer's expense
with an office. For a period of eighteen months,
Employer shall provide Executive at Employer's expense
with a secretary (which shall be his existing secretary,
or if she is unable to serve or unwilling to serve at her
existing level of compensation a secretary reasonably
acceptable to Executive).
7. For a period beginning on the Termination Date,
and continuing until January 31, 1998, Employer shall
provide Executive at Employer's expense with medical
benefits as provided to him as of December 31, 1993.
8. Until January 31, 1998, Employer agrees to
provide Executive at Employer's expense with a leased
automobile comparable to that utilized by Executive at
the date hereof and to pay for the insurance thereof
provided, however, that following expiration of the lease
covering Executive's current automobile, which is to
occur in February, 1996, the monthly lease payment to be
borne by Employer shall not exceed $1,800 per month. In
addition, until January 31, 1996, Employer shall provide
Executive at Employer's expense with a driver (which
shall be his existing driver, or if he is unable to serve
or unwilling to serve at his existing level of
compensation, a driver reasonably acceptable to
Executive).
9. Until July 31, 1998, Employer shall retain the
Executive "as an employee" and maintain his "employment"
solely for purposes and as such terms are used in the
Employer's 1983 Stock Option Plan and 1984 Stock Option
Plan, provided that his employment shall no longer be
governed by the Employment Documents and he shall have no
duties during such service. During such three and one-
half year period, the Employer shall have no obligation
to pay the Executive more than a nominal amount or to
provide any employee benefits other than to maintain the
continued exercisability of his stock options, or as may
otherwise be required by this Termination Agreement,
Receipt and Release.
10. In consideration of the Employer's payments to
the Executive pursuant to Section 3, and, possibly, by
Maxcell pursuant to Section 4, which sum(s) represent(s)
significant and independent consideration for the
following release, as well as for the covenants set forth
in Section 14, except as otherwise specified in this
Termination Agreement, Receipt and Release, Executive, on
behalf of himself, and his heirs, executors, successors,
and assigns, does hereby release and discharge Employer,
its predecessors, successors and assigns, as well as its
agents, officers, directors, employees, representatives,
indemnitors, corporate affiliates, stockholders,
subsidiaries and attorneys and any and all other persons,
firms, parties and corporations that might be in privity
with each or any of them, whether named herein or not, of
and from all rights, claims, controversies, demands,
actions, causes of action or charges (filed with any
governmental agency) of whatsoever nature or character,
whether legal equitable, statutory or otherwise, arising
through or under, growing out of, regarding, relating to,
or in any way pertaining to his employment with Employer,
or its predecessor, the formation of Employer, the
termination of his employment with Employer and/or any
claims for damages or compensation arising out of or
relating in any fashion to his employment with Employer,
including, without limitation, claims under the
Employment Documents and any other agreement to which the
Executive and Employer are parties, and including claims
for damages, whether actual, compensatory or punitive and
whether such damages are now known or may later become
known, together with reasonable costs and attorneys fees;
provided, however, that Executive and his heirs,
executors, successors and assigns, do not hereby release
any rights with respect to the shares of Employer's
common stock being retained by Executive and his family
members and options thereon being retained by Executive
pursuant to Section 9 hereof. Notwithstanding the
foregoing, nothing in this Section 10 shall release
Employer or any subsidiary of Employer from any
obligation to Executive pursuant to the other Sections of
this Termination Agreement, Receipt and Release or any
rights to indemnity or advancement of expenses under
applicable law, Employer's certificate of incorporation,
Employer's by-laws or this Termination Agreement, Receipt
and Release.
11. Employer will indemnify and advance expenses to
Executive to the full extent provided in Article XI of
the Employer's by-laws as in effect immediately prior to
the date hereof (and approved by the Board of Directors
of Employer on May 15, 1989) and no change in the
certificate of incorporation or by-laws of Employer
subsequent to the date hereof will affect Executive's
rights thereunder or hereunder.
12. In consideration of the Executive's agreeing to
forego his rights under the Employment Documents and
providing the release set forth in Section 10 hereof,
which represents significant and independent
consideration for the following release, except as
otherwise specified in this Termination Agreement,
Receipt and Release, Employer, on behalf of itself and
its predecessors, successors, and assigns, as well as its
agents, officers, directors, employees, representatives,
indemnitors, corporate affiliates, stockholders,
subsidiaries and attorneys and any and all other persons,
firms, parties and corporations that might be in privity
with each or any of them, whether named herein or not,
does hereby release and discharge Executive and his
heirs, executors, successors and assigns of and from all
rights, claims, controversies, demands, actions, causes
of action or charges (filed with any governmental agency)
of whatsoever nature or character, whether legal,
equitable, statutory or otherwise (collectively,
"Claims"), arising through or under, growing out of,
regarding, relating to, or in any way pertaining to
Executive's employment with Employer as an officer or a
director, or its predecessor, the formation of Employer,
the termination of Executive's employment with Employer
and/or any claims for damages or compensation arising out
of or relating in any fashion to Executive's employment
with Employer, including, without limitation, claims
under the Employment Documents and any other agreement to
which the Executive and Employer are parties, and
including claims for damages, whether actual,
compensatory or punitive and whether such damages are now
known or may later become known, together with reasonable
costs and attorneys fees; provided, however, that
notwithstanding the foregoing, Employer and its
predecessors, successors and assigns, do not hereby
release any Claims arising from the willful misconduct of
Executive. Notwithstanding the foregoing, nothing in
this Section 12 shall release Executive from any
obligation to Employer pursuant to the other Sections of
this Termination Agreement, Receipt and Release.
13. If a party prevails in its attempts to enforce
any right or benefit under this Termination Agreement,
Receipt and Release, the non-prevailing party agrees to
reimburse the prevailing party for all fees and
disbursements of counsel, if any, incurred in connection
therewith.
14. Executive agrees to preserve the
confidentiality of the terms of this Termination
Agreement, Receipt and Release save and except for such
disclosure as provided for herein or as may be required
by law. Executive may divulge the terms of this
Termination Agreement, Receipt and Release to its
professional tax advisor/preparer, if any, and federal,
state and local income taxing authorities, for the
limited purpose of obtaining professional tax advice and
filing tax returns and any audit or other proceedings
with respect thereto. Executive will not be responsible
for information (i) that has been disclosed prior to the
date hereof, (ii) that becomes available to the public
after the date hereof other than as a result of a
disclosure by Executive or (iii) information included
within the books and records of Employer. Employer shall
issue a mutually agreeable press release regarding
Executive's termination of employment with Employer on
January 26, 1995. Each of Employer and Executive agree
not to make any public statements that are inconsistent
with such press release. Executive agrees not to make
any public statements which may reasonably be expected to
have the effect of disparaging the reputation or business
of Employer or its officers, directors, employees and
affiliates. Employer agrees not to, and to cause its
officers, directors, employees and affiliates not to,
make any public statement which may reasonably be
expected to have the effect of disparaging the reputation
or business of Executive.
15. This Termination Agreement, Receipt and Release
contains the entire agreement between the parties, and it
shall be binding upon and inure to the benefit of the
parties hereto, their administrators, personal
representatives, heirs, successors and assigns.
Executive acknowledges that he has been provided with
sufficient opportunity to seek, and has received, the
advice of counsel prior to execution of this Termination
Agreement, Receipt and Release.
16. Executive represents and acknowledges that in
executing this Termination Agreement, Receipt and Release
he does not rely and has not relied upon any
representation or statement made by Employer, or by any
of Employer's agents or representatives, with regard to
the subject matter, basis or effect of this Agreement or
otherwise, other than as specifically stated in this
Termination Agreement, Receipt and Release.
17. Should any part, term or provision of this
Termination Agreement, Receipt and Release be declared or
be determined by any court of competent jurisdiction to
be illegal, invalid or unenforceable, the legality,
validity, and unenforceability of the remaining parts,
terms or provisions shall not be affected thereby, and
said illegal, unenforceable or invalid part, term or
provision shall be deemed not to be a part of this
Termination Agreement, Receipt and Release.
18. Each party agrees to cooperate fully and to
execute any and all supplementary documents and to take
all additional actions that may reasonably be necessary
or appropriate to give full force and effect to the basic
terms and intent of this Termination Agreement, Receipt
and Release and which are not inconsistent with its
terms.
19. Maxcell agrees that it will not dispose in any
fashion of all or part of its interest in the Litigation
without obtaining adequate assurance that the amounts set
forth in Section 4 hereof, if any, will be paid to
Executive in accordance with the terms of Section 4.
Maxcell's obligations hereunder and under Section 4
hereof shall be binding on its successors and assigns.
20. This Termination Agreement, Receipt and Release
shall in all respects be interpreted, enforced and
governed by and under the laws of the State of Florida.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Witness the execution of this Agreement
effective this 26th day of January, 1995.
/s/ Stephen R. Cohen
STEPHEN R. COHEN
"EXECUTIVE"
TPI ENTERPRISES, INC.
By: /s/ J. Gary Sharp
"EMPLOYER"
SOLELY FOR PURPOSES OF
MAKING THE COVENANTS
CONTAINED IN SECTIONS 4 AND
19 HEREOF
MAXCELL TELECOM PLUS, INC.
By: /s/ J. Gary Sharp
"MAXCELL"
